Archives for the month of: November, 2010

Last summer a conversation over coffee delivered more than a caffeine buzz. It enlightened me on the struggles currently facing many small businesses. My tablemate, co-owner of a window-cleaning firm, shared his thoughts with me about the regulatory hurdles facing his new five-person business. He rattled off a laundry list of to-do’s—quarterly  tax filings, workers compensation, licensing fees, registrations, and legal and accounting costs. The mounting burden of these fiscal obligations was strangling his business, he said, adding that “We literally have to bring in $13,000 per month for my partner and I to make minimum wage.”

Creating economic opportunity and jobs is the topic on everyone’s agenda these days. At the federal level, fiscal stimulus, a popular Keynesian economic tool, has been tried with little effect. And local government has been equally ineffective, mired in declining tax revenues and mounting deficits. In general popular sentiment suggests that while government cannot ensure substantive job growth, it can play a role in loosening up some of the barriers that stunt businesses growth.

As cities and metropolitan regions seek to recalibrate their strategies amid the current economic downturn, a concept known as “economic gardening” is rapidly gaining traction among job-creation advocates. In short, cities embracing this approach are tasked with connecting new and emerging businesses with the basics resources they need to succeed. This may include grants, market intelligence information, inexpensive startup work space and other key elements required to spur growth.

The basic premise of economic  gardening is that “home grown” entrepreneurs are the true engines of employment expansion. Local economic growth best occurs when the cultivation of local entrepreneurship is emphasized over the attraction of businesses from outside the community.

The genesis of economic gardening dates back a couple of decades, when the city of Littleton, Colorado (pop 41,000) began leveraging its local businesses after the area’s largest employer relocated. Since 1989 this grassroots project has contributed 15,000 jobs to the local economy through the use of non traditional economic development incentives. The success of Littleton has led to a groundswell of similar projects in cities like San Luis Obispo, Santa Fe, Oakland, and Berkeley.

A report from the Center for Local, State and Urban Policy at the University of Michigan suggests that growing numbers of local cities and towns are also focusing their efforts on existing small businesses rather than trying to persuade new businesses to relocate to their area. This supports the contention of many economic developers that most new jobs in a local economy are being produced by a community’s pool of local small businesses.


So how can economic gardening help cities harvest small business opportunities in their communities? For starters, they can address the complex labyrinth of taxes, fees and regulations imposed on new and existing companies. Reducing the regulatory burdens which cause businesses to struggle to gain traction is critical to moving a city’s economic development efforts forward.

Mark Cuban, an entrepreneur extraordinaire and the mercurial owner of pro basketball’s Dallas Mavericks, has been an outspoken critic of barriers to small business growth. He believes that the reinvigoration of the US economy largely depends on relieving new businesses of the financial start-up burdens that can hinder job creation. In his online site BlogMaverick dot com he espouses the notion of no taxes of any kind on small businesses comprised of 25 or fewer employees. Sales taxes would be collected and remitted, and the business owner would pay income taxes on his or her personal earnings, but corporate earnings would not be taxed. At first glance, this may appear a bit radical; however Cuban’s perspective makes a great deal of sense in terms of helping cash-strapped businesses gain their footing.

Cities can also boost their economic gardening efforts by actively supporting the reuse of empty  storefront and housing stock into shared space for small businesses. In response to the proliferation of Wi-Fi-enhanced coffeehouses as third places for budding entrepreneurs, low-cost shared office settings are sprouting up in local cities throughout the nation. Building off an emerging trend called “co-working,” these sites often serve as incubators of shared collaboration for promising startups and  second-stage companies.

Janna Marlies Santoro, cofounder of the Sacramento-based Think House Collective and an energetic advocate of shared office arrangements for small businesses, believes that small business owners, freelancers, self-employed professionals and other independent workers will be significantly more successful in a community environment where necessary support is readily available. “Independent professionals need support from others to make their business fly,” she says, “regardless of what form that support takes – encouragement, collaboration or feedback on a project. “Co-working provides that environment minus the upfront capital, long-term lease or huge overhead costs.”

