Tuesday, May 31st, 2011
I want to invite all of my readers in greater Indianapolis to join me next Monday night, June 6th, for a farewell happy hour at Scotty’s Brewhouse downtown. I am planning to be there from 5:30p-8:30p so come on down! Shoot me a note if you are planning to come.
With a move forthcoming, I wanted to make sure to have a chance to reconnect (or connect for the first time) with my Indy readers. Already now that I’ve gone carless, I’m rarely in Indy. Other than for a brief professional trip at the end of the month, this could be my last visit for a long while. I feel bad that I didn’t do something when I actually left Indy, so this is also my make up event for that.
It’s no secret that the Urbanophile started out as a heavily Indianapolis-centric blog. In fact, the blog has its roots in the Indianapolis development discussion forum at Skyscrapercity. I am often accused of being an Indianapolis cheerleader and booster. I’d like to think I’ve thrown plenty of pies in Indy’s face where warranted (see here and here for example), but nevertheless, I guess you can say guilty as charged. I do love the city.
This puzzles many because to the outside urban enthusiast, Indianapolis is a singularly unimpressive city. Even its urban core is among the least dense in America, with mostly single family homes and few urban commercial districts. It has only the 99th largest bus system in America. Its architecture is generally undistinguished. It is dominated by chain restaurants. Much of its urban design quality is very low. The list goes on.
But over the years I’ve come to appreciate that Indianapolis may be the worst city in the Midwest – except for all the rest. All of those things might be true. This is a city that has no stately form or majesty – no appearance that we should be attracted to it. In other places, those are what define the urban greatness of the place. But they are not wherein Indy’s greatness resides.
Instead of a lively cafe culture with all those serendipitous meetings we always here about in Portland or where ever, in Indy that social life occurs in people’s back yards or homes. That doesn’t make it any less real. I know because I’ve experienced it for myself.
While Indy’s culture might lack sophistication by the definition of some, it’s got a quality about it few other cities can match. Other cities might have more talk and plans for stuff, but Indianapolis actually accomplishes things. And it’s far more forward thinking than you might think. That’s why from the city-county consolidation and amateur sports strategy 40 years ago to the Indy Cultural Trail, roundabouts in suburban Carmel, and much more today, Indianapolis has in fact often been not just a good executor of best practices, but in many ways an innovator and urban leader. I don’t think it’s any accident that my blog started in Indianapolis and grew to what it is.
There are probably few cities, and certainly no Midwest cities, that have done more with less raw assets than Indianapolis has. So regardless of what many might think, I believe there’s a real story to be told – and it’s backed up by the numbers. The fastest population growth in the region among peers, the fastest job growth, the #3 fastest percentage growth in Hispanic population among all large US metros, the #5 fastest percentage Asian growth, the #6 best state for business according to Chief Executive magazine, etc. While this is a city and region with huge challenges, I think the results speak well for themselves.
I think for those who come without a preconceived notion of what a great and thriving city ought to look like, there’s a lot of goodness to be discovered in Indianapolis. It’s not for everybody. But for a lot of people, it really is a great city I’m proud to have lived in and blogged about. Get to know the city at more than the surface level and you’ll come to say about your time there what I do – “O welche Lust!”
So for those of my readers in Indianapolis, please come on down next Monday night. Since it’s a Monday, you know you don’t have plans. It would be great to be able to see everybody. Hope you can make it.
Thursday, May 26th, 2011
My latest post is up over at New Geography. It is called Out of the Loop and deals with what I consider a fundamental challenge for Chicago and Illinois, namely that while the greater Loop economy is booming and is everything most of its boosters claim it to be, it still isn’t big enough to carry the city, region, and state on its back.
Since I do a Chicago vs. New York comparison, some of you might be thinking I just want to kick Chicago to validate my decision to move, but actually this one has been sitting in my queue for a long time and I just never wrote it. I was prompted to finally finish it off by some recent conversations I had with various folks around where the city is at the changing of the guard at City Hall.
Anyhow, my view is that we have to focus on creating a more broad based positive business climate in Illinois so that non-Loop businesses, and particularly home grown small and medium sized businesses, can really thrive and add the payroll (and pay the taxes) we need to be fiscally sustainable. Your views are of course always welcome.
In other Chicago news, GE Capital announced that it is bringing 1,000 new jobs downtown. Apparently they are all new and without subsidies. That’s a great coup for Rahm as he comes into office. And more evidence that the Loop economy really is working.
