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Home My WebLink About05-17-2012 05-17 & 18-2012 � � �a „��,��.* CITY OF -*.��`` �,,.�;� � � . ��' . �a`` ��-� WA5H[NGT�N 20'� 2 C ��ty Co� �co0 Ret�eat � = � �k «� �� -,,;� �:. F �A. x NS �r �� ( E � . "Ctavn�/��-fH�� T�a1� ��'.��wY . ECO�O��' � -� � � ° � F� � � "�'1�l� � � �.� �;. � "':y�n�"9''u��j�'ei$1 .4 : .�� vyFy,'� Z�� w'VF�'ZF3� 1i^WR4�'2'.d0�1.e.M1'J'N .� ��"."'�'3+ . �} ' A^�"'�^ i ,, r7"*r'�2'��sr r o3WsL'ea.aa.'�y."�"'.,. . '.�. .;.. 'ri�'�w�� 'S.c7.a.— ._.. �� ...`�/n��+ 'ri-,'�� ''-�'��.;�� . � �M �� _ ,_ : ti . :� � ay � 7 -� � , 2� 1� 2 �� . � ALTBURN * !�1[]RE TF�AN YOIJ�IMAGINED 1 A'iei+,�'—.� ' C[TY[aF �� .,Y,,;.>- * � .��y�aJL � - # -- � WASHINGTC?N � , AL�BURN * MC7RE T3��AN YOU [MAGINED , * CITY�F -�'��' .* iy a i "�" * WA5H�NGTON ��f�c'�� 871� "To acco��p�0osh g.rea�t t� en�gs , we � �ust not o� �y a.ct, � �� als�o � �e� � ; ��o� �on'�y �p � a � , b�� al;so beDoevee „ Anatole France, Nobel Prize Winner in Literature ; �B[:J�'�tij * M�RE TriAN YOU TA+tAG1NED 1 � ��F * ` 'k * - WA,SHINGTON ��'��t ��111�1"� "IVothing great was �ever achieved without en�thusiasm:.:" Ralph Waldo Emerson BE �� 1 �"��J��o IIl�9 : �I!��:��li�� H:I I� �C� �➢�G C�9AE� IPiON'.IihI�G @OIS;i�N`I`N(� AUBURN * MOItE THAN YC7U iMAG1N�D , * . CITY OF �� * � , � � „ � �- ` WASHINGTON �� - ��I;r�� LI��I�� • MuJti-generafional eco.nomic develo,pment vision • Increase unders�ta�nding of the City's economic streng;ths and assets � I�den�tify priorities and focuses for City's economic develo;pmen�t efforts � Broaden the Council's perspecfive on what "feeds" and can be "fed" by econorn'ic developrnent (i.e. 4 Pillars of Economic Develo,pmen�t) • Refine ideas for Econornic :Development Strategy Areas • Align City's economic development and cap:ital investment priorities �ALUBLTR�T * MOTtE THAN Y�iJ iMAGINED * Cl'LY OF * * - � k - . �� WASHINGTt?N _ , , Retre�u� �a�:les of �o�da;ic� Be En:thusi'astic Ha�e Fun Aet Like K�ids (i.e. Don:'t be Hampered by Adult �Concerns) Think Long-Term: (2050 anyone?) Th�ink Big and Broad: "N'o Fear" — nothing is off the table and there IS no dumb question or point! Tangents are OK! — Wh,o knows what great ideas might emerge Do Not Dwell on $$$ - This is a visioni�ng rneeting not a: bud'get meeting�!. • Challenge Y�ourse'ff' and Ot�hers (res,pectfully for the latter)� Ask Questions ��iU� 'k'Ma1�E THAI'+I Y'OU'.IIvtI1GINED . * CITY OF � * � ' ,ir : # s--�---� WASHZNGTON �e�rea�� — �rocess & Ag,e��d� • Process = intentionally informal � • Opportun�ity for Council to engage with each other and with staff on "big picture" discussions • Agen�da h�as �to�tal�� of �6�� sessio�ns: - Format of agenda is really �broken down into 3 parts: �. !Background Inforrnation — Auburn & Others 2. Economic Development Ideas, Principles & Examples s. Council Discussion Items • Simi�lar to previous Council retreats, wi�ll "Parking Lot'' items that either the Cou�ncil wan.ts to discuss at another poin�t in retreat or after the retrea# 1�UBU�RN * hAt�RE T'HAN YOC1 [lvtAG1NED * CITY OF * ' * � , * � : WASHINGTON ��t�� - ��I��i �� A�� Q�9 �'ST1�0��9S � EFO'R�E WE P��CIE�E�? �j]�$i[J�j * MORE T�IAN YOG iNtAGINED l / � * CITY flF -..�--f^-�" �>-'��k � s � � II # �---��r WASHINGTON �r � ; ; � AUB�TRN * MORE THAN YC3U lMAG1NED _-_,�:.,<_' CIT'��F --�. _ _ _:. � �`�� * :: , �. , m -- WASHIf�iG�"��1 ' ,��ve��s � ��y� �� Vision wit'hout acfion is a dayd�ream, action without . . . V.IS�r.o.n rs a nig'�'ltl'Y1Ct'fe. Japanese proverb � Where there is no vision, the people are unrestrained, but haippy is he who keeps the law. King James Bible � If you don't have a vision, nothing happens. ChristopherReeve � ff you can ' t see where you are going, you won ' t get there. ShelleyColeman �1�J�� * MOItE '�Hfll�1 'YC3�! 1MAGlt*�ED . . � , * CITY OF * �-�'� * N-. � - ��°��`' WA5HiNGTC}N ��'�'�f��S O� Y� I��D�O��I � �� • Breaks yoa out of boundary thinking • Identifies dicection and :purpose • Promotes interest and cornmi#ment a Encourages openness and unique and creati�e solutions e Builds loyalty through invol�ement • Results in efficiency and productivify AUBURI�T * M(aRE THAN YOU lMAG1NED * � CITY OF * ��''��_ .�* � � Ex�sto ��g A�al�urn Visoou� & � � �� WA5HIN.GT(�N � �SSiOO'II� �/0�0��: • As a City of regional significance, proud of its srnalf fiown he.ritage as well as the diversity of its people and neighborhoods, Auburn offers an opportunity for people of all ages to enjoy life. IVI9SSION:: • To provide a service-or.iented government that meets the needs of ou�r citizens and business cornrnunity through efficient and. professional management with responsive accessibl'e 'lead�ership. Soucce: COA2011'-12 Budget ��$,[��j * MORE THAN Y�[l lMAG1NED �� , * CITYOF * � ` .., ,� - - .a- �.. �. _ ; A�a �u�r� 's Ca� r�°�r�t Voso�a� fo� # ' WAS�HII�IGTC}N � ; �he Futa�ire � Provide: for pu'blic safety � Encourage a sense of cornrnu��nity • Encourags economic deveiopmen�t • I'mprove designated urban center • Complete pub'Iic works projects • Plan future C'ify Devefoprnent • Actively support regional tra�nsportation irnprovement • Enhance quality of I'ife Source 2011/2012 Qity of Auburn Budget pg 41 -43 AUBCJRN * n�o� �Arr Yc�u iMnc�N�� .�_�k� CITY OF * =�` "� �� -�'" * � � - '� W�.ere Visoo��ir�� i,ves i�n t�e * ' � WASHII�TGTt3N 6i;�1�'C� i�0'�°i��IQ�'�99 � �IlS51�Ilfl � Why we exist ; Co�e ��lues What we believe in V1SIl0�1 What we want to be Strategy How we plan to:get there 1V1Ieas�r�in.g O�ate.or�es How we wilt know that we have arrived P�og�a�s l I'rojec�s What we must do B�dget a�d Budget ��ocesses� Whaf.we do ,A[j�BCJ�Rj\j� * MOTtE'THAN YOU IMAGINE � 1 � Cj�QF * ".�r � . . . .�k � ; ��I�SSDOQI, ��.�!�A�S q:Q��C� \/DS'1�11� * � WA5HINGT(�N � --� �Y`� St�te�rr�e��s - S�� nr��a�y �y zEy`'t�r '. �-cy ; 'r",�R"' � ¢,_ ��it �' &£3 ,� S� -? r �wk �*¢"z''- � Y�,_� y _ ��,�'w�^ '��"S.f.Z: � �'3�9a(. �� ` �#T�� !'r 4��'�`tf4 .1�' 1 "'� �l -. '�Z, ',i.a � n'xc`�xY,�t.t x�„�- '� .tr a.a,Ye ,� .st a��Y�'2' t0y '{S,, `e ..a' .,,,�„"R�w„b..�$ra',.dj"�i *��`�`<� �`_3Swa'�,'�„�F.:�F ,�.�:-»�=�� yTt,r"�f.t«,'�`v_'.�.�.x�.,x ��.' ��e.sF:��s£��4�~�7�+,.��:�'w a;-. Mission ✓ V1/hat do we do ✓ Long term in nature ✓ What;our"purpose 'is, ✓ Can adapt if fihe scope of what value we provide products/serviees change and why we exist ✓ Is�never completely fulfilled Values ✓ Whatwe believe in ✓ Neverchange, be true to values ✓ V1/hat we stand for ✓ Should be specific and meaningful Vision ✓ Where are we going ✓ Focus on the picture instead of ✓ What the future looks the sfatemenf like ✓ Should stcetch City to achieve ✓ Inspirational and aspirational ✓ Draw an the beliefs, mission,, and en�i'ronrnent of the City ✓ Do nof assurne that the system� will have �the same framework as it does �foday r�vuv��: T ,��v�.� ��. �...v ��.AGIN�D * CITY OF �` �=°'``y �" * * . wAsxrr��Torr ��"�CI��01�� tQ�� I�S001'� 9 t i s �� ye a �s �ro rr� tod�ay's d.a�,te a n�d� yo�� have , r�arveD�o�sly e�� ou-gh , c�reated' yo� � most des{i �-��I�e cu�y. '� ow it us you�r � o� , as City Co � a� co � 9 to e �voso�on� o� — as af you were ��8e to see it, rea�l�isto�cally � �o� a��d� yo� �JB[j'�j; * MORE THAN YOU IMAGWED 1 � CITY�F * �� ;,. * � � Ec�u�o�ne�c DeveOop�e;nt — k .. • � �,y°r. ►'�YlYJ�Hi!`I G 1 �1`I a: '�`� Wa'1�� Does o�� VI'�a`1�;? "The purpose of local economic development (LED) is to build up the economic capacity of a local area to improve its economic future and the qaality of life for all. It 'is a pcocess by which public, business and nongovernmental sector partners work collectively to create befter conditions for economic growth and ernployment generation" — The World 8ank ' "A program, gr.oup of policies, or activity that seeks to improve the economicwell-being and � quality of life for a community, by creating andloc retaining jobs that facilitate growth and provide a stable tax base" — Intemafional Economic De:velopment Council °The process; policies, and activities by which a community improves the long-term economic and social well-being of its people. The objective of economic development is a sustainable increase in living standards, including per capita 'income, education, health, and environmental protection" — U:S. Department of 1-lousing and Urban Development �j.�$[]�j * MORE THAN YOU IMAGINED , CITY QF' * "`�.* ,* � � �co�� c �eve0�p��e�� — � * - �' WASH��NGTO�N • � � VVI�at �oes o� �M�e�� °�' Source: U.S: Department of Housing & Urban Development Economic Developrnent Steategy: • Offers government, the private and not-for-profit sectors, and local communities the oppoctunity to work together to improve the local economy. Focuses on enhancing competitiveness, increasing sustainable growtM, and ensuring that growth is!inclusive. Approachescan include: - Ensuring that the local investment clirnate'is functional for local businesses; - Supporting small and medium-sized enterprises; - Encouraging the formation of new enterprises; - Attracting:external investmemt (nationally and internationally); - Investing in physical�{hard.) infrastructure; - Investing.in soft infrastructure (educational and workforce development, institutionaCsupport systems, and regulatory issues); - Supporting the.growth of particular clusters of�businesses; - Targeting particular parts of the city for regeneration or growth (area-based initiatives); - Supp.orting informal and.newly emerging businesses; and� - Targeting and�assisting certain disadvantaged groups AvBu� * !MORE THAN YQU IMAGINED I 1 � CITYOF -.*��:�-. �' * � . - � E��o�r�:i�c �eve0�pr�ent — ' -� � WASHINGT�N ��I� �� I� �'�a�'°' V�/� �t do�s �e�o ��o�r� oc developu� e�r�t r�ea � �o� yo � as e�l:ec�ed Dea� e �s � � d cotoze � s o� A � 'b �c�� '? AUBLTRN * M�RE THAN YOU lMAG1NED ' � �I ,R� ��i�';� �FM,� - F,; j , ;�• ,I I�. : ,. � E �° I '0' (•' I i G � l�; �-, y �-= i�' � �I � ,� � � '' e.� � ° , " � - '` �� F � - .. � , � �� I �' � � � I t�� _.. ___ - -- .__..---- ___ ___ � - -__ _ __ , . _ __ _ -;;2� _•�� i=-":�izt;�� I � a I i }��.�� l t'"`.�s;: � y 4 .... , + ! �J-1'� G'. ' �I� ,I a �?�-� i .f�Jp'�I�,.i f� `� i d v � i �� P�` t� ` i� �. P f}_� �e . �� C�� i� � �4` 4� ip' �b'S I-y ^ i�� } '.�.�� t��3 �." .:� �F f. ^ � �� 1� `�� 5 Prs � � } . �� i ' r i i r . t �(1 i � f �1.��. .. � �� a � �. �( t . . �' J'f ��c-}, ��rk .ri ".�. � t � �� F . 1a _ i- i 1 - IV � � �i � t�! �.. � ^��pr,� �. Ii � ��.'� i � :�tli r i .� r- .� . 6 ' t, -ri r "l�'1�-. i �—"'� i > >_ i i a:'�i ��°a._, q' _ y� 'tl �. 1 1 � -_ ,�� t � ��I � #I ! � � � �.,� _ Id �� I � 0 I t ; n �� I i �,.,_.� � �411� '�- : ` : i i�i i ,,, — �, ! 's �rs' - _ , -� `� ' {i ;�; .; 1s.; '�'. : �! - '';N �r '�, .�,. ! ��' ; ��} I : ; � � � _ —:'� , . � J ��y� ' 1 i � ,; , �`.ti;9'�', � '�i:_ '.' + =_ - + � � O " • 1 3k CITY OF --�z��''"�.4- * - � - . ��o�o.ra��i�c �eve�opr�e�n:t — �. � # _ WASHINGT�N ��'� ��' ''�� "Keeping u,p with the Joneses'' ✓ "If We �Don't �Do It, Who Else Will?" � � , � � ,� � Reven ue� � . .� �� , � °�'�� j . r . 't� �r 79�' � � ` �Snk�"e r�.,�%� `•;.. �¢� il \ >' t_ �;�` . p. fYS� � '$5:Y n ."HR.# �4. •. � Fear �'�'°` �� . � f:� � ,Quality �of Life = , F � � Realize C.ommunity Vision� �- ` :�:' ✓ Support the Comprehensive Plan AUBURN * 'MORE T�IAN YOU IMAGINED * CITY(?F * �` � ,* a.. Ec��or� ic �D�evelopa�e�nt — # - WASHINGTON �; ; � �� '�� VO/f� a� � �e t�l�e Co � � c�il�' s re�so � s �or d o i n�g� e co n o ��i�c � eve�l o p r�e ��? �jJB[jRj�j� � MO1�E Tfi/1N YOU lMAG1NED �-�* CITY C?F .�� * „ y . _ _ �. Eco�or��a�c Deve oprn�e�nt — * --� _ ..� WA5HINGTON ; , � , Sta�te I�e� a� l��ory Con�text • Growth ManagementAct (,RCW 36.70AA20) - Encourage economic developrnent throughout the state that is consistent with adopted' comprehensive plans; pr:omote economic opportunity for all citizens of the state, especially for unemployed and disadvantaged persons; and encourage growth in areas experiencing insufficient economicgrowth, all within the capacities of'the state's natural resources and 'local public facilities • RCW 35.21 .70.3 - Economic development programs. It shall be in the public purpose for all cities to engage in economic development programs. In additioo, cities may corntract with nonprofit corporations in furtherance of this and other acts �celating to economic development o Washington local gover:nments are verv limited as to what they may undertake in the area of economic development o Article 8, sectionJ of the state constitution provides — "No county, city, town or other municipal corporation shall hereafter give any money, property, or loan its money, or credit to or in;aid of any indi�idual, association, company or corporation, except for the necessary support:of the poor and infirm" �$(Jj�j!1j * MOR� THAN Yt7U lMAG1NED 1 � cir�oF * � * � _� `� � � �xi�s�u�g Eco�omoc �eveBop�me�t * - � was�x�Ncrorr EDe�e�t — Coa�;p�re;he�sove P�ar� GOAL 1�7. ECONOMIC�DEVELOPMENT To ensure:the long-term economie,health of the City and the region through a diversified economic base.that supports a wide range of employment opportunities for Auburn's residents and those of the region and through the promotion of quality industrial and commercial development which matches the aspirations of the community. Objective 9.1. Promote a diversified economic base capable of withstanding changes in interest rates, inflation, tax structure and market conditions . Objective 9.2. Produce commercial and industrial siting policies which are based on the assessment of local needs:and the availability of transportation and other infrastructure required to serve it. Objective 9.3. Develop effective lamd�use polices and economic-development.strategies that pcovide long- term and stable employrnent, increase;per capita income and�reduce the tax burden of'Auburn residents. Objective 9.4. Maintain an adequate supply of land to support:future economic development and assure the availability of economie opportunities for future generations . Objective 9.5. Utilize the City's�:wniqwe environmental opportunities and planned infrastructure to build on and support econormic development.efforts Refer to Retreat Packet forCopy of Cutrent Economic Development�Chapter (Chapter 8) �B(j� * MORE Tt�AN YC]U IMAGINED * CITY UF � �* � � - Ec��oi�m;i�c �eve0�prt��n�t -� � WA5H�LNGT4N ��'��g,� ��IS • Novembec 2005: City issued Economic :De�elopment Strategy � �., Areas — Strategies, Targets and Logistics for different fi`; � ' s ak* rs+��NT F� r� .�� ,� geographic areas of City. 5 target ar:eas identified `"� � '�� _ � , �� :��:�� ti :; -.. �<:' ' ��•.i�._Tt� r�b� _ •, �i+J� ��`'' ' • October 201;0 : � - City Council agrees on idea of expanding elernents of Urban Center - greater residential population density (i.e. mixed' use), clustered non-residential 'intensity (offices, retail, services), increased employment and multi-modal transportation (i.e. walking, transit, bicycling) - to key econoroic nodes in City - Council,identifies Economic Developrnent Strategy Areas as key economic nodes • November 2010 8� April 2011 : Planning & Community Developrnent Comrnittee discuss and give input on the bowndaries, characterisfics and issues for fhe Strafegy Areas as well, as other potential areas in the City that might be looked� at" AjJ;�[j� * MORE THAN YOU IMAGINED , � CI'TY OF �� * o * � C u ��e ��# E�co �� .o�r� o c 1NAS�HINGTt3N ��i�IQi ��I� �v�� ➢ Esf�ab0ush ca#y wic9e targ.e# busir�ess secto�s �a�u�d deve,0op�e:r��t ➢ New �usuc�ess deveoopme��, reDocc��tion ar�d� �ecruitu�e�at ➢ Ca��ren� ba�siness refe,rotio� a�d ex�pansuon ➢ ��suu�ess c�ssistcar�ce tlhrov�� eclucca�tio� anc! trauc�u�g ➢ Co�y vvucle ne�nro��cing fo� �ut��e pa��ers�i'p ➢ Develo�p wror�orce develop�er�t :pa��e�s ➢ Estab06sh Q��cancluu�g ar�d �epu�a�uon ➢ Cor�aple�e cer#ifucatiou�: of i�Z a�d �orr�atuo� AUBURN * ��RE TWAN YOU IMAGiNED 1 � CITY OF -��:=��__ * O: 0 @ � C�urre �t lu��oa#oves � � �I * � - w.�sx!INGTQN ��0��`Ca'�S ➢ Zoning Code �,pdates ➢ Aub�acn Urban Center fou� lnnova$ion Pa�tneu�ships ➢ Environmental �ark �istrictlGreer� Zone — Future �usiness Psan/Marketi'n:g Strategy ➢ Dow�town �9rbao� Center ➢ Comprehensive Dovvntown �arking IVlanagement :Plan ➢ Healthcaa-e Over:�ay District ➢ Cluster S�u@�divAsion ➢ Cottage Housing ➢ Aub�ua�s� Way Soa�th P�a�ning - �'utt�re irnprovernent and rec9eveloprnent ➢ Airport Expansion - Aeros;pace Job TrainBng Clus$er ,��:B�i�j � lVIQAE THAN YOtI ilvtAGINED * CITY OF _�� * .� r ` * � .�::�-� �JV'ASH�'N�G7�C}N '� �� ' �!1 ��I�� 0��'� ➢ Far�anciaf: • No substantive changes in perrnit fees since 2009 • Downtown Catalyst Area Tr,affic Impact Fee Waiver — 5 block area (4 block Aubur:n Junction and 1 block One Main Stceet) — expires June 2012 • Fee Deferrals (Impact Fees & System Development Charges) — Residential (Single & Multi-Family) and Non-Residential — expires April; 2013 • Construction Sales Tax Exemption — Up to 100,000 for new construction or redevelopment of existing� buildings 25,000 s:f. or gceater or expansion of existing building footprint that creates new or expanded! building floor area; applicable in Downtown l7rban Center (DUC), Heavy Commercial (C3), Mixed Use Comrnercial (C4) zoning districts, Enviconmental Park (.EP) District, Light Industeial (M-1 ) and Heavy Industrial (M-2) zoning disfricts — expires June 2015 �jjg(jR[\j'* MORE THAN YOU:IMAGINED * CITY OF * ` * o . , � C�u�rre�� ce�n�i�ves � - � wnsxi�NGroN� (��0 Q'�l�t� �1�1J�� ➢ �inancBal: • Small Business Development:Assistance Pilot Program — Reduces planning, permitting and engineering fees up to 50% of regular fee rates. Available to new businesses starting in the City of Auburn or existing bwsinesses that want to expand and move in the City of Auburn or an existing business that wants to relocate fo the Gity of Auburn. SmaIF businesses must have20 or fewerfull- time employee#o be eligible. no charge for participation in the Small BuSiness Developmenf Assistance Pilot Prognam for eligible 6usinesses - expires December 201'3 • Multi-Family Property Tax Exemption — 8 year prop.erty tax exemption#or qualified new multifamily and rehabilitated multi=family housing constructed in Downtown:core and 12-year pcoperty tax exemption foc qualifled'new affordable multifamily and rehabilitated multifamily housimg constructed in Downtown — no current expiration • Low Impact Development Credit— Up to 70% credit for stormwater system development charge for provision of LID facilities to manage on-site stormwater ➢ Other: • Promenade/City Hall Plaza/Plaza Park Investments • A/B Corridor M Street Underpass • Downtown Plan '& Environmental Impact Statement • Dne Stop Permit Center • Client Dir.ected Permitting Process 1��],�� * MORE Tf�iAN YdU IhAAGWED * CITY OF * * f _ WASH�IN.GTON. �)C��'�� IpS � O,�S ➢ WASHIN:GTOfV STATE DEPARTMEiVT O:F COMMERCE ➢ WAS'9iIN:GTON COMIVIISSION;�OF ECOINOMIC DEVELOPMENT ➢ ENTERPRISES SEATTLE ➢ PSRC ➢ KING COUNTYfCONOMIC DEVELOPMENT ➢ KING COUNTY AEROSPACE ALLIANCE ➢ PIERCE COUNTY DEVELO.PMENT A�UTHORITY ➢ URBAN LAND INSTITUTE ➢ AUBURN AREA CHAMBER OF C:OMMERCE ➢ GREEN iRIVER COMMUIVITY �COLLAGE ➢ SMALL BUSINESS ADMIfVISTRATION & SMALL BUSNESS DEVELOPMEiVT CENTER ➢ WORLD TRADE CENTER OF TACOIVIA ➢ WASHIfVGTOIV; ECOYVOMIC D:EVELOPMENT ASSOCIATIOiV� �r��'�j * MC3RE THAN YC7U ilvlAG1NED , * CITY OF -.�`=�� * ,.- * wAS�H�r�GTON �,0�� D'I� ��/ �q'�.�C��I;� �: � � �� BCTR'N *'��1�� THfIN YC7U [hviAG1NED * C1TY C?F * � �* � � * - W}15�HIIVGTC)N / ; i ' � , � AUrBCJ'RN"* M,�RE TNAN YdU IMAGIt+]ED � * CITY OF -�"`�� * � ' : i . - WASHIN�TC?N � � �� I �� http://www.youtube.com/watch ?v=37 uEYeMJSA&fe ature=player embedded AU�i�jR�V �k Mt]RE THAN YOU [MAGIN�D . i ��P ' Y. � �I �'Yi I�''M � �. �— '+`�'l.� �+�'��' �; �� I .+ ;�, �' i � ,�, � � ! �� ., � •. ,,�i �, I - � _ ` Built;Capitalj � , r ,.-:.T:� ]sY-:. if : . f ...� — . � ' � • '_. ... ..� . Y'�• _ _. � ..� l, '�L S :. .T ',.� ,t Auburnrsj " ' � Sociai � � � ` � � �Human � �'� Capitali, : ' � , � _IECOI1Q111IC ' f �Capital ' � _ `D:evelop.m�enf, ' ' . � - __ ..:� . . : ;; - ' � Natu�al `. ".," Cajiital ` j � Y " • � � �- * GITY OF �" ,� * � '� V'VAAS�HIt�iGTC�N �� T�� 0-I�o� ewo�°k Assog � r� e��t �esu0ts Cou;�co�0 's Au�bur� Specif�c Examples of: ✓ �� olt �� p�o��l a ✓ �9 � �� Ca�po�a � ✓ �9'a�a� �a� Capo�a:l ✓ Socia� Ca;pu�a.l ALT�iURN * MOItE THAN YaU�iMAG1NED ?k � °'` - CITY�F _.�,��- * ,� A�,ba�r� !/ala�es �Iovv �r�d O�r�to t�he * � �� ..�, �� w�,sx�x�Tvrt� — , , � ' 'Fa��e �e�u:ty Mayor �a.cku�s m Family: • Strong sense of �family & personal relationships • Legacy to future generatioms � Safety: • Strong sense of security :& well-being • Safe nei'ghborhoods & publie places • Responsive & proactive approach to public safety and emergency preparedness , • Faith: • Individual religious beliefs • Freedom #o worship • Connection between spiritual and physical well-being; �B�j� * MORE TfiAN YO[J lMAG1NED 1 � . ci�nr oF �:�_.��:�� * �` Av�u�� VaO�ues I�o�nr ai�d Du��o �Q�e .� -� , * --�"� WASHINGTQN E�tl��"�' � ��'�� /O.r ��CBC�S Community: m Informed and engaged in comrnunity issues m Faifih, cespect & service to each other and our community • Sense of �P�face • Embrace our history • �fndividual.responsibility • Volunteerism o Diversity Enviconment: • Healthy & inviting • Walkable .neighborhoods and downtown • Parks ace clean & friendly AUBLT'RN * 1�i�TL.E THAN YOUTlvIAGINED � CITY I]F * y _ _ * � � e4a�bvr� i/��la�es �ow a�d' � r�to ��e . � � WASHINGT(�N ��r� — ��/ �� B��IIC�S Business & Econornic Vifalify: o Diverse opportunities for employment • Respected role in regional development • "Entrepreneur.ial Spirit" • Commitmentto ethical business Health Care: • Respo.nsive • Preventive philosophy • Focus on fitness • Mental� well-being AjJB(J�j * M(7RE TI��AN Y0[J'IMAGINED , * CITY OF -�_ * A�ba�r� V�I�a�es �N�o�r a.nd D ��o ��e . �..� ��,S�H��To►� ��t�� - �� yo� ��5 Education: • Educated & culturally experienced citizens s Comrnitment #o lif.e-long learning • Relationships with higher education institutions e Access to� good libraries • Strong appreciation & respect for the Arts Government: - • Responsible • Transparenfi & proactive • Commitment to accountability • Effectiveness • Engaged' citizens �B�J�j * MORE THAN YC7U IM,AGINED , * CITY OF * �.-x` -- * * - � WASHINGTC}N ��11 � � �� 9 � '��'ll 19`:�� a��'�� AUBURN * �MOTtE THAN YOU iMAGINED , * CITY OF �� * � � � ..��l,..Y�� t�MS�iN �VO ��S�� .�W * � �` WASHINGTt}N ��I'�� 0� ��V��Q1� I�eec9s �ased: e4sset ��sed: � • Focus on� issues, problems and • Focused on� a communnity's needs of a community, e.g. we strengths and assets, e.g. we don't 'have enough fand to attract have lands and buildings that large scale manufacturers would work for small • Concentrate on� the problems manufacturers. and needs or their causes m Concentrate on, a community's • Devote institutional energy, capacity not its deficits capacity and resources towards o Build an internal and external fixing the problems or their positive perception of the causes community � • Leverage strengths and assets for enhanced economic d'e�elop:ment outcornes AUBCT'RN' * MLOAE'T�iAN YOU IMAGINED � � Ct�g� --k�a�� 'k 9 i � , � �� '�� 1�� ' 20 � 2 R�es � l��s WASHINGTt}N � "�►a��a�a�� os at a ca�ossroads o� ga�ovvt� ; wa;�� a d:iveo-se eco��o�y aa�d�� grea�� -eguona,a a�tto-actuor�s; we au-e in t�oe patl� o� �1r9�ao�� IDe�re�oprme�t & G'�ov�lh ao�d� we need� to be ready �or ut." Anonymous Auburn �Bus'iness Owner �jJ$ '[J�j:* MORE T�-iAN Y�U IMAGiNED , � �, ,«�--� *�� CITY l�F -�'" ,�'�' * o � ; � ��Y �`�� '.50 �'��S � 4�!9 � �� * 2'� � 2 ReS u ��S � WASI-IINGT�I�I � � '�ICey T�her�es fro� Sv�vey ➢ Auburn's location is key business factor ➢ Client base for current clients is pri'marily "local" ➢ Traffic is key business challenge ➢ Transportation network is important — needs to be maintained and improved ➢ City is viewed as business supportive ��[�� * hiORE THAN YO�U [MAGINED , * CITY UF_ -�`�� m : A�� a,ou�� so �ess S � �ey ` �►+VA5H�[NGTC?N 2,�0� 11 2 �' ��S��I�S S�rvey :De�aii0s a�nd�� Co�tr��ls : ➢ Survey was developed as a online product ➢ 30� companies invited by e-mail to take part ➢ A cross section of retail, rnanufacturing and service .& support ➢ One follow up request was sent ➢ 5 day res.ponse period i ➢ 4'3:3 % responded � 1 . How long (yeacs) has your company been operating in fhe City of Auburn? 10%0 0 — 2 10% 2 - 5 24% 5 — 10 28% 1i0 — 20 28% 2Q�and up � �j;rg�jv *iMORE THAN Y�U iMAGINED * CITY UF * "�'' * • i4ub ��r;r� � �s:r�ess Sa��vey � _ _ „��= WASHINGT4N ��1 � � ��'S � ��S 2. Why has your cornpany chosen to be in Auburn? 10% 'Public'transportation 32% Regional location-Product 10% Access to trained workforce distribution 0% Access to goods & services 32% Local � � arket needed my 0% Proximity to Municipal Air.port services 0% Available ineenti�e pnograms 24% Auburn 'is rny horne town o 0 /o School system 24% Proximity to freeways 24°/a A great place to do business Other:Cost of manufacturing space; 16% Overall cost of doing business close commute for employees; 16% Srnall town character building fit needs 16% -No local B & O tax 16% A belief in the future of this City 16% Close to other like cornpanies 10% 'Local' government services/attitude Au$jJR�N * 'MORE Tt�illN YOU tivtAG1NED , _ * CITYUF ��_ * v � A��ba��n ��suu��ess S ��vey � WASHINGTON 2`O � � '� ��S'U`��S 3. What.are :the challenges of doing �business 'in� Auburn? 24% Traffic. ZO%o Lack of vitality 1'6% Crime 1.0% Local government services/attitude 10% V1/orkforce 10% Location 40% Local Market 1�% Other: Parking 'is a significant ehallenge 0% Small �town �B(��j * MO1�E :T�iAN YOU IMAGINED � �- * CITY C}F -�" � * ; Aa� b �r� � ��son�e�ss� S �� rvey * WA5HII�GTON 2� � 2 � ��:S'�'I�S 4. How would you rate the City's support of business and why? 46% Excellent 55% Good' 29% Average 0% Fair 0%a Poor Please explain your rating: ➢ City should provide additional parking ➢ Mayor/Council very supportive; Staff tends to be bureaucratic and does not advance initiatives ➢ The city interfaces well with business ➢ Mayor sefs a proactive tone ➢ V1/here we are located; the city has little fo no influence over our business AUBCTRN * MORE Tf�iAN YOU 1MAGINED 1 C��F -•.�.��` * * . A��ba��; ��uso�,ess S��vey * tNASHINGTON �� , � ��S�U�I�S 5. Please rate any o,f the following Econornic �eveiopmenr business services have you 36% Excellent Sewice received from the City recently. 18.5% Average Service Rlanning 0% Improvement Needed 45% Excellent Serviee Utilities 1�8.5% Average Service 10% Excellent Service 0% Improvement Needed 18.5% Average Service Permitting / Licensing 10% Improvement Needed 36% Excellent Service Public Information 27% Average Service 18.5% Excellent Service 0% Improvement Needed 18.5% Average Service . Training 0% Improvement:Needed 18.5 Excellent Service Police Services 0% Average'Service 55% Excellent Service 0% Irnprovement'Needed 0%o Average Service 0% Improvement Needed AUBU'R�J;* MORE THAN Y�U-IMAGINED 1 � Ct�QF � _�� . �s '� p Aub ��r�r� � �so �ess S ��v�ey ` Z,� 12 �e�s� l�ts - WASHINGTaN � � � 5. Continued Code Enforcement Public Works 0% Excellent Service 10% Excellent Service 18:5% Average Service 27% Average Service 0% Improvement Needed 0% Improvement Needed Education Emergency Service 0% Excellent Service 36% Excellent 'Service 10% Average Service 0% Average Service 0% Improvement Needed 0% Improvement Needed Building Inspection 27% Excellent Service 10% Average Service 0% Improvement Needed AUSLTRN * MOItE Tt IAN YO[1 IMAGINED � y 9e�t�—.._T GITY OF_ -� � - * o � � A�� fbu�r� � ��so � ess Su�rvey � WASH�INGTaN �;� 1 Z � 6��5 �D ��S ; 6. What could the City do #o h.elp make your business more successful? ➢ Create a Wind Facm ➢ Fiber optics down West Main Street through the 'Environmental 'Park ➢ Free Parking ➢ An active roll in public infrastructure including a dedicafion of funds and pursuit of public grants ➢ Transportafiion; poor interface between of highway off ramps to city streets ➢ Purchase all city goods locally � ➢ Continue supporting busine.ss ➢ Workforce� development �B[J�,[�j! * MORE THICN YOU:IMAGINED , * CITY OF �� - * o � �'V ��111i � �5� �'�� 'll �'�� . Y WASHINGT�QN �� Z � ��S � �_�� 7. V11hat business(es), either in your industry or outside of your 'industey,. would you like to see imthe Cifiy ofAuburn that is currently not located here? Would having this business(es) help your company and if so, how? ➢ Recruit science based companies ➢ Recruit high technology firrns ➢ Create a customer service call center �g[T�?,j�� * ;M�RE T�IAN`YOU iMAG1N�D * CITY l7F -.*�:�.�'� ,. �- * • n ��p� ` �'� � �� II II � '�Y S�� S� � V�9� � ��. * 2,� � 2 Res � D�s - WASHI�NGTQ'I!d � 8. Any additional comments: ➢ "Keep up the good work." ➢ "Great communications from .City Council, to staff, to business." ➢ "Aubur=n is at a crossroads of growth; with a diverse economy and great regional aftracfiions; we are in the path of Ur.ban Development & Gcow and we need to 'be ready for it:" �J:�i[J'� 'k M�1tE TI•-IAN YOU:iMAG1NED , * CITYOF. * . `��' * * _ ' WASITYNGTON �� I�I� �I'I�� Wh:at a�re �he Co�or��c_oI�'s �ho.a�g9��s a �d od�ea�s o� A�u �� u� 's S�re � gth�s � �d e�sse�s? �jJ.B[J�� * MORE THAN YOU IMAGINED �K CITY t}F * * � * WASH�LNGTON O�� e �° Co� u��a,v ��o�o.e�s ' �x� r� ples of Ecou� o� o � Deve � o � �eu�� P{�o�orat.iza.t�eor� & �oc�s AUBURN * 'MOItE THAI�1 YOU 1MAGINED , * CITY OF * * � ; �,.. * - � WASHiNGTON �� 'O'� ��V��C�O'�o O � • Population/Area = 90,000/18.6 square miles • 5 Key Tar:get Market Sectors: - Electrical Equi'pmenfi - Scientifc and Medical 'Instruments - Soffiniare and Inforrnation Services - Sporti'ng Equipmenf and Apparel - Food'Processing � Workforce Training Assistance Program - $500-$2,500 per new hire to maximurn: of $50,000 for fiarget market business: located in or expanding to City 1�U:BU�* MORE Tl-iA'N YOU lMAG1NED 1 T Cl�'�}� * 'w'a�" 7k � � � ( .._+ � . � - � � � wnsx�r�G-rorr ��'1�� 0�� @/�'C�'0��,� � � e Businesses in� fhese industries may�be eligible for. specialized Gity assistance, including: - Customized' reports (industrytrends, forecasfs, competitive maeket, etc.) - Potential suppli:ers:of mater:ials and services - Assistance finding public financing and low-cost loans - Business strategy brainstorming - Business operations assessment - Business plan review - Workforce training assistance - Local demographic andi'business location inforrnation - Infor:mation on� other'businesses in yo,ur field - �Potential bwsiness leads for expansion� (local, cegional, international) - Site selection seruices - Assistanee findimg public business education, oppoctunities - 1Nor:kfiorce development referral service �!�jJ� * MORE THAN YOU IMAGINED � � �--- * CITY UF -.�'' . * � r ' * tNASHII�tGTC3N ��t� O� 6�O'� I��; ��Qs �� C�S • Population/Area = 99,987/26.3 square miles • 4 Key Tar,get Market Clusters: - Clean� Energy - Computer Systems Development - Life Sciences - Supply Chain Management ALTBURN* MOItE THAN YOU IMACINED . * CITY 4F * * ,. * wnsxiNGrorr '�0� O!� �V� �1iSt06'�, !Il • Population/Area = 74,486/7.8 square miles • 4 Key Target Market Clustecs:: - Clean Tech and Sustainable Industries - Activewear - Software - Advanced Manufacturing �;jJ��J!�ji �k.MORE THAI�I YOU IMAGINED , * CITY OF -��- * i # WA5HINGTON ��:� �� '��r.� � �� • Populafiion/Area = 75, 180/21 .7 square miles N ^�' r �� 4`A�}��$ rr�Vr. :..r�i z k�1 }+b iri4 c� �'.��+ik s� a i�. °��tt.e � � ,�'S C F� '�'r5 � 1 ,u1' „ x QEy rS N {�F3r`{r ,� '�' t'Y. �.4 t� i 4 t? �e s'�' `7'Vi.��- �� J - > i �.1 �i.e a+ �J�h, ?n+�?�4' l�L 4� �yii tk�v'Pt -k7" a _ Ys^ "S.Ji-i..n�,'b,.� T `�+r."�Y�'�rti'-ed 'l--g' wb W�� Yn'��A tC � qf^,St�'U..: �'�'S`F >�`w'e# �f�4 �afiK:�' d a+. J� �-'-sSAc 4 eA -u a,.yt�+'�yp �? r.w.3�- �}� �f µRi�,na(�,vr'C��ca�}hti S�a*��yr�.��. °�'�.a'f2F. 3 f �v..� x �5 jFU �.v�s/Y �ry ' �r�`4f •�sr 4 �k�t�R �A72�`li �'?��'Yr��>3 ��{�� ..�x�l�?� � �1\l��V a,T' h �V��,5'�� 4r ��a � . n� �.Ai... r-uro-v,w ..ae�"�� 3 w.m�.. �u.�. 5�i�.�et.,.�.......- �5 3 �.47[d1. I1LSh11ffiCIItS �III� FOOfl Pf0(�I1C15 Traasit Canshuction Traasportation Equipment Transportation Services Lumber&Wood Air Transporbtion Communications Frinting& Publishing Wholesale Trade Retail Trade St�ane, Glass&Cancxete Ias�uaace Gazners Banking Electranic Equip�nt Iasurance Agents&Brokeis Trucltis�g�c Warehausing Bvsiaess Services Electric, Gas & Sanitarios� Legal Services Seccaity 8c Commodity I.eisuie and Hospitality Seivices Real Estate Health Care AUBLTRN * 'MORE TI-iAN Y�U IMAGINED , * CITY C)F * ' �, * ; * - � WASHINGTON �Ot'\/ �f ��'s�� z - a • Populati�on/Area = 439.,,041/1'�4`5.4 square miles 0 4 Key Target Market Clusters — H.E.A.T.: - Healthcare - Educafion - Aerospace/A�iation - Tour�sm nt �eadlineS �ece Mesa, Benedictine University working:toward downtown Mesa Arizona:to Utilize�$72 Million�Dollars to campus Boost Community-_$3.2'million dollars:to construct the defense lab;'$1'0 million dollars�allocated towards building up the local universities; Remodeling Fitch City Council approves MOU�to bring Park in case that the Qakland Athletics utilize the: W�tminster:College branch campus to building downtown Mesa Mesa lands Albright Collegecampus; city's 3rd school deal this`year AjJ$[J�j, * tvtO1�E TWAN YOU IMAGINED , * CI'TY OF * *: � . WA5�H�NGT4N �0�� 0�� 'V�� '�� o Population/Area = 37.;'022/12.2 square miles � 5 Key Target Market Clusters: - Health care services and health care-relafed 'businesses (perhaps with a gr.owing emphasis on_sports rnedicine). - Professional and business services. - Medical devices,and'technologies. - Advanced materials. - Green technologies and processes � Within. these target business categories, priorities include: - Pursuing research, testing and design opportunities in the medical device sector to support existing medical device manufacturing in the Pwget Sound area - Explorimg opportunities to establish Puyallup as an incubator comrnunity for advanced materials, medical device manufactwrers :and other keysectors AUB ''C]��tN � n�c�� rx�r �rau «.��N�o � CITY iDF * �� , * -- WASHINGTO�N �i�� O� F' �m �O'�� 0 �!S� �O • !Population/Area = 128`,.026/53.38 sq',uare miles • 5 Key Target Market Clusters: - Innovati'on Economy - Bioscience - Software - Uniguely Ft. Collins - 1lHater .lnnovation AU�t1R�N' * r�o�E �xn�r vou tn��a�� * CI'i'Y OF * * � * 'NVASHiNGTC�N �I�� O� �O,r�I�:�� O � • Population/Area = 583,776/145.4 square miles • 4 Key Target Market Clusters: - Clean Tech and Sustainable Industries - Activewear - Software - Advanced Manufacturing AUSCT�T'* 'h40RE THAN YOU IMAGINED 1 � CI'CY'�F * ,:�.�� O , O , • � . Cot,/ o� $� � L�uoS Ob�l'spo, ` -� WA,S�H�NGT�1'd '�� P o Populafion/Area = 45, 119/12:9 square � � iles • 4 'Key Tar.get M'arket Clusters: - Computer Software/Media. - Light Manufacturing/Light Industrial - Business/Customer Service Centers �,JB�� * 'N'IORE THAN Y'�U IMAGINED , * CITY DF * �'� �� * � ' � ,* WASHINGTON ��'� O� �I��'SQ Il � �o O � • Population/Area = 105,594/22.2' square miles • 3 Key Target Market Clusters: - �Manafacfiuring; - Clean: Technology - Professional Services 1�L'I�B 'UR� * MOAE TfriAN YOU [MAGINED ��..._* CITY OF * * � . � � � � - WASHII�TGTON �,Ii� O� �'�'��I'�'� �� v Population/Area = 608,,027/142.5 square rniles e Tar.geted' Industries: - Seattle's Basic Industries: Manufacturing, Logisties;, Maritime, and Shipbuilding e companies with�$1�MM - 50MM in revenues, 10 -1'00 employees and potential for growth - Emerging Industries: Clean Technology[Energy amd Life Sciences/Global Health • :Early-stage and:established companies poised for growth in clean technology/energy and';life sciences[glabal health sectors • Targeted Geography: • Central�Business�District: Retail, Professional Services, and Information Technology. Seattle's.central business district is a major economic engine for the region and has a broad mix of employers and business sectors amd is home to the region�s most successful retailers, financial institutions.and information technology companies - Medium.to large.regional�, national,, and global:retail, professional serviee`(i:e. financial services, legal, etc.) - Imformation technology companies (i.e: web sen[iees, digital:gaming,:mo6ile device applications, etc.) �$[J`�j;� M,ORE THAN'YOCJ IMAGINED �* CITY DF _� * * WASHINGTON '��'� �,f �0'� ��I�'n � �Z � Population/Area = 208,000/76 square miles 0 6 Key Target Market Clusters: = Bio-Medical - Life Sciences - Science - Technology - Engineering - Mathematics AUBURN * ��RE THAN Y�U IMAGIN�D , * CITY OF. * � # WASHINGTON ��'� '�;f S� O�� O�� • Population/Area = 1:54;637/46'.4 sq�,u'are miles v 4 Key Target Market Sub Sectors: - Food Processing — small niche foo.d processors - Bioscience — medieal device manufacturing - Metal — me#al manufacturing markets that are cornpatible with existing businesses in Salem - Renewable Energy — solar and wind manufacturing AUBCTR'N * �ORE THAN YO[J IMAGINED , * CITY OF -...�'' * � .-- * - WA5HINGTaN �� I'� �III� ��'� • Populafiion/Area = 403,892/144.8 square miles • 8 Key Target Market Clusters: - Electri'c Vehicles - Photonics - IT and Communications Equipment - Advanced Medical Care - Biotechnology - Computer and Video Game Industry - Corporate Headquarters - Nonwoven Te�iles AUBCTRN * MORE THAN XOU IMAGINED , * CITY UF -�..�" * � - k WASHII+IG7'C)N Co ; of �io��sbo�o, O�R • Population/Area = 91 ;611/23: 1�5 square miles • 3 Key Target Market Clusters: - Renewable technologies (e:g. solar manufacturing, fuel cells) - Semiconductor/microelectronics - Biosciences AITBURN * MORE THAN YOU IMAGINED W 1 .� cirY oF �:�� * � * WASHINGTON � i � �, ; � i ; � � � � AUBURN'.* ��1�E TriAN YOU IMAGINED , � �--� * CITY UF � * , * - �VASHINGTON 1 ��I`�l �0�'� �------------__ /�� - '�"�+� �`r �"-�\ / i''�� ` �\�\ %/� " `� _ � t x� \. � a+ S-i ex F:L�S� '.. �� . l y F {� - i 1 , ��'�i�'^�+ ' '" ; �V � e' '?� '�+�T - t � � - �\ �. • • ' O -n 5�{a t � .� £�.�� `f. . � .�\ � �� }�� .. s tr� S� ��/ �� A M Yr � � � �� '�`� � � ,� \ ;�� '�1 �� / . y:. _F4: �SF..,.':.; a � / ''� �:... �..�. �. �` � �..� �. x � ,� . � � r��"�' . � �{' � �� . % ,� , � � � x ,. '�* '�".�';S"� / \ � f' �'�.x''%� � s� ��\ � � �_.__,— . _/� Auburn�'s Key Business Sector.s AUB[,TRI\j * MORE THAN YOU�iMAGINED , �k CTCY OF -.*,��> ''� * Y , , �+VAS�HINGTUN � ; ; � AUB[T�RN * MORE THAN YOU [MAGINED 1 .� CI�� 'k � ��`�� I��;��.. I.!� * --� WASHI'NGTQN ��I��1 �r��S IVorth� Auburn Strategy A�rea (focus - Auburn� Wa�y North Carridor) Urban Cen#er Strategy Area AEP G�reen Zone Strateg�y Area Golden Triang'le Area (focus — Auburn Way South Corridor) 15th Street SW & C :Sfreet Stra�tegy Are:a A Street SE Corridor Stra�fegy Area 312th St�reet/124t" Avenue SE Potential Strategy Area (new area under consid'eration by PCDC) IVI Street Corr.idor (AWIV to AWS) AUBU�RN * MOItE TH�'1N `lf7U 1MAGIN�D * CITY OF -�- * Eco�n�� oc Deve=l��o�prn�e�# * -�, r�� w�s�HINGTC}l�i �'�I��t�� °�'��S Key �a�siu�ess Sec�ors �coo�oa��c �eve�og��eu�� S$�ateg�y A�e�s AUBU�LI�j 'k MORE THAN YOU dMAGiNEQ .�-- * CtTY OF * ° "` .. � * � � ` t+VA5HINGTC}N ■ ' , , , ; , �jJ$�,j� * WIORE THAN YOU IMAGINED , * CITY UF �*.��,�.~- * _ , �� J�� Q��S��e�;t �c # - ` WASHiN:GT�N �et��r� on Or�ves�u�eo�� SOUTH LAKE UIVION, SEA1�L�, WA: • Home to Amazon.com global headquarters and significant concentration of biotechnology fir:ms; global health organizations and life science institutions • City jobs/household tacgets (2004-2024) =1�6,000 jobs:and 8,000 units • Constr.ueted .office space = 709,000 s:f. plus,potential for 3 million s.f. frorn Amazon and several' hundceds of thousand square feet more from developers • Constructed residential' space = 2,000,000 s:f; / 1 ;850 units • Retail/hospitality space = 212,000 • 2011 estimated employment = 13;000� � New development (2004-2010) = 6.35 million square feet with assessed valuation of $1 .1 billion • Total Tax Revenue to City of Seattle {2004-2010) _ $35 million — exceeds full build out (2025) scenario by 19% • Estirnafed additional (unexpected at this stage of developrnent) tax revenue from new development - $5 million annually AUBLTRI�'* MOIt� THAN YOU�IMAGINED * CITY OF � * - ,Exa��ple - Sca�e o� I,n.uest�e�� & # - WASHINGTON Re#a�r� o� �B�1Ve'�tQ'1��1'�� PEARL DISTRICT, PORTLAND, OR: � • $1'SO� million of,public sector investment (1'998 to ;present) • 40 acres. • "1�0,000 residents (at build out), • 21',000 jobs �(af 6uild out) • $700 million of private sector investment � 7,24�8 housing units, 4.6 milliom square feet of commercial space — worth $2.3 billion • Portland°s 20-year housing goal met in7 years on 1/1Oth the projected land and 25% of aU units are affordable • Another 5,000 housing, units planned on streetcar extension south of downtown • 'Properties closest to the streetcar devefoped at 90% of permitted density, compared to 43% 3 or 4 blocksaway ��(]$[J�� * M�FtE'THAN YOU IMAGINED * CI'FY OF ��~,� _ ; Ex�:��pl;e - Sc��e o,f � �vest�e�� & # -� WASI=IINGTC?N i Retvr� o� I �westrv�er�� DOVVNT011VN BELLEVI�E, '1MA: • 4,000 residents ' • 28,000 jobs • Several hundreds of rnillions°in public and ;private sector investrnent ' • 1979 .Central Business District Subarea Plan — Downtown to `'the financial and business hub ofthe community and the place to concentrate regional retail, major office, residential; hotel and institutional;wses. • 1980's - New high rise office towers in.Downtown that shaped skyline and doubled downtown employment • 1990's—=Signature facilities and spaces built including�20-acre'Downtown Park, Compass Plaza, King Coumty�Regional Library, Meydenbauer Convention Center & Theatec, Bellevue Arts Museum • Downtown Park— land purchased in 1983 for$14.3 million • 1'983 — Downtown Bellevue was.primary office uses thatwas deserted after 5:00 p.m. • Former,;Bellevwe'Mayor Cary Bozeman — °The Par:k would not realize its full potential to serve the public for another 15 20 years. But if you waited.until;then, when you had those densities; ;ifwould be too expensive to acquire theJand." • Late 1990's/2000's<— Multiple-downtown housing ptojects, new City Hall �U��J�tN * n�o�� nrJ You �rn:�,c»�o � * CI'FY OF � * I � i . Exa�r�;pl�e - ScaOe o:f Dr�vest�e�� & # WASH II�TGTC?N Re,t�vrn o� 9 �vest{�e�t 'BELLINGHAM'WATERF�ROf��' D6S� RICT, B'ELLINGHAM, WA: • City C`enter waterfront redeyelopmenf — 30 to 50 year master plan for 220 acres to create new mixed use neighborhood (residential, commercial, light industrial, institutional, jpark,.�trails and shorelines) • $150 million potential:City investment — roads, bridges, utilities, parks, trails • Port of Bellingham --pledged ,to pay for er�vironmental� cleanup, build marine infrastructure and dedicate land for parks; pu6lie space and rights-of-way � WA State Departrnent of Ecology— pledged granY support for cleanup costs • 6 million :square feef of new mixed use devefoprnent • 2,600 housing units • 2',500 to� 4,80,0 permanent jobs _ ��CJ�t * n�o� ��r Y+au ir��i�Eo 1 � Cl'CY OF .�� :* �' Exa,�;pl�e - Sce��e o� Dr�ves��e�� & * WA5HINGTC)N �eta�r� o� � u�vest�er�# COLUMBIA WEST RENNAISSA►NCE DiSTRICT , VANCOUVER, WA: • Developmenf of Vancouver waterfront to reconnect 35 acres along the Columbia. River to the city's historic core • Facilitate $1 :3 billion in private r.einvestment � • Leverage public funding� afi a 30:1 ratio ($30 private to each $1 for public infrastructure) � Meet Vaneouver's eiuic master plan calf for 1: million�square feet of new professional office, retail and hospitality space • Create 1;2,000 construction jobs and 2,500 permanent jobs • Genecate new state and local tax revenue. • Mid-rise condos = 3,014 units • Upscale Hotel = 200 rooms/10,000 SF of'meeting and other space • Office Mid-rise = 450,000 SF • 'Retail Convenience and Service Retail = 1`25;000 SF � Light Industrial = 100;000 SF ALJBUR.N * 'MORE T�-iAN Y�7U:IMAGINED * , * C[TY OE �_��- * � � Exa�rra,ple - ScaDe o� l;n�uest�e�t & WASHINGTON R��tvr� o� D�vest�er�t !DOWNTOWN DEVELOPMENT RETURfV�: ON INUESI'MENT STUDY; VAN.COUVER, WA: Table 2.1 - Development Summarv A �tim e uare�Fee Residential Qevelooment Offiee Retail Reside�ial Other Total Parkin Units City Center 12 Cinema 1,500 1,500 52;967 55,967 - - Heritage Place - 13,000 150.000 - 163,000 55.000 137 West Coast Bank 75,000 - 35;000 - 110,000 78,345 21 Kirkland Union Manor - - 45,323 - 45,323 - 61 Anthem Park.�l) 14',127 2,499 h4;206 - 76,832 45,219 62 VancouverCenter-Ph 1 99;285 14,854 205,631 - 314,770 275,000 228 EstMerShorfCommons- - 24,908 136,308 - Y61,2-16 - 160 Hilton Convention Center Hotel 19,533 11,588 - 144;531 175,552 59,570 - Lewis afx! Clatk Plaza - - 38;870 - 38,870 - 45 Columbian.Development (2) 101,406 5,724 - - 107;130 - - VancouverCenter-Ph:2 (2) 99 549 14 615 33 240 - 147 404 - 20 Total 418.400 88,688 7d4.378 197.498 1�.401.1b4 3.134 735 (I)Office sqv�e feet estimated based on�live/work unih r2/Developmenh rrot completed os of November 2006 So�rce:Cily of Vancower Source:Anarysrs offhe Retum.on:lnvesfinent-in City olVancouverpowntown Development:Fina( ReporF,�Noyember'16,2006,;Gity of Vancower and;ldentity Clark Counly AUBURN *:MORE Tf�AN YOCT llviAG1NED 1 � CITY OF * �: * �xarr�p8'e - ScaDe of D�ves�t�eu�� & ` - - VVASHII�iGTON Ret�v�n ou� Ir�ves�r�e�� DOWNTOWN D.EVELOPMENT RETURN ON INVESTMENT STUDY, 'VANC.OUVER, Wi4: • Totaf Gity investment (1'997-2006) _ $26.9 million • Total Private Investment (1i997-200.6) =.$250 to .$300 million • Total City tax revenue (1997-2025) _ $26.7 million • Total Net�BenefiYto City (through 2025) _ $27 million • Estimated Rate of Return forCity's investment.in downtown ecomomic:development = 4.3% (*In 2006; this was roughly equivalent to City's return on its invested funds) • Total on-going employment attributed'to new dev.elopment = 1:,474 jobs • Total employment attributed to new development construction = 489 jobs • Total annual economic activity directly attributed to new development = $135.million • Total tax.revenue generated through 2025for Glark County, the Port ofl/ancouver, The Fort Vancouver Regional Library, C-TRAN and the Vancouver School District = $23:9 million • New development directly supported 10 of the Comprehensive Plan's Economic Developmemt and Housing policies. • Development generated between 45% and 75% of targets for jobs, commercial development and housing.included in the EstherShort Subacea and Redevelopment Flan Source:Analysis of:tfie�Retum on�lnvesfinent in City.of Vancouver'Downtown �'��`�' *�MOI�E THAN Y�U ItviAG1NED Development-Final'Repoit; November16, 2006,;Ciry of Vancouver,and ldentity'Clark. Gbunty , * CYFY(]F � . * `� Exa�cr�pl'e - Sca��e o� Dnvest�e�� & * - INASI-IINGTON , Retvr� o� 6�vest�e�t KENT STATION, KENT, VUA: • $4 million City contribution foe construction of 860 stall S.ound Transit str:uctured parking� garage • $14 million paid ;by City for purchase of $19:9 acres— forrner site of Borden �Qhe � �'icaf� Plant � $6.3 million in infrastructure impeovements conducted by the City • $5:2 million, in en�ironmental review, project management, professional services amd debt service on .property purchase loans � $4 rnillion iin� investrnents#o surrounding properties • $1'�00 million mixed use project • 470;000 square feet (at bWild-out) • 3 phases �built out — rernaining phase is 1'50 unit�mixed use residential/retail �(market dependent) • 40 businesses — 29 retail. • 900 jobs . AUBU� '� lrtOltE TEiAN YaU iMAGINEG 1 � CITY OF �:*,�� * , ,� � 4 * - WASHINGTON �.�'� � �� VVhat a �°e t�e Co�� ci � '� tQ� o�g,h:ts a �d 's�deas o� a� o�gning key b �si � ess sec�o �s ac�� capo�a � inves��nes��s ��oorotoz��io� ; OR sca�9e of o �vestr�e �� ret� ru� o � inves��ent; O:R? A�I'�CT�'.t� ��n�a�� Tr��v �rau �M��a�o * ,,,.�,,�-�..._�k CITY ClF .* # �- �� WAS�H�IN�,T�)�N , ; i � � � ; ��[]�.'�k 1v1,t�RE THAN YOU i1vtAGiNED � CIT'Y OF � * J `�• " .fY� .iu� .. * WAS�HL`NGTON ✓ R�v �:ew o� C o a� �:c�� I o r� E°�°�o �s ✓ Dis � ��-ss � o � o�' �Iex� St� ps ✓ Co � � c � � �Co � r� ea��s AU�BCTRN'* MOItE 'T�AN YO[J IIvtAG1NED City of Auburn-WSU-PSE Energy Management Meeting Discussion Notes 5110/12 Meeting attendees: Dc Chen-Ching Liu, WSU Boeing Distinguished Professor, Electrical Engineering & Computer Science Dept. Director, WSU Energy Systems Innovation (ESI) Center Jody Opheim, WSU ESI Center Manager Don Shearer, WSU Assistant Director, College Relations Will Einstein. PSE, Director of Community Relations & Business Services for King County Gary Nomensen,Puget Sound Energy Local Government& Community Relations Manager Pete Lewis, Auburn Mayor Rich Wagner, Aubum City Councilman Aubc-r "rnov�ticr. ?�-'ne-=f-'c =�T� ��,�) Doug Lien, Auburn Economic Development Manager 1 � ' �r �" ^ � � ."""- ,-�tr "z,�,r�.::- �,y� 1 ��,�.a `d_ �'!S9F..'. �. 1 -.. RR ' ��!.�•�f� �R. Meeting Objective: I �� ~� �= ti � p�, �`�`'+� Explore electrical energy management improvement projects. �� Y �,''��r j a'' �, aHSF��^� �^ _ The discussions indicated that projects might take three forms: '� ' �� ^ �� . RR .� GEO EX �.� � . : � e i �^'y„q: r�n. (1) ESI research in Aubum ,+w = ; �y „ Fo t ;�� ',. (2) Current Auburn PSE customers' improvements "�3..� � ?� °o��= �``-"` (3) City economic development infrastructure (30 year view) �f 5�' � ��, -�- , ., `,�";�`�' ': �'/ �� : i� '- ,i � �<.r5 S .,. " r— .e ��1 Business Focus: i li� ��'L^ �� =_�TM �' x;: f�;=:' I.x y The City's recently state-designated Innovation Partnership Zone " �' �,�� ra-�;�- � � - � is intended to attract businesses that will have a critical need �I ',� ,r,, r � F""w s '"� ° , (and a likelihood of willingness to pay for) a very reliabie '•�"'�`�r y � �`" � t Y I>,'. electrical power supply. A number of current customers such I''` ��.ca ��- � ^ ' ' � as FedEx, Boeing and Century Link aiso have this need. • � ' ` � .� � , � �' PSE's current initiative in Outage Management is aligned with 4 MILES Y� �� .: J scx o� '" �i - � � ,�� ti. this customer need. The ESI has expertise and on-going ';� ; w4 ��srR��.�; ��iY HALL �;:I re s e a r c h i n p o w e r supp ly reliability. � �4r _q, ��iq ��;� °`' ' „ � wOt`LD i`�e�� ., �y AUBURNAREA � CNG � m ��(�� CHIIMBER OF Funding Mechanisms: �p$�_- �- �� '`�`y� COMMERCE ^�6' �� N��F The Auburn IPZ, one of 15 in the state, will have access to state y='y�� y GftFEN RIVER ,,�r M �� COM1fM11UNITY grants, currently budgeted at$16 million, that could partially fund Ny�i� Y,�'� r �o��E�E projects. Also the City will be funding infrestructure improvements " "� `�� j Pl1RAM[TRI% " j � �� in the IPZ that could include energy management aspects. ,�� 4� �,. ,r„ ��ti ( ni' T�I � s�,� � ,... �� y Y� 1.'�a. BOEING �-Tu. .. � InformationNeeded: �, ,� � ;,^� � ;;. Doug & Rich will make available an inventory of current ' . '� •;` ` � -. OL�f( L�pri•, businesses in the IPZ as well as projected businesses over 30 �` 8 '' ��-�a�.- years in color-coded map and list form. Chen-Ching would like to � _ . �.., , know the current electrical loads but that is proprietary so we will , .� � ,r . ` need to cooperatively make estimates of those loads. H� . �ry �" � �it,, k ,.�+:i �. ,s, � u- �, - :` ..�'r�a� �r _�. Next Steps: �-, Ma�--� Will intends to take the results of these discussions back to PSE technical and businesses people to begin planning a follow-up meeting, including a subset of today's group, to further explore cooperative projects. When asked if today's discussions seemed to be falling within the resource availability of the ESI, Jody commented they were. ipzwsupse.ppt(.ptl� 5/12112 10:50 am Rich Wagner page 1 af 1 crr�roF �.�`* * Memorandum � WASHINGTON To: Mayor Pete Lewis Deputy Mayor Nancy Backus,Aubum City Council Councilmember Rich Wagner,Autium City Council Councilmember Bill Peloza,Aubum City Council Councilmember John P-artridge, Aubum Ciry Council Councilmember Largo Wales,Aubum City Council Councilmember John Holman,Aubum City Council Councilmember Wayne Osbome, Aubum City Council Fromr Keain Snyder,HICP, Planning & Development Director Date: May 10, 2012 Re: City Gouncil Retreat—Briefing Book OVerview BRIEFING BOOK:. Staff has prepared this briefing book to assist the City Gouncil in preparing for its economic development focused retreat on May 17-18, 2q12, The primary purp.ose of the Briefing Book is to give Council members information, thoughts and ideas ahead of the retreat thaf will prov'ide a starting foundation for the discussions — planned and spontaneous — at. the retreat. The briefing book is organized to be consistent with the retreat agenda. In addition, sfaff has compiled several reference maps that can be found at the end of the briefng book — refer to the tab tifled "Reference Maps". Please note that for some of the Sessions staff has provided several background items, while for others, there is less information. This is particularly tfie case for Sessions 4 and 5. This was purposeful. For Sessions 4 and 5, staff anticipafes Ehat Gouncil will haVe significant ideas, thoughts and information that are specifc to Auburn and as such, the background information proVided for the Sessions is intended to help the CounciPs discussio.ns. Peseli Staff will introduce additional information during the retreat. as part of a Session-oriented. presentation that will supplement and expand on the information contained in the Briefng Booli. REMINDERS: Please remember to complete and bring the SURVEY QUESTIONNAIRE handed out at the April 30, 2012 Committee of the Whole meeting. A copy of the Questionnaire is included in the 3ession 4 tab of the Briefng Book. Please note that there is a HOMEWORK ASSIGNMENT in the Session 3 tab of the - _ _ Briefng Book. The HOMEWORK AS$IGNMENT is for in,dividual City Council members to write down Auburrr+Specific examples of the Four Pillars of Economic Development = Built Capital, Human Capital, Natural Capital and Social Capital. We will share and discuss the re.sults of this HOMEWORK ASSIGNMENT during the Session 3 porfion of the Council's retreat. Please remember to bring the briefing document on the Innovation Partriership Zone presented at the April 30, 2012 Committee of the Whole meeting. PleaSe let staff know in advance of the retreat if you require a copy of this briefing document. Staff looks forvvard to a productive, broad-based and enthusiastic retreat with the City Council. Please feel free to contact me if you have any questions or need additional information in advance of the retreat.. Page�2 « cm oe. ..'�' � yyq_.� Auburn City Council Retreat Agenda May 17=18; 2012 _ -- - - _ _ - a • � i i • . � - Session 1: Retreat Introduction Estimated Time: 30 minutes (10:00 a.m. to 10:30 a.m.) A. Review of Retreat Theme, Mantra and Desired Outcomes B. Review of Retreat "Rules of ConducY' C. Discussion of Retreat Process & Agenda D. Ques4ions and Answers Session 2: Primer on Key Efforts to Date for Economic Development Estimated Time: 90 minutes (10:30 a.m. #0 12;00 p:m.) A. Economic Development - What it.Means and Why Do It B. City's Current Economic Development Goals and Policies C. Overview of Key Past and Current City Policies, Programs and Initiatives to Support Economic Development (e.g. Economic Development Strategy Areas, IPZ, Code Updates, Fe.e Deferrals, etc.) D. City Relationships with External Economic Development Agencies and Organizations Break: 15 minutes (12:00 p.m. to 12r=15 p.m.) Session 3: Setting the Visioning Stage Estimated Time: 150 minutes (12c"15 p.m. to 2s45 p.m. inctusive of Working Lunch) A. Four Pillars of Economic Development &Application to Aubum: I. Built Capital II, Human Capital III: Natural Capital IV. Social Capital B. Discussion of Auburn's Strengths and Assets C. Other Communities' Examples of Economic Development Prioritization & Focus Session .4: Visioning Exercise #1 - Cify of Auburn Key Business Sectors Estimafed Time: 165 minutes (2:45 p.m: to 5:30 p.m.) Council to brainstorm and identify the City's Key Business Sestors that will form the � City's long-term economic development priorifies and direct business recruitment and retention, community marketing, policy development and implementation and capital investmenf. This exercise will be informed by a staff prepaied survey sent out to the Council in advance of the retreat and results from a survey of Aubum businesses. � • : 1 � . 11 ' _ Session 5: Visioning Exercise #2 - Cify of Auburn Key Business Sector"s and Economic Development Strategy Areas Estimated Time: 120 minutes (8r30 a.m. to 10:30 a.m.) Council to discuss issues and opportunities for aligning identified City Key Business Sectors with Economic Development Strategy Areas. Break: 15 minutes (10r30 a.m. to 10:45 a.m.) Session 6: Visioning Exercise #3 = City of Auburn. Key Busines.s Sectors ' a.n.d Capital Investments Prioritization Estimated Time: 165 minutes (10;4¢a.m. to 1:30 p.m. inclusive of Working Lunch) Councii to discuss issues, opportunities and processes for aligning identified Key BusineSs Sectors with the City's capital inVesfinents in Built Capital, Human Capital, Natural Capital and Social Capital. Ses.sion 7: Retreat Wrap-Up Estimated Tme:30 minutes (1:30 p.m. to 2:00 p.m.) A. Review of Councif Work Efforts B. Discussion of Next Steps C. Counc'il Comments RETREAT THEIVIE "To accomplish great things, we must not only act, but also dream,• not only plan, but also believe." Anatole France, Nobel Prize Winner in Literature RETREAT MANTRA "Ngthing great was eyer achieved without enthusias_ m." Ra/ph Wa/do Emerson �� ENTHU�I�4ST1C IN: DISCIJSSIIVG THINI�(IIVG CHAiViPIOIVING \/1SIONING RETREAT GOAL.S e Mu.lti-generational eeonomic development vision s Increase understanding of the City's economic strengths and assets • Idenfify priorities and focuses for City's economic developm.ent efforts. • Broaden the Council's perspective on what."feeds" and can be "fed" by economic development (i.e. 4 Pillars of Economic Development) o Refine ideas for Economic Development Strategy Areas e .Al.ign Cify's eeonomic development and capital investment priorities RETREAT - RULES OF COIVDUCT • Be Enthusiastic • Have Fun • Act Like Kids (i.e. Don't be Hampered by Adult Concerns) • Thin:k Long-Term (2050 anyone?) • Tliink Big and Broad • "No Fear'' — nothing is off the table and there IS no dumb question or point! • Do Not Dwell on $$$ - This is a visioning meeting not a budget meeting! • Challenge Yourself and Others (respectfully for the latter) o Ask Questions RETREAT - PROCE- SS & AGENDA . • Process = intentionally informal s Opportunity for Council to engage with each other and with staff on "big picture" discussions • Agenda has total of 6 sessions - Format of agenda is really broken down into 3 parts: 1. Background I.nformation - Aubu.rn & Others I 2. Economic Development Ideas, Principles & Examples I 3. Council Discussion Items • Similar to previous Council r.etre.ats, will "Parking LoY' items that either I the Council wants to discus.s at another point in retreat or after the retreat � COUNCIL RETREAT 2012 session 2 SPECIAL NOTE PLEASE BRING YOU BINDER � FROM THE APRIL 30 COMMITTEE OF THE WHOLE MEETING . IN KEEPING WITH SAVING COSTS AND PAPER THE IPZ SECTION WILL BE USED AS PART OF SESSION 2 BACKU P. • WHY SHOULD THE CITY DO ECONOMIC DEVELOPMENT? Below is a quote from Mayor Pete Lewis that was part of his 2012 State of the City address to the Chamber of Commerce. His quote describes a "Circle" concept of the connections between Economic Development and the Quality of Life in our City " ... we need to have new businesses, we need to retain the businesses we have, we need those businesses to be more successful. We need those businesses to make more money." "We need those businesses to pay more property tax and sales tax so we can provide services to improve the quality of life so that more business will come to the City of Aubum " "It's a big circle that works to make sure that our community can be the best that it can be." � � .� � � i � Economic Development ♦ � 8� Business Success � Comes from Smooth Traffic Flow, ` � Plentiful Parking, A Nice-looking City, Amenities like "The Ave" Theater. ` � � More Shopper Choices, ' Lots of Gathering Places, � ` Reliable Infrastructure � Quality of Life for Residents Public Investments � Reduced Property Taxes, Jobs, Streets, Parking Garages. ' � Great Parks, Superior Public Safety, "The Ave" Theater, Parks More Shopping, The Senior Center The Community Center, I ` Cultural Events, Traffic Flow, Infrastructure like Social Services, Transit, Water Supply, Sewer, � � Community Gatherings, Storm Drainage and Community Pride Telecommunications � ` � City Income � � � from Businesses � ` Increased Property Tax & Sales Tax, `More Jobs Create Spendable Income, � `creased Utility Taxes & Fees � ` � _ — I . . Councilmember Rich Wagner AUBUl �1 \ created this graphic to illustrate � the Mayor's"Circle"concept ��,4 1 td�N 11>�� ,�i,�NN� so[c2012circlept.ppt 5/2/72 8�.35 pm EARTH • ECONOMICS AI location: The process of apportioning resources to the production of different goods and services.The market is one of a variety of possible mechanisms of allocation. Carrying Capacity: The number of people that can be supported by a given ecosystem, given their consumption of natural resources and use of technology. Competitive Market: A market in which there enough small buyers and sellers of an identical product that no single buyer or seller is sufficiently large to affect the market price. Complementarity: When goods orfactors of production have to be used together rather than instead of each other. For example, fish and fishing boats are complements. • Comprehensive Efficiency: The ratio of services gained from human-made capital stock to the services sacrificed from the natural capital stock. Demand: The relationship between price of a good and the quantity of the good that consumers would purchase at that price. Development: The improvement in quality of goods and services, as indicated by their ability to increase human well-being, provided by a given throughput. Distribution: The appoKionment allocation of income, weaith or resources among different people. Ecological Footprint: The number of hectares of productive land or sea required to support one average person at the world average consumption level. Ecosystem Health: Ecosystem health is an academic discipline that has evolved partially because traditional • renewable resource management has resulted in the loss of critical ecological services. Part of 1t21 Tacoma Ave 5 T 253 539 4801 eartheconomics.org Tacoma,W A 98402 F 253 539 5054 OO 2011 by Earth Economics EARTH ECONOMICS the problem has been that decision makers have either used ecology, which tends to look at ecosystems as if they were pristine, or economics, that says let's forget about ecosystems and look at the benefits and costs to companies and individuals. With these extremes we've never looked at how to regulate human activity in ecosystems so that ecosystems remain healthy. Along with ecological economics, ecosystem health has evolved partially to fill this gap. Ecosystem health is defined as a systematic approach to the preventative, diagnostic and programmatic aspects of management of human interaction with ecosystems, and to understanding the relationships between ecosystem health and human health. Ecosystem Services (or Ecological Services): Ecosystem functions that are of value to humans. These include climate regulation, protection from the sun's harmful ultraviolet reys, purification of air and water, mitigation of floods and droughts, detoxification and decomposition of wastes, generation and renewal of soil and soil fertility, pollination of crops and natural vegetation, control of agricultural pests, gas regulation, water regulation, water supply, erosion control, purification of air and water, and renewal of soil and soil fertility, gas regulation, detoxification and decomposition of wastes, dispersal of seeds and nutrient movement, and maintenance of the biodiversity from which humanity derives key elements of its agriculturel, medicinal and industrial systems. Ecosystem Structure: The individuals and communities of plants and animals of which an ecosystem is composed, their age and spatial distribution, and the non-living natural resources present.The elements of ecosystem structure interact to create ecosystem functions. Efficient Allocation: In the traditional economic definition, efficient allocation occurs when no other allocation could make at least one person better off without making anyone else worse off. Entropy: Although matter and energy are constant in quantity (first law of thermodynamics), they change in quality. The measure of quality is entropy --essentially a physical measure of the degree of"used-up-ness" or capacity of matter or energy to be useful to human purposes. Environmental Economics: The branch of neoclassical economics that addresses environmental problems such as pollution, negative externalities, and valuation of nonmarket environmental services. In general, environmental economics focuses almost exclusively on efficient allocation and accepts the 1121 Tacoma Ave 5 T 253 539 4801 eartheconomics.org Tacoma,W A 98402 F 253 539 5054 OO 2011 by Earth Economics EARTH • ECONOMICS assumption of neoclassical economics that the economic system is the whole and not a subsystem of the global ecosystem. Externality: An unintended and uncompensated loss or gain in the welfare of one party resulting from an activity of another party. Fallacy of Composition: The argument that what is true for the part must necessarily be true for the whole, or vice versa. Fallacy of Misplaced Concreteness: To draw conclusions at a level of abstraction or concreteness different from the level of abstraction of the concepts in which the argument is made. Growth: A quantitative increase in size, or an increase in throughput. Human-made Capital: • Includes equipment, buildings, plants and inventories created by the factors of production and used to produce goods both now and in the future. Human Needs Assessment: A multidimensional concept of welfare that goes beyond income and wealth to include capabilities, capacities, and other existential categories. Index of Sustainable Economic Welfare (ISEW►: An alternative to the GNP, the ISEW is calculated by adjusting personal consumption for various factors that affect either sustainability and welfare either positively or negatively, such as depletion of natural capital, increasing inequality in income distribution, defensive expenditures, and so on. Matrix of Human Needs: A cross-classification of basic dimensions of existence with basic human values, yielding a richer and more detailed description of welfare than that traditionally used in economics. Monopoly: A single seller of a commodity. • 1121 Ta�uma Ave 5 T 2�3 539 4801 eartheconomics.org Tacoma. W A 98402 F 253 539 5054 OO 2011 by Earth Economics EARTH ECONOMICS Natural Capital: The infrestructure of life on Earth. Stocks or funds provided by nature that yield a valuable flow into the future of either natural resources or ecological services. Nonmarket Value: Value recognized by people but not usually expressed in prices because the valuable thing either is not currently, or cannot be, traded in markets. Opportunity Cost: The best alternative given up when a choice is made. Optimal Scale of the Macroeconomy: Occurs when the increasing marginal social and environmental cost of further expansion of the overall economy are equal to the declining marginal benefits of the extra production. Beyond the optimal scale, growth becomes uneconomic, even if the expansion ofthe economy is conventionally referred to as "economic growth." Risk: The known probability of occurrence of an event. Scale: The physical size of the economic subsystem relative to the ecosystem that contains and sustains it. Sink: That part of the environment that receives the waste flow of the throughput and may, if not overwhelmed, be able to regenerate the waste through biogeochemical cycles back to usable sources. Social Capital: Social capital is the underpinning and core fabric of social communities. Left intact, social capital has a stream of benefits, including safety and security, friendship and community, a sense of civic identity, etc. Source: That part of the environment that supplies usable raw materials that constitute the throughput by which the economy produces, and which ultimately returns as waste to environmental sinks. 1121 Tecorne Ave 5 T 253 539 4801 eartheconomics.org Tacoma,WA 98402 F 253 539 5054 �02011 by Earth Economics I EARTH • ECONOMICS Steady-State Economy:The economy viewed as a subsystem in dynamic equilibrium with the parent ecosystem/biosphere that sustains it. Quantitative growth is replaced with qualitative development or improvement as the basic goal. Substitutability: The capacity of one factor(or good)to be used in the place of another, the opposite of "complementarity." Supply: The relationship between the price of a commodity and the quantity that would be supplied at each price. Thermodynamics: The branch of physics that tells us that matter and energy can be neither created nor destroyed, and that the entropy in the total system always increases. Throughput: The flow of raw materials and energy from the global ecosystem's sources of low entropy (mines, wells, fisheries, croplands)through the economy, and back to the global ecosystem's • sinks for high entropy wastes (atmosphere, oceans, dumps). Transadion Cost: The cost of making a transaction, including legal fees, the cost of gathering information, locating the interested parties,the time costs of bargaining, and so on. Uncertainty: A situation in which we may know the range of possible outcomes but do not know the probability distribution of outcomes. Uncertainty is unmeasurable. Uneconomic Growth: Growth of the macroeconomy that costs us more than it is worth. A situation in which further expansion entails lost ecosystem services that are worth more than the extra production benefits of the expanded economy. Waste Absorption Capacity: The capacity of an ecosystem to absorb and reconstitute wastes into usable forms through biogeochemical cycles powered by the sun. This capacity is a renewable resource that can be overwhelmed and destroyed, or used within sustainable limits. • 1121 Tamma Ave 5 T 253 S39 480� earthemnomics.org Tacoma, W A 984G2 F 253 539 5054 OO 2011 by Earth Economics EARTH ECONOMICS Welfare: A psychic state of want satisfaction or enjoyment of life - an experience, not a thing. Creation of welfare is the basic purpose of economic activity. 1�21 Tacoma Ave 5 T 253 539 4801 eartheconomics.org Tacoma,W A 98402 F 253 539 5054 OO 2011 by Earth Economics � CHAPTER 8 ECONOMIC DEVELOPMENT Introduction Auburn's economic base drives and shapes the community and region. Aubum residents and the surrounding region benefit from the jobs and services Aubum's economic base offers. Through the payment of sales•, property and other taxes, the City of Aubum can fund and provide services and public facilities which Auburn residents demand and/or require. It is clearly in the City's best interest to maintain and expand our economic base in unison with implementing all of the goals of this Comprehensive Plan. This section of the plan will help to define the City's goals and policics in this vital area. • Issues & Background Hisloric Trends Historicafly, a variety of factors have shaped Auburn's economy. At the turn of the 20`h century, the City offered services to support agriculture and the railroads. Downtown offered a full range of services and retail opportunities. In later years, automotive sales became a signi£cant factor. As urbanization of the region expanded [o indude Aubum, the vita]ity of Downtown Auburn was impacted by new shopping malls located outside the community and by changing retail trends. At tbe same time, Auburn's importance as the home of large industrial and warehousing operations increased. This same period saw the growth of retai] along commercial "strips" such as Aubum Way and 15th Street NW. Large retailers such as Fred Meyer and many major supermarket chains located in the convnunity. The development of the SuperMall in the 1990's led to Aubum becoming a major player in the regional retail market. Auburn shoppers no longer needed to leave the City to visit retail malls for many ol�lheir purchases. • During that same decade, Emerald Downs and the Muckleshoot Casino Page 8-I Amended 201 I Chapter 8 also contributed to commercial recreation facilities in Aubum and associated employment growth. Today, Auburn provides over 38,000 jobs lor residents throughout fhe region. Aubum has a strong industrial sector that includes Boeing, the General Service Administration (GSA) and numerous warehouse and distribution facilities. Aubum Regional Medical Center and the growing medical office community also provide a significant number of jobs. The retail and service sectors are expanding as s-mall businesses aze created. . Educational uses such as the Auburn School District and Green River Community College also add to the area's employment base. While development has continued throughout the City, Downtown Auburn remains the heart and soul of the communiry. With its historical character and pedestrian oriented development pattem, Downtown Auburn reflects ma�y of lhe qualities being sought by other communities. Given its urban center designation, Aubum Station, and the incentives the City has in place, Downtown Auburn remains poised for continued revitalization. EMPLOYMENT GROWTH EMPLOYMENT Auburn provides over 38,000 jobs for residents throughout the region. Auburn has a diverse industrial sector that includes Boeing, the General Services Administration (GSA) and numerous warehouse and distrihution facilities. Aubum Regional Medical Center and the growing medical office community also provide a significant number of jobs. The retail and service sectors continue to expand as companics locate in Auburn and as small businesses are created. Educational uses such as the Auburn School District add to the employinent base. Between 1995 to 2000, the number of jobs located in Aubum increased 34% compared to an overall increase of 22% Yhroughout the rest of King County. Manufacturin� jobs remain the largest category in Aubum, despite the loss of nearly 2,000 manufacturing jobs since 1990. The remaining job categories all experienced job b owth. Retail jobs increased substantially along with jobs in warehousing, transportation, and communication industries. Figure 8.1 compares the type ofjobs located in Auburn since 1995. Pagc 8-2 Amcnded 20ll Economic Decrlopment • Figure 8.1 Jobs Loc�ted in Auburn 1995-2010 a�,00o �p.ODU 361IU0 30.00U 25.0(10 20AU0 ■1995JoUs 15.IIOlI ■2000Jobs 11f,i100 5000 ■?OlO Jobs U , �_�_ �..� ._� J � � . .� � c�� ^1�'l ��; ¢�,�. .'�� ,Q� `,�o ``Jo '� �,: 1� �,,,c t�o �o° ,c> - � 5� a ��: oc. ;�. G tioiunc� Puact tiound Rcgionul Council:coccrcd cmplmincnl d:�ta. • It is expected that Auburn's employment base will continue to grow into the future. To the year ?03l, the King Counry Countvwide Planning Policies have assigned Auburds job base to increase by 19.350 jobs [t should be noted that this number is not a maximum, but the CiTy's mos-t recent assigned share of future projected growth in the County. Retail Sales Aubum's business community is keeping pace with both Aubum's population erowth and its increase in more affluent households Between 1995 and ?003, retail sales in Auburn increased 59°�0 or roughly 84�o per year. As shown in Figure 8.2, Aubum is the sixth largest retail center in Pierce and King Counties outside of Tacoma, Seattle and Bellevue. • P,�gc x_. A�nended 2ull Chapter 8 Figure 8.2 City Retail Sales (Outside of Seattle/Tacoroa/Bellevue) Yr1995 Rank'95 Yr2003 Rank'03 Kem 1,507,693,474 2 2,005,34Q826 I Tiilcwils 1,572,309.RR� I 1,79N,012,039 2 Rcnton 1,117,fiO3,iy4 4 1J63.639,63? 3 Redmond 1,34>,470A14 3 1,640,192,690 4 Puyallup 788,047,838 8 1,474,074,155 5 .4ubum 910,528,R94 6 1,450,24Q653 6 Kirkland L03217R,016 5 1356.322,041 7 Woodinvillc 276:51,793 12 1,356,322,041 R Fcderal Way R85,905,414 7 I,I79,K41,030 9 Issaquah 473,022,152 10 I,OOR.655,951 10 Source: State of Washington Department of Revenue Beginning in 1997, retail sales in Aubuin began increasing at a rate faster than the rest of King County. In the Year 2000, retail sales in King County fell whereas sales in Auburn remained steady. At thc end of 2002, retail sales continue to remain steady and higher than the rest of King County. Figure 8.3 illustrates this comparison between Auburn, King County and Washington State. Figure 8.3 Comparison of Retail Sales 60% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - • - - 50% . . . . . . . . . . . . . . . • • • • • - - . . . . . • • • - • • • • - 40°/ - - - - - - �_ '–_—___-_-- - - - ' - - - - - " " " - " • " - ' - ' - " - - � i i � 30% - - - - - - - - - - - - - - - - - - - • - � • - v'- - - - - - - • - - - - - - - •- - - - - - - - i 20% . . . . . • • • • • • • • • %•_• - - - - - - - • - - - - . . . . . . . • - • • . . . . . . . . . . . i i ��% ' " " '_ " ' /" " " ' " ' " " ' " ' " " ' " " " " " " " ' " " " " " " ' " " " " " " " " " " 0% I / 1995 1996 1997 1998 1999 2000 2001 2002 �Auburn �King County - -Washington State Source: Washington State Dept uf Recenue Pagc 8-4 Amended 2011 Economic Devclopmen[ • STREAMLINED SALES TAX The State of Washi�gton recently adopted streamlined sales tax (SST) legislation. Prior to SST, sales tax collection in Washington State was based on the siYe of origin, rather than on the site of delivery. Under the SST tax strucmre, sales tax is collected at the site of delivery rather than from those areas from which they were shipped. This change in tax structure will put Auburn at a disadvantage and negatively impact its tax revenue. Specitically, Aubum and similar cities have historically invested in infrastructure to support businesses engaged in warehouse and distribution activiCies thaT ship goods w other desYinations. Anotl�er concero for Aubum and similar cities that have invested in infrastructure include how the debt that has already been extended for such infrastructure will be paid and how the loss of a significant source of revenue will affect bond ratings. Based o� the potential passage of SST, the Auburn City Counci] approved Resolution No. 3782 in Novcmber 2004. Resolution No. 3782 outlines an approach and actions the City will take related to land use planning, zoning and other matters in the event a streamlined sales tax proposal or odier similar proposals that change the tax structure are adopted. • Because of the State of Washington's implementation of sales tax milig�t�ion payments to cities such as Auburn, the impact resultin� from streamlined sales tax has been somewhat lessened. However, the continued availability of these payments is not certain due in part to the State's current and anticipated tiscal challenges. In addition,the amount of payments does not equal the total loss in revenue to the City. The City's economic development strategies are dependent upon the City being able to continue a strong public investment progam in infrastructure and services. The City's ability to continue this public investment is contingent upon maintaining solvent public revenue streams, particularly sales tax. Sales tax comprises the largest source of monies to the City's General Fund, approximately 30 percent in 2010. The City anticipaCes that current and long-term fiscal challenges facing the State of Washington will Iikely results in the dissolution of the current sales tax revenue mitigation program. The eventual loss of the aforementioned sales tax revenue will directly and adversely affect the City's ability to adequately fund the capital infrastructure and services necessary to support the realization of the City's economic development strategies. This is especially applicable to industrial areas supporting warehouse and distribution centers that are origin based in nature. • Page 8-5 Amended 201 I Chap[cr S 2005 ECOtiOMIC DEVELOPME\T STR:ITEGIES In 2005 the City of Aubum broueht together a focus group of diverse business and community interests that identified several economic development areas within tbe City. The focus group's effort is reflected in a� Economic Development Sn�utegies document that indudes strategies and actions needed to affect necessary change for spccific strategy areas within Yhe city. Implementation of these strategies is intended to enable the City to achieve the City's economic development potential. Implementation of actions and strategies in the Economic Development Stralegres is appropriate and reflected in various elements of the Auburn Comprehensive Plan. Sincc the development of the Economic Development Strategies document, additional econoinic development strategy areas have been identified to indude the SE 312`h SueeUl24`h Avenue SE comdor within the recently annexed portion of Lea Hill and M Street SG between Aubum Way North and Aubum Way South. Goals and Policies ECONOMIC DEVELOPMEN'I' GOALS AND POLICIES GOAL 17. ECONOMIC DEVELOPMENT To ensure the long-term cconomic health oC the City and the region through a diversified economic base that supports a wide range of employment opportunities for Aubum's residents and those of the region and through the promotion of quality industrial and commercial development which matches the aspirations of flie community. Objective 9.1. Promote a diversified economic base capable of withstanding changcs in interest rates, inFlation, tax structure and market conditions. ED-] City promotion of new industry shall bc directed at attractii�g business that diversities the City's tax base, offers secure, quality employment opportunities, is sensitive fo community values and promotes the development of attractive facilities. ED-2 Emerald Downs, the Muckleshoot Casino, and the SuperMall of the Great Northwest offer opportunities for economic diversification that should be optimized by the City. ED-3 The importance o1' Downtown Auburn as a unique retail environment and subregional cenfer of commerce should be considered in the City's economic plan. Pagc R-6 .4mended 2U11 Econnmic Devclopmen[ � ED-4 The adoption of Streamline Sales Tax (SST) shall co��stitute an emergency for the purposes of amending the Comprehensive Plan outside of the normal amendment cycle in order to, among other items, implement the intent of Aubum City Council Rcsolution No. 37R2, if needed. As a result of the implementation of mitigation payments by the State of Washington, the City has not detennined an emergency exists, however, the City reserves the right to make this deterrnination and implement all necessary policies and measures should these mitigation payments cease or other policies, actions or events occur that the City believes constitute an emergency. Objective 9.2. Produce commercial and industrial siting policies which are based on the assessment of local nceds and the availability of transportation and other infrastructure required to serve it. ED-5 Development of industrial areas should be based on performa��ce standards appropriate i'or the site and witl� appropriate flexibility within those standards to accommodate changing market conditions. GD-6 Revitalize depreciated and/or obsolete commercial and industrial • sites through innovative regulations that redesign the site in accordance with modem design standards and industrial/commercial uses. Ell-7 Uses which serve regional needs and purposes (such as major industrial plants) must be separated from community serving uses in order to minimize traffic and other conflicts. Objective 9.3. Develop effective land use polices and economic development strategies that provide long-term and stable employment, increase per capita income and reduce the tax burden of Aubum residents. ED-8 Aubum should continue to provide an economic base not only for the Auburn area but a(so for the south King Counry and north Pierce County region. ED-9 Implementation of economic development programs shall be consistent with the policies of this Plan. ED-10 The City should develop a formal eco�omic development strategy as an element of the Comprehensive Plan to specifically identify the types of businesses most consistent with community aspirations and lay out a program to attract those businesses. • Pagc 8-7 Amended 201 I Ch•rp[er A a fhe Crty sl�ould work cooperaU�alv with t�d�er go�'ernmental agencies in its economic development efforCs, including the Muckleshoot Tribe, I<ing CounN, Pierce Countv, the Port and the State. b. The City should implement its economic development strategY through a partnership with the private sector. c Identified in the 3005 Economic Development Strategies documents are six strategy areas- along with two additional strategy areas. These economic development strateW areas � are targeted for population and employment 5*rowth to meet the City�s ?0-year (20�1) growth tar�et. Sub-area plans should be developed for these strategy areas. The economic development strategy areas are as follows: • Auburn Way North Corridor • Auburn Way SouYh Corridor • Urban Center • Auburn Environmental Park and Green Zone • 15'�' Street SW/C Street SWiWest Valley Highway/Supermall • A Street SE Corridor • SE 312°i StreeU124'�' A�enue SE Corridor • M Street SE between Auburn Way North and Aubum South ED-ll Ensure that economic development strategies are reviewed regularly in order to be flexible and respond to changes in the market. ED-13 The Ciry s-hould work with the private sector, schoo] districts and Green River Commimity College to develop programs to provide training. Consideration of special needs of economically disadvantaged citizens and nei�hborhoods and people with physical impairments and developmental disabilities should be included in these programs. ED-13 Support continued development of the Sound Transit Commuter Rail system, as an important means of expanding the CiTy's and the region's economic base. ED-14 Ciry infrastructure plans and programs should take into consideration economic development plans and programs. Pa�c 8-ri AmenJed 21111 Economic Development � HD-15 Implement the rec�mmendations of the City's 2005 Economic Development Strategies brochure including the addition oF the SE 312`h Street/124`h Avenue SE corridor and M Street SE between Auburn Way Norfh and Aubum Way South. The City's 20-year housing and employment growth shall be coocentrated to these economic development strategy areas. ED-16 Warehouse and distribution land uses are not a preferred long- term economic development and land use priority for industrial zoned areas in the City due to the loss of sales tax revenue associated with the SYate"s implementation of streamlined sales tax legislation in 2008, no substantive contribution to an increase in per capita income for Auburn residents', no reduction in the tax burden of Auburn residents, low employment densities, lower property values and land use inefficiencies. ED-17 Increases in manufacturing and industrial land uses should be the City's preferred economic development and land use priority for industrial roned areas of the City currently dominated by warehouse and distribution land uses. The City should revise current comprehensive policies and regulations to provide for and require tl�e conversion of existing warehouse and distribution • land uses to manufacturing and industrial land uses. LD-l8 To reduce economic impacts resulting from the mdevelopment of properties from warehousing and distribution uses to manufacturing and industrial uses the City should develop and implement a limited term transition plan that contains among other things both incentives for conversion and disincentives for not converting. ED-19 To support continued sales tax revenue growth opportunities in the City, those areas currently dominated by existing and warehouse land uses that abut existing commercial retail areas and could take advantage of this proximity to realize substantive value by changing to commercial retail uses should be considered for changes in comprehensive plan and zoning desi�nations that would facilitate the conversion of these properties to commercial retail land uses. ED-20 Regulatory and financial incentives will be identified and implemented where appropriate to provide increased opportunities and encouragement for the establishment of new or expanded manufacturing and industrial uses and jobs in the City. • Page tt-9 Amended 201 I Chapter S Objective 9.4 Maintain an adequate supply of land to support future economic development and assure the availability of economic opportunities for future generations. ED-21 Economic development pro�*rams should be viewed as a way to shape the character of the City's future economy rather than merely respond to market trends as they occur. ED-22 Land suitable for large scale development in the Region Serving Area of the City should be identified and designated for economic development. a. The integrity of large, contiguously owned properties suitable for industria] use should be conserved by use of appropriate industrial subdivision standards. b. The City should identify and resolve any environmental constraints affecting such land by means of the appropriate environmental review procedures as early as feasible. c. The need to support such land with the necessary infrastructure should be co�sidered in the development orthe City's public facility plans. d. Innovative and flexibic development regulations should be uYilized to enable the development of environmentally constrained sites while protecting tl�ose characteristics. Objective 9.5 Utilize the Ciry's unique environmental opportunities and planned infrastructure to build on and support economic development efforts. ED-23 Integrate the Auburn Environmenta] Park (AEP) into the City's economic development efForts by encouraging compatible hieh tech businesses to locate in its viciniTy. Amend regulations to establish appropriate land uses for that area �s well as develop sYrategies and incentives to promote the area as a "Green Zone" for economic development. ED-24 Utilize the future extension of I Street NE as an economic development opportunity. Development of I Street NE should establish it as stand alone comdor and not a "back side" to Auburn Way NoRh. Conditional use permit applications for commercial uses and nursi�g l�omes along this corridor and whose impacts can be adequately mitigated should be supported. Pa�e 8-10 Amended 2011 Economic Ucvelopment � ED-2� Use the M Street S6 underpass and development oY M Street SE and R Street SE bypass connection as an opportunity to create and encourage the clustering of complementary business and services in that area. • • Page 8-I I Ainended ?O11 ECONOMIC DEVELOPMENT STRATEGIES Auhz�ria:A�ore '1 iian You Imagined � ' , � � 3�"1E, ','.�,",fi,�..?�;; a�r�, ,�:: , � i ,:. :;�� . ��, .�. �'YT .+ r c�- .. � � _a ui;� s -�.Y��i.- , _ _ . ' . - . . _ ,i��r��a��.��r.��l� •5�4' I �•�_1{:" � /w�ww�... __.� � • , .�-�- .�°"��. _ _ � _�..� �' �� r r _ _. . _ � . _ _ -� _� - �,. �— f�i-=-� =-- _ -- . � a.1 � ._ 1� � � — � S/ � � �`�;�'`�k�,�''_--°�'��-°_ Eeonomic Development Strategy Arsas . i.� ��.,l.niin��,i.��n�.,w,�� Date:ll/14/OS Page z �ue.rtion.c?Call.•253 931 3090 • Mayor Pete Lewis ��,�., INTRODUCTION �`'.�ti.� "°—' Auburn has great potential. That refrain has been heard for as long ` as anyone around here can remember. Unfortunately, most of what Auburn has had has been potential. That unrealized potential 't h�s been as ethereal as the dreams it surrounded. However, today, that is no longer true. Auburn's untapped potential is turning into opportunity. More importantly, it is turning into re- sults. Private sector development, coupled with public sector invest- ment, Is beginning to flow into the downtown. Auburn Regional Medical Center has expanded and is now planning to expand once again. There is a new Justice Center and new commuter rail station and transit hub in the downtown. After years of effort, Green River Community Col- lege will now locate in downtown Auburn. Safeway has located its new, state of the art regional distribution facility in Auburn. Zones, the software reseller, has located its corporate headquarters here. Dozens of smaller, less heralded • businesses, have opened their doors in Auburn, providing jobs for our citizens and generating revenue to support the community's government and the services it provides. Yet, there is more work to be done and we as a community can not rest on our laurels. Eco- nomic development is essential for our community. It provides the jobs people need, the reve- nue our government must have to operate and the local access to the goods and services our citizens want. Other communities also want these jobs and revenues. The larger communities around us are in the planning stages for new and impressive projects. Auburn must take the initiative now or be prepared to continue to dream about its potential. As a first step, we have brought together a focus group of diverse business and community in- terests in Auburn. A group of people that have a stake in Auburn turning its potential into results and the ability to provide the leadership needed to turn potential into reality. This group has identified four Economic Development Strategy Areas in our community that need our attention now. Combined with these four areas are recommended economic development strategies and the actions needed in order to effect necessary change. The implementation of these strategies provides our community with the ability to unleash that potential that we have all heard so much about for so long. The following pages detail the Strategy Areas, Targets within the Strategy Areas, the economic development strategies for those areas and the steps for implementation. Now is the time to get onboard, the time to get involved. If we are all willing to work together, we can turn underde- • veloped areas into the kinds of areas we all want to have and redevelopable areas into areas in which we want to work, play, shop and live. IYs really up to all of us. We have the potential. �tty of 1�uhuYn Page 3 Table of Contents Mayor's Meuage 2 Table of Contenu 3 North End Strategy Area 4 Ro6ertson Property Airport Emerald Downs Ddve I Street Corddor AUUum Way North North End Strate�Area Map 5 Goltlen Triangle SVategy Area 6 Golden Triangle Strategy Area Map 7 Ur6an CenterStrategyArea 8 Ur6an Center Strate�Area Map 9 ISM St SW&C SC SW SVategyArea 10 SupefMall Boeing&General Services Atlministrdtion WeslValley 15thSt.SW &CSt.SW Overzrching Strotegies 10 15th St.SW&C SL SW Strategy Area Map S I A Street SE Cortidor Strategy Area 12 a Street SE Comdor Strategy Area Map 13 AEP Green Zone Strategy Area 14 AEP Green Zone Stmtegy Area MaD 15 Pronl CoveY lu il�i, t.irr.i 171-i phnto�,uiph. :m unknmrn ridcr cwnds utuP u railroad car i�� .4uburn's Nonhcrn Pacitir Ruil card. hi thc b:�ck- e��rni h ��:�� \��nhcru Pacifie Viaduet, a�e�iodcn bridre�eiveh speuineJ thc r.�il�:ird �rith aeecss :u (th 5irce�SL:md sumewhen hcncrri� 15ih Si. CU'anJ 21ih Si. SVi'. Included:ununy; [hc rccummcndxrium un pa;!c 6 is rccs�abli.hin� thc curridnr o�cr�hc r:�il�:vd. Page 4 (lue.riznrts?Cull.•253 931 3090 • � ;�� (�12'1'� I E� D S'I'R;1Th:G1� rARE,A and �1�:1N(� F:7' ��RI:;\ti STRATEGY AREA The North end Economic Development Strategy Area is bordered on the north by 277th Street,on the south by i5th Street Northwest,on the west by West Valley Hlghway an0 on the east by I Street. Within that large and diverse area,the City has Itlentlfietl 5 tlfstinct target areas,each requfring an individual course ot aMlon. R08ERTSON PROPERTY ��Astia STRATEGY • High-end Casual Dining. Attrect People from Surrounding Communities as well as • Bookstores. Auburn. • Sto�es Selling Electronics. • Music Stores. • Retail antl Office Space. A 1 R P 0 RT LO��a STRATEGY • Mod-Price Restaurant. Create an Environment that Attracts Businesses to the • Airport Related Services. Area. • Office Space at the SW Corner of the Airport. • • Aerospace Related Light Manufacturing Retail and Office Space. EMERALD DOWNS DRIVE ��s STRATEGV • Mod-Price Restaurant. Capitalize on Dayiime Volumes. • Enhance Daytime Population with Commercial/Industrial Uses. I STREET CORRIDOR LoAstles STRATEGY . Lunch Cafes antl Services. CoinciAe Logistics with I Street Extension. • Enhance the Daytime Population with Commercial Uses. AUBURN WAY NORTH �@�a STRATEGY • Identify Compatible Uses. Redevelopment of Underutilized Properties on Key Parcels. Among the additional actions that have been suggested to impact the influence of the I Street expansion are: • Aubum Way to go one direction and I Street the other at Harvey Road • Zone the east side of I Stree[in a manner that promotes the development of residential,office,and retirement homes.Creating a buffer for residential development to the east. • Suggestions that have also been offered to improve the airport are: • A new Main Entrance to the Airport • The possibiliry of extending the runway to allow for the take-off of heavier aircraft. • The possibiliry of an ins[rument approach in the fuwre. n ,�. � � -- , yl� o �; • - - �. � z p� euce sr �rn a I ' � � a ` m . y .., -' �n y wF. "� H WA ma€i� --- a � � $ s�'`�er y �4 L � � y�� 3. — _ �� tl7y 187 � � . ; __ __ _. SR 1B^ — �—� � �� I L t CR66K � ' _�. .'H . —�� Z tT �� mm �^Y � ei i � � . CfIICAGO � §� UAF'�M. ST. PAUL ..,� PACIF7C R.R. '� FI},fERALp ➢OWNS DRIVf; � - � �� teaexncn � v� ��^� � � D Ell8R4LD � �y � p4 C UON'NS � a p Nx� G NW �� / i� �� ` W � n.. R ..� p� DURWNGTON @ N--- R.R. � 3R- C p m 3� d - s �� AVE � :r � $ �'' N� 4 t9 � �., y ! �p �" 9 9 Z ST � NE J � � b ti C t��g � § 9C o i 7 — cn .� b b C _ �r�� 4 2�� 4� \ i , , 5' � � �. Q 7 C 19 O O 00 yirg` f c sr n�e _ es ; N ` in A� �? � ' ST NE N y 4 g p�r � p f e� � g a. E ST N` i + 7 E! ; � ,. J' �� _ � �5 F__ ftT_ HF, _ '2� a � 9 �a �� q y � ' i Y z ,-' n '�� : . RN RAY '� NOR7H —F i � � �. � � N I i , � � y � G � Nfi.�� /�d`'' W N � vNE _ _— I r � a- � m is�. � � � � / uc � rn .s � J NE � R� � .. - � v v w m N Page 6 �ue.rtions?Call.•253 931 3090 • GOLDEN TRIANGLE STRATEGY AREA STRATEGY AREA The Golden Trlangle Economic Development Strategy Area Is bordered on the north by Highway 18,on the south anU west by Au6urn Way South,and on the east by Dogxootl. To promote economic development wkhln that area,tha City has IdeMifled 4 strategies to be coupled with a series of logistical e(forts intended to reinvigorate the area's busineas climate. GOLDEN TRIANGLE �L��a STRATEGIES • Partnering Between[he Public and Private Sector. Att�act Pass Through Commuters. • Strategic Plan for the Area. Cluster Complimentary Businesses and Services. . Participation of Existing Business in Implementation and Establish a Central Commercial A�ea. Business Recruitment. Enhance Les Gove Park • Re-establishment of an Elevated Corridor Over the Rail Yard,Possibly Between 6th St.SE and 15th St.SW. ' • • Promote New Businesses—such as a First Class Hotel, Grocery Store, BowlingAlley. • M Street Underpass Developmen[. � • Utilize Les Gove Park as the Community's"Centrel Park". • Expand Les Gove Park out to the boulevarA,making it more accessible. Among the additional actions that have been offered to impact the Golden Triangle SVategy Aiea are: • Creation of a zoo at Les Gove Park. • The use of inclusionary zoning to disperse low-income housing and avoid dustering. • Better access to Les Gove Park from the East side of the park. Aubum Way Sou[h provides a thoroughfare for thousands of commuters each day. This"pass through"traffic represents thou� sands of potential customers for the businesses in thls area. The challenge is to create an area that encourages potential consum- ers to take the time to paVonize the businesses in this area,either through stopping during their commute or rewrning during lei- sure time hours. In addition to traffic volumes,the community does have several notable assets. An enhanced Les Gove Park has the potential to attiact a variety of people from throughout the communiry. An improved park coultl also serve as a catalyst for the redevelopment • of several properties. One signifcant benefit of an enhanced park would be the encouragement of the development of high-end, owner occupied homes,which could also provide a stable cusmmer base for businesses in the area. Since the area encompasses a variety of commercial and residential zoning it is well positioned to take advantage of the strategies proposed for the improvement of[he area. CYt,� Of rltll7ttJ'tl Page� . �� i YY'i�k�A.. . . iir�il�. . . rtGll;. rt�.�. � r , �. �r.A �1� . . -T - _ .' _ ... ��J '.1"� R, _ :. . . �. lil H\ - r . r. . ��. �• '6� � 9 . � F _ �:11 ' ` . . :� .i 1.r1 "I:ri..m.c . .. �' .. � pl. _ i.r -1 . . . _ ` V I:. - � �. . _� . . �� S _.�. _ � \I'.I'. _ rl �i 'S.� '� . - .. _ e -_ ..i a .. .�. .. �� :I�.�I ':�f��.t �wu . ' . ._ .�.. � �.:... ��- ' � PotentialMlT ,-�i, „ ' -. . � � Potential ��elopment -,..._,_ �� s " � Commercial - �ru i _ - ' CIUSCEfS ' � . _ - . ' � 191L I �i I - i .i . �\.. _ . . �. . .. � „ � . ��1'' ' ., i '"I - � ,I. .��i� - . . _ _ . .i.� �'I 'f.t 4 . u.rl. `xoa¢ _.... _ � _ . � _ill. :� � -.Ir�l . I . 1 _'�Ili �, -�1 . � � - (tll��{f -I � . ' � �° �� GOLDEN TRIANGLE �.� � 5[rMegy:AttraR pass Nrough commuters. i'I-� . Clus[er mmplementary businesses and services,creating a . ' cenfral romme¢ial area ro attraR Sou[tl East shoppers and - � � those from ad7acmc<ommumtles. �� - Logisti¢� PaKnenng between pubGc and pnvate sectors Strategic�laa Ior Me area II Pamopanon of e*istmg business m implementation an0 business recruitment. �, Bnnq in busnesses such as a firs[class hotel, � grocery store, bowimg aney. ' AM'dCt Il�qh PnE CO��Ort1�NUms. ' GOLDEN TRIANGLE '+�'BURN � _ * Note: MIT is an acronym for Muckleshoot Indian Tribe Development. PageB �ue.rtzo».r? Ca!!.• 253 931 3090 • URBAN CENTER STRATEGY AREA STRATEGY AREA The Urban Center Strategy Area includes the downtown area,roughly 6ordered by 3rd Street on the north,Highway 18 on the south,H Street Northwest on the west antl F Street on the east while also including the North Auburn Buslness Distrlct. The North Auburn Busl- ness Dlstrict abuts the downtown area and Is more or less borderetl by 15th Street Northwest on the north,the BNSF trecks and C Street on the west and Au6urn Way North on tM1e East side. URBAN CENTER � Loglstics STRATEGY • Quality Restaurants/Outside Dining. Attract Consumers to the Downtown by Serving as a Place • A Place to Congregate in the Downtown. to Congregate. • Specialty Shops Decide and Focus on What is the Auburn "Brend" • Night-time Activities. • Hospital—CommunityPartnerships. • • Parking Neetls,Parking Garages Included in PlanneA tlevelopment. . Bring together Disparete Groups with an Interest in downtown Resu�gence. • Consolidate and Redevelop Properties where Possible. • Extend the City Hall Plaza at the intersectian of Main and Division to create a community gathering place and downtown reference point. Among the additional actions that have been suggested to enhance the Urban Center Strategy Area Business Environment are: • Enough Uses to attract people and have them spend time. • Somethingthat causes people to gather in the Urban Center. • Eliminate parking requirements in the downtown. • Induce the multiple property owners of a block to collaborate on redeveloping the block. • Draw Traffic on 18,Auburn Way and 167 into the Urban Center. • Use the model Tacoma has developed to merge education and the arts in Auburn. • The City to collaborate with another Government entity to acquire properties in the Urban Center and take the risks associated with redevelopment. • • Where possible,the City should look at the acquisition of property for downtown redevelopment. Cil�r of Acrficrrn Page9 � W . ;�;ySrNw � w h. URBAN CENTER �-�� a � �5m si tie Strategy:Attract consumers to ihe downtown by serving as a piace to congregate. Logistics�. \ 1. Consolidate Property,whole blocks where � oR POSSIUIE. eEDE�+fLOPb1EN� a. south of Safeway to Cross "'E b. Key Bank Block c. Noth of J,C.Penney Apts 121h SI NE 2. Expand bus service between GRCC and downtown 3. Keep college in mind when developing language sernces 4. QualMy restaurenis/outside dining �om si Nr- 5. Qualtty restaurents and place to congregate in the downtown 6. Specialty shops decide and focus on what is lhe Aubum"Brand" 7. Night-timeactivities 8. Hospital/commun0y partnerships em s Ne 9. Parking needs. parking garages mcluded m planned development � 10� Bring together disparate�ihos pNw ith an inter t : in�owntown resurgencer— � — em s�He / � � �i _--, � �': rie. ws. ' 3 ' F' E au,Si NE z —— m I — c — 3 Z 3r 51 NE C , ntlSINW '� `" a e 3 ' a q F m 2ntl St E _ 3 3 > STT6 � 2 � � z z " m tt�r o e �n In N � U Rm ELOp 1 Z R FVlLOVI LL � istS7tE si INW W d1O$� }ENTIp 3 rtvH � ¢o> Hr E Mam Sl y R 1iC fp � � N M PCE y N MLN51 � VI PTI LL W y RITE y N y C1 r — 2nd SE `n 3b SW y N 2nE SI SE m w w w p E m � 3rtl Sl S rEHn o m R EL T TENT4 � � � OP i Q LL 411 St SE TEHTIG P ELOF li /6ttrSt S�' �-- -. -_ .�_/ _ —� URBAN CENTE � �� s«� A��B��• Page SO Que.rtionsr Cull.•2i 3 931 3090 • 15'fll S"1'. S\�� & C S`f. S�4' STR;ATF.GI� t1RF'.A an�j T:\ R(;Ii'1' .�RII.\ti STRATEGY AREA The 15th Street South West antl C Street South West Economic Development Strategy Area represents a large area that is economl- wlly diverse wkh differing land uses.The area is bordered by 15th Street South West on the noRh,on the south by Boundary Boule- vard,lgt Avenue North and Ellingsan Road,an0 on the west by West Valley Hlghway as well as Perlmeter Road. To promote econamlc tlevelopment within that area,the City has Identiffed four target areas In conJunctlon witA four strategles and a serles of Iogistical e(forts intended to augment the area's business ellmate. SUPERMALL I Lo�stks �A�Gy ' • Develop a Mall Parking Garege. Enhance the SuperMall Area. • Zone Both Sides of 15th Street SW Commercial. • Improve Highway 18 and C Street Intersectio�. • Target Businesses Such as Hohl and Target. • A Mid-range Restaurant,Such as Olive Garden. • BOEING & GSA Logistics �A��Y • ManufacturingRatherThanWarehousingforBoeing/GSA Attract New Businesses to the Area. Space. WEST VAILEY Loglstps STRATEGY I • Office,Professional and High Density Housing along West Develop the area with uses Creating an Administrative, Valley Highway. Professional antl Residential Environment. 15TH 5T. SW & C ST. SW Logistics STRATEGY • Focus on the Area at C Street and 8th Street SW. Redevelop the Area With Productive Uses that Improve the Area and Offer New Opportunities. OVERARCHING STRATEGIES Several overarching strategies have been suggested that would be applicable to all the economic strategy areas,[hese include: • Retluce parking requirements if a development will do st�uctured parking. • • Bring together bankers and developers to facilitate financing surrounding potential projects. • The economic stretegy decisions made that will affect the Auburn community must[ake place within the next 18-24 months. City of f�tt�7d/Yl7 Page 11 wiMmi NeSnelcpmm� �I .. I t � Comq[W IM ' �T�G . N�MuOW Zme - y� NRNitRt .. � BOflNG54F5 I .... - �s.rorzxnu oivasu i SUPERMAWdOEING/GSH i � $hate9Y:Attratt New Buvriesses. . LoqRt¢s,L Ennanre me SuperMalllvea - . a.Develop a Mall Farkmg Garage '� o.Zone Bot�Siaes ol IS'"SL SW Commerc�al ��, c imomve I�Iwy.18 and C R.in[erseRlon. I, d.Targe[busn�esses SURi as Kohl,Tergel e.Mid�ranpe restaurant,like Olrve Ga�tlea � 2 ManufaRunn9 rather Inan wur�ousmg lor � Boeing/GSA area ' � 3.OflKC pmfessmnai nn0 nipM1 arnvry nm�sin9 � � alnng WeSt Vdlley. ' SUPERMALL, BOEING, GSA �""" ` aage iz �ue.rtronr? Cal1.• 253 931 3090 • � ST. S�. CURRIL�OR S'I'R ,ATF.GI� ,�RF-::A STRATEGY AREA The A Street Southeast Economlc Development Strategy Area represents a large area that Includes otfice,retall anA Industrlal uses. The area is bordered by Mlghway 18 on the noRh,on the south by the Clty's munlclpal boundary,on the east by D Street SE extended to the Clty's southern most boundary and on the west by the rellroad yard and the boundarles of other local Jurlsdlctions. To promote economic development wlthin that area,the Cfty is proposing several meaningful Initiatives Including:neighborhood involvement, strengthanfng residentlal areas,expan0ing commerclal areas and unincorporated area annexation. A STREET SOUTHEAST CORRIDOR �o@�� STRATEGY • P�otec[the area's inteiior residential neighborhoods Enhance the economic vitality of the A Stieet Southeast using:buffers,traffic calming and cul-desacs of conidor. residential streets. • Engage the neighborhood in a collaboretive effort to A Street is a largely commercial corridor with the west side dete�mine where the dividing line should be for existing dominated by the rail yard.The east sitle is tlominated by residential and commercial/industrial uses and future commercial and residential uses of mixed quality. ; commercial development. • Recognizing that A Street is already a high volume treffic • Enhance the commercial vitality of the area through co�ritlor,additional traffic should not be used as a rationale changing the zoning and comp plan designations for the to preclude develo0ment.Traffic mitigation efforts should RMHP zoned area and portions of the industrial area to be focused on the enhancement of safety along the one supporting multi-family and town homes. corritlor, not capacity. • Promote[he creation of a landscape buffer and treil corridor along the A Street right of way. • Deai with the traffic congestion along the corridor. • Advocate the commercial redevelopment of properties along the A Street Southeast corridor. • Change the heavy industrial zoning to heary commercial. . Encourage the comme�cial development of the south entl of the rail yard. • Facilitate and expedite the sale of any property the railroatl wishes to sell for commercial tlevelopment. • Encourage a concentratetl expansion of the commercfal node in the vicinity of 6th St.and A St.SE. • Separate the commercial development of Terrece View from the residential portion of the area. • Annex those areas and islands along the corridor that should be within the City to provide unified planning. • Investigate obtaining the right of way neetled to transform the Segale Haul Road into a secondary arterial and/or trail when the usefulness ot the road has ended. • Prioritize the commercial developmen[of Terrace View. • Cdl� Of�tl�7GlYY/ Page13 '. 3 S N w rWn n S 5 St 3 `� i w w o a �ss � s O 61h St SE — 7� SI SE 8th St S � tlt t S 8Ih � SE m 81 h SSS 1 Uture S� I Redevelopment l0i E�pantled ommarnal Node at 151h Sl SW °1 w w ' `� tn �n m � �" �n in LL � = i � t7th St S II v POTENTIAL RESTAURANT / N DEVELOPMENTAREA �I N 2 / _ � ( I W dar Dr � 22nd I SE � 23r St SE ^' h St 25th St SE N 26t 5�SE � � 271h St SE N �Ih SI E w u1 m U pV S c y T ' MM _ Ai'� w fw 3 i _ N � I An x 1 I 37th w 7[h St IND $ I r0 Tenace View COM ER I L RE ZONE Commercul �evelo melrt .r Ilingson Rd w SE 42ntl POTENTIAL RESTAURANT Q Commercal DEVELOPMENTAREA � z ? Develo ment � I U J w � m � � �, y � A� 2 y ` � a akhu�st O` A Street Corridor Economic Development Strategy Area Page 14 Quertionsl Cal1�2�3 931 3090 �EP GRf�: F'.AZO '� F�: STR.ATF.G1' ;� RF:.1 STRATEGY AREA The Auburn Environmental Park Greenbelt Strategy Area represents a large area that incluCes ottice and envlronmenUlly sensltive Industrlal uses.Roughly,the area fa barderetl on the north by a Ilne from the e�tl of Clay Street to the Rail Road t�acks,a Iine from Western to Clay,and West Maln to 167,on the south by Hfghway 18, M Street on the East with 167 antl the Auburn Environmental Park on the West.To promote economi�developmeM within that area,the City is proposing changes in the area's industrial zoning requirements that would result in an atmosphere invitlng environmentally compatible uses. ENVIRONMENTAL PARK GREENBELT Loglstics STRATEGY I • Bring AEP improvements out to the Boulevard,enabling Create an economically enhanced area that complements the communi[y and visitors to be awa�e of the AEP. the Aubum Envi�onmental Park antl sustains ' • Change residentially zoned areas to industrial. environmentally sensitive industries. • Initiate design standards making new development compatible wi[h the AEP. • Structure the M-1 zoning requirements for the distric[to � encourage the attrection of environmentally sensitive ' industries while making existing development non- � conforming. • Extend Main Street improvements[o the area,including: Street Improvements Landscaping Trail Corridor • Upgrade the infrasVucture of the area. . Manage the area's drainage using a regionat methodology. • Prepare for a second phase in more densely developed but underutilized areas adjacent to AEP Greenbelt Strategy Area. • Terrace�� ti 9iry N C��riO 4aby �� W D, �''S�N` R Si NW N �OOr��Nw � � SR �ny�`N i '^ � �s� W zPike g�NW � .1i.. � k w Vaue�H,vy � N � � n t a Z �.1/ � ' 2 3 � 1 y � � O � /� D SR� ? w Nc � m ��R,, sR ,�� O � � wF.:.o,�a�P J � � m � � � m Z m �� /�//J� o m � � m �� N'�� GIay51 � � A � ` A z � � Z � � n � N �77 r (� � W D � , csisw � � x � � csiH�v 3 O � � Fsisw FSNvr N � � ,� N �. E si sw ' � � z N (p F DStSW DSINW G9SN' _ .THANSITRD . . . - --_ : . . . _ .. CSINW . - . - 851NW ' � - �� ' .. 3 n N tn ASINW 2 �' < m � w �C v_i o' ' 3 A f z 5 �-^ u+ v e N Drvisoa 51 � � � m � 2 AS�SE ASINE p51NE � AS�NE [n . • ATLJBURN WASHINGTON • Pnmary Busineu AtlAreu 25 West Main Aubum,WA98001 Cuntac[The Ciryof Au6um Department of Planning Phone:253-931d090 • Fax:253-804-3114 Email:ahicks@aubumwa.gar AUBURN * MORE THAN YOU IMAGWED Urban Land: The Distinctive City Page 1 of 3 Burn/Write CD & DVD � • � . • A�' Free Full Version for Windows XP,Vista, 7 URBANLAND April 4. 20�2 The Distinctive City By Edward T. McMahon Cities are seeking the recipe for economic success in a rapidly changing global marketplace and, in the process, often overlook a critical asset: community distinctiveness. Special p/aces, characteristics and customs have value, and they can increase a city's competitive edge. Around the world, cities are seeking the recipe for economic success in a rapidly changing global marketplace. Indispensable assets in a post—industrial economy include: well—educated people, the ability to generate new ideas and to turn those ideas into commercial realities, connectivity to global markets, and multi-modal transportation infrastructure. Another critical-but often forgotten-asset is community distinctiveness. If I have learned anything from my career in urban planning, it is this: a community's appeal drives economic prosperity. I have also learned that, while change is inevitable, the destruction of a community's unique character and identity is not. Progress does not demand degraded surroundings. Communities ' " can grow without destroying the things that people love. � �, � In 2010, the Knight Foundation [http://www.knightfoundation.org] teamed up with Gallup [http://www.gallup.com/home.aspx] pollstcrs to survey 43,000 people in 26 cities (where Knight-Ridder (http //en.wikipedia.org/wiki/knight_ridderj had newspapers). The ;u � � -called Soul of the Community Survey � [http://www.soulofthecommunity.org] was designed to answer �� questions such as: What makes residents love where they live? What attracts people to a place and keeps them there? The study found that the most important factors that create emotional bonds between people and their community were not jobs and the economy, but rather"physical beauty, opportunities for socializing and a city's openness to all people." The Knight Foundation also found that communities with the highest levels of attachment also had the highest rates of gross domestic product growth and the strongest economies. Place is more than just a location on a map. A sense of place is a unique collection of qualities and characteristics —visual, cultural, social, and environmental—that provide meaning to a location. Sense of htip://license.icopyright.net/user/viewFreeUse.acY?fuid=MTYxNzEyMDI%3D 5/9/2012 Urban Land: The Distinctive City Page 2 of 3 place is what makes one city or town different from another, but sense of place is also what makes our • physical surcoundings worth caring about. Author Wallace Stegner [http://wallacestegner.org/bio.html] once said, "If you don't know where you are, you don't know who you are." We all need points of reference and orientation. A community's unique identity provides that orientation, while also adding economic and social value. To foster distinctiveness, cities must plan for built environments and settlement patterns that are both uplifting and memorable and that foster a sense of belonging and stewardship by residents. Planners spend most of their time focusing on numbers—the number of units per acre, the number of cars per hour, the number of floors per building. In the future, they will need to spend more time thinking about the values, customs, characteristics and quirks that make a place worth caring about. UnfoRunately, many communities are suffering the social and economic consequences of losing their distinctiveness. When it comes to 21st century economic development, a key concept is community differentiation. If you can't differentiate your community from any other, you have no competitive advantage. Capital is footloose in a global economy. Natural resources, highway access, locations along a river or rail Iine have all become less important. Education, technology, connectivity, and distinctiveness have all become more important. Joseph Cortright [http://www.impresaconsulting.com/node/3], a leading economic development authority and president and chief economist of Impresa [http://www.impresaconsulting.com], a consulting firm specializing in regional economic analysis, says that "the unique characteristics of place may be the only truly defensible source of competitive advantage for communities." Likewise, Richard Florida [http:/Iwww.creativeclass.com/richard florida], author of The Rise of the Creative C/ass (http://www.creativeclass.com/richard florida/books/the_rise_of the creative_class]says, "How people think of a place is less tangible, but more important than just about anything else." Unfortunately, the subtle differences between places are disappearing. Today, if you were suddenly dropped along a road outside of most American cities or towns, you wouldn't have the slightest idea where you were because it all looks the same, including the building materials, the architectural styles, the chain stores, and the outdoor advertising. Technology and the global economy make it easy for building plans drawn up at a corporate office in New Jersey to be applied over and over again in Portland, Phoenix, Philadelphia or a thousand other communities. Over the past 50 years many of the world's cityscapes and townscapes have gone from the unique to the uniform, from the stylized to the standardized. In recent months, there have been several surveys published, such as Zipcar [http://www.zipcar.com]'s " Future Metropolis Index [http:/lwww.slideshare.neVzipcar_inc/zipcar-2012-future-metropolis-award-and- index]" and Fast Company [http://www.fastcompany.com]'s "Most Innovative Cities" list, ranking cities based on sustainability, innovation and effciency. Some of the factors that were evaluated included the number of green buildings, the percentage of hybrid cars and the number of patents issued. These are all important, but sustainability is about more than new technologies. At its most basic, "sustainable" means enduring. A sustainable community is a place of enduring value. Doug Kelbaugh [http://sitemaker.umich.edu/kelbaugh/home], the dean of the University of Michigan School of Architecture [http://www.umich.edu/units arch.php], put it this way, "If a building, a landscape or a city is not beautiful, it will not be loved; if it is not loved, it won't be maintained and improved. In short, it won't be sustained." Distinctiveness involves streetscapes, architecture, and historic preservation but as Cortright points out, it also involves cultural events and facilities, restaurants and food, parks and open space and many other factors. "Keep Austin Weird" is more than a slogan; it is a recipe for economic success. A distinctive city is a city that the young and well-educated want to live in, that boomers want to retire to, and most certainly a city that people want to visit. According to The World Bank �http://www.worldbank.org] and the World Travel and Tourism Council [http://www.wttc.org], tourism is the largest industry in the worid. Tourism is about visiting places that are different, unusual and unique. The more one city comes to look and feel just like every other city, the less reason there is to visit. On the other hand, the more a city does to enhance its uniqueness, whether that is cultural, natural or architectural, the more people will want to visit. It is no accident that Paris —a city that looks and feels different-gets 27 million visitors per year, more than any city on the planet, according to Lonely Planet [http:!