Thursday, November 14th, 2013
My latest column is in the November issue of Governing Magazine. It’s called “Stopping the Civic Decline Cycle.” In it I urge cities to get a real grip on their problems and restructure for new realities rather than simply managing an endless, painful decline cycle year after year. Sadly, facing fiscal challenges right in the face rather than kicking the can down the road and trying to survive another year has proven to be quite rare. I don’t want to claim this is some preferred solution. But cities are where they are and have to respond to reality.
Here’s an excerpt.
The cycle of municipal decline looks the same in a lot of places. People and businesses leave, which causes tax revenues and quality of place to degrade. That, in turn, leads to tax increases and service cuts, which makes more people and businesses leave. This repeats in an endless cycle as a city slowly dies.
Rather than an endless stream of crisis management, cities should instead take a realistic forward look at their civic trajectory—medium-term revenue forecasting, demographic and economic forecasting, capital asset replacement cycles, and so on—and restructure the services delivered and revenues raised in order to create a sustainable baseline that can be defended over at least the medium term. This would enable cities to provide some degree of predictability to current and prospective residents and businesses about what their tax bills and services received will be. That right there will improve the business climate by reducing uncertainty and the, often correct, belief that most cities just don’t have a handle on their problems.
Sunday, November 3rd, 2013
A couple weeks ago the Economist ran a leader and an article on the plight of smaller post-industrial cities, noting that these days the worst urban decay is found not in big cities but in small ones. They observe:
Partly, this reflects the extraordinary success of London and continuing deindustrialisation in the north of England. Areas such as Teesside have been struggling, on and off, since the first world war. But whereas over the past two decades England’s big cities have developed strong service-sector economies, its smaller industrial towns have continued their relative decline. Hartlepool is typical of Britain’s rust belt in that it has grown far more slowly than the region it is in. So too is Wolverhampton, a small city west of Birmingham, and Hull, a city in east Yorkshire.
And even with growth, the most ambitious and best-educated people will still tend to leave places like Hull. Their size, location and demographics means that they will never offer the sorts of restaurants or shops that the middle classes like.
Their editorial forthrightly embraces a policy of triage, saying “The fate of these once-confident places is sad. That so many well-intentioned people are trying so hard to save them suggests how much affection they still claim. The coalition is trying to help in its own way, by setting up ‘enterprise zones’ where taxes are low and broadband fast. But these kindly efforts are misguided. Governments should not try to rescue failing towns. Instead, they should support the people who live in them.”
This same dynamic is clearly evident in the United States as well. Bigger cities have tended to weather industrial decline far better than smaller ones. There seems to be some threshold size below which it is difficult to support the infrastructure, the amenities, and the thick labor markets that attract the people and businesses in 21st century growth industries. My “Urbanophile Conjecture” heuristic suggests that you need to be a state capital with a population greater than 500,000 to be thriving. But even larger places that aren’t capitals and conventionally viewed as failures like Detroit retain powerful metro area economies and large concentrations of educated workers, especially in the suburbs. Conversely, smaller places like Youngstown, Ohio and Flint, Michigan face much bleaker circumstances.
There are exceptions to the rule, including many delightful college towns or the occasional oddball like Columbus, Indiana, but for the most part smaller post-industrial cities have really struggled to reinvent themselves.
In part this is because a rising tide hasn’t lifted all boats, only some of them. As economist Michael Hicks noted, “Almost all our local economic policies target business investment, and masquerade as job creation efforts. We abate taxes, apply TIF’s and woo businesses all over the state, but then the employees who receive middle class wages (say $18 an hour or more) choose the nicest place to live within a 40-mile radius. So, we bring a nice factory to Muncie, and the employees all commute from Noblesville.”
In short, growth actually fuels divergence because a) the growth disproportionately accrues to the places that are doing well in the first place and b) even when struggling cities can attract jobs, people earning middle class wages frequently live elsewhere. Doug Masson likened this to Jesus’ statement that “For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath.” I think there’s a lot of evidence that for bigger cities a lot of activity is exhibiting a convergent or flattening effect. That’s why so many places today have decent startup scenes, quality food, agglomerations of talent, etc. But for smaller cities my observation is that it’s still a divergent world.
You see this on full display in central Illinois, where the town of Danville (population 33,000) and Champaign-Urbana (combined population 124,000) are only about half an hour’s drive apart on I-74. Danville is one of the bleakest towns I’ve ever visited in the Rust Belt. When your Main Street is a STROAD, you know you’re in trouble. Champaign-Urbana by contrast, is a fairly healthy community. It’s home to the main campus of the University of Illinois, seems to be reasonably thriving, has many high quality residential streets, a direct rail connection to Chicago, etc. As a college town, it’s one of those “exception” smaller places.
Anyone within reasonable driving distance with a choice would almost undoubtedly choose to live in Champaign over Danville, unless they had a family or personal connection to the latter. It’s an easy slam dunk decision. In effect, proximity to Champaign acts as kryptonite to Danville’s revitalization. Again, a rising tide only fuels this divergence.
This sort of divide between communities mirrors the divide in society as well. The question is, what approach should be taken to address these disparities? One approach is to focus on the people, and leave the places to rot. Jim Russell has noted that “people develop, not places” thus most place based economic strategies are destined to fail. This approach has also been advocated by economist Ed Glaeser, who in an article title, “Can Buffalo Ever Come Back?” answered his own question by saying, “probably not—and government should stop bribing people to stay there.”
This is obviously unpalatable to policy makers of either the left or the right, as no one has yet embraced it openly. How then have the left and right responded? The response of the left seems to be what Walter Russell Mead has labeled the “blue model” solution. His basic view is that the post-war economy was based around a policy consensus he labeled the blue social model (and which Urbanophile contributor Robert Munson has simply labeled the New Deal). This involved large corporations, powerful unions, extensive industrial regulation, and an expanding safety net. Those who wish to retain the model suggest allowing divergence to continue, but raising taxes on the wealthy and successful in order to redistribute them to sustain those at the bottom of the ladder (via an expanded welfare state), who are in effect seen as lost causes in the modern global knowledge economy, though few of them will openly say it. So the idea is to invest in success, and redistribute the harvest aggressively. That’s why you see lots of left advocacy in favor of tax increases on higher income earners and against food stamp and other benefit cuts, but a paucity of ideas for how to provide the left behinds with jobs and opportunity.
Mead suggests there’s no such thing as the red social model, and perhaps he’s right in that there’s never been a national policy consensus we could label as such, but there’s certainly a red model response to current conditions and it’s called the Tea Party, or what Mead has labeled a “Red Dawn” in many places like Kansas, North Carolina, and New Mexico. This is a type of single factor determinism model. In these kinds of models, a single factor like education, transportation infrastructure, climate, etc is treated as overwhelmingly determinant in driving the economic structure and outcomes. The factor posited by the Red Dawn model is government, therefore the red model response is to slash and burn government (with the potential exception of highway spending) to lower costs, taxes, and regulatory barriers that are perceived to be holding the economy back. In other words, government is the base, and the economy and everything else is the superstructure. Fix the base and the superstructure will correct itself. That’s the theory.
Broadly speaking, these are the paths that Illinois and Indiana have followed. Chicago’s size enables it and its values to political dominate the state in the modern era. With only a rump of a Republican Party, the Democrats are free to do what they like. Conversely, in Southern influenced Indiana it is the outstate areas that are numerically superior to the successful urban regions, thus the state follows their policy preference, and Republicans overwhelmingly dominate the state so there’s little real opposition to red model policies.
What have the results been? Most obviously, Illinois is nearly bankrupt while Indiana is sitting on a AAA credit rating and a $2 billion surplus in the bank. (It has a pension deficit, but it’s manageable and there’s a funding strategy in place). Clearly Indiana has a more functional political system than Illinois, which somehow manages to remain gridlocked despite a “four horseman” style legislative system and overwhelming Democratic dominance. So score two for Indiana.
Finances aside, what have the results been? Illinois has poured massive quantities of cash into building on success, with items like the O’Hare Modernization Program and Millennium Park. The successful side of the economy, epitomized by the global city portion of Chicago, has soared to incredible heights. This is a city that earned at seat at the table of the global elite. On the other hand, the overlooked areas like much of the south and west sides of Chicago and places like Danville, are in horrific shape. The goal of allowing divergence clearly worked. However, with the state’s finances in abysmal shape, the redistribution portion did not happen. Indeed, the social safety net and basic services depended on by the rest of Illinois are being shredded. Even if you believe that it’s viable to simply support a large lumpenproletariat in perpetuity on welfare – which is doubtful – financial extremis means Illinois isn’t even able to try.
Meanwhile in Indiana, pretty much the entire state policy has been reoriented towards making the left behind areas attractive to lower wage businesses. Policies that would cater to higher end businesses in successful urban areas have been less popular. That’s not to say there’s been nothing. Gov. Pence recently agreed to subsidize a non-stop flight between Indianapolis and San Francisco to help the local tech industry, for example. And he’s supported efforts to boost the life sciences sector. But I think think it’s fair to say low costs and low taxes are the watchword, with right to work, light touch environmental regulation, mass transit skepticism, etc.
However, most of Indiana’s left behind type places have not recovered. Overall the state has retained a stubbornly high unemployment rate significantly above the US average, and, even more worrying, incomes have been declining relative to the US. Metropolitan Indianapolis, Lafayette, Bloomington, and Columbus have done reasonably well. Much of the rest of the state has continued to struggle, particularly in adding jobs with middle class wages. As the recent commentary by Brian Howey, Michael Hicks, and Doug Masson shows, Indiana retains its “Noblesville-Muncie” divides mirroring Illinois’ “Champaign-Danville” ones.
In short, the blue and the red model produced some success, albeit in different modes (think San Francisco vs. Houston, Chicago vs. Indianapolis), for the “haves” side of the equation but haven’t yet proven equal to the “have nots.” The Economist makes it clear the totaly different policy configurations of the UK haven’t made a dent in it either. Post-industrial blight in much of Europe tells a similar tale. This suggests that there are powerful macro forces at work that are extremely difficult if not impossible to overcome. It’s no surprise then that the Economist suggests giving up.
Again, that’s not likely, so what should we do? I won’t pretend to have all the answers to a very difficult question. However, I’ll suggest a few possibilities:
- Seek to stop the civic death spiral. This means getting ahead of the decline curve by seeking to halt the cycle of people and businesses leaving, leading to revenue declines and degraded quality of place, leading in turn to to service cuts and tax increases and disinvestment, which leads to more people and businesses leaving. This involves getting ahead of decline and restructuring government to a place where you can hold a defensible position on services and taxes from which you can seek to rebuild.
- Integrate with metropolitan economies. Rather than Muncie trying to hold Noblesville/Metro Indy at bay, or Danville the same to Champaign, closer connectivity is the key. I’ve written on this before regarding Indiana. In the short term losing the highly paid employees to a nearby municipality is a good thing. Without those living options for the managers, etc. you’d never be in play for the plant in the first place. That connection expands your labor pool, provides trade opportunities, etc. Just the property taxes from the plant is valuable, and can be used in rebuilding. Fostering these connections would require decisions that seem counter-intuitive on the short run. For example, Ball State University in Muncie should clearly expand its downtown Indianapolis presence. That isn’t necessarily taking away from Muncie. It’s building new connections and opportunities for Muncie where they don’t exist today.
