Twenty years ago, urban economic development was aimed at preserving and attracting manufacturing industries. Today, the tables have turned. Local governments are finding that commerce and tourism drive their local economies. And in this new economic climate, arts and culture are making an important difference.

Cultural attractions -- art museums, historic sites, cultural districts, zoos, music, theater and dance -- always have been important quality-of-life amenities. Today, they have become much more. In the hands of far-sighted local government managers, cultural organizations become cultural assets used to spur downtown development, attract new residents and businesses, and transform a community into a thriving tourist destination.

Localities are finding that their cultural assets can help expand the population of downtowns, one of the most exciting developments of the past decade. Two analyses of the 2000 U.S. Census, one by at the University of Pennsylvania 's the Department of City and Regional Planning and one produced jointly by the Brookings Institution and the Fannie Mae Foundation, document dramatic increases in downtown residents.

San Diego 's downtown population grew by 16 percent; Norfolk , Virginia , by 21 percent, and Pittsburgh 's downtown residents increased by 67 percent. "Downtown growth is from young professionals and older 'empty nesters' who want to be near entertainment, restaurants and cultural amenities," reports an article in the May 7 edition of USA Today . This trend is not simply a turn of the millennium phenomena. As the nation's 79 million baby boomers reach retirement age, experts predict that more will be trading in suburban homes for downtown condos near restaurants and theaters.

And localities are finding that cultural attractions spur new business development. They have long recognized that corporations base their decisions on where to relocate on the local quality-of-life, including the availability of cultural resources. Now urban planners know that the arts play an important role in fostering emerging businesses.

"In the 1990s, cities were actively recruiting dot.com companies, but the crash of this industry ended this trend, "says Barry Seymour, assistant executive director of the Delaware Valley Regional Planning Commission. "The newest urban development strategy is to attract the smart entrepreneurs and let them figure out the next growth industry. This means that local governments are now looking to develop the quality-of-life amenities and cultural attractions that appeal to these young people."

Finally, many communities are using their cultural industry to tap into the growing market of cultural tourists, those with the largest disposable incomes. Cultural tourists not only purchase tickets to blockbuster art exhibits and performance festivals, they also eat in local restaurants, shop in local stores, and book rooms in local hotels, inns, and bed and breakfasts.

Second, cities can create new cultural entities. Cleveland built a new Rock and Roll Hall of Fame and Museum and used it to anchor a residential development.

Third, communities can invite major institutions to create satellite operations in their locales. Camden , New Jersey , is looking into establishing a branch of the Philadelphia Zoo. This approach takes its cue from health care and higher education that have long realized the benefit of building clinics and campuses close to where their customers live.

Finally, communities can create signature events that promote their identity and give visitors a reason to come. The nation's calendar is filled with thousands of events: the Annual Indian Fair and Market in Phoenix , Arizona ; Brazo River Festival in Waco , Texas ; Elvis Week in Memphis , Tennessee ; and Bavarian Maifest in Leavenworth , Washington .

Many cultural organizations are adept at raising the dollars to build a new home, but few possess the expertise needed to plan for their expanded operations. Arts managers tend to underestimate their new operating costs and overestimate projected attendance revenues. When the audiences fail to come in the numbers predicted, organizations can find themselves facing shocking operating deficits. A National Cultural Facilities Study by the Nonprofit Finance Fund "found countless cases where improperly planned, financed and managed facilities harmed the program, as well as a few examples of the inverse."

Most important from government's point of view, cultural managers and their boards often miss the chance to maximize the benefits their new facility can bring to the local economy. While arts organizations realize how an exciting new facility can enhance their organization, many fail to recognize that this capital investment can also help to transform the community outside their doors.

Places that want to maximum the economic benefits of cultural development need to partner with their cultural industries. City managers and their economic planners know processes and pitfalls of facilities financing and construction. They see the bigger picture of urban revitalization, and they are adept at capitalizing on opportunities. When government takes the lead in cultural development planning, then new museums, theaters, and festivals become important additions to their economic development tool kits.

Vision and identity
Every community has a unique identity, a story rooted in its past and place in the national scene. Cultural development plans begin by diagnosing a community's identity, and then use it to create a sense of place and a position in the marketplace.

A community's identity is used to shape its long-term vision and the developmental path needed to achieve it. It becomes the benchmark against which all new initiatives are measured. The identity of a community also becomes its "brand," the centerpiece of the marketing strategy it uses to draw new residents, businesses, and visitors.

