What message is your city sending?

by Contributing Columnist

Published: August 14,2006

“The bottom line is that we don’t want people moving into this county,” said the man who stood before a group of 75 residents at a recent public hearing in South Mississippi.

The meeting was about a proposed regional utility district, but his comments illustrate something many community leaders fail to take into consideration when doing strategic planning: There are some people who simply do not want the community to change. This is not the only reason that communities do not grow. Some communities unintentionally or intentionally send the message that they do not want new businesses to locate to their communities.

The list below contains some of the things I’ve seen communities do. I call it, “A Dozen Ways to Keep Business Out of Your City without Really Trying.”

1. HAVE A NEGATIVE PERCEPTION — Where does it begin? Probably out on the highway that runs by the town. If perception is reality, then it is important to know what others think about your community. You can do that by putting yourself in the shoes of a prospective business and evaluating your town from that standpoint. Ask retail clerks at the entrance and gateway businesses what they think of the town. If your own residents have a negative perception of the community, chances are good that outsiders will as well

2. DON’T LOOK GOOD — Ugly places are not very desirable. One problem with “ugly” is that we tend to see it less the more we are around it. The litter, the cars on jacks, the rusted signs and the run-down structures somehow seem to disappear a little every day that we see them. A business considering a new community pays attention to the appearance of a community.

3. CHARGE EXORBITANT DEVELOPMENT IMPACT FEES — There is an interesting dynamic going on these days with residential impact fees, which have been ruled as another name for taxes. Rapidly-growing communities tend to be the ones charging impact fees, while cities that are losing population are willing to pay incentives to get businesses to locate there. Some cities also charge fees to commercial development. In business decision-making, it is the total cost to locate that affects the decision. Charging fees merely adds to the cost.

4. ADD EXTRA TAXES ON CERTAIN EMPLOYERS — Unbelievably, the City of Chicago recently voted to require a living wage of $10 per hour and $3 in benefits be paid to employees of big-box retailers. See number nine below.

5. HAVE CORRUPT GOVERNMENT — No business wants to do business in a city where government officials extort money, engage in fraudulent practices or otherwise break the law, especially if they attempt to get businesses to participate in their schemes.

6. HAVE INCOMPETENT GOVERNMENT — Most communities have part-time elected officials who are not experts at the art of municipal government. They have to learn in a short time, but they also must rely on city employees. When a prospective business senses that local government is not competent, it avoids that town. One of the chief causes of incompetence in local government is the spoils system instead of professional personnel management.

7. HAVE HIGH PERSONAL PROPERTY TAXES — In Mississippi, personal property taxes means cost of a motor vehicle tag plus the business’ equipment, which varies greatly by county. It is easy for a new business to compare cost of taxes in adjoining counties. One company that had decided to move its Mississippi operation to one city backed up and then moved to a city in an adjoining county when it discovered that the tags for its 30-plus delivery trucks were much cheaper.

8. IMPOSE A COMMUTER TAX — Cities need money to operate. Cities that have suburbanites who work in the city, but don’t live in the city, sometimes consider an income tax on the commuters. Such a move often adds to the negative impression of a city and may just give a company another reason to move to the suburbs.

9. DEVELOP A BUSINESS UNFRIENDLY REPUTATION — Some communities want to be certain types of communities, such as residential, or bedroom, communities. They intentionally discourage certain businesses, resulting in the city getting a reputation as being unfriendly to all businesses.

10. DON’T BE BUSINESS FRIENDLY — It is one thing to be unfriendly, but it’s another to be lukewarm to new businesses. It starts with the chamber of commerce and ends with the city permit department. Even cities that have onerous permitting requirements can be business-friendly when the city officials make it easier to go through the maze. The easiest way to do this is to make it difficult to do business with the city in terms of bureaucracy and permitting.

11. DON’T UNDERSTAND BUSINESS — Cities must understand the needs of business and vice versa.

12. NEGLECT YOUR DOWNTOWN — A boarded-up downtown or one occupied by social service agencies sends the messages that there is not enough of a market for a retail presence. It’s also another way of saying the community is neglecting the basics.

MBJ contributing writer Karen Kahler Holliday

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