Selections From new Book: Why This Work Matters

I’m so, so delighted to be able to start sharing with you a few selections from the upcoming Wise Fool Press book, Why This Work Matters.  This book contains 11 essays from community professionals from all over the country, telling us in their own heartfelt words how they maintain the courage and the determination to do the work they do… and how they keep at it when things go badly.

This selection is from a consummate downtown professional, Jennifer Kime of Downtown Mansfield, Ohio.  I asked Jennifer to contribute because I knew she would write something amazing and beautiful.  And she did.

Why this Work Matters will be launching soon.  In the meantime, keep it tuned here for more updates on the book and a few more selections from some of the essays.

Thanks.  Here’s Jen:

If I made widgets, I could tell you exactly what my production has been in the last six months; including profit margins and every economic indicator you could ask for. But economic development and building community is a messy job.  The victories are slow, and most often don’t occur for years.  There are no grand award ceremonies for us, rewarding us for the best sense of community created.  The value of the work is in the giving, and the reward is creating community pride.

I was raised at the mall. Seriously. My mom would drop me off with my friends and we would hang out all day at Little Caesars, the record shop and the Limited.  Those stores were our gathering place.

I’d hear stories, though, of a community where my parents grew up. A place that was authentic and safe, where children would walk to school and stop at the shops on the way home.  The business owners were friends and family and even neighbors.

That didn’t make much sense to me.  No one knew who owned or even managed the Little Caesars, even though I spent an embarrassingly large portion of my time there.  We were friends with the breadstick boy, but that was just good sense.

It took a move to Chicago, where I managed a flower shop in the Printer’s Row neighborhood, to really understand community.  The business owners were friendly, the restaurant managers knew each other, and they all knew I was “from the neighborhood.”

If I’m being honest, it was kind of uncomfortable at first.  I wasn’t from Chicago and I didn’t even know these people.  But the owner of the deli knew that I loved the Italian sub, no onion, and we all knew that the coffee shop barrista was moving to London and we sent her flowers.

Mansfield’s downtown was well on its way to revitalization before I came around, but I plugged myself in — with overconfidence in my education and travels and self-assured problem solving skills.  I applied the equations and formulas that I had learned and observed.  Progress was made and I was feeling pretty good those first couple of years.  Our achievements were measurable and I kept a running tally to show exactly what had been accomplished.

That’s where it gets messy.….

How people feel about a place goes in cycles.  a community’s pride or self deprecation can be charted, I’m sure of it.  

Here’s how that cycle goes.  First, something changes and everyone feels good.  A unique new business opens and the community wraps around it and takes a little piece of it as their own source of pride.  But a month later, when an older business closes, the public begins the rhetoric: “

Someone needs to do Something about this town…”  

That continues for a while, until the next big event where thousands gather and the moms and kids chat endlessly about how fun it was to be downtown. Pride is temporarily restored….

When I got into this work, I didn’t know how messy it would be.  Especially coming from finance where there is a right, a wrong and an end to each column.

But I did come to the work with a vision that I continue to hold all these years later.  It’s not a particularly specific vision, it’s not complete and it’s not particularly pretty either. My vision of where we are going doesn’t look like a new outdoor mall, or the past, or even what I’ve seen in other communities.

My vision looks like a unique place where people who live in the community feel a bit of ownership.  That’s the difference that I see most strikingly between communities that are dying and communities that are fighting this great revitalization challenge.  The key element is developing ownership, and it’s best measured by listening to people talk about a place.

It’s the stark difference between, “they need to do something about that park” and “have you been to our new coffee shop?” And that’s my single most motivating factor in the work I do…..

Making a difference in a community is really about building ownership.  My most valuable work is not only in re-creating ownership where it has been lost, but also growing it in the younger generations.  When I see children wanting to be here, I get a sense of relief:

Someday they won’t have to worry about “someone to fix things” because they will be fixing them themselves.  Then, perhaps, I can go back to finance, or maybe I’ll finally make some widgets…

 

 

Podcast: Buy 25 Tuesdays with Walnut Hills Revitalization Fund

We’re getting ready to launch a new addition to the Wise Economy Workshop — a podcast series that includes both readings from blogs and interviews with people who are doing interesting things to create Wise Economies in their communities.  The series will be available as an RSS feed from I Tunes and Stitcher shortly — as soon as we reconfigure a couple of things on the web site to make that feed work correctly. We’re looking for great stories to tell, so if you know of one that illustrates how to put the Wise Economy idea into action, please, drop me a line.

 

A couple of weeks ago I had a chance to sit down with Kevin Wright, the executive director of the Walnut Hills Redevelopment Fund in Cincinnati, Ohio.  Kevin’s organization serves a storied urban neighborhood that was the second-largest retail center in southwestern Ohio 75 years ago – but one that now experiences much of the vacancy, the deterioration, the challenges and the temptations of hopelessness that dog so many urban communities.  And like many of those neighborhoods, the local grocery store – both a basic service and a center of the community – has been at risk of closing for a long time.

But that’s where the story changes.

Kevin’s organization has been leading an initiative that takes the cash mob idea to a whole new place – and in the process started to shake up assumptions about urban neighborhoods and ways to get things done.  The initiative, which is a new one, is called Buy 25 Tuesdays.  Listen to or download the interview below, and you’ll discover a whole new way to change the discussion about your community.

 

Buy 25 Tuesdays Podcast

Here’s a few things I think we should take away from Kevin’s story:

  • This initiative didn’t work because the Walnut Hills Redevelopment Foundation made it happen.  it works because it has drawn together the full range of the community’s organizational capacity.  The Redevelopment Fund could not do this on its own – it does not have that kind of connection to the people they need to do the buying.  In years past, the Redevelopment Foundation and some of its partners might not have even considered collaborating like this – this is your turf and this is mine – but when they threw away those assumptions, this solution became possible.

