Tag Archives: growth machine

Determining who is super-rich, private banking edition

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Categorizing people into different income groups is an interesting exercise for social scientists but it may be necessary for certain occupations. Take private bankers as an example:

Call it economy-class rich. Business class? That’s $100 million. First class? $200 million. Private-jet rich? Try $1 billion…

The measure of what makes someone rich has changed dramatically in the past two decades. In 1994, when Peter Charrington, global head of Citi Private Bank, first joined the firm, “Three million was largely considered ultra-high net worth across the industry,” he recalled. “Fast-forward almost 25 years, and $25 million is how we define ultra-high net worth.”…

Placing investable assets of at least $25 million with a wealth manager—and clients with that amount or more tend to work with a few firms—can bring access to initial public offerings, and having at least $5 million in investments moves a client past one regulatory hurdle to taking part in private offerings…

It’s direct investment in companies and buildings where the line between the rich and seriously wealthy is most pronounced. “This is a threshold differentiator among the world’s wealthiest, compared to the merely very wealthy, let alone the 401(k) investor,” said J.P. Morgan Private Bank’s Duffy. “These very large families are investing in private companies, owning a percent of the company versus a share of a public entity.”

On one hand, $25 million is pushed as a rough cut-off line but, on the other hand, there are some fine gradations both above and below this level. Does the quest to differentiate oneself in terms of resources as well as to offer different levels of service to such people ever end? (Presumably it must stop with the wealthiest people in the world but then there may be a quest to keep pushing those number upward.)

Another piece of this that is worthwhile to consider is the true sign of wealth is to buy into capital or the “means and modes of production.” It is one thing to own objects or investments and it is another to own significant stakes in companies and buildings. For example, the growth machine model of urban development would involve these super-rich individuals who the clout and resources to influence and direct development.

Seeing 1940s Chicago in a lost promotional film

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Chicago, the #7 global city today, looked quite different in the 1940s in long-lost promotional footage:

In contrast to typical city promotional films, this video offers glimpses of downtown spots like Buckingham Fountain along with the city’s manufacturing plants and meat-packing facilities. The footage also comes with all sorts of statistics and facts. For example, Michigan Boulevard (now Michigan Avenue) carried more than 55,000 automobiles on an average day.

Based on the credits, it appears the video was produced by the Chicago Board of Education, with an assist from United Airlines (for the aerial shots). The release date of the film has also been pinned to between 1945 and 1946. John Howatt, credited as the Business Manager of the Board in the video, was elected on January 8, 1945, and Johnnie Neblett, the narrator, died on September 15, 1946.

Altman writes that he thinks the video was meant to attract people or companies to Chicago, or perhaps as a resource in the classroom. But according to DNAInfo, a spokesman from the Chicago Board of Education said that staff haven’t been able to find any reference to the film in its archives.

A few quick thoughts on seeing this film:

1. The tall buildings are quite different. One, there aren’t as many. Yes, Chicago was dense but it was more due to low-rises. Two, they don’t have the shine that we have come to associate with skyscrapers and instead tend to be covered in stone or masonry and are marked by pollution. (Blame the International Style, which bloomed in Chicago.)

2. The focus on industry is interesting. Manufacturing would have made up more of the economy at the time (Chicago, like many Rust Belt cities, lost hundreds of thousands of manufacturing jobs in the late 20th century) while the emphasis today is more on finance and services.

3. Some of the footage of Lake Shore Drive seems quaint as it appears to sometimes have two lanes each direction without many barriers between each side or the paths and sidewalks nearby. This was the era before major highways as we know them which were not completed in the Chicago region until the mid 1950s.

4. What is missing and can be found in pretty much any major city? Like any growth machine which wants to promote high-quality growth, this film omits the lower-class areas of the city. Chicago at the time had numerous poor neighborhoods including the Black Belt on the South Side which was the only place where blacks could live. These areas somehow didn’t make it in…

5. I wonder at times how much the less-than-high-def footage influences our interpretations of the past. Chicago looks fairly inviting in this film – bustling, beautiful lakefront, lots of nice buildings – yet it all looks so grainy. We’ve reduced this look to a filter on our Instagram accounts but it is hard to find the HD images that might help us make an apples-to-apples comparison of scenes.

Actual crimes vs. perceptions of crime in Birmingham, AL

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Like many American cities, crime is down in Birmingham, Alabama yet this is not the perception:

With ten people killed in Birmingham since the start of Labor Day weekend, a city that prides itself on revitalization and a declining murder rate has had some old ghosts creep out of the closet.

