Tuesday, May 7th, 2013

Worcester v. Providence: Is Downtown Revitalization the Sum of Urban Revitalization? by Stephen Eide

Worcester, MA and Providence, RI invite comparison for at least four reasons. They’re the same size (pop. ~180,000), they share the same history of deindustrialization and urban decline, they’re only 40 miles apart, and they’re different, which makes comparison stimulating and worthwhile. By most any fiscal or economic measure, Worcester outperforms Providence. But because of the so-called Renaissance, the revitalization of downtown Providence throughout the 1980s and 90s, Providence has attracted far more attention among urbanists and the national media than Worcester. There has never been a Worcester Renaissance.

So which city is the true urban success story? That depends on the extent to which one believes that downtown revitalization is the same as urban revitalization.

Renaissance

Providence is a destination city able to boast of its tourism, arts, culture and “18-hour day.” Rare for an old, cold, mid-sized former milltown, the New York Times travel section has done two features on Providence in the last five years. Providence played a starring role in an eponymous television show (NBC, 1999-2002) somewhat similar to the role that the revitalized New York City played in Sex and the City. This all would have been unimaginable in the 70s, at the peak of the deindustrialization era, but, throughout the 1980s and 90s, Providence underwent a renaissance. The most notable elements of the Providence Renaissance include uncovering and moving two rivers, relocating a railyard, the construction and rehabilitation of several major retail and commercial facilities, historic preservation, and WaterFire, a public festival that attracts thousands to the city on summer evenings. (For the full account of Providence’s revitalization, including a series of terrific “before and after” pictures, see Francis Leazes and Mark Motte’s 2004 book Providence, the Renaissance City.) No one could claim that the success has been total; both the local economy and city budget remain under strain. But there are many other former milltowns which would do anything (indeed, have done everything) to imitate Providence’s success.


Financing of Select Major Providence Renaissance Projects, 1980-2000
Project Completed Approximate cost Primary financing
Capital Center (Railroad and river relocation, Providence Station, highway interchange, and Waterplace Park) 1981-1987 $169 million Federal
Union Station (parcel 1) 1989 $80 million Mixed private-public
Convention Center/Westin/ garages 1994 $290 million State
Providence Place/garage 1999 $465 million Mixed private-public (land; sales tax rebates/abatements)
Courtyard by Marriott 2000 $16 million Private-public (abatements)
Source: Leazes and Motte, Providence: The Renaissance City


Like Worcester. Worcester’s efforts at downtown revitalization have been unrelenting, and not totally unsuccessful, which has enabled local boosters to believe, at any given moment during the last 30 years, that the Worcester Renaissance was at hand. The most notable project now underway is “City Square,” which involves the demolition of a dead mall in the center of downtown. This is an event of tremendous symbolic significance, as many locals attribute downtown Worcester’s decline to the construction of the mall in 1971. In place of the mall will emerge a new medical center, seven-story office building, and other projects still in the planning stages. City government is thrilled. But, if anything, City Square demonstrates the limits of the Worcester development model, which relies almost exclusively on local investment. The project began under the direction of a Boston developer, but stalled after the developer encountered financing difficulties in the wake of the 2008 financial crisis. To the rescue came a local insurance company and its public-spirited CEO. Predictably, local officials hailed the benefits of local ownership, but they all missed the point. Worcester is simply not wealthy enough to rely on local capital to bring back downtown. Had a Boston developer scored on a project in Worcester, it would have set a powerful precedent for others to follow. At this point, even if City Square succeeds, many outside developers will likely view the local CEO’s “white knight” intervention as at least partly philanthropic.

By contrast, throughout its renaissance years, Providence had access to a key source of outside investment: state and federal grants. This access was in turn due to the city’s enviable position as a “city state.”

The City State

Providence enjoys a statewide profile unlike that of any other American city. In addition to being the capital, it’s the only large (100,000+) city in the nation’s smallest state. Only three other cities in Rhode Island have over 50,000 residents. 17% of Rhode Island’s population lies within Providence’s borders. (Worcester composes less than 3% of Massachusetts’ population.) The Rhode Island statehouse overlooks downtown Providence. Throughout Rhode Island’s modern history, the vast majority of statewide officeholders were either from Providence, went to school there, and/or got their first break in Providence city government. Providence’s comeback would never have occurred were it not for the massive state and federal aid that backed the projects that formed the core of the Renaissance.

Worcester has always lacked statewide clout. Most of the Massachusetts public, even the most politically-engaged among them, cannot name one Worcester politician. True, that could be said of all Massachusetts cities, which dwell in the shadow of Boston, the state’s capital and commercial center. (Everyone in Massachusetts knows who Tom Menino is.) But even when measured against its peers, Worcester underperforms in state politics. Despite being the state’s second-largest city, the only statewide officeholders Worcester has produced since 1900 have been two lieutenant governors. No governors, no Senators, not even a state treasurer or auditor.

