An example is the plethora of cities that rely on offering tax breaks and free land to potential employers. While such enticements can certainly be valuable tools and tactics, mistaking them for a strategy is like thinking one can build a house with nothing more than a hammer.

This column revealed the problems with that approach in the September/October 2009 issue of ReNew Canada. Here, I’ll get into some quick and easy ways to spot other unreliable approaches to community regeneration.

There are four primary indicators:

1. Is it based primarily on renewing your community’s existing assets?
2. Does it integrate the renewal 
of your natural, built, and 
socioeconomic environments?
3. Does it effectively engage all the stakeholders who should be involved 
in the revitalization, or who will be affected by it?
4. Does it build the community’s renewal capacity, and create an ongoing revitalization program?

The more of the above questions to which you answer no, the more likely the approach is snake oil. The following can be considered your snake oil checklist.

ASSET RENEWAL One can certainly grow an economy based on unsustainable sprawl and virgin resource extraction. But that approach eventually undermines quality of life and environmental health, and the definition of revitalization is “economic growth that increases both quality of life and environmental health.” So, sprawl-based growth that destroys green space, creates traffic and pollution, and devitalizes the heart of a place obviously can’t produce revitalization.

INTEGRATION People and organizations tend to focus on their existing passions and expertise. So, environmentalists tell us that community renewal is all about green space, energy efficiency, and the restoration of watersheds, fisheries, ecosystems and farmland. Planners tell us revitalization is all about planning. Architects say revitalization is all about design, and so on. Revitalization is about addressing all of those restorable assets. Relying on just one or a few of those silos, whether it’s civil engineers, businessmen or artists, isn’t a sure path to failure, but it’s a dangerous one. Prescribing the same subset of those factors for every community—despite each place’s differing dreams and challenges—is the purest form of snake oil.

ENGAGEMENT Top-down revitalization is fraught with failure, but it’s still widely practiced. Mayors and planners now “engage” the community in their plans via public hearings, but this is often just lip service. Some make honest attempts to engage, but do it badly, ending in analysis paralysis. A charrette may lock them into a bad design, scaring off redevelopers. Sometimes, the top-down approach works, such as the magnificent Cheonggyecheon stream restoration in downtown Seoul. But the typical outcome of top-down renewal is needless destruction of heritage (such as New Urbanist projects that take a clean-slate approach), preventable lawsuits, protests, and ejected politicians.

RENEWAL CAPACITY Renewal capacity is the community’s ability to initiate and perpetuate its revitalization, as opposed to the reactive mode of many communities: waiting for new federal or provincial funding, or for a private redeveloper. Even communities that plan effectively often put little effort into enhancing their ability to implement and fund those plans. They need an ongoing revitalization process, not a disconnected series of projects. Investment is attracted by confidence. If a public agency or a private redeveloper believes an area will soon revitalize, they will anticipate a safer and higher return on their investment (no matter whether the motivation is private profit or public good). The most reliable confidence producer is a permanent revitalization program that produces an ongoing flow of successful projects and the best way to create such rapid, resilient renewal is a community organization dubbed a “renewal engine” (see my past columns).

Politicians like simplistic approaches that can be communicated in sound bites. They also like initiatives that sound great, but are so hard to measure that their failure can never be documented. They also like doing what other cities do, such as spending money on a new—but never implemented—plan every five years, or announcing “green,” “innovative” and other trendy-but-hard-to-quantify strategies.

The above four-point checklist can be useful in saving your community from well-meaning professionals and institutions who are—usually unknowingly—peddling bottles of rejuvenating snake oil.

Baltimore’s Inner Harbor Project recently won a ULI award for community revitalization. (credit: Storm Cunningham)

In the early 1970s, I was a medic on a scuba team in the United States Army’s 7th Special Forces Group.

The 7th SF was, and is, based at Fort Bragg, North Carolina. Our immediate neighbour on the base was the famed 82nd Airborne Division. The 82^nd was going through a rough patch at that time. They were known as the “jumping junkies,” a reference to both their method of insertion and their problematic recreational practices.

The Pentagon studied the situation and determined that we were the problem. The 82^nd is an elite outfit, but they were next door to the elite outfit. The Pentagon addressed the problem by issuing the 82nd maroon berets. The new hats boosted egos at the 82^nd, so the Pentagon showered a rainbow of berets throughout the Army. Not surprisingly, the green ones remained elite, and all others (including maroon) became meaningless.

The Army bought a solution in the form of new hats, rather than establishing an ongoing process for fixing the 82^nd’s organization.

And so it is with many cities’ approaches to regeneration. Leaders try to shortcut sound revitalization processes by buying a product that will magically bring the city—or a dead portion of it—back to life. It could be a sports stadium, a convention center, an aquarium, an arts district, or whatever the fad of the moment is. It’s the “consumer approach” to revitalization, often resulting in expensive, embarrassing redevelopment failures.

These cities are often motivated by observing other cities that have built such structures and achieved dramatic turnarounds. They ignore the city’s internal process, and focus instead on the external manifestation (product) of the process.

