Thursday, September 30th, 2010

Chicago’s Metra Postpones Bridges Project

Update 10/2:The Chicago Tribune writes that the project was flawed from the start.

For my national readers, Metra is Chicago’s commuter rail agency. Back in August I strongly criticized Metra’s UP-North Line bridge reconstruction project. My principal complaint was that this project took an existing embankment that supported three track operation and reduced it to a maximum of two tracks. It also involved spending transit dollars to raise bridge clearances for trucks. And it involved an extensive section of single track operation for eight years of construction. As I noted, all of these factors are extensively inter-related.

Of course that [lower impact construction techniques] would be a lot tougher to do if the grade is being raised significantly. That’s a much more complex undertaking and is one reason that this project is going to involve eight years of service disruptions from reducing the line to only one track for an extended distance. (Yes, the right of way is for three tracks, but it is permanently being reduced to two by an eight year project that temporarily reduces it to one).

I called on the Board to conduct an independent review of the project prior to going forward with construction. Other knowledgeable transit advocates also questioned various aspects of this project and asked them to be re-evaluted. But Metra’s management was insistent theirs was the only way.

As I noted last Friday, the result was chaos and huge numbers of angry riders as the single track operation proved far more disruptive than Metra’s management anticipated. After a huge public outcry, today the agency acknowledged the plan wasn’t working and announced it was suspending the project. Trains revert to their previous schedule on Sunday.

I commend Metra for backing off a plan that clearly wasn’t working. Now hopefully there will be an opportunity to review the project and move forward in a way that preserves the three track capability (though not necessarily rebuilding the third track today) and minimizes service disruptions to riders. Ideally also truckers would be forced to pay for any benefits of the project designed principally for them.

Little information is available at present, but hopefully this serves as an impetus to further reforms Metra clearly needs. Let’s not miss this golden opportunity to rethink both this project and the way regional transit agencies approach projects.

Thursday, September 30th, 2010

A Civic Going Out of Business Sale

State and local governments from coast to coast are making major budget cuts as they grapple with plunging revenues and years of deferred investment and maintenance. One refrain of some has been that just like with household budgets, government simply cannot spend more than it takes in. Thus painful cuts are the only option.

There’s no doubt this is true in the short term. Clearly, we have to make adult decisions about priorities and can’t spend money on everything, no matter how much shrieking about the end of the world every single special interest group on the planet makes when they are asked to step up to the plate and do their fair share to balance the budget.

But let’s take this household analogy further. Let’s say a family is forced to make major cuts, to the point where they have to start cutting back on maintaining their car. They can’t afford oil changes, tires, brakes, etc. when the old ones wear out. All they have money for is food and shelter. In a sense it would be true to say that they don’t have money to spend on oil changes. But if you can’t afford to pay to maintain your car, what you’re really saying is that you can’t afford the car, period.

Similarly for cities, if they can’t afford to maintain their infrastructure, run decent schools, or provide any services other than basic public safety (and often even having to make cuts in that), what they are really saying is that they can’t afford to be a city.

That’s the situation too many places find themselves in. They can’t afford to be cities, and so are really in the process of an extended civic going out of business sale. As with a company that has been issued a going concern warning by its auditor and is about to be delisted from the stock exchange, people smell the whiff of death about it, so it doesn’t attract many customers or investors. Which is to say that people aren’t moving there – they are moving out if anything – and businesses are staying away. Who wants to stake their personal or financial future on a place that might not have a future of its own?

This is something merely balancing this year’s budget isn’t going to fix. What’s really needed is to restore investor confidence. That’s going to take more than balanced budgets. Just as most companies don’t fail because their costs are too high, but rather because of the forces of creative destruction, excess leverage, poor product positioning, quality and customer service issues, a bad strategic concept, etc., most cities don’t fail because their budget’s too big, but because they are no longer relevant to the marketplace. They are selling an inferior version of a product that customers no longer want to buy.

For too many struggling cities, especially former industrial towns, even if their current service levels could be delivered for a budget of zero that wouldn’t save them.

The real issue with many cities is that their leaders spend too much time grappling with short term issues, particularly budgets in the present day, and not nearly enough time thinking about where the trend line is taking them and what they need to do to drive a materially better outcome in the future.

That’s the challenge – and a hard one. Cities with long standing enlightened leadership and populations – like Columbus, Indiana, for example – have been able to stay strong by staying ahead of the curve. For those where the rot has already taken hold, it’s a far greater struggle. This applies not just to regions, but also struggling suburbs and inner city neighborhoods even within thriving metro areas.