- Find a claim to fame around which to rebuild. Carl Wohlt says that every commercial district needs to be known for at least one sure thing. Similarly, what’s Danville’s sure thing? Some towns like Warsaw or Elkhart already have it and need to build on it. Others need to find one. That’s not to say one thing is the only thing you’ll ever need or that you aren’t opportunistic around potentials deals that come your way. But you have to start somewhere. Where do you put your limited available civic funds?
I’m not so naive as to think this it the complete answer. But if there’s to be a genuine attempt to rescue places, then new thinking is needed and a turnaround will take a long time. In the meantime in parallel, clearly people-centric solutions also need to be pursued, to give people the best opportunity to realize their potential and dreams in life, where ever that may take them. No city is a failure that does this for its citizens.
Tuesday, October 8th, 2013
This post is part of a series called North America’s Train Stations: What Makes Them Sustainable – or Not? See the series introduction for more.
Photo from City of Newark website
Photo by Robert Munson
Score: 79 (see full scorecard)
Category: Economic Engine
Overview: Stations in this series’ third category, Economic Engine, perform perhaps the key function of daily urban life: facilitate transit systems that give a competitive edge to downtown employers and retail. This strategic goal helps explain why so many cities recently want to redevelop their central stations and, in the last third of the 20th Century, why preservationists succeeded so often in keeping alive their civic centerpieces.
To distinguish Economic Engines from the highest category (called the Sustainables), a related theory assumes that stations centering well their mobility networks also boost property values with more Transit Oriented Development. This creates a happy economic cycle for a growing middle class that uses transit more; raising both tax and farebox revenue, while creating savings from lowered household transportation costs and government road maintenance. This combination puts a network on the road to fiscal sustainability; particularly as discussed in this series’ earlier article on Philadelphia’s growing middle class that resides downtown. We should expect more of these more complete downtowns as the sustainable era emerges.
Usually with too little residential, Economic Engines are less complete and only stimulate the commercial downtown; but should improve the network as steps toward our more robust category. (While most of these correlations are good, causation is still squishy.)
Newark’s Penn Station is a good test of this TOD theory that transit is an economic enabler and stimulant. In my opinion, Newark potentially centers the nation’s largest suburban operator. (This assumes two combinations under good governance: PATH and NJ Transit technically count as one integrated system; and, Newark’s Penn and Broad Street stations are essentially one station with eight lines connected by a one mile light rail.) Yet, Newark is only a small, mid-sized city with 278,000 residents while Long Island’s railroad (currently the nation’s largest) can serve some 7.7 million.
Photo Credit: Flickr/Dougtone
Newark’s relatively successful commercial downtown looks like a much larger city. But its chief obstacle is the City’s middle class is way too small. While having some diverse neighborhoods, Newark still has the highest poverty rate (25%) of any American city. So if Newark turns around that statistic by using its transit advantage to rebuild its middle class, it further makes the social argument for every other city to invest in its station and reinvent its mobility network. Until that happy day, other cites can be well served by this analysis of Newark’s main station and how it encourages one of the nation’s better transit systems.
How The Economic Multiplier Works At Newark Penn
This station has two key factors in its equation: design; and transit as a top priority.
A great design may not be mandatory for success, but it sure helps. If a station is designed well, its functions fall into place easier and are less costly to update. If a station functions well, it gets used more and it is more possible for a downtown to flourish. Newark proves these operational and capital efficiencies. Twice. Most improbable was the second time; occurring now.
The first time, of course, was when Penn Station was built. With a 1935 ribbon-cutting and carefully orchestrated promotion, this equal investment from the City and Pennsylvania RR promised to work well for everyone. And it still does.
The station functions well. Integrating its three levels, one walks down from the almost airy platforms into a concourse with a relatively high ceiling so it doesn’t seem as if eight tracks could have trains rumbling above you. The concourse then smoothly distributes passengers to parking, taxis, buses or the exquisite Art Deco detail of the waiting room pictured above all on the street level. The basement is a light-rail subway; a short ride connecting to universities, medical centers and the Broad Street Station. Here is the agency’s recent blueprint. (The extensive local bus station is unmarked, but adjoins Penn Station’s north wall.)
While still working well through the 1970s, Newark’s decline caught up with the Station. It has undergone two decades of updates starting with $41M from NJ Transit in the 1990s. Then in this century and largely using the above drawings, NJT teamed up with federal money (including 31M from the 2009 ARRA stimulus.) All this brought the Station to as good a condition as could be expected; given the economic disaster of many Newark neighborhoods.
For more details on Newark Penn, visit this website sponsored by Amtrak that helps citizens preserve their stations.
Street map posted throughout ped-shed, photographed by the author.
The concourse and connection to other modes are done well (see scorecard details.) As in other good stations, improving passenger convenience and increases ridership. But, the real reward is the economic impact on the downtown. The above map captures this best. Its economic anchors are Prudential (absolutely key) and quasi-government corporations (New Jersey’s largest light and gas company and the state’s Blue Cross/Blue Shield.) Typical of recovering downtowns, it also has government centers.
Overall, Newark’s employers are not much different than you would expect a former industrial and port town to have after four decades of disinvestment preceded by a particularly awful 1967 race riot and very rapid white flight. In brief, the downtown needs more private employers.
But, that problem is being turned around. Of the recent large scale construction in all of New Jersey, one-third is in Newark; despite the City having 4% of the state’s population and the disadvantage of its per household income being 42% less than the state’s.
There is further evidence that Newark’s transit quality is attracting capital. It has combined well with the tax breaks to build a downtown sports arena for its NHL team. (Prudential got naming rights.) Panasonic’s North American HQ was just lured from neighboring, upriver Secaucus and added an attractive high-rise to Newark’s surprising skyline. While lures other than tax breaks are used, transit is the key amenity; and Newark and New Jersey know how to use it.
Many give Prudential credit for saving this downtown. I add that it probably took the largest life insurer (whose portfolio is invested heavily long-term in real estate) to recognize long-term value of a town with a great station and good transit.
Newark equals Chicago’s 26.5% of ridership to work. And transit should help rebuild Newark’s middle class to overcome downtown’s main drawbacks: it has very few residents, sparse retail and partial amenities that residents require.
Before Newark Can Solve Its Poverty Problem, Build Downtown Residential
Newark has good bones for downtown residential. It has the second lowest rate of car ownership, after New York City. In addition to transit, other assets should be leveraged for downtown residential. For example, four major institutions (Rutgers-Newark, NJ Institute of Technology, the nation’s largest health service university and a community college) bring some 50,000 students to downtown’s University Heights. These largely commuter colleges could facilitate more housing for students and staff.
As with many cities revitalizing its downtown using the “eds & meds” strategy, Newark knows it has to diversify; as represented in its 2008 “Living Downtown Plan” that stretches to University Heights on the west and troubled areas around Broad Street Station on the north. (Plan consultants were SOM and Sam Schwartz Engineering).
As Mayor for seven years, Newark’s Cory Booker has done much to refurbish his city’s image. In addition to imprinting many economic deals, he is a public safety champion. During the 1990s, Newark was considered the most dangerous city in America. Mayor Booker, an African-American, has been a frontline advocate for restoring public safety. This needs to continue if the downtown is to attract enough residents. Yet continuation depends on his successor, as Mr. Booker is likely to move up as the next Senator from this state.
The mar on Booker’s legacy is he has done too little for poor neighborhoods. Because some border the downtown and are stigmatized by housing projects, this remains an obstacle. In this series on how stations lead transit systems that support a middle class, I cannot start or finish the argument that we have a welfare regime that perpetuates poor people’s plight. But, we should not forget that transit is one of the easiest ways to reduce household costs; enough so every family can save more and move up the ladder.
Unlikely to get as complete a package as Mr. Booker to serve as its next Mayor, Newark needs a strategy that persists past his dynamic persona and take its currently stymied “Living Downtown Plan” and make it a reality. Let me propose a deal for new methods of regional redevelopment. (This concept will be explored throughout this series.) To encapsulate this strategy, look at this map of the PATH.
The Port Authority Trans Hudson is the nation’s 7th largest subway system by ridership. The four small cities it serves have 620,000 residents for an impressive ratio of 3 residents for every 2 riders, highly concentrated. (The nation’s next largest belongs to Philadelphia’s subway with a ratio of 5 residents to 1 rider.) If you add the four New Jersey Transit commuter lines that connect Newark (Penn and Broad stations) to New York’s Penn Station. Suddenly, poor Newark is a very rich transit connection. As the state’s largest city, Newark should be a natural mega-hub for the New York metropolis.
My future article on New York stations uses two assumptions. First, Midtown Manhattan has too many people for transit improvements to work cost-effectively. Second, there are cheaper places to live than Manhattan. Both proven.
Newark has an under-utilized and effective transit network. And second, Newark is an inexpensive place to live.
This begs a few questions. Wouldn’t the world’s main financial center benefit from a farm team eight miles away that already is the nation’s third largest insurance center? And for the common sense and stability of our financial system, shouldn’t investment banking learn something from the nation’s largest life insurer that required zero public dollars to make it through the worst real estate market since The Great Depression? And besides, didn’t banks just make its “Wall Street West” by bringing many players to Jersey City, Newark’s peer on the PATH? (Jersey City has four PATH stops.) And didn’t this expansion raise Hoboken and Jersey City housing prices to those in many parts of Manhattan? Does this make Newark the next city to expand to?
And because it is in-land, Newark would cost substantially less to bulwark against hurricane flooding; possibly a show-stopping cost for Manhattan and Jersey City?
So if all these assumptions make sense, the clincher is: what agency helps fix this match-made-in-Heaven between the first and second largest cities in the New York metropolitan area? And don’t forget the bride’s dowry: Newark has the metro’s second largest airport and it is the most convenient to Manhattan; plus, it has the largest container port on the East Coast.
I’m not done having fun with this scenario… nor laying out its logic for Newark and, by analogy, how other central stations can serve as Economic Engines. Solving transit’s problems are increasingly expensive and ineffective because of how we govern our urban areas. If we are to compete in an era of sustainability and if that model rebuilds regions with mega-centers (instead of one over-crowded midtown), then the New York metro needs to take advantage of Newark’s assets and Newark needs New York’s investments. In ways politicians obviously don’t understand, cooperation will pay great dividends to everyone. (But first, we must un-employ the turf-fighters).
Newark’s social problems won’t get solved overnight. But over-time, they must be improved as they currently use public monies very ineffectively and these otherwise could get a much higher social and economic return if invested in infrastructure. As a drain, urban poverty is a strategic obstacle that prevents transit systems from getting on a path to fiscal sustainability.
So for today… How can every city’s central station, as an Economic Engine, do preliminary work to overcome this obstacle? Answer: we still are finding out.