My column in the January/February 2008 issue of ReNew Canada revealed how Chattanooga, Tennessee and Bilbao, Spain pioneered a revolutionary “community technology:” an organizational structure for housing, funding, and perpetuating revitalization efforts. At Resolution Fund, we refer to this model as a “renewal engine” because it manufactures a constant flow of renewal partnerships. Let’s revisit those two cities, and add two more: Baltimore, Maryland and Memphis, Tennessee.

In 1991, Memphis built a sports venue in the form of a huge glass pyramid. Memphis was inspired by Baltimore’s Inner Harbor, with its angular National Aquarium (built in 1981).  Chattanooga was also inspired by Baltimore when it opened the world’s largest freshwater aquarium in 1992. Bilbao opened their Frank Gehry-designed Guggenheim Museum in 1997. These four projects have at least three things in common: all were begun in highly-distressed post-industrial economies; all are iconic buildings on waterfront brownfield sites; and all were public-private partnerships.

Those waterfront projects in Baltimore, Chattanooga, and Bilbao are now world-renowned symbols of revitalization success.

Memphis’ pyramid is now a highly visible emblem of revitalization failure.

I was in Baltimore this October attending the ceremony for the Urban Land Institute’s (ULI) Heritage Award. It goes to redevelopment projects that have thrived for at least a generation and, this year, it was presented to the city’s Inner Harbor revitalization project—it’s still picking up steam a quarter century later.

ULI points to three key lessons of the Inner Harbor’s success: activity-based redevelopment, achieving critical mass, and strategic public investment to spur private investment. To those I would add the site itself: a waterfront brownfield. Combining water’s unique ability to attract people with the miracle of bringing dead properties back to life is powerful magic.

Chattanooga and Bilbao both had renewal engines, and Baltimore practiced most of the key functions of a renewal engine. Memphis had no such thing. All they had was a building, not a process.

The Memphis pyramid was a mild success as a sports venue, but it never succeeded at bringing the waterfront back to life. So when the pyramid was mothballed in 2004, it was a white elephant in the middle of a desolate wasteland. This made finding a viable new purpose far more difficult than if it were a white elephant in the middle of a vibrant waterfront. Meanwhile, on the other side of Tennessee in Chattanooga, Volkswagen is building a new $1 billion factory on a waterfront brownfield.

Besides not having a renewal engine to drive the waterfront’s—and the city’s—ongoing revitalization, Memphis didn’t even have a shared vision for their waterfront’s future. The city has a lot of company in forgetting that a project implements a plan, a plan implements a strategy, and a strategy implements a vision. Without that shared vision, everything is built on sand. Many communities spend a lot on planning, but nothing on visioning. Asking planners to plan without a vision is planner abuse. It’s not their job to come up with a vision for your future.

Communities are increasingly doing visioning sessions, but most don’t produce a vision statement that effectively guides future decision-making. They also don’t ensure that future projects effectively reference that vision. Such visioning events can build stakeholder cohesion, but not much else.

Building iconic buildings on waterfront brownfields via public-private partnerships is a powerful, proven approach. To replicate the successes of Baltimore, Chattanooga, and Bilbao, focus on the recipe. To replicate Memphis’ failure, focus on the cake. Process, not product.

Don’t fall for what former Winnipeg mayor Glen Murray refers to as “irritable Bilbao syndrome”—the tendency of cities to believe architects’ propaganda that it’s their buildings that revitalize cities. If you must build something right away, build a renewal engine. Otherwise, you’ll just be trying to boost your spirits by buying a new hat. 

It makes sense in theory, but seldom in reality. In fact, it’s backwards: one best attracts quality employers by first renewing one’s assets and quality of life.

These backwards tactics result in a vicious circle. Communities steal employers from one another by giving away years—or even decades—of tax revenues (and sometimes even free land), and they call it economic development. Each win by one community makes the losing community even more desperate, and the battle intensifies.

It’s a zero-sum game: jobs are merely shuffled from one community to another. Yet the communities, the provinces, and the federal government all call it job growth, when in fact it undermines local budgets, and tends to attract employers who are only there for the freebies. They often leave as soon as the giveaways run out, or when another desperate place makes them a better offer. What’s more, land giveaways usually result in sprawl-type growth, which undermines quality of life by reducing greenspace, increasing traffic, and hollowing out historic town centres.

While the winning community may get a temporary boost in employment, the province and nation get nothing at all. Worse, as a result of these ill-considered tax breaks, city budgets often go into the red, forcing the province or feds to bail them out. This so-called revitalization actually drives nations further into economic crisis.

Of course, this dynamic is more pronounced in the United States, where communities have more taxing authority than their Canadian counterparts.

But many Canadian communities do have some taxing authority. Some have municipal levies (on water or garbage services, for instance); some have property taxes based on the assessed value of the homes. Winnipeg has a tax on every operating business. Mississauga even has a one per cent levy on infrastructure. Toronto has local land transfer taxes and the Province of Alberta doesn’t even have a provincial tax—it’s all municipal.

