Saturday, December 26, 2009
The Alliance, founded in the mid 1990’s, is located in lower Manhattan’s financial center. Situated in Manhattan’s Central Business District, The Alliance takes care to provide amenities fitting to members of the bustling business community. Current initiatives funded by BID assessments include the creation of an internet wireless network, as well as the establishment of commercial hotspots such as Winter Garden and 60 Wall Street. The Alliance boasts: “we have also been working with different levels of government to create a Wireless Redundancy communications network throughout all of Lower Manhattan – a system that will make Lower Manhattan the place to be for business continuity”. The BID also helps businesses aspiring to locate in this commercial epicenter to find appropriate property and to network with property owners. The BID puts potential downtown businesses in touch with local potential funders and with local organizations providing technical business assistance. The Alliance has taken an approach that would behoove all BIDs nationwide; to adapt the projects of the BID, and the spending of the assessment on projects and initiatives in-line with the character of the area. It is important for BIDs to understand the intrinsic character of the area, and thus understand what elements of the area should be built upon. A one-size-fits-all approach to BIDs will not work as well as a tailored, area-specific and creative allocation of assessment funds.
One such creative program of the Alliance is its Private Security Scholarship Program formed in conjunction with City University of New York's Borough of Manhattan Community College. Initiated in 2000, the aim of this scholarship is to allow those serving on the BIDs security team to pursue training, and eventually to become a New York Police Department officer. "'Our Private Security Scholarship Program is a win-win proposition,' says Eric Deutsch,President of the Alliance for Downtown New York". In addition to providing education to those who might not otherwise be able to afford college, this program helps the Downtown Alliance recruit and develop a more skilled and committed workforce and improve the quality of security services it provides throughout Lower Manhattan". BIDs are no strangers to claims of gentrification and of neglecting local low income residents, but this scholarship program speaks to the ability of BIDs to both serve businesses and local residents. The BID is also able to recruit top-notch, dedicated security officers who are looking to take advantage of the program. While this particular BID may have access to financial resources not easily accessible to other areas of the nation, this strategic partnership with the NYPD and local college shows just how innovative BIDs can be, and that creative thinking, as much as dollars can bring about real change.
Tuesday, December 15, 2009
Economic Prosperity Elements differ from redevelopment or typical economic elements of comprehensive plans. The elements aim to align a jurisdiction's quality of life, growth and economic justice goals with their overall economic conditions and potential.
An excerpt from the City of San Diego's draft economic prosperity element explains the concept's usefulness, in that it "incorporates the relevant values, policy recommendations, and action items from the General Plan Strategic Framework Element and will replace the existing General Plan Industrial, Commercial and Redevelopment Elements. In the past, plans, policies, and municipal operations have separated land use planning and economic development disciplines. Often, the conflicting policies of each have resulted in inefficient efforts to achieve quality of life goals...the Economic Prosperity Element seeks to combine the efforts of each discipline to provide a more comprehensive approach to increasing the standard of living for San Diego residents."
The final City of San Diego General Plan Economic Prosperity Element provides a set of policies for industrial and commercial land uses, regional centers and sub-employment areas, education and workforce development, employment, business development, military installations, tourism, international trade and maritime trade, border relations, redevelopment, economic information monitoring/metrics and strategic planning, that are all based on this integrated vision of the economy with land use planning and a community's overall well-being.
City of San Diego City Planning and Community Investment Staff, recipients of the APA Daniel Burnham Award for a Comprehensive Plan for their work on the General Plan, which includes the Economic Prosperity Element.
Does your jurisdiction have an Economic Prosperity Element? Has your jurisdiction otherwise acted to integrate economic fundamentals with other areas of your comprehensive plans?
Monday, December 7, 2009
Arlington, Virginia, located just outside the nation's capital, is a small urban county approximately 26 square miles. It is one of the most densely populated counties in the nation, with a population density of 8,140 persons per square. The county's current population, 210,000, represents a 10 percent increase over its 2000 population. Arlington is known nationally for its young, highly educated workforce, in 2007 approximately 68% of Arlington adults age 25 and older had a bachelor’s degree or higher and 38% had a graduate or professional degree. Arlington is also considered the premier national model for the successful Transit Oriented Development implementation. Given these strengths, it shouldn't be that surprising that Arlington has fared comparatively well during the current recession and past recessions. The following graphs were provided by Arlington Economic Development Regional Economist Isabelle Xu:
In October 2009, Business Week magazine named Arlington as the best place in America to ride out a recession.