Santoro says that amid the layoffs that have affected many people, self-employment often isn’t the first choice. But in a co-working community, that hesitant person can find the courage to pursue an independent career. “People are more comfortable stepping into the freelance role when surrounded by a community that is willing to provide knowledge and expertise, and sometimes even refer clients,” says Santoro.

This spirit of shared small-business support represents a key element of effective economic gardening. It reflects a tradition of collaboration rooted in the startup-rich Silicon Valley—a trend that highlights the value of complementary business clusters and market intelligence. It also illustrates the concept of small business agglomeration, where a dense concentration of a particular industry within a specific geographic region serves as a spark to knowledge spillovers and innovation across firms. One example of  this would be Folsom, California’s success in clustering emerging companies like Altergy Systems and Jadoo Power, which specialize in the rapidly expanding hydrogen fuel cell technology market.

Growing local economies through the harvesting of existing businesses is a wise economic development investment for cities large and small. This idea coupled with untangling the maze of regulations imposed on small businesses can pay huge dividends and put our country back on the road to sowing seeds of plenty.

Michael Scott is the editor of Urban Engagement WebCity.

 

Symbolic of many historic European cities, alleys have long been a prominent element of the urban environment. As service corridors between the front, side or rear of buildings, alleys over time became synonymous with crime, vice, and bottle-toting street vagrants, and thus rendered unappealing for public use.

In a refreshing reversal of these perceptions, cities are increasingly recognizing the importance of alleys as key assets to their social landscape. Transcending their traditional role as corridors of commercial delivery and trash collection, many alleys are being repurposed into pedestrian friendly, economically viable public spaces that promote walkability and community. Moreover, projects supporting the “greening” of alleys are gaining traction amid the global push toward environmental sustainability.

In many cities, alley revitalization efforts are now front and center in the push to make more efficient use of urban space. As local governments seek ways to boost declining revenues, these thoroughfares are now viewed as potential nodes of economic activity. Their scale—often too narrow for substantive vehicular traffic—makes them the quintessential walkable thoroughfares. Also in the plus column is their value relative to bike storage, recycling and other functional possibilities.

While intentional in its purpose, much of what is taking place in alley revitalization has a grassroots, organic feel to it. In the über-hip Midtown District of downtown Sacramento, citizen-infused momentum is building around alley improvement efforts. The local Alley Improvement Alliance has identified 41 alleys in midtown that would benefit from redevelopment, improving aesthetics as well as facilitating creative uses for nearby businesses and homes. This initiative in California’s capital city highlights how urban design can be a tool for transforming gritty alleyways into attractive, functional spaces. The hope is to attract pedestrian activity into these spaces, thereby turning dark passages into catalysts for civic and economic vibrancy.

Models for successful alley regeneration can be found in myriad cities across North America. Ferndale, Michigan, a Detroit metro-area city with a population of 22,105, features a downtown alley that provides public space for local events, as well as outdoor restaurant seating for eateries that back up to the alleyway. Acquired by the City of Ferndale through a land swap with a local law firm, the reconstituted alley nestled in the core of its 1920 downtown has been landscaped with trees and flowers, giving it an attractive feel amenable to pedestrian traffic.

In the intellectually rich environs of Cambridge, Massachusetts lies “Brattle Walk,” a mid-block pedestrian alley featuring a tree-shaded streetscape stretching from Brattle Street to Mount Auburn Street in Harvard Square. A favorite trek of book-laden students and academics alike, this alley facilitates community and mobility for the campus.

Despite the obvious walkability advantages, efforts undertaken by municipalities and business improvement districts to pursue pedestrian-friendly alleys in US cities have met with varying levels of success. One of the biggest roadblocks is the logistics around converting what has been a vehicular access thoroughfare into a path amenable to pedestrians. Often, local drivers use alleys as a cut-through thoroughfare for avoiding traffic along main arteries. And in commercial districts alleys are an access node for trash haulers or trucks making deliveries to merchants whose stores back up to the alley.

To facilitate the pedestrian-friendliness of alleyways, commercial districts must either restrict delivery and trash-removal access to designated hours or close the passageway down completely. Pasadena, California, represents one model where delivery access is strictly controlled and enforced. Deliveries in the Mercantile Alley of the Old Pasadena Management District are restricted to the hours of 11:00 pm and 2:00 am. The delivery flow is managed through retractable bollards, which are wooden or iron posts that open and close during the designated hours. Trucks that exceed these time limits must call the municipality management to obtain special permission for the bollards to reopen.

