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Tuesday, February 25th, 2014

Supersize Your Development by James Kennedy

[ Last week Jef Nickerson told us about a proposed strip mall development in inner city Providence. This week James Kennedy of the blog Transport Providence pans back the lens to look at the bigger picture around this kind of development - Aaron. ]

The McDonaldization of Society

McDonald’s is no stranger to the love and hatred of people all over the world. It’s most vocal opponents have faulted it for being the robotic extension of a hyper-efficient assembly line. An important urban planning model is getting more and more attention across the country, and its models show not that auto-centric businesses like McDonalds are hyper-efficient, but the opposite. Even successful sprawl is a sinkhole for huge government subsidies, and results are that municipalities seeking new tax revenue from them may be shooting themselves in the foot.

One of the most prominent critique of McDonald’s is George Ritzer’s “The McDonaldization of Society.” Ritzer’s central thesis is that McDonald’s has perfected what Max Weber called “bureaucratic rationalism” in the use of its resources to such an extreme as to have dehumanized the process of eating.

I talked to Ritzer on the phone and by email, finding some of what he has to say about McDonalds interesting. Overall, though, I am a critic of his perspective. A lot of his examples of creeping McDonaldization don’t seem all that troubling to me. Quoting from his book:

  • “The department store obviously is a more efficient place in which to shop than a series of specialty shops dispersed through the city or suburbs. In addition, the shopping mall increases efficiency by bringing a wide range of department stores under one roof.” Certainly the disappearance of Main Street stores from many small towns and cities is something to be concerned about, and especially in its suburban form the shopping mall has meant lots of low-wage, high-turnover jobs that require huge amounts of wasteful driving and land use to produce endless streams of unremarkable places to shop. But what has to be understood is that Ritzer means to go beyond the big box store as an example of one-stop-shopping and criticize the idea of mixing different types of buying at all. In Providence, where we recently struggled over the addition of a new sprawled-out McDonalds and Family Dollar in Olneyville Square, Ritzer’s critique could not only apply to suburban places, but also to the newly-refurbished Arcade in Downtown, or even to the Winter Farmers’ Market in Pawtucket.
  • “Supermarkets have sought to make shopping more efficient by institutionalizing ten-item limit, no-checks-accepted lines for consumers who might otherwise frequent the convenience stores.” To have a more humanized society, shoppers expecting to pick up just a few items should apparently wait in line with people buying hundreds of dollars of items. As someone who values transit and biking, this example particularly irks me, because the ten-items-or-less line is a good demonstration of exactly the advantages brought with transit or bike lanes. I see this example as a huge stretch.
  • “Shopping also offers many examples of imposing work on the customer. The old-time grocery store, where the clerk retrieved the needed items, has been replaced by the supermarket, where a shopper may put in several hours a week ‘working’ as a grocery clerk, seeking out wanted (and unwanted) items during lengthy treks down seemingly interminable aisles. Having obtained the groceries, the shopper then unloads the food at the checkout counter, and in some cases, even bags the groceries.” Ritzer described the problem with imposing work on the customer as its effect on job creation. I personally can’t wrap my mind around why it would be bad for customers to be able to decide they want to order in a line or collect their own napkins and condiments in return for a lower price.

Certainly there are problems with fast food businesses, but I find Ritzer’s explanation of what those problems are to be lacking. I’m actually a very economically liberal person in many ways, but I also value consumer choice, and I feel like the McDonaldization thesis actually is a perfect combination of nanny-state patronization without any deeper analysis of how working class neighborhoods and businesses are fleeced by welfare-queen corporations.


Urban3 believe cities can increase their economic stability and community benefit by analyzing how architecture, planning and policy impact a community’s revenue base. (Image Credit: Urban3)

It’s Not About Fast Food

There’s another way of looking at McDonalds that sheds more light on its problems. The urban design and economics firm Urban3 in Asheville, N.C., uses math that’s receiving a lot of attention from national media. Urban3 asks, should cities be after any kind of economic growth or should they focus instead on how much growth they can squeeze out of an acre of land? The group produces some astounding visual models of what economic output per acre looks like, and its work has helped cities such as Memphis, Tenn., visualize what the balance between land use and economic growth actually looks like.

The firm first noticed the relationship between land use and real value in North Carolina, when staff worked to restore a JC Penney store that had been vacant in Asheville’s downtown for four decades. Made usable again, the property went from being worth $300,000 in 1991 to $11 million in 2012, according to a story about the firm’s work to restore the building, which takes up about a fifth of an acre.

The real insight of Urban3’s logic comes when one contrasts the value of the Walmart just outside of town, valued at almost twice the JC Penney building’s assessment. Emily Badger writes in The Atlantic article:

“Asheville has a Super Walmart about two-and-a-half miles east of downtown. Its tax value is a whopping $20 million. But it sits on 34 acres of land. This means that the Super Walmart yields about $6,500 an acre in property taxes, while that remodeled JCPenney downtown is worth $634,000 in tax revenue per acre. (Add sales tax revenue, and the downtown property is still worth more than six times as much as the Walmart per acre.)”

