Tag: Economic Development

To-Do List for Lexington: 4. Embrace Openness

Rob Morris 6 Comments Local , , , , , , ,

(Part of the To-Do List for Lexington series.  Click here for an overview and links to the rest of the series.)

In January 2008, we were in early discussions to buy Lowell’s.  Since Lowell’s focused only on Toyota brands, I had a simple question: How many Toyotas, Lexuses, and Scions are in Lexington?

It seemed like a fairly straightforward question, and since the county and state kept vehicle registration records, it seemed like the answer should be easy to find – especially since Indiana freely published precisely the kind of data I needed, but not for Kentucky counties.

After trying internet searches and coming up empty, I contacted the Fayette County Clerk’s office, who referred me to the state Department of Transportation.  After a few more phone calls, I learned that I’d need to file a request under the Open Records Act, specifying the exact data that I would need.  I later found that I’d also have to pay $225 to get the data.

It all seemed so needlessly bureaucratic: It was public information, after all – so why wasn’t it more public?

What followed was 13 months of a couple dozen intermittent phone calls, a similar number of emails, maddening unresponsiveness, and inane forms (including a mandatory contract which required that I wouldn’t use anyone’s personal data, even though the data I requested contained no personal information – it was just counts of vehicles by county).

Finally, this past February, I got the report I needed.  Well, sort of.  It was in a file and format which was nearly useless.  And, we got it a full 7 months after we bought the business, so much of the urgency to get the data had dissipated.  Still, we eventually wrangled it into something we thought was interesting and informative, and published the results in early April as the Bluegrass Vehicle Report 2009.

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Bureaucracies often have a maddening, self-perpetuating logic wherein
the only purpose of the bureaucracy appears to be to maintain the
bureaucracy.  Laden with rules and restrictions, such organizations often turn their focus inward and forget their true purpose.  And rather than engaging with and serving their constituencies, they tend to serve the bureaucracy’s interests.

In the process, bureaucracies become tangled, closed, unmovable beasts which are hostile to the very people they are bound to serve.

Our vehicle data experience is, unfortunately, all-too-typical.  But it doesn’t have to be…

Lexington suffers from a bureaucratically-driven lack of openness (as does Kentucky at large).  And that lack of openness hinders our city’s economic, social, and political progress.

Lexington needs to embrace openness.

There are (at least) two ways in which we can create a more open city:

  1. By creating more open information and information systems
  2. By adopting more open approaches to how our city serves its citizens

Open Information
Portland, Oregon recently approved an economic development strategy which
directed the city to open its information to the public in a
structured, standardized format.  Portland is just one of the latest in
a fast-growing list of progressive communities who are opening their data to
their citizens.

MommapsPortland followed in the footsteps of San Francisco which – through DataSF.org – has created a clearinghouse of over 100 sets of up-to-date government data.  That data includes geographic information, crime statistics, transportation data, and measures of performance for key city departments.

By standardizing this data and making it easy to download, San Francisco has enabled software developers to create rich new applications.  In just a few months, this move toward openness has spawned several mobile applications dedicated to anything from getting around the city to spotting neighborhood crime trends to finding places to take the kids.  It has even created a showcase of these applications, encouraging both users and developers to make use of the open data.

Indiana – for many years – has offered incredibly rich datasets on a wide variety of the state’s data on Indiana University’s StatsIndiana site.

By sharing this data – even when it is uncomfortable (like the crime
data) – these places are enabling citizens to understand their communities better.  If the crime data highlights problems, so much the better – at
least citizens know what they are dealing with, and the community can
begin to address problems with knowledge and insight.

In short, these places are making their communities more livable, while simultaneously encouraging local entrepreneurs to leverage the data to create new applications and new businesses.

These places follow a few simple rules to create useful clearinghouses of data:

  • Data should be standardized into a structured, machine-readable format so that it may be easily imported into databases and spreadsheets for use with other applications.
  • Data should be updated regularly.  If possible, it should tap into data sources in real time.
  • It should cover the widest possible array of government information – statistics, contracts, spending, performance, etc.  (Don’t try to predict or direct what information will be needed – let citizens decide on their own.)

In addition, most of the places adopting open data standards are also standardizing on lower-cost open source software.  By adopting open source platforms like Linux (operating systems), Apache (web servers), MySQL (databases), and Ruby (software development), the cities are able to move away from expensive proprietary systems from Microsoft, Oracle, and PeopleSoft, while simultaneously tapping into a rich community of developers, applications, and support.

Lexington can and should learn from these cities.

From an economic development standpoint, this kind of open
information is crucial to business growth.  In Lowell’s case, vehicle
registration information would have been valuable for developing better, more informed business plans and strategies.  Such information is crucial to local businesses as
they evaluate market opportunities in our city.  It would be equally critical for businesses
who wish to locate in Lexington from the outside.

And, most important, having more complete, more open information would help Lexington make better, more informed decisions and have smarter conversations about our future.  For example, we could have better evaluated the closure of South Limestone:

  • How much traffic would be diverted to other streets?
  • How much congestion would that cause?
  • What are the environmental impacts of the increased congestion?
  • How much commuter time would be lost?
  • What are the costs to downtown businesses in lost customers, lost productivity, and lost services?
  • What are the tax implications of those business and commuter losses?
  • How did the bid process actually work?
  • What did the bid documents say regarding daily work schedule, incentives, and overall timeframe?

Some of these questions may have been answered inside the Lexington-Fayette County Urban Government (LFUCG), but those answers didn’t enter into the public discussions in a meaningful way.  If this data and these processes had been more open and transparent, the decisions made around the South Limestone project may have been very different.

Open Approaches
One of our most frequent critiques of LFUCG is the way in which it serves (or fails to serve) the interests of Lexington’s citizens and economy.

Nowhere is this more apparent than in the structure, timing, and conduct of LFUCG’s Urban County Council meetings, which seem designed to suppress thoughtful public discourse.

The council holds a bewildering array of meetings with a variety of purposes, but two of the most important meetings are held on Tuesdays at 3 PM or on alternate Thursdays at 7 PM. Depending on the agenda, citizen input comes either at the very beginning or very end of the meeting.  Each citizen is limited to three minutes to speak to council.  In fact, both citizens and council members are placed on a visible countdown clock to limit their discussion times.

This format poses a number of problems:

  • Participation.  Because of the timing of meetings, our ability to participate is restrained.  Most citizens have work or family obligations at 3 PM on a Tuesday.
  • Beat the Clock.  Generally, the three-minute limit and the countdown clock stifle thoughtful civic discussion on complex and nuanced issues like CentrePointe, underground utilities, or South Limestone.  This is especially the case under the iron hand of Mayor Newberry, who – whatever his other
    qualities as an executive – is a ruthlessly efficient timekeeper.
  • Timing.  Putting citizen commentary at the beginning or end of meetings divorces it from the council’s discussion of those topics, which comes in the middle of the meeting.  Thus, citizen input is placed at the margins of the discussion instead of in the midst of it.
  • Abuse.  The time limits, when coupled with parliamentary maneuvers, allow some council members to squelch the discussion when it goes in directions they don’t like.  One council member is so adept at using this technique – on citizens and on fellow council members alike – that it should be named “the Myers” in his honor.

Such scheduling and time-allotment rules are relics of the last century: They seem more at home in the 1950’s or 1850’s than in 2009.  And they are leftovers of a bureaucracy which has lost its way – squelching civic discussion rather than contributing to it.  Worse, it shows disrespect and disdain for the very citizens those rules are supposed to serve.

