COMMUNITY DEVELOPMENT Is Your Community Ready?

1. COMMUNITY DEVELOPMENTIs Your Community Ready? Kentucky Institute for Economic Development August 2007 J. R. Wilhite, CEcD

2. 3-Step Process to“Economic Development” • PREPARATION • MARKETING • SELLING

3. “Community Development” is the 1st Step “Community development” is the process of investing public resources in ways that encourage the commitment of private sector resources. When this first process causes the private sector to invest and create jobs, that’s “economic development”.

4. “This new road is an economic development project.”- Misguided local official, 2006 Community Development Economic Development

5. Wayne Foster said: “It is not easy. It is time consuming. It is sometimes boring. It is usually expensive, and it requires patience, but community developmentis a necessary first step to a successful economic development program.” (June, 1995)

6. Why Businesses Invest • To add new capacity • To produce new products • To reach new markets • To integrate operations

7. Communities Care Where • To expand & diversify the economic base • To create job opportunities • To increase wage levels • To increase tax revenues • To increase the market for other local businesses

8. Communities Must Provide • Accessible location • Usable space • Skilled workforce • Adequate utilities • Reliable services • Pro-business climate • Fair fees & taxes • Attractive lifestyle

9. How to be a winner... “There’s no trick to selling horses, as long as you are selling good horses.” • John E. Madden, central Kentucky horse breeder

10. Site Selection FactorsArea Development, December 2006 1. Labor costs 95.0 2. Highway accessibility 90.9 3. Corporate tax rate 90.8 4. State & local incentives 88.6 5. Telecommunications services 88.3 6. Tax exemptions 86.7 7. Occupancy or construction costs 85.5 8. Availability of skilled labor 85.1 9. Energy availability & costs 82.4 10. High-speed Internet access 82.1 11. Cost of land 79.2 12. Low union profile 78.4 Total of “important” and “very important” responses

11. Site Selection FactorsArea Development, December 2006 13. Proximity to major markets 76.9 14. Availability of land 73.3 15. Environmental regulations 68.9 16. Right-to-work state 67.1 17. Availability of unskilled labor 65.3 • Raw materials availability 64.1 18. Availability of long term financing 64.1 • Accessibility to major airport 61.4 • Training programs 56.0 • Proximity to suppliers 49.3 • Proximity to technical university 30.0 23. Railroad service 20.8 24. Waterway or oceanport accessibility 17.0 Total of “important” and “very important” responses

12. Quality of Life FactorsArea Development, December 2006 1. Low crime rate 70.8% 2. Ratings of public schools 64.4 3. Housing costs 63.9 4. Health facilities 60.8 5. Housing availability 54.4 6. Climate 48.6 7. Colleges & universities in area 44.6 8. Recreational opportunities 43.7 9. Cultural opportunities 41.4 Total of “important” and “very important” responses

13. The Local Role Active local development program • Everyday point of contact • Accurate information source • Ability to respond & decide Long-term perspective • Give a consistent effort • Make a “place” for business • Create new solutions

14. “You got to be very carefulif you don’t know where you’re going, because you might not get there.” • Yogi Berra, Baseball Hall of Famer & Philosopher

15. What happened in Hadleyville? Part One – “Gung Ho”

16. “Economic Development” • A deliberate program of action, • through a community based effort, • to impact the location • of new business investment.

17. “Community Development” “A process of people working together to create and/or preserve their desired community in its economic, social, cultural, political, and spiritual dimensions.”

18. “A process …” An ongoing, structured presence: • point of contact • realistic work plan • regular financial support • supportive stakeholders • ability to act

19. Strategies to Avoid • “Bring us the one that nobody wants.” • “We’ll just hire us a marketer.” • “If we build it, they will come.”

20. Choosing a Path • Participatory strategic planning • Outside assessment teams • Survey of existing business • Project-specific partnerships

21. Business Sectors • Office headquarters • Distribution centers • Manufacturing • Research & development • Wholesale & retail trade • Services • Tourism • Agribusiness

22. Location Factors

23. Digging for Details • Where do workers come from? • What skills do they possess? • What wage level is required? • What training is available?

24. ED Practice Hint #1“Expertise” A successful ED must know only 2 things: 1. As much as you can about everything, and 2. All those who know everything else.

