Posts Tagged ‘Chuck Eckenstahler’

BARODA MICHIGAN – “placeMaking” a Great Community.

August 12, 2016

Econ of Place book cover10-year economic reinvention strategy profiled in Michigan Municipal League nationally distributed book

Today, “placeMaking”, the newest strategy for reinvention of economic troubled downtowns through creation of a new economy founded on higher density residential living, more pedestrian walkability and less dependence on the automobile, is the new elixir for past downtown decay.

While a national phenomenon, especially in Michigan this strategy is being promoted for big and small city economic renewal strategy.

Its founded on two economic philosophies, the first, that today’s smart young talent prefer a different residential pattern of development, one of higher density that supports compact social, entertainment and employment opportunities within reasonable “walkabily” (or biking) distance.

The second principle is that employers who want this young talent for their business will seek out and locate in these densely populated centers where needed talent reside.

Simply stated, business will move to talent rather than talent moving to business.

Evidence for this evolutionary demographic change is substantial.

US Census data document that central city population in metropolitan areas have grown more quickly than other forms of residential living environments.

Today, city planners promote “placeMaking” as the elixir for future economic sustainability by identification critical uniqueness of local economies and both public and private investment to create the higher density residential living environment and walkable social environment and employment venue.

Baroda is an example of the unique competitive advantage theory.

It was founded to collect surrounding farm production for transport, via interurban rail to the Benton Harbor/St. Joseph metro center prior to the advent of truck transport.

It reinvented itself in in 60’s & 70’s as southwest Michigan’s “tool & die” capital servicing the auto and appliance manufacturing industry.

Returning to its agricultural roots, in response to the demise of manufacturing, today Baroda serves as the center of southern Lake Michigan’s wine and craft brew agriculture crop production and mechanical equipment manufacturing.Baroda Michigan Municipal League Cover Article FNL  9

Baroda’s latest economic reinvention is told in the MML book Economic of Place – The Art of Creating Great Communities”, a case study of Village government investment and new business location and growth documenting “placeMaking” success.

 For me, it chronicles a 10-Years of personal history with a special community made up of a unique citizenry seeking a sustainable small town suburban economically viable walkable living environment.

I’m proud to serve as the planner, economic developer and advisor to Baroda in “placeMaking” a great community.

 

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Preparing Next Gen Economic Development Leadership

August 10, 2016

Purdue Northwest Graduates Northern Indiana’s first class of ED Civic Leaders

Picture1In 2006, I was asked to help establish an economic development educational program to be offered as an elective in the Purdue Northwest Masters of Business Administration degree program and teach its capstone class.

While consuming several years to gain academic approvals, the three classes, The Competitive Advantage of a Region, Economic and Social Analysis, and The Process of Economic Development were formulated into a free-standing certificate allowing both full-time MBA and non-credit student enrollment.

This certificate program fulfills an identified need in Northern Indiana – an educational opportunity for a wide-range of community leaders to gain knowledge about the role of economic development in their community.

The Process of Economic Development capstone class activity gives the student a “real life” experience analyzing a preselected community for the location of a new business including a formal presentation of community assets before a panel of representative decision makers of the business made up of the Mayor and several economic development practitioners.

Northern Indiana is truly blessed to have a cadre of upwardly mobile leaders who will undoubtedly serve as volunteer board members for economic development organizations whether they be government, chamber of commerce or nonprofit sponsored and guide their economic development efforts towards success.

This education program prepares students with knowledge of economic development agency operations but also duties and responsibilities of the agency directorship appointment.

This is a “first of its kind” program to train future volunteer economic development leaders in Northern Indiana, a model that surely will be followed by others.

 

 

INNOVATIVE COMMUNITY…are you one?

August 8, 2016

Smart PlacesTHE SMARTEST PLACES ON EARTH   Why Rustbelts are the Emerging Hot Spots of Global Innovation 

Antoine van Agtmael and Fred Bakker

2016 Public Affairs Perseus Books Club, New York

It’s every Mayor’s goal…an innovative community that surpasses social and economic threats producing social and economic prosperity.

There are 100’s of books telling how to do this…describing public, and yes, private programs to achieve this.

One of the newer contemporary suggestions – innovation – put forth by Antoine van Agtmael and Fred Baker in their book “The Smartest Places on Earth” add to the wealth of ideas and techniques for socio-economic sustainability.

They proffer that “brainsharring” for the new economy, the “reinventing of local economies by developing new products, technologies that will eventually transform daily life, is the solution to economic repurposing of our rust belt impacted communities and surrounding regions”.

Through visitation and personal interview among a select group of economically reinvented former “rust belt” global communities, they identified “keys” to successful economic reinvention.

