Friday, April 26, 2013

Disabling Economics

By Ellen Cutter, Director of Research. 

A few days ago, I put on my tennis shoes, queued up a recent podcast of NPR’s This American Life, hit the track, and entered YMCA Zen. The episode, Trends With Benefits, was about disability benefits in the United States, which could be a snooze-fest to some. Not me. I spend at least 40 hours a week at Market Street analyzing local economies and discussing strategies to make communities more competitive. When workers drop out of a labor force, it can be a huge problem. 

Planet Money reporter, Chana Joffe-Walt spent six months unraveling disability benefits in the United States, focusing in on Hale County, Alabama where one-in-four working age adults receives federal disability benefits. Being an able bodied person, I felt grateful with each lap I completed. But, as the story continued, I also got dismayed… even angry. One-in-four adults: how can that be? 

In a nutshell: 

• Back pain, developmental disabilities, and other somewhat squishy ailments now account for huge proportions of people on disability. Back in the day, it was mostly people who had suffered a heart attack or stroke. 

• Physicians, state workforce retraining personnel, lawyers – they are all part of a system funneling folks toward applying for these benefits. The multitude of reasons include structural changes in local economies that hinder a person’s ability to find work, how “disability” is defined, compassion, and, of course, money. The federal government will cut checks directly to lawyers who successfully represent clients seeking disability benefits. Leading the pack is the cowboy hat wearing juggernaut of Binder and Binder. Think about it, you’ve seen the commercials. That firm had 30,000 clients last year, according to Planet Money. 

• Further complicating matters, states do not pay anything for residents who are on disability but they do for those who are on welfare. So many states (often assisted by private consulting firms) have worked to identify people on welfare who would likely qualify for disability, help them apply for the program, and transfer them off the state’s welfare program. 

• After a person goes on disability that there’s almost no chance that person will ever return to the workforce, even though many would be able to given the right therapies and job opportunities. One economist put the odds that a person goes back to work at one percent. And these folks are not counted in the unemployment rate. 

• 14 million people (or, about five percent of the nation’s total population) are now on disability, despite anti-discrimination laws and advances in health care, costing the federal government $260 billion a year. This is more than food stamps and welfare combined. 

In all the federal sequestration, unemployment rate, and job creation discussions, you cannot help but notice how this issue has failed to make it into the national dialog. Joffe-Walt provides an effective, albeit, maddening case study about local and national economics and how many people struggle to find meaningful work. Give it a listen. 

And, to see how your community is faring, check out last year’s New York Times interactive map of government benefits by county.

Job Growth by the Metro

By Ellen Cutter, Director of Research.

New BLS numbers released on Friday indicate that approximately 243,000 jobs were created in January, driving the nation’s unemployment rate down (by 0.2 percent) to 8.3 percent. These are the strongest month growth numbers the nation has posted since March 2011. Last May through August, monthly job growth figures failed to break the 100,000 threshold. It was bleak. This month’s numbers represent the continuation of four months of steady month-over-month job growth. In January, notable gains were made in the professional and business services (+70,000), manufacturing (50,000), leisure and hospitality (+44,000), and health care (+31,000) sectors.

With communities vying to put people back to work, attract private investment, and close the chapter of the Great Recession, the web is flush with analysis on which communities have picked up momentum and which have not. Most of what is out there focuses on metro-level data, since monthly employment figures are not provided at the county-level. That said, here are a few highlights:

American City Business Journals analysis

One-year private sector job growth rankings for the 100 largest metros

  • Top five (by % change): Ogden, Utah; Akron, Ohio; Houston, Texas; San Jose, California; Provo, Utah.
  • Bottom five (by % change): Albuquerque, New Mexico; Augusta, Georgia; Richmond, Virginia; Colorado Springs, Colorado; Palm Bay-Melbourne, Florida.
Five-year private sector job growth rankings for the 100 largest metros

  • Top five (by % change): New Orleans, Louisiana; McAllen-Edinburg, Texas; Austin, Texas; Houston, Texas; El Paso, Texas.
  • Bottom five (by % change): Las Vegas, Nevada; Palm Bay-Melbourne, Florida; Riverside-San Bernardino, California; Brandenton-Sarasota, Florida; Cape Coral-Fort Myers, Florida.
  • Only 13 of the nation's 100 largest metros have regained all of the jobs lost during the recession. “The other 87 are still fighting to break even.”

