ARC Guidelines for Asset-Based Development Projects

Identifying the strengths found in Appalachia, and leveraging these strengths into economic opportunity, is one way to increase revenue and create jobs. To focus the attention of the Region's public, private, and nonprofit leaders on asset-based development strategies, and to increase the chances of the success of these activities, ARC will undertake a broad scope of work to identify best practice, forge linkages with institutional partners, provide technical assistance to communities, and finance asset-based development efforts. ARC will support projects that demonstrate potential for generating new revenue streams and creating jobs for Appalachian communities.

ARC's vision for Appalachia, as outlined in the Commission's strategic plan, Moving Appalachia Forward, is for the Region to achieve socioeconomic parity with the nation. To reach this vision, ARC will act as a strategic partner and advocate for sustainable community and economic development in the Region. Through this work, the Commission seeks to achieve four specific goals for the Region:

To increase job opportunities and per capita income in Appalachia to reach parity with the nation.
To strengthen the capacity of the people of Appalachia to compete in the global economy.
To develop and improve Appalachia's infrastructure to make the Region economically competitive.
To build the Appalachian Development Highway System to reduce Appalachia's isolation.

Asset-based economic development is one of several possible strategies for achieving these goals and for addressing the economic restructuring taking place across the Region. It is a strategy that complements other economic development strategies being employed throughout the Region. Asset-based development can be defined as a strategy that builds on existing resources—natural, cultural, structural, and leadership—to create valued products and services that can be sustained for local benefit. This strategy involves developing the Region's assets and identifying new and creative uses for perceived liabilities in order to generate revenue and create jobs. Communities can inventory cultural, natural, structural, and leadership / community resources and develop strategies that utilize strengths and transform liabilities. The key is to identify the potential within a community and maximize its impact, developing new revenue streams by turning perceived liabilities into strengths, or developing untapped natural and cultural resources into desired products and services. Asset-based development focuses on enhancing the assets in the Region. Successful strategies not only have positive economic impacts, like new jobs and businesses, but strengthen the assets themselves—be they forests, rivers, downtowns, or renovated brownfield facilities—to ensure sustained, long-term impact in a community. Asset-based economic development is not a quick fix or a panacea for the Region. However, it can be part of a comprehensive solution for sustainable community and economic development.

Some examples of successful asset-based development projects include:

Aquaculture. In 1999 the Mingo County Redevelopment Authority built a fish hatchery for the salmon-like arctic char, using water from an abandoned section of the Mingo Logan Coal Mine in a distressed county. The mining companies donated $150,000 of in-kind contributions, matched by funds from the State of West Virginia and the U.S. Department of Agriculture (USDA). The hatchery was stocked with 188,000 eggs in 2000, using the market-proven char as inventory. These facilities shipped 300,000 pounds of char in 2003 and increased that to 400,000 pounds in 2004.

Shut-in Natural Gas Wells or Stripper Wells. Gas wells that once produced a significant amount of natural gas frequently lay dormant throughout the Region. These wells don't produce natural gas at a volume sufficient to go through large-scale transmission lines, but do produce enough natural gas to fuel businesses. The Conservation Fund worked to harvest the resources of four such wells in Upshur County in West Virginia as a part of a pilot project. To date, these wells are being utilized to fuel a greenhouse which is now producing vegetables and herbs, and generating revenue year-round with a free energy and water supply.

Gateway Communities. The Blue Ridge Mountains and the Great Smoky Mountain National Park are assets unique to the Appalachian Region. Communities as diverse as Asheville in North Carolina and Etowah in Tennessee have leveraged the beauty of this region, and the public spaces and parks, for their benefit. Annually, more than six million visitors make Asheville their destination of choice. Some come for the highly touted arts and crafts of the region (the oldest craft guild in the nation got its start here in 1898). Some are attracted by the eclectic downtown which boasts fine restaurants, an assortment of shopping opportunities, and Art Deco architecture. Others are attracted by the myriad outdoor activities, such as hiking in the nearby national forests, whitewater rafting, fishing, driving down the Blue Ridge Parkway, or learning about the native Cherokee. Asheville is truly the gateway to the Smokies. And in Etowah, the community has renovated a historic railway depot and abandoned rail line, and now provides tourist excursions deep into the lush mountains. Etowah is also adjacent to the Ocoee River, renown for its whitewater rafting and home to a USDA Forest Service-managed Olympic venue for whitewater racing (which is also open to the public).