Here are a few “takeaways” from reading:

PAST HISTORY IS UNDERSTOOD AND FUTURE REOCCURRENCE IS PREVENTABLE
Successful “brainsharing reinvention” begins when communities acknowledge the historic economic malaise and generate a strong sense of action to prevent reoccurrence – the “communitywide recognition that economic improvement action is necessary”.

AN ECONOMIC PATHWAY IS PRESENT AND UNDERSTANDABLE
Coupled with the attitude ‘it won’t happen again” is the notion of a new direction – “a pathway to economic revitalization that repurposes the local economy producing a sustainable future”; one that is also easily understandable to a wide spectrum of constituents”.

MULTIPLISTIC SUPPORT MAGINFIES SUCCESS
Brainsharing across public and private entities is a must and typically arranged, facilitated and mentored by a “connector”, one, or more, individuals who bring together, normally separate interest groups to collaborate and then serve as their “shepherd” leading them to a specific goal.

NARROWISM SUCCEEDS
While there are many pathways, concerted effort on 1 or 2 reinvention strategies leads to greater chance of success compared to expending a “little bit of effort on a wide variety of strategies”.

For those interested in economic reinvention of local economies, this book will stimulate some interesting thoughts about the “new economy philosophy” of economic development and job creation.

Economic reinvention comes with destruction and replacement of current socially accepted community thinking.

Maybe more important for action is the “continued fear that a significant economic down turn event can happen again and we can’t let that happen”.

It also shows that reinvention must happen regardless of its hard work and realistically, is bigger than our community alone…calling on us to cooperate on a larger regional scale.

An innovative community is one which welcomes technological destruction, shows a willingness to sponsor “brainsharing” for the purposes of producing new businesses creating new economy jobs and investment.

THE SOUTH SIDE – A Portrait of Chicago & American Segregation

August 6, 2016

 Natalie Y. MooreMoore book

South side reporter for local NPR member station.
2016 St. Martin Press, New York

Chicago is a city of neighborhoods…places of similarity…racial, religious, ethnic, socio-economic.

These places both connect and divide human contact, economic investment, political capital… they also foster racial, religious and ethnic diversity while perpetuating segregation.

Growing up a Chicago “sout-sider” means you’re different – not bad, nor deprived but different.

Natalie Moore captures this difference.

Being a black “sout-sider” she shares her life experience; a middle class black family upbringing from the Chatham racially divided neighborhood to racially integrated Beverly and Hyde Park/Englewood neighborhoods to the up and coming Bronzville neighborhood all while expertly describing how Chicago social, political and economic forces shape the neighborhood landscape and their socio-economic strictures.

Being a Chicago “sout-sider” and a seasoned city planner – economic developer I was anxious to read her book.

The book refreshed memories, and I can say…I saw it, I lived it…and personally experienced both the good and the bad of Chicago’s “sout-side”.

For the city planner, her book offers many insights into today quest for community “placeMaking”.

Socio-economic homogeneity draws together economic and political power useful for neighborhood sustainability while at the same time posing a barrier to outside capital infusion and citywide political influence.

Readers will be challenged with the question of whether a socio-economic concentrated enclave is better than multi-faceted interests for neighborhood sustainability and social and economic betterment?

This is a must read for city planners and others with interest in “placeMaking” the art of “creating great communities” built around vibrant neighborhoods were people want to live.

 

COUNTY “OPT-OUT” TO NEUTER MICHIGAN’S TIF

April 17, 2014

It was bound to happen….the destruction of Michigan’s most effective economic development tool.

Over the next several years, as new and updated Development and Tax Increment Financing Plans are adopted, it’s likely that more and more counties and colleges will “opt-out” reducing the amount of future funds available to Michigan’s Downtown Development, Corridor Improvement and a number of other specialized authorities created by Michigan local governments.

The impact is, and will be, pretty draconian to local community economic development.

A big loss of TIF revenue

A quick review of nine TIFs I have completed during the past five years in Southern Michigan shows that City/Village formed TIFs will lose between 20 to 50% of future revenue and township formed TIFs between 60 to 80%.

Ouch…is all Wayland City Manager, Michael Selden could say when I shared this information with him.   “This will surely change the way we go about the budgeting process for our Downtown Development Authority”, he added.

Opt-out “its” – why counties opt out

I first saw this coming a few years back when a small community used DDA funds to buy a snow plow truck “cause it will be used to plow downtown streets too”.

It became more evident when one community had in in excess of $500,000 in their industrial park TIF; funds sitting idle with the entire infrastructure installed and paid for

This was reinforced when the lack of DDA oversight in two communities led them into emergency financial problems due to the use of DDA funds for unauthorized purposes.

It’s also common practice to “slide over” typical general fund expenses to an authority for payment; things like pavement marking, street sweeping, landscaping expenses plus certain salaries & wages – expenses that normally would paid with general budgeted funds if there was no TIF revenue.

It’s pretty easy to grasp the reason for “opt-out”.

