Sunday, June 5th, 2011
[ The New York Times ran an article recently discussing the trend of big city law firms hiring non-partner track attorneys in smaller cities to handle routine work at lower cost. It reminded me of this post where I floated a similar idea back in 2009. I hope you enjoy - Aaron. ]
In my kickoff of the year of celebrating the 100th anniversary of the Burnham Plan in Chicago, I argued that while Chicago was performing well in a globalized world, it was only riding the wave of globalization and wasn’t defining its own uniquely successful future, one where it first and most fully grasped the implications of our new world. I also promised ideas on where to look to do that, starting with re-embracing its own unique culture and identity, resisting homogenization.
Today I start a four part mini-series looking at another opportunity area. It’s been widely noted that globalization has worked to separate global cities from their traditional city-regions. Indeed, Chicago and others have almost deliberately turned their back on their past in this manner to focus exclusively on the global conversation. With most global cities doing that, the question immediately comes to mind: is there overlooked opportunity in the hinterland? I argue that there might be, and I’ll look at two specific items: metropolitan linkages and on shore outsourcing. Each of these will have a main article with a follow-on more fully discussing a particular aspect. Today, we talk about metropolitan linkages.
There have been many calls for greater cross-regional (or “mega-regional” or “pan-Midwest”) cooperation. The idea is that similar challenges beset the Midwest as a whole and they are best solved collectively. There’s a certain surface appeal to this, but I’ve been reluctant to accept it before. The basis of my argument is in my previous posting “Mega-Skepticism“. My problem is fundamentally that people don’t explain what it is we are actually supposed to do to implement cross-regional collaboration, and there are few tangible benefits offered for it. Consider: we’re told to build a Midwest high speed rail network. Ok, but so what? I built it. What does it do for me? What does this allow Minneapolis and Chicago to do today, for example, that hourly shuttle flights on multiple airlines don’t? What’s going to be different once it’s built? This is the great unanswered question. We must be able to articulate the value levers we want to pull (for example, scale economics, specialization, or purchasing power) and why and how places will take advantage of them.
Having the Midwest try to work as a whole is a “boil the ocean” type solution. I’m not convinced rural areas, small towns, small manufacturing cities, and larger cities intuitively have enough common ground to try to create fully common solutions. Even among just the Midwest’s large cities, there is incredible diversity. Again, how much in common do Chicago, Detroit, and Columbus have? And to do so so would require enormous trust and consensus building.
So what I’m going to suggest today is that we narrow our focus to specific city pairs, and see if we can articulate a basis for cross-regional cooperation. For my example, I’m going to use Chicago-Milwaukee and Chicago-Indianapolis. Why? Several reasons:
- They are all cities that have the minimum scale to have economies that can operate effectively in the globalized world. Indeed, Chicago is a successful global city, Indianapolis is by many measures the most successful city in the Midwest, and Milwaukee is hanging in there. This isn’t a “dinosaurs mating” type situation where a bunch of failing cities try to band together. Rather, it is looking at reasonably successful places. Can they enhance their success even further through cooperation?
- Chicago is the logical place to start because it was historically the dominant city of the Midwest. To envision a highly successful cross-regional collaboration that does not somehow involve Chicago is hard to do. Also, because Chicago is such a unique place in the Midwest, smaller cities like Indy and Milwaukee don’t have to feel bad about playing second fiddle in some respects. Those places know they aren’t Chicago. Whereas trying to get the “3C’s” in Ohio to agree on things would be much tougher. I use the term “hinterland” in the title deliberately, despite its pejorative connotations. That’s because I think there may be opportunities to re-create a true urban hierarchy in some ways.
- These cities are highly complementary, especially Chicago and Indy. That is, each is strong where the other is weak. This means they are not natural competitors and there is reason to believe that specialization and the division of labor – one of the key advantages of scale – can work. By contrast, Indianapolis and Columbus are nearly identical cities. Specialization is harder for them to do, so there would have to be another basis for cooperation to have benefits.
- Their common culture eases the path of cooperation. America 2050 has an interesting framework for relationships that create mega-regional linkages. Their relationships include environmental systems and topography, infrastructure systems, economic linkages, settlement patterns and land use, and shared culture and history. It is easy to see how these apply here.
- They are geographically close, which would seem to simply matters. I include both Indy and Milwaukee because in fact Milwaukee is so close that it is possibly experiencing the “sixth borough effect” we’ve see in NYC and Philly, where Chicago’s massive growth is just taking Milwaukee into its orbit. Indy provides a control study for that to make sure we are dealing truly cross-regionally
Considering these cities, we now have to ask ourselves the question: how do they cooperate? The globalized economy seems to have two sorts of operations: one tends towards “flattening”, where routinized operations like manufacturing or answering phone calls can be done anywhere in the world. The other is towards “spikeyness” and valuing the face-to-face interactions of highly creative people in the cores of places like Chicago. Is there an model somewhere between them that we can imagine?
Richard Florida just issued a call in this month’s Atlantic Monthly to build “rail connectivity within the mega-regions. There are the fast trains along the Boston/New York/Washington corridor that have allowed Washington, in effect, to become a commuter suburb of greater New York. But how about a place like Detroit? If Detroit were better connected to Chicago, one could imagine Detroit having a better reason for existing. Or Pittsburgh. If Pittsburgh were better connected to Chicago or even to Washington, D.C.—it’s only a four-hour drive—that could spur growth.” I won’t use his example cities, but will assume in our example that we’ve got high speed rail between Chicago and Milwaukee and Chicago and Indy that provides a terminal to terminal journey time of 90 minutes. In the case of Milwaukee, this is actually already true – future rail upgrades will only shave that time down even further.
What could we imagine the benefits of this being? I see two: a labor force play and a division of labor play.
The labor force argument goes something like this. You’ve got these highly creative jobs in Chicago. But not everybody is a trader at the Merc making megabucks. There’s a lot of joe average type white collar jobs too. Many of these pay solidly, but the quality of life you can purchase for the money in Chicago might not be the greatest. Chicago may not have high taxes and housing prices compared to the coasts, but its does compared to the Midwest. Some people crave urban excitement, shopping at Neimans, the opera, etc., but a huge number just go home to the suburbs. I’ve long argued that if you don’t take advantage of the things that only Chicago gives you, and are just trying to live an average suburban lifestyle, that’s crazy. Why pay the premium to live in a Chicago suburb in terms of housing, taxes, and above all congestion when you aren’t getting much more than you’d get elsewhere? Obviously lots of people are asking themselves that question, because Chicago’s metro area had net domestic outmigration to the tune of 57,000 people last year – a pace of almost 600,000 per decade. Of those, a net 7,000 moved to Indianapolis in just the last few years. Now I don’t know the makeup of this. Some of it may be second order Latino immigration or something. But I’ve got to believe some of it is Chicago’s precious talent bleeding away because they cost/benefit isn’t worth it to them.
Now consider what a 90 minute train ride does to the equation. If you are a suburb dweller who loves that lifestyle, you can now move to someplace like Carmel, Indiana outside Indianapolis. You cut your living costs dramatically and increase your quality of life. Plus, you can realistically commute to Chicago, at least 2-3 days a week. That’s a PITA in a car @ three unproductive hours, but when you can work on the train for 90 minutes with wi-fi, it’s a different story, even with collection/distribution tacked on at each end. Combine this with modern flexible work arrangements and you’ve got the makings of an extended labor pool. It could be a win-win-win. Chicago gets the access to talent it would otherwise lose. The worker is happy with access to both great job opportunities and higher quality of life. And Indy get the imported income and improved connectivity to the global economy via Chicago. I already know several people who routinely make the trip up and down I-65 in car or fly every single week. It is easy to imagine this exploding with 90 minute train service with wi-fi and electric power outlets. This both makes the time productive and makes it feasible to do daily commuting, skipping the hotels, nights away from home and other assorted costs.
A similar effect could happen with Milwaukee. Indeed, I already see people commuting down from Milwaukee. But I imagine a separate demographic. To me, Milwaukee is a bit of a “mini-me” Chicago. So what you get are people who want the more urban lakefront experience, but can’t afford or don’t want to pay for Chicago. You are already seeing this happen a bit I think. Same dynamics apply.
The other direction, think about what it does for Indy and Milwaukee in terms of ability to attract their labor force. Both cities have dramatically upgraded their offerings from the day when you couldn’t get a good meal or a decent cup of coffee. Both of them now have a nearly full spectrum of urban amenities. But what they are missing is that creme-de-la-creme. They don’t have elite international opera or true high end shopping. But by putting Chicago within easier daytrip reach via train (imaging sipping champagne on the trip back from your Oak St. spree), Chicago’s amenities become more accessible to people in those other cities. This helps them in recruiting people as well. Oh, and those Chicago workers can now work “domestically” if there is an option. Increasing the labor supply even further. And, people who come to work locally might be more willing to do so knowing that commuting to Chicago (again, only part time using flexible working arrangements as is becoming more common) means they aren’t captive to the “only game in town” for employment prospects in a smaller market like Indy or Milwaukee.
I don’t know if this will really work out or not, but it seems surface plausible – if you had the rail connections at true high speed service levels and the right amenities and price point. This might not involve huge numbers, but it might not take a huge number to move the needle if it is the right kind of people with the right skill sets.
The second point involves re-establishing the regional division of labor. As Chicago becomes more specialized, and its urban core more successful, that will push costs up in that city, making creative but lesser value-added functions less competitive. Is there an opportunity to offload some of that to an Indy or Milwaukee where the highest functions are done in Chicago but lower value added – but still high knowledge worker content, creative type work – is done in those other cities?
Again, as I said in my original posting, I can’t promise The Answer, only an exploration of the problem space. I want to use one sample industry to consider this: law. One, it is harder to offshore legal work I think. Even my own employer won’t let routine work be passed on by someone who isn’t domestic. Two, I was intrigued by something I noticed something the other week when I saw Tristan und Isolde at the Lyric Opera. I opened up the program guide and what did I see but a full page ad for Barnes and Thornburg. This is one of the largest law firms in Indianapolis, yet they have a full page ad in Chicago. I’m told they have a rather large office in Chicago too. What is the reason for this? It could just be expanding where the action is. On the other hand, is there a basis for cooperation between law firms where a large international Chicago firm is the lead firm handling the orchestration and most complex portions of the work there while sending some work to lower cost firms in Indy and Milwaukee, using those firms’ Chicago points of presence and the capability for easy face-to-face meetings to make it happen?
I don’t know a lot about the law business, but I do know that they are under enormous price pressure and even many very successful firms are doing layoffs. I expect a major transition where old school type relationships don’t necessarily translate into premium pricing opportunities anymore when there is lower cost competition for what is effectively commodity work in many cases. I’ve seen this in other industries and it seems reasonable that is could happen in law. Could this ability to tap a “near shore” pool of lower cost lawyers give Chicago firms an advantage? It might be the only elite city in the country where you can get access to a far lower cost point just by going beyond the immediate metro area.
I’ll admit, I’m speculating here, but it is the general concept that is important. It goes something like this. The most specialized components are in Chicago where it justifies the cost of being in the Loop. Specialized but less value added work that nevertheless requires close coordination, time-zone commonality, and potentially significant face to face meetings are in Milwaukee or Indy. I don’t know for sure what, if anything might be out there that fits this. Maybe law, maybe something else, or maybe nothing. But those to me seems the characteristics of the types of work that would lead to cross-regional collaboration.