Cultural assets. Development plans feature inventories of the community's cultural assets: their strengths, needs, and opportunities. The inventory analyzes the capstone experiences that make the community an appealing place to live and visit. It targets organizations with the greatest potential for growth. It identifies the mix of new elements and experiences needed to underscore the community's identity and enliven the experience.

Inventories of cultural assets view the city from a visitor's perspective. Coordinated signage and streetscaping are especially important for tourists and others unfamiliar with the lay of the land. Standardizing the operating hours of historic homes and museums make them easier to promote as a package.

Markets
Communities and their cultural organizations serve a number of markets: local residents, regional residents, and in some cases, national and international visitors. Analyzing these markets' demographic and psychographic characteristics is key to cultural development planning.

Market data are available from a variety of sources: downtown and business associations, local and regional planning agencies, convention and visitor bureaus, and cultural alliances. Individual cultural attractions also collect information on their audience and memberships.

Market analyses are essential in guiding strategic cultural investments. Communities located in regions with high populations of school-age children, for example, might gain the most from new family attractions like zoos and children's museums. As people age, their interest in history increases, so communities with aging populations might consider investments in history museums and historic sites. Young singles seek spectacle and diversity. They are drawn to places with a rich mix of cutting edge art, music, cinema, and opera. As city and county populations become more ethnically diverse, the offerings of their arts organizations should reflect this diversity.

Cultural markets are as segmented as the markets for any other optional consumer purchase. Analyzing a community's current market and prospective market is essential in shaping the menu of cultural assets needed to attract and to serve them.

Location
Museums and performing arts centers are as site-sensitive as department stores: the right location can anchor a retail district, the wrong site can kill the project. An elegant historic building might at first appear as the perfect place for a new museum, but if the location is wrong, the new museum can rapidly morph into a white elephant.

The best sites for cultural attractions are accessible by public transit and car, and near shopping, restaurants and parking. The right location can drive a remarkable transformation of the downtown. Baltimore 's National Aquarium, for example, was placed in its inner harbor, where it helped to attract other museums, restaurants, and hotels.

Strategic Alliances
A community's background and its cultural assets offer opportunities for linkages with others that can help advance its potential. High-profile national organizations like the Smithsonian Institution are developing affiliate museums across the nation. Heritage trails link rural towns, parks and historic sites into visitor-friendly experiences. The National Trust for Historic Preservation's Main Street Program works to foster street-scape improvements and revitalize downtowns. Strategic alliances with other destinations in the region, state and nation can propel a local cultural attraction into a national draw.

Buy-in
In order to succeed, government, business, and civic leadership must embrace cultural development plans. So, cultural planners reach out to a broad range of interests: cultural boards and cultural alliances, arts, humanities, and historical commissions, tourism and economic development entities, and downtown and business associations. Political leaders and government officials are brought on board, as well as the print and electronic media.

The optimum development plan advances the agendas of diverse organizations and encourages each to bring resources to the table. The objective is to assure early buy-in so that all leadership interests share a sense of ownership. Most important, the plan needs to become the responsibility of local government-the entity with the clout, connections, and commitment to assure its realization. Placing cultural development in the hands of the economic development agency assures the greatest prospect for long-term success.

Scale and Sequencing
The scale and sequencing of a plan are carefully designed to reflect the realities of the local arts and cultural industry. The best plans are based on a clear understanding of the time and investment needed to achieve results. For example, new arts festivals can take three to five years to build audience. Plans include multi-year schedules that support overall revitalization programs.

Expense and Income
Finally, a plan should include estimates on associated costs for launching, implementing and monitoring the plan. They set feasible financial goals. They should identify resources from a diverse pool of funders and supporters: philanthropic organizations, local, county, state and national government, civic associations, volunteer groups, preservation and historical societies, cultural and educational organizations, and private businesses.

When a cultural development plan becomes part of an overall development agenda, it becomes possible to tap into urban revitalization funding streams. Economic development agencies can creatively combine the sources they tap for downtown revitalization with the sources that cultural organizations use to build and operate.

Today, far-sighted managers have an opportunity to make the most of arts and culture. Comprehensive plans can bring localities new facilities to anchor commercial districts, new offerings to keep downtowns lively day and night, and new attractions to strengthen their position in the marketplace of destinations. As more people seek to live in downtowns and to visit them, the timing is right for local governments to take their cue from the arts and get the show up and running.

Nancy Moses is a cultural development consultant and author of an upcoming book on the secret stories of museums. Philadelphia, Pennsylvania.