25. Partnerships • Organizational • Intra- & Inter-community • Marketing • State, regional groups • Infrastructure • Railroads, utilities • Financing • Banks, federal, state

26. Regional Cooperation Working together to reach “critical mass” Resources • Human capital • Financial capital Results • Regional Business Parks • Multi-County ED Agencies Benefits • Professional staffing • Broadened program emphasis • Greater site investments • Larger market presence

27. “of people working together” • Leadership • Ownership • Support

28. LeadershipA County Judge-Executive said: “If we say we do economic development, and we don’t take this building, then we’re just chicken(poop).” (September, 1993)

29. Ownership • Commits resources • Respects process • Understands results • Rewards success

30. SupportED Practice Hint #2“Stakeholders” • While you are out there selling businesses on your community … • Who is making sure that the community is sold on your ED program?

31. Ed Morrison said: In the years ahead, we will come to understand that “community” is the dominant metaphor by which we live. Community is a messy concept. Everyone has a voice, regardless of job or social status. To make sense of our community, we must learn how to make decisions together. (July, 2003)

32. What happenedin Hadleyville? Part Two – “High Noon”

33. Civic Engagement • Meetings must have: • an agenda that is followed • non-biased leadership • clear rules of conduct • Players must agree to: • listen to one another • avoid personal attacks • offer neither lies nor distortions • find consensus and move on

34. “to create and/or preserve their desired community” • KEEP what you like and have • GROW what you want more of • GET what you want and need • and celebrate ALL successes

35. Clarke Potter said: “When I first took this job, I drove through the community. And then I came back and told the Mayor they had better get the junk cars out of sight or just forget about economic development.” (July, 1995)

36. OSU, KSU WVU extension service programs Raise local awareness via others’ perceptions Volunteers make unannounced visits Disposable cameras provided and used Observations & comments in summary report “First Impressions” Program

37. Webster County,KY October, 1998 Strategic Plan • Strong value in quality of relationships • Desire for a more diverse economy • quality of employment opportunities • diversity of retail base • Improvements in facilities & services • roads, public safety, and recreation • Greater citizen participation & governmental cooperation

38. ED Practice Hint #3“Differentiation” • If your business prospects are active on the web … • Can they find you there?

39. “in its economic dimensions.” • Gross state product • Average annual pay • Unemployment rate • Per capita income • Poverty rate • Educational attainment

40. Defining Expectations • Groundbreakings • Ribbon-cuttings • Fame & glory • Jobs • Income • Tax Revenue

41. Business Clients • New start-up companies • Retention & expansion of existing businesses • Attraction of new business investment

42. ED Practice Hint #4“Prioritization” • If existing businesses account for 100% of existing jobs and 60% of new jobs … • Are 80% of your local ED efforts directed toward meeting the needs of existing businesses?

43. Local Inducements Types • Employee recruitment & training • Utility & roadway extensions • Site & building improvements • Tax or fee reductions • Low interest loans Use • Consistency • “Claw back” provisions • Cost/benefit analysis

44. Cost/Benefit Analysis Benefits • Job creation • Wages and benefits • New tax revenues • Corporate citizenship Costs • Impact on existing employers • Effect on local utility systems • Environmental impacts

45. ED Practice Hint #5“Return on Investment” • It is not the purpose of ED to spend “other peoples’ money” • It is to make sound investments that lead to a reasonable return

46. Value of 100 Jobs to KY in Value Added ($ millions) All values and estimates are based on 2003 data and dollars. KY Economic Development Cabinet, Division of Research.

47. Value of 100 Jobs to KY in New Jobs Created All values and estimates are based on 2003 data and dollars. KY Economic Development Cabinet, Division of Research.

48. Value of 100 Jobs to KY in State and Local Taxes ($ millions) All values and estimates are based on 2003 data and dollars. KY Economic Development Cabinet, Division of Research.

49. take advantage of key events have a plan have a product have capable leadership are creative have a long-term focus minimize politics (1998 EDI Thesis) are working to solve the workforce puzzle utilize resources and build partnerships build strong community linkages offer quality service after the sale always stretch their thinking Daryl Smith said:Successful Communities…

50. Darrell Gilliam said: “If you ain’t got the marbles, stay out of the game” (April, 1992)