Planning for prosperity

“Would anyone here object to making more money?” That’s a question David Kolzow often poses when he’s making presentations on economic development. On this occasion, Kolzow used it to break the ice at an April 29 Council of Independent Business Owners luncheon. It worked, eliciting laughter from the assembled group members, who advocate for what they see as business-friendly policies..

A month-and-a-half later, Kolzow approached his basic premise — and a new audience — in a different way: “[Economic development] is not about just more jobs, but good jobs — jobs that raise the standard of living,” he declared at the city’s June 11 economic-development workshop, attended by a cross-section of community leaders. Economic development, Kolzow explained, is about creating “more wealth in the community.”

An economic specialist with the Greenville, S.C., firm Lockwood Greene Consulting, Kolzow was hired by the city of Asheville last winter to draft a strategic plan for sustainable economic development. Both of these sessions were part of an ongoing, big-picture effort that also includes a new committee, the Sustainable Economic Development Task Force, which started meeting regularly this past July and will report to Council later this year.

The first step in the months-long process was going out into the community, grabbing the attention of those who have a stake in the results, educating them on trends and definitions, and then soliciting their thoughts on how to spur economic development in the city.

From the start, Kolzow has mixed an easygoing style with hard truths and simple facts — such as the reality of the global economy, right here in Asheville. He’s also drummed home these key points: “What are your priorities? What are the actions that address the problems? … The successful community is the one that has a strong, united leadership that pulls all the people together and says, ‘This is where we want to go.'”

Diversity is good

One of the first angles Kolzow laid out at the CIBO luncheon on April 29 was the inescapable reality of a global economy and the need for diversity in addressing economic-development issues. “The future is not in the past,” he proclaimed.

Asheville leaders need to recognize major national and global trends: 90 percent of the new jobs created between now and the year 2006 will be in the service sector, Kolzow reported. And, although “we shouldn’t turn our backs on manufacturing and warehousing industries,” there’s been a major shift toward industries based on information technology, he pointed out. “Are these low-paying [jobs]? No way,” declared Kolzow. More than 200,000 jobs in high-paying, computer-related fields remain unfilled nationwide, because employers can’t find trained candidates fast enough, he mentioned.

In the new millennium, asserted Kolzow, “The work force is constantly going to be challenged to upgrade its skills.” In the Greenville area, the economic focus has shifted from textiles to automobiles, as evidenced by the recent arrival of BMW, he noted. And Asheville can’t afford to ignore such trends. With up to two-thirds of the new jobs created in the future expected to come from small businesses, even the corner drugstore can’t escape these global trends.

“That scares me,” admitted CIBO member Ann Price during the question-and-answer session. “You’re saying we’ve got to look at the global issues. Since when?” she asked.

“I take it you didn’t vote for Bill [Clinton],” joked Kolzow. Then he continued, in a more serious vein: “You can’t escape global issues. There are no isolated communities anymore.” Local job creation, or loss, affects — and is affected by — such global trends as manufacturing jobs leaving the U.S. for lower-cost Third World labor markets (the closing of Asheville’s Gerber plant a few years ago is a case in point, Kolzow reminded CIBO members). “You better start paying a lot of attention to it [the global economy],” he warned, adding, “That’s [also] where the opportunities for economic development lie.”

The city of Tucson, Ariz., is like Asheville, Kolzow explained: Its economic vitality relies a good bit on tourism; it has a small university and a thriving professional community. But in researching a new economic plan, city leaders discovered that they also had more than 200 small computer-software firms in town — a strong but relatively unrecognized segment of the economy that was, nonetheless, marketing its products locally, regionally, nationally and globally. “And [city leaders] didn’t even know it,” said Kolzow.

After digesting these thoughts, several CIBO members brought up what they see as an age-old obstacle to Asheville’s local economic development: city permitting and zoning regulations, and the way the whole process gets politicized by neighborhood advocates and other special-interest groups. One CIBO member cited the Efland case: Despite having apparently satisfied all city regulations, Jim Efland‘s attempt to build an apartment complex near UNCA was voted down by City Council members, at the urging of neighborhood residents adamantly opposed to the project for safety and traffic-related reasons (the case is pending resolution in the North Carolina Supreme Court, after an appeals court overturned Council’s decision).

“It’s the NIMBY mindset — not in my backyard,” Kolzow replied. The issue, he observed, is how to create dialogue between the two groups — neighborhoods and developers.

But CIBO member Albert Sneed charged that, far from cooperating with developers, city staff “have been a major impediment. … They don’t understand a market economy.”

“I’m glad to hear strong opinions,” Kolzow replied. But he went on to ask whether there’s been improvement in these processes — and in the attitude of city staffers — over the last year or so.

CIBO President Mac Swicegood conceded that City Manager Jim Westbrook has pushed staff to be more customer-oriented, and that attitudes are changing. Swicegood also said that Asheville Building Safety Director Terry Summey has made improvements that streamline the permitting process, to some extent.

