community economic development in a time of change

C it E i D l t Community Economic Development in a Time of Change

Presentation to the Town of Amherst, NYOctober 19, 2010

David RousePrincipal Wallace Roberts & ToddPrincipal, Wallace Roberts & Todd

Agendag

• The Context

– “Big picture” (national and global) trends

– Trends in public financing and economic development

• Successful Community Economic Development Programs

– Community examples

– Components

• Implications for Amherst • Implications for Amherst

– How can Amherst and the Buffalo region generate investment through community economic development?

Big Picture TrendsBig Picture Trends

Big Picture Trends Changing DemographicsChanging Demographics

• The U.S population is increasing

– 2008 Census Bureau estimate: 301.3 million– 2050 projection: 439 million / 46% increase (Census Bureau), 402

million / 32% increase (United Nations)million / 32% increase (United Nations)

2050 100

2008

100 Million+ Increase

Amherst & Regional TrendsPopulationPopulation


• The U.S population is becoming increasingly diverse

– 2005 Census Bureau estimate: 45% of children under 5 belonged to minority groups2008 Cens s B rea projection The U S ill become a “majorit– 2008 Census Bureau projection: The U.S. will become a majority minority” country by 2042

– In U.S. cities such as Boston and New York, immigration has sustained population levels and increased economic vitality

– In Canada, the foreign-born population of Vancouver is 39% and Toronto 49%%

Amherst & Regional TrendsDiversityDiversity

Amherst & Regional TrendsImmigrationImmigration


• The Baby Boomers and the Millennials are the two largest generations in U.S. history

– Baby Boomers: 76 million born between 1946 and 1964Mill i l 78 illi b b t 1977 d 1996– Millennials: 78 million born between 1977 and 1996

Baby Boomers Millennials


• What are Baby Boomers and Millennials looking for in places to live, work, and play?– Smaller, more compact housing products

W lk bl b l i h i i d hi d id h– Walkable, urban places with amenities and things to do outside the home

One poll found that 77 percent of Americans born after 1981 want to live One poll found that 77 percent of Americans born after 1981 want to live in an urban core.

Another survey found that 71 percent of boomers placed walking distance y p p gto transit at the top of their list of housing demands.

Alan Ehrenhalt, “Putting the Urban in Suburban,” Governing, March 9-10, 2009; quoted in William Lucy Foreclosing the Dream 2010quoted in William Lucy, Foreclosing the Dream, 2010

Amherst & Regional TrendsAging PopulationAging Population

Amherst Buffalo

Big Picture TrendsChanging Metropolitan Development PatternsChanging Metropolitan Development Patterns

• Foreclosure rates during the recession ghave been higher in suburban /exurban areas than in cities

This foreclosure pattern is…yet one more layer of evidence…(of) a shift in the momentum of metropolitan development – a revival of cities and a metropolitan development a revival of cities and a drawing back from the exurban fervor that drove so much development during the closing decades of the last century. y

William Lucy, Foreclosing the Dream, 2010

Big Picture Trends Changing Metropolitan Development Patterns

• Shift in market demand from

Changing Metropolitan Development Patterns

drivable suburban to walkable urban

• Exurban (fringe) development =th t lthe next slum

• Five types of walkable urban places

T di i l d– Traditional downtowns– Downtown adjacents– Suburban town centersSuburban town centers– Strip commercial redevelopments– Greenfields (lifestyle centers)

Source: Christopher Leinberger

Big Picture Trends Walkable Urban CentersWalkable Urban Centers

T di i l D B ff l S b b D S f d CTTraditional Downtown: Buffalo Suburban Downtown: Stamford, CT

Strip Redevelopment: Belmar, CO Lifestyle Center

Amherst & Regional TrendsCommutingCommuting

Big Picture Trends Peak Oil: Declining Supply Rising DemandPeak Oil: Declining Supply, Rising Demand

Big Picture Trends The Restoration EconomyThe Restoration Economy

Restorative development is a mode of economic activity that returns property, structures, or objects to an earlier condition, transforms them into a healthier and/or more functional condition, or replaces an unsalvageable structure

i h i l dwithout consuming more land.

Storm Cunningham, The Restoration Economy

Big Picture Trends The Restoration EconomyThe Restoration Economy

• Trimodal Development Perspective (three t l lif l )natural lifecycles)

– New developmentMaintenance (built environment) / – Maintenance (built environment) / conservation (natural environment)

– Restorative development

Restorative development (restoration of the built and natural environments) is the fastest growing of those three natural environments) is the fastest growing of those three modes, and it will soon be the largest of the three realms of development.

Storm Cunningham, The Restoration Economy

Big Picture TrendsA Slow Recovery from the Great RecessionA Slow Recovery from the Great Recession

• Indicators favor a U-shaped recovery after a stimulus-fueled spike up in the last quarter of 2009

– Weak, below-trend growth for a number of yearsC ti t f 2011 th i GDP 2 4% (Th E i t– Consensus estimate for 2011 growth in GDP = 2.4% (The Economist, October 2010)

US GDP GROWTH RATEUS GDP GROWTH RATE

??


