Community Economic Development in a Time of Change
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Transcript of Community Economic Development in a Time of Change
C it E i D l t Community Economic Development in a Time of Change
Presentation to the Town of Amherst, NYOctober 19, 2010
David RousePrincipal Wallace Roberts & ToddPrincipal, Wallace Roberts & Todd
Agendag
• The Context
– “Big picture” (national and global) trends
– Trends in public financing and economic development
• Successful Community Economic Development Programs
– Community examples
– Components
• Implications for Amherst • Implications for Amherst
– How can Amherst and the Buffalo region generate investment through community economic development?
Big Picture TrendsBig Picture Trends
Big Picture Trends Changing DemographicsChanging Demographics
• The U.S population is increasing
– 2008 Census Bureau estimate: 301.3 million– 2050 projection: 439 million / 46% increase (Census Bureau), 402
million / 32% increase (United Nations)million / 32% increase (United Nations)
2050 100
2008
100 Million+ Increase
Amherst & Regional TrendsPopulationPopulation
Big Picture Trends Changing DemographicsChanging Demographics
• The U.S population is becoming increasingly diverse
– 2005 Census Bureau estimate: 45% of children under 5 belonged to minority groups2008 Cens s B rea projection The U S ill become a “majorit– 2008 Census Bureau projection: The U.S. will become a majority minority” country by 2042
– In U.S. cities such as Boston and New York, immigration has sustained population levels and increased economic vitality
– In Canada, the foreign-born population of Vancouver is 39% and Toronto 49%%
Amherst & Regional TrendsDiversityDiversity
Amherst & Regional TrendsImmigrationImmigration
Big Picture Trends Changing DemographicsChanging Demographics
• The Baby Boomers and the Millennials are the two largest generations in U.S. history
– Baby Boomers: 76 million born between 1946 and 1964Mill i l 78 illi b b t 1977 d 1996– Millennials: 78 million born between 1977 and 1996
Baby Boomers Millennials
Big Picture Trends Changing DemographicsChanging Demographics
• What are Baby Boomers and Millennials looking for in places to live, work, and play?– Smaller, more compact housing products
W lk bl b l i h i i d hi d id h– Walkable, urban places with amenities and things to do outside the home
One poll found that 77 percent of Americans born after 1981 want to live One poll found that 77 percent of Americans born after 1981 want to live in an urban core.
Another survey found that 71 percent of boomers placed walking distance y p p gto transit at the top of their list of housing demands.
Alan Ehrenhalt, “Putting the Urban in Suburban,” Governing, March 9-10, 2009; quoted in William Lucy Foreclosing the Dream 2010quoted in William Lucy, Foreclosing the Dream, 2010
Amherst & Regional TrendsAging PopulationAging Population
Amherst Buffalo
Big Picture TrendsChanging Metropolitan Development PatternsChanging Metropolitan Development Patterns
• Foreclosure rates during the recession ghave been higher in suburban /exurban areas than in cities
This foreclosure pattern is…yet one more layer of evidence…(of) a shift in the momentum of metropolitan development – a revival of cities and a metropolitan development a revival of cities and a drawing back from the exurban fervor that drove so much development during the closing decades of the last century. y
William Lucy, Foreclosing the Dream, 2010
Big Picture Trends Changing Metropolitan Development Patterns
• Shift in market demand from
Changing Metropolitan Development Patterns
drivable suburban to walkable urban
• Exurban (fringe) development =th t lthe next slum
• Five types of walkable urban places
T di i l d– Traditional downtowns– Downtown adjacents– Suburban town centersSuburban town centers– Strip commercial redevelopments– Greenfields (lifestyle centers)
Source: Christopher Leinberger
Big Picture Trends Walkable Urban CentersWalkable Urban Centers
T di i l D B ff l S b b D S f d CTTraditional Downtown: Buffalo Suburban Downtown: Stamford, CT
Strip Redevelopment: Belmar, CO Lifestyle Center
Amherst & Regional TrendsCommutingCommuting
Big Picture Trends Peak Oil: Declining Supply Rising DemandPeak Oil: Declining Supply, Rising Demand
Big Picture Trends The Restoration EconomyThe Restoration Economy
Restorative development is a mode of economic activity that returns property, structures, or objects to an earlier condition, transforms them into a healthier and/or more functional condition, or replaces an unsalvageable structure
i h i l dwithout consuming more land.
