The Infrastructure of Play : Building the Tourist City 9781315699585, 9780765609557

Citation preview

The Infrastructure of Play

Cities and Contemporary Society Series Editors: Richard D. Bingham and Larry C. Ledebur, Cleveland State University Sponsored by The Urban Center, Levin College of Urban Affairs Cleveland State University This new series focuses on key topics and emerging trends in urban policy. Each volume is specially prepared for academic use, as well as for specialists in the field. SUBURBAN SPRAWL Private Decisions and Public Policy Wim Wielllel and Joseph J Persky, Editors THE INFRASTRUCTURE OF PLAY Building the Tourist City Dennis R. Judd, Editor

The Infrastructure of Play Building the Tourist City Dennis R. Judd editor

~l Routledge ~~

Taylor&Francis Group

LONDON AND NEW YORK

First published 2003 by M.E. Sharpe Published 2015 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue. New York, NY 10017, USA

Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © 2003 Taylor & Francis. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notices No responsibility is assumed by the publisher for any injury andlor damage to persons or property as a matter of products liability, negligence or otherwise, or from any use of operation of any methods, products, instructions or ideas contained in the material herein. Practitioners and researchers must always rely on their own experience and knowledge in evaluating and using any information, methods, compounds, or experiments described herein. In using such information or methods they should be mindful of their own safety and the safety of others, including parties for whom they have a professional responsibility. Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data

The infrastructure of play: building the tourist city / edited by Dennis R. Judd. p. cm. - (Cities and contemporary society) Includes bibliographical references and index. ISBN 0-7656-0955-X (hc. : alk. paper) ISBN 0-7656-0956-8 (pbk. : alk. paper) I. Tourism and city planning-North America-Case studies. 2. Urban renewalNorth America-Case studies. 3. Infrastructure (Economics)-North America-Case studies. 4. City promotion-North America-Case studies. 5. Tourism and city planning-Europe-Case studies. I. Title: Building the tourist city. H. Judd, Dennis R. III Series. HTl69.N68 1542002 307.3' 41 6'097-dc2 I 2002030699 ISBN 13: 9780765609564 (Pbk) ISBN 13: 9780765609557 (hbk)

Contents

List of Tables and Illustrations Preface 1.

Building the Tourist City: Editor's Introduction Dennis R. Judd

VB

xi

3

Part I. An Era of City-Building

2. Urban Tourism and the Privatizing Discourses of Public Infrastructure David C. Perry

19

3. Tourism and Entertainment as Local Economic Development: A National Survey Dennis R. Judd, William Winter, William R. Barnes, Emily Stern

50

Part 11. Building a Tourist Space

4. Building the Infrastructure of Urban Tourism: The Case of St. Louis David Laslo, Claude Louishomme, Donald Phares, Dennis R. Judd

77

5. Indianapolis, a Sports Strategy, and the Redefinition of Downtown Redevelopment Mark S. Rosentraub

104

6. If We Build It, They Will Come! Tourism-Based Economic Development in Baltimore Donald F. Norris

125 v

vi

CONTENTS

7. From Waterhole to World City: Place-Luck and Public Agendas in Denver Susan E. Clarke and Martin Saiz

168

8. Tourism and Strategic Competitiveness: Infrastructure Development in Mexico City Daniel Hiernaux-Nicolas

202

Part Ill. Restructuring the Urban Environment 9. The Political Economy of Tourism Development in the San Diego-Tijuana Trans-Frontier Metropolis Lawrence A. Herzog

215

10. Tourism Infrastructure and Urban Redevelopment in Montreal Marc V. Levine

245

11. Tourism Infrastructure of a Postindustrial City: A Case Study of Vancouver, British Columbia Alan Artibise and John Meligrana

271

12. The Infrastructure of Urban Tourism: A European Model? A Comparative Analysis of Mega-Projects in Four Eurocities Leo van den Berg, Jan van der Borg, Antonio Paolo Russo

296

About the Editor and Contributors Index

321 327

List of Tables and Illustrations

Tables

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 4.1 4.2 4.3

Number of Cities Reporting Facilities Existing or Being Developed Number of Central Cities Reporting Facilities Existing or Being Developed Within the City Number of Nonmetropolitan Jurisdictions Reporting Facilities Existing or Being Developed Within the City Most Important Economic Sectors in Respondent Cities Most Important Economic Sectors Based on Type of City Top Contributing Tourist Facilities for ... Facilities Not Currently in Respondent Cities That Could Produce the Greatest Benefit Justifications Used in Promoting Tourism-Related Projects Negative Consequences of Tourism/Entertainment Sector Importance of Sources of Information for New Ideas on Tourism Initiatives Involvement of Local Actors in the Public Debate Over Tourism Initiatives Importance of Commonly Used Methods of Public Financial Support Presence of ... City of St. Louis Percent Change in Employment by Economic Sector, 1951-1997 Average Annual Population Growth Rates, Data on MS A, St. Louis and USA, 1950-1999 Summary of Development Cost and Public Assistance of St. Louis Urban Tourism Infrastructure

56 59 59 61 62 64 65 67 67 67 69 71 71 78 80 80

vii

viii

LIST OF ILLUSTRATIONS

5.1 5.2 5.3 6.1 6.2 6.3 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 10.1 11.1 12.1

Population Changes in Indianapolis, Marion County, and the Region Projects and Sources of Funds for Downtown Development in Indianapolis, 1974-2000 Household Wealth by Region, 1996 Tourist-Oriented Facilities in Baltimore's Inner Harbor Area Visitors to Baltimore, 1992 to 1998 Baltimore City and CBD Property Tax Revenues, 1976-1986 Population Change, San Diego and Tijuana, 1970-2000 Employment by Economic Sectors, San Diego, 1990, 1995 Employment by Sector, Tijuana, 1987 Spatial Dynamics of Tourism: San Diego Spatial Dynamics of Tourism: Tijuana @frastructure Projects: San Diego-Tijuana Tijuana-Ensenada Corridor Tourism Statistics Recent/Planned Hotel/Resort Mega-Projects: Northern Baja California Coast An Inventory of Tourism Infrastructure in Montreal Tourism Infrastructure in the Greater Vancouver Area: A Selected Inventory at Different Scales Diversity of Redevelopment Approaches

107 110 121 132 147 153 220 220 220 224 225 228 233 234 254 276 310

Maps

4.1 6.1 6.2 8.1 11.1 11.2

Downtown St. Louis Baltimore City Baltimore's Inner Harbor Urban Structure and Tourism in Mexico City The Greater Vancouver Area Selected Tourist Facilities and Neighborhoods in the City of Vancouver

81 127 145 205 274 275

Figure

12.1 Framework of Analysis

309

Photos

6.1 Baltimore's CBD and Inner Harbor, 1960 6.2 Baltimore's Inner Harbor, 1967 6.3 Baltimore's Inner Harbor, October 2000 (as seen from the Marina)

129 130 131

LIST OF ILLUSTRATIONS

6.4 Baltimore's Inner Harbor, October 2000 (as seen from Federal Hill) 11.1 Aerial View of Vancouver's Burrard Peninsula 11.2 Proposed Redevelopment of Vancouver's Cruise Ship Port

ix

131 279 290

Boxes

12.1 Birmingham, Part 1 12.2 Rotterdam, Part 1 12.3 Amsterdam, Part 1 12.4 Lisbon, Part 1 12.5 Rotterdam, Part 2 12.6 Amsterdam, Part 2 12.7 Birmingham, Part 2 12.8 Lisbon, Part 2 12.9 Birmingham, Part 3 12.10 Rotterdam, Part 3

299 300 301 302 303 304 305 306 307 308

Thispageintentionally leftblank This

page

intentionally

left

blank

Preface

This book is the product of a conference sponsored by the North American Institute for Comparative Urban Research (NAMICUR) of the Public Policy Research Center, University of Missouri-St. Louis. More than twenty participants convened in Barcelona, Spain, on January 19-20,2000, to present research on the infrastructure of urban tourism in North America and Europe. Assembling the right mix of participants proved to be a daunting task because so little has been written about this infrastructure; indeed, until very recently the study of urban tourism has generally been neglected. Taken together, the case studies in this volume constitute the first comprehensive account of how the physical facilities related to urban tourism have been constructed in recent decades in cities as diverse as Mexico City, Vancouver, St. Louis, and Lisbon. In 1993 Donald Phares, Charles Leven, and Dennis J udd established NAMICUR with the mission of organizing conferences on important issues affecting cities. The idea for NAMICUR originally was inspired by Leo van den Berg, the director of the European Institute for Comparative Urban Research (EURICUR) located at Erasmus University in Rotterdam, the Netherlands. In April 1994 the organizers traveled to Rotterdam to attend a EURICUR conference on Urban Tourism and City Trips, which brought together representatives from several European cities to discuss the role of tourism in revitalizing urban economies. Borrowing on the lessons learned at that conference, the NAMICUR founders subsequently convened conferences-in 1994 in St. Louis, Metropolitan Governance Without Metropolitan Government, and in 1995 in Vancouver, British Columbia, Urban Regions in a Global Economy. The Barcelona conference, therefore, borrowed on some of the earlier networking among an established group of scholars. The cities represented in this volume are located in Canada, the United States, and Mexico. As we discovered through the case studies, there is no singular North American model, and even within the United States, cities xi

xii

PREFACE

have taken different paths. Nevertheless, a pattern does emerge. In an attempt to rebuild the urban core, older U.S. cities have tended to construct a standardized set of facilities such as sports stadiums, convention centers, festival malls, performing arts centers, and other cultural facilities. Outside the United States, however, the approach to tourism has tended to be incorporated into planning processes that treat tourism as one component of a larger agenda of urban revitalization. A comparative dimension has been incorporated through the inclusion of case studies of Vancouver, Montreal, and Mexico City; in addition, Leo van den Berg, Jan van der Borg, and Antonio Paolo Russo examine tourism development in Amsterdam and Rotterdam, the Netherlands; Birmingham in the United Kingdom; and Lisbon, Portugal. Though very different from one another, these cities have all implemented what the authors call the "European model" of tourism development, which emphasizes the quality of life and culture of cities, rather than the construction of a specialized tourism sector. Interestingly, the European model reflects the experience in Mexico City and in the two Canadian cities. In actuality, the style of tourism development that has characterized older industrial cities in the United States, in which specialized tourism facilities have often been built close to one another, may constitute only one particular type of tourism development, even in the United States. More studies will be required to resolve this question. I want to thank Marisol Garcfa and Nuria Claver and the University of Barcelona for hosting the conference in Barcelona. I also wish to acknowledge the important support provided by Alan Artibise, who was director of the Public Policy Research Center during the time this book was being developed. I am grateful to Richard Bingham, the editor for the Cities and Contemporary Society series, for taking an early interest in this project, and to Harry Briggs, Executive Editor at M.E. Sharpe, who provided support and guidance. And I want to express my very sincere thanks to my two graduate students, Rodrigo Salcedo and Daniel Bliss, whose sharp eyes and skills with computers helped make this a better book.

The Infrastructure of Play

Thispageintentionally leftblank This

page

intentionally

left

blank

1 DENNIS

R.

JUDD

Building the Tourist City: Editor's Introduction

A century ago, cities on both sides of the Atlantic were engaged in a decadeslong undertaking to convert the industrial cities into livable, humane environments. By any standard, the scope ofthe reconstruction was breathtaking. Miles of underground pipes were laid to deliver water and to remove sewage. Streets were paved and then redesigned for the car and the truck. Rails and overhead wires, bridges and tunnels, and in some cities subway systems became the forerunners to integrated transportation systems. Within a few decades monumental public-works projects had transformed the built environments of cities in North America and Europe. l More recently, a new round of infrastructure development has transformed the cities. Cities all over the world have entered into a vigorous international competition for tourists, and the terms of this competition require cities not only to market themselves, but also to provide a constantly improving level of facilities, amenities, and services. 2 In the United States, state and local government spent more than $2 billion annually on sports arenas and convention centers by the mid-1990s, and cities also invested in festival malls, urban entertainment districts, waterfront areas, and parks. 3 Reconstruction on such a scale has required an enormous commitment of political and fiscal capital. A recent national survey reported in chapter 3 of this volume confirms that cities all over the United States, of all sizes and within and outside of metropolitan areas, have made the promotion of tourism a high priority. Sixty-three percent of the central cities that responded to the survey had built or were planning to build convention centers; two-thirds had undertaken to build sports stadiums, 65 percent had built or were developing a festival/retail mall, and much higher percentages had developed a cultural district, entertainment/restaurant district, farmer's market, performing arts center, and a historic district or site (see Table 3.2, chapter 3). It is 3

4

BUILDING THE TOURIST CITY

not difficult to discern the motivation for all this activity. Survey respondents from all the cities listed tourism/entertainment as among the three "most important" sectors for the future of their local economies, and those representing the central cities mentioned it more often than any other (see Table 3.5, chapter 3). Motivated by the idea that tourism is an industry without smokestacks, cities have poured their energies into building a tourism/ entertainment infrastructure. In addition, airports, highways, roads, bridges, mass-transit systems, security, street lighting, beautification programsthese and other amenities and services have been built to accommodate larger tourist flows. The cost of supporting the infrastructure and amenities of tourism can, and often does, absorb most of a city's public development resources. 4 As David Perry shows in chapter 2 of this volume, the scale of urban infrastructure investment of all kinds is a worldwide phenomenon. To mobilize the vast resources necessary to meet the needs of urban populations, governments have resorted to public-private arrangements that enlist the private sector in financing and managing essential infrastructure. These arrangements are especially pervasive in the construction of tourism facilities: almost everywhere, sports arenas and festival malls, for example, are financed substantially with public money but run as fully privatized facilities. The global spread of such practices under the aegis of neoliberal market ideology makes the V.S. case less unique than some might suppose, and it ought to serve as a reminder that the physical reconstruction of urban space is bringing about fundamental political changes wherever it is occurring. Despite the historic transformations wrought by the latest era of citybuilding, little scholarly attention has been devoted to the infrastructure of urban tourism. Most of what we know about the physical facilities built to house tourism and entertainment can be gleaned from a literature that addresses other issues. In North America, for instance, a substantial literature has developed concerning the politics of professional sports, though not much of it deals with the building of sports stadiums. Bernard Frieden and Lynn Sagalyn's Downtown Inc., 5 though published in 1989, is still the only book-length treatment of the urban tourism/entertainment complex in V.S. cities, but because they were primarily interested in analyzing the "corporate-centered" strategy of downtown development, they focus principally upon downtown office-building and festival malls. In his engaging book, John Hannigan 6 discusses festival malls and entertainment districts, but he focuses upon the social and cultural consequences of turning cities into Disneyfied environments; the physical infrastructure that makes this possible appears mainly as a stage set for his account. And though the literature on urban tourism in Europe is more robust, it has addressed the

INTRODUCTION

5

social and cultural features rather than the physical reconstruction of urban landscapes. 7 The case studies in this volume report on the building of the tourism infrastructure in eight cities in Canada, the United States, and Mexico, and a concluding chapter comments on the "European model" of tourism development. We do not attempt to make generalizations from these case studies to all cities, though we do believe that the strategies for developing a tourism infrastructure described in these cases are widely employed. We have discovered two primary differences in our cases. Some cities have focused their energies on constructing a well-defined tourist space as a means of reclaiming the downtown. The five case studies composing part Il-St. Louis, Indianapolis, Baltimore, Denver, and Mexico City-have all attempted to revitalize their downtowns by clustering tourism facilities (though, as we shall see, St. Louis failed in this effort). The four chapters that make up part Ill-the San Diego-Tijuana corridor, Montreal, Vancouver, and a chapter that studies four European cities-have defined the infrastructure of tourism much more broadly; in all the cases, it has been put in the service of large-scale attempts to restructure the urban environment. In the case of the San Diego-Tijuana corridor, an infrastructure is being planned that is intended to create an integrated regional tourist economy. In the other cities, the infrastructure and amenities of tourism are not treated as objects of development separate from a more inclusive vision of economic and social redevelopment. A brief discussion of these contrasting strategies may point the way to an understanding of how the infrastructure of tourism is transforming the physical, social, and political landscape of cities. Building Tourist Spaces

Judd and Fainstein have identified three basic types of tourist cities: resort cities "built expressly for consumption by visitors," tourist-historic cities that "lay claim to a historic and cultural identity," and converted cities, places of production that have had to carve out a tourist space amidst an otherwise hostile environment for visitors. 8 The three types of cities have built spaces expressly for tourists, but converted cities are an especially interesting case because they have had to retrofit their built environments on a massive scale involving a complex mixture of destruction, preservation, and reconstruction. In the United States, the urban renewal programs of the 1950s and 1960s financed the clearance of massive quantities of dilapidated real estate. Though often judged a failure at the time, urban renewal clearance eventually facilitated the reconstruction of downtown business districts and paved the way for later development of all kinds, including tourism. 9

6

BUILDING THE TOURIST CITY

Like the downtown office complex, tourism has frequently developed as islands of renewal in seas of decay. The strategy of carving out sharply demarcated and defended zones for middle-class consumers of entertainment and leisure came naturally to older cities beset by problems of crime, poverty, and physical dereliction. Creating a "tourist bubble"lO was temptingsome might say necessary-as a way not only of securing a space for development, but for achieving an efficient application of scarce resources. In a hostile environment, zones of demarcation can solve seemingly insurmountable problems of image and social control. Tourists who visit converted cities are unlikely to see the city of decline at all, except on their way from an airport. For tourists, the city can be reduced to a simulacrum, a setpiece representing the city in its entirety. 11 Thus, reduced to HarborPlace or the Renaissance Center and Greektown, both Baltimore and Detroit can be presented as gleaming new places to play. Cities in the United States have confronted a similar problem in the past and reached a similar solution. The City Beautiful movement was inspired by the idea that the civic life of cities could be energized by the construction of monumental buildings, parks, and public spaces set aside for the middle classes. 12 As Catherine Cocks has pointed out, these spaces became the material basis for a new image of the reborn city; Through guidebooks, urban sketches, drawings, and photographs, visitors began to be "coached" about what to look for, and cities began to be defined by what visitors saw and wanted to see. The representations and the physical spaces both "played a key role in both making cities appealing to tourists and conveying a sense of social unity." 13 World's fairs and exhibitions embellished the habit of seeing cities as stylized urban images. This began with America's first world's fair, New York in 1853, which emulated London's Crystal Palace of two years earlier. These fairs yielded up images of cities as grand neoclassical architecture and orderly, planned environments, an impression amplified in the 1893 Columbian Exposition in Chicago. As one visitor observed, "[T]he Fair is a world ... in which ugliness and useless[ness] have been extirpated, and the beautiful and useful alone admitted." 14 Guidebooks, urban sketches, and drawings exorcised the bad and re-created the city as a place of social harmony and physical beauty. Tour operators translated such descriptions into physical reality by providing tourists with rides on fixed itineraries, which reduced the cities they saw to an assemblage of monuments and sites. These guided tours took the visitor to historic and aesthetic features of cities and eliminated the riffraff and their neighborhoods. The tourist experience on mass transit and guided tours reduced the city to a panorama of sights and sites; the "passing city" could be seen in a "spectatorial, fascinated manner": according to a fictional character in William

INTRODUCTION

7

Dean Howells' novel A Hazard of New Fortunes, from such a perspective New York "was better than the theatre."15 If sign-posted and thus rendered nonthreatening, even immigrant communities could be made into objects of middle-class titillation. By the 1920s no tourist would think of visiting San Francisco without experiencing the sites, sounds, and smells of Chinatown, which was described in one guidebook as "a panopticon of peep shOWS."16 For visitors to New York, Harlem offered a similar kind of exotic experience (a role it has again assumed for some tourists today). 17 A few decades later, a similar process of image-making and spatial demarcation unfolded. In response to the economic disaster facing most older cities because of deindustrialization and the withdrawal of federal dollars, a generation of what Jon Teaford has called "the Messiah mayors" burst onto the scene in the I 980s. 18 They faced the daunting task of reversing the nearly universal narrative of urban decline that had become fixed in the public's imagination. 19 A nightly local news dramaturgy composed of lurid stories of murder, mayhem, gangs, and drugs in the inner city polished the bad apple to a high sheen. A counternarrative of urban renaissance was badly needed. Cities took a page from the politicians' playbook and began to market themselves. One of the earliest campaigns was undertaken by New York State in 1977, when the state government increased its tourism budget from $200,000 to $4.3 million to fund the "I Love New York" advertising campaign. 2o Since then, cities have promoted themselves in print, on television, and on the Internet. New Orleans, for instance, launched a campaign in such up-scale magazines as Harper's and the New Yorker, quoting famous people saying things like, "Life is something to be spent, not to be saved" (D.H. Lawrence), "If music be the food of love, play on" (Shakespeare); "A beautiful lady is an accident. A beautiful old lady is a work of art."21 A burnished image was worthless unless the city came to reflect it in some essential respects. By building demarcated and defended tourist spaces, cities could hide the sordid and unsightly aspects of local urban life. Domed stadiums, festival malls, and convention centers provided perfect enclosure and control. Pedestrian malls, redeveloped waterfronts, entertainment districts, and parks are less encompassing environments, but they also can be reclaimed through intensive policing and surveillance. 22 For troubled cities, such strategies invariably constituted the opening gambit in revitalizing the downtown and creating a tourist presence. As the infrastructure of tourism created larger and more integrated spaces, many of these cities have entered a middle game in which the spaces of tourism have begun to merge with surrounding areas, a tendency also facilitated by the falling crime rates of the 1990s. Tourist facilities often coexist side by side with downtown business districts, local small businesses and shops, housing, and a variety of public

