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Duluth: Emerald of The Great Lakes of Business Opportunities Public Policy Presentation – Charles Laffiteau On behalf of: The Duluth Economic Development Authority

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Economic Development Planning and Recommendations for Duluth Minnesota

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Page 1: Duluth Economic Development Public Policy Presentation

Duluth: Emerald of The Great Lakes of Business Opportunities

Public Policy Presentation – Charles Laffiteau

On behalf of:

The Duluth Economic Development Authority

Page 2: Duluth Economic Development Public Policy Presentation

Duluth: Emerald of The Great Lakes of Business Opportunities

Title selection• Duluth Minnesota’s nickname is “The Emerald

City on the Hill”• Duluth is geographically located on the western

end of the of the biggest of the world’s largest body of freshwater lakes; The Great Lakes.

• Large bodies of water (like lakes and oceans) contain a wealth of valuable unseen resources

• Valuable unseen resources represent excellent Business Opportunities for investors

Page 3: Duluth Economic Development Public Policy Presentation

Duluth’s local government

• The mayor of Duluth is Don Ness. • Duluth has a Mayor-Council form of government,

with the City Administration making policy proposals to a nine member City Council.

• Duluth's five council districts are divided into 36 precincts. Each of the council districts elects its own councilor and the other four councilors are elected at large and represent the entire city.

• Greg Gilbert is the President of the Council.

Page 4: Duluth Economic Development Public Policy Presentation

Duluth’s municipal demographics Duluth is Minnesota’s 4th largest city and

is located in St. Louis CountyEstimated median household income:

$33,766 in 2000$40,772 in 2007Duluth:   $40,772

Minnesota:   $55,802• Females: 43,583   (51.7%)• Males: 40,701   (48.3%)

• Duluth median resident age:   35.4 years• Minnesota median resident age:   35.4 years

Page 5: Duluth Economic Development Public Policy Presentation

Duluth’s municipal demographic trends

over the past decade Population for the past 10 years

• 2008 - 84,284• 2007 - 84,397• 2006 - 84,167• 2005 - 84,781• 2004 - 85,308• 2003 - 86,108• 2002 - 86,384• 2001 - 86,961• 2000 - 86,222• 1999 - 86,319

Page 6: Duluth Economic Development Public Policy Presentation

Duluth’s Weather

• Close to average• Below average

Page 7: Duluth Economic Development Public Policy Presentation

Duluth’s geographical and

environmental features

Page 8: Duluth Economic Development Public Policy Presentation

Duluth’s geographical and environmental features

• Duluth is located at the westernmost point of the Great Lakes on the north shore of Lake Superior

• Duluth is linked to the Atlantic Ocean 2,300 miles (3,700 km) away via the other four Great Lakes and the Erie Canal /New York State Barge Canal or the Saint Lawrence Seaway passages

• Duluth shares the Duluth-Superior Harbor with Superior, Wisconsin and it is one of the most important ports on the Great Lakes because it’s the Atlantic Ocean's westernmost deep-water port

Page 9: Duluth Economic Development Public Policy Presentation

Education in DuluthEducation levels for the municipal population

25 years and over in Duluth are above the US national averages

• Duluth High school or higher: 87.7%• National US High school or higher: 85.2% • Duluth Bachelor's degree or higher: 28.2%• National US Bachelor's degree or higher: 27.7% • Duluth Graduate or professional degree: 9.3%• National US Graduate or professional degree: 8.9%

(US Census Bureau 2000)

Page 10: Duluth Economic Development Public Policy Presentation

Education in DuluthColleges/Universities in Duluth:

• University of Minnesota - Duluth FT enrollment: 8,224 (Public - Offers Master’s and Doctor's degree) • Lake Superior College FT enrollment: 2,512 (Public) • The College of St. Scholastica FT enrollment:1,756 (Private - Offers Master's degree)• Duluth Business University Inc. FT enrollment: 230

Page 11: Duluth Economic Development Public Policy Presentation

Duluth’s Healthcare facilities

Hospitals and medical centers in Duluth:• Miller Dawn Medical Center

(502 E. Second St.) • St. Lukes Hospital of Duluth

(915 E. First St.) • St. Mary's Medical Center

(407 E. Third St.)

