Search

Tuesday, July 22nd, 2014

Incrementally Transforming Kokomo Without Debt by Eric McAfee

[ Kokomo, Indiana is a small industrial city about an hour north of Indianapolis. It is one of the rare ones whose industry remains largely intact, with two large auto-related plants. This makes them different from the type of community that really has deindustrialized. Yet they fret that those who earn decent incomes in their town too often decide to live in the Indianapolis suburbs. Hence a program to upgrade quality of life in the city. It should be noted that while they've managed to do this without incurring debt, Kokomo arguably benefited more than any city in America outside Detroit from the massive federal auto bailout. Their civic improvements have in a sense been financed by a unique external windfall unavailable to others. Nevertheless, lots of places have received windfalls and spent them poorly. Cities may not be able to control our circumstances, good and bad, but they at least have some control over how they respond to them. This piece from American Dirt takes a look at Kokomo's response. Keep in mind it ran in 2012 and there are likely some anachronisms by now - Aaron. ]

Across the country—but particularly in the heavily industrialized Northeast and Midwest—smaller cities have confronted the grim realities of the unflattering “Rust Belt” moniker, and all of its associated characteristics, with varying degrees of success. With an aging work force, difficulty in retaining college graduates, and a frequently decaying building stock, the challenges they face are formidable. Cites from between 30,000 and 80,000 inhabitants typically boomed due to the exponential growth of a single industry, and, in many cases, the bulwark of that industry left the municipality nearly a half century ago, for a location (possibly international) where the cost of doing business is much cheaper. Essentially, everything the smaller Rust Belt cities had to offer is completely tradable in a globalized market; the resources that provided the town’s life blood are either depleted or are simply to expensive to cultivate further.

Reinvention is the only condition likely to save many of these cities from persistent economic contraction, but, with an overabundance of retirees and older workers, these towns lack the collective civic will that could be expected in larger communities with more diversified economies. An absence of young people intensifies (and, to a certain extent, justifies) the low level of civic investment in one’s own community; after all, if a resident is six months from retirement, how likely is it that he or she would support public investments intended to improve quality of life for twenty or thirty years into the future? For that matter, how likely will a population of retirees remain engaged to encourage or challenge major private sector investments as well?

By no means am I intending to denigrate needs and ambitions of the senior population; I’m merely observing that a stagnant Rust Belt city with this demographic profile will demonstrate vastly different priorities from a city rife with young families. While every Rust Belt city large and small must avoid obsolescence that results from the spoils of globalization, the smaller cities—which have tended to be dominated in the past by a single thriving industry—are less likely to claim alternative sectors and labor pools if their primary manufacturing lifeblood fails. A dying city of 80,000 may not exert the same impact within a region (particularly in the densely populated Midwest and Northeast) that a city of 500,000 would, but it is far more of black eye for the state than a town of 2,000 that has lost its raison d’être. This conclusion is obvious.  Many of these small cities must reordering of their economies comprehensively; while the state, the county, or private foundations may offer some outside help, the constituents of these cities themselves are typically the best equipped to understand how their city should evolve. Unfortunately, many of these communities aren’t yet even aware of the need for this reinvention, let alone which avenue to pursue in order to achieve it.

It is with no small amount of reassurance that I can assert that Kokomo, Indiana is not one of these latter cities.

No Rust Belt complacency on display here in the City of Firsts. Though as recently as 2008 it was on Forbes’ list of America’s Fastest Dying Towns, a recent visit shows much more evidence than I’ve seen of some comparably sized cities in the region that the civic culture is neither resting on its laurels nor wringing its hands about how much better things used to be. In fact, one of the Indianapolis Star’s leading editorialists, Erika Smith, recently visited the city, and, after receiving a tour from the Mayor, was pleasantly surprised by how proactive it has been in implementing precisely the type of quality-of-life initiatives largely perceived as necessary to help a historically blue-collar city stave off a brain drain or descend into irrelevancy.

I, too, recently received the Kokomo tour, followed by a meeting with Mayor Greg Goodnight, and I can also recognize some of the city’s most impressive achievements at shaking off the post-industrial malaise that saddled the city with double-digit unemployment rates as recently as a few years ago. Since then, the city has introduced a trolley system at no charge to users; prior to this initiative, the city had had no mass transit for decades. The Mayor pushed successfully to annex 11 square miles in the town’s periphery, therefore elevating the population by about 10,000 people. The Mayor’s team worked to convert all one-way streets in Kokomo’s downtown to two-ways, recognizing that accommodating high-speed automobile traffic in a pedestrian-oriented environment only detracts from the appeal. The team has restriped several miles of urban streets to incorporate bike lanes, and it has converted a segment of an abandoned rail line into a rail-with-trail path, branding it by linking it to the city’s industrial heritage. They have deflected graffiti from several bridges and buildings through an expansive and growing mural project. They have upgraded the riverfront park with an amphitheatre and recreational path. They have introduced several sculptural installations, the most prominent of which is the KokoMantis, a giant praying mantis made entirely of repurposed metal and funded privately. And my personal favorite: with the support of the City, the school superintendent has integrated a prestigious International Baccalaureate (IB) program to the public school system, including an international exchange program for young men from several foreign countries (a girls’ program should arrive in the next year or two) who live in a recently restored historic structure in Kokomo’s walkable downtown, attending demanding courses that bolster their chances of admittance in a coveted American university. Most impressively, the City of Kokomo has achieved all of this without incurring any public debt in the past year.

Obviously the individuals offering me this tour are going to make sure their Cinderella is fully dressed for the ball, and I recognize that not a small amount of the securing of certain infrastructural projects and transportation enhancement grants requires a political savvy that the current civic leadership has in abundance. And I don’t want to rehash Ms. Smith’s article, which more than effectively chronicles this approach at a macro level. In addition, Erika Smith recognizes, as do I, that very few of these initiatives (the IB foreign exchange program notwithstanding) are really particularly earth-shattering. But when most other similarly sized cities in the Midwest seem to be engaged in a race to the bottom, luring new industry through generous tax breaks (often initiated at the state level), Kokomo seems to recognize that a town lacking any amenities outside of low cost of living has to compete with dozens of other cities in Ohio and Michigan and Pennsylvania, and elsewhere in Indiana, that offer the exact same brand. Whether this investment yields a long-term return remains to be seen, but it certainly demonstrates the right gestures necessary to instill civic stewardship in a place whose decades of job loss have seriously scratched its mirror of self-examination.

What ultimately struck me about Kokomo—which Erika Smith only touched upon—was the level of design sophistication evident in some of these civic projects. I need only focus on a single location in the city, in which two particularly laudatory techniques are on display. At the intersection of Markland Avenue and Main Street, just south of downtown, the Industrial Heritage Trail begins its journey southward. Here’s a view as the trail terminates at its junction with those two streets, looking northwestward:

Here is a view in the other direction:

Continuing a bit further in this direction, one encounters this painted wall:

And, pivoting slightly to the left, another mural that is still in progress:

This photo series identifies two amenities that stand out for the astute decision-making that apparently took place during the implementation. The Industrial Heritage Trail clearly operates in a railway corridor, but it is not a rail-trail. Unlike the more common rail-trail conversion, this Kokomo trail did not incorporate the removal of the original rail infrastructure. The Rails to Trails Conservancy would label this approach a rail-with-trail, indicating that the trail shares the railway easement, typically separated by fencing. Rail-trails such as the Monon Trail in metro Indianapolis are still the more common practice. However, a growing number of communities are embracing rail-with-trails, not only because they obviate the need for costly removal of rails, ties, and ballast, but they reserve the rail infrastructure for the possibility that a railroad company may reactivate the line in the future. If the sponsors of Kokomo’s Industrial Heritage Trail had removed the infrastructure, the possibility of ever reintroducing rail along the corridor would be virtually nil. As it stands, the only conceivable disadvantage to rail-with-trails is that, in the event a rail company reintroduces train service, its close proximity to the path may prove hazardous to bicyclists or pedestrians. Otherwise, the decision to retain the railway not only helped to diversify options, it most likely saved a considerable amount of money.

