Monday, May 03, 2010

One Juicy Cloth Thread


The Tucson Choices blog recently featured an excellent Wake Up Tucson radio show conversation with University of Texas Professor Haywood Sanders (Curriculum Vitae), a political scientist who looked at urban politics during his graduate studies with an emphasis in public investment in large scale development activities. During his research into infrastructure investments and maintenance, he saw that cities facing serious infrastructure issues with sewer, water, roads, bridges, and others were deferring solutions to spend lots of money on convention centers, stadiums, and major hotels. His research resulted in the publication of Field of Schemes.

So why is this happening?

Briefly, cities perceive themselves as competing – for conventions, sports teams, trade shows, visitors, and tourists. Remember, Cloth is all about bilking communities out of millions of dollars without having to deliver results. What is the best way to organize for this? Consulting! Become a consultant who charges a ton of money to prepare a forecast. Number two in the racket are the construction contractors who rake in fortunes building the ball fields in Iowa. They get theirs whether anyone shows up or not. Dr. Sanders work finds that when you build it, they don't come, and that project after project woefully fails to fulfill on the forecasts provided. Further, he finds that the cast of characters cashing in at the trough is a rather fixed bunch (imagine that). A hilarious conversation educates Chris and Joe that HVS Consulting provides the economic analysis for projects all over the country, including the proposed Tucson convention center and hotel, which will generate "hundreds of permanent jobs and over 100,000 visitors every year."

CLOTH!


No it won't. Contractor Garfield Traub touts projects like a hotel in Lubbock, Texas and a convention center in Portland. Neither have been built. Who did the forecast telling Portland their center would attract the teaming masses of humanity? HVS. How about the publicly funded hotel in Myrtle Beach (a city known for its horrible shortage of lodging accommodations)? HVS. The one in Austin (desperate need for hotels there)? HVS. The Doubletree in Bay City, Michigan is going broke. Who did that forecast? HVS. The one in Phoenix? HVS. Wichita? HVS. The Emperors have no clothes.

What Sanders adds to the cloth conversation is that virtually the same thing is happening in city after city across the country, with consultants telling elected officials and eager contractors the benefits of building convention centers and hotels. In a sweet gig, the consultants say the same thing to each city. They just do find/replace with the city and hotel names in their report. How it works.

After studying in detail the strategic misrepresentation of numbers for a Dallas street car project, Don Pickrell at MIT published A Desire Named Streetcar about the deliberate fudging of numbers to justify its construction (Policy Analysis). The projects get built based on empty rhetoric and fictitious projections, and then rhetoric masks the woeful lack of results. Once built, public money continues to flow to subsidize the ongoing fiasco. Familiar?

This is exactly what I've been talking about for over three years, and it applies to more than hotels and street cars. It also applies to training programs for "impossible to saturate" positions. What I never would have guessed and had to learn the hard way is that scoring the funding is everything and delivering the projected results is irrelevant.

9 Comments:

Blogger Cigar Man said...

Perfect, Matt.

And you are spot on about people who produce real results, as you did in the training arena. It threatens the daylights out of the do nothing cloth characters.

PCC's business training people went spastic over what you were doing.

Because of you (and some other reasons) the cloth training trough has mostly dried up. Tucson doesn't even pretend to have a skilled workforce these days.

5/03/2010 11:28 AM  
Blogger Casey DeLorme, APR said...

x4MR, that was a fascinating bit of reporting. To continue the thinking, did the report--or one similar/connected to it--dig into what investments HAVE worked to help cities economically? I'd wager it's traditional efforts (like education and real infrastructure investment, like streets, sewers and parks), but it'd be exciting to have some report-based evidence.

5/03/2010 3:57 PM  
Blogger The Navigator said...

The developments that have taken place since your publication of "Something Else" have really vindicated and reinforced what you wrote.

Perhaps no causal relationship exists, but your writing certainly foreshadowed the work of reporter Rob O'Dell regarding downtown development, and some of Carli Brousseau (not sure how to spell) and a few others.

