Economic Nihilism in Downtown

There’s a battle brewing in downtown Provo, and the losers will probably be everyone in the city.

According to Genelle Pugmire, downtown business owners are in revolt over a proposed tax to pay for Downtown Provo Inc.  In a nutshell, Downtown Provo Inc. is a nonprofit organization charged with building up the center of the city. They do events, outreach, publicity and business development. And they’re funded, in part, with tax dollars.

Those taxes are raised from downtown businesses that pay based on their locations. But the business owners don’t like it.

Some business owners in downtown are resisting efforts to raise economic development funding with tax dollars.

It’s easy to understand and empathize with the business owners’ complaints. They feel like Downtown Provo Inc. hasn’t done much, or anything, for them. They feel like it’s unfair that businesses closest to downtown have to pay more. And they feel like they just can’t afford more taxes. Those are all excellent arguments that need to be addressed.

Unfortunately, the unhappy business owners are taking fairly drastic measures and want any contribution to Downtown Provo Inc. to be voluntary:

“Economic development activities can hurt some businesses when it helps others,” the committee wrote in a letter to downtown businesses. “A new clothing store, book store, craft store, etc., can hurt or even drive an existing one out of business. There is no sure way to do no harm. Government should not be in the business of hurting one business to help another or to bring in new business.”

I have to admit that I was shocked when I read that statement. Obviously economic development produces winners and losers. Clearly.

But the opposite of development is what? Decline? Stagnation? That only produces losers, and the problems in downtown are a physical reminder of that fact. Ultimately, if downtown Provo was an exceptionally vibrant place and every business a success, some amount of stasis might even be acceptable. Sadly, however, that isn’t the case.

Again, to be clear, the businesses have legitimate complaints, and a few alternatives are explored in the article. If I was running Downtown Provo Inc. I might even do things differently. And there’s an important debate to be had about public investment in economic development.

But an all-or-nothing approach means de-funding development. And that seems to be the business owners’ desired outcome:

“Right now I’m not willing to pay for anything. I don’t see a need to,” Woodger said. “I don’t think we should be sponsoring things on our own dime when there is duplication.”

If no one is willing to pay for anything the city is left with economic nihilism and a lack of community. And as Mayor Curtis pointed out in the article, the environment of downtown is radically different from the one that existed when business owners first organized:

The downtown area itself has changed significantly since the early 1980s when business owners joined to create the Association of Involved Merchants and, Curtis pointed out, it is unlikely to ever return to the days of school shopping, sidewalk sales and cheap advertising.

Downtown Provo Inc. executive director Jared Morgan also pointed out that the area is continuing to change, and for the better:

Morgan added, “There’s buzz and nightlife and energy that is palpable in downtown now. Over 50,000 people have come to downtown in the past 10 months with events.”

More people won’t immediately benefit all businesses, but decline, stagnation and blight hurt everyone. It’s also worth considering that if tens of thousands of new visitors are coming to an area, it’s the businesses’ responsibility — and economic imperative — to market to them. In other words, if things aren’t improving the businesses share at least as much blame as Downtown Provo Inc.

In the end, there has to be a solution here that doesn’t include abandoning economic development. There must be compromise. That may not be the current form of taxation, but ultimately without investment downtown progress will stall.

Businesses feel that current forms of investment aren’t benefiting them. But officials from Downtown Provo Inc. point to very real gains in downtown as evidence that their efforts are working.



Filed under Development, Downtown, economics

3 responses to “Economic Nihilism in Downtown

  1. Mark Brown

    From your perspective, what should Downtown Provo Inc. be doing differently, or what else should they be doing in order to help revive the downtown?

    • My short answer: increasing density and adding jobs. If it was me, I’d put nearly every penny toward that.

      Here’s my longer answer:

      I think that Provo’s greatest weakness is a lack of people downtown. That hurts general vitality, local businesses, etc. Downtown Inc. is trying to solve that problem by bringing the existing community members into the area. My understanding is that that effort is a major part of the organization’s agenda. But I think it may have limited results. If the existing community members had a demand for downtown, they’d already be there. My conclusion, then, is that there isn’t currently as much demand as we’d like. Really great marketing and events can create some demand, but at substantial ongoing cost; Downtown Inc. will constantly have to market to people, telling them essentially that they need something they don’t already think they need/want. I think this is especially true with students. They have so much turn over that it’ll require a constant, intense marketing campaign to bring them downtown. So, I’m saying that increasing demand without increasing the actual population is tough.

      Instead, I think everyone would benefit if we build more (and denser) housing downtown, and created more jobs. As far as job creation, I’d say we should more actively recruit companies for downtown. I assume some either in Downtown Inc. or the city has this job right now. But I’ve never actually heard how that process is going, or if the position even exists. That’s appalling for a city that is ranked #1 for business. We should have armies of people out recruiting. We could also use some of these grants — for things like painting or whatever — to spur startups. Painting a business doesn’t directly generate revenue (though of course the argument is that it generates it indirectly). Offering startup grants, however, could turn Provo in a powerful business hub.

      In other words, my feeling is that if the problem is a lack of people, the answer is adding more people. Give people real, economic benefits to go downtown and they will. Make it prettier and they… might.

      I realize that these are medium and longer term strategies that require up front investment and only longer term pay off. And I can see why Downtown Inc. isn’t emphasizing them; I can see some shop owners struggling to see the benefits and not wanting to pay to have someone advocate for denser housing, to fund startups, or fly out of state on recruiting missions. Still, I think it would benefit shop owners and everyone else as well.

      So, events, marketing and sprucing up (things I’ve see already) are great, but I just don’t see how they actually tackle the root of the problem.

  2. Pingback: Don’t Favor Incumbent Businesses | (pro(vo)cation)

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