8

BUILDING THE TOURIST CITY

institutions. If they are so inclined, tourists may segue from one enclave to another and slip in and out of areas not set aside for tourists. But even in these instances, the spaces inhabited by tourists tend to be mere fragments of the city that surrounds them. It is doubtful that most civic leaders of troubled cities are inclined to judge the success of their venture into tourism by what happens to the city beyond the enclaves. As the case studies in part II reveal, the infrastructure of tourism can revitalize moribund downtowns when no other strategies seem available. The infrastructure that makes this possible is expensive, and the overall benefits to the city are often ambiguous or impossible to measure. But the impact on the downtown and its immediate environment may be, and often is, dramatic. This observation holds true even in St. Louis, where tourism has failed to revive street life and downtown culture. Except for a recently opened federal courthouse, if it were not for the tourism facilities, little new construction of any kind would have been undertaken in downtown St. Louis since the late 1980s. As described by David Laslo and his coauthors in chapter 4, the considerable fiscal and political capital committed over the years to tourism/entertainment projects in St. Louis has not spurred downtown development. Several of the individual projects have succeeded on their own terms, but they failed to create an integrated urban space necessary for generating a vital street life. A major-league baseball stadium anchors the south side of the business district, a football stadium and convention center anchor the north, and an entertainment district is located nearby on the banks of the Mississippi River. A riverboat casino anchored at the river's edge draws a steady stream of gamblers, but there appears to be no spillover to nearby businesses. Several blocks to the west of the downtown area, a festival mall and a hockey/events arena are often busy. But these facilities are too far from one another to achieve spatial integrity. Instead, they remain as self-contained structures largely divorced from the streets around them. In St. Louis, any new project must come with parking nearby-preferably in a parking garage. The presence of streets that are empty after dark helped doom St. Louis Centre, a mall built to compete directly with suburban malls in its ambiance and retail composition. St. Louis's failure to regenerate its downtown through tourism projects may be explained by the fact that the individual projects were supported by separate groups, each far more interested in its particular undertaking than in regenerating the downtown. Mayors and the city's board of aldermen were involved in the sense that each project required public approval and public subsidies or powers, but the city was driven by a sense of urgency that precluded strategic planning. Any plausible proposal from private investors was

INTRODUCTION

9

welcomed. Though a project-by-project approach eventually resulted in a considerable infrastructure, a coherent vision of development could not thrive. The Indianapolis, Baltimore, and Denver case studies, by contrast, showed what can be achieved when consistent public leadership leads the way. As in St. Louis, civic elites in Indianapolis were driven by a sense of crisis to pursue the development of sports, entertainment, and tourism. Indianapolis had been losing population and jobs to the suburbs for years. In Mark Rosentraub's account, three successive strategies were undertaken to revive the fortunes of the city. In 1969, in a reform much heralded at the time, the city consolidated with Marion County. Though this helped to resolve some of the city's fiscal problems, it did nothing to restore the city's image or its importance to the region. Consequently, civic elites launched an effort to pull suburbanites into the city by building a regional arts district four miles from the downtown. The result was very much like the experience in St. Louis: the museums and other facilities prospered, but the core continued to wither. Finally, it became obvious to the city's leadership that only a strategy focused narrowly on the downtown could succeed. In a period spanning about twenty years, Indianapolis has built an extraordinary tourism complex focused on sports, sports medicine, and sports administration. Sports facilities of all kinds cluster in and around the downtown area, as do office complexes housing sports organizations and medical facilities. Building on this scale has been made possible through a complex mixture of tax abatements, hospitality taxes and new taxes on food and beverages, and bonds issued through tax increment districts and a sports tax district. Though the sports strategy has revitalized downtown Indianapolis, according to Rosentraub the legacy is ambiguous because it has come at the cost of local democracy-few of the initiatives have required voter approval. Donald Norris notes in his study of Baltimore that over the years the Baltimore Renaissance has received a great deal of national attention; frequently it has been cited as the most successful example of downtown revival in the nation. By the 1970s, after decades of population and job losses to the suburbs, Baltimore had become a classic story of urban decline. In 1976, the arrival of the Tall Ships celebrating the nation's bicentennial called attention to the harbor as a potential draw for tourists. Over the next twenty-five years the derelict wharves and warehouses were replaced by the $2 billion of investment known as the Inner Harbor project. An area that was once deserted had become crowded with between six million and seven million visitors a year. Without doubt the success of the Inner Harbor development can be traced to the spatial integration of facilities; within a few blocks tourists can leave their hotel (or parking lot) and wander across marble and stone plazas,

10

BUILDING THE TOURIST CITY

gaze at the harbor, visit the Rouse mall, a fish market, the National Aquarium, a science center, and the Baltimore convention center. Interestingly, according to Norris, the one aspect of Baltimore's strategy that cannot be counted a success is its investment in sports stadiums, which contribute nothing to downtown Baltimore or to the areas that surround them. We can surmise that Indianapolis has had a different experience because it concentrated its sports strategy downtown and because stadiums have comprised only one element of a more complex assemblage of tourism facilities. Like Indianapolis and Baltimore, Denver has transformed its downtown by constructing a cluster of facilities devoted to tourism and entertainment. In chapter 7, Susan Clarke and Martin Saiz emphasize the pivotal importance of mayoral leadership in bringing vision and coherence to Denver's reconstruction. Federico Pefia, who first won office in 1983, was able to bring neighborhood leaders into a coalition that pursued twin goals of neighborhood and downtown development, and subsequent mayors have governed in a similar style. In addition to the opening of an international airport capable of managing tourist flows far into the future, Denver undertook the Central Platte Valley redevelopment project by creating parks and green spaces and walking and bicycle paths for miles along the Platte River. It also built and then expanded a convention center and three new stadiums for professional baseball, football, and basketball. These projects have breathed new life into a downtown that was in danger of being eclipsed by a metropolitan area that is sprawling along the front range of the Rocky Mountains. Clarke and Saiz propose that Denver's reconstruction was made possible when Pefia constructed a symbolic regime that projected a vision of Denver as a world-class city. Denver's strategy was guided both by planning and participation, and though the process was contentious at times, both elements made strong leadership possible. In less than two decades the Platte River valley, which is located on the edge of downtown, was transformed from a maze of streets and roads, bridges, and empty, weed-filled lots to a parklike environment filled with tourists and locals. The new baseball stadium, Coors Field, which anchored one end of a warehouse district on the south of the downtown, spearheaded residential development. The new football stadium built for the Broncos initially encountered opposition; however, when the team won the Super Bowl two years in a row, the stadium not only got the boost it needed but it also fostered a sense of community that has helped to sustain further revitalization efforts. The case of Mexico City demonstrates that the strategy of securing the downtown core is not peculiar to cities in the United States; instead, it may be quite typical for cities beset by physical dilapidation and social problems. Mexico City's tourism strategy relies upon the reconstruction of its Historical

INTRODUCTION

11

Center, with its layers of architectural heritage dating back to pre-Aztec civilizations. But Daniel Hiernaux-Nicholas's analysis shows that this strategy has emerged only in the last few years. Unlike Canada and the United States, Mexico's tourism policy has, in the past, been guided by the strong hand of the central government. In the 1960s the Mexican government established two official institutions to plan and finance the development of tourism. Until the mid-1980s, tourism policy in Mexico emphasized resort developments on both coasts, with an emphasis on new resorts at Cancun and Puerto Vallarta. 23 In 1985 the government began to pay more attention to developing historical centers such as Queretaro, Oaxaca, and Zacatecas. New policies aimed toward the redevelopment of tourism in Mexico City were finally institutionalized in 1998, with the creation of a ministry for tourism for the Federal District encompassing Mexico City. As Hiernaux-Nicolas points out in chapter 8, the intent of Mexico's City's policies is to renovate and reclaim the city's Historic Center, where its cultural and architectural assets are located. But in Mexico City's redevelopment, in contrast to the United States, there are no stadiums, convention center, or festival mall. Instead, the intent is to mingle cultural activities, shopping, and residence in a coherent space that will become the focal point for a revitalized city. The social divisions and social problems of Mexico City virtually dictate an enclavic strategy of development, even if the development is not aimed at tourism alone. Restructuring the Urban Environment Many cities have implemented aggressive policies to compete for tourism as a remedy for local economic crisis. Especially in the United States, this crisis took a particular form: the migration of people and jobs to the suburbs and a consequence fiscal crisis for the city. Cities became hostile environments for visitors, with dilapidated, deserted business districts often surrounded by high-crime slums. Outside of the United States, a similar decline of the center also sometimes occurred, though the particular causes of the decline may have differed. 24 The building of an infrastructure for tourism often translated into the construction of a defended space that tourists could safely inhabit, a strategy described in the case studies in part 11. But all sorts of cities compete for tourism, including those that have remained economically healthy and vibrant at the core. In such contexts, the infrastructure of tourism may become merged into the local spatial and cultural fabric rather than clustered into well-defined tourism zones. The cases making up Part III illustrate this type of strategy. Lawrence Herzog describes the San Diego-Tijuana international border

12

BUILDING THE TOURIST CITY

area as "a sprawling transfrontier" of 5 million people that has been showing the effects of globalized economic forces. Among these is tourism, which is exerting profound effects. According to Herzog, regional leaders regard tourism as "one of the linchpins of economic integration" across the border. Tourism is so crucial to the regional economy that it may be called a "tourism metropolis"; thus, regional development is dependent upon an infrastructure that can mitigate some of the social and environmental effects of tourism. Herzog shows that the economies of San Diego-Tijuana have had deep roots in tourism ever since the 1920s. Each city developed its separate tourism base, though, in fact, they were highly interdependent. The globalization of finance and real estate markets and the consequent commodification of places inhabited by tourists have brought environmental and social issues to the forefront. Left unplanned, tourism also imposes a variety of environmental costs. Rising U.S. investment in the land markets of Mexican coastal cities, the spread of resorts, and the building of shopping and restaurant clusters and themed environments in local communities have created selfcontained homogenous enclaves that fragment the metropolitan region. To better promote tourism, entrepreneurs and regional elites are promoting the construction of a regional infrastructure that facilitates movement across the border. Thus, in the San Diego-Tijuana region, the explicit strategies around tourism involve planning and investment in an infrastructure that is only indirectly related to tourism: the development of better ports of entry, water ports, mass transit, and roads and highways that can efficiently connect discrete tourism enclaves such as the downtown San Diego harbor, beach communities, cities and towns, and resorts. A regional infrastructure will make it possible to tie tourist enclaves together, but will do little to mitigate the damaging effects of those enclaves on local environments. As Marc Levine points out in chapter 10, it is doubtful that many cities in North America have been engaged as energetically or as long to build a tourism infrastructure as has Montreal. The governments of Canada, Quebec, and Montreal have poured $7 billion into the effort to revitalize Montreal's economy through tourism. In the first phase, the city hosted Expo 67 (the 1967 World's Fair) and the 1976 Summer Olympics. Since 1983, the city has rebuilt its waterfront and opened a convention center, several sports complexes, museums, entertainment districts, and a casinothe full complement of tourism facilities. In analyzing this prodigious building program, Levine questions whether the effort has returned fiscal dividends to the city and whether the new tourism infrastructure has created a "tourist bubble" in Montreal. The scale of investment has been astonishing. Though originally budgeted for $167 million, in the end Expo 67 cost $432 million, with the events running

INTRODUCTION

13

up a $210 million deficit. But the costs of the Olympic Games were even higher. Though the Olympics were supposed to be supported from revenues generated by the games, by the time they were held they had cost $922 million, and they were rnired in mismanagement and scandal. Expo 67 had bought a huge image boost for the city, but the well-publicized scandal and corruption that accompanied the Olympic Games somewhat compromised the positive international exposure. Following the games, another $537 million was spent on the Olympic installations, most of it on a domed stadium that became the home of the Montreal Expos baseball team. And despite the deficits caused by these huge undertakings, in ensuing years the city has invested heavily in a complex variety of tourist facilities. Levine comes to an ambiguous conclusion about whether this immense investment has paid off. He concludes that it has unquestionably "put Montreal on the international tourist map." And, he states, Montreal's urban economy has been revitalized, though fiscal problems stemming from the huge investments remain. Despite the existence of a standard tourism infrastructure, Levine states emphatically that "there is no tourist bubble in Montreal." In Montreal, the urban core was not the problem; it has always had strong neighborhoods and some affluent communities near the center. High-end shopping, restaurants, concert halls, theaters, and cinemas are located downtown, but not because of the investment in tourism infrastructure. A "tourist space" has grown up within and has become integrated with an already existing "civic space." In chapter 11, Alan Artibise and John Meligrana propose the "the Vancouver model," which is made up of three characteristics: private participation in tourism development with public support, the leveraging of tourist amenities and infrastructure through private-sector developments, and an emphasis on building a "livable" city, with tourism as an indirect product of this goal. Vancouver has been able to treat tourism as a by-product of its pursuit of other, more immediate preoccupations. In recent decades, downtown office expansion has been fueled by Vancouver's integration into the Asian-Pacific economy. Its leaders have, therefore, been focused upon making the city into an international metropolis, which requires it to seek ways to enhance its image and status with the Pacific Rim. At the same time, its development has been tightly integrated into regional planning and cooperation, a process driven by the strong roles played by the governments of Canada and British Columbia; accordingly, tourism planning has been as much focused on the natural resources of the region and on regional development as on the city itself. Vancouver's economic prosperity, its integration into regional planning processes, and its strong local interests in quality-of-life issues have resulted in the view that all tourism development must enhance the overall life of the

14

BUILDING THE TOURIST CITY

city. Developers have been interested in building tourism facilities in the growing core, but to do so they have no choice but to participate in planning processes that stress the provision of key community-based social services, the building of affordable housing, the promotion of art and culture, and the creation of public spaces. In the Vancouver model, tourism development can take place only within a larger concern for creating a livable city. In the concluding chapter to the book, Leo van den Berg and his co-authors find sufficient similarities in the tourism strategies of four European cities-Rotterdam and Amsterdam in the Netherlands; Lisbon, Portugal; and Birmingham, England-to propose "the European model." In their formulation, the essence of the European model of development is an emphasis upon the "harmonious development of the city"; thus, tourism projects are "assessed in terms of displacement of resident-oriented activities, gentrification, and cultural friction." In Europe, land is closely regulated; high priority is placed upon the preservation of buildings and sites. The unique architectural and cultural heritage of urban cores is understood to be the main attraction for visitors; as a consequence, tourism development is aimed at enhancing the unique character of each city. Large-scale developments, such as the dramatic Erasmus Bridge in Rotterdam and the KPN skyscraper that now marks its skyline, are welcomed, but all infrastructure is built within strategic planning processes. Finally, tourism infrastructure is closely coordinated with other types of urban infrastructure and development. Both private capital and participation are actively sought but "harnessed within a 'vision' which takes into consideration the basic requirements of the harmonious growth model." A Tourist Space or a Livable City? Two Strategies of Development The case studies in this volume reveal two principal strategies for building the infrastructure of tourism. Some cities are obliged to create segmented and demarcated spaces for tourism. In American cities, civic elites have used the new infrastructure as a means of reclaiming the urban core. The constellations of facilities that have grown up are similar from city to city because they are aimed at specific components of the tourism and entertainment industry: meetings and conventions, sports, entertainment, and shopping. Few big cities can afford to forgo competition in each of the sectors, though sometimes a city may find a particular niche that gives its development strategy a distinct identity. For example, Indianapolis has succeeded in developing strength in sports, sports medicine, and sports administration, though it has also built the usual facilities making up a complete infrastructure package. Though the facilities tend to be clustered, they mayor may not create a

INTRODUCTION

15

well-defined space. For St. Louis, this has turned out to be a significant handicap because downtown streets are deserted at night. In other contexts where the urban environment is less hostile to tourists, clustering may be less important. In Denver, for example, the different components are not located close to one another; nevertheless, the downtown and nearby neighborhoods have become revitalized. In Mexico City, an enclave is being created, but it is not being developed only, or mainly, for tourists; thus, great emphasis is given to the development of a historical and cultural space, rather than to the construction of particular facilities used by tourists. Various other cities have focused their efforts less on carving out distinct spaces for tourists, and more on the goal of improving the urban environment. Motivated by the understanding that tourism is a permanent and critical component of regional economic growth, leaders in the San Diego-Tijuana transfrontier are attempting to develop a regional infrastructure that will direct and mediate the impacts of tourist flows. Despite their marked differences, Vancouver and Montreal both have experienced the rapid growth of a tourism sector that has developed within more general processes of urban development. Both Vancouver and the European cities have proceeded on the assumption that improving the quality of life makes them attractive to visitors. A more explicit comparative approach based upon a larger number of case studies would allow us to reach firmer conclusions about how representative our case studies may be. But whatever the particular strategies employed, all cities have been transformed by the growth of tourism and entertainment in recent decades, and it is clear that this era of city-building is far from over. As it proceeds, one can hope that the infrastructure and spaces of the new cities will improve them as much as the previous era of city-building did.

Notes 1. Jon C. Teaford, The Unheralded Triumph: City Government in America: 18701900 (Baltimore: Johns Hopkins University Press, 1984), chap. 8; Peter Hall, Cities o/Tomorrow (Oxford: Basil Blackwell, 1988). 2. Susan S. Fainstein and Dennis R. Judd, "Global Forces, Local Strategies, and Urban Tourism," in Dennis R. Judd and Susan S. Fainstein, eds., The Tourist City (New Haven, CT: Yale University Press, 1999), 1-20. 3. Peter Eisenger, "The Politics of Bread and Circuses," Urban Affairs Review 35, no. 3 (January 2000): 316-333. 4. Ibid. 5. Bemard J. Frieden and Lynn B. Sagalyn, Downtown Inc.: How America Builds Cities (Cambridge, MA: MIT Press, 1989). 6. John Hannigan, Fantasy City: Pleasure and Profit in the Postmodern Metropolis (London and New York: Routledge, 1998). 7. The work on the cultural nature and impacts of tourism is voluminous and too extensive to cite here. Leading works are Dean MacCannell, The Tourist: A New

16

BUILDING THE TOURIST CITY

Theory of the Leisure Class (Berkeley: University of California Press, 1976); John Urry, The Tourist Gaze: Leisure and Travel in Contemporary Societies (London: Sage, 1990); Chris Rojek and John Urry, eds., Touring Cultures: Transformations of Travel and Theory (London and New York: Routledge, 1997); and Tim Edensor, Tourists at the Taj: Peformance and Meaning at a Symbolic Site (New York and London: Routledge, 1998). A number of planning and consulting studies have been produced that examine the infrastructure of tourism in Europe; see especially studies by the European Institute for Comparative Urban Research, Erasmus University, Rotterdam, the Netherlands; and the International Center of Studies on the Tourist Economy, University of Venice. 8. Susan S. Fainstein and Dennis R. Judd, "Cities as Places to Play," in Judd and Fainstein, eds., The Tourist City (New Haven, CT: Yale University Press, 1999),261-272. 9. Susan S. Fainstein, Norman I. Fainstein, Richard C. Hill, Dennis R. Judd, and Michael Peter Smith, Restructuring the City: The Political Economy of Urban Redevelopment, rev. ed. (New York: Longman, 1986). 10. Dennis R. Judd, "Constructing the Tourist Bubble," in Judd and Fainstein, eds., The Tourist City, 35-53. 11. M. Christine Boyer, "Cities for Sale: Merchandising History at South Street Seaport," in Michael Sorkin, ed., Variations on a Theme Park: The New American City and the End of Public Space (New York: Hill and Wang, 1992), 181-204. 12. Catherine Cocks, Doing the Town: The Rise of Urban Tourism in the United States, 1850-1915 (Berkeley: University of California Press, 2001), 130. 13. Ibid., 144. 14. Ibid., 128. 15. Ibid., 164. 16. Ibid., 190. 17. Lily M. Hoffman, "Tourism and the Revitalization of Harlem," in Research in Urban Sociology," vo!. 5, Ray Hutchison, ed. (Greenwich, CT: JAI, 1999),297-223. 18. Jon C. Teaford, The Rough Road to Renaissance: Urban Revitalization in America: 1940-1985 (Baltimore, MD: Johns Hopkins University Press, 1990). 19. Robert A. Beauregard, Voices of Decline: The Postwar Fate of U.S. Cities (New York: Blackwell, 1993). 20. Briavel Holcomb, "Marketing Cities for Tourism," in Judd and Fainstein, eds., The Tourist City, 61-62. 21. Quoted in ibid., p. 62. 22. Mike Davis, "Fortress Los Angeles: The Militarization of Urban Space," in Michael Sorkin, ed., Variations on a Theme Park: The New American City and the End of Public Space (New York: Hill and Wang, 1992), 154-180; Mike Davis, City of Quartz: Excavating the Future in Los Angeles (New York: Vintage Books, 1992); Judd, "Constructing the Tourist Bubble." 23. For a detailed analysis of these policies and of the Cancun development, see Daniel Hiemaux-Nicolas, "Cancun Bliss," in Judd and Fainstein, eds., The Tourist City. 24. For studies that reveal the different processes at work, see Michael Parkinson, Bemard Foley, and Dennis Judd, eds., Regenerating the Cities: The UK Crisis and the US Experience (Manchester, UK: Manchester University Press, 1988), and Dennis Judd and Michael Parkinson, eds., Leadership and Urban Regeneration: Cities in North America and Europe (Thousand Oaks, CA: Sage, 1990).

Part I

An Era of City-Building

Thispageintentionally leftblank This

page

intentionally

left

blank

2 DAVID

C.