Despite this generally lower level of local autonomy, Canadian communities do find ways to play the incentives game.

It’s not that such incentives to attract businesses are never a good idea: sometimes they’re essential. The problem arises when they are the major—even the entire—basis of the city’s sales pitch. When that’s the case, the only winner seems to be the corporation, although even they often end up unhappy with the quality of life in such communities.

Such superficial, self-destructive strategies inspire little confidence. Confidence in a community’s future is the single most important factor in creating rapid, resilient renewal. And the best way to inspire confidence is by building the community’s renewal capacity.

Communities that have perpetuated their economic growth and increased their quality of life over an extended period have usually used the opposite approach: they enhanced their quality of life first, and that attracted the employers and redevelopers. Even better, this forwards strategy attracts loyal employers who actually want to be there.

Cases of ailing communities bouncing back to become global models of revitalization, often without offering any tax incentives or free land to employers, have been well-documented. So why do communities continue to do it backwards?

It’s partly because local leaders think tax breaks are the only thing they have to offer.  Unfortunately, few communities have a variety of tools and strategies from which to choose. As a result, they rely on such obsolete, largely discredited tactics.

But it’s mostly because they don’t have sufficient renewal capacity, the ability to initiate and perpetuate revitalization, even in the face of credit crunches, changes of political administration and other challenges.

The good news is that those back-from-the-dead success stories all tended to have several things in common, and those factors have been previously documented in this column. This means that their success is replicable. Not every community can compete on price (such as tax breaks), but all can restore their natural, built, and socioeconomic assets—even those located in hard-to-reach or resource-poor areas. Communities can lose their industries, suffer from severe crime problems, and still become global models of social, environmental, and economic rebirth (witness Chattanooga, Tennessee).

Barriers to this renewal can be water or timing.

Watersheds can be restored, waterfronts can be revitalized, buried streams can be daylighted, and even aquifers can be cleaned and recharged, but the chances of revitalization are greatly diminished if restorable water resources simply don’t exist.

And while almost all communities with access to water can be revitalized, now might not be the time for that revitalization. Revitalization means “economic growth that enhances quality of life and environmental health.” By that definition, a community doesn’t need to be in distress to be a revitalization candidate: it must simply desire a better economy, more quality of life, and greater environmental health.

But humans are creatures of crisis. We tend to resist change when we’re comfortable. In fact, we tend to wait until we are desperate before altering our behaviour. Thus, the right time for revitalization is sometimes dictated by the level of discomfort.

My work primarily focuses on helping communities enhance their renewal capacity, so they can switch from backward to forward revitalization. Our workshops motivate revitalizing behaviour, even in the face of stupefying comfort. But if citizens are already uncomfortable—or better yet, desperate—our job is that much easier.

Putting a restoration, remediation, or adaptive reuse project in a city that’s just started its socioeconomic ebb means that the city’s declining fortunes will likely drag down the return on investment (ROI) of the project.  Put a good project in a city that’s entering a revitalizing trajectory-or that will perpetuate their existing renewal-and your property values will ride a rising tide. Boom or gloom: that’s what investors need to know.

March-April 2009’s StormWatch column issue introduced the idea that communities can have an RQ (renewal quotient), just as individuals have an IQ (intelligence quotient). The free RQ Quiz for citizens is now online.

The far more rigorous RQ Test for community leaders is being created in collaboration with a learning network of 20 communities from around the world (recruitment is currently underway: the first Canadian city agreed to enroll in June of 2009).

Now Revitalization Institute (of which I am executive director) is announcing an upcoming community forecasting service called Places To Invest (PTI). It will tell investors which communities are most likely to be on a revitalizing trajectory in the coming decade.

By revitalizing trajectory, I mean economic growth that increases quality of life and improves environmental health (many forms of economic growth do the opposite). In other words, rewealth: wealth-creation based in renewing a community’s natural, built, and socioeconomic assets. This is as opposed to dewealth, which is wealth-creation based on developing raw land and depleting virgin resources.

PTI reports will be driven by the score that communities achieve on the RQ Test. The RQ Test will be offered free of charge as an educational service. Communities can test themselves and learn a reliable recipe for rapid, resilient renewal in the process. If communities wish to have their scores publicized, there will be a modest charge for certifying their scores to ensure accuracy.

The scores will be available to PTI subscribers via an online database.  An annual Top 10 Places To Invest list will also be issued to the news media.There’s no shortage of annual rankings of cities: greenest, most sustainable, most livable, most walkable, most creative, fast cities, most business-friendly, and so on. But there are two problems with such lists.

The first problem is that few of these lists have a sound basis: most are created more for entertainment than as a tool for serious decision-making. A few derive from government data, but many are just the product of a single reporter, using his/her own judgment and preferences.

The second problem is that all of these lists are snapshots of the present or recent past.  This has some value, but families or businesses looking to relocate are going to live in their new community in the future, not the past. More important to them is where that community’s economy and quality of life are going in the coming decade. No one ever made money on the past. Investors don’t care as much about the current condition of an asset as they do about what it will be worth in the future.