None of the killings occurred in areas of the city’s heralded new entertainment districts. But the stabbing of an elderly woman in an apparent Avondale break-in, and the deaths of two bikers in a shootout at a club in an area north of Avondale were close enough to raise questions, again, about whether the city is safe.

“Perception is reality,” said John Sloan, professor of criminal justice at the University of Alabama at Birmingham. Birmingham boasts that crime is down, and that murders have fallen sharply from previous highs. Still, said Sloan, “People don’t believe it.”

“The problem is how do you change that image?” said Kevin Fitzpatrick, one of two former UAB sociology professors who co-authored “Unhealthy Cities: Poverty, Race and Place in America. “That’s an uphill battle.”…

Said Fitzpatrick: “Between 70 and 80 percent of crime is between people who know each other. It’s not a lot of random crime. It’s not the kind of crime people who want to go downtown to the baseball game need to be worried about.”

A familiar story: crime has dropped substantially yet some high-profile cases largely involving limited social networks in certain neighborhoods fuel lingering perceptions from suburbanites and others about the dangers of the big city.

The article suggests cities need to continually fight these perceptions and fear is tough to overcome. I can think of one way to help combat this: work with the local media to change their reporting. While these organizations need ratings and sales, historically the media has been part of growth machines that are important parts of urban growth. If Birmingham grows, attracting people and businesses, the media is likely to benefit as well from selling more advertisements and copies. So why not work with them to change their leads to also emphasize positive stories? Everyone can win here. (I realize this isn’t a groundbreaking idea. Yet, I haven’t heard any recent cases of the media working with local governments on this issue. While the media often sees itself as a watchdog or the protector of the public, it historically has had a role in supporting local initiatives.)

From studying San Diego, five features cities need to grow

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A new study of San Diego’s development suggests five factors that lead to city growth:

According to Walshok and Shragge, five major characteristics of civic culture are necessary to move forward:

1) A risk-oriented culture adept at managing uncertainty. A central feature of San Diego’s experimental history and prevalence of small industries is a civic culture and business community that embraces risk.
2) Entrepreneurial talent: Civic leaders, scientists, business professional. San Diego’s long history of creating opportunities for people who want to challenge the status quo or create something new has resulted in an unusually large aggregation of entrepreneurial civic, business, and scientific leaders.
3) Integrative civic platforms. San Diego’s civic culture is highly inclusive, cross-functional and interdisciplinary. Institutions that span the boundaries between communities of ideas and practice have proliferated; in many other regions such entities continue to be siloed.
4) Multiple gateways through which ideas and opportunities can be developed. There is no one Establishment, Inc., in San Diego. There are actually many centers of gravity vis-a-vis leadership and access to resources. San Diego is characterized by an open innovation environment that allows people to easily move among social groups and within hierarchies.
5) A culture of reinvestment: Time and money. The absence of multinational corporations until recently, the century-long reliance on the federal government as a key customer, and the lack of accumulated family wealth have required a civic culture characterized by people investing significant amounts of personal time and resources to achieve civic goals. This is enhanced by the fact that those who come to San Diego stay because of their attachment to the place.

Sounds interesting for two reasons:

1. This sounds like a combination of the creative class bringing in new talent, ideas, and business and a committed growth machine of business and civic leaders. If this works in San Diego, the next question to ask is whether this particular combination and set of circumstances is generalizable to other cities.

2. San Diego doesn’t get much attention in urban sociology. Although it has the 8th largest population in the United States (and 17th largest metropolitan area), it is dwarfed by nearby Los Angeles, is all the way at the corner of the country, and doesn’t stand out for any particular reason outside of fantastic weather.

We had a chance to spend a few days in San Diego a few years ago and enjoyed some of the sights including the San Diego Zoo, Sea World, and the USS Midway. Here is the view toward the city from the deck of the USS Midway:

SanDiegoFromUSSMidway

We enjoyed our visit though it required a lot of driving around.

