A Tale of Two Cities

I recently when on a trip back East and visited two well-known but very different cities–Niagara Falls and Georgetown.  One was thriving–great stores and restaurants, a lively atmosphere and a steady stream of pedestrian traffic. The other was not just deserted, it was decaying.

First stop was downtown Niagara Falls.  Despite being within walking distance of one of the most amazing tourist destinations in the country, the downtown was barely hanging on.  Storefronts were vacant, historic buildings neglected and there was an overall sense of resignation.  Even the area immediately surrounding the falls was a disappointment.  Major projects–indoor gardens, attraction restaurants and the like–had come and failed. All that was left besides the empty buildings was a handful of t-shirt shops and pay lots. Even so, residents still spoke of a casino as the future hope for the city.

The state parks surrounding Niagara Falls and the nearby Niagara Gorge were wonderful–bike trails, hiking trails, plenty of beautiful nature areas.  It seemed odd that this huge resource was almost ignored as a potential revenue generator.  It makes some sense–Niagara was always a city of big industry so looking to another big project to save the city is an understandable, although flawed, approach.

What’s the solution for Niagara Falls?  The downtown area could stand a heavy influx of dollars, even in the form of incentives.  A block-by-block project with a dual focus of repairing historic buildings and recruiting small businesses would be the most reasonable approach. Ironically, it’s thinking small that will bring them success, not thinking big.

Niagara also needs to embrace tourism–in particular, adventure tourism–as a legitimate economic generator. Look at some of the small towns in Utah who live and die based on tourism and their proximity to National Parks.  Really, who would go to Moab if they didn’t have a big mountain biking culture and the scenic locations to back it up? (I think the best thing the state could do is turn Niagara Falls and the Gorge over to the National Park Service to create a large and instantaneous visitor base–but that’s not a suggestion New Yorkers like to hear.)

So what’s the solution for Niagara Falls? Think small and think different.

Next up–Georgetown and what’s going right for them.

How does our neighborhood stack up?

The online magazine GOOD recently listed the 6 things that make up a perfect neighborhood.  Let’s see how our downtown stacks up:

1) A Signature Event
Downtown Columbia markets itself as a festival city and once had quite a few small, local events (think Twilight Festival). In the past few years though, at least two events have been making a splash on the national scene–the True/False Film Festival and the Roots ‘n Blues ‘n BBQ Festival–and I see more regionally focused events on the horizon.  Is Columbia known exclusively as the host city to one of these festival? No, but our diversity does allow us to attract a wider range of visitors to Columbia. Give these events 5 more years and they’ll be firmly lodged in the national calendar.

2) Third Places
Downtown is virtually made up of third places–be they coffee shops, bars, pubs or what have you.  Although these places are by no means exclusionary, people do tend to have their regular hang outs.  I’m partial to Flat Branch Pub’s patio around 4 pm on a Friday but I’ll hang out at any of our coffee shops. Speaking of which, how do I become one of those people who sits in a coffee shop all day with a laptop and cell phone–and still make a living?

Photo courtesy of good.is

3) Public Spaces
From public squares to public parks, downtown was planned in a way that has some public spaces breaking up the private ones (although certainly not on the level as a city such as, say, Savannah).  Interestingly, areas planned and labeled as “public spaces” are less successful, often requiring programmed events to draw people to them.  The best public space downtown?  I’d have to say the MKT trail which leads from the KATY Trail right into downtown.  No programming necessary.

4) A Human Scale
This isn’t just about walkability, it’s the ability to make connections and get things done.  As far as walkability, we’re struggling with the same issues as other downtowns–high density areas brimming with activity interspersed with stretches of blank spaces, such as surface parking lots.  We’ve done a good job of bringing certain areas of downtown back to life, the challenge now is to create attractive pedestrian connections between these areas.  As far as making connections, we’re far ahead of the game.  Not only are Columbians highly involved in local government, it’s relatively easy to network or plan joint projects while hanging around at a third place.  In fact, some of the best partnerships I’ve had came about because the right person was invited to Friday afternoon on the patio.

