Sectoral Strategies for Local Economic

Development

• Are initiatives that identify industries or occupations that

are significant source of employment in a local economy
and create an environment in which they can grow.
• There is a focus on stable or growth industries allowing
economic development practitioners to consider all
aspects of an industry’s health such as land and
facilities, technology adoption, financing, workforce
development, etc.
• Sectoral strategies are not necessarily new initiatives or
programs , but rather a way of integrating existing
programs.
 Types of Sectoral Strategies
• Type One:
– Target existing industries in an economy and
take measures to impo0rve their productivity
and create conditions for their growth.
• Type Two:
– Identify new growth industries that could be
attracted or created to diversify the local
economy and create more high-skill, high
wage jobs
 The Planning Process for Sectoral
Strategies
• Consideration of the national and regional
context of the targeted sector and its
performance locally.
• How fast is the technology involved in the
specific industry changing and the ability
of the local businesses to adopt
• Understanding the location decisions of
firms and the factors influencing them as a
way to understand how to attract them
 The Planning Process for
Sectoral Strategies
• The availability of skilled labor or the location of
skilled labor force, or the ability to train the labor
force is/are of the most important location
considerations firms in many industries consider.
• The availability of help to allow firms to respond
to environmental regulation, as well as need in
meeting state and local permitting requirements
• Availability or identification of sources of
financing for business startups or expansions
Type /level of STATE METRO CITY COMMUNITY
Sectoral
Strategy
Massachusetts The Wisconsin Garment The Jane Adams
TYPE ONE office of Regional Industry Dev. Resource
Economic Affairs Partnership in Corp. in NY Corporation
developed 1992 advocated (labor, industry, provides
Maintain/Build
programs aimed programs for and government technical
Strength of at helping living wages in representatives) assistance and
Existing various manufacturing. It organized to training to
Industry industries such put together a support the employees of
as the needle group of 50 industry’s metalworking
trades, business, manufacturing firms and
workforce industry, labor, sector through training for
development and community provision of job un/under
and technical leaders and training, employed
assistance developed technical workers. It has
programs in initiatives to help assistance, moved to
metalworking, with jog skills, marketing, advocacy
printing and training, export activities to
graphic arts. employment development influence state
opportunities, assistance, and policy on worker
and placement.. providers of training
good and
services
Type STATE METRO CITY
/level of
Sectoral
Strategy
Connecticut identified 6 San Diego Association Tucson, Arizona
TYPE industry areas that are key to of Governments identified
Two state’s economy-tourism, identified 16 clusters environmental
financial services, as drivers of the technology as 1
telecommunications, health, regional economy and of 6 clusters led
Attract/ manufacturing and high targeted them for by the
Create technologies. Clusters have economic dev. Environmental
New been identified action steps Activities. Some of Technology
Industry identified such as workforce these included efforts Industry Cluster
training, capital provision and to attract venture a non-profit
infrastructural development, capital, workforce supported by the
development, greater Tucson
incentives to promote Econ. Council
redevelopment, infill which organizes
dev. programs, an annual trade
affordable housing, show, foreign
reducing regulatory market studies to
efforts, environmental provide
programs to deal with information to
low-level radioactive members on how
and other hazardous to expand
wastes exports.
 Locality Development

The tools, techniques, and options

 Locality Development

• Locality Development is centered on the

ownership, regulation, and management of land. It
takes into account urban design, transportation,
and quality of life issues.
• Locality development is by far the most well-known
and common technique for stimulating economic
development.
• Why?
– Cities do this stuff anyway
– City officials are comfortable with these techniques
– The local community usually supports these efforts
 Locality Development
• The three overarching goals of locality development are:
1) Image building: Creating a sense of identity and a
sense of place.
2) Livability: Improving the amenities and quality of life
in a community.
3) Business improvement: Improve the attractiveness
of the locality to new and relocating businesses.

