Monday, December 3, 2012

The Economic Trail Of Tears

The Business Journal of Milwaukee recently ran a handful of articles regarding a revival in Milwaukee, an new arena being a part of that, and Oklahoma City (OKC) possibly being a roadmap for the whole process.

Oklahoma City has recently developed a river walk, completed a large hotel development, and built a stadium to attract an NBA team (the OKC Thunder). I guess we're supposed to imagine Milwaukee doesn't already have these, or that duplicating similar venues will lead to greater growth?

Or, maybe we can turn back the clock and reverse our history. Milwaukee is an older city (1846) than Oklahoma City (1889). Newer cities, like developing countries, are experiencing higher rates of growth than older cities. Add in the warmer climate and the heavy influence of Big Energy (mostly oil & natural gas) and you pretty much have to whole story behind OKC's growth. It's not because of some magical development plan based on the public funneling more money to private projects.

Oklahoma City actually has a larger share of its workforce employed by the government - 15.1% versus  13.2% in Milwaukee.  Should Milwaukee expand government? I'd love to see the MMAC recommend that.

20.8% of Oklahoma City residents have no health insurance coverage, in Milwaukee, it's 15.6%. For that 5 or so percent of the population in OKC with no health care coverage, would they claim a better quality of life?

The rental vacancy rate on OKC 8.1%, in Milwaukee 3.5%. Median home value in OKC $131,100, in Milwaukee $133,800. Median rent in OKC $720, in Milwaukee $753. It appears the value (and occupancy) of the built infrastructure is holding it's own compared with OKC.

The article relies on quotes from Greg Marcus, CEO of Marcus Corporation, for the inside story on Oklahoma City. He developed a hotel there, so he knows. Marcus claims Kohl's Corporation may have moved to downtown Milwaukee if the quality of life had been better. Couldn't this excuse (quality of life), to some degree, plausibly be used every time one location is chosen over another? And, by doing what? What does he recommend that Milwaukee, imitating OKC, do to improve the quality of life?

Marcus elaborated, "If you don't invest in your product, you don't get customers. You need to have a product that is so compelling and invest in infrastructure."

Yet, these same omnipotent business leaders also don't want to have to pay the taxes that pay for improvements in infrastructure.

None of this means there isn't anything to learn from OKC. But sound economic development isn't just latching on to the latest rising star and reciting their most recent achievements as a best practices guide.

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