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The role of local government in economic development

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Title:
The role of local government in economic development
Creator:
McMinimee, Andrew C
Publication Date:
Language:
English
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80, [8] leaves : ; 28 cm

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Subjects / Keywords:
Economic development ( lcsh )
Local government ( lcsh )
Economic development ( fast )
Local government ( fast )
Genre:
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

Notes

Bibliography:
Includes bibliographical references (leaves 87-88).
General Note:
Submitted in partial fulfillment of the requirements for a Master's degree in Planning and Community Development, College of Design and Planning.
Statement of Responsibility:
Andrew C. McMinimee.

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Source Institution:
University of Colorado Denver
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
09230978 ( OCLC )
ocm09230978
Classification:
LD1190.A78 1979 .M325 ( lcc )

Full Text
THE ROLE OF LOCAL GOVERNMENT
IN
ECONOMIC DEVELOPMENT
ANDREW


TABLE OF CONTENTS
Chapter
I. Introduction
The Traditional Role . 7
The Changing Role and Why Cav/kM vs
The Future Role
II. The Basic Philosophy of Local Government
10
\l\x7vdA

Representative Government
Use of Available Resources J
The Concept of Effective Political Leadership
III. Environment Necessary for Economic Development 34
. , ,< Representative Government
feofo\i K Use of Available Resources
The Concept of Effective Political Leadership
IV
[?Uw Kfi

Conflicts
Representative Government "
Use of Available Resources s'
The' Concept of Effective Political Leadership
Developing the Partnership ; u/Ua f&tjWluvV?
52
60


Resolution of Conflicts Representative Government Use of Available Resources
The Concept of Effective Political Leadership
£< 0W Oiukih moaa. \r)
VI. Summary
78
Appendix
List of Incentives Sample Resolution
Assessment of Economic Development Potential
Bib!iography


I. INTRODUCTION
The purpose of this paper is not to be critical
of local government, but, rather, to better understand
------------------------- ------------- 6^
why it acts-^as it does in the area of economic development. Through learning the forces that influence and motivate local government, and by determining what it is that they hope to achieve out of the process as well as setting out the conditions that are necessary for economic development to occur, a set of compromises can be worked out which will permit both sets of actors to achieve their desired ends.
In developing this paper, I assume a community size of 50,000 people or less. The setting could be either suburban or a free-standing rural community. The effects of being either a suburban or a free-standing community, where the setting results in some difference, will be discussed. Politically, the assumed community will be what Kenneth and Patricia Dolbeare, in their book AMERICAN IDEOLOGIES, term as reform liberalism.^ Operating under this ideology, the elected representatives do not assert strong political leadership, but are constantly looking for playback from their constituency as to how they feel about a particular issue. Loathe to establish policies and then to act within these parameters, issues are often
1 ?

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V^l
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settled incrementally in the framework of the town meeting where those present are assumed to represent the feeling of the entire community, rather than the council that is elected to perform that role. Also under this ideology, the political, planning and economic functions are dealt with on a piecemeal basis and in isolation from one another without recognizing the effect that decisions in one area have on the others.
Under this process, very little stability, in terms of governmental action, is evident, and it is impossible to place reliance upon a decision once it is made because it is a determination of a singular issue based upon a particular set of circumstances rather than a broad policy statement. The maintenance of maximum flexibility
/ J I'" t
in order to permit actions designed to please the present f\)+
majority is the most distinguishing characteristic of this form of government.
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THE TRADITIONAL ROLE
Traditionally, local governments have participated
in the economic development process in two ways; either through a local chamber of commerce by paying dues, and, through the regulatory process, as a new business or industry has sought to locate within its boundaries and seeks the necessary permits and licenses to build a structure or carry on its operation.
local government has been distant, not always because the elected officials wanted it that way, but partially because of the attitude of the merchants in the community. From the standpoint of the merchant, the role of govern-
those services aimed at protecting property values, and which the merchants cannot perform themselves. Any further intrusion by the government into the affairs of the business community, either through the local chamber of commerce or through the planning process, have been viewed as attempts to manipulate or meddle in private
To a large extent, this relationship between
2
ment is to be strictly laissez-faire to provide only
go away and leave them alone.
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As a result of this, most local governments have done just that, and have confined their activities to street sweeping, traffic control, police protection, chamber of commerce affairs, and similar ribbon-cutting ceremonies, and to the regulatory process of permits and licensing.
But why is this so? If we are to be able to do something, other than to say, yes, this is the way it is, we need to understand why it is that merchants feel this way, and why local governments react to the rebuff by withdrawing from the field rather than continuing to press for changes that they clearly feel are needed.
This subject will be dealt with later in the chapter dealing with the environment that is necessary for economic development, and, therefore, at this time I will only say that in discussions with merchants in a number of communities, there appear to be five basic reasons that are most often stated. Two of those deal with the basic capitalist idea of small, limited government; the other three relate to how much trust can be placed in government.
The second role that government traditionally has been involved in is that of regulator and, to a large extent, how this role has been carried out has affected and continues to affect in a limiting way many local governments' ability to expand upon the traditional roles.
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4
Sign codes, outdoor storage prohibitions, aesthetic controls, open space, historic preservation, requirements J,V f <
to update mechanical, electrical and plumbing systems as be
"h*,
a part of remodeling and expansions, handicap and energy , 1
i 4^11
conservation provisions, and how these have been presented to the business community, and how they are perceived by the merchants they affect as well as the process one must subject himself to in order to build a new business or expand an existing one have, and continue to act, as an impediment to the formulation of an effective alliance for economic development.
THE CHANGING ROLE AND WHY
To some extent, however, we are beginning to see this traditional role change. The changes that we see are due partially to the attitudes of the local business community, some of whom are coming to realize that there are certain things that government can do that would help them to improve their competitive edge in the marketplace, and that would help them to achieve their desired ends more easily, and partially because some local governments are coming to realize that from a financial standpoint, unless some means is found to reverse the existing trends, in the very near future they are going to be forced to
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either reduce their present level of services or impose a higher tax levy upon the community, or upon certain selected elements of it, through new taxes on activities or commodities that heretofore have not been subject to special taxation. Neither of these alternatives are particularly attractive to most local governments since they do not offer any long term solution to the problem and, in fact, in some cases can have an opposite effect in that they cause potential tax generators to locate outside the community. In addition, the new taxes are not popular with the community at large.
natural attrition, many of the old "hard line" merchants are slowly being replaced, or in some cases simply outnumbered by new entrepreneurs entering the community. Some of these new people, better educated and from diffei backgrounds, are more attuned to the opportunities that
reduce the front end investment that is necessary, therel freeing up their dollars for other purposes.
bonds, tax increment financing, downtown improvement districts, and special improvement districts, have been around for a long time, but, to a large extent, they have not been used because of the fact that local government has not been willing to use them or because how they might be used has
Additionally, it should be pointed out that through
exist for government subsidy to spread their costs and
Many of the techniques such as industrial revenue
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not been adequately explained or understood. To an even greater extent they have been believed to be techniques >
\t>
that were only applicable in larger metropolitan communi ties \ \,,a
j Some of the things that can be done through the use of thes^/^- a# *
T
techniques are now physically on the ground, and the success of those developments has been largely publicized through the media, through the trade journals, and through word of mouth. As a result of this, there is a growing acceptance of the fact that these techniques are available and can be used for a variety of purposes in communities of all sizes.
From the standpoint of local government, changes that we see happening include staffs that are more sophisti cated, experienced, and well educated, and who have had a great deal more exposure to the experience of other communi ties through professional journals, conferences and interprofessional relationships, and who because of these factors are now able to better articulate and explain the use of the various techniques that are available. The education that these professionals have received, both in terms of a formal education and from an experiential point of view, are much broader than that of their counterparts ten years ago. Here, too, we are also seeing a change in attitude, with the local government officials being less willing to go away and leave the merchants alone, and more determine to find some way that government and the community can be assured of a growing and viable economic base.


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The level of sophistication of these professionals has led them to inquire into what the result of existing trends and conditions mean to their community, and as a result of that inquiry, have caused them to redefine the traditional roles of government in economic development.
They have come to look upon a subsidy to local commercial and industrial development as an investment in the future
I ^
of their community, and a means by which tax levels can be stabilized and as the economic base from which future
) JcfL^^
programs can be launched.
THE FUTURE ROLE
With these changing trends, then, both on the part of local government and in the commercial community, it would appear that the stage is set for the future.
Clearly, the opportunity exists for most communities to .j assume a more aggressive role in terms of economic development in the years to come. What is needed at this point ^
is leadership, both politically and administratively, in
local communities, to actively and effectively pursue the ?
opportunities that exist. But this leadership must do more than pursue economic development, because in order to survive it must also satisfy the other role of government with respect to the people who live in the community.
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In short, it must be able to justify the need for economic
development, it must be able to provide for citizens' participation in the governmental process at a meaningful level, and it must be able to demonstrate that economic development can be achieved without sacrificing the environment that the community as a whole values. This is a large responsibility and a challenge that can certainly test the abilities of both the administrative staffs and the political leadership of many communities. But it is
one that can be met if local government will approach the problem in a rational manner and will realize that there are ways in which the goals of both these groups can be compromised and melded into a single set of community goals and policies.
1. K. M. Dolbeare and P. Dolbeare, American Ideologies, third edition, Rand McNally College Publishing Co., Chicago 1971, p. 72-87.
2 Ibid, p. 18-36.
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II. THE BASIC PHILOSOPHY OF LOCAL GOVERNMENT
In the introductory remarks for this paper, I touched briefly on the basic philosophy of local government. Generally, it can be classified as reform liberalism. Some of the chief criticisms of this form of government are the lack of any effective political leadership.
Effective political leadership is, of course, a relative term, as judged by different people according to what it is they are seeking to achieve. For instance, from the standpoint of a neighborhood association^, effective political leadership might be that which allows them into the process at will, and to impact the overall direction that the government will take with respect to a particular issue at a particular point in time. At the same time, from the standpoint of the business community, effective political leadership would establish long term goals and directions for government which would allow the business community to make investments with some assurance that those investments would be protected over the long haul by the government in that policies and directions would not be changed or at least not changed to the extent that those long term investments would be jeopardized.
Under the philosophy of reform liberalism, representative government appears to be at best unstable in that it is constantly looking for and receiving feedbacks from
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its constituency with respect to how certain specific issues should be resolved. These inconsistencies in policy,k { fj decisions are particularly worrisome from the standpoint /> of the business community who often must make large long-term investments that can be seriously affected by a change in policy.
Another problem area that was touched on briefly in the introductory remarks was the lack of local government to make decisions that are interrelated with respect to the political, planning, and economic functions, and the apparent inability to make full use of all of the available resources at one single time. This piecemeal approach to problem solving often results in unrelated and conflicting regulations and policies. These conflicts, of course, come into sharp focus during the development process and too often the reaction of the bureaucracy when confronted with such a conflict has been a shoulder shrug, rather than a straightforward endeavor to resolve the conflict. Much of the frustration that the business community feels toward government is a direct result of this reaction.
The purpose of this section, then, is to try and determine how local government has traditionally operated and what it is that local government seeks to achieve.
By gaining an understanding of what it is government wants to gain from the process, perhaps we can discover how that

