Those Crazy Economic Development Guys!

Dear Management Doctor:

Your recent Hot Info of the Month addresses the relationships of current planning and building permitting with long range planning, but what are your thoughts about the relationship/organizational structure of economic development and planning?  Done correctly, economic development should be a primary tool for implementing the comprehensive plan equal to or even more important than zoning. On the other hand, I know some people believe economic development can be “too friendly” with developers and businesses, perhaps at the expense of the regulations that the current planners and building inspectors are trying to enforce. Further, economic development projects often involve very high level negotiations over high stakes, requiring the individual to have direct contact with the city manager/mayor and city council not unlike a department head. However, with these responsibilities it can be difficult to also try to manage a highly diverse department and do both of them well. What are your thoughts about these relationships/structures and what have you seen that works well?
Economic Development Stepchild

Dear Stepchild,

I wrote two previous articles on this topic (see below). You make a very important point when you said:

“Done correctly, economic development should be a primary tool for implementing the comprehensive plan equal to or even more important than zoning.”

In Washington D.C. planning reports to the Mayor through the Deputy in charge of economic development. When I did my study of D.C. many or the pro planning people suggested the planner needed to report directly to the Mayor or under a separate Deputy. However, the Planning Director told me she was exactly where she wanted to be and that was directly involved with the economic development discussions through her involvement with the appropriate Deputy.

When did planners start thinking that economic development was someone else’s issue? If there was ever a time we needed more economic planning, it is now. Come on planners, “man up” or “woman up” or whatever phrase you like.

The Management Doctor

Reader Response

Dear Management Doctor,

I would add that planning and economic development must work very close together, especially in towns that are “shrinking.” Whatever organization is chosen, it should integrate planning and economic development. And not isolate one from the other. 

Planners have much to contribute to the revitalization of communities by integrating our traditional tools of skills that address land use and public facilities and

circulation and preparing realistic market, population and income projections. 

Charlie Bien AICP

I started off as the Community Development Director - Planning (staff of one), Building (staff of 3) and Neighborhood Improvement (staff of one).  In December, due to staff size reduction, I became the Public Works Director (staff of 24), now combined Development Services Department.  In April, due to staff vacancy, I took over the responsibilities of the Economic Development Director, including Redevelopment (no staff). 

Essentially the way I see things is that the developing of timely over-arching goals is key.  Some things are black and white, like the building codes, other things are a shade of gray.  The normal running of the business cycle means that during down turns, job creation and business retention are goals that tend to become clearer go to front burner, other goals may slide down the priority list but they will get attention as soon as practical.

For a town of 22,000 I am in constant motion and communicating to staff is my biggest challenge.  Any advice?  

J.D. Hightower

Previous Articles

Economic Development

Dear Management Doctor:
Do you know of any model structures for organizing and integrating a municipal's planning and economic development departments? More specifically, do you have any ideas on what has been the best organizational structure for progressive cities? I was hoping you might point me in the right direction for my current research as it relates to creating a restructuring and integration plan for the City of Binghamton, NY's Planning, Housing & Community Development and Economic Development Departments.

J. Justin Woods
Binghamton, NY

Dear J. Justin,
The answer depends on the size of the city and the size of both the planning and economic development functions. It also depends on how aggressive the city is on economic development and if there is any split on planning or economic development policy.

For small cities, I recommend that planning and economic development simply be combined. As either function gets larger, then it may be appropriate to have two separate departments. However, these two departments must work closely together.

The key questions may relate less to how the functions are organized but how well they work together. For example:

  • There should be an economic development element in the comprehensive or general plan. The element should be a joint product of the economic development and planning staffs.
  • Planning needs to recognize that when the city makes a commitment to economic development projects, then the projects require special attention. This does not mean that planning gives up on due process, but it does mean that planning makes certain they are involved in the front end of projects before the city makes too many commitments. Planning should also make certain that these projects are well coordinated across all functions in the city and timelines meet the needs of the customer.

This is a controversial topic amongst many planners and I assume some of our readers will chime in with their opinions.

Merger Opportunity

Dear Management Doctor:
I run a medium size Planning and Zoning Department (15 people) that has some project management responsibilities. I have been given the opportunity to merge my department with our Economic Development office. I would like to do this. Do you have examples of organization diagrams of merged operations? We have a separate Housing Department, so Housing would not be part of the new organization. Our City is 130,000 pop.


Dear Merger Opportunity:
Merging economic development with planning is an interesting concept and we're seeing it more and more in our organizational studies. I generally favor the merger but with a few cautions. There may be instances where the economic development function is encouraging a new or expanded business or industry that will need to go through an entitlement process. At that point in time, other factors may surface such as environmental issues, neighbors, and even due process.

As such, I recommend that economic development be in a separate division from staff handling the entitlements. On the other hand, there should be good communication and coordination between the two functions, each helping the other. Another issue we also see relating economic development and redevelopment. In this case, I see no problem in merging the functions and often encourage the merger. If you'd like to call me on 1-800-870-6306, I'd be happy to give you a few cities to call that have merged functions. Also, I hope our other readers of the Management Doctor will respond.

Good merging!

The Management Doctor

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