If you are able to make these two cross-regional items work with Chicago, Indy, and Milwaukee, then you can look to see if they scale up or extend across distances.
So the question is, how do you go about making these sorts of relationships happen? Good question again. I don’t have the answers. But perhaps this is where the “holding conferences” aspect of mega-regionalism comes in. That is, you get business, academic, community, and political leaders talking to each other, establishing trust, and seeing what collaborations might form. This also brings up another good point as to how to implement it. Chicago has long been the magnet for young, ambitious people from the greater Midwest. Look at all the Big Ten sports bars in Chicago for an example of that. So can you mobilze those expatriate or diaspora communities to form the “glue of the relationship”? I noted before the concept of the “urban alumni association“. Something like this could be leveraged to help forge those business and cultural relationships. In fact, there is already an organization called the Indiana Society of Chicago. I believe this is mostly a networking club. Could organizations like this, plus Big Ten alumni associations, be used as a catalyst to make things happen?
I think this is an area that warrants further research and discussion. The general idea is to figure out how to give Chicago’s companies competitive advantage through an expanded labor pool and potentially lower cost operations that don’t involve the messy coordination of a far flung network. At the same time, it provides mutually beneficial returns to smaller cities in the region.
This post originally appeared on February 11, 2009.
Tuesday, May 24th, 2011
America has never been a very curious nation. Sure, we’ve produced great inventors and entrepreneurs, but you could probably count the great “American philosophers” on one hand (at least one of whom, de Tocqueville, wasn’t even American). Americans are not prone to world travel, evidenced by the fact that only 37% of us own a passport. A lack of curiosity is not the sole blame, obviously it costs us far more to travel abroad than it does for Europeans, with flights so cheap they make Southwest look like a legacy carrier. But in the wake of the 9/11 security changes, lack of a passport means 2/3 of Americans aren’t even flying to Canada, Mexico or the Caribbean, destinations which are often cheaper than, say, Florida.
I have long posited that we are victims of our own geography. The vastness and relative emptiness of the North American continent gave the young nation room to grow and flourish, while leaving it free from foreign influence. Immigrants were generally eager to assimilate, as the threat of repeated bodily harm at the hands of nativists would entice you to try and blend in. Europe consisted mainly of poor, oppressive backwaters in those days, so most didn’t see much point in holding onto the old ways in a land that gave them an opportunity to reinvent their identities.
Last month, I attended the Global Metro Summit here in Chicago. One of the panelists, Barcelona Deputy Mayor Jordi William Carnes, made the observation that “America is important to the rest of world, but spends too much time looking inward”. I would agree, but even within the United States, infighting and provincialism rule the day. As Richard Longworth has written extensively, the states compete against one another for finite resources, whether in the form of federal transportation dollars, or in wooing corporations to set up shop. This is a losing battle, since state borders are completely arbitrary lines which have no real effect on the life of metro areas, other than to unnecessarily complicate things. Eight of the twenty-five largest metros in the US span state lines that were established two centuries ago. In effect, we govern ourselves under a system that was designed for the 1820s.
This provincial attitude reared its tiny head again this past week, when Wisconsin Governor Scott K. Walker (that “K” is crucial to avoid denigrating the proper Scott Walker) slammed Illinois for it’s tax hike and invited businesses to relocate to his state. As James Warren wrote, this shows a lack of a broader vision on Walker’s part. He’s playing for votes within his own little fiefdom, seemingly oblivious to the fact that if Chicago’s economy were to fail, Wisconsin’s would go down right beside it. As much as I love our neighbors to the north, Milwaukee does not have the transportation infrastructure necessary to link it to a global marketplace. This is the same guy, mind you, who basically ran for office on his opposition to high-speed rail, which would be one of the best possible assets in building a regional economy.
So allow me to state for the record my philosophy of how the future is aligned: neighborhood – city – region – planet. Note that “county”, “state” and “nation” do not exist. These are eighteenth-century constructs that serve little useful purpose in a connected, digital global economy. The hard question is asking what it will take to achieve this in these “United” States. No politician has ever voted themselves out of a job, and yet a thorough realignment of local and federal governance is necessary. Industrialized Europe had to be more or less leveled in World War II for the stakeholders to recognize the value of cross-border cooperation and a free exchange of people and ideas. I certainly hope we don’t need such a serious jolt.
Wisconsin and Illinois, despite their football-based loathing, have too many issues which demand cooperation. And you can add Michigan, Ohio, Minnesota, Pennsylvania, New York and Ontario to that mix, as well. In coming decades, stewardship of the Great Lakes will become crucial to the region and to the world. Transportation linkages already radiate from Chicago like an octopus, in a common region with common concerns, these absolutely must be brought up to speed with the rest of the developed world. There is really no other option.
This post originally appeared in The Planner’s Dream Gone Wrong on January 17, 2011. Reprinted with permission of the author.
Tuesday, April 26th, 2011
[ I'm delighted to provide a sample of what you'll find over at Milwaukee's premier urbanist site: Urban Milwaukee. It is of course very Milwaukee-centric, but this piece has a lot of interesting ideas with potentially broader applicability - Aaron. ]
If you want to ride Amtrak’s Hiwatha Service line between Milwaukee and Chicago, the cost is $22 per ticket. If you buy your ticket in advance, the cost is $22 per ticket. If you ride on the weekend, the cost is $22 per ticket. If you want to ride in the middle of the day, you guessed it, $22 per ticket. With Interstate 94 under construction between the state line and Milwaukee for the next few years, new equipment on the way from Talgo, a new Milwaukee Intermodal Station train shed coming, and a route extension to Madison under construction, it’s time for Amtrak, iDot, and WisDOT to explore new pricing models for the state-sponsored rail service to encourage more riders and raise more revenue.
Amtrak, to their credit, does offer discounts for children (ages 2-15) who ride for $11 each with the purchase of an adult ticket (up to two discounted tickets per adult ticket). They also frequent rider discounts, in the form of a ten-ride ticket for $165 (that expires in 60 days) and an unlimited route ridership pass for a calendar month for $358. Those options leave a lot to be desired though.
Before I propose my list of pricing suggestions, it’s worth noting that the 2010 Amtrak Fiscal Year (October 1st, 2009 – September 30th, 2010) resulted in record ridership and record ticket revenue for the Hiawatha Service (and Amtrak as a whole). The Milwaukee to Chicago route had 783,060 trips and generated $14,092,802 in ticket revenue, for an average of $18.00 per ride. More valuable than the average revenue per ride would be to know both how many riders paid full price (and at what time of the day and day of the week), but unfortunately Amtrak doesn’t release that data. For the sake of this article, we’ll use my informal observations from riding and the data we have available to assume that a very high percentage of unique, adult riders pay full fare.
The pricing suggestions I propose are aimed at increasing ridership and marginal revenue simultaneously, while not requiring any service changes. They might have the added positive externalities of reducing congestion, reducing pollution from automobiles, improving the reputation of Amtrak, and encouraging travel and business between Milwaukee and Chicago, but if any of those things happen it’s merely a bonus.
Megabus Model - Megabus is famous for their $1 tickets, despite the fact that rarely anyone actually gets to buy one. The service is sold on a yield management pricing model, where the first one or two tickets are $1 with prices increasing incrementally from there. Amtrak could offer the Megabus pricing model not on all trips, but on the lowest ridership ones. This is likely to be especially valuable given that Megabus has drastically scaled back service out of Milwaukee.
Badger Bus Model – Badger Bus, the bus company that currently offers inter-city bus service between Madison and Milwaukee, has a pricing model for frequent riders that allows the company to collect interest off future ticket purchases. Amtrak currently offers a 10-ride ticket for $165, but it expires within 60 days. Using the Badger Bus model, Amtrak would allow customers to give the customers a large sum of money up-front in exchange for a discount whenever those funds are used to buy a ticket. In the case of Badger Bus, a $125 deposit gets you $175 in purchasing power (29% discount). The benefit maxes out at a $325 deposit ($485 purchasing power, 33% discount). If Amtrak were to offer something similar, they could be collecting interest on my money just like Badger Bus is (the last time I put $125 with Badger Bus it took me two years to use it all). An added revenue bonus is available with the model in the form of permanently unused funds, similar to gift cards that go unused. Amtrak would need to analyze exactly what deposit amount to collect, and how big of a discount to give.
Hessenticket Model – Germany has an innovative weekend pricing model available with their national rail system. The state of Hesse (home to Frankfurt) offers a weekend pass for 29 euros, where you and up to four others can ride the system’s non-high-speed all day on either Saturday or Sunday, anywhere you wish to go, getting on and off as you please. Their is a national pass with similar rules available for 33 euros as well. Implementing the idea between Milwaukee and Chicago might not work quite as well, but with future service extending to Madison it might make more sense. It seems reasonable to assume Amtrak could offer up a four-rider, $50 weekend day-pass with the requirement that the riders sit together (to prevent abuse).
Off-Hours Pricing – The current system prices every single-ride ticket equally, regardless of the time of day or day of the week. It’s worth exploring the idea of pricing lower ridership trips at a cheaper fare.
Wisconsin Vouchers – Scott Walker has managed to make an Amtrak service extension as political as possible (see: NoTrain.com). The victor on November 2nd would be wise to explore sending a non-transferable voucher to every taxpayer when the new Talgo equipment is put into service, giving them one free one-way ticket on the Hiawatha. It would be great for Illinois to do the same (tourism dollars on top of increased revenue). It’s hard to find someone who has ridden the service, but dislikes the quality of the ride. It is, however, easy to find someone who thinks the service is a “boondoggle” and has never ridden. The vouchers would serve as a new-customer acquisition strategy, generating a lot of new customers who would effectively be getting a half-off first trip. The long-term value of those new customers could be enormous. As an added bonus, angry Journal Sentinel commenters no longer can argue they get nothing in return for the state sponsorship of the rail line.
Corporate Pass – What if businesses got a discount when they purchased tickets? Could the company car be replaced (or the least supported) by the company rail pass? A program where the more tickets a business buys annually results in a greater and greater discount could increase revenue.
Advance Purchase Discount – Hotels often offer a price discount for booking your room early, Amtrak should do the same. Even if it’s only a 5% discount, or the ticket has to be bought at least 6 months in advance, Hiawatha ridership might increase (and Amtrak might collect interest) if customers book their tickets early.
Buy-One, Get-One – As one boards the Hiawatha they notice that the greatest unused inventory isn’t two empty seats together, but the empty seat next to a rider. To make better use of the marginal inventory, Amtrak should offer some form of buy-one, get-one free (or half off) for riders that sit together.
What are your ideas for Hiawatha Service pricing?
This post originally appeared in Urban Milwaukee on October 25, 2010. Reprinted with Permission.
Tuesday, July 27th, 2010
Recently, two other fine Midwestern cities, St. Louis, MO, and Milwaukee, WI, launched tourism campaigns aimed at attracting Chicago visitors. Raging urbanist that I am, I love spending time in nearby metropoli, and have a particular fondness for our sister city to the north. It’s the Windy City’s smaller, quieter, less-flashy Lake Michigan alternative–and that’s why Milwaukee’s current tourism campaign has me wondering whether the city’s overselling itself in a potentially damaging way.
This summer, the Brew City’s ads are posted on Chicago ‘L’ trains and buses with powerful headlines claiming things like, “If I had a week, I’d spend it in Milwaukee.” Follow up those ads with a browse of the VisitMilwaukee website and you get more hubris-induced marketing messages claiming the city sits “At the Intersection of Water and Fun“–not to mention celebration, success, and value, too.
