Practical Strategies to Attract Economic Development Nancy Lee Dukakis Center for Urban and Regional Policy Northeastern University Metropolitan Area Planning Council Natick, MA October 26, 2010

Fundamental Proposition Cities and towns have the ability to create their own destiny, but they can benefit from having sophisticated partners who can help them develop tools and information to compete successfully.

Deal Makers Deal Breakers Self-Assessment Municipal Action

Deal Breaker #1 Municipal leaders often lack up-to-date information about location needs of industry and the recruitment efforts of competing locations, especially in a rapidly changing global economy Deal Maker/Action Steps Economic Development Self-Assessment Tool (EDSAT) Helps municipalities clarify economic development goals and identify strengths and weaknesses relative to other locations Provides access to the best thinking of private sector site location specialists The Dukakis Center and the NLC are available to provide on-going economic development training

Deal Breaker #2 Business decision makers have well-defined “cognitive maps” - perceptions or expectations of a municipality’s attributes and opportunities Deal Maker/Action Steps EDSAT assists municipal officials in Combining resources to better market their communities and respond to inquires from firms, developers, and location specialists Making their websites more informative for businesses so that they can make rational decisions about locations

Deal Breaker #3 Site specific deficiencies can add excessive costs to doing business in particular cities Deal Maker/Action Steps Encourage the enactment of urban overlay zoning districts where there can be flexible use, expedited permitting, focused public safety efforts, and amenity packages essential to creating competitive advantages

Deal Breaker #4 State and local review processes can add excessive costs to doing business in older industrial cities Deal Maker/Action Steps Identify development ready sites and pre-permit for industrial and commercial uses and market them Create a permit system that allows for a single presentation of a development proposal to all review boards Empower someone in the administration to oversee the development process and respond aggressively and proactively to the needs of firms expressing interest

Deal Breaker #5 Traditional tax abatements, tax credits, and subsidies are often strategic deal closers, but are not sufficient to attract high value business investment if previous deal breakers are not overcome Deal Maker/Action Steps Use the Tax Increment Financing program to create revenue streams for critical infrastructure needs Site state and municipal facilities in urban locations to stimulate creation of amenities and other attractions to spur private sector commercial and industrial investment

NAIOP/CoreNet Survey Categories Permitting Processes Labor: Skills and Costs Development and Operating Costs Business Environment Transportation and Access to Markets Quality of Life/Social Environment

Which location factors received the highest scores? On-site parking Rental rates Availability of appropriate labor Timeliness of approvals and appeals When asked independent of the survey, NAIOP and CoreNet respondents identified factors consistent with the survey

Which location factors received the lowest scores? Municipal minimum wage law Access to rail Strong trade unions

The Self-Assessment Tool (EDSAT ) The self-assessment tool includes sections on: 1. Access to Customers/Markets 2. Concentration of Businesses and Services 3. Cost of Land (Implicit/Explicit) 4. Labor 5. Municipal Process 6. Quality of Life (Community) 7. Quality of Life (Site Amenities) 8. Business Incentives 9. Tax Rates 10. Access to Information

Customized EDSAT Reports In a typical report you will find: (a) A summary of your responses to the self-assessment questionnaire (b) Color coded benchmarks against all municipalities that have participated in the self assessment (c) Dukakis Center staff analysis of your responses and a prioritized list of deal breakers to help you think about these issues in a concrete, actionable way (d) A ranking system noting which location factors are most important, somewhat important, and less important to attracting investment

How EDSAT Results are Being Used Chelsea - used as a roadmap to benchmark the city’s economic development policy Holyoke - participated in 2006 and considering retaking it to see how they compare now Ludlow - incorporated EDSAT into its master planning process, which is currently underway Salem - collaborated with the community stakeholders and saw it as a good vehicle to work across city departments Rhode Island - 8 communities participated individually and the Dukakis Center is providing an integrated, regional assessment