Page 12: Duluth Economic Development Public Policy Presentation

Duluth’s utility availability and rates

• Average gas/hot water heating costs for a 1500 sq feet home is $160 a month.

• Average electric cost is $55 a month.• Average water and sewer cost is $30 a month.• Average garbage rates are about $25 a month.

Utilities provided by: • Allete Inc.’s Minnesota Power (electric & other services)• Duluth Public Works and Utilities Department (natural

gas, water and sewer services)• Republic Services (garbage pick-up services)• Waste Management (garbage pick-up services)

Page 13: Duluth Economic Development Public Policy Presentation

Transportation & Interstate access in Duluth

• Interstate 35• US Hwy 2 and 53• Minnesota Hwy 3,

23, 39, 105 and 194

• Duluth-Superior Harbor

• Rail lines for freight – plus an Amtrak station

(that has bus services)

Page 14: Duluth Economic Development Public Policy Presentation

Air Transportation

• Duluth International Airport - Runways: 2, Commercial flights: 4,272, Air Taxi flights: 5,260, Local flights: 15,270)

• Sky Harbor Airport - Runways: 3, Itinerant flights: 2,100, Air Taxi flights: 800,

Local flights: 11,000 • North Country Seaplane Base• Wild Rice Lake Seaplane Base

Page 15: Duluth Economic Development Public Policy Presentation

2008 local tax revenues in Duluth

• Property: $17,702,000 • General Sales and Gross Receipts: $10,938,000 • Other Selective Sales: $5,027,000 • Public Utilities Sales: $1,767,000 • Other License: $482,000 • Alcoholic Beverage License: $313,000 • Pari-mutuels Sales: $115,000 • Occupation and Business License: $39,000 • Amusements License: $20,000

Page 16: Duluth Economic Development Public Policy Presentation

Duluth’s Quality of Life

Boundary Waters National park

Page 17: Duluth Economic Development Public Policy Presentation

Duluth’s Quality of Life Canal Park shopping & entertainment

district

Page 18: Duluth Economic Development Public Policy Presentation

Duluth’s Quality of LifeHistoric Central High School

Page 19: Duluth Economic Development Public Policy Presentation

Duluth’s Quality of LifeGooseberry Falls State Park

Page 20: Duluth Economic Development Public Policy Presentation

Duluth’s Quality of LifeThe shoreline of Lake Superior

Page 21: Duluth Economic Development Public Policy Presentation

Duluth’s Quality of Life

Taxes• Looking at quality of life from an economic standpoint,

Duluth also has a good mix of taxes rather than high taxes. In fact contrary to conventional wisdom, some studies have shown that some “industries may move to states with high taxes if such taxes reflect a better trained work force and a higher level of public amenities that may be attractive to their workers.”

• (Steinnes 1984, 46)

Page 22: Duluth Economic Development Public Policy Presentation

Types of Industrial Development in Duluth

• heavy and light manufacturing plants

(aircraft and aircraft parts dominate) • food processing plants• woolen mills• lumber and paper mills • cold storage plants• fisheries and aquatic biology• grain elevators• oil refineries

Page 23: Duluth Economic Development Public Policy Presentation

Duluth economic development organization

Heidi Timm-Bijold (Interim Director) (218) 730-558

Duluth Economic Development Association (DEDA)Commissioners:• Jeff Anderson• Tony Cuneo, • Todd Fedora,

• Brian W. Hanson,• John Heino, • Don Monaco,

• Christine Townsend

Page 24: Duluth Economic Development Public Policy Presentation

Duluth’s industrial parks

• Air Park of the Duluth Seaway Port Authority

(Modern light manufacturing industrial park)• The Cement Plant site owned by DEDA

(Former Universal Steel and Cement plant)• Clyde Industrial Park

(Former the Clyde Ironworks industrial park)