It's the one subject where I (and I imagine x4mr) agree with some of the righty blogs and local Republicans. The real culprit is the lack of accountability and failure to measure performance.

If you want a Diamondback bridge, fine. Build one, but don't tell me 100,000 big spenders will come to town if you do. Also, it shouldn't be necessary to pay Hecker tens or hundreds of thousands of dollars to be considered a viable contractor for a project.

I think x4mr offers one extremely important insight. Cities are competing, and these people are elected officials highly concerned with looking good. A convention center or stadium is a hell of a lot easier to put in a sound bite than an upgrade to the sewer system.

Politicians probably also perceive that supporting the wealthy and connected that profit from such projects as sound political strategy.

5/03/2010 6:56 PM  
Anonymous Another Anon said...

It would be nice to see some commentary here about the SALC's big meeting last Friday to talk about (and push, no doubt) changes to the City Charter that will assist Big Business, Fat Cats and Cloth.

Anybody attend? Any thoughts?

5/04/2010 2:24 PM  
Blogger x4mr said...

For obvious reasons I didn't make it, and some of the changes actually do make some sense. Two years ago during the TIF for TAT days I posted about Tucson's size growing to where it should shift to the governance used by the big cities, which is a strong Mayor system with fully compensated elected officials.

Tucson Charter Change Coalition
Change recommendations

I hear Lisa Lovallo is an aspiring Clothmeister, but have no first hand experience. Years ago someone suggested I get to know her. Then further information showed this to be an absurd idea.

5/04/2010 8:24 PM  
Blogger Robish said...

Aspiring Cloth-meister Lovallo . . . she's there.

SALC is pushing the charter changes as an all-or-nothing deal. That's how RTA was passed, so that's what the general thinks will work with the charter changes. Former city manager Mike Hein had a great deal of influence in the development of some of these proposals.

Regarding Heywood Sanders' interview on "Wake Up Tucson", Sanders has been the bane of ole Rich Singer for several years now. When Rich started beating the drum for an expanded kingdom in the mid-00's, some smart-aleck in the media dug up some of Sanders' research, which resulted in the Well-Clothed Singer to attempt a debunk of the debunker.

What's unfortunate is that the TCC really does need an upgrade, physically and operationally (translation: get Singer out as fast as possible and get a real sales force and management team in there), but it doesn't need something so ambitious that it will bankrupt our city.

No way that hotel they've already blown so much on makes sense in today's market, or even the market two years from now, not in Tucson. It won't have the occupancy, average room rate, or financial return that HVS, Garfield Traub, or their paid and unpaid apologists say.

All this will come to a head soon, since Garfield Traub owes Rio Nuevo a Guaranteed Maximum Price on the hotel, as well as a capital plan to finance it.

There are only so many threads you can drape around the emperor, especially one that is fat and ugly.

5/04/2010 8:49 PM  
Anonymous jf said...

These projects sound like the familiar model of third-world projects to attract foreign tourists, like Cancun, or Alcapulco, only without the great scenery. Places where many want to visit, but few want to live.

What happens when cities upgrade schools, streets, water and sewer, power generation and distribution? I think they set themselves up for businesses and people to come there to make a life.

5/06/2010 5:04 PM  
Anonymous Anonymous said...

Ding Dong the Lyons is gone! About $300.ooo.oo in salary...for what now? Economic Development curriculums should be moved into the Theology Department,as they are based on Faith, Hope and Citizen charity(salaries for the cloth.) Will the lady go next? Hope so. Tucson deseves better than a washed up journalist with a nervous twitch and personality of a gila monster.

5/08/2010 3:06 AM  
Anonymous Observer said...

Lyons - what a waste. Did not do one damn thing for this town except trash a good organization (the Alliance). Now we have that piece of shit partnership purged of all competence.

Sure enough, Rob O'Dell has an article today about the TCC expansion and the projected money it will generate, based on, guess what?

A NEW REPORT based on AN OLD REPORT!! The old report was, that's right, HVS!!

The new report says it did not attempt to verify the HVS numbers and assumed they were correct.

Oh, god. Time to go throw up.

5/08/2010 8:29 AM  

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