Monday, February 26th, 2007

The Aloneness of an Urbanophile

As my name should tell you, I’m a big lover of cities. I’d much rather vacation in some large metropolis than a sandy beach. I’m a fan of the “great indoors” of the coffee shop, museum, cinema, or opera house much more so than any outdoor activities. Among my urban pursuits is independent cinema. Not too many other people seem that interested in many of these flicks, however, so I often end up seeing them by myself. Now this doesn’t bother me too much. I’m pretty self-sufficient. I learned at an early age that if you are into things that aren’t mainstream, you’d better be prepared to do them alone.

What I find interesting though is just the high number of people that attend these events by themselves. I was particularly noticing this over the weekend as I took in a film. Over half of the audience was people attending by themselves. And it really struck me that this is possibly one of the signs of a strong urban culture. If you are in a place where lots of people are out attending obscure events on their own, this not only shows that you’ve got patrons for them, but you’ve got people with enough passion and self-confidence to go out and do it by themselves in a culture that typically doesn’t see people going to films, concerts, etc. alone. I don’t think there’s any profound insights here, it’s just something I’ve observed.

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Topics: Urban Culture

Sunday, February 25th, 2007

Carmel: Leadership in Action, Part Three

This is the third and final installment in my series on leadership in Carmel, Indiana. Click to read Part One and Part Two. This one is dedicated to the critics.

Like any leader, Carmel and Mayor Brainard have had both those who’ve strongly praised them and those who hate them. That’s ok. Leadership itself often polarizes and every good leader has been besieged by critics. Of course, not all leaders lead in the right direction and sometimes the critics are right. So let’s listen to them.

Criticism falls into three main categories:

  1. The mayor is an elitist. There are two flavors of this. One flavor says that he’s engaging in “economic cleansing” by running the less well off out of town. The other is that he’s trying to make Carmel into some elite city, but fundamentally Carmel doesn’t have what it takes and his attempts will come crashing down.
  2. The city is spending like a drunken sailor and borrowing money at a rate that is going to sock the taxpayers with a huge bill, often on wasteful projects.
  3. Mayor Brainard and his cohorts are engaing in cozy or unethical schemes to recycle taxpayer dollars into their own pockets.

Let me try to address these in turn.

Is Carmel Elitist?

As I talked about in my opening paragraph of part one, Carmel has long had to deal with the perception of being elitist, even though it has many modest income people within its borders. Recently the rhetoric has been turned up because of a perception that the mayor wants everything to be high end and only for the wealthy. This was most notably brough to the fore when the city considered, and rejected, a plan to ban vinyl siding for new homes. And again recently when the Gramercy development was approved, replacing 500 moderate income, older apartments with luxury homes and condos.

There’s no doubt that the city has embarked on a program to offer a product that is differentiated by being high quality. This has the effect of prohibiting lower end, cheaper development. What’s more, it raises property values. Anything that raises property property values definitionally reduces the affordability to those at the lower end of the economic spectrum. So any improvement in any town can be seen as elitist.

I personally don’t believe that the mayor is trying to run poor people out of Carmel. But I think it is fair to say he’s pushing Carmel towards a differentiated rather than a commodity strategy. That’s going to raise the attractiveness of the town, which will ultimately put redevelopment pressure on current affordable housing. There’s no two ways about that. This phenomenon is widespread across America, where even well-paid teachers, firemen, etc. who work in a town can’t afford to live there in some suburbs of major cities. I don’t see Carmel getting to that point. But older apartments and homes with lots of deferred maintenance will continue to be redeveloped. The answer to maintaining affordable housing is to continue to allow apartments and townhomes to be built. To the mayor’s credit, he has pushed for this, but in the suburbs building anything other than single family homes will alway have opposition.

The flip side of the argument is that Carmel wants to be elitist, but fundamentally is a pretender and that fancy things like the City Center and the Performing Arts Center will end up as while elephants because of the lack of a real upscale base to support them. I think this is a very poor argument. Carmel is actually much less upscale in terms of amenities than its income levels can support. Carmel has many wealthy people who could, should they desire to do so, support many high end establishments. What Indiana lacks compared to other places is a culture of high end consumption. That may not be a bad thing if you think about it. But if someone shows up selling items that are geared to the true connoisseur, and which may not have high brand awareness, it might not work in Indiana. So I think individual businesses or ventures may fail, but Carmel can definitely support most of what is being developed. These are proven models that have been implemented in other cities successfully.

Spending and Taxes

With regards to spending, debt, and taxation, it is difficult to separate truth from fiction. Local government finance is so complex, and taxes dependent on so many factors, that it’s futile to argue. It’s better to ask whether or not a particular is worth the money spent on it. So rather than debating $80 million in debt, for example, the real debate is over the Performing Arts Center itself.

A good chunk of Carmel’s debt has gone to pay for public amenities and infrastructure, especially parks and roads. For example, debt paid to build Hazeldell Parkway and is building the Illinois Street extension. With roads it is pretty straightforward: you are paying one way or another, either through your taxed to pay for proper infrastructure or through your time spend sitting in congestion if it isn’t built.

There are certainly projects that can be argued with. But rather than totaling up all the debt, then arguing about only a few specific things, better to just argue about the things themselves.

Cronyism

As for the idea that Mayor Brainard and his friends are getting rich, there’s no doubt that cozy financial relationships are the nature of the beast in government. That’s true anywhere. I’ve seen nothing that indicates that the Mayor has been unethical or done anything illegal. I’m sure that his supporters have participated in city projects. But who elese would he partner with on things like the City Center? His opponents? I think we have to accept that there’s just a certain level of cronyism that goes on in any organization, governmental, business, or civic. I see nothing that indicates anything out of the ordinary in Carmel. It may not be ideal, but it doesn’t seem out of line either.

So I think there is some truth in the critics’ views, but that they ultimately miss the big picture. Carmel isn’t perfect and there is certainly plenty of room to dissent from a lot of what is going on. The problem is that there seem to be few critics who are willing to engage in a reasonable discourse around that. Instead, Brainard-hatred seems to be akin to Clinton or Bush hatred. He’s seen as an evil man by some, a sort of devil incarnate whose every move is filled with malice. Brainard himself probably gets a chuckle out of that. By coming across as so extreme, his opponents marginalize themselves and actually help him by discrediting rational opposition. This is exactly how Clinton survied the Lewinsky scandal and Bush got re-elected despite the Iraq war. Having extreme critics is one of the best thing that can happen to a politician. If the critics didn’t exist, Brainard would have had to invent them.