Arlington's knowledge-based workforce combined with its integrated urban development are what has given the county its competitive edge during economic downturns, according to an internet post by Arlington Economic Development director Terry Holzheimer:
"A strong federal government presence, a more recent diversification of the economic base, and location near the nation’s capital have been invaluable, however, they account for only part of the reason. The primary factor in our success has been to create an urban environment that is attractive to employers, residents and visitors alike. Placemaking in its broadest context is the key to our success. In our case, placemaking has meant incorporating into our planning processes attention to detail relative to a number of factors: density, product diversification, land use mix, transportation options, and a retail strategy. Each of these has supported our vision of high density, mixed use, transit-oriented urban villages."
What is your take? Is placemaking an integral part of economic resiliency? Or has Arlington's position at the center of a dynamic major metro what has primarily given the county its advantages? As reported in the Washington Post, Arlington is actually second in nation, behind nearby exurban Loudoun County, in the presence of individuals 25-34 with incomes over $100,000.
For more information on Arlington visit:
Arlington Economic Development
Arlington Planning Research and Analysis
Tuesday, November 24, 2009
Deadline: February 12, 2010
We invite you to submit an application for the annual Excellence in Economic Development Planning award from the APA Economic Development Division (EDD). This is a $1,000 award to a community that shows innovation and success with an economic development plan or project.
The formal presentation will be at the annual APA conference in New Orleans, late afternoon Monday, April 12th at the EDD Business Meeting. The Division will also help with preparing a press release for the winning community and for Planning magazine, and will announce the winner in the News & Views Division newsletter that is sent out to some 1,000 organizations throughout North America. If submitting hard copies, please send three copies of everything for distribution to the committee.
Applications can be submitted by e-mail to the Chair of the Award Committee:
Robert M. Lewis, AICP
Development Strategies, Inc.
10 South Broadway, Suite 1500
St. Louis, MO 63102
314-421-2800 ext 18
There is no formal application form. Please, however, follow these guidelines.
Narrative Description of the Plan or Project
Description (up to 250 words) of the plan or project showing that the project fits the following definitions:
- Economic Development: The creation of new employment and wealth-generating activities through the mobilization of human, financial, physical, and natural resources.
- Economic Development Planning: A series of deliberate activities leading to initiatives that enhance a locality's, state's, or region's economic opportunities and quality of life.
Attachment I: Nominee's Fulfillment of Award Criteria
For each of the following criteria, provide up to a 50 to 100-word description of the project. The entire attachment (all six criteria) should be no more than two pages (500 words).
- Originality: Unique concept or appreciable refinement of existing techniques or procedures.
- Transferability: Potential application to other areas or projects.
- Quality: Excellence of thought, analysis, writing, graphics, and professional character of the presentation.
- Implementation & Results: Effectiveness of work proposals that have been carried out or show the promise of being carried out.
- Comprehensiveness: Submittal demonstrates a thorough and in-depth approach.
- Contribution to Community: Demonstrates application to community needs and desires.
Attachment II (Optional): Supporting Materials
Applicants may provide news clippings, brochures, slides, videos, etc. If items need to be returned, please clearly mark them as such.
For information on past award winners: http://www.planning.org/divisions/economic/awards/
Monday, November 16, 2009
In celebration of National Community Planning Month in October, Dr. Terry Holzheimer, Director of Arlington Economic Development in Arlington, VA, and former Economic Development Division Chair, made a community presentation about the life and work of Dr. Homer Hoyt. I had the pleasure of attending the lecture, which was also attended by Dr. Hoyt's son, Michael. While Dr. Hoyt was a University of Chicago trained economist, life-long real estate investor and not a planner, he pioneered many important theories and tools that in common use by planners today.
Dr. Hoyt, born in 1895 to a college-educated single mother, grew up in less than secure circumstances in rural and poor areas in the present-day Kansas City region. Although he experienced difficult circumstances in childhood, his mother instilled in him the independence, a strong work ethic and an understanding of the value of education. Dr. Hoyt earned a BA and MA from the University of Kansas at age 18, and four years later completed a law degree at the University of Chicago. In his twenties he worked at for short periods at several firms, and taught law. During the 1920s Dr. Hoyt moved to Chicago to invest in real estate to take advantage of the city's booming real estate market, from this point forward Dr. Hoyt remained an active investor in real estate for the rest of his life.
Dr. Hoyt's personal experience with real estate losses following the stock market crash of 1929 and the subsequent Great Depression, raised his interest in how real estate values related to economic cycles. He became a doctoral student in land economics at the University of Chicago, and in his dissertation focused on examining Chicago's real estate values through its past five economic boom and bust cycles. (His dissertation was published in 1933 as One Hundred Years of Land Values in Chicago). Dr. Hoyt's dissertation research at the University of Chicago served as the catalyst for a lifetime of critical discoveries in planning and real estate economics. From 1934-1940 Dr. Hoyt worked for the Federal Housing Administration, where he developed a methodology to asses which areas of cities were the best for investment by mapping a city's housing stock using various socio-economic indicators (housing age/value, race of tenants, owner occupancy, overcrowding etc.). These exercises led to his development of Sector Theory, sometimes called the Hoyt model, which postulates that urban growth occurs along transportation arteries, and that zones are not rigid in form and can penetrate one another.
