Why businesses worry about Seattle's policies
Businesses fear that when it comes to their economic challenges, Mayor Mike McGinn and the city council don't get it.
Chuck Taylor/Crosscut Flickr group. Copyright.
On Aug. 9, representatives from local businesses arranged a meeting with Mayor Mike McGinn. While they focused much of their message on retaining freight mobility by not restricting any more road lanes, they were equally concerned on the impact the recession has had on small and medium businesses.
They emphasized that the city needed to be aware that business generates the tax revenue the city so desperately needs. They believe McGinn’s transportation decisions are slowing the movement of commerce. They hoped to deliver a message that city policy should consider the transportation needs of commerce equally with the needs of the commuter going to and from a work place.
Later in the month (on Aug. 24), the mayor held a press conference to announce Seattle’s response to the recession and job loss. There was no mention of his earlier (and only) chat with small businesses. The mayor rolled out a economic scheme called “The Seattle Jobs Plan” that had been in the works for months, but little of the mayor's plan addressed the issues that concern business the most, especially the need to keep down the costs for the businesses we already have.
The mayor’s “Jobs Plan” outlined the steps the city would take to stimulate job creation and enhance Seattle’s economic sustainability. The city would offer a wide range of stimulus programs, largely financial incentives and programs that range from post secondary education, rebuilding the infrastructure, enhancing the “Green Factor” neighborhood beautification along with McGinn’s favorite program called Walk, Bike, Ride. And, oh yes, more fiber. Not for you diet, but broadband.
While the McGinn plan dreamed up by the city's Office of Economic Development outlines some very useful and long-range services like www.growseattle.com, which connects businesses and services to financing for entrepreneurs, there is little mention of issues businesses think important. Absent in developing the mayor's plan was the participation and advice from the majority of the city’s many mainstream businesses, chambers of commerce, and business associations. They believe they have been disenfranchised.
The Puget Sound Business Journal, the Greater Seattle Chamber of Commerce, and members of several small business associations have been vocal about the city’s apparent failure to understand what it takes to run a business and keep it healthy. They might ask if the city’s example of management and living within a budget qualifies it to design successful business plans when few if any officials have actual experience in running a for-profit business.
Businesses generate tax revenue the city badly needs. Retailers and restauranteurs worry about the mayor's proposed budget, which would create revenue by making parking significantly more expensive. Restaurateurs speculate that dining out in the evening and shopping will not be done on bicycles or buses. A good many perceive the parking tax more as an anti-auto tactic than a source of city revenue. Retail businesses and restaurants argue the parking rate increase would penalize the very customers the retail and restaurant business need to make a profit and, thus, create more sales tax revenue.
Seattle still has some manufacturing and service industries. They all use power and utilities. These same industries complain that significant increases in utility rates for water, sewer, garbage, and electricity, plus restrictions on road use will slow commerce. At some point, lower sales and profits may well cause some to move out of Seattle, further reducing tax revenue to the city.
The Washington Research Council concludes many businesses and jobs have already moved out. The council's researchers note that in eight years Seattle alone lost 7,900 private sector jobs. They also state that, “Location is a choice, and increasingly businesses are choosing suburban locations over Seattle.”
They say, “This presents a long-run fiscal challenge for Seattle city government, which gets 54 percent of its general tax revenue from taxes paid by businesses. The research is clear: taxes matter to businesses when they choose where to locate within a metropolitan area.”
The council also reports, “Seattle’s business taxes are already significantly higher than those in the suburban jurisdictions. In 2007, the city collected $485 in business taxes and fees per private sector employee, which was nearly twice the amount collected in Bellevue and more than five times the amount in Redmond. The tax gap could become even larger if the $25 per head annual tax that the city began collecting from businesses in 2008 is reinstated. To reverse the trend in jobs, Seattle must become more competitive within the region.”
Not mentioned by the Washington Research Council is the level of regulations and permit fees the city imposes. The number of permits or licenses to operate is staggering: permits for signs, permits for air compressors, sidewalk permits, the list is amazing. While fees and licenses are intended to pay for inspection, they were never intended to be revenue generators.
