Louisville and Carmel in New York Times Articles That Confirm First Principle of U.S. Economic Development

Louisville's active downtown has been helped immeasurably by taxpayer investments that leveraged private investments. Photo/Keith Schneider
Louisville’s active downtown has been helped immeasurably by taxpayer investments that leveraged private investments. Photo/Keith Schneider

CARMEL, Ind. – James Brainard, the 60-year-old mayor of Carmel, Indiana, is not the kind of public official who deplores change. He’s just the opposite, in fact.

In 1994, this prosperous suburb just north of Indianapolis held a planning workshop, inviting its 31,000 residents to consider ideas to redevelop Carmel’s crossroads downtown, parts of which date to the city’s founding in 1830. The next year Mr. Brainard, a moderate Republican, was elected to the first of his five terms in office, running on a platform that included investing taxpayer dollars to put the development plan for the original downtown, now known as the Arts and Design District, into effect.

Two decades later Carmel is a city of 85,000 residents transformed by a construction strategy unique in Indiana and the Midwest. It stresses 1) high-wage job recruitment in a district of contemporary glass and steel buildings along Meridian Street that houses over 40 corporate headquarters, 2) construction of office, residential, and entertainment venues in two central city districts that invite sidewalk dining and strolling, and 3) replacing over 80 intersections with roundabouts to keep vehicles moving and reduce traffic congestion.

The Arts and Design District set the stage for much of Carmel’s development over the last decade. Since 2005 just over $70 million has been invested by the city and private developers in nearly 300 new residences and dozens of new businesses that encompass almost 900,000 square feet of renovations and new construction, according to city records.

In Louisville, just hours south of Carmel, William Weyland is the design and marketing spirit behind the ten-story baseball bat outside the 200,000-square foot Louisville Slugger factory and museum on West Main Street. Mr. Weyland’s company, CITY Properties Group, finished the project in 1996 and it now attracts over 250,000 visitors annually.

Mr. Weyland’s company is responsible for a string of other offbeat projects to recycle old buildings. They include a $17 million renovation, completed in 2011, of the 145-year-old, 120,000-square foot Whiskey Row warehouses on West Main Street. The project has first floor space for five restaurants, and 36 residential lofts on the upper floors.

Now, for the first time in his career Mr. Weyland, who was raised in this Ohio River city and spent much of his career as an architect and developer, is undertaking major new construction – a $20 million, 121,700-square foot Hilton Garden Inn. The 163-room hotel, which opens in October, is rising at the corner of Third and Chestnut.

It is one of three new hotels under construction in downtown Louisville, the result of a successful public-private partnership that turned several hundred million dollars in taxpayer investments into hundreds of millions of dollars more in private investments. Louisville’s downtown core is now alive with entertainment venues, restaurants, watering holes and new residences.

Earlier this summer, in articles in The New York Times, I reported on redevelopment activities in Carmel and Louisville. See:

Mayor Drives the Remaking of an Indiana City

Waking Up Louisville’s Downtown

Both articles underscored the value of the first principle in American economic development — investing public dollars in public goods to leverage even larger private investments. The United States developed as a result of this basic principle of economic well-being. Transport canals were constructed in the 19th century along with the transcontinental railroad and America’s land grant research universities. The Interstate highway system was built along with dams, power stations, irrigation networks, parks, public buildings, and universities in the 20th century.
Continue reading “Louisville and Carmel in New York Times Articles That Confirm First Principle of U.S. Economic Development”

Henderson, Kentucky’s Riverwalk Along the Ohio River Shows Value of Public Investment

Henderson's three-mile long Riverwalk spans the southern bank of the Ohio River three hours downriver from Louisville.
Henderson’s three-mile long Riverwalk spans the southern bank of the Ohio River three hours downriver from Louisville. Photo/Gabrielle Gray

HENDERSON, KY — The 981-mile Ohio River Valley, which extends from Pittsburgh to Cairo, Ill. is full of surprises these days. Pittsburgh shed its sooty industrial coat of the 20th century to emerge as a center of engineering and biomedical innovation. Cincinnati, battered by race riots and disinvestment, is building a $1 billion riverfront neighborhood and a streetcar line.

Louisville’s days as a meatpacking hub are long gone. Now it’s the growing capital of the American bourbon industry, home to one of the country’s fine urban universities, and experiencing a boom in hotel construction to accommodate all the interest in its new stature as a hub of exceptional restaurants supplied with fresh locally grown food.

Further downriver, Owensboro, KY. passed a local tax increase to invest in downtown redevelopment that yielded a new convention center, rebuilt streets, two hotels, an office building, dozens of new residential units, restaurants, and a riverfront park complete with jet fountains designed and built by the same guys who shower Las Vegas in thrilling curtains of water.