A More Serious Critique

So what are my personal criticisms of Carmel? Let me list a few:

1. The natural boundaries of Carmel are those of Clay Township. The city should not have attempted to annex territory near Westfield in neighboring Washington Township. Some people have said the mayor never really wanted that territory, but only wanted to shake things up in Westfield. As I said earlier, this attempt was the best thing that ever happened to Westfield, but I think that’s a post-hoc rationalization. If the mayor didn’t want the Westfield territory, why does he continue to pursue annexation of a small sliver of it, the AMLI development, to this day despite losing repeatedly in court?

2. I have never been a fan of tax increment financing districts (TIF’s) and Carmel has started creating a lot of them. TIF’s work by capping the normal property taxes paid be commercial property in a given area. Any taxes from any new development goes 100% into the TIF, not to the city, the schools, etc. This money can be used to back bonds. The idea is that you bond out the anticipated revenues of the TIF and use that to jump start development in either blighted areas or in greenfield areas requiring significant infrastructure investments to enable development that would otherwise never occur. They can be a useful tool, but I think are overused and subject to abuse.

I think some of the TIF projects, such as the City Center, are ok. But the city has gone overboard by TIF’ing out Gramercy. If this is such a wonderful project, then it should financially work on its own without a $20 million contribution from the city. The idea that this is only for infrastructure is a red herring as in most subdivisions the developer is expected to supply that – and in some locations in Indiana even pay an impact fee to the local government – not the other way around.

What’s more, in areas that are experiencing some growth, TIF’s capture the “natural increase” in the tax base, robbing schools and other districts of money. The money in the TIF is also a sort of off the books slush fund. The public can find out about TIF revenues and spending, but it is not as straightforward as just looking at the city budget.

Carmel may have needed TIF’s to jump start redevelopment in the core and rejuvenate Old Town and I’m fine with that. But the days of TIF utilization in Carmel should be over.

3. The nostalgia based New Urbanist designs are not compatible with the notion of an Arts and Design District. To be blunt, if you want real, practicing, leading edge arts, then the Carmel aesthetic is not going to attract it. I think what you’ll see is pseudo-art and design. Go to the bookstore and pick up any magazine on design – say, Wallpaper – and when you see things like what are displayed in there showing up in Carmel, call me. I should also mention I think those cheesy Seward sculptures make me want to vomit.

Carmel has copied a lot of its development from other places using a sort of cook book approach. That’s ok, now we have to see how the recipe comes together. Right now Old Town is still a bit of a pastiche of a downtown, a bit too Disney. As development continues, it needs to gel into a real neighborhood.

4. Roundabouts are nice, but not all of them are designed well. In particular, even I find the multi-lane roundabouts confusing to drive. I’d rather see real intersections at those types of major crossroads.

5. The Meridian corridor is being built out at too low of an intensity of use. With most buildings fairly low rise at five or so stories, the corridor will be built out from a land perspective before it reaches its commercial potential. Carmel says it wants to be an edge city. Well, real edge cities have about three times as much office space as Carmel and normally have mid to high rise buildings. They look a lot more like Keystone Crossing offices than what’s in Carmel now. Take a look along the Atlanta Perimeter to see what I’m talking about. With the US 31 freeway upgrade and and excellent collector/distributor road system, the Meridian corridor can be built out at much higher densities than it is.

I know the mayor doesn’t like buildings over eight stories and there would likely be opposition from adjoining areas which might not like the shadows from higher rise construction. But as Carmel approaches buildout, it needs to start maximizing space. I’d suggest eight stories as a minimum along US 31 itself.

So I think there are things the city could definitely be doing better. But this needs to be seen in the context of a city that is doing most things right and is very forward thinking in its views in a state that is hyper-conservative and which has been falling behind the nation for some years now. Carmel is showing the path on how to make Indiana a more desirable place to live, which is ultimately how the state wins the battle for residents and businesses. Low taxes and cheap land aren’t enough. If that were the case, Indiana would already be the hotbed of growth. It takes more than low end, cheap approaches to lure people who have a choice about where to live. Carmel has decided who its target market is, and is executing a strategy to reach them. Other towns in the region have stood up and taken notice and are now trying to do a lot of similar things. Arguably it is Carmel, not Indianapolis, that is now looked to as the regional model. As a leader, Carmel now has followers. It shouldn’t come as any surprise that the metro area is now officially known as the Indianapolis-Carmel metropolitan statistical area.

Carmel and Mayor Brainard are to be congratulated on what they’ve accomplished. There’s still a long way to go to achieve the vision, but so long as the citizens of Carmel remain supportive, the city is on the right track to get there.

Sunday, February 18th, 2007

Carmel: Leadership in Action, Part Two

This is the second part in my series on Carmel, Indiana. Here is a link to Part One, which covers the background and infrastructural elements. Part Three discusses various criticisms

This part is focused on the redevelopment of Carmel’s core around the principles of New Urbanism, and the attempt to build a downwtown from scratch. New Urbanism is a recent trend in urban planning that rejects the traditional suburban design pattern of highly segregated land uses (i.e., traditional zoning) and auto-oriented development in favor of more compact, mixed use, walkable zones surrounded by green space. Such development may or may not feature overall higher densities, but that’s often a stated goal.

The core idea of New Urbanism is to recreate the traditional town center environments of pre-1950’s America. And I do mean town when I say that. Much of New Urbanism is not about cities per se, but rather about recreating a 19th and early 20th Main Street feel in suburban areas.

New Urbanism has many critics and I will confess to at least partially being one of them. I share the New Urbanist desire to have walkable (or at least pedestrian navigable) environments and mixed use. I like the idea of compact nodes surrounded by open space. But what I reject is the New Urbanist aesthetic, which is completely based around nostalgia for a bygone era and replicating 19th century architectural styles, right down to the front porch swing. Once could describe it as Disneyesque and in fact Disney actually built perhaps the best known New Urbanist town, Celebration, Florida.