Considering that most Chicagoans have likely been to Milwaukee before–and, not for nothing, live in Chicago, already–you have to wonder why Milwaukee’s tourism board would think the ads would be effective here. I mean, I enjoy Bayview restaurants, the Art Museum, and the Domes as much as the next Windy Citizen. Send me to State Fair or Summerfest for a weekend and I’m all set.
But a week? Really? I have never met a Chicagoan willing to spend a week of valuable vacation time in Milwaukee and I probably never will. When we have that much time to get away, we tend to head for O’Hare and Midway airports to really get away–usually from the Midwest entirely, much less from just the Lake Michigan shoreline.
And call me a stuck-up Chicagoan, but those “At the Intersection of Water and…” tourism messages sure sound a lot like Chicago, to me. (Well, except maybe “value.”) Reading them on the VisitMilwaukee website, I couldn’t help thinking how generic and misplaced they were.
VisitMilwaukee sure doesn’t sound like it knows who Milwaukee is, what its values are, or where it wants to be. You can’t tell potential visitors–especially potential visitors from a world city like Chicago–that your town’s worth a week of their time, and then support your grandiose claim with a series of generic marketing messages that could have just as easily been written about any other Great Lakes city. If there’s anything unique or special communicated about Milwaukee in these tourism ads, I don’t see it. And as a result, even as someone who likes the place, they don’t particularly make we want to visit it.
I am dying to visit St. Louis, however. Unlike Milwaukee, I’ve never been there, but I’ve been curious about the city since moving to Chicago in 2003. I always say I want to visit, I just never seem to get around to it. Imagine my surprise to discover that hiding behind the KidnappedChicagoan ads festooning CTA transit vehicles (and at least at the moment, positively peppering the Adams/Wabash ‘L’ station) was a cleverly covert tourism campaign for St. Louis.
You don’t know that when you see the ads. They don’t tell you anything except that an average Chicagoan has been stolen away to an interesting place–that it’s not far away, he’s not angry at being kidnapped there, and you’d want to be him if only you could figure out where he’s been taken. Holy Interactive Interest Raiser, Batman!
Every time I saw these ads I thought, “Dammit, I keep meaning to go to that website!” When I finally did, I was greeted by a curiously familiar map with clickable push pins, and an invitation to click through to try and figure out my kidnapped compatriot’s current location. Mousing over each push-pin opened a photo and capsule summary about an interesting tourist destination–a museum, or historic site. Or an arch, for that matter.
I chuckled when I saw the message that sat below the map:
“Okay, so you’ve figured out which city—St. Louis. Der. But admit it. You were a little surprised by all the stuff there is to do in the Gateway City.”
You know what? I was. And without the help of an overblown, generically empty ad campaign, either. Unlike Milwaukee’s currently hard-to-believe tourism claims, the soft-shoed Explore St. Louis approach sends potential visitors on an Internet adventure to learn the city’s glories for themselves. Did I mention the Foursquare badges for checking in at locations he’s visited? (Earlier this week I sang the praises of Chicago’s own Foursquare-based tourism campaign.)
By mischievously whetting their whistle for adventure and then letting them learn about the city from their own task-oriented click-throughs, Explore St. Louis’s Kidnapped Chicagoan campaign gets potential visitors to arrive at the conclusion that the city is an interesting place on their own. (While I’m at it, feel free to check out the ongoing CityToRiver campaign to rebuild the urban fabric of the St. Louis waterfront.)
And in my book, letting the wonders of your city speak for themselves beats unstrategically overselling it any day.
Mike Doyle is a communications strategist and scribe of the CHICAGO CARLESS blog. A native of New York, he fell in love with Chicago and moved there for life in 2003. But he still has no plans to learn to drive a car.
This post originally appeared in CHICAGO CARLESS. Reprinted with permission of the author.
Tuesday, June 29th, 2010
[ Here's another installment in my series of city profiles, in which a blogger in a city I don't write much about showcases their town and blog for you. Today's entry is about Milwaukee, and comes to us from Dave Reid of UrbanMilwaukee - Aaron. ]
“A Great Place on a Great Lake.” That’s how Milwaukee’s catch line used to read, and its actually more true today than it has been for a long time in Milwaukee. Like any city, Milwaukee has its share of problems, pockets of crime, including too much poverty, struggling schools, and unfortunately segregation. And like all former “rust belt” cities, it has seen decades of de-industrialization decimate its inner city. But Milwaukee is seeing signs of life, and it is evolving into New Milwaukee. This evolution leans on Milwaukee’s natural resources, its neighborhoods, and has been driven by urban, environmental, and historical movements within the city.
Milwaukee’s lakefront, its greatest natural resource, is a gem that is utilized by all residents, and unlike other cities its lakefront is in a large part free of significant commercial development. Literally, acre after acre of parkland lays out a beautiful front door to the city. In 2001 the Milwaukee Art Museum opened the iconic Quadracci Pavilion, designed by starchitect Santiago Calatrava.
The Calatrava wing at the Milwaukee Art Museum
The MAM, as it is often referred to, has become the iconic symbol of new Milwaukee, and has been regularly featured in TV commercials from Porsche to Lipitor opening up the world to new Milwaukee. The lakefront is also home to Summerfest, the world’s largest music festival, which energizes the entire region during the ten day festival. Recently, efforts to recognize and capture the value of the water in Lake Michigan have bubbled up as a potential new direction for Milwaukee’s brand and economy. Milwaukee’s place on Lake Michigan has always been a resource for residents, but now may play a role in Milwaukee’s future direction.
High rise on Milwaukee’s East Side
Along the lakefront lie many of Milwaukee’s most popular, and vibrant neighborhoods. Just northeast of downtown, the East Side has long been a center of culture and entertainment. It is the home of the University of Wisconsin-Milwaukee, multiple nightlife districts, condominiums, single-family housing, and affordable apartments. It truly is a mix of wealth and youth. East of downtown, East Town, saw multiple high-end lakefront condominium developments built in recent years, and has a high density of residents through apartment and condominiums. It is also home to the Milwaukee School of Engineering, is one of the most walkable parts of the city, and has a vibrant upscale nightlife scene. Southeast of downtown, the Third Ward, despite being cut off from the lakefront by I-794 and the Summerfest grounds, has transformed itself from a warehouse district that had seen years of decline into Milwaukee’s high-end shopping, nightlife, and entertainment destination.
Renovated warehouses in the Third Ward
Numerous warehouses were redeveloped into condominiums and apartments, and multiple mixed-use buildings were added to the district. Despite the recession, the Third Ward is one of the few areas that still has on-going construction of new housing. This neighborhood is home to the Milwaukee Institute of Art & Design, which has played an important role in the area’s rich gallery and art-related boutiques.
This is just a small sampling of Milwaukee’s near-downtown neighborhoods. There are numerous great neighborhoods all across Milwaukee, from Bay View to Riverwest and Sherman Park to Silver City that each bring an uniqueness to Milwaukee. Beyond Milwaukee’s great neighborhoods, a slow but steady movement has pushed Milwaukee forward over the past twenty years.
New Urbanism, or more aptly the back to the city movement, got rolling in Milwaukee under former Mayor Norquist’s leadership, and has played a significant role in downtown Milwaukee’s rebirth. Milwaukee was able to remove an aging freeway spur, the Park East Freeway, that served few, and blighted all of downtown. The removal of the Park East, which was controversial at the time and remains a point of contention today, was supposed to spark redevelopment of the vacant land, and although it has been slow to develop projects such as the Aloft Hotel, the North End Phase I, and The FlatIron condominiums have been built in the redevelopment corridor.
Additionally, Mayor Norquist pushed forward the downtown Riverwalk project which has slowly been built-out ever since.
Section of the Milwaukee Riverwalk
Along the Riverwalk spots of vibrancy and urbanity have sprouted up helping to bringing people and life back to Milwaukee, particularly in the Third Ward. Milwaukee’s downtown population has seen such strong growth that it now has 15,000 residents, which is higher than many similarly sized cities. This growth, and the growth of many near-downtown neighborhood’s was in part due to the application of New Urbanist principles in Milwaukee.
Milwaukee, like most former “rust belt” cities, has vast acres of land siting largely vacant with decaying industrial facilities scattered about that are filled with toxins and unknown substances limiting redevelopment opportunities. The redevelopment of these sites, referred to as brownfields, is a challenge to any city and certainly has been for Milwaukee, but the city has had award-winning, nationally-recognized successes in this area. Just north of downtown along the Milwaukee River the area known as the Beerline B used to contain tanneries, breweries, coal piles, and other industrial uses, while today an entire new neighborhood has sprung up on the former brownfield site. The nationally recognized redevelopment of the Menomonee Valley, the former Milwaukee Road Shops site, took a blighted, toxic, 140-acre site, and has returned it to the tax rolls, brought new jobs to Milwaukee, and cleaned up a polluted site in the middle of Milwaukee. Company’s such as Derse, Charter Wire, Ingeteam, Helios, Palermo Villa have taken up residence and, entertainment options such as the Potawatomi Casino, the Harley-Davidson Museum and Miller Park also lie within the valley.
As part of the redevelopment, Chimney Park, the Hank Aaron State Trail, and significant storm water retention systems were constructed, which create a curious juxtaposition between industry and parkland. Today the next major brownfield site being redeveloped in Milwaukee is the 30th Street Industrial Corridor. This is a critical site for Milwaukee because at one time it was the center of jobs for the inner city, and today is a mostly abandoned, decaying industrial site. The city has acted quickly and has already landed its first tenant, Talgo, who will build high-speed rail cars for cities across the U.S. and bring 125 jobs to Milwaukee. The redevelopment of sites like these is key to Milwaukee’s future, and has already begun to reshape its landscape.
The adaptive reuse of existing building stock plays a role in brownfield development, but it is also important within the historic preservation and green movements in Milwaukee. Milwaukee is actively involved with preservation and green efforts in its partnership with local development firm Zilber Ltd to redevelop the former Pabst Brewing site, just west of downtown, into a new mixed-use neighborhood. The project, known as The Brewery, is attempting to be one of the earliest LEED-ND certified neighborhoods in the country.
Renovated Building #10, formerly the Boiler House, at the Pabst Brewery
Not only is the intent to save and re-use as many of the existing structures as possible, but it is also to achieve as high a green certification in the process. The district has already seen the opening of the Blue Ribbon Lofts apartment building, Best Place tavern, a Cardinal Stritch University facility, and Zilber Park. Both the green and historic preservation movements are in a real way adding a new neighborhood to Milwaukee.
Another urban concept that is beginning to shape the face of Milwaukee is urban farming. On Milwaukee’s northside Will Allen’s Growing Power has become a national model in urban farming. Growing Power provides high-quality affordable food to the community, and a learning experience to Milwaukee’s youth. This concept has spun off businesses such as Sweet Water Organics Fish Vegetable Farm, and sparked a renewed interest in neighborhood gardens throughout Milwaukee. Looking to literally take it to the next level Will Allen is proposing to build a 5-story vertical farming building, that would be a groundbreaking effort in its own right.
It’s not to say that Milwaukee has become the new Portland of the Midwest, far from it really. In fact downtown Milwaukee still has far too many acres of surface parking lots, lacks a truly regional transit system, and retail still struggles to make it in the core. But Milwaukee is in the slow process of evolving from its post-industrial collapse into a new Milwaukee.
