Author Archives: James A. Bacon

Attack the Demographic Underpinnings of Poverty

birth_controlby James A. Bacon

There is a case to be made for family planning and access to abortion services as a way to improve the lives of poor women. If you lean liberal in your politics, you’ll probably be comfortable with the arguments advanced by Washington Post columnist Catherine Rampell (published yesterday morning in the Times-Dispatch). If you lean to the right politically, you’ll probably find her loftier-than-thou attitude — “America has decided: Sex is for rich people” — and her inaccurate swipes at conservatives — “pundits [refer] to advocates of affordable birth control as ‘sluts’ — to be so off-putting that you’re likely to reject the nuggets of sound reasoning buried in her column. But, then, Rampell isn’t writing to conservatives, she’s writing to liberals.

I’m a libertarian/conservative writing to conservatives, so I shall endeavor to make a case for family planning and abortion services that most conservatives will find palatable. (I know I’ll never convert right-to-life conservatives who oppose abortion under nearly all circumstances, so I won’t even try.)

Between government welfare programs and not-for-profit programs, American society devotes trillions of dollars to ameliorate the condition of the poor. Millions of poor Americans manage to surmount the disadvantageous circumstances of their birth, get an education and rise into the middle class. Yet American society has made very little progress in eradicating poverty over the past 50 years. Why is that? I believe that the root cause is demographic.

As I noted two weeks ago in my column, “The Uphill Climb for Virginia Schools,” low-income women bear 10% to 15% more children than women in higher income categories, and they have their children at younger ages with the result that a 36-year-old woman in a lower-income setting can become a grandmother by the time a college-educated, career-oriented woman becomes a mother. Thus, the progeny of poor women, who are financially and culturally less equipped to form stable, two-parent households conducive to academic learning and the inculcation of values required to be successful in the knowledge economy, tend to be over-represented in the next generation of children. Likewise, the social problems endemic to the American brand of poverty — out-of-wedlock birth, substance abuse, domestic violence, dropping out of school, etc. — are transmitted to the next generation at a higher rate.

There are two ways to deal with this problem. One way is to ramp up education and social welfare spending in the hope that politicians and bureaucrats can figure out how to improve upward social mobility. If more poor people rise into the middle class, we might hope to conquer poverty in four or five generations. The track record of this approach has been none too encouraging, however. And given the parlous condition of government finances these days, the “spend mo’ money” approach is unaffordable.

The other approach is to encourage poor young women to delay childbirth until they can complete at least a high school education, attain stable job prospects and, perhaps, even marry. As Rampell notes, more than half of all pregnancies are unintended — 70% for single women in their 20s. (I would conjecture that the percentage of unintended pregnancies is even higher for single women in their teens.) In other words, pregnancy is not something that most young, unwed mothers seek.

Rampell avers that government spending on family planning offers a huge return on investment. “In 2010, every $1 invested in helping women avoid pregnancies they didn’t want saved $5.68 in Medicaid expenditures.” I would add that the ROI probably would be a lot higher if other forms of welfare support and social services were included.

Investing in family planning, to my mind, is a no brainer. Abortion is a more more complex issue. I oppose late-stage abortion except when the mother’s life is in danger but I see early-term abortion as a less undesirable outcome than bringing an unwanted child into the world. I acknowledge that others will disagree. But I look at the scourge of the American brand of poverty — particularly the pathological form it has taken in the United States with widespread family breakdown, child abuse and child neglect — and I see family planning and abortion services as the only way out.

Why not teach abstinence? Teaching abstinence is fine. The longer teenagers wait before they become sexually active, the better. But let’s not kid ourselves — I actually agree with Rampell on this — we’re fighting against human nature. The number one thing on teenagers’ minds is sex. If we count on abstinence alone, we’re going to lose this battle. Society, preferably through the mechanism of non-profit organizations, needs to provide birth control to poor kids. If evangelical Christians find the idea morally reprehensible, I would invite them (a) to ponder the relative ineffectiveness of the abstinence strategy in environments where no one is practicing it, and (b) redouble their efforts to teach abstinence to their own children.

