Rebuilding Amsterdam’s Economic Foundation

Posted: May 23, 2010 in Economic Development

The Comprehensive Plan’s second directive is to rebuild Amsterdam’s economic foundation. Easy enough right? And after we’re done with that, we’ll work on achieving world peace! I’m being sarcastic because the sheer magnitude of the task of turning around a city economy that has been in decline for 70 years and also happens to reside in upstate New York, can make one simply shake their head and walk away. One can look at the political, economic and infrastructure decisions made over the previous decades and point out the mistakes that contributed to our current situation. However if we take a step back we see that our city is like many others in our region that have struggled to adapt to the rise of multi-national corporations and the mass exodus of manufacturing jobs to their overseas plants.

Here’s an excerpt from the Comprehensive Plan that expands on the directive:

Like many former industrial cities in Upstate New York, Amsterdam appears trapped in a downward economic spiral. As industries closed or scaled back their operations, property tax revenues from these facilities were reduced and jobs were lost. The loss of employment opportunities also lead to declining population, reduced home ownership, distressed neighborhoods, and reduced quality of life; furthering erosion of the City’s tax base and placing pressure on the City’s infrastructure and services. Finally, older or poorly maintained infrastructure, diminished services, poorer quality of life, and/or higher taxes limit the City’s ability to attract or retain businesses and residents resulting in further erosion of neighborhoods, further reduction in the tax base and so on – the downward spiral continues. Exacerbating the downward economic spiral have been federal and state policies that have encouraged development away from cities over the last half century. Stopping the downward spiral is not an easy task. At first glance, it appears that the priority must be to focus energy on attracting new industries to, or retaining and expanding existing ones in Amsterdam.

New or expanded businesses will create jobs and increase the City’s tax base (though many of the standard business attraction incentives limit tax base expansion for several years). This is a good strategy, but because economic development incentives are available almost everywhere, there must still be a reason for businesses to come to Amsterdam. High quality of life, that attracts and retains a talented workforce, is a necessary ingredient in today’s business attraction and retention strategies. However, in order to maintain and ultimately improve the City’s urban quality of life, it must reestablish a vibrant downtown, invest in neighborhoods, maintain the City parks and expand recreational opportunities, shore up the school system, etc. This is difficult for the City to accomplish without an increase in the tax base – a classic case of deciding, “which comes first, the chicken or the egg?” In reality, Amsterdam cannot focus on one or the other; both sides of the equation will require attention. (Page IV-3)

Next, the plan outlines four areas where Amsterdam faces challenges…

  1. Workforce – Only 12% of our adult population has a bachelor’s degree or higher
  2. Technology – Amsterdam lacks a strategic advantage to attract information based companies and professionals.
  3. Quality of Life – Despite some of our nice neighborhoods and parks, Amsterdam does not have a regional reputation for being an attractive place for professionals to relocate to.
  4. Diversity – Our Hispanic community continues to be isolated culturally and economically from the rest of the population.

Then, it presents 9 recommendations…

  1. Create a customer friendly business development process – a major part of this would be to create a single point of contact for new businesses to deal with which will aid them in getting assistance, information, and guide them to the services offered by other agencies such as AIDA or MCIDA.
  2. Establish a pro-active Economic Development Strategy for Amsterdam – in other words, identify what businesses we want to attract and then go after them, not just sit around and wait for them to come to us.
  3. Consolidate Information and Make Improvements to Physical Inventory – in other words, maintain an accurate database of information about all the properties we have to offer businesses, and make as many improvements as we can to what we have so that businesses can move in as quickly and inexpensively as possible.
  4. Place greater emphasis on Education and Workforce Development
  5. Maintain the City’s water and sewer infrastructure and promote this as an economic development resource
  6. Focus on business retention and expansion – here the plan suggests establishing an R&D center to aid existing businesses adopt new technology to help make them more competitive.
  7. Nurture the creation and growth of small businesses in the community
  8. Continue to Diversify the City’s Economic Base – in other words, make sure we have a variety of different types of businesses so that we aren’t putting all our eggs in one basket.
  9. Capitalize on the City’s Diversity

So where do we begin with all of this? Not only are each one of these recommendations major projects in themselves, the plan actually calls for all this to be done simultaneously with working on revitalizing downtown and improving our quality of life.  I think the first thing we must come to terms with is that we need more players in the game than just the local government.  I’ve felt for a while now that the business community needs to step up to take the lead in the area of economic development.

That feeling was strengthened for me just a few weeks ago while talking to a business owner in Saratoga Springs who is part of my networking group.  The subject of revitalization came up and she credited the progress made in her hometown of Ballston Spa in part to the Ballston Spa Professionals Association.  According to their website, the organization  “is a group of businesses and individuals working together to make Ballston Spa a great place to work, live and visit. The association works in conjunction with Village government and other groups to enhance our community.”  Here’s a very informative article about how the association got started and how it has been successful.  We also get a bit of history in this article and learn that Ballston Spa also used to be heavily invested in manufacturing jobs and has suffered in a similar way to Amsterdam. In this article from 1984, we see the early formation of the group and we can see how it was clearly an initiative started by the business community. Another good article about Ballston Spa revitalization can be found here.

Now Ballston Spa has some similarities to Amsterdam, but also has differences. It’s proximity to Saratoga Springs clearly influences it’s culture, and it seems to have targeted tourism and it’s downtown section as it’s main economic focus.  Having it’s historic downtown still intact is a great benefit, and Amsterdam would have to do alot more work in comparison to create something similar. But, I wouldn’t want to see our city solely focused on tourism as our economic engine anyway. The Comprehensive Plan calls for a diversified economy.