Urban3 contends that although businesses such as Walmart, which operate in similarly car-centric way to a McDonald’s with a drive-thru, appear to bring far more revenue than other businesses, that when looked at in a broader context are actually very inefficient at producing wealth.

I set out to apply his model to Providence, and found some interesting results.

For example, 235 Thayer St., home to a Chipoltle on the ground floor, carries exactly the kind of fast-food fare that Ritzer derides. Sitting on less than a tenth of an acre, the building is worth $636,100, according to the most recent tax assessment. The Whole Foods Market down the street at 261 Waterman has a small parking lot out front, and is valued at $2,222,300. But taken at a per-acre value, the Chipoltle wins hands down — $7 million an acre to the grocery store’s $1.5 million.

The lesson to draw from this isn’t that grocery stores are a bad investment. Though located in a less-valued neighborhood and worth just a bit more than $400,000, God Is Able African Market, in three-story building at 743 Cranston St., is worth $2 million an acre — half a million more than the Whole Foods. Fertile Underground, at 1577 Westminster St. on the West Side, came in at about $3 million per acre, trouncing a 6-acre Super Stop & Shop on Manton Street, worth more than $6 million, but only $1.1 million per acre.

In Olneyville Square itself, Recycle-A-Bike occupies the bottom floor of a building worth $200,500, but with a land footprint of just one-tenth of an acre, the building is worth 10 times that much on a per-acre basis compared to some other businesses in the area. The nearby Olneyville New York System has a parking lot in back that increases its footprint to a fifth of an acre, making the $272,600 building worth only $1.3 million an acre. The United Way at 50 Valley St. is assessed at nearly $600,000, but with a land footprint of 1.4 acres comes in at $423,000 value per acre.

I asked the city to provide tax information for a number of other businesses, many of which the city was surprisingly unable to locate in its tax records. These included a number of McDonalds restaurants built in suburban styles, a Home Depot which I had intended to contrast with a small neighborhood hardware store, several suburban and urban-style buildings that had Dunkin Donuts—which I figured is the ultimate in low-cost fast food—and a larger Whole Foods grocery store with even more parking which I was interested in contrasting with the smaller footprint one on Waterman Street. There were also several businesses in Olneyville that weren’t located.

Minicozzi emphasizes that it’s not just about how much value is created by an acre of land, but all the many extra costs that low-density development has.

“I think you have to ask yourself, what is the lifecycle cost of the road out front of the business? How much did it take to run sewer service across several acres of land for just one business, instead of connecting it ten feet from the next building over?” he asks. “If you’re in a nice three-story Victorian and someone just plops a gray box next to it, it’s not only about whether you dislike that box. Does that box pay its bills? I think the answer is no.”

Taxes in Providence are based on property values rather than land use, so some of the very small but very efficient businesses we studied pay very high taxes in relationship to the amount of infrastructure they consume.

I spoke with Nina Maxwell and Mike Giroux of Fertile Underground to get a sense of what one high-value-per-acre business pays in taxes. Fertile Underground pays $500 a month in taxes. But the costs to this small business go much further. “We pretty much have a permit for everything. I mean everything. There’s one for selling ice cream, and one for having chairs inside, and yet another for having chairs outside,” Maxwell says. “We had to pay the state a couple thousand dollars to put in bike racks on the sidewalk.”

When the zoning board in Providence approved the development of the McDonalds, alongside a Family Dollar of similarly sprawly style, it put forth the argument that while the businesses weren’t ideal, they were a step forward for a neighborhood with high unemployment. But the pattern of taxation and business-unfriendliness for small startups alongside bad land use and high consumption by sprawl businesses asks questions about whether that small-step-forward approach is exactly backwards. This isn’t helped when many of the officials in charge of directing policy admit to having no understanding of how these things work. Jim Bennett of the city’s economic development office testified at the meeting as follows:

You would think I would be supportive of this project because of the jobs, and there are jobs. I’ve checked it out, they’re accurate. The jobs particularly that are attuned to the minority community where we’re getting crushed.· We have probably the highest minority unemployment in the country; this addresses that issue. That’s not why I’m supporting the project.

You would think I’m supporting it because the property taxes are going to be raised between 5 percent and 10 percent. Several hundred thousand dollars, which could be used for infrastructure, schools. That’s a reason to be supportive of these jobs.

I went by and I got a picture of every building in Olneyville, every one. I looked at them and there’s not one business there that wouldn’t benefit by the increase in traffic. So that’s another reason to support it. However, my reason for being here … is that I do support the councilwoman who works with me at Providence Economic Development Partnership, who helped me get our loan program out of trouble with HUD, who I like to kiddingly call my assistant economic development director, who knows her constituency better than anybody. That’s who I support.

And lastly, and this is very important. Bob Azar, for 13 years he’s been involved with every major project in the city of Providence. The reason why this city is a jewel is because, part and parcel, of Bob and his staff. I have to tell you, I’m the director of economic development. I don’t know the first thing about zoning and planning and all this stuff, nor do I want to, but I’m a business person. I rely on the experts, that’s what I do. A lot of the work that Bob has done for 13 years here is seen around the city.

