Counties Play an Important Role in Economic Development

County Commissioners Association of Ohio

Lunch and Learn:

County Economic Development Essentials

February 10, 2015

February 10, 2015 Presentation by Mark Barbash 1

Mark BarbashExecutive Vice President

Finance Fund

February 10, 2015 Presentation by Mark Barbash 2

• Statewide nonprofit financial intermediary • Est. in 1987 to connect communities with capital • To date, $296.4 million invested in housing, economic

development, & community facilities leveraging over $1.2 billion. • Economic Development • Small Business Lending• Health care facilities and equipment• Commercial Real Estate Development• Healthy Foods Retail

FINANCE FUND: WHO WE ARE

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What is Economic Development?

Economic and Demographic Trends

Major Long Term Economic Transition

Practice of Economic Development

Economic Development in Ohio

Counties in Economic Development

So, what do you do now?

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What is Economic Development?

• Improve the economic well-being…

• …Improve the quality of life

• …for a community or a region

• …by helping to create and/or retain jobs

• … growing incomes

• and the local tax base…

• …to provided needed services.

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What is Economic Development?

Community Development

Economic Development

Business Development

Housing & NeighborhoodsQuality of Life

Human ServicesEducation

InfrastructureWorkforceTech Based ED

Capital AccessMarketing

Attraction & RetentionEntrepreneurship

Infrastructure

Main Street

IncubatorsSmall Business

EntrepreneurshipFebruary 10, 2015

Difference between economic & community development?

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Economic and Demographic Trends Impacting Economic

Development

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The economy is recovering … employment is up….

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Unemployment is down…

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…but the recovery is slower than any other recession

76 months to recover

46 months to recover

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… and while productivity is up, wages & family income are not

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The country is going through a major long term

economic transition

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The younger talent pool is 40% less than retirement age pool

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The internet has accelerated business innovation & competition

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… manufacturing technology is increasing productivity

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… and education remains the best path to higher earnings

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The Practice of Economic Development is Changing in

Response

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Think, Plan & Act Regionally

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Think, Plan & Act Regionally

55% of County Workers Live Inside the County

45% of County Workers Live Outside the County

38% of County

residents work

outside the

county

Montgomery County Workforce Inflow / Outflow

• Companies are increasingly looking for a good quality of life for their employees and executives: • Arts, Culture & Recreation• Education• Diversity of Housing and Transportation Opportunities• looking for What makes your community special?

• What makes your community special?• Identify and leverage your strongest assets such as colleges,

universities, arts, natural resources, health care• Do asset mapping on a local AND regional basis• How is your community connected to your neighbors?

Place Matters: Enhance What Makes Your Community Livable

• Total Projects: 93 (47 Expansion, 46 New)– Projects connected with existing businesses: 78– Average Jobs: 181– High Jobs Number: 900 – Average Square Feet: 157,000– Average New Jobs: 256– Average New Square Feet: 203,000

• Big Deals: – 1 Project; 1,500 jobs, Mfg. 1M Sq. Ft.

Source: Site Selection Magazine

Death of the Big Deal

Strategy #3: Double Down on

Retention & Expansion

• Keeping existing businesses happy should be priority number 1!

• Why do businesses leave a home-town location: a lack of expansion space.

• New businesses look for customers, suppliers, strategic partners, and a quality workforce.

• The best Attraction Strategy is a strong Retention & Expansion Strategy.

Double Down on Retention & Expansion

• Communities that are working together in their regions are more successful in business attraction, retention and expansion

• …and the site selectors are paying attention.

• Do you understand what drives your economy?

• Do you have a partnership group that is broadbased, has assigned responsibilities, and is networked with the region and the state?