Recipient of 2008 Economic Development Association of Minnesota Award

Page 25: Duluth Economic Development Public Policy Presentation

Duluth’s industrial parks

Air Park of the Duluth Seaway Port Authority• Home of Northstar Aerospace and perfect location for

aircraft parts and design companies

The Cement Plant site owned by DEDA• DEDA acquired the 64 acre brown field site in 2003 and

environment report shows no hazards present. Ikonics Corporation has the option to purchase approximately15 of the 64 acres at the former Universal Atlas Cement Company plant site as the location for its new manufacturing plant and office headquarters campus

Page 26: Duluth Economic Development Public Policy Presentation

Duluth’s industrial parksClyde Industrial Park

• This former industrial site has the potential to serve as the initial building block for a regional retail power node. “Regional Power Nodes have two or more (retail) power centers with a minimum of 20 big box retailers. These nodes have a large retail draw with sizeable trade areas and are often found surrounding major shopping malls. Simply, the power centers feed off each other. They generate synergies, and in so doing, attract increasing numbers of consumers to the power nodes.”

(Hernandez, Lea, Spagnolo and Maze 2005, 61)

Page 27: Duluth Economic Development Public Policy Presentation

Duluth’s industrial plants

• Cirrus Design (Aircraft manufacturing)• Ikonics Corporation (Photo imaging

chemicals)• Northstar Aerospace (Aircraft parts)• Duluth Pack Store (Camping equipment)• SCS Corporation (Aircraft parts)

Page 28: Duluth Economic Development Public Policy Presentation

Major employers in the Duluth area

Largest employers Number of employees• St. Mary's/Duluth Clinic 3,800• Port of Duluth – Superior 2,000• Duluth Public Schools-ISD 1,700• St. Louis County 1,640• University of Minnesota-Duluth 1,571• City of Duluth 1,060• St. Luke's Hospital 1,143

Page 29: Duluth Economic Development Public Policy Presentation

Unions in the Duluth area

• Unions membership has been declining for the past 40 years along with the population as the old industrial steel mills and cement plants have seen their business decline due to foreign competition. But union sentiments are still fairly strong in the area and many of the workers at the Duluth Superior Port are members of labor unions.

Page 30: Duluth Economic Development Public Policy Presentation

Average wages in the Duluth area

• Education and Health Services industry average weekly salaries of $715 per week or $37,180 per year.

• Trade, Transportation, and Utilities industry average weekly salaries of $532 per week or $27,664 per year.

• Leisure and Hospitality industry average weekly salaries of $236 per week or $12,272 per year.

• Manufacturing industry average weekly salaries of $771 per week or $40,092 per year.

• Construction industry average weekly salaries of $837 per week or $43,524 per year.

Page 31: Duluth Economic Development Public Policy Presentation

Workforce availability in Duluth Unemployment in May 2009:

• Duluth:   7.5%• Minnesota:   7.8%

Most common industries and or occupations• Accommodation and food services (9%) • Educational services (8%) • Construction (8%) • Health care (7%) • Public administration (6%) • Other sales and related workers including supervisors (6%)

Page 32: Duluth Economic Development Public Policy Presentation

Workforce availability in Duluth

Most common industries and or occupations

• Other management occupations except farm managers (4%) • Building & grounds cleaning & maintenance occupations (4%) • Driver/sales workers and truck drivers (4%) • Electrical equipment mechanics and other installation,

maintenance & repair occupations including supervisors (4%) • Professional, scientific, and technical services (4%) • Finance and insurance (3%)• Retail sales workers except cashiers (3%) • Sales representatives, services, wholesale manufacturing (3%)

Page 33: Duluth Economic Development Public Policy Presentation

Economic development programs and

incentives available in Duluth

Local Programs and Incentives• Duluth Economic Development Authority• The 1200 Fund, Inc. • The Duluth Airport Authority • The Seaway Port Authority of Duluth• Team Duluth

Page 34: Duluth Economic Development Public Policy Presentation

Economic development programs and incentives available in Duluth

State Programs and Incentives• Tax Increment Financing Program, a state

authorized financing mechanism, is offered to assist basic businesses in financing their local expansion or location. Funds may be used to purchase land and make public improvements that support business development projects.