The PTI list, on the other hand, is predictive. It’s a community forecasting tool for private and public investors, as well as for families and businesses looking for an up-and-coming places for relocation. The word forecast is used here with caution. As with weather forecasts, no one expects them to be 100 per cent accurate. In fact, people aren’t surprised when they are completely wrong.  But we check the weather forecast daily nonetheless, because some indicator is better than none.

So it will be with PTI. The top-scoring communities will, in fact, have a much better chance of revitalizing in the near future. But this doesn’t mean that external factors can’t render their efforts moot.

What’s more, communities are complex adaptive systems. They exhibit surprising behavior by their very nature. Forecasting their future might thus seem an exercise in frustration, but PTI has a significant advantage-it’s based on seven universal factors that a six-year global research effort revealed to be reliable indicators of rapid, resilient renewal.

The renewal quotient of a community is a numerical measure (from -500 to +1000) of its renewal capacity. Renewal capacity is the community’s ability to initiate revitalization despite initially empty public coffers, and keep it on track despite changing political administrations. Renewal capacity attracts restorative investment by providing greater safety and ROI to the private sector.

This is as opposed to the usual reactive mode of many communities. They wait for federal or provincial funds to arrive; they wait for a large private redeveloper to come to town; or, they indulge in that outdated, zero-sum “economic development” game of wooing employers from their neighboring communities and calling it “job creation.”

The RQ Test (which is the mechanism behind the PTI scores) is being devised by a growing global team of universities, non profits, redevelopers, technology partners, and planners being recruited during 2009. They will develop both the RQ Test and the PTI service over a two-year development period during 2010 and 2011.

This RQ Task Team will work in collaboration with the above-mentioned Advance Group of 20 communities. The Advance Group communities will be the first to take the RQ Test. Those that achieve a sufficiently high score will be listing in the inaugural 2012 Places To Invest report.

Blameworthy candidates all, but individuals didn’t cause this mess: the system as a whole is fundamentally flawed. We need more than Band-Aids on our banking boo-boos.

At least US$2 trillion (including World Bank and International Monetary Fund contributions) will be spent globally in coming years to revitalize economies. That amount of money could restructure the entire system, not just goose it—and Canada is perfectly positioned to lead the way. But before we discuss the solution, let’s make sure we understand the problem.

Laissez-faire capitalism is getting no small amount of blame for our current woes. It arose from Adam Smith’s concept of the “invisible hand.” Smith was fully aware that his magical hand had no basis in reality; he invented it to cure a specific problem. When his book, The Wealth of Nations, was published, the British government (royalty, aristocracy, and Church of England) was choking entrepreneurs and economic growth. Smith realized he must grossly exaggerate his case in order to make an impact, thus his invention-in the hyper-religious milieu of late 1700s-of a godlike, metaphysical “hand” of the free market that transformed greed into public service. No matter how self-interested a business transaction, society would come out the better for it. So, no need for government to protect the people from rapacious business practices.

Smith would never for a moment have believed that educated people would come to believe his rhetorical fiction so wholeheartedly. But most of what he wrote was right. He focused on the value-adding efficiencies of specialized production, with a heavy emphasis on manufacturing. There wasn’t much on how the structure and function of our communities added to economic health, but he couldn’t cover everything, and planning wasn’t even a profession at the time.

But what wasn’t evident to Smith in 1776 was that he was taking the basis of Britain’s wealth creation for granted: fossil resources and ecosystem services.

Now, fossil fuels are killing our economy and its waste products are killing us. Fossil top soils are mostly gone, and fossil aquifers are turning into sinkholes.

The situation sounds hopeless, but the solution is already here. The ideal solution is to create wealth from undoing that damage, restoring the underlying basis of wealth. This economic shift from dewealth to rewealth involves renewing infrastructure, remediating brownfields, restoring heritage structures, and replenishing natural resources.

This restoration economy isn’t just an idea; it’s a $2 trillion per year reality. In the United States alone, over $17 billion has been invested in over 40,000 river restoration projects since 1990. Most older cities already rely on rewealth for 80 per cent or more of their economic growth.

For the past two decades, the dewealth-rewealth shift has been inexorable, but incremental. Now, however, it has reached a potential tipping point. The new stimulus funds can make rewealth the economic policy default, and dewealth the exception, fixing our economy’s basic problem.

A healthy portion of the US$789-billion stimulus package is focused on renewing infrastructure, as well as restoring wetlands and rivers. A $9-billion provincial investment in Toronto’s infrastructure is also focused on renewal. But both still contain significant dewealth components. Without formally embedding this dewealth-rewealth shift in local, regional and federal economic policy, the best we can hope for is false bottoms, and bounces that offer temporary respite.

For national economic stimulus strategies to create community and regional revitalization, stimulus funds must run through a finer project filter than just “shovel-ready.” The best filter would use the three proven “renewal rules” that drive revitalization success: rewealth, integration, and engagement.

