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
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
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?
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
There is none! When a community was founded, people opened a variety of businesses to serve the population. the population
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.
Cities grew on the back of large industries f Ports Manufacturing Mining Rail
These larges industries populated our neighborhoods and created a consumer base for our neighborhood retail stores. f hb h d l
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
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
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?
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.
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?
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
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
Who is your market? (Neighborhood, y ( g ,downtown, main street/courthouse square) q )
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
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…
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
Some continue to thrive due to repositioning/a shifting population, such as Lebanon shifting population such as Lebanon
Too often they end up being full of vacant or underutilized buildings and vacant lots (even on a town square/Main Street location)
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
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
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
Walmart’s first store in Bentonville, AK…. W l t’ fi t t i B t ill AK A small town Main Street!
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.
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
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
What is your strategy? Retention and Expansion, Attraction, Main Street, Neighborhood Revitalization
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
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?
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
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
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.
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)
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!
Where are you doing this? What are the characteristics of your community?
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.
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
Conducting a SWOT Analysis will help you to understand your community’s starting point. Strengths Weakness Opportunities Threats DOES THIS FIT?
How: What are your specific action H Wh ifi isteps? p
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)
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?
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!
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
How Much will this cost and where ill t ? will you get resources?
Financing Operations Local government Fundraising Campaigns Most difficult resources to raise Financing Capital Investment Equity Investors Banks Public Sector Programs g
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
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
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
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
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?
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
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.
Use the public sector programs to reduce the risk of the private sector investment Very time consuming to bring in partners b
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
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
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
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
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
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.
• Team NEO• Regional Growth Partnership• Columbus 2020 l b• CincinnatiUSA• y p Dayton Development Coalition• Appalachian Business Council
Greater Linden’s LocationGreater Linden s Location
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.
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.
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
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.
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
“Heavy Metal” “H M t l” Motorcycle Club September, 1998Linden Transit Center October, 1999
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
Once home to one of the most notorious carry‐outs in Columbus Now is a two‐story 7,200 square foot office building
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.
House and vacant land – 2000Neighborhood Policing Center ‐2004
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
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.
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.
The Point of Pride site is actually eleven parcels and a portion of a vacated city street.
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?
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
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.
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
Mark Barbash k b hEconomic Development Consulting614‐568‐5049614 568 5049Mark.Barbash@gmail.comBrian HigginsArch City Development614‐563‐firstname.lastname@example.org