BBA Economic Digest

December 8, 2019

 

 

A Story to Remember

 

The best stories are the ones we remember. And we remember stories because it helps us make sense of the world. Here's a story that I heard last week while attending Consultant Connect's ECONOMIX 2019 in Charleston, S.C.

 

In 1995, the federal government decided to shutter the Charleston Naval Base. About 22,000 jobs were eliminated in one fell swoop. Fear has always been a great motivator to bring people together to get things done. And that is exactly what happened in Charleston.

 

In a region wracked by war, hurricanes, and believe it or not earthquakes (South Carolina averages 10-15 earthquakes a year below magnitude 3.), the three-county Charleston region came together to reinvent itself.

 

Today, it is the only place in the world where there are multiple automotive assembly plants (Mercedes-Benz Sprinter vans in North Charleston and Volvo cars in Berkeley County) and a wide-body jet manufacturer (Boeing in North Charleston). And all of this in the past 10 years.

 

The former naval base is now home to dozens of government agencies, nonprofits, academic institutions and companies that have moved into part of the vast 3-mile-long complex by the Cooper River.

 

Since the naval base closure, there have been nearly 34,000 new jobs created in Charleston County alone with a total capital investment of about $6.39 billion. The metro area's current labor force of 390,000 is growing three times faster than the national average.

 

Every place has a story or stories worth remembering. Bouncing back from adversity, one of community resilience is what particularly resonates for economic development organizations.

 

Those are the stories worth telling. Those are the ones that I remember.

 

Booming with Tech

 

The website CharlestonWorks reveals that a thriving local tech economy in the Charleston metro area. Of the 480 companies listed, 48 are aerospace; 23 are biomedical; 69 are creative; 48 are defense; 126 are software; 38 are tech products and 128 are tech services.

 

In its Annual Wage and Job Growth Survey, the Charleston Digital Corridor reports that the average annual wage for companies participating in the 2019 survey is $93,183, more than twice the state and regional average wage levels of $43,210 and $46,200 respectively.
 

Just over 54 percent of the companies participating in the annual survey reported that they have added jobs in 2019 with 91 percent expecting to continue hiring into the next calendar year.

 

Three cities in the Charleston area -- Charleston, North Charleston, and Mount Pleasant -- rank in the top 10 "boomtowns" in America, according to a newly released study by SmartAsset.

 

Charleston ranked No. 8. Mount Pleasant, a large suburban town in Charleston County, ranked third, and North Charleston, which sits partly in Charleston, Dorchester, and Berkeley counties) was ranked ninth.

 

Speaking of boomtowns, I had the opportunity to visit a software company by the name of "BoomTown" in North Charleston. Founded by a local entrepreneur in 2006, the company's software is designed to help generate sales leads for residential real estate agents and brokers. BoomTown has more than 300 employees and is booming.

 

 

Dean's Stamp of Approval

 

Economic developers need not my stamp of approval for anything they do.

 

That said, I can't tell you how many of their "passports" that I stamped last week with my ugly mug during "Office Hours" at Consultant Connect's ECONOMIX 2019 in Charleston, S.C.

 

Not only did I get to make and renew personal connections with talented economic developers attending, but I got to hear what was happening in their communities, which is always valuable.

 

My message to them was to use LinkedIn so as to create relationships, thereby converting what would be a cold call into a "lukewarm call" simply because of developing familiarity.

 

Indeed, I met with ED professionals who felt like old friends simply because we have been following each other for some time.

 

I also advocated a balanced approach to economic development. Recruiting is always a long shot, while business retention and expansion, is almost always a short and sure shot.

 

Entrepreneurial development, aiding in the birthing of new businesses, also should be part of a community's economic development ethos. Together --  recruitment, BR&E and entrepreneurial development -- creates a balanced approach to economic development which will do wonders if you keep at it.

 

Do that, and I'll gladly give you my stamp of approval.

 

 

New Life for Old Malls

 

Many long-abandoned malls that dot the American landscape are being repurposed. Some have been turned into community centers, water treatment plants or big warehouses to serve e-commerce companies. Other examples:

 

• An evangelical Christian church bought a mall carcass in Lexington, Kentucky, to turn it into a megachurch.

• The Landmark Mall in Alexandria, Virginia, has turned part of its unused space into a 60-bed homeless shelter.

• Esports giant GameWorks is looking at empty spaces in malls to turn into video-gaming hubs.

• The city of Plymouth, Minnesota last month approved a plan to redevelop the 17-acre Four Seasons Mall site into three affordable housing buildings -- two for families and one for seniors.

 

While the failing malls re-purpose themselves, some look at re-developing their unused parking areas. An analysis in Fairfax County, Virginia, found that less than 65 percent of available parking spaces at four malls were used during peak shopping hours.

 

Meanwhile, high-end centers continue to add attractions to draw in shoppers. Manhattan's Hudson Yards cost $25 billion to build and features luxury brands and apartments. 

 

The American Dream, a New Jersey mall slated to open in the spring, is a $5 billion project that will have a water park and indoor ski slopes.

 

 

A Future for Those Behind Bars

 

About 100 million Americans have criminal records, including more than two million people who are currently incarcerated in the United States.