PERRY

Urban Tourism and the Privatizing Discourses of Public Infrastructure

Physical infrastructure is central to the city-building process and always has been. However, the term "infrastructure," as it is employed today, is relatively new-a conception of the past few decades. l Equally new during this period is an emphasis on urban tourism-the development of what Susan Fainstein and Dennis Judd call the "tourist city.,,2 The building of tourist cities is "translated into infrastructure development-hotel building, improved transportation, the renovation of historic facades, convention centers, sports venues and other entertainment centers."3 Does the encompassing notion of "infrastructure" capture a transforming notion of what is meant by public works? And does the infrastructure of the city of heightened tourism herald a new era of "city-building?,,4 The short answers to these questions suggest the argument of this chapter: first, the definition of what we mean by public works, or the physical foundations of social formation, has changed over time, becoming ever more inclusive of private as well as public sources of city-building. This change in the definition of public works is the product of increasingly "privatizing discourses 5 of public infrastructure." While building the infrastructure of the tourist city may not herald a new era of city-building, it is a good example of how these various discourses come together to dominate the logic of development in the tourist city. The presence of the private sector in the building, operation, and maintenance of urban infrastructure is palpable, the product, in the last few decades, of a variety of what I will call here "privatizing discourses" in cities worldwide. The first of these discourses is built around the argument that the state cannot mobilize the resources necessary to meet the mounting infrastructure demands of urban society, thereby requiring the attraction of domestic and international equity capital for private investments in public works. 19

20

AN ERA OF CITY-BUILDING

The second such discourse is concerned with the organization and constitution of government to accommodate new debt structures, create relationships with the capital markets, and regulate public-private infrastructure agreements. A third discourse concerns the "privatization" of essential public infrastructure-referring to a whole host of transfers of public works to the private sector through such arrangements as concessions, contracting out, and private management and control. The participation of the private sector in the provision of physical infrastructure is certainly not a new trend. In fact, many essential public workswater, sewer, electrical energy-began as private goods,6 only to be subsumed by the state as the general social benefits of the good became evident. However, the process of state takeover and provision of new infrastructure was often a slow one. 7 For example, in the United States, although the relationship of the control of disease to water treatment systems was clear by the 1880s, both water and sewage treatment systems were not built and administered by the public sector in most cities for another half century. The state, albeit slowly, would take control of natural monopolies whose distribution of social goods could not be guaranteed by the proprietary interests of individual owners. Other equally important reasons for state takeover of physical infrastructure were the requirements of cost and scale-namely that no individual user of a road or bridge, for example, no matter how useful, could pay for the entire highway or bridge. Therefore, for reasons of social good, cost and scale, physical infrastructure came to be viewed as a "public good""something to be provided and maintained by the state for general use of the population at large."s Ironically, for almost the exact same reasons, a countervailing discourse has recently emerged-arguing that because of the scale and cost of public infrastructure, government, especially urban government, cannot conceive, finance, build, and maintain modern systems of urban infrastructure. Further, this discourse argues that governments have become increasingly inefficient providers of essential public works. Therefore, the conditions of cost, scale, and quality of service delivery are driving a new discourse directed at privatizing urban infrastructure. This approach suggests that issues of cost and quality of services can be met through increased private sector intervention in the finance and operation of urban infrastructure, challenging as well the relationships between market and state and the requirements of efficiency and equity of service delivery.9 Such disparate infrastructure policies are less evidence of the lack of surety over the importance of urban infrastructure lO and more an example of the recursiveness of the "city-building process."ll At the center of the construction and survival of the city is an essential adaptability to changes that the

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

21

very presence of cities "has precipitated and diffused."l2 The very ubiquity of infrastructure in urban life and development suggests a foundational quality that at once implies primacy and belies agreeable definition, much less common policy focus. Indeed, even in economically developed countries, where the traditions and epochal transformations of public works are relatively well established, the varying degrees of urban adaptability and governmental and private negotiation over definition, construction, and management of public works have been uneven and conflictive throughout. In the United States, for example, despite the primacy placed on public infrastructure since the beginning of the republic, there has never been anything even close to a coherent public works policy. And while historians have found a coherence if not a causal relation between the provision of public works and urban development, they have been just as likely to find the "references and perceptions of different actors such as business leaders, politicians, and professionals in a particular city at a particular time to be more important in the city building process than a generalized set of forces that relate to all cities."l3 The forces of infrastructure formation in developing countries are equally particularized. In the urbanizing countries of Asia, for example, the variable legitimacy of regimes of governance and the (in)stability and viability of domestic capital markets are key conditions in the production of public works, even where the promises of development that attend to such infrastructure are undeniable. l4 Given the global diversity and disparity of urban infrastructures, the intent to collapse the general comparative discussion of the present era of public infrastructure into three topics, or "privatizing discourses," is on one level an intellectual conceit, and I certainly do not pretend to offer such a totalizing assessment. On another level, these discourses are being carried on in every city of the world in one way or another. Each city is experiencing the presence of the private sector in the form of the capital markets serving as a source of financing public works. Each urban center is required to provide municipal governments that are responsive to the needs of creditors and investors and to the institutional conditions of international and domestic credit markets-creating structures of fiscal stability and political legitimacy in the developing world and new structures and arrangements of service delivery and financial flexibility in developed countries. Finally, there is increased interest in the pri vatization of public infrastructure services through a host of contract, concession, and ownership arrangements. How these discourses come together in the building of the infrastructure of tourism makes for a fitting final empirical section of this chapter.

22

AN ERA OF CITY-BUILDING

Defining Infrastructure

Before proceeding further, a word is in order on the definition of public infrastructure. 15 Already, I have used the terms urban infrastructure, public infrastructure, public works, physical infrastructure, and infrastructure. Few policy terms have achieved such widespread meaning(s) as the last term "infrastructure. " Early in the twentieth century, infrastructure was essentially a military term used to describe the permanent fixtures of military installations-the base camps and fixed ports that, taken together, formed the functioning systems of warfare. According to historian Bruce Seeley l6 economists first expanded the meaning of infrastructure to include what W.W. Rostow once labeled "social overhead capital.,,17 By this, Rostow and others meant the public capital invested in roads, utility systems, communications and education, health, and other governmental facilities as the foundation for economic development. B ut it was not until the 1980s that "public infrastructure" replaced "public works" as the term most commonly used to describe the physical artifacts, or what Joel Tarr and Gabriel Dupuy have termed the "technological sinews" of contemporary social formations. 18 Until rather recently, the descriptions of infrastructure, whether they be ones describing the uses of public projects l9 or ones assessing conditions of physical decay and fiscal distress 20 in the United States or ones arguing for new patterns of public works investment in Latin America,21 Asia 22 or other sectors of the developing world, all emphasized infrastructure's contribution to urban sufficiency23 and essential "publicness." What separated the notion of "public infrastructure" from earlier terms "internal improvements" and "public works" was its inclusiveness and its emphasis on systems of support. Today the notion of infrastructure has expanded again and has come to include "almost every support system in modern industrial society, public or private. Infrastructure is said to include not only roads and sewers, but national transportation grids, communication systems, media, housing, education, computer networks and fiber-optic 'information superhighways. ",24 Recently, a U.S. commission on infrastructure finance offered a wary note of caution about this latest iteration in our conceptualization of public infrastructure. The federal Commission to Promote Investment in America's Infrastructure found replacement of "public infrastructure" by the term "infrastructure," (sans "public") to be "almost too inclusive"-used to describe "not only public works and facilities, but even personal skills and attitudes."25 The commission argued that this change in the characterization of infrastructure makes definition "no easy task," with increasing amounts of America's infrastructure now described as "largely private

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

23

sector activity, including telecommunications, utilities and certain forms of transportation. "26 In sum, the increasingly generalized and diverse uses of infrastructure ("public," "physical," or "urban") are discursively recasting its meaning in ways that more readily include private as well as public actors-giving new meaning to what is included in urban infrastructure and who controls it.

The RevenuelInvestment Discourse Increasing patterns of economic globalization and migration into cities have been central features of recent geographic and social development. Sometime in the last decade, likely 1996, more than 50 percent of the world's 5.2 billion people could be found living in towns and cities-or in urban environments. 27 Hence the importance of urban infrastructure and the demands such changes are putting upon it; to build, replace, rehabilitate, and expand the features of the built environment are essentia1. 28 In general, it is estimated that the average annual cost of public works to be 3-5 percent of gross national product (GNP), but in developing, highly urbanizing countries such as China, public works expenditures can easily require 9 percent of GNP per year. 29 The poorest, least developed countries will require the greatest infusions of new and rehabilitated infrastructure, often at the greatest costs. In the United States, where public sector spending for public infrastructure overall exceeds $140 billion annually, there is still an estimated shortfall of between $40 and $80 billion in unmet infrastructure needs. But this pales in comparison to China where the needs for power systems alone will exceed $200 billion every year for the next decade. And while it is certainly true, for example, that the most materially productive nations of the world are also the most urban nations, it is also the case that those living in highly urbanized nations, such as Peru and Namibia, can be some of the poorest people in the world. While both Austria and Ecuador each have about 54 percent of their populations living in cities, the GNP per capita of Austria vastly exceeds that of Ecuador. 3o Most of the world's urban popUlation livein rather small or medium-size cities-66 percent of which, the United Nations estimates, are in cities or conurbations of less than a million inhabitants, with many living in smaller centers of under 100,000 and many more living in even smaller centers, which, when linked together, constitute medium-size urban areas. 3 ! For example, the vast majority of those living in the two most populous countries in the world, India and China, live in urban areas of less than a million people. The increasing importance of these intermediate urban areas in the new "urban world" is amplified by the infrastructure they provide: built systems of

24

AN ERA OF CITY-BUILDING

transportation, health, water, and sewage that this truly millennial round of urbanization is quite often poorly positioned to provide. An equally significant global urban pattern is the degree to which people now live in "giant cities."32 In 1990 the United Nations reported 270 cities with over a million in population, which contained one-third of the world's urban population. Of this group, twenty-two cities have between 5 and 8 million residents and twenty cities contain more than 8 million. For example, there were over 20 million people living in Mexico City in 1990, 18 million in Tokyo, between 17 and 18 million in Sao Paulo, and 16 million in the New York City region. 33 These "mega-cities" are spread across the globe, with three in North America (New York, Los Angeles, and Mexico City), three in South America (Rio de Janeiro, Sao Paulo, and Buenos Aries), two in Europe (Paris and Moscow), one in Africa (Cairo), and eleven in southwestern Asia (Delhi, Bombay, Calcutta) and the Pacific Rim (Jakarta, Manila, Shanghai, Tianjin, Beijing, Seoul, Tokyo, and Osaka). These cities face tremendous infrastructural challenges because they are the "viable and stable places (relatively speaking) for social and economic achievement, ... [and] ... contribute disproportionately to national economic growth and social transformation by providing economies of scale and proximity that allow industry and commerce to flourish .... [T]hey offer locations for services and facilities that require large population thresholds and large markets."34 Here many millions of people live in high-density settings that, no matter how difficult the living conditions, still offer better access to services and higher levels of services than can often be found in the rural environment. 35 This means that cities, large and small, represent "the core" of local and global restructuring, not only in the old industrial areas, but most surely in the developing areas as well. Providing and maintaining the infrastructure necessary to sustain and further transform the urban geographies in which economic and social renewal can occur is a task of increasingly monumental proportions. From China to Columbia and Malaysia to Peru and eastern Europe, while investments in urban infrastructure are still provided in the main by the public sector, they represent, together with the recurring maintenance and operating costs, shares of public budgets (national, regional, and local), the magnitude of which many national and local authorities are unable or unwilling to meet. 36 All the while, "sizable chunks of the urban popUlation do not have access to basic infrastructure facilities such as safe water, sanitation and garbage disposal. Between 20 and 60 percent of the urban population residing in Nepal, Bangladesh, Myanmar, Indonesia and Thailand do not have access to safe water ... and at least 50 percent do not have access to safe sanitation."37 Overall, when the urban and rural

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

25

populations of the developing world are taken together, over one billion lack access to clean water and over two billion do not have access to sewer systems or electricity.38 The governmental systems are weak, and the sources of public funding for the construction, operation, and maintenance of such services are highly problematic. "The investment requirements to meet the backlog of urban infrastructure across Asia are so high that normal budgetary allocations are woefully inadequate. Meeting such a backlog will require stimulation of local revenues to finance a cost-effective development of urban infrastructure. At the same time the flow of loan finance has to be increased many times over to meet the demands of the urban infrastructure sector."39 In the face of this increasingly urbanized call on the public realm, there is an equally interesting counterargument to let the private sector do it. Involving the private sector in the financing and management of public works is viewed as the single most important way of handling the land and infrastructure demands of this urban world. "The public sector in most parts of the world is now seen to be largely incapable, on its own, of providing and maintaining major infrastructure at acceptable levels of cost and performance."40 This privatizing discourse of infrastructure finance is viewed as an "investment (risk) discourse" from the point view of the capital markets and as a "debt discourse" from the point of view of the public sector. The position of the World Bank is clearly at the center of this discourse, proclaiming that "governments in developing countries have come to realize that private resources must be mobilized to support the growing demand for infrastructure services."41 Where many countries could once point to the successes of central governments in building, financing, and operating large projects 42-this is no longer the case. The scale of urban public infrastructure demands and the fiscal restraints on national governments are forcing infrastructure policy down to the municipal level. Where municipalities in the past were able to combine their own taxes with central government transfers to build public works, they are just as fiscally burdened as their national governments and are being advised by both the national government and international banks to "forge partnerships with financiers, private operators and constituents. ,,43 Therefore, a major part of the infrastructure discou.rse in developing countries requires the development of municipal credit or bond markets. Surprisingly, developing countries have had more success generating direct private investment in fully privatized public works than they have had in creating the stability of process required of a local municipal bond market. But entities like the World Bank, the International Monetary Fund (IMF), the InterAmerican Development Bank, and the Asian Development Bank are all

26

AN ERA OF CITY-BUILDING

lobbying hard for the creation of such domestic capital entities, with the larger purpose of securing not only long-term market stability but also enhanced governmental legitimacy across regimes. It is argued that without such a municipal credit market, city-building will be stalled in this new urban world, along with economic development and social renewal. The conditions of municipal capital-market formation form the basis for what the private sector advocates claim are the necessary preconditions to urban infrastructure development. Municipal credit markets in the developing world require: (a) Independence from national or sovereign support and, by inference, any contingent liabilities at the national level. What this means is the municipal debt instruments should be priced at market rates, free of the rates of national or central government securities. 44 (b) Transparency of budgetary procedures and management practices to allay the fears of credit raters. Institutional actors in this privatizing discourse on capital markets for public infrastructure, especially those associated with the World Bank, the Asian Development Bank, and the Organization of American States,45 argue strenuously that the "private provision of infrastructure services and concession arrangements-many of them already proven-must be encouraged and developed. Public utilities companies (for example) should be autonomous and have a secure recurrent income through reliable services to consumers."46 (c) Strong governmental regulatory powers to cover supervision and disclosure, offer the rules of debt issuance, plus protection of the creditor's rights in times of default, including requirements of municipal bankruptcy. (d) Mechanisms that meet conditions of credit risk through municipal debt guarantees, bond insurance, policies of securitization, and the offering of bank letters of credit to offset creditor exposure and transfer it to a creditworthy bank. (e) Access to foreign investment capital. While there is more than a little foreign money in the more privatized elements of urban infrastructure, local governments in developing nations are more challenged to raise debt finance for more traditional public works. Some governments are now setting up what El Daher47 describes as "municipal development funds" as channels for municipal credit--serving as substitutes for government grants at the national level or as a source of funding to help gain access to foreign markets through debt secured with national guarantees. Some governments are toying with the notion

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

27

of infrastructure banks, a tool that has been suggested but has failed to find national support in the United States as well. 48 In short, the infrastructure discourse in developing countries is increasingly a financial structure discourse: creating the market institutions and governmental security to attract and protect investors. The argument is clear in a world of growing economic liberalization: without first meeting the needs of creditors and investors, urban infrastructure cannot be secured and economic development will certainly be imperiled. Therefore, meeting the needs of developing countries is increasingly tied to sources of funding found in strong capital markets, which, if developed in the manner described above, help reinforce the neoliberal economic forces of global investment and production capital.

The Privatized Governmental Structure Discourse In 1941 the legendary city-builder Robert Moses, writing on the occasion of the fifth anniversary of the opening of New York City's Triborough Bridge, suggested that it was not the construction of the bridge that was central to the development of New York, it was the construction of a relatively new form of public enterprise-the Triborough Bridge Authority. "We have never lacked for plans, sound and unsound, practical and fantastic. What we have lacked has been unified execution .... If I may be permitted a personal note, I would say that it has long been a cherished ambition of mine to weave together the loose strands and frayed edges of the New York metropolitan arterial tapestry.... The Triborough Bridge Authority has provided the warp on the loom, the heavier threads across which the light ones are woven .... The best use for its surplus, from both business and civic points of view, is for improvement of approaches and connections, to open up new territory and improve surrounding property.,,49 The public authority set in motion the most important change in the governance of public works in the twentieth century. It enabled a process whereby physical infrastructure services could be peeled away from the general service municipality and provided through a new form of government enterprisethe public authority and, later on,50 other allied forms of special-purpose governments. The public authority was a debt-generating body that floated revenue bonds on the private market and secured the bonds with revenue earned by the public works it built. The authority was an independent, if not privatized, public enterprise: it was not constrained by the capital budget requirements of the general service provision jurisdiction, and its actions could not be held accountable to taxpayer approval of bonds or civil service

28

AN ERA OF CITY-BUILDING

requirements of management. The public authority, with a quasi-private, corporate charter and with primary fiscal responsibility to its bondholders, was not accountable to civil service dicta, ordinary line-agency fiscal responsibilities, or the regular boundaries of legislative oversight and accountability. This independence, coupled with the ability of authorities such as the Triborough, emerged from the depths of the Great Depression of the 1930s to raise the funds necessary to construct large-scale public works through the sale of bonds secured against the revenues of the projects. It made them attractive models of infrastructure governance. 51 Because of their structural complementarity with the requirements and practices of the market, some form of authority quickly found its way into the governmental structure of every U.S. state. In the United States, the Council of State Governments defined the public authority as a clear and unambiguous back door through which to fund costly and politically contentious public works and to avoid constitutionally prescribed debt limits. 52 In fact, it was this latent extra-constitutionality that the council celebrated in its definition of such authorities: Public Authorities generally are corporate bodies authorized by legislative action to function outside of the regular structure of state government in order to finance and construct and usually to operate revenue-producing public enterprises. Their organizational structures and powers are of the type usually associated with public corporations and like the latter they have relative administrative autonomy. Public authorities are authorized to issue their own revenue bonds, which ordinarily do not constitute debt limitations, since they are required to meet their obligations from their own resources. They lack the power to levy taxes, but are empowered to collect fees or other charges for use of their facilities, devoting the resulting revenue to payment of operational expenses and to interest and principal on their debts. 53 The popularization of the special-purpose authority and its entrenchment as a permanent part of urban design and policymaking in the United States was a direct result of its circumvention of local and state debt limits, its political independence from traditional legislative oversight and public governance, and its direct operational control over public works projects that heretofore had been the bailiwick of line municipal agencies. Austin Tobin, the head of the powerful Port of New York Authority, put it bluntly: the provision of large-scale public works required a "public corporation set up outside the regular framework of federal, state and local government, and freed from the procedures and restrictions of routine government operations, in order that it may bring the best techniques of private

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

29

management to the operation of a self-supporting or revenue producing public enterprise."54 The public authority became a model for more traditional special-purpose governments and more general local development authorities, so that today special-purpose governments, public authorities, and development authorities make up the fastest-growing form of American government. Today all sorts of services are provided "off line" or independently through authorities, districts, services, systems, agencies, commissions, boards, associations, utility companies, corporations, and other entities that all participate in the provision of public works.55 They have come far from the models of Robert Moses and Austin Tobin, who headed authorities that conceived, financed, built, operated, and maintained the projects through their authorities. At present, various interlocking financial relationships exist among governments, bond banks, and development authorities; this makes the complex arrangement of decentralized and increasingly privatized governmental structures as confusing as it is important when discussing the governance of public works in countries like the United States. 56 Public authorities and allied special-purpose governments now account for over 42 percent of all public infrastructure expenditures in the United States, and while a great deal of this funding comes from user fees or revenues, almost half is still recovered through governmental transfersY More than 50 percent of all the bonds that finance public infrastructure investment are attributable to special-purpose governments, and while much has been made of public authorities' access to the credit markets, authorities and special-purpose governments appear to have an increasingly difficult time with bond issues for large-scale rehabilitation and maintenance. 58 In the last half of the twentieth century, local governments rolled up hundreds of billions of dollars of debt as they paid for the city-building process. This debt was built in truly uneven ways: in growing cities, the practice of relatively unfettered "bond and build" led to rapid growth and development, but in other, economically troubled cities and states, the conditions of debt and decline combined to create potentially serious problems. 59 These problems are the result, in part, of how governments have employed the public authority to finance debt. Where the special-purpose public authority of Robert Moses controlled the entire process of build, finance, own, and operate public infrastructure systems, today's authorities have been reduced to backdoor finance machines-serving essentially as fiscal passthroughs for lease purchase, contracting out, and other forms of service agreements. For example, to combat the financial conditions of the Great Depression in the 1930s, the state of Pennsylvania aggressively practiced a form of lease-backed financing of school buildings, using such authorities.

