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Into to Community Economic Development
Into to Community Economic Development
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Into to Community Economic Development

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Intro to Community Economic Development: How to grow and retain jobs in your community

Intro to Community Economic Development: How to grow and retain jobs in your community

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  • 1. Protecting your community in hard times while preparing your  gy y p p gycommunity for the future Ohio CDC Association Ohio Conference of Community Development
  • 2.  Instructors I  Brian Higgins  Mark Barbash Sponsor Acknowledgement  Special Thanks to our Sponsors:   Ohio Department of Development (ODOD)  The Office of Housing and Community Partnerships (OHCP) through  the CDC Program of the Ohio Housing Trust Fund  PNC B k PNC Bank Housekeeping Amy Rosenthal, Ohio CDC Association
  • 3.  Around the room introductions  What is your name?  What you do?  Where you are from?  What is your experience with economic  development?   Who is your favorite Sweathog? Arnold, Juan, Vinnie, Mr. Kotter or Freddie?
  • 4.  History of  Community Economic   Hi   f  C i  E i Development (CED) Navigating CED: Who, what why, where,  when how, how much Doing the deal g The new Ohio Department of Development  Services (formerly ODOD) f l
  • 5.  There is none! When a community  was founded, people  opened a variety of  businesses to serve  the population. the population
  • 6.  Basic needs were the first economic   B i   d     h  fi   i generators  General Store / Farm Supply Store G l St  / F  S l  St  Market  Bar  Doctor  Church Market forces tended to dictate the success  of failure of these establishments.
  • 7.  Cities grew on the back of large industries f  Ports  Manufacturing  Mining  Rail
  • 8.  These larges industries populated our  neighborhoods and created a consumer base  for our neighborhood retail stores. f hb h d l
  • 9.  Over the past 65 years, America has spread  out…some call it sprawl.  The Interstate Highway System allows jobs  h h ll b and people to relocate farther from the urban  core…and further from the jobs df h f h b And then the jobs started moving away from  the urban core.  h b
  • 10.  Leaving us first  with vacant  i h    factories
  • 11.  Then with  vacant retail   il
  • 12.  In small towns that are often dependant on one  I   ll t  th t    ft  d d t      or two major employers, relocation and closure  can devastate the community. can devastate the community An excellent modern example is the effect that  DHL’s departure had on Wilmington.  City of 12,000 people  7,000 jobs cut b  20% of local businesses closed  DHL employment came from 27 area counties
  • 13.  Stage 1: 1940’s – 1980’s: Began in the  southern states led by the primary utilities Why? h Partnerships dominated primarily by the  private sector Stage 2: 1980’s – 2000’s: Utility cutbacks  forced the public sector to take a larger role f d h bl k l l Stage 3: 21st Century: What next?
  • 14.  It is reasonable to assume that our cities and  towns will have to change to respond to this  new normal. l They will never be like they used to be. That doesn’t mean that the “new normal” has  h d h h l h to be bad or even worse than things used to  be. Things will be different.
  • 15. Who h How much WhatHow Where Why When
  • 16.  Why are you doing this?   Job creation, job retention, well paying jobs, diversification of  economy, industrial, commercial, retail) Who is your market?  y  Neighborhood, downtown, main street/courthouse square) What is your strategy?   BRE, Attraction, Main Street,  Where are you doing this?   What are the characteristics of your community? How:   What are your specific action steps? When:   What’s the timeline/timetable? What s the timeline/timetable? How Much will this cost?   How much will it cost and where will you find the money?
  • 17. Why are you doing this? What are your goals: Job creation, job    l  J b  i  j b retention, well paying jobs,  , p y gj ,diversification of economy, industrial, commercial
  • 18.  What are your ultimate goals?  How will you achieve consensus among  stakeholders on the goals? k h ld h l Political acceptance of the goal(s) Be sure to measure your performance in  f achieving the goals What is “the Elevator Story”? h h l
  • 19. Who is your market? (Neighborhood,  y ( g ,downtown, main street/courthouse square) q )
  • 20.  Neighborhood commercials corridors used to   N i hb h d  i l   id   d  be lively with diverse merchants that  provided services for people living in the  adjacent residential districts After WWII and the construction of the  Interstate Highway System, city  g neighborhoods:  Lost much of the middle class  Depopulated  Warehoused the poor 
  • 21.  The first step is admitting you have a problem f Neighborhood commercial corridors are  never going to be what they were b h h Some will be able to rebrand and remake  ll b bl b d d k themselves For example…
  • 22.  Once the thriving epicenters of small town  f America, “Main Street USA” contained all the  basic elements of life b l flf  Food  General merchandise  Haircuts  Banking Think of Mayberry 
  • 23.  Some continue to thrive due to repositioning/a  shifting population, such as Lebanon shifting population  such as Lebanon
  • 24.  Too often they end up being full of vacant or  underutilized buildings and vacant lots (even  on a town square/Main Street location)
  • 25.  Declining/decentralized population D li i /d li d  l i Easy access to other markets Changing consumer patterns = Walmart Ch i     tt    W l t
  • 26.  Now the world’s largest corporation,  Walmart’s early successes occurred in rural  markets.   k Their average store size is 100,000 square  feet and sells a range of products from  f d ll f d f clothing to electronics, food to general  merchandise as well often having automotive  h d ll f h service centers
  • 27.  The store’s size and “one‐stop‐shop”  approach still draw customers from up to 50  miles around in rural areas l d l This had a documented adverse effect on  Main Street retailers l A Walmart within 30 miles of a small town  could account for a reduction of 50% of Main  ld f d f f Street retailer
  • 28.  Walmart’s first store in Bentonville, AK….          W l t’ fi t  t  i  B t ill  AK           A small town Main Street!