 

  • When the organizations started looking to recruit those $25 buyers, they didn’t scattershot – they didn’t do what most urban planners do, which is to try to talk to everyone.  Instead, they focused on a small number of populations that they suspected would resonate to the idea.  Everyone who uses that store benefits, but only a targeted subset of the most motivated were mobilized.

 

  • When they developed that targeting strategy, they didn’t limit themselves to the arbitrary boundaries of neighborhoods. They understood that to find enough of the people who cared about that store’s viability, they needed to go beyond Walnut Hills proper – they needed to cover the store’s functional trade area.  Shoppers don’t worry about whether the grocery store is in “their” neighborhood or not, but people who work in community revitalization often feel obligated to stick within their official boundaries.  In this case, such an arbitrary cut-off would have probably killed the effort from the start.

 

  • Even though you might have assumed that Kroger leadership would leap with glee (“Hi, we’re coming to spend money in your store”), the neighborhood organizations experienced an initial wave of pushback from Kroger, which was probably understandably confused by such an out-of-the-box initiative coming from a neighborhood that seemed to present few opportunities.  Corporate leaders have come around and are beginning to partner meaningfully with the neighborhood, but that was nowhere near guaranteed even a few weeks ago.

 

  • The media coverage that got the corporation’s attention did not come out of the newspaper or TV broadcast. At the time I talked to Kevin, none of the traditional media had covered the Walnut Hills Buy 25 yet .   What got their attention?  A blog and a volunteer-posted video.   A lot of us still assume that we have to get coverage in the paper, on the TV news, whatever was historically the Big Media Gun in our community.  But that’s less and less the case, and in many cases might not be necessary anymore at all.

 

Keep in mind that what you are hearing here is a long-term initiative that is only a few steps off the blocks.  As Kevin indicated, it’s a very good start, but a start.  And the deep challenge facing this coalition of little organizations will be how to maintain the necessary consistent effort.  We have tendency to want that quick solution, and it takes a special breed of dedication to maintain focus and energy around an initiative that may take months or years to achieve its goals. But the issues that matter, these aren’t magic bullet solution kinds of issues.  We have to keep long game in mind.  So far, the Walnut Hills Revitalization Foundation and its partners are doing just that.  I hope they keep at it.  And I’ll look forward to checking in with them again in a few months.

 

I see usability

I see usability.

That was my dad’s favorite saying.  Dad was a dedicated junk collector, a man with no hesitation about pulling things off the curb in front of the neighbors’ houses.  But he wasn’t looking for salvage or a quick couple of dollars.  He was looking for usability.

 

Dad was what I guess you would call a tinkerer.  He always had projects in process – a car (or three) in various stages of disassembly on their way to being restored, an electronic gadget that he was convinced would work again if he could just find the loose wire, an idea for making something from the extra tin cans he brought home from the paint factory or the brass-plated  fittings that a friend at the foundry gave him or the pile of tire irons he found on garbage day around the corner.

When I was an adult and went home to visit, I knew he would want my undivided attention as he showed me his latest finds and described his new ideas for making flowerpots or bird feeders or paint brush holders or whatever.  One of my strongest memories of him: he would pull himself up to full (not very tall) height, puff out his (very slight) chest, hold up what looked like a random piece of junk, and declare:

“I…see…usability.”

Most of the time, I would nod and smile, but I didn’t see it.  And even when he did complete something (which didn’t always happen), I failed to see the achievement in it (these weren’t great works of art by any stretch).  But he never said he was going for artistry.  He saw usability.

Maybe this is why my dad, the paint factory worker, understood the value of old places long before I did.  Growing up in the small Rust Belt town where he also had gone to high school, the buildings and houses I saw everyday seemed…tired.  I didn’t know much better – I never travelled much until I was older – but I knew that my friends who lived in the newer neighborhoods had whole house air conditioning,  heat ducts instead of the metal radiator in my room that clunked and hissed but seldom seemed to heat anything, and walls that didn’t require tedious, unending paint scraping every damn summer.

I did eventually turn into a historic preservation specialist during the 90s — I have the distinction of being responsible for listing some of the ugliest buildings in the Badger State on the National Register of Historic Places.   In northern Wisconsin at that time, preservation was mostly on the minds of a few disgruntled… well, the common perception was crackpots.  I’ve written about Green Bay’s history with urban renewal before, and as late as the early 1990s, a blight removal plan that identified most old downtown buildings for demolition as soon as the city could get them was still in effect and being carried out.  I crawled through the basement of one of the final ones, documenting its last days, before it was demolished.  I’m sure I still have those photos.

Green Bay at that time was just starting to understand the economic benefits of preservation – but Dad understood entirely.  He started to mail me clippings from the Cleveland papers (remember actual clippings?).  And when I got on the phone with him, he was more excited to talk about a building or bridge rehab that he had read about than about what he and Mom were doing.

About nine months before my second son was born, Dad was diagnosed with a brain tumor.  My last time with him was about a month before the baby was due – last time I could travel from Cincinnati, where we had moved, to Cleveland, a drive of about 3½ hours.  Shortly before I left to go home, Dad sat me on the couch and pulled out a large envelope full of clippings.  By this point, the cancer in the speech center of his brain was wreaking havoc on his ability to read or write, and my name on the outside of the envelope was spelled with three L’s.  We spent a long time going through those clippings – all sorts of building rehabs and downtown revitalization stories in Cleveland and South Carolina and places that I had never heard of.  And at one point, he looked at me directly, and told me that he was proud of me, that what I was doing was important.

This at a time when I was continually wondering how I could keep working, with a toddler at home and a baby on the way,  when the cultural pressure to hang it up seemed to roar constantly in my ears.

These places matter.  What you’re doing to help them matters.

I see usability.

Dad died a week after Jonathan was born.  We gave Jon his name because that was one that Dad liked.

 

I still don’t really know why old places matter to us – obviously there’s the sense of history, the fact that these are often places that are built at the human scale and are thus more comfortable for us, the solid-ness of the materials,  so on and so on.  But why do they matter so much to so many, and on such a primal level?

