community, Place and the Economics of Historic Preservation

New Jersey Historic Preservation Awards Ceremony April 27, 1996 Montclair, New Jersey Donovan D. Rypkema

Good afternoon and thank you. every place" has to have a location Jacobs, Lewis Mumford, and My job today is to talk about the but I do not believe every location William Whyte notwithstanding, the economics of historic preservation, meets the test of being a “place.” I vital importance of place seems to and I certainly intend to do that. start with that contention from read- be one of the lessons we have large- The statistics about jobs created in ing the titles of some recent works ly unlearned. New Jersey by historic preservation, from which I have taken much of Psychiatrist Winifred Gallagher the addition to household incomes what you will hear today. Listen to has investigated the impact of place here, the overall impact on the local the names of these books: The on human behavior. She writes, “In economy are both impressive and Experience of Place; A Sense of Place; a very real sense, the places in our important and I'll talk about them. The Great Good Place; The Power of lives …influence our behavior in But if we are truly going to appreci- Place; Placeways. ways that we often don't expect.”… ate the economic significance of all These are all authors from differ- [A] good or bad environment pro- of that, we have to start by taking a ent disciplines with different per- motes good or bad memories, which step back - by getting a sense of the spectives. But there are two very inspire a good or bad mood, which context within which economic important common denominators: inclines us toward good or bad change is taking place, by under- first all of them deal with this some- behavior.” She talks about the standing the real factors that affect thing called “place”. And secondly, effect of place on the level of fanta- our local economies. for each of them that place is sy in children, the crime rate, atti- And when we begin to think imbued with something beyond its tudes of office and assembly line about our economies on a sustain- physical characteristics - something workers, and urban decay. able basis in the midst of a rapidly intangible: an experience, a sense, a Sociologist Ray Oldenburg takes evolving international marketplace power, a quality of being good. a very different perspective. we cannot begin with interest rates, Let me return to the definition of Oldenburg contends that human or trade policies, or unemployment “place”. It is something more than a beings need what he calls a “third levels. Instead we must begin with location but what is it? Place has place” - home being the first and the two fundamental concepts that been defined as “a location of expe- work being the second. He is rather will have the biggest impact on the rience”, as “the container of shapes, specific about the characteristics of economics of each of our towns and powers, feelings, and meanings”, as these “third places”. They are filled cities - the concept of place and the “a matrix of energies.” The defini- with people, they are not exclusive- concept of community. Those are tion I like best comes from land- ly reserved for the “well-dressed not the same things, but the under- scape artist Allan Gussow who crowd”, there are abundant places standing of both is central to under- defines place as, “a piece of the to sit, human scale has been pre- standing not only the economics of whole environment that has been served, and “cars haven't defeated historic preservation, but more claimed by feelings.” the pedestrians in the battle for the broadly the economics of the 21st streets.” Just think for a moment century. So why this renewed interest in place? Since Plato and Sophocles about your favorite neighborhood Let's begin with “place”. What is there has been considerable atten- and see if it doesn't meet those tests a “place”? Well first it is not a syn- tion devoted to place. But during - a diversity of people, sitting onym for “location.” A location is a this century we have chosen to among buildings of human scale, in point on the globe; an intersection ignore many of the lessons of the an area that isn't dominated by of longitude and latitude. Certainly past, and the contributions of Jane automobiles. My favorite neighbor- hoods in Washington, New York, Let's move to another area that But this renewed interest in com- Charleston, Boston, Louisville, New has been quietly but very quickly munity isn't limited to writers and Orleans, San Francisco, Seattle, emerging within another wide theoreticians. Neighborhood Portland, Denver, Spokane, spectrum of disciplines. Again, like activists, downtown associations, Richmond, Columbus, Milwaukee place, this is a rediscovery rather inner-city housing organizations, all meet those tests and they are all than a new invention. It is the small town development groups are historic neighborhoods. His “third renewed recognition of the impor- surfacing as major proponents of places” include public spaces within tance of a concept called “commu- community in their locales. neighborhoods. He reaches the nity.” The use of this word “communi- same conclusion as does Gallagher There is, in fact, a national move- ty” is certainly not new. In the six- about place and personal safety as ment emerging called ties there was a call to community he observes, “Attachment to the “Communitarianism.” It is lead by in the form of the “power to the area and the sense of place that it the sociologist Amitai Etzioni, who people” movement. But that so imparts expand with the individuals is joined by Common Cause called community was out to save walking familiarity with it. In such founder, John Gardner; advisor to the world; today's community is out locales, parents and their children the President, William Galston; Law to save the neighborhood. That range freely. The streets are not Professor John Coffee, pollster community was naive but also only safe, they invite human con- Daniel