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Ken K. Thompson Jewelry began construction this month on a new building at the corner of Paul Bunyan Drive Northwest and Ridgeway Avenue Northwest across from Perkins. Monte Draper | Bemidji Pioneer

Annual Report | Retail: Businesses provide stability for economy

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news Bemidji, 56619
Bemidji Minnesota P.O. Box 455 56619

BEMIDJI - Timing can make or break a retail business or a retail community, and when the nation's economy went sour a few years ago, Bemidji was in a position to withstand the worst of what was to come.

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"My read is that when the economy hit the skids in late 2008, 2009 and early 2010, Bemidji didn't feel it," said MJB Home Center owner and former Downtown Development Authority president Mike Smith.

"But in 2010 and 2011 it hit us."

According to the Minnesota Department of Employment and Economic Development, in the second quarter of 2011 there were 3,093 people employed within retail trades in Beltrami County. That's up slightly from the previous year, when 3,007 people worked in retail trade, and more than any previous year within the past decade in what has been a fairly stable industry for the area.

Another measuring stick - gross sales tax collections - show Bemidji continues to see growth. In 2011, the city collected more than $1.9 million in sales taxes, up 3.8 percent from 2010 and nearly 21 percent since 2006.

The pipeline construction project was a financial shot in the arm for Bemidji retail outlets, according to Smith, and as those pipes were being laid the time came to build the Sanford Center.

"The pipeline and the events center projects created many jobs and there was extra money flowing through the town," Smith said. "During the pipeline project there wasn't a place to live to be found in Bemidji."

But the financial and retail situation changed in 2011 when Minnesota's state government shut down.

"When you look at what percentage of our community is dependent on the state and its offshoots, that shutdown really hurt our economy," Smith said. "But right now I think the retail in Bemidji is solid. The retail (stores) that made it now are in positions to maintain."

The economy is slowly regaining its stability and people appear to have a little more change in their sock drawers than they did a few years ago. In Bemidji, however, there are more outlets vying for that money.

"When you have the big box stores in a town the (financial) pie gets bigger but those big boxes will also take a bigger slice," Smith said. "What the small retailer has to do is provide the products and the services.

"But there is a place for both retail and big box in this town," he added.

Communities like Walker and Park Rapids are dependent upon small retail outlets and it is unlikely, because of their smaller size, that the big boxes will try to make an imprint.

Smith, however, believes that a mix of specialty stores and large retail outlets is better for the overall well-being of Bemidji as a community.

"Bemidji has become a regional center," Smith said. "We have Sanford clinic and hospital, we are a huge base for county and state government and we have Bemidji State.

"I think the future of retail here is bright," he continued. "The Downtown Development Authority is doing great things. They are creating traffic and creating promotions But the retail stores can't sit tight and they have to stay lean. The last three years haven't been much fun (for the retailers) but I think the ones who did the right things then are doing fine now."

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