promoting the community and economic development of plainfield[1]

8/2/2019 Promoting the Community and Economic Development of Plainfield[1]

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PROMOTING THE COMMUNITY AND ECONOMIC DEVELOPMENT OF PLAINFIELD: A

STUDIO PROJECT CONDUCTED BY THE EDWARD J. BLOUSTEIN SCHOOL OF

PLANNING AND PUBLIC POLICY

Project Instructor: Dr. Roland AnglinProject Manager: Katie Brennan

Project Associates: Tynisha Beard, Quincy Bell, Aaron Fullilove, Steven Geddes,Khalil Hamiduddin, Emily Hill, Julie Krause, Mathew Linek, Stacy

Perrine, Tiffany Sims, Shawn Tucker



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EXECUTIVE SUMMARY

The City of Plainfield, New Jersey, is an older suburb. Called the ―Queen

City‖ for its once central role in Union County, Plainfield is now a city

challenged by 40 years of demographic shifts (white-to-black now black-to-

Latino; see Table 1). The shifts have brought many middle-class residents to a

city famed for its housing stock, but over the years the shifting demography has

also brought a significant number of very low-income families (see Table 2).

The city council and mayor are actively trying to bolster the economic base of

the city and generate revenues needed to avoid future budget cuts and a

resulting diminution of the city‘s quality of life.

Table 1

Race By Percentage of Total Population

Year

1990

Year

2000

Year

2010

Total population 100% 100% 100.0%

One race 95.4 95.8

White 26.5 21.4 23.5

Black or African American 65.7 61.8 50.2

American Indian and Alaska Native 0.5 0.4 0.9

Asian 1.0 0.9 1.0

Native Hawaiian and Other Pacific Islander 0.1 0.1 0.1Some other race 6.3 10.8 20.1

Two or more races N/A 4.6 4.2

HISPANIC OR LATINO

Hispanic or Latino (of any race) 15.0 25.2 40.4

Not Hispanic or Latino 85.0 74.8 59.6

Trends in Race, From 1990-2010



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Data from the U.S. Census Bureau

Table 2: Trends in Income Distribution amongMarried Couples 2000-2009

Subject Married-couple Families 2000 Married-couple Families 2009

Total 6,004 5,459

Less than $10,000 2 2.3%

$10,000 to $14,999 1.8 2.5%

$15,000 to $24,999 6.1 5.9%

$25,000 to $34,999 7.6 7.0%

$35,000 to $49,999 13.3 8.9%

$50,000 to $74,999 25.5 20.6%

$75,000 to $99,999 18.2 17.3%$100,000 to $149,999 18 19.4%

$150,000 to $199,999 5.2 9.1%

$200,000 or more 2.3 7.1%

Median income (dollars) N/A 78,701

Mean income (dollars) N/A N/A

The citizens and elected officials of Plainfield believe that a healthy local

economy requires a solid strategy to initiate and sustain growth. Such a

strategy must include the development of a strong and diverse labor force. The

city has initiated several proactive measures to build the local economy through

growth and clustering of industries along with Transit Oriented Development.

While these plans progress, the city recognizes the need for a connected

strategy that encompasses:

The need for strategic partners to insure growth and development.

A growth policy that capitalizes on local and regional assets.



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An incremental and sustainable employment initiative to attract and

address the city‘s diverse demographic.

THE PRODUCT

The council and the mayor requested that the Edward J. Bloustein

School conduct consecutive studios detailing emerging trends and

innovations in local and community economic development. The product(s)

from this studio will be:

A Phase I report composed of case studies looking at innovative

strategies from around the United States along with a set of

recommendations for Plainfield‘s economic development.

A presentation to the mayor, council, and economic development

steering committee (composed of key stakeholders) that the Edward

J. Bloustein School will help staff and manage.

The third and last product (Phase II) will be to manage the productionof a market study that will combine surveys of Plainfield stakeholders,

business owners, and others who can provide strategic direction on

economic development. These Plainfield interviews will be

supplemented by surveys from regional and local economic

development experts. These surveys will be compiled and combined

with the case studies to produce a strategy report to the City of

Plainfield.

PHASE I METHODOLOGY:

Phase I methodology encompassed the following:



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Review of existing economic development plans for Plainfield

going back fifteen years.

Broad national scan of local and community economic

development practice.

Targeted use of economic development functional areas such as

downtown redevelopment, small business development,

workforce development, beautification, and branding to search

for and present the case studies.

Limited interviews with stakeholders to establish focus and

direction for case studies.

MAJOR FINDINGS AND RECOMMENDATIONS

While Plainfield is blessed with many financial, social, and human

assets, it has not gone through the type of detailed inventory of those

assets necessary to produce a strategic direction that is widely

accepted by stakeholders and the public. As a result, although Plainfield

has commissioned several well-meaning economic development plans,none has employed a broad-gauged assessment that produces a

realistic strategy for the municipality. Our major recommendation is that

Plainfield establish a six-month planning process that produces a

written plan to establish Plainfield 2021, a process for improving the

city‘s economy and quality of life.

Any plan for economic resurgence in Plainfield must harness the people

power and culture of the Latino community now emerging as a

demographic force.

Educated workers are central to attracting and retaining employers of

scale central to economic resurgence. Economic development and

improvement of educational outcomes are not thought of in the same



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vein in Plainfield. This presents a dichotomy that weakens any possible

economic development strategy.

Plainfield‘s social and economic networks are significant, but these

networks need to be enhanced and made more intentional and

coordinated to accomplish the complex work of economic renewal.

While large-scale economic development projects can help expand the

ratable base of Plainfield, smaller projects, such as branding, can

improve the town‘s identity and Internet presence that should

commence immediately.

Plainfield has a vibrant small business sector that has traditionally

served the needs of local residents. Not much is known about the

capacity of these businesses to increase their local and regional market

share, not to mention profitability. These businesses should be

surveyed with the formal goal of assessing strengths and challenges.

Plainfield notably lacks a nonprofit, community-based development sector. The

public sector cannot address all the challenges of economic and community

development. Plainfield must develop such a sector in the next ten to fifteen years

to see significant improvement in its economy and quality of life.

Plainfield must focus on and expand its administrative capacity to manage aneconomic development plan of scale. Economic development is a time-consuming

effort. Economic development now proceeds with a dedicated but numerically

limited staff for a town of its size. We recognize that budgets are tight, but the

strategic planning process should closely examine how to increase the capacity of

the town to implement a dedicated economic development strategic plan.

THE STATE OF LOCAL AND COMMUNITY ECONOMIC DEVELOPMENT

Part of our charge was to help Plainfield stakeholders connect with

emerging trends in the inextricably linked fields of local and community



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economic development. Local and community economic development is a

significant force for place and people revitalization in the United States.

Encompassing a range of activities, institutions, and policies, local and

community economic development seeks to improve the quality of life and

promote economic opportunity, helping residents engage in mobilizing and

building assets that will in turn help improve their individual and collective

future. Such assets include public investment, philanthropic investment,

capital, human capital, social networks, natural resources, cultural traditions,

and community leadership.

The extent to which communities can coordinate and use their assets

for economic development is a function of their ability to make collective

decisions (social capital), stock development experience, and access external

assets that can augment their own. This emerging framework for local and

economic development is extremely relevant for local governments faced with

sharp demographic changes, the force of globalizing capital and industry, and

present recessionary forces that is challenging municipal budgets.

Globalization, however defined, encourages integration of regions and

markets in the process challenging the boundaries of national states and their

economies. If the increasing inability to control local economic circumstances

is not enough, increasing metropolitan development patterns that dominated

post –World War II development are exacting great economic and

environmental costs and limiting efforts at place-based development.

Metropolitan development, where huge tracts of land are consumed for low-



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density living, has encouraged significant population shifts away from central

cities, leaving reduced tax bases in core cities to support critical public

services and amenities. For a first-ring suburb/small city such as Plainfield, the

impacts are just as great (in relative terms) as they are for larger cities.

As one seminal study noted forty years ago about Plainfield:

―Areas such as Plainfield provide a target and a prize in return for

following the conventional paths of work and saving. Increasingly,

minority group members in the North are pursuing this prize. One of

the basic questions of our time, however, is whether the goal will be

worth the effort; whether Plainfield and other similar areas…cancontinue to provide the infrastructure of schools, police and all the

other elements which the émigré anticipates at the conclusion of his

often difficult escape from the larger city‘s core (Sternlieb and Beaton,

1972. Pg. 1).‖

Plainfield has never entirely gone in a decidedly negative or decidedly

positive way direction since the Sternleib and Beaton study, but demographic

trends that now challenge Plainfield are very different from older trends. Where

previous in-migration saw individuals with some level of asset accumulation,

new residents are predominantly foreign born and have skipped over troubled

urban cores to the fiscally strapped first -ring suburbs. This trend holds for not

only Plainfield but also for the rest of the nation.

Despite the economic and demographic realities that challenge

communities like Plainfield, the future is not preordained. Many cities and

communities have found ways to improve key policies and enhance their local

economies and quality of life. Much of this improvement is due to support

and/or leadership from the public sector, working cooperatively with other



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stakeholders. As Cunningham and colleagues note in their book Tapping the

Power of City Hall to Build Equitable Communities:

A new wave of innovative leadership is emerging in cities across

America. This group is concentrating on solutions rather than problems,

building coalitions rather than winning confrontations, building coalitions

rather than winning confrontations. They are using this pragmatic

approach to tackle the persistent and difficult problems of poverty,

inequalities and racism endemic to urban America. In doing so, they are

making their cities more livable for residents and more attractive to

people who want to invest there.

Building a complex and winning strategy for economic regeneration that

incorporates many voices is clearly messier than the prevailing alternative,

business attraction. Many local governments go with the default position,

which is to respond to respond to adverse economic conditions by competing

to attract industry with financial incentives and constructing local or state

economic development bureaucracies.

In many instances, these efforts are little more than civic or state

boosterism. Economic development departments emphasize their state or

city‘s cosmopolitanism (or lack of it), inexpensive utility rates, low taxes, stable

politics, and, for those with right-to-work laws, nonunionized labor. The form

and structure of these policies have changed only slightly over the years.

Such policies constitute a negative-sum game in which the aim is to lure

industry from other cities and states. The fact that such policies are pervasive

does not make them right or appropriate in all cases. Study after study has

shown that fiscal incentives are a small part of the decision making in plant or



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office relocation. Firms are probably going to establish a branch office or plant

in a community without government incentives—if that community is the first

choice based on criteria other than incentives.

The path to economic regeneration lies elsewhere. It is a path that is

neither short nor is it smooth and paved. Our scan of what successful

jurisdictions have done is the first and most important step, as it leads us to

recognize that real changes in strategy, operating procedures, and how

stakeholders collaborate are the important variables. To be more specific, we

have distilled the key steps that cities and municipalities (big and small) can

take to initiate an economic turnaround.

STRATEGY ONE: ARTICULATE THE VISION

Local stakeholders (residents, elected officials, and the public,

nonprofit, and private sectors) must spend time outlining a vision for economic

development and prosperity for all sectors of the community. Visioning cannot

be accomplished in isolation and stakeholders may need time to settle on a

shared view of the future.

STRATEGY TWO: DEVELOP A STRATEGIC PLAN

Strategy Two can also be described as the step after visioning.

Stakeholders must spend time participating in a facilitated strategic

development process. The process can last as little at three full days and as

long as stakeholders deem necessary to produce a written document that

encompasses (1) strengths, assets, and challenges, (2) a timeline with



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delineated tasks, and (3) roles, responsibilities, and mechanisms for

accountability.

STRATEGY THREE: DEVELOP A COMMUNICATIONS PLAN IMMEDIATELY AFTER

AND IN CONCERT WITH THE BROADER STRATEGIC PLAN

Effectively communicating with stakeholders beyond those composing

the plan is key to success. Careful attention must be paid to when details of

the plan are released and how and who should ―talk the plan up.‖ The goal of

the communication strategy is not only legitimacy but also enthusiastic

acceptance by relevant stakeholders and publics.

STRATEGY FOUR: ESTABLISH EFFECTIVE PUBLIC/PRIVATE PARTNERSHIPS

Whatever strategic plan for economic development is produced, it has

to involve the collaboration of the public and private sector. Ideally, the private

sector was involved from the beginning of the process, but the plan should

really specify additional partners and the individual and organizations that will

secure relevant partnerships.

STRATEGY FIVE: ESTABLISH BUSINESS IMPROVEMENT DISTRICTS AND IF

RELEVANT, NEIGHBORHOOD IMPROVEMENT DISTRICTS

Specialized improvement districts are now standard strategies in local

economic development. The scope and timing of these types of organizations

must be dictated by the strategic plan.



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STRATEGY SIX: SUPPORT EXISTING BUSINESSES BEFORE LOOKING TO ATTRACT

NEW BUSINESSES

Strategically, it is best to assess the role of existing businesses in

realizing the aims of the strategic plan. Existing business might need

specialized help to grow more jobs, which may be more cost-effective than

attracting new businesses. The opposite may be the case, however, and the

jurisdiction may need to encourage private sector diversification. The process

of determining the case should be transparent and done with care.

STRATEGY SEVEN: CREATE A CATALYTIC DEVELOPMENT ORGANIZATION WITH

POWERS OF EMINENT DOMAIN AND BONDING

Jurisdictions of size and scale often turn to specialized development

organizations. Such a strategy is not to be taken as crucial in the early phases.

Creation of a development organization points to the larger question of power

and authority in implementing the strategic plan. A municipality may not need a

specialized development organization, but it does need an agency that has the

administrative and functional capacity to manage economic development.

STRATEGY EIGHT: ESTABLISH AN ENTERTAINMENT DISTRICT AND OR FESTIVALS

AND FARMERS MARKETS TO IMPROVE IDENTITY AND ENCOURAGE THE

MUNICIPALITY AS A DESTINATION

Entertainment districts, festivals, and farmers markets are now staples

in economic development practice. Any economic development plan must

assess their efficacy and relevance. These efforts take advantage of a

municipality‘s existing assets (sometimes, latent assets) and often bring in

(and values) sectors of the community that are often neglected by traditional

economic development strategies.



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STRATEGY NINE: ASSESS AND STRENGTHEN RENTAL AND HOMEOWNERSHIP

MARKETS

Economic development and housing are difficult to separate.

Municipalities, though, have to recognize that housing and economic

development may live in the same dwelling but have different rooms. Both

have different dynamics, but they are mutually supporting. Affordable housing

is necessary for attracting and retaining segments of the labor force, and

homeownership must be an option to balance the community so that renters

and owners are equally valued.

STRATEGY TEN: DEVELOP A LOCAL RETAIL STRATEGY

Cities and towns evolve a retail strategy based on the residents ‘ income

levels and tastes. That does not mean that a municipality cannot or should not

think through a gradual process for diversifying retail establishments

consonant with the strategic plan.

STRATEGY ELEVEN: DEVELOP A WORKFORCE DEVELOPMENT AND SCHOOL

IMPROVEMENT STRATEGY

Workforce development is an important concomitant to economic

development. Any strategic economic development plan has to centrally

incorporate a strategy for improving the skills of the existing workforce (such

as school reform efforts and stand alone training programs). Workforce

training and effective education can either promote the export of productive

labor to the surrounding region (and exported labor returns to live and pay

taxes) or the labor can productively work in existing or new businesses in the

town or municipality. Often workforce development programs are not

calibrated to address the export of labor or those make up the jurisdictions‘



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labor force. Both labor processes should be assessed and seen as important

drivers of how to improve schools and labor force preparation programs.

SUMMARY

These strategies come from our review of economic development

theory and practice. They are by no means exhaustive, nor should they be

taken as sequential. Except for the first three, which are the foundation of any

economic development strategy, the rest should be seen as contextual in how

they are used (or not used) by any municipality.The next section of this report

presents the case studies developed by project associates. The case studies

should be seen as an information base for Plainfield stakeholders to consider

using as a starting point for what is really key to Plainfield‘s future: establishing

a long-term plan and vision.

WORKS CITED

Cunningham K, P. Furdell and H.J. McKinney (2007). Tapping the Power of Cityhall to Build Equitable Communities: 10 City Profiles. Washinton D.C.. National League ofCities.

G.S. Sternlieb and W.P. Beaton (1972). The Zone of Emergence: A Caset Study of Plainfield New Jersey . Transaction Press, New Brunswick, N.J.



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SECTION ONE MAKING A PLACE OF DESTINATION



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INTRODUCTION

―Place making‖ is becoming an ever more important part of municipal decisions

regarding land use, recreation, and economic development. This section will examine

various community economic development strategies to making a place of destination.

The areas to be discussed are:

arts-based development

ethnic and cultural festivals

façade and streetscape improvements

social media and branding

The following cases offer examples of communities around the country that have

implemented programs and initiatives. We also offer recommendations of how Plainfield

City may use these examples to foster local and community economic development.

ARTS BASED COMMUNITY AND ECONOMIC DEVELOPMENT

ART DISTRICTS: A REDEVELOPMENT STRATEGY

Arts-based development can be defined as an effort that uses arts events, cultural

facilities, artists, creative businesses and the like to spur economic and social

revitalization. On a national level, the nonprofit arts industry generates $134 billion in

economic activity annually, including $24.4 billion in tax revenues and 4.85 million full-

time equivalent jobs. Arts development can include an array of elements including the

establishment of a large cultural center, art galleries, arts-based festivals and campaigns

to attract artists, to name a few. The greatest challenge is not in determining what will be

included in an arts development plan, but obtaining the financing to move forward with



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projects. However, the benefits of a successful arts-based development project can

greatly justify the costs. One of the greatest benefits of having an arts community is the

potential for attracting middle to high-income residents and businesses that positively

contribute to the local economy.

E LEMENTS OF ARTS -B ASED D EVELOPMENT

Arts-based economic development can take on various forms, but the two most

common are through a natural clustering approach or a traditional approach to

redevelopment. The clustering approach involves the formation of districts consisting of

organizations, artists and participants. It relies more on an informal art sector that hinges

on the importance of artists being involved in creating venues, performances and cultural

opportunities. Studies from across the country have demonstrated the relationship

between social diversity and the arts. Heterogeneous neighborhoods, both economically

and culturally, are more likely to be associated with cultural engagement. In addition,

those neighborhoods with higher than average rates of poverty and professional workers

and non-family households are associated with higher levels of cultural participation and

resources. Given this, Plainfield has the existing demographic profile that might lead to

arts development success.

CASE STUDY: THE ARTS IN ORANGE, NJ

The City of Orange is located in northern New Jersey and as of the 2010 Census,

the city has a population of 30,134. It is a predominantly minority area comprised of

69.9% African-American and 21.7% Hispanic residents, respectively, with White

residents making up 4.5%. Educationally, only 10.4% (2,147) of the population has a

college degree; the majority (30%) has attained, at most, a high school education. The



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median household income is $35,759 and 15.4% of families and 18.8% of individuals

below poverty level.

Housing and Neighborhood Development Services (HANDS), incorporated in

1986, is a community development corporation that targets its redevelopment efforts on

the cities of Orange and East Orange, New Jersey. In 2001, HANDS embarked upon a

revitalization plan for the Valley neighborhood, a transit-accessible mixed-use area,

utilizing focus groups, surveys and community meetings with students, faculty

researchers and volunteer planners and the resources from four universities. The result

was the formation of the Visions and Goals for the Valley plan and the Valley Arts

organization, which would act as the lead entity, to create the revitalization area known

as the Valley Arts District. The District spans a ten block radius in the Valley and

projects have included the renovation of existing factories in the area to create affordable

live/work spaces for many artists and an environment to host music and poetry festivals,

art shows, new restaurants and performance spaces.

As a result of the Valley Arts District project residents feel the Valley area has

improved and have a higher perception of safety (also attributed to the development of a

new police substation in the area), there has been an improvement in the attractiveness

of structures and increased neighborhood cohesion. The plan and its associated projects

were largely funded by a Neighborhood Revitalization Tax Credit that provided $10

million in corporate tax credit investments with additional funding from a New Markets

Tax Credit from The Reinvestment Fund and a $700,000 grant from Wachovia.



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P LAINFIELD IN F OCUS

- In the absence of an existing community development corporation (CDC) or

neighborhood services organization similar to HANDS, the city will be most

successful if it creates a task force to fulfill the facilitation and coordination role

including people experienced in community/economic development or project

management in the public sector.

- Given that financing for such projects may not be as readily available as it was

when HANDS undertook its project, an alternative option for Plainfield would be to

embark on something much smaller scale such as monthly window exhibits of

local artists and student work; sparking interest in a developing an arts

atmosphere and drawing more consumers to a certain area, if it were properly

showcased and publicized.

CASE STUDY: ARTS AND BUSINESS, PITTSFIELD, MA

Whereas the HANDS project was more concerned with enhancing an existing

community, the Pittsfield project was most concerned with revamping the town‘s image

to attract new business and residents. According to the 2010 census, the city has a

population of 43,497. Since 2002, Mayor James Ruberto and his administration have led

a resurgence of the city‘s historic downtown, partnered with a dynamic, unified program

to benefit every aspect of city life. Pittsfield used to be a bustling town, home to a

General Electric plant, but when the company relocated it left a polluted river and a town

that had lost its main economic engine and was searching for direction.