The core idea I believe we need to embrace, however, is to see that you don’t have to be an elected official in order to initiate a revitalization project.  I sometimes think that we have become so used to “big government” that we just naturally expect government to fix all our problems.  We sometimes forget that the government exists to serve and protect us.  You don’t need permission or a stamp of approval to start a project.  Coordination with government is only necessary if a project starts to require zoning changes, building permits, infrastructure changes, etc. 

And your project doesn’t have to be a large one either.  I like Flippin’s idea posted in the comments section of the last post…

I view large versus small [projects] not exclusively in dollars but in time and impact: why not find some projects that you can execute within 6 to 12 months that make a difference in their immediate area?

Visible, small, immediate wins generate some momentum to pursue larger, riskier projects.

Wouldn’t it be great to have multiple small groups made up of businesses and individuals working on different projects simultaneously, in coordination with local government?  If everyone is “plugged in” to the same larger plan (ie the Comprehensive Plan), then these projects should, hopefully, collectively make progress toward the larger goals and vision that the plan outlines.

I am hoping that this blog article might get the gears turning in a few people’s heads. It will take some brave souls to step forward who have a personal passion for an idea, the commitment to invest long-term, the skills to put together a team and a feasible plan that people can genuinely get behind.

Now I’ve always believed in the idea that “if you can suggest it, you can do it.”  I do have small project in mind that I believe will address several of the recommendations made by the Comprehensive Plan. In my next post, I will outline my initial idea and hopefully I’ll be able to followup with some of the action steps I take.

In the meantime, what do you think? Should the business community step up to lead Amsterdam’s economic development? Or do you think government is doing the job by itself  just fine?

  1. LucidDreamer says:

    Question 1 Yes the business community should step up, they’re proven success models within the county. The fact that they can survive this area speaks volumes. Maybe I understand you where we should have the business community guide prospects through the process of of joining the family here in amsterdam. My point is. How can they promote the area when the building stock available is in neglect, the infrastructure antiquated, high taxes and zoning hurdles Carl Lewis couldn’t clear. Everything the comprehensive plan suggests is exactly opposite of what exists.

    Question 2 Government isn’t doing a good job. I cannot articulate my thoughts on this out of respect for YOUR blog. Some would suggest that government is out to protect the consumer from big business but they haven’t got it right yet. Refer to Fanny and Freddy. Locally, we should be more inviting and less obtuse.

    Is a bridge the answer? I doubt it, as you suggest we need to start with the foundation not the curb appeal. A strong one will last forever, to me a vibrant and successful business community would be better at selling this project as they could build around it and incorporate it into a strategy for growth. Problem is that they aren’t even involved and there is no plan.

  2. Flippin says:

    You inspire some much needed thinking and discussion with this. A few comments:

    – I think discipline needs to be applied to establish priorities. Trying to accomplish 9 big things, while admittedly, interconnected is difficult; let’s choose 1 or 2 things with a 12 to 24 month window versus 9 things with a 10 to 20 year window. Speed matters.
    – There exists a tension with trying to create a new group(s) while working with existing groups. What is the differentiator of the new group versus existing? I pick on AIDA a lot but how do you work with an agency looking to possibly dissolve itself while touting itself as the answer to marketing the city unless of course you think it should be MCIDA? If you entwine yourself in such a web of relationships, your efforts will be futile.
    – IMHO the group(s) need to be disruptive to the status quo to be effective and successful.
    – I agree that this needs a higher emphasis from the private business sector.
    – A significant player in the process should be the school district whose board and administration see themselves as an island onto themselves totally removed from any responsibility or role in economic and community development. And a voter bloc who accepts this year after year. How do you redirect this ship from a private business group? I have no answer to this.
    – Chicken and egg is spot on: funding some public initiatives will require spending. If you look at the brouhaha for $20k for a Web site in 2010, imagine asking for $50k for a nominal pilot initiative for small business.

    • Tim Becker says:

      Thoughts on your comments…
      – Your first point makes sense if we are assuming that we have one leader working on 9 projects. But ideally we would have 9 leaders working on 9 projects. Maybe it will take 1 or 2 initially to inspire the rest though. That is very idealistic, I know.

      – I don’t think new and old groups need to be entwined necessarily. Coordination doesn’t have to mean inter-dependent. For instance, I think a business group could independently take a strong lead in marketing the city to new businesses. That would certainly disrupt the status quo and the new organization would be a new “gatekeeper” so to speak. Then, the organization could refer businesses to AIDA or MCIDA for the services and benefits they offer. As long as relations between groups are cordial and each knows what the other is doing, it would seem to me that everyone would stay happy.

      – A business group might not have a direct effect on the school district situation, but indirectly, if it suceeds in bringing professionals to the area, that may start to shake things up down the road.

    • LucidDreamer says:

      Your question of “differentiator” could have more than one variable. If the said new group shows progress or quite simply results, I think at that point it should force existing entities to raise the level of their productivity in order to obtain their funding. This can turn into a very lively dynamic with each trying to one up each other. And another point I might make is the (economy), this is another factor that could be subject of change. My thoughts are should either happen on the plus side the results would represent a win for the community as a whole. At this point I’d expect we can build momentum and maybe shed this negative image amsterdam has. I think both are directly related to short term projects, “effective” marketing and an upswing in the economy drive growth. If you are looking for a value for the differentiator one might off the cuff say progress.

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