The other smart decision was the site selection for those murals. The ones featured in the photos above are part of a growing mural campaign that the City of Kokomo introduced, and every one that I recall shows real foresight in the locational decisions. What makes them so good? The murals in the photos above front a public right-of-way, minimizing if not completely precluding the chance that later development will conceal them. I blogged a few years ago about an excellent mural in Indianapolis that showed wonderful care and craft in the entire implementation process…except where the conceivers chose to locate it. Not only did they paint on a cheap, cinder-block building that will likely tumble down if market pressures encourage new development in the neighborhood, but the mural also faces a vacant lot which is large enough to host a new structure that would block it completely, no doubt frustrating the community and pitting them against a developer.

Compare this to Kokomo’s murals. Here’s one a little further south on the Industrial Heritage Trail:

Again, it fronts the trail itself—not a chance that a developer will try to block it. And here’s another along a bridge underpass for the recently completed trail along the Wildcat Creek:

The original intention of the mural was to repel vandals at spot that previously suffered from it frequently; this approach has proven successful in locations across the country.  But it also sits in a park along a new greenway, so it should remain in perpetuity. Granted, Indianapolis has plenty of murals along retaining walls and buildings that front the aforementioned Monon Trail. Those, too, should survive far into the future. But in recent years, the City of Indianapolis has encouraged countless murals on the side walls of commercial buildings—sites where a blank wall faces a parking lot, where a building once stood. While these bare walls often scream for some ornamentation to help distract from what used to be there (another adjoining building), in many instances the parking lots will likely fall under increasing development pressure in upcoming years. Will the locals thwart development in order to save the mural? This remains to be seen, and I don’t want to base too much of an analysis on speculation. But it’s hard to deny that these public art investments seem less astute than the once I witnessed in Kokomo.

One could argue that Kokomo is merely taking advantage of the fact that it is jumping into the game relatively late; it benefits by learning from the mistakes of others. But decisions that stand the test of time also contribute their fair share to foster civic goodwill. Taxpayers are rarely too forgiving of poorly conceived projects, and several successive blunders, no matter how small they may be, demonstrate poor accountability. Only time will determine the return on investment, but Kokomo certainly has a leg up on many of its competing small cities. My suspicion is, if these projects stimulate the discussion and enthusiasm for proactive leadership that they suggest (Mayor Goodnight was re-elected last year by a landslide), the citizens of Kokomo are only beginning to stoke the fire.

This post originally ran in American Dirt on November 16, 2012.

Wednesday, June 18th, 2014

Houston: The City With No Limits

This week another city marketing campaign designed to attract residents, this one from Houston. Their tag line is “The City With No Limits” and they have a web site with that URL. There are also TV ads, etc. to go with it.

If there’s a city in America that has a truly distinct take on urbanism, it’s probably Houston. And Texas is a place with a clearly distinct vision of itself and presence within the American mind. Yet how does Houston choose to market itself? As just another member of the generic checklist club. The video below will give you a flavor. If the video doesn’t display, click over to my site.

With Houston’s traditional focus on being the “opportunity city” you’d think that some portrayal of how opportunity uniquely plays out in the city would be front and center. But it’s not. Other than links to corporate job sites, there’s really nothing on opportunity in Houston. It’s just spin on lifestyle. But if fashion shows, ballet, and light rail are your thing, is Houston really going to be your top choice? I’m skeptical. The Houston selling point is economic opportunity, but it’s only weakly presented. Other than facile fillips like the moon landing, little sense of the distinctiveness, culture, or value proposition of Houston and Texas come through here. The video and campaign also don’t convey any strong sense of limitless. In fact, my takeaway is that life in Houston operates within the exact same confines as virtually every other major city.

I’d have to rate this one as a miss, which is particularly disappointing in light of the “opportunity” presented by Houston to get it right and their willingness to cut against the grain in other areas. It just goes again to prove my axiom that while every company tries its hardest to convince you of how much different and better it is than every other company in its industry, every city tries its hardest to convince you it’s exactly like every other city that’s conventionally considered cool.

I don’t blame the agencies that create these things, by the way. I’ve done quite a bit of thinking and analysis and believe the underlying problems are structural and embedded in the initiative from the word Go. I may post more on this later.

Wednesday, June 11th, 2014

Life in Columbus

While I was in Columbus the other week I didn’t just interview the mayor, I also was interviewed by Columbus Underground, and the transcript of our discussion is now available online. Lots of stuff in there is not specific to Columbus, so it’s good reading even if you don’t live there.

Also, Experience Columbus, the city’s Convention and Visitor’s Bureau, is launching a campaign targeting 25-35 year olds in cities like Chicago and Washington, DC. They are going to be running ads in those cities, etc. with the idea of attracting those people to Columbus.

They also put up a site for that audience called Life in Columbus which is mostly content aggregated from various community sources like Columbus Underground, and thus is always changing. But the centerpiece of the site is a one minute video about the city, which I’ll present here without commentary. If the video doesn’t display for you, watch at Vimeo.

Thursday, May 29th, 2014

The Urbanophile Interview: Columbus Mayor Michael Coleman

I was in Columbus last week, and while I was there I was able to sit down for an hour long conversation with Mayor Michael Coleman. We talked about Columbus’ economic out-performance relative to the rest of Ohio, its secret sauce as a city, how it can gain better brand recognition in the market, Rust Belt self-disparagement, the city’s bicentennial, the role of Ohio State, and whether the city needs to develop a signature claim to fame – plus more as well.

If the audio player below doesn’t display, click here for the MP3 file. For those who prefer reading to listening, a complete transcript is available.

Mayor Michael Coleman. Image via City of Columbus.

Here are some edited highlights of our discussion. You can also read the complete transcript.

When I asked him what made Columbus different from other places in the state, Mayor Coleman didn’t hesitate to tout his city:

I have nothing negative to say about any of the cities in Ohio. But the truth is that they’re part of the Rust Belt. And Columbus really isn’t. Columbus is an anomaly in the state of Ohio. While all of the other major cities in Ohio are decreasing in size and population, increased poverty, all those things that are representative of a Rust Belt city, Columbus is just the opposite. We have a tremendous amount of young people that have moved into our community. Our average age I think is somewhere around 33 or 34 years old. We have gone from a brain drain city to a brain magnet city. And economic growth has been incredible. We’ve had 40,000 new jobs in the past three years. And it’s a city that really is different from the rest of the state. And I think if you look at the state economy, there’s one major pillar in the state economy – and it’s the city of Columbus.

I asked Mayor Coleman what Ohio should be doing to bring the rest of the state up to Columbus’ level of performance. His take:

Be progressive, a lot more progressive than what it is. The state legislature is a pretty conservative body. To some extent, they’re pro-business, but when you’re not pro anything else it frankly impacts the business development in a state. We’re very pro a lot of things in this city. We’re pro-business. I’m a pro-business Democrat. I believe in the creation of jobs and the quality of jobs. It’s part of what I do every day. I view myself as the top economic development officer for the city of Columbus. So we’re very pro-business, pro-development. But we’re also pro other things. I’m pro-gay rights. I’m pro-reasonable, rational gun control. I’m pro-human rights and human dignity. You add that mix together, of good jobs with a good life, it really makes for a vibrant economy.

One of the things that was a difference for the city of Columbus a while back was our income tax increase back in 2009. Now some people might criticize me for encouraging taxes — some have failed and some have passed in the past — but that one tax was the one that made the difference for our community in many ways. The philosophy at that time, back when the country was in the longest and deepest recession it had experienced since the Depression — including the State of Ohio, including the City of Columbus – was, “Are you crazy for wanting to increase income taxes in the city of Columbus?” In fact, I heard some people say, “You’re going to drive off business in the city.” And we heard from statewide folks, “If the state did that, businesses would leave the state of Ohio – like that [snapping fingers].”