While private-sector jobs were leaving, the city under the Nickels administration increased its workforce to approximately 11,200 employees.
There is a general feeling surrounding a number of small- and medium-sized business that the current administration and the Seattle City Council simply don’t understand the role businesses play in the overall economy. It’s fairly clear that over the last few decades, few mayors or elected city council members have come directly from successful private, for-profit industries. Likewise, few department directors have extensive private sector experience.
One can easily understand this conclusion by noting the city’s choice for a new director of economic development. According to his resume, supplied by the city, there is no mention of his ever having owned or managed any for profit business. The same person is now in charge of the mayor's new jobs program. Wouldn’t it have made good sense to hire someone with extensive business experience to guide Seattle’s jobs program?
Seattle is losing jobs in manufacturing, warehousing and distribution, industrial supply, and shipping. Smaller traditional business that supply family-wage jobs believe Seattle’s mayor should want to know why. Individually, representatives for smaller business, suggest the city isn’t aware that its policies, regulations, and attitude discourage those industries and the people who work there. City planners, the mayor, and council appear more focused on commuter transportation planning, high tech, bio-tech, research, and the software industry. Encouraging the “brain” industries to find a home in Seattle is highly desirable, but so is insuring existing manufacturing, shipping, service, and supply jobs are retained.
Private business, unlike government, must be competitive. In the private world, time is money, and doing more quicker with fewer employees (productivity) is the name of the game. It’s the difference between staying in business and failing. If Seattle fails to provide an environment where commerce has the mobility and tax levels that are in line with other regional jurisdictions, more businesses will search for jurisdictions where their profitability can be sustained.
When a FedEx truck ships from an operational center in Fife to make deliveries in Everett, Marysville, or Bellingham, they must travel through Seattle’s geographic bottleneck. They perceive McGinn’s transportation theories choking their passage and thus cutting their profits. To them, time is money. They think McGinn’s theories on road diets, downtown streets in place of the viaduct, or perhaps commerce by bicycle would slow the regional economy.
At some point in time, McGinn and the city of Seattle will need to come to the realization that Seattle retail and manufacturing businesses are in the fight of their lives, competing with internet sales, cheap imports, and competitors like Walmart. Fighting for survival with their own city is simply not necessary. Seattle is now only one part of the global economy and no longer the center of the known universe. Maybe the Hippocratic oath should be applied to government: “Do no harm!”
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Comments:
Posted Mon, Oct 11, 7:50 a.m. Inappropriate
Thus, rather than the business community supporting the deep bored tunnel, with lower capacities, a more risky route, slower speeds, steeper grades and complicated portal connections to business areas, they should support the retention and retrofitting of the current Alaskan Way Viaduct which carries the most amount of traffic, supports current business centers, can be accomplished in a couple of years with little disruption to business communities and costs less that $2 billion.
Wake up Businesses! Time is running out on many fronts if you don't act now!
Posted Mon, Oct 11, 9:03 a.m. Inappropriate
If a business is dependent on the government favoring auto travel at the expense of other modes, it starts to look like less of a business and more of a welfare recipients collective.
A serious business will expect to pay the cost of its activities, and for its customers to do so as well. In doing so, national security will be improved as the country becomes less dependent on foreign energy sources, and more money will stay in the community rather than going to foreign oil producers, which is good for businesses.
Posted Mon, Oct 11, 9:35 a.m. Inappropriate
Wow! That was a real trip in the wayback machine. When I moved to Seattle in 1970, Seattle was doing everything Kent wants to be a "business-friendly city". You couldn't build a residential highrise in the Regrade- that vast expanse was zoned for 2-story manufacturing.
Lake Union, then, was tagged for commercial and manufacturing. In practice, this meant that, first of all, no attempts were made to curb pollution, or to cap the overflow sewers that emptied directly into the lake during heavy rains. City waterways were leased to businesses for nominal fees, and it was regarded as eccentric and comical when people tried to take back the streetends from encroaching businesses. Businesses got wholesale rates on power, but the Boeing Company got the best break of all- being 'outside' the city limits, they didn't pay city taxes, but nobody believed for a minute that the Seattle Fire Department would simply let Boeing burn down because they hadn't paid.