Highlights from UrbanMilwaukee
For more on Milwuakee, visit UrbanMilwaukee. Here are some highlights from the archives:
- Grand Avenue Mall – A New Implementation
- Miller Park vs. Busch Stadium – Milwaukee vs. St. Louis
- Rethinking and Expanding Milwaukee’s Frontier Airlines Center
- A Complete Street Makeover for 2nd St.?
- The Park East Disaster? No
Dave Reid is the co-owner of UrbanMilwaukee.com, sits on the board of directors of the Friends of Lakeshore State Park, and works to encourage the living an urban lifestyle. UrbanMilwaukee.com’s goal is to “Champion Urban Life in the Cream City” and we strive to do so each and everyday.
Tuesday, May 11th, 2010
[ Here's another piece from Megan Cottrell's incredible blog on poverty and housing issues, One Story Up. If you saw the article on Matt Desmond's work in the New York Times, just for the record, Megan had the story first - Aaron. ]
Among young black men in America, about 10 percent are currently incarcerated. It’s shocking, but we’ve almost grown used to it.
But while those young men are in prison, what’s happening to their wives, girlfriends, mothers and sisters?
Eviction. A new study coming out of Milwaukee shows that eviction is for black women what incarceration is for black men. One in 20 households there are evicted every year. In predominately black communities, that rate doubles to 1 in 10 families.
For those of us who are affluent, with relatively stable incomes, we’ve never even had to think about what it would be like.
Getting the eviction notice in the mail. The knot in your stomach, knowing you can’t pay the rent you owe. The court case, and the eventual knock on the door from the sheriff, telling you it’s time to go.
We’ve been talking about eviction a lot lately, from the near eviction of three orphans and their guardian, to the protested eviction of a Cabrini-Green mother, to the Chicago campaign to stop evictions from happening this winter.
When I heard about Matt Desmond’s research out of Milwaukee, I was shocked and intensely interested. It turns out, while many people have studied poverty and poor communities, no one has ever really studied evictions before, at least not the way Matt has.
“Eviction is probably the most under-studied process affecting the lives of the urban poor,” said Matt, a doctoral student at the University of Wisconsin-Madison. “We know nothing about it.”
To figure it out, Matt dove into neighborhoods where evictions are common place. He took up residence in a trailerpark outside of Milwaukee, living there for several months before he moved into an inner-city neighborhood. He talked with people, poured over eviction records, and asked people to record their experiences with eviction through a large survey effort.
What he found, he said, surprised him.
“Eviction isn’t rare. It’s quite common in the lives of poor families,” he said
I asked him about families that he got to know – people he spent hours talking with. Was it hard to see them face these troubles?
It’s always hard to tell over the phone, but I could swear I heard a quiver in his voice as he replied.
“It was difficult,” he said, “It’s a bit hard to talk about, actually.”
It’s not just that eviction happens a lot in poor neighborhoods, but Matt’s was also stunned by who eviction was happening to.
“Eviction is disproportionately experienced by women and black women. It’s the feminine equivalent of incarceration,” he said. “There’s a lot of young black men being locked up and young black women being locked out.”
And eviction has consequences, more consequences than just getting put out on the street. One eviction on your record makes it harder to find your next apartment. Your security deposit might be higher. Your rent might be greater. For families who are already struggling that much, that kind of pressure leads to more trouble, more evictions. Many of the families Matt talked to were paying 80 to 90 percent of their income in rent per month.
It’s just not sustainable, he said. We’ve got to do something about it.
“We’ve reached a breaking point, Megan,” he told me. “We can’t go on like this.”
The solutions, he says, aren’t so easy. Just because eviction is bad, he says, doesn’t mean no one should be evicted. It means we have to pay more attention to this process that’s directly impacting the lives of the poor.
“We know a lot about the consequences of incarceration. That doesn’t mean that no one should be locked up,” he says. “But it probably means that not so many people should. It may be the same for eviction.”
That means anti-poverty programs need to listen up. Free school lunches are nice. But no amount of school lunches make up for not having a home and not being able to get one. We’ve got to figure out what’s going on in our communities and what solutions can help.
We’ve still got a lot to learn. But to begin, I think we need to start seeing eviction – witnessing what’s happening in our city.
Imagine it’s you. You lost your job. The bills are piling up. The rent is three months late. You’ve borrowed money from everyone you can think of, and there’s nothing left. The notice comes, and you pray it won’t happen, but it does. Your stuff – in boxes. Your children don’t have a place to come home to after school. Where will you go? And how will you put your life back together?
Hundreds of families in Chicago are experiencing this right now. We have to listen to their experience, open our eyes and figure out what can be done.
This article originally appeared in One Story Up. Reprinted with permission of the author.
Sunday, October 4th, 2009
The Other Side of the Tracks
If you like Midwest Miscellany and would like to have more good links, I suggest subscribing to Reconnecting America’s daily email blast called “The Other Side of the Tracks”. It focuses on transit oriented development and is an interesting collection of 6-12 of the best pieces from around the web that day. To subscribe, just email email@example.com and ask to be added.
The Lake Wobegon Effect
A reader emailed me an interesting response to my open thread about the best and worst Midwest characteristics. It was about my personal pick of the active discouragement of the pursuit of excellent as the worst characteristic, and some of the reactions that spawned. Here’s an edited version of the note:
I subscribe to Salon.com, and yesterday there was a little essay by Garrison Keillor, who, as you may know, had a stroke recently [he's fine]. Point being, it made me reflect a little more on the Midwestern mindset and how close he gets to capturing it. It’s the place where “all the women are strong, all the men are good-looking, and all the children are above average.” Don’t know if you’ve been a fan of “A Prairie Home Companion.” I read “Lake Wobegon Days”, which was and is to this day, IMHO, the best description of the best and worst of the Midwest mindset I’ve ever found.The point is the “Lake Wobegon Effect“. Wikipedia describes it as “the human tendency to overestimate one’s achievements and capabilities in relation to others.” The article, with citations, goes on to say, “The effect has been found repeatedly by many other studies for other traits, including fairness, virtuosity, intelligence, and investing ability, to name a few. It is similar and may be related to in-group bias and wishful thinking.”Got me thinking about this in terms of Midwestern cities and the Midwestern mindset — under the surface modesty, there is a quiet smugness and complacency — arrogance, even — the Lake Wobegon Effect — that overestimates the quality of Midwestern life. As you and some other commentators have pointed out, Midwesterners are quick to blame external forces for the demise of their cities, which is entirely consistent with a core conviction that we in the Midwest secretly feel ourselves JUST FINE — maybe not quite as smart or modern as the coastal folks. But certainly better than average. Yes, we have our problems, always have, always will. But don’t focus on the negative. We never claimed to be PERFECT — just above-average. Whatever our problems, we’re better off than most, and, when you come right down to it, things are, basically JUST FINE. We get Gentlemen’s C-pluses.
Which, when you think about it, is all anybody should want, because if you get too big for your britches or think TOO BIG, you’re sure to get a comeuppance. Pigs get fat; hogs get slaughtered. Pride goeth. Etc. We’re not show-offy, always drawing attention to ourselves like the over-achievers. The quarterbacks, prom queens and class valedictorians all must have “something to prove.” They’ve got to be over-compensating for something we have that they’re missing. Only logical explanation. They’re the type who gets all worked up about things instead of appreciating what’s right under their noses. They’re belly-achers with Bad Attitudes who won’t ever accomplish anything because they don’t respect how Things Get Done Here. Why, they can barely hide their scorn for their neighbors, the rest of us. With such a superior attitude, their subscriptions to the New York Times (don’t think we don’t know) and their worrying about things going on in places that don’t affect us at all, who’s going to vote for them? Who do they think they are, anyway? Or, they’re day dreamers who come up with Big Schemes rather than do what everybody else does, which is Work Hard — Work Hard and Save. The ones who sing “Over the Rainbow” instead of feeding the hogs. You know what they lack? COMMON SENSE. They don’t understand that if this new idea of theirs was any good, somebody would’ve already figured it out and put it in place. They just don’t get it, that, in this town, IF YOU BUILD IT, PEOPLE WON’T COME; They’ll stay away to make a point — or maybe show up once, just for a good laugh. And you know what? The prom queens and valedictorians, the know-it-alls with the superior attitudes who want to change things just for the sake of being different — they usually come to a bad end. They’re never satisfied, they get divorced, they lose their business, their kids get dangerous ideas and end up on drugs or pregnant. Or they move away (another form of coming to a Bad End), which is fine with us. They never really did belong here. Probably best for all if they do move somewhere else.And yet, these are the people who are going to show up with casseroles and jello molds when somebody in your family gets sick. They’re the ones who can spot a phony a mile away, and are There When You Need Them. Aargghh. These are the people whom Dorothy missed so much that she clicked her heels and gave up Oz and Technicolor to return to. (Wish the “Wizard of Oz” had been one reel longer. Would love to know if Dorothy lived to regret her decision. Wonder if she settled down happy, tried to challenge Miss Gulch and start her own broom factory, or ended up trying to conjure Glinda nightly and pray for another cyclone.)If you haven’t read “Lake Wobegon Days”, think about doing so. In it, Minneapolis figures as Sodom [read: NYC]. The tension that gets set up between the good decent, hard-working people in Lake Wobegon, and those who leave for Minneapolis and return from time to time with foreign uppity strange ways, dubious morals, get-rich-quick schemes and all the rest of it — good and bad — you’ll really get a kick out of it, and, perhaps, get a better handle on articulating what it is that makes us love this region enough to get so damn exasperated by it.Also brings to mind the lyrics of the great ode to the Midwest — Professor Hill’s “Mothers of River City” number in “The Music Man”, using the pretext of the pool table in the community as a basis for starting the boys’ band (for which Hill will provide uniforms and instruments) — “List’nin’ to some big out-a-town Jasper, hearin’ him tell about horse-race gamblin’. Not a wholesome trottin’ race, no! But a race where they set down right on the horse! Like to see some stuck-up jockey’boy sittin’ on Dan Patch? Make your blood boil? Well, I should say!”
Of course, “Music Man” is the success story that your blog keeps rooting for — out-of-town slick salesman comes in ready to fleece the locals with some fancy, useless ideas. Local intellectual dissident, the librarian, with her Dangerous Books is naturally seduced by the guy, too foolish to see through the scam. City Fathers and Mothers set out to expose the the rip-off and protect the populace. So far, not looking good. But, somehow, miraculously, the good values rub off on the outsider, Marion the Librarian is exonerated, and the town ends up with the damned marching band and a parade. Template for your happy ending. Toledo is saved!
The Next Youth Magnet Cities
The Journal ran an article this week that made the rounds asking six experts to pick the next “youth magnet” cities. Perhaps unsurprisingly, this was an utterly conventional wisdom list: DC, Seattle, NYC, Portland, Austin, San Jose, Denver, Raleigh, Dallas, Chicago, Boston. Did the Journal really need to convene a panel of experts to come up with this list? Why not ask six random people off the street if you aren’t going to go off the menu, as it were.
Are these really the big stories of tomorrow? As we see from bubble mania and other things, humans have an incredible tendency to simply project present trends indefinitely into the future. The reality of change has a way of sneaking up on us, however. Jim Russell is right to call this “yesterday’s news”. What matters is where the hockey puck is going.
I’m not surprised, but also not discouraged, to see so little Midwest representation on the list. I happen to think the future is one of wide open possibilities. Tomorrow’s winners are yet to be chosen.