So after some major cuts of $100 million, changing things we’d done, huge budget cuts in the City of Columbus – and the public felt those cuts; they saw it in the streets; they saw it in their homes; they saw it in the community – there was a realization in Columbus that, you know what, no one likes taxes, but we really like our quality of life. And so what happened was, the business community rather than leave the community, helped support and fund the campaign for a voted income tax. Now mind you, at that time, we were in a very deep recession – high unemployment, high level of misery in the state and locally – and for people to vote for an income tax increase at the highest time of distress in the community, was a feat unlike I’ve ever seen in this community, in any community. And the business community supported it.

We have a very smart population in Columbus, very bright, they’re very discerning. And they’ve not supported some tax increases. So our folks, they were able to discern as to what’s right for them and what’s wrong for them at that time. We recently lost a couple of tax increases. I’ll look back on it and say, “Hey, it makes sense. I get that. I understand why those lost.” This is the one that passed, and this is the one that made all the difference.

We were at a point where we were going to have to lay off 500 police and firefighters. At that time we cut all kinds of things, like trash, leaf pickup, we closed recreation centers, we had significant layoffs, we had furloughs – we cut dramatically all over and everywhere. And the community said we want a quality of life. Those things are important to us. And once you cut safety, and crime becomes rampant in a community, you cannot come back for a long time. When the community isn’t safe, you can’t create jobs, you can’t have parks, you can’t have bike paths. None of those things can happen if the quality of life in the community is declined dramatically. So the community made a choice at that time to preserve the quality of life. And this made a difference. If we had had those cuts, if that income tax did not pass, you wouldn’t be sitting here today talking about the vibrancy of our city. You’d be talking about, what are you going to do about bringing the city back from the depression it’s in, the distress it’s in? And it would be like a lot of Midwestern cities that frankly are struggling, that are struggling beyond all measure.

You can’t be pro-business and not be pro anything else. I’m pro-business – unabashedly. Good jobs, business expansion, it means all the difference in the community where income tax is the driver of services and your budget and the vibrancy of the community. But you have to think two sides of that coin. One side is development of jobs, the other side is development of place – quality. What are the amenities? What are the things that people want to have in their state or their community that enhance its viability and its vibrancy?

While when it comes to population and jobs, Columbus has been growing much faster than the rest of Ohio, in terms of recognition in the marketplace it still lags Cincinnati and Cleveland. I asked the mayor what he thought Columbus should do to change that:

You don’t need a slogan. You need experience. You want to relay an experience. And the hard thing about Columbus is there’s multiple, solid experiences in our city that are valid and meaningful to the 21st century. Again, fashion, who would have thought? Now a brain magnet city, who would have thought? The largest city in the state of Ohio – by far. The next largest city is less than half our size, Cleveland. Who would have thought? That’s why we work really hard on a multiple strategy approach. One of them is really going to hit, and you’ve got to just keep going.

People are asking, “Why am I working hard to get Democratic or Republican convention in the City of Columbus? That’s just nothing but a hassle.” The reason is there’s this glass ceiling out there, and we’ve got to break through. We may or may not get a Democratic convention or a Republican convention, but to be considered, and to be viewed differently in the process, is important.

I’ll be posting further thoughts on the Columbus brand over the weekend.

I asked the mayor why people in Columbus persist in having a chip on their shoulder about being a “cow town” even though I’ve never heard anyone from outside Ohio use the term.

Because the truth is, there are some folks in this community that at one point viewed ourselves as a cow town. And for me, that’s a dirty word. So I had a strategy that we executed, and it worked great. It was our bicentennial, 2012. In 2007 I pulled the community together. We had the largest town hall meeting in the history of the universe at the convention center. We had a couple thousand people. We brought a couple thousand of our residents into the convention hall and we spent time on what we want to do. I had a mission; my mission was to help change the mentality of how we view ourselves. Because you can’t market yourself until you view yourselves a certain way. So what I started talking about then and I still talk about today is, this city needs to continue with a sense of modesty, but not modesty to a fault. Because frankly, we should have a sense of what I call swagger. And I’ve written articles on it. I’ve written op-eds on it. We’ve done all kinds of stuff, speeches all over the city – is that this city needs to have a sense of swagger. Because we have so much to offer, so much we’ve accomplished, and we need to feel that when we go on that football field we can win. And we got to walk, we got to talk, we got to feel as if we have swagger. And I pushed it hard. And frankly, I think that effort has changed how we view ourselves.

Mayor Coleman was the first black mayor of Columbus and is now the longest serving mayor of any race in the city’s history. I asked him about the way black political leadership in American cities has evolved since the days of the civil rights movement:

I think the early mayors’ focus was civil rights. The issues have changed over time. While civil rights continues to be important, people have an expectation that mayors deliver, mayors change the city for the better in every aspect of a community, from jobs, to housing, to streets, to police, to safety, human services, across the – water quality, sewers, potholes. Our role has changed from the singular focus of civil rights, which is important, to be an expanded role that includes civil rights but everything else that we have to change.

Mayors, especially African American mayors, need to be change agents – change agents for their city. I think all the mayors you mentioned are change agents for their cities – in every aspect of city life, not just in one or two. Every aspect. My favorite saying in this city, among my staff, is: the city that stays the same falls behind.

Listen to the whole thing above or read the complete transcript for more.

Wednesday, May 14th, 2014

Taking Columbus to the Next Level

It’s always a bit risky to look at a video of something you did 3-4 years ago, both from a content and style perspective. But since I’m off to Buckeye land next week for another visit to Columbus, I dug up and uploaded this talk I gave at the Columbus Metropolitan Club in December 2010. The topic was branding Columbus and ideas for taking the city to the next level. I hope you enjoy. If the video doesn’t display for you, click here.

Monday, April 21st, 2014

The Urbanophile Interview: Cincinnati Mayor John Cranley

I was able to sit down this month with new Cincinnati Mayor John Cranley to spend an hour on such topics as Cincinnati’s incredible historic assets, its history of social conservatism, streetcars and bike lanes, the repopulation of the urban core, and more.

If the audio player below doesn’t display, click here for the MP3 file.

Mayor John Cranely. Image via City of Cincinnati.

Here are some edited highlights of our discussion. For those who prefer reading to listening, a complete transcript is available.

By far the most provocative thing the mayor talked about to me was his direct challenge to the idea of metropolitan government. Cincinnati hasn’t annexed territory since 1925, leaving it as a smallish, hemmed in city that is only 14% of a very fragmented region. Meanwhile cities like Indianapolis and Nashville had city-county consolidation, Columbus annexed, etc. He thinks that in a new urban era, this model of government is running out of gas and the pendulum is going to swing back the other way:

There’s a real cultural shift and renewed pride in Cincinnati. More specifically though, there are some unique advantages that we have. Think of it this way: if you took our Downtown and Uptown and the corporate base, let’s say it’s 70% of all of our major jobs and income taxpayers. If you take the same exact area and map it in Columbus, they’re going to have 70% of their companies Nationwide, et cetera, all within the same geographic area. The difference is that they have to spread that money among all of Franklin County. We have to provide for 300,000 people. And very quality 19th century historic neighborhoods that already have a sense of place and culture. And we get the benefit of, on a per capita basis, being able to invest way more in these urban neighborhoods than any of our peers because we didn’t annex.

Now, historically, the attitude of urbanists had been, like myself, the we’ve got to have metro government. In essence, the attitude has been, “We poor city.” We need you guys have to play Robin Hood for us. I think the shift is already underway. Now, we have more work to do but the shift is already underway that we’re going to be a better choice for the dollar value because of our historic infrastructure, our density, our diverse economies of scale. The home owner to apartment mix which looks bad at a distance but, candidly, makes it more dense in which it makes labor pools a lot easier to transport inside the city.