Maybe it’s because even the most run-down, aesthetically unpleasing places have usability. They so often have the potential to be so much more than they are.

Maybe that’s what we really need to be working on: re-discovering and re-claiming our places’ usabililty.

Thanks, Dad.

 

 

Resilience

 

One of my favorite pictures in a plenary presentation I often give is a stock photo of a yellow crocus blooming through a melted patch in the snow.  Growing up in the Cleveland snow belt, plants weren’t much on my radar… except for that first crocus of the year, which came up at a time when spring was still imaginary and the black crust along the edge of the roadway made you think more of something dead than something coming back to life.  Despite blizzards, despite ice, despite unending leaden grey skies, that impossible little patch of color came back year after year.  There is something audacious,crocus in snow even ridiculous about a crocus… tiny, flimsy little thing with its blossom too big for its stem, pushing in when larger and prettier plants won’t grow, and taking on the same battle year after year.

Crocuses is nuts.

What do we want for the communities that we care about?  It’s fair to say that we want them to be healthy – to thrive and succeed for the long term.  No one goes into this business wanting to make short-term wins that will set the community up for disaster down the road.  But even with our best efforts to create a Wise Economy, we know that blizzards and long stretches of black snow will probably show up.

What we really want, then, is to build resiliency – to equip our communities to be able to bounce back from setbacks — to overcome lost businesses and political fights and bad development decisions and continue to provide great places for people to live and work and all that other stuff we talk about.

Here’s the kicker, though: resilient isn’t flashy.  Resilient isn’t necessarily dinner-plate-sized blossoms, neon colors, explosive growth, front-page news.  Resilience requires the right fit with the environment it’s in, with all its limitations and dirty snow and lack of sunlight. In most places, growing resilience requires a long-range, fine-grained strategy.  Community resilience requires careful attention to issues like business mix and diversity, places for many different kinds of people to live, plentiful options for getting around, systems for food and water and travel and people’s livelihoods that spread the risk, lowering the odds of a catastrophic blow.

About the time I became aware of the crocuses, the economy where I grew up was falling

Cleveland in the1970s
the Cleveland I knew then.

apart.  We in the Rust Belt had learned to depend on a few industries, a few leaders, a few simple assumptions about the world, and we concluded that things would go on that way forever.

It didn’t.  Cleveland today is a different place than it was in 1980 – better in some ways, more challenged in others, but in terms of many measures, a place facing much harder times than it used to.  If we’d had our eyes open, if we would have lessened our dependence on those few industries, leaders and assumptions, maybe things would have been different.  Maybe, at least, we could have weathered that blizzard better.

A resilient community might not make a Million Places to See Before You Die list.   It might not feature the showplace blossoms or the tallest stems, and it might look stupid on your dining room table.  But if what you really want is a place that lasts, a place that people will care about and care for through generations…if you want your community to be able to bloom again after the winter…perhaps we should take a closer look at that crocus.  Maybe it’s on to something.

Do the Math: Economic Arguments for Historic Preservation and Downtown Revitalization Webinar

Last summer I did a webinar for Heritage Ohio on making economic arguments in favor of public policy decisions to support historic preservation and downtown revitalization.  We focused primarily on the different economic lenses through which property owners and local government decision-makers have to view the economics of decisions, how short-term assumptions can lead local government folks to overestimate economic benefits to the community and underestimate long-term costs.  Heritage Ohio then put the slides and the audio on YouTube, where you can watch it.

I have spoken on this topic several times, but it’s a tough one to make any traction on, even within an hour-long presentation.  However, someone asked me where to find it recently, and I thought it might be useful to some of you as well.  I will warn you that it is an hour long, and the slides move but it’s my voice the whole way through until the moderator starts reading the questions that had been sent in.

Ironically, this was taped three days after I had a somewhat significant surgery, and Heritage Ohio kindly sent its staff down to Cincinnati so that I could do this from my living room in my flip flops. To me, my voice sounds a little softer than I am used to, but I don’t know if you’ll see any difference.   But thank heavens it wasn’t videotaped — that would have been bad news for everyone concerned.  🙂

Here’s the link:

http://www.youtube.com/watch?v=5WhvkYBVJ_w

 

Annotated presentation, Economic Development /Business Enhancement/Economic Restructuring 101, Heritage Ohio 2012 conference

The file at the link below is an annotated version of a presentation that Craig Gossman of MSI |KKG (newly re-branded as MKSK Studios) and I gave at the Heritage Ohio conference earlier this month in Toledo.  Craig and I were asked to work from a standard presentation prepared by Heritage Ohio staff, but for the sake of presentation clarity we felt that we needed to make some tweaks.  As I usually try to do with presentations, I’ve created an annotated version of what Craig and I said… or should have said, or would have said if we’d been smart enough to think about it at the time.

The element of the Main Street Approach (c) that we were presenting on has been a challenge for Main Streets from the beginning and is currently undergoing a sort of rethinking/rebranding among specialists within and without Main Street nationwide.  For those of you who are not steeped in this strategy for downtown revitalization, the basic premise is to create a volunteer-driven organization, supported by professional staff, that works to revitalize a traditional business district through a comprehensive approach designed to address all of the elements of a healthy downtown.  Typical standing committees include Organization, Promotions, Design and Economic Restructuring.

In the past, Main Street Economic Restructuring committees were typically charged with creating a market analysis (there’s a fun task to try to get your volunteers on board with!) and recruiting new businesses to fill vacancies.  It’s become clear that supporting the economic function of traditional business districts may require a different approach.  What that approach should be, however, is still kind of up in the air.  Some people feel that the focus should be on helping downtown businesses operate more effectively, playing a role similar to what economic developers know as Business Recruitment and Expansion (BRE).  Another group of people feel that strategic recruitment of businesses to fill vacancies should be the primary goal, while others feel that the complexities of urban real estate development are such that the committee should be focused more directly on helping make real estate deals happen.  Heritage Ohio, for the moment, is trying to address all three angles, as you can tell from this presentation.  But you can also tell by the number of slides in each section where the organization is currently putting its emphasis.

