Economic development is a deep, constantly shifting topic affected by technological, sociological, economic and generational trends.
For busy decision makers, staying in-the-know can be difficult. Here, a few planning and development professionals share notable concepts, new and old, affecting the world of economic development.
After decades in the suburbs, populations are returning to cities and large metro regions. This migration has made city and metro areas more attractive to businesses wanting a millennial workforce.
It's also changing regional dynamics.
“Cities and suburbs in or near Greater Metro regions need to be more collaborative, not competitive, in their economic development efforts, knowing that people may live in one suburb and work in another,” says Andrew Dane, SEH planner and downtown revitalization specialist.
Smaller outstate communities wanting to compete with urban areas must invest in technology to be more competitive.
“Outstate communities need to invest in technology so re-booters and start-ups can effectively compete with more urban locations,” says Dane. “Quality of life amenities also need to be in place, including your typical rural qualities such as trails, parks, access to the great outdoors … but also vibrant downtowns, however small, with social congregating sites such as coffee shops or art houses.”
The downtown area has long been considered an engine of commerce, a place where businesses locate to drive prosperity. But the competitive advantage of downtown is changing.
“It’s becoming more and more important to think about our downtowns as Central Social Districts and not simply Central Business Districts. A downtown thrives when we create a place where people not only do business, but also decide to live, gather, and celebrate with loved ones,” says SEH downtown specialist Andrew Dane.
According to Dane, when we start thinking about downtown as the Central Social District, we uncover how and why people come downtown in the first place.
“Downtown is no longer primarily for shopping or work. It’s more about entertainment, dining, farmer’s markets, living, exploring, and actively participating in the artistic and cultural activities of the community,” says Dane.
According to the American Planning Association, well-designed parks and trails boost property values and increase municipal revenues. They also attract knowledge workers, affluent retirees and homebuyers. That’s why it’s rare to find a project today that doesn’t have an economic development metric – even public realm investments like parks and trails.
“It is becoming increasingly common today for the design or location of amenities like parks and trails to be evaluated not just on programming or aesthetic standards,” says SEH planner and landscape architect Jon Ruble. “These projects are also being judged on their ability to increase property values and to attract and retain residents, employers and their employees.”
Adds Ruble, “In fact, economic development is one of the primary evaluation criteria for one of our largest funding entities in the region, the Northwest Indiana Regional Development Authority.”
On the Dunes Kankakee Trail in Porter County, Indiana, (above) economic sustainability was viewed on par with social and environmental considerations. The SEH planning and landscape architecture team incorporated economic development considerations into the design during trail routing evaluation. The trail alignments that connect business districts, potential new development areas and tourism destinations received a higher priority for completion.
Planning pundits have long believed well-designed streets were good for business. Now, a recent report by the New York City Department of Transportation helps solidify this stance, providing more proof that well-designed, sustainable streets do more than increase safety and reduce environmental impact.
“Better streets attract more people and more activity, thus strengthening both communities, the businesses that serve them and the city’s economy as a whole,” writes New York City DOT Commissioner Janette Sadik-Khan in the report.
In one case study, retail sales for businesses along a sustainable new street — with traffic calming, tree plantings and improved bike and pedestrian facilities — outperformed two comparable streets by nearly 25 percent.
In Central City, Colorado, (above) downtown infrastructure had deteriorated to the point of impacting businesses. SEH collaborated with residents and businesses to rebuild main street with a more pedestrian-friendly, and business-friendly, sustainable street design.
RELATED CONTENT: HOW TO DEVELOP A STRATEGIC ECONOMIC DEVELOPMENT PLAN
The concept of economic development is grounded in job creation and retention. But remember those jobs still need people, and those people need the right skills for the job.
“What is the composition and availability of your existing workforce?” asks Mike Larson, community development specialist. “Be sure to understand the skills and availability of workers in your region. With that knowledge, your efforts will be more fruitful.”
While workforce development strategies vary by location and sector, success will be dependent on having a good, realistic snapshot of the skills of your workforce and its capabilities. Larson says a good pre-assessment of your workforce will help determine whether a sector- or place-based approach to workforce development is best for your region.
