Public Engagement in the Economic Development Process

Public participation in economic development processes can help governments to develop an understanding of development policies and their potential impacts at the local level.  Thoughtful public engagement will help identify unique conditions applicable to a state or local government and the role potential strategies will play in shaping the short and long-term priorities.  Credibility and trust in government are crucial, at times this can come into direct conflict with economic development given the inherent private nature of the process.

Economic development initiatives can be funded through many types of tax incentives including general fund, tax increment financing, state assistance, federal assistance, hotel taxes, sales taxes, special assessment taxes and other funding sources.  Utilizing these sources of revenue requires more transparency and justification due to government stewardship of tax dollars. 

It is often difficult to conduct meaningful economic development engagement on specific deals due to the privacy of negotiations.  Because of the need for confidentiality, this can be perceived as public officials presenting economic development solutions that have already been negotiated with no forethought to public input.  To counter this issue, specific development projects should fit into an overall economic development strategy developed with stakeholder input. 

Economic development is best served by a community approach that engages many different levels of officials including state, local, regional, non-profit, universities, and neighborhood advocates.  It is also important to note that a Diversity, Equity and Inclusion (DEI) framework should always be considered in designing the strategy for public participation. This should result in mutually beneficial policy outcomes for citizens and developers.

Engaging the Public in Economic Development

There is a dual role in engaging stakeholders for economic development purposes to create public value.  First, a local economic development strategic plan should be developed to guide the approach for economic development in the community.  Such a plan allows for broad public input into the economic development of the community.  The plan helps guide viable businesses expansion, and outlines tools to assist in financing public private partnerships and other financing and development structures.

Second, public education of individual development agreements is needed and will assist to determine how a project fits into the context of an overall strategic based community plan.  Individual development agreements can be a cause for celebration or disagreement depending on community reaction.  It is imperative to engage the public early and within the framework of the partnership with the developer.  In addition to public entities leading input sessions, it is also crucial for private developers to engage surrounding impacted areas. 

Local Economic Development Strategic Plans

Setting up a broad-based development philosophy for the community is crucial to laying a framework for economic development strategies.  Developing and/or updating a strategic plan allows links for public engagement, economic development strategies and comprehensive long-term documents for land use planning.  GFOA has a best practice for the Establishment of Strategic Plans. This strategic plan should set the context for potential development agreements that fit into the community values set through public engagement. 

Engaging the Public in Development Agreements

Articulating the purpose for conducting a public participation process is critical because the purpose becomes the foundation for deciding who to involve, how they are selected, what activities they will be involved in, what information will be collected, and how the government will use the information. Consequently, determining the outcome should be the first step in designing a participation effort. Governments should not initiate public participation processes without first establishing a tangible purpose or objectives.  Strategies to engage the public in development agreements may involve but not be limited to the following:

• Consistency with Local Economic Development Strategic Plan: Respect and deference should be given to the feedback and community values established within the plan.  These values identified in the plan, along with land use planning, will help to provide valuable insight into the development possibilities in the community.  Ensuring individual development agreements remain consistent with the strategies outlined will help local officials in meaningful engagement.    
• Development Agreement Advisory Committee: Municipalities could engage an advisory committee that assists in the review of development agreements that include governing body members, planning organization members and members of the public.  An advisory committee would assist with attaining public input on potential development projects and allow for ongoing review and input to economic development projects. 
  
• Community Benefit Agreements: Community Benefit Agreements will work to engage the public early in the development agreement process and assist with protecting their needs due to potential development.  These are often the result from negotiation between a developer proposing a land use and a coalition of interested community groups that represent those impacted by the proposed development.  These arrangements can be included in the overall development agreement and compensate public interest groups/individuals for potential impact of the development on the community. 
• Commitment to Diversity, Equity and Inclusion (DEI) Principles: Although different governments use a variety of language, many have implemented mission statements or strategies that target improvements to equity and inclusion. Any commitment to DEI principles already made should be used as a framework to ensure that diverse communities are included and represented in the public process. Governments should consider historically underrepresented communities and how to specifically encourage their involvement. If no official commitment has been made, then public participation is a good starting point to creating one.
• Annual Review for Conformance: GFOA has a best practice in monitoring economic development performance that calls for governmental jurisdictions to monitor  performance and fiscal impacts of projects.  The public can be engaged annually in the monitoring process to review development progress and determine whether criteria are satisfied. 
• Public Meetings: Involving the public ensures the municipality is working with stakeholders and the public to ensure concerns are addressed.  This will ensure that the public has more influence on the decision-making and public feedback is taken and incorporated into the final outcomes.  Involvement of the public should take place before solutions are presented to the governing body at an official public hearing.  They can include the following formats:

• Workshops: Working sessions with stakeholders to review development agreements which in turn can add buy-in and credibility to the process.
• Roundtables: Small group discussions that should have a clear focus, comprehensive agenda, strong moderator and be tailored toward specific agreements.
• Charettes: Planners involve stakeholders early in the process in a set of intensive design meetings.  These sessions would help agreements identify problems, debate solutions and develop a reputable plan.

Ongoing and regular public engagement will assist with building trust in state and local governments through cooperative working relationships that help to reach balanced decisions and build understanding and support for the government's initiatives.