Not Just Real-Estate: Chapel Hill’s Draft Economic Development Report

For several years I’ve called on the Town to hire a professional economic adviser. When I renewed the call during my 2005 campaign, many of the other candidates adopted (or co-opted) the idea.

I suggested we hire someone with experience in developing an economic strategy that encompassed more than Downtown redevelopment or saw economic benefits beyond those derived from commercial and residential real-estate.

For many years our Town’s elected folks ignored policies that would encourage job, entrepreneurial business and cottage industry growth. Their lens, if focused at all, stayed firmly on traditional areas. Worse, they continued some policies – like the business privilege tax – that actually act as a disincentive.

I was somewhat worried when we once again hired a former consultant from Town manager Roger Stancil’s past. With the hiring of Dwight Bassett (Two Years Later Town Hires Economic Development Officer), we at least had filled this important position. Dwight’s background had been mainly focused on Downtown redevelopment projects and developing other traditional avenues of economic activity.

I was concerned then, and still am, that we will miss out on using our Town’s unique pool of talent to develop our economic strength using a new paradigm. For instance, leveraging our commitment to deploy a municipal network to attract low environmental impact, highly distributed employment opportunities paying better than average salaries.

This week we get our first glimpse of Dwight’s thinking in the following DRAFT report. Today’s Herald-Sun has this to say:

Bassett also passed around economic development strategy statements crafted by officials in Austin, Tex., Clemson, S.C., Toronto and a town in Australia that represent different approaches to planning. The resulting exchange of ideas demonstrated that Bassett’s collaboration with town officials will need some time to gel.

While he and the committee agreed that several areas of the town could be better developed to maximize business and slow “leakage” of retail traffic to other municipalities, Kleinschmidt’s face crinkled into an involuntary scowl when Bassett introduced the concept of a “lifestyle center” such as a mall or big box outlet that could single-handedly draw business to an area.

The committee also discussed potential targets for a retail makeover, including University Mall, Eastgate Shopping Center, downtown’s West End and the interchange of I-40 and Martin Luther King Jr. Boulevard.

Kleinschmidt agreed that leakage must be stopped, but added, “KFCs and Wachovias … that can’t be it. That can’t be right.”

The committee agreed, however, on the basic point that a market analysis is needed to determine the best course for developing Chapel Hill’s economy.

Hey, is that the same market analysis I called on 4 years ago? Hey, at least the Council is starting to get around to it.

The report is available here in its original format [WORD] and below the fold slightly reformatted for the ‘net.

Economic Context


  • Population/Tax Base -The Town of Chapel Hill population has grown an average of 2% over the last decade. The Town’s Tax Base has grown an average of 3.2%, not including revaluations and annexations in the same period.
  • Building Permits – In the last 20 years Chapel Hill has seen a shift in building permits from single-family detached and some multi-family to single-family attached and non-residential permits.
    • Permits for single-family (attached) houses have experienced a 199% average over the last four years. (Average is based on 20 years of data, for relative average.)
    • Permits for multi-family housing have seen no activity in the last four years.
    • Permits for non-residential construction have maintained a strong presence in the past four years with above average number of permits issued. The value of project permits has grown dramatically over the last twenty years from an average of $916,000 in 1985-1986 to $5.5 million average in 2005-2006.
  • Workforce/Commuting Patterns – The Town of Chapel Hill has approximately 27,740 in our workforce, with 24,171 employed at public institutions (UNC, UNC hospital and local governments). There are 25,336 people commuting outside of Orange County for employment and 23,657 commuting into Orange County for employment. Chapel Hill has placed importance on transit-oriented development to assist in alleviating the need to commute for future generations.
  • Personal Income – The per-capita Personal Income has grown over the last four years for Orange County has grown 12.1% and out-paced growth both in North Carolina (7.7%) and the Unites States (9.7%)(2000-2004).


The Town is growing at a reasonable rate and this growth rate is not expected to change due to land constraints and current zoning. There is very little land for growth in the single-family (detached) market. Any new growth seen in this area will be from in-fill and redevelopment projects. It would be helpful if the Town initiated a market study to determine market demand for housing and housing types for future growth.

The work force will grow if there continues to be a strong development trend in the areas of single-family (attached) and non-residential mixed use development. There needs to be effort placed in developing additional job opportunities in the private sector through mixed-use developments and office buildings to support job growth. To remain a sustainable and environmentally supportive community, we need to work at reducing our out-commuting pattern (transit-oriented development). This growth may be in the form of UNC entrepreneurs locating companies in Chapel Hill or companies moving to the area to tap into the research at UNC.