My concern in giving this presentation is that I think that addressing all three of these elements well would be beyond the scope of most organizations with a full complement of professional staff, let alone an organization that intends to make extensive use of volunteers.  And I don’t know which of these approaches should be subbed in for the old Economic Restructuring in the official canon, or if any of them should be.  My suspicion at this point is that each of these may be a necessary emphasis in different communities and at different times in their development.  And that implies that this part of the organization would have to have a level of fluidity, an ability to pivot, that we don’t expect from other parts of a Main Street organization –and seldom truly expect from most economic development agencies.

This is why I have placed so much emphasis on developing a plan of action for this part of the organization.  A community that is serious about fostering economic vitality in its downtown is going to have to look very closely and unblinkingly at its challenges and opportunities — both the ones that show up in the convention bureau’s publicity and the developer’s sales pitches, and the ones that take more work to uncover.    The bigger challenge, though, will be the actual planning part — understanding the extent of the organization’s capacity, setting priorities and creating a step-by-step plan of action that gives them a fighting chance to actually make a difference.  That’s not easy, and because it’s not easy, it’s often neglected.  But making a sound and useful plan has never been more important.

As always, if you have questions or comments, please see below.  If it’s something more relevant to Craig than to myself, I’ll pass it along and post his response here as well.

With that loooong preamble, here you go.  Enjoy.

BE 2012 Rucker Gossman version annotated final 05 10 12

 

Slides from APA Ohio, National Trust and Downtown Colorado presentations (also known as the Dry Throat Tour)

 For those of you that attended sessions with me at conferences in September or October, I am glad to say that I finally got the slides posted to Slideshare so that you can download them whenever you want.  As a gentle reminder, I am available for your conference, workshop, training, Little League 7th inning stretch…. maybe I should reconsider that last one….

 

Here’s the link to the session I did with Peter Mallow on economic evaluation methods.  I owe you all some examples, I am still trying to round up some good ones.  We also do have video of that session, which needs some editing… we’ll get that posted as soon as I figure it out.  🙂

http://www.slideshare.net/drucker/economic-evaluation-apa-oh-v-22

 Here’s the session with Mark Barbash and Jim Kinnett on National Trends in Economic Development.  I also need to find some illustrative examples of a couple of things from that session, which I will work on.  We do have video of most of that session, but it’s mostly the backs of people’s heads, which is what happens when you have three vertically-challenged presenters.   As an FYI, this session for us was a proof of concept for a broader training program that we are developing, so if you think some help with Economic Development for Non Economic Developers might be something your organization would find useful, please let me know.   

http://www.slideshare.net/drucker/national-trends-and-best-practices-in-local-economic-draft-41#moreList

 Here’s the session on Public Participation.  I don’t have video or audio of this session, but I am doing a reprise at the Northeast Ohio Planning and Zoning Workshop on November 18, so we’ll try to rectify that.  Stay tuned. 

http://www.slideshare.net/drucker/public-participation-oh-apa-10-20-11

After my stint in Dayton, I made a mad dash to Buffalo to present on You Can Do the Math: methods for demonstrating the economic benefits of historic preservation policies.  Here are those slides — both the slides and an audio recording will be available from the Trust.  I’ll post the links here as soon as I get them. 

http://www.slideshare.net/drucker/you-can-do-the-math-nthp-2011

 Finally, I realized that I never posted the slides from the Downtown Colorado Inc. plenary session I did in September in lovely Durango.  This presentation is a macro-scale overview of what I am thinking about lately, and what I think we need to do to reboot planning and economic development so that our communities are vibrant and resilient for the long term.  Again, I am  available for your annual conference, initiative kickoff or five year old’s birthday party.  Scary clowns and balloons not included. 

http://www.slideshare.net/drucker/an-invitation-to-build-a-wise-economy-rucker-doi 

If anything does not work, or if you have any questions, please feel free to ping me.  And remember, I supply my own batting helmet.

The Long Road to Recovery is probably longer than we think.

I put a post on my Google+ profile this morning calling attention to an article Richard Florida did for the Atlantic.   Florida does a nice job here of summarizing the thesis of his most recent book, and the way be ties together current and past pundits resonates to this former public historian. I’m grateful to him for being one of few mass media voices out there today who both understand U.S. history and can articulate its relevance clearly.  If more politicians and business leaders understood the economic and industrial history of the last quarter of the 19th century, we might all be a lot better off.

I don’t think there’s any question that we are in a reset, not a typical blip in the economic cycle.  A lot of people have written a lot about this lately, and the only mercy I see is that the debate between the “economy is structurally changing” advocates and the “no, it’s just a dip” voices is starting to be over.

As I have argued here and others have argued elsewhere, I think what we are experiencing today is the subsequent chapter, the continuation of  the sea change that we in the Midwest started going through back in the 1970s.  As anyone reading the Cleveland Press could have told you back then, it was pretty clear that the bedrock of manufacturing was disintegrating.  People argued violently about who was at fault and what should be done and how, but that didn’t end the plant closings and the layoffs and the loss of savings, economic security and optimism.  Today’s structurally unemployed and under-employed, the thousands of acres of wasted space and underused infrastructure that saddle the upper Midwest, all trace their roots directly to the unresolved issues resulting from that sea change.  Perhaps it’s just that now it’s catching up to the rest of us who never ran a stamping machine.

The world changed as it always does, and when it started to change, instead of figuring out how to deal with it at the deep level necessary to make a successful transition, we duct-taped the old machine together and did a lot of singing and dancing to hide the fact that the old system was gradually coming apart.  Which, of course, it eventually did.

