Chapter Four

Department of Economic and Community Development

As discussed in Chapter I, transportation infrastructure is an important element in economic development. Therefore, it is important that economic development efforts be coordinated with transportation improvements. The Department of Economic and Community Development is the state agency with primary responsibility for promoting economic growth.

Overall, contact between ConnDOT and DECD occurs on a formal and informal level to a limited degree as outlined below. While DECD's recent cluster development initiative has begun to identify certain shortcomings with the transportation system, there has not been any systematic consideration of the relationship between transportation investments and the strategic economic needs of the state by either DECD or ConnDOT.

Connecticut's Economic Development Strategy

Recently, some states, including Connecticut, have expanded on what has been termed the traditional approach to economic development (i.e., the targeting of individual companies; the granting of special loans, grants, or other incentives; and an ad-hoc collaboration between economic development agencies and the private sector) and adopted a cluster-driven strategy. In Connecticut, this came about through a series of initiatives by the legislature and the governor over the last decade.

In the early 1990s, the idea of industry clusters surfaced as a way to revitalize Connecticut's economy. In 1995, DECD was reorganized, creating the Industry Cluster Division, and the initial clusters that drive Connecticut's economy were identified. In 1996, Public Act 96-257 required DECD to proceed with industry cluster development and the commissioner created the Industry Cluster and International Division as part of a larger reorganization of DECD.

In 1997, Governor Rowland recruited over 100 company executives throughout Connecticut to serve on five industry cluster advisory boards to analyze the constraints on growth and the opportunities to improve competitiveness, innovation, and productivity. In 1998, the cluster advisory boards produced the report Partnership for Growth: Connecticut's Economic Competitiveness Strategy. This report established the foundation for Connecticut's current economic development strategy.

The cluster approach. An industry cluster is defined as a grouping of companies and industries in close proximity, interconnected by the markets they serve and the products they produce, as well as the suppliers, trade associations, and educational institutions with which they interact. Among other things, industry cluster economic development emphasizes: the involvement of large groups of related companies; a commitment to establish an environment that gives a broad range of companies the ability to compete in global markets; and new types of collaboration among business competitors and between government, educators, and the private sector. Clusters are believed to be the platform upon which the economy can flourish. The state, regional, and local economies grow when related and interdependent industries in a particular area work collaboratively. An example of a cluster is Silicon Valley in California where numerous computer and related technology companies are concentrated.

As Figure IV-1 shows, an industry cluster contains three important elements: leading industries; linkage industries; and responsive economic foundations.

• Leading industries are the core and driving force of an economic cluster. They are usually major firms that are nationally or internationally competitive, and sell their products outside the geographic region.
• Linkage industries support the leading industries by supplying raw materials, semi-finished products, parts and components and other specialized services.
• Economic foundations are the overall economic infrastructure in a geographic area and have a major effect on the growth and competitiveness of all the industries and clusters. Advanced infrastructure refers to the basic and advanced transportation, energy, waste disposal, and communications systems essential for a highly productive economy.

The role of the state in this effort is to identify and nurture clusters. To date, three clusters -- BioScience, Aerospace Component Manufacturers, and Software/Information Technology -- have been activated. Clusters are activated when companies in related industries come together formally as an organized industry cluster. While corporate leaders activate and drive the cluster's activities, the public sector supports and facilitates cluster activation. DECD has thus far provided $425,000 in seed money to the three activated clusters and will leverage over $1 million worth of in-kind matches and private investment. Other than what was identified in the Partnership report, described below, no assessment has been made of the cluster's infrastructure needs and if any changes could assist in promoting this economic development effort.

Another five clusters are being investigated. Responsibility for overseeing the cluster initiative is shared between DECD and the Connecticut Economic Resource Center, a private, non-profit organization. The goal is to phase-out government support for the clusters and allow businesses to administer and fund on-going cluster activities.

Transportation recommendations. The Partnership study identified a number of findings and recommendations related to the transportation infrastructure, with the primary recommendations involving the development of Bradley International Airport. Other areas of concern included congestion on the I-95 and Merritt Parkway corridor, the need to improve southern Connecticut's airport accessibility, enhancement of the northeast corridor high-speed rail service, and endorsement of initiatives related to transportation services that enable former welfare recipients access to jobs and job training.

As a result of the Partnership study, the governor created the Governor's Council on Economic Competitiveness and Technology (or Governor's Council) in December 1998 to coordinate the various industry advisory clusters. The Governor's Council is made up of a cross-section of industries, legislative leaders, educational institutions, labor representatives, officials of industry associations, and several state commissioners.