Most conservatives I know are deeply troubled by the cancerous spread of a severely dysfunctional sub-culture of poverty and the misery it engenders among the children born to it. Would they prefer to pay higher taxes to support the children of poor women who became pregnant by accident, or would they prefer to give those women access to birth control and/or early-stage abortion services so they could avoid having those children in the first place? It’s an easy choice for me, and I suspect is is for many conservatives.

Loudoun’s Broken Development Model

If housing stock like this Loudoun County beauty can't cover its costs in infrastructure and services,  the local governance model is badly broken.

If housing stock like this Loudoun County beauty can’t cover its costs in infrastructure and services, the local governance model is badly broken.

by James A. Bacon

Office workers need less space than they once did. Over the years businesses’ space needs per office employee have shrunk from approximately 250 square feet to less than 190 square feet, says Ben Keddie, vice president of Coldwell Banker Commercial Elite, as quoted in the Fredericksburg Free Lance-Star. Office space is expensive, and businesses have learned how to function with less of it. With the rise of the mobile workforce, open work spaces and office hoteling, it is easier than ever to conserve space and rein in lease and rental costs.

That trend has dramatic, if unappreciated, consequences for local governments’ real estate tax base and the management of growth and development. If businesses need less office space per employee, they need less office space overall. Which means the cost of office space drops. Which means developers build fewer new office buildings. Which means local governments are finding it harder and harder to grow their tax base.

Loudoun County in Northern Virginia, it appears, is facing that very problem. “A softening commercial office market has made it difficult for developers to make money on their commercial land, because there are fewer companies interested in large parcels,” reports the Loudoun Times. Indeed, it might be said that outlying counties in the Washington metropolitan region are facing a trifecta of troubles regarding commercial real estate: (1) business enterprises are shrinking their office footprints everywhere; (2) sequestration-related budget cuts have dampened demand even more in the Washington region; and (3) when Washington-area businesses do seek new digs, they show strong preferences for walkable urbanism, a higher-density, mixed use pattern of development that accommodates walking, biking and mass transit. Walkable urbanism is found mainly in the region’s urban core and along Metro lines, not in low-density burbs like Loudoun.

Not surprisingly, Loudoun’s supervisors appear to be adrift in dealing with these trends. According to the Loudoun Times, the Board of Supervisors has been striking down applications by developers to rezone excess commercial land to residential on the grounds that residential incurs high costs for roads, schools and other infrastructure.

Loudoun County estimates that for every $1 spent on housing, the county pays $1.62. Developers dispute the latter number, suggesting that it is closer to $1.20. Either way, says Supervisor Shawn Williams, R-Broad Run, new residential development has a negative impact on the county’s operational budget.

Think about it: There is something severely wrong with a system that incentivizes local governments to limit residential development. If Loudoun County, which has the highest per capita income of any locality in the entire country and presumably has a building stock to match, can’t justify new residential development, then something is severely out of whack! It is precisely this attitude, and the resulting restrictions placed on the building of new residences, that creates housing scarcities and makes housing more expensive up and down the income scale.

In the old old tax model, a 60/40 balance between residential and commercial real estate property tax revenue was considered healthy. If you could get more commercial development, then great. If not, you had a problem. Well, almost every locality in the United States has, or will have, a problem as offices continue to downsize and retailing shifts from malls and shopping centers to online commerce. Local government generally, not just Loudoun County, will face a tax crisis. And if county boards and city councils all try to address it the same way as Loudoun — by restricting new housing construction — they will compound the tax crisis with a housing crisis.

What, then, is the answer? Local governments need to advance the emerging discipline of fiscal analytics. The core premise of fiscal analytics is that different human settlement patterns have different cost and revenue profiles. Some patterns generate more tax revenue per acre than other patterns. Some patterns have lower embedded costs for transportation, utilities and public services than others. Some human settlement patterns provide a much better balance between revenue and cost than others.

As a general rule, walkable urbanism (mixed use, medium density, complete streets, access to mass transit) comes closer to fiscal balance (revenues matching expenditures) than the scattered, low-density, auto-centric pattern commonly referred to as suburban sprawl. Continue reading

Tracking the Forgotten Virtue: Thrift

by James A. Bacon

More interesting data from WalletHub: In a ranking of 150 metropolitan regions by 16 metrics indicating the degree to which local populations adhere to responsible household budgeting practices, Virginians fare better than their peers in any other Southern state — and that’s not just a reflection of the outsized influence of Northern Virginia, which is wealthier, better educated and culturally distinct from the rest of the state.