• Revenue bond programs to provide a mechanism for businesses to sell bonds at tax-exempt interest rates, allowing firms to receive long-term, low interest financing for fixed assets.

Page 35: Duluth Economic Development Public Policy Presentation

Economic development programs and incentives available in Duluth

Job training programs• The Minnesota Department of Employment and

Economic Development operates the WorkForce Center System and partners with local businesses to provide customized job training and other workforce development services.

• The University of Minnesota–Duluth houses the College of Engineering and The Natural Resources Research Institute

• The College of St. Scholastica and Lake Superior College provide customized training

Page 36: Duluth Economic Development Public Policy Presentation

Duluth’s economic development strengths

• Geographic proximity to vast areas of relatively unspoiled wilderness and lake related fishing and tourism enterprises

• Modern deep water port facilities and the navigable access the largest fresh water lake in the world provides to the United States’ largest trading partner, Canada, as well as to the world via the Atlantic Ocean

• Experienced and well trained workforce

Page 37: Duluth Economic Development Public Policy Presentation

Duluth’s economic development strengths

Geographic proximity to vast areas of relatively unspoiled wilderness and lake related fishing and

tourism enterprises• Quality of life means different things to different

people but for people who value good healthcare and love the outdoors, the Great Lakes is an ideal location. Regional healthcare facilities (employing more than 8,000 people) and tourist related businesses have now overtaken manufacturing as the leading industries in Duluth. In 2008 over 3.5 million tourists visited the area and contributed more than $400 million to the area’s economy.

Page 38: Duluth Economic Development Public Policy Presentation

Duluth’s economic development strengths

Modern deep water port facilities and the navigable access the largest fresh water lake in the world

provides to the United States’ largest trading partner, Canada, as well as to the world via the Atlantic Ocean

• Ideal site for certain types of businesses with the potential to become an industry cluster for the aircraft and aquatic biology research industries. The port has seen strong growth in the shipment of wind turbine components from manufacturers in Europe and North Dakota and in shipments of bulky industrial machinery manufactured around the world and destined for the tar sands oil extraction projects in northern Alberta, Canada.

Page 39: Duluth Economic Development Public Policy Presentation

Duluth’s economic development strengths

Experienced and well trained workforce• Ideal for all types of manufacturing plants. Although the

area’s unemployment rate is lower than the national average the Great Lakes area “has a history of substantial availability of effective workers with adaptable skills. (in addition to a) Willingness of previous out-migrants to industrial employment elsewhere to return in response to strengthened employment opportunities is a part of this labor availability.”

(Webster, Chappelle and Andrews 1997, 7)

Page 40: Duluth Economic Development Public Policy Presentation

Duluth’s economic development weaknesses

• Decline in population from 107,000 in 1960 to 84,000 in 2009

• Litigation involving ED incentive programs • Negative national publicity about Public

Employees Retirement Account (PERA)

Page 41: Duluth Economic Development Public Policy Presentation

Duluth’s economic development weaknesses

Decline in population from 107,000 in 1960 to 84,000 in 2009

• Population decline makes communities desperate for almost any kind of economic development but, unfortunately, its not always the right kind. “This trend is shared by most Plains Region states dependent on production agriculture, regions with huge population densities in the Northeast, as well as the manufacturing heavy “Rust Belt Region” of the Midwest. The population projections plainly demonstrate that the number one need for these communities is to craft a strategy that will retain current population and encourage in-migration of high quality “human capital.”

• (Hewlett 2004, 35)

Page 42: Duluth Economic Development Public Policy Presentation

Duluth’s economic development weaknessesLitigation involving ED incentive programs

• There is no getting around the fact that a history of litigation enforcing claw backs can deter some potential investors. “Duluth, for example, won an injunction that kept the Triangle Corporation from moving its plant because an Industrial Revenue Bond issuance contained language prohibiting the firm from moving equipment purchased with the bond out of the city.” Market forces or other factors beyond a company’s control can sometimes result in fewer jobs than expected so investors may balk at incentives that include contractual obligations linked to their future performance. So ED officials must consider if “The costs of enforcement are prohibitively high, so high that they offset the expected public benefits and cut into the power of the subsidy as a location incentive.”

