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Nuts and Bolts Economic Development – Making sense of Regulation (Part I)

May 2014

Economic development is important to most communities, regions and states and rightfully so.  This is the stuff that expands the tax base and creates new job opportunities.  Stability comes from these efforts.  Many political campaigns talk about the issue of economic development.  But most economic development tasks are not particularly sexy, often take considerable time, and come from simple good work, sometimes hard work. And because when it’s done well it may seem simple or easy, it may go unnoticed and unappreciated.

Strategic and tactical plans often have some kind of stated vision and its authors may even have unstated grand visions.  Sometimes they look for a magic bullet – the one big thing that will change everything.  Let us not fail to dream, but economic development successes come from your community’s cumulative efforts – where preparation meets opportunity.

Experienced economic developers know that long-term success come from plugging along with the down-to-earth tasks.  We hope to convince public officials of the efficacy of that approach and must communicate both the process and our accomplishments along the road.

I would like to concentrate here on the elements of dealing with regulation.  When regulations tie people up, it’s the red tape.  As economic development professionals it’s our responsibility to help investors/job creators cut through it as much as possible.

Make it easy

Your community and state in a desire to bring in good development and keep out the bad ones, has in all likelihood made it difficult to do either.  Periodically we need to re-examine our regulations.   Let’s make sure our efforts to protect the quality of our communities makes it difficult to do bad things, but still enables us to accomplish good things.

Zoning and other regulations need to be as clear as possible.  Statements of intent can be useful for helping those trying to navigate the system.  As a side bonus they can help newly appointed and inexperienced members of a regulatory body or agency to understand why regulations came to exist.  In the case of land regulations the courts have held that the board members are supposed to know why they are approving or rejecting a project.

Your regulatory agencies and personnel: building, fire marshal, planning, zoning, wetlands, public works, historical preservation, parking authority, water department, traffic control and environmental protection all play a roll in getting projects approved, constructed and operational.

It is not always easy to get the departments to understand the importance of customer service.  I have found that much depends upon the personality of the person in charge.  Certainly, because there are rules and regulations, the customer cannot have everything they would like. Yet it is of paramount importance to help applicants and not let them flounder needlessly.

 “It” Happens. Problems happen.

A good manager plans ahead but the test of a leader is not preventing all problems. Unanticipated things still do happen even when you plan well. Good service comes from being able to face problems and solve them.  When employees assist customers in solving their problems the staff is delivering what they need most. What?

Flexibility is a good thing.  It allows things like airplane wings to bend without breaking, but is not without limits – not without structure.  It accommodates some variation within tolerances.  I have found that it is necessary to change rules sometimes.  For example, industrial park regulations allowed a hotel to locate there when they were written more than twenty years earlier.  But the rules did not anticipate the kinds of directional signs that a modern hotel would need.  So staff recommended a rule change and worked to do it as quickly as possible.  Required public and property owner notifications meant that process took sixty days, but we were advocates for reasonable and prompt corrective regulation.  We shouldn’t be stiff-necked about the quality of rules that may have been written long ago that could not have anticipated every situation including technological changes.

Public agencies should be able to lay out compliance actions for the applicants upfront.  I knew one public safety official who felt that it was okay to keep creating new lists of things to do upon each property inspection and re-inspection during construction.  It drove investors in our community crazy.  They told me that they would be happy to comply if the only the requests were made once, up front and didn’t cause costly time delays. The inspector was never held accountable for poor planning and for stringing out compliance issues.  His supervisor agreed that his behavior wasn’t productive or even fair but said that the state laws provided him a fiefdom and that he alone could determine what constituted public safety.  Neither state law nor his supervisor taught him to communicate better or in a timely way.

Again, it is not the role of staff to roll over and play to dead for any plan or a request by ignoring the regulations.  The effort should be made to help guide them through the process(es) and clearly articulate what the regulations are and the vision behind them.

It may not be within your control, but proper hiring contributes to good execution.  Hire for commitment to good service.  One can usually teach skills but attitudes are acquired over the long-term and may even be built-in.  The organization must interview for attitude and hire people who have a pro-service attitude.  That includes being willing to play on a team versus in silos.

Walk developers through the approval processes

Yes, developers who may come to you are often are experienced builders or engineers or designers.  But each instance brings up different issues and each community is different in how they regulate.  You can help to explain the processes and guide them through nuances of your community.  That can mean introductions to the people, a heads up on personalities and community preferences and the specific regulatory processes. 

The chief elected official or chief of the organization should be helping to not only to set a positive tone but also mediate the sometimes-conflicting missions and desires of departments and agencies.  But don’t be surprised if they turn down that important role or only do so sporadically.  Over time you should be able to gauge the CEO’s interest in the process and read them in as appropriate.  You might be limited to what level of coordination and cooperation that you can convince power centers to do, but you can usually find someone on the executive level who wants to help.

The opposite of not showing favoritism is not indifference and passivity.  It is explaining the process to anyone who asks and offering guidance to some less experienced applicants who don’t know what to ask.  Just because everyone deserves fair treatment does not mean that all projects have equal impact.  The larger fish attract a lot of attention and often do get away.  The smaller projects stay and are deeply appreciative of the help they receive from you.

If you are going to regulate, make the process simpler by having good application forms accompanied by information that explains the program and another that explains how to fill out the forms. And don’t be shy about helping them fill out the forms.  Many business people have good, practical minds and great leadership skills.  However filling out paperwork, especially unfamiliar government paperwork, may not be their strong suit.  Give applicants suggestions but make sure the final submission is theirs.

What goes around comes around

While you can’t make everyone happy, you can make friends for your community by being helpful and those happy businesses will tell their friends.  Being easy, friendly and professional to deal with will become your reputation—your brand.  Moreover it will make you successful in attracting additional investments.

- Jonathan Rosenthal, CEDAS member

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