/www.lonelyplanet.com]. http://license.icopyright.neUuser/viewFreeUse.act?fuid=MTYxNzEyMDI%3D 5/9/2012 Urban Land: The Distinctive City Page 3 of 3 Arthur Frommer [http:/len.wikipedia.org/wiki/arthur_frommerj, one of the worid's leading travel experts and founder of the well-known travel guide company, says that among cities and towns with no recreational appeal, those that preserve their past continue to enjoy tourism. Those that haven't, receive almost no tourism at all. Frommer has been quoted as saying,"Tourists simply won't go to a city that has lost its soul." In the future, planners will have to help communities adapt to change while maintaining or enhancing the things that they value most. Lyman Orton [http:/lwww.orton.org/who/lyman_orton], the principal of the Orton Family Foundation [http://www.orton.org], a philanthropic organization which supports community development, calls this " heart and soul planning [http://www.orton.org/who/heart_soul]." It is both a process and a philosophy. The process seeks to engage as many people as possible in community decision making. The philosophy recognizes that special places, characteristics and customs have value. Given all this, I believe that one of the big questions for cities in the future will be: Do you want the character of your city to shape the new development, or do you want the new development to shape the character of the city? �� lvI �.� ,� . . ... . . ... , � .. . . . . . , � ... _ . .. . . .. . . -:_. .�. ._._ � . r :� . . . . . , , . . ..� , __ � .._ _ http://license.icopyrightnet/user/viewFreeUse.act'lfuid—MTYxNzEyMDI%3D 5/9/2012 • � � � Center .��»� Ec �:� �� .� �-�� litality ; ,. �i! llic� c 'ullc�c/�� r�/-Ifti�ir��;s ur Economic Gardenin� - Practices , Principles and Implementation �� WESTERN ,,� �.� ,��, �� nv �� www.cevforbusiness.com � �i�i Dorr i�n eCtor � facebook.com/CenterForEconomicVitality What is it? Innovative Economic Development Strategy Focus on growing existing targeted businesses rather than attracting (poaching) new firms from outside the region 1f� WESTERN � wn.uivcro�vuni��ex�i�ii � '� �1 �'.�.': f.,C01"l� U1t�111t�/ "More than simp/y a metaphor for exp/aining evo/ving priorities and practices in the field of economic development, economic gardening is emerging as a cohesive framework of proven techniques that both challenge and complement conventional wisdom in the field." SBA Quotation Ja 'f WESTERN � _ �,, ,,��, Econon,�� Vitality WASIIINLfUN UNI\'kP(Il1 .ii ll�� 1 �il�l 111'i�l�ill�lill-:.fl�ll�I� `�' G rowi ng the economy f rom the i nside out " _ C'hri�s �"ibb�r�� ,�,�' � e��.�� '� �► ��a '� �' ;� �.�- �ecovery �rom massive �ay��, unemployment � '/ WESTERN �_� �.��_,� �cono�� Vitality �� ,�.�„�..,,�. � Economies are grown out of entrepreneurial growth and expansion Our job ir�b _ . �- � , . - . � ��„- �. � , r nr,z , ;� �, _. � ,� �. �c��_��°��r�. �� .��'.�,��.4� '"3+►L lnformation �''"Y .. �. Economic Gardening ar�� Competitive Intelligenc�:� � WESTERN I� »,,,,��,;,,,� � �„ , x., „ �r �;.� � Econom�. Vitality �d:w i��N��w vlltu.�qr,.und 'r.� A Model of Business Distribution By Growth Stage • Stage Four (500+) , ............................... ::::::............................... ............::::. • Stage Three ( 100 to 499) • Stage Two ( 10 to 99) • Stage One ( 1 to 9 ) /—v� � Employees W�� E111�lOyt'�'S � ESTERN conom Vitality N'\�Ill.ul. 11)1� 1'.\1\'1'N\11 \ � ' . . . ` �If lll� (�dLy� ��l if.n.r.,_�i'�J I . • � � Economic Development Application - Clusters ... .... ... .... ` �� Vertical Industry Clusters Cover all stages � �� WESTERN "� �;<�� Economi; Vitality W1ti111kI:TUN UKIVILAtiII"1' "Horizontal" Cluster by Stage of Growth .. .... ....... �.. .::::'........ ............':::. V�rtical I �c� u��r� � I ��t��s Versus Horizontal High Growth Second Stage Clusters � �/ WESTERN � Vitality �onn�nv�. r��n u�rvru.ii � � C� ,I_t '� � f�C�l�l��l"li .� . . . .�,,,, � r., ;:��.. � „i� � Focus on Sector Instead of Poaching - , � . 4� � . \ \ .1 �- •i,ri\�1�. � � . �,..,�_, ��a,. , � � a,.. ,:i•� ; `�.'' r. �'-•:: , The largest sales and job decr��s�� ir� � the last decade are in Stage 4 � ' " �' ""��: � �� , . companies (500+ employeesJ And it distracts from other economic development efforts �/�� '/ „• ' E,STERN �� <<<.r Econorr�.� Vitality .u inr�nilrur�n Hn;�nr..��i��l l Methods and FOCUS bti � 4� , ,:. ,�� : � � � . l�/lpr�Cetl r: Team Dynamics � �/ WESTERN , n ; �conom� _ Vitality ��,�,,. �� ,.. ,� � ,..,,,�,�__ , , _ • � � The Facts . Traditional attractio �, ,.: �' • � � serv�ces cannot gro� � ,� _ -. . ��'��'1►�� r��,� � �_ , , � � , . . � a� Y 1_ ,. - —�� _ � � t� _ _� �i% • .��t��'~� ��'�'�" VI/e must� rnnovate and , ;, r � .��;� _ A � �. support with relevance -. - � =��: . _,_-�-_-,-=--� � -- . �� "/ WESTEIZN � � ,��-, t;conomi� Vitality I i n� Wllryr�j fluslnea.rniy 7.. . . � u..�.rn h'o�lurrv��.r�I fiurr.ni. ��.� =�- . What drives growth? , : _ _ . r ��c ��ti,:��^_-�?^`'� _ . ..-- -�i = . - Smc�ll, local carnpani�s as th� driver �f job�, wealth and new investments � / WESTERN �conom; Vitality �,,,,��,. ��,� �.�, , �., , , „ � , � �,,,. � ,,� ,. � _ � � � Gazelles ! ��ds ,ti � . } � t �: �R ..,Y "..J� : d� �l.r'� '1.i.e'Y �' ti�.+�ti.d o Y e .. �`-' � Y ��X�'�' �IA"f�lA�+ai'�� '�"P � , :, : , ` � : _ - �; J�_,.,_ � • � f ` se � '� ' i , ' ' _{��`,t'�'�'. �� '.1 > r � 1 r. � T 1 � ��i.F � .. . � �� " AE�. p� � r� 91�" f i �it� r.�.� i., �� " � ;j � _ WESTERN �� ,�,,,��.,,,� . �„ � ��,� , ,,��c�,r Econom�; Vitality ,,,,,, ��,.,i,v��,��u��.��„..,�,�,i r Innovation and Temperament Ideas and people drive company growth Specifically... Particular types of leaders drive growth �� / WESTERN � w.,.,,�N,, ,�,� � �„ �x,, , , � Econon�� Vitality � „�in�,�,��.��„��u . �.,_, ,�„ � �. Supporting Growth and Understandin� "Predictability" � + . � . � . . . - . - . - . . � � � �/ WESTERN � .��.�. �„� , �� w��„ Centerr�� Econom�� Vitality ,. , .„�,.,. ,�, ,:,,,,�.-_v�.,� Innovation and Survival � . . • - • � . �Edge . � . Chaos . . /�1� , WESTERN � „,,,,��,,, „� � .�, , ��,,, ��_ i�conom;: Vitality • C � Shifting from the Commodity Trap �' S��de f`a '.�. ��' 13 �� rm� '�4'' � 4 �-1�N 3' J Natural Resources-Subject to risk � �� WESTE µRN ;_„�, , �conom� Vitality �illpr('uU�ycilRn,rni, .nn�! I1r�l��rr 11i��1��Wl..i I . .. Raci ng U p Hel ps to change the structure of thinking about enriching businesses success • Market expansion • Exporting • Management strategies • Hiring 1� � WESTERN � �., ,i� � �conor�� Vitality \YA6111NOTUN LAI\'IM�IT1 � � ��. Resources Empower Decision Makin� � �` Businesses `�, � /� ! - r � Business Support 7 J� � � Services � � �� ' � �/ Economic � � Development ` Practitioners �- �� ,.% ._, � ��-� : . � WESTERN � �,..,�.,,. ��,� ,�.,, ,:w.�, , �� t� r Econom: Vitality ��u�. � . �...,. .� ��,��n��...,;�,�. "Existing, expanding companies contribute most to U . S. job creation . In fact, from 1990 to 2008, existing companies generated 71 percent more new jobs than startups" Youreconomy. orq � / WESTERN � ,_�� ,� � •�� Fconom�� Vitality , r„�=„��•»,��, , > > "From 2001 to 2008, "Resident/locai businesses jobs grew 5 . 9% — while Nonresident jobs decreased by 16.4%." Youreconomv. orp � 1/ WESTERN ��r �i�� Econom�, Vitality � �u�, ..,.n,��.,i c�,.�,��:.,��r;,,,,,,.,.. � � � . , � . . , . . _.�- y� _. . ._ . -..,_ ,. � ..7,7� a_��-3� '� You were viewing W�shinpton • 200a - 2009 . Cfck on any annual data po�nt ro see deta�l Growth Factors - Net New lobs Whatcom (WA) county 1995 - 2009 6K // � ,\ .�� \ \\ � 0 �� J -8K 1995 -96 97 98 99 00 01 02 03 04 OS 06 07 08 2009 � Net Opened o Net Expa�ed �� Net Reiocated v Net Ner. Factors Openetl iB�nhs - Deaths). ExpanOetl (Ezpansions- Contraaionsl, Relocated (Move m - Move Out! • � � EG Helpin� Shape Economic Development ; _ � ti . „ �; . �, . . : „ ; . ;. , , F�< .- ._ .� .._ ._ . . �� .� _ ._� _ � . _ ._.� .. _ �. .:, n = a s are expanding by company size and or sector Developing study of best practices to inform your community � �/ WESTERN ��r�� it�r � Economt� Vitality w,.,��v�. ,.,� � ��, � .,, �, ,�ii�,�� „��„��r u��.,,,,,,��d i.,,,�,��. _.. . .�,. -. .. . Focus on jobs _ What factors have led to Florida's growth ? � Self Employed • Stage One • Resident Do you understand these factors for your region ? � '/ WESTERN ,�,.�,��,, ,�,� � ��, � K.� „ �_� ,i� � tco� Vitality �. � .. �,,, �.�,�,,,,, � � � Florida * 2000 - 2009 Summary Summary Jobs Change - Net New Jobs Tima-soria. Jobs qrew 20 9% f Sales grew 16.2% * Composi[ion compuison Ulck on graph to see deta�is Primanly. the job gain was causetl by the YE- membership . S�oscrio� to us� j-oipit NAICS ' "' i.9M expansions of exist:ng compaNes (i2.6%I The .� � ,__ _ number oi job gams were also nigher Oecause[ne � � num0er oi new companies grew, addmg 8 0% � Furcn�r andysis �'�"� more p05 during the same peno0 About 0 3% ot NET; �ata arcess WeIL : -� eta: uca-=- � - - rcacea �is.: �00 gams came from comparnes movmg Factors: Uyened �Hnths�- Deaths), Exp�nded (Eipansfons- Ceniradmns), Rebofed(Move Trigger to growth is '"- "'"°o"`> '� in Self Employed and Stage One p Y O U f R E'S U I t 5 Flonda • 2000 - 2009 �r How YE a�t� Companies workz ro� yo� � 5�� prownh f�aors . Print Vusion . RESIDENT �` 1 `� . � �+' TOTAL 887.711 2,041.90� 1,157,193 130.BNo TOTAL 9,083130 10.981,369 1,898,139 20.9% Noncommercial 53,959 92,374 38,415 71 2�S Noncommernal 1.35b781 1375321 22,540 IJ% Nonresident 60,655 52,860 -7,795 -12.99c Nonresi0ent 2.033,487 I,668342 -365J45 -18-0% Res�Oent 770,097 1,896.670 1,126,573 146 3% Resident 5.696.962 7,937.706 2,240,794 39.3% Self-Emptoyea I1� 205.010 543.088 338,078 164 9% Selt-Empbyetl ni 205,010 543,088 338,078 164.9% Stage 1 (2-9) 463,693 1,241,106 777.413 167 7% Stage � 12-9) 1.642.385 3,500925 1.858,540 113.2% Stage 2 (10-991 95319 106,371 11,052 11 6% Stage 2 (10-99) 2,181.707 2,4Q2194 220,487 10.1% Stdge 3 (100-499) 5,516 5,670 154 2 8% Stage 31100-4991 933,626 942.219 8,593 0 9% Stage 4 (506-) 559 �35 -124 -222% Stage 4 (500-) 734,234 549.280 -184,95 -25.2% Top of P�p� � �'C'U . _ � .r' � i'( 1��'�� Florida * 2000 - 2009 Summary Summ�ry Jobs C�ange - Net New lobs Timrs�ri�s �oos grew 20.9% * Saies grew 16.2% * �� ampo�ition comp�rison Ulck on grap� to see ;�e�a �- Pr�mar�ly. the joD ga�n was caused �y the Y� rE- membership X- ezpans�ons of exist�nq companres Irz.6%1 The >�ozcrie� to us� 3-aiqit NAICS . . 1.sM number of job gams were aiso nigner because [he � �� numDer of new companies grew. aAOmg 8 0% � F urt��r mdyib more pbs d�ring the same penod AOovt 0.316 of ��+E7; data access _ Wells 8 Associ�t�s uc=--, . .� - . �oD gains came fiom companies mov�ng Fano.s:ove�ed ia�.�tis - oear�,s�, E:pa�ded (Expansionc-Contractians),fldooted(Move In-Nove O W) Y�.-� U i ri��; �_i I t ; Flonda . 2000 - 2009 How VE a�u works for yo� � Sp prowth hctors » Crinc Vanion A •• TOTAL 1.007,033,SB0.387 t.169.874,t46,771 162.840,566.38� 162% Noncommerc�a� 56,322,201,431 58J28,564,270 1,806362.839 3.2% Nonresitlent 249,262,514,480 238J57J20.081 -11,104,794,399 -4.5% Resldent 701,448,664.476 873,587,862A20 172.138.997,944 24.5% Seif-Employe0 (1) 24,698,715,887 39.527.444,786 14.828.728.899 60 0% Stage 112-91 219,182,976,449 331.122.490333 111.939.513,884 51.i% Stage 2 I10-991 269,SBB.544.945 313,614,475,924 44,025,930.979 16396 Stage 3 I100-4991 116.299.418.916 129,849.918.836 13.550,499920 IIJ% Stage 4 (500-1 71,679.208.279 59,473,532.541 -12,205.675.738 -17A% Top of P�p� . Rj:' _— _— — ____ z..,- s�a— _—--'_ _s..-ai _ _ - - - _ —_ — Individual Business Support H�Iping busera�� a�hiev� ��r��°�ss tha�c��h informed deciswon� n�al�in� ��a��ort�c� by 1� �� WESTERN ,.,>��.,,.,,,� � .�, ��.� �, �_ �� Econom�, Vitality a!Ihr(bNrU�'��J lOc�n,�.:und! Ilniarn Nu.fivptt��1'...�....i_ - - - - ,_ __ Top Client Research Areas • What is going on in the industry/what are trends in the industry? • Who are my consumers ? • What are KPIs/benchmarks for my industry? • Who are my competitors ? • Hov►�/where can 1 reach my target audience ? 1� '/ WESTERN �,>,��,., „N , .�„ H,, , , , Vitality • � � General Economic Gardenin� Support N .I � ��-�.a'!i d � � '� I�a 4 4' iY � �_ �_•�..�: k_ .,Y :�.6 � d 11 e' �. r1i &�. <�' 4�d �-�'�; � �'.,d � N li a ea �a � i �� informed decision making supported by research 11� WESTERN '� w„�„�.<<,� , �.,, ��,,, , _:�� <<t_� tconom��. Vitality �tl Ihe l'ulLvlr ii(liu.�q��..�ind 1..� p�ar,n�ce,enuu,.,�,i� , ,�.. Consumer Research •Demographics •Marketing information �Consumer expenditures •Related products and services •New product or service developments � / WESTERN � � �. Econon,� Vitality ��,,, , . ,,, u��.�,��:..,;.;.;, � � � � Geographic ._. _ Possible location identification and � . , � ��sis , � , � . \ . _ � , , � � � _ � ; �edicting and , '� s ' , defining demand ; � 1��T �/ WE.ST� F xl�l�l l_�?r�t�� tconom i: Vitality ,�„�.�� ,.�i,.��,,;1�:�,�,�,->„��d�: Semiahmoo ' �"' �`+'� Ba �'�'�6'�%'� Y � �-- , . - � l lttmmr 'v;c�nar s Apparal ;A'•'rl;� Bay by Cens�s Tracts o saaz-ss�5 ,�i.:,��;:_i 0 sxat -sasz a;in �;,�r� � � i•�"� ❑ 5149-3441 Coi. 1� �'2"' ❑ 5?64-5429 - .r. : �� M,�;.?, ��,, ❑ 5183-5364 ��'1 3C • � � . . . _ . _ . . . _ . . . Industry - _ • Who are my com�eti�c�rs � • Are sales in this industry going up or down ? • Are my projected costs and income similar to others in the industry? � '/ WESTERN �;;u,iter Economic Vitality ��,<<„�� ,u�„��,��u�,.�,,,..�„�d�,�„�..�� Human Resources to Develop and Retain Talent ` Vi� v]t.i�� 'r�f:: :��6i'��oi; )'�iu �'�':�4.,r �j.r �V�bi'.� d` • What are pay rates and benefits for this position ? • How can 1 recruit and retain employees ? • What training should I make available to employees ? 9 VI/��alc� �►n ��nn�Ic��e� han��►�a�r contq�n ? WESTERN w.,,,��<. ��,� � �,,.� �.� � , � � i, � �=.conorl� Vitality � � � Marketing �t Web Presence � Vl'�►-iting a �c�rk�tir'g pr`'a�� • General web review • SEO evaluation (basicJ • Recommendations • Social media case studies & recommendations • Recommendations for international markets � '� WES'I'E1Z�T ;_��r�tt_�r tconom:, Vitality , ,,,,,�,,. .�,,,,,,,,��.,,,,�,�� Growing Exports Helping businesses achieve .success �through informed decision making supported by research � / WESTERN ,,,,,,��:,�,� „�, , w,� � , Vitality � � � _ . . Getting started ,.. _ . . _ _ . _-�- -- � Is it worth exporting ? • Needs and talents assessment of company easic research to understand fundamentals and industry sector 1� '� WESTERN K,s��,v�,�,� � ��..,:�� , , _.t�r�i� � Econom, Vitality ,�,�n.��, ,,�„��;�,_�,� .��,��i� . Export Market Potential • ldentifying and exposing gaps in export marketplace • Analysis of competition, customers, and distributors • Country profiles • Financing and insurance hedges • Canned industry reports � I WESTE ,RN ; � � cconom; Vitality , �,�„ ,�,1,�,,,,�, � � � � In -depth individualized research C�ornpe��trve �n�erligen�� .��re:�� e�� companies understand their unic��r� potential, risks and opportuniti� . � WESTERN /� „�s„�v�,�� „ ta<�„ �:_ � �� r;.�r Econom, Vitality ... � : .i�uu o!Uu.c�nc.:s unJ 1. .�... �i.:.nrm�r.�n P+in�rnn. Recent Research Topics How does my website compare to the competition ? What are the demographics of consumers who buy gourmet desserts? Which of these potent�al locations for a dental office is best? What are typical start up costs for a bar? What is the market potential for a mushroom growing operation ? What is happenin in the Laundromat industry? What are competitive wages for a forkli� operator in my area ? Which industries spend the most on promotional products? What are tl�e demographics of consumers of custom blue jeans ? Can 1 get a list of companies that might be interested in licensing my product? Who are the competitors in my area ? How much ice cream is consumed each day in my area? What are the financial benchmarks for retai! bakeries? How much does the average person spend on chiropractic services each year? What is the consumer profile of a beer drinker? How should an independent contractor price their services? What are industry trends in home energy audits? How much of the population is gluten intolerant? How are competitors in my area pricing their product? What are hotel occupancy rates m Snohomish County? What trade groups would assist me in starting my business ? How many graveyard photographers are there in the US? � � � Is Economic Gardening right for my community? �. � _ y� __�, � � ,�:a��•� �<- e , a_ w • Research In depth and actionable • Training Practioners, business owners and referral resources • Technical Assistance Business Development services / � ��rt�n�r.�i��ps �/ � , � �nter r<�� Econoin�� Vitality WESTERN ,,�,,,, ., ,,:.� ,,. ,,:,,�; ,,,,,,,�,;, „� ,,,�., R,,,, � �. Economic Gardening Programs ��an �e co�tly • Determine first: • INho's the audience ? • who will pay? • What scope of services do you wish to offer? � �/ �ESTE xRN �_ .�� <<.� Fconom��. Vitatity � „�� .,,.�,,, . ._,:.��,,,,,��n� • � � Economic Gardening Expansion Pragr�crr�� i�xrre �x�►anc��' thr�c��ra�� i�� U.S. and Canada with varied implementation strategies and techniques �� WESTER�T _; ,« , t�conom�, Vitality �tl7hclbNryrullbcurr:.�n.�. , � ,. .. n,�i..,�t.nFn„iwn,�i��..� �. 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The CommuniYy and School as an Economic DevelopmenY Team Pa�e 1 of 8 . • • W W-06178 1993 The Community and School as an Economic Development Team From Positive Directions for Schools and_Communities, by Lisa Hinz Rural communities and their schools o(ten overlook the resources and opportunities they can o(fer each other. In Minnesota and across the country, school/community economic deve/opment is proving a viable way to serve the school's primary purpose of student education while strengthening the local economy. Rural communities and their schools often overlook the resources and opportunities they can offer each other. As a large employer and purchaser, the school may control a substantial amount of the community's money. The school's classes and facilities are valuable resources for community education and training needs. Teachers and administrators are highly educated people. Students are a resource and opportunity, and often, a significant segment of the community population. Many community members have experience and skills as local entrepreneurs and service-providers. Local businesses may have modern equipment available to teach students new skills. Development professionals may want to train local students in the day-to-day of local business. In Minnesota and across the country, school/community economic development is proving a viable way to serve the school's primary purpose of student education while strengthening the local economy. From school-business partnerships to entrepreneurial curricula, growing numbers of schools and communities are making the connection between economic development and education. This publication outlines the major aspects of school/community economic development. Ideas tested in communities will be profiled, including two schools featured in the video, Seeds of Change: Positive Directions for Schools and Communities. A resource list is also included. Background The main purpose of schools has always been to help students learn. Since the 1960s, a growing mhtml:file://E:A2012-CityCouncilEconomicDevelopmentRetreat�\SESSION 3\The Commun... 5/9/2012 The Community and School as an Economic Development Team Page 2 of 8 recognition of the connection between education and economic development has emerged. Traditionally tied • to vocational skilis training, the idea of education as an economic development tool has expanded to include school-business partnerships and entrepreneurship. In the 1980s, some schools started adopting these ideas in the classroom and community with encouraging results. Through partnerships with business, coursework, and experiences in which students establish businesses, schoollcommunity economic development efforts resulted in meaningful learning experiences and economic benefit to students and community members. The main reason schools and communities pursue economic development programs together is to improve the quality and meaning of education for students. Existing school/community economic development programs have shown these benefts: . Strengthen curricula by linking coursework with experience. This leaming strategy has growing support in education research. . Increase courses available to students as the community becomes the focus of study. . Reduce dropout rates as previously unmotivated students see links between schoolwork and the world outside of school. . Give students the know-how to create their own jobs in their own communities. . Improve students' critical thinking skills, independence, and responsibility as they learn about and face real challenges using local resources and technologies. . Enhance school-commu�ity relations as local professionals provide their expertise to students and • students provide needed goods and services to the community. School/community economic development can also contribute directly to the revitalization and diversification of the community's economy. The school and students create new services and businesses, sometimes in partnership with local businesses. Business owners, farm and town, can play a bigger role in youth education by sharing their knowledge and experience. The community can retains more of its intellectual and tax-based wealth as graduates stay in the community. Program Ideas Communities and schools can work together on economic development in a number of ways. These program ideas have been implemented successfully. . a resource center with computers and a library open after school hours for community use . in-school child care centers . an annually updated community demographic and economic profile used by local planners . an accounting service for shut-ins • . a graphics business using modem computer software . a video inventory business mhtml:file://E:�2012-CiryCouncilGconomicDevelopmentRetreat\SESSION_3\The Commun... 5/9/2012 The Community and School as an Economic Development Team Page 3 of 8 . students working as reporters for the local paper . a bakery that leases the school kitchen and supplies nearby markets with specialty breads . a house-building project . a global studies curriculum that draws students and teachers from around the world . a telecommunications business in cooperation with a local technical college . a hand-painted clothing and crafts business that markets through a store, craft shows, and mail-order Research shows that most efforts are multi-disciplinary and exist primarily in high schools, although there are successful examples from elementary grades. All programs give classroom credit and operate during the school day, although some also offer wages, primarily for student work done after school hours. Business- creation programs include for-profit and not-for-profit organizations offering goods or services locally or outside the local area through computer networking and mail-order. Many programs operate as school- controlled efforts. Some recent programs emphasize student development of businesses that students take with them when they graduate. All programs reflect local context and options. Program Organization Organization of a program depends on resources and [he kind of development projects upon which the school and community agree. Although each type of program has distinct features, many schools and communities use combinations of several to take full advantage of their local resources. The common programs are as follows: . school-business partnerships . school-based businesses . school-incubated businesses . entrepreneurial curricula School-Business Partnership A School-Business Partnership is an agreement between a school and business to define and work together to imp�ove educationa/opportunities, benefit business, and support broader community goals. School-business partnerships can help schools develop new courses taught by professional business people on business management and planning. Such partnerships can provide modern equipment through donation or purchase at reduced price. They create or improve opportunities for students to see classroom principles applied. Businesses receive public recognition and a chance to use their skills and knowledge to educate youth. Some businesses donate equipment and share space with the school for employee training or to give students experience with new technologies. Students acquire work skills and insights about the local economy that may encourage them to remain in the community aker their formal education is completed. Examples: School-Business Partnership mhnnl:file://E:A2012-CityCouncilEconomicDevelopmentRetreat\SESSION 3\The Commun... 5/9/2013 The Community and School as an Economic Development Team Page 4 of 8 Delavan, Minnesota's elementary school is taking advantage of the Iocal community and business resources • to form an agri-science school, a national first. Study focuses on the local agricultural economy for Kindergarten through sixth grade students. Family farms, local banks, and local and multi-national agri- businesses contribute products and knowledge which help students understand their community. Activities include visiting local farms and businesses with lessons in local and global agri-business; class farms with business-do�ated seeds and instruction; and student businesses with start-up loans from a local bank. S[udents gain insights and skills from community examples and local businesses provide meaningful support to this innovative school. A Cook County elementary school leases space to a clinic, an insurance agency, a youth hostel, and a foundation. In Henderson, a local technology firm donates computers, televisions and staff to teach students and teachers. School-Based Business A School-Based Business is a school-controlled and-owned enterprise in which students gain experience as workers and managers, and profits go to the school. School-based businesses add to the stock of local enterprises whether they serve the school population or the broader community. They improve the skills of the youth who will take a more active part in community life as adults. Such businesses provide an ongoing, supervised business and learning environment. Research suggests that students' understanding improves as they apply coursework to authentic challenges • with guidance from teachers and advisors. They provide a real-world focus to the school curriculum. The school-based business is not a fund-raisi�g group nor a vocational program. At best, it is an interdisciplinary program which matches the talents and creativity of students with opportunities in the community. Examples: School-Based Business Several high schools in Minnesota run in-school child care programs during the school day. In addition to learning first-hand about child development, students sometimes manage the business aspects of the program, directly applying their math skills and communication skills. The community gets a needed service, often conveniently located to homes and workplaces. At some schools, students design a house, get building materials, and then build and sell the house. Profits are used for other school programs. In other states, students help low-income people apply for affordable housing that meets federal government guidelines. Interviewing, writing, math, and reading skills are used to serve community needs. School-Incubated Business A School-Incubated Business teaches students the skills to research, plan, establish, operate, and own economically-viab/e businesses that they continue on their own after graduation. School-incubated businesses foster community economic development by helping students become • entrepreneurs in their own communities. The school provides classes, teachers, and occasionally, facilities to realize students' business ideas. Through coursework and practice, students learn to analyze the community's business needs using interviews, surveys, and focus groups. Business ideas are then mhtml:file://E:A2012-CityCouncilEconomicDevelopmentRetreat\SESSION_3\The Commun... 5/9/2012 The Community and School as an Economic Development Team Page 5 of 8 researched by students with advice and support from business and development professionals. The most viable ideas are fleshed out in business plans, and financing is acquired. Local or regional development funds, companies, and investors are potential sources of financing. Under guidance from teachers and local professionals, students start the business while still in school. This eariy support is often crucial to the busi�ess's success. After graduation, the business becomes a permanent part of the community's economic base. Example: School-Incubated Business High school students in Rothsay, MN formed a corporation in order to own and operate local businesses. When the town grocery store went out of business in 1991, the corporation bought it. Students deal firsthand with the challenges of business operation by managing and staffing the store while taking classes to learn needed skills in accounting, marketing, meat cutting, and management. Teachers and community professionals, including retirees, provide on-the-job training and classroom discussion for which students receive course credits. Entrepreneurial Curriculum An Entrepreneurial Curriculum fosters fhe entrepreneurial qualities of critica/thinking, innovation, and independence as desrred educationa/outcomes for all students throughout the school's curriculum. Partnerships, school-based businesses, and school-incubated businesses can all contribute to the entrepreneurial approach. Integrated coursework and hands-on experience form the basis of students' learning at school. An entrepreneurial curriculum is the broadest approach to school/community economic development. The school and the community work as partners for the educational benefit and economic development of both. In some cases, two or more schools have collaborated to share community and school resources and to enlarge the market area for student businesses. Example: Entrepreneuria! Curricu/um At Belle Fourche, South Dakota's high school, the entire curriculum emphasizes student entrepreneurship through coursework, creation of businesses, and a school environment that supports student initiative. As a result, a number of businesses have been started. Old World Foods makes and sells ethnic breads to local stores. The Breakfast Club restaurant is operated in the high school with earnings returned to the student owners. Students also learn about business and the community by working as reporters for the local paper, and by writing articles reviewed by teachers and newspaper editors. Home economics, art, social studies, journalism, and business coursework teaches students the skills they need to run their businesses. Starting a School/Community Economic Development Program Should we do it? People in the school and community need to decide whether to include economic development as a part of the school's mission. The decision should account for local interest and attitudes toward making a stronger connection between school and community. Since resources are often limited, a program will probably require the school to prioritize its resources to support a school/community economic development program. How do we do it? mhtmLtile://E:A2012-CiryCouncilEconomicDevelopmentRetreat\SESSION_3\The Commun... 5/9/2012 The Community and School as an Economic Development Team Page G of 8 As with the decision to develop a program, both school and community people should be involved in • defining, planning, and implementing the program. Although conflict may arise, broad involvement fosters stronger support over time. The resource list has more detaiied information for design and training needs. Who needs to be involved? The checklist below covers a broad range of interests and talents to include in the planning and ongoing support of a program. Teachers and community people who work closely to develop the program and work with students are especially important. . Teachers, administrators, school boards . Government, church, arts, and civic leaders . Business people from businesses of all sizes. rural and town . Students . Community and economic development professionals at the local, county, and regional levels Development should include business and economic planners as well as professionals in housing, social services, historic preservation, agricultural and natural resources . Nearby schools A cluster of schools with such programs can create more opportunities for students and local communities and broaden the market for businesses. • What about money? Research suggests that reallocation of existing resources, not additional funding, is a successful strategy. Indeed, where additional money is needed, education and development expert Paul Nachtigal has found local funding arrangements more sustainable than those involving large amounts of money from donors outside the community. What are the legal concerns? Legal issues to address are: the safety and supervision of students; compliance with state and federal laws on labor conditions and wages; and assessment and fulfillment of insurance requirements. Clear guidelines spelling out the relationship between the school and private business are very useful. The school attorney should be consulted on all contracts. What are common problems and solutions? . Primary emphasis should be on education as the goal, nol business operation. Projects that are repetitive or use kids as cheap labor are not appropriate. . Existing businesses may perceive competition. School-based and school-incubated businesses should strive to complement or fill niches not filled by other businesses. Negotiation and subcontracting with existing businesses can eliminate competition and enhance both businesses. . Teachers need to change their roles from experts to coaches with fewer lectures and more • conversations. mhtml:file://E:A2012-CityCouncilEconomicDcvelopmentRetreat\SGSSION_3\The Commun... 5/9/2012 The Community and School as an Lcunomic Develupment Team Page 7 of 8 Summary While education is still the primary goal of the school, development becomes the means to reaching the goal. Subject areas such as math, science, English, and the arts are integrated to support this education- through-development orientation. School-business partnerships, school-based businesses, and school- incubated businesses may form all or part of the curriculum. The entrepreneurial curriculum can be the focus of an entire school or a specialized program in a school. These approaches can help schools and communities work together for mutual benefits. Resources Buildrng Communities irom Within: Schools and Economic Development, Communicating for Agriculture, P.O. Box 667, Fergus Falls, MN 56538, 1-800-432-3276 Busrness Retention and Expansion Follow-up (Video and Print Package), George Morse, Minnesota Extension Service, University of Minnesota, Department of Agriculture and Applied Economics, 1994 Buford Avenue, St. Paul, MN 55108, (612) 625-9769 Noteworthy: Rural Schools and Community Development, Mid-Continent Regional Educational Laboratory, Publications Department, 4709 Belleview Avenue, Kansas, MO 64112, (816) 756-2401. Students as Ent�epreneurs: Building Academic Skills and Strengthening Local Economies, Center for School Change, Humphrey Institute of Public Affairs, University of Minnesota. 301 19th Avenue South, Minneapolis, MN 55455 (612)626-1834. Youth Entrepreneurship Seminar(Y.E.S.), (curriculum on business skills for youth ages 11-16), Minnesota Extension Service, University of Minnesota, Extension Store, 20 Coffey Hall, 1420 Eckles Avenue, St. Paul, MN, 55108, (612)625-8173. Bibliography Clarke, Jessica and Joe Nathan, Sharing Facilities: Schools and Communities Working Together, Center for School Change, Hu6ert Humphrey Institute of Public Affairs, University of Minnesota, Minneapolis, Minnesota 1992. DeLargy, Paul, Keigh Hubel, Vicki Luther, and Milan Wall, Ed. Building Communities from Within: Schools and Economic Development, Communicating for Agriculture, Inc., Fergus Falls, Minnesota, 1992. Hinz, Lisa, Students as Entrepreneurs: Building Academic Skills and Strengthening Local Economies, Center for School Change, Hubert H. Humphrey Institute of Public Affairs, University of Minnesota, Minneapolis, Minnesota 1992. Mid-Continent Regional Education Laboratory, Noteworthy Rural Schoo/s and Community Development, irilitml:file://E:A2012-CityCouncilGconomicDevelopmentRetreat\SF,SSION_3\The Commun... 5/9/2012 The Community and School as an Economic Development Team Page S of 8 Mid-Continent Regional Educational Laboratory, Kansas City, Missouri, 1989. Mid-Continent Regional Education Laboratory,Redesigning Rura/Education, Mid-Continent Regional Educational Laboratory, Kansas City, Missouri, 1989. Nachtigal, Paul, Rura/Education: In Search o(A Better Way , Westview Press, Boulder, Colorado, 1982. Warden, Judy. Establishing Partnerships Between the Business Community and Rural Schools, ERIC Clearinghouse on Rural Education and Small Schools, P. 3-4, Las Cruces, New Mexico, 1986. Back to Table of Contents.... Support for this publication was provided by the Minnesota Extension Service's Project Future in cooperation with the Center for School Change, Hubert H. Humphrey Institute, University of Minnesota, and the Blandin Foundation. In accordance with the Americans with Disabilities Act,this material is available in alternative formats upon request. Please contact your University of Minnesota Extension offce or the Extension Store at(800)876-8636. . .�,{nn�s�I Il�e UiuveuJy ul fAinnesala PII riylils ieauue� . �� . .niyolMinnesniarsar.equalopporluniWeelwalnionoemObyer • mhtml:tile:/iE:A2012-CityCouncilF.conomicDevelopmentRetreat\SESSION_3\The Commw�... 5/9/2012 w 1 • Manufacturing The third industrial revolution The digitisation of manufacturing will transform the way goods are made—and change the politics of jobs too ;� .;, -. _ ��'r- - " „ � � `'{, , �� ; � !r . � � �� ' a ' i� r� � �i ��'_ ��_ ;�8 � � �•� �' �S /� _ _ ____, � _ ';. - ' 'l-'1"I, ' `' „{.' . ' �+J�.a ._'Y:.:, . �.- �/ THE first industrial revolution beg��,� in Britain in the late 18th century, with the mechanisation of the textile industry. Tasks previously done laboriously by hand in hundreds of weavers' cottages were brought together in a single cotton mill, and the factory was born. The second industrial revolution came in the early 20th century, when Henry Ford mastered the moving assembly line and ushered in the age of mass production. The first two industrial revolutions made people richer and more urban. Now a third revolution is under way. Manufacturing is going digital. As this week's special report argues, this could change not just business, but much else besides. A number of remarkable technologies are converging: clever software, novel materials, more dexterous robots, new processes (notably three-dimensional printing) and a whole range of web-based services. The factory of the past was based on cranking out zillions of identical products: Ford famously said that car-buyers could have any colour they liked, as long as it was black. But the cost of producing much smaller batches of a wider variety, with each product tailored precisely to each customer's whims, is falling. The factory of the future will focus on mass customisation—and may look more like those weavers' cottages than Ford's assembly line. i • Towards a tha�c� dimensio¢� The old way of making things involved taking lots of parts and screwing or welding them together. Now a product can be designed on a computer and "printed" on a 3D printer, which creates a solid object by building up successive layers of material. The digital design can be tweaked with a few mouseclicks. The 3D printer can run unattended, and can make many things which are too complex for a traditional factory to handle. In time, these amazing machines may be able to make almost anything, anywhere—from your garage to an African village. The applications of 3D printing are especially mind-boggling. Already, hearing aids and high-tech parts of military jets are being printed in customised shapes. The geography of supply chains will change. An engineer working in the middle of a desert who finds he lacks a certain tool no longer has to have it delivered from the nearest city. He can simply download the design and print it. The days when projects ground to a halt for want of a piece of kit, or when customers complained that they could no longer find spare parts for things they had bought, will one day seem quaint. Other changes are nearly as momentous. New materials are lighter, stronger and more durable than the old ones. Carbon fibre is replacing steel and aluminium in products ranging from aeroplanes to mountain bikes. New techniques let engineers shape objects at a tiny scale. Nanotechnology is giving products enhanced features, such as bandages that help heal cuts, engines that run more efficiently and crockery that cleans • more easily. Genetically engineered viruses are being developed to make items such as batteries. And with the internet allowing ever more designers to collaborate on new products, the barriers to entry are falling. Ford needed heaps of capital to build his colossal River Rouge factory; his modern equivalent can start with little besides a laptop and a hunger to invent. Like all revolutions, this one will be disruptive. Digital technology has already rocked the media and retailing industries, just as cotton mills crushed hand looms and the Model T put farriers out of work. Many people will look at the factories of the future and shudder. They will not be full of grimy machines manned by men in oify overalls. Many will be squeaky clean—and almost deserted. Some carmakers already produce twice as many vehicles per employee as they did only a decade or so ago. Most jobs will not be on the factory floor but in the offices nearby, which will be full of designers, engineers, IT specialists, logistics experts, marketing staff and other professionals. The manufacturing jobs of the future will require more skills. Many dull, repetitive tasks will become obsolete: you no longer need riveters when a product has no rivets. The revolution will affect not only how things are made, but where. Factories used to move to low-wage countries to curb labour costs. But labour costs are growing less and less important: a $499 first-generation iPad included only about $33 of manufacturing labour, of which the final assembly in China accounted for just $8. Offshore production is increasingly moving back to rich countries not because Chinese wages are rising, but because companies now want to be closer to their customers so that they can respond more quickly to changes in demand. And some products are so sophisticated that it • helps to have the people who design them and the people who make them in the same 2 place. The Boston Consulting Group reckons that in areas such as transport, computers, fabricated metals and machinery, 10-30°/o of the goods that America now imports from China could be made at home by 2020, boosting American output by $20 billion-55 billion a year. The shock of the new Consumers will have little difficulty adapting to the new age of better products, swiftly delivered. Governments, however, may find it harder. Their instinct is to protect industries and companies that already exist, not the upstarts that would destroy them. They shower old factories with subsidies and bully bosses who want to move production abroad. They spend billions backing the new technologies which they, in their wisdom, think will prevail. And they cling to a romantic belief that manufacturing is superior to services, let alone finance. None of this makes sense. The lines between manufacturing and services are blurring. Rolls-Royce no longer sells jet engines; it sells the hours that each engine is actually thrusting an aeroplane through the sky. Governments have always been lousy at picking winners, and they are likely to become more so, as legions of entrepreneurs and tinkerers swap designs online, turn them into products at home and market them globally from a garage. As the revolution rages, governments should stick to the basics: better schools for a skilled workforce, clear rules and a level playing field for enterprises of all kinds. Leave the rest to the revolutionaries. 3 City of Auburn • Office of Economic Development 2012 Business Plan Auburn's Vision: A city of regional significance, proud of its small town heritage as well as the diversity of its people and neighborhoods, Auburn offers an opportunity for people of all ages to enjoy life. Citv Mission: To provide a service-oriented government that meets the needs of our citizens and business community through efficient and professional management with responsive and accessible leadership. 2D11 Business Reoort: I The past calendar year has realized significant success in Auburn's economic developmen[. Beginning last February, a traditional and comprehensive program of was established for the first time which focused on all areas including business development, growth, and attraction. Our work year began with an initial analysis of assets; strategic plans were then developed and launched; business contacts/resources/and partnerships were established; and many successes were realized including: • 180 new Auburn businesses; • 1,209 new jobs ; • A 6 percent�6%) increase in sales tax, business license, and construction permit revenues; • • New business attradions are under contract which will lead to 2012 benefits; • Education and Business Assistance Programs launched including the completion of 12 education forums and on-going business assistance; • New business incentives including a Construction Sales Tax Refund Program • The development of a comprehensive business plan for the Aubum Center for Emergent Bu si n ess. 2012 Goals for Economic Develooment: The 2012 goals for the Office of Economic Development will consist of activities that inaease the standard of living within our City through sustained growth and maximization of our economy. To create jobs through market enhancements which improve the overall quality of life. Our program will build on last years improvements in scope, induding process and policies that help improvc the overall economic and so�ial well-being of our citizens. Marketins: This year, a major focus for the Office of Economic Development will be business recruitment as we continue to build on the attributes ot Auburn. Creating an active diswssion throughout the region regarding the viability of Aubum as a robust business center will continue to be an essential element of our business strategy and what we refer to as"Buzz& Brand." Branding suth as Auburn—More 7han You /mogined is very effective, and this type of a�tive marketing needs to occur on every project launched (and completed)throughout each and every Department and • 1 Gry of Fu6um,Office ol Fconom¢Uevelopment;13T;BwmessPlan2012 City of Auburn Office of Economic Development 2012 Business Plan Business Enterprise within the City as well as throughout our business community. Auburn Junction and our Historic Downtown are Planning Department projects which will be branded nationally as will the Auburn Center forEmergent Business. These are just 3 examples of the branding opportunities which will be actively pressed forward. The branding of all city services will help further the buzz and excitement which will resonate as synergy is created. Organized media campaigns will be launched this year in national trade magazines and the use of routing press releases regarding the great work which is being accomplished locally and regionally will all combine to spread the word that Auburn is More Thon You Imogined! Our Strete¢ic Plan-2012: Economic development requires the development, application and marketing of a real knowledge of the jurisdiction, induding its history, demographics, assets, resources, etc. Combining this knowledge with our own professional experience has helped darify our course of action over the past year and ultimately lead to the meaningful results we have realized. In addition to active marketing, our developed strategy for 2012 on how to continue to create meaningful economic development for the City of Auburn will build on our acquired knowledge from the year past and will be applied to the following outline and activities: A) Business Development;(Stort Your BusinessJ: Within [his broad category, our focus will be Yo assist in the creotion of new small businesses that fit particularly well within our downtown dis[rid(DUCJ and within our manufacturing sedors (Aubum Center for Emergent Business). Marketing, Educotion, and on-going business incentives are key. • Marketing: o Weekly—On-going Business Assistance Program • Education: : Business Planning Assistance How to Start Your Own Small Business 101 _ Web Applications for Business = Emergency Planning for Business. "Will Your poors Be Open?" _ Making Technology Work For You • eusiness Incentives o Deferment of Impact Fees to the occupancy of the project o Store Front Improvement Program o Construdion Sales Tax Rebate o Maintaining Development Fees at 2009 Levels 2 City of Au6urn,Office of Economic Development;BT;BusinessPlan2012 City of Auburn � Office of Economic Development 2012 Business Plan B) Business Retention/Expansion;(Grow Your BusinessJ: Assisting the businesses within Auburn to grow and expand is the best appartunity to aid the overall quolity of life for our Auburn citizens. Our businesses provide thejobs and services that help moke our community robust and vital. To assist on-going business expansion we will continue to our program of education, partnership/introduction, and incentives [o encourage growth. • Education: o On-going Program of Work Force Development o Making Technology Work for You = Web Applications for Business o Emergency Planning for Business. "Will Your poors Be Open?" ,, Wetlands, Floodplains and Development = A Focus on Downtown (Downtown Roundtable) o SBA Loan Programs • Cooperative Partnering: _ Creation of Learning Partners (utilizing the knowledge which exists within the • community to provide cooperative self-education opportunities). Introduction of Research Partnerships in Cooperation with Private Sector Partners to promote new ideas and to create new products. Creating Relationships = Utilizing the Experience Within Private-Sedor Business to Bring Research Ideas to Practical Reality and Ultimately to Market. • Incentives: Proposed exemption from the Undergrounding of Utility Lines in Industrial Areas C) Business Attrection/Recruitment; (Relocote Your BusinessJ: • Marketing: o Media _ Press Releases Civic Activities Full implementation of the Aubum Property Locator System = Social Media (Twitter, Facebook, App. Developmen[) • Business Associations/Agencies: e Department of Commerce o Enterprise Seattle Department of Energy Partnership for Prosperity • 3 City of Auburn,Office et Emnomic Development;BT;gi�sinessPlan2072 City of Auburn Office of Economic Development 2012 Business Plan Puget Sound Regional Council (PSRC) � King County Aerospace Alliance o World Trade Association o Aubum Chamber of Commerce o The Auburn Downtown Association (TADA) _ Commercial Real Estate Brokers o Business to Business Development through the Sister Cities Program D) Workforce Development& Research • Washington State Universiry • Green River Community College • Auburn High School District • Veterans and Disabled Training Programs E) Day-to-Day Contact • Early Detection &Action on Leads • Aggressive personalized contact (face-to-face contact/walking the beat) • The Development and Use of Electronic Applications 4 City of Aubum,Office of Emnomic Developmenq BT;BusinessPlan2012 i � � � Please'vv�ite clown your tFiougFit"s andi0eas'in advance of the City Council retreat and be prepared to share and discuss SESSION 3—SETTING THE VISIONING STAGE Four Pillars of Economic Develooment&Aoolica4ion to Auburn General Example Aubum Specific Examples (TO BE FILLED IN BY INDIVIDUAL COUNCILMEMBERS Built Capital M Street (the things that we buiid — buildings, roads, pipes, etc) • • ' • Please write down your thoughts and ideas in advance of the City Council retreat and be prepare:d to share and discuss SESSION 3—SETTING THE VISIONING STAGE Four Pillars of Economic Develonment-&Anolication toAubum General Example Auburn Speci£c Examples (TO BE FILLED IN BY INDIVIDUAL COUNCILMEMBERS Human Aubum School District Capital (heafth and health care, workfo�ce, experiences, skills, talents, education and interests) • � � ♦ Please wYite down your thoughts and idea"s in advance of the City Council retreat and be prepared to s.ha.re and discuss SESSION 3-SETTING THE VISIONING STAGE Four Pillars of Economic Develooment&Aoolication to Aubum General Example Auburn Specific Examples (TO BE FILLED IN BY INDIVIDUAL COUNCILMEMBERS Naturai Mill Creek Cap'ital (natural features such as geology, topography, climate, ecosystems and w.ater sysfems) • s - • Please write down your thoughts and ideas in advance of the City Councii retreat and be prepared to share and discuss SESSION 3—SETTING THE VISIONING STAGE. Four Pillars of Economic Develooment 8 Aoolication to Auburn Generaf Example Auburn SpeciFc Examples (TO BE FILLED IN BY INDIVIDUAL COUNCILMEMBERS Social Capital Auburn Valley Creative - (families, Arts friends, languages, culture, social organizations, heritage, arts and culture, communicafion, _ _ _ . trust, social services social groupings, laws and societal structures) Much reseazch has been done related to the economic value that cities and urban residents receive from their park and re.creation systems. Much of this reseazch has been conducted by the "Trust for Public Land". T'he ramifications of this work have galvanized the city pazks movement nationally while also providing pragmatic data in the specific cities where the research has been carried out. The reseazch in Measuring the Economic Yalue of a City Park System provides an explanatory overview of the process the Center for City Pazk Excellence uses in determining dollar value by way of seven attributes: . Property value • Tourism • D'uect use • Health • Community cohesion • Clean water • Clean air Numerous communities have contracted with TPL for an analysis of the"economic value"and I have enclosed a copy of the report from Wilmington, Delaware. Willingliam is a city of 7Q000 and a suburb of Washington DC. While the array of recrearion and parks venues az8 different than what is in Aubum, I believe you will see that the value of Pazks and a Healthy Community is impressive both as driver of the economy and the attitudes of a community. Daryl Faber • ' • • � � � � � � y ,. .�- ,;�..y'-._�rx � � � � ��'� Q�. , a„ , .4 ,� � � � �. .. ;'.1�� .- �y 'k i�i _. �� ' - I ; : V � , . ` 'W./.. '" - ~..1 . .� . .� , . '.� . . � '�.�: � z�- . / � ': � .•. .r- i ( k.1�si'_ \ �� a + 'j/' � � �"- - � V � � —� , � � ��1 I� Ji . � ' •� � ,.r �i.,� _ 1 �r.., l ' '�' r.. ' �Y ' ..( t � ' � � � /i.� . y �.v.'� . �� 11 I'i� . ��g'��I�C�1� - r -' � r . �.^� i ` � � ' �.� .�+ �� „ , , ,� � y il -Li`�3 P �rF y�{ �'V� ! 1 � � '� c y--r ' r [ b� R�� 1 ��; �r � � � � f�� I��i�� . i ' Ja I �r � ,\ �r � +�F � �i I � l .�1�� Y'�• I ; S�$'I•: � �Iia'�� t-t _ � �, ' � 5 ry � e ' i .y 'lrttii� G�� . . ( ..-;4 �� L � � 1 J , ti' �. \':: � � �`.. � J �y ' a a. I � ��..�� i - f/ . 1 7 � i) � � 1 rr�.r. C � [AYQt . r 'S .r. ,a„� — ' ... ( , `'`. - �-� � �Jg! ' _ � ..k' O L� c l] o ❑ u, �N t-'� la '� �• z,,•; ,+e, .�',�.t� � e � _ i i�. -r 'T+ `_< r _;1� ��`'#'r �,� �` t�F l��h�"` 7� ! ��3 ' � �V� �q J"v r�3 r -f\ ��.. �� f� `_ ` l�t� +.''a ;.�,',�.�� C t�Li �a ( U .r r �� t ��^",- .� _-�.m�o� �:t{ � _t� ^ ,�.'/�. .` � �o, � t l^ 1. I " . c '.y � � �_1\� � _r �x,o. '" , ��_. E � - _,a �� , � � • � • • • ' Cover Phoms:Scott Pazket Qeft),Nita Wintet(righd MEASURING THE ECONOMIC VALUE Of ll CITY PARK SYSTEM WRITTEN BY Peter Harnik and Ben Welle . ADDITIONALASSISTANCE BY Linda S.Keenan PRODUCED UNDER A GRANT FROM The Graham Foundation for Advanced Studies in the Fine Arts,Chicago The initial reseazch that led to this report was funded by the U.S. Forest Service under an Innovation Grant from the National Urban and Community ForestryAdvisory Conncil and by gcants from the Ban Foundation and the Marpat Foundation. OO zoo9 The Trust for Public Land TABLE OF CONTENTS INTRODUCTION 1 HEDONIC (PROPERTY�VALUE I ' Park Value inAction:Increasing Property Values in Washington, D.C. TOURISM VALUE 3 Park Valtte inAction:StimulatingTour'tsm in San Diego DIRECT USE VALUE 5 Park Value inAction:Providing Direct Use Value in Boston HEALTH VALUE � Park Value mAction:Promoting Human Health in Sacramento COMMUNITY COHESION VALUE C� Park Value inAction.•Stimulating Community Cohesion in Philadelphia REDUGI�NG THE COST OF MANAGI�NG URBAN STORMWATER II Park Value inAnion:Cutting Stormwater Costs in Philadelphia REMOVAL OF AIR POLLUTION BY VEGETATION Ij Park Value inAction:Cutting Air Pollution Costs in Washington,D.C, CONCLUSION IS APPENDICES IF) INTRODUCTION Ciries aze economic entities.They are made up of structures entwined with open space. Successfiil communities have a sufficient number of private homes and commercial and retail establishments to house their inhabitants and give them places to produce and consume goods.Cities also have public buildings—libraries,hospitals,azenas,city halls—for culture, health,and public discourse.They have lineaz corridors—streets and sidewalks—for transpor tation.And they have a range of other pub6c spaces—pazks,plazas,trails,sometimes natural, sometimes almost fully paved—for recreation,health provision,tourism,sunlight,rainwater retendon,air pollution removal,natural beauty,and views. In snccessful cities the equation works.Private and public spaces animate each other with the sum geady surpassing the parcs. In unsuccessfiil communities some aspect of the relationship is awry:production,retail,or transponation may be inadequate;housing may be insufficient; or the public realm might be too small or too uninspiring. In zoo3,The Trust for Public Iand's Center for City Park Excellence gathered two dozen park eacperts and economists in Philadelphia for a colloquiuin to analyze how park systems economically benefit cities.Based on this conversation and subsequent consultation with other leading economists and academics,the center identified seven attribdtes of city pazk systems that provide economic value and aze measurable. Not every aspect of a park system can be quantified.For instance,the mental health value of a walk in the woods is not known,and there is no agreed-upon methodology forvaluing the cazbon sequestration value of a city pazk.But seven major factors—prapersy value,taurirm, dlred icre,bea[th community cobeiion,ilean vwater,and clean air—have been enumerated.While the science of city pazk economics is still in its infanry,TPL has worked ro cazefully consider and analyze these values.Our report sets fdrth a summary of this methodology. Two of the factors provide a city with dinct income to its treasury.The first factor is increased property tax from the inciease in ptoperty value because of pro�umity to pazks.(This is also called"hedonic value"by economists.)The second is increased sales ta�c on spending by tour- ists who visit primarily because of the cit}�s pazks.Beyond the tae receipts,these factors also I bolster the collective wealtJ�of residents through property ap"pceciation and tourism revenue.) ' Three other factors provide city residents with dinctsavings: By far the lazgest amount stems from residents'use of the city�s free parkland and free(or low-cost)recreation opportuni- ties,which saves them from having to purchase these items in the marketplace.The second is the health benefit—savings in medical costs—due to the beneficial aspects of�ercise in the parks.And the third is the comTnanity cohesion benefit of people banding together to save _ . _. and improve their neighborhood pazks.This"know-your-neighbor"social capital helps wazd off antisocial problems that would otherwise wst thecity mo�e in police and fire protection, prisons,counseling,and rehabilitation. The last two faaors provide envirnnmental savings.The lazger involves water pollution reduction—tNe retention of rainfall by the pazk system's tiees,bushes,and soil,thus cptting the cost of treating stormwater.The other concerns air pollution—the fact that pazk trees and shrubs absorba vaziety of air pollutants. In the following chapters,after describing the value factor and the rationale for calculating it, we provide a real-life example of the mathematical outcome,based on the first five test case"s undertaken in this program—the cities of Washington,D.C.,San Diego,Boston,Sacramento, and Philadelphia. Peter Harnik Director,Center for City Park Excellence March xoo9 INCREASING HEDONIC �PROPERTY� VALUE More than 3o studies have shown that parks have a posiciye impact on nearby residential property values.Other things being equal,most people aze willing to pay morefor a home closeto a nice pazk. Economists call this phenomenon"hedonic value."(I-Iedonic value also comes into playwithother ame- nities such as schools,Gbraries,police stations,and transit stops.Theoretically,commercial office space also exhibits the hedonic principle;unforcunately,no study has yet been carried out to qvantify it:) Hedonic value is affected primarily by two factors:distance from the pazk and the quality of the park itself.While proximate valde("neazby-ness'�can be measured up to z,000 feet from a lazge pazk,most of the value is within the first Soo feet In the interest of being conservative,we have limited our valua- tion to this shorter distance.Moreover,people's desire to live neaz a pazk depends on characteristics of the park.Beadtiful natural resource parks with great[rees,trails,meadows,and gardens aze markedly valuable.Other pazks with excellent recreational facilities aze also desirable(although sometimes the greatest property value is a block or two away if there aze issues of noise,lights,and parkinp�.I.ess attractive or poorly maintained parks are only marginally valuable.And pazks with frighteping or dangerous aspects can reduce neazby propertyvalues. Determining an accurate pazk by-pazk,house-by-house property value for a city is technically feuible but prohibitively time-consuming and costly.Therefore,we formulated a methodology to arrive at a Teasonable estimate.Compnterized mapping cechnology known as Geogaphic Information Systems (GIS)was used to identify all resi- dential properties within Soo feet of — �-•- �' ' every significant pazk.("Significant" - is defined u one acre or more;"pazk" - „ includes every pazk in the city,even if � owned by a county,state,federal,or other pubGc agenry.) � Unfortunately,because of data and methodology problems,it is '. �t-n difficult to determine exactly which ,�'.-`,� of a city�s parks confer"strongly - ��"- C � positive,""slightly positive,"and � � `' � �. :. .�.—� �— '�l "negative"valuetosunounding �� . �_�. •. ` \ residences.Research into quantifying i ' -�\� ��.-�_ . ark uali continues•in the interim cd�c.mi.. P 9 TY WC f18VC Cf105Ct1 LO 3551gI1 t}IC COrtSCNB- Mendian Hill Park in Washington,D.C.pmvides eztra value ro the Mousands tive value of S percent as the amount ef dwelling units sunounding it,and to the ciry ixseH thmugh higher pmperty taz receipts. that parkland adds to the assessed value of all dwellings within Soo feet of pazks.(The preponderance of studies has revealed that excellent parks tend to add iq percent to the value of a proximate dwelling;on the other hand,problematic pazks can subtract S percent of home value.Taking an aVerage of this range yields the q percent value that will be used until a pazk quality methodology can be established.) Once determined,the total assessed value of properpes neaz pazks is multiplied by S percent and then by the taz rate,yielding the increase in tax dollazs attribdtable to park proximity. 1 • • • � oa • o �, • ��- ��, . • � ar� - The most famous park in Washington,D.C.may be the National Mall with its museums and governmrnt agencia,but it is thrmany ocher pazks—hom fiuge Rock Cieek P.azk to , tiny Logan Circle,the ones surrounded by homes—that provide the city with the greatest property value benefit. The city's abundance of green has placed much of Washingtons real estate either direcrly abutting or withia a stone's throw of a pazk.Tlus makes it coavenient for the capital's deai- zens to toss a ball azound,enjoy a picnic,oi just get a pleasurable view.The city's coffers are also reaping the benefits. Getting to this number is fairly straightforward.Using GIS in combination with the cit}�s � assessment data,we fmd t6at the value af all residential propemes(apaztments,condo- �, miniums,row houses,and detached hocnes)within foo feet of a pazk is almost$zq billion � (in zqob dollars).Using aa average pazk valiie beciefit of g percent,we seatkiat the;ofal amount that parks increased propertyvalue is just under$�.a billion.Using the effective annual tax race of o.s8 percrnt,we find thac Washington reaped an additional$6;�sx•��im properry tax because of parks in zoo6. The Hedonic(Property)Value of Washingtart; D.C.'s Parks Value of properties within 500 feet ofparks $23,977,160,000 I� Assumed averagevalue of a park 5% Value of properties attributed to parks $7;798,858,025 Effediveannual residential tax rate 0:58% - Mnual pmperty tax.capture from value of $6,453,377 properfy due to parks Broperty values were�obtained from the District ofLolumbia 2 INCOME FROM OUT-OF TOWN PARK VISITOR SPENDING �TOURISTS� Thbugh not always recognized,pazks play a major role in a cit}�s tourism economy.Some such as Independence National Historic Pazk in Philadelphia,Cennal Pazk in New York,Millennium Puk in Chicago,orBalboa Pazk in San Diego aze tourist attractions by themselves.Others aze simply great venues for festi4als,sports events,even demonstrations.Read any newspaper's travel section and you'll usually see at least one puk among the"to see"picks. Calculating pazks'contribution requires knowing the number of park tourists and their spending. Unfortunately,most cities have little data on park visitation or visitor origin.(By definition,local users ue not tourists—any spending tHey do at or neaz the pazk is money not spent locally some- where else,such as in their immediate neighborhood.)Sometimes there are tourism numbers for one particulazly significant park;but it is not possible to apply these numbers to the rest of the cit}�s parks.To get around these missing data,visitation numbers and expenditures from other sources must be obtained and then used ro make an educated guess about trips that aze taken entirely or substantially because of pazks or a park. First,we estimate the number of pazk tourists.Then we reduce this to an estimate of the number of park tourists who came because of the parks.Aker dividing that number into day visitors(who spend less)and overnighters(who spend more),we multiply these numbers by the average spend- ing per tourist per day(a figure that is usually well known by the local convention and visitors bureau).Finally,tax revenue to the ciry can be estimated by mpltiplying pazk tourism spending - by the tax rate. � �' '' : i ir �on Sull�v.n bww_pdphmo.wgl Beautiful Balboa Park—with its zoo,botanical gardans,numerous museums, sports felds,and poblic events—is the single biggest tourist amac[ion in San Diego. 3 ' ' ' ; Q [L`J � a �� ao i � Avisit xo San Diego is not complexe if it'doesdt include a pazk—whetlier that's a beach,a i harbor pazk;O(d Town State Park,IVlusion Bay or i,zoo-acre Balboa Park.In fact,when tlie NeioYork Timu Featured San Diego in its"36 Hours""travel series,it mrntioned all of the above places.The role of pazks in the cit}�s tourism economy is huge. Spertding by Tourists Who Came Because of Parks,San Diego, 2006 Ovemight�sitors � Ovemightvisitors to San Diego 16,050,000 OvernigKt visitors who visited parks(20%") 3,21A,000 . - Estimated 26°/a"who disited�because of paiks 834,600 Spending.p"er overnigfit 4isitor p'er day $107 Spending of overnight visitors because of parks $87;302;200 Day vsitors Ovemight Jisitors.fo San Diego 11�,874,0.00 Overnight visitor'swho yisitedparks(20%) 2,374,800 Estimated 22%who visited because of parks 522,456 Spendingper day visitor.per day $48 Spending of day Jisitors bxause ofparks $25,077,888 Total Spending(ovemight.and day visiton) $1�14,380,088 Sales, meal,and hotel taxes.p•5%average) .$8,578;507 on park�tourisq.spending Net profit(35%of tourist apending) $40,033,031 "San Diego Convention.and:Yisitore 8ureau.and Califoinia TraLel and��Tourism�Commission,2006. Accarding to data from the San Diego Comention and V'isitors Bureau(CVB),-the Califomia Travel and Tourism Commission,and a telephone snrvey by the Morey Gioup, an estnnated xo petcent of tourists visited a paik while in San Diogo:in ioo7.The phone durvey fiiither rpvealed tl�at zz percent of San.Diego park risitors came becawe of the parks.(Using this methodology assures that the count did not iacludc rhe many tourists who came to San Diego for other reasons aad happened to visira pazk without planning to doso.)The conclusion was tk�at just uader g percent of San Diego tmuism in xooy was due to the city�s pazks—83S,000 overnighters and gzi,000 day vi'sitors. Knowing the average daily spending level of those tourists—$xo7 per overnight visitot and$48 per dayvisitor—we decermined tharrotal pazk derived tourist spending in zooy caine to$i}4.3 inillion:With an aveiage tax raCe on touris[erzpendimres of 7.q percent,tau reyenue to the city was 8 000.In addiuon,since economists mnsider that an average of;g percrnt of every wurist dollar is profit to the local economy(the rest is the pass- chrongh cost of doing business),the atiienry's collective increase in wealth from pazk based touiismwas$�o,oas.000. 4 DIRECT USE VALUE While city parks provide much indirect benefit,they also p�ovide hdge tangible value tlirough such activities as team spores,bitycGng,skateboazding,wallcing,picnicking,benchsitting,and visiting a flower garden.Economists call these activities"direct uses." Most direct uses in city pazksare free of charge,but economists can still calculate valueby knowing the cost of a similaz recreation expe�ience in the private mazketplace.This is known as"willingness to pay." In other words,if pazks were not available in a city,how much would the resident(or"consumer'�pay in a commercial facility?(Thus,rathei than income,this value represents saving by residents.) The model used to quantify the benefits received by direct users is b"ased on the"Unit Day Value"method developed by the U.S.Army Corps of Engineers.Park visitors aze counted by specific activity,with each activity assi�ed a dollar value by economists familiaz with prices in the private martketplace.For exatnple,playing in a playground is worth$;.So.Rnnning,walk ing,or in-line skating on a pazk trail is worth$q,as is playing a game of tennis on a city court. For activities fo�which a fee is cNazged,like golf or ice skating,only the"extra value"(if any)is assigned;that is,if a round of golf costs$xo on a public course and$80 on a privare course,the direct use value of the public course would be$60.Under the theory that the second and third repeEitions of a pazk use in a given period are slightly less valuable than the fust(i.e., the child visiting a playground gets some- whacless value the seventh time in a week than the first),we modified the model with y f, _ diminishing returns for heavy park users. y . .� (For e�tample,playground value diminishes M�' from$3.So for the first time in a week to R. $i.93 for the seventhJ We also estimated �.,, � an average"season"for different park uses �'-�: to take into account reduced pazticipation --� � " � rates in the off-season.(Although some �' people azeactive in pazks;6s days a yeaz, � we conservatively elitninated seasoas when � }'� � participation rates drop to low leyelsJ Fi- �'�" nally,for the few activities for which a fee is charged,such as golf,ice skating,and the use of fields for team sports,we subtracted the per-person fee from the assumed value. � The number of park visits and the activi- � �� ties engaged in is determined chrough a - --. - " professionally conducted telephone survey of city residents.Residents aze asked to answer for themse}ves;for those adults ., eono�rens.�a n«,eeno�ow•nmem The Frog Pond in the Boston Common is but one of ihe numerous park (acilicies tha[provide Bosconiaas with hundreds of millions of dollars of direR use value. 5 with children under the age of i8,a representative proportion aze also asked to respond for one of;heir children.(Nonresidents are not counted in this calculation;their value is mea- sured through out-of-town tourist spending.) While some might claim that direct use value is not as°real"as tax or tourism revenue,it nevertheless has true meaning.Certainly,not all pazk activities would take place if they had to be purchased.On the other hand,city dwellers do get pleasure and satisfaction from their use of the pazks. If they had to pay and if they consequently reduced some of this use,they would be mateiially"pooter"from not doing some of the things they enjoy. ��d�'� r�rtQrt�..�,N�,11,,,',., � . � ' • •;uul5l7ls l�'l7�=f�CJl1��UN:o o . . .. When Frederick Law Olmsted designed the pazk system of Boston,he eavisioned a series of places of respite accessible:to all.No need to pay foi a trip out to the codntiyside— the park system could ptovide that—and more—right neaz home.Today that rision lives om in Boston's q;oqo acres of pazks and the pastimes these parks offer.jogging down.the Commomvealth Avenuemedian'artd into Boston Common,spending a marning ax the playground,watching a tenais match,bizdwatching across�;�65 natural acres,attending a spmme�fesrival,enjoying lunch in PosrOffice Square,walking the frails of 5a7-acre Frank lin Park,admiring the flowers of the Public Garden,or taking in moyie night in Jamaica Pond Pazk. These and many more"direct d3es"were meastired in a tekphoae survey of Boston resiilen"ts and we"re then multiplied by a specific dollar value for each acrivity.Based on the level of use and those values,it was found that in zoo6 Boston's park and recrearion system provided a total of�a.�cz.000 in direct use value: Shaced IBenefits:The Economic Value uf Direct Use of Rarks'in Boston,Z0U6. Average Value Facility/Activity person-y'�sits Pe,y;,;t Value($) Ge�eral park use jplaygrounds, 76,410;237 $1.91 $1'46230,236 trails,dog walking,picnicking, sitting, etc.) Sports facilities use�(tennis,team 48,407,572 $3.05 $147,612,453 � sports,bicycling,swimming, , running, ice skating,etc.) Special uses(golfing;gardening, '6,467,113 $9:33 $60;309,713 festivals,toncerts,atttactions,etc.) T�� 131;284,922 5354,352,402 Data were drawn frbm a telephone sur4ey of 600 Bonon residents. 6 HEALTH VALUE Several studies have documented the economic burden of physical inactivity.Lack of exercise is shown to contribute to obesity and its many effects,and euperts call for a more active lifestyle. Recertt reseazch suggests that access to pazks can help people increasexheir level of physical activity.The Pazks Health Benefits Calculator measures residents'collective economic savings through the use of pazks for exercise. Aker idenrifying the common types of inedical problems that aze imersely related to physica( acrivity,such as heazt disease and diabetes,we c�eated the calculato�based on studies in seven different states that show a$zso cost difference between those who exercise regularly and those who don t Fo�people over the age of 6S;the value is$�oo because seniors typically incur two or more times the medical care costs ofyounger adults. The key data inpnt is the numb'er of park useis who indulge in a sufhcient amount of physical accivity to make a difference.('I'his is defined as"at least 3o minures of moderate to vigorous activity at least three days per week.'�To determine this number,we took a telephone pazk use survey of activities and age and el'vninated low-heart-rate uses such as picnicking,sitting,stioll- ing,and birdwatching.We also eliminated respondents who engage in strenuous activities but do so less than three times per week because they aze not active enough for health benefit. Afrer obtaining the number(and age) ,.,,+'¢.;• , �•,� j,� {Y,,; of ci.ty dwellers engaged in streuuous ' ,� p� ".'iT� pazk activities,we applied the multi- �K .iQo�. .,_�, -;,. pliers(by age)and added the subtotals. � 1"' The calculator makes one final com- . � -�S'r;, putarion,applying a small multipfier l„ : ;�•�,ji�yt � to reflect che differences in medical •,;t, ;� care costs between the city's region fi and the United States as a whole. f . • -•_ - ,_ „ ,---? Semmenro oew^�^mi oi veba end Revemron With or without a stroller,a regular vigorous run can cuc medical costs by an average ot$250 a year.McKinley Park,Sacramento. � � ' � V� UIiV . p � � a • � �"�- 4Pl - , U : � $aciamento has g,7qi ac;es of pazks that provide a multitude of ways to stay healthy.The city bas q;tennis rnurts,ioi baseball diaznomds,n6 baskccball hoops,i7�playgFounds, 78 soccer fulds,7 skate parks,n swimmingpools,over8o miles of ttails,and many more facilities. Using the Pazks Health Beaefits Calculator,wc determined thrmedical sadings cealized by city residrnts becatue of park exercise and found that about 78,00o Sacramentans engage actively enough in parks to improve their health-7x,000 of them under the age of 6g aiid about 6;000 older.Using the estimated dollir value attribqtable to those actiyiries,we calculated the savings.in.zoo7,which came to$io.S7a.000. Health Care Sauing3: Physically Active Users of Sacramento Parks, 2007 A"veroge Mediol ResideMs Cost Difference Physimlly Active Batween Active and Cost Description ��in F'ark"s• ina�o've Persoi,a �ount Aduhusersunder65yearsofage 71;563 $250 $1Z,690,750 Adult users 65 years of age and older 6,054 $500 $3,027,000 Subtotelscombined 77,617 — $20,917;750 Regional cost muhiplier(based on 0.95 statewide medical;costs) Total Value $19,871,863 'People engaging inmoderate,vigorous,or sttenuous attiviiy at leas[half an hour,three days per week 8 COMMUNITY COHESION Numerous studies have shown that the more webs of human relationships a neighbothood has, the stronger,safer,and more successful it is.My insritution that promotes this kind of community cohesion—whether a club,a school,a political campaign,a religious institution,a co-op—adds value to a neighborhood and,by extension,to the whole city. This human web,which Jane Jacobs termed"social capital,'is strengthened in sbme cities by pazks.From playgrounds ro sports fields to puk benches to chessboards ro swimming pools to ice skating rinks to flower gardens,pazks offeropportunities for people of all ages to interact, communicate,compete,leazn,and gow Perhaps more significanil};the acts of improving, renewing,or even saving a park can build eutraordinary levels of social capital.This is pazticulazly true in a neighbbihood snffeYing from alienation paztially due to the lack of safe public spaces. While the economic value of social capital cannot be measured d'uectly,it is instructive to tally the amourit of time and money that residents devote to their parks.This can serve as a prozy.In cities with a great arnount of social capital,pazk volunteers do everything from picking up aash and pulling weeds to planting flowers,raising playgrounds,teaching about the environment,educating public officials,and contributing dollars fo the cause. To arrive at the numbey all the financial contributions made to"friends of parks"gronps and pazk oriented community organizations and park agencies aze tallied.Also added up,through contacting each organization,are the hours ofvolunteer time donated to park organizations. This number is then mulriplied by the value assigned to "volpnteepsm by the national organization Independent Sector.(This value vazies by year and by state.) _ , � � . 5 ' % .- . - . -. . . � �" . 9 d�. - GREAT`PARKS-�NIA�(E � � GREqT IVEIGNBORHDODS!,` ' �� 'i', =- PhlladelpMia Depahmen[ol Perlu end Recmetion With mora than 100"friends of parks"groups,Philadelphia has few peers when it mmes ro park-basad social capital. 9 •�3�'/: Of�l , o �� • - • e� ' -•- � Philadelplria parks havesuppoit galoie.In fact,tNeie are morq tF%an ioo"friends of pa;ks" organizations,Two of them,the Philadelphia Parks Alliance and Philadelphia Green,oper- atcon a citywi3e basis;the rest deal with individual pazks. This iinpressive web of formal and informal action�eady boosts t2ie civic life of the city, and it is measnrable econo:nically.Using the"cotpcnunity co}iesion"methodology;we tal- lied the financial contributions made to all these groupsin zooy.Thenwe added up the total voluateer hours donated to pazks and converted them to a dollar Sgure(at:$i8.x�per haur,the latest figure available for tlte staxe of Pennsylvarua).Combining,the two yielded a aoo7 commiiciity cohesion value of$8:600.000. Community Cohesion Value: Park Supporters in Philadelphia Value of � Volunteer VoluMeer Rna�rcial Organizaticn or Act'rvity Houn tiou.s• Ccna;6utions Tiotal Fairmount Park Volunteers 154;209 $2,894,503 $3,318,713 $6,213,216 (54 friends groups) Independence National 10,390 $195,017 — 8195,017 His[orical Park PennsylvaniaHorticuhuralSociety 65,052 $1,221,026 $694,680 $1,915,706 (52fiends.grotips) Other wpport groups,combined 452, $8,485 8267,961 $276,446 Total Value $4,319,031 $4,281,354 $8,6�0;385 'Value of one liour of volunteer labor in Permrylvania as detertnined by Independent Seccor,2005:$18J7. . . __ _ . .. . _ _ _ . . _ 10 REDUCING THE COST OF MANAGING URBAN STORMWATER Stormwacer runoff is a significant problem in uiban areas.When rainwater flows off roads,sidewalks, and other impervious surfaces,it picks up pollutants. In some cases(cities with sewec systems that sepazate household sewage from street runof�,the polluted rainwater flows directly into waterways, causing signi5cant ecological problems. In other cases(cities with combined household and street systems),the rainwater is treated ata pollution control facility,but larger storms dump so much water that the system is designed to overflow when cap"acity is exceeded,resulting inspillage of both rainwater and household sewage. Pazkland reduces stormwacer management costs by capturing precipitation and/or slowing its runoff. I,arge pervious(absorbent)surface areas in parks allow precipitation to infiltrate and recharge the grourtdivatec Also,vegetation in parks provides considerable surface azea that intercepts and stores rainwatey allowing some to evaporate before it ever reaches the ground.Thus urban green spaces function like ministorage reservoirs. The Western Reseazch Station of the U.S.Forest Service in Davis,California,developed a model to estimare che value of retained stormwater runoff due to green space in pazks. First,land cover data aze obtained through analysis of aerial photographs.This reveals forested as well as open grassy areas and also water surface;it also reveals impervious surfaces in pazks—roadways,trails,pazking lots,buildings, and hazd courts. Second,the same photographs are i:'� then analyzed for the amount of �',�+'�`�- : perviousness of the rut of a city—in " � ' "�� other words,the city without its park land and not counting surface water. � (Pervious land in the city can consist of residential frbnt and back yards as well as private natural azeas such as cemeteiies,university quadrangles, and corporate campuses.) Thitd,the amount and chazacter- istics of rainfall ue calcvlated from ; U.S.weather data The model(which an�i,esipnb Oepanment o�PaAa and Meaeation COII1bIRC5 25PCC[5 Of tW0 O[f1C[IDOd- yyith a wide vegMative buffer to catch mnoff,Pennypack Park helps reduce els developed by reseazchers with the Philadelphia's rtormwarer management msts. U.S.Forest Service)uses hourly annual precipitarion data to estimate annual runoff.By compaiing the modeled runoff(with pazks)and the runoff that would occur from a city the same size and level of development(i,e.,with streets,roofrops, pazking lots,etc.but without any pazks),we can calculate the reduction in runoff due to pazks. The final step involves finding what it costs to manage each gallon of srormwater using traditional methods(i.e.,`hard infrastructure"such as concrere pipes and holding tanks rather than pazkland). By knowing this number and the amount of water held back by the park system,we can assign an economic value to the pazks'water pollution reduction. it . . • � IIGJ ' o , ��c.��i • :.- � Philadel`pliia's io;;;q-acre pazk sysiem is one of the oldest in the countty,and it provides more thaaseven acres of parkland for egery i,000 residents.About u percent of the city is devoted to pazkland,and t6e water retrnaon value of the trees,grass,ripazian corriilors, and plants significantly reduce rhe amount(and cost)of rw�off entering the city�s Sewei syst6in. Philadelphia's pazkland is 8i.;percent pervious:The rest of the ciry is y}.9 percent perviaus.Philadelphia receives an average of q;:zq inches of rain per yeaz(with the char- acteristic mid-Adantic mi.e of drizzles,showers,and dowrtpburs).T'he mode]developed by the Forest Ser6ice sfiows that Philadelphia's paiks reduced runoff in 200�by qq6 million cubic feet compazed with a uenario in which the city had no pazks..It is estimated that Philaddphia stormwatermanagemont cost is i.z ceats($o:oix)per cubic foot. Thus;xhe park system ptovided a storinwater refention value of$s.44�.00o iaaooj. StormwaterCosts in Philadelpkia per Cubic Foot Rainfall on impervious surFace 8,667,269,456 cu.ft. Annual expenditure on water treatment $100,000,000 Cost per cubic foot $0,012 Cost SaVings Due to Runoff Reducfion: Philadelphia's Parks ' Results'for TypicalYear—43.29 inches ofrainfall Cubic Feet Mnual rainfall overEntire City of Philadelphia 1,623,928,386 Amount of actual runoff from parks 168,480;901 (81,3%perviousness) Runoff if parks didn't exist and if thaYacreage 664,198,620 were of the same permeability as rest of city (34.9%perviousness) ! Reduction in runoff due to parkland'speniiousness 495,717,799 Estimated stormwater costs per cubic foot $0.012 Tatal savings due to park runoff'reducEion $5,948,613 -- - _ ._ ._ . . _. - — . _ � — __. _ _ 12 REMOVAL OF AIR POLLUTION BY VEGETATION Air pollution is a significant and expensive urban problem,injuri.ng health and dama�ng struccures.The human cazdiovasculaz and respiratory systems aze affected,and there aze broad consequences for health-caze costs and productivity.In addition,acid deposition,smog, and ozone increase the need ro clean and repair buildings and other costly infrastrucmre. Trees and shtubs temove air pollutants such as nitrogen dioxide,sulfur dioxide,carbon monoxide,ozone,and some pazticulates.Leaves absorb gases,and pazticulates adhere to the plant surface,at least temporazily.Thus,vegetation in city parks plays a role in improving air quality and reducing p.ollurion costs. In order to quantify the contribution of pazk vegetation to air quality,the Northeast Research Station of the U S.Forest Service in Syracuse,New York,designed an air pollution calculator to estimate pollution removal and value for urban trees.This calculator,which is based on the Urban Forest Effects(UFORE)model of the U.S.Forest Service,is location-specific, taking into account the air pollution characterisrics of a given city.(Thus,even if two cities have similar forest characteristics,the park systems could still generate different results because of differences in ambient air quality.) First,land cover informatidn fo�all of a cit}�s `,�p parks is obtained through analysis of aerial pho- �� ''�-'�`" - tography.(While every city has street trees and numerous other trees on piivate property only the trees on public parkland aze measured.) Then the calculator deterrtunes the pollutant flow through an area within a given time period ,� (known as"pollutant flux'�,taking into account concentration and velocity of deposition.The calculator also takes into account chazacteris- tics of different types of trees and other - r�,,;o�,�P„�s�,„�, VCgCtfftlOII 811C1 SC3SOR311C8f V3C13t1OI1. Washington,D.C:s Rock Creek Park has more than 1,500 acres of ttees that trap and absorb pollutan6 from the ciry's air. The calculator uses houriy pollution concentra- tion data from the U S.Emironmental Protection Agenc}:The total pollutant flwc is multi- I plied by aee-canopy covecage to estimare pollutant removal.The monetary value is estimated using the median US.externality value for each pollutant.(The"externalityvalue"refers to the amount it would otherwise cost to prevent a unit of that pollutant from entering the atmosphere.For instance,the e�cternalityvalue of a short ton of carbon monoxide is$870;the externality value of the same amount of sulfvr dioxide is$i,soo.) 13 •�� [It`� � o �� •� � c�aa • � � c�zc The trees of Washington,D.C.;are xhe ciry's langs;lnhaling and exhalirtg the air flowing aiound them. Bryond the famous Japanese cherry mes around the Tidal Buin,.rhe starely elms grazing the Reflecting Pool,and massive oaks of LaEayette Pazk,theie are 4�839 acres of genera( tree cover in the cit}�s 7,gqq acres of parkland.Theu aesthetic value is not countable,but the value of the air polliition thry extract is.The Air Quality Calculator determined that they removed zq4 tons of cazbon dioxide,nitrogen dioxide,ozone,particulare matte;and sulfur dioude in xooS.Based on the dollar values assigned to these pollutants,the savings �� was� rr 0000. Air Pollution Removal Valus of Washington D.C.'s Parks, 2005 � Tons of Pollu4a�K Dol,lan Saved Per Total Polluta�rt�, POIIutaM TyPe Removed' Ton.Removed Rerrioval Value Carbon dioxide 10.4 $870 $9,089 Nitrogen dioxide 437 $6,127 $267;572 Oione 83J $6,127 $512,771 ' Particularmatter 70.3 $4,091 $287,709 , $ulfurdioxide 35.5 $1,500 $53,246 Total 243.6 — $19,871,863 'Based on the city's 60:5%tree cover(4;839 acres)of 7,999 acies total Parkland. �4 CONCLU S I ON While reams of urban reseazch have been cazried out on the econbmics of housing,manufacturing, retail,and even the azts,there has been untd now no comprehensive smdy of the worth of a city's pazk system.The Trust for Public Land believes that answering this question—"How much value does an excellent city pazk system bring to a city?"—can be profoundly helpful to all the nation's urban areas.For the first time,parks can be assigned the kind of numerical underpinning long associated with transportation,trade,housing,and other sectors.Urban analysts will be able ro obtain a major piece of missing information about how cities work and how pazks fit into the equation.Housing proponentsand others may be able to finda new ally in city pazk advocates.Md mayors,city councils,and chambers of commerce may uncover solid justification to strategically acquire pazkland in balance with community development projects. Derermining the economic value of a city pazk system is a science still in its infancy:Much reseazch and analysis Ge ahead.Md cities themselves,perhaps in conjunction with universities,can help grbatly by collecting mo7e specific data about pazk usership,park tourism,adjacent property transactions,water runoFf and retention,and other measures.In fact,every aspect of city pazks— from design to management to programming to funding to mazketing—would benefit kom deeper analysis.In that spirit this report is offeied;for the conversarion about the present and fdmre role of pazks within the life and economy ofAmerican cities. 15 APPENDIX I ACKNOWLEDGMENTS The report was fqnded tluough a grant fromThe Graham Foundation foiAdvanced Studiesin the Fine Arts.lVfajor consultation on the underlying economic formulas for this study was proyided by: David Chenoweth,Ph.D.,Health Management Associates,New Bern,North Cazolina John Crompton,Ph.D:,Depaztment of Puk,Recreation andTourism Sciences,Texas A&M University,College Station E.G.McPherson,Ph.D.,U.S.Forest Service Reseazch Station,Davis,California Sazah Nicholls,Ph:D:;Depaztment of Park Recreation and Tourism Resources;Michigan State University,East Lansing David Nowak,Ph.D.,U.S.Forest Service Northeast Research Station,$yracuse,New York Dan Stynes,Ph.D.;Department of Pazk,Recreation and Tourism Reswrces,Michigan State University,East Lansing 16 APPENDIX 2 COLLOQUIUM PARTICIPANTS Tbe followrirg indrvidua[s took part in tbe colloquium`Flow Mucb T/s[ae Doea a Park Syrtem B�ing to a City' in Pbi/adelpbia iu Octoberzooj. Susan Baird Denver Depaztment of Pazks and Recreation Denver Kathy Blaha The Trust for Public Land Washington,D.C. Blaine Bonham Pennsylvania Horticulrural Society Philadelphia Glenn Brill Ernst&Young NewYork Valerie Burns Boston Namral Areas Network Boston Patrice Cazroll Philadelphia Managing Director's Office Philadelphia Donald Colvin Indianapolis Depaztment of Pazks and Recreation Indianapolis Ernest Cook The Trust for Public Land Boston John Crompton Texas A&M University College Station,Teicas Dick Dadey City Parks Alliance NewYo;k Nancy Goldenberg Philadelphia Center City Pazmeis Philadelphia Pefer Harnik The Tri�st for Public Land Washington,D.C. Nancy Katka The Trust for Public Land Boston Alastair McFarlane U.S.Dept of Housing and Urban Development Washington,D,C. Ken Meter Crossroads Resource Center Minneapolis Sarah Nicholls Michigan State University East Iansing Joan Reilly Pennsylvania Horticultural Society Philadelphia Dan Stynes Michigan State University East I,ansing PatriceTodisco BostonGreenSpaceAlliance Boston Susan Wachter University of Pennsylvania Philadelphia Guijing Wang Centers forDisease Control Atlanta Richazd Weisskoff Everp,lades Economics Group North Miami Wayne Weston Mecklenburg Pazks and Recreation Department Charlocce,Norch CazoGna Jennifer Wolch University of Southem California Los Angeles I{athleenWolf UniversityofWashington Seattle Matt Zieper The Trust for Public Land Boston 17 APPENDIX 3 RESOURCES RELATED TO THE ECONOMIC VALUE OF PARKS Bedimo-Rupg,A,L.,A.J.Mowen,and D.Cohen. zoog.The significance of pazks to physical activ- ity and public health:A conceptual model.American�ournal of Pseventive Meduinez8(iSz):is9-i68. Center for Urban Forest Research.Collection of"Benefits and Cost"Research.US. Forest Service. Davis;California.http://ww�efs.Eed.us/psw/programskufr/reseazch/studies.php?TopicID=z. Correll,M.,J..Lillydahl,H.Jane,and L.D.Singell.i978.The effect of green belts on residential property values:Some finditigs on the political economy of open space:Land Ecanomics S4�2�. o7-zt7. Crompfon,J.L. zoo¢. Tbe Proximate P�inciple:The Impact ofParks,Open Space and Water Features o0 Re.ridential Praperry i�aluer and the ProperCy Tax Base.Ashburn,VA:National Recreation and Pazk Associarion. Emst and Young.zoo3.Analyrn of Secondary Economic Impacts of New Yirk City Parks. New York: New Yorkers for Pazks. Gies,E.zoo6.Tbe Health Bene,fu of Parkr:Ham Parkr KeepAmeritant and Tbeir Commtaritiec Fit and Ffealtiiy. San Francisca The Trust for Pdblic Land. Lutzenhiser;M:;and N.Noelwahr.zooi.The effect of open spaces on a home's sale price. Conttmfiorary EcortomicPo[icy�9�3):29i-298. McPheison,E.G:i998.Strdcture and sustainability of Sacramento's urban forest.3ournal of Arboriculiun sq(4):174-190. Millet,A.R.xooi. ValuingOpen Space:Land&onomicrandNeighdorhoodParkr.Cambridge: Massachusetts Institute ofTechnology Center for Real Estare. Nicholls,S.,and J.L.Crompton.zoog.The impact of greenways on property values:Evidence from Austin,Texas.�`ourna!ofLeisure Researcb37�):;z�-34i. --—.zoog.Why do people choose ro live in golf conrse communities73ournalofPark and RecreationAdministration z3�I)�37-Sz. Nowak,D.J.,D.E.Crane,and J.C.Stevens.zoob.Air pollution removal by urban ttees and shrubs in the United States. Urbmr Forertry and U�ban Greening 4: IIS-I23• 18 Nowak,D.J.,D.E.Crane,J.C.Stevens,and M. Ibarra.zooz.Braoklyni Urban Forert.USDA Forest Service GeneralTechnical Report.NE-2qo.Newtown Squaze,PA:U.S.Department ofAgiculture. Nowak,D.J.,R.E.Hoehn,D.E.Crane,J.C.Stevens,and J.T.Walton.zoo6.Arrucing Urban Foren Effects and Values:Washington,D.C.i UsSmr Forest.USDA Forest Service Resonice Bdlletin.NRS-i. Newtown Squaze,PA:U.S.Depaztment ofAgiculture. Nowak,D.J.,R.E.Hoehn,D.E.Crane,J.C.$tevens,J.T.Walton,J.Bond,and G.Ina.zoo6. Atser.ring Urbars Forett Effectr mrd Yaluer.Mimreapo&s'Urban Forest.USDA Forest Service Resource Bulletin.NE-i66.Newtown Square,PA:U.S.Depaztment ofAgriculrure. Nowak,D.J.,P.J.McHale,M.Ibazra,D.Crane,J.Stevens,and C.Luley. i998.Modeling the effects of urban vegetation on air pollution.In Air Pollution Modeliieg and ItsApplicatron XII,ed.S.Gryming and N.Chaumerliac.New York:Plenum Press399-qo7. Stynes,D.J.,D.B.Propst,W.H.Chang, and Y.Sun.ErtimatingRegional Ecanomic Impacu ofPark Visitar Spendnmg:Money Generation ModelV nion z (MGMz).East Lansing:Department of Pazk, Recteation and Tourism Resources,Michigan State Universiry. Stynes,D.J. i997.Economic Impucts ofTou�irm.•A Handbaok forTawrrm Psofersionak.Urbana:University of Illinois,Tourism Research Laboratory.http://webq.cancrosu.edu/mgmx/econ/. Wachter,S.M.and G.Wong July zoo6. Wbat Is a Tree Worth?Green-City Strategier and Housing Pricet. http://ssrn.com/abstract=93c736. Walker,C.zooq.The Pieblic Value of Urban Parkr.Washington,DC:Urban Institute. http://www.wallacefoundation.org/NR/rdonlyresJSEB4S9oE-gEiz-4E7z-BooD-6i�14zEz9zE9/o/ ThePublicUalueofUrbanPazks.pdf. 19 T��e TRUST j� PUBLIC LAND � Conserving land for people CENTER F9R CiTY PARK EXCIiId.ENCii THE TRUST FOft PUBLIC L.AND 6G0 PENNSYLVANIA AVENUE SE� SUITE 40I WASIiWGTON� D.C. 2000j zoz.S43J55z tpl.org/ccpe NATIONAL OpFICE T31E TRUST FOR PU6I.1C LAND IIG NEW MON1'GOMF.RY STREET� 4TH FLOOR � SwN FanNc�sco,CA 94to5 4�5•495•4�i4 tpl.org • � � � • • • ' � • ' � � • � ' � � � � ��-�—'�._s �,:y i ;Q-=--> ��t y � c{� . : --s�,µ Kr � � '-�,,' y � ��..�'M„ i *!ti � �b � J'r �-O$ r F q W �.�. i��'j �� ' +.��. -.� : 4kt-�+�sr i.r� G rc h}. S; ,A u Z 1 A� � ,��,� ,.yt1 � ��..4�� 1 �� v�: � '� `.3s5 > i. s . . 4 r��,r-t"S, rf �r'v . a � ,, t J k " : r i ih c. � � �P-- n/v ° � . - i . ie> ��-f 3." � � /I% �r d � i ^C'�1 t-. 7� � h t+ + i P� vs� .f. V' Y.f v ! r�� 9� �� ! G 1 Y �.. I� i�Y 7- °Y �D "¢t}� n. d ''�s ;.r �G�j . R» !� i 4�•� � �y /;�S i � K� t �1 .-K+ '� i rG v�l' �.c �s� i .�-�N niY' Y^_ +i � I K! �. N' � i . � ^ � . [ :y:r � �''L a' .�L �� ^......... c '� t"i''f�_y�,a�.�,-�,�,Y ,,,yw��.�'�^te j y �, n..�.� � /. .t � ��`��,_ n \�i '"�t A. �r �� ,y '��+iL.�,^.� .f� x . � �-�� [�" r 'ra- 7 �`� � i t y h � �u t � '�'lrlP'. � "'v � :v �'�7-�i'" � �� v C a b .tg�'7.�.` 1.��. � '.t`�. `7�^J�,� '� .. ) ��Y o�„ ;r��4`�i ).E �� {�� .. i 1� s_� �� :. n„-'.. .a�„��f 4 �a . rty '1 .., .j-i �/�4 F r� ,J f�� i l g j +1�f t- i.- ._. e t6.a• 1 � e.,� Y (� �� i..� l e n ♦♦ 7 � . � ��2T�rY.J �'!�i` � �lL�'�- �d 1! /� F, �(� }�a ) J'� �1. [_.I 1 �'�� S� RtA L �}.�1Mi/f. '.y�Y 1 \\ 'd4 I � i-,�ti., � ` 1 �� IY�t . � �q� � � �„ ��Rs � ar y� �� .��, {� l�y� / / , +� �, �} �•.�,� J �Y f �1 ��.t yl ii�i� J . � .�. _.l��. �'` f�y�( !J� 1 +�iT(c.,'-'l � Z 1�Y f� i � ��3�e,� . ! �� rf i5�•[14 � }� � I �� - F� f-�� ' t'�f ) ?��\L,�Sµ, l � S �: I4 � v:tc\r ��7—' >: � � .� `�. . .�� -�fv'_ � '��.�� -I: ��-�,.�— >-- - . � � - ' d�-� ,`�� - — —�. �� L�m�_ --- _ _ ��I� __.. � �\(r � t' - - _--_ - » ;y ! '� - 1 -t �- ' � � � .� _ "^. ` ' - - � � � 1 . � z,c�. ! ' — ��-..��" � �� Z �- 4i� � .., �- ,, :� <<,� �t� ,�� _- - _ = r,. � ,��i �� " ~ y* � _, s �I'„j�_i�,� p `. '-r Y ' . ^ ♦ � � � . l�r!_ y}��_ I �. ♦.. ! ,�, s � �� I � . Gp- �. l��', �" � ° • r-� � '•` ' -- { '.° -� 'M 4� . L�^\'�\J11'�� .� - r � �., b�*1,� "l_ � 3'_`'�1► Rn' :: \.� \ 1 • � � .I _ tii• ` 49'1 L.i.. � �� .\:�- • V F J.� �Zdlr'1_ l :.�E� \ � - 1 l � � � • � • ' • ' Cover Phoms:Dazcy Kiefel(lefd,TCDavis(righd HOW MUCH UALUE DOES THE CITY OF WILMINGTON RECEIVE FROM ITS PARK AND RECREATION SYSTEM� A Report by The Trust for Public Land's Center for City Park Excedlence September aoo9 OO zoog The Trust for PubGc Land September zoo9 Deaz Patks Advocates,Citizens,and Decision Makeis: Wilmingtonians have long enjoyed a wonderful parks and recreation system.Neazly qqq acres of pubGc pazk land in our ciry provides us with diverse resources:pools and spray grounds,ball fields and organized sports,trees and flowers,trails and wildlife sightings,fishing and kayaking,play- gonrtds and monuments,gatNering spaces and culcural events,and much more.Odr parks enhance our neighborhoods,create a sense of community,and define Wilmington as an attractive place to live and work. Most people in Wilmington intuitively understand that our parks have value.This study summariz- ing research conducted by The Trust for Public I,and's Center for City Park Excellence,provides us with scientific and economic data to quanrify this value.Based on techniques that have been urilized in other cities to measure environmental,recreational,public health,propertyvalue,tourism,and social benefits of pazks,we discovered that our parks aze worth many millions of dollars to us each yeaz.The reseazch results are a valuable tool for planning pazk improvements in Wilmington. Despite the health and vitali.ty of our ci.ty pazks,we have impoitant challenges to address.Improv- ing our system of parks in strategic ways will increase its economic value for city government and Wilmingcon residents.If paiks were treated on par with othei urban infrastructure,study findings indicate that the return on investment far outweighs the additional resources needed to make pazk system improvements and enhancements.Just imagine what Wilmingtods park system could be with increased Eunding,staff upgrades,deferred maintenance completed,and additional volunteer suppoct.With the proper level of investment,pazks can be economic drivers,locations for friends to meet,places to be physically active outdoors,and efficient filters of clean air and watec Pazkland increases property values,iinproves qdality of life,draws fourists,and attracts and retains residents and businesses. This initiative is about our city and how to make it bette;. People care about�Imingtons pazks.In Zoo8,citizens and piivate sources donated more than $�,000,000 in financial contributions and volunceer rime to our parks.Thanks to The Trust for Public Land,we now have a new tool to envision che future of Wilmingcon's pazks.We hope that this study will become a catalyst to increase pazks advocacy:We look forward to snpporting policy recommendations that will prioritize pazk needs,increase public involyement,and implement sig- nificant improvements to our park system. Please join us in supporting Wilmington pazks! Sincerely, Wilmington Pazks Smdy Workiog Group Fundmg for tbic rnport wasgenerou.rly provided by the Divirion of Parkr and Recreation De[aware Depart- ment of Natural Reraurcer and Environmenta!Control,Nemours Health and Prevention Serriice;Rotary Club of�lmington,and the�lmington Beautification Commisrion with theguidance of the workinggroup rncluding tlie City of�lmragton's Department of Parkr and Recmation and Delaware Center for Hortin�lti�m. TABLE OF CONTENTS Executive Summary i Background z Methodology � i. Removal of Air Pollution by Uegetation ; i:Reducing the Cost of Managing Urban Stormwater q 3.Hedonic(Property)Ualue 6 q. Direct Use Value 8 S. Helping to Promote Human Health � 6. Income from Our-of-Town Pazk Visitor Spending(Tourists) q 7. Stimulating Community Cohesion io Conclusion ii Appendix i-Acknowledgments ii Appendix a-Resqurces tz Note:The Numerical Calculacdrs and`I'echvical Attactiments that underjiin the financial analysis in this report ate mo voluminous to be inclnded here:They aze available upon request from the Center for Ciry Pazk Excellence,or they are posted on the Inrernet at tho£ollowing address:wwwtplorg/W'ilmingtonPazlcsYalue EXECUTIVE SUMMARY The pazks and park programs of Wilmington,Delaware—from Stapler Pazk co Easdake Play- ground to Brandywine Park—provide Wilmingtonians with so many joys and benefits that many residents would not want to Gve in the city without them. Although the pazk system was not created specifically as an economic development tool,there is a gtowing realization that the pazks of Wilmington aze providing the city with millions of dollars of value.This valbe has now been defined.Seven major factors(corriprising io specific value amounts) aze enumerated in this paper:propertyvalue,tourism,direct use;health,community cohesion, clean air and clean wacec Whde the science of city pazk economics is in its infancy,the numbers reported here have been cazefully considered and analyzed. Two of the factors(and three aznounts)provide Wilmington with direct income ro the cit}�s ttea- sury.The fust consists of increased property tax receipts from the rise in propertyvalue of certain residences because of their pro�cimity to parks.This revenue came to$i,o8o,00o in zoo8.Tax revenue also stems from the transfer tax on houses actually sold. In zoo8 the pazk added revenue from that tax in Wilmington came to$iqq,000.The second factor consists of sales ta�c receipts from spending by tonrists who visit Wilmington primarily because of its pazks.This revenne came to$[zq,o.00 in zoo8. In addition to increasing direct taz receipts,these factors bolstered the collective wealth of Wilm- ingtonians that yeu—by$io,z56,000 in realized property value and by$7cs,000 from net income from tourists. Three other factors provide Wilmington residents with direct savings.By faz the lazgest is through the direct use of the city�s free parkland and recreation facilities,which obviaces the need to purchase these items in the mazketplace.This yalue came to$qi.8 million in zoo8.Second is the health benefit—savings in medical costs—due to the beneficial aspects of exercise in the pazks. This came to$q.;million.Md thirdls the community cohesion benefit of people banding togeth- er to save and improve their neighborhood pazks.This"know-your-neighbor"social capital,while hard ro tabulate precisely,helps wazd off all kinds of antisocial behavioi that would otherwise cost ;he city more in police,fire,prison,counseling,and rehabilitation costs.This value came to$i.i million in zoo8. The final two factors also provide savings but of the emironrttental sort.The larger involves water pollution reduction—the fact that the trees and soil of Wilmington's pazks retain rainfall and thus cut tNe cost of treating stormwater.This va(ue cam8 to$qo9,000 in zoo8.T'he other conceins air pollution—the fact that pazk trees and shtubs absorb and adsorb a variety of air pollutants. (Through adsorption,pollutants adhere as a thin layer of molecules to plant leaves and stemsJ This value cazne to just under$;q,000 in ioo8. The pazk system of Wilmington thus provided the city government with direct revenue of moie than$[.36 million and added to the general wealth of the citizenry by nearly$n million.It also provided residents with savings of over$¢7 million,and the city government with cost savings of moce than$.448,000,in zoo8. 1 The Estimated Annual Value of the Wilmington Park and Recreation System Summary Revenue-Producing Factors for City GovernmeM Revenue from property tax,due to increased property value $1,080,000 ReJenue from transfer tax,due to increased property value $154,000. Re4enue from sales tax,due to park-related[ourism $129,000� Estimated Total,.Munidpal Revenuo-Produdng.Factors 57,363,000 Wealth-Increasing Facton to Citizens Property Jalue from park proximiry;at time of sale $10,256,000�. Profits from tourism $715,000. EsNmated 7oia1, Weahb-Increasing Factors 570,9N,000 � - -- -- . . . _ . __.. . . . . Cost-Saving Factors Yo Citiiens Direct use value 541,805,000. Health value - $4,322,000 CommuniTy cohesion value $1,058,000 EstimatedTotal,Citizen Cost-Saving Factors 547,185,000 Cost-Saving Facfors for City Government , Stormv✓atermanagementvalue $409,000 Air pollutiortmitigation value $39,000 Estima[ed To[al,Municipal Cost-Saving Fqcrors $448,000 Source:Center for City Park Encellence,The Trust for Public Wnd,2009. BACKGROUND Cities aze economic entities.They aze made up of structures entwiiied with open space.Success- Eul communities have a sufficient numbe�of private homes,commercial establishments,and retail outlets to house theiz inhabitants and give them places to produce and consume goods.Cities also have public buildings—librazies,hospitals,azenas,city halls—for culture,health,and public discourse.They have lineu corridors—streets and sidewalks—for transportation.And they have a range of other public spaces—pazks,plazas,trails,sometimes natiiral,somerimes almost fully paved—for recrearion,health provision,tourism,sunlight,rainwater retention,air pollution re- moval,natural beauty,and views. In successfiil cities the equation works.Private and public spaces animate each other with the sum greatly surpassing the pazts.In unsuccessfiil cbmmbnities some a.spect of the relationship is awry: production,retail,or transportation may be inadequate;housing may be insufficient or the public realm might be too small or too uninspiring. Since cities are economic entities,tkeir parks also have an economic diinension.Finance may not be a pararnount reason to walk in the woods or play a game of tennis,but it is a significant factoc when it comes to public and private decisions regazding imestments in urban infrastructure.It is for this reason that the Center for City Park Excellence has undertaken a smdy of the economic value of urban pazk systems generally,and Wilmington's specifically. 2 THE PARKS OF WILMINGTON ; :'� �, ' � � � - ° _ :-�l� �� 1',. , a. i� i� Mllls % / .. � 1� T /�'` / ' _ /I L P I \ `,� P / I � �. � � � �. �P� � � rf / / I _._ � L.� } �� ^\\ /��r `y •r i' � e; �/ �� r� \ .` �/, / �.e.An . /'� �\' � � � �Tu n � a /� �� . R �C� �� '�/ , P PaA q ` � i � I'. . '��_` .. . w �� / ' � . �� 6 H len . 51. M � , \ / Po � ak DP+o ' ' � 01 IJ �� Ga� �� r.h j -"�� ' uraiwm. > ' � , �I ..� / � __ -' � n, i � � / — _ — '' ' .. ��, / " �- . \ E l" i ` ' � � .� — /~ � """ ��/ ' 1 .1. �/" �� 1 � ,. y j / METHODOLOGY Based on a cwo-day colloquium of z6 pazk experts and economists held in Philadelphia in October zoo3,the center believes there aie seven a[cribdtes of Wilmingtods pazk system that aze measdr- able and that provide economic value ro the city.(For a listing of smdies done on these issues by participants in the colloquium as well as other studies,see Appendix aJ What follows is a descriprion of each attribure and an esrimareof the specific economic value it provides.The numerical calculators,as well as the technical methodology sheets,can be obtained fromTheTrust for Public Land,Center for City Park Excellence,66o PennsylvaniaAve.S.E, Washington,D.C.z000;,or they can be directly accessed online at wwwtpl,org/WilmingtonParksUalue. I. REMOVAL OF AIR POLLUTION BY VEGETATION Air pollution is a significant and expensive urban problem,injuring health and damaging strdc- tures.The human cardiovascular and respiratory systems aze affecxed,with broad consequences for health care costs and producriviry. In addition,acid dep"osition,smog,and ozone increase the need to clean and repair buildings and other custly infrastructure. 3 Trees and shrubs remove air pollutants such as nitrogen dioxide,su(fur dioside,cazbon mono�tide, ozone,and some pazticulate matter.Leaves absorb gases,and paz;iculates adhere to the plant surface, at least temporazily.Thus,vegetation in city pazks plays a role in improving air quality,helping urban residents avoid costs associated with pollution. In order to quantify the contribution of park vegetation to air quality,reseazchers at the U.S.Forest Service in Syracuse,New York,desigi�ed an air pollurion calculator to estimate pollution;emoval and value for trees in urban pazks.'This calculator,which is based on the Urban Forest Effects([JFORE) model,is location specific,taking into account the air pollution characteristics of a given city.Thps, even if two cities have similaz park forest chazacteristics,the systems could neyertheless generare dif- krent results based on differences in ambient air quality. Fust,land cover information for all of Wilmington's pazks was obtained through analysis of aerial photography.'It should be noted that while Wilmington and every other city has street uees and nu- merous other trees on private propect};this study measu�es only the economic yalue of trees on public pazkland.Of 444 acres of pazkland,g8.s percent was found to be covered with trees. �Imington Parkland Characteristics Type of Cover Acres Percent Parkland with Tiea Canopy 259.4 58.5% Other pervious surface 124.8 28.1% Impervious surface 56.7 12.8% Water 2:7 .6% � ror�i 443.6 �oo.o� _ __._.._. Sourte:Mapping.SusWina6ility,LLC,2009. Then the pollutant flow through Wilmington within a given time period(known as"pollutant flwc'� was calculated,taking into account the wncentration of pollutaats and the velocity of pollutant depo- � sirion.The calculator also took into account the resistance of the tree canopy to the air,the different � behavior of different types of trees and other vegetation,and seasonal leafvariation. The calcplator uses hourly pollution concen- "�' if I� I ' tration data from cities that werenbtained ` " • RJ ! � ,' i from the U.S.Epvironmental Prorection ' ��„.` � `'`' � ,L�: Agency.3 The total pollutant flwc was mul- tip6ed by nee-canopy coverage to estimate � � •~ i� -� ' r ' total pollutant removal by pazk trees in the � I study azea.The monetary value of pollution removal by trees is estimated using the me- ' dian U.S.ezternality values for each pollutant. The externality value refers to theamount it would otherwise cost to prevent a unit of that pollutant from entering the atmosphere.For instance,the extecnalityvalue ofpreventing the emission of a short ton of cazbon monox- ide is$870;the externalityvalue of the same r�,„, amount of sulfur dio�ode is$�,f00. Parks not only afford great places for recreation,but also provide slgnificant environmental value in stormwater retention and reducing air pollution,as illustrated here in Brandywine Park. �The Methods for Air Pollution Model is provided in Attachment�a[ww�vtpl.org/'WilmingtonParksValue. �U.S.Depatment of Agnculcure Geospatial Dara Gateway,http:/�d2tagateway.nres.usda.gov�Ga[cwayHome.html. 'The EPA data are&om�99¢,at which time rhe U S.Forest$crvice creared the model. 4 Theresult of the Air Quality Calculator for the park system of Wilmington is an economic savings value of$tq.000.For computations and methodolog};see Calculator i at www tpl.org/W'ilmingtonParks Value. 2. REDUCING THE COST OF MANAGING URBAN STORMWATER Stormwatei runoff is a signihcant problem in urban azeas.When rainwater flows off roads,sidewalks, and other impervious surfaces(surfaces that do not absorb water),it cazries pollutants with it.In cit- ies with systems that separate household sewage fromstreet runoff,the rainwater flows directly into waterways,causing significant ecological problems. In cities with combined hoysehold and street systems,the rainwater runoff is treated at a pollution control faciliry before going into a waterway. However,if astorm is large,the great amount of runoff overwhelms the combined systein and Aows untreated into rivers and bays.Fortunately,Wilmingtods system consists mosdy of sepazated pipes, thus reducing spillage of sewage;however,in lazger storms street runoff still fouls waterways. Pazkland reduces stormwater management costs by capnuing precipitation and/or slowing its runoff. Lazge pervious(absorbent)surface areas in pazks allow precipitation to infiltrate and recharge g�onnd- watec Also,vegetation in pazks provides considerable surface azea that intercepts and stores rainwater, allowing some to evaporate before it ever reaches the ground.Thus urban green space functions like a mini-storage reservoir. A model was developed for TPL by reseazchers with the U.S.Foiest Service in Davis,Galifomia;to estimate the value of retained stormwater runoff due to green space in the pazks?Inputs to the model consist of geographic location,climate region,surface permeability inde�c,pazk size,land cover per centages,and types ofvegetation.s First,Wilmington's land cover data—trees,open grassy azeas,impervious surface,and so on—were obEained through analysis of aerial photographs.This analysis reveals that the cify�s pazk system is 86.6 percent pervious.The rest consists of impervious roadways,trails,pazking azeas,buildings,hazd courts,and also watec surface.(While the model has the sensitivity to distinguish between the differ- ent effects of such vegetaqon types as conifers,palms,and shrubs,the sensitivity of the aerial photo- graphs was not geat enough to make that kind of determinationJ VHilmington Parkland Perviousness _ Type of Cover Acres Percent Pervious 384:2 86.6% Impervious 56J� 12.8% - Waterfeatures 2.7 0.6% Total 443.6 100.0% Source:Mapping Sustainability,LLC,2009. Second,the same photographs were analyzed for the amounrof perviousness of the rest of Wilm- ington—in othei words,the ci.ty withopt its parkland.It was deternuned that WiUningron(without its pazks and not counting surface water)is;8.8 pereent pervious.Thepervious private land consists °The Methods for Water Pollution Model is provided in Attachmerit z at wwwtpl.orp/WilmingtonPazksValue. s It should be wted that there is another possible methodology for derermining smrmwacer savings due to pukland.Insread of looking at nnnu�l�ainfall and tke annual openting rosts for die system,we could look at the.one-time.capital costs associated with conswct- ing the system ro handle single large storms.This may be more relevant considering that the U.S.Environmental Procection Agrncy is [ighrening iu regulations and requiring�mom constniction for dean watei.The Center for City Park Excellence hopes to analyze dtis different approach in the fumre. 5 primazily of residential front and backyazds as well as private natural areas such as cemeteries,school quadrangles,and corporate campuses. City of Wilmington Perviousne_ss_ - _ .(W�thout Parkland_or SurFace Water)_ Type of Cover Acres Percent Total Pervious 2,436 38.8% Totallmpervious 3,846 61.2% � Total(without water or parks) 6,282 1A0%o -. _ .,. _ . $oume:Mapping Suscainabiliry,LLG 2009. ThiTd,the amopnt and characteristics of rainfall were caleplated from U.S.weather data.Wilmington has a characteristic mid-Atlantic climate�it receives anaverage of¢i.36'inches of rain per yeaz.The model,which combines aspects of two other models developed by researchers with the U.S.Forest Service,uses hourly annual precipitation data to estimate annual runoff. Next,the reduction in runoff is calculated.That is done by comparing the modeled runoff with the runoff that would leave a hypotherical site of the same size but with land cover that is typical of sur rounding urban development(i.e.;with streets,roofrops;pazking lots,etcJ. The final step in deterrttining the economic value of a pazk system's contributios to clean water is calculaEing what it costs to manage stormwafer nsing traditional"hazd infrastrucEuie"(concrete pipes and holding tanks).This cost tums out to be a difficult number to ascertain and is not known by the Wilmington Stormwater Management Prograzn.It is known;however;that the cit}�s annual budget for water treafinent in fiscal yeaz xoo7 was$46.7 million,ofwhich an estimated;o percent,or$i3.99 million,was for stormwater control.Thus,knowing the amount of rainfall the city receives makes it possible to estimate ttie cost of treatment.This came out to be$o:ozz9{z.;cents)per cubic foot. By plugging these rainfall,parkland,imperviousness,and treatment cost factors into the formula,we obtainan annual park stormwater retention value of$do�,000 for Wilmiggton.For cbmputations and methodology;see Calculator i at www.tpLorg/W'�ImingtonPazksUalue. Cost of Treating Stormwate� in Wilmington _ _ _ __ _ - _ (per cubicfeet) 1. Rainfall peracre per year � 150,137 cu.ft./acre� 2. Acres of impervious surface 4,074 acres '3. Rainfall on impervious surface(line i x line 2) 677,658,738 tu.ft. . .