1.15.G Intro to ED - Glossary

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1.15.G Intro to ED - Glossary
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2013-10-20 16:57:57
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Economic Development
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1.15.G Intro to Economic Development - Glossary Terms
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  1. What is Absolute Advantage?
    Term used when comparing two economies.  An economy has an absolute advantage over another when it can produce more of a product, simply because it has more resources.  Absolute advantage says nothing of efficiency, nor opportunity cost.
  2. What is an Ad Valorem Tax?
    A tax levied on the value of the taxed item.  Local property taxes are generally ad valorem taxes.
  3. What is Adaptive Reuse?
    The rehabilitation of an old property for a new purpose.
  4. What is AFDC?
    Aid to Families with Dependent Children provides income assistance to low income families.  This has been replaced by TANF, Temporary Assistance to Needy Familes.
  5. What is Amortization?
    The liquidation of a debt via a specified schedule of payments.
  6. What is an Anchor, or "Key," Tenant?
    The most important tenant, often the largest, in a development project whose lease is usually instrumental in securing financing for the project and in attracting other tenants.
  7. What is Affordable Housing?
    Housing which consumes no more than 30% of household income.
  8. What is an Angel Investor?
    An investor who provides equity investment to start-up businesses.
  9. What is Assessed Valuation?
    The monetary worth of a property for the purposes of taxation.  Total assessed valuation denotes the sum of the monetary worth of all taxable properties within a jurisdiction.
  10. What are Assets?
    Business property acquired at a measurable cost, the use of which is related to the business operations.  (See also Fixed Assets.)
  11. What are BOTs? (Build, Operate, Transfer)
    Process in which a private company finances, builds, and operates an infrastructure system for a fixed time, during which the government has a regulatory and oversight role.  At the end of the project, usually 15 to 25 years, the system is transferred back to the government.
  12. What is a Bankable?
    A person who can qualify for a loan at a commercial lending institution.
  13. What is a Base Industry?
    Also known as "export" or "primary" industries, base industries sell or export their products and services outside the community and bring new dollars into the community, increasing the total dollars that circulate within the community and that are spent on non-base industries.
  14. What is Benchmarking?
    Quantifiable measures of economic competitiveness and quality of life that can be collected on a regular basis.  They are used to measure a region's economic status and progress against comparable regions.
  15. What is a Bond?
    A certificate of debt issued by a government or corporation, guaranteeing payment of the original investment, plus interest by a specified future date.
  16. What are Bond Banks?
    State-level agencies that assist local governments in acquiring capital financing, usually through debt issuance.  In other words, local governments issued bonds brought by a state-established bond bank, thereby lowering the costs of issuance for the individual jurisdiction by sharing fixed issuance costs with other members of the bond pool.  

    Bond banks are especially helpful to smaller communities that typically have lower budgets and cannot afford the true costs of bond issuance.  

    Protecting many bond banks is the provision that they may intercept state aid to a local government if that government defaults on its obligation to the local bank.
  17. What is a Bond Rating?
    An estimation of the relative credit-worthiness of a corporation or governmental unit.  

    Private investment service companies make such estimates, generally designating the most credit-worthy borrowers as AAA.
  18. What are Brownfields?
    Commercial or industrial sites that are abandoned or underutilized, and have real or perceived environmental contamination.
  19. What is a Business Assistance Center?
    A one-stop center for streamlining local permitting, licensing, and fee payment processes and facilitating the decision-making process.
  20. What is a Business Climate?
    Usually referred to as the attitude of a local government toward business, but can also consider attitudes of the labor force, and local business networks.
  21. What is a Business Incubator?
    Entity that nurtures and supports young companies until they become viable, providing them with affordable space, technical and management support, equity and long-term financing, and employment.  

    The three basic objectives in creating an incubator are (1) to spur technology-based development, (2) to diversify the local economy, and (3) to assist in community revitalization.
  22. What are Business Improvement Districts (BIDs)?
    Legally defined entities formed by property and business owners, where an assessment or a tax is levied for capital or operating improvements, as a means of supplementing city funding.  The district is created by the public law or ordinance, but it is administered by an entity responsible to the district's members, or to the local governing body.

    Some states authorize non-governmental, non-profit corporations to administer the district.  Recent BID programs include economic and social development, transportation, parking management, and conversion of redeveloped commercial buildings for residential use.
  23. What is Business Recruitment and Attraction?
    Traditional approach to economic development to entice companies to relocate or set up a new branch plant or operation in a sate or locality; often referred to as "smokestack chasing."
  24. What is Business Retention?
    Systematic effort designed to keep local companies content at their present locations, which includes helping companies cope with economic conditions and internal company problems.
  25. What is a CBD?
    The central business district of a locality.  Usually this is an area with the highest concentration of businesses, including financial institutions, shops, offices, theaters, and restaurants.
  26. What is CDBG (Community Development Block Grants)?
    Under Title 1 of the Housing and Community Development Act of 1974, eight former categorical grant and loan programs were replaced by a system of unified block grants under which communities with more than 50,000 people are entitled to receive funding, while other communities may apply for discretionary funding.

    Its purpose is to encourage more broadly conceived community development projects and expand housing opportunities for LMI persons.  