Yankelovich and others. The decidedly self righteous; today's nection.” platform of the Communitarians community is realistic and unpre- Daniel Kemmis is the mayor of spelled out in Etzioni's book The tentious without being meek. Missoula, Montana. Kemmis is frus- Spirit of Community is multifaceted That community was ideological trated with political gridlock on the and much of it not germane to this and decidedly on the left; today's local level. But is his solution more discussion. But the definition of community is political but not par- government programs, more mem- “community” is indeed useful: “...a ticularly partisan and is much more bers of his political party in office, place in which people know and “help ourselves” than “you have to or more news conferences? No. care for one another - the kind of help us”. There is nowhere that Instead he takes a wonderful step place in which people do not mere- today's community is growing more back from the cacophony of politics ly ask 'How are you?' as a formality rapidly than in African American and grounds himself to the ground but care about the answer.” and Hispanic neighborhoods in our around him. He writes: (W)hat ‘we’ The stated goal of the communi- central cities. do depends upon who ‘we’ are (or tarians is to “restore communities.” who we think we are). It depends, So we have this interdisciplinary As there is an intangible “sense” group of thinkers, observers, and in other words, upon how we choose that makes a place out of a location, to relate to each other, to the place theorists - independent of one so there is an intangible “spirit” another - who are rediscovering the we inhabit, and to the issues which that makes a community out of a that inhabiting raises for us. significance of place. At the same municipality. time we have another interdiscipli- If in fact there is a connection Others are researching, writing, nary group of thinkers, observers, between the places we inhabit and and talking about this concept of and theorists, joined by some local the political culture which our community as well. Harvard Law activists - who are proclaiming the inhabiting of them produces, then Professor Mary Ann Glendon critical importance of community. perhaps it makes sense to begin expresses concern that “communi- with the place, with a sense of what What almost none of them has ties” are insufficiently recognized recognized is that the two concepts it is, and then try to imagine a way by the court system. Theologian of being public which would fit the - community and place - are insepa- John Snow bemoans rootlessness rable. “Place” is the vessel within place.” Place as the place to begin and the lack of communities to sup- political discourse. which the “spirit” of community is port families. Sociologist Robert stored; “Community” is the catalyst So there are the observations of Bellah and his colleagues contend that imbues a location with a psychiatrist, sociologist, and politi- that reaching The Good Society - the “sense” of place. The two are not cian. But regardless of each particu- title of their most recent book - divisible. You cannot have commu- lar perspective all of these people requires “paying attention” by nity without place; and a place with- reached the same three conclusions: which they mean paying attention out community is only a location. 1) that place has an immense impact to community. Conservative on how we think and act as human African-American organizer Robert I would further argue that the beings; 2) the quality of the built Woodson, moderate Democrat built environment in general, and environment around us is, overall, Congressman David Skaggs, Black perhaps historic preservation in par- getting worse instead of better; and columnist William Raspberry all are ticular is the nexus at which the 3) there has been a marked shift thinking, writing, talking about concept of community and the con- away from the interaction between community. cept of place intersect. people and their place. Let me remind you that not one of the writers I have cited repre- ists, but in their searching for mean- exist. Without jobs people either sents him or herself as an historic ing in place and community they move away or become permanent preservationist or urban designer. have found – what preservationists dependents of the state. Departure And yet what these writers are have found, that our historic built and dependency have the same end observing is at the heart of what environment is central to both com- result - loss of community however quality urban design is all about. munity and place. you define it. Psychiatrist Gallagher quotes her Once understood in this context We are beginning to learn that it environmental psychologist col- many things begin to make sense. A is possible to have economic growth league Ralph Taylor as saying, “If I deeply felt anger when a neighbor- without necessarily having popula- could do one thing to improve hood landmark is razed isn't tion growth. Better education, high- urban life, I'd rehab all the vacant because of the building - it was only er productivity, innovation, import housing.” Think of that. The one stone and wood after all. It was substitution are all ways of having thing he would do is rehab vacant because a piece of the community economic growth without necessari- housing. was taken away. It also tells us why ly having population growth. So we Sociologist Oldenburg says, preservation is an overwhelmingly don't necessarily have to have more “Third places are most likely to be local endeavor, why the loss of a people, but we do have to have eco- old structures. They are frequently building in your town isn't, frankly, nomic growth. located along the older streets of too important to me, nor my neigh- We are in the midst of a major American cities, in the neighbor- borhood loss to you. Those aren't shift in how the economy functions. hoods or quarters not yet invaded our communities. It explains why There are four inter-related ele- by