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Collaboration is the New Competition

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What Matters Most to Site Selectors:1. State and Local Tax Structure

2. Transportation & Utility Infrastructure

3. Land/Building Prices & Supply

4. Ease of Permitting and Regulatory Process

5. Workforce Skills

6. Regional Economic Development Strategy

7. Legal Climate

8. Availability of Incentives

9. State Economic Development Strategy

Collaboration is the New Competition

• Main Street Revitalization

• Small Business Technical Assistance

• Tech Based Entrepreneurship

• Economic Gardening

• Small Business Supply Chain

• 1099 Economy

• Incubation vs. Acceleration

Emphasize the Entrepreneurial Strategy that Fits Your Community

• 90% of the research by a site selection company is done BEFORE you are contacted

• Have a user-friendly website

• Link your site with your regional economic development partner

• Easily accessible public services

• Keep your inventory of sites up to date

Technology has Changed the Practice of Economic Development

• Retention and Expansion

• Attraction

• Workforce Development

• Main Street Revitalization

• Leverage a major regional asset

• Tourism

• Arts and Culture

• Targeted Industry or Industry Cluster

Develop a Mix of Strategies that Responds to Your Community

• Use incentives strategically

• Create local incentives that make sense for your community

• Provide for transparency and accountability

• The fewer the programs, the easier the deal

• You DON’T need to give away the kitchen sink: Be strategic with your investment.

Fine Tune Your Financing and Incentive Toolkit

Property Taxes based upon Valuation

Sales Taxes based upon Sales Revenue

Income Taxes based upon Wages

Property Taxes based upon Valuation

Fees and Transfer Payments from other govt sources

It’s all about the Fiscal Impact of Your Investments

Cost

• Short term Investment in infrastructure, grants

• Roadway construction AND maintenance

• Cost of tax incentives (forgone revenue)

• Political

• Environmental impact

Benefit

• Property, income or sales tax revenue

• Fee revenue

• Payments in Lieu

• New Job Opportunities

• Revitalized neighborhoods

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Understand the ROI of Your Incentives and Investments

Take Informed Risk!

The Structure of Economic Development in Ohio

• Economic Development• Business Attraction• Industry Growth• International Business • Regional Network

Partners

• Community Development• Housing & Partnerships• Historic Prez Tax Credits• Ohio Third Frontier• Energy Office• Small & Minority

Business

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The Structure of Economic Development in Ohio

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JobsOhio Network Partners

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The Structure of Economic Development in Northwest Ohio

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Economic Development Incentives: Rules of the Game

• Start early• Explain the strings up front. • There are NO programs that provide 100% support• Work with your economic development

professional• Work with your JobsOhio Network Partner• Not all projects can work with programs• Be prepared to take informed risk. • Be willing to walk away.• If it sounds too good to be true, it probably is!

February 10, 2015

Economic Development Incentives: What else is an incentive?

• Expedited permit review and processing• Local one-stop-shop • Have all key people at the table• Infrastructure: Roadways, traffic signals, rail spurs,

connectivity• Workforce partnerships with colleges/universities• A “job ready” site• Adequate sewer, water, utility service• A good place to live, work and raise a family.

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The Role and Challenges of Counties in Economic

Development

• Counties are Sponsors of Local Economic Development Initiatives

• Workforce Challenges are at the Top of the County Economic Development Agenda

• Collaboration is the Key to County Economic Development Initiatives

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NACO, July 2014

The Role and Challenges of Counties in Economic Development

Working Collaboratively

1. Developing the Regional Perspective

2. How to distinguish County priorities

3. How to link County priorities with City Priorities

4. Rural – Urban -- Suburban

5. Larger Urban Community in the County

6. No Urban Community in the County

7. Community College or University in County

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The Challenges of Counties in Economic Development

Fiscal Challenges

1. Conflicting Priorities based on Fiscal Structure

2. Limited Financial Resources

3. Entitlement vs. Non-Entitlement

4. Others Jurisdictions Spending Your Resources

5. Limited authority

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The Challenges of Counties in Economic Development

Ohio County Economic Development Tools

1. Infrastructure Investment

2. Highway maintenance

3. Workforce Development (WIB)

4. Land Banks

5. County level organization

6. Planning and Zoning

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The Challenges of Counties in Economic Development

Presentation by Mark Barbash 42February 10, 2015

So where do you go from here?

• Is there a county wide economic development strategy with performance measurement?

• Have you established priorities, goals, tasks, with assigned leads ?

• Is there a Collaborative Partnership?• How inclusive is the partnership?• Is there a working group of EDPros from the

region?• Is there a toolbox that is appropriate to your

community and priorities ?

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Next Steps: Some Benchmarks and Questions

So What’s the Dessert?

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Mark Barbash, EVP, Strategic [email protected]

(614) 774-7599

Finance Fundwww.financefund.org

(800) 959-2333 - (614) 221-1114