Tag: Economic Development

I choose both

Rob Morris 5 Comments Ideas, Local , , ,

“The test of a first-rate intelligence is the ability to hold two
opposing ideas in mind at the same time and still retain the ability to
function. One should, for example, be able to see that things are
hopeless yet be determined to make them otherwise.”
                                                — F. Scott Fitzgerald (via Ace Weekly)

“You must be the change you wish to see in the world.”
                                                — Mohandas K. Gandhi

There is a revolution brewing in Lexington.  Fed up with the intransigence and bureaucracy of ‘old’ Lexington, ‘new’ Lexingtonians are gearing up for an overthrow of the old regime.

As a lifelong rebel and iconoclast, I love it.  As a business owner, I want the more vibrant Lexington (and downtown) that these changes promise.  As a father of a two-year-old, I want my son to have the greatest opportunities to learn, live, play, and work – and want his birthplace to provide those opportunities.  Lexington must change, or it will not grow.  If it does not grow, Lexington will wither and die.

Still, I’m a bit troubled…

More on why in a bit.  First, we need to describe the new and old Lexingtons.  (Or, if you Twitter – and you should – #OldLex and #NewLex.)

OldLex is rooted in our city’s and our region’s traditions.  It wants to build on the heritage of our horse farms, our coal, our bourbon, our tobacco, and our basketball.  It values formality and processes and order and control, and is often obstinate in the face of change.  OldLex tends to respect big international companies, large events, and wealth.  It generally shuns technology.

NewLex is borne of our city’s innovative and intellectual potential.  It yearns to be free of restrictions and limitations imposed by centuries of tradition.  It values innovation and creativity and transparency and freedom, and usually gleefully wallows in the messiness and chaos of change.  NewLex tends to respect speed, intellect, local-ness, and the environment.  It embraces technology.

So there, in admitted caricature, are the two cultures of Lexington.  They currently stand in perplexed opposition to one another.  They blink in bewilderment at the other’s actions (or inactions) and question the other’s motives.

I am a confirmed NewLex kinda guy.  As a reader of this blog, I suspect that you also lean toward the NewLex camp.

But, as I mentioned, I’m troubled by something in the conflict between NewLex and OldLex.  I also hear the same concern echoed in comments on my blog and in NewLex Twitter discussions.  In summary, it is this: The desire for continuity is almost as strong as the desire for change.

While we decry the adoption of outdated icons of horses as the central identity our city, we still love the beautiful horses, the farms, the racetracks, and the uniqueness they bestow upon our city and state.

We wish that some of the $36.5 million that just went to our new basketball coach had gone instead to improve our schools or our university.  But we do love our ‘Cats, our Coach Cal, and our championships.

We cannot fathom why our city’s representatives haven’t adopted more transparent practices and implemented more current technologies, but what, really, have we done to facilitate that?  (Have I already forgotten how mystifying Twitter was just a couple of months ago?)

As much as we advocate overturning the old ways of thinking and the old ways of doing things, we NewLexers sure like a lot of the old things.

And we should like them.  The horses, the basketball, and the bourbon are all significant and important parts of our heritage and our identity.  They are a part of what makes us ‘US’.

And in that heritage lies our one bond with our OldLex foes, and, I believe, our single best opportunity to effect real and necessary change in our city.  As NewLexers, we must challenge ourselves to embrace and leverage our past as a springboard into our future.

Can a vibrant horse industry exist alongside an even-more-vibrant Eds-and-Meds economy?  I think so.

Can we use Lexington’s defunct distilling industry and empty warehouses to build a vibrant arts and cultural (and distilling!) community?  I think so.

OldLex certainly comes with many flaws.  But, if we’re honest with ourselves, NewLex can be just as problematic.  We often come off as brash and abrasive.  I kinda like being brash and abrasive.  The problem is that ‘brash and abrasive’ doesn’t get the hard work of changing our city done; It brings such work to a halt as OldLex digs in their heels.

NewLex often appears impractical.  We are full of plans and ideas, but frequently come up way short on tangible actions and, ultimately, results.  We must learn to transform our ideas and plans into actions on the ground.  We must, in short, be the change we wish to see in the world.