Also, some of you may have seen this Tribune article on the managed competition plank in Rahm’s reinventing government initiative. In it I raise the question of clout influencing the contracting. Let’s be real, in this town that’s always a risk. But to be very clear, I’m a big supporter of this idea and think Rahm should go full steam ahead on it. There’s no reason government has to do everything in house – especially not when there are multiple qualified bidders in the marketplace ready to step up and compete for the work. Which is not to say that the existing workers, freed from many of the rules they operate under, might not be able to put forth a compelling bid of their own. The article did note that I support the idea, but I want to stress it again because I know some think I’m an opponent of these sorts of deals when I am most certainly not.
And part two:
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.
Sunday, May 22nd, 2011
[ I want to preface this post with an off-topic request for help. I’m trying to get an RSS feed set up to do podcast integration with the Apple iTunes Music Store and am having trouble getting cover art to work. If there’s anyone out there who is a guru at this, I’d appreciate assistance so please email me. Thanks. ]
Indianapolis has long chafed under the memory of being mocked by out of towners and bigger markets as “India-no-place” or “Naptown”.
As with many nicknames, the actual origin of the term “Naptown” is in dispute. It has variously been attributed as an insult implying a sleepy, boring town; coming from call letters of WNAP radio; or originating in 1920’s jazz from the so-called “Naptown sound”. Given that the “nap” syllable occurs in the long Indianapolis, a short form or diminutive is implied.
Whatever the case, the word Naptown has long had negative connotations in certain circles locally (though I find it unlikely that Naptown as an insult ever had wide currency outside of Indy itself given that few would have cared even to insult the place back in those days). Civic leaders and citizens take pride in the city’s transformation and clearly believe, with great justification, that Indianapolis has significantly transcended its sleepy past. So the “Naptown” label is part of the old baggage they want to jettison.
While it may seem difficult to believe, the nickname Naptown is actually one of the strongest potential brand assets of Indianapolis. It is a short, easy to remember and pronounce name that is readily associated specifically with the city. Unlike India-no-place is it not categorically pejorative. Indeed, one would have to think about it quite a bit to derive an insulting meaning from Naptown. The word nap does mean a brief sleep, but it also refers to yarn. The related adjective “nappy” means “twisted”, which can have a positive, edgy, cool connotation.
Even if Naptown were in insult, many nicknames start out as diminutives or insults but ultimately become terms of affection. In Chicago, the term “Second City” is hardly positive, nor is “Windy City”, which ostensibly referred to windbag city boosters. Many other nicknames would appear not to be positive and even only tenuously connected to the place they refer to. Consider “the Big Apple” or “Beantown”.
Rather than shunned, Naptown should be embraced and promoted as a nickname for the city. Like the others discussed, Naptown is easy to connect to Indianapolis and can easily be imbued with positive connotations, implying a cool, urban, edgy vibe. Think Naptown Roller Girls and you’ve got the right idea.
One challenge is that there is still significant negativity around this name. However, much of it may be generational. Older generations who remember the city’s nadir think of it one way. Younger generations who’ve only known a rising Indianapolis think of it another. Indeed, younger generations are already embracing it. Google reports over 500,000 web pages referring to Naptown. There are over 350 Facebook groups with the name “Naptown” in them, many of them African American themed.
To a great extent the positive or negative associations around a name having nothing to do with the name itself, but rather with feelings about the thing the name represents. In a sense, Naptown in a negative sense is simply a symbol of the old Indianapolis. Naptown in a positive sense can be a symbol of the new. One might even argue that it will be possible to know when Indianapolis has truly come of age and changed its brand when both it and others refer to Naptown in a reflexively neutral to positive way.
One of the gaps in the Indianapolis brand is any sense of what to call residents. What do you call someone from Indianapolis? Hoosier is the only name that comes to mind. While it is good to be associated with Indiana and have a strong cultural linkage to the state as a whole, having some Indianapolis-specific name for the city’s residents would be a plus.
Naptown does not obviously solve this problem as terms you might derive from it are not obviously strong. But it does create a potentially powerful word in Spanish: napteños. This is a common Spanish phraseology. For example, residents of Buenos Aires are called “porteños” (port city dwellers) and those from Madrid “madrileños”. If the word napteños were embraced by the city’s Latino community, it would be a fitting tribute indeed to the transformed and global Indianapolis we know today.
This column originally appeared in the Indianapolis Business Journal.
