A Three-Ring Circus Is Not Economic Development

Here is a story to learn how NOT to approach economic development. Any community can make mistakes and that is understandable, but this story about an Austin, Texas suburb points up several important lessons about approaching economic development on a community level.

Cedar Park, Texas is reconfiguring its once high-flying economic development efforts with some moves that have the Austin area business community a bit antsy. The small suburb to the north of Austin only months ago was advertising nationally that it would provide $5 million in incentives for the right business to come to town.

Now, it has removed the economic development foundation's top staff member, halted a search for an executive director and altered the board of directors so that it includes only city employees.

Several Cedar Park business leaders -- who decline to go on the record -- questioned the changes during a private meeting earlier this month, calling the foundation's economic development efforts "disorganized" and vehemently questioning having only government officials on the board of directors. State and regional economic development officials have questioned the appropriateness of these moves.

Initially, Cedar Park set out to attract high tech or biotechnology companies with 100-plus employees. After the dot-com bust, that initiative seemed fruitless, so the city decided to go after large retailers, a tactic that was pursued heavily by Kirk Clennan, the economic development board's former executive director. In May, Clennan, the city's first and only economic development executive director since the board was formed in 1999, was asked to step down.

In March, during Clennan's tenure, the city nationally advertised a $5 million incentive to lure businesses to Cedar Park. However, the campaign failed to attract the big business the city had hoped for. "I've heard that some people thought the $5 million campaign was a gimmick," Cedar Park Mayor Duprey says. "It was worth trying, though. I thought it was a great campaign, and I really thought we'd get a lot of attention."

What are the lessons here?

1. Community economic development efforts should be grounded in professionalism.

2. These efforts should be guided by a balanced public and private sector leadership team.

3. Flash-in-pan efforts and gimmicks don't work. In fact, they very often come back to haunt you.

4. A thoughtful plan should guide community ED efforts. In this case, the plan should be used to coordinate activities with regional ED groups and it should be used to gain business investor confidence.

5. The business and economic world needs stability and consistency. Sudden moves and changes signal risk and uncertainity. Businesses try to reduce their exposure to risk and places they are sources of unnecessary risk.

Enough said. Go here to read more.