Tag Archives: economic development

Popular HGTV show leads to local tourism boost – but what are the lasting effects?

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Many HGTV shows are tenuously connected to actual communities – the focus is on the homes and personalities, not the neighborhoods and community. Fixer Upper and the efforts of the Gaines family in Waco, Texas may then be quite unique:

In 2015, they opened Magnolia Market, a home goods store that sells Mrs. Gaines’s mass-produced collections of bohemian farmhouse décor, and quickly followed with a bakery, garden shop and a turf-lawn park built near two old silos that had been constructed in 1950 by the Brazos Valley Cotton Oil Company. They also opened a nearby restaurant, Magnolia Table, in the former Elite Café, a longtime favorite that closed in 2016 after several different owners and renovations. When the Gaineses took it over, they installed subway tile along the walls, exposed the wood beams in the ceiling and stuck an ever-changing marquee sign out front. Naturally, the renovation was featured on their show.

No one’s complaining. The number of tourists to Waco has tripled in the four years since “Fixer Upper” first aired, with some 1.7 million people visiting in the first seven months of 2018 alone, and other local businesses have flourished with the influx. Carla Pendergraft, director of marketing for the Waco Convention and Visitors Bureau, said the appeal of the “Fixer Upper” brand has had a profound impact on the city.

Several quick thoughts::

1. The article touts increased tourism and a few local businesses that have benefited from the popularity of the show. Lacking are numbers about increased jobs and increased tax revenues.

2. The biggest bonus to Waco seems to be less about economics and more about status: the Gaines have helped make the city cool.

3. How long will this effect last? When Fixer Upper is done, will the family still exert the same pull on people? And if this trend dies down, how will the community of Waco respond? My guess would be that this uptick in tourism and interest will fade away if the Gaines are not as visible.

4. The concept of TV driven tourism is an intriguing one. People want to visit popular TV sites, like the Brady Bunch house for the Soprano’s home. Should more cities take advantage of shows that have strong connections to certain locations? Imagine Chicago building a full campaign around the Chicago Fire, Chicago P.D., and Chicago Med galaxy.

Minor league baseball stadiums are not good for economic development

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Camden, New Jersey just decided to tear down a baseball stadium that is less than twenty years old. The stadium did not lead to economic development and no team has played there for several years:

Taxpayers spent more than $18 million to build the stadium that would eventually be named Campbell’s Field, as part of a minor league ballpark-building frenzy across New Jersey that saw similar stadiums erected in Newark, Atlantic City, and Somerset—all part of redevelopment schemes that attracted independent minor league teams (that is, minor league teams not affiliated with the Major League Baseball farm system)…

The sad saga of the Camden Riversharks—the Atlantic League team for whom the stadium was built prior to the 2001 season—will come to an official end more than three years after the team picked up and moved to New Britain, Connecticut, leaving Campbell’s Field vacant. The city tried to attract a new team, but after those efforts failed, the Camden County Improvement Authority signed off on a plan to demolish the stadium, according to NJ.com. The Riversharks and Campbell’s Field were supposed to revitalize the impoverished city by being the centerpiece of an economic development plan along the edge of the Delaware River. Now, the demolition of the stadium is the first step in a new $15 million economic development scheme that will turn the site into a complex of athletic fields for Rutgers University’s Camden campus, NJ.com reports…

In the team’s final two seasons, the Riversharks averaged about 3,000 fans per game—which is actually not bad by the standards of independent minor league baseball—but the team never turned a profit and abruptly skipped town in 2015 when negotiations on a new lease stalled.

By then, the ballpark was so deep in debt that it faced foreclosure because the team had missed several lease payments. To bail it out, Camden paid off $3.5 million in outstanding debt and purchased the property. The city planned to impose a new ticket surcharge to cover those costs, but the city only received one payment from the team before it moved away, NJ.com reported last year.

This is a consistent story with sports stadiums: they primarily benefit the teams and their owners, not communities. Local officials and politicians want to be the ones who can say they helped keep a sports team in town or they attracted a new franchise but using public dollars for this effort is not a good investment in the long run.

While the story is not quite the same with tax breaks for corporations, there are some parallels. Communities often want to jumpstart economic development. New businesses, particularly headquarters or large office buildings, as well as stadiums can appear to be good ways to do this. They bring jobs, something every local leader supports. They bring increased status for a community, a less quantifiable feature but still important as communities jockey to attract additional firms and residents. Thus, communities are willing to offer tax breaks in a variety of ways – sometimes to help construct infrastructure, sometimes provided per job created, sometimes to construct the stadium – to beat out other communities. The question of whether the community benefits in tangible ways in the years to come is not often raised.

