Ideas – Page 2 – CivilMechanics

To-Do List for Lexington: 5. Leverage Intellectual Capital

December 3, 2009October 10, 2015 Rob Morris 4 Comments Local Better Lexington, Business, Community, Economic Development, Ideas, Jobs

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

Lexington is losing its minds.

At 100,000 strong, Lexington’s college graduates represent approximately one-third of the population over 25 [Source: US Census Bureau, American Community Survey, 2006 and 2008].

The University of Kentucky and Transylvania University churn out over 6,000 new graduates – including over 4,000 new bachelor’s degrees – each year. With 4,000 new degree-holders per year, Lexington should have increased this talent pool from 100,000 in 2005 to about 112,000 in 2008.

But we didn’t.

Instead, even as Lexington’s overall adult population grew by 9,000 in that 2005 to 2008 period, the number of college graduates remained stuck at 100,000. (For comparison purposes, Louisville grew from 191,000 college graduates in 2005 to 202,000 in 2008 – growth of 5.7%).

Somehow, 12,000 graduates have slipped from our economy – far more than can be explained through normal attrition (retirement, death, etc.).

The explanation: Educated talent is leaving Lexington. We suffer from a “brain drain”.

In recent years, it has become fashionable for Lexington’s leaders to talk about attracting the “creative class” to Lexington. Coined by Richard Florida, “creative class” refers to professionals who work in knowledge-intensive industries, and Florida’s theory is that this group of professionals drives economic development in “creative cities”.

When our leaders talk of the creative class, they frequently focus on diversionary amenities which will attract young creatives to our city – entertainment, events, and facilities which will make life in Lexington more enjoyable outside of work.

While not entirely misguided, the problem with this approach is threefold:

It confuses cause and effect. Is this creative environment really the driver of economic prosperity in American cities? Or, more likely, are they the result – the pleasant side-effect – of a prospering economy?
The flagrant boosterism which permeates Lexington’s attempt to attract new talent often comes at the direct expense of retaining the talent we already have, as Steve Austin ably points out.
It assumes that the creative class is something ‘out there’. Lexington already has a creative class. And we must cultivate it here first.

Instead of focusing on amenities, Lexington should focus on crafting a vibrant economic engine which will keep the educated talent our city produces and which will create real demand for those amenities.

Who’s leaving?

When we see that Lexington has lost 12,000 college graduates in 3 years, our impulse is to look for an exodus of newly-minted degree-holders, and to start thinking about what we could do to retain our newest, youngest graduates.

And while the loss of a departing new graduate’s energy, potential, and future is certainly tragic, there is an even-more-profound tragedy which Lexington must actively address: the loss of the experienced employee.

When experienced employees with college degrees leave Lexington, they injure our economic engine far more than a young graduate. Experienced employees represent significant investments in training, dollars, relationships, know-how, and, well, experience.

In aggregate, these experienced employees are vast pools of expertise which create enormous economic advantage for Lexington. They have more income than recent graduates. They provide more tax revenue. They have higher property values. They spend more money in the local economy, which creates more local jobs. They tend to add more value to their companies.

This is the primary reason I have been so publicly critical of Lexmark’s implosion. Every few quarters, Lexmark announces fresh rounds of layoffs and “restructuring” which shed dozens or hundreds of local employees. Many other employees have left of their own accord.

Seeking employment which can utilize their expertise, these folks often leave Lexington. Many who remain in Lexington are underemployed. When so many highly-trained experts in engineering, software development, logistics, and marketing leave our city, it is an enormous hit to the local economy.

Lexington must find ways to solve this exodus of talent (in both new graduates and experienced employees). We need to be creative in how we grow, keep, and attract smart people.

Lexington must leverage its intellectual capital.

How do we grow, keep and attract smart people? We need to start by helping to create new local jobs.

There is a common misconception that all job growth in the US comes from small businesses. But business size isn’t the determining factor; business age is. The Kauffman Foundation found that all job growth in our country comes from young businesses (regardless of their size). Entrepreneurial ventures founded in the last 5 years drove all job growth in our nation’s economy.

When we think about entrepreneurship, our focus is often (again) on our younger generations. We are drawn to stories of Gates, Jobs, Dell, and Zuckerberg launching wildly-successful ventures from their dorm rooms or garages. They came so far from such modest beginnings. In Lexington, we see this youthful energy and creativity exhibited in Awesome, Inc. (who are awesome, by the way), a local business incubator.