30

AN ERA OF CITY-BUILDING

After the Depression, these lease-back arrangements became a key feature employed by a network of authorities when the state, in the face of strict constitutionally defined debt and tax restrictions and a tradition of stiff voter approval for bonds, created 2,600 public authorities to provide almost every type of public service. Today, "at least 41 states have discovered the virtues of lease financing and four-Colorado, Kentucky, South Dakota, and Idahodepend on them almost exclusively to borrow money.,,60 An example of another, darker side of conducting government "off budget," using these privatized versions of governments to provide public infrastructure, occurred in the economically troubled region of upstate New York. Fiscally constrained cities, unable to raise the funds to pay their operating expenses, have sold their built infrastructure to independent development authorities and then entered into long-term lease agreements with the authorities to payoff the bonds the authorities had to float to purchase the facilities. Buffalo, New York, sold its water system to a managing authority in exchange for $20 million to make up the deficit in its 1992-93 annual budgt!t. Troy, New York, literally sold its city hall and seven other city-owned capital facilities, including a city park, to a local development corporation (LDC) for $35 million. "The LDC raised the funds for the purchase through the sale of revenue bonds and now the city rents city hall and the city park from the LDC. The city used $10.5 million of the funds to payoff a shortfall in the annual working capital budget of the city."6! Such practices of privatized governance suggest serious consequences in perilous financial times. They do have the immediate effect of generating funds and "protecting" taxpayers and their governments from increased taxes or fiscal insolvency. But where do these fiscal politics ultimately lead? When faced with another working-capital shortfall, what else will the city sell? It can sell city hall only once. The Privatization Discourse of Public Infrastructure While the public authority as practiced in the United States is a good example of government organizing to minimize the political risks of increased taxes and maximize access to investors and capital markets, many cities and countries are now moving .even closer to full privatization of infrastructure, by ceding the services over to private management and/or contracting for private physical infrastructure. Just as "political and economic reasons led many [other] countries during the second half of the 19th century and the first half of the 20th century to believe that the provision of public services had to be a government responsibility,,,62 the role of private capital-be it financial, physical, or managerial 63-became an increasingly

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

31

dominant feature of infrastructure programs throughout the world in the last few decades. Privatization of public infrastructure through contracts, concession agreements, buy-on-time and lease arrangements, and private ownership has become increasingly popular in many cities. Such arrangements require financial assistance from international investors and lending institutions as well as from the domestic capital markets described in previous sections. To secure the participation of private infrastructure owners and management and the participation of international investors, local and sovereign governments are required to provide effective legal and regulatory processes to guarantee their rights and protect their interests, as well as the interests of the public and the state itself. The nature of public infrastructure services, requiring long-term investment in the sunk costs of the large physical projects-from bridges, buildings, and roads to telephone lines, fiber-optic cables, and water and sewer systems-demands certainty in market and currency structures and continuity of governance. Earlier in the last century many countries in the world could not ensure these conditions of political and economic stability; therefore, the provision of public services, especially public infrastructure, remained almost exclusively within the purview of the state. All of this may seem old hat to those familiar with public infrastructure policy in the United States, where, in some ways, urban infrastructure is already "privatized." In large part this is because the United States has stable, advanced capital markets. In many developing countries of the world, containing some of the world's largest cities, quite the opposite is true. The issue is not whether to privatize urban infrastructure or enter into some form of joint venture between the public and private sector or to contract a service out. The question is how to create stable accessible markets of domestic capital, so that local governments will not be forced to continue to fully build, finance, and operate public works. The combined stress of increased urbanization and lack of domestic capital acts as a barrier to infrastructure growth. The argument from the international financial community (the International Monetary Fund, World Bank, Inter-American Development Bank, Organisation of Economic Cooperation and Development) is a clear one: create a stable climate for privatization-beginning with clear rules for private financing of urban infrastructure. The World Bank assessment of capital markets in China64 makes this abundantly clear: the first role of government is one of law and regulation. It is up to the national government to help urban areas by establishing the rules of incorporation, creating a reliable credit system with a mandatory rating system of debt issues, encouraging institutional investors through laws and regulations that provide a structure through which to access investments by pension funds and mutual funds, and strengthening

32

AN ERA OF CITY-BUILDING

domestic government bond markets through such elemental changes as dematerializing new bond issues. 65 Without such basic institutional features of modern domestic finance capitalism, local capital will not cohere, global investment capital will not be attracted, and urban governments will be forced to remain the major source of funding for public works. 66 The "privatization discourse" is substantially different in the core countries of the world, where, to borrow from the analysis ofHugo Palacios Mejia67 the political and economic conditions allowing for privatization have been in place for some time. The United Kingdom is a prime example of a national regime actively privatizing urban public infrastructure. In 1985, urban bus services were deregulated-paving the way for increased competitive provision of mass transit at the local level, including the "wholly owned public services in urban areas." In the intervening years, "several formerly public municipal transit companies have ... been privatized, as has the nationally-owned long-distance bus company."68 The United Kingdom has since established ten water and sewer districts covering all of England and Wales, and it has successfully financed these infrastructure systems through public offerings of interests in the operating of companies. Today water and sewer systems are fully privatized in England. "At the same time the United Kingdom government has established a new regulatory authority, the Office of Water Services. This body is charged with: monitoring the performance of the new water and sewage companies; overseeing compliance with conditions attached to their appointment; protecting the interest of consumers by limiting increases in charges and comparing the performance of companies to encourage efficiency; and ensuring that the companies' charges are fair."69 Private companies have been invited to bid on privately financed highways, and other companies are financing and building bridges from London to Dublin. More recently, Britain has pushed the limits of the "privatization" model through the Private Finance Initiative (PFI), which attempts to move public sector policy away from the purchase of public sector assets (such as the sale of electricity, gas, and water supply) and toward the purchase of private sector services. 7o This began as an initiative of the Conservative national regime, based on the assumption that rather than government committing capital investment to owning, operating and/or managing the means of providing the necessary service, substantially greater economic efficiency and lower costs might be attained by "contracting out" the services themselves to the private sector. In other words, rather than building and owning a school, or a prison, or a hospital, government would simply buy the service it required from the private sector. 7 !

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

33

While PFI has resulted in privatization contracts for several infrastructure projects, there is still considerable uncertainty between both the public and the private sectors about how to proceed, and projects are evolving very slowly. The Labor government came to power in 1997, and upon reviewing the procedures, it has actually proceeded, if anything, to push project agreements even more squarely to the private sector: Public Private Sector Partnerships (PPSP) are all about negotiating deals that are good for both sides. The private sector wants to earn a return on its ability to invest and perform. The public sector wants contracts where incentives exist for the private sector supplier to deliver services on time and to specify standards year after year. In this way, the public sector shares an absolute identity of interest with private financiers whose return on investment will depend on these services being delivered to those standards. 72 The United Kingdom may have taken the apparent lead in nationally deregulating full sectors of public-works delivery systems and creating project and regional units that could be restructured into proprietary fiscal/investment systems, but the United States has long been the historic leader of the public-private processes of urban infrastructure delivery. The lion's share of public infrastructure activity in the United States has always been carried out at the local level-where cities, and to a lesser degree states, have provided an almost inexhaustible array of fiscal governmental, technological, and public-private arrangements in order to build, manage, and maintain public works. Throughout its history the United States has continually pushed down decisions of construction, finance, and management of public infrastructure to the local level. Local governments, those constitutional creatures of the state, have employed a host of policies to achieve financial access to capital markets while circumventing the regulatory limits to debt and tax rates constitutionally imposed by the states. 73

Summary: The State and the Changing Discourses of Public Infrastructure One reading of these privatizing discourses of public infrastructure is to conclude that the requirements of capital markets, to which local governments must turn to fund public works, have become paramount and determinative in explaining public infrastructure. 74 An alternative view 75 is that government, because of its dual roles of regulation in support of the public good and constitution of the institutional relationships with other levels of government, ultimately defines the nature (public/private) of infrastructure. While

34

AN ERA OF CITY-BUILDING

the market devises instruments of investment and debt in response to the conditions set by the local state, it remains with the state to control the conditions of public infrastructure services. Whether the state will constitute itself to do so, producing the regulations and offering the requirements of governance is another matter, given the three increasingly privatizing policy discourses outlined thus far in this chapter. In each discourse, the state's determinative public powers are challenged by increasing the legitimacy of the market, which becomes the producer of transportation networks, electric power, and water, sewage, and communication systems, services that are basic to the needs of the ordinary citizen and that represent public goods fundamental to the entire modern economic and social formation.

The Privatizing Discourse of Tourism Infrastructure In no arena of city-building, perhaps, is the notion of infrastructure as public good more readily made problematic than in the privatizing discourse of tourism infrastructure. A convention center, an atrium hotel, a restored harbor coupled with a sports stadium: these represent the infrastructure of urban tourism. To borrow from the earlier discussion of definitions, these are the physical components of a new "network," or system of city-building-the "technological sinews" of what is described as a dynamic urban economic sector. "Tourism, in just over a half century, ... has become one of the world's most important economic sectors."76 In many cities, it is viewed as a key ingredient of economic restructuring: the transformation of cities from centers of manufacturing to centers of service. For example, if a city adds a downtown shopping mall and new office towers to the tourism infrastructure listed above, it has what Bernard Frieden and Lynn Sagalyn describe as the "essential equipment for a first-class city.'m A major factor in the increasing economic prominence of tourism is the rising affluence and increased leisure time of urban dwellers worldwide. International tourism increased at an annual rate of over 7 percent throughout the last half of the twentieth century-spawning a global industry comprising vast network(s) of institutions ... of airline companies, city governments, hotel operations, auto rental companies and banks offering specialized financial services. Within cities, the supply system is made up of a complex matrix of international chains and local businesses-restaurants, bars, music clubs, sports stadiums, souvenir shops that are rapidly becoming better organized. Multinational conglomerates shape the industry and wholly dominate parts of it. 78

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

35

These trends would appear to require that every community has "a project in the works, a convention or conference center, a stadium or arena, a civic center or a new hotel."79 If the nineteenth century industrial city was the quintessential production city, based on an economy of making something, the "tourist city" is the exact opposite. It is the definitive consumption city, based on an economy of dreams, marketing "fantasy and personal growth." More than most industries that market personal transformation through consumption, tourism has a genuine potential to deliver on its promises: travel can change the spiritual as well as the physical existence of both visitor and host. Even the packaged tour, the business trip and the stay in the standard hotel represent a break from routine and the possibility for new experience. Consequently evaluations of tourism's urban ·consequences must explore its symbolic aspects. 80 But tourism is a material economy as well-serving as "a significant component of the economic base of cites: in fact in places like Las Vegas and Cancun it may be the chief element," according to Susan Fainstein and David Gladstone. As a result, they argue that tourism is a cultural commodity that contains both material and non material dimensions. The former comprise both direct (jobs and revenue creation) and indirect outcomes (social structure, opportunities foregone, access to the city). Symbolic consequences include the creation and promotion of urban tourist sites and the significance these hold for the consciousness of the visitor and the visited alike. 81 Just as the dual nature of the tourist city economy mixes the material and nonmaterial, it also mixes the public and private elements of building and operating physical urban infrastructure. The result is a somewhat different "privatizing infrastructure discourse" than the ones previously reviewedone that takes some of its cues from the recent traditions of public-private provision of public works and others that seem to push the boundaries of privatization in new directions. This is a large topic, one that includes a range of tourist infrastructure too wide for full discussion in this chapter. Here three pieces of the "essential equipment" presently being deployed to build a "first-class" tourist city will be discussed: the sports stadium or arena, the convention center, and the major convention hotels. The practices of building, expanding, marketing, in material and nonmaterial terms, a convention site for visitors or a new stadium for a professional sports franchise while convincing the citizens of

36

AN ERA OF CITY-BUILDING

the city (the "hosts" as described by Fainstein and Gladstone)82 to pay for such infrastructure comprise the elements of this new privatizing discourse. Sports Stadiums and Arenas

Most sports stadiums have never been substantial revenue generators. 83 But even with such minimal economic power, most of the early major-league baseball stadiums and first football stadiums were privately owned. In fact, before 1950 public sports facilities were the exception. But since 1950 all this has changed-and the arguments for public support of major sports infrastructure have become popular economic and symbolic elements of urbandevelopment strategies. The "details of campaigns for sports facilities differ from city to city, but the basic case for (publicly) subsidizing them is the same everywhere."84 First, the stadium is described as a job generator, and second, "although a city might pay hundreds of millions of dollars in subsidies to attract or retain a team or a regular national sporting championship, the additional tax revenues and lease payments are claimed to be sufficient to offset these subsidies and make a publicly financed stadium a good investment." Perhaps even more important is the symbolic argument that to be a "major-league city" one must attract or retain a "major-league team." The immeasurable but deeply felt sense of civic pride and sense of competitive place that comes with being the site of a major professional team is palpable in the privatizing discourse surrounding the public support for the infrastructure needed to "play in the majors." By the late 1990s there were an estimated 113 major-league sports franchises, having built thirty-one new facilities since the late 1980s, with thirtynine new ones in progress,85 enough to cost an additional $15 billion. The lion's share of these new facilities are publicly subsidized and owned-a direct result of the politics of job-centered economic development policies on the one hand and the symbolic attractiveness of being a "major-league city" on the other. On average, over 60 percent of the costs of major-league facilities and almost 100 percent of minor league stadium and arena costs are publicly funded. This boom in stadium and arena construction is going on while the evidence is clearly mounting that such facilities are even less likely to return a profit than they were a century ago. 86 The job and income numbers generated at most of these facilities are inflated. With the exception of athletes and administrators, jobs are mainly in low-pay transitional categories. 87 The dollars spent in these arenas are mostly funds that would ordinarily have been spent in some other part of the city or region. 88 Further, the assertion that the income generated at the sports facility will be more than enough to service the debt and payoff the public bonds sold to finance con-

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

37

struction or to upgrade the facility is only half the story. The maintenance, upgrading, and operational costs often exceed the income generated, inasmuch as the professional franchise takes the return on concessions, is the beneficiary of tax forgiveness agreements, and calls the tune on upgrading of luxury seating and skyboxes. 89 In the face of all this, the real reason sports facilities have increasingly become publicly subsidized infrastructure in the service of private team owners may very well be the relatively weak bargaining position cities find themselves in when attempting to attract or retain a sports franchise. In order to be a "major-league" tourist city, cities are often willing to sacrifice material logic for symbolic identity and go where many private investors will not go alone when facing what has been described as the "fundamental economic irrationality of most new stadiums as purely private investments.,,9o

Convention Centers Just as cities try to be "major league," they also seek to be meeting centersactive and well-known sites for conventions and for outside visitors. Whether, after construction, it comes to pass that a convention center is the extraordinary attraction for travelers to a particular city rather than others seems to be only partially important. When it comes to convention centers, the symbolic nature of such a center is a matter of pride for city leaders as well as visitors: having the newest, most competitive piece of tourist infrastructure, the latest "trophy" for the mayor's economic development showcase,91 may be just as important to downtown development interests and politicians as actually getting the number of conventions and visitors upon which a fully realized tourism economy is built. Indeed, the first rule of this privatizing discourse of local boosters, capitalists, and public officials takes a leaf from the book of the Midwestern corn farmer in the popular movie Field of Dreamsnamely, if you build it, tourists and business travelers will come. Conversely, if the new convention center is not built, the city can never be a part of the convention-visitor economy to begin with. So you better build it, regardless of the market numbers! More than most pieces of physical infrastructure, convention centers are not only a symbolic badge of success, they are also promoted as the city's ticket of entry into the sweepstakes of conventions and visitors. The rate of construction of convention centers certainly bears this out. Over the last thirty years new convention centers have been built at an almost geometric rate: where 100 came on line between 1970 and 1985, by the end of the 1980s the number of centers had grown to 331, and by 1995, Dennis Judd reports,92 there were 434 convention centers in the country.

38

AN ERA OF CITY-BUILDING

In 1970, convention centers in the United States combined to provide access to 6.7 million square feet of meeting space. By 1990 convention space had grown in excess of 40 million feet, and in 1998 Tradeshow Week 93 reported 50.7 million feet, with an additional 11 million feet ready to come on line by 2003. "An increasing number of American cities are pursuing an economic development strategy aimed at boosting convention and visitor activities. From Boston to Atlanta, San Antonio to San Francisco, cities are mounting massive construction projects to provide new and expanded convention center space. "94 This boom in convention center development has fueled an intense competition for visitors-predicated on the premise that more convention space will attract more visitors, who will spend more money, thereby creating more jobs and more local spin-off development. 95 The formula of increased space equals increased tourism is at the core of the technical marketing discourse of tourism infrastructure-a discourse written and controlled by feasibility analysts-a truly niche marketing industry of the consulting field represented by national accounting and economic research firms such as Price Waterhouse, Touche Ross, and others. These marketers produce "the rhetoric and promise of convention center investment ... in bulky and number-laden 'feasibility studies.''' The studies layout the (invariably positive) market analysis for more local convention space. Yet for all the specificity in defining results and outcomes, and the seeming certitude in calculating the need and demand for convention center space, these feasibility studies have only rarely been subject to review and examination. Their conclusions and forecasts are not routinely re-examined for accuracy and reliability, And their data, methodology, and substantive conclusions are effectively never subject to comprehensive or comparative analysis," concludes Heywood Sanders96 in the only detailed review of feasibility studies to date. As one market analyst reported, "In a large number of cases the outcome [building a convention center] is the context, what we are doing is fine tuning the size and the market parameters in light of that context or goal."97 In this way feasibility studies become both the starting point and the end point for the argument for a new or expanded convention center. They represent a meaningful starting point, in that the studies set the ground rules, the measures, and the goals that make up the local argument for large-scale tourism infrastructure development in most U.S. cities and in other parts of the world. They also represent the end point inasmuch as they rarely find against building a new or expanded building. 98 It is on the basis of these studies that large public funds are committed and the largest tourist infrastructure contraction movement of the last century has been mounted. Therefore, to return to the almost universally optimistic findings of these

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

39

studies,99 if more space leads to more tourists, then the new tourist cities and their convention sites should be overflowing. But they are not. If national figures are any indication, the direct relationship between increased site space and increased convention visitors has not been borne out. Although the attendance at conventions, as reported by the Meeting and Conventions Survey, did rise between 1979 and 1989, from 8 million to 13.6 million, this remains the largest annual number of convention tourists. Between 1989 and 1997, the figure actually dropped by 14 percent, or 1.9 million visitors. During this same period, the increase in convention center space went from just under 40 million square feet to roughly 50 million square feet-an increase of almost 25 percent, and the number of convention centers increased by over 100. In short, we had almost one-third more convention centers with roughly 10 million more square feet of meeting and exhibit space competing for almost two million fewer convention visitors at the same time feasibility analysts were suggesting it was a propitious moment for many of their clients to enter the market. While this shows a somewhat desultory relationship between the growth of convention infrastructure and convention visitors between 1989 and 1997, if we extend our view to the longer run, market conditions have not been strong for almost two full decades. 100 This relatively undynamic convention attendance rate is matched only by a similar flat to downward trend in the number of scheduled events. In the face of this market, how is it that feasibility specialists can suggest to cities that conditions are right to invest hundreds of millions of dollars in convention center infrastructure? From the point of view of the studies' evaluation of national convention demand, two factors stand out, according to Heywood Sanders: "First, a number of consultants have made use of essentially the same data from Meeting and Convention data (that I have employed here). Yet their forecasts, based on data from the late 1980s through the mid-1990s have not followed the actual performance of the convention count and attendance measures. The tendency to treat change over a relatively short period as indicative of longer-term demand performance is pervasive. Second, much of the (short-term) analytical language is similar, and is (transferred) exactly ... from study to study."101 For example, a market study that was used to promote the construction of the new convention center in San Antonio cited only the 1979 to 1989 period when there was a true national increase in attendance, and another, more recent study for the new convention facility in South Boston used the very same data of growth between the particular years from 1991 to 1993 as are used in a 1996 study for a new center in Milwaukee, even though the overall structure for demand is flat. Therefore, economist Robert Lawrence cautions that while "people like to think that there's a science to economic impact studies ... what it often

40

AN ERA OF CITY-BUILDING

comes down to is the imagination of the people who wrote the studies." 102 A second set of reasons is tied to the new logic of economic development. Tourism, it is argued, is part of the new economic development. 103 It offers one of the few alternatives for cities to build a clean, newly designed urban core-part safe space and part spectacle. It is further argued that this combination of security and spectacle will attract an affluent and interesting mix of visitors and residents-for entertainment, business, and jobs. Proponents point to the fact that cities have few, if any, better alternatives-after all, it is alleged that tourism, in general, is the fastest-growing industry in the worldif one doubts this simply look at the way convention centers have proliferated and meeting and exhibition space has mushroomed in the past few years. The feasibility studies warn against delay. As Dennis Judd observes, cities seem trapped in a literal "arms struggle" over providing a competitive tourism infrastructure-if they do not build or expand the convention center, even if the short-term numbers of visitors are down, they stand the chance of losing out to national, regional, and even global competition in the long run. 104 This "keeping up with the Jones" mentality is a pervasive feature of these new discourse of tourism infrastructure. The last feature is the argument of scale. Perhaps the most confusing, if not downright contradictory, argument in this new discourse of infrastructure development is what I call the "argument of scale." A major argument for expansion of visitor and exhibition facilities is the size of the facilitynamely that a convention center's declining visitor rates can be addressed not by downsizing the facility to fit the restructured market but by expanding the size of the facility, thereby attracting a new market of meetings in a new and larger category. Put bluntly, the best way to fill vacant convention meeting rooms is to build more of them. Leaving aside the contradictions in logic, the argument also begs the question of how a bigger convention center or a new convention center will fare in a market already saturated with bigger, newer convention centers and a visitor market that peaked in 1989. The answer rests with the qualitative or symbolic character of the convention center-convention centers are meeting and exhibition spaces: places of marketing and convening. At a minimum, they must represent size and development, and better yet they should be "new," serving as a "progressive, dynamic site(s) for sales and collaboration."105 Visitors are key to the revenue strategies mounted to finance convention centers. The convention center is different from a bridge or a road, a water system, or a communications system in that the target user of the convention center is an "outsider," a visitor-someone other than the public of the city. In this sense, convention centers, hotels, and other forms of tourism infrastructure are not always locally perceived to be "public" infrastructure. There

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

41

is a often a great deal of citizen resistance to centers, and this resistance extends to opposition to paying local taxes to support such infrastructure. Visitors represent an important source of revenue-by their occupancy of hotels, their place at restaurant tables, and so forth. They pay for these facilities through hotel occupancy taxes, food and car rental taxes, and convention center service charges. The taxes are used to service the debt and pay back revenue bonds, which, in the 1970s and 1980s, became key ways in which cities were able to circumvent local voters who found spending their own tax dollars on facilities for use by out-of-towners to be onerous. In city after city from the 1950s to the 1970s, one general-obligation bond referendum after another was voted down when it was designed to pay for new convention centers and other large tourist-related public works. It was only after cities began to take a page out of the book of Robert Moses and other public authority builders and placed capital spending for tourist infrastructure "off budget" under the jurisdiction of a special government or public authority that the lion's share of convention centers began to be built.

