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
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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.'"
More from the Harvard Business Review
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."
More from Governing Magazine
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."
More from Fast Company
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
- 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
- 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'
More from the International City/County Management Association