New draft report puts mayor at center of economic development

Earlier draft called 'recycled'

jpatton1@herald-leader.comApril 7, 2011 

A new draft of a report on Lexington's economic development strategy emphasizes the role of the mayor and other elected officials and suggests tapping the state for a $5 million regional economic development fund.

The draft, prepared by AngelouEconomics, was released to the Herald-Leader by Commerce Lexington.

"I think the new draft is much more aggressive, more forward-looking, with more substance to it," said Bob Quick, chief executive of Commerce Lexington. "It's going to take some funds, some investment to implement."

A previous version was criticized as "recycled recommendations" after local entrepreneur and ProgressLex blogger Ben Self discovered that whole sections appeared to be lifted from reports written for other cities.

After an online firestorm last month, Angelos Angelou, who heads the firm, refunded the city half the cost of the report — $75,000 — at the request of Mayor Jim Gray.

"We gave you almost a new document," Angelou said Wednesday. "The general strategy is the same, but there's much more detail."

He said the draft will be vetted by local business leaders and their feedback will be incorporated into plans for implementation in the final report.

Gray met with Angelou in March. The mayor wasn't mentioned in the previous draft; however, in the new version he's considered "Lexington's chief business development officer."

Geoff Reed, Gray's senior policy adviser, said the report is a dramatic improvement over the first draft, and the city is particularly interested in following up on the suggestions for measuring performance.

"It's important that we have a meaningful way to measure what we're doing, whether we have success or if we need to change direction," Reed said. He also noted the need to keep track of how public money is spent.

The new, 81-page version incorporates information from reports on economic development prepared by Gray's transition team.

The report kept mentions of the "lack of trust" among officials in the region, indicating that is a core problem for the Bluegrass region.

The strategy still emphasizes regional cooperation, which it said is sorely lacking, and said economic development efforts must be "funded appropriately." However, no dollar figure is given.

The report suggests lobbying the state to "dedicate a portion of existing state sales or property tax revenue to create a $5 million pool for local and regional economic development."

That pool of money could be used by any part of the state, not just the Bluegrass region, Angelou said.

That might be "very wishful thinking" in the state's current economic situation," Reed said.

Chamber a 'focal point'

The final version of the economic development report might be released by mid-month, Commerce Lexington leaders said, and is unlikely to come before Gray gives his budget address Tuesday. That leaves the role of Commerce Lexington in the city's economic development strategy up in the air.

"The report has the chamber still as the focal point of Lexington economic development efforts, and I think the chamber is a vital partner," Reed said. "But it's yet to be determined how exactly to proceed with this joint effort. ... As far as specific dollars and who does what, we're still in the talking stage."

The new version drops a push to expand Commerce Lexington into a regional group with a new financing structure.

Instead, it recommends a regional development council with "strong political leadership involvement" with elected officials as the leading spokesmen.

Commerce Lexington might be "the most natural" platform to build upon, according to the draft, but "the regional effort can be independent or housed in a separate organization."

Quick said he does not read that as a lesser role "at all."

"Commerce Lexington has a very significant role," Quick said. "We're not going to slow down."

The new report suggests moving a key part of minority business development — a big portion of Commerce Lexington's city-funded activities — back into the Lexington-Fayette Urban County Government.

Angelou said local businesses told them the certification of minority businesses was too confusing and would benefit from having a one-stop location with the city.

Other recommendations

The updated report also recommends a dedicated funding source for arts and culture in Lexington and for improving the permitting and planning process, which developers complained is often too political and unpredictable.

And it mentions several things that have been the subject of past efforts, including branding of the University of Kentucky's Coldstream Research Campus, encouraging more direct flights to Blue Grass Airport and pushing downtown development.

AngelouEconomics also provided a draft assessment of Commerce Lexington's performance compared with peer cities.

Commerce Lexington's economic development budget of $1.2 million is below the median $1.7 million of a benchmark group that includes Asheville, N.C.; Louisville; Northern Kentucky; Austin, Texas; and Colorado Springs, Colo.

According to Angelou Economics, "Commerce Lexington's 41 percent public funding is the third-highest of the benchmarked regions," but the number of private investors is the second-lowest, at 125.

Preliminary data compiled by AngelouEconomics are available at Advancelexington.com, where the final assessment and strategy will be posted.

Reach Janet Patton at (859) 231-3264 or 1-800-950-6397, Ext. 3264.

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