__ . _. . . . . . _ ._.. .__. _.__. 4. Annual expenditure on stormwater treatment(est.) $13,999,982 Cost per cubic foot Qine 4/line 3) $0.023 3. HEDONIC �PROPERTY� UALUE More than 3o studies have shown that pazks and openspace have a positive impact onneazby residen- tial property values.Other things being equal,most people aze willing to pay more for a home close to a nice pazk.Economists call this phenomenon"hedonic value."Hedonic value also comes into play with other amenities such asschools;Gbrazies,police stations;and transit stops:(Theoretically,com- mercial office space also exhibits the hedonic principle;unfortunately,no study has yet been carried out to quantify it.)The hedonic value of a pazk,incidentally,is sepazate from its direct use value;piop- erty value increases even if the resident never goes into the park. b Hedonic value is affected primazily by two factors:distance from the pazk and the quality of;he park itself.It has been found that proximate value("neazby-ness'�can be measured up to z,000 feet from a lazge pazk.However,most of the value of a park,whether lazge or small,is within the first Soo feet. In the interest of being conservative,we have limited our valuation to this distance. It has also been found that people's desire to live neaz a park depends on the chazacteristics of the pazk.Beautiful natural resource parks with great trees,trails,meadows,and gardens aze markedly valuable.Paiks with excellent recreational facilities are also desitable(although sometimes the greatest hedonic value is a block or two from the pazk rather than directly adjoining it,depending on issues of noise;lip�ts, and parking).However,less attractive or poorly maintained parks aze only mazginally valuable.Parks with dangerous or frightening aspects,such as unsafe equipment or a high crime rate,can also reduce nearby property values. Determining an accurate pazk by-park,house-by-house hedonic value for a city is technically feasible but prohibitively time consuming and costly.It is thus necessary to make an extrapolacion from studies done eazlier by other reseazchers,plugging average historic national hedonic values into the specific housi.ng and park sitvation of the city under study.But this has a problem,too.AltNough sales data aze available,only a small percentage of dwellings sell in any given yeaz.In order to be comprehensive,we must rely on assessment data.But assessments,unlike sales prices,focus on items such as bedrooms, bativooms,sttucture age,and size but ignore hedonic value.An extrapolative methodology was for- mu(ated to arrive at a reasonable estimate. Using computerized mapping technology known as Geographic Information System(GIS),we identi- fied all residential properties within Soo feet of every significant park in Wilmington.("Significant" was defined as one-half acre or more;"pazk"included e4ery pazk in the city,even those otdned by the state of Delawaze J According to records of the New Casde County Assessors Office,there are about ixq,000 residential properries(dwelling units)in Wilmington.Using GIS,we dececmined that¢6.4 percent of dwelling units aze within qoo feet of a park in the city;these dwelling units have a combined assessed value of$S15,42I�000. When compazing properties within goo feet of pazks to properties outside that '� area,we found chat the pazk p;o�mate I � properties were receiving a is percent - beneht from the parks.The result for zoo8 was$77,3i;,i8o in value due to park prmcimity. .� We then used the residential property tau — � rate to determine how much extra ta�c rev- enue was raised by the City of Wilmington based on the extra property value due to parks.Using a tax rate(sometimes refened to as a"millage'�of$�.;q�per$ioo in as- sessed value and the Property Value Calcu- Delewere Cm�er�or Honicukure 13tOI�WC 3lC1VCd 2[�I,080,065.4 FOL COIII- parks significanNy increasa nearby property values in Wilmington. putations and methodolog};see Calculator ;at wwwtpl.org/W'ilmingtonParksValue. Because Delaware has a properry transfer tax;Wilmington received an additional tax value from the pazk effect on houses.The tax amounts to;percent on the sales value of a home,of which the state "It is worth emphssizing that this hedonic estimare is conservative for three reuons.Firsc,it does not indude the effeccs of ehe smallest pazks(ander a half azre),al�ough cven minor green spaces are known ro havc a hedonic efEecc Second.the cstimare leaves out all the hedonic value of dwellings located betwern 50o fret and a,000 feet kom a park Third,the estimate does not include.the porentially very significant hedonic value Eor rommercial offices locared near downtown parks. � gets half and Wilmington gets half.Based on the pazk affected sales value of homes sold in zoo8,tke rg percent tax brouglit in i 000. It is also important to recognize that while the taac millage brings in actdal dollazs to the city,the overall increased value of the neaz-pazk properties is a different kind of"real"number.Thus,because of pazks, there is an increase in aggregate"property wealth"of Wilmingronians of$z93,oi6,gsz:Since3.s per cent of Wilmington homes were sold in zoo8,the proximate park value realized at the time of sale W35 IO 2 . To restate:the direct municipal tas value is of direct benefit to the ciry goyernmenr,the pazk effect property value benefits a lazge numbei of individual Wilmington residents. 4,. DIRECT USE VALUE While city parks provide much indirect value,they also provide more tangible value through such activi- ties as team sports,biryding,skateboazding,walking;picnicking,bench sitting,and community garden- ing.Economists call these aciivities"direct uses." Most direct uses in city pazks aze free of chazge,but econbmists can still calculate value by determining the consumer's`�villingness to pa}�'for the recreation experience in the private marketplace: In other words,i£parks were noravailable in Wilmington,how much would the resident(or"consumer'�pay for similar experiences in cominercial facilities or venues?Thus,rather than incame,the di;ect use value represents the amount of money residents save by not having to pay market rares to Indulgc in the many pazk activities they enjoy. The model used to quantify the benefits received by direct users is based on the"Unit Day Ualue°method.'The Unit Day Value model counts park visits by specific activity, 'ii� + / assigning each activity a dollaz value.For ex- ' ample,playing in a playground is worth$;.So � each time to each user.Running,w9lking,or in-line skating on a puk trail is worth$4,as � � �~.' isplaying a game of tennis on a city court. .,� - '��p,� ' �� For activities for whicha fee is cNaiged,sdch y �� '�:-�"'�i as golf or ice skating,only the"extra value" � c,�,�, +ti �� (if any)is assigned;that is,if a round of golf �.,. ., ,.�"��^ `„ i1� r�'�(� cosfs$30 on a public coiirse and$6g on a ��L_�-y """°' I Ij private course,the direct use value of the ," � � � ` ,-;l� public course would be the difference: $35. *co:�, Under the theory that the second and third Parks provide opportunities for exercise,helping residents avoid heakhcare corts, � ' �� ' ' and the use of parks allows Wilmingtonians ro save millions in recreacional services repetitions of apazk use in a given period aze �hey would otharwise hava to purchase on the opan market. slightly less valiiable than the first use(i.e., the value to a child of visiting a playground the seventh time in a week is somewhat lower than the first), we fiirther modified this model by building in an estimated sliding scale of diminishing returns for heavy pazk users.Thus,forexample,playground value diminished from$3.qo for the first time to$i.q;for the seventh time in a week. The number of pazk visitsand the activities engaged in were determined by a telephone survey of bo9 residents(giving an accuracy level of plus-orminus q percent).Residents were asked io answe�for 'Warer Resources Counci�recrearion valuation promdures.U.S.Army Corps of Engineers.aoo4�Unic day.values for reneation.Fiscal Yeai xoo¢Economic Guidanre Memorandum o4�03.Direcrora[e of Civil Works,Planning and Policy.ht[p�,��www.usace.army.mil� inet�functions�cw�recwp�General_guidanre�egmo4'o;.pdf 8 themselves;for those adults with children under the age oF[8,a representative proportion(i;z)was also asked to respond for one of their children.(Nonresidents were not counted in this calculation;the value to the city of nonresident uses of parks is measured by the income to local residents from what these visitors spend on their trips.This is covered under income from out-of-town visitor spending.) The result of the Direct Use Calcularor for Wilmingron for zoo8 is$4i,8os,000.For computations and methodolog�g see Calculator q at www.tpl.or�lmingtonPazksValue. While it can be claimed that this very large number is not as tangible as the numbers for tax or tourism revende,it nevertheless has crue meaning.Cettainly,not all tHese park activities would take place if they had to be purchased.On the ocher hand,Wilmingtonians truly aze getting pleuure and satisfaction—all$¢z million worth—from their use of the pazks.If they had ro pay and if they consequently reduced some of this use,they would be materially"poorer"from not doing some of the things they enjoy. 5. HELPING TO PROMOTE HUMAN HEALTH Several studies have documented the large economic burden related to physical inactivity.Lack of exercise is shown to contribute to obesity and its many effects,and e�cperts call for a more active liFestyle.Recent reseazch suggests that access to parks can help people increase their level of physical activity.The Pazks Health Benefits Calculator measures the collective economic savings realized by city residents because of their use of pazks for exercise e The calculator was created by identifying the common types of inedical problems thac are inversely related to physical activity,such as heart disease and diabetes.Based on srudies that have been carried out in seven different states,a valne of$Zso was assigned as the cost difference benveen those who exercise regularly and those who do not.For people over the age of 6g,that value was doubled to$qoo bedadse seniors typically incur two or inore times the medical care costs of younget adults, The key data input for determining medical cost savings is the number of pazk users indul8ng in a Sqfficient amount of physical activity ro make a difference.Thisis defined according to Centers for Disease Control guidelines u"at least 7S minutes of vigorous or iso minutes of moderate activity."To determine this,we conducted telephone pazk use surveys of activities and their frequency,dividing respondents by age.This telephone survey—the same one carried out to obtain the direcause data—had an accurary race of plus-or-minus 4 percent.In order to modify the results to serve the health benefits study,low-heart-rate uses snch as picnicking,sitting,strolling,and birdwatching were eliminated.Based on the survey and the computations,we found that iS,qqS Wilmingtonians engage actively enough in pazks to imprme their health—i3,qq6 of them being under the age of 6S and i,gos of them above 6q.The calculator makes one final computation,applying a small multiplier to reRect the differences in medical care costsbetween the state of Delawaze and the United States as a whole. The health savings due to pazk use for the residents of Wilmington for zoo8 was$�,ti:.000.For computations and methodology,see Calculator g at wwwtpl.org/W'ilmingtonPazksUalue. C). INCOME FROM OUT-OF TOWN PARK VISITOR SPENDING CTOURISM� Tke amenities that encowage out-of-towneis to visit a city include such features as cult�ial facilities, heritage places,azenas,and pazks as well as special events that take place there,like festivals and sports contests.Though not always recognized,pazks play a major role in Wilmington's tourism economy. °While there are ocher aspects of hcalth besides physical acrivity.not every one oEthem can as yet be calculated.For instantt,the mental health value of a walk in the woods has not yet been documented and is not counted here. 9 To know the contribution of pazks to the tourism economy requires knowledge of tourists'activiries, the numberofpazk visitors,and their spending.Unfortunately,theie is a severe shoitage of data on park visitation and on the place of origin of park visirors. (By definition,local users aze not tourists— any spending they do at or near the puk is money not spent locally somewhere else,such as in their immediate neighborhoods.) No agency in Wilmington or the state of Delawarehas mdch information on out-of-townpark visitor actiyity and spending.We thns sought visitation numbers and expenditures from other sourcesand then made esdmates on the percentage of trips tharaze entirely or substanrially due to pazks ot a pazk. Based on data froin the�lmington Cdnvention and�sitors Bureau,we calculated that in zoo8 about 8iq,000 visitors stayed ovemight in New Casde County.Of those(extrapolating from the Travel In- dustry Association of America s Delaware Travel Bazometer report for zoo�;6 percent visited a park, yielding a fotal of about qS;Bgo oyeinight tourists who visited a pazk.Through a similaz computation, we defermined that about 83,i6o day tourists visited a park.Knowing the average spending level of those tourists and making an estimate that one-hfth of all park visitors come to Wilmington becaure of a pazk,we derernuned that rotal pazk derived tourist spending came to just over$z million.(This con- servaEivemethodology assures that we did not count the many tourists who came to Wilmington.for other reasons and hap"p'ened to visit a park iyithopt planning a visitJ With a hotel tax rate of i;percent, ta�c revenue to the city from park based tourism is ix8 i .For computadons and methodology;see Calculator 6 atwww.tpLorglW'ilmingtonPazksUalue. In addidon,since 3S percent of every tourist dollar is considered profit ro the local economy(the rest being pass-throdgh costs),the citizecuy�s collective increase in wealth kbm park based tourism is�$�ia•s�R. � ']. STIMilLATING COMMUNITY COHESION Numerous studies have shown that themore human relationship webs a qeighborhood has,the strbn- ger,safei,arid more successfiil it is.Any institucion that promotes relationship building—house of worship,club,political campaign,co-op,or school—adds value to a neighborhood and,by extension, to the whole city. These human webs,for which renowned �� . iirbanist Jane Jacobs coined the term"social capital,"are strengthened imsome commu- kea� nities by pazks.From playgrounds to sports �; '"' " � fields to pazk benches Co ckessboazds to ^'` swimming pools to ice skating rinks to � i flower gardens,pazks'offer opportunities a - � for people of all ag8s fo cotnmunicate, � ' `� compete,interact,learn,and grow Perhaps " - more significant,the acts of improving, ,�y renewing,or even saving a pazk can build extraordinary levels of social capital in a �' neighborhood that may well be suffering ,;;. ,; from feaz and alienation paztially owing to �<mo�« t}1C 13CIC Of SflfC pI1b11C SP3CC5. Parks bring people together,and mntribute to the dynamic social wpital o( Wilmington's neighborhoods. While the economic value of social capital canqot be measured directly,it is possible to tally up a crude proxy:the amount of time and money that residents donate to their pazks.Wilmington has thousands of paik volunteers who do everything from picking up trash and pulling weeds to planting flowers,rais- ing playgrounds,teaching about the environment,educating public officials,and contributing dollars to the cause. 10 To azrive at the proxy number,all the financial contributions made to pazks organizations and"friends of pazks"groups in Wilmington were tallied.Alsoadded up were all the hours ofvolunceer time do- nated to paik organizations;the hours were then mulriplied by the value the non-profit organization Independent Sector assigned to volunteerism in Wilmington—$zc.56? The result of the Social Capital Calculator for Wilmipgton in zoo8 is$i,os8,000.For computarions and methodology,see Calculator 7 at wwwtpl.org/Wi6ningtonParksValue. CONCLUSION While reams of utban research have been c"arried out on tNe economics of housing,mancifacturi_tig,re- tail,and the arts,until now there has been no comprehensive study of the worth of a city's puk system. The Trust for Public Land(TPL)believes tharanswering this question—"How much value dces an ex- cellertt city park system bring to a city?"—can be profoundly helpful to all the nation's urban azeas.For the Eust time,pazks can be assigned the kind of numerical underpinning long associated with transpor- tation,trade,housing,and otHer sectors.Urban analysts will be able Yo obtain a major piece of missing information about how cities work and how pazks fit into the equation.Housing proponents and other urban constituencies will potentially be able to find a new ally in city park advocates.And mayors,city councils,and chambers of commerce may uncover the solid,numerical motivation to strategically acquire pazkland in balance with community developmenc projects. APPENDIX I ACKNOWLEDGMENTS This report was commissioned by the Delawaze Center for Horticdture,with financial and other assistance from the City of Wilmington Department of Pazks and Reneation,Division of Puks and Recreation Delaware Depaztment of Natural Resources and Environmental Control,Nemours Health and Prevention Services,[he Wilmington Beautifica- tion Commission,and the Rotary Club of Wilmington. 7'he principal author was Peter Harnik,director of the Center for City Paik Excellence,The Trust for PubGc Land, Wuhington,D.C.Principal reseazchei was Linda Keenan,with assistance from Ben Welle.Major consultation on the undedying economic formu(as for this study was provided by: David Chenoweth,Ph.D.,Health Management Associates,New Bem,North Carolina John Crompton,Ph.D.,Department of Park,Recreation and Tourism Sciences,Te�s A&M Univetsity,College Station E�.G.McPherson,Ph.D.,U.S.Forest Service Reseazch Station,Davis,CaliEornia Sazah Nicholls,Ph.D.,Department of Pazk Recreation andTourism Resources,Michigan State University,East Lansing David Nowak,Ph.D.;U.S.Forest Service Northeast Reseazch Station,Syracuse,New York Dan Stynes,Ph.D.,Depaztment of Pazk,Recieation and Tourism Resmirms,Michigan State University,East Lansing Additional consdtation was provided by: . Denise Castronovo,Mapping Sustainab8ity,Inc.,Jupiter,Florida Brenda Faber,Fore Site Consulting,Inc.,Loveland,Colorado Alison Gallensky;Center for Native Ecosystems,Denver,Colorado - Barry Zeplowitz,Bazry Zeplowixz&Assocs.,Buffalo,New York The undedying reseazch for this project was funded in pazt by�the U.S.Forest Service Urban and Communiry Forestry Challenge Cost Share Program,as recommrnded by the National Urban and Community Forestry Advisory Council. The following individuals were extrao�dinarily helpful in finding and providing data,analysis,and images for the City of Wilmington.We thank them fot the'v assistance. • Romain tllezander,Direcror,Department of Pazks and Recreation,City of Wilmington • Tina Betz,Director,Mayor's Office of Cultural Affairs,City of Wilmington • Shane Brey,Promo[ion&Event Manager,Riyerfront Developmen[Cotporation °Independrn[$ecmr.www.independentsecmrorg/programs�research�'volunteer_time.html. �� • Jen Bruhlec,Oucreach Manager,Delawaze Cencer for Horticulture • Deborah Crisden-Boone,Planning Grant Coordinamr,Department of Planning and Development,City of Wilming[on • Ron Crouch,Park Administrator,WBming[on State Parks,Division of Pazks arid Recreation Delawaze Deparunent of Namial Resources and Environmencal Convol • TCDavis;Director,Teledavis,LLC • Martin Hageman,Executive D'uector,DoumtownPisions � • PJ Hernandez,GIS Mapping Technician,Office of the Mayor,Di4ision of Integrated Technologies,Mapping and Graphics,City of Wilmington • Bruce Kallos,Service Projedt Committee,Ro[ary Club of Wilmington • Marina ICap.lan,Senior Scientist,Nemours Health and Prevention Se�vices • Roger Kirtley;Service Project Chairman,Rot.ary Club of Wilmington • Stan Kozicki,Pazks Projec[s Manager,Department of Parks and Recmation,City of Wilmington • Mike Mumelli,Real Estate Tv�atiog Department of Finance,City of Wilmington • Patti Miller,Program and Policy Malyst,Nemours Health and Prevention Services • Susan Moerschel,Program Manager,Park Resource Office,Division of Pazks and Recrea[ion Delawaze Department of Natural Resources and Environmental Control • Lise Monry,Service Project Committee,Rocary Club of Wilmington • Mary Neutz,Environmental Programs Specialist,Department of Public Works,Ciry of Wilmington • Linda Parkowski,Towism Director,State of Delawaie Economic Development Office • Michael Porro,Executive Directoq Friends of Wilmington Parks • Neta Pringle,Service Project Commitcee,Rotary Club of Wilmington • Andy Roy,Park Superintendent,Wilmidgton State Pazks,Division of Puks and Recreation Delawaze Depazfinent of Na[uial Resodrces and Envirortmental Control • Chazles A:Salkin,Directdr,Division of Parks and Recreation DelawazeDepar[ment of Natucal Resources and En4i�onmental Control • Pam Sapko,Esecuti4e�Director,Delawaze Cenrer foi Horticulture . • Gary Schwe[z,Direc[or of Progams,Delawaze Center for Hor[iculture � • DouglasSensabau�,Land Use Department Assessment Division,New Castle Coun,ty • Gary Shannon,Assessment Malyst,Land Use Depaztmertt,New Castle County • Kendall Sommers,Outdoor Recreation Planney Pazk Resource Office,Division of Parks and Recreation Delaware . . . .. . .. . . . . . . . . Department of Natural Resources and Environmental Control • Marcia S[arks,Director,Mayor's Office of Constituent Services,City of Wilmington • Glen Stubbolo,Chief ofUolunteer Services,Diyision of Pazks and Recreation Ddaware Degartment of Natural Resourms and Environmental Control � • Rod Teeple,Aresidrnt,Rotary Club of Wilmington • MandyTolino,PlamingTechnician,Deparrment of Planning and Developmenc,City of Wilmington • Tanya Washington,DePuty Chief of Staff,Mayor's Office,City of WilmingCon • $arah Willoughby,Executiye D'uector,Greater Wilmingron Convention andYsitors Bureau • Bazbaza Woodford,Nature Center Manager,Wilmington State Pazks,Division of Parks and Recrearion Delawaze Departmrnt of Natural Resources and Environmrntal Control • Claza Zakuadnik,Friends of Cool Spring/I'ilton Pazk APPENDIX 2 RESOURCES RELATED TO THE ECONOMIC UALUE OF PARKS Bedimo-Rung,A..L.,A.J.Mowen,and D.Cohen.zoo5.The significance of pazks to physical activity and public�healrh: A conceptual model.Ameri�an7ournal ofPreventive Medreine z8(zSz):gq-c68. Center for Urban Forest Research.Collection of"benefits and cost"research.Davis,CA:U.S.Forest Service, http://wwav fs.fed.us/psw/programs/cuEr/reaeazch/smdies.php?TopicID=z. Charles,J.A.i9q;.Servia Club.r irsAmeriran Saiety:Rotary,KSwarr'u,and Lionr.Urbana:University of Illinois Press. Conell,M.,J.Lillydatil,H.Jane,and L.D.Singell.�q78.'Ihe effect of green belts on residential propertyvalues: Some findings on the poli6cal economy of open spue.Land Econumic.r Sq(z):o7-z�7. Crompton,J.L.zooq.77�e Prosrmate Pn'n2ipk:The Impact ofParks,Oprn Space and�Water Feateinr an Re.riderstra/Praperty YaG�er and tbe Propeny Tax Bace.Ashbarn,VA:National Recreation and Park Associarion. �Z EI4s,S.J.,and K.H.Noyes.cqqo.By the People:AHittory ofAmeru'mu ar T/olunteert,re¢ed.San Francisco:Jossey-Bass. Ernst and Young.aoo;.Analysis of Secondary Eronomir ImpacU ofNew York Crty Parkr.New York:New Yorkers for Pazks. Fukuyama,F.�qgs.Tiu.ct:The Sociul Yrrtuer mul t5e Creation ofPro.rperity.New York:Free Press. Gies,E.zoo6.The Health Bene,fitr ofParkc How Parkr KeefiAmencmu andTheirCammunitier Fit and Healtby.San Francisco: TheTrust for Public Land. Haznik,P.y and B.Welle.Zooq.Mearwing t5e Eronomic Yalue ofa City Park Synem.Wasltington,DC:The Trust foi Public Land,Center for City Pazk Faccdlence. Luaenhiser,M.,and N.Noelwahr.zooc The effect oE open spaces on a home's sale price.Contemporary Ecanamia Pa,ficy�q �3):zq�-zq8. IolcPherson,E.G.iqq8.Structure and sustainability of Wilmington's urban foresy�ournal afArboriru[turezq(4):[74-�9�� Miller,A.R.zooi.Yaluing Open Space:I,anJEronomia.randNeighborhoodParkr.Cambridge:Massachusetts Institure of Technology Center for Real Estate. Nicholls,S.,andJ.L.Crompton.zoos.l'he impact ofgeenways on propertyvalues: E�idence from Aus[in,Te�ras.7ournal ofLei.rure Re.rearcb 37�):3u-;4c. —.zoo5.Why do people choose to live in golf course communities?3ournalofPark and RecreationAdminratration z;(i): 37-52. 1Vowak,D.J.,D.E.Crane,and J.C.Stevens.zoo6.Air pollution removal by urban trees _ and shrubs in the United States.Urban Forr..nry and Urbmi Geenmg 4:us-cz;. Nowak,D.J.,D.E.Crane,J.C.Stevens,and M.Ibarra.zooz.Brooklyrr'.c Urban Foren.USDA Forest Service General Technical Repor[.NE-zqo.Newtown Square,PA:U:S.Department of Agiculture. Nowak,D.J.,R.E�.Hoehn,D.E.Crane,J.C.Stevens,J.T.Walron,J.Bond,And G.Ina zoo6.Araer.ring Urbars Foren Effeiu and Yaluer:Mirmeapoli.r'Ur6me Forert.USDA Forest Service Resource B�illetin.NE-�66.Newtown Squaze,PA: IIS.Depai[ment ofAgricdture. Nowalc,D.J.,R.E�.Hoehn,D.E.Gane,J.C.Stevens,and J.T.Walton.zoo6.Acceumg � Urban Forett Efferll and�Yaluer. Watbmgton,D.C:i Urban Fore.ct.USDA Forest Service Resource Bulletin.NRS-{.New[own Squaze,PA:U.S.Depaztment of Agriculture. Nowak,D.J.,P.J.McHale;M.Ibarra,D.Crane,J.Stevens,apd C.Ldry.iq98.ModeGng the effects of urban vegeta[ion on air pollution.In ArrPo!lutiors Modelingqnd IuAppliration XII,ed.S.Gryning and N. ChaumerGac NewYork:Plenum Press,;qq-qoy. Stynes,D.J.,D.B.Propst,W.H.Chang,and Y..Sun.z000.Ectimating RegrnnqlEconomir Impoctr ofPark Vi.citor Sfiendirsgr Money Generation ModelYenion z(MGMz).East Lansing:Depar[men[of Park,Recreation andTourism Resources, Michigan State University. � Stynes,D.J.iqq7.EconomiolmparuofTourrrm:AflandbookforZourirmProfe.crionaG.UrbanaUniversityofIllinois,Tourism Reseazch Laborarory,http://web4.cancrosu.edu/mgmz/econ/. � Wachter,S.M:,and G.Wong.Jtily ioo6.WLat L aTree Wortb?Greers-City Strategier and Houring Prrcer, http:Ossrn.com/abstract=93�736• Walker,C.zoo.q.The Publra V lue of Urban Park�.Washingon,D.C.:Urban Institute, http://wwwwallacefoundation.org/NR/rdonlyres/gEB459oE-5En-qE�z-BooD-6t3A4zEaqzE9/o/I'hePublic�'alueoE ' UrbanPazks.pdE 13 SPONSORS City of WiUnington/Pazks and Recreation Department and Wilmington Beautificarion Commission Wi I m i ngton TheDepaz[tneri[ofPazksandRecrea[ionprovidescompreHensiveprogrammingthatsuppor[s i�mt,m�ddie�i��au the holisiic wellness of City residentis and provides reaeational,social,cdtural,vocational and educational oppor[uni,¢es for City residents regardless of age or physical ab8ities.The depazt- ment also maintains the lands and facilities under ics management to ensure the continuation of attractive park land[hrough effeciive management. The Wilmington Beautification Commission was conceived by Mayor James M.Baker in zoo4. $ince that time i[has mobilized morethan�,80o volunteers to beautify and caze for our pazks. The WBC mvisionsra city whose inhabitants understand that the role played by pazks and open space goes beyond beauty and amenity,that natural azeas for active�and passive recreation close to home�aze essential Co healthy ur6an 4ving;a city of residenis,businesses and goyernment working collaboratively to ensure that public green spaces contribute towazd the quality of the city they shaze;and a citywhose policies and ac[ions reflect t}tis vision.The WBC includes rep- resen[atives from city depaz[ments,city.council,local nonprofit organizations and city residen[s. Delaware Center for Horriculture b e i n w n n e The Delaware Center for Hor[iculture(DCI-�cultivates�eener communities by inspiring ap- � C E N T E'R F�R preciacionand'urtprodementoFtheenvironmentthrotighhorticulture,educationandcortserva- HQRTICULTURE tion.DCH su p ports i6 active.communi ty gardeas throu�out the ci ty of Wilmin g tou;oi ganizes culiiwaiin ga q.ernn communiry pazk improvement projects�beautifies Delawaze's roadsides idith native vegetation;maintains H��4 H�.o e n o a 1.o rs c the landscaping of mady tirban gafeways,comdors,and stree[scapes;leads regional conseida[ioit projects to enhance Delawaze's urban foresq and provides educational programs for childrert, teens,and adults.Pisit wwwdehortore Division of Parks and Recmation,Delaware Deparfinent ofNatiiral Resoi�rces and Environmental Control � Our mission is to provide Delaware's residents and visiCors with safe and enjoyabk recreational �,, opportunities and open spaces,responsible s[ewazdship of the lands and the cultural and natural i"��'�'�I resources that we have been entrusied io protect and manage and resource-based intecpretive - -----� and educational services.Visit wwwdestateparks.com Nemours Health and Prevention Services Nenxxus. �� Nemours Health and Prevention Services(NHPSj,based in Newark,Delawaze,works with �� SeMCCS families and communities to help children�ow up healthy.A division of Nemours,one of.the � nation's lazgest child Health sys[ems,NHPS espands the organizaiion's teach beyond dinical caze to consider the health of the whole child.With an'uutial emphasis on childhood obesity prevention,tlie goal is to create long-teim policy and practice changes that promote healthy lifeStyles and lead to betEer health oatcomes.Learn more at GrowUpHealth.Yore. Rotazy Club oFWilmington The Ro[ary Club of Wilmingron,as pazt of Rotary International,shazes its Mission Statement "...[o provide service to others,to promote high erhical s[andazds,and to advance wodd under standing,goo"dwill and peace through its fellowship of business,professional and community leaders..:,"add i[s V'ision Statement"�...to be uhiversally recognized foi its commitment ro`Sei vice Above Self'to advance world�urtderstartding,goodwill and peace.° iHE TRUST S� PuBLic LArrD � Con,rerving land for people CENTER FOA CI7'Y PAItK EXCEL[.ENCl THG TAVST FOR PUBLIC LAIVD C)C)O PENNSYLVANIAAVF,NUE SE� SUITE 40I WnsxixsTON, D.C. z000g zoz.543 7552 tpl.org/ccpe NATIONAL OFFICE TFIE TRUST FOR PUBLIC LAND II6 NEW MON1'GOMEAY STREET� 4TH FI.00R Snh FxnNc�sco,CA 94ios 415 495�4oi4 tpl.org About �'his Study Arts & Economic Prosperity 111 was conducted by Americans for the Arts to document the economic impact of th'e nonprofit arts and culture industry in 156 communities and regions representinq all 50 states and the District of Columbia. The diverse communities ranqe in population (four thousand to three million) and type (rurel to urban). The study focuses solely on nonprofit arts and culture organizations and their audiences and ex¢ludes spendinq by individual artists and the for-profit arts and entertainment sector (e.q., Broadway or the motion picture industry). Detailed expenditure data was collected from 6,080 arts antl culture orqanizations and 94,478 of their attendees. The project economists, from the Georgia lnstitute of Technoloqy, customized input/output analysis models for each study region to proyide specific and reliable economic impact data. To derive fhe national estimates, the study reqions were stratified into six population groups, and an economic impact avereqe was calculated for each group. The nation's largest 12,662 cities were then assigned to one of the six groups based on their population as supplied by the U.S. Census Bureau. Each city was assiqned the economic impact average for its population g�oup, and then all were added together to determine the national economic impact findings. The two largest U.S. cities, New York and Los Anqeles, each with more than S1 billion in orqanizational expenditures, we�e excluded from this study to avoid inflating the national estimates. For more information on Arts& Economic Prosperity III, including information on downloading and purchasing allstudy reports, please visit www.AmericansForTheArfs.org/Economiclmpact. Americans for the Arts staff a�e available for speaking engagements. If interested, please contact the Research Department at 202.371:2830 or at research�artsusa.org. In rri�'ou�n ph�l�an.ihropy qnd f'rusmess en.d�arors. I h.ace seen, th.e cr'itica(� r•ole th,at the arts pda.ti'iri sti.m,ulati.r��g cr•eattici.t�Y a,n.d i.n, developing ci,ta.l com,rnunities. As th,is stud.y ind i.cates. th.e arts h,ave a cruci.al impact on otir econom;�-a,nd a,re an im�porta,nt caCalyst for learning, d,i,scover�, an,d achi,evement i.n our country. Pa.uL G. Ai.i.r:N 19�iilandunpirci:uid Ca Pnundrr, Mirrunufl � ��}. L��{—�""-----�� :--=-1 -- -- �� — � . �'"� ' : a .-;d , — � -_ , e _ yI I ��{��I � �. - �.�R, �" � = �_: � 1000 Vermont Avenue, NW, 6th Floor Washinqton, DC 20005 �,/ T 202.371.2830 � F 202.371.0424 AMERICANS E researchc��arisusa.orq ARTSW www.AmericansForTheArtS orq iFefd4loun�nnt�annlnrFanvzaounn�ulnerwilhAmen�nnsf6rrheM�emhr4ppuGhc andpn.ram�secmr�oders unM1aretand�the ecmmrn.m nnd soc�ul Lunejits tha,t tl�e nnn'hnnQ m Hiev mninummes.smley,imd tlie read�mn. : � � � PJL�✓1 x«n,,.r�..w.,rau.. �GfdntIIld�(eI5 � ..... in Phe Arte ., ...�, �,. _,. �.._ �'�� Americans for the Arts is the nation's leading nonprofit orqanization for advancinq the arts in America. Established in 1960, we are dedicated to representinq and servinq local tommunities and creatinq opportunities for every American � to participate in and appreciate al! forms of the arts. - — ___� ��,'� � _�� .�+"___�:Z-TI`=u.' • �-r _-. .�� _ —{_ - - =��+._ � • • C ��--��—� � t _ . . - : -_ ' ' _ _'_ rS� ' � I• "�••~ "• � ��...\ �. � . � . I». _ :..,�- • �_-1" ._.,�' .= =-=:_ , :,i=._-s �� ..'_1:1.,fN (t-.fr•• _, y ;+�� J�� M�.N�Y� � _ __�' jy�� J e j � f �� r �g3 � = �-= r o"�- _ =1' - - `' � r , • � ♦ r �. . -1._� . '�I► L\ "' . `. . . �I —i •�l ri � jV �' �1� r ' . �i f'��•� � - � a � i -. �i ,!(sa':� ._ �� . . '_,�' � .; I , � + .��► . � �y ;y �: . � ` `r ''a l . - / �� , -�►'� _ � __ Arts & Economic `�� The Economic Impact of Nonprofit Arts and Culture Organizations and Their Audiences . t� Y'-a C^ ,: �� p f �_� 1 ��y..y�: ' . " ':,��i�ll .Iq"�-Z_" . ��_ � �xH'�--- d �. - .�, ,� ry' ,1 � ��' .� � ',�� '?�`�-,�. � ---:�� '' A■ �,�M�-�� `��. ' � � � ,.Ls :, � � �; , � 1� ,�, ��,,.�� IF#� � ��"�,i ' i t�c-�-nr .i. �y.� ��. � �^ `-' '`W- S eo�� { , �� '� � � y� � �� i. � Y ��/ - � v ' c-_ � � F i�� \ / ��}—� .� �'.�,,�� • I. ,�,�. s _��i�� . � . � � � I � �.,�" .- p _�� ;� � ��;�� _ - _ _ -: ;�.;,�, .. �,y��s � ,, - � - ��,�r � ��::_ ,: S.._ . ,��e ��I .,'L�_ I tr' i� 6 � �� i� j'� Economic Impact of America's Nonprofit Arts & Culture Industry America's nonprofit arts and culture industry generates $166.2 billi0n in economic activity every year—$63.1 billion in spending by organizations and an additional $103.1 billion in event-related spendinq by audiences. The national impact of this activity is significant, supportinq 5.7 million jobs and generating $29.6 billion in government revenue. ECONOMIC IMPACT OF THE NONPROFIT ARTS & CULTURE INDUSTRY (expendituie�� by both orqanizafions dnd audiencesi Total Expenditures 5 166.2 bflllon Full-Time Equivalent Jobs 57 million Resident Household Income $ 104.2 billion Local Govemment Revenue S 7.9 billion State Government Revenue 5 9.1 bllllon Fedzral Income Tax Revenue 5 12•6 billion There is n,o better in,dicator of the spiaitua,l health of our ci.ty, its n,eighborhoods, and the larger regioa than the state o f the arts. The a rts deepen our understanding of the human spiri.t, es�tend our ca,pacity to com preh,end the lives of others, allo�u, us to i�mah�ine a m.orejust and htamane world. Through their dtiversi.Cr of feelting. their vartiety of f orm,. thei,r multipli,eity of�inspiration, the arts make our culture ri.cher and m.ore reflective. ,IONATHAN FANTON PresiJeni. MacAnLur Fowidation NONPROFIT ARTS & CULTURE: A GROWTH INDUSTRY Behveen 200o and 2005,the nonprofit arts and culture industry • �,rew 24 percent, from$i3�,billion to $i66.2 billion. Spending bv organizations grew to $63.� billion in 2005,up iq percent from $53.z billion in 2000. Event-related spending by their audiences boasts an even greater increase—from$80.8 bIllion in 200o to$io3.i biIlion in 2005 (28 percent). GROWTH OF THE NONPROFIT ARTS S CULTURE INDUSTRY �US. Dollars in Billionsr � ��ii�,�cn ::,�,inns<vrvCn�.lvr�- i � oi�r,nniruui,�xr:eun�ui.5 � oxcnrviiaimrv tsv�HoiiuuEti � AuUi��rn:e arl>enUilu,e�ald ilol ColleCfetl in 1992. ECONOMIC IMPACT OF NONPROFIT ARTS & CULTURE ORGANIZATIONS Nonprol'it arts and culture organizations are valuable contributors to the business comrnuruty.They are employers, producers. consumers, and key promoters of their cities and regions. Nonprofit arts and culture organization spending in zoos was an estimated $63.i billion. IMPACT OF NONPROFIT ARTS fi CULTURE ORGANIZATIONS Total Expenditures 5 63.1 bfllion Full-Time Equivalent Jobs 2.6 million Resident Household Income S 57.3 billfon Local Govemment Revenue S 2.8 billion State Government Revenue 5 3.5 billfon Federal Income Tax Revenue $ 6.9 billion ECONOMIC IMPACT OF NONPROFIT ARTS & CULTURE AUDIENCES The arts and culture industry, urilike many industries. leverages a sig�ificant amount of event-related spendin�, by its audiences. Attendance at arts events generates related commerce tbr local businesses such as restaurants.parking garages, hotels. and retail stores. Data collected from 94•4Z8 attendees at a range of events reveal an average spending of'$zz79 per person, per event—in addition to the cost of admission. This spending generated an estimated $io3.i billion of valuahle revenue for local merchants and their communities in 2ooj. IMPACT OF NONPROFIT ARTS S CULTURE AUDIENCES Total Expenditures $ 703.1 billion Full-Time Equivalent JoUs 3.1 million Resident Household Income $ 46.9 billion Local Govemment Revenue 5 5.1 billion State Govemment Revenue 5 5.6 billion Federal Income Tax Revenur 5 57 billion The findings also reveal that nonlocal attendees spend twice as• mueh as local attendees ($qo.�q vs. $i9.53), demonstrating that when a community attracts cultural � tourists. it harnesses significant economic rewards. Acroa�a.4n�.ericu. ciTie�' ll�ul once strtA��,l.ecl econornicalli�ar'e rein��enti,r�g and rebu ildin,g Gh,emsel ces b� i.n��esting i n a rt an�d culture—a procen catal7st forgrowth and econ.omi� prosperi,tr. Br creati.n.�cultura,l hubs. nonpro fit arts businesses help ci.ties de fin.e themselves, draw tourist,s. ci n d attract tinvestment. Federal suppor�t forAmerica's nonprof i',t eu,ltura.d orba.niwa.tions maestgo on if u�e h.ope to continue enjoyi,ng t:he substa,nti.a,l.ben,e f its th.ey bring. l,�uisc M. Si.Aucii�rt;H C.6.IInu.��il'R��ir��.vnmiicrn(NY7 I:u CL:ur.Cunp'rrssiimAl4r�sl:nurun The Art � Mean Bu.sine � � I-'i-i. �i �-icj:;: �� i� �.:Gj��l i S:. ... -�a� �.:, ��.lci, :�UI-di towns, this research shows that the nonprofit arts and culture industry is an economically sound investment. It attracts audiences, spurs business development, supports jobs, and qenerates government revenue. Locally as well as nationally, the arts mean business. Mayor•s understand the connection between the arts in.d,ustry a,n,d, eity reven.ues. Besi,des provi,ding th,ousands o f jobs. th,e art's gen,erate hi,lli,ons i.n governm,ent a.n.d business rever�u.es a,n t�pl,a.p an, i.mporta.n,t role in th.e econ om,tic revi,talizc�ti,on o��our rtiati,or�'s ci.ties. UOUCI..AS ��. PALMF.R Mavur�if'I'rrntun Prrsidrm.'Pfir llnilyd$lalvs I:�inl'rrrnrr uf Mnvurs 7'h,e arts h.ave been a�nd continue to be an importan,t pa�rt o f An:zona's eulture. By ignitting the m.tind. th,e arts ca.n spa,rk new ways o f tha;nk;i.ng. com.m,uni.cati.ng. and doing business. .IANF:T NANOI.11'ANO Gu�rrnurufArv.una I:Lair.Nuliunal I;uvrrnnrs 4xxurixiion Arts&Economic � , Prosperity ' �5 """KARTS The Economic Impact of Nonprofit Arts and Culture Organizations and Their Audiences in the City of Tacoma, WA �F�v �oos, Arts and Culture Arts and Culture Total Economic AMivity Orqanizatlons + Audiences — E�cpenditures ---------------ry__ ..--------------------------------.._ . ._. . ___------------------ ----------..._......_........... Total Indust Expenditures 518.896,260 517,862058 $36.758.3�8 Spending bp Arts •rnd Culturc Organiza[ions and Thcir Audiences Supports Jobs and Generates Go�ernment Rerenue Eeonomfe Impaet of Expendlturea Economic Impact of + Economic Impact of _ Total Omanizatiwis Audlamces Economic Impad Full-Time Equivalent(FTE)Jobs Supported 541 426 967 Household Income Paid to Residents $1�,966.000 �6.01D,000 $17,976,000 Revenue Genera[ed[o Local Government $723,000 $777,000 $1,500,000 Revenue Generatedto State Government $919,000 $949,000 $1,868,000 Event-Related tipendin£bc Arts and Culture Audienccs "Ibtaled $17.86 million excluding the cost of admission) ResidemY Non-Resident' All Attendance to Arts and Culture Eventa + _ Attendees Attendees Attendees -- ----- ---__ ..__. .__ .. _ .. . . ___._ _ ._.--- ------ ----- - ------ ---------- Total Attendance to Arts and CulNre Events 514,149 357,733 871,882 Percentage o(Total Attendance 59 41 �00 Average Even[-Related Spending Per Person $16.95 $25.57 $20.47 Total Event-Related Expenditures $8,714,825 $9,147,233 $17,862,058 Nonprufit Ar�s and Cullurc 1?ven� ��Ytend¢es Spend an Accr��;c nf$20A7 Per Pcrsun Icxcludim„ the cost of admission) Category of Event-Related Expenditure Resident" Non-ResidenH All Attendees Attendees Attendees -------------------------------------------------------- --------------'-----.._._..------ ---'--------------------------- --------------------`-------- Mea's and Refreshments �11 DS $13.81 $1259 Souvenirs and Gifts $2.09 $1.58 $1.88 Ground Transportation $1.17 $2.50 $1.71 Overnight Lodging(one night only) $0.40 $4.84 $222 Other/Miscellaneous $2.24 $1.84 $2.07 Average Event-Related Spending Per Person $16.95 $25.57 $20.47 " Residcnts are attendecs who reside wi�hin the county in which the nonprofit ar�x and culture event took place;non-residents live outsidc thc county. Sourcc:.9rts& Ecananic Prosperin�111: The Econnmrc lmpuc�oJ NnnproJil Arts und Cu/ture Organi_atians and Their.4udienres in tlte Crh�o/�Tucoma. For more infortnation about this study ur abou[other culwral initiatives in thc City of Tacoma,visit the Tacoma Economic Devclopment Dept.'s web site at www.cityoftacoma.org. Copyright 2007 by Americans for Ihe Ans(www.AmericansForTheArts.org). � � � .,,�„��,�,�� ,� <<„ :�; �� , ,� � YOUi SLpp01"Y Of dl'tS, CUItUI"dl epnibnl«here i��hcohfc can��dh r. . and scientific organizations keeps e��gP rdP�s��,d��n�e�i «�ii i A � ` � I 5. OUl" COI"YlI7lUlllt Vlbl"dl"i[. eachother. Understandingaboul _ an mdiuidual comrnumh�hidr, " � imderstmidinti oFoncs cultu�; ��, :r�i'I �� ' ARTS IN OUR LIVES � ,i��-��. '��`rn�i?�n�:�� i �' From artr to zoos, [his regicn's cultural organizations give us endless and fasr.inating ways to undzrstand The 2009 Economic Impact Study was made � � ' the world around us They help unleck the mystery possi6le bya major grant o/Tha Pau1 G.Al1an Family and 6eauty of the physical wortd and of the human Foundation.Furthersu � �€ µ pport was provided by a grant . heart and mind They inspire inncvation and creativity, /romThe 8oeingCompany. ��`'y � add tc cur sense of place and enhance our quality � ` �'-..« ,:��i'a of life.At[he SamO [iRle,OUr CUltulal o�ganiZations PREPFRED BY q� ' � � enhance our position in a global marketplace and or wdi�am e ae�ers aMn aezearrn corporanon C1fiVe ouf f2glOfldl dfld Sldt�eCOnOlTlies Departm<ntof xography, 325118°�Avenue SE.Su¢e 104 — 8ox 353550 eeltevue.WA 98005 ARTS IN OUR ECONOMY un��e�s�ryorwasrnng�o� razsaaoeaouir�:saeoe�99 � _�`a Seattle.WA 9819`� Thisstudyinduded357organlzationslnKing. Kitsap, i�o55a_Se�tlFzoesas�L Pierce and Snohomish Counhes in Washingron It oeye�s2uweau - included eight disciplines or types of organizations. — �� • ` � artS SeNiCe ofgafnZations,dance,fe5tivals, h2ritage. PFO]ECT SUPERVISION music,sclence,theater and visual arts The Great ow�gne aee nryra s��m.,o�,s �� . Rewssion of 2008-09 has resWted in razor Ihin profit Executive Vice President. Prcgram��crd�na:or. i �. margins ror many organizations In an apples ro- nrtswnd ar<sFuna " � �� t:" '� apples comparison with ArtsFund's 2003 study we see 'I� p� ��f" �'-'°�� ' astead numberofvlsitorsbutaninaeasedreCiance vho1oa1e°°'nmd� ��', ...,. �.� � .J Y .J .Jf ,J CoerCh�ld . atU�;ngme2anePtlkmsshow,GunlMagneeFesova Pnxc �n VIS��Un�eV anV I�ee dlImISS�OnS,(�1 fef�eC��n(�[ SYL�'�stOpl`p NPIO .r$[CCkOIIOfOS:P(]Iy0'Npol CI SI.PO IPIGC'[YDdnC2 � ' CeteiSCUBA2010FnotoOyrimS:mmers _ � � least in part of these econcmic times. Despite this r :ae aa„ei aa i ei aosre�a„a rr�yo�ca�„e:.o� :iu Pa��F�Nonnwes�eauer �� . � discounting,cultural organizations continue to �noro eyn�Gzi s�eri��q _ f � Insde:Wootlla.tlParkZoo.FhoroOyRyanHawkS aleArtsbCecmrecW�ter � _ provideasignificantemnomicimpaci. 0urchallenge :,,mes�n�a:po9amvnomers�sev�an��9n� .a��May�eenm,:o�es � - - continues to be how to suppert these organizations vno�o oywa�oca.o�a�a , i i . so they cam m�tinue adding value to the economy �� . - and our lives - `� Y� � , "artsartdrultureareamennsof t�RT$ FUN � � '' � PO Box 19780 A � r S �' U N � ' p �� «„�imunimtionthatenrouragepeaplero 10 Harnson Street.Saire 2001 Seattle,WA 98109 A$u�ninan'cfa 2009 E'tomm�it 6npacf StudP oJArh. � empathi�enndeipandtheirho��nns." rmezaieowlFinazeievs www.artsfund org I info@artsfuntl org Culfu�al and Sdenfiht Or�ani:otions I Source:Patron Suruey i King,Kitsap.Pierce,and Snohomish Counties,Washington I Full stutly releasetl January 2011 � i Brochure tlesign generously donatetl by EXCLAIM ReleaSeA danuary 2011 . . . _ .. . _ _ __-- --- _I Impacts 2009 NEW MONEYIMPACTS Providing Jobs for Our Communities In fiscal year 2009, nonprofit cultural organizations ON PUGET SOUND REGION In additlon to directly employing paople,cultural m Central Puget Sound had income budgets of 5488 New Money Sales Impacts 5573 million organizations create a ripple of econcmic activity million Patrons spent$712 million on tickets,dining New Money Labor Income Impacts $247 million and additionaljobs through their business activities ouL Icdging, transpertation, child care services and New MoneyTax Impacts $43 million and the economic activities of their patrons In et"ei x endi.urA� The imp�ct f thase expenditures New MoneyTotal Jobs Created 8,2R 2009, activities of Central Puget Sound cultural re,� h a� r;s th � :nomy r r th� �_ntire. a[e organizations and patrons aeated a total of33,920 direct and indirectjobs 20091MPACTS ON WA STATE'S ECONOMY 13.2 Million Visits in 2009 Ag9regate Sales Impacts S2 billion Annual admissions in 2009 totaled 132 million visits, Edf�y EXpOSUYe CfItICa� Labor Income Impacts $937 million mcre than three and one-half times the total populatien Fully 90 percent of current pa[rons of cultural of the feur ceunties Of these annual admissicns,14 organizations said they received Iheir first exposure Tax Impacts-Aggregate $87 miUion te cultuial activities while in grade school This Total Jobs Created 33,920 m��ll!�;n werz due a_�K-12 students expzrienang cultural . institunons using free or discounted tickets reinforces the Importance of early exposure Unfortunately, school cutbacks now limit many children's cpportunities to benefit from Cultural Organizations Bring in A Delicate Balance Between Income �ne5e ou�o�c��c�es New Money Cultural organizations attract patrons both insde and EXp21lS2S and outslde thelr communities. Apprcxlmarely one W'ith tota! incerne budge�s of 5488 million and total quarter of economlc Impacts came from funding expensas of 5482 miWon, cultural organizations are sources and patrons outside ef the feur-counry area lust breaking evzn Given the diffir.ult state of the These impacts are considered "new money"—funds economy during 2009. the fact that income was _ r � a [ha[come here only because of the activities of loca! slightly ahead of expense—in aggregate—points �_ �M cultural institutions to the svong management and resilience of � � �,/ these grcups '� _ __'_ __. . ..s.'�y' Benefits. ''�lhr GcoCs In-Kina 8% �M,isc rnmme 3% 6 Services 10.2% ■iaxes 0.4% 100 FoundaGon 5%■ ■EameO 54% U[ilines Tickets 3L B Phon=31% ■Employee e0 ■TransportaEon 28% Corporate 4%��, � '�->oenses 51.8% Sermces 30.1% §Meals/Retreshments 16% I b� .I OdO�I(1(]SZYo 3o �� Souvenirs/Gks 4% Ir�rviduaR4%P - 9 Child Care 1% �o �, Contract u(9[her 6% Govemment 12% Intlividuels 6 o C�----..-- Frms4.5%■. — PATRONEXPENDITURES AGGREGATEINCOME AGGREGATEE%PENDITURES Spending by cultural patrons reaches far beyond the ticket CWtural organization;eam slightly more than half of what Most direct spending of adtural organizations goes for office Restaurants, hoteLs. retail shops and t2nsportatiom they need to covertheirexpenses from ticket sales The employee expenses These are expenses forjobs inside related enterprises acm�mt for almost 70 percent of remainder comes from a variety of contri6uted sources the organizations and jobs with service providers outside spending related to attendance at cultural activities Becaus=the pipeline of qovemment support is cornparativery the organizations longerthanforotherfunding souices,the sharerepresented here does not f ully reHect the seveHty of govemment- funding cuts at the time of •ort's pubfication Arts&Economic ,� ProsperityA � a � �'�`ARTS The Economic Impact of Nonprofit Arts and Culture Organizations and Their Audiences in the City of Tacoma, WA �Fv �oos> Arts and Culture Arts and Culture Total Economic Activity Orqanizations + Audiences Expenditures _ ._ ------- _____. ..... ---"---- -'------ _......... -------- -----. ..._.._ .. ..------ --_... _._..-------...---. _ . Total Industry Expenditures' $13,896260 $17.562,058 $36758.318 Spending b}� :1r[s and Culture Organizations and Their Audiences Supports dobs and Cencrates Governmen[ Re��enue Economic Impact of Expendltures Economic Impact of + Economic Impact of _ ToLU Oraanizatfons Audiences Ewnanic Impact Full-Time Equivalent(FTE)Jobs Supported 541 426 967 Household Income Paid to Residents $11,966,000 $6,01D,000 $17,976,000 Revenue Generatedto Local Government $723,OOD $777,000 $1,500,000 Revenue Generatedto Sfate Government $919,000 $949,OD0 $1,668,000 E��ent-Related Spendin}; b�� Arts and Cul[ure Audiences Totaled�17.86 million (excludin�,the cost of admission) Attendance to Arts and Culture E�ents Residant" + Non-Resldens" _ All Attendees Attendeas Attendees --�---------___ —�--------- ------------ -_.__- .....� - ----.. _.......- - ----------- ---.._.. --- ---- ---- Total Attendance to Arts and Cufture Events 514,149 357,733 871,882 Percentage of Total Attendance 59 41 �00 Average Event-Related Spending Per Person $16.95 $25.57 $20.47 Total Event-Related Expenditures $8,714,825 $9,147,233 $17,862,058 Nunprufit:lrts and Cullurc b:vent Attendees Spend an :1verage of$211.47 Pcr Percon (excludin�[he cost of admissiu�q Category of Event-Related Expenditure Resident' Non-ResidenY All Attendees Attendeea Attendees ------_...___._`_.._...-`-----`-------------------------- -----------------`----- ------------ ------- Meais and Refreshments S�LGS $14.81 $12.59 Souvenirs and Giks $2.09 $1.58 $1.88 Ground Transportation $1.17 $2.50 $1.71 Overnight Lodging (one night only) $0.40 $4.84 $2.22 Other/Miscellaneous $2.24 $1.84 $2.07 Average Event-Related Spending Per Person $16.95 $25.57 $20.47 • " Rcsidents are attendees who reside w�ithin the county in which the nonprofit arts and eulture event took place; non-residents live outside the counry. Sourcc: Arts& Economrc Prnsperih'1//: Tlre Ecanomre(mpnc!oJ Nonprqfit Arts und Cidt�ire OrKanisalion.r und Their Audiences In tl�e Citn of Tacoma. For more informution about this study or about other cultural initiatives in the City of Tacoma,visit the Tacom� Economic Development DepL's web site at www.cityofiacoma.org. Copyrighl 2007 by Amc�icans for thc Arts (www.Amcricai�sforTheArts.org). //� .�\��O �� //� - �� \ ;.�•\��\\\\ /� ///�O\\\\ /��\\ O �� — = ,��\�; � � ,c�\��%i�, ,,�� % a\\ ..' '� , `.. � � `� /;�� ';, �\ \\`, �� /�� /�/'/� � �� °;;�\\�� O ;;J\� , • rea lve Arli�l �7�1i'kIY�E'C�l :d�lrrt'I��r�� t, L"r��,,Err;oitir� Rr�.��r��r��{s ;�'��•��i��.�� Tl�le Gadwa Metry•is A�r�ts C��raSulti:�ag . `�/ A White Paper for The Mayo�s'I�utitute on � City Design,a leadetslup initiative of the Natio��l Endow�nent for the A�Ts in partnetslup N A T I O N A L ��P C�nited States Conference of Mayo�s ENDOWMENT FOR TNE ARTS BIId AIl7fT1C271 ACCIllCCCCIII'�F011IlCI8t10R. CRE�TIVF DL:CENAkIMC CREATIVE PLACEMAKING: EXECUTIVE SUMMARY In creative placemaking, partners from public, private, non-profit, and community sectors strategically shape the physical and social character of a rieighborhood, town, city, or regiort around arts and cultural activities. Creative placeniaking animates public and priva,te spa.ces, rejuvenates structures and streetscapes, improves local business viability and public safety, and brings diverse people together to celebrate, inspire, and be inspired. In turn,these creative bcales foster envisions a more decentrelized portfolio festivals that revive emptying downtowns entrepreneurs and culturel industries of spaces acting as creative cruclbles. and attred regional visitors. Large cultural that generete jobs and income,spin In each,arts and culture exist cheek-by- institutions,often inspired by their smaller o$new products and services,and jowl with private sector export and retail counterparts,are increasingly engaging in attred and retain unrelated businesses businesses and mixed-income housing, active placemaking. and skilled workers.Together, creative often occupyfng bulldings and lots that placemaking's livability and economic had been vacant and under-used.In large This white paper summarizes two decades development outcomes have the cities,many such hubs reflect the ethnic of creative American piacemaking,drawing potential to redically change the future or historical charecter of place and invite on original economic research and tase of American towns and cities. residents and visitors alike across porous studies of pathbreaking initiatives in large boundaries to visit,patronize,and enjoy. and small cities,metropolitan to rurel, Instead of a single a�ts renter or a duster In smaller towns,traditional cultural as well as published accounts.The case of large arts and cultural institutions, practices and landscapes are transformed studies stretch from Providence. Rhode contemporery creative placemaking into distinctive cultural renters and Island,to Los Angeles,California,and • � : • • � s � �. �� ,� r • � " �• • +�r r � ��• • • � •• •• � • . .� ...i'�.�I ', . .. .. .r, i�,�.. 4 �� CREATIVE ECONOMIES HOST � . 2ruillioiiartists . :t.�i million cultural workers . 9.9 millia�culiw•al industry jobs n CREATIVE PLACEMAKING � FOSTERS ECONOMIC DEVELOPMENT . Recirculates residenCs'incocnes locally at a higher rate . Ne-uses vacant and w�derutilized la��d,buildings, and infrastruct�ure � ('reatc:s jobs in constrnction,loca] businesses,and�nitura]activit,y . Exp:u�cls eutrepreneurial ranks of artists and designers . Trains the next generation of cultural workers . Attracts and retains non-arts-related busuiesses and skills � CREATIVE PLACEMAKING FOSTERS AMERICAN � LEADERSHIP IN GLOBALLY COMPETITIVE INDUSTRIES . �i�n i�� . Social media . Broadcasting . Advertising . Publishing . Design services . News meciia . Architecture . Musical rewrdings and video . Pideo games C jl CASES OF CREATIVE PLACEMAKING � Three Cleveland west-side theatres, one owned by a conununily developnient cor�>orltion,lead the redecelopment of a commercia] corridor as Gordon Sqi iare Aris District. . Bi�alo's Mayor and a non-profit arts developer transform a vacant auto plant inYo artist studios and housuig,uifusing the nei�hborhood witli creative and economic activity. . Portland's new transit stations incorporate as�tw�ork that reflects clistuictive nei�iborhoods and encourages rideiship. . San.Iost's O1SJ F3iemual marries art and tectu�ology to�enerate new praiucts, bring people downtown,and showc�se the CiPy's diversiry. CREATIVF�LACFMAN WG 5 from Arnaudville,Louisiana,and Fond du As culturel industry incubators,creative Lac.Minnesota,to Seattle,Washington. places make valuable contributions to the CHALLENGES Each reveals a distinctive strategy national economy.More than z milGon FOR CREATIVE that succeeded when initiators built Americans support themselves as artists, pLACEP'�AKING partnerships across sectors,missions,and and the ranks of cultural workers exceed levels of government,leveraging funds 3.8 million,or almost 3%of the nation's . Forging partnerships from diverse sources and progrems. workforce. Many are entrepreneurs,some employ others;65%of writers,57%of ' COUIltfilIlg COIMIUIIlIy Creative placemaking serves livability, visual artists,and qiv of musicians are SkeptlClsm diversity.and economic development self-employed. . Assembling adeqUate goals.Livability outcomes indude ��azl�jpg heightened public safety,community Artists and related cultural workers identity,ernironmental quality,increased provide the core expertise for American � CIeazlllg cegtllatAry hUI'dles affordable housing and workplace cultural industries,supporting dose . EnS1lilIlg malntenanCe and options for creative workers,more to 5 million jobs.These industries—the SUStBlnablllty beautiful and reliable transportation performing arts,movies,television, choices,and increased collaboration broadcasting,sound recording,video � Avold'ing dlsplacement and between civic,non-profit,and forv games,design,advertising,publishing, gentllllCatlon profit partners.Economlc development tourism—are among our most competitive . Developing meffics of quickens because arts and cultural intemationally,producing billions of pet'fOtTnanCe investments help a locality capture a dollars in export earnings. higher share of ezpenditures from local income. Instead of treveling elsewhere Creative placemakers confront daunting for entertainment and culture,or going challenges.Many have stumbled along the to a big-box retailer or shopping mall, way.Others have been slowed down or SUCCESSFUL residents are patrons of local talent suffer growing pains.We asked leaders of CREATIVE and venues,earnings that re-circulate successful efforts about the challenges they pLACEMAKING at a higher rate in the local economy. faced,how they met them,and what lessons Re-using vacant space generates local they learned.In addition to overcoming � Ptompted by an ItiltlatOi Wlth property and sales tax revenues that can fiscal challenges stemming from the Great uutovatiVe ViSlon altd dCiVe be devoted to streets,lighting,sanitation, Recession,many creative placemakers greenery,and police and 6re.Additional have navigated similar obstacles,namely: � TtilOTS Str'8te�to Cllstliletive jobs and inmmes are generated in diHiculties in creating partnerships, f08tUCe5 OYp18Ce construction,retail businesses,and arts countering skepticism on the part of � MOb111ZE5 pllbllC wlll and culturel production. New businesses, communities and public leaders,assembling in the creative industries and okhers,are adequate Rnancing,dearing regulafory � f�l;l".PBCYS pI7V8tB SPCY.OI hUy-I11 atlracted to these communities. hurdles,ensuring long-term maintenance . E o s su ort of local arts and sustainability,avoiding displacement � y PP Place has always been important for the and gentrification,documenting progress, and cultural leadeis emergence of new products,industries, and developing performance metrics. . Bui1C15 psr(neiships aCross and jobs.We find that creative places are These insights are as important as their sectoi5,[nissions,and leveLS cultural industry crucibles where people, achievements for informing policy and of govermrient ideas.and organizations come together, encoureging other communities. generating new products, industries,jobs. and American exports.They nurture In the United States,creative placemaking entrepreneurs and expand the ranks of operates at all geogrephic scales and self-employed artists and designers who with a diverse array of initiators and market their creations far afield.Training partners.We identify six components grounds for area youth, they incubate the of a successful strategy,drawn from nezt generation of creative workers and in-depth interviews.Each effort starts entrepreneurs.Because jobs increasingly with an entrepreneurial initiator; follow people.rether than vice versa, demonstrates a commitment to place they draw and retain other businesses and its distinctive character,mobilizes and workers to their rich,lively,and public will,both in local govemment diverse enviro�s.' and the citizenry:attreds private sector _ i cl �: i .,P.. .. 6 support,either from cultural industries or � ��. � � - place developers or both;wins the active F � participation of arts and cultural leaders: and succeeds in building partnerships across sectors(for-profit,non-profit, � � government,and community), missions .' ' ;, (e.g..wltural aHairs,economic and "�- ��_ � � workforce development,transportation, i - 1 housing,planning,environment,and � health),and levels of govemment(local. " �, ��\ state,and federel). �� ` _ Our research finds that through , � creative placemaking,arts and culture � , _ make substantial contributions to local - economic developmenk livability,and � �, ' cukural industry competitiveness.These - _ � contributions have not been given their � � � � due in public policy. Many city and ' j small-town leaders are beginning to - - understand these connections.Some are 1y,,, -�I,��i„�%, ��+ .s,�,;.:,, i ,�. ;;-, : 7'�„rr�„� modeling their initiatives on pathbreakers elsewhere,tailoring them to their own distinctive assets and challenges.At the state and federal levels,politicians. I policymakers,and agency heads see the potential for arts and culturel activities to �.- �� improve the effectiveness of their missions r �`� in transportation,housing,workforce t _ "w � I . � , `_ �. development, health care,environmental - � . remediation,and education. Exemplary �,' � cases of creative placemaking suggest �`�'�' }'-� that a collaborative policy platform<an ,^ .. � �. j ,�, � be de�eloped across agencies,levels oF I ,e- �--�. '� • �"R�yt �'�'��r� govemment and public/non-proRt/private M1�g - �� '`�"c:�� sector organizations.This platform should .g„�' .�..�,�-�. . _�� a be constructed from evidence on what t ~""��_ .. ,,b �'_ ' works and where,and it should include ,� � { 4 �,� evaluation from the start. ;, --"': �.��.� � ��'k� � . �, r _ , _ ♦':.�y . Ahs and culture at this historicjuncture are �+ ,�..�� F � proving their power as economic and social ' -� ` "'��1�� - � - catalysts. Through smart collaborations � � � �.�� T � �� with other sectors-government,private ��. ,.� ' :� ;�^. �• business,foundations-they are creating �, � opportunities for rejuvenation and � - _ emnomic development,anchored in ��w�-��Y � and tailored to diverse communities.The �r ""' � ' '� � — _ .- arts wn be a fulcrum for the creative �. � � transformation of American cities. ♦ - -- - �" . 'Ann Markvsen and Greg Schrotk,"The Orbsbc � " �� y �_ Dividend:Urban Artistic Specialization and EconoMc � �k,� _ Development Implications;'Urbon Studies q3.na. — - _--- .. - '- �O(2006):1661-1686:Richard Florida,The I)ise o�the , �- . . . . . . .�. . „� � , . .. r. � . � , .,. Creotive Gass(New Vork,NV:Basic Baoks,�002). „ ,.� . �,�-,:� n, I i;.. � II oi'Aeis. CRE4iNE PL4CEMAKING ] \ ANN MARKUSEN, Principal, Markusen Economic Research Services Ann Markusen holds a PhD and MS in The Economics andPolitics of Territory(1987)� • <lrtists'Centers:Evolution and Impact on Economics from Michigan State University High Tech America(i986),and Profit Cyde, Careers,Neighborhoods and Economics with flelds of expertise in urban and regional Oligopoly and Regional Development(1q85)� (2006,The M�Knight Foundation) emnomics,economic development,public finance,and industrial organization.An Markusen's recent work focuses on urban Markusen has given keynote addresses expert on urban and regional economic revitalization,pahicularly on the contributions on the creative city and the roles of artists development,she has testified before of arts and culture,human capital,and public and arts and culture in urban revitalization Congress and served as President of policy.Her recent publications include: in Europe(Finland,Germany,Frence, the North American Regional Science UK),Austrelia,Brazil,Japan,South Korea, • 'Arts and Culture in Urban and Regional Association,Brookings Economic Policy planning:A Review and Research Agenda" Canada,and in many cities and smaller Fellow,Council on Foreign Relations Senior (Journal o(Planning Edumtion and towns around the US. Fellow,and Member of the Presidential Research,2oio) Commission on Offsets in International ♦ Los Angeles:Amerimi ArtistSuper-City Markusen is a frequent advisor to mayors Trade.Markusen won the William Alonso (zo�o,Center for Cultural Innovation) and city councils.state governments,and Memorial Prize for Innovative Work in ♦ Native Artistr:Livelihoods,Resources,Space, the federal government.She has worked for Regional Science(2006)and the Walter Giftr(2009,The McKnight Foundation) Chicago Mayor Narold Washington's Steel Isard Award for Outstanding Scholarly ♦ San Jose Creative Entrepreneur Project: Industry Task Force,the Michigan House Achievement(1996).In 2010-1�,she is serving of Representatives as StaR Economist,and as the Fulbright Distinguished Chair at the A't'sts'Resource and Space Study(2008) the Government Accountability Of(ice in Madntosh School of Architectures Glasgow and Final Report ondRemmmendations �,yashington.She is a widely sought public Urban Lab,where she is conducting a US/ �zoo9,Center for Cultural Innovation and speaker across the US and intemationally UK comparative study of creative cities. City of San Jose) on economic development.Markusen has � Artist Data User Guide(2008,Leveraging held professorships of three to ten years Markusen has published more than a dozen Investments in Creativity)exploring the each at University of Coloredo,University books,include Reining in the Competition for demographics of state and metro artists of California Berkeley,Northwestern from 200o Census data Capifal(2007).From Defence fo Deve(opment � Crossover:HowArtists BuildCareers across University,Rutgers University,and University (2003).A�ming the Fufure:A Defense Industry Commercia(Non-pro�i�t and Community of Minnesota,teaching in the field of for the 27st Century(19qq),Semnd Tier Cities �n/ork(2006,The James Irvine Foundation, economic development.l-ler publications (1999),Trading Industries,Trading Regions can be downloaded from her website at The William and Flora Newlett Foundation, 6993),Dismantling the Cold War Economy and Leveraging Investments in Creativity) http:www.hhh.umn.edu/projects/prie. (t99z),The Rise of the Gunbeft(t99�),Regions: ANNE GADWA, Principal, Metris Arts Consulting Anne Gadwa is principal of Metris Arts on ahists,the larger arks emlogy, academic arts sectors can work more Consulting,which provides data,analysis, neighborhoods.and the regional economy. effectively with a large concentration of and planning support to help communities ♦ ':4rts ond Culture in Urban and Regional Somali residents in the Cedar Riverside strengthen the arts and help arts activity P(anning:A Review and Resenrch neighborhood in Minneapolis.(Cedar strengthen communities.An experienced Agendo'"(Journal of Planning Education Riverside Neighborhood Revitalization researcher,Gadwa holds a master's degree and Research,2070) Program,Minneapolis,2009) in Urban and Regional Planning from s San Jose Geative Entrepreneurs Project: the University of Minnesota's Numphrey Artists'Resource andSpoce Study(Center Gadwa's past professional experience in Institute of Public Affairs and a B.A.from for Culturel Innovation,Los Angeles,2008) choreography and managing finances and Oberlin College.Gadwa has authored major • De(ining,Measuring and Comparing operations of non-profit arts organizations studies andjournal articles,including: Place-Based Public Investment Outcomes (Movement Research,NV,200�-2005 and • w HowArtistSpace Matters(Metris Arts �Lincoln Land Institute,Cambridge,MA, In the Neart of the Beast Puppet and Mask 2009) Theater,MN,zoo5-zoo7)informs Gadwa's Consulting for Artspace Projects,2010), � yyorking E�fectively with Somali Residents work.For more information and to download a pathbreaking study of the impacts of three artist live/work projects in Minnesota Through the Arts,a study examining publications,visit www.metrisarts.com. how the non-profit,commercial and � New jobs, thriving bi�si�zesses and bustling comrr�uriitzes — where the arts go, these follow. � � ��, � � � � CREATI VE � � . � VITALITY �. ' ' � In Washington Sta�, - -� - � `` 4 'r,� ' I =�L,:� f ��l' �� ..�;2�1; �-_�=., u - � ` , ' _ \ � � ' �� '�� v �� , i ,� _ ` 13ackstage ac$eatde's Inciman Theave � �� WASHINGTON STATE ARTS COMMISSION -_ -:::.:- Introduction ._ . __ , , � _. , , , a The baseline score for xhe CreativeVitality Index is I.00; • i„2005 we ce,med wirh WSSrnF,,,d this is the national score using the same dau streams used H�e SeacHe ofEice of Ares,nd C�dmr�l locally. A region's score reflects a value relative to this AFf�irs ro establish the Geative Vitali[y cndex(Cvq co hetp us co�mdersta„d national baseline;a score of I.00 or greater means that che concexc of arrisr;c a„d creanve che area has a relatively strong arts sector. emerpreses,ed��c��e u,e mnv,nuvty�c Since che lase CVI,chere have been several changes to ]a�ge�bout d,e cre�r;ve ecrn,omy,and our methodology,resulting in a small shift in the overall inForn,public policy dec;s;on-makins numbers.While Washington's CVI number has dropped abouc trends a�.d related issues.Li eus a bit in comparison to the nation,it does not indicate a updated report,we provide new baseline munbers,�p�,ck srats,�.d scories Hue decrease in the overall creative economy—just xhe way illustrate the creative econon,y in acfio,,. We calculate the index. The Washingcon State CreativeVirality Index for the Waslungmn:s CVI mntinues ro increase 2008 calendar year was I.01 — bringing us above che na- each year, Erom jusc below u,e n�cional tional average.Seattle-King County has the highest regional brselu�e�n zoo��,c.99,co jusc over,c index,with an overall value of 2.09. 1.07 in 2005.Revised data streams elimi- nate some imreliable variaUles(�novie theater sales),and now include new indicators of perEormutg arCs partici- ''a�°°,�s"'eu�sr�Ve11°e`��'�`r°"' The CreativeVitality Index Defined individual artists,writers,anA perform- ers.Addifionally,we have more detailed The Creacive Vicaliry Index measures the heahh of[he creative eronomy in a ciry,counry,state employment data to Uet[er track ful]- or ocher geographic area compared m che national indeu,and creates a benchmark for fumre time,yart-time,miA self employed measuremencThe Index has two major mmponencs.One component measures seven indi- workers in[he creative sector. cators of communicy participa[ion in che ares.the other measures ares-relaced employment. • With H�ese improveinents�i ylace,we continue to learn about Washington's creative economy: • Creativity drives jobs Geative �0 � �0 � occupaCio�vs increased by 25`%in Wasltington beh.veen 2006 and 2008. • rt,ea�e�meu,n„s�ess.Nonp�oe�r Seven indicators of '��.rt-rel,�ted employm�ni arrs�,d ares-aceve orga�z;znrions u, communit participation ��i� r��rc th��n ?�% Washingtrni eamed revenues of well Ifl tfl2 dYtS , � ' „u i� �� —� �� i— over a half billion dollars in 2008. ❑ Per capita att Per<apita qrts-relared ^ Waslwl ton reac�s.More books aze gallery and indi- O Photography � S vidual ar�ist sales store sales employment bought and sold 'ut Waslwigton divi Hte nafio�ul average. � Per<aplta � Per capita book Ihopeyouv✓illfindoFpoLtunlhe5 performingarts o andremrdsrore CREATIVEOCCUPATIONS revenue sales �NCW�E Ac[ors; Adverosngand IO SltdTe YOl1Y SkoYies,dntj Y11k Wi}]l Prom000ns Managers',Agena a�d YOttI f[teRCls,Ilei�Il��OIs,dllC�o�lerS Rusiness Managers o}Artis6.Perform- aUouC why the arts and Che creaCive Inmme o!other Inrome of ers,and Aohle�es�.Archicecrs(excep� A nonpro(t landscape ond navalp,Art Direcrors: emnotny are intF�ortant to you.v�d — •'ar¢ac[ive" � nonprofo aru Audio and video eqwpmeneTechniaans: or nizations organiu�ions g�.o�dcas�Techniaans�,CamereOera- yotv rommtmity. Sa P torsTelevision.Video.and M000n Pic[ore�, Choreographers�,Commercial and Indus- O percapitamusical i�ialDesigners:Dancers�,Edrtorr,Fashion •�f Ti� � instrument and DesiRner;:Film andVidee eAimrs Fine ] � supply srore sales Arns�s indudmg Pain[ersSculpco�s.erc. Creative Vital ity I ndex By Worl<force Development Area in 2006-2008 San Juan ' � �.,, w .. Island 4(1 .. .. �rv�� ` -� � � � r �� - � �. Kitsa L v.y,� i( I P , �� _ .. � �.. � �I � �� r� T- �� r ,��I��?��,.. ,; . � �- ` s» " ' � ee.r . � ,... . . . . �, , ` �. .�;�- � '�� -_ ' � _ � � _ I __-,�., . _ . . _ :_.--.::;�,�: ---- -�-� � � Wahkiakum � � i � Columbia� ��_Garfield _ _ _ _ _ 0.30-.44 0.45-.59 0.60- .74 0.75-.89 0.90-1.05 2.09 WDA1 Olympics 0.68 0.67 0.65 WDA1 Clallam,Jefferson,Kitsap coimties WDA2 Pacific Mountain 0.54 0.53 0.55 WDA2 Grays Harbor,Mason,Pacific,77iurston,Lewis coimties WDA3 Northwest Wasltington 074 075 0.72 WDA3 Whatrom,Skagit,San Juan, Island coimties WDA4 S��ohomish Comity 0.54 0.53 O.5fi �h'DA4 Snohomish Comity WDAS Seattle-King Comity 2.03 2.01 2.09 WDAS Kvig County WDA6 Pierce Countv 0.54 0.63 0.63 W'DA6 Pierce Coiintv WD.47 Southwest Washington 0.51 0.50 0.51 WDFl7 Cowlitz,Clark,Skamania,Walilciaku�n mwllies WDAB North Central Waslwigton 0.38 0.38 0.41 WDAR Ok�viogfui,Chelan,Douglas,Gr�vit, Adams wwiHes WDA9 Tri-County 03N 0.39 0.40 WDA9 Kittitas,Yakima,Klickitat coimties VJDA70 Eastem Wasltiigton 0.44 0.45 0.49 WDA10 Pend Oreille,Ferry,Stevens, Lincoln,Whihnan, WDA]1 Benton-Fra�ildin 0.47 0.49 0.49 Wa�laWalla,Carfield,Columbia,Asotin counties WDA12 Spok<vie County 075 076 0.77 WDAll Benton,Franklin rounties - WDA72 Spokane Cow�ry > � ��j�tlt��'�'�,1 ,� ;� �,,aP,, � i � `�:�- `�/ F y � I�� - � ��1 _�� _ ��. �' ../� ��i� Y�''�",.J—�� .- ��r� ��. ;� �• � . _ � �� - ! =� �s�, i�� : ` �� r�'-�� ,r�__:�� . ,.� .� ��s�•��,�� ■ ::�'-_ �'- �-��'i�� i �- - `_►�� f�,�� _ � �,��ri �� ,-'� �� F' _.�; �'�s ��i"� .f � �'� /■ -�- ,� � ��'i�,,�� .� �■ ■■ r��r - f .�a�^�� ,� �� t /■ �'��' - � -- ,' � /l1 �■ ��.. ��1 �' � � �� Y .. ' �i.�� 1�. � ..`,' '*� f 1•^- ,... CREATIVE GOMMUNITY � � Bellin har� �� r 51ht�t2dOnattee-1lnedbody musewn, �isa�cll,is.i_,ia<<�-��i-�li��-,ir� ''�'��'^�:'�'°�"��„' of water with Ltmtnu Lsland uiteracNve gallery. b��m��8.aaeen�o A RT I S T AT W O R K &Ilingham's Whattom TAC O M A U�OlI(j, ��IldYC011I COLlllIyS Recently,the Motntt Baker Tlleatte Museum in 7009, ¢� IdCgeSt CITy I$ td110L-]Ild(�2 fOi ultc{eiWent a mdjo[$9 mi�Ilon OVeiIlaul, �'as designed by ��'"55�C;3 3 P�!9T�g Seattle-based Olson TLf15hC II15P17dt10R. and inCfeased its show caFadty from Kundigarchireas. ir-.�.�...�. ��,rmg.[f�c oh-�..� . . .. .. � The region is hrnne to six mnjor tlie- 65 shows to around 300 each year while �,� i.��co,»a's Spnngune �- � . . . aters,a 8iriving fiLn co��miu�uty,West- parhiering witJi Seattle i7ieatre Group r�:�' .�b,uc mych�ng m;u .� p,- � em Waslungron University's intema- to Uruig larger acts[hrough tomm.And ... . .-.�.��k ou�of a leccerprc��. . tionally respec[ed public art collection, tlie Pickford Film Center will soon ; -'-.Aesigns.prmcs.and bc�- �..�roadvdesand ephrn� � and a growing arts clistrict�mdiored open a new$32 million home,moving ,,..�,. rhe ar[Form commg u . . . � by the Smithsonian affiliated Whatcom from tlie modest home it has held suice ,. ��.�'�er renaissance.Spring c � �, Museum of}iistory u�d Art,Whatcom 199N into a renovated Itistorical bi�ild- �_rr�b.ing away az che press.h�� Symphony Ordlestra,and North Sow�d ing wiHi two screens. ,�,�, hnsy to help orgamze Nh�_ . - Ybuth Symphony Then there is[he Westem Wasltington lhuversity vid - � -�',,,�I prinrers(escival m.�i.� .. �� Rar�holomew.�he pav�.�� ..� � music scene,wltich has genented some its College for Fine and Perfornw�g Arts . .:..,pb�nders - chac nkcs p��,�.�:, ... of the most groundbreaking musi- provide a stream of yowig artists tliat - : . Books in downcown i-„_<�.�.. cal acts to emerge in tlie last ten yeais, keep tlie loca]dance,theave,.uid visual . . .armg."i lovc�o prme��.� including multi-million-album selling arts communifies awash in fmsh talent � �� pe,ornamencz and ic.��i �_�.� group Dcath�ab For Qdic -as well as 13,500 students who serve ,="I also love to p iu .� �,� � I7ie cit of 75,000 has more fo thutk as an audience for the artlsts,local nnd -=^d marerials"Th i � e„s_ Y �nyl records.telcyhcn�.•_v.��v for its thriving arts commimitv than a n��tional,who come through a dty Hwt . . -:.�J,,,i-and unde�p��cs i itice view. Inveshnents from both public is attractu�g top fier national acts. � and private entities have paved the way for the downtown culha.il district and � supported the growth of uvstihitions Nvoughout Uie dty. I.ast year,the Whatcom Miueimi I O O' O D O � opened Lightcatcher,an$18 millio� 43,OOD-scpiare-foot LEED certified fa�il- itv wiHi a]80-footillimiinated fa�ade. The new facilitv contains a cllildren's , � . . . " . . . ART OF BUSINESS CNEATIVE COMMUNITY SEATTLE Audiosocket S p o I<a n e Chances are thaz you hear�he work of Audio- socket every day,ai che gym,in your car,on _ _ your sofa at home. As a music licensing f rm.the ��' $eaMe mmpany is responsible for placing music in all sores of inedia induding video games,TV. � new media,and films. Since 2007,Audiosocket's staff o( I I has been helping independen[musicians make a living mak- ing cheir art racking up a rosrer of 1,200 arcis[s whose music is disseminaced ro,and paid for by, I .i" � i � global diena IikeToyoca,Greenpeace,and Intel, -'�� - � • � as well as the television series Lost and stations `_. G � �, �;. , - T ♦ Gke Nickeiodeon. '� � • ' ^ � "Audiosockec is very seleccive abou[che ,� �� s�� ` -� c,j. � 'i� � !1 concent i[delivers co che market place;'says � -��=�� , . � ` ,. 'r,ry _ direcwr of artist relacions and marke[ing Sarah � _ - �'� I, , _ � 4 s y - Hunt."The mmpany works with artists,bands - � , ^. � ' -�j"�o.� - _ and composers tha[are active and creating cul- ' � � ' " . _ mrally relevant contenc.When accepred onto � � ' - ' the roscer,artisa have agents picching their music - � � � — = to all media pladorms:' ' - Tha[rosier indudes Ellensburg's SmrAnna and Port Townsend's New Faces,as well as - -+'�- � �� ' � �� Seatde's Andrea Wittgens,Carrie Akre,�oyoger � �'�� I One,"Awesome"and KJ Sawko. � i � � � - Audiosotkec works m 5uppott musicians [hrough a series of wmmuniry development pro- - grams.The company hosts artist showcases.and = has sponsored[he annual SXSeattle parry tha[ S�.�O�Il� -[Il�Cd�lfd�Of I�le Spokone'v Mortm Woldson Theorer ot the -� showcases local ulenc at che South by Southwes[ ]llldliC{ E.I171JIL2-WcIS t112 jlltV Foa undenven[o$71 milban renovanan m � _ Music Festival in Austin,Texas.They also provide 7007 be(ore reopening as home to tM1e quarcerly artise forums chat provide education, OE LdII dtlCi Sltl�l�illg ill kll2 WeSk Spokone Symphony. ` informa[ion,and resources[o help arciscs wich atOLlll[{ t}12 tti[Il Of tI1P twElihBfl7 = che�r careers. centun;bi�t at the Uegiiuting Audiosocket grossed almost half a million dol- oE[Ile ZISt CBntUI'V iY5 eCOnOtI1V tlie Martui lNoldson Theater al thc lars in 2009,much of which wene inro ehe pockecs i5 raseC� laigelV On te[�m0�0� Fox,was saved from tlie wrecking _ of locals musicians and workers-dollars chat = chen gec circulaced�hrougheu[[he regor. �RCj it5 Rtlhti2 15�OltrlS�llllg. ball mid reoF�ened in 2007 aftcr a Tlie groimdwork for this transfor $31 million renovatiun Utaf pmvidcd � � �i�niion was laid more tl�an 35 years ago 17i m�vstn�ction jobs for]8 montlis. ��ilh ILe ci[y's hosting nf ExF�u'74,the Suice il's reoF�ening,Ilie Fox has con- . �� 1\�,rld's Fair thal reinKoduced the worlA [ributed$IG miltion annuallv to the � � • I his diarming Eastern Wasluiigton ewnomy o!tlie Inland Northwest. It is \�� a nrn�ind hroughl wiUi it an infusion now home[o Uie Spokane Symphon}� ot culture-in the form of intemational Orchestra and a spectacular venue for "�' � iNluence.uid ardutectural ins iiratiun- i variety of events. y.. .ti ��•'�.i ' } i��.a �' uid developmcnC including numerous Locals and tourist come,stay,uid w I put lic art uis4�llations along die river, spend in order to visit Uie Nortliwest Nie IN1AX,as well.�s the W.�sltington Museum of Arts�id Qdhve,one of tlie State Pavilion,wluch has since beco�ne largest ailtuml ins6tuHons in the Wand � �j' � die INB Perfomtiig Arts Center. Northwes[,vid bcal ttteaters induding The semnd stage of die transfor- liiterplayers Eacemble and the Spokeuie �`t , mabon begem ui 2002 widi tlie devel- Civic Theatre.Monthly First Friday arts opment of the Davenport DistricL events ndmina[e ui[wo major art walks ,6 .4nJiored by tlie Itisroric Davenport (in Februarv ind October). � Hotel,the 1R-bbck district hos[s The mmmtutity is ftdly activated ^. - numerous businesses, four galleries during the long days of summer,when and six performance venues. 30,000-plus visitors aHend the montlr A centerpiece of tlie Dishict, long aiumal Spokane Artfest. � �: 2.5% Increase ART OF BUSINESS WALLA WALLA Walla Walla Foundry � For thirry years,Walla Walla Foundry has brought f some of che world's greatest living artists ro ' � � ' R { � Washingron,and along with[hem jobs,tax dollars, � •�'i � � hotel st.rys,and retails sales.It is at this local busi- � � , , � � ,�� ' ness that chose arcists worl<to make their ideas _ � for largeacale mntemponry art a realiry. �� MarkAnderson.che Foundry's ownecwas ' � s �r born and raised in�he souch Washingon mm- • � � �► munity chat has m the last 20 years become well- � known for its vineyards.Anderson attended che � /��. Iocal Whicman College where he smdied scudio ,�� ares and became obsessed wich che process of � . ' � . creacing large-scale artworks.He went on to � - ' apprencice ac a bcal foundry where he helped �� che owner casc works of Wescern art.Anderson was more interesced in contemporary art,and statted the Walla Walla Foundry. The foundry started working with attists out of San Francisco and soon received re- quests from artists on the East Coast.�eading m precipicous growth.Now in ics 30ch year,[he foundry employs 46 workers who work mainly on commissions from ou[side the state.And while many foundries on che West Coasc have seen�heir workload drop mnsidenbly during the recent economic dimate.the foundry's business has not Flagged.Anderson does not advettise to aanct arcists,bu[benefics Gom a repuw[ion for ¢s qualiry work. "Luckily the town is more interesting than it was 30 years ago;'he says,laughing."I have dients visit me here and they all think chat Walla Walla is . � a precty fne place:' �i c � ,;.�vi�d,. . ,... . ._. . .. .._.. . . . , . . . �.:,�. ' . impor4�nce of ronsidermg Japanese and Northwesrern arc wrthin his acsign wo�k N��+. Suyama employs one arts or craksperson on each pro�ett - numbermg 20-plus cm'�-c�r. , A sdeamn o(walla Walla -allowing[heir vision ro influente[he final design."We[ry[o find[he most crafPoi i^�-.. Foundry's port(olio populate people[o work on ow'Orolects"he says.'9 always believe[hae made the pro�ect;crc,��.� [he busmrss's yard C �"�ui� :ilsc .:iq� i t".:irocs rY ��i �p rlar �r4 s, d��pl�y n 9rva:r i SG i i�.nc�r�'M1.i . ARTIST AT WORK SPOKANE r . .�el SniitE� � *= , ._ � �' - _ � _. • � �,es i -� � _ ,�, �, � � ^JqrUiwc�t bJandcr whe�e hc cover; tne,c�i;. �. and governmont of his ciry.Where Smrth femds � � crinve spirit though,rs through his music,ir�snln . ,�nances and as the smart�aleck frone man for � .�c fve-pieceAmericana pop banA the Hnndz �' :r Sinte i'eleasing his frs�album in 2003.d�ir ' ��` �-, �rtist has mw�ed his aqs dubs and across R9i\ r,urtry,and cained acmlades such as Spokun�� ' ' ��C � -.:r-.ds Artist of che Year m 2007.Since then.S��.�. inlir.f� [O rtlpni[On 1u5 CO�I�PIn��ity w�tV�� _.� ART OF BUSINE55 FORKS ; ,� � Dazzled by Twilight "Hollywood Saves a Smali Logging Town"Thac is the type of headline you would expecc co f nd only in the ` movies,buC ic's really happening in che � ihe Moryhill Museum small cown of Forks on the Olympic o(Art's mlleamn wdl Peninsula.This small logging town,be- gei mom room m breame sec by economic hardship even before I � ��d,o rcmnuy-announced che 2008 economic crisis,is the seccing � expn„sion. I F (or TwilighL currendy one of the mon � ' � � lucra[ive film franchises.Wiih such � hme has come innumerable wurists. mostly ceenaged girls and their hmilies � } � looking for magi<where morcal Bella and vampire Edward fell in love. �- In lace 2008,che day aRer the first � flm in�he Ganchise opened,Annettc Root opened up Dazzled byTwilight ( in Fo��ks and gave[hose wandering � . vampim fans a place m call home. ,� Open seven days a week,Dauled seils ,.� Twilight books.movie memorabilia,and �. .' handmade rtems crea[ed by hns of che .� � , � show,The shop also offers chree cours ---' l � -Breaking Dawo.Volmri,and Twilight- � ,/�� for$40 ea<h. F, � Root has since opened a sewnd ~ bcation in PottAngeles.The shops �_^S� now employ 50 people,with plans ro add I S more during che busy summer season.The s�orc's success has aided the small[own in a time of economic distress.and con[ribuces in ocher ways CREATIVE COMMUNITY [otheregion'sprosperiry.Ezplains Rooc."We roucinely provlde donacions G o I d e n d a I e co local causes the scholanhip auc- cion,local derby car entran[s,and che high school and e�aacurr¢ular sports ceams seeking sponsorships" �ti'hen the pttUlic was welcomed �•v�nt,,,��,d promore the«-orks ol lo.,,l inside the Maryltill Museum of ,,rrlsts, fro�n glassworkers to ruu,irr Art ne�r Goldendale itt 19�0, 1t painters,jewelers,sciJptnrs,glasswork- WclS �7PIVy t0 WOLICS Of dCt tjldt ers,photographers and nl��rtlists. rivaled those in the f'vtest urban Sixry years aEter wow�ng tl,ose vruseums ut A�nerica, uulud- tirst discemi„g aowds, �l,e Marvhill ing a collection of 75 works Uy M��se�m,of nrt conti,�ues to break French sct�lptor Auguste Rod'v1 new ground-licer�lly and fi��r,�ively -the world's largest-and fea- -winc�re�cive�nd uv�ovanve 2�s� h�ring Hte artisYs most famous Cen[ury pluvting.The Museum has work, Tlt� T�11tt/cZr. rerently entered 'uiro a wiique agrec- Since N�en,the nmsemn,which ment with W'uidy Point Pnrmers to site $2 0 0 M i I li o n bo�sts a shuuiing view of the Cohmi- 75 wind turbines on the eas[ern end bia River,has attracted tourists by of tl�ie museimi's 5,300 acres nestled in . . Lius,car,catnper,and bicycle-bring- this mrner of Waslungton slate The � � � � � ing their curiosiry,as well as money to relationship is anHcipated to generate � �� '� �'�� `��"` spend.Nearby Goldendale is a bene- more than$100,000 in revenue For the . . . f�ctor of bodi,�i active nual conunu- museum each year.According to The nity of 3,H00 thit is home to die Golden A�uericmi W'vid Energy Asso�iation, Art Gallery.Started in 2004 by a loca] this is the first wind energy projece in arts guild, [he non-profit gallerv serves [he United Sta[es to generate revenues to educate yo�mg artists,organize arts for a nonprofit nuiseum. C R EAT I V E The Waslungton State Arts Commission ade�a�,crs and .uppa�fs urts And culhur in Wuslairvgton SlAfe fhrough fca�lrrshi�i, V'��'�� knnruledgc,funding, and msources fhat Uui7d participution in uttd nr- i��ss fo fhr urfs. Wr irnpraz�c romminaity vifa]ih�,aestlicfirs,nnd ciAucn- In Washington State fion 6y supporfing hiLh qualify nrts and arts education cndranors. 20I0 Upolf; Mnn•infm�maf inn abmd nur pro��rnrris and diqiful errsians of this booklrt,und t4ie tnrr�ylete Ozatine Vitality Lidex resenrc�i reGmt, are uvuilable on ma ure6site ut www.arts.wa.gox�. — -- �;:.r- ��T� _ ...�ti, jl'r ..i r �:� +.�,I.. �\` \ i � "M� � '`z.,.. :ti .a a. � s.:tA - . Y..�;; -- - � � .3 .,f ' �"� ' ��3:' : y t � ' \ w `s i �•, i� y� +�• � �� ! � ri � �n I� � — � A patked house greecs Smc�ish pop group Belle & Sebasuan at Sea[de't Benaroya Hall for the opening nigh[of �he inaugural Ciq Ara Fest on Oaober 21,2010.The tour-day(estival,conce��ed and programmed by che suH of GryArts magazine,took piace in[wency-one venues throughouc che city and feacured more[hen thirry evencs that 6rought musicians,authors,dancers,actors and arcists of all rypes togecher to celebrate the opening of the indoor arts season.The fesr.ival broughc more than 20,000 arts patrons into Seattle's downcown core for che weekend and garnered praise trom media across che nation. so�u�orvs • GLOBAL[QAATION � Challenges �, american innovatiosi 111I10Vc'��1011 CREAT'E �revital�zation creativity I' skills business co�mpetitiveness i,, creat�ion �� ng�'n�� Design I ._ PRESERVATION '5��s i , ' Research �f G rowth Networking internet � - � - u �� r Arts, Culture a�d '��s�gin � pac�aging CULTU'RE ARTS mas�ufactusistg I e �'os�omYsocn� architecture � �P.3��1.��YP. tec�utolt�gy .��; �.. - - I � ► THE NATIONAL GOVERNORS ASSOCIATION(NGA),founded in 1908,is the instrument through which the�ation's govemors collectively influence the development and implementation of national policy and apply creative leadership to state issues.Its members are the governors of the 55 states,three territories and two commonwealths. The NGA Center for Best Practices is the nation's only dedicated consulting firm for govemors and xheir key policy staff.The NGA Center's mission is to develop and implement innovative solutions to public policy challenges.Through ihe staff ofthe NGA Center,governors and their policy advisors can: ■ Quickly learn about what works,what doesn't and what lessons can be learned from other governors grappling with the same problems; ■ Obtain specialized assistance in designing and implementing new programs or improving the effectiveness of current programs; ■ Receive up-to-date,comprehensive information about what is happening in other state capitals and in Washington,D.C.,so governors are aware of cutting-edge policies;and ■ Learn about emerging national trends and their implications for states,so governors can prepare to meet future demands. For more information about NGA and the Center for Best Practices,please visit www.nga.org. ACKNOWLEDGEMENTS This report was prepared by Erin Sparks and Mary Jo Waits at the NGA Center for Best Prac[ices,in collaboration with BiII Fulton of Solomar Research Group.The National Assembly of State Arts Agencies contributed signifcant background research to this project. The NGA Center for Best Prac[ices wishes to thank the National Endowment for the Arts(NEA)for its generous support of this report.Laura Scanlan,Andi Mathis,and Jennifer Lindow Eskin,along with other colleagues at NEA,provided invaluable feedback during their review of report drafts. The report was edited by Nancy Geltman and designed by Middour&Nolan Design Group. May 2012 i � EXECUTIVE SUMMARY .................................................................1 INTRODUCTION .......................................................................3 Economic Challenges Facing States..................................................3 Overcoming Challenges Using Arts,Culture,and Design ..............................4 PROVIDING A FAST-GROWTH,DYNAMIC INDUSTRY CLUSTER.............................7 Targeting Creative Industries for Economic Development....._.....................8 Supporting Artists and Designers as Entrepreneurs..................................70 HELPING MATURE INDUSTRIES BECOME MORE COMPETITIVE ...........................15 Using Arts and Design to Strengthen Manufacturing ................................16 Using Arts,Culture,and Design to StrengthenTourism...............................18 PROVIDING CRITICAI INGREDIENTS FOR INNOVATIVE PLACES...........................23 Launching Cultural Districts and Arts Enterprise Zones ..............................24 Creating Spaces for Artists and other CreativeTalent to Cluster,Interact,and Thrive...26 Establishing Innovation Hubs that Encourage Collaboration .........................27 CATALYZING COMMUNITY REVITALIZATION............................................31 Using the Arts and Historic Preservation to Resrore Distressed Communities and Reclaim Abandoned Spaces....................................................31 Improving Livability and Quality of Life through Creative Public Spaces..............34 DELIVERING A BETTEH-PREPARED WORKfORCE ........................................37 Incorporating Arts and Creativity in K-12 Education Standards ......................37 Integrating Artsinto K-12 Cross-Curricularl.earning.................................38 Engaging At-RiskYouth in Art and Sustainability Activities...........................39 Induding the Arts and Design in Adult Education and WorkforceTraining............40 CONCLUSION ........................................................................43 Notes.....................................................................................45 SOLUTIONS � �;�,��=�r��r�1��5 ��.�Z•1Can GLOBALIZATIOPJ � ��- r T �''i��0�1 x � ` � � `''�' �� '' ' �'= � CR� � � revitalization creativifiy skills ��ir:3:=;-� �an�p�sztiv�ness , job �GSlg"Yt creation� - .�� - PRESERVATION x�''�`�"'' Research NetwoZking �o��Y�et packa9inJ CUL7U�2F ,anTCJ' stl�lzltaa�SC�i�a'�tscj � QC��10i'L'!� �1 soc�. architecture Hea�tll��rP technology ��,�� _ _� . _ .,.— .�, �•.;•- --.�.., __. _ - i. _ .�' - - II 1 1 � irh amcerns over job cre��tion and business };rowxh holding a �+ruminenr and persisrent—position on p��licy agendas tc�day, govemors aze inereasinKly callin� un stare a�encies to suppurt economic gcowth. It's not just economic and workforce development agencies �hat govemors wan� on the case. Some governors are including state ar�s aKencies in this all-hands-un-deck approach and are putting in place policies and pro�;rams usinK arrs, culture, and desiKn as a means to enhance ecunomic �rowrh. This report fucuses ��n the role that arrs, cultare, and desi��n can play in assistin� stares as they seek to create jubs and buost their ecunomies in the shurt nin and transitiun to an innovatiun- based economy in the long run. In particular, acts, culture, and design can assis� states wirh economic growth because they can: 1. Provide a fast-growth, dynamic industry dusrer; l. Help mature industries liecume more competitive; 3. Provide the critical ingredients for irmuvative places; 4. Ca[aly�x community revitalizatinn; and 5. Deliver a bettervprepared wurkfurce. Globalization and the changing �a�nomy have affecred individual staees differently, but all are searchink fur ways to support hikh-gruweh indusrries, accelerate innovatiun, fosrei entrepreneurial acti��ity, address unempluyment, build human capital, and revive distressed areas. Using the five roles as a framewurk, stare leader,—y;uaemors, ecunomic development officials, and state arts agencies—h.�ve a way co inrentiunally and strategically make arts, culture, and desiKn an important part of an econumic �;ruwth agenda. States have akeady undertaken initiatives that are hiQllly relevant to that akenaa. Grouping thein by the five roles listed abwe, this report explores sume of their most promising efforts. NEW ENGINES OF GROWTH: ARiS, CULTURE, AND DESIGN 1 1�1� �� >I�� t �� (� �� • � � Ai-�i . :, ; .� - - - - . � •:.. �. � � � i � , . � _ 1 �� 1� : � ) .- q � '' ' i E fF—=�}:4 I .. i r � ,h'7� � d!� +L-+—�— �?— f� —i �—f!=—t —f --i , I � ' ,j` ' _ . ; � � � . � 3_ • .. F�tn�dbyWlYtClYrmoes.a�crawdy�lh�rafix:'MwlkfuxarNr+�Luifle ' . .�_ ��li R`.� � �c. . li .,. . `-�, � "•. Pa�91ae��at�S�adu.m:artsand�l'utepas.tEmbp�dua� �.-:�=j �� !� _ � �!'��`!F� ' '� . .sileoftpe�bew�we�9�Vlelu�n IP/WSbaII�.B�q�Feh�ema�ikUfen -. f . � ' ' �a�rd��aq�-tlMr .�,I �� : - �w Y ., .. ,-i� � IYt.� !Mi, ;IMI�� 'j � I � s . � . �'„`��____ _ .._. - .- t --r _ .,-,_ _ _ �� ; � . -- � � � . . - � ,, _ � �.��..rs�� ;�,.��.�. -_ _ ^s.R..n. �r�.s�.�Y�. � • � - � . �r N `.�f * ._ , ,,,��.,. , . - ' ' .0 - ..s' � � �,w��Ir�'Z.; _ � 3. '-r' .w��, ti. d i ys'�/' � . r . ,�- "�v h s �+' 1�.`;,ik 3,� �'�s F'll�') � -., . � y,. �"r , . . � �f � �:/ � �g� �� .0 j ��. ► 1'�"�'^ � �•�� . ��•� • ��•��,�'� • ` � , � • •� 4 ,� c. '� � Y j '• �+f � �.t '� + . . . •� ��t�� ^ �' .r •�_y�. � � �� •� �[i�. � .��_' - -.i'r =�: Y�a.-_�'� _ r � � �� _ ..� '� � - _ ��.' � �� - � '� i _ y� ^ - � '�' — . 1 �� ; ' _ 'r �L � �, � � � �� ' i i�-�— �L � � • . � '��-� � '� f� .. - �� '� + �� r � .•� � Y r : � -.� . .�� `� ►'1 . • � ii i ith concem�ovcr job creacion and bu,iness grouth holding � �romincnt— and pe�sis[ent—position on po�icy agendas today, govemurs are increa�in,�ly callin� nn all seate agencies to support �conomic Krowth. It's nut just ecu- numic and workforce�evclopment aKencies that�ocemors want on the case. Gu�emors are askin�„ �e.earch universities, community colle�es, rransportation dep�vtments, and health c�re agencics to sharpen their strate�ies and aapacitica ti�r �cncratin� lon�-tcrm ecunomic proape[iey. Thcy are askin�! energy ufliies, budkcr offices, and prucurement uffices [o be more attuned ro �hc,uccess or teilure of lucal � businesses, tedmology ventures, or joh traininh�roorams. �11ore and n�: . M�ire and more governor.a are induJinK starn ares aKencie+ in this u(I-handa-on- dcck approach, puttinR in place pulicies and pruKram, tu unc aas, culcurc, and desi,�n as a means [o enhance ecunumic �rowth. CJOVeCIlOfS d��: This repurr �hows how ntares are making—and can make—urts, cultuee, and inC�Udltlg Sldi. ,i�r'�, desiRn a compclling part of their ccunomic sulutions. It fucuses on five ways for state leaders—indudin�Rovemors, c�onomic developmcnt officials, and stare er[s �3genCleS IIl Lh15 akencies—tu stra[e�icully incorporare art,, �ulture, a�d d�sign intu an a�en�la ti� b��ust growth In hoth nc� short and [hc lun� rcrm. dl�-hdfld5-Ofl-deCk Economic Challenges Facing States pproaCh, puttln , Since [he ree:ession be�an in 2007, nc� Unitrd Scaee, hein undei��ne a major ccu- numlc contrdrrlon, with the loss uf over 7 million �obs and e 23-perccnt drop in I��dCe pO�ICleS d�-��'� ncw business cmation.� Onc of thc mos[ worrisutne aspccts uf the current eco- noinic simatiun is ehat ic comUincs I,�oth Ion�- and shor[-tcrm problcma. Grow[h programs to use arts, will nced eo accelerate sharply for the Unired Sr�ecs eo undo thc dainagc cau+cd hy nne of tl�c worst reccssions in modrm timcs. At thc tiautc timc, the country CU�tUfe,311C� C1e51gf1 fucc lon�-tcrm trends that includc the followin�: ■ The rest of the world, and in particular leading economies in Asia, is as a means to enhance gaining in the innovation race, creating the capacity to compete for knowledge-intensive industries. Currenc ecun��mic predicrions, widl few ��i��l� �]i'p�vTh. dissenters, are rhat in the next 30 years, China's ��mss domc�ric product (GDP) will Kruw to a rotal fxr larger rhan �hat uf the Unitc�l Scares.� ■ Technological innovation and global markets are volatile, creating new and unpredictable opportunities as well as threats to individual businesses and entire industries. Entrepreneurs and comperirors can nnw come from almu.c anywherc, includin�;ccunomicn euch as India and China that oncc were dosed. M�ny of thcm can reach�lobal markcrs from rhe�ay they upen eheir doo�s, ehanks to[he t�lling cost uf cotmnunications. NFWENGIN6SOFGROWII-I: ARTS, CULIURC, ANDDFSIGN H ■ The most talented individuals are migrating to ■ Finding ncw uscs for old propereics, ncw funceions a small number of cities that are most likely fur dedinin� districts, and new ecunomic to maximize innovation and entrepreneuria) op�orcunitics fur �;ruwing cities and m�ions; and talents and skills. The columnist Thuma� ■ Cunstandy updatin� workforce skills. Fricdmsm ha, oLiscrved that ehe world in "fletrening," with morc countries able to Govemors have correctly called on their cconotnic devel- parricipate in the glubal cconomy thanks to �pment leaders, workforce a�encies, and �ducacion institu- improvemen[s in communications, advances in tiuns for much of the respuruse, both shurt tcrtn and long education, and o�her factors. The world is tenn. Bue even if cconomic-orientcd agencies and ��licies flattening, but it is also hecoming "spiky" k-irh must do ehe heavy lifring, states are findink thac,with em- innovatiun hubs, as cumpanies, universities, ��mia woes ae ehe cenxer of the publics concems, all state workers, policymakers, and sources of capital �g�»cien mus[ask chem,clves ehese qurstions: seek close and frequent contact to enhance ■ What is our rolc in confronrinR the economic opportunities for innovation and lower thc costs ch�llenges facinR uur state? of,tarting husines.e,, and l�c where they have ■ What is our rolc in creating jobs, catalpzing 6etter access to a di��erse ran�e of inpu�s, innovaeion, �and huilding new pa[hs for groweh? including wocker skills. ■ Employment is chan�+ing, with work divided • How do wc enKake wich �hc state's ecanomic development and workforce sysrems—noc just into specialized tasks in ways that have driven �� pull out of the recession hut [u pcomote [he demand for flexible partnerships, as well as .crong groH•th rhat is critical to provide good part-time, contingent, and remotely accessed ��h�� laboa Today c I<nowled�e work is done collabocatively in teams, with team members State economic development ofEicial, and educa[iun uften sprcad across multiple locations, hut also leaders can in mm ask ehemselves: Huw do we mobilize wich tcam mem6ers clus[ered �eographically tu parts of�ocemmcnx rhar �nay hace remained on the facilitare the face-to-face inreractions amon� �iJcline. of pre�ious cnm�,mic devel��,mrnt di,c�,siun,.' people, firms, and organizations that arc rcyuired to innova�c and to compctc in a glohal ccono�ny�. OverCOming Chall2nges Using A�tS, Cultu�E, ■ The United States is not keeping up with the and D251gn rising demand for advanced skills. Thr nced fur knuwled;,�e w��rkers, tu inno�are and cre.+m new The merit of an all-hanJs-un-deck ap��n,ach hecomes products and sereice, ch��t ,olve �eal prahlems, i. rea�flp apparent when une considen the c+se of arrs,cul- a majur force dri�•in;,� the wurld ecunnmy. Thc ture, and design. Not tr.zditionally in the domain of eco- U.S. workforce will cuntinuc ru grow until 2020, nomic developmenc, this rrio has many potential benefits but undcr curcent trends, wo�kers will not huve fur l�u�istin�the economy. Ae descri6ed In the following [he ri�hr skills for xhe available job..' sec�iun,, govemors and stares are findin�that arte, culture, and design can l�e importanc components uf a comprehen- AI[hough the comhinat[on of short-[erm and IonR-term ��ytrarecy for growxh. Thep touch the ecunumy at eru- challenges is aftectin� indicidual stares differently, all are cial leverage points, including innovation, cnxrepreneur- taking svon�;and thou�htFul steps to resture job cmatiun Ship, employment, .,�nJ rrvitalization. An arts,c�dture, and and build n�w hasea for growth. Thci� sreps range from �jesi�,ni straeegy, couple�l with oehe�str�tegies,can pruvide the practically ur�cne to the stratc�ically profound, and staces a compexitive edge in fice impottant ways: rhe}'sccm ro be gravixating toward five areas: 1. It cun provide a high-Rrowth, dynamic industry cluster, ■ l�l�nrifyink and then su�+�urtin�high-growth, cntrrpreneurial fimis and glubally-oriented ?. It can help mature in�u.vies become murc compecitivc; industry clustecs; 3. It can procide cricictil ingredien[s fur innovative places; ■ Geatin� new �rowth opportunieies for matum 4. 1[ can catalyze community mvitalization and civic in�lustries; cnridtment; and ■ Ruildink rlaces that will attract and foster 5. It c�n deliver a berterprepared workforce. innovation and busin�sscs; { . IMroduction JVLu � iv.u:, � -� ULUL�A!ILAI�IU^J �� '��1�� _ revitali- sk�lls business ob i �esy� creation � PRESERVATION �� r�.:_. . , _ .-, �. E:��L'�So��. �_ .�r...�,;f� � �,a a 1#'�a��,'� technology ... ...`s ' VhommmtesyalDavidShoppecEssenbal - � . _ _— _ _�' � �P.� � � _ .. —',',':. -::.j'' . i �� r VhommurtesyolDavidShoppecBsenlial �� r'.5orr courro;o n�Do,��a>nr.ppec L_.e.00� I� a�_ �'�• ✓.,��y. -',r�. _ . � � .- . .. _ _ } � Phom rnwfesy ol Lrz L inAm Os� ��I . .s�,.i.��, r i .r..,��vn[�u v �i..... ........ �i:/��.�. � � � '_� C� ' � � � � Photo courtesy ol Edward Rrrnr olWentDESIGN � I I � � � I I , I ' �he concepr uf thc 6usinese cluster has hccomc increasingly import�nt in s�are economic devclupnunt stracegies. More than 20 years ago, Michael I'urter, of Harvard Businrss Schuol, highlighred the impor[ance of clusrers in his hook The Compztitive Ada�antage of Narions. Por[er� findings and subsequent studies have important implicatiuns for both corporatc and };ovemmeni �trare�y:a Some nf che kcy findinos: The creative duster ■ Finns cunccntr.atcd in regional clusters suppurted b}' insti�u�iuns pruvidin� indudes not only the education, training, and finance and marketing�crvices expericnce hiKher rates of joh and wage growth [llan compar�blr firms not emheddec� in such clusters. In such places firms compete, hur eLso work to�+ether and with TfBC�ItI01ld� VISUd� d(tI5t5, other organi:ations, eo make the re�ion a repository of specialiaed expere- ise, rechnolury, instimtiuns, and talant in die given field. Th� ahiliry co cultural performances, rapidly mubili_c rrsources such as talcnt, research and developmenc capa- bilitics (R&[)), venwre capital, and a u�ide range of relacioaships, from the dfld IlOflpfOft If1521tUtlOf15, righ[ proximiry uf great universitics, lar};e cumpanies, start-ups, and the ecusysxcm [hat connec[s [heai, is a tremendous advantake� bU2 d�50 SUCh �dl'g2 ■ Clusters are impurtznt eo stxees and re�ions liecausc strung dusters are asso- ciated with hikher�rowth in both employment and wages, idcal cunditions economie sectors as for innovation and entrepceneurship, and strong survival races amon� start- up firms. A �oud s�rategy to dri�c cconumic �+rowth, thcn, is ro rursuc the entertainment,fashion, devclupmenc of clus�ers, espec[ally fn h[�h-wage, hfgh-e owth industr[es.' ■ Rccausc creatinR a nr��du�ter can take �lecades, sta[es must tr} ru speed publishing,and up the prucess hy identifying existin�; und emerging clusters in d1e ccono- my and helpin� them impcove their ce�mpetitive strengd�s. One way to broadeasting,whieh are help clusters winc �umpe[itive a�lvanra�;c i� tn figure ouc which o4 rhe ingcec�ien[s necessary for success are iniseink �ocally an�j how they can be d�l'lOf1C] th2{aSLESL- supplied. Anorher way is to help all nc� potenrial par�icipancs in a clusxer connect wixh �,no sn�ch�r. growing and most ■ Ultimamly, supportinc a duster is ah�wr cultiv:�ein�a well-develop�d ecosysxem, ur"habitat,"of the type that $ilicun Valley eml�odics an�3 diat export-oriented sectors Austin and San Diego have created uver the last nvo decades ur so. lt means helpinR with anything that creates a benefit that is captured not just of the American by a single cumpany, but by an encire cotnmuniry, to help the cluseer grow and compete Flobally. economy. Repuhliwn and Demucratic govemors alike have supporred the �jeaelopment of clusters in cheir stares. Their initiatives pa} a �;reat deal of accenrion to .cicnce and cechnology industry dusecrs (e.g., information ccchnology, biotechnology) because they tend to have hi�h putencial co fud economic �rowth and global competitive- nees. Other areas of emphasis are clean enerKy, nanomchnolo�y, �md compurer NFWfNGINF50fGROWiH: ARiS, CUI.TURE, ANDDESIGN ) . � The number of stares that indude creative industries and the arts in their economic polity portfolio has increased dramatically in the lasi decade.Systematic data tracking,integiated planninq and legislation are three strategies that have grown significantly in recent years. I • Using index systems or other I uniform data collection systems .. �"'^ � tomonitorwituralemployment, V � "T "� .� �/ participation,revenuesandother Ji ~ ' � °" � �' • • s�r_ / m m �, • : M. key metrics over time. _/ w. � w • r � � ,w �= an •Adoptinq statewide economic "� • � � �� • � � development plans that designate u �` �� .s � ° K,, °'� � 0 andintegratethearts,cultureor • m � �c•/+— design as strategies for spurring _ - "� wa 01 •n �� emnomic growth. w ,r - � • ~ MB w a. � � u • ix �m Enacting legislation or other formal policies �s --��" designedtofosterculturalenterprisezonesor ��'� � "' � I creative districts. � � -- — gaming. Increasingly, statc.alsu are tmating creaeive indi- tively developed and implcmcnted by seare ares councils, viduals, institutions, and businesses as a crearice ind�sxry economic development a�;encies, and cummunity colleges clu,ccc The cmative dus[er includes not only [he vadi- and universiries. Accordingly thcy show huw such agency tional visual artisrs, culaval performances, and nonprofit collaburarions cuuld work in uther staces rhat w�ant ro insrimtions, but also such lar{;r economic sectors as identily dnd suppurt hi�h-kruwth industry dusters. encettainment, fashiun, publishink, and hroadcastinR, which are amonK the fasrest-;,�rowinp, and most espor[- Arkansas's 2009 strateKy "to increase crea[ive capacity orienced secrors of the .Amcriain eu�n��mc. an�i compexitivr advantage" is the combined work of chc Arkansas Arr,Council, Arkansas Seiencc and Tcchnology Authoriry, end Arkansas Assuciation of Targeting Creative Industries for . Economic Development , Sta�e, that are trearin� ,un, cul- � � � � [ure, and desikn ue a clu,crrr are findin�an imporrant suurcc uf growth. Arkansas, Colorado, and Mississippi arr anwnR them. Recent analysis in these three states found the crea[ive � � • i indus�ry the third-lar�est clusrer i in Arkansas, the fifth-Iargcst in � Colurado, and amonR the , fasresc-�rowing clusrers in Mississippi. - Those statcs now cansider their creative industry clu�tcr a vital part of their economic develop- ment straee�y. Their iniciacives � � are being joindy or coffahora- souaceaeym�air«n�i�s��a�e9i::.u��P,r�9m�c,�ao..c�a��r��nno��o,:009. / Providin� a Fast�Growth, Dynamic Industry Uuster Two-Year Colle�es. The cre�eive economy, which includes additiunal $13 million in 2012 tu fund �r.�nt projects rhe arts and husinesses [hat produce and distribute design- managed 6y the Arkansas Arts Council ehat use culture intensivc�uods, is the third-lar�;est induscry duster in[he and heriea�e collaborations ro cumplcment the stare's state (illustratcd in Fikurc l).The 2009 strate�ry report, �oal,for its aeative economy.° Creatia�ity in the Nuturul Smw, csrablished fie•e goals foc ;,�ru�cinq a�nl enl�a�cin�+ the state�creative eeotwmy: Colorado's Z008 duster analysis fnund mom chan 186,000 jobs direcdy assuciared with cmative enterprises ■ Srrcn�thcniny;reco�;nitiun of and suppurt for chc and creative occupatiuns, abou[ 4 percent of the tocal cm�rcive ecunumy within che scare s econumic j�bs in the srate. Of significance fnr economic dcvelop- de�clopment communi[y; ment efforts, [he crcacive sector wa�Culurado's fifth- ■ NurcurinK the develupment uY crea[ive talc�[ largest entpluytnent duster in 2007, nearly as lar�e as and nc� pipcline of creative workers; biotechnology/biomedical, infurmatiun technology, and ■ I'romucin� the krowdi and profitabiliry of relecommunicatiuns. Culoradok creative base extends �o crcarive enxerprise�; ncw media technologies, ou[dnor clothinK and equip- ment design, Rrcen �roducts, and craft food and hever- ■ Usin;;creative �alent and �assets xo increasc the a�es. And abuve all, betwecn 2002 and 2007 the cre- cnmpctitiveness of uther key clusters in ative clusrec grcw fasecr th<m most other clusters.' Arkansas; ■ Sup�,nrring �nd expending thc staxe's creative Seeing the nced rn arricul�re plans for nurturin�those infr.i,rrucrure. creativc indu.erie�, in 2009 former Guvemor Bill Ritcer created an edvisury panel uf inure than 60 cmativc T�� implemcnr d1o,c kuala, nc� report recoimnends a industry leadcrs tu recummend strareqies. The panel co- vanety of activitiev: chair�were xhe lieutenant govcmuc, �he director of the ■ Crcatin� a statewidc ereaeive ecunomy Icad�rship cuuncil: _ �: r� - ■ C;rcarinF an annual Rrants fiuid fur innova[ive :vn, culture, ur desi,�n-hased projects; ■ L1aF�pin�r ca[eer paths in cmativc occupaTions � � � � ��ind enterprises; ■ Expandin� the place of art and design in hi��hec /+ �,�j ��luca[ion; „��)ll-.r��)14t1�/'Q'�!C' J.lf7/t � ■ As.i�ting creative companies wich markcx dr.-clopmcnt; � �, 0 ■ Pm�idin� artisrs and artisans with rechnical and fin,incial a,sisrance; ■ I'rocnotinK and�ncouraging creariv�cntrcprencurs; i�-_i:� i ' Creafiae �'��"�' Indusnies ■ Furthcr dcvelopin�; cultural tuurinm; .k" ■ Linkin� creacivic enxerprises with cra�iitional �"��` - _� induscries to hclp the veditional industries �'�� -�,,.,�;�,.� bccome more cuinpeti[ive; and _ -J —�� .-^" _y�,rw. ■ Suppor[inF an�l expanJinh the specializcd a+ _�� Q � � ^�'�f ��.. infrastruaure that underpins the creative � � i :.. � " � � �� indunvics. �/M...+� _, �JL� L"' The initiativc has sparked action all uver che state. Scacc university extension scrvices have becume imolved in marketin� their areas' cultural ameniries. A Creative Economy Cunsurtium has fonned. Several lucal crea[ice ColoradohasadoptedashtewideplanWfostereconomicgrow[hthrough Skl1�tiC�dlRit7g��oRi�tiL�tl2VCf[illi�l`�. GUVfi[l0lMike thearts,cWture,andcreativiry.Theplanidentifiesfivepolicypriorities and 29 specific ztrategies for svengthening the state's creative industries PiOC�e Le�C2ti2lj 8 $70�,1��fl��LUFlIflClOil 1[l Z�1� Blltj eil andworMofce.Phorocoorreryo/Co/omdoCreanvelndusmes,Smreo/Colomdo. NEW ENGINES OF GROWTH: ARTS, CULTURE, AND DESIGN g Colnra�lu Office of Economic l�c�rlu�ment, and the In 201 l, Mississippi rcic�sed �a strace�ry titled Reali;in� dirccrur uf che Denver Roeanic Gardcn:. The pancl rec- die Ecunomic Pocencial uf Creativity in Mississippi, ommended, for example, makink exiseing 6usiness fulluwing a joi�t effort dtat induded th� Mississippi finzneing and supporr systems more accessible to cre- Dccelopment Authoriry, che state's lead economic aeivc busine.�es to help them stare up or�row, recruiting develupmen[ agency, and the Missis�ippi Arts new creative businesses, and dcveluping netwarkinK and Commission.The goals and srrate�ies recommended in professional development uppu�[unieies [u encoucage the 2011 report cange frum promoting entrepreneurship and support creative enterprises and creative workers.` and small business Rrowth amonR creativc firms, to In respunse co the panePs recuinmcndatiuns, Govemor I'romoting cross-disciplinary crea[ive necworking and Ritter introduced, and thc legislature passed, foui pieccs usinR creative career prugrams to increase school rctcnuon rates. of lcgisla[iun to help make ehe treaeivc seceor a drive� of economic growth. One created the Creative Industries Division wirhin che Colorado Officc nf Economic Supporting Artists and Designers [�evelopment and ]ntemazional Trade, by mer�ink chc as Entrepreneurs Oflicc of Fifm, Tclevision and Mcdi�; thc Culorado Council on the Ar[s; and [he Art in Public Places 5<<�res are reco�ni�in� artist� and designers as en�repre- Program. It renamed the arts council as"Coloradu ncurs and innovatur.. Artises, desiKners, enccrtainers, Geative Industries."Two more hills clarified existing and u[her"creatives" are likely tu be self-empbyed, and laws ro make incentives for film production in Colorado they are cons[andy cmatinK new� products and deliver- more usahle and to apply a I-perccnt set-aside for public �nk them co market." Armed with srar[-up funding, art to all capital constructiun pruject,funded wich statc husiness training, and profes+ional development sup- dullarn, re�ardless of fundin�;med�anisrn. The fourth p��rt—resources dzat states re�;ularly provide to entre- change encourages all puhlic .schools to provide educa- P«neurs and small businessen in other sectors—artises tiun in the visual and perfonnin� arxs and directs the <<�n expand their markcts and udd greater value co the state 6crard of educauon to recugnize [hc importance of �conomy. To xhac cnd, titates have changed small busi- [he ar[s in future graduation �uidclines. ncss ass[stance proKrams tu make them morc accessibfc to artists and offer.d tcainin�! proKrams to acrists to Economic developmenr plannin� in Culoradu has fur improve their business and marketin�skills. ther inteKrated the arts intu itn uvcrall �cra[egy for state advancement during Go�ernur Juhn f{ickenluoper's Fiir inscance, �he South Carolina Arts Commission has admini,eraeion. The Governur's 201 I Colorado Blueprin� created a program to fund nrw �irts-hased 6usinesses plan for econornic developmenr includes the ares, cul- started by South Carolina artists. As part of the stateti turr, and creative industrics fn th� sta�e's vision for th� Artisrs' Ventures Initiative, ar[intn cen apply for grants of future an� in the srrate�ies thc stace will pursue to foster ��P ro$5,000 m launch a new venture or significantly economic growth. Encoura�in� Incafities to d�aw on the �Icer an exis[ing busincss. ['rupusals are reviewed by an arts, the plan articulates, as an uutcume measure, that advisory committee chac includes businesspeoplr as well Colurado municipalities will "speci� Rrow�th of creative as experienccd artist enveprcneurs. The projects select- industries and arts and culeural activities in [heir long- �� '11O1ne pare of a vircual incuhator thac brings tcrm economic development svaecgic plans."° With this �rantees cogether foc professiunal devclopment and new plan, ehe crea[ive industtics have joined aerospace, �xpett advice.'' In 201 I, scvcn artists received grants renewable ener�y, biomch, an�l tourism as induscries tar- �hrough �he Arti.ts' Vcnture� Instituce fur a mtal state geted in the budger and �lannin��documcn[s of the invesemenc of$35,000." The �r�. commission also eon- Officc ��f Econoinic Develup�nent. n�cts ertisxs eo a s[a�e-suppnrted husiness training pro- Armed with start-up funding,business training,and professional development support—resources • that states regularly provide to entrepreneurs and small businesses in other sectors—artists can expand their markets and add greater value to the economy. 7Q Pioviding a Fas[-Growth, Dynamlc Industry Cluster - - _ � , - ,yr ..7. ,�.� � L �, �. _ _ i . 1:t �� 1 � I � � � �. � � rI� . _,_ r, �� I � � - -_-- — _ _ � . � � � , -�_- M�•: .� .,�m • �,c�icat& N , � i �� ,'' o ,r,� � �� f� � �, �`�t -..... _ - 'z,, — . - .� �-_ ,��,� � . .`' �1p� �` �. ' � �' '�`, `i . �'�_ _ � '-� , .. � " �. ,.,7�' . �� f. y"� i .` � . /�'w ,""'T--. �f� +` . �. _..... '�.4.- -!� .. �P� � . i ' .'�. �..�. . • •�" • . . �.. • � � 1 ;;r.uu F �.cTr.icJc_—rh�,ir u„��. .i n�,in�,n.ill�� ruc�>qnr_c�l 1�.