Then comes Henderson, an Ohio River city of such grace and idealized mid-continent whimsy that you almost expect to see riverboats docked along the banks and trolleys at the center of the 100-foot wide Main Street. Tall trees shade the city’s residential streets. Beautifully maintained Victorian homes keep a vigil on the river and Henderson’s business district. In the early 1990s, film director Penny Marshall arrived with Tom Hanks, Geena Davis, Madonna, and Rosie O’Donell to use the three-story brick mansion with the lovely porch at 612 North Main as the set for “A League of Their Own.”

The newest piece of Henderson’s small town landscape is its three-mile Riverwalk, which spans the rolling bluffs of the Ohio River’s southern bank. The Riverwalk, in early evening, is bathed in the pink and purple of Kentucky’s characteristically beautiful setting sun. During the day the rumble of coal trains, and the vibrating bass of the big engines of river towboats form an attractive soundtrack for a city of 29,000 that was founded in the Kentucky wilderness in 1797. The city’s Riverwalk affords such views of the Ohio, the flat fields beyond, and the thick forests on the Indiana banks that it’s possible to imagine the stunning display of flora and fauna that drew John James Aububon here in 1810 to spend nine years studying and painting.

Henderson, KY., founded in 1797, offers an amazing collection of beautiful Victorian era homes. Photo/Keith Schneider
Henderson, KY., founded in 1797, offers an amazing collection of beautiful Victorian era homes. Photo/Keith Schneider

Continue reading “Henderson, Kentucky’s Riverwalk Along the Ohio River Shows Value of Public Investment”

Owensboro Convention Center Opens With Big Party; Senators Paul and McConnell Not Among The Guests

Owensboro threw a big  party on January 31, 2014 to celebrate the opening of its $50 million Events Center. Some 2,100 city and Daviess County residents attended. Two who didn't were Senators Mitch McConnell and Rand Paul. Photo/Keith Schneider
Owensboro threw a big party on January 31, 2014 to celebrate the opening of its $50 million Convention Center. Some 2,100 city and Daviess County residents attended. Two invited guests who didn’t show up were U.S. Senators Mitch McConnell and Rand Paul. Photo/Keith Schneider

OWENSBORO, KY — In February 2009, in the very depths of the Great Recession, seven of the nine commissioners elected to lead this capable city and surrounding Daviess County took a long breath, understood the political consequences, and approved a modest increase in a local tax to generate $80 million to build a new downtown.

Though just two of the seven officials remain in office, what they accomplished in a single courageous vote achieved three distinct and nationally significant objectives.

First, they created a local economic stimulus plan that, to date, has generated $250 million in downtown construction and infrastructure upgrades — $140 million in taxpayer-supported investment and $110 million in private spending. A pallid, mall-savaged 20th century downtown, short of breath and close to death, is being replaced by a beaming and inviting urban center fit for the 21st century. Owensboro today is a display of savvy design that encompasses a stunning river walk and riverfront park, a $50 million convention center, two new hotels, a $12 million office building, new housing and businesses, and streets reconstructed as handsome boulevards, with wide sidewalks to encourage outdoor cafe seating.

Second, those seven elected officials offered a pointed rebuke to the politics of austerity that grips Kentucky and the nation. The local increase in an existing tax on insurance premiums — from 4 percent to 8 percent, or around $150 a year for an average family — unleashed a torrent of new economic activity that produced hundreds of new jobs, more than any city in Kentucky, and dropped the city and county unemployment rates to around 6 percent, among the state’s lowest.

And third, Owensboro and Daviess County are building a nearly flawless case in support of the primary economic principle that built the United States — the joining of public spending with private investment to foster civic innovation, strengthen the quality of life, and generate jobs and new wealth.

Through the Convention Center's east window, a view of the LEED-certified Hampton Inn & Suites and a city in transformation. Photo/Keith Schneider
Through the Convention Center’s east window, a view of the LEED-certified Hampton Inn & Suites and a city in transformation. Photo/Keith Schneider

Spurred by two-term Republican Mayor Ron Payne, who led Owensboro’s downtown redevelopment, city leaders here are doing everything in their power to make sure that lesson hits home. Earlier this month Payne and his colleagues held a three-day, $134,000 party to stoke the new civic energy. It started on January 31 with an evening open bar, a tenderloin banquet, and a Sara Evans country music concert, all free of charge, for 2,100 evening gown and tuxedo-clad city and county residents.

