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No Trespassing Property of City of St. Louis

Last month I went down street after street, passing vacant lots where homes once stood, all owned by the City of St. Louis. It was depressing to think a once lively neighborhood has been erased, except for roads & sidewalks.  You’re probably thinking I was somewhere in north St. Louis, but I was actually in St. Louis County. At one point I even crossed over I-270! Yes, because of the Lambert runway expansion the City of St. Louis owns hundreds of acres in the City of Bridgeton: the former Carrollton subdivision.

A gate blocks access to Celburne Ln from Woodford Way Dr on the west side of I-270. Click image for map.
A gate blocks access to Celburne Ln from Woodford Way Dr on the west side of I-270.
Click image for map.
Some homes were razed for the runway itself, most were cleared for noise mitigation.
Some homes were razed for the runway itself, most were cleared for noise mitigation.
The fence at the end of the rarely used billion dollar runway
The fence and a former Dupage Dr at the end of the rarely used billion dollar runway
St. Louis County parcel map over aerial of newest runway
St. Louis County parcel map over aerial of newest runway

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Woodford Way Drive crossing over I-270
Woodford Way Drive crossing over I-270 connects the east & west sections of the former Carrollton subdivision
Carrollton sidewalk
Vacant street & sidewalk on the east side of I-270, Grundy Dr looking north from Woodford Way

St. Louis is responsible for maintaing the properties, cutting acres of grass basically. Not only does St. Louis have too much property in St. Louis, they also have too much in Bridgeton!

The land can’t be used for residential purposes, but office/retail/industrial is apparently fine. The problem is St. Louis must repay the FAA if it sells the property, making it very costly to develop based on the amount the FAA paid.

And that runway? From a 2007 MIT-student analysis:

The need for runway 11-29 was actually delay-driven, not demand-driven. Although the levels of demand from the forecast never materialized, the new runway did provide the capability to perform dual independent IFR approaches at Lambert. Again, although the delay cost savings are less than initially projected, there are nonetheless savings that can be directly attributed to the new runway. Thus despite the over-optimistic demand forecast, the construction new runway does seem to have been justified.

With regard to flexible planning, the Lambert officials were indeed responsive to the lower actual passenger traffic than was originally projected. The terminal expansion plans were abandoned after the traffic collapse. Although it is still possible to implement the terminal expansion plans in the future, it would have been wasteful to do so once demand levels dropped. Thus, the part of the Lambert expansion project that was demand-driven was indeed responsive to the drop in demand.

The new runway was probably cheaper to build when it was than it would have been in the future. It is likely that property acquisition costs as well as construction costs would have increased, and so delaying the runway construction would probably have cost more than proceeding as scheduled. Once traffic returns to St. Louis, runway 11-29 will be an invaluable asset. In fact, it may even provide the competitive advantage needed to draw traffic to Lambert. Thus, it seems that despite the strong-armed actions and swift construction in the face of the dramatic downturn in passenger traffic, the new runway at Lambert- St. Louis International Airport was in fact beneficial.

The runway is built and not going anywhere. Now we just need to figure out what to do to remove hundreds of acres from St. Louis ownership, so that it can again produce tax revenue for St. Louis County & the City of Bridgeton.

— Steve Patterson

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Poll: Have you, a family member, or friends, experienced at least a month of “Food Insecurity” in the last 5 years?

Food security/insecurity may be terms you’re not familiar with, this may help:

Food security refers to the availability of food and one’s access to it. A household is considered food-secure when its occupants do not live in hunger or fear of starvation. The USDA estimates that nearly 9 out of 10 U.S households were food secure throughout 2005. It is a measure of resilience to future disruption or unavailability of critical food supply due to various risk factors including droughts, shipping disruptions, fuel shortages, economic instability, wars, etc. Food security assessment is divided into the self-sufficiency rate (S) and external dependency rate (1-S) as this divides the largest set of risk factors. Although countries may desire a high self-sufficiency rate to avoid transport risks, this may be difficult to achieve especially for wealthy countries, generally due to higher regional production costs. Conversely, high self-sufficiency without economic means leaves countries vulnerable to production risks.

