PowerPoint Presentation - Sustainable Pittsburgh

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					    The Rebirth of Older Industrial Cities:
  Exciting Opportunities for Private Sector Investment
           Smart Growth for the 21st Century

A Presentation to the 6th Annual Smart Growth Conference
                       May 19, 2006
            Industry Clusters
•   Biotechnology
•   Information Technology
•   Financial Services
•   Travel and Tourism
•   Health Care
•   Traditional Manufacturing
Fundamental Proposition

Cities have the ability to create their destiny,
but they can benefit from having sophisticated
partners who can help them develop tools and
information to compete successfully.
     Deal Breakers

Deal Makers/Action Steps

 Organization by Sector
Deal Breaker #1
Due to rapidly changing market conditions in the global economy, municipal leaders in
older industrial cities often lack complete, up-to-date information regarding the specific
location needs of particular industries and the recruitment efforts of competing locations.
As a result, they are not always fully prepared to assist firms in a timely and effective
manner, helping to overcome obstacles to inner city investment.

                    “When I have to send a manager overseas for six weeks, and they drink bottled
                    water and eat peanut butter crackers they bring from home they don’t like it. If I
                    offered to send them to Chelsea, Holyoke, or Lawrence, they’d take it in a minute.”
                    -- IT executive
Deal Maker/Action Steps
   Create a powerful self-assessment tool for cities to use to better clarify
   their economic development goals and identify their competitive
   strengths and weaknesses relative to other urban locations. Cities
   would have the opportunity to work with a team of private sector
   developers to undertake an internal review of all aspects of the
   development process using the assessment tool.

   Provide ongoing economic development training for municipal leaders
   and managers that focus on how to respond to opportunities in
   different sectors.
  Deal Breaker #2
Business decision makers have well-defined “cognitive maps” – perceptions or
expectations—about the attributes of and opportunities in older industrial cities that can
adversely affect the way they think about locating in these urban locations.

                               “We were in Lawrence when it was the arson capital of the
                               U.S. For a while, being there meant that we couldn’t
                               always recruit our first choice for a position. However, we
                               don’t have that trouble any longer. Lawrence is coming
Deal Maker/Action Steps
   Assist communities in combining resources regionally in order to market and
   respond to inquiries from firms, developers, and location specialists.

   Assist cities in making their websites more attractive, graphically rich, easy to
   navigate, and more useful to firms, developers, and location specialists.
   Improved websites would include information on the characteristics of individual
   available parcels, zoning and regulation, available financial incentives, and
   background data on demographic and economic characteristics of the locality.
   Websites could include testimonials from existing business leaders and
   messages from city leaders indicating the support firms receive in their

   Enlist companies – the “urban pioneers” - already located in inner cities as
   ambassadors. Businesses offer the best testimony to other businesses on the
   advantage of urban locations.
Deal Breaker #3
Specific urban site deficiencies can add excessive costs to doing business in
older industrial cities.

                               “The mills were built when people walked to work. There is no
                               parking and no room to create it.”
Deal Maker/Action Steps
   Encourage the enactment of urban overlay zoning districts where there can be
   flexible use, expedited permitting, focused public safety efforts, and amenity
   packages essential to creating competitive advantage in an urban setting.
                                                 Expedited Permitting

        Specialized Industrial Cluster Focus                                Transit Connections

                                                                            Priority Infrastructure
     Mixed Use Development

High Performing
                                          Urban Overlay                                        Housing

    Public Safety Operations                                                Leveraged Public/Private

                                           Strategic Workforce Investment
Deal Maker/Action Steps
   Make changes in the brownfields regulatory program to facilitate re-use of urban
   sites to facilitate faster clean up and further limit liability.

   Change state rules overseeing municipal property taxation that force new
   owners to pay delinquent taxes of previous owners.
Deal Breaker #4
State and local review processes can add excessive costs to doing business in older
industrial cities.

                    “Once a product has passed its Phase III trials, we want to get the new
                    product into production before another company does. Speed is so critical
                    that we start building the production facility before the product is approved.
                    “ – Biotech Executive
Deal Maker/Action Steps
   Identify market ready sites and have them pre-permitted for industrial and
   commercial uses. The marketing of pre-permitted urban parcels can be done
   through city web sites, site finder services, and other commercial site services.

   Empower someone in the administration to specifically oversee the development
   process and respond aggressively and proactively to the needs of firms
   considering the city as a site for location .

   Create a permit system that allows for a single presentation of a development
   proposal to all boards with jurisdiction in the city and establish a specific time
   frame for community response in the initial stage of the review process.

   Reframe state programs designed to encourage development of urban sites so
   that they do not have the unintended consequence of discouraging potential
 Deal Breaker #5
Traditional public sector financial tools such as tax abatements, tax credits, and subsidies,
while often strategically important as a deal closer, are not sufficient to attract high value
business investment if previous deal breakers are not overcome.

