Sac City Fights for Survival

By John S. DeMott

U.S. 20 slices decisively through rich Iowa farmland, where the dirt is almost as dark as the two-lane asphalt ribbon that bisects the table-flat prairie west of Fort Dodge. The highway dips, then rises gently to Sac City, a town devastated by plunging crop prices, sagging spirits and the near collapse of rural America in the past decade.

In many respects Sac City looks terminal. The population is down to 2,400, from 3,000 in 1980. Fister's Department Store is out of business. Iowa Public Service has trouble collecting electric bills from nearly bankrupt farmers, and the utility's Sac City office has dropped from six employees to two. Bill Brenney, the town's remaining optometrist, says, "People are spreading payments way out. Accounts receivable are way up." The town's children look elsewhere for jobs, and not even fathers can help sons. Says Ralph Youll, co-owner of Youll Plumbing and Heating: "We've only made money one year in the last five. My son Jerry came home from college and wanted to get into the business, but I had to tell him no."

Sac City's reluctant Scrooge is Arnold Thomas, 32, who heads the local office of the Farmers Home Administration. He has the unpleasant duty, as the agent of the Federal Government's lender of last resort, to foreclose on farmers who cannot keep up their debt payments. After a two-year moratorium on foreclosures, Thomas is now sending out letters politely advising farmers on how to avoid default through loan reschedulings, reamortization, even voluntary liquidation. "It bothers me to foreclose," says Thomas. "If it didn't, you wouldn't be human. I try to leave my job at the office. Otherwise it'll eat you up."

A little hope, though, is rolling into Sac City. After numerous meetings with an industrial search firm in Des Moines, the town leaders have turned up a hot prospect for new business: Fibercraft Inc., a division of Equity Automotive Corp. of Delano, Minn. The company will take over a 37,500-sq.-ft. warehouse abandoned in 1982 by Lear Siegler's Noble Division. Starting next month Fibercraft will turn out fiber-glass camping trailers and initially provide 40 precious jobs. In two years the payroll could rise to 100 people. "Everybody's excited," says Marilyn Hobbs, executive director of the Chamber of Commerce, beaming at a line of 50 Fibercraft job applicants last week. "For the first time in ages, people are talking positively. We've finally got something going in this town." Fibercraft comes at a price, measured on a gigantic red United Way-style thermometer at Main and Fifth, site of the town's only traffic light. To persuade the company to move to Sac City, town developers, in addition to supplying free manufacturing space, promised to pay its moving expenses from Minnesota, finance equipment and even supply some operating capital. The total: $175,000. As of last week, in just 24 days, the thermometer had risen to $165,000. The money is being raised by telephone solicitation and house-to-house canvassing. Cash is flowing in from savings accounts, mattresses, old socks and garage sales. Older farmers in surrounding Sac County, whose debt is low because their land is paid for, have dug deep and made contributions of $5,000 or more. The Sac City Sun Star, which has cut its publication cycle from twice to once a week as the town has suffered, runs pledge coupons along with ads from the two supermarkets and local auto and farm-implement dealers. "No contribution is too small," says Hobbs. "We're practically raiding our kids' piggy banks." One high school sophomore gave $10 out of his accumulated allowance.

The fund drive is reminiscent of the fervent, evangelical campaigns organized by citizens in economically ravaged Southern towns after the Civil War to raise money to build textile mills. Residents do not feel the money is being extorted. To them, donations are an investment in their future, in an economy less dependent on farming. Too small to qualify for federal development grants, Sac City and thousands of other towns in rural America must raid residents' pockets for the money to lure companies that can provide jobs.

"Things are different out here," says Dennis Holcomb of Shive-Hattery Engineers in Des Moines, whose search helped find Fibercraft for Sac City. Says Holcomb: "Iowa is full of small towns that can't come up with tax exemptions or low-interest loans the way bigger cities can in the East. So they turn to their friends and neighbors. It's truly a heartening thing to see."

To raise even more money, Equity Automotive will issue stock, at $1 a share, to those who contribute to the fund-raising campaign. In return, Fibercraft has promised to name a Sac City official to its board, giving the community some voice in what the plant does after it moves in. Says Anne Lubeck, who runs the Corner Store at 16th and Main: "It will be such a psychological lift. We haven't had a lot to celebrate around here for a long time."

Even as Fibercraft moves in, Sac City continues to lose other businesses. Within the past three weeks an engine-repair facility and a veterinary-supply firm closed their doors. But another manufacturer has talked about taking over the vacated quarters of a seed processor. Said City Administrator Gary Mahannah: "We're fighting a holding action until the farm economy turns around. The trick is to survive until that day comes." So far, the score is about even between Sac City and the mortgage payments that were due yesterday.

With reporting by Lee Griggs/Sac City