But… History gives us more answers than we admit. Consider the exhibit created from a brochure promoting Newark Penn at its 1935 ribbon-cutting. This exhibit fills the waiting room’s far wall. Reading this one panel below, it is clear that the Pennsylvania Railroad saw something worth promoting and, in so doing, defined this Station’s destiny.
Photo by Robert Munson
In 1935, the City of Newark had just split the cost of building the Station. This investment tied New York to Newark’s downtown. Four generations later, it still pays dividends. This is a great public value and should make taxpayers feel good (something that doesn’t happen often enough). Newark’s Station remains a great opportunity for all types of progress. But, it is under-utilized; blocked by out-dated laws for redevelopment.
Newark Penn is an Economic Engine for the downtown that is running at, let’s say, half capacity. Who is failing to use that asset to serve public goals? Let’s show politicians and transit bureaucrats the light. And if that doesn’t work, show them the door.
Monday, September 23rd, 2013
Philadelphia Market East Station. Photo Credit: Flickr/acetonic
This post is part of a series called North America’s Train Stations: What Makes Them Sustainable – or Not? See the series introduction for more.
In the series introduction, I divided America’s stations into four categories based on how they are evolving to sustainability. The first was “The Likely Sustainables.” While most cities have plans to reutilize their central station, these cities are doing it best. These stations serve compact cities and are using these economic advantages to help their transit system achieve fiscal sustainability over time.
How we define “fiscal sustainability” ultimately depends on taxpayers; since it is their subsidy that makes it possible for the systems to run. But for the purposes of this series on train stations, fiscal sustainability means that a particular central station has led its transit system on to a path that can reverse the four decade trend of rails requiring ever more public subsidy.
According to this series’ current scorecards and analyses, there are five to seven stations in this category and most will be described during the balance of 2013. For today, The Sustainables are represented in this post by an analysis of how through-routing connects Philadelphia’s three downtown stations.
Philadelphia’s Through-routing Triumvirate: 30th Street (Penn), Suburban & Market East Stations Help To Approach Europe’s Standard For Commuters
Score: 84 (see full scorecard)
Category: Likely Sustainable
Summary: For transit towns struggling to improve their network, Philadelphia teaches them that through-routing helps make most things better. Connecting the legacy lines of Philly’s two main commuter rail companies has increased ridership and helped improve downtown real estate. If boosters of other cities cry “unfair advantage” because Philly gets evaluated with three connected stations instead of just one, my response is: connectivity is the key to sustainable stations and its subtleties create special rewards.
What Transit Is Supposed To Create: The Synergy of Passenger Convenience and Higher Real Estate Values
Three commuter rail stations connected by the dashed horizontal black line that runs one block above the main subway, the blue line.
A useful theory to test is whether Philly’s transit innovation has been fostered by good urban bones. Starting with the 18th Century walkable grid laid out by William Penn, this narrow land between two rivers — called Center City — prospered using boats, the young nation’s first mode of transportation.
The grid also helped the next mode as it helped Philly develop more densely around rail stations. Eager to spread this new mode to outlying areas, Center City annexed the rest of Philadelphia County before the Civil War. Philly’s foresight gave it a three decade lead before annexation sprees in New York and Chicago caught up. Also, Philly’s suburban rail consolidation seems pioneering: with the Pennsylvania RR (Pennsy) and its rival Reading RR overtaking their competitors before other cities’ rails did. With only two spheres to consolidate in the 1980s, SEPTA’s takeover emerged better.
But Philly’s lead truly widened with the first through-routing of a major U.S. metropolitan commuter system. In October 1984, the Center City Connection opened, a commuter tunnel connecting the Reading stub terminal to the Pennsy system. Simultaneously, the new system converted from dirty diesel to quiet electric, though at the loss of some diesel lines. As recognition of this strategic investment, The American Society of Civil Engineers could barely wait for early results and, in 1985, gave this tunnel its top infrastructure award.
Since making this investment to integrate into one system, the tunnel’s impact clearly is positive. Center City’s residential population has grown by over 50%: making it the third most populous downtown in the U.S. (Most residential is not shown on the model below because it is on the left of this westward view of the model.) Also, Center City employment numbers have rebounded and compete better with suburban job creation.
This model looking straight up Philly’s transit corridor shows centuries of integrated planning. From Market East station in the middle foreground (next to SEPTA’s red-blue logo); then carry your eye up the street to the next logo (on Love Park in front of Suburban Station); then cross the river to the monumental 30th Street Station. Completing this tight transit corridor, the main street running just to the left is Market and has street cars and a subway.
And what are the economics of this corridor?
Philadelphia Suburban Station. Photo Credit: Flickr/ireneillee
Real estate values around Suburban terminal have improved consistently since it became a through station. Tied together with underground passages to the station, there are 11 buildings of Penn Center, plus Comcast Center. Together, they average 33 stories. Since the 1980s, 86 stories have been fully renovated equalling those un-renovated stories built in the 1960s (50 years is a normal life-cycle before a major renovation.) Over 164 stories have been built anew in Penn Center. In 2006, the redesign of the centerpiece Suburban Station was completed; improving HVAC, waiting areas, retail, passenger flow and the 20 commercial stories above (called 1 Penn Center)… all earning it an Energy Star rating.
Only one-half mile from Suburban Station (but a world away from office work), the former Reading Terminal has been redeveloped as the main Exhibition Hall of the Pennsylvania Convention Center. A touristy, mid-scale mall of almost 120 stores, called The Gallery, adjoins the new Market East Station at the end of the commuter tunnel.
After suffering decades of disinvestment, this area also has benefitted greatly from the 1984 through-routing. The Convention Center successfully got through most of its second phase expansion despite a deep real estate recession. The Gallery has stabilized through the upheavals in retail anchors and the station’s overall success has given Amtrak reason to consider it as its preferred stop for high-speed rail.
Making greater passenger convenience, the Commuter Tunnel integrates the former Reading (5 lines) and Pennsy (8 lines) to bring customers directly to each others’ stations without the hassle and cost of transferring. Through-routing clearly contributes to sustainable downtown redevelopment around these three stations.
Rounding-out the trio… One mile west of Suburban is the model of how to honor rail’s past and invent the future. Unlike many other cities, Philly kept its jewel, Penn Station. Finished in 1933 by Burnham’s successor firm, Penn Station’s grand neoclassical exterior blends well with an exquisite art moderne interior with aesthetics reflecting Philly’s transit innovations. Owned by Amtrak, it was renamed as 30th Street Station. But its owner has kept every bit of the original grandeur; making it a joy to visit and even relax.
Philadelphia 30th St. Station. Photo Credit: Flickr/afagen
As grand and gorgeous as this station is, real estate redevelopment along the Center City mile between 30th and Suburban stations has improved dramatically since through-routing. Looking on this model from 30th Street towards the CBD, south of the tracks now has 60% more floor space than 30 years ago and nearly all of it is updated or new. North of the tracks, more than half of the buildings have been renovated. An urban wasteland also has been transformed on 30th Street side of the river. The sleek, glass tower to the Station’s right (in the photo) is The Cira Centre — also designed by a star architect’s firm (albeit 100 years later than Burnham). The 29 story tower now serves as commercial anchor to the area; built above an ugly railyard that many earlier proposals had failed to conquer. A more sprawled anchor is nearby University City; hosting campuses for Drexel and Pennsylvania universities and Philly’s largest medical center. This area was in particularly bad shape thirty years ago.
Fit all this into the big picture and Philly is relatively more transit-friendly than its larger rival, Chicago, which has similar per capita transit usage but no commuter through-routing.
Suburban Station borders Love Park, where young and old lovers come to encourage their relationship and be photographed under the iconic LOVE sign. Since Suburban is has the greatest traffic, the Park also has a Visitor Center that looks up the diagonal of the Ben Franklin Pedestrian Mall and museum campus; somehow capturing urbanity’s best. As I walked through at lunch hour, a rapper in the Visitor Center bandshell was singing about his struggles with and love for his father. When I absorbed all this and entered the best commuter station I have ever seen, the uplift was too multiple and I wiped my watery eye.
How Philly’s Transit Could Improve: Reinvent SEPTA; Find New Funding
I agree with Aaron Renn’s 2012 post: “Philly’s commuter system has the greatest potential in the US to create a system on a par with the European standard; without major investments.”
SEPTA has been better than most region’s agencies at integrating commuter rail well with subway, light rail and busses. SEPTA even has revived trolley lines. A key example for the entire system is these modes integrate tightly within a block of these three stations.
Despite accolades from me and others, SEPTA still can improve on the road to fiscal sustainability by increasing ridership and lowering costs. Criticized in this “Transport Politic” post, SEPTA is not doing the simple, inexpensive innovations such as clearer map and signage that highlights the advantages of through-service. Also in SEPTA’s takeover from Reading and Pennsy over three decades ago, a bruising strike derailed an opportunity to bring commuter-rail up to rapid-transit labor efficiency standards. Instead, SEPTA has adjusted to fiscal realties by reducing services; and in other ways, doing little to contain the cost side of the equation.
As for Philly’s future transit improvements, refer to this “TP” post. While the proposed innovations focus on Center City and giving the public the most bang-for-their-bucks, some proposals seem suitable as Public-Private Partnerships. But PPPs still will require new public dollars. As a funding innovation, targeted special transit assessments in Center City might be worth a try for specific projects that show quick results.
I conclude with a telling anecdote about how SEPTA runs an integrated system and has flattened the rail hierarchy. At 30th Street Station, I was told to use my Amtrak ticket to get to the other two downtown hubs. After I expressed amazement that one rail system would not take advantage of an opportunity to collect again, the suburban conductor clued me in on a key to SEPTA’s success: “You have come into our system and our job is to get you where you need to go.”
I was so simultaneously startled and refreshed, I had to take a deep breath to recover before I could say to the conductor “Thank you.”
Photo Credit: Flickr/ddyates
Sunday, September 22nd, 2013
[ Today and Tuesday I'm kicking off a series by Robert Munson that reviews North America's train stations. Entries will be posted periodically as Robert writes them. Today is the set up followed by Philadelphia, and many more analyses that should surely get people arguing - Aaron.]
Before cities waste more time and money fumbling, let’s first describe how train stations should serve the 21st Century.
Symbolizing how America would lead in the 20th Century, Penn Station outdid Europe’s best. Then sixty years later, Penn Station became a metaphor for American transportation mistakes. In 1964, short-term economics demolished it. Ever since, the substitute has aggravated New Yorkers daily. They repeatedly have planned to make another station worthy of the world’s greatest metropolis. But, these civic campaigns lurch from one unnecessary obstacle to the next as the entropy of our government demoralizes all but the most stout of heart.
This series will shows how economics and politics can merge to make central stations into centerpieces of sustainable transit in major North American cities.
Of course, we have to start with the politics we’ve got. This is not encouraging… at least on the surface. But despite today’s low points, we should recall how civic movements preserved stations nationwide. Fearing Penn-like debacles in hometowns across America, stout hearts now have preserved 32% of Amtrak stations by putting them on the National Register of Historic Places. This great success repurposed many rail stations as community institutions. While many are barely kept alive as reminders of the prospering people we used to be, many stations today also could help our nation benefit from good transportation economics again. Stations should signal our national intent, much as they did early in the 20th Century; called by some as the American Century.
