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What planners need to know about economic development

Congratulations! You’ve been handed another hat to wear. Now what? In typical fashion you’ve probably been asked to respond to a last minute recruitment lead that has your mayor excited. Recruitment is a tough game and one better left until later in the creation of an effective city economic development program. But local political reality prevails.

Do yourself a favor. Don’t start with an advisory committee to gather opinions and laments. Instead, create a working group with specific work tasks. Call it the economic development fire drill team. They will be charged to gather and maintain the accurate data needed to respond to recruitment leads, and be able to host successful recruitment visits on short notice. They have to maintain confidential information and sign non-disclosure agreements. They should gather examples of lead requests and response packets from other cities. They will need to work well with the utility service providers and partner agencies. Ask them to report their readiness status to the city council in 3 months. Then schedule a dry run. Your Business Oregon development officer can help with all of this.

Next, arm yourself with a few clichés. These will be useful in the various short conversations you will have regarding economic development. I’ve collected a few favorites over the years. You have to spend a nickel to earn a quarter. You have to fish with many lines in the water. If money is a problem you are working on the wrong plan. No dirt – no deal. Eventually you will need a complete communications program including a solid 2 minute elevator speech everyone on the team can deliver. You might be surprised, or not, at how many cities don’t get beyond the advisory committee and the clichés stage.

One of the strong advantages planners bring to the economic development game is the ability to deliver on the hard work that a complete economic development program requires. A lot of it looks just like the kind of planning you want to do anyway. I like to say that you can do a lot of good planning if you wear an economic development hat. People are willing to listen and participate differently. So get started.

It is crucial that your city have an effective business retention and expansion program. If you are not showing the love to your existing businesses, they are not going to like the attention you give to the fickle recruitment prospect. And remember – that prospect will eventually ask local business people about the city’s attitude toward business. Don’t be surprised at their answer. A retention program is hard work and not glamorous. You need someone that has or can earn the trust of local business people and can find out about their situation without blabbing it around town. You’ll hear lots of complaints at first, but if done well and persistently, eventually someone will let you know something you can act on. It’s a test! How you handle the information, and what you accomplish, will be noticed.

This article is written for planners, so take a look at your zoning and development code, and process. Many cities effectively exclude entrepreneurial activity. Start-ups are renters, not developers. Can an entrepreneur in your city operate in their garage? Can they grow and find an affordable useful space for light industrial or small scale retail? Can a new business occupy an old space without going broke installing sprinkler systems and other retrofits before they earn a dollar? Or my favorite, can that metal sculptor find a live-work welding shop downtown so he can make specialty parts to ship and make art for tourists?

And lastly, you will need to develop a new skill so you can work with the business financial documents. This is necessary to be conversant on the various financing programs you will be working with. But more importantly, a little effort on this subject and you will be prepared have fun with creative finance techniques that will make you a winner. Here are a few clues. Low interest loan money is available, but money with longer loan terms makes projects pencil better. To make financing work, re-arrange which parts of the project get financed by which program. And to make that work, you will need a pot of flexible local money. For that you will need access to a local organization that can qualify for pass through program money. Take a class – IEDC and NDC are two providers. And, please, attend an Oregon Economic Development Association conference event. We all are wearing multiple hats these days.

Originally published in Oregon Planners’ Journal, December 2013

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Housing and schools

When I speak to local governments about what they can do to improve their local economy at some point I always mention housing and schools.

If they are wishing for a shiny new factory full of high paying jobs, and who isn’t, they will balk at the notion of housing and schools. Housing and schools are not glamorous and too often economic development initiatives are about political glamour. There is not a lot of money sloshing around from other layers of government – no ka-ching.

Housing and schools are hard work. Working on them can be controversial. There are no quick fixes.

Yet local governments have a lot of influence or could. And they should. I often ask my larger audiences if they live in a community where the city council meets regularly with the school board. Very few hands go up – I can remember only two. So I never get to ask the part 2 question – do they meet and talk about housing?

Local economies need young workers. Schools need young families – that’s how their funding works here in Oregon, and in Colorado, and many other states. It should come as no surprise – young families seek good housing choices and good schools.

Many cities have a completely hands off approach to housing. Whatever the developer wants to build and the neighborhood will tolerate, that’s the housing policy. Developers look at current market conditions and try to determine what they can build and sell quickly and profitably. Long range community strategy is not their problem.

Established neighborhoods often resist a new mix of housing types. Bad for property values they say. And while they say they are not against ‘those people’ obviously new housing types make ‘more sense’ elsewhere. Yet these neighborhoods will howl when the elementary school has to close because there are not enough children in older leafy static neighborhoods. Subsidize a tiny magnet school they demand – subsidize me – and if they have enough political power it might happen.

I am no expert on making the schools themselves better. I will say the community has a stake – not just the school board, parents or teacher’s union. So the whole community has to be involved. A good start is for the city council and school board to meet regularly. Talk about schools. Talk about housing. Talk about economic development.