We can’t undo the past, but we are losing the surplus capacity that allowed us to get away with not learning from it.  When I talk about Wise Economies, I mean using the critical evaluation and decision management tools that have been developed in education and business to make the best effort we can at trying to anticipate the long-term impacts of community decisions – and as a result, make the right choices more often.  I know that I beat that drum I beat because I live in the midst of a universe of over-simplistic decisions and unintended consequences that has defined too much of the world in which I live — not just in the past couple of years, but for most of my lifetime.  The deepest legacy of the post-Baby Booms generations like mine is going to be how we deal with the fallout of a few decades’ worth of failing to think ahead and make the tough choices necessary to deal with the sea change.  Changes happen over time whether we want to or not. But we should know by now that not dealing with them does not make them go away.

http://t.co/4A0OeaQc

So how do we start building Wise Economies? Grow Your Native Species

Q: What is this  flower?

A: An apple blossom.  It’s also the state flower of Michigan.

 

Q:  What’s this second flower?

A: A Hibiscus.  It’s also the state flower of Hawaii

 

Have you ever tried to grow these things in the Midwest?  I have. When I lived in Green Bay, Wisconsin (about the same latitude as Traverse City, Michigan), I had one scraggly apple tree in my backyard that an old-timer estimated to be about 50 years old.  The thing was uuuuugly… gnarled branches, sort of bent over to one side, very unsymmetrical.  And we did nothing to take care of it.  But every spring, that tree put out a drift of blossoms over its scraggly branches, and every fall it produced apples…which tasted awful, but they were apples, nonetheless.  On a recent return visit, we drove by the old house and peeked in the backyard, and there was that same old ugly tree, laden down with fruit.

I don’t have an apple tree when I live today in Cincinnati, but I do have a hibiscus tree.  It’s actually our second hibiscus– my husband keeps bought a second after the first one finally limped to its demise.   We have to keep it in a pot because it can’t survive the winters, we have to stake it up in the pot because it doesn’t have a deep enough root system to keep it upright in even a little bit of wind when we do put it outside in the summer.  It goes through random periods where it drops leaves all over the place, and when it’s inside it attracts swarms of little white bugs.  It’s got lovely blossoms, when it blossoms, but the rest of the time it’s a pain in the neck.

To grow an apple tree in this region takes very little effort.  To grow a hibiscus in this region takes a huge amount of effort.  If the goal of your gardening is to produce flowers (ignoring the fruit for a moment), growing an apple tree is going to be a more efficient, less labor-intensive way to meet that goal where I live than growing a hibiscus.  They don’t look the same, and the one that isn’t from here is always going to look more exotic and enticing.  But they are both flowers, and one produces the results we want in this location much more easily than the other.

Conventional approaches to economic development put a huge amount of emphasis on trying to grow exotics in places where they do not naturally grow.  We send economic development professionals on trade missions all over the world, we bleed ourselves to be able to announce that we have the lowest tax rates, and we pour millions of dollars into incentives to recruit businesses – or retain them after they are here.  But unless a business needs what we uniquely have to offer, we will never have confidence that they won’t just pull up and move to the next cheaper place when this load of tax incentives run out.  Recent stories about even as midwestern a stalwart as Sears are driving that point home.

There are two truths of economic development that we don’t often talk about.    The first is that very, very, very few businesses relocate in a year, and fewer now than in years past.  All of the chasing after site selectors that economic developers often do, all of the money and effort and travel spent trying to land that big businesses, is going after  a big payoff with extremely long odds.  Much of that money will see little, if any, return.  To a great extent, big business recruitment is a bet on the Powerball: fantastic if you hit it, but hardly what you want as your retirement savings strategy.

The other truth of the matter is that most businesses do not primarily choose a location on the basis of tax incentives.  When most businesses do go in search of a new location, they choose based on their business’s needs – regional location, workforce skills, access to transportation, ability to recruit key talent, etc.  They will ask for tax incentives because that’s part of the dance, and they will threaten to go somewhere else that has better tax breaks because it’s in their best interest to get a little more if they can.  But communities seldom win business that they would not otherwise get through tax breaks. Most business’s needs are much more complex than that.

Given that betting on the exotic requires so much additional effort for such long odds, I argue that the communities and regions that focus on cultivating and fertilizing the businesses and economic opportunities that grow naturally in their area have a much better chance of long-term economic health and resilience.  Your native businesses are the ones that are adapted to your social, cultural and economic environment from the start, and they are the ones who are in the best position to anticipate and adapt to changes in the world surrounding them.  They may be humble, even boring, compared to the unusual and flashy from Somewhere Else, but they are your safest bet for long-term growth.

What’s so great about local businesses?  This topic gets a lot of play lately, with debates over which types of small businesses are creating the most jobs and how to get them growing .   All important , but let me give you a different argument in their favor, and a long-term Wise Economy-type perspective.

Once upon a time, nearly 200 years ago, a couple of men started making candles in a little shop in Cincinnati.   Places with lots of pigs being good places to get cheap candle-making equipment, so this was a business that was a natural outgrowth of the primary industry in the town known as Porkopolis.   The company later added soap (also made from pork by-products), and gradually, gradually expanded production – employing more people, building bigger buildings, and adding additional products.  Today, that company is one of the largest in the world, and their products include Tide, Crest, Pampers and Swiffer.  And despite the fact that Procter & Gamble does not have factories in Cincinnati anymore, they are one of the largest employers, a major local taxpayer and a key funder of everything from youth summer programs to the United Way and the Cincinnati Symphony Orchestra.

P&G started in Cincinnati because of what Cincinnati uniquely had to offer at the time, and it stayed as it grew because of the business and personal connections.  Today it is helping create a new economy in the region – Greater Cincinnati was recently named a center of Consumer Marketing expertise, which includes disciplines ranging from package design to surveying and social media.

Look at the stories of the Fortune 500 companies, and you’ll find lots of stories that follow a similar outline.  Very few corporate headquarters relocate out of their home region (unless they merge or get bought by someone else).  If you want to create a stable long-term economy, if you want to build an orchard that will last,  you need to be growing your P&Gs today.