By all means budgets have to be balanced and spending bloat can kill you. Fiscal and operational matters must be attended to. But until these places take a hard, spare no illusions look in the mirror and develop a compelling reason for a person or business to hitch their fortunes to these places instead of thriving ones elsewhere, too many older cities will continue on the slow road to oblivion.

Tuesday, September 28th, 2010

Jason Tinkey: The World Laps Chicago

[ Today I’m launching a series of posts leading up February’s Chicago mayoral election called the Future of Chicago. I will share my own thoughts on the critical issues facing Chicago today, along with important views of others where I can get them. In fact, I start with a perspective today by relatively new blogger Jason Tinkey who writes at The Planner’s Dream Gone Wrong. Tinkey highlights one of the major civic problems, namely how Chicago, once an innovator and leader in public space design, has fallen woefully behind. Today’s example: bike infrastructure – Aaron ]

Since the World Cup is on it’s two-day break before the quarterfinals begin, I have a chance to think about things less important. A few years back, Chicago was held up as a shining example of what big cities could do with bicycle infrastructure when the civic elites set their minds to it. Then, apparently, Mayor Daley got distracted by his dreams of Olympic glory, selling off the rights to the city’s parking meters, inventing new ways to use the English language and who knows what else. Nowadays, a lot more is happening in New York, London & Mexico City than here at home.

I’ve been reading about what transportation commissioner Janette Sadik-Khan is doing in New York for the last couple of years with great envy. It wasn’t until I finally booked myself a trip to London later this year that I realized how much we’ve slipped. As we all know, London is a sprawling metropolis, and as excellent as their transit system is, I’ve grown so accustomed to getting around by bike that I figured it would help out my patience and my wallet to do so during my visit. They don’t have an ideal system in place just yet, and reading the comments on various posts on the Guardian’s bike blog would indicate that there is still a very, very long way to go. But let’s run down what’s coming down the pike just this summer…400 bike share stations throughout the center city and completion of the first two “cycle superhighways”. All under the aegis of a Conservative mayor in need of a new hairstyle who rides a bike to work. The city is spending £110 million just this year, a big chunk of which is coming from Barclays, who get naming rights to the programs and even get to put their logo on the maintenance crew’s uniforms. But what impressed me more than anything is that the city’s bicycle plan is totally integrated within the framework of Transport for London (TfL), the government body charged with running the Tube and double-deckers. Go to TfL’s website and you can find an entire section with information on bike sharing, route planning and even a page where users can upload their own routes into a Google Maps mashup.

Again, the system isn’t perfect, one of the largest flaws being that bikes aren’t allowed on subway trains and only on buses “at the driver’s discretion”. However, it really got me thinking about the RTA here in Chicago. Public transit planners worldwide struggle with the dilemma of the “last mile”. Including bikes in the equation would make transit a lot more attractive, especially in the suburbs, but of course only if adequate infrastructure exists to ride them on. This is something London really isn’t too far ahead of us on, traffic has decreased since congestion pricing went into effect, but it’s still pretty horrendous. And those streets are narrow, some London streets could fit into a single lane in a place like Schaumburg.

Speaking of lane width, I remember hearing an anecdote once about how the Mexican government promised to double the total mileage of the Mexico City’s freeways by the end of a certain year. Money for the project either dried up or was siphoned off and the authorities simply doubled the number of lanes by remarking the roads and claimed it as a success. Nowadays I guess we would call this a road diet. The effect of these sorts of actions just made room for more cars, and now the city government is attempting to undo some of the ill effects, notably the infamous air pollution. A few years back they introduced the hoy no circula scheme, which restricts drivers from using their cars on a certain day each week based on the last number on their license plate. Now, the local government is pushing bikes as the ultimate solution and has begun by expanding bike parking, installing ramps down stairs into Metro stations, bike boxes, pedestrian bollards, bike sharing, all that good stuff.

None of this stuff is all that difficult. Chicago had a deal in the works for a bike share program a couple of years ago that fell apart, and is now tentatively moving forward with 100 bikes at six stations. Six. Compared with 400 in London, where stations will be no more than 400 meters apart, which do you think will be more successful? Despite Complete Streets design measures being passed by the city, county and state, I’ve seen very little in the way of new bike lanes, bike parking, bike anything over the past couple years. There has been some stirrings of support for bike boulevards and the like, but it seems like the grassroots support falls on deaf ears at CDOT, possibly because the agency just named it’s sixth commissioner in five years? Mayor Daley set a very ambitious course five years ago with his Bike 2015 Plan…unfortunately, the amount of work left to do is daunting.

This post originally appeared in The Planner’s Dream Gone Wrong. Reprinted with permission of the author.

