Planners eye where R.I. lags

In a year of double-digit unemployment and 38 Studios LLC’s bankruptcy, economic-development concerns inevitably move to the front of the line.
So before planners begin the bulk of the state’s $2.4 million, Sustainable Communities Initiative, they’ll first take another stab at figuring out where Rhode Island is going wrong on economic development.“It is a response to the increasing sense of urgency with economic development,” said Kevin Flynn, associate director for planning in the state department of administration, about the move to expedite the economic-development part of the Sustainable Communities effort to update the State Guide Plan.
“Because there is such increased attention and urgency on the state’s business climate and why we lag behind, we thought it was important to ask what, in particular, do we do poorly compared with our neighbors,” Flynn added. “Once we analyze that, although the point is to gather data, we might learn something that helps us move forward.”
The Sustainable Communities Initiative is a three year, data and consultant-driven effort to build a new Rhode Island master plan for land use, transportation, infrastructure, housing and economic development. The U.S. Department of Housing and Economic Development is paying approximately 80 percent of the cost of the project with a $1.9 million grant awarded early last year.
Most of the work on putting the new plan together will not begin until late February or early March, but on a request from Gov. Lincoln D. Chafee, the economic-development part of the study will be fast-tracked to finish by Feb. 8.
Although Flynn said the analysis is not linked to the fiscal 2014 budget, which may include some economic-development restructuring, recommendations from the study could potentially spur separate efforts in the spring legislative cycle.
This will not be the first autopsy of the state’s economic-development efforts since 38 Studios collapsed and the R.I. Economic Development Corporation’s executive director resigned.
Between ordering a forensic audit of 38 Studios and a civil lawsuit against architects of the failed video game company’s $75 million state loan guarantee, Chafee asked the Rhode Island Public Expenditure Council to examine the state’s economic-development structure. Although the RIPEC report contained a number of recommendations that could have been achieved by executive order, Chafee has so far held off on making any changes, instead launching the lawsuit and seeking out more guidance.
But while critics and some economists say action is needed more than analysis now, some involved in the push for change say they are eager to see what the latest round of data gathering uncovers.
“One of the recommendations in our EDC review was that they do analysis and look at the business climate and rankings,” said RIPEC Executive Director John C. Simmons. “It is not fully what we suggested, but this takes the analysis to actionable items. With reporting in February, that will give the legislature a real hard look on action items to examine.”
Where the RIPEC report focused on the structure of the state’s economic- development apparatus, the Sustainable Communities plan will examine the content of the state’s strategy.
The request for proposals issued last week asks consultants bidding on the project to formulate an analysis after gathering data in five areas:
• What drives Rhode Island’s poor standing in national business-climate rankings compared to its neighbors?
• What are Rhode Island’s most promising industry clusters and what could be done to help nurture them?
• What parts of Rhode Island’s regulatory system are the greatest impediments to business growth?
• Do Rhode Island businesses have a tougher time securing capital than companies in other states and can public-financing strategies make up the difference?
• What are Rhode Island’s most marketable commercial assets and how could they be better promoted?
The poor perception of Rhode Island’s business climate was a subject of RIPEC study as recently as September of 2010, but the recent examination of the EDC called for a new study of the rankings and how to improve them. There is already a state office devoted to regulatory reform (now in the EDC but moving to the Office of Management and Budget) and an EDC “making-it-easier- to-do-business subcommittee led by Vibco Vibrators Inc. President Karl Wadensten.
After lawmakers this year required all state agencies to review each of their regulations for possible improvement or elimination, Chafee expedited the timeline on that effort from four years to two years.
Asked how the new Sustainable Communities economic-development analysis differs from those efforts and other studies on shelves in state offices, Flynn said this plan will recommend practical strategies and solutions to the state’s challenges.
“I don’t think there is a clear agenda now to what actions the state should take,” Flynn said. “I have seen people talking about structural issues with EDC, but I have not seen bold recommendations that will improve the economy in the state.”
The state initially embarked on the Sustainable Communities Initiative to reposition its land-use policies to reflect smart-growth principles.
Scott Wolf, executive director of Grow Smart Rhode Island, a member of the Sustainable Communities Consortium, said the expedited analysis should be valuable even if it deals with issues like marketing and business climate usually not associated with smart growth or land use.
“Land use and economic development are inextricably linked,” Wolf said, “especially in Rhode Island where we do not have a lot of land or room for error. Tourism potential and quality of life have become bigger factors than they used to be in the economy.”
The state RFP sets out a maximum contract of $60,000 for consultants interested in bidding on the economic-development analysis project. Bids are due Nov. 30.
Although the economic-development data analysis will be released in February, Flynn said a full draft of recommendations will likely not be assembled until the first quarter of 2014 and a final update to the state Guide Plan finished by early 2015. •

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