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Framework for Creating a Smart Growth Economic Development Strategy: a Tool for Small Cities and Towns

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Framework for Creating a Smart Growth Economic Development Strategy: a Tool for Small Cities and Towns United States EPA 231-R-15-003 Environmental Protection Agency January 2016 www.epa.gov/smartgrowth FRAMEWORK FOR CREATING A SMART GROWTH ECONOMIC DEVELOPMENT STRATEGY: A TOOL FOR SMALL CITIES AND TOWNS Office of Sustainable Communities Smart Growth Program Project Contact: Melissa Kramer Office of Sustainable Communities U.S. Environmental Protection Agency 1200 Pennsylvania Ave. NW (MC 1807T) Washington, DC 20460 Tel 202-564-8497 [email protected] All photos courtesy of EPA. i TABLE OF CONTENTS I. Introduction .............................................................................................................................. 1 II. Getting Started: Smart Growth Economic Development Key Concepts .................................. 3 III. Preparing a Smart Growth Economic Development Strategy .................................................. 6 STEP 1. Select a Focus Area .................................................................................................................... 6 STEP 2. Define the Context .................................................................................................................... 6 STEP 3. Set Goals .................................................................................................................................... 7 STEP 4. Identify Existing Assets and Barriers ....................................................................................... 15 STEP 5. Select the Right Tools .............................................................................................................. 15 I. INTRODUCTION Many small and mid-sized cities around the United States are struggling because their economies were built largely on a single economic sector that has changed significantly. For example, at one time jobs might have been heavily concentrated in industries like logging, mining, or manufacturing, but technology and market forces have transformed these sectors, and they no longer employ a large workforce. Changing circumstances, such as those caused by resource depletion, globalization, or shifts in consumer preferences, can shake the economic foundations of these communities, leaving people without jobs and cities without a healthy tax base. Rather than simply seeking to attract major employers to replace these lost jobs, several cities have tried a different method to anticipate and overcome some of these challenges. This emerging shift toward place-based approaches to economic development can go by various names. This document uses the term “smart growth economic development” to refer to a strategy that builds upon existing assets, takes incremental actions to strengthen communities, and builds long-term value to attract a range of investments. This smart growth economic development tool is a step-by-step guide to building a place-based economic development strategy. The U.S. Environmental Protection Agency (EPA) developed this tool with the assistance of CH2M Hill and Strategic Economics as part of a Smart Growth Implementation Assistance project in Kelso, Washington.1 The tool is intended for small and mid-sized cities, particularly those that have limited population growth, areas of disinvestment, and/or a struggling economy. This tool begins with an overview of key concepts for a smart growth economic development strategy (Chapter II). Next, it covers the five steps for preparing a smart growth economic development strategy (Chapter III): 1. Select the focus area. 2. Define the context. 3. Set the goals. 4. Identify existing assets and barriers. 5. Select the right tools. This step-by-step process for preparing a smart growth economic development strategy is based on six principles: 1. Make the distinction between “growth” and “investment.” 2. Be tactical and strategic. 3. Be focused. 4. Start where there is already momentum. 5. Find the right partners for specific goals. 6. Communicate and coordinate. 1 For more information about the project and an example of the tool in action, see: EPA. Using Smart Growth Strategies to Foster Economic Development: A Kelso, Washington, Case Study. 2015. http://www.epa.gov/smartgrowth/using-smart-growth- strategies-foster-economic-development. 1 Creating a robust economic development strategy often takes a concerted effort of multiple partners coming together around a common goal. Staff from municipal governments and regional economic development organizations, nonprofit organizations seeking to help revitalize communities, and other stakeholders could use this tool to help guide their work. It presents a framework for information to gather, issues to consider, and potential approaches to explore. Every community and place is different, and communities can modify and refine this tool based on local conditions. 2 II. GETTING STARTED: SMART GROWTH ECONOMIC DEVELOPMENT KEY CONCEPTS Many communities are finding success cultivating a competitive advantage by using their unique assets to attract new investment and support existing businesses. These place-based assets might include residents and their skills; local architecture and infrastructure; academic, technical, and medical institutions; local and regional business and employment concentrations; cultural, natural, and artistic resources; and general quality of life. What distinguishes smart growth economic development from conventional economic development is the emphasis on building on these existing community assets, rather than pursuing jobs or tax base growth without particular regard for location or synergies among existing assets. The three core components of a smart growth economic development strategy are supporting businesses, supporting workers, and supporting quality of life (Exhibit 1). • Supporting Businesses. Supporting and expanding existing businesses and attracting new businesses contribute to economic development in several key ways, including helping businesses create jobs, encouraging entrepreneurship, enhancing fiscal sustainability by expanding and diversifying the tax base, and improving quality of life with new services and amenities. This component of a smart growth economic development strategy focuses on understanding the current composition and location of businesses, jobs, and potential Exhibit 1. The smart growth economic development emerging entrepreneurs in the community. strategy has three core components. This information can help reveal how well the businesses serve local residents and contribute to quality of life and which industries have the most potential to drive economic growth in the future. Targeting key economic sectors for growth allows city and regional staff to direct their economic development efforts in a strategic manner, which helps small towns use their limited resources wisely. This part of the smart growth economic development strategy considers not only the businesses and industries with the greatest growth potential, but also where these businesses are located and how their location helps the community meet its economic, environmental, and other goals. • Supporting Workers. Workforce development is important to ensuring that residents can successfully compete for employment opportunities and that all residents have the opportunity to benefit from economic prosperity. The availability of a workforce with a wide range of skills and education levels can help local businesses grow and attract new businesses. By offering residents opportunities to learn skills for a wide range of jobs, workforce development efforts might also reduce the need for residents to commute long distances to find appropriate 3 employment, thereby improving quality of life Exhibit 2. Kelso, Washington. and reducing pollution from vehicles. This smart growth economic development Kelso, Washington, illustrates how a smart component focuses on how well the skills and growth economic development strategy education of the local workforce align with the might build upon and improve conventional needs of existing and growing industries and economic development approaches. A provides insight into what the community major food processer opened a plant in the could do to help workers better match city’s industrial area several years ago. businesses’ needs. According to city staff, the company has had trouble retaining workers, in part • Supporting Quality of Life. Residents and because many workers do not have cars businesses both value a community with a and the factory is not well served by good quality of life. A variety of factors can transit. At the same time, residents of the improve quality of life, such as a thriving adjacent neighborhood struggle with downtown or commercial district with unemployment. neighborhood-serving shops and restaurants; green and open space; a variety of A smart growth economic development transportation choices, including options for approach to the workforce retention walking, biking, driving, and public transit; problem evaluates ways to more directly artistic, cultural, and community resources connect people and resources across the such as museums, public art, community city with businesses and job opportunities centers, religious institutions, and other than would be typical with conventional community gathering spaces; and medical, approaches to economic and workforce technical, and academic institutions. Aesthetic development, neither of which tend to be improvements might include green “place” or neighborhood based. For infrastructure such as trees and other example, conventional economic vegetation
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