urban renew[al].” strong neighborhood groups are ments that make up this shift: first, Sociologist Bellah observes, much more often found in older globalization; second, localization; “Communities, in the sense in neighborhoods than new - the sense third, quality of life as the critical which we are using the term, have a of place' and the spirit of communi- factor in economic growth; and history-in an important sense they ty have had time to reenforce each fourth, location dependency being are constituted by their past and for other. replaced by innovation and place this reason we can speak of a real Now all of these writers had their dependency. community as a “community of own slant on why the sense of place First globalization. For all the memory” one that does not forget or the spirit of community was discussion we hear globalization has its past. important for public safety, political only just begun. The whole concept Not long ago on the internet I participation, cultural development, of a “national economy” is becom- found an AP story quoting the pres- aesthetic richness, neighborliness, ing obsolete. We are in a global ident of the Center of the New legal balance, mental health, con- economy, a global market, place, West, a Denver think tank. Phil flict resolution. Those are all impor- and in coming years it will only be Burgess said, “The more lofts, con- tant outcomes and I am sure place more so. Those that choose to opt dos, apartments - the more people and community affect them. But I out for the sake of parochial inter- we get living in downtown Denver don't know anything about those ests, provincial ideology or protec- the better off it is for restoring the things. What I know a little about is tionist isolationism will simply be social fabric of the community.” economic development so I would left out, doomed to economic Note that he didn't say restoring tax like to spend a few minutes talking decline, and their citizens will be revenues or property values or the about why sense of place and the the losers. “Think Globally, Act job base - although all of that is spirit of community are crucial for Locally” was the slogan of antinu- true. He said, “restoring the social successful economic development clear activists in the 1970's and of fabric of the community.” And if well into the next century. environmentalists in the 1980's. In you've been in Denver the last few Let me begin with two simple this decade and beyond it will nec- years you know that the new hous- facts of economic life: first, a com- essarily be an economic develop- ing is in old buildings. Restoring munity cannot continue to survive ment strategy. historic buildings in downtown is without economic health; and sec- But the exciting part of globaliza- restoring the social fabric of the ond, economic health cannot be tion isn't the “think globally” part - community. maintained without economic it is the “act locally” part. Largely The conservative social critic, growth. While towns and cities and ignored in the current trade policy Christopher Lasch, wrote, “It is the nations can stand the periodic ups debate is the vital role individual decline of those communities, more and downs of business cycles, fail- towns, cities, even neighborhoods than anything else, that calls the ure over the longer term to have have in the globalization process. future of democracy into question. economic growth will inevitably But Michael Porter in his book The Suburban shopping malls are no lead to economic decline. Competitive Advantage of Nations substitute for neighborhoods.” Economic decline is fewer jobs says, “The process of creating skills None of them overt preservation- and lower pay for the jobs that do and the important influences on the role of improvement and innovation investors are going to be moving to In part they write, “A place’s are intensely local. Paradoxically, Duluth or Mankato or St. Paul. It's potential depends not so much on a open global competition makes the because without quality of life rein- place's location, climate, and natural home base more, not less impor- vestment won't take place. No rein- resources as it does on its human tant.” vestment means no economic will, skill, energy, values, and organ- Akio Marito, founder of Sony, growth. No economic growth means ization.” And they add, “In this last calls this phenomena “global local- economic decline. Economic decade of the twentieth century, a ization”. Business guru Peter decline means fewer taxpayers and dominant factor in any community's Drucker ties this global localization fewer taxes. life is the emergence of a global to community. In Post Capitalist Fewer taxes means the bonds economy and its consequences for Society Drucker writes that tomor- can't be paid off. It really is a case the local economy and the quality row's educated person “must of, “for lack of a nail the war was of life.” become a 'citizen of the world'-in lost.” We will return to this quality There is one more economic con- vision, horizon, information. But he of life issue shortly. sequence of these four economic or she will also have to draw nour- The last of the major changes in trends that affects our towns and ishment from their local roots and, the economic development field is cities. It is the matter of community in turn, enrich and nourish their the shift from cities being location differentiation. own local culture.” dependent to cities being place In Italo Calvino's Invisible Cities Well, globalization is the first of dependent. Think about how nearly Marco Polo is describing to Kublai the major shifts affecting economic all cities began - they were founded Khan the various cities of the development and localization the and grew because of their depend- Khan's vast empire. In depicting the second. The third is the importance ence on a fixed location. They were city of Trude, here is what he tells of quality of life as the most signifi- located on a seaport, or near raw the Khan. cant variable in economic