Spokane Economic Development

Grading Spokane’s Economic Development Performance

Economic development theories evolve nearly as quickly as the market. Local economic development organizations, therefore, also must evolve in an effort to consistently be at the forefront of economic development practice. Spokane’s performance toward this end has room for improvement. Many eras within the field have been largely discredited and replaced with healthier alternatives. Metro Spokane, however, still clings to several outdated models that cities of the future have long since dismissed.

Below are all the broader economic development models tested and practiced by cities and counties throughout the nation. Of course, it’s difficult to capture them all, particularly smaller scale neighborhood/community based theory. All the big ones are listed, however – including the newer en-vogue theory that all the experts are writing about lately.

 

Chasing Manufacturers

Grade: D+
Predominant Era: 1800s to present.
Is it considered outmoded practice by experts in the field? Largely, no. However, many cities and counties have pivoted away from whale hunting in an effort to diversify their economic development strategies.
Quick narrative: Spokane grades a ‘D+’ here not for lack of effort, but for lack of utilizing the appropriate tools to finish the job. Presently, the primary strategy is to attract aerospace manufacturers to cluster around the Airport (or wherever, really). However, until we learn how to leverage the right tools to get the job done, it will all be in vain.

 

Attracting Military and Defense Industry Investments

Grade: B
Predominant Era: 1940s to present.
Is it considered outmoded practice by experts in the field? Largely, no. However, some cities and counties specifically choose to avoid the strategy.
Quick narrative: Spokane scores well here primarily due to our economic development environment’s greatest strength, which is advocacy. Lobbying federal officials for Department of Defense investments within the region has generally been successful throughout the years.

 

Freeway Building

Grade: A/F
Predominant Era: 1940s through the 1970s.
Is it considered outmoded practice by experts in the field? Yes.
Quick narrative: Spokane grades an ‘A’ for our recently “won” hard-fought 60-year struggle to finance the North/South Freeway, which is essentially a quarter of a ring-road around the immediate metro. But we also get an ‘F’ because freeway building has long since been dismissed as poor economic development practice. Jane Jacobs and Herbert Gans were the first to plant seeds of doubt regarding the value of urban freeway building. That was in the early 1960s. Today, there is a deep and rich pool of literature on the subject that has transferred into practice. Cities of the future aren’t looking to build freeways; to the contrary, they’re looking to tear them down.

 

Clustering

Grade: C
Predominant Era: 1980s to present.
Is it considered outmoded practice by experts in the field? Largely, no. However, the clustering trend is largely over and research (and practice) has moved on toward more effective strategies.
Quick narrative: Clustering is very much related to chasing manufacturers. The theory is once an industry group clusters to a critical mass within a given region, it will then metastasize into a self-perpetuating engine for growth and innovation – the best example being Silicon Valley. Locally, Walla Walla does a great job of clustering around the wine industry and, in Spokane, the University District is doing well clustering around higher education (which is why we scored a ‘C’ with this category). However, at the risk of sounding redundant, without leveraging the right tools to finish the job, we might as well be digging to China with our bare hands.

 

Enabling Suburbanization

Grade: B/F
Predominant Era: 1950s through the 1980s.
Is it considered outmoded practice by experts in the field? Yes.
Quick narrative: With the rise of the automobile, freeway building, and white flight, suburbanizing metropolitan areas was, for a time, seen as a way to spur growth and investment. Today, it’s largely seen as the most significant enabler of inner-city decay (the exact opposite of economic development). Metro Spokane, however, still sees it as economic development, which is why we’re graded both a ‘B’ (because we’re pretty good at it), and an ‘F’ (because we shouldn’t be).