What we haven’t done, in my opinion, is be insistent enough on value for the dollar, because we’re spreading our dollar over a much smaller population than cities of size. So why isn’t the quality of customer service of all services of city government superior? You still get complaints today of people who say, “I live in a nice suburb and my snow is picked up immediately and it’s cleaner and my roads paved faster and less litter. Coming to a city, I can immediately tell it’s a city.” There’s no excuse for that. And I believe that we can provide a better customer service because we have more money over less people than our competitors do. Which if you think about the fact that we lost population to cities this way, people kept moving one suburb out — and I think most of us agree we’re going to repopulate from the inside out — we have more resources to invest in economic growth policies than our competitors do, and we intend to use that advantage to become the most exciting urban city in the country.

We’ll have to see how this plays out, but I think there’s something to this. When places like Indy, Columbus, and Nashville annexed all those suburban areas, they were able to capture that tax base to support the central city. Now though they are saddled supporting miles and miles of aging and decaying suburban type development that may ultimately represent a drain on the resurgent urban core tax base. To the extent that the urban core does come back, places like Cincinnati, from a municipal point of view, will get a bigger lift from it because it gets spread over a smaller area. It’s easier to turn around a small ship than a big one.

We also talked about the geography and architecture of neighborhoods like Mt. Adams, which is like a Midwestern San Francisco. Mayor Cranley likes that analogy:

As I always say, if Chicago is the New York of the Midwest, we’re the San Francisco — in fact, that’s exactly my mind is to say Chicago is the New York of the Midwest. We’re the San Francisco. Because we have the hills, the architecture, the arts, the culture, the big league teams, all the advantages of a major city with the livability of a small town. And everyone has an opportunity to be a big fish if you got that kind of ambition. And it really is. Again, we’ve proven that’s true because we’ve been able to maintain such a concentration of Fortune 500 companies which then, of course, leads to all kinds of spin-off businesses and a huge privately held company, group of businesses, that have really been family traditions that have lasted a hundred years and have really continued to come. As I like to point out, what city our size has an entire company dedicated to Shakespeare? We have a theater that does all Shakespeare. And it has full on season.

I pointed out one important difference vs. San Francisco: Cincinnati’s history of extreme social conservatism. A number of wealthy conservatives like billionaire Carl Lindner and Charles Keating (yes, the Keating Five Charles Keating) poured tons of money into anti-pornography campaigns. Hustler publisher Larry Flynt was convicted as recently as the late 90s of obscenity charges. In 1990 locals tried to ban an exhibition of explicit photographs by Robert Mapplethorpe and even put the museum director on trial for obscenity (he was acquitted). An anti-gay rights amendment was added to the city charter by citizen initiative in the early 90s. There was a race riot in Over the Rhine in 2001.

This is clearly a sore point for the mayor, as he answered at length. He acknowledges the history of these things, but says things have changed radically and wants to be able to get the word out on the new attitude in the city:

I think that’s changed. You take one rather prominent issue with gay rights. In 1993 an anti-gay law was passed in the city charter which was awful, and would stain our reputation for ten years. When I was on council we had a transvestite who was murdered, and even the very conservative chief of police said that this was a hate crime. And I led the effort to add sexual orientation to our hate crime law. And that was sort of — this was 2002, I believe, 2002 or ’03, it might have been 2003. And this had only been ten years since the charter thing had been passed. Remember, the charter thing was passed in the aftermath of Bill Clinton being elected and gays in the military, that first debate. And several cities, including Denver, Colorado, passed virtually identical [language] ran by a right wing group around the country.

Here, we went on a major effort and we progressively, in 2004, in the midst of Bush getting reelected in Hamilton County 54 to 46, got the thing repealed by a substantial margin, which showed a real shift in our culture and our attitudes. And then we immediately passed — reinstated — the human rights ordinance. We immediately reinstated the non-discrimination. We passed benefits for domestic partners and many, many other things. So candidly, and this is why I think it’s so important that you’re here, we need to get the message out. I believe that we have moved many, many miles since then.

In addition, we have been incredibly progressive as it comes to civil rights and to police-community relations. We had, in 2001, a very difficult time with police and the community, the black community in particular. And we voted to invite the Justice Department in the Cincinnati to mediate rather than litigate allegations of police misconduct. And we led to the 2002 collaborative agreement — which I’m proud to say I helped negotiate — which is now held up as a role model for how to improve police community relations around the country. In fact, the judge in New York who struck down the “stop and frisk” law in New York City specifically cited Cincinnati’s collaborative agreement as the right way for the police and the community to work together.

And so I respectfully say that I understand that we have some baggage in terms of what happened in 1993 on gay rights, and we’ve had on the 80’s and 70’s…Larry Flynt… So I’m not denying that there isn’t some reason for that reputation, but it’s no longer fair.

In addition to a Harvard Law degree, Mayor Cranley also has a Masters of Theology from Harvard Divinity School as describes himself as a man of deep faith. I asked him how that informs him in his role as mayor:

I think that all of this has to be done in the context of the common good and building a society that expands opportunity. And I think at the end of our lives we’re fundamentally going to be asked did we make the world a better place for those who didn’t have as many advantages as we had and did we leave it better than we found it. A sense of stewardship. And all that comes, I think, deeply from my faith, schooling and family, values, traditions, et cetera.

And so we spend an enormous amount of time thinking about how are we going to reduce the poverty rate. One of my major planks in my campaign was reducing the poverty by at least 5% over the next four years. We are engaged at every level, re-examining the dollars that are — federal dollars that come in to the city budget that are earmarks for low income individuals and must be spent to the benefit of low income individuals — are we really getting the most bang for the buck out of these dollars?

Right now we have a cohort coming out of the Great Recession of folks who have never had high school or college degree, with kids, who have got very bleak prospects, and that is not surprisingly where those folks live tend to be some of our toughest neighborhoods. If we can, I think, rise to the moral challenge of figuring out how to not write off this entire generation but invest in job training and skill set to get them at least ready to work at low skill, low paying jobs and bring the dignity back of having a breadwinner in the family, the social dividends of that are enormous in terms of turning those neighborhoods around, those families around, the city around.

But in addition, if we can do it on a systematic basis, we can then market Cincinnati as a place for companies who want to locate with a large, ready to work population. Now, obviously, 20-30 years from now I’d love for us to have a higher education rate. I’m not saying it’s good and we just want to leave the education rates where they are, but given what we have today, how do we turn all that into an advantage and, at the same time, tackle the moral issues of poverty?

And while it’s not the same thing — a very sensitive issue, this is not the same thing — but building a more inclusive and welcoming society for immigrants and for African-American, Hispanics is also, I think, part of my faith tradition of — it does come from a history of prejudice that Cincinnati has been part of. And so we do have a moral obligation to tackle those issues but I do think from a political standpoint, it’s better — and true, not just better political argument, which it is, but it’s also true — that it’s better for all of us to have a more inclusive and welcoming city.

Thursday, March 27th, 2014

The Urbanophile Interview: Louisville Mayor Greg Fischer

I recently sat down to talk for about half an hour with Louisville, Kentucky Mayor Greg Fischer. We had a wide ranging discussion that ventured from branding to globalization, regionalism, talent attraction, legacy, and more. If the audio player below doesn’t display, click here for the MP3 file.

Mayor Greg Fischer. Image via Wikipedia.

Here are some edited highlights of our discussion. For those who prefer reading to listening, a complete transcript is available.