They make really compelling stories. But the meteoric rises of Microsoft, Apple, Dell, and Facebook are so compelling precisely because they are so rare.

And they misrepresent the realities of the entrepreneurial world.

In another counterintuitive study, the Kauffman Foundation found that older, more experienced workers actually start new businesses at higher rates. Other studies have found that the vast majority of technology startups are founded by people 35 or older. And where do many of those older entrepreneurs come from? Often, from large corporations.

So how do we create new jobs in Lexington? How do we keep and attract members of the “creative class”? How do we stem the bleeding of expert talent from our city? Here’s a starting list for leveraging our intellectual capital. I hope you will add to it:

1. Fuel the entrepreneurial engine. From experience, I can tell you that starting a business is daunting hard work. There is the bewildering array of legal and tax implications. There are a variety of financial hurdles. And, unless you’ve done this sort of thing before, there is a ton of on-the-job learning about what you don’t know about starting a business.

Lexington (LFUCG and Commerce Lexington) should strive to streamline the start-up process far more than they do today. Our city should embrace entrepreneurs as they seek to create new jobs for our economy.

We should help them flatten the usual barriers to getting a business started. We should provide forums for getting enrepreneurs connected with other talents and businesses which can assist them in the setup and growth of their businesses. We should give them open access to critical business data about our city. We should give them some amount of preference in local bidding contracts. We should provide them with essential training in operating their businesses (e.g., If they are brilliant engineers, that doesn’t always mean that they are brilliant marketers or financial analysts).

When possible, we could even provide them with financial support or space (such as setting them up in the plentiful space available in Lexington’s Distillery District).

In short, Lexington needs to foster the conditions under which entrepreneurs can create jobs.

2. Grow our pools of expertise. Our mayor frequently talks about how Lexington’s 3 H’s (Horses, High tech, and Healthcare) form the foundation of our city’s economic development strategy. Those sectors may be the right ones to leverage going forward.

But when we think about stopping our exodus of talent, we need to think in more flexible terms than specific industries. A supply chain manager leaving Toyota has a unique skillset (how to get things made overseas, optimizing inventory, logistics, etc.) which can carry over to a variety of other – not necessarily high-tech – industries. A marketer leaving Lexmark has a vast array of experiences with retailers, ad agencies, design firms, and product strategy which could be redeployed to, say, UK Healthcare.

In addition to choosing strategic industrial sectors, we should also choose strategic, functional areas of expertise that we can tap into as one industry wanes and another expands. Some ideas? Supply chain, marketing, sales, engineering (multiple types), software development, etc. (Add your own in the comments below.)

Not every employee currently leaving Lexington will want to become an entrepreneur. But nearly every one wants a job.

As companies like Lexmark shrink, Lexington should seek to actively funnel their fleeing employees to growing local enterprises like Alltech, UK Healthcare, HP’s Exstream, or some new entrepreneurial venture. We should inject some “liquidity” into the local job market, so that finding local opportunities is an easier, more streamlined process. When we learn of new layoffs, our city should mobilize to keep that valuable talent local.

We shouldn’t allow employees, especially experienced ones, to leak from our economy.

3. Coordinate and amplify existing efforts. Today, we have a patchwork of agencies and institutions which have missions to grow Lexington’s economy and provide jobs. We have one person working on economic development in the Mayor’s office. Commerce Lexington is given tax dollars to help produce new jobs, but is unable to show that they have actually created any.

We should coordinate such efforts in a more strategic, consistent, coherent, and effective way. We should designate a person or an agency who has accountability for results – especially for job growth in our city. That entity should also have responsibility for fueling our entrepreneurial engine and for growing our pools of expertise.

And then – and this is really important – we must hold them accountable for the results they get.

The loss of 12,000 educated Lexingtonians shows us that our city needs to work hard to grow, keep, and attract talent. If we create the mechanisms to create new entrepreneurs while simultaneously magnifying our existing expertise, our economy should have the raw materials to begin growing again.

Next: 6. Be Original

To-Do List for Lexington: 4. Embrace Openness

November 6, 2009March 3, 2016 Rob Morris 6 Comments Local Better Lexington, Business, Community, Economic Development, Government Spending, Ideas, Jobs, Streetscapes

(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.

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:

By creating more open information and information systems
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.

Portland 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?