Sunday, September 26th, 2010

Present at the Creation

When Heather Mac Donald’s piece “Classical Music’s New Golden Age” came out in the summer edition of City Journal, I tweeted it enthusiastically. Articles like this are one of the reasons I’m a City Journal subscriber. In a world where we’re constantly bombarded with doom and gloom predictions about classical music’s future, it was refreshing to read to a contrarian perspective as a corrective. As a bit of a contrarian myself, I can especially appreciate this. One need not believe that the article is in fact literally true in order to enjoy the different point of view.

This piece prompted classical music writer Greg Sandow to pen a series of rebuttals (see here, here, here, here, and here). Sandow was obviously irked, and his tone shows it. I thought perhaps he’d taken Mac Donald a bit too literally.

Then it turns about that she took herself a bit too literally too. Not content with 7,000 words in print, she responded to Sandow’s series with a 5,000 word online diatribe titled, “The Unsustainable Declinism of Greg Sandow.”

But that’s mostly for another day. What I’d like to discuss are some of the reasons that Mac Donald gave for being so insistent this is for sure a golden age, which, believe it or not, is a topic relevant for cities. Among her reasons:

1. We have access to far more classical music today than ever before. While previous generations where limited to a narrow slice of the repertoire or only current hits, we have instant access the best of all of Western music.
2. There are more orchestras than ever, more people studying classical music than ever, and we spend more money than ever on it.
3. Musicianship today is a level of technical excellence never before seen.
4. Performers today have stripped away the tendency of previous generations to alter or bastardize works to suit contemporary tastes, and have instead have recreated music in line with the composer’s intent, the way it was originally intended to be heard and as close to the way it originally was heard as we can make it.

While one might possibly quibble with these, I’d have to agree with them. And in that regard today’s musical world is far healthier than many might give it credit for.

But abstract these to generic propositions, and one could make an argument that today is a golden age of pretty much anything. We’re fortunate to live in a wealthy, mostly peaceful and free society, one that values inquiry, and in which we have tremendous technology and techniques available at our disposal far exceeding those people of the past ever dreamed. I dare say its true that we have more of pretty much everything, more people studying everything, amazing technical excellence in every field, and incredible scholarship about how almost everything really was in the past.

Consider philosophy. I can instantly download a vast array of works from the entire history of human kind, not just in the Western tradition but any global tradition. Where once philosophy was the pursuit mostly of the leisured classes, today it is accessible to all. There are probably more students than ever. And we probably know more about Plato and Aristotle than they knew about themselves.

So ask yourself: is today a golden age of philosophy? Or of literature? Or of religion? Or of art? Or of food?

By Mac Donald’s criteria I think we could probably answer Yes to all. So in that sense I think what she’s actually doing is making an observation about the times we live in rather than a particular point on classical music.

And it’s a valid point. I must say, I’m glad to be alive today. It doesn’t take much consideration of what people lived like and what they went through even a short time ago to make me thank God I’m alive right now. While the future could get better I suppose, now is still pretty darn good, the present economy notwithsanding. This is clearly a special epoch in human existence to date.

Now back to the question. Whether one judges this a golden age must depend on what you value. Do you value being able to consume the best of what the world has ever produced with a few clicks of the mouse? Today is your time.

But will anyone tomorrow in retrospect judge this age, or any age of consumption, a golden age of classical music, philosophy, etc? It strikes me as very unlikely. Presumably, by Mac Donald’s standards, tomorrow will be even more golden, so today will rapidly lose its allure.

No, when we think about a golden age in the past, we think of the time in which those greatest of works were produced. We talk of the golden age of Athens, when those most primal works of western civilization were created. Would you rather be here reading Plato talk about Socrates, or would you rather have had a front row seat at his trial? Or, perhaps yet, would you have rather have been engaged on the field of battle, to have been one of the participants of those great debates on the ultimate questions of human existence, to strive to be one of the names written in the history books?

Would you rather applaud politely at the end of yet another perfect modern performance of Beethoven’s fifth, or would you have rather been in Vienna with Mozart, Beethoven, Hayden, Schubert and the rest? Do you want to listen to authentically performed early music, or be the composer future generations are still admiring, listening to, researching, performing hundreds of years hence?

Which era is likely to be judged the most golden, the one where the great works are consumed, or the ones where they are produced?

There’s a word for civilizations that featured an excess of luxurious golden age consumption at the expense of creation: decadence. And few decadent eras had staying power in history, except as bywords.

Fortunately for us, our creative energies are alive and well today, in areas ranging from technology (where it doesn’t seem a stretch to suggest this is an Athenian era) to popular music. But not in classical music. Indeed, the rise of imitating as perfectly as possibly, even slavishly so, the styles of the past proclaims our own lack of cultural self-confidence in the field.