develop- materials, at transportation cross- “If on arriving at Trude I had not ment decisions. What constitutes roads, or close to a water source, or read the city's name written in big let- “quality of life”. Well, a variety of at a point that was appropriate as a ters, I would have thought I was land- lists have been made. But every military defensive outpost. They ing at the same airport from which I item on every list I have read can be were location dependent cities. had taken off. divided into one of two categories: Tomorrow's cities - at least in The suburbs they drove me through the physical and the human. Do you North America, Japan, and Europe - think that it's only coincidence that were no different from the others, with will be innovation and place the same little greenish and yellowish the physical might be redefined as dependent cities. Please note that I “place” and the human redefined as houses. Following the same signs we said place dependent, not location swung around the same flower beds in “community”? Quality of life is the dependent. amalgam of those things that make the same squares. The downtown streets a place out of a location and a com- Our product tomorrow will be displayed goods, packages, signs that munity out of a bunch of houses. knowledge and information. had not changed at all. This was the That's why the debate cannot be Information is an inventory that first time I had come to Trude, but I allowed to be framed as economic takes almost no storage space, can already knew the hotel where I happened development or quality urban be created anywhere, can be trans- to be lodged; I had already heard and design. ported instantly and cheaply, and spoken my dialogues with the buyers and can be adapted, expanded, and sellers of hardware; I had ended other Today, for lots of reasons, eco- modified at will. days identically, looking through the nomic growth will only take place same goblets at the same swaying navels. on a sustainable basis where there is We will no longer be able to a high quality of life; and securing make excuses that, “copper prices Why co me to Trude? I asked myself quality of life is at the heart of what are down”, or “they moved the And I already wanted to leave. “You preservation and is all about. interstate highway interchange” or can resume your flight whenever you “a new harbor opened up down the like,” they said to me, “but you will Quality of life is sometimes coast.” Cities will either innovate arrive at another Trude, absolutely the painted as the “soft” side of eco- and build on the strengths of their same, detail by detail. The world is cov- nomic development whereas infra- place or they will decline. ered by a sole Trude which does not structure, tax rates, and utility costs The most far reaching book begin and does not end. Only the name are the “real” factors. Well last year of the airport changes.” the New York Times reported that about tomorrow's economic devel- institutional investors in municipal opment strategy was released late In economics it is the differenti- bonds are increasingly looking at last year. Marketing Places was writ- ated product that commands a mon- the local quality of life to determine ten by three professors at etary premium. If in the long run if they want to buy the bonds or Northwestern University who call we want to attract capital, to attract not. And it's not because those their strategy “place development”. investment to our cities, we must differentiate them from anywhere else. It is our built environment that we are consistently discovering that preservation creates 5 more jobs expresses, perhaps better than any- we don’t need to be nervous about than manufacturing a million dollars thing else, our diversity, our identi- the outcome. Study after study of electronic equipment, 19 more ty, our individuality, or differentia- shows that far from being a luxury jobs than does fabricating a million tion. which can be dispensed with in dif- dollars of metals, and 18 more jobs Missoula mayor Kemmis rein- ficult fiscal times, far from being a than refining a million dollars of forces this. He says “Any serious hamper on economic growth, far chemicals. Historic preservation move. Any local economic develop- from being cute buildings and means jobs for New Jersey. ment organization goes hand in house museums, historic preserva- Numbers of jobs, however, is but hand with an effort to identify and tion has an enormous positive one way to measure local economic describe the characteristics of that impact on local economies and can impact. Another is the output gen- locality which set it apart and give it be at the core of a long range eco- erated throughout the economy a distinct identity.” The major rea- nomic development strategy. through the activity within a partic- son preservationists struggle to Stop a moment and consider why ular sector. Here again preservation maintain their city's historic state and local governments have stands up well. In New Jersey resources is to maintain the city's economic development programs at $1,000,000 spent rehabilitating an distinct identity. all: to increase the tax base, to historic building ultimately adds But that struggle has economic increase loan demand and deposits over $2.3 million dollars to the consequences as well. A year and a in local financial institutions, to state's economy. This is a larger half ago I completed a book pub- enhance property values, to gener- overall impact than $1,000,000 of lished by the National Trust enti- ate additional sales of goods and hotel rooms rents, a million dollars tled, The Economics of Historic services, and - most importantly - to of retail sales, or $1,000,000 of com- Preservation. In the first paragraph create jobs. What does historic munications output. Historic preser- of one quote Greg Paxton the exec- preservation do for a local economy? vation means benefiting the entire utive director of the Georgia Trust Increases the tax base, increases New Jersey economy. for