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Tacoma’s city council, Economic Development Board and some special interest groups continue to cling to failing fantasies of a financial district in downtown Tacoma. All the while they’re wasting taxpayer money and letting opportunities slip through their fingers.

There have been so many warnings they can’t even be referred to as harbingers anymore. The list of businesses that have left Tacoma is long and represents thousands of jobs. The latest company to announce their intent to depart is Davita, a health services company that has a data processing center in downtown Tacoma.

The dream has been to build a financial services district in downtown Tacoma, and with that comes a number of other exploits that are supposed to build the kind of atmosphere that will attract the kind of companies that these people are looking for. The problem is that the people in charge of our tax dollars can’t tell the difference between a good idea and a bad idea.

The city’s Economic Development Board seems to be trying to build a building from the top down. They want a financial services district, but a financial services district is a secondary industry, meaning that it supports local businesses (and individuals). But since the business climate is so bad that companies keep moving out when they get successful (Weyerhauser, Russell, TV and radio stations, a university, etc.), there is no visible foundation to build a financial services district on.

As for the idea of a financial district consisting of primary [financial services] companies, why would any want to locate here? Tacoma has little to offer them. As proof of that I offer two pieces of evidence: Seattle is just up the road, and Russell is probably leaving Tacoma.

After Russell, we’re left with one little bank, but small banks have a habit of being bought out by larger banks. My sister is a VP at a bank that’s doing a lot of buying. She works with the personnel in the banks that are bought out. She keeps very busy. So even our little bank isn’t likely to stay around forever.

Here are some of the bad ideas that Tacoma’s city council has wasted time and money on in recent years in their efforts to ‘attract businesses to downtown Tacoma’:

• A convention center - It mostly duplicates other local venues and has so far failed to attract much new business to the city. The cost was over $80 million.
• Link Light Rail - an $84 million train that runs a total of 1.6 miles on routes that were covered adequately by buses (actually, it’s one block over from the bus routes). And it looks like it will never link to anything.
• International Financial Services Area (IFSA) - With a few exceptions, financial services are a secondary industry in most cities, meaning that their customers are local businesses and residents. Unfortunately, the business climate in Tacoma is so bad that the financial services company that has been associated with Tacoma for decades is probably pulling up stakes and moving on.
• Russell as the anchor for IFSA - If Russell was going to be an anchor for a financial services district we would have one already. It isn’t likely to happen.
• Throwing money at IFSA - $140 million to keep Russell in town and to keep their fantasy of a financial services district alive. Neither is likely to happen, yet the city has decided to put up $45 million of our local tax dollars (the rest from state and federal tax sources) to create something that could only happen spontaneously, but hasn’t.
• Putting the IFSA in an Economic Empowerment Zone - Seems that they can’t decide if it’s a poverty area or a rich investors paradise.
• Changing the definition of downtown to include the nearest successful and growing businesses. Those businesses (health services on the edge of the Hilltop area) belong with the health services area that stretches from the top of the hill (which should be and was considered outside of downtown) to Union Ave. where Allenmore Hospital is located. It’s just another example of playing with numbers to make things look good. You know, like Enron did.
• Building and supporting museums, arts and entertainment businesses in an effort to create some nebulously defined atmosphere that is supposed to attract businesses from out of town. So far it has only attracted a bunch of people who think that graffiti is art and not vandalism.
• Focusing on trying to attract businesses from out of town rather than trying to grow businesses from within. Tacoma has grown many successful businesses in the past and it can continue to do so if allowed to. The current city government doesn’t seem to think that should be allowed to happen or could happen.
• Trying to attract out of state businesses instead of small businesses from this region. Tacoma has to prove that it is a fertile field for growing businesses before it will attract businesses from other areas. Hemoraging businesses and jobs is not what most would consider proof of a good environment.
• Hiring consultants to tell them what they want to hear instead of what they need to hear. They could start by getting anonymous surveys (or interviews) from executives of businesses that have left Tacoma to find out the real reasons (the idea that ‘Seattle is the center of gravity for business’ doesn’t hold water). They could also interview businesses from the South Sound and Peninsula to find out what it would take to get them to move here. The recently run survey had only 36 business responses from businesses outside of downtown Tacoma. That’s hardly enough to find out why businesses aren’t moving in.

I don’t know exactly what are the best solutions to the economic problems of downtown Tacoma, but I have some ideas. The reason you haven’t heard about them on my blog is that I’m not certain whether these are good ideas or bad ones, and until I do, I’m going to keep examining them. Maybe the city council should think about doing the same.

I can tell you this with almost absolute certainty: the current plan isn’t working and shows no signs of working anytime in the near future.

There’s a thread on another blog about Davita looking to leave. A few of the comments stood out to me:

It wouldn’t surprise me if Davita saw how much the Tacoma has bent over backwards to accomodate Russell and thought, “why not us?” After all, Davita is one of the top three non-government employers downtown, with over 700 employees. I’m curious to see how many millions Project Destiny will throw at Davita to keep them in Tacoma.

Welcome to the slippery slope …

Tacoma has sat on our fat *sses long enough, time to get to work and make this city an attractive place for not just the current employers but for new corporations……and if it takes a couple of the big employers in downtown to get Tacoma’s government off their fat *sses then so be it…

There’s a metaphor here that I’ll abstain from making, but Tacoma needs to be able to attract employers on it’s own merits rather than having to pay companies to stick around.

Imagine if this package for Russell had been invested in improving the business climate in downtown even just 6 months before Russell started considering its options. No “shakedown” precedent would have been set, and the money would have arguably been better spent. Tacoma would have been seen as having on-the-ball leadership that could respond to problems efficiently and reliably. Instead we have created the image that the City is a sleeping giant that only budges if poked and prodded enough.

However, there goes the anchor for what is being pitched as an INTERNATIONAL FINANCIAL DISTRICT. Who knows if an IFD is really a viable plan/proposal—and to Nick’s point, and I agree—a proactive proposal would have been nice, rather than reactive.

[then there’s this one that sums the issue up fairly well]

“…that very point begs the question, “What exactly are Tacoma’s ‘merits’ for a company like Russell?””

Quite frankly, I don’t know, but that’s something we need to figure out, otherwise this whole redevelopment thing is a dead end. The current plan of paying off companies to stay isn’t sustainable, so maybe we should have this discussion as a community: Why do business in Tacoma instead of Seattle? If the only thing we have to offer is bribes, then we’re doomed.

One observation that I’d make, and Mofo points out, is that there’s plenty of business being done in this town: it’s just that it’s all out at the mall, and it’s mainly big businesses that offer Tacoma little more than minimum wage retail jobs. How to fix that problem is a question people are dealing with around the country.

[comments posted by various authors, see above link for details]

Part of the ’shakedown’ they might be referring to is that a developer on the North end recently asked for money from the city for the ‘multi-use’ facility it’s building on the site of a former Superfund cleanup site. And not all of the comments made any sense. One of them seemed to be trying to blame President Bush for Tacoma’s problems.

Tacoma’s city council needs to pay attention instead of money.

In my opinion, downtown Tacoma’s biggest problem is the city council.

This entry was posted on Tuesday, May 6th, 2008 at 12:47 am and is filed under BlogNetNews.com, FeedTacoma.com, Tacoma Contradictions, Tacoma Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.