We need an economic recovery strategy that quickly becomes self-propelled. That’s where the other two rules-integration and engagement-come in. It’s from integrating the renewal of our natural, built, and socioeconomic environments-and from effectively engaging local stakeholders in that renewal-that efficiencies, synergies and positive feedback loops arise. Use all three project filters-rewealth, integration, and engagement-and the effect of the stimulus money is supercharged.

The subprime fiasco and unregulated hedge funds were just the first of many winds that are capable of blowing down our economic house of cards. If it hadn’t been them, it would have been oil prices, food prices, water and energy crises, and so on. An economy that bases growth on improving natural and built assets would be better equipped to handle these crises-and it would make Adam Smith happy, too. Free enterprise would automatically become more socially responsible and environmentally sound, without the need for onerous regulations.

Canada is in a perfect position to lead the world’s recovery, both as a thought leader and as an example. It has the strongest economy in the G20, and a growing comfort with the use of tax increment financing. Now, if Canada could just filter federal, provincial and local stimulus funds through the three renewal rules, national recovery and world leadership would be virtually assured. A crisis is a terrible thing to waste.

The usual answer is employment, crime, population growth, quality of life and the like. But those are all rear-view mirrors. They only tell you what the situation was at the time the data were compiled. Current conditions and recent historical trends are all well and good, but no stock or bond investor ever made money based on what the markets did yesterday or last year. The dream is to have a reliable indicator of where a market or particular stock is going, price-wise.

So it is with communities. The current condition of a place is far less important than the trajectory of its real estate valuations and quality of life. A community that’s revitalizing-but that has a so-so quality of life-will likely provide better returns than a community with excellent quality of life, if it’s on the way down. The problem is in finding a predictive indicator of a community’s (or a region’s) likely trajectory.

Individuals can take IQ (intelligence quotient) tests. Used properly, it can help people identify the strengths and weaknesses that might affect their success in life.

Now, communities will be able to take an RQ test and come out with a score (maximum 1000) that represents their Renewal Quotient. It’s a measurement of a community’s renewal capacity, its ability to turn restorative activities and regenerative projects into actual revitalization-economic growth that increases quality of life and environmental health.

It’s not hard to find cities that have spent many millions of dollars restoring historic buildings, remediating and redeveloping brownfields, and renovating their infrastructure, but that have still failed to achieve revitalization. They had all the ingredients, but lacked the recipe.

Funding is obviously crucial, but achieving rapid, resilient renewal takes more than just money. There are numerous factors of at least equal importance-these are taken into account when calculating RQs.

Given enough time, most communities will eventually enter a period of revitalization. What redevelopers and investors need to know is which communities are ready for revitalization right now. That’s the question the RQ Test is designed to answer.

The RQ initiative is a joint project of Resolution Fund, LLC of Washington, D.C., and the King Global Revitalization Centre (KGRC), a 700-acre living laboratory for Revitalization Institute, the global Secretariat of which is located at Toronto’s Seneca College (see page 41).

The initiative is being rolled out in four phases, the first of which is already underway. ReNew Canada readers are the first to learn of this new initiative and can be among the first to take the free, online quiz designed to measure a community’s perceived RQ.

The CMLC, which pioneered Canada’s first real TIF, states in its business plan, "Investment in the infrastructure will contribute to the marketability of the area that is key to attracting developers. These improvements will enhance the livability of the area that will drive demand and prices essential for the property tax increments."

Large-scale urban revitalization is too often a chicken-or-egg story in Canada. A major redeveloper comes to town, promising a large project that might turn around the community’s fortunes. In the spirit of partnering, the redeveloper asks the city to first pave the way, usually by renewing critical infrastructure or by remediating an old industrial property.

This is hardly an unreasonable request. After all, modernizing infrastructure and reducing contamination both serve the public good. But what happens if the community is broke? This is a common scenario, since a revitalization agenda often implies tight finances.

Despite the diversity of revitalization challenges and responses encountered throughout the 50 American states, there’s one common factor among the more ambitious projects. Whether the city’s coffers are empty or it’s in a period of great prosperity, it tends to use the same funding tool: Tax Increment Financing (TIF).

Simply put, TIF borrows against the value of future revitalization in order to fund the projects that will make that revitalization happen. It can take a plethora of forms, and the terminology varies tremendously, but these five steps define a true TIF:

1. Create a TIF district. This could be a large former industrial property, a waterfront or a dying-but-historic neighbourhood, to name a few.
2. Establish a tax baseline within the TIF district. This is usually based on property taxes. Sales tax is occasionally used, as it was in Tucson, where it was so successful that the loans were repaid years ahead of schedule.
3. Establish a future “revitalized” level of tax revenues within the TIF district. Using similar revitalized areas around the province or country as a benchmark, estimate what level of public revenue the TIF district would likely generate 10 to 30 years in the future, after redevelopers do what is envisioned.
4. Borrow against those increased tax revenues. The difference between current and future tax revenues is the increment, and bonds can be issued that will be repaid from those future revenues. Most communities take a conservative approach, basing repayment on only a reliable portion of the expected increase.
5. Fund public sector renewal projects. Spend that borrowed money on renewing infrastructure, assessing and remediating brownfields, and otherwise setting the stage for (mostly privately-funded) vertical redevelopment. TIF is often the only viable way to remedy expensive problems, such as removing a misplaced highway that’s inhibiting waterfront redevelopment.