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Arts development in Pittsfield emerged in 2001 when a resident, Maggie Mailer

(daughter of the novelist Norman Mailer), started her own Storefront Artists program

turning empty storefront space into artist studio space. The idea slowly began to catch

on with other downtown landlords and caught the attention of the newly elected Mayor

Ruberto who brokered the reopening of the Colonial Theater in downtown Pittsfield. The

theater acted as the cornerstone for the rest of the city‘s development. In the four years

since the completion of the Colonial Theater, 10 art galleries have come to Pittsfield and

about 12 new businesses have opened. The city also recently finished construction on

the William Stanley Business Park where the old GE plant once stood. In conjunction

with Berkshire County, they help provide startup and support services for businesses

moving to the William Stanley Business Park. The city‘s current plan going into 2010-

2015 is to prioritize first floor space in there downtown for retail restaurant and cultural

uses. Additionally, the city seeks to educate building owners about importance of

preserving first floor spaces for retail and cultural uses not office or institutional uses.

Plainfield in Focus

- Development can‘t happen inside a box, you have to involve the people. The first

step is to recognize any growing positive trends in the community and throw the

muscle of the city behind them to cultivate them.

- If none exist, create this artistic movement. Hold contests for local area artists. A

unique way Pittsfield is doing this is by redesigning the city‘s flag and having local

artists and school children take part in the new designs and then having the city

vote on it. There‘s also a street festival held every thir d Thursday, six months out



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of the year, where on average 14,000 residents and tourist descend on the

downtown and are able to see the new developments taking place.

FAÇADE & STREETSCAPES IMPROVEMENT PROGRAMS

Façade improvement and streetscape programs focus on physical upgrades that

add aesthetic and economic value to a built environment by making repairs,

replacements and/or additions to existing buildings. Repairs and renovations of building

façades are important to neighborhood business districts, as significant enhancements to

the appearance of the neighborhood and businesses have the ability to draw consumers

and increase sales in the district. These improvements also protect the existing

investments in commercial properties and the businesses that operated within them.

The streetscape of an area can have a significant effect on how people perceive

their community. Streetscapes account of many diverse functions from accommodating

automobiles, public transportation, pedestrian traffic to providing access to buildings and

providing access for recreational activities. If the streetscape is inviting, people are

going to be more likely to walk around which can improve public health, stimulate local

economic activity and attract visitors to the community.

These programs are designed to be systematic approach to assist property

owners and businesses with upgrading building exteriors. They are typically part of a

broader commercial revitalization strategy designed to stimulate private investment and

contribute to the overall strength of that area as a possible shopping and/or dinning



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destination. Such programs are generally coordinated through a community-based

organization promoting joint public/private action and investment.

CASE STUDY: FAÇADE IMPROVEMENTS POTTSTOWN, PA.

The Borough of Pottstown is located in Montgomery County, Pennsylvania and is

an exurb of Philadelphia, which is 40 miles away. The borough has experienced a

significant decline in its manufacturing base over the past 30 years. The advent of the

mall and corporate centers in the 60‘s and 70‘s made Pottstown no longer the retail and

commercial hub of the region. Since that time, many of the middleclass families have

moved out and into the suburbs and the percentage of low-income residents has

increased. Faced with the underutilization of existing industrial space and a crime,

economic development and downtown revitalization became major challenges for the

community. Pottstown had to address its image as a declining industrial city with large

amount of rental and subsidized housing, a distressed neighborhood near downtown and

a high crime rate, as well as compete with the surrounding regions for business.

In 1987, the Pottstown Downtown Improvement District Authority (PDIDA) was

created to help stabilized the central business district. The three core areas that the

PDIDA believe will be the catalyst for making their downtown a destination place are:

1. Effectively managing the public space by providing amenities that include

lighting, parks and parking landscapes.

2. Creating an environment that is attractive to economic development by

maintaining the historical qualities of the buildings.

3. Creating new retail, office and cultural space.



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As part of the redevelopment of the central business district, the PDIDA offers two

different façade programs. The façade loan program offers a 0% no interest loan for up

to 80% of the total project costs that is to be repaid over a 5 year period. The program

also offers loan assistance on a 50/50 basis up to $500 for technical and architectural

assistance. The façade/design challenge grant offers up to $5,000 or 50% of the total

rehabilitation cost when matched by private investment dollars. This is a reimbursement

program that provides funding when the construction is complete and all the conditions

of the program are met.

F AÇADE LOAN P ROGRAM

Eligible properties – all properties that are zoned commercial with the purposes of

retail sales, service businesses including food/restaurants, clothing, financial,

night clubs and etc.

Ineligible properties – all properties that are zoned residential, industrial,

commercial and properties designated for religious use.

The minimum loan amount is $250 and the maximum is $7,500.

Fees are 1% for administrative fees to recover costs of loan discovery which ispayable at the closing.

F AÇADE /D ESIGN C HALLENGE G RANT

Structural change projects get first preference & façade change projects get

second preference.

A single property own can receive multiple grants of he/she owns more than one

property.

All the work must be completed in a manner consistent with the work described in

the grant application.

All work must be completed within a 6 month period or the grant is forfeited.

Ineligible projects – routine maintenance, interior renovations, roofing & siding

repairs, sidewalks, driveways and parking lot repairs.



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The Borough of Pottstown relies on the Pottstown Downtown Foundation (PDF) for

additional funding to assist in the central business district‘s development projects and the

special events. The PDF is a 501 (c) 3 corporation and has the ability to utilize financial

resources outside the designated boundaries of the downtown; the PDF can secure a

larger pool of operating funds that the PDIDA can draw from.

CASE STUDY: THE MORRISTOWN PARTNERSHIP, MORRISTOWN

In 1994, Morristown created a Special Improvement District (SID) non-profit

organization, the Morristown Partnership, for the purpose of revitalizing the downtown

business district. It was created to lead the downtown revitalization by developing

partnerships between business, government, civic and community. A District

Management Corporation (DMC) created by the Town Council at the time that the

special improvement district was introduced and approved governs the Partnership.

Under the Streetscape umbrella, the Morristown Partnership identified two

locations as demonstration projects that will ultimately adorn the entire town. Features of

these projects included attractive turn-of-the-century style lampposts, paved crosswalks

to better identify pedestrian rights of way to increase the safety of passersby. New

sidewalks were also built to replace old, broken and unsafe ones. The goal of the

Morristown Partnership is to continue improvement projects throughout the business

district over the next several years, not simply for aesthetics, but for practical purposes

as well. These efforts have helped to inspire individual property owners to upgrade and

improve their buildings or land. New Jersey Transit (NJT) helped jump-start the physical



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improvements on one of Morristown‘s projects with a million-dollar renovation of the train

station and surrounding area.

Funding for these projects was provided by the Morristown Partnership and was

primarily funded by a special assessment on commercial properties and businesses

within its boundaries. These dollars were then leveraged to acquire grants. In addition

to help pay for the costs of such massive projects, the Partnership applied for and

received over $1 million from the Department of Transportation.


Plainfield may not fit perfectly into the mold of the cities discussed, but there are

lessons and ideas that can be taken from their experience. Plainfield already had a

thriving downtown, so creating a plan that unifies the area with a cohesive theme would

only enhance that fact. Creating a pedestrian friendly, walkable community would mesh

well with the already established restaurants, retail stores and entertainment venues.

The Plainfield Station, and the area that surrounds it, would be a great place to

target as the initial improvement area. Its potential, and proximity to the rest of the

downtown area, would make an easy place to expand outward from, creating aesthetic

identity. Train Stations are not only places that residents and visitors use to get to a

destination; they also serve as marketing tools for their surrounding areas. As people

ride the trains, looking out of the windows, the train station area becomes a snap shot of

a town. The site of new construction and positive change to that area can create an

inviting atmosphere while promoting economic development.



26

F UNDING

New Jersey Department of Community Affairs‘ Main Street New Jersey Program

is a comprehensive revitalization program that promotes the historic and economic

redevelopment of traditional business districts in New Jersey. Every two years the DCA

accepts applications for communities to join the program. These communities receive

valuable technical support and training to assist in restoring their Main Streets as centers

of community and economic activity.

The New Jersey Department of Transportation (NJDOT) and NJ Transit

spearheaded a Smart Growth partnership known as the Transit Village Initiative. The

initiative creates incentives for municipalities to redevelop or revitalize the areas around

a transit station using design standards of transit-oriented development (TOD). TOD

helps municipalities create attractive, vibrant, pedestrian-friendly neighborhoods where

people can live, shop, work and play without relying on automobiles.

Since Plainfield already has a Special Improvement District (SID), it already has a

funding source available. With the primary purpose of increasing business, the SID is

not only an organization, but also a financing tool that can be used to provide services

that complement the municipal government services as part of a revitalization plan. The

funding can be achieved in two primary ways, property assessments and outside

funding. Funding from outside sources can be an invaluable source of additional revenue

and provide funding above and beyond assessment income for expanding SID services

and activities. The downside is that the process of matching a SID‘s needs with a

funder‘s goal can be difficult. However, the SID‘s specials assessment fees can also be

matched with UEZ funds to provide the improvements.



27

COMMUNITY-BASED EFFORTS AT IMPROVING PLACE

ETHNICALLY BASED COMMUNITY ORGANIZATIONS: AN ECONOMIC DEVELOPMENT STRATEGY

Ethnic and cultural festivals are often planned as part of place marketing, image

branding and civic boosterism to aid in the regeneration of urban areas. Some festivals

are held with within a locale but are meant to attract an outside audience. They serve as

a vehicle to inform others about the values and traditions of the hosts. Not only do

festivals offer communities the opportunity to celebrate events, they also serve as

attractions for visitors from the nearby towns and regions.

There are several reasons that these festivals are held. Aside from simply being

informative and enjoyable, they provide a number of important benefits to the

community:

Festivals encourage a sense of community pride and togetherness.

Festivals may have educational values, as different cultures are shared.

Festivals can showcase an area that has been revitalized or redeveloped. Festivals can stimulate travel to a community and the surrounding region.

Festivals can encourage a community to grow and prosper by attracting dollars in

the form of tourism.

While the traditional ethnic festival helped create group identity, created solidarity and

educated others, the contemporary festival offers an economic dimension as well. When

you attract people to stay in a location longer they are likely to spend more money on

food, beverages and souvenirs.



28

P LANNING & O RGANIZING

The key to the success of a festival is that goals and objectives must be clearly

defined. An undefined or vague purpose is a near guarantee of festival failure.

Establishing a purpose, theme, name and date are the first steps in planning a festival.

The theme should be relevant to the community‘s personality, legends and history.

Community members working together play an important role in making a cultural

tourism destination successful. Community building can emerge in several different

forms. This ranges from groups of people coming together to experience a special

event to motivating different organizations to work together to build successful events.

The festivals bring people in for fun and may expose them to new possibilities that can

bring them back for shopping, food or entertainment in the future.


Given Plainfield‘s diverse population and many restaurants, a festival (or series of

festivals) would serve to showcase various varieties of food available in the area. Some

ideas for potential ethnic and cultural festivals that would celebrate this diversity are: a

Queen City festival to celebrate the rich history of Plainfield, a Cinco De Mayo

celebration, a West Indian festival, a Peruvian festival and a African American Heritage

festival to name a few.

Placing the festivals near the train station would entice commuters and locals to

take part in the event. Due to its size and location of the street to the train station,

closing off North Avenue would be an optimal place to designate as the festival grounds.

By setting up booths and holding the festivals adjacent to the train station, this would

give commuters and foot traffic already in the downtown area the opportunity to partake



29

in the festival. Plainfield has much potential to offer its regional residents who often pass

through the city without much reason to stop and experience the city.

CASE STUDY: LATINO ECONOMIC DEVELOPMENT CORPORATION

Mount Pleasant is a neighborhood located in northern quadrant of Washington

D.C. Its current population is roughly 12,000 residents, with an evenly demographic

distribution of Hispanic, Blacks and Whites. In 1991, this historic neighborhood came

under heavy scrutiny when during a Cinco de Mayo street celebration an African-

American police officer shot an injured a Salvadoran man during in attempt to arrest the

individual because of disorderly conduct. This incident sparked a two day riot, the first of

its kind since the riots of 1968, when Dr. Martin Luther King was assassinated. The riot

unveiled a growing rift between the growing Hispanic immigrant population and the

dominant African American political leadership.

The Latino Economic Development Corporation (LEDC) is a community-based

economic development organization, established in 1991, in response to the civil

upheaval that took place in Mount Pleasant, D.C. LEDC focused its efforts on providing

opportunities for immigrants to thrive in the Washington D.C. economy, through the

notion of stable housing and successful small business. One of the pressing issues

concerning the Latino community was the lack of Spanish speaking individuals in social

service positions. LEDC quickly addressed that concern by compiling a bilingual staff

that gives the residents a sense of familiarity and trust, which, in turn, allows

relationships to be built. The LEDC provides services in three distinctive fields; small

business development, homeownership counseling and affordable housing preservation.



30

S MALL B USINESS D EVELOPMENT

Micro-Loan Program - As a certified Community Development Financial

Institution, LEDC provides micro-loans from $500 in value up to $50,000 to start-ups and

existing businesses that have difficulty obtaining credit from mainstream financial

institutions. Business Training - LEDC offers in-depth courses and workshops for

entrepreneurs who want to hone their business skills in areas such as conducting a

feasibility study, business planning, marketing strategies, website design, accounting,

recordkeeping, taxes and more. Small Business Assistance Program - LEDC works with

entrepreneurs one-on-one to refine their business plans, prepare their income taxes,

obtain business licenses, and access additional resources, such as professional links to

legal assistance, marketing consulting, accountants and real property searches.

Individual Development Accounts - LEDC helps clients save money for starting a

business by enrolling them in Individual Development Accounts, where they can receive

matching grants on money they save towards starting a business or buying their first

home. Storefront Improvement - LEDC administers a storefront improvement program

funded by the DC Government‘s Department of Housing and Community Development.

The goal of the program is to improve the physical appearance of largely Latino business

corridors, making them more attractive to shoppers and new investment, thus increasing

wealth and employment opportunities.



31

Homeownership Program

Home Purchase Assistance Program - Prospective homebuyers can access down

payment and closing cost assistance through the Home Purchase Assistance Program

(HPAP) and receive a no-interest loan of up to $40,000. Home Purchase Counseling -

Housing counselors offer no-nonsense advice tailored to individual needs on topics

ranging from personal credit to how to choose a realtor. Homebuyer Education - LEDC

offers group education on topics ranging from HPAP to credit to home purchase

throughout the city. Foreclosure Prevention - To prevent foreclosure, LEDC works with

buyers to become mortgage-ready and market-savvy before entering into a mortgage

contract with a bank. Additionally, they offer counseling and intervention for individuals

who are struggling to keep their homes. Individual Development Accounts - Matched

savings accounts help prospective home buyers accrue savings for down payment and

closing costs.

Affordable Housing Preservation

Supporting Tenant Purchase - LEDC supports tenant purchase by providing

technical assistance, education and organizing support to tenant associations throughout

the purchase process. Preserving Section 8 Housing - Through advocacy and education,

LEDC works with tenant associations to ensure the preservation of Section 8 contracts at

buildings throughout the District of Columbia. Protecting Rights - LEDC prevents

displacement of tenants by helping them to protect their right to live in decent and safe

housing. Organizing Associations - They also provide technical assistance and training

to tenant leaders with the end goal of establishing and strengthening the voice of tenant

associations.



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CASE STUDY: LONGMONT, CO

Voted by Money Magazine as one of the Top 100 small livable cities to live in

2006 and 2008, the City of Longmont, CO provides an excellent example of a city that

strives itself on creating a community centric focus. Located in central Colorado,

Longmont is home to nearly 88,000 residents, a 50% increase since 1980 when their

population was teetering around 44,000. During this 30 year span, Longmont has

invested its primary focus of economic development through the lens of the community.

In the late 80s the city of Longmont saw a demographic trend beginning to take place;

many Hispanics were flocking to the Colorado suburb. Since 1990, the Hispanic

population has tripled and according to the 2010 census, Hispanics make up roughly

25% of the current population.

M ULTICULTURAL T ASK F ORCE

From 2003 to 2007, the City of Longmont conducted a 5 year strategic plan

geared at guiding the city into becoming an effective multicultural community. The plan

was spearheaded by Latino residents in Boulder County through a community-wide

assessment conducted by The ALMAR Development Group. The Taskforce was

comprised of City Council, city staff and community members that focused their energy

to create a unified work plan. The taskforce decided to invite additional community

members to come together and create a community-wide strategic plan to establish and

sustain community connections within their Latino community. The general focus of the

plan was built around a common vision for their community, and included desired

outcomes, strategies and time lines to address their pressing issues of ―improving the



33

lives of Latino families in Boulder, quality health care, economic and social equity,

educational advancement, fairness in the criminal justice systems and community

participation and advocacy.‖ The task force later defined their five objectives to achieve

during the five years as followed.

F IVE T ASK F ORCE O BJECTIVES

1) Describe and document the overall status of Latino families in Boulder County

regarding the issues listed in the mission statement;

2) Develop specific recommendations to address the identified strengths and needs of

the Latino community;

3) Educate and collaborate with the Latino community, key policy makers and funders to

improve the overall status of Latino families in Boulder County;

4) Direct community resources and funding to implement the recommendations/ plans;

5) Enhance the capability of Latino families to participate in the political process and

advocate effectively for the issues and needs.

City Council, staff and community members coordinated four individual sessions

to guide the city in reaching their five objectives. During the first session the committee

established a three-prong approach to be their foundation. These were as follows; (1)

Strategic Approach, (2) Strategic Deployment and (3) Strategic Results.

S TRATEGIC APPROACH

1) Vision: the picture of where the City of Longmont is striving to be;

2) Analysis of the Strengths, Weaknesses, Opportunities and Threats (SWOT): the

information needed to help the city understand where it currently stands;

3) Strategic Objectives: the outcomes to be achieved in working towards the vision.



34

ANALYSIS OF S TRENGTHS

Listed as one of the top strengths by the entire group, El Comite has been an

influential force in the Longmont community for nearly thirty years. El Comite provides a

plethora of direct services which include individual case management, information and

referral, consultation, English/Spanish translation and interpretation, conflict resolution

and mediation, immigration information, or by acting as clients‘ advocate. In 2006 alone

nearly 3,500 community members were served.

LATINO P ARENT P ROGRAM

Provided during the fall and spring seasons, the Latino Parent Program is

designed to allow parents of Latinos to better understand the American school systems

as it relates to their children‘s education.

C IVIC AND C OMMUNITY E DUCATION

Several ways that El Comite works to create a civic-minded Latino community is

through their efforts of quarterly citizenship workshops and voter education programs. By

assisting legal permanent residents with the tools needed to become a U.S. citizens and

the implementation of voter registration, El Comite in partnership with the City of

Longmont have created opportunities otherwise ignored previously.

M ULTICULTURAL F ILM F ESTIVAL

Every spring El Comite de Longmont hosts the Annual Multicultural Film Festival.

The festival celebrates the cultural diversity found within the Longmont and Boulder

County Community. Individuals that come from the communities portrayed and experts

on the issues shown in the films participate on post-film discussion panels to answer

questions. All films are free and open to the public.



35

P LAINFIELD IN F OCUS :

Develop a Taskforce to engage Hispanic residents in the economic future of

Plainfield by testing the idea of ethnic festivals. The taskforce should be diverse

and time delimited with a six-month study period to present recommendations tothe Mayor of Plainfield.

Encourage the coordination of local non-profits and city government to better

assist the economic development needs of emerging groups such as business

development, personal asset building and workforce development.

Encourage the development of non-profit organizations in the Hispanic community

who will ultimately provide services and build leadership in that community. A

good example of this kind is the Puerto Rican Action Board in New Brunswick.

This organization plays a service and buffering role with city government that is

ultimately responsive to the community while effectively partners with state and

local government.



36

USING SOCIAL MEDIA IN SUPPORT OF ECONOMIC DEVELOPMENT

Several Cities, towns and Economic Development Organizations (EDOs) are

actively using Facebook, LinkedIn, Twitter, YouTube, blog software and other tools that

are designed to promote collaboration and interaction (EDA, 2009). See Table 3 for an

example on how each tool is being used by EDOs.

Table 3. Examples of How EDOs Use Social Media Outlets (EDA, 2009)

Approximately 85 percent of initial research for site selection of new businesses occurs

online (Schaefer, 2010). In order for a city to be found, it must be online. The municipal

web portal is the first step in advertising a community online, social media enhances

what is available on the website and adds a more personal perspective. Mark Shaefer, a

marketing expert, states that there are six steps any organization must follow to conduct

an effective social media campaign (See Table 4). Content development is crucial.

―Developing content that is relevant, timely and engaging to audiences is the primary

effort of social media‖ (EDA, 2009). It is important to note that most social media is free;

therefore, it is ―people-intensive not budget-intensive‖ (EDA, 2009). The best way to

SocialMediaOutlet

Economic Development Organizations Use of the Outlet

Facebook Build online communities about a region, specific industry, local or nationalevents, contests or other activities.

