Economic Properity Elements - Resource List

Late last year, the blog reviewed Economic Prosperity Elements, and how they differ from typical economic elements of general or comprehensive plans, and invited EDD members to submit links to their Economic Prosperity Elements to EDD. This post provides a listing of Economic Prosperity Elements that were submitted, with some context provided by William Anderson, FAICP, EDD Immediate Past Chair and Director, City Planning & Community Investment Department at the City of San Diego.

Many cities and counties are adding Economic Prosperity or similar elements to their General Plans. These elements help strengthen the link between a jurisdiction’s comprehensive plan and economic development. While most factors that influence economic development are beyond a local area’s control – macro-economic trends, international competition, interest rates, financial markets, etc. – local jurisdictions do have control of factors that can make them more or less competitive in the region, nation, or world. Some of these local factors are traditionally addressed in General Plans, such as land use capacity for industries and targeted sectors, infrastructure efficiency and cost, quality-of-life, housing affordability for the workforce, and environmental quality. Other local factors are not as directly related to land use policies, such as workforce training, education, and access to capital, factors which may be the purview of other organizations and agencies, but are also critical. An Economic Prosperity Element, especially one tied to a regional economic development strategy, can bridge and coordinate these factors and take the General Plan beyond the role of just land use policy. It can also serve as the element that connects a region’s economic development strategy focused on the needs of export-oriented base sectors, to the opportunities for community-level economic development.

This blog provides examples of Economic Prosperity or Economic Development elements from general plans around the country, from small towns to large cities. We hope you can find something useful for your own needs.

EDD is interested in expanding the list provided below, please feel free to submit a link to any Economic Prosperity or Economic Development element that you know of in the comments section of this post.

Thank you,
William Anderson, FAICP
Director, City Planning & Community Investment Department
City of San Diego


Economic Development/Economic Prosperity Elements/Plans Submitted to-date

City of Entiat, WA Comprehensive Plan, Economic Element

Monroe County, Michigan Comprehensive Economic Development Strategy

City of San Diego, CA Economic Prosperity Element

Arlington, VA Economic Development Strategic Plan

Upcoming Course: Cultural Community Development

Former EDD Chair Rhonda Phillips is teaching a Rutgers PDI course, Cultural Community Development, beginning late this month that offers 14 AICP credits! The class will be working with Bisbee, AZ as our project for the studio, have some neat speakers from LISC and other organizations. Find out more on the Rutgers PDI website:

https://rutgers.catalog.cerkit.rutgers.edu/course/display/10195

Determining the Fiscal Need for Public Intervention in Redevelopment

This week's post is authored by the Bob Lewis, AICP, CEcD, Principal at Development Strategies and the new Economic Development Division Chair. The premise of this post is drawn from a panel session on Spatial Economics at the 2009 national conference of the American Planning Association. Panelists were Steven Shwiff, who heads the Department of Accounting, Economics and Finance at Texas A&M University; Robin McCaffrey, who is a principal with Mesa Design Group in Dallas; and Carissa Cox, an associate with Mesa Design Group. Interpretations of the panel’s presentation in this essay are entirely the author’s, however.

Communities are often barraged with requests for “development incentives” when proposed projects just do not seem to earn a sufficient rate of return. How do public officials figure out which projects deserve incentives?

Any site can be placed on a continuum that indicates the relative balance between the value of the land (i.e., ignoring improvements on the land) and the value of the improvements (i.e., ignoring the land). Almost all property taxing jurisdictions distinguish between the two—land is valued separately from what’s on the land. It’s possible to use the ratio of land-to-improvements value in evaluating incentive requests.

Ideally, the relationship between land value and improvements value will be balanced in a fully thriving community. As the economy is manipulated by the invisible hand toward equilibrium, so says the theory, all real estate values will achieve an appropriate balance. This doesn’t mean that land value is equal to building value, but that there is an appropriate balance that is effectively expressed in the “rents” that the property generates—sufficient income to pay all operating and maintenance expenses, debt service, and a competitive rate of return to the owners.

We all know, however, that a perfect balance for all properties all the time never happens.