TIF funds usually account for a relatively small percentage of the overall investment in bringing an area back to life. But they are usually the critical enabler, without which the other public and private funds won’t manifest. A public TIF dollar often attracts at least ten private dollars.

Another advantage of TIF is that it can raise enough money to deal with upsidedown brownfields, where remediation would cost more than the property is worth. The larger scope of TIF enables the strategic value of that property to the overall TIF district to both justify and pay for the cleanup. What’s more, TIF is long-term money, and it’s a more sustainable funding source than grants.

Canadians are ahead of the United States in some critical aspects of regeneration. For instance, Canadian cities tend to be more open to integrated approaches, and tend to be more protective of the public

good when creating P3s. But the biggest single factor holding back the renewal of Canadian communities has been the paucity of appropriate revitalization financing tools.

This has left communities at the mercy of federal funding, provincial funding and private redevelopers. TIF helps puts communities back in the driver’s seat. Done properly, it’s the ideal partnering tool: it allows cashstrapped communities to come to the table with money, enabling equitable public-public and public-private partnerships.

On top of that, TIF often produces better-quality projects. Communities tend to spend their own money (which is what TIF is) more carefully than they do other people’s money (such as provincial and federal grants).

This is not a new model-technically TIF has been around for a half-century. But it had an ugly birth. It started life as a way of perpetuating the urban renewal madness of the mid-twentieth century, and then died away for a few decades before reincarnating as the ideal restoration economy funding tool.

A few new tools have arisen in Canada that sometimes use “tax increment” in their name, but a quick glance usually reveals them to be just some form of tax abatement. Such approaches don’t solve the upfront funding challenge.

In its next evolution, TIF may be applied at larger scopes, such as regions and natural resources, watersheds, estuaries, commercial fisheries and the like.

The opposite-a version appropriate for small communities-will likely manifest, as well. I’m currently working with some academic and government leaders on both ideas. Tools such as tax overlay zones based on ecosystem services (green infrastructure) might be the first step in this direction. A new U.S. tool called “federal tax credit bonds” might also be a viable way of integrating such regional TIFs with federal or provincial agendas.

Canada is beginning to see the benefits of TIF. Calgary now has a genuine TIF, with the province’s full support. Calgary’s Rivers District revitalization project recently won a Canadian Urban Institute’s Brownie Award for leading-edge brownfield redevelopment. Their TIF was the primary factor in winning the award. (For details, look for this article on renewcanada.net/blog.) General information, the overall plans and details of the operations are available at calgarymlc.ca.

Calgary abandoned the accurate-but-sterile “TIF” terminology, calling it a Community Revitalization Levy. “Levy” might not be ideal, but having “community revitalization” in the name should help prevent abuses (such as using TIF to fund sprawl).

In June 2008, Manitoba approved it’s Community Revitalization Tax Incremental Financing Act, which brought TIF to a second province. If this trend continues, Canadian communities across the nation will soon have access to the world’s most powerful and successful renewal funding tool.

Since the global economic crisis hit, the most common questions I get after my keynotes are along these lines: “In these uncertain times, how do we know the private sector will still have the money for follow-through after we make our TIF-funded community improvements?” Or: “what if real estate values go down after a TIF is created?”

I can’t help but answer with irony: “Yes, what a tragedy it would be if you were to remediate your brownfields and modernize your infrastructure, and then had to wait longer for the private sector to follow-through, or took longer than expected to repay the loans. How would the politicians ever recover from inflicting a cleaner, safer, more efficient community on their citizens for no good reason?”

The lesson, of course, goes to the heart of the difference between a dewealth-based economy (deconomy), and a rewealth-based economy (reconomy). The former bases economic growth on sprawl and resource extraction. When things go wrong, the community is stuck with destroyed lands and white-elephant developments.

The latter bases economic growth on renewing the assets the community already has (which is the purpose of TIF). When things go wrong, the community is stuck with an improved natural, built, and/or socioeconomic environment.

Worse things could happen.

This was the perfect foundation for my keynote presentation, which suggested an ideal niche market for the GTA.

What are the characteristics of a viable niche? Ideally, it should be huge, global, fast-growing, and long-lasting. It should be media friendly, producing stories of broad interest. It must be unique — no other metropolitan area should be perceived as a centre of such expertise — and it should offer significant fringe benefits for the GTA.

The ideal financial services niche is restorative development: community revitalization based on the restoration and renewal of natural, built, and socioeconomic assets. It is huge and global, currently comprising at least $2 trillion in annual activities. Since it’s tapping a fast-growing global inventory of restorable assets conservatively estimated at $100 trillion, it will expand for centuries. It’s the major growth trend in community economic growth. Unlike sprawl-based growth, which undermines quality of life, there can never be too much restoration or renewal. Restorative development is media-friendly, generating dramatic “coming back to life” stories with lots of visuals, relevance and human interest.

