By Jonathan P. LaBonte
With spring arriving in Lewiston-Auburn, the difficult part of the municipal budget season looms over us. A number of drivers on both sides of the river are causing budgets to swell this season, which means taxes in Lewiston-Auburn will be going up along with it.
With that dilemma comes two solutions: grow the value of the cities to increase revenue or cut spending.
Unfortunately, when the fiscal year ends in only a couple months, the slashing of spending gets most of the attention—not the medium- and long-term need to grow the value of property in Lewiston and Auburn. This week, it seems the topic is coming to a head, as the City of Auburn contemplates an idea of “defunding” the Lewiston-Auburn Economic Growth Council.
While it was created in a very different era, LAEGC exists to provide some basic economic development services and to defuse some of the competition that exists between both cities, mostly for larger scale developments. And from the rhetoric we are now hearing, it appears the competition may be back again.
It will be difficult in the next two months, if not impossible, to tackle the question of what LAEGC provides right now and what would it cost to split those services back to the cities, if the cities want to offer those services at all. When an agency is under threat, the spin likely to be rendered by those with an agenda to eliminate the agency, then trying to find the facts amidst that, will not be productive to the ultimate goal: supporting business growth and development in Lewiston-Auburn that will increase our tax base.
Rather than jump into that debate, why not ponder the long view of what services might be of value from a regional economic development agency and then map out a route to get there. For the last hundred or more years, economic development has been seen through the lens of mills and factories. How can we bring jobs to the community by the hundreds?
In places like Lowell, Mass., Portsmouth, N.H. or Portland, Maine, economic development discussions have transitioned to growing and supporting small businesses and fostering downtown investment. How can you bring jobs to the community by the handful?
Clearly, those are two very different questions. And for communities hit the hardest by the loss of their industrial economy, it is very difficult to make the mental transition from thinking that economic development is about “home runs”—landing a 500-job facility every five or 10 years—to fostering local business growth and reinvestment.
Lewiston-Auburn, from this vantage point, seems to spend most of its time and financial resources seeking home runs and focusing on Big Box retail and industrial parks in greenfield areas. And with that constant focus, the community is not able to grasp the consequences of the continued loss of downtown businesses, the value of downtown buildings and the vicious cycle that ensues.
If I were shopping the northeast United States for a site for a new manufacturing facility, it is likely LAEGC would get involved and try to assist with my plant. As is the case in today’s world of economic development, I would probably bid cities against each other to get the lowest possible cost for the land, to get a building and maybe even to get relieved of some of my property taxes as an incentive.
If I were the owner of Dostie Jewelers at the head of Lisbon Street, the longest-standing business in Downtown Lewiston, would the City of Lewiston or LAEGC know what would help my business grow? Are there incentives to help with my storefront, with signage or marketing or with other investments that might help me to add an employee or two?
In the case of the former, a lot of time and energy will go into courting me with only limited odds of hitting the vaunted home run. And if you don’t get me to come, then you get no tax revenue and you are still at square one.
In the case of the latter, with the existing business, I’m already here and I’m already invested. My business already has value, and improving it will grow its value in the city’s tax base.
LAEGC is quick to tout its ability to support site selection for potential clients, to assist with the management of loan pools to bridge financing for new projects and to assist in marketing the region overall. Perhaps, if there is a desire to redevelop our downtown and grow its value as a means to grow our tax base, an agency like LAEGC might be restructured to help support that.
Lewiston and Auburn both have a downtown area with readily available real estate and empty storefronts. And while we seem to have a strong inventory of industrial-park sites, could a small business start-up looking for a reasonably priced location in Southern Maine, especially with the prices of the Portland market, easily find options to move to our downtown? No, because there is no concerted effort to promote available real estate downtown.
The Growth Council offers a loan pool and often supports business-park and industrial clients in bridging financing that is critical to making projects happen. The interest on those loans is a revenue stream, in part, to LAEGC. The cities both have loan pools, with some interest acting as a revenue stream. And the Androscoggin Valley Council of Governments also manages its own loan pools, with portions of interest supporting their overhead.
Four different agencies from which to borrow money for development, and all are supporting different levels of overhead. Have we determined how to best leverage these loan pools for economic development? Could some loan pools be structured and targeted for business parks and others focused exclusively on downtown and support for small business?
The front-page headlines and the push to go it alone for economic development can be entertaining every budget season, but it doesn’t address the underlying lack of economic development strategy. From that strategy, agencies and services can be restructured to support growth. The two city councils could take the current debate to refrain the issue.
It is time that Lewiston-Auburn shed its industrial mentality and stop relying exclusively on the illustrious home run and a glorious dream that jobs will magically return to the community by the hundreds. The small businesses and downtown property owners who are already here today could use some attention: they are the foundation from which we should grow value in our cities.