On an economic development partnership between Louisville and Lexington, Kentucky’s second largest city:

[Globaization] is central to who we are as a city. We have a very high export ratio here. We out export, we punch above our weight if you will, as a city. My background is one as an international business guy and we’ve spent a lot of time growing a broader regional economy. The city of Lexington and Louisville have a joint economic development plan that we did with the Brookings Institution called BEAM, Bluegrass Economic Advancement Movement. And a central thrust of that is growing exports throughout the region. We have people that go out and help businesses understand that’s the way of the future.

As a business guy, I’ve been more of a small, medium sized business person, 500 employees and below, so frequently I would compete with large, multinational corporations. When you start your career, you’re like, “My gosh, how can I compete against this firm that’s got manufacturing plants or offices all over the world and 10,000 employees?” What you find is as a small company, you have a lot of advantages that the big company doesn’t have. You’re closer to the customer. You’re nimbler. You can speak for the company.

So when you take a look at the challenges of a state like Kentucky, we’re not one of the biggest states. We’re certainly not one of the smallest, either. So what we’ve got to do is be excellent at partnering with each other internal to the state so that we can use that as a competitive advantage when we compete with other countries or other states for economic development. Louisville and Lexington combined metro region, including Southern Indiana, is about two and a half million people or so, more scale than just us at 1.3 million and certainly, more scale than just Lexington.

On regional cooperation with Southern Indiana:

When people move to Southern Indiana, they identify as moving to the Louisville area, typically. Our restaurants over here, our housing options over here are complementary to what’s in Southern Indiana so if a company is going to say, “Okay. I’m going to be in Southern Indiana or I’m going be in Missouri,” I want them in Southern Indiana.

Southern Indiana’s got some advantages that we don’t have. We don’t have that much open land left in Jefferson County. River Ridge, which is just opening across the river, is going to be helped by these bridges going in right now, these megaprojects, the Ohio River Bridges Project. It will be where a lot of these businesses are going to locate. I’d rather they locate there again than in some other state. So we win as a region because people live regionally. We’re happy to cooperate and brainstorm with Southern Indiana.

On how Louisville’s relationship with the state of Kentucky is evolving:

Evolving is the right term. Louisville produces about $2.4 billion a year of taxes and we get back $1.2 billion. Kentucky has been cited as the fourth most centrally controlled economy in the country in terms of states. In other words, sending taxes to our capital and redistributing them throughout the state. So it’s a challenge for us. I’m working right now to get the state constitution changed so that all cities and counties have the right to levy a local option sales tax where their citizens have the right to vote on specific capital projects, paid for in a specific way with that temporary sales tax sunsetting. Part of that is so local cities, whether it’s Louisville or Pikeville or anywhere in the state, could have more specific control over their built environment. So, that’s one way to address it.

Long term, we need some type of overall state tax reform. But in any state, you’re going to have an economic engine like we are here in Kentucky that contributes more to the balance of the state than what it is they generate. Our rural legislators are very good at teamwork, if you will, and our metropolitan legislators are not so good at teamwork. So they can be our own worst enemy in terms of directing more funds back to where they were originally generated – in this case, Louisville.

On the local food scene:

It’s been an interesting way to see how the rural parts of the state and the metropolitan areas really appreciate the partnership that we have with our local food movement. Like many places around the country but particularly here, when you go into restaurants, you’ll see the origin of the food in terms of the farmers that they came from. We were the first city in the world that we know of to do a demand analysis for local food, how much local food do people want to consume here. We did that deliberately to help our partners in the rural areas of the state, the farmers, so that they can understand that they’ve got a big, growing market in the biggest city in Kentucky.

When we did this survey, no matter what somebody’s socio-economic background was, everybody supported local food. They said, a), it’s healthier and b), we want to help local businesses. So, it kind of busted this myth that local food, farmers markets, all this was just yuppie kind of thing. Everybody appreciates good local food.

On why a 2014 college grad would choose Louisville over other cities such as Cincinnati or Nashville:

One, you want to take a look at the culture of the city. Are you going to be able to fit in? Are you going to be able to make a difference? You know, not every city is perfect for every student. So, is there a connection? Do you like our art scene? Do you like our local food scene here? What about the innovation we’re doing with the makerspace, for instance? Because I think we’re among the best in the country in that regard.

Take a look at the economic development clusters that are important to a city. In our case, are you into lifelong wellness and aging care, or food and beverage, or logistics and e-commerce, or business services, advanced manufacturing? Where is that fit for you? I can guarantee if you’re going to live here, you’re going to have a good quality of life and enjoy yourself, but are you going to be able to be employed in a meaningful way?

Any city that says they’re everything for everybody is being disingenuous. It’s just like a company. When you look at the city, find a place whose values mirror yours and whose opportunities mirror your interests at the same time. Make sure it’s got a beautiful, natural environment like we have here that’s full of nice people, and then you’ll have a good place to live – and it would be nice if it was Louisville.

There’s a lot more where this came from so listen to the whole thing or read the complete transcript.

Some may be wondering about the Ohio River Bridges Project. There were no restrictions on what topics I could ask about, and I haven’t changed my opinion on it. But I felt the discussion time would be productively spent elsewhere so did not ask about it.

Tuesday, March 4th, 2014

The Bentonville, Arkansas Effect by Eric McAfee

[ It's frequently alleged that Wal-Mart is a destroyer of small towns. Today Eric McAfee of American Dirt takes a look at Wal-Mart's home town of Bentonville, Arkansas to see what its effect has been there - Aaron.]

It is a truth universally acknowledged that, from the perspective of urban sociologists and planners at least, major discount retailers such as Walmart have thrived on the destruction of commercial activity in traditional town centers. No doubt my assertion borders on exaggeration, but it would have to, considering I’ve cribbed Jane Austen’s famous (and equally ironically hyperbolic) first seven words to Pride and Prejudice, in which a man’s search of a wife sets a blithe tone for much of what follows. By contrast, the unceasing diatribes against Walmart from urban advocates are rarely whimsical. And while not every high-profile writer/blogger on urban affairs excoriates Walmart, the general tenor of the discussion ascribes much of the decline of downtown retail to the much-maligned megachain. After all, virtually every freestanding small city in America over 20,000 people that is not part of a larger metropolitan agglomeration can claim a Walmart, perched at the edge of the municipal limits. And yes, the burgeoning of Walmarts does more or less coincide with the near abandonment of historic, pedestrian-scaled main streets in favor of car-oriented commercialization consolidated into big-box department stores.

But did a corporation—or the corporation—really cause all this?

If the average American consumers genuinely cared enough about Main Street or the courthouse square, wouldn’t they have shunned this commercial cataclysm before it radically altered the entire landscape? Wasn’t it the consumer that ultimately fueled Walmart’s meteoric growth, by opting for the convenience of everything under one roof, abundant free parking, and (perhaps the most objective factor) those famously low prices? Some might argue that I’m unreasonably throwing Walmart a bone, since the folks at the boardroom table clearly knew what would happen to Main Street, as department-store big-box shopping encroached on communities that commercial developers had previously perceived as too modest in size to support this retail typology. And, yes, I recognize the firm’s historic opposition toward unionization, its eventual reneging on a long-standing “Made in America” pledge, and even the management of logistics/merchandising favoring the automatization of functions that once provided communities with stable jobs. Maybe I am cutting Walmart some undeserved slack. But I also think the corporation’s biggest critics fail to recognize that Walmart didn’t become a leviathan overnight, any more than these towns devolved from flourishing to failures with the flick of a light switch.

My own articles on main street America have explored the topic routinely. But it took a visit to Bentonville, Arkansas to develop a more nuanced understanding of Walmart’s approach to community engagement right at the belly of the beast.

My suspicion is that, until probably around the year 2001, 98% of Americans hadn’t heard of this well-scrubbed little municipality in the northwest corner of the state, just a stone’s throw from the rugged topography of the Ozarks. Even today, if people are familiar with the town, it is only because it hosts the corporate headquarters for the world’s largest retailer. And there’s nothing wrong with this seemingly simplified association: after all, one would be hard-pressed to find anyone in Bentonville who would argue that the city is better known for something else. But what sort of impact has Walmart’s presence exerted on what otherwise would likely be a nondescript, mid-southern county seat?