So Bennett’s points seem to be 1. I don’t know anything about this, but listen to me. 2. Things that expensive and harmful, like highway traffic through a low-car-ownership neighborhood, have only an upside without any counterbalance, and 3. I’m supporting this because my buddy in local government does. Very convincing.

Bennett initially agreed to set up an in-person meeting with me on behalf of ecoRI News to discuss the new development, but the morning of the scheduled meeting his secretary wrote to cancel, citing snow. I offered to do an interview by phone, and sent an e-mail with questions pertaining to the lifecycle costs of things such as Routes 6 and 10, the sewage overflow system that was just installed in Olneyville, the underground water pipes to the site and RIPTA efficiency. Bennett didn’t reply to requests for an e-mail or phone exchange.

At least one Rhode Island city has a different approach. Central Falls, located north of Providence, and itself quite a struggling rust-belt town, but the director of economic development for CF, who is also an Olneyville resident, spoke at the zoning meeting to recommend that the businesses themselves be approved, but only with the zoned urbanism intact. He said that Central Falls had been approached by a Family Dollar for its historic Broad Street and had insisted on no set backs from the sidewalk, and that Family Dollar had complied.

The Central Falls example gives one hope. In a state the size of Rhode Island—a state that also has the highest unemployment in the country, a shrinking population, and lots of unmet road infrastructure obligations around its neck—we should be able to get our heads wrapped around the idea that land is limited and has value that should be protected.

A version of this post originally appeared in a ecoRI on February 21, 2014.

Tuesday, February 18th, 2014

Providence: The Suburbanization of Olneyville by Jef Nickerson

[ Providence, Rhode Island was spared some of the worst of the urban renewal disasters and has a lot of intact neighborhoods. But there have still been some not entirely positive changes in the urban fabric in others. One such neighborhood is Olneyville. As you can see in this aerial, there's an old mostly intact neighborhood commercial center at the core, though with areas of demolition. The area is also cut off by a freeway.

In the piece below Jef Nickerson discusses a proposal for a strip mall in the area that would further degrade the urban fabric. (It's near the bottom left of the photo above). This is sadly what happens in many struggling areas where a desperate city approves suburban style "redevelopment" that's actually destructive to the only things giving the neighborhood appeal in the first place.

As an aside, I believe this development is across the street from the legendary Olneyville New York System Wieners. Somewhat oddly, the term "New York System" actually means "Rhode Island style." Here's a picture of the classic, complete with cheese fries and coffee milk (like chocolate milk, but made with coffee flavored syrup - another Rhode Island classic).

- Aaron.
]

mcdonalds-rendering
Rendering of proposed McDonald’s and Family Dollar store on Plainfield Street in Olneyville.

After learning of plans for a drive-thru McDonald’s proposed on Plainfield Street in Olneyville, I requested plans for the proposal from the Planning Department.

The developer is seeking master plan approval from the City Plan Commission for the construction of a McDonald’s and Family Dollar store in a separate building on a site which was cleared of existing structures last year.

mcdonalds-plan

Per the CPC agenda, the applicant seeks relief from front yard setbacks (they are requesting to set the building further from the street than allowed) and also for a special use permit for a drive thru for the McDonald’s. The applicant plans for a total of 56 parking spaces on the site (per the plans, 19 parking spaces in two rows between Plainfield Street and the Family Dollar Store). The McDonald’s is situated on a corner lot (Plainfield and Dike) with the drive thru lane wrapping around the building between it and the sidewalk. Pedestrian access to the McDonald’s is proposed to be via two crosswalks across the drive thru lanes and a third crosswalk from the Family Dollar store across the parking lot. Direct off-road pedestrian access to the Family Dollar store is only provided via crosswalks from the McDonald’s or via sidewalks crossing a driveway entrance on the Atwood side of the parcel.

According to ProvPlan, as of the 2000 census (the most recent data available) 59.5% of households in the Olneyville area have automobiles this compares to 52.5% Downcity. With such low car-ownership numbers, the residents of Olneyville are highly dependent on public transit, walking, and bicycles. Buildings separated from these forms of transit by parking lots with drive thru lanes are not the best way to serve this population. Olneyville is a major traffic artery to points west where car ownership rates are much higher (~80% in Hartford and Silver Lake). The residents of Olneyville should not be further burdened with automobile infrastructure catering to people outside their community.

The removal of the buildings at this site has widened a widened a gap in the street-wall along the south-side of Plainfield Street and Olneyville Square which only had small gaps between the Route 6 overpass and the eastern end of the square. For generations Olneyville has fallen victim to the automobile, first the highways, them the retail mindset that set in in the middle of the last century with places like the former Price Rite plaza, the car wash on Westminster, the Burger King with a drive thru and 60 parking spaces, and the gas station across from this site.

The Olneyville community has been working hard to bring street-life back to the square and Olneyville Housing are providing homes for residents who can walk to this area. Allowing auto-centric design at the southwest side of the square will make that area dead to walkability for generations more, just as we’re making progress on reversing prior generations of damage.