Thursday, May 19th, 2011
You hear tons of complaints out there about the dysfunctional political dynamic between the two parties in Washington. Toxic politics are indeed a problem, but it seems to me that there’s a more serious issue around the lack of a moderate ground substantively and a lack of commitment to the actual business of government.
If you’ll indulge me in an overly broad generalization, we seem to have a Democratic party that thinks more spending is the answer to all our problems, regardless of how well it is spent or how big the deficit is. I’ve got news for them, financial doomsday approaches. And there seems to be much more interest in recycling tax dollars into the hands of favored interest groups rather than actual results.
On the other hand Republicans today seem all about just “cut, cut, cut.” The political beauty for them in saying that government is the problem and is inherently poor at whatever it does is that it relieves them of any actual responsibility for having to operate the ship. Why bother even trying when it’s hopeless? So too many of them don’t. In fact, some Republicans are actually invested in the failure of government, because if it succeeded at something that would undermine their whole argument.
Though again I exaggerate for effect, I think Americans have a right to be fed up.
I think there’s room for a broad range of policy choices that span the political spectrum. While national policy requires some level of national uniformity, no one approach is going to be right for everywhere. And so there’s plenty of room for different strategies at the state and local level. The more diversity of places we have, the better in my opinion.
But whatever your choice, what we desperately need to have is leadership in both taking political stands on tough choices, and also focusing on the blocking and tackling of actually delivering the public services. This goes beyond just spending money to actual execution. Government has to be more than just a fiscal machine where the only argument is over what setting it is on.
There are some great examples out there of people doing this. Gov. Mitch “The Blade” Daniels of Indiana has laid out a conservative vision for his state that involves fairly minimalistic government. And he’s focused on getting there, as he’s cut the number of state employees to the lowest levels since the 70’s. But he also believes government needs to do some things, and the things it does it needs to do well.
Building infrastructure is one of them. Daniels privatized the Indiana Toll Road and took the nearly $4 billion and pumped it right back into roads. What’s more, INDOT has really accelerated a lot of its normal schedules to try to get these projects done more quickly, and do a lot to reduce the cost of projects without compromising too much on quality. He also installed a new computer system at the BMV that reduced wait times dramatically and resulted in major customer satisfaction improvements. He’s also been relentless at looking for fat to cut, including even such mundane items as scrutinizing the vehicle fleet. Though it seems odd to others, one of his most daring moves was standing firm that Indiana should observe daylight saving time, something lots of governors took a run at but failed. He implemented an extremely ambitious property tax reform scheme that saw that state take over 100% of operational funding for education. So this was not only a good tax move for localities, it put Indiana on the forefront of progressivism on this issue. Daniels also undertook a bold privatization of the state’s welfare system that didn’t work out. But after giving it a try, he decided to pull the plug on it. While that didn’t work out, my philosophy is that if don’t fail at something, your agenda was probably nowhere near ambitious enough. These are only a sample of the things he’s done or is trying hard to do before he leaves office.
Meanwhile, over in New York, Mike Bloomberg has been taking his job similarly seriously. He was elected as a nominal Republican but is clearly a moderate Democrat at heart. He took heat in some quarters for saying New York was a “luxury city.” But this is simply a clear-eyed businessman taking a look at the strategic situation and figuring out what his city’s niche is in the marketplace. And he responded accordingly.
He hired Janette Sadik-Khan as transportation commissioner and gave her the political air cover she needed to implement America’s boldest urban transportation agenda. (See here, here, here, and here). He put in place the PlaNYC comprehensive plan aiming to make New York “the greatest, greenest city in the world.” He brought in former Indianapolis mayor and Harvard government school prof Steve Goldsmith as deputy mayor. Goldsmith is a moderate Republican that is a serious wonk on policy, but also similarly relentless in execution as he proved in his own stint as mayor. He’s already bringing tons of efficiency ideas to the table, such as his recent plan to jettison tons of excess city real estate. Bloomberg seized control of the public schools, significantly boosted funding, and has been strongly pushing reform. Again showing leadership, he went to bat for new schools chief to replace Joel Klein, but when that person didn’t work out, he wasn’t afraid to take the heat and change horses. He’s pushed to put needed policies in place like congestion tolling, despite an obstinate Albany. He implemented a local tax increase pro-actively before a fiscal maelstrom hit the city, which was unpopular at the time but has enabled New York to manage its budget in these tight times without draconian cuts. Again, the list goes on.
I’ll be very clear that for me I think all this has created a more inspiring urban environment, and one where the urbanist future is happening today. That’s a big part of why I personally am going to move there.