-t':u-nncnr nf.A,�rlculrurcA Rural Communiq. curriculum eo teach aspirin�enereprencurs huw tu crc- llevelopment Initiative (RCDI). A eoeal of$175,'105 am, mana�e, and Rruw a successful husiness. Ar[ists learn in RCDI funds will su�port trainin�and networkin� from seasoned entrcprencurs an�i work alongsidc aspirino for crcative entrepreneurs in Ravalli County and cntrepreneurs from other,ecturs.''' develnp a cadre of traincrs ro extend the husines. The Montana Arts Council hclps indicidual artists an.1 develupmen[services tu [he res[ uf the state." small ares organizacion+devclop their microenmrprisc. Asset�for Arcicts, a program funded in part by �he [hrouKh �he Business Pcepa�ation Initiacive, whidl Massachusetts Cultural Cuuncil, is an innovative includes s'ecvices to build skills and knowledge in mar- matched navin�� Rrxne pru�;ram co support financial ketin�, finance, fundraisin�, audience development, und ancl business training oppurtuni[ies fo� low- to moderate- le�al and leadecship or kuvernance iuues. The Montana income a�tists. This pro�ram uses dassie low-incume Artrepreneurs Prcparation (MAI') program pcovides support systems, such as lndividual Development networkin�, husiness planninK, and market de��elopment Acc��unts and small business [rainin�, but targets the scrvices to suppor[ the etnployment and sales success uf programs [o artists and creative sole proprietors. By ar[ists and artisans in Nati��c American communities meeting sa�•ing�goals and hy completing the reyuired and rural areas. The Monrana Arts Council recend}' er.aining, patticipating artists can receive grant funds as collabora[ed with thc Ravalli County Economic a savin�s match for"working capital" to invest in their Devclop�nent Auchoriry tu deepen this prugram in fuur work as an artistic micruenterprisc, ur reccice down Ravallt County communities, using funds from the U.S. Payment assistance for che purchase of a home.'" NEW ENGWES OF GROWTH: ARTS, NLTURE, AND DESI(�N 77 Othcr sxaces have focused on hclping arti,ts find and tial investors and hanks. Participants madr elevacor expand markets fur [heir work. Foc exa�nple, wie6 funds pieches of their husiness ideas ro a panel of exPericnced from chc Oregon A�[s Commission's Arts Ruild investmcnt prufessianals. The winner of the pitch con- Cummunirics (ABC) grane, Trillium Arrisans, a nonprof- test a•as eligihlc for a $25,000 infusion of capital, and ir communiry economic develut�men[ pmqram in runnen-up received $2,500 each in srarz-up fundinG.'0 Pur[land, worked with 37 low-income aeftspec�Ple to One winncr was the Maine Float Rupe Comp�ny, which stren�thcn their busincsses throuQh product reviews, take, �hc flodtin� ropes rhat Maine to6s[ermen trudition- munthly mce�ings, workshops, and classes. Meetings cov- ally used, but which are landfill inrensive and going uut emd eeerything from reaching customers chrough social of sryle in thc lobstcr business, and designs them into maii,i, tu creatin9 a business identity, to huil�linR ccu- intricate and colurful doormats. numic indcpendence for artisans. Of 35 low-incume arxi- Attist cooperatives foster creative colfaboratiuns and are sans who had been Trillium mcinbers for lon�er ehan one ycar in 2009, 96 percent achievcd at least a 2i-percent uszful means for artists and cmative microcntrrprises to increase in s�les within the first}'car.' Trilliums efforts to hrinR their products[o market, ro share space, and distri- m�rket ies meinbers' products on sites such as Etsy.com hution expensc., and to pool resources fur risk mana�;e- �nd Wurld of Good 6y eBay tranalated [nto sales increases menT. A nacionally recoRnized example of an ��rcist coop- of 1 I 1 percent benveen 2008 and 2009. For"�reen" �rative is Alaska's C�omingmak Musk Ox Pruduccr,s' craftc}�euple, [he increase was twice as�;reat.'" Couperative, a �rassroots business netwo�k owned 6y approximately 250 Alaska Naxive women. 'The women In New Hampshire, Arcis[ Encmprenrurial Grann have knir �armenrs hom"yiviue"—chr downy-tioft underwool ;dluwed attists to develup markctinK materials, cmare new of the arctic musk oK. The couperative has cunverted websites, and upgrade exiseing website�for online sales. chis indi�enous resourcc into a highly markecable prod- Latr-camcr professional artist.rectived support eo men[or uct, providin�! supplemental incomc and supporeing eco- recent Kraduates or early-carecr arrists. Artists receiving nomic independencc for women and familic, in remote, thuse Rrants have not��l that �he tunds, althuu�h sinall in isolated Ala.kan villa�es. The co-op produced ncarly amount, have made a significant impact un promain� 4,500 irenu last yeae Fu�families in Alaska villages— cheir work and improcing thcir businesscs.14 where few year-r��und jobs esist and milk and heating oil The Maine Arts Commission and the Maine Departmenr can cost$6 or more a �allon—thz money eamed �hruu�h knitcin�; makcs a hu�c cconomic diffcrcnce. of Econumic Development are collabomrinK eponsors of Juicc, a confcrencc thaC wcaves �ukether the ares, eech- To facilitare thc development of such artist cooperarives, nolo�y, and encrcpreneu�ship. The 2007 Juice 1.0 the Georgia Council for the Arts ha, produced a techni- Cunference fucused on attendee: leamin�, exchanging cal ansiseance Ruide [o developing and operuxin�ertist ideas, and sharfnR success stories, as well as helping to couperatives as a crcative indusxry developmenc tool. The shape strategic,for Maine's future. The Juice Z.0 seate arts aKencies in Aricona, Arkansas, and Tenneccee Conference, hel�i in 2009, induded �� "pirch session," ha�e also inve.ted in a varieq of attisc cooper.atives ro where start-ups and businesses were intruduced to poren- help them expand their networks and markets. • .l 0 0 � To boos[emnomic growth,siates a�e... '' • Examining the economic importance of the creative industry duster within the state by looking at the geographic proximity of '� aeative enterprises,creative occupations,and associated institutions; I • Finding that the creative cluster is a vital source ofjobs and income,as well as a way to distinguish the state in the highly � mmpetitive 21 st-century economy; • Crafting strategies to promote the growth and p�oftability of creative enterprises,as part of the state's economic development strategy; • Including state arts councils and similar organizations as part of the state's economic development infrastructure;and � • Reviewing the business incentives,financing programs,and entrepreneurial assistance available in the state and refining guidelines to make them more available to the state's artists and creative businesses. �j F��.�iduiq e f�+l l��uwih. Dyn3mu_ Indu�,!iy l lu�,lci , SOLUTIONS ��_:�t;��,�_�_,,rc�� revitalization skills - - _ :. . . job , , Design creation , 7__;, .� .. _ PRESERVATION INetworking __ . . � � packaging CULTURE ARTS mas�ufac�u�raag . e�:��SOC�, architecture Healthcare te�`°1°� ��,�� cities �ducation industries � , , ' , � 1 ��I I J � i ' :...wr� . :�,�,�r,,,fli,.., �. �: � r +�,,.,..-.�. f {'� � , _ , ": . - x...� -�..+-.=.:�e,w.�7 - I ' - -'�-�.-_.��,,..4.--»-r :,r:: _�� - ._" L ,�: . . :' .� . . � ' . . .� gt' ' . �s-, . , . � , -a , � � � —_ i .�, -- �.,� µ • �-i�'.•�� _ i7°�� - . . _ .. ... . ...�- _ � - ,,ti��;��;:�x,,; . �; �: � ,«. �+�1, � z '� ,,. 't,�, . -a �._, . _ • � ` � `� 1 � r �� . �i � � ��,� , � �� %�i , .; �ri � ' r.� ,�+: ' . :.,f �� ;. . ��'.:t. -' 1 r ?Eff(� I •„�.j t I k._ -. .JllJi.:� I , i , , i , , � � i � i � i i , , tares have sever.al cfforts under way fixusin� on indu,ery renewal amd retool- ing that cunnect well with arts, culeure, and design. Thusc effurt. elso pco- I vide an impurtant oppo�[unit}� m further cuuperaxion between econumic developmcnt and arts �nd culmral ahencies. One such effort concems manufacCur- ing, w°i[h scates (including ei�ht staxes participating in an NGA Center for Best Praccices policy academy) focused on hnw to inreRrate inventin�;, desi�ning, and producin� high-valuc-added produc[s into exiscinR and emergin� m�nufacturing industries. Anuther effurt concerns tourisin. 'T�he Westem Guvernors' Associatiun 20ll-2012 initiative focuses on ways tu sttenKthen the Westem cconomy by pro- moting growth of the outdoor recreatiun �and tourism sectnr,. �eddlflg COI'T1p811125 SUCh In man} industrics, producinK the most impurtant new products and services as Apple and Google dep�nds on maintainin� the worldwide technulu�ical lead. Rut thac kind of lead- ership also depends on decply creative individuals who can ima�ine how people can use xhinRs th��it h�ave never been available before �and whu can crcate in�en- hdV2 BCh12V2d IlldfOf ious marketink and sales campaigns, write houks, design cars, anJ ima�ine new �[nds of software that will capTure peoplc'.s imagination and become in�jispensable flldfk8t Sl1CCeSS (Jy USII. to millions." "Se��enty to 30 percent of new product devclopmcnt fails no[for lack uf advanced design to make their rechnuloQy buc bec�usc uf a failure tu undentand users' needs," accurdin�to products user-friendly, research by economist Eric Von HippeL=' Lcadin�mmpxnies such as Apple and Google have �chieved major markct success by usin�design to make [h<ir produas userEriendly, a�ldress ainsumer needs, and �lrive innovation in are.�.s from producc address consumer needs, devclopment to ��dvcrtisin�practices. and drive innovation in . . . . . areas from product "Good design takes creativity,"says David Kelley,founder of IDEO,a firm that has been widely recognized for qualiry in design and that is one of the most visible product designers development to in the world,especially the world of high techno�ogy."Theie is a basic difference between problem solving and actually creating beyond what the problem calls for." ddV2ftI5111g pfdCtlCeS. • Engineering as problem so/ving: "In this view,engineers are problem solvers.'This device breaks down when you use it for a long time,so we'll beef up the strength of this weak sec- tion:This is problem solving:' I . Design as creating:"The designer,on the other hand,has a passion for doinq something that fits someone's needs,but that is notjust a simple fz.The desiqner has a dream that goes beyond what exists,rather than fixing what exists." SOUNCE"iheDeslgner'sRen�:'animerviewwl�hDavldKelleybytlraAlNY�'�+rtlleld.6nngingOe�IgnlaSbhwnrr,5�anfo�tlUnlver,slryand � I11[¢NalfleSedlChCOf00l8�1011.1��G NEW ENGINES OF GROWiH:AR75,CULTURE, AND DESIGN �5 Building Design Infrastructure to Support Transforming Industries ��creative edge that other industries receive by collaborating Other na[ions are nco�nizin�[he overridink impor[ance ..�th designers depends on a strong design industry and of dcsiKn in maintaining cconomic competi[iveness. For infrastructure.States are working to support the design secto� examplc, Finland cmcrRcd from die 1990s reccssion and its interaction with other industry sectors.For example: determinc�l tu in[ekra[e design intu a na[ional system of encouraging innovation in industry. ]n the space uf a _! Design Alabama,an organization that grew out of the �«�� Finland laimchcd a national straee�y called Alabama State Council on the Arts, matches design "Desi�n Z005!" tn improve design qualiry, to promnte extensive usc �.�f design ro increase compcticivcness, and professionals wi[h small communities that do not have io cultivate the yuality of the livin� environmenc An funds or access to design professionals. essen[ial part uf its approach is the continuous creacion and applica[ion uf new�liscoveries, new knowledgc, new _� The New York State Architecture,Planning and Design idcas, and ncw dcsiKns.=' A Design Start prokram was Program,run by the New York State Council on the Arts, laund�ed in 1999 to enhance product drsiKn, parnwlar- provides grant funds for nonprofits and local govemment �y in sma��and me�ium-si=c� companies, hy fun�in� agencies to engage the services of architecture,planning, desi�ncn to acr as consulxanes [o manufacturing cnier- design,or historic preservation professionals. prises, servicc ��usinesnes, an�j s[ar[-ups.�4 � The Rhode Island Design Innovation Grant,a 56,000 Using Arts and Design to Strengthen competitive award,is made annually to a Rhode Island Manufaeturing designer to implement a highly creative design idea. U.S. m.inut:icturcrs arr makmo ��phisticatcd u.�c��t The UWh Arts Council DesignArts Program sponsors and desikn to remain cumpetitiae, but they ahu recu�;ni:e more such support and enhancement is critical ru thcir mounts an annual exhibition to feature work submitted by success. Regional Tcchnology Strategies Inc. has con- 7tah designers and promote excellence in the diveise fields ducted survcys uf n�:�nufacturino mmpanics in Arkansas, of design. Massachusetts, MISSItiSlPPI� North Carolina, and Wisconsin tu understand [he impoitance of dcsign in manuf�crurinF. (The Massachusetts survey was conduct- ed in collaboretion wi[h Mt. Auhurn Assuciates.) ]n survey � responses from 301 manufac- ..i 1 � ruren in Arkan.a.�, � Mississippi, North Carulina, and W[,consin, neady a quar [er of the manufacturers i"TE�R"� accrihuted mos[ of rheir sales to product de,i�n, and fully rwo-thirds said that aesthetics SIGNIFICANT , , and desi�n were siKnificant or inregral tu rheir mmperitive- uMirEo ness.�� As shown in Fi�;urc 2, , , most manufacturcrs in �� Arkansas said that chcy i bclieved design was siKnificant NONE , . 0[ inCe�,ia� CO C�1eif SUCI'l'ti5. 0 5 10 75 20 25 30 35 In the surcey� of North Carolina manufacturers, the SOURCE:FegionalTeahnologySrtategles,Unvedrng�heGeanv<EmnomyinArkonrm,d009. , J ] ProvitledbySmanNosenlelE.FegionaRnhnologySrcategles �f'SF10IlUeIIC$ dI10 58W Ul'Sl�[1 35 I imporiant to developin�new �6 Hrlp�ny Mature Industries Be<ome More Competitive m�irket. and pruduccs and makin� , � T . • � � their firms inore profitable. Aftcr � � � , � � �� , - '� !Y' f �� A.^ � S financ[al and opecational marn �� H.� � �- + ��emrnt desi�,�n w�a. licted as the '� �q�. y fpai � rhir�-mu+t-impo�tant factor in �•� � e� ��' husiness success. That impor � �� . t mce led ?1 percent of the mun- � uf�cturer� to spend more than �j � C � � � �� $500,000 annually on desikn.'" � � _ Mississippi's 2011 report on du � �„e : - � -- � � sta[e's cre��tive economy includr. �, ~ ++ � � an analysis of rhe impottance of � � � � dcsign to manufacturers, a.wcll � � � � � „�„ , as specific recommendations f�>r ' � � � � how Mississippi can enhance th� � � � � � � � � � � cum eCitiveness ot iis indusrry ,y �'� ' �� thr��u�h use of art and dctiign. . � i� � ' T�11` SCUC�y' tOUR� C}70C1�05i�IlW'ds Icelandic5kis,Colorado,isamultidimensionalskicompanythatrepresentsalifesryleo}art,adventure, creativity,passion and innovation,American crahzmanship,top o(the line materials,and cuning- impurta77C ro the state's manufric- edge graphic art.7he company's founder began his dream o(desiqning skis in hiz parents'garage in tU�l`�5, �lut If L�SO fOunlj T�18T Evergreen,Colorado. Phommurreryolwww.desi9nbymloiodo.ner. manufaceunn often use desi�;n firms or freelancers based out of sxare. Tu help manufacmrers breter understand the initi�tice was hom from an inivati�•e oudin�d in the importance of crearivity and ehe value of design, [he 2007 Rerkshirr Creative Economy Repurc, "Desi�n It repurt recummends [ncludin�desiKn cechnical assistance Here, Make It Here;'which recommended a camp�ign amon� thc s[ate's Manufaccu�inR Exten,ion ['artnecship m assi,t and encourage manufacturers in the cuunry tu scrvices and providing state cax crcdits fur invcstmenxs xake on ehe production of"creative products'"-' in dcsign capabilixies. It also recummcnds thax [hc Mi+sissippi Manufaceurers Assuciation c�ruhlish �a cuun- Alon�; with the Rcrkshire County efforx, [hc C�esiRn cil un manufacturing design u� a design associaeion with- lndu+try Group uf Massachusetts (D1GMA)—an initia- in thc ix�anization to provide resources for businesses tive I��unchcd by statewide design induetries in 2007— uirh respecr eo applyin�drsi�,�. cu �n:�nuf:�crurin�.= «�nnecxs Che multidisciplinary design cwnmuniry with scate pulicymakcrs and leading industrics. DIGMA Ocher scates and localities aze ulso creatin� .trate�;ies workt to unim carious design disciplines intu a sinKle rhat hclp connect local manutacturers and husine,ses to cluster, �o raise ehe visibility- of tha[cluster, and to pm- the reKfun's eceative talent puol. In Berksll[re County murc desfKn as a sulutiun [o cumpanies that are looking Massachusetts, the Berkshire Creative's pro�:ram, �he �o re[hink, restructure, and re-launch. A DIGMA-cun- Crea[ive Challenge, conncets manufacturers and busi- v�ned De.ikn Industry Roundtable led a �ask furcc facil- nesscs ro local designera, enginecrs, and crca[ive workers itated hy the Hoston Society of Archirecce to develop a widl [he aim of re-visionin�of exi,tin� pruducts, �ener- position �aper and recommendations for inte�;ratin� atink ncw ideas and eoncepts fur exi.cin�; produc[ion �lcsi�;n exccllence standa�ds into die biddin�process methods, and introducing hrand new Product lines, This and the developmen[ of puUlic capital projects.�° After financia� and operational management,design was listed by manufacturers as the third-most-important factor in business success. NI:W hNplNtti DP GHUWTH�. ARTS, (ULIURL, FlNU DFSIGN 77 [�l(�MA al.0 con�•cncd rhr "�l��i.,s :vl,a�lc–Pc-Im cnrin� Insrirurc, nc� m.irkct tor �radf�ional arc+:m.l tor rravul M�.inufacturinK in Mnave�chu�etis" and "DesiKn Me�ane linked xo d1c culxw'al uniqucncss uf particul�ar places has Husiness" conferences, which targeted leaders in manu- grown subst�ntially over xhe last several dceades and will facruring and business to demonscrate che powcr of continue to grow for che foreseeable future."- dcsi�n. Oregon tourism, which employs 90,000 Oregonians and In North Carolina, the Piedmont Triad Partnership, a contribures$7 billiun to the stare'..econumy each year, ❑onprofit, regional ecunumic 3evelupment or�anizatiun, emphasizes cultural rourism and authentic local prod- established the Triad Design Consortium (TDC) to ucts." The Ore�on Aas Commission, for example, pro- sprcad rhe application of desiKn thinking [o makr all vides cultural tuurism grente to suppurt activi[ies under- Picdinunt Triad coinpanies mur� cumpetitive. TDC sup- taken by ares ur tuurism groups, with die aim of increas- purts [hc wo�k oti four eme�RinR clusters of upportuniry: ing tourism by promoting artsrelated ufferings in a com- lu�istics and cranspoaatiun,fumishings, nanutechnulu- muniry or region. Activities include tarReted marketing gy, and mgeneracive medicine. The Triad Dcsi�n for arts and cultural events, che developinent of packages Consortium also runs [he Triad DesiKn Leadcrshop, a or special promutiims, and the develi�pment of new uses series uf lectures and interactive workshops that LrinK of inedia and technolu�ry for arts and culeure.'� design professionals tuKexher with leaders in industries. In Geocgia, thc Council for the Art.and Georgia Tourism The Rhode Island School of DesiKn (RISD)—nne of combined msources to offer Tourism Product Development ehe nation5 leading dcsi�n schuuls, chareered by d1e (TPD) Rrants in fiscaf year 2012.Twenty-three g�ants state—pairs aspi�ing desi�;ners wi�h 6usiness and enki- cotaling$200,000 supported the integracion uf the ans into neering smdents for a holistic product development tourism aceivitia ro hoost visitor vaffic, employment, and process. The eeam appruach has re,ulted in a widc vari- re.enuc,.TI'D R>rants were awarded tu a v�iriery of com- ety of products, many uf which have been patented �nd nwniry, culmral,counry,and munic[pal attrac�ions and 6rought to markec Recent projects include a wireless supported the developmenx of mucually beneficial panner- information device fur cravrle�s, developed in pacmerv ships amon�the atts, industry, and I�xal Quvemments." ship wixh Nokia; a real-rime vidco enterzainment system fur c�rs, sponsored by Cicncral Motors; a low-cos[ incu- Inspired by North Carolina's HanJm�dc in America ba[u[ for the Camb�id{;c, Massachusetts, nonprofi[ and Hume�rown Handmade proRrams, ini[iatives in Design thax Matters an�l direct-to-consumer produca in sxares such ae Indiana, Kenmcky, and Montana are the achletic wear, entertailnin�, and tracel markets." helping artists raise rhe market profile uf their tradition- al crafts and cxport thcm across s[are lines. Using Arts, Culture, and Design t0 Numerous srares—induding Coonecticut, Kentucky, Strengthen TOUrism Massachusetts, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, and Washington—have devel- Touritim, like manufaccurin�;, is an examplc uf an indus- oped specific tuurs or trail proRrams w attract ou[-of-state [ry [hat can connect well with arts, culture, and desi;m visito�s and �romnre their distinctive cultural amenities. to increase its value and market. Ares and culturc add �t New Mexico Arts Trails pro�ram is a place-based arts, value tu the courism industry by rooting it in the economic decelopment, and wlturaf tourism project chat authenticiry of place and leveraging a region's unique allows attists co stay [n the[r home communities while culmre and food. increasing thcir s.des and income, promotin�entrepre- neurship. New Mexicu Arts also fundn xveral arts vails Half uf all American,ruke �r least one aip every year, and i� �ural New Mexico communi[ies. Based on [he indige- 30 percent ot thusc travelers are looking for cultural or nous cul[ural traditions of each area, the trails celebrare heritage tourism opportunities." Acco�ding ro the Urban Arts and culture add value to the tourism industry by rooting it in the authenticity of place and leveraging a region's unique culture and food. �e Hrlpinp Mature Industries 9ecome More Comperitive — s — e . r. , v- � � _ . � - o :/ -' - `W�. _ '` li � �� "- � � � ` � � � � \ � " . i +�• � �. . � \ ^ + i ` • .. _ 1�:' ' � j ��l ± • � � �. • �_ •„�.� _ , � �, .r ,�� ` .,t ,.� �. ' � " •�11��`"' .,,,► � � ; � r • � � � � r � `.� /,' �� . , � � L , �� r- ' �% �� , a : "l : �- � t�:� , thc hcritagc of Ncu' Mcsi�� tor rc.idenrs �,in�l vi�Itnrs �ofnrl}� I�c thc Suuth Dakota Art� G�uncil, thc South alike, pro��idinr culmre-h�vcd, suscainaL�le incumr for Daku[a Offfce uf Tourism, and the Suuth Dakota Statc families��nd generating rourism revenue.'° Hisrorical Suciety. lt indudes infurmatiun abou[ art galleries, �chnic diversity, heriruRe parks, hisroric Re�*ional cuisine is :� disdnctive and ma�6emhle product architecturc, landtnarks, live music, Ntrtive Amcrican th,zt can draw eouris'ts and be the basis of numerou� expe�icnce+, artis[ studios, and theaters. small cn�crprises in communitics large and smull. Thc Mississippi Atts Commission promores a variery of Festivals and f.+irs are major attracxi�ms [hat draw visimrs di,tinctive culinary acrr�ctions that ra�gc from rurel m a �tare and +timulate spendin�;. According to recent roadside eateries to exyuisitely appoi�[ed reseaurants fea- research, l02 million individuals attend arts and cultucal turing cmative cuisine, as well as [he Mississippi C1eha fesxivals annually across [he natiun.'° States have adopt- Hut Tamale Trail, which prumotes the histury, tradicion, ed a �unery uf approaches to take advanta�e of the and culrure of hnt [am�alcs from Tunica ro Vicksburg.` rraffic F��r inerance: Similarly, Iowa's Placc-Based Foods initiativr in prumn�- ■ 7'he Virginia Cotnmissiun for the Arts and in�culinary tourism throughout the stare.'� Vir�inia Tourism Corporation collabora[e to offer South Dakota produccs a �uidc xo showcase and market �� +p«�ail Krant proRram to hclp Vir�inia festivals, i[s authentic pruducts and uniyue c�lture and hisrory. museumti, and other arts orRanizations with che Suuth Dakota—Our Cuiture and Heritage is publi,hed �xFenses uf chei�tourism prumotion effores. NEW ENGINES OF GROWTH:ARTS, CULTURE, AND DESIGN �9 � t� Y• � ,�: � '� `� � -� The majority uf fes- I 4 q � rlvals (77 percent) ��`�� ,� � ` �� r�ike placc in cuwns �`�' �� ' �. � ��ith fewer chan " � - =�0,000 residenta. . r .. � ;� OE those fesuvals, i ;.. , .,�� Y� �� ';.,� � i9 �erccnt occur in ." �IC'-+�'�- r ^r, ?�°i .,�.�.�:<" - _ ;k ruwns with fewer � " �han 10,000 people, � » �., � s ' � i xtl� ;' T ,1-�� -� �� o'"�- �: .x� making them key, •�e� "` t ;�r� •'+� `4 ��" .rune events for �,�. , �'�. t� ,,� ,�,. � r'�i,'c�' ��' � �mall and mid-sized � � _ °- 'q * -'p't-" �C Y . - � . �" ��iinmuniCies."� � ,� � � ' �� . I'ekia, Noreh ! J , � � `�'; , � Dakota, is a good i�V -� - y-.. { ..,.< <xample. Pckin is a � � � � _� � � riny communiry in � �� Nelson Counry, in ! �'-' 1 casmm Norch �"-s..�► - Ilakota, with a pop- ulation of about `JO ��eopla The small farming rown was ■ Minnesora'. Fr>rival Suppurt pn��r,�m, nffered not urikinally knuwn for its cuts scene, 6u[ its reputation l�y the Minnesuta State Arts Board, suppurts the chan�ed �frer the incorFrorarion of�� highly successful arr employment of Inc�il artists in festivals across the yhuw inru the ciry's annual I'ekin Days celebraciun. s�atc. Since thc 2009 passa4e of th� ntat�'s Clean Stron� attendance at �hc art shuw helped ehe city Wdter, Land and Legacy Amendmen[ acquire a federal Communiry Developmcnt Bl��ck Gr�nt ref�rendum, that program is part of a .tatewide �nd U.S. Department of Agriculture Fores[Sen ice fund- .trategy m make ehe aas more accessible co ing fur renuvauone of the arr shuw �uditorium, provid- residents and visirors. in�ycarvround benefits to the cominunity. Art ,how rev- ■ The Missouri Arts Cauncil provides Duwn[own enue alni� helps che ciry maintain che cumnwniry center, Reviealizaeion and Economic Aseisrance fc>r xwo city parks, �nd ehe volunrecr fim departmen�. Thc Missouri (DREAM) eres grants for caralyeic ar[s ar[ shuw has al�o sparked new ecunumic activity, includ- projects such as festivals, exhi6itions, ur specidl ing cunstruc[iun of a new morel, and has increased the performances ehat draw si�nificant auJiences and revenues of estahlishments such as o,as stations, restau- concribure eo ca�n�nnic re��i�ali�anun i� ��mall r�uin. �u1� �mcer�� ore�. cowns across clic .nir�. ! V „_,_—._��-.,�.�,",� _ _ ' ' � �I1 � �.��i.:.�, c%c l.i �S¢. Y�..�['�I.i—�i To boost economir grow[h,smres are... • Exploring the links between the creative talent in the state—artists,designers,new media entrepreneurs—and other important dusters to deepen those connections and improve the competitiveness of traditional industries,such as manufaauring; • Creating dedicated units and expertise within community colleges,manufacturing extension centers,and agricultural extension I services that focus on design;that is,they are adding design capabilities in firm assessments and pmviding access to technical assistance in the design of products,packaging,and branding;and '�. • Boosting tourism by leveraging and marketing the unique culture and food of regions. 'j0 ll.d�nny Ms�uie i��.du�iii.rs ISrci�me Moie Loiri�evliirvr SOLUTft��'V� - � �:+a rii�� _- ;�� ` � �a y �° � ��- � � �`'� revitalization � .t��.ta�;A_ skills � �_._ _ -_ _ _ . � y_ .�. _ :u�iveness J job Design creation ��,tQ� PRESERVATION ��.,� Networlang , , - . . internet packaging CULTURE ARTS mas�ufact�aa�iag e�:onomysoc�, . architecture Healthcare te�`°1°�' s�ience cities education industries . - ;,:: r - �, __ - _ - �:;� . -. -,��, rA,s.o.:.biaEknee3s.�m'uu..adlwtdao..cWpaw.aap..B�d,00 �� Mtabev�eMM�mwiPheen&�iic��5ip�cePerk.7Marlpturc'aMuninetad �yfltqme�prssaow�d�angas�ao�eW�Yy.�.Ib�gXbr l'fOwo�ers:wene M+MM�d in d�Ignig,�a�naaiAog.:ld�datlpg�and7aatalpng,tNe�piw. lamt&halrns�4 areLt PeaVDaeti:WX�.IIg�lMg� Phoro�byCmlg�Sm(th,cmurteryofMre�PlinenirOWStrafArn�ondCuRurc: � a� �� w—�. � � • �� . �� IA _ 'R . . _ . .r: aiM ;• ' T_,__ ".i.j ti � .��..� . ...�'_. �. i• ''r '.; � � } ' , ' - '� I / •,i .. - i� . •�`, • � r w ��- '-� sz�� , ...l..�sws..�.. �w� • � � . �� .+�+i�w-a�...�. �«�..�� . . _ �. � St . �.�. �w��1 ♦i . . •� . . . _ _ _ � • fl • ' � 1! ��w . ' �_�411.�. � i . . (�/ r • w� ��7l��' I � � bY� �.1� • •�1 . �-,,.+�� fi k '.. • __ ....� s�, �:� �- �� , . . , . i ^�^�r. � '� ., � �r1n�:►. � �. . f,,. �'.:C �_ yr : � . ;,,� x. n� �r�� .� �i. , _ . --'- -�+ � - �; f .. r . ��, .. �� , II � , . . +Ifn , � � - . r—�� , � �� < <.i , :; � ' ; r . , � 3 �_ �=r_ � � �� . e _ '�L'� J�, _ � �'�� 'r . _ -. .,� : '--. . _ - , ; ^ . •, -.: , . , ' _ ._ -'"+.. �`�'�;�� - _, ,�.�,. . � . +�- . . .i + ,il,� �; _ . . , i i � , � , i , i i . ' , , , hc mus�.uccessful American places in thc 21,t century arc likely to he innu- vation hubs. 1`he}' are lucatiuns that support an open innu�-a[ion business model, foste� co-location, and promote easy and constant inreraction among many ditferen[ industrics anJ a wicle variery of crcative workers, from artists to scicnti+ts to engineers. 1[ m�y seem ironic in today's glubal economy, but place has 6ccume inore impor[ant than cver. As TaMe 1 suggescs, manufacturers of computer games, digital media, robocics, and c�-en medfcal instrument. and dcaices are looking for locatiuns and physical �puces d1a[ f�acilitare regular interaction of people ro exchangc idcas and know- how and creare new responses. As companies go outside for new ideas and rescarch and Jevelupment (R&D) help, ehe} depend on an extemal ecosystem of customers, inccncors, designcrs, entrepreneurs, financiers, lawyecs, and others to ��FP��rt thci� effurts. "fhat c��n bc Icss ex�cnsicc than the traditi�mal "dosed inno- vatiun" mudel, Uux it �equicrs findink lucaeions where an extcrnal ecusysxem of insritutions [hax support acativity and innovation cxists (see T.ible 2). MichaeL ��1e�5 d�f �C(JESiCJnInC' Purter puts ir this way: "ManaKers must make R&D lucatiunal choices strategical- ly, reco�nizing that rhere tend tu hc only a few true innovarion centers in each `-PaCeS 2fld e5tdb�ISh1l1g indus[ry and dlat even mo�lest impruvements in [he innuvatiun em�irunmen[ can ��tWOfkS t0 �Iflk ditlS�S huld drama[ic consequences fur cumpetitive ad��anra�es."91 Parr of San Diego's stratcgy to become one of thc top biutech huhs in rhe cotm- 'llOfe SLfdteCJlCd��y WI[h try—a kual that it attained in less than ,i ��ncracion—was the creation of a dcnscly ��ne another and with �,,irke�L n��-mile ama rhar inclu�ir� nc� Uni�er.in� ��f C�alir,>rnl�.i �,ir ��.in L�ir�_�, creative businesses and _�:..- pro�;erty developers. an Young New media:diqital arts, •Urban lifestyle Less sensitive Silimn Gulch, Intemet praduct •Nigh face-to-fece interaRion to mst Silicon Alley developmeni,web •Availability of talent from sitedesign multipledisciplines:designers, computer technicians, advertising relemmmunications Biorech: •Concentration of universities Less sensitive San Diego, new prescription •High face-to-face interaction to rost San Prancisco, drugs,diagnostic •Availabiliry of talent from mWtiple disciplines:life sciences, health care,nanotechnology Maturc Smali eleamnic goods Low cost entry level labor Heavy Far East manufac[ure,athletic Lowcostspace sensitiviry less-developed shoes Affordable low-income housing to cost muntries tOUFCF Ntlap�ed Imm Coben.N.Buvnes Lomlion Deonon Making nndlheCitiee.BnnginqCompome�BaaN.qpn11000 NLVV �NI�IIVtS (1F (�pUVr 111� L�{�S �I.I��IFjE. �iP�L L�ESICiN 28 (UCSD), Sccipps Research Institute, the Salk Ins[imte for Riumedical Studics, and Form of Innovation Institulional Sources dazens of private wmpanics. „ 1'�oXlnlit}' iec�UCeS C�tc Ov�ia�� Resear<h and development Univenity research costs of collabora[ion and Federai resea�ch labs Product and pmcess impmvements Communiry colleges [Il'dklS IC e3Sll'[fOi C}1l C0��8h0- UnrverSiTy eatension Servl�es tLCoi�hot}1��uFiIICStiOS en�� Small business centers incjlVi�ua� Woikciti—Co Designanddifferentiation Collegesofartsanddesign (l`ti�tORl� CO i12W OF1FlUCCUtIIClCS Consortiaofartistsandentrepreneurs SOUHCC Atlap�ed fiom Na�lonal Govemars Assocm�lon.CWnri-BosaE S�m�rg�rs Im4mwmp 1m�r Emnomiec WasNng�on.0.C.300) yuickly and retool ur reconfig- - - ure as needed. As a vice presi- dcnt uf the Salk ]nstiture said, "Wc can rhrow a rock Numerous other stares ha�•e au[horized Iocalitics to se[ and hit UCSD. I can hit a Kolf ball and hit Scripps. up their own incentives and [ax structuns ro facilitare Evcryxhing is wid�in walking distance Tha[ means more lacal culrural disvicts. More chan 130 of thcsc districts heads get together, und we do a lot of collahoration."�' havc receive3 state desiknation, each with ir. uwn San Diego is now home to 75 research institutions, 600 uniyue structure and characrer. biomedical and life sciences companics, and 1,900 com- Indiana has a s[arewide cultural districes pru�;ram, man- panies [n information technology, wirerless cummunica- �� hY the Indiana Ar[s Commission, which currendy riuns, and softwarc. includu the Tippewnce Art. and Culmral Disttict in The challenge to staxes, then, is co transform regions Lafayetre, die Camiel Arts and Desi�n Dis[ric[, and into innovation huba. That means 6uildinR a critical xhc Rloomington Enterta�inment and Arts Distriet mass uf creative calent; facilitaein� cu-lucatiun, or geo- (REA[)). REA�locully translaced as"beats, cats, arts, graphic clusrering of complemencary industries; and �ligs, and .hops"—seeks to bring the businesc and cre- removin�barriers to collaboration, whether physical, ative szcto�s together to advancc commerce and cul- social, or cultural. ture, build communiry, and spur economic develop- ment. The distric[ has numerous galleries, arrist sm- A number of sta[es :vr supporting dte development of �� creative businesses, civic groups, anJ urganiza- more and betrer innovanve places gcner�lly and innoca- tiuns tha� serve youth pupulaeiuns. BEAD emphasizes tiun hubs spccifically. Three recurrink nc�mcs have appeared in chis efforr: _ ___ ■ Launchin{;culrural di,tricts and arts cnrerprise ' :oncs. ' ".r. ��,..s=+:..=� -,�a .��""'-� �rm:e_ ... . ■ GeatinQ .�ace� t��c attiscs and ��ther creative ��*��..�n-� talen[ �o cluster, interact, and thrivc ' n � ^ .��' .. ....a ■ Incegra[ing ares, cultuce, and design into "'""' """"'"" " innwaeion huhs that encourake collaboration. � � �"` ��"��" Launching Cultural Districts and Arts � Enterprise Zones ��ry;>-�S�G2 _ Culrural dfstrict��arc z�mes dcsignated to Ranc�r culxural ur !� �� , � .irtist ventures (borh nonprufit and wmmcrcial) w stimu- �<i _ ;i ;� late ecunnmic develupment. They are often supported - through targeted incentivea, rax credits, and prumo[ional activities. At least 12 stoates have fonnal culwral districc JG'� policies, induding Arkansas, Colorado, Indiana, Iowa, j[t� Kentucky, Louisiana, Maryland, Massachusetts, New - �y Me�co, Rhode Island, Texas, and West V'irginia. _ _— +.. Zq Pinvidiny Cntical Ingiedients for Innova[ive Pla<es S�aces to Cluster, Interact, Thrive A former auto dealership was converted inm Textile Center —_ - - — by women knitters,weavers,and other fiber artists from- �!n' • +*, � ,$.4'"i �. � � over the state. 0. '` � � ,�r � •' ,. ��;-� nr;ists convene in an old tavern and farmhouse in a suburb ,��:. t -7, �� cf rhe Twin Cities. �.:•f-` • � � � � _ "� �n��downtown business community of Northfield sold a '� "'� - � t,ullding to the Northfield Arts Guild for one dollar in � � ! A�, '�� A i< . an effort to revitalize the downtown area. L �I�� p �_ ,',�". ' � ,��q',�,_\ an old downtown high school in Duluth was dosed and � ' 'Y�. � - i�.;��sformed into a place whe�e artists now live and work ;� �.n i;s 48 units. I f e�qus Falls,a very small town,created an eight-unit artist liv�iworl<building with a gallery in its shuttered downtown VisitorstotheBethesda,Maryland,ArLsandEntertainmeni,Dis4riR Hr_.tc'll(FidCl;itl. enjoy numerous theatres,galleries and arts events that attract wstomers for bwl retaikrs,restaurants and other businesses. � . . .. .., � Ghoio murresy o/the Befhesdo Urban Va�mership. the high concentration of cceaeice �as.ets and related caks, and other c��mpanic� with a cre�tice ed�e. The activities to stren�!then and enhance d�c uverall eco- [)elaware College uf Art and Design h�in upcned s[udent nomic developmene of the communiry.�' huusinR in [he disvict, �nd finns am relucating to [he area to take advanr��e of a recently mnova[ed business In January of 2012, thc stare uf Maryland relcasc�3 an ��inFles and mixed-use rctail and commercial space. economic analysis at its Arts & Entertainmcnt Disxricts proKram. This sratrwidc initiati�•e enaMes municipal and Acti.itics in Michigan havc caken on a murc eounry gocemmcnu to apply for srate certification and rechnological flair. The Detroit Econumic Gruwth becume eligible fur inccn[ives [har enrnura�;e the e,tab- Corpora[ion (DECC), in collaboration wi[h the Detroit lishaient uf businesses, artises and culcu��l urkanizations lnvc.tment Fund and its economic develupment in designated local arcas The new study, co�nmissioned parmers, has develupeJ xhe Creative Curridor ]ncentive 6y ehe Maryland Srate Arxs Council, a division nf the Fund ro bring cr�arive businesses to Devoic's Geaxive Deparnnent��f Economic and Businesa De�elopment, Corridor. Also collabi'�ratin�+wi[h tl�e Culle�e f��r found ehat husinc,se>within Maryland's 19 cerxified arts Creative Studies in Downrown Detroit, the Geative districts supported an annual average uf 1,6Z1 jobs and Corrido� program holds the potential to brid�e the gap $49.8 milliun in waKes between FY2008 and FY2010. bcnveen Detroic's creative industcies and �he ciry's high- Arts & Entcaainment districts supported an annual tech, h[gh-gcowth entrepreneurs. average of$1473 milliun in state Kms.dumesxic producc With so much diver�ity from district to Jistricx, ix can durino those same ycars. Taxes oeneramd L•y new bus[- nesszs and visitor spending ar district even�s generaced be .� diallen�e m esta6lish common denominatocs of mtal tax revenue esceeding �37 million.a' �tfccticeness. lowa, for example, is meawrin� the pruductiviry of the cummunities it has dcsiKnated Wilmington, Delaware, is developinR a nrw Lower "Great Places" on a clustec of facwrs, including Macket Design Disvict (LOMA) to eonnecr creaticiry pupulation stability, employment, retail starts, per and commerce and create an area for cre��tive �rofes- ca�iira cctail sales, �and ho[el tax revenua lea assessinenc sionals to live, work, shop, and conduct husiness°5 The indicates gains in johs, [ourism ac[ivity, �and especially project is spearheaded by area tenants, develupers, ciry retail ac[icity. The atisessment also tound that the rapid officiafs, and individuals from nc� nonprofit secCoc Their inacase in number of firms for all Great ['lace,far aiin is co attract intcrior, gcaphic, and web �lcsigners; ad ��utpaced the statewide average �° agencies; and architects, photographers, art�alleries, NEW ENGINES OF GROWTH: ARTS, CULTURE.AND DESIGN 25 � �i ,.` I�p`_ , �` _�� :\?. --'�� .. � �-.�- , . ,r �� i ��y Creating Spaces for Artists and Other Creative � ' � � Talent to Cluster, Interect,and Thrive As stares are leamin�, when face-cn-face inceractiun [s a luca[iun prio�iiy, key cunncc[ions and cenues for inter- action cannot be left to chance States are redesi�niny; spaces and establishinR nctworks to link artists more stratrgically with one anuther and with creativc hn>f- necses and property developers. � � � � In pa�rcicular, arcisc spaces, which include affordable unirs for IivinK and working, rctail .cpace, and administrativc and performance space, anJ which typically invulve the OnbehaltofEastport,MaineSenatePresidentKevinRayepeh)accepts adaprive reuse of older huildings, are bein� used to $SO,OOOincommuniryrevitalizationfundingfromtheMaineArts - Commission(MACI.Also piRured are MAC Arts Palicy and Program :1[treCt dn� rctHiR aitis[ti,tjl'5iKnecS, aR� O[}ll'[Cieefl�'C DirectorponnaMCNeilandcommissionmemberHughFrench,dirxtor eR[[C�.1renC'u[5. jnl�iVltjua�5 in t}le S�aCeS are COIIneCtc�� [�� ofEastport'sTideslnstituteandMuseumofArt. a larger community of artist., designers, and entrcpre- Pno�o�o��P,Y�ioPo��Pee9Pa�e�neMa,�ea,«c�mm��,��. neurs who can ofeen wurk tu�ether ro boost thcir carecrs, reputations, and sale�. Vencuca," ur WAV. In recent ycars, Ventur+ has ReKional economist Ann Markusen's 2010 study of emerged as a rcgional accs desxinarion, with dozens of hnw chrez Minnesota artist spaces benefit in-housc K�llerics in the Juwntown and the traJitiunally luw- artists and arts organ[zations, rheir neighborhoods, and �ncome Westside. Straddling those twu neiKhbochoods, re�;ions found that the Nurthem Warehouse Artists' WAV includes affordable artists' lofts, a,well as retail Coopecative, Tilsner Arti,t Coo�erative, and Traffic �Face, a 4lexiblt �+allcry and perfortnance space, and mar- Zune Center for Visual Art fuster "synerRies be[ween ke[-ra[e condominiums. The project is located just a arzists hy facilitating nerwnrkin�;, collaborations, and shott distance from Venturas high-tech incuLiaror and thcir sharing equipmcnr, knuwledke, and skills." Artisxs P��vides for inmraction between artists and web-based reput[ed 600sxs ro their professional reputatiuns and en�repreneurs. Already, downxown has attr.acted oxller � idcntities �s a�tiscs, IeadinK Markusen to conclude that ��sign indusrry prufessionals, including.irchitcces and the spaces help arxists increase producti�•ity and the �ndustrial product�esigners, drawn par[ly hy the interac- amount of time they devote to art makin��. The artists' «"n between WAV artists and hiQh-tech entrepreneurs. abilities to transform these career enhancements into Key to project financing was the scate: allucation of fed- income �ains varied." eral luw-income housino cax credit+. Markusen also fo�nd that dedicated spaces for arti�c� ru Tax credits or uther incen[ives are unly one optiun for work and cunvene "helP �u muxi�nize arxiscic spill<,vcr�" states wi,hinR [o facilitare the develupment of creative within a lncal communiry. Artist centcrs enable msi- spaces. Statts can also act as inforntetiun pruviders, dents m inrecact with arri,rs and participate in the cre- Eacilicate links hetween the public and private sectors, ative process, they mntrihure to the social, cultural, and and propegate hest prac�ices in the dcvclopment of cre- commercial lives of local neigh6orhoods and "pay eco- ative spaccs. An example is Arus[Link, Icd by the nomic dividends for the reKion." By analyzing historieal Massachusetts Culmcal Coundl. ArtistLink is a trends in socioeconomic dara, esdmating property value stacewide initiative that connects artists to affordable impacts, and inrerviewin� residen[s, business owners, �Pace and devclopen [o opportuni[ies [o create spaces and {;uvemment officials, Markusen s'howed that two of for arrisrs. Ic provides cargeted information and rechni- the artiets' spaces increesed surrounding properry v��lues. cal assistancc to individual a�rius, arta urganizatiuns, mal esrate develupers, and municipalitie�. Ar[istLink (Because of daca limitatiuns Markusen could not perform W��ks primarily in rhe predevelopmenr pha,e. Ics rech- this analysis for �he �hir�1 case scudy.) " ❑ical assistance resuurces include feasibility assessmenr. Ventura, Califomia, reccndy expanded its "California's of access to the art marketplace; cunnecriun to leRal, � Ncw Att Cix��" �ru�±ram by uJJing a new arti�[ huusin� insurance, and building code servic�s; and assistance .u�d ;,��illery l�u[ldin� kn<�wn �a, "Workin� Arti�ts wi2h real est;rre srard�es.'° js I rnvidiu�� Ciiiiral In�,liehi�•ntt li�i Inno�3livP Pld�r�.•. , �� nlri��ri�� I ��m�� 1-,�}�rc�� ['lr,��ni�. � Visiun tur lts Creative L)owntu«�n EstablishinglnnovationHubsthat �. KnowledgeAnchors:Thebiosciences,education,er•;i ;,� Eneourage Collaboration i � ;ie institutions,such as TGEN and Arizona State i.im�� veh�ch will serve as downtown's anchors in the k�owlydq�� Jusc as state, havc crea�cJ s�a�es for ind[vidu.�l �artfsts tu i,,sed economy. live and w•ork, they ha��c creared spaces within clno and towns for a wide varicty of creacice individuals and 2. Downtown Living:The high-quality housing and cntcrprises—artists, wehsiee designers, archirects, writers, wmmunity amenities required to live an everyd.:y �n.� unicersie} prufesurs, pruduct engineer.�—tu he clu,c oriented around downtown. enouKh to visit one anuther"l�efore [he cup ut cuHee 3. GreatNeighborhoods:The great neighborhoods thai �..,�� Kets cold." IncreasinRly, sia[es are helpin� to crea[e hubs result from[he city's neighborhood conservation. -.��,i�,-�.; and zones that encuura�e this kind of proximiry, nue just preservation,and mixed-use stretegies. within economic secxors but aaoss a diccrsc rangc of indu,trics in which crcatie•ity matcer,, such as tec.hnolo- 4• AnsandEntertainmentHub:The arts,culture,a��,�.-I ;ry, enecr[ainmcn[, journalism, finance, and hi�;h-cnd entertainment scene that will attract the"veative;L� manufacmrin�. The most successful ot those initiatiees well as visitors to downtown. are incorpora[in�the ares and crea[ive enrerprises, not 5. Distinctive 56opping:The wide variety of shopping an:.� only as part of che industry mix bu[al,o a, partners in dining opportunities that will make downtown appeal�n�; the planning and �Icvc�upment of the innuvarion zones. for people who live there,people who live elsewhere i�� i i�.,� Inclusion of the arts un�1 culture in all dimenaiuns uf 1�u6 i�qlon,and visitors as well. dcvdopment helps to creare a ferxile habi[at fur innova- tiun and, ultiinately, ecnnoinic renewal and lon�-term 6. Great P/aees/GreatSpaees:The quality and uniquenes,�,f prosperiiy, even in stares that are facing some of the historic buildings and public spaces provide idemity, mosi acure economic challenges ameniry,and opportunities foi civic gatherings. In Arizona, scatc and local officials are working on a 7. The Connected Oasis:The distinctive sense ef pi.,�e de��Cd numher of such ncw �evrlopments, epecifically tu �rovi�e hom using both peciestrlan connectiviry and snade as settings fostering imiuvat[un. In Phoenix, the duwnwwn ��-'��'i�'�»�"�s �n do�N�,i�-�w 's�ir�s�qn. iti l�eing eransfonned into a hub for creativity ��nd in�wva- rion. Significanr dcvclopmcnts include creatinK a ncw ,ci- cnce museum and a performing arts faciliry and providing educarinn, re,curch, and innovariun ,is.ets—and using I lan�] for the state'. imc,rmcnt xu creatc xhe Centcr E�ir urban Jrsikn rn ensure connectivlty �.ic�icc screet Translational Genumics. Ari�ona Scare Universiry (ASU) fron�age, a "Krand cicic space,"and ,hadrd places or oa.�� has heen recruitcd ro csrahlish a 15,000-arudenr campus for peu�lc ro �arher and walk). I�ivcr.iry, 6oeh physical there ro ,tren�ehcn downtown as borh an urhan dcsikn and cultural, is also emphasized, indudin�old and new center and an innuvation centec ASU's nrw Phuenix huildinRs, hik and small venues, �lohal and local husincss- Urban Reszarch Laboratory ancl an array of pul�lic poGcy es, sun and .hade, oasis and .+trect fife. In 2006, Phoenix and media programs �re loceted close co xhc voters uverwhelmingly passed a hond prugram to implc- Transla[ional Genuinics Research Institute (TGen), menr rhe duwntown plan. alonR with the new Ari;,una Biomedical Collaborarive and new University of Arizuna medical schoul. Scoctsd�le is another dry in che �rcamr Phocnix regiun tha[ in t��king a proac[ive appruach tu dcsigning an innu- The scra�egic visii�n and hlueprinc for Phoenix+approach cation huh. In 2004, [he city struck a deal wich ASU tu was developed in Z004 throuKh the combined effur[s of build SkySong, the Ari�ona State Universiry Innoeatfon elected officials,ci[y staff, business leaders, Downtown Center, in the southem part uf the ciry on a 4Lacre si[e Uoiccs (a coalition of arts an�l cultural enreq�rises and that was once mnsidered for [he Phoenix Coyo[es hock- neighborhood associations), and more than 700 Phoeni� ey arena. Like Phoenix, Scoettidale judged that it needeJ residents. The Llucprint establi.hes seven priuriry thcmes ei new �;rnwth enFine based on crcaticiry and innovation to shape the downtown s fumre as an innovation hub. rathcr than rcal estate and population Kruwth alone. The [hemes and polic} mcummendations emphasize the SkySun;,� is heing developed with ehe express purpose of screngthening of downcown Phoenix's arts, cuhure, and cluscerink a diseincrive collectiun uf people,firms, and enrertainment hub, adding new"knowlu�ge anchurs"— institutiuns—[ncluding ASU's intellectual properry and NEW ENGINES OF GROWTH:ARTS,CULTURE, AND DESIGN '. 21 technology transfer effocts—wich artenriun co interac- .�� tions, networks, and culture, to put people wi[h diverse � "•• - A . perspectices and skills mnether hoth tu eceate scientific advances or rechnological6re�kthruuRhs and tu rake them rapidly [o market. �� A big part of the SkySong straregy is physical desi�n, � inctuding the icunic shade structurc and the 120-fu��r- � "�c.-�'. tall, rensile strucmre desi�ned L�y Harry Cobb of Pci �- _ Cobh Fteed and Pacnie�s to brinK people togethcr an�1 t�� "•��,:�� .��' - ensure that ideas aoss curridors und stme�s easily. Collaborations an�l �armership� thar go l�eyon� a sin{;1�� „__-.�,� .,;, _,.. ,q__,.,�;;.e.s.,.:�-..,.��.,.....;-��,.: �1}1Y51Cd�5�1Cf i1CN a�ti0 8�1�iU�ltY. SkYSURK tOCUSI'S UR In 2001,a major additian designed by Santiago Calatmva put the ��Ohal CORrieCCiOtt3 [}lrou�ll a VaSt numhei of iRtemadun- MilwaukeeArtMuseumonthemapnationallyaswellasinternationally. a��artne[5}11FswiC�lorKani=adonti, unive[Si[ie5, an� o[}1Cf �tzpurrednearbyprojectsalongthewateAront��dudingastatepark technology- and crea[ivin-focused cn�crprises in andtwohigh-�isez. Phoromurtesyolwwwmam.oig. Singapore,Turkcy, Imland, the Unitcd Kingdom, and Mexico. lt wants to attract innovative cumpanies to Grcarcr Phuenix Econumic Cuuncil, companirs that SkySong, as welf as serve as a resource for US. companies have locatcd within SkySon�-19 of thein in[ernation- aiming to expand abroad and explure new technologies. al—created 7i3 jobs as uf?O1 l, mo�e than I,000 direct and indirect jobs overall, and �+encrated $l 1 i.6 million Buch Phoenix and Scutrdale arc capitali�ing un, and in econumic impacx annually acros. che inetropulica� implemenung, the three big bets that Arizona made�ur- area�`'The study estimated that more than 5,000 jubs in�[he las[decade to provide a basis for the sta[c's u•cu- will have heen generated hy SkySong, with a total eco- numic fucure. Thuse big Uets are: nomic impact of$9.2 billiun, when it �eaches d�e 30- � ■ Arizona State University—In 2000, citiaens yea� mark of its development. approved a tax incrcase and camiarked $I hillion phoenix's move tu create a new huL of emnumic devel- over 20 ycan for the state's three universitics tu expand funding for universiry research, ��Pmznt, while revi�alizin�a previouslp negle�ted part of cechnuluGy transfe�, and new husfness the city, may be the "state's mont signiticant economic develo�,�nent. development success." Today, downtown Phuenix is the business an�] Ruvernment hub ut xhe valley, with more ■ Genomics—In 2002, $90 million was raised ru than 30,000 jubs. It is the placr xu go tor arts and culmre; jump-srarr nc� bioscience industry, and a road enrertainment, spotts, and dinmg; com•entions, and edu- map wa. Jeveluped [o ccale uP Arizona's effurt+ �Tiun and research. It is one of ehe safesx and most and acdvities [n three arean of exisiing or vibrant pluces in the mevu m�;ion.On busy weckends, emergin� serengths: canecr rherapeutiec, more than 100,000 peoplr vi,it for evencs and acxivities. neurolukical sciences, and hiuengineering. 'J'��o�cand.uf new residents call dnwn[own ho�ne. More ■ Industry clusters—A stratc�y was developcd ro than 30 ncw independent resrauran[s upened in ?011. target ccchnolo�y-orienmd, knuwledge-inten.aive More than I0,000 smdents, staff, and faculry add to the clu�rers, in order to huild strenkths in hi�h ener�,ry and excitement And wieh numerous venues, rechnoloKy, sohware, biomcdical science, including the Comer[ca Theatre, the Children's Museum, eerospacc, and advanccd husiness service.—all and Firsr Friday Art Walks, to name a few, duwntown is sectors that compete on innovation, that can ehe arts and culmral cen�er uf the region." delivcr hi�h-inmme johs, and that can propel Washington is anuther state Pursuing innovaeion hubs. other develupmen[. Thc scare passed legislation in 2007 to crcare state-des- The approach is paying off. Althuu�h Arizona has shcd ignared Innovation Partnership Zones (IPZs) to encour- jobs fasrer ehan any state but MichiKan during thc rrcent age rescarch institutions, workfnrce training organiza- recession, downtuwn Phoenix and SkySonQ attracced [ions, and husinesses ro work couperatively in small new companies, crearing high-end johs and generating geographic areas. Re�ions th��c upply to 6e desiknated as economic impact. According[o a ?Ol 1 study by the an Innuv:�riun Fartnershi� Zune musc l�e al�le tu je i Prnviding Giti�al Inr7ie�liNnts f�r Innovniive Place. demonstra�c the formatiun of a partnecship cha[ brinKs _ ,,. �,� J� ._ r, ._� to�ether acadcmia, privare mdustry, and workforcc . . .,., _ .„ ._ .-. _ ._ develupmenr, muse identify a specific geugraphic area wi[h an cxisting or emerging indus[ry cluster, and mus[ Net Migration,Walla Walla County presen[ a str,irc�ic plan for re�;ional cfusrer�levclup- z000 inent. There arc curre�dy 12 detiiknamd IPZs in rhe isoo scate of WashinKton, �upportcd d�us far hy $65 million in s[are capi[al Rrant fundink." i000 soo The Walla Walla region of Washington is boo,rin� ics rural econu�ny through one uf the scace-desi�nared ° � Innovation ['arutcrship Zone,. Its IPZ strateKy crnters -soo � on improvin� che region's talenr, infrastrucrure, and invescment and entrepreneurship in cwo clusccrs. One is �000 nc� emcr�inK loc��l winc industry and its rclatcd huspital- �tsoo it}' ac[ivities, u'hich indude the arts and eulture.'a Tlie souace usce��sxaooeae.�ae��esyea,.ayo�,usce�.�. (�u,incss plan for ehe winc-hospitalfty lFZ dc[�ils an inI- """Ye'c°"""°°""'°°°"E'°'""" [iatice tu expa�d the perfurming arts in the reniun. Efforts to boost the wine-hotipiraliry-arts clustcr �raiate and nc� spaces around rhem as place,with assets that 1PZ desi�narion, and there i. evidence that thc rcKiun� combineJ vision for a cluster fucused on arts, wine, and ``'�� F"��' 1°mpanics ,pur innovation. Pennsylvania i. hospitality has boosted the ec�momy. encuuraKing commmtities wi[h universirics an� researdl insnru[ions to develop Keys[one Innovatiun Zones where As [he duster has grown, ir has kept Walla Walla'.c firms lncate in dos'e pruximity [o brinR entreprcneurs and econonry from heing sragnant. Nez�rly 16 percent uf jobs researchrra togethec Ohio i,makin�simil.0 imesnnents, in the re�ion :�re dependent un the cluster, and [he allocatin�;enme of its Third Fronxier resc�vch nwney tu development uf the clus[er has not only stalled outmi- build innovation hubs cluse tu sotne of its universities. gration but buust�d regional populatiun growth. As Like Ari:ona and Washin�con, [hese stares expect rhac shown i�� FlRure 3, be�ween 1995 and 2000, Wdlla Walla �rmucanon zones aill be much mnre chan land linked to Counry lost nearly 1,000 residents ro ounni�ratiun. But benveen 2000 and 2005, the county experienced a pupu- a universiry. [n addiriun to die infcastrucwre—roads, l�tion incrcase of nearly 1,500." communication sysrems, subways—and mixed land use tho�x suPPort daily life and work, these innovaxion hu�is A�imna and Washington am nut alone [n pursuing fimu- �re incrcasingly being desiKned physically an� sxracegiceil- �a[ion huhs as a sttate�y to fostcr lonR-rerm ecunomfc l� m rcinforce the cros�-sector inreractiuns, caxial urgani- Krowth. A number of states am fucusing on thrir uni.rr- zadon, cnrrepreneurial spirix, and arts and cultural sities and medical research institutiuns ("eds and mcds") ameniries of�he stace's crcativic economy. �i� e �1 � e�.� • . i. To boost economic growth,smtes aie... � Considering their universities and medical research institutions P'eds and meds")and the spaces around them as places that can be designed to offer the ingredients for innovation—smart people,research institutions,professional networks,favorable intellettual property agreements,and other conditions that can help companies spur innovation; • Finding that cities,through their zoning and land use authority and their vibrant arts and cultural organizations,can catalyze or rein- force high-quality places as a competitive advantage for states in a global economy; �i • Using tax aedits and other kinds of incentives ro encourage cities and developers to create cultural districts,creative corridors,inno- vation hubs,and other places that will attract a critical mass of creative talent and facilitate m-location,or geographic dustering,of complementary businesses;and = Starting to measure the effectiveness and communicate the progress of these zones and districts by tracking change in population. employment,property tax base,and taxable sales. NEW ENGINES OF GROWTFI: ARTS, CULTURE, AND DESIGN � yg . _ -- — � , ,� 4: f' _ • � '��1�'��1�. � a�-�-�-�:�-�-�;��,,;,�r�;, �� . � :��,� _ � , , , , �.: � � 1� � �� . � �� ;� �� !� � �i '� �. � �� il ; �� ; ;; �; �,� :, _ iir �. . , �� - � r � r� :.,.�;_ :. -_ . •I ; _ � . . ir�� , ■ � �, ,� �� _ - � �� t �, ;� ��l�w `�. ' '� , � , � -+ _ ,i `', s! ' �� +1�, � ` 'u ' - � `+ g 1 t � ._ �..� � / � � �� , � � �� °��,�,�� ,, � ``°'�i b '' � � g � �. , �� ;� ='•• - -��;� ■! r , � � 1 �r � � � ! � � � : ~`�� 1 �;�Z,� _ �� - A .rir� !� . � � � � � �� .�` ��- �f - ' .. � 'n' Gl�i� " � , . ,'� �,, _ 11 _ `►. . , - , � . �� ' � � � �' � �� '.�, � � � . -�' �. - �. � �� 4 � �... F � �..;�f r �r.� r ` � �� ' v. _ ' �' � . ,. , � - � �.��Y � . _ ry { ,. I�`' , � � N..�J�.1�111�.�.L�.�� , , , - � . I 1 ll nccr thc cnun[ry, srares and cir'ics are scr.�mhling to find �ti•ays ro reinccnt and revitalize commmlieics ,vnd neighburhuud.. Thc ares, culture, and design sectur can be a ca�alyst tu revive oldcr cuinmercial districts and nei�hbor- hoods and can hc pac[of a stare straregy to reclaim abandoned inve.tmen[s in phys- ical infrastructurr and communitics. The ctorie. of artist pioneers in ne�lected url�an nci�hl,orhoods havr been told over and over again. Noe always told is the smry of how the process of revitaliza- tion is part uf an innovation etrate�y [ha[ is central to job creation. Artis[s and uther creative peoplc bring coffee huuses, nightduhs, ;ond a positiae urban scrcet lifc. That scene in rurn ofren aevaccs hoth indi�iduals and companfe> on [he lcadin� ed�e of the creatice ur innovative econumy xhat arc looking fur an � interesting place [o locate��ne where dense necworks can be readily esea6lished and where a vibran[ arts, culturc, and music sccnc provides a sit of communiry � ameniti�n thar can coneribute tu che development of innova�ive in�lusvies.i6 As � technolo�,ry ,ccCors 11ave shifred from engineerin� to design and cma[iviry, such �d de51Gf1 CJIS[flCl- lowtiuns have become even more important tu the hi�;h-tech cconomy. Because creative people like a�he around othcr crradce people, evrn if they are in �iOfIC pfe52fVdii�� diffemnt 6usinesses, Auscin, Texas, ia one of che krcat economic wcc�ss scories in ehe Uniced Staees in �he la,t 30 ycacs. There is no question that the rcgion made � :�vP pYOveCI e�� great stratekic muves and crcativeLy exploired icn aasets, especially �hc University of Texas, in huilding new pillars of cconomic�rosperity. Rut ir is also rrue tha[ :TS Ifl tUr�� Austin's flourishing music scene and its funky culeural aetixudes—best summed up in the loc�l ,lo�an "Keep Au,tin Weird"—werc key in�redien�, ac welL �� dlSt��"� � Using the Arts and Historic Preservation to Restore Distressed � Communities and Reclaim Abandoned Spaces Oeer the ��.ist 6C? year., << tiJc of��u�ial, ecunomir, �.+nJ mi�ratio» furcc., indudinK � America+ rdendess suburbanizaciun, has left thousands of older nef;{hburhoods— downtowns, industrial di,tricts, reaidential neiRhborhoods—in decline Those nei�h- 6orhoods represent�an enormuus utvestment in infr�strucmre dnd communiry that is being�eplicated in new suburbs 6ut which can provi�le a foundaxion fur urban reeovery. Effotts to encourage ares and design districts and historic prescrvarion have proced effective catalysts in mmin� around distressed neighborhouds. Artises often are pionecrs who lay the groundwork for the next sta�e of recitalisaeion for disttessed neighbothoods.`'Once a nci�:hhorhood is reestablished as viable Rnd its potential becomes clear, other innovative industcies��ften looking for coul .space in cuul neighborhouds—bccome inxerested in loca�iiiK there. NEW ENGINES Of G47UWTFLARTS, CUIiUNE, AND DESI�N 91 Taking heed of this [rend, in April 201 I chr Furd Toulbux has heen as important fur down[own and near- Foundation started a $100 million prog�am to cicvclop downtown arras es i[ has been for residcn[ial neighbur- artisrs' spaces acruss the cnuntry. In atmouncin� che pro- houds cluse tu traditionaf ccnters of commerce. The tax gram, Luis Ubinas, thc fuundation president, cited the incentives and credits are major resuurces for the staze's economic porential of artist co�nmunities in the founda- well-known Cool Cities Initiative, which is mncerned cion's decision to commit such a large sum: with helpinK cities and peuple thruuohout Michigan "We...6elieve th�it this invest�nent in arts revixaliae their neighborhoods and communities by infras[rucmre will advance the well-bein� of ettrecting talent, apurring innuvatiun,fostering divcrsity, comtnunitizs hecause artists and art spaces can and crea[ing xn envirornnenc that meets people's needs. play a significant rule in 600sting local economies." The aesthecic and quality-u6life bcnetirs of preservation Sc�tes and cities are propcllin� this new econontic vitali- �re�enerally �cknowledged.`" However, doubcs are often ty as well as using historic pmservation and artist reloca- expre.scd abuut whether prescrvatiun provide,a quantifi- tion programs, for example, in catalycic roles. able ecunumic conrribution. Vanuus studies across the nation, including some by Rut�ers Unicecsity's Center for More than half of the seates offer rax incentives or cred- Urban Pulicy, have shown thac historic preservatiun pru- its for the reha6ilication of historic propercies and homes vidrs urhan neiKh6orhoods and niral towns with dcar in distressed neiRhborhoods. Generally those prokrams economic benefits,measured in ��n�perty values and provide credit against starc income, corporate, �nd u[her tourism dullars. A 2007 study by Michael L. Lahr and taxes to fosrer prescrvation inve.tment. Cumhined wi[h p�lvid Lisn�kin of Rutgers�Iocumcn[ed the economic similar federal incentives, d1e stare programs encourage impact of hisroric preservation in Nebraska, conduding private sector rehabilita[ion. They are a commun and th�t fur the average $46 million spenr per year benveen cose-effective communiry revitalizatiun ,tratc�,ry rhat can 2001 and 2005 on statewide histuric rehabilitation, bene- foster jobs, stimulare husiness aaiviry, preserve the cul- fits cu thc state included 746 jobs, 523 million in inmme, xur�l characxer of cummunities, and creare muderate and and $30 millinn in gross scate proc3ucc (GSP). The results luw-income housink in his[uric buildings. for nei�;hhorhoods in Lincoln, Omahe, and Red Cloud For example, Michigan increased its histuric prescrva- designated as"historic" alsn pruvide xnnc suppor[for the eion cax incenxi�•e� tu encourage privare rehabilitation of notion �har property values are higher and grow fasrer in historic l�uildings." Thc ,tare has a numbcr of tax credits �uch desi�nated neiohboch��ds."` and provides an online, srarchable applicatiun that pres- Artist relocarion programs have also proved successful in ents state resources, induding grants, loans, tax credics, �evera�ink the economic putential of artists and art �and scrvices. That unlinc R�vource Toolbox P«��n�1Ce` space in rehabilieaxing and developing uninhabitable investment in neiRhhorhuu�� and communities that areae uf a city and i� atrractin� tourists, businesses, and have, or have potential ro crcate, a mix of re.�idenxial, new residents. cultur;il, and commercial u�es, mixed-income housin�, �,in�l �.i ��rJc>tri�an-tricnJlc em�in�nmenc Thc l�esuurr.r T�� 'aducah, Ken[ucky, Arrisr Reluca[ion Prokram was �rarrcd in Aukust 2000 as a way rn reduce urhan hli�hr, I r4 ''�` �"_ � prescrvc historic huildinKs, and hring art�sts in pareieular •_ � ';}� �1 �'�. to thc down[uwn area of LowerTown, the city's oldest ,_. '� S �, nei�hhi�rhood. Incentives offercd to artis[s and others �� ,�, �; _ _ include• 100-percent financinR f��r the purchase �anJ . ;,. . _„�, "^ S ' i rehabilitatiun of an existink strucnim or the buildin�; uf +�' ' a new structure; free lots for new constmction, as a�aiI- I r able; assistance in paying professional fees; and naeional ��- - ' • - .�i� marketink exposure as a part of the LowerTown Arts _ �� - District In the first year, eigh[artists mo��ed to LowerTown. In the second year, nc� number increased tn around 20. ln 2010, morc than 100 artists lived and worked in [l1e neighbochood. And they have shown a � willinRnes� eo invest in dleir aduptcd community, �_ �--� accordink tu the program. While che city spent about $3 82 �. � � • � mfllion on the projcc[ in its � � �� , ,. first five years, the vusts !�+k��}��. �;�` ,�,.� themsclve, invesred $35 mil- � � � �� i 4 .., liun in the neiKhburhund's sj � buildin�;s.^` A study conduct- 4.� - ed by Americans fur the Arts � in 2009 found that I'aducah'� �_� � _� �� -�' � � � � artti scene br�iu�;ht in $27.5 ��'�" r tnillion in 2007.04 � To facilirare the develupment of such pru- grams statewide, the Kenxucky Ares Comlcil A laimched a ncw culeural dis[ricts certificati��n prugram. Announccd 6y Govemor Stcvc Reshcac in 201 L, chis prokram recognizcs anJ provides mchnical essisttince ro loeal disericrs that urie the arts to promnre civic and ecunum- Sr ic rcvitalization. Thc prugram blcnd+a varicry of elements impureant to Kentucky cutmnunitic�, such as �-��i��cnny's Ccntcr tur Rc�!wn�.il l)i�vrlopmcnt a�ncluJr�l thcir culmral asvcts, their historic resources, a svon�agri- that thc region�creativc industries generate an annual culmral heritagc, and "pride in place."Certification cri[e- $Z.4 l�illiun in Northwesx Ohiu �nd support 33,000 jubs.'" ria have been established ta ser a s[arewide standard for In Arizona, the Curley School project anchurs an �rts- culmcal distcict dcvelopment.Training and technical 6aaed revitalizanon strategy fur the devascaxed copper assi,tance help approved disxricts ad�ance eheir plans, minin� rown of Ajo 140 mil�s west of Tucson and 40 market their districts, dcvelop funds, and incorporate ares milen north of the Mexicun bordec A widc v.iriety uf cducation compunrnts into eheic activirie.v. Technica( statc and fcderal fundinK eources—hnusing, historic assistance teams will wurk with each di.trict ru�evrlop prescrvation, scate parks—were tapped to rcl�al�ilitate specific benchmarks f�x measuring succes�."' hiscuric l�uildings into 30 affordaLle live-and-wurk rental Similar efforts are under wa} in Tnledu, Ohio, historically ��nfts f�ir attists, plus an au�lirorium with an induorout- a majnr induurial huh.The slump in American manufac- �iour stage. Local artisans who purchased vacant humcs turing 6rought ha�d times to [he ciq-, which has s[ruggled °C1��nall}' builx for workcrs employed by the Phetps- with population fti�ht, limited businets uppurtunitics, nO�ke copper mininR company con�ci6ured si�;nificantly demolished pruperTieS, end hi�h rktCes of unetnpluymenL �" ��'� revitalizacioa, as di�i d�e presence of the bcuuCiful, Live Work Create Tulcdo is an initiativr tha[ i� usink thr 1920s-cra Curley Schuol, � duster of buildings in nc� talents and energy of artis'ts tn revitalize duwntuwn Spani,h Culonial revival style. Toledo and i[s surraundin�neighborhuoJs. The program BeKinninR in 2002 with a modest $5,000 grant from che attracts creutive aaiviry tu Toledo, while eseablishinc the Natiunal Trus�foc Histuric Preservation, the ciry as a blidwcst arts hub and a modrl city for Rust Belt lntematiunal Sonoran Deserr Alliance QSDA) worked revitalization. With suppott from the Ohio Arc,Council, wirh ArtSpace to enga�e thc Ajo communiry in a pl�n- the progiam facilitates the development of incentives ninR cffurt for the conversiun. Ten percen� of che town's that draw crea[ive talent to [he ciry anJ spur renovation pupulatiun par[icipatcd. Many residents are painter. uf neglected or underused properties. with a close connection to the Arizona desert. Thc The initiative has msulted in the creatiun uf an arts-one ISIIA project also renovated adjaccnt buildings tu creare in the city's mre and the collective promotion of more � rrrail ��allery, a business incubator,shared work space, a than 40 artists whu have established smdius in the area. computer lab, dassrooms, meetinQ rooms, and uffices. As The inieiative has .ilso esta6lished relatiun,h[ps with pri- �� resulc, Ajo has become a reRional center for culwral vare developers whu are putting vacant buildings tu new Cuurism, �reatly expandinF che attisans puten�ial mar use. Such arts-h�sed cconomic impact is noc limieed m ket, ��nd �artists have acccss to business planning assis- Lucas County but has a posicive effece on xhe enxire ��ncr prukrams as well as new �iccess ro capital though region. A smdy conducted by Bowlin�Grccn Stare �natchcd savings accuun[s and microloanse' N! W f N�,INk S UF E:NtiAN I I�C AF75 �1_iU`VkE. ANU Ul.til��lV 'J8 . . . ... -� � . _ _, .. .- � - :� �� Improving Livability a- �1 = 4 = � and Quality of Life ,. , ��I � � r through Creative '�� •�� — " �a �,' ,� ` 1 � Public Spaces r-..r �--- -�'��.�1.. e r� . �, :: . Thc quc�ri�m nf h�U� to fosrcr �— � �� •— — . _ �! �� 1 � ,� ��igh-qualiry pluces is une ��f the � �I � �nust important in ewnumic ' '"'� t � •- � � � , - de�elopm�nt today. By providinR - _ � � � , amenities, connectivity, and � � � sense of placc, pul�fic art and '� r , �" � �#' ' -� well-designcd public �accs can — � � - � � � be part uf the answec The} cun ^ �� F �� - �+ ►c � �j�K''� . [ribu[e to the visual landscapc � � �- _ and charac[ec of a s'taxe or ciry. � � �� . ` �', , .�`' � � ,. . They help transform vansporxa- � � ,, , � tion corridors and wa[erfronx, � '°� 1 �_'�� ' — "` ". intu welcomin� places for peuple S` — — -� to live, work, play, and gather as In Vermont, xrn�rs, cummuniry memhers, and en�inecrs a communiry. am working tu inccgrate artistic cnhancements intu �he Twenty-scven states (and more ehan 90 municipalities) mdevelopment of u purcion uf U.S. HiKhway Roure 2 now have public art or percenea�e-fur-ar[policirs in throu�h the villa�c uf Uamille in a way [hat combines place""Washingron and Vermont cpitomize ehese state state and local efforts. The Danville Transportation programs and their contributiun both ro the yu.aliry uf Enhancement Project brings together the Vermont Arrs life and to empluyment uppur�unides in a s�ate ur re�iun. Cuuncil and the Vennont Agency uf Transportatiun in �i first-time parmership to wo�k with the town. Much of The state nf Washington stipulates �har one-half of 1 Ruute 2 chrough��ur Vercnont has �ilready been widenc�l percent of the construction co�ts of new puhlic facilities ��nd betrer de.i�ncd, hux the Danville secxion uf the be used fur che inmrporation of art into the site. hi�„hway remain� ro be compleced. Rou�e 2 is essenti:ill}' Managed by the WashinRton Statc Arts Commission, Chr communi[y's main ,treec, as it runs through thc the state s Art in Public Places pro�ra�n enhances town eenter connecting the schuol, general stum, and sehools, parks and gmen spaces, govemmen[ buildings, �cvcral churches. Tl�e goal of the project is to upgrade and puhlic corridurs-60 eo 70 sites per year. On aver- roa� cundirions rhruu�;h che rown m mect Fedcral age, nearly i0 peccent uf the fundin�goes to +uhcon- Hf�hway System reyuiremen[s, while enhancing the trac[ors: graphic desiQners, paint shops, fabricatiun and ferl ot a ,inall, clo,c-knit, rural community and pre- weldinc companies, CAD outfits, photographers, ��rving a pedesrrian environmenc. Wich hroad puhlic, haulers, cuncrete contcactors, structural engine�rs, and rivate, and multia cnc su urc, tlie Danville ro �u others�' Washinktun's public art law, enacted in 1974, � �' y �� pruvides a template [o help sm�ll coinmunitiies �jeal is the second oldest in thc nation and is one of unly u,ith yualiry-of-lifc Issues as thcy rclare to thc dcmands four [o include the K-1? public school sysceui. of infrastruc[ure. . . To boost economic growth,smtes are... • Supporting the use of arts and design—combined with historic preservation efforts—to turn around distressed neighborhoods; = Using tax incentives and grants to encourage private rehabilitation of bistoric buildings and the creation of arts districts where creative people and enrerprises are enmuraged to live,work,and collaborate;and • � Using public art programs to activate publi�bcations in a way that engages all people in the creative process. 74 s��— � Ib� ; .- - — �. p! .- . -- - , ��II 1 �; ti�t — T ��'V� �� i.-� i ._.-- � !�'� �ie '' I _`_ , � ��_ +i� 1. _ -- •. 4 �l I 'i .� ,� � � t __ _ q �A � ✓�'�� 1 ' � � T � _ ►'� �,�,��, � �� ,� � _ �r ^� ,� � - �- , � � . « - �� r I ° ' I � ` . -�� ',.. ;� i �--- b � � � o ,♦ `' �. � � �� '� ' ;'� , .`� ��. ti � __ � : i_ ��, ? ` `"= - ` � �� j �=� � 'R'�''` � � ' ..{� . ' ` . - � � � � • _ ., � � � � �;.,, , �. _ � , .�_ � � + �v a .: . _ - r, ,_,. _ `��.0 - ai - �..�,,,x;.;;'.;:,,�.-�.: '.::.::;.-�,..._,,, _�;^�.r , • � - .�:.s. I ' ' � J � � � � �' ' ' sV ' a I, I I F� ` hc art and dcn'ign disclplincs reach many uf the skills d�ae suPport innov2tion znd high productivity and thus supporx hikh-wa�+e jobs. Thusc skills include everything frum understandin� �hc creativc process, ro collahoratinK on inno- vative breakxhrouKhs, ro knuwing when and how to fix a problem on an asecmbly line. Economic dcvelopmen�, edueaeion, and arts and culmre a��encies are naniral � parmers in workforce development. Arcas in which such parrner�hips can prucide henefiis indudc ' ■ Settin�form.il rcquircments for arts and crcaxivity in K-12 educarion standard,; ■ Integrating arts into K-12 c�oss-curriniler learnin�; ■ Engagin� at-risk youth in �att and .u�t.ainebiliry acticities; and ■ Inclu�inK thc arts�an� �csign in �a�u�t c�jucation an� w�irkY��rce trainin�. ReCOgYllZlllg th2 V3�UZ Incorporating Arts and Creativity in K-12 Education Standards of art dnd design in th Recngnizing[hc valuc of arT �nd design in thc development of wurkfurce skills, development of I most sta[es have inteKrated formal reyuicemenes fur arts and crcativity into K-12 education. ForTy-eikht states have enacted uvcrall arts curriculum standards, 47 workforee skills, I'TIOSt articulare specific arts instruc[ional reyuiremcnts, and 40 require arts units for high school Qraduation.'0 Su�ne stares, indudin�Colorado, Louisiana, North Carolina, states have integrated and Ohio, have recendy updated and strenKthcncd these policies. Thc Nort6 Carolina ?O10 keneral essembly .iuthorized �a scaxe buard of education fOYf7ldl Y2qUIfe�llentS YOr rask force to cres�te .� Co�nprchensive Arrs Educ�ition Decelopment Plan fcir the public schools. Ln Ohio, che dcpartinent uf c�lucition established nc� Cummit[ee art5 dfld Cf2dtivity into fur the Arts and Innov;�[ive Thinking, a sratewide arts advisory cuuunittee, to pro- mote and adcancc xhc arts in thc livcs of all Ohio srudcnts. The initial focus of ixs K-12 2C�UCdi1011. wurk ha,been promuring collaborauon in curriculum design amun�� arts and so- called STEM reachers (ehose in science, tecl�n�du�,ry, en�ineerin�, :�nd mach)—sig- nificant recognition tha[ the arts are as important as science and math in the 2lst- century workfoccel' ln lO1Z Colorado passed legislacion that"stron�;ly encourages" all Colnrado puhlic nchools to provide education in the visue�l and performing arts �nd direc[s the s[ate board of education tu mcognize the importance uf the arts in future �raduariun Quidelines. In Louisiana, rhe Arts in 6ducatiun LcRislanon Act �vas cnacted tu put mu�ic and ehe ares in recry Luuisiana public +chuol l�y [he 2010-2011 schuol yea�. Actual implemcncatiun of a�rts learning, howcver, remains a challcndc Some states have moced to try cu bridge the gap between settink statewidz requirements and actual implementarion in schools. A[ leasr I� .rates have produced ,rudies to assess Niwiiv��iN�toFGr�owiri�. nei�-.�_uuuHe. nNDueSioN 37 � � , � ' _ �� y � primary arts disciplines. Futther, 63 percent of principals are d[ssatfsfied with the yuantiry of arts cducation [n their schools.%^ � � Integrating Arts into K-12 Cross-Curricular „ , - -..*r+� ' Learning �. Anodier Na� to inee�;ratr arts skills into mell-rounded workforce cducation is tu include art in oeher K-12 cur- ricula, teaching ehe arts in eunjunction with langua�e, history, and scicnce, µ�ith nc� result d�at Icamin� in but11 the arts and non-arts subjeas is reinfurced and enhanced. �` Value Plus Schoo(s is a whule-school refurm model, led '"'"`�"`"� � � �� °" "� hy ehe Tennessee Ares Cnmmission (TAC), ehax r,,,. ..�i.,. ,, � ...�. _��_, _ _�� ;� . cmphasizcs cross-curricular learninc. Crirical thinkinK „�,,;,�..;,,;;�. -`�� . r skills, coup�ra[ive IeaminK, and eechnulogical fluenep .• ,,,, . ,- . ,. . . . �;�, are also core componen[s��f the program in addi[ion ro __..�__ _ ___ other subjects such as math and science. Students in Value Plus schools�encrally from lower soeioeconomic the sta[us, cundinon, or effectn of arts instruction on a backgroun��—made �ains uf 8 percent in �chicvemcnt statewide hasis.'= For example, the New Jersey Arts tes[ scores over four years, cumpared to a 1 percent Education Census Project, ai parmership af the New increase in the control schuols. In one Value Plus Jersey Stare Council un the Arts, the New Jersey School where special education [eachers reported in[e- Department of Education, the Ge�aldine R. Dodge ;,�ratinK the ares in marh insxruceion rhree or more ximes Founda�iun, che New Jersey Arts Educariun Parmership, pe�week, stuJent proficicncy in math increased by 23 ArtPride New Jersey, and Quadrant Arts EJucarion percent. `The Value Plu� program has heen awarded ewu Research, is a comprehensivic effurt tu cr�mplete a Atts Educaxion Model [�eaelopment �nd Dissemination statewide, mandatory, schoul-l�y-schoul ,urvey for the Granes by the U.S. Department of Education—an visual and performing arts. The survey is being conducr- unprecedented achievement—and also receives funding ed by ehc Nrw Jersey Dcparrment of Education. One uf from the Tennessee Gcncral Assembly. Building on thc rhe goals o}thc project is to measure the gap becween success of Value Plus Schuols and the lessuns leamed, scate curriculum requirements and implementation. The the TAC has iniciamd an Arts 360 proKram rhat empha- seaee has core curriculum conrent standard. in the visu- �izcs arts inte�;ration in schuols. The cuimnission was al and petforming ares. Students are expecred to achicve awardcd a four-year�rant ro develop d�e pro�ram and is basic literacy in fouc art+disciplines (dance, music, the- currently piloting it in fivc schools.'° a�er, an�3 vlsual nrc) by kra�le 6 and tu communicate proficiently in une of nc�m hy high school graduauon. �e A+ Schools program in North Carolina, anud�er whole-school refonn modcl, fosterc creativity-based The projrct's 2007 report found tha[ althou�h 81 per- learning. lt has a long rccord of producin�resulcs. cen[ of schools had updated their curricula to reflecr thc lnitiated by the Keenan lnsriture, the program is nran- I scandards for visual and performing arts, 19 percent haJ aged for che stam by the North Carolina Arts Coun�il, a not. And although 94 percent uf New Jcrsey smdencs dicisiun of the Dcpattmcnt of Culmral Rcsoucces. The had access ro some arts cdueacion in their schools, [he A+ Schuuls model has reccived natiunal recognitiun for majoriry uf puhlic schools did nut offer instruction in all ics resules, which include studrnt achicvrmrnt gains and four art disciplines.�' improvemcnts in the schuul environmcnt, und has bcen replica[ed in Oklahoma and Arkansa�. A similar reporc in Washington found that 33 percenc of elemeneary seudents are getting an avera�+e of less In Oklahoma, A+ School.commit to a set of ci�ht than onc hour of arts insvuction per weck, and 47 per- essentials, including arts, experiential learnin�, and col- cent of,chools offer instruceiun in only one of the four laboration, among others. The professional development 90 DPliveiin<� n Hrl�er-F�rPpdred Woikloice neede�l n� inte�rare d�esc cssencials i., prrn�ided b�� OK Engaying At-RiSk YOUtM in A►t 017CI A+ Fellows, a group uf ceachers and rea,ching and F�r.ic- Sustainability Aetivities xicing arcists. The schools develop a curriculum tha�r crosseti tradirional disci�linary boundariee, teaches �art Hi�+h-yualiry arce �ro�ram�can movc yuuth away frum daily, and inmgrares ares intu the tcaching uf oehcr suh- dan�eruus ur criminal activities anJ towxrd better ecluca- I jects)" Students mikht leam aboue marh or science con- tion and bettcr joUs. Although many of the availahle cepts thruugh music Such cross-curriculac conneceiuns examples are located in lar,�,e citics, the value uf ares to are made through a curriculum mapping process that all ��veloping young pcople is equally significant in smaller � teachrrs participare in.'" communitic,. Utah's Beverley Taylor Surenson (fiTS) Ar[s Educati�m In IDinois, Gallery 37, operated by the Chicago Initia[ive, fun3ed by the state and couperari��ely run I�y �?�P�ir�ment of Culmral Affairs, ha. transfonned a fur- xhe office of education and the Utah Atts Council, pru- medy vacan[, chree-acm lot adjacent to Grant Park vides full-time-equivalent arts speciali,ts in 57 elementary �known as`Block 3T') inco a lively cultural hub that schonls hut uties a sidc-by-side teachin�+mudel. Each employs yuuth te� sxudy and crea[c art. In addi[ion tu paid sch�wl hires a specialist tu eeach danec, drama, music, or dFFrenticeships ehat tcach youth how tu create and crrar- the visual arts and pair+those [eachers with regular clas.v- kce artwurks, this outdoor gallery uffers art dasses and room teachers for cooperacive and inte�raced an Iessuns. u'orkshnps free to the public Since its inception, the rro- gram has�mwn ro include sarellite �ru�rams in nearly 30 Spurred by�;rowin� concems about wurkforce prepared- Chicu�;o nei�h6orhoods. After-schnol .�daptations of thc ness and compexitivenes., numerous ntatcs have devcl- �ri�;in�al summer plan have spread tu mure than 30 oped fonnal programs ur pulicies de�[kned to increase Chics4+u public high .chools. Sevenry-five percent uf the student achievemznt in .pecific skills nceded co advance y�i�nK participants arc kom ecnnumically disad�ant�i�ed innov;itiun, invent new producrs, and aPP�Y ��K�«��` familic,, and 70 peccenr ateend Chica�;o public achoul�. pcc�blenr,olving meChuds."� Such STEM init[a[ives uriKi- Ei�hry percenx are frum African Amcrfcan, Launu, nally cmphasiaed nducirion in only four�iecipline arcas; Nath e American, or Asian/Pacific 141andec coinmunities. �ciznce, rechnolo�y, cn�!incerin„, an�l muth (STEM). yuuxh rarticipatiun in Gallery 37 Icads ro a heightencd More mccntly, however, hoth educariun and businrss ��nse nf culcural identiry, enhanced self-esteem, and new leaders are emphasizin� the importance uf addin�r rhe undersranding uf huw to eum areis[ic and social ekills into a�ts and �j�sign into thae mix."' fumrc employmen[oE�purtuni2ies. As mentiuned earlicr in chi. Thr Oklahoma Ares Council's report, in 2007, the Ohio � { i � ' 1 Arts [n Altcmative Educatiun Departmen[ of Eduwtion creared � � Program (ALTED) procides fun�js a st�rewide Committce for the to as4iet hand~-un insxruetiun �nd Arts and Innovativc Thinkin� tu � �,ur[icipatiun in dtc arts [hruu�h advance arts in thz education of .ilternativic educa[ion prograims in all Ohiu students. Thc initial =_ rhe public schools Offered through focus of its work has bcen pro- � _ �, �i partnership of che Oklahuma motin�cullabora[iun in curricu- � � �,;._ �' Arts Council und the state depart- lum desi�;n amung arts �nd STEM � �� ment of educatiun, the p�ogram teacher�. When the statc's 2007 � uas set up by statc legislation budget induded more than $200 . Jesigned eo improve outcomes fur million for STEM-rcfated educa- �rudenrs. It mams residenr artists �ion initia[ives, focu�ed un creat- with dassroum tcachers [o assist in� STEM schools and K-8 "pro- �tudents whuse n�eds ace nut mer �[drns uf exct�lence,�� the STEM The Oklahoma Hrts Councifs Arts in Alternative �`y Cfa�iTtond� e�uCaiton. SCjlOu�ti fuRL�IR�Le(.�ulll`li T�IaC C�ll' Education Program IALTE�)teams residentar[ists E�'a�LL8ROt15 1'laVe{uUni� Tl1aC C�'ll' sc}�oo�s inc�u�e a rolc fo� C}ie ar[s witbclassmomteachersinalternativeeducation ALTED proKram—w'hicll im•u�veti and hwnanities." :en��qsa��a::�nesuce. a wide vtaricty uf vi,ual1, pe1r�fun1n- PhorobyKrisul.avert,mwreryo/lheOklohomaArtsCouncil. jRh, kli1C1 �ltCi.lfY fliCS—(iH51l811 F105- NEW ENGMES OF GROWTH: ARTS, CULTURf:. AND DEtiIGN aJ Ro.tods largest corporacions and—despite the challeng- in� emnumy—eamed occr $800,000 in sales in 2009. These proKramn usc rhe ar[s as an inrervention svategy rhat can l�clp save communrcics hard+hip, rruvide fami- � �� ¢, lics µi�h support, und pre�cilt incarcecatiun, while 6uild- �, � �"a� ��: inR sl.ill.for a a�ncemporary wnrkforce. .,., � . . �: ��, � ` � � Including the Arts and Design in Adult �� Education and Workforce Training � � .'�' ' 2 Roth education �md lusinca. Iratlers ire incrcasin;,>h x '� rmphasizin� thr importance uf addin�the arts and _ � ��..-� design to chc workforce preparaxion mix." According to _ �� _ ,_ _ � � "-�'��`� �i recent mport l�y the National Center on Education Students in Southeast Nentucky Communixy and iechnical College eRtj C}ll' ECOIIUtriY, f�lIIl'71Cat1 l•CUIIO[lliC �BacjCitiflip `�cjo�s preparemosaicswithceramictilerorelaCethehizroryofcoalminers ROC�e�BRtj O[7 Cl'l'E1RO�Ok'y' B�UR�. �C �e�l'ilij�O[l 8 ��f� a IOHdfId11COYOty. PboforourteryolRobrrfGrpe ��rin of creativity that is constandy renewin�; ieself.""° Fixin� the piPeline for fu[ure workers is a policy priociry itive effects on smdents' crearive problem-solving skills, ti�r staces. Helping adult wurkers und improvc duir prob- decision making, noal oricnratinn, teamwork skills, lem solving and critical thinkinK, as well as the uther attendance, g�ades, and f�imily reIa[ionships." creative skills reyuired fur kn��wfedge-inrensive ju6s in The Mississippi Arts Commission's Core Arts [nitiative �he Unimd States today, is al,u on ,xate policy agendas. suppores pro�rams that an devcloped with—and wich- In ldaho, Boise Seam Universiry's (BSU) Culle�;e of in an uften overlooked segmcnt of cummunities: che Rusincss and Ecunomics hus estahlished a Center fur juvenile justice system. It was developed to help [he Creativity and Innovation dedicaced to cultivatin� a cre- state legislature address concerns about incrensed rates of ��eive workforcc and fosterink a business climace cun- juvenilc crime The stan ha,e,tabli,hed arts programs at ducive to innovatiun. [n additiun to convening annual a number uf facilities,from detention centers to alrema- "Crea[e! Idaho"foruntis, thc cenrer devclops curricula tive schools and holdin�facilities. Each prukram uses and courses{or BSU and serves as a hub for sharin�new. the arts as a tool r.o decrease violence and recidivism, as and resoureeti concernin� creative workforce and 6usi- well as to increase school attendance and provide poci- ness developnunt in d�e Trcasure Vatley m�iun."� tive expecirnces with adult mencors. Over time the Qirc Ares Initiatice has led to m�pruved behaaiur and aca- T�e STUDIO fur Creative Inyuiry is an interdi,cipliman demic perfonnance hy parricipants, reduction of violent ��ntcr a[Camc�ie Mellon Universiry in Pittshur�h, incidents, and improvemenrs in the uverall climate and Pennsylvania, that connects arts [u unfversfty research operating culeure of the participatin�facilities."^ �n a range uf subjeccs and xu gransroots community cfforts.`" Thc STUI)l0's mi,+ion is to support creation In Massachusetts, Artists fe�r Humanirp (AFH) is a and expluration in the arts, especially projects rhar hrin,� Roston ur�anizuuon chat h�is �chieved national recogni- toRether the arts, ,cience,, e�chnolugy, and the humani- cion for building a creacive workfocce, fosrerin� ares and ties and dlat affect local and �lobal communities. The business cullaboraeions, and embodying the principles of STUDIO provides fellowships [o artis[s, who�enerate environmenrully sustainablc design and business prac- specific pcoject� ehar often incurporare disciplinea frum tices Funded and aided by che Massachusetts Cultural cell 6iology, to rubotics, tu imaging rech�ology. For Council and udier public and privaee partne�s, AFH's example, [he Mobile Art and Code project praduced a central program is the Arts Micro-Enterprise, a paid conference and wockshop series tu teach mobile phone appreneices'hip program for inner-city reens. AFH links prugramming to kids and �rtists. l"he Nine Mil� Run youth in stnall groups with professional artists and Greenway was a three-year pruject rhat enKaKed artists, dcsigners to d�sikn, create, market and sell art produc[s. sciennsu, enoincers, and pl�nners in transformin�; an � AFH cr�incu h��e crearc� ��n,�lu�cs f�>r man�� af indusccial �c„isrc �irr into a su�tuin,�ble en�irnnmcnt nf 4� l��viiveuny n H�-ii.�� Fr�pni�C Woikiuice public Krecn space. T6c �Iissuc EnKinecrinq tor Life F�roj- Technulo�;}� Center. It off�rs �me- and rwn-year deRree ect pro�uced a planeearium show fucused un tisue en�i- proQram� and continuin�education dirccmd tuward a neerin� and its applicatiuns, with the Koal uf deliverink �anRe of employmenc and freelance oppurtunities in ull scien[ific content thruugh an inreractive, multimedia technlc.�l aapcc�s of Che enrercainment industry. ]n addi- show. The �roject le�l tu the dcvelopment uf a ran�e uf tion, N��rth Carolina Scate Universiry's Instiwte for curriculum materials for use in K-12 das,rnams and �m Emer�+ing Issues has adopted the "Creativity, Inc." inixi;a- outreach prograin that targets youth in underrepresenced �ive which wurks with the srate's busines.and policy and underserved �ucal and inne�-ciry conununities. The communitie, tu develop the workforce and establish state has supported the program through Pennrylvania incentives for creative businesses across North Council un the Arts�ranc.�. Carolina."° In North Carolina, Guilfurd Technic:�l Cominuniry Maine hay a strong craft tradition, and Eastern Mainr Cnlle<,� �[��rted che Larry Garlin Encectaiivnenc Community College (EMCC) and the Maine Crafrs Association recendy fonned a parrnecship to �Iecelop educatiunal prograins to suppoct rrademark crafts, includink trainin�;for work- in� artis[s. One rosult is the cullcy;e'S Trs�litional and Cuntempurary Craft decrec ��rueram, srarted in fall 2009. To fulfill the � rcyuirements for thc degree uf Asuciaee in A�plied Science fur Traditiun:�l ,ind l:onteinporary Crafts, students must success- � tully complctc a cumbinacion of�wu 6asic �iesign dasscs, in addition m a history of crafr � class, general e3ucacion cles.e,, 24 credic huurs of priur lrarning experience �iiid apprenticeship hands-un trainink, and cus- rnm-tailored intcroships in the studcn�s spe- cializa[ion:" Entmpreneurial skills are tau�ht rhrouRh threc rcquired bu.ine„ management classes, includin�;a course on 6usincss plan dcvclopmenr. Grs�duaecs will hc �mficienx in rheir specialiccd media and will hc ablc tu '� — dcmunstrate skill. in product desi�n, market- � ,� � , in�, and accounrin��. A Cerrificarc uf � � �� Tradirional and Contemporary Crafts i,aL.0 offered ae EMCC and reyuires 12 credit hnurs. EMCC provides mos[ of thc fundinR Studenu look over film negatives during photogwphy class at Parkview Arts and Yitt C}le pTo�[atn, SU�F�etnen[l� ��y Cu'o �ilva[l ScienceMagnetHighSchoolinLittleRock,Arkansas. Phommwtesyolwwwbsd.oig }pUn�a[ionk[anTS. 1 ]. . �, � ' . � . � Toboosteconomicg�owth,statesare... • Maintaining the indusion of arts in state curriculum requirements; • Inte9rating arts and design into tethnical and business programs in community colleges and universities; �. � Mapping career paths in creative ente�prises and occupations;and • Creating centers of excellence in higher education to re�ruit recognized faculty who can attract talented students and iink the arts to technology to inspire innovation. NEW ENGINES OF GROW7H:ARTS. CULTURE,AND DESIGN p so�uTioNs �r:��es G LOBALIZAT��';"� � �a�•• �� - �� -'� CR�TE revitalization � ��*�� skills business competitiveness y iob Design creation _ S't�t@S PRESERVATION � � �, . ; � Networking �_ �I"��'I'�et packaging CULTURE ARTS massu�acturiszg eConomyso��, architecture Healthca�e teCY'I`°�°�' ��e�� cities education industries I I I his repor[focuses on [he w�ays that ar[s, culrure, and dcsi�n can assis[ stams as they seek to create jobs and hoost their econumies in the short run t�nd tran- sition to an innovation-based cconomy in the lonK run. In particular, arrs, culture, and Jesi�n can produee eeonomic gcowth hecause ehey can: ■ Providc a fast-�rowth, dynamic industry dustcr; ■ Help mature industries hecome more comperitive; ■ Procide xhe critical in�redients fnr innovative places; ■ Catalyze cummuniry revitalizaciun; and ■ Ddiver a bet[er-prepa�c�] wurktorce. USIIIC] Yh2 fIVE' I'0�25 d5 Using the fivc rules as a framework, statc leaders—govemor+, economic develup- menx official,, and s[atc arts aQencieti—can make arts, culturc, and dcsign an a framework,state important parc nf en ocecall econumic �row[h agcnde. Stares have alroady under [akcn initia[ives d1a[are highly relevant to tha[a�enda. Grouped by dm five mles �Qdd2f5—gOV2ff10f5, some uf thc mnst promisink efforts indude the followin�: economic development Providing a fast-growth, dynamic industry cluster. The crcative ecunc�my docs not consi.+t on�y uf arrisrs. It includes a bruad duster of offieials,and state arts crea[ive acticirics—�r[s, culeure, dcsi�n, enxerxaimnent, publishing, fashion, and other componenxs. Existing ecunomic development sttute�ies can be used tu tows dg211CIe5—Cafl fTldk2 on creative c�usrers wiChin a statc(or compctitive advant:i�e Sta[c leadcrs can: ■ Idcntify crcative entcrpriscs—bo[h commcrci:�l and nonprofit—in .inalyscs dY25,culture,and design of statc [ndus[ry clustecs; ■ lncludc creativic enterprisea and ar[s, design, and cultural developmcnC an II'71pOYt011t pdfL Of e�perts in economic task forces, mee[ings, and uther leade�shfp activities; ■ Examinc eli�il�ility crireria for stare assistance (inccntives, trainin�, an overall economic cechnical assiscance) to m.ike +ure rha[ crcari�r enterprises, artists, zvts, and culmr�l orKaniza[ions are cliKi6le to partic.ipare; grOWth d Jefldd. ■ Inrekrate entrepreneurial curriculum modules intu ar[ and desiKn pro};rarns and into other education pruKra�ns in community culleges and fouryear institu[ions; and ■ Filu[ timall business development centec training courses for artists and entrepmneurs in creative fields. � NEW ENGWFS OF GROWTH: ARTS, CUI.TURE AND DESIOPI 48 Helping mature industries become more competitive. Catalyzing community revi[alization. Not only is the creative du.rcr a producri��e cconomic Creative industrie.—and arts and c�drure in pnrticular— secror itsrlf, but it also convibutes signfficandy to [he play nvo unpurtant �oles in cummunicies. First, ar[ists produceivity of od�er induetries and sectors. State leaders and culmral activities can create imporeant anchurs in can fosrer links brcween d�c arts, culmre, and dcsign neighburhuod, and districcs, uften helpin� to revive �ssces in eheir seatcs and industrics, such �s manufacmr- them. Second, rhe presence uf such activities will dcaw ing and tourism, tha[ are.uu�;gling to rethink their uther participants in the innue�arion economy, such as products and markets They caii: msearchers or sohH�are developen, who wan�to be in a ■ Pusitiun arxs, culturc, and design alungside R&ll creative ecosystein. Ways to support these roles include: as a source of innuv:adun econumywide; ■ Use the arts and eultural disxricrs and hutoric ■ Geam unirs and experti,e wiehin comnwnity preserva[iun pro�rams [o encoura�e devcfopers colleKes, manufacturinR extension centers, and and communiries to rcclaim abandoned spaces agricultucal ex[en.ion services dedicaced to and encourage co-location of creative and design—for examplc, providing accc�s to innov�itive 6usinesses close eo one anuthcr, and technical assistance in the design uf products, ■ Use crcative public spxces to imprucc liva6ility paekaging, and 6randing; and and yualiry uf life. ■ Cmace pilot pcograms (perhaps with fuunda�ions) chat place aniscs and de.i�ners in a position to Delivering a better-prepared workforce. wurk wich and for cumpanies as cuntracted [al- — — -- enr, inrems, or��rtisrs in residencc An orientation toward arts, desi�n, and creativity foseers the kinds ofskills required in America's Zlst-ccntury ecunomy, whatcvec ehe business uc economic sector. Providing critical ingredients fur innovative places (]��•emors can cncourage wurkfurcc development efforts lnnova[ion huhs are mucl� more than land linked to a ro 6egin focusinK an aas and creativiry—nox berause universiry. Thcy cumbine all suces of en��blers uf innova- �+'��rkers will become artists, althuugh some will, hur Ciun: fiom Cheir mixecl Iand use ro support cruss--,ector because creative skills are [ncrra�ingly reyuired foc good inxeractions and ihe ares and culcural amenitic� of ehe 1��bs, busincss success, and economic pro��erity. cmaxive econoiny xu xhe sncial u�ganizations and nex- �!��'zmors anJ uther scate leaders can: works eo connecr researchers and enerepreneurs. States ■ Ensure that arts continue to 6e included in state can foster kcy �na6lcrs of innuvation with struteKies eu: educatiun requirements, and encouraRc localicies ■ Encoura�e (via tax credics and ochcr kinds of «� �dhere tu [hose reyuirements; inccntives) ci[ies and developers tu creare ■ Suppurt arts intcgration pulicies an�3 practices culmral districts,creative corridors, innovation �hat link d�e ar�s with nun-ar[s subjce[s, huh+, and ocher pl:aces rh�t will arrract a critical including STEM initi.rtives; m�i+s of crea[ive t�lene and facilitare co-location ■ 1ndu�ly d�e ar[s and desi�+n in adult rechnical or Keo�.raphic dusterin�;c�f co�n��lementary educatiun and workfnrce training progrzims; and husinesses, �nd ■ Create cenrers of cxccllrnce in hi,�,her ■ Cun+ider universicic. and media+l reararch educatiun, [o �ecruit recugnized faculry who can in.titutions ("eds.md meds") and the spaces a[tract talented studenn and link the ares to around them as placc� that can be desiRned cechnuloRry [o inspirc innovation. physically and sxratrRically ro uffer crixical ingrcdicnts for innova[ion—smar[people, research instieutions, professiunal necworks, favorablz inmllectual propetty a��recmcnts, and �u on, rhat can hclp companic� spur innovati�n. • qq �oncl�;ion �i0�� 'lamesManyikaetal.,"AnEmnomythatWorksJobCreationandAmericai 3°Ibid. Future,"McKinsey Glo6al Institure,lune 2011, "Mississippi Arts Commission,Mississippi's Georive Eronomy. http://www.mckinsey.com/-/media/McKinsey/dotcom/Insights9620and%Z .,gerkshireCreative,WhmisCreariveChollenge?httpl/berkshirecreative.org/ Opubs/MG I/Resea rch/Labor9620Markets/An9b20economy%ZOthai9620work s°k20Job%20creation%20and°620AmericasMo20future/MGI_USJob_creatio 2010/08/30/oeativrchallenge/ (accessedDecember27,201p. n_full_report.ashx. "�igma Design Industry Group,http://www.digma.us/whatwedo/policy/ 'JimClikon,7heCominglobsWor�NewYork:GallupPress,2011�, index.html(accessedDecember27,2071) http://gmj.gallup.mm/conrent/149144/mmingyobs-waraspx. 3°Rhodelsland5choolofDesiqn,WhereArt+BusinessMeet 'Manyika et al.,"An Economy that Works." http://www.risd.edu/Where_Art and 8usiness_MeeU?dept=4294967927 °Mer<edesDelgado,MichaelE.Poner,and5cott5tern;Clustersand (accessedDecemher27,2�i1). Entrepreneurship;'lournalofEconomicGeogrophyQ010):1-24, "Americans(ortheAtts,Informationand5erviceswehpage, http://www.ischbs.edu/pdf/DPS_ClustersPerformance_OS-20-10.pdt. http://www.americansforthearts.org/information_services/research/impact areas/cultural_tourism/default.asp(accessed December 27,20111. 'Ibid. '�Urban Institute+The Fund for Folk CWmre,Culture and Commerce: °ArkansasArtsCouncil,WhaPSNew,http://www.arkansasarts.org/whats- TroditionolArtsinEmnomicDevelopmenC2003,wwvuLrbanArg/ new/decail.aspz?id=2081accessedDe<ember27,20111. UploadedpdV410812_Culture_And_Commerce.Pdf. 'AllianceforCreativeAdvantage.HegionalTechnologyStrategies,and ��OregonArtsCommission,ExploringAurhenticOregoreThelmportonceo/ Mt Aubum Associates,Inc,7he 5mre o/Colomdo's Creative Economy, [ulmrolTourism,TravelOregon EmnomiNmpoct report,January 2006, December2008,http://www.coloartsstatem.us/programs/emnomid http://www.oreqonartsmmmission.org/sites/www.oregonartsmmmission. co_aeativemnomy/The46205tate9620of3b20Colorado's4620Creative9620Em orq/files/oac connections_murism_l.pdf. nomy�/o20-4620Fu119b205tudy.pdf(accessed December D,2011�. j°Oregon Arts Commission,"Support for the Arts Gmnts;' a Ibid. http://www.oregonartsmmmissioaorg/content/gmnts(accessed "ColoradoOfficeofEconomicDevelopment,ColomdoBlueprint:ABottom- December27,2011). upApproachroEconomicDevelopmenr,2017,http9/www.mlorado.gov/csl +spfficeo(GeorgiaGovemorNathanDeal,"2012TourismProduct Satellite/OEDIT/OEDIT/R515952013761accessedlanuary20,2012). DevelopmentGrantsAwarded,"PressRelease,November17,2071, 10MississippiArtsCommission,MississippiYCreafiveEmnomy:Healizingfhe http://gov.qeorgia.gov/00/press/detail/0,2668,765937376_177824ffi9_178 PorentiolofCreotiviryinMississippi,http://mscreativeeconomy.com/ 8341�4,OO.html. docs/msveative.pdf(accessed lanuary 20,2012). !"State of South Dakota,South Dokom:Our Culmml He�imge, "NationalEndowmentfortheArts,ArtistsintheWork/orce:7990-2005,June http://www.travelsd.com/TravelSD/media/PDF/Guides/CultureHeritage.pdf 2008,http://www.arts.gov/research/ArtistslnWorkforce.pdE (accessedlanuary20,2012). "Sou[hCarolinaArtsCommission.http9/wwwsouthcarolinaarts.com/ "MississippiDelta7amaleTrail, http://www.[amaletraiLmm/index.html linc/venturesshtmL (accessed December 2J,207 71. "Ibid. 'a lowa Place Based Foods, hnp:pwwwstate.ia.us/govemmenVdca/iad '"Ibid. programs/folk-and-traditional-arts/place_based_foods/index.htm "CynthiaHolt,"MontanaArtsCouncilReceivesMajorFundingfromUSDA;' (accessedDecemberD,2011�. PressHelease,RCEDARavalliCountyEmnomicDevelopmen[Authoriry, j°NationalEndowmentfor[heArts,LivefromYourNeighborhood.�Na[ional Montana Arts Commission,summer 2011,www.rceda.org/montana-arts- Studyo(OurdoorArrsFestivols,Resemch Report No.51,1,October 2010, council-receives-maJorfunding-from-usda/(accessedlanuary21,20121, http:Uwww.nea.goNresearch/Festivals-beecutive3ummary.pdf. and hnp7/artmt.gov/fundingwo20from9o20U.5.%20Department°b s0 Ibid. 20o(%20Agriculture.pdE "Michael E.Porterand Smtt Stem,"Innovation:Location Matters,"M/TS/oon 10 qssets for Artists,"W haYs Assets for Artists?; Monagement Review 42,noA(summer 2001). http://assetsforartists.org/whatsthe-deal-with-asset-development '�Nature.com,"Profit and PiHalls:Building a Biotech Hub," (accessed Fe6mary 24,2012j, www.naiure.mm/namrelournal/v426/n6967/box/426690_bxl.himl °TnlliumArtisans,www.trilliumartisans.org(accessedlanuary20,2012L (accessedDe<ember27,2011). 1eOregonArtsCommission,Reportonfhe2009Arts8uildCommunities "'Offi<eo(iheMayor,Ciryof8loomington,"St2[egicPlanfor[he Grants:DiverseOregonCommunifieslnspireLocalCreoriveProjects,July2010, BloomingtonEntertainmentandArtsDistriR,"March2008, http://www.oregonartsmmmission.org/sites/alVthemes/sky/pdf/ABC_2009 http://visitbead.mm/media/media/application/pdf/3.pdf(accessed _Monograph.pdE December 27,2011). '"NewHampshireCommissionontheAtts,NewHampshire5mreo(theArts °OMaryland5tateArtsCouncil,"MarylandAttsandEncertainmentDistritts BiennialReport,lune2008,9,http://wwwnh.gov/nhatts/newsandcalendar/ EconomicandFiscallmpactAnalysisFY2008-FY2010FinalReport;' newsletters/NHSCA-Biennia19620Rpt962006-OS.pdE December 2011,httpJ/www.msacorg/docs_uploaded/AE-ImpaciNnalys- $OStateofMaine,luiceConfeience:TheCremrveEmnomy, �3.pdf. http://juireconference.org/mntenVwhatcreative-economy(accessed "Loma Design District http7/www.lomadesigndistriR.org/laccessed De<ember 27,2011). lanuary 20,2012). "National Centeron Education and che Emnomy,Tough Time;Tough °°Analysis oRhe Economicand Ploce lmpocis ofthe lowo G�eatPlaces Choices,Decembei200fi;BernieTrillingandCharlesFade1,21stCentury5kil15 Program,preparedforthelowaDepartmentofCulturalAffairsby (San FrancisroJohn Wiley&Sons,2009). Meghan O'Brien,OBrien Emnomic Consulting,2010, "EricvonHippel,"TheHBRList:Breakthroughldeasfor2007,"Harvord http:Uwww.iowagrea[places.gov/images/assets/gp-economirimpacf Business Review,February 200Z 2010.pdf. "HannaHeikkinen,InnovationNetwo�ko/ArtondDesignUniversitiesin "AnneGadwa.AnnMarkusen,andNathanielWalton,HowArtist5pace NordicondBalticCoun[ries:Preliminary5urvey(Helsinki:Designium,2004.) Matters:ImpactsandlnsighufromThreeCaseStudiesdrawnfromArtspace ProjecYs Earliest Developments(Easton:Menis Arts ConsWting,2010). "SEEDesign,Case Study of Good Design Support Practice,SEEdesign BulletinondLibmryofGoodDesign5upportPractice(Wales:DesignWales, °8lbid. 2007).Available:http://wwwseeprojectorg/uploaded.files/ "ArrisNinkConnectingArtisttond5pacesinMossachusetts, FINLAND9fi20Design°h205tart.pd(. www.artistlink.or9(accessed December 27,20117. "S[uart Rosenfeld,"Design in America's Economy,"memo to FORA,Danish 50 Edward Gately,"SkySong's Impact Is Put at 5113.6 million;'Arizona MinistryofEmnomicandBusinessAffairsfromRegionalTechnoiogy Republic,January11,2011,www.azcentraLcom/business/artides/2011/01/ Strategies,Apri12q2007,http://www.dukeviuworkshop.o�g/images/ 10/20110110arfzona-state-universiry-zkysong-emnomic-impact.html stories/U_5_DesignFORA.pdf (accessed December 27,207 7). NEW ENGINES OF GROWTN: ARTS, CULTUNB, AND DESIGN 4S " Don Brandt and David Roderique,Downtown Phcenix Partnership,'9t's "National Association o(State Arts Agencies,"Statewide Arts Education ImportantroKeepVibran[DowntownPhoenizVisionAlive,"Arimna Assessments,"httpJ/www.nasaa-arts.org/Research/Key-Topics/Artr Republic,November27,2010,http://www.azcentraLcom/arizonarepubliU Education/indea.php(accessedlanuary11,2072). viewpoints/artides/2010/lUD/20101727downtown-phoenix-vision.html. ��yy��ry�nOurPower:ThePmgiess,PlightandPromiseo(AttsEdumtion/or "Ibid. EveryChild Findings,Remmmendations and Highlights(rom the New Jersey "Washington5tateDepartmentofCommerce,ChooseWashington, ArtsEducationCensusPrqect,5eprember2007, http://www.<hoosewashington.rom/Pages/defauh.aspx(accessed http://www.artsednj.org/pdfs/N1Report_WOP_Final.pd(. December 27,2011). "Washington State Arts Commission,Arts Education Research Initiative, 5°"Walla Waila Innovation Partnership Zone Business Plan," "Meamring the Status of Arts Education in Washington,"FY 201 i, http://www.wwccedWCMS/fileadmin/wine/DOCS/The_Walla_Walla_Innov http://www.arts.wa.gov/education/documents/AERI-Presentation.pdf. ation_Partnership_Zone_Business_Plan.pdf(acressedJanuary20,2012). "TennesseeArtsCommission,http://www.tn.qov/arts/(accessedDecember ss 5teven VanAusdle,"Enhancing Rural Pmsperiry via the Center for Enology Z�,Z��. and Viticulture,"presentation by the president of Walla Walla Communiry '6 Ibid. CollegefortheNationalGovernorsAssociation,June1q2011, "A+Schools,AbourA+Schools:WhoWeAre,httpYiaplus-schoolsncdccgov/ http://www.n9a.org/files/live/sites/NGA/fles/pd(/1106ADV60RSVANAUSD whoweare.html(a<cessedDecember27,2017). LE.PDF;jsessionid=C195A7DC1C�5D5DE8FOFD98EDE05E238. �aA+Schools,OklohomoA+Schools,hnp://www.aplusokorg/uploads// 5°Richard Florida,The Rise ol the Geotive Oass(New York:Basic Books,20021. OKpercent20A+percent205percent20Minutepercent20Flierpercent2010_ "MarkJ.Srernand5usanGSeifet,CultureandUrbonRevimlization:A 21 09.pdf(accessedDecember27,2011). Horvesrpocumenr,January2007,5ociallmpactoftheArtsProjea,University -91bid. of Pennrylvania,wwwsp2upenn.edWsiap/docs/cultural_and_communiry_ revitalizatioN<ulture_and_urbaqrevixalization..a_hanest_documenLpdf tlONationalGovemorsAssociation.Buildinga5cienre,Engineering,and Technology Education Agenda:An Updare o/State Ac[ions,April 2017, 'aDfficeofMichiganGovemorlenniferGranholm,"GovernorGranholm http://www.nga.org/Files/pdf/07021NNOVATIONStem.pdf. SignsLegislationforEnhancedHistoricRehabilitationTaxCredits:Credit q� 6cpectedtoBoostHistoricPropertyDevelopmenC"PressRelease,January Le,Tmng,"RedesigningEducation:6uilding5choolslorScience, 13,2009,http://www.michigan.gov/mshda/0,1607,7-141-54318-206758- Technology,Engineering,andMath,"FastCompony,June10,2010, ,OO.html;MichiganHousingDevelopmentAuthoriry,"ListofResources," http://www.fastcompany.mm/1656D67/designing-schools-to-suppon- httpd/www.michigan.gov/mshda/0,1607,7-7 41-5431 7_18873--,OO.html; stem;andTheConferenceBoard,"Readytolnnovate,"ResearchReport, and Michigan Housing Development Authoriry,"Preservation Case Studies," http://www.ansusa.org/pdf/information_servires/research/poliry_roundta http://www.michigan.gov/mshda/0,1607,744b54317-11fi208-,OO.html. ble/ReadytolnnovateFull.pdf. "MichaelLLahrandDavidListokin,EconomiNmpoctsofHisroric a'Sandrafluppert,"Creativity,InnovaxionandArtsLearning:PreparingAll Preservation in Ne6mska,Rutgers University School of Public Policy,October Students for Success in a Glohal Emnomy,"Education Ans Pannership, 2007,httpJ/www.nebraskahlstory.org/histpres/publications/ February2010,http://www.aep-artz.org/files/CreativiTy_Commentary_02- Nehraska_Hist_Pres_Econ.pdf. 03-10.pdf. 6016id. °j Oklahoma Arts Council,hnp://www.artsmuncilokccom/. "'Samh Stodola,"How to Save the Cities—Send in the Attists,"FiscolTimes— "'Center for the Study of Ar[and Communiry, CoreArts Program Report: Business,Emnomiq Politia ond Finance,lune 4,2010, 1999-2007,http://wwwartsstate.ms.us/pmgrams/documents/ http7/www.thefscaltimes.com/Arcides/2010/06/04/How-ro-Save-the- �oreartsrev.pdf;CoreArts/niriarive,MissitsippiArtsCommission, Cities-Send-imthe-Artists.aspn(acressed January 21,2012). http://www.artsstate.ms.us/programs/core-arts-initiative.php 60 Ibid. a'Le,Tmng,"Redesi9ning Education";and Conference Board,"Ready ro Innovate." 65 Office of Kenmcky Govemor Steve Beshear,"Gov.Beshear and Kentucky aa National Center on Education and the Economy,Tough Choices IorTough Arts Council Create Cul[ural Districts Certification Program,"Press Release, Times. May 31,2011,http:Umigration.kentucky.gov/newsroom/govemor/ 20110531 culturaldiztritts.htm. a'Centre of Creativiry and Innovation,School of Business and Economia, "°OhioArtzCouncil,ArtsandProsOeriry:EronomiNmpacrofrheArts, BoiseStateUniversity, httpJ/mbe.boisestate.edWcci/about-the-center,and httpl/www.bgsu.edu/downloads/cas/f1e94747.pdf(accessedlanuary20, SherrySquires,"StadyCreativelyGaugesEconomic5uccess,"BoiseState 2��z) Univeniry,20�8,http://mbe.boisestate.ed Wcci/files/2009/10/ FONS winrer2008_Creative-Index.pdf. ^'Western Preservation,Press Releases,http://www.curleys�hooLcom/ press-artides/WeStpercent20Prespercent202005.htm; B°Camegie Mellon University,Smdio for Creative Inquiry, hnp://www.c urleyschooLco m/; http:Ustud ioforcreaciveinqui ry.o rg/. http://www.cuAeyschooLmm/curley_school_awards.htm. °BNorthCarolina5tateUniversiry,lnstrtute(orEmerginglssues. 6e National Assembly of State Art Agen<ies,httpl/www.nasaa- http://ncsu.edu/iei/progrdms/creativiry/; arts.org/Pesearch/Key-7opics/PublirArt/State-PublirArt-and-Percent-for httpd/www.ncsu.edu/ieUdocumenu/newthinking.pdf; ArtPrograms.php(accessed January 2Q 2012). http://wvuwncsu.edu/iei/documenls/Inventory-Report.pd(. h9WashingtonArtsCommission,http://www.arts.wa.gov/pu6lirart/ 'OEasternMaineCommuniryCollege,Traditional&ContemporaryCmhs, informationshtml. http://www.emccedu/academics/programs-of-study/traditional- contemporary-craks/(accessed Fehruary 24,2012;. '0 Education Commission of the States,"Welmme to the Education Commission of the States'High School�atabase:Gmduation RequiremeMs,"http://www.ecs.oig/html/educationissues/HighSchool/ highschooldbl_intro.asp?topic=gr laccessed lanuary 3q 2072). "Betty Ray,"TEAMS Model State:The Ohio Arts Integration and STEM Initiative(Part4of5);Edutopia.org,August20,2010, http://www.edutopia.orgPolog/ohio-arts-inregration-stem-initiative and http://wvuw.nasaa-arts.org/flesearch/Key-Topics/A rts-Education/indez.ph p. • 46 N�i�> �.1►��f.�t�� =.ta�f ��;:- - ss New Engines ates � O� � �0�� etworking � Fiue Rol�� ►� �� ,�, �, �� ►�d Design _�- - ---� - - - architecture He�lthcare � education SClE'11Ce cities 1 .'� NGA Center for Best Practices 444 N.Capitol S[ree4 SWte 267 Wdshington.DC 20001 202.G24.5300 www.nga.ur@/r,enter Puget Sound : Washington State's Best Investment EARTH � ECONOMICS � F q �� '-•.�� '�� • '._ � � � � ...�j��'�. � 'e �i� � '�� '� y� . . ., , „ +� ,.Byr, _ � ,• `.� .� . ..�y. . - � •� � �..[, �� - ..��I�-. � f,�,, 4af�+�T ,.� '�� ty y 1.. ' �� - s. if� �1'i• • � •�itj` .�'1 ' �s q . . �` ��.2"•' , I F ' `��Z`' 'r - I � � � �,I_ � �.. .! �+�� ' .. S' ' '��s.,' .,� '. _ } � � ;� ;� :� � �, '�,, n - �.. .�:,. � , ��r -�� *. ' � �; � �. � "-, .. ��'� � �,Y` °�,�. ' ` ' ..', � • �, �, � . .� . .t rr� n- ,� r,:�, � �_ 4,` _ , ,�:,. ��' � -.• �ir I . ��3 `Y - `*.rs' -.� .."'a+ '-��r � ',:,k� �s �'' +� 'J�j � �� y'*.. ,_�' _ '3 „', . � . �• , . � , � " .. " ' �_,9 . ,-�. ./: ttjt ir�".)S"�:'7� . �� +.;w .{"�� .._ - :�r. � ♦ j� - . . - er�.; ...�' . ,=w:: ti,� �ii � . . . ., ' ; .,. .�: . � � �li� � _ . N. � � •�� .:�. 'r fq , �' 4 ' r..;5 �.. ;� ... � � •"i'P. ' . . :��. '�.. ;� �. ,.. . . JR .�.i ^ D . '�t��•-IV � -..,-�. 'y�,..t� � f. . -' ��.. I IF.`, .�,m �` -5 � r : - '` . - - �w- January 2012 PUGET SOUND: WASHINGTON STATE'S BEST INVESTMENT Authors: Jennifer Harrison-Cox, David Batker, Zachary Christin, Jeremy Rapp Acknowledgments: Project team members included lennifer Harrison-Cox, David Batker, Zachary Christin, Jeremy Rapp, Rowan Schmidt, Jonathan Kochmer and Noelani Kirshner. Editing support was provided by Jeff Mitchell and Leah Mitchell. Meghan Arntson and Maya Kocian provided layout support. Special thanks to Alana Knaster for reviewing this report. The project team would like to recognize and thank the funders of Earth Economics' 21" Century Washington Initiative: The Bullitt Foundation, The Gordon and Betty Moore Foundation, The Harder Foundation and The Kongsgaard-Goldman Foundation. Without their leadership and 21" Century vision, the projects and tools described in this document would not have been possible. The authors are responsible for the content of this report. Cover photo from NASA Images 3 PUGET SOUND:WASHINGTON STATE'S BEST INVESTMENT :,,, - �� u _ ,� _ _ _f��: - - � dP.2"' • s � • � ' e ' ��4 �. - � � • � � • �ar �� ' � u - 1 - • � " • - - fu • - " � � '�.' - - � - � e • i A 21°` Century Woshrngton Stote approach to This paper explores how investing in Puget Sound economic development recognizes that long- recovery saves tax dollars and creates jobs for term job creation and environmental restoration Washington State. By looking at Chesapeake Bay and investment must go hand-in-hand. When recovery efforts, we can apply valuable and proven management of flood protection, fish and wildlife approaches. We explore how to leverage natural habitat, wastewater, drinking water, and other capital for greater economic prosperity for all important natural and human functions are treated Washington State residents and provide specific as whole systems at the scale of their physical examples that leaders can implement immediately. boundaries, we gain dramatic improvements in economic efficiency. Healthy ecosystems provide rew materials and core infrastructure functions that simultaneously provide profound and direct positive • benefits to Washington's economy. 4 Natural Capital � � �� . � � � � ""� ' � A�� I A systems approach recognizes that our natural ��y�y�,}r��I 1� 1�,, '!� �G �� ,�' �t ' i,,;��,iy�� ' environment provides economically valuable goods :µ '� �� ,f�� Z� ��`��r,�� I" �';��'!�� ' �i�;��' � and services that individuals, firms, and governments � � �!� � ��j�1 �k+ ,��' � �,�'�� I� ��F�, �,�'� " �, need, including oxygen, potable water, food, flood and 1;�, �r� � �' +�?i�� r'H A +� '1 '�I',�� ,�, , '�,� � storm protection, a stable climate, perpetuation of �� '��,� °, �p� !�,��i� (�+��ij ��r�� I� `� �!� �; � M"�, i� @) i � P' I .�� , � „ � � : biodiversity, recreation, and more. These are what we P�� , �'ljE,� 4�t�� ,� � �� i!' � � � �a ' � �� I refer to as ecosystem goods and services or benefits � ',�� 1�� ^,'� � a � �+ ��' ,��I ,� t� , we receive from natural systems. Natural tapital is `� �y �) , � �� ' �, a�4 ,�� p� 1 �� I � our stock of minerals, energy, plants, animals, and �',1 � ��, ?!, ;� �, � ,�4 � � ��'�� { � �,�� r ecosystems that yields a flow of ecosystem goods � �'' ,'� �,� �� ✓,��, , �i' � , and services. Natural capital is an efficient producer � ��y i4 � � I �'y,l , I , 9+' {� � � of many goods and services, and it is largely self- �� , d 'f�� V4 i � III�' + ' i�i I 'e '� � maintaining and in some cases even appreciates over I t1 ' ,q � �ti� ,�I�a ' � � � i,9��++�� "� �+ ' �, , time, while built capital depreciates and eventually , � � � i � � �� X� � 4 v falls apart. For example, a forest provides water �� ,, ' � '�, '�� { V flow regulation, flood protection, aesthe6c and i recreational values, slope stability, biodiversity, (� � drinking water filtration, and other services with little � �� 0 � � or no maintenance costs. �, 1 � M1 / �ti Natural capital assets such as forests, wetlands and � � marine waters, and the benefits they provide, such -�-- ^ - ^- - - '—,'-_ T��-� _ as water, flood protection, food and recreation, are T� _- _ __ _ _ ' = ' —. �_ far more stable in value than many other economic assets, such as stocks or real estate. Natural capital provides for long-term, high-wage jobs that cannot be off-shored. 