This isn’t about the proposed retailers (though I’m sure we could have a long discussion about the food choices we have in lower-income neighborhoods), this is about their physical manifestation in the neighborhood.

This post originally appeared in Greater City Providence on January 15, 2014.

Wednesday, January 29th, 2014

America’s Most “Godless” Cities?

The American Bible Society does an annual survey related to what they call “bible mindedness.” The latest results were just released and I was surprised at the amount of media airplay it got, including sites like Time Magazine and Likecool. But perhaps it should be easy to see as this is the type of analysis that can appeal regardless of where you stand on God.

But I found their results and methodology questionable in terms of supporting the conclusions the media drew from it. Here’s the chart (click to enlarge):

Time called this a list of “the most godless cities in America” but in fact it is nothing of the sort. The survey measures instead “bible mindedness,” which they measure using frequency of reading it and a degree of belief in its accuracy. In order to be considered “bible minded” you have to have read the bible within the last seven days and strongly agree that it’s accurate.

This immediately raised a caution flag to me. Obviously it is Christian oriented (though the question set is designed to capture Jewish scripture reading). But the bible minded definition is clearly Protestant-centric. Perhaps I generalize, but historically even devout Catholics tended not to read the bible regularly. My Italian grandfather may have been the most devout Catholic I ever met. Until his very old age he went to mass every single day, said the rosary three times a day, and other things like that. But I never once saw him read a bible.

So we shouldn’t be surprised that the least bible minded metro in America in this survey is Providence, because Rhode Island is either the first or second most Catholic state in America, depending on the survey you use. Whereas the most bible minded city, Chattanooga, is in the least Catholic state. (See this HuffPo piece for some stats. Pew says Rhode Island is 43% Catholic, though how many are practicing is another question).

Practicing Catholics believe in the bible, but don’t generally interact with the text in the same way Protestants do. As a result, surveys that focus heavily on personal bible reading shouldn’t be used as a proxy for Christian religiosity in general, hence most of the conclusions that have been drawn from it are likely wrong.

Friday, December 13th, 2013

The Marginality of Parking

I’ve long argued that complaining about “there’s no parking” or having to “pay for parking” is just a convenient scapegoat excuse people give when the product on offer isn’t a compelling enough buy. If your downtown doesn’t offer enough value vs. a suburban office park location, naturally employees having to pay to park sounds like a huge imposition. If an attraction is lame, then of course people don’t want to pay to park there.

I just came across another example of this in action. Attendance at Indiana Pacers games has spiked this year. It’s not hard to figure out why: they started winning games and have a team that doesn’t repel fans. Not long ago their arena was so empty it reminded me of the old days at Market Square where they used to hang a curtain around the upper deck to screen off the empty seats. Those Pacers were a team of thugs that got involved with fights with fans in the stands at the game, and shootouts at strip clubs afterwards. They also didn’t do a lot of winning.

Parking charges on game nights remained quite hefty throughout. The fluctuations in attendance had nothing to do with parking and high parking prices aren’t preventing sellouts this year. The lesson is clear: create a compelling product in your downtown or business district and parking won’t be an obstacle.

It’s amazing how often parking is viewed as determinant. Here’s a particularly sad example from Providence. It’s a marketing ad for downtown, which Greater City Providence called, “Come For the Parking, Stay For the Parking.” Please. (If the video doesn’t display for you, click here).

Don’t be that guy.

Friday, November 1st, 2013

The Gerrymandered City

Much as been written about so-called gerrymandered political districts, ones warped into various contortions in order to create a favorable or unfavorable electorate as the case may be. But a number of cities have weird shapes as well. A lot of these result from various annexations designed for a whole host of reasons such as grabbing strategic territory or trying to avoid getting landlocked by competing municipalities. So other factors can produce strange looking towns.

But in at least one case, the town itself as the appearance of having been gerrymandered. I live in West Warwick, RI which looks like this:

It’s a bit of an odd shape, though not ridiculous. From what I’ve been able to glean of the history (based mostly on what people told me), West Warwick was once part of the neighboring city of Warwick. Eastern Warwick along the coast was mostly Republican and controlled the town. Western Warwick was a big mill district along the Pawtuxet River and mostly Democratic. Chafing that their needs were not being met by the Republican faction, they went to the Democratic controlled state legislature to get split off into their own town, West Warwick, which just turned 100 and is Rhode Island’s youngest town.

I don’t know all the details, but this makes it appear as thought the town was strategically drawn to take in the mills, but not much east of there. Hence the streets it follows along the curved section, which are in part roughly parallel to the river. Today the mills have long closed and West Warwick has economically struggled. Meanwhile, formerly rural Warwick is now a much more successful city thanks to freeway access, the airport, coastal access, etc.