New developments tower over Mecca

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Several new developments in Mecca threaten to dwarf the holy sites:

Shooting 26 searchlights 10km into the skies, and blaring its call to prayer 7km across the valley, the Abraj al-Bait is also the world’s second tallest building. Encrusted with mosaics and inlaid with gold, it is the most visible (and audible) sign of the frenzied building boom that has taken hold of Saudi Arabia’s holy city over the last 10 years. “It is truly indescribable,” says Sami Angawi, architect and founder of the Jeddah-based Hajj Research Centre, who has spent the last three decades researching and documenting the historic buildings of Mecca and Medina, few of which now remain. In particular, the house of the prophet’s wife, Khadijah, was razed to make way for public lavatories; the house of his companion, Abu Bakr, is now the site of a Hilton hotel; and his grandson’s house was flattened by the King’s palace. “They are turning the holy sanctuary into a machine, a city which has no identity, no heritage, no culture and no natural environment. They’ve even taken away the mountains,” says Angawi…

Along the western flank of the city are the first towers of the Jabal Omar development, a sprawling complex that will eventually accommodate 100,000 people in 26 luxury hotels – sitting on another gargantuan plinth of 4,000 shops and 500 restaurants, along with its own six-storey prayer hall. The line of blocks, which will climb to heights of up to 200 metres and terminate in a monumental gateway building, share the clocktower’s Islamic-lite language: a cliched dressing of pointed arches and filigree grillwork plastered over generic concrete shells…

Another development of repetitive slabs, echoing Jabal Omar’s toast-rack urbanism, is slated for the northern side of the Grand Mosque, at al-Shamiya, while a $10bn plan to provide an extra 400,000 sq metres of prayer halls there is almost complete. Standing like a gigantic triangular slice of wedding cake, this building will accommodate 1.2m more worshippers each year, but it has come at a price…

The Kaaba is the holy black cube in the centre of the Grand Mosque, around which pilgrims walk; proximity to it has become the ultimate currency, allowing hotel suites with the best views to charge $7,000 per night during peak seasons. This unique concentricity, with everything determined by its orientation towards the hallowed centre, has spawned a strangely diagrammatic radial urbanism. From above, like a sea of iron filings pulled by a magnet, the whole city appears to crowd round a core, the vortex of pilgrims giving way to an equally swirling current of tower blocks. It is the axis of prayer writ large in concrete.

The contrast seems stark: a holy site versus ultra-modern development. Is this growth machine development, meaning development primarily about generating profits from pilgrims, run amok? That this is emerging in Saudi Arabia shouldn’t be too surprising. Oil money has to be spent somewhere. Plus, cities like Dubai and Abu Dhabi have been getting a lot of attention in recent years for their massive developments and I imagine Saudi Arabia would like to match some of that. Yet, Dubai and Abu Dhabi aren’t also known for being major religious sites.

Also, whenever I see stories like this, I am reminded of the amazing pace of development in some cities (particularly in China and oil-rich Middle East nations) around the world: from populated, primarily low-rise cities to massive, tall, expensive developments.

Old New York law says each community must have a historian

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Strange laws that are still on the books are occasionally rediscovered and make headlines. For example, here is an interesting 93 year old law from New York:

Back in 1919, the New York state legislature mandated that every “city, town, or village” must have an official historian. It’s a regulation that’s unique among the 50 states, and basically unenforceable. Towns are not required to pay these record-keepers, who are appointed by a town mayor or manager. Municipalities that fail to find a volunteer are sent a strongly worded letter, but little else can be done.

But this law could tell us a lot about American culture and our quest to preserve and understand our own history:

The phenomenon of local historians came of age in the early days of the Industrial age. As Americans began populating “the frontier,” they struggled to define themselves and their role in the places they called home. “In the late 19th century, you see a local history rush,” says James Grossman, Executive Director of the American Historical Association.

This fascination with ourselves was fueled by commercial firms that drafted early town histories, books that resemble the Who’s Who franchise of today. For a couple of dollars, anyone could contribute a piece about their own place in the history of their town, be it the story of their family, their house, or their autobiography.

It was around this time that city historians also became part-time urban boosters. “Cities began using history as an economic asset,” Grossman says. Many early historians were “people who had relationships with commercial interests, trying to promote city growth.”

A couple of reasons are given here: Americans wanted to understand themselves and there was money to be made in this business of local history. This second reason would fit right in with the growth machine model of urban growth: local boosters, leaders, and businesspeople promote development in order to make more money.

One might wonder how much this boosterism affects the actual reporting and interpretation of history. I suspect it influences things quite a bit. This doesn’t necessarily mean a local historian gets the facts wrong but it is more about how the story is told and what parts of local history are revealed. I have read a lot of local history for research projects and several features of local histories stood out across communities:

1. The local histories are often most interested in big and exciting facts and less about day to day life in the community or how these big changes occurred. We might call this the “peak view” of history – you only see the highest or noteworthy points.

