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Here are ways to develop Middletown’s economy; PSU should play role: Letter to the Editor

Posted 6/12/19

How can Middletown develop its economy? During a recent borough meeting, council members pondered this question. Some suggested they “fight the blight” by restoring dilapidated and …

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Here are ways to develop Middletown’s economy; PSU should play role: Letter to the Editor

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How can Middletown develop its economy? During a recent borough meeting, council members pondered this question. Some suggested they “fight the blight” by restoring dilapidated and abandoned homes in the town. Others floated the idea of giving tax abatements (tax reductions) to new businesses. But the talks were short, and they didn’t reach any conclusions.

To answer the question, I think it would be helpful for us to review some current literature — including economic research and the efforts of Mayor Pete Buttigieg of South Bend, Indiana, as he records them in his 2019 autobiography, “Shortest Way Home.”

According to Buttigieg, “when I had taken office in 2012, the aftereffects of the Great Recession had … brought us to a miserable unemployment rate of 11.8 percent, 3 full points above the national average.” Now, the unemployment rate in South Bend is down to 5.6 percent, “a mere half-point from the U.S. rate.” What happened?

By 2015, Buttigieg says, “we cleared or fixed most of the thousand vacant and abandoned homes at the center of our neighborhood redevelopment strategy.” As a result, “the number of restaurants opening in our once-quiet downtown doubled, deals were underway to add two major hotels to the city center, and investment was up in pre-industrial areas.”

Indeed, as pointed out in a 2014 study by Laura A. Reese, professor of Urban & Regional Planning at Michigan State University, “in recent years the emphasis has begun to shift” to “quality of life enhancement.” She adds that “the new conventional wisdom assumes that desirable locations will attract talented individuals.”

Buttigieg’s approach to improving commerce echoes Reese’s findings: “Economic development is no longer just a game of luring factories from other locations, using tax incentives essentially to buy jobs. Instead, at a time when many people first choose where they want to live and then start looking for a job,” it makes sense to “enhance the appeal of the community.”

Of course, the borough has suggested we make Middletown more desirable by fighting the blight. Buttigieg did it.

Lamenting the presence of 1,000-plus deteriorating, vacant homes in his city, Buttigieg organized a special municipal task force and announced that he would lead an effort to “confront a thousand vacant houses in a thousand days.”

It was an ambitious project, to say the least. The task force had to “evaluate market conditions,” disconnect utilities, hire inspectors, seek legal expertise, and more. Announcing the initiative, Buttigieg notes, would make his administration vulnerable, as the public would hold them accountable for succeeding. But, faced with these difficulties, he set the simple goal to “cut through the problem of analysis paralysis,” finding the deadline inspired energy and urgency.

Revitalization efforts on the Union Street square have certainly paid off. I’ve studied at Penn State Harrisburg for the past two years, and I’ve always been most likely to patronize businesses on the well-kept town square because it has Middletown’s most handsome storefronts, beautiful Victorian mansions, and appealing brick roads, street lights and sidewalks.

The borough would also be wise, in fighting the blight, to seek help and advice from neighbors, such as local businesses and community organizations. Buttigieg certainly didn’t lead his restoration work alone.

As noted by Hyunsang Ha, Won Lee and Richard Feiock in a 2016 study for the Economic Development Quarterly, “local government interaction with these types of organizations represents a significant portion of the … activities that local governments formulate for economic development.”

If the borough needs funding, it could look into applying for state grants. Pennsylvania’s Keystone Communities Program, for example, has had Gov. Tom Wolf approve more than $22 million since 2015 to support “projects to strengthen communities and downtown districts,” according to the Department of Community and Economic Development website. The borough also could look into taking advantage of Pennsylvania’s $100 million tax-increment financing program, under which it could apply for up to $5 million in TIF debt obligations to help cover eligible restoration projects.

Other beautification efforts might include painting a mural on the side of the office building bordering the vacant lot next to Roberto’s Pizza. It could be a community effort, the borough doing what Buttigieg says a local artist did to a bridge in South Bend: He improved its appearance by recruiting volunteers, “from local grade school kids to my mother,” to “paint the concrete and the bridge itself in a sort of giant paint-by-the-numbers project.”

Another initiative worth considering is hosting a makerspace. According to Reese, these “business incubators” are a “common economic development strategy.” They typically consist of public office space with local business leaders on hand to mentor industrious youth and help develop new businesses and startups.

Some makerspaces, such as Katapult in Dillsburg, host 3-D printers to assist local entrepreneurs and enable youth to develop their creative and technical skills.

The space could recruit interns from the Middletown Area High School to do its marketing, finance, art, website design and more. Local businesses and community organizations might offer enthusiastic support for the project.

To develop the economy, the borough must also welcome Penn State Harrisburg’s presence in the town. As Buttigieg says in his autobiography, the “unique thing about [universities] is the substance of their work. And if their intellectual endeavors are connected in the right way to the life of the community, the results are profound.”

The college engineering department, for example, is working to solve the water run-off issue on West Main Street. And if Three Mile Island is transformed into a museum after its shutdown, as rumored, the college could be a partner in the process. The engineering department might be able to lend its expertise, and the college library’s major TMI archive would be an invaluable resource.

The borough also could hire a college student of information technology to help run its website and social media. And they should continue holding regular dialogues with students through the Human Relations Commission, enlivening the community by including them, for example, in the preparation of Middletown’s community art show.

It would also be wise for the borough to make use of students’ eagerness to do community service, and help them to continue gauging interest in a public transportation service, whether hosted by Capital Area Transit or taken on by the borough, to make it easier for students and residents to access Middletown businesses.

Middletown should not view Penn State Harrisburg’s inevitable expansion as a threat, but as an opportunity for growth. More students patronizing Middletown businesses not only helps workers prosper but revitalizes the borough’s tax base and thus empowers residents.

Also mentioned at the borough meeting was whether it should offer tax abatements to new businesses. Employed alone, Reese writes, these are not the most effective means of creating jobs, as they typically engender increased investment in “personal property (equipment),” rather than “real property (new buildings).”

As Buttigieg reasons, “since many workers commute across [town] boundaries anyway, it does no good to add jobs at the expense of the next town over. Using tax incentives to achieve this would simply give away revenue while rearranging economic value within the same area.”

But this isn’t to say that Middletown should not try to learn nearby municipalities’ policies so that it can offer competitive incentives. As Reese posits in her study, the combined use of tax abatements and grants for restoration projects is a strategy “offering some promise.”

Kenneth W. Gatten III

Penn State Harrisburg student