Carmel has gone for New Urbanisms with a vengeance. This includes redevelopment of the core of Carmel, that is, the area inside of Keystone and Meridian, along these lines. It also includes the master planned Village of West Clay development near 131st St. and Towne Rd., which really kicked off New Urbanism for Carmel. They’ve embraced both the parts of New Urbanism I like, along with the parts I don’t like. But that’s ok. Part about being a leader is getting people to passionately choose sides. If people aren’t at least somewhat polarized by a design or policy, you can almost bet it is too bland to amount to much.

I give Carmel credit for this: they actually have a rich awareness of the choice they’ve made. So many towns just drift along by default. Carmel made an explicit choice to embrace the throw-back architecture with its neo-Georgian facades, red brick, etc. Mayor Brainard is fully aware that there are other aesthetics out there such a modernism, and he is on record as basically saying, “That’s nice, would be good in lots of places, but not appropriate to Carmel”. I admire them for putting the marker down on this one. And let’s be honest, aesthetics is largely a matter of taste. Just because the nostalgia based architecture doesn’t appeal to me, doesn’t mean it doesn’t appeal to others. Carmel is targeting a customer segment that values traditional Indiana Main Street living, and that’s good for them.

To appreciate what a change has been made, it is probably worth a couple views of what central Carmel used to look like, and in a lot of cases still looks like, with what has replaced it. While central Carmel has seen a development explosion of late, the vast bulk of it hasn’t been touched so you can see the old and new next to each other.

I mentioned earlier, older strip style development. Here’s a traditional strip shopping complex on Range Line Rd. For all the images in this post, click on the image for a full sized version.

Here’s a new development just down the street:

As you can see, these are as different as night and day. Apart from the age, they have totally different design concepts. How did this come to be? It wasn’t by accident. The city studied various ways to develop the corridors in central Carmel and came up with concepts that are enforced through overlay zoning. For example, on Range Line, all new buildings have to be two to four stories, front the street, and have any parking located in the rear.

Another corridor undergoing transformation is Old Meridian Street. Formerly one of those two-lane country roads, this is being redone as a four lane boulevard as the main street of another multi-use district. The city did a lengthy study of the area before developing a special zoning classification for this. This study is online someplace, but unfortunately I can’t find it at the moment. The photo below shows the road construction as well as new buildings under development.

This type of development style has been fairly accepted in Carmel. What hasn’t been is the increased density in central Carmel. I’ve never been to anyplace, anywhere were density was not controversial. Even in the world’s biggest cities, people frequently complain about development being out of scale with the neighborhood. In a suburban environment, it is anathema. Heck, any development anywhere in the suburbs is generally opposed by the current residents, who largely subscribe to the definition of sprawl as “the next house built in the suburbs after mine.” But Carmel and Mayor Brainard have not been shy about saying that they want to increase density.

How has this been done? A few ways. One is by encouraging multi-story development in central Carmel. For example, this can include retail on the first floor and office or residential use on upper floors in certain commercial structures, just like in a traditional Main St. The city has also allowed much more multi-family construction in the Brainard administration than under previous administrations. The mayor recently said that in the 25 years before he took office, not one apartment complex with more than twelve units had been approved. Amazing.

Today, apartments and especially condo/townhome developments, are all the rage in central Carmel. Here is an example from along City Center Dr.

This has been controversial to say the least. Most controversial of all was a large New Urbanist development called Gramercy. This would replace the 500-unit Mohawk apartments and a golf course with 2,100 housing units plus commercial development. Hundreds of people opposed this, either because they hated the density, did not like lower cost apartments going away, or hated the TIF money going to subsidize it, but the city approved it anyway.

While Gramercy passed, the Mayor, especially in an election year, clearly sensed that the city was out in front of the public on the rate of densification. In his last state of the city address, he called for sort of soft moratorium on townhome construction except in selected districts. The idea being to let things cool off and the market to absorb the planned construction. The mayor clearly knows that if you want to have any sort of real walkable community, it takes residential density to generate the level of demand to support pedestrian oriented retail. So I expect density to be back after the election – assuming Brainard wins, of course.

Still, the mayor has talked more about higher density than actually creating it. A lot of New Urbanist development is built to look dense, but it is a type of faux density. The density doesn’t change just because the parking lot is the back instead of in the front. The new development below at 116th St. and Guilford Rd. shows this perfectly. Here’s the Guildford facade view:

Note again the New Urbanist look. But if you go around the back, you find a traditional parking lot:

In effect, this is really just a strip mall made to look a bit different from the outside. I think this development perfectly illustrates one New Urbanist critique that this design trend is as much about aesthetics as it is about substance.

Still, there has been real and legitimate densification that has occured. Replacing 500 units with 2100 units a la Gramercy is for real density, not faux density. And some of the new developments in Old Town and City Center are a step up in density as well.

Speaking of Old Town, Carmel was never a historically large city in Indiana. It was Noblesville that was the county seat. Carmel was just a tiny stop on the Monon. As a result, its Main St. is much smaller than the town’s population would lead you to believe. What’s more, this Main St. was sort of off the beaten path. Unlike most other Indiana towns’ Main Streets, this one was not even on a state highway. But like most Indiana towns, Carmel’s Main Street, centered on Main St. (131st St) and Range Line Rd. had seen significant decay and neglect over the years.

When Mayor Brainard was elected, he said no one could tell him where downtown Carmel really was. Different people had different ideas about it. He realized right away two things: 1) the existing downtown Carmel, known as Old Town, was not large enough to be a focal point for a city the size of Carmel and thus a new downtown center was needed and 2) even so, Old Town should not be abandoned. His two-pronged solution was to turn Old Town into an Arts and Design District and to build a new downtown from scratch a half a mile south at 126th and Range Line.

First Old Town. Again, adopting both New Urbanism and principles he picked up from other places, the mayor decided that the Old Town district needed a theme if it were to be successful. After some thought, the concept of the Arts and Design distrct was born. Firstly, the city spent $18 million to redo the infrastructure in the area, include a significant upgrade of the sewers, and streetscape improvements. Here’s what was done to Range Line Rd. north of Main St.

