Smart growth, smart business

Across America, sprawl is emerging as a major concern for many communities. Sprawl is the low-density, automobile-dependent new development on the fringe of settled areas, often surrounding a deteriorating city or town core. Sprawl threatens communities by necessitating costly investments in new infrastructure, discouraging reuse of brownfields, increasing traffic and congestion, degrading air and water quality and consuming prime agricultural lands and habitat. Many Americans want better options — growth patterns that protect quality of life and economic opportunity. While local governments across the country have struggled with managing sprawl for many years, growing public concern has now elevated the issue to one of national significance.

Although sprawl once seemed to be an unqualified boon to economic growth, businesses are increasingly experiencing its adverse effects. Some American business leaders are beginning to recognize that sprawl can raise the cost of doing business and reduce long-term profitability. These leaders are forming partnerships with communities to find patterns of development that can more successfully maintain economic growth and preserve livability. Smart growth, or development that promotes both economic prosperity and environmental quality, has emerged as a promising new approach.

The National Association of Local Government Environmental Professionals (NALGEP) launched its Smart Growth Business Partnership Project to identify businesses that are actively promoting alternatives to sprawl and to better understand the factors that motivate these businesses to take action. In 1999, NALGEP released the Profiles of Business Leadership on Smart Growth: New Partnerships Demonstrate the Economic Benefits of Reducing Sprawl report which presents the perspectives of business leaders engaged in combating sprawl and promoting smart growth. This report includes 19 profiles of businesses and business coalitions that have found ways to grow while respecting and enhancing the communities they call home.

Smart growth Is pro-growth

The principles of smart growth reshape the growth debate. The question now is not whether to grow, but how. "Smart growth is pro-growth," said Hugh McColl, chairman and CEO of Bank of America. "We know that developers, banks and the entire community rely on growth to fuel the economy. The goal is not to limit growth but to channel it to areas where infrastructure allows growth to be sustainable over the long term."

Smart growth accepts that new development is desired and addresses the types and locations of development that communities need to succeed. "It's not the rate of growth. It's the location, pattern and character of growth that we're concerned about," said Jean Scott, executive director of Bluegrass Tomorrow, an organization founded by Kentucky business executives to shape the region's long-term pattern of development. Smart growth directs development toward existing communities while preserving open space, farmland and critical environmental areas. Smart growth can decrease the costs of new development imposed on taxpayers, retain current business and foster new investment, increase transportation and housing choices, encourage cooperative decision-making and promote community livability. Smart growth includes tools such as brownfields revitalization, mixed-use developments and development that is integrated with transportation and planning.

Quality of life equals economic prosperity

Several key factors are motivating business leaders from a variety of sectors to become active in smart growth efforts. Business leaders are recognizing that quality of life directly affects economic prosperity and that sprawl threatens the quality of life in many communities. Business leaders overwhelmingly cited the impact of sprawl on quality of life as the primary concern spurring them to get involved in smart growth initiatives.

In Portland, Ore., for example, many business leaders actively support the city's urban growth boundary and other efforts to manage growth because it helps to maintain the area's high quality of life. "Portland's quality of life is one of our greatest economic assets," said Clayton Hering, president of Norris, Beggs & Simpson, a real estate services firm. "Should the city's quality of life begin to diminish, the city can expect economic opportunities to disappear."

Businesses in the scenic Great Lakes region have initiated smart growth efforts to protect the area's tourism industry. The Traverse City Area Chamber of Commerce launched the New Designs for Growth campaign to promote alternative patterns of development that will preserve the natural environment and maintain the character of northwest Michigan. "We see growth as desirable for this region," said Keith Charters, a former restaurant owner and the project leader for New Designs for Growth. "What is not desirable is how we are growing. Growth needs to be managed."

Sprawl threatens access to skilled workers

Business leaders are also increasingly concerned that sprawl is making it more difficult to access, attract and maintain a qualified work force — one of the most critical challenges businesses face in today's economy. Businesses are concerned that the traffic congestion, air pollution and overall decline in quality of life caused by sprawl can make recruiting skilled workers difficult. "We are living in the era of the global marketplace," said Tracy Grubbs of the Sierra Business Council, an association of business leaders in the Sierra Nevada region. "Because capital is mobile, companies will leave locations if they no longer provide the quality of life necessary to attract employees."

Some business leaders have become active in smart growth efforts because of their concerns that sprawl will undercut their efforts to meet their labor needs. For example, Adobe Systems Inc., a Silicon Valley software company, moved thousands of jobs to downtown San Jose, Calif., to take advantage of the city's amenities in order to attract and retain workers. In Atlanta, Ga., Hewlett Packard recently halted its planned expansion in the Perimeter Center area because it does not want to subject 1,000 new employees to the area's serious traffic and air quality problems. This decision helped prompt the Metro Atlanta Chamber of Commerce to undertake new efforts to address sprawl.

Making use of established infrastructure

Business leaders are also capturing the economic efficiencies of redeveloping areas with established infrastructure. Some businesses now recognize that developing in areas without existing infrastructure can be inefficient and costly. For example, utilities would rather upgrade existing power plants and transmission lines to serve a more compact population than build new infrastructure to serve sprawling, lower-density growth. In Rhode Island, Providence Energy Corp. helped launch Grow Smart Rhode Island, a multi-stakeholder partnership aimed toward better managing sprawl in the state. "I can say categorically that slowing urban sprawl would reduce Providence Energy's operating costs of supporting new infrastructure, which in turn would reduce the bills for our customers," said Providence Energy Corp. Chairman, President and CEO James H. Dodge. "Considering the same effects on sewers, water, roads, telecommunications and electricity, as well as schools, fire and police facilities and other infrastructure, the cost of living — and of doing business — in Rhode Island can be greatly reduced."


Smart growth is smart business. In recent years, more and more business leaders have begun to realize that sprawl can be bad for their bottom lines and economic competitiveness. Business support for and private sector investment in smart growth practices are key to successfully solving the problems of sprawl and sparking revitalization. Communities and business leaders need to work together in partnership to attract and maintain investment in settled locations while discouraging business exodus to ex-urban, greenfield areas.


American Farmland Trust —

Smart Growth Network —

The Urban Land Institute —

National Association of Local Government Environmental Professionals —

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This article appeared in Environmental Protection magazine, June 2000, Vol. 11, No. 6, p. 76. Photo courtesy of NALGEP.

This article originally appeared in the 06/01/2000 issue of Environmental Protection.

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