But, face the facts: our politics restrain the benefits of transit. Civic efforts to save a building are no match to change the outdated transportation agencies we keep alive despite their strategic failures to serve citizens, businesses and taxpayers alike. In analyzing Penn Station, we see its biggest flaw is faulty governance. This series explores how this problem is common to other cities and, then, prescribes how each locale can redevelop its station into its centerpiece for sustainable transit.
Today’s flurry of plans to improve central stations are either insufficient for the future or, worse, will repeat past failures. If efforts in transit towns such as New York, Chicago and San Francisco are fumbling, then car-dominated cities have a slimmer chance of success. But, their chances improve when they take steps — even modest ones — to remake the rules for land use and transportation so transit systems can compete on a level playing field with the car.
What Makes A Station Sustainable?
In this series, I review several central stations in North America to start defining a sustainability for transit that goes beyond helping the environment – one that also aids economic growth and helps achieve fiscal balance. In addition to a narrative, the analysis of each station details a scorecard that I adapted from an article titled “History and Prospects of the Rail Station” by Chris Hale from the February 2013 “Journal of Urbanism.” My adaptation is structured on Professor Hale’s three integrating principles; although the most heavily weighted principle also borrows from the concluding lessons of the seminal book The Transit Metropolis.
For “Functionality & Flow”, 18 of 100 points can be awarded for two internal station criterion: platform protection, safety and passenger flow; and secondly, concourse flow to shops and exits, or waiting areas … and, generally, trying to make the station somewhat pleasant amidst the rush hour crush of humanity.
For “Effective Connection”, 32 points can be awarded. This includes good design such as how welcoming entrances are. But over half these points are given for efficient transfers with buses, light rail, metro, taxis and cars. Bike facilities are nice. (To disclose my biases, surface lots are not nice and get zero points.)
For “Station Synergies”, 50 points can be awarded for a variety of criteria including vision, leadership, proximity and integration to pedestrian sheds of the CBD, transit agency competence, station business strategy, integrating transit cards, reasonable transfer fees, and trying to level the rules by correcting the underpricing of automobile travel.
If you’d like to see the detailed scorecard, here is one as completed for Philadelphia.
To organize the individuality of America’s diverse train stations and learn the similarities in their evolution toward sustainability, I propose four main categories. After the below introductory paragraphs, each category will have an example analyzed in a subsequent article that will be accompanied by its detailed scorecard.
A. The Likely Sustainables. While most cities plan to reutilize their central station, these places are actually doing it well. These stations serve compact cities and these economic advantages will help their transit system achieve fiscal sustainability in, let’s be realistic, the next two decades. Example: Philadelphia’s Center City stations.
B. The In-Excusables. Some stations should be leaders in Category A, but they have a fatal flaw. While serving relatively good transit metropolises (by American standards), these stations have one obstacle (often lousy politics) that blocks them from fiscal sustainability. Example: Chicago Union Station.
C. The Economic Engines. These stations are leading their systems to boost downtown economic growth; but, they must overcome long-term obstacles before their transit systems can get on a path of fiscal sustainability. These are usually neighborhood problems such as poverty. These regions (or often sub-regions) have long-term plans to coordinate their land use and mobility practices, but realistically they lack the tax revenue to attract private capital on good terms for the public. So if economic growth generates greater farebox revenue (instead of more cars), then this creates capital for public investment. Example: Newark Penn Station.
D. The Environmentals Only. These stations are not expected to do more than help their region meet federal clean air standards, a low standard for environmental sustainability. To reach higher levels of sustainability, these stations need another path because two strategic obstacles block them. First, Category D stations usually have a very small chance of contributing significantly to their sub-region’s economic growth; basically, too few people use transit to reap real economic benefits. Second, Category D stations have virtually no chance of leading their transit systems to fiscal sustainability; typically because there is too much sprawl and too much subsidy for autos and too little political will to change any of this. These stations appear to constitute about half of the 50 noteworthy stations being considered for this project. Because that is such a large number and because they are mostly Sunbelt cities that I have not studied in sufficient depth, these will be covered in the future.
Why Analyze Stations? Because They Symbolize The Public’s Deal For Transportation
The Golden Era of rails created many of America’s most inspired civic buildings; symbolizing the public-private partnerships that built the key transportation technology of the world’s leading manufacturing economy. Their deal was simple: Uncle Sam gives corporations the land to build the world’s best railroads to move the materials and people. The deal stuck: we became history’s fastest prospering nation. That smartly-incentivized deal trumpeted its success by building the last generation of great stations, most designed between 1905 and 1929.
That partnership crashed into the Great Depression. Think of its replacement as the New Deal. Passenger rails and their stations were not included as this mid-Century deal evolved in the 1950s to foster a consumer economy that heavily sold cars. Our car culture is still fervently loved by Middle America.
Today’s efforts to revitalize stations are stumbling badly and costing more than we seem to have. To succeed, efforts must be accompanied with new rules for a deal that allow stations and transit to serve as tools to promote economic growth for households and communities.
Clearly, the rules for a 21st Century transportation deal will be far more complex. Unlike the 19th Century, the land already has been given away. Nor can today’s governments who are perpetuating the car culture be trusted to institute new transit taxes. Nor should we trust them; having become broke and, now, probably lost the consent of the governed… or, at least for now, taxpayers.
Because stations can serve as symbols for transit to help supplant the auto addiction, redeveloping stations are important testing grounds for transportation’s 21st Century deal. How stations evolve and get applied to individual cities and metropolises certainly makes for interesting challenges. But developed well and using inspired placemaking, these stations might even win back enough of that love from America’s middle class.
Use Analysis To Overcome Obstacles Strategically
To varying degrees, most stations reviewed in this series have a common obstacle: the experience outside of the rail car is, let’s say, uninviting. There is no need to repeat here the litany of how the bankruptcy of commuter service and Amtrak’s lack of imagination has reduced rail station quality to sad, low levels over the last five decades.
However, there is a Simple Solution: Design stations so they are great places.
But, here’s the rub: we cannot afford the greatness of Grand Central anymore. Yet, each station can still be great for their town by contributing to its economic growth. To get beyond pretty places, our notion of Sustainable Design must prove how stations and transit serve Americans better than cars. Since cars are fast becoming unaffordable to more and more households and cities, transit advocates have our key economic opportunity to leverage.
Elevating stations as a priority results only when public and private investment increases in the central station, its network and their surrounds. This goal must out-smart the persisting tendency for city centers to move from stations and toward non-transit suburbs. While there are many causes, most relate to government’s outdated laws discouraging real estate entrepreneurs from arresting decline by using the economic advantages of compact redevelopment near transit.
My proposal for more Sustainable Stations is a synthesized consensus more than it is anything new: compact and mixed developments multiply the types, times and volume of passengers that use the station’s network. While “Urbanophile” readers and planners largely agree that Transit Oriented Development is necessary, doing it sufficiently cannot happen when governments are broke and our laws remain lousy… or, at least, our institutions still work against redevelopment.
When not on its track to sustainability, each city needs to develop new leverage — its specific deals — to make transit into a priority that can start to supplant our costly dependency on cars.
Having achieved its goal of saving stations but not achieving their economic viability in many cities, the national movement to save stations can use this series to re-strategize its participation in helping create vibrant central stations that maximize the growth of its surrounds and transportation networks. Preservationists can integrate more fully with the broader civic movement that needs to advocate for and protect the huge public investment needed to update transit and put it on paths to fiscal sustainability.
In developing this paradigm, the next article will introduce you to “The Sustainables” by analyzing one of North America’s great success stories: how through-routing has helped Philadelphia use transit significantly better.
Tuesday, July 23rd, 2013
As has long been expected, the city of Detroit has officially filed for bankruptcy. While many will point to the sui generis nature of the city as a one-industry town with extreme racial polarization and other unique problems, Detroit’s bankruptcy in fact offers several lessons for other states and municipalities across America.
The Day of Reckoning Can Take Much Longer Than We Think to Come
What’s most surprising about Detroit’s bankruptcy is not that it happened, but how long it took to get there. In authorizing the bankruptcy filing Gov. Rick Snyder talked about “60 years of decline.” He’s not joking. It’s been widely known that Detroit has been in trouble for a very long time.
Time Magazine ran a 1961 story called “Decline in Detroit.” Jane Jacobs described its lack of vitality in her 1961 classic “The Death and Life of Great American Cities”:
Researchers hunting the secrets of the social structure in a dull-gray district of Detroit came to the unexpected conclusion there was no social structure….Virtually all of Detroit is as weak on vitality and diversity as the Bronx. It is ring superimposed upon ring of gray belts. Even Detroit’s downtown itself cannot produce a respectable amount of diversity. It is dispirited and dull, and almost deserted by seven o’clock of an evening….Detroit today is composed of seemingly endless miles of low density failure.
Moving from urban planning to economics. She wrote in 1969’s “The Economy of Cities”:
This was the prosperous and diversifying economy from which the automobile industry emerged two decades later to produce the last of the important Detroit exports and, as it turned out, to bring the city’s economic development to a dead end.
These are both well known, but the record of troubles in Detroit even predates this, going back at least to Life Magazine’s 1942 article “Detroit Is Dynamite” which gave a prescient warning to the city just a year before 1943’s race riot.
For a city as uniquely troubled as Detroit to remain in serious decline for such an extended period of time before going bankrupt is a testament to the sheer resilience of cities. It also suggests that those predicting eminent doom for their own city unless it changes its ways are likely to end up as false prophets.
Indeed, Detroit’s day of reckoning may not even yet be fully here given that various challenges to the bankruptcy filing are expected. The fact that Detroit has limped along for so long suggests that cities may be able to survive nearly definitely as “zombie municipalities” similar to zombie banks. Though this may possibly end in a Greek style crisis at some point, a very lengthy existence as the undead would seem to be possible.
Decline Poisons Civic Culture and Sunders the Commonwealth
Detroit also illustrates that once decline starts it sets in motion a toxic civic dynamic that makes the tough choices needed to turn things around nearly impossible. Just as growth begets growth, decline begets decline, and part of the reason is social dynamics.
This comes about because in a city in decline — such as in late imperial Rome — people start thinking only about themselves and no longer come to see themselves as part of a greater enterprise or commonwealth. The city and suburbs, blacks and whites, taxpayers and unions no longer see their fortunes as linked. Rather than rising and falling together, it’s every man for himself.
When the pie is growing, it’s easy to come to an agreement over how to divide it because everybody can get a bigger slice at the same time. But when the pie is stagnant or shrinking, zero-sum thinking takes over. To make a sacrifice is seen to in effect allow someone else to profit at your expense. Perhaps these dynamics were present latently before, but tough times bring out the real civic character.