Urban Institute’s Metro Trends

Job trends since recession end for the 100 largest metros
An analysis of this data done by The Atlantic Cities shows top ranking metro by sector:

  • Total private sector job growth: Grand Rapids-Wyoming, Michigan (4.7%)
  • Wholesale trade: Austin-Round Rock, Texas (10.0%)
  • Financial activities: Dallas-Fort Worth-Arlington, Texas (4.4%)
  • Retail trade: El Paso, Texas (7.3%)
  • Trade, transportation, and utilities: El Paso, Texas (5.9%)
  • Professional and business services: Greenville-Mauldin-Easley, South Carolina (22.7%)
  • Manufacturing: Lansing-East Lansing, Michigan (23.3%)
  • Information: New Orleans-Metairie-Kenner, Louisiana (23.9%)
  • Education and health services: Phoenix-Mesa-Scottsdale, Arizona (15.1%)
  • Leisure and hospitality: Worcester, Massachusetts (8.7%)
  • Other services: Milwaukee-Waukesha-West Allis, Wisconsin (12.7%)
  • Government: Nashville-Davidson-Murfreesboro-Franklin, Tennessee (14.0%)

Wednesday, April 24, 2013

Leveraging Your Arts and Music Festivals

By Alex Pearlstein, Director of Projects. 

Market Street client Coachella Valley, California is slowly getting back to normal after the craziness that was the Coachella Valley Music and Arts Festival that wrapped up on Sunday night. Here’s the Time magazine summary of the festival. Top bands and uber-cool celebs made the scene in Indio, California for what is quickly becoming one of the nation’s top music festivals. 

For those economic development organizations who think that events like this are a good time to take that vacation and escape the crowds, do so at your peril. Creative strategies will enable you to program events at these festivals that can potentially identify employment and talent prospects. “Young and restless” talent by the thousands descend upon festival communities for days at a time to enjoy shows and other local attractions. They’re certain to have some down time and might take you up on your offer to learn more about the local economy or whether there are any opportunities for them here. 

While Coachella is growing, the festival still pales in comparison to the behemoth that is Austin’s South-by-Southwest (SXSW). Though it was once the size of Coachella, SXSW has morphed into a multi-media, multi-tracked mega-conference for everything trendy and cool. In many ways it has become the newBIO show; a must-make trip for local economic developers eager to market their community to the nation’s best and brightest techie minds. 

The Austin Chamber – another Market Street client – has been ramping up their programming at SXSW for years to the extent that it is now one of their highest-value marketing opportunities. Here’s asnapshot of the programs and events the Chamber sponsored at SXSW 2013. This is just smart economic development; when a captive audience of potential relocation prospects, entrepreneurs, and talent shows up at your door, open it as wide as you possibly can for them. 

Events like ArtPrize in Grand Rapids, Michigan, Jazz Fest in New Orleans, the Spoleto Festival in Charleston, South Carolina, and others offer opportunities for local EDOs to set out the welcome mat and roll out the red carpet for prospect companies, site consultants, investors, and other “influencers” who would gladly hear a pitch or two or take a fam tour in exchange for a free or discounted excursion to the festival. 

Economic development marketing these days is all about differentiating your community from the competition. Leveraging a high-profile festival or cultural event is low-hanging fruit when it comes to standing out from the crowd.

Friday, April 19, 2013

Job Decentralization in Atlanta – Total Numbers Are Not the Whole Story

By Matt DeVeau, Project Associate.

Yesterday, the Brookings Institution released a report titled, “Job Sprawl Stalls: The Great Recession and Metropolitan Employment Location.” Author Elizabeth Kneebone and the Brookings team analyzed the location of jobs relative to the central business district of the nation’s 100 largest metro areas and tracked changes over time. They found that the number and share of jobs within three miles of downtown increased in just one region – Washington, D.C. – between 2000 and 2010. Accordingly, the share of jobs located more than 10 miles from downtown increased in 85 regions during the same time period. This phenomenon of “job decentralization” was slowed, however, by the Great Recession, which was particularly hard on industries that thrive at the periphery of cities, such as manufacturing and construction. 

