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Not to Sound Like a Snob But Where You Work Matters
A fake Main Street in an office park that our tax dollars helped subsidize while . . .
By SEAN MANN
Without sounding like some pastel polo clad snob at the country club I'd like to suggest that it actually matters where you work.
Now, whether you work for a Fortune 500 company, a neighborhood pastry shop, or as the hushpuppy fryer at a Long John Silver's is of no concern of mine or hardly something I would judge someone over.
What does matter is where you work as in the geographic location of your place of business.
In case you missed the news, General Electric decided this summer to locate its new $100 million Advanced Manufacturing and Software Technology Center in Van Buren Township.
We beat up on ourselves a lot these days and it'd be easy to mistake GE's decision to bring up to 1,100 new high-paying jobs to our state as some form of charity.
Let's not forget that Michigan has the nation's fourth largest high-tech workforce, and thanks to the recent reshuffle of the American automobile industry a lot of quality engineers hungry for employment. And as GE itself put it, "Detroit is the heart of manufacturing and technical innovation in America."
And of course we can't ignore the $73.9 million in tax credits over 12 years that officials in Lansing showered upon GE.
Subsidizing jobs
Every state throws tax credits at companies to relocate to their state, in a universal cut-throat race to the bottom. In fact, in Michigan, we have gotten so good at it we now forgo $35.8 billion in taxes annually thanks to abatements, credits, and loopholes, while only collecting $25.1 billion.
My contention is not with the state giving away tax credits. My concern is where we are subsidizing these jobs to be located, or more to the point where we aren't subsidizing these jobs to be situated.
GE's new effort in Michigan is situated in Visteon Village in Van Buren Township, just off I-275 near I-94 and Detroit Metropolitan airport.
Constructed in 20005 on an abandoned quarry, Visteon Village was an understandable location for GE as it was being underutilized by the Visteon Corporation who has for the past four years been shedding jobs in an effort to avoid bankruptcy, which it eventually entered in May 2009.
Original project was made possible with a state and local incentive package to Visteon totaling $74 million, including the Michigan Economic Development Corporation sponsoring a $15.7 million business tax credit over 13 years. The Michigan Department of Transportation (MDOT) also provided a $5 million grant for road improvements around the project.
. . . existing city centers struggle to develop the density and vibrancy needed to attract the highly-skilled and mobile workforce key to our economic renewal.
Building fake Main Streets while real ones struggle
A recent employment video by GE to highlight the selling points of their new digs corresponds with a report on the intent of Visteon Village when it was first constructed:
One of the goals in the design of Visteon Village was to create an environment that encourages creativity and collaboration. . . . Visteon Village is designed to look like a traditional Main Street in a small European village, complete with cobblestone streets and buildings that resemble historic downtown structures, . . . during the summer, employees can walk outside along landscaped walkways reminiscent of a New England town.
Visteon Village was built several years ago, but it's never too late to ask questions like, why as a state are we subsidizing the construction of fake Main Streets when existing ones are being riddled by vacancies and disinvestment?
The office vacancy rates in downtown Detroit and Grand Rapids are hovering around 20 percent. So why doesn't the state work more aggressively to support developments that avoid costly infrastructure development at the edge of cities, cause disinvestment from established core commercial areas, and ultimately lower the value of other commercial and residential property, reducing public revenues?
The answer is that the current administration in Lansing has taken the attitude of bringing jobs to this state at any cost with an indifference to location and the long-term consequences of decentralization of commerce and industry. This is the same shortsightedness that led to the depopulation and disinvestment in our core communities over the past 50 years, resulting in our uphill battle to rebuild them in order to attract the mobile workforce of the 21st century.
The argument for downtown
If the state is going to go to such lengths to bring jobs to abandoned facilities why don't we see to it that those jobs are situated in places that will generate the greatest economic impact?
Just think of the impact those 1,100 GE jobs would have had if they were situated in Downtown Detroit, or Ann Arbor, or Pontiac instead of in a sprawling office complex in the middle of nowhere.
Look at this map of where Visteon Village is situated. It is nowhere near any retail or entertainment.
If the jobs were situated in a city then employees could easily walk to local restaurants and retail facilities, which are typically locally owned and tend to have a greater impact on the amount of money kept in the community. A 2003 study of government workers who work in downtowns found they spend between $2,500 and $3,500 annually in the surrounding area of where they work, significantly more than if they were in office parks.
Furthermore, having those extra bodies in a city center not only pumps money into the local economy, but also brings life and vitality to cities which our city centers all too often lack.
Utilizing Existing Infrastructure
It is common to hear arguments against investing in cities on the grounds of additional building and rehabilitation costs, but it's not like office parks spring up at no cost. The public usually subsidizes the construction of new infrastructure to accommodate new office parks and inevitably picks up the bill to maintain the roads and utility lines in the long term.
Why are we building any new infrastructure when our existing roads and utility lines are crumbling and our population is stagnant?
There is a very real cost to building new instead of utilizing our existing infrastructure that our leaders tend not to appreciate, but the public apparently does. A 2007 survey for the National Association of Realtors found 81 percent of voters want to redevelop older areas rather than building new.
As a potential employee aren't you more attracted to a work setting that allows you to explore and be entertained than the typical office park off the highway.
It's not about being anti-suburbs
The economies of cities and suburbs are intertwined and strong core communities are essential to the well-being of metropolitan regions. In a global economy, Van Buren Township and other communities on the fringe of metropolitan regions cannot succeed if they are situated next to dying urban cores.
All and all, I couldn't be happier that GE has located a major research and development project in Michigan. However, as a cash-strapped state that is cutting key public services ranging from education to infrastructure to public safety and support for the arts, we need to be more critical of our economic development efforts to ensure that we are getting the most out of our investments.
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