5) An Anchor Institution
The University of Missouri is a key anchor institution for our downtown but it’s not enough that they border our downtown and provide customers for our shops and restaurants. Working cooperatively is the key.  It wasn’t until just a few years ago that the university and the city began their first joint planning project for the portion of downtown bordering the college. Stephens College, on the other hand, is religious about getting involved–to the point where many downtown events place venues at the college and departments draw on experts from the downtown to teach classes.

6) Diversity 
Diversity is always harder to achieve in the middle of the country but downtown itself has a diversity not seen in other areas of the state–partly due to the three colleges bordering downtown but also because it feels open.   We have a pretty diverse group of small businesses owners–although female-owned businesses probably outstrip everyone else.

So there you have it.  Could we do better? Of course. But the good news is we’ve got a strong foundation upon which to build.

Hospitality Zones

We’re seeing a new shift in downtown policing, particularly when it comes to late-night activities. In many downtowns, particularly those in college towns, police officers often feel under siege with the sheer amount of late-night patrons, underage drinking, disturbances and fights.  And the next morning city services are as overloaded as a host trying to clean up after a wild party.  Keeping people safe and cleaning up the mess—surely there must be a better way.

Now we’re beginning to see a new paradigm emerge, one that focuses on customer service and increased sales, not just public safety.  The concept of Hospitality Zones, coined by the Responsible Hospitality Institute (RHI), is a well-tested and well-supported approach that downtowns are using to create and maintain a Sociable City.

According to RHI, a Sociable City “invests in the safety and vibrancy of the nighttime economy by nurturing hospitality zones where people of diverse ages, incomes and lifestyles unite as a community to share food, beverages, music and dance in public venues.”

The focus of a hospitality zone is just what it says: being a good host to your late-night customers by proving for their well being, ensuring that they feel comfortable and safe, and even making sure they can find a drink in the evening and a ride home later that night.  By doing so, you automatically cut down on all the problems associated with night life such as driving under the influence, fighting and the like.

This is a cooperative approach where businesses, the police and the community work together to improve the nighttime economy. A well‐planned and well‐managed hospitality zone can reduce crime, increase businesses and attract new residents and new entrepreneurs.

RHI lists the core elements of a Hospitality Zone, including:

1. Music and Entertainment
Nurturing talent and expanding venues to provide multi-generational entertainment.

2. Community Policing
Gaining regulatory compliance through on-going communication, collaboration and education.

3. Service, Security and Safety
Creating internal policies and procedures so businesses can provide quality products and services in safe environments.

4. Multi-use Sidewalks
Managing the sidewalks as a venue, by using vendors, entertainers, outdoor seating and kiosks to create activity and vibrancy.

5. Late-night Integrated Transportation Systems
Assuring coordinated and appropriate public transportation to match nighttime demand.

6. Quality of Life
Managing the impacts of noise, trash, traffic, pedestrians and disorder through zoning, use codes, allocation of services and public outreach and education.

Notice that it’s not only about checking ids and breaking up fights.  It’s about expanding offerings, increasing services and welcoming customers into your downtown.

Wanted: SF/SM

Whenever I tell people that Columbia needs to attract more young singles, I get some odd looks.  Don’t we already have plenty of young college students?  True, but how many of our nearly 30,000 students actually remain here in Columbia?  You could say that talented young people are Columbia’s number one export.

That’s a shame because in the new economy, the key to a city’s economic growth is 25 to 34 year olds.  These well-educated, single professionals make up the bulk of the creative class—knowledge workers who traffic in ideas, innovation and technology.

Researcher Joseph Cortright calls this demographic “The Young and the Restless.”  They’re an intelligent, mobile and relatively inexpensive workforce—and they are the key to making it in an economy that has seen major shifts in recent years.

The old economy focused on selling your city on the cheap with low cost labor and unrealistic incentives.  The new economy focuses on attracting creative and talented people—and using them to lure in businesses.  These young professionals are highly mobile and will pack up and move to a great city, trusting that a job will be there.  Gone are the days when a graduating senior relocated to a run-of-the-mill town simply because she or he had a job offer.  Cortright says that cities who actively work to make themselves attractive to 25 to 34 year olds—by making people the focus of economic development efforts— are the ones that will come out on top.