I was particularly interested in what the report had to say about my home region, Metro Atlanta, where Market Street also recently completed a Regional Economic Competitiveness Strategy. The researchers found that Metro Atlanta is among the most decentralized regions in the country. Using ZIP Business Patterns data from the Census Bureau, Brookings measured the number of jobs in three distance bands around the central business district of each region. They set the bands at 0-3 miles, 3-10 miles, and 10-35 miles. Nearly two thirds of the jobs in Atlanta – 64.6 percent – fell into that outer band, while just 9.9 percent of jobs were located close to the CBD. Only Detroit, a region that is basically hollowing out, had a lower share of jobs downtown. 

At first glance, this shouldn’t come as much surprise. Metro Atlanta has long been associated with sprawl, and while many public discussions of the topic focus on the proliferation of low-density residential developments, jobs have also clearly been on the move. But while the Brookings report provides an interesting starting point for conversation, I wanted to dig a bit deeper into Atlanta to see if there might be some additional storylines. 

This required a bit of guesswork and substation. For one, Brookings’ methodology did not specify the exact location it deemed to be the “center” of Downtown Atlanta from which to set the distance bands, so I placed this point at the intersection of Peachtree and Marietta Streets, a prominent location in the heart of downtown. From here, I attempted to replicate Brookings’ results by using the Census Bureau’s handy On The Map tool. According to my analysis – 10.4 percent of jobs in 2010 were located within three miles of Peachtree and Marietta, while 66.2 percent were between 10 and 35 miles away. Those percentages don’t exactly match those from the Brookings report, but they’re close enough for a quick, blog-worthy analysis. 

In addition to a simple count of employment in these areas, On The Map provided a robust breakdown of the jobs in each geography, including workforce demographics, jobs by earnings, and jobs by business sector. The following tables show two of the most interesting points:

While the edges of Atlanta experienced significant growth in the previous decades, nearly one third of jobs in the 10-35 mile band are in retail, health care, or education – service sectors that tend to follow population, not the other way around. Meanwhile, nearly 28 percent of the jobs in the region’s core are in professional services or public administration, a reflection of the agglomeration economies typically found in central cities and Downtown Atlanta’s role as a seat of government for the city, county, and state. The largest individual sector in the 3-10 mile band is transportation and warehousing, owing to the presence of Atlanta Hartsfield-Jackson International Airport, a massive employer and transportation and logistics hub. The second table reveals that jobs in the central city tend to be much higher paying – more than 50 percent of jobs in the 0-3 mile ring pay roughly $40,000 per year or better, while nearly a quarter of the jobs in the outermost ring pay less than $15,000 per year. Additionally, the share of high-paying jobs in the central city grew 12 percentage points between 2002 and 2010, compared to just a 7.6 percent proportional increase in the 10-35 mile range. 

It’s certainly not surprising that high-paying jobs at businesses like law firms would be located in the central city. But I point it out here to suggest that when thinking about job decentralization, it is necessary to focus on more than just raw numbers. For example, consider that the two primary drivers of the growth in the 10-35 mile band between 2002 and 2010 were education and health care, which together added 79,009 jobs. All other industries in this area combined to lose 23,100 jobs. So while the net gains on the edge of the region were impressive, they were likely heavily influenced by residential location decisions and demographic trends, such as aging populations requiring more health care services. 

A more thorough analysis of this issue will have to wait for another day, but for me, the important takeaway is this: We can’t just focus on job numbers when talking about decentralization – or really any aspect of economic development for that matter. We also must consider what types of jobs are being created and lost, how much they pay, and who is filling them.

Wednesday, April 17, 2013

Learning From The City Different

By Jim Vaughan, Senior Fellow.

I am writing this post in Santa Fe – one of America’s great and unique cities – and wondering, as I do every time I visit, why I don’t live here. 

As with most visitors, I come to enjoy the art and history of the place and for fine dining! But as a career chamber executive and now Senior Fellow at Market Street, I spend a good part of each visit thinking about how other cities could learn from Santa Fe. 

Lesson No. 1 – Santa Fe, early on, realized the importance of place and determined to capitalize on being Santa Fe. A landmark urban plan was adopted in 1912, the year of New Mexico statehood. The plan set out, in firm language, to protect the city’s streets against change that would affect their appearance. Fast forward 45 years, a group of citizens “imagined, drafted and lobbied for the landmark urban-planning guidelines that have kept Santa Fe looking like Santa Fe,” writes Jason Silverman in Santa Fean magazine. 

