Saturday, July 2, 2016

Big Amenity and the problem of uncertainty

Source: bigboldbeautifulfood.BlogSpot.com
Cleveland, a town which has taken its lumps in the post-industrial era, is making a big statement about getting back in the game this week, reopening its downtown Public Square after a $50 million renovation (Schneider). The new centerpiece of the old city blocks off the streets that formerly ran through it, and adds green space, trees, walking paths and a central fountain that will be a skating rink in the winter. Public Square 2.0 is the result of a public-private partnership, spearheaded by the Downtown Cleveland Alliance. Nearby to Public Square, development includes four new hotels, new and renovated office buildings, and apartments for a downtown population that has more than doubled in the last 15 years and which the city expects to grow further. They can all shop at a gigantic new Heinen's supermarket.

Cleveland's downtown make-over is very much in tune with what a lot of North American cities are doing: Instead of using subsidies to lure large firms away from other places (or to outbid other cities and keep them at home) cities are investing in improving their quality of life, human capital and commercial climate. Smart Growth America's new publication, Amazing Place, rolled out this week, tells the stories of six cities of various ages, sizes and hipness: Boise, Denver, Greenville, Minneapolis, Nashville and Pittsburgh. Businesses, they reason, instead of following purely financial incentives, but want to be where the best people are. The best people, in turn, want to be in places that have, in the words of Downtown Denver Partnership director of downtown environment Aylene McCallum, "high quality cultural, sporting and entertainment amenities."

Boise is building housing downtown, adding workforce housing in the historically poor West End, preserving open space in the Boise Foothills, following best practices in landscaping along public streets, and has built Boise River Park, "a fully-automated dam that doubles as a dazzling whitewater kayaking park" (p. 5). The 5-Year Capital Improvement Plan "outlines specific projects the City plans to accomplish between 2016 and 2020, including things like protected bike lanes, new civic plazas, public art, park improvements, parking garages, streetscaping, and wayfinding signs" (p. 7). Denver started a Regional Transit-Oriented Development Fund, providing loans to developers to purchase land while it's still inexpensive (p. 10). Greenville, South Carolina has built a minor league baseball stadium, while leveraging federal grants to build "a large-scale community center; the only elementary school in the state with an engineering-based curriculum; a residential complex for mentally disabled individuals who were chronically homeless; and a network of trails and parks that connects the [West End] to the rest of the city" (p. 15). Amenities are where it's at.

A question nags, in spite of my enjoyment of most of the amenities that my own city has bought in the last few years: How much we know about the recent attraction of individuals and businesses to urban life? Do people really know why they do things, or do they just rationalize their impulses by repeating cues they have somehow picked up? Even if they can accurately assess their own set of motivations, can they get the proportions between the different motivations right? Otherwise, when we design cities, or make any kind of policy or run election campaigns, are we really just chasing shadows? And who if anyone is wielding those shadows?

Another maddening bunch of uncertainties is more directly pertinent. Presumably amenities are not all prima facie wonderful, nor are the wonderful ones all equivalently wonderful. How do we assess future costs and benefits of public spending? Advocates' claims for specific numbers of jobs created, or the dollar value of spillover effects, should be viewed with suspicion. Mankato writer Matthias Leyrer mocked his city's claims for the benefits from funding (another) new sports arena, while his city is still paying off debt incurred from a civic center 25 years ago:
Mankato has a Sports Commission, which is business owners that got together and kind of oversee Mankato sports, which is fine... I have no problem with it, by any means. But they were the ones who were like, "Well, according to our GAAP analysis, which was performed by us... according to our research, which was all internal, there's definitely a need for this right now.... [They say] "It's a quality-of-life issue, and if we build a new sports complex we'll attract new talent." To which I'm thinking, so why don't the businesses just pay for it, if they know it's such an ace in the hole? Why don't they pull all their money together and build their own sports complex? ("Sportscenter with Matthias Leyrer")
Don't get me wrong... it's great if we're not chasing smokestacks, or biotech firms for that matter, but isn't at some point the subsidy of new construction or the infrastructure that facilitates it the same thing? Amazing Place profiles its six cities with a relentlessly upbeat tone, but is vague about the public costs of the local improvements those cities made. I can see bike lanes and one-way-to-two-way conversions, libraries and parks, but those are relatively small potatoes. (Schools aren't, though.) But millions to convert a mall, and to help build an office tower, with all that CR was willing to do to make the casino happen, all seems like socialism for the rich. Some cities, like Baltimore, claim all manner of development from stadium deals, while in St. Louis the football stadium was a costly flop. (See the Field of Schemes site for a running commentary on what cities will do for major sports franchises.) Cleveland--actually Cuyahoga County--like Cedar Rapids built and now owns a downtown hotel/convention center, but Heywood Sanders has been flaying these projects for years. Even allowing there are sometimes successful huge gambles, they are gambles nonetheless. With public money I think there is a fiduciary responsibility to be prudent.
Source: English.al-akhbar.com
Don't get me wrong on this, either: I'm not criticizing Cleveland or the new Public Square. I don't know enough about either the city or the financial provisions, and the results look nice. I'm wishing for a (probably impossible) definition of when public provision of amenities becomes excessive.