Parking facilities use land. When that land is tied up to hold cars rather than businesses, there is a potentially lost opportunity, especially in higher density urban areas.
Recent findings show context-appropriate parking management programs can yield surprising results in reducing congestion and improving downtown vibrancy. It’s a matter of managing the land so parking facilities don’t replace opportunities that might instead contribute to the economy.
In the Minneapolis metro area, park and ride facilities connected to strong transit programs, like the 28th Avenue Station above, help reduce the downtown parking footprint.
Headlines in the business section of major newspapers are filled with relocation announcements of multi-million dollar companies relocating hundreds of jobs. Attracting this kind of company is difficult -- there aren’t many of them and the ones available are highly sought after by other regions or communities.
What happens when you stop looking for a single company with 100 jobs and, instead, identify and assist five smaller companies already in your region able to grow 20 jobs each? That’s the underlying principle behind economic gardening, a concept initiated in Littleton, Colorado in 1987.
Since then, it’s grown throughout the country.
Is economic gardening right for your community? Learn more at the International City/County Management Association website.
Certain economic development programs require a high degree of specialization to exploit, including:
As a result, many niche development firms have emerged, specializing in these programs. But this specialization comes at a cost, says SEH community development specialist Jim Rosenberg, who’s been involved in municipal economic development since the 1990s.
“There's an old saying that 10 percent of anglers catch 90 percent of the fish. Similarly, capturing the benefits of certain economic development programs requires a degree of expertise not realistic for one-project investors/developers,” says Rosenberg. “It also falls outside of the typical qualifications of in-house staff in smaller municipalities.”
The solution, according to Rosenberg, is less about finding the right program, and more about picking the right partner.
“Clients need to team with consultants who understand how to successfully leverage these resources, while ethically pursuing the public good,” advises Rosenberg.
All projects are not equal. Municipalities must be disciplined – and evaluate risk and only partner in projects with reasonable returns on investment.
“Some communities have become so desperate to have any projects at all they are willing to make deals inadequately supported with private dollars. These deals provide insufficient paybacks to justify the level of public participation,” says Rosenberg, an advocate for scrupulous risk assessment.
Without adequate assessment, a project can end up doing more harm than good in the long run.
“It results in things like distressed TIDs, which end up having their already-long lives extended, and the need for donor districts to prop up non-performing districts,” explains Rosenberg. “It erodes public confidence in devices like Tax Increment Financing when citizens feel they've been victimized by performance that doesn't measure up to the front-end promise.”
Whether your project will generate enough ROI for public involvement is a matter of asking yourself a simple question.
“Ask yourself, would the project occur in substantially the same way without any public funding? If the answer is yes, then public funds spent on it may be wasted, no matter how much policy makers and development staff members may want the photo op,” says Rosenberg.
In a perfect world, there are hard numbers and data to support investment. Sometimes those aren’t appropriate.
Says Rosenberg, “Do the math to assure payback periods are reasonable and public financing is pared back to the necessary amount. But remember, some goals can’t be reduced to accounting tests. In those cases, a community is wise to work from a vision encompassing overarching goals.”
When it comes to economic development, no single strategy works in every scenario. But there is much we can do to improve the systems and structures supporting jobs and the economy. We can create destinations people want to live in, work in and socialize in. Attract people with well-designed parks, trails and streets. Keep a close eye on our workforce. Manage the land wisely. Cultivate small businesses. Be disciplined about our investments. And, finally, we can team with consultants who understand how to leverage opportunities and resources while working for the public good.
Andrew Dane is a senior planner and community development specialist with 20 years of public and private sector experience assisting small and medium-sized cities. Contact Andrew
Mike Larson is a community development manager with extensive experience working with communities, businesses and non-profit organizations on their community and economic development projects and strategies. Mike is responsible for project financing, development and providing sound and innovative strategies to ensure that client projects and programs are undertaken in the most cost-effective manner. Contact Mike