March 15, 2005 | Volume 2, Issue 1
A Conversation with Julie DeSeyn: Community Economic Development
Julie DeSeyn is a 1998 graduate of the Heinz School. Since completing her Masters of Science in Public Policy and Management, she has worked at the Pittsburgh Urban Redevelopment Authority (URA) where she is currently a Special Projects and Government Relations Manager. Julie is also a graduate of the CORO Women in Leadership program, a Board Member for both the Greenfield Organization and for YW Homes – a subsidiary of the YWCA, a recipient of the 2002 WQED/PUMP“40 under 40” Achievement Award, and a recipient of the 2002 National Association of Women Business Owners’ “Make the Connection” Award for Community Responsibility.
HSR: Before you began working in economic development, you worked as a social worker. Could you please tell us about this career transition?
JD: I have an undergraduate and a Master’s degree in Social Work, in community organizing. I worked in the Mon Valley for three years, but what was frustrating was that you would work with families, and help families go through things and solve problems, but even with the community organizing part of it, you would still go back to the same communities, there would still be the same policies in place, the same buildings that were falling down, and it just didn’t seem to be having the same community impact that I was looking for. So I actually went back to school because I was interested in social welfare policy. I ended up taking an economic development course by mistake. One of my friends was in it and I just sat down and took the class, and I really liked what I learned. In my second year, I took his class with Mulugetta Birru, the former director of the URA, and at the end he asked me to work for him. It was a great connection through the Heinz School.
HSR: An August 2004 Heinz School study (http://www.heinz.cmu.edu/systems/52.html) on the purchasing power of the inner city neighborhoods of Pittsburgh concluded that such neighborhoods have much stronger economic bases than generally assumed. Research by Michael Porter at the Harvard Business School corroborates this finding. Dr. Porter says that “the inner cities of the United States represents the world’s largest and closest emerging market.” What factors have prevented this purchasing power from attracting retailers to inner city neighborhoods?
JD: The thing that we focused on is that the traditional studies do not pick up on population density and they don’t count food stamps or other subsidies as income. Even though, if you are a grocery store and you are looking for somewhere to locate, that is important, that is money. They’re still making sales. Also, they overlook the fact that lower-income people tend to spend a greater proportion of their income on food. So that the traditional formula that states that people spend 15% of their income on food is not necessarily going to be the case. When you don’t have very much money, you are going to spend more of your income on food for your family. Also, one thing that the students who did the study took into consideration was transportation and public transportation; where are the grocery stores in relation to the bus routes and who is taking public transportation. For example, if there is a store that is 1.5 miles away, but it is across a river and the bus only comes at a certain time, and it is hard to get a ride. You really have a captive market if you were to put a grocery store in that neighborhood that people could walk to. You would actually get a greater capture rate in that neighborhood than another where people have cars and therefore could drive somewhere else.
HSR: How do economic development practitioners help translate this purchasing power into meaningful outside investment and community development?
JD: I think it is the same struggle that Michael Porter has. You have the data and you have the market, it is just a matter of getting people to believe the data and to show them why it makes “dollars and sense” to them. When you look at the Home Depot in East Liberty for example, it is one of their highest performing stores nationwide. In fact, they’ve found overall that their urban stores really perform well. I think a lot of people in decision-making positions at this time, like retailers, have preconceived perceptions about urban neighborhoods and that the money is out in the suburbs, which is where they should be. I think at the end of the day, you need to show them that “this is a good financial investment; you are going to make a good return on investment here.”
HSR: Do you see changes in how retailers and other businesses view the inner city markets?
I think it is starting. For example when national retailers like Home Depot and Walgreens see that their urban stores are doing well, they seem to get it. I think smaller retailers who know their niche will eventually go. It is a matter of being able to believe that not only will you have a presence, but there are enough things going on in a neighborhood that you aren’t going to be there by yourself. For example, in Hazelwood, we’ve been concentrating on developing the business district. We have acquired most of the buildings along the two block area and have been working to clean, fix, and stabilize the structures. We have a new retail tenant in one building and we are currently speaking to three others. Everyone that we have talked to agrees that they prefer to be located together to be more of a community and attract more people.
HSR: Which types of businesses and organizations do you target as early entrants into a troubled neighborhood?
JD: I think it depends on the neighborhood and what they are looking for. We have been working with the community organization in Hazelwood for example, and we are all in agreement that we want to preserve the retail business district and preserve the buildings that are there. So if someone wanted to come in and build a strip mall or put up one big building and a parking lot, we would steer them away from that particular site and work with them to find a location in a different area where that would be more appropriate. There are areas in the city where they are trying to attract light industrial, not neighborhood-type development, so it really is a mix between what the neighborhood is looking for, what the market thinks is appropriate, and what is possible. Sometimes you want to do “Main Street”-type development, but there might be one property owner who wants to demolish all the buildings and do something totally different, and then there is really nothing you can do.