Lesson No. 2—Santa Fe has proven that arts can drive economic development. From early beginnings as an art colony in the first decade of statehood, “Santa Fe has grown to be the third-largest art market in the country, after New York and San Francisco—remarkable for a city of only 68,000,” writes Stacia Lewandowski in New Mexico magazine. On Santa Fe’s Canyon Road, there are more than 130 art galleries, studios and restaurants. The city of Santa Fe recognized Canyon Road’s uniquely beautiful combination of shops, studios, and homes in 1962, when it designated the Road a “residential arts and crafts zone.” 

Lesson No. 3—Santa Fe cares for and invests in public spaces. The city’s historic, cultural and geographic center is the Plaza at the end of the Santa Fe Trail. Visitors and residents enjoy Cathedral Park next to the Cathedral Basilica of St. Francis of Assisi. The newest and most popular park, the Railyard, opened in 2008 after years of planning and with significant public input. The Railyard is home to a vibrant mix of tenants such as the Farmers Market and Artists Market, Hispanic cultural center, and an eclectic mix of restaurants, performance art spaces, shops, and contemporary art galleries. 

Lesson No. 4—Being a state capital has its advantages. The Museum of New Mexico includes the History Museum and Palace of the Governors, Museum of Indian Arts & Culture, Museum of Art and Museum of International Folk Art. And while it’s not a gallery, the State Capitol features a spectacular collection of art by New Mexicans assembled since 1991 and valued at more than $6 million. 

Santa Fe’s commitment to planning and preservation throughout the 20th century is not without controversy. Architects and real estate professionals, for example, sometimes feel stifled by the design board and the “Santa Fe Style.” But the city’s neighborhoods have succeeded in avoiding being overrun by McMansions, view-obstructing structures, and development patterns that are indistinguishable from “Anyplace USA.” 

They don’t call it “The City Different” without reason.

Thursday, April 11, 2013

Five Outstanding Business Friendly Communities

By Jonathan Miller, Project Associate. 

According to a 2012 story by NPR, between 2010 and 2012, the phrase “small business” appeared over 10,000 times in the Congressional Record (the daily recording of what is said in Congress), more than “debt limit,” but less than “taxes.” In the same story, a GOP pollster recalls that “small business owner” tested more favorably with audiences than other monikers because, “Being a small-business owner is the American dream. It's the epitome of success. People respect that individual." Understanding the issues and challenges faced by small business is compelling, as those challenges often have relatively simple (if politically difficult) solutions. (a site that promotes and matches users to local service professionals) and the Kauffman Foundation recently released the results of their 2013 Small Business Friendliness Survey. The survey asked small businesses that use a battery of questions about the most common obstacles they face in their business. Showing continuity with last year’s results, small business owners rated licensing requirements as the most important factor when it comes to business friendliness – 30 percent more important than taxes. 

Market Street has worked in over 150 communities in 32 states, so it’s always a pleasure to bring extra attention to those places that are excelling. The following cities (and Market Street clients) were ranked highly in the Small Business Friendliness Survey. 


Overall Grade: A-
Best Category: Ease of hiring
2012 Grade: A

Atlanta may not be Austin or Silicon Valley in terms of entrepreneurship, but the stock and quality of small business owners is on the rise. In a report by the Kauffman Foundation in 2012, Atlanta had the second-highest entrepreneurial activity rate at 580 per 100,000 adults. Only Los Angeles posted a better score. Atlanta’s international population, world-class airport, and robust higher education assets create an enviable business climate that is conducive to innovation. Low levels of venture capital and traffic problems (real and perceived) continue to be serious concerns. Survey respondents dinged Atlanta with regard to ‘training and networking programs.’ Specific objectives in the recently completed Metro Atlanta Regional Economic Development Strategy call for regional investment in educating workers, establishing robust career and college pipelines, and proactively supporting entrepreneurial activity. Initiatives such as Atlanta Tech Village and Hypepotamus are already connecting entrepreneurs while providing common office space. 

