Even though I spend a lot of time on this blog talking about national political and economic issues, the local level is just as important for progressives who want major transformations in the economy and in their communities. But if economic development is to benefit the community as a whole instead of being driven by developers’ interests, there must be effective citizen input into public development decisions. The current struggle in Takoma Park, Maryland over the development of a public space known as Takoma Junction in the heart of the city nicely illustrates the problem.
The details are somewhat complex for outsiders, but, in essence, the city wants to grant a 99 year lease to an outside developer to come in and build a fairly large structure in a small space in order to stimulate economic development. The opponents of the plan, who are mobilizing rapidly, contend that it amounts to a give-away of public wealth to private concerns in the form of tax breaks and missed opportunities for innovation. The developers will have to charge high rents to recoup their investments, making it difficult for local businesses to rent space there. In addition, the envisioned structure is likely to further exacerbate an already difficult traffic pattern at the Junction and will seriously complicate deliveries for the popular, community-owned TPSS food co-op next door, possibly forcing it to relocate.
To add insult to injury, opponents have raised serious concerns about the process by which the RFP was released and the proposals evaluated. In 2012, a task force appointed by the City Council to study options for the Junction and surrounding areas released a report that included a list of principles for the space that emphasized promoting the public good. The report stressed the importance of making sure the space was open to all, protecting the co-op, making sure that any new structure was consistent with the ethos of the city and that location, and that local businesses, entrepreneurs, and non-profits would be able to rent the spaces. These principles had broad public support, but many of them were not incorporated into the subsequent RFP released by the city. Much of the dispute within Takoma Park about the current plan has been about trying to get the city and its designated contractor to live up to the letter and spirit of those principles.
The opposition to the city’s development plan is led by a citizen group called the Community Vision for Takoma Park. Their vision is of a much more modestly scaled project that is:
a lighter, less dense version that creates public space for events, outdoor markets, or community use, and preserves Co-op functioning, while adding a coffee shop, pub, food hub, and/or business incubator/worker training components.
The broad issue at play here has been replicated in many towns and cities across the US: what kind of development do we want and who decides? Should we follow the common course of providing tax breaks for large developers to come in and build large, expensive structures and then bring in chain stores and franchises or should we use public resources to support local businesses that are fully invested in the community, both financially and socially?
The default option in most of the US is to provide the financial incentives for large businesses and developers to locate Sam’s Clubs, Walmarts, other big box stores, and retail and restaurant chains in the community, businesses that do sometimes provide a significant number of retail jobs. But those jobs are often low-paying, while at the same time the chains put many smaller businesses out of business. In addition, such large enterprises tend to have minimal commitment to the community and do not reinvest their profits there.
But when the economy takes a downturn, they may close. We have just seen this with the recent closing of many Walmart stores across the country, even as they are receiving major tax windfalls from the Republican tax cut passed in late 2017. All of this has the potential to amount to an extremely destructive cycle whereby large retail firms and chains establish themselves in a community–often with the support of city governments granting them large tax breaks–throwing local businesses (especially retailers and restaurants) out of business, and then closing when profit margins disappear, leaving the community to pick up the pieces.
This race to the bottom is currently on display nationally in the competition to attract Amazon’s second headquarters. States and municipalities are offering billions of dollars in incentives, while committing to modernizing and restructuring local transportation systems. On the surface, having a large corporation come in to one’s community seems like a significant benefit, but most of the high-paying jobs are likely to go to people already employed by the company and relocating to work at the site. It is especially deplorable that states and cities are offering billions of dollars in benefits to one of the richest corporations in the world, a corporation that also happens to have very problematic labor practices. Maryland has offered Amazon $6.5 billion in tax incentives plus other goodies to build its second headquarters in the state. One wonders what such a large sum of money could do were it invested throughout the state in various infrastructure, education, and economic development activities. It’s an obvious question, or should be. But it’s not being asked.
Ultimately, the problem we face in this country when it comes to urban development is that the default position is so strong. Like other assumptions about the economy, we Americans are taught to think that there is one basic model of economic development. Corporations and developers build something big, providing good jobs, and benefiting the community as a whole.
But there are other ways for communities to build wealth. The first step is to recognize that they already have capital in the form of land, know-how, social relationships, and people willing to invest locally. They just need to steward those resources appropriately. It involves coming together to do the sometimes difficult work of building relationships and trust within the community. But in the end, the wealth created will be long-lasting, more in line with community values, and more fairly distributed.