The occasion, maybe the most ardent, festive, and longest public party ever held in Owensboro — nobody here remembers anything comparable — celebrated the on-schedule, on-budget opening of the city’s two newest facilities — a 169,000-square-foot Convention Center and the $20 million LEED-certified, seven-story, 151-room Hampton Inn & Suites next door. Continue reading “Owensboro Convention Center Opens With Big Party; Senators Paul and McConnell Not Among The Guests”

Owensboro’s Big Step Up To Relevance

The redesign and renovation of Smothers Park along Owensboro’s newly elegant riverfront was made possible by a local tax increase approved in February 2009, the height of the Great Recession. Photo/Keith Schneider
The redesign and renovation of Smothers Park along Owensboro’s newly elegant riverfront was made possible by a local tax increase approved in February 2009, the height of the Great Recession. Photo/Keith Schneider

OWENSBORO, KY — Senator Mitch McConnell, a Kentucky native and Senate Republican leader, took his place several years ago at the head of his party’s pack of ideologues who countenanced disinvestment, lower taxes, and less spending on public projects with public purposes. But here in Owensboro, a small city perched on a high bluff on a big bend of the Ohio River, the senator’s name graces a year-old riverwalk and plaza in Smothers Park, the centerpiece of the city’s $225 million downtown redevelopment. The magnificent park, designed by EDSA, was constructed with the help of $40 million in federal funds secured by Sen. McConnell.

That little piece of political irony describes much of the governing and policymaking that is transforming Owensboro into one of the urban jewels of the Ohio River Valley. Owensboro, a city of nearly 60,000 residents, is 753 miles downstream from Pittsburgh, where the 981-mile Ohio River starts. As such, Owensboro lies near the southern terminus of an industrial region that sustained massive economic transformation over the last half century, and now is rebuilding and reinventing a new economic era for the U.S., and doing so at a furious pace.

Much of that is due to the capacity of local government leaders to update their operating systems to not only keep pace with the velocity of change but also to be skillful enough to measure what market opportunities fit and to seize them. In Owensboro, the emerging result is an uncommon American community. This is a city and a metropolitan region of 150,000 where pride in place, and optimism about the future is authentic.

But it’s also a city and a region that is deeply conflicted about its priorities. Voters here now consistently send the most ardent anti-government, anti-tax lawmakers to Washington.

That, of course, is not the formula that produced the economic renewal now emerging in Owensboro. The scenario of aspiration that is coming out of the ground along Owensboro’s riverfront reflects what is possible when sound judgment joins with adequate public investment. You can read my 2011 study of Owensboro, What’s Done, What’s Next, here.

Owensboro in 2009 chose to reckon with the era of stalemate and stagnation that is scarring the United States. City and county leaders approved an $80 million local tax increase to finance the redesign and reconstruction of Owensboro’s riverfront district. That decision is producing $225 million in public and private investment along a 1.4 mile stretch of riverfront and the city’s downtown that had been mouldering for 30 years.

Today that same stretch is adorned with cascading fountains that, at night, lift streams of watery gold that attract hundreds of people downtown. Smothers Park, which joins the city to the Ohio River, is already among the most beautiful civic spaces in the country. More is coming.

Continue reading “Owensboro’s Big Step Up To Relevance”

Water, Energy and the Ohio River Valley’s New Course

The six-state Ohio River Valley is surging economically, getting environmentally cleaner, and leading the U.S. recovery. My report for the Wilson Center and Circle of Blue explains why. Click here for the full report.

ATHENS, OHIO – Few places in the United States better understand the economically essential and ecologically risky accord between energy and water than this southeast Ohio town.

Athens, where Ohio University was founded in 1804 as a Northwest Territories frontier institution, was once surrounded by dozens of working underground coal mines. Thousands of miners spent much of the 19th and half of the 20th centuries digging long horizontal and vertical shafts that essentially hollowed out most of the rounded hills of the Hocking River Valley. Coal from southeast Ohio fired steel mills and fueled electricity-generating boilers that turned Ohio into an industrial powerhouse.

Then, as now, water was critical to every stage of the mining, processing, shipping, and burning of coal in southeast Ohio, which is at the center of the six-state Ohio River Valley. The ecological consequences of the rugged, unregulated mining before 1950 are manifest in a present day water mess. Water fills the dormant shafts and pours out of the old mines of the Hocking Valley in springs and streams so saturated in trace minerals they are too acidic for aquatic life to survive.

Ohio River tows are transporting more steel and less coal, a sign of big changes in manufacturing and energy development. Photo/Keith Schneider

Natalie Kruse, a hydrogeologist and assistant professor at Ohio University, has distinguished her young academic career through research to develop practices that restrain the acid mine drainage, and restore some streams to conditions that support small fisheries. In that sense, Dr. Kruse is a kind of capstone figure working to clean up the remnant byproduct of Ohio’s first great era of carbon-fueled development.