(Weber 2002, 50) (Ledebur and Woodward 1990, 2003)

Page 43: Duluth Economic Development Public Policy Presentation

Duluth’s economic development weaknesses

Litigation involving ED incentive programs

• Although Duluth did win some relief in the courts by forcing Triangle to maintain some tool plant operations in Duluth for several more years, in the final analysis one has to question whether maintaining those jobs was really worth the damage the city’s ED reputation suffered. But if nothing else “the Duluth example demonstrates that for cities to really get what they want out of tax incentive agreements, they need to be more specific in spelling out the mutual obligations of the parties.”

(Ziance 1998, 39)

Page 44: Duluth Economic Development Public Policy Presentation

Duluth’s economic development weaknesses

Negative national publicity about Public Employees Retirement Account (PERA)

• A New York Times feature on Duluth’s Public employees pension fund called “The Next Retirement Time Bomb” was not a ringing endorsement of Duluth’s previous municipal government officials. The city is now grappling with a very large budget deficit as a result.

(http://www.nytimes.com/2005/12/11/business/yourmoney/11retire.html?_r=1)

Page 45: Duluth Economic Development Public Policy Presentation

Economic development theories

Rostow’s urban growth and development stage theory

• This theory applies to the US and Duluth in so far as Duluth and the “Rust Belt Region” prospered during stage 4 but are struggling to adapt as the US economy goes through the decline of manufacturing associated with Stage 5. “Stage 5 - The economy is geared toward mass consumption. Consumer durable industries flourish. The service sector becomes increasingly dominant.” However as Sharp notes, in stage 5 “not all jobs are in the nonmanufacturing service sector. Those communities with histories of preeminence in manufacturing will continue to see their future tied in part to that industry.”

(Hassett 2009, 28)

(Sharp 1990, 227)

Page 46: Duluth Economic Development Public Policy Presentation

Economic development theories

Location theory

• Location theory also applies because Duluth has a unique location as the westernmost deep water port in North America for the Atlantic Ocean. Blair and Premus write that “one of the simplest location models is; the transportation cost minimization case.” which explains why Duluth prospered throughout much of the 20th century. Duluth’s location still offers transportation cost minimization advantages for certain industries. But in today’s modern economy, they also note that location theory by itself is not a good predictor but should be enhanced to include the effects of bargaining between the public and private sectors (i.e. economic development incentives)

(Blair and Premus 1993, 3)

Page 47: Duluth Economic Development Public Policy Presentation

Economic development theories

Cluster theory

• Duluth and the Rust Belt Region as a whole fit the definition of a declining mature industry cluster that initially evolved in the Great Lakes Region due to low transportation costs for iron ore, coal and other natural resources used by manufacturing firms like steel mills and auto manufacturers. But as Cortright explains “The cluster life cycle also includes the possibility that clusters may reinvent or redefine themselves as markets and technology change. Such reinvention or redefinition may reinvigorate declining clusters.”

(Cortright 2006, 7)

Page 48: Duluth Economic Development Public Policy Presentation

Economic development recommendations:• Do an honest assessment of Duluth’s strengths & weaknesses• Develop a coordinated “Regional” ED strategy • Share both the ED incentive “costs” and “benefits” with your

“Regional partners”• Discuss ED strategies with local citizens and ask for their input

and support• Focus on industries using or making heavy or bulky goods best

suited for water transport • Emphasize the region’s proximity to wilderness beauty and

quality of life advantages this offers entrepreneurs• Improvements to insure the viability of Duluth’s skywalks and

downtown mall • Consider development of a regional retail power node through

the use of Tax Increment Financing (TIFs)

Page 49: Duluth Economic Development Public Policy Presentation

Economic development recommendations:

Do an honest assessment of Duluth’s ED strengths and weaknesses

• This is the most critical initial step in developing an effective ED strategy. “Goals and objectives should emerge from the assessment of the city’s strengths and weaknesses. They should address ways of building on strengths and overcoming weaknesses.”