Convention Hotels The construction of downtown hotels is intricately tied to convention center development. Here the "privatizing discourse of tourism infrastructure" suggests that it is not enough to build a convention center, sports arena, or other destination structure-these centers, especially if they are built to attract outsiders, need to be linked to a proximate array of hotels, restaurants, and other amenities. Their planning and their success almost always describe these amenities in the infrastructure construction plan-creating a dense weave of public capital and private commercial development. Los Angeles is a good example. In the early 1980s the consulting firm of Touche Ross and a Blue Ribbon Committee advised then-mayor Thomas Bradley that the Los Angeles Convention Center should expand from 330,000 to 610,000 square feet. And the mayor agreed, saying, "Convention centers and trade shows bring a lot of money into our economy, creating jobs and otherwise benefiting all parts of the Ci ty." 106 The expansion req uired the displacement of more people (1,400) and the mobilization of more money than expected. But it was deemed worth it-the promises of economic competitiveness, underscored by the mayor, were going to be fueled by a 250 percent increase in visitor attendance. The center was expanded at a cost of $500 million, and when it was completed it did not succeed in attracting many more people than the old center, and the gap between the unexpectedly low revenues from visitors and the debt service on the bonds forced the city to pay tens of millions of dollars to bail out the center. 107 The reason? Officials and

42

AN ERA OF CITY-BUILDING

developers alike did not blame the overly optimistic assessment of the visitor market or the cost overruns in the construction of the center. Rather, they blamed the lack of visitors and shortfall of revenue on a lack of hotel rooms. The plan had been for the convention center to attract the construction of hotels and restaurants. None were built. Now the city is building a new sports arena, hoping this will attract private investment. 108 Buffalo, New York, is a very different city with a very different constellation of downtown tourism infrastructure: an aging, underutilized convention center, a relatively new baseball park, and a brand new sports arena. With the construction of each piece of downtown infrastructure-the convention center, the baseball stadium, and the sports arena-the plan predicted a spinoff of hotels, restaurants, and other private sector investments. While other sections of the city have seen some new development, none has occurred around the three tourism sites. In fact, the city had to use its last Urban Development Action Grants (UDAG) and Community Development Block Grants (CDBG) funds to build a Hyatt Hotel and will now authorize a new waterfront development authority to use revenue bonds to build a public-private mix of projected retail, commercial development, and two new hotels. In short, public infrastructure in a second-tier city like Buffalo simply stimulated more public investment but little private sector spin-off. In face of this past history, the city has authorized a feasibility study to consider building a new, larger convention center as well. The reason? If they build a new convention center, the increased business will stimulate enough amenities-hotels and restaurants-to help attract out-of-town visitors-all this despite the fact that over 90 percent of the baseball visitors, over 80 percent of the sports arena visitors, and a similarly high percentage of the convention center visitors are local or regional day-trippers. The privatizing discourse of tourism can be found to be equally problematic in Buffalo and Los Angeles. The cases of Los Angeles and Buffalo are simply two very different examples of a pattern of increasing public participation in the construction of hotels. Most large convention hotels (with 400 rooms or more) are now as much the product of federal and local arrangements as they are proprietary action. Convention hotels are built with a host of fiscal incentives and mortgage reductions as well as legislatively engineered below-market-interest loans, grants, property tax abatements, free parking structures, and a host of operating and management agreements. 109 In no place is this pattern more clearly shown than Chicago, one of the leading convention/visitor cities in the United States and home of the 2 million-square-foot McCormick Place, the nation's largest convention center. The convention facilities were recently expanded by 908,000 square feet of exhibition space. The city's convention business attracts millions annually. As such, McCormick Place is arguably

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

43

the most productive convention destination site in the country, and yet the Metropolitan Pier and Exposition Authority floated $127 million in revenue bonds to finance the construction of a Hyatt Hotel right next to the convention center, after which the hotel was signed over to the Hyatt Corporation to operate as one of its lead hotels. This last example is built less around the economic need for the nation's most productive convention city to succeed than it is on the fact that building infrastructure for the tourist city is increasingly in direct service of the private sector, whether it occurs in a struggling second-tier city without a strong tourist economy or in one of tourism's flagship centers. The goals of such privatizing discourse work well for both the public sector and the private sector-first the public sector gets the private sector to be "present," if not fully invested, in the core, and the private sector, as in the case of the hotels, gets a substantial share of the capital burden and the sunk costs of development attended to by the public authority, special-purpose government, or other form of city entity. Conclusion This chapter is an overview of the key processes that adhere to the increasing presence of the private sector in the discourses of urban infrastructure formation. I call these processes "privatizing discourses" deliberately because "privatizing" infers a recursive set of relationships between capital and the state. Also, it refers to the requirements that capital markets will continue to bring to bear as the conditions, or the "outer boundaries,"11O of private participation (investment, ownership, or management) in the building of the public city. At the same time, an important implication of this chapter is that the privatizing discourses of public infrastructure point to regulatory challenges, if not crises, for the state. 11 I The importance of private capital to the funding of urban infrastructure cannot be denied. What can be denied by the state if it so chooses, are the overintrusive conditions of capital markets that, in the mind of many observers, now suggest that "capital calls the tune, that private interests use or constrain public authority. In the case of cities ... 'financial capital' or the 'structure of capital markets' [are] crucial concepts in understanding urban political economy... ."112 In this view the financial market "generally acts as a de facto 'outer boundary' for political choices made by city officials about service levels, tax rates, and economic development."ll3 To allow this reading of the increasingly privatizing discourse of public works to prevail creates a limited role for the state. It suggests that the requirements of capital markets, to which local governments must turn to fund

44

AN ERA OF CITY-BUILDING

public works, are paramount and determinative in explaining public infrastructure. 114 An alternative view, and the one I would like to restate once more in this conclusion, is that government, because of its dual role of regulator in support of the public good and of constitutor of the institutional relationships with other levels of government, ultimately defines the nature (public/private) of infrastructure. It would be a true abdication of the state's determinative public powers, for example, to allow for either overly protected or unfettered private sector control of public infrastructure. In the end these public works are public goods, central to the basic needs of all citizens and fundamental to the entire modern economy or social formation: services such as transportation networks, electric power, clean water and sewage, communication systems and convention centers. Whether building public infrastructure in the developing world or in the United Kingdom, in Los Angeles or Buffalo, the benefits of private capital do not come at the cost of the abdication or weakening of the state's regulatory role. Even in a system of direct privatized infrastructure, the power of the rules of public works planning and oversight still vests with the state. In the end, this inquiry into the privatizing discourses of public infrastructure is meant to chart the increasing presence of the market in the provision of public services and to register the singularly essential role of the state in defining and regulating that presence. Notes This chapter benefits from the work of Susan Fainstein and Dennis Judd on the "tourist city"-especially the definitional and conceptual work found in the three opening essays in their edited book The Tourist City. My thoughts on the broad range of what are called here the "privatizing discourses of public infrastructure" (a truly awkward term) are in part the result of many hours of interviews with public officials and private sector financial experts. I am particularly grateful for the work and critical advice of Heywood Sanders. This chapter also benefits greatly from the research assistance of Radha Roy and John O'Neal. I. B. Seeley, "The Saga of American Infrastructure," Wilson Quarterly (winter 1994); Winter. 1. Konvitz, The Urban Millennium: The City-Building Process from the Early Middle Ages to the Present (Carbondale: Southern Illinois University Press, 1985); D.C. Perry, "Building the Public City: An Introduction," in D.C. Perry, ed., Building the Public City: The Politics, Governance and Finance of Public Infrastructure. (Thousand Oaks, CA: Sage, 1995), 1-20. 2. D. Judd, and S. Fainstein, eds., The Tourist City (New Haven, CT:Yale University Press, 1999). 3. Ibid.; L.M. Hoffman and J. Musil, "Culture Meets Commerce: Tourism in Postcommunism Prague," 181; R. Foglesong, "WaIt Disney World and Orlando: Deregulation as a Strategy for Tourism," 89-106; S. Fainstein and D. Gladstone, "Evaluating Urban Tourism," 21-34.

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

45

4. See Konvitz, Urban Millennium, for his wonderful study of city-building. 5. I would like to suggest that there are certain elements or categories of discourse on the political economy of urban public infrastructure. Even as I offer this as the intent of this chapter, I do so with the clear understanding that the notion of a discourse on public infrastructure implies common rules of representation, or "language," which the present state of public infrastructure formation, read globally, does not easily offer. In fact, the conditions of urban infrastructure formation in both the first and third worlds come closer to representing a contextual cacophony than a language or scholarship of discursive, communicative coherence. 6. AJ. Smith, Privatized Infrastructure: The Role of Government (London: Thomas Telford, 1999); L. Anderson, "Fire and Disease: The Development of Water Supply Systems in New England, 1970-1990," in J.A. Tarr, and G. Dupuy, eds., Technology and the Rise of the Networked City in Europe and America (Philadelphia: Temple University Press, 1988); Konvitz, Urban Millennium. 7. D.C. Perry, "Building the City Through the Back Door: The Politics of Debt, Law and Public Infrastructure," in Perry, ed., Building the Public City, 170-20 I; Konvitz, Urban Millennium; Sam Bass Warner, The Urban Wilderness (New York: Harper and Row, 1972). 8. Smith, Privatized Infrastructure, 2. 9. Perry, Building the Public City; Tarr and Dupuy, eds., Technology and the Rise of the Networked City. 10. This is Joel Tarr's term for public works, employed in what is arguably the best historical treatment of urban public works in American cities. J. Tarr, "The Evolution of the Urban Infrastructure in the Nineteenth and Twentieth Centuries," in R.Hansen, ed., Perspectives on Urban Infrastructure (Washington, DC: National Academy Press, 1984), 4-66. Rather than just using the term infrastructure or urban infrastructure I have chosen to use Tarr's term urban capital infrastructure because it evokes the physical nature and public nature of the public work and it leaves open whether the service is provided by a public or private agency. 11. Konvitz, Urban Millennium. 12. Ibid. 13. Tarr, "The Evolution of the Urban Infrastructure," 5. 14. A. Mody, ed., Infrastructure Strategies in East Asia: The Untold Story (Washington, DC: World Bank, 1997); A. Kumar, R.D. Gray, M. Hoskote, S. von Klaudy, and J. Ruster, Mobilizing Domestic Capital Markets for Infrastructure Financing: International Experience and Lessons for China, World Bank Discussion Paper no. 377 (Washington, DC: World Bank, 1997); D. Clark, Urban World/Global City (London: Routledge, 1996). 15. A more detailed discussion of the definitions of infrastructure is found in Perry, Public City, 1-20. 16. Seeley, "Saga of American Infrastructure," 20. 17. W.W. Rostow, Stages of Economic Growth (Cambridge: Cambridge University Press, 1960). 18. Seeley, "Saga of American Infrastructure," 6; Tarr, "Evolution of the Urban Infrastructure," 4-66, esp. 4-5; Tarr and Dupuy, eds., Technology and the Rise of the Networked City, xiii. 19. U.S. Congress Office of Technology Assessment, Rebuilding the Foundations: A Special Report on State and Local Public Works Financing and Management (Washington DC: U.S. Government Printing Office, 1990).

46

AN ERA OF CITY-BUILDING

20. National Council on Public Works Improvement, Fragile Foundations: A Report on America 's Public Works, Final Report to the President and Congress (Washington, DC: U.S. Government Printing Office, 1988). Also see P. Choate and S. WaIter, America in Ruins: The Decaying Infrastructure (Durham, NC: Duke Press Paperbacks, 1983). 21. F. Basanes, E.Uribe, and R. Willig, eds., Can Privatization Deliver? Infrastructure for Latin America (Washington, DC: Inter-American Development Bank, 1999). 22. Mody, Infrastructure Strategies. 23. National Council on Public Works Improvement, Fragile Foundations, 1. 24. Judd and Fainstein, Tourist City, 19. 25 U.S. Commission to Promote Investment In America's Infrastructure, Financing the Future (Washington, DC: U.S. Government Printing Office, 1993). 26. Ibid. 27. M. Castells, The Informational City: Information, Technology, Economic Restructuring, and the Urban-Regional Process (Oxford, England: Basil BlackweU, 1989); Clark, Urban World; Organization for Economic Cooperation and Development, Urban Infrastructure: Finance and Management (Paris: OECD, 1991). 28. S. Graham and S. Marvin, Telecommunications and the City: Electronic Spaces, Urban Places (London: Routledge, 1996); Kumar et aI., Mobilizing Domestic CapitalMarkets; Organization for Economic Cooperation and Development, Urban Infrastructure; Smith, Privatized Infrastructure; Mody, Infrastructure Strategies. 29. Organization for Economic Cooperation and Development, Urban Infrastructure; Smith, Privatized Infrastructure; Mody, Infrastructure Strategies. 30. Clark, Urban World, 21; United Nations, Demographic Yearbook (New York: United Nations, 1994). 31. United Nations, Demographic Yearbook. 32. M. Dogan and J.D. Kasarda, eds., The Metropolis Era: Voll. A World of Giant Cities (Newbury Park, CA: Sage, 1989); M. Dogan and J.D. Kasarda, eds., The Metropolis Era: Vo12. Mega Cities (Newbury Park, CA: Sage, 1989). 33. United Nations, World Urbanization Prospects (New York: United Nations, 1991 ). 34. Clark. Urban World, 24. 35. Ibid., 32; Saskia Sassen. Cities in a World Economy (Thousand Oaks, CA: Pine Forge/Sage, 1994. 36. Organization for Economic Cooperation and Development, Urban Infrastructure, 3-4. 37. Singh et aI., "Introduction," in Integrated Urban Infrastructure Development in Asia (London: Intermediate Technology Publications, 1996), 1-13. 38. Smith, Privatized Infrastructure, 4. 39. Ibid. 40. Ibid. 41. S. El Daher, S. "Municipal Bond Markets: Prospects for Developing Countries," Infrastructure Notes, Urban No. FM-8b (Washington, DC: The World Bank, 1997), 1. 42. Mody, Infrastructure Strategies. 43. Ibid., 1. 44. Kumar et aI., Mobilizing Capital Markets; Mody, Infrastructure Strategies. 45. Singh et aI., Integrated Urban Infrastructure; Mody, Infrastructure Strategies. 46. Mody, Infrastructure Strategies.

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

47

47. Ibid. 48. US. Commission to Promote Investment in America's Infrastructure, "Financing the Future. 49. Triborough Bridge and Tunnel Authority, Fifth Year Anniversary of the Triborough Bridge, brochure (New York: Triborough Bridge Authority, July 11, 1941). 50. 1. Leigland, "Public Infrastructure and Special Purpose Governments: Who Pays and How?" in D. Perry, ed., Building the Public City. 51.1. Lines, E. Parker, and D. Perry, "Building the Twentieth Century Public Works Machine" in M. Schoolman and A. Magid, eds., Reindustrializing New York State: Strategies, Implications and Challenges (Albany, NY: SUNY Press, 1986), 231-256. 52. Perry, Building the Public City. 53. Council of State Governments, Public Authorities in the States (Lexington, KY: Council of State Governments, 1953), 113. 54. AJ. Tobin, "Authorities As a Governmental Technique," paper presented at Rutgers University on March 26,1953, p. 13. 55. Lines et ai., "Public Works Machine," 139. 56. A. Sbragia, Debt Wish: Entrepreneurial Cities, U.S, Federalism, and Economic Development (Pittsburgh: University of Pittsburgh Press, 1996). 57. Lines et ai., "Public Works Machine." 58. Ibid. 59. D. Axelrod, Shadow Governments: The Hidden World of Public AuthoritiesAnd How They Control Over $1 Trillion of Your Money (New York: Wiley, 1992); Perry, Building the Public City; Lines et aI., "Public Works Machine." 60. Axelrod, Shadow Governments, 43. 61. Perry, Building the Public City, 227. 62. H.P. Mejia, "Effective, Low-Cost Systems to Enforce Infrastructure Contracts," in Basanes, Uribe, and Wllig, eds., Can Privatization Deliver? 63. Mody, Infrastructure Strategies. 64. A. Mody, "Infrastructure Delivery Through Central Guidance," in Mody, ed., Infrastructure Strategies, xi-xxvii. 65. Kumar et aI., Mobilizing Domestic Capital Markets. 66. Mody, Infrastructure Strategies; Kumar et ai., Mobilizing Domestic Capital Markets; Smith, Privatized Infrastructure. 67. Mody, Infrastructure Strategies. 68. Smith, Privatized Infrastructure, 222; Organization for Economic Cooperation and Development, Urban Infrastructure. 69. Organization for Economic Cooperation and Development, ibid. 70. Smith, Privatized Infrastructure, 5. 71. Ibid., 221. 72. Undated, unpaginated report of the United Kingdom Treasury Task Force Report, as quoted in Smith, Privatized Infrastructure, 229-230. 73. Lines et ai., "Public Works Machine"; Perry, Building the Public City. 74. S.L. Elkin, City and Regime in the American Republic (Chicago: University of Chicago Press, 1988); S.P. Erie, "How the Urban West Was Won: The Local State and Economic Growth in Los Angeles, 1880-1932," Urban Affairs Quarterly 27 (June 1992): 519-554. 75. Lines et ai., "Public Works Machine." 76. S.S. Fainstein and D.R. Judd, "Global Forces, Local Strategies, and Urban Tourism," in Judd and Fainstein, eds., The Tourist City, 2.

48

AN ERA OF CITY-BUILDING

77. BJ. Frieden and L.B. Sagalyn, Downtown, Inc.: How America Rebuilds Cities, (Cambridge, MA: MIT Press, 1989),259. 78. Ibid., 10. 79. Council for Urban Economic Development, "If You Build It, Will They Come? Stadiums, Arenas, Convention, Conference and Civic Centers and Out of the Park Developments," conference brochure, 1999, 1. 80. Fainstein and Gladstone, "Evaluating Urban Tourism," 21. 81. Ibid., 21-22. 82. Ibid. 83. E.!. Sidlow and B.M. Henschen, "Major League Baseball and Public Policy, or, Take Me Out to the Ballgame, Wherever the Game May Be," Policy Studies Review 15, no. 1 (Spring 1998); J. Quirk and RD. Fort, Pay Dirt: The Business ofProfessional Team Sports (Princeton, NJ: Princeton University Press, 1997). 84. RG. Noli and A. Zimbalist, "Build the Stadium-Create the Jobs," in RG. Noli and A. Zimbalist, eds., Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums (Washington, DC: Brookings Institution Press, 1997), 1. 85. Ibid., 5. 86. RG. Noli and A. Zimbalist, "The Economic Impact of Teams and Sports Facilities," Sports, Jobs, and Taxes, 55-91; M.S. Rosentraub, Major League Losers: The Real Cost of Sports and Who's Paying For It (New York: Basic Books, 1997); Quirk and Fort, Pay Dirt. 87. Noli and Zimbalist, "Economic Impact"; Rosentraub, Major League Losers. 88. Ibid.; RG. Noli and A. Zimbalist, "Sports, Jobs and Taxes: Are Stadiums Worth the Cost?" Brookings Review (December 1997): 35-39. 89. D.C. Petersen, Sports, Convention, and Entertainment Facilities (Washington, DC: Urban Land Institute); Noli and Zimbalist, eds., Sports, Jobs, and Taxes. 90. Noli and Zimbalist, "Economic Impact," 27. 91. Frieden and Sagalyn, Downtown, Inc., 77. 92. D.R Judd, "Constructing the Tourist Bubble," in Judd and Fainstein, eds., The Tourist City, 40. 93. Tradeshow Week, Major Exhibit Hall Directory, 1998 (Los Angeles: Author, 1998), 13. 94. H.T. Sanders, "Flawed Forecasts: A Critical Look at Convention Center Feasibility Studies," White Paper No. 9 (Boston: Pioneer Institute, 1999). http:// pioneerinstitute.org/research/whitepapers/wp02.cfm. 95. Ibid.; H.T. Sanders, "Challenging Convention(al) Wisdom: Hard Facts About the Proposed Boston Convention Center," White Paper no. 2 (Boston: Pioneer Institute, 1997), http://pioneerinstitute.org/research/whitepapers/wp02.cfm; H.T. Sanders, "If We Build It, Will They Come? And Other Questions about the Proposed Boston Convention Center," White Paper no. 1 (Boston: Pioneer Institute, 1997), http:// pioneerinstitute.org/research/whitepapers/wpO l.cfm; Tradeshow Week, Major Exhibit Hall Directory, 1998,1; Fainstein and Gladstone, "Evaluating Urban Tourism"; Frieden and Sagalyn, Downtown, Inc.; among other studies of urban tourism. Every essay has its particular take on this point. 96. Sanders, "Flawed Forecasts." 97. D.C. Perry, "Interview 11, February, 1998" one of fifty-five interviews conducted with financial analysts and infrastructure consultants as part of a study of the history and practices of public debt formation. Unpublished. 98. K. Shropshire, The Sports Franchise Game: Cities in the Pursuit of Sports

URBAN TOURISM AND PUBLIC INFRASTRUCTURE

49

Franchises, Events, Stadiums and Arenas (Philadelphia: University of Pennsylvania Press, 1995). My interviews over the past years (with a range of infrastructure bond raters at Solomon Smith Bamey, Moody's, the Bond Insurance Agencies and First Bank and First Chicago, feasibility consultants and financial consultants at Price Waterhouse in Houston, Touche and Ross, Arthur Anderson in London and Praha) coupled with the exhaustive review of feasibility studies and follow-up confirm the not entirely cynical observation voiced by one consultant (interview, September 1998), "Frankly, this market has moved so far so fast, the conditions of cities and their willingness and ability to enter the convention game has changed so drastically because of the last twenty years of development, that we find it hard to find a client who will take no for an answer, and we live in a professional world where we have the technical analytic tools to give the clients what they want to hear. Now whether they can ultimately secure the confidence of the voters and others [when] they will need to raise the revenues necessary to proceed with their site is another question altogether." 99. Ibid; Sanders, "Flawed Forecasts"; Tradeshow Week, Major Exhibit Hall Directory, 1998. 100. Sanders, " Flawed Forecasts"; Sanders, "If We Build It, Will They Come?" 10 1. Sanders, "Flawed Forecasts." 102. Ibid., 5. 103. Taken in part from a quotation found in Sanders, "Flawed Forecasts," p. 19. 104. Fainstain and Gladstone, "Evaluating Urban Tourism," 22. 105. Ibid., 1. 106. Mayor Thomas Bradley in 1984, as quoted in Sanders, "Challenging Convention(al) Wisdom," 7. 107. Ibid. 108. Ibid. 109. Noll and Zimbalist, Sports, Jobs, and Taxes, 27. 110. Singh et aI., Integrated Urban Infrastructure; Smith, Privatized Infrastructure. Ill. Mody, Infrastraucture Strategies; Smith, ibid. 112. Lines et aI., "Public Works Machine," 11; D.S. Glasberg, "The Political Economic Power of Finance Capital and Urban Fiscal Crisis: Cleveland's Default, 1978," Journal of Urban Affairs 10, no. 1(1988) as quoted in Sbragia, Debt Wish, 11. See also Elkin, City and Regime. 113. See Glasberg, "Cleveland's Default, 1978," as quoted in Sbragia, Debt Wish; See also Elkin, City and Regime. 114. Elkin, City and Regime; Erie, "How the West Was Won."

