Category: Local

take back cheapside

Rob Morris 1 Comment Local ,
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We simply don’t need statues of Confederates John C. Breckenridge and John Hunt Morgan near Cheapside Pavilion and the old courthouse in Lexington. You can find out more about the sordid history of the Cheapside slave auction block and of the racist motivations behind these statues here.

Here are my brief personal thoughts, as expressed on Twitter this morning:

Let’s not use public spaces to celebrate traitors and losers with statues erected decades after their side lost for the sole purpose of reasserting white supremacy.
Find worthy heroes to honor, not these villains.
If you are also interested in making Cheapside a more inclusive space, I recommend checking out takebackcheapside.com.

How Council Voted to Defraud Investors to Benefit the Webbs

Rob Morris 9 Comments CentrePointe, Local , , , , , ,

Call it “CentrePointe Fatigue”.

After six-and-a-half years of bulldozing, promises, broken promises, half-truths, and outright lies on the CentrePointe project, folks are just plain tired of talking and thinking about CentrePointe. They’re tired of waiting. They just want something, anything to be built on the long-empty block in the center of our city.

And I get it. After writing over twenty posts examining the business model, architecture, and politics of CentrePointe (see here and here for a sampling), I got tired of talking and thinking about it, too. The interest and outrage was hard to sustain (even if thoroughly justified).

You can see it in online conversations. You can see it in the newspaper1. You can see it in Urban County Council meetings. The coverage and the questions got lazier. At some point, the fatigue just took over. People lost the will to keep investigating and to keep fighting, especially as the project stalled repeatedly.

And that’s precisely what the developers have counted on all along.

If they just waited us out and wore us down, they could walk off with their bonanza payout financed with our tax dollars, and we’d all be too tired, too exasperated, or too relieved to notice.

Against this backdrop of CentrePointe Fatigue, Lexington’s Urban County Council voted 15-0 last Tuesday to approve a new scheme to finance a $32 million parking garage for CentrePointe.

But what really happened was deeply disturbing: The Council unanimously approved a scheme which is designed to defraud investors for the benefit of the developers.

Is ‘fraud’ too strong a term?

Let’s dig in and find out.

::

With any economic development initiative, governments hope to foster increased economic activity in a particular place. The increase in activity is sometimes called an ‘increment’. Tax Increment Financing (TIF) is an economic development scheme where the projected future taxes generated by the new economic activity – the increment – are used to pay for ‘public’ infrastructure improvements.

In CentrePointe’s case, these ‘public’ improvements included a $31.9 million underground parking garage, as well as improvements to sidewalks, sewers, streets, and the rapidly-deteriorating Old Courthouse. In all, CentrePointe includes about $45.5 million in so-called2 public infrastructure.

The CentrePointe TIF proposed financing the infrastructure by issuing bonds to investors, and paying those investors back – plus interest – over the next 30 years with the ‘tax increment’ generated from the project.

Would CentrePointe be able to generate enough in new taxes to pay bond investors?

That was the central question of a 2013 report [PDF download] commissioned by the Cabinet for Economic Development and written by AECOM Economics, a Los Angeles based consultancy.

The AECOM report stands as the only comprehensive evaluation of the economic impacts of CentrePointe in its current incarnation.

AECOM’s report is deeply flawed3. It uses non-standard valuation techniques which tend to dramatically overstate how much CentrePointe is worth to the community.

Despite its flaws, AECOM’s evaluation is still instructive: it raises significant doubts about the viability of the CentrePointe TIF. It also contains what state and local officials knew (or should have known) about whether the TIF could be successful.

There are two key tables in the 52-page report which should have set off alarm bells for the Cabinet for Economic Development and for the Urban County Council.

In the opening pages of the report, AECOM sizes CentrePointe’s tax increment: $48.8 million. Compared to what was there before, AECOM claimed that CentrePointe would be expected to generate nearly $49 million in new taxes over the next 30 years.

CentrePointe Tax Increment

CentrePointe Tax Increment: $48.8 million (AECOM Report, June 2013, p.3)

 

So, would that be enough to pay back bond investors?

No.

A little deeper in the report, AECOM summarizes the public costs of the CentrePointe infrastructure bonds. While the ‘public’ infrastructure would cost $45.5 million, the interest payments (called ‘financing costs’ in AECOM’s report) on the infrastructure bonds would pile up another $47.7 million. Over the next 30 years, then, the infrastructure bonds would cost a little more than $93 million.

CentrePointe Bond Cost

CentrePointe Bond Cost: $93.2 million (AECOM Report, June 2013, p.10)

 

How can $49 million in new taxes from CentrePointe pay off $93 million in debt and interest for the infrastructure bonds?

It can’t.

And therein lies the central fraud of the CentrePointe TIF. There will never be enough economic activity on the CentrePointe site to pay off the debt and interest on the infrastructure. That’s what the only credible, comprehensive analysis of CentrePointe says.

The Cabinet for Economic Development should have known this. (It was their report.) The Urban County Council should have known this. (They were provided the AECOM report before approving the CentrePointe TIF).

Despite knowing that the CentrePointe TIF could never pay for itself, in July 2013 both the city and state approved this audacious scheme to offer fraudulent bonds to investors which they knew could never pay what was promised.

And they approved this scheme all for the benefit of the developers, who get a ‘free’, taxpayer-financed parking garage.

Pretty bad, huh?

Wait, it gets worse.

::

For the CentrePointe TIF, the state will set aside the new, incremental taxes generated by CentrePointe, in order to repay the public infrastructure bonds. The state will hold on to those taxes until at least $150 million in capital is spent on the CentrePointe site. (This is a requirement of Kentucky’s ‘Signature TIF’ law.)

Once the state and city approved the CentrePointe TIF scheme, the developers began to dig and blast for the development’s $31.9 million underground parking garage.

After the developers completed most of the digging last month, they returned to the city and the state with an even more audacious scheme. They asked the city and the state to issue bonds for the parking garage now – before they had spent anywhere close to the $150 million required to release the incremental taxes for repaying the bonds.

The state Cabinet for Economic Development refused the request, and claimed that it was more appropriate for the city to issue the parking garage bonds.

The Urban County Council debated the request, with many council members (appropriately) expressing reservations about the liability for the city in issuing bonds before anything was built which would generate the funds to repay them.

Last Tuesday, the Council heard – and approved – an even more convoluted proposal. (This GTV3 video captures the entire 40-minute meeting.)

The Kentucky League of Cities (KLC) – a non-profit association of Kentucky’s cities – offered to act as a conduit to issue the parking garage bonds under its authority. In order to do so, Lexington would need to enter into an interlocal agreement with another Kentucky city (in this case, Midway) to form a new non-profit corporation which would issue the new bonds. Lexington would pledge its portion of the TIF revenues to KLC for the repayment of the bonds.

While there were a few pointed questions from council members about the project, the overall mood in the room seemed to be a palpable sense of relief – something, anything was finally happening. There was also palpable relief that this whole issue would soon be someone else’s liability.

The council voted 15-0 to pursue using KLC to issue the parking garage bonds. Most of the participants congratulated one another on the ingenuity of this new scheme.

They shouldn’t have. Their hands are far from clean.

By inserting additional layers into the already-labyrinthine CentrePointe TIF scheme, the Urban County Council unanimously voted to make it nearly impossible for bond investors to understand that they will never get their money back.

During last Tuesday’s Council meeting, Roger Peterman – a partner at Dinsmore and Shohl who consults with the city on bond issues – claimed that the potential bond investors “are sophisticated investors [who are] willing to analyze more difficult credits like these.”

Let’s parse that a little. As a so-called ‘sophisticated investor’ myself4, I wondered about how other sophisticated investors would get access to information on the CentrePointe TIF.

When I contacted the Cabinet for Economic Development to obtain a copy of the AECOM report, for instance, I was told “The consultant’s study is protected from public disclosure by state law.” Remember, this is the only credible report on the CentrePointe TIF, and the public agency which commissioned the report was refusing to release it to the public.

