County Commissioners Association of Ohio Lunch and Learn: County Economic Development Essentials February 10, 2015 Mark Barbash Executive Vice President Finance Fund February 10, 2015 Presentation by Mark Barbash 1
FINANCE FUND: WHO WE ARE 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 February 10, 2015 Presentation by Mark Barbash 2
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? February 10, 2015 Presentation by Mark Barbash 3
What is Economic Development? February 10, 2015 Presentation by Mark Barbash 4
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. February 10, 2015 Presentation by Mark Barbash 5
Difference between economic & community development? February 10, 2015 Community Development Economic Development Business Development Housing & Neighborhoods Quality of Life Human Services Education Infrastructure Workforce Tech Based ED Capital Access Marketing Attraction & Retention Entrepreneurship Infrastructure Main Street Incubators Small Business Entrepreneurship
Economic and Demographic Trends Impacting Economic Development February 10, 2015 Presentation by Mark Barbash 7
The economy is recovering employment is up. February 10, 2015 Presentation by Mark Barbash 8
Unemployment is down February 10, 2015 Presentation by Mark Barbash 9
but the recovery is slower than any other recession 46 months to recover 76 months to recover February 10, 2015 Presentation by Mark Barbash 10
and while productivity is up, wages & family income are not February 10, 2015 Presentation by Mark Barbash 11
The country is going through a major long term economic transition February 10, 2015 Presentation by Mark Barbash 12
The younger talent pool is 40% less than retirement age pool February 10, 2015 Presentation by Mark Barbash 13
The internet has accelerated business innovation & competition February 10, 2015 Presentation by Mark Barbash 14
manufacturing technology is increasing productivity February 10, 2015 Presentation by Mark Barbash 15
and education increases as the main path to higher earnings February 10, 2015 Presentation by Mark Barbash 16
The Practice of Economic Development is Changing in Response February 10, 2015 Presentation by Mark Barbash 17
Think, Plan & Act Regionally February 10, 2015
Think, Plan & Act Regionally Montgomery County Workforce Inflow / Outflow 55% of County Workers Live Inside the County 38% of County residents work outside the county 45% of County Workers Live Outside the County February 10, 2015 Presentation by Mark Barbash 19
Place Matters: Enhance What Makes Your Community Livable 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?
Death of the Big Deal 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, May 2014
Strategy #3: Double Down on Retention & Expansion 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.
Collaboration is the New Competition 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? February 10, 2015
Collaboration is the New Competition 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 February 10, 2015 Presentation by Mark Barbash 24
Emphasize the Entrepreneurial Strategy that Fits Your Community Main Street Revitalization Small Business Technical Assistance Tech Based Entrepreneurship Economic Gardening Small Business Supply Chain 1099 Economy Incubation vs. Acceleration
Technology has Changed the Practice of Economic Development 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
Develop a Mix of Strategies that Responds to Your Community Retention and Expansion Attraction Workforce Development Main Street Revitalization Leverage a major regional asset Tourism Arts and Culture Targeted Industry or Industry Cluster
Fine Tune Your Financing and Incentive Toolkit Use state 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.
It s all about the Fiscal Impact of Your Investments Property Taxes based upon Valuation Income Taxes based upon Wages Property Taxes based upon Valuation Sales Taxes based upon Sales Revenue Fees and Transfer Payments from other govt sources
Understand the ROI of Your Incentives and 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 Take Informed Risk! February 10, 2015 County Economic Development Essentials Mark Barbash30
The Structure of Economic Development in Ohio
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 February 10, 2015
JobsOhio Network Partners February 10, 2015 Presentation by Mark Barbash 33
The Structure of Economic Development in Northwest Ohio February 10, 2015
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. February 10, 2015
The Role and Challenges of Counties in Economic Development February 10, 2015 Presentation by Mark Barbash 37
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 NACO, July 2014 February 10, 2015 Presentation by Mark Barbash 38
The 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 February 10, 2015 Presentation by Mark Barbash 39
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 February 10, 2015 Presentation by Mark Barbash 40
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 February 10, 2015 Presentation by Mark Barbash 41
So where do you go from here? February 10, 2015 Presentation by Mark Barbash 42
Next Steps: Some Benchmarks and Questions 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? February 10, 2015 Presentation by Mark Barbash 43
So What s the Dessert? February 10, 2015 Presentation by Mark Barbash 44
Mark Barbash, EVP, Strategic Initiatives markbarbash@financefund.org (614) 774-7599 Finance Fund www.financefund.org (800) 959-2333 - (614) 221-1114