In Detroit’s case everyone from public employee unions who refuse to give up any of their benefits (and will no doubt fight to deny the bankruptcy filing) to suburban towns that would rather pretend the city does not exist have played a role in setting the disaster. With nobody willing to sacrifice for the greater good, prisoner’s dilemma logic results happen. You can see this playing out in nearly any troubled American city. By contrast, it seems to be healthier places like Denver that have managed to build stronger regional civic consensus. It’s simply easier in those places.
Instead, Detroit chased conventional wisdom approaches and fad of the month type endeavors ranging from constructing the fortress-like Renaissance Center to the People Mover to former Gov. Jennifer Granholm’s “Cool Cities” program, none of which did anything but generate hype. What they all had in common is a transfusion of subsidies to the city (and taking on debt) rather than building a consensus around addressing the real issues.
America Doesn’t Learn Lessons From the Past
The last thing Detroit teaches us is that America too often doesn’t learn from its mistakes. Detroit’s troubles have been evident for quite some time, yet it’s hard to see that many other post industrial cities have managed to carve out a different path. Rather, they pretended that Detroit’s fall was somehow unique due to its auto industry dependence – and managed to ignore other failed cities as well – while embarking on the same turnaround strategy via conventional wisdom and silver bullets.
They have even managed to ignore failures much closer to home. Booming new suburbs can look just 5-10 miles down the road to see yesterday’s hot spot now turned into a festering mess of dead and dying malls, declining schools, increasing poverty, and falling home prices. Yet most of them are simply replicating the same pattern that is destined to fail financially over the long term in any region without either severe building restrictions or very high population growth.
Sadly, none of these augur favorably for change. Detroit may continue to garner special international attention as a train wreck people can’t stop watching, but less spectacular slow motion civic failures seem likely to remain commonplace unless somebody finds a way to overcome these forces.
Further Reading on Detroit
I have been chronicling the story of Detroit for quite a while on this blog and the postings on Detroit have generated more readership than those for any other city. This shows the profound hold the city has on the world’s attention. Here are a few previous articles you might be interested in if you haven’t read them yet:
The Reasons Behind Detroit’s Decline (by Pete Saunders)
Yes There Are Grocery Stores in Detroit (by Jim Griffioen)
Detroit: Urban Laboratory and New American Frontier
The Other Side of Detroit
This post originally appeared in New Geography on July 20, 2013.
Wednesday, June 12th, 2013
A few items hit the news recently about better transport in Indianapolis. The first is this Streetfilm featuring Mayor Ballard talking about his bicycling initiatives. If the video doesn’t display for you, click here.
One item highlighted is the Indy Cultural Trail, a truly unique downtown trail system that took eight miles of lanes away from cars and gave them to people in a system that includes a super high-quality separated bike path, public art, unique lighting and signage, etc. I’ve been hoping to do a story on this for some time, but don’t have photography yet. Stay tuned.
Another is an announcement of a 500 car all electric car share system based on the Paris Autolib’ program. This will be the largest all-electric cars share system in the US. It’s also the first foray into the US for this company. The system will feature 1,200 charging stations at 200 locations that are available to the public, and the city and others are looking to use it to reduce their fleet size and also to support the city’s goal of converting its entire vehicle fleet to “post-oil” technology. This is a pretty sizable system for a city like Indy, though it appears that full rollout is years away, so this is an aspirational announcement.
There’s also a bike share system that was just announced, but it’s very small and appears to only be focused on the Cultural Trail.
Of course I’d be remiss if I did not mention the huge elephant in the room here: the Indianapolis Department of Public Works. Despite these first class types of endeavors, DPW still can’t build a decent street. The streets they build in the urban core are actually worse than what a lot of suburbs are building. Both the Cultural Trail and a similar project on Georgia St. were outsourced to non-DPW designers to make them happen. Until an updated street design manual with 21st century approaches to street design is put in place, there’s no way Indy can get an overall grade of anything higher than “Incomplete” for its liveable streets agenda.
In the meantime, the Cultural Trail, car share, etc. can be celebrated and enjoyed.
Oh, I apparently missed this follow-up video that highlights the green stormwater detention and landscaping on the Cultural Trail. If the video doesn’t display for you, click here.
Tuesday, June 4th, 2013
[ This week Eric McAfee takes a look at phenomenon that is on the rise in America today - suburban blight. Early generation suburbs across America are falling into decay, bringing with them all the ills we have traditionally associated with the inner city. Eric highlights an example for us in Kansas City - Aaron. ]
Over the past century, the word “blight” has undergone a curious expansion in its denotations. It was originally a botanical term referring to a disease characterized by discoloration, wilting, and eventual death of plant tissues. In contemporary parlance, however, I suspect a far greater number of people use the term in combination with “urban”—a metaphoric reassignment of the characteristics that organic plant matter can suffer, only this time applied to non-organic human construction. So urban blight appropriates characteristics of plant disease but in a sociological form, in which the tissue of a city suffers dilapidation, underutilization, or outright abandonment. In contemporary life, it’s hard to imagine and definition of blight without at least some reference to urbanism; such is the case with Merriam-Webster and Dictionary.com at least.
Anybody getting this far in the essay is probably well familiar with urban blight, not just as a label for a certain condition but its physical manifestations. But does blight always have to affect urban settings or the inner city? In the last 25 years, a new type of blight has emerged in America, affecting post-war, automobile oriented, outer-city districts. It requires little semantic stretching to call it suburban blight; I can think of no more appropriate label, since it is characterized by the same disinvested conditions that urban America experienced half a century ago. But does it ever look as bad? After all, we don’t typically associate a three-bedroom house — with a big front yard and an attached garage — with decay or neglect.
While I’m sure there are plenty of other, more persuasive examples, Kansas City offers the best visual evidence I have ever seen that serious blight can afflict the suburbs in equal measure. The Bannister Mall area, about 12 miles south of downtown KCMO but still within the city limits, was a flourishing retail and residential corridor as recently as 1990, but it took a significant turn for the worse later that decade. As dead malls go, it’s a well-known one: websites like Labelscar and Dead Malls chronicle the one-million-square-foot mall’s downfall (first opened in 1980) in great detail. Needless to say, it follows similar patterns seen in metros across the country: a decline in the desirability of the apartment complexes in the area forced many of them to cater to a lower-income population. This influx of Section 8 tenants, in turn, caused an uptick of crime in the mall by the mid-1990s, scaring away shoppers. By 2000, the first of the major anchors closed; over the next six years, the other three department stores followed suit. For a few of those years, the mall managed to hang on with mom-and-pop in-line tenants. But these local businesses only chose to locate at the mall
because of significantly lower leasing rates, and by that point the mall was already over 50% vacant. The meager revenue proved insufficient to cover expenses for such a large structure, and by spring of 2007, the Bannister Mall closed completely. Various developers floated proposals for the site, the most lucrative of which was a sporting complex for the MSL Kansas City Wizards, combined with office and retail. A Tax Increment Financing (TIF) proposal helped to generate the funds to demolish the mall in early 2009, but the national economy had soured enough by that point that nothing further has materialized.
The remainder of this essay explores the current conditions of the area through an array of photos—not just the Bannister Mall, but also the extensive regional shopping cluster that once surrounded it. It is a grim site to behold these days. Here’s what the Bannister Mall looks like today:
And here’s a map of the area, in which the mall sat at the northwest corner of Bannister Road and Hillcrest Road
Sitting at Hillcrest Road and looking to the west, a motorist will see nothing more than a vast, crumbling parking lot with a pile of gravel as its centerpiece. And it goes on:
And on and on:
Very little of this parking lot is accessible these days; most has been barricaded.
The east side of Hillcrest Road doesn’t look any better. Some might argue that it looks worse: it includes several independently operated strip malls tethered to big-box anchors, the vast majority of which are completely vacant.
Because the buildings are still standing but have suffered from a decade of neglect, they enhance the feeling of desolation far more than the vacant parking lot where Bannister Mall once stood.
Sometimes its possible to guess the previous tenant, based on colors or architectural details associated with a certain brand. On the slightly zoomed-in photo below, my suspicion is that the store on the left, with the big red block as an entrance, used to be a Circuit City, which of course is now completely out of business.
Incidentally, the strip mall above is in better condition than most: as of the fall of 2012, it still had at least a few tenants:
Yes, it’s that old mainstay of struggling suburbia: the notorious Burlington Coat Factory, known in many circles as “the Grim Reaper of the retail world”. I’ve written about it on this blog before, because it’s no different in Indianapolis or Cleveland or Philadelphia or Anchorage. Clearly the corporate strategy is to locate in depressed big-box settings, which not only keeps its expenses down but improves the stores’ accessibility to its target low- and moderate-income demographics. Burlington Coat Factory’s approach, however, has become so unsubtle that many people immediately associate the retailer with poor parts of town. And since BCFs tend to survive long after other middle-income retail tenants have fled the scene, situations like the Bannister corridor in Kansas City only amplify the retailer’s potentially undeserved seedy reputation. In this particular strip mall, the only other surviving tenant was an urban-oriented apparel store whose name was unknown to me. The rest look like this:
According to the buzz online, the storefront next to the Burlington Coat Factory used to be a Wal-Mart, but it, too, flew the coop. I’m not sure I believe this though; nothing I could see suggested the appearance of a former Wal-Mart, though the magnitude of this shopping node would have made it a smart location for the world’s number one retailer back in its heyday. Here’s a distant shot of the strip mall, revealing the small remaining trickle of lifeblood in the distance:
This stretch of Hillcrest Road also offers a number of interesting outparcels, presumably used as restaurants at one time. All of them are vacant. The first outparcel that a driver will see has a familiar look:
Tropical Palms Restaurant may be closed, but the distinctive appearance of the building hints at its likely origins. I could be wrong, but the striped awnings, the brickwork, and the trim all evoke an aged prototype of Applebee’s. (Inter alia, the awnings have a greater variety of stripes these days.) It would make sense if this were an Applebee’s, since the restaurant megachain has its headquarters in KCMO. Other shuttered restaurants sit nearby.
Again, many of these outparcel structures have distinct enough design features that a good pair of eyes (or anyone familiar with the Kansas City chain restaurant scene in 1992) could discern what used to inhabit them.
Apparently Luby’s Cafeteria once had locations in the Kansas City metro; these days the small chain survives almost exclusively in Texas.
Only one of the outparcels suggested it hosted something other than a restaurant:
Continuing north along Hillcrest Road as it approaches its terminus at East 87th Street, the abandonment is most pronounced.
With an unusual combination of bold colors and a formidable size, I cannot guess what tenants this big-box contained two decades ago, though a Google Streetview suggests, from a handful of cars in the parking lot, that was still marginally occupied as recently as September of 2011. Across the street, an isolated big box shows traces of life, evidenced by the few cars parked at the far-right margin of the photo.
But, upon making a u-turn and reverting southward along Hillcrest, another strip mall on the west side of the street (the same side as the former Bannister Mall) is so derelict that all entrances have been blocked off.
I wouldn’t have dreamed of driving through regardless; the potholes would have been murder on the tires. But I could still pull into the little alcove between the access road and the barricades so I could snap a few more photos.