3 DENNIS

R.

WILLIAM

JUDO, WILLIAM WINTER,

R.

BARNES, EMILY STERN

Tourism and Entertainment as Local Economic Development: A National Survey

By the 1990s tourism had become one of the most dynamic economic sectors in the world economy, growing faster than any other sector; by 1990 it ranked third (behind only petroleum and petroleum products and motor vehicles and vehicle components) in value-added trade-related activities. l As of the mid-1990s the United States claimed the largest market share in the international travel market, with $58 billion in receipts from international travelers. 2 This paled in comparison, however, with the $360 billion in annual domestic travel. Nearly seven million people were employed in touristrelated jobs in the United States in 1998, and tourism generated $67 billion in federal, state, and local taxes. 3 In light of these statistics on tourism, it should come as no surprise that for many cities in the United States, tourism and the related industries of entertainment, culture, and leisure have become a make-it or break-it sector that determines the health and future prospects of the local economy. The competition among cities for a share of the nation's tourism and recreational business has become more intense and better organized year-byyear. It is now commonplace for cities to sponsor advertising campaigns, sales missions, and special events to lure visitors. Most larger cities produce maps showing the locations of hotels, restaurants, and local attractions, and they prepare promotional materials for distribution at travel agencies and visitors' centers. They place advertisements in publications published by the meetings industry, and they sponsor special events and conferences for tour operators and travel agents. In addition to chambers of commerce that actively promote local tourism, many cities have also formed convention bureaus 50

TOURISM AND ENTERTAINMENT

5I

and tourist boards, recognizing that local promotion is increasingly an activity best put into the hands of professionals. 4 In a few cities the investment in recreational facilities began as early as the 1920s, with the building of the first generation of sports stadiums, arenas, and exhibition halls (though most of the investment in sports stadiums was private; public subsidies, when offered, tended to be very small). The first modern-era convention centers made their appearance in the 1950s. By the 1980s the competition for the lucrative and rapidly expanding meetings industry had become so frenzied that a virtual arms race had broken out, in which cities all over the country tried out to outdo one another to construct bigger and more expensive convention facilities. In the past two decades cities have also begun to invest heavily in sports stadiums, festival malls, performing arts centers, and other components of an increasingly elaborate tourism/entertainment complex designed to attract tourists. This building process has transformed cities all over the United States. Because of its importance to local economic vitality and to the quality of life of local residents, it is imperative that local officials and citizens know as much as possible about the economic and social impacts of the urban tourism/entertainment sectorS in the United States. A few studies have focused on selected components of the infrastructure for urban tourism. Public subsidies for sports teams and sports stadiums have become increasingly controversial; as a result, a substantial literature on sports politics now exists. However, at present no one knows, overall, how much American cities have invested, or what strategies they have pursued, to build a local tourism/entertainment base. In 1998 the National League of Cities (NLC) collaborated with urban scholars at the University of Missouri-St. Louis to conduct a national survey to determine how its member cities are trying to attract tourists and build local economies with significant tourism, entertainment, and cultural co mponents. 6 The sample of cities receiving the survey consisted of all municipalities with a 1989 population of more than 50,000 (according to the U.S. census), plus a random sample of cities with populations between 10,000 and 50,000. Questionnaires were mailed in November 1998 to the mayor's office of 1,110 cities, with follow-up letters sent in December. The mayor or the mayor's assistant was asked to route the questionnaire to the person most directly responsible for developing the urban tourism/entertainment sector in that city. By mid-March 1999,463 cities had responded. The response rate of 41. 7 percent was sufficient to ensure that the data could be interpreted as a representative cross section of the nation's cities. The responses from the NLC survey confirm that cities are spending substantial economic and political capital in the pursuit of tourism and

52

AN ERA OF CITY-BUILDING

entertainment and that local officials are convinced that this sector is important to their cities. Further, the results show that cities generally are following two sets of strategies simultaneously. They are (1) developing and marketing local culture through events and cultural activities and (2) constructing a tourism/entertainment infrastructure composed of a complex mixture of facilities such as convention centers, sports stadiums, renovated waterfronts, festival malls, farmers' markets, historic districts, entertainment districts, museums, and performing arts centers. Results from the NLC survey reveal that cities of all sizes, both within and outside of metropolitan areas, are investing heavily in tourism and entertainment. This finding belies the impression one might glean from reading the scant literature on urban tourism, which has focused almost exclusively on big cities. But it should come as no surprise that both tourism and entertainment are spreading throughout and beyond metropolitan areas. Previous economic sectors have done so in the past, with far-reaching consequences. TourismlEntertainment Facilities and Events Today the downtowns of most larger cities are composed of a skyline of highrise office towers that have sprung up to house corporate and professional offices. Filling the gaps in this cityscape are other structures built to support tourism, recreation, entertainment, and culture. A few years ago two leading urban scholars labeled the standard collection of atrium hotels, convention centers, festival malls, restored historic neighborhoods, domed stadiums, new office towers, and redeveloped waterfronts as the mayors' "trophy collection."? Now some of these facilities are making their appearance in suburbanjurisdictions and in towns and cities far from urban areas. Does this mean that cities are becoming more and more alike? Before attempting to answer this question, we can get some sense of the direction that cities were heading in by summarizing what we already knew before conducting the NLC survey. In the United States almost all larger cities with harbor or river access have provided subsidies for waterfront development, often as a centerpiece of an integrated tourist/entertainment space. In the 1970s Baltimore set the example of what could be done when it reclaimed obsolete and deteriorated land adjacent to its harbor for tourist and recreational uses. The vast expanse of abandoned, derelict buildings that crowded its harbor gave way to the magnificent HarborPlace development, with its marble and stone plazas, fountains, restaurants and bars, aquarium, and the two-block-long translucent pavilions designed by developer lames Rouse. HarborPlace became a model for projects elsewhere. Soon waterfront renovation became the centerpiece for many cities' downtown revival.

TOURISM AND ENTERTAINMENT

53

The recent phase of investment in convention centers began in earnest in the 1960s and the end is not yet in sight. As of July 1998, a total of 409 convention centers with exhibition space were operating in U.S. cities, and more than 70 percent of them were opened since 1970. 8 Between 1970 and 1985 more than 100 convention centers were built in the United States, and in the 1980s alone the number of convention centers increased by 50 percent. 9 In the 1990s the convention-center wars had filtered down, with smaller towns and cities joining the fray. Much is at stake in the convention-center wars. The 23,000-plus associations and 6.5 million private business establishments in the nation fuel a huge meetings industry. Associations meet, on the average, 2.8 times per year. In 1997 some 9,370 trade shows were held in North America. Tourism-related organizations alone had more than 1.4 million members by 1998, and the meetings industry itself produced $81 billion output a year, making up 2 percent of the U.S. gross domestic product. 10 With such numbers in mind, it is not surprising that both suburban and smaller nonmetropolitan cities have built or are building convention centers, often with subsidies from state governments. Professional sports franchises have been central to many cities' tourism! entertainment strategies. Cities compete vigorously for sports teams, often financing the construction of stadiums and offering subsidies such as guaranteed attendance and revenues. Because teams have moved more and more frequently in the last few years, the concessions that cities must offer are constantly on the rise-but most cities have been willing to pay them. Cities will go to extraordinary lengths to get and keep a professional sports team. Teams are increasingly mobile, and owners realize that public subsidies are theirs for the asking. From 1980 through June 1992, twenty cities sought baseball teams and twenty-four cities tried to attract football teams. Eleven cities had completed or were building stadiums, and twenty-eight more had considered building or had plans to build them. Eleven teams threatened to move in the 1980s and early 1990s, and six actually did SO.11 The competition for minor-league teams has become as vigorous as for the big-league sports, which has drawn smaller cities into the battle. 12 In an attempt to keep teams, cities have agreed to put larger and larger subsidies into stadiums-for example, more than $300 million in St. Louis to house the St. Louis Rams football team and more than $500 million in Seattle for the baseball Mariners. Since the late 1970s festival malls and entertainment centers have become a principal strategy used by central cities to capture a share of recreational shopping and tourism!entertainment, and also, to some degree, to allow them to compete with their suburbs for a share of the retail market. Ever since James Rouse opened Quincy Market in Boston in 1976, cities

54

AN ERA OF CITY-BUILDING

have heavily subsidized the construction of downtown malls.13 Today, virtually every big central city contains a Rouse mall or its equivalent in or near its downtown, and other, larger malls have also been developed in an attempt to stimulate a leisure shopping segment considered essential for urban tourism and entertainment. Urban entertainment centers are more recent and comprehensive versions of the festival mall. These complexes commonly house one or more malls, but they also spread out to portions of the surrounding city. Because they offer a way to build a defended space even in a seemingly hostile environment, entertainment centers provide even the most dilapidated cities with a strategy for reintroducing a vital culture and street life to the urban core. Recreational or entertainment districts have sprung up in virtually all central cities, usually in historic areas and often in connection with revitalized waterfronts. Contained within these districts are restaurants, coffee houses, sports bars, jazz clubs, dinner theaters, and other entertainment venues, plus an array of corporate tenants providing a standardized assortment of clothes, shoes, electronic goods, jewelry, and so on. 14 New York City's Times Square and San Francisco's Yerba Buena Center both anchor urban entertainment centers, but smaller versions have sprung up all across the United States. The facilities that make up urban entertainment districts vary, but normally they include such features as enclosed festival malls, cobblestone streets, historic street lamps, riverfront walkways, and pedestrian malls. When successful, these components come together to create a distinct identity or image that can be marketed to potential tourists and suburban visitors. In the past, nearly all entertainment districts have been located in central cities, but there is evidence that suburbs and smaller cities are beginning to build their own versions. Examples are abundant. In the St. Louis region, for example, St. Charles, an older but rapidly growing western suburb, has redeveloped its historic district into a nineteenth-century Main Street with antique and gift shops, cafes and restaurants, and a winery and microbrewery. According to the National Endowment for the Arts, everyone of the nation's fifty largest cities is providing public support for the arts,15 often within well-defined cultural districts. Some smaller cities are also offering subsidies. From the big cities (Washington, D.C., and New York with the Kennedy and Lincoln centers; respectively, and more recently, the Ford Center on Manhattan's 42nd Street) to villages (Riverhead- a hamlet 90 miles from New York City- which is building an arts and historic district), from the downtowns in need of a boost (New ark, with its $180 million New Jersey Center, opened in October 1997), to the already prosperous (San Francisco, with a newly renovated opera house and several other performance halls),

TOURISM AND ENTERTAINMENT

55

the development of local culture has become a leading formula for urban revival. The text for a major exhibit in 1998 sponsored by the National Building Museum in Washington, D.C., noted that culture has replaced both the urban renewal bulldozer and the preservation movements that followed in its destructive wake as the main focus for downtown revitalization. Cultural districts are an important expression of this new emphasis. These districts cluster major cultural institutions together-especially those emphasizing performance-and integrate them with office complexes, retail spaces, and, sometimes, residential uses. 16 The advantage of cultural districts is that they can boost the local economy by attracting tourists, while at the same time enhancing the quality of life for local residents. 17 Until the 1980s there were few casinos in any major city in the world, but in the space of less than two decades casino gaming has spread rapidly; by the end of the 1990s only two states, Hawaii and Utah, did not have gaming. 18 In 1978, Atlantic City, New Jersey, broke Nevada's monopoly on casino gaming, but it was not until 1988 that a boost was given to the spread of gaming when Congress passed the Indian Gaming Regulatory Act, which allowed tribes to negotiate with states to run gaming operations. Since then casino gaming has spread principally through this legislation, but several states and cities also have sanctioned gaming on riverboats. Gaming is still rare in central cities, but not necessarily within metropolitan regions. Despite its promise of stimulating local economic growth, in the last few years the spread of gaming has been slowed because of concerns about its social and moral impacts. Even so, casino gaming must be considered one of the possible strategies available to cities for improving their economic performance. The facilities making up the infrastructure for tourism and entertainment would be lifeless without the events and attractions that lure visitors. To some extent these attractions are now provided by corporations and entrepreneurs-this is certainly the case, for example, in sports stadiums, festival malls, and urban entertainment districts and in gaming casinos. But cities also underwrite a broad array of public events and activities that define much of the fabric of a city's local culture. Cities compete vigorously for megaevents like the Olympics and world fairs, but much more frequently they sponsor smaller events meant to carry the signature of local culture and community. Cities and towns host an almost unimaginable range of events to lure visitors, ranging from Portland, Oregon's, annual Rose Festival and Chicago's Labor Day blues festival, to the Jumping Frogs of Calaveras County (California) and the California Strawberry Festival in Oxnard, to the Gold Rush Days in Wickenburg, Arizona, and the 'Yago Night Parade in Tampa, Florida. Even the smallest cities typically sponsor or market such events as rodeos, flea markets, Fourth of July parades, and wine festivals.

56

AN ERA OF CITY-BUILDING

Table 3.1

Number of Cities Reporting Facilities Existing or Being Developed No. of cities Event Historic district or site Museum Farmer's market Performing arts center Entertainment/restaurant district Festival/retail mall Outdoor concert venue Nature preserve Cultural district or site Waterfront development Convention hotel Convention center Sports stadium Recreation facility Other facility Theme park Gaming casino

439 347 318

286 264 267 254 225 221 219 187 187

184

178 136

95

41 36

% 96

76 69

62

58 58 55 49

48 48 41 41

40 39 30 21 9

8

Note: N = 458

Such activities help define and sometimes knit together local communities. These activities often take place at other venues besides those constructed specifically for tourists and visitors. Such venues as farmers' markets, zoos and parks, ball fields, and golf courses are essential for the public life of any city or urban region. These kinds of facilities make possible the events and activities that may be eclipsed in news coverage but are nevertheless important to both local residents and sometimes to visitors and tourists. The NLC Survey: Facilities and Events

The data from the NLC survey indicate that cities are not merely engaging in copycat strategies for developing a local tourism/entertainment sector. Instead, they appear to be devising their own unique approaches. The NLC survey respondents were asked to identify the facilities that already existed or were being developed in their city. The results are displayed in Table 3.1. Survey respondents were asked to list the facilities existing or being developed within their cities and separately were asked to identify local events related to tourism/entertainment. The summary of responses reported in Table 3.1 indicates that nearly all cities responding to the NLC survey sponsor annual events and that "events" were mentioned by a larger proportion of

TOURISM AND ENTERTAINMENT

57

respondents than any physical facilities. As shown in Table 3.1, 96 percent of the cities indicated that they sponsored one or more events every year. Anchorage, Alaska, has its Fur Rendezvous; Chandler, Arizona, an Ostrich Festival; Larkspur, California, a Rosebowl Dance. Placentia, California, sponsors concerts in the park, Redondo Beach, California, puts on a Lobster Festival, and Fort Pierce, Florida, hosts its Backus Arts Festival. Fourth of July festivals are numerous, as are rodeos, music festivals (such as Lexington, Kentucky'S Bluegrass Festival), culinary and wine fairs, arts and crafts shows, and special sporting events. It is important to note that in many instances these events probably are not oriented to outside visitors any more than to local residents, a point we explore more fully later in this chapter. Though it might be tempting to regard local events as generally limited in scale and reach, it appears that they are extremely important vehicles for projecting urban images, as well as for promoting local economic development. Many events that began as strictly local affairs have grown rapidly and changed their target audience. Corporate sponsors have made such a transformation possible; by 1999 up to 85 percent of festivals and events in the United States involved some degree of corporate sponsorship.19 In 1999, corporations were providing approximately $685 million to support festivals, fairs, and annual events. 20 For example, the Portland, Oregon, Rose Festival has become a nationally televised event, with 200 sponsors. The 'Yago Night Parade in Tampa, Florida, and the Official Shrimporee in Aransas Pass, Texas, receive corporate sponsorship, as does the Kodak Hula Show in Honolulu. Events carry the imprimatur of a city's local color and culture, and they also bring dollars into the local economy. For example, with the help of corporate sponsors, Portland spent $8 million on the Rose Festival in 1996, and it generated $79 million in spending. 21 The data in Table 3.1 also reveal that cities are investing significantly in a tourism/entertainment infrastructure. Seventy-six percent of the cities in our survey report that they have developed or are developing a historic district or site, and in many cities several historic districts exist or are being developed. The next-most-often reported facilities include museums (69 percent), farmer's markets (62 percent), performing arts centers (58 percent), entertainment/restaurant districts (58 percent), festival/retail malls (55 percent), outdoor concert venues (49 percent), nature preserves (48 percent), and cultural districts (48 percent). Except for malls, what these facilities share in common is their reference to local culture. The facilities mentioned most often by the respondents both promote heritage and culture and serve as the venues for street life and community activities. They are the "third places"the public venues outside home and work-that are necessary for fostering a sense of local community.22

58

AN ERA OF CITY-BUILDING

The big-ticket projects that often capture media attention and controversy are mentioned by fewer cities. Waterfront development (mentioned by 41 percent of cities), convention hotel projects (41 percent), convention centers (40 percent), and sports stadiums (39 percent) exist or are being built in less than half of the cities responding to our survey. Gaming casinos are mentioned by only 36 respondents; they represent just 8 percent of the survey cities. It is not possible to estimate the scale of public or public/private investment in events or such facilities as historic districts, museums, performing arts centers, or entertainment and cultural districts. However, even summed together, in most larger cities public subsidies for these facilities probably do not come close to the investment required for convention centers, stadiums, and festival malls. Though the latter facilities may be fewer in number, they may command the lion's share of a city's resources. Therefore, it would be hazardous to interpret the survey data as firm evidence that local civic leaders value events and smaller projects more than the big-ticket projects. Even four or five historic districts can involve a modest public investment, compared to one sports stadium or a convention-center expansion. It is certain that the size and character of the tourism/entertainment infrastructure varies with the fiscal capacities of cities, and it is probable that larger cities got a head start. It is also likely that suburban jurisdictions and smaller towns are beginning to compete. The dispersion and geographic specialization of the tourism/entertainment sector within metropolitan areas can be estimated by comparing responses from central cities to suburban jurisdictions in the NLC sample. 23 Tables 3.2 and 3.3 show the comparison. As expected, a large proportion of central cities report facilities existing or being developed; for example, 90 percent have museums, 87 percent have developed historic districts, and 83 percent have performing arts centers. Altogether, 65 percent or more have or are developing the ten most frequently mentioned facilities on the list. As high as these percentages are, however, it seems surprising that only 63 percent of the respondents from central cities say that their cities have built or are developing a convention center and 65 percent report that their cities have built or have in the works a festivallretail mall. These results suggest that the components making up the tourist infrastructure vary considerably from city to city. Even so, the percentage of central cities reporting key facilities is much higher than for the suburban jurisdictions. Respondents from the suburban jurisdictions indicate that 37 percent of their cities have historic districts and 35 percent have farmer's markets (data not reported in table form). These are the most frequently distributed facilities. One-quarter of the respondents reported that their cities had a festival/retail mall, but only 9 percent said that their city had a convention center and 8 percent mentioned a sports stadium. Such

TOURISM AND ENTERTAINMENT

59

Table 3.2

Number of Central Cities Reporting Facilities Existing or Being Developed Within the City Has in city 203

Event Museum Historic district or site Performing arts center Farmers' market Entertainment/restaurant district Cultural district or site Sports stadium Festival/retail mall Convention hotel Outdoor concert venue Convention center Nature preserve Waterfront development Recreation facility Other facility Theme park Gaming casino

Note: Total no. of cities reporting

186 180 171 165 156 143 137 133 133 132 129 124 119 73 49 28

24

99 99 90 87 83

80 76 69 67 65 65 64 63 60

58

35 24 14 12

=208

Table 3.3

Number of Nonmetropolitan Jurisdictions Reporting Facilities Existing or Being Developed Within the City Has in city

%

92 76 64 59 52 45 37 37 31

94

Event Historic district or site Museum Farmers' market Festival/retail mall Perform ing arts center Entertainment/restaurant district Nature preserve Convention center Outdoor concert venue Waterfront development Cultural district or site Recreation facility Sports stadium Convention hotel Other facility Gaming casino Theme park

Note: Total no. of cities reporting = 98

30 30 28

27

23

19 12 8 3

78

65 60 53 46

38 38

32 31 31 29

28

23 19 12 8 3

60

AN ERA OF CITY-BUILDING

low percentages suggest that consumers of tourism/entertainment facilities cross-commute within metropolitan areas to use these facilities. This is no more surprising than the fact that suburbanites cross-commute to jobs. In virtually all metropolitan areas, the largest and most capital-intensive facilities are likely to be located in a central city, with smaller facilities scattered throughout the suburbs but disproportionately within bigger suburban jurisdictions. Table 3.3 shows another interesting pattern. Compared to the suburbs, a significantly higher proportion of cities and towns outside metropolitan areas are reported as having major tourism/entertainment facilities. Seventyeight percent of nonmetropolitanjurisdictions in the NLC sample have historic districts or sites, and 65 percent have museums. More than half report having festival/retail malls and farmer's markets. Because these cities are not located within metropolitan areas, their facilities no doubt draw from the regions around them; by definition, cross-commuting is not possible. The survey results seem to indicate that suburban jurisdictions compete for tourism-related dollars, but the components of the tourism/entertainment infrastructure are shared broadly among many jurisdictions. Regardless of the relative scale of each city's investment, however, it is apparent that the competition for tourist/entertainment dollars is occurring throughout metropolitan areas and beyond. The survey data do not allow us to determine whether suburbs have only recently begun to build tourism/entertainment facilities. Suburbs have probably had such facilities as historic sites, farmer's markets, nature preserves, and museums for some time, and it is likely that many of them have also sponsored a variety of local events long before these became integrated into the promotion of a local tourism/entertainment sector. To the extent that the size and fiscal capacity of these cities permit, more of them may have undertaken significant infrastructure projects in the last few years. Unfortunately, our survey does not reveal whether that is the case. Why Is TourismlEntertainment Important?

