Reaching for the Future: New ULI Publication Explores Creative Financing Tools, Partnerships that Give Smaller Communities a Competitive Boost
April 21, 2016
For more information, contact Trish Riggs at 202-624-7086
PHILADELPHIA (April 21, 2016) — The ability of smaller communities to leverage their strengths and position themselves as attractive places to live, work and invest is explored in a new Urban Land Institute (ULI) publication, Reaching for the Future: Creative Finance for Smaller Communities.
The report, co-written by ULI Senior Resident Fellow Maureen McAvey and ULI Senior Resident Fellow Tom Murphy, was discussed today during ULI’s Spring Meeting in Philadelphia. Reaching for the Future highlights examples of leadership in urban and suburban communities that demonstrate the use of innovative partnerships and financing to gain a competitive edge. Six case studies are profiled: East Liberty in Pittsburgh; City Center in Greenville, South Carolina; the downtown of Allentown, Pennsylvania; Orland Park, Illinois, outside of Chicago; Over-The-Rhine in Cincinnati; and Sugar Land, Texas, near Houston.
“Every community is buffeted by global and national economic forces…Every community has a choice: to react and manage the effects of those forces or be proactive and decide what type of community it wants to be, based on its strengths. A community’s ability to change its trajectory begins with intentionality, the point at which a community decides to become something other than what it has been traditionally,” says the report. It lists a set of “ingredients” that must be in place for a successful transformation:
- A clear understanding of a community’s competitive advantages – The legacy and talent generated by traditional industries can be the foundation of a new economy and can support alternative financing sources for the community’s future.
- Strong leadership by both the public and private sectors – It is at that moment of doubt – when it is safer not to go forward – that bold leadership is essential.
- A strategic vision – Developments happen incrementally, but great cities happen strategically; a strategic vision must encompass diverse opportunities for residents, and nurture a rich sense of history, architecture, industry, culture and arts, institutions, and natural resources.
- An entrepreneurial spirit – Communities need to rethink zoning and parking regulations, and repurpose obsolete buildings; those changes require rethinking the status quo.
- A public-private partnership culture – The most positive impact public-private partnerships can have is catalyzing more development.
- Knowledge of public financing tools – Communities have become increasingly sophisticated in creating a menu of financing tools (such as tax increment financing, tax abatement programs) and layering them to support development.
- A commitment to design excellence – Successful communities have a unique sense of place built on history and nature; they are walkable and vibrant, with interesting architecture and a mix of uses.
- Organizational and staff capacity – The lead organization and its staff must have both the responsibility and authority to bring together money, land, and a sophisticated deal-making capacity.
“All too often, communities paralyze themselves because they do not believe they have the resources to initiative change…A community can choose to say it is ‘doing OK,’ or it can decide to enhance its standing by changing,” the report says.
Each case study in Reaching for the Future illustrates how communities have used partnerships and combined different sources of financing to facilitate dramatic change:
- East Liberty, Pittsburgh – this Pittsburgh neighborhood is a lesson in public-private entrepreneurial culture. East Liberty’s revitalization was initiated by the public, built on by committed and savvy local developers, and repeatedly endorsed and supported by new public officials. A 20-year renaissance is still in the making.
- City Center, Greenville, South Carolina – A multi-term mayor and dedicated staff held to a strategic vision for downtown, using public dollars and public spaces to reframe the city center. Commitment to design excellence transformed an eyesore road and ravine into a stunning pedestrian bridge connected to public walkways, creating a new urban center with first-class amenities.
- Allentown, Pennsylvania – Innovative state funding tools allowed state tax receipts to remain downtown and bankroll new construction of offices, a hotel, retail shops and an arena. Strong local developers and business leadership were pivotal in embracing the new vision. Capitalizing on the city’s competitive advantages, Allentown is enhancing the entire Lehigh Valley region.
- Orland Park, Illinois – In this Chicago suburb, the conversion of a classic suburban downtown to a modern mixed-use village was delayed by the Great Recession. Public leadership, working with a citizen review board, stepped up its commitment – significantly increasing its financial risk – to realize the desired vision.
- Over-the-Rhine, Cincinnati – Major local corporations decided to reverse the decline of the downtown and a close-in neighborhood. Partnering with the city, a new, focused redevelopment organization was created and privately funded for several years. A sophisticated staff was hired to run the organization, resulting in a revitalization that is still underway.
- Sugar Land, Texas – Building on a rich history and an array of historic buildings, Sugar Land used a vision and strong design sense to retool an obsolete manufacturing and processing plant as a mix of urban center uses.
Reaching for the Future provides an overview of several public financing tools and development incentives that are alternatives to traditional forms of investment, including the New Markets Tax Credit and Low-Income Housing Tax Credit programs, federal historic rehabilitation tax credits, Community Development Block Grants, revolving loan funds, Section 108 Loan Guarantee program, bond financing, land leases and land banks, EB-5 Immigrant Investor program, tax increment financing, tax abatements and business improvement districts. While often complex, these tools serve as a means of sharing the risks associated with transformational projects, the report notes.
It offers several lessons learned from the experiences of the communities profiled, including the importance of:
- Creating community share space to connect neighborhoods and build consensus
- Staying focused on the end game with a goal and strategy
- Building on existing assets
- Gradually reducing the public subsidy as a project gains momentum
- Using many different financing tools and reaching out to different stakeholders to “cobble together” success
- Developing inclusivity so all stakeholders are involved in decision making, and
- Preparing for unintended consequences
“There will always be a hundred reasons why something cannot happen, and there is never enough funding…in communities across the country, the successes are about an individual or a small group of people who were aspirational, who took risks, and who reached for the future,” the report concludes.
Reaching for the Future was supported with a generous grant from ULI Foundation Governor James R. Harris, whose insights and expertise provided the basis for the publication. Harris is the founding partner of James R. Harris Partners, LLC in Fort Worth, Texas.
About the Urban Land Institute
The Urban Land Institute is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the Institute has more than 38,000 members worldwide representing all aspects of land use and development disciplines.