Why in face of county fiscal challenges should the county divert funds to sit idle in a local community’s bank account or pay for things that normally would be paid from the community’s general fund?

In the industrial park case, the diverted county funds held by the community would fully fund the projected budget deficit for the year.

The reason for opt-out is pretty simple, poor management and lack of oversight on the part of the local community and yes, the county (college and other tax capture entities) also.

More opt-outs to come

Since most TIFs are outgrowth of DDAs (and other authorities) formed about twenty years back, we can assume that more opt-outs will take place as communities are required by law to update their Development & TIF Plans.

Because there are no TIF police or required legislative compliance reporting, the number of TIFs that may be subject to opt-out cannot be easily determined.

Based on my experience I suspect, a large number of TIFs operate without an up-to-date Development & (separate) Tax Increment Financing Plan properly approved by the City or Village Council or Township Board.

Even where these documents currently exist, often times, they are not current, incomplete or do not correspond to the actual projects and funding decisions made by the authority board.

The TIF police function is solely the duty of the legislative body of the community that establishes the TIF, a duty typically unrecognized and rarely exercised by elected officials.

Good use TIF guide

With changes bound to happen here are some “good use” TIF operating principles:

Option 1 – Ø county funds

Under this scenario, there is no capture of county (or college) tax revenues.

The impact of this decision is to leave funding TIF expenditures solely with local government general fund sourced revenues.

Bridgman City Manager, Aaron Anthony questions the need for the city’s Corridor Improvement Authority “if we have to fund all of its expenses”.  Why don’t we just eliminate the CIA and do the projects ourselves”, he added.

But Michigan’s emphasis on central city “Place Making” requires a separate authority (DDA or CIA) to increase eligibility for state grant funding, to obtain redevelopment liquor licenses and to offer commercial renovation tax abatements.

“So even if we don’t ever form the TIF District and capture general funds, there’s a need for the CIA itself….I could run the CIA as a shelf organization and use it only when needed for these specific purposes”, quotes Anthony.

Option 2 – Cap the amount of county funds

Dan Fette, Berrien County’s Community Development Director, supports a somewhat different approach.  On his advice, the county adopted a policy that places a cap on the total amount of county revenue that can be captured during the life of a current TIF Plan.

The county and local government agrees, by contract, to a predetermined amount of future county revenue that can be captured. The amount is determined by projecting future tax revenue expected for new development and inflation increased existing property values documented within the TIF Plan adopted by Council or Township Board.

According to Fette, “this gives the County an opportunity to discuss what projects and activities will be funded and how much future County tax revenue will be diverted to support local economic development within each specific community……obviously good projects that increase employment and create additional tax base will be viewed differently than activities that don’t”.

“Use of an intergovernmental agreement sets in place the opportunity to introduce recapture processes for TIF funds used in violation of the terms agreed upon”, he notes.

Option 3 – Project specific revenue sharing

A variation to the Option 2 – Cap approach is to the limit County (or college) TIF funds use for specific agreed projects.

This is an interesting approach; In Michigan we have several specific authorizations that effectively do this now; the Water Resource Improvement Tax Increment Financing Act, PA 94 of 2008, being an example.

For these TIFs the County (and college) effectively make an “in-or out” decision to participate in the single purpose use of TIF funds by a local government.

This same idea to “opt-in, opt-out” of specific projects can be used “right now” by a DDA or CIA.

It‘s pretty simple according to Aaron Anthony, “all that’s needed is a Development Plan that contains specific projects with their estimated costs approved by the Council and ok’d by the County.  All tax revenue, both county and city, in excess of that needed would be considered ‘excess’ and, as required by law, returned to the city and county”.

Option 4 – Annual work program approval

Another approach, one this writer supports, is annual work program agreements between authorities and funders.

This was first introduced about five-years back in southern Michigan where authority Development and TIF Plan adoption ordinances, this writer prepared, added a provision that required the Chair of the authority and the chief elected official of the local government, to prepare and personally sign an annual report detailing accomplishments, expenditures and compliance with adopted plans.

The intent of this requirement was designed to serve as the basis for discussion of the past years use of TIF revenue and to discuss the use of TIF revenue for the coming year to assure that all funding was being used in accord with the terms of the approved Development and TIF Plans.

Unfortunately, this didn’t work well.

Neglected by the authority and the chief elected official and not “followed-up” by the county (or college), the reporting duty just became another disregarded task of local government.

Reforming TIF in Michigan

Michigan is a bit unique in use of TIF.

In other states, especially those that allow school tax revenue capture, the amount and purpose  of tax increment financing is more individual project focused and subject to a higher degree of  initial scrutiny and periodic performance review by the funders.

With this said, TIF is important to Michigan.

It is one of relatively few means for local government to incentivize a complex development or redevelopment project when applied in its truest form – “having new development tax payments fund needed infrastructure needs.”