Charlottesville ranked 11th nationally, followed by Washington at 23th, Roanoke at 25th, Richmond at 45th and Hampton Roads at 56th.

WalletHub’s metrics encompass average credit scores, non-mortgage indebtedness, foreclosure rates, percentage of population paying only the minimum on credit cards, percentage of the population spending more than they make, delinquency rates on loans, and related measures.

Education and income are important measures of economic well being but I would argue that household thrift is just as important. Social scientific surveys of happiness and well being consistently show that, beyond a certain point, additional income brings only increment gains in happiness. The pleasure gained from the acquisition of a flashier car, a bigger house or a newer big-screen TV is fleeting. The anxiety that stems from economic insecurity and the risk of losing one’s possessions is enduring. Households that live within their means and set aside some savings, I would hypothesize, tend to experience greater life satisfaction (or conversely, less anxiety) than households that spend money carelessly on frivolous or passing pleasures — even if they accumulate fewer material possessions.

This perspective is almost entirely lacking in the public policy debate in the United States today. Economic well being is measured almost exclusively by the rate of economic and income growth and, secondarily, the distribution of income. As a consequence, government policy is geared overwhelmingly toward goosing consumer expenditures. Anything that stimulates consumer spending, even if it means saving less and borrowing more, is regarded as beneficial to “the economy.” Thus, we witness today the revival of policies last seen during the real estate mania of the 2000s designed to lower mortgage borrowing standards and encourage more lending to the poor. The fact that these very same policies induced poor people into buying houses they couldn’t afford to pay for, much less keep up, and unleashed a wave of foreclosures that obliterated what little wealth most of these people possessed seems not to deter policy makers in the least. The idea that people of modest means can live perfectly happy lives without racking up debt seems alien to the American political psyche.

An ability to resist the siren call of excessive indebtedness, I would argue, is a major contributor to happiness and life satisfaction. The most responsible budgeters in the nation, by WalletHub’s standards, are clustered in the upper Midwest — in metropolitan regions centered in and around Minnesota and Iowa. It’s difficult to avoid the conclusion that cultural factors are at work, perhaps related to the Germanic and Scandinavian heritage of the populations. The other large cluster — not quite as thrifty, but more financially responsible than the country as a whole — is the Mid-Atlantic/Northeastern region, of which Virginia is a part. The South and parts of the Southwest are a budgetary disaster zone whose citizens, who are more likely to be poor, have shredded their household budgets. Thrift and frugality were never part of the Southern cultural tradition — either among the Anglo-Saxons or the African-Americans who settled there.

It would be interesting to know how Virginians came to embrace the household budgeting practices of states to the north rather than the south. Are cultural attitudes different here? Has state public policy played a role? Does the school curriculum, which teaches economics and personal finance, make a material contribution?

One last point: While it makes intuitive sense to link personal budgetary responsibility to life satisfaction and happiness, there may, in fact, be little correlation. Compare the map above with the happiness map published previously on Bacon’s Rebellion. The South is one of the happiest regions in the country! Maybe happiness is spending other people’s money.

When Big Data Turns Bad

Big Brother is listening

Big Brother is listening

How the heck did this happen? From Wired magazine: Five police agencies in Hampton Roads have been compiling a massive database of telephone records under the aegis of the Hampton Roads Telephone Analysis Sharing Network. The localities include Hampton, Newport News, Norfolk, Chesapeake and Suffolk. Writes Wired:

The effort is being led in part by the Peninsula Narcotics Enforcement Task Force, which is responsible for a “telephone analysis room” in the city of Hampton, where the database is maintained.

The unusual and secretive database contains telecom customer subscriber information; records about individual phone calls, such as the numbers dialed, the time the calls were made and their duration; as well as the contents of seized mobile devices. The information is collected and shared among police agencies to enhance analysis and law enforcement intelligence.

Rob Poggenklass, a staff attorney at the American Civil Liberties Union of Virginia said:

The database runs afoul of a privacy law in Virginia known as the Government Data Collection and Dissemination Practices Act, designed to curb the overcollection and misuse of digital personal information by state and local agencies.