Historic Preservation. Greg loan demand, enhances property The other most common way of wrote, “The economic benefits of values, generates sales of goods and measuring the economic importance historic preservation are enormous. services, and - most importantly - of an individual sector of the econo- The knowledge of the economic creates jobs. my is to determine how much benefits of preservation is minus- I'm going to offer you some data household incomes increase as a cule.” I began the book with that on the numerical impact of preser- result of production, within the sec- citation because I thought Greg was vation in New Jersey. Because we tor. Here again historic preservation right on both counts. He is still right are using different econometric is among the most potent. on the first point - the economic - models, the numbers will vary $1,000,000 spent rehabilitating an benefits are enormous. But across slightly from those being generated historic building adds $832,000 to the country the understanding of by the Center for Urban Policy household incomes of New Jersey these benefits is growing daily. In Research at Rutgers, but they are residents. This is not only $73,000 the last 18 months economic analy- certainly -consistent. In New Jersey more than the same amount of new ses of historic preservation have $1,000,000 spent rehabilitating an construction but also $190,000 more been either completed or are under- older building creates 29.4 jobs - 13 than $ 1,000,000 worth of restaurant way in Indiana, New York, Phoenix, in the construction industry and 19 sales, $90,000 more than a million in Kentucky, Virginia, New Jersey, elsewhere in the economy. That is, wholesale trade and $420,000 more South Carolina, Maryland, and else by the way, more jobs than the same than $1,000,000 of food processing. where. Why, when in the past there amount spent in new construction. Historic preservation adds to the was such a paucity of research, is so Because of this greater impact on household incomes of New Jersey much emerging now? I think there the local economy, every time a citizens. are three reasons: first, the preserva- decision is being made on a new tion movement continues to broad- school, a new city hall, a new court In state after state when analyses en, and is no longer dominated by house, historic preservation needs to have been conducted one of the those who consider the discussion be considered among the alterna- major benefiting industries benefit- of historic preservation and money tives. Local officials who don't con- ing from preservation was tourism - in the same breath crass and inap- sider the preservation option cannot probably no surprise to anyone in propriate; second, we are currently claim to be doing all they can to this room. Last fall the Preservation in a political environment at all lev- support local economic develop- Alliance of Virginia released a report els of government wherein public ment. on preservation's impact on policy of all types has to be defend- Virginia's economy. Here's what we But it isn't just in comparison to teamed regarding tourism preserva- ed in the vocabulary of economics; new construction that preservation but third and most importantly, as tion visitors stay longer, visit twice is a favorable job creator. In New as many places, and spend two and we learn from the ongoing research Jersey a million dollars of historic a half times as much money as do neighborhoods contained housing time is encouraging, usually subsi- non-preservation visitors. As in termed “affordable' and occupied dizing with scarce taxpayers' dollars, Virginia, historic preservation brings by families of very modest means, the continuing expansion at the tourist dollars into New Jersey's still those property owners benefit- edges. Any competent industrial economy. ed by increased values at a rate developer today understands that Let's talk about neighborhoods greater than people - rich or poor - the top priority is retaining the for a moment. By far the largest per- living in non-historic neighbor- industries you already have, fol- centage of historic properties in hoods. Historic preservation bene- lowed by encouraging the expan- America is made up of houses in fits people of modest means. sion of existing firms, and only then historic neighborhoods. There is But let's look for a moment at the focusing on trying to attract new sometimes a concern that creating other side of the coin - neighbor- companies. Absolutely the same pri- local historic districts to protect hoods where property values are orities ought to apply to neighbor- those neighborhoods will have an falling. A couple of years ago the hoods - first maintain the ones we adverse effect of property values. National Association of Home have, then encourage the reinvest- The one type of evaluation of the Builders analyzed which factors ment in and expansion of existing economic effect of preservation that played the biggest role in changing neighborhoods, only then spending has been most frequently conduct- property values. And you know scarce resources on building new ed is that one , what effect does his- what had the greatest adverse effect subdivisions. toric districting have on property on value? Empty and abandoned Today everyone claims to be for values. There is some variety in the houses in a neighborhood. And fiscal responsibility, and I happen to outcomes - some studies show rates where, in our towns and cities of share that philosophical position. of appreciation in historic districts every size, do those vacant and But the Urban Land Institute - much greater than the market as a abandoned houses exist? In our hardly the foe of development - has whole; some show historic districts older and historic neighborhoods. reported that the life time public are an important catalyst to new This is more than just local govern- costs of servicing dispersed devel- investment in the neighborhood; ments losing tax revenues. For the opment is between 30 and 300 per- some