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Resilient Economy | PC Draft

Vision: In 2040, Roanoke’s economy will continue its sustainable growth through the recruitment of diverse industries, revitalization of underperforming commercial spaces, support for small and local businesses, and its continued partnerships with strong regional and national players. 

Our economy will be one that builds on a strong collaboration between private businesses, non-profits, local government, and educational partners in order to develop a strong, skilled workforce across all ages, skill levels, and backgrounds that meets current and future employment needs and provides for good paying jobs. These critical stakeholders will value, support, and celebrate each other’s successes.

Introduction

A key measure of prosperity is opportunity; Roanoke’s residents should have access to opportunities for meaningful careers at all skill levels and for good wages. The economy of the City operates primarily through private enterprise, but there are roles the City can play in creating the environment that facilitates new economic growth.  Private employers make decisions for location and growth within our region, but there are ways the City can positively influence these decision makers. This theme provides a set of priorities, policies and actions that stakeholders, including the City, can implement to achieve positive economic growth that benefits all of our citizens.

Background

Roanoke is the ideal place for people to live, work, play and do business. As the Southwestern Virginia Region’s economic hub, Roanoke gains many advantages from its economic, cultural and social gravity. Combined with the beauty and draw of its scenic outdoors, business representatives around the world are noticing Roanoke’s low cost of living, coupled with outstanding amenities and a business friendly environment. Still, there are actions that need to be taken in order to ensure that our economy remains competitive in the future. With technological advancements accelerating at increasing speeds, economies around the world will be competing to keep pace. This is no different for our own local economy.

The City of Roanoke’s economy is well positioned to continue to prosper for decades to come, but in a rapidly changing world, we can no longer rely on the same models that got us here. In the few years leading up to this planning process, Norfolk and Southern, which employed hundreds of people from across our region, announced that it would be transitioning well-paying jobs to other offices outside of our area. Advance Auto Parts, a major local employer, expanded in other markets, settling on greener pastures outside of the place where it was founded. Public and private institutions across Virginia are experiencing the effects of the state fiscal issues. In addition, formerly reliable sources of local tax revenue, including the sales tax, appear to be in decline (in the case of the sales tax, due to seismic shifts happening in the retail sector as more sales are conducted online). As our need for proactive economic development is growing, the entire landscape of economic development is shifting. With the ability to conduct business anywhere, through technological advances in remote working and virtual meetings, today’s economic development requires more than tax cuts and incentives. Quality of place is at the forefront of both businesses’ and workers’ minds as they decide where to locate.

In recognition of these challenges, City Staff, along with the input of numerous stakeholders, local business organizations and other members of the community, strategized six key priorities that will help ensure that the economy of Roanoke continues to grow and will support all members of our community in the years to come. Within each of these overarching priorities, are both policies, and more detailed action items, which will ensure that there are measurable milestones and accountability built into this plan.

Priority One: Promote Broad Diversity in the Economy

The resiliency of the regional economy is benefited by a diversity of industry that helps to insulate the effects of downturns in the global economy or disruptions to specific industries. Diversification of an economy means that if one business fails, the effect on the overall economy within the region can be minimized.  Without a diversity of industry, global downturns and industry disruptions can have severe consequences for localities that have “put too many eggs into one basket.”

Throughout history, we have seen neighboring localities experience the harsh realities of relying too heavily on specific sectors of their economies (textiles, furniture, manufacturing, etc.). Fortunately for Roanoke, the decline in manufacturing, which at one time employed over half of the population, was more gradual. Manufacturing was progressively replaced by a strong service industry of professionals including healthcare, law offices, architecture firms, engineers, bankers, and insurance agencies. More recently, Roanoke has become a hub for innovation and technology, most specifically in the field of healthcare research through a partnership between Carillion Clinic and Virginia Tech.

One of the primary benefits of diversification is that a diversified economy helps support multiple business sectors within it. For example, large office buildings require office supply stores, construction companies require lumberyards and wholesalers, local grocery stores require agricultural producers and other home goods suppliers, etc. A diversified economy creates a sustainable cycle of economic activity where businesses continually feed off one another and grow larger as the entire economy grows.