All planners are also familiar with another Dr. Hoyt innovation, Economic Base Theory. Once Dr. Hoyt developed a better understanding of how cities grew, he wanted to understand why they grew. He theorized that regional economic growth was dependent upon the regional population's ability to produce more than then can consume, that is the health of a region's export-based industries. Hoyt realized that demand for land (and thus land values), was dependent upon the economic strength and sustainability of a regional economy.
While Dr. Hoyt's early career was spent examining cities in the pre-World War II era, he proved very perceptive about the changes in land values that would occur due to the mass suburbanization that occurred after the War. In the late 1940s Dr. Hoyt became turned his attention to suburbanization and suburban shopping centers, developing a hierarchy of shopping centers that is still used today. He successfully invested in once regionally peripheral lands that became our nation's first suburbs in the post War era. He founded a consulting firm, Homer Hoyt Associates, in 1951 to provide professional research services to real estate investors, at a time when such services were really first emerging. In his suburban shopping center and other post War work, he developed modern real estate market analysis by applying measures of supply and demand to individual sites or markets.
Dr. Hoyt's contributions to planning knowledge form an important basis for much of our economic development planning work today. He had an amazing career that incorporated both work as a real estate consultant and investor and academia. One aspect of his life's work that I find particularly amazing is simply how much legwork he had to put into his getting his data and how he translated his data into practical and important theoretical insights. I certainly take for granted the ease of accessing quantitative, current and historical socio-economic data, the readily available GIS tools planners use to understand our environment. At the time when Dr. Hoyt began his career good quantitative data wasn't just a click away, and he actually pioneered the idea of representing data geographically, with maps! While working on his Ph.D. dissertation he spent hours in the Cook County Assessor's Office pulling data together from records the likes of which we can only imagine. (There was an additional reward for these efforts however, as according to his son Michael, Dr. Hoyt met his wife at the Cook County's Assessor's Office).
Reflecting on Dr. Hoyt's work, my thoughts turn to today's planning innovations, and how planning practitioners are currently contributing to our broader understanding of our field. In recent months I've begun learning about emerging technologies that have the potential to transform planning practice. Perhaps some these tools will help us achieve a new understanding of the 21st century city and its economic base.
How do you see the relationship between emerging technologies, planning practice and planning theory today?
Source: Holzheimer, T. (2009). The Work and Life of Homer Hoyt. Presentation available on the web at: http://www.arlingtonvirginiausa.com/docs/Hoytpresentation.ppt
Beauregard, R. (2007). More Than Sector Theory: Homer Hoyt's Contributions to Planning Knowledge. Journal of Planning History, 6(3), 248-271.
Homer Hoyt Institute
Strategic Thinking with Maury Seldin, Homer Hoyt Institute blog.
Wikipedia article (We can improve upon this!): http://en.wikipedia.org/wiki/Homer_Hoyt
Saturday, November 14, 2009
Proponents of the program could argue that an annual price tag of $291 million is adequate given the benefits yielded by the program. But the program has failed to deliver on its promise of economic vitality in distressed areas.
The Comptrollers report claims that:
• Less than one third of businesses met or exceeded their projected job creation goals.
• Thirty-two businesses admitted receiving benefits that exceeded the benefits bestowed upon the community by the existence of the business. The surplus is estimated at $112,500 per business.
• Businesses are only required to provide projected job creation numbers, and there is not an effective way in which to collect actual data of created jobs.
• The creation of Empire Zones is an incredibly political process, and thus zones are often created in non-blighted areas as political favors.
Recently there have been changes to the program. In April 2008 the state mandated that businesses receiving benefits must re-register to ensure that all those with a reduced tax burden deserve the lightened load. At a time when New York is facing massive budget cuts, it is important to investigate the effectiveness of the Empire Zones program. It is imperative to assess the costs and the benefits, and to assess how much of a firms locational decision is based upon such tax incentives. After all, if many states around the nation are offering similar economic benefits, which they are, then this undercuts the benefits offered by New York, and may merely amount to millions of dollars in lost tax revenue. Promises of ‘job creation’ and ‘localized economic vitality’ must be critically examined with sound data in order to better gauge the effects of this expensive economic development strategy.
Wednesday, November 11, 2009
Economic Development Division Graduate Scholarship
*Deadline:* February 12, 2010
Master's level students from PAB-accredited planning departments<http://www.
The application should be addressed to:
John Provo, Ph.D.
Office of Economic Development (0373)
Outreach and International Affairs
702 University City Blvd.
Blacksburg, VA 24061
The scholarship will be presented at the APA Conference in New Orleans in April, 2010 and the paper will be published in EDD’s *News & Views*.