LinkedIn Collaboration with industry experts and others about economic developmenttopics and job creation.

Twitter Communicating with business leaders outside of community boundaries toadvertise benefits and quality of life that particular community.

Flickr andYouTube

Tours of available property for rent or sale and video/pictures of events andpress conferences.



37

post good content is to get the entire organization, or city involved with the effort. For a

city, this would mean as many departments and agencies as possible.

Table 4. Getting Started with Social Media (Shaefer, 2010)

CASE STUDY: SOCIAL MEDIA, SAN FRANCISCO

U SING S OCIAL M EDIA TO I MPROVE G OVERNMENT

San Francisco is governed by a mayor and an 11 member board of supervisors

(City of San Francisco). The board of supervisors acts as the legislative body of the city.

The former Mayor placed a huge emphasis on transparent government. After the 2009

annual Web 2.0 Summit in San Francisco, former Mayor Gavin Newsom stated,

Government, like other sectors, has been forced to do more with less because ofthe economy. Necessity has created a great opportunity for innovation. Toimprove transparency and engage our tech community, earlier this year Iannounced an Open Goverment initiative for San Francisco, which focuses onopen data, open participation and open source (Newsom, 2009).

Steps Explanation

1. Plan and align with strategy

Before you make a plan for your social mediacampaign, you must have an overall strategy foryour organization. After developing yourstrategy, align the campaign with those goals.

2. Listen before you leap

Learn the language and the culture of the outletyour organization considering. This can be doneusing free tools such as Google Alerts or Real-Time Twitter Search.

3. Focus and experiment

Choose the social network(s) your organization

wants to join, but start small and experiment withthe outlet.

4. Engage stakeholdersInvolve the community through blogs,testimonials, photos and videos.

5. LeapBuild social network connections and updatefrequently. Ensure that you have meaningfulcontent (you need quality and quantity).

6. MeasureMeasure your progress based on yourorganization‘s goal and modify your campaign if necessary.



38

Mayor Newsom requested that all city departments make all of their non-confidential

datasets available online. The mayor was the sponsor of this project; he and his staff

ensured the project was completed.

To further improve his efforts of participatory government and improving

connections between government and citizens he, and Twitter founder Biz Stone,

created a Twitter 3-1-1 service (Albanesius, 2009). Anyone who has a question or

concern about city government can ―tweet‖ the 3-1-1 call center and receive a quick

―tweet‖ back. Prior to this, the mayor and his staff were working on a text-messaging 3-

1-1 service for residents. Politically, the text messaging services did not work because it

was expensive (Knight, 2009). The Twitter approach did not receive any political

backlash because it is free.

Implementing the 3-1-1 services was people-intensive, as most social media

projects are. IT workers in the city worked on the security standards for a few months

before launching the service (Opsahl, 2010). Once the security standards were set, the

Open311 API (Application Programming Interface) which would allow the Twitter service

to relay to the current 3-1-1 system was ready for launch. The city worked the interface

and now the Open311 API is free and available for other organizations to use. As a

result, citizens can get a quick response to their problems. For example, a citizen

―tweeted‖ that there was a major water leak at a park in the ci ty; 15 minutes later an

official from the utility inspected the incident and it was fixed in less than four hours

(Curiel, 2009).

In addition to this service, nearly every city department has a social networking

account. The city web portal has a ―Social Media Center‖ in which the departments and



39

social media accounts are listed. The most popular outlets the city uses are Facebook,

Twitter and YouTube. Each account has useful information including photos and videos

of upcoming development projects and capital improvements. Furthermore, citizens and

potential business owners can communicate directly with specific departments.

The overall feedback of the Twitter 3-1-1 service and other social media accounts

with the city is positive (Shih, 2010). The Public Technology Institute has designated

San Francisco a ―Citizen Engaged Community‖ in 2010 (Cable and Bowen). The

example of the water leak mentioned above illustrates how effective the service has

been. However, there are a few unintended consequences. One major unintended

consequence is as the service and the other accounts have become more popular, it is

getting more difficult for city employees to respond to inquiries (Shih, 2010). With the

slower response time, some of the accounts have lost some citizen subscribers. With

exception to the 3-1-1 service, the staff who posts to the social media websites have

other duties. Their entire workday does not focus on answering questions via phone or

Twitter. Furthermore, they have to find time to produce and post meaningful content.

This is not always as easy as it sounds. However, this should not deter any city or

organization from embarking on a social media campaign.


Plainfield can adopt a social media campaign to help with branding and economic

development. However, the city could use a slightly different approach. The city can

begin before or after it has developed a strategic economic development plan.

Marketing—Communicate the benefits, assets, and quality of life to potential new

residents and business owners. Market to specific industries that would benefit

from what Plainfield has to offer. Advertise community events.



40

Crowdsourcing—Communicate with experts in the economic development field to

get an idea of what economic development activities are working for other cities.

Citizen involvement—Solicit feedback from residents on current and future

economic development activities. Conduct a contest for a city slogan campaign to

contribute to recommended branding efforts.

Shop local campaign—Encourage residents to shop in Plainfield. This can be

done in conjunction with a branding campaign.

Train business owners—Conduct training to teach social media marketing to local

businesses and help to help them market their business.

MARKETING CITIES ONLINE

In today‘s economy, cities and rural areas alike are struggling to attract new

businesses and visitors. Don Allen Hollbrook suggests that rural environments should

have an ―aggressive and proactive marketing campaign that promotes their communities

and areas to business decision makers and the site location industry experts‖ (2007,

p.168). Cities can also benefit from this. Several cities across the United States are

improving their marketing strategies through the use of technology. While many cities

are using technology to market their city, several of them are not using it to its fullest

potential. The internet has leveled the playing field for economic development. Now,

cities must focus on ―building a robust, user friendly and mean ingful website that

provides the information users will desire and expect‖ (Hollbrook, 2007 p. 168).

M ARKETING T HROUGH T ECHNOLOGY

Cities market themselves through websites or social media because the internet is

the first place that people generally look for information. First, the city needs to decide

on a goal for the website (Pendergraft, 2011). For example, to improve city services,



41

increase city participation in government and market to potential new businesses.

Secondly, the city should decide who its target markets are. Using the previous example,

target markets would be citizens, potential new businesses, and visitors. The city must

also review its current website and note its strengths and weaknesses. Once all this

previous information is gathered, the city can begin to redevelop their website.

C ASTLE R OCK , C OLORADO

Castle Rock is almost equidistant from Denver and Colorado Springs (Town of

Castle Rock). It is the county seat of Douglas County, one of the fastest growing

counties in the nation (Castle Rock Economic Development Council, 2009). The current

population is just over 48,000 (U.S. Census Bureau, 2010). The population is wealthy,

well educated and homogeneous with 90% of the population being white, 10% Hispanic,

two percent Asian and one percent African American (U.S. Census Bureau 2010). The

most recent estimate of median household income in Castle Rock is $72,534. In terms

of educational attainment, 98% of the population has achieved a high school diploma,

81% have some college or technical school training, 54% have a college degree, and

18% have a post graduate degree.

E CONOMY

Small businesses make up a significant portion of the local economy. The Castle

Rock Economic Development Council (CREDC) asserts that 89% of local businesses

have five or fewer employees partly due to the large number of home based businesses,

which is 56% (2009). Government is the largest employer in the town; this includes

state, school, county and town employees (CREDC 2009). Other major industries in the

town include manufacturing, recreation and retail. The town‘s currently marketing to



42

professional and service firms, engineers and architects, geophysics and aerospace

companies, high technology firms, light manufacturing, and retail services (CREDC

2009).

OLITICAL C ONTEXT

Castle Rock has been operating under the council/manager form of government

since 1987. The town is homogeneous; therefore it does not appear to have competing

goals or outrageous political discourse. Furthermore, Castle Rock appears to have a

transparent government, with many government documents accessible by web. The

town also streams council meetings live on the internet and through a local television

station (Town of Castle Rock). The town has not suffered through any recent

controversies in government.

CASE STUDY: REVAMPING THE CASTLE ROCK MUNICPAL WEBSITE

The town re-launched their website twice within the last ten years. During this

time, the town had recently hired a new Chief Technology Officer (CTO). He proposed

the idea of redesigning and updating the website. Proponents of the new website

included the town Community Relations Department, and members of other departments

and the CTO (Capp 2011). There were no opponents per se; however, the idea had to

be justified to the town manager. The town manager was eventually won over with the

argument that a more effective municipal website could save staff time and allow them to

concentrate on other duties. People would be able to make complaints, pay tickets, and

check the status of various applications online. The deputy town manager sponsored

the project overseeing it from start to finish.



43

One of the big decisions the town faced was website design and content. First,

the town had to decide on a website content management system. ―A content

management system (CMS) is a document centric system used to control or manage the

content of a website‖ (Brick Marketing, 2011). The costs of CMS software generally

ranges from $18,000 to $25,000. For both launches of the website, the town conducted

an extensive RFP. Their priority was choosing a vendor that was current and easy to

update. Once a vendor was chosen, a decision had to be made on whether there would

be one person in charge of content, or if departments would be in charge of their own

sections of the website. Castle Rock opted for a hybrid model; each department

selected a communications ―point person‖ to be in charge of web content for their section

(Capp, 2011).

C HALLENGES

There were some challenges throughout this process. One challenge was that

each department had different ideas on content and web design. As a result, the deputy

town manager took control of the project. He created and empowered a committee to

make design and content decisions. The committee also holds quarterly meetings to

update the website and train staff on the CMS (Capp 2011). Another challenge was

keeping updated useful information on the website. Town employees have other duties

and sometimes keeping the website updated becomes less important. Castle Rock

continues to struggle with enforcing deadlines to keep the website current.

P ROMOTING THE W EBSITE

Although the town initially received little press on its newly designed website, the

town put forth an excellent effort to advertise the website. The town put the website URL



44

on city buses, fire trucks, and other city vehicles. CTO Kevin Capp recommends that the

launching of a redesigned website be coupled with a branding or marketing campaign.

People cannot take advantage of the new services if they do not know about them. The

Center for Digital Government (CDG) surveys and awards governments on their

technological innovations; specifically the Best of the Web Awards (BOW) contest

recognizes the excellence of official web portals of United States cities, counties and

states (CDG, 2011). In 2010, the town of Castle Rock came in fourth place in the BOW

Awards, shortly afterward, the town received more press, aiding in its effort to advertise

the new website.

R ESULTS OF THE N EW W EBSITE

While redesigning a municipal website is not an economic development strategy

on its own; it is a great addition that works in concert with branding. Castle Rock town

employees believe that their website has helped with economic development. The CTO

stated that the website has helped a few new businesses in their decision to move to

Castle Rock. Centura, a company building a new hospital in the town, felt that the

website helped them in locating sites, researching existing businesses and with the

development review process (Capp 2011). Although this was not the determining factor

in their decision to locate in Castle Rock, it made the process a little easier.


Although the town of Castle Rock bears little resemblance to Plainfield, the city

can take several lessons from the town‘s experience. We recommend that the city follow

the steps below to revamp the city website:

Decide on a goal for the new website and identify target markets.

Review the city‘s current website and note its strengths and weaknesses.



45

Review websites of similar cities for ideas.

Select a sponsor to oversee the project.

Assemble a committee to be responsible for content and design. Meet with the

committee to determine what the city wants on the new website.

Designate one person per department to be responsible for departmental content.

Go through the RFP process to select a CMS vendor.

Once the vendor is selected, train the staff who will be updating the website.

Redesign and update the website.

Launch the new website.

Start a marketing/branding campaign to advertise the new website.

Review website content and update quarterly.


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designated as citizen-engaged communities. Public Technology Institute: The

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from http://www.pti.org/index.php/ptiee1/more/635/

Curiel, J. (2009, July 27). 'Tweet' gets leak plugged fast in Fillmore. San Francisco

Chronicle , pp. C-2.

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EDA. (n.d.). EDA Update: They're doing what? Social Media and Economic

Development. American Planning Association . Retrieved April 11, 2011, from

http://www.planning.org/eda/newsletter/2009/oct.htm

Knight, H. (n.d.). Mayor finds yet another use for Twitter: City Insider. San Francisco Bay

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bin/blogs/cityinsider/detail?entry_id=41015

Maeder, K. (n.d.). Crowdsourcing San Francisco City Hall: Open government may

benefit quality of life | www.ResetSanFrancisco.org Blog.

www.ResetSanFrancisco.org . Retrieved April 11, 2011, from

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55

SECTION TWO

DEVELOPING PEOPLE, DEVELOPING PLACE



56

INTRODUCTION

This section of the report represents the heart of community economic

development: strengthening people and places. Workforce and educational development

help create strong individuals, and, in turn, robust communities. Indeed, in order for a city

to achieve long-term economic stability it must first develop a strong foundation through

the people who live there. The following section blends economic principles with that of

social action and empowerment. As global and local economies evolve, so too must our

approaches to education and workforce development. The case studies in this section

are focused on the education and empowerment of youth along with innovative

approaches to workforce development. In particular, the studies are highly relevant to

groups in Plainfield in need of new avenues to explore opportunities for employment and

personal development: youth, day laborers and ex-offenders. The following studies and

recommendations (provided at the end of this section) will assist the City of Plainfield in

visioning a process to engage its community members in the realization of their full worth

and potential.

WORKFORCE DEVELOPMENT AND COMMUNITY ENHANCEMENT

DAY LABORER CENTERS: A WORKFORCE DEVELOPMENT STRATEGY

W HO ARE D AY LABORERS ?

Day laborers are low-wage workers who are hired on a day-by-day basis. These

workers usually perform short-term, difficult manual labor such as hauling debris,

painting homes, or doing construction and landscaping. Day laborers will often gather at

informal sites on busy thoroughfares or near home improvement stores to solicit a job.



57

Employers pick up workers at these sites, pay them in cash, and leave no record or link

between themselves and the workers.

In Plainfield, day laborers who gather at informal outdoor sites face numerous

challenges. Lacking a formal environment in which to negotiate safe, decent-paying

temporary jobs, day laborers are usually stuck in highly economically vulnerable

positions in which they are exposed to unsafe working conditions and are victims of

wage theft. In addition, the presence of day laborers can create conflicts with local

businesses and area residents including complaints about loitering or outward displays

of anti-immigrant sentiment. This report seeks to outline strategies communities have

employed in order to assuage community controversy over day laborers and help

workers achieve fair treatment in local labor systems.

D AY LABORERS IN N EW J ERSEY

In a recent Seton Hall University report (January 2011) about day laborers and

workplace justice in New Jersey, the authors identified 23 municipalities with strong day

laborer populations. Plainfield and nearby Scotch Plains and Summit were among the

towns listed. The study found high levels of abuse and worker exploitation with regard to

wage theft, unsafe working conditions, and violence from employers toward day laborers

in New Jersey. Many day laborers do not report abuse because of their status as

undocumented immigrants, and so exploitation by employers continues. However, the

study found that, in general, abuses such as wage theft occurred less often in

communities where workers had access to community organizations that provided

support and resources to address wage disputes. Communities that respond to



58

neighborhood tension and day laborers‘ workplace justice issues create better conditions

for both workers and community relations.

D AY LABORER ADVOCACY AND O RGANIZING

Cities and towns generally respond to community controversy regarding day

laborers with a few different strategies including 1) setting up formal hiring centers with

paid staff 2) creating designated hiring sites with no staff, or 3) organizing day laborers at

their original site. Day laborer centers are the focus of this study and are places where

employers and day laborers can formally arrange for employment at fair wages. The

scope of services of a typical day laborer center varies widely and could include anything

from English classes, advocacy and organizing activities, or community building events

such as sports teams and theater groups (Toma & Ebenshade, 2001).

EMPLOYMENT & TRAINING CENTERS: A WORKFORCE AND ECONOMIC DEVELOPMENT

STRATEGY

CASE STUDY: CASA DE MARYLAND

CASA (Central American Solidarity and Assistance) de Maryland operates five

welcome centers in the Baltimore-area where employers and workers can engage in a

formal and fair hiring process. The focus of this case study is the first of the five

welcome centers to open, the Silver Spring Center for Employment and Training.

B ACKGROUND : D AY LABORERS IN S ILVER S PRING , MD

The total population of Silver Spring, MD is 76,335. The population is 46.6%

White, 24.8% Black, and 26.6% Hispanic or Latino (of any race). The median family

income is $80,519 and 9.9% of families live below poverty level.



59

D AY LABORERS AND C OMMUNITY T ENSION

The obstacles that day laborers in the Baltimore-area face in achieving fair

treatment and appropriate wages are familiar to those of day laborers all over the United

States. In Baltimore‘s Day Laborer Report (2004), day laborers cited unfair or unpaid

wages, workplace dangers, and poor treatment in the workplace as their main

challenges. For almost a decade before the creation of the CASA de Maryland Silver

Spring Welcome Center, day laborers seeking temporary employment gathered in a 7-

Eleven convenience store parking lot to wait for potential employers. Like many

communities with strong day laborer populations, conflicts over the informal hiring site

arose. For instance, nearby businesses complained about loitering and suggested that

the men intimidated customers. Continued conflict and prejudice from community

members led CASA de Maryland to step in and guide community meetings to address

community conflicts over the day laborer population (Toma & Ebenshade, 2001).

Already a well-established non-profit since 1985, CASA used their existing

resources to start the Day Laborer Assistance Project. In early 1991, CASA first

arranged for an employment coordinator to provide monthly visits to the informal 7-

Eleven hiring site. CASA then received a donated trailer from a local college which they

set up on site; however, nearby businesses only agreed to a six month trial period and

thus CASA sought a more permanent mechanism for assisting day laborers.

C REATING THE S ILVER S PRING C ENTER FOR E MPLOYMENT AND T RAINING

Throughout 1991 and 1992, CASA continued to organize workers into various

street activities such as marches, sit-ins, vigils, and community meetings to bring

attention to day laborer issues in Silver Spring. Within a few months the workers



60

themselves created a strong group of activists. Politicians, police, and Montgomery

county officials began to recognize the importance of establishing a permanent day labor

center. In 1992, organizers won the support of the county officials who set up an

advisory committee consisting of representatives from local businesses, churches,

government, day laborers, and homeowners‘ associations. The committee met monthly

for two years, and, over the course of their negotiations, purchased a house located half

a block from the original informal parking lot hiring site. Day laborers were recruited to

the new hiring center which officially opened its doors in 1994 (Walters 2003).

C ENTER ACTIVITIES

The Silver Spring center resembles a social service agency, where day laborers

may go to access a multitude of services in addition to day-to-day job placement. The

center began with an employment placement program, where employers register and

center staff assists workers in negotiating fair wages and jobs for the day. The diversity

and breadth of services has grown to include a health education and outreach program,

ESL classes, citizenship prep courses, Spanish literacy courses, a vocational training

program, and financial literacy courses. A critical component of all of CASA‘s welcome

centers is the worker‘s associations, which allow the day laborers to develop leadership

skills and take an active role in the Center‘s operations, policies, and priorities. Finally, all

of CASA‘s welcome centers provide workers with a foundation to become involved in

coalition efforts at the state and federal level to push for a living wage law in Montgomery

County, and broader immigrant concerns with regard to health, housing, education, and

employment (CASA de Maryland).



61

S TAFF AND B UDGET

The center staff consists of 3.5 full time staff members and anywhere from 10 to

20 community volunteers. The basic operating budget of the Silver Spring Center for

Employment and Training was $158,000 in 1999. Forty percent of this funding comes

from Montgomery and Prince George county governments and 60% comes from private

foundations. The total budget (1999 figures) for all of the Center‘s programs, job training,

and legal services is $385,000. CASA also generates revenue for their programs by

issuing fifteen-dollar ID cards that are accepted as a form of identification in local banks,

schools, and by the local police.


The establishment of a day laborer center in Plainfield is a critical first step in

addressing the immediate challenges that day laborers face. It is imperative that day

laborers achieve fair wages and fair treatment in local labor systems. Day laborer

centers and other one-stop employment programs are not the end-all solution to

individuals‘ unstable employment prospects. However, given the current plight of day

laborers in New Jersey (see above) a day laborer center in Plainfield could greatly

reduce the labor and human rights violations taking place every day. An initial focus on

helping the day laborer demographic connect to local employers is a necessary step in

future efforts to address unemployment in Plainfield. A great number of day laborer

centers around the United States have grown and flourished into excellent community

resource centers and vehicles for immigrant worker advocacy at a regional level.



64

consortium with local non-profits and trade unions to help community members develop

skills in the construction trade. The third strategy involves a joint venture between private

and public interests including developers, construction contractors, localities and non-

profits. Contractors train and hire local residents and salvaged materials are donated to

local nonprofits for future development (HUD, 2000).

D ECONSTRUCTION AS AN E CONOMIC DEVELOPMENT TOOL

Various communities are looking to deconstruction as local economic

development tool. From Cleveland, Ohio to Atherton, California, deconstruction has

become an emerging growth sector for local economies as both private enterprises and

public interests are involved. As a part of the new green economy, deconstruction

provides a unique opportunity to create local jobs in the vital construction/manufacturing

sector.