7he economic value of naturel capital assets brings in hard revenue from outside Washingto� State, which supports economic development and a high quality of life. 5 PUGET SOUND:WASHINGTON STATE'S BEST INVESTME rdT Investment Opportunity Lessons from Chesapeake Our Puget Sound economy is built upon the land and Much like Puget Sound, Chesapeake Bay is a regional waters of the Puget Sound Basin, where 1.6 million economic and ecological backbone. The Bay is home people, 70% of Washington State's population, work, to residents, recreatlon, commercial and military live, and play.' ports, and historically important(though declining) commercial fisheries." Chesapeake Bay is also the largest estuary in the contiguous United States, �� • . '� ! � . • � • � � providing a wealth of ecosystem services.s • - m • . " " ' - " � '� ty Years oF Recovery Effort� The states of Virginia, Maryland, and Pennsylvania, Fourteen out of twenty-three identified ecosystem and the District of Columbia, have promoted goods and services provided by nature within the Chesapeake recovery for the past forty years. ' Basin provide benefits worth over $10 billion in In the mid 1970s, studies showed pollution was value every year. If the basin were treated as an increasing due to growing agricultural application economic asset that provides this annual flow of of fertilizers and chemicals, population density, goods and services,the asset value of the Puget and sewage treatment plant discharge.b In 1976, Sound Basin would be betwee� $300 billion and $2.6 the Environmental Protection Agency (EPA) began trillion.' Even at the low end of this estimate, the examining nutrient over-enrichment, influx of toxic value of natural systems in the Puget Sound Basin is substances, and the decline in submerged vegetation. enormous. Yet this wealth is being lost.3 The Chesapeake Bay Agreement of 1983 aligned the recovery efforts of the three surrounding states, the The key to securing ecological sustainability, federal government, and the District of Columbia.' employment, and economic prosperity is investment. This agreement helped set the goals for recovery Today's investment in Puget Sound determines the at the actual systems scale of the problem across physical nature of Washington State's economy jurisdictional boundaries and enabled coordinated tomorrow. As built capital has become more common action to solve common problems. One finds many and natural capital more scarce, natural capital has parallels to the challenges now faced by the multi- increased in relative value. Thus the returns from jurisdictional context of Puget Sound. investing in natural capital have also risen. Investing in the health of Puget Sound has a higher rete of The Chesapeake 2000 Plan was showcased as a return on investment(ROI) and more certain return model of ecosystem-based management, but so far than most built capital investments. the results of the plan's implementation have been mixed; moderate advances have been achieved in some areas, while declines have continued in others. " - � m • • - ° � •'- Points of failure in the Chesapeake 2000 Plan can be r v : � • . - o s - - , _ - attributed in part to misalignment of state agency goals and measurements.e n�- - � a ��e - • e a � m � - � - � - ' • � ' � - - • � ' - � � � • 6 The Puget Sound Action Agenda provides clear 4. The Public Must Feel Ownership and interagency goals, priorities, and reporting and Responsibility. Communication, proper framing, correctly identifies solutions at the scale of the and public engagement are critical to realizing problem, however, there are still many lessons we can shared goals. Relating the scope and articulating learn from the Chesapeake Bay example. Chesapeake benefits of the effort to the public helps secure takeaways for Puget Sound efforts include: the political, behavioral, economic, and culturel changes needed. Showing the relationship between 1. Restoration and Economic Development Go Hand- the costs and total potential benefits of restoration in-Hand. Because healthy natural systems are work builds public ownership,the required sense of essential to economic development, restoration public ownership and responsibility.10 This includes should not be viewed merely as an amenity. demonstrating ecosystem service values, and the jobs they create, while also showing the public's 2. Dependable funding Mechanisms are Needed. role in restoration, such as reducing fertilizer Understanding the economic benefits that can application on lawns and in agriculture. be realized from restoration, mapping and quantification of real financial damages from Because protection and conservation can be degradation, and clearly identifying beneficiaries implemented by the public, the Chesapeake helps establish development of fair, rational, 2000 plan emphasizes individual and community dependable, and sufficient funding mechanisms stewardship of the Bay." These include efforts to to pay for restoration. Without including the introduce every student in the watershed to the enormous value that Puget Sound ecosystems bay through direct interaction, a "government by provide, restoration work will continue to be example" commitment which includes pledges related underfunded.9 to land-use and vehicle emissions reductions, and a citizen monitoring program which trains volunteers 3. Goals and Measurements Must Be Aligned Across to perform water quality tests." All of these efforts Agencies and Jurisdictions. Chesapeake Bay is 195 elevate public awareness and shared commitment. miles long, a 64,000 square mile watershed that spans six states and is home to 16 million people.s Recovery Cost Comparison Because the health of the Bay is affected by actions The current cost of recovery of the Chesapeake of the individual and corporate residents of six gay is estimated at $18.7 billion.9 1z One Maryland states, effective coordination of their activities is county estimates their costs through 2025 to be $800 paramount. This cannot be accomplished without million, and like others, is searching for ways to fund an institution at the actual scale of the basin. this effort.13 In comparison, Puget Sound recovery is Developing common goals, and determining a estimated to be approximately $9 billion'", with much strategy to meet them,ensures that improvements of funding coming from Washington State, the federal in one area will not be offset by declines in another, government, and the 12 counties and 115 cities in the and helps avoid overlapping efforts. Coordination puget Sound region. of multiple stakeholders provides greater benefits in a far more cost-effective way toward achieving The degradation functions of natural and built capital desired results. In Washington State,the Puget are different. The cost of restoring damaged or Sound Action Agenda addresses this need. replacing lost ecosystems is high; habitat collapse has a non-linear and exponential cost when compared to lost functions of built infrastructure. Without positive restoration, there will be further deterioration, which will likely cause recovery costs to rise significantly. 7 PUGET SOUND: WASHINGTON STATE'S BEST INVESTMENT � . . � � . . . • . • . - . . - . ^� � ,�°;'�r; �._ � � ;,; � � �, .. ,� _�_ . _ �.. �',�,n�::^ L �., �r=_ ,_ w�� l, Advancing WA State's Economy Economic advancement is driven by investment. Wise economic decisions and infrastructure choices require good information. Improved economic analysis An economy is the product of previous decades tools are now available to make the large-scale shift of investment. When committing resources to to sustainable green infrastructure a reality. Good the building of our future economy, we must act investment provides greater returns to projects that with wisdom and responsibility to build solid infrastructure. From high-quality education for our internalize environmental and social costs. children to transportation, emphasis is placed on developing social, naturel, and built infrastructure ' • • ' • ' � - that is equitable and provides the best return on - a o o - investment. Billions of dollars in economic activity _ � r � � � are created from the Puget Sound region; sustaining this asset in perpetuity contributes significantly to the economy in Washington State. Hundreds of billions of dollars will be spent on private As we work towards developing a greener economy, and public investment in the Puget Sound Basin in the we look at the retention or restoration of natural next 20 years. like the investments of past decades, this investment will determine the physical nature of systems as a key component of investment. Green the Washington State economy. It will also determine infrastructure can dually be "natural capital" like how the etonomy will impatt the land5 that house forests, wetlands, and Puget Sound, and green the cities, manufacturing facilities, people, wetlands, "built capital" such as green buildings, renewable prairies,forests, rivers, and mountains of the Puget energy or paper mills with low ecological footprints. Green infrastructure is likely best accomplished Sound Basin. Every dollar invested or spent will as a combination of natural and built capital. For contribute to ecological damage or benefit. example, flood protection is most effective when it It is increasingly clear that the major negative impacts utilizes a natural system, such as a wider floodway, to Puget Sound are the result of environmental in conjunction with built systems, such as properly degradation from expanding built infrastructure. Storm located buildings and the judicious use of levees and water, sewer effluent, non-point pollution and land dams. use changes are ail driven by infrastructure investment decisions that do not fully consider the externalities • of environmental costs. They demonstrate that our investments in infrastructure can hurt us as well as 8 help us. The Puget Sound Basin cannot be ecologically Environmental Restoration and Economic healthy or restored if we do not change how public and Development private infrastructure investment in built and green �n restoration and conservation, the potential return infrastructure is made. on investment justifies significant investment. The Value of the Ecosystem Services un Puget rate of return on a particular restoration or green Sound infrastructure investment depends on the physical and economics characteristics of the restoration In 2010, Earth Economics conducted a partial Work. Currently, the number of trees planted or miles valuation of 14 ecosystem services across 17 land of shoreline restored is tracked, but the economical cover types in the Puget Sound Basin. This study impact of that work is not typically calculated. For showed the asset value of marine and terrestrial example, the Thea Foss Waterway clean-up provided ecosystems in the Puget Sound Basin to be hundreds a 2:1 return: over $300 million in new investment. of billions of dollars, with benefits provided to the This return on investment is expected to support over regional economy calculated at between $9.7 and $83 1,036 jobs and return about $134 million in additional billion per yeur. tax revenue to the state over the next 20 years.15 _ . Figure 1:Value of Built and Natural Capital over Time a • : m a rz - � �� : o . Value of Build Capital F � B' � i � 4 • B • . � Using a 3% discount rate, the asset or present v value provided by 14 ecosystem services in the ,—', Puget Sound Basin is as much as $2.6 trillion.' For � conventional purposes, a positive discount rate accommodates for the nominal value of future goods. Unlike regular goods and services, however, natural ecosystems do not depreciate over time. Figure 1 (below) shows how the value of natural capital grows across time at an increasing rate relative to built Time capital, which depreciates. When using a 0% discount rate to reflect equal value, provided across tlme, over Value of Natural Capital a span of 300 years, the asset or present value of ecosystem services in the Puget Sound Basin is $8.3 trillion on the high end." v � � > a)Accounting for uncertainty,and the range of ecosystem services values,the net present value with a 3%discount rate calculated by Earth Economics is between 5305 billion and$2.6 trillion.' b)The net present value with a 0%discount rate calculated by Earth Economics is between 5967 billion and$8.3 trillion.' Time 9 PUGET SOUND: WASHWGTON STATE"5 BEST INVESTMEN� , ,� .. _ , . � � � J_�'. T ii. �•��'' 4}., ...� . .. � .. .. ,. . . l�_�` � \ � �i '� � e� � � __ __ .. .ul - - �� The expected dollar value of ecosystem services in peer reviewed studies can be contributed to great provided by restoration or green infrastructure variation in health of the study site, date studied and investments can be estimated in the same way methodology used. Generally, higher values can be benefits from built capital are estimated. Table 1 associated with healthier functioning ecosystems. highlights some of the findings of the 2010 study Like a house or business appraisal, there is a range of showing a range of annual economic values for "comps" for estimating value. different vegetation covers. The great differences between minimum and maximum values reported • 10 Table 1. Range in annual benefits per acre ecosystems provide to the state economy. Minimum Salt Marsh 382.75 122,098.87 Beach $23,787.06 586,757.22 Wetland $14,377.14 $71,103.69 Riparian Forest(Mid-Late) $3,706.70 $27,004.81 Lakes and Rivers $77.71 522,022•2S EelGrass Beds $5,860.22 $16,410.10 Riparian Forest (Pole) $1,144.16 $11,780.13 Late/Old Forest (30+cm diameter) $426.17 $2,5�8.20 Ope�Water Estuary $310.15 $1,863.11 Mid Age Stage Forest (10 to 20 cm $83.28 $1,163.45 diameter) When we compare restoration costs to the high value range, the return on investment is extraordinary. In Table 2, the restoration costs of salt marshes and estuaries are compared to the annual ecosystem service value of these land types in their pristine condition. 7able 2-Costs of restoration and benefits of ecosystem services for salt marshes and open water estuaries. Minor project example: Removal of invasive plant species. $900 per acre (minor project) Salt Marsh to Major project example: Large-scale sediment $9,000 per acre (major project) removal. This figure does not include septic system upgrades. Minor project example: Removal of invasive Open Water 58.000 per acre (minor project) plant or animal species. Estuary to $250,000 per acre (major project) Major project example: Removal of contaminants and restoration from an oil spill. Up to $122,098.87 per acre, per Salt marshes serve as storm buffers by a[ting Salt Marsh as a sponge for large storm surges and heavy year rainfall. Open Water Estuaries provide a safe haven and spawning Estuary Up to 51,863.11 per acre, per year grounds for a diverse list of animals including birds and fish. 11 PUGET SOUND: W'ASHINGTON STATE'S BEST INVESTMENT Restoration Impad on Jobs Shellfish Example � � � Healthy riparian areas directly support the Washington State economy by providing beneficial �" ' ecological functions for downstream shellfish beds. �Z', Proper salinity levels and limited pollution from storm �' ��R�� water runoff and septic systems are key to sustaining �•a�R;-- •� _ .a�. • healthy conditions for beds of Manila clams and other � commercial mollusks found in Puget Sound mudflats and estuaries. • Restoring watersheds will reverse the decline of harvestable shellfish beds. The Puget Sound Action Agenda sets a 2020 goal to restore 10,800 acres of shellfish bed to harvestable quality. That addsjobs and economic value to the Puget Sound Basin (see Table 3). . .��y-� - � � a� � • '• m � .�� ' n � - � • - we • �� • � � - � • 4 ' • - S I� . ..b�0i � �' � � • 12 Table 3-lobs associated with shellfish fishing in Puget Sound. Jobs currently supported by shellfish This figure does not include jobs associated fishing in Puget Sound 311 jobs per year with shellfish farms due to data availability difFiculties. Jobs currently supported elsewhere This figure includes jobs associated with in the Washington State economy by 467 jobs per year Production of shellfish like truck drivers who deliver harvested shellfish to workcrs who shellfish fishing process them for food. Short term jobs created from This figure includes planning, construction, restoretion of 10,800 acres of shellfish 1,469 jobs total planting, and monitoring jobs created by beds by 2020 shellfish bed restoration projects. Annual Increase in shellfish fishing z2 johs per year These jobs will be permanently created jobs after restoration from the increased acres of shellfish beds. Jobs supported elsewhere in economy from post-restoration creation of 25 jobs per year Similar to above. shellfish fishing jobs (l) Current job figures are available on the Bureau of Labors Statistics website"and supported jobs were provided by a collection of job multipliers.'a (2)Using shellfish 6ed restoration 2020 goals from the Action Agenda," job multipliers were used to calculate job creation.t0 All jobs figures are based on the assumption that 1,DSD acres are restored each year until 2020 for discounting purposes�using a 4.125%discount rate). 13 PUGET SOUND: WASHINGTON STATFS BEST INVESTMENT Employment Security Economies work when people work. Employment � • ' ' is a necessity. Besides paying for food and rent, . � � . � � e � jobs deliver personal satisfaction. Work enables the surplus available for leisure and essential collective � ' ' ' ' - � e investments such as schools, roads, and health care, ' " ' T � = which in turn fuel greater economic productivity and a rising quality of life. Surveys show that even our Importantly, investments in the conservation and level of happiness relies on the productivity of our restoration of Puget Sound cannot be sent overseas. own labor.21 The full economic benefits of healthy forests, marine waters, and all the goods and services they provide, The Puget Sound Basin provides significant are garnered right here in Washington State, and employment in Washington State. As of October directly employ Washington State workers. Products 2011, there were over 3.17 million people working derived from Puget Sound contribute to a positive in Washington State.ZZ Nearly 71% of all jobs and and sustainable trade balance for Washington State. 77%of total income in Washington State are found in the Puget Sound Basin.z These jobs include manufacturing, services and shipping. Over 100,000 ' . ' • ° jobs are considered "green jobs" under a traditional s . . . . - • o . o � ' • • definitlon of contributlng to energy efficiency, . � • • • • renewable energy, environmental restoration, pollution reductlon, and environmental awareness. Through the financial crisis, while traditional jobs • . u • - - e . • • shrank, green jobs expanded in Washington State • v •� a - • . • • and the Puget Sound easin. From green technology to salmon restoration, businesses in the Puget Sound ' r . � - ' � - � ' . - ' Basin are creating sustainable jobs with a healthier • � environment.Z3 , t _ -=� � n � u�wmiul� ; iN —r-— rs �; ...��I .� - �� ^ ��~ � -- �S.,��„! :r _ }� y�m � �?-Yr ■.� ��"{1t�' � •.-� • wy . . .'M�� ' r. i " ✓�MII�+�..�". � .. i �� y; - .� .i...� ,"r Iw�sL� _`� v I ��=`) �.. LY. �A�O ��%!/�� 'I,�I �i Y�� i _ W�w�� .�� `LIA . , .. . , ..�Mr+y1I� :r �' •1 � _ 14 - . . . . . - Building a well-rounded and sustainable Washington State economy is dependent upon healthy natural systems in the Puget Sound Basin. Boeing and ° " " ' ' ' � Paccar, for example, are two of the state's largest ' ' ` - � ' ' manufacturers. Both are fully dependent upon � � a the flood protection and abundant water supply provided by natural forests, wetlands and riparian _ • � • •- '� • 9 �'� corridors in the Snohomish, Cedar and Green River - � . . . . - e . watersheds where their manufacturing plants are 0 located. In addition, these and other companies such m as Microsoft, Google, Real Networks and Amazon , . . . . ., ., ,, are able to attract a highly skilled labor force to the Puget Sound area because workers are attracted to ... . � the beauty, clean environment, outstanding outdoor opportunities and high quality of life provided by a '� • • healthy Puget Sound Basin. , Creating a robust demand for employment with higher wages, greater resiliency, health, wealth, and diversity in the 21�` century Washington State economy requires investing in the coordination of investment within, restoration of, and conservation of the Puget Sound Basin. � ,� .. +'ric �. . — ' .�,.,..,�"�-. , S � � , I f e� i'!:- : "^Y" � ,__,.,� _ . �, �.. `�—.. R(�'�i� +' —,.,.. * ,�� '� i � . , y!`�.,�. — � ; � � ; �d � � '1 ,�. �� - . � + , � � � _ Y ' 3 ' � '"f � � , - � : _ i � � ' - :i - 15 PUGL"T SOUND�. WASHINGTON STATPS BEST INVESTMEN� Achieving Sustainability and Economic Prosperity ° '' • ' � - ' - - . ° Shifting investment requires accounting that includes ' � ' ' � � � Y • the value of natural capital, improved measures and • � • ' • • • • ' " `' tracking,jobs analysis, better benefit-cost analysis, . � - „ � - . � and accessible economic incentives that reward green investment. ' • • • m ° - - - • m � o Puget Sound Health Measures - u - � - � Many human activities threaten the health of Puget Sound ecosystems. There is agreement among regional scientists and community leaders that loss RECOMMENDATION: Measure and report the of habitat and rising pollution levels are the top two economic benefits of Puget Saund restoretion threats facing Puget Sound health.19 progress, under the Action Agenda framework: jobs created, ecosystem value and ecosystem In 2006, the Washington State Legislature directed health. Currently,the Partnership's website the Puget Sound Partnership (("The Partnership") to features a Vital Signs dashboard that allows work closely with existing state, regional and local tracking of progress on restoration goals from the organizations as well as at all levels of government p�on Agenda, and perhaps it could be updated to develop and implement the scientifically sound to include more information on the economic Action Agenda to achieve recovery of Puget Sound benefits of the various restoretion projects by 2020.19 The Partnership was authorized to provide proposed and underway. assistance to watershed groups implementing the Action Agenda. It was also charged with improving coordination among the jurisdictions and actors to improve efficiency and accelerate the implementation of the Action Agenda. The Partnership also helps set and monitor goals. The Action Agenda sets a plan at the actual � scale of the problem and aligns stakeholders, jurisdictions and other partners. This clear plan, along with management and assessment by various state agencies (including the Washington State departments of Ecology, Department of Natural Resources and Fish and Wildlife) has delivered significant federal investment in Puget Sound �)This dollar figure was derived from a collection of 2010 grant recovery. In the first three years since the formation data from the Pacific Coast Salmon Recovery Fund,the National of the Partnership in 2007, nearly $440 million has Fish and Wildlife foundation, NorthwestStreits Commission and been invested in Puget Sound. In 2010, over $90 the Environmental Protection Agency. million in federal funding was allocated to Puget d)The job figures here were calculated by deriving the millions Sound recovery.` In 2010 alone, state, federal and of dollars distributed to each project 2ype(restoration type, land acquisition, maintenance,etc)and using a variety of multipliers organizational investment in Puget Sound generated specific to these project types.'d '0 '°'"In some cases, manyjob roughly 6,494 WaShington State job5.`� multipliers were avereged. 16 Natural CapotaV Accountong Jcrs�s Analysus far Restorafia� Watershed-filtered water utilities like Seattle Public Currently,jobs for restoration projects are measured Utilities and Tacoma Water contribute billions of in terms of shovels in the ground, not in terms of dollars to local and regional economies by managing the long-term jobs created as a result of restored lands that provide ecosystem services such as fresh ecosystems. Restoring salmon populations,for water filtration, storage and supply, flood protection, example, increases recreational, commercial, and habitat and recreation. Currently, natural capital is tribal jobs, as well as wholesale and retail jobs. not recognized as a capital asset that is measurable As Table 4 shows below, estuarial and riparian within standard accounting systems. As a result, these restoration creates more jobs per$1 million spent assets are undervalued and investment in the form of than infrastructure projects such as road work. capital improvements, maintenance, and operations are insufficient. Job creation from land and estuarial restoration is significant because natural areas produce ecosystem In addition, funding mechanisms such as bonding are goods (like increased salmon yields) which contribute not available for restoring natural capital. Washington to the economy both through industry and recreation. State and the counties of the Puget Sound Basin Creating jobs is increasingly important for the can lead the way initiating changes in national allocation of federal funds, therefore counting jobs accounting rules to accommodate the economic created by restored ecosystem services is a vital part value that natural capital provides. Earth Economics of any restoration effort. has identified concrete steps agencies can take to properly account for natural capital and is currently RECOMMENDATION:Washington State should have engaged in discussions with the Government the capacity to calculate job growth resulting from Accounting Standards Review Board (GASB) to discuss natural system restoretion for any projects in the rule changes for government agencies. Steps include Puget Sound Basin or in the state. disclosure to the public on financial transmittal letters and description of natural assets in financial Table4-Job Multipliers by7ype footnotes. Jobs Created per Definitely Million of$ Invested RECOMMENDATION: Disclose the value of natural (2010 $) capital in annual reports, in annual financial transmittal letters and in communications to General Construction�d 11.95 the public. Agency finance directors can contact Highway & Street Earth Economics (info<u eartheconomics.org)for Constructlon28 11.94 example transmittal letter text. Land AcquisitionzJ 13.9 Sewer & Water Construction2e 14.68 Management & Administrative 17.16 (Education)2e Land Restoration'a.za,zs 18.5 (average) Estuary & Riparian Restorationzb;z9 Z3.5 (average) 17 PUGET SOUND: WASHWG70N STATPS BEST INVESTMEN7 Correct Jurisdictional Scale that will serve as a case study for other watersheds Single-purpose investments often create in Washington State. WRIA 9 is one of the state's "infrastructure conflict;' where one infrasiructure most developed watersheds that is home to major investment frustrates the single-purpose goals of industries (Boeing), agricultural development and other infrastructure investments. Coordinating over 600,000 people. the investment of single-purpose districts within watersheds, and then within the Puget Sound Basin, W�th unanimous support from 16 cities, King County, could provide far greater benefits at less cost. Where the business community and non-profit groups within ecosystem services such as clean water and flood WRIA 9, Earth Economics held and participated in a control are lost, new single-purpose tax districts series of discussions among city agencies, counties, such as shellfish districts, storm water districts, and businesses, NGOs and other members of Puget flood districts are created, with investments that can Sound Watershed Resource Inventory Areas 7, 8, undermine each other. 9, 10, 11 and 12 between 2008 and 2010. Through these engagements we developed the concept of For example, 16 cities in the Green/Duwamish River creating an institution to be organized and operated Watershed have built storm water systems, generally at an appropriate (watershed) scale. The Watershed directing water more quickly into the Green River. Investment District (WID) would facilitate an This has increased peak flows and flood damage, integrated approach to watershed and naturel capital including damage to levees. Both higher levees and management. current storm water systems have contributed to salmon mortality and a reduction in water quality, As watershed ecosystem services tend to conform to thereby damaging Puget Sound. Alternatively, natural boundaries, this scale for a WID would be an multiple benefits are produced through allowing a appropriate scale for integrating planning, funding flood district to pay the marginal difference between and management of services such as flood control, a green infrastructure storm water option that puts storm water management, and carbon sequestration. water back into the ground water. In turn, this handles Such an integrated approach is consistent with storm water, which reduces flooding and contributes $6.15.035 RCW specifications for involving flood to higher flows in low-flow periods for salmon. control districts, cooperative watershed management actions and with 39.34.200 RCW, which establishes RECOMMENDATION: The determination of the a general precedent for watershed management scale of any natural capital distrid should be partnerships. informed by the nature of the watershed,the area that provides the service, actions that damage ""King County, in partnership with a cross-WRIA the service, and the location of the beneficiaries. coordination team, has created a rough draft of state Appropriately recognizing the scale of jurisdictions legislation that would authorize the development would vastly reduce costs and provide greater of this integrated WID approach. The WID could be benefits to Washington State's citizens. designed as a tax district to restore natural capital on a watershed scale. Just as the Transportation Department we need federal, state, regional and Watershed Investment District Example local transportation agencies to work cooperatively Seeing a tremendous opportunity to turn single- to maintain restores and maintains our road systems, purpose investments into win-win watershed we need local, regional, state and federal cooperation investments that improve water quality and the to maintain our green infrastructure. health of Puget Sound, the Green/Duwamish River • Watershed (WRIA 9) is pursuing a funding model 18 A WID It could also would help coordinate investment While gaps in current Benefit-Cost methodology within the watershed between local agencies and ignore services provided to the community, it also fails institutions (i.e. utilities, flood districts, shell fish to inform urban planners of the costs of developing districts, stormwater districts, cities, counties) and in floodplains. By not fully counting the benefits of other regional institutions (i.e. PSP), state agencies natural floodplains, the current Benefit-Cost Analysis (i.e. Washington Departments of Ecology, Health, used by federal, state and local agencies tends to Natural Resources, Parks, and Fish and wildlife), and support repeat flooding and house reconstruction federal agencies (i.e Environmental Protection Agency, and repairs, rather than the purchase and removal of Homeland Security, Department of Agriculture). houses within the floodway. Finally, for some counties, particularly rural counties, a WID framework could allow for the creation of m�— - a district that encompasses several institutions or �� ` jurisdictional efforts, such as a flood district, salmon .i-� _ 'R ` ' •_ _ - . . _ I. restoration and storm water management" � � �j - i T�`'-� ��l�i�� _ :.:r!!� .�� r�`_ RECOMMENDATION: Review and consider � �" supporting the legislation enabling the creation of �,_^_._._,.�- ' �� ' a Watershed Investment District. � �s_�,,�� —�.�� _l- Benefit-Cost Analysis . Benefit-Cost Analysis, also known as Cost-Benefit 'z'�!'�— � �_ � -- , ��"' Analysis, is the economic tool used by federal, state, �i � and local agencies when making decisions about � ' ��"�' projects and progrems. However, Benefit-Cost + 'i � ' J.� =�^ Analysis does not include the contributions of natural ' % ecosystems in the protettion and economic security " � �� --` � of communities. Excluding the services of ecosystems "�' ` will allow those services to degrade, ultimately harming communities and Washington State's economy. Including these services - which is now �' %� possible and inexpensive to do - will give far better _�,� ' A'. results. washfngton State is experiencing increased severity of flooding hazards, growing population, large-scale Flood and Community Response Example landscape alterations and rising stresses on critical During a storm, a forest will retain rainwater, soil, ecosystems. As a result of increased risks from and debris, which are valuable ecosystem services to flooding, communities, businesses and ecosystems flood-risk communities. Since the current methods have incurred greater costs as they rebuild homes and of Benefit-Cost Analysis do not place value on these livelihoods in the wake of flood events. The National services, the flood protection the forest provides is Ocean and Atmospheric Administration (NOAA) often ignored. As a result, the forest will be cleared reports that 2010 floods in the United States caused or degraded. The community will lose the flood nearly$5.114 billion in damage. Of that total, $1.118 protection services provided by the forest and will billion was in agricultural crop loss.3o be at greater risk. This often strains the community's The impacts of flooding on communities can last for engineered flood protection infrastructure. 19 PUGET SOUND: WASHINGTON STATE'S IiEST INVESTMEN I decades. Flooding displaces rural households and RECOMMENDATION: All watersheds in the Puget small businesses. The agricultural landscape is altered Sound Basin shou�d have an ecosystem service and crops are depleted. Infrastructure is destroyed. analysis completed and updated every five years. Lives are disrupted. Jobs are lost. The appropriate staff from government, private firms, and non-profits should have ecosystem RECOMMENDATION: The State of Washington service treining and the capacity to apply could lead the way by instituting changes in State ecosystem service tools in their work. Benefit-Cost Analysis protocols, using Puget Sound Basin projects as an example. Agencies can now request improvements in Army Corps of Engineers and other federel agency Benefit-cost Analyses to include ecosystem services. Better Benefit- Cast Analysis tools are available to apply to this approach in Puget Sound and across Washington State. Watershed Characterization Studies Watershed characterization studies are important to understanding the physical nature of watersheds. Watershed characterizations, salmon habitat plans, and other watershed-based analyses can be informed by an ecosystem service analysis. It is also important that state agencies, particularly the Department of Natural Resources and Department of Ecology (which have supported ecosystem service analyses), adopt this analysis as a normal part of operations. To date, several watershed inventory areas (WRIAs) have included ecosystem service analyses in decision-making, including the Snohomish River Watershed, Green River/Duwamish Central Puget Sound Watershed, Puyallup White River Watershed, Nisqually River Watershed, and the Skykomish, Tolt, and Snoqualmie sub-watersheds. Earth Economics is developing tools and training for consulting companies,government agencies, and non-profits to conduct and update ecosystem service analysis at very low cost. We expect these tools to be available for inclusion in watershed characterization studies and for other uses in late 2012. • 20 COCICIU51011 • An approach where land-use planning, Our Puget Sound economy is built upon the land and systems modeling, GIS mapping, and new waters of the Puget Sound Basin, and it contributes to ES tools can help decision makers recognize a healthy and growing Washington State Economy. We ecosystem value and provide critical cannot continue to advance economically and socially guidance for legally sound action in project without acknowledgement of the ecosystem services and planning efforts. the Puget Sound Basin provides. The tax revenues ' An approach where agencies and provided within the Puget Sound Basin help support jurisdictions have reliable funding mechanisms for conservation and Washington State, as they support roads, schools, restoration, based on the science and police, parks, and other benefits for all citizens. Rural communities throughout Washington State see jobs economics of ecosystem services, and services decline when tax revenues from the eliminating dependen�y on competition for Puget Sound Basin fall.31 scarce federal restoration grants. • An approach that acknowledges that it Restoring Puget Sound generates jobs, goods, and is less costly to protect now than restore later. The true cost of polluting is not only services, in addition to drawing in greater investment. calculated but incurred, allowing for more For example, the Thea Foss Waterway clean-up provided a 2:1 return, over$300 million in new spending on protection today in order to investment. This return in investment is expected avoid unnecessary high payments required to su by restoration in the future. pport over 1,036 jobs and return about $134 million in additional tax revenue to the state over This vision is ossible and it starts with Pu et Sound. the next 20 years.15 Thanks in large part to the vision Investment can be shifted on a large scalego secure of Washington State's leadership and the focused sustainability in watersheds, for both urban and goals provided by the Puget Sound Partnership, this rurel areas. This new model is already underway in example is being replicated all over Puget Sound and many Western Washington watersheds that feed is contributlng to Washington State in hard economic puget Sound, including the Cedar, Green River- times. Duwamish, Puyallup, Snohomish, and Nisqually. This The citizens of Washington State are on the threshold vision is supported by critical stakeholders including of seeing ecological economics play a significant role in Snohomish, King and Pierce County staff, the infrastructure and planning at all levels of government. academic and scientific community, state agencies Imagine Washington State fostering a robust, holistic and Puget Sound Partnership, and community-based non-governmental organizations. approach to urban and rural watersheds based on ecosystem services: Washington State is a natlonal leader in smart • An approach where investments in storm water investment in natural capital. But there is still more management, flood protection, drinking water, ,�,ork to do and there are advancements to be made salmon habitat, biodiversity preservation, in terms of policy, implementation, and tracking. forestry,and conservation are integrated to With focused effort from leaders at the state, provide greater benefits at lower costs —the re ional, and local levels, to ether we can ensure a foundation of a 21" century green economy in g g Washington State. healthy, prosperous 21" Century Washington. 21 PUGET SOUND: WASHINGTON STATE"S BEST INVESTME�T • Photo Credits COVER �O NASA IMAGES PAGE 4 O EVERYSTOCK PHOTO � KEVIN PAGE 5 �O FOTOLIA � JOHN MATZICK PAGE 8 �O FOTOLIA � NING RUAN PAGE 10 O FOTOLIA � PAYLESSIMAGES PAGE 12 O FOTOLIA � MLEHMANN78 GAGE 14 • OO LARS SUNDSTROM PAGE 15 OO WIKIMEDIA � SNTY-TACT PAGE 19 �O FOTOLIA � DSCHREIBER29 • 22 References 'Washington State Department of Ecology, 2008. Focus on Puget Sound: Economic Facts. 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A Preliminary Estimate of Economic Impact and Job Creation from the Oregon Watershed Enhancement Board's Restoration Investments, Institute for a Sustainable Environment, University of Oregon. Available at: httq://www.roeuebasinwatersheds.ore/files/estimate%20of%20 economic%20imoact%20and%20iob%20creation.pdf (Accessed December 2011). zSVaile, J., 2010. Restoring the Rogue: A PLan to Prioritize Restoration on Federal Lands in Rogue River Basin., Klamath-Siskiyou Wildlands Center. Available at: htto://kswild.ore/what-we-do-2/restoration-and- collaboration/RRR.FINAL SM.odf (Accessed December 2011). • 24 zbBuckley, M., 2010. Getting the Demand Right for Valuing Urban Ecosystem Services in the Pacific Northwest, � ECONorthwest. Available at: http://conference.ifas.ufl.edu/acesl0/Presentations/Tuesdav/C-/qm/ Yes/0350%20M%20bucklev.Adf (Accessed December 2011�. z'Department of Interior, 2011. The Department of the Interior's Economic Contributions. Available at: htt : www.blm.�ov/or/socioeconomic/files/DOI-Econ-Report-6-21-2011.pdf(Accessed December 2011). ZBWashington State Recreation and Conservation Office, 2012. Washington State Input Output Model. Z9Restore America's Estuaries, 2011. Jobs & Dollars: Big Returns from Coastal Habitat Restoration. Available at: httq://www.estuaries.or�/ima�es/stories/rael7.qdf (Accessed December 2011�. 30National Oceanic and Atmospheric Administration, 2011. Economic Costs: Annual U.S. Flooding Summary. Available at: http://www.economics.noaa.�ov/?¢oal=weather&file=events/qreciq&view=costs 316atker, D., et. al. 2012. EverGreen Jobs: Sustainable Employment in Washington State. In Press. � EARTH � EC � NOMICS � What is your planet worth? 107 N. Tacoma Avenue www.eartheconomics.org Tacoma, WA 98403 253.539.4801 �• : .�s�r�� . ��, ��"�, �s�arr�r�i � �, � _ .,. � • ` Q , �� ...... . �_ ' T'� �:�y . L:II K� �. p ,(�i'q Ni+� . . e� �� a =' N V C�'� � �� .�� n�r, �,. .� ;' �iy . � / . t � �J�Ilr�l ��jn ��'3�'d.� ! i •.�...� M l _��M2:� '�� .u-� � 1• ��r+.. �1 I��1 Y : ��.� _ �1 � 11 � � � - _. . _ _ __"a- �—+�� 4 P ' -. �r4��1 - `��'•- I ~ h4 . `'.�� .�� 1Y1:. � � � Y� � .(��"'�+�at'�� Iy�f �''4'.� r, r . •; .�/� �¢�' ^q' �^' �'* �1'�` ' � � .�• y � Wyis��. ,e.. , e �?�'`l5` : .. � '��: • � �y� ��.� N�.-. ..:�_`T- A . a�eT - l �' �4�'t- '�SyC�1.�35 � –�.~ :.9d. ��1.' — .- 1,=�'�•� � . . .�Stii •��.w�r.. ..� t.y�+itif," 1 ^1�1: r �� t�� _ ;'. ,�'�r��'��T(',��:•�`��~•`•�•�9 s (+�r �''E',e» ,+4i.' .f`� - Tyr' " 1. _ . .Y" - ��" ,��.y _ � ..�_ �� ..� ,' =` a-+ii� ��,;:=�� i r_-_,�-�^':'r�'�-r.t . �. Knight Soul of the Community 2010 Why People Love Where They Live and Why It Matters: A National Perspective Knight Communities � ,. :� KNIGHT � a � � • � � �T T(�I .. ..� • �� \ "n' �■ [ \~ \ � a I. " .. .. � t ��M ��. y n y � Y �Y i r � . � , � �4� � ��, ,i ~� �� — � , . •� � � � � � � � � ? + a .. ; .� �S T � �. 1 ♦ �� . • - ` � , i T� � S� r' � 3 � At the Knight Foundation, our mission is to create more :. informed and engaged communities. We emphasize _ transformational projects.The Soul of the Community " ' project reflec[s this mission.This study offers leaders a radically new way to think about their mmmunity �� t'� . . � and invites creative approaches for improvement.The - - report, based on interviews with residents in 26 Knight . . � � communities, proves that a signifiwnt connection exists — --- between residems' Ievels of emotional attachment to � _, . � their community and its economic growth. It presents Y r + surprising and nearly universal findings about why people form lasting emotional bonds to where they live � , � 'kr:., , .-, „� We hope these discoveries inspire renewed ��tt:` r-,- �, Y 4,1'"� ` *;. , engagement in all residents and create lasting, .L� ," + �� positive change. � �� P �� `� � � sj � = Paula Lynn Ellis,Vice PresidenUStrategic Initiatives '� - John S. and James L Knight Foundation � � � --� / ��1� �� l "'` `'1 � �f � `^i '"y . �., ��/ L 1 v` � /H+ll�M, ' — iy� � i s, �� Y " 'r_.r. 71` � al' �� p li, ...................................... � ,J ... - ' � � TABLE OF CONTENTS Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Community Attachment: An Emotional Connection . . . . . . . . . . . . . . . . . . . . . . . .5 Why Attachment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Relationship to Community Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 How Gallup Found the Factors With the Strongest Links to Attachment. . . . . . . . 9 What Matters Most. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 OverallFindings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 OverallAttachment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Key Drivers of Attachment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Whols Most Attached . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Implications for the Knight Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Strengthsto Leverege. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Opportunities to Prioritize . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Snapshots of the Knight Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 3 .......................... Copynghtm 201�Gallup.Inc.Allnyh�sreser�ed. � � � :a'`. � 'f' ' ��r l. � .,yj .�s��i . ~_�9 #. ry.,(lr�J ' "1 . 7.��:., ...'�.��5`y` ii 5 � .i ., '.� IJ��n# � ` e�- � � � �' .�i.�� • �� ..,L,w..s�•�� .��`�-� � � _�--zL=- .r. � � .�� ar� � . � F '� .,� .�� -- . - :rv -� '� �� * +� >` .� ~�`�---�� '� � � C �'��r� � , _ ��"�'_ �.- --. _ _ `. INTRODIJCTION On behalf of the John S. and James L. Knight Foundation and Gallup, we are pleased to present the third annual Soul of the Community report. This study was conducted over three years in 26 cities across the United States where Knight Foundation is active. It was designed to find out what emotionally attaches people to a community —what makes them want to put down roots and build a life there. In today's challenging economic dimate, community leaders are seeking new ways to attract and retain people, develop prosperous economies, add intellectual capital, and create jobs. This report provides a fresh perspective about the current driving factors of passion and loyalty in a community. Most importantly, it represents the voice of the residents themselves. Gallup gathered insights from nearly 43,000 individuals, and the resulting picture will help community leaders to answer important questions such as:What makes residents love where they live?What draws people to a plaw and keeps them there? The study provides empirical evidence that the drivers that create emotional bonds between people and their community are consistent in virtually every city and can be reduced to just a few categories. Interestingly, the usual suspects—jobs,the economy, and safety—are not among the top drivers. Rather, people consistently give higher ratings for elements that relate diredly to their daily quality of life: an area's physical beauty, opportunities for socializing, and a community's openness to all people. Remarkably,the study also showed that the communities with the highest levels of attachment had the highest rates of gross domestic produd growth. Discoveries like these open numerous possibilities for leaders from all sedors to inform their decisions and policies with concrete data about what generates community and economic benefits. This report is not meant to be prescriptive, but rather to inform and engage leaders in new thinking and action. We hope you will read it, share it, and discuss with others what it might mean for the future of communities across our country. Our hope is that this leads to new conversations and partnerships, and new ways for all of us to work together to increase people's attachment, to strengthen our cities, and to ensure a brighter future for all people and communities. • a ...................................... Cooy��ghc m Z�tO Gallup,Inc Ali ngFts reserved COMMUNITY ATTACHMENT: ........................... ............. ..................................... AN EMOTIONAL CONNECTION ................................................................................ Community attachment is an emotional connection to a place that transcends satisfaction, loyalty, and even passion. Communit Y Attitudinal passion A community's most attached residents Attachment — Loyalty + have strong pride in it, a positive outlook on the community's future, and a sense that it is the perfed place for them. They are less likely to want to leave than residents without this emotional mnnection. They feel a bond to their community that is stronger than just being happy about where they live. Why Attachment Matters Over the past three years, the Soul of the Community study has found a positive correlation between community attachment and local GDP growth.Across the 26 Knight communities, those whose residents were more attached saw more local GDP growth. This is a key metric in assessing community success because local GDP growth not only measures a community's economic success, but also its ability to grow and meet residents' needs. Local GDP Growth by Levels of Community Attachment Gallup research proving the link between CA Correlation to GDP Growth=.411 CA Correlation to Population Growth=.3]4 employee engagement in a workplace to ■ C;� ,.. . _ , . ■ - , . . _ -,�,,,�,.,i. , .. business outcomes wch as productivlry, e profitability, and employee retention helps ' F;oE L9� to underscore why emotional attachment 6 5 matters. Just as actively engaged employees 4 are more productive and committed to 3 >e� z ='"° the success of their organizations, highly � oa� a2vi - attached residents are more likely to actively ° contribute to a community's growth. � . - _�„��„u�, o..__ - _. ., ..-.. � (OMMUNIIYqiIAdIMkM 5 .......................... GopyngM 02010 Gallup,inc Ali nghn reserved � The Relationship to Community Outcomes Precisely how community attachment aNects communl y outcomes is at best a scientific guess at this point °-�, ,�. ,r However, the data make clear that highly attached � "�- � ,. �p residents are more likely to want to stay in their current \1:� � communities. When this is true for college graduates ' '� � _- - � and other productive residents, it increases the numbe� `;3 � of talented, highly educated workers striving to ' p -� � positively affect economic growth. � .� � F� '� �:�� 'f`'�'�-� - _� Highly attached residents are also more Ilkely r�see a. - - _- their communities as being open to many kinds ef people, including talented, young college graduates and families with young children. Communities tf�at are more open to diversity are better able to compete for talent. Attachment is also higher when residents agree that their communities provide the social offerings and aesthetics they enjoy. When resldents enjoy their community's offerings, they are more likely to spend their money on bcal activities and businesses, directly benefiting the local economy. Knlqh�Foundation works In 2E�cominunities whvre the Knlqhi bro[hers owned newspapers. � I. ' �'d[�.M,G � f -� ��. C�ulub � � � �..-Y ., .( Z � _1_ � ' , 1 J ,,� ` � . � i�!C_,�� ar �.�,. � " • . . � �ti � �_ k � . �:�.� , � � � '.:\ __ � . .� .^i .Y \ �' � �� _�__ �.... rr �� — '�� ,.� �,� � •�i35,�„ , �.�� (� � I C-MS4 � I 1 � � � � , r` �� •�.. rwdniva [ ��visraErv.v•d.e.,� HI rv — ,�Teaam. FL—iv6P. •v N h�2�a c I �. • Y wGe C ��.F � BrvJ.�ror F� tI;F • � Gr , vaim B .1�.fl.MD . e. � , �,.. . V.Ia:.FI�MG • ...................................... .. . . . . Highly attached resic9ents are more likely to see their communities as being open to many kinds of people . .� .f � - ,� + . 1: ::��_ . , . . . , : p � . . . , . . � . � � - . �� r �� = �II' , , .. • , . , .� N ` a� � ' � �'` . •�t-. � : � �' � ;,,- ..,, . _ _ _ . -_ � ._s,s,_, iw'�i.� � ,•;;;e*�r,� ��1 � � � j` .. �..,. - � .�. ��.._ f.: i - . ':, ��, >: ,� ` � � -'i �`� �r� �� . f , . �-- ,_ y �y • ' s , : i � . ' ..f a y r �R: � 5i '".� � s� : �f �—•� j ;{ . .� ._ ---�,--e.�.. .d r � r � � '� r%', ` - � .� `, �f.� � �. y ^•, 1 M �' .. . fa v�i�� .�'v�'�� , �� '. _ _ - _'_ _— _ , _ _"'_ " _.._ �.� �*�. � � � . �h , Fr � R �nl�� ' ��y�'_y'ky1 A„'. ' �. . ___ — �" �'� �,� � ��.r.. f�_n\ .. a �+_�. ' +J' r � 4r ' � f _ • o � . � . _ .� r � � � ', ��,y= - Y��; � , . , � 1 �� ~, f �w �`,� + '� , � � �� , , �� ,. � � �� ,�� _ , � ��. �, , ,. Q ' h , ( a.'� � � t' � . '� . ' � � � �+ . i'� � — � ' - �� L�_ How Gallup Found the Factors With the Strongest Links to Attachment To find out what drives attachment, Gallup asked residents five questions examining their level of attachment to their community and then asked them to rate various aspects of the communiTy such as basic services,the local economy, social offerings, and openness. Gallup then analyzed the relationship between the overall level of community attachment and residents' perceptions of aspects of the community itself to reveal the strongest links. The greater the correlation between attachment and a given factor, the stronger the link. Using this analysis, Gallup ranked the aspects of communities that have the strongest links to attachrrient, undersTanding th�t even small differences can be very ineaningful. . � . . - . . � 2008 2009 2010 -- _ . . ,. . .. , Social Offerings 0.52 Openness 0.53 OS2 0.50 Aestheties �, � � 0.50 ��; Education 0.47 0.44 0.47 Basic Services 0.41 0.34 O.Q2 Leadership 0.41 0.40 0.39 Economy 0.41 0.39� ,0.36 Safety 022 0.19 0.23 Social Capital 0.14 '� I'I , I Civic Involvement 0.06 0.04 0.04 *The In Ir-�rhe c �n�lation,the more closely the ;rv li u = �s �e��ated to attachment 9 .......................... Copynght m 2010 Gallup,mc.Ali ngha resarved. �� - - - : ' . _. � _ What Matters Most What attaches residents to their communities doesn't change much from place to place. While one might Key Drivers of Attachment expect the drivers of attachment would be different �^2010 m in Miami from those in Macon, Ga., in fact the main � N _ drivers of attachment differ little across communities. � c z « Whether you live in San Jose, Calif., or State College, N � Q Pa., the things that conned you to your community are generally the same. , , - When examining each factor in the study and its � �___ relationship to attachment, the same items rise to the top, year aher year: Aberdeen, SD y�� • Social Offerings— Places for people to meet Akron, OH 1 3 1! each other and the feeling that people in the Biloxi, MS �I�� community care about each other Boulder, CO 1 3 I 1 Bradenton, FL �_�'� • Openness—How welcoming the community is Charlotte, NC 1 3 1 to different types of people, induding families Columbia, SC �� with young children, minorities, and talented Columbus, GA 1 2 2 college graduates Detroit, MI �.��,� Duluth, MN 1 3 2 • Aesthetics—The physical beauty of the Fort Wayne, IN '�i�� community induding the availability of parks and Gary, IN 1 3 1 green spaces Grand Forks, ND 3i��i� Lexinqton, KY 1 2 2 City of Long Beach,C�� Macon, GA 1 3 2 � Miami, FL �� -"' Milledgeville, GA 1 3 2 Myrtle Beach, SC �� Palm Beach, FL 1 3 2 _ 6 ,� Philadelphia.�.PJ�:�Ji�� r San Jose, CA Y 1 3 2 St. Paul, MN �'�� State College, PA 1 3 2 Tallahassee, FL � _�,� �i Wichita, KS 1 2 2 I � ��................................... ��,��-�ca�,a��, _ � io�.. � ai��,ii„��.,,.�„» �, -a � i � _ ,A. ..fi.. . — . While the study also measures perceptions of the local - � S', • I economy and basic services, these three fac[ors are � - � � �qp ,�✓ :y y",,., *,; __�� always more important in terms of their relationship ' --. �. " to community attachment. This is not to say that communities should focus on building parks when � � jobs aren't available. However, it does make it clear that these other factors, beyond basic needs, should be included when thinking about economic growth • and development.These seemingly softer needs have an even larger effect than previously thought when it comes to residents' attachment to their communities. � .. . . . Generally, demographics are not the strongest drivers of attachment. In almost every community Gallup studied, attachment is more strongly related to certain • � • • perceptions of the community than to residents' age, race, income, or other demographic characteristics. "' ' ' - ' ' •" '"•' - In other words, whether a resident is young or old, wealthy or poor, or black, white, or Hispanic matters less than his or her perceptions of the community. This � reality gives community leaders a powerful tool to influence residents' attachment to the community, no matter who they are. CopY��9h�9IDI0 Gallup.Inc.Ali nghcs resened. � OVERALL FINDINGS OVERALL ATTACHMENT Residents of the Knight communities have expressed a comparable level of overall attachment to their communities in each year of the study. The 2010 mean score of 3.57 out of a possible 5.00 compares with a score of 3.58 in 2009 and 3.56 m 2008. Results reflect surveys conduded in the 26 Knight communities. For detailed data, visit www.soulokhecommunity.org. KEY DRIVERS OF ATTACHMENT The surveyed communities' social offerings, openness, aesthetics, and education are, in that order, most likely to influence residents' attachment to their communities in 2010. Generally,these factors have been in the top four each year of the study. • • Social Offerings: Residents rate Social Offerings their communities' availability of arts MEAN and cultural opportunities and social zooe zoov community events highest among �� 76 �� social offerings. These are both aspects ,��,t��,r�es�de-•seai,�„o�-�iore,��yswghiy Gallup asked about for the first time this so% .aooe .zous ro�� year. Residents are more positive this year about their communities' vibrant 40% �sx ��,x nightlife, with 3 in 10 rating it positively. ;o% "'"'�e�'��` They are more negative than positive �i%35%�6� about whether their communities are zow good places to meet people, with about '� �` `�� i o% 4 in 10 rating this aspect negatively.They have become more negative about their o — — — communities as places where people � "^°' []/(i.iiiiq� care about each other, with slightly more than 1 in 10 rating this positively. To see a list of all drivers, turn to page 20. � �z •••••••••••••••• •••••••••• ••••• Couynghtm2010GaIlup.Inc.AOngMsreserved. • Openness: Residents' overall ratings Openness of their communities' openness in MEAN 2010 is on par with results in 2009 and zooe zoov 2008. About one-quarter say their >>> i�z i n COfT1R1Uf11U@5 df2 gOOC�(J�dC25 fOf O�C�Ef -=-� -_-"�esde�s Fan��g Ope�ness Hloniy people. families with young children, so% .zu_a .r�v .. �o�e young adults without children, and racial �% and ethnic minorities. Residents are relatively more negative about whether 30% � � � tF their mmmunities are good places � ti ` � ^ w y�; °;. zo r for immigraMs and gays and lesbians. � � � However, residems are more likely in 2010 ior to say their communities are welcoming o _ I_ I'T. '� i to gays and lesbians than they were to o.��„� say so in 2009. They are most negative �� nV��111i" about whether their communities are good places for talented college graduates looking for work. Almost two-thirds say their communities are not good places for talented college graduates, and these views have grown more negative since last year. • Aesthetics: Residents generally give their qesthetics communities high marks for aesthetics, MEAN and they gave their best ratings this year. zooe zoov Four in 10 residents rate the availability zo� zas zoe of parks, playgrounds, and trails in their F�.•��a��,��es;ae�ts aa��g nesme��s H�uniy communities positively. They are slightly .�l;or! .zooy .2u,0 less positive about the beauty or physical so% setting of their communities, with more than one-third giving positive ratings. ao°s � '��" .,.,. 30% 20% t 0% 0% —_ 13 .......................... Copyngh��N10 6allun.Inc Ali ngh�s rqserwd. � • Education: Education tends to be one Education of the higher rated key attachment drivers in the Kni ht communities, with MEAN g saoa aooa residents almost always rating the quality �96 i 9� i 9a Of CO��BgBS B(1C� Uf1iVQfSIYiQS�'lig�'lBf 'urcentaqe of Residents Ranng Educacion Hlghly than the quality of K-72 public schools. .1;r�r .,��,��, zciu Four in 10 residents give their local 50% colleges and universities high ratings, ao� ""' on par with last yeac But less than one- ;�w 3,% 3i^c quarter of residents rate the quality of 30% zs�a, ,2v� zz�� their communities' K-12 public schools za% highly. Nearly half rate their K-12 public schools poorly, and these views have only 'o% become more negative since last year. o� — , � Summary Table of Strengths and Opportunities Oppo�turity Strength o.� J � 0.6 N E ■ L � � ry o.s� .. ■ ■ � . a ■ y � �C D.Q'I . . . . .. � . . � E � ■ O 0.3 V O � v o.2� � , . . . u C �� . �,.a:olo J C 0.1' ■ ■ 0.0 - _ _ _i — i Performance Rating Drivers posi[ioned farther up are more influential in causing emotional attachment Drivers positioned farther ro the right are rated by respondents as being better performing in a communiry.A driver that is both influential in causing emotional attachment and not rated as well performing(i.e.,one that is positioned in[he top leh quadranU represen[s an area of opportuniry as an improvement in performance will have a particularly high impact on improving emotional attachment. 14 ...................................... � � � Copyrightm2010GaIlup,Inc.Alinghtsrezerved� � WHO IS MOST ATTACHED �+ w.:�. -�--� _ ._' While demographic characteristics do not have as �� much effect on attachment as residents' perceptions -- — . =��'�' of their communities, pattems do emerge among �' '0t� various groups. - — ?:� ; -' - :a: • Geography: Residents who live within the city - _" _::ji i'r' limits of their communities tend to have similar _'�� - , ,.:F �°r� r?'- C:. -�: , � : - � -�r = �._ attachment to those who live outside the city. ' � �� '�" W��, � .r- - r. - . . . . , . .. .. �r,F . _ ,+ �� , ... Z.....:- �--^1�1�>� � � _. __: � " .1��± '_ - � -�� -- • .. -' i� y,c _��•�� ` -r . �`._ s.00 'W�yyG.a,�', , ._� . . _ J.. r '. 1,- � +`.� .'.r a.so S/ _�� . _��c �..r�3�' �- , i —-�.+.�� a oo r-r 3su - � �� 3.00 'a i50 "J�li.t��.�'_ �+ 3D0 � __ �so i.00 • Age: Attachment tends to increase with age. � Residents aged 65 and older have the highest attachment scores, on average. - ,.��,��rvn��m�-��t��.�- . ,��,;. .�ocv , � 5.D0 Fg- :� +;� � a.so - ' .iS-.... . aoo ..- Jti� � � 3.;f ... . . ._.. .._ ... o . 3AC � � 2 SU � z o0 tso , I t.W — . _ — . — � . � .e_� . i yy �� 4Y'iyln_ , wb. w . I I .. .��. .�'i�� - � • Community Tenure: Residents who have lived in • Income�. Attachment tends to increase with the Knight communities for three to five years tend income. Knight community residents with annual to be the most attached. However, the newest household incomes of$75,000 or more tend to be arrivals tend to be the least attached. the most attached. _..,-, .va..a�-,�,, ...nr_,�r�i= . .,. ._,me Cb ..��.y/V;ec^ . _ , ��p ieauu_ •?�1�,;C •��r T.,. 5.00 •2IXi8 •2009 =?01p s� a.so . aso a.on 400 3�'� � 3.50 . � ' - � lA[� 3D0 � 250 3CC ]GG 2DG t 51� L50 . t 01�� — — - t.00 � • • Raee and Ethnicity: Attachment levels aro similar between Hispanics and non-Hispznic whites. However, blacks tend to be less attached than both ofthese groups. -�� , , � . L .� � � ��yb� �y`� ..,_q •J. m .. ., . +V�ti ��- .,A s.00 �II � ..y . _ ' ... t .''';^, R 6.50 I .1 u._ Y = �� - �1�� • aa� �, ` ,, �, "t, � , �, ,,, ,,, , . � ( , : � ,, . , 1 ,. 3_�„ � r i; . ��, � � � a �r � zso � '� 1 - z.00 - E �?��U 1�� ..� 3 i so : . . ."'StqM�� i.ao • • .,:ier,'. � . • 16 ............................... Copynqht�20t0 Gallup.Inc.ali nghts reserved. IMPLICATIONS FOR . ............................................................ ......... THE KNIGHT COMMUNITIES ......................................................................... The impiications below reflect the findings from 26 Knight mmmunities, which vary in size and demographics. However, what we learned about the universal importance of three fadors—social offerings, openness, and aesthetics—is valuable to leaders anywhere who seek fresh perspectives to improve their communities. STRENGTHS TO LEVERAGE OPPORTUNITIES TO PRIORITIZE Residents surveyed continue to be proud of their Residents' mixed responses about their communities' communities' parks, playgrounds, and trails. The openness could be inhibiting their desires to stay in Knight communities should continue to maintain and their community and to recommend it to others. Active promote these offerings, so that even greater numbers and visible efforts to promote tolerance and diversity of residents feel positively about them. Doing so within the communities could improve the perception by way of social offerings that promote diversity that the communities are welcoming places for all could also help communities improve on several groups, which will also help to attract a larger cross dimensions, maximizing the gains for community section of individuals to the communities. attachment overall. Because the Knight communities also tend to Residents continue to give high ratings for their struggle with the perception that people in the communities' colleges and universities. The community wre about each other, events that communities should continue to promote higher bring people together to foster more interaction and education offerings among a broader audience and understanding are likely to have a compounding effect perhaps use these positive perceptions to improve on community attachment. education at the elementary and secondary levels. Doing so could also help communities to attrad and Leaders also have much to gain by improving retain young adults and families with young children. Perceptions of the quality of K-12 education in their communities. Not only will this increase attachment Social offerings are an overall positive for the Knight overall, but a more positive view of public schools can mmmunities, with residents particularly positive also help attract families that will help raise the next about the availability of arts and cultural opportunities generation of talent in the communities. and social community events. Further investment in these areas of clear value to residents will help the communities to achieve higher levels of attachment. n .......................... CapyrigM m 7010 Gallup,inc AO rights reserved . �. � - � . .. A . ._ -'- , ; �'� . =� . ' � ' '�aY�'~-• _�� .�� r ', �S� t - �� _ �; v ] �� u � ?N�� a ` �� • � : .� ' •"' .. _ �\i�_ J �,��+�".`�.� '.�: i•�,.��•��i �� - +�,��,r,�i.r i��r`�_r�� r' � s� ` - ��i � �y �+r�`�� .. � ` M1f . � �_ � - . � t• � ,� { " � • ' +r�`�� ,� � ' ��"� , � -' . �� - �'� , _ } " �„�'y ;.�-, ,a f� '��s� ` �Y • �� ,��J� � .t �'� �y6+�� AF � ` � ++ ' � y �,�+ i '4.`r� ` � 4Yt `• •. �' :.� .`�''r� ' � �,_ �' -��. � ' f � � . �� . � . `ti�� 1 � ..� !� �; �� 'f�;.a � ..� .��—�� !- �.- � . + ' . . ��a� , � � - • �� - 9i!►' . � . a��i,"' _ �A !! �. �j i �� u. . ��—� I � � �!�� /�y ��+• — � �f— t� 1�.7�4'..1.� �� + 1- � '� ;�Nl' � � ��"`� __.. • _ � � .I� .,r� . . ,_..�y . �, �e '�y .,,� '3� .� � ' � .�� •�'� � �„ � � , �� i r ,�: � , - _ �� . r� � '�r - •♦� , �f .. �' '�- ` �.:..;:�.. � � �,t� i� ti . � . . � ;�� .�.=�� - . � -� - v� . . , �` :- r � ; � •- � - - - - - - . , SNAPSHOTS...OF . ..................................................... . THE KNIGHT COMMUNITIES ......................................................................... The following pages contain brief data highlights for each of the 26 communities in the study. For detailed resuits by community, please visit wwwsoulofthecommunity.org. , c � . '�'i / 1 . !� '!�' , ; ; r� � ,� - � � <:.. �t II ., Y ,� �. ., �.n';",�)�r +^ , .y x r: �4t�< � �� , 5,•�,• . '�,t . � v� + .. ", i.� �� /'. �,,��} * � . pw.. � �7�' �-..� � „ , h�►` �;:i. • � �. ,� ..F - �. �.iy . � ,.�'` l k�' � �,. �` ��. .,� i �,�r.� ' � � � y ' �y r � ��] �` ^i. p `i � L `� , ,♦ � f�� - �, ��r � ` �� ,,� 4� t�, �, • F� tia�.��? - - � � �_.: %_"`� t� � ABERDEEN, SOUTH DAKOTA Attachment Over Time •h,oiAuzchad •Neuval �Anached �:,,�s�,;� 2008 2009 2010 too�, Aesthetics S 3 2 Basic Services 6 6 5 80°h ��. Economy 7 7 7 60� ,. Education 3 4 4 Involvement 10 10 10 aox ��I- Leadership 4 5 6 zo% �� Openness 2 2 3 ''� Safety 9 8 8 o% ' Social Capital 8 9 9 SocialOfferings 1 1 1 For detailed results for Aberdeen, opporc��c�es(scro�g I�nk ro accachmenc,low perfo�ma�ce) visit www.soulofthecommunity.org/aberdeen. sc�e�gchs(scro�g Gnk co anachmenc,high pertorma��ce) • AKRON, OHIO Attachment Over Time � •NotAtta<ned •Neutral •Anac�ed 2008 2009 2010 �n on.,.. . , ioov Aesthetics 1 2 2 Basic Services 5 S 5 e�� '� � � Economy 7 7 7 ao% � Education 4 4 4 Involvement 10 10 10 40`� Leadershlp b 6 6 20� Openness 3 3 3 Safety 8 8 8 �q �� Social Capital 9 9 9 SocialOHerings 2 1 1 FO�(j@tdi�BC� f25U�t5{OI/�kf017, OpportuniGes(strong Ilnk to attachmen[,low periormancc�) visit www.soulofthecommunity.org/akron. St�engths(si�ong Ilnk ro attachme�c,hlgh perfo��ma��e) • Zo ...................................... Copynght�2010 6allup,Ir¢.Ali nghts�eserved. BILOXI, MISSISSIPPI Attachment Over Time , •No�Aitached •Neuhal uAvar�ed 2008 2009 2010 n m,..� i00% - Aesthetics 5 3 2 _ Basic Services 6 6 5 a0% � p�i�: �� Economy 7 7 7 bo,� ,. � Education 3 4 4� Involvement 10 10 10 40i � � Leadership 4 5 6 Zo� _ � Openness 2 2 3 Safety 9 8 8 o% � � SocialCapital 8 9 9 SocialOfferings 1 1 1 FOf dBY31�eC,� f25U�L5 f0f BI�OXI, Opportunities(sTrong link to at.achm=nt, low performance) visit www.soulofthecommunity.org/biloxi. 5c�eogrhs(s�rong G�k io ac�a�hm��t, h�gh perfo��,anw) BOULDER, COLORADO Attachment Over Time •Not Attached •Neuhal .qnao��a 2000 2009 2010 cA��n�:,� . . _ �oo o r - Aesthetics 1 2 2 ��_,T`;;,k,.� ��'-' '�� Basic Services 5 5 5 ao% �- uiiiti`'`�=.` Economy 7 7 7 "'RRt�� Education 4 4 4 60% . . Involvement 10 10 10 aoi Leadership 6 6 6 Openness 3 3 3 zo% � Safety 8 6 8 � • ov � � � Social Capital 9 9 9 SocialOfferings 2 1 1 FOf C�@tdi�2C.� 125U�t5{O� BOl1IC.�8f, Opportunities(strong link to attachment, low performance) visit wwwsoulofthecommunity.org/boulder. 5creny[hs(scrong link co attachmen2,high performance) 2t .......................... CopyrigM�2010 6allup.Inc Ali ngbts resarved. � BRADENTON, FLORIDA Attachment Over Time •NotAr.ac�ed •Neutral •A�a �� , 200& 2009 2C10 ca m�..�„ . . i00% - � Aesthetia 1 2 2 ,.� � Basic Services 5 5 5 80% � Emnomy 7 7 7 bo% . � Education 4 4 4 Involvement 10 10 10 �% Leadership b b b zox � � Openness 3 3 3 Safety B 8 8 o% Social Capital 9 9 9 SocialOfferings 2 1 1 FOf C�QLdI�QC� �05U�25�Of BfdC�Bl1LOf1, Oppor[unities(strong link[o�LLachment,lowperformance) visit wwwsoulofthecommunity.org/bradenton. 5ve�gihs(sc�o�g n�k io acca�hme�c,h gh�,erto�md��e) • CHARLOTTE, NORTH CAROLINA Attachment Over Time •NotAuached •Neutral •An,,J�.�-i 2008 2009 2010 CP Mu.in t00% - Aesthetics 2 2 2 �! Basic Services 7 6 6 eo% - _ Economy 6 7 7 �' Education 3 3 4 60% Involvement 10 10 10 ao% � Leadership 5 5 5 Za� � Openness 4 1 3 Safery 8 8 B o� Social Capital 9 9 9 SocialOfferings 1 4 1 FO�d2CdI�BC� fBSU�YS fOf Chdf�OYY2, nppo�tunities(si��y link�o attaclim�nC low pei�pnnanr.e) visii wwwsoulohhecommunity.org/charlotte. si��gihs(svo„g o��k io dna�n�l�o��,h��pe�io��,a��7 • 'z •••••••••••••••••••••••••••••••••••••• CoPYright�2010 GalluP.inc.Ali nghis reserved. COLUMBIA, SOUTH CAROLINA Attachment Over Time •NotAttacFed •Neuttal .An;r-�.� . _:,�,,,.�� 2008 2009 2010 iaosc -- Aesthetics 3 4 2 I� Basic Services 5 3 4 80°6 � Economy 6 7 6 6ov� ��'� Education 3 S 5 Involvement 10 10 10 ao% Leadership 7 6 7 zo% � Openness 2 2 2 Safety 8 B 9 o% Social Capital 9 9 8 SocialOfferings �Q 1 1 FOf d2t31�2d (BSl1�fS fOf CO�UfT1�Jid, Upportunities(strong link to attachm2nt, Iew pei�ormance) visit wwwsoulofthecommunity.org/columbia. Se�e�gihs�sr�oog Il�k co atta�h�ne�r,h�gh pe�to�m��e) COLUMBUS, GEORGIA Attzchment Over Time •NotAttachrd •Neuttal .Aii��l�� l 2oae zooe 20�0 � Aesthetics 3 4 2 �00% --- �� Basic Services 5 3 4 so% � Economy 6 7 6 � Education 3 5 5 60q Involvement 10 10 10 ao% Leadership 7 6 7 zo% Openness 2 2 2 Safety 8 8 9 o% Social Capital 9 9 6 SocialOfferings 1 1 1 FOf C�2Ydl�2C� f2511�t5 fOf CO�Uf71bU5, Opporturnties(strong link to attachment,low performance) visit wwwsoulohhecommunity.org/columbus. Strengths�strong link to attachment,high performance) 23 .......................... Copynght�2010GeIlup.Inc.AlingMsmserved � �. . . - _ � � DETROIT, MICHIGAN Attachment Over Time •No:Auacned •Neutral •Attzched 2008 2009 2010 CA M..,.. i�% Aesthetics 4 3 4 � Basic Services 5 6 5 so56 Economy 7 7 7 , ., ao°s �� Education 3. _ 4 3 Involvement 10 10 10 60`� Leadership 6 5 6 Zp� Openness 1 1 2 Safety B 8 8 �%° Social Capital 9 9 9 SocialOfferings 2 2 1 For detailed results for Detroit, Opportunities(strong link to attachment,low periormancc) visit www.50ulOf[hBCOmmunity.o�g/det�oit. �' Strengths(strong link to attachment,high performance) DULUTH, MINNESOTA Attachment Over Time •No�A�tac�ed •Neuttal .Ar.�.��, , 2008 2009 2010 .i..M...�n ioov6 �- Aesthetics 5� 3 Z � Basic Services b 6 5 60% - Economy 7 7 7 1�C �^'' bo% Education 3. 4 4 �� Involvement 10 10 10 ao% Leadership 4 5 6 Zo� � � Openness 2 2 3 Safety 9 8 8 oq Social Capital 8 9 9 SocialOfferings 1 1 1 FOf(jBtdl�@d fB5U�t5 fOf�l1�Uth, Opportunihes(strong link lo a[tachment,low p�rformance) visit wwwsoulofthecommunity.org/duluTh. si�e��g�hs(st�o��i��k io,ua�hme�i,h�gh perto�R�a�ce) za ' ...................................... � (npynqht P 9010 Gallup,Inc All nqh�s re,servad FORT WAYNE, INDIANA Attachment Over Time •NotAttached •Neurral � Flnn��,.��i �:.�.:,,.:.�.�. 2008 2009 2010 t00% Aesthetics 5 3 2 Basic Services 6 6 5 eov; Economy 7 7 7 � aov Education 3 4 4 Involvement 10 10 10 ao% � Leadershlp 4 5 6 zo% Openness 2 2 3 Safety 9 8 8 �� Social Capital 8 9 9 SocialOfferings 7 1 1 For detailed results for Fort Wayne, Opporc��nes(stror,g w,k ro attachmenc,bw p�rfo�ma��e) wwwsoulofthecommunity.org/fort-wayne. So-e�gchs(s�ro�g I�ok co anachme�r,h�gh pe�fo��.,a�,�e) GARY, INDIANA Attachment Over Time •NutAvab�ed •NE�val �nc.,,�. . 2008 2009 2010 :-,:�,,..� � Aesthetics 1 2 2 i 00% Basic Services 5 5 5 eo% � � Economy 7 7 7 Education 4 4 4 60% Involvement 10 10 10 ao o Leadership 6 6 6 zov, Openness 3 3 3 SafeTy 8 8 8 o� Social Capital 9 9 9 SocialOfferings 2 1 1 For detailed results for Gary, �pportumties(strong link to attachment, low performance) wwwsoulofthecommuni or / a S[ren9l.hs(s[rony link ro a[[achmen[,high performance) tY 9 9 rY zs .......................... Copynght�2010GaIlup,IncAlinghtsreserved. ' - � GRAND FORKS, NORTH DAKOTA Attachment Over Time ■NotAttacned •Neuval .Aaached q M 200E 2009 2010 too'x � � Aesthetics 5� 3 2 Basic Servites 6 6 5 eo% � �� Emnomy 7 7 7 60% '-�� Education 3 4 4 Involvement 10 10 10 409° Leadership 4 5 6 zo% � Openness 2 2 3 Safety 9 8 8 o% � Social Capital 8 9 9 SocialOfferings 1 1 1 FOI"C�@td1�2f� fE?SU�YS{Of GfdflC� FOfkS, Opportunities(strong link to attathment,low performanw) vi5it www.50U�OfCh@COmti'lUllitY.Ofg/gId(1C�-{OfkS. Strengths(shong Lnk to attachment,high performance) • LEXINGTON, KENTUCKY Attachment Over Time •NotAttaned •Nevttal .A-�-„o 2008 2009 2010 f A Muen toa5c �. �� , _ Aesthetics 3 4 2 Basic Services 5 3 4 ' ea% � Economy 6 7 6 ' bo% Education 3 5 5 Involvement 10 �0 t0 �% � Leadership 7 6 7 2055 Openness 2 2 2 Safety B 8 9 o% � ' Social Capital 9 9 B SocialOfferings 1 1 1 For deYailed results for Lexington, oppo��,�,�i�es�,«o��n�k co ana�n,,,F,�,� i�w�erto�R�a��Er� visit wwwsoulofthecommunity.org/lexington- So-P�g�r,s(tino„g i,,,k co a�ra�hme�i,n�gh pe�to�ma��ei • <c ...................................... �r. ,..:+:u Au �..,,,:. ;,.i � � .,,�.:..., CITY OF LONG BEACH, CALIFORNIA Attachment Over Time •NotAaacF.ed •Neuval ,Ac�e�c�-- . 2008 2009 201D 54 Mr.in toovs �_� Aesthetics 1 2 2 Basic Services 5 5 5 eoi Economy 7 7 7 do p � Education 4 4 k' Involvement 10 10 10 aos� Leadership 6 6 6 204, � Openness 3 3 3 Safety B 8 8 oi Social Capltal 9 9 9 SocialOfferings 2 1 1 For detailed results for the City of Long Beach, oppo�cu��aes(s«o�g Imk co�n��:i��,�.�i, iow perfo�m��,�E,1 visit www.soulofthecommunity.org/long-beach. 5c�eogths(st�o�g I��k co acca�hm��, i,�3i,pe�ro�ma��e) MACON, GEORGIA Attachment Over Time •Not Ar.ached •Neuhal .�As�;:-._ 2008 2009 2010 i00% Aesthetics 5 3 2 Basic Services 6 6� 5 ao% ��. � Economy 7 7 7 -`-- Education 3 4 4 60% Involvement 10 10 10 aox � Leadership 4 5 6 Openness 2 2 3 zov Safety 9 8 8 o% Social Capital 8 9 9 SocialOfferings 1 1 1 FO�C�@Ydl�@C� fE5U�25 fOf MdCOfI, Opportunrties(slrong link to attathment,low performance) vi5it WWW.sOU�O{th2COr1'lfflUflity.Of9/TdCOn. Strengths(strong Imk to attachment,high performance) 27 .......................... Copynght m 201 p�allup,inc All nohtc reserved MIAMI, FLORIDA Attachment Over Time •NotAnached •Ner��val Ac.i� ��..i 2008 2009 2010 CA M.�r ioo56 Aesthetia 4 3 4 Basic Services 5 6 5 80% Economy 7 7 7 b0% - Education 3 4 3 Imolvement 10 10 10 ao^s Leadership 6 5 6 209� Openness 1 1 2 Safety 8 8 B o% Social Capital 9 9 9 SocialOfferings 2 2 1 For deteiled results for Miami, Opportunities(strong link to attachment low periormanr_e) viSiY wWW.SOU�OfC�l2COfllf7luflity.0lg/Rlidf7li. Strengths(strong link to attachment,high poifoimsnce; MILLEDGEVILLE, GEORGIA Attachment Over Tim� , •NotAnar�iad •Newral .Aun�•��I 2008 2009 2010 cn w�.�.. t 00% Aesthetics 5 3 2 Basic Services 6 6 5 so% � � Economy 7 7 7 60% �r Education 3 4 4 Involvement 10 10 10 ao% � Leadership 4 5 6 Zo% Openness 2 2 3 Safery 9 8 8 o% Social Capital 8 9 9 SocialOfferings 1 1 1 FOf C�@YZi�2C� fB5U�25 fOf I�/�i��EC.�92vi��2, �pportunities(sttong link to attachment,low performance) visit wwwsoulohhecommunity.org/milledgeville. sne�gths(sc�o�g I�ok�o acca�h�,e�,c,h�gh perfo��.,a��e) • ?8 •••••••••••••••••••••••••••••••••••••• Coopight m 20t0 GalluP,inc Ali ngh�z reserved MYRTLE BEACH, SOUTH CAROLINA Attachment Over Time •No[Anached •Neutral .Acacn�... o�,��„ zooa zoo� zo�o Aesthetics 5 3 2 i oox —41� � Basic Services 6 6 S flo% � � Economy 7 7 7 60% � Education 3 4 4 � Involvement 10 10 iD ao% — � LeadersMp 4 5 6 Zo� � � Openness 2 2 3 Safety 9 8 8 o� Social Capital & 9 9 SocialOfferings 1 1 1 FOf C�2tBl�@C� f@SU�tS fOl MyR�O BOdCh, npporwrntles(strong link tp attachinent, low per{ormance) visit wwwsoulohhecommunity.org/myrtle-beach. Strenyths(strong link tc a[[achinent,high per{ormance) PALM BEACH, FLORIDA Auachment Over Time •No�Attached •Neatral .An.��n��.�, 2008 2009 2010 „�...,,�� Aesthetics 2 2 2 i00% Basic Services 7 6 6 eoq � '�� Economy 6 7 7 60v � � Education 3 3 4 Involvement 10 10 10 ao% Leadership 5 5 5 Openness 4 1 3 zo� , ., Safety 8 8 B o% - � � � � Social Capital 9 9 9 SocialOfferings 1 4 1 FOf d2Ya1�0C� f05U�i5 fOf PB�fll BedCh, Opportunitles(strong link to attachmPnt, low performanc;e) visit wwwsoulofthecommunity.org/palm-beach. Strengrhs(strong link to attachment,hiqh performance) 29 .......................... CoFY^9h��2DIU Galluµmc.Ali ngnts�esanetl � PHILADELPHIA, PENNSYLVANIA Attachment Over Time •No�Attac�ed •NeuVal �Ar,�� , 2�'�6 20'�9 2�1� CA M��.�� i�% Aesthetics 4 3 4 Basic Services 5 6 5 eo% � Economy 7 7 7 60� � �-. Education 3 4 3. Involvement 10 10 10 ao� � Leadership 6 5 6 20% Openness 1 1 2 Safety 8 8 8 o% Social Capital 9 9 9 SocialOHerings 2 2 1 For detailed results for Phlladelphia, opporcunttles(strong Itok to anachmerit,low perlormaoce) visit wwwsoulofthecommunity.org/philadelphia Sciengchs(scrong link co accachmeni,h�gh perro�mance) • SAN JOSE, CALIFORNIA Attachment Over Time � •No[Anached •Neurrel .Ar,r �� , u�.�.,,, zooa 2oe9 2oio . ��,� Aesthetics 2 2 2 Basic Services 7 6 6 80% Economy 6 7 7 �� '� Education 3 3 4 60% Involvement 10 10 10 �% Leadership 5 5 5 20% � � Openness 4 1 3 Safety B B 8 o% Social Capital 9 9 9 SocialOfferings 7 4 1 FOf detai�ed resUlts for San.1052, Opportunities(strong link to artachmene,low performance) visit www.soulofthecommunity.org/san-jose. � Strengths(strong link to attachment,high peitormancel • so • •• ••••• •••• • •• ••• CopyngM�2p10Gallup,IncAllrighureserved. ST. PAUL, MINNESOTA Attachment Over Time , •NolAttached •Neuiral •Ai•,.r-� . ��n. ,� 2008 2009 2010 ��% Aesthetics 2 2 2 Basic Services 7 6 6 eo% - ' Economy 6 7 7 so% �� Education 3 3 4 Involvement 10 10 10 aos� Leadership 5 S 5 zo% � Openness 4 1 3 Safety 8 8 8 �� Soclal Capital 9 9 9 SocialOfferings 1 4 1 FO(O�Btd�l�@C� fB5U�t5{Of St. �2u�, Opportunities(strong link ro a[tachment, low performance) vlsit www.soulofthecommunity.org/st-pauL Sr�e�grhs(sc�ong G�kco�tta�hm��i,h�qh p�_�to�mance) STATE COLLEGE, PENNSYLVANIA Attachment Over Time , •NotAnacned •Neuttal .Arr,a-r��-- 2006 2009 2010 �_,.,� i00% � Aesthetics 5 3 2 Basic Services 6 6 5 eo% � Economy 7 7 7 Education 3 4 4 60% Involvement 10 10 10 ao% Leadership 4 5 6 io� Openness 2 2 3 Safety 9 8 B ov Social Capital 8 9 9 SocialOfferings 1 1 1 FOf C�2td�1�2C� �eSU�2S fOf SY3LB C0��2g2, Opportunities(strong link to attachmeN, �cva perl��,imanec) VISIYWWW.SOtl�O{th0C0�71fT111f71iYAfC]/Sidie-00��8ge. � Strengths(stronglinktoattachment,high�Nrio�ninn�e) 31 .......................... Copyright m 2010 6ellup.Inc Ali nghts iosarvetl % TALLAHASSEE, FLORIDA Attachment Over Time •NotAaacaeA •Neuttal .Aua�-�� , 2008 2009 2010 CA M...c t00% Aesthetics 3 4 2 Basic Services 5 3 4 eo% � Economy 6 7 6 bo% �"'—� � Education 3� 5 '5� � Involvement 10 10 10 d0% � Leadership 7 6 7 zow � � Openness 2 2 2 Safety 8 B 9 o% Social Capital 9 9 8 SocialOfferings 1 1 1 For detailed results for Tallahassee, opponurnnes(strong Ilnk to artachment,low perlormance) viSlt WVJW.50u�Of[hECOTR1UniYyAfg/Yd��dh85SE8. Strengths(strong link to attachment,high performance) WICHITA, KANSAS Actachment Over Time •NoiA�tad�ed •Neuval .Fln.��"� . 2008 2009 ZG10 <.:.�.,...�. ��% . Aesthetics 3 4 2 Basic Services 5 3 4 eo% � � Ecanomy 6 7 6 Education 3� 5 5� 60% Involvement 10 10 10 ao% Leadership 7 6 7 zo% � � Openness 2 2 2 Safety 8 8 9 o% Social Capital 9 9 8 SocialOfferings 1 1 1 For detailed results for Wichlta, opport�n�r�es(sc�on9 i��k ro�aa�hme�i,iow perio�ma��ce) visit wwwsoulofthecommunity.org/wichita �� 5ne�gihs(sc�o�g i��kco a«��hme�c,h�gh pe�to�ma��e) 32 ...................................... Copynght m 2010 GalluµInc.Ali ngNs resaned. �,� The 26 Knight communities are grouped based ' - ?i on their population size and density. This - =�"�� ,;j section summarizes results for the groups ot comparable communities. � a . _- - - ... � ' � ( i� �r k''_ ..� COMPARISON GROUP OVERALL =�_.� jj � Community Attachment � � - ,ts• 20�G 352 3A3 3D8 .,.,, 2009 352 3b2 3 11 3 3l 2008 3 54 3 46 3 W 4 31 � ' � •\_^av:c,... •p:-_.., .1.., ,� . ��5.. *��F. � � 1 100% ,�� ,. �,,�,�-• _ .�.� � ,at �`. - eo% � � r..o�.,� 60% � i ��r •ill�1 40% . 20% 0% � ie"�� i��i COMPARISONGROUPOVERAL� ��ese�� 1,1�,'�� CommunityAttachment „ee� �� i; ,,�,t'1� � eM � ;�� zo,a 390 3�0 380 3a4 {q{ ,�ei��er� i��i��; , 2009 ?Bi 374 373 3 BS i di`� 1008 36� 3J4 378 3.BB .. ��re�� ,,,',1 �� .� _.. . .��r�«�� aA<<.1,�. , ��i ,00, r � .�A�!�� _ ._,� r'�. 80% � �'I 60% � �� . - '1� �+ � .��' , y 40% '.- �._ , . T' � � •�.'� . ](' �;�;I ' �f 20% - �. � _ • . : ! � ,�. � i OYo . . . �._ _ �: �� ..,u�' - � � , � � � � _ � � � ; ,i. � Copynght�2010 Gallup,inc Ali nghts raserved. ,�� w ' �' � �� u�� . �n7� � �... ".-i. � COMPARISON GROUP OVERALL COMPARISON GROUP OVERALL I Community Attachmenl Communiry Attachment _ �I 2010 3A8 397 3A9 3At 2.80 3.56 2010 386 3.93 's85 364 373 377 2009 4.04 392 3.89 3.a2 2.80 3-53 2009 3.84 378 3B9 378 3.50 374 2008 379 391 3.&1 340 290 3.51 2008 3.80 372 3.87 377 373 378 WotAttached •Neunal .,_,_ ... •'�:--4aached •Neuttal . Ar,ac^�ed 100% .� jc� � . . �� 100% � , - 80% ' 80% ypy� 60% yp� d0% 20% . ' ' 20 0 . �. ;. '�' . . . I 0% 0% . . . . . . I ... ..��.�. . .;ar.i� � COMPARISON GROUP OVERALL Community Attachment ',/!� . , . , __ . ....: _-�. . . - w !O10 3.90 3.82 4.08 3 38 4 00 3.77 3 79 3.17 379 3J4 �� '009 3.91 3.87 4.W 369 403 379 387 322 3.64 3.73 "[.. �* ��\, + ,+q ?008 3.84 3.96 3.90 3.65 3.80 3.89 3.89 3.49 3.60 3J7 1 r �� , ---. . �,i I�Or.'.�„ .r, . •N�nAttacherl .Ne�.nral Anached � � _ ��.�9I� �� 100% % �� " ; � - ' 30% ' . rR►�� . . :. ■.i� �� 1� 5a� :+- - � �'Rlf' !! �3�- aov .rr-�=-. '- '� . - r�`__'., , .. .. 0% .. ��"r�"_��: . . i� '��". ._"'__ �� . . . • 3�................................... I Gooy�iont�[0'�0 Gailup.inc .SII ngFvc ieserved. %� , j ` � _ - �N — .. ' " _ . .� _ . n .__ . ._ . . .. �ki0�'1�.�ifli'��I[IflS.all�CB�� #O11��afB Ca��. I�C�� d��B�Omi 1 SBPB(�@ Af a# �Ed51i�l� resideats, aged 1 S and dder, is interviewed ' ` «n each commumiRy, wit6�aclditional'infierviews cw�dmc�ted im selected rasidsi�!camrmumiRies. In 2Q�1�0, 1'S,�O in�ervi�xrs vMere canducted, / w�1,000'coaddcEed i�a e'sghe�reside�R. � communities.The 2010 study also included ,_ .�� , t 200 iMemvnewrs arno�g,residents aged 18 „ p ,, �' `' ' to 38�m't�e rasident rom�runities to giwe , '` �� Gallup more informaUon abowt fhat age ' '; � �g�oWg+.-C9r�cail�d�ata�were�lyusted to ertsurz ��S��' � sm ac�crMale rgpr'eser+Rati�on of tiMe real'. +�� . , � 1. d�nmogtap'�Awc imaikeup of each community i l " .: '� 'q' � �y �� , � b�sed on U:S. Cenws Bureau data. ' 1�� ;; h` ; Gallup also used U.S. Census classifications � ��,, �' to choose the geogrephical area induded in � �' � each community. For the most part, Gallup ` used the Metropolitan Statistical Area. However, in a few cases, Gallup used other accepRed defoi�io�s of th��+a�nit�r area. \ I T6►ese cemsus de�Emitions allow GaUup to � � '�M :t 1 � 'j oompane o'tMea imhmnaRion wdn�bal'GDP � � � � and pcpulatiom growhh ao that�C',allup can ' �''�!� more dosely e�ine wmmunity attachmerat , ,.l,. . and key commrarity ouRoomes. l � About the John 5. and James L. Knight Foundation The John S. and James L. Knight Foundation advances journalism in the digital age and invests in the vitality of communities where the Knight brothers owned newspapers. Knight Foundation focuses on projects that promote informed and engaged communities and lead to transformational change. For more, visit www.knightfoundation.org � � , w I � : • . . � i � i � • • � . . . . - - - . � . . � - . . - : . - r. . : . -.. ...- :{. - _ _. .. _ _ .. - .". ,.. _J ��.. �.� �� J— �� » �� . �� _�il�"��.�—��•�e e'� - ��tba �� ..'��v�' �� `� � �� k�'l�if�� i�v ;r�1 �� -�-,- . . ,� � � � =r� t;� s�; ; � ��' `� `� � � �� I� ��i � � L � � , _ . [ ' � [� �-- � T � G,��, �.' _ � - _ `�� 4. � . � _ �� d ��' �� , :� �t-ti� � , � - , '��; �� ;:� � � � i ��i �� ' ,r ,�'.. �`�� ; a__:u� _____ _ :� , .� —,� I �:-:x . _ '+-� � - , _ pr, �`i_ • - � �' , �: - - � --x � _ �� I �.� _ I R i.� ' � �1.�__ i � �� :�. �` r �� —�� . � `�� s ''�'.��y �r �;r'`' � � � � I ��-^ � [ ,� e .. )�"; � .� � '�"��a�.4Z"�� : �� L.�I�� L __ r � ■ r �- .i �La,; � ■��S - - �c� A� �r� _+,�C�i'i3 � ��y .s �� ' _� - - - �A -;�.� � �.� -�l) � � � �.�,.. � .� � d:�' , fy - � ��_ - � �. � --� � �' �- _ _ � r — J ,� a . _ . ,� — �t '_ �� '' � � r � � '� '� �' � � �{ � � w � � � M �� "� , � u c � i � � � �; �' —� . � � _ �i '. � i �,— � y � _ \. ._ _ � � � . ' � " — , , . o , , i. �... _ ., . :, ` � � � � . irr. — _ � � ; '� -`, � � E� ,� I� �! � ' . .� - _. , 7 a — �' ".,,,,,,�„�` . 'iq�Nii�� . _�.,__.__.__ __ i---=` � _' -'�..�� _ - --- ,., _ -•'�+�.T' _ � �'` -�'s"�>--�"*`�-``-_'�� October 2011 Citation: Twill,J., Batker, D., Cowan, S., Wright Chappell,T., 2011. The Economics of Change: Catalyzing the Investment Shift Toward a Restorative B�ilt Environment. Earth Economics,Tacoma WA. Authors:Jason Twill, David Batker, Stuart Cowan and Theddi Wright Chappell V1.3 Acknowledgments The Economics of Change: Catalyzing the lnvestment Shift Toward a Restorative Built Environment was made possible through a collaborative partnership established by Jason Twill between the 8ullitt Foundation, Autopoiesis LLC, Cushman &Wakefield, and Earth Economia.The ideas, concepts and purpose of this report were originally conceived by Jason Twill and David Batker. Project team members include Jason Twill, David Batker, Stuart Cowan, Theddi Wright Chappell, Neelima Shah,Jennifer Harrison-Cox, Zachary Christin, Patrick Green, Nahal Ghoghaie and Tedi Dickinson. Editing support was provided by Jerry Harrison. Maya Kocian provided layout support. A very special thanks to the following partitipants of our luly 2011 Charette: Bonnie Anderson (One PacifitCoast Bank), Denis Hayes and Steve Whitney (Bullitt Foundation), Dennis Wilde and Jill Sherman (Gerding Edlen), Howard Frumkin (University of Washington), Johanna Brickman (Oregon BEST),Josh Reyneveld (Callison), Katie Spataro (Cascadia�, Margaret Sprug (Miller Hull Partnership), and Chris Rogers (Point 32). The project team would like to give special recognition and thanks to the eullitt Foundation for providing Phase I funding for this research study. Through their innovative and transformational work in urban ecology and ecosystem services,the Bullitt Foundation is inspiring progress throughout the Northwest. EARTH i{II�� CUSHMAN& T�l[� �3ulliliFoundatir�n ECONOMICS �„► WAKEFIELD �02011 by Earth Economics. ReproducUon of this publication for educational or other non-commercial purposes is authorized without prior written permission from the copyright holder provided the source is fully acknowledged. Reproduction of this publication for resale or other commercial purposes is prohibited without prior written permission of the copyright holder. Abstract: Th�e Economi�cs of Change: Catalyzing the Investment Shift Towvard a �tes�ara2ive Ba:iilt Environment provides effective alternatives to the current fina�aciall rmodel an�i ipobicy i�rarrpewark that drive investnnent deei��io�ns in real estate.These alternatives wil'I help shift lim�ited 'unvestmer�t capita� tow�rards a re��,orati�e 6uiilt e�wi�ror�rment by iniegrati�ng saeiai a�nd enviror�m�ent b�nefits wrrto �inn�estme�at rmodels a�pprauser rriethodologies, a�n��s�e�p�po�rtir�g p��lli�c�e�s. �� , � , i�—�- -' i _�i _ � �� , , _ �� Exttutive Summary 5 Introduction 6 An Overview of Ecosystem Services 9 Emsysrem Goods 10 Erosystem Services 10 Ecorystem Services and the Built Environment 11 Emsystem Services of Living Buildings 13 Emnomic Valuaeon of Ecosystem Goods and Services 16 Physically Measurable Emsys[em Services for the euil[Envimnment 1"1 Definingthe"Value"of Sustainable Benefits 18 Perception of Value 18 Bosis oJTroditionol Lending and Instl[utlonal lnvestlng 18 Gool oJo Highest nnd Best Use Analysis 19 TradiOonal Valuation Methodology:Necessary ComponeMs 19 "Performonce"oJ'High Performonce'BuilAings Goes Beyond NOI 19 Market and Da[a Challenges 20 Examples: Claims and Accessible Da[a 10 Solueons:Addressing the Challenges 20 The Integrated Real Estate Investment Madeling Tool 21 Pmtotype Assumptlons 23 P�ojec[Overview Woiksheet 23 Envimnmentol BeneJ�'ts Worksheet 23 Social Benefi[s Worksheet 23 Cosh Flow Projec[ed worksheet 23 Investor Re[ums Worksheet 24 OfJice Tenon!Costs Wo�ksheet 24 ftetoil Tennnt Casts Warksheef ZS Schedule oJOevelopmen[losfs Worksheet 25 Opeiotlng Inwme Warksheet 25 Energy Inrenti�es Worksheet 25 Waterond Wastewoter Incentives warksheet 25 G�een Building Incennves workSAeer 25 Loons ondTax Deductlms Worksheet 25 Constru[tlon Geriod Inteiest Wo�ksheef 25 Loan Amortization Schedule 25 AccountingforCoz[Avoidance 26 Case Study:Seattle Public Uhlities 26 The Connection between Namral Capitol A¢ountlng,Built InJ�astrut[ure andApprai501 28 Social8enefits of Grcen Buildings 29 Human Heal[h 30 Productiviry Gains 30 Comfor[,SaHsfacHon,and Well-Being 30 Placemaking:The Social Realm 30 TransportaEon 30 Towards 21"Century Emnomic Development 31 Financingthe Wture 32 Advon[aged finoncing Op[ions 31 Selting[he Stoge Jor Competlfive Sustainobility Incentives 32 Integrated Real Estate Inves[ment Modeling Tool and CompeHHve Sustainability Incenfives 33 Conclusion 42 Phase I Review 42 Nezt Sfips 63 Glossary 45 References 47 Appendix A 4a Photo Cred(ts A9 i h��I�unonw•.ol<hange�.�ni,�ly:in�Ihe h�v��+in�ent ShiB fuw�iid a ISr;torat�ve Ewl1 I nvur,riment • Jason Twill G Currently managing sustainability initiatives at Vulcan Inc,Jason has over 13 years of experience '� in the areas of construction management,architecture, urban planning and real estate development. His work indudes researth and implementation of portFolio-wide resource ._. ,��'� � conservation progrem, creating investment strategies for alternative energy and water systems, ;.1 and advocacy work for policies that support environmentally and socially cons�ious design.Jason earned a masters degree in real estate finance and development from New York University and is ' � a trained dimate change communicator for both the city of Seattle and The Climate ProjettJason ' is a member of the Garrison Institute's Climate, Mind& Behavior Project and serves on the boards of the International �iving Future Institute, BioRegional North America and is a founding board - �� member of the Green Sports Alliance. He was the recipient of the 2011 Better Bricks Emerging Leader Award and was selected as a 2011/2012 Affiliate Fellow to the Runstad Center for Real Estate Studies at the University of Washington's College of Built Environments. David Batker Founder and Executive Director of Earth Economics since 1998, David Batker has completed over a dozen path breaking ecological economics studies that have changed policy at the international and local levels. Mr. 8atker comple[ed his graduate training in economics under Herman Daly,one � A , of the world's foremost ecological economists and brings over 20 years of experience working �� on environmental and economic issues specializing in ecosystem service valuation,trade and � international finance. His work has directly contributed to shifting lending at the World eank, IDB,ADB, ECAs and private banks,and an exception to the US Army Corps of Engineers' Printiples and Guidelines to include the value of wetlands for storm protection in Benefit Cost Analysis in i �. Louisiana. Mr. Batker is also working the US Federal Emergency Management Agency to include — ecosystem service values in their Benefit Cost Analysis tools. Stuart Cowan —�� Stuart has 15 years of experience in designing, planning,and financing sustainability projects � in ecological design, renewable energy,and 6iocultural restoration. He was a founding member of Portland family Funds,a sustainable community bank.Together with its national affiliate, �IUnited Fund Advisors, PFF has structured[ransactions totaling$2 billion, creating 16,000 jobs. While at Ecotrust, he led the development of the Reliable Prosperity framework for a carbon neutral bioregion. He is the co-author with Sim Van der Ryn of Ecological Design,an overview ; '� of the integration of ecologY,architecture, land use planning,and product design that has been translated into three languages. He is the co-founder of Autopoiesis LLC,which uses self- organizing living systems to collaboratively create value and mobilize capital for biological+ cultural resilience. He received his doctorate in Complex Systems from U.C. Berkeley. Theddi Wright Chappell � In collaboration with the Northwest Energy Efficiency Alliance(NEEA)and Cushman&Wakefield's � Research Group,Theddi developed the Green Building Opportuniiy Index,the first office market assessment tool to provide weighted comparisons of top U.S.office markets on the basis of both �, a real estate fundamentals and green development considerations.She is a national speaker and �_� educator on the implications of green strategies on asset value and serves as the Ambassador of Sustainable Initiatives for the Appraisal Institute. She is a Director of the Green Building Finance Consortium and was an organizer of and presenter at the international Vancouver Valuation _, Summits I and II in Vancouver, BC. Prior to joining C&W,she served as the CEO of Sustainable Values, Inc.in Portland,Oregon,where she specialized in market,feasibility and investment analysis, parti[ularly related to valuation and financing of new,existing, and urban redevelopment projects, and the identification and quantification of the benefits of sustainable development. _ .. .- ,--� . . r— ��—. — � f''.'L/ .i .� � � ti .. .i � � I .� A new policy framework implemented in the strategies fail to capture the full suite of benefits Northwest, coupled with an enhanced real estate produced by high performance buildings—and, investment model has the potential to drive billions of conversely,the full environmental and social costs of dollars towards a truly sustainable built environment, conventional buildings. As the building design and with exceptional benefits for our local economies and construction industries contlnue to make step-leap ecosystems.7his investment shift has the potential efforts in leveraging processes and technologies to to completely transform the built landscape in the achieve highly sustainable buildings, time is of the coming decades. essence to institute a new investment model and a strategic redirection of policy incentives that support Through a unique collaborative effort that unites the this industry transformation. theoretical approaches of ecological economics and the practical techniques of real estate appraisal and valuation this study expands the methodologies used to evaluate the multiple benefits of high performance green buildings and infrastructure. In contrast to the handful of treditional industry metrics currently . considered,this broader framework for appraisal and ._�T,at�'.t;'-�.�'S�,�jY: valuation of the built environment indudes social and ' m"' .r�,�'Y .'.,! .J� p� f�� ecological costs and benefits. A deeper understanding " .�` � �,a• :°.S of these costs and benefits has the otential to � �� " ' incentivize environmentally and soaally responsible • ��"'� ��„�y�-T$�� ;,1�' real estate investment and bring restorative buildings � �"t" .' ";s� � ��'�� t � and communities to scale in the Pacific Northwest r� . '"�� !�� '�� (,: , , Region and beyond. �t �,v �'x,;, ,�t%�� .'� =.� - _. .. — �'' _ .� ' xnimwi r�in �. , ,. : -�. ._pu.- r i��wynmrq im.n�.,4 . ��,u:: The overarching goal of this study is to catalyze a �=��_� _ _ shift in mainstream real estate practices to support � �—� _;,,—� `�� "� — � �� . �, �x�n.�- � a restorative built environment that is compatible _�� ,,,�, �� ., /� V + with and supportive of healthy natural environments. �!^ '� � - � -' _ %'�17' ' _ � . . This study seeks to provide evidence of monetized ;' :af� "j environmental and social benefits that are currently �'� , � .,,; �1.=�.'_ not considered in a conventional real estate �• �='`: � "j�7h fr eY� investment model. By enhancing the underlying real � ., :v�:E(�i%`'j►'i`�;tC'K:r� estate investment model, which includes appraisal, ` a�,°�" • F. ' '� � ' ` �ti... � '� +.,'+c�r�,..i x risk assessment, finance, and lending, a high :. ; � �'+�- ++•?� "" . �: performance built environment appropriate for the , 'r' �'�� . 'F�� H`� �a�` w• J1e 1 �:�� i n .-.T.� � 21"century can be achieved. ' ��yt-�d',�' ,N' t. " .�. :�``_ 1 "��C.'-»,`ir � Y a...i �,"a�'�a,�' 1�' s��}�� The built environment, and the building sector in -� �r , �'" '�,1�''j�„ ,� particular, have a massive impact on dimate change �f� +��„ �:+�t�� l,�f,,�A � �'�-v_.�4F biodiversity loss, diminished connection to nature, s � ''�,�.:;,;,+�1�+ r ti ��+ . , •� and many other environmental and social issues. �X' ' j j.�'�� , �,�,. ��, Treditional real estate valuation and investment „jp"��~��._y i,� � � i „-, - _ if � _ _ _ � � _ rc . In the past decade, hardly a day has passed without _ the news headlines, magazines, or N reporting on ` � some form of adverse environmental or social issues ti occurring in the world. Media outlets in nearly every _., _ � nation are consistently relaying the story of a world � � ��:/!'',�; that is getting more divided, more dangerous, and �"' �-�;: more complex to live in. Climate Change is causing r��,;;� the earth's glaciers to melt wusing sea level rise; the chemical soup generated by human industries is - causing infants to be born with unprecedented levels has emerged as the world's premier measure of of toxins in their bodies; and millions of people are humanity's demand on natural resources. The dying of avoidable poverty-related illnesses each Ecological Footprint calculates how much of the year. As of 2011,the global economy continues planet's natural resources are needed to not only to teeter on the edge of further losses. All of our produce the goods and services we use, but to absorb global ecosystems are either under stress or in active the waste streams created through our consumption decline.' of these resources. Historical trend analysis of this metric shows that our global demand for resources According to the World Wildlife Foundation's Living and ecosystem services has been rising steadily Planet Index, an indicator designed to monitor the since the 1970's.These analyses demonstrete that state of the world's biodiversity,the planeYs major demand on the planet's natural resources has already ecosystems have been in steady decline since the mid surpassed by more than 30%the earth's capacity 1980s. Numerous reports by thousands of respected to regenerate those same resources.' More simply researchers and organizations from around the globe stated, it would take 1.3 planets worth of resources reveal that human activities are putting such a strain to meet our current demand. If everyone consumed on the environment that the planetary systems at levels of U.S. citizens, it would take nearly eight required to sustain life on earth (e.g. clean air& planets' worth of resources. As of 2007, the United water) can no longer be taken for gronted. States had the fifth largest ecological footprint per capita of all nations only behind those of Belgium, The consequences of our activities are already being Denmark, Qatar and the United Arab Emirates. witnessed around the world: the collapse of ocean fisheries is threatening lives and livelihoods of many The consequence of living beyond the planet's means cultures; topsoil depletion and the loss of workable is that ecosystems are being run down, resources are farmland is contributing to severe food shortages; and disappearing and waste is accumulating in the air, dwindling quantities of clean water are putting many land and water.The resulting impacts—such as clean populations at risk of contracting preventable water- water shortages and c�imate change—are putting the bome diseases such as cholera. In particular, human well-being and development of all nations at risk.' induced global warming has emerged as a defining The built environment is a huge contributor to the challenge of the 21"century. ecological footprint of all nations. Yet as we enter into this new age of sustainability, we may begin to The paradox of our modern age is that at the shift our understanding of the built environment as same time natural resources are disappearing, our something that the natural world has to be protected demand for them is increasing. According to the from, to a seeing it as humanities greatest tool by Global Footprint Network,the Ecological Footprint which to restore the world. Transforming the built environment from a source Phase II of the study will include further development, of environmental and social stress into a restorative refinement and peer review of the new investment fabric that can support a more resilient world will model and identification of key policy reforms needed require new approaches. Progressive policies and a to support it. In addition, the investment model will shift in current appraisal, lending, financing and risk be applied to three case study projects in the United assessment methodologies are required to change States region: The Bullitt Center in Seattle, WA and the fina�cing, profitability, and value determination the Oregon Sustainability Center in Portland, OR of high performance green buildings. At a national and One Bryant Gark (Bank of America Headquarters level, fundamental economic and market incentives building) in New York City.The tool will be tested with can direct trillions of dollars of real estate investment early adopters in the finance community with the toward sustainable building investments. goal of treating innovative methods most likely to be By integrating complex systems analysis, ecological accepted by the mainstream real estate community. economics and practital market experience, we are proposing new methodologies to assess, Phase III will involve large-scale implementatlon, monetize and demonstrate the value of social and beginning with key early adopters identified in Phase environmental benefits inherent in green buildings II, including state level regulatory and legislative and infrastructure.The value captured by these bodies, local municipalities, lending institutions, benefits is identified by avoided externalities (e.g. valuation experts, and regional utilities. zero impact on watershed) and positive externalitles created through the restorative design principles This document summarizes the team's work in Phase of a Living Building (e.g. habitat/soil regeneration, I, consisting of initial research, development of the elimination of toxics in material supply chain, prototype investment tool, and a planning effort to beauty, water conservation, etc.�.The Living Building define a stretegic approach. Challenge certification progrem administered by the International Living Future Institute' is a The primary outputs of Phase I include the following: program which seeks to move beyond LEED but is deeply rooted in prectical applications of current 1. A prototype of an integrated real estate technologies and design principles. investment model that explicitly links a recognizable conventional real estate financial During April to October of 2011, Earth Economics model to ecological and social costs and benefits. partnered with Cushman and Wakefield, and This provides a method to test the impact on Autopoiesis LLC to conduct Phase I of a research financial returns of internalizing, building markets study to identify and investigate leverage points in, generating revenue streams for, or otherwise which will catalyze a large-scale shift in current real accounting for ecological and social factors estate investment practices. The team developed typically valued at zero; a framework, scope, strategy for evaluating Z. Identification of new areas of value creation for environmental and social benefits inherent in environmental and social benefits derived from high performance green buildings and specifically green building strategies; and how these benefits may be monetized. The team created a prototype modeling tool for the purpose 3. Identification of positive externalities as well of demonstrating how the incorporation of these as avoided negative externalities of high additional monetized benefits into a real estate performance green buildings. proforma may begin to positively alter investment decisions in the built environment. � This report is organized in the following sections: • An Overview of Ecosystem Services, including a discussion of natural capital and why it is important to account for it; • Ecosystem Services and the Built Environment applies ecosystem service concepts to the built environment using a living building example; • Defining the"Value"of Sustainable Benefits discusses current and future real estate appraisal analyses and including the challenges and opportunities for guiding the appraisal industry toward integrated valuation techniques; • The Integrated Real Estate Investment Modeling Tool describes our prototype Pro forma model including worksheet descriptions and assumptions; • Accounting for Cost Avoidance identifies key issues in assessing the true contribution of reduced environmental demands from the built environmen[ using case study examples; • Social Benefits of Green Buildings describes the benefits of health and productivity gains, increased comfort, a sense of place, and enhanced transportation accessibility; • Towards 21st Century Economic Development, articulates a vision mapping connections between new models of a restorative built environment and setting the stage for future sustainability investment and; • Conclusion of our Phase I project and outline of our program for Phase II of this project. Our natural environment provides many of the ��- things we need to survive— breathable air, drinkable /��• water, food for nourishment, and stable atmospheric conditions—to name a few.These are what we refer `� � to as "ecosystem goods and services." Ecosystem goods and servites are those derived from natural � systems that provide benefit to humans and all living things. Every ecosystem produces a "suite" of ecosystem services. Ecosystems perform many functions, but only functions that provide human benefits are considered ecosystem goods or services. ,� Healthy, resilient, natural infrastructure, referred to as "natural capital", is critical to the production of When an ecosystem service is lost, a tax district is ecosystem goods and services.The natural capital often created to raise money for the municipality to of an ecosystem consists of its individual structural import or install the built capital required to provide components (trees, forests, soil, hill slopes, etc.). the specific service that was lost. Ecosystem services These structural components work to produce provide economic value to our measured economy. dynamic processes (water flows, nutrient cycling, When the positive values of ecosystem services animal life cycles, etc.)that, in turn, create functions are not counted, financial analysis disregards their (water catchment, soil accumulation, habitat creation, loss. That loss is usually felt economically. When we etc.) and generate ecological goods and services damage or destroy a part of an ecosystem, critical (salmon, timber, flood protection, recreation, ecosystem services may be damaged or lost, and must etc.). Figure 1 illustrates the relationship between then be replaced by more costly built alternatives, ecosystem service process, function and goods and often at taxpayer expense. If ecosystems are valued as services. assets, however,the most valuable and cost effective services will be preserved. Once lost,ecosystem This relationship can be likened to the produceon goods and services are expensive to recover or may of cars in a factory:to build a car (a "built" good) not be recoverable at all. Buildings are considered requires high quality built capital (e.g. the fattory, durable goods or assets, but in many ways they machines and connection to a power plant), natural are more similar to ecosystems. Like an ecosystem, capital (e.g. the extracted metal, rubber,food for a building provides a suite of goods and services the workers), human capital (the workers�, financial including space, warmth, water, storege, protection capital (equity to buy the raw materials) and social from the elements, and if designed and built right, capital (labor laws and agreements etc.�. healthy air supply. III , _ � . � IIII � y� � � � � +�. �� ' , � Fi�;ure k Rela�Ionship be�ween ecosy.lein pio�ess,hnu iion aud.'.�� ,. .. . . _ �� y ' � C �� I f0 3 ], � � . y �R ^ L 3 ' u � n � " oc � � '� „ > �� Y Q� !J . .., �, � C ti, •.";��'� _ .e_�y m I . . u�. � li�. . ,-�, � . , C _ ... _ Ecosystem Ecosystem Specific Ecosystem Infrastructure & Functions Goods & Services Processses . Flood risk mitigation and prevention, recreational Ecosystem goods are typically tangible, quantifiable value, aesthetic value, and ground water recharge are items or flows, such as drinking water, lumber from a few of the services that ecosystems provide.Though trees, fish, and food. Most goods are excludable, they are often more difficult to value monetarily which means that if one individual owns or uses a because market values rarely exist, ecosystem services particular good, that individual can exclude others have tremendous economic value and are critical both from owning or using the same good. For example, if for our quality of life and for economit production.s b one person eats an apple, another person cannot eat that same apple. Excludable goods can be traded and One reason these services seldom have defined valued in markets.The quantity of water produced economic values is that, tor the most part, ecosystem per second or the amount of timber board feet in services are non-excludable. For example, when one a 40.year rotation can be measured by the physical person enjoys a view of the Mt. Rainier National Park, quantity an ecosystem produces over time. The another person is not prevented from enjoying the current production of goods can be valued relatively same view. Similarly, many non-paying downstream easily, by multlplying the quantity produced by the residents may benefit from [he flood protection current market price. Similarly, buildings are often provided by upstream forest lands. Because of the valued based on their "excludable" economic aspects. �hallenge associated with measuring and valuing Yet, buildings have the potential to provide many non- ecosystem services, they have often been ignored or excludable services as well. entirely excluded from modern economic models. Often the positive aesthetic value of a building may ECOSySt�,' provide additional value to neighboring buildings by Ecosystem services are "the tonditions and processes creating a certain quality of plate.This aspect of a through which natural ecosystems, and the species building's value is not excludable and has a positive that make them up, sustain and fulfill human life°.s impact beyond the building's property line. Similarly, Unlike ecosystem goods, ecosystem services are the blight value of a neglected or poorly designed generally not tangible items that one can see or hold. building may drag down neighboring property values. m Significant benefits to people and other species come integration of permeable surfaces or bio-filtration through the combination of natural resources (natural swales, a conventional building will both deplete I capital) and the built environment(built capital).The groundwater and create unwanted storm water flows pipes of a water system (built capital) deliver the vital that pollute our water bodies. The infrastructure natural resource of clean water (natural capital) to typically mandated by law and building codes our homes and businesses.The built environment and to convey storm and waste water is enormously natural environment are completely interdependent. expensive to build and maintain over[ime. This Buildings and the infrastructure that supports them built capital solution devised over the 19`� and 20`" are embedded within the natural environment and century is outdated and depreciates both physically serve as a conduit and provider of certain benefits and monetarily with time. Taking cues from nature, to people. Yet, an ecosystem good (e.g. fresh water one sees that a natural capital solution such as a supply) or service (e.g. fresh water storage) are forest's ability to recharge groundwater has very different from the traditional economic benefits low maintenance and operating costs and little, if provided by labor and monetary capital that modern any, capital costs. Similarly, a building designed to economies have historically valued. maximize groundwater recharge will usually not have costly pipes to install and maintain,thus requiring less The built environment, if conteived and implemented maintenance and operating costs over time than one to support both human and natural systems in built with a full-blown storm water conveyance system a restorative manner, can provide similar, if not typically required in conventional buildings. identical, benefits as ecosystem services within the urban context. The real estate development paredigm Typically only the construction, or hard, costs reflected that took hold over the 20`"century and continues in real estate investment models are the built capital to this day often completely undermines ecosystems portions, not the costs of the infrastructure required services and has historically worked to degrade them to provide the natural capital goods and services to to the detriment of people's health and well being. the site. For example, built and natural capital work Oddly, it is often the rules set forth by government complimentarily to one another in providing water and regulatory agencies that seek to protect people's to our homes, schools and businesses. Pipes (built health and well being that have permitted this capital) are required, but are useless if there is no degradation to occur. Even as we were drafting this water (natural capital) to fill them. Current industry paper,the United States Congress was attempting practice only accounts for built capital costs included to limit the U.S. Environmental Protection Agencies' in the plumbing system of a newly constructed rights to regulate air pollution through the Clean building (built capital - pipes, pumps, drains, etc..), Air Act. Clean Air... one of the primary inputs to whereas the value of water (natural capital), water maintain life on earth! savings, and the tapital costs for providing water to While a building may be designed and built to allow the building are not adequately included. rainfall to recharge groundwater supply and avoid costly storm water charges for the owner through � � tYi ` oili � 1,, � � ly, 1� � T a� ` ,' '.'�. In addition to natural capital, human capital and an approach to identify, value, map and model three social capital are also either supported or degraded elements of an ecosystem: by the built environment. Few social benefits and/ or costs are included in the accounting and valuation 1. the provisioning area of ecosystem services; methodologies for real estate assets. Yet these 2. the beneficiaries of those services; and benefits also hold tremendous potential for improving 3. the impairments and impairers of that system. quality of life and sustainability of our natural resourtes. This is good economics because certain externalities can be eliminated while markets and economic Human well-being and economic expansion have incentives become more eHicient. In economics, always been tied to a healthy supply of nature's goods externalities are costs or benefits, not transmitted and services. Early economic models were created in through prices that are incurred by a party who a time of abundant natural resources. In that context, did not agree to the action causing the cost or only built,financial and human capital were identified benefit. A benefit in this case is called a positive as constreining factors in the production process. externality or external benefit, while a cost is called Today's context is very different. Our planet has a negative externality or external cost. For example, become "full" of built capital, and natural capital is manufacturing that causes air pollution imposes now scarte, limiting production. Ecological economics costs on the whole of society, while fire-proofing a extends basic economic concepts and reflects today's home improves the fire safety of a neighborhood economy more completely.The "ecosystem services" overall. This might correlate to an example within framework is an operational way of including natural the built environment: if every building was credited capital in economic analysis and is important to in the marketplace for provisioning benefits such as understanding and embracing an integrated approach groundwater recharge and storm water management, to managing a watershed economy. while buildings that impair services, such as causing storm water run-off and contributing to flooding, Ecosystems, and a vision of buildings serving as would be charged for the damage. Under this ecosystems, require a new, more complete view of scenario, property owners would be rewarded for economic and market determined value in order creating positive externalities and penalized for to maximize the full suite of benefits provided to generating negative ones. Rewards may take the form building owners, occupants and their communities. of tax abatements, elimination of connection charges, For example, a standing forest may be cut down once or simply a rebate to help offset additional capital every few decades to provide an ecosystem good costs needed to provide such a service on site. (timber) with revenue genereted from the harvest and sales of the wood. However, the same forest, if left Penalties may take the form of increased impact standing, might purify the drinking water for a nearby fees for poorly designed sites. These rewards and city for centuries, saving the cost of constructing a penalties would drive investment decisions toward filtration plant and the additional costs of maintaining better site and building design that incorporete proper the plant each year as it begins to degrade. treatment and use of storm water. By leveraging the Additionally,the forest also provides a host of many dollars tollected from impact fees to fund the reward other services such as flood protection, soil erosion programs for proper design,a municipality may treate control, and many others. a feebate program for water management akin to the cap and trede progrems devised for carbon markets. As an emerging trens-disciplinary field, ecological A mechanism such as this utilized at scale could economics aims to address the interdependence of drastically reduce the cost burden on municipalities human economies and natural ecosystems over time. to install and maintain expensive and usually Economists who work within this field have developed unnecessary infrestructure. Ecosystem Services of Living Buildinh; To further understand how the built environment may mimic and provide ecosystem services within our communities we have attempted to document and ''r��"t` , y � � � � r i �.:".. I '1��1. defineexamplesofsuchservicesinherentwithina �� ` LIVING BUILDING restorative building typology. This report considered ��,,� . _ . ecosystem services relevant to "Living Building"A Living Building as defined by the International Living Future Institute,the organization which oversees and administers the Living Building Challenge certificatlon program, is a building which "generates all needed energy using clean, renewable resources; `,�� LIVING captures and treats water through ecologically sound =� BUILDING tethniques, incorporetes nontoxit, appropriate P materials; andoperatesefficientlyandformaximum ",��'. CHALLENGE beauty." Table 1 below provides a breakdown and description of various ecosystem services intrinsic to Living Buildings that were identified as part of this study. Table 1: Ecosystem Services Related to Living Buildings Ecosystem Service Definition Living Building Examples Provisioning Services Food Biomass for human consumption,provided by a Food produced on a rooftop garden or elsewhere. web of organisms and a fun�tioning ecosystem(see biodiversity de(inition below). Waler '✓Vd1ci _�u��ply W�ter ra�rhment (rislr.m orolhrnvizrj �h,�! rnnl nhnlr�,li�walri wpply. Rcuse ul e;my w,�lr�r, r�i� ��,,,nstrvalionllia� i ,lcceswalei on;umplirii ��rsq �oof�-ir Pr�ro�rufanl Materials Biological materials used for medicines,fuel,art and Fiber or other material production fmm the building building.Geological materials used for construction such as a green roof or living wall.Elimination of toxic or other purposes. chemicals in the building materials provides enhanced air quality for both the workers producing the goods and occupaMsresiding within the building. Energy Fnseil(uel.eledricity,heatinK energy produc�ion or Ontille cnergy production(5olar geoYhermal,wind, cnolu'ip,v.tluc e�c )n��'n<�rv,y ronsumptlon rednilinn v.dur�,Irnrti iinprovr•d I-�iiil�in�p;effi[iuncy. Biodiversity The number and types of species and the Biodiversity support in an area around a building,or ewsystems they comprise.Measured at gene, rural acquisition land related to the building. population,species,ecosystem,and regional levels. Contribution to salmon restoration or other habitat Biodiversity provides resilience to ecosystems benefits with storm water recharging of groundwater and economies.Biodiversity is the infrastrocture on site,wastewater treatment or other actions that provisioning other ecosystem servi�es. have biodiversity implications. ` t � . Ecosystem Service Definition Living Building Examples Regulating Services Shoreline Stabilization Keeping sborelines in a state of equilibrium with Value of natural shoreline protection or stabilization ocean waters,especially in the face of rising sea through construction. Conservation of sea grass area levels. or natural beach is an example. Storm Protection Mih:ah�•i��r,dtrnuation of Ih��= t� is�I ivind On dr��,II��:1¢�i ind r��u�o nl tit-r n watoi Ii.