LOCAL ECONOMIC DEVELOPMENT

LOCAL ECONOMIC
DEVELOPMENT
IN A CHANGING WORLD

What is economic development?
• Job Creation
• Poverty Alleviation
• Wealth Creation
• Tax Base Growth
• Base industries – new dollars
• Leaky bucket – existing dollars

Role of public sector
“Government doesn’t create jobs;
it creates a climate for the
private sector to create jobs.”

Four basic tools a city has…
Textbook, p. 138
• Tax incentives or disincentives
• Capital spending
• Regulatory powers
• Buying and selling property

Community Development
Block Grants (CDBGs)
Textbook, p. 135

Community Development
Block Grants
One of the longest-running programs of the U.S.
Department of Housing and Urban Development.
It funds affordable housing, anti-poverty programs,
and infrastructure development.
Largely used at the discretion of state and local
governments.

Community Development
Block Grants
Entitlement Communities
Allocates annual grants to larger cities and urban counties to provide
decent housing and economic opportunities, principally for low- and
moderate-income persons.
Small Cities CDBGs
Grants to smaller cities for community development activities.
Each State develops funding priorities and criteria for selecting projects.

Community Development
Block Grants
Section 108 Loan Guarantees
Receive a loan guarantee directly or designate another public entity,
such as an industrial development authority, to carry out their Section
108 assisted project.
Empowerment Zones
Public/private partnerships to attract investment for economic and
community development.

• Planning is part of
economic development projects
– Infrastructure
– Tax structure
– Planning and zoning authority
– Quality of workforce
– Quality of place
– Public safety

Why planners?
• Jack of all trades
• Transferable skill set
– Data acquisition
– Data analysis
– Real estate skills
– Regulatory process
– Public involvement skills

Public-Private Partnerships
Eagle Crest

Public-Private Partnerships
Eagle Crest

Incubator facilities
Textbook, p. 130

Economic development in a
changing world
• Old paradigm: ‘cheap utilities, cheap labor,
good transportation, close to markets.’
• New paradigm: ‘good value, excellent
talent, connected to the world’

The “Creative Class”
Textbook, p. 127

This means…
• Shift from ‘going where the jobs are’ to
‘going where the talent is’
• Shift from attracting businesses to attracting
talent
• Shift from cost of business to quality of
place

Ahwahnee Principles
for Economic Development
Textbook, p. 125

FUTURE OF ECONOMIC
DEVELOPMENT
• More emphasis on place making
– Perfect planner role
• More sophisticated understanding of what
business requires
• More focus on talent – creating it, attracting
it, keeping it
• Better understanding of your niche
– Technology = opportunity
– Unique = opportunity

Tyler Study of downtowns
Survey respondents were asked to evaluate their downtown
according to sixteen characteristics.
Statistical analysis indicated which characteristics were
correlated with healthy downtowns.

Tyler Study of downtowns

Planning in the “Experience Economy”
“Recognizing experiences as a distinct economic offering
provides the key to future economic growth.”
B. Joseph Pine, II, and James H. Gilmore, authors of The Experience Economy,
Harvard Business School Press, Boston, Massachusetts, pg. x, 1999.

Economics of the Experience Economy
Price of coffee offerings
$5.00
$4.00
$3.00
$2.00
Starbucks
$1.00
0
Retail coffee
Wholesale coffee
By the cup
Commodity Goods Service Experience

Economics of the Experience Economy

Experiences
What about theaters…
1. Commodity
The movie
2. Goods
The theater
3. Service
Watching the movie
4. Experience
More than a movie

Transformational Experiences
What about theaters…
1. Commodity
The movie
2. Goods
The theater
3. Service
Watching the movie
4. Experience
More than a movie

Transformational Experiences
What about theaters…
1. Commodity
The movie
2. Goods
The theater
3. Service
Watching the movie
4. Experience
More than a movie
5. Transformational
Changing a community
“Businesses raise the curtain
on the Wealthy Theatre”
SEED – SouthEast
Economic Development, Inc.

Transformational Experiences
What about theaters…
1. Commodity
The movie
2. Goods
The theater
3. Service
Watching the movie
4. Experience
More than a movie
5. Transformational
Changing a community

Transformational Experiences
What about theaters…
1. Commodity
The movie
2. Goods
The theater
3. Service
Watching the movie
4. Experience
More than a movie
5. Transformational
Changing a community

Transformational Experiences
What about theaters…
1. Commodity
The movie
2. Goods
The theater
3. Service
Watching the movie
4. Experience
More than a movie
5. Transformational
Changing a community

30 year old retail and barber shop
survived the decline and benefit
from the revitalization
Wealthy Theater
Grand Rapids, Michigan

Wealthy Theater
Grand Rapids, Michigan
Lady Love
30 years

Wealthy Theater
Grand Rapids, Michigan
Rhodes Rib Crib, since 1972

Wealthy Theater
Grand Rapids, Michigan
“I see people walking down the sidewalk unafraid. It’s beautiful!” Thelma Johnson Rhodes