A related earlier post: championships won by sports teams do not necessarily lead to better outcomes in cities.

Ikea as suburban economic engine and sign of suburban change

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The wealthy Indianapolis suburb of Fishers now has an Ikea and the community hopes it spurs economic growth:

When Ikea opens Wednesday, it could alter the character of this northern suburb city from a drowsy residential nook into a dynamic regional shopping mecca. The giant Swedish furniture retailer’s gravitational pull has already attracted other businesses nearby and prompted major highway and road work.

Which is why city officials expect the residents to get along just fine with the new kid. For one thing, Ikea has cache, even if the store is three times the size of a Walmart. For another, Ikea’s guests are quiet and well-behaved. And most importantly, Ikea will contribute millions of dollars to the local economy in sales taxes and in-town spending at other stores…

But for Mayor Scott Fadness and the City Council, the wave of development is the cornerstone to expanding and defining the city. It follows a similarly aggressive flurry of construction just blocks away, across I-69 in downtown proper, now called the Nickel Plate District. Over a five-year period, the city encouraged residential and business development to get people living and working downtown. Two high-rent apartment buildings with first-floor restaurants and shops were built next to City Hall and several high-tech firms set up shop nearby, earning Fishers the reputation as a technology hub…

Ikea asserts, and experts agree, that it’s 44 U.S. stores draw customers from as far as 200 miles, and they spend money at more places than just the furniture store.

It is not enough for many places to be well-regarded bedroom suburbs: many of these communities now want more.

  1. An expanded tax base. Bringing in businesses means more money for local services and a reduced tax burden for residents.
  2. Excitement about the community. Many postwar suburbs have experienced decades of development. Newer suburbs or exciting urban neighborhoods offer new options. How will a high-status suburb stay on the radar screens of people within the region and elsewhere? New development always brings excitement.
  3. A new vision for the future. What will the suburb look like in the 21st century? Can they develop new plans and visions? The postwar suburban era is over; what will these suburbs look like by 2050?
  4. Number two and number three above are linked to attracting young professionals. These are high-status people who can contribute to the tax base, provide employees that high-end employers want, and bring energy to the community.

The moves in Fishers echo those of many other suburbs across the United States. Some, like Fishers, are well-positioned with their wealth and location to take advantage of possible opportunities. Others will pursue some of these options but ultimately lack the ability and/or resources to carry them out.

LA suburbs welcome raves for their economic benefits

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Suburbs aren’t usually known for wanting to host raucous music events but the economic benefits are hard to resist for some Los Angeles suburbs:

All of the region’s biggest electronic dance music festivals are now held deep in the suburbs and exurbs of Southern California, centered in San Bernardino County. There, the rave scene has been largely welcomed by government officials and local businesses hoping for an economic boost from the large crowds.

But many of the problems that dogged the concert in L.A. — rampant drug use, overdose deaths and overwhelmed emergency rooms — have persisted…

In the Inland Empire, rave organizers have tapped large venues that can hold more concertgoers…

The debate over rave safety has largely focused on whether government agencies should allow the concerts to be held in publicly owned spaces. Some emergency room doctors have called for such a ban, saying hospitals are overwhelmed by drug overdose patients after raves.

Many suburbs are looking for ways to bring in more revenue through the arts events, whether that be art, theater, music, or some other form of creative expression. The primary advantage of such events is that they are temporary: vendors and people descend for a limited amount of time and money is generated. However, suburbs usually don’t take too kindly to noise, damage from a lot of concertgoers, and drug use and drug-related deaths. Suburbs tend to want to promote themselves as safe and family friendly.

Thus, we get a set of trade-offs: communities that need money versus typical suburban propriety. I would imagine the drug-related deaths will scare off more suburbs even as many communities look to bring in more money through similar events.

Why small rural towns turn down economic development opportunities

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Not every rural small town wants to add a meat processing plant:

Regional economic development officials thought it was the perfect spot for a chicken processing plant that would liven up the 400-person town with 1,100 jobs, more than it had ever seen. When plans leaked out, though, there was no celebration, only furious opposition that culminated in residents packing the fire hall to complain the roads couldn’t handle the truck traffic, the stench from the plant would be unbearable and immigrants and out-of-towners would flood the area, overwhelming schools and changing the town’s character…

The village board unanimously voted against the proposed $300 million plant, and two weeks later, the company said they’d take their plant — and money — elsewhere.