Not surprisingly, the influence has been formidable. I mention the year 2001 because, upon publishing the results of Census 2000, the nation learned that the Northwest Arkansas Metropolitan Statistical Area (consisting of the primary cities of Fayetteville, Springdale, Rogers and Bentonville) had become the sixth-fastest growing region in the nation. While a Census update isn’t the sort of news item that necessarily grabs the public by its lapels, it can flirt salaciously with the unconscious and, eventually, through mimetic repetition, penetrate to the conscious. With each passing year, Bentonville has grabbed the headlines more often, as decisions from the Wal-Mart Stores, Inc. Home Office exert a greater impact on the global economy. I would hesitate to assert that the name “Bentonville, Arkansas” is common knowledge to the same level that a similarly-sized city such as “Beverly Hills, California” might be, partly because the similarities between these two places basically stop there. But its star is rising on both the national and international horizon, since many of Walmart’s foreign retail ventures have proven just as successful as their domestic efforts. And Bentonville, predictably, has enjoyed its share of the region’s growth: at over 35,000 people in 2010, it more tripled its population since the 1990 census, and, as recently as 1960, it was a quiet village of barely 3,500 people.

The impact on this growth is obvious, particularly when viewing the street configuration.

The shift from a conventional grid to a more hierarchical arrangement is conspicuous and unsurprising.The oldest part of the city adopted the grid, which was customary for shaping virtually all communities in the 19th and early 20th century. Yet 80% of Bentonville’s city limits (which extend in all directions beyond the boundaries in the image above) fits the more expansive, automobile-oriented configuration, in which streets curve and wend, sometimes into hairpins, sometimes into full loops. Often they terminate as culs-de-sac. For a municipality that remained a modest village until the 1950s, this growth pattern is normal and broadly characteristic of numerous Sunbelt communities.Thus, the city of Bentonville has decentralized considerably in the last fifty years, in addition to hosting the global headquarters to the retail behemoth most regularly flagged as the culprit in expediting the demise of downtowns. Given these two factors, one prevailing question remains: what on earth does its beleaguered town center look like?

Chances are, you’d be as surprised as I was.

It looks terrific.Nearly 100% occupancy, clean sidewalks, a well-manicured streetscape. And virtually of all the retail mix—from bike shops to brasseries, yoga studios to yogurt cafes, tea rooms to trattorias—caters to an upmarket clientele, suggesting that the leasing rates are fairly high.

The culminating attraction, however, is the humble storefront that spawned it all:

Sam Walton’s original five-and-dime now serves as the Walmart Visitors’ Center and a mini-museum, with interactive exhibits and the recreation of a soda fountain.

These pictures date from a summer festival on the central square, taken a few years ago, in 2010. Though they are obviously a bit faded by now—not all of the visitor attractions were open yet during my visit—I can say with a fair amount of confidence that downtown Bentonville is even stronger today. After all, most estimates show the city has continued to grow another 10% since the 2010 Census results, and, considering that it was demonstrating considerable resilience during the peak of the Great Recession, the downtown is likely only to build on a momentum it had established long before the bubble burst. A detractor might challenge my assertion by arguing that I captured the city during an atypically vibrant time, when out-of-towners had flocked to the city for the summer celebration on the courthouse square. But how could the downtown support a high concentration of restaurants, cafés and boutiques if it weren’t lively during the other times of the week as well?

The fact remains that downtown Bentonville boasts a number of civic associations that have worked tirelessly to boost its cachet, including Downtown Bentonville, Inc, a nonprofit association that promotes, attracts investment, and plans activities for Bentonville’s historic downtown, as well as the Bentonville Merchant District, which seeks to attract upscale traveling merchants through the provision of Class A office space and furnished loft-style apartments close to the city center. The city also has a Convention and Visitors Bureau and a Chamber of Commerce. These organizations have no doubt worked tirelessly to re-centralize investment in Bentonville’s small downtown, even as the vast majority of the population growth over the last two decades has taken place in the purlieus. By most metrics, their efforts have paid off. But plenty of other similarly sized cities can claim the same business associations without these results; I blogged about Jefferson City, Missouri earlier this year, a small city whose civic leaders have collaborated to promote the downtown. However, the results in Jefferson City, while palpable, have been much more modest than Bentonville—and it is nothing less than the state capital.

Bentonville is simply part of a region that is enjoying a persistent economic boom. The other primary cities in this unusual metropolitan area—Rogers, Springdale and Fayetteville—are also growing like mad. It doesn’t hurt that the region is home to two other nationally prominent companies: Springdale’s Tyson Foods, the world’s largest meat producer, and trucking giant J.B. Hunt Transport Services, Inc., based in the town of Lowell, which abuts Rogers. But the real cog in the wheel remains the world’s largest retailer, headquartered in Bentonville, and I still suspect the corporation and its numerous investments has more to do with downtown’s vibrancy than the tourist bureau. Walmart undoubtedly prefers to associate its name with a municipality that enjoys a profile of prosperity and high quality of life; the company will do what it takes to maintain that image within Bentonville.

So what is the visual evidence that this isn’t just a run-of-the-mill boomtown? Beyond from the picture-perfect courthouse square, the air of plentitude permeates the city.

However, it isn’t just the park spaces that distinguish the more recently developed outer reaches of Bentonville; all the spaces in between have received above average treatment as well.

So a city street has sidewalks. Big deal, some might say. But it is out of character for low density, hierarchical, auto-oriented development in the South to make any concession for pedestrians, let alone a full network of sidewalks along all of the major streets. Compare Bentonville to just about any other city in Arkansas (outside of the Northwest) and you’d be hard pressed to find sidewalks on any arterial or collector roads beyond the historic original
street grid. Both the Department of Parks and Recreation and the Department of Planning in Bentonville have determined that core pedestrian access remains critical, even when the development pattern is sparse, in keeping with the preferences of the majority of people who settle in this part of the country. The former of the two aforementioned departments reveals that it has conceived network of parks, greenways and biking trails rivals that of a community three times its size.

Meanwhile, the latter-mentioned planning department has several aces up its sleeve as well. While it isn’t unheard of that a city might support a 76-page Bicycleand Pedestrian Master Plan, a Smart Growth Guidebook, or a Traffic Calming Guidebook, it certainly places the city well outside the bell curve when juxtaposed with its peers. After all, even the neighboring city of Rogers (pop. 55,000) shows no evidence that its planning department has the resources even to conceive of such initiatives.

The aforementioned features are hardly likely to elevate anyone’s pulse; they aren’t exactly competing with Manhattan’s High Line for infrastructural innovation. And it’s unreasonable to surmise that Walmart had any real influence on what remain purely publicly owned assets. But one structure in Bentonville is likely to turn the head of even the most skeptical coastal snob: the Crystal Bridges Museum of American Art.

The structure was not complete when I visited Bentonville in 2010, but it opened to the public in late 2011, and made international headlines for both its novelty (first major American art museum to open in 50 years, and the only one in an over 100-mile radius) as well as its magnitude (over 200,000 square feet of space on 120-acre grounds and a collection valued in the hundreds of millions). The striking edifice reaches Bentonville courtesy of internationally recognized Israeli-Canadian architect Moshe Safdie. Perhaps most importantly though, it is resolutely the vision of Alice Walton, daughter to founder Sam Walton and heiress to his fortune. In one of many interviews she offered at the time of the museum’s opening, Walton, who has been an art collector most of her life, acknowledged that she wanted to make a difference in this part of the world by bringing “something we desperately need”. She contributed over $300 million to the project, built on family land. Admission to the museum is free, but because of its destination status, visitors will typically linger, travel the grounds, shop, buy a meal. A Huffington Post article from the museum’s infancy concluded that the museum would skyrocket past its estimated 250,000 first-year visitors, based on the success after just three months open to the public.