It wasn't working. All this 'pro-business agenda' did was to subsidize aging industries, handicap newcomers, and create the distinct impression that pro-business meant anti-citizen. The combination of cheap gas and freeway building ensured an outmigration to the suburbs, the building of suburban malls, and the replacement of farms by warehouses for truck distribution of goods.
Seattle got lucky, though, and replaced some of the 'good' jobs with 'even better' jobs. The hospital laundries moved to the outskirts of town, but the hospitals stayed at the center, and improved and expanded. In the process smaller hospitals disappeared, but people hardly noticed, because of the general improvement of the whole.
Kent says "Seattle is losing jobs in manufacturing, warehousing and distribution, industrial supply, and shipping", and that "City planners, the mayor, and council appear more focused on commuter transportation planning, high tech, bio-tech, research, and the software industry". But how could it be otherwise? Why would we want to employ a warehouseman instead of a researcher? Why would you want an industrial supplier downtown when their customers are undoubtedly in other states or even other countries?
And it should come as no surprise that city leaders and employees often do not come from the ranks of successful businesses. Cities do a lot of things that private businesses just cannot do. Pullman and Ford, two of our greatest industrialists, tried to build their own cities for their workers- and failed. Running a city is not just like running a business. In fact, it's quite a bit different.
Seattle leaders knew this when they created City Light, to make Seattle independent of cartels, and city water supplies to ensure clean water for the city. It's easy to monitor electricity, water, and garbage pickup costs, but harder to fairly assess the police, fire department, libraries, municipal courts, and parks- not to mention the quarter of the land that pays no taxes, because it is the streets. These are all essentials to a healthy city, but no grading system yet devised can point us to infallible leaders, so, ultimately, we rely on elections.
We can rely on Kent and his buddies to keep complaining, but the world is changing. The candy factory and the frictionless-fastener company are gone from the shores of Lake Union, but the businesses replacing them are eager to move in and willing to pay higher taxes to do so. The primary task of a city is to be a city, and when that requires changing course to stay in the main currents of national and international trade- that's what Seattle has to do.
Posted Mon, Oct 11, 11:52 a.m. Inappropriate
I agree with you on the regulations part of your article. I looked into re-starting a neighborhood coffee shop/grocery store, since we live in an old corner store (no longer a store). I would have to put in three, off-street parking spaces and apply for a zoning variance! Who decided that corner stores were so undesirable? Why does every business need to be auto-oriented?
Posted Mon, Oct 11, 12:35 p.m. Inappropriate
So downtown is unhappy with McGinn because businesses having been moving out of town in the years before he took office, he's cutting their parking subsidy, and City Light and Water are charging rates somewhat closer to rates charged by for-profit firms? I like the use of the term "disenfranchised", because the downtown business interests have long considered city government to be a franchise of theirs, and voter disenchantment with their tunnel be damned. They are having success using his bike-riding as a cudgel to inflame voters against him, an effort by the Times and lately by the P.I. & Crosscut in a fashion that would make Fox News proud. Serial Catowner gets the history right and her point about how cities and businesses coexist and thrive are well taken.
Posted Mon, Oct 11, 1:18 p.m. Inappropriate
What difference does it make if one wears a lab smock or a Carhartt jacket to work?
How much do you suppose we’re paying now for incentives to accommodate these eager, new-wave 21st century businesses who are fleshing out Seattle's tired old skeleton? Don't like Mercer...no problem. Need a waterfront park... sure, we'll just dig a tunnel. Height limits downtown...how high do you need? Tax breaks... sure, how much? Vacate this right of way…sure. Run that tunnel to South Lake Union…yeah, we can do that. Eliminate parking here…OK. Need a trolley…no problem. New noise ordinance, more police for your condo, alley beautification, back rub…uuummm, and, and,…?