LFUCG should adopt more open – and more modern – approaches to debating issues and to gathering citizen input.

[Note: What follows is excerpted from an old post which we feel framed the issue best.  Sorry to self-plagiarize.]

In an age of websites, blogs, Twitter, and Facebook, every business has had to engage in conversations with customers on the customers’ terms.  The ubiquity of the internet means that these tools are available to nearly everyone, nearly everywhere.  The latency of the internet means that the conversations don’t have to happen at the same time – they can build over time.  The internet’s ubiquity and latency forms the foundation of a new and better town hall.

Why should we all have to cram into a room at the same time?  Why should we have to play ‘beat the clock’ when talking about issues which are complex and nuanced?  Why should we have to forgo pressing business or personal matters to attend a meeting which is designed to be convenient for our representatives?

The internet provides the perfect public forum for every citizen to express his or her public policy views, ideas, and thinking.  Even better, our ideas can build on one another as we tinker with and improve the ideas of our neighbors.  Plus, conducting civic conversations on the internet can happen around the clock.  Citizens can participate in the public discussion when and where it is convenient for them, not for the elected representatives who serve them.  Isn’t that the way it should be?

Further, every single representative should publish their conversations, thinking, dilemmas, trade-offs, beliefs and positions (and the transactions between them and other interested parties – like developers or investors or campaign contributors).  These records should be posted online for all citizens to see, comment on, debate, and improve.

The council members’ emails are listed on the city’s website, as are the mayor’s newsletters.  But these are old, closed, one-way forms of communication.  They aren’t vibrant community
discussions.

So, do I want to see tweets that the mayor’s advisor is picking up eggs?  Or a Facebook entry featuring the halloween costumes of the councilwoman’s children?  Not particularly.  But we
deserve to see real-time updates of their thinking on critical community issues.  We should know why they have changed their minds at the last minute.  They should tell us who they talked with and what they said.  After all, they are public officials.  We should see into a transparent civic machine which serves all of us.

What is clear is that a 19th-century civic apparatus has hamstrung our 21st-century community. The ancient contraption allows far too many secrets to hide within.  Whether our representatives and our governments use blogs, Twitter, Facebook, or some other platform matters far less than whether they start participating in open conversations with the people they serve.

The technology already exists.  Millions of people already use it. Thousands of your constituents use it every day.  It’s easy.  It’s free.  And it will make Lexington better.  What are you waiting for?

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Lexington needs to adopt open, transparent, and up-to-date approaches to serving its citizens.  Lexington should also provide open information about the city so that we all can make smarter, more informed decisions.

Our lack of openness impedes our commerce.  It impedes our democracy.  It impedes our path to a better Lexington.

Let’s change that.

Next: 5. Leverage Intellectual Capital

LowellsSquare

To-Do List for Lexington: 3. Local First

Rob Morris 5 Comments Local , , , ,

(Part of the To-Do List for Lexington series.  Click here for an overview and links to the rest of the series.)

When we spend a dollar in Lexington, what, exactly, happens to it?

It sounds like a silly kind of question, but it is actually quite essential to our city’s economic vitality.

When we spend money in Lexington, some of that money is extracted out of the local economy (going to other parts of the country or of the world), and some continues to circulate inside the local economy.  Whatever amount stays in Lexington is available to help fund other purchases, other jobs, other investments, and other businesses.

This is known as a “local multiplier effect”.  As each dollar reverberates through the local economy, as it is re-used over and over for other purchases or investments, its effect becomes larger than just a dollar.

So understanding where money goes and how much remains in the local economy is important as we craft a sound economic development strategy for Lexington.

And, to a great extent, how much remains in Lexington depends on where we spend it.

A study by Civic Economics looked at Austin bookstores and found that out of every dollar spent in a national chain’s bookstore, about 85 cents leaked out of the Austin economy.  That 85 cents “leaves” to pay national and international suppliers for the books, to distribute profits to owners (shareholders) around the world, to pay federal taxes, and to pay for support staff — marketing, finance, administration, etc. — located elsewhere.  The remaining 15 cents stayed in Austin (mainly in the form of local employee wages, local utilities, and local taxes).

When the study shifted its focus to a local bookstore, some interesting effects kicked in.  Because the owners were local, more profits stayed in Austin.  Because they used more local suppliers, more of that money stayed in Austin, as well.  The support staff was also local.  The net effect?  Out of every dollar spent at the local bookstores, 45 cents remained in Austin – 3 times as much.

MbsfrontdayIf we apply the same rates to Lexington, that means that $100 spent at, say, locally-owned Morris Bookshop (no relation to this author, by the way) turns into $145 as the initial $100 sale ripples through the local economy, and other businesses realize an additional $45 in sales.  The same $100 spent at, say, the Hamburg Barnes and Noble yields only $115 for the local economy.  Are these numbers absolute?  No – but they do provide a relative measure of the value of a local purchase.

How representative is a bookstore to the rest of the economy?  It depends.

Books are manufactured things, and they tend to be manufactured ‘somewhere else’.  That means that much of the money used to buy a book leaves the local economy pretty quickly.

If we look at businesses which produce goods or services with even more local content, then the money spent on those products tends to circulate through the local economy for much longer.

Here at Lowell’s, we did some back-of-the-envelope multiplier calculations.  Roughly half of our sales are goods (mainly car parts) and half are services (the expert labor of our technicians).

The parts side of our business works a lot like the local bookstore – most of our suppliers are local parts distributors, but most of their suppliers are national distributors who get parts from Japan or China.  So the money spent on parts at Lowell’s bounces around the local economy for a couple of rounds, but much of it eventually leaves Lexington because our parts are made overseas.

The services side of Lowell’s, however, is very different.  Because our ‘suppliers’ (employees) are all local, the majority of each dollar spent on services at Lowell’s circulates through the local economy for 3 rounds or more, with a little more leaking out of Lexington in each round.

Our rough estimate is that each dollar spent at spent at Lowell’s turns into at least 2 dollars for the local economy.

And we aren’t – by any means – the best example of a local multiplier.

Histpic7As the local content of goods or service ramps up, the multiplier compounds.  In some cases, the local multiplier could reach 5 or more: each dollar spent results in $5 recirculating through the local economy.

A great example of this compounding is Good Foods Market, a local co-op which sells a lot of locally-produced items.  That local produce often uses local labor and local inputs, and the multiplier compounds quickly.

We often hear the phrase “Buy Local”.  And it often sounds defensive or protectionist or even a bit naïve.  And sometimes it is.

But purchasing goods and services from local providers also pays hefty benefits for Lexington’s economic health.  And finding those local providers is relatively easy, with sites like Kentucky Proud and Local First Lexington providing useful directories of local products and services.

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Lexington needs to think ‘local’ first.

Because of the way local purchases supercharge our economy (through the multiplier effect), prioritizing local business investment and development should be a cornerstone of Lexington’s economic development strategy.

But it doesn’t appear to be.

Commerce Lexington – our local chamber of commerce – is also commissioned by the Lexington-Fayette Urban County Government (LFUCG) to marshal economic development efforts in our city.  More than any other organization, Commerce Lexington should understand the economic benefits of prioritizing local investments over external ones.

Looking through Commerce Lexington’s policy statements on economic development, they are filled with booster-speak – pushing incentives aimed at attracting new businesses (see our last post on why this strategy is deeply flawed).  And, we see nothing in those statements regarding prioritizing local business investment.

