Olympia Capitol Building

Time to Repeal Washington’s ADO Laws

First Boeing, now Amazon? It’s time for the state legislature and the governor to update the Revised Code of Washington into something that enables cities, counties, and even the state to better compete in a 21st century international marketplace.

As it stands, Washington State is like the best-looking person at the ball, the one everybody wants to dance with. Whoever it is that wins our attention will tolerate us for awhile until, that is, the sullen day when they come to realize our good looks just ain’t worth the cost.

State code stipulates too much when it comes to economic development – far, far too much. For starters, there’s this thing called “Associate Development Organizations,” otherwise known as ADOs. Market-driven economic development is ill-served by our state ADO requirements.

Here’s how it works: the state receives all manner of requests for proposals (RFPs) from firms looking to expand and are shopping for great locations alongside some great incentives, much like Amazon did with HQ2. Then, officials at the Department of Commerce shuffle the RFPs out to their 39 local ADOs. It’s up to the locals to decide whether to submit a response. The response, however, does not go directly to the firm that released the RFP; the response goes back to Commerce. Once Commerce has all the proposals, they can select which ones they like best and only submit those.

Such is the first arbitrary filter on the market. Here’s the second: local ADOs do the same thing as Commerce only at the local level. For instance, on a regular basis, Spokane’s local ADO (Greater Spokane, Inc. [GSI]) will fire off an email blast seeking respondents for one RFP or another that they receive from Commerce. The process is so weak that our local commercial real estate community simply sends off garden variety brochures for whatever property they’re schilling at the time. GSI then stitches it all together with a rah-rah narrative and ships it off to Commerce. As our local ADO, GSI can pick and choose what proposals to include from the Spokane metro that go to Commerce, then Commerce decides whether to even submit Spokane’s proposal.

Thus, because of the inadequacies of our current system, if you take the time to create a proposal to a firm looking to invest, it must make it through two layers of bureaucracy and you’re not even certain if the interested firm will see your work, much less will you have direct contact.

Filtering what the market sees through bureaucracies does not help stimulate market activity.

If the legislature is interested in enabling more robust economic development, simply repeal all sections within the Revised Code of Washington that cite Associate Development Organizations and replace with language that allows local jurisdictions to directly engage the market as they deem fit. In the meantime, start releasing all those privileged RFPs from the private sector to every jurisdiction in the state that wants to be on the distribution list. And let’s skip the verbose guidelines about reporting requirements, contracts, or any other compulsions that state code writers get excited about. Reducing oversight and bureaucracy at the state level will increase flexibility and creativity at the local level – virtues the market tends to appreciate.

The purpose of economic development is to close gaps in the market to achieve desired goals. The vast majority of the time, it’s the public sector that closes those gaps. The state’s real “associate development organizations” are their municipalities, counties, and special districts and they shouldn’t have to ask permission of Commerce or local ADOs to see what RFPs are coming in. From an economic development perspective, the state’s role is to enable local jurisdictions to engage the market as they deem fit, which can be accomplished in numerous ways. In Washington’s case, a great place to start is simply get out of the way.

 

 

 

 

*Cover photo courtesy of flickr.