Tennessee Shoots for the Stars

Rural communities work with the state to enhance their appeal.

By Jennifer LeClaire

What do you do when you want change? Start making some changes.

That's just what the State of Tennessee did during the last year with the redesign of its Three-Star Program, a road map to assist local communities with economic development efforts.

“The former Three-Star Program merely recognized activities for economic development as opposed to our new approach, which encourages economic development with incentives,” said Economic and Community Development (ECD) Commissioner Matt Kisber.

The need for change to the decades old plan struck Kisber last year. He noticed that the counties he was designating as “distressed” were also home to a number of Three-Star communities. It was a dichotomy in which some of the state's most serious employment problems were in communities that were supposed to be the most prepared for economic development.

State officials sparked discussions with community leaders statewide to identify where adjustments could be made to ready Tennessee's rural communities for the future. The fruit of that redesign was a pilot program that kicked off in January with eight communities.

A successful trial run led to the new Three-Star Program concept that better helps rural communities develop strategic plans designed to meet the challenges of an ever-changing economic environment.

The Three-Star Program assists communities in preserving existing employment, creating new employment opportunities, improving family income, and creating a strong leadership base for economic development.

“Our goal with this program was to develop something that would be more comprehensive and beneficial to communities and help them close the gap between economic stagnancy and competitiveness,” Kisber said.

“The program's focus on education, community leadership and infrastructure helps local communities best identify key marketing strengths to grow and retain jobs, improve quality of life, and better prepare for sustainable growth.”

Open to any and every Tennessee community that qualifies, the revamped Three-Star Program sets high standards and enviable incentives.

Counties are required to have a Joint Economic and Community Development Board in place, show evidence of an updated five-year strategic economic development plan, and demonstrate an active economic development arm. Counties also need a resolution from the local legislative body to adopt the strategic economic development plan. And compliance with Federal Title VI regulations is required.

“We have put real financial incentives into the program, in return for which we have asked for meaningful initiatives that will benefit the community,” Kisber said.

Kisber likens the Three-Star Program to a college curriculum. Participants must include initiatives for existing industry, manufacturing, recruitment, workforce development, infrastructure, education and healthcare.

But participants can also elect other initiatives to gain points toward additional incentives. Those electives programs include leadership, community volunteerism, livability, energy, housing, zoning, beautification, and revitalization.

Incentives for receiving the certification include identification on all FastTrack infrastructure and job training applications; eligibility for matching grants, if criteria set by ECD is met; and the advantage of earning points in the Community Development Block Grant (CDBG) process.

Specifically, a participating community's Three-Star Program points are assessed at the end of each year. There are three attainable levels. The first level awards the community a small cash grant that has always been part of the program.

The new incentives, however, includes points that can be applied toward matching funds in the CDBG process. That means if a community earns five points, the highest Three-Star level, it only has to match 15 percent of the CDBG funds instead of 20 percent.

The program is steadily growing as communities work with the state to enhance their appeal as locations for new business and industry. Kisber said 800 community leaders gathered at the Governor's Conference for Economic Development this past September for the briefing on the new program.

Despite the clear incentives, no one ever said change would be easy. Kisber said the greatest challenge with the new Three-Star Program is changing people's thinking.

“We are challenging people to think differently, but we are also working with them to help support the initiatives,” Kisber said. “It's scary for some communities to think about stepping off into this big unknown because they've never undertaken something like this before. But our community development specialists are working hand in hand with them every step of the way.”

The program also features a community network that creates sister communities that can call on one another for advice. As part of the program's improvement efforts, four existing Three-Star communities partnered with new ones to help build relationships and share resources. This is part of a movement toward a regional focus in the state to take advantage of strengths.

“The key to successful community development is the implementation of programs like Three-Star which set practical and manageable steps, that if followed, will mean better prepared communities for growth,” said Joe Barker, ECD assistant commissioner of community development.

“This program steers rural Tennessee communities in the right direction to reach the destination of successful economic development.”

Emphasis: Educating Tennessee's Rural Workforce

Tennessee's leaders understand the role of education in economic development and are launching new initiatives to secure the future of the rural workforce. The state plans to bring educational experts to each rural community for town hall-style meetings. It all started at the 2003 Governor's Conference for Economic Development.

“It's important as part of our economic development educational tools to include in every Governor's Conference a prominent education expert who can talk about the connection between skill development, education, job creation and retention,” said Economic and Community Development Commissioner Matt Kisber.

This year's focus was to help rural community leaders understand the difference between cyclical unemployment, where workers get called back when the economy improves, and structural unemployment, where workers don't get called back because technology has replaced a process.

“The people who are losing their manufacturing jobs today aren't prepared to fill the jobs that are being created in healthcare and other areas without going back to school for more training,” he said. “That's why part of the Three-Star Program curriculum emphasizes both education and workforce development – and not just K-12 but lifelong learning with an emphasis on technology.”