To one side of the equilibrium continuum, therefore, would be sites where the ratio of improvement value to land value is too high. To the other side would be sites where the ratio of improvement value to land value is too low.

Properties that have perfect balance do not need public intervention because the economy is operating as it should. Likewise, properties on the “stimulative” side of the continuum do not need public intervention because the underlying value of the land is a strong enough incentive for property owners to develop or redevelop in order to “capture” that value through higher economic rents. That is, if the land value is so strong, then high paying tenants will want to occupy the location, so the property owner needs no economic incentives to, say, build a bigger or better building and attract such tenants.

Where intervention might be necessary is on the “blight” side of the continuum. This is where the value of the improvements is high, but the location value is relatively low. For example, there might be a very expensive building on the site, but the site is too poorly located to attract tenants willing to pay rents that reflect the value of the building. So the building remains underutilized, probably with poor maintenance, and can become a blight in the community.

All cities have experienced varying degrees of these conditions. The corner of “Main and Main” in a vibrant downtown, for example, represents a site either in balance or in a stimulative condition. But a formerly successful shopping center on a major arterial road might no longer be well located because major retailing has moved to the interstate highway interchange. Demographic and household income shifts also change the location value of shopping centers.

‘Blighted” might be too strong a word in some cases, but there are properties that are clearly blighted while others we tend to call “marginal” because they show early signs of imbalance favoring the value of the improvements. For whatever reasons, the value of the land is diminishing relative to the operating costs and value of the building. In such cases, there is technically no economic incentive for the property owner to improve the property to a higher value. Stronger rents cannot be achieved at that location. Thus, the building is effectively allowed to deteriorate to a value more in balance with the value of the land—and rents will inevitably decline.

Ridding that blight requires improving the value of the land and/or reducing operating costs. A city government might work harder to reduce crime, increase the quality of the utilities, or re-pave the street to increase the site’s location value. Indeed, these are useful intervention techniques for properties just beginning to go out of balance on the blight side of the continuum.

More drastic measures, however, are required for more advanced stages of blight. Thus, cities often offer to buy the land and turn it over to a developer at no cost, thus reducing the new property owner’s exposure to the rate-of-return imbalance. Or substantial public infrastructure investments might be made to increase the location value. Tax increment financing is often an appropriate tool in this case because higher values, triggered by the “new” infrastructure, should generate “new” taxes, some of which can be siphoned off to pay for the needed improvements. Tax abatements, tax credits, direct payments, etc., may also reduce the property owner’s exposure to the improvement/land imbalance and/or to increase the location value of the site.

What defines “balance,” however? In most communities, a simple indicator could be the aggregate value of all land divided by the aggregate value of all improvements (or vice versa). This is, in effect, the average for the entire community. Individual property ratios that significantly deviate from this ratio can be identified as opportunities for higher value development (stimulative) or opportunities for public intervention (blighted). Multi-year measures of this aggregate balance can be utilized to minimize statistical variations year-to-year.

Perhaps even better is to determine the equilibrium ratio using a much larger geographic area, say a county-wide or metropolitan-wide measure. A central city might have its own balance, but that ratio might not be the same as, say, the adjacent suburban county. Thus, a metro average might be a more appropriate “goal” though it could mean that a disproportionately high number of central city properties fall into the blighted end of the continuum while the suburban properties are more weighted in the other direction.

In any event, this equilibrium concept can be an effective indicator of properties needing public incentives and those that shouldn’t need such incentives. Public officials need to marshal resources as carefully as the private sector, so the use of such statistics can guide better decision-making.

Economic Development Division Activities in New Orleans

We look forward to seeing members of the APA Economic Development Division at our Division-related activities and sessions in New Orleans! Events include:

ANNUAL MEETING AND RECEPTION Economic Development Division Annual Meeting & Reception (X018) http://www.planning.org/conference/program/search/activity.htm?ActivityID=138439 Monday, 6:30-8:00 pm (Scheduled location is Hilton Hotel, Marlborough A)

• Enjoy free drinks and hors d’oeuvres
• Network with fellow division members
• Discuss the upcoming year’s work plan


EDUCATION SESSIONS
Earn CM credits and sharpen skills at the following sessions:

“Measuring Economic Impacts of Scenic Byways” (S411) http://www.planning.org/conference/program/search/activity.htm?ActivityID=137913 Sunday, 7:30-8:30 am CM 1.00

Test drive a user-friendly tool that helps local groups measure and communicate the economic impacts generated by their byways. Developed by America’s Byways Resource Center, which supports the 125 National Scenic Byways, this tool is a valuable resource for those fighting to maintain federal, state and local funding support of byways.

