Connecticut residents have perhaps become accustomed to the daily reminders of the budget crisis that confronts our state and, in turn, its municipalities. Most municipalities in this state, to their credit, have undertaken substantial efforts to reduce expenses or contain their growth. At the same time, almost every municipality has redoubled its efforts to increase revenue. Nowhere has this been more evident than in the area of economic development, where incentive-driven efforts to attract businesses have taken on ever-greater importance. However, many municipalities have realized by now that tax incentives, alone, are almost always insufficient to draw and retain business in their communities.
Economic development has become an interdisciplinary art. A number of factors influence business location and development, not the least of which are public infrastructure, geography, regulatory environment, demographics, and (of course) taxes. Economic development professionals, and the municipal agencies and commissions with whom they work, understand that they can control or at least influence only a small subset of these factors. Their work often focuses on either mitigating adverse factors with incentives, or providing services and assistance to businesses in order to make it easier for prospects to say “yes” to their town. Success at attracting new business to town often depends on the cooperation of many municipal departments and officials, working together with their economic development team, to realize the objective.
Businesses anticipate paying taxes. Many, however, are relatively unaware of how seriously their business can be affected by local land use regulation. Ironically, a good proportion of municipal officials are equally unaware of how their land use regulations may be affecting their economic development efforts. Land use regulation is just one of many facets affecting a town’s economy. Some municipalities understand this, and have made their planning and land use strategy an integral part of their economic development efforts. Of those municipalities, the very best have realized profound growth opportunities that have permanently changed the tenor and trajectory of economic development in their communities.
The City of Waterbury is perhaps an archetype of the post-industrial urban economies that dot the northeastern United States. The loss of brass mills and other heavy industry has necessitated the repurposing of millions of square feet of real estate in that city over the last several decades. In 2011, Waterbury adopted new zoning regulations that established a more predictable and flexible framework for land use applications throughout the city. One of the features was an administrative zoning review process for permitted commercial uses, which generally obviated the need for commission-level site plan review. This change alone has drastically reduced timeframes required for obtaining entitlements. There has been a perceptible shift over these years in the attitude of the city government toward economic development, much of which could be attributed to a top-down focus on interdepartmental communication, cooperation and accountability in effectuating business development.
These changes have contributed to new retail development and job creation throughout the city, but perhaps most notably in its Commercial Arterial (CA) zoning district on the east side. Among other businesses, St. Mary’s Hospital, Restaurant Depot, Carmax, and Frank Pepe Pizzeria Napoletana, have opened or are in the process of opening new locations in this area. Proximate to existing development including Kohl’s, Costco Wholesale, BJ’s Wholesale Club, and a number of fast-food and casual dining restaurants, this area has excellent highway access to I-84, good traffic counts and desirable demographics. Each company has benefitted from a streamlined land use approval process that makes doing business easier, and the city has realized substantial additions to its grand list. Simultaneous with the development of these projects, a number of new shopping centers and office complexes have been developed in this area. The synergies created by this retail development are both considerable and predictable.
The Town of Southington also has seen remarkable new retail development along Queen Street (Route 10) and West Street (Route 229). The town has benefited from a political culture that is pro-business and focused on economic growth. Southington holds regular meetings for an “Economic Development Strike Committee” which include elected officials and designated representatives from many town departments, agencies and commissions. Moreover, prospective new businesses have the opportunity to meet simultaneously with representatives from the town to get assurances regarding their anticipated zoning process and potential timeframes for entitlements. According to Planning Department officials, their objective is to facilitate the review and approval of new site plan applications by the Planning and Zoning Commission within two weeks of receipt from an applicant. The net from this approach, at a minimum, is a transparent process that business owners often appreciate for its simplicity and candor; at its best, it fosters a cooperative focus to achieve economic growth for the town, making business and government partners in success. The scale of residential and commercial development that has continued in Southington through the downturn to present is a remarkable achievement that speaks to the benefits of this process and the philosophy underpinning it.
When Amazon sought to open its first fulfillment center in Connecticut, it spent a lot of time looking around and considering its options. The site Amazon ultimately selected in Windsor is near I-91 and only a few miles from Bradley International Airport, which are obvious benefits to a business developing a regional logistics center. However, when the time arrived to discuss entitlements, Windsor was able to do so seamlessly and effectively through its weekly forum with prospective businesses and developers. This forum includes officials from the Town Manager’s office, as well as from Economic Development, Engineering, Building, Health, Planning and many others, who discuss prospective development with interested parties in a collaborative effort to provide guidance on the anticipated development process. Windsor representatives went so far as to visit existing an Amazon facility in Virginia to better understand needs and prospective operations the Windsor site. Amazon ultimately selected Windsor as the home of its 1.5 million-square-foot, $105 million facility. Such an immense development project would be viewed as controversial by many municipalities; however, Windsor’s collaborative approach toward economic development made it possible to provide strong assurances regarding the anticipated entitlement process with negotiated economic incentives to finalize the deal.
Many municipalities in Connecticut have made similar efforts to approach economic development in a more comprehensive and interdisciplinary manner. Yet some have been more effective than others in achieving business development. Land use regulations are just one factor in the decision-making confronting companies when planning their future; however, they are a factor over which the municipality ultimately has complete control and discretion. More to the point, they can be the sole reason for a company choosing a different municipality- particularly where land use regulations are poorly thought-out, or onerous in their restrictions, or simply create drawn-out approval processes subject to undue political or public interference.
In an economic climate where every municipality understands it now must effectively fend for itself, political and community leadership must strive to realize every opportunity to encourage business development and enhance their municipality’s grand list. “Not-in-my-backyard” attitudes are still prevalent throughout Connecticut, but effective planning, thoughtful land use regulation, and streamlined review processes can all go a long way toward making growth compatible with existing uses and residents. What we often see is that it is the political and community leadership of a municipality that most effectively promotes a “pro-business” attitude through government from the top-down, and the municipalities where this has happened continue to see relatively superior growth despite the economic headwinds affecting this state. In these times, every resident of Connecticut deserves leadership focused on these objectives to ensure the fiscal health of their community.
Michael A. Ceccorulli is an attorney in Pullman & Comley’s real estate, land use and commercial finance practice groups and can be reached at firstname.lastname@example.org.