Other Lexington leadership seems to have overlooked the local multiplier as well.  LFUCG paid Vision Internet (based in California) $24,000 to redesign the lexingtonky.gov website.  Rather than injecting $48,000 into the Lexington economy (assuming a 2x multiplier) and helping sustain a local business, the city created a multiplier of 0 and drained
$24,000 from the local economy.

And the Lexington Convention and Visitors Bureau contracted with New York’s Pentagram to design the CVB’s ‘Big Lex’ logo.  Regardless of your feelings about the logo itself (we didn’t find it relevant), the CVB missed a big opportunity to contribute to Lexington’s own thriving branding-and-design community.  They could have created a compelling story by working with a bigger, award-winning local firm like Elevation Creative.  Or, they could have partnered with a smaller, growing local firm like Martin Design Studios (who crafted the crisp, clean new logo for Lowell’s).  Instead, CVB missed out on a chance to leverage local relationships to create a new logo and contribute to the community’s economy.

Some observers might (rightly) be concerned about the effects of nepotism or cronyism if the government (or their agents) were to award such contracts to local firms.  The “good ole boy” network is alive and well throughout the city, but there are ways to ensure local preference while simultaneously ensuring that taxpayers are not being fleeced.  Several progressive communities throughout the country have identified and adopted rules for local government purchasing which do just that if a local bidder is within, say, 5% of the best non-local bid.

Lexington should explore our options for implementing similar local-preference purchasing rules, so that our community may benefit from the local multiplier.

In any case, Lexington should make local business development and investment a cornerstone of its economic development strategy.

Next: 4. Embrace Openness

LowellsSquare

To-Do List for Lexington: 2. Stop seeking saviors. Start making them.

Rob Morris 6 Comments Local , , , , ,

(Part of the To-Do List for Lexington series.  Click here for an overview and links to the rest of the series.)

Last July, Florida Tile announced that it was relocating its
headquarters to Lexington from Lakeland, Florida.  Kentucky’s state
government made a $3.7 million capital investment to bring 25 new Florida Tile jobs to
Lexington.  Florida Tile estimates that the number of jobs may grow to as many as 51 in 10 years.  In October, Lexington’s Urban County Council dropped the occupational license tax for Florida Tile to 1.25% from the normal 2.25% – a benefit of up to $1.3 million over the next 10 years.

How will 25 (or 51) new jobs pay back the millions of public dollars invested in bringing Florida Tile to Lexington?  It is doubtful that they will.  And that points out significant problems with Lexington’s economic development strategy.

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In our last post (Get Real), we talked about the destructive effects of Lexington’s booster mentality, which couples a self-deceiving optimism with a compulsive need to look good to others.  Boosters often pursue expensive, highly-visible, ego-driven civic projects with the promise of vague future rewards.

The economic development strategy which springs from such boosterism is one in which a great deal of effort and capital is expended to attract outside commerce to Lexington.  So boosters promote big civic investments (events, buildings, infrastructure projects, or incentives) with the hopes that those projects will entice new companies to invest or locate here.  And the underlying assumption is that the firms we attract to Lexington will – eventually – pay back the investments of effort and capital.

But this kind of economic development strategy has a number of irredeemable flaws:

  • Waste.  Projects like the 2010 World Equestrian Games and CentrePointe are wildly speculative and profoundly inefficient ways to draw new commerce into our city.  And, when one looks at the numbers, it is doubtful that Florida Tile’s incentive package will pay back taxpayers over the next 20 years – if they stick around that long.
  • Loss of Power.  When we try to attract companies from outside
    Lexington, we cede significant negotiating power to the company we are courting.  That
    company can stay where they are, or go to a city other than Lexington.
    We are prone to enter bidding wars with other desperate cities in the
    pursuit of desirable ‘saviors’, and the process becomes a race to the bottom: Who can offer the most lucrative incentives and conditions?
  • Misguided.  These strategies pursue the wrong kinds of firms.  When we resort to incentives to, in essence, bribe companies to come to Lexington, what kinds of companies are we attracting?  Ones which are much more mercenary and which – by definition – have less investment in our community and its future than firms who are already here.  To be clear, every business should be concerned with improving  its bottom line.   But when public dollars are at stake, we must decide how to allocate those dollars based upon public benefit.  And underwriting mercenaries is not the best use of public funds.
  • Hidden Penalties.  The incentives granted to companies like Florida Tile disadvantage already-local firms.  Those local firms not only help pay for the new firms’ incentives through taxes, but they also don’t get the financial subsidies, new facilities, or extended tax advantages that are often granted to newcomers.

This economic development approach – attract outside saviors to drive growth – also ignores a vital question: Where are these firms coming from?

Or, put differently: How is it that such firms even have the capability to expand to a city like Lexington?  How did they grow?  What did their home cities do to foster that growth?  And, most importantly, why isn’t Lexington doing that to grow great businesses at home?

Lexington’s leaders frequently look to similar American cities in the attempt to understand how those cities have grown and how they have built a great quality of life.  If we look at ‘model’ cities like Austin, Madison, Portland, and Pittsburgh, we see a very different economic development model at work.

In fact, these cities suggest that the old booster model has it exactly backwards: Those cities invest in growth at home first, then outsider attraction follows.

Lexington should be asking a lot of questions about those cities:

  • How did they foster key industries at home?  (For instance, how did Austin nurture the development of vibrant economies around semiconductors, computers, and music?)
  • How did those cities redevelop key districts into vibrant contributors to their economic engines? (Think Sixth Street in Austin or The Pearl District in Portland.)
  • What specific approaches did these cities use to leverage their relationships with local universities to drive economic growth?  (Think Carnegie Mellon or University of Wisconsin.)
  • What infrastructural moves did they make to enhance the local economy? (Example: How did Austin Energy help the city save enough energy – even as Austin grew – to avoid building a new power plant?)
  • What did they do to nurture and promote the careers of key locals?  (Think Michael Dell in Austin or Rebecca Ryan in Madison.)

And then Lexington needs to take a hard look inward and think about how those lessons apply here.  For instance:

  • Who are Lexington’s Michael Dells or Rebecca Ryans?  How would we know?
  • What are the best ways to allocate economic development funds to cultivate growth in their businesses?
  • Which districts in Lexington hold the most promise for redevelopment?  What specific lessons can we draw from, say, the Pearl District redevelopment process?
  •  How can we leverage the University of Kentucky and Transylvania University as key resources for economic growth (and not think of them only as educational institutions)?

These cities suggest that Lexington should stop seeking external ‘saviors’, and instead focus on building up our city’s internal competencies and infrastructure.  Then, outsiders might find our city desirable without requiring huge ransoms.

Focusing on internal growth is, in fact, how cities like Austin, Madison, Portland, and Pittsburgh have fueled sustained growth over the past 20 years.  Lexington should follow their example.

Lexington should stop seeking saviors, and start making them instead.

