How would you spend $100 million?

The Foundation Center-Cleveland has been asking this question to go with our economic development grantmaking in Ohio project (soon to be released). View our playlist here: http://www.youtube.com/view_play_list?p=C12AE9716208479A.

Check out one of the videos below.

However this money is spent, I truly believe it needs to be spent in the core of the city. We can't keep enabling urban sprawl, it is unsustainable. That being said, I think this money should be used to highlight our number one resource, Lake Erie. When water becomes scare and way to expensive in the south, and that is already happening (Lake Mead behind the Hoover Dam is at 50% capacity and has a serious chance of drying up in the near future), manufacturing that depends on water (food production, chip makers, etc.) will be looking for other sources. We need to start planning now so as that water shortage becomes a real problem, Cleveland is ready to benefit.

Posted Apr 17, 2011

I have a few thoughts about what some of the principles for determining how the County invests might be:

1) EVERY investment should leverage private participation that is at least several times larger than the public's participation.

2) EVERY investment should be judged, at least in part, by its potential return on investment for Cuyahoga County's residents/communities AND for its potential ROI for the development fund. Whenever possible, the fund should have a plan in place with the companies/projects in which it invests for how it will recover its investment and receive a reasonable return on that investment, just as a private investor would. While an investment from the County should reduce risk for an enterprise being undertaken in Cuyahoga County, it shouldn't necessarily be free. The fund should try to generate a return from its investments that can be used to make future investments.

3) SOME investment should be targeted at incentivizing and removing impediments to Cuyahoga County benefiting from greater external investment, both national and international. Ultimately, people are making decisions about where to invest based on the return they can expect to achieve in different locations. The fund should consider investments that make Cuyahoga County's economy and markets more attractive to external investment.

4) SOME investment should be targeted for seed capital investment, to counterbalance the tendency of Cleveland-area investors to keep local start-ups at arms length until the enterprise has already proven itself and risk has been significantly reduced. This should help Cleveland move back to a culture of "wealth creation" and away from its culture of "wealth preservation."

5) SOME investment should be targeted at purposefully and thoughtfully planning the creation of "virtuous circles" to combat the "vicious circles" that drive economic decline. We should be able to think through how to construct and invest in positive feedback loops that encourage growth.

6) EVERY investment should have a plan for how the enterprise/effort will ween itself off of government support and become self-sustaining. This is particularly relevant when and if the fund considers incentivizing/supporting specific types of development, whether it is residential housing, office space, bio-tech, etc. Before the investment is made, there should be a clearly understood path for the industry/market the fund is trying to catalyze to become sufficiently robust to be able to attract private investment that would make ongoing public investment unnecessary.

7) The fund should combat our "edifice complex." We shouldn't build buildings just for the sake of building buildings. Every construction project should be evaluated on its individual merits AND on the role it will play and the impact it will have on the rest of the County's economy. A new office building will create construction jobs, but if it only attracts tenants from other county locations, we are just rearranging deck chairs.

Posted Apr 21, 2011

I was pleased to hear, repeatedly, "return on investment" and "willingness to take risks," but that means different things for companies at different stages. For those companies at very early stages, the investment is in the idea and the individual entrepreneur. This runs the risk of appearing to be a game to benefit insiders. If individuals are benefiting, the process needs to be rigorously and scrupulously reviewed for merit, not insider connections, perhaps by some sort of peer process. For more mature ideas and companies, I think the public money shouldn't be first in, but carefully match ideas already generating support, with public money providing the public part of the project (perhaps land out of a land bank or infrastructure). Overall, I thought the County was developing an interesting idea and the Executive and his staff deserve a lot of credit for developing a new idea in a very tough budget environment.

Posted Apr 22, 2011

If money is to be spent to promote the economic future, it could be spent in as many ways as there are citizens. To truly make use of a fund like this, it is important that however it is spent, it promotes economic growth.

How about business incubators? Could we use the money to fund a small business incubator that would help small businesses to grow and thrive in NE Ohio? How about a business outreach program. Could $100 million help to build a center that would attract the likes of Apple, Google, or other firms that are building the future? Understanding that the key to a long term future for the region involves attracting and retaining the talent of emerging entrepreneurs and professionals, could this money be spent courting the corporations that are building the infrastructure of our technology based future?