This certainly isn’t the only demographic we should be courting.  The Columbia Chamber of Commerce, for instance, is doing a great job promoting Columbia as a home for retirees.  Although the emphasis on the number of hospitals we have seems to suggest this generation is bordering on the infirm, that’s certainly not the case.  Today’s retirees are “younger” than ever before.  You’re more likely to see them at rock concerts, brew pubs and rock climbing gyms than at senior centers.  No wonder the Chamber has this demographic in their sights.

However, a city comprised of college students and retirees won’t get us where we need to be.  We have to ask ourselves, what do we need to do to keep these young and talented professionals here in Columbia?

Part of the answer is amenities—a live music scene, recreational opportunities, a vital central city and a diverse and tolerant society. They’re more likely to be up on the latest innovations, the coolest technology and the hottest new podcast—so the local culture has to be open to innovative ideas.  And, in a statistic that’s close to my heart, they’re a third more likely to live within three miles of downtown—meaning more central city housing geared to 25 to 34 year olds.

The rest of the answer lies in our current relationship with our college students.  Have we welcomed them into our community or do we view them as the reason for the open container ordinance?  Do we have the tolerance for diversity necessary to attract young people from all walks of life?  Are we encouraging a climate where innovative, tech-based businesses can thrive? Do we know what they want, why they leave and where they are going?

Instead of breathing a sigh of relief when all the students leave for the summer, let’s find out what we need to do to get them to stick around.

How Cool is Columbia?

Truly cool cities don’t need marketing campaigns—just ask the folks in Austin or Boulder.  But what if your city isn’t cool and wants to be?  Michigan is trying to answer this question with its Cool Cities campaign, a statewide initiative to spur economic development by making Michigan, well, cooler. 

What makes a city cool—and how cool is Columbia, Missouri?  An even better question is why are cities across the country focusing so much attention on something that seems completely unrelated to a strong and vital economy?< Michigan surveyed residents and key recruitment targets and came up with a list that mirrors what many experts are calling for, including Richard Florida, author of The Creative Class and researcher into what makes cities thrive in today’s world.  Number one in the catalog of cool? Walkable communities—followed closely by vital downtowns, arts and culture, recreational options, historic preservation, mixed-use developments and tolerance for diversity. 

Hard to argue with great amenities like these—but why are they so important to economic development?

Besides being the backbone of a great community, these amenities all appeal to workers in the new economy—knowledge workers in creative fields who will relocate to cities that provide them with “peak experiences.”  Whether this is intellectual stimulation, outdoor recreation, great culinary experiences or distinctive neighborhoods, the up and coming talent is looking for more than just a job with a good salary.  Even better, they’re willing to pack up and move to a city that can provide them with these peak experiences.

This signals a dramatic shift in how we need to approach economic development.  In the old economy, cities attracted businesses by offering them cheap labor or abundant natural resources.  Incentives became a must as cities competed with each other to attract companies.  Significant global changes have made this a losing battle for many U.S. cities.  In the new economy, the focus shifts to ideas, innovation and technology.  Next-generation cities are attracting educated, talented and creative people by providing them with physical and cultural amenities.  Hit critical mass and companies will locate where the talent base is.

So, how is Columbia doing when it comes to cool?  

We’re certainly on the forefront in many areas.  We have a vital central city with great dining and entertainment options.  We have an extensive park and trail system, with more federal funding on the way.  We’re also fortunate to have a strong knowledge base—not only are we home to three colleges but we’re also working on key projects like the Bond Life Sciences Center and the Mid-Missouri Technology Business Incubator.  Best of all, we score high on one of the most important indicators of cool—authenticity.  As cities across the nation become more generic, the creative class and the knowledge workers will be seeking out cities that have the very authenticity we tend to take for granted.

Could we do more?  Of course.  What we really lack is a bold, coordinated effort among the government, business and non-profit sectors to turn Columbia into a next-generation city—a city that builds its economic base upon creative and talented people and then actively sets out to recruit them.

Creating the type of city that appeals to this talented core of people has other benefits as well.  As we work to improve these types of amenities in Columbia, we’ll be creating the type of city we’d like to live in as well.  Because really, who doesn’t want to be cool?