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

To-Do List for Lexington: 3. Local First

November 4, 2009March 3, 2016 Rob Morris 5 Comments Local Better Lexington, Business, Community, Economic Development, Ideas

(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.

If 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.

As 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.

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

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

November 3, 2009October 10, 2015 Rob Morris 6 Comments Local Better Lexington, Business, Community, Economic Development, Government Spending, Ideas

(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.

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:

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.).
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.
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.
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.
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

To-Do List for Lexington: 1. Get Real

November 2, 2009October 10, 2015 Rob Morris 5 Comments Local Better Lexington, Business, Community, Economic Development, Ideas

(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:

Hold out the promise of a vague future reward
Leverage that promise to justify current sacrifices
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
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.

To-Do List for Lexington: An Overview

November 2, 2009November 20, 2015 Rob Morris 11 Comments Local Better Lexington, Business, Community, Economic Development, Ideas, Jobs, Taxes

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

Postscript (12/15/2009)

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

What presenting to LFUCG is like

October 7, 2009March 3, 2016 Rob Morris 4 Comments Local Better Lexington, Community, Design, Economic Development, Government Spending, Ideas, Jobs, Streetscapes

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 Spotlight Effect

September 10, 2009March 3, 2016 Rob Morris 2 Comments Local Better Lexington, Community, Ideas

There’s an old saw in business: “That which gets measured gets results”.

I have to admit I’ve always been a bit dismissive of that saying (usually attributed to the late business guru Peter Drucker). In corporate life, I saw plenty of things that were measured which didn’t get results. The mere act of measuring something accomplishes nothing if effort doesn’t also go into improving that ‘something’.

But a couple of events over the past few weeks has me thinking about what does get results.

Newtown Pike Extension
The first event was the much-acclaimed burial of utility lines along Lexington’s Newtown Pike extension. After Graham and Clive Pohl (of Pohl Rosa Pohl Architects) highlighted the discrepancy between the pretty artists’ renderings of the extension and the actual plans for the construction that was about to begin. Instead of the beautiful, pristine streets promised in the renderings, the extension would have been littered with utility poles and power lines.

LFUCG engineers cited the high relative cost of burying the utilities, estimating that putting them underground would add nearly $900,000 to the project’s cost.

Since the extension will be a kind of “gateway” into Lexington, there was an outcry from many on the Urban County Council about how important it was for us to look good for visitors. Our Vice Mayor was quoted as saying “We’ll never get a second chance to make a first impression.” Local columnists and Lexington’s online community jumped on the issue as well, and it snowballed.

Within a couple of weeks, city leaders lined up with Kentucky’s Governor to announce that they had found the extra funds to put the utilities underground in the Governor’s contingency fund.

I have to admit, I support putting utilities underground, but am dubious of the “first impression” argument. The utilities are currently slated to go underground only on the Newtown Pike Extension. The existing stretch of Newtown will still have above-ground utilities. So a visitor’s true first impression will still be filled with wires and poles from I-75 to Main Street, as seen in this shot of Newtown from this afternoon.

The Treeds Experiment
The second event was a little closer to home. In the Treeds Experiment, I decided take up a challenge from an Urban County Councilmember to see how long it took to get a response from LFUCG’s Division of Code Enforcement. So, last Friday – just before the holiday weekend – I sent an email to Code Enforcement about a lot next to our main building which had become overgrown with tree-weeds, or “treeds”.

At the same time I sent the email, I posted an outline of the experiment on my blog, along with pictures of the overgrowth. And I pledged to chronicle the responses I got from the city.

This past Tuesday, the city’s contractors showed up to clear the lot – less than one business day after my email and post. Pretty impressive by any measure. Code Enforcement hasn’t addressed all of the concerns I outlined (the main drain in the lot is still clogged). But, to be fair, they have addressed most of the public safety issues which accompanied the blight in that lot.

On Twitter, a couple of folks brought up valid points. Russell and Ann both pointed out that Treeds had an unfair advantage – because I talked about it publicly, that may have helped artificially accelerate the responsiveness of the city. (Indeed, within hours of my initial Treeds post, a city employee commented that the experiment would ‘fail’.)

The Spotlight Effect
These two events both benefited from the “spotlight effect”: When the public’s spotlight turns to a particular issue, and that spotlight begins burning intensely, ‘normal’ reactions and ‘normal’ timelines are no longer acceptable.

Russell and Ann were right: my experiment wasn’t ‘normal’, and the average citizen shouldn’t expect that kind of responsiveness.

