Development Authority Design and Practice for the 21st Century
The project team is grateful for the insights of dozens of local and national experts who were interviewed, as well as those who participated in the day-long convening. (See Appendix B for interviewees and Appendix C for convening participants.)
Further thanks go to Ancel Glink Diamond Bush DiCianni & Krafthefer and the Civic Consulting Alliance for providing pro bono legal services.
Finally, the project team thanks to the John D. and Catherine T. MacArthur Foundation for their key role in conceiving the project, and of course for its generous support. Thanks also to the Institute for International Education for the administration of the grant.
As major transitions in the global economy create new challenges and opportunities, new strategies for driving economic growth are emerging that are often broader in scope, larger-scale, more comprehensive and cross-sectoral. This emerging practice, in turn, calls for new institutional infrastructure and financial tools to support its effective management and implementation. This paper1 begins to explore the implications of these realities for the design and practice of development authorities2 to support the next generation of transformative and sustainable economic development.
Economic development in today’s economy is shifting toward comprehensive, integrated, asset- and market-based strategies tailored to place. This work is occurring in an economy that thrives on flexible networks and interactions among firms, investors, the civic sector and government, and which requires balancing a need for deliberate growth planning with products and services that enable organic market activity. This paper explores the implications of these trends for institutional form, examining topics such as:
- The distinct roles development authorities can play in driving growth, and how to determine which roles make the most strategic sense with respect to particular development activities, geographies, etc.;
- The capacities and powers necessary to effectively deploy leading development products and services;
- Creative financing tools to support varied strategies, including particularly techniques for capturing value created through development activities; and
- Legal, structural and operational approaches to managing the tension between obtaining and exercising governmental powers that are critical to enabling growth, and the need to be nimble, entrepreneurial, and market-responsive.
Exploration of these broader questions was grounded in a case study of sorts: a potential development authority for Cook County’s South Suburbs.3 As described below, this potential entity would lead a long-term, large-scale growth effort across a wide array of development activities (e.g., industrial park and innovation center development; sector-based, industry-driven workforce training programs; housing finance products; enhancement of recreational and green space amenities; etc.). This paper explores leading practices and design principles for development authorities in general and uses the South Suburbs scenario as a concrete example for exploring how these principles translate in practice.
This paper begins with a brief background section that describes the high-level economic context that underlies the need for new institutional capacities and resources to manage large-scale, next-economy economic development projects, and provides a synopsis of the South Suburban case study. The remainder of the document uses a business planning framework (i.e., Mission and Vision, Strategies, Products and Services, Operations, etc.) to organize the various dimensions of development authority design. Each section includes a summary of the dimension’s primary design elements, examples from the field, South Suburban context, the core design questions that were offered as a starting point for discussion at the one-day convening of national experts, and a set of observations – including implications for a South Suburban development authority – synthesized from interviews, background research and the convening discussion.