And Cleveland's motivation to up their game is understandable. Though population has been nearly stable since 2010,the city has lost 14.2 percent of its population in the last decade, continuing a long slide through the post-industrial era. The infusion of public money for downtown "has also helped unleash a strong surge in residential and commercial construction in central city Cleveland"  (Schneider). But once all in on funding this, should they find out they're off on the amount of future benefits... then what?? That's an awfully large bolt to have shot, what with funds already committed to pension obligations and infrastructure and suchlike. The right amenities will maintain our quality of life through the next recession; but the amenity industry (call it "Big Amenity") wants to make sales and is not going to help us make those decisions. So, if we want to be intelligent about it, how do the decisions get made?

Public-private partnerships sound good--this blog is all about connections and conversations--but as Tom Waits says, "The large print giveth and the small print taketh away." There are expensive things we need that the market won't provide, like affordable housing and schools. But in the absence of a price signal, how does the public make intelligent decisions? Maybe start by stipulating: Keep it small and simple. If the market won't provide us expensive fun, like baseball complexes and intercity high-speed rail, maybe we're not economically ready for them.

SEE ALSO
Alexander Dukes, "The Emerging Democratized Economy," Strong Towns, 29 June 2016, http://www.strongtowns.org/journal/2016/6/27/the-emerging-democratized-economy
Andrew Keatts, "Cities Are Infected With Mega-Event Syndrome. One Geographer Says He Has the Cure," The Urban Edge, 27 June 2016, http://urbanedge.blogs.rice.edu/2016/06/27/cities-are-infected-with-mega-event-syndrome-one-geographer-says-he-has-the-cure/
Jacques Leslie, "The Trouble with Megaprojects," New Yorker, 11 April 2015, http://www.newyorker.com/news/news-desk/bertha-seattle-infrastructure-trouble-megaprojects
Andrew Price, "Small Bets," Strong Towns, 15 June 2016, http://www.strongtowns.org/journal/2016/6/14/making-small-bets
Jonathan Wynn, "Why Cities Should Stop Building Museums and Focus on Festivals," Des Moines Register, 9 July 2016, http://www.desmoinesregister.com/story/opinion/columnists/2016/07/09/why-cities-should-stop-building-museums-and-focus-festivals/86812972/

Amazing Place has amazing end notes to go with its amazing benefits. The first five (p. 35) deal with the futility of chasing firms, and should be tacked to the bulletin board of every city development office:
  1.  Badger, E. (2014, September 15). “Should we ban states and cities from offering big tax breaks for jobs?” Washington Post. Available at https://www.washingtonpost.com/news/wonk/wp/2014/09/15/should-we-ban-states-and-cities-from-offering-bigtax-breaks-for-jobs/.
  2. Dukes, T. (2014, October 14). “Despite big job promises, incentives often fail to deliver.” WRAL. Available at http://www.wral.com/job-incentives-often-fail/14052627/.
  3. Sherman, E. (2013, June 21). “Are corporate subsidies worth the money?” CBS MoneyWatch. Available at http://www.cbsnews.com/news/are-corporate-subsidies-worth-the-money/.
  4. Castro, A. (2011, February 10). “Amazon closing Texas distribution center amid sales-tax dispute.” The Seattle Times. Available at http://www.seattletimes.com/seattle-news/amazon-closing-texas-distribution-center-amid-sales-tax-dispute/
  5. Funkhouser, M. (2013, November 25). “How to Stop the Economic Development Wars.” Governing. Available at http://www.governing.com/gov-institute/funkhouser/col-economic-development-incentives-federal-law-washington-state-seattle-boeing.html.

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