Continuing my series of parts of … something… exploring a potential new future role for traditional downtowns and business districts. You can read the previous sections here, here, and here. Might as well see where this goes…
So what do we do?
So, here’s the key question: how do we increase and demonstrate the pragmatic, real-world value of downtowns – not just to downtown lovers and entertainment – seekers, but to the entire local economy? How do we make downtown a more integral, essential, necessary part of the local economy?
I think the secret lies in claiming, reinforcing and articulating a new economic role for downtowns, one that can compliment and reinforce the dining/shopping/entertainment economy and the economic actors that come in search of that. In a lot of communities, that role, that new opportunity, is as the incubator, the nursery, of the local economy’s future. Downtowns already have the parts and the preconditions. And increasingly, they’re fulfilling that role without anyone but a few insiders really realizing it. But people who care about downtowns and about the health of their local economy need to help downtowns step into that role, and communities need to give renewed attention to that role.
Not everything to everyone
OK, let’s not get too carried away here. Clearly there’s a whole lot of roles in a local economy that downtowns aren’t really set up to do anymore, since we developed all those choices that we talked about before. Brick and mortar retailers of basic goods and services – the stuff we need everyday – typically have to operate at a larger scale, a bigger physical footprint, than they did in the 1900s because all those choices means that they face enormous competition that holds their profit margins to the slimmest of amounts. There’s a reason why it’s hard to find laundry detergent and paper towels in the little downtown groceries that sometimes take root in the wake of downtown residential development: there’s not enough profit margin in those products to make them profitable for the store, especially given the amount of precious shelf space they take up. Even when a larger grocery store can make it work, such as in some of the most booming downtowns of the past couple of decades, you’ll find a much wider range of selection in high-end products, and fewer choices and smaller containers of basics. That’s not just because the shoppers are generally more affuent. It’s because the smaller spaces mean that the retailer has to move higher-margin goods, like prepared foods, to make enough profit.
Similarly, I think we all have to admit that the relatively tight quarters and small floor plates in downtown areas don’t lend themselves to assembly-line manufacturing. If building a product requires conveyor belts, robots, large machines, large quantity packing and shipping, rail spurs, loading docks, etc., there are very few spaces inside a traditional downtown that can accommodate them. They just need too much land, in addition to any other unpleasantries that might not be appreciated by residents and diners (lots of cities have a sort of grey belt around their downtowns that historically included manufacturing, and may still today, but that’s a physically different area than the traditional downtown),
Obviously there’s other businesses that don’t fit in a traditional downtown — either they would have a hard time operating in that environment, or they would have negative impacts on other downtown uses. Coal mine? Warehouses? A couple thousand office workers who all need immediate physical access to each other? Most traditional downtowns would have trouble accommodating these. They are types of uses that came along after the traditional downtown environment was established.
Here’s the deep challenge: these kinds of businesses – large retailers, manufacturing, warehouses, big offices, coal mines — that’s what people typically think of as “economic development.” And it’s what a whole lot of city officials and mayors and members of council – and economic development professionals – think of as “real” economic development. This is the stuff that they spend time and money on – sending staff on a trip to sell a business on moving to a community, building roads and sewers and running power lines to new development sites, giving incentives to get those businesses to move to town. The size of business that they’ve been willing to tout as a “win” has been shrinking, but that’s because the size of businesses as a whole has been shrinking. And sometimes these generally smaller businesses end up downtown because their employees want places to dine and drink and live the interesting city life.
But to many economic developers, government heads, elected officials, and the like, the purpose of the work is to bring in the biggest new thing you can get. The measurement is volume: number of jobs, payroll,amount of new taxes. How much the deal added, and how much it increased the amount available. This is serious business.
I don’t mean that to knock my economic development colleagues – that is the job that many of them are charged to do. But for downtown supporters who want the places that they care about to mean more than novelty and entertainment, that purpose presents a challenge:
The types of economic activities that city governments and other agencies put their primary emphasis on, the types that make a real difference in the numbers they need to show…
Those, most of the time, don’t fit in a downtown space.
This is how we ended up with the downtown-as-entertainment-district. Economic practices and the impact of economies of scale changed, and the “serious” businesses moved where they could get more space, more land, bigger buildings, etc. The businesses that could fit in the smaller spaces were cast, and sometimes cast themselves, as niche, speciality, cute. Appealing, but without “real” benefit, without substantial and easy-to-count impact on the entire local economy.
That’s why many more cities today have economic incentives for a new warehouse than they do for a new downtown cafe. From their perspective, the first is a need, the second is a nice-to-have.