💼 New John D. Rockepella

briefcase | invest smarter | issue #94

📚 BRIEFCASE'S BOOKSHELF

We recently discovered a newsletter called The Offer Sheet. If you're into Airbnb / short-term rental investing, this is the perfect newsletter. They curate a daily list of the best and/or most unique 8-12 properties hitting the market to save you hours of searching. Recommend you take a look at theoffersheet.substack.com.

🏭 Meet Pella, Iowa

Let’s talk about Pella, Iowa, where not to be outdone by Florida, a nude man was arrested last month following a short police chase down Main Street.

After being arrested outside the headquarters of the Pella Corporation, the intoxicated and em-bare-assed man confessed to fulfilling a dare from friends. See what we did there? You're welcome.

I mean, it was a dare 🤷🏻‍♂️.

Welcome to Pella, home of Holland-inspired architecture and the birthplace of Wyatt Earp.

The streaking incident wasn't even the most exciting thing happening in Pella. Recent media coverage tells an amazing story we wanted to cover, which highlights the ongoing attempts to revitalize our small towns.

Pella: A Touch Of Dutch

Pella is a quaint college town near Des Moines, boasting a beautiful Dutch-style canal through downtown and several manufacturing companies. One of which is a large window and door company called Pella Corp., which has offices all over the country.

Pella's population in 2021 was estimated at around 10,000 residents. In 2010, the population sat at 10,000, and again at 10,000 in 2000. The same stagnated growth that many small towns across the country feel is highly visible in Pella.

And it's why Pella Corp. decided to take action. According to the news, the company found it hard to attract and retain talent in a community that has had stagnant growth and few community amenities for residents.

"We just didn’t have the amenities that people we were trying to recruit would expect.” — Pella Corp CEO Tim Yaggi
“In order to stay in the community, Pella is going to need to grow.” — Pella Corp Chairman Adam Farver

Pella Corp has earmarked $36 million for various investments in the city including home construction, a child-care facility, an indoor entertainment facility, restaurants, a gym, a recreation center, a grocery store, and much more.

😖 Housing — Less than 25% of Pella Corp's 2,500 employees actually live in Pella. Not because they don't want to, there's just not enough housing available.

😀 Answer: Pella Corp bought 160 acres to build more housing. And they aren't alone, forward-thinking companies like Disney, JBS, and Cook Devices are also doing the same in other parts of the country.

😖 Fun — Outside of windmill makeout sessions, steaking, and a popular tulip festival, there's not a whole lot to do in the town.

😀 Answer: The company is funding new gyms, a recreational facility, pools, a rock-climbing wall, and historical events. These new amenities will help retain and draw in new residents. Further, Pella Corp is covering the construction and startup costs for some new businesses in the city.

😖 City — Given residential growth has been stagnant, the city coffers have also been dry.

😀 Answer: $30 million from Pella Corp to invest in amenities to draw in new residents.

To compare, the city's entire annual budget is $47 million. The beauty of the private investment from the company is that by attracting more residents through business investments and revitalization, the city's tax revenue will grow dramatically.

According to the WSJ:

Pella executives say the company tried more traditional solutions to boost its ranks. It raised pay, automated some tasks in factory work to widen the appeal, and doubled down on recruiting from the local high school and college—but with limited success. Tapping a larger labor pool isn’t easy.

😖 Childcare — Prospective Pella Corp employees have had to turn down job offers because they can't find any childcare.

😀 Answer: A brand new childcare facility funded entirely by the Pella Corp for employees.

😀 Not Just Business — The company has also bankrolled the not-for-profit Pella Historical Society, which has increased its educational and programming offerings as well as renovated several historical sites such as the Wyatt Earp House.

So What? Private enterprises will be the savior of small towns. Whether it's anchor employers like Pella Corp. or real estate developers, these private companies will drive improving the livability of our towns and cities, and increase the housing supply. Let's get out of their way.

On that note, let's all go streaking...Pella, here we come!

Up next, on briefcase...

...My son won't stop running around naked, so I spray him with Windex, you know...to prevent streaking.

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Written By Brad Cartier