Lakewood + Economics

[Jim O'Bryan]

Monday morning let's get all warm and fuzzy.

We always hear about Economic Development, and how it can help or even save a city. This could be true I have seen a lot of powerful presentations as of late, of course not as good as Savannah's!

But let's talk about the first part today. Lakewood's economy and where we see it headed. I was reading a piece in the PD today where it talked about the pressures on middle management with the collapsing economy. Where does this leave Lakewood? Will 500 low paying jobs save Lakewood or even help. Would 500 middle paying jobs help? Is there any amount that helps?

Or should Lakewood plan for the coming depression? Be ahead of the curve?

Any thoughts?



.

[Charyn Varkonyi]

VERY roughly speaking...

500 minimum wage jobs with an average of 30 hours per week per worker would generate about 67,725.00 in income taxes for the city. Add to that the additional amount of money generated by the sale of gas, food, misc. items in neighboring retail establishments and you can see that there is a fairly tangible benefit.

500 middle paying jobs (35k /year) would yield approximately 262,500 in taxes and probably a greater amount of misc spending as well (due to the increased disposable portion of income).

There are many more considerations - but this is a start.

Peace,
~Charyn

[ryan costa]

there are certain factors to take into account. People making minimum wage who live and work in the city are less likely to drive cars. Therefore they'll do most of their shopping and consuming in Lakewood. This means more sales tax. They're also more likely to qualify for federal assistance programs, which brings more money to lakewood, especially if they are spent on expensive stuff like Healthcare at the lakewood hospital.

Middle Income people are more likely to have cars. They drive the cars to shop at shopping meccas. Every municipality competes to develop a greater shopping mecca, which follow a pattern of going out of business or half vacant before they pay for themselves. As Chris Rock said, "There are two kinds of malls....". Now that the World is Flat, the big developers can collect revenue before each new house of cards collapses.

[Stephen Calhoun]

Ryan.

develop a greater shopping mecca, which follow a pattern of going out of business or half vacant before they pay for themselves.

Would you supply data to back this generalization up?

Thanks in advance.

[Joan Roberts]

Mr. Calhoun.

The evidence is anecdotal mostly but there are plenty of cautionary tales to back up that claim.
We can see some of that evidence on a couple of one-tank trips. To Columbus and its failed City Center. Or to Pittsburgh, where the city gave buildings to Lazarus and Lord & Taylor, both of which are kaput.
From what I've seen of retailers, they're a pretty savvy lot. They know what's a good bet, and what isn't. The city of Avon made the developers of Avon Commons dance like a circus pig, and they were happy to do it, because they knew the profits would be there. If a deal can't get done without the public footing the bill, my guess is it isn't viable in the first place (that goes for residential, too).
I'd like to see evidence, anecdotal or otherwise, of publicly-financed retail that did work.

[Stephen Calhoun]

Highland Park Center, Dallas (1931)

Ala Moana Center, Honolulu, Hawaii (1949)

Scottsdale Center, Phoenix (1951)

Roosevelt Field, Garden City (1956)

Woodfield, Schaumburg, IL (1971)

Five big ones. There are many many more. Shopping Centers are well studied and of great interest to urban studies wonks, sociologists, and, economicists who specialize.

Well run, they make good investments.

***

Big real estate plays are deeply integrated with civic and legal requirements. Although Ryan didn't mention 'publicly financed,' in a well-qualified manner, nevertheless, I would guess almost every shopping center requires some kind of public-private partnership. Obviously this can include sweet deals too in such a mix.

***

But, the point is: there is no worthwhile deterministic generalization about lifecycles and shopping centers. There's only the facts on the ground; the various responses to complicated conditions, and, as always, the virtues of sound management and savvy risk management.

At the same time, obviously there are numerous cautionary tales too. When a private/public investment in amassed retail implodes, it's often very ugly. Euclid Square; Severance Center (on the way back,) Randall Park, to name a few that were crushed as NEO became severely over-built and white flight moved the center of gravities outward.

[Grace O'Malley]

Look at Shaker Square - just lost Ann Taylor.

