Posted on Nov 25, 2009
We’re all aware of the NIMBY phenomenon–“Not In My Backyard”–but I’ve begun noticing a new one, NIICHI or “Not If I Can’t Have It”.
A small but vocal group of business and property owners recently came together in our city to oppose Tax Increment Financing, a new development incentive designed to encourage more downtown infill projects. TIFs are designed to keep the current tax revenue stream steady while using future taxes that will be created from the project to help fund the project. However, these opponents characterized the program a literally taking money away from the schools or the city and giving it to property owners–to the point where the public began to think that the developer was being handed a large check.
Their primary argument, though, was that they didn’t have any help when they started their business, so why should someone else get help. Setting aside the fact these are public programs to which any qualified person can apply, it demonstrated a strong emotional undercurrent–a belief that there are limited resources and helping one person necessarily means another will be harmed. (Interestingly, the two projects under consideration were a hotel and an apartment building–both guaranteed to bring new customers into their businesses. In other words, two projects designed to increase the size of the pie.)
Part of this stems from what’s happening at the national level. With the downturn in the economy, both the past and the present administration have supported wide-ranging stimulus packages in an attempt to get it back on track. Government stimulus means that future tax dollars are being used to help out certain groups of people today. For someone struggling to support their own family and manage their debt, this is easily seen as a program designed to take money out of their pocket and give it to someone else.
This may be a passing phenomenon–people feeling the pinch of a tight economy–but it’s something to watch for. How can we do a better job of explaining a development incentive as something that creates a bigger pie? Better yet, how do we do a better job of designing incentives so that everyone feels the benefit?
Posted on Nov 22, 2009
Like many who work in downtown economic development, I often have people approach me asking, “Why don’t we get a Gap? (Interchangeable, of course, with Banana Republic, Ann Taylor, Loft, Eddie Bauer, or Abercrombie.) It’s a legitimate question. These stores are usually found down the road at the mall and the demographic of the customers often fits well with a particular downtown. However, it may be the wrong question.
First of all, Gap and many of these larger retailers are struggling–not just because of the economy but because of some strategic errors in how they positioned themselves. Ann Taylor and Banana Republic are struggling, mainly due to a few years of dull offerings. Ann Taylor’s new line may help but Banana is still trying to find a niche. Abercrombie focused on casual wear, missing out on the dress and jewelry trend that hit a few years back. They’ve just started adding dresses to their collection. Eddie Bauer’s coming in a distant third with the outdoor/casual set, mainly because they were producing clothing that was too rugged-looking for normal wear but not good enough for actually wearing outdoors. Their stores now carrying the First Ascent Expedition Outfitting suited for actual mountaineering–if the large photo displays of rugged men scaling Everest are any indication. (By the way, the line does appear to be creating some excitement–in the store I visited, this section was by far the most crowded, albeit with people who probably avoid even driving in the snow.)
The economy’s hit local apparel stores as well but the one thing they have going for themselves is that they’re nimble. A good retailer can spot trends and move quickly on them, rather than waiting for the corporate structure of an Ann Taylor to make a course correction. Nationals design their own lines so if it fails, it fails together. Locals buy from a range of lines and, like many in our downtown, they actually make their own apparel or rely on local artisans for their jewelry. If a piece fails it’s not a harbinger of a failed line; instead they can move quickly to the next option.
Nationals certainly have their place and that place is often in a downtown. But let’s not look at them as the saviors of a downtown. Instead, take a look at what makes the locals so successful and figure out a way to franchise that.
Posted on Nov 22, 2009
I recently gave a talk to a group of professionals from South Korea who were participating in the University of Missouri’s Global Leadership Program, a year-long program designed to teach government officials and other professionals the intricacies of American business, culture and language. Before my talk began I had a chance to talk with several of them about what issues downtowns in South Korea were facing. The answer was surprising, although it shouldn’t have been.
“Our downtowns are suffering because malls were built on the outskirts of town and everyone’s going there to shop.”
I guess we’re all more alike than we think.