What a developer looks for and what a municipality is needs to match
Developers look for certain attributes in a municipality where they may do business. Municipalities should understand what that is, and work to have those attributes already in place.
November 24, 2014 - Author: Kurt H. Schindler, Michigan State University Extension
To be ready for economic development means your community has to understand what developers are looking for. And then make sure your community has most, if not all, of those attributes.
That was the main message from a panel discussion of developers at this year’s Michigan Association of Planning (MAP) annual education conference. The panel consisted of Shannon Morgan, HRS Communications/Home Renewal Systems; Jason Horton, Lormax Stern Development Company and Pat Gillespie, Gillespie Group. The session was moderated by Jennifer Rigterink of the Michigan Economic Development Corporation.
The panel started by indicating a developer will first look at how engaged a municipality is for development. They are looking for a municipality that has educated municipal officials on development, economics and community planning. The level and tenor of public understanding of development projects is important. For example, there are certain services provided by a community which need to be efficient. If it is inefficient (that is it takes too long) that shows there is a lack of engagement by the municipality. Panelists indicated a municipality that does not have local inspection departments, or that have privatized inspection function, is a major negative.
A developer will pursue the path of least resistance. Everything else being equal the more efficient community will win for development.
Some of the homework done by a potential developer will be to look at past minutes from a community. They are trying to predict if their project will be approved or not. The minutes will paint a track record based on past cases which will be used to evaluate a community. One of the factors looked for is a municipality that stands up to a small number of Not in My Back Yard people (NIMBYs).
There are local governments that have a reputation of being hard to work with. Morgan said developers regularly talk to each other and share their experiences with local governments. Horton added if a municipality is trying to overcome a poor reputation there are a number of things it should do:
- Acknowledge the past difficulties.
- List what has been changed.
- Be able to show a new business model and improved track record.
“Have to prove it” Morgan said, “that change has taken place.”
Developers are also looking for a certain level of sophistication by a municipality. There are tools and best practices which can be used Morgan pointed out. Rigterink pointed to the Redevelopment Ready Communities Program. This program is a review of a municipality’s master plan(s), administrative processes, policies and so on. Upon a successful evaluation, the community obtains a certification. The certification is to indicate those communities that use best practices, streamlined, efficient operations and similar.
It is a bad thing for a municipality to not understand the various tools and processes they already have in place (downtown development authority (DDA), tax increment financing (TIFF), permits process). It is very important for local officials, staff, to know about the economic tools that are available and how, or if, they should be used.
“So do those things,” Horton said. When people are truly engaged in their community process, then those are the people who are educated and understand the value of development. That is where support comes from, that is where local elected officials can turn to for support.
Horton added a developer wants transparency, predictability. Having to make significant changes to plans, being blindsided in the review and approval process or having rules change mid-way through are bad things.
Morgan explained a developer will work to have a working relationship with municipal staff. The developer wants to understand a community’s vision, passion and looks to local staff as those best able to help them understand this.
“Those relationships are everything,” Horton said. Need that detailed dialog to have a level of understanding which reduces the number of unknowns. Any community will have concerns, and needs. That is okay. It is important to express them right at the beginning. What is not okay is to fail to be forthright about those concerns, or to have them come up later in the process.
For this to work, Morgan said, there is an expectation the municipality will have made major efforts to connect with its local stakeholders – even those with whom the community may not agree with. Local government needs to be working with:
- Local opposition
- Neighborhood associations
- Other neighboring and regional governments (municipalities in the region, school district, road agencies, county building codes and so on).
If opposition does materialize, there should be a working relationship already in place to start conversations that may work toward a solution. The goal is for a municipality to foster thoughtful public engagement, maybe even at a level of one-on-one conversation Horton suggested.
A municipality needs to have knowledge of its demographics, market data, and understand it. The understanding needs to be at a depth that representatives of the municipality can explain it to others –such as the developer’s team of people. That data should also be in easy-to-understand format which is available to anyone. At a minimum, all panelists suggested data a community should have includes:
- Employment, growth numbers
- Immigration patterns
- Foreclosure trends
- School system strengths
- Apartment and rental rates
- Information on all building permits and zoning permits
- Demographics (in particular the Millennials and Boomers)
- Sewer line size and capacity
- Water line capacity
- Assessment of storm sewer adequacy
- Private utilities (gas, electric)
- List of sites ready for redevelopment (maybe with the phase I environmental assessment already done)
It is best is to have all this information posted on the municipal website.
Sometimes, smaller municipalities do not have staff, or are too small to have the resources to do all of the above. In those cases, county government should provide the staff support for the municipalities within the county. That can be done through a county planning department, community development department or an economic development organization. Michigan State University Extension can provide expertise to help counties evaluate what is in place and what cooperative effort can be created to improve a region’s competitive standing.