I managed to obtain the report through other channels, but I wonder whether the average bond investor would have had the ability and the network to discover it.

Most of these bond investors would deal directly with KLC’s proposed “Lexington-Midway interlocal non-profit bond-issuing shell corporation”5. Very few would have visibility into the convoluted TIF program, much less the precise financial details of the CentrePointe TIF. Even if they knew to look for the AECOM report, how many would press further after being stonewalled by the Cabinet for Economic Development?

‘Sophisticated investors’ also bought the AAA-rated bundles of mortgage-backed securities and collateralized debt obligations which supercharged the subprime mortgage crisis in 2008. Calling them ‘sophisticated’ doesn’t mean that they have a clue about what they are investing in.

But the Urban County Council does know what they are doing: They are using KLC to issue bonds which they know can never be paid back. They are assisting in perpetuating the CentrePointe TIF fraud6.

Wait, it gets even worse.

::

Because the state will hold the incremental taxes from CentrePointe until $150 million is invested in the site, that means that there will be no funds available to pay back bond investors until the project reaches that $150 million threshhold.

But if KLC issues the parking garage bonds through their shell corporation today – when only $5 million of capital has been invested – how will bond investors be paid?

What assurances do bond investors have that anything else will be spent, and that the parking garage bonds will ever begin to be paid back? Only the blithe assurances of the developers. And six-and-a-half years later, those assurances carry very, very little weight.

If the project stalls after the parking garage is built, then what?

Wait, it gets even worse still.

::

There’s one more aspect of what the Urban County Council did last Tuesday which should alarm us: They prioritized the CentrePointe parking garage over the stuff that’s truly public: sidewalks, streets, sewers, and the Old Courthouse.

Remember how the CentrePointe TIF application filed by the developers called for $45.5 million in ‘public infrastructure’, including the $31.9 parking garage?

What was approved on Tuesday was a scheme to fund the parking garage alone.

What happened to the other $13.6 million of infrastructure? When and how will bonds be issued for that? Will those bonds be prioritized behind (i.e., paid after) the parking garage bonds?

It was disturbing to see how eager the Urban County Council was to set up financing for the stuff which benefits the developers (the parking garage) without advancing the stuff which is truly public in nature.

::

If the KLC scheme for the CentrePointe TIF proceeds, the net effect of all of these maneuvers is that only one party involved with the CentrePointe TIF comes out ahead: The Webb Companies.

Bond investors are likely to lose about half of their investment – and that’s if the project is ever completed as planned.

Lexington and Kentucky taxpayers will have earned the right to have their future taxes skimmed for the next 30 years to pay back part of the obligations to those duped bond investors, while incurring the additional legal liability for our city officials and KLC having set up a fraudulent bond offering.

The Webb Companies, however, come out way ahead.

By waiting until the public no longer noticed, The Webb Companies get a ‘free’ parking garage financed with our future tax dollars, while incurring none of its associated costs or risks.

If the rest of the project can never be built – and bondholders can never be paid – The Webb Companies still got a brand new underground parking garage (which they never paid for) on their land.

If they do happen to complete the project, their development will be much more attractive to tenants because of the taxpayer-financed parking garage.

The Webb Companies come out ahead whether the development gets built or not.

In the process of using this taxpayer-funded scheme, the Webb’s have likely more than doubled their profits at our expense7.

::

By taking advantage of CentrePointe Fatigue, the developers have once again privatized gains while socializing their risks to the rest of us – as they have done repeatedly over the past 40 years.

Along the way, they have convinced city and state leaders to use our good names (and credit ratings) to defraud bond investors in order to benefit The Webb Companies.

After six-and-a-half years, I know that it is hard to sustain outrage and interest in CentrePointe. But it has never been more critical to be outraged at shameless hucksters who line their pockets with our money.

 

 :: NOTES ::

 

Read more

2012 and the Local Economy

Rob Morris 1 Comment Ideas, Local ,

I was privileged to be surveyed late last week by the Herald-Leader’s Tom Eblen for today’s column on the state of Lexington’s economy for 2012.

I don’t envy Tom: distilling the often-disparate views of eight different business owners into 800 words or less must be tough.  (As regular readers might imagine, my views didn’t exactly align with many of my peers.)

My response alone was over 1000 words, so the understandable – and necessary – result was that some context was stripped from my comments.

Still, Tom asked very thoughtful questions, and I liked some of my answers.  So I thought it might be worthwhile to share them here on CivilMechanics.

And if you haven’t read Tom’s column, go check it out here.

(Note: I wrote these answers early Friday morning.  Some local events have already outdated at least one answer…)

1. Are you optimistic or pessimistic about the economy this year. Why?

I’m kind of bipolar on the economy.  For the first time in 4 years, I’m seeing signs of strength in our business, in our customers and their ability to buy our services, and in the national economy.

At the same time, I see two major “storms” on the horizon: the apparent willingness of Republicans in Congress to scuttle the economy for political advantage (and I don’t think this is a “both sides” thing – see this, for example), and the apparent unwillingness (or inability) of Europe to deal effectively with their debt crisis.

In my view, both storms are fueled by wrong-headed drives for austerity – forcing governments to spend less when no one else is spending, and further drying up demand.

2. How is your business doing?  How are business conditions better or worse for you than they were a year ago?

Our business is still weaker than I’d like in the wake of the recession, but it is growing.  Sales are up about 3% over last year, but some of the underlying fundamentals still aren’t where they need to be. While we’ve seen some improvement, many of our customers are still delaying basic maintenance on their cars because they can’t afford it.

3. What’s your biggest business concern for the coming year?

I’ve hired two new technicians in the last 9 months, including one last week, bringing us to six mechanics in total.  Having more technicians will help us enormously in the busy spring and summer months.  But the winter is typically our slowest time of the year, so bringing on an additional employee now is a bit of a risk: Will there be enough work to keep everyone busy and happy? Will there be enough business for me to make a profit while paying them?

Getting through the next few months with a bigger staff is my biggest current concern.  Keeping them busy throughout the year by bringing customers through the door is my biggest concern for 2012.

4. What do you see as your biggest opportunity for the year?

Having a larger staff will allow us to serve more customers more quickly.  Toward the end of 2011, we were frequently scheduling appointments up to a week in advance because we were too busy to get customers into the shop sooner, and we lost some business because we couldn’t get them in right away.  We want to improve our service and accommodate our customers more quickly in 2012, and the additional employees will help us with that.

5. What would you like to see the president and/or Congress do to improve the economy?

I’d like to see another massive stimulus package.

120106_privatejobs

While it may not be popular with your readers, there is no doubt that the early 2009 stimulus worked.  (See chart of private-sector job losses and gains at right, stolen from the estimable Steve Benen.)  We were losing hundreds of thousands of jobs every month and the economy was imploding.  Immediately after the stimulus, the economy stabilized and the jobs losses dropped dramatically, and jobs have been growing slowly and steadily since early 2010.  But a stable and slow-growing economy isn’t enough.  I’d like to see another stimulus to help jump-start a more dynamic, fast-growing economy.

A lot of folks will say that we need to cut taxes and regulation in order to get the economy growing again.  That’s a head-scratcher for me.  Lowering my taxes and putting a little extra money in my pocket won’t help me create a job.  Neither would letting me pollute more.

I’ve hired two new employees in the last year (growing 25% from 8 employees to 10), and the decision to hire them was driven by customer demand for faster and better service – which had nothing to do with my taxes or regulations.  Customer demand drives hiring; giving business owners extra money or convenience really doesn’t.

I like President Obama’s American Jobs Act as a starting point for a stimulus – investment in infrastructure, schools, and public safety is a sound way to grow economic demand.  But I’d like to see even more investment in other areas, such as energy research and American manufacturing, and I’d like to see a stimulus closer to $1 trillion to really get the economy growing again.

That’s what I’d like to see.  I see zero chance of this actually happening with this Congress.

