Framework For Creating A Smart Growth Economic Development .
United StatesEnvironmental ProtectionAgencyEPA 231-R-15-003January 2016www.epa.gov/smartgrowthFRAMEWORK FOR CREATING A SMART GROWTHECONOMIC DEVELOPMENT STRATEGY:A TOOL FOR SMALL CITIES AND TOWNSOffice of Sustainable CommunitiesSmart Growth Program
Project Contact: Melissa KramerOffice of Sustainable CommunitiesU.S. Environmental Protection Agency1200 Pennsylvania Ave. NW (MC 1807T)Washington, DC 20460Tel 202-564-8497kramer.melissa@epa.goviAll photos courtesy of EPA.
TABLE OF CONTENTSI. Introduction . 1II. Getting Started: Smart Growth Economic Development Key Concepts . 3III. Preparing a Smart Growth Economic Development Strategy . 6STEP 1. Select a Focus Area . 6STEP 2. Define the Context . 6STEP 3. Set Goals . 7STEP 4. Identify Existing Assets and Barriers . 15STEP 5. Select the Right Tools . 15
I. INTRODUCTIONMany small and mid-sized cities around the United States are struggling because their economies werebuilt largely on a single economic sector that has changed significantly. For example, at one time jobsmight have been heavily concentrated in industries like logging, mining, or manufacturing, buttechnology and market forces have transformed these sectors, and they no longer employ a largeworkforce. Changing circumstances, such as those caused by resource depletion, globalization, or shiftsin consumer preferences, can shake the economic foundations of these communities, leaving peoplewithout jobs and cities without a healthy tax base.Rather than simply seeking to attract major employers to replace these lost jobs, several cities havetried a different method to anticipate and overcome some of these challenges. This emerging shifttoward place-based approaches to economic development can go by various names. This documentuses the term “smart growth economic development” to refer to a strategy that builds upon existingassets, takes incremental actions to strengthen communities, and builds long-term value to attract arange of investments.This smart growth economic development tool is a step-by-step guide to building a place-basedeconomic development strategy. The U.S. Environmental Protection Agency (EPA) developed this toolwith the assistance of CH2M Hill and Strategic Economics as part of a Smart Growth ImplementationAssistance project in Kelso, Washington. 1 The tool is intended for small and mid-sized cities, particularlythose 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):1.2.3.4.5.Select the focus area.Define the context.Set the goals.Identify existing assets and barriers.Select the right tools.This step-by-step process for preparing a smart growth economic development strategy is based on sixprinciples:1.2.3.4.5.6.Make the distinction between “growth” and “investment.”Be tactical and strategic.Be focused.Start where there is already momentum.Find the right partners for specific goals.Communicate and coordinate.1For more information about the project and an example of the tool in action, see: EPA. Using Smart Growth Strategies toFoster Economic Development: A Kelso, Washington, Case Study. 2015. trategies-foster-economic-development.1
Creating a robust economic development strategy often takes a concerted effort of multiple partnerscoming together around a common goal. Staff from municipal governments and regional economicdevelopment organizations, nonprofit organizations seeking to help revitalize communities, and otherstakeholders could use this tool to help guide their work. It presents a framework for information togather, 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 ECONOMICDEVELOPMENT KEY CONCEPTSMany communities are finding success cultivating a competitive advantage by using their unique assetsto attract new investment and support existing businesses. These place-based assets might includeresidents and their skills; local architecture and infrastructure; academic, technical, and medicalinstitutions; local and regional business and employment concentrations; cultural, natural, and artisticresources; and general quality of life. What distinguishes smart growth economic development fromconventional 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 amongexisting assets.The three core components of a smart growth economic development strategy are supportingbusinesses, supporting workers, and supporting quality of life (Exhibit 1). Supporting Businesses. Supporting andexpanding existing businesses and attractingnew businesses contribute to economicdevelopment in several key ways, includinghelping businesses create jobs, encouragingentrepreneurship, enhancing fiscalsustainability by expanding and diversifyingthe tax base, and improving quality of lifewith new services and amenities. Thiscomponent of a smart growth economicdevelopment strategy focuses onunderstanding the current composition andlocation of businesses, jobs, and potentialExhibit 1. The smart growth economic developmentstrategy has three core components.emerging entrepreneurs in the community.This information can help reveal how well thebusinesses serve local residents and contribute to quality of life and which industries have themost potential to drive economic growth in the future. Targeting key economic sectors forgrowth allows city and regional staff to direct their economic development efforts in a strategicmanner, which helps small towns use their limited resources wisely. This part of the smartgrowth economic development strategy considers not only the businesses and industries withthe greatest growth potential, but also where these businesses are located and how theirlocation helps the community meet its economic, environmental, and other goals. Supporting Workers. Workforce development is important to ensuring that residents cansuccessfully compete for employment opportunities and that all residents have the opportunityto benefit from economic prosperity. The availability of a workforce with a wide range of skillsand education levels can help local businesses grow and attract new businesses. By offeringresidents opportunities to learn skills for a wide range of jobs, workforce development effortsmight also reduce the need for residents to commute long distances to find appropriate3