“Planning for the Bottom Line” (S414) http://www.planning.org/conference/program/search/activity.htm?ActivityID=137943 Sunday, 5:30-6:45 pm CM 1.00

In an economic downturn, improving the financial management of local government is every department’s responsibility. Learn to improve the financial management of the planning department and gain an understanding of how land-use decisions impact a community's overall fiscal condition. Take a leadership role in your community's financial management.

“Riding Out the Recession” (S543)* http://www.planning.org/conference/program/search/activity.htm?ActivityID=138117 Monday, 4:00-5:15 pm*EDD-Sponsored SessionCM 1.25

Stagnant housing market. Declining tax base. Shrinking municipal budgets. Rising unemployment. It’s scary. But cities, even those experiencing structural upheaval, have weathered past recessions. And it’s normal for municipal revenues to lag behind. Hear from veteran planners who’ve suffered through this before and learn what to expect in the public and private sectors.

“Social Media in Planning” (S809) http://www.planning.org/conference/program/search/activity.htm?ActivityID=137799 Monday, 5:30-6:45 pmCM 1.25

If your agency or firm doesn’t Twitter, blog, or have a Facebook page, it may be missing the boat. Learn to use Internet technologies for public outreach and education. Discuss ways APA members can use these tools for professional networking and education.


“Looking Past Market Cycle Pressures” (S594)

http://www.planning.org/conference/program/search/activity.htm?ActivityID=137906 Tuesday, 10:30-11:45 amCM 1.25

Market cycles create short-term pressures that need to be reconciled with long-term planning needs. Discuss strategies for looking past market cycles to pragmatically achieve planning goals and a long-range vision. Lessons from San Diego and Aurora, Colorado, illustrate how keeping a planning project steady can push it toward successful completion.

We look forward to seeing you in New Orleans!

What Do You Wish Your Elected Officials Knew About Economic Development?

This week's post is a guest blog from Christy McFarland, Program Director, Finance & Economic Development, Research & Innovation at the National League of Cities. She can be reached at mcfarland@nlc.org.

We at the National League of Cities are producing a guide for local elected officials based on a list of the “10 Things Local Elected Officials Should Know about Economic Development…and if you don’t you should ask.” This list is sort of call to arms about having informed local elected officials who can support and promote thoughtful economic development policies. To be sure, we are not trying to turn local elected officials into professional economic developers, but to give them the tools and knowledge to be effective leaders and to build mutually-supportive relationships with their economic development staff. We started this conversation with economic development officials at IEDC’s recent conferences and would welcome your input as well. Have additions, subtractions, or comments about our list? Let us know! The “10 Things Local Elected Officials Should Know about Economic Development…and if you don’t you should ask”:

Informed and Strategic Leader

1. Your local economic strengths and weaknesses, including:

• What are the major sources of jobs in my town?
• What available sources of worker training are available in my city, like community colleges, and are they connected to the needs to my local business community?
• What is the high school graduation rate? Drop-out rate?
• Local unemployment?
• Am I up to speed on changing economic conditions?

2. Your community’s economic development goals and vision, including:

• Are goals and vision based on a “fad” or the realities of my community?
• Is the economic development vision in sync with longer-term community values?

3. Your community’s strategy to attain these goals, including:

• What are the tangible outcomes of our vision?
• How can I be part of a “continuum” of leadership for economic development? (i.e. balancing longer-term nature of economic development with short-term political concerns)

4. How your community fit into the broader regional economy, including:

• What does/could my community offer to enhance the region’s overall economic strength and environment?
• What regional organizations or partnerships exist? Are we involved?

Policy Maker Who Can “Connect the Dots”

5. Other city activities that support or impede economic development, including:

• How do transportation, housing, land use and other policies impact economic development? How do these all work together?

