Many regions and cities around the nation have made connections between economic development and neighborhood improvement, job creation, and local business development. Linkage strategies are deliberate policies or programs that make those connections, ensuring that lower income residents and inner city communities benefit from the economic growth taking place either within the municipality in which they live or in the region of which the locality is a part.

In this summary of linkage strategies, based upon an analysis conducted by Alan Mallach for the New Jersey Institute for Social Justice, we identify leading linkage efforts around the United States and highlight their potential in the greater Newark area. While additional work remains to be done to fully evaluate how these strategies can be applied in this area, it is clear that these strategies offer significant opportunities at this time and in this place.

Linkage strategies are a tangible recognition that a rising tide does not necessarily raise all boats-that the benefits of economic growth do not flow automatically to urban residents and neighborhoods. These benefits flow to those that are best positioned to take advantage of them by virtue of their location, skill, information, familiarity, access, relationships, and power. Since many urban residents lack these connections or attributes, deliberate action is needed to ensure greater participation and more equitable access to economic opportunities. As the following examples illustrate, communities around the country have successfully and innovatively made the connection between economic growth and development on one hand, and the needs of lower-income residents and communities on the other. These experiences offer valuable lessons for a revitalized, growing Newark facing both the challenges and opportunities of the 21st Century.

Newark has many competitive advantages, including the following:

• It remains a major employment center with over 100,000 private sector jobs and a viable, although reduced, industrial base;
• The city and surrounding urban communities have large tracts of land available for development;
• Significant amounts of new housing have been developed in recent years by the City and local CDCs increasing the city's livability;
• The city enjoys ease of access to New York City, western suburbs and the entire Northeastern Corridor through an unparalleled air, sea, train, and highway transportation system;
• The surrounding regional economy is strong and includes several internationally competitive growth sectors including pharmaceuticals, healthcare, and transportation;
• The city is home to a concentration of universities with over 40,000 students, research capabilities and other resources;
• The city boasts a remarkable base of committed and skilled community-based organizations, local and national foundations, civic groups, an active corporate sector, and other important intermediary organizations; and
• The city has a large number of historical, cultural and entertainment assets and diverse neighborhoods, new housing and existing housing capable of being revitalized.

Added to these assets are over $4.5 billion in projected expenditures for school, transportation, downtown and potential arena development - without even considering private market development - in Newark and its immediate vicinity over the next several years.

In the past, given the city's experience with disinvestment and its negative image, it may have been necessary to offer incentives to recruit firms, and generating economic and construction activity may have been a strategic and responsible end in itself. Today, looking at both Newark's promise and continuing challenges, new approaches are possible that build on the city's efforts, and ensure that future development activities directly benefit the city's neighborhoods and its lower income residents. This is especially important in the case of an economic downturn which tends to fall most sharply on those already isolated from development activity.

LINKAGE CAN EXPAND LOCAL EMPLOYMENT AND BUSINESS DEVELOPMENT OPPORTUNITIES

Despite the shrinkage of the urban industrial base, many cities, including Newark, still contain a strong core of industrial activity and economic clusters - a critical mass of firms with common interests in a product, service, mix of jobs skills or industrial sector - and other features that make them attractive locations for light industrial firms and other small businesses. Linkage strategies aimed at industrial retention and expansion have proven to be effective vehicles for preserving and creating jobs for inner city residents. Such strategies involve providing existing firms with the support needed to stay competitive and grow within the community, while simultaneously attracting new companies for which the city offers comparative advantages, all tied to the use of incentives to hire and train residents such as those offered by the Workforce Investment Act and other programs.

In Cleveland, Ohio, the Westside Industrial Retention and Expansion Network (WIRE-NET), a partnership among local businesses and CDCs, provides a wide range of services to both businesses and community residents to facilitate both business growth and opportunities for local job seekers. Wire-Net maintains a job candidate bank, fills job orders from area manufacturers, offers expert manufacturing assistance programs, facilitates business to business networks, and provides specialized training and outreach including youth career development. The organization has negotiated with local community colleges to develop specialized curricula to support the training needs of local businesses. These value-added services extend well beyond what any one firm would be able to achieve on its own. Newark, with a still viable manufacturing base, substantial vacant or underutilized land suitable for industrial facilities, potentially competitive firm clusters and outstanding location and transportation assets, is in a position to examine this and similar initiatives as a part of a high-quality industrial development strategy.