What does it mean to have a Wise Economy, and what does it matter to you?

The home town, back in the day

One of the items that I have been struggling to define over the last few months is what I mean by a Wise Economy, and how that approach fundamentally differs from what our typical approach to our communities.  Explaining this is both easy – because I believe it – and tough because it’s not a simple one-note samba (I’m a little jealous of pundits who have Magic Solution to offer!). 

First, some background: as I have said elsewhere, I have had a pretty decent front row seat for the collapse of the Rust Belt economy.  I grew up in a small town outside of Cleveland, where my father and grandfather ran a small paint factory.  As a result of being where I was when I was, I got see the first convulsions of the collapse of the traditional manufacturing economy.  By the time I was in middle school, the market for a jack-of-all-trades paint manufacturer had collapsed, and my father was out of work for most of three years.

From my perspective, much of what we see going on in the local and regional economies today, whether it’s overbuilt housing and retail sectors that are losing value, or declining wages, or public sector expenses that outstrip public sector revenues, comes fundamentally from the fact that our economy has changed – it started changing 30 years ago – and we haven’t fully adapted.  The economist Umair Hacque writes that much of our economic activity in the recent past has created false value – activity that created a profit on someone’s spreadsheet but didn’t actually make anything needed or expand the local economy.  This includes building buildings for which there is no demand, inventing new financial vehicles that don’t increase access to capital, adding widgets to a product in the name of “innovation” that don’t actually make anything better. Here’s the surprising part: Hacque’s research demonstrates that the actual long-term return on investment across a wide range of the economy has plummeted — and the amount of risk to the owners and everyone touched by the owners has skyrocketed.  There are no shortage of examples, but “Housing Market” will probably suffice.  

I tend to be a pretty pragmatic person, and one whose primary focus for a long time has been on local places. For me, the experience of the Rust Belt and the work of Hacque and others leads me to a pretty simple question:  How can we build or facilitate the growth of robust, healthy communities that thrive for the long term and aren’t setting us up for another crash?

I’ve had a relatively large number of careers – I have written for newspapers, taught middle school, run a historic preservation consultancy and provided economic development and planning expertise.  In my guts, I am probably more a planner than anything else, because that’s the discipline that still seems to have the best potential for finding answers to my Big Question.  But the way we typically do planning, like the way we typically do economic development and the way we manage other parts of community life, hasn’t provided the answers I have been looking for.  Instead, across the whole spectrum of community management, we lurch along most of the time from one sure-fire, answer-to-your-dreams solution to another.  Then we fail to recognize where we’ve been down a similar path before, we react in surprise and bewilderment when it doesn’t work or creates new sets of problems, and we start over again. 

The Wise Economy, then, is about making communities work, truly work, on multiple dimensions and for the long run.  For that reason, building a Wise Economy is not just a job for planners, or economic developers, or any other single community – building specialization.  The fundamental challenge of the Wise Economy is to make better decisions that will build the kinds of communities where we all want to be, and that means that it has to involve all of the people who make a community what it is.  That means elected officials, infrastructure managers, business leadership and the residents of the community.  I hope you’ll come along for the ride. 

What’s “Wise” about it?

I’d like to say that the premise behind the “Wise” part of the Wise Economy was exhaustively researched and analytically founded…but it’s not.  It’s mostly a thinking-in-the-shower kind of analysis, running through popular images of characters from books and movies and thinking about what made the “wise” characters wise.  For some reason Pat Morita in the original Karate Kid kept coming to the surface… but that probably says more about me than I should admit. 

We associate wisdom in people with certain characteristics, certain core actions.  And we know inherently that the “wise” people are the ones who usually turn out to have made the right decisions, even if they looked foolish in the moment.  Since communities are collections of people with shared characteristics, the more we can build the characteristics of wisdom into our community’s organizations, institutions, governance, and the basic ways that we work together, the more our communities will exhibit wisdom.  

So what separates the wise from the rest of us?  More to come.

Real sustainability includes economic sustainability

This post breaks all the Blogging 101 rules by actually having two purposes (ooh….don’t tell on me…).  The first purpose is to encourage you to read this blog entry by one of my favorite urban thinkers, Aaron Renn (who blogs under the title The Urbanophile).    This essay does an excellent job of analyzing one of my biggest irritations with current approaches to the urban sustainability movement: the almost overwhelming tendency of urban supporters to focus on greenhouse gas emissions as the reason why people *should* change their behavior in terms of how they travel, the food they buy, etc.  Leaving aside the debate over whether the greenhouse effect is occurring, there is a very pragmatic issue that a lot of the rhetoric overlooks: most of the choices we claim as “sustainable” have real economic benefits in terms of short- and long-term money savings.  There is an almost Puritan streak to the lectures about how everyone should sacrifice to do their part, but the simple fact of the matter is that a positive presentation of the economic benefits of making those choices is more likely to change more behavior than trying to guilt people into it.  That’s maybe not high-minded, but it’s a basic premise of dealing with humans.  Aaron says and illustrates it better than my summary, so check him out here:

http://http://www.urbanophile.com/2011/01/09/failure-to-communicate-accentuate-the-positive/

I’d like to go beyond Aaron’s point, though.  I think we are actually defining sustainability too narrowly.  In its pre-environmental days, we understood that to “sustain” something meant to carry, to keep it going for a long time.  You sustain a membership if you renew it on time; you sustain a grudge if you don’t forget what happened.  Similarly, a sustainable system is one that can keep going over time, and sustainability is a characteristic of an effort that can be maintained.  It’s obvious that this idea could be applied to an ecological system, but it can also be applied to anything that requires some energy to keep it going. 

Our communities are in dire need of sustainability, and green roofs and busses are not enough to sustain them.  We need to have sustainable habitats for the people who live in our communities — economies and jobs that allow them not just to thrive for today, but to have well-informed confidence in the community’s ability to provide that habitat into the future.  Without that confidence, any citizen that has the ability to leave for a better habitat, will, and what is left will become weaker and less able to support itself. 