Deconstruction is a labor-intensive operation which requires additional staffing

and work hours for construction firms. Recyclable material can be resold for near market

value or donated to local agencies such as area housing authorities. Deconstruction

directly increases the local tax base by providing employment opportunities to local

residents. Additionally, it provides savings to local governments via lowered demolition

costs and an economic incentive in the form of tax deductions for businesses to engage

in sustainable and eco-friendly initiatives. The environmental benefits of deconstruction

include reducing the amount of waste in area landfills, reducing pollution and conserving

energy resources as the need for the production of new construction material is reduced.

While the practice of deconstruction may increase the cost of redevelopment

projects because of the additional labor and time needed for such projects, its potential



65

yield is why it has become recognized as an economic development tool. The revenue

gained from recycled materials and the positive impact on local economies via increased

job opportunities considerably outweighs the costs over choosing demolition as standard

practice. As a part of local revitalization strategies, the effect of such projects multiplied

can provide an enormous benefit to communities. Of the three common deconstruction

strategies used by localities, job-training programs are the most popular because of their

lower costs and direct impact on local economy (Segall, 2009).

CASE STUDY: BALTIMORE - SECOND CHANCE PROGRAM

The Second Chance is a nonprofit organization operating in Baltimore, Maryland

which deconstructs buildings and homes and makes salvaged materials available to the

public. The agency focuses on creating environmentally sound, socially responsible and

financially viable industries. In 2003, they created a training and employment program to

address the needs of residents within Baltimore‘s depressed communities. The agency

hires unemployed individuals to support its deconstruction, salvage and warehouse

endeavors. Some of the Second Chance‘s staff is formerly incarnated individuals who

otherwise may not have been hired for work.

Second Chance‘s dual purpose addresses two crucial issues facing the city of

Baltimore: a significantly high incarceration and unemployment rate and a proliferation of

abandoned and distressed properties as a result of the national economic crisis

(Robbins, 2010).

Initiated by a grant from the Annie E. Casey Foundation, the agency currently

relies on a host of partnerships which include foundations, local government and private



66

organizations. The city of Baltimore has linked with Second Chance to provide the

agency with exclusive rights to all city deconstruction projects.

The city believes in the programs ability to enhance local infrastructure while

providing much needed jobs to area residents and reducing rates of recidivism. The skills

and training which participants receive through Second Chance‘s intense 16-week

program can contribute greatly to community economic development these individuals

contribute to their communities as a result (Second Chance, 2011).


As a part of the 2004 city Redevelopment Plan, Plainfield has pinpointed nearly

200 abandoned sites for demolition, revitalization or rehab. As is the case in Baltimore,

these foreclosed and bankrupt properties are a result of the current financial crisis

coupled with decades of neglect leading to urban decay. There are also several

abandoned industrial sites throughout Plainfield which have been addressed in previous

redevelopment plans. Demolition of these properties could result in the revitalization that

is needed to meet existing and future community needs. The Second Chance

Corporation provides an ideal model for how Plainfield could address its dual goals of

community redevelopment and employment development. A non-profit organization

patterned from Second Chance would necessitate a consortium consisting of the public

sector, local non-profits, and foundational support and special interest groups. In the

meantime, the City of Plainfield can employ the following strategies to embrace

deconstruction:

Undergo an RFP process to developers to rehab and redevelop properties

mentioned in 2004 Redevelopment Plan, imploring the use of deconstruction

techniques.



67

Gain support from local housing non-profits by guaranteeing that salvaged

materials could be sold or donated to them, for the purpose of providing

attractive affordable housing units for area residents.

Adopt policy to make deconstruction standard practice on city redevelopment

projects including demolition of structures(for both city-owned and private

properties).

Encourage and support reuse of building materials.

URBAN AGRICULTURE AND FARMERS MARKETS: A TOOL FOR LOCAL ECONOMIC

DEVELOPMENT

D EFINITION AND C ONTEXT IN C OMMUNITY E CONOMIC D EVELOPMENT

Urban agriculture is defined as farming within and around cities, allowing it to

become an integrated part of an area‘s economic system. The system typically involves

the farming of plots of land to promote economic and health benefits for the immediate

community. The goods produced through urban agriculture can be used for personal

consumption or for mass production and sale.

Urban agriculture is also a method for remedying the food insecurity issues that

plague many impoverished areas through the supply of nutritious food which may not be

affordable for lower-income populations. The economic benefits of urban farming

ventures can be realized through the engagement of residents in the production and

marketing of their own food. For instance, local farmer‘s markets can provide

opportunities for entrepreneurial urban agriculture by offering a venue for local food

produces and farmers to sell their goods.



68

APPROACHES TO U RBAN AGRICULTURE P ROJECTS

The specific form that an urban agriculture project takes on is up to the decision

makers. There are three general categories that urban farms tend to fall under:

commercial farms, community gardens and backyard gardeners. Commercial farms

generally sell directly to farmers markets and farm stands. Under the realm of

commercial farming are community-supported agriculture programs (CSA), which are

gaining popularity in many urban areas as there are at least 1,000 in the U.S. CSAs

consist of individuals who act as shareholders or subscribers to the designated farm who

pay an agreed upon price for the season for a specified amount of produce. In response

to the food security issues facing many inner-city areas, some CSAs have begun offering

shares to low-income households through grants, adopt-a-share program and other

subsidies. Community gardens are typically larger lots divided into smaller plots for each

household or individual. The food grown is usually kept for personal consumption and in

some cases it is raised with the intention of giving it away. Finally, backyard gardens,

possibly the most traditional approach, are gardens found in people‘s homes on their

balconies, decks, rooftops or backyards.

To gain a fuller appreciation for the role of agriculture in urban settings, it is

important to take a deeper look at food insecurity. Food security is the ability of people

in a community to access culturally acceptable, nutritional food through local non-

emergency sources at all times. In the face of nonexistent or a diminishing supply of

grocery stores in lower-income neighborhoods and lacking the means to purchase a

vehicle to drive to suburban area, the trip to better food sources can become costly

through the use of buses and taxi fare. In addition, those food stores that are in the



69

inner-city often lack an adequate supply of healthy foods or leave perishable foods on

the shelves too long causing quality and safety issues. The consequences of these food

insecurity issues results in less healthy communities at greater risk of infectious

diseases.

C HALLENGES AND O PPORTUNITIES FOR U RBAN AGRICULTURE P ROJECTS

Urban farming can have an extremely positive impact on a community, depending

on the environment and amount of support behind the activity. Some of these activities

include making viable use of and reducing the amount of vacant, unproductive land;

improving the public image of a neighborhood; providing healthier food options for low-

income residents; supporting local and regional food systems; and developing pride and

self-sufficiency among residents who grow food for themselves and others. Urban

agriculture can also serve as a mechanism to create economic enterprises and jobs.

The means of creating an urban agriculture program can take many forms from being

initiated by a community development corporation, special interest organization, or by

school or university groups.

Additionally, there are opportunities to incorporate elements of workforce

development into an agricultural plan. One such example is the Los Angeles-based

Food from the ‗Hood (FFTH). FFTH is a non-profit started by a group of Crenshaw High

School students in 1992. They transformed an empty two-acre lot behind their school‘s

football stadium into a fruit and vegetable garden where they give away a quarter of their

produce to the needy and sell the other half for profit. The program also includes

opportunities for entrepreneurial training, work-based skills training, academic tutoring,

life skills components, and practical business experience.



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Obstacle Description Solution

Tenure

If an urban farmer does not own the land

they use, they can be at risk of losing

their investment if land is taken

- Usufruct agreements that

gives farmers legal right to use

land as long as they maintain

it

- Land trusts used to secure

land for agricultural purposes

Access to

markets

Growers can find it difficult to market

produce to groceries and restaurants if

wholesale distributor monopolies exist

- "Buy-local" campaigns

promoting locally grown food

Start-up

costs

Costs such as tools and site

management can be expensive,

particularly for low-income growers

- Tool banks giving gardeners

the option of borrowing tools

or renting them for a low fee

- "Seed" grants from

governments and foundations

- CSAs provide upfront money

Knowledge

and skills

Some urban growers may lack the

knowledge and skills in production,

processing and marketing that would

enable them to be the most successful

- Some non-profits agricultural

projects offer public education

and demonstrations

- Some school gardening

programs also offer training

opportunities

Source: Community Food Security Coalition, 2003



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The obstacles facing an urban agricultural project will vary by place. The chart

above outlines some of the more general obstacles that many projects may face along

with possible solutions. When considering undertaking a farming project, these elements

should be properly planned for to minimize the setbacks to project success.

Financing for such projects may also be a challenge. Many urban agricultural

projects carried out are not economically self-sufficient; many obtain financing from

outside sources such as grants and government funding. One long-standing source of

funding is the USDA‘s Community Food Projects grant. It began to be offered in 1996 as

a way to fight food insecurity by promoting self-sufficiency through community garden

projects in low-income neighborhoods. Some city governments have channeled funding

for urban farming through their Community Development Block Grant funds and

additional funding is often obtained from foundations and fundraising efforts of the lead

agency.

CASE STUDY: ISLES COMMUNITY FARM (TRENTON, NJ)

Founded in 1981, Isles is a community development corporation that is based in

Trenton, New Jersey. The City of Trenton has a population of 84, 913 that is 49.8%

African-American, 33.7% Latino or Hispanic and 13.5% White. It had an estimated

median household income of $35,372 with 17.6% of residents living below poverty level.

Isles‘ urban farming efforts fall into the realm of its environment and healthy

communities services. The organization has 65 gardening sites throughout Trenton that

produce 120,000 pounds of food annually. Isles‘ strategy for urban farming consists of

using underutilized greenhouses and five acres of farmland on the West Windsor



72

campus of Mercer County Community College that employ Trenton residents and supply

the city with organically-grown produce. In terms of financing, the project received seed

money from a 1997 USDA Community Food Projects grant for $114,000 over three

years and funding from the New Jersey Department of Labor to support the job training

component.

Since its inception the project has been able to maintain a steady flow of produce.

In the first year of production it provided 7,500 pounds of vegetables to the local food

bank and sold 2,500 pounds through youth farmers markets. Isles has also begun a

CSA program to offset the costs of production that, along with sales of cut flowers and

outside donations, garnered the organization $6,000 in revenues during the first year.

To increase the revenue of the gardening project, the CSA shares are sold at $300 to

$400 per share depending on family size. The organization has noted, however, how the

lack of skilled laborers in the inner-city has added complications to meeting profitability

expectations and it is looking into other partnering strategies to meet the optimistic

expectations set for this project.


Below are a few ways in which urban agriculture projects may be implemented in

Plainfield.

Given Plainfield‘s demographics, the environment is ripe for an urban farming

pilot. The unutilized industrial buildings and surrounding land are perfect for an

urban farm (if there are no contamination issues) and farmer‘s market location.



73

Plainfield‘s large population of unemployed or underemployed individuals can

serve as a great labor resource if a large-scale farming project were to be

implemented.

The addition of a farmers market that pulls from local and regional farmers that

incorporates EBT-payment capabilities could also bring increased patronage to

the city and expand the accessibility to the lower-income population (for examples

visit www.crescentcityfarmersmarket.org and

http://www.cachampionsforchange.net/en/OurCommunity.php - Food Stamps at

the Farmers Market).

Partnerships are key. To have the most success, Plainfield would need to identify

the most relevant local and external partners but would likely need to designate a

city department to oversee the project.

An urban farming project can serve as a great place-based asset and provide

residents with easily accessible fresh foods and may also help to improve the

image of Plainfield. Sustainability practices speak to the locality‘s ability to look to

the long-term effects of the decisions it makes, which can translate into a

perception of a forward-looking local government that knows how to respond to

the needs affecting its citizens.

http://www.crescentcityfarmersmarket.org/



http://www.cachampionsforchange.net/en/OurCommunity.php






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RESHAPING THE FUTURE: EDUCATION AND YOUTH DEVELOPMENT STRATEGIES

RE-ENGAGEMENT CENTER INITIATIVES

I NTRODUCTION

Engaging youth is a key part of community economic development. Developing

an educated workforce begins with empowering and educating youth. Ideally, young

people go to school, graduate and then participate in the workforce. However, for many

youth in urban areas, this is not the norm. An increasing number of youth are

disconnected from the education system either by dropping or failing out of school. A

Johns Hopkins study stated that 45% of Philadelphia‘s youth drop out of high school

(School District of Philadelphia (SDP), 2009). As a result, the city has placed youth

engagement high on the agenda. The school district has created ―Re -engagement

Centers‖ to help youth get back into school. A re-engagement center ―provides youth and

their families with ‗one-stop‘ access to information and placement services leading to re-

enrollment in a high school diploma or GED program‖ (SDP). The purpose of this case

study is to examine the development of youth re-engagement centers in Philadelphia,

Pennsylvania and how the process can be utilized by Plainfield, New Jersey in an effort

to improve youth workforce development.

O PPORTUNITIES AND C HALLENGES IN THE C REATION OF R E - ENGAGEMENT C ENTERS

There are several benefits that arise from developing re-engagement centers.

One benefit is that the city would be creating a better-educated workforce by increasing

the number of youth with high school diplomas or GEDs. Additionally, including

supportive services to re-engage youth increases the likelihood that they will complete

their diploma. If the resources that youth need to enroll in school are held in central



75

place, it decreases the bureaucracy they usually encounter. This will also contribute to

their likelihood of completion. Re-engagement centers can also be combined with other

programs to help further the clients‘ education beyond high school. A combination of

programs will multiply the aforementioned benefits.

In coordinating re-engagement efforts a city will face obstacles, some beyond

their control. A major obstacle will be funding. The re-engagement center will need

funding for staff and operating costs, which a city may not have. The city may also

experience difficulties with collaboration. In order for the effort to be successful, several

city agencies and the school district will have to communicate with each other—this may

be a challenge. Furthermore, an issue beyond the city‘s control is whether youth will

actually use the services.

CASE STUDY: DEVELOPING RE-ENGAGEMENT CENTERS IN PHILADELPHIA, PA

D EMOGRAPHICS

Philadelphia, Pennsylvania is the nation‘s fifth largest city. It is the county seat for

Philadelphia County, which was consolidated with the city some time ago. It has a

population of over 1.5 million people (U.S. Census Bureau, 2000). The population is

diverse, with approximately 45% being white and 43 % being African-American. Only

8.5 % of the population is of Hispanic descent. Youth make up a significant part of the

population—37% of the population is under 25. Approximately 71% of the population 25

years or older have a high school diploma, 18 % have a bachelor‘s degree. The median

household income is just over $36,000.



76

E CONOMY

The city is suffering with an unemployment rate of 10.8%, with approximately 25%

of residents living below the poverty line (U.S. Census Bureau). Manufacturing, finance,

healthcare, printing and publishing, pharmaceuticals, biotechnology, retail and tourism

are some of the key industries in Philadelphia‘s local economy (Education Portal). The

top five employers in Philadelphia include: University of Pennsylvania, Temple

University, Albert Einstein Healthcare Network, Aramark, and Thomas Jefferson

University. The city has several higher education opportunities, including universities and

various technical schools, for adults wishing to further their education.

P OLITICAL C ONTEXT

The City of Philadelphia has placed the issue of youth development at the top of

the agenda due to the increasing number of youth out of school and the workforce. In

his inauguration speech in January 2008, Mayor Michael A. Nutter directly confronted

issues of education and career preparation, pledging to reduce the high school dropout

rate by 50% in 5 to 7 years (or inversely raising the graduation rate to 80%), and to

double the baccalaureate attainment rate of Philadelphians in eight to ten years

(Hastings 2009).

This decision has positively influenced the political climate surrounding education and

youth engagement. The Mayor‘s Office of Education (MOE) is crucial in the city‘s

efforts. The MOE has no authority over school districts or city agencies; however, the

office builds networks for communication and collaboration ―between and among key

partners, and identify common ground on which all interested parties could work

collectively‖ (SDP, 2009).



77

The MOE established the Philadelphia Council for College and Career Success, a

high-level leadership body appointed by the mayor. The council is comprised of leaders

in the business community, city government, the school district, higher education

institutions and community organizations. A Council Leadership Team was also

established—it includes the Chief Education Officer, Superintendent of the School

District, a major area employer and a university president. The leadership team

establishes the priorities of the council, identified needs and created measures to

evaluate the effectiveness of the council‘s work. The Council and Leadership team

provide a supportive environment for the formulation of innovative youth programs.

P ROCESS

In 2008, Lori Shorr was hired as the new Chief Education Officer (Mezzacappa,

2008). Shorr was charged with developing a re-engagement center for the city. The

idea originated from Project U-turn, a collaborative which includes several organizations,

agencies, and individuals interested in youth re-engagement. The re-engagement center

would be targeted to youth between the ages of 15 and 21. Ultimately, the center would

also connect students to comprehensive resources including childcare, employment and

transitional support to aid in successful school re-enrollment.

One of the major challenges Shorr faced was protocol. Shorr asserts that the

youth ―face[d] a hit-or-miss bureaucracy‖ when contacting the school district for

information. Prior to the establishment of a center, youth would have to go to their

former school to get information regarding credits earned toward graduation. The re-

engagement center would centralize all of this information with connections to family

court, behavioral health, and child welfare. This information was previously stored in the



78

schools themselves. Additionally, the center would conduct an academic evaluation,

including reading and math levels. The challenge was to get all of this information from

each high school in the district and combine it into one system.

D ISTRICT -C ITY C OLLABORATION

Because the re-engagement center idea was handed from the top down,

accessing school data was not difficult. However, difficulties arose in data alignment.

Shorr wanted to link the school district data with agencies including Department of

Human Services, Department of Behavioral Health, Health Department and Office of

Supportive Housing (Harris, 2009). The district academic and social data on each client

has to be linked with any existing data in the other agencies named above. Other cross

agency efforts included the Health Department training principals in case management

and the Office of Supportive Housing staff being trained in educational issues (Harris

2009).

O UTCOME OF THE R E - ENGAGEMENT C ENTER

The re-engagement center opened its doors on August 19, 2008. It operates

under the Office of Multiple Pathways to Graduation. The Department of Human

Services and school district jointly staff the center. A second re-engagement center was

opened in August 2010. The program is funded by the American Recovery and

Reinvestment Act and through the Philadelphia Youth Network, a non-profit, and the

William Penn Foundation. Nine staff where hired to run the initial center, six of them were

hired through the school district, one through the Office of Mental Health and one

through the Department of Human Services. The re-engagement centers have served



79

over 5,000 students since their opening (SDP). To better understand the re-engagement

center experience, see Table 5.

Table 5. Re-engagement Center Experience

Step 1. Intake Process—Student‘s history is printed up and

client is assigned to a re-engagement specialist.

Step 2. Assessments—Student is assessed and referrals are

made for clinical interview if necessary.

Step 3. Student meets with Re-engagement Specialist—The

specialist asses needs (educational and non-

educational), the student is connected to resources,

and a written action plan is developed for the student to

enroll in an education program and access further

services.

Step 4. Students meet with REC Advisor—Advisor conducts

clinical interview and assesses behavioral health

needs, appointments set for treatment services if

necessary.

Step 5. TABE Testing—Students take tests to determine their

reading and math levels.

Step 6. Referrals—Students are referred to educational

program, staff contact program and student for 4

months to follow up.



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The Re-engagement Centers experience several unintended consequences and

operational challenges. The first challenge is that the center receives high volumes of

calls and walk-ins during peak months. The centers constantly have waiting lists for

youth wishing to return to school. Another challenge includes the data tracking system.

Though the system is running, it cannot be aligned with the service delivery plan created

by the specialists. An unintended consequence is that once students are properly

processed and referred, they have no program to attend because they also have waiting

lists. Additionally, the centers are currently struggling finding appropriate programs for

special education students. Finally, the staff experiences difficulty with following up with

students because their contact information is outdated.


How is this applicable to Plainfield? The City of Plainfield also struggles with

disconnected youth at a different scale. If Plainfield decides to undertake a re-

engagement center initiative, we recommend the following:

Research —use available resources to research the number of high school

dropouts in the city to understand the scope of the problem.

Inventory —take inventory of available high school diploma/GED programs

currently existing. If current programs have capacity for additional students, refer

clients to this program after the establishment of a re-engagement center.

Data collection —gather high school academic data and keep it on the district

level.

Collaboration —the school district must collaborate with other city agencies such

as Health and Human Services to provide a comprehensive program. Coordinate

with fewer agencies in the beginning stages, as the center grows include

additional relevant city agencies.



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Funding —seek Workforce Investment Act funding to fund the center. If the center

becomes successful, seek philanthropic contributions.

COMMUNITY SCHOOLS: CONNECTING NEIGHBORHOODS, FAMILIES, AND SCHOOLS

W HAT ARE C OMMUNITY S CHOOLS ?

Community Schools are neighborhood centers that connect local schools with

neighborhoods in order to deliver a wide array of services to students and their families.