TARGETED HIRING AGREEMENTS

First Source Agreements are a potentially powerful tool for creating job opportunities for local residents. Under these agreements, firms that receive economic benefits from a municipality must provide qualified local residents with the first opportunity to interview for jobs. In Portland, Oregon, a first source agreement has been in effect for nearly thirty years, based on a win-win orientation that adds value to local employers by saving them costs and time associated with recruiting. The Portland Development Commission established a central clearinghouse called JobNet, with the authority, credibility and human and financial resources to do an effective job. The clearinghouse developed expert knowledge of the variety of resources to assist employers to hire and retain local, low-income workers, building strong connections between itself and a comprehensive network of workforce preparation and retention agencies. Many of the same resources already exist in Newark and could potentially be mobilized to create a strong information and job access system for local residents.

SECTORAL INITIATIVES -- CONSTRUCTION

Given the multibillion-dollar public investment in construction in northern New Jersey over the next several years, a particular focus on the employment and business development aspects of the construction sector is warranted. The construction trades combine middle class wages with entry requirements that can be met by many urban residents. Efforts to prepare local residents to join the building trades have been successfully implemented, using pre-apprenticeship programs that provide basic skills development and worksite exposure. In Hartford Conn., such a program - in conjunction with a hiring requirement imposed by the city - led to over 2,000 local residents being placed in union jobs,. Similarly, the scale and duration of construction-related expenditures - particularly multiyear efforts such as the state's school construction program - offer sustained opportunities for small business growth. The Port Authority of New York and New Jersey has developed a number of programs that address systemic issues of bonding, access to finance, bidding, and contractor training specifically in construction and construction-related industries.

OPPORTUNITIES FOR LOCAL AND MINORITY ENTREPRENEURS

In addition to the opportunities offered by construction in Essex County, every major office, institution or entertainment facility requires many suppliers of goods and services. Retail facilities can also provide new opportunities for niche retailers. To ensure that local firms are able to maximize these opportunities, specialized and accessible technical assistance, training and financial resources are required. Appropriately structured venture capital to support emerging firms is particularly scarce. The Reinvestment Fund, a regional fund based in Philadelphia, has established a Venture Fund that focuses on firms in the early and expansion stages of their business, with competitive advantages associated with proprietary interests in a product service area, retail concept, product or technology. Each company assisted also agrees to commits to fill applicable job openings with qualified low-income individuals, with specialized assistance in hiring and training facilitated by the Fund. A similar venture capital fund, in view of the business opportunities likely to be available during the coming years, could make a major contribution to the growth of inner-city businesses and the creation of additional job opportunities for inner-city residents.

LINKAGE CAN BUILD VIBRANT NEIGHBOROODS AND DOWNTOWNS

Many cities across the nation including San Francisco, Seattle and Los Angeles have undertaken a variety of efforts to link downtown and waterfront development to the production of affordable housing and neighborhood revitalization. The City of Boston, for example, assesses a linkage fee on all commercial real estate developers. The fees are managed and deployed by a Housing and Job Trust Fund, overseen by a board appointed by the mayor. While the Trust Fund has been subject to criticism in terms of the manner in which monies are allocated, over $53 million has been raised over the past fifteen years, while $123 million is projected to be raised over the next 30 years. With these funds, Boston has created over 2000 units of affordable housing and supported over 50 job training and childcare programs for local residents. There appears to be little controversy about the linkage concept in Boston, and private developers do not find this fee to be a deterrent to doing business in the city.

Developer fee contributions are already widely used in New Jersey. As of 2000, nearly one hundred different municipalities, including Moorestown, West Orange and Weehawken, had collected over $91 million from developers under development fee ordinances. Under New Jersey law, these fees can only be used for housing and housing-related projects. Newark could consider a development fee ordinance to provide for a base fee as permitted by state regulations. A larger fee with more flexibility in its application could be tied to the value of any discretionary benefits - such as tax abatements - granted by the city.

