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The new coastal colonialists

Maybe I’m the only one who finds the irony in the naming of a new upscale residential development near Bandon, Oregon, “The Colony.” Came across an ad for the development in this morning’s local paper. If you’re an Oregonian or a golfer, you’ve probably heard of the world-renown golf courses in the vicinity of Bandon. That’s the impetus behind a surge in construction of expensive homes in the area in recent years.

The developers describe The Colony as “Oregon’s premier residential coastal community.” Far from a community, what it looks like to me from the Web site is just another batch of condominiums, in this case perched along one of the most beautiful stretches of coastline anywhere. We’re talking 18 residences with an asking price of at least $1 million and upwards to $2.5 million or more. If most of these get sold as second homes, and I’m sure they will be, this won’t exactly be a bustling “community” since most of the homes will be vacant much of the year.

Over the last decade or more, we’ve seen Oregon’s coastal property fill in with expensive vacation homes. I admit I have thought often over the years about how nice it would be to own a second home at the coast. I love spending time there. But my views changed last fall when I was driving along the Florida Panhandle coastal highway. It was there I learned about the St. Joe Company, Florida’s largest private landowner; it boasts that it owns 800,000 acres including “five miles of beach, hundreds of miles of waterfront and hundreds of thousands of acres within ten miles of the Florida coast.”

Ten years ago the company began transforming itself from a tree grower and paper producer into a real estate developer as a way of profiting more from its land holdings. It has since been on a roll in developing upscale residential subdivisions and resorts, perhaps single handedly dispensing with the Panhandle’s reputation as “The Forgotten Coast.”

As I skirted by many of St. Joe’s manufactured neighborhoods, I decided to stop at a realtor’s office. The nice lady I spoke with was understandably energetic about all the real estate activity, driven in large part, she said, by wealthy folks in cities such as Atlanta and Birmingham buying up vacation properties built by St. Joe and other developers. But it was her off-handed remark about how so many of the “locals” were moving because they could no longer afford to live in the area or didn’t like what it was becoming that caught my attention. You won’t hear St. Joe talking about the impact of rising property values on the less affluent or the virtual overnight disruption to community among those who have long lived in those parts.

And therein lies, for me, the great irony of a beachfront development being dubbed The Colony. At least along the Panhandle, it very much feels like a land that’s being colonized. In this case by a large corporation. The nature of a colonizer is to dominate an economy or culture and extract wealth at the expense of or without regard to the existing inhabitants. The losers in the development game of the rich and richer are those who are priced out of their communities or watch as a way of life is pulled out from under them in the name of economic growth.

The Oregon coastline is increasingly the playground of the affluent. What I wonder is whether the locals who have lived in the region through thick and thin (mostly thin) are benefiting from any largesse of their johnny-come-lately neighbors. Or are they simply moving aside and giving up in the face of those who want a Colony they can call their own? Let me know what you think.

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Wednesday, August 1st, 2007
Posted in Business & Economics, Oregon | No Comments »

Going local: the real competition for Whole Foods

Several newspapers today are picking up a story about growing competition in some markets between Whole Foods and Trader Joe’s. I wouldn’t be surprised if Whole Foods’ PR people had a hand in getting the story placed because it lends credence to Whole Foods’ argument that its proposed purchase of Wild Oats will not eliminate competition, and therefore the FTC should not block the merger.

The better argument for this may very well be the success of New Seasons Market here in Portland. New Seasons is winning customers’ allegiance all over the Portland metropolitan area, even with the presence of Whole Foods and Trader Joe’s. Unlike in many major metropolitan areas, Whole Foods has not been able to dominate the market for its preferred “college-educated” demographic in Portland. If anyone is doing the dominating today, it’s New Seasons, along with Zupan’s Markets, another home-grown grocer.

