Economic Development Strategies in Baltimore & Philadelphia

Panelists: Ioanna Morfessis, President & CEO, Greater Baltimore Alliance; Michele Whelley, President, Downtown Partnership; Jeremy Nowak, CEO, The Reinvestment Fund, Philadelphia.

Ioanna Morfessis described the mission and purpose of the Greater Baltimore Alliance (GBA). GBA is a regional economic development corporation that works to promote the Greater Baltimore area as a premiere business location.

Ms. Morfessis provided a broad context for GBA’s economic development strategies. Local, national, and international economies are in a phase of weakness and slow development, she said. Even though the U.S. economy is technically no longer in recession, American firms report only nominal growth. Because other countries have aggressive, well-funded economic development initiatives designed to attract U.S. businesses overseas, regional competition within the United States has become increasingly fierce. Baltimore’s regional economy has fared better than others due to its success in retaining information technology firms and companies with defense and homeland security contracts.

In addition to recruiting new firms to the Baltimore region, Ms. Morfessis stressed the importance of retaining companies that are already located here. One of the keys to this retention, she said, is a qualified workforce. Due to the tight economy, businesses are increasingly unwilling to work with harder-to-serve populations. At the same time, she predicted, businesses will be called upon to demonstrate an increased commitment to the communities where they are based.

Calling people the Baltimore area’s “most valuable asset”, Ms. Morfessis said that institutions concerned with the region’s health must develop ways to offer economic opportunities and help young people realize their aspirations. GBA has encouraged the local philanthropic community to focus on methods of keeping young people from leaving. Young Baltimore residents, she said, are a key to success. She mentioned that in Philadelphia, new market growth in real estate is driven not by homeowners, but by high-end renters.

In the question and answer period that followed, Ms. Morfessis spoke about the disconnection between the business sector and public economic development strategies, saying that no political will currently exists at the city or state levels to make the region competitive. Regarding factors that attract companies to an area, she said that some business leaders make their decisions based on a jurisdiction’s tax structure.

Michele Whelley described downtown Baltimore as encompassing the area from Mount Royal Avenue to the Inner Harbor, and from Martin Luther King Boulevard to President Street and Fells Point. Downtown Partnership (DP) manages and administers the Downtown Management District, a 106-block business improvement district defined by city law. DP employs approximately 70 men and women who perform public safety and maintenance duties in this area.

DP develops partnerships with local government and the private sector to identify needs and develop strategies designed to strengthen the area’s economic vitality. Recently, DP worked with city government and local businesses to establish the Baltimore Parking Authority in response to companies’ concerns about the lack of available parking space downtown. Another DP-led revitalization effort involves the conversion of vacant class C commercial buildings into residential space. One of DP’s newest initiatives is the creation of DASH, a shuttle service that provides transportation between parking lots and points throughout the downtown area. Ms. Whelley said that DASH was created as an interim solution to the parking problem while development of new parking space is underway.

Currently, DP is examining the issue of homelessness in the downtown area. Ms. Whelley said that one idea under consideration is the combination of outreach and services for homeless individuals with civility regulations that would reduce panhandling. She cited Philadelphia’s Comprehensive Sidewalk Law, which has been effective in reducing the visibility of the homeless population in Center City Philadelphia.

Ms. Whelley echoed Ms. Morfessis’ call for a more talented workforce. Baltimore has the potential to be a leader in creating jobs in the information technology and bioscience fields, she said. But in order to accomplish this Baltimore must be successful in retaining and attracting businesses and in providing a skilled workforce.

In the question and answer period that followed, Ms. Whelley emphasized that quality of life is an important factor in a business’ decision to remain in or relocate to an area. We must have a cleaner downtown, she said, and we must acknowledge that there are some things we cannot change. Regarding transportation connections between city residents and suburban jobs, she said that a task force appointed by Governor Glendenning is considering the adoption of a mass transit system based on that of Washington, D.C. However, such a system would take approximately 40 years to fully implement.

Jeremy Nowak said that The Reinvestment Fund (TRF) works in Philadelphia “at the intersection between economic growth and social capital betterment.” According to its mission statement, TRF is “a development finance corporation with a wealth-building agenda for low- and moderate-income people and places through the strategic use of capital, information and market systems/innovation.” TRF provides financial support for affordable housing, community service organizations, small businesses, workforce development programs and energy conservation projects.

TRF uses the following strategies in its work:

  • Using place-based strategies to target investment to places that need it most;
  • Restoring the connection between investment in growth and investment in people (i.e. by connecting inner cities with regional growth clusters); and
  • Focusing on social equity issues by developing the most appropriate methods for states to be redistribution agents.

 

Among the challenges to the work of TRN, Mr. Nowak cited the following:

  • Accelerating levels of concentrated poverty in urban areas;
  • The movement of economic growth and opportunity toward the suburbs;
  • The lack of effective transportation strategies; and
  • The fact that the locations of state and local governments frequently do not correspond to the locations of industry sectors and labor markets.

In addition, Mr. Nowak said that urban development and revitalization agendas must be long-term, but many cities have lost the capacity to engage in this type of planning. TRN is pro-growth, he said. Individuals engaged in social service work tend to be in favor of redistribution, but since growth is a necessary condition for this redistribution, cities must be competitive.

Mr. Nowak remarked that low-income residents must be involved in regional growth strategies. He cited several methods of facilitating this involvement through investment in the following areas:

  • Affordable housing, both in cities and in job-rich suburban areas;
  • Promotion of mixed income and mixed population neighborhoods;
  • Availability of inner-city childcare resources;
  • “Smart growth” and sensible land use policies; and
  • Workforce development.

Regarding the last item, Mr. Nowak said that investments can be coupled with workforce services as a method of discovering and closing the gaps in the workforce development system.


Mr. Nowak stressed the importance of institutions that can serve as intermediaries to stimulate reinvestment and facilitate partnerships between local governments and the private sector. Effective intermediaries, he said, possess some combination of the following characteristics: regional scope; availability of funding; useful products, such as information or marketing capability; the capacity to speak for the region.

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