Dr. Kruse, though, is also emerging here as a prominent researcher helping citizens and state officials gain a clearer understanding of the effects on the state’s freshwater reserves from Ohio’s next chapter of hydrocarbon production. More than a mile beneath east and southeast Ohio, and much of Pennsylvania and West Virginia, lies an astonishing abundance of natural gas embedded in the deep hydrocarbon-rich shales of the Utica and Marcellus geologic formations. In the last five years, over 8,000 deep Marcellus shale gas wells were drilled in Pennsylvania, and 1,700 were drilled in West Virginia. Ohio’s Utica shale gas developers have drilled 367 wells since 2010, when the natural gas boom started in this state.

The sudden surge of natural gas is the most important factor in why federal figures show that coal production and electrical generation fueled by coal, the dirtiest fuel, have declined since 2010 in the Ohio River Valley. Utilities in Ohio and the other states along the 981-mile Ohio River, which stretches from Pittsburgh to Cairo, Illinois, are opening more natural gas-fueled turbines, the newest of which operate with far lower requirements for cooling water, and don’t have fuel piles that pollute waterways. Emissions of climate-changing gases are falling because carbon emissions from burning gas are 40 percent lower than from burning coal.

Marietta, Ohio, on the river’s north shore, is where developers of the Northwest Ordinance, which expanded the nation and outlawed slavery, settled in the late 18th century. Photo/Keith Schneider

The readily apparent and well-documented benefits of the surge in fuel supplies, though, are pitched on the slippery rocks of watery risks. Developers bring the gas to the surface by pumping, at ultra-high pressure, a 4-million to 6-million-gallon mixture of sand, water, and chemicals into each well to fracture the rock and release the fuel. Gas developers build roads, pipelines, and processing infrastructure at heavily wooded drill sites, often in steep terrain. The result is deforestation, erosion, and siltation in mountain streams.

Earlier this month, in support of a Wilson Center-Circle of Blue speaking tour in Beijing, I prepared a paper that updates the findings of our 2010 Choke Point: U.S. report. That project identified the Southwest, Great Plains, and Southeast as the regions at greatest risk of shortages of energy and water. Choke Point: U.S. also reported that access to adequate supplies of water and wastewater treatment were the primary impediments to the shale oil and shale gas production boom overtaking the country.

A special focus of this new paper — available on the Circle of Blue Web site here — is to explore energy production and water supply in Ohio and its neighboring Ohio River Valley states. The development of natural gas and natural gas liquids from deep shale is reshaping long-standing trends in the region’s energy mix, water consumption and treatment patterns, climate emissions, and economy. Moreover, global trends in energy and food supply and water use, especially in China and the Persian Gulf, are dramatically influencing natural gas and oil development, coal consumption, food production, water use, and the economy along the Ohio River Valley.

The six-state region is now a useful laboratory to understand how the convergence of new domestic energy technology, and overseas water, energy and food production patterns form an interlocking web of market signals that affect U.S. state economies and environmental conditions. Growing demand for grain in Asia and the Persian Gulf has produced record-high prices for corn and soybeans in the U.S. over the last five years. Rising demand for grain, and for energy, also prompted higher sales of the planting, harvesting, and construction equipment made by John Deere, International Harvester, and Caterpillar in the Ohio River Valley states.

Asia’s rising demand for coal, to fuel its fast-developing economies, is propping up prices in the Ohio, West Virginia, and Kentucky coal industry, which is exporting more coal than ever before to Europe, and putting pressure on Oregon, Washington, and British Columbia to open a western deepwater port for American coal exports to Asia.

China’s growing demand for liquid fuels keeps oil prices high enough to finance the expensive development of shale oil in the U.S.. Demand from China, and the higher prices international consumers pay for natural gas and natural gas liquids is prompting U.S. shale gas developers to produce enough methane, ethane, and propane to export from the Ohio River Valley states to overseas markets. Congress is debating whether to lift export restraints on natural gas and natural gas liquids, and new export terminals are proposed on the Atlantic and Gulf coasts.

The expanding markets for natural gas in the U.S., and in global markets, has produced mounting sales in support industries, including the construction of five new steel plants in Ohio since 2011, the first new plants since the 1980s.

The steady expansion of Ohio’s gas fields, along with smaller increases in renewable energy production, is part of a similarly powerful and, to some extent, surprising pivot point transition that is occurring across the United States in the energy and water sectors. America, alone among the world’s big economies, appears to be accomplishing a feat that nobody forecast just three years ago. Simply put, the United States is using less energy, growing its economy, and steadily shifting to cleaner, less water-consuming fuel sources.

For a full copy of the report click here.

Also here at Circle of Blue.

— Keith Schneider