The labelscars left by old tenants revealed the following: a nail salon, a tax preparer, a beauty parlor, a dry cleaner—in other words, the shopping center was only attracting minor, lower-tier tenants before it closed completely, just as was the case with Bannister Mall. What’s particularly interesting to me is that, even though the privately-owned shopping plazas were uniformly derelict, the right-of-way itself—city managed Hillcrest Road—was in surprisingly good condition, and it was even undergoing some minor repairs while I was there that day.
Notice that the road is four-lane, with a median and copious turn lanes. When the Bannister Mall flourished, this was no doubt a bustling corridor, but these days a person could crab-walk down the middle of the street with little threat of contact with car. The only reason Hillcrest Road was built for such an LOS was the retail it served.
After continuing southward to return to the Bannister Mall site where Hillcrest intersects with Bannister Road, the sign for one other prominent retail pokes up above the slope.
Yes, a Kmart still survives, even as its competitor, Wal-Mart, fled the scene of the crime years ago. Such is the fate of this once mighty budget department store. Kmart has persistently failed to compete with Wal-Mart or Target, and it has only survived by clinging to Wal-Mart’s discarded suburban fragments. In 2010, I blogged about how Kmart has resigned itself to locations that neither Target nor Wal-Mart will touch; the dying old chain can only compete because there’s nothing else around for miles. Such is the case with Bannister Mall, and it doesn’t get much better at other smaller retail nodes in southeast Kansas City: about a mile east on Bannister Road, the Robandee Shopping Center is in nearly as sorry of a state. This portion of the Kansas City limits declined at the same time as the now-prosperous suburb of Lee’s Summit (pop. 91,000 in 2010) skyrocketed.
Yes, Bannister Mall and its ensuing suburban blight is a byproduct of white flight. Similar life cycles first emerged all over America in the 1950s, leaving impoverished urban inner cities in their wake. Meanwhile, the earliest suburbs, preferred destinations of the emergent post-war white middle class, are now routinely showing their age. All too often, their demographic profile is similar to the inner cities, but with a determinedly auto-oriented suburban appearance. For those of my readers in Indianapolis, the 1990s trajectory at Bannister Mall eerily parallels what happened in the Eagledale neighborhood and Lafayette Square Mall over the last twenty years. (I blogged about Lafayette Square in the same article where I explored Burlington Coat Factory, which—surprise!—is a tenant at the aforementioned dying Indianapolis mall.) In both Indy and KCMO, these auto-oriented districts fell within the city limits and fed into their already declining public school districts. The housing in Indianapolis’ Eagledale is almost identical to that in the Bannister Road corridor of Kansas City.
But the economic forecast of Lafayette Square and Eagledale still seems nowhere as bleak as that of Bannister in Kansas City, at least to me. Not only is Lafayette Square Mall still hanging on (though hardly flourishing, with about 50% vacancy), the sundry strip malls and big-boxes around it are surviving as well. None of them are thriving, and national chains have largely fled Eagledale to the suburb of Avon, just as they migrated to Lee’s Summit outside Kansas City. But the Lafayette Square district has hosted a huge variety of immigrant entrepreneurs, and now the area is known for its ethnic supermarkets, taquerias, hookah cafes, and restaurants catering to a few dozen different non-American cuisines. The city is teaming with the Department of Public Works to re-brand the area as an international marketplace. In addition, an emergent artist community has taken advantage of the cheap rents and leased an old Firestone outparcel near Lafayette Square, turning it into the Service Center for Contemporary Culture and Community: a performing arts space, library, community garden, and art gallery, taking advantage of the area’s eclectic demographic mix. Eagledale in Indianapolis may no longer be a middle class neighborhood, but it doesn’t look like the aftermath of a nuclear holocaust.
The Bannister Mall site has stumped developers and city officials over the years, since southeast Kansas City in general seems to be evading any sort of organic re-invention. I suspect that Kansas City, generally a prosperous metro area, has its own immigrant-influenced equivalent to Lafayette Square/Eagledale in Indianapolis, but the old Bannister Mall certainly isn’t it. This variant on socioeconomic blight poses a wicked challenge. I’m not holding my breath for the hipsters or the gays to colonize it, the way they are in some of Kansas City’s formerly dying old walkable neighborhoods closer to the central city. And the yuppies won’t come in later to gentrify it either. The blight that afflicts Bannister and Hillcrest Roads has yet to reveal a treatment.
This post originally appeared in American Dirt on November 30, 2012.
Tuesday, February 12th, 2013
As we prepare to wrap up this series, let’s review where we’ve covered to date.
In the first post, we set the context for Chicago’s ambition to serve as the transportation center for the manufacturing and consumer economy; as symbolized by the 1933 World’s Fair. Audaciously declaring Chicago’s leadership during a deep depression, the economy that emerged had a policy stabilizer, the New Deal, that also was coined in 1933. That political economy peaked in the 1960s, as did Chicago. After Boss Daley died, the ensuing 15 years of political chaos threw Chicago’s ego into a tailspin. Then almost miraculously as the largest example of Rust Belt revitalization, Daley’s son righted Chicago as businesses and people started returning. Chicagoism — and its spirited ambition — had been revived.
The second post gives Daley credit for rebalancing the city with its suburbs and pioneering policies for “greening” America’s cities. But as it turns out, “green” was not good enough for sustainability to grow. A “green” strategy could not balance the environment with economic growth. Equally bad, governments notorious for their corruption also became broke and dysfunctional. Despite revitalizing great swaths of Chicago, Daley suffered the fate of most mayors: he left a fiscal mess. It looks now as if broke governments are suppressing Chicago’s economy; possibly explaining its poor performance in the 2010 Census. What is more, it neglected to update the infrastructure that made it made it the Second City.
In the third post…. Attacking key fiscal problems in January 2011, Rahm’s campaign introduced the concept of fiscal sustainability. To keep that promise, his administration accelerated the reinvention of those public services that required little capital. Rahm impressed citizens — particularly during his first 100 Days– that their government could move Chicago forward again. Contrary to a century of evidence and folklore, Chicagoans began to think their government could be more accountable.
The after-affect of politicians who promise too much to get elected has been dubbed the sophomore swoon. Rahm beat his with a multi-benefit strategy that gave him enough two-for-one victories that kept his popularity high, despite budget cuts causing detractors. But with the low-hanging fruit largely harvested, Rahm had to break into new territory.
The fourth post analyzes two breakthroughs in September 2012. First was the announcement that Rahm had reduced the current budget deficit to less than any of the previous four years of red ink. For skeptics, fiscal sustainability went from a pipedream to the light at the end of the tunnel.
A day later, the second major innovation helped many more people see the Big Picture. The City published the Action Agenda, Sustainable Chicago 2015. Now, economic growth through new industries would aid environmental balance. Equally important, transporting people and goods became a higher priority than Daley’s second decade.
These breakthroughs indicate that Rahm is synthesizing how sustainability works in the political sphere. This is our platform to answer this series’ Big Question: Are we positioning to earn the fifth star on Chicago’s flag? We explore that next.
How Chicagoism’s Sustainable Update Suits the Flag
Before I dig into why Chicagoans deserve another star in their flag for rationalizing public services to fit a sustainable economy, you might link to a fun post on “Chicago’s City Flag”. It gives insight into why this flag is a prominent symbol of more than government and probably feeds Chicagoan’s allegiance… and perhaps its windiness, too.
Consider the flag as a history of how Chicagoans sell a somewhat improbable future; but by dint of human will, the improbable somehow gets done.
That first star symbolizes humble beginnings. Fort Dearborn was an outpost on a swamp that Native Americans would not settle; complaining of the smell of onions. Building a transportation center on a swamp is proof positive of Chicagoan’s entrepreneurial talents… and perhaps its windiness, too.
The third star was the 1894 Columbian Exposition when Chicago built this fantastic great White City within a dangerous and downright filthy factory town. (And to repeat a known fact, the pitch to The International Exposition Committee earned Chicago its “windy” moniker.) After convincing the world of its noble intent, Chicago was positioned to promote itself as the commercial center of a great continent.
The flag’s fourth star represents the 1933 World’s Fair that improbably boasted about Progress during the worst depression this nation had seen. For the next four decades, Chicago centered the melding of the nation’s manufacturing and consumer economies. Ambition achieved.
Transcending all this improbability, that second star may be today’s most useful analogy. It symbolizes Chicago’s rebuilding after the Great 1871 Fire. Arguably the western world’s greatest urban makeover, Chicago quickly introduced the steel-frame skyscraper, innovated modern building codes and vastly raised property values of what had become a glorified swamp. Three decades later, this fledgling town would hold 500% more people and became the nation’s second largest city by the 1901 Census. Many 19th Century cities had fires and rebuilt. None did so with keener intent than Chicago.
Consider why this analogy offers insight today. The 20th Century’s great domestic calamity was to hollow out America’s cities, usually the locus of metropolitan prosperity. Sufficient research shows cities add value and create profit better than suburbs. Also seemingly unknown to our mistaken mid-century impulse to sprawl, cities are more environmentally sustainable. Merging these two facts into one strategy — to build new industries to improve the environment — should keep Chicago as The Second City for decades to come.
While possibly an exemplar to help other cities retool, the data shows Chicago has slowed to a crawl in today’s real estate depression. We have discovered that broken governments are weak problem-solvers; aligned wrong to organize sustainable systems. Structured wrong, governments are ill-prepared to face a triple conflagration of dysfunction, insolvency and taxpayer rebellion.
This triple conflagration has obscured local government’s chief obstacle. Politicians incorrectly assume the public is unwilling to rebuild services. Rather, politicians should test this premise: if taxpayers first can hold their government accountable, then they will invest.
Accountability improves the chances for financial protection. Sustainability’s multiple benefits provide a reasonable return. Are we up to the task of rebuilding sustainably? Can we get multiple benefits with less?
Ingrained into its DNA, Chicago’s ego carried into the Sustainable Century with this telling jousting. Recall that Daley’s policy goal to be America’s greenest major city was challenged by Mayor Bloomberg echoing similar goals. Daley became uncharacteristically mute. But in a display of hyper-chutzpah, Rahm resumes the ambition to make “Chicago the greenest city;” again using the goals in “Sustainable 2015” as a synthesizing manifesto.
In a big city, those changes get applied many ways. A telling example of Chicago’s intent lives in the details of its October 2012 pronouncement that its Complete Streets program produced the “Greenest Street in America.” This video shows how the main street of a 19th Century industrial neighborhood and run-down during the 20th Century is, now, being regenerated sustainably; investing public funds to reduce maintenance costs, creating a market for sustainable streetscape products built here and, as a multi-benefit, attracting other commerce to an area that needs it.
Despite all this progress, sustainability’s weak link is government. Whether the problem is endless red ink or inadequate services or corruption, few politicians propose the missing part of the mix: we must raise new taxes. Taxpayers rightfully will resist; because they know their government is corrupted and new revenue only compounds that waste.
So what is the cure-all for government’s ills? Consider that public financing of campaigns gets at the root cause and should be seriously considered as prerequisite to higher or, certainly, new taxes.
