"The State of Michigan is beginning to experience modest economic growth," says the State Treasurer while reporting that sales and income tax revenues are now heading in a positive direction (see details here). Economist now think, and politicians now hope, that the worst is behind us. If the economy is soon to recover, the question for Owosso is "Are we ready?" A small municipality like ours cannot change the overall direction of the economy, which is largely driven by national polices and international forces. However, when the economic flow increases as the depression melts away, will Owosso be in a position to channel some of the run-off for positive growth here?The City of Owosso has long been committed to economic development with a number of talented city staff helping out private companies that want to grow. As well, the City has supported the Shiawassee Economic Development Partnership and remains one of its largest financial supporters. SEDP, made up of both local governments and private businesses, plays a key role in helping both existing and prospective businesses grow in our community by working with developers, investors, and other government agencies like the Michigan Economic Development Corporation (MEDC).
Building on this history, there are three new steps underway that will help Owosso be in a position to take advantage of the economic recovery:
1. A new tax abatement policy
2. New infrastructure
3. Main Street program.
And there is one more step that the City needs to take to be fully ready: a new master plan.
1. Tax Abatement Policy. The City Council is scheduled on June 7 to adopt a new policy to encourage economic development in Owosso. Local government has few tools to incentivize job growth, but state law authorizes cities to grant a reduction or elimination of property taxes in several unique types of cases, such as industrial development, re-use of contaminated infill "brownfield" sites, and some other redevelopments. These tax breaks can help reduce the cost of new facilities, subsidize new equipment investments, and help improve the financial viability of a new venture. On the other hand, tax abatements cost the City precious revenue.
The City of Owosso has crafted a policy that ensures that tax abatements are given to economic development ventures that represent major investments, create jobs, and provide higher wage jobs. The formula for tax breaks is a little complex, but in sum, the more jobs created at the the highest wages get a waiver on property taxes for more years. Companies with a long history here, and/or those that hire Owosso residents are also rewarded with longer abatements. The goal is to help encourage and assist economic development and job growth in Owosso, but do so in a careful way that ensures that decisions to forego tax revenues are made in an equitable manner that provides the greatest benefit for our community. As the economy recovers and the private sector begins to look at new investments, the new tax abatement policy will hopefully attract and encourage businesses to grow in Owosso.
2. New Infrastructure. We look to private businesses to create job growth, but government has a role to play in providing a well-equipped community to support new development. This means not only good tax policies and effective public services, but also sufficient and well-designed roads, water systems, and other public infrastructure. Owosso has been putting in place several platforms for new growth. Most visibly they include new sidewalks and streetscape improvements in our downtown. Local businesses have asked for, and are contributing downtown tax dollars to, these public upgrades. As the economy recovers, and entrepreuneurs look to start or expand a business, downtown Owosso should be an attractive location. Likewise the improvements to M-52, one of our major entryways into town, will make the entire City a more appealing community.
Often overlooked, our water and wastewater systems are an important infrastructure as well to support economic development. Several industries have located here because of the quality, supply, and low cost of our water delivery system. Recent water rate restructuring made by the City Council, which will be continued in the next budget, ensure that there will be adequate investment in the upkeep of this water system (see earlier posting; click here). The City in conjunction with our partners Corunna and Owosso and Caledonia Township, have begun to look at our wastewater treatment plant, which is now more than 30 years old. We will soon need to make upgrades here to maintain this necessary economic infrastructure in our community.
3. Owosso Main Street Program. When it comes to our downtown most of the attention seems to be given to new sidewalks, building upgrades, and other visible improvements like the new flower baskets. While these are important, there are other things going on that also help lay the groundwork for economic recovery of commercial business in our community. Owosso is participating in the Main Street Program, a comprehensive local effort supported by the Michigan State Housing Development Authority (MSHDA) and linked to national expertise on downtown revitalization. While public infrastructure and urban design are an important component of this effort, the Main Street Program also focuses on the economic structure of downtown to ensure complimentary and mutually beneficial growth of retailers. Technical assistance with marketing, customer service, and promoting the right mix of businesses are all part of this effort to encourage economic development downtown. All of this helps both existing businesses to grow and new enterprises to start.
Our community is at its best when people collaborate and work to support one another. The Owosso Main Street Program is a prime example of such an effort with businesses working together with community members and local government to promote business growth. The addition of the arts community with a reconstructed Shiawassee Performing Arts Center (the Lebowsky Center) further strengthens the partnerships. The creation of a downtown historic district (see earlier posting here) will aid the Owosso Community Players in their efforts, and create further economic incentives for downtown property owners to upgrade their buildings and invest in new growth.
A Master Plan. The primary power that local government can use to help, or hinder, private economic investment is its land use authority. The zoning decision to allow for a new development of a particular kind (e.g. retail, industrial, office) in certain places can encourage, deter, or just direct growth. Likewise, particular requirements on new development that protect the public health, safety, or welfare (e.g. driveway locations, fire safety concerns) may impose some costs on a construction project. It is important that the City of Owosso use these tools in an equitable, effective, and efficient way. The policy tool that guides these important land use decisions is the Master Plan. A Master Plan also provides specific guidance on where to make important infrastructure investments in roads, utilities, and other public facilities; these decisions can also have a significant impact on growth and economic development.
Sadly, Owosso has only a 1969 plan adopted for the mid-county area. An update is needed. The City set aside funds in its 2009-10 budget for a new master plan, but the city was unable to initiate this activity. Now, planning consultants are being interviewed, the City Manager is looking for a new Community Development Director to help with the process, and the City Council is committed to seeing a new plan put into place. Under State law, the responsibility for developing the plan rests with the City's Planning Commission. The adoption of a new Master Plan for the City of Owosso will give our community a policy foundation for encouraging economic development.
In the end, economic growth comes from individual decisions to invest, expand, and grow, but local government can both set the stage for the private sector as well as play a role as a partner. With strong and clear policies--and a plan--in place, the City will be best positioned to benefit from the economic recovery we all hope is underway.
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