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Market-oriented incentives for redevelopment

stevenl

Member
Messages
2
Points
0
I am coordinating a redevelopment plan to revitalize neighborhoods in the City for which I work. The community is a very rural city of 14,500 people. Has anyone used or experimented with more market-oriented approaches to encouraging redevelopment in this type of setting? If so, what have you found to be the most effective approaches? I know the questions are very broad based and open-ended, but I am trying to solicit as many options as possible to consider.

Thanks.
 

Cardinal

Cyburbian
Messages
10,078
Points
33
I'd say that working with the markets is by far the best approach. The key to making it successful is to think like the developer or business. What type of project will the market support? What are the gaps that are not being met?

We have taken a strategy of directing the market to the locations we want to see developed, in order to maximize benefit to the community. The idea is to foster development that creates the right environment for a further objective, such as downtown revitalization. We have gone so far as to purchase, subdivide, improve and sell property for development. This is not just industrial ground (a 540-acre business park) but commercial and residential ground as well.

I'm not one to say that government should be run like a business, but in economic development, at least think like one.
 

stevenl

Member
Messages
2
Points
0
Michael,

Thanks for the reply. I know that we (i.e., the City) are looking at specifically acquiring some properties to resubdivide, improve, and sell, as you noted you did. What other incentives have you used to get the private sector to invest? Unfortunately, the areas to which I referred do not appear to have a lot of market potential according to some persons in the community with whom I have spoken (perception is reality as the cliche goes). There is a benefit to allowing areas to "bottom out" in terms of price so entrepreneurial persons can acquire property at a low cost, rehabilitate/redevelop it, market the properties towards a targeted audience, and through time see revitalization take place and earn a nice profit. Atlanta, GA comes to mind since that is one of the closest examples. Prices became too high in certain parts of the City , so some people began buying properties in more economically depressed areas (built in market demand for more affordable housing), "fixed them up," and the neighborhoods have seen a renaissance. Obviously, that is "short, sweet, and simple" version. In contrast, the city for which I work does not have that same built in market demand. There are a number of social and economic factors I could describe that also deter demand. How have you been able to direct the market towards areas with perceived little market potential (if there was a perception of little market potential in your community)?
 

Cardinal

Cyburbian
Messages
10,078
Points
33
Most properties can fit some market niche, whether commercial, industrial, park/public, or housing. Start out by determining what is most needed. In our community we found a need for all types of housing: affordable to upper-end, rental and owner-occupied, senior, student and family. We tried to find sites most suitable to each, so that family rentals and entry-level homes are being build near the business park, and sites for seniors have been identified downtown and near a medical clinic.

If the area is truly undesireable you can direct public improvements towards it as an enhancement - for example; a public park, municipal building, road/utility reconstruction, etc. We acquired property for a lakefront park in the downtown as an enhancement to encourage redevelopment of the surrounding properties. As for other incentives, we have used TIF to underwrite the land cost, offer small low-interest loans for facade renovation and business expansion, and can issue bonds for housing development (low-moderate).

It isn't unusual for the "born'n raised" not to see the potential in a site. Sometimes the answer is to find a developer from outside the area.

Interestingly, Whitewater is similar to your community. We have a population of about 13,700 and are an hour from Milwaukee.
 

Budgie

Cyburbian
Messages
5,270
Points
30
Chamber of Commerce

Do you have an active Chamber of Commerce? In my neck of the woods there is strong cooperation and communication (not always agreement) between the City, County, and Chamber. An active Chamber of Commerce can act as a moderator between government and business. The first mission of an Chamber (in my opinion) should be business retention. The common saying is that it's easier to keep the businesses you have than to attract new businesses.

I agree with the previous reply, that you need to think like a business. What specific niche in the market is underserved? What is you market demographics? Although they are crude, basic input/output modeling can give some clues. The City should closely monitor vacant existing sites that are already improved with public services if a glut of these sites exist, it may be adventageous to scrutinize proposed expansion of commercial to areas on the fringe of your community. Work with your County to limit development in the County thereby making city sites more attractive and no matter what you do, don't provide city services outside the city limits.
 
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