So I make a declaration that may not be popular with all of my NewLex compatriots: I choose both.  I choose the heritage that makes Lexington great.  I choose the creativity and intellect that will drive us into the future.  I choose to act with transparency and speed.  I choose to love the singular beauty of our horse farms.  I choose to reject the parts of (Old AND New) Lexington which hold our city back from becoming truly great.  NewLex?  OldLex?

I choose both.  I choose Lexington.

A better brand for Lexington

Rob Morris 7 Comments Ideas, Local , ,

Lexington’s leaders are busy picking a new brand for our city.

Sorry, gang.  You don’t get to decide.

Lexington_01_sm Last week, the Urban County Council’s Planning Committee considered the city identity possibilities of the blue horse that Pentagram (an international design firm) crafted for the Lexington Convention and Visitors Bureau.  The committee forwarded the discussion on to the full Council.

Unfortunately, the Blue Horse Debate is a waste of time, talent, money, and attention.

Our representatives fail to realize that Lexington’s brand is largely out of their hands.  And it certainly isn’t in Pentagram’s hands.  Whether they choose
to promote a blue horse or a spotted yak is irrelevant to Lexington’s brand.

Telling versus Earning
Marketers (and leaders) suffer from a kind of conceit.  The marketers’ conceit is that they can tell us what their brand means.  They fail to realize that brands are reputations which are earned.

A brand isn’t a
declaration.  It isn’t an intention or a vision.  It isn’t what leaders say it is, no matter how well it is designed and researched.  It isn’t a great ad campaign or a really slick logo or a lyrical tag-line.  It is certainly not a marketing function.

Brands arise from all of our experiences with that product or that city, not from what the leaders of any company or city want them to be (or say they are).

The best brands don’t tell people they’re great.  They earn greatness.

If people believe that Lexington is a boring town, then (unfortunately) that is part of our brand.  If people believe that we are a technology backwater, then that, too, is part of our brand.

This is scary because our brand is pre-set in peoples’ minds, and it takes a lot of hard work to be good enough to dislodge entrenched perceptions.

It is scary because it isn’t about saying we’re better; it is about actually BEING better.  Really better, not just in-our-marketing-plan ‘better’.  Not just approve-a-message/logo/strategy-in-a-meeting ‘better’, either.

We have to earn a reputation for better schools, better businesses, better technologies, better leaders (and not just at LFUCG, either), better conversations, better people, and better visions of the future.  And we can’t buy that reputation from any design or branding firm.

To improve our brand, we have to truly transform Lexington.

Inertia
So why do our representatives persist in their silly pursuit of the blue horse?

Over the years, I’ve frequently witnessed something I call institutional inertia.  Institutional inertia happens when individuals in an organization don’t really feel responsible for (or influential upon) the success of the organization.

In those cases, the easiest thing to do is just stay the course, even if that course is doomed to failure…  When inertia raises its ugly head, it is often, maddeningly, the powerful (those who think they have the most to lose) which become the most hostile to change and most determined to stay the destructive course.  Doing nothing is always easier than doing the right thing, especially when doing the right thing is a lot of hard work.

And paying someone to design an ‘identity’ is an easy-but-doomed course for improving Lexington’s brand.  There is no ‘magic bullet’ for crafting a better brand for our city.

If we want a better brand for Lexington, then make sure our city is an attractive, welcoming place for our visitors.  Ensure that our people are knowledgeable, warm, and friendly.  Create rich, distinctive, and memorable experiences for both our citizens and our visitors.  Foster the growth of vibrant businesses and arts communities that make Lexington a compelling place to work and play.

Then, perhaps, Lexington will earn the better brand we are seeking.

Update: 4/28 Cross-posted to both Ace Weekly and Transform Lexington.

Full disclosure: In a previous job, Rob severed his firm’s relationship with Pentagram.

[where: 200 E Main St, Lexington, KY, 40507]

The UnTower Manifesto: 3. Beyond UnTower

Rob Morris 1 Comment CentrePointe , , ,

[Note: The UnTower Manifesto is a three-part series about responding to the failure of CentrePointe.  You can read the full story of that failure here.]

The final piece of the UnTower puzzle is what to do with the pit now that the historic buildings are gone and the promised tower cannot be built.

Up front, let me declare that I don’t have all of the answers regarding what needs to be done with the block.

But I do have some general principles which we might start to apply to the site.