 

Convention Centers, Stadiums, and Events

Grade: B+
Predominant Era: 1970s to present.
Is it considered outmoded practice by experts in the field? Largely, no. However, there is a sizable minority within the field that question its merits.
Quick narrative: I am not one of those within the minority. If done right, convention centers, stadiums, and events can actively liven otherwise dead urban environments, not to mention stimulate the lodging industry and other tourism sectors. The trick is doing it right, however. Metro Spokane grades well here with a ‘B+‘ because the Public Facilities District (public sector owners of the Convention Center, Arena, and Opera House) are good at what they do. They can improve by leveraging opportunities to better integrate their facilities into the urban fabric of downtown – primarily the Spokane Arena. Nonetheless, they have ventured into new territory by exploring public/private partnerships, most notably the new 716-room Grande Hotel. If the creativity and willingness to take political risks keeps up, they’ll move into ‘A’ territory.

 

Business Incubation

Grade: D+
Predominant Era: 1980s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Business incubation is a smaller scale, more grass-roots based strategy that focuses on enabling small business start-ups to get off the ground and grow into a successful venture. Metro Spokane scores a ‘D+’ within this category largely because, interestingly enough, it’s the private sector that that has provided the bulk of incubation office space.

 

Bottom Feeding

Grade: C
Predominant Era: 1980s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Thanks to the efforts of Greater Spokane, Inc., metro Spokane does surprisingly well here. Bottom feeding includes working to attract call centers, private prisons, and other job creators that may not necessarily be what communities want to hang their hats upon. For many economic developers (including myself), bottom feeding is the last alternative before your town withers up to die. Until that point of desperation strikes, stay away.

 

Attracting Internet and Technology Firms

Grade: F
Predominant Era: 1990s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Tech and internet start-ups drove economic growth throughout the 1990s, and it’s still a strong sector that, like the market, has evolved to include different strategies from simple relocation attraction to fundamentally changing the field of economic development and how best to do it. All strategies listed below this one speak, to one degree or another, to developing a place within the ever-changing new economy.

 

Attracting the Creative Class

Grade: D
Predominant Era: 2000s to present.
Is it considered outmoded practice by experts in the field? Largely, no, but it’s evolved a great deal since the early 2000s.
Quick narrative: When Richard Florida published his seminal work titled The Rise of the Creative Class, the entire field of economic development pivoted toward his theory. Metro Spokane scores a ‘D’ in this category because, despite a passing nod acknowledging the legitimacy of the theory, there is hardly an active effort to implement it.

 

Developing Light Rail and Transit Oriented Developments

Grade: D+
Predominant Era: 1990s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Metro Spokane scores a ‘D+’ in this category. The ‘+’ is because legitimate efforts have been made toward this end but failed. Today, the closest thing to a light rail plan metro Spokane has is the proposed Central City Line, which is a sleek bus meant to look like a train – hence the ‘D’ part of the grade. The Central City Line is a classic example of taking strong economic development practice and turning it into something mediocre (at best).

 

Expanding Higher Education

Grade: A
Predominant Era: 1900s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: This is Spokane’s best category. For a variety of reasons – some coincidental, some intentional – we’ve managed to galvanize all higher education institutions in the region toward developing in the University District — we even managed to leverage some tools along the way. This is a success story worth bragging about. One significant piece of the puzzle remains, however: building-out high density (generally) student oriented housing.

 

Urban Infill and Residential Development

Grade: B-
Predominant Era: 1990s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Once experts realized that suburbanization causes significant challenges for the hollowed-out inner city, economic development experts began to strategize around attracting investment and life back to older metro neighborhoods. Spokane is above average within this category – Kendall Yards being the best example. Much more can be done, however, by simply leveraging the same tool the City used to help make Kendall Yards happen – tax increment financing.

 

Investing in Quality of Life

Grade: F
Predominant Era: 1990s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: This may be the most nebulous of all economic development strategies because different experts will give you different definitions. That said, however, all of their definitions will orbit around the same foundational theories. Partly rooted in contemporary urban design strategies and partly rooted in sociological theories, quality of life is increasingly seen as the one economic development strategy that binds them all. Simply put, if you can only implement one economic development strategy, implement quality of life. Then, everything else will happen naturally.