Sunday, September 29th, 2013

Industrial Policy Reconsidered

[ I've always been a skeptic of industrial policy, and the travails of the various federal green programs and such make me feel justified my thinking in that regard. Yet, for struggling communities, clearly something needs to be done, even if not trying to pick specific winners and losers. In 1983 Rhode Island had an opportunity to have implemented an economic turnaround plan dismissed by critics as industrial policy, but voted it down. I recently took a look back and that, and the results of that decision that I think are relevant to other places trying to figure out what to do or not do. ]

I’m a relative newcomer to Rhode Island, but you don’t to be here long to hear about the infamous “Greenhouse Compact,” a state economic development strategy developed at the end of the Volcker recession in 1983 and voted down by the public in 1984.  It is certainly one of the most remarkable economic development analyses ever performed. I have not seen a full copy, but the internet tells me it exists in at least two volumes with a length of at least 976 pages.  There was a 47-page executive summary – not much shorter than many full reports these days – that I did manage to get ahold of and read, however. If the full report is as robust as that suggests, then I’ve never seen anything that appears to be so thorough and in-depth.

The Greenhouse Compact vs. Laissez-Faire

The Greenhouse Compact was the brainchild of Ira Magaziner, who went on to design Hillarycare, apparently not learning his lessons as that plan was developed and failed in a similar fashion. Though perhaps not the reason the Greenhouse Compact was voted down, it was roundly criticized by economists like Brown’s Allan Feldman, who strongly attacked it as industrial policy.

Magaziner and Feldman lay out starkly contrasting views of the matter. The Greenhouse Compact says:

Today, Rhode Island is in an economic crisis….When an economy has a vibrant private sector which can clearly provide the growth opportunities in investment that the economy needs to employ its people fully and raise its living standards then one can speak of a laissez-faire attitude as being appropriate. Rhode Island is currently far from that. It has many industries which are becoming subject to low wage competition; it has many others which are mature low wage rate industries with very little growth prospect but a need to modernize and develop new products; it has very few companies that have the prospect for significant growth and these are often being wooed by other states with particularly attractive incentive packages; and it has only a smattering of activities in new technology areas. Under these circumstances, a concerted economic development effort is the only way to create the momentum to build economic prosperity.

In the run-up to the vote, Feldman told the New York Times:

“I think this is not an appropriate thing for government to do, but that’s not my basis for opposition,” said Allan Feldman, an economics professor at Brown who is co-chairman of a group, Common Sense, formed to oppose the Greenhouse Compact. ”Beyond the ideological question, I think the economic analysis is terrible and the plan won’t work. It favors bankers, venture capitalists and high technology, and while it might be great for Terry Murray’s bank, it won’t help the average Rhode Islander.”

After it was voted down, he said in the Christian Science Monitor, “It was not economically sound, and would ‘offer very little to taxpayers.’”  He also wrote an article in which he gloated that “industrial policy is dead.”

A bit later, as Rhode Island’s economy was looking up, Feldman appeared vindicated, telling the Washington Post in an article titled “Rhode Island: Rags to Riches”, “Governors delude themselves. They like to think they’re responsible for everything.” In the same piece Magaziner stuck to his guns, saying, “We should be fixing the roof when the sun is shining. We really should have invested more than we have.”

The Greenhouse Compact Vindicated

Fast forward 30 years and what has history shown? The predictions of the Greenhouse Compact have been entirely vindicated and the approach of Feldman and company has perpetuated the economic ruination of the state. Rhode Island’s post-recession bump wasn’t a real recovery; it was a dead cat bounce.

The Greenhouse Compact had said, “Overall, prospects are bleak. Industries which are likely to lose employment or at best stay stable far outweigh those with growth prospects. Those companies with growth prospects often plan to expand out of state….Given the current structure of Rhode Island’s economy, these jobs are unlikely to emerge.” This report included a sector by sector analysis in which it concluded that with the exception of eds and meds, the future didn’t look bright. And while it may have been off in some details, clearly history has borne out the Compact’s central claims.

It certainly possible that the Greenhouse Compact’s recommendations would have failed to stem the tide. But it’s hard to see how they could have made things much worse, thus pursuing the strategy likely made sense on option value alone.

What Feldman and the ultra-purists on the right fail to fully recognize is that creative destruction is real. Just as in the commercial marketplace where almost all firms ultimately fail, the vast majority of places will end up failing as well. Once they reach the top of their maturity curve, they’re done, and unless they reinvent themselves and begin a new growth curve again, they sicken and enjoy a long stagnating decline. Rhode Island reinvented itself three times from agriculture to seaborne merchant trading to industry, but failed to pull-off a fourth reinvention. Any CEO of a company facing a similar need to reinvent itself certainly would not take the attitude that he should let the market sort it out and do nothing but manage costs. But that’s the prescription too many give to public sector leaders.

From ‘Industrial Policy’ to ‘Conventional Wisdom’

Not all of the Greenhouse Compact’s recommendations make sense. The $138 million (a lot more than that now when you factor in inflation) in incentives to existing industries seems more like a fillip to interest groups to secure their buy in than a real strategy, for example. But a lot of it, including the eponymous “greenhouse” component, were ahead of their time and indeed have become almost conventional wisdom.