How does that look?  Here are some initial ideas:

  1. Make targeted investments. Instead of, for example, throwing $80 million at the World Equestrian Games in the speculative hope that the investment will draw future commerce from outside the city, make smaller, more targeted investments in growing specific businesses with specific growth measurements and targets (jobs, tax revenues, etc.).
  2. Select target industries, and invest there.  Choosing particular industries will allow Lexington to develop self-reinforcing ecosystems around key technologies or competencies.  Lexington’s mayor has frequently touted the “3 H’s” strategy for Lexington’s economic development: Horses, health care, and high-tech.  These might be valid industries to target, but we’ve allocated precious little development resources toward those goals and seen precious little progress in those areas.
  3. Oversee development with sharp business intellects.  Typically, Lexington’s economic development has been overseen either by developer-driven boosters (Commerce Lexington) or by academics and architects (Downtown Development Authority).  Lexington needs to shift the balance to more entrepreneurial businesspeople who have experience in business growth and who understand which business models work and which don’t.
  4. Prioritize business investment over infrastructure investment.  Projects like streetscapes and buried utility lines, while pretty, will contribute relatively little to Lexington in the way of tangible jobs or revenues.  And attempts to financially justify these projects frequently cross into sheer booster speculation about making better impressions.  Instead, we should focus on cultivating growing businesses and directly creating jobs and revenues with our development funds.
  5. Think “local” first.  Supercharge our investments by prioritizing local businesses before external ones.  More on this in our next post in this series.

Rather than spend hundreds of millions of dollars on hope and
speculation, we need to make smarter, more targeted investments with our public development dollars.  We need to run the business of growing our city like a business.  Anything less is a waste of our time and money.

Next: 3. Local First

LowellsSquare

To-Do List for Lexington: 1. Get Real

Rob Morris 5 Comments Local , , , ,

(Part of the To-Do List for Lexington series.  Click here for an overview and links to the rest of the series.)

Lexington suffers from a booster mentality.  That mentality dictates that we must constantly paint our city in the most favorable light.  And, often, the booster mentality buys into its own hype: “Everything is great; Everything is wonderful; No problems here!”  Boosters often champion ego-enhancing feel-good projects with questionable economic value.

The trouble with such unrelenting optimism is that it frequently crosses into rampant self-deception.  When things are going badly, the booster cannot admit it; Doing so would destroy their carefully-constructed mental image of the perfect city.

The booster mentality partly stems from wanting to look good for others, for outsiders.  And, from an economic development standpoint, boosters look to attract commerce (businesses) from outside the city.

The trouble with such primping and preening is that an obsessive amount of effort is spent on cosmetic rather than substantive improvement.  By spending so much time trying to look good for the outside world, boosters often neglect very real problems at home.  And their self-deception means they have trouble even acknowledging the existence of such problems.

Boosterism takes a number of  forms, but follows a pretty standard recipe:

  1. Hold out the promise of a vague future reward
  2. Leverage that promise to justify current sacrifices
  3. Question the patriotism, loyalty, intellectual ability, credibility, and / or intentions of all who question either the extent of the reward or the merit of the sacrifice
  4. Never, ever admit that maybe the reward wasn’t worth the sacrifice

We see this all over town.

With CentrePointe, there was the promise of the state’s tallest building, containing a J.W. Marriott and a fictionalized Hard Rock Café.  Lexington would have status.  If it meant destroying some historic buildings and taking some gigantic leaps of faith, so be it.  And, if folks make too much of a fuss over the historic buildings, marginalize them and the block the buildings stood on.  And never, ever admit that the whole speculative venture was a mistake.

With streetscape projects, there was the promise that we’d look good for our out-of-town visitors while the world’s eyes were upon us during the 2010 World Equestrian Games (WEG 2010).  By looking good to the world, Lexington might be able to attract more tourists. Or maybe businesses.  Or something.  If it means severing the most significant southside artery (South Limestone) for over a year and losing some downtown businesses along the way, so be it.  And, if folks make too much of a fuss over the cost ($88 million), dismiss their calculations without offering any of your own.  Or use silly diversionary tactics like forcing them to remove their logos from key presentations.  And never, ever admit that the project’s execution and timing were poor.

Sport is a common justification for such development projects.  For the promise of “major league status”, cities have destroyed historic neighborhoods or paid huge ransoms to attract (or keep) a major sports team or event (such as the Olympic Games).  Boosters cite the added visibility and prestige that comes with such status as justification enough.  But most such “investments” rarely pay off.

With WEG 2010, we have such an example of sports-led economic development right here at home.  And the promise of the world’s attention and the event’s prestige have become their own rationale for action – without regard for whether such action is truly justified by a real-world reward.

Boosters assert that today’s torn-up streets, empty blocks, disrupted commerce, and vast new facilities – often paid for with tens of millions of public dollars – will all be worth it…

Someday.

They hold out the vague and unmeasured promise of future visibility, prestige, tourists, businesses, investments, and commerce.  In the meantime, they drain significant economic vitality from the city while pursuing future attention and dollars.  But the boosters of CentrePointe, streetscapes, and WEG rarely do a realistic accounting of the true value (or value destruction) of their ventures.

In essence, boosterism is an incredibly expensive and inefficient form of untargeted advertising: Hundreds of millions of dollars thrown at the rest of the world in the faint hope that someone – anyone – will throw some of it back into our economy.  And, as we’ve written before, Lexington needs to focus less on advertising and promoting how great it is and focus more on actually being great.

Lexington needs to get real.

We need to get real about which community investments will actually pay dividends.

We need to get real about what is wrong (and what is right) with our community and about what it will take to craft a better Lexington.

We need to get real about the destruction wrought by unbridled boosterism.

Getting real isn’t about ceasing to support our fine city.  It isn’t about becoming negative – ‘nay-saying’ every project or bad-mouthing Lexington.

It does mean that we start openly discussing and debating the merits and shortfalls of the investments our community makes.

Only by acknowledging that we have significant problems can we begin to wrestle with them.  I’ve written before that Lexington is too polite.  In conversation, we are so indirect that we avoid confronting our difficult issues.

But we must.  We must begin to engage and debate our city’s future.  We must get a full accounting for the folly, waste, and fraud which accompanies such unbridled boosterism.  We must redirect effort and attention from this
glamorous-but-questionable boosterism to projects and investments
which, while far less ego-boosting, will yield tangible economic
benefits for our city.  And we must get real about the present state and future possibility of our city.

And getting real is what the rest of this series is about.

Next: 2. Stop seeking saviors. Start making them.

LowellsSquare

To-Do List for Lexington: An Overview

Rob Morris 11 Comments Local , , , , , ,

On November 8th, this blog will turn turned one year old.  It has been an interesting year, and the blog has turned into something very different than what we initially conceived.

One of the surprises: how much we ended up focusing on issues and ideas of local interest, especially those related to downtown Lexington.

We’ve not been shy about offering our opinions on CentrePointe, on South Limestone, on Lexmark, on our local government, and on the future of our city, just to name a few.  And you’ve not been shy in offering your (often very different) opinions in return.

We believe that Lexington is a really great city.  But we also believe it needs to be much better.  And we’ve got some ideas on how to get to that better future.

So, as we end our first year of blogging, we thought it might be good to put together an agenda for our city.  Over the next several posts, we’ll share ideas on improving Lexington.  Some will be ideas we’ve touched on before; some will be brand-new.  We’ll focus a lot on our city’s economic and urban development.

As we build out this list over the next week month or so, please add your thoughts and comments.  We believe that an open discussion about our city is vital to crafting a better future for Lexington.

So think of this series as a conversation-starter.  Think of it as a love letter to what our city could be.  Think of it as the rantings of your local mechanic.

Think of it as a to-do list for Lexington.

To-Do List for Lexington

  1. Get Real (11/2/2009)
  2. Stop seeking saviors. Start making them. (11/3/2009)
  3. Local First (11/4/2009)
  4. Embrace Openness (11/6/2009)
  5. Leverage Intellectual Capital (12/3/2009)
  6. Be Original (12/3/2009)
  7. Plan Well (12/9/2009)
  8. Demand Accountability (12/14/2009)
  9. Do! (12/15/2009)

Postscript (12/15/2009)

This series is dedicated to my son, Carson, and to the future Lexington that he and his generation will inherit.