The 2009 EDD Scholarship award of $1,000 went to *Lingwen Zheng* for her paper entitled "Trapped in the Race to the Bottom: Who is Using Business Incentives Now?"
This paper appears in the spring 2009 edition of *News & Views*.
Honorable mentions went to Ann Thompson for "Alexandria's Associations: Spontaneous Grouping or Economic Cluster? and Jessica Sheldon for "Going Uptown in Downtown Oakland: Market Rate Housing as an Economic Development Tool."
Previous award winners:
Monday, November 9, 2009
"I'd have to say, especially in California, unfortunately, the field has evolved into focusing on preventing bad things from happening instead of making good things happen," said Bill Anderson, San Diego's planning head.
Read the entire article at: Streetsblog SF
Wednesday, October 28, 2009
California is not going to wait until it is in the midst of a significant drought to begin drafting policies to address the dwindling supply of water in the American west. California has been diligently working on measures to combat sprawl and incentivize redevelopment through land use initiatives such as SB 375, and more recently, the state has crafted Assembly Bill No. 49, which would require Californians to decrease their water consumption by 20% by 2020. “In just over a decade, it proposes to reduce California's urban water use — residential, commercial and industrial — from an average 192 gallons per person per day to 154 gallons. That would be an annual savings of about 1.7 million acre-feet, equivalent to more than a two-year supply for Los Angeles. (The national urban per-capita use is 101 gallons per day, reflecting the higher average rainfall in many states.)". AB 49 calls for the establishment of an incentivizing pricing structure for agricultural suppliers to ensure that those meeting the newly defined conservation demands are financially rewarded. Addition mandates include a standardized reporting structure, and regular data collection on water use. Also, AB 49 mandates planning of water resources. Chapter 3, Article 1. 10820 (b) states that “every supplier that becomes an agricultural water supplier after December 1, 2012, shall prepare and adopt an agricultural water management plan within one year after the date it has become an agricultural water supplier”. This initiative, which calls for collective public and private participation to mitigate water usage, is the first such legislation in the nation. Decreasing access to water is a reality that many U.S states face, and the debate over whether residents in one region are entitled to the water of another region is likely to become an increasingly contentious issue. States that sit poised to face this challenge in the coming years are well advised to look to California’s forward thinking legislation that mandates water use reporting, and planning. Additional measures to promote smart water use could incentivize water suppliers to supply redevelopment projects rather than to supply sprawling new development. By making sprawl more expensive, we conserve our limited resources, which we must collectively now realize, includes water.
Friday, October 2, 2009
The Legacy of Place and Economic Development
By Christopher Steele and Adam Ploetz, AICP
Once the economic engine of the nation, the Great Lakes region in America’s Midwest has been grappling with successive shifts in the global economy for the past fifty years. Recently, the global recession, particularly the collapse of the US automobile industry, has exposed the naked weaknesses of the Great Lakes’ economy and its relative inability to adapt to the global marketplace. No American region has been as affected by the challenges of globalization; and – perhaps – no region stands to gain as much from structural economic changes. Past economic inertia in the region has been due to continued adherence to the previous era’s economic models, growth patterns and industrial base.
These older legacies of place must be re-cast to support the region’s resurgence. With these new realities in mind, local governments in the region will need to move beyond their past triumphs and find new ways of engaging with and excelling in the new global economy; this article will examine the critical role local governments must play in reinventing the Great Lakes as an economically vibrant location for business and entrepreneurism. We will view the region through the site selection process to help illustrate how communities can proactively attract new activity.
Yikes, There's a Tourist in Town: Guidance for Local Planners
By Michael E. Kelly, MCIP, AICP
Unless directly engaged in making tourism plans or working in a destination community, local planners tend to give little thought to tourism or to tourists in their day-to-day work. However, many communities across the country attract some share of visitors, and planners should be aware of the possible implications and opportunities that may result.
It can be easy to become swept up in the boosterism that surrounds what is often taken for tourism planning, but really is just tourism marketing and promotion. Local governments have a key role to play in tourism planning and development, but it is not attracting tourists to a community. Marketing and promoting tourism are activities best left to political and business leaders.
EDD members can read these articles in their entirety when the News and Views is published online at:
EDD membership is only APA regular members: $25 per division for APA regular members, $10 for APA Student and New Professional members. Non-members of the American Planning Association can purchase an annual economic development division only membership for just $40.
Thursday, October 1, 2009
To better understand the Boston economy, here we will use Using County Business Patterns data to calculate the location quotients (LQ) of the Boston MSA as compared to the nation, using the 3-digit North American Industrial Classification System (NAICS) codes. An ‘LQ’ is the measure of relative ‘success’ of an industry, and so an LQ of 1.0 or greater suggests that people from outside of the area are spending dollars in this industry, in Boston. An LQ less than 1.0 suggests that dollars in this industry are leaking out of the Boston area. Our investigation will focus on 5 industries (NAICS codes 523, 611, 622, 541, and 722) that are instrumental to Boston. This analysis will illuminate the unique economic situation of the city of Boston.