  • 29.  Downtowns were once the hub of all activity – D t      th  h b  f  ll  ti it   commercial, retail, residential, transportation  hub, entertainment hub  entertainment Changes in development patterns stripped  downtowns of much of their past glory.  By the  early 1970’s, many were still commercial job  centers, but they had lost their luster.  By the 1990’s  people because to realize the  By the 1990’s, people because to realize the  economic value of downtowns and widespread  reinvestment began.
  • 30.  Investment in downtown makes the area  more desirable to workers/businesses Development of housing gives the area a 18‐ l fh h 24 hour viability Focusing regional uses in downtown helps to  l d h l create a critical mass of complimentary  activity 
  • 31. 1977: 1980 1988: Holiday Inn Crown Nationwide Plaza  Hyatt / Battelle  Plaza North Market  One Hall Revitalization 35  Years 1999: 999 Housing and  d 2000: 1993: Offices Convention Center  Nationwide Arena Convention Center Expansion 2007: 2012: 2005: 2010 Huntington Park  Hilton Convention  7 I‐670 CAP No Casino Baseball Center
  • 32. What is your strategy? Retention and Expansion, Attraction, Main Street, Neighborhood Revitalization
  • 33.  Focus on your primary market (s) (Who) Keep it simple (KISS) Partners can be part of your strategy (In other  b f h words, you don’t have to do everything) Make sure your strategy aligns with your  k l h partners and the political decision‐makers
  • 34.  NBR Strategy: Neighborhood Business  Revitalization Key question: Are you revitalizating a  l deteriorating area or are you protecting what  you already have? l d h Remember: Main Street commercial  revitalization still has to compete in the  l ll h h marketplace…what’s your distinguishing  feature?
  • 35.  In your efforts to recruit new businesses, do   I     ff     i   b i  d not forgot about the employers that you  already have and the jobs represent. already have and the jobs represent Basic community services can be important Workforce for growth Tax breaks for expansion Low interest loans for facility/equipment  y q p upgrades Assistance with relocation within the  community if necessary f
  • 36.  As plans to construct Nationwide Arena and  the surrounding Arena District took shape,  officials had concerns about traffic egress ff l h d b ff If Vine Street could be connected to Neil  Avenue, it would provide another way in/out  ld d h as well as easy access to State Route 315
  • 37.  Larger facility  f l  They still own most of  Better freeway access their old site near the  Room to grow arena and plan to develop  p p Added jobs it.
  • 38.  Job growth is the key to the long term  economic viability of a community Each employee has a multiplier effect of  h l h l l ff f approximately $2.25 If new jobs are incongruent with the skill sets  f b h h k ll of the labor force, those jobs could go unfilled Many new locations come from linkages with  l f l k h existing businesses (see Retention)
  • 39.  Requires partnership with elementary and  secondary schools, colleges, universities,  technical schools (both public and private) h l h l b h bl d Local workforce agency (ODJFS and One  Stops) Primarily funded with federal resources,  which are being cut back h h b b k However….may be critical to success!
  • 40. Where are you doing this? What are the characteristics of your community?
  • 41.  Know the demographics of your community K   h  d hi   f    i  Education, Earnings, Diversity, Housing, Poverty Key Employers Your place in the regional/state/national  economy Know your community assets to build on  Asset Mapping What are the S‐W‐O‐T’s of your community Most important: Be flexible and learn from  your community’s characteristics.  
  • 42.  Identification of assets means you have the  f f opportunity to utilize assets (if you don’t  know they exist, you can’t utilize them!). k h l h  People  Local associations  Institutions   Historic/psychologically relevant buildings
  • 43.  Conducting a SWOT Analysis will help you to  understand your community’s starting point.  Strengths  Weakness  Opportunities  Threats  DOES THIS FIT?
