Larysa Salamacha - Initiative for a Competitive Inner City

Session 2: 

The Role of Industrial Land in 

the City Landscape 

Copyright © 2012 ICIC 2

The Role of Industrial Land in the City 

Landscape 

Don Graves, President’s Council of Jobs and Competitiveness 

and U.S. Treasury 

Adam Kamins, ICIC 

Michael Holzer, Local Economic and Employment Development 

Council 

Larysa Salamacha, Baltimore Development Corporation 

Kate Sofis, SFMade and Urban Manufacturing Alliance 

Lorrie Louder, Saint Paul Port Authority 


The Value of Industrial Activity in Cities: 

Overview and Lessons from ICIC’s Work 

Adam Kamins 

Research Practice Manager 

September 20, 2012

Why Industrial Is Poised for a Comeback in the U.S. 

Increased energy costs and ―greening‖ favor domestic production 

Crude oil prices have increased from roughly $20/barrel a decade ago to 

nearly $100/barrel today 

Residential market has cooled in recent years 

Decreased competition for available land 

Overseas production can be less efficient for a variety of reasons, including: 

Lack of IP protections 

Concerns about product quality 

Increased wages in Asia’s industrial heartland 

Critical change is mix, not level of activity 

Shift away from traditional manufacturing and towards transportation and 

logistics, warehousing, and wholesale 


Case for Industrial Activity in Cities 

Equity 

Inner cities need jobs; between 1998-2009, the 100 largest inner cities 

lost nearly 3% of their job base while the rest of their regions grew by 5% 

Efficiency 

Midwestern industrial land, for example, can be redeployed to fuel growth 

Environment/Energy 

Re-focusing industrial activity in cities reduces supply chain costs, which 

has a positive impact on bottom lines and the environment 

Assets 

These include large centers of population, proximity to transportation 

assets, and large firms/institutions that are located in cities 

With these factors in mind, ICIC has focused in recent years on industrial 

strategies in a number of cities, including: 

Philadelphia, PA 

Detroit, MI 

Saint Paul, MN 


Lessons from Saint Paul: Wages and Education 

Industrial jobs are associated with higher wages and lower barriers to entry 

than those comprising the Saint Paul economy as a whole 

This creates more potential opportunities for inner city residents 

Average St. Paul Wages, 2008 

Source: Bureau of Labor Statistics, ICIC Analysis 

Share of Jobs that Demand High School 

Diploma or Less, 2008 


Lessons from Saint Paul: Fiscal Impact of Industrial Development 

Based on comparable cost of city services analysis and city budget data, we 

calculated the impact of various types of development on Saint Paul and built a 

model that can be customized based on various budget line items 

Expenditures Associated with Every Dollar of Revenue Generated, 2011 

Source: ICIC Analysis 

Industrial activity generates a budget surplus relative to other uses 

This is consistent with other findings conducted by firms that specialize in 

fiscal impact modeling, such as Tischler Bise 



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Council 





Chicago Planned Manufacturing Districts—Case 

Study 

Presented by Mike Holzer 

Director, Economic Development 

mike@leedcouncil.org 

LEED Council (DBA)

The Problem—Industrial Displacement on Chicago’s Near 

North Side in 1980’s: Foreign Competition, Pressure for 

Alternative Land Use & Case-By-Case Zoning Decisions at 

the Local, Ward-Level 

• Chicago’s industrial job loss: foreign competition (Germany & Japan), wage 

competition from lower wage states (Arkansas and Mexico’s Maquiladora 

region) & lack of owner investment 

• Young Urban Professionals jobs in FIRE industries downtown and housing 

on industrial fringe apply land use pressure on existing industry 

• Developers convert vacant loft buildings on edge of historic Clybourn 

Industrial Corridor to rental housing—1st zoning change Piano Lofts, 1985 

• Real Estate speculation on remaining sites increases pressure on existing 

firms to sell, move or close up 

• Investment by existing firms is put on ―HOLD‖ due to lack of political 

leadership on land use, lack of city industrial policy 

• Resulting industry & job loss in the North River Industrial Corridor in 

1980’s: firms reduced from 1,200 to 600 and job loss from 40,000 to 20,000 

jobs

LEED Council Response 

• Study impact of job/industry loss and models for land use solutions: 