Today may perhaps be a golden age, but that all depends on how you define it, and what your own personal ambitions are. We’ll see what the future holds, but I am pleased to see that contemporary composers are increasingly creating works that you can actually listen to again, so let’s hope for the best.

The applicability to cities is obvious. Do you want to be in the place that is already at its apex or at the place where the seeds of tomorrow’s great cities are being sown? I’m always struck walking around cities seeing the bronze statues of heroes and great leaders past. Who, I wonder, will merit a statue tomorrow from our own generation?

If you want to enjoy the best a contemporary American city can offer, then San Francisco is your place. I’ll admit, it’s my favorite city in the US. But I don’t imagine that if I moved there (as opposed to Silicon Valley) that I’d get to witness any great historical happenings, or play any role in defining even that city’s urban future, much less creating America’s next great metropolis.

For those who want to consume urbanism, move to San Francisco or someplace like it. For those who, like the cathedral builders of Europe, want to be a part of creating history and a legacy for tomorrow, even though that might not be recognized in their lifetime, it’s probably best to look elsewhere.

How do you define your own personal golden age? That is the question.

Friday, September 24th, 2010


People – real people – want narrative. They want to be inspired and be able to see themselves as having a place in the stories they witness. They don’t care about graphs, charts, business plans, 180,000 new jobs, capital investment totals, compound annual growth rates, MSAs, multipliers, and on and on. Get that stuff into a dossier for CEOs if you are trying to attract corporations, but get it off line and get some visually stunning and masterfully crafted narratives about Columbus and her residents online for real people to see. – Mike Reed on a Columbus Underground thread about that city’s brand

My Labor Day open thread on what successful low income neighborhoods look like prompted a ton of great discussion. If you didn’t see it, I suggest checking it out.

Top Stories

1. Greg Hinz: After Daley’s Retirement, Chicago Needs a New Approach – “What Chicago really needs now is fewer ideas and orders from the top and more proposals and initiatives from the bottom. In the same way that this city’s economy is much better at applying than innovating, its political culture needs to be opened up so that new, better policies can be implemented. ”

2. Michael Lewis: Beware of Greeks bearing bonds – Not really urbanist related, but a great read. “As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it. ”

3. Streetsblog: The Financial Foolishness of Christie’s ARC Gambit

Indianapolis Parking Meters

One particularly insidious part of the Indianapolis parking meter contract is the way closure penalties work. On hearing that meters can closed 6% of the time, you might think, How could the city possible shut down meters in the city more than that? The key is that this is not an aggregate system wide number, but applies on a meter by meter basis. Per the contract:

“Temporary Closure Allowance” means, with respect to a particular Metered Parking Space and a particular Year, Six Percent (6%) of the number of Days (rounded up to the nearest Day) during such Year that such Metered Parking Space was a designated Metered Parking Space for Metered Parking System Operations… [emphasis added]

The city might overall only close meters 1% of the time, but a major road construction project could knock out a mile of meters – and that would be $15-$20, every spot, every day, all summer long. Yikes!

I’ve previously suggesting using revenue bonds for the meter upgrades or doing a transfer to Citizens Energy similar to the water company deal. A commenter on the IBJ made another interesting suggestion: get the money from the Indiana Public Employees Retirement Fund. Pensions love long term, cash generating assets and frequently invest in privatization deals. Why not cut out the middle man? PERF would also be more likely to structure a true partnership with the city than a private company.

More Radical Racial Segregation Cartography

The previous piece I linked showing a map of racial segregation in Chicago from Radical Cartography prompted Eric Fischer (of locals vs. tourists fame) to do an entire series of dozens of cities across America. Here’s his map of New York:

Check out the whole set.

World and National Roundup

Toronto Globe and Mail: China’s new boom towns

WSJ: High speed rail stalls

Stateline: States pressed to fix local water systems

The Atlantic: Why Oklahoma City Could Represent the Future of America

Next American City: How Houston Became a Global City

Felix Salmon: A unified theory of New York biking

Washington City Paper: Inside DC’s Food Truck Wars

The Economist: The Big Sell: Asset Leasing in Chicago.

Chicago Tribune: Daley the Builder leaves unfinished business

Chicago Sun-Times: Suit: Firm negligent in analysis of parking meter deal – Someone filed a class-action lawsuit against William Blair for faulty analysis in the now infamous Chicago parking meter lease.

Terry Teachout: Disaster for the Detroit Symphony Orchestra

NYT: Thieves cart off St. Louis bricks – having already stripped all the metal from houses, thieves in St. Louis are now hauling away the bricks themselves.

St. Louis Arch Grounds Competition

UrbanStl first reported that the MVVA design team won the international competition to design the grounds surrounding the Gateway Arch in St. Louis. UrbanStl previously posted a full review of their proposal. Here’s a video of MVVA’s concept. (If the video doesn’t display click here).