Next, the same New Urbanism and densification was undertaken on Main St. Many of the old, single story buildings and strip type development were acquired and redeveloped. These featured first story retail and upper floor office/residential. Here’s an example of new development under construction on the southeast corner of Main St. and Range Line:

Here’s another shot of the Main St. streetscape from the Monon Trail which runs just west of the core of Old Town. The metal superstructure you see is the frame of the forthcoming Evan Lurie Gallery.

The city has been successful in upgrading infrastructure, buildings, and aesthetics. It has lured a number of upscale restaurants including a branch of Indy’s Bazbeaux Pizza and a establishments such the Irish Pub Muldoons (try the tenderloin). Public art, of dubious quality IMO, has been installed. Various boutiques have also opened. What’s missing right now is the actual arts and design. Clearly, this area has improved significantly and is seeing dramatically increased patronage, but there’s a long way to go.

I plan to do a full review of the Arts and Design District at some point, so I won’t try it here. But this is one area where the nostalgia aesthetic really hurts Carmel. The art and design language of today is modernism. What kind of arts district can you really have when art and design as it is practiced today has no place in it? This is the fundamental question Carmel needs to address. Now, this district might end up being successful in a commercial sense, but if the actual art and design ends up being of the Thomas Kincaid variety, it will be at least a partial failure in my book.

I don’t have any photos of the City Center because it doesn’t exist yet. Today the core of it is just a hole in the ground. But you can view a site plan on the City Center web site, and see rendering of various components in the Mayor’s 2006 state of the city speech presentation. The City Center is a $300 million, mixed use, public/private partnership between the city and a company called Pedcor Development. The site of the City Center is an abandoned strip mall. The project itself involves 230,000 square feet of retail, 170,000 square feet of office space, 300 residential units, a 100 unit hotel, a 1,600 seat performing arts center and a 500 seat theater. The idea is to create a true live/work/play centerpiece that is big enough for a community heading towards 100,000 people that is also a regional draw as well.

Other than Gramercy, the City Center is probably the most controversial project in town. Largely this is because of the TIF debt the city took on to fund a good chunk of it, including $80 million towards the cost of the performing arts center. Critics have pounced on the amount of borrowing the city has undertaking in recent years. I personally believe this is a smoke screen. Complaints about money are seldom, at their core, really complaints about money. Tax dollars are just an easy way to gain resonance. Ultimately, the critics think this project is mayoral hubris, and that’s why they don’t like it. It has become a focal point for all the critics to latch onto.

The City Center is by no means a sure thing. It isn’t guaranteed to be a long term success. But again, Brainard hasn’t tried to be out on the bleeding edge here. This type of investment has been made in many suburban communities across the country and has proven successful. This includes both the build a downtown from scratch model and the performing arts center concept.

To me the real leadership Carmel is showing isn’t just in the what, it is in the why. So often suburban towns just take what growth brings their way. When you are on the edge of metropolitan development, you don’t have to do much to attract businesses and residents. They come to you and the challenge is just managing growth.

But when the development wave passes you by, then what? Well, the old suburbs of Indianapolis, that is, outer Marion County, tells a cautionary tale here. Many of these areas are struggling. Their housing and commercial stock is inferior to the brand new things being built on the fringes. But they lack the unique character of the old urban core.

I’ve long argued that it is much, much harder to try to redevelop a decaying suburban area than it is a decaying urban one. That’s because for those who prefer urban living have no where else to go because we aren’t building new urban neighborhoods today. Redevelopment is the only game in town. But if you like the suburbs, there is a always a shiny new one to move to.

Carmel’s leaders recognize that the day is coming when major greenfield development will be over in Carmel, a day when Carmel will be “full”. When that happens, what is going to make people to continue to want to live in Carmel? How can Carmel keep on top and not allow itself to become yet another decaying suburban area?

Carmel decided to try to differentiate itself with New Urbanist development and very high quality infrastructure. Rather than being content to play in the commodity game, which it was well positioned to win at because of its low tax rate, it decided to play to its strengths as an upscale community and use the growth phase of today to put in place the things that will make people want to live there tomorrow. The high quality streets, the showpiece parks and trails, the unique to the region performing arts center, a center for arts and design – all of these are designed to continue to attract people when simply being the next cornfield outside of I-465 no longer cuts it.

That’s truly what sets Carmel apart. They understand the competitive landscape they are in, not just in Indiana but nationally and globally. They see what could happen in the future if they don’t take action. And they’ve developed a vision designed to make their community the most attractive place to live for a variety of different people, from CEO’s to retirees.

I’ve alluded to the many critics of Carmel’s strategy and Mayor Brainard. I’ll address those in Part Three.

Saturday, February 17th, 2007

The Shrewdness of Mitch Daniels

One thing I’ve not seen mentioned in all the extensive coverage of the Indiana Toll Road lease and the associated Major Moves program is how Indiana Gov. Mitch Daniels took advantage of a structural advantage to get a great deal for Indiana.

The Indiana Toll Road is part of a series of state toll highways linking Chicago with the east coast. The Toll Road connects with the Ohio Turnpike on the east and the Chicago Skyway on the west. The Skyway, incidentially, is one of the few municipally owned expressways in the United States. Technically it is a toll bridge, not a toll road, because when it was built Illinois State law didn’t give cities the power to built toll roads, but it did allow them to build toll bridges.

Unlike the state toll roads, the Skyway was a financial disaster from day one. When the interstate highway system created a free route into Chicago, traffic declined even further. The city went into default on its bonds, with the result that tolls were set by the courts, leading to the highest tolls in the region, upwards of $1.50 to $2. But the Skyway still didn’t break even.

The city under current Mayor Richard M. Daley then decided to get aggressive on this. They cut a deal with the bondholders on the Skyway which saw the debts settled for pennies on the dollar. This got the Skway out from under receivership – but, the city didn’t drop the tolls. Instead, after wiping out the bondholders, the city invested in improvements to the condition of the long-neglected road, to increase traffic. Then when the Northwest Indiana casinos opened, traffic boomed. Daley had outfoxed the bondholders and now had a cash cow on his hands.