HD


process might be changed to make it more compatible to the goals of the business community. Both this chapter and the following are organized into rough/ly the same format. Through this process, the difference in what local government as well as the business community expect to achieve are brought into sharper focus and can, therefore, be dealt with.
REPRESENTATIVE GOVERNMENT
With respect to most small communities, the term "representative government" is actually a misnomer. Representative government infers that people are elected to represent the community and to make decisions with respect to how that community will be run based upon their perception upon what in fact is actually best. In reality, what most often happens with respect to these elected representatives, is that they are subject to a good deal of pressure from different special interest groups, depending upon which issue is to be decided. This process is not too much different than that we find in the case of large metropolitan governments, state governments, or on a national scale. The fact that these elected officials know personally the participants in these various pressure groups, however, results in a much different outcome than we find in a larger scale government, and, in fact, what is intended
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to be representative government at a local scale more
often is what could be termed true democracy^at work. There,
in the style of the New England town TralT meeti ng or, to
reach further back in history, in the fashion of the Greek 2
polis individual issues are decided on the basis of who happens to be in attendance at a particular meeting and what their desires are with respect to the issue being decided at that particular time. This, of course, results in a lack of stability in the decision-making process and is one of the primary problems that must be dealt with.
STABILITY
From the standpoint of local government, however, this procedure is one means of achieving stability, at least as that word is defined in the terms of the local officials. By being sensitive to these various pressure groups, local government sees itself as exerting a degree of responsiveness, and through this responsiveness they are able to achieve credibility and accountability and thus stability in their terms.
From this discussion, we can see that the definition of the term stability is actually very narrow and that it bears no relationship whatever to what is actually happening in the community, but is confined strictly to
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the question of who will make the decisions rather than what those decisions might be.
GOAL SETTING AND POLICY MAKING
In terms of goal setting and policy making, we are beginning to see more and more communities beginning to get into this area. For many years the comprehensive planning process has been locked into the idea of a physical plan which set out not only the land use concepts that the community would seek to achieve but along with that goals Q.d' ^
At**
and policies. For the main part, these goals and policies
r" ^ '
&
related directly to that physical plan and did not relate,
other than superficially, to financial or social considera- ' '
tions in the community. T. R. Kitsos, in his book, LAND
USE IN COLORADO: THE PLANNING THICKET"3, reviews the Co 1 orado^f
f,
planning laws which require that, if a community was going to enforce zoning regulations, then those zoning regulations would bear some relationship to the comprehensive plan for that community's health and general welfare.
4
Though well intended, this state enabling legislation in actuality and in practice did little to bring this about and, in fact, until the early 170's when zoning and subdivision requirements were applied universally across the state, many small communities lacked even the rudimentary
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tool of a comprehensive plan for the establishment of long term goals or policies.
The process of establishing goals and policies in small communities that are a part of a larger metropolitan area is, of course, much different and much more complex than that of a small free-standing community. In the former, the suburban community, we find that because it is a part of the larger metropolitan area, many of the goals and policies that the local government must adopt and adhere to are predetermined by that larger metropolitan area, and that the community is not nearly as free to determine its own destiny as those free-standing communities in the hinterlands. These external pressures are the result of intergovernmental cooperation required through the Councils of Governments as a prerequisite to federal funding. As time goes on, more and more funding is tied to local adoption of these regional goals and policies.
y* a
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-tw Ur aW
CITIZEN PARTICIPATION
Throughout the history of civilized man the practice of citizen participation in local government has not been particularly successful. Other than in the earliest primitive settlements where a decision was often made by a council of elders who decided what was best for
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that particular village, the first organized effort at citizen participation appears to have occurred in the early Greek democracies where mandatory participation in the affairs of the city were practiced and citizens were required to participate in the affairs of the community by service on boards and the governing council and in courts. Once this form of democracy disappeared from the earth, however, before the time of Christ, it was not until the founding of this country that the idea that the average citizen could and should participate in the affairs of local government again appeared.
It is important to recognize this, however, because the idea that our government is a representative form of government and that each citizen must have an opportunity to participate is very strong. The early town meetings in New England have been carried over into our governments of today, and indeed, through the efforts of the federal government, through the various grant programs, appear to be stronger today than at any time in our history.
This, coupled with the technological advance of our society which provides more time for activities other than work, the equal rights legislation aimed at reaffirming the rights of minorities and women to participate in the processes, along with the higher level of education that
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prevails in our society, have resulted in more people becoming involved in the process of citizen participation than previously was the case. Additionally, there is a substantial number of planning professionals who, during the 1960's and the early 1970's, devoted a lot of effort into designing programs aimed at developing citizen participation in local affairs.
Historically, citizen participation has taken many
forms in this country, ranging from what in reality amounts
to non-participation up through various levels of tokenism 5
and placation to outright citizen power. Most communities have sought to keep citizen participation at a level somewhat less than power but yet where it would meet the requirements of the guidelines laid down by the federal government for grants, and where the local government could, if it chose, either implement or ignore the recommendations put forward by the citizens groups.
Levels of Citizen Participation
Citizen Control 1 j
Delegated Power
Partnershi p
Placation \ >
Consultati on
Informing
Therapy \
Manipulation f
5
Degrees of Citizen Power


rt*
Degrees of Tokenism
Levels of Non-Participation
From article by S. R. Arnstein, "A Ladder of Citizen Participation", J.A.I.P. Vol. 35, July, 1969.
07)


Such has been the role of organized citizen participation in local government. However, this does not accurately reflect all that typically happens in this area in small communities, and it is this unorganized citizen's participation that generally has had the greatest impact upon communities with respect to economic development.
In this informal setting, citizens and neighborhood associations have been free to float in and out of the de-ision making process depending upon the issue of the times and to affect the outcome of that issue without having to take any real responsibility for their actions. It is this ability to affect decisions without responsibility for them that we must be most concerned with. This level of citizen participation, generally consisting of neighborhood associations, alliances and coalitions, formed around a particular issue or crisis, have been most effective in dealing with local officials and in effect become a government within a government. The 1975 Snyder vs. Lakewood, Colorado, Supreme Court decision defining rezoning as a quasi-judicial rather than a legislative function, has eliminated the referendum process with regard to rezonings and makes this process subject to review under rule 106.
However, local governments continue to be very sensitive to pressure from these groups. This is because 1) local officials recognize the ability of such a group to force a referendum on any issue that is legislative in nature, and, 2) because of the scale of the small community,
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the local officials know personally many of the members of such pressure groups, and a decision contrary to the desires of that group affects them, the local legislators, and subjects them to abuse in their personal lives in the communi ty.
USE OF AVAILABLE RESOURCES
In the area of using all of the resources that are available to it, the performance of local governments has been less than exemplary. In most cases, and with few minor exceptions, it could be characterized as unimaginative Local governments traditionally have confined their activities to those areas well established in an historical
sense. City attorneys and other professionals involved in local government have done little to change this, and, therefore, as a matter of practice, most communities in making use of the resources that are available to them have confined their activities to those areas where there very clearly is some precedent for them being involved. This, in part, explains the reluctance to utilize many of the techniques such as subsidies that exist that could be used for effectively promoting economic development, and is basically the trademark of a very conservative form of government, again a reflection of the reform liberalist movement which, in feet, grew out of the classic liberal
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philosophy and which espouses many of the same principals as capi tali sm.
LEGAL PROCEDURES
In terms of the legal procedures that are utilized for small communities today to help promote economic development, even though the necessary tools such as special districts, Industrial Revenue Bonds, and the ability to create Building Authorities, do exist through state enabling legislation, by and large they are not used. Generally, this is based on the advice of the local attorney acting in a part-time capacity as city attorney. Even in those communities where this is a full time position, the advice generally given by this individual to the council has been of a most conservative nature. Few attorneys are willing to break this precedent and ask the council what it is they want to accomplish and then find a way to do it legally. This is probably the primary underlying cause as to why most communities have not utilized many of the legal procedures that are available to them.
CAPITAL IMPROVEMENT PROGRAMMING
In terms of capital improvement programming, most small communities look at this as a means of dividing up
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the spoils. Capital improvements traditionally are selected by the full council and are distributed on the basis of election districts or precincts, as opposed to some overall plan for improving the community, or for regulating where and when growth and development will take place, or for encouraging economic development. Very few communities
recognize the impact that they could have on encouraging economic development through their capital improvement ffb* program. Further, it should be stated that the amount of money spent for capital improvements by most small communities is very small when compared to the expenditures necessary to solve the problems that most communities face. This, of course, is even more reason for a careful programming before that money will be spent in order to derive the most good. Unfortunately, this is not the case, and even in some of the communities that are very well equipped from a staff standpoint to handle a sophisticated approach to capital improvements, they remain the purview of the manager and the council, and the spending of these monies bears no relationship to their ability to match it to other available funding from outside the community or to deal with the very real question of determining how and when development should occur.
STAFF
The use of staff as a resource in small communities