He points to an interpretation of that law issued last year by Virginia’s attorney general in reference to controversial automated license-plate readers that police departments nationwide have adopted enthusiastically in recent years.

Maybe there’s an innocent explanation for this. Maybe it marks a scary expansion of police power. One way or the other, we need a full airing of what’s going on.

–JAB

Student Victimization… Down, Down, Down

victimization

The phenomenon of students arrested for school offenses in Henrico County (addressed in a recent post, “Spotlighting the Wrong Victims“) is national in scope. Nationally, 260,000 students were reported to law enforcement by schools in 2012, according to an article in today’s Wall Street Journal.

As in Henrico County, there are concerns that African-American students are arrested at disproportionately higher rates than white students. But there are a myriad of other issues, such as the arrest of students under “zero tolerance” policies for trivial offenses, such as a chemistry experiment gone bad (“discharging a destructive device”) or unwittingly carrying a pen knife to school.

Noted but downplayed in the article is another startling fact. Since the implementation of zero-tolerance policies in the 1990s, the rate of victimization per 1,000 students aged 12-18 fell from 181 to 52 between 1994 and 2012. Supporters of zero-tolerance policies cite those numbers as evidence that the school-yard version of the “broken windows” approach to crime — cracking down on minor offenses before they give rise to more serious ones — has been effective.

Invariably, zero-tolerance policies lead to some absurd actions. We’ve all heard the horror stories of kids suspended from school for bringing toy guns to school, drawing pictures of guns or even making pretend guns with their fingers. Undoubtedly, some kids are punished unfairly. As we all know, the criminal justice system isn’t perfect. But cutting school crimes by more than two-thirds over twenty years is no mean achievement. For every child suspended or arrested for a ludicrous offense, literally hundreds fewer children are victimized by their peers.

While the students receiving the harsh sanctions of suspension or arrest are disproportionately African-American, there is evidence in the Henrico County numbers that the victims of their misdeeds are African-American as well. Last year, 84% of the African-American kids arrested for school offenses attended Henrico, Highland Springs or Varina High Schools, all of which have overwhelmingly black enrollment. There is no way to avoid the conclusion that the victims of disruptive behavior — whether assault, theft or the interruption of teaching in the classroom — were black as well.

That’s not to say that the existing system can’t be improved upon. I’m sure it can. But let’s not go overboard in correcting perceived excesses. The last thing we want is for schools to return to the “blackboard jungle” days of yore. Every kid deserves a chance to get an education from from the disruption and intimidation of their peers.

– JAB

The EPA’s War on Virginia

How to have it both ways: Destroy coal mining jobs with environmental  regulations.... and then blame "capitalism" for growing income inequality.

How to have it both ways: Destroy coal mining jobs with environmental regulations…. and then blame “capitalism” for growing income inequality.

James A. Bacon

Complying with proposed Environmental Protection Agency rules on carbon emissions would cost Dominion Virginia Power customers an extra $5.5 billion to $6 billion, according to the State Corporation Commission staff — and that doesn’t include the cost to Virginia’s smaller utilities, which are even more reliant than Dominion upon coal.

The EPA plan calls for cutting carbon emissions from existing power plants 30% below 2005 levels by 2030 in an effort to fight climate change, improve public health and provide “affordable energy,” reports the Richmond Times-Dispatch. Writes Peter Bacque:

The EPA’s own model predicts that Virginia utilities will have to shut down fossil-fuel power plants reliably producing 2,851 megawatts of electricity, and replace that generation with just 351 megawatts of unreliable land-based wind power. This raises alarming regional reliability concerns, the staff said.

The power plants involved today ensure reliable service to Virginia customers, have years of useful life remaining, and cannot be replaced overnight or without regard for impacts on the electric systems. …

Even if the operational concerns of replacing dependable fossil-fuel generation with variable, intermittent and “nondispatchable” — unreliable — wind and solar energy could be managed, the staff said, “there is still zero probability that wind and solar resources can be developed in the time and on the scale necessary to accommodate the zero-carbon generation levels needed” to meet the EPA’s mandatory carbon-reduction goal for 2020.

