Recommendation: Align local economic development planning with regional goals

Economic development achieves the most when municipalities, counties, and other partners work together across jurisdictional borders. The region’s communities collectively share in and build up our competitive advantages of a skilled workforce, extensive transportation infrastructure, and strong quality of life. Local governments, economic development entities, and others could improve outcomes, expand staff expertise and resources, and reduce costs by partnering on services like business expansion, retention, and attraction. Many jurisdictions with lower fiscal or staff capacity may need assistance for initial collaborations. CMAP, the region’s counties, universities, and civic organizations can play a substantive role in helping local governments collaborate. Nationally, many examples of successful partnerships to meet local and regional goals exist. In Cuyahoga County, Ohio, the hyper-competitive environment created by municipalities’ pursuit of income tax revenue led to a non-compete agreement to encourage intraregional cooperation for business development.^{{{Cuyahoga County, “Business Attraction & Anti-Poaching Protocol,” http://regionalcollaboration.cuyahogacounty.us/pdf_regionalcollab/en-US/AntiPoachingProtocol.pdf.}}} The Denver region implemented a similar agreement in 1987.^{{{Chicago Metropolitan Agency for Planning, “Reorienting State and Regional Economic Development: Lessons Learned from National Examples,” 2014, http://cmap.is/%202lTAonC.}}} For additional information, see the ON TO 2050 Tax Policies and Land Use Trends strategy paper.^{{{Chicago Metropolitan Agency for Planning, “Tax Policies and Land Use Trends,” 2017,Strategy papers and other reports}}}

Most businesses choose their locations based primarily on workforce, access to transportation, quality of life, business environment, and other assets, giving much less weight to tax incentives.^{{{Daphne A. Kenyon, Adam H. Langley, and Bethany P. Paquin, “Rethinking Property Tax Incentives for Business,” Policy Focus Reports (Lincoln Institute of Land Policy, 2012), https://www.lincolninst.edu/publications/policy-focus-reports/rethinking-property-tax-incentives-business.}}} In light of limited public funds, state and local jurisdictions should provide incentives only when a business relocation or retention would substantively advance local and regional goals related to quality of life and economic development. As CMAP research has shown, best practices exist for how, where, and when to apply incentives for maximum public benefit.^{{{Chicago Metropolitan Agency for Planning, ”Reorienting State and Regional Economic Development: Lessons Learned from National Examples,” January 2014, https://cmap.illinois.gov/wp-content/uploads/FY14-0061-Economic-Development-Report-1.pdf}}} ON TO 2050 recommends the targeted use of incentives for developments that support regional economic goals, such as increasing employment in traded clusters, reinvesting in infill sites, or encouraging mixed-use development near public transit.

Municipal economic development initiatives seek to build vibrant places, enhance job centers and commercial corridors, or retain and build existing industries. Such local efforts vary greatly in scope, from small-scale main street improvements to redevelopment of major office and industrial subcenters. Regardless of its scale, each activity needs municipal staff and elected officials with the knowledge and resources to carry out strategies appropriately, including infrastructure investment, economic development planning, business development, and incentives.

Municipal staff and officials interviewed through the ON TO 2050 planning process emphasized the need for more skill building resources and guidance on economic development best practices.^{{{Chicago Metropolitan Agency for Planning, “ON TO 2050 Alternative Futures Engagement Summary,” 2017, https://cmap.illinois.gov/wp-content/uploads/ON-TO-2050-Alt-Futures-Engagement-Summary.pdf}}} New trainings and resources can also build on the incentive, market, and fiscal feasibility recommendations of ON TO 2050, helping to improve local planning, development, and investment processes. In partnership with COGs, counties, civic organizations, and universities, CMAP should provide technical assistance for communities to build local capacity for economic development planning.