And others would point out that the Newtown Pike Extension wasn’t ‘normal’ either – it was a one-time event which utilized one-time funds. We shouldn’t expect city officials to move that quickly to fix an oversight or mistake.

But we should.

Everyone should get prompt action on valid complaints. Everyone should expect city leaders to fix their mistakes, to do the right things, and to do them quickly.

But we can’t wait for our leaders to do the right thing. We need to push them. We need to build bigger, brighter spotlights, and we need to shine those spotlights on the things that matter.

It is up to us.

Building a Spotlight
What does it take to build an effective spotlight? I can’t claim to be an expert, but here are some of my thoughts culled from the past few days and weeks (feel free to contribute your own in the comments below):

We must be more vocal. We tend to be indirect folks here in Lexington. It is awkward and impolite to complain; it is much better for the other person to do what they should. But they don’t. And we stew. And nothing much changes.

It is time for that to change. As out-of-character as it may be for many of us, we need to become much more vocal about what is wrong and what we expect. Only then can things improve.

We must join our voices. When one person calls a city department, they are a complainer. When several people call – and are joined by bloggers, columnists, and media – that’s a movement.

And a movement is what dislodged the status quo of the Newtown Pike Extension. We need more movements in Lexington with more voices working in concert. We need to utilize our public platforms – Twitter, Facebook, blogs, and papers – to draw others to our cause.

We must be more visible.
When one person calls one other person at LFUCG, there’s no spotlight. No one else knows about the call, and no one else can amplify the sentiments expressed there.

One of the reasons that Treeds got such a rapid response was probably the ‘publicness’ of the experiment. That visibility helped the amplify the spotlight and, in all likelihood, accelerated the response.

We must measure. This statement isn’t about micro-measuring every detail of every issue. It is about documenting who we talked with and what they said, and holding them accountable for their actions (or lack thereof).

Any regular reader of my posts knows that I’m not shy. They know that I’m not afraid to use my platforms to try to build a movement. In the past few months, my blogging and writing has become fairly visible. (And, for what it is worth, I’ve got some like-minded friends.)

So if you need a spotlight, let me help you. If you see blight around campus or around downtown, let me know. If your business is suffering from the South Limestone road closure, let me know. If you have a great idea for our city, let me know. If you see a problem which needs fixing, let me know.

Together, let’s be more vocal. Let’s join our voices with others who agree. Let’s be more visible. And, then, let’s hold people accountable.

I want a better Lexington. One where businesses aren’t squeezed out of their locations by poorly-planned year-long road closures. One where our government operates much more transparently. One where blight is quickly and effectively addressed. One which has a real (and realistic) urban development plan for downtown. One which has a thriving arts and business community. One which leverages its past to build a brighter future. One which will make my son homesick if he ever leaves.

If you want that too, then join me – or rather, have me join you. Tell me what matters.

And I’ll do my best to help you build a spotlight. Let’s make a better, faster Lexington.

Pretty to Gritty: Thoughts on Lexington Streetscapes

August 4, 2009March 3, 2016 Rob Morris 2 Comments Local Community, Economic Development, Government Spending, Ideas, Streetscapes

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.

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.

Toward a Better Lexington

July 9, 2009March 3, 2016 Rob Morris 1 Comment Local Better Lexington, Community, Ideas

“It has taken five years on Council to understand what we can and cannot control.”
Lexington-Fayette Urban County Council Member Kevin Stinnett, 7/2/2009

How do we make Lexington a better city? Really better? I have some ideas, but first we need to understand some of Lexington’s fatal flaws in order to design something better…

A Broken City
As a relative newcomer to the inner machinery of our city (but a lifelong resident), I have spent a few months trying to figure out how Lexington ‘works’. As a downtown business owner, my focus has been on how we craft a functioning, vibrant, and livable city: How do we create a better Lexington? And it has been a maddening exercise. The more I delve into how decisions are made in Lexington – the more I understand what is actually going on – the more perplexed I become. I am forced to conclude that our city is deeply, systemically, and utterly broken.

Lexington is an uncoordinated tangle of overlapping agencies, boards, task forces, committees, departments, rules, and processes. Within this messy system, each organization is charged with its own distinctive – but often overlapping or conflicting – mission, mandate, authority, ability, accountability, and expertise. Some of the organizations consist of long-term government administrators, some of elected officials, some of volunteers, others are quasi-governmental public/private agencies, and still others are fusions of all of these.