Personal income is growing at a strong pace and no efforts should be placed on growing wealth in the Chapel Hill area. There are weaknesses in the areas of household incomes of less than $35,000; there has been a growth of 265% of households earning less than $49,999 from 1990-2000. (242% for $34,999 and less)

The retail market should be examined for leakage, weaknesses and regional market gaps that can be filled with future development and redevelopment of existing centers. [CW emphasis added]

From Comprehensive Plan and other planning documents:

  • Diversification of the local economy should be considered.
    • A strategic approach to promoting non-residential development and related employment and commercial opportunities in Chapel Hill is proposed to address these issues. A basic premise is that economic development should occur in a manner that supports the Town’s high quality of life and community character, which are key to Chapel Hill’s economic prosperity. Thus economic development initiatives should be measured not only by how much they increase employment opportunities or the tax base, but also by the extent to which they help fulfill other objectives of the Comprehensive Plan.
    • Desirable types of non-residential development are those that are attracted to and complement the Town’s quality of life and high standards for community character.
    • One issue is the desire for a balance among employment, housing, and commercial opportunities within Chapel Hill, so that the prevalent pattern is less one of nonresidents commuting into town to work and residents driving out of town to work and shop.

The Economic Development Officer study Committee recommends emphasis on the following key goals for the position:

  • 1.Implement the Economy and Employment goal of the 2000 Comprehensive Plan to “increase employment opportunities for residents and satisfy local demand for commercial and retail services.”
  • 2.Perform a welcoming function, including information and assistance with the expansion and retention of businesses in Chapel Hill.
  • 3.Communicate Town policy and Council expectations to businesses; assist businesses with understanding the processes of Town government.
  • 4.Focus on the professional analysis of small areas along major corridors for redevelopment or development in Chapel Hill, in accordance with the Town’s Comprehensive Plan goals. Coordinate such an effort with the review of the Town’s Comprehensive Plan now underway.
  • 5.Undertake actions in the context of Chapel Hill’s Comprehensive Plan goals to achieve a mix of uses with affordable housing in a transit-friendly community, developed in a manner which protects the environment, applies green and sustainable development principles, and exhibits social awareness.
  • 6.Understand and be sensitive to the dynamics of the marketplace.
  • 7.Value corporate citizens who contribute to community and help maintain the character and vitality of Chapel Hill.
  • 8.Pursue grant funding for economic development opportunities.
    • The Committee recommends that approximately 25% of the position’s time be spent on the welcoming/communication functions in Goals 2, 3, and 7; and that the remainder of the position’s time be focused on redevelopment/small area planning and related other goals.

Economic Development Strategy Statement:

The Town of Chapel Hill will work innovatively to diversify local economic opportunities by providing new, desirable jobs in locations convenient to transit and housing. Our goal is to build a sustainable economy for the 21st century by creating a healthy balance among employment, housing and commercial development. In all of our development efforts, the Town of Chapel Hill places importance on the built-environment, community character, transit orientation and quality of life for its citizens.

Strategy Objectives:

The Economy and Employment of the Comprehensive Plan:

  • Increase employment opportunities for residents and satisfy local demand for commercial and retail services.
  • Develop and maintain commercial uses that are compatible with the character and scale of Chapel Hill.
  • Develop and maintain the downtown as a pedestrian-oriented focal point for the community’s commercial and retail needs.
  • Designate appropriate locations for new non-residential development.
  • Define desirable types of non-residential development.
  • Consider proactive approaches to attracting new development.
  • Encourage small business development.
  • Support the incubation and growth of entrepreneurial/start-up businesses.
  • Retain existing businesses.
  • Encourage new non-residential development in mixed-use settings. New development should be planned and developed to support transit.
  • Pursuing “Creative Class”-type companies to support office development in mixed-use projects

University-Related Business Development.

  • Establishing a relationship with the University to retain graduating students for employment/entrepreneurial opportunities.
    Work with UNC to identify opportunities for private entrepreneurial activity related to University research.
    Strengthen design standards to ensure that new non-residential development is compatible with existing development and is transit-oriented.
  • Develop and implement a proactive strategy to encourage and retain non-residential development, including small businesses.
    Work with developers to understand the Town’s development process.
    Work with property owners/developers to evaluate the opportunity to create mixed-use redevelopment projects with affordable housing, transit-friendly environments and green building standards.
  • Pursuing grant funding to support economic development activities as may be available.vii

Once Council has agreed that this is the direction economic development for Chapel Hill should be guided, I will develop a more detailed work-plan with time lines, associated task and other information to accomplish each of the objectives.


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