Wisconsin Bio-Tech Boom
Wisconsin is doing so well in bio-tech that Minnesota is very concerned about falling behind. This prompted the Minneapolis Star-Tribune to do a two part series on it. Part one is called “A bio border battle“.
Wisconsin has become the regional biotech equivalent of traditional high-tech powerhouses like Boston, Silicon Valley and Research Triangle Park in North Carolina, thanks to strong political support, an influx of investor capital and what is arguably the most formidable university technology transfer program in the country.
“Wisconsin is a very exciting place,” said Peter Bianco, a former executive with Nerites Corp. and a current scientific advisory board member at Flex Biomedical in Madison. “You just get this sense of forward motion. Wisconsin is doing something right.”
The article gives a slew of facts, including noting that since 2007 three biotech spinoffs from UW-Madison sold over over a $1 billion – more than the combined total of the 107 spin-offs from the University of Minnesota in the past 25 years – and that the UW research park currently houses more than 115 companies.
The second part is “Badger state’s biotech boom“. It talks all about the streamlined and entrepreneur friendly IP policies and processes of the University of Wisconsin. Definitely worth a read.
Detroit to Demolish Lafayette Building
Perhaps there is something wrong about valuing the fate of buildings over that of people. Yet most of us cannot helped but be moved by grand expressions of the human spirit, often given corporeal form in the great buildings created by civilizations of all ages. Often our grief is greater for lost architecture than for lost peoples.
Detroit has one of the best and largest collections of pre-war skyscrapers anywhere in America. It is simply one of the 2-3 most important. Yet so many of these buildings have fallen victim to neglect and demolition, as they are functionally obsolete and market demand will not support renovations.
The latest victim is the Lafayette Building, scheduled for demolition soon. It is the twin tower structure in the background:
Here’s a shot of some roof detailing:
Yes, this building is in terrible condition. There are actually trees growing on the roof which led to much of the damage. This interior shots will give you a sense of how bad a shape the building is.
If you want to see more, just click this flick search link.
I understand that in a place like Detroit hard choices have to be made. But the loss of historic structures like this isn’t just a loss to Detroit, it’s a loss to America and the destruction of a piece of our shared heritage. And for the city, this isn’t just a loss of the past, but of the future as well. As we look across America at where urban revitalization has happened, it is often historic areas. Detroit is facing a challenge unlike any other. But I’ve got to believe that the answer doesn’t lie in demolishing precious historic buildings like these.
More coverage on this demolition is available over at Detroit Blog.
Time: Assignment Detroit
Time Magazine is already filing stories from their new Detroit bureau. Here is a link to their series home page. And here are some selected pieces to give you a sense of what they are up to:
- Why Time, Inc. is in Motown
- The Death – and Possible Life – of a Great City
- For Iraqi Refugees, a City of Hope
The New York Times took a look at Time’s effort in a piece called “Time focues on Detroit, a city sicker than journalism“
More Detroit Agriculture
The Toronto Star has a major piece on urban agriculture in Detroit called “From Motown to Hoetown“. Here’s an excerpt:
“Detroit might seem an unlikely champion of urban agriculture, as the birthplace of the automobile and its farm-devouring offspring – urban sprawl.
But, it has become ground zero for North America’s local food movement.
Last year there were roughly 550 gardens in the city’s urban farming network. This year there are more than 850.
Driving around the city, you can see everything that will make up your dinner – chickens, goats, mushrooms, plum trees, honeybee hives. I passed a whole block growing shoulder-high corn. A horse grazes outside a barn behind a high school. Edith Floyd parks her tractor behind her house – 12 kilometres from city hall, where bureaucrats are scrambling to catch up with the collard greens sprouting on street corners.
Here, a locavore doesn’t eat food that’s travelled 100 kilometres. She eats food that’s travelled 10.
“I picked these this morning,” Floyd says, carrying a laundry hamper filled with watermelons to her stand at the Wayne State University farmers’ market. The chalkboard propped in front reads “Grown in Detroit.”
The article also talks about a person who is looking to do full blown industrial agriculture in the city, though he is running into neighborhood opposition. I think again goes to show that there are some possibilities for the future that exist moreso in Detroit than in any other city.
I’m also interested to see the intersection of urban agriculture with more traditional inner city concerns like food deserts, neighborhood empowerment and social justice. When you look at it through this lens, it is not hard to imagine agriculture as a catalyst for bringing together whites and blacks in a city where racial healing is a prerequisite to civic renewal. You think of terms like local agriculture often in terms of upscale whites buying their organic regional produce at Whole Foods and farmers markets. But in Detroit we also see it as a vehicle for African American empowerment. Can these two very diverse groups somehow find ways to collaborate and start building relationships? It will be interesting to see.
“We’re not just into farming. We’re into community self-determination,” says Malik Yakini, one of the leaders of Detroit’s nascent farming movement. The self-described “social architect” runs an Africentric school and chairs the Detroit Black Community Food Security Network. He talks about food justice – where the community reaps both the nutritional and financial rewards of the food it buys.
His D-Town Farm spans two acres of city parkland on Detroit’s western edge, where little bungalows with rusted awnings still line wide streets and a faded ice cream truck does laps of the yellowing boulevard. The volunteer team running it sells its leafy greens and radishes to local restaurants and farmers markets. Next year, it plans to hire two permanent employees.
“We’re trying to create an economic model, to show how agriculture could contribute to the economic recovery of Detroit,” Malini says, pushing into the brush to reveal a plastic greenhouse where oyster mushrooms will soon grow.
Stay tuned. (h/t @gosner)
Kansas City Arena Turns Profit
Here’s one you don’t see every day. Kansas City is about to get a check for $1.8 million in profit sharing from the Sprint Center arena. The arena was built with the idea that KC would attract an NBA or NHL franchise, but that has proven elusive. Interestingly, the lack of such an anchor tenant actually means the arena itself is profitable. As the article puts it:
“When it comes to visitors, concerts and gross revenue, the building, from that standpoint, is an overwhelming success,” he said Tuesday.
Leiweke said the strong, concert-fueled profits at the arena during the fiscal year that ended July 31 means AEG can be more selective about pursuing an NHL or NBA franchise for the facility.
Any professional team would likely demand big chunks of the facility’s revenues from luxury suites, concessions and sponsorships. That would cut the arena’s ultimate profits.
“The economic model of this building is quite successful,” said Leiweke, who was in town for a preseason NHL match Tuesday night between the Los Angeles Kings, owned by AEG, and the New York Islanders.
“The last thing we or the city want to do is throw away that model and make the arena a loss leader with another tenant,” he said.
“It’s a tougher scenario with a professional team,” he added. If there were a team there now, “I’m sure we wouldn’t be able to write a check to the city for $1.8 million.”
While landing a professional sports team as an anchor for the arena remains the ultimate goal for AEG, Leiweke said the presence of a team also could diminish its popularity as a concert venue. Now, the arena has an abundance of options to offer concert promoters.
The team’s games at the arena would remove up to 50 dates from the calendar and also would likely put much of May and June on hold because of potential playoffs, Leiweke said.
“We want an anchor tenant, but the right tenant and the right time,” he said. “We’re going to have to be patient.
“There’s a lot going on with both the NBA and NHL … I think it’s best for us now to stay focused on keeping this a great arena, and the leagues will sort themselves out over the next two years, and when the time comes, we’ll seize the opportunity.”
It’s rare that you ever hear anyone publicly state that an arena is designed to be a loss leader for a community. Kansas City already has two professional sports franchises, which for a city of its size is probably enough. They already get the branding and entertainment benefits of pro sports. It is worth it for them to go for the trifecta? Is there another region as small as KC with all three major leagues?
National and International Roundup
GOOD Magazine has an interesting look at rethinking cities.
Sid Burgess gives us his “7 Blunders of Sidewalkdom“
Oklahoma city MAPS out big plans. Yes, OKC too wants to build a downtown mini-Millennium Park.
The Guardian asks whether California will be America’s first failed state.
Long Island’s Changing Face (NYT). Article on immigration to Long Island.
The Guardian: Gordon Brown signals commitment to high speed rail
The Columbus Dispatch has a database of Ohio stimulus projects.
A Louisville blogger compares his city’s biking infrastructure with Indianapolis. (via The Indy Cog)
The Chicago Symphony Orchestra: America’s Finest Orchestra (The Telegraph)
Architectural review of the Trump Tower (Blair Kamin @ Tribune)
Cleveland Orchestra to establish New York residency (NYT)
The Gay Games are coming to Cleveland in 2014 (Plain Dealer)
More minorities leaving Detroit (Detroit News)
Michigan is singing the white collar blues (WSJ) – via Rust Wire
In defense of Detroit (Forbes)
Five one way tickets to Michigan please (Jeff Bocan @ Huffington Post)
Detroit mayor’s tough love poses risk in election (NYT)
Can Detroit stop the bleeding? (Jeff Gerritt @ Free Press)
Kansas City has lost top three convention (KC Star)
Milwaukee lands federal grant to develop water cluster (BizTimes)
What’s at stake for Pittsburgh? (Bruce Katz)
Google CEO: Pittsburgh’s economy a model for others to follow (Post-Gazette)
Friday, October 2nd, 2009
Guerrilla Bus Shelters in Raleigh
Raleigh, NC is in big need of bus shelters but the city isn’t providing them. So what to do? According to New Raleigh, if the city won’t, then the public will.
The Raleigh area needs more guerrilla art and architecture….Something else Raleigh needs more of is bus shelters. I could probably count on one hand how many covered bus shelters are in the downtown Raleigh area. The city has sponsored multiple transit stop competitions and even with the new R-Line being seemingly successful, the city still lacks shelter for public transit riders….While this isn’t a complete combination of the two, some local artists have bounced around the downtown area and installed impromptu bus shelters to make a statement. The statement is clear: IF THE CITY WON’T BUILD SHELTER FOR OUR PUBLIC TRANSIT RIDERS, WE’LL DO IT OURSELVES!
And they did. Here are a couple of pictures:
Cities hate this stuff. They will always claim safety and such is the reason. There is something to that. But it is also true that when the citizens have to take matters like this into their own hands, it is an intolerable rebuke to those in power who have failed to provide the service the community wants and needs. It goes back to what I said about the weakness of Detroit’s government and that city being a new American frontier and land of possibility precisely because its government can’t get in the way of citizens doing things for themselves. So many cities don’t have the will or capability to take care of business, but they can stop other people from taking care of it.
Raleigh was also the home of the famous “barrel monster”, made by an Indy native who took some amazing photos for his No Promise of Safety site, which has been decommissioned after he had one too many brushes with the law. Luckily, somebody saved this one:
The FRA as Obstacle to a Modern Passenger Rail System in America
Back in my opus on high speed rail from earlier this year I suggested that some of the biggest barriers to the establishment of a modern passenger rail system aren’t from those opposed to it, but from the existing agencies in the business today: Amtrak and the FRA.
The good folks over at Skyscraperpage pointed out an article from 2007 taking the FRA to task. Called “How the FRA is Regulating Passenger Rail Out of Existence“, this is a must-read. A sample:
What if the FAA required that jet aircraft be able to survive crashes into the ground?
Or if the FWHA said automobiles had to survive any head-on crash at 60 mph into a tractor trailer without deformation?
Even if such vehicles could be engineered, they would be far too costly to operate. But for passenger trains, that is precisely what the FRA has been doing.