(See: Michigan Tax Increment Financing: A Primer, Planning and Zoning News, December 2006, for an explanation and history of TIF use.)

Today in Michigan we need to return to the original purpose of TIF, funding needed infrastructure that results in new development and quit viewing, from the local governmental perspective, TIF being an opportunity to “leverage someone else’s tax revenue” to help support  local government economic development and desired day-to-day operating needs.

PLANNING CHICAGO – A summary of Chicago Planning effort beginning in the 1950’s

April 10, 2014

PlanningChicagoFor us Chicago trained planners, Burnham’s Chicago Plan and the Chicago School of government planning never seems to escape interest.

The more years in the profession the more we tend to look back into history for guidance for the future.

Planning Chicago, by D. Bradford Hunt and Jon B. DeVries adds something to the base knowledge and historical understandings.

Chicago planning and real estate development has been, and always will be, I suspect, driven by a unique relationship between government, business and organized community interests.

It’s inbred into the political structure of city ward government, historical neighborhood enclaves that began with immigrant migration in the early 1900’s and the strong commercial real estate needs of growing businesses.

While some can argue that Chicago planning works, or doesn’t work, historical facts demonstrate that governmental and civic planning does work, maybe not the precise way of the planning text books, but, none the less, “the Chicago way”.

Planning Chicago adds much-needed information and insight to “the Chicago way” of planning, highlighting Chicago’s downtown, neighborhoods, and business strategic initiatives all-together shaping the Chicago’s growth into the next century.

Especially interesting to the reader will be the last chapter.

The writers challenge the concept of “the Chicago way” opining the era of “big plans” – another Burnham plan – cannot be produced to guide the future growth of the greater Chicago region.

It’s implied that traditional text-book planning approaches are passé, due to disconnect between traditional planning and the financing of projects that comprise these “big plans”.

With this in mind, the authors call for restoring “planning” of the more traditional kind built upon grass root community activism conjoined with business and government interests. It’s believed that Chicago’s future must rely upon “a comprehensive plan that examines all aspects of the city, creates a shared purpose, raises consciousness about important challenges and summons the resources so they can be allocated effectively for future needs.

All that needed is the political will to do this”.

The authors have contributed a valuable resource to the history and contextual understanding of planning theory, especially planning activities influencing the greater Chicago Region.

This is a must read for all Chicago trained and Chicago interested planners.

Fredrick Law Olmsted A Clearing in the Distance

April 8, 2014

Fredrick Law Olmsted and America in the 19th Century

 An urban place making designer before his time.

FLO Clearing in the DistanceFor us schooled in the land use planning profession, especially those educated in the Midwest, two names have special meaning – Daniel Burnham and Fredrick Law Olmsted.

Burnham and his 1909 Plan of Chicago always seem to take center stage.

But Olmsted’s contribution to Chicago and Detroit among other Midwest cities is equally noteworthy.

Olmsted, labeled the father of Landscape Architecture, is credited with bringing parks and natural areas into the American planned landscape that city planners envision.

While best known for New York’s Central Park, Olmsted gave us Belle Isle in Detroit, Jackson Park and the Midway Pleasance in Chicago, and the Louisville Kentucky Parks and Parkway system in addition to spearheading the national park system movement of the late 1880’s.

Witold Rybczynski’s biography of Olmsted is a must reading for up and coming planners and landscape architects.

The “take away” from this reading is an appreciation of Olmsted’s understanding of “natural environment place making” the ability to use a natural environment, a park or other landscape area to contribute to the overall cityscape development pattern and influence the day-today living environment of city residents.

Today, Olmsted would be classified, not only a landscape architect, but a “urban place making designer” championing the notion of creating places to attract people and offer a respect from the built environment with stretches of trees, water features, meadows and grassed turf areas as “collective people places”.

He was truly “America’s park maker”.

MICHIGAN MODERN-DAY REGIONALISM

April 5, 2014

GOVERNORS’ REGIONAL PROSPERITY INITIATIVE TO REPURPOSE 40-YEAR OLD MICHIGAN REGIONALISM

Big changes in store for Southwest Michigan

Will Benton Harbor – St. Josephs’ future be a suburb of Kalamazoo or can Benton Harbor-St. Joseph rise to true metropolitan status?

Governing logo“Cities are going to be the engines of the future” announced Bill Rustem, Governor Snyder’s Director of Strategy, at the Governing magazine sponsored Michigan Leadership Form held in Lansing on April 2, 2014.

He announced’ “If Michigan is going to compete (globally) it needs cities that are competitive”

Under the Governors’ Regional Prosperity Initiative, “the state isn’t going to tell people what the state wants but defer to local decision makers and let them, as a region, tell the state what role in the State of Michigan they want to play in the future”, added Rustem

Region 10 mapThis challenges civic and governmental leaders in southwest Michigan to determine what the 10-county region wants to be and who it wants to identify with – Kalamazoo, South Bend or maybe Chicago & Northern Indiana.