523: Securities, commodity contracts, and investments
While this industry lost 16,504 employees, or 20% of its workforce between 2002 and 2007 at the MSA level, this industry is still one of the regions most prominent. In 2007, this industry employed 62,307 people . Wage compensation for this industry had an LQ of 1.66 in 2002, and 1.53 in 2007, meaning that these are very high paying jobs, and thus an attribute to the area. The majority of employees in this industry work in ‘securities brokerage,’ which employs 83.5% of the total employees for industry 523.
Investment banking and securities dealing (NAICS code 523110) accounts for 13% of the industry, and commodity contracts dealing accounts for the remaining 4%. Boston Capital Securities, Kimball and Cross Investment Management, and UBS Financial Services are examples of prominent brokerage firms located within Boston. A 1998 report of the Boston Redevelopment Authority optimistically states that “the securities and brokerage sector of the financial services industry has shown strong and consistent growth over the last three decades, largely due to the growing popularity of mutual funds.
The mutual fund was born in Boston, and today the concentration of securities jobs in Boston is nearly 13 times the national average. Nearly one out of every twelve jobs in the securities industry nationwide is located here”. It is true that the first mutual fund in the United States was issued by the Massachusetts Investment Trust on March, 1924. What is not necessarily accurate however is that this is an enduring industry as it is currently structured. The economic downturn, has greatly affected this industry in Boston, as well as nationally. It will be interesting to track how Boston recovers in this sector as new data becomes available.
“Education is a thriving segment of Boston's economy; within the city limits are 10 colleges and universities, 6 technical schools, 4 art and music schools, and 6 junior colleges”. And here we’re not talking about just any universities. The Greater Boston area is home to two Ivy League institutions; Harvard and MIT, as well as the Boston College, Boston University (the largest of these schools), the innovative Northeastern University, Smith, and Tufts. The educational services sector had a 2002 LQ of 2.19 and a 2007 LQ of 1.45. Wages are commensurate with each LQ at 2.13 and 1.43 respectively. Looking at the raw numbers, we see that 337,710 jobs were added within 611 between 2002 and 2007.
High employment in education has benefits beyond providing stable jobs for the local labor force. The Boston MSA, through its many institutions of education, produces a proportionately highly educated population. “Massachusetts has one of the most educated populations in the nation, with about 37% of residents 25 and older holding a Bachelor’s degree or higher”. Just as in industrial areas in our nations recent past, young children grew up with an impression that after the pomp and circumstance quiets that they will go off to work in the factories, in Boston, the expected and encouraged next step is college. However, the focus on private institutions of higher education cause public universities and colleges to suffer. “In part because of an over reliance on the region’s private universities as a source of skilled talent, funding for Massachusetts public higher education system is among the lowest in the nation”.
The concentration of world class educational institutions has been instrumental to Boston becoming a national center for biotechnology, as we will soon see.
People will always need healthcare, making hospitals (NAICS code 622), as well as nursing and residential care facilities (NAICS code 623) and ambulatory health care services (NAICS code 621) a reliable asset to the Boston regional economy. “According to the Greater Boston Chamber of Commerce, the combined health care and life sciences industry is one of the metropolitan area’s five leading industries and the only one in which employment levels increased each year from 2001 to 2004”. In 2002, the LQ for hospitals was 1.15, with a wage LQ of .98 and in 2007 the employment LQ was .82 with a wage LQ of .73.
According to Bureau of Labor Statistics data for 2008, Suffolk County has 111,445 employees within NAICS code 62; health care and social assistance. At the three-digit level, we see that hospitals in Suffolk County employ 75,209 people with 83% of these employees working in general medical and surgical hospitals (6221).
Boston’s health sector is commonly thought of as consisting of three components: “the health care delivery system; the public infrastructure, and the broader life sciences industry”. Accounted for in public infrastructure are the city’s 14 teaching hospitals, which include such leading hospitals as Massachusetts General, Beth Israel, Children’s Hospital, Brigham and Women’s “as well as medical schools and public health departments at Harvard, Tufts, and Boston Universities”. These teaching hospitals add substantially to the local economy. “According to the Conference of Boston Teaching Hospitals, these teaching hospitals and affiliated medical schools generate $24.3 billion in economic activity and employ more than 110,000 people”.
It is estimated that “one in six jobs in Boston is related to the health sector”. The hospitals in Boston have become an incredible draw for medical R&D and biotechnology firms. Boston’s competitive healthcare advantage, in tandem with its educational concentration, has given rise to an industry that is often cited as the next leading industry in the region; biotechnology.