Could it be used to evaluate and overhaul our local school systems? By taking a regional approach to education, then we could all benefit from a collaborative school system that does not encourage new parents to flee to the suburbs where the school system has much higher graduation rates.

Could it be used to provide for a public/private partnership between a major corporation and the county. One idea would be to have an Adobe (or similar) training center where unemployed could be trained in software use and then commit to an employment contract with the company. The corporation would train our workforce and help us to be more competitive in the market, and at the same time receive a partial reimbursement for each worker that they employ.

While these may not be the best answers, I know that to make the best use of funds such as these, we truly need to consider new and interesting ideas. Putting the money directly into programs that have not worked in the past is not an answer. Nor can we afford to use this opportunity to recreate a new program that is really just an old plan with a new name. We need something completely new for NE Ohio.

Posted May 03, 2011

If I were invited to the table to dispense the money, I would suggest both short and long-term solutions. As a lifelong Clevelander, I have longed to see our city and county become a destination location. My chest will swell to see Chicagoans, Floridians, Canadians and, others come to our city and leave behind disposal income because they delight in what Cleveland has to offer.

We have a gem in the Lakefront. By most accounts parcels of land near the water front are under-utilized. Some say, Burke Lakefront Airport serves only as a landing strip for corporate jets, but grounds any strategies to allow the city to really take off. Its high-time the resources are mined for the fullest potential. Can this be accomplished with $100 million? No. However, a fraction of the funds can be used to convene articulate thinkers to author a supplemental plan of development. My hope is the vision would be realized by 2020.

I would also suggest the county fund an economic incubator to assist smaller enterprises grow to become larger enterprises. Once known for our rust belt economy, Northeast, Ohio must reinvent. Cleveland has world class medical facilities and with the construction of the Medical Mart, the prognosis for the region is slowly improving.

Nevertheless, we must create new global technology; Cleveland must put people to work and spark an economic boom to resuscitate the economy. It is imperative that Hispanic, Arab, Asian and, African-American business leaders sit at the table to ensure inclusion – we are all in this boat together.

Part of the pot would go to stop the brain drain. Some of the best and brightest attend universities in the Greater Cleveland and Akron area. Why not earmark funds to make it difficult for budding entrepreneurs to take their talents to South Beach or anywhere else. Use a chunk of $100 million to provide incentives in housing, tax abatement, scholarship dollars and professional development to keep home grown talent at home. We should grow Cleveland by tapping human and natural resources.

In the early 1940s, the Illuminating Company (First Energy) told the world, Cleveland was "the best location in the nation.” The goal of the campaign was to attract new industries to the area. I recall hearing a version of the campaign during my childhood. As a stakeholder in Cleveland’s future, I hope another marketing plan is in the offing; I still believe Cleveland is the best location in the nation.

Posted May 05, 2011

Small business loans, small business loans and then some more small business loans. This region spends too much chasing smokestacks. The new economy is going to be smaller, more adaptive firms.

Posted May 05, 2011

Check out what one $200,000 grant is doing to promote business growth in NYC. http://www.cooltownstudios.com/site/when-coworking-meets-serious-and-fun-economic-development/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Cooltown+Studios
Could we make something like this happen here? If we got all the brinht mids of Cleveland into one space to build an economic engine, how fast would it run?

Posted May 07, 2011

I don't have a priorities/strategies/principles answer, but I do have a perhaps off the wall idea -

Allocate a portion of the money to creating/sponsoring a Kiva Field Partner (Kiva.org) to serve the Cuyahoga County area, and a second portion of the money to match private loans.

Kiva connects entrepreneurs who need small loans, microfinance institutions (the Field Partners) and small lenders to help people who need a little money to start or grow a business (a sewing machine for a seamstress, a lawnmower to start a small landscaping business, etc.)

The return on investment might not happen in precisely the traditional way, since the money spent sponsoring a Field Partner would not necessarily be returned, but if a portion of the money is also used to set up a matching fund for loans made through Kiva to local entrepreneurs, the amount circulating could be doubled. As a rule the loans are repaid and recycled, so a $10,000 matching fund would generate $20,000 in loans that could to continuously fund new loans once the initial ones are repaid.

The lenders are (or can be) residents of Cuyahoga County who have as little as $25 to loan. This might empower individuals who have never been able to invest before - and give them a sense of ownership and pride in a new local business, and their community,

Posted May 10, 2011