Cultural and Heritage Tourism. Berea, Kentucky, has a long-established reputation as the Folk Arts and Crafts Capital of the state. Its tradition began in the late 19th century when Berea College started a crafts production program to help students pay for their education. In 2003, the Kentucky Artisan Center opened to encourage visitors to learn more about the Commonwealth's crafts. The center features local artists through retail displays of their work. Music, books, specialty food products, visual arts and crafts, and other handmade objects by Kentucky artisans are presented. In addition, the Kentucky Artisan Heritage Trails showcase interesting places, exciting events, and wonderful food throughout eastern Kentucky. Over 170 businesses participate in the Trails program, and more then 70 new cultural-heritage businesses have opened in the region. And in August 2004, the winding 200 mile stretch from Galax to Clintwood was dubbed Virginia's Heritage Music Trail. Planners of "The Crooked Road" anticipate that within three years, the trail will be a nationally recognized heritage tourism destination and that within four years, the trail will generate triple the current revenues from tourism.

Brownfields. In Titusville, Pennsylvania, the site of the former Cyclops (Cytemp) Steel Company was gifted to the Titusville Redevelopment Authority when the company closed in 1998. The site has been developed into a world-class industrial park. One element of the redevelopment plan included improvements to a building to house a 100,000 square foot industrial business incubator that provided a common shipping and receiving area with access to cranes, forklift trucks, loading docs with different height bays, and freight-car loading services for rail transport.

Asset-Based Development—Eligible Activities

As we identify the advantages of the Region, four broad opportunities for development become apparent: leveraging our cultural assets, our natural assets, our structural assets, and our leadership/community assets. Each of these assets offers unique avenues for crafting new enterprise and injecting vitality into Appalachian communities. ARC's Asset-Based Development Regional Initiative will support strategies that leverage these assets, including, but not limited to:

Cultural Assets. Building creative economies by capitalizing on traditional arts, culture, and heritage; supporting local entrepreneurs; and attracting visitors. These strategies include the creation of heritage trails, the development of apprenticeship programs, using Web-based or traditional retail venues to market products, and showcasing the Region's music and narrative traditions.
Natural Assets. Opening the beauty of the mountains and rivers by leveraging unique ecological assets and the gateway communities leading there, including white water, fishing, camping trails, and rock climbing. Enhancing natural advantage by adding value to the farm by processing specialty food items, fish farming, and transitioning to organic products. Getting the most from the Region's unique and productive hardwood forests by maximizing sustainable timber harvesting and value added processing.
Structural Assets. Just as we leverage the Region's natural and cultural assets, we can also turn community liabilities into opportunities, focusing on such strategies as brownfield redevelopment, adaptive reuse, and downtown redevelopment. Converting overlooked and underused facilities into industrial parks, business incubators, or educational facilities have shown positive results across Appalachia. The Appalachian Development Highway System is an asset that can be leveraged for economic development as well. In West Virginia, four counties worked together to form a steering committee to select projects that could enhance the value of Corridor G. Throughout the Region, communities and businesses are integrating development and management practices to leverage what they have—historic buildings, abandoned railroads, scenic byways and old mines—to build and enhance economic vitality.
Leadership/Community Assets. Successful development takes place when business, government, nonprofit organizations, and community groups mobilize resources towards a common goal. Promising local leaders and emerging civic entrepreneurs are critical assets for developing—and redeveloping—opportunities in the Region. Providing tools and resources for enhancing civic entrepreneurship is often a critical first step to leveraging local assets. Community assets include institutions such as Appalachia's four-year colleges, research institutions, and two-year community colleges.