The policies and actions that are highlighted below will help the City to remain focused recruiting and promoting business across all industry sectors in order to promote the resiliency of our City.

Action Items:

  • Analyze the industry segmented location quotients of Roanoke and compare them to other economic centers of relative size
  • Create a Comprehensive Economic Development Plan that will work with regional partners to identify target industries and businesses, identify current best practices for recruitment, retention, and outline a strategy for their implementation
  • Explore new business location technologies, such as multimedia or map-based web services, that can easily provide information to the business and development community on available sites and developable areas
  • Designate a lead agency to coordinate programs, resources, and planning for development of technology businesses
  • Create a web site that promotes Roanoke to technology companies including information about available space, communication infrastructure, and links to other technology resources

Action Items:

  • Promote and market Roanoke’s cultural, historic, recreational, educational, transportation and environmental assets

Action Items:

  • Support co-locating facilities and incubator spaces that enable sharing of space and facilities to stimulate local business and entrepreneurship
  • Promote and Sponsor events or award competitions that encourage development of new technology, governance and engagement methods
  • Engage businesses to understand the support resources needed in order to expand operations and employment

Action Items:

  • Ensure transportation infrastructure is maintained to provide a high level of mobility to support business activity, such as efficient movement of both products and employees into and out of our region
  • Support the Roanoke-Blacksburg Regional Airport master plan
  • Develop competitive fiber-optic networks in the Region
  • Provide entrepreneurial support for small businesses
  • Support a business networking community

Action Items:

  • Allow for and encourage experimentation and innovation – including potential changes to City policies and practices – consistent with City goals and priorities of the Innovation Corridor, including development, sustainability, job creation, entrepreneurship,  and equity
  • Support innovative approaches to energy efficiency, parking, transportation, construction, and redevelopment
  • Support new development and redevelopment opportunities that align with and enhance the Innovation Corridor’s initiatives, including, housing, sustainable infrastructure, creation or preservation of green space, and job creation initiatives
  • Support Innovation Corridor approaches to energy, storm water management, parking management, and waste management

Priority Two: Establish Stronger Economic Ties to Our Regional Partners

Map of Roanoke Region including surrounding counties

Roanoke Regional Map

Economic development is inherently a regional enterprise. The City of Roanoke is one of many active participants in the Roanoke Regional Partnership and an active member of the Virginia Economic Development Partnership (VEDP). The Roanoke Region of the VEDP is in the midst of the Blue Ridge and Allegheny Mountains and serves as the transportation hub of the area, with an integrated interstate highway, rail, and air transportation network. The Roanoke metropolitan area serves as the medical center for the region and Southwest Virginia. Anchored by Carilion Clinic, one of the largest health care companies in Virginia and the region’s largest employer. The life science sector is one of Roanoke’s strongest clusters, and residents have access to leading-edge medical care.

Roanoke is also the cultural and recreational hub, boasting the Roanoke Symphony Orchestra and museums like the renowned Taubman Museum of Art, Center in the Square in the midst of the open-air farmers’ market downtown, and the Virginia Museum of Transportation.

More than 100,000 undergraduate and graduate students are educated each year from 25 higher education institutions located within an hour’s drive, including Virginia Tech, Roanoke College, and Virginia Western Community College. These education centers are important for the region as it looks to build up its workforce for the skills and technical expertise of tomorrow.

As a true recreation destination, Roanoke’s burgeoning outdoor industry thrives from assets such as the nearby Appalachian Trail, James River, Blue Ridge Parkway – the most visited national park in the U.S. – and Smith Mountain Lake, Virginia’s largest lake.

While the City is the main economic engine driving the region’s economy, regional benefits are derived through regional cooperation among the Valley’s local governments. In order for the Region to build on its economic successes, policies and actions have been recommended below in order to bolster the work that has already been done.