More Metra Follies

Metra, Chicago’s commuter rail system, continues to live up to its reputation as “The transit agency that can say No.” This week it was “No” to quiet cars on trains. Add this to no credit cards (until the state forced them), no wi-fi, no electronic ticketing, and more.

Also, the Tribune reports on chaos and angry riders as Metra restricts service as part of its poorly conceived UP-North Line bridge replacement project. Don’t worry, the riders will have plenty of time to adjust to the new reality – eight years in fact. I hate to say I told you so, but….

Time Lapsing

Here’s another short but cool time lapse video, this one via Copenhagenize, that appears to be a promo for a conference of some sort. (If the video doesn’t display, click here).

Cargo Bikes of Copenhagen

Clarence and the team at Streetfilms have done it again. Here’s a great video of the cargo bikes of Copenhagen. (If the video doesn’t display, click here).

Historic Billboards of Chicago

Thanks to Lee Bey for linking to this wonderful 1942 promotional video touting outdoor advertising in Chicago. Very interesting. (If the video doesn’t display, click here).


Last week was (PARK)ing Day across America, sponsored by Architecture for Humanity. This involves installing temporary park areas in parking spaces in cities. This is a photo of the installation in Indianapolis. It features a shade built from recycled RCA Dome roof material, designed by Wil Marquez of Wpurpose, fabricated by iFAB, and funded by People for Urban Progress.

Note the bagged parking meter in this photo. If privatization goes through, that will be $20/day in contract penalties please.

Thursday, September 23rd, 2010

Detroit Lives!

Thanks to Rust Wire for pointing me at this simply amazing half hour short film called “Detroit Lives.” It’s very highly recommended. This video transcends the typical narrow focus on urban decay to provide an overall uplifting message about the city.

The video is put out by Palladium Boots, presumably as a promotional tool. They have several other interesting looking videos, such as “The Ruins of New York.”

Unfortunately, they rolled their own video player instead of using Vimeo or something, meaning these videos won’t display for you if you are on a platform like Google Reader. So click on over to the web site to watch – and hope you aren’t on an iPhone.

Jim Russell thinks the film makers should have gone to Youngstown. Too bad for that city that they don’t have the power of “Brand Detroit.”

Though a lot of the examples in the film are old hat, it is very exciting to see the Urban Laboratory/New American Frontier/Rust Belt Chic meme continuing to spread like crazy. I’m telling you, for many people now is the time to be alive in many of these Rust Belt cities. How often do you have the opportunity to get in on the ground floor like this, to be a pioneer, to be a founder? This is the generation and these are the people that will be written about in tomorrow’s history books. The call of being able to shape history is worth more than all the triple soy half-caf lattes you could sip by the light rail in some other city where your presence won’t make one bit of difference good or bad.

More Detroit

Wednesday, September 22nd, 2010

Iowa’s “Agro-Metro” Future

Net Domestic Migration, 2000-2009, in-migration in gray, out-migration in red. Darker shading denotes intensity.

My latest post is up over at New Geography, entitled “Iowa’s Agro-Metro Future.”

This piece discusses how Iowa is transforming from its traditional small town and rural roots into a metro-dominated state, with an agricultural sector that remains powerful, but increasingly dominated by big business farming. Though flying under the national radar, metro Iowa – particularly Des Moines – is flourishing, while much of non-metro Iowa continues to wither away.

Tuesday, September 21st, 2010

Indianapolis Parking Meter Lease Is a Danger to Downtown

Image via The Expired Meter

Indy Star Op-Ed

This is my op-ed from the Sunday, September 19, 2010 Indianapolis Star.

Mayor Greg Ballard should be applauded for seeking ways to repair the city’s crumbling infrastructure without raising taxes. His water company transaction was a great, creative deal that lowered costs, maintained local control, and generated badly needed funds for capital improvements. But the proposed parking meter privatization is a bad deal, and one that puts the future of Downtown and Broad Ripple at risk.

Modernizing meters and bringing rates in line with the market are good ideas. But while the city did learn some important lessons from the now infamous Chicago parking meter disaster, there are still too many things in common, making this a danger to Downtown.

Whoever drafted the Indianapolis agreement used Chicago’s contract as a template — a contract notorious for being one-sided in favor of the vendor. So while the financial structure is different, most of the contract is word for word identical. That contract was set up for a deal that involved a $1.1 billion up front lump sum, where obviously the vendor needs strong protections. But in Indy’s case, the city is only getting a small amount of the deal upfront, so these are completely inappropriate.

Most critically, the deal will be almost impossible to terminate for 50 years — even if the city gives back the money. The vendor would have to default, such as by filing bankruptcy, which is not likely. If this deal is ever no longer in the public interest, there is no way out.