This highly fragmented machinery yields a city which fosters turf battles, redundant effort, convoluted processes, secrecy, uncertainty, and, as we have seen most recently, corruption.

The ultimate result is a profoundly inefficient city with an effectively paralyzed government.

Scandalous
Lately, our local news has been rife with scandals and poorly-conceived,
-designed, and -executed projects:

Out of control spending sprees at the Airport, the Library, the Kentucky League of Cities, and the Kentucky Association of Counties.
The scar of CentrePointe’s failure with its phantom financier, phantom tower, phantom business model, and phantom jobs.
The seemingly hasty and disorganized pending closure of South Limestone.

All of these scandals fit a disturbingly regular pattern: Inadequate oversight which leads to lax controls which permits gross mismanagement and/or outright waste of taxpayer dollars.

Behind this pattern of scandal and appalling inefficiency lies Lexington’s deeply flawed governing apparatus. And when we observe that apparatus in action, we can begin to understand the root of the scandals.

Laurel and Hardy
Many Urban County Council meetings bear an astounding and troubling resemblance to a Laurel and Hardy “Who’s on First?” sketch. A prime example of this was last Thursday’s Economic
Development Task Force meeting (See Ace Weekly’s wonderful reality-show spoof here for further examples). A central question of last week’s meeting was “Who is (really) responsible for economic development in Lexington?”

At the outset, one councilmember stated, “It has taken five years on Council to understand what we can and cannot control.” Re-read that statement, because it is a profound indictment of our city’s overcomplicated decisionmaking infrastructure. Five years. It takes five years for a councilmember to “get it” when they are steeped in it day-to-day? How long will it take for an ordinary citizen?

And by the way, despite the councilmember’s assertion, I don’t think the Council yet understands what they can and cannot control, as the ensuing conversation demonstrated.

The Task Force (Consisting of Urban County Council members) debated the Council’s role in economic development relative to Commerce Lexington (“CLex”, Lexington’s semi-private chamber of commerce) and the Downtown Development Authority (“DDA”, a corporation commissioned by the city and charged with helping redevelop downtown). Both CLex and DDA have a board of directors and a staff of professionals.

What emerged from the discussion (chronicled best by Debbie Hildreth on her new blog about acclimating back to Lexington) is that the councilmembers have little clarity and little agreement on the respective roles, responsibilities, plans, and accountability of the Council, CLex, DDA, and the CLex and DDA boards. Reading through Debbie’s transcript, the councilmembers’ statements are filled with stale bromides, helpless complaints, quick answers and utter confusion. It all becomes tragically comic when you see how our elected officials are not even remotely on the same page.

And it is no wonder that our Council is befuddled. The situation is actually far more complicated than just the Council, CLex, and DDA. Within the Council itself, there are a bewildering array of committees and task forces, all of which could lay legitimate claim to economic development. There is, of course, the Economic Development Task Force. But there is also the Infill and Redevelopment Task Force. There is the Planning Committee. But there is also the Budget and Finance Committee. And the Outside Agency Oversight Committee. And the Corridors Committee. (But wait, there’s more!) There are staff professionals within Lexington’s Division of Planning. There are volunteers who serve on the Planning Commission. And with CentrePointe, there is the Courthouse Area Design Review Board, which issues the building permits for the site.

Within this ridiculous balkanization of our government, who has the jurisdiction, the responsibility, and the accountability for building a better Lexington? Everyone and no one at once. And therein lies the problem.

All of these organizations can claim they spearhead Lexington’s development into a better city. All of them “own” a piece. But ultimately, none appear truly accountable for actual on-the-ground progress.

The Lyric
With a noble project like the restoration of the Lyric Theater, who is in charge? Who takes the lead on coordinating and executing the Lyric’s redevelopment?

The Lyric could plausibly fall under the auspices of the DDA. Or CLex. Or the Infill and Redevelopment Task Force. Or the Economic Development Task Force. Or the Planning Commission. Or, even, the Corridors Committee. Ultimately, though, responsibility fell to another shard in the splintered machine: the Lyric Theater Task Force (who, by the way, appeared to do a great job).

And while the Lyric task force optimized the project for the theater’s redevelopment, it isn’t at all clear where this project falls within the wide array of potential development opportunities in our city. It isn’t clear how the Lyric was connected to our other urban initiatives. In a fiscally-strapped economic environment, was the Lyric the best possible allocation of public funds? We can’t really tell, because we haven’t really prioritized such development projects by return on our public investment.