Activities Not Supported by the Initiative

Asset-based development does not include filling gaps, addressing deficiencies, or the provision of amenities, which often occur at the expense of leveraging unique assets and community strengths. For example, support for a local symphony, ballet, or swimming pool—things that are not unique to the Region but are based in many mid-sized communities—would not well fit this initiative, while support for indigenous community assets like the Carter Family Fold (in Virginia) and the reclamation of an old industrial site such as the Cytemp Steel Co. facility in Titusville (Pennsylvania) are compelling asset-based activities.

Because ARC projects are funded with federal dollars, careful stewardship of those funds must exist. Therefore, ARC will closely scrutinize asset-based development activities to determine their eligibility for funding as a part of this initiative. State partners are encouraged to interact with POD staff often and early in the project development process to ensure that each project has the optimum opportunity to succeed. Projects will be considered on a case by case basis.

Outcomes: Activities supported by this regional initiative must have economic impact—either by preparing the way for future sustainable growth through asset mapping or strategic planning, or supporting the implementation of projects that result in the direct creation of new jobs or businesses. Projects should demonstrate the potential for generating new revenue streams for Appalachian communities. Successful strategies include those that are proven or those that have a high chance for achieving the designated outcome, those that involve resources indigenous to the Region, and those that have the potential to leverage additional funding from other public and private sources.

A Roadmap for Asset-Based Development in Appalachia

ARC is embarking on a comprehensive asset-based development work plan for the Region. ARC and partners—including the National Endowment for the Arts (NEA), The Conservation Fund, the National Trust for Historic Preservation, the Southern Arts Federation, the National Geographic Society, the U.S. Environmental Protection Agency (EPA), the U.S. Department of Agriculture (USDA), and the USDA Forest Service—are engaged in a broad range of activity to support asset-based development efforts.

ARC suggests communities employ a roadmap to strategically build on their strengths, researching and structuring initiatives to ensure success when implementing these programs. Communities may begin by mapping their assets and engaging in strategic planning to articulate options and clarify directions. Alternately, if a clear direction has been well crafted, priority activities may involve financing or marketing asset-based initiatives. Activities are eligible at any point along this development path. This roadmap for developing asset-based initiatives includes:

Asset Mapping -- identifying the unique assets of a region. This is a critical first step in building an asset-based development strategy. Visually mapping assets—be they historic structures, scenic rivers, forest lands, or artisan studios—often serves as a catalyst to engage community leaders in creatively leveraging the strengths of a community. College partners or third-party vendors can be helpful in completing GIS mapping profiles.

Strategic Planning -- The provision of information and technical support to local leaders, as well as the crafting of a strategic vision, is essential to developing successful community efforts. Effective development takes place when business, government, and community groups mobilize resources towards a common goal. Convening these local leaders, with technical support from across the Region and across the nation, holds the promise for crafting asset-based initiatives that truly impact the Appalachian economy. Local leadership and emerging civic entrepreneurs are critical for developing—and redeveloping—the assets of the Region.

Education and Training -- Assisting new and aspiring entrepreneurs learn the old traditions of the Region while competing successfully in the marketplace. ARC has provided support to the Handmade Institute to form a Crafts Advisory Council and to develop a pilot apprenticeship program. This apprenticeship program, in partnership with the Region's educational institutions, will train new artisans in old traditions. In addition, the Arts Business Institute is holding a series of "Bootcamps for Craft Entrepreneurs," with the support of ARC and NEA, to help businesses successfully market the craft and traditions of the mountains. ARC will continue its partnership with the EPA to work on brownfield redevelopment. And, ARC's work to support youth entrepreneurship education programs will continue to encourage the development of locally owned asset-based businesses in the Region.

Financing -- Programs designed to help finance both private-sector and social enterprises are important tools to effectively leverage a community's assets. ARC will continue to work to address the capital gaps of the Region—including providing support for the formation of development venture capital funds, micro-credit loan funds, and assisting the Region's revolving loan funds to access private capital markets—which is essential for the development of successful asset-based enterprises in Appalachia.

