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Commentary: Local Business Growth Attracts Outside Interest

Oct 5, 2009

To attract new capital to New Orleans, we tend to market the city’s assets - its distinctive character, its beautiful architecture, its port facilities. Meanwhile, the underlying deficiencies that keep investors away - crime, poverty, low literacy - continue unabated.

New Orleans CityBusiness
by Dana Eness

To attract new capital to New Orleans, we tend to market the city’s assets - its distinctive character, its beautiful architecture, its port facilities. Meanwhile, the underlying deficiencies that keep investors away - crime, poverty, low literacy - continue unabated.

Last year, a consultant from Miami’s Beacon Council, a public-private economic development enterprise, advised the New Orleans City Council to put quality of life issues first and foremost in efforts to recruit outside investment. After all, the consultant said, corporations are made up of people and people come with families.
While the investment opportunity may look tantalizing to corporate decision makers, the move still has to pass what he called “the spouse test.” Employee spouses will want to be sure there are quality schools, nearby groceries and safe neighborhoods.

To draw new money into the local economy and keep it here earning dividends, we must capitalize on our strengths. Our music, food and architecture are certainly world-class. In an increasingly homogenized world, entrepreneurs and skilled workers are more likely to invest and settle in communities that preserve their distinctive local character.

But character is not enough.

We must be a community attractive to compatible high-wage sectors such as health, biotechnology, manufacturing and film- and port-related industries. We must be a community with a well-educated labor pool, low crime, excellent schools and financially stable families.

In other words, a healthy local economy must be firmly in place.

The Urban Conservancy, in partnership with urban retail analysis firm Civic Economics, recently released its study, “Thinking Outside the Box: A Report on Independent Merchants and the New Orleans Economy.” Data collected from Magazine Street merchants on taxes, revenue, charitable giving and payroll shows local retailers, when compared with leading chain competitors, generate twice the annual sales, recirculate revenue within the local economy at twice the rate, and, on a per-square-foot basis, have four times the economic impact.

Implications for New Orleans’ redevelopment are enormous. The study demonstrates that investing in locally owned businesses is a cost-effective way to grow the New Orleans economy and is compatible with development patterns in existing commercial districts. The study reveals that 100 local businesses supporting 100 New Orleans families can fit into the 179,000 square feet that a big box retailer occupies.
The city can stimulate wealth creation and retention by developing a coordinated strategy that focuses on local businesses growth as a prerequisite for business attraction.

Full retail occupancy along St. Claude Avenue; Freret, Canal and Oak streets; and our other commercial corridors would be a telling indicator of success in stimulating local economic growth and stabilizing surrounding neighborhoods. Procurement policies demonstrating the New Orleans’ determination to build from within by sourcing with local vendors first and whenever possible would be another good indicator.

Firms whose business models require continual expansion or collapse will always invest in New Orleans, along with every other population center with a pulse. And residents tired of blighted and vacant commercial spaces will shrug their shoulders and say, “Oh, well. It’s better than what was there before.”

But for the long-term health and vibrancy of our city, we need to attract firms that are investing in New Orleans because of its unique qualities, not in spite of them.
Strong place-based businesses are key to the survivability, livability and prosperity of every community. And as quirky as New Orleans is, it is no exception to this rule.

Dana Eness is executive director of New Orleans-based nonprofit The Urban Conservancy.

Read Comments 1
Well stated. Understanding the link between quality of life issues and economic development is key. And key to that is understanding how chain retail and its attendant corporate welfare — tax increment financing, subsidized or free infrastructure improvements, etc. — have contributed to undermining our communities financial position.

Thanks for the research and the thoughtful commentary.
Comment By Geoff

Tuesday, October 6, 2009 @ 03:42 PM CDT 2
Right on the mark. We know the connection between “quality of life” and economic development—well, anyone who’s lived in, say Seattle, knows. It’s something that we need to work on, and work hard and fast on.

It’s long past time that we develop New Orleans as an interesting and good place to live, rather than a place to get drunk. To do this, we can begin by fixing our streets, making sure our trash is in bins rather than in the streets, and making sure that recycling is part of trash pickup.

We can reduce crime in a number of ways, making the city more walkable, encouraging people to work together and play together. City park, the walking trail along Bayou St. John—these kinds of green spaces provide the circumstances for people to get used to being around people who may bot be like them, and that’s a good beginning for talking with one another.

A more friendly city, and more friendly streets, are a good start. Oak Street is often wonderful just to walk up and down—folks sitting outside talking, shopowners chatting with folks, kids on bikes and skateboards. Very pleasant indeed!

Comment By Elaine