Revising downtown economic development strategy - post recession.

1. Downtown
Idea Exchange
Essential Information for Downtown Revitalization
July 2011
Perspectives
Revising downtown efforts for the post-recession economy
By Charles Eckenstahler economic development process, while others
are consulted when the need arises to address
Over the past year, I have been con- specific downtown development matters.
ducting an informal survey of friends and col- Regardless of the role of the downtown organi-
leagues responsible for downtown revitaliza- zation in the overall economic development
tion throughout the Midwest. All of those strategy, there are several trends that will
interviewed acknowledged that local commu- reshape the work that downtown organiza-
nities cannot rely totally on federal and state tions/community planners contribute to the
stimulus programs to replace lost businesses economic development process.
and jobs. Leaders in every community believe • Oversupply of retail space will focus site
an active downtown revitalization program selection decision making on positive demo-
will be mandatory in the future. These pro- graphic and household income growth. The
grams must address a new and different post- role of population and socio-economic forecasts
recessionary local economy, the one now will become the “community calling card” —
being formed right before their eyes. notifying the marketplace about the number of
Aggressive communities are responding households and the growth of their income, fore-
to the challenge of this new economic envi- casting the ability to support new retail business-
ronment by working with local/regional lead- es, especially in downtown locations.
ers reviewing past economic development • Unoccupied retail, office and industrial
efforts, and discussing ways to transform buildings will be pursued by developers
local/regional economic development strate- for re-purposing due to deflated purchase
gies and programs in response to their vision prices. Comprehensive plans and zoning
of the post-recession economy. regulations should be modified to allow
To fast track growth of the local economy re-purposing of former industrial and commer-
at the first sign of economic recovery (which cial buildings.
may now be happening), they are actively • Decreasing property values will
retooling downtown revitalization strategies, increase pressure to use land for its highest
adapting the best traditional tools, and identi- economic potential, which equates to the
fying new economic practices. greatest tax valuation. This will encourage
Some downtown organizations are active- designating more easily-developable higher-
ly involved on a daily basis in the community value land, and support its quick development.
This article was reprinted from the July 2011 issue of Downtown Idea Exchange.
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2. • Lender financing for front end costs Large developments will be broken down
required to obtain approvals has vanished. into smaller phased increments, size matched
Developers will seek public help in funding to reduced market demand and available
these, plus assurances of timing and decision financing.
certainty before undertaking new development • Development regulations requiring
projects. Costs and expenses incurred in the installation of infrastructure in advance of
development approval process should be need in large-scaled multi-year develop-
streamlined. ment projects should be reconsidered,
• Increased incentives will be required especially when infrastructure installation
to recruit private developer interest. guarantees or performance bonds are required;
Expanded incentives may be necessary to and creative public funding assistance should
attract private investors in community-devel- be explored when such infrastructure is crucial
opment sponsored projects that would likely and cannot be guaranteed by the developer.
be viewed as unattractive in today’s private Downtown development and planning
real estate investment market. will assume greater importance in the overall
• Quality of life factors and job proxim- community economic development strategy
ity, especially in central business districts, due to the need for greater high-value real
will play a greater role in the selection of estate, increased incentives, and expanded
places to live, especially for young people inducements to attract commitments for pub-
just finishing their educations, bringing to lic sponsored development projects.
downtown certain skill sets sought by busi- At no time in history have community
nesses that have future growth and expansion leaders faced the economic development chal-
capabilities. lenges of today. There is no doubt that profes-
sional downtown developers and community
Placemaking efforts to increase communi-
planners will have an increased role in this
ty quality of life, especially in the central
strategic economic development planning.
business district, will become a top priority in
Author note: This paper was originally
efforts to increase population growth, espe-
prepared for presentation at the 2010 Purdue
cially of young talented workers and families
University North Central Topics in Regional
with children.
Economic Development program.
• Speed and certainty in processing
Chuck Eckenstahler (AICP Retired), semi-retired
governmental approvals will distinguish
in 2008 from a 35-year career as an active full-time
development-friendly communities. Speed municipal planning, economic development and
and certainty will be used as recruitment tools real estate consultant. He can be contacted at
to entice development interest. pctecken@comcast.net or (219) 861-2077. DIX
© 2011 Alexander Communications Group, Inc. All rights reserved.