How cities 'bargain' way to renewal

Three Midwestern cities are testing a new urban planning technique. And for one of them -- St. Paul, Minn. -- the technique has netted federal commitments totaling more than $40 million for three major urban development projects.

Dubbed the "negotiated investment strategy," the process is analogous to organized labor's collective bargaining. In this case, the participants are representatives from the federal, state, and local governments, as well as from the private sector.

The objective is to hammer out a set of goals for the community, determine what is required to meet those goals, and then draft an agreement that clearly outlines each participant's role in meeting the goals. The negotiations are overseen by a mediator.

For St. Paul, the process "succeeded beyond our wildest dreams," says Federal Regional Council spokesman Irving Horowitz.

The most ambitious of the Minnesota capital's three projects is a 250-acre "Energy Park." The park will contain 1,600 housing units (20 percent earmarked for low-income families), light industry, and recreational facilities.

The name of the development is derived from plans to use the latest energy conservation techniques in all of the construction. City officials expect the park to generate an $160 million in private investment above the government funding. Construction is scheduled to begin this fall.

The negotiated investment strategy concept grew out of a 1973 study of government spending in Dayton, Ohio. Conducted by the Kettering Foundation, a nonprofit research organization, the study found that state, federal, and local government spent $790 million on what were classified as local community problems. These problems ranged from police and fire protection to social security payments.

The researchers reported that "altogether, public expenditures on community problems were administered by no fewer than 270 separate jurisdictions and organizations. Even more numerous were the 724 individual program units within these jurisdictions that were formed to deal with specific problems."

They found that the impact of the $790 million was uncoordinated, untargeted, and generally the money was spent without regard to the city's overall objectives.

"When Washington would announce a new program, cities would twist themselves like pretzels to get grants," Mr. Horowitz says.

But, the Kettering report says, "restrictions and rules governing the application of the fragmented system of over 490 grants-in- aid make it extremely difficult to package them for a total effect. . . ."

Thus, says Kettering Foundation spokesman Jim Shanahan, the negotiated investment strategy was proposed "as a process for the best use of current grants-in-aid and other exercises of government authority."

The other cities involved in the test are Columbus, Ohio, and Gary, Ind. They were chosen because of the variety of problems each faces, Mr. Horowitz says.

Gary is landlocked, dependent on heavy industry, mostly black, static, and has innercity deterioration, he explains.

Columbus is fairly spread out, substantially white, but with no clearly defined focus. Moreover, the presence of Ohio State University and other institutions, with their large student populations, poses a challenge to attempts at stabilizing the population.

As for St. Paul, "It's not in that bad shape," Mr. Horowitz says. But it does face problems of age -- central-city decline, transportation problems, and Sunbelt competition.