The World Health Organization defines three facets of food security: food availability, food access, and food use. Food availability is having available sufficient quantities of food on a consistent basis. Food access is having sufficient resources, both economic and physical, to obtain appropriate foods for a nutritious diet. Food use is the appropriate use based on knowledge of basic nutrition and care, as well as adequate water and sanitation. The FAO adds a fourth facet: the stability of the first three dimensions of food security over time. (Wikipedia)

Congress is currently debating cuts to the nation’s food stamp program — properly known as the Supplemental Nutrition Assistance Program (SNAP):

SNAP offers nutrition assistance to millions of eligible, low-income individuals and families and provides economic benefits to communities. SNAP is the largest program in the domestic hunger safety net. The Food and Nutrition Service works with State agencies, nutrition educators, and neighborhood and faith-based organizations to ensure that those eligible for nutrition assistance can make informed decisions about applying for the program and can access benefits. FNS also works with State partners and the retail community to improve program administration and ensure program integrity.

The poll this week asks if you, your family, or your friends, have had at least a month of food insecurity in the last 5 years. I’ll share my personal views on the topic, and share my own food insecurity experience, with the poll results on Wednesday, October 9th. The poll is in the right sidebar.

— Steve Patterson

 

Labor Needs To Be Paid A Living Wage

September 2, 2013 Economy, Featured 27 Comments

My first job was assisting my father, a carpenter, on construction sites in the summer, starting around age 8 (1975). One summer I decided to assist a rock layer to earn more money but that was grueling labor. My first job, other than for my father or other trades, was working for the local Arby’s fast food chain at age 16 (1983). I lasted 4 days before I knew I wasn’t cut out for fast food work. I worked for my next employer, Toys “R” Us, for 5 years. When I left Toys “R” Us in 1988 the minimum wage in Oklahoma was $3.35/hour (source), but I was making $5.90/hour as a part-time head cashier. Many of my co-workers were also in school (high school or college) or had other full-time work, but for some it was their only job. They were young and not supporting a family though. Today face of the minimum wage worker is radically different from when I started at mimim wage 30 years ago. They’re older, more educated:

Government statistics and studies suggest that the common picture of the fast food worker is inaccurate. Not only are relatively few of them teenagers looking for some pocket money while attending school, but the number of adults working in low-paying part-time jobs against their wishes is rapidly growing. [snip] Meanwhile, these jobs are no longer introductions to the world of work. The age of the average worker is 28, with 70 percent 20 years old or older, according to statistics compiled by AOL Jobs. One out of four has at least one child. A third has at least some college education. And, according to the National Employment Law Project, there is “limited occupational mobility,” so the positions don’t lead to higher paying positions let alone opportunities to own franchises. (CBS News)

These adult workers “Can’t survive on $7.35.” They’re employed, working full time, yet not surviving.

Picket in front of Wendy's in Rock Hill on August 26th
Picket in front of Wendy’s in Rock Hill on August 26th

You may dismiss their situation, thinking they should’ve gotten more education to land a better paying job. Again, these workers aren’t high school dropouts, nationally a third have some college education. Suppose they all found better jobs, most fast food establishments & retail stores would have to close because they’d have no employees. Even now far suburban places must pay more to lure workers to commute to the newly created jobs. The closer jobs often being created by developers seeking tax-increment financing (TIF) likely pay just minimum wage with no benefits. The other thing you might be thinking these people have made poor decisions in life, so they must deal with the consequences.

However, life is never that simple:

In a series of experiments run by researchers at Princeton, Harvard, and the University of Warwick, low-income people who were primed to think about financial problems performed poorly on a series of cognition tests, saddled with a mental load that was the equivalent of losing an entire night’s sleep. Put another way, the condition of poverty imposed a mental burden akin to losing 13 IQ points, or comparable to the cognitive difference that’s been observed between chronic alcoholics and normal adults. The finding further undercuts the theory that poor people, through inherent weakness, are responsible for their own poverty – or that they ought to be able to lift themselves out of it with enough effort. This research suggests that the reality of poverty actually makes it harder to execute fundamental life skills. Being poor means, as the authors write, “coping with not just a shortfall of money, but also with a concurrent shortfall of cognitive resources.” (How Poverty Taxes the Brain)

Poverty adds a burden that makes it difficult to make good decisions to escape poverty. Additionally,

Fast food is a billion dollar per year industry in St. Louis, and we believe that no one who works for a living in such a profitable business should be forced to rely on public assistance to provide for their family. One-quarter of St. Louis’s workforce works in the service economy, and in fast food the average annual salary is less than $19,000. When workers are paid a living wage, not only will it strengthen the economy but it will also reduce crime in our neighborhoods. (source)

Living wage?