is generally better than it is in the larger metropolitan areas. The reason for this, of course, is that there is less staff available, and that each of those must become involved in a great many more things than would be necessary in a larger city where a great deal more specialization is permitted. In the past, the quality of the staff in a smaller community has not been equal to that one might expect to find in a metropolitan area. The reason for this is two-fold. First is funding, with most smaller communities simply not being willing or able to pay the same kind of dollars that were available for comparable skills and experience in the larger communities. The second reason is the desire of most professionals to 'work in a metropolitan area where they are subject to greater exposure in terms of professional growth.
As a result of this, most small communities were staffed by recent graduates with a minimum of experience or with older professionals who simply desired to live in a rural setting and did not have the same requirements, salary-wise, as someone with a growing family. Additionally, many smaller communities have utilized untrained local people in key staff positions, and while in many cases these people have ben able to perform the job well, this lack of professional training has, to a large extent, limited the ability of the smaller communities to fully
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realize the opportunities that exist. This is particularly true in rural settings.
In the suburban communities, the use of staff as an available resource has improved greatly in the last ten years, and, in some cases, the levels of sophistication and the variety of skills available on these staffs rival or exceed those existing in many of the larger communities throughout the country. It is in these suburban communities that we find the greatest use being made of the staff as a resource and, in some instances, we see interdisciplinary teams made up of representatives from different departments working together to solve a single complex problem.
OTHER RESOURCES
The use of the other resources available to small communities or local governments usually manifests itself in the form of citizens' participation and the channeling of those efforts to constructive purposes. In some instances this idea has been pushed to the point where citizens with specific skills have been appointed to serve on boards, commissions and committees specifically for reviewing development or for coming up with ideas related to a certain specific issue. An example might be the use of people in the community who are particularly interested
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in preservation and environment, to serve on an energy
tions as to how a community might preserve the environment and conserve the natural resources that exist. Another
as doctors in determining what kind of med'ii~;i far-n-i+v should be provided in a community. There other examples that could be cited, but su
as a resource that is readily available to has been underutilized.
Consultants also represent a significant resource to the small community that has been used with vary
structure of most local governments revolves around the reform liberalist ideology, and some of the precepts and ideals of that concept of government. The purpose of this section is not to elaborate further upon those, but, rather, how local government views itself in terms of the
and conservation task force^, to come up with recommenda-
use of citizens could involve professional groups such
that, in the past, the use of citizens in
THE CONCEPT OF EFFECTIVE POLITICAL LEADERSHIP
degrees of success. To use them more effectively,
ties need to be able to clearly define the scope of than they have in the past.
Earlier in this paper I mentioned that the
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function that it is to perform, the power structure that exists in most small communities, and the process by which decisions are actually made. It is in this area that there are some rather marked differences between a suburban small community and the free-standing community in the hinterlands, in that the latter has a great deal more independence and to a large extent a great deal more latitude in controlling its own future and making decisions about the directions that it wishes to take. In the suburban setting, because of the regional constraints that exist and the lack of effective control over many externalities that are
,' Kl*
imposed upon the suburb, the scope of the alternative ' r .-erf31
choices are much more limited in many areas.

jJ
FUNCTION OF GOVERNMENT
The function that local government is to serve at the level of the small community is sometimes difficult to discern. It is for this reason that so many local governments have such tremendous difficulty with the process of establishing goals and objectives. Very simply stated, the purpose of any government, be it large or small, should be to provide services. Almost everyone agrees upon this. It is in the definition of what those services
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will be comprised of, as well as their scope and the level at which they will be delivered, that a great deal of debate is generated. Most local communities agree in general on the public safety and public works functions, although in some circumstances these are provided for either by special districts or through contractual arrangements with neighboring communities. To a lesser extent, most communities also provide services in the area generally referred to as community development, and it is in this area that we are most concerned when we talk about the functions of government and effective political leadership in the context of economic development.
In this area, most governments do not provide what can be termed effective political leadership. Even though for the main part they have adopted subdivision regulations and zoning regulations, as well as other regulations for the processing of planned unit developments or planned building groups or unified development overlays or some other technique designed to permit development to occur in a manner other than what might be accomplished through the conventional subdivision process. The general practice of most local governments is to treat the processing of developments in either a legislative or judicial fashion rather than making the rules and then letting development be processed and occur as an administrative action. Most communities are loathe to process development
fo'n

l(

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administratively because in many instances development results in strong emotional issues throughout the community, and it is in dealing with these issues that most local governments feel that they either are or are not doing their job in terms of what their local constituency expects them to do.
This involvement in what should be an administrative process is what is frequently looked upon from members of the business community as nitpicking^, and is generally responsible for the reputation that a local government has in the business community as being either pro or anti iff lo*'
development. This is the basis for some of the antagonist'
lems of development.
Notwithstanding this, however, most local governments see this involvement in what could very well be an administrative function, the role of watchdog, to be the primary function of government, and certainly paramount to the overall task of providing services within the community. The idea of providing direct subsidies, either in the area of economic development or in housing, is something that, at this point in time, is just beginning to be discussed and addressed by relatively few communities. In the past, and on a very small scale, some communities have provided
voice with regard to government's inability to make a decision and then stick by it or to understand the prob-
feelings that the forces of economic development often
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subsidies in terms of buildings or tax waivers to certain select industries or businesses as a means of inducing them to locate within their community. This has been done in isolated incidents and generally not as a part of a continuing program to promote the economic development of the community or to broaden the tax base and to reduce the reliance upon tax revenues from predominantly single family residential communities. Other forms of subsidies such as the construction of infrastructures such as streets, sewer and water lines, traffic signals and the like, has been a good deal more common, particularly in the suburban communities of larger metropolitan areas where the competition for this kind of development has existed for a number of years. However, again, most of these deals were the result of isolated circumstances and not a part of an overall economic development program, and certainly not the result of a set of policies that indicated to the business community that under specific circumstances the city was prepared to provide facilities in return for that business or industry locating within the community.
In general, most local officials have seen it as a part of their function to stay as far removed and as isolated as possible from commercial development. It is interesting to note this in that quite a number of council-men are themselves businessmen in the community. It would

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appear to be a dichotomy that they would choose to run their enterprises in as businesslike fashion as possible and then conduct the affairs of the city in a manner that would appear to bear no relationship to good sound business practices. The idea that inducements to business or industry could be considered as an investment in the community is not one that has endured a good deal of support throughout the state in the past. It is an idea that is presently gaining support, however, and is being explored by a number of communities at this time. If one were to pick up a copy of the monthly trade magazine for the
g
industrial realtors we would find that well over a dozen front range communities are presently involved in actively seeking industrial relocations into their community.
It goes without saying that in this day when the competition is as keen as it is for the relocation of commercial/industrial facilities, that certain inducements must be available from those communities, and from this it is safe to deduce that perhaps the idea of what function government should play in the economic development process is beginning to change.
POWER STRUCTURE
The idea of a power structure munity is an extremely interesting one
i n a smal1 com-from the standpoint
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of effective political leadership. Small communities
.
7
traditionally elect their councilmen outside of the tradi-
tional political party system that exists in this country, and therefore to a large extent, or at least from a visual standpoint, the power of political parties is nonexistent in local issues. It can also be said that at a local level relatively few people participate in this process. It is a rare occasion indeed when more than 20% of the citizens of a community participate in the off-year municipal elections, and even then these people do not constitute what can be said to be the local power structure.
In most instances, the group of people who actually can get a particular job done in a community at any given time is very small and probably, in most instances, numbers fewer than one or two percent of the total number of people in that community. Because of this fact, local political leaders are extremely vulnerable to other groups that arise as a result of issues that have been created in the community. Most local politicians recognize this vulnerability and, because of it, assume the posture described previously under the description of the reform liberalist ideology. In this posture, local politicians continuously look for playback from the community as to how certain groups that are capable of rallying around a cause might feel about that particular issue.
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The decisions that are made by local politicians are, in most instances, couched in terms that are least likely to offend anyone. Under this concept, it is extremely difficult for local politicians to consistently make the tough decisions that must be made in dealing with the com-

plex problems facing communities today. It should also be stt( noted that, because of the lack of power structure and the
impact that informal groups can have and because those informal groups are free to float in and out of the affairs
Vcyr
of the community at will, any attempt to identify the
, Ac*

power structure or to design a program utilizing the power
*YP
structures in a small community under these circumstances !
is bound to be a limited success. Because of this, consideration should be given to designing a program that has community-wide ownership and will provide the political support necessary for the council to assume the role of a power structure.
Guy Benveniste9, in his book, POLITICS OF EXPERTISE, although it was not written specifically with the small local government in mind, suggests that alliances or coalitions can be formed with regard to a specific issue such as economic development that could include people or groups of people working together toward a common end with respect to that one issue that might otherwise be at odds with each other over other issues in the community. Certainly this
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idea deserves further exploration at the local level; however, it may be somewhat naive to believe that old animosities born and nurtured in the setting of a small community could be set aside for anything less than a major crisis.
DECISION MAKING
The concept of decision making in a small community or in local government is about as far removed from what is generally called the rational decision ^ method as one could possibly imagine. In most cases, it does not even fall into the classification that generally has been called objective decision making but, rather, could be described as either eclectic objective or mixed scanning. Under this category, we find what has been called the intuitive method of decision making, which in reality is based upon emotion or seat-of-the-pants experience rather than facts. This type of decision is common in local government. A step above this is incremental process, characterized by decisions being made in very small pieces and based upon an analysis of those small decisions rather than a proper analysis of all of the possible relevant factors. Under this process, the decisions that are rendered are often contradictory and of a subjective nature, depending upon what the decision to be made is and who is involved in the
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matter. At best, this amounts to what could be called the "good old boy" system or what the forces of economic development often refer to as being "home towned". Frequently, in local government we see that decisions are based not so much upon what it is that you want to do, but more upon who it is that wants to do it. This is unfortunate, and is another characteristic that will have to be dealt with more objectively if small communities desire to move into the area of economic development. It is one of the major contributing factors in how a community is perceived from a businessman's standpoint and is a source of distrust on the part of developers seeking to establish themselves in a community.
1. R. W. Burchell and G. Sternlieb, Planning Theory in the 1980's, The Center for Urban Policy Research, Rutgers University,
New Brunswick, New Jersey, Jan. 1979, p. 69-72.
2. L. Mumford, The City in History, Harcourt, Brace, Jovanovich, New York and London, 1961, p. 124.
3. T. R. Kitsos, Land Use in Colorado: The Planning Thicket, University of Colorado, Bureau of Government Research and Service, Boulder, Colo., 1974, p. 74-85.
4. Colorado Revised Statutes, 1973, 31-23-303.
5. S. R. Arnstein, "A Ladder of Citizen Participation", Journal of the American Institute of Planners, Vol. 35, July, 1969, pp. 216-224.
6. Energy Conservation and Natural Resource Task Force, "Mission Viejo Impact Analysis", City of Littleton, Colo., 1978.
7. Economic Development Advisory Group, "Recommendations to City Council", Littleton, Colo., March, 1979.
8. Industrial Development Magazine, Conway Publications, Inc., Atlanta, Ga., Sept., 1978.
9. G. Benveniste, The Politics of Expertise, Boyd and Fraser Publishing Co., San Francisco, Calif., 1977, pp. 184-200.
10. P. F. Drucker, The Practice of Management, Harper and Row,
New York and Evanston, 1954, pp. 351-369.
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III. ENVIRONMENT NECESSARY FOR ECONOMIC DEVELOPMENT
The environment that is felt to be necessary by the forces of economic development comes from a much more capitalistic^ point of view than that espoused by most
local governments. Basically, this point of view says that b
fii* -10-
government should do only those things that private enter-
prise cannot do for itself, that it should be small and w:
should be run in a businesslike fashion, and that the primary
tr i <*
function is to protect private property and private enter-
Mi4 \ .
prise. To a marked degree, however, we are beginning to ' i**
^ I rf***'
see private enterprise redefine those things that they feel a
*iT*n.,i**
government can do that private enterprise cannot do for