6. Will this year’s presidential election make the economy better or worse? Why?

I fear that it will make things worse, at least for the short term.  It is hard to imagine how our political system could be more gridlocked than it was in 2011.  Still, as congressional Republicans obstruct any initiative which might make the President look good, I worry that they’ll sacrifice the economy on the altar of politics.

As for the race itself, I see a worrying thread of extremism from the GOP candidates.  Even the supposedly-moderate Mitt Romney is proposing extreme policies which benefit the wealthy even more and skewer the middle class and poor even more (thereby skewering most of my customers).  I worry that the austere policies a Republican President might attempt to implement would decimate my customer base and my business.

7. What is Lexington’s biggest asset during these economic times? It’s biggest problem?

I think our schools – particularly UK – are our biggest asset.  They provide our city with well-educated people, great research to improve our lives and build businesses upon, and a vibrant “student economy” which spills over into the rest of our city.

I see two big problems for Lexington.  First, if the proposed redistricting is approved by Governor Beshear, a huge chunk of our city will not be represented in the Kentucky State Senate for two years.  Proper representation in Frankfort is vital to protecting Lexington’s interests and to protecting UK, and these undemocratic redistricting plans would deprive one-third of our city of its vote.  I worry about the impacts of Lexington not being represented in Frankfort.

Second, I think our city, our state, and our schools are under-funded.  I appreciate all of the efforts Mayor Gray has made to trim Lexington’s budget, but at some point, we citizens need to fund all of the services and infrastructure and improvements we’ve come to expect.

I want nice roads for me, my customers, and my employees.  I want them to be plowed and salted when nasty weather strikes this winter.  I want the best schools for my son and for my employees’ families.  I want the best fire and police protection.  I want a beautiful and safe city to live and work in.  But those benefits come at a price.  And we’re responsible for funding all of those “nice things”.

It won’t be popular, but I think we need to start a frank conversation about raising taxes to fund our city’s (and state’s and schools’) obligations.  We need to pay for the great things we want to do together.

8. What else should readers know that I haven’t asked about?

I hope they’ll go out of their way to buy local goods and services when possible.  That will keep more of Lexington’s money in Lexington, which helps foster a more vibrant local economy.

And now for the hard part…

Rob Morris 0 Comment CentrePointe, Local , , , , , ,

Critics have identified three interrelated categories of problems for CentrePointe since it was introduced to the public in 2008:

  1. Context.  Will it ‘fit’ with downtown Lexington?
  2. Financing.  Will it be built?
  3. Viability.  If built, will it work?

And CentrePointe has consistently failed across all three dimensions.  It didn’t fit Lexington.  It couldn’t be financed.  And it wasn’t viable.

As the project has changed trajectory in the past few months, it is worth re-examining these critiques.

Context
The first three iterations of CentrePointe were uninspired and uninspiring.  The designs seemed devoid of place – as though they could be plopped down on any block in any random city – Nashville, Atlanta, Phoenix, Detroit.  There was nothing about the designs which was particular to Lexington.

The bland and imposing structures were also the architectural equivalents of bullies – crowding Main Street, unwelcoming to pedestrians, overshadowing nearby buildings, and oblivious to the surrounding fabric of downtown.

The heavy-handed designs seemed to mirror the developers’ if-you-don’t-like-it-well-that’s-just-too-damn-bad demeanor.

In recent weeks, however, we have begun to see much more hope for CentrePointe.  With help from the mayor, the developers engaged Chicago’s Studio Gang Architects (SGA) to reconceive the site. And the developers have interacted much more with the public and the press – including a quasi-interview with the developer which utilized our questions from an earlier post. (We’d like to ask some follow-ups!)

Jeanne Gang presented her firm’s initial architectural concept for the CentrePointe block to a packed crowd at the Kentucky Theatre last week.

It was a great design.

GangCP And like most great designs, it poses elegant solutions to several problems at once.  Here are a few highlights which caught our attention:

  • Mass.  SGA departed from previous monolithic designs, and redistributed the mass of the project across the site.  The new asymmetric distribution allows the design to accomplish a number of goals.  Breaking the project into components also opens the possibility that the site might be developed in phases – perhaps as financing becomes available.
  • Main Street.  Along Main Street, SGA proposes having 6 distinct building designs which would mirror the varied designs across the street and which would also help maintain the organic, eclectic feeling of a typical Main Street.
  • Inclusiveness.  To help ensure distinct building designs along Main Street, SGA has selected five local architects to design 5 of the 6 buildings on that side of CentrePointe.
  • Plays Nice.  Unlike the earlier “bully” designs, this one seems to play nicely with the surrounding city. SGA used “shadow studies” to assess how the 30-story tower might throw shadows over nearby buildings.  Those studies helped them decide to place the tower near the corner of Upper and Vine Streets, where the building would be less overpowering on the surrounding blocks.
  • Circulation.  This design also departs from earlier versions in that it promotes pedestrian circulation with the surrounding city and within the site, with ample open spaces and public areas.  It is able to accommodate parking access for cars without significantly disrupting pedestrian access.
  • Lexington.  Studio Gang are trying to give the project local meaning – connecting it to our history, stories, and environment.   And while I’m skeptical of the real utility of “the connected separateness of paddocks” or “the porosity of limestone” as sources of inspiration for the new design, SGA is the first CentrePointe architect who seems to realize that it will be built in a unique setting within our unique city.

Studio Gang have crafted this particular design to this particular spot in Lexington, and the result is very encouraging.  Lexington may finally have a signature project worthy of the center of our city.

Financing
The changes in the nature of the CentrePointe project don’t alter the economic environment for getting the project funded.

While now armed with a world-class architect and a world-class design, the developers are still faced with the enormous challenge of finding funding while the commercial real estate market remains in severe recession.

Investors will be far less interested in the aesthetics of the project than its financial viability as an investment vehicle…

Viability
Our central criticism of CentrePointe over the past few years has been its economic viability.  We’ve spent a lot of time deconstructing the economics of CentrePointe, and whether it can ‘work’ as an economic entity.

In short, the project wasn’t – and still isn’t – realistic.

Each of the four components of the project (condominiums, hotel, retail, and office) demanded exceptionally high prices and required exceptionally high occupancy to be successful.

Despite the inclusion of SGA in the design of CentrePointe, the developers won’t be able to achieve the levels of occupancy needed to make the project successful.  (Both prices and occupancy were far in excess of the Lexington market.)

The project also needed the infusion of Tax Increment Financing (TIF) from the state and city to help pay for ‘public’ improvements to the site (including sidewalks, parking garage, storm sewers, and other infrastructure).

The city and state would issue TIF bonds (debt) to pay for today’s improvements, and would pay them back with interest by harvesting future tax revenues coming out of the CentrePointe site.

And, as we have shown before, the CentrePointe TIF – based on incredibly optimistic assumptions – never pays back the city or state for their investment.  In essence, TIF amounts to corporate welfare for the developers.

And no knowledgeable bond analyst would ever recommend the CentrePointe TIF to his or her investors.  It would never pay them back.

::

Over the past three years, CentrePointe seemed like a lose-lose for Lexington: We lost if the project wasn’t built; we lost if it was built, too.

CentrePointe was a bad idea.  And it was badly executed.

The new approach to designing CentrePointe is different: This new design incorporates so many great ideas, and it seems to function so well with downtown Lexington.

Studio Gang has helped transform the threefold criticism of CentrePointe – It doesn’t fit Lexington; It can’t be financed; It isn’t viable – into a twofold critique.  CentrePointe still can’t be financed.  It still isn’t viable.

While still deeply skeptical about the project’s economic viability (and its value for Lexington), we find ourselves pulling for this vision of the project – just a little.

This CentrePointe seems like a good idea – maybe even a great one.  And that’s the first time we can legitimately say that about CentrePointe.

But great ideas are the easy part.

Now, the community’s attention must turn to the hard part of CentrePointe: Execution.

The transition to execution poses new challenges for the developers and for Studio Gang.

How will the project find funding?  Can they conceive a more realistic plan which pulls back from today’s more ambitious design?  Can they make a 20-story tower work, for instance?  Can they craft an economic model which doesn’t rely so heavily on TIF?  Can they build smaller parts of the project today, and finance the rest when the economy improves?