Regionalism reinvention is upon us.

Underway are changes that will reorient nearly 40-years of regional planning history of Berrien, Cass and Van Buren counties which in the early 1970’s, abet under duress of the loss of federal and state funding, and came together as Planning & Development Region 4, one of 14 regional planning agencies geographically defined by gubernatorial executive order.

Failure to reach consensus on a state and global identity for the newly designated 10-county region, means that communities without a regional and city identity could become a “suburban location of nowhere”, according to Rustem.

To me, this is history repeating itself.

Back in the 1970’s, the Benton Harbor-St. Joseph greater Twin-Cities area was considered rural, even though it was home base for seven national firms; Whirlpool and & Clark Equipment, being best known.

Local leaders at that time realized being rural meant being overlooked by industrial development scouts, regional shopping mall developers and many other businesses including the emerging fast-food franchise industry.

The effort to make Benton Harbor-St. Joseph a Metropolitan city was successful in 1980 after locally sponsored lobbying for federal census rule changes redefining population requirements for metropolitan central cites – ironically labeled “the Benton Harbor rule” by the Chairman of the federal rule making committee.

However 40-years of history have failed to produce a statewide and global metropolitan identity.

Absent from metropolitan growth research and pundit commentary about of central city place making is any mention of the Benton Harbor-St. Joseph Twin Cities metropolitan area – it’s just not on these folks radar screens.

So here we have history repeating itself.

Back 40-years ago, the Benton Harbor-St. Joseph Twin Cities Area was “just another undiscovered rural area”.

Today, the Benton Harbor-St. Joseph Twin Cities Area again is an “unrecognized slow/no-growth small metropolitan area”.

The Benton Harbor-St. Joseph Twin Cites Metropolitan Area has failed to grow into a dominate “regionally recognized city center” that businesses and people, especially young talented people identify.

Truth is – change needs to happen for a successful growing population future.

It’s no longer acceptable to look at self-contained inward growth policies but to reach out and connect with others.

This is a “tough job” recognizing the Benton Harbor-St. Joseph Twin Cities area is relatively self-contained economic market surrounding by smaller cities better connected to more vibrant larger central city markets, some in Michigan and some in Indiana.

This message is a wakeup call.

It’s time to begin a process of regional planning, to lock in some of the past success in collaboration and cooperation to forge a global regional identity, whether that be a stand-alone Benton Harbor-St. Joseph Twin City identity, a Kalamazoo suburban-based small metro identity, a South Bend suburban-based small metro identity or something different connecting with the Chicago multi-state metropolitan identity.

Bill Rustem is not only a good policy wonk but a strategist who can look through a clear-lens and see both long and short-term strategies that can be implemented to achieve public policy objectives.

His message at the Leadership Forum is quite clear, “the Governor is giving Michigan’s local leaders and the public an opportunity, to work with the public and business community to create Michigan’s Future”. 

The message is pretty clear, its central cities and regions that matter.

Failure to recognize and accept these changes, or resist them, means one, or both, will lose.

TRANSFORMATIONAL MUNICIPAL LEADERSHIP

April 1, 2014

Why some small & medium sized communities are successful with economic reinvention and others become ghost towns!

Richard G. Longworth in his book “Caught in the Middle – America’s Heartland in the Age of Globalization”,  lays the historic groundwork explaining why some communities become ghost towns – the failure to adjust to change…being transportation, communications or market force changes that reshape the local economy. Today similar changes such as a lack of direct interstate roadway or high-speed internet connectivity are reshaping future sustainability of many smaller communities, especially those not having connection to a metropolitan area. There is ample evidence that metropolitan regions are the collectors of population growth, increased household wealth, creative workforce talent and ultimately future prosperity. As the concentration of growth trends continue to accumulate in metropolitan areas, smaller communities, especially those lacking connectivity to metropolitan areas, will face economic sustainability challenges. While a large number of smaller communities will inevitability be unable, or unwilling, to make necessary political and civic changes leading to prosperity, others will “take-on” challenges to reinvent themselves for the future. Study of successful smaller communities, over the past 40-years has led me to identify ten key ingredients, which will separate ghost towns from successful small towns of the future:

 1. Transformational LeadershipDilbert leadership

Every successful community has one – they are “action figures” persons with the personality and leadership “karma” drawing together differing, and at times conflicting, pathways into a single direction – “they’re the lead dog in the sled team and pilot the direction for others to follow along.”

Successfully communities in the future will all have a leader, a single person who collects and draws together ideas, combines individualized personal commitments, plots-out a uniform action strategy and sets-in-place the deployment process to implement change.