6. Your regulatory environment and budget, including:

• Are we establishing the right conditions to create jobs?
• How long does the permitting process take?
• Does the budget support the expectations I have of my economic development team?
• Do we offer tax incentives, and under what circumstances?

7. Who needs to be at the table to get the job done, including:

• Who are the key city staff from various departments and outside organizations who work on these issues?
• Do I talk to them?
• What do/can they bring to the table to help achieve our economic development goals?
• Are there communications barriers between stakeholders and what can I do to break them down?

Effective Communicator

8. The needs of your local business community, including:

• How does my business community perceive local government?
• How does my city monitor and respond to the needs of our local business community?
• How do we celebrate and highlight the achievements of local businesses?

9. How to support your economic development staff and they can support you, including:

• Am I in regular communication with my economic development staff?
• Do I trust my staff and do they trust me?
• Do I empower my staff to make decisions?
• What type of leader do they need me to be in order to be most effective?
• What information do I need from them in order to communicate to residents how we are addressing their needs?

10. A consistent message and brand about who we are, including:

• How do I articulate our economic vision to my citizens?
• Are all city staff and officials on the same page with the goals and are we delivering a consistent message/brand?

A few GREAT Economic Development Blogs

EDD blog is still new and developing – so this week I wanted to highlight a small group of economic development related blogs that I’ve found inspiring and insightful. What economic development blogs would you recommend?

The EDPro Weblog by Ed Morrison (@edmorrison)
Maybe the first blog developed specifically for Economic Development practitioners – EDPro Weblog is a rich repository of resources and analysis on local economic and workforce development issues. The blog describes itself as aiding “economic and workforce development professionals—EDPros—keep up with the changes sweeping our professions. Strap on your goggles. It's a whole new game. There are no experts any more. The only place to learn about economic development is from other EDPros who are doing it.” EDPro Weblog is the project of Purdue Center for Regional Development Economic Policy Advisor and consultant Ed Morrison.

http://edpro-weblog.net/


Extraordinary Observations by Rob Pitingolo (@robpitingolo)
Authored by John Carroll University Senior economics major Rob Pitingolo, Extraordinary Observations covers topics related to economics, urbanism, transportation, and more. Rob is currently an intern at the Federal Reserve Bank of Cleveland, and he is in pre-graduation job search mode -- don't miss his Video Resume!

http://www.robpitingolo.org/


Richard's Real Estate and Urban Economics Blog by Prof. Richard Green (@keynesianr) of the School of Policy, Planning and Development and the Marshall School of Business at the University of Southern California.
“This blog will feature commentary on the current state of housing, commercial real estate, mortgage finance, and urban development around the world. It may also at times have ruminations about graduate business education.”

http://real-estate-and-urban.blogspot.com/


Rebuilding Place in the Urban Space by Richard Layman, Washington, DC based urban/commercial district revitalization and transportation/mobility advocate and consultant.
“A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic. This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.”

http://urbanplacesandspaces.blogspot.com/


The Bellows by Ryan Avent (@ryanavent)
The Bellows author Ryan Avent’s day job is writing for The Economist. Anyone interested in the intersections of urbanism, economics, planning and transportation should be a regular reader of The Bellows.

http://www.ryanavent.com/blog/


EMSI Resource Library, by Economic Modeling Specialists, Inc.
“The EMSI Resource Library is a source of news, articles, and links for professionals in workforce development, economic development, and workforce education.”

http://www.economicmodeling.com/resources/

Transportation’s Economic Impact, a more complete picture

This is a cross-post with the Young Professionals in Transportation Blog.

When the economic impact of transportation investment is discussed, the typical focus is on job creation. It is obvious that when roads are repaired or new transit systems built that many jobs are directly created. There are also jobs that are indirectly created through transportation investments. Each new transit agency employee or highway construction worker will generate new spending not only on essentials such as food and housing, but also on non-essentials such as entertainment, and these expenditures will support other jobs in the private sector.