While I clearly am fueled by Chicago’s long-winded boosterism, even I admit that fine sentiment about fiscal sustainability, realignment of Illinois’ powers and public financing of campaigns will butt heads with entrenched interests who created the mess.
To make sense of this fine sentiment and keep believing in a sustainable update, this fifth star will be Chicagoism’s best boast. To put time constraints on what otherwise could be constant improvement, let’s work with Rahm’s timeframe of achieving a sustainable framework by 2015.
That gives us three years. How do we make the most of this year just started?
Where Are the Pivot Points in 2013?
Rahm’s January 2011 campaign promise to achieve fiscal sustainability looks out today on to an incoherent battlefield. Instead, our city needs a unified team to move forward. Frankly, Rahm hasn’t had enough help from Chicago’s constituent parts.
- Citizens’ first impulse on a service cut is to complain, instead of figuring out how to do without or a new combination of doing something ourselves.
- Union officials negotiating labor contracts for the public’s employees seem unaware that their employer is going down.
- The private sector, the masters of efficiency, have largely not addressed how to improve services with less; even though their businesses depend on services and infrastructure. And…
- The State of Illinois? Well, don’t get me started. I’ve said an earful about them.
When Chicago’s constituent parts are confronted with the enormous changes required to stay solvent, hard feelings could rule. While this anger will not change Rahm’s reelection in 2015, his next big move will be to the Senate in 2016. As I view this context, Mayor Emanuel has two goals for 2013.
First Goal: Get Chicago on the path to Fiscal Sustainability. 2013 is a short window to make the toughest cuts and have contract disputes. Most of 2014 will mend fences, Furthermore, we cannot count on the next Mayor having either the force of Daley’s power or Rahm’s popularity. Or, look at it this way: based on its history, what are Chicago’s chances of being run by three successive political geniuses?
Second Goal: Make peace with a new deal. By turning combatants into a constituent parts that work together, new social contracts make peace. Rahm will call it what he wants — whether it is The Sustainable Deal, The Third Way, or an appeal to constituent ambitions like Chicagoism. But all deals serve the same goal: satisfy enough people so they work together for a better future.
Rahm may know the next moves in his campaign for fiscal sustainability. But, we don’t. And we are not in the discussion; unless we put ourselves there. So before the 2013 window of opportunity closes, let me suggest three practical next steps or Jobs.
Not surprisingly, each Job correspond to Chicagoism’s 3R principles.
Job #1: Sketch The Deal for Infrastructure Updates. Rahm’s Chicago Infrastructure Trust will do too little; unless it gets public capital. Since Uncle Sam has retreated and Illinois is broke, Chicago’s taxpayers must fill the void to reverse the two decade backlog of maintaining what we have.
So as part of the deal with taxpayers, Rahm needs to propose a new Realignment of taxing authority. Research shows that if taxpayers get a tangible service, they are likely to vote for the increase. Illinois may resist and want their take so they can pay long overdue bills. If so, we got our chance to expose their abuse of their taxing authority and how it is paying past mistakes instead of fixing for the future.
Job #2: When Rahm’s current Fiscal Sustainability Plan A does not work, propose Plan B. When Reinventing labor-intensive services doesn’t reduce the red ink enough, then Reinventing Radically needs to be proposed. The most likely pressures making obsolete Rahm’s Plan A will be the fiscal impact of unpayable retiree benefits. Fair or not, the popular perception is these benefits are making every public service hurt. It is further apparent from the teachers’ strike that too little fiscal progress with existing employees can be made under current laws and using contract negotiations.
While a sustainable deal for retiree benefits probably will be settled in the courts, Rahm starts the political side of the renegotiation process — and a “Third Way” — with an aggressive Plan B that is believable enough to get us to Fiscal Sustainability.
Job #3: Propose campaign finance reform. There was a powerful tone-setting symbolism of Rahm’s first actions in what I called “The 5 Ethical Executive Orders” and his Task Force on Tax Increment Financing. But, the storyline of a new-sheriff-in-town now needs its second Act.
Part of the deal for public capital could be to elect a subsequent CIT and have the election waged with public funds only used for rational, intelligent debate about how to maximize public investment for the public good. And as a grand coup for taxpayers and citizens alike, Rahm can really boost his popularity by having his successor also elected only by using public funds (certain Supreme Court rulings notwithstanding.)
If Rahm does all this, then we got our deal… and protection for our money’s worth.
All three of the above proposals still need work. Since they have already been proposed in different form, try a succinct version and revisit The Urbanophile September 21 roundup for details.
While keen proposals are important, public perception is key. Made cynical by special interests freely buying government favor, citizens and taxpayers will not easily believe in a new deal. So, it had better be one that makes sense using public dollars.
A productive tool to detail the deal in 2013 is to update the recent Action Agenda and entitle it “Sustainable Chicago 2016.” As discussed, the 2015 version merged environmental balance and economic growth; essentially proposing a Quality Of Life in the sustainable era.
The 2016 version should merge the following tactics into an updated Fiscal Sustainability. With the easy fixes done, Reinventing services now means sacrifice: deep budget cuts, causing noticeably fewer services and, importantly, new taxes for tangible improvements. These three components solidify the second leg of the tripod.
To make sacrifice politically palatable and strike a lasting social contract, the third leg of the tripod protects the deal: a major Reform of accountability measures… especially campaign finance. As stated, Rahm needs to finish what he started so well with his early ethical Executive Orders.
Rahm has assembled some very smart staff to write a deal’s details. But for consistency, City staff are free to borrow that social contract graphic from my fourth article. As part of my civic duty, I’ll even volunteer the deal’s tripod specific to the above three Jobs for 2013 and their corresponding 3R principles.
Does Chicagoism’s update help other cities find their “Third Way?” This could make a fertile field for some productive arguments in 2013. I’ve just thrown my gauntlet at your feet.
What Local “Third Way” Works For Your City
As you know, every city is different. Chicago’s “Third Way” depends on transporting people and goods more efficiently and, then, using that advantage to create value through new products and services. To build that infrastructure, Chicago also must overcome its greatest weakness: accountability to taxpayers.
But in most cities, that Catch-22 is similar: to get at your city’s strategic advantage, you will need better public services. And until citizens trust local government enough to invest in more efficient programs, there is scant chance those services will be sustainable with new taxes.
Here’s a quick example of the transition to sustainability from the place “Where the Rust Belt Started.” That quotation is a common analysis of Duluth, Minnesota. It also serves as its residents’ good-natured and transcendent boast. While visiting family near Duluth on the Thanksgiving just past, I was encouraged by how well Duluth has stabilized. It serves as an inspiration — and cautionary tale — for other small and mid-sized Rust Belt cities.
As background and interesting micro-analogy, Duluth boomed similarly to Chicago. Capitalizing on its proximity to raw resources, Duluth built North America’s westernmost inland port that got its start shipping iron ore, coal, grains and lumber (much of it through Chicago.) But sixty years after its status as a turn-of-the-century boomtown, those mines and Duluth entered three decades of struggle; ending the 1980s with a depressing 16% unemployment in the years after U.S. Steel closed its plant.
Today, Duluth has stabilized at 89,000; dropping only 15% from their peak. (Most Rust Belt towns dominated by an industry dropped twice that percentage or more.) Duluth did better by starting with the “eds and meds” strategy that was on the cutting edge of the 1980s. Schools and hospitals became the biggest employers. The new century updated this strategy by developing Duluth as a home to several bio firms and adding diversification. More recently, Duluth utilizes its strengths as a transportation hub that adds value to manufacturing wind generators, increasingly important to a sustainable economy in the sparse, flat places west and north.
And just to prove that the formula works to convert manufacturing messes, Duluth had the moxie to remake itself as a center for year-round tourism, despite its wicked winters.
Another thing Chicago shares with Duluth is leadership in the treacherous terrain to achieve fiscal sustainability. To its credit, Duluth led an early fiscal honesty with taxpayers. In 2002, Duluth investigated the true costs of its generous health benefits for its employees and retirees.
Using this actuarial investigation as its lead, a 2005 article in “The New York Times” described a fiscal epidemic in which these costs would bankrupt Duluth and many other cities. The article further explains how the Duluth study prompted a change in government accounting that hid benefits as an off-balance sheet item and, instead, started telling taxpayers more truth about what they owe employees. These new national reporting standards have resulted, today, in taxpayers finally being able to see the pervasive spread of this fiscal cancer.
After several years of finger-pointing, the otherwise good service of two Duluth mayors got tarred by the popular conclusion that politicians gave away municipal solvency in exchange for their reelection which, in turn, depended on the City’s employee unions.
Having tasted betrayal, Duluth’s taxpayers — as part of a national trend — will need a new social contract before they invest again. Until they get a deal they trust, services can be cut and modest changes made. When that doesn’t balance the books, Duluth also will need radical reinvention which, inevitably, requires taxpayer investment.
With health benefits symbolizing similar challenges throughout much of local government, other cities also need to map their transition to sustainability. To varying degrees, this sacrifice involves a deal. What is Duluth’s?
What deal gets taxpayers to move your city forward?
Chicagoism Series Index
Part 1: Lessons from the 20th Century
Part 2: Starting the Transition to Sustainability
Part 3: Reinventing Services, Starting Accountability Reforms
Part 4: How Chicagoism Works Again
Part 5: Where Do We Go From Here? (this post)
Robert Munson sharpened his interest in regional planning while serving on the Citizens Advisory Committee for the metropolitan plan released in 2010. Out of that experience, he started the website CCC or Chicagoland Citizens Central where you can find his profile. Readers can contact him directly at email@example.com.
Thursday, February 7th, 2013
The October 2012 publication of “Sustainable Chicago 2015” shows how much Chicago has changed under new management. In the Land of Clout (fairly or unfairly reputed), sustainable opportunity became the new operative.
Daley did his job well as Chicago’s booster-in-chief to global corporations. However at the other end of the spectrum, he knew his emphasis on “green” technology was being integrated too slowly to grow the enterprises of the new economy. Amidst all Daley’s enormous energy, Chicago still seemed to lack a clear strategy. I’d argue this let diversions creep in and contributed lots to Chicago’s reduced economic growth as revealed in the 2010 Census.
In the above 40 page booklet, Rahm clarifies this strategy by elevating economic sustainability to serve as policy partner to the environment. This Action Agenda has reasonably specific goals and synthesizes into a coherent whole many innovations of the Daley administration and those Rahm started to implement or propose.
The result: this Agenda paints The Big Picture and positions “Chicago as a hub for the growing sustainable economy.” With one key phrase, everyone gets it.
Rahm merges what Daley probably wanted to merge, but couldn’t given the distractions of fiscal fires and his Olympic quest. Rahm better seems to be persuading firms to expand offices here because he offers a more integrated vision. Pioneering a key part of the Chicagoism update, Rahm has prioritized finding the synergy in environmental and economic sustainability.
This concept’s rubber meets the road (or rails) in Rahm’s reshaping Chicago’s transportation-commerce nexus for the 21st Century. “2015” outlines several innovations, but gets back to basics by emphasizing upgrades for Chicago’s systems to move people and freight. Four of the 24 goals in the “Action Agenda” enhance mobility directly and a few more goals do so indirectly. This is key to serving as the Midwest’s commercial center and portal to the global economy.