The future of downtown might rest on the answers.

UPDATE 7/18/2011: Jeff Fugate has an excellent post on what the new design of CentrePointe accomplishes over at ProgressLex.

The Promise (and Predicament) of CentrePointe

Rob Morris 3 Comments CentrePointe, Local , , , , ,

Since CentrePointe was initially proposed over three years ago, the project has been marked by fantastical bluster, broken promises, poor designs, and, ultimately, a failure to build.  All of which was compounded by the developers’ riteously indignant, arrogant, and combative attitude when challenged on the wisdom of CentrePointe.

A couple of years ago, after declaring CentrePointe an impossible-to-build failure, we outlined some basic principles for reconceiving the (still) empty block in the heart of our city.  Here’s an abbreviated excerpt from that post:

  • Create a vibrant destination which attracts residents, workers, and tourists.
  • Make that destination a distinctive place which no other city has.
  • Create public and private spaces within the destination.
  • Balance the types of uses within the development.
  • Ensure local businesses have significant presence.
  • Ensure that the space is well-integrated with the surrounding community.
  • Build it soon.

After three years of apparent tone-deafness by CentrePointe’s developers, the prospects for such a “signature place” seemed quite dim.

::

On the sweltering third floor of the old courthouse yesterday, an overflow crowd of some 300 Lexingtonians received a tantalizing glimpse of a new approach to the CentrePointe project.

And that approach represented an enormous (and refreshing) step in the right direction.

With the encouragement of Lexington’s new mayor, the developers engaged Jeanne Gang of Chicago’s Studio Gang Architects (SGA) to rethink the CentrePointe block.

On Thursday, she present preliminary site design concepts for the CentrePointe block.  And she presented a marked departure from the old approach to CentrePointe.

NewCPDesign Gang’s presentation and the developers’ new approach are refreshing in a number of ways:

  • Design. SGA abandons the “Fortress Lexington” approach of the old CentrePointe.  By breaking the project into independent components with different volumes and designs, SGA will avoid the imposing and monolithic designs offered in previous iterations of CentrePointe.
  • Openness. By showing preliminary design concepts and inviting public input on them, CentrePointe promises to be a much more open project.  The developers are even inviting local architects to design the Main Street components of the project.
  • Humility. Gang showed her work and her thinking while it was still in progress, while it was still incomplete.  Exposing this level of uncertainty takes a striking degree of humility and confidence – for both the architect and the developer.  Whereas previous iterations of CentrePointe were presented as a fait accompli to be adored by a passive audience, SGA’s version promises to be a shared community treasure which we might be able to design together.  In this more humble regime, once-adversarial relationships might transform into more-cooperative ones.

The mayor and the developers and SGA are to be commended for crafting this new approach to CentrePointe.

The chances for creating a unique, signature place for Lexington went way up yesterday. And the developers deserve some credit for allowing that to happen.

::

Despite the new approach to designing CentrePointe, a number of nagging issues remain for the tortuous project.

While Gang’s site design breaks up the monolithic tower of previous CentrePointe concepts, it appears to maintain the overall square footage and volume of the last iteration of the project.  If the project is roughly the same size, it should be roughly the same cost – around $200 million.

And if the developers have had difficulty lining up financing for the past three years, what will allow them to line it up now?  The commercial real estate market remains deeply depressed, and it isn’t clear that such abundant premium space would find tenants in Lexington.  The business model issues we identified early in the project haven’t fundamentally changed.

Is it possible that the new design will be so revolutionary, so inspirational, so great that investors and tenants will line up around the CentrePointe block to get in?  Perhaps.  We’d be thrilled.  But we doubt it.

The $200 million price tag is also important because that is the minimum required to qualify for tax increment financing (TIF).  TIF allows cities and states to allocate future incremental tax revenues to finance today’s public improvements related to new economic development initiatives.

In CentrePointe’s case, the city and state would finance about $50 million in improvements – a parking garage, sidewalks, storm sewers, etc. – around the project, and they would hope to recoup that investment from new taxes generated by CentrePointe.  In previous analysis, we’ve found that the CentrePointe TIF is highly problematic, and that it is doubtful that the city or state would ever get their money back.

Even though the new design direction is encouraging, several other aspects of the project are still unresolved.  Is the project the appropriate scale for Lexington?  Can it find willing tenants? Can the developers nail down financing?  Is the TIF worth the up-front expense?

The developers find themselves in a dilemma: If their project falls below the $200 million mark, it will be much more realistic to finance and to find occupants.  But it will lose the $50 million boost from TIF financing.

If the project comes in over $200 million, it is much more difficult to finance and occupy, and the opportunity for financing the project in the next 5 to 6 years looks grim.  (The TIF agreement between the Kentucky Economic Development Finance Authority and the city specifies that the $200 million be spent by January 2015).

::

We applaud the developers’ new, more-open approach to designing CentrePointe.  Bringing Jeanne Gang and SGA in to rethink the site is a welcome departure from the past three years. As frequent critics of CentrePointe and its developers, we’re very encouraged by the new direction of the project.

But because the economic challenges to the project linger on, we’d like to see a more open, more flexible approach applied to the execution of the project as well.  Perhaps the project could be built progressively or in stages, to allow for further construction as new financing becomes available. Perhaps it could be downsized to multiply financing options.

If – and this is a big ‘if’ – the developers can rethink their business model the way they’ve begun to rethink the design, the future of CentrePointe may be bright indeed.

UPDATE 6/6/2011: Graham Pohl now has a fine post up on an architect’s perspective of the new CentrePointe design and process over at ProgressLex.

The Trouble with Consultants

Rob Morris 6 Comments Local , , , ,

In the wake of the scandal surrounding Angelou Economics and their “recycled” economic development plan for Lexington, there have been a number of calls for developing a more homegrown economic development strategy.

These include Tom Eblen’s thoughts on local knowledge and leadership, John Cirigliano’s project-based approach, and our own ideas about extending the work of the mayoral transition teams.

In response to these calls for a more local economic development approach, I’ve noticed counter-memes emerging.

  • One argument contends that we need consultants to fight insularity and to provide a valuable outside perspective.
  • Another – in a particularly egregious defense of the indefensible – contends that this is what creative professionals do, and shame on those who called out Angelou – they destroyed a civic foundation of teamwork and trust.

I think these arguments are mostly wrong, and that they mostly distract us from taking the reins of our own economic development.

 ::

I’m pretty jaded when it comes to consultants.

I’ve managed a wide range of consultants throughout my career: industrial designers, research agencies, brand consultants, business strategy consultants, operations consultants, and even internet consultants at the height of the dot-com bubble.

I’ve engaged with enough consultants over the past 15 years to notice distinct patterns:

  • Consultants play “follow the leader”.  Every industrial design consultant starts by deconstructing what Apple does.  Business strategy consultants start with Google.  Or GE.  Or Proctor and Gamble.  They consistently take the leader in a category and dangle it in front of the client like red meat.  The implication: “With us, you can make products like Apple.  You can grow like Google.  You can mint money like P&G.  Just hire us and we’ll share that ‘secret sauce’.“
  • Consultants tell clients what they want to hear.  A few consultants throw some early jabs to get a client to sit up and listen – “Here’s why your marketing sucks…”  Ultimately, though, they calibrate their recommendations to what they think the client wants to hear.  What they deliver are bland, unobjectionable, safe ideas which don’t really threaten the status quo.  “You can be wildly successful without discomfort!”
  • Consultants position for the next engagement.  The most successful consultants are always angling for their next big score.  They deliver big, fat, visually-stunning reports loaded with aspirational recommendations which seem reasonable enough, but which neglect any significant detail on how to execute what they recommended.  Because execution is something they would be glad to help you with, for an additional fee.  They promise the ‘secret sauce’, but never actually provide the recipe.
  • Consultants recycle.  Relentlessly.   Once a consultant comes up with a ‘big idea’, they don’t usually isolate it to a single client.  They leverage that idea over and over again, across their business.  They might customize or repackage their big idea for each client, or they might just make it a signature ‘product’ which they patent or trademark.  About eighteen months after we rejected an industrial design, for example, we’d see elements of that design pop up in another client’s products.  Many of the presentations and reports we got from consultants were 70% to 90% ‘boilerplate’ – stuff which could have been used for any of their clients in any industry.

