Agencies Move to Recalibrate City Bond Ratings (4-30-10)

"All three major credit-rating services - Fitch Ratings, Moody's Investors Service, and Standard and Poors (S&P) - are moving to rate municipal debt based on the likelihood of default, which is the standard used for corporate debt. Previously, municipal securities with their historically low default rates have been rated on different scales than corporate debt. 

The National League of Cities (NLC) has long called for passage of legislation to address problems associated with different credit rating scales for different securities. Legislation eliminating dual ratings was included in the comprehensive Wall Street Reform and Consumer Protection Act passed by the House of Representatives in December 2009. Sen. Christopher Dodd (D-Conn.) also included bond rating parity in the financial services reform bill he unveiled last month. 

'With the handwriting on the wall, we're pleased the rating agencies are voluntarily moving to rate municipal government bonds on their ability to repay their debt and their historically low rate of default,' said Robin Beltramini, council member, Troy, Mich., and chair of NLC's Finance, Administration and Intergovernmental Relations Committee (FAIR). 'As FAIR has said, doing so will allow new investors to participate in the municipal securities market.'"

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Back to the City (4-29-10)

"United Air Lines is set to move its operational headquarters, starting this year, from the Illinois suburb of Elk Grove to downtown Chicago. Quicken Loans, also citybound, recently began leasing space in Detroit and plans to build its headquarters there. And in February, Walgreens announced its acquisition of New York drugstore chain Duane Reade, signaling a deliberate decision to improve its capabilities in urban settings.

These companies are getting a jump on a major cultural and demographic shift away from suburban sprawl. The change is imminent, and businesses that don't understand and plan for it may suffer in the long run.

To put it simply, the suburbs have lost their sheen: Both young workers and retiring Boomers are actively seeking to live in densely packed, mixed-use communities that don't require cars-that is, cities or revitalized outskirts in which residences, shops, schools, parks, and other amenities exist close together. 'In the 1950s, suburbs were the future,' says University of Michigan architecture and urban-planning professor Robert Fishman, commenting on the striking cultural shift. 'The city was then seen as a dingy environment. But today it's these urban neighborhoods that are exciting and diverse and exploding with growth.'"

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Airport Economics (4-27-10)

"Back in the late 1990s, St. Louis and Pittsburgh had two of the hottest airports in the country. Jammed with flights, Lambert-St. Louis International Airport embarked on a billion dollar expansion program, while Pittsburgh International Airport pioneered the concept of an airport as a shopping mall, with plenty of selection and fair prices.

But all of that has changed. To visit either airport today is to find closed-off gates and half-empty corridors.

Both airports also illustrate the damned-if-you-do, damned-if-you-don't dilemma many cities face these days. With huge tracts of land and expensive facilities, airports are a region's economic linchpin -- they are essential to businesses that need easy access to the world. Yet airports are at the mercy of airlines -- private companies focused on profit-making and caught up in one of the planet's most competitive and unpredictable business environments."

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Fast Cities 2010 (4-26-10)

"Constructing the perfect city means blending the best and boldest ideas from across the nation. Here are 12 we hope all future cities will embrace."

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Survey: Local Governments Cautiously Optimistic (4-26-10)

"New survey results . . . offer some cautious optimism about future economic growth and ongoing economic development, while providing a baseline of how economic development operates at the local government level. The Economic Development 2009 Survey features the responses of 852 local governments, including municipalities of 10,000 or greater and counties of 50,000 or greater. 

The findings include:

• Cautious optimism expressed about future economic growth:  When asked to project the growth in their local government's economic base over the next five years, 53% believed they would achieve 'slow growth' (less than 10%) while 21% believed they would achieve 'moderate growth' (10-25%).  Nearly 18% indicated that their jurisdiction's growth would remain 'stable' (no growth or decline), and only 6% forecasted a decline.
• Responsibility for economic development on public sector shoulders:  In approximately two thirds of the responding localities, the local government was the main engine for economic development, versus 20% of communities in which a nonprofit development corporation had lead responsibility. 
• Disconnect between budgeting and economic development: When asked if the local government budget allocation process was linked to economic development priorities, nearly 58% of respondents said 'no,' and only 42% said 'yes.'
• Common barriers to economic development include fiscal woes and lack/cost of land:  When asked what barriers to economic development their jurisdiction had encountered, the three most common responses were 'cost of land' (53%), 'availability of land' (52%), and 'lack of capital/funding' (50%)."

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