V'
itself, and it is in this area that we see government being able to work with private enterprise in the issuance of
fl**
industrial revenue bonds, the formulation of special improvement districts and generally finding ways to subsidize and to spread the overwhelming front end costs of economic development over a long period of time.
REPRESENTATIVE GOVERNMENT
In terms of representative government, most people involved in economic development in the private sector believe that there should be much more accountability than
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presently exists in government, and that governments should run in a more businesslike fashion than is presently the case. Generally, their definition of businesslike goes directly to the size of the bureaucracy and the amount of time that it takes for the wheels of government to turn.
It is their belief that the efficiency of those involved in government should be increased. Most particularly, however, it is felt that local government should assume a position of leadership and the ideals of a truly representative government should once more be restored.
In saying this, the forces of economic development are saying that local officials, once elected, should pay less attention to those who have elected them and devote more of their time to making decisions within the framework of the overall policies and goals of the community. Basically, this philosophy places very little reliance on the citizen participation programs as they are presently structured, that we have seen grow over the last ten years.
To the local official it says, "You have been elected as a representative of the people and with that election you have been given a mandate to carry out the business of the community. Because of your election, you have access to certain information that the general public does not possess relative to the conduct of the business of the community and, therefore, you should exercise your best judgement in making
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decisions, and not rely upon the input of the uninformed
citizenry in deciding what it is that the community will do." To do this requires great strength of conviction on the part of local officials.
STABILITY
necessary for economic development is one that will provide protection for long term capital investments. This means there must be some continuity over long periods of time in the attitudes and philosophy of the local government. Assurances must be made and procedures developed to insure that commitments made by one council or one administration will be honored by the next.
point of view that once a community makes the decision that it wants to be involved in economic development, that it stands by that decision. Economic development by its very
economy of the nation and the world. Because of this, there are peaks and valleys in the amount of economic development that we see occurring at the local level. Local communities involved in this process should realize that this is a reflection of what is happening in the
In terms of stability, the environment that is
It is also important from the private enterprise
2
nature is cyclical because it is subject to the larger
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larger economy and that they need to remain just as involved
during the periods of low activity as they are during the peaks. These variations in the level of economic development may last for a few months or, in extreme cases, for several years.
of promoting economic development, it is important during these periods of low activity the community remain just as committed to the idea of economic development and not abandon it merely because temporarily there is no activity in that area. This point is very important and very difficult for most councils to understand. The forces of economic development are quick to note when a community moves in and out of the field of economic development, and it is much more difficult for a community to reestablish itself as one that is interested in promoting development if its past history indicates that it is fickle in this respect.
firms that are worth having in the community are just as anxious to be assured that the development in which they locate will be of high quality as the community is. During periods of low economic development the community
survive a period of low activity if it realizes that this is merely a temporary economic downturn. If, during that downturn, it sacrifices its requirements and permits develop-
If a community is to be successful in the field
With regard to the quality of development, most
3
should certainly keep this in mind The community can
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merit of lesser quality to occur, it will find itself living with that poor quality for years in the future. This poor
quality development will act as a blighting effect on community once the level of economic development retur
to norma 1 .
GOAL SETTING AND POLICY MAKING
The environment necessary for economic develop-
ment requires the community involve itself in the process of establishing long term goals and setting out policies through which those goals will be achieved. These become the rules of the game, and it is important from an economic development point of view that these be clearly stated at the outset and that they be adhered to with some rigidity during the process.
This does not mean that they cannot be changed or revised, but the revision process should include ample lead time for the proposed changes to be evaluated and taken in to consideration in the long range planning of the forces of economic development that are active in the community.
It also requires that the initial goalsetting and policymaking procedures be carefully considered and well thought out by the community so that they will endure over long periods of time. Goals and policies should not be capriciously changed in order to achieve some short range desire
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of the community, and certainly the economic development community should be involved both in establishing the initial goals and policies and in any consideration for changing them.
CITIZENS' PARTICIPATION
Because it firmly believes in the principal of representative government, economic development believes that most citizen participation programs are a waste of time. Decisions should be made by decisionmakers who have been elected to represent the people and not subject to endless debate. Time is money, and the amount of time that is necessary for a group, through the citizen's participation process, to make a decision is directly reflected in terms of costs to the business or industry that might be involved in that decision. From the standpoint of economic development these are decisions that should have already been made in the community. To open them up and make them subject to pressure groups subjects an economic development program to the anxieties associated with uncertainty. The general feeling of the forces of economic development is that there are too many other opportunities for plant location that are equally acceptable; therefore, in most instances it would prefer not to become embroiled in this process, which has the potential of bad publicity for the
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particular business or industry as well as delays which result in increased expenses.
USE OF AVAILABLE RESOURCES
There are many resources available to the community
who wishes to become involved in economic development, and
generally speaking, it is not necessary for a community
to firmly commit out front to utilize all of these resources
or to develop a list of incentives that it will offer.
It is desirable, however, if a community will make a state-4
ment of intent which says briefly that it is interested in promoting economic development, that it recognizes there are many things that can be done to assist, and that it has examined these available incentives and given the right circumstances it is willing to use the various techniques to assist the forces of economic development with
problems of land assembly, the development of infrastructure
5
and financing. The waiver of local taxes does not seem to be of primary incentive in that usually the amount of dollars concerned with such a waiver amounts to a very small percentage of the annual operating costs of a business or industry.
LEGAL PROCEDURES
From a standpoint of legal procedures, most
In n\


commercial enterprises want things done correctly. First, as a safeguard against possible litigation from people who might object to their activities being established in the neighborhood, and secondly, from a standpoint of their own internal auditors and the Internal Revenue Service to whom they must make an annual accounting. They feel the same way about government. It is imperative that government have its house in order and that it can on short notice institute any of the legal proceedings available to it to assist in the development of economic activity.
One of the things that those involved in economic activity look for in a community, then, is a competent legal staff, well versed in municipal law and with a thorough understanding of the procedures that must be followed in order to put a development on the ground, and knowledgeable in what it takes for the municipality to issue development revenue bonds, undertake tax increment income financing, issue general obligation bonds, or to lease or sell land that is presently in public ownership. It is, therefore, necessary that the municipality have on its staff someone competent in these areas and able to prepare legal descriptions and to draft contracts and agreements in a form familiar to corporate attorneys.
Additionally, land should be zoned in a fashion acceptable to both the community and to the ultimate user in advance of economic development activity and the


municipality should be in a position to assist in arranging financing through the local banks*. The city should also have reviewed its development regulations with the intent being that those regulations would be as simple and expeditious as possible to avoid unnecessary delays in the development process, and, secondly, that those regulations would be predictable and would avoid last minute surprises and additional requirements.
Thirdly, the regulations should assure that quality standards are met in all development and that they are consistently applied to all properties within the community. This is not intended to imply that a community needs to eliminate or diminish its strict adherence to the standards of quality, safety and overall community benefit that development regulations are historically designed to insure. High standards of quality should never be sacrificed just to get some form of development on the ground, for once those standards are compromised the resulting loss in quality can never be recaptured. The development process should also make a differentiation between the policy issues that must be decided by council and the administrative details that can be dealt with at the staff level, and if at all possible more responsibility for these administrative details should be vested with the staff rather than with the planning commission so that unnecessary public hearings or meetings are avoided and that time is not wasted in repetitious discussion of matters that have already been


