1. SANITY AND INSANITY IN GOVERNMENTAL COOPERATION Chuck Eckenstahler Michigan Economic Developers Association Economic Development; Pushing the Boundaries December 4, 2009

2. Introduction

Economic Development models -

Old Norm

- Race for tax rateables

New Norm

• - Regional cooperation

The role of economic developers?

If you dont have a dream.. ..you never get anything done! CIA Chair John Brielmaier 9/30/09 3. Sourced from: Rethinking Federal Policy forRegional Economic Development . By: Drabenstott, Mark.EconomicReview (01612387), 2006 1st Quarter, Vol. 91 Issue 1, p115-142, 28p; ( AN 20356049 ) * With additions by: Professor Anthony B. Sindone, Purdue University North Central, College of Business and Organizational Leadership-[email_address] Chuck Eckenstahler [email_address] 10/29/2009 Qualified Workforce Expanding Labor Pool Complementary Human Capital Connectiveness Distinct Regional assets, such as: Human Capital Higher Education Amenities Health of Existing BusinessesGovernment Funds Subsidies and TaxBreaks Industrial Infrastructure Keys to Success Education Training Workforce Talent Clusters Community Place Making Social Networking Entrepreneurship Clusters Commercializing Research Industry Consolidation andCost Cutting Deregulation Financial Incentives toFirms Industrial Parks Strategies Workforce Education and Training Skill Set Cross Utilization Workforce OccupationalMobility Social Capital Innovation andEntrepreneurship Scale Economies Export Base Drivers Occupational Skills Present to Future * Regional Competitiveness Early 1990s to Present Cost Competition Early 1080s to Early 1990s Industrial Recruiting 1950s to early 1980s ERAS IN REGIONAL ECONOMIC DEVELOPMENT AND PRACTICE 4. PEORIA RANKED NUMBER 16FOR MIGHTY MICRO CITIES Next Generation Consulting (NGC): 5. Post Recession Economic Development Survey

1. Small businesses will increase job countsmore quickly than larger businesses

2. It is easier to expand the job base of anexisting company than locate a new one

3. Entrepreneurial start-up businesses sponsora locally connected job base

4. Lack of traditional financing sources will limitstart-up and second stage businessgrowth

5. Regional collaboration is needed for nationaland global business recruitment efforts

6. Post Recession Economic Development Survey

6. Partnering with others increases funds foradvertising and promotion

7. Supply chain business recruitment is superiorto shot gun recruitment attempts

8. Targeted business recruitment will change asnew post recession business linkages form

9. Community preparedness; existing sites,buildings & workforce will no longer optional

10. Pre-approved incentives increase chances forsuccess

7. The New Norm

1. BER* stop out migration and job loss

2. Combined recruitment to increasefunding and reach

3. Area wide branding to increase globalidentity

4. Focused approach using web basedmarketing & communications

5. Focus on supplier/vendorrelationships

*BER business expansion and retention

8. The New Norm

6. Cluster Analysis identifyingRegional Competitive Advantage

7. Pre-Packaging of incentives

8. Shovel ready site availability

9. Incentive tied to job creation

10. Focus on small business,entrepreneurialism and researchcommercialization.

9. Importance ofNew Business Formation New jobs created by businesses with less than 20 employees 1980-90 - 56% 1990-95 49% SBA Data * 1979 David L. BirchThe Jobs Generation Process 2/3 new jobs created by small businesses 10. Where will the Jobs Come From? 2/3 jobs created by young businesses Where will the Jobs Come From? Kaufmann Foundation November 5, 2009 2006 - 2007 11. Where will the Jobs Come From? SBA approves 36%fewer loans in FY 2009 $3.9b less than 2008 WSJ 11/19/2009 12. Michigan's Cooperation Tool Kit Do we have all the tools we need?

Act 7 Intergovernmental Cooperation Act

Act 425 tax base sharing

Authorities 8 + TIFS

Joint participation laws

• • Joint Municipal Planning Act

Nonprofit corporations

L3C Socially Responsible LLC

New Michigan Development Act - HB 5346

My opinion we do!

13. We can conclude..

New legislation

cannot mandate

theNew Norm

14. What Prompts Cooperation

Mandates MPEA, MPO, EDA-EDD

Fed. Project Notification (A-95 Review)

Increased financial advantages MNRTF

Shared financial responsibilities municipal authorities

Financial need

Political pressure

• Perceived cost savings

• Perceived increase

• (or no loss) of services

15. What Prompts Cooperation K-12 Population 2010 2030 Nationally 15.7% growth Michigan 7.9% growth 142 district to loose 10-15% enrollment 21 districts to loose 26-50% enrollment Detroit Schools Enrolment loss 70,000 last 7 years2008 student capacity 153,000 After downsizing capacity 90,000 20 of 192 schools closed 28 more school closings suggested19 new or remolded school

• Better government management

• right sizing government

16. Live Within Your Means

School Bond Issue Ballot History

1,273 issues 1995 - 2008

• 49.7% approved

• 85 average annual issues

• range 17 166 per year

2009

• 17 issues

• 12 replacement - 5 increase

• 10 replacement approved

• 2 increase approved

17. SANITY Says

1. We have tools to cooperate

2. We must by certain laws andgrant assistance leverage

3. We probably dont have a choicein some instances(infrastructure)

4. Might need to due to politicalpressure

5. Might need to due to financialnecessity

18. INSANITY Barriers Include

1. Historical mind set aboutgovernmental structure

2. Tax revenue need

3. Suspicion and lack of trust

4. Lack of experience

19. Attitude Change Agents

1. Impending doom low tide -

• lowers all boats syndrome

2. The Michigan Miracle

3. Defining moment

changing state/Midwest

economic competitiveness

• By the late 1990s, many national

• observers were shaking their heads

• in wonder at the improbable

• economic turnaround, which became

• known as The Michigan Miracle.

20. Drivers of the New ED Norm

1. Place and Social Capital

2. Community based leadership

3. Innovative governance

4. Making our own way

vision and action steps

5. Realizing doom can happen

6. Realization total community isgreater than the sum of its parts

7.Realization success will be drivenfrom within

21. EXAMPLE COOPERATION UPTOWNCORRIDOR IMPROVEMENT AUTHORITY

Formed July 13, 2009

District parcels - 138 5 in Township

Township front-end loan to CIA

Township supports CIA goals create a compactdowntown with commercial entryways

$8.4m infrastructure & streetscape

Development Tax Increment Financing Plan

Hearing/adoption December 14, 2009

Support by College and County

22. What made this Cooperation Work

Strong Leadership by Civic and

Political Leaders

Recognition of a Vision based on

Sound Planning Principles

Were All in it Together Now

Place Matters

We Have to Take Advantage of It

If you dont have a dream..

..you never get anything done!

23. Questions

Chuck Eckenstahler

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