The ULI October Real Estate Barometer is “laced with fluctuations in both directions but even the most positive gains are still very weak when compared to directions, but even the most positive gains are still very weak when compared to historic trends.”

COMMERCIAL/MULTIFAMILY INVESTMENT PROPERTY


HOUSING

Source: The ULI Real Estate Barometer, October 2010

Big Picture TrendsA Slow Recovery from the Great Recession

• Employment growth will continue to lag the recovery

A Slow Recovery from the Great Recession

• Sept. 2010: +64,000 private sector jobs, -159,000 public sector jobs (includes -76,000 Census jobs)

• Local governments face an era of fiscal scarcity

– 88% of city finance officers surveyed in 2009 reported not being able to meet current year’s financial needsmeet current year s financial needs

– Depressed property values will continue to depress real estate tax revenues

– As stimulus spending winds down, federal and state deficit cutting will reduce transfers to local governments

S Sources: Nouriel Roubini and Stephen Mihm, Crisis Economics (2010) Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)

Trends in Public Sector Financing and Community Economic Development

Trends in Public Sector FinancingChanging Revenue SourcesChanging Revenue Sources

• Property taxesp y

• Intergovernmental transfers– Federal – State

• Local sales tax

• Local income / wage tax– Resident – Commuter

Source: Source: Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)

Trends in Public Sector FinancingChanging Revenue SourcesChanging Revenue Sources

• Capital financing of infrastructure• Capital financing of infrastructure– Bonds (general obligation, revenue)– Privatization

(design/build/operate/maintain)

• Sub-municipal financing techniques– Business improvement districts– Tax increment financing

Community facility districts– Community facility districts

Source: Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)

Trends in Public Sector FinancingChanging Municipal Revenue Sources

• Decreased reliance on:

Changing Municipal Revenue Sources

– Property taxes (long-term trend)– Intergovernmental transfers (reduced state aid, avoidance of /

skepticism about federal funding)skepticism about federal funding)

• Increased reliance on: Other taxes (e g sales income gasoline) depending on anti tax– Other taxes (e.g., sales, income, gasoline) depending on anti-tax sentiment

– Charges for services / fees– Public / private partnerships, privatization agreements– Other financing techniques (e.g., TIF, BIDs)

Source: Lincoln Land Use Institute, Municipal Revenues & Land Policies (2010)

Trends in Public Sector FinancingFederal Funding Programs

• American Recovery and Reinvestment Act of 2009

Federal Funding Programs

y– Included $90 billion for investments in clean energy– Transportation Investment Generating Economic Recovery

(TIGER): $2 1 billion made a ailable so far for m ltimodal(TIGER): $2.1 billion made available so far for multimodal transportation projects

HUD/DOT/EPA S t i bl C iti P t hi• HUD/DOT/EPA Sustainable Communities Partnership– June 2009 agreement to coordinate federal housing,

transportation, and environmental investments

• These two programs reflect likely future direction of federal fundingg– Surface Transportation Act Reauthorization is pending

Trends in Public Sector FinancingSustainable Communities Planning Grants

• $150 million made available in HUD FY 2010 Budget

Sustainable Communities Planning Grants

• $150 million made available in HUD FY 2010 Budget

• Two Types of GrantsSustainable Communities Regional Planning Grants: $98– Sustainable Communities Regional Planning Grants: $98 million awards to 45 regions on October 14, 2010

– Community Challenge Planning Grants: up to $75 million in grant awards to communities currently pending

• Future funding rounds anticipated

Trends in Community Economic DevelopmentEvolving Approaches

from:

Evolving Approaches

• … a wholesale approach (offsetting capital costs by providing land and infrastructure), to…p g )

• …a retail approach (reducing the cost of doing business via tax abatements), to…

• …a systems approach (addressing quality of life issues to increase appeal to business owners, workers, and entrepreneurs)

Adapted from Elaine Carmichael, Principal, Economic Stewardship, Inc.

Trends in Community Economic DevelopmentEvolving ApproachesEvolving Approaches

Innovation economics is an economic doctrine that reformulates the traditional model of economic growth so that knowledge, technology, entrepreneurship, and innovation are positioned at the center of the model…

Source: Wikipedia


• Community revitalization rules (Storm y (Cunningham)

– Rewealth: base our economy on renewing what we have (restorative development)

– Integrate restoration of natural, built, and i i tsocioeconomic assets

– Engage all stakeholders in the revitalized future of their communityof their community


• Community revitalization processes (Storm y p (Cunningham)

– Establish a shared vision of the community’s future based on renewal

– Embed renewal in the community’s cultureth h li i l ti tthrough policies, regulations, support programs, incentives, etc.