LowellsSquare

What presenting to LFUCG is like

Rob Morris 4 Comments Local , , , , , , ,

Prologue
It all started with a testy weekend exchange on Twitter with LFUCG council member Doug Martin.

That Twitter exchange started with me posting multiple sarcastic complaints about traffic and then morphed into a conversation on leadership.

Throughout the day on Friday, I saw a series of ‘tweets’ on how bogged down Lexington’s traffic had become.  As new street closures on West Main Street and Old Frankfort Pike were added to the long-term closure on South Limestone, traffic in many parts of the city came to a standstill. This was exacerbated by a multi-vehicle wreck on Versailles Road Friday night. Essentially, the entire west and south side of Lexington was impassable.

I then made my sarcastic assessment of the chaotic state of our streets.

Without going into details, CM Martin objected to my flippant tone, and urged me to complain less and lead more.  It was a point that he reiterated as other folks jumped into the conversation throughout the weekend.  I pulled back from the discussion – stewing a little that CM Martin felt I wasn’t leading already.

I should clarify that Doug Martin is one of my favorite council members.  He’s engaged and approachable – by far the most active Twitterer in LFUCG – and he genuinely wants more citizen participation and a better city.  Although he and I frequently disagree on specific tactics that we should use as we approach the important issues in Lexington, I feel that we’re on the same team.

But as the weekend progressed I couldn’t get over how he seemed to think I wasn’t a leader.

::

Preparation
As I stewed about the conversation with CM Martin, I was simultaneously stewing about the state of our city’s traffic.

I have written a few times about the streetscape project and the resulting impacts to downtown.   Most recently, I wrote about the “true costs” of the South Limestone project – lost customers, lost productivity, lost services – and estimated the total loss of business to be between $84 and $92 million, far in excess of the approximately $17 million being spent on construction.

Meanwhile, there seemed to be no sense of urgency at LFUCG about accelerating the project.

On Monday, I learned that the next LFUCG work session included a “Downtown Streetscape Update” on the agenda.  I decided that I would make a presentation on my findings – and perhaps demonstrate some “leadership”.

Trouble is, I had never even been to council chambers, let alone participated in a meeting.  I asked my informal network of friends on Twitter, email, and South Limestone what I needed to do to make a presentation at the beginning of the session.

And the responses I got were great, but a bit intimidating.  I only had about 24 hours to get my act together.

Citizens are only allowed 3 minutes to comment on issues on the agenda.  But other citizens can donate their time.  I figured that I had at least 10 minutes worth of material, which would mean that I needed 3 (or more) other folks to donate their time to me.  Everyone has to sign in before the 3 PM meeting starts.  Getting 3 other people to come to council chambers at 3 PM on a Tuesday is a daunting task.

At the same time as I was searching for supporters, I was also trying to throw together a presentation.  I am a presentation perfectionist – I like to have every slide “just so”, and I want to know precisely what I’m going to say with each slide.  (I’m the same way with writing, by the way.)  Normally, crafting a presentation that I am happy and comfortable with takes a week or more.

But I had one day.  Time to buckle down.

By early Tuesday, I had only one other person committed to showing up, giving me a grand total of 6 minutes.  I was beginning to think I’d have to miss this opportunity to present to council.  As I was preparing the presentation, I was also mentally noting the parts I’d have to slash if I didn’t have enough supporters donating their time.

But as my network kicked in on Tuesday afternoon, I saw that I’d have at least 12 minutes.

With that, I “locked in” the content of my presentation, and downloaded a few different versions of it to a thumb drive.  I didn’t know which version of PowerPoint to bring (PP 2003 is the best bet).  I also didn’t know if I’d have control of the ‘clicker’ to transition between slides (it turns out that I did).

::

Presentation
I showed up to city hall at about 2:45 PM, hoping to see my “supporters”.  I checked in at the front desk by giving them my driver’s license and getting a visitor’s badge (a sticker, really).  Then, one by one, I started to see the other folks who were donating their time to my presentation.  There were 4 others, which should have given me 15 minutes – more than enough time for what I had to say.

I gave my thumb drive to the LFUCG’s technical coordinator, and had a moment of panic – the thumb drive had an “autorun” file on it which the LFUCG computers saw as malware.  I was starting to look like I couldn’t even load up the presentation.  After a reboot, we were able to transfer it, and the coordinator showed me the way to navigate through my presentation while up at the podium.

Mayor Newberry started the work session at 3 PM (sharp!), and public comment (for items that are on the agenda) is usually the first item.  But Tuesday was also the day that council recognized Lexington’s Junior Fire Chief, and so council made time for that first.

Then, it was time for public comment.  Mayor Newberry called my name and, as I approached the podium, he mentioned that I had 12 minutes.  My mind scrambled a bit, as I tried to figure out where the other 3 minutes went.  Did someone not sign up?  Did they do so incorrectly?  Since I didn’t know, and since I designed the presentation for about 10 minutes, I decided to go ahead without making a big scene.

I was atypically nervous as I approached the podium.  I’m normally a pretty confident public speaker, but I was shaking.  What was that all about?

I’ve been suffering from a cold for the past few weeks, and the constant coughing has meant that I haven’t been sleeping well.  On top of that, I didn’t feel fully prepared – I didn’t have every detail down pat.  Then, there was minute-gate.  And, finally, when my presentation showed on screen, it jumped ahead a couple of slides.

Streetscapes

View more documents from Rob Morris.

Then, I started talking.  My voice wavered a bit.  As I got a couple of slides in, I started to feel my normal presentation rhythm.  I usually flip through 6 to 10 slides per minute, and I was starting to get into the flow of the presentation.  And, yet, I was still shaking…

For the most part, the presentation flowed as I planned.  For the most part.  The least well-thought-out section (the one where I shared my Twitter conversation with CM Martin) was where I temporarily lost track.  I struggled for what seemed like an eternity, and then finally got control of the presentation again.

In the process of bungling that one section, I fear I may have given the unfortunate impression that CM Martin was some sort of “bad guy” in the South Limestone closure.  He most certainly isn’t.  (Sorry, Doug.)

As I approached the end of my presentation, Mayor Newberry interrupted me.  “You have 30 seconds.”  I felt like asking if I got more time because of his interruption.  But I knew that I had only 9 more rapid-fire slides, and I knew what I was going to say, so I charged ahead, wrapping up the presentation before he could interrupt again.

GTV3 Video of Presentation (My presentation starts to 6m 30s).

::

Post Mortem
As I sat down, a few of those around me quietly praised the presentation.  Mayor Newberry called the next speaker – who was actually one of my “supporters”.  So I could have had 15 minutes after all.

As the council transitioned to their business, it wasn’t at all clear that my presentation had any impact.  After I finished, there was no further discussion of South Lime, and no questions for me.

I knew I had some good points, but it wasn’t clear that any of them had connected with the council members.  Then, several minutes after my presentation, CM Diane Lawless came by and told me how well I did.  But Diane is such a nice person that I wasn’t sure her sentiments reflected the council as a whole.

When the “Downtown Streetscape” item finally came up on the agenda, CM Lawless ripped into the way in which the South Lime portion was executed.  And then, an amazing thing happened.  One by one, previously staid council members chimed in with comments about the urgency of accelerating South Limestone.

First, CM Kevin Stinnett made a motion for getting an update on what it takes to speed things along.  Seconded (loudly) by CM Lawless, I then watched as CMs Jay McChord and Julian Beard reiterated their support for the motion.

