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Who Gets to Be a 'Commerce Center'?

Lawmakers, experts discuss best ways to promote sprawl-free growth

November 3, 2005 | By Andy Guy
Great Lakes Bulletin News Service

Bruce Giffin

Grand Rapids leaders have invested millions in reviving their downtown, but state spending policies often undermine their efforts.

GRAND RAPIDS – A journeyman electrician by training, James Jendrasiak spends much of his time wiring up new ideas to generate money for this cash-strapped city. But, when he spoke at a recent candidate forum, the incumbent First Ward Commissioner was clear that he opposed simply hiking taxes.

Instead, Mr. Jendrasiak said government could get smarter with the money and resources it already has. He then offered several innovative ways to help relieve Grand Rapids’ fiscal crisis. He called for a surcharge on tickets to downtown sports and convention events to pay for added police and fire protection. Mr. Jendrasiak suggested that liquidating underused public properties could raise cash, spur more downtown development, and stimulate new home construction, particularly around urban schools. He even urged the city to help lower its projected five-year, $80 million budget deficit by turning sewage sludge into fertilizer and selling it for a profit.

“We’re facing a harsh reality,” Commissioner Jendrasiak said. “We must find new ways to streamline the budget, reduce costs, create more revenue, and work with state legislators to keep [funding] at its current levels.”

Some state officials are thinking more innovatively, too. Michigan spends more than $10 billion annually on roads, schools, sewers, buildings, and other infrastructure and services. But critics of the state’s current economic development policy say those public investments are too often spent on projects that push development further out into the countryside. As deficits swell, infrastructure crumbles, and the state’s economic competitiveness wanes, more officials say Michigan must first concentrate its limited tax dollars on strengthening the communities it has, before spending to build up new ones.

Tomorrow, lawmakers, academic experts, and representatives of local governments will discuss that and more at a workshop in Lansing that was prompted by the traction Republican state Senator Jason Allen's so-called "commerce centers" bill is gaining in the state capital.

Former New Jersey Governor and former U.S. Environmental Protection Agency Administrator Christy Todd Whitman, a Republican who is nationally known for supporting improved transit, open space protection, and modern land use laws, was originally scheduled to deliver a keynote address on the importance of linking economic development and growth management. But, due to a last-minute cancellation, Michigan State University President Lou Anna Kimsey Simon will take her place. The workshop, which is co-sponsored by Michigan State University’s Land Policy Program and the Michigan Economic and Environmental Roundtable, is designed to refine and advance the commerce center idea, which is currently subject to a wide range of interpretations.

What Places Should Qualify?
Establishing commerce centers was a key recommendation of the Michigan Land Use Leadership Council, the 26-member, bipartisan commission that Governor Jennifer M. Granholm, a Democrat, charged two years ago with advising the state on how best to revitalize cities, preserve farms, boost the state economy, and protect the state’s natural resources. Many land use experts agree that the commerce center concept is a key to spurring the state’s lagging economy.

Carol Townsend, a community development expert with Michigan State University in Kent County, where Grand Rapids is located, is one of them.

“The abandonment and disinvestment that has occurred in urban core cities is directly related to the unplanned growth and development that gobbles up farmland and open spaces in rural areas,” Ms. Townsend said. “It is time for the Legislature to take action and reverse this trend of urban sprawl. A prudent way to do this is to utilize state resources to revitalize cities.”

But deciding which communities to help and how to target economic development spending is a complicated debate. The legislation proposed by Senator Allen, who lives in Traverse City and chairs the state Senate Committee on Commerce and Labor, defines commerce centers as any city or village in Michigan, as well as townships with populations exceeding 20,000 in the five most populous counties (Wayne, Macomb, Oakland, Genesee, and Kent). Hundreds of municipalities and 23 townships meet that definition. Senator Allen will highlight his legislation at the workshop.

But some experts fear that the senator’s bill, as written, is too broad and may inadvertently subsidize the type of sprawling, low-density development that the leadership council intended to halt. They suggest that reversing Michigan’s half-century habit of outward-bound investment so that the state helps to rebuild cities and protect prime agricultural land demands a more targeted approach.

“There are not enough resources to have an impact if too many communities are designated,” Ms. Townsend said. “To see real results, state dollars must be highly targeted.”

Learning From Experience
There are examples of other, earlier legislative efforts to boost the state’s economic development going awry. One is the Transportation Economic Development Fund, enacted by the state Legislature in 1987 to fund highway, road, and other infrastructure developments that support new job development. The fund has spent $382 million since 1988, but 78 percent has gone to new suburbs and rural areas; just 22 percent went to core cities. The already well-employed suburb of Auburn Hills has received $1,250 per resident, for example, while job-poor Detroit has received just $25 per resident.

Grand Rapids’ current experience—like Detroit’s, Muskegon’s, and that of many other of the state’s hollowed-out urban centers—also highlights the need for better coordinated and more precisely targeted public spending to improve growth management, some observers say. Michigan’s second-largest city has a promising vision for reenergizing itself. The plan involves rebuilding long-forgotten public facilities, reclaiming underutilized properties and waterfronts, and aggressively expanding public transit options—the steps that made world-class cities such as Chicago, San Francisco, and New York destinations for more new residents and business.

But the current pattern of state spending on public infrastructure has produced some ironic outcomes around metropolitan Grand Rapids: Modern, high-tech school buildings are opening in its newest suburbs while administrators in the central city debate which historic schools to close for lack of enrollment. Dignitaries recently christened a smooth, $700 million new highway south of town while other civic officials continuously struggle to find the money for streetscape and public transit improvements in the region’s older suburbs and urban core. And even as officials at the city’s wastewater treatment plant scrape together funds to modernize aging sewer lines, the state considers funding the construction of a separate, new facility north of the central city.

Many urban and land use leaders say that neither their communities nor the state can afford much more of such uncoordinated and sprawling economic development. They hope that commerce center legislation will reduce the problem.

A Turnkey Solution
That is why many of them suggest that, instead of casting the wide net Senator Allen currently envisions for commerce centers, his bill should instead use the Obsolete Property Rehabilitation Act, Public Act 146 of 2000, to define them. That law already lists 103 cities, towns, and townships as “core communities” that serve as economic centers for their respective regions. The act also establishes basic criteria—including a community’s size, average family income, and financial status—that could become a working definition for commerce centers.

Others are calling for an even more careful approach. For example, members of United Growth for Kent County, a citizens group focused on land use issues, are preparing a position paper recommending that only 20 communities—10 major cities, and 10 smaller towns—be designated as commerce centers to get the program off the ground.

“Everyone has a different idea in mind for what a commerce center is,” said Dave Bee, director of the West Michigan Regional Planning Commission and an active member of United Growth. “Nobody wants to see a commerce centers program inadvertently end up promoting areas that drain nearby downtowns of their customer base. This happens too often already.”

“If the goals of the program can be crafted to avoid the potential pitfalls,” Mr. Bee added, “it follows that such a program can only be implemented in a limited number of communities until Michigan’s financial situation improves. Michigan cannot afford to throw its limited financial resources to the wind to land haphazardly across the state.”

Andy Guy is based in Grand Rapids, Michigan’s Smart Growth leader, where he directs the Michigan Land Use Institute’s Great Lakes program. Reach him at aguy@mlui.org

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