Not every consultant follows these patterns, but enough do that these behaviors are fairly predictable.  If consultants are so predictable, why do so many people work with them?  There are a couple of unfortunate reasons.

First, consultants can provide a kind of political cover for difficult decisions: “I’m not recommending layoffs, the consultant is…”  Their ‘independence’ and ‘objectivity’ make the consultants’ recommendations seem to carry more weight than when those same recommendations come from the people who hired them.

Second, and often related, is that consultants help us look busy when we’re tackling a difficult problem.  They signal to others that we’re taking action: “Our consultant is looking into that.”  In these cases, the appearance of action seems more important than the production of results.

Consultants can, indeed, provide a valuable outside perspective.  Often, they’ve seen a lot of diverse examples of smart stuff that others are doing, and they bring those best practices to their clients.

But consulting engagements perform best when consultants augment and enrich the client’s work – when the clients have already done their homework; They fail when the client abdicates their work to the consultant.

::

MadLibs2 Given my jaded perspective on consultants, I wasn’t too surprised when Ben Self exposed the Madlibs-style, fill-in-the-blank consulting work done by Angelou Economics in their “Advance Lexington” strategy for economic development.

Angelou fit a lot of the consultant patterns.

  • They recycled reports they had created for other cities.
  • They played “follow the leader”, holding out their work in successful cities like Austin and Boulder with the implicit promise that Lexington could be like them.
  • They also told their clients what they wanted to hear – recommending a much more prominent role for report sponsor Commerce Lexington (which is partly subsidized by Lexington taxpayers) in Lexington’s economic development.  That gives Commerce Lexington “cover” when it requests increased public funding; After all, it isn’t Commerce Lexington’s idea…

The problem for Lexington is that we attempted to have the consultant do our work for us without doing our own homework first. We can’t expect to get great economic results when we outsource our economic development strategy to others.

We had folks whose job it was to produce such a strategy.  They just didn’t.  They abdicated their responsibility to a consultant.  And that’s not acceptable.

The important question: Why didn’t Lexington already have a strategy for economic development before we engaged Angelou?

Beyond Angelou

Rob Morris 2 Comments Local , , , , , ,

In December, I was honored when Lexington Mayor-elect Jim Gray asked me to join one of his economic development transition teams.  In preparation for our first meeting, we were given a packet which described the state of economic development in Lexington.

As I reviewed those materials, I noticed several references to “the” strategic plan for Lexington’s economic development; Yet that strategic plan wasn’t part of our materials.  I scanned the city government website for the strategic plan, and came up empty.

At our first meeting, I mentioned that we needed to get our hands on that strategic plan.

But Lexington didn’t actually have a strategic plan for economic development.  Despite having a Mayor’s Office of Economic Development and a staff of economic development folks at Commerce Lexington, we hadn’t developed a comprehensive approach to Lexington’s development.

Instead, the city and Commerce Lexington co-sponsored a $150,000 engagement with Angelou Economics, an Austin-based economic development consultancy.  The final Angelou deliverable would include an economic development strategy for Lexington.

I was stunned.  Not only did we not have a coherent economic development strategy, but we had seemingly outsourced the formulation of that strategy to an out-of-town consultant!

::

Angelou released a draft of Lexington’s economic development strategy last week.  In the process, they unleashed a torrent of criticism after Ben Self showed that Angelou essentially recycled reports they had provided to other cities, often copying entire paragraphs and even pages.

The recommendations that Angelou makes aren’t bad.  They recommend creating a better support network for entrepreneurs.  They recommend setting up a minority business accelerator.  They recommend setting up a comprehensive marketing plan for Lexington to help recruit new businesses.

The trouble with Angelou’s report (as might be expected after Ben’s analysis) is that “Lexington” is missing.  Much of what makes Lexington special and unique – our history, our geography, and our culture – is largely absent from the Angelou strategy.

There’s no significant mention of downtown.  Of the Distillery District.  Of our neighborhoods.  Of our unique individuals and personalities.  Of our history.  There’s only a passing mention of our horse farms and our rural landscape.  There’s no mention of the World Equestrian Games.

As a result, Angelou fails to identify what gives Lexington a competitive advantage in the global competition for businesses, jobs, and talent.  So while the recommendations aren’t bad, they just ring hollow.  They are bland and generic.  They don’t feel special to Lexington.

When Angelou recommends focusing on “Clean Technology”, for instance, that sounds like a good idea.  But what gives Lexington any special advantage over any other city in pursuing clean tech (Especially when every other city is pursing such a “hot” industry)?

These kinds of questions arise with most of the Angelou recommendations. What would a marketing plan for Lexington look like?  What would it build upon?  What – specifically – would give Lexington the ability to create a best-in-class workforce?

::

We have the beginnings of a very solid economic development plan.  It just didn’t come from Angelou.  It came out of the two economic development transition teams that Mayor Gray appointed.  (You can download PDFs of the two “Economic Opportunity” reports from the mayor’s transition website.)

The two teams – made up of leaders from across the city – developed recommendations for how the mayor should approach economic development in Lexington.

And the transition teams recommended many of the same actions that Angelou did.  The difference?  The ideas contained in these reports are far more actionable than the ones we received from Angelou.  They are far more interesting.  They are far more relevant.  They are far more tailored to Lexington’s specific challenges and opportunities.

Like Angelou, the transition teams recommended enhancing support for entrepreneurs.  But the transition teams went further, and offered much more specific examples.  These included: Having the mayor visit 5 entrepreneurial events each year (along with a list of suggested events); Having the mayor organize an annual innovation conference, along with specific suggestions on structure and format; and, having the mayor’s office produce “The Lexington Entrepreneur’s Guide” online and in print.

The transition teams’ suggestions for a marketing plan for Lexington included specific, actionable ideas on who to include and how to approach marketing our city.  We could get testimonials from Jess Jackson (of Kendall Jackson Wineries) or Elizabeth Arden (Note the Streetsweeper’s comment below), who happen to own horse farms here.  The transition reports recommended building databases of local resources which could be called upon when recruiting new businesses to Lexington.

The transition teams also offered suggestions on how to better utilize downtown, our horse farms, and the Distillery District.  They offered specific ideas on building upon our health and educational systems.

And unlike Angelou, the recommendations contained in the transition team reports are much more tailored to Lexington, and – as a result – the recommendations are much more actionable.  They form the foundations of a real economic development plan for our city.

::

Somehow, about 25 volunteers – in the span of a few meetings across a few weeks – leveraged their knowledge and experience to produce some innovative ways for Lexington to pursue economic development.  And the final product is more valuable than the report the consultant provided.  And it didn’t cost $150,000.

There are a lot of great ideas in these transition team reports.  That said, those ideas don’t yet form a cohesive economic development plan.  That work remains to be done.

Given how productive the transition teams were in such a short time, why not let leaders from throughout the community develop the strategy for Lexington’s economic development?  Why not let them recommend the structure, the direction, and the financing of Lexington’s economic development efforts?

All it took to create these transition reports was leadership from our mayor.  Likewise, our mayor should initiate the process of building an economic development strategy for Lexington, created by us.

We should use the Angelou fiasco not only to penalize Angelou for doing poor consulting work, but also to learn how to do our own economic development better.

Right.

Rob Morris 1 Comment Campaigns, Local , , , ,

On November 2nd, Lexington chooses its mayor.  I’ve spent much of the past few years observing the two candidates in action.  

Here, I address why one candidate is the right choice for Lexington, and why he will lead our city to a more prosperous and successful future.

::

I first got to know Jim Gray personally about a year and a half ago.  After I had written about Lexington several times, I was pleasantly surprised when he asked to meet with me.

