Community Business Impact Planning

                              The Community Business Impact Statement
                                                    a means for
                    Creating Return on Investment Enhancing Local Development

Introduction:

     Before the acceptance of any development or major improvement the Federal
Government, New York State and New York City require the development of an
Environmental Impact Statement (EIS).  This document compares that which exists with
the improvement proposed to assure that the environmental quality of life is not negatively
affected.  At the December 20, 1993 meeting of the Entrepreneurial Sub-Committee of the
Economic Development Issues Advisory Committee of the Mayor-elect, Dr. Thomas V.
Sobczak proposed a method by which the total effect of proposed improvements might be
gauged against effects upon existing small business and neighborhood services in an area
affected by development.  This EIS type document would provide the Mayor and
associated City Agencies with initial knowledge not now required of developers.  It has
been the practice of prior administrations to encourage mega-development only to find that
the revenues created do not balance with the losses to jobs and tax revenues from
business communities surrounding the new development.  Without a Community Business
Impact Statement (CBIS), it is impossible to gauge the actual effect of any planned
improvement upon New York City Revenues.

Rationale:

     The degree of detail required of Developers must be associated with the value of
the planned investment in development, modified by the complete time from first use to
completion.  Further affecting the development are the tax incentives that take away
revenues, for as many as twenty (20) years, since any development reduces the income
generated from existing business operations.  The effect upon city provided services might
be severe as a shortfall in total tax and fee revenue reduces monies available to be
allocated to essential services.

     As an example, a ten (10) million dollar development with a scaled tax incentive will
produce a negative return for an initial four (4) years or more.  Correspondingly, a decline
in existing local small business will produce reduced revenue to New York City.  This
negative revenue stream will continue and increase as new start up business replaces
older existing business.  Break-even would, possibly, not occur during the start-up and
initial operation of the development.  This will cause the City of New York to lose revenues
while the developer profits from manipulation of incentives.  The Mayor will take the hit for
losses as the City Council places blame, although the Land Use Committee approved the
effort. 

     Under a formula, yet to be made specific, the developer would be assessed an
amount that allows competing surrounding area small businesses to adjust or redirect their
target markets or relocate into areas which continue the revenue stream.

     In this way the income stream will be at minimum a break even during any transition
from old businesses to new businesses.  By this action the Mayor will meet the needs of
current community while ceding to the potential for growth through change.  The Queens
West Development, along the East River in Western Queens, offers the Mayor Elect a test
bed for the development of the idea proposed by this document.

Components of a Community Business Impact Statement:

     The following would be provided by the developer when he presents his plans to the
EDC, DCP and other affected agencies.

1.   Economic History of the Affected Community(ies)

2.   Demographics of the Affected Community(ies)

3.   Current Business Uses and Revenues

4.   Revenue losses to New York City during the Development Cycle

5.   Proposed modification or enhancement to existing Demographics

6.   Post development forecast of Uses and Revenues

7.   Complete Break Even Analysis

8.   Return on Tax and Other Amenities Analysis

9.   Plan to reduce the Effect of Losses to the Area Revenue Stream

10.  Comparison of Design Guidelines and proposed zoning to zoning restrictions in
     the surrounding commercial area.

Note:    

     Dr. Thomas V. Sobczak proposes to flesh out of the proposed Community Development Plan.
Format and structure would be modeled after existing Program Management Standards in use by the Federal Government at HUD.  Dr. Sobczak can be reached at his Long Island Office (516) 623-6295.