Employee Satisfaction

PRSA’s quarterly magazine recently cited an alarming statistic: 49 % of Americans are dissatisfied with their jobs. Equally gloomy is the fact that 64% of workers under 25 are unhappy.

This is likely the result of several factors.  A soft economy makes it tough to move on to a more suitable job and people are seeing fewer promotions or salary increases.  Maybe though, the traditional job market isn’t keeping up with the changing outlook of employees.  If the younger work force is bored, that will only get worse as the next generation of young people join the job market.

Is the solution to revamp the tried-and-true work structures in order to accommodate younger workers and non-traditional ways of working?  Or perhaps quality of life becomes even more important to people. Downtowns have always been seen as places where jobs are created. Maybe now they can be seen as places where employees are created.

Tax Increment Financing

There’s been a lot of talk of a new development program called Tax Increment Financing (TIF). I’ve put together this overview designed to describe how this program works and highlight what TIF can do for a downtown.

TIF Overview.
Tax Increment Financing (TIF) is a way to help encourage the development of catalytic projects,particularly in a downtown area where lack of economic investment could eventually lead to blight.It’s also reserved for projects that would not occur without this assistance.Any project can be submitted for review by the TIF Commission and to date, two projects have–a mixed use development on the corner of Tenth & Locust and the Tiger Hotel.The Tenth & Locust project is a combination of retail (possibly a grocery store) on the ground floor, offices on the second, and apartments on the upper floors.

The Tiger Hotel, a Columbia landmark, is currently unused save for a few offices and meeting rooms. (Bleu Restaurant is not in the Tiger building.) The project would rehab the
building as a boutique hotel.

What is TIF?
A TIF leverages the future taxes a project will create in order to help fund the project. How exactly does this work?

First, a property owner secures a bank loan for 100% of the project costs backed by his or her own collateral–the city does not guarantee the loan. If the project fails, the developer is on the hook for the entire amount.

Second, the property tax assessments are frozen at current levels. All taxing entities–city, schools,county, the Special Business District–continue to receive the same amount of property tax revenue as they do right now. Only the increase in property taxes goes to the project.

Third, the sales taxes are also frozen at current levels–but the increases are split between the project and the taxing entities. Any taxing entities receiving sales tax will continue to receive their current amount plus 50% of increase in sales taxes generated by the project.

Fourth, the increase in taxes is used to pay off a portion of the loan, usually 15-19%. TIFs usually take between 15 and 23 years to pay off, although a successful project can be paid off even sooner. When the loan is paid off, the tax revenues increase to their new levels and everyone benefits by receiving those additional revenues. The Special Business District benefits because not only do we have those new taxes (to help provide more services and programs) but we also have a new development that will serve as an economic catalyst in an area that sorely needed it.

What TIF is not.
• A TIF is not an added tax. Consumers will not be paying more for goods or services.
• A TIF is not funded by the city. A developer does not simply receive a check from the city nor are any taxes abated.
• A TIF is not secured by the city. A developer assumes 100% of the risk when it comes to the bank loan and the project itself. City bonds are not used.
• Tax revenues will not decrease. All taxing entities will continue to receive their current tax revenues and some will see an additional 50% of new sales taxes. All entities will see an increase in revenues if the tax rate increases.
• TIFs are not just for blighted areas. TIFs can also be used for conservation areas–areas that could become blighted if no action is taken to repair or rebuild the infrastructure, buildings,etc.
• TIFs are not suitable for non-profits. Because TIF is a tax-based incentive,organizations that pay no taxes cannot benefit. A non-profit that wants to use TIF must become a for-profit entity.
• Schools will not be overburdened. The schools will continue to received their current tax revenues and these projects–a hotel and apartments designed for adults without children–will not add more children to the school system.

Why do we need TIFs?
The future economic strength of The District depends on smart development projects–infill development projects built on empty lots, rehabbed older buildings, building up rather than out, and creating space for more residents. Even though the last few years have seen a building boom here in Columbia, very few of these building projects were located downtown. If these projects didn’t happen in boom years, how can we expect them to happen now?

