By Kim Briesemeister

Most local government managers probably do not have time to monitor the real estate market; however, by implementing a few public initiatives that are real estate oriented, the results can have a direct impact on growing a community’s tax base.

The quickest way to increase the general fund and the tax base is by attracting private development. There is a reason why developers gravitate to some communities more than others, so make sure your city or county is ready for the next real estate boom.

Here are five ways to do just that:

1

Install upgraded utility systems. One of the costliest line items for any development is providing infrastructure or utility upgrades to increase capacity for new development. Even if the land cost is at a reasonable market rate, expensive utility costs can kill a project.

A local government can anticipate where development is likely to occur or even drive development to a certain area by installing upgraded utility systems for future development. Although the private sector usually pays these costs in a hot urban area, a second-tier area can attract development more quickly by covering these costs on the front end.

The tax base will increase sooner, which over time pays for itself. A locality could also impose an assessment that the developers pay back over time, lessening their up-front cost burden.

2

Change your current zoning. If the zoning is not conducive to attracting development, the city or county can be proactive and have the planning department amend and update the codes. Again, this approach reduces the timeline for development by eliminating the need to rezone parcels.

During the zoning rewrite, it is also a good idea to anticipate what uses are in the current land development regulations that may be incompatible with future or desired development and remove those uses. One city, for example, allowed massage parlors, convenience stores, and check-cashing stores. Those uses tend to cluster together and can create a blighting effect.

By regulating those uses, the city was able to position itself for redevelopment.

3

Promote your city and create perks. Filling vacant big box or retail spaces along corridors is really the responsibility of property owners or the real estate agents; however, local governments can assist in attracting retailers by creating small incentives or simply marketing the area as an attractive place to locate.

Having a point person who can “sell” the city and its unique service-friendly environment is key. Also consider such perks as a “one-year-only” fast-track permit process for filing vacant space or providing such small cash incentives as façade assistance.

These incentives are small but can really make the difference between retailers choosing your community over another one.

4

Stay ahead of the parking crunch. Nothing will derail a retailer or company from opening a business faster than a lack of parking or conversely, the cost of providing parking. Many older areas, for example, don’t have enough surface parking to meet the requirements for a new restaurant.

Making sure the parking plan, including a parking management system, is in place is critically important. One city completely eliminated the parking requirement for restaurants—only for a period of three years—and attracted five new businesses. These restaurants had to identify parking locations on their own and resorted to valet parking.

Once those restaurants opened, they began to attract more of the same and the codes were tightened. The city began to supply off-site parking and manage the fees for on-site spaces. The restaurants just needed the jump start.

5

Assess in-house negotiation expertise. If a local government owns public land and is looking for a private development partner, having an expert team in place will increase the odds of successfully developing the site.

Whether this team is with internal staff members or management advisers, there are two important skill sets to consider: experience and skill in negotiating a public-private agreement and an understanding of the economics of the agreement.

You can bet the developers will have sharp and skilled real estate staff by their side, so make sure your community is equally prepared.