The contract also lists penalties if the city ever removes a meter, reduces rates, or even temporarily bags meters in almost all cases. Bagging fees can even be higher than if the meters were occupied 100 percent of the time — these have to be paid by the city even during road construction projects. If the city adds meters, raises rates or extends hours, the vendor automatically gets that upside while the change fees protect it from downsize risk. It’s heads the vendor wins, tails the public loses.

If the city builds a parking garage in Broad Ripple as planned, it is actually required to implement resident only permit parking, meaning anyone who drives to Broad Ripple will have to pay up. The list goes on.

Because the quantity, rates and locations of meters are all set in the contract, and the city has to pay hefty penalties to change them, the city has effectively frozen parking policy for 50 years. It cannot replace meters with electric car charging stations, or lower rates on Mass Ave if business starts to suffer, or implement any change at all that doesn’t make the vendor richer. Not without paying fees a broke city can’t afford.

Indianapolis has the best Downtown of any city its size in the country today because of 35 years of innovation, such as taking lanes away from cars and giving them to people as part of the world class Indy Cultural Trail. This deal puts future innovation at risk.

The city is selling a property right interest — a de facto 50-year ground lease — on its public streets, which is to say, in the most important component of the city’s public space.

This also appears to be a bad financial deal. Unlike the Indiana Toll Road, which had never earned a nickel in the 50 years the state owned it, parking meters are profitable today. With rates increasing, longer hours, contract penalties and efficiency gains from modern technology, it is easy to see this going up even higher for the vendor.

While the state took a money-losing Toll Road and converted it into $3.9 billion, the city is taking a profitable asset and giving away more than half the future value for a mere $45 million ($35 million in an upfront payment and $10 million for new parking meters).

This deal is really a high interest loan. The city is borrowing $45 million from the vendor and paying back hundreds of millions of dollars in interest over the next 50 years. This is the civic equivalent of taking out a 50-year payday loan.

The city’s plan for modernization, rate rationalization, and infrastructure improvements is sound. But I urge the city to cancel this contract and find another way such as revenue bonds to make it happen.

Meter Miscellany

The Star has another article on the parking meter lease today. A couple points are worth noting:

1. ACS is now saying it will create 200 jobs in Indianapolis. This is not in the lease contract anywhere, but in some side agreement. The meter lease contract, like most corporate deals, has a clause that says, “This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior agreements, negotiations, discussions and understandings, written or oral, between the Parties.” In short, if it’s not in the contract, it doesn’t count. The only reason – the only reason – to put a jobs pledge in a separate “letter of agreement” is to render it unenforceable. Even if it magically were, the jobs only have to be around for seven years – a far cry from the 50 they expect the people of Indianapolis to commit to – and the fine for not creating a job is less than the penalty the city would have to pay for removing just one meter. That’s right, those jobs are worth less than a parking meter each even in the unlikely event the agreement is enforceable. In short, this agreement is basically worthless and clearly just a gimmick to try to salvage a deal pretty much everyone recognizes is bad for the city.

Update: Paul Ogden further deconstructs the ACS-City agreement regarding the jobs.

2. ACS claims it will only earn a 10-15% return on its initial investment. Xerox’s cost of capital is higher than 10%. If they only earned 10%, the deal would represent an economic loss to Xerox’s shareholders, so I’m very skeptical of these figures. I find it interesting how eager ACS is to tell us up front how little they expect to make while simultaneously making it impossible to find out how much they actually will make. There’s no way ACS would have signed a deal at that low a return. It’s also worth noting that in Chicago, and now in Pittsburgh, where ACS participated in a true bidding procedure for selecting the vendor, they lost. They are only winning in places like Indianapolis where there was a no-bid RFQ process. This shows I believe that they are more protective of their profit margins than their spokesman might suggest.

Parking Meter Media Roundup

In roughly chronological order from newest to oldest.

Indy Star: Is meter lease a good deal for Indianapolis?
Aaron M. Renn: Proposed deal would be wrong move for the city – my op-ed on the Star’s site
Michael Huber: Plan would generate more revenue, efficiency
IBJ: City’s parking deal similar to much-maligned Chicago pact – subscription, but well worth picking up the hard copy to read
IBJ Editorial: City’s parking plan needs work
Indy Star Editorial: Take more time on meter verdict
Indy Star: Indianapolis parking lease draws heat
Amos Brown/Indianapolis Recorder: Ballard’s parking deal: payday loan from a bad check cashing store
David Hoppe/Nuvo: The parking meter gambit: raising rates or is it taxes?
Urbanophile: Indianapolis parking meters – the city’s response
IBJ: Downtown merchants want parking plan revoked
Urbanophile: Indy’s “Son of Chicago” Parking Meter Lease to Be a Disaster for City
IBJ: City vendor may get $1.2B from parking privatization deal
Urbanophile: Parking meters and the perils of privatization

My appearance on Amos Brown’s radio show is here. Huber and I debated the deal on Abdul’s radio show, but I don’t think it is online.

