Industrial Bureaus
Professionalization affected ED directly in the form of the “industrial bureau.” Industrial bureaus were departments or subordinate units whose function was to construct, operate and manage industrial parks as sort of “shovel-ready” locations for new industry and business to relocate or expand in. Big City chambers expanded the mission, hired staff and allocated substantial resources to include formal attraction/retention programs. Industrial bureaus became commonplace in the early years of the twentieth century. Consider the evolution of the Scranton Pennsylvania chamber. Resulting from an 1867 meeting in a grocery store, the Scranton Merchants Association formed to “encourage the economic growth of the city.” The Association—later renamed the Scranton Board of Trade, then Scranton Chamber of Commerce and in 1914 the Scranton Chamber—formed a subsidiary Industrial Development Company that operated the chamber’s ongoing economic development programs. Even second-/ third-tier municipalities by World War I had developed industrial bureaus. By the 1920s, industrial bureaus served as the lead agency of most jurisdictional ED programs; their staff were the principal sub-state economic developers of the era.
What was the typical chamber approach to early twentieth-century economic development? Chamber involvement in economic development reflected their organizational conviction that chambers possessed the best judgment as to how communities could benefit from private sector economic growth. Chamber access to business skills, acumen and techniques meant they knew that dynamics of firm profitability could be tapped to secure the larger community purpose. Manufacturing firms were their principal target, and Big City chambers, already sensitive to dependence on agglomeration, searched for a productive mix of businesses and business sectors to create a balanced (i.e. diversified) economic base.
Industrial profitability required, beside market demand, a physical presence (building or facility), machinery, low-cost labor, presence of critical skills, access to transportation modes and financing. If a labor market existed, then the principal needs of business were financing and real estate related. Chambers could recruit a workforce when needed. Community-level business climate always mattered in the chamber mentality. Low taxes were always a favorite—so tax abatement was important. Having a shovel-ready facility or site was a central tool in their attraction strategy. This, of course, meant working with the real estate exchanges. Economists labeled it the “cost-reduction” approach; academics subsumed it into a “first-wave” approach to economic development.
We know that by 1928 community “bonuses” or incentive packages were widespread, but controversial. A survey conducted by the American Industrial Development Council (AIDC) (Denn, 1961, p. 9) identified 102 cities that had developed some form of bonus/incentives (seven types of bonuses were discussed). The US Chamber prepared a summary of industrial development activities in 1926 for 87 cities that included 618 firms, of which 302 were financed locally; 130 were of local origin with outside capital; 98 were branch plants; and only 88 were removals (relocations) (Denn, 1961, p. 6). That meant retention was the more prominent Big City chamber strategy. Relocations were about 15 percent of annual chamber activity.
The Industrial Park
The earliest known American industrial park—located in Passaic New Jersey—was started by Alexander Hamilton and some wealthy cronies in 1791 (Eisinger, 1988; Peddle, 1993). Hamilton, chronically interested in manufacturing, believed urban areas were where it would best prosper. Anyway, industrial parks in some form have been with us from the very beginning of our nation, although they were less common in the nineteenth century.
Much of early manufacturing was located on single-site developments on waterfronts, along rivers and bodies of fast-moving water. As the early industrial city expanded, manufacturing moved to periphery areas. Manufacturing facilities were not especially good neighbors; so, in an era of walk to work or catch a streetcar, only short distances separated work from residence. The haphazard location pattern of manufacturing was a prime reason zoning advocates in the early years of the twentieth century were so successful. Peddle defines an industrial park as “a large tract of land, subdivided and developed for the use of several firms simultaneously, distinguished by its shareable infrastructure and close proximity of firms.” He observes that the industrial park “accentuates the compatibility of the industries found therein” (Peddle, 1993, p. 168); or, in other words, that an industrial park establishes covenants, design standards, subdivision requirements and zoning restrictions to ensure that future development of the park does not inflict unnecessary land use issues on occupants, and preserves the investment value.
The first known planned “industrial estate,” Trafford Park Estate, was built in 1800 Manchester (England) along the Manchester Ship Canal (Beyard, 1988, p. 13). Trafford Park remained the world’s largest planned industrial estate through 1950. Conventional wisdom has it that the Adam and Eve of modern American industrial parks descended from the Chicago Clearing Industrial District (1899–1900) founded by Ogden Mills and the Isham family.20 The Clearing Industrial District was a real estate innovation, not a spinoff from rail activities. The 500-acre park first revolved around rail and cattle classification yards, but by the 1920s benefited from the nearby construction of Chicago Municipal Airport—by 1948 the Clearing Industrial District had added 1300 acres to meet airport demand.
Contemporary with the Clearing Industrial District were two other pioneering Chicago districts: Original East District—260 acres situated along the railroad, adjacent to the Union Stock Yard, 3.5 miles from Downtown Chicago (complete with its own electric generation facility); and Pershing Road District (1916, with a greenbelt). The two parks were railroad-related investments and the latter, adjacent to a highway, served as an early multi-modal center. Common to industrial parks in this period was a gridiron layout that provided access rail access to each parcel, and generated congestion at grade rail (level) crossings (Beyard, 1988, pp. 13–18).
The same turn-of-the-century time period also saw the development of the North Industrial District in Kansas City and Industry City, a part of the Bush Terminal in New York City … Rail service was a central feature of the parks … Building on these early successes, railroads themselves entered the industrial park business during the 1920s and 1930s. (Peddle, 1993, p. 109)
In 1922 the owners of the Chicago Central Manufacturing District constructed the original Los Angeles 280-acre Vernon District. Eventually acquired by the Atchison, Topeka and Santa Fe Railroad, the district became part of the huge Los Angeles Central Manufacturing District. In this early period, industrial parks were “developed entirely by private interests (often railroads in the early days) without public subsidies” (Eisinger, 1988, pp. 177–8). My research indicates that northern/midwestern industrial bureaus operated industrial parks during the 1920s and 1930s—most industrial bureaus spun them off into privately owned/operated parks. My unconfirmed suspicion is that many such industrial parks were essentially private investments housed within the chamber apparatus. With professionalization and Progressive leadership this relationship might have been “too close” to survive scrutiny. Still, a 1928 AIDC survey revealed that many chambers still supported industrial parks.
Industrial parks owned and operated by governmental EDOs first occurred in the early 1940s, owing their existence to the transfer of former military bases to local public entities and jurisdictions (Chico, California is an example).21 Today the usual public entities are cities and counties. State participation is uncommon; only a dozen states maintained industrial park programs in 1985; all but four of the states limited involvement to planning and development, relinquishing ownership and operation to the private sector municipalities. New Hampshire was the first state to create an industrial park authority in 1955 as a companion to its pioneering direct loan program. As late as the mid-1960s most industrial parks, as demonstrated by an Urban Land Institute (ULI) survey of 250 such parks, remained privately owned and operated: the survey found that only one in five was “developed with public assistance.”
Ron W. Coan 