 

Adapting Public Parking Systems into an Economic Development Mechanism (a-la Donald Shoupe)

Grade: D
Predominant Era: 2000s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Spokane gets a ‘D’ on this one because, as I’m sure you might recall, back in the late 1990s, the City pledged its annual public parking fees (revenue) to significantly help re-invigorate River Park Square. Setting aside the political trauma that followed, in the end, it was a successful public/private partnership that very much contributes to the health of downtown Spokane. The River Park Square bonds expire in 2027, which will free up about $2-million annually in revenue.

Before 2027 arrives, however, steps can be taken now to incorporate Donald Shoupe’s theory into practice, which has been done successfully in numerous other cities. In a nut shell, the theory states that all proceeds from public parking fees should go into improving the district that the fees are generated within — whether it’s beautification, attracting more businesses, or whatever you like so long as it stimulates increased parking demand and, therefore, more parking revenue. For more information, see my full length article on how Spokane can get this done.

 

Leveraging the Arts as an Economic Development Mechanism

Grade: D-
Predominant Era: 2000s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: There are a lonely few metro Spokane leaders in elected positions that see the potential in leveraging the arts, hence the ‘D-‘. For worser or worse, however, very few elected officials share their opinion. Leveraging the arts essentially pulls from three economic development strategies: clustering, quality of life, and creative class attraction.

Cities of the future promote and enable a healthy arts community.

 

Crowdsourcing Innovation

Grade: F
Predominant Era: 2010s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Instead of leaning on starchy old bureaucrats and the business elite to divine what economic development is, younger tech-savvy go-getters are beginning to do it for us by collectively solving urban challenges that governmental and non-profit institutions are simply too slow to identify, much less solve. This strand of theory is still developing and there is room for much creativity. With its roots in open-source software development, and then evolving to crowdfunding platforms, the crowdsource model has expanded to include economic development and addressing urban challenges.

In a 21st century economy, this is the new public consensus building tool that will not only solve challenges but will engage a sector typically not associated with participating in the municipal arena. They’re young, tech-savvy, engaged, intelligent, work for free, collaborate around problem solving issues, naturally self-correcting, resolve conflicts internally, and they’re market driven; which is to say, they will organically develop profit-making solutions that help solve the problem.

It’s worth metro Spokane’s time to develop a platform that taps this energy.

 

Attracting Millennials

Grade: F
Predominant Era: 2010s to present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Similar to attracting the creative class, attracting the millennial market is now accepted economic development practice. And why not? A larger population cohort than the baby-boomers, it’s widely documented that millennials choose where they want to live and then find a job once they’re there. Urban quality of life is the primary factor that drives millennials to a given destination.

 

Building the Uber Economy

Grade: F
Predominant Era: Present.
Is it considered outmoded practice by experts in the field? No.
Quick narrative: There are plenty of ways to make a legitimate living by leveraging free access to customers via firms like Uber, Air B&B, Fiverr, and a good handful of others. Economic development practice has begun to recognize that a little education toward this end can go a long way to cure local unemployment. By simply educating and perhaps providing a means for individuals to access such opportunities enables them to earn a few dollars and also inherently instills an entrepreneurial spirit that, as theory has it, will grow, and so too will their capacity to experiment with creativity and business growth. Pretty smart stuff, and it sure beats working at Walmart.

 

Community Wealth Building

Grade: F+
Predominant Era: Present
Is it considered outmoded practice by experts in the field? No.
Quick narrative: Community wealth building steers local governments away from traditional, incentive based economic development and toward more balanced tactics that, as described by Marjorie Kelly and Sarah McKinley, incorporate seven strategies into one holistic, market driven approach, including: place, ownership, multipliers, collaboration, inclusion, workforce, and system. Why the ‘+’ for Spokane’s grade? Although community wealth building as an economic development strategy is not consciously on the City’s radar, elements of it are. But for a little more education, City leaders could quite easily coalesce around adopting the strategy for any number of projects.

 

Closing

Overall GPA: 1.16

 

This blog is written by Mike Tedesco, officially a candidate for Mayor of Spokane, 2019. Check out his other totally awesome website at votetedesco.com.