  • Create a vibrant destination which attracts in-town residents, weekday workers, other folks from throughout the Bluegrass, and tourists.
  • Make that destination a distinctive place which no other city has (and this doesn’t need to be a towering monument to ego)
  • Create public and private spaces within the destination which allow the community to create shared experiences while also providing a much needed economic boost
  • Balance the types of uses within the development to include an attractive mix of retail, nightlife, dining, and lodging options
  • Ensure local businesses have significant presence within the development to help supercharge the local economy
  • Ensure that the space is well-integrated with the surrounding community and that its design promotes circulation throughout surrounding businesses and public spaces
  • Build it soon.  Remove the eyesore that the UnTower scandal left behind.

So lets look at these principles in more detail.

Destination.  If we want the UnTower block to directly feed the local economy, we need it to function as a destination for both our visitors and our community.  The previous imposing design did not encourage local residents to participate in the space.

Distinctive Place.  The new development should, to the extent possible, function as a signature place for Lexington.  Much like Keeneland and our horse farms showcase Lexington as a city like no other, the new development should showcase our city, our region, and our people.  Portland, Austin, Miami, Chattanooga, Denver, and even Louisville have these memorable and distinctive signature places.  Lexington should, too.  A distinctive place will draw people (and dollars) into our community; A forgettable one will not.

Public and Private Spaces.  The most effective places (like those in the cities above) combine public spaces with private enterprise.  Thus, memorable shared experiences can also feed the local economy.

Balanced Use.  Others have proposed using the block for a single kind of use – say, a new basketball arena.  Such dedicated uses of the property would be counterproductive to our economic engine.  To get the biggest economic bang for the buck, we should encourage a unique and balanced mix of stores, restaurants, attractions, clubs, and perhaps a unique ’boutique’ hotel.  (My best-ever customer experience was at a Kimpton Hotel, which made for a hugely positive impression of Portland in general.  What if Lexington could wow its visitors like that instead of giving them a bland cookie-cutter hotel?)

Local Businesses.  To supercharge the impacts of the dollars spent within the new development, we should try to ensure that many of the businesses located there (30%? 50%?) are local businesses.  This will yield two big benefits.  First, it would contribute to the distinctive character of the place.  Second, it would keep a significant portion of that money in Lexington.

Integration.  When CentrePointe was proposed, many derided the design as too fortress-like and too disconnected from the city fabric.  The UnTower scandal offers an opportunity to correct that mistake.  The new development could more thoroughly integrate with several aspects of downtown development.  The site borders Phoenix Park, Courthouse Plaza, and the History Museum / old Courthouse / Cheapside complex.  An ‘open’ design would promote circulation through those spaces (and into surrounding businesses) and would better integrate with our other urban initiatives (such as our street improvement plans).

Build Soon.  Regardless of the type of development we ultimately put on the UnTower block, we probably have missed our window for using it to improve our city’s appearance for the World Equestrian Games in 2010.  Nonetheless, we cannot allow the crater left by UnTower to remain.

Is this list comprehensive enough (or even correct)?  Probably not.  Feel free to point out what I got wrong or what I missed.

In any case, this is the kind of civic discussion that the citizens of Lexington must engage in if we are to build a better community – and if we are to heal the scar in the middle of our city.

[where: E Main St & N Limestone St, Lexington, KY 40507]

Why CentrePointe will fail

Rob Morris 7 Comments CentrePointe , , , , ,

CentrePit A few months back, I openly wondered about the viability of the CentrePointe project, which thus far has only managed to crater an entire city block of historical buildings.

Since our post (which came long after the controversy started), there has been a continued flurry of discussion around CentrePointe in the community.  But nothing has happened on the construction site.

In all of this turmoil, one fact has become crystal clear: CentrePointe will fail.

The project will fail in one of two ways:

  1. The project will fail to be constructed, or
  2. The project will be constructed, and then fail financially

I say this not out of emotion or disgust aimed at the project, the developers, the mayor, or their conduct (although all may be worthy of disgust) – but because the justifications for the project fail to stand up to basic business logic.

Instead of acknowledging the flaws in their business plans, CentrePointe’s developers have continually invoked wishful thinking to rationalize their actions.