 2. Long-term Consensus Strategy

In today real world agreement doesn’t exist anymore comments Aaron Anthony, Bridgman MI, City Manager, “it’s a generally held conclusion that 100% agreement is a figment of imagination and that we can get everyone on the same page when forming community strategy”. But successful community development is founded on the premise that we can set aside our differences and reach agreement upon certain principles that result in a strategy that all parties accept and will implement.

Successfully communities in the future will be guided by a generally recognized, and community accepted, long-term consensus strategy that in general terms, tells where the community wants to be in the future – a compass point showing direction rather than specific GPS instructions for the journey.

 3. Dedicated “Single-Focus” Management

Unlike 40-years back where community leaders had a limited number of issues to handle, today’s municipal community development function is far more complex, governed by a greater number of laws and regulations, influenced by a larger number special interest groups and susceptible to increased legal intervention. Constantine MI, City Manager, Mark Honeysett sums it up quickly, it’s easy to get to many things on the plate at the same time and get nothing accomplished.  The result is more time, more money and more complexity in carrying-out both the civic and governmental community development function”.

Successfully communities in the future will those communities who recognize and realize that a community cannot address every issue at the same time and direct both human and financial resources to a prioritized list of needed accomplishments.

 4. Long-term Funding Mechanisms

Transformation according to Bridgman MI, Manager, Aaron Anthony, “is not an “annual pay-as-you-go proposition, but a multi-year commitment of interconnected projects that required several years of funding to achieve best results.   Communities that recognize implementation does not comply with election cycles or annual budget cycles have a better chance for success”.  Modern municipal project management requires identification of all potential funding sources with their probability of funding success as part of the project planning process to help communities better define the overall project scope and anticipate costs in an effort to achieve greater implementation success.

Successfully communities in the future will recognize the value of multi-year project budgeting opposed to annually deciding what can spent and how to use the annual community budget.

 5. Leverage Funding Opportunities

Change is costly with most major “transformational” projects exceeding the annual tax revenue of most communities.  This results in reliance upon other funding sources. Federal and state grants are always viewed as the first supplemental source, but tax increases, tax increment financing, borrowings and even private donations all have place in leveraged funding opportunities.

Successful communities in the future will rely on realistic expectations of  grant and other funding sources and consider the ability to complete projects using only local funds.

 6. Experienced Technical Guidance

Local elected officials “don’t have to be smart – only popular enough to get elected” was told to me many years ago Cass County, MI Commissioner Johnnie Rodebush, “the best thing we can do is hire smart guys, like you, to help guide us in making things work.” It is uncommon occurrence that once elected, the elected official has comprehensive knowledge of the vast number of governmental programs available leading to  reliance upon technical help and services to assist in successful project implementation.

Today and even more in the future, successful communities will realize navigating the complex, ever-changing, municipal world, requires good advice and technical assistance from qualified and experienced help for success.

 7. Appetite for Civic & Political Risk

Supporting civic and governmental change implies taking risks – risk of criticism, risk of losing an election and possibly loss of community status and position in social and civic organizations.

Successful communities in the future will identify risk taking as an accepted part of a successful transformation process and celebrate rather than shy away from possible adverse effects of implementing change.

  8. Acceptably for System Changes Needed for Success

Government structure, especially in some Midwest states, was born in the late 1800’s and remains in place today.  However, the reliance on single government solution, guided by independent separatist elected bodies at times hinders the ability to solve problems which span multiple government jurisdictions such as potable water supply and sewerage collection/treatment, storm water management and transportation.

Successfully communities in the future will have relinquished some of today’s commonly held duties in favor of multi-jurisdictional delivery systems that may offer cost savings, provide superior services and more efficient management oversight.

 9. Unrelentless Pursuit of Success

Author Tom Peters, in his 1980’s book “In Search for Excellence” chronicled the theory of successful companies based on a total commitment and passion for excellence.  So too with community development, strategy a long-term passion for success always trumps stop-and-start attempts.

Successful communities in the future will not only subscribe to a passion for success but leverage this passion in pursuit of continual success.

  10. Civic Acceptance of Need for Success

Bob Gets, Village of Baroda MI, President, credits Baroda’s nationally recognized economic reinvention success to the community acceptance that “if we didn’t make a change we would become another Michigan ghost town” upon realization, in 2004,  that the loss of  over 10 tool & die shops with over 220 employees would never return. Most communities need a life-or-death realization to create the wanna-factor and wake-up a passive community mind-set that changes must happen.

Successfully communities in the future will have a civic “wanna-factor” for a successful future and economic sustainability – a spirit that is communicated and is easily recognizable outside of the community.

FINAL THOUGHTS

 Successful smaller communities need transformational leadership for success.

As Longworth states “like it or not, it’s the cities that are the economic engines of the 21st Century.  The small towns may be the spiritual anchors of the Midwest, but they no longer serve as the economic engine of the future.  Only those smaller communities that have the courage and political ability to reinvent themselves and integrate themselves in the new economy will prevent the ghost town from becoming reality”.

