Wednesday, December 1, 2010

Gateway Cities

Thanks once again to for tipping me in on a series The Globe will be running on Sundays about Massachusetts' Gateway Cities.  The first article is up already here.

While it's nice to see the article's photo be of Lowell and to hear us mentioned as a "more successful" city, the article's point is clear:  The state's smaller cities (as in, not Boston), have been left behind by the capital and the suburbs in the new economy, and much of it was deliberate, or full of good intentions gone wrong.  Some of the more interesting points made in the article or the comments ask why these cities must take on the brunt of their regional problems via government housing and welfare programs instead of "right-sizing" themselves in relationship to their lost industrial advantages.  Others talk about NIMBYism (Not in my backyard!) and the advantages the wealthier suburbs and cities have with regard to it - not needing government carrots to stay solvent.  Others talk about the hard do-not-cross line drawn between the suburbs and the cities.

As for solutions... If I had my way?  Organizations like the Northern Middlesex Council of Governments would have some teeth.  In most of the US, government bodies much larger than New England towns have the real power.  It's not uncommon in the US or other parts of the world for cities to merge with growing suburbs (look at London!).  The fact that this practice began stopping in the United States in the late 19th century (and in Lowell around 1910), I feel has added to the issues we see today by creating an Us and Them mentality between cities and outlying areas.


  1. When the Governor was looking for thoughts on Municipal Partnership when first elected in late 2006, I was able to provide a paper to the Lt. Governor elect, including the following ideas for the Gateway Cities of MA. Excerpts from that paper follow (in 2 parts):

    Gateway Cities of Massachusetts Economic Development Strategy

    There are 11 cities in Massachusetts known as the Gateway Cities, Brockton, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Lowell, New Bedford, Pittsfield, Springfield and Worcester. These municipalities are at risk to falling further behind the central city of Boston, according to a MassINC report, as they struggle to attract high-tech and other innovative industries because of shortages of trained workers, limited transportation, and patchy broadband access. The result is a concentration of demand in the central city, with increasingly unaffordable costs in that area, and a lack of economic growth in these second-tier cities.

    The objective of this strategy is to define an approach that will allow Massachusetts to better distribute the economic growth within the State, providing more opportunities statewide, while lessening the pressure on real estate prices within the central city.

  2. Approach:
    The recommended approach is to first recognize the unique capabilities inherent in the area of each city, and then to designate an economic development agenda for each locale that is consistent with those capabilities. Each city will be designated as the center-of excellence for the chosen development, and the State and the City will cooperate to achieve successful realization of those objectives. The unique capabilities may derive from the characteristics of the local workforce, its community colleges/universities, the historical character of its industries, or possibly its unique location and transportation qualities.

    The Start:
    The first step in the process is to research each area and make specific judgments as to what type of development would be most appropriate for each one. A brief assessment of each city is needed to start the process, demographics, educational initiatives, and existing and historical industries. Each city should offer a summary of those characteristics to the State to establish their turf in this endeavor. Preferred investments are with those activities that would result in a net inflow of wealth to the State, or at least reduce the outflow that currently exists. The designation of UMASS Worcester as a center for Life Science is a major first step in this process.

    Areas of Special Interest:
    A difficult step in this process is to identify those activities that will have the most benefit to the Massachusetts economy in 5, 10, 20 years and beyond. We need to have an “encounter with the future” for the insight required to be sure of our plan, but a wise group of people should be able to make a reasonable selection. Maybe that would include: Life Sciences, Nanotechnology, Solar Energy Capture, Wind Energy Capture, Energy Efficiency and Distribution, Defense Electronics and Homeland Security, Finance, Health Care, Land Management and Farming Fisheries, Tourism, etc., and any derivative industries that may result from these.

    Establishing the Centers of Excellence at the Gateway Cities:
    With some foresight into the economy of the future and supportable requests from the Gateway Cities, the State can create a roadmap to a distributed economic future for the Commonwealth. Although the concept of centers-of-excellence implies each community will have a unique role, it is likely that multiple centers for certain activities will be defined. That is a positive outcome as long as such distribution of a single activity has solid rationale and does not dilute the efficiency of the expertise. An example of an industry that can easily be distributed to several locations is tourism, but in doing so, it would be wise to link the marketing of these collectively at the State level.