The fact that so many cities have built a tourism infrastructure suggests that civic leaders believe the tourism/entertainment sector to be essential to their cities' economic performance. But just how important is it, when compared to other economic sectors? Media attention may not be a reliable indicator of the relati ve importance of tourism/entertainment to local economies. Much of the infrastructure supporting this sector provokes public debate and controversy.24 For more than a decade, for example, there has been a considerable debate about whether sports stadiums and sports franchises should be supported at taxpayers' expense. 25 Likewise, subsidies for convention centers have often encountered intense public scrutiny.26

TOURISM AND ENTERTAINMENT

61

Table 3.4

Most Important Economic Sectors in Respondent Cities

Retail and wholesale trade Manufacturing Arts, entertainment, recreation, tourism Government and public administration Finance, insurance, and real estate Professional and technical services Social services (health, education, etc.) Information/communications Construction and building trade Other

N

%

253 226

57

143 118

32 26 24 23

207

107

103

74 69 60

51

46

17 15 13

Note: Total percent is more than 100, as respondents were asked to indicate which three sectors of the local economy are currently most important to the development and well-being of their city. Total N is cumulative total for each sector for three possible responses. Denominator for percent is total responses to question (N =446).

And despite the seemingly irresistible allure of gaming-gaming entrepreneurs rarely ask for subsidies, and routinely offer to earmark a share of profits for public purposes-it has encountered so much opposition in so many places that it has spread only slowly. In contrast, other important economic sectors occupy space on business pages and in investment reports, if they receive any attention at all. Respondents were asked to list the three economic sectors (of a possible nine categories) that they considered "most important to the development and well-being of your city." Their responses are displayed in Table 3.4. Respondents listed retail and wholesale trade as among the three "most important" sectors more frequently than any other sector, followed by manufacturing and by "arts, entertainment, recreation, tourism." This trilogy was mentioned far more often than the next four most frequently mentioned sectors-government and public administration; finance, insurance, and real estate; professional and technical services; and social services. As shown by the data in Table 3.5, the respondents representing central cities identified arts/entertainmentlrecreationltourism as among the three most important sectors more often than any other. Fifty-four percent of respondents placed it among the top three economic sectors for their cities, compared to 47 percent for manufacturing and 40 percent for retail and wholesale trade. This finding is all the more notable in light of the fact that respondents could choose from a list of nine economic sectors. Though the economies of most central cities are quite diversified, obviously tourism and entertainment are regarded as essential components.

62

AN ERA OF CITY-BUILDING

Table 3.5

Most Important Economic Sectors Based on Type of City Economic sectors Central cities a Arts/entertainmentlrecreation/tourism Manufacturing Retail and wholesale trade Government and public administration Social services (health, education, etc.) Finance, insurance, and real estate Professional and technical services Information/communications Construction and building trades Other Suburban jurisdictionsb Retail and wholesale trade Manufacturing Arts/entertainmentlrecreation/tourism Finance, insurance, and real estate Professional and technical services Government and public administration Social services (health, education, etc.) Information/communications Construction and building trades Other Nonmetropolitan jurisdictionsC Retail and wholesale trade Manufacturing Arts/entertainmentlrecreation/tourism Government and public administration Social services (health, education, etc.) Finance, insurance, and real estate Professional and technical services Construction and building trades Other Information/communications

Total

%

112 96 83 72 52 48 41 40 32 30

54 47 40 35 25 23 20 19 16 15

109 62 50 45 45 36 28 26 22 15

73 42 34 30 30 24 19 17 15 10

59 59 40 30 20 18 17 16 13 7

62 62 42 32 21 19 18 17 14 7

'Total N is larger than number in ·subsample, as respondent was asked to indicate which three sectors of their local economy are currently most important to the development and well-being of their city. Total N is cumulative total for each sector for three possible responses. Denominator for percent is total number of cities in subsample responding to question (N = 206). b(N = 149). C (N = 95).

TOURISM AND ENTERTAINMENT

63

By contrast, only 34 percent of respondents from the suburbs listed tourism/entertainment among the most important three economic sectors for the economic well-being of their jurisdictions. Retailing/wholesaling easily leads the list-this sector was identified among the top three by 73 percent of respondents-and manufacturing was next (at 42 percent). For cities and towns outside metropolitan areas, manufacturing is tied with retailing/wholesaling (mentioned by 62 percent of respondents), while arts/entertainment/ recreation/tourism is identified as among the three most important sectors by 42 percent of respondents. In answering a separate question assessing the importance of tourism/ entertainment, most of the respondents in our sample-78 percent of all cities-considered tourism/entertainment to be "extremely" or "somewhat" important to the "future development and well-being" of their city. Respondents from central cities replied somewhat differently to this question than did their suburban counterparts, however. Fifty-two percent of the respondents from the central cities indicated that the tourism/entertainment sector was likely to be "very important" to the health of their cities in the future, compared to only 28 percent of the suburban respondents who reached the same conclusion. The components making up the infrastructure of urban tourism/entertainment may serve various purposes. Tourism has famously been called the "industry without smokestacks," but surely such a claim understates the costs associated with developing the tourism/entertainment sector. Any development strategy involves trade-offs, and tourism and entertainment as an industry is not likely to be an exception. Making a city attractive to visitors or maximizing the economic benefit of tourism facilities may sometimes compromise the quality of life for local residents. This could happen, for instance, if a hotel and convention-center complex, or a sports stadium, were built in or near a residential area. Civic leaders necessarily must choose among the goals to be accomplished by developing tourism/ entertainment. We asked respondents to evaluate the motivations and goals of local decision makers along these same dimensions. Table 3.6 shows the results. The respondents make sharp distinctions among the kinds of tourist/ entertainment facilities and the goals they are meant to achieve. The five facilities that respondents ranked as most important for attracting visitorsconvention centers, entertainment districts, and sports facilities lead the list-do seem to be specialized to achieve that purpose. The meetings industry is a staple commodity for many cities. It is a rapidly growing and well-organized industry that has become the object of intense interurban competition. 27 Historic districts, sports facilities, and festival/

64

AN ERA OF CITY-BUILDING

Table 3.6

Top Contributing Tourist Facilities for . ..

Attracting outside visitors 1. Convention center 2. Entertainment/restaurant district 3. Sports facility 4. Historic district 5. Festival/retail mall The economic vitality of the city 1. Entertainment/restaurant district 2. Convention center 3. Festival/retail mall 4. Major convention hotel 5. Sports facility The quality of life of city residents 1. Performing arts center 2. Nature reserve 3. Entertainment/restaurant district 4. Sports facility 5. Museum

N

%

95 65

23

53 51

13 12

61

125 109 104

79 62

122 82

76 67 65

16

15

32

28 27 20

16

30

20 19

16 16

Note: Respondents were asked to indicate which three facilities were most important for each of the three goals. Total N is the cumulative total for three possible responses. The denominator is the total number of cities responding to each of the three answers (N = 409 for first question, N = 393 for second, N = 408 for third).

retail malls are also tourist facilities that cities commonly use to attract outside visitors. The economic vitality of a city is likely to be intimately connected to the city's ability to attract visitors. It makes sense, therefore, that the "top five" list of facilities designed to attract visitors is similar to the list of facilities that respondents consider important for promoting local economic vitality. The minor differences in these lists are, however, interesting. According to the respondents, historic districts attract visitors, but they do not necessarily contribute significantly to local economic vitality. Sports stadiums are ranked third among facilities for attracting visitors but fifth (a distant fifth, according to the data) in enhancing local economic vitality. It is interesting that the survey respondents offer an assessment of sports stadiums that closely mirrors conclusions reported in the scholarly literature. Recent scholarship shows that stadiums are, in some sense, "loss leaders"; they may contribute to the "big league" image of a city, but they usually exert little positive economic impact, despite their high-profile status. 28 The data displayed in Table 3.6 show that survey respondents carefully distinguish between the facilities that are important for attracting visitors

TOURISM AND ENTERTAINMENT

65

Table 3.7

Facilities Not Currently in Respondent Cities That Could Produce the Greatest Benefit N Conference center/hotels Performing arts center/arts centers/concert venues/museums Sports stadium/activities Entertainment/restaurant districts Hotels/motels Retail facilities Waterfront districts Recreation facilities Theme parks

179

164 135 70 53 51

47

38 38

Note: Table 3.7 was created by summarizing written responses into the preceding categories.

and boosting the local economy and those judged to be important for enhancing the quality of life of local residents. Performing arts centers lead the "quality of life" list, followed (distantly, according to the data) by nature preserves (which, we assume, includes wooded areas, walkways and bikeways, parks, botanical gardens, and possibly zoos). Entertainment/restaurant districts and sports facilities are third on the "quality of life" list, followed by sports facilities and then museums. Not shown in the table, but close behind museums, are historic districts and waterfront development. We also asked respondents to identify the facility that their city does not have but that could potentially produce the greatest benefit for their city. The listing adds up to a wish list that could clarify whether there is one predominant strategy that urban officials currently are using. As displayed in Table 3.7, a conference center and conference hotel led a "wish list" of facilities, followed by performing arts centers/arts centers/concert venues/museums (these categories are lumped together because respondents were not careful in making distinctions among these four facilities). Sports stadiums and sports activities appear third on the list. It should be noted that these are big-ticket items that often require huge public subsidies, and perhaps that is why quite a few cities have not built them. If wishes translate into reality sometime in the future, the data in Table 3.7 indicate that in the years ahead public investment in the infrastructure of tourism/ entertainment will spread to more cities. The public may not always share the perception that major new facilities are needed. Thus, we asked respondents to comment on the justifications that civic leaders state to the public when they promote tourism/entertainment investments. The data are reported in Table 3.8.

66

AN ERA OF CITY-BUILDING

When asked to name the three selling points or justifications used by local officials to promote tourism/entertainment projects, the survey respondents mentioned "benefit to community residents" more often than any other stated goal. The three other main selling points mentioned most frequently were the goals of raising "new/more tax revenue," "improving the city's image," and "supporting other business activities." The goal of "stimulating local employment" was mentioned by about one-third of respondents. Of course, the benefits expected from tourism/entertainment also entail costs. Respondents were asked to check a number of "negative consequences" associated with the development of the tourism/entertainment sector in their city. Responses are shown in Table 3.9. As shown in Table 3.9, respondents mentioned traffic/parking more often than any other problem, and by a wide margin. Indeed, while traffic and parking problems were identified by more than half of all respondents, only about one-third or fewer of the respondents mentioned any other problems at all. About one-third of the respondents considered increased service costs and greater public debt to be associated with the local tourism/entertainment sector. Only 27 percent considered low-wage jobs to be a side effect of tourism/entertainment, and 21 percent cited public safety concerns.

Information Networks Urban policymakers are able to mine a multitude of sources for inspiration and ideas. The sources of information about the tourism/entertainment sector are diverse-for example, formal and informal communications, official fact-finding trips to other cities, and exchanges of information at conferences hosted by national organizations such as the National League of Cities, the U.S. Conference of Mayors, and the International City/County Management Association. In addition, local policymakers may garner information from media accounts, industry publications, and research and consultants' reports. The Urban Land Institute, for example, has published comprehensive surveys of entertainment facilities and entertainment centers, and its publications reach a broad audience of policymakers and practitioners.29 Such sources are important communications vehicles for sustaining an information network about local economic regeneration through tourism and entertainment. We asked respondents to identify the sources of information they mine for ideas about how to promote tourism/entertainment. Table 3.10 shows the sources that survey respondents consider important. The data displayed in Table 3.10 seem to indicate that urban policymakers look primarily to local sources of information to learn about tourism/ entertainment strategies. The three sources of information that respondents

TOURISM AND ENTERTAINMENT

67

Table 3.8

Justifications Used in Promoting Tourism-Related Projects Benefit to community residents New/more tax revenue Local image Support other business activities Local employment Support area hotels Support area restaurants Other

N

%

273 247 213 212 165 57 43 24

65 59 51 51 39 14 10 6

Note: Total percent is more than 100% because respondents were asked to indicate which three selling points or justifications were most important for tourism projects when voter or legislative approval is required. Total N is a cumulative total for eachjustification for three possible responses. The denominator for percent is the total number of cities responding to the question (N = 418). Table 3.9

Negative Consequences of Tourism/Entertainment Sector Traffic/parking Increased service costs Increased public debt Low wages Public safety Increased prices Other

Note: N

N

%

266 158 146 124 95 19 33

58 34 32 27 21 4 7

=458

Table 3.10

Importance of Sources of Information for New Ideas on Tourism Initiatives Very important

Neighborhood leaders/ organizations Local developers Other cities in region Research reports General media Consultants National conventions Industry publications Urban leaders from outside region National organizations

Note: N=458

Somewhat important No. of cities %

No. of cities

%

204 189 163 115 106 101 87 72

45 41 36 25 23 22 19 16

176 192 218 224 255 242 183 241

43 43

9 9

199 165

Not important No. of cities

%

38 42 48 49 56 53 40 53

45 45 46 78 65 79 151 106

10 10 10 17 14 17 33 23

43 36

172 173

38 38

68

AN ERA OF CITY-BUILDING

mentioned the most often as "very important" are neighborhood leaders/ organizations, local developers, and other cities in the region. All three of these information sources are local rather than national. Does this mean that national information sources or networks are unimportant, as far as the respondents are concerned? Not at all. About three-quarters of the respondents indicated that research reports, general media, and consultants (both local and nonlocal) were either "very important" or "somewhat important" sources of information, and two-thirds said the same about national conventions and industry publications. About half of the respondents also indicated that urban leaders from outside their region and national organizations were "very" or "somewhat" important as sources of information. Reliance on a multitude of sources, both local and national, would be essential for the full-time professionals charged with promoting the local tourist/ entertainment sector. As cities build a cadre of professionals devoted to promoting the local tourism/entertainment sector, the links with other cities and with the tourism and meetings industry are bound to become stronger. Local Civic Leadership

In the 1980s a generation of "messiah" mayors were able to forge a close connection between public-sector institutions and local business and civic leadership.3o In some cities these coalitions were centered almost exclusively in a city hall-downtown business alliance,3! but in others neighborhood and citizens' groups have exerted a strong, even on occasion a commanding, influence. 32 As a way of determining where the cities in our survey might fit between these two poles, we asked respondents to assess the role of various participants in promoting or building the local tourism/entertainment sector. The data in Table 3.11 suggest that a select group of local participants is primarily involved in the debate over the development of the tourism/ entertainment sector. More than three-fourths of the survey respondents listed the mayor's office as "very involved." Local planning agencies were the second-most-named "very involved" participant, followed by local development agencies and convention and tourism bureaus. Though quite a few participants were named as "very involved" or "somewhat involved," none were mentioned nearly as frequently as was the mayor's office and the three public agencies. The pivotal role of the public sector is further highlighted by respondents' answers when we asked them to rate the importance of public resources in the development of entertainment/tourist facilities. Fifty-seven percent of our respondents said that public resources were so important that "the deal couldn't get done without them," compared to only 3 percent who said that

Mayor's office Planning agency Development agency Convention and visitors bureau Downtown business group Local media Local businesses Regional chamber of commerce Local residents Community-based organizations Consultants Architects Local civic organizations Hospitality industries County agencies or officials Construction companies State agencies or officials Foundations Labor unions Neighboring jurisdictions Federal agencies or officials

N 351 247 210 203 197 176 167 166 139 111 106 105 91 91 77 62 57 46 25 20 20

Very involved

% 77 54 46 44 43 38 36 36 30 24 23 23 20 20 17 13 12 10 5 4 4

N 66 100 156 117 167 216 237 179 265 219 229 219 265 169 203 184 212 155 100 150 124

% 14 22 34 25 36 47 52 39 58 48 50 48 58 37 44 40 46 34 22 33 27

Somewhat involved

Involvement of Local Actors in the Public Debate over Tourism Initiatives

Table 3.11

5 53 46 102 48 31 14 66 25 80 87 91 62 155 132 166 147 208 278 241 264

N

% 1 11 10 22 10 7 3 14 5 17 19 20 13 34 29 36 32 45 60 53 58

Not involved

0-

10

70

AN ERA OF CITY-BUILDING

public resources were not important at all. Even more telling, when we asked respondents to name the "most critical actors" in the decision-making process for local arts/entertainment/tourism projects, the mayor's office was mentioned two and one-half times more often than was the second most frequently mentioned "critical actor": the planning agency. These two together, presumably, add up to City Hall. Respondents also identified local residents and county agencies and officials as critical actors in local decision making, but not nearly as often as the mayor's office and planning agencies. However important public leadership and institutions may be in promoting tourism/entertainment, the survey results indicate that few cities have put together a formal strategy for developing this sector. Respondents indicated that only 27 percent of central cities and 14 percent of noncentral cities in our sample have devised formal plans. This does not necessarily indicate that public leadership is lacking, however-in recent years it has become rare for any city to develop a master plan,33 and it would be odd if the development of tourism/entertainment were an exception to this method of operating. In place of a master plan, cities normally assemble coalitions on behalf of particular projects and utilize quite specialized public powers and fiscal instruments on behalf of individual facilities and projects. 34 As indicated by the data in Table 3.12, respondents ranked four methods of public financial support as the most important among several possible sources: local infrastructure support, local bond financing, locallandlfacilities donation, and TIF (tax increment financing). Federal and state assistance is considered far less important, in comparison. Federal Community Development Block Grant (CDBG) funds are considered fifth in importance, followed by local tax abatements, state bond financing, and local loan guarantees. Obviously, the public leadership and resources that count are mostly local, with the federal government and the states playing a supplementary and secondary role. This impression is strengthened by the data reported in Table 3.13, which shows that 54 percent of the cities in our study (according to our respondents) have hired professionals devoted to the task of promoting the city for tourism, and 68 percent have a Convention and Visitors Bureau. Basically, local officials are relying upon their own resources to promote their tourism/entertainment sectors. Conclusion: The Spread of Tourism and Entertainment The NLC survey provides new information on the importance and character of tourism and entertainment to cities in the United States. This sector has become essential for the revitalization and economic development of cities of all sizes, both within and beyond urban areas. The NLC survey shows that

TOURISM AND ENTERTAINMENT

71

Table 3.12

Importance of Commonly Used Methods of Public Financial Support

Tax increment financing Local tax abatement Local bond financing Local loan guarantees Localland/facilities donation Local infrastructure support State bond financing State tax credits Federal tax credits Federal CDBG funds Federal transportation funds Other

N

%

117 85 200 51 194 229 63 40 16 92 48 125

29 21 50 13 49 57 16 10 4 23 12 31

Note: Respondent was asked to indicate which four methods of public financial support were most commonly used for major arts/entertainmentlrecreationltourism initiatives. The total N is a cumulative total for four possible responses. Table 3.13

Presence of ... N

%

No

248 192

54 42

No

311 136

68 30

Professionals marketing the tourist sector Yes Convention and visitors bureau Yes

Note: N

=458

cities are not only investing in a standardized complex of facilities; they are also playing up aspects of their unique history and culture, and thus stamping their own imprint upon their local tourism/entertainment sector. Respondents to the NLC survey rate tourism/entertainment as extremely important for their cities' economic health and future, but other basic sectors, especially manufacturing and retailing, are still seen as pivotal. Apparently central cities are staking their future on the continued development of tourism/entertainment more than are suburban jurisdictions and cities outside metropolitan areas. However, our data make clear that tourism/ entertainment is considered important beyond the central cities. Suburban jurisdictions and smaller towns are investing in major components of the tourism/entertainment complex. This finding provides an understanding of

72

AN ERA OF CITY-BUILDING

an extremely important dynamic, one that has not been sufficiently appreciated up to now. Manufacturing, retailing, and wholesaling were once concentrated in central cities, but in the twentieth century these sectors moved away from the core. Could a similar process be occurring with tourism/entertainment? Yes and no. Central cities possess unique characteristics that make them attractive locations for these activities. Cities are storehouses and repositories of historic architecture, history, and culture. Tourism does not take place within facilities alone; it is also frequently focused on the city itself. Most suburbs cannot easily duplicate the ambiance of crowded city streets and waterfronts. Nevertheless, most cities may have opportunities to seek a specialized niche that emphasizes a unique identity, if they wish to do so.

