Campus Martius, Detroit
Over the last fifty years a range of economic development agencies, departments and entities have been created around the country. Their goals have primarily something to do with retaining and attracting businesses to a particular place in order to have more jobs in that place. While ideally those would be new jobs, created out of new ventures and entrepreneurship, for the most part they are about moving existing jobs from one jurisdiction to another. The most powerful tool most economic developers have are government subsidies – reduced taxes, government-owned property offered at a discount, cash grants and tax-exempt borrowing rates. But seldom to never is it possible to pinpoint what actually creates new businesses and jobs – actual economic expansion. Even in the best cases, economic development is usually a zero/sum game. Where a business in one place expands it is because it is, at best, taking customers from another firm in another city, another state or another country. We don’t have a firm understanding of where entirely new jobs and economic value come from.
Government also attempts to improve a local economy by moving a government function, and therefore government employees, to a particular place. On the biggest scale this could be a military base. In an urban setting it could be a large government office. In Jamaica, I was able to observe the impact on the community of the results effective lobbying efforts to attract a college, a one million square foot government office building, a court and a laboratory and office space to the community. One thing that I noticed was that government office workers rarely left their offices to eat or shop. Most employees came from outside the community. With electronic record keeping, the largest governmental office employer halved its workforce leaving a massive structure mostly filled with file cabinets. The multiplier effect from such a tremendously expensive project didn’t seem very powerful. When the jobs left, there was a vacuum. There was no real expansion to local economic activity. Only the college seemed economically connected to the community.
Renaissance Center, Detroit
I have come to understand these two approaches as bribing people to bring their businesses to a place (incentives) and forcing people to work in a place (government installations). In the grand scheme of things, neither seems to be very effective – in some ways better than nothing, but in others, not so much. But over the long-term, their impact is negligible. With incentives, besides the problem of only moving existing pieces around on the board, generally when the incentives go away, the jobs do as well. With the mobility of capital, incentives don’t seem to organically root businesses in a certain place. In addition, for the most part the more effective incentives are, the more government money they require. The media regularly reports, at least in New York State, on the high amount spent by government per job “created.” The more targeted and carefully crafted an incentive program is, the harder it is for businesses to qualify and the few jobs it is able to attract.
When government offices are forced to move to a place, often that place lacks amenities for employees, and few high quality amenities come to the community as a result of the moves. Frankly, government employees aren’t that highly compensated and don’t seem to spend much money in places in which they are forced to work. When government priorities change and the function moves elsewhere, the community is left with an abandoned military base that it can’t figure out what to do with. In Jamaica, when the Social Security Administration downsized its workforce, its facility became a white elephant – particularly because it is difficult (for security and logistic reasons) for government to share space with the private sector – so the empty space couldn’t be rented to businesses.
One Bryant Park
But there is an economic development strategy that does work – creating places where people and businesses and people want to be. If you make a downtown or a community interesting to people, they move their businesses there because their employees want to be there, and the employees they are attempting to attract want to be there. In addition, the people attracted to places because they want to be there seem to come up with actual new business ideas, a rare few of which (rather than poach jobs from other places) actually create value and add completely new economic activity. I’m not sure why and how this works; maybe there is an economist who does. The work of consciously making places more inviting to people is something we are learning how to do and generally it requires fewer resources than paying someone to move or building a government facility for them to move to. Placemaking does, however, take time and patience. Because place –based strategies develop organically over time, they stick. The results of making places more desirable and improving the quality of life for residents and workers get deeply embedded in the social and economic environment of a community.
Before: the site of one Bryant Park
In the 80’s the commercial area around Bryant Park was a dead zone. Almost literally no one wanted to work there. Today, developers put a Bryant Park address on their billion dollar office buildings. The total cost of the Bryant Park capital restoration was less than $20 million. The annual budget for programming and operating Bryant Park in the year of its reopening in 1992 was just over $1 million (which initially came from the business improvement district and private funders, and today mostly comes from park concessions, making it a self-sustaining operation). I would call that some pretty serious leverage.
Perhaps the most visible more recent example of the efficacy of placemaking for economic development is Detroit. For decades Detroit was what I called a museum of bad urban revitalization ideas. Private sector leaders were drawn to big ideas and major capital projects; like the useless and rather gloomy people mover and the soul deadening and space-age fortress-like Renaissance Center. That is not to mention the last resort of economic developers, the casino (See; City, Atlantic). And then along comes the lively Campus Martius right at the heart of the downtown. That success stimulated the imagination of Dan Gilbert who brought his business adjacent to the Campus and began to extend its spirit gradually outward around the downtown as his businesses acquired more property.
Why is Silicon Valley where it is? Was Hewlett-Packard provided with incentives to be there? Of course not. Tech business were drawn to the area most obviously to be near Stanford (both out of nostalgia for Alma Mater, and out of the value of access to the universities talent pool) and, I think equally importantly, because it was within commuting distance of what many highly educated people regard as the most livable city in the world (which has created its own slew of problems), to which they were drawn.
If this formulation is true, why aren’t more of the entities involved in trying to stimulate economic activity working towards improvements to public spaces? The principle answer is, because this kind of work takes a time and discipline. Placemaking is not a quick fix. It doesn’t deliver instant results. But the five-year period that I believe most place-based development projects need to succeed is shorter than the time period involved in the myriad of failed projects attempted in Detroit from the 60’s through the 90’s that produced very little. From the day Bryant Park Restoration Corporation opened its doors, to the day the revitalized and programmed space opened was about 12 years. It was another four years before the project hit its stride. Some projects are successful faster – like Campus Martius.
For economic development agencies this suggests that refocusing of their resources and expertise to support placemaking activities would likely be transformative. For starters, because making places where people want to be is additive and doesn’t merely move economic activity from one place to another. It isn’t as much a zero/sum game as the deployment of incentives or government installations. For example, many state agencies have “Main Street” programs with limited resources; and as a result have limited effectiveness. I would suggest that fully funding these programs and staffing them with well-trained programmers and designers would reap significant rewards. A lack of professionals with experience in improving downtowns and public spaces is also a limiting factor. Perhaps more of the focus of urban planning graduate programs ought to be on the nuts and bolts of programming and improving public spaces. They might also be providing internship opportunities with successful renewal projects so that best practices can be shared, absorbed and spread.
I have written that chaotic signs and poor retail presentation is a serious detriment to downtown revitalization. Most Main Street programs give small grants to stimulate retail improvement. If a state economic development agency came in with sufficient resources to redesign and replace all of the signs in a downtown in compliance with thoughtful design guidelines, it might revolutionize downtowns across the state. If they also provided resources that enabled local organizations to make empty retail space available at low or no cost on a month-to-month basis to artists and makers, this too could be a powerful tool for downtown revitalization. Statewide programs like these would cost a fraction of the cost of a single capital project or an incentive program.
Other government agencies could also stimulate improved desirability and quality of life of downtowns and public spaces. Departments of Transportation in some places already promote traffic calming, streetscape improvements and greening and they should be provided with the resources to expand and staff those efforts. Parks Departments might fund and train staff for the creation of downtown and local horticultural programs. Commerce Departments could provide resources for activating empty retail space and encouraging food trucks and other downtown eating and drinking activity. New York State is already deeply invested in assisting brewers and distillers.
There are certainly are some instances where incentives or the relocation of government operations might provide a considerable boost to local economic activity – but they are occasional and need to be carefully targeted. But making centers of economic activity more desirable for people to be through thoughtful programming is a proven but undervalued and powerful tool that needs to be more broadly employed and funded.