that the existence of an his- vast majority of us our home is our cent more than meeting the needs toric district protects the neighbor- biggest financial asset. When we of more compact development. Any hood from wide volatile swings in allow older neighborhoods to deteri- public official who allows the con- the real estate market. But not one orate we are literally stealing the tinued deterioration of older neigh- study I have read - and I think I've savings of our citizens. And in too borhoods while at the same time read almost every one that's been many communities city government providing the public infrastructure done - not one shows that historic is consciously allowing that felony for suburban sprawl simply cannot districts reduce property values, not to take place. claim to be fiscally responsible. one! In the Virginia study we Meaningful public intervention There is no more flagrant waste of looked at the five historic districts in close in neighborhoods is dis- local taxpayers dollars than this in the small town of Staunton. missed by saying, “they're just a combination of neglected neighbor- In every case the rate of property bunch of old houses that are about hoods and subsidized sprawl. appreciation - among both residen- to fall down anyway” or we allow Anyone who tells you differently is tial and commercial property - was demolition for parking, or intrusions a liar or a fool. greater than the city of Staunton of commercial uses, or fad to What mayor of a community of overall. One of the criticisms that enforce property maintenance ordi- any size doesn't struggle with how preservation sometimes receives is nances, or concentrate public hous- to get middle-class taxpayers to that historic districts may benefit ing there, or cut back on municipal move back to the city? But think for property values in rich neighbor- services, or let the schools fall apart, a minute where there have been hoods but - are only a burden in and guess what happens? Properties pockets of back to the city migra- moderate income neighborhoods. In first go into tax delinquency, then tion - Columbus, St. Paul, Chicago, Staunton, four of the five historic suffer deferred maintenance, mort- Louisville, Boston, New York, Des districts contained residential prop- gage foreclosure, abandonment, Moines, Seattle, Oakland, Kansas erty. vandalism, and finally demolition - City, St. Louis. It has not been back In two of them the average house by neglect, or arson, or misguided to the city in general -in fact many value was greater than the citywide public policy. And importantly the of those cities are still losing popu- average value. In the other two, loss isn't just to the property owner lation overall. In every instance it however, the average value was in and the mortgage holder - the entire has been back to historic neighbor- fact below the typical price through- neighborhood suffers an economic hoods within the city. City govern- out the community. loss. ments that allow their historic And then, in addition to this neighborhoods to disappear through What this means is that even demolition, neglect, commercial though two of the four historic malign neglect of close-in older neighborhoods, the city at the same encroachment or abandonment pre- clude themselves from being bene- the Interior reports that there were in the bakery than his most opti- ficiaries of a future back to the city 529 projects representing invest- mistic projections indicated. That's movement. ment of $467,000,000. What is the economic development. He now But the bulk of my work isn't in cost of that program to the Federal employees 9 people in addition to residential neighborhoods, it is in coffers? Well with a 20 percent tax the three family members who work downtowns and urban commercial credit, the revenue loss to the treas- there. And that's economic develop- districts. I have a hard time separat- ury is a maximum of $93,400,000. ment. Nearly every day Omar gets a ing downtown revitalization and his- But what is the economic benefit? call from someone asking if there's toric preservation. And here's the Income taxes paid by construction space in the building available for reason. I visit about a hundred workers of almost $51 million; rent, and -offering $8 to $12 per downtowns a year. income taxes from other workers of square-foot - this in a neighborhood over $39 million; business income where before Omar opened up the I have never been in one that had taxes of nearly $15 million; capital highest rents were perhaps $4 or $5 a successful record of economic gains taxes of over $19 million; dollars a foot. And that is economic revitalization where historic preser- totaling Federal economic benefits development. Omar and his family vation wasn't a key element of the from this program of $124,250,000 are hard workers - the bakery is strategy. That doesn't mean such a last year significantly more than the open until 8 o' clock five nights a place doesn't exist - successful revenue cost. week and until 9 o'clock on Friday downtown revitalization without Additionally this activity created and Saturday - a seven day a week historic preservation - but I haven't operation. been there, I haven't heard of it, I 14,000 jobs, added $348 million to haven't read of it. And of course local household incomes, and will But Omar doesn't complain about leading that process is the National generate each year local property the long hours and he's a great small Trust's National Main Street Center tax revenues of between $7 and $11 businessman and is very happy and New Jersey's Main Street pro- million dollars. Independent of the about the deposits he's making in gram. I defy anyone to find an social, cultural, and aesthetic bene- the bank every day. But you know approach to economic development fit historic preservation provides, what he's most thrilled about? Over of any kind - downtown revitaliza- the U.S. taxpayers are absolutely Christmas lots of young people tion or other - that makes a more getting