Council for Investment in New American City Meets in Madison
By Dave Gatton
July 1, 2002
With its new chair, Detroit Mayor Kwame M. Kilpatrick, the U.S. Conference of Mayors Council for Investment in the New American City met in Madison, WI, on June 14th at the Conference's 70th Annual meeting to discuss a wide range of initatives including release of its 2002 U.S. Metro Economies Report, development of a national financial literacy campaign, and strengthening its ties to the commercial retail industry to further promote investment in cities.
Mayor Kilpatrick briefed Council members on the release of the metro economies report, which includes the gross metropolitan product numbers of the nation's 319 metro areas. The U.S. Conference of Mayors, through the Council, is the only organization to release GMP numbers for the nation, and is promoting GMP as a new economic measurement that should stand along side gross domestic product (GDP).
"Our report shows that we are nation of metro economies," Kilpatrick told the mayors and private sector and non-profit members of the Council. "We can use these numbers and the report's findings to show that cities are the new place to do business and invest in America," he said. But to achieve this, Kilpatrick said the mayors would have to work closely with Council members to promote the concept of GMP and to present it to business organizations across the country.
The report, which U.S. Conference of Mayors President Boston Mayor Thomas M. Menino released with Kilpatrick the following day at the Mayors Business Council Luncheon, shows that over 85 percent of the nation's GDP is produced by U.S. metro areas.
For the first time, the report includes information showing how dominant metro economies are within state economies. Over 16 metro areas comprise over 50 percent of their states over all economic output. And, the economic output of the top ten metro areas exceed the combined output of the 31smallest states. "We need to use this information to show Congress and state legislatures how critical it is to invest in our metro economies if the nation as a whole is to remain economically strong," Kilpatrick said.
Jay Kayne and the Kauffman Foundation
Dr. Jay Kayne of the Ewing Marion Kauffman Foundation addressed the Council and spoke about new approaches to economic development. The Foundation is exploring how states and cities can develop an entrepreneurial climate that encourages individuals and entrepreneurs to start new businesses.
Recent cutting edge research shows that most economic development resources go toward attracting existing firms to locate in a particular geographic region, rather than creating an entrepreneurial environment that will attract and nurture the nation's most talented entrepreneurs. Kayne said there was a dramatic discrepancy between what encourages the creation of new economic growth companies and where such economic development resources are directed.
Kayne told the mayors, "traditional economic development has focused on enterprises, whereas the entrepreneurship approach focuses on the people who build enterprises."
He said over 70 percent of economic growth is explained by entrepreneurial activity, but only seven-tenths of one percent of state economic development resources are used to support entrepreneurial development.
Kayne and the Kauffman Foundation are working with the Conference to explore how cities can promote an entrepreneurial climate that will lead to wealth creation for their communities. "Wealth" is not a four letter word," Kayne said, indicating that other spin-off businesses are created when entrepreneurial growth is generated within a city.
Garner on Commercial Retail
Conference Vice President Hempstead Mayor James A. Garner reported on the growing importance of attracting commercial retail to cities in the current economic environment. "We need to establish closer ties with the International Council of Shopping Centers, developers and commercial retail businesses," Garner told the Council. "Cities have never been better positioned to take advantage of renewed interest among retailers in the urban market," he said.
Garner met with top ICSC officials at their annual meeting in Las Vegas, NV, in May to discuss a stronger dialogue between retailers and mayors. He charged the Council to work with retailers and developers who are taking a closer look at new markets in cities.
In a resolution passed by the Conference in Madison, the Council has been directed to develop a national financial literacy campaign to educate city residents on how to maintain good credit histories. According to Council member Freddie Mac Senior Vice President Dwight Robinson, poor credit histories is one of the leading barriers to entering the homeownership markets for many city residents.
The Council acknowledged that many center city homeownership rates lag behind those of suburban jurisdictions and that minority rates are significantly lower than that of whites.
Kilpatrick said he would work through the Council to develop a national framework for encouraging local financial literacy programs. Council members such as the Mortgage Bankers Association, Freddie Mac, Fannie Mae, and Countrywide Home Loans have already developed curricula that cities can use in structuring their own local campaigns.
The Council is planning its next meeting, in the form of an investment summit, for the late fall of 2002.