I spent yesterday (Sunday) working at a food booth outside two New Seasons Market stores. All the proceeds from the barbecue sales went to a non-profit organization I am involved with to promote vibrant local economies based on independent locally owned businesses. New Seasons Market is a member of the organization and a poster child for what these businesses mean to a community. The Market is deeply committed to the Portland area and to the success of family farms in Oregon.

At least when it comes to food shopping, Portlanders appear to get the importance of buying from independent locally owned stores. If this awareness spreads to other cities around the country, Whole Foods may discover that its greatest threats are not the other national or international grocery chains. It’s all of us who are saying yes to the relocalization of our food producers and retailers.

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Monday, July 30th, 2007
Posted in Business & Economics, Oregon, Sustainability | No Comments »

Local currencies for local economies

One of the ideas that keeps getting bounced around among advocates for promoting sustainable economies based on independent locally owned businesses is creating a local currency. Even BusinessWeek is getting into the act this week with a look at the Berkshares program, a creation of the E.F. Schumacher Society. The Society’s executive director tells BW, “One of the important roles that a community currency plays is as an educational tool that reminds people about their local businesses, local economy, and develops a sense of pride in the region and those businesses.”

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Friday, July 27th, 2007
Posted in Business & Economics, Sustainability | No Comments »

When will the tragedy end?

Here in Portland, many miles from the city of New Orleans, 100 or more evacuees from hurricanes Katrina and Rita have lost a vital piece of public assistance. Catholic Charities says it has exhausted all of its $350,000 in hurricane relief funds, ending what has been described as “Portland’s longest-running large-scale program” to help evacuees resettle in our community.

This is yet another reminder, if indeed you need one, that a great American tragedy is still unfolding, with no apparent end in sight. The two-year anniversary of Hurricane Katrina is almost upon us. Soon media will descend upon New Orleans to report on the progress, or lack thereof. Some reporters will go looking for hopeful signs of recovery and find them. Others will bear witness to the thousands of still-empty and forlorn homes and commercial centers that cover wide swaths of the city. And they will ask incredulously why so little has changed two years removed from what the locals call The Storm.

Like thousands who have volunteered to help in New Orleans, I got up close and personal early this year with the physical and emotional devastation caused by the flooding. I was part of a volunteer crew that gutted homes for a week under the coordination of Medical Teams International. I interviewed homeowners and others while I was there. Our team coordinator Alex, a 37-year-old life-long resident of New Orleans, lost three friends to suicide in the course of three weeks in November and December 2006.

“Two were specifically related to the situation with their home and not to be able to get any headway, and basically living in cars. One of the guys actually hung himself at his house. The other guy shot himself. The third guy crashed his car.” A fourth friend killed himself with alcohol and pills just a couple weeks before we arrived. Same age as Alex, this guy had given him his first job in banking. Alex evolved that position into a lucrative financial career. Then the storm changed everything for everyone.

I have seen or read nothing that makes me believe the situation is vastly improved from what we saw back in January. My ears still ring with the words of Lee Eagan, an affluent local business owner whose family roots extend back hundreds of years in New Orleans. His home was spared by the flood, but hardly his emotions.

“I stand on my front porch. Two blocks from my house the water stopped. If I looked north from my house eight miles to the lake, everything flooded. If I look to the east, out this way, 23 miles, everything flooded. Now you do the math and you figure out how much geography, how many houses, how many people, how many photographs, how many wedding dresses were lost. And then you add it all up and you come up with one word: depression.”

It makes me wonder how those evacuees who had depended upon the generosity of Catholic Charities in Portland are feeling today.

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Staying away in droves

So the crowds were thinner than expected at today’s opening of IKEA in Portland, according to KGW TV. Good. Maybe most Portlanders are too smart to be fooled by the hype. Or maybe they just listened to all the broadcasters telling them how to avoid traffic jams around the store and decided instead to stay away.