Kolzow noted that it’s hard for any bureaucracy to make an attitude shift, and that the frustration voiced by CIBO members is not unique to Asheville. “The only time I’ve ever seen attitudes change is when there’s a long, loud cry from the public,” he remarked. But that, in turn, brought him back to one of his key themes: “The old ways don’t necessarily work anymore.”

And when one CIBO member complained that the diversity of lifestyles becoming more and more apparent in Asheville interferes with a healthy business atmosphere (particularly downtown), Kolzow remarked, very frankly, “You’ve got to learn to live together. Diverse communities thrive, [and] where there’s activity, there’s diversity. … It doesn’t have to be negative.”

Come together

From diversity comes … togetherness? At the June 11 workshop, Kolzow preached that creating an economic-development strategy isn’t about “an outside consultant coming in and saying, ‘This is what you do.’ It’s all of us working together.”

Speaking to a diverse group that included realtors, City Council members, affordable-housing advocates, neighborhood representatives, architects, developers, attorneys, bankers, publishers and more, Kolzow emphasized that the workshop wasn’t about debating old (or new) issues, but about prioritizing them and crafting specific strategies for addressing them.

And the responsibilty for implementing those actions lies squarely in the hands of city leaders, residents and the business community, he proclaimed. Kolzow urged participants to think “outside the box”: Even if Asheville has a shortage of large industrial sites, recruiting a new major employer to a neighboring county ultimately benefits Asheville as well, argued Kolzow.

He also pushed participants to reconsider old perceptions. “People say they’re against growth, then transfer that to development and say they’re against development,” Kolzow began. To get everyone on the same page, he offered these definitions: Growth, he explained, is like a weed; it’s unplanned change that comes in reaction to outside pressures and often doesn’t take into account the problems it may cause. Development, on the other hand, is like a garden: planned, progressive improvement that’s proactive — and provides well-paying jobs.

“Growth, by itself, is neither good nor bad. But it can have negative impacts on the community, such as traffic problems, crowded schools, low-paying jobs and housing shortages,” Kolzow remarked. Close to home, he observed, signs of such uncontrolled growth are evident in both Atlanta and Greenville. With “good” development, on the other hand, business and industry invest more in the community than they cost it (in terms of things like infrastructure needs and environmental impacts). All residents’ standard of living is improving, household incomes are increasing, and the local tax base is growing faster than the cost of providing government services, Kolzow set forth.

That’s the vision, anyway, though no community seems to have actually achieved it. And no community can address all the issues and needs at once: For one thing, noted Kolzow, the city’s limited resources require a targeted, strategic approach; being strategic and comprehensive at the same time, he said, is nearly impossible.

And creating sustainable economic development isn’t just about knocking on doors and recruiting new industries, Kolzow argued: It’s about developing a skilled work force, investing in the city’s physical infrastructure, creating new jobs that pay better than average, improving the overall business environment, providing land and buildings for business development, maintaining the environment, and improving the quality of life. “The biggest thing is creating the product [to attract business] and creating the environment for a thriving economy,” he said, urging city leaders to focus on those two key aspects of economic growth.

Where does Asheville stand at the moment? Kolzow responded with a litany of points derived from U.S. Census data, local surveys done by Lockwood, and other economic statistics. Wages in the city are lower than state and national averages. Compared to other Southeastern cities, Asheville ranks near the bottom in “housing opportunities” for all income groups (but particularly for low- and moderate-income residents at or below the average wage in the city), and the cost of living is higher than in other U.S. cities of similar size. There’s a shortage of land and buildings suitable for industrial development, as well as for smaller businesses. Employers report difficulty in finding, hiring and keeping trained workers. Residents report a lack of good jobs. Developers indicate frustration with what they see as inconsistent permitting and zoning regulations.

“All of this stuff we’ve heard before,” declared Council member Barbara Field, after listening to Kolzow awhile. “What have we left out?” she asked, calling for Kolzow’s “expert” advice.

He replied, tongue in cheek, “I always like it when I’m called an expert. … [But] if [the plan] fails, it’s all my fault, right?” Humor aside, however, Kolzow did give participants some points to consider, beginning with, “Do things differently than how they’ve been done before.”

For starters, clarify the issues and objectives, he urged. And city leaders need to consider the interrelatedness of key issues: “You’ve got to be building your work force at the same time you’re developing your [business] sites,” Kolzow observed. Having one without the other spells failure. And if you’ve got the work force, you’ve got to have housing — in a variety of price ranges– if you want to keep them.

Just do it

Once Kolzow had everyone’s attention, though, he put the ball in their court. The next step, he said, is creating a task force of community leaders to identify the underlying reasons for the key development issues identified in the workshop. This problem-solving approach, joked Kolzow, can even improve the personal lives of workshop participants: “I find that, being a problem-solver, my wife and I get along a lot better.”

Can the diverging viewpoints prevalent in Asheville work together and move forward?