 

Over two-thirds of those behind bars lack a high school diploma, and less than 13 percent have attended college. Nearly all face daunting roadblocks to finding meaningful, good-paying jobs upon being released.

 

One reason: More than 10,000 regulations restrict people with criminal records from obtaining occupational licenses, according to the American Bar Association.

 

The restrictions are seen as a way to protect the public, but they make it difficult if not impossible for the formerly incarcerated to enter fast-growing industries such as health care and some mechanical trades.

 

California has moved to enact a clean-slate law that eventually wipes the records of arrests and non-serious crimes, while states such as Louisiana, New York, Illinois and Michigan are exploring similar ideas, says The Economist magazine.

 

A University of Michigan study shows that "those who obtain expungement experience a sharp upturn in their wage and employment trajectories; on average, within two years, wages go up by 25 percent versus the pre-expungement trajectory."

 

One component of the 1994 Violent Crime Control and Law Enforcement Act -- a major driver to mass incarceration in the U.S. -- eliminated Pell grants that supported higher education programs in correctional facilities.

 

Tens if not hundreds of thousands of inmates lost the chance to gain the educational skills they needed to help them find employment after release. In response the Bard Prison Initiative (BPI) was founded in 1999 by undergraduates at Bard College, a private liberal arts college in Annandale-on-Hudson, New York.

 

A recent PBS' documentary series -- "College Behind Bars" -- examines BPI, which allows select inmates to enroll in Bard College's curriculum. The four-part series, produced by Ken Burns, is currently streaming for free.

 

BPI issued its first associate degrees in 2005 and first bachelor’s degrees in 2008. Since 2001, the program has issued roughly 50,000 credits and 550 degrees; it offers more than 160 courses per academic year.

 

Recidivism among BPI alumni is at 4 percent, compared to a 50 percent rate generally. Expanding postsecondary education would save $365 million per year in state spending on incarceration, according to a January report from the Vera Institute.

 

The idea of warehousing people for the sheer purpose of punishment serves no one if those released from prison return to criminality for the lack of job opportunities.

 

Economic development and criminal justice reform are inextricably linked. Both should have similar missions in helping people change their lives for the better.

 

 

A Gentle No

 

Lately, I've been getting a spate of connection requests on Facebook from economic developers, some of whom I have never met.

 

My standard response: "No offense, but I reserve my connections on Facebook to family, old friends and musicians, as they are the ones who most likely to have something on me.

 

"Let's you and I connect or stay connected on LinkedIn and Twitter and keep it strictly professional. How about that?"

 

By the way, the photo above is of Brandi Pace and me, performing as Pace & Barber. Indeed, we even have our very own Facebook page, which is public should you care to visit. So there you go.

 

 

Real Estate for Economic Developers

 

There is and always will be a real estate aspect to economic development. Here's this week's brief principles of real estate for economic developers.

 

It is the potential use or productivity of land that largely determines its value. The productivity depends on what somebody does or wants to do with it in terms of labor and capital.

 

It could be for agriculture, mining/drilling (coal, metallic ores, oil and gas, etc.), or, and this is a rather all-encompassing term -- "development."

 

The "development" of economic development is rooted in large part in developing and redeveloping properties for various uses so as to foster economic growth.

 

"Raw land" is that lacking infrastructure needed to support building construction. No factory or subdivision can be built on property where utilities -- electric, gas, water, telecommunications -- are not or cannot be present.

 

"Improved land" is that which can be built upon with capital and labor placed onto it. Documenting the improvements on specific tracts can improve a community's chances for development because it reduces risk.

 

The documentation process is the basis of our BBA Site Readiness, which we offer as a service to utility companies, railroads, and economic development organizations.

 

What We're Reading

 

The One-Traffic-Light Town with Some of the Fastest Internet in the U.S. 

The New Yorker

 

I Was Once a Socialist. Then I Saw How It Worked  The New York Times

 

Mapping America's Stark Wage Inequality  CityLab

 

A legacy of fear: confronting the history of lynching  1843 Magazine

 

Ghosts of the future  The Washington Post

 

Why Mike Posner Walked Across America  Outside Magazine

 

Giving Back to Community

 

For the three former college roommates, there was always the desire to start a business. After graduating from Tennessee State University, Clinton Gray, Derrick Moore and Emanuel Reed pooled what little money they had and started a moving company in Nashville in 2010.

 

It was hard work, Moore told an audience of economic developers at Consultant Connect's ECONOMIX 2019, but in 2017, they sold their business for seven figures and were ready for a new challenge.

 

They decided on making pizza, something they knew absolutely nothing about it, Moore said.

 

They turned a former garage into a pizza-making lab in a very tough neighborhood in North Nashville, where 40 percent of the people were living in poverty. But it was where they wanted to be and where Slim & Husky's was born.

 

It represents more than a pizza restaurant alone, Moore said, but a way to give back to a community by bringing people together.

 

Today, there are five Slim and Husky restaurants -- three in the Nashville area and two in Atlanta. More are to come in neighborhoods that are challenged.

 

"If we see a homeless person not far from a white woman walking a dog, well, that's the place for us," Moore said to laughter from his audience.

 

 

Three Chords and the Truth (Click and Ye Shall Find.)

 

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