Economic Development Blog

Are rising energy costs returning the worldwide economy to a smattering of local economies?  Perhaps, according to at least one economist. 

At the recent CoreNet Summit in Las Vegas, economist Jeff Rubin, the keynote speaker, made a fascinating case for why our current global economic model no longer works. He sees the paradigm shifting to more locally based economies. Why? energy costs! Continually rising energy costs will eventually make shipping both raw materials and finished goods half-way around the world too costly. China, for example, will serve other asian nations. The fuel costs, though, will force it to limit exporting to the U.S. market. These expenditures will far outweigh any wage differential. LIkewise, energy costs will lead to a renaissance in agricultural requiring localities to grow more food for their own markets. Back in the ’60s as a child, I recall grocery advertising that read “seasonal vegetables.” Those signs may very likely be making a comeback.

Another response to higher energy costs will be the impact upon land use planning. Suburban sprawl will become uneconomic. More land will be needed for agricultural. People and jobs will relocate near each other. Mother nature will eventually reclaim overbuilt land.

As a community economic developer, I find Jeff’s new paradigm a bit simplistic, but his main points are borne out in regional land use planning scenarios across the nation.

For information about Chicago Metro Area 2040 economic and land planning, visit http://www.goto2040.org/.

Chris j Manheim, President
Manheim Solutions.com

Chicago Chapter CoreNet Global Chairman, Economic Development Committee

Stimulus funding - and finding access to it - remains unclear to many corporate real estate-related companies and municipalities.  So I want to point you today to a great ARRA (American Recovery and Reinvestment Act) article by a firm that is a supporter of CoreNet Global.

One of the many financial firms exhibiting at last months CoreNet Global Summit was Ehlers, a public finance consulting firm I have had the privilege to work with over the years. In its Fall 2009 newsletter (available at http://www.ehlers-inc.com/newsletter.php), Ehlers gives a concise and easy to understand description of the American Recovery and Reinvestment Act for Local Governments.

To the commercial real estate professional, this article will provide you with an overview of how these incentives work, particularly The Build America Bonds Program, which is being offered for two years and provides a permanent federal subsidy of 35 percent of the interest expense of qualifying bond issues. These bonds are being used for a wide-variety of public infrastructure improvements: from road projects to school construction bonds. The newsletter also have a good article about the “Return of Development” from the perspective of municipal governments.

For more information, visit www.ehlers-inc.com.