Marketing -- Activities designed to market the unique asset of the Region. Support could be targeted to branding of unique Appalachian products; development of distribution channels for value-added agricultural products; and assistance for cooperative business efforts. As part of this initiative, ARC will not support marketing activities that generally promote local or regional tourism or target single-site tourism destinations. Marketing activities will be held to a strict standard of review and performance.

A Regional Focus

ARC anticipates that these activities will catalyze a broad range of asset-based development efforts throughout the Appalachian Region, leveraging state, local, and private-sector investment, helping to shift the strategic planning focus at the state and local levels, and sparking a range of new policy initiatives across the Region. It is anticipated that strategic ARC central-office investments will stimulate significant follow-on investment on the part of ARC state offices, as evidenced by ARC's work in the area of leadership development, export trade, telecommunications, and entrepreneurship. In addition, the introduction of new development strategies is anticipated to shift the strategic planning focus at the local level as well. Local development organizations will begin to think about new directions and opportunities, crafting new strategies to address old problems. And new state policy initiatives (be they formation of equity funds, development of business incubation systems, or the modification of educational curriculum to support youth entrepreneurship programs(as resulted within the field of entrepreneurship) can provide lasting change to a state's development landscape. These regional activities will both support the vision developed by local communities and help ensure the success of community initiatives by creating a broad, sustainable framework for asset-based development efforts.

Links to Entrepreneurship

These asset-based development activities will build on the work of the Commission's Entrepreneurship Initiative, which has provided over $31 million in support to more than 368 projects, resulting in the creation of over 5,000 jobs and 1,200 new businesses (through FY 2003). The Entrepreneurship Initiative assists homegrown businesses add jobs and increase wealth in the Region. This initiative has strengthened the infrastructure necessary to build an entrepreneurial economy by supporting the development of venture capital and debt funds, the provision of technical assistance (through business incubator facilities and other strategies), and the development of entrepreneurship education and training programs for adults and youth. Asset-based activities will both leverage the success of these new enterprises and continue to support the Region's infrastructure for starting and growing locally owned businesses.

Advisory Committee

The Commission has convened an advisory committee to provide strategic direction for future ARC investments in the area of asset-based development. The committee will also be asked to identify opportunities for leveraging additional partnership efforts. Committee members reflect a diverse background in the field of asset-based development, including expertise in natural assets, cultural assets, and community/leadership assets. Committee members include representatives from local nonprofit development organizations, local communities, ARC Local Development Districts, ARC state program managers, national development groups, private-sector representatives, and federal agencies. ARC will staff the committee and reimburse committee members for costs associated with participating in these sessions.

Partnerships

Engaging institutional partners and national best practice organizations will be critical to the success of this initiative. On its own, ARC could provide funding to assist specific communities, but long-term sustainable impact might not be achieved. To increase the likelihood of success, the Commission will invite key institutions to assist in conducting research, sponsoring educational conferences, the joint production of publications, the provision of mentorship and scholarship opportunities, the development of online resources, and the provision of direct financial support. Potential partners may include institutions, foundations, and national organizations.

ARC Asset-Based Development Advisory Committee

Denise Ambrose, ARC State Program Manager, Virginia
Becky Anderson, Executive Director, Handmade in America, North Carolina
Kevin Brazill, Watershed Agricultural Council, New York
Bonnie Durham, ARC State Program Manager, Alabama
Steve Herman, President, Garrett College, McHenry, Maryland
Rick Larson, Managing Director, SJF Ventures, North Carolina
Suzanne Morse, President, Pew Partnership for Civic Change
John Ostrout, State and Regional Director, National Endowment for the Arts, DC
Sandy Runyon, Executive Director, Big Sandy Area Development District, Prestonsburg, Kentucky
Larry Selzer, President, The Conservation Fund, Virginia
Mike Whitt, Executive Director, Mingo County Redevelopment Authority, West Virginia
Jill Wilmoth, Policy Advisor, ARC Federal Office, DC