This massive and expensive transformation of Virginia’s electrical generation system is a huge, huge issue. Once upon a time, Virginians could reconcile themselves to tighter environmental regulations on the grounds that they got cleaner air in return. There was a tangible payoff to air cleansed of particulates, sulfur dioxide and mercury. There is no tangible payoff (except to the alternate fuels industry) from the EPA rules. The whole purpose is to reduce CO2 emissions in order to save the globe from the catastrophic consequences of global warming.

The administration seeks to transform America’s energy economy despite the fact that, even as CO2 levels in the atmosphere have increased dramatically, global temperatures have remained stable for 18 years now — contradicting the forecasts of virtually every major climate model ever cited by the Intergovernmental Panel on Climate Change. While the Global Warming hysterics maintain their prattle that the “science is settled” and “97% of all climate scientists agree,” the science is most assuredly unsettled. Warmist scientists who pay attention to the reality that temperatures are not rising are desperately concocting ex-post-facto explanations of why their predictions went wrong and why, despite all appearances to the contrary, the world is still doomed unless we abandon fossil fuels now.

That’s not to say that alternate fuels are a bad thing. At some point, the technologies will improve to the point where they will be competitive with fossil fuels and it will be prudent to add them to the fuel mix. Energy conservation is always a good idea. Building automation offers a high economic return on investment. More compact, walkable human settlement patterns can save energy and offer tangible health and lifestyle benefits in the bargain. There are lots of ways to reduce CO2 emissions (if that’s a goal you really care about) without saddling Virginia’s economy with an unnecessary burden of $6 billion or more.

This is bad, bad policy, and Virginians need to fight back. Voters need to ask Virginia’s congressional candidates — most prominently Senatorial candidates Mark Warmer and Ed Gillespie — what they think of the EPA mandates and what they, as congressmen, can do to mitigate the impact on Virginia ratepayers.

Women Flex their Biking Muscles

amy_george

Amy George

by Amy George

Riding a bicycle can be transformative to physical and mental well being, to families, to neighborhoods, and beyond. As cycling becomes more popular, more women and girls are enjoying its effects. However, representation among cyclists still tips male — 76% as measured per-ride in the U.S. Yet recent surveys show women overwhelmingly have a positive view of cycling. What is keeping so many women from taking to the streets on two wheels? Furthermore, why should we care, and what can be done about it?

Since 2010, Richmond as a community has taken several big steps in bicycle advocacy. RideRichmond formed that year, as did Mayor Dwight Jones’ Bike, Trail, and Pedestrian Commission. We have seen the creation of the dedicated, professional action and advocacy groups such as  Sportsbackers’ BikeWalkRVA and the VCU RamBikes program. In this landscape of growing bike-positivity, RideRichmond realized that women’s representation still is an underserved aspect of cycling advocacy. As believers in the bicycle, we could not stand by and watch the benefits of cycling distributed unequally to Richmonders. In order to begin this conversation, RideRichmond is hosting the first Richmond Women’s Cycling Summit on October 23 at the Virginia War memorial.

Fortunately, we’re riding a wave of good research and Women’s Cycling efforts across the nation. The long-held line on women’s resistance to cycling was one of “fear and fashion”. (“The cars! The helmet hair!”) It turns out, when you really ask women how they feel about cycling, the answers are much more practical.

The League of American Bicyclists’ excellent Women On A Roll report proposes five C’s that will get more women biking. These address the eight major issues that most surveys report as the barriers to women and cycling. Some highlights:

Convenience. It should be easy to park your bike wherever you go: work, shopping, entertainment destinations. Bike-friendly retail makes good business sense, and women statistically make more shopping trips and control more of their household’s disposable income. At work, access to lockers and showers alleviates concerns about storing clean clothes and grooming. Transit connections, especially express buses, can “multiply mobility” by traversing high-speed arterials and highways, with the bike as a means of transport for the first/last mile. (Biking to the current GRTC Park-and-Ride locations is a daunting prospect.)  Plus, there are other, less tangible needs such as more flexible working hours for parents (both moms and dads), and more walkable neighborhoods that safely allow children to transport themselves to school and after-school activities.