Destination 2040: Destined to Fail
Some councilmembers have pointed to the Destination 2040 report as a roadmap for Lexington to follow in its development endeavors. Destination 2040 is an admirable vision of the future constructed by our citizens. It is filled with interesting ideas and initiatives to help improve our city. But it is most certainly not a roadmap.

Destination 2040 lacks clear prioritization of the initiatives it proposes. It fails to identify adequate operational details of how to fund, structure, and execute the components of the Destination 2040 vision. And, most of all, it fails to address the profound structural inefficiencies within Lexington which have long hampered such well-intentioned visions.

Toward a Better Lexington

What kinds of structural changes are needed in Lexington? I have a few ideas. I hope that you will add more.

Transparency
When I began to look at how our city works, I quickly joined the chorus of advocates for greater transparency in how decisions get made in Lexington and throughout Kentucky.

And that advocacy has begun to pay dividends (whether the results of our actions or not). As local officials take their first baby steps on Twitter, and as more of our citizens engage in local decisionmaking through attending meetings in person, watching them on public access television (GTV3), or following vibrant discussions on Twitter, one fact has become abundantly clear to me: Transparency is not enough. Not nearly enough.

While transparency has helped reveal the scandals and issues facing our city, transparency alone won’t really solve them. Don’t get me wrong – we’re now starting to see into the machine. It’s just that we’re learning that the machine is completely dysfunctional.

Comprehensive Urban Development
Whatever ‘system’ we have in place today, it isn’t one which promotes sustained urban development. I use the term urban development purposefully here: It is more than mere city planning; It is more than simply promoting our city; It is more than just economic development. Urban development looks at our city as a functioning engine of economic and social progress, and strategically deploys our city’s ‘fabric’ – spaces, corridors, amenities, people, businesses, buildings – to maximize sustainable advancement in our economy, in our social lives, in our physical environment, and in our aesthetic surroundings.

In short, it looks at how we intentionally design a better-functioning, vibrant, and livable city.

Simplification
It is clear that the splintered approach to bettering our city is failing. Our continuous scandals and perpetual lack of progress cement that conclusion, as does the bewildering overlap of dozens of separate well-intentioned but poorly-conceived organizations.

My proposal: Eliminate today’s governmental tangle by collapsing the DDA, Planning Commission, the Division of Planning, and the LFUCG Economic Development Office (for starters) into a single, centralized, and well-staffed organization with the clear mandate, clear authority, and clear accountability for successfully implementing our city’s urban development initiatives.

Focus
Concentrating urban development authority in a single organization will only work if we provide them with crystal-clear priorities on what is important. With dozens of possible initiatives, visions like the Destination 2040 report lack clear priorities. In essence, it declares that everything is important. And in trying to do everything, we’d fail to accomplish anything.

We need to provide such an organization with guiding principles on what’s important (and what isn’t). Is the organization designed to maximize tax revenue, jobs, infill, downtown density, or something else?

From out of these principles, we should set realistic and quantifiable goals: “3000 new jobs by the end of 2010”; “$30 million in new tax revenues by 2012”; “10% higher residential density in downtown by 2014”; etc.

My initial thoughts are that the core principles and the goals attached to them should be outlined by the Urban County Council. That said, I’d like to see a way to balance continuity and change: As a city, we probably don’t want long-term initiatives derailed by short-term political changes. But we also don’t want to ‘lock in’ failing projects merely for the sake of continuity.

From these principles and goals, staff professionals should derive the best 4 or 5 initiatives for achieving the established goals. Would the Lyric Theater have emerged as one of the 4 or 5 best possible urban development projects? I don’t know, but I have my doubts. It doesn’t appear to scale very well on “jobs” or “revenues” dimensions. But, of course, neither does CentrePointe at present. Would we risk destroying surrounding businesses to “beautify” South Limestone’s streetscapes? I don’t know, but I have my doubts.

Accountability
When the Economic Development Task Force met last week, councilmembers bemoaned the $400,000 provided to Commerce Lexington to bring new business to the area. To date, there’s little proof that this ‘investment’ has paid dividends. How much business? How many jobs? What new tax revenue? CLex really isn’t accountable to the Council, so there’s no real penalty for not delivering. Where’d the $400,000 go? The Council would like to know, too…

When we make the transformation to a simplified and focused urban development authority, we must have accountability for progress on these development initiatives. Do they adhere to our principles? Are they meeting our goals? Are they successful? If so, who gets rewarded? If not, who gets fired?