My own Wise Economy Manifesto relies on environmental and horticulture imagery, as have the presentations that I have been doing around the country over the past couple of years.  And certainly the Economic Gardening approach to economic development taps into that same idea.  But if environmental sustainability efforts are going to facilitate deep and abiding change in how we tread on this planet, we must realize, acknowledge and accept that our communities and our people are part of that environment, and in need of being sustained as well.  That does not mean that we have a very good track record in building economically sustainable systems yet; Chuck Marohn of Strong Towns  has been doing an exceptional job of unravelling how our communities’ approaches to trying to grow local economies have created more Ponzi schemes than sustainable communities.  But our failure to build sustainable communities to date has only made that need more urgent.

One more point: a “sustainable” economy is not necessarily the same as “an economy where a lot of people get their income from building wind turbines or recycling.”  In many places, “green” industries also represent long-term sustainable growth industries, and in those cases, those businesses and jobs are certainly critical to building a sustainable local economy.  A small but growing number of communities in my own state of Ohio, for example, have been finding that their skill sets and old manufacturing infrastructure are giving them a chance to grow a more sustainable economy.  That’s a Wise Economy in action.  But again, a “sustainable” economic sector may do something entirely different.

We need to manage our communities as sustainable ecosystems: places whose internal interactions, as well as the way they interact with the rest of the world, give them a unique ability to support a richness of life over the long term.  And while a healthy ecological environment is certainly a big part of that equation, it’s not the only one.  As Aaron  illustrated, demonstrating the practical, everyday benefits of environmentally-responsible choices is going to be critical to making the Big Changes that environmentalists seek. Broadening that definition of sustainability to include us and our communities, not only as the problem, but as a system that needs care and sustaining, could lead to solutions even bigger.

Is our community’s financial future being undermined by changing demographics?

This post is NOT mine…. I get no credit except maybe a little editing.  My friend Bill Lutz, the Community Development Director for Piqua, Ohio, has a tendency to raise well-written and thoughtful questions on Facebook notes.  This one was so insightful that I thought it deserved a broader audience.  So I am glad to hand over the page to him (which also gives me an easy way out this time, I suppose!)  
 
For sake of context for those of you who are not familiar with Ohio government structure, Ohio cities typically rely on earnings taxes for the lion’s share of their income.  Earnings taxes are just what they sound like — taxes on earnings.  If you receive an entitlement-type income, such as a pension or Social Security, and you live in a city or village, you don’t pay a local earnings tax.  You do pay property tax if you own property, and sales tax, but only a tiny proportion of those funds go to the local government. 
 
Bill, the floor is yours.  I am looking forward to what all of you have to say — and I’ll make sure Bill hears it too. 
 
Thanks,
 
dgr
 
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by William Lutz on Tuesday, October 26, 2010 at 5:07pm

One of the many facets of my job is to use statistics to paint a picture of the community.  Usually the picture that is painted is not pretty, and this is out of necessity.  Those that hand out money tend not to focus on the well to do communities; rather, they like to help those communities that can demonstrate a real need.  So, every now and again, I hit up the latest figures from either decennial Census or the Census Bureau’s American Community Survey to paint a not so rosy picture of the community.  The usual suspects end up being figures such as poverty rates, annual median income, unemployment rates.  Sometimes I dig up more obscure figures such as percentage of households headed by a female (a likely sign of poverty).

This particular day I was interested in one statistic.  In 2007, 49% of households in Piqua were receiving some sort of retirement income; either Social Security or a pension.  In 2008, our community hit an imaginary tipping point: 51% of all household received some sort of retirement income.  I immediately was taken back by the finding — over half of the households in this town are receiving income that the city can’t tax.  Yet, the residents of the community still have needs that are to be met through tax dollars.  It’s an interesting system we have created for ourselves. 

 I immediately wondered if other local communities that were similar to Piqua had gone through the same type of transformation.  I looked at three other communities for which American Community Survey data was available: Troy, Sidney and Xenia [comparably-sized Ohio cities within less than an hour’s drive from Piqua – dgr].  In both Sidney’s and Xenia’s case, the percentage of retirement income households actually dropped between 2007 and 2008, from 48% to 47%.  Troy’s percentage rose from 42% to 45%, but was still the lowest of the four communities in this unscientific example.

 I then flipped the question.  I wondered what percentage of households reported wages from employment.  Of the four communities in the sample, you guessed it, Piqua was the lowest at 73.9%.  Xenia was at 78.6%, Troy 79.2% and Sidney at 82.6%.  In fact, all these percentages showed growth (or in Piqua’s case remained even) between 2007 and 2008.

 So, what does all this mean?  Well, these numbers could probably be interpreted a number of ways.  In my work in economic development, we are always told we need to do more to create more jobs.  Given these numbers, it appears that the number of retired workers in our community has actually grown.  Which leads to two thoughts.  First, if there were no job losses, we would have a job surplus, wouldn’t we?  Where would we get the extra workers to fill the positions from the recently retired?  However, in this economy, we know that isn’t the case.   So, the second throught is, if we are getting to the point of having more retired people, what is the right number of jobs to have or the right kind of jobs we need?

 I can’t see our 51% number going down.  Remember, these are 2008 numbers and things really didn’t get bad until 2009.  If this number continues to grow, it shows that a lot of people left the labor force and maybe they are gone for good; it’s hard to say.  Second, there are a lot of households with income from both retirement and wages.  I think this shows that maybe that the new employment opportunities that are being going to be wanted in the future aren’t necessarily 40 hour a week jobs, but more like part time work to supplement retirement incomes. 

 However, the greatest impact is on our local government’s bottom line.  While we still have a large percentage of households bringing in a wage (73.9%), our rates are lower than our neighbors, and as stated earlier, more than half our households (51%) have income we can’t touch.  As we look at our community’s fiscal condition, I am afraid that these means continued declining revenue for the community.  Not good news.  Especially since the amount of work we are expected to do in the local government hasn’t gone down. 

