(FORTUNE Small Business) – Bounded by pine-covered hills, sparkling lakes, and mountains whose rounded peaks rub the bellies of passing clouds, the small city of Coeur d'Alene, Idaho, should be known best as a tranquil tourist retreat. And with its mining and timber jobs fading into the town's colorful history, tourist dollars are a precious commodity. Instead, Coeur d'Alene has become infamous for something more sinister than wickedly beautiful scenery. This slice of the Idaho panhandle is also home to the Aryan Nations, a neo-Nazi group that has marched through downtown Coeur d'Alene in each of the past two years.

Tired of seeing their city's image trashed by media-hungry white supremacists, local small business leaders are waging a publicity war to restore Coeur d'Alene's appeal. Mayor Steve Judy and a search committee of store owners and local residents are hiring the city's first full-time "Aryanbuster." That's the nickname; the official title is human rights coordinator. Mayor Judy expects the position will be filled by mid-summer. Whoever gets hired will have to handle a tough set of responsibilities: fielding media inquiries and working with local businesses and community groups to develop an ad campaign promoting the city as a tolerant and tourist-friendly haven, not a hate-group stronghold.

For Coeur d'Alene's tourist-dependent shops, hiring an Aryanbuster is serious business. After winning a series of lawsuits aimed at stopping them, nearly 100 Aryan Nations members and supporters (many of them from out of town) have organized annual marches down Coeur d'Alene's streets. Brandishing swastikas, spouting racist rhetoric, and shouting homophobic and anti-Semitic slogans, the Aryan Nations' members and supporters have attracted lots of media attention and scared away plenty of tourists. " 'Oh, you're from that Aryan Nations place,' " says local jeweler Ken Burchell, mimicking the response he gets when traveling out of town.

Local retailers should have plenty to be proud of, from the spectacular scenery to their quaint shopping district and the world's largest floating boardwalk. Officials estimate that tourists' dollars account for roughly 22% of the county's retail revenues. And 30% of Coeur d'Alene's jobs now involve serving vacationers. "If just 1% or 2% of our tourist business drops off, you're talking about losing thousands of people and lots of money," says Burchell, who is also president of the city's 325-member Downtown Association.

Of course, Aryan Nations leader Richard Butler dismisses his neighbors' financial concerns and ridicules the idea of an appointed Aryanbuster. "The dollar rules everything they do," he says. "Our work is to warn the white race of their extinction."

Making that "work" harder to do may be hard labor for Butler's new, officially anointed opponent. Fortunately, he or she will soon be getting some help. The Idaho Association of Cities hopes to hire other Aryanbusters throughout the state, especially in the Idaho panhandle, where some ten hate groups are based. Republican Gov. Dirk Kempthorne and the state legislature have also earmarked $100,000 to spend on a campaign to reclaim the state's tarnished image.

Coeur d'Alene's officials and business owners admit they may never silence Butler and his supporters. But they hope their Aryanbuster can at least send out the message that Idaho has more to offer visitors than potatoes and Brown Shirts.