Do I expect my proposed system to be adopted? Not really. But I would like for our leaders to begin to discuss seriously reforming how our city’s decisionmaking machinery functions. And the system which emerges must be more transparent, more simplified, more focused, and more accountable. It must help us build a better Lexington.

A modest proposal to end blight

May 27, 2009March 3, 2016 Rob Morris 2 Comments Local Better Lexington, Business, Community, Ideas, Lowell's

Comprehensive Care Parking Lot

Every morning when I walk into work at Lowell’s, I see 8-foot-tall tree-weeds growing through unkempt hedges and spilling over into the public sidewalk. I see a planter adjoining our building, burgeoning with weeds and grass and the massive stump of a long-dead tree. I see a pitted, crumbling parking lot with clogged drainage.

Many customers assume it is our lot. It does adjoin our building. And they can’t see the sign declaring “Comprehensive Care Center Parking Only”.

116 Mechanic Street

Across the street I see a tiny old shotgun house with a gigantic half-rotted tree looming ominously over both the house and the main Lowell’s parking lot. After the ice storm and other storms this spring, downed branches lay in the asphalt front yard of the house. For over two months.

Absentee owners neglect both properties. Neighboring businesses have conducted the most of the maintenance on the properties over the past couple of years. In effect, they are abandoned.

As a business owner, I worry about the effect it has on Lowell’s famously loyal customers. Even if they cherish us and the service we provide, I’m genuinely concerned about the ability of such eyesores to repel visitors to the shop.

I often talk with nearby business owners, who share my concern for the negative effects of these properties on our neighborhood.

* * *

Many folks have wondered why I have been so vocal on the CentrePointe mess. There are many reasons, but one of the biggest is that the abandoned properties surrounding Lowell’s have given me firsthand experience the negative effects of blight like the CentrePointe scar.

There are many such highly-visible, blighted, non-productive and apparently abandoned properties in Lexington: CentrePointe in Downtown, Lexington Mall on Richmond Road, and Continental Inn on New Circle at Winchester are some of the most apparent. But there are numerous smaller examples littering our city.

Just like the properties surrounding our shop, the absentee owners seek to avoid any and all expenses. They avoid capital gains taxes by refusing to sell their properties. They avoid maintenance expenses by refusing to invest to make their properties economic contributors to the community. They avoid property taxes by refusing to improve their decrepit real estate.

Such abandoned properties generate near-zero direct contributions to the economy. Moreover, they generate negative economic effects for surrounding properties and businesses: They drive away business and drive down property values.

* * *

It is time for such neglect to end. It is time to make sure that lazy landowners are motivated 1) to improve their holdings and 2) to transform their properties into contributors to our community’s economic engine.

My modest proposal: Implement a ‘blight tax’. Lexington landownders whose property qualifies as ‘blighted’ would have to pay a moderately severe annual blight tax.

The definition of ‘blighted’ would need to be worked out, but should include an assessment of the property condition, as well as proof of substantial progress on needed improvements. We could start with Division of Code Enforcement standards.

To overcome their avoidance of maintenance expenses, property taxes, and/or capital gains taxes, I’d propose that the blight tax have some teeth: Say, 35% to 50% of assessed property value per year.

In the CentrePointe case, the blight tax would generate $8 to $12 million per year of revenue to the city until the developers improve their land. When historical buildings were demolished to make way for CentrePointe, many rationalized that the old buildings were greater eyesores than the pit which remains today. I disagree. But a blight tax may also have helped prevent the demolition-by-neglect which occurred on that block over the years.

I would imagine the former Lexington Mall and Continental Inn properties would generate amounts similar to CentrePointe, given their sizes and their locations on busy thoroughfares.

Such tax revenue could be specifically allocated to offsetting the effects of blight: community improvements to sidewalks, bike paths, streetscapes, parks, community centers, business incubators, community ventures, and the like. If property owners avoid the blight tax by making their properties more valuable (i.e., by improving them), then all the better.

To create a vibrant city, we need to ensure that Lexington doesn’t have the economic scars that blight leaves behind: dead spots which contribute little (or which actually destroy) monetary value in our community.

My proposal is the blight tax. What’s yours?