The living wage shown is the hourly rate that an individual must earn to support their family, if they are the sole provider and are working full-time (2080 hours per year). The state minimum wage is the same for all individuals, regardless of how many dependents they may have. The poverty rate is typically quoted as gross annual income. We have converted it to an hourly wage for the sake of comparison. Wages that are less than the living wage are shown in red.

Living wage for St. Louis County. Source: MIT, click image to view
Living wage for St. Louis County. Source: MIT, click image to view website & more information

The minimum wage isn’t enough for an adult to support themselves. With such a huge part of our region, largely in the city, making minimum wage it is easy to see the region will not be able to prosper. Sure, there are business owners getting very wealthy off the backs of many.

A few benefit while the region is held back.

— Steve Patterson

 

Lots of Entrepreneurship Happening in St. Louis’ Railway Exchange Building

Historically cities have  been incubators for entrepreneurs, bringing people together to exchange their goods. Many well-known early St. Louisans became wealthy selling goods/services to the growing city and country. Then population shifted to the suburbs, manufacturing jobs went oversees, and big corporations took the place of mom & pop businesses, online ordering with overnight delivery made going to stores quaint, etc.

May Department Stores, founded in 1877, moved to St. Louis from Denver in 1905, operated out of the upper floors of the Railway Exchange Building — over Famous-Barr. When May was acquired by Cincinnati-based Federated Department Stores in 2005, the Famous-Barr became a Macy’s and the number of employees in the upstairs offices shrank considerably. The Railway Exchange Building was sold to a developer, Macy’s consolidated to 3 floors from 7 or 8, but it is closing next month. Knowing all this you might think nothing is happening in the Railway Exchange — but you’d be very wrong!

The Railway Exchange Building, where Macy's is now on the lower 3 levels, has some very exciting things happening now, tomorrow I'll share what's going on in the former May Company offices.
The Railway Exchange Building, where Macy’s is now on the lower 3 levels, has some very exciting things happening now, tomorrow I’ll share what’s going on in the former May Company offices.

The 12th & 13th floors are the T-REx business incubator.

T-REx is a coworking space and technology incubator located in the heart of downtown St. Louis, Missouri. We’ve taken 60,000 sq/ft in the historic Railway Exchange Building and converted it into a hub for the St. Louis startup scene — now home to a growing community of entrepreneurs, developers, designers, mentors, educators and more.

T-REx now has 70+ business, with more coming.

The 12th floor lobby of T-REx
The 12th floor lobby of T-REx
Many businesses make their line of work visible to others.
Many businesses make their line of work visible to others, many are into fashion.
Paramount Apparel Manufacturing was founded in St. Louis in 1929 but moved to Bourbon MO in 1936. Today designers work at T-REx while manufacturing is in Bourbon & oversees. Click image for their website.
Paramount Apparel Manufacturing was founded in St. Louis in 1929 but moved to Bourbon MO in 1936. Today designers work at T-REx while manufacturing is in Bourbon & oversees. Click image for their website.
One entire section of the 13th floor is reserved for Arch Grant winners. The open center will serve to facilitate collaborations.
One entire section of the 13th floor is reserved for Arch Grant winners. The open center will serve to facilitate collaborations.

Arch Grants seeks to create a more robust startup culture and infrastructure in St. Louis. To increase employment growth and establish St. Louis as a place where entrepreneurs want to start and grow their businesses, Arch Grants offers startups funding in the form of grants and supports the startups as they remain or transition to downtown St. Louis. The Arch Grants Business Plan Competition helps to shape the image of St. Louis among aspiring entrepreneurs and others looking to have a formative role in building a new entrepreneurial climate in St. Louis.