Confidence. Aggressive and distracted drivers threaten everyone, but women are more likely to admit fear. Bike education can begin at school, first in Phys. Ed. and continuing through driver’s education.  One day in a Traffic Skills 101 class can equip young cyclists and their parents with knowledge of skills like proper lane positioning (to prevent “dooring”) and simple, safe evasive maneuvers. Parents can teach basic maintenance techniques like changing a flat tire and secure locking in an afternoon. Even the students that don’t take to cycling will become drivers who know “Share the Road” as a practice, not just a pithy slogan.

Consumer Products. Sixty percent of bicycle owners 17 to 28 are women. Bicycle riding ranked 9th of 47 popular sports for total female participation in 2011, surpassing yoga, tennis, and softball. But many adult bike models don’t include a size small enough to fit a rider under 5’4”. A woman who can find a bike to fit her must then contend with frames and apparel mostly in pink, lavender, powder blue, and florals. These designs might stand on their own, but can you imagine tennis or softball gear selling in these “soft” presentations?

Community. The fun of riding a bicycle is amplified when you ride with others. Whether for enjoyment, fitness, or as transportation, it’s important to frame bicycling as an everyday activity. Invite a friend to go for a ride. Have a destination or reward. Lead no-drop rides. Help your daughters understand that bicycles are fun, but not merely toys. Incorporate cycling into family’s activities.

Consider for yourself whether it’s better to look fat on a bike, working toward your fitness, or in a car, making zero gains to your health. We are all busy, and making the time to dedicate to fitness is a challenge, but cycling is an easy way to workout while also being social, doing errands, or commuting.

On a larger scale, focus on local advocacy with an eye to equity and connecting lower income neighborhoods with access to jobs, food, and services. Vote for candidates that support high levels of funding for alternative transportation and infrastructure.

If the idea of encouraging a healthier, happier, region for all sounds appealing, it is our hope that you  join us on the 23rd to become a part of this growing effort.

Amy George is the Women’s Cycling Summit Coordinator.

Redefining Richmond: Arts! Culture! Food!

ICTby James A. Bacon

Richmonders berate themselves (and outsiders mock them) for their inability to decide where and how to build a baseball stadium for a AA baseball team. If the region’s political and civic leadership can’t pull off this most basic of regional tasks, one might legitimately wonder if they can accomplish anything useful at all. But it turns out that Richmonders can mobilize behind civic projects — it just has to be the right kind.

A case in point is Virginia Commonwealth University’s Institute for Contemporary Art, which has raised $33 million of its $37 million funding goal. Construction of the facility, designed by an award-winning New York architect, is located at Belvidere and Broad, one of the region’s busiest intersections and a gateway to downtown. This project, which will showcase art from VCU, one of the nation’s leading art schools, has not been controversial at all. Funds were raised through contributions by local philanthropists. With help from a construction loan from the VCU Foundation, construction began in June.

A city and region define themselves by the long-term investments they make in civic infrastructure. To pick a very different example: Buffalo, N.Y., a region of comparable size to Richmond, has poured money into a pro football complex downtown more magnificent than anything than Richmonders could conceive of erecting in their own city — and locals still aren’t satisfied. Buffalo groups are exploring an even more grandiose facility. Richmond has nothing to compare. But it does have arts and culture out the wazoo. And we locals like it that way.

Speaking to the Richmond chapter of Commercial Real Estate Women, Institute Director Lisa Freiman outlined the vision. As reported by Virginia Business, the institute will  showcase a changing array of exhibitions not only by VCU artists “but the best of contemporary art from around the world.” Freiman predicts that the facility “will create opportunities for cultural tourism and community revitalization.”

The tie-in between contemporary art and economic development is stronger in Richmond than it would be in many other regions. The advertising industry is remarkably vibrant for a region Richmond’s size. Local companies serve national clients, and they employ artists, graphic artists, videographers and the like. There is a easy, natural cross-over between the art world and the advertising world. Supporting one supports the other.

rappahannock

Travis Croxton (left) and Ryan Croxton, owners of the Rappahannock restaurant. Photo credit: Times-Dispatch.

Meanwhile Richmond — and Virginia as a whole — is developing the reputation as an up-and-coming foodie region. Esquire Magazine has just named Virginia “The Food Region of 2014″ in its 2014 Food and Drink Awards. “The Old Dominion has seemingly overnight exploded into one of the country’s greatest gastro regions,” writes the magazine, as reported in the Times-Dispatch. While the recognition goes to Virginia as a whole, Richmond is a vibrant part of the state’s foodie scene. Rappahannock restaurant won recognition as one of the 12 “Best New Restaurants” in the country.