HSR: Economic development often involves large and extended exemptions from property, income and other taxes. An example of such a program is the Commonwealth of Pennsylvania’s Keystone Opportunity Zone program, which you administer in Pittsburgh. The Keystone Opportunity Zone believes businesses and individuals in designated areas from paying state and local taxes until 2010. Although these programs attract businesses by virtue of significant tax breaks, how does the city balance increased municipal services needed by participants with the lack of tax revenue collected?
JD: In order to qualify you need to be current on your taxes and keep your property up to code. We decided that the program would be best used on city-owned properties, given the financial situation in Pittsburgh. We wanted to ensure that the loss to the taxing bodies was minimal. Plus it is just not fair. It is not good policy to favor certain businesses. In the first round, we mostly included government-owned properties and in the second round we included properties owned by community development corporations. The properties are buildings that need work and need to be developed. Someone will have to make a significant investment in terms of purchasing and making serious improvements to the buildings to qualify for the tax benefit. What we’ve found is that it is a good incentive, but it is not a ‘cure-all’. We are talking about properties that are very difficult to develop. We have had some successes, including the Liberty Building in East Liberty and the Roma Bottling Company building in Uptown which is now being renovated into condominiums. We will have to wait to see how the program turns out.
HSR: Which metrics do you use to measure the success of tax exemption programs and how has the Keystone Opportunity Zone program benefited the affected communities?
JD: I see success when a building is renovated; when significant, measurable steps are being taken toward a renovation; when people in a neighborhood are able to see improvements being made; when we acquire the funding for a certain project; when the negotiations between us and a developer have been successful; and when businesses are open. We have had a lot of success getting loans to people, in terms of seed funding. For example, we funded Free Markets when they were just a new business. We started working with the developer of McKesson automated healthcare technology when he was still a student. Now that has been bought by a national firm and it a major employment generator for the city. Economic development is a slow process, very slow, but you can see it. You can see people being employed; you can see people going into buildings. In social work, it was much harder to tell when you were successful.
HSR: Academic institutions may benefit a regional economy through the supply of an educated workforce and research-based entrepreneurial spin-offs. The technology and medical industries in Pittsburgh have definitely benefited from local universities such as the University of Pittsburgh and Carnegie Mellon University. Besides the overall economic benefit in terms of “a rising tide lifts all boats,” what can universities do to spur the economic development of their local communities?
JD: I think a number of things can be done. The purchasing power study for example is a very valuable tool that we will be able to use to market those communities. And when CMU does a study it gives it a level of credibility and objectivity. Also, in terms of contributing to the local economy each student rents an apartment, takes the bus, buys their books, goes out to eat, and all those things help drive the market. The more that students are able to get out into the community, the more they are an
economic force.
HSR: What can be done in local communities to attract and retain graduating students, who may otherwise leave for homes and jobs in other cities?
JD: The universities seem to do a good job of attracting students. In terms of students staying, any effort that the universities can make to encourage people to get off the university campus and familiarize themselves with the city would help. As a student here, I heard many of my classmates say that they disliked Pittsburgh, but then I never saw them off campus. Learning is really important, but field trips or happy hours in different areas of town would definitely help introduce students to Pittsburgh. I think that the University of Pittsburgh’s choice to move their football stadium to the North Shore is a great move. When I was at Pitt, I never even left campus until I was a junior and then I came downtown to Christmas shop and I was like, “Wow, this is really nice.” Only when I experienced the city was I like, “I really like Pittsburgh; it’s a neat place.” Another thing that CMU does really well is bringing in ad hoc professors who are professionals. For example, the fact that I had a professor who was the Executive Director of both the URA and the Allegheny County Office of Economic Development lead directly to my job. In my systems project, I worked with the Economic Development director for the office of the Mayor. I could have worked here for years and never met him personally, let alone have class with him every week. Those kinds of things are so important. The most obvious thing in keeping a student here is them having a job. So if your professor ends up hiring you or introducing you to someone who will hire you, that’s fantastic.
HSR: What lessons from economic development in Pittsburgh do you feel are “uniquely Pittsburgh” and what lessons can be helpful to economic development professionals elsewhere?
JD: That’s a hard question. I’ve only worked in economic development here and in Ireland. I think a lot is the same. A lot of economic development is about partnerships and you need to work in partnership with the community. I think that at the end of the day it does come down to creating jobs, securing the funding. Obviously in Pittsburgh we have great neighborhoods and people really capitalize on that. I’m not sure that other areas have such a variety of distinct neighborhoods. Also, people in Pittsburgh are so proud. In some ways I think we probably have more in common with other groups than we think.
Contact Information
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