The Greenhouse idea was to basically have some public sector support to nurture emerging industries that were research and technology related in areas where Rhode Island was perceived to have some potential to play. These would include a marketing and civic booster program, as well as a venture capital fund, including some unique components such as allowing the state’s pension fund to invest in startups.

Pretty much every state has adopted a similar model in the last decade. Even Tea Party friendly politicians like Indiana Governors Mitch Daniels and Mike Pence invested heavily in Biocrossroads, which is the umbrella organization for that state’s “greenhouse” in life sciences, for example. They may be fiscal conservatives, but they’re not dumb. Pretty much every single city and state has variations on these. Another example: one of the plan’s suggestions was to create a Rhode Island Academy of Science and Engineering to boost the supply of talent into those industries. This idea was recently implemented – by New York Mayor Michael Bloomberg, who is opening a new technical and engineering college on Roosevelt Island in conjunction with Cornell and Israel’s Technion backed up by significant public investment. Look at any city or state, and you’ll see them trying some variation on the greenhouse theme, though with different terminology. Many of these programs are ‘me too’ initiatives that aren’t likely to be effective. But where the approach is applied to areas where a state or metro area has a potential advantage, it makes a lot of sense.

It’s interesting that the Greenhouse Compact even specifically warned against 38 Studios style cross-border raiding, saying, “To some states, economic development has meant trying to convince industries in other states to close down and move. This will not be Rhode Island’s approach. We are not interested in ‘stealing’ another state’s companies.”

Now plans aren’t implementation, and obviously the reality would have involved a lot of politicization. I’m not so naïve to believe that poaching attempts would have been eliminated just because this report said so. But the bottom line is that Rhode Island had an opportunity to be 20 years ahead of its time, and took a pass.  Free market types might argue that their preferred policies were never implemented either, but that’s the right-wing equivalent of “true communism’s never been tried.”  The results are in and the Rhode Island experience makes it very clear that while some of these approaches that might have had aspects of industrial policy (though certainly nothing like the botched federal green subsidies and such that rightly give industrial policy a black eye) may not have been the right idea, doing nothing certainly didn’t work.

In a lesson to Tea Partiers everywhere, the Greenhouse Report summed it up, “If Rhode Island is to undergo an economic renaissance, investors must have significant positive reasons for investing in this state rather than any other. The absence of negatives will not be enough.”  A Tea Party style focus on nothing other than taxes and costs – removing the negatives – is insufficient and history has borne that out (just as is now being repeated in many Midwestern states that are becoming Rhode Islands despite their nominally attractive business climates).  Want to oppose plans like the Greenhouse Compact? Fine, but show us your plan and give us a reason to actually believe it will work.

Based on what I read in the executive summary, though there area a number of anachronisms and areas I didn’t agree with, the Greenhouse Compact actually stands up quite well today. If it were simply implemented as is, it would still probably be an improvement over the status quo, but now that everybody and their brother has piled on, the big returns have, sadly, already been harvested elsewhere.

This article originally appeared in GoLocalProv on September 23, 2013.

Monday, September 2nd, 2013

What Triggers a Civic Turnaround?

Lots of cities in America are struggling with low population growth and sluggish economies. Poor demographics and economics lead to fiscal problems that result in more people and businesses leaving, perpetuating a downward spiral. Detroit, which recently filed bankruptcy, is an extreme case, but many cities and states find themselves in similar straits, including much of New England and especially most of Rhode Island.

How to places break out of this and renew prosperity? Looking at cities where there has been change, I have observed several basic patterns of turnaround.

Structural Changes

Many cities failed for structural economic reasons like deindustrialization and globalization. Similarly, many ended up reviving for similar external reasons. In her seminal book The Global City, Saskia Sassen noted that while globalization permitted the dispersal of economic activities to lower cost locations, it created a parallel need for specialized financial and producer services to manage and control those global production networks. These services were disproportionately concentrated in so-called “global cities” like New York and London. While once those cities had fallen on hard times (in NYC’s case, nearly going bankrupt itself in the 1970s), globalization more than any other factor perhaps brought them back to life. Unfortunately, localities have no ability to conjure up these macro-economic changes.

Natural Lifecycle Progression

In a few places, notably Pittsburgh, it seems that the problems simply reached the end of their life cycle. To borrow a phase, they “hit bottom” and started reviving, if slowly. Of course, many places hit bottom and stayed there. Pittsburgh has been helped by the presence of large, world-class institutions. Being in the Marcellus Shale formation that’s the epicenter of the American gas fracking boom doesn’t hurt. It’s worth nothing that Pittsburgh has been fairly slow growth and still faces big challenges, including major pension and infrastructure problems.

Outsider Influx

Other cities hit a growth inflection point when they were able to attract a critical mass of outsiders. I have argued that having a critical mass of outsiders, that is, of people who aren’t long time natives or “boomerang” migrants, is almost a prerequisite for major civic change:

You need them, and you need enough of them that they a) don’t get beaten down by the man, so to speak and b) that they become a base of support for change in their own right. Once this group becomes large enough, it opens up the field of possibilities. They have the insights and different ideas from having lived elsewhere. They aren’t bought into the status quo or burdened by the baggage of the past. They are willing to question they way things are done. They are more likely to want change. In short, outsiders are the natural constituency for the new. That’s why outsiders are so important for a community to change, and why absent enough newcomers, change is difficult if not impossible.