decided.
The community should seriously consider its position relative to the assistance in assembling parcels of suitable size for development. Quite often in the development process the inability of private enterprise to acquire key parcels and the unwillingness of the community to exercise its right of eminent domain with respect to these key parcels result not only in delay, and the expenses associated with that, but often result in the failure of the project ever really getting started. This is a very serious step for a community to consider and one that should be decided well in advance of any particular situation so that it can be considered in the light of a policy decision rather than as a reflection of the emotional issues that sometimes revolve around specific development proposals.
CAPITAL IMPROVEMENTS PROGRAM
From the standpoint of capital improvements the business community expects that the local government will have acted in a responsible way to assure that the infrastructure necessary to support development is in place and that some reasonable and logical plan exists for the installation of those facilities that are necessary to support continued growth. It expects that simple matters
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like sewage treatment, water supply, and an adequate transportation system have already been dealt with. This is not to say that responsible commercial and industrial development expects to be supported in these areas by the community, just the opposite is true, but they also expect that they will not be required to solve longstanding problems in the community that are not of a direct benefit to them or that did not or do not result from their activities. In short, they expect to pay their way, but they do not expect to have the community "ding" them for offsite improvements that bear no reasonable relationship to their development. These are the responsibility of the community, and the forces of economic development expect that the community will have considered them and worked out a reasonable plan for their solution well in advance of the time that they actually need to be installed.'7
Attempts to cause economic development to happen in communities that have not considered or addressed these issues are usually futile and result in a great deal of frustration both on the part of the business or industry that is attempting to relocate as well as for the community that seeks to have them within their corporate limits.
Worst of all, the lack of these facilities or any plan for their installation very quickly gives the prospective user the impression that the community does not know what it is about, does not have an understanding of what is necessary
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for development to happen and in general creates an overall unfavorable impression of that community in the eyes of prospective users.
STAFF
Economic development expects that the staff of a municipality will have the answers relative to what the feelings and policies of that community are, what facilities and services the community can provide, what land is available in the community, and the status of that land with respect to zoning restrictions, whether or not it is subdivided, if services and facilities are available to it, who owns it, and approximately how much it is worth. They also expect the staff to be knowledgeable in terms of how long it would take to gain the necessary approvals to undertake construction, what the likely reaction of the community might be, whether or not an acceptable work force could be recruited locally, and what the procedures are that must be followed in order to gain the necessary approvals and begin and complete construction. If your staff does not have the answers to these questions, then the local community would be well advised to assure itself that the homework necessary to obtain answers to these questions has been completed well in advance of any attempt to promote economic development.
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OTHER
Other things that would enhance the environment from the standpoint of promoting economic development would include an existing core of skilled professional citizens already residing within the community that could be utilized as a resource in both helping to promote economic development and in helping the community to understand the problems and needs of the business community.
In addition, provision of adequate housing in a price range that is affordable for the work force that will be provided or will be necessary to support the economic development activities is considered by some industrialists as a prime consideration in the relocation of a major facility. This last item dealing with housing is much more important in a free-standing community in the hinterlands than in a suburban setting where the housing inventory of the metropolitan area can be relied upon. The availability of a work force is another consideration of labor intensive industry.
THE CONCEPT OF EFFECTIVE POLITICAL LEADERSHIP
It has already been said that economic development generally comes from the philosophy more capitalistic than that shared by most local governments. What they are
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looking for from the community is that it would assume a strong leadership role. Some people involved in economic development feel that "Councils should not ask the citizens what it is they want to accomplish but, rather, they should exercise the mandate that was given them by virtue of their
g
election and tell the community what it is that is needed." This is a very strong statement, and one that is seldom articulated in a public forum, but it probably does truly reflect the feelings of the business community who, by and large, regard the endless debate and emotional arguments that accompany much economic development as a waste of time and a lack of political leadership.
THE FUNCTION OF GOVERNMENT
Economic development's view of the function of government comes from a capitalistic viewpoint. The major values of this ideology are individual self-fulfillment and materialism, and these relegate government to a specific role. Originally, this included only the responsibility of making sure that the process of doing business was made as predictable as possible, that the marketplace was safe from foreign or domestic challenges, and that private property rights were protected, not only from individuals but also from the State and from the majority. Over the
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past two hundred years and generally as a result of the Great Depression in the 1930's, this role has been modified to some extent to include a new role as regulator of the economy and provider of social security. The first of these tasks, of course, is accomplished through the government's ability to levy taxes and to spend public money, while the second manifests itself in many of the different types of social legislation that grew out of the depression.
This is a rather simplistic analysis of the functions of government under the capitalistic ideology, and relates more to the national scale than to local government.
However, if we examine these precepts carefully from the standpoint of economic development, we can see that to a very large extent they extend over into the local situation and reflect rather accurately what it is that the business community expects of local government.
A supporter of this philosophy sees government involvement in the area of land use planning and regulation, licensing and code enforcement, as intervention in the free market process, and though to some extent these expeditions might be tolerated, they are certainly not areas or activities which the business community feels are legitimate in terms of their view of the function of government.
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POWER STRUCTURE
The forces of economic development look to the elected officials of the community to assume the role of a power structure and make the basic assumption that under a representative form of government the people who have been elected have the responsibility and authority to carry out the day-to-day activities of that community.
Their view is that it is unnecessary, time-consuming and costly for these elected officials to routinely refer policy decisions back to their constituency for examination or ratification. From the viewpoint of the forces of economic development, it is irresponsible for local officials not to assume the leadership role that has been mandated to them through the electoral process. In their view, it violates the rules of the game that have been established and traditionally held by representative government throughout the history of this country. Participatory government in their view subjects the market process to uncertainty and, in effect, prohibits them from predicting with any degree of reliability, or at least with any acceptable degree of reliability, the chances of success in a specific endeavor. The process of just doing business today is complex enough without these additional problems being created by government, which really does not understand the process at all or the problems that
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confront the businessman nor the impact of regulations and requirements upon the cost of the product that is finally produced or upon the consumer that will purchase i t.
DECISION MAKING
In terms of decision making, the business community looks for some means of taking the uncertainty out of its day-to-day operations. Its view is that decisions should be made within a reasonable time, that once made those decisions should not be changed or modified unilaterally, and that they should be consistent with the framework of an overall policy that establishes the rules of the game and are not subject to arbitrary and capricious changes.
The decision making process should be predictable and not subject to a review or ratification process that would extend the time period unreasonably.
To the forces of economic development, meetings at which no decisions are made are a waste of everyone's time. They add to the frustration of both the developer and the general public, and only serve to prolong the process needlessly. In their view, the decision making process should be a rational one that follows an established format and that results in a decision being made after
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consideration of all of the relative factors. The incremental decision making style of most local governments does not meet this criteria.
1. K. M. Dolbeare and P. Dolbeare, op cit, pp. 18-36.
2. Economic Development Advisory Group, op cit, pp. 4.
3. Ibid, p. 3.
4 . Ibid, p 1.
5. U. S. Conference of Mayors, National Community Development Association, and Urban Land Institute, Local Development Tools and Techniques, Washington, D.C., p. 30.
6. Ibid, p. 27.
7. APA Planning Advisory Service Report No. 340, The Planners Role in Facilitating Private Sector Reinvestment,
Woodstock Institute, Chicago, 111., p. 10.
8. Statement of Orrel Daniel, President and Chairman of the Board, Littleton National Bank, Littleton, Colo.


IV. CONFLICTS
The purpose of this section is to identify the conflicts that exist between the manner in which local government conducts its affairs and the manner in which the forces of economic development would desire to see government operate. In order to better illustrate where these differences occur and their extent, a matrix has been constructed following the format of the previous two chapters. The discussion is intended to explain the conflicts and to elaborate on some possible reasons as to why the conflicts exist. Understanding the motivation that results in the conflict is a key element in reaching some middle ground that will permit a compromise to be worked out that is acceptable to both the local government and the forces of economic development.
These are not pat solutions, but are ideas that are intended to focus thinking in the direction of a solution rather than on a specific course of action.
REPRESENTATIVE GOVERNMENT
Under the heading of Representative Government is probably one of the most basic of the conflicts. Traditionally, local government has been at the "grass roots" of the political system. As the smallest unit of govern-
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merit, it has always sought to maintain very close contact with the citizens of the community. There are two reasons for this. First, it is the level of government most accessible, and therefore accountable, to the people; and secondly, because of commitments and promises made during the election process. In short, local government feels a very real commitment and allegiance to the electorate, and because of these feelings is reluctant to make decisions that are not popular unless it can clearly be shown to be in the public interest, from both a social as well as economic point of view. On the other side of the fence, the forces of economic development feel that the government should be run like a business, and that decisions should be based upon what is best for the community from purely an economic point of view.
Further, government should be held accountable for its actions, the bureaucracy should perform on a reasonable time schedule, and those elected to office should assume the responsibility to govern. In looking at the opposing elements of this conflict, it is basically a question of philosophy with government more oriented to people (individual rights and freedoms), and the forces of economic development leaning toward things and dollars (materi al i s ti c ).
Because of its people orientation and a desire to treat each case on its merits, there is little of
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LOCAL GOVERNMENT (as it sees its role)
ECONOMIC DEVELOPMENT (as it sees local government role)
Representst>ve Government. 1. Very little accountability or responsibi1ity, 1.
subject to pressure groups, issues generally settled by political pressure. Whoever has tne greatest number, or is the most influential, gets the issue resolved in their favor. 2.
3. 4 .
Stability
Very little stability in decision making 5.
process.
2. Very responsive to citizens. 6.
Goals and Policies
Citizen Participation
3. Goals and policies not related to fiscal 7.
cons i dera tions .
4. In suburban areas some qoa1s/policies are predetermined by Metro area.
5. Citizen Participation mandated by system of 8. Federal Revenue Sharing and Grants.
6. Subject to Equal Rights and Equal Opportunity legislation.
7. Citizen Participation occurs at "advisory" level.
8. Citizen Participation "a government within a government" free to use the referendum process at will.
Use of Available Resources
Legal Procedures
1. Tend to limit use of resources to those well 1. established by precedent.
2. Traditionally very conservative approach. 2.
Capital Improvement 3. Selected by council and distributed through- 3.
Program out the community on the basis of splitting
up the spoils. Not done according to overall plan or schedule. 4.
4. Small amounts of money available for capital
improvements. 5.
Use of Staff
Other
5. Staff generally has little or no experience. 6. Use of untrained local people common in freestanding communities.
6. In suburbs, some work with "interdisciplinary teams" capable of solving complex problems.
7. Use of "citizen task forces" to solve spe- 7.
cific problems.
8. Use of consultants on one shot basis. 8.
9.
Effective Political Leadership
1. Permits citizens to input Into the process and to impact the outcome of a decision.
Function of Government
Provide services (usually undefined).
1. 2.
3. Sees itself as a regulator In the develop- 3.
ment process. Does not want to make rules and then let development happen as an administrative function because of political ramifications. 4.
4. Very little acceptance for providing subsidies to economic development or housing in accord with an overall plan to promote economic development.
5. Remain isolated from commercial interests.
Government run in a business-like fashion. Decisions based upon economics ratner than emotion.
Governrent should be accountable for its act i ons.
Dislike for time wasted by bureaucracy.
Elected officials should assure responsibility for decisions and not knucxle under to pressure groups
Protect long term capital investments. Honor long term commitments.
Remain consistent in support during periods of inactivity and maintain hign standards.
Establish and adhere to long term goals and
policies.
The affairs of government should be carried out by those elected to govern. Citizen participation is a waste of time.
Wants to know It is welcome in the community, and that the community is willing to help business achieve its ends.
Expects competent legal staff, land zone and development regulations in order, willingness to use condemnation to assemble land in redevelopment areas.
C.I.P. done in accord with overall policy and schedule.
Pay own way, but not responsible to solve all of the problems in community.
Understanding of what is necessary to support economic development.
Expects staff to have answers about the community and to understand what is needed to support economic development.
Existing core of skilled professional ci ti zens.
Availability of work force.
Affordable housing -- more important in free-standing community than in suburb.
Strong political leadership; tells rather than asks.
Makes process as predictable as possible.
Minimum involvement in areas of regulation. Make the policy, and then let the policy be implemented administratively.
Expects local government to be willing to use techniques to spread costs and other incentives.
Power Structure
Decision Making
6. Does not accept idea that subsidy to business is an investment in the community. Some change 1n this attitude.
. 7. ' Extremely vulnerable because of relative size and general disinterest by the public in local affairs. 7. Local Government to assume role of power structure.
8. Looks for feedback from Community at large. I
9. Decisions are in fact compromises that are most likely to be acceptable to everyone, but that usually don't completely satisfy a nyone. .
10. Decisions not made within framework of overa11 policy. 8. Reduce uncertainty; make process of doing business as predictable as possible.
11 . Decisions made 1n incremental fashion, and are often contradictory. 9. Decisions should be made quickly and once made, not changed unilaterally.
12. Often based upon who wants to do something rather than what it is that will be done. 10. 11 . Decisions consistent with overall policies. Decision making process should be rational.