Unlike a regular public school where children attend classes and some extracurricular

activities, the community school model relies on partnerships between schools and

community institutions which integrate academics, health and social services, and civic

engagement. In short, a community school is organized around local needs and links

local organizations, businesses, and partner agencies to create specialized programming

and social services for students and their families. Community school initiatives lead to

improved academic performance, reduced dropout rates, improved behavior and youth

development, and greater parental involvement in students‘ education and in the school

(Coaltion for Community Schools 2009).

K EY E LEMENTS OF A C OMMUNITY S CHOOL

The Coalition for Community Schools identifies five broad areas in which Community

Schools offer programs and services:

1) Quality Education with a specific focus on community-based learning, which

emphasizes civic education and service learning.

2) Youth Development programs

3) Family Support services include early childhood development programs, mental

and social health services, and counseling.



82

4) Family and Community Engagement programs designed by families and

community members.

5) Community Development initiatives that aim to enhance the school‘s surrounding

physical and social environment.

Of course, the topics listed above are very broad; it is up to the individual

communities to design programs that address specific local needs. These core areas,

however, serve as a basic guide for Community Schools all over the country. Community

School initiatives have spread to localities in roughly 44 states and serve an estimated

5.1 million children and youth (Coalition for Community Schools March 2009).

H OW ARE C OMMUNITY S CHOOLS F UNDED ?

In general, about half the funding for a Community School comes from federal,

state, and city funding. The rest of the funding streams come from the school district,

private foundations and businesses, donations, community based organizations, and in-

kind support (Blank 2010) .The funds granted to a given Community School are used for

a number of different services and programs. On average, the funds are allocated in the

following ways:57% is used for academic enrichment, after-school activities, service

learning and civic engagement, life skills, and recreation;12% goes toward programs that

support families;12% goes toward site staffing; 19% is for health and mental health

services. The types of available programs in a community school (and the funding

sources needed to deliver such programs) are illustrated by the Portland, Oregon SUN

(Schools Uniting Neighborhoods) School initiative described below.



83

CASE STUDY: SCHOOLS UNITING NEIGHBORHOODS (SUN) INITIATIVE

H ISTORICAL AND D EMOGRAPHIC C ONTEXT OF SUN I NITIATIVE

The City of Portland is Oregon‘s most populous city and is the seat of Multnomah

County. The city has a total population of 548,998 that is 6.4% African-American, 8.8%

Hispanic or Latino (of any race) and 78.8% White. It had an estimated median

household income of $48,053 with 9.9% of residents living below poverty level.

The Schools Uniting Neighborhoods (SUN) Initiative was created in response to

the City of Portland‘s struggling school system. In the late 1990s, public schools in

Portland had a difficult time keeping their doors open for the duration of the school year.

A lack of funding, a growing achievement gap, and the city‘s changing demographic

groups who were not effectively served by the school system, led school officials to seek

for innovative solutions. In 1998, The City of Portland and Multnomah County partnered

together to implement a more comprehensive model of service delivery within a handful

of public schools (today there are 59 participating schools). Programming and service

delivery at SUN Schools is community-driven . That is, the services provided at any

school are targeted to cater to the specific neighborhoods in which they are located. An

advisory committee at each school conducts local needs assessments and works with

school staff, community leaders, students, and parents in order to create partnerships

with local organizations and institutions that will best serve the schools‘ demographic.

The SUN Initiative exists at the elementary, middle, and high school level at 59

schools in 6 school districts in Multnomah County. Altogether, SUN Community Schools

collaborate with 350 business and community partners.



84

All SUN Schools share a common set of goals including:

1) Increase the capacity of schools to provide an environment for expanded

services that aim to improve academic achievement, attendance, and other youth

development skills2) Increase family involvement and provide school-based activities that build

parents‘ and students individual assets

3) Increase the involvement of community organizations and businesses in school

service delivery and

4) Improve collaboration among school districts, local governments, community

agencies, and business and citizen leaders.

5) Increase the use of publicly available facilities and services by locating them

within community based neighborhood schools (Iverson, 2005).

O PERATIONAL ASPECTS OF SUN S CHOOLS

While the services at SUN Schools are tailored to specific neighborhood needs,

SUN Schools have similar operational and leadership structures. All SUN Schools

function with the guidance of a non-profit ―Lead Agency‖ who acts as the managing

partner of the school and connects the school to community resources. Staff from the

lead agency work with the school principal and an advisory team to select a Site

Manager, who coordinates the extended day programs and maintains close relationships

between the school and community partners. In addition, there is usually an operating

team comprised of the school principal, a full-time SUN Community School Site

Manager, and Supervisor from the Lead Agency who meet to handle day-to-day

operating issues. In addition there are other advisory structures made up of community

members, parents, partnering agency representatives lead by the principal and school

staff who sustain partnerships and manage resources. Finally, there is usually some type



86

With seed money from Bank of America plus three years of support from Portland City

Council‘s Time 4 Kids Initiative, the principal implemented the SUN structure in 1999.

School services are targeted to individuals within the neighborhood but are open

to anyone. In the years 2009-2010 the school offered almost 50 extended-day activities

ranging from sports programs to tutoring with Reed College, to El Programa Hispano, to

adult education courses. Culturally specific social services and case management is

provided on-site. There is also a health center (operated by Multnomah County) onsite

that provides physical and mental health support services to students and families. In

addition, dinner is provided for students every day after school.

Community partners include: Portland Parks and Recreation; Multnomah County

Dept. of Human Services and Health; Impact Northwest; El Program Hispano, Reed

College, Portland State University; Learning Gardens (SUN Service System).

R ESULTS

After implementation of the SUN structure, teachers surveyed at Lane indicated

that 63% of students improved classroom academic performance; 59% showed

increased punctuality in submitting homework on time; 56% had a more positive attitude

toward school; 59% showed improved teamwork capabilities (SUN Services System).

R ECOMMENDATIONS

The State of NJ Department of Children and Families currently has a School-

Based Youth Services Program (SBYSP) which takes a preventative approach to

potential obstacles that at-risk youth and adolescents may face (State of New Jersey

Department of Children and Families). While helpful for providing health and mental

wellness services to youth, the programs could be improved with a more robust,



87

community-oriented approach that aims not just for service delivery but for extended-day

programs and innovative coursework. The SBYSP could be a launching point for

community schools that are similarly well rounded as the case described above. Schools

in Plainfield and in Union County that have an existing SBYSP structure should

collaborate with city agencies to pool more funding for community-specific programs and

innovative services at Plainfield‘s schools.


Build alliances with local day laborer advocates and community members and

take steps toward developing a formal day laborer hiring center.

Address existing community conflict over informal day laborer hiring sites and

spread awareness about the struggles that Plainfield‘s day laborers face.

Adopt a deconstruction and sustainability initiative such as reuse and recycled

building materials as a part of its standard practices with concern to demolition,

revitalization or rehabilitation projects.

Initiate urban agriculture projects in order to put vacant land back to productive

use, provide employment opportunities for residents, and create gathering spaces

in the community.

Collaborate with the school district and other city agencies to develop a

comprehensive approach to re-engaging youth who have left or are at risk of

leaving school.

Initiate steps toward creating holistic Community Schools in Plainfield by building

on existing School-Based Youth Services programs in New Jersey.



88

DEVELOPING PEOPLE, DEVELOPING PLACE

W ORKS C ITED FOR D ECONSTRUCTION P ROJECTS C ASE

Kimmet, C. (2011, January 18). Building Jobs by tearing down houses the green way.The Tyee. Retrieved from http://thetyee.ca/News/2011/01/18/TearingDownHouses/

Robbins, H. (2010, June 28). Jobs for Ex-Offenders in the Green Economy. The Root.Retrieved from http://www.theroot.com/views/jobs-ex-offenders-green-economy

Segall, G. (2009, January 3). Deconstruction salvages abandoned Cleveland Homes.Cleveland.com. Retrieved fromhttp://blog.cleveland.com/metro/2009/01/deconstruction_salvages_abando.html

Second Chance, Inc. (2001). About Us. Retrieved fromhttp://www.secondchanceinc.org/index.aspx?u=About_Us

U.S. Department of Housing and Urban Development. (2000). A Guide toDeconstruction. Washington, DC: U.S. Government Printing Office.

U.S. Department of Housing and Urban Development. (2001). A Report on theFeasibility of Deconstruction. Washington, DC: U.S. Government Printing Office.

U.S. Environmental Protection Agency. (2000). Building Savings. Washington, DC: U.S.Government Printing Office.

U.S. Environmental Protection Agency. (2008). Recover Your Resources. Washington,DC: U.S. Government Printing Office.

ADDITIONAL R ESOURCES FOR D ECONSTRUCTION

www.deconstructioninstitute.com www.epa.gov

W ORKS C ITED FOR D AY LABORER C ENTERS C ASE

CASA de Maryland www.casademaryland.org

Fine, J. (2006). Worker Centers: Organizing Communities at the Edge of the Dream.Ithaca, NY: Cornell University Press.

http://thetyee.ca/News/2011/01/18/TearingDownHouses/


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http://www.deconstructioninstitute.com/


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http://www.epa.gov/








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W ORKS C ITED FOR R E - ENGAGEMENT C ENTERS C ASE

Almond, H., & Morris, M. (n.d.). Re-engagement center overview. Mhwest.com .Retrieved March 15, 2011, from

www.mhwest.com/downloads/Philadelphia%20Powerpoint.pdf

Bailey, S. (2010, September 14). School district opens 2nd Re-Engagement Center.PhillyTrib.com: Philadelphia news . Retrieved April 23, 2011, fromhttp://www.phillytrib.com/tribune/learningkeyheadlines/14482-school-district-opens-2nd-re-engagement-center.html

Beyond city limits: cross-system collaboration to re-engage disconnected youth. (n.d.).NLC.org . Retrieved March 15, 2011, fromwww.nlc.org/ASSETS/986F4B75DF524770A398BF1459940D57/07_YEF_CaseStudies.pdf

Education mid-term report. (2010, January 13). Phila.gov . Retrieved March 15, 2011,from www.phila.gov/PDFs/Education_MidtermReport.pdf

Harris, W. (n.d.). City agency collaboration: can we turn talk into action? United Way of Southeastern Pennsylvania . Retrieved April 15, 2011, fromhttp://www.uwsepa.org/media_release.asp?releaseid=401

Hastings, S. (n.d.). Putting youth to work series: examples of effective practice indistressed communities. Clasp.org . Retrieved March 15, 2011, fromwww.clasp.org/admin/site/publications/files/Philadelphia-full-profile-final.pdf

School District of Philadelphia. Imagine 2014: Strategic Plan. (n.d.). Phila.k12.pa.us .Retrieved March 14, 2011, fromhttp://webgui.phila.k12.pa.us/uploads/dr/HY/drHYRgSvGohGA84W7vPFJw/Imagine-2014-Strategic-Plan.pdf

Mezzacappa, D. (n.d.). City's new education chief spearheads re-engagement center.Philadelphia Public School Notebook . Retrieved April 15, 2011, fromhttp://www.thenotebook.org/print/204?page=show

Mezzacappa, D. (n.d.). Re-engagement center data: A look at Philadelphia's out-ofschool population | Philadelphia Public School Notebook. Philadelphia Public School Notebook . Retrieved April 15, 2011, fromhttp://www.thenotebook.org/spring-2009/091180/re-engagement-center-data-look-philadelphia-out-school-population

Philadelphia, PA education and city information. (n.d.). Education-portal.com . RetrievedMarch 15, 2011, from http://education-portal.com/articles/Philadelphia,_Pennsylvania_Education_and_City_Information.html

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http://www.nlc.org/ASSETS/986F4B75DF524770A398BF1459940D57/07_YEF_CaseStudies.pdf



http://www.phila.gov/PDFs/Education_MidtermReport.pdf



http://www.uwsepa.org/media_release.asp?releaseid=401


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Re-engagement Center. (n.d.). Re-engagement Center Website . Retrieved March 15,2011, from http://webgui.phila.k12.pa.us/offices/r/alternative/programs--services/multiple-pathways/re-engagement-center

Shaping an Educated City: Two-Year Report on the Mayors Education Goals. (n.d.).Phila.gov . Retrieved March 15, 2011, fromwww.phila.gov/PDFs/featureEducation.pdf

U.S. Census Bureau. 2000. United States Decennial Census. Retrieved March 15, 2011,from http://www.census.gov

W ORKS C ITED FOR C OMMUNITY S CHOOLS C ASE

Blank, M. et al. November 2010. Financing Community Schools: Leveraging Resources

to Support Student Success. Retrieved from:http://www.communityschools.org/assets/1/AssetManager/finance-paper.pdf

Coalition for Community Schools. 2009. Coalition for Community Schools Research Brief 2009 . Retrieved from:http://www.communityschools.org/assets/1/AssetManager/CCS%20Research%2

0Report2009.pdf

Coalition for Community Schools. www.comunityschools.org

Coalition for Community Schools. March 2009. Community School Initiatives State-to-

State. Retrieved from:http://www.communityschools.org/aboutschools/directory.aspx

Iverson, D.. (Fall 2005) Schools Uniting Neighborhoods: The SUN Initiative in Portland,OR. New Directions for Youth Development No. 107. Wiley Periodicals, Inc.

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SUN Service System. 2010. SUN Community School Profile- Lane MiddleSchool.Retrieved from:http://web.multco.us/sites/default/files/sun/documents/site_profile_lane_09-10.pdf

U.S. Census. American Factfinder. http://factfinder.census.gov/

R ESOURCES FOR C OMMUNITY S CHOOLS

http://webgui.phila.k12.pa.us/offices/r/alternative/programs--services/multiple-pathways/re-engagement-center




http://www.phila.gov/PDFs/featureEducation.pdf


http://www.census.gov/



http://www.communityschools.org/assets/1/AssetManager/finance-paper.pdf

http://www.communityschools.org/assets/1/AssetManager/CCS%20Research%252%20%090Report2009.pdf



http://www.comunityschools.org/



http://www.communityschools.org/aboutschools/directory.aspx


http://web.multco.us/sun



http://www.state.nj.us/dcf/prevention/


http://factfinder.census.gov/










http://www.communityschools.org/assets/1/AssetManager/finance-paper.pdf







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edition. http://www.childrensaidsociety.org/publications/building-community-school-parents-guide accessed April 14 2011.

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http://www.communityschools.org/aboutschools/faqs.aspx

http://www.childrensaidsociety.org/publications/building-community-school-parents-guide%20accessed%20April%2014%202011











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SECTION THREE

BUSINESS AND ASSET DEVELOPMENT



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INTRODUCTION

Traditionally, cities relied on attracting business as a means to create, jobs, and

increase overall economic well being. With notable exceptions, it is unlikely that

companies move to another place or region solely based on financial inducements. This

dooms any local economic development strategy based only attraction policies. It does

not link larger city and regional dynamics to the core reason for development: creating

economic opportunity and ensuring a good quality of life in any community. As cities

become aware of this disconnect and see that local economic development is not

effective without the community they are beginning to combine the two. Development

practices in developed regions are moving toward an integrated set of strategies called

local and community economic development.

This section covers the need for retaining, cultivating, and expanding existing

businesses in the City of Plainfield. We present cases that use strategies such as small

business incubators, loan and grant programs, gap financing, small business training

and tax increment financing to make the case that small business development is the

most logical local and community economic development strategy for Plainfield absent

efforts to develop a strategic plan for economic development that targets mid-sized

industries for relocation or branch plant placement. We also introduce here the concept

of community development finance which when complemented strategies to support and

expand local businesses produces an opportunity to develop the assets of both people

and place.



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RETAINING AND EXPANDING EXISTING BUSINESSES

EXISTING BUSINESS: AN ECONOMIC DEVELOPMENT STRATEGY

Existing businesses in any city face multiple barriers to growth. These barriers

include compliance with regulations, lack of trained workforce, marketing inexperience,

difficulty in finding financing, and shortage of space in which to expand. Too many

barriers and too few resources to overcome them can often leads to business failure.

Over the last twenty-five years, new administrative and financial tools have come on the

scene that helps small business survive. Often local governments partner with others to

support these small business strategies or directly hosts a strategy – such as a revolving

loan fund. We focus on business support and retention policies here as distinct from

attracting new businesses especially those employing twenty-five people or more.

Plainfield should pursue attraction policies, but only after going through a strategic plan

that identifies (1) a type of industry niche that will likely attract a significant cluster of

businesses (2) growing the city‘s marketing capacity to mount effective outreach to

business (3) developing the requisite financing strategies to appeal to mid-to large-scale

employers.

B USINESS R ETENTION AND E XPANSION AT A G LANCE

A Business, Retention and Expansion (BRE) strategy is a formal commitment by

local government to support its existing businesses through removing barriers to growth

and creating opportunities for businesses to excel. A BRE strategy provides businesses

with a variety of resources that they need to succeed. The Retention side includes

identifying businesses at risk to closing or relocating and providing needed assistance to

prevent closing, relocation, or downsizing. Expansion assistance includes identifying



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businesses ready for growth and providing help such as access to capital, help with

―back office functions,‖ and aid in securing space for expansion. Other general

assistance may include guidance on regulatory compliance, assistance with job training,

business plan development, developing a marketing strategy.

P LAINFIELD I N F OCUS

One key strategy of BRE is that Plainfield must be able to identify existing resources

for local businesses, leverage those resources, and put businesses in touch with these

resources that engender growth. One suggestion is that the city set up a Business

Retention Office in its economic development office. The BRE Office does not have to

become a subject expert on all businesses issues. Instead, the BRE Office needs to

become proficient in identifying existing resources and leveraging their services to assist

Plainfield businesses.

The foundation of a successful BRE strategy is an understanding the answers to

three questions:

What are our regional strengths and weaknesses for promoting local small

businesses that are sustainable not only by attracting local customers but those in

a twenty-mile radius?

What opportunities exist to develop clusters around say servicing transportation

(auto shops), personal services, retail or any number of available sectors that

might grow the small business sector in a community?

How can we best build strengths, reduce weaknesses and target business

development?

These questions apply to every municipality attempting to promote economic

development. The need is particularly high for municipalities that seek economic benefits

from public and private investments in new infrastructure, facilities and support services.



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That is because the effectiveness of any particular BRE hinges on managing or

eliminating barriers to economic development surfaced by the forgoing questions. For

Plainfield, the recommended BRE Office must:

Work with existing business to identify areas of need and link with available

possibilities to enhance their businesses such as state-level economic

development assistance, building private sector partnerships, and local resources

such as subsidies for commercial space.

Develop trust relationships with local businesses so that they recognize BRE as

an advocate that can assist them in growing their markets and customers.

Routinely analyze national and regional business trends and their relevance to

Plainfield.

Be able to measure its effectiveness in retaining and expanding businesses.

E XAMPLE BRE I NITIATIVES

There is no gold standard for specifying a business retention and expansion

strategy. We present some cases here for Plainfield to consider using as a departure

point for assessing and enhancing present BRE strategies.

CASE STUDY: BRE PROGRAM, ALEXANDRIA, MINNESOTA

In 2005, Alexandria initiated its BRE program by forming a leadership team to

drive the effort. Members of the leadership teams included: executive director of

Economic Development Commission, executive director of Chamber of Commerce, dean

of local technical college, city planner, representative from the leading local bank, and a

resident. Then the BRE program recruited 22 additional people to serve on a task force

to conduct business surveys; 39 surveys were conducted at businesses over the course

of a month. The University of Minnesota analyzed the survey results. Among other

things, the BRE program determined that many of the community and business leaders



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were in the boomer generation, and only 10 percent of leaders were in the ―next

generation‖; thus business succession planning was key to retaining and expanding

businesses.

As part of the BRE succession planning effort, business leaders invited young

professionals into a mentoring relationship. Through this relationship leaders were able

to share their business knowledge and young professionals gained an understanding of

the gaps they will need to fill in come years. Businesses were then encouraged to begin

succession planning as strategy to ensure local businesses continued after present

owners left the scene. Business succession planning may seem a limited outcome, but it

focused effort on the part of BRE stakeholders. Rather than begin with an effort without

broad appeal, the focus on succession planning (admittedly fraught with its own danger

to divide) encouraged focus on a key asset: (1) leaders of a certain age and their

businesses and (2) how to transmit the wisdom they accrued while preserving the

businesses for the continued benefit of the community.

CASE STUDY: OPEN TO BUSINESS, MINNETONKA, MN

Minnetonka is a suburban city in Hennepin County, Minnesota eight miles west of

Minneapolis. As of 2009 the city has population of 51,451which makes it the 14 th largest

city in Minnesota. The city is home to Cargill, the country‘s largest privately owned

company and United Healthcare, largest publicly owned company in Minnesota.

Minnetonka has a highly educated workforce according to the 2000 with 95.9 % of

its population obtaining a high school education and 51.6% having a bachelors degree or

higher. Minnetonka is home to several multi-nationals and regional corporations. The city



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has only one percent of land that is undeveloped. This illustrates the point that any new

development in the city will come in the form of redevelopment of existing small

businesses. This caused the city to recognize the importance of the locally owned and

operated small neighborhood businesses to its economy and livability. Coming to that

realization the city recognized they had no viable plan in place to foster small businesses

development or growth of those already in existence.