Daniels and Bloomberg are extremely different in their points of view. So this isn’t intended to endorse any particular policy. But it illustrates how when you make a serious policy choice not rooted in some reflexive partisan dogma, then focus on executing it through courageous leadership and hard work coupled with pragmatism, you can really move the needle and differentiate your state or city.
Both Indiana and New York City have done far, far better than their peers during this recession. And this type of quality leadership is a big reason why. I could cite many other examples from around the country. I don’t want to suggest these are the only people doing it, but unfortunately this model has proven the exception rather than the rule. If we really want to renew our cities and restore real prosperity to America, we need a lot more like it and soon.
Tuesday, May 17th, 2011
It would seem impossible for Midwestern states to get any sillier and more irrelevant, but they're trying. In a time of continuing recession and joblessness, with crunching budget problems, failing schools, crumbling infrastructure and no real future in sight, these states have decided to solve their problems by stealing jobs from each other.
The most recent example is the so-called "border war" between Kansas and Missouri, as the two states compete to see how much money they can throw at businesses to move from one state to the other. The focus of this war is Kansas City — both the Kansas one and the Missouri one, basically a single urban area divided not only by an invisible line down the middle of a street but by a mindless hostility that keeps its two parts from working together.
This competition is not new, but it seems to have heated up since 2009, when Kansas passed a law that lets companies relocating to the state keep 95 percent of their employee withholding tax for up to 10 years. This has lured several companies to move from Kansas City, Missouri, to Kansas City, Kansas (known locally as KCK) and its suburbs, bringing several hundred jobs with them. Stung by the moves, the Missouri KC has offered multi-million-dollar packages to keep firms, like the National Association of Insurance Commissioners and AMC Entertainment, from decamping to the Kansas side.
Top Corporate Leaders Urge Governors to Stop Poaching Neighbors’ Businesses, Kansas City Star, April 11, 2011
Businesses Stand to Gain Most in Rivalry of States, New York Times, April 7, 2011
Kansas and Missouri aren't the only Midwestern states raiding each other's watermelon patches. The governors of Wisconsin, Illinois and Indiana, which would seem to share a common economy, have been squabbling over which state has the lowest taxes, to the point that Indiana and Wisconsin have posted billboards on their state lines urging Illinois companies to flee north or east, as the case may be (presumably passing en route all those Democratic legislators from Indiana and Wisconsin who hid out in Illinois to avoid having to vote for objectionable legislation back home.)
In Kansas and Missouri, all this has reached the point that even businesses in the two KCs, which presumably could benefit from these bribes, have told their two states to grow up. Seventeen leading businessmen from both sides of the border sent an open letter to Kansas Gov. Sam Brownback and Missouri Gov. Jay Nixon, urging them to voluntarily "agree to a bilateral halt" in this "economic border war."
Nixon responded positively. Brownback basically told the businessmen to go jump in the Missouri River. This probably has something to do with the fact that, so far, Kansas has been winning most of these battles. Whatever the reason, Brownback's press secretary said Kansas would keep on poaching, because the state "needs to compete and win against 49 other states plus Europe, India, China and the rest of the world."
Well, no argument there. Except competition with "Europe, India, China and the rest of the world" has nothing to do with this juvenile job-raiding. In fact, this "border war" keeps Missouri and Kansas from competing globally — indeed, robs them of the tools they need to compete globally.
Some rational thought shows why. It's precisely these states' inability to compete globally that causes them to declare war on the folks next door.
In a global economy, Kansas and Missouri aren't competing with each other, any more than Illinois, Indiana and Wisconsin are competing with each other. The real competition is 10,000 miles away and all Midwesterners know that we're losing it. The region — not just the individual cities and states but the entire region — is losing companies, manufacturing, jobs, people, congressional seats and college grads, which means they're losing the resources needed to compete in a global economy.
Clearly, what the Midwestern states are doing isn't working. You'd think they'd do what the Europeans, Indians, Chinese and other competitors are doing, which is to form regional alliances to leverage all their strengths, to maximize their economies of scale, to merge their assets in to a single world-beating economy. On a global scale, Midwestern states are tiny: there are more than 30 Chinese cities with more people than there are in all of Kansas. But as a region, the Midwest has more than 60 million people which, even on a global scale, counts for something.
But this involves political initiative. It also involves spending on education. It requires the sort of imagination necessary to recognize that the old ways don't work and a new approach — to economic development and job creation — is needed.