It is an arcane government agency few ever heard of. The Federal Railroad Administration was created in 1966 to set and enforce railway safety standards. And certainly in terms of safety, the FRA has been wildly successful passenger rail is perhaps the safest mode of transport in the US. But many rail advocates argue that the FRA regulations have not only come at too high a price (by making rail prohibitively expensive) but in many cases are completely nonsensical.
FACT: European style light trainsets have proven exceptionally safe in their operating environment. It’s not just about crash survivability, but preventing collisions in the first place.
The Chicago Olympic Bid and Selling the Vision
The outcome of the vote in Copenhagen was a big disappointment in much of Chicago. I don’t want to go too much into Olympic land, but clearly support for the games was less than universal. Some pundits suggested even in advance of the vote that a lack of public support would doom Chicago’s bid.
Jason Fried of 37 Signals wrote a piece on this that should sound familiar to those who read my call for a new vision of selling transit improvements in Chicago. Jason gets it on many fronts, so I thought I’d share some of his words here:
The 2016 announcement is just hours away. Will it be Chicago? Rio? Madrid? Tokyo? The favorites appear to be Chicago or Rio, but who knows. I’d like to see Chicago win.
As as Chicagoan, I’ve seen the campaign close up. A recent poll suggests Chicago citizens are about equally split on whether or not they want the games. The results show slippage from the 2-to-1 support found in an earlier Tribune poll in February.
I think this reveals a flaw in the local marketing of the games. And I think there’s a good lesson in all this: Chicago sold the features, not the benefits. Chicago didn’t tell its citizens why the games would be good for Chicago. Chicago didn’t lay out the lasting legacy of the games for the city. What’s really in it for us? Why should we really support it? What happens after they are over? 8 years of work for a few weeks of sunshine. Then what?
This is a bit of Friday-morning quarterbacking, but here’s what I would have loved to have seen: A campaign centered around Chicago 2017. Show us what the city will look like after the Olympics. Give us a reason to want the games for the decade after the games. Give us examples… If a kid’s 16 years old today, what will the city be like for her when she’s 26? How will the games make Chicago a better place for Chicagoans. Will it be a better place to grow up? Why? Will it be a better place to work? Why? Why would we want to put up with all the construction, traffic, congestion, and attention? Why will it all be worth it?
I do hope we get the games. I do think it will be great for the city. But I have a hard time communicating why. And if I can’t say why, I can’t tell other people why. Shallow support is barely support. That’s a problem.
It’s the exact same problem with transit.
Milwaukee Transit Update
Mayor Barrett recently gave an update on the city’s transit efforts, focusing on three different downtown streetcar alignments to be studied. I won’t go into details on this, since Urban Milwaukee already has it covered, complete with route maps.
I did want to note a couple things, however. If you look at the mayor’s presentation, you see two very important items:
1. It talks about streetcars in the context of the city’s overall transit strategy. I think this is generally important. (I will admit to having dinged Cincinnati for doing this, but that is only because voters already rejected a regional transit system).
2. It has some great photos showing aspects of Milwaukee – its economy, culture, and architecture – in the context of and measured against the world cities with which it aspires to be compared. In short, it markets this as about putting another piece of the puzzle together for Milwaukee’s 21st century aspirations. You can disagree with the direction, but the marketing is good. Here’s one slide to show what I’m talking about:
Indianapolis Express Bus Routes to End
This is the sort of thing that kills me. Indygo, the Indianapolis bus service, started a series of express buses from the suburbs to downtown using CMAQ funds. Launched when gas prices were high, these routes were over-subscribed. As gas prices fell and the economy slowed, ridership declined, but stabilized at a decent base for the Carmel and Fishers routes.
I thought the concept of these express buses was a good one. It gave people a taste of a transit service targeted at middle class riders in a city that had no experience with this. It could have been a way to start building a transit culture and a ridership base for future expansions of service such as rail.
Unfortunately, IndyGo used a temporary grant that will soon expire so the bus routes are scheduled to be terminated. This is devastating for the future of transit in Indianapolis. By stopping and starting service, all this does is pull the rug out from underneath riders, and, what’s worse, provide ammunition to anyone who would oppose transit expansion. Clearly, if Indy can’t sustain a couple of bus routes, why would anyone believe it can sustain anything more? If these routes are permitted to expire, it will be a big setback to the credibility of transit in the city.
The Phony Coney has a look at US rail transit projects from 2000-2009.
Friday, June 5th, 2009
NCR Leaves Dayton for Atlanta
There was terrible news for Dayton this week as the city’s last Fortune 500 company, NCR, founded locally in 1884, announced it was moving its headquarters to Atlanta. The Dayton Daily News is the place for complete coverage.
This is bad news not just for Dayton, but for the state of Ohio and the entire Midwest. Firstly, it illustrates the plight of the smaller cities of the Midwest, the ones below one million in metro area population that I usually don’t write much about. These cities, including places like Dayton, Youngstown, and Toledo, are often struggling. Unless they are a state capital and/or home to a major state university, they just don’t seem to have quite the scale necessary to operate in the globalized economy. These cities have special challenges and I won’t profess to have answers for them.
Secondly, this is further damage to the economic reputation of the Midwest as a whole. Loyal readers know that I’ve been skeptical of cross-regional collaboration as a panacea (though I’ve also written some positive things about it). However, there are clearly issues that affect the Midwest as a whole. It has, for example, a collective reputation as the Rust Belt that probably only Chicago is able to overcome.
This reputation creates formidable brand headwinds in trying to attract the talent needed to compete in the 21st century. The Atlanta Business Chronicle had an interesting take on the NCR move, with one anonymous source attributing it to talent issues with Dayton. “They [NCR] can’t recruit talent to move to Dayton, Ohio.”
So what, you might say. It’s Dayton. But my town is way cooler than Dayton. Well, the problem extends well beyond Dayton. Consider Ann Arbor. If any city in the Midwest can claim to be a winner in a the knowledge economy, it has to be the home of U of M, the best public university in the Midwest. But according to an article in the Journal, “Despite Ann Arbor’s educated work force, employers here find Michigan’s reputation as a failing manufacturing economy can deter potential hires from moving to the state.”
In short, this thing affects everybody. Even the best regional performers will be fighting horrible brand headwinds as long as the region in which they are embedded continues to fail. It’s like a larger version of what I’ve long said about the Hoosier State, that there can’t be a long term prosperous Indianapolis without a prosperous Indiana.
The lessons of Dayton and NCR are not being lost on people locally and around the state at least. Local blog Dayton Most Metro asks, “Are we ready to wake up yet?“
And a columnist in the Cleveland Plain Dealer chimes in with a call to arms for his city.
When Ohio cities lose storied corporate birthrights to the likes of Beijing, Calcutta, or even the green fields of Ohio suburbia, I understand potentially insurmountable market forces at work.
But when we continue to lose to the likes of Georgia, I only recognize underperforming leadership and a criminal failure to anticipate market realities.
In trying to understand the meaning of it all, we should reflect on the somber and lonely sentiments of a Dayton Daily News editorial that noted Wednesday that the city is now on its own.
Closer to home, Cuyahoga County continues to inch closer to its civic funeral. Not only do we continue to bleed off population and shutter what is left of our industrial base, we continue to act in a predictable political fashion that hastens our day of reckoning.
The inability of Cuyahoga County officials to agree on government reform tells the world that Northeast Ohio continues to be no place to do business. Like Dayton, our region remains a corporate cherry-picker’s fantasy.
Soon there will be nothing left to govern in Cuyahoga County.
The Milken Institute this week released their “tech pole” study of which metro areas are technology hot spots.
Ed Morrison over at Brewed Fresh Daily put up this nice map:
This study operates on something called “Metropolitan Divisions”, which for some places is the same thing as the metro area, but some big cities like Chicago and Detroit are split into multiple of them. That explains constructs like Lake County-Kenosha. Here are how my Midwest cities stacked up on the top 50:
- #14 – Chicago
- #17 – Minneapolis-St. Paul
- #31 – Kansas City
- #33 – St. Louis
- #41 – Indianapolis
- #45 – Columbus
Milwaukee, Louisville, Cleveland, and Cincinnati did not make the list. Detroit’s core region didn’t either, though the north suburban Warren MD clocked in at #30.
On a related note, Joel Kotkin asks if your city is safe from the tech bust.
Cities Where It’s Good to Be Goth
Even Gothic Beauty magazine is getting into the ratings game, publishing their “Dark Cities 2009″ survey in the most recent issue. Here are where Midwest cities came in on the top 25:
- #4 – Chicago
- #6 – Detroit
- #9 – Cleveland
- #12 – Minneapolis-St. Paul.
Columbus, Ohio got an Honorable Mention.
Downtown Kansas City ROI
Seeking to determine the results from its downtown redevelopment efforts, Kansas City measured its increase in in city income taxes downtown between 2001 and 2008. According to the study, tax revenue is up by 69% downtown versus only 18% city wide. Also up, business license taxes by 49%, as well as major increases in sales, restaurant, and hotel taxes. The article doesn’t say whether rates increased on any of these, but I’d be shocked of they hadn’t on the hospitality side. Overall, revenue is up 46% downtown vs. 33% city wide.
Among the drivers of this are a new IRS headquarters with 3,000 permanent jobs and 5,000 seasonal ones, and a new H&R Block headquarters with 1,600 employees.
Hat tip BlogKC for this article.
Indy and Indiana Get Nice Profile in The Economist
The Economist has an article profiling Indiana this week. It praises the state’s transition process to to knowledge economy while acknowledging the major challenges it faces. It is pretty good at talking about various regions of the state. Here is what they had to say about Indianapolis:
Unlike blighted Detroit, Indianapolis is a lively centre, with sports stadiums and a fine symphony orchestra. Each year the Indy 500 car race draws 300,000 visitors. Mr Daniels, meanwhile, is an excellent manager. He earned the state its first AAA credit rating and has sought new firms by keeping taxes low and investing in infrastructure. Though every state wants to be a hub for life sciences, Indiana really is one, home to pharmaceutical giants such as Eli Lilly and medical-device manufacturers such as Zimmer. Life sciences accounted for 23% of all job growth from 2001 to 2007.
Zoo Interchange Price Tag Shocker
The Wisconsin Department of Transportation wants to rebuild the Zoo interchange in Milwaukee at the astonishing cost of $2.3 billion. That’s not a misprint.
I’m all in favor of investment to improve our highway infrastructure, but something seems out of line here. To put this in perspective, INDOT is widening 11 miles of I-465 on the west side of Indianapolis, including full pavement reconstruction, and full interchange redesign and reconstruction, including two freeway-freeway interchanges. The price tag on that project is a much more reasonably $550 million. Other than the underpowered I-70 interchange, which was reduced to an inferior option to keep the project on budget, this is a pretty much first class project, with very nice, beautiful overpasses, ped/bike infrastructure, etc.
I’d say some a lot more detail is required to explain why this project is so out of sight pricey.
Over the Rhine
Over the Rhine is a neighborhood just north of downtown Cincinnati that has an amazing intact stock of historic buildings in an incredibly dense urban fabric. If fully developed, this area would equal many thriving Chicago neighborhoods in density. It has been decayed for many years. For at least the last 15 it has been predicted to be the next hip neighborhood in town, but has suffered many setbacks, not least of which was a high profile race riot in 2001. The area appears to be on an upswing today, so we’ll see what happens. In the meantime, here’s a five minute video Urban Cincy points us at talking about the neighborhood, its history, and above all the community and people who live there today.