  • 44. How: What are your specific action  H  Wh       ifi   isteps? p
  • 45.  Start with an action‐oriented Strategic Plan Identify the partners, the resources, the  Strategies and the Action Steps d h Who will do what by when? KISS (See Who)
  • 46. When: What s the timeline/timetable? When: What’s the timeline/timetable? How long will it take to plan, i iti ti  i l t  d   initiative, implement and measure your efforts?
  • 47.  A good hockey player  dh k l plays where the puck is. A great hockey  is  A great hockey  player plays where  the puck is going to  p g g be!
  • 48.  Connect the action steps with the resources “Think around the corner”  Provide for periodic check‐ins by all partners  d f d h k b ll to ascertain progress Keep the timeline flexible h l fl bl
  • 49. How Much will this cost and where  ill    t  ? will you get resources? 
  • 50.  Financing Operations  Local government  Fundraising Campaigns  Most difficult resources to raise Financing Capital Investment  Equity Investors  Banks  Public Sector Programs g
  • 51.  Operating Business Financing O ti  B i  Fi i  Federal: SBA 7(a) loan guarantee, SBA 504 direct loan,  USDA Loan Guarantee  State: Ohio 166 Direct Loan, Ohio Capital Access  Program, Ohio Minority Loan Program  Job Creation Tax Credits; Job Retention Tax Credits Technology Business Investment  Ohi  Thi d F Ohio Third Frontier: R & D investment, Tax credits for  ti  R & D i t t  T   dit  f   technology investment  Entrepreneurial Signature Programs: through  p g g g regional tech organizations
  • 52.  Community Development Block Grant  (CDBG) CDBG projects must be consistent with broad  b hb d national priorities  Must benefit low‐ and moderate‐income people  Aid in the prevention or elimination of slums or  blight  Other community development activities to  address an urgent threat to health or safety. dd h h lh f
  • 53.  TIF are used by municipal governments to  pay for upfront infrastructure costs Taxes are frozen in a certain geography f h As that geography becomes more valuable  due to the new infrastructure and associated  d h f d d development, the costs of the infrastructure  is repaid. d
  • 54.  Tax credits provided primarily to banks for  f investing in community development  projects (39% over 7 years) Larger projects Longer Time Frame Large market with smaller allocations Flexible financing l bl f
  • 55.  Can the program be used for the need? f Does the timetable of the project meet the  timetable of the program? bl f h Does the business meet the credit and/or  social criteria for the program? l f h What types of strings does the program  have? Can the business spend money?
  • 56. Getting the Banks to… Getting the Banks to  
  • 57.  The George Steinbrenner Rule The Berlitz Rule The Herb Cohen Rule h b h l The Dennis Kucinich Rule The Al Capone’s Safe Rule h l f l The Heidi Fleiss Rule The Don Quixote Rule h l The Elephant Rule
  • 58.  Partners need to have a reason for getting  f engaged Banks ‐‐‐‐ CRA k Foundations ‐‐‐‐ Social Goals Anchor Institutions ‐‐‐‐ Safe neighborhoods  h f hb h d for their employees Identify why they are interested and develop  d f h h d dd l partnerships that meet those goals. 
  • 59.  Use the public sector programs to reduce the  risk of the private sector investment Very time consuming to bring in partners b
  • 60.  These strategies are not feasible for every  f f neighborhood Other neighborhoods should h hb h d h ld  Identify assets  Locate key intersections (traffic counts, access)  Nodal development
  • 61.  Why do business projects fall apart? h d b f ll  Inadequate working capital to finance growth?  Project costs escalate  Financial strength of the company either deteriorates  or is not as good as you thought  Market defined too broadly  Expanding into an unfamiliar product line or service  Inadequate business skills  Expanding too fast
  • 62.  Why do real estate projects fall apart? f  Unanticipated problems with the site  Mismatch between the cost of the financing and  the real estate rental market  Financing dries up  Tough economy  Disputes among property owners
  • 63.  In the past, the Ohio Department of  f Development oversaw all housing, economic  development, job training and the Clean Ohio  d l b d h l h Fund. All economic development/job creation  activities have been removed from the  h b df h Department of Development and put under  the governance of JobsOhio.   h f b h
  • 64. p Ohio Department  of Development• Economic  • Housing & Partnerships Development • Job Ready Sites (JRS)• Attraction • Clean Ohio• International Business • Historic Prez Tax Credits• Incentives  • Ohio Third Frontier• Loans/Grants • Energy Office• Regional Partners • Small & Minority Business • Loans/Grants
  • 65.  Newly created non‐profit is now responsible  f for economic development and job creation.  Board of Directors is composed of business  d f d fb leaders. The hope is that this new framework will be  h h h h f k ll b nimble and more responsive to the needs of  business. Mix results in other states. 
