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New Outposts: Granbury, Texas, Isn't a Rural Town: It's a `Micropolis' --- Census Bureau Adopts Term For Main Street America, And Marketers Take Note --- Beans, Ribs and Starbucks

By Michael J. McCarthy

1961 words

3 June 2004

The Wall Street Journal

A1

English

(Copyright (c) 2004, Dow Jones & Company, Inc.)

GRANBURY, Texas -- During the day, people stroll through this town's historic limestone square beneath a 19th-century clock tower. At night they head to the drive-in movie theater. The blossoming of the Texas bluebonnets makes headlines in the local newspaper. The town mayor just won his fifth term, running unopposed.

"The city's like comfort food," says Bill Hooks, a city council member.

It's also growing strongly. Between 1990 and 2000, the population of Granbury and surrounding Hood County increased 40%, to 48,000. A sparkling lake, affordable housing and the promise of a quieter life have drawn many people to Granbury, out in cattle country some 70 miles southwest of Dallas.

Marketers and demographers are starting to pay attention to places like Granbury: growing population centers far removed from the nearest large city, often 100 miles or more. They are drawing refugees both from rural America and suburbia, offering some of the cultural attractions and conveniences of cities without all the expenses and liabilities of urban sprawl. Telecommuting and Internet mail-ordering can make it easier to be in the fast lane of trade and commerce. Employers find it easier to open a factory or an office park in these towns, which have plenty of room for expansion and low real estate and labor costs, than in traditional metropolitan areas.

Last summer, the U.S. Census Bureau officially recognized these places as "micropolitan" areas. To qualify, a locale must have at least one town of 10,000 to 49,999 people -- and it can have several of these -- and proportionally few of its residents commuting outside the area. The government figured there were 567 such micropolises in the continental U.S. More than 28 million people, or one in 10 Americans, reside in them.

Some companies have begun to crack this market, much as Wal-Mart Stores Inc. previously blazed through rural America. American Profile, owned by privately held Publishing Group of America, is a kind of folksy Parade magazine distributed as part of Sunday newspapers in small towns and rural areas. Targeting micropolises such as Lebanon, Mo., and Hereford, Texas, it has vaulted from nowhere in just four years to build up a circulation of nearly six million, more copies than People or Sports Illustrated sell each week.

Holiday Inn Express has been opening two new hotels a week for about two years. Many are in micropolitan areas such as Defiance, Ohio; Alamogordo, N.M.; and Elko, Nev., which is 184 miles from the nearest metropolitan area, Salt Lake City, and home to the National Cowboy Poetry Gathering. Movie Gallery Inc., a public company in Alabama, has rapidly become one of the largest video-rental chains nationwide. Aside from Granbury, it operates in micropolitan towns from Beaver Dam, Wis., to Yazoo City, Miss. In the past three years, Movie Gallery's stores and revenue more than doubled, to about 2,100 and $700 million respectively.

In Marion, Ohio, whose micropolitan area has 66,000 people, local development officials have enticed several big manufacturers, some from Canada, to fill the void after rustbelt industrial fixtures shut their doors. Silver Line Building Products Corp., a New Jersey company that opened a large factory to make home window frames at Marion's Airport Industrial Park, got its own runway so its corporate jet could taxi directly to the plant.

"One thing micropolitan areas offer is a certain nimbleness in getting things done," says Dave Claborn, president of an economic-development agency called Marion Can Do! "Companies can't afford to wait around for the bureaucracy delays of larger cities."

For decades, Census Bureau officials viewed the country as metropolitan areas, which are defined today as cities of 50,000 people or more and their suburbs, and everything else. That left vast expanses of the country labeled simply as "rural." Michael Ratcliffe, chief of the bureau's population distribution branch, says the micropolitan category was created after a re-examination of population shifts and commuting patterns. "Out in the vast nonmetropolitan part of the country, there are urban population centers that are quite important," he says. "Some of these communities were in effect lost to our analysis."

More than three-quarters of micropolitan areas gained population between 1990 and 2000. Overall they grew more slowly than the U.S. as a whole -- 8% vs. 13%. A handful of micropolitan areas, such as Silverthorne, Colo., and Palm Coast, Fla., far outpace the average, with population expanding more than 50% in the last decade.

Traditional metropolitan areas consisted of an anchor around which suburbs sprouted. But the settlements of micropolitan areas are much more diffuse, with an expansive border and a typically small core. According to a report by the Metropolitan Institute, a research arm of Virginia Polytechnic Institute and State University in Blacksburg, Va., "the `suburban' growth of big Micros is not `outside' anything because there is no real center to be outside of -- and no `urban' to be a `sub' of."

"Micropolitan areas have reached a population threshold, a take-off place, and some places might become metro areas on their own," says Robert Lang, the institute's director.

As of the 2000 census, the largest was Torrington in northwestern Connecticut with a population of 182,193. The smallest, Andrews, Texas, squeaked in with 13,004. Some are historically or culturally notable, like Gettysburg, Pa.; Hannibal, Mo., boyhood home to Mark Twain; and Mount Airy, N.C., hometown of actor Andy Griffith and a model for his 1960s TV show.

