Making good use of economic development finance tools.

• Author: Mucha, Michael J.
• Position: Book review

Practitioner's Guide to Economic Development Finance:

Building and Utilizing the Development Finance Toolbox

By Toby Rittner

Council of Development

Finance Agencies

2009, 112 pages, $55

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Many local governments place a high priority on creating and developing a healthy community that promotes economic growth, creates jobs, and attracts business and citizens to the area. Alternately, others might emphasize retaining existing industries and maintaining an attractive workforce. Whatever their specific goals, governments must make use of development finance, an approach intended to assist economic development projects by using public resources to support private-sector investment. In Practitioner's Guide to Economic Development Finance: Building and Utilizing the Development Finance Toolbox, author Toby Rittner explains options and tools governments might have at their disposal to help them achieve their economic development goals.

Finance directors who plan to use development finance effectively need a thorough understanding of all the tools, techniques, programs, and other resources that are available. These may include loans, equity tax abatements, tax credits, the offer of a guarantee, collateral or some other form of credit enhancement, gap financing, remediation of environmental concerns, incentives, and grants. Ritter explains that development finance is a complex undertaking that requires a considerable amount of knowledge and training. Development finance employs many tools, but education is the key to making them more effective. Success can be achieved by educating staff and leadership.

TOOLKIT OVERVIEW

This book starts educating readers by breaking down the many kinds of financing into categories of tools and the types of challenge each tool is most effective at addressing. The book explores options within each category. Having achieved an understanding of the options that are available, finance directors can then do additional research to further expand their understanding of development finance.

The author identifies five practice areas and then pulls together various types of financing that are likely to be useful in each area:

* "Bedrock tools"--bonds--work with government projects, established industry and development and redevelopment.

* "Targeted tools"--tax increment finance, special assessment districts, government districts, and project-specific district financing--work with established industry and...