Gray I had long admired Jim’s accomplishments as a successful businessman and civic leader.  But as we talked about our backgrounds and about his experiences as Vice Mayor, I realized that this was the man Lexington needed to lead our city to a better future.

::

Jim Gray is the right person to lead Lexington back to prosperity. Let’s explore why.

Humility
For all of his accomplishments and personal achievements (more on those in a bit), Gray is surprisingly humble about his success. Gray’s humility manifests itself in a number of important ways.

  • He acknowledges his own imperfections.  Rather than becoming defensive about his faults, he surrounds himself with people who more-than-compensate for qualities he may lack.
  • He listens.  A lot.   He knows that he doesn’t have all of the answers, so he seeks out people who have more knowledge and ideas.  And then, he listens carefully to what they have to say.
  • He is inclusive.    He always uses inclusive terms – “we”, “us”, “our” – when talking about Gray Construction (his family business where he serves as CEO).  He generously shares credit with others for the company’s success.

While his humility helps him lead and inspire those who work with him, it doesn’t always serve Gray well in politics.

For one thing, bragging comes unnaturally to him – he finds it awkward and unseemly to crow about what he has done and how he has led.

For another, he is inclined to be magnanimous – sometimes maddeningly so – with his political opponents.  While his opponent kicked off the campaign by attacking Gray, Gray has kindly maintained that his opponent “is not a bad guy, he’s just made some bad decisions”.

Accomplishments
Looking around the city and the commonwealth, Gray has left a lasting economic legacy which will serve our community long after his political career is complete.

Gray has led Gray Construction to be one of our city’s most innovative firms, and the company has a long record of job creation and city-building.

Gray It starts with Gray Construction’s downtown Lexington headquarters, located in the old Wolf Wile building.  Gray took a dilapidated building and transformed it into one of Lexington’s most inspiring workplaces.  The building stands as a stellar example of blending historic preservation with economic development.

But Gray’s accomplishments don’t stop there.

Sayre From here at Lowell’s, we can see Sayre’s Buttery and Upper School. Both buildings use modern building materials and techniques, while maintaining consistency with our historic North Limestone neighborhood.  That is a trademark of a Gray urban construction project.

In other parts of Lexington, Gray Construction projects include:

  • CenterCourt, a mixed-use development near the UK campus
  • A LEED-certified distribution center for Kentucky Eagle
  • The headquarters of Big Ass Fans
  • Amazon’s Lexington distribution center

Gray was instrumental in the inception of the 21c Museum and Hotel in Louisville.  Combining the best of old downtown Louisville with new design and materials, 21c has now been voted the #1 hotel in the U.S. for two years in a row.

South of Louisville, Gray built the visitors’ center at Bernheim Forest, Kentucky’s first LEED Platinum building.

In Georgetown, Gray built Toyota’s sprawling manufacturing facility, a vital part of our local economy.

Gray has changed the face of Lexington and of Kentucky for the better, and our community is more beautiful and more economically vibrant as a result.  He knows what makes a city thrive.  And he knows what businesses need to create jobs.

Insights
Jim Gray brought his experiences and insights from the business world to his (part-time) role as Lexington’s Vice Mayor.  He has had a knack for asking the right questions and doing the right things while in office:

  • He challenged the economic viability of the failed CentrePointe development from the beginning.
  • While the mayor waffled, Gray took the lead on looking into scandals at the Airport, the Library, and the Kentucky League of Cities.
  • He looked into how public safety was compromised by poorly-executed fire station brownouts.
  • He asked how wise it was to close several blocks of a major artery into downtown (South Limestone) for nearly a year.
  • He pushed for alternatives to the $160 million water plant which has now raised water rates by 65 percent.

Some have dismissed Gray’s actions as ‘grandstanding’.  But when we look back at the record, we see that he was right to ask these questions.  Every time.

Vision
Gray has been able to synthesize his business experience, what he’s learned about city goverment, and what he has heard from our community into a new vision for what Lexington could be.

But beyond a simple and unactionable vision, Gray has also detailed a ‘Fresh Start’ plan to specify what he will do as mayor.  The plan helps translate Gray’s vision into actionable steps.

Don’t agree with something in Gray’s plan?  Let him know.  Challenge him to make it better.  Tell him how.  As he says, the plan “is designed to be intelligently changed”.

Gray’s plan also reveals something even more important about Jim Gray: He has been thinking carefully about the future of Lexington.  He has kept his eyes open.  He has listened to our citizens.  He cares deeply for our city.

And, he has very good ideas for making Lexington an even better place to live and work.

I think we should give him the chance to implement his vision.

::

On November 2nd, I hope you will join me in voting for Jim Gray as Mayor of Lexington.  I give him my whole-hearted endorsement.

 

Wrong.

Rob Morris 0 Comment Campaigns, Local , , , , ,

On November 2nd, Lexington chooses its mayor.  I’ve spent much of the past few years observing the two candidates in action.  

Here, I address in some detail why one is the wrong choice for Lexington.  Next, I’ll address why the other candidate will lead Lexington to a more prosperous and successful future.

::

Last December – late in his third year in office – Lexington Mayor Jim Newberry proposed an ordinance to overhaul Lexington’s ethics laws.

Newberry Among other proposals, the ordinance suggested that lobbyists be prevented from serving as fundraisers or campaign treasurers for local campaigns.

Two days later, Newberry attended a $10,000 fundraiser for his campaign at the home of David Whitehouse, a registered lobbyist.

Proposed after the Urban County Council had adjourned for its winter break, little came of Newberry’s ethics proposal when council reconvened in 2010, and the mayor did little to promote his ethics initiative.

In microcosm, “Lobby-gate” encapsulates Jim Newberry’s tenure as Lexington’s mayor.  Let’s look at a few themes which emerged from this incident:

  • Scandal Blindness.  The mayor seems unable or unwilling to recognize and act upon wrongdoing.

Why would Newberry attend  fundraiser in a lobbyist’s home only two days after suggesting that Lexington should eliminate such a practice?  He either didn’t think – or didn’t care – about how apparently inappropriate his actions were.

  • Failure to Lead.  Newberry has resisted decisive action when faced with important issues.

While ethics reform was a centerpiece of Newberry’s 2006 run for mayor, he waited over 3 years to offer a proposal, and did so only as he and his competitors were ramping up for the 2010 campaign.

  • Hypocrisy.  In the wide gulf between words and deeds, the mayor often opts for symbolic posturing (rather than substantive action).

When questioned by local media about the fundraiser, his response was less-than-satisfactory for a ‘reformer’: “I… will continue to operate by the rules of the world as they exist.”

With his ethics proposal, Newberry could now make the empty claim that he ‘delivered’ a campaign promise for ethics reform.  Meanwhile, he would do precious little to see his half-hearted proposal – made while council was on break – into law.

  • Favoritism.  When Newberry does take action – or refuses to act – the beneficiaries are often his friends and campaign contributors.

Refusing to act on ethics reform allows lobbyist-contributors like Whitehouse (who represents a software firm that did work on the city’s financial systems) to operate without scrutiny or interference from the city.

  • Failure to Deliver.  Ultimately, the Newberry regime is marked by a pattern of profound inability deliver meaningful results.

Lexington’s ethics laws today are essentially unchanged from when Newberry entered office.

Isolated to a single incident, these flaws might be forgivable.  But they are not isolated: We can see these tendencies consistently pervading Newberry’s conduct as mayor.

::

Scandal Blindness
This administration has been plagued by scandal.

  • There was out-of-control spending by the Bluegrass Airport staff and poor oversight by the Airport board of directors, who are appointed by the mayor.
  • There was out-of-control spending by the Kentucky League of Cities and poor oversight by KLC’s board.   Newberry is a member of that board.
  • There was out-of-control spending by the Lexington Public Library staff and poor oversight by the Library board of trustees, who are appointed by the mayor.
  • In the wake of the Haitian earthquake, there was Newberry’s failure to quickly approve sending a specially-trained Lexington Search and Rescue team into the quake zone.  The delay meant that the team was relegated to a support role.  The mayor’s indecisiveness likely cost lives.
  • There were the accusations of fraud by Patrick Johnston, Newberry’s own Director of Risk Management in the Lexington-Fayette Urban County Government.

