Weekly Update: 04/24/2022

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But OTOH, here are a couple of budget numbers from 2008–right before the bottom dropped out. Note the Sales Tax revenue:

Remember: that represents the money that people spend here. It’s as good an indicator as any as to the health of our business community.

OK, now here’s the 2019 Budget.

Just wait a cotton-pickin’ minute! In 2018 we generated pretty much the same sales tax as 2008. Now think about that for a secy-poo. After all the construction cranes, the new hotel, the FAA building, the big additions to Wesley. And still, people do not spend any more money here than they did before the Great Recession.

You can look at this at least two ways

I can see a certain number of saying, “You just proved our point, JC! This is exactly why we need to re-develop that Marina into “the magnet!” Because no matter what we’ve tried, we’ve never been able to get that downtown to earn for us!”

Maybe.

Or, maybe back in 2007, Marine View Drive hosted a surprising variety of interesting small business you’ve forgotten or did not know about which had things people liked to spend money on–even though the buildings were just as funky. One can bemoan “the death of retail” and speak about how “QFC couldn’t make it”. But the fact is, people were happy to use a nice local wine shop. And they were just as happy to visit Tyrone’s Rib Shack then for the same reason they enjoy Dat Creole Soul now: you can’t beat a good plate of southern cooking.

Aside from all the vast macro-economic stuff, maybe if you put out a good product and you get some basic skills at running a business, you draw customers and make money.

But the real message I want to send in this post is this: we should find out for sure, like any for realz business would, rather than just gambling with other people’s money (meaning yours, by the way) which has been our modus operandi since I’ve lived here. And since we just spent $1M on a ferry pilot project, there’s never a better time to start.

It’ll bring tens of thousands…

I keep beating on this one clip of then Deputy Mayor Mahoney because I’ve heard that same hyperbole so many times over the years. Here’s Mayor Sheckler betting Deputy Mayor Kaplan a lunch that the hotel will get built. Perhaps the reason the bet was so low-stakes is because by that point it was no longer about making a ton of money. Success had been reduced and re-defined as getting it built.

Magnetism…

The central premise of “economic development” here seems to have always had something to do with that ‘magnetism’. What has been said over and over is some variation on this:

We should build (x) because

• In the short term, it will create a big ol’ bag o’ one-time money and some great construction jobs.
• But in the long term, the project will be a magnet. It will draw people (and their wallets) inexorably towards the downtown. Now, if said project turns out to generate ongoing revenues? Super Green, baby. But even if it doesn’t, that does not matter. It’s the drawing power that matters.

That’s been the story here. Over and over…

• We heard that with Sheckler and the hotel.
• We heard that with the FAA building.
• We heard that with SR3.

And now I’m hearing it with all the Marina Redevelopment. But the innovation this time is that it’s not based on a single draw, but rather it’s a team-up:

• The ferry will be the magnet
• The hotel will be the magnet
• The Adaptive Purpose Building will be the magnet
• The Stairs will be the magnet
• And SR3 will be the magnet

And  even if any one of them is individually is not… er…  ‘attractive’ enough?

No Matter Puny Earth Man. The combined force of all those powers will generate a super-magnet that no mortal consumer can resist! Muwhahahaaa!

Sorry, I got carried away.

Because the one thing all these projects have had in common with an *Avengers Movie? That magnetism was all based on fantasy, not on any business case.

Misdirection…

In none of those projects was there a legit plan describing what the project would do for the City and how it would get us there. It was always just “Hotel on Pac Highway? Great idea, Bob!”

The only thing that actually panned out was the one-time money. And if something happens over and over, ya gotta start wondering if that wasn’t the whole point in the first place: the temporary construction jobs, the one fat check and… the photo op with the shovels.

I left my crystal ball at home…

At our recent planning meeting I beat on the idea of a sales tax by geography report. For years I’ve been told that it was illegal. It’s not illegal. Other cities have been doing it for a long time.

It’s not just the chronic misinformation, it’s the fact that we’re do damned uncurious. If you don’t want to know how much each part of the City earns, it tells me you don’t really care about how anything performs.

When anyone presents a business plan for a new restaurant or a hotel, or even an entire shopping center, they are expected to show investors (that would be you, dear voter) some revenue projections and an explanation of how they’ll get there.

Those are things we’ve never had here. We’ve never treated economic development like (wait for it…) a business; something with goals.

And that’s sad, because finance people are really good at forecasting various numbers, even highly variable items such as sales tax or red light cameras. You don’t need some ‘crystal ball’ as our City Manager is fond of saying. Most of the Finance Directors we’ve had have come very close in their projections–even during times when we were on a big rollercoaster. Well done to them.

It’s time to get serious…

My colleagues seem to have decided that we should change the entire purpose of the Marina from being primarily a place for recreation to being exactly that tourism magnet–the economic driver of our City for the next generation.

And if that’s the case? I expect it to be managed like  our lives depend on it. If we’re going into the hospitality and tourism businesses,  I expect to know how much money are we going to make, and how we’re going to make it. Especially if that money has to hit $50M to pay for dock replacement.  This is serious. We are literally betting our future on it.

But at that strategy meeting what you did not hear is anything like, “Our goal is that by 2030 our General Fund will be at ($n) million dollars, because we want to be able to do (x,y,z). OK gang, that’s the destination. Now: how do we get there?”

I have literally never seen our City set any targets, monitor them and change direction along the way in order to make sure we hit those targets.

We have a fiduciary responsibility to maximise the return of your investment in Des Moines. That doesn’t mean, “That ferry sure looks nice.” No. If we decide that we want to get into the tourism and hospitality business, then our job is to implement proposals with the best possible earning potential. The best.

Another possibility…

Now, I have 30 years of reasons to be skeptical about any development projects here. And the current Marina plans are no different–because they have no numbers and no goals.

And that sales tax by zone report that was ‘impossible’? I’ve run across that sort of impossibility many times. Maybe we could do a lot more to improve our downtown without selling off the Marina or gambling on a ferry. Yes, even with the landlords and the funky buildings. But again, it’s impossible to say without… numbers and goals.

This is a matter of equity and justice. We don’t have enough money to do a lot of things we should be doing. Pick an area: public safety, health, education, parks, seniors, roads, transit. We have an obligation to earn the money to get there and with that comes an even more sober obligation to make economic development decisions based on hard data.

_*I know. That the magnetism thing is actually from another Marvel franchise. I just couldn’t find a shot of all the X-Men doing that combo-attack thing you see at the climax of every superhero movie. More fake news.