Tuesday, July 10, 2007

Economic Development vs. Real Estate Development

I have been thinking that the city is focused too much on Real Estate Development in the recovery and not enough or Economic Development. New Orleans' White-Collar Exodus in Time resonated with me. It emphasized the crisis situation "according to the local business weekly CityBusiness, the metropolitan area has lost 12 of the 23 publicly traded companies headquartered here".

When you look at Blakely's list of 17 target projects;
  1. New Orleans East Plaza
  2. Lower Ninth Ward
  3. Carrollton Avenue at Interstate 10
  4. Harrison Avenue (Canal Boulevard to City Park)
  5. Gentilly Boulevard at Elysian Fields
  6. St. Bernard/ AP Touro at North Claiborne Avenue
  7. Broad Street at Lafitte Greenway/Treme
  8. South Claiborne Avenue at Toledano
  9. Canal Street (Downtown)
  10. Broadmoor (R. Keller Center and Library)
  11. Tulane Avenue at Jeff Davis (Comiskey Park)
  12. O.C. Halley Corridor
  13. Bayou Road/Broad Street Cultural Corridor (Market Building)
  14. St. Roch Street (Market and neutral ground)
  15. Freret Street (Farmers Market)
  16. R.E. Lee at Paris Avenue (Lake Terrace Center improvements)
  17. Alcee Fortier Street (Street Beautification)
Most are Neighborhood Centers, anchored by small scale retail. Some are public facilities. A number are residential developments. A few, including Harrison Avenue and Robert E. Lee at Paris, would probably have come back with no help at all. Just as the centers at Canal at Robert E. Lee and West End at Robert E Lee are coming back. In fact Blakely's list may have delayed redevelopment in some cases. The Shopping Center at Robert E Lee and Paris was for sale last time I drove by.

What is missing is astonishing to me, not one project on the list is likely to bring one new permanent job to the city. Any incentives afforded these projects are simply a subsidy to the real estate development industry.

We still seem to be engaged in an Urban Planning exercise, not an economic recovery. The City needs Economic Development now more than ever in its history. We may still have a window of a couple of years to make an impact before recovery funding runs out. That opportunity is slipping away.

Economic Development, simply put, is bringing new permanent jobs to an area. No other definition really matters, everything beyond that is targeting or noise. There may be some jobs an area might not want for different reasons. An area may not even want economic development at all, the existing population may fell the existing quality of life is perfect and bound to deteriorate if any change is made. Many in New Orleans feel that way if they would look deep inside themselves and be honest. They are simply wrong. We cannot continue to wind down as we have for the last fifty or more years.

According to Time "Donna Addkison, Nagin's chief economic advisor, says. 'There are over 16,000 businesses in the city, and I can tell you that this calendar year we have made 16,079 contacts with businesses'." No one called me, obviously at least 80 people got called twice.

Real Estate Development follows and feeds on Economic Development. If there is sufficient Economic Development there is no real need for government assistance in Real Estate Development, all government needs to do to shape the development by riding the economic current and channeling the flow for the benefit of all of the population.

In New Orleans and Louisiana we have long had a heavy handed government, allied with a cult of personal power. There has been an implicit thread of corruption running through the public's interactions with government. People often feel they they need an "edge" to accomplish their goals.

I am, for example, considered by some to be an expert in codes. I have always had a positive and constructive relationship with the different agencies involved yet I routinely lose out to people "who have a personal relationship" with this or that agency. I consider the people I work with in those agencies professional colleagues, although I do count a few as personal friends. I haven't seen these personal relationships result in different outcomes. The opposite seems to be true. The project's interests have sometimes been sacrificed to maintain a relationship.

The City should be seeking to build a local middle class through aggressive efforts at attracting new well paying business to the city. Back in school we were told that one job in a basic industry created ten jobs in in the local economy. That is obviously an oversimplification , but jobs in Basic Industries (those industries which bring money from outside into the economy) create secondary jobs in retail, construction and services. New Orleans basic industries have been declining for decades.

The port, although strong no longer employees the number of people it did and has shifted from "break bulk" to "bulk" cargo. The importation of high value cargo lead to the development of New Orleans as a center of the coffee industry and agricultural imports. As other types of high value cargo developed New Orleans failed to attract that cargo and the secondary industries associated with them.

The Energy Industry has been consolidating for decades. They have consolidated to Houston. These high paying jobs have been leaving the city every year.

Banking was at one time a major regional focus here, antiquated state laws prevented local banks from expanding and now only one old New Orleans bank still exists and it is widely rumored that in time it too will be sold out the Megabank Corp.

Who is working to replace these good jobs? Where is the impulse to create new ones?

Yet in our recovery efforts there seems to be an explicit desire to divert as much of the recovery into the hands of the usual suspects, by hand picking the recipients of the governments largess. Usually behind closed doors. I don't suggest that every single dollar be distributed by referendum, nor do I agree with all of the special interest groups, business, citizens, neighborhood, preservation, or political.

The process should be more open. Public officials should make their decision in public for the good of all of the people not just a favored few. Public Officials should have the courage to tell the truth. Everyone they can't have everything they want. No one gets everything all of the time except, it seems, the usual suspects in New Orleans.


Leigh C. said...

I mistakenly thought that economic development would be first and foremost post 8-29. You are right, though...it is unfortunately shoved in the backseat in favor of the quick fixes - the temporary jobs and the land development. Like shoving aside fresh fruit for sickly-sweet candy. Same as it ever was, dammit.

mominem said...

I personally would rather move 20 families out of poverty than create one more millionaire.

If the benefits are equally distributed among the people of New Orleans, at least 12 of those families would be black.