But governors seemingly don't get paid for imagination and, these days, they're avoiding all the spending they can. Especially, they don't get paid for anything that benefits the states next door. By mandate, they are geography-bound, forced to limit all thinking and action within their state lines. Any business they can steal from next door looks good to their voters, whether it makes sense or not. Their economic development people, who know from hard experience that this is insane, go along, because the governor signs their paychecks and, as one official told me, "governors just love to cut ribbons."
One reason this doesn't work is that poaching businesses involves giving tax breaks to the poachee. Right now, states aren't spending on the future because they're broke, and one reason they're broke is that they're giving away badly-needed tax money. The letter from the Kansas City businessmen made this point clearly:
"At a time of severe fiscal constraint, the effect to the states is that one state loses tax revenue while the other forgives it. The states are being pitted against each other and the only real winner is the business who is 'incentive shopping' to reduce costs. The losers are the taxpayers who must provide services to those who are not paying for them."
Neither does this poaching usually create new jobs. Most of these cross-border raids, in Kansas-Missouri and in other states, involve companies just moving a few miles away across the state line — usually so close that their workforce changes not at all. People just commute in different directions. The overall impact on job totals, incomes and economic gain in the region itself is absolutely nil.
Only one person gains if a business crosses the state line, and that's the "winning" governor, who gets to claim short-term job growth on his turf during his tenure. This, of course, is why this practice continues. The payoff to the governor is immediate and gives him a boost in his next campaign. Really creating jobs in the region and restoring genuine economic growth is a long-term project that spans many gubernatorial terms and, hence, holds no charm for the incumbent of the day.
The state governments and governors, like Brownback, claim that these tax lures are necessary to draw in companies not from next door but from far-away states. If so, they aren't working. A University of Illinois study showed that there are some 300 significant corporate relocations in the United States every year, and about 15,000 different economic development organizations — state, county and local — competing for them. In other words, the odds against success are fifty-to-one. No wonder states go for a quick and dirty kidnapping across the state line.
Even when truly new investment takes place, such as the building of a Japanese car factory in the United States, the states let themselves be played for suckers. State economic development officials tell me that the company, such as Honda or BMW, simply announces that it intends to set up a new assembly plant somewhere in the Midwest. Then the company just sits back and watches the states throw money at them, trying to outbid each other with tax holidays, free land, training subsidies and other lavish gifts.
All the states know this goes on. All know they could stop it in an instant by banding together and refusing to play the game. But all are so jealous of each other, and all governors are so anxious to cut that ribbon, that they just can't help themselves.
Mark Drabenstott, in his Heartland Paper for the Global Midwest Initiative, Past Silos and Smokestacks, wrote that these recruiting incentives and other bribes account for no less than 80 percent of economic development budgets in the twelve Midwestern states. That leaves virtually no money left over for approaches that might really work.
Every economic development professional knows that this adds nothing to the Midwest's long-term growth or its ability to compete globally with China and other rising nations. The only true solution is to create truly new companies and industries by building them from the ground up — by investing in local education, encouraging local entrepreneurs, setting up incubators, growing business services, increasing venture capital.
This is called economic gardening, and it works. It means working regionally. It means spending money, not giving it away in tax breaks. It means planting seeds now, knowing they won't sprout until some other governor is in office.
Right now, Midwestern governors are competing not with China but with each other to see how much they can slash spending in the next few months while stealing jobs from the next state. It's easier. It makes a better headline. And it's useless.
Richard C. Longworth is a Senior Fellow at The Chicago Council on Global Affairs. He is the author of Caught in the Middle: America’s Heartland in the Age of Globalism.
This post originally appeared in The Midwesterner on April 15, 2011.
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.
Wednesday, April 6th, 2011
Here’s another super-cool city video. This one is a series of photos combined into a time lapse video with nice music. It’s about Paris and is only two minutes so definitely worth a watch. (If the video doesn’t display, click here).
Of course, it is very much like the similarly awesome You’ve Got to Love London.
Monday, April 4th, 2011
Aaron Renn’s March 24 posting on “The Logic of Failure” and his reference to “silver bullet” solutions for redevelopment and revitalization reminded me of my visit to the “Creative Cities Summit”, about revitalizing cities, three years ago this fall. The setting, timing and venue could not have been better, at least in terms of provoking thought about how to do things better.
The setting was Detroit, the time was October, 2008, when the financial markets were crumbling, and the venue was Renaissance Center (“RenCen”), the Robocop-like mixed use center that is headquarters for General Motors. I flew in the night before and opened my door that morning to a newspaper lying in the corridor on which the top headline read “GM in Merger Talks With Chrysler”. This was the beginning of the end as the auto industry had known it for the last 100 years, and those very same corporate managers were coming to work 30 floors above me.
