Having been mayor of Indianapolis and deputy mayor of New York, I considered whether, although the scale differed, there were common themes in terms of success. Indy's dramatic turnaround combined strategy and tactics: The city had strategically invested in a range of assets that included an urban shopping mall, a downtown canal, a riverfront park, streetscapes and major new job-creation initiatives leveraged by "eds and meds" — the proximate Indiana University-Purdue University campus and growth in the health sector. The initiative was fueled by a combination of tax-increment financing and direct infrastructure investment.
Recent developments in New York City, through its Economic Development Corporation (EDC), show how these themes can come together in truly extraordinary ways. EDC's president, Seth Pinsky, recently described to me the elements of his agency's successful approach — one that utilizes some common elements with Indianapolis' approach and serves as an example for other cities struggling to bring their downtowns back.
First, Pinsky underscored the procedural changes EDC undertook as the agency moved from a structure of top-down decision-making to one that welcomes bottom-up feedback from business, community and academic leaders. The ideas bubbling up serve as the grist for analysis of challenges and the proper alignment of incentives and definition of deliverables.
EDC also altered its substantive approach to begin looking at its role as not just a real-estate developer but also as an agency that drives vision by establishing a longer-term strategy to create jobs while enhancing quality of life. One can see these approaches in two recent areas.
One of those was what EDC called its game-changers exercise, designed to identify initiatives that the city needed to implement over the long term to remain globally competitive. All big ideas were welcome in response to the following questions:
• How can the city best retain and attract the talented people who make it thrive?
• What are the key aspects of physical infrastructure that are holding back growth?
• How can the city do things differently to get more out of its limited resources?
• How can it employ existing community resources to create good jobs for New Yorkers?
The inclusive process produced many actionable ideas, the most visible of which resulted in a partnership between Cornell University and the Technion-Israel Institute of Technology to build a two-million-square-foot applied-science and engineering campus on Roosevelt Island — an effort to stimulate the city's tech sector while creating knowledge jobs. This big-idea, economic-development approach reminds us that cities need not only to build on existing competitive strengths but also work to attract anchor institutions that produce jobs beyond those they provide directly.
Another recent New York City project illustrates EDC's quality-of-life approach to economic development. Cities create value with public investment in infrastructure. Indianapolis' canal produced almost $1 billion in private investment, and Chicago's Millennium Park drew even more. In New York, the effort to turn a deserted elevated rail line into a park, the High Line, has produced approximately $2 billion in private investment in the surrounding area. In addition, the park has raised property values for adjoining property owners and created new development potential, thereby increasing both property tax revenues and quality of life.
Both of these cities also illustrate that a quasi-governmental entity separate from city government allows for quicker responses and provides a place from which experienced, transaction-oriented experts can work. Since 2008, Develop Indy — Indianapolis' economic development corporation — has been dedicated to attracting new businesses, preserving and growing existing businesses, and acting as a catalyst for both job growth and capital investment.
Public dollars will remain scarce, and should be invested only when the return substantially exceeds the investment. The experiences of New York and Indianapolis show that large visions coupled with catalytic investments can produce not only tens of thousands of new jobs but also tax revenues far in excess to those foregone.