I would guess almost every shopping center requires some kind of public-private partnership.

Now I'll ask you - why do you make this statement? Do you have evidence that this is true?

Why would this type of business venture REQUIRE public assistance? What makes it different from other investments?

[Joan Roberts]

I can't vouch for how much public financing was involved in the cases you cite, but Scottsdale, Honolulu, and Schaumburg are worlds apart, it seems, from the scenarios Mr. Costa was describing.
Of course, virtually ALL development has some element of public support, if only for things like road repair and water/sewer. The situations like downtown Pittsburgh, where the city basically built or gave buildings to retailers, are quite different.
And please, don't get me wrong. I quite enjoy shopping centers. Crocker Park is among my new favorite places. I just like them built with private dough.

[Jim Dustin]

I’ll maybe take a hit for this because I’m an ex-pat and left Lakewood in 1978. However I have warm feelings for the people and friends who live there and certainly want the best for them. I have fond memories of Lakewood. So my observations from afar are with good intentions, but lack any empirical data (end qualifier).

I think Joan was spot-on over in the Crocker thread about gaining some research insight about Lakewood and why people choose or don’t choose to live there. Don’t be offended, but I would submit that Lakewood is a brand. Crocker Park (whatever the hell that is) is also a brand. Real Estate developments with condos and shopping are brands, etc. People are brand conscious when making purchasing decisions and I would venture that a type of branding is in play when thinking about where to live (quality of life, climate, transportation, shopping, safety, etc).

The thing about brand management and successfully selling a brand is that it has to be backed up with the goods. A unique proposition. It will quickly become fluff if the story is flawed. If Crocker is a crock, people will figure that out in time and it will wither. If it’s consistent and well run, it will gain momentum.

When I left Lakewood, it was still the City of Homes. Its hallmark was always as a wonderful suburb to live in, while actually working in Cleveland. One of the unique things about Lakewood is that it avoided major highways intersecting it. New communities where I live in Florida, all have big highways nearby, making it relatively easy to hop onto and off of to get to these shopping fake towns, malls, gated communities or even industrial parks.

Lakewood is somewhat hidden in that respect. The ways to get to Downtown Lakewood are off of I-90, or Detroit, or Clifton and involve traversing long side streets full of homes. It lacks a commercial corridor of retail-type stores that connect themselves by way of commercial zoning, other than those that naturally occur on Detroit and Madison. Creating a corridor from I-90 down to Detroit on Warren would be impossible. Widening Detroit from W117th would also be impossible. Buying up whole streets to convert to retail didn’t play very well up near the Valley with the eminent domain case, so trying to build a corridor off of Clifton (say up Warren Road) would also be impossible.

So, it sort of seems like Lakewood’s biggest and oldest asset of being a great place to live is somewhat at odds with newer concepts of upscale shopping because you have to find someplace to put it-- and where non-residents are also interested in supporting.

If you could totally revitalize downtown, stop traffic on Detroit (by diverting it through some kind of drive around loop), provide a lot of parking and maybe bring streetcars back, that might be something that could be branded as unique. It’s an interesting challenge and I’m sure threads like this will help come up with some ideas.

[ryan costa]

Most of my evidence is anecdotal. And from a book I read on suburban sprawl years ago. It described the process whereby massive shopping malls are built: A lot of trick financing is involved. Usually this begins with at least a large tax abatement. Then books are then structured so that revenue lines up with the scheduled Depreciation Expenses in such a way as to get more sweet tax refund or exemption deals. Then ownership or "rights" to the property are divied up and sold in a piecemeal process. Though I gathered this was about the much larger malls in New York and out west.

My anecdotal evidence is much more poignant. To begin with I will state that retail space alone is not an asset: Downtown Cleveland is awash with empty floor space, most of it in buildings constructed of such craftsmanship that it would be virtually impossible to recreate them today. Madison Avenue in Lakewood has a lot of ghost storefronts. Arterial roads in Cleveland are full of empty storefronts.

