Maintaining competitive
urban cores in Ohio

Presentation to the Ohio House Subcommittee on Growth and Land Use by David Goss, Senior Director of Transportation and Infrastructure, Greater Cleveland Growth Association

For the past decade, the Greater Cleveland Growth Association has proactively advocated at the state level for new/modified policies and programs that would enhance the economic competitiveness of urban core areas in Ohio. This urban core focus is based on national research that definitively shows that regions in the U. S. with strong urban cores are more competitive than regions with weak cores.

Ohio is one of the country's most urban states. With seven major urban regions, plus several important smaller urban areas, more than three-quarters of the state's population and jobs are located in urbanized areas. Within each of these areas, there is an urban core that is distinctly different in economic character from its more suburban and rural counterparts.

Although state government has participated as a key partner in many urban redevelopment efforts, Ohio needs to make a greater commitment of both attention and resources to reversing the growing disparity between urban cores and the areas that surround them.

For many years, the urban core of the Greater Cleveland region has been losing population and jobs (primarily in manufacturing) for a variety of reasons. This situation has created very inefficient regional development patterns. Furthermore, existing Ohio policies and programs often contribute to this dilemma in unintended ways. In the few minutes I have available today, I want to recommend several ways that Ohio could become a true partner with the public and private sectors in urban cores to facilitate economic development growth and a more managed development process that is focused on sustainability and quality of life.

There are four basic components of the GCGA's urban core advocacy position:

• Infrastructure
• Education and Workforce Development
• Tax Reform
• Business Assistance

Infrastructure

For the past 20 years, the Growth Association has been a partner with the key public infrastructure agencies in Cuyahoga County to preserve and rehabilitate existing public work infrastructure systems through Build Up Greater Cleveland. Since 1983, approximately $5.5 billion of federal, state and local funds have been invested to improve the water quality of Lake Erie and related rivers, maintain and rehab roadways, replace bridges, modernize public transit equipment and facilities, enhance the region's water systems and upgrade the Port of Cleveland.

These infrastructure investments have helped to provide a strong foundation for making the urban core more attractive for growth. However, much more needs to be done. It is estimated that within Cuyahoga County alone, the annual funding shortfall for infrastructure preservation/rehab is approximately $150 million and this does not include funds for major projects such as Innerbelt (I-90) replacement, Shoreway (SR 2) reconstruction, CSO programs and new transit capacity.

In the past, several state actions have assisted the Greater Cleveland urban core in upgrading its infrastructure systems:

• Issue 2 Bond Program of the Ohio Public Works Commission
• Recent state gas tax and license/registration fee increases-with approximately ½ of proceeds going directly to local governments
• Ohio Water Pollution Control Fund-low interest loans for water/wastewater projects

However, more assistance is needed:

• More equitable way of distributing applicable state gas tax proceeds to local governments (need based)
• Need for new dedicated state capital support for priority non-highway transportation projects
• Renew Issue 2 Bonds-at higher level (has not changed in 20 years)
• Provide state grants to local governments to meet mandated storm water and CSO water quality standards (Phase II related)

Education and Workforce Development

The Growth Association has been a focal point for developing new initiatives to provide a higher quality workforce in Northeast Ohio to meet changing employee skill needs. This is relevant to today's discussion since most of the regional workforce resides in the urban core that has a high unemployment rate due to layoffs/companies moving outside the region/unqualified people for today's job opportunities.

The Growth Association's programs are focused on a variety of workforce needs such as:

• Improving the quality of students graduating from Cleveland Public Schools
• Retaining college graduates (brain drain)
• Upgrading skills for incumbent workers and recently laid off workers

New and modified state programs and policies are needed to assist the Growth Association in meeting this ever-changing urban workforce development environment. There is also a need to ensure that state training resources are targeted to those programs that are based on employer-supported and accepted skills standards and are focused on industry clusters and sectors that are important to the state's and region's economic future.

Tax Reform

State tax reform has been and will continue to be a high priority for the business community. As you probably know, a recent report from the Tax Foundation ranked Ohio #47 on its State Business Tax Climate Index. Reports like this are counterproductive to our strategic efforts to retain/attract/grow jobs in NE Ohio, and more specifically within the region's urban cores.