(Ponte 1986, 352)

Page 50: Duluth Economic Development Public Policy Presentation

Economic development recommendations: Develop a coordinated “Regional” ED strategy

• It is imperative that Duluth co-ordinate ED strategy with St. Louis County, the state of Minnesota, Superior Wisconsin and the state of Wisconsin. "Such an approach prevents duplication of work, encourages cooperation instead of rivalries and addresses the specific challenges an established community faces in attracting and retaining employers and the associated tax base.” Northern Minnesota and northern Wisconsin are facing the same challenges but also share the same location and freshwater port advantage so they should develop an ED strategy that addresses regional needs.

(Disque 2004, 33)

Page 51: Duluth Economic Development Public Policy Presentation

Economic development recommendations:

Share both the ED incentive “costs” and “benefits” with your “Regional partners”

• It’s more important to persuade companies to locate in the region and or near the port as opposed to in a specific city like Duluth. Sharing costs of regional ED incentives with partners still provides benefits for local retailers and buyers for homes in the Duluth area which brings in more tax revenues for Duluth. But remember that “all communities have primarily two financing options: tax yourself or use other peoples' money. How a community approaches financing depends on local culture, financing laws, and the community's ability to attract capital.”

(Hewlett 2004, 38)

Page 52: Duluth Economic Development Public Policy Presentation

Economic development recommendations:Discuss ED strategies with local citizens and ask for

their input and support• Discussing your ED strategies with local citizens as well as

local business leaders and asking for their input makes it more likely that they will support the various ongoing infrastructure investments or tax incentives that the city and its regional partners will need to offer businesses and investors. The “solution is to employ multi-faceted development strategies that mix targeted initiatives based on systematic analyses with idiosyncratic initiatives based upon the inclinations of specific large investors. The combination allows policy makers to incorporate differing knowledge bases, be sensitive to political considerations and assure a continual level of action.”

(Beauregard 1993, 380)

Page 53: Duluth Economic Development Public Policy Presentation

Economic development recommendations:Focus on industries using or making heavy or bulky

goods best suited for water transport

• In areas of the “Rust Belt Region” like Duluth, the ED focus should be on attracting industries that are using and or producing goods that are heavy or bulky and could thus be more efficiently and economically shipped by water. A more sophisticated ED approach such as the three-phase evaluation process involving Economic Performance Assessment, Targeting Diagnostics and Policy Development and Analysis “with each phase aimed at helping practitioners identify target industries for economic development” would help Duluth and its “regional partners” target the most appropriate industries for ED recruitment.

(Weisbrod and Piercy 2007, 32)

Page 54: Duluth Economic Development Public Policy Presentation

Economic development recommendations:Emphasize region’s proximity to wilderness beauty and

quality of life advantages this offers entrepreneurs• Quality of life issues are especially important to young

entrepreneurs such as those involved in developing “green” technology. But the keys to attracting entrepreneurs are “1. Recognize worldwide competition 2. Play to existing strengths 3. Partner with initiators and accelerators to develop creativity 4. Support institutions such as workforce training centers and community colleges 5. Leverage connections to other regions and networked approaches 6. Employ social networking and marketing 7. Use basic infrastructures and regulatory flexibility to support creativity 8. Create sustainable, eco-friendly communities that attract creative companies and people.”

(O’Neill 2007, 11)

Page 55: Duluth Economic Development Public Policy Presentation

Economic development recommendations:

Consider development of a regional retail power node through the use of Tax Increment Financing (TIFs)

• Duluth could try to develop a regional power node to draw retail customers from around the region (like Frisco Texas) and from across the Canadian border. Cross border shoppers from Canada could make up for the decrease in American tourists during the winter months. “Research has shown that the primary reason Canadians shop south of the border is that prices are generally lower in the United States, caused by lower profit margins, more retail competition, and lower taxes.” Furthermore, In Frisco “The 1,200-acre zone was established for a duration of 31 years, and $8.4 million of debt has been issued to pay for the improvements. The captured appraised value for this zone was $185 million through 2001. By March 2004, the captured appraised value for this zone increased to $529.4 million.”