    The three primary goals of CBDG are to (1) serve LMI people, (2) to eliminate slum and blight, and (3) to address other community development needs that pose a serious and immediate threat to the health and welfare of a community.
  27. What is a CDC (Community Development Corporation)?
    Organizations, typically non-profit 501(c)(3), which can obtain federal and private support.   They are governed by local residents, businesses, and community leaders through a board of directors that is in most cases elected from the CDC membership or the community.

    Some CDCs perform only economic development services, but most work only on housing issues.  Those active in economic development provide technical assistance and financing and are committed to serving the impoverished people of America.
  28. What is a CDC (Bank CDC)?
    Bank-sponsored community development corporations are a way for banks to contribute to economic revitalization by investing in local businesses and real estate investment projects that benefit low- and moderate-income groups.  

    A community can establish a bank CDC by working with one or more local banks, the Federal Reserve, the Comptroller, and its respective state financial institutions' regulators.  In the case of consortium bank CDCs, where several banks join together, the investors do not have to be just local banks.  Bank CDCs can purchase, construct, or rehabilitate property.
  29. What is a CDC (Certified Development Company)?
    The originating and administrating body for the SBA 504 loans.  The program provides long-term, fixed-rate financing to small businesses to acquire real estate, machinery, and equipment for the expansion of business or modernization of facilities.
  30. What is a CDFI (Certified Development Financial Institution)?
    A specialized financial institution which works in market niches that have not been adequately served by traditional financial institutions.  

    CDFIs provide a wide range of financial products and services, including mortgage financing, commercial loans, financing for community facilities, and financial services needed by low income households.  Some CDFIs also provide technical assistance.

    To be certified as a CDFI by the CDFI Fund of the Department of the Treasury, an institution must engage in community development, serve a targeted population, provide financing, have community representatives on its boar, and be a non-governmental organization.
  31. What is a CHAS (Comprehensive Housing Affordability Survey)?
    A federally mandated five-year LMI housing plan, describing needs, outlining strategies, and listing resources, which is required, with annual updates, for state and local governments to receive federal housing funds.
  32. What is a CHDO (Community Housing Development Organization)?
    A federally defined type of nonprofit LMI housing provider eligible to receive 15 percent of all federal HOME Investment Partnership funds for housing development and 5 percent of HOME funds for operating costs.
  33. What is a CRO (Community Reuse Organization)?
    Organization which oversees the transition of a US Department of Energy facility from governmental to civilian/commercial use.
  34. What is Capacity Building?
    Developing the ability of a community-based neighborhood organization to effectively design economic development strategies through technical assistance, networks, conferences and workshops.
  35. What is Capital?
    Consists of property of wealth from which income is derived, expressed in terms of money and which can be used to produce additional property or wealth.
  36. What are Capital Costs?
    Costs of investment in major physical improvements, infrastructure and equipment, such as buildings, roads and machinery.
  37. What is a Capital Projects Fund?
    Money that accounts for the acquisition of capital facilities.  This money can be raised through bond issues or grants.
  38. What is the Capitalization Rate?
    The rate of return that deems investment in a development project reasonable, often referred to as the "cap rate."
  39. What is Cash Flow?
    A statement showing total cash receipts and disbursements for a specific period of time.
  40. What are Clawbacks?
    Many localities enter into contracts with firms to which they offer incentives that require local commitments.  Clawbacks describe the punitive steps taken against firms that break these contracts.  For example, a firm may be required to pay fines or assist in finding a new tenant for its property if it chooses to leave a community.
  41. What is Comparative Advantage?
    Term used when comparing economies of regions.  It is the economic advantage of one area over another due to the fact that it can produce a particular product more efficiently.  More efficient production of one good means there is a higher opportunity cost to produce another.  This is a concept that drives trade between economies.  Interregional and international trade exploits the comparative advantages of economies.
  42. What is a Competitive Niche?
    A market in which a business or economic region finds itself to perform well.
  43. What is CERCLA (Comprehensive Environmental Response, Compensation and Liability Act) or "Superfund"?
    Under this act, sites with the worst environmental damage may be designated National Priority List (NPL) sites.  If an owner/operator fails proper remediation, fines can total up to three times the cost of cleanup.  Owners of contaminated site not on the NPL must complete remediation of their sites before they can be reused, but they do not receive federal assistance or frace the same regulator pressures as Superfund sites.
  44. What is a Consolidated Plan?
    The Consolidated Plan, or ConPlan, combines all of the planning, application, and performance requirement separately for Community Development Block Grants (CDBG), HOME, Emergency Shelter Grants (ESG), Housing Opportunities for People with AIDS (HOPWA), and programs, such as HOME, that require a Comprehensive Affordable Housing Strategy (CHAS).
  45. What is a Cost-Benefit Analysis?
    A method for evaluating the profitability of alternative uses of resources.
  46. What is a Cost Effective Analysis?
    Compares alternate projects or plans to determine the least costly way to achieve desired goals.  Usually, some index or point system is developed to measure the effectiveness of the proposal in meeting goals and objectives.
  47. What is a Council-Manager form of government?
    A form of city government which places all administrative authority in the hands of a professional manager who is hired by the elected council (which is a policy-making body) to serve at its pleasure.  The duties of the mayor are usually mainly ceremonial.

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