2. Tied to the first observation, these histories tend to report only positives about the community. The histories leave out some of the most formative elements about a community if it doesn’t paint the community in a positive light. For example, I’ve uncovered information about racial prejudice in action in some suburban communities but based on the “official” histories, you would never know there was even any tension.

3. It is suggested later in the article that local historians need some training before they are set loose to collect and tell local history. From what I have seen, many local historians got the job because they wanted it, not because they necessarily had qualifications. This person might have had a particular interest in the community and so had done a lot of research or perhaps they knew a lot of people in the community. This has changed somewhat in recent decades with the rise of museums and degrees regarding operating museums as there are now often “official” keepers of a community’s history.

Are McMansions about maximizing exchange value?

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A commentator takes a look at a new, oversized condominium building and discusses use value versus exchange value:

The house on this lot was rebuilt into two large condominiums.  Each is about 3,000 s.f. and priced at $849,000.  It’s a way to maximize the return for the property owner.  I can’t say the building is very attractive, but it is one block from the forthcoming Monroe and Market Street development adjacent to the Brookland Metro Station, and is two blocks from the Metro.

It’s too bad buildings such as this are oversized for the lot in a manner that degrades the visual qualities of the rest of the block.  Use values, including aesthetics, are subsidiary to the exchange value of place (maximizing financial return) in this instance.

To complete the circle about use value, one could also look at the experience of the homebuyers. Are these large housing units worth the money? Even if these big homes don’t quite fit in the neighborhood, they could be nice places to live. As noted above, they are spacious, located near desirable mass transit stops, and are probably have some nice interior features (surely granite countertops, stainless steel appliances, and hardwood floors!). Even the New Urbanists that wrote Suburban Nation admit that Americans have superior private realms in our homes. (Of course, there are others, like Sarah Susanka and Winifred Gallagher who suggest these spacious, comfortable homes may not be good fits after all.)

Lurking behind this analysis is Marx’s discussion of use value, exchange value, and capitalism. In a capitalistic system, much can be commodified: Twitter followers, positive online reviews, and houses. Particularly during the 20th century, American homes became more than just shelters: they were expected to increase in value and become investment vehicles. (One could look at some data to see if these oversized housing units are flipped more quickly than other kinds of housing as owners look to make money.) Builders and developers can make even bigger money on houses. One very influential idea in urban sociology in the last few decades is the growth machine model, the idea that boosters, business leaders, politicians, and developers work together to make profits by transforming open land into valuable land. From the early days of the American suburbs when streetcar operators built their lines into the countryside and then offered free rides to the end of the line to show people lots and potential to McMansions today, much development, aesthetically pleasing or not (actually, aesthetics may indeed just help increase the value!), is about making money. Commodifying the home can move the discussion away from other important aspects f purchasing and owning a home like community life, environmental responsibility, and providing affordable housing.

Chicago’s Fifth Avenue an example of late 1800s growth machine

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Chicago has its own Fifth Avenue but it is the only numbered avenue in the city. Here’s why:

When what is now the East Garfield Park neighborhood became part of the city in 1869, much of the West Side was open prairie.

According to Streetwise Chicago: A History of Chicago Street Names (Loyola University Press, 1988), the street, originally called Colorado Avenue, was renamed in an effort to boost residential and commercial development.

The new name was meant to evoke the prestige of New York’s flashiest shopping strip—a far cry from the modest bungalows, brownstones and warehouses that have come to define the area…

Peter T. Alter, an archivist at the Chicago History Museum, says the name switch happened around 1890, near the time Chicago beat out New York for the right to host the World’s Columbian Exposition fair.

“Perhaps,” Alter notes, “that lessened the idea of Chicago being seen as second to New York City.”

This is a great illustration of a growth machine at work: in order to boost development in what was an undeveloped area, the street name was changed in order to invoke the wealthy street in New York City. Additionally, the name change seems tied to the 1893 Columbian Exposition (see here for a review of The Devil in the White City which describes some of this time period), an important moment in Chicago’s early history that established the booming city as a world-class city. It sounds like boosterism all around.

Will a declining newspaper really lead to a loss of stature for Los Angeles?

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Newspapers across the United States have suffered circulation declines and employee layoffs in recent years. The Los Angeles Times has been no different and was even bought out by the Tribune Company. But can people really suggest that Los Angeles is losing stature because its primary newspaper is having trouble?