In the end, the presentation did connect with a large portion of the council, and – next Tuesday – the issue of jump-starting the South Limestone project is back on the docket.

GTV3 Video of Presentation (Council discussion starts at 1h 33m.  Takes a while, but it gets interesting).

The True Cost of South Limestone

Rob Morris 7 Comments Local , , , , , ,

The South Limestone streetscape project began with the closure of South Lime two months ago today, and the project is slated to continue for another 10 months.  Meant to better connect downtown with the University of Kentucky campus, the project includes the widening of sidewalks, the installation of bike lanes, and the underground placement of utilities.

When the project started, we wrote about the chaotic process of closing the street and about the need for practical planning and design on South Lime and other urban development projects.  How has the project evolved since then?

Not well.

Severed Artery
The closure dramatically impacted traffic patterns between downtown Lexington and the south side of our city, resulting in gnarled traffic on a number of alternative routes to downtown.  At various points in the project, intersections with cross-streets (High, Maxwell, and Euclid) have also closed with little notice, adding to confusion and gridlock for downtown commuters and shoppers.  In effect, the closure of South Limestone has walled off downtown from Lexington’s south side.

Several businesses along South Lime have struggled to cope with the substantial loss of customers and the physical disruption of their businesses.  Last week, Joe Graviss, the owner of the McDonald’s on South Lime, pleaded with Lexington’s Mayor and Urban County Council to add extra shifts or more workers to speed the project.

City officials responded that extra shifts will not accelerate the project.  The project’s manager noted that the city’s concrete supplier closed in the evenings and that local utilities were already providing personnel to assist with the location and relocation of utility lines.  At one point, he admitted that he had no ideas for speeding the South Lime project along.

Vice Mayor Jim Gray – the CEO of Gray Construction and the only councilmember to oppose the project – countered the project manager’s claims.  “It would be wise of us not to be extravagant in describing the difficulties of this project…  With 2000 projects under my belt, I’ve never seen a project that couldn’t be improved or accelerated.”

At this point, most elected leaders and city bureaucrats seem unprepared to take significant action to accelerate the South Limestone streetscape project.

That’s because they have been thinking about the impacts of South Lime on the wrong scale.

Estimates on the price of the South Lime project vary, but the early $5.2 million estimate has ballooned to somewhere between $13.1 and $17 million.  The newer, higher price was partly meant to help expedite the project.

But, as we’ll see in a moment, that price far underestimates the true cost of the project to our city, our economy, and to our future.

South Limestone’s closure is not a mere inconvenience – it is a severed artery that is bleeding the life from downtown.  It demands an urgent response from our leaders.  The cost to the city is too
dear to delay action, especially in this difficult economy.

Disruption: Anecdotes and Hard Data
A number of weeks ago, on the first day that the High Street intersection with South Lime was closed, I worked in my office and overheard two different customers from the south side of Lexington talk about the enormous problem of getting to our downtown shop – the confusion from suddenly closing the High Street intersection had made traffic especially difficult to decipher.

Then, we had an elderly customer from Nicholasville make an appointment for the next day, asking for directions on how to get to the shop with all of the construction.  Concerned about getting lost, she decided to do a dry run the day before.  After experiencing the jams, diversions, and delays, she called back and canceled her appointment.

Last month, I talked with another downtown business who is in our same industry.  They were scratching their heads about why their August business “fell off a cliff”.  I talked with them again last week, and their business was still much slower than usual.

Yesterday, a regular customer who owns a shop in Festival Market came into Lowell’s and opened the discussion with a flat “Business sucks”.

When I started hearing these anecdotes, I began to think that the impacts of the South Limestone closure extended far beyond South Lime.  I wondered about the effects of South Lime as a customer deterrent for our business:

  • How many of our customers come from the south side of Lexington?
  • How many of those south-siders might have chosen to stay away from “the mess” downtown?
  • What could that data tell us about the impacts to all of downtown Lexington?

And what I saw in the data was astounding and troubling:

  • About 30% of our customers come from ZIP codes which would use Nicholasville Road (which turns into South Limestone) as the primary corridor to downtown
  • Since July 22nd – the date of the closure – we have lost one third of the business we’d normally expect from those ZIP codes.  By comparison, the rest of Lexington is relatively flat or growing.
  • The net of this was a loss of 10% of our sales (and a much bigger hit to our profitability) directly attributable to the South Lime closure.

I disclose these facts not as a woe-are-we pity party, but as a fact-based assessment of how “the mess downtown” affects one downtown business.  Our business is a relatively healthy, well-respected business with incredibly loyal customers (Last week, we won “Best Honest Mechanic” from Ace Weekly readers).  And, still, the closure of South Limestone accounted for a loss of a full third of south-side customers.

Ripple Effects
Can we extrapolate from just one business to the whole of downtown?  Not with any degree of certainty.  But my conversations with other business owners make me believe that my business’ experience with the South Lime closure is not exceptional.  Admittedly, not every downtown business is as impacted by traffic disruptions, but most are impacted in some fashion: lost customers, lost productivity, supply chain delays, etc.

Hard data for downtown Lexington is difficult to come by.

  • Just how much of Lexington’s $11 billion economy takes place downtown?
  • Which businesses depend upon the smooth flow of traffic?  To what degree?
  • How many of their customers / employees / suppliers come from the south side?

Depending on the assumptions used, the estimate of impacts to downtown can vary wildly.  Our best “conservative” estimate?  Downtown Lexington loses about $360,000 each business day that South Limestone is closed.  (Depending on our assumptions, the estimates ranged between $275,000 and $600,000 each day.)

That translates to between $7.0 to $7.7 million in lost business every month, or between $84 and $92 million for the year-long duration of the South Limestone project.  That’s around 700 to 1000 jobs which could evaporate from downtown Lexington, especially as the closure drags on.

Are these numbers absolute?  Not by any means.  But they do provide a ballpark idea of the true cost of the South Limestone project.

Much of the focus on the costs of South Lime have focused on either a) the direct taxpayer costs ($17 million) or b) the costs to businesses on South Lime.  And while those South Limestone businesses deserve special attention for the degree this project impacts them, our estimates suggest that our leaders and our community have been thinking about ‘cost’ on the wrong scale.  There is a much bigger, much more urgent cost which must be addressed.

The irony of South Limestone – as the cycle of lost customers, declining businesses, lower employment, and more lost customers continues – is that the project may well end up strangling the very downtown that the streetscape is meant to connect with.

Our leaders frequently assert the necessity of a vibrant, livable downtown.  It is time for them to live up to their words.

With the South Limestone closure, they must now choose: Will they continue to choke off downtown from a significant portion of the city, or will they act with urgency and extraordinary effort to accelerate and improve the project?

Their actions now will determine whether the prediction from our Chaos post will come true:

“And the results of the chaos are easy to predict.  Confused commuters and shoppers stay away from ‘the mess’ downtown.  Downtown businesses die.  And, after fits and starts, Lexington ends up with a beautiful street.  To nowhere.”

Time to choose.

LowellsSquare

Pretty to Gritty: Thoughts on Lexington Streetscapes

Rob Morris 2 Comments Local , , , ,

Last week, Lexington’s Downtown Development Authority held a “Downtown Improvements Public Forum” to share plans for renovating streetscapes along Limestone, Cheapside, Vine, and Main Streets.  (Controversial renovations on South Limestone are already underway.)  More ‘open house’ than ‘forum’, the lead agency for DDA’s plans, Kinzelman Kline Gossman, had ringed the room with posters showing artists’ renderings of what the streetscapes would look like and detailing guidelines for street and sidewalk construction. (Large PDF of the DDA streetscape plan here.)