To grow smaller businesses, the City of Minnetonka entered into a collaboration

called the Minnetonka Open to Business program. This collaborative effort with the city

and the Metropolitan Consortium of Community Developers (MCCD) provides person-to-

person assistance from the MCCD staff, customized to meet the needs of small business

owners and operators. Clients receive help in planning and organizing their business

ventures, financial management, marketing, and regulatory compliance. MCCD also has

a small business loan fund that it used to help entrepreneurs access the capital for

business growth.

The Open to Business program does can best be described as small business

entrepreneur therapy. The Metropolitan Consortium of Community Developers or MCCD

helps entrepreneurs by giving them objective advice ensuring those business owners

who seek their advice get all the market research required. MCCD is an association of

43 not for profit community development agencies tasked with providing economic

opportunity throughout the Twin Cities metro area. It is not just about business coaching,

they also operate a small business loan fund, which they use to encourage

entrepreneurs to grow their businesses, providing much needed capital that in the past



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would be unavailable. MCCD have loans that range from $2,000 to $25,000 that are

readily available for qualified small businesses.

MCCD helps small businesses define their market. Any resident or small

business owner in Minnetonka has access to the same Open for Business small

business therapy for free. Their motto being, most businesses begin as a small business.

Some stay small in scale and scope, others continually grow and diversify.

While Minnetonka has a strong business outreach program, it focused primarily

on attracting Fortune 500 companies, overlooking small business development. To

address this issue the city paid MCCD $10,000 to assist small business development

services the city could not provide. Under the agreement with MCCD, small business

owners get the information, advice and access to financing. A small business loan fund

is used to encourage entrepreneurs to grow their businesses providing capital that

previously would be unavailable, with loans ranging from $2,000 to $25,000 for qualified

small businesses.

With the current economic climate, the Open to Business program helps to

support small businesses by providing market research behind small businesses it

increases their chances of succeeding by clearly identifying who their target market is

and then researching and developing strategies to reach that market.

They first pick the small businesses‘ original plans apart and explain where their

model is really strong and where they need to focus more attention. The reason so many

small businesses don‘t succeed is not because of a lack of effort , but a lack of a solid

plan and that is what the Open to Business Program is designed to do provide help in

developing that plan.



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In 2010, Minnetonka‘s planning commission saw a 36% increase in permit

requests for small businesses and development. This is almost unheard of in a down

economy. The Metropolitan Consortium of Community Developers services are available

for consultation the third Tuesday of each month at City Hall as a large portion of the

programs users are business owners seeking to expand operations in Minnetonka, or

entrepreneurs with a great idea and the drive to make it happen but who lack the

resources. The city has a deal with MCCD to pay its consultants a $50 hourly fee, up to

$5,000. Participants in the program pay nothing for the services.

MUNICIPAL FINANCING OF SMALL BUSINESS

GOVERNANCE AND BUSINESS: AN ECONOMIC DEVELOPMENT STRATEGY

Government should not be the first choice in financing small business, but it is not

a rarity to see municipalities either provide financing or partner with others to do so. The

reason for government involvement in direct financing varies, for example: local financial

institutions cannot profitably make small business loans in the community, or local

entrepreneurs may lack equity. The best case for the use of government sponsored

financing is not support entrepreneurs at the small end of the capitalization spectrum

(other resources and effort such as community development finance should occupy that

niche), rather municipal resources should be part of a strategic effort to attract or grow

new and emerging industry. Pittsburgh is illustrative of this point, but many jurisdictions

are pursuing a similar course.



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CASE STUDY: FUNDS, PITTSBURGH, PENNSYLVANIA

Pittsburgh offers a wide variety of financial products with the goal of business and

real estate development. These programs provide ―gap financing‖ by working with

traditional financial institutions to structure deals that are already on the verge of viability.

U RBAN D EVELOPMENT F UND

This program provides gap financing at market-rate interest for the development

of vacant or underutilized residential developments. Conditions for approval include the

need for one job to be created for every $30,000 invested; that low- to moderate-income

persons must fill 51% of jobs created; and that the development must be located within

the city. Duration of loan terms is determined by private lenders but may not exceed 20

years. Loans are provided for up to 40% of project costs, and loans range from $25,000

to $250,000. The city charges a variety of fees that total roughly 2.5% of principal. The

city also charges an annual 0.5% ―loan servicing fee.‖ The program is funded through a

combination of city funds and Community Development Block Grants (CDBGs) from the

US Department of Housing and Urban Development (HUD) (Pittsburgh: Urban

Development, 2011).

P ITTSBURGH E NTREPRENEUR G ROWTH F UND

This program provides up to 60% of the more ―soft‖ costs for starting/expanding

Pittsburgh businesses in emerging industries; e.g., information technology or ―green‖

technologies. Loans are available at unspecified ―below-market‖ interest rates. Loans

amounts range from $20,000 to $200,000, or up to 60 percent of project costs. The city

charges a 2 percent ―due diligence‖ fee at closing, and a 0.5 percent annual ―loan

servicing‖ fee (Pittsburgh: Entrepreneur Growth, 2011).



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LESSONS FOR P LAINFIELD

An effective business and retention strategy begins with the municipality‘s

capacity to focus sustained effort on outreach and assistance to the

stakeholder community – in this case, business owners.

Outreach begins with a survey assessment the needs and capacities of

existing businesses.

Develop diverse public/private partnerships to implement the business,

retention and expansion strategy thereby maximizing community-wide

resources and legitimacy.

Focus on one or two ―winnable‖ BRE strategies (such as Alexandria focusing

on succession planning) at the beginning. Gaining initial legitimacy allows

confidence in pursuing more complex strategies to help local businesses.

Provide tangible, measurable services to the small businesses such as access

to capital or organizational development assistance.

Hire someone with business experience to run BRE office – if adopted as a

strategy. Business owners tend to work better with outreach staff that has run

a business even if they did not experience success on the initial try.

Find a local university that will assist with the knowledge building portion ofthe BRE especially is BRE staff support is limited to one or two staffers who

might be best used in direct outreach.

Agree on the best strategic use of financing dollars made possible through the

Community Development Block Grant or state economic development

programs. Often such resources are dispensed to try and help any or all

businesses that are viable. As difficult as it may be, Plainfield needs to make

strategic bets on small to mid-sized companies identified through a strategic

economic development plan.



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COMMUNITY DEVELOPMENT FINANCE: AN ALTERNATIVE ECONOMIC DEVELOPMENT

STRATEGY

Injections of capital are essential to businesses seeking to start or expand, but in

today‘s financial industry, traditional banks are often wary of making loans that smaller

businesses need to grow. Microfinance organizations, community development loan

funds (CDLFs), and some municipally operated revolving business loan funds are

increasingly supporting smaller businesses defined as those capitalized at $13,000 or

less.

Rohan Mathew, co-founder of New Brunswick‘s nonprofit microf inance lender, the

Intersect Fund, recalls the story of a local contractor who was forced to rent rather than

purchase the van he used for his business because he was unable to obtain a loan.

Despite his long and steady history of paying the $400 per month van rental fee, his lack

of credit history meant that he could not qualify for a loan to purchase the vehicle. He

was able to obtain a loan from The Intersect Fund. The cost of securing a vehicle for his

business immediately fell by hundreds of dollars per month, and the profitability of his

business grew accordingly (Mathew Interview, 2011).

Microenterprise development and access to credit grew out of the path breaking

work of the Grameen Bank in Bangladesh and its founder, Muhammad Yunus. Starting

with a university-based action research project in 1976, Dr. Yunus wanted to see how

the provision of small amounts of credit at reasonable lending rates for purchase of farm

implements, seed, or livestock would assist rural development.

The experiment found that the poor, especially women, have high repayment

rates and that micro-loans of $25 (U.S.) make a significant difference in increasing family



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income and asset accumulation. Borrowers tend to reinvest profits in farm equipment

and livestock that increase crop yield.

Microenterprise and peer lending have experienced some success in the United

States. The Small Business Administration (SBA) has offered a micro-loan program

since 1992. The SBA uses nonprofit Community Development Financial institution

(CDFIs) like the Intersect Fund to make loans to new or existing borrowers. Important to

this program model is the ability of the CDFIs to provide organizational and technical

assistance to entrepreneurs. Small businesses needing small-scale financing and

technical assistance for startup or expansion may be able to obtain up to $35,000

through short-term loans of public money called micro-loans, which average about

$13,000. These loans are administered through local CDFIs or state finance authorities

that are selected and approved by the SBA. The SBA loans the money to the nonprofit

organization, which then pools the funds with local money and administers direct loans to

small businesses.

Plainfield has a number of these very small businesses and one of the

recommendations here is to investigate the possibility of working a multi-service CDFI to

provide wraparound services, such as financing and administrative support. Liking the

now well-known incubator concept, where small and micro businesses share space,

administrative support for a period of time, to access to credit can be a powerful BRE

strategy.



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CASE STUDY: THE ENTERPRISE CENTER OF PHILADELPHIA

The Enterprise Center (TEC) in West Philadelphia uses this model of an incubator

fused with a capital access strategy to help build entrepreneurial capacity in a tough part

of the city. Started in 1989 as a project of the Wharton School‘s Small Business

Development Center, the Enterprise Center‘s mission is to provide access to capital,

building capacity, business education and economic development opportunities for high-

potential, minority entrepreneurs.

Standing the test of time, including economic downturns and change of

administrations (local, state, and national), TEC has endured offering critical support

services to their target community. First, TEC has a subsidiary CDFI called the

Enterprise Center-Capital Corporation (TEC-CC), which provides financing and technical

assistance to minority- and women-owned businesses located in Philadelphia‗s low-

income communities. In addition to debt financing, the Capital Corporation assists small

businesses in attaining grant and equity funding. TEC-CC loan programs are designed to

finance minority businesses that are challenged in obtaining funds for start-up capital

and business growth. The Capital Corporation makes loans of between $5,000 and

$35,000 to entrepreneurs through its role as a U.S. Small Business Administration co-

lender.

TEC is a federally qualified Minority Business Enterprise Center, which allows it to

provide technical consulting services to its client companies in addition to information

about public sector contracting at all levels of government. But the TEC does more than

provide capital and technical assistance. It is a full-fledged CDFI that uses business

development to approach the larger project of place and people development.



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If this was not enough, TEC also has an affiliate CDC called the Enterprise Center

Community Development Corporation that tries to support the physical redevelopment

around its catchment area. Recently, TEC has partnered with three Community

Development Corporations, The People‘s Emergency Center CDC, the University City

District, and The Partnership CDC, to form the Sustainable Communities Initiative –West

Philadelphia (SCI –West). SCI –West seeks to improve communities in West Philadelphia

by making them healthier, more competitive, and better connected with the economic

mainstream through investments in physical development and social services.

N EW M ARKETS T AX C REDIT P ROGRAM

Community development finance as a tool is now mainstream and supported by a

federal program called the New Markets Tax Credit (NMTC). The NMTC program was

established during President Bill Clinton‘s second administration under the Community

Renewal Tax Relief Program of 2000. The NMTC Program is administered through the

U.S. Department of Treasury‘s Community Development Financial Institutions (CDFI)

Fund. Unlike previous federal program using tax credits to increase affordable housing

units within distressed communities, NMTC seeks to increase business activities in

distressed communities (including urban and rural communities). The program allows

taxpayers to receive tax incentives (credit against their Federal Income Tax) for making

equity investments into certain Community Development Entities (CDEs). CDEs must

then invest ―substantially all‖ (85%) of those investments made by investors (banks,

individuals, etc.) into businesses in low-income and underserved communities.

The NMTC Program allows investors to purchase stock or capital interest in

qualified CDEs. CDEs subsequently make investments to businesses in low-income



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communities. The primary goal of NMTC is to create jobs in low-income areas and

promote economic development. In addition, investors receive tax credit, claimed over a

7-year period. In the first three years, investors receive credit 5% of the original

investment amount, annually. In the next four years, investors receive credit on 6% of

the original investment amount. The credit provided to the investor totals 39% of the

cost of the investment. Supporters of the program believe that by increasing the capital

base in low-income communities, the tax credit will enable CDEs to lend and invest

more, to attract additional outside capital, and to bring even more private-sector activity

into low-income areas.

W HAT ARE CDE S ?

In order to qualify as a CDE, the organization must meet the following requirements

set by the CDFI Fund:

Be a domestic corporation or partnership at the time of the certification

application;

Demonstrate a primary a mission of serving, or providing investment capital for,

low-income communities or low-income persons; and

Maintain accountability to residents of low-income communities through

representation on a governing board of or advisory board to the entity.

Eligible CDEs could include for-profit community development financial institutions

(CDFIs), for-profit subsidiaries of community development corporations, SBA-licensed

New Markets Venture Capital companies, and Specialized Small Business Investment

Companies.

CDEs have 12 months to invest the Qualified Equity investments into low-income

communities. ―Substantially all‖ of the profits from the qualified equity investments must



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be invested in low-income communities. For the first year through the 6th year CDEs

must invest ―substantially all‖ which includes 85% of the original amount paid by the

investor. In the 7th year CDEs must invest ―substantially all‖ which includes 75% into

designated low-income communities.

CASE STUDY: CUSTOMHOUSE AND POST OFFICE-ST. LOUIS, MISSOURI

In Missouri, a team of businesses teamed up to finance the renovation of the U.S.

Customhouse and Post Office in St. Louis. Altogether, the Trust for Historical

Preservation, the Enterprise Social Investment Corporation (ESIC), Bank of America and

the Missouri Development Finance Board, used Historic and NMTC tax credits to fund

the construction and remodeling of the historic building. The National Trust‘s CDE made

a tax credit equity investment of $25.5 million (which combined Federal, State, Historic

and new market tax credits) and ESIC CDE, made a first mortgage loan of $8.2 million.

In the end, the 242,000 square foot building created approximately 1, 458 construction

jobs, 850 permanent jobs and about $8 million in state and local tax revenue.

CASE STUDY: MARKET CREEK PLAZA-SAN DIEGO, CA

In San Diego, California, a shopping center, Market Creek Plaza, funded by an

investment made by Wells Fargo Bank. The investment, $23.5 million, financed a

shopping center anchored by a 57, 000 square foot ―Food for Less‖ supermarket. The

project will capture for the inner-city community a large portion on an estimated $60

million in retail spending that was leaking out of the community before development. It

has generated 1,700 new permanent neighborhood jobs and 360 neighborhood



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construction jobs, and will provide for a mix of retail uses ranging form national and

regional credit tenants to local entrepreneurs and micro-businesses. It has also involved

more than 2,000 residents and community members in planning the economic, social

and cultural characteristics of the project.

CASE STUDY: REVITALIZATION IN COSTAL OREGON-NORTH BEND, OREGON

ShoreBank Enterprise Pacific, received an NMTC investment of $2.8 million in

2006 to spur redevelopment and economic activity on the waterfront of North Bend,

Oregon, and provide a new infrastructure for a growing tourism economy. The Cocquille

Economic Development Corporation used the funds to create a state-of-the-art

recreational vehicle (RV) park on a 12-acre portion of a 50-acre former lumber mill. The

park includes 100 RV spaces equipped with phones, Internet, cable TV and all utilities.

Restrooms, showers, laundry, recycling facilities and a welcome center are also included

on the site. Altogether the project employed approximately 50 construction workers and

was completed in 2006.


The use of community development finance is a new and expanded effort to

encourage business development for poor cities or cities that are on the economic

margin. What is important here is the recognition that businesses in such communities

work in an economic and social context that is fraught with special challenges. Mainly

these challenges are access to capital and ancillary services to give such businesses a

fighting chance to survive.



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The CDFI movement is also different in that the onus for business development is

not on municipal government alone, but a combination of government working with savvy

social entrepreneurs who are experts in finance and technical assistance. The latter

makes the work of government that much easier if effective community development

financial institutions are present. Plainfield should consider encouraging the development

of a non-profit community economic development sector that (1) it can partners with and

(2) the sector can use emerging financial tools and federal public policies to support local

businesses along with pursuing projects of scale. We recommend that Plainfield pursue

a long-term strategy to learn about community economic development (CED) and

encourage, as best it can, the development of a CED ecology populated with strong

community-based development groups, CDFIs and the private sector.



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ADDITIONAL RESOURCES ON BUSINESS RETENTION & EXPANSION

University of Florida. (2011). IFAS Extension. Retrieved April 2011 from:http://edis.ifas.ufl.edu/topic_series_bre

Northeast Regional Center for Rural Development. (September 2009). BusinessRetention and Expansion Resource Manual. Retrieved April 2011 from:www.reddi.gov.on.ca/pdf/3119675_bre_resource_manual.pdf

University of Wisconsin. (2006). Downtown Economic Development Tools. RetrievedApril 2011 from: www.uwex.edu/ces/cced/downtowns/

Nova Scotia Association of Regional Development Authorities. (2009). Business

Retention & Expansion: Helping Nova Scotia Businesses Grow. Retrieved April2011 from: http://www.nsarda.ca/default.asp?mn=1.283.286

Teamwork Arkansas – Entergy‘s Office of Economic Development. Business Retention &Expansion Guide: Arkansas. Retrieved April 2011 from:www.entergyarkansas.com/content/economic_development/docs/Business_Retention_Expansion_Guidebook.pdf

WORKS CITED

Regents of the University of Minnesota. (2007). BR&E Visitation Program Case Study:Grants Pass/Josephine County, Oregon. Retrieved April 2011 from:http://www.extension.umn.edu/businessretention/components/case-Grants_Pass.pdf

Regents of the University of Minnesota. (2007). BR&E Visitation Program Case Study:Alexandria, Minnesota Project. Retrieved April 2011 from:http://www.extension.umn.edu/businessretention/components/case-alexandria.pdf

City of Minnetonka. (2007). ―Community Development‖. Retrieved April 1, 2011 from:http://www.eminnetonka.com/community_development.cfm

Metropolitan Consortium of Community Developers. MCCDMN. Retrieved April 1, 2011from: http://www.mccdmn.org

Metz, K. (January 22, 2011). ―City Program Helps Minnetonka Entrepreneurs‖.Minnetonka Patch. Retrieved April 1, 2011 from:

http://edis.ifas.ufl.edu/topic_series_bre


http://www.uwex.edu/ces/cced/downtowns/


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http://www.extension.umn.edu/businessretention/components/case-Grants_Pass.pdf












113

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http://minnetonka.patch.com/articles/minnetonka-planning-commission-permit-requests-jump-36-in-2010#photo-4805539

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, 2011.

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116

Appendix I— Background on Plainfield

HISTORY OF PLAINFIELD, NJ

The following is a history of Plainfield located on the official website of the city:

Plainfield is a city in Union County, New Jersey, in the United States. As of the

United States 2000 Census, the city population was 47,829. Plainfield was originally

formed as a township on April 5, 1847, from portions of Westfield Township, while the

area was still part of Essex County. On March 19, 1857, it became part of the newly-

created Union County. Plainfield was incorporated as a city by an Act of the New Jersey

Legislature on April 21, 1869, from portions of Plainfield Township, based on the results

of a referendum held that same day. The city and township coexisted until March 6,

1878, when Plainfield Township was dissolved and parts absorbed by Plainfield City and

the remainder becoming Fanwood Township (now known as Scotch Plains)

Nicknamed ―The Queen City‖, Plainfield was settled in 1684 by Quakers, and

incorporated as a city in 1869. A short train ride from New York City, Plainfield is a

bedroom suburb in the New York metropolitan area, it has become the urban center of

10 closely allied municipalities, with diversified industries, including printing and the

manufacture of chemicals, clothing, electronic equipment, and vehicular parts. Amongthe several 18th-century buildings remaining are a Friends' meetinghouse (1788), the

Martine house (1717), and the Nathaniel Drake House (1746), known as George

Washington's headquarters. Nearby Washington Rock is a prominent point of the

Watchung Mountains and is reputed to be the vantage point from which Washington

watched British troop movements.

www.plainfield.com/history

PROFILE OF THE CITY’S ECONOMIC LANDSCAPE

The following is adapted from information gathered from an unpublished

document provided by the Plainfield Office of Economic Development:

The completion of the New Jersey Central Railroad in the early 1800‘s

accelerated the growth of industry in the City; dramatically changing the land uses from



117

mostly agricultural to manufacturing and industrial. The New Jersey Central rail corridor

that runs through the City of Plainfield facilitated the development of key industrial uses

that included lumber, the manufacturing and assembly of truck and airplane parts, glue,

and plastics. During this time, the City of Plainfield served as a commercial hub for the

north-central New Jersey area.

As the industrial and financial sectors grew in New York and New Jersey, the

railroad also encouraged the flow of wealthy New Yorkers to Plainfield. The housing

boom that followed the migration of this population, included Victorian mansions and

summer homes. The City experienced a growth in skilled and educated labor, creating

employment opportunities in the construction industry and the service sector. The

banking industry also grew as the wealthy and middle class established permanent

residency in Plainfield. As the disposable income of this population grew, so did the

demand for additional retail and commercial activity, creating a thriving downtown, an

active cultural scene, and a bustling hotel industry. During the late 19 th and early 20th

Centuries, the City of Plainfield was known for having the highest number of millionaires

between New York City and Philadelphia.

