Hot Towns

By Lisa Takeuchi Cullen

November in New York City has its charms. Ice skaters twirl in Central Park, Santa sets up shop at Radio City and department stores unfurl their holiday finery. But to Delia Everett, November meant a chilly wait for the 6:45 a.m. bus to her Manhattan job as an executive assistant. To her husband Jim, who had lost his job as a steam fitter, it meant fixing heaters and patching plumbing in their Mahwah, N.J., apartment building, where he worked as assistant super to cover the rent. To their two children, it meant gray afternoons watching TV in their two-bedroom, ground-floor apartment.

November on Florida's Gulf Coast makes a much different postcard. Newly planted palm trees line swaths of land buzzing with the construction of one business complex after another. In a spiffy new housing development, the Everetts relax under the vaulted ceilings of their living room, gazing out through glass doors at their pool and hot tub overlooking a lake. A year ago, Delia's employer, magazine distributor Source Interlink, decided to consolidate its several big-city offices and relocate to Bonita Springs, Fla. (pop. 32,800), a fast-sprouting town on the booming stretch of coastline between Fort Myers and Naples. The company offered jobs to both Everetts--Delia, 42, as assistant to the CEO, and Jim, 43, as office-services manager. It took the family one visit to decide. Delia, who had lived in apartments in the New York City area all her life, still looks a little stunned. "I can't believe," she says, "the life we have here."

While the great migration from Rust Belt cities to such Sun Belt giants as Phoenix and Houston has been under way for years, what's new is that the hottest places in America to find jobs are small and midsize towns, and not all of them are in the warmer latitudes. Burgs ranging from Fargo, N.D., to Fayetteville, Ark., to Reno, Nev., are leading the U.S. in job gains. The Milken Institute, a private think tank, found in its annual ranking of cities with the most job growth that 11 of the top 20 had populations well under 1 million. The Fort Myers region (pop. 420,000) added 17,500 new jobs between July 2000 and July 2003; the Fayetteville area (pop. 320,000) added 16,300. "That might seem surprising to some," says Ross DeVol, author of the study, but many smaller regions share characteristics that act as job magnets: lower costs, tax breaks for employers, funding for entrepreneurs and a deepening pool of skilled and educated workers. Many are college towns, seats of government or home to a big company that nourishes others. Thanks to the Internet and to satellite technology, a company in Iowa City can be as connected as one in Los Angeles--minus the traffic jams.

With pickings slimmer in major cities, job seekers who once turned up their noses at small-town positions are now eagerly foraging for them. Dan Zumbiel, 34, was an ad copywriter in Manhattan, moving up at powerful agencies Ogilvy & Mather and DCA Advertising. Then came Sept. 11, 2001, followed by his layoff. He found the job market so tight that as a survival strategy, he expanded his job search to smaller markets. So when an agency in Sheboygan, Wis., called, "I thought: 'I've got nothing keeping me in New York, so I might as well give it a shot.'" While checking out the agency Jacobson Rost, he grew impressed by its work for clients, including Harley-Davidson and Sargento Foods, and by its professionalism. "I sort of made the mistake of thinking I was going to be the big fish in the small pond," he says. "But as soon as I started to look at the work here, I quickly realized that wasn't the case." He accepted the offer.

Anthea Fallen-Bailey, 47, had mapped a course for employment after receiving her master's degree in geography in the summer of 2001, and it did not include the Great Plains. Struggling with a flat job market around Portland, Ore.--"there was nothing there"--she happened on a job posting for Navigation Technologies, a digital mapping firm. "I was really surprised they were in Fargo," she says. After a month of researching the company and the area, she applied and was quickly offered the job in July.

How do these towns come up with the jobs? Companies don't move to places like Fargo on a whim; it generally takes money in the form of incentives. Arkansas has spent $700 million on roads and airports around Fayetteville over the past decade. Cities like Fort Myers and Santa Fe, N.M., offer tax-abatement packages to businesses big and small in exchange for creating jobs. So do lots of places, including big cities. That's why livability is often the clincher.

Reno has a special advantage in its geography--it is smack against the California border and treats its high-cost, highly regulated neighbor the way a hummingbird does a flower. From 2000 to 2003, Reno has lapped up major operations of 17 California companies including Sun Microsystems and Charles Schwab, according to the Economic Development Authority of Western Nevada, in addition to the 700,000-sq.-ft. distribution facility Amazon.com set up in 1999 and the third roasting-and-distribution center Starbucks opened. Microsoft, Dell and Pfizer all have operations there. An estimated 200,000 people migrate from California to Nevada each year, many with businesses.

Aki Korhonen, 34, is one of them. PC Doctor, his diagnostic software company based in Emeryville, Calif., was mushrooming with clients like IBM, Hewlett-Packard and Intel--but state taxes and high costs were a drag on growth. He spent a year checking out Seattle, Phoenix and Las Vegas, then bet on Reno. His employees took some persuading. Mohidul Saad, 38, a software engineer, learned of the impending move this past summer. The Bangladeshi native and his family had grown attached to their ethnic community in the Bay Area and thought of Reno as a dust-choked gambling town. They have since changed their minds. Weeks ago the Saads moved into a large home with a garden and pool--a far cry from the modest town house they had planned to buy in San Francisco--and are even meeting other Bangladeshis. The excitement of a town on the move is infectious. "Something," says Saad, "is happening here."

In Arkansas, that excitement emanates primarily from one company: Wal-Mart. State officials say Wal-Mart alone was responsible for bringing 3,000 jobs to northwest Arkansas in 2002--in part because its biggest vendors maintain a presence near its Bentonville headquarters. A study by the University of Arkansas projects the population of Benton and Washington counties (which include Fayetteville and Bentonville) will nearly double by 2025, to 680,000. Unemployment in the region is about 2.5%, less than half the national average.

As steel towns had in the past, Wal-Mart has a multiplier effect, creating work for outside service providers. The Tobees want a wedge of that pie. Cary, 39, and Cheryl, 36, moved their video-production business in July to Fayetteville from Fort Smith, Ark., and have already bid on business with Wal-Mart. "I am hoping for the overflow," says Cary. "You never know when they will need help with a project."

Relocators warn that acclimating to smaller-town life can take time, particularly for former city slickers addicted to a fast pace. Carol and Kevin Conway fled their lives as Silicon Valley technology executives in the mid-'90s and now run business-service companies in Fort Myers. At first, says Carol, 47, "I was staggered by the lack of competitive drive, the lack of the push-push-push mentality." It took a few years for her to learn that "people who move to secondary markets like this have got to chill." She's even stopped wearing panty hose to work.

Landing a job for the "trailing spouse" can also be a bigger issue in a smaller town. When Gary Hengstler, 56, was offered a job as director of Reno's National Center for Courts and Media, a training facility for judges and court personnel, his wife hesitated. The move meant that Laura, 48, would have to leave her job as real-estate editor at the Chicago Sun-Times--not to mention their friends and family. But a few visits persuaded her, and now she edits an in-flight magazine. Their only worry about Reno, says Gary: "I'm afraid it will eventually become too popular." --With reporting by Steve Barnes/Fayetteville, Sarah Sturmon Dale/Minneapolis, Dee Gill/Fort Myers, Noah Isackson/Chicago and Laura A. Locke/Reno

With reporting by Steve Barnes/Fayetteville, Sarah Sturmon Dale/Minneapolis, Dee Gill/Fort Myers, Noah Isackson/Chicago and Laura A. Locke/Reno