How Economic Development affects Effective Planning

Mayor Dennis Doyle (Photo credit: Wikipedia)

In my last couple of posts, I talked about the efforts of many cities to create economic development by inciting corporations with subsidies to locate. Today, I am going to talk about how corporations influence public policy and can have a detrimental effect on effective public planning.

I also mentioned in the first posting of last week that often times companies will relocated such as Sears Holdings moving from downtown Chicago out to the suburbs through government subsidies creating a situation where the new location is poorly accessed by transit by its poor location. Further when one set of subsidies expire the corporations will often come back demand more and threaten to move if they do not get what they want. The problem is these major national/multi-national corporations do not care about the cities and will go where they get the biggest subsidies.

Now lets take a look at how these issues can affect effective planning by using the example of Nike.

Nike is located in Washington County, Oregon near the city of Beaverton. Like many corporate campuses it was designed around the automobile and transit access is near impossible as can be seen in this Google map image:


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There is bus service along Murray Blvd to the east, and as you can see in the map it is relatively close to a MAX light rail station. Looking at the map you can see a forested area that extends from the south of Jenkins Road to the MAX Blue Line. This property is owned by NIKE and it was proposed that they would extended their headquarters across Jenkins to that piece of land.

However according to the urban plan because it is located at a MAX station it needed to include housing and two new roads needed to be built to better access the site. In addition the city of Beaverton tried to annex the site which affects Beaverton because the traffic created by Nike has to be solved by the city of Beaverton.

Nike responded by filing a lawsuit against the city of Beaverton to prevent the annexation so that they would not face paying higher city taxes. This shows another problem with these relocations (while NIKE was not relocated it provides a good example), that a company will get subsidies to move outside city limits so they pay less in taxes but the nearby cities often end up subsidizing the roads in order to get the workers to the new building.

In addition NIKE started lobbying state senators and legislatures to help solve their problem for them and Charley Ringo a State Senator from Washington County was more than happy to obliged fearing that NIKE would pull up states and leave and despite being a member of the Sierra Club drafted legislation that forbid the city of Beaverton to annex the area for 50 years. That's right for two generations nothing can be done to enforce the plan that was previously created to make the area more transit friendly and ensure that Transit Oriented Development is put in by the MAX station.

In addition after the legislature of the state of Oregon dictated what the city could do for the next 50 years, NIKE tried to influence the next election for Beaverton mayor by donating and promoting heavily the person running against the current mayor who they declared was not "business friendly".

It is hard enough to get good development done, situations like this make it even harder and do nothing to build a better community. While giving subsidies to major/multi-national corporations may be a short term solution to economic development, in the long run working to build a local economy that has a stake in the community does more than throwing millions out the door.

I am not saying NIKE is a bad company, however they are looking at their own self interest. The people that should have been looking out for the best interest of the community such as State Senator Charley Ringo who interesting enough did not run for reelection the following year should have considered not only what NIKE wanted by what was in the long term best interest of the community as a whole.

Related articles

• Economic Development: Benefit or Black Hole?