�du�Yion wdves,and Flood waters on mes�.il land and oi elnniustiun n(wstvn(lowmg Into i7wniupal storm communities. water systeins. Wind redudion Biological materials used for medicines,fuel,art and Fiber w other material production from the building values. building.Geological materials used for construction such as a green roof or living wall.Elimination of toxic or other purposes. chemicals in the building materials provides enhanced air quality for both the workers producing the goods and occupants residingwithintNe building. Flood Protectlon and Retention and storage of fresh water, recharge ol ReduRion nf floodwaters dowristream(down sLrevt) Water Flow Regulatlon groundwater. and rerPiaiFe of groundwaiFr. lNnter redlrN�ii��n to incre.3se low �Inw waters anA reduw hish flnw wa�ters. Human Disease Undisturbed ecosystems keep in check organisms Air quality:contribution to indoor and outdoor air Coritrol which can cause disease in humans. quality through operable windows and nontoxic materials use. WasteProcessing D��toxlfir.:ih��ii�n .�Lsorptionnl �i,ituraloihumaii 'eh'3teiqualiivirnpiovedtlnouglihanclluioan�li==�nuval made cont�minants. of hurn�ii i nnJe c��mtemmdlion, such as cuinposimg toilets:building and site impad on water quality measurably reduced. Soil quality�impact on overall wil quality. 'JVaste re�yrhng. nutriFnt i��rnnval. wasta disposnl. Climate Stability and Maintaining a climate within a stable range.This is Building carbon budget.Relation to off-site carbon Carbon Sequestretion facilitated by the capture and long-term storage of sequestration area. carbon as a part of the global car6on cyde. Oceans also play a crucial in role dimale stabilization. Avoided carbon emissions such as no parking garage to encourage non-auto modes of transpoRation. Temperature Moderatln;Ihr•I��,al hea[ isl�ind r�f��ct. Redu��li��n ni lieahlsland el��I due to budAing Regulation 5(rui ture Ihrnu�h pre5ervalion o(LreeS onsda. high- lalb 1��m��(�oatin�5 sclai. �n Fetative(ac+ la n� rool. Supporting Services Nutrient Regulation Transfer of nutrients from one place to another, Nutrient movements and loads outside wastes and Cyding transformation of critical nutrients from unusable to discussed above. usable forms. Habltat Piovidin,q I�n Ihe li(r histav n�rJ� ol planC;anrl Habd�t c��ninbutinn.�2n site habitat featuresand .uumals. allowancFti.usa u(snags�uid native vegetation landscaping,connectivity of wildlife corridors,wildlife friendly water features. Habitat contribution:OfFsite mitigation. ' i _ Cultural Servites Spiritual The roles which ecosystems and their components Buflding mntribution to spiritual values,design play in the spiritual beliefs of people.This is attention to natural surroundings,feng shui principles, especialiy important For indigenous cultures.These quiet and meditative spaces. values do not lend themselves well to economic quantification. S[ientific and 6�os�stems dre�he sub�ed oi m.u,.� ..i=n,rfir swdy Building contribution to suentitic understanr;in};n; Educational for both basic knowledge and tor understanding the the connedion between ecorystem services arid the mnlribution oi lunctioning ecosystems to human natural environment. well-being. Educational value for connecting ecosystem services and the built environment through day Ilghting systems,"visible green"�ruth walls and signage- Tourism� Theexplicit role i��n�attracting�.people to areas for Value as a destination for tourists�. vawtioning. Aesthetl[ The role which naWral beauty plays in attrading 6ullding contrihutions to a net aesthetic improvement people to live,work and recrcate in an area. to the community�. Does iY raise property values in the area?Does it have a view of natural assets like the Cascade Mountains or Puget Sound? Or is the huilding a blight to neighboring residents?(Living Buildings have to meet the criteria of"beauty." Architectural design that is pleasing to the eye,the indus�on ol drt and open space,green infrastructure tan b��hnuild,il.) Recreation The contribution of ewsystem features like biological Recreational and health benefits of green buildings diversity and dean water in attrading people to and the interadions with the landscape through water engage in recreational activities. features,bio swales,vegetated walls,gardens and food growth. The field of ecological economics has greatly measured in physical units. Ecosystem service analysis advanced the identification,valuation and mapping has been developed to achieve this alignment in the of ecosystem services, which in many circumstances realm of natural systems.There is no reason why has enabled new funding mechanisms such as this same approach cannot be applied to the built payments for etosystem services, etosystem service environment by strengthening policy and better markets and ecosystem service management informing real estate investment decisions for both incentives. Fundamentally, problems of sustainability the public and private sectors. are related to physical stocks and flows of natural The valuation of ecosystem services measures the and human-produced resources (water,toxics, benefits or costs to people of changes in physical materials, energy). However,the way society stocks and flows of natural and human-produced allocates resources within our modern economic resources and brings that into the realm of economic system is based upon financial stocks and flows policy and investment consideration. (capital assets, expected rate of return, actual rate of returnJ. Sustainability can only be attained when these two realms are brought into alignment so that financial incentives based on physical sustainability goals help drive decision making and investment into sustainable endeavors while sharply discouraging unsustainable ones. Physical stocks and flows are r • _�, , , - . Just as these services have not been valued in naturel r nCl Scr , - systems,they have not been considered or valued Market goods and services are often valued via market by the conventional real estate industry. However, transactions. However, many valuable ecosystem these services are tangible, valuable attributes of high services may not be traded in markets, such as Flood Performance sustainable buildings and the benefits protection or water filtration value.Though these these services provide should be reflected in building goods and services are not traded in markets, they valuation methodologies and investment models. have abundant benefits to society and tremendous economic value.Thus over the last 40 years, economic Table 2 provides a list of the eight ecosystem service methods have been developed to value these valuation methodologies currently accepted in peer non-market economic benefits.These economic reviewed academic literature. Indeed, many of these methods for valuing ecosystem services include eight methodologies are standard in establishing dollar methodologies accepted in peer reviewed academic estimates of value for appraisals and accounting journals for valuing ecosystem goods and services. values. Table 2: Valuation Methodologies. Avoided Cost(AC): Factor Income(FI): Hedonic Pricing(HP�: Contingent Valuation services allow society to services provide for service demand may be (CV):service demand avoid costs that would the enhancement of reflected in the prices may be elicited by posing have been incurred in incomes; water quality people will pay for hypothetical scenarios the absence of those improvements increase associated goods,for that involve some services; storm protection commercial fisheries example housing prices valuation of alternatives; provided by barrier catch and the incomes of along the coastline tend for instance, people islands avoids property commercial fishermen. to exceed the prices of generally state that they damages along the coast. inland homes. are willing to pay for increased preservation of beaches and shoreline. Replacement Cost Travel Cost(TC):service Marginal Product Group Valuation(GV): (RC): services can be demand may require Estimation (MP): service this approach is based on replaced with human- travel, which have costs demand is generated principles of deliberetive made systems; nutrient that can reflect the in a dynamic modeling democrecy and the cycling waste treatment implied value of the environment using a assumption that public provided by wetlands can service; recreation areas production function decision making should be replaced with costly can be valued at least by �Cobb-Douglas) to result, not from the treatment systems. what visitors are willing estimate the change in aggregation of separately to pay to travel to it, the value of outputs in measured individual including the imputed response to a change in preferences, but from value of their time. material inputs. open public debate. Adapted from Farber et al,2006 Physically Measurable Ecosystem Sen;ices � for the Built Environ«ient Many ecosystem services can be physically measured. ,, A subset of these services can also be monetized. e�;�! Policies, appraisals, accounting and investment � " standards can be adjusted to enable current financial � models to incorporate the monetized value of relevant ecosystem services created through a progressively � � ` "green" real estate development project.Table 3 lists � ten potentially measurable ecosystem services for � green buildings. Table 3:Ten potentially measurable ecorystem services for green buildings. 1. Carbon sequestration 2. Airquality 3. Flood protection 4. Water storage 5. Waterfiltration 6. Energy mnsumption or generation 7. Storm wate�conveyance 8. Biodiversity 9. Temperature(heat island eHect) 10. Materials life-cyde Earth Economics maintains a comprehensive database of ecosystem service valuation studies, which can be utilized to establish the values of ecosystem services under an appreisal approach. Studies demonstrating a valuation approach for a watershed have been provided primarily within the Northwest region, but also in other parts of the US, Latin America, Asia and Europe. � , _. - - _ - - . ,, � 4U� �i� �"lt(�l � T(�1C� � ��J�,.;ilu � �� -- � � �= � , - _;,-�: � : - One of the main challenges facing early adopters With few exceptions, the basis upon which most and proponents of more sustainable real estate investments in the US are analyzed is"Market Value". development (for example, architects and engineers) Understanding this concept and its application is has been,and remains, their ability to convey the critical to providing information and analyses to better "value" of the additional benefits provided by high quantify the benefits of high performing buildings and performing buildings/construction to the private assess the potential "value add" of green stretegies. sector investment community. Professing greater The goal of this project is to identify and quantify tenant satisfaction, comfort, and worker productivity these benefits and how they can be monetized so that as[he some of the benefits of investing in green their additional value, if any, can be accurately and strategies(for both initial construction and retrofits), objectively assessed and accounted for in a real estate these proponents have been frustrated by the slow investment pro forma. level of up[ake by the private sector, particularly in the United States. To that end, the definition of Market Value, per Uniform Standards of Professional Appraisal Practice While more investors in the U5, particularly those (USPAP) standards, as it is described in the 13`�edition who invest for institutions, pension funds and of The Aqoraisal of Real Estate, produced by the internationally, are adopting sustainability mandates, Appraisal Institute, is as follows: the US still lags other countries in the level of uptake of green investment. Why? To a great degree, this Market vo/ue is described in the Uniform is a factor of the bases upon which the investment, Standards of Professional Approisal Practice lending/underwriting, and valuation communities (USP,4PJ os follows: in the US assess"value". Investors in the US invest in real estate with a variety of goals, but the main A type of volue, sta[ed as on opinion, that driver is almost always their return on investment presumes the transfer of a propeRy(e.g., a iight (ROI�. This facior is driven primarily by the income to of ownership or a bundle ofsuch rights), os of a the property(net operating income/NOI), whith is a certoin dote, under speciflc conditions set forth function of numerous factors—almost all of which are in the deh'nition of the term identifi"ed by the specific, quantifiable and fairly easily measured. opprorser as applicoble in on oppraisal. (USPAP, Therefore,to establish the "value" of additional, and 201D-2011 ed.f USPAP olso requires thot certoin in some tases less'tangible' benefits, our challenge items be included in every opproisol report. is to identify, quantify and consistently measure such Among these items, the following ore directly benefits, as well as be able to translate them into related to the definition of morket value: the vernacular that investors, lenders, underwriters, valuers and other commercial market participants can • Identification of the specific property rrghis to analyze and evaluate efficiently. be approised. �. � 111 �HIl � a� � � � � � a� �� > , d;. • Stotement of the effective do[e of the volue Hence, any assumptions about addi[ional benefits opinion. or value deriving from the incorporation of green • Specifi'cotion os to wheiher cosh, terms strategies must, therefore, also be "monetized" in equivolent to cosh, or other precisely order to capture their value in treditional valuation described financing terms are ossumed as the methodology. basis of the appraisal. • If the appraisal is conditioned upon financing �. , or other terms, specifimtion as to whether the Jinancing or terms are aY, below, or above market inYerest rates ond/or contain unusua! Traditional concepts of Market Value and the conditions or incentives. The terms of above- methodology upon which an estimate of such or below-morket interest rotes ond/or other value is derived rely primarily upon the "quantity special incentives must be dearly set forth; and quality" of the income stream associated with [heir contribution to, or negotive influence on, the property–hence,economic charecteristics. vo/ue must be described ond estimoted;and Historically,considerations of the physical aspects of the morket do[o supporting [he opinion of an income-producing property have been secondary value must be described ond explained. to its income charaderistics. However, given the physical attributes of a high performing building could potentially impact that building's overell performance, In addition, Market Value is predicated upon the including its financial performance, it is logical that determination of a property's'Highest and Best Use'. more consideration should be given to the green From the Appraisal Institute's General Appraiser strategies employed as well as any additional benefits Market Analysis and Highest and Best Use course: these strategies create. The appraiser undertakes o highest and besf Based on such factors as the exponeneal increase use onalysis to identify three choracterisfics of in signatories to the UN's Principles of Responsible o property thot is the subject of o morke[volue Investment, the growing number of institutional approisol: investors adopting sustainability mandates in their 1. The physico/use investment criteria (RREEF, Principal, Bentall Kennedy, i Z. The timing of the use Vulcan Real Estate, PruPrim, Boston Properties, 3. The morket participonts ossocioted with [he Lend Lease, and others), as well as the number of use—[he users ond most govemment agencies incorporating green standards probable buyerss (LEED and Green Globes) into their real estate policies, it is apparent that a growing number of In laymen's terms and with some constreints, these 'market participants', hence 'probable buyers; are definitions and comments imply that "Market incorporating sustainable criteria into their investment Value' is what 'the market'values, with 'the market' considerallons. inherently characterized as being the 'most probable buyer'. Hence, the activities and investment It follows that the appraisal community should also preferences of market participants who would fit this be integrating these factors into their evaluations charatterization are evaluated by appraisers/valuers in and estimates of Market Value. (What 'the market' the context of specific investments and assumptions. values equals Market Value.) In order to do so, It is these analyses upon which an estimate of Market additional factors, including both environmental and Value is then made. social �tenant) benefits, should be evaluated. If such benefits can be monetized and accrue to the owner/ These assumptions, while both qualitative and investor,then it is possible they can and should be quantitative, are in some fashion translated into terms incorporated into the Market Value estimate. that are monetized in order to estimate Market Value. �� ,�„ , � i �„ �,�� „ � � . �. . � � ��r � , ��, �� • The research and analyses required to reach an One of the most common claims of proponents accurate estimate of Market Value rely heavily upon of high performing buildings is "greater tenant market data. One of the greatest barriers ro the satisfaction". How wn that claim be validated and proper valuation of high performing buildings is the be quantified for use in an investment or appraisal current dearth of information on both the transactions analysis? Owners and analysts can track the following and operational performance of these properties. factors: Without these data, it is extremely diNicult to reach realistic and defensible estimates of Market Value for 1. Absorption (lease up and sales)–Was it quicker high performing buildings. for a high performance building than for its conventionally-constructed peers in a given This lack of data is attributable to several factors, the market? If so, by how much? If not, is there main one being that recognition of these benefits really a benefit evidenced by more sustainable has only been relatively recently introduced into construction in this instance? the commercial investing community. LEED, for 2. Renewal probability–Are the tenants in a high example, has been around for just over a decade, performing building more likely to renew their providing an insufficient time parameter against leases than those in their non-green competition; which a number of buildings cycles or transactions that is, is there a higher likelihood they will renew tan be compared. While there were a number of than is evidenced in the rest of the market? If so, early adopters and proponents in the United States of this factor positively influences the bottom line, more sustainable development (for example, Amory and hence, Market Value. Lovins and Rocky Mountain Institute), their focus was primarily on environmental, as opposed to financial, qnother claim is that high performing buildings characteristics. As a result, the type of data that is are less costly to own/operate. What factors can required for financial assessment was not initially be analyzed to help determine the validity of this gathered or analyzed. � .—... assumption. Therefore, investors�particularlyin the US) looking for financial validation for investing in high performing 1. Is the high performing building more adap[able/ buildings and/or green strategies, are finding the Flexible than its competition? for example, does available data inadequate. Despite numerous it utilize demountable walls? This stretegy could attempts to gather performance data, issues of decrease deconstruction time and costs, as well confidentiality and competition have proven difficult as the associated risk. barriers to these efforts. Disparate attempts to build z. Are the systems at the high performing data bases for the investment community have often building more "efficient"? If so, how and what fallen short of the level of due diligence that the performance results are expected because of investment community requires, or that the valuation these differentials? How can these projected or underwriting communities will accept. At the results be confirmed and/or documented? (For time of this writing, no single repository of validated example, via energy modeling by an independent, performance data on high performing buildings exists experienced expert). in the U5. If one does exist, it is not readily accessible to the market in general, or to its participants, � � �� - � �� including appraisers. This situation leads to confusion These solutions will require greater collaboration and inconsistency in attempts to analyze the financial between various real estate participants and sectors benefits of investing in high performing real estate by including: architects, designers, engineers, owners, investors, underwriters and the valuation community investors,appraisers, governmental agencies and overall. policy makers, with the goal being to defensibly identify and financially quantify the potential economic, environmental and social benefits of high performance buildings. Our project seeks to create a basis upon which these goals can be achieved. • l� �l I'� � � 6 �I '�. L.�, u i_.4 i 'C� � . . � �� P�� !'ll ? T�1r-. Our approach to redefining and developing a more r�,;�,�e z:r�o�„New Moaeis m,i,�e��b aedi est�t�e,�rsm,�•�� complete investment model for the real estate industry begins with the application of rigorous techniques from the emerging field of ecological Theoretical Ecolog�cal Economics Models economics.This approach identifies, measures, and values specific streams of environmental and social �� value created by attributes of the built environment. These streams of value- ranging from storm water purification to aesthetics and sense of place-have Monetization/Valuation Methods yet to be systematically identified. Here our research � aims to provide a taxonomy of value that avoids double counting of valuation metrics and favors simplicity. Our analysis incorporetes additional Establishing True-Cost Economic Incentives benefits identified in 6uildings utilizing LEED and Living Building Challenge certification program �, guidelines and more specifically focuses on the strong correlation between these attributes and those of recognizable ecosystem services. Each value tategory Shifting Reai Estate Investment will include standard building attributes that generate or, conversely, impair value. Additional attributes will provide options for "innovation" in which buildings generate value in novel, measurable ways. Figure 2 illustrates the approach that we are we are taking.The characteristics of a building (e.g. footprint, energy use, site context, natural light), community, city, or region can be used to generate a model of environmental and social costs and benefits using the theoretical framework of ecological economics. This model can then be "imported" into a traditional real estate investment pro forma, taking the form of additional data layers(EXCEL worksheets) and calculations(new and existing cells with EXCEL formulas). This results in an "Integrated Real Estate Modeling Tool"-an extension of conventional real estate pro formas that explicitly takes into account environmental and social costs and benefits using accepted valuation methodologies like those discussed in Table 2. - � 7`, IYI � 1111 � i, � � � `�' ! ' � * 14 �' ' :�: In a world of fully functioning capital markets, streams This prototype attempts to capture the underlying of environmental and social benefits would be logic and structure linking the ecological economics directly and accuretely monetized and refletted in the of the built environment to more traditional real Integrated Real Estate Modeling Tool in various ways estate investment and appraisal models(e.g. Argus) (e.g. incentive payments from government agencies, (Table 4 lists the associated worksheets in the EXCEL enhanced rents, carbon credit sales, etc.) and directly model). The model worksheets classify the generation influence measures of NOI, ROI, and ultimately the of environmental and social value by type, and link gold standard of"Market Value" as discussed above. to specific building features/attributes, in each case In practice however,the majority of benefits are providing methodologies to measure outcomes. valued at zero.This indicates a broken market link A variety of valuation methodologies(e.g.Travel between genuine value creation and financial value. Cost per Table 2 of"green building ecotourism" To repair this link, we must identify policy activity generated by a building) can then be applied interventions and additional funding methanisms to generate a corresponding stream of monetary (labeled "Policy Realization" in Figure 2 above) benefits over time. It is beyond the scope of this that seek to restore functioning markets. These report to provide detailed quantitaHve calculations for policies ensure that real estate valuations provide an this diverse renge of environmental and social values, understanding of the environmental and social value but Phase II will include a peer review process to treated by buildings. Different policy prescriptions can generate appropriate calculation methodologies. be tested within the Integrated Real Estate Investment Modeling Tool to ensure the greatest leverage (i.e. greatest shift in investment decisions towards green Table 4:Worksheets in the Integrated Real EsWte and social benefits per dollar of incentive�. Investment Modeling Tool prototype Once policies have been adopted (or existing � Project overview incentives or programs properly harnessed�, these Z. Environmental Benefits true-cost economic incentives can then be used 3. Social Benefits to inform a new generation of industry standard q. Cash Flow Projected valuauon/appraisal models. With accurate incentives flowing through a comprehensive model of 5. Investor Returns environmental and social benefits to drive actual 6. Office Tenant Costs building financial performance, all that remains is 7. Retail Tenant Costs to make sure this model has supporting standards S. Schedule of Development Costs (e.g. NISn, protocols,training programs, etc.This model will then shift real estate investment towards 9. Operating Income enhanced environmental and social value creation as 10. Energy Incentives capital is allocated in line with this next generation of p. Water and wastewater incentives appreisal and valuation methodologies. �2, Green Buildinq Incentives To demonstrate how additional benefits may be t3. �oans and 7ax oeduccions accounted for i� a real estate pro forma analysis, 14. Construction Period Interest the project team conceived and built a prototype 75. Loan Amortization Schedule "Integrated Real Estate Investment Modeling Tool" (see Appendix A). The "Integrated Real Estate Investment Modeling Tool" is an extensive tash flow model prototype that attempts to incorporate the estimated values of environmental and social benefits. The Tool is a simplified version of a conventional real estate investment pro forma, in this case for the development of a mixed-use building. PrOtOtype ASSumptiOnS closelyfollowsTa6le 1, including a wide renge The modeling tool included as an EXCEL file in of Provisioning Ecosystem Services, Regulating Appendix A to this report contains a prototype Ecosystem Services, and Supporting Ecosystem version of an Integrated Real Estate Investment Services. Model. It is intended to show the structure of such a tool, but does not yet include detailed calculations Social eene��ts bvor��cneet and metadata.The tool contains numerous linked This worksheet allows a wide range of social benefits worksheets showing projected investment returns for produced by the building to be specified in detail. a hypothetical, though realistic, development project. Each benefit is broken down in the 11 categories listed Assumptions can be modified and key financial above for the Environmental Benefits Worksheet.The metrics recalculated accordingly(e.g. 1-year, 5-year, Social Benefits discussed include: and 10-year intemal retes of return). 1. Human Health; 2. Worker Productiviry; To provide some context for this model, key 3. Comfort; assumptions used for each worksheet in the model q, Satisfaction; are explained below. Many of these assumptions can 5. Well-eeing; be easily changed in the model to understand how 6. Transportation Options; they affect critical outputs like R01. 7, placemaking; 8. Biophilia; ProjPrt UvFrviFw worksh�=r 9. Ecosystem Services—Aesthetic Values; Square footages by investment type (office, retail, 10. Ecosystem Services—Spiritual Values; multi-family residential and industrial) are specified 11. Ecosystem Services—Recreational Values; here. The project considered forthis analysis 12. Ecosystem Services—Scientific and Educational assumes a pre-qualified loan-to-cost ratio of 80%for Values; and commercial debt, with the remaining 20%of project 13. Ecosystem Services—Ecotourism Opportunities. cost being provided through owner equity.The baseline version of the tool includes a 160,000 square foot Living Building with 150,000 square feet of office Cash Flo�v Pr ojecred In�orl�sl,eer space and 10,000 square feet of retail space on a For simplicity, this worksheet in the prototype 40,000 square foot lot (4:1 floor area ratio). assumes design and construction occurring in years 2012 and 2013, with first year of stabilized occupancy Fnvironmenta� 6'�ner;; WorkuieFr in 2014. Construction occurs over a 20-month period This worksheet allows a wide range of environmental �oncluding in December of 2013. The revenue portion benefits produced by the building to be specified in includes: detaiL Each benefit is broken down by: 1. Owner equity (drawn in 2012�; 1. rype; 2. Construceon loan (drawn periodically during 2. Definition; construction phase in 2012 and 2013�; 3. Pathway to value specific to the built environment 3. A wide range of potential environmental and (how this benefit is produced by the building); social benefits accruing over the life of the 4. Quantity/quality of beneficial impact; building; S. Estimated total value; 4. Gross operating expenses; and 6. Valuation methodology; 5. Operating expenses charged (passed-through)to 7. Metadata; tenants. 8. Monetlzation methods and application in the model; Expenses include construction costs, land cost, 9. Value actually realized in the model; draws against owner equity, and opereting expenses. 10. Value realized by the public; and The standard after-tax earnings are then calculated 11. Value realized by neighbors/adjacent buildings. including impacts of any tax deductions or tax credits relating to high performance building features. A tax The classification of environmental benefit types rate of 35% is assumed. In addition to these conventional investment pro forma considerations, the model includes rows to This worksheet calculates one-year,five-year, and ten- explicitly account for streams of cash incentives over year after tax investment retums. Equity is assumed to the investment horizon accruing from the following be invested in the first year of design and construction environmental and social benefits. (DCl, or 2012). Hypothetical sales events in years one, five, or ten are based on a terminal cap rate of 8.5%, sales costs of 5% and an investor tax rate of 35%. Table 5: Environmental Benefits for Pro Forma Consideration 1. Energy Incentives '� - � 2. Transportation Demand Reduction Incentives This component assumes a base rent of$35 per rentable square foot (sq ft) escalating at 3% per 3. Materials Provision(Value) year, utilities cost of$1.80 per sq ft escalating at 3% 4. Food Provision(Value) per year, and other operating expenses(insurance, 5. Carbon Credits property taxes,etc...) of$6.20 per sq ft escalating at 6. Water Regulation Incentives 3°/o per year.This component also assumes a unique "green" payment factor equal to the modeled utility 7. Stormwater Regulation Incentives cost savings during first yea� of stabilized building 8. WasteAbsorption and 8reakdown Inceritives occupation.This green payment is held fixed over 9. Biodiversity and Habitat Incentives lifetime of tenant'S lease to allow predictability 10. Soil and Nutrient Incentives and increasing cost savings over time.This concept known as a "green triple net lease" provides a way to 11. Additional Environmental Benefit 1 negotiate equitable sharing of operational and utility 72. Additional Environmental Benefit 2 cost savings between a building owner and tenant. When the green payment is zero, much of the owner's 7able 6:Social eenefits for Pro Forma Consideretion financial incentive to undertake a green building disappears. Green payments fixed at first year's 7. Indoor Air Quality Incentives utility cost savings makes the first year payment cost 2. Heakhy Materials Incentives neutral for a tenant and succeeding years increasingly cost favorable as savings grow due to utility and 3. Worker Productivity Incentives maintenance cost escalations. Green payments can 4. Comfort Incentives also be set somewhere between zero and first year's 5. Satisfaction Incentives utility savings.The office tenant's total costs over 6. well-eeinq Incentives lifetime of lease (assumed 10 years) are calculated with a 10%discount rate. 7. TransportationOptionsSocialincentives S. Placemaking Incentives The green triple net lease example is worked out 9, eiophilia lncentives in some detail in this worksheet as an alternative 10. Aesthetic Values-Incentives to standard triple net leases which create a well- known split incentive issue. In a conventional triple it. Spiritual Values-incentives net lease, building owners cannot realize any of the 12. Recreational Values-Incentives utility savings from high performance green buildings 13. Scientific and Educational Values-InceMives because these savings are simply passed directly 74. Ecotourism Opportunities Incentives through to the tenant.The green triple net lease structure provides a way to test current and emerging 15. Additional Social Benefit 1 Appraisal practice regarding the Market Value of 16. Additional Social Benefit 2 buildings with below tonventional operating costs. , RetnilTe�nntCOstsi1�irla,hE:'Ft Wuterpr�dWuc(E�vaier r �F„�iv��, A iPch�rl For simplicity,this worksheet assumes the same This worksheet also assumes a Living Building with 6ase rent, utility costs, escalation rates, and other zero (net) water usage based on LEED-NC 2.2 Water operating expenses as the office tenant. Of course, Efficiency Credit 3 Calculation Template provided by detailed cost allocation talculations can also be U.S. Green Building Council. Water costs for both applied to give different costs per sq ft for office and supply and waste treatment are based on Seattle retail space. Pubiic Utilities' commercial rates per 100 cubic feet (cu ft). Wastewater costs are also inclusive of basic Schedule of l�ev�-lopn,�nt Cesrs �ti'orkshrer service charges tied to estimate usage and pipe size. This output lists costs as indicated, including a King County's capacity charge is based on the fixture line item for incremental green construction cost count and residential equivalency calculation table premiums if any. Construction period interest is provided. Water efficiency incentives are based on drawn from a later worksheet. standard Seattle Public Utilities incentives. Opera�� r��,.,e Lvo c.',�ee: Grr� r r;.�;ldir � �c�rnv s 'vL'n�k,.,, _ This worksheet assumes a 15% loss factor(85% This component provides summary of tash,tax rentable space efficiency) on 150,000 sq ft of gross tredit, and tax deduction incentives available to the oHice space with initial base rent of$35.00 per sq project from various sources. ft, green payments, and a 0%vacancy rete due to long-term lease. Forthe retail portion, a loss factor of Lonns and 7aa Deductionc- worin';��°r 15% is assumed for 10,000 sq ft of gross retail space This worksheet provides a calculation of maximum with an initial base rent of$35.00 per sq ft, green loan available based on the minimum of SO% loan-to- payments, and a 5%vacancy loss. Base rents are cost and 75% loan-to-value. Permanent loan assumes assumed to escalate at 3% per annum while green an interest rate of 7.5%for 30-year loan period. The payments remain constant. short term construction loan assumes an interest rate of 7.25%.The Federal tax credit for high performance Ener_qy Incennve� wor k�heet buildings is based on $1.80 per sq ft at a minimum This worksheet assumes a mixed-use oHice building efficiency level of 50%. that is a Living Building with no (net) energy costs. For illustrative purposes, utility cost calculations Consnur�ioc Period in^ere�r wr,n<s�hee; were derived using information from the utilities that This tool provides a calculation of aarued I provide electrical, natural gas and water(both supply construction period interest charges based on a and waste treatment) services to the City of Seattle in 20-month construction schedule and typical monthly Washington State. Utility resource consumption was expenditure curve. derived using national averages of historical usage for similar building types. Electrical costs are based on Loon A�norrizonon Schedu�Y Seattle City Light's Large Network General Services This worksheet demonstretes calculation of annual Schedule per kilowatt hour(kWh) charges and peak debt service which includes both interest and demand charges. Naturel gas costs are based on principal payments over the 30-year permanent loan. Puget Sound Energy's Schedule 31 Commercial and Industrial General Service.The Energy Incentives Calculation allows detailed calculation of standard financial incentives and rebates offered by the local utilities. The alternative "Generic Incentives Calculation" assumes a typical incentive rate per kWh of energy saved in first year.The federal tax deduction for high performance buildings is valued at $1.80 per sq ft for a building with energy performance 50% beyond code. � � - _ _ _ - - _ _ Often, the avoidance of costs associated with catastrophic fire in 1889 burned down 65 acres of transportation, carbon, water, storm water, sewer, Seattle's downtown for lack of water to put it out. electricity, gas, heat and other attributes of green Citizens had had enough and they made the decision buildings are undervalued in the market and not to invest in re-6uilding the infrastructure required to considered by current appraisal and accounting secure a safe, healthy and abundant supply of clean practices. Why is this so? water. Modem accounting principles are based primarily � •• •��-. • � on measuring a firm or entity's ability to meet liabilities and obligations.Through the lens of ecological economics, once an ecosystem seroice is „ lost, for instance water supply, a liability is created and a problem can be detetted using modern '1": ��y�. '�' •: accounting methods.Alternatively, once the ability '" '! f ' Y�_' to avoid paying the cost of that service is lost,then �, i _�+�� — accounting can detect the problem.This issue of -'' $r��_'� �� • �� cost avoidance is not easily detected by modem - > .,,�--,,, �-' �.. accounting or economics. If a building or natural � ' :,�,�'��y�-�. _j7S-'�'--�`_-�;`� system is providing benefits beyond its site boundary, f' ' f .� � �'�� such as watershed protection or groundwater recharging,these attributes do not directly contribute Pn�,r,grapn�akeo artr��mP isae r�v'��svan,ie to reducing liabilities or meeting financial obligations. The following example from Seattle Public Utilities provides some clarity as to how estimation of avoided That year Seattle's citizens voted (93% "yes") to cost burdens can lead to recommended changes to establish Seattle Public Utilities (SPU) as the agency current accounting rules, even[ually "changing the responsible for providing water to the city.SPU took investment playing field" by allowing avoided costs the initial and wise step of purchasing a majority of to be included in legal accounting requirements for the upper Cedar River Watershed in 1899 to secure a natural systems and real estate. safe water supply on a scale dwarfing the city's needs. Had the Seattle City Council required a quick retum on the investment,the purchase would likely have been rejected. However,the goal was not to maximize d�c Sl GC� . Sr',' �� "net present value;' but to provide a safe, reliable Seattle's population quadrupled between 1880 and and sufficient drinking water supply for the people 1889.The city had no water or sewer systems. Four of Seattle in perpetuity. By 1901, clean water was unregulated private water companies drew water flowing. Cholera and typhoid were banished.10 Citizens from local lakes, into which sewage also flowed. �,ere healthier and more productive. Kids missed less Cholera and typhoid epidemics earned Seattle a school. Reconstruction of the downtown proceeded reputation as one of the unhealthiest cities in the at a break-neck pace. By 1909,Seattle was considered United States.s Citizens perished from contaminated one of the healthiest cities in the United States. water every year. Yet what sparked change was the water-related loss of the city's built capital. A m � � Itll , ISAI s v,,. � y� � O e� ' �� . , ; � �� .�_ •. It was a sound investment by any measure.Today, SPU would have to pay$200 million to build a filtration plant to do what the Cedar River Watershed does for free. Filtration plants, like all built capital, depreciate and fall apart with wear and tear over Nme. The forest in the watershed did not depreciate or fall apart. On the contrary,the natural capital of � the forest actually appreciated and grew over time. Relative to the size of the asset, a forest also requires very little maintenance.The watershed now provides far more water and far more dollar value than ever imagined by most citizens in 1899.Today, Seattle's tap water is also among the cleanest in the world. Better than bottled water, it has no endocrine disruptors or `� pharmaceuticals because no one is flushing anything ' �� into the watershed above the supply source. Public utilities in the U.S. have played a aucial I role in the development of the nation.The world � and our understanding of biological systems have changed significantly over the past century. Access � to clean drinkable water is rapidly becoming one of ,,,, ' �"4 .� the primary resource constraint issues of the 21" _' century. Though many water supplies appeared to �''�•� p , �.. _. be unlimited at the dawn of the industrial age, we rc ',:� now know water supplies are severely limited and y�j, water withdrawn from natural systems has other �+' '_ negative tangential impacts such as reduced salmon productivity and loss of species abundance and diversity. Today, Seattle and five other large U.S. utilities, including New York and San Francisco realize that both accounting practices and what is counted as infrastructure must change to secure water supplies. Though the Cedar River watershed provides water for Seattle, it is not valued on the asset sheet of the utility for anything more than timber and bare land value. Only the pipes that deliver water count as assets. The watershed, which filters and provides clean fresh water, does not. Seattle, among other utilities, seeks to change this accounting rule. Why isthis important?Accounting rules set forth by the Governmental Accounting Standards Board for public utilities will change. If a watershed that provides water can finally be counted and valued as an asset for providing and filtering water, then a system which captures and filters rain water for potable uses within a building should also be recognized as a capital asset and valued as such within standard accounting and valuation methodologies. � ��„ �� , , � � � � �� i cost of initial construction.Adding another gallon of — water or sewerage to the system costs very little. Required changes to current appraisal and accounting practices for real estate are key factors in catalyzing This is an important point as utilities, such as water, an investment shift toward more progressive and electricity, sewer and storm water have very large higher performing built infrastructure.These changes, capital tosts. Once the system is in place, the cost if accepted and implemented correctly, would in turn of handling a marginal increase in water, storm positively affect building valuatlon models. Valuation water, sewerage or power is very low. Thus, the determines the cost recovery funding mechanisms largest capacity for financial incentives for green for utilities which include charges, rate structures building resides in relieving utilities of the capital and investments.One of the great barriers to green costs of construction and maintenance, not the small building includes current utility rate structures that marginal costs of a few less gallons of water provided penalize avoided consumption and cost. to a single site while requiring the full capital, maintenance and operations costs to provide the In the 20`h century, a utility's infrastructure was infrastructure for neighbors. I fully held by the utility.Today, utilities pay some q policy implication of this could be that utilities landowners for actions, which result in higher water shift toward more steeply tiered utility rate structure quality standards as well as larger available supplies, including a higher premium for low performance If a building provides services such as storm water buildings and a subsidy for highest performance treatment and retention, or water collection and re- buildings. Another policy that could be enacted at use, why should these systems not be considered part the local scale would be substantial tax incentives of the full infrastructure for the tity? Furthermore, for buildings identified within a designated "Green why couldn't the owners of these properties receive a payment from either damagers or beneficiaries of Building Zone" or "Eco District." that system to offset the initial cost of the system that provides such a service? Water, electricity,telecommunications, rail, sewer, storm water, flood control, irrigation, garbage, ports and more could and should be included. Consider a few spatial aspects of the physical infrastructure, which could amplify or muffle the effectiveness of market incentives. Living Buildings, if scattered throughout a city or region, will provide no relief from the need for full utility infrastructure. However if Living Building design guidelines were implemented on a district or community scale, then a significant porNo� of existing infrastructure could be abandoned orre-purposed to service future growth needs. For example, if every other building within a community was a Living Building with on-site storm water infiltration and re- use, the city would still be required to maintain a full storm water system. Whereas, if there is a district of buildings for which all storm water is handled on-site and re-used,then the traditional storm water pipes can be abandoned or maintained only for heavy overFlow. The greatest cost of a utility is the capital ;i.-. Yi=li' However, it is important to keep the spatial nature of these benefits in mind. Living Buildings placed upstream of a salmon rearing area could have salmon benefits if they recharge groundwater and increase low-flow water levels for salmon, as well as providing greater groundwater sourced drinking water.A green building located on the waterfront of Puget Sound that recharges groundwater may contribute to improving groundwater in the near-shore territories, but will not contribute meaningfully to groundwater � �`� ` salmon restoration benefits. Overall, accounting for the cost-avoidance of energy ��"" efficiency, water conservation, groundwater recharge, storm water conveyance and other ecosystem services is a very promising approa[h.s�`'Although not sufficiently applied to ecosystem services, cost avoidance is recognized by traditional appraisal and accounting methods. Moving beyond typical environmental benefits within the built environment, research shows that green buildings provide communities with a variety of social benefits as well. These benefits include improved occupant health and productivity gains, increased comfort, a sense of place, and enhanced transportation accessibility. It is critically important that these social benefits be included along with environmental benefits in an Integrated Real Estate Investment Modeling Tool. Social benefits are likely to be similar in magnitude to environmental benefits and have the advantage of appealing to different constituencies than environmental benefits. Existing valuation methodologies from ecological economics, as shown in Table 2, can be effectively applied to estimate the value of these social benefits over time. � � , IU , Illf � v ' � � � , �� : � �, ::�,. +,,, , , �,,: • Thermalmass; Buildings have an enormous impact on the health and • Stable and comfortable temperature vitality of their occupants. For instance, a 1984 World conditions; Health Organization report suggested that up to 30 • Operable windows; percent of buildings worldwide may be the subject • Views to the outside; of excessive complaints regarding indoor air quality. • Usable controls and interfaces; The term "Sick Building Syndrome" has been coined • Places to go at break time; and to describe situations in which building occupants • A well-informed and responsive building experience acute health and comfort impacts that management. appear to be linked to time spent in a building, but where no specific illness or cause can be identified."A .- .j.�. � - , , . � comprehensive review of the literature cites studies'� Buildings and sites can provide a wide renge of with the following findings: gathering places in both exterior (e.g. parks, gardens, plazas) and interior (e.g. lobbies, meeting rooms) • Window views reduce Sick Building Syndrome by spaces. These spaces, particularly if well conceived over 20% within their urban context or designed for a variety • Natural ventilation reduces Sick Building of ages and activities, can provide significant social Syndrome by 15%; doctor visits by 15%; and benefits. In addition, provision of indoor and outdoor headaches and colds by 30% vegetation provides spiritual and aesthetic value to • Indoor plants reduce Sick Building Syndrome by building users reflected in higher levels of building over 20% comfort and satisfaction. i'I'OC�UCiI�.;',C„ _ . . - Buildings also have a significant impact on worker Accessibility to multiple modes of trensportation I productivity. Workers experiencing greater health, can significantly mntribute to building occupant and �' vitality,alertness, and connection to natural views user satisfaction.This depends on both proximity to are able to work more effectively than workers walking routes, bike paths, and trensit and effective in conventional buildings. Studies have found the urban design. Evaluating proximity and accessibility is following productivity gains relative to conventional a task that organizations and businesses are beginning buildings:" to consider. For example, Walkscore.com (www. • Daylighting,0.5%to 40%; walkscore.com) provides a "walkability" reting for • Window views, 7%; residential and commercial addresses across the U.S. • Natural ventilation, 0.4%to 3.2%; The score takes into account the availability of various • Operable windows, 7.5%; types of amenities as well as the safety and quality of • Mixed-mode conditioning, 10%to 18%; the pedestrian experience. • Indoor plants, 0.6%; _ i _ Many building factors contribute to occupant perceptions of comfort (e.g. thermal comfort, appropriate lighting); satisfaction; and overall well- being. A recent, large-scale study of 16 buildings in England identified several features consistently associated with overall levels of satisfaction:" • Shallower plan forms and depths of space (buildings and rooms that are long and narrow); �-.�, _--.c�'�- - The 20`" century was built on large centralized from the same source, the Mississippi Rivec From a infrastructure and institutions to build this regional perspective, levees constrain the river and infrastructure.This included rural electrification, dump critical water and sediment off the Continental public water uriiities, storm water systems, roads shelf rether than renewing and rebuilding wetlands funded through tity, county, state and federal and barrier islands. These shrinking coastlines, institutions. wedands and barrier islands provide critical hurricane buffering for U.S. coastal and low elevation riparian The 20`"century was also built upon cheap and tities, such as New Orleans and Houston. abundant fossil fuels, land,fresh water, forests and other natural resources, a stable climate, little In the Northwestern United States, these same I international competition, banking stability (aker systems that once clearly contributed to the 1935), rising real wages, real estate values, and tax development of the region, are not providing the base. same level of value, and are often at cross-purposes. Urban watersheds have cities building storm water Though other factors such as technological systems that also contribute to greater flooding and advancement certainly continue at the same or a damage of larger levees. Storm water no longer greater pace in this century,the physical challenges needs to simply be conveyed to Puget Sound, but of water, biodiversity, material consumption and now requires treatment in another large facility. energy supply make clear that utilizing a 20'�century Another approach is to avoid these conflicts and costs economic framework and mentality simply cannot altogether by building smarter,greener infrastructure deliver sustainability and prosperity to an ever that mimics the processes of nature and is compatible expanding population in the 21" century. The delay with existing urban development patterns. in trensitioning to a new and better fremework has actually driven us farther away from this ideal. Cities can no longer afford to replace the services that natural systems provide. The current model As watersheds have become more and more crowded, of utilizing large tax districts to provide expensive one infrastructure improvement demolishes another. mega-infrastructure projects such as regional storm For example, in the Mississippi River Basin, hundreds water conveyance and treatment systems with a of cities build independent storm water systems in concurrent set of investments being made to try and order to pipe water more quickly from expanding restore the salmon, shellfish, and other species, and impermeable surfaces(roads and buildings) i�to the natural systems being damaged by these same large Mississippi River. At the same time, the U.S. Army scale infrastructure projects. This approach is also Corps of Engineers measured higher peak flood flows not producing the jobs and incomes it once did, and and as a result, invested heavily in building the levees it is more risky, with a greater chance of catastrophic higher. Higher, more constraining levees and more floods, sewer failures and other problems. water actually increased the destructive power of the river which damaged the levees more quickly during The 21" century infrastructure must employ greater higher floodwaters. During all of this, critical aquifers biomimicry, greater utilization of infrastructure that once recharged by rainfall were no longer recharging. provides multiple benefits.The Told River Levee To make matters even worse, industrial efFluent and Setback Projett,for example, provides both greater sewerage systems were discharging into the river salmon habitat, better flood protection, and, by while downstream cities were drawing drinking water increasing the flow of water through wetlands during 111 . � I111 � ar � / a �, �� i � � �� l , floods, [his project also improves the water quality.'° �� Whereas the built environment was integrated with Competitively available incentives should be a last massive centralized systems in the 20`"century,the resort for the viability of green building projects. 21" century could provide greater development There are severel tiers of activity that should minimize patterns and values by fully integrating natural (or eliminate) the need for additional compeHtive systems within the built environment and leveraging sustainability incentives to solve any remaining what nature does best right in the heart of our ciees market "gap".This increases the likelihood the gap and towns. can be solved in a timely way using a variety of routes. Recent analysis in Washington State15 also shows The first tier of activity is to use a fully integreted that"green jobs" related to energy conservation, design process with clear sustainability objectives habitat restoration, natural resources management, throughout the entire project lifecycle. Extra and sustainability actually increased during the design costs incurred by greater integration among financial crisis when nearly all other sectors of jobs planners, architects, landscape architects, engineers, experienced severe reductions. transportation planners, and other consultants are paid for many times over in cost savings resulting In addition, as Living Buildings are being consiructed from synergies across site lotations and professional throughout the Northwest, there is real opportunity disciplines. For instance, proper massing and to calculate both the actual jobs created, and a orientation of buildings can greatly enhance the multiplier for the economic benefits from both natural heating and cooling and renewable energy building construction and occupancy.This will provide generation potential of buildings; an improved critical comparison data for comparing with the jobs building envelope can result in downsized mechanical created at comparable standard buildings and the equipment with corresponding capital cost savings; associated economic multipliers. and advanced transportation strategies can significantly reduce parking requirements and costs. F��'�''"'- !: � ' - ,, The second tier is to aggressively use all available When considering how to build a more sustainable, standard incentives for the project.These incentives prosperous and fair etonomy, investments in green include the federal Business Energy Tax Credit buiidings and infrastructure that generate ecosystem for solar PV panels, solar thermal,fuel celis, and services within the urban core promises us greater microturbines; the federal Historic Rehabilitation prosperity and resiliency in the decades ahead. Tax Credit for historic renovations;and local utility incentives for water and energy efficiency. There are many financing options that encourage The third tier involves pricing and valuation green building projects.These incentives reward mechanisms that allow developers to harness both the environmental (e.g. renewable energy, some portion of the future stream of cost savings green buildings,sustainable infrastructure) and social associated with sustainability approaches. For (e.g. affordable housing,job creation, community instance,full-service office or retail leases allow amenities) objectives of the project as currently utllity, operations and maintenance, insurence, designed.These incentives are offered in a variety of and other types of savings from high performance forms, including below-market debt, below-market green buildings to directly benefit net operating equity, federal tax credits and deductions, grants income. Suitable studies (e.g. energy models, water and program related investments (PRIs), and others. models, insurance underwriter reports) can then be Sources of these financing options include federal used to support pro forma projections of increased government, state,foundations, financial institutions, N01 from decreased operating costs. Such studies pension funds, and others. Some of the incentives, are now used by appraisers to establish a higher including certain tax credits, are always available for valuation of proposed green buildings, which may qualifying projects, while some are modestly to highly help these huildings qualify for increased senior loan competitive. amounts and/or better loan terms. In the case of _ � .� _ ,,,_��c,, FAkTH ECU10"�11CS condominiums, a portion of Home Owner Association construction. It also depends on the timing and (HOA)fees that are less than monthly utility savings amounts of sales and rental revenue for residential can be dedicated to paying off incremental capital and commercial components. Finally,the return costs of green technologies over a ten to twenty year is highly sensitive to the capital structure of the period. Owners then get reduced HOA fees and the project: the relative amounts and terms of equity, benefit of healthy green homes. Other approaches debt, grants, and other capital sources.All of these indude paying back green improvements financed by factors have mmplex and non-linear impacts on municipalities or 3rd party private entities on property project financial returns.These factors are modified in tax bills or utility bills. predictable ways by sustainable approaches, and can be included in the Integrated Real Estate Investment The third tier can also be applied at the level of Modeling Tool that ensures required financial returns homeowners. Energy Efficient Mortgages and Location for developers are met. Efficient Mortgages allow purchasers to qualify for greater loan amounts based on their reduced outlay As we have seen, the Integrated Real Estate for energy and transportatlon expenses, respectively, Investment Modeling Tool augments traditional in a sustainable urban development.This report project pro formas with information on cost suggests a greatly expanded role for this kind of third premiums or savings for specific green features and tier financing for a wide range of environmental and infrastructure components; standard incentives (e.g. social benefits as they become monetized through utility rebates, tax credits and deduttions for green policy innovations. or social features); reduced utility, operations and maintenance, insurance and other costs tied to green The fourth tier is to apply premium pricing to market- features; pricing mechanisms to harness future cost rate leases, rents, and sales prites when this does savings (e.g. full-service leases or"green" HOA fee not conflict with social objectives (e.g. subsidized tomponents); and pricing to reflect the market cachet rents for affordable housing or community-based of green buildings. This allows project level Returns businesses). Green buildings are superior products on Investment (ROI)to be determined for each class and many studies demonstrate that they appreciate of investor, and if hurdle rates are not met, a market more quickly in value than comparable conventional "gap" can be determined that will restore required properties while offering e�hanced health and returns. comfort and decreased operating expenses (to the extent not harnessed by developer as described This section focuses on solving for any remaining above).A very modest increase in projected sales gap with competitively available sustainability prices(even 0.5%to 2%) may solve a significant incentives. Such incentives are provided by social financing gap. Increasingly, appraisers are able to and environmental investors that are willing to take justify higher valuations based on "green" amenities, a below-market return in exchange for a project's particularly when they are provided with supporting demonstrable social and environmental returns. For analyses. example, a local economic development agency may need to see a certain level of job creation and access Integrated Real Estate Investment tocommunityservices; afoundationmayneedto see a commitment to smart growth design principles; Modeling Tool and Competitive and a green real estate investment fund may need to Sustainability Incentives see a certain level of LEED certification.This can be The overall financial return (using a variety of standard an important transitional strategy until policies fully measures including internal rate of return of capital support the monetization of environmental and social invested) of a green building project depends on benefits in appreisals and valuation models. the timing and amounts of expenditures on land acquisition; soft design, planning, engineering, In Table 7 below, we provide a description of types legal, accounting and other costs; permits and and sources of sustainable incentives(both standard fees; infrastructure and other site costs; and hard and competitively available�. One or more of these incentive types can then be employed in the Integrated Real Estate Investment Modeling Tool such that(1) overell projed financial return goals are satisfied; and (2) the project has the greatest likelihood of securing the incentives from identified sources in the required timeframe based on the project's triple bottom line returns (financial, social, environmental). This framework may also prove valuable in working with infrastructure providers (e.g. water, wastewater treatment, roads, renewable energy), commercial tenants, prospettive residents, utilities, and others. Some of the below-market finance will naturally flow to the project developers. Other portions may flow more naturelly to project partners, including non-profits better positioned for certain grants. In this instance, the developers will have to take a leadership role in assisting those partners to access the below-market finance and ensure that enough benefits are retained at the project level to maintain overall project viability. High performance green buildings, including Living Buildings, have a compelling story that lends credence to their ambitious projected social and environmental returns.This should put such buildings in a strong competitive position for the kinds of sustainability incentives listed below. However, it is still critical to minimize the need for these incentives in the first place,and to recognize the complexity and � uncertainty in securing them. t . �� ` � �f✓�� A -�� d "".. Table 7:Summary of Advantaged Financing Options. Type Description Sources Senior commercial loans ai Yn%to'/z%below market for construction and permanent financing, Awarded on tl�ie basis of green attributes of projecL Available for site/infrastrudure(60%to 80%of total costs);buildings(60%to SO%of total costs);and energy facilities(50%to 60%of total msts). Giti Property InveStors(CPI)invests in 5u5tainable 6uilding p�ojects.Its first SUCh Citigr0up-Citi Property imestment was in the Loreto Bay Company,a 5,000-home mmmunity in Baja Investors unit(www. California, Mexim that is one of the largest sustainable resort mmmunities in citigrouppropertyinvestors. North America.Simllarly,CPI intends to commit$500 million to investments In com) sustainable building projects over[he next 10 years. Citi's Markets&Banking group plans to invest in and finance over$31 billion in dean energy and altemative technology over the next ten years through the expansion of existing activities and the launch of new dient services.With committed investments and financings approaching$7.5 billion to date,the Citigroup-Citi Markets and Markets&Banking group sees tremendous opportunities to support companies Banking Group working in alternative energies such as solar,wind,hydro and geothermal;helping (www.citigroupcib.com) to commercialize energy efficiency ideas;and facilitating investments in aging infrastructure using cleaner and more efficient technologies.This is a good source for the omsite renewable ene�gy utility, Wells Fargo has financed more than$1.5 billion in LEED-certified green buildings -a result of doing business with experienced customers and internal training to encourage financing of energy-efficient,ernironmentally-friendly buildings.It has Below-Market also invested more than$400 million to support renewable energy projects.Wells Wells Fargo Senior and pargo will also focus on energy-efficieni mortgage products and environmentally- (www.wellsfargo,com) Mezzanine friendly construdion and development,induding Green EQ2's special financing— Commercial Five-and 10-year loans with interest rates from about 1 to 2%—for green affordable Loans homes in low to moderate-income neighborhoods, Bank of America will commit$lS billion in lending,advlce and market creation to help commercial dients finance the use and production of new products,services and technologies: ' Commercial Real Estate Banking. The mmpany will build upon its expertise in tinancing environmentally friendly development by creating customized solutions tor dients who are developing and implementing environmentally sustainable designs. Areas of focus indude financing real estate projects with gank ot America LEED cerfification,improvements in energy efficiency,brownfield redeveluPmen[, promotion of smart growth,and the usc of energy-related tax creditr. �'Nw'�'.bankofameriCa.Com) ' Environmental Lending Consideration:The company will give favorable consideration,among other existing underwriting criteria,to lending opportunifies with dients that are creating and implementing environmentally sustainable products,services and te�hnologies. New Resource Bank emphasizes green building prolects and offers a range o�loan New Resource Bank products. (www.newresourcebank.com) • Below-market equity for pre-development,mnstruction,and medium-to-long term investment.Available for pre- development(5%to 40°io of total costs);site/infrastructure 6%to 40%o(total costs);buildings(5%to 40%o( to[al costs);and energy facilities(5%to 40%of total costs). Hines CaIPERS Green Development Fund-currently has$277 million in eyuity capital and Hines CaIPERS Green is wnrking on 37.1 billion in projeds DevelopmeM Fund ihcgreen(und.com/ home.cfm) The Rose Smart Growth Investment Fund I,LP is the first national green smart growth Rose Smart Growth investment fund to focus exclusively on providing emnomic and environmental retums. Investment Fund I,LP The Fund is committed to acquiring real estate near transit or in walkable communities,and ;http://www.rose- enriching these assets with green management pradices,professional real estate skills, network.com/projects/ and a long-term point of view.This work informs its planning,project management and index.html?cat_toc. development work with a deep understanding of the issues of operations,life cyde costs, html&top.html&studio_ Below-Market andresponsiblecitizenship. investme.nt.hhnli Equi[y Revival Fund Management LLC pusitions itself as an Institutional-quallty real estate Revlval Fund investmenY manager focused on high��rofile,model green developments.It seeks profitable Mana�ement LLC projects that generate value, build community,and integrate proven sustainable solutions (www.revivallunds. with maiket-driven development and investment practices. It focuses on value-added com) proven techniques for energy efficiency,green design,and operaUons management to drive asset performance. Northstreet Partners'mission is to remain at the forefront in the development LEED certified,carbon neutral mixed-use projects enwre a quality of life that is both sodally responsible and environmentally wstainable for residents and merchants;and advance Northstreet and commercialize clean technologies.Northstreet Partners was founded to provide Partners LLC(www. vibrant mixed-use development to urban centers.Our focus is healthy af(ordable homes northstreetllccom) servic:ed by retailers who share our ethic for a liiestyle of health and sustainability(LOHAS). Each project has iYs own signature architedure and retail mix to satisfy the needs oF its surrounding community. Loan guarantees and other forms of credit enhancement (e.g. Lette�of Gedft)can provide a sigNficant incentive avall�able for energy facilitfes(up to 700%of loan amounU. Loan Department of Energy federal loan guarantees for energy efficiency,renewable energy,and Department o(Energy Guarantees advanced transmission and distribution technologies-current solicitatiun request toCaling (www.lgprogram. $10 billion energy.gov/keydocs. htmp Fc deral New Marke[s Tax Creditr WMTQ are designed to encouragc investment in reai estate development(with the vxception of rental housing)and businesses in qualified low-inmme rensus tracts.They can provide the equivalent of 20°io to 25%of a projed's total financing in the form of equiTy and/or debt which receives primarily tax aedit retums and unly nominal economic returns. NMTC allocations are obtained on an annual mmpetitive basis by qualified Fede�al New Community Developmen�Entities(CDEs).In tum,CDEs pass most of lhe bene(it o(the tax credits to projects with Markets Tax Sreatest community benefits and most distressed demographics. Credits NMTC awards can be used for pre-development,site/infrastructure,buildings,and energy facilities.Single project real estate financing typically ranges hoin$5 million to$50 million,with a corresponding amount of$1 million to $125 million in the form o�equity and/nr debt which iecelves primarily tax oedit returns and only nominal economic reWms Federal Federal Historic Rehabilitation Tax Credits provide 10%or 20°/a federal tax aedits on quali(ied renovation expenses Historic for qualifying historic buildings,depending on how much of the building is left intact The program is administered by Rehabilitation the Statc Historic Preservation Office, National Park Service,and IRS(www.nps.gov/history/hps/tps/tax/brochurel. Tax Credits htm).Federal Historic Rehabilitation Tax Credits cannot be used for land costs,but can used for pre-development,site/ infrastructure,and buildings. Federal Low-Income Housing Tax Credits(LIHTQ provide approximately 9%annual tax aedits on qualified construction or renovation costs and 4"/u annual tax credits on qualified existing building purchase costs for a ten year period.These credits are pro-rated based on the percentage of affordable rental housing units provided,and are competitively albcated by s[ate housing agencies(more detail can be found at www.enterprisemmmunity,com/products_and_services/ downloads/lihtc_101_ppt_10-06.pdf). LIHTC can provide 30%-70%of pre-development,site/infrastructure,and building msts lor the low-income rental housing portion of the projed. Federal Enterprise Community Imestment offers competitively priced Low-Income Housing Enterprise Community Low-Income Tax Credit(LIHTQ equity to nomprofit and for-profit developers for new construction Investment(www. Housing Tax and/or rehabilitation of afforda6le rental housing that generally adheres to the Green enterprisecommunity.com) Credits Communities Criteria.Enterprise is committed to creating communities of greater sustainability by working with partners who are willing to inmrporate green standards into and Green their projecta Communities(www. greencommunitiesonline. org/tools/funding/housing. asp) Local Initiatives Support Corporatlon,anU i�s Natlonal Equity Fund afflliate,has an Local Initlatives Support emphasis on smart growth LIHTC projecL Corporation Cwww.Ilsc.org) There are a range of federal tax credits and tax dedudions for renewable energy systems and commercial building efficiency.These tax credits apply to boih small-scale,building-integrated and large-scale energy generation facilities (e.g.proposed cogeneration facility). Under the Business Energy Tax Credit, PV panels,solar thermal,small-scale wind(to 100KW,maximum$4,000 credit per turbine),and fuel cell systems are eligible for a 30% Details available from: federal tax credit and mitrotur6ines,geothermal heat pumps,and biomass/mgeneration (www.dsireusa,org/library/ facilities are eligible for a 10%federal tax credit.The applicable basis of the tax credit indudes/in�entive2. is the cost of energy generation related equipment.Under recently passed legislation, cfm?Incentive_Code=U502 these facilities must be placed in servite by December 31,2016(except geothermal heat F&State=federal&currentpa Federal Pumps,which have no expiration).This credit could be woith several million dollars with geid=l&ee=1&re=1) aggressive use of building-integrated renewable energy generafion systems.It is not dear Renewabie if the proposed 35MW cogeneration facility would be eligible for both the Renewable Energy and Energy Production Tax Credlt dlscussed above and the 6usiness Energy Tax Credit. Energy Efficiency PV panels,solar thermal,fuel cell,and microturbine systems are eligible for five-year Details available hom�. Tax Credits accelerated depreciation(MACRS)induding 50%depreciation in first yeac This tax and Tax deducYion rould be In Yhe amount of several mllllon dollars per year for five ycars with (www,dsireusa.org/library/ Deductlons aggressrve use of buildinR-integratPd renewable enerRy grner�tion systems indudes/incentive2. ctm?Incentive Code=U502 F&State=federa I&currentpa geid=l&ee=7&re=1) A t�x deduction of$1.80 per square fooY is available lo ownors of new or rxlsting buildings Details available from: who Install(1)interior lighting;(2)building envelope,or(3)heating,cooling,ventilation, or hot water systems that reduce the building's total energy and power mst by 50% (www.dsireusa.org/library/ or more in comparison to a building meeting minimum requirements set by ASHRAE indudes/incentive2. Standard 90.1-2001. Energy savings must be calculated using quali(ied computer software ctm?Incentive_Code=U540 approved by the IRS. F&State=federal&currentpa geid=l&ee=1&re=1) The Tax Increment Financing(TIF)Program is an economic development tool administered in certain municipal areas induding Portland but not Seattle.This program allows local governments to sell bonds backed by a developmenYs Tax Increment future taxes,with the bond money helping to pay the developer's construdion costs TIF proceeds are awarded on a Financing highly competitive basis in qualffied areas.TIF can be utilized for pre-development,site/infrastrudure,buildings,and energy facilities TIF awards can range from tens of thousands o(dollars to tens of millions of dollars and amounts depend on a mmpiex negotiation process. Grants from organizations with a strong program area in sustainable communities and/or smart growth.It may be necessary ro establish a"Friends of..."rype non-profit organization,or to work in partnership with an existing non- proflt in order to a¢ess some of these grants.Grants are available for pre-devolopment,site/infrastructure,buildings, and energy facilities in amounts ranging frnmthousandsto millions of dollars. Specific award rangesare indicated wherr.possible below. f'ederal grant assisYance Catalog of Federal Domestic Assistance (www.cfda.gov);Access to grant applications (www.grants,gov) Association o(foundatlons mmmltted to supporting smar� growth developments Funder's Network for Smart Growth and Lrvable Communities (www.fundersnef work. org) Enterprise offers grants to help cover the custs of planrnrig and implementing green mmponents o(affordable housing developin=_nts, as well as tracking their costs and benefits. Enterprise Green Communities program: Planning&.Const_rudion Grants Grants up to$50,000 mver planning and mnstrudion expenses induding additional msts Enterprise Community Grants �f architectural work,engineering,site surveys and costs associated with items such as a Investment(www. more efficient HVAC system,green materials and energy eFficient appliance. enterprisecommunity. Charrettes Grants mm) Grants for up to$5,000 to assist housing developers with integrating gmen buiiding systems in their developments and engage in a serious discussion of green design and Green possibilities, Enterprise will award planning grants to affordable housing developers to Communities(www. coordinate a green design charrette. greencommunitiesonline SustainabiGty Traming Grants .org/tools/fundiog/ Green Communities offers Sustainability Training Grants up to$5,000 tor affordable grants) hausing developera Funding is available to cover the design and distribution of an operations and maintenance manual. Home Depot Foundation will be awarding 8400 million m grants over the next ten years Home Depot to non-profit organizations.Preference is given to proposals that indude community Foundation(www, engagement that result m the production,preservation,or financing of housing units for homedepotfoundation. bw-to moderate-income families. The most promising proposals incorporate a number of org) "green"building design practices. The Summit Fund's long-term goal is to ensure[hat lhe Anacostia becomes a biologically The Summit Fund o( productive,socially viabie river that is a snurce ol pride for the national capital region. Washington(www, surnrn itf dn.org/fund) This founAation has an emerging program area in SusTainable Design. The Summit Foundation (wwwsummitfdn.org/ foundation) The Oak Hill Fund's Environmentally Sustainable Affordable Design(ESAD)program Oak Hill fund(www. piomotes the inmrporation of the principle of sustainable development into the design of oakhillfund.org/ affordable construdion,with a primary focus on residential housing. oakhillesad,hmtD The Surdna foundation's Community Revitalization Program works in select U.S.cities to Surdna Foundation support efforts to create equitable,environmentally sustainable,mixed- (wwvesurdna.org) The Surdna Foundation's Community Revitalization Program works in select LLS.cities to support efforts to create equitable,environmentally sustainable,mixed-inmme mmmunities that provide residents with choice and opportunity.Communities of choice are economically and culturally diverse,and provide a range of housing choices;promote development that is walkable,environmentally sustainable and cost-effective;support grecn building and energy efficiency in policy and pradice;conned development to jobs and information through transit and wireless networks;and build equity into their systems, to ensure that all residents can benefit from a city's revitalization. Grants (ConYd) Planning grants from$50,000 to$100,000 in support of the integrated green design Kresge Foundation process; Medical and community components would be eligible but not for-profit Green Building Initiative components. (www.kresge.org/ c o ntent/d i sp I ayco nte n L aspx?CID=59) Offers$2 million in prizes for innovation sustainable construdion projects. Hokim Foundation tor Sustainable Construction(www. holcimfoundation.org) Grents from the Deutsche Bank Americas Poundation support neighborhood-based Deutsche Bank organizations that develop affordable housing,support the aeation of new businesses, Americas Foundation generate employment opportunities and address critical servire needs. Committed to (www.commuriity. building healthy and sustainable mmmunities, Deutsche Bank works in partnership with db.com) outsfanding citywide and national organizations to help community-based initiatives take root and su¢eed. Program Related Investments(PRIs)and Mission Related Investments(MRIs)from Foundations(below-market debl. or equity tor projects also achieving foundation goals).These inves[ments may be used for pre-development,sitc/ infrastructure,buildings,and energy facilities.They are typically from hundieds of thousands of dollars to about ten million dollars. Program- F.B. Heron Foundation has previously provided several million dollars in below-market F.B. Heron Foundation Related loans to Swan's Market and the lack London Shopping Mall(in Oakland,CA)and private (www.fbheron.org) Investments equity investment in the Bay Area Smart Growth Fund I, LLC (PRIs)and The MacArthur Foundation has previously provided several mil�ion dollars of below-market lohn D.and Catherine T Mission- loans through its Affordable Housing Preservation Initiative and a loan guarantee for MacArthur foundation Related mixed-inmme communitfes (www.macfound.org) Investments (MRIs)from Blue Moon Fund will mnsider investments in ventures that are demand driven,with a Blue Moon Fund(www. Foundations relatively proven market,and demonstrate that they are environmentally sustainable. Real bluemoontund.org/ estate ventures will only be considered if they are part of a larger initiative that has social investment/investment_ and/or environmental benefits. list.htm?cat_id=1976) The Ford Foundation has provided a$2 million below-markel loan ro Erotrust in support of Ford Foundation(www. the mixed-use Natural Capital Center project in Portland,OR fordfoundation.org) Enterprise Community Loan Fund offers several lending products to support the Enterprisa Community development of affordable rental and homeownership housingthat adheresto Green Investrnent(www. Communitles Cnteria. enterprisecommunity. com) Early Predevelopment Loans may be used to Fund any or all of the following typical costs: green building/design charrette and other services of green building/design pro�essional, and Green architectural drawings or engineering studies,geotechnical study or survey,mnstrudion Communities(www. Program- feasibility study incorporating green criteria, phase 1 environmental report,appraisal, legal, geencommunitiesonline Related and devebpment consuliant fees. .org/tools/funding/ Investments loans) (PRIs)and Predevelopment Loans Mission- Related Predevelopment Loan Funds may be used to fund any or all of the following typical Investments costs related to affordable housing development prior to dosing constructinn financing: (MRIs)from architedural,civil engineering and landscape design fees,eledrical anA mechanical Foundations engineering fees, interior design(ees,surveys,environmental phase one and follow-up environmental impact studies,traffic studies,erosion control plans,zoning work,legal and (ConYd) title�fees,appraisal fees,loan fees,application fees for debt,equity and subsidy financing and the msts of engaging a green design specialist. A<quisdion Loans may be used to fund any or all of the following typical msts related to the acquisition of land or buildings intended tn be developed as affordable homeownership or rental housing:eamest money deposits or option payments,land or building acquisition � costs,title,dosing and legal costs related to acquisition dosing. '� It is sometimes possible to work wRh major project suppliers to obtain enhanced pricing or imkind materials or equipment donations in exchange(or highlighting these produds in a high-visibility sustainability projecL This apprwch would be used for bu'ddingsand energy faclfities,and generatetens ofthousandsto miliionso(dollars in savings. Pooling Purchasing_Power In nrderto implemen� many of the Clinton Climate Initia[ive's major programs,cities Qinton Foundation- need access to affordable energy-efficient products, CCI is working to leverage the buying Clinton Climate Initiative Supplier potential of cities throughout the world to achieve(avorable pricing on-and thus faster (www.dintonfoundatinn. PaRnerships adoption of-energy-efficient and dean energy produds and technologies.CCI has org/what-we-do/ negotiated discounteA pricing agreements wdh more than 25 mawfacturers of energy- dinton-dimate- efficient products,induAing lighting chillers,solar mntrol window(ilms,and"mol"roofing initiative) that will help to lower[he costs of building retrofits.CCI has alw negotiated dismunts on dean technology vehides,energy efficient street and traffic lights,and other products that will be deployed in cities through CCI programs.To date,more than 1,100 cities worldwide, induding the U.S.Conference oF Mayors,have access to these affordable prices, encouraging more products to emerge into a larger marketpiace. Renewable Renewable electricity generated omsite that is sold to the grid Is ellglble for Renewable Energy Credits(RECs) EOergy (also known as Green Tags).which can be>olcl in:+n adive wholesale inarket tu compames like 3 Degrees Credits (www.3degreesincsom).These RECs are valued at eipproximatelv 02L/kWh lo QSQ/kWh. ...rd'e�� _ . Tum-key infrastructure and mechanical systems partners install equipment at no capital cost in exchange for a long- term lease or service contrad.This can take green capital expenditures out of the initial capital budget.This would be applicable to buildings and energy facilities,and could result in savings of tens ol millions dollars in construction cos[s, but an increase in long-term payments. Tum-key provider of commercial solar systems installs and owns system independently in No firms Currently Tum-Key exchange for long-term power purchase agreement. ideMified in the DC Infrastrudure area.This is an adive and marketplace that needs Mechanical constant monitoring Systems These firms and others will design,install,and own HVAC and energy elficien[ Carrier Corporation; Partners technologies on a lease arrangement,decreasing initial capital mst but increasing long- Honeywell Building term payments. &Energy Solutions; lohnson Controls, Inc;Siemens Building Technologies;Trane and others. StaYe and A wide range of sample incentives are provided In the"Green Building Incentives"worksheet Local Incentives � � � �. �, I � � I � , � � � � • = ' , ; ✓ S. Explore enhanced valuation and appreisal models � ``� (e.g. using industry standard software such as Argus. '��dse I Revie�n� 6. Determine, with the above information,the best Many studies discuss aspects of the environmental Policy approaches to shift investment toward a and social benefits of buildings. Work in Phase more restorative built environment. I created a research, policy, and investment �• Conduct a detailed analysis of local, state, and fremework and taxonomy for transforming the built federal policies that will support the integration environment that explicitly incorporates a wide of environmental and social values in the built range of environmental and social benefits. Phase 1 environment.This analysis will weigh factors like also created a methodology grounded in ecological level of impact, proposed funding mechanism, economics that allows these benefits to be quantified ease of ineasurement and implementation, and given a monetary equivalent. Until these broader Political viability, and administrative agency. 8. Examine the integration of green building environmental and social benefits are routinely valuation standards into the appraisal standards highlighted and connected to the economics of the Which would enable practitioners to routinely built environment, they will continue to be valued include the recognition of environmental and at zero.This creates trernendous market distortions, social benefits in appraisal analysis and their resulting in the misallocation of trillions of dollars value. of real estate investment. Sustainability cannot be g, Conduct outreach to the appraisal and valuation achieved with an inefficient allocation of resources (e.g. real estate development and investment) for the built environment. Investment needs to be communities. shifted to create a restorative, sustainable built 10. Set a strategy for a shared protocol to incorporate environment increasing the full benefits that built environmental and social value streams in structures provide and mimicking natural functions financial models. and processes to potentially enhance rather than • degrade natural systems. As these values are increasingiy monetized through This framework is the basis for the Theory of Change Policy shifts at various levels, they will then be to be implemented in Phase II. Phase II will: routinely incorporeted in appraisal and valuation models.This will reduce market distortions over 1. Provide detailed calculations and case studies of time, providing better investment decisions from the environmental and social benefits provided by Perspective of integrated financial, environmental, living buildings. and social returns. 2. Test their impact on valuation models or The overarching goal of this work is to catalyze a appraisals. shift in mainstream real estate practices to support 3. Create an open source prototype Integreted Real a restorative built environment that is compatible Estate Investment Modeling Tool to demonstrate �,,�ith healthy natural systems.This work provides how environmental and social benefits can be monetized environmental and social benefits not embedded within a pro forma in a new building �urrently considered in a conventional real estate development context. investment model. By enhancing the underlying real 4. Show how different policies internalizing estate investment model, which includes appraisal, environmental and social value creation affect risk assessment,finance, and lending, the full key investment metrics like Return on Investment transition to a high performing built environment (R01), and Internal Rate of Return (IRR). appropriate for the 21" century can be achieved. ' ie� .. y ua� � �, � ' �� t . 7�,. . . .. . . � . . _ . � } Next steps include a two-year program of activities � including linked research, policy, and advocacy work T�� within the real estate development industry.These actions,taken together, should begin to catalyze � the systematic incorporation of environmental and '�-- social benefits in the Real Estate Industry. Shifting �{C � the incentives and the real estate investment model ' �C� will ultimately drive investment toward buildings and STEp� infrastructures that are financially resilient, socially just and ecologically restorative. - The proposed scope for Phase II indudes the � following: 1. Develop detailed monetization models for the identified social and environmental benefits and are tied to specific building features. 2. Refine the prototype Integrated Real Estate Investment Modeling Tool to utilize the detailed monetization models in (1) above. 3. Make enhancements to the Tool with additional versions suited to the evaluation of existing buildings (e.g. non-LEED�"'all the way to Platinum LEED'"^) compatible with industry standard ARGUS software. 4. Undertake a detailed analysis of potential policy interventionsto determinethe bestleverage points for systematic change. Prioritization will include factors such as: • level of impact; • proposed funding mechanism; • ease of ineasurement and implementation; • political viability; and • administrative agency. 5. Lay out a strategy to shift from regulations to "protect us' from the 6uilt environment to policies that allow us to create a restorative built environment (a healthy human habitat�. 6. Set out a strategy(e.g. legislative, amendment to current building codes and other regulatory barriers, opportunistic funding mechanism, measurement methodologies, industry changes) to implement the investment shift. 7. Identify opportunitiesforintegrated approaches to assessing asset value within the appraisal and valuation industries utilizing interviews with major Real Estate Industry segments (lenders, investors, appraisers), . .�� .�-, �.��. � . r i�. . i��. .. ,. �� . i .i,: . . . ,...,,. .._,.., � 8. Develop protocols, measurement methods, 13. Link the research with current work on uelity standard and reports, consistent with appraiser accounting principles,funding mechanisms, rate and valuation expert needs and operations. struttures, stale of systems veisus cost, loss Also allow for the integration of additional factors of transmission, micro-grids, and related financial factors linked to environmental and factors. sotial benefits. For instance, along with tangible 14. Create a communica[ions and marketing strategy revenue streams tied to policy changes, appraisers for policy makers, real estate industry, financial can already include a complex analysis of risk and industry,green building community, insurance marketability that may already be influenced by industry, utility industry, and others.The strategy green building attributes. will include a digital platform, book, papers, 9. Apply these approaches to specific buildings videos, press releases, and possibly a conference. by exploring case studies of projects seeking Living Building Challenge certification as well as nationally recognized LEED`"" Platinum certified projects including the Bullitt Center in Seattle, WA;The Oregon Sustainability Center in Portland, and/or One Bryant Park in New York, NY. Using readily available information about these projects, while maintaining sensitivity to confidential financial information. Analysis will be organized to allow for comparative analysis of the benefits of �I Living Buildings and enhanced value. 10. Explore the detailed case studies showing the estimated value of environmental and social benefits, proposing policy interventions that will effectively capture these benefits, and examine new financing models driven by better monetization of environmental and social benefits. 11. Work with the Insurance, Reinsurance and Actuarial Industries on green buildings and insurance underwriting through interviews to understand factors that may influence property insurance, health insurance, natural disaster insurance,fire insurance, collateral loan loss credit, etc. Examples include a potentlal decrease in construction risk and defect insurance for green buildings due to the decrease in mold risk. This will provide a series of protocols, measure methods, standard and reports that are consistent with how insurers work bu[allow integration of additional factors linked to green building benefits. 12. Develop the concept of restorative micro-utilities by systematically addressing current regulatory, code, financial, and other barriers to both small- scale and integrated (e.g. multi-resource) uHlities including electrical, natural gas, thermal (water or air), water, stormwater, wastewater, garbage, etc. . ��1'�'�"�_ Glassary ARGUS: Computer software that assists the real Ecosystem Services: The conditions and processes estate industry in appraising goods and services. through which natural ecosystems, and the species that make them up, sustain and fulfill human life. Avoided Cost:This valuation method assesses goods and services that allow society to avoid costs that Ecosystem: A network of biological and would have been incurred in the absence of those environmental relationships. Ecosystems feature goods and services. naturel providers and beneficiaries that create goods and services.The flow of benefits through the Biomimicry: Built capital constructed in a way that ecosystem provides for natural capital. mirrors environmental processes. Externalities: An unintended and uncompensated Biophilia: Human affinity towards natural systems. loss or gain in the welfare of one party resulting from Built Capital: The goods, benefits, and services an activity by another party. provided by constructed systems. Examples include Factor Income: Valuing goods and services that bridges, roads, or buildings. provide for the enhancement of incomes. Cobb-Douglas: An economic production function Feebate: A reward for good practices by reimbursing that calculates the relationship between the output partially or all fees collected. Feebate programs of the firm(s) in question and the quantities of the are intended to discourage a certain practice while input factors the firm(s) uses. encouraging a practice that can replace the original. Contingent Valuation: Hypothetical estimates of Green Triple Net Lease: A lease agreement that prices of nonmarket goods and services based on provides incentives to the lessee (the tenant) to survey questions asking how much one would be operate in a more environmentally friendly manner willing to pay for an extra unit of the good, or how �,,here the tenant is solely responsible for all of the much one would accept for the loss of a unit of the costs relating to the asset being leased in addition to good. the rent fee applied under the lease. Debt Service: The budgeted repayment of loans. Group Valuation:This approach is based on Demand Charges: Energy charge based on the principles of deliberative democracy and the highest demand.Those periods of highest demand assumption that public decision making should will result in the highest charges for energy. result, not from the aggregation of separately measured individual preferences, but from open Discount Rate:This rate addresses the time value public debate. of money. It determines the present value of future cash. Hard Costs: The costs of actual assets. Ecosystem Goods:Tangible, quantifiable items or Hedonic Pricing: Valuing goods and services that are flows, such as drinking water, lumber from trees, fish, reflected in the prices people will pay for associated and food. Most goods are excludable, which means Soods. that if one individual owns or uses a particular good, Home Owner Association:An organization that individual can exclude others from owning or of property owners that manages a housing using the same good. communit Y• Human Capital: Includes acquired knowledge Sxial Capital: The social networks and through education, self-esteem,and interpersonal relationships that facilitate the flow of goods and skills such as communication, listening, and services. cooperation as well as creating individual motivation to be productive and socially responsible. It is well Terminal Cap Rate:The expected resale value of a recognized that education and training are essential building or property at the end the period in which to economic growth, innovation and a high quality of it is held. life. Travel Cost:This is another valuation method. Hurdle Rates:The minimum rate of return expected Service demand may require travel,which have on an investment costs that can reflect the implied value of the service. Impact Fees: fees placed on a property owner or developer by a governing body to offset costs Vacancy Rate:The ratio of unoccupied assets imposed on the public. available for rent to the total amount of assets available for rent. Kilowatt Hour: A measurement of energy equivalent to one kilowatt of power used for one hour. Living Building: A building that generates all needed energy using clean, renewable resources; captures and treats water through ecologically sound techniques; incorporates nontoxic, appropriate materials;and operates efficiently and for maximum beauty. Loss Factor: A ratio between the total square footage not available for rent in a building and the total square footage in a building. Marginal Product Estimation: A valuation method in which service demand is generated in a dynamic modeling environment using a production function (Cobb-Douglas) to estimate the change in the value of outputs in response to a change in material inputs. Market Value: The value of a good or service that arises in a transaction as the result of supply and demand of that good or service. Natural Capital: Stocks or funds provided by nature (biotic or abiotic) that yield a valuable flow into the future of either natural resources or natural services. Rentable Square Foot: All area that is used and shared in a rented building. Replacement Cost: Valuing goods and services that can be replaced with human-made systems. References 'World Wildlife Fund, 2008. Living Planet Report 10Seattle Public UHlities, 2011. Water System 2008. World Wildlife Fund, Zoological Society of History. Available at: http://www.seattle.gov/util/ London, and Global Footprint Network. About SPU/Water_System/History_&_Overview/ WATERSYST 200312020908156.asp (Accessed �Global Footprint Network, 2011. Global October 18, 2011�. Footprint Network. Available at: http://www. footprintnetwork.org/en/index.php/GFN/(Accessed ��U.S. Environmental Protection Agency, 2011. Sick October 18, 2011�. Building Syndrome. Available at: http://www.epa. gov/iaq/pubs/sbs.html (Accessed June, 2011�. 'The Natural Step, 2011. The Natural Step.Available at: http://www.thenaturalstep.org/ (Accessed "Loftness, V., Snyder, M., 2008. Where Windows October 18, 2011�. Become Doors, in: Kellert,S.R., Heerwagen,J.H., Mador, M.L. (Eds.), Biophilic Design:The Theory, °International Living Future Institute, 2011. Living Science, and Practice of 8ringing Buildings to Life. Building Challenge Available at: https://ilbi.org/Ibc/ John Wiley& Sons, Hoboken, New lersey. standard/ (Accessed October 18, 2011). "Leaman,A., Bordass, 8., 2001.Assessing Building sDaily, G.C., 1997. Nature's services : societal Performance in Use 5. Building Research and dependence on natural ecosystems. Island Press, Information 29, 144-157. Washington, DC. 14Batker, D., 2005. Supplemental Ecological Services eCostanza, R., dArge, deGroot, Farber, Grasso, Study:Tolt River Watershed Asset Management Hanon, Limburg, Naeem, Oneill, Paruelo, Raskin, Plan. Earth Economics,Tacoma, WA, USA. Sutton, vanden8elt, 1997.The Value of the World's Etosystem Services and Natural Capital. Nature 387, �sgatker, D., Harrison-Cox,1., Schmidt, R., Christin, 253-260. Z., Castegnaro, P., 2011 (In press). Washington State's Green Jobs Report. Earth Economics, 'Farber, S., Costanza, R., Childers, D.L., Erickson, Tacoma, WA. J., Gross, K., Grove, M., Hopkinson, C.S., Kahn,J., Pincetl,5.,Troy, A., Warren, P., Wilson, M., 2006. Linking Ecology and Economics for Ecosystem Management. Bioscience 56, 121-133. aAppraisal Institute (U.S.), 2008. The appraisal of real estate, 13th ed. Appraisal Institute, Chicago, IL. 'Seattle Public Utilities, 2011. History and Overview. Available at: http://www.cityofseattle.net/util/ About SPU/Management/History_&_Overview/ SPUHISTOR_200312020817523.asp (Accessed Juty, 2011�. • �� ,% \' I� \.1 �II/ `. �� The Integrated Real Estote Investment Model Tool can be accessed using the following link. http://www.eartheconom ics.org/FileLibrary/fi le/G reen%208u ilding/Appen dia/20A.%20Modeling%20Tool.zls • � — Photo Credits COVER PAGE 5 PAGE 6 PAGE 9 PAGE 10 PAGE 17 PAGE 26 PAGE 27 PAGE 29 PAGE 34 PAGE 41 PAGE 43 � EARTH ECONOMICS � � What is your planet worth? � 1121 Tacoma Avenue South www.eartheconomics.org • Tacoma, WA 98402 253.539.4801 Community & Economic Development Enlightenment: Asset-based vs . Needs-based NW Professional Development Partnerships .�i � - 7 �, � February 21, 2012 � 10:OOam — 11:OOam �;,�;�:-;: - . ._. ; .� '1h�_•�:,. .,' � _ ;'.'{�.��q+,.�_;r;.-. a � �.3tt' s.-a.�'t.. J�' . -R � I�'- � •'� '`�"'�"0 „�'". —:� Presenter: , ._ _ ,° � Jim Haguewood, Senior Member i � , .,�,:, ' • � �, � ';�;.,�� ' ;: R ^ , ,. '��.j� � Tl ll. Ecorzomy ��^� �w r �,� � � � ALI. I ;AVCE r . r '� � Ifllli'.1'IIU�NCl1l7l1/771'.COIY7 : � et r / . \ ... ". — � — �/ ! r�L ,L ffO110N1y L_. e:�Y011 ViTAL Economy, Inc. � I I I a N c L � � � Community Economic Development (CED) The process of creating or retaining wealth by mobilizing human, financial, physical, and natura/ resources (assets) to produce marketable goods and services. ��I G•TL ,L.Eranomy �02011 VlTAL Economy, Inc. — Z j I 1. I a �C 1. Webinar Goa/s and Objectives 1 . Provide a clear distinction between Asset-based and Needs- based CED methodologies 2. Define why Asset-based CED is empowering, long term, and sustainable — capitalizing on what makes a region truly unique and competitive 3. Show how regional asset mapping can create new opportunities, determine targeted industry clusters and drive outcomes 4. Be thought provoking. . . . persuade economic development practitioners that incorporating Asset-based principles and processes can help them achieve greater results �V Z TAL e�o„e,,,v �02011 ViTAL Ecoiromy, Inc. — 3 a I. I. I .a N L L � � Key Principles to Asset-based CED Success and Regional Economic Transformation Collaboration Share assets, talent, money, and knowledge to build sufficient critical mass fo compete globally, while communicating new opportunities to assure regiona! growth + Connectivity Enable collaboration by linking geographically remote resources to increase access, while creating business opportunities, economic diversification and wealth creation + Changed Spending Change behavior fhrough funding and budgets to increase regional productivity and revenues by opening up new markets and expanding opportunities �. , T�I.Economy OOY011 ViTAL Economy, Inc. —4 q I 1 1 n N C I Community Assets are One Component of a Disciplined and Integrated 21 St Century CED System Start Here! Determine Conduct Key Issues 8� Measurement Opportunities ��NOYATION . Establish Take Measureable Action � Goals Balanced Approach � , Target �'�TAEpR E N EO�S�\� Identify I nd ustry Indigenous Clusters Resources 8 Assets � Develop Leverage Strategies �V LTAL F�o„o„�y 02011 ViTAL Economy,lnc. — 5 ,� i l I 4 ti c �_ � Asset-based vs. Needs-based CED Strategic Categories Needs-based Asset-based Has a negative focus on Provides positive orientation; • problems; requires external mobilizes unique community resources characteristics Hands off control of design and Retains control of your economy — � � - � implementation to external resources & agencies (by local leaders) Relies on others knowledge & Strengthens confidence and CED . � � expertise, believing the cavalry knowledge and inspires local action is coming! Reinforces competitiveness, Connects existing resources & � ' � � ' � fragmentation and protectionism assets at a grassroots level increasing participation � Relies on shifting outside Identifies, leverages and sustains � resources, policies and decisions �ndigenous assets in the community's control Highlights liabilities and Leverages existing resources • weakness that limits growth and first; speeds growth and investment investment attraction Is at the mercy of shifts in state genchmarks the economy, � � � � and federal policy, timeframes and reporting not linked to the establishes goals and evaluates local economy progress regularly ��• , TAL E�a„o»,y 002011 ViTAL Economy,Ina — 6 s i 1 I n �c. 1 • • ' • � ' • ' . 11 • • � I ' . • � ' 1 • . . • . • Natural Human/Skills Knowledge Cultural/Hist. Geographic Excellence Infrastrueture Government Innovation Industry HoW c�n the What is the value Who will bel�e�it What resources Relationship? resource be of the leverage? fram the are missing to leveraged? leverage? fully leverage? , � � Keys to Implementing an Asset Mapping Process • Utilize broad-based, cross-sector representation of the regional economy at all Asset Mapping sessions • Foster a "wide-open" perspective, quantity over quality during Asset Mapping discussions • Analyze and develop strategies for all identified assets utilizing the five Development Questions (Slide 7) • Take action on "Aha moments" — assign an empowered action team to further develop unique assets with short-term potential to build momentum - . - - s • - . � - - • - • - • � . � • • � s • - • • . • - - • • ��/l T�L. E�anomy 02011 ViTAL Economy,Inc. — 8 � 1 I. I A �C I. Assets Inform Leverage Strategy & Targeted Industry Clusters Targeted industry clusters and market sub-segments with an indigenous competitive advantage are identified through the asset mapping and goals filtering process Targeted Industry Ciusters Indigenous Resource Mapping . , , , . . . Aroostook High Value 2015 Goals Agriculture t � PRELIMINARY' �,s�� newjobs @ - CLUSTER Sa2,000 � . : - LIST � 1,118 newjobs @ X E38,5o0 Natural Resource � Forest Resources x« Improvement of Tou�ism Agriculture ��x s,sza�obs �X by$5,OOOlyr. � Healthcare x r. x Tourism �;�X $365M new wages r.x i ! 1 � Information Tech kkk Increase Intemet �� Subscriptions Ru�al Hi he� Education � to 37,500 g Manufacturing x Education � ' � Reach Regional Cnergy GDP of SZ•$B . . . 27.7% Private Payer Healthcare Reimbursements ��/�,nL f�o„a,,,Y �020f f ViTAL Economy, lnc. — 9 a i_ L � a �<:�: � � � Community & Economic Development Enlightenment: Asset-based vs . Needs-based Case Studies Aroostook Clallam County, County, Maine Washington � �� =_ � . ,—�: - ..�_ _ , �r��nr �� .: z : , .. . . ` •�K � - ��. y''` E'r`I� � '_�j.` - �i � ��s� ^' � �- p� p„ y� i'�.��4 ��; t: :� �^ � { = �_, , � ,• ' -�t �� SSS �� t_, � E a � \�- C T �� ; � Y � i � . �� =;�� , ,. �-_ ; � .- . . . r M .f��, .° __.-�..�-- � � � a. � _ ,. �vLZ I�LErononty �02011 ViTAL Economy,Inc. — 1� q I. I. I A N C I: OBICIZE, Aroostook County, Maine Case Study (2010-2011) MAINE • 2nd highest level of poverty in Maine • Energy cost burdened twice the US average (9.2% vs. 42% 2007) • 13 commercfal installations, project cost • 62% homes heated with oil. export value $40.6M S19M, net savings �2.1M/yr • Declining population • GreenME JAIC grant award, $1.9M, over $1M private match • $12 private award, NMCC, largest in Maine 1 • . history for Center of Excellence Aroostook • �1 6M new capital for a pilot grass pellet mill County, Maine ' 1,677 jobs @ $42,000 • 12x1 investmenl leverage since 2010 • 1.118jobs @ 538,500 • Improve 6.628 jobs by $5,000/yr. ':" _ • Grow lhe County GDP by $900M/yr . �:�'r:�i,,;�r:=. • _ _j'tJ r� � • Renewable Energy Strategy, 4500 homes. �y ,, 10 commercial units, Center of Excellence '`� • All elements of biomass energy value • Renewable Energy Economy , chain • $69.9M impact per year • Abundant and available wood biomass � • 95,000 acres of available farmland for 'y�� grass production • 45,000 tons of wood pellet production � �""'T capacity • Ready residential and commercial • Renewable Energy market • Rural Higher Education - • ' ' • • IT Operation Centers • High Value Agriculture • Use small portion of 2 2M tons of wood harvest for biomass energy • U Maine Cooperative Extension grass biomass R&D • Use 45,000 ton wood pellet plant to serve local markets, lower cost • Three biomass generation facilities for local electricity production • Expand the regional funding entity NMCC for residential installations • Tap the local knowiedge & entrepreneurs � ' _ �� _ � ZTAL v�o�,a„�y 02011 ViTAL Ewnany,Inc. n 1. I. 1 n N C L � Clalla Clallam County, Washington Case Study (2000-2005) I�e�Vorks • Geographic remoteness • Retail sales growth. 4x between 2002 & 2004 ' Low average wage, 66% of the State • Average wage increased from 66%-71% of the Slate • Lack of collaboraiion and acceptance of economic decline • 1100+ new jobs and $667.SM in new GDP impact • Declining natural resource industry o • Highest healthcare public reimbursement rate in the State, 73/o • Washington state distressed county list, 2002-29'h, 2005 - 16�'', • Dramatic decrease in access to commercial capital • 5x1 investment leverage Clallam County � � , ` I • Washington • 2 285 jobs ^a 540,000/yr. • Attrad Westport Shipyards. 50 meter. S30M • Improve 5,000 jobs by $5,000/yr yacht production facility — . • Increase wages by $294M/yr • 400 @ $40K+ jobs inGuding cabinet shop _-- _ -- —� • Expansion of ShoreBank Enterprise Cascadia (CDFI), $3M new capital - - ` • Attract a $17M Port Angeles Hardwood mill � � { • -�,,h` � • 120 jobs @ $40K plus benefits. _ � -- • Pacific Coast Red Alder species • Available trained marine workforce • Heavy hall out, available waterfront land • — - -- • Protected harbor • Proactive, flexibie Community College • Marine Services • Forest Resources , � - - � • Education & Training • Information Technologies • Wood rnanufacturing value chain. bring processing back to region • High Value Agriculture • Indusiry cluster teams creating B26 relationships • Experience Tourism • Regional economic development initiative with positive communication strategy • Apply marine services workforce to emerging recreational markets ` �. � �VLT11L E�o„o,,,y �02011 ViTAL Ecoiwmy. Inc. — 12 — r L L I n u C t. Challenges and Solutions for Asset-based CED . - • - � • • Needs strong private sector ldentify personal and/or participation and leadership organizational ROI for each participant Challenges status quo and current Build broad-based empowered power structures — resistance to coalitions, leadership and action change teams Needs new collaboration among Utilize collaborative funding where public, private & non-profit sectors everyone has "skin in the game" Define clear measureable goals & Requires new behaviors accountability; benchmark economy against trends Use business-case strategies and "We've done Asset-based CED" action plans to foster short-term wins & build momentum ��•TAL F.rormmy - 13 - �0Y011 ViTAI Economy, Inc. n I. I. I A N c� f. • � • Conclusion: Asset-based CED initiatives produce long-term sustainable benefits in a short period of time How? #1 - Build and empower leadership #2 - Leverage assets in your control #3 - Co//aborate like never before, and #4 - Take action like you have nothing to /ose /• , ��/�T1 ,L.F.cono�ny 002011 ViTAL Economy,Ina — 14 ,� I 1 I n �t. I ` V" � O � � V"� 1� Q & A � Jim Haguewood jim@ onegroupconsulting.com 360.457.8111 _,,,== �, � P� � � ,.� �p\� ��\'LF' `�Hp3 0�\��'L Q�\4 `� FV.... .. o�t� pt !t' Pt�, , \r<1 ,;�G . � . - S�(i � � � ��:j"�_ ._. _ www.vitaleconomy.com ��TnT.F�raionry <02011 YTAL Ecorwmy,lnc. — 15 — :� I 1. i A N c.1. COIJ I\ICI L RETREAT 20 � � session 4 SPECI �IL fVOT� Attached is a copy �f the survey that was sent �ut to Ioc� O business�s. The results will be a p� rt o� session 4s Auburn Business Suivey 2012 Page 1 of 3 �ECONOIdIC DEVELOPMENT I CtTY OF AUBURH,�7ASMINGTON SITEI9AP �CONTAR US e � � D HOME CONDUCTINa BUSINESS BUSINE55 TOOLS COMMUNITV PROFiLE INNOVATION PARTNERSHIP 20NE . _.. .. . .. ... . . . .. _. .. .. .. _. _. . ... AUBURN BUSINESS,SURVEY 2012 To assistYhe Aubum Ciry Councll to bef[er.support business In Auburn,O�ease answer the fallowing questlons: Pape 1 of 3 � 1.How long has your company been oD.erating in fhe Cily oT Aubum7 2.Why has your company �'i Auburn Is my home town ri Small town character thosen[o be in Auburn7 (please[heck one or more) r A bellef In the fuCure of thls City r�Reglonal locetlon r Produc[OlStribuNon(Rell,Port,Ttutk)r�LOCeI gOVernment 5erv1[e5/a[tl[ude r Avallable IncenNve programs r Close to other Ilke companles (i Public Iransportatlon r�Across to tralned yrorkforce f i Access[o goods&servlces r�Local market needed my.servfces r Proximlty to MunlclDal AlrOort r 7rozlmlty W freeways 1 i A great piace tb do buslness r No local B&O taz I��SCAooI sys[em G OJerall tost of doing 6u51ness Other: 3.Whnt nre the challangea ' of doing business in Auburn7 ri 7raffic r Local goJernmen[servlces/a[tl[ude (plcaae check one ormoru) r Workforce r�Wck of vltality ri Locatlon r'Small town r Local Marke[r.Crlme O[her: 4.Now would you rate the r 5-Ezcelen[ City'e aupport of buslnass � � and why7 f�q-Good �%3-Average �%2-Falr �% 1-Poor Please explaln your rating: hitpJ/www.auburnwa.gov/page7903.aspx 5/9/2012 Auburn Business Survey 2012 Page 2 of 3 J 5.Pleaee reta any ol the following business servtces have you received irom ttie City recenNy. PlanMng C Eeccellent Service r Averoge Service r�tmprovement NeeCed Permlttlnp/licenslnp f Escellen[Servke ��Average Smfce �'Improvemen[Nee0e0 Training C Excellent Service r Average Service r�Improvement Needed Economlc Development C Ezcellen[Servlce r Average Service r Improvement Needed UtillHea r Excellent Servlce C Average Servlce ��]mprovemen[Needed Publk Iatormatlon f�Excellent Service r Average�SeMm r�Improvement Needed Poll�e Services f Ezcellent Servlce �pverage Service r lmprovement Needed Coda Enforcament C Excellent Servke r Average Service r Improvement Needed Educatlon ('��Excellent Servlce r�Average Servlre f Improvement Needed Bultdlnp Inspectlon C Excellent Service r Average Servke r Impmvemen[Neetled Public Works C Excellent SeMce r Average Service r�ImOrovemen[Needed � Emerpenty Servlce C Excellen[Sefvke f Average Service r•[mprovement Needed Other. 