Since The Times was sold to Tribune, its newsroom staff has been cut in half. For many Angelenos, the downsizing is just one more sign that their city is losing stature. Add it to the list of other ego-bruising blows, like the loss of its professional football team, the flight of Fortune 500 companies from the city limits and a failed bid for the 2016 Summer Olympics.

“We don’t even have a football team. So what does that tell you?” said Mr. Cheeseborough, a note of resignation in his voice.

The Times’s weekday circulation has been nearly halved since 2000, according to the Audit Bureau of Circulations, falling to just over 600,000 — a far steeper rate of decline than at many other big dailies like The Chicago Tribune, The Detroit Free Press and The Washington Post.

To identify where all the local harrumphing comes from, it helps to understand just how closely the rise of The Times is associated with the rise of Los Angeles as a capital of culture and commerce.

The paper’s founding families, the Otises and the Chandlers, used their fledgling publication to push for the development that helped give rise to modern Los Angeles. Water was first piped into the San Fernando Valley because they arranged for it. Los Angeles Harbor was built in part because of their backing.

The suggestion here is that the newspaper decline is part of a recent serious of public failures. By invoking the founding families of the newspaper and their “growth machine”/boosterism efforts, the suggestion is the out-of-towners who manage the newspaper (from Chicago, no less) don’t care much about the city. And if the newspaper doesn’t care any more, then why should anyone in the city or outside the city care?

This argument seems spurious at best. There could be several things going on here:

1. There is resentment about a Chicago company owning the Los Angeles Times. Chicago and LA have had a long-term rivalry as Chicago almost overtook New York City in population in the 1890s (leading New York to annex all five boroughs into the city) and then Los Angeles grew tremendously after World War Two to overtake Chicago as the “Second City.” This is a matter of civic pride.

2. People who like newspapers or journalists are upset about the demise of the Times while the general population is not. Journalists tend not to like to see the decline of revered outlets. Could this just be journalists upset about the general decline of newspapers? The problems described in this story, less news, more ads, are emblematic of the entire industry.

3. This is simply bad timing. There is not a causal relationship here: the decline of the Los Angeles Times coincides with a number of other events.

In the end, do people really think that Los Angeles’ culture and commerce are going to decline precipitously in the near future because of its newspaper?

Millennium Park: an example of how growth machines work

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Within a story about whether Chicago will be able to move forward with large development projects in the next few years, a historian describes how Millennium Park, a significant undertaking, came about:

Indeed, as Chicago ponders its future, it may be useful to view Millennium Park not as a triumph to be repeated, but as a shining exception, one that occurred only because the stars aligned and Daley had created order in Chicago’s turbulent political universe.

After years of fruitless talk, the story goes, the park got its start in 1997, when the mayor peered down from his dentist’s office along Michigan Avenue and decided to turn that dusty railroad yard in Grant Park’s northwest corner into an urban showcase.

By then, Daley had been mayor for eight years and had consolidated his grip on power. Key figures in the park’s creation, including major donors like the Pritzker and Crown families, were “in many ways indebted to, dependent upon and allied with the mayor,” Gilfoyle said. They wanted to please Daley, he explained, partly because their real estate and other holdings might benefit from future city action.

All roads, in other words, led to Daley. And the economic winds were at his back. The late 1990s dot-com boom gave the park’s chief fundraiser, former Sara Lee Corp. CEO John Bryan, enormous wealth to tap. Without it, Gilfoyle said, the 6-year-old park might never have happened.

Today, with such favorable conditions a distant memory, Chicago’s builders are scrambling to find new paths to get things done. One is to push projects ahead step by step rather than in a single, expensive rush, as at Millennium Park.

This sounds like a classic description of growth machine development: the mayor wants something to get done, major donors and partners are sought and found, and a large and impressive park is able to be built on a spot that had been an industrial location/blighted site for years.

This is an interesting example considering the context of the rest of the story: Chicago will have a new mayor (with less consolidated power) and also is facing significant budget issues. Growth machine politics may not be possible at least with the new mayor for a while though other power brokers could emerge. Growth machines are also more limited when money from businesses and local governments is scarce.

Another question one could ask after reading this story: how unusual was it for both Mayor Daleys to undertake so many significant projects? Around Chicago, they are known for having significant building legacies. Are there mayors in other major cities with similar records or are they truly unusual?