The City‘s commercial base historically evolved around the rail corridor, with

manufacturing uses along the corridor to retail and service industries in the Central

Business District and smaller commercial corridors to the south and north of the rail line.

The Grant Avenue Train Station of the New Jersey Rail Road provided a gateway to a

thriving commercial corridor along Grant Avenue, going south to West Seventh Street.

Shops lined the streets of Grant and Plainfield Avenues. Black entrepreneurs and

professionals had establishments along these corridors, together with a large Jewish

population. Funeral Homes, pharmacies, eateries, clothing shops, doctors and

barbershops, were owned and operated by the Black resident population. The

commercial nodes of the west side began to decline after the civil unrest of the 1960‘s,

and the closure of the Grant and Clinton Avenue Train Stations. The downtown central

business district was known for the intensity of the shopping experience, which in turn,

provided a strong employment market for local residents.

By the 1980‘s, the City‘s retail mix began to change. Large department stores

began to close and/or relocate out of town, increasing the number of unemployed in the



119

With a median household income of $50,102 Plainfield falls well below the state

average of $70,347. Plainfield itself has a fair amount of income stratification, with

almost 30% of the population making less than $25,000 a year and almost 25% making

over $100,000. While in 2000 the unemployment rate was 5.5%, in 2009 it stood at

9.1%. While only 32.1% of the population above 25 has a high school degree, 76.3% of

the population has a high school degree or higher. The income stratification reflects the

spread of educational attainment.

Likely due to the recession, the net valuation taxable has been in decline since

2000 and now rests at $1,259,321,630, 2.08% below its 2000 value. In conjunction, the

median home value declined, and at $112, 863 it now stands at only half the median

state home value. Despite the crash in home values, however, Plainfield‘s value has

actually increased since 2000. Similarly, the local school tax levy and municipal budget

has grown since 2000 and in 2010 totaled $49,962,905. Taxable land value has held

steady since 2000. Though Plainfield‘s numbers may fall short of some of New Jersey‘s

wealthy communities, the city has exhibited relative stability throughout the past several

economically difficult years.

(Source: American Community Survey 2000-2009)



120

Appendix II— Demographic and Financial Data

Educational Attainment 2000, 2009

Educational Attainment Year 2000 Year 2009

Population 25 years and over 29,821 30,293

Less than 9th grade 12.3 13.3%

9th to 12th grade, no diploma 17.1 10.3%

High school graduate (includesequivalency) 28.4 32.1%

Some college, no degree 19.6 18.2%

Associate's degree 4.1 5.1%

Bachelor's degree 12.4 13.6%

Graduate or professional degree 5.66 7.3%

Percent high school graduate or higher 70.6 76.3%

Percent bachelor's degree or higher 18.5 20.9%

S1501: Educational Attainment

Data Set: 2005-2009 American Community Survey 5-Year Estimates

Survey: American Community Survey

Geographic Area: Plainfield city, New Jersey

Unemployment

Population Year 2000 Year 2009

In the Labor Force 69.30% 71.0%

Employed 69.30% 64.6%

Unemployed 5.50% 9.1%

Employment Trends in Plainfield, NJ

Comparison of Years 2000 and 2009American Community Survey Data



121

Employment by Occupation

U.S. Census Bureau

Occupation Year 2000 Total Year 2009 Total

Civilian employed population 16 years and over 22,997 22,965

Management, professional, and related occupations: 5,518 6,127

Management, business, and financial occupations: 2,406 2,472

Management occupations 1,497 1,663

Business and financial operations occupations 909 809

Professional and related occupations: 3,112 3,655

Computer and mathematical occupations 377 506

Architecture and engineering occupations 194 107

Life, physical, and social science occupations 153 157

Community and social services occupations 317 711Legal occupations 107 136

Education, training, and library occupations 951 1,105Arts, design, entertainment, sports, and media

occupations 378 236

Healthcare practitioner and technical occupations: 635 697Health diagnosing and treating practitioners and other

technical occupations 385 405

Health technologists and technicians 250 292

Service occupations: 4,059 4,328

Healthcare support occupations 741 777

Protective service occupations: 501 593Food preparation and serving related occupations 880 885Building and grounds cleaning and maintenance

occupations 1,376 1,440

Personal care and service occupations 561 633

Sales and office occupations: 6,272 5,758

Sales and related occupations 1,984 2,180

Office and administrative support occupations 4,288 3,578

Farming, fishing, and forestry occupations 33 0Construction, extraction, maintenance, and repairoccupations: 1,935 2,406

Construction and extraction occupations 932 1,827Installation, maintenance, and repair occupations 1,003 579

Production, transportation, and material moving occupations: 5,180 4,346

Production occupations 2,958 2,233

Transportation and material moving occupations: 2,222 2,113

Motor vehicle operators 928 852

Material moving workers 1,192 1,141



122

Surrounding Municipality Population Characteristics

Municipality2009 MedianHousehold

Income

%Hispanic

RenterOccupied

2009Pop

2000Pop

% PopChange

Scotch Plains 101,702 5.4 18.3 22,821 22,732 0.39

Fanwood 115,382 4.5 6.7 7,081 7,174 -1.3

Dunellen 63667 34.7 34.9 6,940 6,823 1.71

Edison 83,891 8.5 35.9 98,996 97687 1.34

South Plainfield 89,573 12.1 14.7 22,569 21,810 3.48

Piscataway 85,157 10.6 30.6 52,112 50,482 3.23

Green Brook 115,549 8.1 4.8 6,796 5,654 20.2

North Plainfield 64,492 43.6 39 21,315 21,103 1

Plainfield 501,025 32.6 48.7 46358 47,829 -3.08

Watchung 63,667 28.9 28.9 6,245 5,613 11.26

Demographic and Fiscal Data for Surrounding CitiesLocated using data from the American CommunitySurvey 2009



123

Surrounding Municipality Fiscal Characteristics

MunicipalityTotal School Taxes

Levied FY 2011Total Tax Levy FY

2011New Value Taxable

FY 2011

TotalRevenues FY

2005

ScotchPlains $58,234,979.61 $89,468,777.24 $994,444,787.00 $20,825,522

Fanwood $17,340,244.03 $27,866,108.17 $229,072,651.00 $7,276,220

Dunellen $9,484,197.00 $16,357,788.14 $144,803,169.00 $5,659,840

Edison $181,923,906.00 $309,661,353.46 $7,305,565,860.00 $97,354,122

SouthPlainfield

$39,963,937.87 $69,781,231.27 $1,427,902,681.00 $22,312,445

Piscataway $79,796,204.00 $133,324,693.90 $2,229,034,487.00 $39,763,822

Green Brook $20,456,989.00 $31,585,409.04 $1,472,516,839.00 $6,316,876

NorthPlainfield

$27,697,968.50 $49,467,266.82 $1,784,013,785.00 $15,887,755

Plainfield $21,848,819 $84,972,544.90 $1,259,321,630.00 $61,592,893

Watchung $16,992,150.80 $30,361,529.34 $1,580,694,587.00 $11,300,268

Department of Community Affairs, NJ 2011



124

Industry Employment TrendsData for 2007, 2002, and 1997

Number of Establishments in Each Industry

YEAR 1997 2002 2007Industry description

Manufacturing 42 32 23

Retail trade 122 119 125

Information N/A 10 8

Real estate and rental and leasing 31 29 30

Professional, scientific, and technical services 40 44 44

Administrative and Support and Waste Mang and Remediation Srvs 31 28 41

Educational services 10 10 7

Health care and social assistance 69 102 100

Arts, entertainment, and recreation 1 5 5Accommodation and food services 46 47 70

Other services (except public administration) 48 54 83

Employer Sales, Shipments, Receipts, Revenue, orBusiness Done ($1000)

YEAR 1997 2002 2007

Industry description

Manufacturing 154,870 117,428 82,000Retail trade 136,265 170,076 169,259

Information N/A N N

Real estate and rental and leasing 18,422 17,587 24,921

Professional, scientific, and technical services 21,463 18,925 21,973Administrative and Support and Waste Mang and RemediationSrvs 37,464 10,248 32,291

Educational services 2,084 1,730 D

Health care and social assistance 53,262 231,713 264,037

Arts, entertainment, and recreation D D D

Accommodation and food services D 24,570 29,638

Other services (except public administration) 13,810 32,053 24,854

YEAR 1997 2002 2007



125

Number of Paid Employees

Industry description 1997 2002 2007

Manufacturing 1,128 936 600

Retail trade 813 866 685

Information N/A e e

Real estate and rental and leasing 123 97 95

Professional, scientific, and technical services 247 241 220

Administrative and Support and Waste Mang and Remediation Srvs 1,620 245 812

Educational services 49 56 b

Health care and social assistance 668 3,121 2947

Arts, entertainment, and recreation a a a

Accommodation and food services f 561 595

Other services (except public administration) 192 269 341

YEAR 1997 2002 2007

Annual Payroll

Industry description 1997 2002 2007

Manufacturing 30,926 29,162 20,747

Retail trade 15,987 18,009 17,296

Information D D

Real estate and rental and leasing 2,791 2,306 2,448

Professional, scientific, and technical services 8,742 9,842 10,730Administrative and Support and Waste Mang and RemediationSrvs 22,805 5,700 15,844

Educational services 808 788 D

Health care and social assistance 23,191 109,377122,34

0

Arts, entertainment, and recreation D D D

Accommodation and food services D 6,319 7,956

Other services (except public administration) 4,452 6,470 8,133

Industry employment data, as foundthrough the U.S. Census Bureau



126

Income Distribution Trends Households

Subject Households 2000 Households 2009

Total 15,149 16,389

Less than $10,000 9 11.8%

$10,000 to $14,999 5.9 5.7%

$15,000 to $24,999 11.6 10.1%

$25,000 to $34,999 10.5 9.8%

$35,000 to $49,999 16.3 12.4%

$50,000 to $74,999 18.9 16.9%

$75,000 to $99,999 12.2 11.9%

$100,000 to $149,999 10.9 13.7%

$150,000 to $199,999 3.1 3.7%

$200,000 or more 1.7 3.8%


Mean income (dollars) N/A 66,997

Income Distribution Trends Families

Subject Families 2000 Families 2009

Total 11,002 10,242

Less than $10,000 6.8 7.4%

$10,000 to $14,999 4.9 3.7%

$15,000 to $24,999 11 9.0%

$25,000 to $34,999 10.9 10.0%

$35,000 to $49,999 15.7 11.9%

$50,000 to $74,999 20.2 17.5%

$75,000 to $99,999 13.6 15.5%

$100,000 to $149,999 11.9 15.2%

$150,000 to $199,999 3.3 5.5%

$200,000 or more 1.8 4.4%





127

Income Distribution Trends Married-couple

Subject Married-couple Families 2000 Married-couple Families 2009

Total 6,004 5,459

Less than $10,000 2 2.3%

$10,000 to $14,999 1.8 2.5%$15,000 to $24,999 6.1 5.9%

$25,000 to $34,999 7.6 7.0%

$35,000 to $49,999 13.3 8.9%

$50,000 to $74,999 25.5 20.6%

$75,000 to $99,999 18.2 17.3%

$100,000 to $149,999 18 19.4%

$150,000 to $199,999 5.2 9.1%

$200,000 or more 2.3 7.1%


Mean income (dollars) N/A N/A

Income Distribution Trends Nonfamily

Subject Nonfamily Households 2000 Nonfamily Households 2009

Total 4,147 6,147

Less than $10,000 17.6 19.8%

$10,000 to $14,999 12 10.6%

$15,000 to $24,999 16.7 13.3%$25,000 to $34,999 11.9 10.8%

$35,000 to $49,999 16.2 14.1%

$50,000 to $74,999 11.9 15.6%

$75,000 to $99,999 5.7 6.0%

$100,000 to $149,999 5.3 6.4%

$150,000 to $199,999 1.5 0.6%

$200,000 or more 1 2.9%



S1901: Income in the Past 12 MonthsData Set: 1999/2000 and 2005-2009 American Community Survey 5-Year EstimatesSurvey: American Community SurveyGeographic Area: Plainfield city, Union County, New Jersey



128

Employment by Industry

Subject Total

Medianearnings(dollars)

Civilian employed population 16 years andover 22,965 $30,934

Agriculture, forestry, fishing and hunting,and mining: 46 $29,483

Agriculture, forestry, fishing and hunting 29 -

Mining, quarrying, and oil and gasextraction 17 -

Construction 1,922 $21,941

Manufacturing 3,352 $25,023

Wholesale trade 875 $34,750

Retail trade 2,198 $21,732

Transportation and warehousing, andutilities: 1,378 $32,167

Transportation and warehousing 1,296 $30,571

Utilities 82 $58,214

Information 890 $42,411

Finance and insurance, and real estate andrental and leasing: 1,623 $45,227

Finance and insurance 1,164 $46,859

Real estate and rental and leasing 459 $31,172

Professional, scientific, and management,and administrative and waste managementservices: 2,254 $27,030

Professional, scientific, and technicalservices 799 $50,272

Management of companies and enterprises 95 $22,199Administrative and support and wastemanagement services 1,360 $22,962

Educational services, and health care andsocial assistance: 4,885 $39,163

Educational services 1,841 $48,735

Health care and social assistance 3,044 $33,017

Arts, entertainment, and recreation, andaccommodation and food services: 1,529 $19,882

Arts, entertainment, and recreation 387 $20,781

Accommodation and food services 1,142 $19,530Other services, except public

administration 914 $25,556Public administration 1,099 $53,223

S2403: Industry by Sex and Median Earnings in the Past 12 Months for the Civilian EmployedPopulation

Data Set: 2005-2009 American Community Survey 5-Year EstimatesSurvey: American Community Survey



129

Agency Finance Survey FY 2000 Data (F-33)School District: PLAINFIELD CITY, UNION COUNTY, NewJersey [3413140

Total Local Revenue

Property Tax $19,130,000

General Sales Tax $0

Public Utility Tax $0

Individual & Corp. Income Taxes $0

All Other Taxes $0

Revenue - Other School Systems $215,000

Cities and Counties $0

School Lunch Revenues $721,000

Tuition Fees - Pupils and Parents $0

Transportation Fees - Pupils and Parents $0

Interest Earnings $0

Textbook Sales and Rentals $0

Student Activity Receipts $0Other Sales and Service Rev. $0

Student Fees, Non-Specified $0

Miscellaneous Other Local Rev. $1,026,000

Special Processing $0

Total State Revenue

General Formula Assistance $34,782,000

Special Education Programs $3,574,000

Transportation Programs $1,145,000

Staff Improvement Programs $0

Compensat. and Basic Skills Prog. $12,215,000

Vocational Education Programs $0

Cap. Outlay and Debt Serv. Prog. $1,424,000

Bilingual Education Programs $542,000

Gifted and Talented Programs $0

School Lunch Programs $103,000

All Other Rev.- State Sources $1,885,000

State Pay. for LEA Employee Benefits $3,611,000

Other State Payments $0

Non-Specified $0

Federal Aid Through State

Federal Chapter 1 Revenue $1,268,000

Children with Disabilities $455,000

Child Nutrition Act $1,658,000

Eisenhower Math and Science $50,000

Drug-Free Schools $63,000

Chapter 2 Block Grants $230,000

Vocational Education $69,000

All Other Fed. Aid Through State $1,251,000

Nonspecified $0

Impact Aid (PL 815 and 874) $23,000

Bilingual Education $0

Native American (Ind.) Educ. $0

All Other Direct Federal Aid $0



130

TOTAL EXPENDITURES

Instruction Expenditures - Total $44,835,000

Instruction Expenditures - Salary $31,480,000

Instruction Expenditures - Employee Benefits $7,797,000

Support Service ExpenditureTotal - Students-Support Service Expenditure $6,539,000

Total - Instruct. Staff-Support Service Expenditure $2,664,000

Total - Gen. Admin.-Support Service Expenditure $2,429,000

Total - Sch. Admin.-Support Service Expenditure $4,326,000

Total - Ops. & Mainten.-Support Service Expenditure $9,511,000

Total - Student Transp.-Support Service Expenditure $2,909,000

Total - Other Supp. Serv.-Support Service Expenditure $2,343,000

Non-Specified -Support Service Expenditure $0

Total Salary -Support Service Expenditure $48,671,000

Salary - Students-Support Service Expenditure $4,482,000

Salary - Instruct. Staff-Support Service Expenditure $1,332,000

Salary - General Admin.-Support Service Expenditure $496,000Salary - School Admin.-Support Service Expenditure $3,094,000

Salary - Ops. & Mainten.-Support Service Expenditure $4,168,000

Salary - Student Transp.-Support Service Expenditure $596,000

Salary - Other Supp. Serv.-Support Service Expenditure $1,449,000

Total Employee Benefits -Support Service Expenditure $12,956,000

Employee Benefits - Students-Support Service Expenditure $1,110,000

Employee Benefits - Instruction-Support Service Expenditure $330,000

Employee Benefits - Gen. Adm.-Support Service Expenditure $130,000

Employee Benefits - Sch. Adm.-Support Service Expenditure $809,000

Employee Benefits - Ops. & Maint.-Support Service Expenditure $1,149,000

Employee Benefits - Sch. Trans.-Support Service Expenditure $164,000

Employee Benefits - Other Supp. Serv.-Support Service Expenditure $400,000

Non instructional Current Spending

Food Services - Non Instructional $2,364,000

Enterprise Operations - Non Instructional $191,000

Other - Non Instructional $0

Salary - Food Services - Non-Instruct. $942,000

Employee Benefits - Food Services - Non-Instruct $132,000

Employee Benefits - Enterp. Oper.- Non-Instruct. $10,000

Interest on School System Indebtedness $1,556,000

Current Spending - Private Schools $1,614,000

Current Spending - Public Charter Schools $758,000



131

Other Expenditures

Non EL-SEC

Community Services - Non EL-SEC $42,000

Adult Education - Non EL-SEC $531,000

Other Expenditures - Non EL-SEC $129,000

Capital Outlay

Construction - Capital Outlay $13,741,000

Instructional Equipment - Capital Outlay $147,000

Other Equipment - Capital Outlay $339,000

Land & Existing Structures - Capital Outlay $0

Payments

Payments to Local Governments $0

Payments to State Governments $1,011,000

Payments to Other School Systems $1,677,000

Non-specified - Equipment Expenditures $0

Debt

Long Term Debt - Outstanding Beginning of FY $37,397,000

Long Term Debt - Issued During FY $0

Long Term Debt - Retired During FY $958,000Long Term Debt - Outstanding at End of FY $36,438,000

Short Term Debt - Outstanding Beginning of FY $0

Short Term Debt - Outstanding at End of FY $0

Debt Service Funds $2,315,000

Bond Funds $12,444,000

Other Funds $4,467,000

Common Core of Data, Local Education Agency Finance Survey FY 2000 Data(F-33)



133

New Jersey Division of Local Government ServicesMunicipal Information Sheet- CY 2011Gathered from the NJ Department of Community Affairs

Net County Taxes Apportioned $12,645,094

Less Municipal Budget State Aid

Net County Taxes Less Municipal BudgetState Aid $12,645,094

County Library Tax

Local Health Service Taxes (N.J.S.A.26:3A2-19)

County Open Space Tax $515,726

Total County Taxes $13,160,821

Local District School $21,848,819

Regional, Consolidated, & Joint SchoolBudget

Local District School Tax in Municipal Budget

Total School Taxes Levied $21,848,819

Local Municipal Purposes $49,962,905

Municipal Open Space

Total Municipal Taxes Levied $49,962,905

Total Tax Levy $84,972,545

Net Value Taxable $1,259,321,630General Tax Rate per $100 Assessed Value $7

CY 2010 Senior Citizens Reimbursement byState (P.L 1976, c.73) $121,684

CY 2010 Veterans Reimbursement by State(P.L 1976, c.73) $142,000

Administrative Fee $5,274

Total Revenue $268,957

Regional Efficiency Aid Program - CreditAmount Billed

Debt Statement Equalized Valuations

2008 $3,615,956,750

2009 $3,411,365,145

2010 $3,039,311,173

3 Year Average Equalized Valuation $3,355,544,356

2011 Minimum Library Appropriation(N.J.S.A. 40:54-8)

$1,014,768.68



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Appendix III— Additional Background Cases

LOCAL AND COMMUNITY ECONOMIC DEVELOPMENT

Injections of capital are essential to businesses seeking to start or expand.

However, in today‘s financial industry, traditional banks are often wary to make the types

of loans which businesses require to grow. Thankfully, microfinance organizations,

community development loan funds (CDLFs), and municipally operated revolving

business loan funds are increasingly stepping in to fill this gap.This section provides an introduction to financial concepts such as community

development lending, financial leverage, loan loss reserves, and gap financing. It then

explores examples of 3 different loan programs in cities which have faced problems

similar to Plainfield, and shows how these programs enable cities to reap benefits which

are exponential relative to the investments they require. There is also a discussion of

how programs to raise awareness of the Earned Income Tax Credit (EITC) can help low-

to-moderate income individuals realize immediate wealth gains, and suggestions for the

promotion of alternatives to the ubiquitous ―tax preparation‖ businesses currently found

in Plainfield. Finally, there is a discussion of essential ―best practices‖ for the startup and

operation of CDLFs, based on the learning experiences of CDLFs across the country.