ECONOMIC DEVELOPMENT TODAY, TOMORROW AND BEYOND – Preparing for the future?

March 12, 2014

Over the past several years, my friend Craig Hullinger, former Economic Development Director of Peoria Illinois, and I have annually surveyed our colleagues in the economic development, city management and the community planning profession asking what they believe are the “most important & biggest trends” influencing their daily work tasks both today and in the coming year.

This is always a fun exercise.

Most of our colleagues are “old guys” with 30+ years of experience.  However, we sprinkle some “younger blood” into the conversation so the old guys don’t mentally fossilize!

I decided this year to sit back and look deeply into the crystal ball again and characterize what in our collective opinion are the 10 most likely trends that will shape how communities conduct their community planning and economic development programs in the future.

The results were not what I expected.

In the past, we identified changes, ones I would say, were not very “transformational” to the profession.

The results of this current survey, I believe, are “life changing”.

In my opinion, the changes identified characterize a new generation of leadership and principles that will guide community growth as we journey through the remainder of the 21st Century.

With thanks to all contributors, here are my thoughts and predictions for this generational change.

1.  Old people will die – Generation X and Millennials (Generation Y) will lead.

The “baby boomers” are getting old and are leaving the work force – leadership is being transferred.

Senator Alan Simpson, coauthor of the Bowles Simpson Fiscal Responsibility and Reform Plan, on CNBC recently stated “there are 10,000 people each day turning 65-years old” resulting in baby-boomers retiring and leaving the workforce in massive numbers, some by choice and some by business downsizing via early retirements and layoff.

Today, Generation X, those ages between 34-54 years, are taking over corporate and government leadership.  Even the top job in the US, the President, is taken by a Generation X’er; 52-year old President Obama.

This younger generation, especially the millennials (Generation Y – aged 18-33 years), are better educated, more computer savvy, electronically connected and have different social, cultural and collaborative decision-making skills than the baby-boomers – skills which will change the way community engagement is conducted and community development decisions are rendered.

Younger, better educated and communication savvy men and women will shape the future and take care of the baby-boomer generation as it ages.

2.  History will be the future, if we let it.

Change is hard and the older you get, the harder it is to change – “inaction is easier than in action.”

History can be the predictor of the future, if we let it. Our government system is designed to make inaction easy.  As politically safe – it doesn’t cost anything and doesn’t rankle the electorate or create criticism. To many, a major transformation action is almost an impossibility, so why bother.

However, change happens, nothing stays the same and communities that realize that economic change will happen and take action are always better off.

In the future, communities that embrace action, rather than inaction, by continually reinventing themselves will gain economic sustainability as the global, national and local economy changes.

3.  Social networking is faster than coffee shop communications.

A recent NBC news report about the millennial generation commented on the continuous communication need of the generation that grew up with smart phones.   One millennial interviewed stated the importance of instant and continuous communication – “I get a bit nervous after 2-3 minutes if I don’t have my phone”.

Where baby-boomers recognized that the “morning coffee shop telegraph” was faster and had a bigger reach than the local radio & TV stations and newspapers in communicating with the community, today’s communication is instant communication by the smart phones that transfer “breaking news” throughout the community.

Beginning today and in the future, smart phone communication will replace the importance of radio, TV and newspaper communication in community decision making.

 4.  Population size matters.

The American landscape is filled with ghost towns and more will be created in the future.

The question of whether there is a minimum population necessary to have a community is serious question; one where academic research is needed. 

How many people are needed to support effective government with enough people to appoint to the planning, economic development and other committees?  How big does the community need to be to support a church, a Boy Scout Troop, and – yes – the local retail shops?

This is a serious inquire about the future of smaller communities leading to the question of how best to divide state and federal community support funds for infrastructure development and other community enrichment programs. Do we give potential future ghost town equal access to state and federal funding?

In the future, a minimum community population size will be needed to fulfill government management duties, support community social capital needs and bring into the community sufficient household income that can financially support local community retail needs.

5.  Simplicity and speed increases success.

Michigan’s community planning demonstrates lack of simplicity.  It requires preparation of three principal documents, the 20-Year Master Plan (63-day review period), a 5-Year Parks, Recreation and Green Infrastructure Plan (30-day review period) and a 6-Year Capital Improvements Program (which may not need a review period).   Add on a downtown or other authority and you have a 20-Year Development and Tax Increment Financing Plan with a 20-day review period.

Confusing, you’ll agree, I bet.

Even for us who daily work with these laws, it’s hard to explain.  It’s even understandably more difficult for the volunteer board member who is empowered to prepare the plans for their adoption or, after preparation, their recommendation for adoption by the legislative body.  The complex process of preparation of multiple plans and consolidating them into a coordinated community future strategy adds time and costs – simplicity would mean less confusion and faster preparation.