Deep-rooted, rural agricultural communities around the U.S. are seeking economic investments to keep from shedding residents, but those very places face trade-offs that increasing numbers of those who oppose meat processing plants say threaten to burden their way of life and bring in outsiders…

Nickerson fought against Georgia-based Lincoln Premium Poultry, which wanted to process 1.6 million chickens a week for warehouse chain Costco. It was a similar story in Turlock, California, which turned down a hog-processing plant last fall, and Port Arthur, Texas, where residents last week stopped a meat processing plant. There also were complaints this month about a huge hog processing plant planned in Mason City, Iowa, but the project has moved ahead…

The question of who would work the tough jobs was at the forefront of the debate, though many were adamant they aren’t anti-immigrant. Opposition leader Randy Ruppert even announced: “This is not about race. This is not about religion.”

On one hand, not all jobs are necessarily good jobs. On the other hand, there seem to be larger issues at play: who will get these jobs? What happens when all the workers – who may not share the background of the small town – show up? It would be intriguing to explore what changes to the processing plants would lead to support from community members: guarantees of local hires? Higher wages? No minorities hired?

It would also be worth tracking where these processing plants end up. What one community turns down may be seen as an economic savior in another area. For example, scholars have noted the rise of immigrant populations in American rural areas in recent decades including places like Iowa and Georgia which don’t have the traditional immigrant gateway big cities.

The past importance of movie theaters to suburban downtowns and the difficulty of reviving them today

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The downtown movie theater was once an important part of suburbs but a number of these theaters have been difficult to revive in recent years:

Theater stories abound in the suburbs. The lavishly restored Paramount Theater in Aurora offers Broadway plays and big-name musical acts. The Arcada Theatre in St. Charles is another success story. Others — including the Wheaton Grand, Des Plaines Theater and Clearwater Theater in West Dundee — face uncertain futures after opening and closing multiple times in recent years…

Main Street theaters became popular in the late 1920s, when film was just emerging, Fosbrink said. Their construction boomed through the late 1930s and 1940s, particularly as suburbs took hold.

“Planning to have a theater in your town, or an opera house or something (for entertainment) was just as important as planning a city hall or fire station,” he said…

“People at this point in time are paying a lot more attention to how a theater can be a catalyst for economic development in a downtown business district,” Fosbrink said. “Theaters really can drive economic development, and we see a lot of that happening all over the country.”

Once a status symbol and source of local entertainment, these theaters are now possible ways to attract more people to a suburban downtown and hope they spend more money while they are there. Even though they aren’t really needed now (even the multiplexes have had a difficult time in recent years), they might anchor new entertainment districts where suburbanites don’t go to the city for culture but instead stay nearby.

It would be interesting to think about how many of these downtown theaters the Chicago suburbs could support. Particularly if they hope to all thrive, how much money is there to spread around?

Chicago’s race and class differences on display in fight over Obama Library

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Six groups are vying for the Barack Obama Presidential Library in Chicago:

The library is “such a prize that nobody is going to yield power to anybody else,” veteran Chicago political analyst Don Rose said.The squabble also puts Mayor Rahm Emanuel, Obama’s former chief of staff, in the difficult position of trying to present a single, unified bid, lest the feuding weaken the city’s odds against rival campaigns to put the library in New York or Hawaii…

The main point of tension is between the University of Chicago, where Obama spent 12 years as a constitutional law professor until his 2004 election to the U.S. Senate, and a group advocating for Bronzeville, the city’s historic center of black culture, business and politics.

“They think that they can get whatever they want,” Bronzeville organizer Harold Lucas said of the university. “If you compare the cranes in the sky and that opulent growth of this university to the surrounding, predominantly African-American community, it’s a travesty. It’s a clear tale of two cities.”…

There are also two potential bids on the Far South Side, one led by Chicago State University and the other by a group promoting the historic Pullman neighborhood. It was in those areas that Obama established his earliest roots in the city as a community organizer in the mid-1980s, setting up job training programs and defending the rights of public housing tenants.

The University of Illinois at Chicago, on the Near West Side, is also taking a shot, as is a real estate developer pushing the former U.S. Steel Corp. site on the southeast lakefront.

Lots of interested actors and a number of them could make a good case that the library would help economic development – even the University of Chicago says their plan would be to build the library off-campus so it would help a neighborhood. This seems like a classic situation for some backroom deals and a growth machine perspective where those with more political and business power will end up calling the shots.

Is this a true test of Mayor Rahm Emanuel’s abilities as a mayor? It will be interesting to see how he moves among all of these options.