This was my first trip to Detroit, so I decided to take a quick ride on the People Mover to see the city. With a station attached to RenCen, this automated system took me on a loop around the city, on elevated tracks 20 feet above street level, without my having to set foot on the street.
The first thing I was conscious of was that this was supposed to be rush hour and no one else was on the people mover. For that matter, there were few people on the streets. Some cars streamed off the freeway and almost directly into the RenCen parking garages, but not many, and even fewer people were out walking.
Most of the buildings between the stops also seemed to be empty. Most of were of the same pre-WW II vintage and quality as those on North Michigan Avenue in Chicago and in Mid-town in Manhattan, but there was no one in them. It was like an old Star Trek or Twilight Zone episode in which something has happened and the population has disappeared.
I gradually became aware that many of the stops were at Sim-city like attractions – the kind you are allowed to build when your city gets to a certain size- such as the convention center, an arena, a baseball park, a football stadium, and a casino. Each of these must have taken hundreds of millions of dollars to build. I thought, “They’ve been spinning the roulette wheel, hoping to get the tourists and suburbanites back into the city”. But what had the city fathers done for the residents themselves? Later I was to walk through Campus Martius, a center city park that people take considerable pride in, but even in the middle of the day it was largely empty. On the last day of my trip I walked up Woodward Avenue, the grand street at the center of the city that used to be the main place where people shopped. The buildings on one side were largely empty. The buildings on much of the other side were simply gone, some torn down for underground parking garages that were to be the new base of new office buildings to be built by private developers. These office buildings didn’t materialize.
After this trip I began to compile a list of the “silver bullet” solutions, of redevelopment projects that city leaders have put in place in various places across the U.S. over the last sixty years like those I saw in Detroit, and that I present here. Early in my career I prepared marketing and feasibility studies for these things, so I knew there would be a number of different kinds, but I was still surprised at their number when I stopped counting. Like Baskin Robbins, there are 31 flavors on the list, and it would be easy to add to it.
Graphic by Carl Wohlt from an original chart and information by Rod Stevens/Spinnaker Strategies. Please do not re-use without attribution.
I have divided these into three kinds of projects: business, retail and tourism, and transportation. The bars show the decades they span, from the 1950s through the 2000s, with the earliest kinds of projects shown first. Expos, first on the list, actually started with the Crystal Palace and the Great Exhibition in England in 1851, which later inspired Chicago’s “White City”, but my time frame here starts after WW II, when American cities began to consciously redevelop themselves in the face of suburban competition. For each kind of project I have also included an example and the year that example opened. The examples were not always the first built, but they inspired others to follow. For example, the Ontario Science Centre came before the Exploratorium as a modern, hands-on science center, but it was the Exploratorium that most of the other centers in the U.S. looked to as an example. San Diego’s Horton Plaza was not the first downtown mall, but it excited a lot of talk in the world of urban development.
Notice that the largest category is retail and tourism. If you really looked behind the rationale for most of these projects, you would find that most were in fact aimed at tourists or at suburban shoppers who had fled the city. The grand-daddy of all redevelopment projects is Ghirardelli Square, which remains vital to this day, although the upper floors have now gone condo for rich people who want to keep a place to stay in the city. Ghirardelli inspired the festival marketplaces of the 1980’s, many built by the Rouse Company, and many of which are now struggling. These later morphed into the food halls inspired by Granville Island in Vancouver and the Pike Place Market in Seattle, and, more recently, the market halls or sheds for farmers markets that have recently begun to show up. Notice the trend here for an ever-more-local clientele. Partly this is due to retail trends. When Ghirardelli first opened, it was filled with unusual boutiques selling clothing and glasses not found in the malls. Today you can buy these things at suburban “town centers”, where chains like Crate and Barrel keep a good selection of wine glasses and linens.
There is almost a flavor-of-the-month approach for transportation as well, which really started with the downtown connector freeways aimed at whisking shoppers to ailing main streets. More and more cities are now tearing out these freeways and converting the space to parkland. What’s more interesting is the evolution in rail, from heavy systems like BART and the DC Metro, to light rail in places like San Diego, to the current passion for street cars. Transportation is becoming lighter than air, and now this is even an urban gondola in Portland, with Vancouver planning a second on Burnaby Mountain. Years ago Disneyland had one of these, for frenetic visitors eager to punch all of their E tickets.