While actions in question failed to rise to the legal definition of fraud, the investigations into the Johnston affair revealed fresh concerns over how Newberry’s administration behaved – including audit breakdowns, ethical failures, privacy breaches, and retaliation.

After months of obstruction and delay in the Johnston affair, Lexington was left with a ridiculous predicament: the city government sued itself, and taxpayers footed both sides of the $50,000 bill.

While Newberry wasn’t implicated in these scandals, he has been indecisive and ineffectual in responding to them.

First, Newberry minimized possible wrongdoing.  Then, he questioned the motives and challenged the authority of those who wanted to take action on the scandals, preferring to let the respective boards handle their ‘internal’ issues.  As weeks and months of inaction (and, in some cases, obstruction) became deeply embarrassing, he finally ‘welcomed‘ the investigations which were already underway.

As scandal upon scandal broke, Newberry could have learned from each one – figuring out how to lead decisively in the face of scandal.  Instead, Newberry seemed to intensify a kind of bunker mentality – choosing to hunker down until the uproar passed.

Failure to Lead
As seen with the scandals above, Newberry has demonstrated an appalling failure to lead just when his leadership was needed most.

Another area which needed strong mayoral leadership has been Lexington’s urban development, especially throughout downtown.  Instead, Newberry has adopted a laissez faire attitude – opting instead to do little to help guide downtown development efforts.

  • The mayor has been a steadfast supporter of the failed CentrePointe development, even as the project’s deep flaws became evident.  As a result, Newberry stood by while the developer tore down a neglected-but-historic block of buildings in the center of our city.  And he has done little to ensure that responsible development happens on that still-vacant block.
  • As the council adopted design guidelines for the downtown area, Newberry failed to offer any executive leadership to see form-based guidelines defined and implemented.  So when CVS wanted to build a new pharmacy at the gateway to downtown, Lexington had few formal requirements guiding the ultimate design of the structure.
  • The mayor has extended this do-nothing approach to historic preservation initiatives, refusing to see how economic development and historic preservation can be complementary efforts.  He has incorrectly characterized design and preservation as matters of ‘taste’ rather than of smart economics for Lexington.
  • At the last minute, the mayor launched a poorly-conceived and transparent effort to block the funding of improvements for Lexington’s Distillery District.

As we’ll see more in a few moments, when the mayor actually does take decisive action, the results are questionable.

Hypocrisy
Without apparent shame, the mayor often maintains a stark and hypocritical disconnect between what he says and what he does.  He seems to think that voters won’t notice if he does one thing while he says the opposite.

  • He pushed his expensive water plant plan through council while accepting huge contributions from water company executives and allies.  Now he is ‘outraged‘ about 65% increase in water rates – a burden that his plant put on taxpayers.  Hypocrisy.
  • He and his staff actively suppressed the release of government information during the Johnston scandal while announcing a ‘new’ government transparency initiative.  Hypocrisy.
  • He dragged his feet on investigating scandals at the Airport, the Library, and KLC, only acting when his inaction became embarrassing.  Now, he likes to claim that he ‘strongly condemned’ the same scandals he failed to act upon.  Hypocrisy.
  • He browned out fire stations and decreased police and fire staffing while declaring that public safety was “job one”.  Hypocrisy.
  • His contributors like to ridicule putting local businesses first (especially this local contributor who contracted on the local $160 million water plant with his local business), while he champions projects which benefit those same contributors – some of Lexington’s wealthiest citizens and corporations.  Hypocrisy.
  • He attacks his opponent’s accomplishments in his part-time position as Vice Mayor, all the while hoping nobody asks “What has Jim Newberry really accomplished as mayor?”  Hypocrisy.

This serial hypocrisy is compounded by Newberry’s profoundly Bushian inability to admit mistakes. Such lack of humility means that he is unable to go back and fix the problems of his administration.

Newberry’s campaign is built upon the cynical belief that voters will remain ignorant of such hypocrisy.

Favoritism
There is a short list of mayor-driven accomplishments during the Newberry tenure: downtown streetscapes, the Lyric theater, the $160 million water plant, and CentrePointe stand out.  As we look across this list, we notice a distinct pattern: the primary beneficiaries of the mayor’s action – when he chooses to actually take action – are Lexington’s richest citizens and companies.

  • If the Tax Increment Financing (TIF) that Newberry promoted for CentrePointe does more for Dudley Webb than for the average Lexingtonian (and it does), it amounts to little more than corporate welfare.
  • If streetscape projects greatly benefited Leonard Lawson (the owner of ATI Construction and already one of Kentucky’s wealthiest people), while the average citizen was made to wait in traffic jams for 15 months, it seems that the mayor’s friends’ priorities are put ahead of voters.
  • KAWCPlant If the mayor pushes through a $160 million water plant which lines the pockets of Warren Rogers and other campaign contributors – while making average families pay 65 percent more for water – that, too, amounts to corporate welfare and pay-to-play.

These projects were among the most contentious that the council considered over the past four years.  And on each one, the mayor was more active and vocal than usual in strong-arming them through council.  For whose benefit?

Failure to Deliver
When we look over the Newberry record, we have to ask what Jim Newberry has really accomplished for Lexington.  And that record is not impressive:

  • He dropped the ball on overseeing the Airport scandal, the Library scandal, and the Kentucky League of Cities scandal.
  • He dropped the ball on CentrePointe.
  • He dropped the ball on the water plant.
  • He dropped the ball on delivering more firefighters and police officers.
  • He dropped the ball on saving lives in Haiti.
  • He dropped the ball on the fire station brownouts.
  • He dropped the ball on the budget and responsible spending.
  • He dropped the ball on jobs.
  • He dropped the ball on economic development.

After so many fumbles, it is time to bench our current mayor.

Jim Newberry is the wrong choice for Lexington.

Will Creative Cities Matter?

Rob Morris 7 Comments Local , , ,

Lexington hosted the third installment of the Creative Cities Summit late last week (previous editions were in St. Petersburg in 2004 and Detroit in 2008), and the event was headlined by internationally-recognized experts in urban growth and vitality: Charles Landry, Rebecca Ryan, Richard Florida, and Bill Strickland, among others.

CCS-300x253  The event drew participants from across North America, but most of the attendees seemed to be from Lexington.  And while Lexington was not the central focus of the event, our city naturally entered into many of the conversations.

In the wake of the event, a vigorous local debate emerged about whether Creative Cities was significant for our city.  What’s intriguing is that much of the debate is occurring between folks who normally get along.  And much of the negative criticism is coming from folks that I like and respect (see here, here, here, and here), and who aren’t typically curmudgeonly.

That criticism has led to head-scratching – and, at times, indignance – from those who felt that the summit was a worthwhile, transformational, and enlightening experience.

And that leads us to an interesting – and telling – distinction: Most of the attendees of the summit seemed energized by the discussions and the ideas which emerged from Creative Cities; Most of the criticism came from those not in attendance.

* * *

There seem to be three basic criticisms of Creative Cities:

1. It was too exclusive.  This criticism usually centers around conference participation: who was invited, who wasn’t, and the perceived snobbery of some of the attendees.

2. It was too expensive.  This criticism focuses on the $199 registration, and whether the scholarships to the event were adequately publicized.

3. It was too much talk (and much of that talk was self-involved drivel).  This criticism takes multiple forms, including:

  • The conference was too self-involved and self-congratulatory, and prioritized self-help and good feelings over substantial change.
  • It glorified out-of-town gurus who repackaged the obvious while angling for their next consulting gig.
  • It didn’t involve enough meaningful action, and thus amounted to a vacuous echo-chamber of do-nothing happytalk.

As an attendee of the summit, I find a kernel of truth in all of these criticisms.  But I don’t think that any of them are completely fair, and none are particularly helpful in crafting a better future for Lexington.

