Preserving Industry in the Face of Competing Uses

International soccer superstar David Beckham has recently put forth plans for a sleek new entertainment complex in the Miami port district. The development is expected to include a sports stadium, retail, restaurants, a nightclub and hotel.

Standing in the way, however, are Port advocates who urge the conversion of industrial land for alternative uses.

The entertainment complex, in and of itself, is a significant opportunity to create jobs and new revenue for the city, says the Miami Seaport Alliance. Yet the Alliance urges locating the complex at PortMiami would risk industrial “jobs, cruise and cargo operations, security, and the port’s promising future.”

The Alliance’s concerns are well founded. History indicates that once land has been rezoned from industrial to residential or commercial, it’s typically lost for good. Land use remains one of the primary barriers to creating an industrial growth strategy. But cities have found unique approaches.

A 2006 study conducted by ICIC, Opportunity Newark and the Newark Alliance found that Port Newark is a vital asset to the city: it is the largest port on the east coast and the 3rd largest port in the country. In response, the Brick City Development Corporation (BCDC), a nonprofit whose mission is to create job and wealth for Newark residents, helped the City to identify 15 sites near the port that were ripe for industrial redevelopment. To close on these sites, DCDC provides assistance with site selection, environmental issues, land control and entitlements.

In Baltimore, the City sought to create a new development strategy for the Inner Harbor, an area that had been on the decline since the 1960s with the decline of domestic cargo shipping. It was well understood that development along the waterfront could result in a destination for retail and residential.  At the same time, the port’s industry provided well-paying jobs in a city whose blue-collar workforce struggled to find work.

Striking a delicate balance, the City decided to protect industrial land with deep-water access along the port; shallow-water areas – which happen to be located closer to the downtown – would be eligible for redevelopment. To enforce this policy, the City created Marine Industrial Zoning Overlay Districts (MIZOD), which prohibit the conversion of industry to alternative uses for at least a period of 20 years. This time frame provides industry with the confidence to invest locally; Domino Sugar is just one such example. Previously, the encroachment of non-industrial uses forced the company into several mitigation agreements that made the location an unattractive option moving forward. The implementation of MIZOD, however, allowed the company to stay, and even expand, in Baltimore.

As ICIC research indicates, industrial growth strategies are a way to create accessible, mid-wage jobs with high levels of indirect job creation. A detailed analysis of St. Paul’s industry, for instance, finds that while the average St. Paul job pays just over $43,000, industrial jobs average $47,800. Those associated with the Saint Paul Port Authority Business Centers pay even more—nearly $50,000 per year. Moreover, within the Port Authority Business Centers, despite salaries that are 15% higher than the rest of the city’s economy, a larger share of jobs require a high school diploma or less. Finally, every industrial Business Center job yields roughly 1.6 additional jobs for the region—nearly 60% higher than the corresponding number of nonindustrial jobs.

So as Beckham’s entertainment complex searches for its new Miami location, City leaders should consider the impact of allowing nonindustrial to transform PortMiami. Valuing the Port and its industrial uses – especially with the upcoming expansion of the Panama Canal – offers a chance to connect Miami residents to well-paying jobs and foster economic growth.