employment, thereby improving quality of lifeand reducing pollution from vehicles. Thissmart growth economic developmentcomponent focuses on how well the skills andeducation of the local workforce align with theneeds of existing and growing industries andprovides insight into what the communitycould do to help workers better matchbusinesses’ needs. Supporting Quality of Life. Residents andbusinesses both value a community with agood quality of life. A variety of factors canimprove quality of life, such as a thrivingdowntown or commercial district withneighborhood-serving shops and restaurants;green and open space; a variety oftransportation choices, including options forwalking, biking, driving, and public transit;artistic, cultural, and community resourcessuch as museums, public art, communitycenters, religious institutions, and othercommunity gathering spaces; and medical,technical, and academic institutions. Aestheticimprovements might include greeninfrastructure such as trees and othervegetation that help improve the pedestrianenvironment while absorbing rainwater andimproving water and air quality. This smartgrowth economic development element alsoincludes identifying key locations fordevelopment and redevelopment in the city’score, including brownfields and infill sites.The step-by-step process for preparing a smart growtheconomic development strategy (presented in ChapterIII) is based on six principles that are useful to considerbefore beginning:1. Make the distinction between “growth” and“investment.” Not all communities arenecessarily growing. However, in most cases,businesses, individuals, and/or public agenciescontinue to make investments in thecommunity even during periods of populationdecline. Building on ongoing investment(s),4Exhibit 2. Kelso, Washington.Kelso, Washington, illustrates how a smartgrowth economic development strategymight build upon and improve conventionaleconomic development approaches. Amajor food processer opened a plant in thecity’s industrial area several years ago.According to city staff, the company hashad trouble retaining workers, in partbecause many workers do not have carsand the factory is not well served bytransit. At the same time, residents of theadjacent neighborhood struggle withunemployment.A smart growth economic developmentapproach to the workforce retentionproblem evaluates ways to more directlyconnect people and resources across thecity with businesses and job opportunitiesthan would be typical with conventionalapproaches to economic and workforcedevelopment, neither of which tend to be“place” or neighborhood based. Forexample, conventional economicdevelopment might not consider a fullrange of transportation options to addressworker mobility.Alternatively, a smart growth economicdevelopment strategy might includeestablishing a program to recruit nearbyresidents to work at businesses in the city’sindustrial areas and creating a transit oractive transportation system. For example,a safe and convenient bike route could letworkers easily get to and from workwithout a car.These actions would improve employeeretention and help Kelso residents reachmuch-needed jobs while also making moredestinations accessible without a car,reducing traffic congestion and airpollution.
rather than “growth” as defined by increasing employment, population, or tax base, is essentialto reinvigorate a struggling economy.2. Be tactical and strategic. A smart growth economic development plan should include broad,long-term strategies that set overall direction and objectives for any economic developmentrelated activities and investments. The plan should also identify short-term, tactical actions thataddress specific barriers or challenges to attaining the longer-term vision. While the long-termstrategies might not change for several years, tactics should be updated on a regular basis toreflect changing conditions and opportunities.3. Be focused. Investments of time, money, and other community resources are most effectivewhen targeted to an area that is both big enough to offer opportunities for change and smallenough to make tangible, visible improvements that will spur investment. Over time, small focusareas can be expanded to build on successes.4. Start where there is alreadymomentum. Economicdevelopment efforts are mosteffective in places where there isalready some private-sectoractivity so that public investmentscan reinforce and supportinvestment by individualhomeowners, business owners,commercial property owners,and/or banks and other financialinstitutions. Once these initialinvestments start to show success,it will be easier to attractadditional investment to nearbylocations, thus spreading themomentum incrementally overtime.Exhibit 3. Traverse City, Michigan. Recognizing that its regionalidentity and economy depend on access to Lake Michigan, the cityrenovated its waterfront park in 2013, the first project to beimplemented under its comprehensive Bayfront Plan.5. Find the right partners for specific goals. Successful economic development efforts rely onpartnerships across public agencies, especially when different types of funding are involved.Engaging these partners for specific and mission-appropriate goals is more effective than tryingto seek support for broad or poorly defined initiatives. Communities might also set goals to alignwith specific funding sources to improve the odds of securing money for implementation.6. Communicate and coordinate. Good communication and coordination among groups andagencies can help ensure that all available resources support the community’s vision. For smallcities with limited resources, this coordination can help achieve goals at minimal cost byavoiding redundancy, conflicting efforts, and/or spreading resources too thin for meaningfulimprovement.5