Walking through the door, there was a telling moment.  There was an artist’s rendering of what South Limestone would look like after the streetscape project was finished.  It was beautiful.  Except that it wasn’t South Limestone.  The lone rendering of a South Limestone streetscape, while pretty, included non-existent buildings and storefronts.

South Limestone Rendering

Throughout my career, I’ve had the opportunity to manage relationships and to interact with numerous creative agencies: design firms, ad agencies, industrial designers, consultants, and the like.  I’ve had many opportunities to witness their creative processes at work.  I’ve also seen the common pitfalls of such creativity.  And Wednesday’s open house struck a familiar chord.

One of the most common pitfalls of creative work is to focus disproportionately on ‘the pretty’.  ‘Pretty’ is creative work in its purest, most idealistic form.  Pretty designs are often, as their name would imply, beautiful and inspiring.  And as long as inspiration is their primary goal, pretty designs can be useful.

But too often, pretty designs are seen as some kind of end point in the creative work.  After producing a a creative product, the agency – or, worse, their clients – see the work as complete.  They frequently choose not to get ‘dirty’ with the unglamorous implementation of the project.  Many design firms see implementation as too mundane, too pedestrian.  In their view, they should focus on the pure ‘art’ of their creativity; it is then up to the engineer, the website coder, or the construction foreman to do the arduous task of making the project match the pretty design.

And that is precisely the problem with pretty designs.

When the pretty design meets schedule constraints or cost constraints or other real-world constraints, it can fall apart.  When the engineer or construction worker runs up against physical realities, the pretty design often gets severely compromised, and becomes something considerably less pretty.

While pretty creativity gets accolades and awards, it usually only accounts for a small fraction (I’d guess 5 to 10%, based on my experience) of the real creative work on a project.  And that real creative work is what I would characterize as ‘gritty’ creativity: the practical, streetwise, action-oriented creativity which actually drives the project forward and finds creative solutions to real-world problems.  The success or failure of complex projects depends in great measure on how much ‘gritty’ creativity is employed within those projects.

The disconnect between pretty and gritty is the most common cause of failure in creative projects.

What I saw at the DDA’s forum was an abundance of stylistic and architectural details.  They had detailed guidelines for how to design intersections and sidewalks.  They had beautiful renderings of what downtown streets could look like after the designs were applied.  They had very pretty designs for the future of our downtown.

But what was missing from the forum was any substantial gritty design work for the actual execution of the project.

In the wake of the uncoordinated and under-publicized closure of South Limestone for streetscape improvements, I – and many others in attendance – expected many more practical, gritty details about how the rest of ‘Phase I’ (Cheapside, Vine, and Main Streets) would be implemented.  Indeed, I had also hoped to find out more about how future phases would affect my business and those of my neighbors on North Limestone.

The disconnect between ideal (“the pretty”) and implementation (“the gritty”) was troubling: Could we be headed for another South Limestone?

In the South Limestone closure, many businesses seemed to have little time to prepare for losing a big chunk of customers for a year or more.  Commuters had little time to adapt to drastically altered traffic patterns.  While the city made some public parking available, that parking was a pedestrian-unfriendly 4 to 5 blocks away from some of the affected businesses.  In short, South Limestone needed some gritty design for the implementation and coordination of the project.

The pretty planning for downtown streetscapes has been underway for years.  But real-world work on Main, Vine, and Cheapside is slated to begin in just 3 to 4 months.  This short timeframe creates added urgency for understanding how the rest of the streetscape project will really work.  And the utter lack of gritty planning details in last week’s meeting makes answers to the following questions even more important.

  • Could all three streets, as with South Limestone, be completely closed?
  • Which sections of which streets will be closed?  For what periods?  What is the planned sequence of closures?
  • When can each business on the affected streets expect their businesses to be interrupted?
  • How long will such business interruptions last?  What will those interruptions look like?  Where will they be most severe?
  • How can we accelerate the project where business interruptions will be most profound?
  • Can we sequence closures around business cycles?  Could retailers be least affected during the holiday shopping season?  Could work near outdoor cafés be completed by spring?
  • How will the city or DDA assist businesses during the closures?  How will such assistance be more effective than what was done for South Limestone?  Targeted ad campaigns?  Special events?  Shuttle services from parking garages?
  • Will drivers need to find alternate routes (as with South Limestone)?
  • What are the likely sources of project delay?  How will those be mitigated?
  • What, precisely, are the future phases?  When are they slated?

To avoid the chaos that accompanied the South Limestone closure, the DDA and the city must begin mapping out the gritty planning of how this project gets executed.  And simply throwing such vital details to a construction contractor isn’t acceptable.

The streetscape project is certainly a pretty design.  But, if it is to be a successful urban development project – if it is to help us build a better, more vibrant city – then it must get much more gritty as well.

LowellsSquare

Chaos: South Limestone Closure Lawsuit Details

Rob Morris 3 Comments Local , , , ,

When we initiated LexMobs to help businesses on South Limestone on Wednesday, we noted that the closure of the street seemed hasty and poorly-planned.  Well, now we’ve obtained the Fayette Circuit Court filing from a lawsuit intended to stop the work on South Limestone (first reported by Jake at Page One Kentucky).

And that filing reveals just how chaotic the closure process actually was.

Filed by the owners of several businesses and properties lining the route, the lawsuit seeks an immediate injunction to halt the roadwork and to reopen South Limestone to traffic.  It also seeks damages for the interruptions to business operations along the street.  The suit names the Mayor, LFUCG Urban County Council, and ATS Construction (the firm contracted to renovate SoLime) as defendants.

And the filing tells a story of a poorly-communicated, hastily-assembled, highly-inconsistent project with an escalating price tag:

  • Communication.  Initial letters from the LFUCG Public Works Commissioner to the affected businesses invited them to a open house to discuss “a streetscape design” and “utility needs”, but didn’t indicate a complete road closure was immanent. The actual details of the project (and of the changes to the project) were usually disclosed to owners through rumors or media accounts.
  • Timing.  Owners had six days’ notice before the first open house (May 18th), and there was no mention of a road closure.  A second “utility needs” meeting was held on June 3rd, and the full closure of South Limestone was disclosed.  But some owners didn’t learn of the possibility of closing SoLime until the day before; The letter announcing that meeting didn’t mention closing the street.
  • Consistency.  In June 3rd discussions, South Limestone was to be closed from Euclid to High.  After voicing opposition, property owners were told on July 10th that SoLime would initially be closed from Euclid to Maxwell, opening up a full block between Maxwell and High Streets.  On July 21st – the day before the project began – owners learned from media accounts that SoLime was now to be closed all the way to High Street again.  That day, owners met with the Mayor and others from LFUCG to learn that ATS and LFUCG won’t know what they’re dealing with until they dig up the street.
  • Price.  The “Downtown Streetscape Master Plan” proposed improvements to South Limestone costing more than $5.2 million.  The LFUCG council approved the streetscape plan in August 2008.  On July 7th, 2009, the council approved the $13.1 million contract with ATS.  Two weeks later, media accounts put the total at $17 million.