Now that it looked like the Skyway would be solidly profitable, Mayor Daley started looking for ways to get his hands on that money. He intended to divert a significant portion of the toll revenue stream to pay for street improvements in the city. Motorists cried foul and various people filed lawsuits to stop this diversion, and the mayor quietly dropped this idea.

Meanwhile, over in Indiana, tolls had been stagnant for quite some time. The disparity in tolls is obvious to anyone who ever drove that route. While the Skyway toll at the border crossing was $2, Indiana’s was only $0.50. Chicago was getting four times as much revenue from the border crossing as Indiana. While this might have been something to ignore when the Skyway was in receivership, now that it was a cash cow for Daley, the inescapable conclusion is that Da Mare was playing Indiana as chumps. I actually pointed this out to INDOT any anyone else who would listen, but nothing was ever done.

With his plans to directly divert toll revenue dead, Daley switched tactics. Rather than diverting tolls himself, he leased the Skyway to a consortium for $1.8 billion cash. He was then free to spend this on anything he wanted. The consortium also got the right to raise tolls to $4 over a ten-year period to recoup their investment.

This is where Indiana Gov. Mitch Daniels came in. A savvy financial man, having run the Office of Management and Budget under President Bush, Daniels came into office having pledged to the voters he would shake thing up. One of the first things he did was come clean on the fact that INDOT had promised local communities billions more in road projects than there was money to fund them. He started a prioritization process then set about looking for ways to bridge the gap.

Leasing the Toll Road was the perfect solution. Various people have complained that the state could have just raised the tolls itself and used that money for other state road projects, but the experience of Chicago should show that would have been politically unworkable. Rather, the Daley lease plan was the way to go.

Here’s where Daniels’ shrewdness came in. He knew about the huge disparity in toll rates at the border. He also knew that the consortium that leased the Skyway was dependent on maintaining traffic and doubling tolls. But what’s more, he knew that basically the only way to get onto the Skyway is via the Indiana Toll Road. Indiana could raise its border crossing toll to $4 to match the Skyway increases or even jack it up higher to completely choke off the flow of traffic on the Skyway. The consortium that leased the Skyway was completely at Daniels’ mercy. Indiana could afford to drive border traffic to zero because the Toll Road traveled the length of Indiana and could remain solvent even if all the traffic diverted to the Borman Expressway approaching Chicago.

It shouldn’t come as any surprise that when Indiana put the Toll Road up for bid, the same consortium had to buy it, that they bid twice what any other bidder offered, and gave far more than initial estimates. Their backs were against the wall. Gov. Daniels exploited Indiana’s leverage masterfully to drive a hard bargain.

That’s one reason I think the time is ripe for Ohio to put the Turnpike up for bid. The same group would no doubt pay the most, just to retain control of the entire road. Now, Ohio doesn’t have quite the leverage Indiana did because the Ohio Turnpike doesn’t have a single chokepoint problem. But given that the Turnpike is probably worth more than the Indiana Toll Road in its own right, I’d expect them to get a very good deal. The favorable financial, sentiment, political, and legal environment for these types of deals may not last forever, so Ohio should strike while the iron is hot.

Indiana leased the Toll Road for $3.9 billion. Now that’s only about 2x the Skyway for a much longer route, so I’m not actually convinced Indiana squeezed the maximum value out of its asset. But regardless, this is great for the state and shows the real leadership of Gov. Daniels who, unlike Daley, had to stare down intense public opposition to the deal. Thanks to his real leadership, Indiana is now positioned to actually build much of the backlog of its critically needed transportation projects.

Sunday, February 11th, 2007

Carmel: Leadership in Action, Part One

Carmel, Indiana is an Indianapolis suburb just across the northern border into Hamilton County. It has long been one of the premier addresses in the region, and clearly the most upscale suburb. The person who used to run the Indianapolis office of my company once remarked that he’s never lived in another city where there was just one “rich suburb”. When you think of wealthy communities in Indiana, it is Carmel and only Carmel that comes to mind. And believe me, most people in the state know it. So this is a town that attracts a unique type of scrutiny beyond that of almost any other suburb in the country and certainly more than anyone else in Indiana. When Carmel does anything, the critics are ready to pounce and denounce. Interestingly, while Carmel does have some rich people in it, it actually has a diversity of income levels. Most homes there are not mansions. But the reputation remains.

Despite having this reputation, for a very long time there really wasn’t much different about Carmel versus most other Indiana towns. Except for some estate homes in western Clay Township – technically to this day still not even part of of the city of Carmel – it looked and functioned much the same as any newer suburban area in Indiana. There were a few things Carmel had done differently, such as putting an overlay zoning ordinance on Meridian St. to require high quality office development there, but for the most part it was like many places in Indiana. The first time I visited Carmel, I was actually shocked. I was expecting some fancy enclave and saw some generic older strip malls, seedy and decaying industrial areas, a tiny ghost town of a downtown, lots of two-lane country roads that had never been upgraded.

Then in the mid-90’s, new leadership came into office in Carmel, led by new Mayor Jim Brainard. Mayor Brainard had a big vision for Carmel and how it could be transformed from this rather standard suburb into one of America’s premier edge cities. (Whether Carmel is in fact an edge city is a topic of a future posting). This involved taking Carmel in a very different direction from a typical Indiana suburb. Given the resistance to change in most people, and for which Hoosiers particularly are known, this has been a challenging journey, with every move along the way subject to intense opposition. But he and the other people who’ve gathered around him to pursue this new vision have not wavered in their pursuit of it, and on the whole, the voters of Carmel have continued to back them up.

In one of his state of the city speeches, Mayor Brainard encouraged people to “get out into the world” and see what is being done in other places. That’s advice that all too seldom heeded in Indiana or in lots of other places. Progress tends to be judged against only local past and present, without any consideration of what is going on elsewhere. This can lead to a false and misleading belief that a city is forging ahead when it is in fact falling behind. It is all too easy to believe your own press and end up not recognizing how you stack up against competitors.

I suspect the mayor took his own advice, traveling to cities around the US and world and came to the same conclusion I did: despite its Indiana reputation, there was really nothing special about Carmel. It wouldn’t even have cracked the top 15 suburb list in Chicago, San Francisco, or lots of other places. Smartly, the mayor didn’t just do this for himself, he organized trips of other city leaders to see first hand what other premier suburbs across the country were doing. There’s a saying that “Without awareness, there is no choice”. If you aren’t aware of your own behaviors and how you really stand in the world, you aren’t really making a conscious choice about what you want to be.