NYC Garment District and Seattle Industrial Sanctuary 

• Engage area companies: determine viability & obstacles to growth; 

gauge commitment to land use solution (PMD); develop leadership 

• Engage nearby residential groups: understand impact of job loss; 

develop leadership 

• Findings: 75% of workers live in City & 50% of that group live within 

3 miles of plants; ―head-of-household‖ jobs; plant closings directly 

impact nearby communities 

• Create first Planned Manufacturing District (PMD) for Clybourn 

Corridor (1988) similar to ―Lakefront Protection Ordinance‖ & 

elevate case-by-case ward level zoning decisions to Plan 

Commission level

Objections to the PMD 

• Industry is ―dead‖ and will never come back 

• No one wants industrial jobs 

• The PMD is anti-free market 

• The PMD will kill the burgeoning housing market 

• Old industrial loft buildings outdated for business uses 

• Highest and Best Use is whatever price a square foot of 

dirt will fetch on the market

Our Experience—Business & 

Community Response 

• Land use assurance promoted reinvestment particularly by local family owned firms 

• Business growth in the Goose Island PMD: 25 firms employing 1,000 workers in 

1991; 100 firms employing close to 5,000 workers in 2012 

• Industrial jobs pay ―Head-of-Household‖ wages, are full time and provide benefits; 

barriers to entry for industrial jobs are fewer 

• Outdated Clybourn Corridor loft bldgs buffered high end residential to the east in 

Lincoln Park and heavy industry to the west and provided needed retail space 

resulting in home owner support for the PMD 

• The housing market moved to less restricted areas fueling growth in the Bucktown, 

Wicker Park, Ukrainian Village and Lincoln Park communities 

• Highest and best use is nuanced and complex—mfg. jobs have a jobs multiplier of 

3.5 jobs; locally produced goods sold mostly outside the city and creating wealth in 

the community; taxes receipts are greater for industry

Closing Thoughts/Lessons Learned 

• PMDs are useful land use and Economic Development tools but… 

• PMD’s need well-thought boundaries, well-developed leadership & 

stakeholder investment. Less well-planned PMD’s are less successful. 

• Other supports are necessary to create successful industrial parks: 

– Model Industrial Corridor Planning to create parks that are: safe, accessible & 

functional, competitive & marketable, manageable & attractive 

– Infrastructure & transit spending to accomplish the above 

– Corridor management and continued city support 

– Funding to address high cost of environmental clean up & site prep, such as 

TIF 

– Job training and education


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Council 





Preservation of Industrial Maritime Waterfront 

Baltimore, Maryland 

WHY? Retention of existing maritime/ industrial businesses 

WHAT? Maritime Industrial Zoning Overlay District (MIZOD) 

WHO? City of Baltimore in collaboration with private sector 

businesses, property owners and the Maryland Port 

Administration 

WHEN? Initial legislation 2004, on-going updates 

WHERE? Baltimore’s industrial shoreline

HOW WAS THE MIZOD IMPLEMENTED? 

• Increase in rezoning requests (industrial to non-industrial) 

• 2004 – a Baltimore Development Corporation study 

reports investment in port facilities may be deferred due 

to uncertainty in city’s policy regarding change of use. 

• 2004 - Baltimore’s Planning Department issues a ‘white 

paper’ stating need for industrial waterfront preservation 

• 2004 - MIZOD legislation introduced and adopted 

• Baltimore Industrial Group (BIG) formed 

• 2009 – MIZOD extended to 2024, ‘opt out’ provision 

added. 

• Transform Baltimore –new zoning code legislation to be 

introduced October 2012 which incorporates MIZOD.

LESSONS LEARNED 

• You must have an organized industrial business 

constituency that speaks for itself 

• You must be aware of and understand your assets. 

Awareness and understanding brings appreciation and 

a commitment to preserve the assets. 

• There must be political will to listen and to act 

• Establishing public policy is not a static process

Larysa A. Salamacha 

Managing Director of Business Development 

Baltimore Development Corporation 

lsalamacha@baltimoredevelopment.com


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Council 





REALIZING THE POTENTIAL OF 

URBAN MANUFACTURING IN SAN 

FRANCISCO: THE ROLE OF INDUSTRIAL LAND 

Kate Sofis 

Founding Executive Director, SFMade 

Inner City Economic Summit 

September 20, 2012

Over 380 San Francisco-based MANUFACTURERS. More than 4000 JOBS for 

diverse Bay Area residents. 10.1% new job growth in 2011. 

SFMade helps build and support a vibrant manufacturing sector in San 

Francisco, that sustains companies producing locally made products, 

encourages entrepreneurship and innovation, and creates employment 

opportunities for a diverse local workforce.

San Francisco manufacturers = consumer products

HISTORICAL 

(1990) 

2,768 acres 

12.4% of the 

city 

PRESENT 

1,820acres 

8.2% of city 

Zoning + Places to Make = Affordable INDUSTRIAL 

SPACE for LOCAL MANUFACTURERS. 