In addition to the economic and community development benefits associated with alley revitalization, cities are striving to incorporate environmental practices into their framework. Chicago’s Green Alley program is perhaps the best example of this sort of initiative. Considered the alley capital of the US, Chicago boasts more than 13,000 of these passageways, encompassing more than 1900 total miles. The city’s ongoing repurposing effort has converted alleyways into green, permeable thoroughfares that absorb storm water and improve local water quality.

Fostering clean, environmentally sustainable alleys represents a fundamental shift from the trash encumbered, grimy repute that these spaces are often known for. In response, many downtown business districts are exploring trash management practices that incorporate new forms of collection and recycling. One of the most popular trends has been to exchange unsightly collection dumpsters for enclosures that accommodate commercial trash compactors and recycling containers. This offers a number of benefits over traditional trash collection methods: fewer hauler pickups, which means lower collection costs; better management of waste volumes, odors and rodent associated problems; and more efficient use of alley space.

Boulder, Colorado, has perhaps some of the most progressive efforts under way in support of the “greening” of its alleyways. The city currently offers a merchant program to incentivize environmentally sustainable waste reduction activities such as recycling and composting. City subsidization of composting provides merchants with a $2.50 per-cubic-yard reduction on their composting invoice when they elect this service through their designated waste hauler. The city has also moved toward the adoption of a “single stream” recycling system with haulers, enabling merchants to mix all recyclable items together, with the goal of reducing trash collections to once a week.

Despite their history as dark, abandoned corridors decorated by graffiti-laden dumpsters, unsavory characters and delivery trucks, alleys are now finding value as nodes of public vitality and economic activity. These long underused passageways now represent key avenues of community connectivity and civic pride.

Michael Scott is the editor of UrbanEngagement WebCity

Six months ago, “Paul” was hired as a physician specialist for a top-notch, regional medical center. Even though he is already seeing a heavy case load of patients, Paul’s acclimation to the work culture has been smooth, and his work experience has been nothing short of spectacular. Overall, Paul feels like the medical center is in alignment with his passion, interests and skills—a professional environment that he would like to call home for the foreseeable future.

However, Paul is experiencing a sense of angst with one aspect of his life: his lack of fondness for the geographic region he lives in. Residing in a suburban condo quite a distance from his work, Paul is less than thrilled with the 30-minute, high-stress commute he endures twice a day, every day. In tracking his expenses, he found that his combined transportation and housing costs represent 63% of his take-home budget, hardly what he envisioned for his first professional job. His family is 1,500 miles away, and the surrounding area offers few activities for young singles and outdoor enthusiasts—two components topping his lifestyle list. While Paul’s professional life is trending upward, his personal life is headed south.

Paul’s dilemma is now common ground for many Americans: namely, the importance of aligning career aspirations with geographical choices. Regrettably this idea runs counter to traditional approaches, which dictate that a person’s career be viewed in a vacuum, disconnected from lifestyle aspects that bring meaning and fulfillment to our life. Consequently many of us fall prey to a “live to work” philosophy that leaves us unfulfilled across the broader spectrum of life.

Unlocking the delicate balance between career and lifestyle involves an intentional commitment to engaging these two elements from a holistic perspective. It requires an honest assessment of personal interests, with the goal being an alignment across lifestyle and geographic options. This unblinking appraisal should include a realistic salary and cost of living factors, which dictate the core essence of livability.

Sadly, many Americans’ lifestyle expectations are unsustainable. The prospect of tighter budgets means that career and geographical options must be considered even more carefully. Weighing the pros of cons of career options becomes critical for determining which geographical choice allows the most efficient use of personal spending resources. In short, your income should closely counterbalance the cost of living variables in any given region.