Austin, Texas 

Overall Ranking: A+
Best Category: Overall
2012 Grade: A+

Austin is one of the most dynamic cities in terms of economic growth. Job creation has been abundant in the wake of the Great Recession, leading most, if not all, cities in overall job creation. Unsurprisingly, among the cities surveyed, Austin has a higher percentage of respondents who had previous entrepreneur experience. Further, the recent announcement that Google Fiber will be available in Austin increases the ability of entrepreneurs to access high speed internet in their homes. Survey respondents ranked Austin’s ‘zoning’ as the least business friendly aspect of the city. Finding the right middle ground in regard to zoning and regulations has been an issue in Austin, and both the city and chamber are working to find acceptable solutions. The most recent Opportunity Austin 3.0 doubles down on ensuring that zoning and permitting regulations are streamlined and as competitive as possible and the city recently selected a consulting group to lead the overhaul of the city’s Land Development Code. 

Nashville, Tennessee 

Overall Ranking: A
Best Category: Employment, labor & hiring (regulations)
2012 Grade: B

Nashville is an ascending economic powerhouse that is supplementing its country music roots with robust employment in health care, technology, and manufacturing. In fact, 75 percent of the entrepreneurs surveyed said they would encourage others to start a business in Nashville. Survey respondents also felt that ‘zoning’ in Nashville was a competitive obstacle. To address this, as well as other concerns, the Nashville-Davidson Planning Department, in partnership with many key organizations, including the Nashville Area Chamber of Commerce, is leading a two-year planning process to define a long-term vision for the city and county, which will include land use processes and zoning. The process, Nashville Next, is soliciting public input through many channels and is seeking to rally Nashville residents for the future of the city. 

Kansas City, Missouri 

Overall Ranking: A-
Best Category: Zoning
2012 Grade: Not included in survey

Kansas City is home to the Kauffman Foundation, one of the great supportive forces of entrepreneurship in the nation. Speaking of Google Fiber, Kansas City was the first city to receive the infrastructure upgrade and in February 2013, Brad Feld, a venture capitalist from Boulder, announced he was buying a house in Kansas City and holding a competition for innovative startups to compete for rent-free living and access to the fiber (see Evan Robertson’s recent blog post for more information). Kansas City also caters to its small business community via KCSourceLink, an agglomeration of business support services that cater to different types and stages of entrepreneurs. Survey respondents rated ‘‘training and networking programs’ as the least competitive aspect of small business friendliness. However, a quick look at the KCSourceLink Classes and Events calendar shows a plethora of opportunities for small businesses to engage in programming related to importing and exporting, technology, startups, marketing, and funding/accounting, among others. 

Richmond, Virginia 

Overall Ranking: B+
Best Category: Licensing
2012 Grade: Not included in survey

Richmond may seem like a surprising city to be ranked in similar categories as Austin and Nashville, but it has a very strong small business community. In fact, the city’s first business accelerator, Lighthouse Labs, opened in this year, and the city play will host to the inaugural Governor’s Business Plan Challenge, an undergraduate business plan competition, later this year. While the survey found that “ease of hiring” was rated as a challenge by respondents, which is not a trend found in other survey instruments. The Greater Richmond Partnership operates a robust BRE program, Business First, which touches many existing businesses and helps them to overcome obstacles to expansion. Results from surveys conducted as part of the program found that hiring and recruiting was not a problem experienced by existing employers, in fact, 73 percent of respondents rated workforce quality as good or excellent, and fewer than 20 percent indicated problems recruiting. Overall, Richmond ranked as the ninth-easiest city in which to do business.

Tuesday, April 9, 2013

Ponce City Market, A Tour

By Evan Robertson, Project Associate. 

I stand breathless in front of Atlanta’s former City Hall East – the now rebranded Ponce City Market. While the building gloomily occupies an entire city block along Ponce de Leon Avenue (colloquially referred to as “Ponce”) and is indeed a sight to behold, I am winded. After a last minute decision, I decided to leave the office (5:25 pm) to make it to a tour of Ponce City Market (5:30 pm) sponsored by the Young Planners Group here in Atlanta. I thought it would be about a ten minute walk and I’d miss introductions, but it turns out my judge of distance is not that good – a half mile stroll turned into a 1.3 mile walk/sprint. Luckily, I catch the tour just as they are leaving. But first, a little background. 