Strong special interests slapping around weak elected officials to get what they want is an old story. And this current crew is turning a couple of Seattle neighborhoods into a grotesque, frat party at the expense of the rest of the city. And we’re talking BILLIONS of dollars here.
I think the point of the article is that the types of businesses described are also bearing this burden.
Posted Mon, Oct 11, 2:05 p.m. Inappropriate
"What difference does it make if one wears a lab smock or a Carhartt jacket to work?"
Answer: about $100,000/year
(rimshot)
Posted Mon, Oct 11, 2:07 p.m. Inappropriate
> Private business, unlike government, must be competitive. In the private world, time is money, and doing more quicker with fewer employees (productivity) is the name of the game... When a FedEx truck ships from an operational center in Fife to make deliveries in Everett, Marysville, or Bellingham, they must travel through Seattle’s geographic bottleneck.
FedEx innovators have been super smart to invest in electric trikes -- companies that find solutions like this are ahead and will stay ahead: http://www.youtube.com/watch?v=YvOwBqN7b7U If the best way to clear a bottleneck is to clear a bottleneck, why wouldn't smart businesses go all out for Walk Bike Ride?
Posted Mon, Oct 11, 2:13 p.m. Inappropriate
What difference does it make whether you wear a lab coat or a Carhartt jacket to work? Oh, just about $30k per annum, to the worker. And that's when we compare the lowest paid worker in the lab to the highest paid worker in the warehouse.
As for the value of the product, though, the difference might be considerably greater. All part of why warehousing and other Carhartt-wearing industries are seeking cheaper digs outside downtown.
Posted Mon, Oct 11, 2:19 p.m. Inappropriate
Hey Andy! You just answered my question as to why Austin TX must be thriving with small businesses and Seattle is stuck. In Austin there are tons of these no parking anywhere in sight places to shop, buy groceries, beer, coffee & antiques. And the city was hoping with pedestrians and bicyclists. I'm betting that the requirements to start a business are lower.
Posted Mon, Oct 11, 2:44 p.m. Inappropriate
I love Austin! I was down there for the SXSW a loong time ago. They had just passed a law banning open containers of alcoholic beverages--big mistake. I saw Morphine play, too.
But the summers--oi ve.
Posted Mon, Oct 11, 2:57 p.m. Inappropriate
I think I get it...
Carhartt wearing poor people in vehicles = bad.
Lab coat wearing rich people on rollerblades = good.
How does this justify spending billions of dollars to create intentional congestion through the downtown core area?
Posted Mon, Oct 11, 3:13 p.m. Inappropriate
jmrolls, I don't agree with your conclusions. My comment was a feeble attempt at humor, as evidenced by the Borscht Beltian (rimshot). Also, many in the Carhartt category cannot afford to park cars in the downtown core all day, or even afford cars! Many are taking the bus or train or riding their bikes.
Now for your 'have you stopped beating your wife' style question; let's assume you are talking about these so-called 'road-diets'. Road diets have been shown to increase overall through-put, thereby reducing congestion. Center turn lanes are a wonderful thing.
Posted Mon, Oct 11, 4:40 p.m. Inappropriate
-andy
It was funny...rimshots are good. I was trying to address the pending loss of the AWV as a bypass for downtown. I endorse a retro of the existing structure for various reasons, including that one. With a throughway with effective access to West Seattle and Ballard you would have virtually limitless ways to control traffic downtown. Have a little, or have a lot. I even think it could be incorporated into the planned park in a kind of edgy way. But it would not be a choke point referenced in the article. A report in the Times today states the tunnel will increase traffic downtown due to the reduced capacities and people avoiding the toll.
I don’t have a problem with bikes, but believe that road diets are kind of a cop-out that short changes both riders and drivers…mostly riders. I think money should be spent to create viable routes for bikes that don’t force them into close proximity to cars. Accidents are inevitable and the outcomes are horrible. Decent bike networks would greatly encourage ridership too. Even me.