As for fringe benefits, if the GTA becomes the centre of research, learning, workforce development, technology, and financial services-all related to restoring nature, renewing our infrastructure and buildings, cleaning and reusing our brownfields-that expertise will be readily available for use in the GTA or Greater Golden Horseshoe (GGH). If Toronto becomes known as a city that’s revitalizing the planet, it will likely be seen as being on an upward trajectory, thus attracting restorative investment, restorative employers, and anyone looking to live in a place that’s on the rise.

To take advantage of this opportunity, all levels of government need to encourage and fund more research into restorative development among the secondary and post-secondary schools of the region. The area’s schools also need to develop curricula and degrees to expand the restorative development workforce, both locally and for the world.

The Silicon Valley of the global restoration economy would have a spectacular redevelopment project in its own backyard. Toronto has what might be the world’s largest urban waterfront. What’s more, it’s on the Great Lakes, which might become the world’s largest and most important restoration project.

Project size aside, the ideal candidate city should also boast leading-edge “rewealth” projects that demonstrate the latest integrated, engaged techniques. The Brickworks has that potential, and Seneca’s King Campus is well-positioned to become a living laboratory for the integrated restoration of nature, agriculture and heritage.

The GTA is already on its way to developing this niche. The Revitalization Institute — an academic network focused on restorative development-recently moved from Washington, D.C., to Toronto. The Canadian

Urban Institute, based here in Toronto, has provided tremendous restoration economy leadership. The Growth Plan put forth by the former Ministry for Public Infrastructure Renewal (which has unfortunately lost that wonderful name) only needs an effective implementation strategy to turn the entire GGH into a model of restorative development. That strategy should be based on helping GGH communities enhance their renewal capacity, as this column has described in earlier issues.

The opportunity to become a global leader via the restorative development niche is Toronto’s for the asking. The current global financial crisis makes the timing perfect. After all, restorative development is as non-cyclical as a niche can get: when times are good, communities have lots of cash to spend on restoring their natural, built and socioeconomic assets. When times are tough, revitalization is what everyone wants and needs. Why shouldn’t Toronto become the city that’s revitalizing the world?

There’s an endless diversity of reasons, but one is depressingly common. Most public clients are primarily interested in protecting their job. Confronted with failure or lacklustre results, it’s essential that they be able to say “we used a well-established firm, using well-established techniques.” The solution is to base RFPs/RFQs on the three renewal rules: rewealth, integration and engagement. Design and implement that RFP/RFQ using the three renewal processes: visioning, culturing and partnering.

Here’s how I learned why RFPs/RFQs are the key to revitalizing the world. From 1996 to 2002, I was director of strategic initiatives at the Construction Specifications Institute (CSI). CSI is a 50-year-old technical society of about 17,000 architects, engineers and construction product manufacturers based in Alexandria, Virginia.

As the token tree-hugger on staff, I was constantly looking for opportunities to “green” the commercial construction industry. As CSI’s official staff liaison to the United States Green Building Council (USGBC) during the days when the LEED rating system was being invented, I became intimately familiar with which industry-greening efforts worked, and which failed.

Trying to green the industry from the design side was frustrating. Architects worried that if they tried to proselytize about green they would turn off the client and not be cost-competitive. A few architects and consultants took a proactive approach. But the majority relied on the owners to ask for green. If owners didn’t specify a healthy, energy efficient building, they wouldn’t get one. The major problem was that green was neither easy to specify, nor easy to deliver. LEED’s “simple” point-based system changed that. For the first time, green could be specified in a single phrase: LEED Silver, LEED Gold, or LEED Platinum. Designers and builders could reliably deliver on those specifications. This deliverability was thanks to the flexibility of the point system, which provided plenty of design and material alternatives.

As I recently documented in reWealth!, LEED currently has some very serious deficiencies. The good news is that Rick Fedrizzi, the head of USGBC, recently told me that many of these problems will be addressed in LEED 2009.

What does all this have to do with writing an RFP/RFQ for a redevelopment, remediation, restoration or revitalization project? The moral of the “green building” story is that better renewal practices come
about primarily because owners ask for them, not because planners or designers force enlightenment down their throats.

Sure, I know some planning/design firms that proactively educate their clients and encourage better practices. But many still rely on the old business development model: a client generates an RFP that’s 80 per cent boilerplate and, in response, the planning firm generates a strategy that’s 80 per cent boilerplate.

Our usual advice at Resolution Fund, LLC is for clients to first form a renewal engine—a permanent, non-profit, public-private organization based on the renewal rules and renewal processes. Only then should they start writing RFPs.

But most communities already have projects in the pipeline, and they want to enhance their bang for the buck now. Embedding the renewal rules/processes into an RFPs is a shortcut to rapid, resilient renewal, because it can be done before a renewal engine—which can take a year or more to coalesce—has been created.