We can learn something from the significant increase in historic renovations downtown. This level of development would never have happened if not for the State Historic Preservation Tax Credit. This tax credit helped property owners bridge the gap between what the banks were willing to loan and what the project would really cost. TIF will serve this same function for larger projects, many of which are either new or ineligible for tax credits. Without this new incentive we simply won’t see the catalytic projects needed to bring our city to the next level–nor will it help us compete with cities such as Springfield, St. Louis and Kansas City who are already using TIFs to create more exciting, attractive and economically strong downtowns.

Top Ten Jobs of the Next Decade

NPR had a story this morning on where this decade’s jobs will come from. The disheartening news was that 6 out of the top seven fastest-growing jobs are low-skill, low-wage jobs.

The top ten:

1. Registered nurses
2. Home health aids
3. Customer service representatives
4. Food preparation and serving workers
5. Personal and home care aides
6. Retail salespersons
7. Office clerks
8. Accountants
9. Nursing aides, orderlies and attendants
10. Postsecondary teachers

According to Harvard University labor economist Lawrence Katz:

“The challenge is to move those jobs up the skills ladder. There’s no reason, he says, that home health care workers couldn’t be better educated to provide patients with greater value and, as a result, command higher wages to improve their own living standards.”

The trick, he says, is to “professionalize” these jobs.

Two thoughts:

1) Perhaps we need to think differently about the service industry. We can’t thrive as a nation by serving hamburgers to each other.

Some of the long-time property owners here in our downtown were retailers. They started out selling shoes, then started a business, then bought the building.  That’s retail but it’s not a career to sneeze at.  Well-educated or well-trained retailers can go head to head with the nationals because they have the knowledge and support system necessary to be successful.

2) Perhaps we need to stop obsessing over manufacturing jobs, say goodbye to large scale industries and put our money and efforts towards other areas.  Why can’t we use Apple or Microsoft as a business model rather than General Motors and US Steel?

Creative Incubator

Here in Columbia we have a new business incubator focusing primarily on life sciences.  It fits nicely with the University of Missouri’s focus on biomedical (particularly veterinary technology), agriculture and sustainability and renewable resources.

We also have an arts incubator of sorts, Orr Street Studios.  Artists can rent small studio space and share a public gallery and a part-time marketing/events person.  The interaction between artists of all types helps get their creative juices flowing.

What about a similar set up for small businesses?  Creative companies, non-profits and other professionals often start out with a skeleton staff and a budget best reserved for things other than rent.  Small offices, public meeting room, space to gather, even a shared kitchen.  Even among different fields, the ideas and the energy would be contagious.  Can you imagine how much more creative you’d be than if you were sitting alone in a home office?

Size Does Count

A Kauffman Foundation report offers some interesting insight into the job market:

“If one excludes startups, an analysis of the 2007 Census data shows that young firms (defined as one to five years old) still account for roughly two-thirds of job creation, averaging nearly four new jobs per firm per year. Of the overall 12 million new jobs added in 2007, young firms were responsible for the creation of nearly 8 million of those jobs.”

They found this trend in the Columbia, MO job market as well. The last five years have seen:

  • 20% increase in public sector jobs.
  • 22% decrease in jobs created by out-of-state companies
  • 22% in jobs created by small firms (1-9 employees)
  • 7% increase in jobs created by mid-sized firms (10-100 employees)
  • 22% decrease in jobs created by large firms (100+ employees)
It’s clear the old paradigm for Columbia no longer holds.  We can no longer rely on Quaker, 3M or State Farm to locate a manufacturing plant or a regional headquarters in our city.  Instead, we need to focus on home-grown businesses–young, creative and forward-thinking entrepreneurs who like the Columbia lifestyle and want to plant their business here.
In addition, my experience is that most of these small start-ups are creative companies–marketing agencies, architectural firms, filmmakers and video production, and so forth.  Because of their smaller size, they’re nimble, innovative and quick to jump at an opportunity.  I see these businesses set up shop in small, one or two room offices only to quickly outgrow their space.  In fact, our biggest challenge now is to find larger space for these companies so we can keep them in our downtown. These companies are our future and we need to nurture them so they’ll grow.