Pity the unknowledgeable citizen who comes to the public hearing and is faced with trying to fit together this mismatch of plans seeking to understand where the community is headed in the future.

In the future, comprehensive community future strategy will be simplified and easier to communicate expanding the ability for citizen input and greater understanding, all which will lead to a better community-wide understanding of which direction the community is heading.

 6.  99% may = success – but 1% can = failure.

Majority rule is thing of past, if we let it.

Even with 99% support, it’s possible for any initiative to fail when the 1% has sufficient money and legal ability to “tie-up” the process with the goal of never allowing a solution.

This problem is not only a Washington matter but one that plays out at the state and local levels.

This era of “political grid-lock” is a serious menace to participatory decision-making giving the impression that personal participation won’t matter so “why get involved”.

In the future reaching uncontested consensus will become the principal goal of community development initiatives, a process which will increase the time and cost of the community development process, and frustrate the electorate that seeks quick change.

7.  The sand box is market sized.

Riley Law of Retail Gravitation states that “all else being equal, a person will travel to the closest retail location for a purchase”.  This makes sense, especially when gas prices are reaching $4.00 per gallon; smart shoppers will travel to the closest retailer when the price and product are the same.

Riley’s law also helps define the modern community, being the market (or trade) area where people gravitate to for shopping and other services.

The reality is that, consumers today don’t pay much attention to which political jurisdiction they shop. The fact is, many don’t even know in which municipality they reside, except when voting and paying taxes.

Today, geopolitical boundaries are less important than economic market areas when defining community. 

Economic markets, in the future, will become even more important in defining community and be drivers of need for geopolitical redefinition to increase economic sustainability encouraged by community development planning and economic development strategy implementation separated from the confines of geopolitical boundaries.

8.  Taxable value is population growth driven.

Almost all communities rely on real estate taxes to fund governmental services and most local taxes are based on the value of real estate.

Ultimately the law of supply and demand rules the community real estate tax revenue.

Communities with population growth, new households added from in-migration and young folks setting-up their first households; stimulate demand for existing and new homes.

More households bring more spending creating the need for commercial real estate investment.

It’s easy to see that communities with population growth will tend to have an increasing real estate taxable value and those with stable or no population growth will tend to have a stable or decreasing real estate taxable value.

In the future, community population growth will become more important as a means to increase governmental revenue and community development measures will focus on actions to stimulate population growth.

9.  Bad times = innovation & entrepreneurism.

It’s an accepted fact that small businesses and entrepreneurs are the community job creators.

The economic recession has focused attention on this phenomenon to fulfill the job creation expectations of communities suffering from high unemployment.

It’s the mantra of economic development practice today – grow your own jobs!

Studies, most notable by the Kauffmann Foundation, demonstrate the promise of the “grow your own jobs” theory.  They document that 54% of millennials seek to start a business and that three of each 1,000 adults desire to start a business. 

Many start-up businesses result from the lack of job opportunities, others from the realization that starting a small business can be a personal career choice and for some the ability to mimic start-up financial success of others.

Economists have documented today’s post-recession recovery is no different than past recession recoveries shown by small business innovation and expansion trends presented daily in today’s media.

Community economic development strategy will continue to place more emphasis on innovation and efforts towards home-grown job creation by mentoring expandable smaller businesses, facilitating the start-up of new businesses and educating young people that entrepreneurship can be a  personally satisfying and financially rewarding career choice.

 10.  Status quo biases leads to failure.

Communities don’t easily change; in fact, there is a bias towards change.

It’s easier to deny the need for change than to implement change, but a community that doesn’t change stagnates.

Most often a major event – loss of a major employer – is needed to drive home the need for change.

There are individual and community wide mental biases against change and noted economist Thomas Friedman best describes five stages of the mental process leading to economic stagnation, with some editorial comments we’ve all heard, as follows:

1.  You’re wrong and I can prove it.

Everything is just fine – it’s always been this way.

2.  You’re right but it doesn’t matter.

Yes, we should make some changes but it won’t help.

3.  Ok, it’s time to change & we can.

Woops, we were wrong and we now need to make changes.

4.  Of course we need to change but it’s too late to do anything.

Ouch, we’re too late to make anything better.

5.  Yes, we must change but the disruption will do political damage.

I’m not going to take on this risky job – leave it to someone else.

In the future, many communities will march into the future with the community development goals they have…not the ones they want to have, or the ones they wish to have until they realize that a successful community is one that reinvents itself as the community and its economy changes and develops the civic leadership to guide that change.

SOME LAST THOUGHTS –

The future is bright, even though the economic development, city management and community planning profession face some big challenges.

This is not new; in my career my predecessors identified equally alarming challenges calling them opportunities, not problems.

So too, these ten thoughts and predictions pose challenges and opportunities for the future.

I believe today’s economic developers, city managers and municipal planners are ready and well prepared to accept these challenges and opportunities and serve as guides for the future.