AN INTRODUCTION TO COMMUNITY DEVELOPMENT LENDING

The standby tool of communities seeking to encourage business growth has long

been the use of tax abatements to attract new businesses. However, recent studies

have demonstrated that up to 80% of business growth in redeveloping communities is

the result of the expansion of existing businesses.i It is thus in the interest of Plainfield to

identify the barriers to the growth of their existing entrepreneurs, and to eliminate those

barriers.



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Injections of capital are essential to businesses seeking to start or expand.

Whether a business is a non-profit organization or a factory, these organizations must

spend money to make money: be it expanding/improving infrastructure, hiring new

employees, or updating technology. The practice of ―bootstrapping‖—only growing a

business based on the personal or business capital available to the owner(s)—can be

time consuming and cumbersome at best—or at worst, impossible.

In today‘s financial industry, traditional banks are often wary to make the types of

loans which businesses require to grow. In this age of bank consolidation and ―too big to

fail‖ financial empires, the locally based banks of years past have largely vanished. They

have taken with them bank owners who had a vested interest in improving their local

community, and the due diligence that such banks devoted to determining business

creditworthiness. Gone are the days when businesses sat down with local bank owners

to discuss business plans and financial projections during the loan application process.

All too often, the ―due diligence‖ of banks today relies solely on obtaining a three digit

credit score based on the personal finances of a business owner, without any

consideration of the business itself.ii

In this deeply depersonalized financial landscape, low risk loans with the potential

to create immediate wealth gains are too often impossible. This issue is exacerbated

among recent immigrants who have not resided in the country long enough to have a

credit history deemed loan-worthy. Thankfully, microfinance organizations, community

development loan funds (CDLFs), and municipally operated revolving business loan

funds are increasingly stepping in to fill this gap.

THE POWER OF LEVERAGE

While loan programs are not without cost to the municipality, it is difficult to

imagine any investment which could provide a more favorable cost-to-benefit ratio.

Traditional financial institutions are typically ―leveraged‖ at a ratio of 10-to-1: meaning

that for every $1 that a bank holds in reserve, they are able to lend $10. These ratios

have a long history of success in the private financial market, and are typically more than

adequate to keep financial institutions solvent through all but the worst of crises (during



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GAP FINANCING AND LOAN LOSS RESERVES

The power of leverage can be increased even further if the city participates in

―gap financing‖: working with other financial institutions to focus on the execution of

financing options which are already on the verge of viability. For instance, many

examples exist of businesses which are able to secure some of the financing which they

require to expand, but the available funds fall short of the ―critical mass‖ needed to

reduce their costs, increase productivity and efficiency, and ultimately bring greater

wealth to the city. However, many otherwise impossible deals can be made viable by

leveraging relatively small amounts of capital.

For example, a not-implausible deal could entail a business owner who wishes to

renovate and purchase cost-reducing equipment at a cost of $100,000; but is unable to

secure a loan from a traditional bank without a 20% down payment of $20,000. In this

instance, the city could leverage $2,000 of their capital base into a $20,000 loan, and

thus make a $100,000 deal possible. Plainfield could also provide a ―loan loss reserve‖

as a way of guaranteeing a portion of loans made by profit-motivated financial actors. In

other words, the city could agree with a private lender to minimize the risk to that lender

by guaranteeing a percentage of a particular loan amount.

To offer a variation of the example above: imagine a business seeking a $100,000

loan, but the deal is deemed too risky by a traditional bank. The city could reduce the

bank‘s risk by offering a 7% loan loss reserve of $7,000—money which is set aside to

pay the bank in the event of default. CDLFs also typically grant private lenders ―first

lien‖—meaning that the CDLF will only be repaid after the bank has recovered all of their

capital. This type of risk mitigation by cities is often successful in making banks

reconsider potential loans. The beauty of utilizing loan loss reserves is that if adequate

due diligence has been done on the borrower, the risk of default is remarkably low, and

the most likely scenario is that the $7,000 set aside by the city as a loan loss reserve will

never move. Upon repayment, that capital can then be used to guarantee other loans.

What follows is a breakdown of the financial products offered in three American

cities which have faced problems similar to those found in Plainfield. In addition, this

paper discusses both municipal and national programs to publicize the ability of citizens



138

to enjoy the benefits of the Earned Income Tax Credit. Finally, the paper concludes with

a review of ―best practices‖ based on the experience of CDLFs across the nation.

CASE STUDY: MINNEAPOLIS

Minneapolis is on the cutting edge of small business financing solutions. What

follows are the highlights of their financing products which would be most relevant to the

city of Plainfield. The statistics and data points referenced in the following case study

were gathered from the website of the Department of Community Planning and

Economic Development of the city of Minneapolis, to be found at the following URL:

http://www.ci.minneapolis.mn.us/cped/index.asp.iv

ALTERNATIVE FINANCING PROGRAM

This program subsidizes bank loans to small businesses for equipment, and/or to

make building improvements. A private lender provides half of the loan amount with a

market rate loan, and the city provides the other half with a second loan at a flat 2%

interest rate. The City also charges an ―origination fee‖ of 1% of their principal amount.

As one of their criteria for loan approval, the City weighs the extent to which the business

plans to hire local residents to execute the anticipated improvements.

BUSINESS DEVELOPMENT FUND

This program provides loans to local businesses for ―redevelopment projects that

have a potential for the creation of jobs that will be filled by Minneapolis residents‖.

Businesses can also earn ―prepayment credits‖ for each local resident who is hired and

retained for at least one year. These loans are targeted towards businesses which will

create jobs that pay ―$12 to $16 per hour, plus benefits‖. Loans cannot exceed $75,000,

or 50% of the total project costs (whichever is less).

TWO PERCENT LOAN

This program provides for the subsidization of bank loans to small businesses to

―purchase equipment and/or to make building improvements‖. A private lender provides



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half of the loan at market rate, and the city provides the other half at a flat 2% interest

rate. In order to be eligible for a Two Percent Loan, an applicant must demonstrate

their project will ―benefit low-to-moderate income persons by creating jobs or improving

services‖. The applicant must also agree to use contractors licensed within the City.

The city website provides a list of improvements which qualify for financing under

this loan program. Emphasis is given to infrastructure (such as lighting, plumbing, or

electrical work) and to exterior improvements (such as paint, replacement of doorways or

windows, and exterior signs).

Loans are provided in amounts up $50,000.

TWO PERCENT COMMERCIAL CORRIDOR LOANS AND TWO PERCENT COMMERCIAL NODES

LOANS

These programs are virtually identical to the Two Percent Loan described above.

However, only projects located within one of the City‘s designated ―Commercial

Corridors‖ or ―Commercial Nodes‖ are eligible. A private lender provides half of the loan

at market rate, and the city provides the other half at a flat 2% interest rate. Loans are

provided for amounts up to $75,000, and a list of eligible improvements is provided

online.

WORKING CAPITAL GUARANTEE PROGRAM

This program provides a loan loss reserve guarantee on private bank loans to

small businesses, in order to minimize bank risk and make nearly-viable deals a reality.

Loans must be utilized by businesses as ―working capital‖. (The technical definition of

―working capital‖ is the liquid assets used by a business to pay their current liabilities;

such capital is essential to businesses seeking to expand). In conjunction with this

program, technical assistance (mentoring) for business owners is available, and may be

a requirement of loan guarantee approval. Borrowers must ―make efforts‖ to hire city

residents by working with the City‘s Workforce Coordinator.

Priority is given to businesses which ―benefit low-to-moderate income individuals

by creating jobs‖, which are ―rehabilitating or reusing a vacant structure‖, and ―whose

owner(s) have a personal net worth of less than $1 million‖. There is no limit on the size



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Loans are available to both non-profit and for-profit companies, and size of the loans

guaranteed range from $1,000 to $250,000. Since the city matches half of a 3%-7%

reserve for these loans, this means that the loan loss reserve funds guaranteed by the

city theoretically range from $15 to $8,750. A short list of business types are excluded

from eligibility, including taverns, liquor stores, and gun shops.

SECOND MORTGAGE PROGRAM

This program offers below-market rate loans to Milwaukee businesses seeking to

expand. The city finances 25% to 40% of costs, or up to $500,000 of the total project.

The remaining 60% to 75% of the loan balance is provided by a combination of the

borrower and a private lender. The city website lists a broad range of eligible uses which

entail virtually any expenses an expanding business could incur; including both hard and

soft construction costs, renovation, and working capital.

The program requires a minimum of 10% borrower down payment, and the length

of the loan matches the terms offered by the private lender. Interest rates are fixed, and

are set according to US Treasury Notes of similar terms at the time of the loan. As of

this writing, the interest rate listed on the city website was 5.25%. A short list of business

types are excluded from eligibility, including taverns, liquor stores, and gun shops.

EITC AWARENESS

The Earned Income Tax Credit is a fully refundable tax credit which is available to

individuals and families whose earnings fall below a predetermined level. Traditional tax

deductions reduce the amount of taxable income, and cannot offer taxpayers value

greater than their total tax liability. In contrast, EITCs result in a one-to-one reduction of

the total tax bill. If the amount of the credit exceeds the amount of the tax bill, the

taxpayer receives a full refund.

The refund checks for which taxpayers qualify are often formidable: for example,

the maximum refund for a couple with two children is $5,036. (15) This figure can often

represent a notable percentage of a taxpayer‘s total annual income.

Unfortunately, all too many people are unaware of their ability to cash in on this

free pool of available capital. This problem is exacerbated among recent immigrants



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who may lack the linguistic ability to optimally navigate the tax code. The implications are

clear: by raising awareness of the EITC, cities have the ability to immediately increase

the spending capacity of low income persons. As such, many municipalities have

undertaken ―Awareness Campaigns‖ which publicize their citizens‘ ability to enjoy the

benefits of the EITC, and the IRS sponsors ―EITC Awareness Day‖.

“TRIED AND TRUE” EITC AWARENESS GUIDELINES FROM THE IRS

The IRS recommends beginning an awareness campaign by forming a

partnership among interested actors in the city, including but not limited to: local

government officials, faith based organizations, school boards, major employers, and

any businesses within the city offering tax preparation. The partnership should work

together to speak to their constituents and distribute literature to raise awareness of the

EITC.

Many of the recommended avenues for raising this awareness entail little or no

cost to the municipality, such as: recorded messages in English and Spanish that play

while citizens are ―on hold‖ while calling any entities within the partnership; letters to local

newspapers (both English and Spanish language); posters in waiting areas and bus

stops; a banner on the municipality‘s existing website; or requesting that local

businesses display posters. Examples of such materials (web banners, short

essays/letters, etc) are available at the IRS website.

TAX PREPARATION

It is clear that Plainfield abounds with ―Tax Preparation‖ centers, most of whom

likely help themselves to a sizable percentage of the tax refunds on returns they prepare,

in exchange for advance payment of those funds. Viable alternatives exist for these

options.

The IRS currently offers a staff of over 400 volunteers nationwide to assist Low-to-

Moderate income individuals in the preparation of their tax returns, and interpreters are

available for citizens with language barriers. While the nearest centers to Plainfield are

located in Edison and Mountainside, a publicize campaign could enable those with

automobile access to make this trip themselves, and research should be conducted into



143

the viability of a shuttle service to transport others. The IRS also offers free software to

assist in self-filing of taxes for all individuals who make less than $58,000 per year.

BEST PRACTICES FOR STARTING AND OPERATING A CDLF

In many cases, the practices of CDLFs and municipal Revolving Business Loan

Funds are so cutting edge that inadequate research has been funded to determine what

separates successful programs from the less-successful. However, enough knowledge

exists to determine a handful of guidelines for essential best practices.

COMMUNITY INVOLVEMENT

A recurring theme when reviewing the learning experiences of existing CDLFs is

that successful programs prioritize community involvement. It is crucial to reach out to

residents—especially business owners and potential loan recipients—during the

development of lending programs; including loan terms, loan durations, interest rates,

and overall lending strategy. As Kevin Riba of CRF points out, it is crucial to determine if

the obstacle for business growth and new development is the result of ―access to capital,

or cost of capital‖ and design a loan program accordingly.

It is equally important to reach out to the other actors which will be essential to

process of issuing community development loans. This is particularly true of any for-

profit banks whose assistance the municipality hopes to enlist; but also includes real

estate developers, and any foundations or other CDFIs with whom the fund hopes to

coordinate efforts. Such preparatory work is crucial in ensuring that the city has ―buy in‖

from all the necessary actors, and that the city does not do unnecessary work by

developing financial products which fail to address existing problems. By identifying

parties with the goal of improving the community, cities can ensure that they ―aren‘t just

leveraging capital, [they‘re] leveraging people and partnerships.‖

TECHNICAL ASSISTANCE

Multiple sources pointed to the crucial need for technical assistance for

entrepreneurs. Although SEA identifies this element of CDLF practice as a ―cost center‖



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(defined as ―a division which adds to the cost of an organization, but only indirectly adds

to its profit‖) all resources on CDLFs which discuss best practices ensure that the

providing of this service is mandatory to a successful CDLF. As SEA points out, such

assistance is clearly linked to ―increasing the chances of business success and reducing

default rates.‖

In addition, technical assistance serves the secondary purpose of marketing the

CDLF by increasing community awareness of their presence. Programs which seek to

increase financial literacy also hold the potential to help local residents realize immediate

wealth gains.

While 90% of new businesses fail, anecdotal evidence suggests that this

percentage is reduced dramatically when one only considers entrepreneurs who started

by completing sound business plans, market analyses, and cash flow analyses; and then

successfully incorporated input from business experts into these plans. Thus, sound

technical assistance is crucial in helping to weed out entrepreneurs who lack proper

foresight, in honing the vision of those who do, and ensuring a low default rate for the

CDLF.

BUSINESS FRIENDLY ENVIRONMENT

Kevin Riba of CRF emphasizes the importance of maintaining a ―business-friendly

environment‖, but stresses that there is much more to this then simply maintaining

favorable tax rates. The unfortunate reality is that within the complex network of parties

whose assistance is required to bring a CDLF deal to fruition, there is the potential for

relationships which have been ―tainted‖ in the past for any of a variety of reasons. A

business-friendly attitude which emphasizes common ground and open lines of

communication can help of all these players realize their common interests: whether

their focus is to create personal profit, or to expand the tax base of the municipality.

To this end, Mr. Riba recommends that the city employ ―advocates‖ to assist

entrepreneurs with adhering to local business regulations; to impart a more sound

understanding of the financing options available to them, and to provide businesses with

assistance in strategic decisions after financing has been secured (21). It is also helpful

if, at the start of a given project, a business or developer is given a ―point person‖ within



145

the city government who they can count on for assistance. Mr. Riba also recommends

that the municipalities do whatever they can to streamline the approval of loans and

permits for businesses. Such efficiency and focus is essential in preventing well-

intentioned individuals from being forced to pursue progress within the city through

multiple redundant phone calls, multiple visits to a variety of offices, the filling out of

redundant paperwork, and any of a variety of other ―red tape‖ obstacles to development

and business growth.

LENDING PRACTICES

While several of the loan programs discussed thus far offer below-market interest

rates, the Council of Development Finance Agencies (CDFA) urges for market rate

interest; as a result of their belief that borrowers tend to prefer flexibility of loan terms

over flexibility of interest rates. (22) Determining the capacity of a CDLF to offer one or

both of these terms is best determined by independent financial experts, and the

partners (such as foundations and banks) with which the CDLF will work; determining the

relative benefit of each approach to potential borrowers is best determined by the

community itself.

While community input is essential in determining loan duration, certain

precedents exist for various types of loans. In general, loans for working capital are

relatively short (3 to 5 years); loan terms for equipment are mid-range (approximately 10

years); and permanent real estate loans are often the longest (15 to 20 years).

Development loans which provide operating capital during the construction phase

of a new development are much shorter and more complex; such loans often last two

years or less, have high interest rates to compensate for their formidable risk, and are

―interest only‖—meaning that loan payments only reflect the interest accumulated, and

the loan principal is due in a lump sum at the maturity of the loan.

It goes without saying that one of the keys to CDLF success is carrying out due

diligence on borrowers with care. While one of the advantages of a CDLF is their ability

to consider borrowers on a case-by-case basis, CDFA suggests discussing the following

criteria for potential borrowers:



146

Business plan

Business experience and management information

Credit history and financial statements

Sufficient collateral to repay bank and RLF funding

Other personal or corporate guarantees on the project, and

Cash flow projections. (22)

Of course, borrowers who are capable of providing ample documentation in all of

these areas are most likely capable of securing a loan from a traditional bank, and would

thus not be an ideal recipient of CDLF capital. However, all of these factors should still

be considered carefully; and any areas where a borrower is lacking should be corrected

if possible, and soundly justified if not.

ADMINISTRATION AND MANAGEMENT

CDLF management can be handled internally by the municipal government, or

outsourced to an external CDFI (Community Development Financial Institution). While

locating and hiring adequately skilled personnel for internal fund management can

present a challenge to municipalities in smaller markets, employing fund managers ―in

house‖ offers the advantages of a more intimate understanding of local markets, and

greater availability of managers to both the City administration and community members.

Regardless of whether funds are managed internally or externally, it is crucial for

the managers of CDLFs to maintain transparency, including ―clear underwriting

guidelines‖ and the maintenance of open lines of communication with the community; to

this latter end, regular scheduled ―office hours‖ (conducive to walk -ins) are far more

successful in keeping in touch with community then managers who only offer meetings

which take place ―by appointment only‖. In addition, it is important for successful CDLFs

to work hard to minimize bureaucratic ―hoops‖ for borrowers by streamlining their lendingprocess and paperwork to the extent possible.

External review of loans and CDLF practices is also crucial. SEA also

recommends an ―advisory group‖ for loan funds, consisting of ―independent stakeholders

with relevant expertise‖ such as ―bankers, small business owners, and technical



147

assistance providers‖. External oversight and ―on-going review‖ is also crucial to ensure

that political influence is avoided. CDFA suggests that such oversight could also be the

task of an independent board of directors, which would include ―legal, private lending,

business, community development, and local government professionals‖.

STARTING A REVOLVING LOAN FUND

CDFA offers the following guidelines to those setting a CDLF or Revolving Loan Fund in

motion.

1. Research existing RLF‘s and compile samples of application forms, program

guidelines, and other materials.

2. Invite lenders and potential borrowers to participate in the design process.3. Establish the purpose of the RLF. This should include a needs assessment.

4. Set the eligibility requirements for borrowers.

5. Determine the allowed uses of funds as well as prohibited uses.

6. Set a minimum and maximum amount for the loans.

7. Decide if the loans must be matched by existing equity or other sources of funds.

8. Determine the length of the loan term, which may vary based on the use of the

loan. For example, the term for a loan to purchase equipment may be based on

the life of the product while a loan for real estate may have a 15-year term.

9. Establish an application fee, origination fee, and policies regarding closing costs.

Define the default and delinquency terms.

10. Decide if the interest rate will be variable or fixed and whether the rate will vary

based on the project.

11. Develop the loan application form. Create a short pre-application form or checklist

to help borrowers determine if they are eligible.

12. Set up a committee to review loan applications.

13. Determine the administrative duties and staffing needs associated with the

program.

14. Promote the RLF and capitalize with funds from grants and individual donations.

15. Provide loans and technical assistance to borrowers.



i Holbrook, Don. (2007). The Little Black Book of Community Economic Development .Xlibris Corporation.

ii

Interview with David Scheck, former director of New Jersey Community Capital (2001-2008). December 9th, 2010.

iii Interview with Mr. Rohan Mathew, co-founder of The Intersect Fund; New Brunswick,NJ. March 11th, 2011.

iv Department of Community Planning and Economic Development of the City ofMinneapolis: http://www.ci.minneapolis.mn.us/cped/index.asp

v Statistics and specific data points cited in the case study of Milwaukee were gathered

from the website of the Milwaukee Economic Development Corporation, located at:

http://www.medconline.com/Home_Page.html. Information on the Earned Income Tax Credit programs was gathered from the website

of the Internal Revenue Service, and can be located through: http://www.eitc.irs.gov.

Further information on Revolving Loan Funds can be found in the following report issued

by the Social Enterprise Associates:

http://www.socialenterprise.net/assets/files/Soc%20Ent%20Assoc%20Findings-

Muni%20RLFs%5B1%5D.pdf

Additional information about Revolving Loan Funds can also be located at:

http://www cdfa net/cdfa/cdfaweb nsf/pages/rlffactsheet html

http://www.ci.minneapolis.mn.us/cped/index.asp

http://www.medconline.com/Home_Page.html

http://www.eitc.irs.gov/



http://www.eitc.irs.gov/

http://www.medconline.com/Home_Page.html

http://www.ci.minneapolis.mn.us/cped/index.asp

promoting the community and economic development of plainfield[1]

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