the stability in the local government process that the forces of economic development look for to protect its long term investments or to ensure that long term commitments will be honored. This source of uncertainty has caused more than one business or industry to seek contractual agreements that are enforceable in the courts prior to making the large investments necessary for economic development to occur.
Local governments usually develop goals and policies aimed at improving the quality of life in the community. Generally, this means that the focus of these goals and policies are social rather than fiscal. So long as the community adheres to these "rules of the game" once they are established, there is no conflict in this area between the forces of economic development and local government in that all the economic development community is really looking for is to know how the game will be played before it starts. Citizen participation is quite another story. Economic development, by and large, regards this as a serious impediment to progress as it measures progress. The real product of citizen participation is the process, which amounts to the involvement of the citizen in the functioning of his community.
By its very nature, this is time consuming and, if the citizen is to remain involved, must result in his gaining some of the power traditionally held by the elected official. To the forces of economic development,
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this is trouble, first because equated to a competitive place because it increases the level decision making process, which doing business.
USE OF AVAILABLE RESOURCES
time is money and can be in the market, and secondly of uncertainty in the adds to the problems of
In terms of the use of avilable resources, there are no real conflicts between the aims of local government and those sought by the forces of economic development. The private sector may prefer a more aggressive approach from the staff, both in terms of the legal department and from the community development staff than is demanded by the government, and it would certainly prefer that a community plan and program its capital improvements so as to permit long term reliance on that program being carried out, but for the most part, the private sector would consider this as exclusively the business of local government.
This is not to say that this area should not be of concern to local government. There are certain things that local government can do in this area that will enhance its competitive standing with other communities. These will be dealt with in some detail in the next chapter on Developing the Partnership.
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CONCEPT OF EFFECTIVE POLITICAL LEADERSHIP
In the area of Effective Political Leadership, the conflicts between local government and the forces of economic development again come into sharp focus. Here the philosophy of most local governments recognize the need for citizens to be able to participate in their government in a meaningful way. Most elected officials also recognize that failure to permit this to happen is tantamount to political suicide, that in some instances it has resulted in recall proceedings, and that because of a very small power base, they are extremely vulnerable. The forces of economic development on the other hand, do not recognize this, at least publicly. It is their position that local officials were elected to govern and, by being elected, they received a mandate from a majority of the citizens of the community to represent them and to make the tough decisions. They fail to recognize the vulnerability of the local official, or to understand how precariously the official must balance between the forces in the community that push and pull upon him. The official knows that time is what is needed to work out a solution and to reach compromises that are, if not satisfying, at least acceptable to those involved.
In this area, the forces of economic development need to develop a better understanding, or at least a
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tolerance, for the processes at work in the community and to provide in their planning ample lead time for the local officials to operate within the system that exists.
Local government perceives the function it is to serve as a provider of services, although in many cases the extent of those services is undefined. One of the services, however, that is clearly recognized is as regulator of the development process, and in this role most local governments feel that they are responsible for whatever is finally constructed within the community.
Their response to this problem is to carefully monitor the development process, making it, through regulations, subject to numerous public hearings, as if public scrutiny by itself will improve the quality of the development.
The forces of economic development, on the other hand, seek to have the development process made as predictable as possible, want a minimum involvement by government in the development process, and would prefer that the community be involved only in the policy determinations, and that once policies have been decided they be implemented at the administrative level. The reluctance of local government to let development occur at the administrative level is because local officials know that they will be held responsible by their constituency, and they do not want to be held responsible for what their staff might do
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within the regulations that have been developed.
A clearer definition of what they want to accomplish (policy), more attention to the development of performance standards, and more accountability from the professional staff might be one way in which this conflict can be eased. The basic conflict, again, in this area is between the opposing ideologies that say on one hand there must be an opportunity to consider opposing points of view and, on the other, the process must be predictable so that risk can be accurately assessed.
Other minor conflicts that need to be addressed in this section are how government perceives its relationship with economic development, which traditionally has been as far removed as possible, and how government regards subsidies .
The role of local government in the power structure has been discussed in the previous paragraphs. The conflict that exists is simply that the forces of economic development would like local government to more aggressively assert itself, while the officials, recognizing their vulnerability and limitations, contend that their role is really that of facilitation rather than leadership.
In terms of decision making, we frequently find that, at the local level, decisions are made in an incremental fashion, without regard for the effects that they have on other decisions, future or past, and without
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regard for policy, but more from the standpoint of who is involved. This can be related to the local government not having well defined policies or a clear understanding of the ramifications of a particular decision because of the inability of the staff to perform a proper analysis or to transmit the results of that analysis to the decision makers in time for them to adequately consider their alternatives. This conflicts because it results in uncertainty, and again increases the risk and therefore the cost of doing business.
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V. DEVELOPING THE PARTNERSHIP
Most of the material that has been written about how communities can encourage economic development, squarely places the responsibility for causing it to happen, and the blame for it not happening, on the shoulders of the community, and this is unfortunate. The result is that many community leaders have come to believe that if they really want to encourage economic development the community needs to compromise its principals, sacrifice its environmental values, and lower its standards. This is simply not true, and any good, responsible industrial development specialist will tell you that "any industrial/commercial development worth having will require that high environmental standards be maintained, that such businesses expect to pay their own way, and that they want to become a part of the community."^ What this implies is that, rather than a unilateral capitulation on the part of the City, as implied in most texts, it is possible to forge a partnership with some enduring value and mutual benefits. This, then, brings us to the purpose of this chapter, which is to examine the conflicts that exist between the way in which local government perceives itself and the manner in which the forces of economic development believe local government ought to conduct itself. These conflicts are a manifestation of the basic differences between the reform liberal and
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capitalistic points of view, and an understanding of this provides information about what each group must get out of the development process, and will provide the basis from which compromises may be reached and a parternership formed.
RESOLUTION OF CONFLICTS
What local government wants out of the development process is to broaden its tax base to reduce its reliance on residential uses and to support the level of services that it believes are needed and are acceptable to the community. In doing this, it must maintain its credibility and accountability to the community in terms of protecting the environmental values that the community feels are important. The forces of economic development must get a facility on the ground and operating within a specific time frame and at an overall cost that does not exceed a predetermined budget.
When these basic needs are isolated in this fashion, it does not appear that the desired ends are so different, or that either the local government or the forces of economic development need to be quite as static in their position as they sometimes are in attempting to reach agreement on how the development will occur. What happens is that what it is each seeks to gain is overlooked and opportunities for compromise are lost in personality conflicts and unwillingness to concede a point that, in the
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overall scheme of things, is unimportant because of a fear that concession in that area will be interpreted as a weakness in others. What really needs to happen is for everyone to clearly know, understand, and keep in mind what it is that everyone must get out of the process.
REPRESENTATIVE GOVERNMENT
The basic problem to be resolved here is how local government can maintain its credibility and accountability to the electorate and, at the same time, accomodate the time schedule and cost constraints of the prospective business or industry. It would appear that the best way to do this would be for certain things to be accomplished prior to any contact with an industrial/commercial user, and in the open where it is subject to public scrutiny in the form of a policy decision, as opposed to an emotional issue clouded by the relative merits or problems of a particular user. The things that need to be done are: l)the basic determination as to whether or not the community wants economic development; 2) the question of where it wants it to happen; 3) what it expects it to look like when it does happen; 4) what facilities and services will be necessary to support it when it does happen; 5) who pays for those facilities, when, and how.
Answering these five questions in a manner that satisfies the requirement of maintaining credibility and
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accountability with the electorate is a good deal more
complex than merely writing them down. The first three
must necessarily involve citizen participation at a 2
meaningful level, where the electorate has an opportunity to learn of the alternatives that are available, to discuss the ramifications of those alternatives, to decide what course of action they want to pursue, and finally, to input into the decision making process. This, of course, assumes that reasonable people, given the facts, make reasonable decisions. It also assumes that the community is willing to undertake a major effort prior to beginning to actively promote economic development. The answers gained from the process are the goals of the community and form the basis for the policies that will be established to provide the framework within which development will occur.
The answer to the first question, if it is in the
affirmative, should manifest itself in the form of a policy
3
statement or resolution that can be used to tell citizens of the community and the forces of economic development that the city is interested in having commercial/industrial development occur, and that in order to see that it does, the community is willing to do some things that will make it easier. The "things" the community is willing to do should be decided upon by the council after consideration of all the possible incentives it might offer. A sample list of incentives, together with a possible resolution, are contained as an appendix to this paper.
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The question of what is a reasonable subsidy
needs to be addressed by each community individually, and the answer is a function of what that community expects to receive in return for its investment. The subsidy that can be considered reasonable will, therefore, differ with each potential development. For instance, in one community cited in Local Development Tools and Techniques, the city was troubled with vacancies in second floor office space in its downtown. To solve this problem, it sought to attract a number of small businesses to use this space.
As an incentive, downtown parking was provided by the City. The cost of this investment was spread out over a number of years through revenue bonds funded from renting the space to the owners of the buildings. In other instances, large write-downs in land cost have been considered as a proper investment for a City to attract a particular user. This question of what constitutes a reasonable subsidy must be carefully considered in each instance.
Questions number 2 and 3 deal with where the development should occur and what it should look like after it happens. Once these questions have been answered in detail, a zoning classification with specific performance criteria can be developed and applied to the location decided upon. It should be noted that it is extremely important to answer these questions in detail. It is not possible to translate "low-rise office development"
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into a satisfactory performance standard. The extra effort and time required to answer these two questions with the degree of specificity required is well spent at this point and should serve to ease some tensions later on if everyone can be satisfied that their environmental concerns are being adequately addressed. Question number 4 requires some technical expertise and can best be answered by the staff, but only after the first three questions have been addressed. Once these facilities have been determined, the council can provide the answers to question number 5 through either a policy statement or as part of a Capital Improvement Program.
The above outlined procedure addresses all of the conflicts set out under the general heading of representative government by removing them from the time frame that economic development operates within. At the same time, it permits local government the opportunity to establish credibility and maintain accountability with its constituency, it reduces the uncertainty with regard to what the attitude of the community is, what will be expected in terms of the form of development, how and when services and facilities will be provided, and generally what the cost of development will be. It also channels citizen participation in a constructive direction, and although it does not guarantee that the development will not become an emotional issue, it does create some owner-
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ship on the part of the community as a whole in seeing that development does occur. It also provides the council with political support and the basis for making a decision as to what is best for the whole community.
USE OF AVAILABLE RESOURCES
Earlier in this paper it was acknowledged that there were no real conflicts under this area to be resolved, but that there were a number of resources that are available to local governments which are presently not being utilized. The purpose of this section is to list those resources and to indicate how they might be used to help a community to assist in the economic development process. This potpourri of ideas is organized into five general areas.
Some of the ideas presented in this section should be accomplished as part of any economic development program; others are purely optional and are included merely for informational purposes.
1. Assessment of the economic development potential^
This is an exercise that a community should do as a prerequisite to embarking upon any type of economic development program. It enables a community to realistically assess the potential it has for economic development and, if structured correctly, permits a community to identify and to develop solutions to many problems. The
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basic format for this analysis consists of two lists, one setting out all of the positive factors relating to the community, the other listing the negative factors. Once a listing has been completed, means of mitigating the negative factors should be developed, with the objective being to move as many of the negative factors to the positive list or, at a minimum, to reduce their effect.
The benefits of this relatively simple exercise are several. First, it forces you to look objectively at your community; secondly, it makes you aware of basic problems that usually go unnoticed and provides a means of dealing with those problems; and, thirdly, it provides information about the strong and weak points of the community that can be utilized in structuring an economic development program as well as community improvement programs.
2. Financing Techniques
Metropolitan Districts, Special Improvement Districts, Downtown Development Districts, and Downtown Development Corporations, are all forms of special taxing authorities that exist in the State of Colorado. Each of these was developed for a certain specific purpose, and, therefore, has some requirements that are peculiar to it and is better suited for some purposes than others.
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Other means of financing include Industrial Revenue Bonding, which does not increase the liabilities of the community; General Revenue Bonds, which may be used where a source of revenue can be identified and earmarked for retiring the bonds; and General Obligation Bonds, which have the full faith and credit of the community behind them and which are limited by statute as to the amount a community may issue. All of these forms of bonds have an advantage in that the rate of interest is from 1.5 to 3 percent less than conventional financing.
The Small Business Administration and the Economic Development Administration, the Colorado Housing Finance Authority, and Federal matching funds for planning and development through H.U.D., H.E.W., and F.H.W.A. are other sources that should not be overlooked. Specifically, in rural areas, matching loans and grants are available through various agencies under the auspices of the United States Department of Agriculture. Energy impact funds may be available from the State for those areas that are being impacted by energy development.
In the Denver metropolitan area, drainage projects in association with economic development can be assisted through the Urban Drainage and Flood Control District, and throughout the State, on certain specific projects, matching money may be available through the United States Army Corps of Engineers and the Heritage Conservation and
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Recreation Service, formerly the B.O.R. Related in a tangential way and as a means of scheduling projects and forecasting the need for financing, it is recommended that a capital improvement program be undertaken setting out the total needs of the city with respect to capital improvements, and prioritizing and scheduling those that can be expected to be undertaken during the next five years.
Other means of financial assistance that have been utilized by communities throughout the country include participating in joint marketing efforts, arrangements for financing projects by guaranteeing loans from local banks, land assembly and sale for development purposes at a lower price, local tax and fee waivers, rebates, or reductions, assistance from city staffs in
planning and engineering, and the construction of infra-
5
structure, just to mention a few. If a community is interested in providing financial assistance, there are numerous ways in which this can be done. This partial listing is included to provide some idea of the extent of the kinds of assistance that have been provided by some communities in the past. Wht the future holds is limited only by our imaginations.
DEVELOPMENT PROCESSING
Every community should review its regulations as
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they relate to development or redevelopment, with the purpose being to permit development to proceed as expeditiously as possible, and still meet the requirement for public consideration of policy matters. Policy matters are defined as those which affect how land in the community might be used (zoning), and do not include the administrative procedures such as platting or approval of site plans or development plans within the criteria set out as performance standards under the zoning classification.
A suggestion is to refine the process to provide for public hearings and council action on policy matters, and once the decision has been made to permit development through the zoning process, to let that development occur with review at the staff level, and in accordance with adopted regulations. This places more authority and responsibility with the staff, and with it should go additional accountability to ensure that policies are being followed.
Another area that should be carefully examined to see how it relates to the environmental values of the community are the performance requirements as they are applied to expansions of existing buildings. Here a community should weigh how much is really gained through this process against the cost of that gain in terms of the attitude of the business community.
The community can also enhance its position in dealing with the forces of economic development by
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establishing a single point^ of contact for developers to use in dealing with the city. This is not to say that this should be vested in a single individual, because no one should be indispensible, and the process must continue whether an individual is at work or not. This single point of contact should serve a clearinghouse function in providing information about the community, in monitoring the progress of a development through the process, and in representing the developer's interests and advocating for that development at stumbling blocks during the city's review of the proposal .
Another question that needs to be answered at this point is whether or not eminent domain will be utilized, particularly in redevelopment areas, to assemble land, or to deal with holdouts. This is a particularly sticky question in most communities and one that certainly must be couched in terms of public need. If a community determins that it will utilize this technique, then economic development or redevelopment needs to be defined as a public need.
MARKETING
A joint marketing^ approach, aimed at incorporating all of the land in the community that is available for economic development into a single package, and then
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through a professional marketing organization, exposing that package to potential users, is an approach that can be used to broaden the exposure of the available land in the community and increase the chances of scoring a "hit" since the package would contain a broader variety of opportunities than a single property. Financing this approach can be done through the owners of the various parcels contributing to the cost. The city may find it worthwhile to subsidize this activity since there will be some reluctance on the part of owners to use a well known marketing organization as opposed to a local realtor who also happens to be a friend.
Another area of marketing that is often overlooked is that of "selling the idea" to the community. This is certainly not a big deal, but it is an idea that can improve the city's relationship with the existing business community quite a bit if it is done right. One way it can be done easily is to have the mayor or other high local
o
official meet with all of the service clubs in the community and explain the "economic development program", what the city is doing, why it is important from the community standpoint, and what is hoped to be achieved through the effort. Service clubs are always looking for programs, and this one has some real potential interest.
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HOUSING
Housing is listed here as an available resource because without it, particularly in the case of the freestanding community, economic development is relegated to small, automated firms employing a minimum of people.
This is simply because, without affordable housing, a work force cannot be recruited. Some would argue that this type of economic development is what should be sought since it adds to the tax base but does not add substantially to the burden of education or other municipal services.
It does add to the property tax base, but it does not tap into the multiplier effect of new jobs in the community which spin off a large number of supporting
service jobs, new property taxes for those facilities,
g
and additional sales taxes.
Because of this, affordable housing is important, and some effort should be made to see it provided as an element of an economic development program. There are many ways that this can be accomplished through the private market, but if it does require a public subsidy, that should be looked upon as an investment.
CONCEPT OF EFFECTIVE POLITICAL LEADERSHIP
The conflicts described under this heading are
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basically the same as those delineated under Representative Government and are in reality a continuation of the struggle between the opposing ideologies. In this area, although the conflicts manifest themselves in slightly different terms, much of the solution already exists, provided the recommendations to 1) remove goals and policies from the development process, and 2) to revise the development regulations to require the council only to be involved in policy, and 3) to permit development agreeing with adopted policy to proceed administratively, have been followed.
If this has been done, then the key to resolving the remaining conflicts lies in honing the development process. First, we need to understand that, because development of any kind has the potential to affect property values, it is an emotional issue and, because of that, there will nearly always be some kind of pressure placed upon the council by adjacent property owners as a result of development. What we have attempted to do through trying to establish goals and policies outside the realm of development is to attempt to remove the emotion from the process, but, more than that, to provide an ownership of those goals on a community-wide basis that will reduce the vulnerability of the local officials to a vocal minority and allow the council to assume the role of the power structure rather than facilitator. If the goals truly
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were established through citizens participating in an enlightened and meaningful way, the popular support for the council to assume this role will be there.
Excising the ingrained need of the council to monitor the development process is perhaps the stiffest of all tasks. Several things will help to ease this situation. First is some assurance that through the development of performance standards they really have developed a means of assuring that what will actually be constructed on the ground will bear a reasonable resemblance of what was intended. In order for this to happen, the council needs a complete understanding of what they want as well as what can be constructed under the zoning classification and performance standards they finally adopt. Second, the council needs to develop confidence that the staff will interpret and enforce those standards as they were intended. This can only be done by the staff exhibiting over a period of time that it is capable of sound judgement and is competent. Thirdly, perhaps, is understanding that from a legal standpoint, it is not necessary for them to be involved in this process once they have established the policy.
Here, the legal staff can be a big help in explaining the zoning and subdivision process as they are set out in the state statutes.
Another area that needs to be addressed under
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effective political leadership is that of subsidies. In the section dealing with representative government, the subject of incentives was discussed and it was suggested that the council needed to develop a list of "things" that it was willing to do to induce economic development to happen in the community.
One of those "things" are subsidies, either direct or indirect, and the council needs to consciously address this matter and decide in a straightforward manner what the level of public participation will be. If it is to include direct or indirect subsidy such as putting the ground under a developer, building infrastructure, floating bonds, or waiving fees, it needs to be decided publicy and stated as a policy. It should also include what it is that the community will get in return for its investment. This is a very sensitive area since the expenditure of public funds for private benefit can result in charges of favoritism, misuse, or even malfeasance. How this particular question is handled is certainly a test of effective political leadership.
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1. Statement by Dick Pfeil, Vice President, Industrial Development, United Banks of Colorado, March, 1979.
2. S. R. Arnstein, op cit.
3. U. S. Conference of Mayors, National Community Development Association, Urban Land Institute, Local Economic Development Tools and Techniques, Washington, D.C., 1979, p. 21.
4. U. S. Conference of Mayors, National Community Development Association, Urban Land Institute, Economic Development:
New Roles for City Government, Washington, D.C., 1979, p. 4
5. U. S. Conference of Mayors, National Community Development Association, Urban Land Institute, Local Economic Development Tools and Techniques, Washington, D.C., 1979, pp.21-35
6. National League of Cities, "City Economic Development", Washington, D.C., April 30, 1979, p. 6.
7. U. S. Conference of Mayors, National Community Development Association, Urban Land Institute, Local Economic Development Tools and Techniques, Washington, D.C., 1979, p. 21.
8. U. S. Conference of Mayors, National Community Development Association, Urban Land Institute, Economic Development:
New Roles for City Government, Washington, D.C., 1 979 p. 19
9. National League of Ctiies, op cit, p. 5.
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VI. SUMMARY
The purpose of this paper is to define the role that a small local government should play in the process of economic development. In order to do this, we first looked at the traditional role that local government has played with respect to economic development. This role has been limited almost exclusively to that of regulator of the development process, and provider of services such as police protection, traffic control, and utilities. During this examination, we found that to some extent this role is beginning to change and local governments are attempting to move into the area of economic development. Primarily this change is a result of communities recognizing a need to broaden their financial base.
From this, the paper moves to a discussion of the philosophy of local government and how it perceives its role in the areas of representative government, use of available resources, and political leadership. In this section, the basic philosophy of local government is diagnosed as reform-liberalism and is character!'zed by a lack of strong political leadership, decision making on an incremental rather than a rational basis, and a constant search for citizen feedback on specific issues.
The next chapter then deals with the environment that the forces of economic development feel is necessary for them to operate effectively, and the view of the commercial sector is stated in the same format as the previous chapter.
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Basically, the point of view of the forces of economic development can be stated as coming from a capitalistic philosophy and are that government should do only those things that private enterprise cannot do for itself, that its primary function is to protect private investment, that it should be run efficiently and be accountable, and most importantly, that elected officials should assume more power and responsibility.
Chapter IV then sets out the conflicts that exist as a result of these two opposing points of view and explains the rational behind these poisitions and actions in order to develop an understanding of what it is that both local government and the forces of economic development want to achieve. What local government wants out of the process is to broaden its tax base while maintaining its credibility and accountability with the community by protecting the environmental values the community feels are important. What the forces of economic development want are simply to get a facility on the ground and operating within a specific time frame and budget. This sets the stage for the next chapter, which is a discussion of how the conflicts can be resolved and the ends of both local government and the forces of economic development achieved.
The technique recommended in Chapter V to resolve these issues is to decide the basic policy questions of whether a community wants to pursue economic development, if so, where and what kind through a citizen participation program outside the sphere of economic development activity. What this does is to meet the requirements, philosophically, of local govern-
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merit for considering varying points of view and establishes credibility and accountability. At the same time, it develops the community's ownership in those basic policy decisions and broadens the support that the council will need in order to assert itself as the political leadership of the community.
It also removes the uncertainty from the process for the forces of economic development in that basic policy decisions have already been made before they arrive on the scene.
Through this process, I have not really changed anything except the timing of when certain things get done. To be sure, some of the activities that have been recommended are not overt acts in many small governments, but functionally they still occur. What this does is to formalize the acts and to organize them in a fashion where forces that are potentially devisive are channeled into the process at a point where their activities are constructive. By doing this, the local government can develop a partnership with the forces of economic development and still maintain the role that it feels is necessary in the community.
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TOOLS AVAILABLE TO THE CITY FOR PROMOTION OF ECONOMIC DEVELOPMENT ALONG THE RIVERFRONT
Development Revenue Bonds
The "County and Municipality Development Revenue Bond Act" authorizes counties and municipalities to issue what is commonly referred to as "industrial revenue bonds". It is the specific legislative intent of this article to give municipalities the right to issue revenue bonds to promote industry and develop trade or other economic activity.
Based on a financing agreement with the user, the municipality may issue bonds for acquisition or construction of the permitted project. The bonds are secured by a mortgage or lien on the project or lien on any other property owned by the user.
In this case, municipal property is not pledged, but rather financing of the project is based on revenues derived from the specific authorized activity.
Tax Increment Financing
Pioneered in California and now used in several states, tax increment financing provides a means for generating sums of money traditionally obtained only through federal grant programs. The concept of tax increment financing is quite simple. A community creates a district for which plans have been made to develop or redevelop. Upon formal approval of the plan, property values within the designated district are frozen. This is the key to tax increment financing in that the level at which the property values are frozen occurs before any development or redevelopment occurs. This is then referred to as the base property value and all units of government continue to receive their share of the ad valorem taxes collected on the base property value.
As new development occurs, property values within the district begin to increase. The increased tax revenues in excess of those collected on the base property value are used to reimburse the community until the project is completed and costs are fully paid. At that point, all governmental units would begin receiving their share of the ad valorem taxes based on the increased property values.
Colorado's enabling legislation for tax increment financing is found in two sections of the state statutes. Under a 1971 act, tax increment financing was authorized for use in funding urban renewal projects.
In 1976, the legislature passed an act authorizing the use of tax increment financing in downtown redevelopment projects.