– Partner to build the critical mass of resources– Partner to build the critical mass of resources and knowledge to accomplish the vision


• Renewal engine: a nonprofit organization g p gto promote community revitalization on an ongoing basis

– Forms the renewal vision and strategy

– Fosters a renewal culture that attracts ireinvestment

– Establishes bonds of trust and shared values needed for public and private entities to workneeded for public and private entities to work together

Successful Community Economic Development Programs

Community ExampleChattanooga TNChattanooga, TN

• The legacy of an industrial city

– The nation’s dirtiest air in 1969 per the federal government

– Socioeconomic divisions / challengesSocioeconomic divisions / challenges

• Response

– Citizen task force appointed to oversee cleanup (Air Pollution Control Board)

– 1984 community visioning process (Vision 2000)

– Public/private partnership formed p p p(Chattanooga Venture)

Community ExampleChattanooga TNChattanooga, TN

Results• Dramatically improved air quality• $120 million riverfront / downtown revitalization• 3 national awards for outstanding livability in 10 years

Community ExamplesBranding StrategiesBranding Strategies

• Austin, TX: Live Music Capital of the , pWorld

• Indianapolis, IN: Amateur Sports Capital of the World

• Chautauqua County, NY: World’s Learning Center

Community ExampleCumberland MDCumberland, MD

Community ExampleCumberland MD

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

Cumberland, MD

the second largest MD city after Baltimore

• The “Queen City” developed as a manufacturing powerhouse during the 19th and 20th centuries but declined after WWII due gto industrial plant closures

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

• The City’s population has declined from 39,483 residents in 1940 t 20 495 ( ti t ) i 20081940 census to 20,495 (estimate) in 2008

Community ExampleCumberland MDCumberland, MD

Kelly Springfield Tire Plant to Riverside Industrial Park


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

Cumberland, MD

designated Maryland s first state heritage area

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


• 2005 Sustainable Economic Development Strategic Plan defines target niches related to C mberland’s assets

Cumberland, MD

defines target niches related to Cumberland’s assets

• Priority business / industry sectors– Tourism

– Restoration / rehabilitation (built, natural environments)

• Priority social / occupational groups– Technological entrepreneurs

A ti t– Artists

Community ExampleHamilton ONT

• 504,559 residents in 2006

Hamilton, ONT

– 20% foreign born; half of recent immigrants from Asia and Middle East

• Traditional economy based on heavy manufacturing (known as the Steel Capital of Canada) as the Steel Capital of Canada)

– Economy has shifted towards services, especially health sciences, over the last decade

• Rated as 6th best place to invest in Canada (2nd in Ontario) by Real Estate Investment Network (REIN Canada)


• Comprehensive development strategy builds on strengths

Hamilton, ONT

– Four-tiered transportation hub– Manufacturing excellence – Reputation for educational qualityp q y

• Four fundamental principles: innovation, diversification, entrepreneurship, and triple bottom line

• Quality of life is a key focus area to attract business as well as the “best and brightest” employees and citizens


• McMaster University

Hamilton, ONT

– Health science, automotive technology, and materials and manufacturing research and development

– McMaster Innovation Park

• City Planning and Economic Development Department

– “One-Stop Shop” for three key business services: Small Business Enterprise Centre, Business Facilitation (municipal planning process guidance), Licensing and Zoning

– Downtown and Community Renewal Division Programs

Components of Successful Economic Development ProgramsPrograms

• Vision– Define an economic position / niche based on assets

• Strategygy– Develop a game plan to realize the vision

• CapacityCapacity– Leverage resources through partnerships across sectors (public,

private, institutional / nonprofit)

• Program– Implement the vision and strategy through coordinated use of

economic development toolseconomic development tools

Examples of Economic Development Toolsp p

• Data– Inventories of available properties

• Development ordinances / codes

• Marketing– Branding and outreach to targeted groups

• Infrastructure– Investments in roads, utility, telecommunications, etc.

• Financing– TIF, BID, NYS Main Street Program, etc.

• Incentives

The Role of Incentives

• A useful tool but only part of the total package that attracts y p p gbusinesses (typically not the deciding factor)

• Be aware of downsidesf f f– Costs of subsidies provided can exceed benefits in terms of jobs, tax

revenues generated– Subsidies can put existing businesses at a competitive disadvantagep g p g– Jobs created often go to outsiders rather than current residents– Businesses can leave when subsidies expire

Implications for AmherstImplications for Amherst

Implications for Amherst: Changes Over Time

• Amherst Community Development Plan (1975)“A i b b it i i t f t lit

p g

– “A growing suburban community, recipient of metropolitan expansion…”

• Bicentennial Comprehensive Plan (2003)• Bicentennial Comprehensive Plan (2003)– “Become a model for effective reinvestment and revitalization of

older neighborhoods and commercial areas…”

Implications for Amherst: Discussion

How can Amherst and the Buffalo region generate investment through community economic development?g y p

David Rouse, Wallace Roberts & Todd

[email protected] Wallace Roberts & Todd, LLC

community economic development in a time of change

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context big picture

historic trends

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town of amherst

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