Of course, this almost begs the question: how do you attract those outsiders? This would appear to be a second order factor. It would be worth doing a deep dive on how significant inward migration began in these places. Also, the places that seemed to do well on this model – like Nashville or Denver – are places that weren’t in terrible shape to begin with.

Transformational Leaders

Any number of cities lend themselves to a narrative of transformational change led by a particular leader or group of leaders. You can think of Richard M. Daley in Chicago or Rudy Giuliani and Michael Bloomberg in New York. Cory Booker in Newark may be an emerging story in this mold. Or in previous generations there were business magnates like J. Irwin Miller in Columbus, Indiana that through superior vision combined with clout were able to put their community on a different path than other similarly positioned cities. (Among other things, Columbus, Indiana is an internationally renowned center of modernist architecture, with no fewer than six National Historic Landmarks in a modernist style).

The obvious question here is how much leadership had to do with it. So many of these large tier one type cities came back at the same time that it seems likely some common outside force like globalization was the real driver. Or at least that it was a prerequisite to enable the leadership to be effective. However, there are some examples like Columbus that appear to be less the result of outside forces.

Civic Sector Led Revitalization

Some cities have done well in models without a single dominant leader such as a larger than life mayor. In Indianapolis, for example, it was a broader coalition of business, community, and institutional leaders that championed items such as their sports hosting strategy that had a transformational impact. This is the model most cities try to use, but it has failed nine times out of ten in delivering transformational impact, so would appear to be a very high risk strategy.

What other models suggest themselves? I won’t claim this as a comprehensive list.

A Look At Providence and Rhode Island

Where does Rhode Island fit in? Well, it hasn’t seen a turnaround yet. But there has been a sort of slow growth in personal incomes that could add up over time. In this light, Providence would be a sort of Pittsburgh-like city from a lifecycle perspective, though I should note with a much smaller asset base. Alon Levy made the case for this view last year in a piece called “The Quiet Revival”:

Rhode Island may have one of the highest unemployment rates in the US today, but income growth is high; things are slowly getting better. The most visible growth in the US is in population rather than income, and so the usual markers are new housing starts, new infrastructure, and a lot of “coming soon” signs. Providence of course doesn’t have much of this. Instead, people are getting richer, slowly… Economic growth in the richest countries is slow enough that people don’t perceive it. Instead, they think it’s the domain of countries that are catching up, such as China, where it’s so fast it includes new construction and the other markers that signify population growth in the first world. In the long run, it matters that a city’s income grows 1.8% a year rather than 1.1%, but it’s not visible enough to be captured by trend articles until long after the spurt of growth has started.

Given the lack of structural economic forces boosting the city, and a comparatively small base of newcomers, particularly outside of Providence proper and other core cities, this will likely have to do for now, unless we witness the emergence of a disruptive and transformational type leader.

This post originally appeared in GoLocalProv on August 26, 2013.

Sunday, August 18th, 2013

Building Civic Self-Esteem

Among post-industrial cities in America, one of the things I observe is a sort of malaise in the civic character. Many of these places have been beaten down so hard for so long that a sort of defeatist attitude has set in. This can include bitterness about what was lost, a self-loathing mindset, and cynicism and negativity about any proposed efforts to improve things.

Our Backyard Rhode Island

This negativity has inspired efforts in some places to first change local perceptions about their community before trying to market to the world. One such initiative was recently unveiled by the Rhode Island Foundation and is called “It’s All in Our Backyard.” This effort grew out of a civic brainstorming event from last fall called “Make It Happen Rhode Island.” While the name makes it sound like an internally focused tourism campaign, the idea to sell residents on the positive side of their community in order to provide an uplift to the civic spirit.

I was apprehensive about this when I heard about it, as most place-based marketing campaigns out of officialdom anywhere are dreadful, tending towards the generic and the earnest, and are often actually counter-productive. So I was glad to see that It’s All In Our Backyard is actually pretty good.

Here’s an example of one of the videos, which is a company feature of textile business Hope Global, based in Cumberland (if the video doesn’t display for you click here):

This example works on a variety of levels. It’s a historic business in the textile manufacturing business that has been core to the state’s economic identity.  There are nice shots of a historic building and a WPA-style mural along with modern machinery, a female CEO, and discussions of globalization that show a piece of authentic Rhode Island’s character successfully repositioned for the 21st century.

I might have suggested some tweaks. It’s not exactly clear what this company actually does, though the one example was given pretty compelling. (Hope Global is adding workers while exporting shoe laces to China for premium branded products in what appears to be an example of re-shoring). But my lack of familiarity with the company doesn’t diminish the quality of the piece, which comes across as solid and convincing in contrast with so many place marketing videos that can easily be picked apart like a bad action movie plot.