The patterns emerging from this (admittedly one-sided) account of the closure of South Limestone parallels with what we’ve seen recently from LFUCG on urban development projects:

  • Projects languish for years, then are suddenly initiated.
  • Decisionmakers seem to have little sense of the full scope or true impacts of their decisions.
  • The true impacts of the project are only understood, if ever, after it is long underway.
  • Communication with citizens is unclear, intermittent, and/or non-existent.
  • The project changes direction suddenly.
  • It is unclear who is accountable for the success or failure of such projects
  • Because they are so committed to the (frequently noble) idea of the project, decisionmakers accept a series of concessions which cause the project’s price to balloon to multiples of original estimates.

We’ve seen some or all of these elements in numerous recent urban development projects: CentrePointe, Tax Increment Financing (TIF), the Lyric Theatre, the Newtown Pike extension and, now, the South Limestone Streetscape.

What results is chaos.

Business owners on South Limestone had 2 months to prepare to lose customers for 12 months.  Many owners had one day to figure out how to get customers and suppliers to their door.  The cost of the project is 3 times what was initially approved.

And the results of the chaos are easy to predict.  Confused commuters and shoppers stay away from “the mess” downtown.  Downtown businesses die.  And, after fits and starts, Lexington ends up with a beautiful street.  To nowhere.

Chaos is no way to run a business.  And chaos is no way to run the business of our city.

LowellsSquare

LexMobs on South Limestone?

Rob Morris 5 Comments Local , , , ,

The South Limestone streetscape project gets underway this morning.  Using Twitter, Lexington’s Mayor announced that the closure will result in traffic delays of up to 45 minutes.

From a public point of view, the closure seems hastily and poorly planned, although the promised streetscapes look wonderful.  The project stems from a noble goal: to better connect the University of Kentucky campus with downtown Lexington.

But businesses lining South Limestone (SoLime) had little time to adapt to the closure, and I wonder how many can survive being starved of traffic for so long.  When Lexingtonians realize that there is a “mess” surrounding SoLime, they will stay away in droves.  (With a business just off of North Limestone, I’m concerned about the disruptions to our southside Lexington customers making it in to Lowell’s.)

There are a lot of great businesses along SoLime that would be a shame to lose: Sav’s, Pazzo’s, Tolly Ho, Failte, Sqecial Media, and many, many others.  Some (maybe all) of these are Lexington institutions.

How long could they operate without significant customer patronage?  How long could they retain employees?  How long can they make debt / rent payments?  How long can they pay bills?  How long can they survive?

So, here’s a challenge for our readers: Let’s go out of our way to demonstrate that we care about those businesses.

Beginning today, and continuing through the next month, let’s pick one or two businesses to “flash mob” each day.  Let’s get together to show, with our feet and our wallets, that we want those businesses to survive.  Let’s show up.  And eat.  Or buy.  Or drink.  Let’s refuse to let these businesses fail.

If our LexMobs get too big, that’s OK – I’m sure that the plentiful nearby businesses would also love some of our overflow business.

Will this effort be well-organized and well-thought-out in advance?  Not a chance.  Will it be messy?  Yes.  Will it be chaotic?  Absolutely.  Will it be inconvenient?  Certainly.  Will you be too busy to interrupt your day?  Undoubtedly.

But that is precisely the point: to go out of our way to demonstrate we care for these businesses.

So… Let’s LexMob South Limestone.  Look for more details on Twitter with the hashtags #LexMob and #SoLime.  See you there!

Update: The inaugural LexMob will be Wednesday, July 22nd @ Pazzo’s Pizza Pub at 11:30 AM near Euclid on SoLime.  Can’t make it?  We’ll try for other times and places with future LexMobs!

LowellsSquare

An update on CentrePointe

Rob Morris 5 Comments CentrePointe , , , , ,

At the Lexington Forum this morning, CentrePointe’s developer updated the public on the status of the faltering project in the center of our city.  As he has done in other venues, he laid much of the blame for any CentrePointe controversy at the feet of bloggers and the media.

In his presentation, he revealed a few new details about the secretive project, along with several layers of backup plans.  In this post, I’ll outline some of my notes and some questions which arise from the developer’s presentation.  In a future post, I’ll share more of my thoughts on the development in the wake of this morning’s presentation.

Plan A

  • The dead financier (call him Mystery Investor ‘A’ – or MIA, for short) was introduced to the developers by a pre-eminent, distinguished American
    who was heavily involved in the Justice Department.
  • MIA was committed to 5 such projects around the world involving some $800 million, including 3 in the US worth some $550 million.
  • He went into some detail on the reason that MIA’s estate was held
    up.  He characterized it as a chicken-and-egg problem.  The
    heirs aren’t sure they wanted access to the ‘numbered Swiss bank accounts’
    until they knew whether those accounts had enough to cover the estate’s
    liabilities (like CentrePointe).  The accounts and the liabilities seem to be a package
    deal, but the heirs are blind to the numbered accounts: They can’t know what the actual assets of the estate are unless they also accept the liabilities.
  • Question: If MIA’s heirs don’t have confidence that MIA had enough assets to cover these deals, then what makes CentrePointe’s developers so confident that the money is there?

Plan A Minus

  • If the developer’s ‘Plan A’ falls through, he has an intermediate plan (‘Plan A Minus’?).  In the last couple of
    days, he has talked with someone who happens to have 20 to 30 thousand cubic
    yards of dirt for free, so filling in the site is an option if the current plans
    fall through.  He also mentioned that he had talked with someone who
    hydroseeded strip mine sites who might be willing to help seed the
    place.
  • The developer claimed “It is not our intent to embarrass the community” for the World Equestrian Games.  He hates to do it, but is tempted to backfill the pit and plant seed “even for 60 to 90 days, just to shut those people up”.  The friendly crowd roared with laughter.  Later he said he thought about “putting in a liner and turning it into a lake”.  More laughter.

Plan B

  • CentrePointe now has a ‘Plan B’, complete with a Mystery Investor ‘B’ (MIB) who has recently come forward to
    express interest in the project (should ‘Plan A’ with MIA’s estate fall through). They are “ready to go” if ‘Plan A’ does fall
    apart.
  • Question: If MIB is so “ready to go”, then why not relieve the heirs of MIA’s estate of their burden and allow MIB to take over financing for the deal? 

Plan C

  • Even though MIB is ready to go, there is also CentrePointe ‘Plan C’
    involving a Mystery Investment Bank ‘C’ (MIC) who will put up $30 million, and
    the developer briefly mentioned some sort of ‘bond arrangement’ to finance the rest of it.
  • Question: If Plans A and B are really viable, then why does CentrePointe need a Plan C?
  • Question:
    What kind of bond issue supplies the other $220 million needed to build the project, if the investment bank is only ponying up $30 million?

Other notes

  • If one of the financing options lines up today, CentrePointe would begin construction in the fall.  15 months after the initial demolition began.
  • The developer claimed that 65 of the 91 condominiums at the top of CentrePointe had been committed to by many people, including horse farms in Ireland and Dubai.  (He didn’t mention Napa Valley wineries this time.)
  • He took pains to correct Herald-Leader writer Beverly Fortune for
    reporting that the 91 units had an average price of $1.2
    million.  “That’s just the average… The units will start at $600,000
    and go up from there.”
  • “Hard Rock Café was one of the first to call us” when they heard about the project, strongly implying that they were lined up.  (Since the meeting, I have learned that the developer really talked with ‘House of Blues’ – not Hard Rock – and that they are anything but ‘lined up’.)

The plethora of mystery investors and backup plans might have been intended to reassure his audience.  But they actually raise troubling questions about the future of the project, the developers’ ability to obtain financing, and the financial viability of the development’s business model.