541: Professional, Scientific, and Technical Services
Biotechnology is slated to become the next economic driver of Boston. As a city that has re-invented itself countless times it is no wonder that Boston is now looking to biotech. The biotech industry can only exist so long as the financial services, educational, and health care industries precede it. These ‘base’ industries, all agglomerating together in space allow for the characteristically innovative field of biotechnology to emerge.
There is no simple 3-digit NAICS code for biotechnology, and so uncovering numbers for this emerging industry requires some sleuthing. Industry 541; professional, scientific, and technical services is close, but this industry involves such things as payroll services, accounting, and advertising services . Further ‘unpacking’ of 541 reveals 541710; Research and Development in the Physical, Engineering, and Life Sciences, and 541711; research and development in biotechnology. BLS data for 2008 shows that 284,464 people in Massachusetts are employed in 541.
Route 128 in Boston, dubbed ‘the golden semi-circle’ is the hub of biotech location, and thus has been often compared to Silicon Valley for its sprawling dispersion of R&D firms. Although there do exist similarities, as urban economic analyst Anna Lee Saxenian articulates, there exist many differences. The simple reality that Route 128 stretches through many different municipalities makes data collection and thus comparison to the Silicon Valley difficult. Additionally, Route 128 did not arise in the same fashion, as did the Silicon Valley. Route 128 has a long history as an area of trade and production, and so it seems natural that in a changing world this route would adapt accordingly. Silicon Valley seems to have arisen to prominence in the recent past without a preceding function or connection to its immediate surroundings.
Drawing upon Saxenian's explanation of the unique features of Route 128, which surrounds Boston, we turn our focus to the location of Biotechnology firms within the Boston MSA. Within 541, 43% of all employees are in Middlesex County. Suffolk County is home to 20% of total employees. Before investigating further, a likely explanation is that many biotech firms locate in the areas just outside of Boston, including Watertown, and Cambridge (where Cambridge and MIT both reside). Firms are locating around rather than inside Boston due to the high cost of rent within the Boston city limits. Initially, most firms were locating in Cambridge, but many are now moving out of Cambridge into the surrounding suburbs in search of more space at a lower cost . Rents outside of Cambridge average $57 per square foot, while rents outside of Cambridge command $27 per square foot . Also, the lack of available lab space is an issue in Cambridge. “Vacancy rates average 20 percent in the suburbs, compared with 7 percent in Cambridge and 2 percent in Boston”. The 2008 LQ for Middlesex County for 5417 is 3.24, 2.43 for Essex County, and is 1.37 for Suffolk County. For NAICS code 521711, the LQ for Middlesex County is 8.19, is 8.33 for Essex County, and is 4.68 for Suffolk County. These very large LQ’s speak to Boston’s competitive advantage in this industry.
It seems that the biotechnology industry has staying power in the Boston region. This industry is the direct result of the educational and healthcare regional advantages, and it seems highly unlikely that these two parent industries will abandon this new up and coming economic driver. In my recent interview with MIT Business professor Dr. Howard Anderson, I asked him if he thought that the biotech locational advantage of Boston would eventually be undercut by other places in the nation duplicating the research done in Boston. Anderson replied that “unless Harvard, MIT, several of our hospitals, and the Tufts Medical Center pick up and leave, we will always have biotechnology here”. One of the only ways that a high tech industry like biotechnology can succeed is if highly educated people are willing to relocate to biotech centers for employment. Skilled engineers and world class scientists commanding large salaries are not likely to want to live in places themselves, or move their families to places that do not offer a plethora of rich recreational activities. Luckily, Boston is rich in such amenities, which turns our attention to the booming tourism industry of Bean Town.
With Boston’s rich history, a thriving tourism economy seems inevitable. People are drawn from all over the nation and the world to walk the Freedom Trail, to bike the Emerald Necklace, to dine in the Italian North End, to shop at Faneuil Hall and Quincy Market. “Boston is one of the country's top 10 tourist attractions, focusing on the city's 62 historic sites, its nearly 2,000 restaurants, and its hundreds of hotels. Tourism is a year-round industry in Boston, which hosted 16.3 million visitors in 2004, spending $7.9 billion” There is no shortage in Boston of unique attractions that represent our collective American history. In 2007, we see that the LQ for NIACS 721 is 1.09.
Almost half of the jobs in this industry are located in Suffolk County. This is not surprising as most tourists are going to visit Boston and not the outlying areas with as much attention. Visitors may be interested in visiting Harvard Square in Cambridge (Middlesex County), or the historic cities of Lexington and Concord, but the lion’s share of these jobs related to tourism exist within Suffolk County. There has however been a recent decrease in employment. This is not a surprising finding. Tourism based industries suffer greater when economic times are tough, and also when people are fearful of travel. The effects of September 11th in general, coupled with the fact that the hijacked planes departed from Boston’s airport may have made many travelers weary of flying into Boston. As traveler confidence grows, and the economy continues to recover, we will likely see an increase in the numbers of employees within 712.