Storm Cunningham, The Restoration Economy
Big Picture Trends The Restoration EconomyThe Restoration Economy
• Trimodal Development Perspective (three t l lif l )natural lifecycles)
– New developmentMaintenance (built environment) / – Maintenance (built environment) / conservation (natural environment)
– Restorative development
Restorative development (restoration of the built and natural environments) is the fastest growing of those three natural environments) is the fastest growing of those three modes, and it will soon be the largest of the three realms of development.
Storm Cunningham, The Restoration Economy
Big Picture TrendsA Slow Recovery from the Great RecessionA Slow Recovery from the Great Recession
• Indicators favor a U-shaped recovery after a stimulus-fueled spike up in the last quarter of 2009
– Weak, below-trend growth for a number of yearsC ti t f 2011 th i GDP 2 4% (Th E i t– Consensus estimate for 2011 growth in GDP = 2.4% (The Economist, October 2010)
US GDP GROWTH RATEUS GDP GROWTH RATE
??
Big Picture TrendsA Slow Recovery from the Great RecessionA Slow Recovery from the Great Recession
The ULI October Real Estate Barometer is “laced with fluctuations in both directions but even the most positive gains are still very weak when compared to directions, but even the most positive gains are still very weak when compared to historic trends.”
COMMERCIAL/MULTIFAMILY INVESTMENT PROPERTY
Big Picture TrendsA Slow Recovery from the Great RecessionA Slow Recovery from the Great Recession
HOUSING
Source: The ULI Real Estate Barometer, October 2010
Big Picture TrendsA Slow Recovery from the Great Recession
• Employment growth will continue to lag the recovery
A Slow Recovery from the Great Recession
• Sept. 2010: +64,000 private sector jobs, -159,000 public sector jobs (includes -76,000 Census jobs)
• Local governments face an era of fiscal scarcity
– 88% of city finance officers surveyed in 2009 reported not being able to meet current year’s financial needsmeet current year s financial needs
– Depressed property values will continue to depress real estate tax revenues
– As stimulus spending winds down, federal and state deficit cutting will reduce transfers to local governments
S Sources: Nouriel Roubini and Stephen Mihm, Crisis Economics (2010) Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)
Trends in Public Sector Financing and Community Economic Development
Trends in Public Sector FinancingChanging Revenue SourcesChanging Revenue Sources
• Property taxesp y
• Intergovernmental transfers– Federal – State
• Local sales tax
• Local income / wage tax– Resident – Commuter
Source: Source: Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)
Trends in Public Sector FinancingChanging Revenue SourcesChanging Revenue Sources
• Capital financing of infrastructure• Capital financing of infrastructure– Bonds (general obligation, revenue)– Privatization
(design/build/operate/maintain)
• Sub-municipal financing techniques– Business improvement districts– Tax increment financing
Community facility districts– Community facility districts
Source: Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)
Trends in Public Sector FinancingChanging Municipal Revenue Sources
• Decreased reliance on:
Changing Municipal Revenue Sources
– Property taxes (long-term trend)– Intergovernmental transfers (reduced state aid, avoidance of /
skepticism about federal funding)skepticism about federal funding)
• Increased reliance on: Other taxes (e g sales income gasoline) depending on anti tax– Other taxes (e.g., sales, income, gasoline) depending on anti-tax sentiment
– Charges for services / fees– Public / private partnerships, privatization agreements– Other financing techniques (e.g., TIF, BIDs)
Source: Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)
Trends in Public Sector FinancingFederal Funding Programs
• American Recovery and Reinvestment Act of 2009
Federal Funding Programs
y– Included $90 billion for investments in clean energy– Transportation Investment Generating Economic Recovery
(TIGER): $2 1 billion made a ailable so far for m ltimodal(TIGER): $2.1 billion made available so far for multimodal transportation projects
