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Addressing Crime Is Number One Economic Development Priority

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.  

By David Robinson
September 26, 2014

Robinson septThe safety of the public and their neighborhoods is the most important job of government. All the efforts to build infrastructure, develop great schools, recruit high-wage jobs and provide great public services and recreational amenities all pale in comparison to the importance of crime prevention strategies. Without safe streets, residents move, businesses relocate, schools collapse and neighborhoods that thrive become shells of their existence. Many strategies exist to address crime—most of these involve modern law enforcement. However, many public administrators forget how economic development strategies can help address neighborhood crime.

A community’s quality of life impacts its regional and statewide efforts to retain and attract high-wage jobs. Corporate site location consultants, who negotiate billions in economic development deals for their company clients every year, indicate the quality of life of a community is a factor in a company’s decision about where to locate. While quality of life does not make up for poor infrastructure, there are some factors that impact a company’s decision to stay or go from a community or neighborhood. These factors can include:

  • Low quality workers.
  • High taxes.
  • Lack of available sites.
  • Safety of the community.
  • Availability of workforce housing.
  • Quality of schools.
  • Access to quality health care.
  • Cultural and recreational amenities. 

Organizations such as the United Nations (U.N.) have also recognized the serious impact crime can have on a community and a nation. In its 2012 U.N. International Day against Drug Abuse and Illicit Trafficking, the president of the General Assembly noted the troubling growth in illicit trafficking of drugs, people, firearms and natural resources. The U.N. estimated in 2009 the value of illicit trade around the globe was $1.3 billion and the drug trade alone constituted $322 billion. Criminal groups that are fostering a community of violence and bloodshed control this massive illegal trafficking. The Mexican Employers Association, Coparmex, estimates the cost of crime to the Mexican economy was actually larger than the nation’s economic growth rate- 1.3 percent of the nation’s gross domestic product is reduced by crime compared to the country’s 2013 growth rate of 1.1 percent.

Mexico is not the only region in the world where crime affects economic growth. New York City faced similar struggles in the 1980s. It serves as the best national model for how addressing crime with smart policing and economic development turns a neighborhood around and rebuilds a global entertainment and business center. New York City’s Times Square is where this safety and economic turnaround took place. First, city and community leaders knew Times Square was a disaster because of crime. In the 1984, according to Police Chief magazine, Times Square had over 2000 crimes and only employed 3000 people in legitimate businesses producing $6 million in property taxes.

New York City police entered the information age and launched Compstat. CompStat stands for “Computer Comparison Statistics” and it combines modern management and accountability tools with the information age to identify where specific crimes are happening and what is being done to address that specific crime. CompStat collects, analyzes, maps and reviews crime data on a regular basis and develops and implements strategies in a short period of time to address this crime and hold police accountable for their performance as measured by the data.

CompStat saved Times Square. The Midtown South New York City Police Precinct was applying the early stages of arresting low-level offenders for petty crimes and tracking crime by geographic location. By the end of 1991, Times Square’s crime rate was 12 percent below 1984 levels according to Police Chief magazine.

New York City next attacked the sex industry that had invaded Times Square. Starting in the mid 1980s, New York City began to condemn for economic blight Times Square’s sex shops. In a short period, the city took down two thirds of the sex shops and drove the industry out of Times Square.

Finally, New York City used a range of economic development strategies to recruit companies to Times Square. According to a 2010 New York Times story, tax incentives were an important tool used to recruit major companies, including:

  • George Klein received a $240,000,000 tax abatement.
  • Morgan Stanley received a $40,000,000 abatement.
  • Disney received a $25,000,000 low-interest loan.
  • Ernst & Young gained a $20,000,000 incentive package. 

Based upon this three part strategy, Times Square is not only safe again but is booming economically. According to a recent economic impact study from HR&R Advisors, Times Square represents only 0.1 percent of New York City’s land area but 5 percent of New York City’s jobs are located there and the district generates 10 percent of the City’s economic output. This same study found Times Square hosts 200,000 jobs with approximately 70 percent of them in finance and the creative industries. The indirect economic impact of Times Square adds an additional 190,000 jobs throughout New York City and the neighborhood contributes $1,100,000,000 in annual taxes to New York City and $1,300,000,000 in annual taxes to New York State. Times Square turned the corner in large part because the policy has restored order to this American icon.

Addressing crime is a critical issue for all communities. Remembering that economic development strategies are part of that approach is often overlooked but is an important element of any crime reduction strategy for public administrators.

Author: David J. Robinson is principal of The Montrose Group, LLC, a Columbus, Ohio-based business consulting that has gained over $100 million for public and private clients. Robinson is the author of Economic Development from the State & Local Perspective and serves an adjunct professor at the Ohio State University’s Glenn School of Public Affairs.

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The American Society for Public Administration is the largest and most prominent professional association for public administration. It is dedicated to advancing the art, science, teaching and practice of public and non-profit administration.

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