Action Items:

  • Support the Comprehensive Economic Development Strategy framework of roles and responsibilities
  • Implement a customer relationship management tool to ensure development and maintenance of relationships with regional developers, brokers, site selectors and state and regional organizations
  • Host forums with developers, brokers and other target audiences in order to promote the region and discuss regional development strategy

Action Items:

  • Form stronger collaborative economic development partnerships involving leaders from both the public and private sectors that encourage companies, colleges, and secondary schools to work together
  • Support the informal regional and institutional networks, such as university alumni associations, to aid in facilitating knowledge transfer and networking opportunities

Action Items:

  • Identify areas for tourism, such as the Downtown Roanoke Tourism Zone, to provide incentives that attract investments and private companies in these areas
  • Support Visit Virginia’s Blue Ridge’s efforts to attract additional conferences to the City
  • Work with Visit Virginia’s Blue Ridge to support and promote local businesses in marketing efforts
  • Encourage development of Downtown lodging and construction of new hotels in order to support the growth of events, conferences, and tourism
    • Promote community events as economic opportunities and aspects of community identity

Priority Three: Conversion of Underperforming Commercial and Industrial Areas

As commercial and industrial developments around the City age and near the end of their useful life, the City of Roanoke needs to be prepared to usher in new uses and incentivize redevelopment of these properties. When properties remain abandoned and derelict, for even short periods of time, they can have negative impacts on the surrounding property values and drive other businesses away from the area, creating entire neighborhoods of blight.

In some areas of the City, there exists pockets of too much commercial and industrially zoned property. This can be seen by the exceedingly low prices of this land use in certain areas of the City, which in turn leads to passive uses of these particular properties. These uses are often unsightly, create environmental damage, and reduce the value of adjacent properties. These uses include used car lots and junk yards, outdoor storage lots, bulk landscaping wholesalers, tow and wrecker yards, etc. These uses are also generally characterized by large swaths of land being paved or illegally graveled, resulting in intense pressure on storm water systems in these areas.

In order for the City to turn some of these areas around and create opportunity out of otherwise properties in decline, Staff has recommended the following policies and actions to respond to this concern.

Action Items:

  • Create partnerships with private redevelopment entities to plan and implement redevelopment strategies
  • Support development of a land bank and land trust to acquire and convert property to productive uses
  • Identify and approach landowners in underperforming commercial areas and pursue partnerships to facilitate redevelopment
  • Create an inventory of areas warranting acquisition and redevelopment during the neighborhood/area planning process
  • Use brownfields grants and other resources to clean up these sites if needed
  • Avoid adding to the oversupply of general commercial and industrial land and closely scrutinize land use requests that add to the supply of such zones
  • Prioritize support for businesses identified as potential regional industry clusters
  • Conduct regular reassessments of local enterprise zone designations and the package of incentives provided to maximize geographic impact and economic benefit
  • Implement an Opportunity Zone Strategy Plan and Prospectus
  • Locate trade schools, workforce  training centers, and other employment services within and adjacent to neighborhoods where they are needed
  • Create a toolkit for incentivizing redevelopment of failed commercial properties ripe for redevelopment

Action Items:

  • Explore real estate tax models that use land value or a combination of land and building values to promote smart growth tactics, prevent land speculation, discourage derelict properties, and encourage rehabilitation and redevelopment
  • Continue to encourage revitalization of commercial corridors through major streetscape improvements, landscaping, formal open spaces, and transportation network connectivity
  • Continue to accelerate redevelopment activity along commercial corridors through performance-based incentives such as, Job Creation Incentives, Rehabilitation Incentives, Demolition Assistance Program, Beautification Grants, ground breaking/grand opening ceremonies, and public announcements that allow our citizens to recognize the economic growth within the City
  • Emphasize Corridor Planning as part of the neighborhood planning process

Action Items:

  • Remove the ability to request land consumptive, passive uses from the City’s commercial areas, particularly along commercial corridors
  • Encourage more neighborhood commercial zoning around targeted “village centers” that is compatible with the City of Roanoke’s character and vision
  • Examine parking requirements attached with zoning use classifications in order to reduce the amount of unused parking
  • Revisit the individual purpose statements of the Multiple-purpose Districts in the Zoning Ordinance

Priority Four: Local Business Development

When it comes to local economic benefit, not all business activity is created equal. Locally-owned and managed businesses have more community benefit because of how money cycles through the local economy due to multiplier effects. Nearly all of a local retailer’s economic activity stays local in the form of payroll and profits.  With a national retail chain, only the front line and supervisory payroll stays in the community.  The upper management payroll and all profits stream out of the community.  Furthermore, the purchasing power and predatory business practices of large retail chains has proven to be devastating for local economies and often fatal to small local businesses. Therefore, it is imperative for economic development efforts toward spurring a renaissance of unique local businesses.