NAICS code 711; performance arts and spectator sports was a larger employer in 2008 than 712. Spectator sports is partially explained by the existence of Boston sports teams including the Red Sox, Bruins, the New England Patriots, and the Celtics. The Performing Arts companies in Boston is partially explained by the existence of the Boston Opera House, the Wang Theatre, and Shubert Theatre which are all owned by Citibank.
New hotels are opening in the city , but current projections that account for the recent economic downturn presage a slow recovery for the areas hotel economy. “Boston-area hotels are not expected to have an increase in quarterly Revenue Per Available Room of “RevPAR” until the first quarter of 2010” . Looking only at data from years past may not give as accurate a picture as possible due to the effects of the recent economic downturn. Thus it is important to look to news articles and additional news sources to learn more about where the hotel industry in Boston is now, and is likely going in the future. ““While this may sound like bad news, it is actually far sooner than the national hotel market overall, which is not expected to achieve quarterly RevPAR gains until 2011,” according to the press release from Boston-based PKF” (PKF is a Hospitality Research firm). Further findings show that “In 2009, hotel performance for Boston hotels is expected to finish the year at a 14 percent decline in RevPAR, the second worst all-time since 2001 when the market saw a 19.4 percent dip in RevPAR, according to PKF”. While the hotel industry seems to be in something of a slump now due to the recession, Boston remains a destination for vacationers, business travelers, visiting parents of the areas 260,000 annual college students, and so it seems likely that this industry will increase in employment and prosper.
The Boston economy is in no sense perfect, but overall Boston seems to be doing very well economically. With several flourishing industries, Boston has a regional and indeed national advantage in many key areas. As cities the nation over are looking to ‘eds’ and ‘meds’ to revitalize their economies, Boston already is a world leader in such institutions. The existence of these advantages give rise to a biotech concentration that many are looking to bolster the local economy. Access to capital is prevalent in the city, and so expensive start-ups can find a plethora of potential funding sources. People travel to Boston from all over, and we will likely see the tourism industry in Boston rebound in sounder economic times. The city is supported by its deep history and landmarks, its world-renowned institutions of health and education, and by its seat of state government. None of which is likely to leave in the future. The city will likely change in evolve in time as it always has, and it seems that whatever the tide may bring, the city of Boston sits ready to grow and to change, not only to survive, but to prosper.
Wednesday, September 9, 2009
- What is Economic Development?
- What incentives (other than money, refunds or abatements) should economic developers provide to encourage new investment in a community?
It is my personal view economic development practice has a tendency to be captivated by short-term trends, many of which perhaps do not yield long-term benefits for local economies. I studied the outcomes Arizona’s well-known 1990s cluster policy, in Tucson, Arizona, which I found were much more limited and somewhat different than what had been initially anticipated. In this decade Richard Florida’s creative class theory captured the attention of many policy makers, but it is yet to been seen how the application of his ideas to local policy lead to positive economic development outcomes. One program I’ve been impressed with recently is South Carolina’s Centers of Economic Excellence, which leverages private investment with state matching funds (coming from lottery proceeds) to make targeted investments in facilities and positions for Centers of Economic Excellence at three state universities. These investments are in academic disciplines that are highly focused, have a potential direct impact on state economy through the generation of spinoffs or other methods, and in which the state has the potential to develop a comparative advantage.
Of course, all of these theories and strategies (and many others that I’ve failed to mention here) involve the use of government funds, as incentives, matching funds for various investments, or other government investments to catalyze local economic development.
So what is your experience with economic development? What do you think constitutes “real” economic development? Are business incentives true economic development if they are essentially used to poach businesses from one location in the country to another? How have some of the major economic development trends in recent years been applied in your locality? What incentives outside the use of government funds can encourage local economic development? Please feel free to discuss not only the economic development practices that I’ve mentioned, but any relevant ones with which you are familiar.
Monday, August 31, 2009
This is the first in a periodic series of blog posts that asks EDD members and our regular blog readers to give their input on a real-world economic development issue.
This week’s economic development challenge involves a small city in Ohio that purchased a historic hotel, the Clarendon Hotel, in its downtown with the hope of finding a private developer to renovate the property as a hotel and restaurant. The city has not been able to find anyone willing to make the upfront investment, and is now considering redeveloping and operating the property itself, until a private buyer can be found, which they believe will take about three years. The city plans to redevelop and operate the Clarendon Hotel through a Community Improvement Corporation (CIC) and a Limited Liability Corporation (LLC).
- Do you know of any examples where something like this has been done – where a municipality, through vehicles like CICs and LLCs, has developed and operated a business for a number of years?
- Are there any alternative approaches the City could take to redevelop this property that you would recommend?
