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

1. Protecting your community in hard times while preparing your
gy y p p gy
community 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
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 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
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 Ports
 Manufacturing
 Mining
 Rail

9.  These larges industries populated our
neighborhoods and created a consumer base
for our neighborhood retail stores.
f hb h d l

10.  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

11.  Leaving us first
with vacant
i h
factories

12.  Then with
vacant retail
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13.  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

14.  Stage 1: 1940’s – 1980’s: Began in the
southern states led by the primary utilities
 Why?
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 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?

15.  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.

17. Who
h
How much What
How Where
Why When

18.  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?

19. 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

20.  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
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achieving the goals
 What is “the Elevator Story”?
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21. Who is your market? (Neighborhood,
y ( g ,
downtown, main street/courthouse
square)
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22.  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

23.  The first step is admitting you have a problem
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 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…

25.  Once the thriving epicenters of small town
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America, “Main Street USA” contained all the
basic elements of life
b l flf
 Food
 General merchandise
 Haircuts
 Banking
 Think of Mayberry

26.  Some continue to thrive due to repositioning/a
shifting population, such as Lebanon
shifting population such as Lebanon

27.  Too often they end up being full of vacant or
underutilized buildings and vacant lots (even
on a town square/Main Street location)

28.  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

29.  Now the world’s largest corporation,
Walmart’s early successes occurred in rural
markets.
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 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

30.  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
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 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

31.  Walmart’s first store in Bentonville, AK….
W l t’ fi t t i B t ill AK
A small town Main Street!

32.  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.

33.  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

34. 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

39. What is your strategy? Retention and
Expansion, Attraction, Main Street,
Neighborhood Revitalization

40.  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

41.  NBR Strategy: Neighborhood Business
Revitalization
 Key question: Are you revitalizating a
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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?

42.  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
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upgrades
 Assistance with relocation within the
community if necessary
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43.  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

45.  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
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 Added jobs it.

46.  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)

47.  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!

50. Where are you doing this? What are
the characteristics of your
community?

51.  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.

52.  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

54.  Conducting a SWOT Analysis will help you to
understand your community’s starting point.
 Strengths
 Weakness
 Opportunities
 Threats
 DOES THIS FIT?

55. How: What are your specific action
H Wh ifi i
steps?
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56.  Start with an action‐oriented Strategic Plan
 Identify the partners, the resources, the
Strategies and the Action Steps
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 Who will do what by when?
 KISS
 (See Who)

57. 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?

58.  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!

59.  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

60. How Much will this cost and where
ill t ?
will you get resources?

61.  Financing Operations
 Local government
 Fundraising Campaigns
 Most difficult resources to raise
 Financing Capital Investment
 Equity Investors
 Banks
 Public Sector Programs
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62.  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

63.  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

64.  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.
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65.  Tax credits provided primarily to banks for
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investing in community development
projects (39% over 7 years)
 Larger projects
 Longer Time Frame
 Large market with smaller allocations
 Flexible financing
l bl f

66.  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?

67. Getting the Banks to…
Getting the Banks to

68.  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
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 The Elephant Rule

70.  Partners need to have a reason for getting
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engaged
 Banks ‐‐‐‐ CRA
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 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.

71.  Use the public sector programs to reduce the
risk of the private sector investment
 Very time consuming to bring in partners
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72.  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

74.  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

75.  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

77.  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

78. 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

79.  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.

80. • Team NEO
• Regional Growth Partnership
• Columbus 2020
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• CincinnatiUSA
• y p
Dayton Development
Coalition
• Appalachian Business Council

81. Tour Preparation

82. Greater Linden’s Location
Greater Linden s Location

83.  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.

85.  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.

86.  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
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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

87. 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.

88. Eleventh Avenue
School, 1996
CMHA, 2000

89.  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.
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 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

90. “Heavy Metal”
“H M t l”
Motorcycle Club
September, 1998
Linden Transit Center
October, 1999

91.  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

92. Once home to one of the
most notorious carry‐outs in
Columbus
Now is a two‐story 7,200 square
foot office building

93. The only building that was retained as
part of the project was the Crosstown
Building. 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.

94. House and vacant land – 2000
Neighborhood
Policing Center ‐
2004

95.  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

97. 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 l
the neighborhood to access.

100.  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.

101. The Point of Pride site is actually eleven parcels
and a portion of a vacated city street.

102.  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.
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 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?

103.  City of Columbus
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 Franklin County
 Columbus Compact
l b
 Ohio Community Development Finance Fund
 Huntington Bank k
 Local Corporate Contributions
l b
 Community Support

104.  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.

106.  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

107. Mark Barbash
k b h
Economic Development Consulting
614‐568‐5049
614 568 5049
Mark.Barbash@gmail.com
Brian Higgins
Arch City Development
614‐563‐3533
bhiggins@archcitydevelopment.com