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I Cities have a le~itimate and c~ntinuir~ role in real estate develol~ant. All in all, the ooncerns displayed by Mirr~sota cities in wc~king fox quality I 11 I I I I I I I develoi~ent are ~ndable. City councils ar~ their professic~al staffs are ~ot satisfied with beirg ~ssi~ observers of de~lq~ent. These officials want to intervene. They are ~erned a~t t~ c~ ity of the dev~l~t, the design, the lo~tioru the timing. They usually haw a vision of a substantially improved czmmunity. Thsse (x~oerns need c~ly be c~nneled in the right directions. Tn~y shculd r~t be thwarted. But too much __~n~hasis is beir~ i~laced (~ interstate ar~ intrastate rivalry today. In scme respects, a state has no choice ~ut to participate a~gressively in the interstate poker game of oc~oetition for business, because every other state is doirg th~ sam~ third, l~x e~aml~le, ~ta acti~ly pursued the General Motors Saturn plant in 1985 b~ tryir~ to outbid several other states. The Satt~rn plant, ]lowever, is -]-~st unique because of its size. It is not surprising to see ocmpet~ states up the ante, to the delight, of oourse, of the plant'.s cwners. But the l~lic interest will not be served by a Saturn-type bidding war for e~ery business thinkir~ about a new location. States---particularly states in the same eoonc~ic region of the nation--would do well to cz~sider '.'arms o0~trol': agreements in their ompetitio~ for new business. The state has the authority to determine the ':weapons'.' that cities may use. However, it has done little but set up a system in which every city has an incentive to offer the most lucxative financial package, out of a fear that if it fails to do so, neighborirg cities will. Cities ought to be encouraged to o~%oete with each other on the quality of their public services ar~ in other ~ys to _make their envirc~ent attractive to developers. But an un~x~rolled financial bidding war helps no c~e other than perhaps givin~ ~usinesses that receive assistar~e a leg up on tt~ir oc~petition. I The Twin Cities me--liras area needs a much better strategy for l~rovidir~ private real estate assistar~e. In the Twin Cities metropolitan area scme 130 city governments cc,31?te with each other for real estate develc~ as if they were separate states (~ regions. A rational policy is lacking here. The Metropolitan Goun~il l~s establisl~d a regional growth control plan, but it is essentially a non-paxticip~nt in the question of city assistance to private real estate develop. ~he O0ur~il has sl~onsored seminars for local gove~..ent official- on ~w, med~nically, to ma]~ use of such devices as tax-in~rement finar~ir~ ar~ ir~ustrial revenue bonds, but the Oour~il ba~ not made policy reo__-;...~ndations on their use. Cities are allowed to oc~pete with each other with no o~erall regional framework. S~hat this also ~eans, of oourse, is that the %%~in Cities area does not ~te as a sinc31e unit with metropolitan areas in other l~srts of the nation, beneficial as such an approach might be. The major iml~ct of real estate assistance lies in the lo~tion, tim~, and design of new 4eve~, asa ~ot in promotir~ aggregate 9rowth. City goverrm~nts ~an influer~e to a limited extent where a new devest is built, when it is built, and how it is designed, through the use of finar~ial assistance. ~at this means is that their assistar~e o~n help determine the geographical loc~tior~ where economic activity occurs. Such action can be