All of these techniques should be utilized as part of a

community vision, one that makes an area more
marketable and competitive
 Locality Development

• --Landbanking/Land Aggregation --Tourism Planning

--Infrastructure Provision --Townscaping

--Spec Buildings --Shopsteading
--Incentive/Overlay Zoning --Hsg/Neigh Imprvmnts
--BIDs --Community Services
--Regulation Streamlining
 Landbanking
• A technique whereby a city or county, in
anticipation of future development, acquires
vacant land, underutilized sites, or properties
with the potential for reuse or rehabilitation.
• A local government may be able to buy land
from other public agencies at a lower cost or
before it comes on the market because state law
gives local governments, and non-profits, priority
in the purchase of surplus land.
 Benefits of Landbanking
• Landbanking is a powerful locational incentive
done primarily in older communities with no
much available land but in newer communities
as well in order to reserve it for future
development.
• Landbanking can work as a defense against
future increases in land prices, speculation,
uncontrolled development, and the displacement
of residents.
• Very often communities have used landbanking
as a technique to keep or produce
affordable housing.
 What is Annexation?

• It is a legal process through which a municipality brings land into its

boundaries most often to ensure that development occurs.
• At its most basic level annexation, is a process for the adjustment of
boundaries of municipal corporations by including adjacent,
previously unincorporated territory within the municipality.
• The term is generally used to signify the connection of a smaller or
subordinate unit to a larger or principal unit. For example, a smaller
piece of land may be annexed to a larger one.
• Although physical joining is implied, actual contact is not always
necessary. For example, an annexation occurs when a country
acquires new territory even though the new territory is not
immediately adjacent to the existing country.
 Annexation as an Economic
Development tool
• Cities use annexation to ensure potential areas have
access to essential public services like in larger
municipalities.
• Annexation offers the opportunity for landlocked
areas to expand and establish new economic
development growth and development opportunities.
• Annexation allows cities to increase their tax base
through capturing economic growth in land often
adjacent to the city.
• Annexation allows municipalities to capture land tax
revenues of new sprawling development away
from the central business district.
 Land Trusts
• A community land trust is a private non-
profit corporation created to acquire
and hold land for the benefit of a
community and provide secure affordable
access to land and housing for community
residents. In particular, CLTs attempt to
meet the needs of residents least
served by the prevailing market BUT
not only…
Benefits of Community Land Trusts
• Community land trusts help communities to:
– Gain control over local land use and reduce absentee
ownership
– Provide affordable housing for lower income residents
in the community
– Promote resident ownership and control of housing
– Keep housing affordable for future residents
– Capture the value of public investment for long-term
community benefit
– Build a strong base for community action
 Land Trusts in Minnesota
• Minneapolis residents • Northern Communities Land
formed the City of Lakes Trust in Duluth (NCLT)
Community Land Trust to: • NCLT is a local, non-profit,
• Provide quality, permanently community-supported
affordable housing, primarily membership organization that
for low- to moderate-income has been working in Duluth
families. since 1990 toward its mission
• Increase affordable housing of providing quality, afford-
choices in Minneapolis. able homeownership
• Help land trust residents and opportunities for low and
neighbors take care of their moderate income people.
homes and neighborhoods.
• Ensure that land in the city is
used to improve community
life.
 Other Community Land Trusts
• The CLT movement has spread as well, and
there are now 120 communities across the U.S.
that currently operate or are forming CLTs.

• In Minnesota, besides the one in Minneapolis

and Duluth, there are some additional ones
– the Rondo CLT operates in St. Paul and
– new Land Trusts forming in Minnetonka, Northfield,
Washington County, and the Rochester area.
 Physical Infrastructure Development on
Industrial and Commercial Land
• This involves public improvements on sites, or
restoration of existing industrial and commercial
buildings. This makes localities very attractive to
potential businesses that want to move to the
area.
• A point of caution. Not all communities have
been successful with this strategy. In order to be
sure communities need to have a specific
business in mind truly suited for the space and
the area.
 Adaptive re-use
• Old buildings often outlive their original purposes.
Adaptive Reuse, or Re-use, is a process that adapts
buildings for new uses while retaining their historic
features. An old factory may become an apartment
building. A rundown church may find new life as a
restaurant... And a restaurant may become a church.
• Cities reclaiming such property for a variety of uses
• The city usually would reconfigure the streets, build
parking, reinforce the building.
• Developers usually receive federal and or local tax credit
for a period of five or more years to get involved in
project that involve adaptive re-use
Once a power station Now is the Gallery of
Modern Art for the Tate Museum in London.
Pratt Street Power Plant in Baltimore, Maryland, United States,
converted into retail, restaurants, and offices.
Minneapolis Warehousing District
 Other ways in which communities can improve
land and buildings to create incentives for
businesses to move in