There is significant coverage in the Indy blogosphere too lengthy to list here, but check out Ogden on Politics, Indiana Barrister, Indianapolis Times, Had Enough Indy?, Sheila Kennedy, Indy Student and last but not least Advance Indiana. Indy has a great political blogosphere. These folks are opinionated to be sure, but also do a lot of original research and break stories.

Sunday, September 19th, 2010

Are Networks or Size More Important to Urban Success?

When we hear people discuss the cities that are adjusting well to the demands of the new economy, it is frequently the largest cities that are touted: New York, Chicago, London, etc. At a minimum, these places tend to be “of a certain size.”

Zachary Neal, a professor of sociology and global urban studies at Michigan State, has a new study out that disputes this. Entitled “From Central Places to Network Spaces,” it makes the argument that networks rather than size are the critical determinant of urban success in the current economy:

At the beginning of the twentieth century, many urban economies in the United States depended primarily on factors located within the city and its adjacent hinterland, thus situating cities in a size-based hierarchy like that described by central place theory. However, by the end of the twentieth century, technological innovations and economic restructuring led urban economies to depend more on factors located between cities, namely, the relationships among cities that permit the exchange of key resources and allow the development of interurban cooperation and economies of scale. This transition implies the emergence of a newer, more network-based hierarchy in which the dominant cities at the top of the hierarchy are those which serve as “basing points” for resources flowing through intercity networks.

Since, like most academic studies, this one is painful to read, you may prefer to check out an essay version Neal posted to New Geography.

The size based notion of an urban hierarchy was rooted in central place theory, where cities’ size, economic clout, and amenities depended on the size of their hinterlands. The author notes that this worldview may have had more accuracy in the early 20th century, when huge cities such as Detroit and Philadelphia, were among the nation’s most important.

But during the 20th century, size and hinterland decreased in importance and the networks that cities participated in became more important. Some cities such as Chicago and New York retained high rankings in both cities, but it was because they either had or developed the networks that were relevant to the 20th century. Cities like Detroit, Cleveland, and Pittsburgh – Neal’s examples – failed to develop these networks and so became what he dubbed “offline metropolises.”

Conversely, places that previously would not have ranked highly in the size based world, such as North Carolina’s Research Triangle or Bentonville, Arkansas, can, by developing networks, become important economic nodes.

It’s an interesting viewpoint, though I think the use of Bentonville points out a weakness. Bentonville owes its status almost entirely to Wal-Mart. If Wal-Mart departed tomorrow, no more Bentonville. Wal-Mart may have networks, but Bentonville is only borrowing them. The same might be true of any company town or even university town. The economic structure of these towns only changed to the extent that they got lucky with one major institution.

Jim Russell seizes on these findings to question the idea of the megaregion, which he sees as a relic of central place theory and industrial age thinking.

The Case for Size

While Neal pooh-pooh’s size, other researchers have pointed to its virtues. This 2007 article in SEED magazine discusses the work of Geoffrey West, Jim Brown, and Brian Enquist who did research into testing whether the effect of greater metabolic efficiency found in larger animals also applied to cities. Their conclusion was that it did:

After analyzing the statistics, the answer was clear: Cities are like elephants. They get more economical with size. It doesn’t matter whether the city is located in China, Europe, or the American Midwest; every city is simply a scaled version of the same city. In metropolis after metropolis, the indicators of urban “metabolism”—like the per-capita consumption of gasoline or the surface area of roads or the total length of electrical cables—scaled to an exponent of (population)0.8, which is very similar to the biological equivalent of (mass)0.75. This means that a city can double its population without doubling its resource consumption. “One of the basic principles of cities is that it’s more efficient to bring people together,” West says. “You need a little bit less of everything per person. It’s the exact same way in biology. As animals get bigger, they require less energy to support each unit of tissue.”

So while the authors do not predict success, they do indicate that there are efficiencies from scale – a conclusion opposite from some who have suggested large cities are in fact inefficient.

Other researchers have also found differences based on city size. Jim Russell pointed me at recently released research paper called “Spatial Sorting”:

In this paper we show that there is indeed evidence that disproportionately more skilled citizens locate in larger cities. However, we provide a key new insight: larger cities also disproportionately attract lower skilled agents. And it turns out that large cities like New York and Detroit in that respect are more similar to each other than to small cities.