Several recent studies conducted by the Urban Land Institute’s Terwilliger Center for Workforce Housing suggest that a typical household spends upward of 60% on housing and transportation costs. This underscores why where you live is important in managing personal finances. Factors such as public transportation, bicycle-friendly options, and walkability provide cost-effective options for   commuting to work and desired recreational amenities. And while home ownership remains a cornerstone of the quintessential American Dream, the freedom of not having to endure the pressure of a mortgage and property upkeep should be given consideration. Renting may soon evolve into the new normal as growing numbers of professionals seek the inherent flexibility that this option provides.

Additional elements in determining an ideal location include leisure interests, climate, community safety, and schools. Economic vitality is a critical component in terms of good paying jobs and desired professional opportunities.

Despite the current economic barometer of high unemployment rates, rising home foreclosures, and stagnant wages, many areas of the U.S. continue to fare well during this downturn. According to the Milken Institute’s Best Performing Cities 2010 report, which  identifies the best cities nationally for creating and sustaining jobs, Texas’s metro areas snagged five of the top-ten spots: (1) Killean-Temple-Ft Hood (2) Austin-Round Rock (4) McAllen- Endenburg-Mission (9) El Paso (10) Houston-Sugarland-Baytown. Huntsville, AL, an emerging high-tech manufacturing hub in the South was ranked third. And Anchorage, AK, rose to 8th, after achieving a prior slot of 40 on the 2009 rankings.

In this economy, many job seekers may be tempted to point the moving truck toward cities with hot employment prospects; however, a wiser approach would be to measure these locations against a predetermined lifestyle standpoint.

Recent economic studies suggest that our nation’s business expansion is trending toward smaller metro markets, many of which are anchored by colleges and universities, health care organizations, and flight-accessible airports. Rarely mentioned Sioux Falls is among these types of cities, boasting a low unemployment rate and no state income tax. Being situated on the I-90 corridor, a major interstate connecting Boston and Seattle, also bodes well for its future economic development fortunes.

College town locales, such as Iowa City, IA, Morgan Town, WV, and College Station, TX, also are faring well in terms of job markets and quality of life.

Austin, another college town, has emerged as a destination of choice for many young professionals attracted by the city’s healthy economy, sense of community, reasonable cost of living, and hip live music scene. On the flip side, the area does not bode particularly well if a person is seeking proximity to winter sports such as skiing, or has a disdain for hot, humid summer weather. Then there is a city like Boise, which boasts an emerging high-tech economy, community-oriented values, low housing costs, and a strong university presence. It also has a surprisingly vibrant nightlife in its downtown corridor that has become quite popular with the younger crowd. Here’s the caution for those who may be considering a move from a big city: Boise lacks the sophistication and social and cultural amenities commonly found in larger metropolitan areas.

Urban critic Joel Kotkin touts the growing numbers of Americans that continue to espouse the benefits of smaller “edge” and rural communities. This trend is supported by a recent “Best Places for Jobs” survey developed by the Pepperdine School of Public Policy. The results showed that the top employment centers are increasingly sprouting up in smaller locales like Sioux Falls, Jacksonville, NC and Bismarck, ND.

What about relocating to an area for lifestyle gains? In some cases, extended family considerations come into play. Or it could be a desire to return to one’s hometown. Interest is growing in make a career or lifestyle move to rural settings—places where real estate and health care are more affordable. This, however, can mean significant lifestyle changes if one is accustomed to a big city.

For the Millennial crowd, the boundary lines have expanded even further as growing numbers of Gen-Yers consider various life/work opportunities domestically as well as internationally. With their fervent “work to live” mantra, they are attracted to employment-dense locales that support compressed work weeks, reasonable work hours, flexible schedules and professional development opportunities. This group has an entrepreneurial spirit and a propensity for business start-ups, coffee houses, co-working sites and other “third places,”–highly desired settings for this demographic cohort.

As many Americans continue their downward financial spiral in tandem with the stagnant economy, decisions on where to live will gain equal footing with what career to pursue. This involuntary financial course correction will force us to reevaluate the self-indulgent mindset that has dominated our nation’s ethos. Smarter, more sustainable lifestyle options will become the norm.

The path from here to there will require more thoughtful choices on how to become better stewards of our time and money. But it’s a journey worth taking, because the modalities of place are a powerful factor in the equation of career and life satisfaction.

Michael Scott is the editor of Urban Engagement Webcity