• Provision of water and sewer lines, street

lighting, access roads and sidewalks;
• Provision of off-site improvements and parking
• Provision of landscaping involving privately
financed preservation efforts of industrial,
commercial, and housing estates.
• Provision of technical assistance to rural
communities for transformation of old city motels
into residential spaces
 Speculative Buildings
• Some are “shell buildings” with largely unfinished
interiors to be finished to the specification of the tenants
when they are found.
• Similarly localities have also as a safer strategy built
fully serviced storage units with water an power which
if properly designed can very easily turned into spaces
for small factories, workshops, repair shops, or
incubators.
• It is a marketing tool to attract new firms to an area or to
keep existing ones that are expanding.
• This strategy better be used my localities with limited
industrial space but with an adequate labor force,
transportation system, and a sufficient supply of public
services.
 Business Improvement Districts
BIDS
• A Business Improvement District (BID) is a
public / private partnership in which property and
business owners elect to make a collective
contribution to the maintenance, development,
and promotion of their commercial district.
• The idea for BIDs is modeled on the shared
maintenance program of many malls.
– Malls are typically single properties managed by one
entity that sublets the retail space to multiple tenants.
– Tenants pay a common area maintenance fee to
underwrite services that enhance the appearance of
common areas and provide cooperative advertising
for the mall and its stores.
 Paying for the BID
• A BID works in much the same way only that
multiple property owners agree to the extra fee
(assessment).
• Funds to pay for BID programs are generated
from a special assessment paid by the benefited
property owners. Many leases in BID districts
have a clause that allows owners to pass the
BID assessment on to their tenants. The
assessment if billed and collected by the City
and then disbursed to the BID, will be used for a
payment to deliver the district’s services
 Who Oversees the BID
• Each BID is governed by a Board of directors
that is elected by the members of the district.
• The Board has a fiduciary responsibility to the
BID and hires the management that administers
it on a day-to-day basis.
• The Board is divided into classes that may
include: commercial property owners who very
often constitute the majority, commercial
tenants, residents, and public officials (mayor,
members of the city council, the comptroller to
the city, etc.)
 Some BID services
– Maintenance (street/sidewalk cleaning, graffiti
removal)
– Public Safety / Hospitality (visitor assistance,
added public safety)
– Business Development (vacancy reduction,
business mix improvement
– Marketing( special events, promotional
material, public relations, holiday decorations)
 Advantages of BIDS
• Several advantages result from this arrangement
– Cleaner, safer and more attractive BD
– Steady and reliable funding for supplemental to the
city services
– Ability to respond quickly to changing needs of the
business community
– Potential to increase property values, improve sales
and decrease commercial vacancy rates
– Better ability to compete with nearby retail and
business centers
 Some BID services
– Capital Improvements ( street lights, custom
trash cans, decorative street signs, flower
boxes)
– Landscaping ( planting trees or flowers and
maintenance)
– Community Service( fundraising, charitable
events, homeless and youth services)
 How widespread are BIDs
• The first BID was the Bloor West Village
Business Improvement Area, which was
established in Toronto in 1970 and was an
initiative by local private business.
• The first BID in the United States was the
Downtown Development District in New Or
leans
in 1974, and there are now 1,200 across
the country.[3]
• BIDs have been established around the
world and can be found in many countries
Canal Street New Orleans
 Townscaping