Through the Business Plan Competition, Arch Grants selects promising startups to receive $50,000. Typically, taking venture capital forces an aspiring entrepreneur to sacrifice a significant stake in their company in exchange for funds. This process is often limited to ventures with access to the startup hotbeds like Silicon Valley, New York, and Boston. Arch Grants provides entrepreneurs with the opportunity to start a business with non-dilutive capital. In addition, Arch Grants supports the growth of winning companies by providing access to business networking and mentoring, free legal and accounting services, collaboration with local universities, and discounts on housing and affordable office space. After receiving an initial Arch Grant, startups have the opportunity to secure a second round of up to $100,000 in funding along with direct access to St. Louis-based angel investors.

To provide winners with the best chance of success, Arch Grants partners with comparable economic development endeavors in St. Louis that currently support business growth in the city including Innovation Venture Mentoring Service, St. Louis Regional Chamber and Growth Association, Regional Business Council, Washington University, St. Louis University, University of Missouri at St. Louis, Webster University, and Harris Stowe University. (Arch Grants)

I met a couple of recent Arch Grant winners during my visit to T-REx last week; Andrew Couch and Gilda Campos moved their startup from San Diego to St. Louis after receiving a grant.

Their main product/service is called CacheTown.
Their main product/service is an augmented reality technology called CacheTown, click image to view their promo video.

Couch & Campos rented a nearby apartment and walk to work, they don’t have a car. They said the decision to relocate was easy because of the enthusiasm of St. Louis to attract young businesses, they’d never have such an opportunity with venture capitalists on the West Coast.

Apparently other cities have spent big bucks to set up incubators of this size, but here they just had to repaint.  Some of these companies will fail, some will stagnate, but others will prosper. Let’s just hope the latter stay in St. Louis as they expand.

— Steve Patterson

 

Poll Results On Downtown Macy’s

Just over half (50.77%) the readers who voted in the poll last week felt the closing of the downtown Macy’s will have a negative/very negative affect on downtown. Here are the results:

Q: How will Macy’s closing their downtown location affect downtown St. Louis in the long-term?

  1. Negatively 47 [36.15%]
  2. Neutral 43 [33.08%]
  3. Very negatively 19 [14.62%]
  4. Positively 11 [8.46%]
  5. Unsure/No Answer 6 [4.62%]
  6. Very positively 4 [3.08%]

Here’s my take (not spin): I specifically included “in the long-term” in the question because I think the short-term effect will be negative, but will be neutral in the long-term. How long is long-term? I’d say 8-10 years, in this case.

Cities/neighborhoods are resilient places, provided they don’t pass a tipping point. For many of us that live downtown, Macy’s just wasn’t that important. I personally bought more from Macys.com than in the Macy’s store. When Macy’s closed both restaurants in the consolidation to 3 floors a couple of years ago I no longer had a reason to visit.    Previously I’d attend a monthly lunch in the St. Louis Room, then browse the kitchenware section afterwards, often making a purchase.

On the positive side I see the void as opening up the market so another retailer might consider a new store. The new urban CityTarget format comes to mind:

The Chicago store is housed in a 113-year old historical landmark constructed by architect Louis Sullivan in the heart of the city at the corner of State and Madison Streets. Nearby retailers include H&M, Forever 21, Office Depot, Nordstrom Rack, Sears and T.J. Maxx.

CityTarget stores are more expensive to operate and build, as they are housed in pre-existing spaces, Schindele said. In Chicago, for example, Target had to rip out old floors and strip dozens of coats of paint off of columns to give the store the CityTarget look.

CityTarget shelves are bright white rather than almond-colored. Mannequins, tested in one Target store, and brushed silver racks are used to display clothing. In a first for the Target chain, music plays in the Chicago and Seattle locations. (Huffington Post)

CityTarget stores are also located in Seattle, Los Angeles (2), San Francisco. Additional CityTarget locations are planned for Boston & Portland OR,  with additional stores in LA and SF.

Last month, in a different conference call, Target chief financial officer John Mulligan said the company was “very excited” about the CityTarget concept.

Target plans to open three more this year, Mulligan said. “And then, we’ve said all along, we’ll pause,” Mulligan said. “We’re pretty thoughtful about things like this. So we’re going to pause in 2014 and evaluate where we are at.” (Minneapolis-St. Paul Business Journal)

So even if Target can be interested it’ll be a while before it would happen. Other retailers might see an opportunity in the meantime.

— Steve Patterson

 

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