(Timothy and Butler 1995, 23)

(Ingraham, Singer and Thibodeau 2005, 13)

Page 56: Duluth Economic Development Public Policy Presentation

Economic development recommendations:

Improvements to insure the viability of Duluth’s skywalks and downtown mall

• Skywalks have a limited function because “the best designed public spaces are those that successfully encourage the most optional and social activities. Skywalks are designed primarily to accommodate pedestrian flow and quick-stop shopping (necessary activities) and provide few opportunities for sitting and people watching. Evaluate whether or not the city and local citizens are willing to make the necessary improvements that will insure the continued viability of Duluth’s downtown mall. “To be successful, downtown malls must integrate into the downtown fabric and provide fluid connections to the downtown streets outside, not be a destination unto themselves as is the case with most suburban malls.”

(Robertson 1993, 364) (Robertson 1997, 394)

Page 57: Duluth Economic Development Public Policy Presentation

Economic Development Lessons Learned

• Current and past history show us free markets are not perfect. In an imperfect market, if a community’s local government doesn’t take an active role in competing for economic development projects, its residents will eventually experience an erosion of the local job opportunities and retail business and service establishments that provide tax revenues to help pay for the community’s public services and maintain its infrastructure and their quality of life. As Watson notes it is “in the market’s failure to distribute its bounty equally, we find justification for an active role by local governments in economic development.”

(Watson 1995, 4)

Page 58: Duluth Economic Development Public Policy Presentation

Economic Development Lessons Learned • Economic development entails local ED officials and political

leaders recruiting new businesses and or retaining existing ones. But as Lindblom notes “Businessmen have to be induced to perform their functions, induced somehow by the income, prerogatives, indulgences or autonomy accorded them.” Unfortunately ED officials have an inevitable bias in favor of business as a consequence. Rubin suggests that “economic development practitioners will push for localities to make concessions so that they can show some progress in their work.“

(Lindblom 1974, 5)

(Rubin 1988, 249)

Page 59: Duluth Economic Development Public Policy Presentation

Economic Development Lessons Learned• The best ED strategies are multi-faceted and flexible

ones that acknowledge the local community’s weaknesses and build on its unique strengths rather than trying to copy the ED strategies used by other communities. But identifying the most appropriate targets for recruitment requires sophisticated and on-going analysis “Economic development targets identified via LEAP or any other analysis system will only be achieved if a strategy plan is put in place to address remaining needs and to actively entice such business growth and attraction.”

(Weisbrod and Piercy 2007, 37)

Page 60: Duluth Economic Development Public Policy Presentation

Economic Development Lessons Learned

• But when partnering with other communities ED officials must also be aware that "Each community reflects a unique civic culture, historically defined local systems for political and/or public action and processes for distribution of goods. It is thus possible that two communities could have the same interests within the ruling coalition, yet because of different customs or processes, use very different economic development policies."

(Reese and Rosenfeld 2001, 308)

Page 61: Duluth Economic Development Public Policy Presentation

Economic development references

• Beauregard, Robert A. 1993. Constituting Economic Development: A Theoretical Perspective in Theories of Local Economic Development, eds. Richard D. Bingham and Robert Mier, 267-283. Thousand Oaks, CA: Sage.

• Blair, John P. and Robert Premus. 1993. Location Theory in Theories of Local Economic Development, eds. Richard D. Bingham and Robert Mier, 1-26. Sage: Thousand Oaks

• Cortright, Joseph. March 2006. Making Sense of Clusters: Regional Competitiveness and Economic Development. The Bookings Institution Metropolitan Policy Program

• Disque, Sharon. 2004. A Seat at the Table. Economic Development Journal 3(1): 26-34.