Posted Mon, Oct 11, 4:50 p.m. Inappropriate
Kammerer relays the faulty logic of unnamed restaurateurs who "speculate that dining out in the evening and shopping will not be done on bicycles or buses." a) They are incorrect in their assumptions about some of their customers, as I frequently bike or bus to evening meals and shopping, as do many others and b) even if their customers drive, metered parking ends at 6 PM in almost every Seattle area. Consequently, the vast majority of people driving to Seattle-area restaurants for evening meals are barely affected, if they are affected at all.
Posted Mon, Oct 11, 5:50 p.m. Inappropriate
catowner,
What ever happened to "Why Your World is About to Get a Whole Lot Smaller, OIl and the End of Globalization"?
< When I moved to Seattle in 1970, Seattle was doing everything Kent wants to be a "business-friendly city". You couldn't build a residential highrise in the Regrade- that vast expanse was zoned for 2-story manufacturing.>
The fact of the matter is that in Feb. of 1975 the Regrade from Denny to Lenora and from Western to Fifth was rezoned Multiple Residence-Mixed Density (base height 65', conditional height 350'). Not a thing happened.
In 1985, an astute Planning Commission explained: property owners were holding property off- market convinced that any day now the market would catch up with that overzoning and their ship would come in. The Commission recommended downzoning to not much more than the base height—five floors of wood frame over two non-combustible. ~85'. Enough of their recommendation was undertaken to produce the comparatively affordable housing in the Regrade today. Exactly, as the Commission anticipated.
Overzoning is hard on developers, but it has other ramifications too: during Seattle's usual market (not much better than today's) overzoning produces fine rental digs for hermit crab start-ups until the other characteristic of Seattle —a sudden boom turns them all out in the cold.
Truth is stranger than fiction and viva the complexity, it makes life interesting.
Posted Mon, Oct 11, 6:01 p.m. Inappropriate
Karen, you are one of about 2% or 3% of Seattle residents who ride bicycles on a regular basis whether communting to work or going out to dinner. Most folks going to Seattle's better restaurants drive, take a cab or walk.
Anybody who owns a restaurant will tell you how critical parking is unless you are located in a really high density area where there are a sufficient numbers of patrons living by who can walk-in, e.g the Denny Regrade. I guess you haven't been following the Mayor's latest proposals to extend parking hours to 8:00 PM, seven days a week! Worse than his proposed increase in parking fees is the likelihood of getting a $35 ticket if your dinner runs over your meter's 120 minute maximum time.
I guess this will force folks to eat later or go to U Village or other venues with free parking. A lot of my friends are now staying on the eastside rather than patronizing Seattle's restaurants because: 1)they now have some great places over there and, 2) Seattle, with it's increasingly "planned congestion" and unfriendly parking policies, is sending a clear message that visitors in cars are not welcome. Unless you have some fairly good nearby restaurants where you live in Seattle that you can walk to, I guess the same applies to us, as well.
Posted Tue, Oct 12, 11:38 a.m. Inappropriate
Karen evidently missed the part of the proposal that would extend meter hours to 8PM.
Posted Tue, Oct 12, 3:14 p.m. Inappropriate
Hmmm, this is starting to feel like a simcity discussion group---I like it.
knute000, anyone who owns a restaurant is loathe to give up subsidies of any kind. Also, I don't think the peeps willing to drop $100 on dinner are going to miss that extra $5 of parking expense. Extending the max time should be easy to do...
jmrolls, sign me up for the dedicated bike paths! But road diets are more about ped safety at the crosswalks and throughput for the autos.
bubbleator, are you still installed in redondo beach as a green house?
Posted Sun, Oct 17, 10:37 a.m. Inappropriate
> . . . few mayors or elected city council members have come directly from successful private, for-profit industries. Likewise, few department directors have extensive private sector experience.<
I don't see this as a point of criticism. Municipalities are not businesses, they are governments, and the people running them should have aims and backgrounds for that job.
When you have a city people want to live in, there will be business there. Las Vegas is a city where the municipality is hand-maiden to the businesses, and it's not doing so well. Why? Anyone want to move there?
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