- What organizations and resources might aid the City in fulfilling their desire to redevelop the Clarendon Hotel?
Monday, August 24, 2009
The Guidebook is produced by Peter Lowitt, AICP, of the Devens Enterprise Commission and Andreas Koenig, of Eco-Industry.org with assistance of the Economic Development (ED) and Environment, Natural Resources and Energy (ENRE) Divisions of the American Planning Association. We are pleased to provide this valuable resource and trust this will become an indispensable tool in eco-industrial park development and management.
Access the guidebook (APA or ENRE membership required) at:
Friday, August 7, 2009
As Bill Anderson pointed out in his posting on the future of the U.S. Economic Development Administration, APA has been working with Capitol Hill on the agency's pending reauthorization and is interested in your input. In July, President Obama nominated and the U.S. Senate confirmed a new director for EDA. John Fernandez is the new Assistant Secretary of Commerce. He has a background in local government as the former mayor of Bloomington, Indiana. With the appointment process complete, Congress is poised to begin serious consideration of the EDA reauthorization following the August recess. After meetings with House and Senate staff, we expect to see committee action in September or October and a final bill by the end of the year.
APA has been working with a coalition of organization interested in EDA issues on the reauthorization. Partners include the National Association of Development Organizations and the National Association of Regional Councils. The coalition has discussed a number of ideas for EDA reauthorization with congressional staff, including:
- Flexibility in local matching requirements
- Linkage to other Obama Administration sustainability initiatives
- Increased support for planning
- New incentives or "extra credit" for innovative or coordinated planning
- Disaster recovery and mitigation activities
- Local and regional data issues
- Flexibility on data requirements
- Changes to state revolving funds
- Expediting project approvals
- New standards and measurement for 'distressed' communities
The comments on Bill's post have been helpful. I wanted to give everyone a more specific sense of some of the issues under discussion and invite you to give APA your ideas and insights. Feel free to email me directly on this issue (or other policy matters) at email@example.com but post your comments to keep the discussion going.
We'll be discussing this and other new federal initiatives at the upcoming APA Federal Policy and Program Briefing in Washington October 4 - 6. You can get more information and register online.
Thanks for inviting me to join the discussion!
Director of Policy & Government Affairs
American Planning Association
Tuesday, August 4, 2009
An article in the Winter 2009 EDD News and Views, "Economic Development and the Green Economy" by Isabelle Xu and Shana Johnson noted that while the "green economy" has become a buzz word, an explicit definition of the nature and potential of green industries is only now developing. APA's Green Communities Research Center currently offers links to two articles on planning for green jobs, but clearly our knowledge on planning for green jobs is still in its infancy. A February 2009 Planning magazine article, "Blue Collar, Green Collar" argued that planners should think ahead and preserve some industrial space threatened by redevelopment for future green industries. (EDD membership is required to view the News and Views article, APA membership is required to view the Planning magazine article).
Today, the division wants to hear your thoughts on the future of green jobs and industries.
How should economic development planners prepare our communities for the green economy?
Has your community been impacted by American Recovery and Reinvestment Act's funds for green jobs training, home weatherization or other renewable energy projects? Are green jobs in demand in where you live? Would you consider targeting green industries or jobs in your economic development plan?
Sunday, July 26, 2009
Hello members of APA’s Economic Development Division (EDD), including the new members of the Resort and Tourism Division who just joined EDD as a Section. This is the first of what we hope is a continual line of discussion, debate, and exchange of ideas for our Division. We realize that our quarterly newsletter, News & Views, while informative, is not an interactive medium for communication. Our members have questions, solutions, and want to talk with each other across the country. As members of EDD, presumably we value the importance of City and Regional Planning’s role in economic development, and vice-versa. This new blog provides a vehicle through which we can learn from one another. Thank you to Shana Johnson for setting this up.
So, let’s start a discussion. APA has asked us a timely question for our inaugural blog. The Economic Development Agency (EDA) is approaching their re-appropriation this coming session. National APA is already meeting with EDA and is an active participant in thinking about EDA’s future role. The questions APA and we have for our members is the following:
- What do you think EDA should do in the future as it relates to economic development and planning?
- What should APA persuade Congress and the Administration to consider regarding EDA’s function and appropriation? What programs should they continue? What should they modify? What should they introduce and fund?
One thing is clear. Economic development and planning issues around the country have some common themes, but many of the specific problems and opportunities are regional. We look forward to providing APA with our diverse input. Just add your comments and respond to others. We will pass them along to APA.
Finally, APA is already planning for the annual conference next year in New Orleans. Our Division has at least two or three “by-right” sessions, including the new Resort and Tourism section. We will send out a notice soon for session proposals, most likely due later this summer. Please start thinking of good session ideas.
Bill Anderson, FAICP
Director, City Planning & Community Investment Department, City of San Diego