The article cited Virginia’s diverse geography and the ability to source fresh, locally grown produce and artisinal food products from the mountains to the Chesapeake Bay as a big plus for restaurants aspiring to national quality. I’m sure that’s a factor, but I think the story is bigger than that. Richmond and Virginia produce great restaurants because the local marketplace supports them. People are willing to pay premium prices that restaurants must charge in order to recruit and pay chefs of national caliber.

New Yorkers and Washingtonians may laugh at Richmond’s pretensions in the worlds of art and cuisine — to many we’re still a hicksville backwater still fighting the Civil War. What they don’t see is how the region is steadily reinventing itself. Once the city prided itself on being a regional center of corporate headquarters. That prop to the economy suffered heavy damage during the recession of 2007-2008 and has been slow to recover. But there has been tremendous activity beneath the surface. Redevelopment along the downtown canal. The Richmond Folk Festival. Converting the James River into the region’s “Central Park.” The boom in downtown living. The French Film Festival. The gentrification of Church Hill and Scotts Addition. The creation of a fantastic network of mountain biking trails. The rise of the foodie movement and the renaissance of locally grown food.

Unconsciously, Richmond has been building the foundations of the “creative class” economy. It’s becoming the kind of place where creatives want to live, work and play. When creatives settle here, they start new businesses. In time, some of those businesses become success stories and economic dynamos that will propel regional growth. VCU’s Institute for Contemporary Art symbolizes how Richmond is redefining itself as something very different and very new.

Woo hoo! Giving Money to Rich, Out-of-State Capitalists Is Fun!

Richmond Mayor Dwight Jones (left) and Governor Terry McAuliffe.

Capitalist benefactors: Richmond Mayor Dwight Jones (left) and Governor Terry McAuliffe.

Richmond is home to numerous craft brewers: Legend Brewing, Triple Crossing, Richbrau, Strangeways and Hardywood Park, just to name five that show up on the first page of a Google search. But when it comes to rolling out the red carpet, state and local government is lavishing its favors upon Stone Brewing, of Escondido, Calif. — $23 million in City of Richmond bonds to build the brewery, $8 million to build a restaurant, $5 million from the Governor’s Opportunity Fund and potentially $250,000 from the Governor’s Agriculture and Forestry Industries Development Fund.

Admittedly, none of the local brewers have achieved the scale of Stone Brewing, which announced last week that it would invest $74 million in Richmond, creating 300 jobs. In a state economy struggling for traction, Stone’s announcement is the fifth largest economic development deal (ranked by investment) so far this year.

But the massive loans and subsidies raise a number of issues of equity and fairness, as Bart Hinkle noted one such issue in his Times-Dispatch op-ed this morning:

Stone executive Steve Wagner says other factors determined its final decision: water supply, wastewater capacity and proximity to suppliers. If that’s true, then Richmond should have been able to land the brewery without the handouts. It’s bad enough to think officials felt they had no choice but to offer Stone public inducements. It’s even worse to think the inducements were necessary.

Hinkle also wonders, as I do, how the home-grown brewers feel about the special treatment accorded their potential competitor. While the Stone Brewing brewery will serve a wider East Coast market, its restaurant will compete more directly with local brew-pubs. And, really, how many brew pubs can a city Richmond’s size support? Will Stone Brewing’s presence crowd out local players? Nobody knows but it’s a risk worth pondering.

There’s one other issue: Richmond apparently will be issuing $31 million in municipal bonds to help finance construction of the brewery and the restaurant. The city has finite borrowing capacity. If it borrows $31 million to back the Stone project, that’s $31 million it cannot spend elsewhere without endangering its AA+ (Standard & Poors) bond rating. This is a city, mind you, that wants to issue bonds for an $80 million baseball stadium and redevelopment project in Shockoe Bottom, $8 million to create a Bus Rapid Transit system along Broad Street, spend millions more to the city bicycle-ready for an international bike race in 2015, push ambitious housing-redevelopment and neighborhood-revitalization goals the city’s East End, support a new children’s hospital, and presumably pursue other capital improvement projects and economic development opportunities as opportunities arise.