For those of you who don’t have time to watch the video, here are some teaser pictures that Urban Cincy took of the area recently:
Another Impossibility City
This time it is Evanston, Illinois, which wants to clamp down on the Latino dominated industry of alley scavenging. This is where people in trucks roll through alley looking for scrap metal or other recyclables that people have left out for them.
This is like the ultimate win-win. People get rid of trash for free. Entrepreneurs who may not other wise have good options for earning money get paid. And stuff gets recycled. All done on a profitable, economic basis. What’s not to love?
Apparently the city doesn’t like competition to its monopoly trash hauling service. They feel they are missing out on revenue from the special fees they impose on residents and businesses to get rid to special items. Color me unsympathetic. The city is raising the specter of theft, but as someone who lived in Evanston for 3-4 years, I never once had a problem like this. Everybody knows that in the city you put something out in the alley when you don’t want it anymore and it either gets taken for reuse or recycling, or the city picks it up. It’s clearly a smoke screen. Let’s hope sanity prevails here.
The Overhead Wire posted three commercials that were used during a referendum campaign to repeal a transit tax in Charlotte. These are extremely effective and demonstrate that a good sales job is a probably one of the reasons Charlotte got its rail system built. These are 30 seconds each. If the embedded videos don’t show up, click here
Perspectives of Denver
To see what a non-Midwest city is doing, let’s check out this outsider’s view of Denver by Greg Heller.
He’s very impressed:
I spent the past few days at a conference in Denver, Colorado. And, I’ll tell you, that city impressed the heck out of me. It’s a medium-sized city (just under 600,000 residents), and you can walk across its downtown in about twenty minutes. While the scale is much smaller than my hometown of Philadelphia, Denver seemed to be doing things other cities are only dreaming of.
Denver has a beautiful and efficient light-rail and bus system. The 16th Street pedestrian mall is vibrant, beautiful, and well-used. A free (!) two-way bus system runs every few minutes to take passengers across the fifteen blocks of stores, restaurant, entertainment, benches, trees, lamps, and chess tables. They also have bike sharing!
Cherry Creek and the Platte River run along the west side of the downtown with an extraordinary set of walking and biking trails. At the confluence of the creek and river, one encounters beautiful Commons Park and a stunning vista of the skyline. The gorgeous Millennium Bridge takes pedestrians from Commons Park to the pedestrian mall. The scenery is beautiful, all the while, surrounded by the Rockies.
The architecture definitely impresses. I am not usually a Daniel Liebeskind fan, but his Denver Art Museum is stunning. The new, edgy buildings of the civic center mix well with the historic architecture of the state capitol and other older government buildings. The Denver Convention Center is also a pretty exciting building (yes, that’s a big blue bear pushing against the wall).
Everywhere I looked there was major public art. This is a city that clearly cares about creating a beautiful place for its citizens and visitors. Meanwhile, a host of new condo and apartment buildings are filling in the landscape, bringing more residents downtown.
But he also notes the challenges:
As I walked for hours around and outside Denver’s central business district, it was clear that despite its stunning success stories, Denver has a long way to go. The landscape quickly transforms from urban to suburban. Walking east out of the downtown, I saw the thriving center morph into a landscape of check cashing and fast food restaurants. Even downtown there is not all that much there yet. Parking lots still dot the urban landscape.
As is true anywhere, all is not sunny in Denver. The city has seen new challenges arise over the past 15 years. The city’s foreign-born population nearly tripled from 1990 to 2000. However, only about 8% of Hispanics in Denver hold a bachelors degree, and the city’s poverty rate is about 18% for individuals. Meanwhile, the state of Colorado had major job loss in the beginning of the 21st century. Denver is facing serious issues of inequality between the minority and white populations, a need for more jobs and affordable housing.
Sunday, February 22nd, 2009
This the third installment of my four part series about ideas to create competitive advantage through reconnecting Chicago with its traditional greater Midwestern city-region. (Essential background reading is in Chicago: A Declaration of Independence. Part 1a is on Metropolitan Connections. Part 1b is on High Speed Rail).
To refresh, in my kickoff of the year of celebrating the 100th anniversary of the Burnham Plan in Chicago, I argued that while Chicago was performing well in a globalized world, it was only riding the wave of globalization and wasn’t defining its own uniquely successful future, one where it first and most fully grasped the implications of our new world. I also promised ideas on where to look to do that, starting with re-embracing its own unique culture and identity, resisting homogenization. My second idea was around re-engaging with the greater Midwest. It’s been widely noted that globalization has worked to separate global cities from their traditional city-regions. Indeed, Chicago and others have almost deliberately turned their back on their past in this manner to focus exclusively on the global conversation. With most global cities doing that, the question immediately comes to mind: is there overlooked opportunity in the hinterland?
There’s no doubt that globalization has hit the Midwest hard, putting a big dent in its traditional agricultural and manufacturing industries. What’s more, now services businesses are often made up of tradeable commodities that can be sent off shore too. This includes anything from answering phones to writing computer software to interpreting X-rays. We’ve seen the rise of agriculture in Brazil, IT and BPO in India, and manufacturing in China and to date the flow has largely been one way: from the United States and other high wage nations to low wage nations.
However, every action provokes a reaction. Any self-reinforcing trend like offshoring often contains within it the seeds of, if not its own destruction, at least structural weakness that leaves it vulnerable to competitors that figure out how to adapt to the new world. We’re already seeing signs of some slow down and indeed even occasional reversals of the offshore trend. I believe that there may be opportunities to leverage more onshore delivery of outsources services and that the Midwest is well positioned to take advantage of this. What’s more, if the structures emerge the right way, we could indeed see some possibility for competitive advantage for Chicago and its Midwest eco-system. Again, I’m not giving “The Answer” here, only exploring the problem and solution space.
Let’s put aside for the moment asking why people outsource, but restrict our inquiry only to why they do it offshore. One reason is access to talent. Countries like India have huge pools of highly skilled, highly educated workers. Access to that talent is important in certain industries. However, I think this has only limited applicability and that the bulk of the rationale for offshoring is based on labor and regulatory arbitrage.
The bottom line is that the Midwest is in competition with labor overseas that makes a fraction of the domestic rate. That problem is obvious. But the regulatory arbitrage point is less commonly thought about. As we got richer as a country, we were able to afford things that in previous generations might have been considered unobtainable luxuries: clean air and water, safe workplaces, protections from labor exploitation, ensuring that heavy industries and other uses don’t harm our neighborhoods. These have all brought enormous improvements in the environment of the United States and the quality of life that we have here.
The problem is that since there is greater global tradeability of goods and services, there is a choice between a highly regulated system like that of the United States and Europe and places like China, which is less the Far East than the Wild West. They want a freeway, airport or new building? Just sieze the land, kick out the current occupants, and build it. Belch fumes into the air and poison the water. Borderline enslave your workers in terrible conditions. Corruption is rampant. It’s easy to criticize these developing nations for doing this, though we should keep in mind that we ourselves did all of this during our industrialization and development phase.
All of our regulations have benefits, but also impose enormous costs. That’s to some extent ok when you are only competiting within the club of people with similar regulations, but when you are competing against people without the same regard for the benefits of regulation and thus don’t have them, this obviously puts the domestic market at a disadvantage. Again, it’s easy to criticize companies for doing this, but realistically they would soon find themselves out of business if they did not because of competitive pressures. Only laws restricting tradeability or some type of cartel or collusion could prevent this.
Ironically, as we’ve put in place rules to protect things we value, the result of it has been to push production to places with few if any rules, actually creating a net negative result. This has interesting moral dimensions. Is it right for us to effectively export huge amounts of pollution and labor exploitation to other countries simply because we aren’t willing to put up with slightly dirtier air here?
It’s an interesting question but not one I’m going to explore here. I will however point you at a must-read article in this quarter’s City Journal (the magazine of the center-right, free market think tank the Manhattan Institute). Harvard economist Ed Glaeser has another one of his masterworks. He calculates the carbon footpoint of various cities and cities versus suburbs. What he finds is that California cities have nearly the lowest carbon footprints out there. Part of that is due to favorable climate, but some of it to green policies. However, this same spirit leads them to put the nation’s toughest restrictions on development. This leads to the again the paradoxical result that pro-environment rules lead to an anti-environmental result because it forces development to places with higher carbon footprints. Per Glaeser, we should be building skyscrapers in California, not sprawl elsewhere. But watch residents rail against the “Manhattanization” of San Francisco. The fact is, to reduce carbon emissions, we should take a very pro-growth stance in a place like California. And we should be encouraging more urban growth generally since cities usualy have smaller carbon footprints than suburbs. (Interestingly, Chicago has a slightly higher carbon footprint than its suburbs).
I think a similar thing is at work in the outsourcing space. To create a better environmental result, we should be seeking to do more outsourcing close to home. This would also provide jobs at home. I believe that means having the courage to re-evaluate our regulatory systems. It is very clear that we can never and should never go back to the ways of the past. But we can definitely start taking a more realistic look at things and go forward with a pro-business mindset. Because if we want to do the right thing by the planet as a whole, we’d do more production at home where we know the worst abuses will be prevented.
Others suggest that we should seek to write environmental and labor rules into international trade agreements. While there may be scope for including some basic minimum conditions here, writing US level rules into trade agreements is simply the institution of non-tariff barriers to trade.
Let me be very clear on my own view, especially since I am very concerned about things like what globalization has done to our communities, the environment, worker rights, etc. Namely, I believe free trade is the best policy. The answer is not to cut off trade, which has enormous benefits for us as a society.
One serious problem is that few of the advocates for free market or new economy type economic policies ever make an argument about why it is good for the average joe. It’s always couched in purely theoretical terms, often by a smarmy, smart alecky guy in a suit on TV who talks a good game of creative destruction but doesn’t appear to have any concern that it will affect him personally. Similarly for things like “creative class” policies and talent acquisition strategies. It’s pretty clear they are great for the people who are pushing them, for the creative elite and others like them, but how does it benefit everyone else?
People without college degrees in rural areas, small manufacturing cities or are urban areas never seem to directly factor into these equations. And I’m here to tell you that there is serious desperation time going on out there for people in many of these places. I grew up in a rural community with no money. My Indianapolis residence is in a primarily low income area. I’ve seen it up close. I know that for many folks in these places things are tight even when times are good. And there are a lot of people right now on the brink of losing everything. This economy is only bringing into relief what’s been going on in slow motion in many communities for a really long time. So when I see people like that meltdown guy at the Merc on You Tube I want to punch him in the mouth. He’s Exhibit A in what I’m talking about. That guy has no idea what tough times are. And while many of the folks out there watching on TV at home may not be that highly educated, may not have refined food palates or sophisticated cultural tastes, I can tell you this, they ain’t dumb. Richard Longworth said it best in his book when he noted that they are well aware that globalization’s winners never spend a minute thinking about its losers.
Hey, the poor we will always have with us. There will always be individual winners and losers. We’re never going to have perfect society. But we’ve got to have a true American commonwealth, one where we all believe we are basically in this thing together, with prosperity broadly shared and costs broadly borne. I believe we are failing on both of those fronts, which is not a recipe for a stable society.
What’s desperately needed today is a new approach to policy and positioning. We’ve got to find a way to promote policies that are rooted in sound economics (e.g., free trade) yet are infused with a progressive ethos and a true, genuine passion for the welfare of the average and not so well off Americans, not just the elite. People who are able to think hard about the very real challenges we face to which we don’t have all the answers yet, and can make the case for good policy through how it affects a broad base positively in a more tangible and real way than we are doing now.