To me, Atlanta’s former City Hall East has always seemed lifeless. Every time I’d drive down Ponce, the building looked derelict. In truth, it has a storied history. Originally, the building served as a multipurpose facility for Sears, Roebuck, and Company up until the late 1970s. The remnants of its multipurpose use are readily apparent on the tour – more on that later. The building was then purchased by the City of Atlanta who used the space between 1990 and 2010, housing police and fire functions. Significant flooding problems and an aging building, however, limited the City’s potential use without incurring extraordinary renovation costs. In 2011, the City of Atlanta sold the property to Jamestown Development – an Atlanta headquartered real estate investment firm responsible for redevelopment projects such as New York’s Chelsea Market – and its partner Green Street Properties. The redevelopment effort is now being billed as Atlanta’s Chelsea Market. 

All told, the Ponce City Market redevelopment will transform 1.1 million square feet of mixed use space. The revitalized structure will include 300,000 square feet of retail and restaurants, 450,000 square feet of office space, and 260 residential units. 

The tour starts towards the back of the building on the ground floor. From this angle, you can begin to see the project’s enormity. If I could describe the takeaway of the tour in two words it would be: sustainability, connectivity. 

Often times, Jamestown’s sustainability efforts masquerade as historic preservation. It would have, arguably, been easier to demolish the entire building and start from scratch, or gut it, utilizing new, updated building material. However, the building’s developers and planners demonstrated deep respect for the property, its historic nature, and the treasures they uncovered while deconstructing the building. Yes, deconstructing. Instead of ripping out Ponce Market’s inner material, the redevelopment effort focused on removing and preserving many of its historic materials. For example, after removing the concrete floor laid by the City of Atlanta, they uncovered Sears’ original maple wood floors. Pictured above is the ground floor of Ponce City Market, it will serve as the major retail center for the development. The first-story ceiling is being removed in the center (left of the picture but out of frame) to create an “open-air” style mall. 

Also preserved are the building’s original steel window frames. In total, over 56,000 panes of window glass will be replaced with single pane windows, but, thanks to a highly efficient HVAC system, thick walls, and building-wide window shades, the Market is on track to be certified LEED Silver. 

The success of New York’s Chelsea Market is that it integrates into the overall street network, connecting 10th and 9th Avenues to foot traffic. Ponce City Market maintains this same spirit of connectivity, albeit more inclusive of a variety of transportation modes. For the car, the development’s internal street network will provide connectivity between North Avenue and Ponce de Leon as well as improving the shopping center intersection located to its north as you can see in this author’s crudely drawn Google Map. Glen Iris will also be routed into the internal street network. In terms of active transportation, Ponce City Market will directly connect to Atlanta’s Beltline allowing joggers, walkers, and bicyclists’ direct access to the development, the connection will terminate in Ponce Market’s second-floor open-air plaza. To make it easier on cyclists, the development will include plenty of bike parking with the possibility of a bike valet. 

The highlight of the tour is subtle, and is the realization that Ponce City Market is largely returning the Sears, Roebuck, and Co. building into its historic use, and in some parts it is transforming it. The top floors of the building will be dedicated to office space: Sears once held their regional office in the same space. In many portions of the building, you can see dark narrow strips of untouched flooring which was preserved by retail shelving which was used in Sears’ department store. The Market will also keep the rail spur which shoots directly into the building – this is where trains used to unload their cargo in Sears’ warehouse. The warehousing portion is being converted into a bar/open-air restaurant, utilizing a historic use to create something new. 

As a resident of Metro Atlanta, twenty-five years and counting, it took a six-month stint in Washington, D.C. to fully appreciate the merits of livable activity centers – this is even after I started my master’s in city and regional planning. Genuine, livable activity centers have to be experienced – it is a lesson you can only learn firsthand 

For some, Ponce City Market will serve as a first impression. Ponce City Market could have a small part to play in building a coherent, connected identity for the entire region. Throughout our facilitation of the Atlanta Regional Commission’s Regional Economic Competitiveness Strategy, the need for a regional identity was brought up time and time again by a diverse group of stakeholders. Ponce City Market, together with other livability efforts throughout the region, could edge us (rural, suburban, and urban residents alike) ever closer to realizing our interdependence by strengthening Metro Atlanta’s sense of place. It only takes a spark.