A micropolitan area under the Census Bureau's definition isn't to be confused with an "exurb," a less-precise term coined in the 1950s for an outlying suburb. Exurbanites typically commute to a large city and keep other ties to it.

Thriving micropolises attract people like Teri Mickle, 40 years old, who relocated to Granbury from Dallas about three years ago. "My husband was coming home in terrible traffic one day on the LBJ [Highway] and he said: `We're moving,' " she says.

Ms. Mickle, a real-estate agent, and her husband, a private-jet pilot, frequently visited Granbury and its vast man-made lake before moving here. A recent report commissioned by Granbury found that the area generates more than $30 million a year in tourism, with about 70% of recreational spending by out-of-towners.

Granbury city officials hope to draw more industry to help with the tax burden. The largest employers currently include the school system, the hospital and the Wal-Mart store. A little more than one-tenth of the 19,000 jobs in Hood County are in construction. More than 1,200 people work in real estate.

A weekend influx of visitors was one reason Starbucks Corp. opened its first coffee shop in Granbury last September. Having swamped the upscale parts of big cities, Starbucks is looking for growth in smaller places with the hope of becoming a "community gathering place," says Mark Wesley, the company's senior vice president for store development.

Granbury surfaced on Holiday Inn Express's radar screen more than two years ago. Besides business travelers, the chain was counting on festivals in the town that draw tens of thousands of visitors. One is the Bean and Rib Cook-off, which honors town namesake Hiram B. Granbury, a Confederate general. The two-story inn is doing "phenomenally well," says Jenifer Zeigler, a Holiday Inn Express senior vice president.

Holiday Inn Express continues to hunt for small towns to locate its low-amenity hotels, which typically have around 80 rooms and charge roughly $75 a night. With more than 1,300 hotels in North America, it is one of the fastest-growing chains in the industry.

American Profile magazine approached the Hood County News, Granbury's three-day-a-week paper with a circulation of 10,000, in 2000. American Profile, which is sold to local papers as a Sunday insert, has found a good deal of similarity in lifestyle and attitude in small towns nationwide. It features stories on flag-waving parades, fishing as a pastime and school coaches who marshal football players into community volunteers. One cover story, titled "The Hometown Carnival," told how residents in a Kansas county pulled together to form their own annual fair, with rides costing only a quarter, after a traveling carnival failed to show up one year and left the town children crestfallen.

"We kind of validate how these people live in these communities," says Jerry Lyles, a vice president at American Profile who works with publishers. "We go in with a product that is kind of nostalgic, kind of calming."

Publishing Group of America, based in Franklin, Tenn., has been researching the character of small-town America more thoroughly than many companies. Carried in more than 1,100 newspapers, American Profile is mostly found in micropolitan areas or more remote places now referred to as "deep rural." In its markets, the median age of 46 is a decade or so older than the country overall and the median annual income is a bit lower, at $38,144. But people in those counties are more likely to have paid off their mortgages, attend country music concerts, have a satellite dish and serve on a church board, the magazine says.

Richard Porter, chief executive of American Profile, says the hardest part of selling ads has been convincing national companies that pockets of the rural U.S. are worth pursuing. "The first stereotype of a rural American isn't always an accurate one," he says. Yet the magazine, which he expects to be profitable this year, has snagged Procter & Gamble Co., Kellogg Co. and Bristol-Myers Squibb Co. as advertisers.

Hood County's population pushed above 40,000 a few years ago, though Granbury is still serviced by a volunteer fire department. Some people say the digging of man-made canals for water-skiing caused their homes to flood. Along one stretch of the main drag, U.S. 377, more than 33,000 cars travel these days, up 38% from a decade ago.

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"Granbury's gotten better in every regard, except traffic," says Jerry Tidwell, the 58-year-old publisher of the Hood County News, who moved to town in 1979.

Not far outside the historic square, the outskirts of Granbury are becoming a blend of pastoral and strip-mall America. Along 377, there's the Arrow Feed & Ranch Supply store, the Wal-Mart and the Chevrolet dealer. There's also a Chili's, Long John Silver's and Arby's.

In Granbury, the median household income was nearly $36,000 in 2000, up from $27,000 in 1990. The average price of a three-bedroom, two-bath home is $122,149. Rents average $325 to $475 for a one-bedroom apartment.

Byron and Liz Threatt moved here less than a year ago. "It was a nice, quaint town," says Ms. Threatt, a 46-year-old flight attendant and native of Southern California. "The life-pace is slower, the people are friendlier." She and her husband, a pilot for American Airlines, bought a 2,900-square-foot home and a guest house along 260 feet of waterfront for $400,000. "Sometimes we [water-]ski before breakfast," says Ms. Threatt.

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Boomtowns

Micropolitan' areas with the largest population gain between 1990 and 2000

2000 % GROWTH

CITY POPULATION SINCE 1990

1. Silverthorne, Colo. 23,548 83%

2. Pahrump, Nev. 32,485 83

3. Edwards, Colo. 49,471 77

4. Palm Coast, Fla. 49,832 74

5. The Villages, Fla. 53,345 69