I’ve seen this kind of fatal optimism in business many times before.  Business executives often think they can make a project succeed by just wanting it badly enough.  (Unfortunately, optimism isn’t a viable business strategy.)  In their blind pursuit of their goal, they disregard the facts.

So, lets explore the facts around CentrePointe (‘CP’ from now on), which really can’t be ignored any longer.  (Read more from the Herald-Leader here, here, and here.)

  • CP has had an unnamed international financier who committed $250 million to the project.  This week, we learned that the mystery investor died.  Without a will.  The project certainly won’t commence until a) the financier’s estate goes through probate court, and b) the heirs agree to continue support for CP.  Odds the financier ever existed: Iffy.  Odds heirs will support CP: Doubtful.
  • CP is supposed to house a J.W. Marriott luxury hotel.  Meanwhile, Marriott’s CFO (who is their soon-to-be CEO President and COO [correction]) has repeatedly announced that even the best projects – a group that CP cannot possibly belong to (see more below) – are stopped in their tracks.  Odds Marriott will end up in CP: Doubtful.
  • The Marriott would have 250 rooms going at $190 per night.  The price is 50% higher than competing hotels, yet the developers’ analysts estimate occupancy rates at startup which are better than those (less expensive, more established) hotels.  Odds of getting higher occupancy at a much higher price: Very slim.
  • There are 91 luxury condos at the top of CP, which would sell for $1.2 million each and which would generate over $100 million for the project.  The analysts estimated that 45 of those would sell before construction starts.  And all 91 condos would be sold in 3 years.  In all of Lexington, there were 31 million-dollar properties on the market at the end of 2008, and only 10 such properties sold during the entire year.  So… CP’s developers would flood the market with luxury properties — essentially quadrupling the number that are on the market — and expect to sell them faster than historical rates.  Odds that Lexington could absorb a 300% increase in ultra-luxury properties in only 3 years: Zero.
  • CP’s developers have to sell 4.5 years (45 condos at 10 condos per year) worth of luxury property inventory before construction starts.  And that assumes that every million-dollar prospect would prefer to live in a 2700-foot high-rise condo instead of a country estate. Odds that CP’s developers can sell 45 million-dollar condos before construction starts: Zero.  (Note: This week, CP’s developer claimed that 61 of the 91 condos were ‘spoken for’.  This is patently false, and reveals a worrisome desperation from the developers.  Unless ‘spoken for’ means that someone said “I wish that I could live in a place like that…”  Which is also worrisome.)
  • CP’s analysts assumed that the $1.2 million condo buyers would have an average income of $220,000.  That’s an incredibly aggressive price-to-income ratio of nearly 6, which ranks with inflated San Francisco, New York, San Diego, and Los Angeles averages – before the real estate bubble burst.  Snakebitten banks are much more critical of an applicant’s ability to pay in this economic environment.  Lexington’s average price-to-income ratio: 2.35 – indicating an income of over $500,000 to afford the condos and drastically limiting the pool of eligible buyers.  Odds of finding enough eligible prospects in Lexington: Very slim.

So what are we to conclude about CentrePointe from these facts?

  1. The developers’ tendency toward secrecy and intrigue are unacceptable in light of the public investments in and public impacts from this project.  We deserve transparency.
  2. The project is not financially viable.
  3. The primary financing (if it even exists) is shaky at best.
  4. The analysts’ projections are unrealistic and misleading.
  5. The project cannot generate the promised tax revenues.
  6. The developers are prone to either fantasy and/or outright deception; either case bodes poorly for the feasibility of the project.
  7. CentrePointe will fail.  Miserably.

Lexington must now accept the failure of CentrePointe and begin to move beyond the CentrePointe fallacy.  We must hold accountable those who recklessly ramrodded the flimsy development through our city council.  We must prevent future irresponsible allocations of our common wealth.  And our community and our public officials must begin carefully contemplating what’s next for the block that CentrePointe obliterated.

Update 4/13: Crossposted to Ace Weekly as “Optimism is Not a Business Strategy”

Update 4/14: Tom Eblen did an excellent parody of the CentrePointe situation here.  Very cool.

Update 4/17: OK.  Let’s just get the whole story out on the table.  The UnTower Manifesto: What went wrong, what to do about it, and what to do about the scar it left on our city.

[where: E Main St & N Limestone St, Lexington, KY 40507]