  3. State and Local Aid to Centers-of-Excellence:
    Once the objectives have been defined, the State and each Gateway City have the mutual responsibility to make the plans successful. Some approaches to achieving these successes may be:
    1) Education
    a. Update curricula at local universities and community colleges for preemptive training of the workforce for new technologies.
    b. Provide tuition incentives for designated studies in addition to normal financial aid.
    c. Fund research and development of key technologies at State Universities.
    2) Infrastructure
    a. Facilitate access to designated areas.
    b. Improve telecommunication infrastructure in those areas.
    c. Coordinate transportation needs among the centers-of-excellence.
    3) Tax Incentives
    a. Tax Increment Financing for local property taxes where new jobs are created.
    b. Supplementary State reimbursement to city for temporary loss of property tax revenue, recognizing the increased State income tax collections being received.
    c. R&D Tax Credits to companies participating in the plan.
    4) Planning and Development
    a. Generate a Marketing Plan for each activity.
    b. Manage the plan to make sure activities are consistent with objectives.
    c. Expedite local approvals to minimize delays and unnecessary costs, but preserving safety of the local environment.

  4. While I like a lot of your ideas, I have some concerns. Picking specific areas of study for specific cities, I feel, is picking winners and losers. While fields that succeed may flourish in the areas they targeted, ones that do not, I'd be afraid would continue to bring down these cities - at the taxpayer's expense.

    The original article talks about how government intervention at least is partially responsible for our current situation. It argues (I think reasonably), that policies favoring road building and new construction lead to a drain of resources from the cities: this would be something at least partially new. Also, the ultimate problem, in my opinion, is the momentum the mid-century models created with jobs going to the suburbs. If we reverse that by disincentivizing those sorts of projects, the rest will follow...and we'll have a much richer and more sustainable environment to boot.

  5. The State has initiated two related actions in Lowell since that time. In September 2008, Lowell obtained the designated Growth District to aid in the development of the Hamilton Canal District, although I believe the Growth designation extends to the entire JAM area. And later the funding was pulled together using State, Federal and UML resources to start the Emerging Technologies Center at the University.

    But I don't think we have done enough to build on those investments, at least not yet. We shouldn't wait for good things to come to us, or else they will find a more aggressive home.

  6. Sure, fair enough and I would tend to agree.

    My concern was more where the plan veers off of tax incentives and into the realm of central planning. Spending public money on the JAM district might hit people in the wallet, but I think it's a win for most people in the area at least, without directly detracting from others. Telling entire economies what specific things they should develop is something else, because it has the potential to hurt.

    I am not too happy about what is going on at Appleton Mill for the same reason. Spending a huge sum of money to renovate a tumble-down mill of dubious historical value is OK (if it was cheaper, I would've rather seen brownfield money go to demolish it and scrub, and then allow private business to rebuild), but renovating it as the Taj Mahal and then allowing frycooks who glue macaroni to paper to live there on our dime has the potential to adversely affect other stakeholders in the area, above and beyond the "liveliness" the new residents are supposed to bring to the area.

  7. I understand your concern about the Appleton Mills. The significant public investment in that project will not yield significant return (except to those fortunate enough to be selected as tenants) unless it becomes the cornerstone for a much more productive investment in the area.

    And that follow-on investment is quite uncertain, as without the substantial benefits of historic tax credits and affordable housing incentives, it is difficult to obtain sufficient return on investments. The cost to create is high, while the demand to return that investment is low.

    But that may be where the Gateway cities preferences kick in. For example, the State is making a substantial investment in emerging technologies (or life sciences), but has not clearly defined its own return on those investments. Sure, there is a hope for jobs (and resulting tax revenue), but no clear criteria to prevent the beneficiaries of those investments to actually locate in MA, if not here in Lowell.

    That gets to my point about picking the winners - already the siting of the facility at UML is one step in that process. I would like to see a second step made, and that being a carrot-and-stick approach to the private users of those emerging technologies. The stick being a royalty requirement if the jobs are not located in MA for an extended period, and the carrot being some tax relief to specifically locate the jobs in Lowell - and hopefully extend the Hamilton Canal work to include that.

  8. What are your thoughts on the I93 Lowell Junction interchange project? From what I can tell it means more suburban business for Andover, more traffic on 93/495, deforestation etc. I would prefer to see the Sun fight for more development in downtown Lowell(Jeff Speck had some interesting ideas) than this.

  9. I wrote too much so I guess I have a new post.