• Townscaping is a physical, attitudinal, and

management process which aims at the
restoration or the improvement of a downtown
district for purposes of economic development.
• Its physical element involves the development
of a visual theme of the central town area by
local merchants, city planners, and citizen
groups. The typical manifestation of
townscaping is the main street program.
 Advantages of Townscaping
• A town that is aesthetically pleasing and
practical to live will attract people and
businesses.
• A townscaping project especially based on
a theme which emphasizes the history of
the town or its new image and transition
will create a strong sense of community
life.
 Advantages of Townscaping
• Improved townscaping can lead to
rejuvenated confidence and economic
well-being in the town.
• It helps to identify, support and enhance
local character and thus strengthens and
enhances the economic activities of the
district, including service industries
primarily and secondary production and
tourism
 Community Branding
• Through strategic economic development
planning a community/town should work to
portray one common image. This image, called a
brand, should be reiterated throughout the
community in official letterhead of city
government, chamber of commerce, banners,
etc.
– Retreat Lifestyle
– A touch of class
– Gateway to everything
 The Main Street Approach
• The Main Street Approach is a
community-driven,
comprehensive methodology
used to revitalize older,
traditional business districts
throughout the United States.

• The underlying premise of the

Main Street approach is to
encourage economic
development within the
context of historic
preservation in ways
appropriate to today's
marketplace.
 The Main Street Approach
Advocates

– a return to community self-reliance,

– local empowerment, and
– the rebuilding of traditional
commercial districts based on their unique
assets:
• distinctive architecture, a pedestrian-friendly
environment, personal service, local ownership,
and a sense of community.
 The Main Street Four Point Approach
to Commercial District Revitalization
• The approach is a comprehensive strategy
that is tailored to meet local needs and
opportunities.
• It encompasses work in four distinct areas that
are combined to address all of the commercial
district's needs
– Design,
– Economic Restructuring,
– Promotion, and
– Organization —
• Organization involves getting everyone working
toward the same goal and assembling the
appropriate human and financial resources to
implement a Main Street revitalization program.
• A governing board and standing committees
make up the fundamental organizational
structure of the volunteer-driven program.
Volunteers are coordinated and supported by a
paid program director as well. This structure not
only divides the workload and clearly delineates
responsibilities, but also builds consensus and
cooperation among the various stakeholders.
• Promotion sells a positive image of the commercial
district and encourages consumers and investors to live,
work, shop, play and invest in the Main Street district.