The trend of ghost shopping centers is observed more readily outside of Cuyahoga County though, in Counties where sprawl is newer but white flight has slowed down. Lorain County is a checkerboard of half-empty shopping centers and Plazas built within half-miles of newer shopping centers and plazas. Westgate Mall was recently bulldozed, despite having plenty of parking and space. Seneca County is similar.

The idea of building shopping meccas implies it is a gamble on attracting a large amount of commuter or tourist shoppers. Now that President Bush has officially admitted we are addicted to Oil it should be obvious how this happened. Given we are sometimes still officially "at war" over oil it is reasonable that new construction of retail designed to attract car traffic should be discouraged. We have plenty of such places existing already

The idea of building a strong brand must be taken to its ultimate conclusion in a world that is flat. Alternative or older brands will be marginalized. The popularity of a new shopping center means it is no longer cool to shop at the preceding shopping center. You can see people shopping at the older shopping centers and just feel they ain't cool any more.

[Joan Roberts]

When I left Lakewood, it was still the City of Homes. Its hallmark was always as a wonderful suburb to live in, while actually working in Cleveland.

That's been the biggest change I've seen since my first sojourn in Lakewood in the mid-80's and now. It SEEMS that as many people I know are going south or west to work, as opposed to east. It SEEMS that 8 a.m. traffic tie-ups on the Shorway are rarer now than 20 yrs ago.
I just don't believe downtown Cleveland's impact on Lakewood is what it was so many, many years. That's another thing I'd love to know, with cold hard facts. Where are we working?
I'm still skeptical of "branding" though. I still think there are too many income levels, lifestyles, socioeconomic groups, etc. to effectively promote a "brand."
You can work it all you want, but when your new next-door neighbors put a full set of upholsltered furniture on their front porch and park the rusted '83 Dodge out front, there goes your "brand."

[Joan Roberts]

When I left Lakewood, it was still the City of Homes. Its hallmark was always as a wonderful suburb to live in, while actually working in Cleveland.

That's been the biggest change I've seen since my first sojourn in Lakewood in the mid-80's and now. It SEEMS that as many people I know are going south or west to work, as opposed to east. It SEEMS that 8 a.m. traffic tie-ups on the Shorway are rarer now than 20 yrs ago.
I just don't believe downtown Cleveland's impact on Lakewood is what it was so many, many years. That's another thing I'd love to know, with cold hard facts. Where are we working?
I'm still skeptical of "branding" though. I still think there are too many income levels, lifestyles, housing variants,socioeconomic groups, etc. to effectively promote a "brand."
You can work it all you want, but when your new next-door neighbors put a full set of upholsltered furniture on their front porch and park the rusted '83 Dodge with the wooden bumper out front, there goes your "brand."

[Stan Austin]

Joan--- I think your perceptions on the multi direction of the traffic patterns is accurate.
Not as many people, businesses and institutions are congregated in downtown Cleveland any more. One only need visit Euclid Avenue during a typical weekday. For all intents and purposes it's deserted.
Which leads me to another observation that might be off topic.
Today's PD described the new busses for the Euclid Corridor.
Where are the passengers who are expected to ride on these things?
Stan Austin

[Bill Call]

Today's PD described the new busses for the Euclid Corridor.
Where are the passengers who are expected to ride on these things?
Stan Austin

If the Euclid Corridor Project was a clever scam to get the feds to pay for repaving Euclid Avenue it was a great idea.

If city officials really think that people will shop downtown because they removed two lanes of traffic, eliminated on street parking and added a dedicated bus lane I have to wonder about their intelligence.

When you think of the Federal Department of Transportation don't think of getting your street paved, think of bridges to nowhere and the Euclid Corridor Project.

[dl meckes]

I'm still skeptical of "branding" though. I still think there are too many income levels, lifestyles, housing variants,socioeconomic groups, etc. to effectively promote a "brand."
You can work it all you want, but when your new next-door neighbors put a full set of upholstered furniture on their front porch and park the rusted '83 Dodge with the wooden bumper out front, there goes your "brand."

That depends. The City by the Lake (for instance) isn't going to change as a branding concept despite the neighbor's idea of outdoor art. (I'm not discounting the importance of the point you make.)

Solon does not have a lake view.