When the Joint Center for Urban Studies at MIT and Harvard issued a report on Worcester’s politics in 1960, it described Worcester as a large city with a small-town feel. Still true. Worcester is well-managed. The local government is competent and honest. There have been no noteworthy political scandals in recent times. But there’s no denying that the city has long suffered from a deficit of political talent, and that this has hindered revitalization.

Benchmarking Worcester and Providence

On the other hand, because it’s in Massachusetts, not Rhode Island, Worcester possesses and enormous economic advantage over Providence. Massachusetts’ economic record of late has been respectable. Rhode Island is the only New England state whose economy has not adapted to post-industrial times. It resembles Michigan or upstate New York more than Connecticut or Massachusetts.

Within Massachusetts itself, Worcester is no pace-setter, but a “Gateway Municipality,” a legal term designating a remedial class of cities that lag behind the rest of the state in measures of income and education. (Gateway municipalities are eligible for special economic development assistance.) But when Worcester’s economic advantages are combined with its superior record of fiscal management, it becomes very unclear why Providence, and not Worcester, should be considered the comeback city.


Table: Benchmarking Worcester and Providence
Worcester Providence
Peak monthly unemployment, 2008-present 10.5% 15.4%
Median monthly unemployment 2008-present 8.6% 13.1%
Median household income $45,846 $38,922
Zillow home value index $161,800 $131,100
Median total annual crimes, 2005-2010 (property and violent) 7,914 9,557
Median annual murders, 2005-2010 6 15
Credit rating (Moodys, S&P, Fitch’s) A1,A-,AA- Baa1,BBB,BBB
Pension system funding ratio 68% 32%
FY12 General fund balance + $25.5 million - $11.4 million
Considered Ch. 9 municipal bankruptcy recently? No Yes
Source: BLS, American Community Survey, Zillow, FBI, Providence and Worcester’s annual financial reports

Urban Revitalization and Downtown Revitalization

To what extent is urban revitalization downtown revitalization? Downtowns play an outsized role in shaping cities’ reputations to outsiders and natives alike. Regardless of how much of a city’s downtown is taxable private property, downtowns are best-understood as parks, public property. Downtown serves as the geographic equivalent of 4th of July and Memorial Day rituals. You can’t compel people to participate in these rituals and find them meaningful, but their complete absence would signal the complete absence of national pride. Similarly, cities whose downtowns languish usually lack civic pride.

Urbanists grasp the basic civic importance of a commonly-accepted physical center, but they sometimes oversell the economic benefits of downtown revitalization. There can be backlash. Downtown revitalization sometimes fuels downtown vs. neighborhood tension. Was it all for the tourists, or to satisfy some mayor’s “edifice complex”? Did residents benefit at all? Small businesses such as restaurants, boutiques and art galleries are crucial for downtown revitalization. But businesses that small (50 or fewer employees) with no ambition to grow will do little to strengthen the broader metro economy. The holy grail of urban economic development policy is an abundance of good jobs for workers of all levels of skill and education. Heavy manufacturing used to provide such jobs; boutiques and coffee shops do not. Nor, for that matter, do hotels and convention centers.

Maybe downtown revitalization has nothing to do with economic development. The standard justification for the use of taxpayer money to support private development in downtown is that these funds stimulate private investment. Officially, government is making a bet on taxpayers’ behalf, whose success may be judged through tangible fiscal and economic benefits such as a net increase in tax revenues, lower taxes for homeowners, and more jobs for area residents. But perhaps taxpayers are willing to spend this money because they are ashamed of the decrepit state of downtown, and they want it to come back. If downtown is a de facto public park, public expenditures on downtown revitalization may be justified simply for the sake of itself, even we are talking about tax breaks for Starbucks and luxury condo developers. It’s still a bet—all development is a bet—it’s just that the definition of success is different. Free market advocates denounce all forms of public subsidy for economic development, but the public should be allowed to speak for itself. To many citizens, sprucing up downtown is at least as justifiable as improving parks that they haven’t heard of and never visit.

But this argument that public money should be spent on downtown revitalization to boost civic pride would be easier to swallow were it not for the sneakiness of public subsidies for redevelopment. Most subsidies are tax expenditures, which are inherently less transparent than direct appropriations, even though the budgetary impact is the same. Communities want curb appeal, but seem unwilling to pay for it, or, more precisely, accept the fact that they are paying for it.