Action Items:

  • Provide special outreach and education for local business owners about resources including incentives, façade grants, partnership opportunities, etc.
  • Create a guidebook or website for small business owners with clear, simple explanations of how to navigate permitting, licensing, and regulatory processes, with relevant contact information
  • Favor local growth over recruitment efforts and incentives aimed toward drawing national or large-region chains
  • Work with strategic partners to create and enhance business networking programs, including regular roundtables for local businesses
  • Implement a robust business visitation program, complete with strategic goals and objectives, roles, responsibilities and performance metrics, for the specific purpose of encouraging local business growth
  • Develop a strong year round local shopping campaign that encourages residents to shop in the City, particularly downtown, and highlights the opportunities, choices, and value of shopping locally
  • Support businesses with efforts in import substitution, meaning that if a vital resource can be manufactured in the City, instead of being imported from elsewhere, there should be support for the business to expand operations to begin manufacturing that component themselves

Action Items:

  • Prioritize/Incentivize/provide additional points for local businesses when contracting purchasing agreements/government acquisition
  • Incentive purchases from both minority and women owned businesses in local government contracts

Action Items:

  • Provide details on available resources for business recovery and strive to provide the information in multiple languages
  • Use lessons learned to prepare for sudden disruptions due to a variety of causes

Priority Five: Align Economic Development with Workforce Development Systems

Better alignment between economic development and workforce development systems is critical to the future of our local economy. The economic development system is designed to encourage business and job growth, while the workforce development system works to ensure individuals have the education, skills, and training needed to obtain jobs. When the two systems are aligned, job seekers receive training and skill development that employers demand—resulting in higher wages and career advancement—and employers have access to a skilled workforce that enables growth and increased productivity. Beyond benefiting employees and employers, a functional and aligned system has economic benefits to the broader community.

Research indicates that regional economic growth is dependent upon human capital (development and attraction) and innovation. Some observers argue that the focus should be on policies aimed at the attraction and retention of educated workers, while others emphasize increased alignment of economic development and workforce development systems as a way to encourage the skilling up of local populations and the inclusion of populations left out of the traditional economy. The two are not mutually exclusive, nor is the call for greater alignment a new phenomenon. Below are some of the ways that the City can continue progressing toward the alignment of economic development and the local workforce development system.

Action Items:

  • Use cluster analysis to identify strengths and weaknesses within the region’s workforce
  • Use innovative strategies to develop and connect qualified talent with the specialized needs of employers
  • Work with the Roanoke Regional Partnership to connect young professionals and interns with emerging businesses to enhance recruitment efforts, skills, and knowledge in the city
  • Create “Centers of Excellence” where businesses and industry experts can collaborate with educators to become teachers and workforce training leaders
  • Facilitate cross-organizational projects to provide best practices for workforce training
  • Support training for those who have lost jobs due to automation, outsourcing, and other measures

Priority Six: Support Local Community Development

It is vital that the City continue to support community partners that provide programs and outreach to the community, especially to low-income neighborhoods. These programs exist to help support financial literacy, help fund affordable housing, and develop healthy food initiatives. These initiatives help to provide stability to low-income communities, which in turn, allows for greater economic mobility. In principle, if constituents are less occupied by where their next meal may come from, it could allow them the time and resources to open a new business or go back to school for a better paying job.

Action Items:

  • Provide funding to organizations as partners in providing critical community services
  • Expand business resources and partnerships with community organization to maximize the benefit of public funding
  • Support financial empowerment centers and other community financial education centers in the City

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