In 2009, San Francisco passed landmark legislation – the Eastern 

Neighborhoods Plan – in collaboration with the local manufacturing sector -that 

helped dedicate parts of the city for industrial use. In 2010, SFMade launched 

our Places to Make program, to directly assist local manufacturers to find space.

DODOCASE 

Case Study: City as incubator for new manufacturing.

HEATH CERAMICS 

Case Study: Established company moving back.

Urban manufacturers want to be located adjacent to 

residential and commercial districts. 

Protective zoning limits competing uses – most important 

element, no residential in industrial zones. 

Need more smaller industrial space (under 5000 sqft). 

Mixed use essential. Manufacturers combining on-site 

factory retail if possible. 

Co-location and new models for “incubators” and urban 

accelerators, combining manufacturing, design, 

professional services, high tech… 

Zoning alone is not enough. 

Going forward considerations

SFMADE.ORG 

Kate Sofis, Founding Executive Director 

kate@sfmade.org


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Council 





SAINT PAUL PORT AUTHORITY 

Industrial Preservation 

& 

Advocacy Case Study 

September 20, 2012 

Lorrie Louder 

(651) 204-6236 

www.sppa.com 

ljl@sppa.com 

32

INDUSTRY IS IMPORTANT 

Piggy Bank for City 

Higher Property Tax Revenues 

Low Cost of City Services 

Living Wage Jobs With Good Benefits 

Positive Economic Impact to Surrounding Residences / Neighborhood 

Port Authority Model and Industrial Growth Success 

80-Year Old Industrial Redevelopment Agency 

Manages the Saint Paul Harbor 

Developer of 21 Inner-City Business Centers Embedded in Neighborhoods 

Over 12.5 Million Square Feet and Over 90% Occupancy 

Require Industrial Customers to Adhere to Land, Job Density, Wage Level, and Building 

Design Covenants 

Results: Over $500 Million Private Sector Investment in New Construction of Industrial 

Buildings 

New Jobs: More Than 17,000 

New Annual Property Taxes: Nearly $25 Million 

33

CHALLENGES TO SAINT PAUL INDUSTRIAL 

GROWTH 

Trends 

Significant Negative Public Perception: Industrial Buildings Not a Fit with Some 

Neighborhoods’ Visions 

Apathy About Jobs and Business Growth 

Loss of Industrial Land to Parks and Residential Uses 

One-Third of all Saint Paul Land is Exempt 

High Poverty Rate: 24% 

Compared to State (10.3%), Region (12.3%), Nation (15.1%) 

ICIC: “Saint Paul is Rich with Industrial Assets and Opportunities, but Resources are 

not Being Fully Appreciated or Exploited.” Industry is a Good Neighbor. Jobs Have 

Easy Access Points to Those with a High School Diploma and Technical Training. 

City’s Fiscal Health is at Risk 

Need to Add to Industrial base…or Cut Key Services…or Find Another Revenue 

Source to Pay for City Services 

Or Else Residential Property Taxes Will Increase 

34

APPROACH TO STRENGTHENING SUPPORT 

FOR INDUSTRIAL GROWTH 

Outreach 

ICIC Industrial Study 

First Time Opportunity to Proactively Discuss Industrial and City Fiscal Situation 

Road Show: Key Findings of Study for Grassroots Organizations 

Intent 

Develop Long-Term Dialogue With Community and Other Organizations 

Tie Together Land Use/Revenues for City Services/Fiscal Sustainability/Business and Job 

Growth/Industrial Design. ICIC Fiscal Impact Analysis: Should Be Used 

For Public Officials: Need to be Cognizant of Land Use and Spending Decisions/Fiscal 

Impact 

Lessons Learned 

Most People Have Been Open to Information and Amazed at Findings / Port’s Role 

Different Responses From Higher SES Neighborhoods 

Positive Response About Greater Port Visibility / Transparency 

Greatest Challenge: Industrial Design vs. TOD / Condos and Coffee Shops Vision 

Invigorating Process. Trust Building is Emerging….. 

35

Call us at 651-224-5686 

Email us at feedback@sppa.com 

Find us on Facebook 

(Saint Paul Port Authority) 

Follow us on Twitter 

(twitter.com/cleandeals) 

Find us on LinkedIn 

(Linkedin.com/company/428070) 

Check out our website 

(www.sppa.com) 

Or Simply Stop By


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Council 





Q & A

Larysa Salamacha - Initiative for a Competitive Inner City

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