more than their money's came back to the neighborhood - as frugal use of public resources with a worth with this program. And I they do in every neighborhood - larger impact on the local economy. thought that's what reinventing gov- kids in their late teens and early In an environment where some ernment was all about. twenties. And they all stopped in at states are paying $150,000, But I'm afraid that sometimes the Mexicantown Bakery. And they $200,000, even $250,000 of public when we are talking about hun- told Omar and Cecilia how proud incentives per job to attract some dreds of millions of dollars and tens they were of their neighborhood new industry, the cost effective, fis- of thousands of jobs we miss the and of the Hernandez' for reinvest- cally responsible economic develop- point. I want to tell you a short story ing there. That small investment ment approach of Main Street pro- on an entirely different scale. For told them someone cared about vides sharp contrast indeed. The the last three years I have been their neighborhood. And that too is cost/ benefit of Main Street is with- privileged to work with the economic development - a point I out parallel. National Trust on a demonstration want to return to in just a moment. But Omar's investment in Detroit is And we are in a time when all program in three urban commercial districts. One of these pilot projects representative of another reality of kinds of public policies are subject today's economic development and to economic cost/benefit analysis. I was an inner city Detroit neighbor- hood. There with some guidance by that is the scale of the enterprises for one think that's a perfectly that are creating nearly all of the net appropriate measurement by which a great local development corpora- tion, a little technical assistance, new jobs in this country. Jobs are public issues be considered. As being created by firms employing most of you know the Historic and a loan guarantee from the National Trust, Omar Hernandez less than 20 people. Not IBM, AU, Rehabilitation Tax Credit -although GM or the rest of the Fortune 500 only a shadow of what it was a bought an 1890 three story commer- cial building that was once the Odd alphabet. Every day we hear of the decade ago - has been a major com- tens of thousands being laid off by ponent of not only historic preserva- Fellows Hall. This was hardly a giant project - maybe Omar spent a those firms. Now what does all of tion, but downtown revitalization, this have to do with historic preser- neighborhood stabilization, afford- total of $120,000 acquiring and reha- bilitating the building. But for five vation? I call it the myth of the able housing, and economic devel- 20,000 square foot floor plate. You opment throughout the country. months now Omar's Mexicantown Bakery has been open for business. know that office tower developer But maybe it's time we looked at Omar today has customers from all and his leasing agent with their the cost/benefit of the tax credit. In over the metropolitan Detroit area leased Mercedes, rented Armani's Fiscal Year 1995 the Department of and he is making way more money and cubic zirconium pinkie rings? Weekly they are at city hall saying, inventory of older structures if for But underlying any sustainable “We have to raze these old build- no other reason than that the source quality of life has to be a sense of ings because the tenant today needs of economic growth in this country - community, a sense of belonging, a a 20,000 square foot floor plate, small businesses - need a place they sense of ownership, a sense of evo- older buildings can't accommodate can afford. lution. That's why few of us would them, if we're going to grow it has Well, I think there are probably a choose for our permanent home to be with big buildings.” Some dozen more ways that historic Club Med or Disneyland. Fine would call that an out and out lie - I preservation contributes to the places to visit, of course, but no would rather think of it as factually economy. But I want to conclude by sense of ownership or evolution, or challenged. Of the 20 fastest grow- returning to some observations of belonging - in short no sense of ing industries in the country, do you what's going to be important in eco- community. know the average firm size? Eleven nomic development in the coming For those industrial development people. Now how much space do years. By early in the next century, types still wearing their Nehru jack- those people need. the workforce is going to be divided ets and thinking the only route to Well it will vary a little but 200 to roughly in thirds. A third of us will economic growth is recruiting one 250 square feet per person would be be able to live absolutely anywhere more manufacturer these quality of typical - or around 2500 square feet. we choose. This group will include life, sense of community factors will What is the size of the typical older consultants like me, but also the be dismissed as imaginings of some building on your Main Street? 25 by actuary for the insurance company, aesthetic elite. They are very 100 or 2500 square feet. And regard- the stock broker, the software engi- wrong. Companies who are attracted less of floor configuration, virtually neer, the import-export dealer, and to communities because they were all older office buildings can provide hundreds of other job categories. given a free lot in the industrial readily useable space ranging from These people will be able to live park, or to save 20 mills on their 500 to 5000 square feet. We ought anywhere there is a telephone and property taxes,- or because -they to be thinking about our historic electricity. Another third of us will can hire workers at 50 cents an hour commercial buildings - particularly have to live someplace, but that cheaper will pick up and leave in our downtowns of every size - as someplace can be anyplace. The when the town down the road, or our industrial parks for growth police officer, the clergy, the dentist, the country across