Why New Tools are Needed

 

Potential developers bring proposals to the City requesting assistance in the form of tax incentives when they believe the potential for return on their investment is present. Reacting to their requests, the City evaluates the proposals under the City’s Economic Development Plan to determine if granting tax incentives is in the best interest of the City. 

 

Economic development does not occur in this manner in distressed areas of the City, however, because of the unique economic issues that exist in those areas. Seeing this, the Mayor concluded that “new tools” must be designed that will allow economic development to occur using the human and material assets already existing within the distressed communities, while creating new incentives and redesigning existing incentive programs to fit the reality of distressed areas.

 

 

In May, 2008, Mayor Funkhouser convened a Symposium of thirty five community leaders and elected officials to discuss the feasibility of developing a set of “New Tools” for economic development in distressed areas of the City. 

 

After a day of deliberation, the participants agreed that the economic development tools that have worked well in the downtown area – such as Tax Increment Financing, Chapter 100, and Chapter 353 – are not equally well suited for economically distressed areas of the city.   Developers of big projects choose to avoid areas that are economically disadvantaged because of high risks, high costs and low investment returns associated with development in such areas.

 

The Symposium members decided that new tools are needed for economic development in distressed areas, and that a New Tools Plan should be developed that:

 

On July 21, 2008, the Mayor convened a follow-up meeting to discuss detailed strategies and tools to be contained in the City’s New Tools Plan. Most of the participants in the first Symposium also attended this meeting, along with new representatives from the banking industry and community development. 

 

Meeting participant reached a consensus that economic development in the City’s economically distressed areas must focus on developing individuals as well as businesses. They decided that the outcomes of a comprehensive bottom-up-plan for economic development in distressed areas should:

 

On September 4, 2008, the Mayor moved the New Tools Plan forward by introducing legislation to establish an “Economically Distressed Areas Economic Development Task Force.” The legislation was adopted by the City Council. The purpose of the new Task Force was defined as follows: “To obtain the input of the stakeholders in economic development in the community and to develop a plan to encourage the economic development of economically distressed areas of the City, which should include…: Setting priorities … and establishing a bottom-up structure that focuses on individuals, families, and neighborhoods.”

In subsequent legislation, the Task Force was enlarged from 20 to 30 members and funding was allocated to support the work of the Task Force. The Task Force was fully appointed and began its work in November 2008, under the leadership of Ajamu Webster, Owner of Dubois Engineering Consultants, as Chair. 
 

After funding was finalized in March 2009, the Task Force was able to hire Shockey Consulting Services, LLC, to assist it in conducting its meetings and maintaining a record of its proceedings. A number of community outreach personnel were also hired who were charged with the task of engaging residents in the defined areas and securing their input into the design of economic development strategies suitable to their area.

New Tools Task Force Report
The New Tools Task Force is producing a final report of their findings.  We will post it here in the next few weeks.