OurPVD

At the more grass roots level, Andy Cutler and some associates have been trying to put out a positive word as well, but aimed at external as well as internal audiences. He laid out a vision in an op-ed piece on GoLocalProv.  He also convened a small gathering of folks to brainstorm what’s great about Providence.  This resulted in two online efforts branded “OurPVD.” One is a Twitter account @OurPVD (and #OurPVD), which is designed to get out the word on cool things in Providence. Similarly, there’s a Pinterest page that is pretty good.  Cutler is also trying out a bit of “citizen diplomacy” with an effort called “Smaller Cities Unite!” that led to a trip to Copenhagen and at least one mention of Providence in Copenhagenize, arguably the world’s most influential urban bicycling blog.

Rockford, Illinois: Our City, Our Story

An interesting initiative out of Rockford, IL called “Our City Our Story” is another example. This one is a sort of intermediate level initiative between the two Rhode Island ones. Filmmaker Pablo Korona was tired of Rockford taking a beating, such as in a major New York Times feature called “Portraits From a Job-Starved City.” He launched a Kickstarter campaign to fund a video community storytelling project to give a different perspective on the city. While still an outsider effort that local officialdom seems not yet to have fully embraced, in a sense it has “gone legit” and gained quite a bit of traction as well as national press. (See, for example “How a Branding Vigilante Is Saving His Town With a Rogue Website” in Fast Company).

There are 16 videos so far, each featuring some interesting character from Rockford. These range from a tailor who in a previous life was a singer, songwriter and owner of a record label that took a pass on signing the Jackson 5 to a kid jailed for tagging become a legitimate street artists lauded by the very mayor who bragged of having him arrested.

Here’s one that is similar to the Hope Global story above. Called “Our Curiosity”, it’s a look at a local machine shop that cut all the gears on the Mars rover Curiosity. (If the video doesn’t display for you, click here):

Again here the “our” motif reveals the inward focus of the piece.

Thanks for Carl Wohlt for pointing me at this.

When a new CEO takes over a company that has struggled, one of the things he has to do is rebuild corporate morale. These various efforts show examples of how local people are trying to initiate an improvement in their region’s civic morale and break the cycle of self-loathing, a very important task.

Post-Script

As a post-script, I’ll highlight one more Rhode Island video. The typical “What’s so great about your community?”  video is terrible.  Again, usually it is either generic items most communities would likewise brag about, or comes across as exaggerated.  This one, which appears to be mostly sort of outtakes from the various other videos produced, shows how a small community can pull this off. This is because the producer and the people in it have some fun with the state. For example, the guy who in reference to the small size of the state says, “Well, I feel like the size one is one everybody’s going to talk about. What are other people saying?” Or the guy who says, “First of all, my wife’s from Rhode Island, and I absolutely love her.” . (If the video doesn’t display for you, click here):

When you’re small, you can’t take yourself too seriously or you’ll look like you’re trying to hard. Not being afraid to have some fun with yourself is a great way to disarm that. Not bad for what appears to be an “extra” production, though the claim of diversity is a bit of a head-scratcher.

This post originally appeared in GoLocalProv on August 12, 2013.

Thursday, August 1st, 2013

Positive Providence Data

My latest post is online at GoLocalProv and discusses a few pieces of positive data around growth in exports, GDP, personal incomes, and educational attainment. Oh, and interestingly, Providence has the second highest availability of broadband internet at speeds of 1Gbps or greater of any major city in America (after Portland).

Friday, July 19th, 2013

Why We Need Tolls

My latest post is online at GoLocalProv and is called “Rhode Island Needs Tolls.” While I am specifically addressing a case in Rhode Island, I explore the bigger picture and explain why across America we are likely to see expanded use of tolling – and why that’s probably the right thing. Here’s a sample:

According to Standard and Poors, the US has an accumulated infrastructure spending deficit of $2.2 trillion. Beyond the Sakonnet, an estimated 70,000 bridges need replacing nationwide. Needs range from replacing Cleveland’s decaying Innerbelt to a major transit rail investment need in New York City to upgrading America’s air traffic control systems.

Gridlock and fiscal pressures in Washington, America’s traditional infrastructure financier, compound the problem. As the Washington Post noted last year, “The bill for all that, and more, eventually will land on taxpayers’ doorsteps. But the postmark won’t read ‘Washington.’ Instead, the tax bill will come from state or local governments struggling to fill the growing void in federal funding.” Gridlock makes it difficult to get anything done at the federal level, leading to default policies like sequestration. But even if Congress did start making progress, huge fiscal imbalances (the “good news” is that our 2013 deficit will be “only” $759 billion) mean it’s unlikely the feds are going to be paying for this. That leaves states like Rhode Island on their own.
….
As a rule we should be moving towards user fee systems for roadways. For too long we’ve given away roads “for free,” resulting in congestion, sprawl, environmental degradation, and yes, crumbling infrastructure. All of these come in part because we do not pay the full cost of the driving trips that we make. Pretty much anything we only indirectly pay to consume ends up over-used and under-maintained. That’s the tragedy of the commons.

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