Armed with that awareness, Carmel set forth a new vision that I would articulate as follows:

1. Embrace true, world class excellence. A lot of places talk about world-class without any understanding of what that really means. But Carmel is really trying to follow through.

2. Seek to be the best anywhere, not just the better than your own past. The new benchmark for Carmel is not Greenwood or Fishers. It’s not the old Carmel or the current Carmel. The benchmark for Carmel is the very best of what is being done in the world’s other great cities.

3. Create a distinctive community based on New Urbanist principles and traditional Indiana Main Street values. I will talk about this at some length.

4. Seek to be a true city, not just another suburb. That doesn’t mean trying to supplant or declare independence from Indianapolis, but it means having the ability to really live, work, and play in Carmel, and being a destination point for others.

5. Persevere on the journey. The Carmel transformation is going to be very long and very difficult. It takes a leaders committed to seeing it through to the end to make it happen.

So, how has this been put into practice? I’ll review some of the key accomplishments and changes that have occured.

Roads

First has been putting in place real infrastructure. Like so many growing suburbs, Carmel had an antiquated road network made up largely of unimproved arterials on a one mile grid. These were basically narrow, two-lane country roads, with drainage ditches and no sidewalks. Carmel has been on a veritable orgy of road building in the last decade trying to catch up with the transportation needs. The result is a community that, while still having congestion, is better off than many other area suburbs. Roads that have been built include:

  • 96th St. widening from Keystone eastwards, including a new White River bridge.
  • Hazeldell Parkway, a four lane boulevard running the entire length of the city on the eastern edge.
  • 116th St. through central Carmel widened to four lanes
  • Old Meridian being widened to four lanes
  • Illinois St. being built as a new four lane collector/distributor road west of Meridian, and the similar Pennsylvania St. on the east side
  • 146th St. being built as a four lane major arterial on the northern border of the city (a county project)
  • The 126th St. / City Center Drive extension.

But these expansions are really not the most notable part of the change. What’s more important is the new standards of design quality that Carmel brought. When it built Hazeldell Parkway, Carmel didn’t just build a four lane road, it built a lavishly landscaped parkway, completely with multi-use trails on both sides. This really set the standard for road construction around the region. I truly believe that without the high quality projects done in Carmel, this type of construction would not have been adopted by other communities in the region the way it has.

What’s more, as part of the Hazeldell project, Carmel installed its first two roundabouts. These proved so successful that Carmel went on to built two-dozen more, and is now set to double them again. This has made Carmel a leader in roundabout construction nationally. Again, other area communities are now starting to adopt them, but Carmel has a huge lead. These roundabouts have proven to significantly reduce traffic congestion while being safer to boot.

As you can see in this picture, Carmel has also done extensive landscaping of its roundabout network. The focus is as much on quality as it is on capacity.

After Hazeldell, every town in Hamilton County is now building nice boulevards for their primary arterials. But Carmel has upped the game even further, building parkways for its secondary arterials and collector roads as well. Other towns are still relying on two-lane country roads for this.

Here’s one example from eastern Carmel. This is River Road. These new roads are as nice as any suburban collector roads anywhere. Clearly, there is still a long way to go, but Carmel has about $75 million in road projects already in the pipeline over the next four years to redo many miles of roadway.

The city is also engaging with INDOT to improve the state roads. It wants major design changes to the proposed US 31 freeway project to include underpasses instead of overpasses and roundabout interchanges instead of diamonds. The city also reached an agreement in principle with the state to take over Keystone Ave., which the city intends to convert to a limited access parkway with grade-separated roundabout interchanges, another new concept to Indiana. How this is different from other towns is easily shown by looking at the recently completed Michigan Rd. expansion. The Carmel, even though that section off roadway is not actually in the city limits, pressed the state to put sidewalks on both sides. Indianapolis let the state do whatever it wanted. The end result is that the sidewalks abruptly end south of 96th St. when the road crosses into Indianapolis, as shown in this picture.

Parks

The city has also upgraded its parks infrastructure. It formed a joint parks district with Clay Township to provide for a township-wide park system. In the last decade, Carmel went from about 60 acres of parkland to closer to 600. This includes the new $55 million Central Park on 111th St., a new community centerpiece.

Additionally, one of the first parks related items the city did in the Brainard era was to build the Monon Trail. This is a rails to trails conversion. Indianapolis already converted its section of the Monon into a highly successful trail. Extending this system to Carmel might have seemed like a no-brainer. But there was enormous resistance. Many property owners fought and fought it. Also, ownership of the needed parcels was split across about 250 property owners due to the way the Monon acquired the right of way in Hamilton County. This involved a very lengthy land acquisition process. But despite the opposition, the city stayed the course and now Monon is a community showpiece. The city continues to improve it by building overpasses and underpasses at major street crossings. Additional trails are in the works.

Utilities

Utilities and city services have also been a focus. The city has long had top notch utilities. But one telling moment about Carmel was what happened when the Indianapolis Water Company was re-acquired by the city. IWC actually supplies water to many suburbs, which included part of Carmel. When the transaction happened, Carmel was the only town that wanted to get control of the water lines in their town. Mayor Brainard threatened to sue unless Indianapolis sold them to them, which they did. Now Carmel controls 100% of its own water supply. This was a once in a lifetime opportunity for cities to get control of their own utilities, and only Carmel did it.

Annexation

Perhaps the most controversial change has been city annexation policy. What is commonly known as “Carmel” is Clay Township is southwest Hamilton County. But the city of Carmel itself was only a small part of it. Previous generations of city leaders did not annex much territory, allowing development to occur outside the city limits. The city council has been on a mission to annex all of Clay Township. In a series of 50+ annexations, the city closed in most of the “doughnut holes” and brought the bulk of the township into the city limits. There are two large parcels remaining in southern Carmel, both of which are subject to current proceedings. The city has experienced significant setbacks in these cases as the courts have ruled against Carmel’s annexation. So the dream of annexing all of Clay Township may yet unravel. But even if it is does, a lot of work was completed.