Over the past year we’ve witnessed the power of transportation and infrastructure investments to generate quality jobs that cannot be outsourced for hundreds of thousands of Americans through the American Recovery and Reinvestment Act (ARRA). An American Association of State and Highway Transportation Officials study reported that in its first year ARRA directly supported 280,000 transit and highway jobs, and that including indirect and induced jobs it supported 890,000 jobs. An October 2009 report evaluating the economic impact of public transportation investment prepared by the consulting firm Economic Development Research Group for the American Public Transportation Association (APTA) found that on average for every $1 billion of spending on public transportation operations in the United States, 41,140 jobs are created, and for every $1 billion spent on transit capital expenditures, 23,788 jobs are created. When transit operations and capital expenditures are combined, an estimated average of 36,000 jobs are supported for each $1 billion invested in public transportation.

While the number of jobs supported by investments in transportation infrastructure is a critical indicator of transportation’s economic impact, this indicator alone does not provide a complete picture of how transportation and economic development are linked. Accessibility, the measure of the number of activity sites (school, work, places of worship, retail stores) that an individual can reach within a certain travel time, is and will remain an important determinant of economic opportunity for Americans in every type of occupation.

Despite repeated predictions, exemplified in the 2001 book Death of Distance by Francis Craincross, that geographic distance would cease to be an inhibiting factor in economic collaboration and trade, the region remains the center of economic activity and collaboration in the United States and around the world. The world economy is essentially a collection of regional economies. The Internet Era has not hastened the demise of geographical proximity as a requisite for individual or firm economic success. While I cannot do justice in this short blog to the all of the literature in geographical economics and economic geography that explore the many reasons for the pre-eminence of regional economies, I would like to touch on a few aspects found in academic research that underscore the importance of place and accessibility for individual, firm and regional economic success.

First, trust is an importation foundation of human economic interaction, and trust is built primarily through repeated face-to-face (F2F) interactions. When you trust someone, you are more willing to exchange information with them, and collaborate on individual projects. While competition and firm rivalry are often cited as an important factor in regional economic dynamism, the reality is that in many sectors of today’s economy a more common paradigm is to find firms that partner on some projects, and compete on others. Trust and F2F interactions also allow for a key type of information exchange, tacit knowledge transfer. Tacit knowledge is knowledge that cannot be codified or exchanged without co-presence, and the exchange of tacit knowledge is often considered to be dependent upon a shared social and cultural space. (For a more in-depth consideration of the importance of these three factors on regional economic success, please see pgs. 30-33 in my paper, Tucson’s Clustered Connections).

F2F, trust and knowledge exchange, tacit and codified, form the foundation of regional networks that support regional economies. For knowledge workers having access to a number of actors within their industry’s regional network and a robust personal network is an important determinant of how successful they may be personally. For firms, the ability to access industry knowledge and talent is critical. If transportation investments increase accessibility and subsequently the ability of knowledge workers to interact, there will be a positive impact on the economy. It is important to note that not all types of transportation investments really do this, some may only increase mobility, or the ability to move between activity sites. (While there is an inherent urban bias to accessibility, it can’t be said that an intensely developed place is required for economic dynamism, Silicon Valley and its suburban office parks are an important example).

Accessibility is also an issue that acutely affects low-income workers. In the second half of the 20th century, entry-level jobs in service industries were increasingly located in the suburbs while many low-skilled workers remained in central cities, creating a spatial mistmatch of jobs opportunities and low-income workers. Accessing job opportunities in the suburbs often requires the use of a private automobile, a mode of transportation too expensive for many low-income workers. As a result many government and non-profit agency programs have sought to provide reliable transportation to low-income workers seeking to travel jobs that are not accessible via public transportation. For some individuals the ability to access these types of programs can mean the difference between being employed and unemployed.

In the first decade of the 21st century the issues presented by the spatial mismatch and access to reliable, low-cost transportation for low-income individuals has been exacerbated by the growth in suburban poverty. The Brookings Institution recently released a report on the suburbanization of poverty that found that between 2000 and 2008, “suburbs in the country’s largest metro areas saw their poor population grow by 25 percent—almost five times faster than primary cities and well ahead of the growth seen in smaller metro areas and non-metropolitan communities.” In the coming years, transportation and economic development professionals will be challenged to work together to create dynamic, accessible and equitable communities that will provide the foundation for continued national economic success.