Its good that Mayor Dwight Jones has a can-do attitude. But the city needs to pick its projects wisely. It needs to leverage its public investment to the max. And it needs to keep some powder dry for other opportunities that may appear. The best criteria to adopt when investment public dollars is this: Would I invest this money if it belonged to me? Am I maximizing  risk-adjusted Return on Investment? I have seen no evidence that the Stone Brewing deal would pass that test.

– JAB

Virginia Tech: What a Difference a Decade Makes

Tech_robotics_lab

Virginia Tech robotics lab

It’s probably been a decade since I’ve been to Virginia Tech. I spent a year living in Blacksburg about 30 years ago and I visited with some frequency during my tenure as editor and then publisher of Virginia Business magazine, but I haven’t had much cause to return to Hokieland recently until this weekend when the Bacon family visited to expose the Bacon male progeny, who has expressed an interest in pursuing an engineering career, to the top engineering school program in Virginia. (Sorry, Wahoos, but it’s true, Tech engineering is No. 1 in Virginia.)

It is remarkable what has transpired in Blacksburg in a mere decade — both in Virginia Tech and the surrounding town. Slowly but surely Virginia Tech continues to gain ground against other engineering schools in the hyper-intense competition for resources, cutting-edge programs and prestige. Tech ranks in the top 50 nationally for total R&D expenditures but the College of Engineering ranks among the Top 10 undergraduate engineering programs in the country.

The College of Engineering also has generated considerable spin-off economic activity. We’re not talking Boston or San Francisco-style impact, but Tech’s Corporate Research Center — in essence, a corporate park for companies interacting with the university — has grown to 31 buildings employing 2,700 employees. That’s small potatoes compared to, say, Northern Virginia, but it’s pretty darned impressive for Southwest Virginia. Indeed, the performance is all the more impressive considering the fact that Tech is not situated in a major labor market, is geographically remote and has lousy airline service.

One benefit of Tech’s isolated location is that the physical setting of the New River Valley is stunningly beautiful. And I’ll say this about Tech’s campus: It may not have the world-heritage quality of the Thomas Jefferson-designed Rotunda and Lawn of the University of Virginia, my alma mater, but university leadership has done a superb job of maintaining architectural continuity over the years — all buildings are built of Hokiestone. I hesitate to say so but the Virginia Tech campus overall is more aesthetically pleasing than the hodge-podge of UVa outside of the Rotunda-Lawn core. Furthermore, the Hokies have paid close attention to the art of “place making” over the past couple of decades. The campus is much more inviting in many small ways than it was when I saw it last.

Another virtue is that the town of Blacksburg has been evolving in a positive way. County planners have permitted developers to increase the density of buildings around the perimeter of the campus. Far more apartments and commercial establishments are within walking and biking distance of the Virginia Tech campus than there were when I last visited. The town has replaced two busy signalized intersections with roundabouts, and I spotted a couple of tandem buses rolling through town.

My main concern is that Blacksburg’s prosperity is built upon a mountain of student indebtedness. But rising tuition is hardly unique to Virginia Tech.  Indeed, the College of Engineering probably could do just fine catering to out-of-state students willing to pay significantly more than in-state students do. The College of Engineering does not charge what the market would bear, to the benefit of thousands of Virginia students. All things considered, I’d be delighted if the Little Porker ended up at Virginia Tech.

Update: The densification of downtown Blacksburg continues apace. Town Council approved 4 to 3 yesterday (Oct. 15) construction of a 37-bedroom, four-story condominium on the edge of downtown. The project had stirred controversy because it bordered a neighborhood of single-family houses. The developer argued that the condo would be located within walking distance of Virginia Tech and downtown.

There’s plenty more room for Blacksburg to densify without impinging upon old neighborhoods — just up-zone the Main Strip commercial strip. Vast acreage there is dedicated to parking lots and low-rise shopping centers. If the town council encourages mixed use and runs those tandem buses down Main Street, it can accommodate the town’s population growth for many years to come.

– JAB

Virginia Tech campus -- very bike friendly

Virginia Tech campus — very bike friendly