Deal breakers act as barriers to urban development. These barriers are real, but they can be overcome if city leaders take a proactive, aggressive stance to meeting the complex needs of firms looking to start up operations, relocate or add new facilities.
Firms are willing to consider older industrial sites and abandoned commercial districts if municipal leaders and state agencies can work with them as a team to expeditiously solve problems related to zoning regulations, brownfield remediation, permitting and an array of related factors that can be barriers to investment in a fast-changing globally competitive economy.
Indeed, we discovered a number of emerging urban entrepreneurs who are choosing inner-city locations as cost effective places to do business.
The research focused on sites identified by officials in six Massachusetts communities — Boston, Chelsea, Holyoke, Lawrence and New Bedford, and on six key industrial sectors, all identified as strategic by the state government — health care/life sciences, biotechnology, information technology, financial services, traditional manufacturing, and travel and tourism.
The following is three of the potential deal breakers.
Deal Breaker No. 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.
Key Deal Makers/Action Steps: Create a powerful self-assessment tool for cities to better clarify their economic development goals and identify their competitive strengths and weaknesses relative to other urban locations. Cities should work with a team of private sector developers to undertake an internal review of all aspects of the development process using the assessment tool. Providing ongoing economic development training for municipal leaders and managers that focuses on how to tailor responses to opportunities in different sectors is important.
Deal Breaker No. 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. Attitudes and opinions about individual cities, particularly those with a higher proportion of low-income households, change slowly, often lagging behind reality. As a result, firms, developers and location specialists may overlook business opportunities in urban areas. Businesses seeking new locations for their operations — and the location specialists those businesses employ — often initially explore various location possibilities from afar by checking Web sites to gather relevant data on local communities. It is difficult for local officials to even get a chance to “show their wares” to prospective businesses unless they have attractive, compelling and information-rich Web sites that provide the precise information that firms normally seek when making location decisions.
Key Deal Makers/Action Steps: Assist cities in making their Web sites more attractive, graphically rich, easy to navigate, and more useful to firms, developers, and location specialists. Improved Web sites 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 municipalities.
Deal Breaker No. 3: Specific urban site deficiencies can add excessive costs to doing business in older industrial cities. Municipal leaders in older areas must deal aggressively with a series of specific deficiencies that may inhibit firm location in their cities including public safety concerns, brownfield remediation, parking constraints and tax delinquency liability.
Key Deal Makers/Action Steps: Encourage cities to create urban overlay zoning districts in which there can be flexible use, expedited permitting, focused public safety efforts, and amenity packages essential to creating competitive advantage in an urban setting. Encourage the adaptive re-use of “grayfield” assets (e.g. abandoned shopping plazas) through appropriate zoning and regulation. Make changes in the brownfields regulatory program for the 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.
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