The “fat tails” the authors find for larger cities show that they differ in another important way from smaller ones. Given the strong evidence linking college degree attainment and high skill labor to urban success, perhaps this explains more than networks the relative success of the places Neal discusses (e.g., Wal-Mart recruits lots of people with degrees to Bentonville).

My own take is that there are benefits to size in some cases. For example, a certain minimum scale is a prerequisite to being able to support certain activities. Want to have a major airport or a pro football team? Better be big enough to support them. This is one legacy of central place theory that hasn’t gone away. As size decreases, you progressively lose the ability to support more and more of the functions and amenities that the largest cities can simply by virtue of their market size and aggregate wealth. The internet (e.g., Amazon and iTunes) have reduced this somewhat, but not eliminated it entirely.

So it size generates economic efficiencies, attracts more talent, and enables you do potentially do more things, perhaps it does have utility. That’s not to say networks are unimportant. They are of critical importance. But size remains an important consideration as well.

What do you think?

Friday, September 17th, 2010

Replay: Spheres of Influence

The Common Census Project draws various maps of the United States based on votes received from participants. The idea is to create a grass roots, non-scientific view about how the people themselves identify their communities apart from arbitrary political boundaries.

The main map is based on an answer the following question: “On the level of North America as a whole, what major city do you feel has the most cultural and economic influence on your area overall?” From this, they created a map of various “spheres of influence” of cities. Here’s the latest. You can get a bigger version by clicking:

I think this is an interesting map. It shows pretty much what I would intuitively expect in most regards. You expect Chicago to have a giant sphere of influence because it is so big. Dittos for the Twin Cities and Detroit because large areas of their state to the north lack comparable major cities. What jumps out at me though is St. Louis. It has a comparatively huge region, more than I would have expected. History and geography certainly play a role here. This also illustrates the comparatively small spheres of influence of places like Cincinnati and Louisville, which are hemmed in by other similar sized cities on all sides.

Getting to smaller places, I see all sorts of curious results. In Indiana, Evansville has a pretty sizable solar system around it. South Bend doesn’t even show up – it’s part of Chicago. Ft. Wayne is particularly interesting. It has a sort of crescent around it, but a good chunk of the area – including what appears to be the city of Ft. Wayne itself, is in the Indianapolis sphere. Or another interesting thing. Look at who says “Minneapolis” vs. “Twin Cities”.

Another way to slice this is by what is known as “economic areas“. The Bureau of Economic Analysis (part of the US Dept. of Commerce), uses these to measure trade areas. As they put it, “BEA’s economic areas define the relevant regional markets surrounding metropolitan or micropolitan statistical areas. They consist of one or more economic nodes – metropolitan or micropolitan statistical areas that serve as regional centers of economic activity – and the surrounding counties that are economically related to the nodes.” I’ve always considered this the best general purpose measure of the sphere of influence of a city. Here’s a map. Again, click for a larger version.

Of course, this measures the geographic size of the area. But what about the population? Here are the ranked populations for the 12 major metros that I focus on in this blog, ranked by order. These numbers are based on 2007 estimates.
  1. Chicago – 10,443,446 (ranked 3rd nationally)
  2. Detroit – 6,997,479 (9th)
  3. Minneapolis-St. Paul – 5,187,305 (13th)
  4. Cleveland – 4,604,932 (15th)
  5. St. Louis – 3,366,542 (19th)
  6. Indianapolis – 3,330,982 (20th)
  7. Pittsburgh – 2,879,762 (24th)
  8. Columbus – 2,607,561 (29th)
  9. Kansas City – 2,580,711 (30th)
  10. Cincinnati – 2,351,587 (32nd)
  11. Milwaukee – 2,323,196 (33rd)
  12. Louisville – 1,537,997 (52nd)

Again, these are interesting figures. You can see that some places, say Chicago and Louisville, have EA populations not much larger than their MSA population. Others, like Cleveland and Indianapolis, have significantly larger EA populations and rank much higher in the league tables here than you are used to seeing. I think this explains why those cities can sometimes punch above their weight. For example, whatever the MSA populations might indicate, Cleveland is still economically the biggest city in Ohio. This would be true even if Dayton were added to the Cincinnati EA. (Curiously that it is not part of a Cincinnati-Dayton area today, but rather the southern anchor of a Dayton-Springfield-Greenville EA. Something primed for a change on the next revision, perhaps?)

Lastly, I’ll leave you with a fun map. Common Census also does maps of fan area dominance for sports teams. In honor of the start of football season, I’ll include the NFL map, though they have one for every major sport. Again, click through for a larger version.

This post originally ran on September 9, 2009. Please visit the Common Census Project for the latest versions of these maps.

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