Our best advice, though, is to create a team or steering committee to oversee the writing of that RFP and recruit its members with the formation of a renewal engine in mind. That way, the RFP-writing process does triple duty, creating a better stakeholder engagement; a higher-quality RFP; and making the RFP team/committee the seed of the renewal engine.

The community will end up with a successfully renewed waterfront, or brownfield, or historic district, and at the same time a greatly enhanced renewal capacity. This creates a “flywheel effect”—capturing and building on the project’s momentum to attract an increasing flow of revitalizing investments. Communities thus have the ability to leap to the leading edge of revitalization, if they use RFPs to their full potential.

Here’s a lament I encountered recently, from an architect who would rather remain anonymous: “You must have heard all the developers and consultants bitching about the planning process for a while now. Economic development is the last thing the planning department considers when giving, delaying, procrastinating, postponing, negotiating, and blocking applications. Planning department and council only pay lip service even to provincial and their own development policies. It would be refreshing to link planning approvals with at least consideration of economic benefit/impact.”

The disconnect he referred to doesn’t exist only at the planning/economic development interface. Environmental agendas and social/cultural goals are often just as marginalized from the planning process as economic objectives.

While the speaker was Canadian, the wall between city planners and economic development officers/departments/organizations is every bit as pronounced down here in the United States.

While the problem doesn’t vary much from country to country, it does vary from city to city. Cities are where almost all innovation in public policy takes place, and where new socioeconomic “technologies” are born. In fact, I’ve encountered places where this disconnect doesn’t exist, and both their economy and quality of life have grown spectacularly as a result.

Those places had several things in common. But let’s get a little more insight into the problem before we get into solutions. Why are so many cities struggling with this disconnect? I trace it to two primary causes: turf protection and silo thinking (also silo budgeting).

Turf protection requires no explanation: we do it as individuals, as professions, and as organizations. Silo thinking—as relates to this discussion—primarily takes the form of addressing our natural, built, and socioeconomic environments separately, rather than as different aspects of the same inseparable, interdependent system.

Turf protection by other public agencies prevents them from getting out of the land-use silo. What’s more, public policy seldom encourages holism (non-silo thinking) of any sort. Most public policy is crafted by special interest groups, each of whom usually suffers from turf protection and silo thinking.

Individuals tend to protect turf and tend think in silos. As a result, organizations comprising, or led by, such individuals do the same. The organization reinforces such behaviour, both actively and passively inhibiting enlightened individuals who wish to break these habits. As a result of this behavioural feedback loop, these aren’t the kinds of problems we can tackle head-on, like plugging a leak in a dike.

Most well-established organizations are complex adaptive systems. Two of the most effective ways of altering the behaviour of complex systems are by changing the basic decision-making rules of the agents within the system, and by aggregating its members in a new way. The former approach can work all by itself, but not the latter: thus the failure of most organizational change initiatives based only on rearranging the org chart.

So, here are two of the best ways to heal the disconnect between planning and economic/ environmental/social/cultural issues:

1. Introduce no more than three basic new rules for decision-making. People aren’t likely to remember more than three, and they must be basic in order to be universally applicable throughout the organization/community.
2. Create a mechanism to integrate all the goals into a vision and engage all the stakeholders. With a vision, you can create a strategy. With a strategy, you can plan.

Those two bits of advice are hopelessly general for use in the real world, so let’s be more specific. If your goal is rapid, resilient renewal, these are the three rules that should be driving your policies, plans, and projects:

Renew: Base your economic growth primarily on the renewal of the assets you have, rather than on creating more and more of the kinds of assets (highways, malls and so on) that few people want more of.

Integrate: Coordinate the renewal of your natural, built, and socioeconomic assets. This is where your strategy derives its efficiencies and synergies.

Engage: Effectively involving all stakeholders in their future is how you grease the wheels of growth, preventing expensive last-minute objections to projects, and designing them right the first time.

Require all public and private individuals and organizations involved in shaping your community’s future to audit their decisions according to those three rules (and enforce the requirement). Nothing will do more to reduce or overcome turf protection and silo thinking.

But that’s not enough. The communities that are world champions of regeneration did more than change their rules: they organized in a specific way that produces rapid, resilient renewal. I refer to this kind of organization as a “renewal engine” (see ReNew Canada Nov./Dec. 2007). It has three primary functions: visioning, culturing, and partnering.

The result is a constant flow of well-designed, fully-funded “renewal partnerships” (public-private, public-public, and private-private) that hew to a vision shared by all stakeholders, and that are supported by policies driven by the three “renewal rules.”

These communities have something else in common: their economic, ecological, cultural, social, infrastructure and other agendas are not disconnected from their planning processes. Imagine how things might have been different if New Orleans (or Iraq, or Afghanistan) had had a renewal engine in place a few years back. Renewal engines are powerful at the community level, but work better at the regional scale. I’d love to see someone try it at the provincial, or even national scale-maybe someone Canadian.