• By marketing a district's unique characteristics to

residents, investors, business owners, and visitors, an
effective promotional strategy forges a positive image
through advertising, retail promotional activity, special
events, and marketing campaigns carried out by local
volunteers. These activities improve consumer and
investor confidence in the district and encourage
commercial activity and investment in the area.
• Design means getting Main Street into top
physical shape. Capitalizing on its best assets
— such as historic buildings and pedestrian-
oriented streets — is just part of the story.
• An inviting atmosphere, created through
attractive window displays, parking areas,
building improvements, street furniture,
signs, sidewalks, street lights, and landscaping,
conveys a positive visual message about the
commercial district and what it has to offer.
• Design activities also include enhancing the
physical appearance of the commercial
district by rehabilitating historic buildings,
encouraging appropriate new construction,
developing sensitive design management
systems, and long-term planning.
The Eight Guiding Principles of the
Main Street Program
• Comprehensive: No single focus — lavish
public improvements, name-brand business
recruitment, or endless promotional events —
can revitalize Main Street.
• Incremental: Baby steps come before walking.
Successful revitalization programs begin with
basic, simple activities that demonstrate that
"new things are happening " in the commercial
district
The Eight Guiding Principles of the
Main Street Program
• Self-help: No one else will save your Main
Street. Local leaders must have the will and
desire to mobilize local resources and talent.
That means convincing residents and
business owners of the rewards they'll reap
by investing time and money in Main Street —
the heart of their community. Only local
leadership can produce long-term success
by fostering and demonstrating community
involvement and commitment to the
revitalization effort.
The Eight Guiding Principles of the
Main Street Program
• Partnerships: Both the public and private sectors have
a vital interest in the district and must work together to
achieve common goals of Main Street's revitalization.
Each sector has a role to play and each must
understand the other's strengths and limitations in order
to forge an effective partnership.
• Identifying and capitalizing on existing assets:
Business districts must capitalize on the assets that
make them unique. Every district has unique qualities
like distinctive buildings and human scale that give
people a sense of belonging. These local assets must
serve as the foundation for all aspects of the
revitalization program.
The Eight Guiding Principles of the
Main Street Program
• Quality: Emphasize quality in every
aspect of the revitalization program. This
applies to all elements of the process —
from storefront designs to promotional
campaigns to educational programs.
Shoestring budgets and "cut and paste"
efforts reinforce a negative image of the
commercial district. Instead, concentrate
on quality projects over quantity.
The Eight Guiding Principles of the
Main Street Program
• Change: At first, almost no one believes
Main Street can really turn around.
Changes in attitude and practice are
slow but definite — public support for
change will build as the Main Street
program grows and consistently meets its
goals. Change also means engaging
in better business practices, altering ways
of thinking, and improving the physical
appearance of the commercial district.
The Eight Guiding Principles of the
Main Street Program
• Implementation: To succeed, Main Street must
show visible results that can only come from
completing projects. Frequent, visible changes
are a reminder that the revitalization effort is
under way and succeeding. Small projects at the
beginning of the program pave the way for larger
ones as the revitalization effort matures, and
that constant revitalization activity creates
confidence in the Main Street program and ever-
greater levels of participation
The Eight Guiding Principles of the
Main Street Program
• Economic Restructuring strengthens a
community's existing economic assets while
expanding and diversifying its economic
base. The Main Street program helps sharpen
the competitiveness of existing business owners
and recruits compatible new businesses and
new economic uses to build a commercial
district that responds to today's consumers'
needs. Converting unused or underused
commercial space into economically productive
property also helps boost the profitability of the
district.
Iowa
 New Jersey
• Ward Building before • Ward Building after
renovation. renovation
New Jersey
Arkansas
 Shopsteading
• This is a relatively newer approach to
community or inner city revitalization and
involves the sale of abandoned buildings
or shop facilities to businesspeople willing
to renovate them and then locate their
business there.
• Usually this program offers loans, grants,
and other services to those willing to
participate
 Example Program from Cumberland
County, PA for the city of Carlisle
• Shopsteading Loan Program. Loans of up to
$35,000 are provided to businesses interested in
purchasing a building and locating in the
downtown. Low income job creations must be
demonstrated
• Commercial Façade Rehabilitation. Matching
grants are provided to owners of commercial
property in the downtown to renovate the façade
of the building in a historically compatible
manner.
 Williamsport, PA
• Shopsteading Loan Program:
This program provides assistance for business creation
and expansion. Loans up to $100,000 at a minimum 4%
interest rate and 10-year term are offered.

Stipulations:
1. Must be located within the city limits of Williamsport.
2. Must have a 2 for 1 private dollar match.
3. 10% applicant cash equity investment is required.
4. For every $15,000 loaned, a job must be created.
 Elements of Success for the Program
• Availability of properties in areas that have
considerable potential for economic
rejuvenation. Usually these areas can be found
in part of cities that are going through
gentrification;
• Availability of individuals able to satisfy
shopsteading requirements which usually
involve evidence of equity capital and the
existence of a detailed plan for the rehabilitation
of the building.
• If within few months the building is not restored
usually the property reverts back to the city. The
business must also be operational within a year.
 Benefits of Shopsteading
• It promotes business retention and business
attraction
• For businesspeople the most important
advantage is the low cost, the favorable lending
terms, and sometimes the free rent and other
amenities
• For the city the program provides for
improvement of land use patterns in marginal
commercial areas, eventually adds to the tax
basis, encourages other businesspeople in the
area to undertake renovation in their buildings,
and stabilizes the area.