Notice how few kinds of business-related projects there have been. Science parks, which started with Stanford and the Research Triangle, have mostly been in the suburbs, but a few are in the city, such as Yale’s Science Park, and more are on the drawing boards. Carnegie Mellon’s Collaborative Innovation Center may be the best example of integrating academia, industry and the city, for here private sector tenants come together on a campus in the middle of a very urban city.
Notice just how briefly projects like Renaissance Center were popular. John Portman, an Atlanta architect, designed the most prominent of these, including not only Renaissance Center but the Hyatt Regency/ Embarcadero complex in San Francisco (which is connected with sky bridges), Peachtree Center in Atlanta, and the Bonaventure Hotel in downtown L.A. At the time these were the wonder of their cities, and tourists came in to gaze upward at the atriums and light-bedecked elevators that moved through these. They almost all included office buildings, hotels, and mini-shopping malls, and almost never housing. Many of these were introverted, arrived at by car in special drop-off lanes, with the pedestrian entrances being hard to find. Few or no lobby windows faced out onto the street. At Embarcadero Center in San Francisco, the main level of pedestrian activity is one floor above the street. and for about 20 years it had a thriving trade of office workers from nearby buildings eating and shopping there at noon. Now most of that lunchtime activity is out walking along the Bay, on the true Embarcadero, or eating in the Ferry Building next to it.
And then there are the truly wacky projects, which may or may not work in their own right. Projects like the automated people movers in Detroit, Miami, and Morgantown, West Virginia. The canal in Oklahoma City’s Bricktown “entertainment” district. And the submarines and battleships, like such as a submarine in the prairie land of Muscogee, Oklahoma and the dreadnaught Olympia at Penn’s Landing in Philadelphia. The Olympia ship may be headed to the scrap heap, for lack of support and visitation and Penn’s Landing has struggled because of its isolation. Fish don’t shop.
Why is it that these projects work in one place and not in others? And why is that Portland has pioneered so many of these projects? I believe the answers are related, and having grown up in Portland, with a family that was involved in creating some of these solutions, I can offer some insight.
Aaron Renn uses the term “silver bullet”, and that is exactly why many cities copy other cities’ solutions: they hope these will magically solve their problems. But as Aaron points out, these other cities frequently fail to adequately define what problem they are trying to solve, and what their priorities are. The approach that works well in one city for one set of challenges will not work well for a different set.
But why has Portland been so successful? I believe there are three reasons: 1) crises and political turnover that opened the community up to questioning and new leadership; 2) a growing facility with problem definition and problem solving; and 3) the attraction of “outsiders” who joined the community and brought fresh new approaches and energy.
Without getting into too much detail, the political crises included a revolt and mobilization of the citizenry in the 1960s, when private interests tried to take over the public beaches. Never before had the legislature seen so many private citizens flood its conference rooms, and this led to other conservation measures like the bottle bill, land use planning and the Willamette River Greenway. This activism, growing at the same time as Vietnam War and Watergate, brought a new generation to power in the early 1970’s, including Neil Goldschmidt, who pushed forward light rail system when citizens revolted against more freeways. And the final event was a very, very deep recession in the early 1980s, when most of the major timber companies closed shop or left town, leaving behind a vacuum of power in which it was easier to make broad-based decisions. Oregon’s growing environmental reputation and the easier entry into the circles of power drew in like-minded people from throughout the country, and some of these people helped push the city in new ways.
Most importantly for Portland, and perhaps for other cities, the community got better at problem solving, at not simply reaching for off-the-shelf solutions. In the 1970s, relatively strong retail, on the street downtown, led the community to reject a multi-block retail project connected by sky bridges that was proposed by Canadian developers. That first light rail line took care of a transportation need when citizens said no to a freeway that would have wiped out miles of neighborhoods. “Fareless Square”, downtown, was a response to federal air pollution rules that made it tough to build new parking garages. The streetcar that opened in 2001 simply connected an already-strong downtown with Northwest Portland, a strong residential neighborhood that is the densest in the state. Portland has had its failures and misspent money – the Rouse project is now ailing and the extension of the transit mall has killed retail along its length- but its successes come because they are rooted in local needs.
