BBA Economic Digest

July 21, 2019

 

I recently did a SWOT analysis for a rural community, where I noted that vacant, blighted buildings in the downtown was a problem that needed to be addressed.

 

Vacant and blighted housing is not just an urban problem. I see it in rural areas and small towns, which can have a vacancy rate nearly twice as high as major metro areas.

 

In thriving cities, abandoned structures are often quickly snapped up by investors. Not so in distressed cities and small towns — the very places that can least afford to fix the problem.

 

Abandoned properties are expensive to police, drag down the value of surrounding properties, and reduce tax revenues. Detroit is spending $256 million in federal grants to tear down vacant buildings, and Mayor Mike Duggan is pushing a $200 million bond issue to help eliminate blight by 2024.

 

Gary, Indiana, has the highest vacancy rate of single-family housing in the country with more than 25,000 empty lots and nearly 7,000 vacant buildings.

 

 

The Ballad of Rebel Roy

 

Constructive criticism can be, really should be a good thing, if it is offered for purposes to help. But sometimes people can't see it that way.

 

True story. A couple of years ago, I was in an industrial park in a Southern state when the local economic developer arrived onsite in his personally-owned pickup truck sporting, you won't believe this, a Confederate battle flag vanity plate in the front.

 

It's a free country and you have the right to be stupid to put what many would consider (myself included) a racist emblem on your personal vehicle. But this was an economic developer representing his county, meeting site consultants (I was one of three) in a county-owned industrial park for business purposes. (Why he didn't arrive in a county vehicle, I don't know.)

 

Leave it to say, I couldn't let it go. I said something like, "You know, many people would find that (pointing to the vanity plate) quite offensive, including potential corporate investors. So why go there?"

 

Naturally, he viewed my constructive criticism as a personal affront and, this is a southernism, "bowed up." Translation: Got mad. "This is my truck and I'll blah, blah, blah."

 

He was gone within a year.

 

 

Josey's Edge 

 

One of my favorite movies is a western made in 1976 called "The Outlaw Josey Wales." The antagonist, a bitter man who lost his family during the Civil War, has an instinct for putting himself in a position to prevail in dangerous situations. He always looks for "an edge."

 

I believe that communities should do the same, and a recent McKinsey Global Institute report suggests as much. While some high-performing big cities are poised to pull further ahead of the rest of America, there are the "niche cities" and a "mixed middle" communities that have found success by leveraging unique features.

 

That is exactly what we look for when doing a SWOT analysis in a community. We look for the edge, a strength or strengths to be leveraged. McKinsey found "small powerhouses," "silver cities" and "college towns" as places that build on their strengths. They find their edge. (Addressing weaknesses is a good idea, too.)

 

The "mixed middle," home to about a quarter of the U.S. population, are cities that could see growth or decline depending on how proactive their strategies are.

 

Nothing is written in stone. Leadership can make a difference, can turn things around. I absolutely believe that or I wouldn't be doing economic development consulting work.

 

 

What Now?

 

There are a lot of feel-good, philosophical postings on LinkedIn, some of which are pretty good. Most not so much.

 

But if you look at my postings, you can tell immediately that's not what I'm offering. Far from it. I prefer addressing topical subject matter that has a huge effect on economic development. That's how we roll.

 

P.S. Smell the stars, reach for the flowers and dance like no one is listening.

 

 

Banjo Dean Sez

 

Perhaps it's because I'm active on LinkedIn and Twitter that many of my connections here want to connect with me on Facebook. I'm sorry, but I will seldom accept.

 

(I do want to connect with you on LinkedIn and Twitter.)

 

While I do have a BBA business page on Facebook, which is public, I'm hesitant to connect with economic developers and corporate executives on that platform.

 

The reason is simple: Many of my Facebook "friends," and I use that word quite loosely, are ne'er-do-well musicians who know nothing about business dealings other than buying drugs. I'm also connected on Facebook with long-time friends and family members who aren't so sorry.

 

I never post anything on Facebook that would prove embarrassing -- although there was that one video where I said, "Here, hold my beer and watch this."

 

So let's keep our professional connections to LinkedIn and Twitter and all will be fine.

 

 

This is the Motor City

 

Really good things are happening in Detroit. The latest: Dakkota Integrated Systems will build a 600,000-square-foot parts plant on the city's east side that will employ 625 people and supply parts to the nearby Fiat Chrysler's Jeep plant.

 

The news comes as the city angles for suppliers to expand in Detroit alongside FCA's $2.5 billion investment and 5,000 new automotive jobs planned at two east-side plants.

 

Mayor Mike Duggan's administration will ask the Michigan Strategic Fund and City Council for a 10-year Detroit Next Michigan Development Corporation Renaissance Zone abatement on 100 percent of all real property tax, corporate income taxes and utility user taxes.

 

Detroit gave similar tax breaks to Urbana, Ill.-based auto supplier Flex-N-Gate to build its new $160 million plant in the I-94 Industrial Park, which supplies parts to Ford Motor Co.'s Michigan Assembly Plant in Wayne.

 

As Eminem would say: ""This is the Motor City and this is what we do."

 

 

Ikea Out

 

The plant in Danville, Va., produces wood-based furniture, primarily shelves and storage units, for stores in the United States and Canada.

 

In justifying its decision to end operations, Ikea pointed to raw material prices, which it said are higher in the United States than Europe. Ikea operates plants in European countries including Poland, Russia and Sweden.

 

The Danville facility, which opened in 2008 and employs 300 workers, is scheduled for shutdown in December. 

 

 

Brilliant!

 

Josh Phelps, president of Winchester Metals in Winchester, Va., came up with the idea for the Widget Cup.

 

The event -- sponsored by the Frederick County Economic Development Authority, local businesses and local high schools -- is a competition in which eight-person teams design and build a pre-determined widget and present their prototypes to a client.

 

Businesses connect with team members through the roles of judges and team resource specialists during the event.

 

Now how cool is that? Way to go, Winchester!

 

 

 

 

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