To continue earning that role requires helping make products and services more sustainably. For that, Chicagoans must rekindle their entrepreneurial zeal and retool its consulting industry.
As a telling example of our post-Daley progress, recall the critique in this series’ second post: ten years of the Chicago Center for Green Technology had not developed traction that created jobs. So in July 2012, the City hired startup business consultants as part of CCGT’s new management team. Judging from CCGT’s December “Sustainability News”, the change is working well. This issue packages into the CCGT seven transit and energy innovations; including Chicago’s latest ambition to become a center to manufacture electric vehicles. Tell me if you know, does the City of Detroit have that platform to solve its job problems ?
Yet, the real debate in Chicago’s economic strategy is between specializing and staying diverse. I think the transition to sustainability can transcend this argument.
On the side of specificity creating value-added profits, an Urbanophile post argues how Chicago needs a calling card industry. Without this specialized high-profit edge, Chicago’s role in a global economy has fewer competitive rewards.
On the other side and describing a traditionally diverse economy, World Business Chicago’s “Plan For Economic Growth” has lots of something for everyone; offering ten strategies. To me, the document lacks strategic focus; reflecting Chicago’s economic diversity and its role in serving as transportation and commercial center … but minimizes our strength as an entrepreneurial problem-solver.
This dilemma of balancing higher-profit specification with diversity starts to get resolved in the “Action Agenda.” Of its twenty-four goals, ten add to economic opportunity and several more do so less directly. Not in the “Agenda” but serving as a more specific and transcendent resolution, consider converting Chicago’s 1990s role as the consultancy center that helped corporate America into the information economy and, now, re-tool those services to help corporations with the environment better. Largely, this point was made by the Urbanophile 30 months ago.
What About That Budget?
The second panel I see in Rahm’s Big Picture gives us hope: the Emanuel Administration has turned around a largely insolvent City (one that cannot pay its bills) and improved its chances of avoiding bankruptcy.
Since the City’s fiscal abyss was finally becoming public knowledge, Rahm’s January 2011 campaign promise of fiscal sustainability had its skeptics … including the author of this series. But the clearest bottom-line progress came with the September 2012 announcement (and fanfare) that the projected 2013 budget deficit would be 20% less than expected and the smallest since 2008. This was followed with a new budget that crowed about no new taxes or fees. (While “no new taxes” acknowledges the ‘de facto’ tax strike among even one of the nation’s most liberal citizenry, the “no new fees” is a promise to be watched before it can be believed.)
However, this fiscal progress should not conceal how the last penetrating recession exposed fatal flaws in most municipal budgets everywhere. The Daley Administration responded initially by treating a surface wound; by applying band aids, such as the sale of assets (as in parking meters.)
The Emanuel Administration has a more correct analysis; allowing for a more productive strategy. Yet, they have not gone public with a full prognoses: that the organs of government have been badly infected with unsustainable obligations and we need to rework radically those services and how they are paid for.
While some politicians and civic leaders have taken the easy route and pointed at pension obligations, the bigger truth should not be lost: facing chronic deficits, local government must actively develop alternatives to serve the public’s will and maximize tax dollars.
Even though Rahm reduces Daley’s deficit by more than 50%, he doesn’t solve the problem; he just sews up the hemorrhage. The slower bleeding from deficits still continues. This combines with the psychological pain of agencies failing to do better with less. Worse, another recession with a gridlocked federal government and its chronic fiscal cliff could re-open the hemorrhage and accelerate our day of reckoning.
Rahm’s partial progress toward fiscal balance is only a prerequisite to future growth. We also need to find the new investment that is required for us to compete. In this long, hard road back to health, fiscal sustainability’s middle steps must overcome these three forces: first, key costs are mostly contractual; second, bureaucracies resist improvements; third, policy remains corrupted. Let’s take a quick look at each force in order to reckon with it.
1. Controlling personnel costs requires near-constant focus. Since 78% of the City’s budget is personnel costs and most are contractual, the Emanuel Administration has an insufficient chance to convert a string of seven years of red ink into a surplus. To improve their chances (and ours), there are two options. First, they drastically cuts services and risks quickly becoming unpopular. Or second, labor contracts will need to be routinely renegotiated to facilitate the reinvention of services.
Without contract flexibility, the older and more bureaucratic services (which also are more likely to have expensive contracts) are more difficult to update. Suspecting that they are backing proven losers, taxpayers resist.
Worse… with personnel costs still voraciously eating the future at almost the same rate as Daley’s last years, there is no money to invest in the infrastructure required to compete.
2) Reinvention of services has a limited track record of producing fiscal savings required to avoid bankruptcy. To start that reinvention, Rahm early on told public employees that “competition” would be the operating principle for public services. Words like these seemed to improve City employees’ quality of work. But such talk also put unions on guard. Their tactical push-back seemingly meets most Mayoral moves. When these little resistances get taken to scale, anticipated or touted labor savings shrink to insignificance as tools to change century-long habits of spending more, yet getting less value for citizens.
Limits became obvious to me when teachers struck for a week last September, largely to minimize the discipline of poor teachers. Worse, teachers got a contract in which taxpayers will pay a premium to raise Chicago’s classroom hours closer to those of other large systems.
My question is: what caused Rahm’s lieutenants to take this bad deal? And specifically, did too many parents make the short-term complaint about losing their day care system for a week? Wouldn’t children be better if a longer strike resulted in teachers meeting real-world performance standards and, thus, reflect those that teachers are supposed to be preparing children for?
Today’s labor contract could be viewed as poison from a taxpayers’ standpoint. Over half the property tax goes to schools and is nearly their exclusive revenue source. Yet, this tax still bears no guarantee to get rid of the bad apples who lower the system’s standards. And of course, our fiscal reality is property taxes will have to go up to cover the premium cost of longer-hours which, again, carry no guarantee of improved performance. To boot, those taxes will go up on properties that have just lost 25% of their value.
Caught in this wasteful trap, who can believe that higher taxes will be invested well in our children’s education… or, even, our future? With our schools as a primary example, only radical reinvention leads to the belief that money is well spent.
3) Illinois’ 20th century corruption hangover went from worse to broke. While citizens and the media wag fingers at politicians for ethical improprieties, none cost as much as the decades-long deal for labor peace. There are multiple true costs; some discussed above. But the big one here is we have had decades of abusing democracy by letting public employee unions deliver campaign reelection funds and workers to legislators. Instead of protecting taxpayers and citizens, legislators have become dependent on public employees for reelection.
This political power gave leverage to employees that yielded generous benefits; often protecting them within the Illinois Constitution. These reelection gifts also bought their way into Illinois’ political hierarchy; best represented by the same man ruling the legislature for almost three decades.
This lack of political competition creates corruption and produces today’s lose-lose-lose situation: retirees cannot be paid the benefits promised; agencies will have to reduce benefits using disruptive insolvencies; and the resulting dysfunctional agencies inevitably hurt citizens and corporations who depend on public services.
What Is the Way Out of This Fix?
Rahm’s tactics worked well enough to get him through his sophomore year and still be popular. Despite his tremendous energy, substantial force of personality and genius at political maneuvers, I’m guessing Rahm has shown us his best stuff.
Look at his rebuilding the commerce-transportation nexus. This is at the heart of Chicagoism’s ambition for central status. Rahm put some of his best stuff into The Chicago Infrastructure Trust (CIT). He had to. Facing a broke state and a two decade backlog of fixing what we have, Rahm decided to raise private capital via the CIT. This is America’s first municipal experiment of such a Trust. And determined to make this work, Rahm used his best pay-back chips by bringing The Big Dog (President Clinton) to announce CIT over 11 months ago. CIT even got some seed capital from Clinton’s Sustainable Initiatives Foundation.
Since then, little of substance has happened. Talk and expectations remain high. They have to. We have paltry alternatives; given taxpayer resistance to fund these vital updates. Today with money scarce, expectations are muted.
The CIT is important for other reasons. The key one is CIT will require lots of public “buffer” capital to do the riskier, but needed, deals. With an expensive two-decade backlog of updates merely to put yesterday’s infrastructure into “a state of good repair,” taxpayers soon will have to back the riskier side of deals. Getting that public capital is an opportunity to strike a new deal with taxpayers; to give them a contract with the future.
How the CIT — and other initiatives — actually get going in earnest depends on how the above three obstacles start getting resolved in 2013. And that depends largely on Rahm’s level of citizen support. Will we tolerate the inconveniences when services get cut and labor peace gets frayed? Is our threshold high enough to tolerate a garbage strike in summer? To cut to the chase: Will those among us who squawk alot restrain ourselves enough for the common good and, instead, at least not squawk too much while better rules are written?
These inconveniences could be a tough test for a citizenry seemingly bred to bellyache.
But the bellyache, while not thoughtful, does indicate we are not getting our money’s worth.
So, the core question now becomes: how do we give citizens and taxpayers value?
Instead of Antiquated Labor Contracts, Focus on Future Social Contracts
Harken back to Chicagoism’s first installment which started with the 1933 Worlds Fair. This symbolically launched the consumer economy in the same year that Roosevelt coined its political complement, the New Deal.
How the 21st Century crafts a Sustainable Deal depends on the genius of someone like Rahm. For example, the CIT and its need for public capital is Rahm’s opportunity to craft prototypes that convert our ‘de facto’ tax strike into a deal in which we willingly invest in again… because we have to. What is more, investing well is our new civic responsibility.
Despite Rahm’s impressive progress in two short years, distrust of higher taxes is the primary obstacle to Chicagoism’s update. Distrust breeds from the lack of accountability to taxpayers. Hence as part of their contract to invest in future infrastructure, we should include Reforming accountability measures as key to the deal.
Think of the annotated graphic below as a guide to how Sustainability’s 3Rs serve as principles of the tripod that steadies a deal so taxpayers see that their investment in the next generation of infrastructure is money well spent.
As we define the terms of a sustainable social contract for Chicago (which also can serve as prototype for Chicagoland), we can probe into how a contract serves the common good; that quaint notion that made our nation… and the one that “The Greatest Generation” understood so well that they pulled together great responses to the crises of their times.
To respond well to ours, Americans will need to transcend today’s un-civil war between the reds and the blues. I’m not betting that happens soon. In the meantime, we can be a beacon in our little corner around Lake Michigan. In the next and final article, we will review Chicagoism and see how it applies to where you live and to what your fellow citizens need.
Chicagoism Series Index
Part 1: Lessons from the 20th Century
Part 2: Starting the Transition to Sustainability
Part 3: Reinventing Services, Starting Accountability Reforms
Part 4: How Chicagoism Works Again (this post)
Part 5: Where Do We Go From Here?
Robert Munson sharpened his interest in regional planning while serving on the Citizens Advisory Committee for the metropolitan plan released in 2010. Out of that experience, he started the website CCC or Chicagoland Citizens Central where you can find his profile. Readers can contact him directly at firstname.lastname@example.org.