Carmel also made an attempt to annex a significant amount of land in Washington Township, home to Westfield. Westfield was another town that had not annexed much territory, but allowed lots of subdivisions to be built in the middle of unincorporated territory. Much of the development was of fairly low quality and the Westfield-Washington zoning authority pretty much rubber stamped anything. Though Carmel’s annexation failed, this was a wake-up call to Westfield, which stepped up an annexed the entire area. Westfield is actually now the best positioned suburb in the area to control its own destiny because it has annexed all subdivisions in its area and so won’t have to fight the battles Carmel is going through. Westfield also decided to convert from a town to a city, and is getting serious about improving the quality of development there. The town council just adopted a new comprehensive plan and the town’s first ever thoroughfare plan. (Believe it or not, Westfield just relied on the county’s plan without having one of their own). While I did not approve of the Carmel “land grab”, that annexation battle is probably the best thing that’s ever happened to Westfield. It forced that town to grow up and get serious.

There’s a lot more to write about Carmel. Part Two, to be posted next week, will cover the embracing of New Urbanist principles and redevelopment of the city center. And Part Three discusses criticisms of the current approach.

Sunday, February 11th, 2007

What Makes a Great Orchestra? (Or a Great City?)

The Financial Times had an article in their Weekend section this week on what makes a great orchestra. Now mind you, what they are talking about is the Urbanophile definition of great: being considered one of the world’s top ensembles. Why is it that the Berlin Symphony qualifies and maintains its stature generation through generation, despite new conductors, while other orchestras don’t?

The author goes on to consider several factors. A great conductor alone can’t do it. Many ensembles rose to prominence under a great conductor only to fall back into the pack when he left. Obviously, having a first class concert hall, touring on the world’s great stages, and having lots of money are part of it, but again, many orchestras that have all that don’t enjoy the same reputation. The author’s conclusion is that it takes a certain something else, a certain type of proprietary sound that gives a unique feel to the orchestra. And of course, once you’re in the club, it’s difficult to get yourself ejected. Reputation begets reputation.

I think a similar question is worth pondering about cities. What is it that makes a great city? All too often those who are trying to take their city to the next level treat game of big city as if it is about a laundry list of amenities: pro sports teams, a fancy new symphony hall, rail transit, more people, downtown lofts, etc. All of these things are good. You can even argue that having at least some of them are necessary. Sustained leadership over a long period of time is critical. But I’d argue that it is something else that makes a city truly great. It’s that certain unique feel, a special culture, etc. Something that sets it apart from every other city with an NFL team and light rail line. Take away the sports teams, BART, and even the symphony, and San Francisco is still a great city. The things that make it great are hard to take away. So the next time someone argues that their city need X, where X is something supposedly all real big cities have, remember that while X might be nice, just having a long list of X’s isn’t going to make your city truly great. To get there, you have to dig a little deeper.

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Topics: Arts and Culture, Urban Culture

Saturday, February 10th, 2007

Louisville’s 2007 Competitive City Report: A Critique

An organization called the Greater Louisville Project recently issued its 2007 Competitive City Report. The mission of this organization is to move Louisville into the top tier of its competitor bracket. Since that’s the bracket I cover on this blog, this is a study I’m interested in. It tracks Louisville’s competitive standing across three main dimensions: educational attainment, 21st century jobs, and balanced regional growth.

In general I found this study fairly weak. Many of the charts are unreadable. Raw data in a tabular format was not available. Their basis of comparison is imperfect, though to some extent I consider this inevitable as it is difficult to draw a truly apples to apples comparison between cities. What’s more, they use inconsistent measures of comparative basis, and the one being used in each case is not even mentioned on many of the charts. For example, educational attainment appears to be based on the central county of the MSA, while homeownership by race is based on the entire MSA. I’ve noticed this is commonly done in locally commissioned studies and it always raises a red flag with me.

Some of the charts didn’t even to make sense. For example, consider the very first one on page two. I’m not even sure if this is a real chart, or if it is just a piece of illustrative artwork. There is no data even describing what it is. And what’s more, the two charts don’t foot. Both of them contain a measure of year 2000 data but the values for 2000 are inconsistent. For example, Louisville is below Kansas City in the year 2000 on the bottom chart but above it in 2000 on the top chart. This was by far the worst graph, but others were similarly confusing. The authors seemed focused on creating eye candy versus communicating information.

Another example. The study talks about three areas they are tracking up front, but at the end of the study they mention five areas, which only partially overlap with the three areas. What is the relationship between these? It isn’t made clear.

I did take a run at parsing this, however. And came up with some general conclusions.

Regarding education, it does appear that Louisville’s educational attainment is increasing. For example, the percentage of adults aged 25-34 in Jefferson County with a bachelors degree or higher increased from 22.6% in 1990 to 33.1% in 2000. That’s real progress. Whether it backs up the claim that Louisville is gaining on competitors cities is open to debate.

As I said, there is no good way to get an apples to apples comparison of data between cities. Perhaps the best measure is urbanized area, but it is difficult to get stats sliced that way. The absolute worst way is to use central city populations and to their credit, the study authors did not do that. Central county population is a much better comparative base. However, I believe this can cause misleading comparisons. Jefferson County, Kentucky remains dominant in its MSA. Other than some urban development in Southern Indiana, most of the rest of the collar counties are still fairly rural. So eastern Jefferson County really continues to be the dominant residential and commercial location for higher educated and income people. This is in contrast to some larger competitors. For example, Kansas City has major suburban centers like Overland Park directly across the border in Kansas. Indianapolis has Hamilton County just north of the city, population ~250,000, which is the premier white collar address. Other competitors cities have similar structures to which Louisville has no analogue. I noticed right away when the Census stats came out that Louisville’s worst comparison metric vs. other cities was MSA college degree attainment. MSA measurement has its own flaws I’ll be the first to say, but people should be aware that a central county comparison probably inflates Louisville’s relative standing.

On the 21st century jobs front, I must confess it was difficult for me to draw a clear picture from the data they assembled. The takeaway the study group wants us to draw though, is that while the city is making very good strides in beefing up its educational attainment, there is still a lot of work to do on the jobs front. I can buy that.