Either way, something is going to have to give.  The local government may have to look at new avenues to raise tax revenues (possibly by taxing retirement benefits) or severely cutting service. 

_____

Part of what so caught my eye about Bill’s thoughts was that I think this issue is going to become more and more critical far beyond Piqua and Xenia and the like.  Certainly any government that relies on earnings taxes will probably hit this issue.  Is this a case for a shift to other types of taxes? 

What do you all think?

So what was the Fiscal Impact Analysis Model intended to do?

As I outlined in the last post on this topic, OKI’s Fiscal Impact Model was designed to provide every community in the OKI region with an off-the-rack option for fiscal impact analysis, instead of requiring everyone have to have that analysis custom-made (and, as a result, most communities not looking at fiscal impacts at all.)  However, for OKI, the challenge was less like designing a series of suits for people of different sizes, and more like designing a series of suits for people whose arms and legs stick out from different places.  If you’re going to develop a first-of-its-kind fiscal impact model, starting out with a region that includes three states, about a dozen different local government structures and more flavors of taxes and services than the local UDF ice cream chain, is not exactly beginning with an easy assignment.

So why would someone take this on?  OKI is the Metropolitan Planning Organization for the Greater Cincinnati region, which means that it is reponsible for distributing federal transportation funds, among a lot of other things.  OKI’s leadership realized as far back as the early 2000s that they had to take a more proactive approach to the issues of sprawl and land use because population trends in the region were quickly outstripping the foreseeable supply of transportation funds.  An MPO doesn’t have any power to influence local land use decisions, but the MPO becomes responsible for funding the transportation systems demanded by those new residents.  Some MPOs deal with this challenge by… well, by not dealing with it, but OKI created a strategic plan for influencing land use planning in its region, with the long-term goal of conserving transportation funds. 

One of the recommendations of that strategic plan was to create a Fiscal Impact Model.  There are  a handful of fiscal impact models available nationally, ranging from a simple web-based estimate to a 6-mb Excel file developed by the Federal Reserve.  But each of these has notable shortcomings, either in terms of the value of the information generated, or in terms of its clarily and its ability to be used in day-to-day decisions.   Given three different states, one of which has a largely different local tax structure from the others, creating that model was understood from the start as a ground-breaking proposition. 

Next: how a fiscal impact analysis usually works, and how the OKI Model moves the needle.

The OKI Fiscal Impact Model — Finally ready to roll!

I spent a huge amount of time over the past year working with the Ohio-Kentucky-Indiana Regional Council of Governments and the University of Cincinnati School of Planning and Center for Economics Education and Research to develop a fiscal impact model that I think we can safely say is the most statistically sophisticated and the most user-friendly  fiscal impact analysis tool that exists, anywhere.  It’s an amazing resource, and the first media coverage of its rollout is here:

http://communitypress.cincinnati.com/apps/pbcs.dll/article?AID=/C2/20091103/NEWS/911030305&source=nletter-news

This is not exactly a Pulitzer Prize winner (it would have helped to spell the OKI Regional Planning Manager’s name right), but it does gives a little picture of what the potential impact of this tool is.  Since the article doesn’t really explain what it is, though, I’ll use the blog to give a little more explanation.  This will be the first of several articles designed to introduce people to fiscal impact, fiscal impact models, and how the OKI Model works. 

What’s fiscal impact?

A fiscal impact analysis is a process for estimating how a change in land use will cash flow from the local government’s perspective.   A fiscal impact analysis calculates the amount of revenue that would accrue to a local government as a result of a proposed development or plan scenario, and then it estimates the cost of the services that such a land use is likely to require. 

As you can tell, the first part is usually relatively straightforward (tax rate X units to be taxed, minus any credits or adjustments), and the second part is usually where it gets tricky.  Most governments know how much money they spend on different public services, but they don’t know what their actual per-unit cost is to deliver that service — they don’t know whether services to one type of land use cost more or less than another.  They might come up with an average, like an average cost per police run or average maintenance cost per lane mile, but those are more approximations for budgeting than actual information.   I wrote about this issue in a previous blog that highlighted the opportunties for better service cost management that would be available to local governments if they segmented and analyzed their data better.

The point of a fiscal impact analysis is to make the best possible estimate based on the information available.  And sometimes the information available is pretty slim.  But think about it: if your elected officials had a clear idea of how much it would cost to serve a new development, versus what revenues it would generate, how would that change land use planning decisions? 

Most of the time communities that want to know these answers conduct a fiscal impact study or pay a specialist to do the analysis.  They often come out with great information, but there’s two problems.  One, a fiscal impact study of a particular community is necessarily going to be limited by how the local government organizes and details its financial information.  If costs are lumped together, even the most diligent analysts may find that they simply have to make some educated guesses.  The second problem, of course,  is the cost of a one-off analysis. 

In recent talks I have been comparing a one-community fiscal impact analysis to a custom-made suit, and a fiscal impact model to a suit off the rack.  Both of them work; one fits almost perfectly, and one fits not quite as well (but still pretty darn good).  But the model makes fiscal impact available to local governments that could not afford the custom treatment.  And because the OKI Model draws on more than one community’s information, it can compensate for limitations, or just plain strangeness, in the local data.  Kind of like designing a suit after looking at hundreds of others, instead of trying to invent one from scratch.

So you could say that OKI wanted to make good suits available to everyone in their region, including communities that couldn’t afford the custom work.   Interested in how the story turns out?  Stay tuned!

Training on investment tax credit opportunity

For my Ohio friends — a good training opportunity on one of the very valuable resources available to owners of historic buildings.  One of the single best tools for conserving embodied energy, reinforcing the urban environment and keeping a key raw material needed to build new businesses –> existing, inexpensive business space. 

If you’re not in Ohio, look for a training like this in your state:

http://www.heritageohio.org/wp-content/uploads/2009/09/daytontaxcredits.pdf