If Crystal Bridges Museum lives up to its promise as an attraction of national or even international caliber, Bentonville clearly needs the tourist infrastructure to support those visitors. But it would appear it already has it. Just down the road, in neighboring Rogers, an Embassy Suites Spa and Convention Center flanks one side of the interstate; the Pinnacle Hills lifestyle center sits on the other. And, earlier this year, the sleek 21c Museum Hotel, famous for the prominent positioning of contemporary art, opened right off of Bentonville’s courthouse square – only the third of its kind in the country. (Louisville and Cincinnati claim the other two.) Many of the amenities that have sprouted across Northwest Arkansas over the last twenty years are in keeping with a metropolitan area of nearly a half million people; of course it has a mall, convention center, and a seasonal symphony orchestra. But while growth trajectory of the metro might resemble that of Phoenix or Las Vegas, no single municipality has spawned everything here in Arkansas. As of 1950, only college town Fayetteville had even 10,000 people. The other towns—Lowell, Rogers, Bella Vista, Johnson, Springdale, and of course Bentonville—were isolated villages that boomed simultaneously, swelling their incorporated boundaries until they touched one another. As a result, Northwest Arkansas may be the country’s youngest conurbation: a 35-mile string of small cities—a microlopolis. (The only comparable phenomenon I can think of domestically would be the Texas border towns along the Rio Grande, but even Brownsville and McAllen were more than villages fifty years ago, and they’re big cities over 100,000 people now.)

The rapid ascension of these communities into a regional economic powerhouse—with the amenities one might from a single, medium-sized city—may very well neatly manifest the multiplier effect. But it still doesn’t explain how Bentonville, the epicenter of Walmartlandia, has managed to hold its own with a lively downtown, when plenty of other fast-growing big cities struggle to keep it all centralized (Houston, for example). After all, in one of the most famous journalistic explorations of Northwest Arkansas, Financial Times’ “The Town that Wal-Mart Built”, Jonathan Birchall observed in 2009 that he always found it “hard not to be hit by the irony in this Bentonville Renaissance. Wal-Mart’s football-stadium-sized supercentres are, after all, the epitome of the chain store culture that has destroyed small town centres and homogenised communities all over America in the past three decades.” But it sounds like he took the bait.

The town that Walmart built has either proven itself immune to the main-street-murdering forces that afflicted most American cities, or it has recovered from that ailment magnificently. Bentonville also boasts a regional airport that offers year-round, nonstop daily service to New York, Los Angeles, and Chicago; Alice Walton’s money helped build the terminal, which serves a population that had no regular airfare until 1998. Bentonville Public Schools have offered the prestigious International Baccalaureate program since 2007. And yes, Bentonville has a Walmart not so far away, in what probably was the edge of town not too long ago.

By this point in such a lengthy analysis, it’s obvious what has happened: Bentonville has responded to the fact that it hosts a multinational corporation by offering the sort of amenities needed to attract talent to the region—talent that, its current leadership presumes, will propel Wal-Mart Stores, Inc. to another fifty years of unprecedented growth.

Most MBA grads trained at Harvard, Wharton or Kellogg are going to need enticement to move to an area not recognized for its urban offerings. On top of all the talent in multinational retail, Bentonville and its neighbors most also graciously host the satellite offices of 1,300 suppliers whom Walmart has lured due to its vast trade network—ranging in size from one sales exec to something as large as Procter and Gamble, for whom a few hundred employees call Northwest Arkansas home. The elite business class that routinely visits the Walmart headquarters expects top-tier hotels and shopping, while many of the executives who make it
their permanent home will inevitably seek sophisticated eateries in an attractive, walkable setting. How much of all this was funded directly by Walmart is anyone’s guess (though I’m sure at least someone out there has the numbers). The fact remains that the corporate culture in Bentonville fueled a demand for a Parks Department that builds a network out of its green space, or a Planning Department that performs traffic calming studies.

The hardened cynics can read about this serendipity in the Ozarks and offer an acerbic rebuttal: of course Walmart is going to prop up its hometown, but does that absolve it from the devastation that has taken place virtually everywhere else? This assertion would be valid if every town with a Walmart suffered an equally moribund Main Street. But they clearly haven’t. And there remain villages too small or too remote for a Walmart, which have confronted the exact same decline of entrepreneurism in their historic centers. Arguing from that same angle, the City of Bentonville did not enjoin Walmart to revitalize downtown—or force Alice Walton to build Crystal Bridges—any more than existing laws compelled Cornelius Vanderbilt to endow a university in Nashville, the capital of a state he never even visited. No doubt some of Walmart’s boosterism in Bentonville is self-serving, since a desirable community only helps to improve Walmart’s reputation as both an employer and corporate citizen, which in turn can attract further investment. However, viewing all corporate altruism as suspicious requires a labyrinthine recontextualization that is just as distorted as saying “Walmart killed our downtowns”. Or its equally hyperbolic counterpart: “Walmart has had no impact on the way we shop on main street”. Clearly it has, but the forces compelling consumer behavior remain complicated—baffling even. For while most of us can understand that we abandoned our old downtowns out of convenience and lack of foresight,
no one will ever truly be able to explain want prompted many American consumers
to give up their cars so they could return to bicycles. And if you don’t think I’m concluding ironically, I’ve got a Jane Austen novel to sell you.

This post originally appeared in American Dirt on October 16, 2013.

Thursday, February 27th, 2014

UAW Loss at Volkswagen Shows Why Unions Need to Reinvent Their Business Model

Workers at Volkswagen’s Tennessee auto plant voted down representation by the UAW last week, a result the Detroit Free Press labeled a “devastating defeat” for the union. Conditions were as close to ideal as possible for the UAW to organize a Southern auto plant. For one thing, VW, prodded by the labor representatives on its supervisory board (German companies operate under a co-determination regime in which unions hold half the seats on the company’s board), tacitly endorsed the UAW’s organizing drive. The company even allowed the UAW into the plant to make pro-union presentations, something not afforded to employee critics of the union. Beyond pressure from Germany’s IG Metall union, VW wanted to set up works councils to help guide the plant, something forbidden by America’s archaic labor laws that only permit outside unions to represent workers.

There was some kerfuffle over local government officials in Tennessee urging the rejection of the UAW, and hinting that signing on to the union would lead VW to stop future investments. The UAW is asking the National Labor Relations Board to void the election because of that. The claim appears specious, but with the heavily politicized NLRB, anything is possible, particularly if VW refuses to mount a defense in order to aid the UAW over the wishes of its own workers.

But rather than outside pressure, it seems more likely that Volkswagen workers were already satisfied with their jobs. Beyond a works council, it’s hard to see what they would be getting. Pay is comparable to the Detroit Three. Working conditions appear to be excellent. No one is complaining. It’s a very different situation from the sit down strike era in which by organizing the UAW was able to significantly upgrade the condition of labor, in the auto industry, but ultimately also in the country at large. The specter of the GM and Chrysler bankruptcies, along with the disastrous experience at an early VW plant in the US some years back which ultimately closed after UAW strikes, seems to have led workers to conclude that the ineffable benefits of unionization weren’t worth the risks.

This result has emboldened organized labor’s critics. For example, South Carolina Governor Nikki Haley said unionized jobs were not welcome in her state. Apparently even the Detroit Three’s management is worried about the union’s future.

What then should the UAW and the American labor movement do, at least with regards to private industry?

First, let’s get one thing out of the way. Who caused GM and Chrysler to go bankrupt? The blame clearly lies with management. Whatever the flaws of the union, they weren’t the ones charged with running the company. Management was. Other heavily unionized companies managed to make the transformation required to succeed. General Electric did it. Caterpillar, a UAW shop, did it. CAT fought a lengthy and bruising battle that left wounds which will never heal in Peoria, yet today they are an American industrial champion in the global economy. The automakers’ management by constrast never had the stomach for tough choices or tough fights.