Tax increment financing is directly tied to the ad valorem tax system. For this technique to work, the project must cause a sufficient increase in property values to generate an adequate tax increment to pay off the project indebtedness. The increase in taxes may be achieved in a number of different ways. Probably the simplest way for this technique to work would be to prepare large vacant areas for redevelopment by providing the infrastructure required for future development.
This includes utilities, roads, open space, etc. This would eliminate the large front end expenditures for redevelopment that may have discouraged development of an otherwise desirable area.
Public Facilities Fees Refund
This method of finances proposes that the developer use part of the fees that are normally paid to the city for construction to assist in building the infrastructure necessary for the eventual development of the property. The source of these funds is the developer who normally pays them at the time he subdivides the property. In order for this alternative to be implemented, the city council would agree that a portion, or all of these funds could be used for this purpose.
This could be done prior to the subdivision of the property and the developer then given credit against the fee. This also could be used in conjunction with a special improvement district. In this manner, the developer would then front-end the costs of the development with the city floating special improvement bonds and then permit the developer to pay off the SID with the fees on an annual basis over the life of the district or in a lump sum. The decision associated with this proposal is that this money would not be available for other facilities which might be needed because of the development.
Consequently, the incentive on the part of the city would be to underwrite the facilities necessary to accommodate the development; i.e, schools, a fire station, traffic signals, and open space development.
G. 0. Bonds
Currently, the bonding capacity for general improvements is 3% of assessed valuation, or 3.3 million dollars. Of that amount, the remaining limit available to the City of Littleton is $1,700,000.
Land in Public Ownership
Please refer to the map.
Water-Sewer
Those communities in the metropolitan area that are served by the Denver Water Board for water supply, are presently on a water allocation program which, in effect, rations available water taps in the metroplitan area. The City of Littleton, over the past year, has received approximately