A Transportation Infrastructure Advisory Team was established, as a sub-committee of the Governor's Council, and it focused its activities on the development of Bradley. The advisory team sponsored two studies. The first, issued in 1998 by Frasca and Associates, examined the way in which airports were managed in the U.S. and internationally. The report pointed out the increasing commercialization of airports and that private/public partnerships were becoming a more prevalent form of airport management.

The purpose of the second report, by Schiphol Project Consult B.V., was to assess various aspects of Bradley's operation including customer service, financing, overall operations, management, and facility design. The report, issued in December 1999, was critical of the operation and management of the airport.

The Governor's Council formed the Bradley Advisory Group in response to the Schiphol report to develop recommendations related to changing Bradley's mission, organizational culture, and governance and management structure. This advisory group, along with the Leadership Committee of the Governor's Council, issued a report in April 2000 recommending the creation of a Bradley Board of Directors with either a public/private partnership or the establishment of an airport authority. It was decided this new entity should develop a mission and a vision for the airport.

In May 2000, the Governor issued an Executive Order creating the Bradley International Airport Executive Council to work with ConnDOT to develop: long-term goals and a strategic plan, master plan, business plan, marketing plan, capital and operating budget, and a management team that will be held accountable for operating results, as well as any legislative recommendations necessary to enhance the operation of the airport. The council terminates on December 31, 2001.

DECD Contact and Coordination with DOT

Aside from the studies of Bradley airport, there has not been any assessment or any other effort by DECD that has examined the extent to which the transportation infrastructure is meeting the needs of the clusters or the state's broader economic goals. However, DECD and ConnDOT do have contact at various levels on a regular basis.

On the formal and recurring level, DECD's contact and communication with ConnDOT occurs through memberships on several boards and commissions, usually through statutory mandate or by practice. This is typically a purely advisory function. These include:

• Bradley International Airport Commission;
• Connecticut Economic Conference Board;
• Connecticut Coastline Port Authority;
• Connecticut Tourism Council;
• Connecticut Rivers Advisory Committee; and
• Scenic Roads of Connecticut.

DECD also works with ConnDOT on an ad-hoc, project-by-project basis. This may include membership on specific ConnDOT sponsored project committees or project specific coordination. For example, specific project committees for recent corridor or major investment studies sponsored by ConnDOT include the Advisory Committee for the Hartford- New Britain- Busway and the Interstate-84 Major Investment Study.

Project specific coordination refers to on-going processes where the activities of the two agencies intersect. This includes such activities as:

• State Traffic Commission permit coordination;
• surplus DOT property reuse/disposition; and
• Connecticut Industrial Parks Development Program project masterplan (municipal development plan) preparation, review and approval.

In addition, both DECD and ConnDOT are required to review each other's projects because of requirements in either the National Environmental Policy Act (NEPA) or the Connecticut Environmental Policy Act (CEPA). Significant projects under both CEPA and NEPA require an evaluation that outlines potential social, economic, and environmental impacts, identifies alternatives, and recommends measures that may lessen certain impacts. The type of environmental evaluation required depends on the extent of the project. If a project includes both federal and state funding sources, then federal NEPA requirements will be followed and submitted to both the state and federal regulatory agencies. Projects that are only state funded must adhere to CEPA requirements and are ultimately submitted to the Office of Policy and Management.

DECD tries to coordinate their activities with all affected state agencies early in their process to assure compatibility with the planning goals of other agencies. DECD has a multi-stage process for project development. In Stage I, DECD will circulate among state agencies information about a project including a description of the project's scope, its location, and site maps. ConnDOT will make a cursory examination of access issues and potential impacts. ConnDOT will provide feedback and indicate any effects on current or planned transportation improvements for the area. There is a required sign-off by each agency for each project. There also may be occasions where DECD and ConnDOT jointly undertake projects, such as those involving surplus ConnDOT property. In addition, DECD and ConnDOT participated in a joint study and funding effort to revitalize the State Pier in New London.

DECD frequently provides funding for transportation improvements for individual business or large development projects. ConnDOT is prohibited by federal regulation and state statute from constructing transportation improvements that benefit an individual business. DECD, though, will participate in a variety of projects that may require transportation improvements of varying magnitude. These improvements can take the form of new or improved roads, intersection improvements, mass transit, waterborne transportation, or air freight. For example, DECD has funded all internal roads for 60 industrial parks statewide, including major intersection improvements such as Route 334 in Ansonia and Route 229 in Bristol.