SOUTH PORTLAND — Faced with a changing local economy, flat job growth and increasing criticism that they’re anti-business, city officials are moving to expand economic development efforts and hire full-time staff to lead the charge.

For several decades, the city has counted on petroleum shipping and the Maine Mall commercial area as major drivers of a strong local economy and tax base. Both are threatened now, as the city battles the Portland Pipe Line Corp. in federal court and the growing popularity of online shopping shutters retail stores and malls across the nation.

Without full-time economic development staff, the fourth-largest city in Maine is missing out in an increasingly competitive marketplace where communities such as Portland and Scarborough aggressively promote local business opportunities, said Ross Little, chairman of the city’s Economic Development Committee.

“Even little towns in this state have dedicated economic development staff,” Little said. “It’s time for us to step up.”

A budget proposal now before the City Council calls for spending $100,000 per year to hire a full-time economic development director, an in-house position that the city has never had.

The council is also talking about establishing a nonprofit economic development corporation, like those in Portland and Scarborough, that would act on the city’s behalf. Both proposals would be funded by taxes set aside from business development.

The call for full-time staff and the formation of a nonprofit economic development corporation is rooted in a December 2015 plan from the Economic Development Committee that recommended a variety of steps to promote balanced and healthy growth.

The plan notes flat local employment growth in the last decade, with declines in manufacturing, fishing, construction, sales and office jobs. It also notes that the city’s $3.8 billion tax base – half of which is commercial/industrial property – relies heavily on large taxpayers such as the Maine Mall, Portland Pipe Line and semiconductor manufacturers.

ANTI-BUSINESS REPUTATION

Based on surveys and interviews with residents and business owners, the plan says the city has an outdated public image, tough competition with other communities, limited capacity for economic development and a reputation for being difficult for business and anti-growth.

Critics often refer to the city’s Clear Skies ordinance, which the pipeline company is challenging in federal court. The council passed the ordinance in 2014 to block the South Portland-to-Montreal pipeline from potentially reversing its flow to bring crude oil from Canada to tankers on the city’s waterfront. The pipeline is now largely dormant because Canadian refineries have no demand for foreign crude.

The Clear Skies ordinance led Republican Gov. Paul LePage’s administration to strip South Portland of its business-friendly designation in 2015. The designation had been granted in 2013 through a program established by LePage. A spokesman said the administration was “very disappointed” that South Portland would “pass an ordinance that is clearly anti-business, anti-growth and anti-jobs.”

On the upside, the economic development plan says the city has a diverse economic base, an educated workforce, highway and waterfront access, attractive neighborhoods, high-income residents, strong regional growth, demand for mixed-use districts, available commercial/industrial land in a tight real estate market, effective permitting processes and quality government services. Many of those assets and opportunities are reflected in a recently approved master plan and zoning ordinances that are designed to promote the redevelopment of the Mill Creek shopping area into a mixed-use village district.

The economic development plan calls for establishing programs to attract and retain businesses; promote entrepreneurial, small-business and workforce development; and encourage the development and redevelopment of available and underutilized properties.

Having dedicated staff to forge and oversee expanded economic development programs is a central recommendation of the plan.

For the last several years, economic development has been a part-time task assigned to the assistant city manager and shared by other city officials, depending on the differing and ever-changing job skills, interests and workday demands of the individuals involved.

Josh Reny has been assistant city manager and economic development director since October 2105, but for most of the last year he’s had little time for economic development efforts while the council searched for a new city manager.

‘THE TIME IS RIGHT’

Reny said he wanted to establish a business visitation program and develop an inventory of available commercial properties, but his duties as assistant city manager took priority while the city had a part-time interim city manager.

In previous decades, the assistant city manager position sometimes focused on human resources or Community Development Block Grant programs rather than economic development.

Mayor Patti Smith believes that the city can no longer relegate economic development to part-time status. Exactly what a full-time effort will look like, however, remains to be seen.

“I think the time is right, and I think it’s long overdue,” Smith said. “We can no longer be sleepy South Portland that’s a little rough around the edges.”

Smith said she favors having a full-time, in-house economic development director rather than establishing a separate economic development corporation as recommended by the Economic Development Committee. She’d like to see a holistic review and possible reallocation of existing municipal staffing to establish a strong economic development presence at City Hall.

“We need to get a hold of it and we need to bring it in,” Smith said.

She also believes that the city would likely have to beef up its planning and code enforcement departments, which already play a significant role in economic development. Both have extremely lean staffing, she said, and could be overwhelmed and doomed to failure if the city ramped up economic development efforts without adding staff to the departments responsible for making it happen.

Little said he supports establishing a nonprofit because it would be a more nimble agency, interacting with commercial and industrial interests out in the community, and less political than a traditional City Hall department. “It gives it some distance from city government,” Little said.

Portland City Manager Jon Jennings, who was South Portland’s assistant city manager and economic development director before Reny, said he believes that South Portland has a significant need to have a greater focus on economic development and diversify its tax base.

Jennings said a separate nonprofit corporation allows for a dedicated focus on economic development without being pulled in various directions. And he praised the work being done by economic development staffs in Portland and Scarborough, where a nonprofit economic development corporation is run by an executive director and an assistant.

But Jennings stressed that economic development is a team effort that involves all municipal employees and elected officials.

“You miss the point of economic development if you think it can be done by one individual,” Jennings said.

Kelley Bouchard can be contacted at:

kbouchard@pressherald.com

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