EDSAT Testimonials What folks are saying

"This is a great roadmap for the essentials for bench-marking our city's economic development policy." Jay Ash, City Manager, Chelsea, MA "It [taking the self-assessment] was a good learning experience for the employees in this town. We plan to hire a consultant [to help with development for the town], so the results from the self assessment will be good baseline data to share with the consultant." Anthony Fields, Planning Director, Burlington, MA "We have a new administration coming in, so it will be really helpful to be able to take all of this information we've rounded up for the self-assessment and hand it over to them." Steven Magoon, Chief Administrative Officer, Gloucester, MA “I’m using this as a guidebook for re-tooling our development process.” Mayor Charles Ryan, Springfield, MA

We hope that your community will participate in the EDSAT program Thank you Barry Bluestone Nancy Lee Heather Seligman Daniel Spiess

Urban Overlay District Mixed Use Development High Performing Schools Public Safety Operations Strategic Workforce Investment Leveraged Public/Private Investment Housing Priority Infrastructure Specialized Industrial Cluster Focus Transit Connections Expedited Permitting

Lead Actors State Governments Municipal Gov’ts Regional Agencies Business Vocational/Technical Schools, Community Colleges, Universities Municipal Leaders need to be the CEOs of economic development

Survey Results Mean Scores for All Factors (1 = Very Important; 4= Less Important) FactorMean Onsite parking for employees1.51 Rental rates1.55 Availability of appropriate labor1.57 Access to airports / major highways*1.63* Timeliness of approvals / appeals1.70 Quality / capacity of infrastructure1.75 Competitive labor costs1.78 Traffic congestion1.79 Property taxes1.83 State tax / financial incentives**1.83** Crime rate in the area1.84 Fast track / concurrent permitting1.84 Access to major highways**1.85** Local tax / financial incentives1.87 Land costs1.87 Predictability / clarity of permitting1.88 Undesirable abutting land use1.89 Physical attractiveness of area1.95 State tax rates**1.96 Municipal rep. as good place to work1.97 FactorMean Municipal rep. as good place to live2.03 Municipal rep. for economic dev.2.03 Zoning by right2.09 Proximity to restaurants / shops2.10 Public transportation2.15 Cost of housing for employees2.15 Complementary business svcs**2.16 Critical mass of similar firms2.20 Access to airports**2.21 Quality of local schools2.21 Awareness of brownfields2.24 Permitting ombudsman2.32 Awareness of strong neighborhood orgs 2.37 Customized workforce training2.49 Availability of sports/cultural/recreational opps 2.62 Proximity to research/universities2.66 Informative municipal website2.75 Strong trade unions2.82 Access to railroads**2.84 Municipal minimum wage law3.00 * Question asked in NAIOP survey only. **Question asked in CoreNet survey only.

The Framework for the Tool Municipal officials and staff working together answer over 250 questions in 10 categories The results of the Self-Assessment Tool are secure and provided only to the local officials. Each community can choose to share the results at their own discretion The results provide an ability to ascertain a community’s economic development strengths, weaknesses, opportunities and threats

“The Partnership has provided me with the knowledge and assistance I need to understand and respond to the rapidly changing economic environment and to be an effective leader for economic development in my city." James Mitchell, Council Member, Charlotte, NC and 1 st Vice President, National League of Cities "I'm using this as a guidebook for re-tooling our development process." Mayor Charles Ryan, Springfield, MA "We want the mayor to use this data [from the self-assessment] as a selling tool to get firms to come to our town....I think there's real value in being able to hand this information to a firm that might be interested in our town. It's been a great exercise for Norwood and we're just beginning to explore what changes we can make a result." Steve Costello, Town Planner, Norwood, MA

Sample Question 1 What is the average time (in weeks) from application to completion of the review process for the following: Building permit?  0-4  5-8  9-12    36+

Sample Result 1

Sample Question 2 What is the prevailing average hourly wage rate for mid-level clerical workers?  $6.50 or less  $6.51-$7.50  $7.51-$12.50  $12.51-$20  $20+

Sample Result 2

Sample Question 3 What percentage of available sites for general office space have on-site parking?  0%  1-25%  26-49%  50-74%  75%+

Sample Result 3