III. PREPARING A SMART GROWTH ECONOMIC DEVELOPMENTSTRATEGYThe decision to create an economic development strategy can arise from a variety of circumstances. Forexample, communities might create an economic development strategy: In the wake of a crisis, like a major employer shutting down, a natural disaster, or the need toclean up a site with contaminated soil and/or ground water.To help older neighborhoods, including the downtown, that suffer from long-termdisinvestment.To take advantage of a specific event or opportunity such as a major infrastructure investment.Regardless of the reason, communities can benefit by following a defined process to make sure thateconomic development efforts will havethe greatest chance of meeting thecommunity’s needs and goals. Preparing asmart growth economic developmentstrategy has five key steps:A.B.C.D.Select a focus area.Define the context.Set goals.Identify existing assets andbarriers.E. Select the right tools.STEP 1. SELECT A FOCUS AREAExhibit 4. Harpers Ferry, West Virginia. Sitting at the confluenceThe initial step in preparing a smart growthof the Potomac and Shenandoah rivers, the city’s location hasalways been a key asset. Now its National Historic Park leverageseconomic development strategy is to pickthis long history to attract visitors.the specific location(s), neighborhoods, orarea(s) of focus. Each area will havedistinct goals, indicators, and appropriate tools for implementation. For example, the needs ofbusinesses in an industrial area are likely to be very different than those of downtown merchants.Whether a community is preparing a strategy for an entire city or one district or neighborhood, thereare likely to be multiple subareas, each of which are defined by distinct land use patterns and/orpurposes. In fact, the emphasis on specific place-based assets within a community distinguishes smartgrowth economic development strategies from more conventional approaches.STEP 2. DEFINE THE CONTEXTThis step involves a community preparing a description of conditions in the targeted area based onqualitative and quantitative information. To the extent possible, this description should include thehistory of prior initiatives by both public and private-sector actors, indicating which were successful,which were unsuccessful, and which might prove to be helpful but have not yet had much impact.6
Because economic developmentdeals with jobs, industries, and taxrevenues, communities sometimesdo extensive data collection andanalysis before defining theireconomic development goals.While data can play a critical role indefining the existing context andchallenges for a focus area,extensive data collection andanalysis in the early phases ofdeveloping an economicdevelopment strategy might not benecessary, especially for smallExhibit 5. St. Michaels, Maryland. The town of just over 1,000 people takescommunities where detailed dataadvantage of its location on the Chesapeake Bay with a waterfront seafoodmight not exist or be readilyrestaurant and a Maritime Museum on the site of a former seafood packingavailable for the focus area. Inhouse and cannery.addition, communities mightconsider a broader range ofinformation than traditionally considered in an economic development strategy—information designedto help identify place-based assets and challenges. Such information might include walkability audits,cultural inventories, bus route mapping, or community values surveys.STEP 3. SET GOALSAnother step in creating an effective smart growth economic development strategy is identifying cleargoals connected to specific conditions in the focus area. These goals should be aspirational butachievable. The list of potential goals below is not comprehensive; cities will probably need to eitherrefine these goals based on local conditions or develop their own, more specific goals. The goals aredivided into three categories—supporting businesses, supporting workers, and supporting quality oflife—based on the components of a smart growth economic development strategy. This sectionconcludes with a table listing these goals with a data indicator for each that can help the city track itsprogress toward achieving that goal and a target direction (i.e., the direction the indicator should moveto signify progress). The table also lists potential data sources for each indicator and links to thosesources where available. Step 5 lists policy tools and actions that can help achieve these goals. Followingeach goal is a list of the corresponding policy tools and actions from Step 5.1. Supporting BusinessesGoals in this section are intended to help local businesses grow and attract new businesses. Actions tomeet these goals can help businesses create jobs, encourage entrepreneurship, enhance fiscalsustainability by expanding and diversifying the tax base, and improve quality of life with new servicesand amenities.G1. Retain existing businessesExisting businesses are the foundation of any economic growth strategy. By building on whatalready exists, cities can support current businesses and create a strong foundation on which to7
attract new businesses, residents, and employment. To tailor this goal to the local context, a citycould interview local business owners to learn about their challenges and explore how an economicdevelopment strategy could best support their long-term success. Supporting existing businessescould include actions like adding or improving infrastructure or encouraging new or redevelopedhousing that would better meet the needs of workers who do not currently live in the community.Other actions to improve the downtown like streetscape improvements, making biking and walkingmore enjoyable and safe, and planning activities that bring people downtown, can help retainexisting businesses by broadening their customer base. (See policies 4, 12, 13, 17, 18, 19, 20, 21, 23,24, 25, 31, and 34 in Table 2.)G2. Attract new businessesAttracting new businesses—particularly in high-priority industries—could help increase localemployment options and build the city’s tax base. Attracting new businesses is often most effectivewhen the effort is tailored to the industries that are best suited to a community’s assets andopportunities and can provide high-quality employment options for local residents or other servicesand amenities desired by the community. (See policies 4, 12, 17, 18, 19, 20, 22, 23, 24, 25, and 31 inTable 2.)G3. Promote entrepreneurshipEncouraging entrepreneurs to startbusinesses gives people powerover their own lives and lets thembuild wealth in th
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
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