Hopefully this trend is developing nationally. The failed Rouse project in Milwaukee, aimed at drawing tourists back into the city, is now re-oriented to more local shoppers, largely because Mayor John Norquist would not give it more subsidies. Money is flowing out of big downtown projects and into more neighborhood-based retail projects, like those sheds and squares for farmers’ markets. And we are putting more of an emphasis on “productivity” projects, aimed at creating good places to work, and fewer on the “consumption” side, retail and housing. More cities are realizing that great places draw good talent, and that they need to focus on the work side if they are going to participate in the modern knowledge economy. Already we are seeing more collaboration between the city and the universities, and while much of this new development still takes place within the walls of the campus, in some places like downtown Phoenix, where the new Arizona State University campus has opened, the city and the university are one, without walls. It will be in leveraging the talents of our people, and our anchor institutions, that we do our best problem solving, and create the most interesting and durable of places.
Rod Stevens is a business development consultant on Bainbridge Island WA, specializing in urban ventures.
Tuesday, March 29th, 2011
[ I’m extremely delighted to be able to begin sharing today a series of posts that previously appeared in the Where blog. This blog, which ran from 2007 to 2010, was one of the single most inspiring urbanist sites on the web. Originally a project of Brendan Crain, it grew into a very popular group site before going the way of all blogs. I’ve previously shared some material from Where contributor Drew Austin, and I’m stoked that Brendan himself has allowed me to re-post some of his pieces as well. They certainly deserve to be read far and wide. Brendan himself is not blogging at the moment that I’m aware of, but some of his old Where contributors are still going over at Polis, which is definitely worth checking out for an international take on cities. Thanks so much to Brendan and I hope you all enjoy these posts that will appear in the coming weeks and months. – Aaron ]
As the city that has fallen on the hardest times (in America, at least), Detroit has the most potential as a proving ground for new solutions. The city is a massive laboratory for urban theorists, developers, and boosters alike. How, many wonder, can Detroit be saved? Or can it be saved at all? Certainly one of the more interesting answers to these questions has come from Tyree Guyton, the man behind the Heidelberg Project, which has appropriated several blocks of the city’s near east side into a spectacularly off-the-wall community art project/revitalization effort.
It’s certainly not what you’d traditionally refer to as “revitalization,” but that’s kind of the point. On its website, the Heidelberg Project explains its vision thusly: “The Heidelberg Project envisions neighborhood residents using art to come together to rebuild the structure and fabric of under-resourced communities and to create a way of living that is economically viable, enriches lives, and welcomes all people.” What this translates to in the physical environment of Heidelberg Street is a collection of abandoned houses — and their surroundings — covered in murals, knick-knacks, mannequins, coins, pie tins, pieces of repurposed trash, stuffed animals, and (literally) just about anything else you could think up. It’s like the Watts Towers, but even more organic.
The Heidelberg Project teaches people who live and have grown up in desolate surroundings how they can change the public spaces that make up their neighborhood and how this change can affect them. It serves as an inspiration and a source of hope. So, of course, the city government has tried to kill the project several times. It has demolished a number of homes that were a part of the project on several different occasions, even though Heidelberg Street is an internationally-recognized project that attracts 275,000 visitors each year. As the project’s Executive Director, Jenenne Whitman, observes, the fact that the city tried so hard to “squash the project … shows how powerful art can be.” Indeed.
In contemporary society, public places themselves are not often thought of as art; actually, they are more often viewed as containers for art. The design of high-end contemporary places is sometimes considered artistically merited, it’s true. But the more interesting and subtle artistic expression in the public realm is community usage. The creation of great places, after all, absolutely requires heavy human interaction. This is usually considered a confirmation of the artistic integrity of the place’s design, but is it not an art form in and of itself? After all, don’t communities transform unplanned spaces into vibrant public places as frequently if not moreso than they do planned places?
The bustle of urban streets and other public spaces in the city is sometimes refered to, quite poetically, as a great pedestrian ballet. And if this is true, it can be logically assumed that, while policy and planning choreograph parts of this ballet, each individual person moving through the city takes part in its choreography by making their own independent choices. People go to parks and plazas and promenades for so many reasons: to eat, to play, to run, to chat, to meet, to dance, to stroll. And by doing so, each person becomes an artist, taking part in the endless urban ballet. Simply to use the city, to exist within it, is a work of art. It’s a lovely idea, no?
The Heidelberg Project is a very concrete visual manifestation of this ballet. It teaches the disenfranchised and the isolated how to shape the world around them into something beautiful. In a way, it is the most public kind of public place: the kind where the planned social infrastructure failed, and the people moved in, did what they do, and created something really useful.
This post originally appeared in The Where Blog on August 27, 2007.