Freeport’s Public-Private Economic Development Partnership

Keith McBride on July 06, 2016 in Practicing Ec. Dev.

In the past, we’ve discussed the economic development structure in Freeport with our town council, but this year (and last year, as well) our workshop discussion did not touch on the issue.  While I’m glad to direct our conversation at whatever issues/questions the council finds most beneficial to their decision-making process, I sense (from conversations with residents and businesses, etc.) that there’s some confusion about why the public-private (non-profit) partnership is utilized in Freeport, and why I find it preferable even though it’s not widely used in Maine.  So, I thought I would touch on it, here.

If you’re not sure what I’m referring to, let me summarize:
While many communities in Maine have a public employee who serves as the town/city “Economic Development Director,” Freeport does not.  Instead, each year the council votes to fund (through TIF revenues) the activities of FEDC, a private, non-profit corporation whose mission is, “To partner with the community to promote sustainable economic growth that strengthens and diversifies the economic base and enhance the quality of life and unique character of Freeport.”

That’s it in a nutshell.  Which means it’s probably an over-simplification.  Maybe that’s a good topic for a future post.  (Mental note …)

The October, 2013, issue of Public Manager magazine (published by ICMA) contained an interesting article titled, “Complexity and Confidentiality: Unlocking the Subplots of Economic Development.”   It was targeted at Town/City Managers to inform them about economic development at the local level, but it could just as easily serve as an educational piece for citizens, residents and municipal policymakers.

Freeport is different in that there is no economic development department underneath the municipal government administration umbrella.  Instead, FEDC is a private non-profit corporation that receives funding from the town council to pursue the community’s economic development goals, and is governed by a board of private citizens.  I have often described this structure as being “unique.”   Perhaps I was wrong:

“Various factors are involved in determining how economic development activity is structured within a community. Elected boards might not want a department for budgetary reasons. Political pressures of the business community might favor a chamber organization. The nonprofit structure might appear to provide increased flexibility and an ability to ‘move on a dime.’  Hybrid structures that are separate 501(c)(3) organizations and receive funding from local governments are not unusual.”  (emphasis added)

But the goal of these authors is to educate town managers on the economic development process, and the roles that managers play in the process.  For convenience, they present it in the context of recruitment or expansion of manufacturing businesses.   “The entire recruitment and expansion process,” they say, “does seem to take on a cloak-and-dagger mentality that is unusual from the typical management view of openness.”   Management is not the only stakeholder in local government who expects openness.  But the authors explain why managers must understand the need for confidentiality:

“Companies require confidentiality; virtually every manufacturing location requires an assessment process that occurs without public disclosure. Why? Almost always, companies consider a relocation or an expansion in order to gain competitive and economic advantages. Manufacturing operations do not want competitors to gain knowledge of expansion plans.  If the decision involves a relocation the company might not want its own employees to know. A company also might not want shareholders to gain knowledge of an assessment. It is not uncommon for the company name to remain confidential and visiting company representatives to use only first names when they visit a community.  Likewise, a planned expansion of an existing company might involve a competitive decision within the corporate structure, and this competitive position might involve multiple states.”

They issue a caution to managers who also serve in an economic development context:  “Local government managers, who also serve as the lead economic developer or who are assisting in that role, are often in a position where they must decide which role is primary at the time: open and transparent at the risk of breaking confidentially requirements and potentially losing a project, or meeting confidentially requirements at the risk of being less than transparent with the elected board and the public.”

Just as the issues in this article are not limited exclusively to manufacturing recruitment, neither are they limited to town and city managers.  In my experience, I’ve see that economic development directors, be they public, private or hybridized, are also under pressure to be open and transparent.  Trust is critical.  We all want our community to know and trust that we are serving them, even when we cannot disclose information that a potential business has requested remain confidential.

But that is a hard sell, because saying “I can’t tell you” to our residents, elected town councilors and local press does not make you popular at the municipal level.  Quite frankly, I am often so excited about potential new developments that sometimes I wonder if it bugs me to say it as much as it bugs them to hear it.  But the article does a good job of explaining how it is not only important, but a necessity for some projects.