Another example of linkage comes from Los Angeles, where a coalition of local organizations has established a Community Benefits Plan in conjunction with the establishment of a Sports and Entertainment District near the Staples Arena. Under this plan, the developers have agreed to provide affordable housing, open space, improved neighborhood security and other features as a key component of their project plan. Although of great benefit to the neighborhood, these initiatives represent only a small part of the overall cost of developing the Sports and Entertainment District. The developer and the neighborhood both benefit. Examination of this approach holds potential for Newark, as downtown revitalization initiatives - in particular the proposed arena - could extend downtown development activity into adjacent neighborhoods.

LINKING NEWARK TO THE LARGER ECONOMIC REGION

In the greater Newark region - including Essex, Union and Morris Counties - the lion's share of job growth is still taking place outside the urban core. Any strategy to change economic conditions in urban neighborhoods must better connect the people of those neighborhoods with the region's economic activity. Making these connections may involve improving transportation, providing better information about suburban job availability and preparing inner-city workers to more effectively complete by linking training more closely to job opportunities.

IMPROVING TRANSPORTATION ACCESS

One of the greatest barriers to regional opportunities is lack of access. Suburban job growth is largely located in areas that are heavily dependent on private cars, while many inner-city residents lack dependable cars or valid driver's licenses, and many neighborhoods are poorly served by public transportation. Without access, no worker, however capable, will be able to obtain and hold a job.

Since jobs in the suburban Newark region tend to be highly clustered in a few key areas - such as Parsippany-Troy Hills or Bridgewater - cost-effective solutions, drawing on the large number and variety of transportation assistance programs that exist, are available. In recent years, there has been extraordinary growth in the number and variety of programs around the United States designed to improve access for inner city and low- income workers to suburban jobs. This growth has arisen not only from the recognition of the importance of this issue, but also from the availability of significant funding for transportation programs and services from four separate Federal sources:

• The Jobs Access and Reverse Commute (JARC) funding pool in the Transportation Equity Act for the 21st Century (TEA-21).
• Temporary Assistance for Needy Families (TANF) block grant funds
• Welfare to Work grants from the Department of Labor
• Workforce Investment Act funds through county and local Workforce Investment Boards (WIBs)
• Hundreds of millions of dollars are available annually for transportation access initiatives

While some communities have created new bus routes, or provided low income workers with vouchers to pay for public transportation - or even bought workers cars - another approach, which is becoming more widely used, is often referred to as transportation brokering, where a coordinating agency or clearinghouse links a wide range of available transportation services to households in need. One notable reality of community-based transportation services is that there are a substantial number of vehicles - cabs, vans, minibuses, buses, etc. - in any city or metropolitan area that ate utilized for only a few hours per day. The most obvious example are school buses, which are typically used for two hours or so in the morning and two hours or so in the afternoon or evening, five days a week, sitting idle the rest of the time. The role of the transportation broker is to create a network out of the variety of services available in order to maximize it's the mobility of the area's lower income households. In many states, including Massachusetts, Maryland, and Vermont, brokers are expanding their client networks and working toward the creation of community transportation systems.

There are few urban areas in the country better situated for the comprehensive application of linkage strategies than Newark. One of the most fundamental lessons from many of the best practices reviewed is the extent to which their successes depend on the existence of close cooperation and interaction between the public and private sectors, nonprofit organizations, training and educational institutions and community groups. Broad coalitions are needed to ensure that the public and private sectors address key issues, while cooperative networks are needed to ensure that the initiatives actually bring results. Newark has the ability to become a national model of a city and a region that uses economic development resources and opportunities to make a difference in the lives of lower-income citizens and urban neighborhoods.

This summary, with its selected examples of effective, successful, linkage programs, is offered as food for thought for people in Newark and its surrounding communities who are concerned about the need to bridge the gap between the city's lower income citizens and the opportunities that the growth and development of the city and the region offer. A more extensive and detailed policy paper describing further opportunities for linkage and their potential applicability to the greater Newark area will be available shortly from the Institute.