I’m inspired for this by 19th century social reformer Henry George. He’s best known for his belief in land value taxation. But he was also one of the most passionate defenders of free trade and free markets out there. His book Protection or Free Trade is still one of the all time greats on the topic. However, unlike the vast bulk of free traders, he defended it based on how it benefitted the common man, showing how almost all trade restrictions of his day mostly benefitted the wealthy and robber barons at the expense of everyone else. I also continue to be inspired by socialist Eugene V. Debs. I’m no socialist, but I can appreciate anyone who acts with such genuine regard uplifting the rank and file.
This doesn’t mean we have to avoid unpleasant facts. Far from it. We have to be willing to tell the truth and deliver bad news. The small town is probably not coming back. Small manufacturing cities that are hoping for the next Honda plant to arrive probably hope in vain. Many places need to shrink significantly and people have to be willing to move in search of economic opportunity.
But I also think that there’s scope to think of new ways to link these traditional labor forces to jobs in the new economy. That is the subject of this posting. And we have to make the case to people in a very tangible in real way they can connect to about why they should support it. Sorry for such a long warm up.
Going back to our offshore situation, labor arbitrage is a big part of the equation. However, low cost labor isn’t always what it is cracked up to be. For one thing, as there has been a great surge of offshoring, this has unsurprisingly raised market pay for many of the jobs in the target countries. We’ll see what the economy does, but double digit wage inflation is a fact of life. Also, especially for many entry level type tasks in the BPO world such as call centers, finance and accounting processing, etc., we see in an offshore environment that despite cheap labor, there continue to be significant non-labor costs such as buildings. And there are a ton of intangible costs such as currency risk to manage, time zone challenges and the strain that puts on workers, uncertain political and legal environments, poor infrastructure, the high cost of physical transportation or telecommunications, the high cost of travel, etc. Add them up and these are substantial. So a domestic operation competiting in this environment does not need to pay the exact same wages to win the work. If it can eliminate many of these other costs and risks, it might be able to get away with paying a bit more for people.
Indeed, we are already seeing some pull back on offshoring, especially in the call center space. I’m sure some of this is a bit of cultural bias, but clearly the language issue and the fact that the people answering the phones sometimes don’t have any personal experience with the products and services they are supporting makes this legitimately frustrating. I know that both AT&T and Dell have pulled some call center ops back onshore for example. Also, I’ve seen other examples. IBM recently announced a center in Dubuque, Iowa that will employ 1,300 people, for example.
I believe the Midwest is well positioned to compete for these type of operations, particularly in the BPO space. Why? Low labor costs and low costs of doing business. While I don’t believe that the Midwest will ever be able to compete purely a race to the bottom in costs, clearly its relative position domestically here is a good thing. There are lots of places in the Midwest like Dubuque where people have deep roots and want to stay and so will probably be willing to work for relatively less pay if it means they don’t have to move. Let’s not overstate the case, since the South is also very cheap, indeed cheaper in some respects. But it certainly puts the Midwest in the game.
If I were a Midwest state, one of the strategies I would be working on is how to focus on luring BPO processing centers. Indeed, this might be one area for pan-Midwest collaboration in marketing the region as they place to do outsourcing on a domestic basis.
You might be wondering by now where Chicago fits into all this. The answer is that I believe that there may be opportunity for Chicago’s companies to take advantage of that re-created hierarchical subdivion of labor that I talked about in part one and extend it to the next level. This exploits one of the interesting things about Chicago, namely that the “cost gradient” plunges dramatically at the end of the Chicago metro area.
I would be interested in seeing academic research modeled on central place theory that tracked the cost of living, wages, cost of doing business or some other interesting metrics in various radiuses around the central point of various cities. This could be mapped into a 3D topology like one of Richard Florida’s “spike charts”. My hypothesis that I’d like to test is that Chicago has an extremely steep slope to this, and that indeed, once you hit the edge of the metro region, cost falls of the cliff. Where else can you go from relatively pricey (though still not bad compared to the coasts) operations in one of the world’s most elite global cities (Chicago) to the least expensive major city in America to live (Indianapolis) in just three hours by car? If there are some tasks to which there is some level of intermediate benefit between total face to face and total virtualization, then this cost gradient could be a source of competitive advantage for business in Chicago.
I will give one example. There is a Fortune 500 company in Chicago that has long maintained an F&A operations center in Danville, Illinois. This center provides very needed jobs for that community as well as allowing the company to operate at extremely competitive rates. (Presumably they would have offshored it by now if not). Danville is 2.5 hours from Chicago. This lets Chicago based and ops-center based management shuttle back and forth regulary at very low cost and low investment of time. It’s an easy day trip. So you get some of the benefits of the face to face interaction, such as in person relationship building and knowing first hand how things work while maintaining cost competitiveness. And your operations are time zone advantaged, there’s no currency risk, etc. A possible win-win for the Midwest?
Again, it’s a hypothesis to test and an idea to try, but not a guarantee. I can see why it has some prima facie reason for success however.
What I described was what you might call a “two tier” model, with a Chicago hub and a satellite elsewhere. I can see some of this, but it is probably restricted to places within 3.5 to 4 hours drive. Another model is what I call the “three tier” model, and involves extending the hierarchical subdivision I talked about earlier to another level.
The idea I gave was in legal services where a Chicago firm would take the lead and do the orchestration and most complex work, while regional firms in Milwaukee or Indianapolis handled some more routine components of the work at a much lower price point, enabling the combined team to offer a lower blended rate to the client. This generalizes to “most high value, complex work in the Chicago Loop where the high costs are justified; lower-value but still work requiring significant creativity and skill done in a secondary market; with face to face interaction providing advantages and enabled by high speed rail.” The high speed rail part is conceivably secondary for Milwaukee and Indy, where day trips by car are feasibly if unpleasant, but it is probably a requirement elsewhere unless air service radically changes.
The extension of the model goes something like this. You add in a BPO center in a smaller satellite city within commute distance of the secondary city like Milwaukee or Indy. This could either be directly a two-tier arragement with that city, or part of a three tier arrangement with Chicago.
Again, I’ll use Indianapolis as an example. It’s conveniently ringed with small manfacturing cities that are hurting but are nevertheless within commuting distance. Imagine a company based in Chicago or with a Midwest HQ there. It also has an Indianapolis operation that services the local Indiana market and also does some of the high skill but lower value added work I mentioned previously. And there is some type of BPO operation – call center, HR, F&A, etc – in, say, Anderson, a small manufacturing city that has been hard it by the decline of the auto industry.
Now, Anderson is a very low cost place to do business. There are a lot of people who live there and love it and don’t want to leave. So the jobs would be welcome. However, some of the management positions might involve recruiting people from outside the community with specialized skills. As we know, people with that profile today more often prefer a major urban environment, which is why we see such differentials in educational attainment between these types of places. The beauty of Anderson, however, is that these management recruits can easily live in suburban Fishers or even the city of Indianapolis and commute to Anderson. Indeed, I know people who do it today. This gives Anderson an ability to tap into that management talent for the facility in a way that a more remote city far from a metro area would not. I saw previously some comments from leaders in Anderson that they were unhappy that some employees at a new local Nestle plant had chosen to live in Fishers. But the proximity to Fishers is a source of advantage, not of loss. Anderson can potentially attract employers partially because the workers have access to a more suburban environment if that is what they want. It broadens the potential labor pool and makes Anderson more attractive as a location.
So now you’ve got your HQ and top value added in Chicago. You’ve got secondary ops in Indy. And tertiary ops in Anderson. People can regularly travel back and forth between Indy and Chicago (via HSR, plane, or car) for the important face to face interaction. Plus, the Indy office can oversee the BPO operations in Anderson, and provide the urban environment that allows you to recruit specialized management talent to that facility. The BPO center management can travel to or stay in Indy easily to meet with people from the HQ operation. So it is very easy for people for all three people to get together in person at low cost.
If, and this is a big if, that geographic proximity and potential for frequent but not daily face to face interaction means something, this could give Chicago a competitive advantage through a cost structure, access to talent, and organizational simplification that you can’t get elsewhere. Plus, of course, Indy and Anderson both benefit too. That’s the key, to me, and why I would love to be able to see something like this work. It links the fortunes of the knowledge workers in the global city of Chicago with those of the knowledge workers in the regional city of Indianapolis and the people working in BPO centers in Anderson.
This is the linkage we need to be able to draw for people. Even without this hierarchical relationship, we can give some examples. I will pick one. Medco is locating America’s largest mail order pharmacy facility in Whitestown, Indiana outside of Indianapolis. Why did this company locate there? Two reasons were cited in the paper as to why Indy got the facility. One was it’s ability to accommodate the required regulatory changes rapidly. Two was the fact that Medco thought Indianapolis wasn’t just a cheap place to locate, but had a fun downtown where Medco could bring customers and entertain them at night after giving them tours of the facility during the day.
If you think about an operation like Medco, it will employ a lot of six figure pharamcists. You need to be in a major metro for that. But for every pharmacist, there are also lots of other technician jobs that carry decent wages but are accessible to people with a basic education. The pharamcists in Whitestown might mostly choose to live in Boone County or closer into the city. But I can see the technician jobs – and shipping/receiving and other jobs – appealing to people in a broad radius of the facility, often into areas where people need work badly.
That’s the link – and why it is important not just for the fortunate few but for the whole greater Central Indiana community that the Indianapolis life sciences strategy succeed, that the city succeed in luring the highly educated, and that the urban core prosper. Many people see swanky steakhouses downtown and wonder why the ability to wine and dine fat cat corporate executives is important. Well, if you are a single mother with a high school education in Clinton County and can get a good job as a technician at Medco, it matters to you. Now clearly Medco will be a highly automated facility and I don’t know how many non-pharmacist jobs there will be. But with a reported average salary of $53,000, that’s probably a leverage ratio of 3 or 4 to one.
Now of course none of this might work in real life. I’m just thinking out loud and throwing out ideas. However, it is notable that Business Week magazine just listed Indianapolis as one of 21 hot spots for outsourcing, one of only ten in the Americas, along with places like Curitiba and Buenos Aires.
So how would we action this? Good question. One way would be for various Chicago corporate networking or trade associations to hold discussions on the possibilities with their counterparts in secondary markets, academics, and economic development people from the states. Yes, this might be one of those conferences I like to make fun of at times. Explore the issue and see if there is a way to make it work. One way for states to promote it is through requiring “offsets” as part of government contracts that focus on this area. Indiana again provides an example here. When the state privatized FSSA operations, IBM agreed to create a 500 person call center in Delaware County.
Again, to me the real advantage somes not from just having some centers here and there with jobs because the Midwest is cheap. It is about exploiting the cost gradient and finding niches where you can have jobs that aren’t in the Loop, but nevertheless benefit from frequent though not daily face to face interaction. The potential for using high speed rail to enable this is an interesting thought, but potentially it could work for closer in places like Milwaukee and Indianapolis without it. The idea is to create a structural competitive advantage through exploiting this for Chicago and its “ecosystem” of nearby cities in a reinvigorated hierarchical subdivision of work.
As always, I welcome your reactions. My goal is to provoke thought and discussion.
My final installment will focus on one of the interesting implications of labor arbitrage as a value creation strategy and how it opens the door for a competitive response based on innovation.