HUD/DOT/EPA S t i bl C iti P t hi• HUD/DOT/EPA Sustainable Communities Partnership– June 2009 agreement to coordinate federal housing,
transportation, and environmental investments
• These two programs reflect likely future direction of federal fundingg– Surface Transportation Act Reauthorization is pending
Trends in Public Sector FinancingSustainable Communities Planning Grants
• $150 million made available in HUD FY 2010 Budget
Sustainable Communities Planning Grants
• $150 million made available in HUD FY 2010 Budget
• Two Types of GrantsSustainable Communities Regional Planning Grants: $98– Sustainable Communities Regional Planning Grants: $98 million awards to 45 regions on October 14, 2010
– Community Challenge Planning Grants: up to $75 million in grant awards to communities currently pending
• Future funding rounds anticipated
Trends in Community Economic DevelopmentEvolving Approaches
from:
Evolving Approaches
• … a wholesale approach (offsetting capital costs by providing land and infrastructure), to…p g )
• …a retail approach (reducing the cost of doing business via tax abatements), to…
• …a systems approach (addressing quality of life issues to increase appeal to business owners, workers, and entrepreneurs)
Adapted from Elaine Carmichael, Principal, Economic Stewardship, Inc.
Trends in Community Economic DevelopmentEvolving ApproachesEvolving Approaches
Innovation economics is an economic doctrine that reformulates the traditional model of economic growth so that knowledge, technology, entrepreneurship, and innovation are positioned at the center of the model…
Source: Wikipedia
Trends in Community Economic DevelopmentEvolving ApproachesEvolving Approaches
• Community revitalization rules (Storm y (Cunningham)
– Rewealth: base our economy on renewing what we have (restorative development)
– Integrate restoration of natural, built, and i i tsocioeconomic assets
– Engage all stakeholders in the revitalized future of their communityof their community
Trends in Community Economic DevelopmentEvolving ApproachesEvolving Approaches
• Community revitalization processes (Storm y p (Cunningham)
– Establish a shared vision of the community’s future based on renewal
– Embed renewal in the community’s cultureth h li i l ti tthrough policies, regulations, support programs, incentives, etc.
– Partner to build the critical mass of resources– Partner to build the critical mass of resources and knowledge to accomplish the vision
Trends in Community Economic DevelopmentEvolving ApproachesEvolving Approaches
• Renewal engine: a nonprofit organization g p gto promote community revitalization on an ongoing basis
– Forms the renewal vision and strategy
– Fosters a renewal culture that attracts ireinvestment
– Establishes bonds of trust and shared values needed for public and private entities to workneeded for public and private entities to work together
Successful Community Economic Development Programs
Community ExampleChattanooga TNChattanooga, TN
• The legacy of an industrial city
– The nation’s dirtiest air in 1969 per the federal government
– Socioeconomic divisions / challengesSocioeconomic divisions / challenges
• Response
– Citizen task force appointed to oversee cleanup (Air Pollution Control Board)
– 1984 community visioning process (Vision 2000)
– Public/private partnership formed p p p(Chattanooga Venture)
Community ExampleChattanooga TNChattanooga, TN
Results• Dramatically improved air quality• $120 million riverfront / downtown revitalization• 3 national awards for outstanding livability in 10 years
Community ExamplesBranding StrategiesBranding Strategies
• Austin, TX: Live Music Capital of the , pWorld
• Indianapolis, IN: Amateur Sports Capital of the World
• Chautauqua County, NY: World’s Learning Center
Community ExampleCumberland MDCumberland, MD
Community ExampleCumberland MD
• Key road, railroad, and canal junction during the 1800s; was the second largest MD city after Baltimore
Cumberland, MD
the second largest MD city after Baltimore
• The “Queen City” developed as a manufacturing powerhouse during the 19th and 20th centuries but declined after WWII due gto industrial plant closures
• In 1987 the Kelly Springfield Tire Plant was the last major manufacturing plant to close (relocated to Akron, Ohio)