Instead, their executives lived like kings. The stories I’ve heard from friends who worked at these companies blows my mind. My one friend, who was a manager at GM, had to collect a company Escalade, pick up an executive’s wife at the airport, and chauffeur her around shopping on Michigan Ave. in Chicago during the auto show. He also had to make sure the exec’s hotel room was properly prepped with the right drinks and chocolates. Another friend told of buildings at Chrysler in which there were doors you could only use you were above a certain classification level in rank. The order of the names on memos had to be in the correct pecking order. On and on. Even if these were exaggerated, the various stories from different people in different companies – all of which happened during a time in which these companies were in steep decline – shows an extraordinarily arrogant management culture.

Nevertheless, it’s still difficult to see the relevancy of traditional union models to the modern American workplace. The VW vote shows that they have little to offer, and perhaps might even be a negative. In fact, the enthusiasm of IG Metall for the UAW might not be all that it seems. They represent German workers. And it’s in the best interest of those workers to make American plants inefficient so as to reduce the incentives to offshore from Germany to America. Keep in mind, for VW, America, like Eastern Europe, is a low cost location.

If you look at it, unions may be on the last institutions in America that haven’t rethought their business model for the 21st century. They still want to play hardball to organize, then insist on things like crazy work rule systems and puristic seniority pay structures, political advocacy, etc. What has that gotten them? The private sector is down to like 6% unionized, much of it in industries that are increasingly subject to foreign competition and thus whose management cannot give much away without sabotaging their business.

But could there be a role for unions if they rethought their entire approach? I Think there could be. We keep hearing about a workforce gap in skilled technical workers. We also have a collegiate model of education that’s churning out too many semi-employable graduates with mountains of debt they can’t pay back. And companies increasingly what “just in time” labor the way they want just in time delivery of materials. Why can’t the unions be part of the solution to this?

If unions repositioned themselves as the go to place for skilled labor – or even just workers who can pass a drug test and are able to operate at the level of expectations for the modern factory in a low skilled context – this would be a hugely valuable service.

The one part of the union movement that still seems to be doing fairly well is the trade unions. Many of them have long operated on this model. You get into the union where the union trains you and are staffed on a project basis (e.g., constructing a bridge). The union delivers your benefits and pensions, based on payments from the employers. While this system does have its problems – witness the recent racketeering indictment of Philadelphia ironworkers for violent intimidation (they called themselves the THUGS, The Helpful Union Guys, I’m not making this up) – but in general when I ride an elevator up to the 50th floor of a skyscraper, I’m glad it was built by union labor.

Trade unions and their hiring halls are basically contract consulting providers of the type that routinely provide technical employees to major corporations. Why can’t other unions, reconstituted as a type of worker’s collective, do the same thing? And unlike contracting firms, they wouldn’t have to take nearly as big a middleman’s cut.

This is only one speculation of course. But the need for unions to reinvent their business model into something that’s relevant to the 21st century economy is urgent. With continued declines in membership and the rise of right to work laws in places like even Michigan and Indiana, they’d better figure it out fast before it’s too late.

Friday, February 21st, 2014

The Great Urban Divide, Michigan Edition

I’ve said many times that it is predominately larger metropolitan regions of 1-1.5 million people or larger that are best positioned to succeed in the global economy. This is in effect the minimum viable scale to compete. These cities have bigger talent pools, thicker labor markets, the right infrastructure (e.g., major airports) and amenities, bigger local markets, more specialized suppliers, and more entrepreneurial ferment. Smaller places that don’t have a unique asset (such as a major university) are going to struggle.

We see that on display again in Michigan, where Battle Creek based Kellogg’s is opening an operations center in Grand Rapids. This will employ 300-600 people, including some transferred from the headquarters. As the company put it:

Kellogg CEO John Bryant told The Grand Rapids Press/MLive they chose Grand Rapids for the new center after looking at nine possible locations around the U.S. as part of a new corporate restructuring initiative dubbed “Project K.”

Bryant said the company chose Grand Rapids because 40 other corporations have created similar service centers in the area, creating a labor pool from which Kellogg hopes to draw.

“We’re very excited about the Grand Rapids location. There’s a good population base for this sort of activity,” Bryant said.

Leaders in Battle Creek are angry about the company choosing to open in nearby Grand Rapids:

“This was a unilateral action by the Kellogg Company,” [former Battle Creek mayor and U.S. congressman Dr. Joe] Schwarz said Monday, “blindside, if you will. And that’s not the way people in Battle Creek, especially those that have been here a long time and worked with Kellogg on so many issues like myself, that simply is not the type of behavior we’ve come to expect from the company.”

At the time, Jim Hettinger was CEO of Battle Creek Unlimited. In a column for the Battle Creek Enquirer, Hettinger expressed his frustration over Kellogg’s announcement, saying the city has continually gone to great lengths to accommodate the company’s needs.

I understand the frustration, but at the end of the day, this is the reality of the modern world we live in. We see similar business decisions every day. Kellogg’s is in Battle Creek for historical reasons. There’s no way the company would ever choose to locate there today. The changing demands of the global marketplace create a need for skills that are easier to find in or lure to a place like Grand Rapids (metro population one million) than Battle Creek (metro population 135,000). That’s reality.

Note here that cost is simply not the issue. Both Grand Rapids and Battle Creek are lower cost locations. It’s clearly about being in a place that has better scale to serve the needs of a business serving upwards of 600 white collar employees.

This divergence understandably fuels resentment and bitterness within states, as I noted in a recent column in Governing magazine. I frequently find that to locals it’s particularly galling when a company does something like this within the state boundaries. Had Kellogg’s opened in Austin, Texas, I strongly suspect Battle Creek wouldn’t be nearly so bitter. I’ve long noted the same thing in Indiana, where smaller towns and cities would far rather see an out of state company buy their local bank or whatever than have an Indianapolis company come in. (Though I’ve also noticed this has changed for the better in the last 20 years). The reality is these jobs could have left the state entirely. Had Grand Rapids not been there, they probably would have.

This is one reason I have pounded the table for more expanded regional thinking by the likes of Grand Rapids. It’s not an easy problem, but if they can’t demonstrate that there’s a win-win in here somewhere for regional metros like Kalamazoo and Battle Creek, resentment will become entrenched. This can be difficult because the answers aren’t obvious and places like Grand Rapids – which itself is of marginal scale and what’s more not on the trade routes in the way a place like Columbus, Ohio is – are pedaling hard to just to make sure they themselves can make it. But longer term I think it’s imperative.

In the meantime, it’s important for state leaders to understand and respond to these realities. If they don’t, they will only drive business out of the state completely, just like effectively Indiana’s entire banking industry got gobbled up with little to show for it.

PS: One exception I’ve noted to this rule: Chicago. I didn’t seem to hear the same anger from Decatur over ADM that we see here. I think in part it’s because they understand Chicago is just a far different place than them. It’s such a unique city that losing a small executive headquarters doesn’t even seem like genuine poaching. Plus the entire leadership of the state is Chicago-centric, and and their top priority is building up global city Chicago.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

Telestrian Data Terminal

about

A production of the Urbanophile, Telestrian is the fastest, easiest, and best way to access public data about cities and regions, with totally unique features like the ability to create thematic maps with no technical knowledge and easy to use place to place migration data. It's a great way to support the Urbanophile, but more importantly it can save you tons of time and deliver huge value and capabilities to you and your organization.

Try It For 30 Days Free!

About the Urbanophile

about

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

Full Bio

Contact

Please email before connecting with me on LinkedIn if we don't already know each other.

 

Copyright © 2006-2014 Urbanophile, LLC, All Rights Reserved - Copyright Information