Tuesday, July 28, 2009

City of Owensboro moves ahead with Local Incentive Program

The Owensboro City Commission took a step toward creating an aggressive local incentive program. The Local Government Shared Investment Policy is a public private partnership between local government and developers to foster the public benefit of economic development for the region.

The approach represents a policy shift focusing on ways to incentivize redevelopment, infill development in the urban core, and smart growth tactics in the suburban areas rather than solely incentivizing unplanned suburban expansion as is the practice with the current annexation incentive on the books. The proposed policy would not eliminate the use of the annexation-based incentive; rather just add a robust tool to the incentive arsenal representing major shifts occurring in the world of commercial real estate and residential development.

This new direction comes in response to events occurring in real estate markets as a result of the Global Financial Crisis. The crisis has hit suburban markets in many parts of the American landscape. While Owensboro has not suffered as significantly as other areas, some potential development has been impacted. Areas that are especially hard hit are office parks, shopping centers, big box retail, and apartment complexes. Many of these developments are ripe for transformation into more dense mixed use development.

Urban Land, a leading commercial real estate publication, writes in the June 2009 issue that “now is the time and this is the opportunity for municipalities, planners, real estate developers, and economic developers to come together to reshape development patterns of sprawl.”

One of the major trends in real estate development that support business recruitment and economic development is the retrofit infill projects of existing strip malls and big box retail centers into mixed use developments with office space. Owensboro has numerous locations where this could occur, but have no incentive package or zoning policies to support developers to do this kind of infill development.

Next: Details about the Project-Based Inducements proposed in the new Shared Investment Policy.

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