250 to 275 water taps. This area would not be affected that severely in that most of the land included as part of this development already has water supply. For those areas that do not have water service, the City of Littleton could very simply prioritize the allocation of water taps to this area.
Sewerage service is not a problem. Our sewage treatment capacity is quite sufficient to accommodate the development of this area. One incentive, however, that could be applied in this area would be to waive sewer tap fees which are associated with the type of facility constructed. By way of example, this would be a very good incentive for development of restaurants in this area in that restaurants have a very high sewer service rate.
Other Incentives
There are other creative kinds of incentives that could be utilized and such innovative creations may very well be the result of some brainstorming by this committee. Some that could be mentioned as possibl considerations would be the city's ability to zone and rezone property; also, the city's power of eminent domain/condemnation. The Santa Fe improvements currently being undertaken by the City and the Highway Department will be very important to the redevelopment of this area in that Santa Fe will be highly improved at this immediate location as will be Bowles Avenue east of Federal Boulevard. Others may be the lease of city-owned property or some "break" in taxes.
The above are merely suggestions, and hopefully will serve as food for thought for the committee.


CITY OF LITTLETON, COLORADO RESOLUTION NO. 12
SERIES OF 1979
A RESOLUTION OF THE CITY OF LITTLETON,
COLORADO, ADOPTING ECONOMIC DEVELOPMENT
POLICIES
WHEREAS, Littleton City Council, in response to several alternatives set forth in a Five-Year Financial Policy drafted in 1978, decided that promotion of new commercial tax base was its most promising alternative; and
WHEREAS, the City Council authorized creation of a Division of Economic Development within the Department of Community Development to pursue economic development activities; and
WHEREAS, City Council appointed a five-member Economic Development Advisory Group representing the private sector perspective on economic development issues; and
WHEREAS, City Council has received economic development policy recommendations from the above named committee; and
WHEREAS, the Economic Development Advisory Group has established the following goals for the City's Economic Development Program:
1. Promote new commercial tax base within the City of Littleton
2. Increase employment base within the City of Littleton.
3. Create a favorable business image for the City of Littleton.
4. Simplify and streamline the development process within established standards for quality development.
5. Intensify development in downtown Littleton (including Riverfront).
6. Develop a Regional Employment Center in the vacant southern area of the City.
7. Provide a balanced housing stock within the community.
8. Assure there will be opportunities for future economic growth to support an acceptable level of public services for the residents and business of Littleton.


City of Littleton
Resolution No. __
Series of 1979
9. Facilitate private sector development by timely action to expedite public sector investment and capital improvements.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LITTLETON, COLORADO, THAT:
1. The City of Littleton is interested in attracting quality commercial development and will give priority to expeditious consummation of such development.
2. The City of Littleton may utilize a wide range of financial and development incentives as necessary to attract quality development.
3. The City will assume a leadership role in bringing together and negotiating with landowners and prospective businesses to accomplish economic development goals.
4. The report entitled "Economic Development Advisory Group Policy Recommendations to City Council" is hereby adopted by this Council to serve as a policy guide for economic development activities. *
INTRODUCED, READ, AND ADOPTED at a regularly scheduled meeting of the City Council of the City of Littleton on April 3, 1979, at 7:30 p.m., at the Littleton Center, 2255 West Berry Avenue.
President of Council
ATTEST:
City Clerk


LOCAL PUBLIC INVESTMENT REGIONAL
AN ASSESSMENT OF ECONOMIC ELOPMENT POTENTIAL
(+) POSITIVE FACTORS
. AMENITIES OF STATE AND REGION
. CENTRALIZED LOCATION BETWEEN TECH CENTER & KEN CARYL RANCH DESIGNATED REGIONAL ACTIVITY CENTER (DRCOG & RTD)
. LOCALLY OWNED SEWER TREATMENT PLAN WITH EXCESS CAPACITY SKILLED, WELL-EDUCATED LABOR FORCE
(-) NEGATIVE FACTORS
COMPETITION FROM OTHER LOCAL JURISDICTIONS RETAIL SALES COMPETITION:
. CINDERELLA CITY SOUTHGLENN PERLMACK ... etc
. NO COUNTY SALES TAX WATER LIMITATIONS LACK OF EXTRATERRITORIAL CONTROL HOUSING COSTS
.URBAN DRAINAGE IISACF
!STATE HIGHWAY .BOR
FEDERAL/STATE GRANTS .CDBG
.SMALL CITIES .RTD
.ECON.DEV.ADMIN.
.STATE HOUSING
, TRANSPORTATION IMPROVEMENTS .COLORADO 470 PARKWAY .SANTA FE
.RAILROAD DEPRESSION ONGOING CAPITAL IMPROVEMENTS PROGRAM EXISTING HOUSING PROGRAM SOUTH PLATTE CHANNELIZATION
.NEW DEVELOPABLE LAND AVAILABLE
LACK OF COMPREHENSIVE ECONOMIC DEVELOPMENT PROGRAM TO CAPITALIZE IMPACT OF PUBLIC INVESTMENT UNCERTAINTY RE: SOUTH PLATTE CHANNEL UNCERTAINTY RE: MINERAL AVENUE/KEN CARYL
CONSTRUCTION
LACK OF COORDINATION BETWEEN DEVELOPMENT AND
CAPITAL IMPROVEMENTS
. HOME RULE CHARTER AVAILABLE VACANT LAND CURRENT CENTRAL AREA REDEVELOPMENT COMMUNITY IDENTITY
.HISTORICAL CHARACTER .RECREATIONAL FACILITIES .CULTURAL FACILITIES .LOCAL PRESS
. COMPLAN: COMMUNITY DEVELOPMENT PLAN CITY COUNCIL SUPPORT OF QUALITY ECONOMIC DEVELOPMENT
. CONSERVATIVE ANNEXATION POLICY
. PRESENT ZONING ALLOWS INDUSTRIAL AND COMMERCIAL MIX UNFAVORABLE LAND USE MIX
. WEST OF SANTA FE SOUTH OF BOWLES
. PROVINCIAL ATTITUDE OF COMMUNITY
. LACK OF SUPPORT/UNDERSTANDING FOR COMMUNITY
. LOCAL GOVERNMENT WEAKNESSES
.ADMINISTRATION OF DEVELOPMENT REGULATIONS
.TENUOUS LINK BETWEEN POLICY FORMATION AND IMPLEMENTATION STRATEGY


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