Balanced Regional Growth is a topic that immediately raised red flags with me. This is the one area that seemed to perfectly overlap between the three topics and the five topics. Their description of the goal here was vague, but it doesn’t take an expert in Bill Clinton type parsing to figure out that what they are really talking about is finding a way to make sure that Jefferson County, Kentucky continues to remain the dominant force in the region.

Consider this definition of Balanced Regional Growth from the study: “The challenge is to think and act more a region, improving transportation and cooperation to ensure equitable development”. Or this other statement: “Louisvillians have traditionaly put a high value on cohesion and convenience that allows them to enjoy both big-city amenities and a small-town atmosphere. Both are at risk without vigorous efforts to achieve balanced growth across the metropolitan region.”

Think and act more as a region. Ok, I got that. And I agree with it. I think better regional cooperation is one of the key to-do’s on Louisville’s plate. But what is “equitable development”? And how does one define “cohesion and convenience” and how does the study group know these are valued by Louisvillians? For that matter, what is there definition of a Louisvillian? It doesn’t take a rocket scientist to figure out what all these nebulous, feel good terms really add up to.

It is very clear from the report and the GLP web site that they are fully aware that Louisville is reaching the point that a lot of its larger peers like Kansas City and Indianapolis already have. Namely, the central county is filling up, and can’t rely on edge development within the county boundaries for economic growth. Instead, the development wave is heading to outlying counties, leaving the central county as a whole in the role of central city. I’ve long argued that in some ways Louisville’s city-county merger took place just at the point when it had ceased to be relevant. Perhaps that also explains why the voters endoresed it. They realize they are all central city dwellers now. If Indianapolis is a case study here, it shows what is in store for Louisville: residents starting to flee now decaying surburban areas to build new enclaves in the collar counties. Offices, jobs, etc. are soon to follow. So Jefferson County is right to be worried about this.

The problem is that regionalism isn’t the answer. Their definition of regionalism seems to be all about benefits for the central city. Why would anyone not living there sign up for that? What is Louisville actually going to do for them? That’s the question that needs to be answered first. When you are the big dog, you have to move first in order to establish trust. Especially in light of the extreme hostility that has traditionally been shown to suburban areas by Louisville generally and Mayor Jerry Abramson in particular. That mean’s Louisville needs to start treating its suburban areas as a community asset and draw, not as competitors.

Consider Southern Indiana. Jerry Abramson spent years campaigning against an east end bridge that would open up eastern Clark County to development and, to his horror, allow drivers to bypass downtown. Louisville leaders have continuously bashed the Caesar’s casino. They handed big money to induce Hillerich and Bradsby to relocate to Louisville from Jeffersonville. Just recently they convinced Metal Sales, Inc. to move from Indiana to Louisville. That’s Jerry Abramson’s definition of regionalism. Until Louisville changes its tune on the surburbs, the call for regionalism is going to be seen for the transparent fraud that it is.

As I say, Louisville needs to take the lead. Here’s a few things that they could to start establishing trust:

- Agree to a non-agression pact where all communities agree not to try to poach each other’s businesses.

- Repudiate the anti-casino rhetoric and embrace Caesars as an asset to the community. I don’t like the idea of a casino in town myself, but it is there, so make the best of it. No one has to apologize, just make the switch from negative to positive.

- Start meeting regularly with other regional leaders. Find out what Louisville can do to help them. Actively campaign to bring businesses to collar counties when there isn’t something directly in it for him.

- Tout as community assets other items not in Louisville proper. A few well placed words in a speech would certainly be recognized.

These would be a start. Louisville has about the poorest regional cooperation of any city I know. Getting on board with real regionalism now is something that is critical because like it or not, the days where Jefferson County is the center of development are just about over and aren’t coming back.

On the whole, the goal of this GLP group seems laudable, even if I would have a slightly different vision. But this report was not top quality work and embodies some dangerous ideas such as faux regionalism that can do more harm than good.

Thursday, February 8th, 2007

Think Tank Ranks Bioscience Jobs Concentration

Battelle, a Columbus, Ohio based think tank, recently released a study measuring bioscience employment in metro areas across the country. This study tracked four key sectors: Drugs and Pharma, Agricultural Feedstocks and Chemicals, Medical Devices and Equipment, and Research, Testing and Medical Labs. Notably excluded from the survey are hospital and academic research institutions. However, given that most large cities have these, it may not be as distinguishing a factor as elsewere.

Among cities I typically cover in this blog, here is how some of them scored:

City Rank Jobs
Chicago 4 46,000
Minneapolis 7 28,613
Indianapolis 9 24,051
St. Louis 16 13,930
Seattle 17 13,617
Salt Lake City 19 12,588
Milwaukee 23 10,605
Kansas City 24 10,552
Atlanta 25 10,270

Only 25 metro areas had employment levels above 10,000. I normally focus on the 1-2 million population metro areas here, but I threw some larger cities on the chart for comparison. Among cities I normally talk about in this blog, Cincinnati, Columbus, Louisville, Nashville, and Charlotte did not make the list.

A few observations about some of the cities on the list.

Minneapolis was dominant in Medical Equipment and Devices. I believe Medtronic and others are based there or do much of their research and manufacturing there. It is number two in the country behind Los Angeles in total employment in this sector, which accounts for about 75% of all local bioscience jobs.

While everyone knows Indianapolis is home to pharmaceutical giant Eli Lilly, I doubt many people would have expected it to score #9 on this list. While pharmaceuticals does account for over half of local employment, this sector is not as dominant as medical devices is in Minneapolis. In fact, Indianapolis, with employers like Roche Diagnostics and Dow Agrosciences, is one of the few metros with respectable employment in all four sectors measured by the study. Indiana as a whole also did surprisingly well, as there are numerous outstate companies like Cook Group and Biomet in addition to the Indianapolis employment hub.

Kansas City also has a very respectable employment base for its metro area size. Of particular note is its large Research, Medical, and Testing Laboratory component, which is over 50% of the local bioscience employment base.

The full report is available online for review for those who are interested in more information.

Wednesday, February 7th, 2007

Postcard: Fountain Square, Indianapolis

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Topics: Architecture and Design
Cities: Indianapolis

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