6.What coultl the Clty do to - help�inake your buslnees more auccassful7 J 7.What bueineas(es),elther In"your Industry or outcide - or�our mauc�ry,wouia you Ilke to�eee In the City of Auburo thet Is currently not IocateA hera7 Woultl having ' thls buslness(ee)help your ,J compeny anE 1!so,how7 6.Any additlonal commenls: r J http://www.aubm•nwa.gov/page7903.aspx 5!9/2012 I Auburn Business Survey 2012 Page 3 of 3 `� 'l::i':s�f.; . ;�'� 5 � Please enter the eharsotere ou see In the picture: � . (No[e:f/you canno[read the numbers!n Mt above Image,dlck Me re/resh buKon to generate a new one.) � Mome I ConUucting Bueineaf � Buclnesa Tools �Community ProNe I Sltemap I Tarms of Use A' ' . � fWgU� � � �,,.........:.* http://www.auburnwa.gov/pa�e7903.aspx 5/9/2012 Councilmember Name: Auburn City Council Retreat May 17-18, 2012 Survey for Session #4: Visioning Exercise—City of Aubum Key Business Sectors Session #4 is intended for the Council to brainstorm and identify the City's Key Business Sectors that will form fhe Ciry's long-term economic development priorities for the next 20 or more years and direct business recruitment and retention, community marketing, policy development and implementation and capital investment. To help fhe Council prepare for this Session, staff is sending out this survey questionnaire in advance of the retreat to allow fhe Council to think on and prepare for fhis Session. PLEASE bring this completed survey to the retreat. TERM DEFINITION: Key Business Sectors = Business sectors (e.g. aerospace) or subsets of business sectors (e:g. aerospace parts manufacturing) iden4ified by the City Council as a future focus for economic development and capital investment efforts. 1. What are Auburn's assets? 2. What are Auburn's strengths? 3. What business (es) exist in the City to.day that:you believe the City should identify as a Key Business Sector (s)? 4. 1Nhat business (es) do not exist in the City today that you believe the City should identify as a Key Business Sector (s)? 5. The year is 2050. Using words, phrases or sentences, describe your vision for Auburn's economy in the year 2050 with particular emphasis on the Key Business Sectors that you think w'ill define the City's economy at that time. Other Gomments: Auburn Environmental Park and Green Zone Strate�y Area � IM1iM51NW /i I [nCMLU�OWnS aC0.0 nw 1 \ ITn uV \` � \ / Z \ � �£ �I /� I . .. i I � � 3 � � I 3 S InitIST NW I 1 I I � � �no st Hw Is � s / ,. . .__— —.. . / j/ � wmewsr I / � - I I � 1 / = . � -�� JflU4T vw / / / ;i r' � ,I, . � '� � �� - - -_. . _ . �.` � � .-- _ - � ��=-�- -- --- �J �� r � - � �� - � AUDum Environmental Park Deaelopable Area U � Green Zone Boundary _ �I � Potential Environmentaf Park Distnct Expansion Area - u � Potential Urban Center Expansion Area or Environmental Park DisMct Enpansion Area I�I s 4. � �=�rr�w � Urban Center Strate�y Area uni sr e�e ��NVFYp�NI 3 S 191HSiHW II � I � imn s�Mt 11 l�f HiH SL Nf / / ]POSTNW ]POSTNE � .�— �— I I I I t� z 3 � z ' �II / W M�W$i � � E M<IN$T i 3 3 _= ]FO STSW . lPO5T5W 1RDFSf ' �ROSSST�. . _ rtH ASE . _ �—1 � �� — � Urban Center Extended Area Per Ewnomic Developmen[5[ra[e4ies INov.2005) / I —. i � � Ur�an Cencer � erNsrsc __- � Potential Urban Center Expansion Area or Environmen[al Park Dis[rict Expansion Area � � U . , . \�r- � . . � � s�,azai; "�\ �no . . . . . . .. ., � North End Strategy Area � � � �� -- — _, � ,_ � - , - --- ; ,; �� j � I Q \ I � ; I I I � , � II .�.Il � ]nMSLMW �- — 1nH5iNE Illi II ; I� 3 g o �1 3 '� � � I ` I � ' IpiM Sl N W. • �_y � \�•� „ I � North End Strategy Area Per Economic Develo0ment Strate4ies 1Nov.20051 - �sn�,»�- ' uTn s�«w � � PCDC Recommended Focus Area - u - �� a � �� .��; •��-�� ;v>; � .-�atmn,hownisioiecn�.,�.'.r „ ioT1STxE . . ...,, .�, ..�.i,.� .. � g .ni�inr nnl n f n . . � .r _. b n � . , i �.. �.. � ', , q�, qiM Sl NE � A Street Corridor Strate�y Area ,_ � lRp5T5W lqO5i5f � � �RqtissrsC � T�X(T tiE � �—1 \'� � — ��, — _ �I _ U � 6TM ST 5II[ � I 7 I I � � F ul I � 9� �R h ky` s _. ._ — - - isre s*sw 4 oT i 2�,4 / • / I I 39THSTSE II I I i �;. IIlIN�4 N .w � <15T ST SE y'� . . .. . .. . .. ��.,,.. I �a�� 15th and C Street SW Strategy Area � �aosr�w �xosrsE °USLEYCSH �� . �Rdp �� 1 p � � � �`\ ��,/ — `IO � — / . . `` \ � � , `v/T� � � S 3 I O-�L � _ _ �Y / ,/ � . - - .- ' -- t5*nslsw �� / M � ti / O OP I�� :'/ ~T . / �� Y l I I I I I� : / / T —..- �C and 15th Strret SW Strategy nrea Per Econanic Devetopment Strategies INoe 2005� �„- � PCDC Remmmended FocusArea u \ � aRiSTsf. �:E 1I'�. �� \` � ` � � � � Golden Trian�le Strate�y Area ,o,�sT�,� ��. YlH q� nN ry� f C SE 4UTN ST BfX ST NE SE)30TH 4 Z ]PO4NE J�� : g i _�.L—. . EMPMSi _ . � � z lq0 ST SF <ROSSST gt. .. <TII ST SE 9GflLqN� 9�ko 4ya N � � q�l��v--*� � k._r ._r:�'-��..__:..._ ir� _- ,.�=r�� _ _ __ -�_ ' � � � � i9 ,� 1]lNSTSE a \ ....�., .:, \¢ I O~ }t W E9Tn A SL NIVEFWILtl OP SE �Golden Viangle Sva[egY Area Per Emnamic Development Stracegies INov.20051 � I PCDC Recommended FocusArea u _ r,� I,.. I . . ,nown�s Ioi qeneiai..,.� .�, i � 312th Street and 124th Ave SE Potential Economic Development Strategy Area SE IOqTH ST � . �.._ . - SEII]fHSi I]LNO waY Sf sr nanu s — _ / / \�J ... ntitm�•r i �n �,.n.�� , M Street and Harvey Road Corridor Strate�y Area _ : a �� . -, �6TH ST NW \ ISiHSTy 8iN ST NE - iatNSTNW. � a iv o y �� 9a � � \ I ipTX Sf NE �y \ JJ HA 1 Sf IIOIHSi BTN TT NE � \ II I � = 1 � _ ' lPOSTNW IqOSTNf j I 3 e S U Z I a I . � E M�IN Sl WMIINST� - ., - 3ftO5T5w )qO5T5C ' .CNOf55TII �(y . - � i!H ST SE QpHb ~�t0 ____ _ _ �I' ..- . � . � i ., � ��S I _� � I F I F _ � i. � .4TN Sf SE. 7 - � I \ \___ .__-.. i ll I V I G� 9� i J '� �Tn Si SE /¢ � / �_✓ �� • � z Lake Union � . �`. _^�;....r.^ . � .�- - �' � :=�.�__ '� 'r � _ � ` _� _ T � � ` �- .� y'�� ' � S -. . ,ry�R� i'- I r _ _j � I .. '+a �.-- . ' 't " ��Ci'��i-� � k��:y.�+k� '-. t .a �t ♦ ' { .:_"i� 1 � �i �'lr._-� i� � 'R�, .,.r / y. ! . "��1�'�� :. � � "�!' s'� ,, t � M •, !'r . `�y �} �l yW � � �� X�� i ._ �' _ • Potential Economic and Fiscal Impacts of South Lake Union Development Final Report July 13, 2004 Paul Sommers, Ph.D. • Potcntial Economic and Fiscal Impacts of Suu[h Lake Union Dcvclupment 7/13/2004 Paul Smnmcrs, Ph.D. Introduction This report assesses poYential impacts to the CiTy of Seattle, and other public entities in Washington State, from thc development that is underway and proposed for the South Lake Union area. The boundary of the area induded in this sYudy starts at the intersection of Interstate 5 and Denny Way, fbllows Denny Way to Aurora Avenue, Aurora to Galer St., Galer to Lake Union, around Lake Union to E. Nelson PI., and E. Nelson to I-5. In ]994, this area was designated a Hub Urban Village in the City of Seatde's Comprehensive Plan. This report �as released in draft form in December 2003. A peer review generated suggestions for changes to the draft. Their changes are reFlected in this final mport. The Neighborhood Plan 1br the area was completed in 1998. That plan focused on development of South Lake Union Park, traffic mitigation, and pedestrian improvements in the area. SabsequenCly, in response to growing development pressures, the City of Seattle commissioned a sfudy of South Lake Union to evaluate the development potential within current zoning. In April, 2002, the consultant— Heartland—produced a mport� estimating the development potential in the area. The Heartland estimates form the core assumptions for the financial projections in this report. ln the 2002 report, Heartland described a potential net increase of 7? million square feet of commercial space in the area from the baseline year 2000 to 2020, providing a potential of more than 23,000 ncw jobs. At the same time the report estimated that the number of dwelling units in the area could increase by 10,963 in the sa�ne period (this reporl� uses 10,000). The consuLYants assumed that new and expa��ding biotech facilities would be the core of the new development, and esrimated thal 35% of the new square footage would be ior that use. Since the completion of that study in 2002, property owners have begun construction or announced projects in the South Lake Union area that total more than 3 million square feet of new development. Biotech is, in fact, a dominant use in that new development, suggesting that the original concept of developing a major biotech center in South Lake Union is feasible. This reporC deals only with the financial consequences to Che City of Seattle and Washington State public agencies fi�om the redevelopment of the South Lake Union area. ft is based on the projections generated in the 2002 Heartland study. Development to date suggests that those projections are likely to be realistic estimates. In addition, the reporC takes advantage of information about development underway in the region, projects that started or entered the planning process afrer the coinpletion oY the Heartland report. ' Permir reviex�and rnohi(in•pilot SoutJa Loke Unron. Progress report by Hcartland for City of Seatde Strategic Planning Oftice, Apnl 2002. 2 Potenti�l Ecunoinic and Fiscal Impacts ot South Lake Union Devclopmcnt 7i 13I2004 Paul Sorruncrs. Ph.D. • The potential growth outlined in that study was adopted as a basis for creation of a model to estimate the economic impacts of the anticipated developmeot, including changes in employment and output within the South Lake Union region as well as employment and development stimulated by the South Lake Union projects. The associated tax revenue to the City constitutes the economic impact summarized in diis report. The City and statewide revenue is estimated from 2005 to 20?5 in current dollars and in net present value tenns. Methodology This analysis is based on the Heartland scenario, taking into account what is actually going on in the neighborhood to date. Redeveloped space is uanslated into job impacts using ratios of the number of employees per square feet of commercial space, and assumptions about the type of tenant occupyine the space. Biotechnology laboratory � tenan[s have different space requirements than an office or retail use, so an average of these different uses is used in this report. These new business activities in South Lake Union will stimulate further development in the region through the multiplier process that results from the purchases of South Lake Union busincsses as well as their payrolls. The many details about current and projected development, space requirements, and multiplier effects are discussed in this section. Phase 1 and Phase lI • The revenues described below are estimates at this point, but the tirst phase of development is in the planning stages and major tenants are lined up for many of these projects. The impacfs of this phase of development are reasonably predictable. Given that, this report first estimates the potential Ciry revenue from development now planned "Phase I", and then looks at the total revenue expected from the total potential development described in the Heartland report. The difference between the final total assumed in Heartland and the Phase 1 development now underway is called "Phase II" in this report. The Phase I[ development is assumed to occur evenly between 2008 and 2020. Phase 1 development is completed, underway, or well into the planning stages. The p�obability is quite high that all of the Phase I developments will be completed and put into service by 2008. Phase 11 development is less certain since no firm projects have been announced. Accordingly, two scenarios for Phase II are analyzed in this report. A full build-out scenario is considered in which the final Fleartland totals are reached by 2020. In addition, a very conservative partial build-out scenario is analyzed, assuming that only 50 percent of the full build-out scenario of Phase 11 is realized by 2020. The two scenarios — partial build-out and full build-out— cover the likely range of build-out outcomes. The degree of build-out in Phase II may be affected by whether the City of SeatNe and • other governmental units invest in the infrastructure in the area, including transportation 3 Potential Economic and Fiscal Impac[s of Suuth Lxkc Union Dccclupmcni 7�13�2004 Paul Sommers, Ph.D. improvements, expansion of electrical capacity, and park investments. These and other proposed infrastructure improvements would make the neighborhood more functional, accessible and attractive, thereby incrcasing the likelihood that private sector developers will be able to identify potential tenants to justify the construction of the substantial amount of new space implied in Phase ll. Direct and Indirect Impacts This study indudes both direct impacts: the current and projected development in the area and the likely increases in employment as these buildings come into service, and indirect impacts: the mu]tiplier impact of the direct impacts resulting from the purchases of goods and services by the business occupants of the new buildings, as well as the purchases of goods and services by the workforce employed in the businesses occupying these new buildings. An input—output model of d�e state and local economy is used to estimale the indirect impacts.� Adding up direct and indirect impacts yields estimates of total impacts. Use of the input-output model requires some additional key ass-umptions. First, in using this model, it is necessary to assumc that the underlying inter-sector business relationships captured in the model have not changed in the years since the model was estimated. Given the pace of technological change in the last 17 years, this assumption i could be challenged, but it is necessary in order to have any estimate of indirect impacts. There is no available model based on more recent data concerning the structure of tUe economy. The degree of potential error in the indirect and total impacC estimates is therefore hi�her than for the direct impacts. Second, a key issue is how much of the indirect impact� will occur within the City of Seattle itself. The model estimates indirect impacts within King Counry only, from whicl� indirect impacts in Seattle are extrapolated (below). This report does not attempt to capture indirect impacts outside the City oY Seattle. A large portion of the impact comes through purchases from the services sectors by either businesses or consumers. Neither business nor consumers typically reach far beyond their local marketplace to find service providers except in the special case of services delivered over the Intemet(e.g., customer service is increasingly provided for businesses by distant companies). Since there are no published data on the geographic distribution of services purchases by Seattle businesses and residents, a sensiti�ity analysis approach is taken in this report. The results from the King County model are apportioned to Seattle in two ways. ,A lower bound estimate of indirect impact (low indirect impact scenarios) is derived based on Seattle's proportion of total Kin� CounYy pupularion (32.1%). For high indirect impact 'Chase, Robert A. ,Philip Bourquc,and Richard S. Conway. Tlre 1987 Washi�igron Slate lnpur-Oairpnt Srenfi�. Report for Washington State OFtice of Financial Management,by Graduate School of Bu.ines+, University of l�'ashinglon. Seattle. September 1993. An unpublished version of thc input-output model that cstimatcs impacts within King County is used in this analysis; this version was created by Prof. William Bcycrs at University of Washington. 4 Potential Economie and Fiscal Impacts of South LaAe Union Development 7/13!:�04 Paul Sonuners. Ph.D. • scenarios, these low-end estimates are doubled on the assumption that a higher proportion of services are purchased from local in-city suppliers (64.2%). This higher indirect impact estimates provide a high end, but still reasonably conservative estimate of indirect impact. It is conservative in that one could argue that essentially all service purchases by Seattle businesses and consumers will go to nearby firms and that many specialized providers will be found only in the largest city in the region. With two build-out scenarios and two indirect impact scenarios, a total of four scenarios are considered in the analysis that� follows. The cl�art below shows the definition of these four scenarios, labeled and defined as below: A Full build-out; High indimct impact B Full build-out; Low indirect impact C Partial build-out; High indimct impact D Partial build-out; Low indirect impact Direct Impact � Indirect Impact � � � � i Scenario • i H�9h A Phase II 2008-20 � Indirect Full Build-Out i + 4.99 mill. sq.fl. + I 910� housing � Low B units � Indirect I Heartland Scenario Phase I 2004-07 i 7.2 mill. sq.ft. net+ 3.043 mill. sq. ft. � 10K housing units 893 housing j units i Phase II 2008-20 � High C Indirect Partial Build-Out I + 2.5 mill. sq. ft. + i 4554 housing units i Low D i Indirect • 5 Potential Ecunumic and Fiscal Impacls of South Lakc Union Dc��dopment 7�13��?004 Paul Sommcrs, Ph.D. Build-out and Indirect Impact Scenarios The public sector financial benefit estimates presented below are based on tl�e development in Phases I and ll (2000—2020), followed by a five-year period (2020- 2025) of Full occupancy, but no further growth. Current tax rates are then applied to estimated emp]oyment levels under eacl� of the four scenarios defined above. The resulting tax revenue estimates are presented for the City of Seattle and for all public jurisdictions benefiting from South Lake Union development (City, King County, Wasl�in�ton StaYe, Seattle Scl�ool District, and Port of Seattle). Assumptions Commercial and Residential Development The first set ofprojects in the South Lake Union area announced by property owners (Pl�ase 1) will provide space for University oY Washington research laboratories, other research institutions desiring expansion space, commercial biotech companies, an architectural design company, an international retailer, office space for other tenants, restaurants and other retail, and a number of residential units. Some of these projects are in the planning phases or have permit applications in with the City; others are under construction. Tl�e buildings will be completed and enter service by 2007, including several as early as 2004. They will add over 3 million square feet of commercial, retail and residential space to Che area. Sometime afrer the completion of these projects, a second phase of development is expected to begin in the South Lake Union area (Phase [I). The projected build-out of Phase ll (with the existing Phase [ buildings) will total a net increase of 7.2 million square feet of commercial space, 35 percent of which is assumed to be designed for biotechnology research and development uses, with the remainder in a mix of commercial oftice (55°/o) and retail uses (10`%). In addition to the commercial development, 10,000 residential units are projected to be coostructed in the South Lake Union area through the development of 7.7 million square Yeet of new housing units during Phases 1 and I1. Estimates for both commercial and residential development are clearly speculative for Phase I1, but they are based on the best information currenCly available. The table on the next page shows tlie esti�nated new development in Phase ►, and in Phase Il under both full and partial build-out scenarios. The 3 millio� square feet coinpleYed in Phase I will be followed by a total of 11.8 million of commercial and residential space under the full build-out scenarios, or 6.7 million square feet in the partial build-out scenarios. 6 Pote��tial Economic and Fiscal Iropacu of South Lake Onion Developmenl 7�1320U4 Paul Sommcrs. Ph.D. • Estimated Net New Additions to Developed Space in South Lake Union Neighborhood by Phase (million square feet— net new) Full Build-Out Partial Build-Out Scenarios A& B Scenarios C 8 D Industry/Use Phase I Phase II Total Phase II Total (2000-2007) (2008-2020) (2000-2020) (2008-2020) (2000-2020) Scenario All A&B A&B C&D C8D Biotech 1.382 1.138 2.520 0.569 1.951 Offce 0.708 3252 3.960 1.626 2.334 Retail 8 hotel 0.120 0.600 0.720 0.300 0.420 Commercial Sub-Total 2.210 4.990 7.200 2.495 4.705 Residential 0.833 6.830 7.663 4.215 5.048 Total square feet 3.043 11.820 14.863 6.710 9.753 Other key assumptions were derived from development companies and prior smdies of the South Lake Union area. These assumptions include: • Average assessment value of biotechnology research space--$251 per square foot • • Average assessment value of commercial space--$201 per square foot • Average assessment value of residential space--$100 per square foot • Residential units will average--750 square feet • Land costs represent I S% of total development costs. This 15% is not subject to thz sales tax on construction. • Phase ll development will be completed in even annual increments and will enter service (and enter the tax base) from 2008 to 2020. � • Future inflation rates are unknown and the analysis is conducted in 2005 dollars, with a real discount rate of 3% used to discount future impacts; this discount rate retlects the long-term growth potential of the economy. • Tax rates and utiliry fees will not change and therefore current yields per square foot or per employee in comparable space can be used to estimate the Ciry's future tax and fee revenues.' � Ciry financial policics call for the use of a discoun�rate that approximates the inflation-adjustcd marginal pre-tax rate of rewm on an average investment in the private sector. The local economy has historical ly � grown faster than thc nation in recwt decades,and ii may tend to do so once thc current recessionary � period ends. Alsu, the long term gmwth rate of the national cconomy may havc inereased from a histoncal trend rate as a consequence of new technology and higher productivity growth rates as seen in the late 1990s. 'Deta from Cify of Scattle Finance Dept.and Canrnons/Sou(h Lake Union devclopmenl fsca!impncl • ann(vsis,report for the City of Seatde Officc of Management& Budget by Gibson Economics Inc., Novembcr 1994. 7 Potenlial Economic and Fiseal Impacts of South Lake Union Develupment 7�13/2004 Paul Smnmers, Ph.D. • For a mix of biotech, commercial office, and retail, an average of 3?9 einployees will occupy each 1,000 square feet of space as assumed by Neartland in their 2002 study of the South Lake Union area. • Each million dollars of construction will require approximately 7 construction workers; this assumption is derived from the input-output table. These jobs end when construction ends in 2020. • With 35% of the 7.2 million square feet of development assumed to be biotech research and development space, the remainder will be $5% office and 10"/o retail space; these assumptions reflect the pattern established in Phase I to some degree and are consistent with the Puget Sound Regional Council's long range projections for the area and surrounding neighborhoods. Any of these assumptions could be easily modified by analysts who wish to consider alternative scenarios for future development of the South Lake Union region. The value oY this study is in setting up an analytic framework that can be used in sensitiviry studies to explore the implications of altemative assumptions, or to assess the impact of changing development pattems as market conditions unfold over the next 16 years. Direct Impact.s Direct impacts include employment and the fiscal impacts to ciCy and other governmental units benefiting from the projected development within the South Lake Union neighborhood. Using tlie assumptions above, the following direct impacts are projected. Employment Employment in biotechnology research, business services offices, and retail establishments located in new buildings within the South Lake Union region is prqjected to increase by 6,409 as a consequence of the first phase of development from the present to 2007. By 2020, employment within future new facili[ies in this area is projected to increase to a total of 23,710 under the full build-out scenarios. Under the 50 percent partial build-out scenarios, employment increases to 15,059 by 2020. These employment growth estimates reflect only direct impacts. Indirect impacts and associated employment are discussed later. An average of 628 construction workers wil I be needed for three years for buildings coming on line between 2004 to 2007; this average for Phase [ includes the entire workforce required to build the Phase 1 structures even if construction started prior to 2004. A construction workforce of 753 is assumed for each year from 2008-2020 for full build-out. In the partial build-out scenario, the construction workforce is projected to be 376 from 2008-2020. 8 Potential Economic and Fi,cal Impacts of South Lake Union De��elopment 7i 17/2004 Paul Sommcrs, Ph.D. • Job Creation Estimates for New South Lake Union Buildings Full Build-Out Partial Build-Out Scenario All Scenarios A& B Scenarios C & D Industry Phase I: Phase II: Total Phase II: Total 2004-07 2008-20 2020 2008-20 2020 Biotech 3,159 3,141 6,300 1,571 4,730 Office (Business Services, 2,518 12,213 14J31 6,107 8,625 Financial, Real Estate) Retail 732 1,946 2,676 973 1,705 Totalpermanentjobs 6,409 17,301 23,710 8,650 15,059 Construction (per year) 628 753 376 Total: 7,037 18,054 25,091 9,026 16,063 construction + permanent Fiscal Impacts Fiscal impacts are estimated using curreni tax rates. Estimates are run out to the year 2025. The City of Seattle relies on revenues from property, business and occupation, sales, and utility taxes. Other levels of government also impose taxes of these types. Only the State, in addition to the City, receives revenue from B&O and utility taxes, but many local govemment • units receive a share o(the sales and property tax receipts. The estimates below show the projected City of Seattle revenues, and statewide receipts, that is, the receipts to all governmenYal units induding the City itself. Property Taxes New development increases property tax collections, and will increase revenue to public jurisdictions. The Washington State legislature has established various specific exemptions from the property tax for specific activities (independent of property ownership). These include, f'or example, nonprofit cancer research —Fred Hutchinson receives this exemption — and nonprofit hospitals under some conditions. General biotech research or clinic facilities, even if undertaken by nonprofits, are not eligible. Possible exemptions have been considered in these projections. State and local govemment may see a cumulative net present value total of$185 million in increased property tax revenues by 2025 due to current and projected South Lake Union development under the full build-out scenarios. Of this cumulative total, the City is projected to receive $51.0 million (net present value) based on an assessment rate of $2.94 per thousand dollars of assessed value. Under the partial build-out scenarios, the cumulative totals are projected to reach $33.9 million for the City and $122.9 million for all governmental units including the City. • 9 Potcntial Economic and Fiscal Impacts uf Soutl� Lakc Uninn Dccclopmem 7�13%2003 Paul Sommcrs, Ph.D. Property Tax Revenues (Cumulative value, 2005-2025) Ciry nJSeattle NPV, millions $ Full Build-Out (Scenarios A&B) 51.0 Partial Build-Out (Scenarios C&D) 33.9 Statei��rde Full Build-Out (Scenarios A&B) ]85.1 Pari'ial Build-Out (Scenarios C&D) ]22.9 B&O Tax The busines-s and occupation tax is levied on fhe gross receipts ot�businesses, with differing rates depending on the i��dustry dassitication of each business. Various credits applicable to high technology businesses make it likely that no significant B&O mvenues will come &om biotechnology companies located in South Lake Union. The tax revenue estimates below assume no B&O revenue from biotechnology companies. However, ihe retail, service, and financial sector businesses that move into SouUt Lake Union will be liable For B&O taxes. The non-biotech businesscs are projected to yield revenues to the City with a net present value of$46.9 million, and 5128J million statewide by 202� under the full build-out scenarios. Under the partial build-out scenarios, the projected totals are $32.9 million for the city and $90.6 million statewide. B&O Tas Revenues (Cumulative value, 2005-2025) Cih�qJSeut�le NPV, millions S Full Build-Out (Scenarios A&B) 46.9 Partial Build-Out(Scenarios C&D) 32.9 Slulewide Full Build-Out (Scenarios A&B) 128.7 Partisl Build-Out �Scenarios C&D) 90.6 Sales Tax Sales tax revenues will accrue from the projected development in two ways. First, this tax is applied to construction costs, with an exemption applied to laboratory construction and equipment used for reseacch and development. Second, retail products sold by any business located in the area will also be subject to the sales tax. 10 Putential Economic and Fiscul Impacts of South Lake Union Development '7/13/2004 Paul Sonmiers, Ph.D. • Construction Sales Tax The net present value oY the tax yield to the City of Seattle from the construction-related sales taxes is estimated al $1 1.9 and $123.2 million statewide under the full-build-out scenanos. Under the partial build-out scenarios, the sales tax from construction in the South Lake Union area is projected at $6.9 million for the Ciry of Seattle and $71.1 million statewide. Construction Sales Tax Revenues (Curoulative value, 2005-2025) Cin•q�Seuale NPV, milfions $ Full Build-Out (Scenarios A&B) 11.9 Partial Build-Out (Scenarios C&D) 6.9 Sra�eia�ide Full Build-Out (Scenarios A&B) 123.2 Partial Build-Out(Scenarios C&D) 71.1 Retail Sales • Taxable retail sales by businesses located in South Lake Union are projected to add a cumulative net present value of$101.I million statewide by 2025, of which $9.8 million would accrue to the City under the full build-out scenarios. Under the partial build-out scenarios, the City s revenucs would reach $6.3 million from the retail sales tax, and statewide revenues would total $64.8 million. Retail Sales Tax Revenues (Cumulative value, 2005-2025) Citv qj�Seuttle NPV, millions $ Full Build-Out (Scenarios A&B) 9.8 Partial Build-0ut (Scenarios C&D) 63 StcneN ide Full Build-Out (Scenarios A&B) 101.1 Partial Build-Out (Scenarios C&D) 64.8 Utilitv Taxes The City and State impose taxes on all utility revenues (water, sewer, telephone, electric, gas, and garbage), whether a private company or the Ciry itself provides the service. • These taxes are separate from utility rates, and, in the case of the City, go directly to the 11 PotcnUal Economic and Fiscal Impticls o1�Soulh L�k�Union Dcvclopmcnt 7/13/2004 Paul Sommers, Ph.D. General Fund without restriction on their use. The rcvenues &om taxes on public and private utilities can be estimated on a per-square-foot basis for the commercial businesses and residential units projected in the South Lake Unioi� area. Biotech research laboratories arc especially intensive users of electricity, water/ sewer, and garbage services. These differenccs and their impacts on utility tax revenues have been estimated through data provided by the Fred Hutchinson Cancer Research Center. By 2025, the cumulative net present value of these revenues is estimated at$34.5 million £or the City and $57.3 million statewide under the tLll build-out scenarios. Under the partial build-uut scenarios, the City would receive $23.8 million and the statewide total would be $39.4 million. Utility Tax Revenues (Cumulative value, 2005-2025) Ciry ofSeanle NPV, millions � Full Build-OuC (Scenarios A&B) 34.5 Partial Build-Out(Sce�arios C&D) 23.8 Statetiride Full Build-Out (Scenarios A&B) 573 Partial Build-Out (Scenarios C&D) 39.4 Summary: Direct Tax Revenue Increases The net present value of the cumulative increase in the City from tax receipts from the South Lake Union region by 2025 is $154.lmillion under the full build-out scenarios, and �103.8 million under the partial build-out scenarios. SYatewide under the full build-out scenarios, the cumuLaYive Cotal by ?025 is projected to reach $595.5 million and $388.8 under the partial build-out scenarios. '1'otal Projected "1'ax Revenues due to South Lake Union Re-devclopment (Cumulative valuc, 2005-2025) Cit�� ofSeattle NPV, millions $ Full Build-Out(Scenarios A&B) 154.1 Partial Build-Out(Scenarios C&D) 103.8 Slatertrde Full Build-Out (Scenarios A&B) 59�.5 Partial Build-Out (Scenarios C&U) 388.8 12 Pote»tial E.conomic and Fiscal Impacts of South Lakc Uniun Dccclopmen� 7�13/?U04 Paul Sommcrs. Ph.D. • The two charts below shows the cunmlative total projected tax receipts under the full and partial build-out scenarios for both the City and all governmental units benetiting from South Lake Union development. Projected Direct City of Seattle Tax Revenues Due to South Lake Union Redevelopment 180 160 i � 140 � 120 o - = 100 - t Scenarios A&B � 80 -s-Scenarios C8D a 6� - z 40 20 0 O O O O N � � � N N N O O O O O O O O O O O N N N CV N N N N N cV N • Projected Direct Statewide Tax Revenues Due to South Lake Union Redevelopment 700 600 y 500 j C � 400 - - tScenanos A&B .� 300 ��Scenanos C8D > Z 200 100 p ' _ __ . a c0 N O N <1 cD N O N C O O O N N N O O o O O O O O O O O N N N N N (V N N N N N • 13 Polenlial Ec000mic and Fiscal Impacts of South Lake Union De��elopmcnt 7/13/2004 Paul Sommers.Ph.D. Indirect and Total Impacts As discussed above, the direct impacts, particularly of the biotech employment coming into South Lake Union, will have multiplier impacts on the entire regional economy. These multiplier or"indirect" effects, when added to the direct impacts, consYitutc the total economic impacts of the projected development. Scenarios A and C utilize the high indirect impact estimates discussed above in the methodology section, while scenarios B and D are based on the low indirect impact estimates (refer to the chart on page 4). Eroployment As noted above, development in the Soutli Lake Union area may create 23,710 new direct jobs in Seattle if full build-out of Phase Il occurs by 2020, or 15,059 direcl jobs undcr the partial build-out scenario. Indirect impacts will add another 18,766 to 30,027 jobs in Seattle under the full build-out scenarios, or 9,383 to 1�,014 under the partial build-out scenarios. Thus, total job impacts in Seattle may range from 24,442 to 53,737 as shown bclow. Employment Growth Projections Sccnano Direct Indirect Total A: Full build-ouUHigh indirect 23,710 30,027 53,737 B: Full build-out/Low indirect 23,710 18,766 42,476 C: Partial build-ouU}{igh indirect 15,059 15,014 30,073 D: Partial build-ouULow indirect 15,059 9,383 24,442 Indirect and Direct Tax Revenues Tl�e projected lotal employment increases will result in additional increases in Seattle's tax revenues. The tables in this section show the estimated net present value of indirect tax revenues, that is, the additional tax revenues stemming from the multiplier impacts of re-development activity in South Lake Union. The statewide indirect impact estimates below are for multiplier impacts that take place within the City of Seattle's boundaries. The total estimated net present value of these revenues from 2005-2025 is shown in these tables. The City of Seattle's property tax revenues may increase by $19.2 to �55.6 million in cumulative tax receipts (net present value) by 2025 due to South Lake Union re- development. Statewide, all public jurisdictions benefiting from this activity are likely to see revenue increases ranging from $54 to $156 million. 14 Potcntial Economic and Fiscu] Impacls of Suuth Lake Union Development T13i2004 Paul Sommers. Ph.D. • Indirect Impact: Propertr 7'ax Recenues (NPV, millions $) Scenario S�attle Statewide A: Full build-out�High indirect 43.203 156.649 B: Full build-out/Low indirect 29.857 108.257 C: Parfial build-out/High indirect 21.601 78.324 D: Partial build-out/Low i��direcl 14.928 54.128 City of Seattle B&O revenues are projected to increase by $31 to 91 million duc to the multiplier effects of South Lake Union re-development. Statewide, all public jurisdictions benefiting from these multiplier impacts will see B&O revenue increases ranging from $67 to nearly $195 million. Indirect Impact: B&O Tax Revenues (NPV, millions $) Scenario Seattle Statewide A: Full build-out/High indirect 91.006 194.894 B: Full build-out/Low indirect 62.892 134.687 • C: Partial build-out/High indirect 45.503 97.447 D: Partia] build-ouULow indirect 31.446 67.344 The multiplier effects of South Lake Union re-development are projected to yield revenue increases from the sales tax on construction activity amounting to $3.6 to 1 1.16 million for Seattle, and 537.5 to 115.5 million statewide. Indirect Impach Sales Tax on Construction Tax Revenues (NPV, millions $) Scenario Seettle Statewide � A: Full build-out/High indirect 11.161 115.551 B: Full build-out/Low indimct 7239 74.950 C: Partial build-out/High indirect 5.581 57.775 D: Partial build-outiLow indirect 3.620 37.475 • 15 Pountial Economic and Fiscal Impacts of South Luke Union Development 7/13/2004 Paul Sommers, Ph.D. Utility tax increases due to the multiplier effect are estimated at �6.8 to 19.7 millio�� for Seattle, and $10.6 to 30J million statewidc. Indirect Impact: Utility Tax Revenues (NPV, millions $) Scenario Seattle Statewide A: Full build-ouUHigl� indirect 19.723 30.748 B: Full build-oudLow iodirecl 13.595 21.214 C: Partial build-out/High indirect 9.862 15.374 D: Partial build-out/Low indirect 6.798 10.607 Retail sales tax revenue is projected to incmase by �49 to 14.2 million for Seattle and $49.3 to 142.6 million for all public jurisdictions benefitin2 from the multiplier impacts of South Lake Union re-developmetit. [ndirect [mpact: Retail Sales Tax Revenues (VPV, millions $) Scenario Seattle Statewide A: Full build-out/High indirect 14.156 142.617 B: Full build-outlLow indirect 9.758 98.560 C: Partial build-ouUHigl� indirect Z078 71.309 D: Partial build-ouULow indirect 4.879 49280 Summary The following tables and charts summarize the direct, indirect, and total impacts on government tax receipts due to South Lake Union re-development and the multiplier impacts projected to occur within Seattle's boundaries. Total tax revenues of the City of Seattle may increase from $165 to $333 million by 2025, and all public jurisdictions benefiting from this activity will see revenue increases ranging from $637 million to $1.320 billion. 16 Potcntial L:conomic�nd Fiscal Imp�uls of Suulh Lakc Union Dc��clopment 7'13/20114 Paul Sommcrs, Ph.D. • Total Seatde Tax Revenues Due to South Lake Union Re-llerelopment (NPV, millions �) Scenario Direct Indirect Total A: Full build-out/High indirect 154.148 179.249 333.397 B: Full build-ouY/Low indirect 154.148 123.341 277.489 C: Partial build-ouUHigl� indirect 103.751 89.625 193.376 D: Partial build-out/Low indirect 103.751 61.671 165.422 Total Statewide Tax Revenues Due ro South Lake Union Re-Development (NPV, millions $) Scenario Direct Indirect Total A: Full build-ouUHigh indirect 595.483 725.037 1,320.520 B: Full build-out/Low indirect 388.786 496.544 1,092.027 C: Partial build-out/High indirect 388.786 362.518 751.304 D: Partial build-outiLow indirect 388.786 248272 637.058 � The charts below show the accnial of thcsc rcvcnues over time and the variations in total reven�re that depend on the extent of Phase 11 build-out as well as the degree to which indirect impacts occur witl�in Seattle itsel£ The degree of build-out of Phase 11 by 2020 has a larger impact on total revenues than the extent Yo wl�ich indirect impacts oecur widiin Seattle's borders (compare the differences between Scenario A and C, as opposed to comparing A to B, or C to D). The difference between the build-out scenarios is three to five times larger than the difference between the indirect impact scenarios. • 17 Putcntial Ecunoinic and Fiscal Impacts of South Lakc Uniun Dcvcloptnent 7�13!'_004 Paul Somntcrs, Ph.D. Projected Total City of Seattle Revenues Due to South Lake Union Re-Development 400 350 ' 300 �+ 250 �-A c �B ? 200 C E 150 �x�-� _�D 100 ��'' 50 �� x,x'x a -- ---- -- - _ --- OC` 06 00 ,�O ,�`L ^b ,��o ,�� O 'L b r�,0 r1,0 rL0 r1,0 rL0 ry0 �O �O �O� �O� �O�' Projected Total Statewide Revenues llue to South Lake Union Re-Development 1400 , 1200 , 1000 I � t Al � 800 I — �B 0 = 600 � - C E ��D 400 200 - ��'x� 0 — — __----- OC' O�o 00 ,�� ,�`1' ,�a ,�0 ,�0 ,1.� ,l.�l' 'LP ry0 ryo �O rl,o �o �O �O ry0 ,y0 ,y0 ,y0 Conclusions South Lake Union is a neighborl�ood currently experiencing significant growth, and substantial additional growtl�is projected in Chis neighborhood, whidi could lead to sizeable employment gains in Seattle through both direct and indirect jobs. In addition, growth is projected to generate fiscal impacts to the City of Seattle and local govemments (City of Seattle, State of Washington, King County, Seattic School District, and Port o1� Seattle) through a combination of tax sources. Specifically: 18 Potcniial E:cunomic nnd I'iscal Impac�s ot�South L�kc Union Dcvclopmcn[ 7�I 1i200� P�ul Sommcrs, Ph.D. � The City of Seattle is projecled to: • Increase its employment base by 24,400 to 53,700 new jobs by 2020 • Increase tax receipts b,y $165 to 5333 roillion, in net present value terms, by 2025. Similarly, the state and other local units of governments benefiting from the direct and indirect employment increases in Seattle are projected to: • Increase tax receipts bY $637 million to $1.32 billion, in net present value terms, by 2025. Of this state and local rotal, the State of Washington alone is projected to: • Increase tax receipts by $491 to 5772 million, in net present value terms, by 202.5. Details on the State impacts are shown in the Appendix I. This projected range of revenue reflects the variability in two determinant factors: • the raYe of growth in Phase 11 development, and • • the geographic distribution of indirect impacts. Of these two factors, the rate of growth in Phase [I development is more critical because it has a larger impact on the City's potential revenues. Periodic review of the extent of build-oul in Soutl� Lake Union is recommended. Much of this growYh is occurring already. The first set of projects include space for University of Washington research laboratories, commercial biotech companies, an intemational retailcr, restaurants and other retail, and a number of residential units. Some of these projects are in the planning phases or have permit applications in with the City; others will be opening this year. They will add over 3 million square feet of commercial, retail and residential space to the area by 2007. Sometime after the completion of these projects, a second phase of development is expected to beein. This is projected to bring a total net increase of 7.2 million square feet of commercial space, 35"/0 of which is assumed to be designed for biotechnology research and development uses, with the remainder in a mix of commercial office (55%) and retail uses (10%). In addition to the commercial development, it is projected that 10,000 residential units will be constructed in the South Lake Union area. Factors influencing the tinal level of build-out include: . The willingness of the commercial biotech sector and other kinds of businesses to lease space in the South Lake Union region. Absorption of space in South Lake • Union will depend on the pace of growth in the biotechnology industry as well as 19 Potential Economic and Fiscal Impacts uf South Lake Union Development 7/13/2004 Paid Sommcrs, Ph.D. t6e competition with other IocaCions in the urban area that would like to atuact new employers. The likely range of absorption is captured in the full and partial build-out scenarios analyzed in this report. i The lcvel of infrastructure supporting the increased commercial and residential density, including electrical capacity, open space, transit and pedestrian options, traffic impacts and other considerations. These public infrastructure investments would make the ncighborhood more functional, accessible and attractive to potential lessees. Under either build-out scenario, the City is likely Yo experience substantial revenue increases stemming from development in the South Lake Union neighborhood. The projections in this report are for total revenue increases of$165 to 193 million under the partial build-out scenario and total mvenues increases of$277 to 333 million under the full build-out scenario. 20 � � �' • � � Lake Union , � i . . _ . .. M 'r'^`ir.4-.. ' � � , - ' n��R _�(^�i•�� r �. �Y� rs , � .�� .- _. � � f � J ��.�n' li` ls � � � . . I 'y R � ... �_ �� =� f �:._�,� :� � o � �r .iC• - t�' ._'-i� , ' ��A �■ . i �'�,,f��y � 7. �..� � (.y i ! . ,.,�,y i � ■ f .�wj ;�W� �� 3 "_ I.L ' ' �., '� .I � � �. . . rti y��. or.b .. � �' L. �. 1' - ` ( _ • Appendix 1 Potential Economic and Fiscal Impacts for the State of Washington from South Lake Union Development � Appendix I: Potential Economic and Fiscal Imnacts of SoutU Lake Union Dcvelooment Paul Sommcrs, Ph.D. Purpose The economic development activity in Soutli Lake Union will generate revenues for many publicjurisdictions including the State of Washington. The draft Potential Economic and Fiscal lmpacts of Soutl� Lake Union Development report identifies the revenue streams to the City of Seattle and to all governmental agencies in Washington State as a total. During the peer review process, the City was asked to compile revenue esYimates specifically for tl�e State of Wasl�ington. This appendix addresses that question by identifying the specific revenues which will accrue to the State of Washington from the potential development activity in South Lake Union. Methodology Phase 1 and II Development Revenues Ilow from current and future development, prqjections for which are based on a study of redevelopable property in the neighborhood by Heartland. Tl�is development is divided into two phases. The first phase of develop�nent is in the planning stages and major Yenants are lined up for many of these projects. The employment and revenue impacts associated with this phase of development are reasonably predictable. Given that, this report tirsf estimates the potential revenue from development now under construction or planned between now and 2007 (Phase 1). Two alternative cases are considered for Phase II, defined as the development which is projected to occur between 2008 and 2020. The first case asswnes that full-buildoat of tl�e Heartland scenario will occur by 2020. This assumcs that approximately 64 percent of the redevelopable land in the neighborhood will in fact be redeveloped by 2020. Given uncertainty about the pace of overall development in the region, a second case is considered in this report in which only 50 percent of the estimated Phase II growth is in fact developed by 2020. This projection is defined as the partial build-out scenario. These two scenarios provide a low and high estimate for potential development in South Lake Union. This report then calculates the revenue expected from the total potential development of Phase I and Phase lI combined, followed by a five-year period (2020 to 2025) of full occupancy, but no further growth. Tl�e Pl�ase II development is assumed to occur evenly between 2008 and 2020. The employment and revenue impacts are calculated for the partial build-out and full build-out scenarios described above. Direct and Indirect Impacts This study includes both direct iropacts: impacts generated by the likely increases in employment as the current and projected development in the area comes into servicz; and indirect impacts: the multiplier impact of the direct impacts resul4ng from the purchases of goods and services by the business occupants of the new buildings, as well as the 22 Anoendix I: Potential Economic and Fiscal Imoacts of South Lake Union Develonment Paul Summcrs, Ph.D. • purchases of goods and services by the workforce employed in the businesses occupying diese new buildings. An input—output model of the state and local economy is used to estimate the indirect impacts.` Adding up direct and indirect impacts yields estimates of total impacts. Assumptions The following are the summary tables from Potential Economic and F iscal Impacts of South Lake Union Develonment regarding the gowth and employment projections for South Lake Union economic activity. Commercial and Residential Development Estimated Net New Additions to Developed Space in South Lake Union Neighborhood by Phase (million square feet— net new) Full Build-Out Partial Build-Out Scenario Scenario Industry/Use Phase I Phase II Total Phase II Total (2000-2007) (2008-2020) (2000-2020) (2008-2020) (2000-2020) Biotech 1.382 1.138 2.520 0.569 1.951 Offce 0.708 3.252 3.960 1.626 2.334 • Retail & hotel 0.120 0.600 0.720 0.300 0.420 Commercial Sub-Total 2.210 4.990 7.200 2.495 4.705 Residential 0.833 6.830 7.663 4215 5.048 Total square feet 3.043 11.820 14.863 6.710 9.753 Other kcy assumptions were derived from de��clopment companics and prior studies of the South Lake Union area. These assumptions include: • AveraSe assessment value of biotechnology research space--$251 per square foot • Average assessment value of commercial space--$201 per square foot • Average assessment value of residential space--$100 per square foot • Residentia] units will average--750 square feet • Land costs represent 15% of total development costs. This 15"/o is not subject to the sales tax on construction. • Phase II development will be completed in even annual increments and will enter service (and enter the tax base) from 2008 Co 2020. `Chase, Robert A. , Philip Bourquc,and Richard S. Conway. The 1987 W'us6ring�on Slole Lipu!-Oulpul S�u�h•. Repurt for W�shington State Office of Financial Managemcnt,by Graduate School of Business, University of Washington, Seattle, September 1993. Prof. William Bcycrs of thc Universiry o( Washinc,non Dcpartmcnt of Gcography has estimated a version of this model that projcc:ts impe�cts within King County. This unpublished version,madc a�-ailable to the author by Prof. Beycrs,has bcen used in • other recent impact studies(maritime and music cluster studies for the Seanle Office of Economic Dceclopmcnt). 23 ApPendix I: Potcntial Economic and Fiscal Impacts of South Lake Uniun Devcluomcni. Paul Sommcrs, Ph.D. • Future inflation rates are unknown and the analysis is conducted in 2005 dollars, with a real discount rate of 3% used to discount future benetits; this discount rate reFlects the long term growth potential of Che economy�. • Tax rates and utility fees will not change and therefore current yields per square foot or per employee in comparable space can be used to estimate the City's future tax and fee revenues.' • For a mix of biotech, commercial office, and retail, an average of 3.29 employees will occupy each 1,000 square feet of space as assumed by Heartland in their 2002 study of the Soufh Lake Union area. • With 35"/0 of the 7.2 million square feet of development assumed to be biotech research and development space, the remainder will be 55% ofEice and 10% retail; these assumptions eenerally reflect the pattern established in Phase 1 and are consistent with the Puget Sound Regional Council's long range projections for the area �nd surrounding neighborhoods. Ai�y of these assumptions could be easily moditied by analysts who wish to consider alternative scenarios for future development of the South Lake Union region. Th� value of tl�is study is in setting up an analytic framework that can be used in sensitivity studies to cxplore the implications of alternative assumptions, or to assess the impact of changing development patterns as mazket conditions unfold over the next 17 years. "City tinancial policics call for the use of a discount rate ihat approximatcs the inflation-adjusted marginal pre-t�x rate of retum on an nvcrage investment in thc privatc sector. The local econonry has historically grown fastcr than Ihc nation in recent dccadcs, �nd it may tend tu do so once thc cuncnt rcccssionary period ends. Also, thc long term growth rate of the national eco��omy may have inereased from a historical trend rate as a conseyuence uf new rechnobgy and l�ieher productivity growth rates as seen i��the Iate 1990s. 'Data frum Ciry of Seattle Finance Dept. 24 Aoocndix I: Putential Economic and Fiscal imnacts of South Lakc Union Dcrclupnrenl Paul Sommcrs, Ph.D. • Direct Emalovment Direct ernployment figures are generated by multiplying the projected square foot dcvelopment from the previous table by an average of 3.29 employees occupying each I,000 square feet. The construction jobs are listed separately in the table below since they end when the construction process ends in 2020 under both scenarios. Direct Job Creation Estimates for New South Lake Union Buildings: Full Build-Out Partial Buiid-Out Scenario All Scenario Scenario Industry Phase I: Phase II: Total Phase II: Total 2004-07 2008-20 2020 2008-20 2020 Biotech 3,159 3,141 6,300 1,571 4,730 Offce (Business Services, p 518 12,213 14,731 6,107 5,625 Financial, Real Estate) Retail 732 1,946 2,678 973 1,705 Total permanent jobs 6,409 17,301 23,710 8,650 15,059 Construction (per year) 628 753 376 Total: 7,p37 18,054 25,091 9,026 16,063 construction + permanent 1'otal Emplovment • Indirect employment figures are generated by the input-output model, which estimates the impacts of payrolls and purchases of the businesses implied by the directjob creation tables. Tliese payrolls and purchases stimulate additional business activity in tl�e area. The construction jobs are listed separately, as in the tables above. However, the indirect impact of thc construction activity is included in the indirect.job esYimates below. Employment Growth Projections Scenario Direct Indirect Total Full build-out 23,710 30,027 53,737 Partial build-out 15,059 15,014 30,073 Construction 628 376 Fiscal Impacts Fiscal impacts derive both from construction activity and the subsequent use of new buildings b} various kinds of businesses and non-profit organizations. Fiscal impacts are estimated using current tax rates. Estimates are run out to the year 2025. The development occurrine in South Lake Union will generate revenues to the State of • 25 Aonendix I: Potcntial Economic and Fiscal imoacts of Sou�h Lakc Union Devclopment Paul Sommers, Ph.D. Washington through property, business and occupation, sales, and utility taxes. (These revenue streams are fully explained in the main body of the report). The following are summary tables which estimate the total revenue projections to the State of Washin�*ton due to development in South Lake Union, showing both the full build-out and the partial build-out scenarios Total Tax Revenue to State of Washington (net present value, 2005-2025 in millions of dollars) Tax Full Build-out Partial Build-out Property 93.00 54.74 B&O 323.59 182.12 Sales Tax--Retail 170.36 95.16 Sales Tax--Construction 198.32 90.02 Utility 68.36 41.03 Total 853.63 463.07 26 Anocndix I: Potential Economic and Fiscal Imoacts of South Lake Union Develooment Paul Summcrs, Ph.D. • Summary The development activity occurring and projected for South Lake Union from now until 2025 will create jobs and add tax revenues to State of Washington's general fund. This analysis presents both a full build-out and a partial build-out scenario, based on the projections of growth in South Lake Union. This economic activity will create an esYimated 16,063 to 25,091 directjobs in the South Lake Ui�ion neighborhood between now and 2020. Furfhern�ore, tUese direct jobs will �enerate additional economic activity which will create another 15,014 to 30,027 indirect jobs in the State. The total employment impact of the development in South Lake Unio❑ is projected to be between 30,073 and 53,737 new jobs. The projected tax revenues to the State are estimated to be between �463 million and $R54 million in cumulative net present value for the 2005-2025 time period. • • �� _ j;, . - , � _ � �.' � � '� ��`�.a�„ . _ -. � s�}..y� .. ��_, � � � • . ' � II � ' ' • � ' • � _ �_ � �' �� . =-,� ��— ,� . � .�� rv , r�� o �'� ��.�E �� :�� i. �� ( �� ^�'��r E , "�"�I�-,- s. - p�. �.��.:.�;y .� _��, • _ n �a , , .s . � � � South Lake Union Development Update 2004-2010 � Michael Mann � cyara strategies eeeEN suwliorvs wR oua �we a�ntiri in conjunction wi[h Dr. Paul Sommers Seattle University A project of City of Seattle's Office of Economic Development Steve Johnson, Director • I r�; svaceyies South Lake Union Development Update (2004-2010) 1 � C,;�� a z �� \ ..�,-� ; � �i r . �+'� � ��,,:: i� . .r r�� .. E \ �h��. � , i� . a� e\ fi l I:�, �r � _/� ��.'� � . -Sn$ �� t- — - '.► • ..:�:�.,�.�.�. , - � �p��[, _t9.lp��t4L ^AI��'i . �s1:1��4LLituo �� . + ��'�` 'y�1 t ..M_. �.1�• �5~- �.1, = —� �� — . Y� � �' � � ;I: � � �%^a� i..�`� ,� t � "' �t�� ; � � I � _ i t � � � iii n� !!! I'i� � I�. I � � �� , _�'x. ._ � "�` - r !F ' ' � -'� III� -- �.. -�'�` �� , ,. -, , � - '�, ! � '/�[�.�fS� �.�e ^r.r�� • ._ -. -' _ i. i '� :r ��•��. �� I I �t. ._.-. . �_ i - r +. �� ; '' /� i� '� � i � ' �'�� y . 7 • „ � ��T j •• � s��0 l , :. f q� �. . . � ��- - !1 lw -� ` ia � � I • _ , : � � 1�� °�. : . G , , � _ ��-�.._ � ��:.� � . .. _� �. � � / ,, .. ` ,� . ..; � .� �� ' � ' • _ � : /�� ' " e� '� - -• �D �� . ,, � , ,-;, - i ., - e -.- . ��aw; � .S � .!+: -�► ��r ^` , . . . Selectecl development projects ir�South Lake Union Urban Cenrer�rom 2004 Co Z010. �a, scraceqies South Lake Union Development Update (2004-2010) 2 � � _ � . � Contents Background...............................................................................................................................................4 South Lake Union Development........................................................................................................6 Projections............................................................................................................................................6 Actual South Lake Union Development (2004-2007)..........................................................7 Actual South Lake Union Development During the First Three Years of Phase 2 (2008-2010).........................................................................................................................................9 Actual South Lake Union Development: Total to Date (2004-2010).......................... 11 JobCreation............................................................................................................................................13 RevenueGeneration............................................................................................................................15 PropertyTax.....................................................................................................................................15 B&0 Tax..............................................................................................................................................16 SalesTax.............................................................................................................................................17 UtilityTaxes.......................................................................................................................................18 TotalCity Revenue to Date.......................................................................................................... 18 • Conclusion..............................................................................................................................................20 Appendix 1. Phase 1 (2004-2007) Development Projects in South Lake Union by Sector (Square Feet)...........................................................................................................................21 Appendix 2. Phase 2 (2008-2010) Development Projects in South Lake Union by Sector (Square Feet)...........................................................................................................................22 • � , stracepies South Lake Onioi� Developinent Upda[c (200�-2010] 3 � Background The South Lake Union neighborhood in Seattle has been the focus of a myriad of development concepts since the mid-1990s. In 1998, community members approved a Neighborhood Plan, which established goals for the development of the community—creation of a park at the historic site of the Lake Union Armory,traffic improvements and a focus on sustainable development. In 2002, the City of Seattle commissioned Heartland, LLC to study the development potential of the neighborhood. Heartland estimated that up to 7.2 million square feet of commercial redevelopment and up to 10,963 housing units could be constructed in South Lake Union during the first two decades of this century. This magnitude of development, they noted,would be dependent to some degree on the rate of city infrastructure development. In order to assess the costs and benefits of real estate development in South Lake Union, policymakers embarked on an economic analysis of potential growth in the neighborhood. The City of Seattle retained the g � � �� services of noted regional economist Dr. Paul � ;��'��,�` � �` Sommers and published the peer-reviewed, The .� ��+' ' Poten[ial Economic and Fisca!/mpacts ofSouth ...�� w; '�I��'- Lake Union Development in 2004. ��...�'��South LaMa unlon Based on the real estate development projections from the earlier study by Heartland, Sommers " projected that the City of Seattle could expect ° � between $103 and $154 million in cumulative new direct tax revenues for the 2005-2025 period (net present value). He also estimated that between 15,000-23,000 jobs would be created in the neighborhood by 2020. As in any economic projection,the margin of error for a myriad of assumptions over a two-decade period has the potential to be large. Through the peer review process, � at ies South Lake Union Development Update (2004-2010) 4 � cti,;n„,str,. eG..... the Sommers report addressed this concern by dividing the analysis into two phases • and providing a range of potential development scenarios. Phase 1 was defined as the period behveen 2004 and 2007. Atthe time of his report, many real estate development projects were quite definitively in the pipeline. To calculate the tax revenue generated by these projects, Sommers aggregated the tax revenue streams from these planned developments. Phase 2 was defined as the period between 2008 and 2020. In his study, Sommers estimated two different streams of development, a full build-out scenario and a partial build-out scenario. The full build-out analysis assumed that real estate activity in the neighborhood would meet the 2020 projection contained in the Heartland analysis. The partial build-out projection assumed that only half ofthe phase 2 development would be actualized. Sommers emphasized that the utility of his report "Estimates for both was to provide an analytic framework to understand commercial and how the real estate activity in this Urban Center could residential development generate jobs and tax revenue for the City to meet its are clearly speculative for neighborhood and citywide needs. He commented Phase Ii...Periodic review that it would be wise for City officials to review these of the extent of build-out development projections at various timeframes. in South Lake Union is recommended." • At the end of phase 1, the City of Seattle's Office of Dr. Paul Sommers Policy and Management authored an update on South Lake Union development. Atthe end of 201Q three years of phase 2 development will have been completed. The City oFSeattle's Office of Economic Development is pursuing Dr. Sommers' recommendation and has commissioned this study. This 2010 update to The Potential Eronomic and Fiscal lmpacts ofSouth Lake Union Development provides the most recent data for real estate development in South Lake Union and compares the rate of development in between 2004 and 2010 to the Heartland projection and estimates tlie tax revenues to the City of Seattle from this activity. • ;'-': �.,,u straregies � , - _, _ , South Lake Union Uevelopment Update (2004-2010) 5 � f' � r South Lake Union Development Projections The Sommers study based its real estate development projections on the original Heartland study and segregated the markets into biotech, office, retail/hotel and residential sectors. Table 1 summarizes the projections for both the full build-out I and the partial build-out scenarios. I Table 1. Estimated Net New Additions to Developed Space in South Lake Union Neighborhood by Phase (million square feet) and by Scenario Full Buildout Partial Buildout Phase 1 Phase 2 Total Phase 2 Total Commercial Biotech 1,382 1.138 2.520 0.569 1.951 Office 0.�08 3.252 3.960 1.626 2.334 Retail/Hotel 0.120 0.600 0.720 0.300 0.420 Commercial Sub-Total 2.210 4.990 7.200 2.495 4705 Residential 0.833 6.830 7.663 4215 5.048 Total 3.043 11.820 14.863 6.710 9.753 Employment in the new developments in South Lake Union was projected to range from 15,000 to 23,000 permanent jobs, with another 350 to 750 annual construction jobs through the development phase. Table 2 summarizes the job creation estimates included in the Sommers report. Table 2. Job Crea[ion Estimates for South Lake Union Neighborhood by Phase and by Scenario Full Buildaut Partial Buildout Phase 1 Phase 2 Total Phase 2 Total Biotech 3,159 3,141 6,300 1,571 4,730 Office 2,518 12,213 14,731 6,107 8,625 Retail/Hotel 732 1,946 2,678 973 1,705 Total PermanentJobs 6,409 17,300 23,709 8,657 75,060 Construction (per year) 628 753 376 ��`ti.,n„nrateyies Sootl� Lake Union Development Update(Z004-2010) 6 � • Actual South Lake Union Development (2004-2007) Since the early 2000's, South Lake Union has been a center of real estate development in the City of Seattle. As the Heartland report projected, the large number of underdeveloped parcels with close ,�� proximity to downtown proved to be a _. - """^�'*�_ strong economic engine for re-development. - �- "' With early life sciences investments in the . . i ' " ' : R�� Fred Hutchinson Cancer Research Center and _ w" �:,, •�,� the University of Washington's Life Sciences � . �— Campus, the neighborhood became a strong � —"'� magnet for the Seattle's biotechnology cluster. During the 2004-2007 timeframe, over 4.6 million square feet of new building were constructed in the South Lake Union Urban Centerl. In the commercial sector, construction for biotechnology space outpaced the other sectors with 67% of the development. The actual development during this period exceeded the projections from the Sommers report by 52%. Table 3 compares the projected and actual square footage for development by sector. • Table 3. Actual Development vs. Projected During 2004-2007 Period 2004-07 Projected Actual Biotech 1,382,080 1,784,808 Office 707,800 716,799 Reta i I 119,865 162,116 Total Commercial 2,209,745 2,663,723 Residential 0 0 Units 157 1,554 Square footage 833,200 1,951,748 0 0 Total Square Footage 3,042,945 4,615,471 Chart 1 gives a visual representation of actual development in each building sector compared to projections between 2004 and 2007. All sectors outperformed the estimates during this period. • � Appendix 1 details the development activity by parcel. I, scraregies South Lake Union Development Upda[e (2004-2010) 7 � `� _ Chart 1. Actual Development (2004-2007) in South Lake Union by Sector Compared to Projections (Square Feet) s,000,00a 4,500,000 4,000,000 - -- 3,500,000 --- 3,000,000 2,500,000 - z,000,000 1,500,000 � Projected 1,000,000 - 500,000 - OActual _ � �_. '. � . . I . e� �¢ ca� ba ra� �e �`°c ��` �e �`et .aeo �°°a9 ,Co�``od` �es S J9�e a �o� Chart 2 illustrates the status of development activity at the end of phase 1 against a backdrop of the overall 20-year projections. Chart 2. Total Development(2004-2007) Compared to Full Build Out and Partial Build Out Scenarios ib,000,000 14,000,000 � - 12,000,000 - � � ' � 1D,000,000 ; Full Build Ouc 8,000,000 � - Actual Develupment(5.f,] 6.000,000 � —' Par[ial Build Oui 4,000,000 - �,000,000 0 Ob 05 O�o 01 06 Oaf 1.0 'ti'1� 'ti'1' '1"� 'YC` 15 'tib '�.1 'ti0 'tiq 'LO ,y0 ,y0 ,y0 ,y0 ry0 ,y0 ,y0 ,ti0 ,�O ,y0 ,�O ,y0 ,y0 ,y0 �O ,y0 ,LO <�,n saacepies SouCh Lake Union Development Update (2004-2010) fl � P ,i s; e � Actual South Lake Union Developrreent during the First Three Years of Phase 2 (2008-2010) The phase 2 time period identified in the Sommers Report began in 2008. It coincided with the beginning of the nationa] economic recession. The real estate and construction industries were among the hardest hit. In the South Lake Union business district, however, construction cranes continued working. Vulcan's development of a business campus for Amazon drove building activity during the 2008-2010 period. In the Cascade neighborhood, Four housing projects added to the constructionz. The total development for the first three years of phase 2 exceeded the partial build- out scenario, but fell short of the full build-out scenario. Table 4 details the projected and actual development activity over the past three years. Table 4.Actual Development vs. Projected During 2008-2010 2008-10 • Full Build- Partial , out Build-out Actual Biotech 262,615 131,308 0 Otfice 750,462 375,231 1,494,623 � Retail 138,462 69,231 95,563 Total Commercial 1,151,538 575,769 1,590,186 Residential U n its 2,102 1,051 217 Square footage 1,576,154 972,692 149,275 TotalSquare Footage 2,727,692 1,548,462 1,739,464 South Lake Union development over the past three years was dominated by office development, representing over 86% of the building activity. The influence of a slow "?� housing market resulted in only one private �1 market-rate development during this time �y�=�E� frame. No development activity occurred in the i --��' biotechnology sector over the past three years. p Chart 3 compares actual development in each • z Appendix 2 details the development activity by parcel. � �� sira�eqies Suutli Lal<c Uninn Dcvclopment Updatc (2004-2(110) 9 � . sector to the projections in both full build-out and partial build-outscenarios. Chart 3. Actual Phase 2 (2008-2010) Development in Sector Compared to Projections (Square Feet) by Scenario 3,000,000 - - ---- - 2,500,000 ' 2,000,000 1,500,000 - G Full Build-ou[ 1,000,000 �Partial Build-ou[ �i ❑Actual 500,000 - IM� I' G�'O � 0`��¢�• ��`m ��`� 4`��``�� .¢c,c� F��p,z a o �°�``o� �e5 �`'�ate a �oa �o�an svaceyies South Lake Union Development Update (2004-2010) 10 � P .� _� e _ . _. . .� • Actual South Lake Union Development: Total to Date (2004-2010) Despite the fact that the pace of development slowed slightly during the past three years, activity in South Lake Union from 2004-2010 exceeded the most optimistic projections from the Sommers report. Table 5.Actual Development vs. Projected During 2004-2010 Period 200a-10 Full Build- Partial out Build-out Actual Biotech 1,644,695 1,513,388 1,784,808 Office 1,458,262 1,083,031 2,211,422 Retail 258,327 189,096 257,679 Total Commercial 3,361,283 2,785,514 4,253,909 Residential Units 2,995 1,944 2,071 Square footage 2,409,354 1,805,892 2,101,026 Total Square Footage 5,770,637 4,591,407 6,354,935 • Due in large part to the Amazon campus construction, the office sector development has led the pace, exceeding the full build-out scenario by over 50o/0. Construction of laboratories and offices for biotechnology purposes is also exceeding the ful] build- out scenario. Retail space development to date is 99.7% of the full build-out scenario and housing development is at 87% of the higher estimate. As Chart 5 demonstrates, both of these sectors are exceeding the partial build-out scenarios. • , �s�race4ies South Lake Union Development Update (2004-2010) 11 � ��,�� .�, .__ �. Chart S. Total (2004-2010) Development in South Lake Union by Sector Compared to Projections (Square Feet) �,000,000 6,000,000 — -- s,aoo,000 — 4,000,000 — 3,000,000 - ❑Full 6uild-ou[ 2,000,000 � OPartialBuild-out 1.00Q000 ❑Ac[ual 0 .� �_, � I � I� �'�` c� � ya a� e 0`°� �� ¢� Fe�` �,a�c� F°�� 9�`�F �e� �a`¢ o S°' � �� C° Chart 6 illustrates the total real estate development in South Lake Union from 2004 to 2010 compared to t11e partial and full build-out estimates. Chart 6. Total Development in 2010 Compared to 20-Year Projections (Square Feet) 16,000,000 ; — — -- — – 14,000,000 12,000,000 10,000,000 � Pull Build Out 8,000,000 - � Acnial 6,OOQ000 �- DevelopmenC(s.E) Parcial Build Out 4,000,000 - 2,000,000 -: — 0 � v1 �0 t� 0] O� o N m � tn v'J t� d T o O O O O O O � � � � � N O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N �cyan saaceyies South Lalce Union Development Update (2004-2010) 12 � I' ,� �� c- . . ,.,.._. . ._ • Job Creation The Sommers analysis estimated job creation due to real estate development in South Lake Union. The report identified employment additions in three areas. • Employees in new commercial developments • Construction jobs associated with new building • Indirect jobs from economic activity This update focuses only on the direct job generators--new employees and construction jobs. Sommers Methodology The new job calculations in the Sommers analysis were based on numbers of employees per square foot of new development, and the construction jobs were calculated by the value of real estate construction. The following assumptions formed the foundation of the projections: • 3.72 employees per square foot of new office development • 3.72 employees per square foot of new retail development • 2.5 employees per square foot of new biotech development • • 7 construction jobs per$1 million in new construction spending Given the real estate development activity in the commercial sector during the 2004-ZO10 period, the job base in South Lake Union is exceeding the projections. Sommers estimated the range of direct permanent jobs to be approximately 8,500 to 10,500 by 2010. The actual employment number is over 13,500, 29%greater than the full build-out estimate. Table 6lists the jobs by sector and Chart 7 illustrates the progress toward the 2020 direct job development projections. Table 6.Actual Jobs vs. Projected During 2004-2010 2004-10 Full Build- Partial out Build-out Actual Biotech 4,112 3,783 4,462 Office 5,425 4,029 8,226 Retail 961 703 959 Total 10,497 8,516 13,647 • � � scra�epies Suudi Lake Union Devel�pment Upda�o (20U4-201U) 13 � � Chart 7. Total Jobs in 2010 Compared to 20-Year Projections 25,000 ao,000 I; A�i,�� y Full Build Ou[ 15,000 10,000 Parr.ial Build Out 5,000 , ' i 0 ! ^Y lf. I� N M 11! f� CC O C O O C N C O O O O O O C O O O C O O O O N N N N N N N N N N N N N N N N N Due to the greater real estate development activity, annual construction jobs have exceeded [he projections in the Sommers report, as Table 7 details. Table 7. Actual Annual Construction Jobs vs. Projected During 2004-2010 2004-10 Full Partial Build-out Build-out Actual Annual Construction Jobs 682 520 996 Total 682 520 996 �<tia�i svategies South Lake Union Developmen[Update (2004-2010) 14 � I' .,. :� �� • Revenue Generation Property Tax Sommers Methodology The increased revenue stream to the City of Seattle from property taxes is calculated from the additional assessed value due to development. Sommers estimated this increase and then multiplied it by the City's property tax assessment rate. For these calculations, Sommers used the following assumptions: • Cost of new construction would be: o $251 per square foot for biotechnology space o $200 per square foot for office and retail development o $100 per square foot for residential development • Land would comprise 15.38o/0 of the overall property value • City of Seattle's property tax rate equaled $2.94 per$1,000 assessed value City Revenues � The development in the South Lake Union neighborhood between has increased the neighborhood's assessed value by just over$1.1 billion from 2004 until 2010. This • amount is greater than the projections for the full build out scenario, as shown in Table S. Table 8.Actual Value of Development vs. Projected During 2004-2010 zooa-io Full Build-out Partial Build-out Actual 2004 $159,789,699 $159,789,699 $114,684,100 2005 $63,433,804 $63,433,804 $83,506,400 2006 $106,525,960 $106,525,960 $19,914,100 2007 $183,791,416 5183,791,416 5355,643,000 2005 $115,311,597 $62,960,414 $298,228,630 2009 $115,311,597 $62,960,414 $184,524,763 2010 $115,311,597 $62,960,414 $50,218,200 Total $559,475,669 5702,422,120 $1,106,719,193 • so-areqies South Lal:c Union Development Update (2004-2010) 15 � Consequently,the additional property tax revenue directed to the City of Seattle has outpaced projections. The City is now receiving over$3.4 million per year in additional property tax revenues due to South Lake Union development. Table 9.Additional Property Tax Revenue to City of Seattle vs. Projected During 2004-2010 2ooa-10 Full Build-out Partial Build-out Actual 2004 $469,782 $469,782 $337,171 2005 5656,277 $656,277 $587,734 2006 $969,463 $969,463 $652,961 2007 $1,509,810 51,509,810 51,726,572 2008 $1,848,826 $1,694,914 52,644,660 2009 52,187,842 $1,880,017 $3,232,194 2010 $2,526,858 $2,065,121 $3,414,653 Total $10,168,860 $9,245,385 $12,595,975 B&O Tax Sommers Methodology Business and Occupation taxes for companies operating in South Lake Union will accrue to the City of Seattle. Sommers used the following assumptions to calculate the City's B&0 revenue stream: • B&O tax receipts for office employees equal $306 per year per employee • B&0 tax receipts for retail employees equal $254 per year per employee • There will be no B&0 receipts for biotechnology employees due to state tax exemptions. City Revenues As noted earlier, employment growth in South Lake Union has exceeded projections. Consequently, the estimated B&0 revenue from companies in South Lake Union has outpaced the projections, as shown in Table 10. c>��,scrareqies South Lake Union Development Update (2004-ZO10) 16 � � „. .. , • Table 10.Additional B&O Tax Revenue to City of Seattle vs. Projected During 2004-2010 2004-10 Full Build-out Partial Build-out Actual Office $5,760,408 $5,039,420 $7,048,137 Retail $1,096,350 $987,538 $931,130 Total $6,856,758 $6,026,958 $7,979,267 Sales Tax Sommers Methodology Sales tax revenue accrues to the City through assessments on construction and retail sales. The construction sales tax does not apply to biotechnology buildings due to a statewide tax exemption. The following are assumptions used by Sommers to project sales tax revenues: ' • Sales tax rate of 9.3% • City's share of sales tax revenue is 9.659% • Retail sales equal $15.53 per square foot of retail establishments • • There will be no construction sales tax receipts for biotechnology developments due to state tax exemptions. City Revenues Expected sales tax revenues as a result of South Lake Union development are exceeding the full build-out scenario, due to the increased real estate development and the creation of space for retail activity. Table 11. Additional Sales Tax Revenue to City of Seattle vs. Proiected During 2004-2010 Period 2004-10 Full Build-out Partial Build-out Actual Construction SalesTax $5,007,715 $3,453,910 $5,281,855 RetailSalesTax $1,475,918 51,268,179 $1,478,214 Total $6,483,636 54,722,089 $6,760,069 • � ,, � scracegies Souch Lal:c Union Deeelopmen[ U�idatc (ZU04�-ZO10) 17 � Utility Taxes Sommers Methodology Utilities taxes are generated by the usage of water, sewer, electric, garbage, telephone and therma] energy services. The following are assumptions used by Sommers to project utility tax revenues: • Utility tax revenues will total: 0 20.6 cents per residential square foot. 0 22.2 cents per office and retail square foot. 0 42.6 cents per square foot of biotechnology/lab space. City Revenues Due to the increased real estate activity in South Lake Union,the City of Seattle is realizing increased revenues from utility taxes. Consistent with Sommers' methodology,the City has realized $1.75 million more revenue from utility taxes than expected under the full build-out scenario. Table 12. Additional Utility Tax Revenue to City of Seattle vs. Proiected During 2004-2010 Period 2004-10 Full Build-out Partial Build-out Actual Utility Tax 55,959,590 $5,325,401 $7,705,232 Total $5,959,590 55,325,401 57,705,232 Total City Revenue to Date The real estate development in the South Lake Union urban center has generated over$35 million in tax revenue to the City of Seattle between 2004 and 2010. This rate exceeds the full build-out scenario by 19% and has produced $5.5 million more than the most optimistic estimation in the Sommers report. Table 13 summarizes the increased tax revenues to the City of Seattle and Chart 8 compares the revenues to the Sommers Report projections. " egies South Lake Union Developmen[ Update (2004-2010) 18 � C; c<�_:n,,,stmt. ,... 'YV'7 Table 13. Additional Total Tax Revenue to City of Seattle • vs. Projected During 2004-2010 Period 2004-10 Full Build-out Partial Build-out Actual PropertyTax $10,168,860 $9,245,385 $12,595,975 B&0 Tax $6,856,758 $6,026,958 $7,979,267 SalesTax 56,483,636 $4,722,089 $6,760,069 Utility Tax $5,959,590 $5,325,401 $7,705,232 Total $29,468,844 $25,319,833 535,040,543 Chart 8.Additional Total Ta�c Revenue to City of Seattle vs. Projected During 2004-2010 Period sao,000,000 — $35,000,000 -- $30,000,000 �- • �25,000,000 - $20,000,000 + - ❑Full f3uild-uut $15,OOQ000 ❑Partial Build-ou[ ❑Actual $10,000.000 $S,OOOA00 � � � . I $0 � _ [- � F- F I � �' � v �' ' v` y `° _ 6 � � O n. • �� .� svategies South Lake 1_Inion Deeelupment Upda[e (�L004-ZO10) 19 � ' _ Conclusion Between 2004 and 2010, the real estate development activities in Seattle's South Lake Union neighborhood have exceeded the projections incorporated in Paul Sommers' The Potential Economic and Fiscal Impacts of South Lake Union Development report. Since 2004, the assessed value of newly constructed building exceeds $1.1 billion. In this timeframe, the neighborhood has attracted over 13,000 permanent jobs, achieving over 72% of the City's 2024 Comprehensive Plan goal for the South Lake Union Urban Center. This magnitude of construction and economic activity has resulted in an average of$5 million per year in additional tax revenues to the City of Seattle. � scrace9ies South Lake Union Development Update (2004-2010) 20 � �' .. . • Appendix 1. Phase 1 (2004-2007) Development Projects in South Lake Union by Sector (Square Feet) Net Rentable Square Feet Tenant Biotech Office Retail/Hotel Residential Units Tommy 8ahama 79,302 7,318 - Novo Nardisk 96,188 Alcyone 1,570 120.000 161 NBBJ 182.221 23.792 Skanska 5.000 124,000 172 AmIi535 5.234 256.746 197 Borealis 3,700 32,920 53 Caims Apartments 2,910 70,801 109 Denny Park Apartments 5,587 27,869 58 Dexter Lake Union Apartments 28,641 257.767 201 Discovery Center 12,900 Merck/Rosetta 140,605 • Howard S.W right Offce 95,840 8,006 Mirabella(CCRC) 36,207 687,941 396 Neptune Apartments 14,000 7,222 195,351 200 Rollin Street 17,784 220,813 208 SBRI 105,000 7,411 U.W. Phasel 105,000 U.W. Phase II 256,000 VeerLofts 1,425 73,305 99 Weber-Thompson Bldg 36,405 3,593 Group Heal[h, Microsoft 289,000 42,424 FHCRC Yale Building 3�2,000 FHCRC Arnold Building 353,918 Cancer Care Alliance 51,600 Blume Company �77,056 5,000 1,657,367 709,668 212,824 2,067,513 1,854 • �;� �< � strategies Suudi Lal:c Union DcaclopmcntUpdate (2004�-2U10J 21 � Appendix 2. Phase 2 (2008-2010) Development Projects in South Lake Union by Sector (Square Feet) Net Rentable Square Feet Residential Biotech O�ce HoteURetail Residential Units Tenant Amazon 315,513 10,200 Amazon 113.889 1.595 Amazon 158.333 14,038 Amazon 276.806 39.500 DECS 46,995 50 LIHI 588 36,101 83 SCCA 16,054 2,831 44,486 80 W eiss-Jen kins 69.541 1,880 Residential 21,696 4 Amazon 544,487 24,931 Total 0 1,494,623 95,563 149,278 217 - - scraieqies South Lai:c Union DccclopmcntUpdare (2004-2010) 22 � �d �' � ;II � II�, �� I��u��l � � �� _� , ��, , VANCOUVER '� y W A 5 H I N G i O N � ._._:1_i�:� .Jer' �IJCCW1wlh:TR.P Analysis of the Return on Investment in City of Vancouver powntown Development � Final Report November 16, 2006 Prepared By: Paul Lewis Project Oversight By: Steve Burdick, Director of Economic Development, City of Vancouver Ginger Metcalf, Executive Director, Identity Clark County John Becker Blease, Ph.D., Assistant Professor of Finance, WSU-Vancouver Deborah Ewing, Commercial Real Estate Broker, Eric Fuller & Associates Dave Groth, MAI, Managing Owner, PGP Valuation Debra McCracken, Senior Property Manager, Norris, Beggs & Simpson Bob Ridgley, Retired Chief Executive Officer, NW Natural • �11 U I� �, ��Ilu�� IIII � ,- c��y ar t . VANCOUVER - �'� y W A 5 H I N G T O N ,_:._��:r.. . .•+r�'EJ 7�b_l_nGw4.k'TiG. Analysis of the Return on Investment in City of Vancouver powntown Development Ta ble of Contents Section PaQe 1 .0 Executive Summary 1 2.0 Background and Introduction 3 3.0 Investment Summary 4 4.0 Benefit Summary 9 5.0 Return on Investment 18 6.0 Other Observations 21 Appendices A. Acknowledgements B. Selected Assumptions and Sources Analysis of Return on Investment in Downtown Development Final Report • 1.0 Executive Summary . The total public investment in downtown Vancouver economic development supporting development initiated between 1997 and 2006 is estimated at $54.6 million discounted to a present value in 2006. - The total City of Vancouver investment in downtown Vancouver economic development supporting development initiated between 1997 and 2006 is estimated at $26.9 million. This amount excludes investments using restricted funds such as City sales taxes dedicated to transportation capital, Community Development Block Grant awards or Federal transportation grants. - The State of Washington investment in the Vancouver Convention Center is estimated at $27J million. . The total State and local tax revenue attributed to the developments supported by the public investment from 1997 through 2025 is estimated at $163.6 million discounted to a present value in 2006. - The total City of Vancouver tax revenue generated through 2025 is estimated at $26.7 million. City tax sources include property, sales, utility, real estate excise and State shared lodging taxes. • - The total tax revenue generated through 2025 for Clark County, the Port of Vancouver, The Fort Vancouver Regional Library, GTRAN and the Vancouver School District is estimated at $23.9 million. - The total State of Washington tax revenue generated through 2025 is estimated at $113.0 million (2006 NPV). State tax sources include sales, business & occupation, property, utility, and real estate excise taxes. . The total net revenue benefit, after subtracting the likely tax benefits from development without public support and adding the impact of the sale of the VancouverCenter and West Coast Bank parking garages, is $133.5 million discounted to a present value in 2006. - The total net beneflt to the City of Vancouver is estimated at $27.0 million, the total net benefit to other localjurisdictions is estimated at $19.2 million and the total net benefit to the State of Washington is estimated at $87.2 million. • The rate of return to the City of Vancouver from its investment in downtown Vancouver economic development is estimated at 4.3% or roughly equivalent to the City's return on its invested funds. - The net present value of the City's investments combined with the City's net benefit is positive. • - The estimated return on investment is 11 .0 percent after including the net benefit to the City and all other localjurisdictions in Clark County. November 16, 2006 Page 1 Analysis of Return on Investment in Downtown Development Final Report . The overall net present value of the State of Washington's investment and net benefit is $59.4 million in 2006 net present value terms. The State's percentage return on investment is not reportable since the State's cash flow is positive in each year. . The overall ra[e of return on the combined City and State investment in downtown Vancower economic development is 35.9 percent and is much higher than the City's retum due to the large State net benefit. • The total estimated new construction cost of the public and private development directly related to the City's investments is estimated at $200 million with a total private investment estimated at between $250 million and $300 million. • The estimated public investment leverage ratio associated with the City's investments is 9.3:1 while the overall public investment leverage ratio is estimated at 4.6:1 . . The public and private development directly related to public investments generated other economic benefits to the community. - The total on-going employment attributed to the new development is estimated at 1,474jobs. - The total employment attributed to the construction of the new I development is estimated 489jobs - The total annual economic activity directly attributed to the new development is estimated at $135 million. - An estimated $110,000 per year in new funding for the Southwest I Washington Convention and Visitors Bureau. • The new development directly supported the goals of the City's Comprehensive Plan and the Esther Short Subarea and Redevelopment Plan. - The development directly supported ten of the Comprehensive � Plan's Economic Development and Housing policies. - The development generated between 45 percent and 75 percent of the targets forjobs, commercial development and housing included in the Esther Short Subarea and Redevelopment Plan. The next section of the report presents a summary of the development included in the analysis. Section 3 presents the analysis relating to the investments made by the City, the State and the private sector. Section 4 includes a summary of the estimated benefits and Section 5 summarizes the estimated return on investment. Additional observations from the analysis are presented in Section 6. November 16, 2006 Page 2 Analysis of Return on Investment in Downtown Development Final Report • 2.0 Background and Introduction This report presents the result of an analysis of the return on the City of Vancouver's investment in downtown Vancouver economic development. "Downtown Vancouver" is defined as that area west of Interstate 5, south of Mill Plain Boulevard, east of the railroad tracks, and north of the Columbia River with the addition of Main Street between Mill Plain Boulevard and Fourth Plain Boulevard. The analysis includes City investments made between 1997 and 2006, investments planned for 2007 and related costs in future years. The analysis excludes investments using restricted funds such as Community Development Block Grant awards or Federal transportation grants. The analysis assessed the benefits associated with ten development projects initiated between 1997 and 2006. The analysis begins in 1997 because that was the year the City formed the Downtown Redevelopment Authority and reconstituted the Economic Development Department. Table 2.1 presents a summary of each development. Table 2.1 - Development Summary A roximate S uare Feet tructure Residential Develooment ffi e Retail Residential Other Total Parkina � • City Cen[er 12 Cinc:ma 1,500 1.500 52,967 55,967 � - Fl�ri[aqe Place 13.000 150,000 163.000 55,000 137 West Coas[Bank 75.000 - 35,000 - 110.000 78345 21 Kirkland Union Manor � - 45,323 - 45,323 - 61 An[hem Park (1) 14,127 2,499 60,206 - 76,832 45�219 62 VancouverCenter- Ph 1 99,285 14,854 205,631 - 319,770 275.000 228 Esther Short Commons � 24,908 136,308 - 161,216 � 160 Hil[on Convenlion CenCer Hotel 19,533 11,588 - 7A4,;31 175,652 59.570 - Lewis and Clark Plaza � 38,870 - 38,870 - 46 ColumbianDevelopment(2) tOt.aob 5724 � - 'IOZt30 - � VancouverCenter- Ph 2 (2) 99.5n9 i4,615 33,240 147,404 20 Total 410,400 88,668 704,578 197,498 1.40'I.164 573,134 735 (�)Oflico vquare feet esfimated ba��d nn n�„�-...,�,,, „ (l)UPvclOPmentsnOtComple[r�d:uOINOr '.��n 3owcr _if�oll�.rn[Cu��.•i The City of Vancouver Economic Development Department and Identity Clark County sponsored this analysis. An oversight committee provided overall guidance for the analysis, reviewed key assumptions and provided feedback on the initial results. Oversight committee members included: • John Becker Blease, Ph.D., Assistant Prof. of Finance, WSU-Vancouver • Deborah Ewing, Commercial Real Estate Broker, Eric fuller & Associates • Dave Groth, MAI, Managing Owner, PGP Valuation • Debra McCracken, Senior Property Manager, Norris, Beggs & Simpson • Bob Ridgley, Retired Chief Executive Officer, NW Natural • A number of people provided data and information used in the analysis. Acknowledgements are included in Appendix A. November 16, 2006 Page 3 Analysis of Return on Investment in Downtown Development Final Report 3.0 Investment Summary Total Public Investment by Jurisdiction The total public investment in downtown Vancouver related to the public and private development initiated between 1997 and 2006 is estimated at $54.6 million discounted to a net present value (NPV) in 2006. The City of Vancouver represents approximately 48 percent of the investment and the State of Washington the remaining 52 percent. Chart 3.1 - Total Public Investment by Jurisdiction Total Public Investment in Downtown Vancouver Net Present Value byJurisdiction: $54,620,000 State of Washington, $27,750,000 , 51% City of Vancouver. �26,870,000 , 49% City of Vancouver Investment bv Tvpe The City of Vancouver investment in downtown Vancouver between 1997 and 2007 is estimated $26.9 million, discounted to a net present value (NPV) in 2006 using a discount rate equal to the return the City earns on funds in its investment pool. The 2006 NPV by type of investment is shown in Chart 3.2 below. November 16, 2006 Page 4 Analysis of Return on Investment in Downtown Development Final Report • Chart 3.2 - City of Vancouver Investment by Type o( Investment City of Vancouver powntown Development Investment Net Present Value byType of Investment: $26.9 Million Transportation, Land $5,100,000 , 19% Assembly/Subsidy, $3,940,000 , 15% Esther Short Park, $2,260,000 , 8% Staff Support, $2,530,000 , 9% Utility Undergrounding, $1,230,000 , 5% • Low Income Housing, Parking. $630,000 , 2% $10,160,000 , 38% Other, $1,030,000 , 4% Financial support for the City's parking garages in the VancouverCenter and West Coast Bank buildings represent the largest City investment in downtown Vancouver. Other significant investments include land assembly - primarily the purchase and demolition of the former Lucky Lager brewery properties - transportation improvements and the renovation of Esther Short Park. The impact of the ten year Multi-Family Housing Tax Exemption is reflected in the property tax revenue estimates included as part of the analysis in Section 4 below. An explanation of this impact is provided at the end of this section and Section 6 includes additional observations related to the ten year Multi-Family Housing Tax Exemption. The investment analysis exdudes investment of restricted , funds. Investments of restricted funds in downtown Vancouver development include approximately $1 .5 million of dedicated Sales Tax funding for the 4�h Street realignment transportation project, $440,000 in Federal transportation grants received for signal and intersection improvements and various amounts of CDBG funding for sidewalk replacement and the public park in the Anthem • Park development. November 16, 2006 Page S Analysis of Return on Investment in Downtown Development Final Report City of Vancouver Investment by Year The City of Vancouver investment amount by year, shown in Chart 3.3 below, varies considerably and is projected to extend through 2019. The investments reflect a large one time expenditure in 2001 related to the Brewery Blocks and funding for improvements to Sixth and Esther streets in 2005. Operating expenditures for the City's Economic Development department, repayment of Economic Development bonds and support for the City's Parking F�and represent expenditures from 2008 through 2019. ' Chart 3.3 - City of Vancouver Investment by Year - Nominal Dollars City of Vancouver powntown Development Investment Nominal Net Investment Artaunt byYear: 1997-2025 ss,000,000 sa,soo,000 sa,000,000 $3,500,000 $3,000,000 � $2.500.000 � $2,000,000 $1,500,��000 I _ I I .I 1 I, '.� I I .I I I I I ■ ■ � . . $1.000,000 5500,000 Oa O� OI O O O O O O O O O �8 O � N (7 O N IpD I� OJ OI Np oN N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N State of Washington Investment The State of Washington investment in downtown Vancouver is estimated at $27.8 million. The largest share of this investment - approximately 92 percent - represents the 0 033% State sales tax rebate provided to the City of Vancower Public Facilities DisVict (PFD) and the Clark County Public Facilities District. Both the Ciry �nd County PFDs have dedicated their State sales tax rebate to the Vancouver Convention Center. The analysis reFlects the agreement between the Ciry PFD and the County PFD to limit the amount of funding for the Convention Center Hotel with the amount over the limit going to fund the Clark County Exhibit Hall at the Fairgrounds. The balance of the State's investment consists of State shared lodging taxes attributed to the Hilton Convention Center Hotel and a small reimbursement of environmental cleanup expenses at the VancouverCenter and Vancouver Conveniion Center sites. November 16, 2006 Page 6 Analysis of Return on Investment in Downtown Development Final Report • Priva[e Investmenl Private investment in downtown Vancouver includes financial support for the renovation of Esther Short Park and private funding of development projects. An estimated $3.6 million donation from George and Carolyn Propstra funded Propstra Square, the Bell Tower/ Glockenspiel and water feature at Esther Short Park and provided funds to support maintenance of the flower beds surrounding Propstra Square. The amount of private investment in the development identified in Table 2.1 on page 2 has been reported at between $250 million and $300 million. Historical Context I City of Vancouver investments in downtown economic development began before 1997. A brief review identified a total of eleven City-supported development projects from approximately 1980 through 1997. The largest of these projects were the Century Tel, Riverview Tower, Main Place and Murdock Plaza office buildings. The City also supported Upper Main streetscape improvements, Transit Mall development and redevelopment of other buildings • such as the former Vancouver Furniture store. Table 3.1 below compares the general types of investments the City used before and after 1997 and the frequency of use. Note that the City Council adopted the City's Multi-Family Housing Tax Exemption ordinance in 1997 Table 3.1 - City of Vancouver Development Support - Pre and Post 1997 Number of Times Used Tvpe of Develoament Su�oort -1980-1996 1997-2006 Land Assembly/Subsidy 4 6 Transportation Improvements 2 6 Parking 5 4 Staff Support Yes Yes Utility Undergrounding 1 2 CDBG Funding 3 2 Low Income Housing Support 1 Multi-Family Housing Tax Exemption 5 Subarea Planning/Streamlined Permitting Yes • November 16, 2006 Page 7 Analysis of Return on Investment in Downtown Development Final Report Estimated Impact of Ten Year Multi-Familv Propertv Tax Exemption The City of Vancouver granted a ten year multi-family property tax exemption to five of the developments identified in Table 2.1 , and two smaller developments (a total of ten units) not shown in the table. The tax exemption applies only to the designated multi-family units in each development. The developments in Table 2.1 granted a multi-family property tax exemption included in the Heritage Place, VancouverCenter (apartment buildings only), Kirkland Union Manor, Anthem Park and Lewis & Clark Plaza developments. The exempted properties represent 471 residential units and an estimated $65.8 million in new construction valuation. The exemption on the multi-family housing has two impacts. First, the cost of new construction related to the eligible multi-family units is not added to the tax roll until ten years after construction is completed. As a result, none of the governmentjurisdictions receive the additional property tax revenue related to the new construction during that ten year period. Second, the owners of the exempt multi-family property do not pay property tax on the exempted new construction - although they do pay property taxes on the land - for a period of ten years. The new construction cost of the non-exempted development is added to the tax roll and [he owners of that development pay property tax on both the land and improvements. The multi-family housing tax exemption impacts the revenues of the various jurisdictions by providing them with less revenue than what they might have received had the exact same development been built without the exemption. Assuming the same development had been built without the exemption, [he lost potential revenue to the State and local governments, in 2006 net present value terms, is estimated at $11 .8 million. However, an analysis of the Heritage Place mixed-use development shows that the estimated present value of the total tax revenue attributed to that development through 2025 - including the impact of the multi-family housing tax exemption - is approximately 87 percent higher than the estimated tax revenue that would have been received if the property had beeri developed at a density consistent with other downtown developments built without the City's financial participation. Section 6 includes additional analysis of the ten year multi-family property tax exemption for the Heritage Place development. November 16, 2006 Page 8 Analysis of Return on Investment in Downtown Development Final Report • 4.0 Benefit Summary Total Tax Revenue by Jurisdiction The total tax revenue attributed to the public and private development in downtown between 1997 and 2006 (see Table 2.1) is estimated $163.6 million, discounted to a net present value (NPV) in 2006 using a discount rate equal to the City's return on funds in its investment pool. Chart 4.1 below shows the total tax revenue (2006 NPV) byjurisdiction. Chart 4.1 - Total Tax Revenue by Jurisdiction City of Vancouver powntown Development Tax Revenue: Total Net Present Value byJurisdiction - 1997-2025 City of Vancouver, I $26,690,000 , 16.3% • Vancower School District, $11,380,000 , 7.0% State of Clark CourKy, Washington, $5,580,000 , 3.4% $112,980,000 , 69.1% GTRAN, $4,700,000 , 2.9% _. , Fort Vancower Regional Library, Port of Vancouver, $1,150,000 , 0.7% $1,070,000 , 0.7% The State of Washington receives the largest share of the total tax revenue representing an estimated 69.1 percent. The City of Vancouver receives an estimated 16.3 percent. Collectively, other local governments including Vancouver School District, Clark County, GTRAN, Fort Vancouver Regional Library and the Port of Vancouver receive 14.6 percent of the total tax benefit. • Not included in the tax benefit analysis are impact fees, development fees, business license fees or fees for City water, wastewater or stormwater utilities. November 16, 2006 Page 9 Analysis of Return on Investment in Downtown Development Final Report Total Tax Revenue b�ax Source Chart 4.2 presents the overall distribution of the estimated $163.6 million in total tax revenue across the various tax sources. As shown, State and local sales taxes represent slightly less than half of the revenues. State and local property taxes and [he State Business & Occupation tax each represent 19.7 percent of the total tax revenue. The State of Washington receives 100 percent of the Business & Occupation Tax, 81 percent of the Sales Tax, 72 percent of the Real Estate Excise Tax, 30 percent of the Utility Tax and 21 percent of the Property Tax. Note that approximately $18.1 million of the revenue or 11 percent directly suppoRs funding for public education. Chart 4.2 - Total Tax Revenue by Tax Source City of Vancouver powntown Development Tax Revenue: Total Net Present Value byTax Source - 1997-2025 i Property Tax, $32,180,000 , 19.7% State Business & Sales Tax, Occupation Tax, $8i,510,000 , $32,180,000 , 49.8% 197% Utility Tax, $7,750,000 , 4.7% I State Shared Real Estate Excise Lodging Tax, � Tax, $7,860,000 , $2,080,000 , 1.3% 4.8% November 16, 2006 Page 10 Analysis of Return on Investment in Downtown Development Final Report • Sales Tax Base bv Source The sales tax is the largest source of revenue attributed to the pubiic and private development in downtown and the largest share of the sales tax base comes from the newly developed retail space. The residents, office workers and hotel guests associated with the other new development generate a significant share of the taxable retail sales at the new space with the balance expected to come from employees of other businesses located downtown and other patrons. Taxable retail purchases at locations other than the new retail development by occupants of the new residential units represent slightly less than one-quarter of the sales tax base followed by revenues from the Convention Center Hotel at 19.0 percent. Taxable purchases by employers, employees and visitors not made at the new retail space make up the balance of the sales tax base. The analysis assumed that 30 percent of the retail sales associa[ed with the new residents and 50 percent of the retail sales associated with hotel guest5 would take place outside the City of Vancouvec Chart 4.3 shows [he distribution of the sales tax base attributed to the new development. Chart 4.3 - Sales Tax Base by Source • City of Vancouver powntown Development Tax Revenue: Total Sales Tax Base bySource Residerrts - Not at New Retail 22.8% New Retail Space 48.5% � onverrtion Cerrter Hotel 19.0% Employers Visitors - Not at 5.7% New Retail Employees - Not �,g% at New Retail 2.1% • November 16, 2006 Page 11 Analysis of Return on Investment in Downtown Development Final Report City of Vancouver Total Tax Revenue by Tax Source The distribution of the estimated $26.7 million in tax revenue accruing to the City of Vancouver is relatively balanced across the City's three major tax sources. The sales tax is the largest revenue source at 34.2 percent followed by the property and utility taxes at 29.3 and 20.4 percent respectively. Contributing to the more balanced distribution across tax sources as compared to the total distribution is the lower City sales tax rate and higher City utility tax rates compared to the State of Washington. Chart 4.4 shows the distribution of City tax revenue by tax source. Chart 4.4 - City of Vancouver Total Tax Revenue by Tax Source City of Vancouver powntown Development Tax Revenue: City of Vancouver Net Present Value by Tax Source 1997-2025 Property Tax, $7.820,000 , 29.3% Sales Tax, $9,140,000 , 34.2°/a Utility Tax, $5,440,000 , 20.4% � State Shared Lodging Tax, Real Estate Excise $2,080,000 , 7.8% Tax, $2,210,000 , 8.3% November 16, 2006 Page 12 Analysis of Return on Investment in Downtown Development Final Report • Total Net Benefit The analysis presented to this point reflec[s the gross tax revenue attributed to the development identified in Table 2.1. An accurate analysis of the return on public investment in downtown Vancouver requires an adjustment to take into account the estimated tax revenue that would have been generated by development occurring without the public investment. In addition, the analysis needs to include the impact of the potential sale of the City's parking garages. The net benefit analysis described below incorporates both of these factors. The first adjustment is a reduction to reflect the estimated revenue the various jurisdictions would have received assuming no City or State investment. The analysis used the Pioneer Building at 1400 Washington and the Angelo Building at 404 E. 15�h as examples of the type of development that would have occurred without public support. Taken together these buildings have an estimated 33,633 square feet of office space and 80,000 square feet of land. The analysis looked at the revenue that this type of development would have produced if it had been developed on land where the Heritage Place, VancouverCenter, West Coast Bank, Esther Short Commons, Convention Center • Hotel and Columbian developments are located. Table 4.1 compares the actual development at those sites to the development assumed with no City or State investment. Table 4.1 - Development with No Public Investment v. Actual Development No Public Actual Investment Develo� Difference % Diff. Land Area (SF) 555,652 555.552 0`% Land Ared (Acres) 12J5 12.75 0% r i v I m n Office S�ace 233J69 394,773 �61,004 69`% Re[ail Space 84,689 84,689 Residen[ial S ace - 560,179 560,179 Ho[el/Conven[ion Space 144,531 144,531 Total S ace 233,769 1,184,172 950,403 407% Jobs JObS 632 1,370 738 117% Avera e Jobs/Acre 50 107 58 117�/� Resi ential Devel m n Residential Units 5G6 566 • Po ulation 849 849 Avera e Units/Acre 44 November 16, 2006 Page 13 Analysis of Return on Investment in Downtown Development Final Report The estimated revenue from development at the identified sites with no public investment is $34.0 million. The analysis subtracts this amount from the estimated revenue from the actual development to determine the net tax revenue attributable to the public investment. The second adjustment adds an estimated $3.9 million in 2006 NPV benefit to the City associated with the sale of the VancouverCenter and West Coast Bank Building parking garages in 2016. The City's development agreements with the developers of both buildings provide options for the developer to purchase their respective parking garages beginning in 2016. Conservative estimates of the net revenue for the parking garages results in sales proceeds in 2016 that are an estimated $1.0 million less than the principal amount of the debt attributed to the garages in that year. However, over the period 2016-2025, the City is better off selling the garages and contributing the $1 .0 million to pay off the related principal amount of the debt than it is if it kept the garages (and paid the full principal and interest) over the same period. Extending the analysis to 2030 creates a scenario where the City is indifferent between selling and keeping the parking garages. Extending the analysis past 2030 would result in an economic advantage for the City to retain the parking garages. The analysis also includes the surplus revenue estimated for [he City's Parking Fund from 2017 through 2025. Chart 4.5 shows the distribution of the estimated $133.5 million total net benefit byjurisdiction after adjusting For the estimated revenue from development without public participation and the net impact from the sale of the VancouverCenter and West Coast Bank building parking garages. Note that the City's net beneFit is an estimated $300,000 higher than the tax benefit shown in Chart 4.1 due to the net effect of a $3.6 million reduction for development without public investment and a $3.9 million addition related to the sale of the parking garages. November 16, 2006 Page 14 Analysis of Return on Investment in Downtown Development Final Report • Chart 4.5 - Total Net Benefit Attributed to Public Investment by Jurisdiction City of Vancouver powntown Development Net Benefit I Total Net Present Value byJurisdiction: $133.5 Million i City of Vancouver, $27,030,000 , 20.3% Vancower School District, $8,680,000 , 6.5°/a Clark County, State of $4,470,000 , 3.4% Washington, $87,190,000 , GTRAN, 65.3% $4,390,000 , 3.3% • I Fort Vancouver Regional Library, Port of Vancower, $860,000 , 0.6% $810,000 , 0.6% Tot.al Net Benefit by Year The net benefit amount by year, shown in Chart 4.6 below, increases rapidly , through the construction period and then grows more gradually through 2025. I The higher amount in 2004 reflects one time sales tax revenues associated with construction. Growth in the annual net benefit from 2012 through 2015 reflects the expiration of the Multi Family Housing Proper[y Tax Exemptions. The decrease in 2016 and the increase in 2017 reflect the impact of the sale of the VancouverCenter and West Coast Bank parking garages. The amounts shown in Chart 4.6 are adjusted for the estimated benefits that would have been generated by development without City and State support. • November 16, 2006 Page 15 Analysis of Return on Investment in Downtown Development Final Report Chart 4.6 - Nominal Net Benefit by Year: All Jurisdictions City of Vancouver powntown Development Net Benefit Total Nominal Net Benefit Amount byYear: 1997-2025 $�a,000,000 $i2,000,000 �io,000.000 $B4O00,000 �I - - - - - $6,000,000 - $4,OOQ000 I $2.000,000 - - , $- , , _ ... . . , , � mm o � c� in �o m rn o c� n v in � n m m o �v �n v u� m o a o o � o 0 0 0 0 � N H �v n i m m rn o 0 0 0 0 0 0 0 0 0 `o 0 0 0 0 0 0 0 0 0 0 o a o 0 o I N N N N N N N N N N N N [V N N N N N N N N N N N N N Citv of Vancouver Net Benefit bv Year The Ciry of Vancouver net benefit by year, shown in Chart 4.7 below, shows a pattern similar to the total net benefit in Chart 4.6. The annual net benefit increases rapidly through the construction period and then grows more gradually through 2025. The signifcant increase in 2004 reflects the impact of one time sales tax revenues associated with construction. Growth in the annual net benefit from 2012 through 2015 reflects the expiration of the Multi Family Housing Property Tax Exemptions. The decrease in 2016 reFlects a payment to pay off the debt on the VancouverCenter and West Coast Bank parking garages at the time of their sale. The growth in 2017 reflects the projected net operating surplus from the City's Parking Fund after the sale of the garages. Again, the amounts shown in Chart 4.7 are adjusted for the estimated benefits that would have been generated by development without City and State support. November 16, 2006 Page 16 Analysis of Return on Investment in Downtown Development Final Report • Chart 4.7 - Nominal Net Benefit by Year: City of Vancouver Cityof Vancouver powntown Development Net Benefit City of Vancouver Nominal Net Benefit Amount by Year: 1997-2025 $3,500,000 $3,000,000 $2,500,000 - - - $2,OOQ000 � - - � - - - $1,500,000 � - $�$SOOA00 -.� � .� ■ .I .I.I � I I .I I I . I . . . .. . . .. $_ g �+ . 5� . . � Q , � . . .. , � Yri ffi Y 8 8 S � o � 8 � 25 � �`o� � R � � o o � o 0 0 0 0 0 0 N N N N N N N N N N N N N ry N N N N N • • November 16, 2006 Page 17 Analysis of Return on Investment in Downtown Development Final Report 5.0 Return on Investment Return on Investment - Citv Investment Onlv The City of Vancouver's estimated investment in downtown economic development combined with the City's estimated net benefit through 2025 shows a rate of return on the City's investment of 4.3 percent. That rate of return is approximately equal to the annual return on the City's invested funds (4.2 percent) for the period 1997 through 2005 and the projected return for the period 2006 through 2014 (also 4.2 percent). The City's rate of return is dependent on revenues received from 2017 through 2025. Chart 5.1 shows the City of Vancouver's estimated rate of return for different time periods. The estimated rate of return if the net benefit ended in 2020 instead of 2025 is -0.3 percent. In contrast, the City's estimated rate of return increases to 6.3 percent if the ending date is extended from 2025 to 2030. In fact, the net benefit will extend indefinitely. The analysis used an ending year of 2025 or twenty years from 2006 to reflect the City's Downtown Investment Guidelines principle of using a twenty year time horizon for analyzing the City's financial participation in public/private partnerships. Chart 5.1 - City of Vancouver Rate of Return for Selected Time Periods: City Investment Onlv City of Vancouver Rate of Return on Investment for Selected Time Periods � 1997-2030 �''' „ 6.3% 1997-2025 �4 3% 1997-2020 -0.3% � 1997-2015 -12.7 "�` ;�-t��_�.;:_.i.- :. - •..