The New Green Economy ConferenceCommunity Economic Development Strategies

David Rouse, ASLA, AICP, PP, LEED AP

Principal, Wallace Roberts & Todd, LLC

1. The Traditional Approach to Economic Development

4. Case Study: Cumberland, MD

2. Alternatives / The Restoration Economy

3. Barriers to Community Revitalization

What I Will Cover

The Traditional Approach to Economic Development: Big Game Hunting

• Communities compete with each other to attract large new businesses using subsidies such as tax abatements, tax increment financing, etc.

• Success is measured by the “size of the kill” (i.e., new jobs provided by new businesses)

• A cost-benefit analysis is rarely conducted to determine if the public benefits outweigh the subsidies and external impacts

• Economic development is conducted in a “silo” separate from other activities such as planning and capital improvement programming

The Traditional Approach to Economic Development: What’s Wrong With This Picture?

• Tax abatements and other subsidies divert revenues from essential public services (schools, infrastructure, etc.)

• Large subsidies are required for each local resident employed, particularly when the jobs filled by outsiders are factored in

• Existing local businesses that do not receive subsidies are placed at a competitive disadvantage

• Businesses from outside have little attachment to the community and can reduce their workforce and even leave when the subsidies expire

• In most cases the business would have located there anyway

The Traditional Approach to Economic Development: What’s Wrong With This Picture?

• Fort Collins, CO

– In 1986 provided a subsidy package worth more than $50 million to attract an Anheuser-Busch brewery

– Only 133 of 500 (27%) employees hired by brewery were local residents– Cost to local taxpayers was $376,000 per local resident employed

Source: Eben Fodor, Better Not Bigger, 1999

• Wal-Mart: Any Town, USA

– A 2004 study documented $1.008 billion of taxpayer subsidies provided to 244 Wal-Mart stores and distribution centers in 35 states (average $4 million / facility)

– Over 90% of distribution centers received subsidies (comparable figures not available for stores)

Source: Good Jobs First, Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never-Ending Growth, May 2004

Alternatives: Workforce Development

• Invest in (re)training people for jobs in the green economy

Alternatives: Asset-Based Economic Development

• … is a strategy that builds on existing resources—natural, cultural and structural—to create valued products and services that can be sustained for local benefit.

Appalachian Region Commission (www.arc.gov)

• …is about taking what you already have and maximizing its potential.

Anne B. Pope, Federal Co-Chair, Appalachian Region Commission

Alternatives: The Restoration Economy

• “We have the capacity and ability to create a remarkably different economy, one that can restore ecosystems and protect the environment while bringing forth innovation, prosperity, meaningful work, and true security.”

Paul Hawken, The Ecology of Commerce, 1993, on the “Restorative Economy”

• Reuse existing buildings

“The greenest building is the one already built.” (wwwt.thegreenestbuilding.org).

“Could LEED for Existing Buildings Transform the Building Industry?”

Urban Land Magazine, November/December 2009

Alternatives: The Restoration Economy

• “I don’t think most people appreciate or understand how fragile and underfunded our country’s infrastructure is.  Our roads, bridges, schools, and other public works…are literally crumbling.”

Buck Denton, The Conservation Report, January 2009

Barriers to Community Revitalization

• Institutional barriers

– Traditional economic development practices

– Other practices (zoning codes, infrastructure policies, lending practices) that promote sprawl at the expense of older communities

• Lack of integrated thinking

– Economic development, planning, natural / cultural resource restoration, capital improvement programming, etc. addressed separately

• Lack of a shared community vision and direction for true revitalization

• Lack of capacity for implementation

– Public / private / nonprofit sector partnerships (government can’t do it alone)

Case Study: Cumberland, MD

Case Study: Cumberland, MD

• Key road, railroad, and canal junction during the 1800s; was the second largest MD city after Baltimore

• The “Queen City” developed as a manufacturing powerhouse during the 18th and first half of the 19th centuries

• Declined after WWII due to a string of industrial plant closures

• In 1987 the Kelly Springfield Tire Plant was the last major manufacturing plant to close (relocated to Akron, Ohio)

• Generous state subsidies enticed parent company Goodyear to retain Kelly Springfield’s corporate headquarters in Cumberland but it closed as well when the subsidies expired in 1998

• The City’s population has declined from 39,483 residents in 1940 census to 20,495 (estimate) in 2008

Cumberland: Reinventing a Manufacturing Economy

Kelly Springfield Tire Plant to Riverside Industrial Park

Cumberland: Reinventing a Manufacturing Economy

• In 1993 Cumberland’s Canal Place (the terminus of the historic C&O Canal) was designated Maryland’s first state heritage area

• In 1996 the City adopted a new Comprehensive Plan with a vision statement to guide revitalization efforts:

An excellent place to live, an enjoyable place to visit, and a supportive place to build a profitable business.

• Sustainable Economic Development Strategic Plan (2005)

• Builds on Canal Place, the Comprehensive Plan, and other initiatives to promote development of a “new economy” for the 21st century

• Objectives

– Establish principles and criteria for sustainable economic development

– Define target market niches based on Cumberland’s physical, economic, and social assets

– Define strategic actions to promote development of the target niches through partnerships

Cumberland: Reinventing a Manufacturing Economy

• Promote economic activity that imports financial capital to Cumberland from outside of the region while sustaining natural, social and human capital as measured by:

– Environmental (natural and historic) resource preservation

– Viability of social and cultural institutions

– Economic access and opportunities for city residents

Sustainable Economic Development Principles

Sustainability

EconomyEconomy

EnvironmentEnvironment SocietySociety

Target Market Niches

• Defined not as attracting specific companies, but rather as business / industry sectors and social / occupational groups related to Cumberland’s assets

• Priority business / industry sectors

– Tourism

– Restoration / rehabilitation

• Priority social / occupational groups

– Technological entrepreneurs

– Artists

Strategic Directions

1. Tourism: Continue to build Cumberland as a center for visitation through cultural / heritage tourism, outdoor recreation, and special attractions / events.

2. Artists: Establish Cumberland as a regional arts destination and residential center for artists, linking to a strategy of improving quality of life for residents and attracting visitors.

3. Technology: Establish Cumberland as a center of technology-based entrepreneurial activity by attracting “teleworkers” and “telebusinesses” to the City and by increasing the computer skills of residents

Strategic Directions

4. Restoration: Establish Cumberland and Allegany County as leaders in rehabilitation of the built and restoration of the natural environment.

5. Outreach: Initiate an outreach program to city residents and regional institutions to build support and involvement in plan implementation.

Five Years Later: How is Cumberland Doing?

• Progress has been made, e.g.:

– Canal Place development / completion of the Allegheny Highlands Trail

– Artist relocation program / Allegany Arts Council facility

– AllCoNet internet partnership: Cumberland is a “wifi” community

• Some initiatives have not progressed as rapidly

– The proposed Historic Preservation Institute lost momentum when its main “champion” passed away

– Restoration training has progressed at Allegany Community College

• Limited organizational capacity has been an issue

Current Projects

• Albany, NY Comprehensive Plan

• Austin, TX Comprehensive Plan

• Chautauqua County, NY Comprehensive Plan

• Donegal Region (Lancaster County, PA) Comprehensive Plan

The New Green Economy ConferenceCommunity Economic Development Strategies

David Rouse, Principal, Wallace Roberts & Todd

CONTACT INFO: drouse@ph.wrtdesign.com