• The City’s population has declined from 39,483 residents in 1940 t 20 495 ( ti t ) i 20081940 census to 20,495 (estimate) in 2008
Community ExampleCumberland MDCumberland, MD
Kelly Springfield Tire Plant to Riverside Industrial Park
Community ExampleCumberland MD
• In 1993 Canal Place (historic terminus of the C&O Canal) was designated Maryland’s first state heritage area
Cumberland, MD
designated Maryland s first state heritage area
• In 1996 the City adopted a new Comprehensive Plan with a vision statement to guide revitalization effortsvision statement to guide revitalization efforts
Community ExampleCumberland MD
• 2005 Sustainable Economic Development Strategic Plan defines target niches related to C mberland’s assets
Cumberland, MD
defines target niches related to Cumberland’s assets
• Priority business / industry sectors– Tourism
– Restoration / rehabilitation (built, natural environments)
• Priority social / occupational groups– Technological entrepreneurs
A ti t– Artists
Community ExampleHamilton ONT
• 504,559 residents in 2006
Hamilton, ONT
– 20% foreign born; half of recent immigrants from Asia and Middle East
• Traditional economy based on heavy manufacturing (known as the Steel Capital of Canada) as the Steel Capital of Canada)
– Economy has shifted towards services, especially health sciences, over the last decade
• Rated as 6th best place to invest in Canada (2nd in Ontario) by Real Estate Investment Network (REIN Canada)
Community ExampleHamilton ONT
• Comprehensive development strategy builds on strengths
Hamilton, ONT
– Four-tiered transportation hub– Manufacturing excellence – Reputation for educational qualityp q y
• Four fundamental principles: innovation, diversification, entrepreneurship, and triple bottom line
• Quality of life is a key focus area to attract business as well as the “best and brightest” employees and citizens
Community ExampleHamilton ONT
• McMaster University
Hamilton, ONT
– Health science, automotive technology, and materials and manufacturing research and development
– McMaster Innovation Park
• City Planning and Economic Development Department
– “One-Stop Shop” for three key business services: Small Business Enterprise Centre, Business Facilitation (municipal planning process guidance), Licensing and Zoning
– Downtown and Community Renewal Division Programs
Components of Successful Economic Development ProgramsPrograms
• Vision– Define an economic position / niche based on assets
• Strategygy– Develop a game plan to realize the vision
• CapacityCapacity– Leverage resources through partnerships across sectors (public,
private, institutional / nonprofit)
• Program– Implement the vision and strategy through coordinated use of
economic development toolseconomic development tools
Examples of Economic Development Toolsp p
• Data– Inventories of available properties
• Development ordinances / codes
• Marketing– Branding and outreach to targeted groups
• Infrastructure– Investments in roads, utility, telecommunications, etc.
• Financing– TIF, BID, NYS Main Street Program, etc.
• Incentives
The Role of Incentives
• A useful tool but only part of the total package that attracts y p p gbusinesses (typically not the deciding factor)
• Be aware of downsidesf f f– Costs of subsidies provided can exceed benefits in terms of jobs, tax
revenues generated– Subsidies can put existing businesses at a competitive disadvantagep g p g– Jobs created often go to outsiders rather than current residents– Businesses can leave when subsidies expire
Implications for AmherstImplications for Amherst
Implications for Amherst: Changes Over Time
• Amherst Community Development Plan (1975)“A i b b it i i t f t lit
p g
– “A growing suburban community, recipient of metropolitan expansion…”
• Bicentennial Comprehensive Plan (2003)• Bicentennial Comprehensive Plan (2003)– “Become a model for effective reinvestment and revitalization of
older neighborhoods and commercial areas…”
Implications for Amherst: Discussion
How can Amherst and the Buffalo region generate investment through community economic development?g y p
David Rouse, Wallace Roberts & Todd
[email protected] Wallace Roberts & Todd, LLC