“It’s a positive step that the city is doing this,” Albert Sneed — a local attorney who also attended the workshop — conceded later. “I’ve been working with other people for 12 or 13 years to get the city to stop being a stumbling block in economic development.” But though he agrees with much of Kolzow’s economic-development message, Sneed says he’s still frustrated by the power of what he calls “special-interest groups” — and by the general inertia created when projects like the Efland apartment complex are defeated.

Every time a developer has that much trouble getting a project off the ground, he’ll complain to business associates — and, pretty soon, Asheville has a reputation as a bad place for business, argues Sneed. Changing that perception and overcoming the inertia, he observes, is “going to be like turning a super-tanker truck around.”

Sneed says he’d like to see “an educational process” come out of Kolzow’s work — an active discussion involving the business community, city staff and City Council members. “[Staff and Council] have got to understand that this frustration exists. … They’ve got to broaden their outlook, and understand why these problems are there and how to correct them.”

Without economic development, Sneed suggests, Asheville could become like his hometown of Pinehurst, N.C. — where he says the middle class has been nearly squeezed out by an influx of wealthy residents, tight controls on growth, and the resulting rise in the cost of living.

But Asheville residents, like Americans in general, have little faith in developers, said Mountain Housing Opportunities Director Scott Dedman, when he and Sneed took part in a small-group discussion about permitting and zoning issues. “The bad guy in a movie is as likely to be a developer as an attorney,” Dedman observed. And MHO and other nonprofit housing organizations, he argued, have at times been just as stifled by the politics of the city’s permitting-and-zoning process as have private developers. He urged the city to work on educating the public about what “good” development is, and on finding common ground. “Let’s define what we do want,” Dedman said.

“Take the politics out of it, [and ask], ‘What could the pretty Asheville look like?'” suggested local businessman Benson Slosman. Speaking of frustrations with city staff, he remarked, “This is a criticism of the system, not the people.” All the same, City Council members “have got to be not manipulated by power groups,” Slosman remarked. To encourage economic development, the permitting process, in particular, has to be streamlined.

But architect Jim Samsel argued that taking a free-market approach, as Sneed suggests, isn’t the answer. “Tunnel Road is free-market — that’s not what we want,” he remarked. On the other hand, he, too, voiced a frustration with zoning nearly equal to Sneed’s: “Our zoning regulations don’t allow for mixed-use development. With our current zoning, we’re encouraging more Tunnel Roads [and] urban sprawl,” reflected Samsel.

Mixed-use development has worked well for downtown Asheville, says Downtown Association Chair Carol King: Property-tax values there have risen 40 percent in the last four years alone, and downtown is bursting with new shops, apartments, condominiums, restaurants and cultural attractions. But King also says she’s glad city leaders are broadening their economic outlook to include West, North, South, East and Central Asheville, plus the River District — each with its unique needs and assets — in the bigger picture.

Considering the city as a whole — and involving a diverse range of “stakeholders” — is crucial to the success of the city’s economic-development plan, King believes. “We have a greater likelihood of success if the city, citizens and business leaders all participate,” she remarks.

But will this initiative fare better than other city-initiated plans? Taking a deep breath, King responds, “Implementation is the key.”

In other words, she shares Kolzow’s conclusion that it’s up to us to act on the plan, once it’s been adopted by Council. “He emphasized the need for unified leadership,” King observes.

But can Council find a balance between neighborhood advocates and developers?

“You’ve got the $64,000 question there,” King replies, harking back to Kolzow’s remarks about the interrelatedness of key issues in the city: In the Efland case, King observes, “As long as we frustrate [the creation] of affordable housing, we’re frustrating economic development.” Without indicating whether she thinks Council was right to deny the project (and then fight its overturn by the state Court of Appeals), she says, “City Council finds themself very challenged.”

“It’s not necessarily a new lesson,” maintains Asheville Vice Mayor Ed Hay about the issues raised at the workshop. “The primary point is that developers and city staff need to work more closely together,” he asserts. “And the city needs to do a better job — and this goes for City Council — of communicating what the process is … and sticking to it.”

As for the city’s permitting process, Hay notes: “One big factor that keeps getting overlooked is the city’s responsibility for enforcing state/federal building codes. How do we [do that] and work together toward a common goal for economic development?”

Hay doesn’t have the answer yet. But the city’s new economic-development director, Mac Williams, sees Kolzow’s tightly targeted approach as a step in the right direction. “Dr. Kolzow said it’s hard to be comprehensive and strategic at the same time. … The process we’re engaged in is getting to the heart of the matter and [determining] what we can do,” he reflects, adding, “The issues aren’t new: The challenge is to take what’s been done, whittle down our list of priorities, and take action.”

In the next few months, the task force will address these key issues, identified by workshop participants, he explains:

• Permitting, zoning and inspection processes: “There has to be a balance between quality-of-life protections [and] regulatory issues that deter business,” Williams remarks.

• New-business recruitment, whether it’s traditional manufacturing or newer, high-tech firms. “With a limited amount of [available] land and facilities, this could mean redeveloping existing sites,” he observes.

• Riverfront development, along both the French Broad and Swannanoa rivers.

• Educating our workforce, particularly for technology-based businesses.