The Growth Association is fully aware of the tax reform challenge that the Legislature faces over the next 18 months. But we also perceive this situation as an opportunity for this Subcommittee to analyze in depth how current tax policies impact growth and development in Ohio and to determine how such policies might be modified to achieve desire growth/development objectives.

Thus, when the Subcommittee deliberates on its findings and recommendations, we would ask you to give priority to tax reform issues that would help make urban cores more competitive, such as:

• Modifying current Tax Increment Finance (TIF) legislation to allow local income tax incremental increases from development to be used (in addition to property tax increases) to support TIF bonds
• Instituting more equitable ways of funding public schools at the local and state levelsTax credit incentives for high-growth and small businesses

Business Assistance

Currently, the Ohio Department of Development has a variety of excellent programs to facilitate economic development in urban cores. Their major deficiency is that they are underfunded. In addition, serious consideration needs to be given to providing priority funding as part of these programs for distressed areas (e.g., greater credits for new jobs created/retained and returning the enterprise zone program to its original intent).

Recently, the state has formulated two new programs that will greatly assist urban core redevelopment:

• Clean Ohio Program (brownfields)
• Third Frontier (technology; support needed in November election)

The 4-year Clean Ohio Bond Program will be up for renewal in 2 years and serious consideration needs to be given to renewing this program at a higher level of funding. It is currently the most effective program that makes Ohio a proactive partner in the redevelopment of the many brownfields located in the state's urban cores while also focusing on preserving rapidly decreasing urban open spaces.

A few years ago, as a result of the Legislature's Urban Revitalization Task Force's deliberations, a series of creative jobs bills were passed that provided improved incentives and policies to stimulate jobs in urban cores. It would be worthwhile to revisit some of the issues discussed by this Task Force that were not acted upon that would achieve desired growth and development goals being addressed by this Subcommittee.

For example, a prerequisite to economic development in the urban core is the availability of ready sites for business development (50+ acres). Appropriate sites must be ready at the time the location decision is being made, not in response to these deliberations. Few, if any, firms are willing to commit to a location strategy that can take years to accomplish and cost far more than sites outside the core areas. Yet funds to accomplish such up-front urban land assembly are extremely scarce. There is a growing need for the state to provide funding support to help create/enhance land banks for economic development purposes in urban core areas. Without such a land bank mechanism, urban cores cannot compete with outlying areas that have large areas of "greenfields" that can be relatively quickly purchased. This deficiency is a major contributor to urban sprawl. Hence, it is requested that this Subcommittee give serious consideration to recommending the creation of an urban economic development revolving loan and grant programs targeted to assist land assembly and redevelopment in urban core neighborhoods.

Regional Planning

In closing, I would like to indicate the Growth Association's support for the report that will be issued at the end of the year by the Ohio Lake Erie Commission (OLEC) that will provide a framework for achieving balanced growth in the Ohio Lake Erie Watershed. I have been an active participant in the development of this Balanced Growth program. One of the major deterrents for achieving sustainable development in Ohio is the lack of any formal mechanism for formulating regional development plans. The OLEC's report will propose a watershed-based planning process for the Lake Erie Basin that would support managed regional growth while simultaneously improving Lake Erie's water quality. To work, this watershed-based planning process will require new state incentives and a tweaking of current programs/policies that govern the operation of existing state departments. I urge the Subcommittee to give serious consideration to the recommendations of the OLEC's report that will require legislative action.

David Goss
Greater Cleveland Growth Association
50 Public Square, Suite 200
Cleveland, OH 44113
dgoss@clevegrowth.com
(216) 592-2343

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EcoCity Cleveland
3500 Lorain Avenue, Suite 301, Cleveland OH 44113
Cuyahoga Bioregion
(216) 961-5020
www.ecocitycleveland.org
Copyright 2002-2003

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Although state government has participated as a key partner in many urban redevelopment efforts, Ohio needs to make a greater commitment of both attention and resources to reversing the growing disparity between urban cores and the areas that surround them.