Conclusion

What do the people want? What’s possible? Everyone wants jobs, growth and good schools, but also a pleasant downtown. The second goal seems to be more realistic than the first set of goals. How many former industrial cities’ unemployment rates or SAT scores exceed statewide averages? Worcester may outperform Providence, but that’s not setting a very high standard. Perhaps the possible, not the ideal should define standards for urban success. If so, then the conventional wisdom is accurate, and Providence does deserve to be more closely studied and more highly regarded than Worcester.

Stephen Eide is a Senior Fellow at the Manhattan Institute and editor of the blog Publicsectorinc.org, where this article originally appeared.

7 Comments
Topics: Economic Development, Historic Preservation, Public Policy
Cities: Providence

7 Responses to “Worcester v. Providence: Is Downtown Revitalization the Sum of Urban Revitalization? by Stephen Eide”

  1. Alon Levy says:

    tl;dr notice: you’re wrong and you’re comparing apples to oranges.

    Specifics: Rhode Island is just like Michigan except that Michigan is a net federal tax recipient state and Rhode Island is the biggest net donor state in New England despite being still poorer than Connecticut, Massachusetts, and New Hampshire. Rhode Island has more jobs than it did in 2000, and at the peak of the last business cycle, in 2007, it had 6.5% more jobs than in 2000. Michigan’s number of jobs peaked in 2000 and is now 8% below that level. Rhode Island’s employment-to-population ratio increased between 2000 and 2007, Michigan’s fell.

    Crime rates in Providence are actually lower than in comparable secondary New England cities: New Haven, Hartford, Springfield. Worcester isn’t exactly comparable because the city includes more suburbs, whereas Providence concentrates most of the poverty in the region. Worcester proper has more people than Providence proper while the NECTA has only half as many people.

    If you look at metro areas instead, Providence looks much better. In real terms, the Providence MSA’s per capita income has grown 13% since 2000, and Rhode Island’s (excluding Bristol County, MA, which includes some very stagnant cities) has grown nearly 17%, vs. 5.6% for Worcester County. New Haven (8.9%), Hartford (8.8%), and Springfield (9.8%) all fell in between. The national average was 4.9%. For all the supposed good management of Worcester, it’s the only of the post-industrial secondary New England metro areas not to grow its income significantly faster than the national average. For all the supposed mismanagement of Rhode Island, it started the decade 3% poorer than the US average and is now 5% richer.

  2. George Mattei says:

    Several very interesting points here, the biggest of which may have been hinted at but not declared outright-the role of the metro area vs. municipalities and states as the core economic unit. The article clearly indicates that Providence gained from being the major city in a small state and the focus of the Statehouse which calls it home. It can be said that Providence is about the only city which has a state boundary roughly equivalent to its metro area, and therefore is a sort of experiment in regional governance.

    From the author’s take, it appears that having a regional governance structure might seem advantageous.

  3. George Mattei says:

    Although, you may also argue that it made Providence worse off. The fact that it seems to be underperforming other metros (at least per the author) may indicate a myopic view of the Metro Area that accentuates the good and de-emphasizes the bad. I guess you could look at it either way.

  4. Peter Brassard says:

    Worcester (city): 181,045 pop.
    37.6 sq mi
    density: 4,678/sq mi
    Worcester NECTA: 577,537
    Worcester MSA: 798,552

    Providence (city): 178,042 pop.
    18.5 sq mi
    density: 9,950/sq mi
    Providence NECTA: 1,301,595
    Providence MSA: 1,600,856

    A metropolitan area or MSA is the primary unit of economic activity and wealth generation worldwide. An individual city within a metro area or a state are secondary. Comparing Worcester (city) to Providence (city) in isolation gives a distorted impression.

  5. John Morris says:

    Glad someone pointed out that the Providence MSA is just a lot bigger than Worcester’s. Comparisons are still worthwhile, but one should keep this in mind.

  6. Peter Brassard says:

    No doubt that many of the authors Benchmarks for Worcester (city) and Providence (city) are likely true. However, it’s easy to cherry pick negatives or positives, if that’s what you’re interested in finding.

    Besides the Worcester MSA being slightly less than half the size of the Providence MSA, as an example, if MSAs are compared instead of cities for the home value index, a completely different picture is revealed.

    From http://www.zillow.com/local-info for 2013 home index value
    Providence MSA – $210,000
    Hartford MSA – $208,100
    Worcester MSA – $200,700
    New Haven MSA – $197,100
    Springfield MSA – $183,500

    Regarding the financing of Select Major Providence Renaissance Projects, the $169-million in federal funding for the relocation of the Railroad/Rivers/Highway Interchange was earmarked money from the 1960s to construct the Rhode Island segment of Interstate 84, which was originally planned to link Hartford and Providence.

  7. Peaton says:

    Interesting article and interesting rejoinders.

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