  • 66. • Team NEO• Regional Growth Partnership• Columbus 2020 l b• CincinnatiUSA• y p Dayton Development  Coalition• Appalachian Business Council
  • 67. Tour Preparation 
  • 68. Greater Linden’s LocationGreater Linden s Location
  • 69.  Middle class community Mix of Italians, Irish, Germans and African‐ Americans Construction of the Interstate Highway  System and the growth of suburbs lead to  d h h f b b l d economic and racial flight. By the late 1960’s/early 1970’s Linden, is  h l l d officially in decline.
  • 70.  In order to revitalize Linden, it was necessary to  increase the population and wealth of the  p p community without allowing  gentrification to  occur.  A plan was developed for the creation of a  co p e e s e oda , e u ba st de e op e t comprehensive nodal, new urbanist development  that integrates retail, commercial, residential and  community services in one area.
  • 71.  Columbus Urban Growth Corporation, the City’s   C l b  U b  G th C ti  th  Cit ’ former non‐profit commercial development arm,  assembled the land and brokered the majority of  j y activities that have taken place in the Four Corners. They served as developer for several project sites. They served as developer for several project sites Helped facilitate the development of other sites. p p
  • 72. One of the first entities to commit to the Four Corners was the Columbus Metropolitan Housing Authority (CMHA).  They constructed a three story, 42,000 square foot office building on a site that once held the burnt out remains of the former Eleventh Avenue School.
  • 73. Eleventh Avenue  School, 1996CMHA, 2000
  • 74.  Meeting the transportation needs of the community  h d f h was deemed to be an essential component if the  Four Corners project was to be successful, in part  Four Corners project was to be successful  in part  because much of the community is transit  dependent. p The Central Ohio Transit Authority (COTA)  committed to the construction of their flagship  Transit Center on the site of a blighted structure, the  Heavy Metal Motorcycle Club. Hea  Metal Motorc cle Cl b
  • 75. “Heavy Metal”  “H  M t l”  Motorcycle Club September, 1998Linden Transit Center October, 1999
  • 76.  In addition to transportation services, the  Linden Transit Center has the following  features;  ATM machine  First and second shift child care  Planned Parenthood  Children’s Hospital 
  • 77. Once home to one of the most notorious carry‐outs in Columbus Now is a two‐story 7,200 square  foot office building
  • 78. The only building that was retained as part of the project was the CrosstownBuilding.  This building is 4,200 square feet and features office space, a barber feet and features office space  a barber shop, tax service and The Linden Café, a popular sit‐down restaurant.
  • 79. House and vacant land – 2000Neighborhood Policing Center ‐2004
  • 80.  In order to provide move up opportunities in Linden,   I   d  t   id       t iti  i  Li d seven single family houses have been constructed  on the back of the CMHA lot Each house cost between $90,000‐$115,000 and  have the following amenities:  Approximately 1,350 square feet A i l      f  Three bedrooms  Two bathrooms  Basement  Detached, two car garage
  • 81. The Point of Pride building is a two‐story, 21,000 square foot commercial/office building.  The first floor consists of a mixture of national, regional and local retail tenants.  The second floor is all office space.  This The second floor is all office space   This building fills a retail void in the community and provides residents with access to services that they previously had to leave   i  h  h   i l  h d   lthe neighborhood to access. 
  • 82.  This building is different from the other   Thi  b ildi  i  diff  f  h   h components of the project.  COTA  CMHA  d th  P li  St ti   COTA, CMHA and the Police Station were all    ll  financed through grants/capital investments.  These institutional uses were designed to create a  critical mass of employees and structures at the  intersection.  Ideally, this critical mass would help the retail uses  be more successful. 
  • 83. The Point of Pride site is actually eleven parcels and a portion of a vacated city street.
  • 84.  The Point of Pride Building has over a dozen equity   Th  P i t  f P id  B ildi  h      d   it sources, but its debt is subject to conventional  banking guidelines. gg Credible tenants with long term leases must be  secured, even though the neighborhood has  economic challenges. economic challenges The Challenge:  How do you make a private sector  g y p building successful in a public sector environment?
  • 85.  City of Columbus f Franklin County Columbus Compact l b Ohio Community Development Finance Fund Huntington Bank k Local Corporate Contributions l b Community Support
  • 86.  It was always the desire of the community   I    l   h  d i   f  h   i and the various development entities that the  public investment made in the Four Corners  project would encourage the private sector to  make investments. This occurred in one way through the  recruitment of certain tenants. Additionally, it happened just north of the  Four Corners project area.  
  • 87.  800 jobs 8  j b 107,000 square feet of office and retail space  7, q p $17 million in investment 26 businesses new to the neighborhood Seven new homes
  • 88. Mark Barbash k b hEconomic Development Consulting614‐568‐5049614 568 5049Mark.Barbash@gmail.comBrian HigginsArch City Development614‐563‐3533bhiggins@archcitydevelopment.com 

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