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Economic development references

• Hassett, Wendy. 2009. Theories of Economic Development. Week Four Lecture : 1-35

• Hewlett, Roderic. 2004. In Plain Sight. Economic Development Journal 3(4): 33-39

• Lindblom, Charles E. 1974. Why Government Must Cater to Business. Business & Society Review 27: 4-6

• O'Neill, Robert J. Jr. 2007. Management Insights: Fueling the New Creative Economy. Governing 20 (11): also available at http://www.governing.com/column/fueling-new-creative-economy

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Economic development references

• Reese, Laura A. and Raymond A. Rosenfeld 2001. Yes But…: Questioning the Conventional Wisdom About Economic Development. Economic Development Quarterly, 15(November): 299-312

• Rubin, Herbert J. 1988. Shoot Anything that Flies; Claim Anything that Falls. Economic Development Quarterly 2(3): 236-251.

• Sharp, Elaine B. 1990. The Meaning of Economic Development in Urban Politics and Administration, 215-235. New York: Longman.

• Watson, Douglas J. 1995. Competitive Governments in The New Civil War, 1-14. Praeger: Westport, CT.

• Weisbrod, Glen and Brett Piercy. 2007. New Tools for Economic Development Targeting and Strategy. Economic Development Journal 6(3): 30-38.

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Economic development referencesPeer-reviewed sources

• Hernandez, Tony, Tony Lea, Anthony Spagnolo and Amanda Maze. 2005. Shopping Centers, Power Retailing and Evolving Retail Environments. Journal of Shopping Center Research 12(1): 55-111

• Ingraham, Allan T., Hal J. Singer and Thomas G. Thibodeau. 2005. Inter-City Competition for Retail Trade: Can Tax Increment Financing Generate Incremental Tax Receipts? Criterion Economics LLC Working paper (July 22, 2005):1-15

• Ledebur, Larry and Douglas P. Woodward. 2003. Adding a Stick to the Carrot in Financing Economic Development in the 21st Century, eds. Sammis B. White, Richard D. Bingham and Edward W. Hill, 70-91. Armonk, N.Y.: M.E. Sharpe.

• Ponte, Robert. 1986. An Economic Development Approach for Small Cities. Journal of the American Planning Association 52 (3): 349-354.

• Robertson, Kent. 1993. Pedestrianization Strategies for Downtown Planners: Skywalks versus Pedestrian Malls. Journal of the American Planning Association 59 (3): 361-370.

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Economic development references

• Robertson, Kent A. 1997. Downtown Retail Revitalization: A Review of American Development Strategies Planning Perspectives 12 (4): 383-301.

• Steinnes, D. N. 1984. Business climate, Tax Incentives, and Regional Economic Development. Growth and change 15 (2): 38-47.

• Timothy J. Dallen and Richard W. Butler.1995. Cross-border shopping: A North American perspective Annals of Tourism Research 22 (1): 16-34.

• Weber, Rachel. 2002. Do Better Contracts Make Better Economic Development Incentives? Journal of the American Planning Association 68 (1): 43- 55.

• Webster, Henry H., Daniel E. Chappelle and Stephen C. Andrews. 1997. Tourism and Forest Products: Twin Resource Sectors for Effective Community Development in the Lakes States. Staff Series Paper Number 124, 1-29. St. Paul, MN: Department of Forest Resources, College of Natural Resources, University of Minnesota.

• Ziance, Scott J. 1998. Making Economic Development Incentives More Efficient The Urban Lawyer (30): 33-63.

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Economic development referencesInternet sources

• Duluth Area Chamber of Commerce www.duluthchamber.com (218) 722-5501• Duluth Economic Development www.duluthmn.gov (218) 730-5580 • Minnesota State Offices: Northeast Regional Tourism Office www.state.mn.us (218) 723-4692 • Minnesota State Offices: Thompson Hill Information Center

www.exploreminnesota.com (218) 723-4938 • University of Minnesota – Duluth: Center for Economic Development www.umdced.com (218) 726-7298• US Census Bureau www.census.gov/main/www/cen2000.html