Monday, April 28, 2003

Development plan follows trend

Panel urged Cincinnati shift duties to private group

By Ken Alltucker
The Cincinnati Enquirer

In many ways, Cincinnati's overhaul of its development efforts will bring the city into the 21st century of business recruitment and retention.

Experts say it's becoming increasingly common to shift the bulk of development duties from cities to private, nonprofit groups such as the Cincinnati Development Authority recommended last week by a mayoral commission.

"The free-standing economic development corporation is the most prevalent form of economic development in the U.S.," said Danny Fore, who heads Northern Kentucky's three-county economic development group and also teaches the subject at the University of Kentucky.

Mayor Charlie Luken last week urged City Council to endorse a series of changes that would shift most economic development functions out of City Hall. The most controversial proposal is to disband the Port of Greater Cincinnati Development Authority and shift its duties - while expanding its powers to include eminent domain - into a private, nonprofit development authority with citywide jurisdiction.

Developers have complained for years that the city's existing bureaucracy is unwieldy and hinders new projects more often than it helps. What's more, they say the city has precious few opportunities to get it right as more homebuilders, retailers, and businesses seek expansion in the rapidly growing suburbs.

"We have never gotten any help from the city's administration," said Rob Smyjunas, a developer who built Oakley's Center of Cincinnati retail development. "The city's administration went out of its way to put up wicked hurdles."

One example:

Smyjunas said the city's administration told him it would "absolutely not" help him acquire two homes through eminent domain. He built the project, but he said the extra cost and hassle of acquiring holdout properties forced him to cut many of the fancy touches he wanted to build. Later, the city's planning commission blasted his project's design for delivering cookie-cutter department stores such as Meijer and Target.

Meanwhile, upscale projects such as Rookwood Commons in Norwood and Newport on the Levee flourish in smaller suburbs where political leaders have been anxious to foster development.

To fix the perception Cincinnati isn't developer-friendly, Luken's Economic Development Task Force also recommended a "strike team" developer-advocacy group in the city manager's office and a one-stop center for permits and information on all required government approvals. Another nonprofit group funded by private sources would advocate riverfront, downtown and Over-the-Rhine development.

While details aren't expected to be revealed before City Council's finance committee meets on May 5, politicians already raised objections.

Vice Mayor Alicia Reece wants voters to have more say over such changes. Hamilton County Commissioner John Dowlin questions why the county's elected officials weren't informed of the plan to scrap the port authority before it was unveiled last Wednesday.

"There will be no changes to the port authority unless the county votes to change the contract," said Dowlin, who acknowledged the current port authority "is definitely not working."

Phil Heimlich pushed a similar proposal in 1999 when he served on City Council. Now a Hamilton County commissioner, Heimlich's only objection is that the proposal doesn't include the county.

Fifth Third Bank President George Schaefer Jr., who co-chaired the task force, described the fixes as a vast improvement over the existing structure and challenged critics to "give us a better idea."

Schaefer said he learned firsthand how difficult development in the city could be when his bank invested $62 million-plus to renovate the former U.S. Shoe Building in Madisonville into an office and call center.

It took his staff hundreds of hours of work to get all proper approvals and incentives, a task too daunting for many smaller firms seeking to expand in the city.


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