� -15% -10% -5% 0% 5% 10% The estimated rate of return increases when the analysis includes the net benefit received by other government agencies. The rate of return is estimated at 11 .0 percent when including the estimated net benefits to Clark County, Vancouver School District, Fort Vancouver Regional Library, the Port of Vancouver, and C- TRAN. The estimated rate of return on the City's investment increases to 47.6 percent after including the estimated net benefit accruing to the State and all localjurisdictions and comparing that net benefit to the City's investment. November 16, 2006 Page 18 Analysis of Return on Investment in Downtown Development Final Report • Chart 5.2 - Rate of Return by Jurisdiction: City Investment Only Return on Investment for City of Vancouver, All Local Jurisdictions and Combined Local 8� State: 1997-2025 Combined Local 8 State ' 7.6% All Local Jurisdictions �— 11.0% City of Vancouver 04.3%o I 0% 10% 20% 30% 40% 50% An alternate assessment of the City's return on investment is to look at the net present value. The City of Vancouver's Downtown Investment Guidelines includes a principle that states that the City's financial participation in public/private partnerships should have a positive net present value over a period of twenty years. The analysis in this report included a broader definition of • fnancial participation than the one outlined in the Downtown Investment Guidelines. Specifically, in addition to the City's direct financial support for specific projects (ex: parking garage acquisition) the analysis included other City financial support for downtown development including staff time, transportation improvements, utility undergrounding, [he purchase and demolition of the Lucky Lager Brewery property and the redevelopment of Esther Short Park. Using this expanded definition of financial participation the estimated net present value of the City's Financial participation is $150,000. Return on Investment - State of Washington Investment The State of Washington's estimated investment in downtown economic development combined with the State's estimated net benefit through 2025 shows a positive return of $59.4 million, discounted to a present value in 2006. This reflects the estimated $87.2 million in net benefit and the estimated $27.8 million investment. The State's percentage return on investment is not repor[able since the State's net cash flow is positive in each year. The State's net present value return increases to $67.6 million when the State's investment and net benefit attributed to the Vancouver Convention Center and Hotel are excluded. The State's net present value is higher when the impact of • the Vancouver Convention Center and Hotel is excluded due to the negative net present value ($8.1 million) associated with the State's investment when the net beneft is limited to the impact of the Convention Center and Hotel. November 16, 2006 Page 19 Analysis of Return on Investment in Downtown Development Final Report Return on Investment - All Public Investment The total estimated public investment in downtown economic development combined with the total estimated net benefit through 2025 shows a positive net present value of $78.9 million. The estimated rate of return on the total public investment is 35.9 percent. The overall rate of return includes the full $133.5 million (2006 NPV) in estimated net benefit and the $54.6 million (2006 NPV) in public investment. Pavback Ratio An alternative assessment of the return on the public investment in economic development is to calculate the payback ratio. The payback ratio is the estimated total benefit divided by the estimated total investment. The estimated payback ratio for the City of Vancouver is 1.0. The payback ratio for the City's investment increases to 1.7 when the benefit to the other localjurisdictions is included. The estimated payback ratio for the State of Washington is 3.1. The total payback ratio, including the total net benefit to alljurisdictions and the total City and State investment is 2.4. All of the payback ratio calculations use amounts presented in 2006 net present value terms. Public Investment Leverage Ratio The amount of private investment stimulated by the public investment is another measure of the effectiveness of economic development investments. According to an October 2004 memo from Leland Consulting Group included in the Vancouver Community Center Vision project revitalization efforts around the nation typically have "a leverage ratio of private to public investment of 4:1 or 5:1 or higher." The public investment leverage ratio for the downtown Vancouver development included in this analysis is 4.6:1 , assuming a total private investment of $250 million and a total City and State investment of $54.6 million. The public investment leverage ratio increases to 9.3:1 when including the estimated $250 million of private investment and only the $26.9 miilion of the City's investment. All of the public investment leverage ratio calculations use amounts presented in 2006 net present value terms. November 16, 2006 Page 20 Analysis of Return on Investment in Downtown Development Final Report • 6.0 Other Observations City of Vancouver Comprehensive Plan Policy Implementation In addition to the fiscal benefits to State and local government the ten downtown development projects included in this analysis helped to implement several City of Vancouver planning objectives. vancouver Comprehensive Plan Policies supported by the downtown development include: • Economic Development Comprehensive Plan Policies - ED-1 . Jobs - Housing Balance: Increase the ratio ofjobs to residents in the City of Vancouver and the region. • The development projects included in this analysis generated a ratio ofjobs to population ratio of 1 .3 compared to the estimated ratio for the entire City of 0.5. - ED-3. Public Revenue Enhancement: Promote development which enhances revenue generation to provide public services. • The development projects include in this analysis are estimated to generate annual revenues in excess of $6 million for public agencies. • - ED-6. Efficient Use Of Employment Land: Maximize utilization of land designated for employment through more intensive new building construction, and redevelopment and intensification of existing sites. • Thejobs per acre ratio for the VancouverCenter, West Coast Bank, Convention Center Hotel and Columbian developments is estimated at 147 compared to an estimated 50 for other office buildings in downtown and near Vancouver Mall. . Housing Comprehensive Plan Policies - H-1. Housing Options: Provide for a range of housing types and densities for all economic segments of the population. Encourage and support equal and fair access to housing for renters and homeowners. • The housing developments included in this analysis support a variety of housing options including affordable housing, live/work housing, senior housing and high-end condominiums. - H-2. Affordability: Provide affordable housing by formulating innovative policies, regulations and practices, and establishing secure funding mechanisms. Target affordability programs toward • below median area income. November 16, 2006 Page 21 Analysis of Return on Investment in Downtown Development Final Report • The housing developments included in the Esther Short Commons, Kirkland Union Manor, Anthem Park and Lewis and Clark Plaza developments support affordable housing. - H-4. Innovative Zoning: Encourage innovative housing policies which provide for affordable housing and maintain neighborhood character. Develop inclusionary housing policies which provide for compatible affordable housing within new subdivision developments. • Housing units are placed above retail space in each of the mixed use developments. • The Lewis & Clark Plaza development includes public art exposition space. - H-5. Housing Placement Near 5ervices and Centers: Facilitate siting of higher density housing near public transporiation facilities and in designated centers and corridors. • The housing developments included in this analysis are all placed near services and centers. - H-6. Special Needs Housing: Facilitate housing for special needs populations dispersed throughout Vancouver and the region. Such housing may consist of residential-care facilities, shelters, group homes, or low income housing, and should be located near transportation and other services such as health care, schools, and stores. • The housing development included in the Esther Short Commons, Kirkland Union Manor, Anthem Park and Lewis and Clark Plaza developments support this policy. - H-8. PublioPrivate Partnerships Facilitate enhanced partnerships between public, private, and non-profit sectors to address affordable housing. • All of the housing developments included in the analysis support this policy. - H-9. Funding for Housing: Pursue funding mechanisms to support affordable housing involving local, state, and federal agencies. • The housing development included in the Esther Short Commons, Kirkland Union Manor, Anthem Park and Lewis and Ciark Plaza developments support this policy. November 16, 2006 Page 22 Analysis of Return on Investment in Downtown Development Final Report • Esther 5hort Subarea and Redevelopment Plan Implementation The development included in this analysis supported several of the Esther Short Subarea and Redevelopment Plan (Plan) objectives. Specifically, the supported developmen[s inside the Esther Short Subarea resulted in: . Development of 407,462 square feet of commercial space or 75 percent of the 540,000 targeted in the Plan. • Development of 545 new residential units housing an estimated 817 new residents or 54 percent of the 1,010 new residential units and 1,500 new residents envisioned in the Plan. • Creation of 1,220 directjobs or 45 percent of the 2,700 newjobs targeted in the Plan. Other Economic and Communit,y Beneflts In addition to the fiscal benefits to State and local government and the support for planning policy implementation the ten downtown development projects included in this analysis generated other benefits to the locai economy and the community. Those benefits include: • • An estimated 1,474 directjobs and an estimated 2,898 totaljobs. • An estimated 489 constructionjobs. • An estimated $135 million (in 2006 dollars) in total direct economic activity and an estimated $275 million in total direct and indirect economic activity. • An estimated $10,000 per year in 911 tax revenue for the Clark Regional Communications Agency plus additional 911 tax revenue for the State of Washington. • An estimated $100,000 in new annual revenue for the 5outhwest Washington Convention and Visitors Bureau. • An estimated $1 .1 million in City of Vancouver Park impact fees. • An estimated $800,000 in Vancouver School District school impact fees. • Support for the recruitment and retention of employers in downtown vancouver. • An increase in the City's commercial tax base to help mitigate the relatively high percentage of the City's tax base that is residential. Commercial tax base generally requires less services than residential. • Promotion of Vancouver in the Portland Metropolitan Area and the region. • Cncouraging investment by other land owners in the redevelopment of other buildings in downtown Vancouver. • Expanded tourism with sixty-five conventions held at the Vancouver • Convention Center that each required more than 50 hotel rooms attracting more than 17,000 out of town attendees. November 16, 2006 Page 23 Analysis of Return on Investment in Downtown Development Final Report . Expanded offering of community events and attractions - More than 50 events were held in Esther Short Park in 2006 attracting an estimated 80,000 attendees. - The Vancouver Farmer's Market summer season attracts up to 15,000 people and the region's first indoor Farmer's Market opened in the Spring 2006 in Esther Short Commons. - Local events such as the Festival of Trees have an expanded venue to accommodate more clisplay space and participants. Analysis of the Heritage Place Multi-F�milv Property Tax Exemption An analysis of the net benefit attributed to the Heritage Place development can help highlight the impact of the Multi-Family Property Tax Exemption. Heritage Place, developed between 1998 and 2001 to the North of Esther Short Park, included 137 residential units and approximately 13,000 square feet of commercial space. Direct City participation in Heritage Place included selling the land at below market value, vacating Daniels Street for use as a pedestrian plaza, contributing to the construction of the public plaza, completing sidewalk and other street improvements along Eighth Street and granting a ten year property tax exemption to the multi-family portion of the development. Table 6.1 shows the estimated tax revenue attributed to the actual Heritage Place development byjurisdiction and compares that amount to the estimated tax revenue from the same development but without the ten year multi-family property tax exemption. The estimated total tax revenue generated by the Heritage Place development is $12.9 million compared to $19.8 million for the same development without the tax exemption, discounted to a net present value in 2006. As shown, the tax revenue generated from the actual development is $6.9 million or 35 percent lower. The percentage difference by jurisdiction varies and depends on thejurisdiction's dependency on the property tax. The Vancouver School District, the Port of Vancouver and the Fort Vancouver Regional Library - alljurisdictions that are dependent on the property tax - show the largest difference. In contrast, C-TRAN shows no difference since it generates all of its local tax revenue from the sales tax. November 16, 2006 Page 24 Analysis of Return on Investment in Downtown Development Final Report • Table 6.1 - Heritage Place Tax Revenue Comoarison: Actual v. No Exemption Actual No Pro ert Tax Development Exemption Difterence °/a Diff. Jurisdiction Cit of Vancouver S 2,210,000 � 3,870,000 S (�,6G0,000) -43% TOYaI Clark Coun[ � 420,000 � 1,280,000 $ (860,000) 67% Vancouver School District S 870,000 S 3,160,000 3 (2.290,000) 72% POfL Of VHf1COUVEf S 70.000 � 300.000 $ (230,000) 77% Fort Vancouver Re ional Librar 5 80,000 � 330,000 3 (250,000) -76% GTRAN $ 400.000 $ 400,000 $ 0% State of Washin ton $ 8.870,000 $ 10,510.000 $ (1.640.000) -16% Total AllJurisdictions $ 12,920,000 $ 19,850,000 $ (6,930,000 -35% The tax revenues attributed to Heritage Place without the ten year multi-family property tax exemption assume that the same development would have been built had the City not granted the exemption and supported the development in other ways. According to City staff and City staff reports to the Vancouver City Council, development of lower density would have likely occurred without the City's support. Table 6.2 compares the estimated tax revenue attributed to the actual Heritage Place development byjurisdiction and compares that • amount to the estimated tax revenue from a lower density development built without the ten year multi-family property tax exemption or other City support. For this analysis, the lower density development is assumed to be approximately 40,000 square feet of office space with on-site parking. As shown, the tax revenue generated from the actual development is $6.0 million higher (87 percent) than the lower density development. As in Table 6.1, the impact on a specificjurisdiction depends on its dependence on the property tax. The City of Vancouver is estimated to generate approximately $1 .5 million more from the actual development with the tax exemption than from a lower density development. For comparison purposes, an estimated 76,000 square feet of office space would be needed to generate the same revenue as the actual development including the impact of the property tax exemption. Table 6.2 - Heritage Place Tax Revenue Comoarison: Actual v. Lower Density Actual Lower Densitv Development Development Diff r n °o DiH. ' n Cit of Vancouver S 2,210,000 5 730,000 $ 1.480.000 203%0 TOtal Clafk COunT S 420,000 $ 230,000 $ 190,000 83% V�ncouver School District $ 870,000 $ 550,000 $ 320,000 58% Por[of Vancouver $ 70,000 $ 50,000 $ 20,000 40% Fort Vancouver Re ional Librar $ 80,000 $ 60,000 $ 20,000 33% • C-TRAN $ 400,000 $ 60,000 3 340,000 567% State of W�shin ton $ 8,870,000 $ 5,230,000 5 3,6a0.000 70% Total All Jurisdictions $ 12,920,000 $ 6,910,000 $ 6,010,000 87% November 16, 2006 Page 25 Analysis of Return on Investment in Downtown Development Final Report Comparison to Development Outside Downtown Development in downtown Vancouver differs from the development in other parts of the City of Vancouver. Table 6.3 compares the downtown mixed use development included in this analysis with the proposed Eastgate Plaza (Fourth Plain) and Landing at Evergreen (136�r� Ave and Mill Plain) developments. i Table 6.3 - Develoament Profiles: Downtown, Fourth Plain and 136th Avenue Downtown Landing at Mixed Use ' Eastgate Plaza Z Evergreen Z nd Area L�nd Arca (Acres) 12.8 47.0 50.0 D velo ment S u r F t Office S ace 394,773 - 180,000 Retail S ace 84,689 449,000 340,000 Industrial S ace 161,225 Residen[ial S ace 560,179 - 265,000 Hotel/Convention S aCe 144 531 96 000 Total S ace 1,184,172 610,225 881,000 S uarc FceVAcre 92,849 12,984 17,620 mmerci I P rkin S aces Strucwred 1,177 - Surface 374 2.217 �,772 Total 1,551 2,217 1,772 Est. Surface Parkin Acres 2.6 15.3 12.2 R i ntilDvl t Rcsidential Units 566 NA 210 Po ulation 849 368 Avcr�icc Units/Acre 44 4 Estimated Construction Cost iotal $ 210,000,000 $ 70,000,000 $ 129,000,000 CosVS FooT $ U7 $ 115 $ 146 Estimated Jobs Jobs 1,370 1,117 1,344 Avcr�� e Jobs/Acre 107 24 27 Public Infrastrucwrc Cost/Job $ 1,672 $ 12,196 $ 20,047 Gro � A iv' Estimated Gross Economic Activit $ 130,200,000 $ 108,400,000 $ 93,000,000 Estimated Gross Activit /Job $ 95,000 $ 97,000 $ 69,000 Es[imated Taxable Retail Sales $ 21,200,000 $ 112,300,000 $ 85,000,000 VancouverCenter, West Coast Bank Esther Shorf Comn�ions Heritage Place, Columbian and Conference Cenrer hlarel developments ' Oevelopment profile(rom developer ma�kefing in�.iterir�l::ind City of Vancouver ' BUmates developed usiny 2006 assumptions used rn the analysis ° From Apri12003 Focused Public Investment Plan Infrastrucrure Cost Repor[ (Ga�k Counry) November 16, 2006 Page 26 Analysis of Return on Investment in Downtown Development Final Report • The downtown developments summarized in Table 6.3 indude VancouverCenter, West Coast Bank, Esther Short Commons, Heritage Place, Columbian and the Vancouver Convention Center Hotel. Observations from the comparison in Table 6.3 include: • The downtown development is on a smaller land area - approximately 75 percent smaller. • The downtown development includes a larger amount of developed square footage, including: - More office space. - Less retail space. - Less industrial space. - More residential space. - More hotel/convention space. . The majority of the parking spaces for the downtown development are in structured parking garages while all the parking spaces in the other developments are on surface lots and require more land area for parking. • The downtown development supports more residential uni[s and more population. • • The downtown development has a higher overall construction cost and a higher average construction cost per developed square foot. . The downtown development supports morejobs and a higher number of jobs per acre of development. . The downtown development requires a smaller public infrastructure investment perjob according to data from the April 2003 Focused Public Investment Plan Infrastructure Cost Report prepared for Clark County. . The downtown development has a larger amount of gross economic activity and slightly higher gross economic activity perjob. . The downtown development has a smaller amount of estimated taxable retail sales. • November 16, 2006 Page 27 Analysis of Return on Investment in Downtown Development Final Report Appendix A: Acknowledgements The following people contributed information, expertise or other support for the analysis induded in this report. • John Becker Blease, Ph.D., Assistant Prof. of Finance, WSU-Vancouver • Deborah Ewing, Commercial Real Estate Broker, Eric Fuller & Associates • Dave Groth, MAI, Managing Owner, PGP Valuation • Debra McCracken, Senior Property Manager, Norris, Beggs & Simpson • Bob Ridgley, Retired Chief Executive Officer, NW Natural • Steve Burdick, Director, City of Vancouver Economic Development • Ginger Metcalf, Executive Director, Identity Clark County • Clancie Adams, Clark County Assessor's Office • Judi Bailey, Program & Event Coordinator (former), City of Vancouver • DeeDee Baldwin, Accountant, City of Vancouver • Gerald Baugh, Business Recruitment Manager, City of Vancouver • Barbara Basnett, Budget Analyst, City of Vancouver • Tanya Bogush-Stakhov, Accountant, City of Vancouver • Cara Cantonwine, Program & Event Coordinator, City of Vancouver • Wayne Dillinger, Accountant, City of Vancouver • Chad Eiken, Planning Review Manager - DRS, City of Vancouver • Tamara Fuller, Senior Associate Broker, Norris, Beggs & Simpson • Antoinette Gasba«e, Business Manager, Parks & Recreation, City of Vancouver • Linda Gellings, Accounting Manager (former), City of Vancouver • Johnnie Haggerty, Assistant Planner - DRS, City of Vancouver • Tim Haldeman, Property and Risk Manager, City of Vancouver • Michael Jacobs, Parking Manager, City of Vancouver • Carrie Lewellen, Treasurer, City of Vancouver • Gerry Link, Hotel Manager, Vancouver Hilton Convention Center • Raelyn McJilton, Records Clerk, City of Vancouver • Georgiana McNees, Accountant, City of Vancouver • Tonya Patterson, Economic Development Admin. Assistant, City of Vancouver • David Perlick, Business Manager - Transportation, City of Vancouver . Angie Potter, Lead Permit Specialist - DRS, City of Vancouver • Gena Pugh, Economic Development Admin. Assistant, City of Vancouver . Matt Ransom, Concurrency Manager, City of Vancouver • Mark Rauchenstein, Commercial Real Property Appraiser, Clark County • Christine Smith, Accountant, City of Vancouver . Amanda Taylor, Accountant, City of Vancouver • Tracy Tuntland, Engineering Supervisor - DRS, City of Vancouver November 16, 2006 Page A-1 Analysis of Return on Investment in Downtown Development Final Report • Appendix B: Selected Assumptions and Sources City Investment • Parking Garage - Historical and projected revenues and expenses through 2008 from City Accounting department and Parking Manager - Parking Manager estimate of growth rates for revenues and expenses used for 2008-2025 - Full amount of General fund subsidy included as attributable to development included in the analysis . Transportation Expenses - From City Transportation . Debt Service on Economic Development Bonds - From City Treasurer . Economic Development Operating Budget - Fifty percent of actual expenditures from 1997-2005 - Average growth in expenditures from 1997-2005 of 5.2 percent applied to estimate future expenditures - Fifty percent of estimated expenditures for 2006 and 2007 • - Twelve and one half percent oF estimated expenditures in 2008 - Six and one quarter percent of estimated expenditures in 2009 - Three percent of estimated expenditures from 2010-2025 . Repayment of Brewery Property Acquisition Loan - Payments from City Accounting staff . Downtown Initiatives Fund Expenditures - City Economic Development staff , - City Accounting staff I . Value of Street Vacation - Not included if land used for public plaza - Valued at estimated market price for other land (from staff reports) . Payments Received for Land/Other - Deducted from investments - Obtained from City Accounting and Economic Development staff • Operating revenues and expenses associated with Esther Short Park are not included State Investment • Historical �ctual City of Vancouver and Clark County Public Facilities District State Sales Tax Credit Contributions • Projected City of Vancouver and Clark County Public Facilities District State Sales Tax Credit Contributions • - 4.5 percent annual increases beginning in 2006 November 16, 2006 Page B-1 Analysis of Return on Investment in Downtown Development Final Report - Total amount less City Lodging Tax contribution compared to Tax Related Revenues Cap • Excess amount over Cap allocated to the Clark County Exhibit Hall per agreement • 5tate Shared Lodging Tax - Used same methodology as City Lodging Tax Revenue • Department of Ecology Environmental Clean Up Reimbursemen[ - City staff Property Tax Base . New Construction Assessed Value - Assessor's Office 2006 Marshall & Swift construction cost data for VancouverCenter used for office, retail and residential - International Code Council 2006 used for Theatre - RS Means 2006 data used for structured parking with validation from R&H Construction memo - Adjusted by Engineering News Record (ENR) Seattle Building Cost Index for prior years and the ENR 2001-2005 AARG for future years • Multi-Family Tax Abatement - Reduced new construction by construction costs as identified on certificates - Exceptions: Some new construction values added to tax roll before exemption applied - Some developments had note in Assessor's Office system regarding I value to be added when exemption expires Sales Tax Base . New Construction Costs (hard costs) - 75 percent of new construction assessed values - Adjusted by Engineering News Record Building Cost Index for Seattle in prior years and the Index's 2001-2005 average increase in future years . Tenant Improvements/Space Updating - $15 per square foot every 8 years • New Residential Units I - 43 percent of inedian household income from Bureau of Labor Statistics data - Less 30 percent "leakage"' in 2006 to Oregon and outside City of Vancouver - Adjusted in prior years using Portland CPI-U ■ Portland 2000 2005 CPI-U = 1 .9 percent • Future inflation estimated at 2.5 percent November 16, 2006 Page B-2 Analysis of Return on Investment in Downtown Development Final Report • . Employers - -$900 perjob for office and other supplies - Based on 2005 City of Vancouver Finance Department actual expenditures . Employees - $2,360 per employee - 2004 data from International Council of Shopping Centers - Source: March 2006 memo to City of Vancouver from Leland Consulting Group • New Commercial/Retail Space - Used $250 per square foot all new space - Higher amount ($339) from 2004 Intemational Council of Shopping Centers; Source: March 2006 memo to City of Vancouver from Leland Consulting Group - October 2004 report by Reed Hansen and Associates for City of Bremerton • $2�0 per sf for new retail space • �750 per sf for fast food space . Visitors • - Hotel room nights based on estimate of occupancy and rate validated to July 2006 year to date operating results - Hotel food and beverage and conference services revenue based on current estimates with inflation • Visitor retail spending - Hotel occupancy at 1.35 people per room night - Spending of $50 per day per person: $30 per day on food and beverage services and $20 per day on retail ■ Source: 2005 Washington State Tourism study and 2004 Clark County data - Dean Runyan and Associates - Assume 50 percent of spending fn Vancouver • Adjustment to Avoid Double Counting - Deduct estimated spending at new retail space • 10 percent of household spending - Leland memo • 75 percent of employee spending - estimate • 50 percent of visitor spending in Vancouver Lodgina Tax Base . Hotel occupancy stabilizes at 70 percent in 2009 . Average rate of $103 in 2006 increasing at 3 percent per ycar • November 16, 2006 Page B-3 Analysis of Return on Investment in Downtown Development Final Report Utility Tax Base • Commercial Space - Building Owners and Managers (BOMA) 2005 suburban Portland survey data on utility expenditures per square foot - Telephone estimated $10 per month per employee in 2006 - Adjusted in prior years using Portland CPI-U - Future inflation estimated at 2.5 percent • Residential Units - Water and sewer: current utility rates for multi-family units - Electricity estimated at $67 per month - Natural gas estimated at $10 per month • Telephone and cable TV estimated at $50 per month each Business & Occupation Tax Base • Tax Base per Job - Based on 2005 statewide average tax base perjob for select NACIS codes; Source: State of Washington Department of Labor; Department of Revenue I � Commercial/Retail: Food Service/Drinking • Office: Professional and Business Services • Theatre: Arts, Entertainment & Leisure • Hotel: Accommodation Real Estate Excise Tax Base • New assessed valuation with appreciation at 3.5 percent per year . Twelve and one half percent turnover per year used (Bureau of �abor Statistics: -15%) Tax Rates by Jurisdiction and Year . Property Tax - Tax rates apply to new construction value only at time construction is added to the tax rolls - New construction levy amount equals new construction in year occurs multiplied by the tax rate in prior year - Revenue grows at 1 percent per year - Historical actual rates used - Projected rates used average rate decline per year 2002-2006 = 3.5 percent . Sales Tax - Historical rates reflect changes and credits - Current rates projected through 2025 November 16, 2006 Page B-4 Analysis of Return on Investment in Downtown Development Final Report • Job Estimates • Offce/commercial square feet perjob: 370 • Retail square feet perjob: 470 • Source: 1999 METRO study and other sources Pooulation Estimates • People per Multi-Family Residence: 1 .5 • Clark County Comprehensive Plan Estimate: 1 .9 . Other Sources: 1 .3 Multiplier Estimates . Total Jobs per Million Dollars of Direct Output: 24.70 . Total Employment per Direct Job: 1 .97 • Construction per Million Dollars of Cost 24.57 • Source: State of Washington Office of Financial Management 1997 Input- Output Multiplier Report Adiustment tor Impact of Sale of Parking Garages • Option to Purchase Beginning in 2016 • = Higher of market value or debt amount Valuation • Projected per space revenue and expenses per Rick Williams estimates for Riverwest parking garage � Assume 10 percent higher net revenue for private ownership • Capitalization rate = 8 percent - Market value -$1 million less than debt in 2016 • Estimated Net Present Value: 2016-2025 - Do not sell = $2.0 million - Sell and contribute -$1.0 million to retire debt - �3.9 million • Estimated Parking Fund Net Revenue Included Adiustment for Lower Density Development- No Public Investment . Total Site Area Developed: 12.8 Acres • Excludes Lewis & Clark Plaza, Kirkland Union Manor, Anthem Park, and City Center 12 Cinemas • Office Buildings Estimated at 42 percent of Site Area - Angelo Building at 404 E. 15�" ■ -40,000 sf lot and 16,587 sf office space - Pioneer Building at 1400 Washington • -40,000 sf lot and 17,076 sf office space . Tax Bene(it Model Applied to New Development • November 16, 2006 Page B-5 N SUSTAINABLE ;-� � THURSTON � � � - , — � - � s i r �� , , R + � � � a � , SUSTAINABL. � �' THURSTON ��=� . � _ _ . Placemaking in Renton: Significant Public Investment and Long-Term Commitment Over the last 15 years, the City of Renton has fostered two successful redevelopment projects that C��.v✓��d,�wn �.�.iii-�� have transfonned sparse landscapes into dense, walkable neighborhoods with mixed-use/rnulti-family , housing and active commercial districts. Downtown Renton and The Landing (an urban village-style � shopping and residen5al developmenU are examples of placemaking thal required significant public '� �_ investment in facilities and infrastructure, and a clear long-term commitment and vision to achieve buy- '' '`s�: . in from developers. Despite their successes in these efforts, the City faces ongoing challenges in the + �-" -"'�' wake of the current recession, and is currently wrestling with how ro increase market demand, sustain � � �',Y €�� ; ` developer interest, and facilitate new growth and developmenL � _ HISTORY/CONTEXT , Downtown Renton I � _�,� With lhe transfer of the Boeing Corporation's 777 operations to Everett in the early 1990s, Renton experienced significant employment loss and massive office vacancy. In response, City leaders decided to take a more proactive approach to rewve the econorny through economic developrnent investments r_ � ��_t They formed a blue ribbon Commission made up of Chamber of Comrnerce rnembers, school leaders. _ �i/'�� , and other stakeholders to craft the City's economic development plan The Commission recommended ,� �. focusing on growth in the downtown core by re-establishing it as a vibrant residential and commercial '_"�4.._�y�a��r 5; - �.i, '. disUicl (as it had been m the 1960s prior to the opening ot Southcenter Malp and transfonning it into +''��` ;i ` � a major activiry hub of South King County. � r ,3 � ' � y +,.+N��, r ('� � ��.' By the mid-1990s,the Ci ty had develo ped a lon g-term vision and be gan providin g the critical investments + ,i�� `• �� -(5�% necessary to facilitate the redevelopment process. A key initiative was assisting in moving a set of r�r �� )+ ',�'�'� � .., �. .�t+3 �r+�� dealerships, which had dominated the downtown landscape, to an au[o mall off of I-405, as well as `�'�"` `�• ' "�' .�`�`� purchasing and repurposing the vacanl land downtown. The City also worked with King County Metro to develop a transit center, constructed a large parking structure, and built a 1-acre park (the Piazza). Developer interest and investment was quick to follow, and three mixed-use apartment projects were initially built by Dally Homes, Inc. (totaling approximately 260 units). These were some of the first transil-oriented developments in King County. New businesses began to fill in the retail space, and more businesses opened in the adjacent historic downtown core, which had also seen some private i nvestme nt. �oinrnFi=rlM1lniketStudy � � . . . . � �, � RENTON � Since the initial redevelopment, the downtown neighborhood's commercial landscape has seen ronsiderable turnover, with businesses closing, and new businesses opening. Vacancy rates are relatively low, but a numberof cornmercial spaces remain empty. Four new rnulti-family developments, at.��-'� with over 400 new residential units, have been built since the rTiid 1990s. Overall, City leaders are t ` �� _ pleased with the progress that has been made, but believe the neighborhood has not yet reached its ��`� � Re� �� ",«; full potential as a vibrant, bustling regional hub. wK.. . ,,y�, ' � �� `� �� The Landing The Landing, an urban-village style shopping development wilh 600,000 square feet of retail, a � � � sa� 14-screen cinema, and 880 rnulti-family residential uni[s, opened in 2008 on 46 acres of land �Y' in North Renton previously held by Boeing. The roots of the project can be traced back to 2003, � when Boeing requested an induslrial-to-commercial rezone for 13 acres of holdings near Boeing � � � ` � Field so they could sell the property to the Target Corporahon for a stand-alone retail store. The City � ' I agreed to lhe rezone, but on the condition that additional holdings were also rezoned as part of a • �. ', brwder development project. The City and Boeing worked together to create a new mmprehensive plan designation, new design regulations, and a new development agreement that committed L the City to investing in public infrasiructure that supported redevelopment (as long as there were i , ; revenues anticipated for the projecU. In total, the City invested $22.5 million in new roads and utility infrastructure financed by bonds on future revenues, as well as State, Federal, and Economic Development Administration (EDA) grants. j ^ ��i . ��:,,' � The project gamered interest from developer Harvest Partners, who agreed to build The Landing as a j� "'y, hybrid shopping center with some power center characte�istics, but also a dense, pedestnan oriented ,� ore around a movie theatre. In order to assist with parking garage costs that would have been prohibitive to the walkable neighborhood commercial porlion of the development, the Cily agreed to make an additional $10.6 rnillion investment in a parking struclure. Developer Fairfield Residential won signed on to construct two large multi-family developments on the Landing site. The residential developments opened in 2009 and 2010, respectively, and added 880 units. Overall, City leaders and developers view The Landing as a success, with an 80°i commercial lease rate, and tenants reporting shong revenues. In addition, the residential developments are sustaining relatively low vacancy rates. However, leadership would like to see rnore of the smaller, vacant shop spaces near the core filled to provide more unique character to the developrnent. � ..:r, t � � SUSTAINABL� ��• n THURSTON ''_� STRATEGIES AND TOOLS The City of Renton has utilized a nwnber of strategies and tools in their efforts to prornote denser development and vibrant cornmercial districts: Investing Heavily in Faalities and Infras[ructure. In both downtown Renton and The Landing, the Ciry has made substantial public inveslments in iacilities and intrastructure. City leaders believe tha[ merely providing 1-2 dispersed investments or prodding the rnarket through incentives would not, on their own, have been enough to attract developer interest or spur meaningful growth. They believe a large, comprehensive suite of investments supporting multiple projects is critical to ensuring success. Since the mid-1990s, Renton has invested more than $40 million in its downtown. During the iniUal downrown revitalization efforts, mvestments were made on several fronts. The City relocated the car dealerships, which were seen as a signrficant impediment to dense growth downtown, to a new auto-mall near the highway, and then purchased the vacated land and actively worked to repurpose it, which included building a water line, sidewalks and other infrastructure to support new development. They worked closely with Metro to bwld a bus-oriented transit center, and constructed a 575-stall parking garege that served as a Park and Ride for Metro. In addition, they built a new 1-acre park downtown. Currently, the Ciry is working with the King Counry Library System to construct a new 15,000-square foot library in the downtown core. The Landing's success depended on public investment in infrastructure. Since Boeing had its own water and electrical systems, as well as streets that did not meel City standards, the City had to completely redevelop the utility infrastruclure and build a new road network. In addition, as noted above, the City spent an extra $]0.6 rnillion to conshuct a 600-stall parking garage to ensure that the developer would build a dense, walkable core, as opposed to another big box power center (which would have been built if the investment was not made). In total, the City made over $33 million in inilial investments to support The Landing. Demonstrating Long-term Commltment. The comprehensive investments in facilities and infrastructure were part of a broader strategy to demonstrate that the City was making a genuine, lasting conunitrnent to the projects, which was critical for developer buy-in. This commitment was also demonstrated through the developrnent of a well-defined vision and plan roward achieving it. In both downtown Renton and The Landing, the City presented themselves as a true partner to developers through their clear long-term commitment and vision for the areas. � � ��.�,�.�,i .,,,��..��,��.i, � � � RENTON Partnenn9 wrth Local Transit A9ency. The City's partnership with King County Metro was instrumental in the transformation of downtown Renton. This partnership allowed for the design and construction of the Renton Transit Center, which provided increased foot traffic and bolstered the City's efforts to turn the neighborhood into a regional hu6. As noted above, it also led ro the r.onstruction of a large parking garage that would serve as a Metro Park and Ride. In addilion, Metro signed a 10-year lease for Park and Ride stalls inside the garage of one of the ini6al mixed-use developments. The lease helped the developer undenvrite the cost of the building, and allowed them to construct another deck of underground parking. Providmg Incentives to Developers.Renron has miplemented a couple of incentives aimed at attracting and shaping developinenL • P��p=��;i,a� E�,en,imc��- The City has leveraged a statewide tax exemption program that allows certaln �urisdictions to give a multi-year break in property taxes for multi-family housing projects. They initially limfted the exemptions ro three areas of the City, fncluding downtown Renton and The Landing. However, The Landing had its designatfon removed once 840 multi-family units were secured, as [he City felt there were enough units that incentives were no longer warranted. In downtown Renton, the designation is still in plar.e and all subsequent rnixed-use and multi-family developments (aside from the initial three) in the area have utilized the exemptions. • i':-�n�u i �� •��.i� � �:n�-��,� � �,i.��-i i'��,e��i� In an attempt to promote long-term ownershlp, Renton irnplemented a program that waived permit and rnitiga[ion fees for owner-occupied multi-family projects (i.e. condo developinents). However, only two projects (both 50-unit condo developments) have used the prograrn, one of which sold only three units and was foreclosed upon. The economic downtum and weak condo market have likely affected interest in this program. Fnancu�gTool:Bon<ling off of Future Revenues. In order to fund the significant up-front public investments for The Landing, the City decided to issue bonds based on the expecled future City tax revenues that would be generated by the sales activiry at The Landing, assurning 1% sales tax growth annually. While the indial sales figures have not been suffirient to (ully fund the debt service (or the public investments, City leaders 6elieve that the project was necessary to jump start the transforrnation of this aiea of town. Further, as the economy rebounds and The Landing reaches iis potential, the City believes that the (inancial returns will match the economic development success of the project. Increasing Employment ease and CividCultural Attractions. City leadership has also recognized the potential benefits of increasing downtown Renton's ernployment 6ase and drawing rnore civic attractions to the area. As noted, the CiTy is currently working with the King County Library System to construct a new library in the downtown core, which will provide an opportunity to bring additional civic adivity downtown. There is currently a community process underway to determine what that activfty should be. In addition, the City's Arts&Culture Master Plan has a suggestion for a "galvanizing" public art project that would support downtown, and lhe Renton History Museum Downtown also has an arnbitious business plan. Various other options have been considered, such as moving City Hall into downtown, but ideas such as this are long term in nature. This is an area the City continues to work on as an addrtional strategy to support economic development. � • • n'THURSTON�``'=�'_ .. . _ . � KEY MARKET FORCES Several key market forces have influenced Renton's redevelopinent efforts. These include: Geoqraphlc Location. Renton benefits from its central location within the Puget Sound region, close to a number of the region's major ernployment centers(most notably, Downtown Seattle and the Eastside)and Sea-Tac Airport, with access to several interstate and Slnle highways. The City's pivo[al location rnakes it attractive to potential residen[s and commuters, bolsters its role as a regional hub, and brings hundreds of thousands of drivers across its borders every day. Population Growth.Renton has seen a 107°o growth in population since 1990, with much o( the increase coming through single family home consUuction in suburban parts o( the City dunng recent real-estale booms. The new population has created a stronger demand foi local vibrant commercial distncts. According to city officials, not only do residents prefer to avoid the inconvenience of dnving longer distances to reach amenities, they appreciate the sense of place that these districts provide to the City. While the bulk of the population increase has been accornmodated in the suburbs, there has also been sigmficant residential growth in Downtown Renton. City leadership would like to see the downtown residential population grow at a faster rate than in the suburbs, as this would be more likely to stimulate demand for the cornmercial core. Bceiny Renton Plant. Wilh a workforce of over 14,000 people, Boemg is a major ernployer for Renton. Boeing's Renton location has been a key force behind The Landing's success,which is adjacent to the plant and provides attractive housing, dining, and retail options for the planYs employees. City leadership credits having a robust ernployment base within close proximity as an important factor in the developmenYs strong performance. Boeing's announcement to assemble ihe next derfvative of its besl-selling 737 airplane, the 737MAX. in Renton ensures that employment growth and robusl commercial activity in this part of Renton will con5nue for years to come. SUCCESSES From a policy perspec[ive, [hese projects meet the City's goals for citywide community and economic development, and neighborhood revitalization. More broadly, the City has developed attractive destinations for local and regional residents on land that was underdeveloped or largely indusirial. Not only have these redevelopments generated new tax revenues for the city, but as unique 'places' [hey have provided the City with a shonger identity within the region, which could serve as a foundation for future growth. Cornrnercial and residential vacancy rates are low and tenants are reporting sVong revenues at the Landing. Over the last 15 years. Downtown Renton has seen a substantial increase in commercial activity, and nearly 700 multi-family units have been built in the area. Approximately another I,000 units are in various stages of enlillemen[, but have stalled due to the current economic recession. ,,_. � ,�., „,�, � � RENTON CHALLENGES Despite Renton's successful redevelopment efforts, City leaders still believe both areas have a significant way to go before they reach their full potential, pariicul�rly downtown Renton. The City is facing a number of important challenges, many of which have been exacerbated by the current econanic downturn. These include: Giowing the Market. Broadly, this has been the City's greatest challenge in supporling development efforts in Downtown Renton, and encompasses several of the challenges discussed below. Although the City has been able to establish a market through investment and commitment, it has slill not reached the levels they had initially hoped for. Put more plainly, the City still sGuggles with how to convince more conswners, residents, and employershvorkers to come Downtown to live, work, and shop. In the current economy - where potentfal consumers are shopping and dining out less and the housmg market is weak - this challenge has been amplified. AtVactmg Employers. The City has struggled to attract large and srnall employers to downtown Renton, which has been detrintental to the cornmercial environment. The City has considered rnoving City Hall to downtown, which would increase the daytime populalion by 700-800 people, and could invigorate the retail and dining establishrnents in the commercial core. In addition, increasing employment could lead to improved public safery, as the area would be husier and there would be more eyes on the streeL However, this has not occurred, and there is still a significant lack of toot traffic during daylight hours on weekdays. At[iacUng More Private InvesUnent ro the Historic Downrown Core. City leadership had initially hoped that their investments in facilities and infrastructure would spur significant private inveshnent to improve and maintain the built environtnent of the historic downtown core. While soine investment has been seen, it has not reached the level they anhcipated. Filliny Retail Spacez in Older Store Fronts. A bt of the retail spaces in the older store fronts in downtown Renton remain vacant, and with the current state of the economy it has been especially r.hallenging to attract new tenants. Capturuiy More Pass-thiough Traffic. As noted earlier, a lot of people drive through Renlon every day. However, a challenge for the city has been convincing people there is a 'place' (or places) worth stopping for. Much of this has to do with increasing awareness and attracting more high-profile businesses and activities. Changing Public Safety Percepuau. Another challenge (or the City has been to r.onvince both developers and the general public that downtown Renton is a safe and secure area. Inihally, the City worked hard to develop a clear vision and make mvestments and commitments toward portraying downtown as a safe,walkable area, including marketing, special events(such as the Farmer's Market, tree lightings, and other activities), as well as all of the physical improvements rnentioned earliec Although they have achieved some success, the recent economic downtum has stunted wme of that momentum. Covenng De6t Service on Tax Revenue When bonding off oi (uture revenues to finance investrnents in The Landing, the City was aggressive in their assurnptions and assumed 1% sales tax gruwth annually. Since opening, sales tax revenue growth has not met projections, and the debt service is not being covered by additional tax revenue. Despite this challenge, the City is optimistic that the matter will be resolved, and understands that in the bng run it was a good investment that was necessary for the project to occur. � • • �� THURSTO,-'-�� . _, _ ��.� . �� POLICY CONSIDERATIONS AND KEYTAKEAWAYS Based on Renton's story and experience in fostering dense developrnent, below are a set of policy considerations and key takeaways for Thurston County: Value of Comprehensive Investment m Infrastructwe and Faciliues Cultivating dense development requires higher levels of investrnent. ChWsirig a cons[rained drea and delivering cornprehensive, multi-faceted investments toward an array of projects provides a higher likelihood of success in attracting developer interest and nurturing a dense, vibrant mrnmercial district. Piecemeal investments in geographically dispersed areas may not be enough to attract substantial growth. An enduring comrnitrnent and a willingness to provide substantial investments across the board are key components of a successful initiative. Major coordinated investrnents come with increased financial risk, but these risks can be mitigated through dose coordination with the development community. Lony-Term Commitment and Vision Reduces Risk for Develope�s. In order to secure buy-in from developers, jurisdictions should aim to present a clear vision of how an area will develop and demonstrate their long-terrn cornmitment to fulfilling that vision through significant and transparent investments (see above). In other words, it must be inade clear to developers that the jurisdiction will be a dependable partner and make good on their commitment to deliver the ner,essary groundwork. This commrtment reduces risk and uncertainry for developers and increases their willingness to collabora[e with, and invest in, a community. Employers and Ovic Uses 6xrease Foot Traffic Cultivating a strong employment base and attracting civic uses to the targeted area are effective and dependable ways of developing a market They both lead to increased foot traffic and higher daytime populations, which support cornmercial activity in the area. Partnerships �vrth Local Transit Ayenaes. Transit connections can play a critical role in bringing people to an area, as well as attracting residents and consurners that are less car-dependent, and who live a lifestyle rnore conducive to dense development. Park and Ride agreements with transit agencies can also provide a funding source for parking facilities in mixed-use centers of activity. Incentives for Mixed-Use/Multi-Family Developments. Incentives for multi-family development are available to encourage developers to build in targeted areas. In particular, there is a statewide tax exemption program that allows r,ertain jurisdictions to give a rnulti-year property tax break for multi-farnily housing projects. Jurisdictions can target the exemption to specific geographic areas. CominerclalMa�ketSmAy � ��RFa1IDFVI�IUP:vtFr�T�. utit�,lil�ilf-. � � � NTON Bonding Off Future Revenues to Fnance Invezhnents. Although there is sorne risk involved, bonding off of future revenues can be a critical tool to ensure that necessary investments in infrastructure and tacilities can be rnade. The'Old Bones'of Historic Neiyhborhoods are Strong Foundations to Build On. A historic downtown core provides an opportunity to cultivate dense, vibrant commercial districts in an existing neighborhood that may already have a strong sense of place and identity. St�eetscape Investmencs Shuuld be Supplernented by Ma�ket Developmenc While streetscape improvernents are critical, they are not sufficient by themselves to promote and attract investrnent in a dense,vibrant comrnercial district Such improvements must be done in tandem with strategies[hat develop a market by attracting employers, civic uses, and/or transit connections. � ,•i;� � • n'THURSTON `'--�`.�. i��.�. � � , ,,� . � ��. _ � ,�� . - - -- Developing the Aurora Corridor in Shoreline: Mobility, Safety, & Neighborhood Connections Aurora Avenue North m Shoreline is the City's largest arterial and primary commercial corridoc For ��r-��„ -��-i i�,_o�� rri-��_� decades, it had been charactenzed by substandard pedestrian and bicycle infrastructure, slow and unreliable bus transil service, auto oriented strip retail development, poor connections to adjacent residential neighborhoods, and high automobile and pedestrian accident rates. ��F� ��- ' + 1.�fj!•.y+ty�,. l p:�A:,y � Y�]T�� t �.tu f�� . With the ambitious Aurora Corridor Improvement Projecl, Shoreline has been working for over 14 years _ � � " �,,, to address issues related to the improvement and redevelopment of the corridor in a multitude of ways. k � � � includingdrarna[icallyimprovingrnobilitythroughnewtransitlanesandroadwayimprovements, building � ^ new pedestrian and bicycle infrastructure, and upgrading u[ilities. Along with Improving mobility, sa(ety. � and aesthetics, a key goal of the project is to nurture more concentrated economic development along � � � the corridor, with clusters of activity at transit stops. Pro�ect leadership alins to create a more balanr.ed, � I less automobile-dominated environment that is attractive to drivers, transit-riders, pedestrians, and bicyclists. They believe that rnaking the corndor more accessible and safer for people via all modes of transport will greatly improve overall rnarket potential in the long-terrn. _ � ' . R► • � �i ��.. . ia+!. -- < �� -- �i7! ' � .� �l �� Comme�<ialMaiketNudY � ��RP:�Nf!WEL(`P61NJ1� �4CSI�II-�!E`� � SHORELINE HISTORY/CONTEXT When the City of Shoreline incorporated in 1995, one of the major issues fadng leadership was what to do with Aurora Avenue North. At the time, the new city's primary transportation corrldorwas known for housing used car lots, strip tnalls and seedy establishments (sucli as casinos and adult entertainrnent venues), and had a reputation as being a hotbed of prostitution and other illegal activity. Pedestrian and bicycle infrastructure was virtually non-existent, auromobile accident rates were among the worst in the state, and - while transit ridership was high due lo the corridor's central location -bus service was slow and unrelia6le. These rnobility and safety issues served as a deterrent (or residents to frequent establishrnents on the corridor, and hindered the potential for strong connnercial growth and concentrated centers of activity. In 1996 and 1997, city leadership developed its first comprehensfve plan, which included policy direction to revamp and revitalize the Aurora corridoc Following ihe comprehensive plan's adoption, there was a year-long pre-design process, with heavy community involvernent, to take the goals and policies in the plan and tum them into a design concept. The team developed several scenarios, and the cross-section included in those scenarios was eventually implemented through the project, incorporating the following improvernents: Business Access Transit (BAT) lanes, large sidewalks with setbacks, landscape improvemeMs, access rnanagernent with medians Ueft and U-tum pockets), new signals and lighting, new streetscape amenities, and various other improvements. During the process, there was significant pushback frorn the business conununity, who feared that the project and its construction would negatively impact thern. This led to the formation of a Citizen's Advisory Task Force to guide the pre-design study and as a means for the project team lo engage with ihe business community and the pu6lic. A number of key compromises and concesslons were worked out be�ween pro�ect staf( and the Task Force, which lead to mutual agreement on pro�ect's design principles in 1998 such as allowing inlerim width sidewalks in certain cases to reduce building or parking impacts, or low growing vegetation in the medians lo protect wsual access across lo the businesses. Following this agreement, the project team spent several years putting the staff tearn together, going through the environmeMal review and appeals process, completing right-of-way acquisition and design, and assembling the necessary fundmg. Total costs for the first two phases were approximately $35 million and $40 million, respectively, and the remainder o( the project is budgeted at $60 million (although it will likely cost less). Funding sources include federal grants, the State's Transportation Improvement Board (TIB), WSDOT's Regional Mobiliry Grant Program, State Nickel Gas Tax, and 9 '/z cent Gas Tax, Surface Transportation (STP) and Congestion Mitigation Air Quality (CMAQ) funds, Department of Ecology, City Roads Capital Funding, and Kmg County. Construc5on on the three mile project began in 2005 and is currently more than 2/3 complete, with the second mile reaching Substantial Completion in 2011. The project has already generated sorne success, including a dramatic reduction in accident rates along the first nule and an increase in transit speed and reliability. However, the amount of new development and business actiuity along the corridor has been relatively modest, particularly mixed-use and other multi-family developments. City leadership recognizes that the project is part of a long-term economfc redevelopment process,which includes other efforts such as the Town Center Subarea Plan, which will establish a critical base in Shoreline for future growth. � ' .:.r � • • n THURSTON� � � �n - . _:.., ,.�..� STRATEGIES &TOOLS The Aurora Corridor Improvement Project and other efforts by the City of Shoreline include an array of strategies and tools to improve the corridor and increase economic development opportunities: Mobility and Safety Invesung in Transn Improvements. The project includes significant investments toward improving �� the speed, reliability and safety of transit in the corridoc These investments inciude Business Access "-�"" : ��it w 1:-".� �- . Transit (BAT) lanes for bus priority: lighting, shelters, and sidewalks at bus stops; general sidewalk -' " '+- . � ` k � r�� im rovements alon the corridor, and transit-su �"� $ " `�� '' - ' p g pported zoning and densities. The City worked closely � r,r with King County MeGo to facilitate and implement these iinprovements. Since the onset of the project, ��"; r�a�� i��ti� `� � city leadership projects that transit speed and reliability has increased by over 30%through Shoreline's y�- ,z �._ �� ,� �- sec6on of the corridor and safety conditions at bus stops and along the Corridors sidewalks have ��.�.h� _ �� _ ��+�Y„ � improved significantly. The launch of RapidRide Bus Rapid Transit (BRT) service along the corridor in � �, 2013 is expected to further bolster speed and reliability. � �,e� � �. � � ��. • City leadership recognizes the importance of safe, reliable, and efficient transit in spurring development and fostering a busy, multl-modal corridor with nodes of concenVated activity. If buses are frequent. on �'' t ` time, and able to move a lot of people quickly, it makes the corridor much more attrective for potential �- __��a � -' residents and developers. In particular, good transit is r,ritical to leveraging Shoreline's close proximity I � _ �` to Downtown Seattle and o t her large emp loymen t an d commercia l cen ters in t he region. By improving Y' y -" _� access to these destinations, living along the Aurora corridor becomes a feasible and attractive option ?� �=�� -, for a broader segment of the population, particularly those who are seeking an affordable altemative to ��r t ' y :'� � some of the region's rnore expensive areas. In addition, improved transit allows for the development of J+ �a�.. concentrated nodes of commercial activity, where residents (and nomresidents) can run daily errands, v " a ri,�;�� , � shop, and dine, with easy access via transiL i ` �� , � `• � : Investmg in Othei Mobility Improveinent� In addition to improving transit, the project involves significant ,�,��e-� ` m ' �,� � � investments in other mobility improvements, including roadway changes (e.g. access management with `- " - � medians, new signals)to increase vehirular traffic flow and rnajor iinprovements in pedestrian and bicycle infrastructure to bolster non-motorized transportation. Some key pedestrian and improvements include construction of continuous sidewalks along both sides of the road, installation of colored crosswalks and improving lighting. As a partner project, the City designed and constructed a 3.25 rnile long segment of the Interurban Trail, running approximately parallel to Aurora. This bicycle and pedestrian project includes two bridges, green spaces and features that recognize its historic significance in the community. One key investment made in developing the Interurban Trail involved removing several old, dilapidated buildings along a ten block section and repurposing the land into a greenway park with bike and pedestrian paths. �onuneia;IMzik.etStuJy � � ... . . . � . . . . .0 �. � SHORELINE City leadership believes that improving the Corridor for pedestrians and bicyclists will play a critical role in making the area more accessible and attractive, as well bolstering commercial activiry and interest in new residential developments. Overall, leadership airns to take a balanced approach to mobility improvements and to ensure that all modes of transport are accommodated. Investlny in Safery Irnprovements. Another strategy driving many of the irnestments discussed above is to improve safety conditions along the corridor. A significant deterrent for potential residents and other visitors to the corridor has long been a perception of an environrnent unsafe for pedestrians and bicycles, with high crime and vehicle accident rates. Mobility, infrastructure, lighting, and other improvements implemented through the project will, over the long-term, play a key role in changing safety conditions and the public's perceptions of the corridor as an unsafe place. Leadership also believes that as the corridor becomes busier and nodes of activity are developed, there will be more "eyes on the street", which will help to further lower crime rates. Improviny Connections to Adjacent Neiyhborhoods City leadership believes that residents walking or 6iking from adjacent neighborhoods have the potential to play a major role in increasing pedestrian traffic and commercial activity along the corridor. The project aims to improve ties to these (mostly single-family home) neighborhoods by making the connector streets safer and promoting the corridor to nearby residents as a convenient place to run daily errands, shop, dine,or catch a bus. Improving the connector streets includes installation of traffic calming measures, making landscape irnprovements, and implementing the pedestrian and bicycle infrastructure iinprovements mentioned above. Develo��ment Incentives and Stiategies Developer Incentives: Minimizing Uuliry Costs and Building Fr�ontaye. As econontic developntent incentives for developers, key investments were made by the City in constructing new utilities and hookups, undergrounding power lines, and building the frontage (which includes curb, gutter, landscaping/amenity zone, sidewalk and driveways) along the corridor during project construction. These investments serve to significantly reduce costs for potential developers, improve the attractiveness of the corridor, and increase developer interest in the carridor. Allowing for Flexibility in Mixed-Use!Multi-Family Development Regulauons. While the City airns to protnote concentrated nodes of activity and more pedestrian-friendly development,a key strategy has been to ensure Flexibility in mixed-use/multi-family development regulations, to maximize efficiency and minirnize lost opportunities. For instance, in certain areas the City allows horizontal mixed- use developments, which have the advantage of not requiring multiple uses in the same building. In addition, in vertical mixed-use buildings, the City does not resGict ground floor commercial spaces to retail and allows for other commercial uses, including office space. Leadership also recognizes the benefits of multi-story buildings that are not mixed-use, which increase property tax revenue. Overall, City leadership believes that allowing for more flexible regulations will be key to improving development opportunities throughout the corridor. � � ;ua r � � n� TH URSTON� °�=�=�:. : . � . . ..E�`� Recogmm�g Muluple Forms of Pedestnan-0nented Improvements- CIty leadership emphasized that their approach to improvu�g pedestrian mobility along the corridor is not limited to a "pedeshian village" model, which typically involves narrow streets, high Retail Floor-Area-Ratio(FAR), more boutique establishments, and Vaffic calming. While some of these traits exist in certain sections of the corridor, there are multiple stretches where pedestrian improvemenls are restricted to widened sidewalks, improved transit connections, and other basic changes to the streetscape. While project leadership hopes to develop several key nodes of relatively dense aclivity concentration (most notably the Town Center), they recognize that along a 3-mile corridor there will be numerous sections that remain primanty auto-oriented. However, along these stretches, pedest�ian-oriented improvements can still be made to improve accessibility, safety, and convenience. Taryetmg Nodes for aaivlty Concenuation. Currenlly, Cily leadership has targeted three primary nodes as key activity centers and focal points for growth: Town Center near 175th Street, the Sears node between 155th and 160th Streets, and the existing park and ride at 192nd Street. These areas are zoned and targeted for more concentrated dusters of commercial activiry and housing, as well asinr.reased mixed-use development. Town Center in particular has been singled out as a focal point for tnuch of the City's future growth accommodation. The Town Center Subarea Plan provides an ambitious vision of a vibrant, walkable cultural and civic center with a rnix of public spaces, active businesses, and multi-family and single-family residential unils along with a land use code that is form based. Although it is not part of the Aurora Corridor Project, the City has already made several key investments m the Town Center, including building a new City Hall and linear park between Aurora and Midvale Avenues. Other civic irnprovements include a new Fire station and remnstructed high schooL Future investments are expected as well. Outreach to Business Coinmwiity and the Public Establlshmg a Citizen's Advisory Task Force. As noted earlier, pro�ect leadership faced significant pushback from the business community, who were concemed that the impacts of the project and its construction would deter drivers, take private property and reduce parking and negatively affect businesses along the corridor. A Ci�izen's Advisory Task Force was appointed by City Council as a means of engaging with the business conununity and the public. The Task Force was structured like a tard, with thirteen seats and representation from different groups, including six business representatives, six neighborhood representatives, and one special transportation advocate. They worked with projec[ staff through the pre-design process and ended up recommending the final altemative and the project's guiding design principles. The Task Force played a critical role in achieving buy-in from the business conununity. Commeiaal Ma�ketS¢idy � ��I:I'.;�ry I�I`-1 i i'I'fr,i IJ i � �,ti� �,I i u:�ll'� � SHORELIN � KEY MARKET FORCES Several key market forces have influenced Shoreline's ef(orts. These indude: Proxlmity to Seattle.Shoreline's close proximity to Seattle and its major employment and cul[urel centers makes the area attractive for potential residents and employers. Potential residents looking fa more affordable housing altematives with relatively easy access to the city would likely consider living in Shoreline, which brings an increased demand for commercial services and other amenities. In addition, as Seattle's neighborhoods continue to densily over the long-[errn, development will likely continue to spill over into ad�acent cities, such as Shoreline. Acwssto Liyht RaiL The expected arrival of two Link light rail stations, as part of an ezpandmg regional system, in the early 2020s will be critical in broadening Shoreline's rnarket potential. While the light rail route will follow an I-5 alignment, the Aurora Coiridor is only one mile or less from both of the planned stations. The presence of light rail nearby will not only attract new residenls, but will also provide much easier access to the city for people around the region. Higher Income Neiyhborhoods City leadership notes that a few neighhorhoods in Shoreline, including The Highlands, Innis Arden and Richmond Beach, house a relatively affluent popidation, and that demand likely exists arnong this population for higher-end retail and commercial establishments. These types of esta6lishrnents are currently lacking in Shorellne and the Aurora Corridor. This is a market that could be targeted as development opportunities increase. Increased Residential Population Alony the Corridor.City leadership sees an increased residential population along the corridor as a key market force that will drive commercial activity and spur development. Traffic. Over 40,000 vehicles pass through the Aurora Corridor in Stioreline every day. While many do not intend to stop, the traffic represents a large pool of potential consumers. Additionally, there are 1,000 daily transit boardings and deboardings on the Aurora Corridor in Shoreline. City leadership hopes that as cornmercial activity becomes more atVactive, drivers and bus-rlders wlll be rnore likely to stop along the corridor. � �w,;w�� • • �� THURSTON��'��` , . . � SUCCESSES While the Corridor is still under construction and results are expected over the long-term,the project has already seen some signi(icant successes due to the changes that have been implemented so far. Mobility has improved, as there has been a projected 30%increase in transit speed and reliability. In addition,while pedestrian and bicycle traffic have not been measured, infrastruc[ure irnprovements have clearly made walking and biking along the mrridor much easiec Safety conditions have also improved, as vehicle accident rates have been reduced by over 6U% in the fust nule, and satety upgrades have been made for all o[her forrns of Vansport. Aurora Avenue is now much rnore aesthetically pleasing, which has mspired many of the 6usinesses and property owners along the corridor to make improvements as well, including re-painting, new landscaping, and fa�ade upgrades. While crime rates and overall public perception of the corridor will take a longer [ime to irnprove, highly visible pro�ect landmarks such as the pedestrian bridge above Aurora at 157th Street and the greenway behveen 175th and 185th Streets demonstrate to observers that significant investments are being made to revitalize [he corridor. As noted earlier, economic development has been relatively modest so far, although there have been some new projects in recent years. Three banks have built new facilities along the corridor, and a new mixed-use YMCA facility, businesses and 500 residential units opened less than half a mile south of Costco, on 192nd StreeL In addition, ihere have been several other multi-fanuly developments built along the corridoc Most importantly, however, City leadership believes that the project (along with other efforts, such as the Town Center Subarea Plan) is creating a strong infrastruc[ure base and setting the stage (or sigmficant commercial and residential growth in the coming decades. They believe that the changes implemented through �he project are necessary to achieve those levels o(growth, but they recognize thal it will likely happen progressively and are noi expecting immediate impact. Comme�oalAAaikelSWdy � �iPt�..11ldv�l.'I'I:.Illi� >�t �,i�q��lh� � SHORELINE CHALLENGES City Leadership continues to face a number of challenges in achieving project goals. These inr,lude: Attracting Developers in the Current Economy. Although the City has made significant invesUnents to reduce costs to developers (by building new utilities, undergrounding power lines, and building frontage) and to foster an accessi6le and attractive environment for commercial activity, new comrnercial and residential development - particularly mixed-use and multi-family - has been relatively modest over the last few years. City Leadership credits the current state of the econorny, and the cautious approach it has inspired in developers, for the slowdown in development. However, as noted previously, Leadership also believes the process will happen gradually, and are anticipating that development will increase over the long-term. Working and Compromising with the Business Cominunrty. Project leadership faced a significant challenge in pushback from the business community, who worried that construction and other impacts of the project would negatively affect the business landscape on the corridor. Although the Ci6zen's Advisory Task Force was an effective tool for collaboration, one of the major challenges for project staff was finding a balance between maintaining critical design aspects and satisfying Task Force members, particularly representatives from the business r.ommunity. Ultimately, the CATF and Council adopted a document entitled "the 32 Points" which provided for design (lexibility and pu[ many of the concerns the business cornrnunity had in writing. For instance, it narrowed the sidewalk by one foot on each slde of the road and provided for flexible interim sidewalk to preserve parking or structures Ultimately, the process of working with the task force was successf�d, but challengmg. Clearly one of the biggest impacts on business concems was the completion of the first rnile, and the ad�ustments pessons learned)that were rnade to the remaining corridor, and having the roadway completed so that drivers could experience the left tums, U-tums, and other improvements. The collection and monitoring of data was also a useful tool to utilize in the second public involvement and environmental process. Limitations Due to State Hi9hway Designauon. Aurora Avenue's designation as a State Highway prevented project leadership from being able to implement some preferred design elements. For instance, leadership had hoped to add more pedestrian crossings, additional signals, and narrower lanes to minimrze nght-of-way irnpacts, but were not allowed to do so, as these changes would have iinpeded vehicle progression. Shallow Narro�v Lots.A significant economic development challenge for the City is that cornmercially zoned lots along the corridor are typically narrow and only one or two lots deep. As they are usually adjacent to single-family mned neighborhoods, redevelopment into a significant project is challenging.Therefore, relatively large develnpments wilh underground parking, and vertical elements requires significant land assembly, which can dissuade developers from taking on bigger projects along the corridor. Re-development Instead of Greenfield Opportunrties.Ano�her challenge is that murh of the corridor is already bwl[-up and requires re-development, with very few Greenfield opportunities. This means that buildings rnust be tom down before being built anew, and City Leadership claims that many property owners along the corridor are non-enVepreneurial and are not willing to take the risk that such an endeavor would require. � ,, �, • • ��'THURSTO, ',`�. ,.� ��,. .. POLICY CONSIDERATIONS Based on Shoreline's srory and experience, below are a sel of policy considerations and key takeaways for Thurston County: Value of Investiny in Traiurt hnprovements. Providing speedy, reliable, and safe transft service is a critir,al component for spurring developrnent along a corridor and improving accessibility for potential residents and visitors. These improvernents can be made through establishing BAT lanes fur bus exdusivity, increasing bus fleels, installing lighting and shelters at bus stops, and various other improvements. A good transit system fosters denser, more pedestnan-onented development and allows for concentrated nodes oi commercial activity. In addition, providing good transit lowers potential costs for residents, which may allow for higher rents and serve as an incentive for developers ro build in the area. Partnering with local transit agencies early is key to es[ablishing transit- supportive zomng. Value ofOther Multi-ModalTransportation Invesunents. In additfon to transit, other investments in mobility irnprovement can play an important role in making a corridor more attraciive and accessible to people using all modes of transporL Improvmg non-motonzed transportation facilities, such as pedestrian and bicyde infrastructure, is pararnount to increasing foot traffic and establishing the type of walkable environment that lends itself to mixed-use and rnulti-farnily developments. Value of Investin9 in Safety Improvements.Areas perceived as being unsafe will likely struggle to attract demand for residentfal or commercial activity, and will be avoided by pedestrians and bicyclists. Investing in improving safety condilions through a myriad of stralegies can play a key role in attracting development Such sVategies can include improving pedestrian and bicycle inhastructure, traffic calming, lighting improvements, rnaking roadway improvements to decrease vehicular accident rates, and increasing pulicr. presence. Irnproviny Conneaions to Adjacent Neighborhoods Inueases Accivity.Corridors are likely to see increased foot traffic and commercial activity if betterconnections are established toadjacen[residential neighborhoods. By prioritizing pedestrian and bicycle hnprovenients and implernenting traffic calrning on key connector streets to such neighborhoods, city planners can leverage a large pool of potential visitors and increase pedestnan-oriented activity. Buildiny Utilities and Fiontaye as Developei Incentives. City leaders can reduce costs for developers by building utilities and hookups, undergrounding power lines, and bwlding frontage. Providing these cost-reducing measures can serve as a significant incentive to potential developers. eeiny Flexible m Mixed-Use/MuItV-Family Regulations. Allowing for Flexibility in mixed-use/multi-farnily developrnent regula[ions, depending on context, can improve oppor�unities for growth and maximrze efficiency. While areas designated as high-concentration nodes may require stricter guidelines, certain stretches of a corridor may benefit from a more adaptable approach. For instance, not restricting ground floor uses to retail and allowing for horizontal mixed use developments(such as apartment structures behind retail) may help bolster development in areas that are currenNy lagging. In addition, promoting rnulti-story buildings ihat are not mixed-use provides the advantage of increased property tax revenue with a lower risk for vacancies. CommeraalMaike�Study � i'�-I:,,i�'.�I�.t'.�II.,I'li� -�..! . . I.ri�- � SHORELINE Recogniziny Multiple Foims of Vedestrian-0nented Environmenu Not all pedestrian improvements reqwre the capital investment necessary to establish a "pedes�rian village". Improved walkability can also be developed pnmarily through better transit service, widened sidewalks, and other streetscape improvements. Long corridors typically have varying levels of development, and some stretches may reqwre less investment in pedestrian and hicycle infrastructure. These sections can still be made more accessible to pedestrians and bir.yclists through the improvernents noted above, but they do not require the same infrastructure and facilities as areas designated for higher mncen[rations of activity. Targeung Nodesto Invest In.Targeting key nodes for increased investment provides opportunities for more concentrated development, higher levels of activity, and the establishment of landmark "hubs" along a corridor. Limiting the number of nodes is critical to securing the necessary level of investment and establishmg environrnents that are distinct from the rest oF the corridor. Achieving a Balance evhile Workln9 with the Business Commurnry and the Public. While ouVeach is critical and it is important to achieve buy-in from the local business community and the general public, leadership should be cautious not to concede too much and hold their ground on issues they find to be particularly important. In general, it is irnportant (but difficulU [o strike a balance between achieving the necessary buy-in and preservmg the most important elements of a project. � .,. � • �'THURSTON '''=�`' . . ... � . . . .� . Creating a Vibrant Center in Burien: Civic Infrastructure & Community Involvement � � � � � �,,,� � �i��-� Over the last 15 years, the City of Burien has been planning and developing an amhitious downtown revitalization, induding a new public-private mixed use project, revitalized and new streets, and a new / transit centec The comerstone of this resurgence is Burien Town Square - a one-acre park ancho�ed by an array of civic infrastructure (mcluding a regional King County library, Burien Ciry Nall, and a new � � pedestrian-friendly street grid), residential mixed-use development, and active boutique retailers and _ restaurants along SW 152nd street (Burien's "Main Street"). The success o( Burien Town Square as well as the overall downtown revitalization has been continuous and meaningful community involvement, „ � helping to secure ar.ceptance from the public and the business community. �`�� r � 2009 saw the opening of the new Burien Trensit Center, the Town Square r_ivic uses, and the first phase �I i=- of the residential mixed-use condo development within the Town Square projecL Although the mixed- �� use development encountered some initial problems due to the national econornic situation, the City's civic fnvestments have continued to draw people downtown, and city-funded streetscape irnprovements — <'�, on SW 152nd Street have catalyzed an increase in cornmercial activity and pedesVfan traffic along the �'{ :r area's traditional main street. ,rT� _- II City leadership recognizes that challeiiges lie ahea<�, but is optimistic that the mvestments made in �' ' �i � � - infrastructure and facilities. the synergy of uses that rontinues to develop, and the involvernen� and � �� " • support of the community will establish Downtown Burien as an artive civic r.enter. as well as a strong � � � �� r _ � cornmerr,ial and residential markeL ` _a �� , !-� � , ' I � -�.:�.,im:.,��..uurry � � i�..;riniciic�.r�,��irn � ,,<�� i�,.,. . � BURIEN HISTORY/CONTEXT The City of Burien incorporated in 1993, and one of Ciry leadership's first major goals was to revitalize downtown and re-establish it as a vibrant hub. Early on, it was determined that the plan would cen[er around a public ga�hering space wdh civic activities. Between 1995 and 200Q the City engaged in a visioning process, adopted its first Comprehensive Plan and developed a more specific series o( downtown plans, where a number of key ideas were solidified: Burien Town Square, a revitalized main street, unlirnited residential � �� , density, and height limits up to 12 stories. 1 �� - �� Prior to incorporation, King County attempted to build an activity center m, what is currently, Downtown . _ � Burien, but the project failed b gain traction because the County took a top-down approach and did not do �� enough to imolve the community. City leadership vowed not to repeat the same rnistake, and ensured that , � �{;�y� , �� ,— � � there was broad public involvement and buy-in before proceeding. q � � d "�� As each step in the downtown planning process began, �he community was asked whether the goals and �L F ' �_' " �. � O+ ��"�� .� objectives agreed upon in the previous planning phase were still desired. This continuous check-in with the . �,YAy�,,f,a:�'i`y. ;' community ensured that the City was following the community's vision for downtown. It also led to broad � �=r '�� ac�eptance of the ultimate re deve lopment p lan, inc lu ding t he Town Square project. As t he p lans for down town ``�`` evolved, it was eventually determined that the Burien Town Square would be built on a 10-acre site at the NW � ��, corner of SW 152nd Street and 4th Avenue SW, and that there would be a range of civic infrastructure and aciivihes, surrounded by several mixed-use buildings. In addition, there would be substantial investment fn upgrading a 10-block stretch of SW 152nd street and several blocks of 4th Ave. SW. City InvesUnents In the early 2000s, a $6 million upgrade to SW 152nd St. was completed, and it served as a catalyst for private imes[ment and an increase in commercial activity in the traditional core. The City facilitated the Town square projecl by assernbling land as well as reducing the 10-acre superblock into smaller parcels by creation of a new street grid. In addition, they invested in the new Burien City Hall and library structures, a parking structure, and a park. In total, the City spent $53 million on investments related to the Town Square project. They quickly found a partner in developer Urban Partners and established a development agreernent to build three mixed-use bwldings (although only one has been built so far). Outcoines The Town Square project opened in 2009, and the civic infrastructure almost immediately increased foot traf(ic and activity downtown. However, due to the housing market crash, the residenti2l portion of the rnixed-use project saw weak initial performance and Urban Partners' financing (Corus Bank in Chicago) was foreclosed on, which led to the FDIC acquiring the development and suspended sales for nearly two years. A new developer, ST Residential, (in partnership with the FDIC) has recently taken over, adjusted prices, and begun selling units again. In recent months, the development has seen some momentum, and city leadership remains cautiously optimisti sales will grow in the coming years. � i • • �� THURSTO� ""=�' . � STRATEGIES AND TOOLS The City of Burien has incorporated an array oi strategies and tools in its downtown revitalization process: Irnestmg in Civic Infrastructure. The Town Square project includes signiffcant investment in civic infrastructure and activities in the heart o( Downtown Burien, including a new city hall, library and park. The park, which serves as a cenVal green space, hosts a number of events and activities, including a farmer's market and summertime weekly music performances City leadership adopted the stra[egy of investing in civic infrastructure because they felt it would help establish downtown as a citywide (and polenlially regionaD des6nation and bolster foot traffic and activity during the day. Sueetscape Investments in Downtown Core. In order to leverage their attractive downtown core and increase commercial activity, city leadership made a substantial investment in streetscape improvements along a 10-block stretch of SW 152nd street, the area's primary commercial corridor. The investment successfully attracted private investment and served as a catalyst for a number of new businesses to open along the corridor. Syneryy of Uses.Through the downtown revitalization, the City of Bunen aims [o establish a synergy of uses around the Town Square, including civic activities, a revitalized commercial district, a transit center, and residential mixed-use developrnents. Extensive Comnwnity Outread�.City leadership leamed from mislakes made during previous King County efforts, and ensured that there was substantial community outreach during each phase of the planning and design process. The Ciiy provided numerous substantive opportunities for the public to weigh in and provide input on what would happen in Downtown Burien, as well as what lhe overall vision for the Town Square project would be. This allowed for broad cominunity buy-in, which leadership believes was key to achieving and maintaining political and finanr.ial supporL In addrtion, the developer was more willing to get on board because they had a clear vision to follow as a guide, and believed there was nunimal potential for cornmunity opposition. SEPA Ur6an Infill 6cemptan. Burien was the first jurisdiction in Washington lo utilize an "urban infill exemp5on" that provides mixed-use project within an urban growth area with a SEPA exemp6on for mfill development, as long as the Comprehensive Plan for the area was previously subjected to an Environmental Impact StatemenL This saved the Town Square developers a substantial amount of rnoney and time duplicating environmental review. Not Restricting Ground Floor to Retail. In an effort to ensure development code flexfbility, the City has not restricted the ground (loor of the mixed-use developments to retail usage. The only critena is that along SW 152nd St. and 4th Ave. SW is has to be non- residential use, which inr_ludes retail, restaurants and office space. Comine�aal Ma�kelSludy � i�R�t1Pl I'Ni I i'f'vtl��]i� ntiF '.lUI�II�� BURIEN KEY MARKET FORCES Several key market forces have influenced Burien's efforts. These include: Geographic L«auon. Burien's relatively central location within the region, as well as its close proximity to Seattle and other employment and cultural hubs, make it an athac6ve option for residents and conunuters looking for affordable housing rosts. Economic Recesslon. Leadership believes the recent economic downtown, which coincided with the opening of the Town Square's first mixed-use residential development, dramatically altered the housing market and was a key drfver behind the disappointing initial sales. As a result of the new housing market conditions tha[ have emerged in the wake of the recession, developer ST Residential (who have recently acquired the building) have substantially lowered prices and changed their rnarketing approach. Inaeased Resldential Populanon. City leadership has made several efforts (most notably the Town Square project and allowmg unllmited residential density) to promote increased residential density Downtown. Although the city has seen success in rewtalizing the commercial core downtown and bringing civic activity to the area, they believe that an increase in the residential population living within close proximity to Downtown will be the most irnportant driver behind developing and growing their market. SUCCESSES City leadership believes they have rnade great strides towards establishing an active, community-oriented downtown, wdh a range of uses and attractions. Following signifir_ant public investment in streetscape improvements on SW 152n� Street. Burien's downtown conunercial district has seen a remarkable transformation over the last decade. There has been a substantial amount of private investment in the area and many new businesses- including bars, restaurants, and boutique shops - have opened in recent years. This has increased activity and foot traffic during the day and evening, and garnered the city substantial publicity for fostering a r.onunercial district that has become one of the "trendiest" in South King County. The Town Square Project, while requiring heavy public investment in civic infrastructure, has successfully estab6shed a central gathenng space within downtown. and substantially increased daytime foot traffic. The project has a way to go before it reaches full potential, particularty the residential and ground-Floor commercial componen�s of ihe mixed-use development. However, leadership believes they have established the right environment and the necessary capacity lo allow for future targeted commercial and residential growth within Downtown. � ,wrui��. � � ��THURSTON� �;��:�. r`� CHALLENGES City Leadership continues to face a nurnber of challenges in its downtown revitalization process. These include: Stagnant Condo Salez in the Current Economy. As noted previously, the current recession played a key role in the mixed-use developmen['s stagnant initial condo sales, as well as closing the bank (Corus Bank based in Chicago) that was providing financing for the projecL This lead to a nearly two-year period where the development was held by the FDIC and sales were suspended. Sales have now resumed with ST residential (in partnership with the FDIC) taking over, and units are already selling at a faster rate than they had previously (although they are still fairly modesU. In addition, while Urban Partners initially had a development agreernent for three mixed-use buildings, as a result of the economic downtown it is currently uncertain whether they will be the developers building the remaining structures. Filling Ground Floor Spaces m Mixed-use Developments. Although the City is not restricting r.ommercial uses for the ground-floor spaces in the mixed-use development, currently all of the spaces are vacanL This reflects some of the same market challenges facing the residen6al components of the project. City leadership hopes that as more units are sold and the residential population increases, risk for potential businesses will be reduced and the spaces will begm to fill in. Managing Public Spacesfor Different Groups. The City and King County Library Service (KCLS) (which manages the Library/City Hall building) have faced challenges m ensuring that all populations are comfortable when visiting the Library/City Hall and Town Square Park. For example, while public safety has not been an issue, there are visitors to �he library who have reported feeling mtimidated by loitering teenagers. However, a key goal o( the library (and [he project as a whole) is to establish a space that is welcommg and accommodating to minors. The City and KCLS are working to establish guidelines lhat will beiter allow all groups uf people who visit the public spaces to be comfortable. � � �� ..� �.,v��,n, � � � URIEN POLICY CONSIDERATIONS AND KEY TAKEAWAYS Based on Burien's story and experience, below are a set of policy ronsiderations and key takeaways for Thurston County: Value of Invesung in Civic Infrasvucture. Bringing key pieces of civic infrastructure to an area targeted for concentrated growth can attract private capital, substantially bolster foot traf(ic and increase activity (particularly in the daylime), as well as ultimately establish a destination where one may not have previously existed.These types of invesVnents can serve as a catalysl, or a long-term foundation, for commercial and residential growth. Value of Investing in Traditional Streetscapes. Investing in streetscape improvemenls in traditional commercial areas is a potentially high-value endeavor that can improve attractiveness with a relatively sinall amount of money. Developeis, business owners, and mnsumers tend to find these areas attractive; they typically have built-in identities and amenities due lo their infrastructure and street layouts. Developers and the City do not have to start from srratch or make the types of heavy inves�ments typically assceiated wfth place-making. Consider Establishing a Synergy of Uses to Inuease Overall Acnvity. By taking a comprehensive approach and establishing an array of uses within a concentrated area (e.g. civic, commercial, residential, �ransiU, a junsdicfion can establish a dynamic environment with a synergy between uses that substantially increasesoverall activity. Broad Community Ouvead� to Achieve Biry-in and Vision A broad conununiry outreach process fs a crilical tool to es[ablish public buy-in. which is key for a projecl's political and financial supporL In addition, community ouVeach can reduce risk for developers by establishing a vision which serves as a clear guideline, as well as mininuze the potential ior future community opposition. Consider Allowiny Uses Besides Residenual and Retall ui 61ixed-use Developments. Given the current economic climale, restric6ng the ground floor of rnixed-use developments to retail can be a constraint that limits development opportumties. Consider allowing other uses, such as food service or office, to broaden the base of prospective businesses. The key is having uses that provide street- level activity, both pedestrian and visual ("eyes on the street"). Consider Utilinng the Urban Infill SEPA Exempnon a a Planned Action Ordinance as a Developer Incentive. The SEPA infill exemption or a planned action ordinance can serve as a powerful incentive to developers by substantialty reducing costs associated with SEPA compliance. These tools allow a jurisdiction to provide exemp6ons to developers who are building on areas where an environmental review has already occurred. � �.an F � ^ 5�� , �� '� �1' r� �� ' ?'� }:; �`'�. :,< ,_ _ , � � ,�, �' � , �• . �� ! •.,�..;��it �- . _ - - ., . ? ,;, .-;•:� � ; �`'' . - �; - . � _ � , . � _- GV`� �` . _ _ Portfolio ;. - -__ �: ., ; - - _ - . � - v - –� –- – ! �` - .� — � `!T –?''-t -- ;.� �� - sn� �v� �` y Z-.' _ '�•fiFl _ 1 .-si/N.^.s'�' . i - . . . . - . ..-r7� p , � ,�.� ._, I �.... - ��r � 'zt�es"" ^�f'+� ��'�' �ii►�' - �i �_ � ' ' - -- a + V.'- _ ' _ .u_a _ I , 1 �� r� . . . . . 1 . \ ,t I � � .�r�� - �'� � . •Y ,� _ �, � ' � . 'N " iis�� . • i • r - . + �.=�1� r .I1�t .. t: �! '. = � ' ��', t . � +1" a � �,,' � .rl :.y�.:�� 5� ' r .1 . � , � ' . l,' 3 . � • l /ij'.C� �• - , ��`�il •. r_ �T .'.'� .•� �f.. � r � " 2 3 • • �� 1 v� � � �� . . _ � �1 . 't � , �'. 1 . '. 4• . ' � � �4� 'f ` .' f �, � .'f �� °�� . '� i . b � _ •. k � '.w E�yti t- , . , .�fy u. 't_ .`♦ ` . . 5. . . �� ! �� 4 ' ,:� ti,�'�;f ,' �. �,y;, '•��` , �r � � y4 � I� , �� : � . . I *4L�`➢-. T'�� t~�' � .. ��'�• . a .4��, ��r 14" ' � '�.� LF. � •' ��., ' ��'.. . • � ,i . h �A�lr � ` "� M' � `�yn♦ �a ' - wn � � � i ."�� b . � . � • T � ` - f~r '� 'T�.". � r�'�+� f� '. '� j_�4Y � � , ,.` � �� ,1_ _T"� . q �� ( � �: � • y ..,. !� ; 4�.`.'. 7' . y ��w"oi •� t� :, �{ " R�� '�' !'�: 1 � s � �. ��,.�:�.�i � F� • � ' ,� s. � �y� -y Ify�� ',i� � � ` f� • . I)��'Al�r ,a _ . . ... . _. . _ . � .. .- _ . . � `?�:�'• P?�'.. . . � - ��lx �!� c �� ' �� .� ��''�� Letter from �- - - �� '��;; � � Mayor Mary Verne� �� 7` - � I am excited to introduce you to the City of Spokar"_ ��_:... ._. �� development strategy,Targeted Area Development (I�AG: While we face many immediate concems due to current economic a:na�.rr;.�., . we must prepare for future economic opportunities today to guarantee the long-term health of our city's economy. Sustainable economic growth and development can only be achieved with sound planning and a commitment to see the plans through to completion. The City's innovative TAD programs blend our strategic economic growth initiatives with our investments in long-range planning and capital improvements. Our state and federal delegations have encouraged this vision with consistent and strong support This has allowed us to build partnerships and to leverage a variety of incentives and opportunities. This approach positions Spokane for continued growth ihrough collaboretion with state and federal agencies and local businesses. TAD essentially works like this�. The City identifies a geographic area with potential for grow[h and expansion, such as the Spokane University District. We then partner with higher education institutions and other government agencies to develop infrastructure projects and incentive programs that grow industries and bring career opportunities to our community. TAD also works in our neighborhoods by creating and improving small busmess districts. These efforts help build districts focused on vibrant retait areas that support healthy neighborhoods. Spokane's TAD program takes the lead on City projects and also complements the economic development efforts of Greater Spokane Incorporated, Downtown Spokane Partnership, neighborhood business organizations, I housing providers and other local agencies. Building collaborative partnerships to get projects done in our Crty will continue to be a priority A vibrant and interestingcity benefits all our citizens. TAD projects and partnerships are impor[ant facets of a resilient economic development strategy for our City - one tha[ has meaningful ties in our community and delivers results for future citizens �'�'t a.,.�, B. V�-<-, Mary B. Vemer Mayor, City of Spokane • --'�_ : �� . About Targeted Area _.�:: _ e - Development Targeted Area Development(TAD) is one of the economic development strategies of the City of Spokane�s Business& Development Services department. It is a location-based program that maximrzes our resources for effective implementation and growth TAD is a new and innovative approach to aiigning infrastructure with economic opportunities to maximize capital investment. It promotes private investment, which helps to create and retain jobs. It also focuses the use of incentives to align with long-term community priorities. � TADs are unique locations that differ in size, intensity of use, and industry focus. Our criteria for selection of TAD includes�. , � Identification as a Center or Corridor in the City's Comprehensive Plan and/or as an industry cluster in the • ' ` ' ' ' = "• - Regional Community Economic Development Strategy , - _ = ,�.= ; ��, ", , ° = : The potential for public sector focus to act as a catalyst : � , , ., .� : � i for development , . , ,_ �_�-, : � _ � Opportunityto leverage with infrastructure irnestments . , � � � � ";� Perfar�tar�ce Vn�dcators 2010 Indicators allow us to annually track the City s return on investment. TAD indicators are based on the region's "Spokane Community Indicators" - ' � ` � ' ' statistical categories. .- � _ � : ^. Total Taxable Va�ue of Real Property and Annual Growth Rate � Total Value and Value per Capita of Building Permits � Total Taxable Retail Sales and Growth Rate � Local Governinent Expenditure on Road Maintenance and Operations � Capital funding expenditure on infrastructure � Miles of Paved Bike Tratls per Capita The City Business& Development Services department implements the TAO program in cooperation with City departments and as a key partner with economic development agencies. Our comprehensive approach is administered by departmental staff with expertise in real estate development, ur6an planning historic property development, and finance. I invite you to leam more about TAD, and other Business& Development Services programs at devetopingspokane.org. � ' � { �C �'��" Teresa Brum Director - _ -# , , --�__ . � _ �_ � . � oKane � �a�:�l � � � - � -��- � p - � � � � �-� TARGET AREA � � � Vision � T�h�770acreS okaneUniveisrt �isui� ,_� � i � �" � � nei hborhood develo ment. The health an� res�arch focus of che ur _ ` ' la confluence of innovation, discover _ . � � ' �ivri sr�-- � ' ~ B p ' ��`' and SIRTI brings economic growth to the region and will expand new busin�_�..- �. opportunities and job markets. The Clean Technology Incentives program ��-� -. 4 will operate here, one of two areas in the city to focus on renewable ener�,, � �`�-� �� '"_ . �..`]°s..�''i�xe� _� . :- : ._-: creation. The future residential population will find a range of housin� i � . �w ��•:.;, � � -P''�.-- � . � � - services. As trails and water recreation continue to develop alongth�: ��, ... � _ , `-- �,_;,f,.._ _f•� .•y.f � - River, students, workers and visitors will have ready access to specta: . � I�_ , C �� shoreline amenities � . �.� '�� — -F ' ii�� '` $tY�tEgy - Streetscape, water, bicycle, and pedestnan improvements will be buiit as r.incs _,,,�_�.. from the newly created University Distnct Revitalization Area are matched __y_ , �.�:} ' to state and federal fundingsources. Leveragingthe revitalization funding r�� `\ � � . and improving infrastructw�e will attract private investment more rapidly, � ��. encouraging housing development as well as supporting university development. �� ' .-�-� �n, " The 25 year strategy pairs public projects with anticipated private investment '�' � +i� .��'�,�'� � . to accelerate economic development and fuel continued regional economic 'r,1�w,,S��:�`��< growth The University District planning principles indude sustainable growth � with infrastructure that supports multimodal transportation faclities, infill development, and energy conservation strategies. Current ContliSbor.S The University District lies just east of the downtown core, along the Spokane River and among historic inner city neighborhoods.The district is home to several higher education institutions including Washington State University Spokane, Eastern "' Washington University, Gonzaga University, Whitworth University, and Community Colleges of Spokane. Combined, cw�rent enrollment exceeds 11,000 students. The Centennial Trail connects the area to neighborhoods and downtown and offers excellent alternative transportation and recreation. Neighborhoods to the north have a strong residential stutlent population while the southem section has optimal space for a variety of uses. The University District also contains a state � � designated Innovation Partnership Zone (IPZ� Projects : Partrters,Com�nunity � ADA compliance study • Avista Utilities Bicycle and trail facilities : Community Co�leges of Spokane Burgan's Block Development : Downtown Spokane Partnership Clean Technology Incentives Program ; Eastern Washington University DivisionStreetGatewayCorridor � GonzagaUniversity �, Green storm water infrastructure : Greater Spokane Incorporeted Pedestrian and bicycle bridge . SIRTI Rapid transit facilities : Spokane Regional Transportation Courc�� Riverside EMension : Spokane Teacher's Credit Union ��STCU Streetscape improvements • Spokane Transit Authority ; UniversityDisLictbusinesses � Washing[on State University Spokane � Whitworth University � . - - �� .I � � :, ''� . .� =. � �� -, -� �:"�S; , �: �.aSt ��I�'��' � , � ,_� . _�� ,��,� � � t: , , Tne East Sprague Target Area is identified in the City-s Coinprehensive Plan as � one of six Employment Centers intended to attract non-service sector related job growth. The East Sprague area will have both commercial and residential higher intensiry development, indudingthe newly launched Spokane International �f �. •i�. District. Although businesses will cater to neighborhood residents,this area will ` � draw citywide visitors as the International Distrid provides more dining, retail, �� '�'�' '�� .". and entertainment choices. In the future, sidewalk and street enhancements will encourage visitors and residents to walk, addingto the vibrancy of the district. �..;l�a:��i��j� The City of Spokane is working with Impact Capital and Spokane Neighborhood Action Progrems to promote economic and community development in this area. ,--.��"' � These organizations are developing a comprehensrve neighborhood revitalization action plan to facilitate real estate development through new funding sources. At "� -, �y-��.�� the same time, Sprague Avenue, connectingthe East Sprague Target Area and � .�� '�� the Universi District, is under oin anal sis and desi n conce t develo ment R'�'.;^+5.:�::"'t`.:';,::.�V'L'. tY g B Y S P P � �.�,i��', for streetscape improvement. The City is actively researching preliminary design �} �.,,� .,s.- fundingsources H . .� � � a F �,r � LG[P'7C'6i2 �.O�C7(�Ii�60�� The East Sprague Target Area is part of th�e ierg�r East Cent�al Neighburhood Lower incomes, a population that spans at-nsk youth and elderly residents, and ethnic diversity require an holistic neighborhood revitalization approach. Both - housing and job creation are essential components. Land for development and redevelopment is available, with adequate infrastruc[ure to support future grow[h. � �70j?�`iS : ��iF�GiEYS ��,-.i�-..f�.7i�1 t3�F' �l�{'J��i'I Business and residential property : East Central Neighborhood Council redevelopment � East Spokane Business Association Business development assistance ' ; Eastem Washington University Business Improvement District . -- • ImpactCapital � � Spokane In[ernational District launch ; Spokane Neighborhood Action Programs Fa�ade improvement program : yyashington State University Spokane Fire suppression mfrastructure • Right-of-way improvements : "GirlsDayOuC' shoppingevent : North/South freeway � �' � ; _ , _ . ��;� � - _.,. _ f; North Ba�� " �� , , ,: . : =�-. TARGE� AREA 4 I� ' : T`� 4`isia�n The North Bank Target Area lies along the Spokane River, au�acent to Riverfront Park and the downtown core. Future residential, specialty retail, anc! �-� `" , �-- entertainment development wtll create a dynamic complement to the downe. � � ��.__ � � 1 I core. The North Bank will offer a wide range of downtown living choices an_ , .. . � � �� unique, river-oriented public spaces integrated among existing histonc buiir: . � � i�� A variety of arts, culture, and sports entertainment alreadyserve residents ��.� . ' - :.e :•Me��. � I� r�� visitors The proposed Mobius Science Center. Native Amencan Living Hist:-�� . . - _ Center, and existing performing arts venues coupled with the Veteran's Ma�, � � �� Arena, Riverfront Park, Centennial Trail, and thz falls of[he Spokane River ir� I�:�. •_ Great Gorge Park provide an exciting array of indoor and outdoor venues �� - r�_ _ � $�t62t�2�}' ... .. „ .— Implementation of the North Bank Target Area is currently underway with Phase {.:;� '� I lannin . The West uadrant Tax Increment Finance Area is in lace, enablin � ' � ~ P B Q p B ,.�� _�"','f d . '�-�. the City to begin projects by pairingthese funds with future appropriaUons and � '�,_�_}-. grants Priority infrastructure needs have already been identified in the City's six �i �, '� �� .� ��-„i/+-rrs�'��i-�s+r1�. year plans. Transit options and housing development are essential to achieve full b�nld out of vacant and underutilized parcels. Proximity to the Spokane River is a � bFnefit to be enhanced through green space and trail development. Because the _ � • �pokane River bridges are major elements for[raffic movement north and south h across the city,these crossings will need to be strengthened to safely handle cui ient and future traffic, including potential rapid transit. Multimodal circulation improvements are being analyzed to incorporate bicycle and rapid transit facilities � � �L�J0�1(@�7� C�DII�B�@0'07� - The North Bank Target Area is already attracting residential development, ,. induding about 1,000 residents. Upper Falls Condos was the first upscale 30- unit condo development, but other developments have stalled with the weakened economy. The 84 acre Kendall Yards development to the west is shovel ready � for mixed use development and also awai[ing improved market conditions to proceed. A robust histonc huildings inventory and incentives that encourage redevelopment adds character to the district and opportunities for new uses, includmg residential. Some Spokane River crossings are aging and in need of significant maintenance and repair to meet current safety needs and future demand. IPPap�cts � PartneaslC'�yu��m�Guo6i'y S[�gapar� Bicyde and pedestrian facilities ; Avista Bridge maintenance and repair - : Bicycle Advisory 8oard Howard and Post Street ' • Downtown Spokane Partnership Entertainment and nightlife venues ' : Friends of the Falls/Great Gorge Mobius Science Center • � Mobius Science Center Multifamilydevelopments ' Native American Living History : River Run Development Cultural Center • Riverside Neigh6orhood Public Market : Spokane County Government Rapid transit facilities . Spokane Public Facilities District Retail development ; Spokane Transit Authority Spokane River greenway and : YMCA outdoor classroom ' ��-�#�-�_' . .•. ` �. �.;....-- _ �..�: �' � '� i�-. � . �� . �. Foothills Drive � 1fARGET AREA C �_ . ,iis�an The Foothills Drive Target Area is about a mile north of the University District � �� and Gonzaga Campus. Foothills will be a mixed use Leadership in Energy and �-�� ,y� Ernironmental Design Neighborhood Development with a strong employment '}` � rL� -;s��. .�-��- focus Workforce and market housing is proposed, alongside space for start- ��1 up entrepreneurs graduatingfrom SIRTI, retail, office, and community spaces. _� innovative low impact development practices will reduce the districYs energy i � . and water footprint, creating energy credits for the district. The redevelopment � work will remedy brownfield areas and enhance protection of the aquifer and city • ��_ wellheads. Historic buildings can be adapted to provide a mix of housing, office space. and dining establishments, generatingfurther sustainable development credits as well as showcasing City history. �� - - :;L�:ii�5`� 1I~�r'�7 - This project pairs ciry-owned land with brownfield solutions for redevelopment � � a _ -��.��,- by the private sector. A $200.000 grant from the Washington State Department �,-.F s_��: , -�✓�.'�.; of Ecology launched local pianning in late 2009. The funding provides for -� � �,,,'��; � environmental analysis, engineering stud�es, conceptual redevelopment �"-;.6 � r �,�f �. design, financial analysis, and market studies. The City is matchingthe grant � �i:.�;: ', with staff resources to conduct community participation forums and determine preliminary regulatory requirements This work provides tremendous value for prospective developers-laying the groundwork to attract private investors and 1 � stimulate redevelopment. - �i�or��r� ��J�'4r�h4:��c � The Foothills Drive Target Area is served by two principal arterials with transit service and excellent access to I-90. The 277 acre site is the geographical heart of the City, located in the Logan Neighborhood. It is near the Mission Avenue National Historic District and is surrounded by both residential and small industrial uses. The property is owned and occupied by the City's Wa[er Department housing administretion, fleet services, two drinking water eMraction wells. and the Solid Waste Management departmenYs refuse truck parking with -� . _ .. short-term storage for recycled materials. Pro9ec4s ; PardrtQrs Core�n��dtry Sai�aport Budget and financial planning � Avista Utilities Community participation ; Gonzaga University Conceptual designs � Logan Neighborhood Culturalreview ; SpokaneTransitAuthority Environmental assessments . Washington state Dept of Ecology Remedial action planning : Planned Action-Statz Environmental : PlanningAct � �:,� �-� -�. - � .r-+i,,,..+�",� ��--. y., - -- . ..� ��,:ti. • " 'yq �/ �._ ' _ West Spokane Energ� District �.�.:� � -�' � , . �� TARGET AREA � ` �' `` '"' �ds�� c , � .�-�--� , s ,�_.. The West Spokane Energy District Target Area is part of the relatively new � Foreign Trade Zone within[he boundaries of the Spokane International AirporYs EcoPartnership Zone. It is one of two priority areas identified for job growth in the energy products and services sector. This newly designated target development area is intended to generate energy industryjob growth as an outcome of [he City's participation in the Asia Pacific Partnership. The City of Spokane plans to invest resources in three high priority areas�. 1)energy conservation. , -�� — 2) renewable energy generation, and 3) ener�industry sector development � - Each of these areas has both immzdiate�ob growth opportunity and long ' � .- -- term sustainability. Working with both private and public sector partners, and _ leveraging local matchingfundingsources, the City of Spokane plans to invest local, state and federal funds in public facilities energy upgrade projects, residential and commercial energy upgrade projects, and provide incentives to drive energy cluster development. Strategy The proposed Clean Technology Incentive Program (CTIP) wili support the growth of private sector jobs in the energv products and services industry.The . , proposed program will test the value of public infrastructure as an incentive � . ��'� n � :t;_':wr, .� for growing clean tech companies in the City's Target Area Development -- �; �' , :�"-��. zones(TAD). The CTIP will provide grants for public infrastructure to facilitate - '` '� . ? c� �I projects for companies in the energy products and services sector. The �'�`� � � ; J00 State Energy Program (SEP) grant invested in the CTIP program wili receive a 100 percent match from the City. Additionally, each public dollar invested in the program will require a 100 percent match from the private sector � company or developer.This will amount to a total infrastructure mvestment of _ $1A million. Grant criteria for the CTIP are currently in development. Recipients of CTIP grants, in these target areas, will be required to meet job growth criteria of 10 jobs for each $100,000 of public investment(20 jobs for each SEP dollar °' invested), or 70 jobs total. Cur�ent Condotions The West Spokane Ener�District Target Area includes 52 acres near the Crtys Was[e-to-Ener�facility Although land is available, infrestructure improvements to faGlitate industry growth wili be necessary over much of the area. Regional � - - � - - transportation connections are in place to support distribution and trade opportunities as well as employment growth. Wrogec�s : �artners,��r�rr;isr.itySaup�{xort Clean TechnologV Incentive Program : International Trade Alliance/Asia Pacific : Partnership . Private sector representatives in energy . products and services . Spokane International Airport +i�`_ : ��" ' _-, �..� � � ��=�-� --- -- � _ ... � - - �� -� East Hillyard Industrial n � ,: Y � `" ' �' ,�r'�` fARGET AREA C �,a��'�,�.� .,-,�.x..��a i�:i,�c� The East Hillyard Industrial Target Area will continue to incubate and expand manufacturing firms and contractor shops. The inventory of vacant, underutilized, � and brownfield property will be absorbed with small industry infill as water, sewer, ' _ . � , - .__ f pavement, and fiber network is added. Located in northeast Spokane,these new '�-•'�iti '� � � ,11�:�'� '��, businesses will provide livingwage payfor skilled trade, administration, and entry � ,,,. . — —_� __-� i�vel positions. Distribution systems will expand as local streets are improved -=��"'�--- -'�� and connected to the regional freighttransportation system. The foothills , � �" � ;urroundingthe industrial area will offer a complete trail and recreational system - ,�� . .�_ � � 'o residents and visitors. Nearby housingfor workers will lower transportation �__,� ,�-_-�� e�nd environmental costs related to commuting. -- ' te�7 ��* �� The East Hillyard Industrial Target Area is in the early stages of analysis and • � *;�5� � planningfor a future local revitalization area. Stakeholdersfrom industry �` � F �, and neighborhoods are working with staff from several agencies to identify ' '�� priority projec[s, costs, and altematives. As North/South freeway segments are �.L.�4_...,'r+ .. ;y.,,rs' • completed,the local street network will become a focal point for this district. ,, ��,'� This area will need capital investment to handle increased development and - � , the movement of goods�, a revitalization finance area is a potential solution. A � strong connection to regional economic development collaborators will assist in attracting and retaining manufacturing and contracting firms. �Lrr�: �,> i,i �.,:t I :ti< The East Hillyard Industrial Target Area has an abundance of vacant and underutilized sites, although the absorption rate has picked up steadily with construction of regional transportation projects. Local infrastructure, including streets, gas, water, and sewer is incomplete. which is a challenge for continued infill in some areas. Thzre are severai brownfields located in[he distnct, which will need to be analyzed before redevelopment can proceed. I�snjects P�rtn?as Co�rnont�nity Support �� Brownfield assessments : Eastern Washing[on University Housing study : Greater Hillyard Business Association Local street network � Greater Hillyard NE PlanningAssociation Wa[er, sewer, and gas connections : Greater Spokane Incorporated Washington State University Spokane _. " _.. — � r. �: � Market Str 1 � �- _ rr -�� +i TARGET AREA � � c r _- — U6s@on - -- The Market Street Target Area will support high intensity mixed-use development. Apartments, condominiums and row houses will provide a rar�,_�- - ��., of housing choices to a diverse population base. A full range of retail sercn.� �E �. includinggrocery stores, theaters. restaurants, dry cleaners, hardware st_�� . � n• �� ':� � and specialty shops will be located nearby to encourage bike, pedestrian :� — '�` =�-i ' � - transit tnps fci 1a:lv�0 7 �' ,._.� i �s Resi,:ents and v. itors w�ll ?nir-. - - - vibrant strc�=- � � � � —� - and green s �� "�� Strateb} ,- - i�= . Using state <�"' _ instreeYscap� � ,_.�_i �. �� i�� _... �..� ��, � i ��e��.�, ��., .r, b.�n��:��:; �,_:� =�� miliion dollars of pubhc and pnvate funds to revitalize sVeets, sidewalks, trees, — -- lighting, and water and sewer connections. The physical improvements are �� -,�:-� i-�: complemented by a robust business retention and attraction program managed i �; by the City and neighborhood partners. The Market Street Target Area is poised °'-' � � =; �,;- �' to form a Business Improvement District to continue revitalization projects and � '�'�� encourage further infill development. In addition, the historic district designation � ;�� -.,..t`�`- provides incentives for 6uilding rehabilitation. Finally, the East Hillyard Industrial � �"; -.� j�-��' , Target Area will support this commercial and housing area with an expanded jobs-focused industrial park. Cttrrecat ��itr,liQitrns Market Street is currently under ma�or construction from Garland to Francis Avenue. Small, independent retail businesses characterize Market Street. The corridor also provides starting locations for fledgling business interests. Hillyard and northeast Spokane provide housing and services for some of Spokane's lowest income families and seniors. Improving business and residential locations is a high priority for the neighborhood Prm�ects : P2rtnevs�Conararwovity Svp�nW�� Business Improvement District ; Bemiss Neighborhood Council "Girls Day Out" shopping event . Eastem Washington University Market Street "Open for Business" � Greater Hillyard Business Association event ; Greater Hillyard Northeast Planning MarketStreetStation • Association North/South freeway : Hillyard Community Development Propertyredevelopment : SteeringCommittee Subarea planning ; Hillyard Neighborhood Council : Spokane Regional Health District � Washington state Department of : Trensportation - Washington state Universiry Spokane : Whitman Neighborhood Council � SPOK�IVE 1'"'�� l � 1 i � 1111 808 W. Spokane Falis Blvd. � Spokane, WA 99201 (509)625-6983 � developingspokane org