the Caribbean industries. the school teacher, the garbage col- cuts taxes another nickel or gives You know as preservationists we lector. While these jobs will have to them both the land and the build- often celebrate the Secretary of the be attached to a location, since ing, or has even cheaper workers. Interior certified high quality every location needs them, the Sustainable economic growth will restorations of landmark buildings - choice of which location in which to come from companies who choose and that pride is certainly warrant- work will be nearly limitless. your community because of the ed. But there is another aspect of Therefore two-thirds of the quality of life it provides. But quali- preservation that too often we over- entire workforce will be locationally ty of life is fragile - those things that look. Older commercial buildings - independent - can choose virtually make up a given community's quali- even if they haven't been rehabili- anyplace in which to live. No longer ty of life need to be identified, tated - serve a crucial role in meet- will most of us need to care where enhanced, and protected. And that's ing the challenges of today's eco- the port is, or the factory, or the where historic preservation comes nomic development. A start up mine. We will live not where our in. Historic buildings are an impor- business has very few costs that it job mandates, but where we choose. tant element in most communities can control -utility costs, taxes, And that choice will be made not on “quality of life” criteria because it is wholesale purchases, equipment, how cheap the utility rates, how those “buildings” that provide a insurance premiums - these are all close to major markets, or how near sense of belonging, a sense of own- costs that are largely fixed. One of the Interstate. It comes back to ership, a sense of evolution - that the few budget items over which what we talked about earlier , quali- sense of community that sustainable decisions can be made is occupancy ty of life. We will each have a differ- economic growth requires. costs - rent. Older commercial prop- ent set of variables that constitute That is also why the biggest erties provide the locational afford- our own quality of life criteria. I live threat to tomorrow's sustainable ability critical for the survival of in the middle of Washington, DC, economic growth is not high taxes, small and start-up businesses. although, in fact, I could live any- lack of capital, or shortage of entre- These older structures serve as where. And it is because preneurial capacity. Rather the incubators in which new businesses Washington provides a very high biggest threat is the so called “prop- can grow. The real estate fact of life quality of life for the things impor- erty rights” movement. In forum is this barring massive pubic subsi- tant to me. I understand that many after forum, point by point, we can- dies, cheap space cannot be provid- of you wouldn't want to live there - not allow their hogwash to go unan- ed in new buildings - it can't be your set of criteria are different than swered. done. We need to maintain a sizable mine, and that is as it should be. Think about it. If quality of life is the significant variable for economic nomic development book, Marketing er it is, the move we make in the development, and if the physical Places. The authors write, “Current place we live has to signify our environment is a major element of approaches emphasize ways to res- intent and meaning.” the quality of life criteria, then urrect the older character and histo- And finally back nearly 150 years. there is no greater threat to sustain- ry of places. John Ruskin was referring to build- able economic growth than the Such thinking also requires ings but I think what he said elimination of those community vision, blending old with new, and applies to our entire communities as based enactments whose sole pur- an appreciation that place character well. He wrote, “When we build let pose is the protection of that physi- is a valuable asset in retaining firms us think that we build forever. Let cal environment whether it is built and people as well as in attracting it not be for present delight, nor for or natural. In the name of real estate new investment and businesses present use alone; let it be such rights these myopic fast buck artists places lose much when they neglect work as our descendants will thank are the one's dooming the economic or destroy their historical landmarks. us for, and let us think, as we lay future of our communities - not the City officials, erroneously thinking stone on stone, that a time is to preservationists, environmentalists, that the cost of maintaining these come when those stones will be urban design advocates and their places exceeds their value, may held sacred because our hands have allies. Yet the property rights advo- bulldoze mansions and historical touched them, and that men will cates are getting away with claiming structures to make room for faceless say as they took upon the labor and the opposite. I'm all for property new buildings.” wrought substance of them, See! rights, but where is the discussion Then the widely admired This our fathers did for us.” What of property responsibilities? That's you are doing for historic preserva- where we need to move the focus. American author Eudora Welty. In her collection of essays entitled The tion in New Jersey today, your I want to conclude with three Eye of the Stor y she writes, “it is our descendants will thank you for. quotations which, I think, effective- describable outside that defines us, And I thank you for allowing me ly convey the impact on the econo- willy-nilly, to others, that may save to be here with you today. Thank my of historic preservation, the us, or destroy us, in the world; it you very much. importance of sense of place, and may be our shield against chaos, our the significance of the spirit of com- mask against exposure; but whatev- munity. First I'll return to the eco-