                              “From our perspective, time is money. We may actually be able to make
                              a deal work more effectively if we can receive expedited permits and
                              infrastructure enhancements, than by factoring in a tax subsidy into our
                              pro forma.” – Developer
Deal Maker/Action Steps
   Use Tax Increment Financing to create revenue streams for critical infrastructure
   in urban locations.

   Site state and municipal facilities in urban locations to stimulate creation of
   amenities and other attractions to spur private sector commercial and industrial
         Lead Actors
State Governments
City Governments
Regional Agencies
Public/Private Partnerships
      What did we do?
Survey 4,000+ corporate real estate and
development professionals on location
  NAIOP (National and Massachusetts Chapter)
  CoreNet Global

Strong consistent response

2 parts to the survey:
  Rate importance of 34 factors
  Open-ended section
What topics did we ask about on
          the survey?
  Permitting Processes
  Development and Operating Costs
  Business Environment
  Transportation and Access
  Quality of Life/Social Environment
Which of the 34 factors received
     the highest scores?
  On-site parking

  Rental rates

  Availability of appropriate labor

  Timeliness of approvals and appeals
Which of the 34 factors received
      the lowest scores?
  Municipal minimum wage law

  Access to rail

  Informative municipal website

  Strong trade unions
When asked what they thought was most
 critical, what did respondents tell us?
Proximity to major highways, airports, and
transportation routes
Rents, land costs, and lease costs
Availability of appropriate labor pool
Permitting, approvals, and appeals
Amenities and services nearby
Pro-business/development friendly city
The Self-Assessment Tool
 We developed a new computer-based interactive
 Self-Assessment Tool for evaluating and interpreting
 a city’s assets, strengths, and weaknesses in light of
 the factors that firms and developers consider most
 important for site selection.

 The self-assessment tool includes sections on:

           1. City Characteristics
           2. City Development Processes
What the Tool Does
The tool helps local officials understand:

•       The true “deal breakers”
•       How they should prioritize their activities

Data from various cities included in the assessment tool makes it
possible for individual cities to compare themselves to other cities to
determine how well they are meeting their own economic
development goals.

The act of measurement assists officials in paying greater attention to
the critical deal breakers and deal makers, provides a reality check on
the types of industries they can attract, and gives added leverage in
dealing with the real barriers.
“This is a great roadmap for the essentials for benchmarking our city’s economic development policy.”
Jay Ash, City Manager, Chelsea
The Framework for the Tool
 • City officials and staff working together answer 194
   questions in 10 categories
 • The tool is rigorous but fair
 • The tool is available to take online
 • The results of the Self-Assessment Tool are secure and
   provided only to the local officials and no one else
 • The results provide an ability to compare your
   community‟s economic development assets, strengths,
   and weaknesses to peer communities
Sample Report Page: What the Self-Assessment Tool Gives Back
Sample Report Page: What the Self-Assessment Tool Gives Back
Unique Report for Each Community
 • The Self-Assessment Tool report communities receive is
   unique based on responses to the 194 question survey
 • The report uses data from a group of peer communities to
   assess the relative strengths and weaknesses of your
 • The report provides detailed information on what city
   attributes and services need most improvement to meet
   the competition for investment and jobs
   “Economic development is critical to our success as a city. In today's world, this
   requires an increasingly sophisticated relationship with private sector partners --
   those that are here and we want to retain and those that we would like to come.
   This tool provides critical insights into our current readiness to play our part, and,
   more importantly, where we need to fix our process.”
   Mayor James Fiorentini, Haverhill
Interpreting the Results
 • The community‟s results are color-coded to provide rapid
   analysis of how they are doing relative to peer

 • For each Self-Assessment Tool section, the results are
   interpreted in terms of what development and location
   specialists consider most important, somewhat important,
   and less important to attracting investment and jobs

   “I‟m using this as a guidebook for re-tooling our development process.”
   Mayor Charles Ryan, Springfield
What does all this mean to cities?
  The usual suspects (taxes, incentives,
  etc.) aren‟t necessarily the most

  There are a number of factors that
  matter to firms that cities can do
  something about (permitting, attitude).
What does all this mean to cities?
  There are things that matter to firms
  making location decisions that are
  tougher for cities to address directly
  (labor, location), but cities need to
  recognize them and develop strategies
  to deal with them in order to win.
 What does all this mean to the
commercial real estate industry?
Cities are attractive opportunities for
They need help staying on your radar screen.
They need to partner with you to compete in
the 21st century.
With your practical advice and insight, cities
can tailor effective responses to opportunities
in different sectors.
Where do we go from here?
 • Working with local regional and national
   organizations, we are exploring ways to open the
   opportunity up to any community to participate in the
   self-assessment process
 • We are also working with a number of groups
   including NAIOP to develop training sessions on the
   21st century dynamics of development and the critical
   role of communities in that process
   “We want „face time‟ with the developers so that we can better understand their needs and they
   can better understand our responsibilities. It needs to be a „win-win‟ negotiation.”
   Mayor Dan H. Mylott, Fitchburg

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