I just saw the TV report and don’t have a link directly to it, but I did capture one quote from a local IKEA spokesperson who downplayed the impact the store’s opening would have on other (local) retailers. “Lots of people will be out buying home furnishings more regularly now than they would otherwise,” the gentleman said. And I suppose more electronic gadgets when a Best Buy opens, or more books when a Barnes & Noble opens or more everything when a Wal-Mart opens. As if dollars magically appear in our wallets anytime big-box retailers come to town.

There’s only so much disposable income to go around in any community. A retailer doesn’t add disposable income, except when the money it generates stays in the community and multiplies among other local merchants, producers or suppliers it does business with. That’s what makes independent locally owned businesses part of the fabric of a community and what makes IKEA and others like them part of the fraying edge.

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Wednesday, July 25th, 2007
Posted in Business & Economics, Oregon | No Comments »

Someone’s idea of economic development

The Oregonian continues to cover the opening this week of the IKEA store near the Portland airport. Sunday’s article looked at what we might see happen here based on what has occurred in the year since IKEA opened in West Sacramento. Here are a few revealing excerpts:

• Ikea not only has delivered a tidy sales tax boost to West Sacramento…it also has attracted several big-name retailers that have provided further construction and retail jobs. In addition, the store has drawn shoppers from as far as Redding, Calif., and Reno — overnighters staying in local hotels and dining at restaurants serving dishes other than the store’s gravy-soaked meatballs.

• Within the first year, West Sacramento received $1 million in sales-tax revenue from the store, amounting to 7 percent of the city’s overall sales-tax proceeds, said Kay Fenrich, chief executive of the West Sacramento Chamber of Commerce. The figure does not take into account revenue from stores that have since flocked to be near Ikea. “Before Ikea, we had no retail,” Fenrich said. “You had to cross the bridge for furniture, sheets, a dress, anything. Once Ikea made their announcement about opening here, the other big-boxes couldn’t scramble here fast enough.”

• Ikea cites Target and Wal-Mart as competitors, but retail experts say independent discount furniture stores could at least briefly say goodbye to as much as 25 percent of the customer traffic, said George Whalin, a San Diego retail consultant who grew up in Sacramento and followed Ikea’s opening there. “Ikea impacts everybody who serves consumers who want inexpensive furniture,” Whalin said. “There’s not anybody that’s immune.”

• “They’re killing us,” said Haide Critcher, who, with her husband, opened Big Al’s Furniture in the 1960s. The large warehouse store in Sacramento, like Ikea, offers affordable furniture that sometimes comes boxed for customers to assemble.

• “Ikea put West Sacramento on the map,” said Diane Richards, West Sacramento’s economic development coordinator. “Everyone thinks you’re so much more fun and exciting.”

These observations and quotes are revealing in many ways. First, they underscore why municipalities, especially in states with sales taxes, like big boxes — they generate more sales tax receipts. From the first big box, then from the subsequent big boxes that follow magnets like IKEA. But the question is at whose expense? If people are traveling from Reno and Redding, they are not spending their money in those communities and those cities lose tax revenue as a result. Oregon does not have a sales tax, but IKEA will surely pull in shoppers from the region’s smaller communities whose business base will suffer as a result.

Second, what happens to West Sacramento tax receipts when Reno and Redding (or some other nearby city) gains an IKEA or some similar trendy big box to stay competitive in the retail arms race, as they most certainly will?

Third, even though national big box retailers tend to see other national big boxes as their competitors, it’s the independent locally owned stores that take the brunt of the competitive hit, such as Big Al’s in nearby Sacramento. Cities across Americas now share a soul-killing homogeneity as their retail landscapes are littered with the same chains. Meanwhile, the big boxes fight it out over who can extract a larger share of local incomes (and ship it off to who knows where).

Fourth, what does it say about our society when the arrival of a retailer is seen as putting a community “on the map” and making it “much more fun and exciting”? Public officials in towns across America still equate suburban strip-mall retail development with economic development and, in the case of West Sacramento, raising a town’s self-esteem. I can only shake my head.

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