I have to admit I’m not all that patient with the ‘exclusive’ or ‘expensive’ arguments.  Everyone was invited; everyone had a chance to participate.  While the price of the event was problematic for many, it was far cheaper than similar events with participants of this caliber.  Events like this cost a lot – and high-quality speakers, food, and facilities are necessary to draw a national audience.

What concerned me the most about these critiques was that the perceived exclusivity or expense of the event often became an excuse for dismissing the good ideas which arose there: A good idea is still a good idea, even when someone has to pay to hear it.

And if the criticisms of conference ideas are based upon bruised egos and hurt feelings, then I’ve got zero patience for that.

I’m much more sympathetic to the ‘too much talk’ reasoning.

Before I bought Lowell’s, much of my corporate life was spent in the company of very skilled consultants: research consultants, design consultants, business strategy consultants.

There was a predictable part of nearly every consulting engagement where the consultant would suggest that hiring them for another engagement was part of the solution to the problems we hired them to resolve – “The way you fix that is to hire me again!”.  Consultants always position themselves for doing more consulting.

We did get to see that angling-for-the-next-gig routine with some consultants at Creative Cities.

And admittedly, there was a little too much excitement over slick ideas and catch-phrases, and not enough thought about the hard work needed to truly transform Lexington for the better.

But that hard work isn’t what a conference is for: The summit was for learning and for exchanging ideas; the hard work comes after.

* * *

The structure of the conference didn’t help its perception – especially on Twitter – for those who didn’t attend.  In the process, I think some of the shortcomings of Twitter for civic conversations like these were exposed.

The most compelling (and, presumably, highest-paid) ‘keynote’ speakers addressed all participants at the same time.  For these speakers, attendees usually tweeted about the same inspiring messages, giving rise to the echo-chamber perception.

For instance, when Bill Strickland spoke at the end of the conference, many non-attendees mocked his ‘poor people should be considered assets, not liabilities’ line.  They seemed to say What fool would pay to hear something so blatantly obvious?

But Strickland had spent several emotional minutes demonstrating how attitudes, institutions, and architecture in his native Pittsburgh neighborhood treated poor people like liabilities.  At the same time, he had shown how he had successfully used beauty and light and architecture and respect to transform his home neighborhood by treating poor people like assets.

When those present tweeted the ‘assets’ line, they were truly moved and inspired by Strickland’s story and context.  Those outside the venue only saw vacant platitudes.

This same pattern repeated itself again and again throughout the other keynotes: The rich, compelling images and backgrounds and stories couldn’t traverse Twitter effectively; only the catchiest (and apparently empty) phrases made it out.

In between keynotes, there were 4 simultaneous breakout sessions.  While the breakouts weren’t as inspiring (or ‘tweet-worthy’), they were far more practical and hands-on about the mechanics of transforming a city for the better.  They were – for me – the most beneficial part of the conference.  I learned about:

  • Detroit’s strategies for reviving long-neglected neighborhoods, building-by-building and block-by-block.
  • How Toronto and Portland are funding and implementing inspiring, for-profit social innovation initiatives which pull people and neighborhoods out of poverty and make their cities more livable.
  • The model Massachussetts’ Creative Economy Director uses to get tangible economic development successes in arts, software, design, video games, and music.

From the discussions around my table, other Lexingtonians learned even more from the sessions I wasn’t able to attend.  We also talked with people on the ground in Atlanta, Des Moines, and San Antonio about their experiences in their cities.

Because I was so busy listening and taking notes, I was much less occupied with getting the word out on Twitter.  I saw this effect repeated with other attendees, as well.

So the resulting Twitter stream was decidedly biased in favor of the least-important, most self-helpy kinds of messages, while the deeper, more important insights went relatively silent.

And I think that is the source of the skepticism and derision from those ‘out-of-the-room’, while those ‘in-the-room’ were decidedly enthusiastic about how the event played out.

***

Will the Creative Cities Summit matter to Lexington?

It is far too early to tell.  It will take time, work, and discipline to realize the vision that many of us had leaving the summit.

Should the Creative Cities Summit matter to Lexington?

Absolutely.

Seeing the innovations that other cities have applied in improving their quality of life is vital as we attempt to build a better Lexington.  We need that kind of cross-pollenation with our own innovative initiatives to ensure the best possible future for us and for our city.

For those who feel as though we need a lot less talk and a lot more action, then mark this coming Saturday 17th April on your calendar.  That is when ProgressLex is hosting the Now What, Lexington? ‘unconference’ at the Carnegie Center in Gratz Park.

Now What? is explicitly geared toward generating tangible action from the ideas of the Creative Cities Summit.  Whether or not you attended Creative Cities, you should come to Now What? if you want to join with others to make Lexington better.

Now What? will be tweeted, too.  But it will be better if you show up.  As we’ve seen, Twitter isn’t always the most effective medium for conveying important ideas.

It is free.  Everyone is invited.  We’ll be doing things.  No excuses.

Read more of the continuing conversation about the Creative Cities Summit on Twitter with the hashtags #ccslex, #uncreatives, and #uncreativelex.  Read about the upcoming Now What, Lexington? unconference with the hashtag #nowwhatlex.  Full disclosure: Lowell’s is a sponsor of Now What, Lexington?

The Limits of Local

Rob Morris 10 Comments Ideas, Local ,

I am a strong proponent of ‘buying local’ – purchasing goods and services from local businesses to boost the local economy.  I made a case for Local First in our recent To-Do List for Lexington series late last year.

PB080070But I’m not a local ‘purist’.  There are times when buying local is just not practical.  And there are times when non-local competition creates a healthy diversity for local consumers (and providers).

So a recent Twitter discussion and this blog post got me thinking about the limits of ‘local’.  The tenor of these conversations was that a candidate for Lexington mayor [one that I personally support, by the way] was ‘disloyal’ to Lexington for using a Washington, D.C. firm to design the campaign’s temporary website.

These discussions echoed several earlier ones about the purchase of non-local services by our city’s government.

For me, the discussions raised an important question about buying local, especially with regard to public dollars and public figures:

Should buying local goods and services be a requirement or an aspiration for a political candidate?  For a local government?

The indignation of the writers seemed to imply that buying local goods was some sort of requirement – some sort of ‘litmus test’ for determining whether a candidate was good enough to run.

From my perspective, this line of thought leads to unreasonable conclusions about what disqualifies candidates (or what constitutes good governance).  For instance:

  • They can’t shop at Walmart.  Or Kroger.  Or Best Buy.  Or Home Depot.
  • They can’t eat at Chick-Fil-A.  Or Qdoba.  Or Five Guys.  Or Bonefish.
  • They can’t drive a Toyota.  Or a Ford.
  • They can’t drink Coca-Cola.  Especially the imported Mexican Coke with real cane sugar.
  • They must only drink Bourbon produced in Fayette County.  (And wait a few years until it is actually available.)
  • They can’t update their blog with an HP or Dell laptop.
  • They can’t tweet with their iPhone.  Or BlackBerry.  Or Droid.
  • They can’t watch TV produced in Hollywood.  Or New York.
  • They can’t use Microsoft Office.  Or Adobe Acrobat.
  • They can’t use Facebook.

In short: They can’t use any product or service which contains any non-local content.

Is such a list of prohibitions ridiculous?   Of course.

And that’s precisely the point: Requiring some sort of ‘purity’ in local purchasing creates an excessive, unreachable, and unproductive standard.

Buying local should be an aspiration – something we strive for, something we measure and attempt to improve, something we do more of.

Do we need our city, our political candidates, and our citizens to buy more local goods and services?  Should we actively encourage more purchasing at great local spots like Fáilte (profiled by Tom Eblen in yesterday’s Herald-Leader)?  Absolutely, on both counts.  That was why I wrote my original Local First post.

We should spend more of our money here in Lexington.  But forcing our city to spend all of our money here would stifle Lexington’s economy, and restrict us from being truly productive.

So let’s adopt a reasonable posture aimed at encouraging our leaders to buy local.