Notes This chapter is a revised version of a Research Report published by the National League of Cities (April 2000). See Tourism and Entertainment as a Local Economic Development Strategy. A Survey o/City Halls, by the same authors. 1. WTO (World Trade Organization), Yearbook of Tourism Statistics. Vol. 1, 47th ed. (Madrid: WTO, 1995), 4. 2. David Laslo, "Proliferating Convention Centers: The Political Economy of Regenerating Cities and the St. Louis Convention Center Expansion" (St. Louis: University of Missouri, doctoral dissertation, 1999), 64. 3. Ibid., 64. 4. Briavel Ho1comb, "Marketing Cities for Tourism," in Dennis R. Judd and Susan S. Fainstein, eds., The Tourist City (New Haven, CT: Yale University Press, 1999),66. 5. For purposes of syntax and brevity, we refer to this sector throughout this chapter as the tourist/entertainment sector. It is composed, however, of a complex mixture of activities that may variously (and often loosely) be labeled tourism, leisure, entertainment, and culture. The World Trade Organization defines a tourist as a traveler who stays overnight (WTO, Yearbook, 1995). By employing the concept of entertainment in tandem with tourism we are intending to recognize that a large proportion of the facilities and events built to promote urban tourism are used and attended by suburbanites and others who commute and stay for only a few hours. 6. We want to thank the Research Board of the University of Missouri for funding this research. We also want to thank the staff at the National League of Cities (NLC) for helping to design and administer the survey reported here. In particular, we wish to recognize the efforts by Jamie Woodwell (former NLC research manager), and Audrey Harris, NLC intern. 7. BernardJ. Frieden and Lynn B. Sagalyn, Downtown, Inc.: How America Builds Cities (Cambridge, MA: MIT Press, 1989). 8. Laslo, Proliferating Convention Centers, 57. 9. Heywood T. Sanders, "Building the Convention City: Politics, Finance and Public Investment in Urban America," Journal 0/ Urban Affairs 14 (1992): 135-159. 10. Laslo, "Proliferating Convention Centers," 67.

TOURISM AND ENTERTAINMENT

73

11. Charles C. Eichner, Playing the Field: Why Sports Teams Move and Cities Fight to Keep Them (Baltimore, MD: lohns Hopkins University Press, 1993). 12. Arthur T. lohnson, "The Sports Franchise Relocation Issue and Public Policy Responses," in Arthur T. lohnson and lames H. Frey, eds., Government and Sport: The Public Policy Issues (Totowa, Nl: Rowman and Allanheld, 1985), 232. 13. Rodrigo SaIcedo, "Shopping Malls: Postmodern Public Spaces or Enclaves of Consumption? The Case of Santiago de Chile" (University of Illinois at Chicago: unpublished paper, 2001). 14. UU-The Urban Land Institute, Developing Urban Entertainment Centers (Washington, DC: Author, 1998). 15. Bruce Weber, "Cities Are Fostering the Arts as a Way to Save Downtown," New York Times (November 18, 1997), B2. 16. Hilary Anne Frost-Krumpf, Cultural Districts: The Arts as a Strategy for Revitalizing Our Cities (Washington, DC: Americans for the Arts, 1998), 11. 17. National League of Cities, "Arts and Culture: More Than lust Entertainment," Issues and Options 6, no. 4 (Washington, DC: National League of Cities, 1998). 18. William R. Eadington, "The Emergence of Casino Gambling as a Major Factor in Tourism Markets: Policy Issues and Considerations," in Richard Butler and Douglas Pearce, eds., Change in Tourism: People, Places, and Processes (London and New York: Routledge, 1995). 19. Edwin McDowell, "The Parade of Corporate Sponsors," New York Times (July 16, 1997), C 17. 20. Ibid. 21. Ibid. 22. Ray Oldenburg, The Great Good Place (New York: Paragon House, 1989). 23. The Federal Office of Management and Budget Circular 99-04 provided a very recent comprehensive listing of each MSA, CMSA, and PMSA, as well as geographic definition of each. The sample cities were compared to the geographic definition to obtain an ordering of the cities according to whether they are central cities, suburban municipalities, or municipalities outside urban areas. 24. Peter Eisinger, "The Politics of Bread and Circuses: Building the City for the Visitor Class," Urban Affairs Review (lanuary 2000): 316-333. 25. Mark Rosentraub, Major League Losers (New York: Basic Books, 1998). 26. Heywood T. Sanders, "Convention Center Follies," The Public Interest (Summer 1998): 58-92; Laslo, Proliferating Convention Centers. 27. Laslo, Proliferating Convention Centers. 28. lohn Zipp, "The Economic Impact of the Baseball Strike of 1994," Urban Affairs Review 32, no. 2 (November 1996): 157-185; Sanders, "Convention Center Follies." 29. David C. Petersen, Sports, Convention, and Entertainment Facilities (Washington, DC: Urban Land Institute, 1996). 30. lon Teaford, The Rough Road to Renaissance (Baltimore: lohns Hopkins University Press, 1990). 31. Clarence Stone, Regime Politics: Governing Atlanta, 1946-1988 (Lawrence: University Press of Kansas, 1989); Bryan D. Jones and Lynn W. Bachelor, The Sustaining Hand: Community Leadership and Corporate Power, 2d ed. (Lawrence: University Press of Kansas, 1993). 32. Barbara Ferman, Challenging the Growth Machine: Neighborhood Politics in

74

AN ERA OF CITY-BUILDING

Chicago and Pittsburgh (Lawrence: University Press of Kansas, 1996); Elaine B. Sharp, ed., Culture Wars and Local Politics (Lawrence: University Press of Kansas, 1999); Robert W. Bailey, Gay Politics, Urban Politics: Identity and Economics in the Urban Setting (New York: Columbia University Press, 1999). 33. Susan S. Fainstein, The City Builders: Property Development in New York and London, 1980-2000 (Lawrence: University Press of Kansas, 2001). 34. Frieden and Sagalyn, Downtown, Inc.

Part 11 Building a Tourist Space

Thispageintentionally leftblank This

page

intentionally

left

blank

4 DAVID LASLO, CLAUDE LOUISHOMME, DONALD PHARES, DENNIS

R.

JUDO

Building the Infrastructure of Urban Tourism: The Case of St. Louis

Like other older port and manufacturing cities in all the Western nations, St. Louis has been looking for a new economic niche ever since the deindustrialization of the 1970s and early 1980s. Between 1950 and 1980 St. Louis was home to notable industrial aggregations in banking, chemicals, food and beverage products, garment making, and auto assembly. In the late 1970s thirty companies with more than $100 million in annual sales and twelve with sales of more than $1 billion were located in the city of St. Louis.! Companies like Ralston Purina, Monsanto, and Anheuser-Busch brought image and civic leadership to the city. Twenty-four of the nation's twentyfive largest U.S. companies had operations, offices, or plants in the metropolitan area, and most of them were located in or near downtown. Two hundred ninety-six of the Fortune 500 companies in the 1970s were in the St. Louis region in some capacity.2 The region's economy was heavily dependent upon manufacturing. In 1951, goods-producing acti vities accounted for 51.1 percent of the workforce in St. Louis, a figure that virtually matched the national ratio of 51.3 percent. Only a decade later manufacturing had fallen to 39.6 percent of employment in St. Louis and 44 percent in the region, but worse was yet to come. In 1970 manufacturing still accounted for 35 percent, but then the bottom fell out: manufacturing accounted for just 16 percent of the region's jobs, and by then all but a few of the large manufacturing firms had left the city (see Table 4.1). The city's historic role as a retailing center had been eroding for some time as well, and it went into steep decline at the same time that manufacturing retrenched. As shown in Table 4.1, from 1951 to 1997, employment in retailing fell in the city by 57.5 percent. In 1985, 18 percent of the region's retailing was located in the city, but this proportion fell to 13 percent by 77

1951-69 -8.6 -26.0 7.1 -22.3 -26.5 8.1 21.1 -19.1 -33.0 17.7 105.9

1969-74 -13.4 -7.2 81.8 -16.0 -6.9 -17.4 -21.8 -29.1 -18.6 -20.9 -8.0

1974-80 -13.8 -28.3 -40.8 8.2 -31.3 -3.1 -1.9 -0.9 -15.8 -4.9 3.5

1980-84 -9.4 -23.9 -9.6 -24.8 -23.9 -1.6 -9.8 -14.3 -8.1 -4.6 9.6

1984-89 -4.0 -24.8 -78.2 -2.6 -27.2 4.8 34.3 -27.2 -0.4 13.7 4.5

Source: V.S. Census Bureau 1950, 1970, 1980, 1990, 1999. *Nonagricultural private employment only; does not include government employment.

Total employment' Goods producing Mining Construction Manufacturing Service producing Transportation Wholesale Retail Finance Services

City of St. Louis Percent Change in Employment by Economic Sector, 1951-1997

Table 4.1

1989-93 6.4 -3.1 -11.5 5.8 -4.6 9.2 -31.6 43.9 3.6 -0.8 23.0

1993-97 4.5 -4.2 -53.4 5.0 -5.8 6.8 -3.8 -2.3 -2.3 4.6 14.3

1951-97 -34.0 -73.8 -90.6 -42.5 -76.5 4.1 -25.9 -50.1 -57.5 -0.3 215.9

00

-J

THE CASE OF ST. LOUIS

79

1997. 3 The city's declining economic fortunes were paralleled by a population exodus that exceeded that of any other major city in the country (Table 4.2). In the half century from 1950 to 1998 St. Louis's popUlation plummeted from 856,796 to 339,316 people, a 60.4 percent loss.4 In recent years other sectors have helped fill the void left by the manufacturing exodus; indeed, the economic makeup of St. Louis's economy has become, as a result, quite complex. Since the early 1990s the fastest-growing sectors of the city's economy have been in health services, communications, and technology-based industries. However, most public attention and the lion's share of public resources have been invested in downtown development, which has been led, in particular, by the construction of facilities to support tourism, entertainment, and culture. In a period when office-building construction practically stood still (the last major privately financed office building built in St. Louis was completed in 1989), the tourism sector has carried nearly all of the burden of development. Table 4.3 shows the cost and public investment in the essential components of this infrastructure. Public subsidies in the form of real estate tax abatements, direct public investment, and infrastructure improvements have risen over time-a clear indication of the importance that public officials and civic elites attach to this sector. At first glance, it appears that civic elites in St. Louis have pursued a conscious strategy of development. First, the city fought hard for a share of the $80 billion national-meetings market by building and then expanding a world-class convention center. 5 Second, public officials and civic elites pushed to develop three major entertainment and shopping venues-an entertainment district close to the Mississippi River, and two downtown malls. Third, St. Louis invested heavily in sports facilities, probably because civic elites have been extremely sensitive to St. Louis's image as a city in decline. Sports had become viewed simultaneously as a way to achieve an economic turnaround and also as a means of establishing that St. Louis is "on the move."6 And fourth, the city had tried, unsuccessfully, to attract a major gaming casino on the riverfront as a way of leveraging major waterfront development. Despite the impressive scale of this rebuilding effort, the separate projects have not created an urban environment friendly to tourists. Civic elites have supported the building of entertainment and tourist facilities one at a time, and the arguments used were always similar: that this particular project was needed to help save the downtown. Despite the involvement of civic leaders in each project over time, they were not guided by an overall strategy or guiding vision. The result, after decades of activity, is that St. Louis has managed to construct all of the components of the contemporary infrastructure devoted to tourism and entertainment, yet there is no "tourist space." Instead, the facilities are scattered, with the Cervantes Convention Center

80

BUILDING A TOURIST SPACE

Table 4.2

Average Annual Population Growth Rates, Data on Metropolitan Statistical Areas, St. Louis, and United States, 1950-1999

Total MSA City of St. Louis MSA-Cityof St. Louis United States

1950-70

1970-80

1980-90

2 -1.4

0.1 -2.7

0.4 -1.2

1990-99 0.3 -1.7

1950-99 1 -1.5

5.6 1.7

0.9 1.1

0.8 1

0.6 1

3.3 2

Source: U.S. Census Bureau 1950, 1970,1980,1990,1999. Table 4.3

Summary of Development Cost and Public Assistance of St. Louis Urban Tourism Infrastructure Component name Busch Stadium and garages Laclede's Landing Cervantes Convention Center St. Louis Centre Union Station Convention center expansion President Casino Kiel Center and garages TWADome Total

Year completed 1966 1985 1977 1985 1985 1993 1994 1994 1995

Public assistance'

% Public subsidy

51.0 36.4 35.0 176.5 140.0 128.0 35.0 170.0 258.0

20.0 20.0 32.0 66.5 20.0 128.0 0.0 97.0 258.0

39.2 54.9 91.4 37.7 14.3 100.0 0.0 57.1 100.0

1,029.9

641.5

62.3

Total cost ($ million)

Source: Downtown Now, Inc. and numerous legal and government documents. *Includes direct cash and tax-exempt bond financing only. Does not include tax abatements and other investment tax credits.

and the attached Edward D. Jones Dome (the Trans World Dome until it was renamed in 2002) anchoring the north side of the downtown area and Busch Stadium the south side, but the other facilities are distant from or cut off from downtown access. As a result, as shown in Map 4.1, St. Louis has been more successful in building the pieces than in constructing a space for tourism and entertainment. Cervantes Convention Center: From "Box with Docks" to World-Class Center

St. Louis entered the fierce national competition for the meetings and convention business with the completion of the Cervantes Convention Center in

Map 4.1

Union Station

Downtown St. Louis

Union Station

Planning and Urban Design Agency, City of St. Louis.

Union Station

President Casino

70 Casino President Lacledes Casino Casino President Casino Lacledes Casino Mississippi River

00

82

BUILDING A TOURIST SPACE

1977. The center was named after a 1960s-era mayor who sought to boost tourism in St. Louis through the purchase and brick-by-brick transfer of the Spanish Pavilion (of the 1964 New York World's Fair) to the city's signature park, Forest Park. He was also associated with an embarrassing episode when he persuaded the city to float a replica of Columbus's ship, the Santa Maria, up the Mississippi River to the city's waterfront, where it promptly sank during a thunderstorm. Fortunately, his namesake center has enjoyed a better fate. When opened, the 120,000 square foot structure was reported to be the ninth largest in the United States.1 Located on the northern end of a desolate and bleak downtown, the $36 million pavilion featured a box design that included some convention center bare essentials-three meeting halls, a lobby, loading docks, and kitchen facilities. The location of the center was bitterly contested; some civic leaders wanted to pull development into the downtown from its southern end, where a cluster of office buildings and the Cardinals' baseball stadium provided an anchor. Others wished to use the convention center as a buffer against a wasteland of undeveloped land on the northern side of the downtown. This faction carried the day. Because of the double-digit inflation of the mid-I970s, the interest rate on the convention-center bonds was the highest in the city's history. As a result, the capital raised by the bond issue fell $3 million short. In an act of civic leadership that would soon become surpassingly rare, August Busch, Jr., agreed to chair a fund-raising effort. Corporate contributions poured in, and by 1976 the $3 million in equity capital had been raised, with local labor unions kicking in the final $100,000. 8 When the center opened in March 1977, it was hailed as a monument to civic cooperation. Though it was among the top ten convention centers in the country in exhibit space when opened, the center's minimalist design quickly rendered it too Spartan compared to centers elsewhere. 9 Some management scandals played up in the local press in the late 1970s provoked some local soul-searching, but civic leaders judged the meetings industry to be essential to the future of the downtown. By 1983 a new management team had been green-lighted by St. Louis's corporate elites to pursue the design and to finance an expansion. The effort to expand the center took almost ten years; during that time there were three mayoral elections, a changing cast of development and tourism officials, a high-profile war between the city and St. Louis County, and an upturn in the economy. The project took so long because it became embroiled with an effort to build a domed football stadium that might be attached to the convention center. City officials considered a stadium essential to St. Louis's development, but officials representing the suburbs of

THE CASE OF ST. LOUIS

83

St. Louis County, which surrounded the city on all sides west of the Mississippi River, undertook an effort to build the stadium first. A vitriolic, protracted battle raged for years between the mayor and the county executive. In the middle of this war, after the 1987 season, the St. Louis Cardinals football team left town and moved to Phoenix, but it was a move long expected. The loss of the team sent shock waves through the region, and the city's civic leaders were clearly spooked. In 1987 civic elites asked the voters to approve an increase in the hotel and restaurant tax. The vote carried by a razor-thin margin. lO Because the cost and political capital necessary to build a stadium were obviously very considerable, the expansion plan was finally separated from the stadium issue. After a complicated public process that produced numerous design changes, the Board of Aldermen approved bonds in early 1989, and a groundbreaking ceremony occurred in July of that same year. When the southern expansion opened in May 1993, the cost had risen from its original estimate of $60 million to just under $130 million. Exhibition space increased from 240,000 square feet to 340,000 square feet, which now included a 28,000 square foot ballroom and a 1AOO-seat lecture hall. Though given high marks by industry officials for its design and versatility, the center still suffered from a bungled attempt to build a complementary I,OOO-room convention headquarters hotel. Because of a widespread consensus that the city needed more hotel space to guarantee the center's success, city officials worked year after year to find ways to subsidize a hotel close to the center. Finally, in 1999 the board of the region's Empowerment Zone approved the issuance of $90 million in bonds to help subsidize a hotel, and in 2001 the final financing arrangements were hammered out, with still more public subsidies on offer. Perhaps the most striking difference between the original center and the expansion was that the tourism and development officials who built the expansion were motivated less by a business/profit mentality that limited the size and design of the original center and more by an aesthetic and professional perspective that emphasized design even at the expense of cost considerations. A vaulting, expansive south-facing glass fa 752,000 823,173 1,504,OOOC

:3

108

BUILDING A TOURIST SPACE

redevelopment component. The first "arts and recreation for redevelopment strategy" focused on moving arts and cultural venues closer to the suburbanites who were moving away from center-city Indianapolis. Indianapolis's initial recreation and culture program involved a set of new facilities in a lengthy (east-west) linear arts district in an area four miles north of the decaying downtown area. A new art museum was built, as was a concert hall for the city's symphony on the campus of a private university. (The symphony would move downtown in the 1980s.) Indianapolis's championship basketball team, the America Basketball Association's Indiana Pacers, would play its home games in an arena on the eastern edge of this arts district. Focusing on an arts and culture strategy midway between the downtown core and the expanding suburbs did nothing to blunt suburbanization trends or change Indianapolis's image. The new facilities were simply too far apart to create any coherent image or synergy and may have even fostered a greater emphasis on a decentralization of economic activity and suburbanization. In addition, the city's remaining downtown business interests feared that the continuing decline of the core area would reduce the value of their assets. Many community leaders also feared that the remaining businesses in downtown Indianapolis, including the city's largest private and most prominent employer in the downtown area, the Lilly Corporation, would follow other firms to the suburbs or, worse, leave the region. The sports and downtown development program was Indianapolis's third plan to enhance the city's image and economy. This new policy initiative also relied on leadership from the corporate community (including the LiIIy Corporation), the consolidated city-county government, the state, and the philanthropic sector (Lilly Endowment). Two nongovernmental groups also assumed key or prominent roles in the redevelopment strategy. The Greater Indianapolis Progress Committee (GIPC) was created in 1964 and 1965 to involve leading citizens in the development of the city. The original impetus behind the creation of GIPC was to tap into volunteers and to include prominent citizens in the establishment of new policies and a new Indianapolis.4 It would not be until the 1990s that GIPC expanded its membership to include a broader representation of all of Indianapolis's residents. In its earliest years GIPC's membership was skewed toward Indianapolis's elite community leaders. As a result, the sports and downtown development emphasis did include substantial participation by community residents, but this participation was limited to the city's elite. Another community organization that strongly supported the sports and downtown development strategy was the Corporate Community Council. Membership on the council was limited to corporate presidents and chief executive officers, and the vast majority of the businesses included on the

INDlANAPOLlS

109

council had large downtown offices. Several members of this organization were focused on restoring the vitality of the downtown area, and the sports and downtown development program was a clear fit with their concerns. As a result, another part of the city's elite was united into a regime to facilitate the program. The last and most important member of the regime was the Lilly Endowment, which became a prime intellectual and financial supporter of the downtown and sports development policy and program. Across a period extending into the year 2000, the endowment would provide funds for the building of sports facilities and the relocation of national and international sports organizations to Indianapolis. In 1997, the Lilly Endowment may have achieved its greatest success when its support made possible the relocation of the National Collegiate Athletic Association (NCAA) to Indianapolis. s Indianapolis's sports and downtown development strategy was comprised of three components. First, there was the building of new facilities. In 1974, Market Square Arena opened as the home for the Indiana Pacers, bringing the team downtown from its mid-city location. Earlier, the state and city had agreed to build a convention center. A modest facility was planned in 1966 and initiated after the private sector committed $2 million for the project. The balance of the center's costs was financed with a hotel room tax and with bonds guaranteed by the state. Years later the Hoosier Dome would be added to the convention center, substantially increasing exhibition space and providing a prestigious anchor for the attraction of conventions. The scale and scope of the downtown and sPOlts development program is summarized in Table 5.2. From 1974 to 1999 more than $3 billion was spent on new construction projects as a result of the sports strategy.6 Eliminated from this tabulation were projects that would have taken place even if no specific strategy existed. Not every project identified or included in Table 5.2 is sports-related. Indeed, if that were the case then the program would not have achieved its objective of attracting and stimulating economic development. A review of the development projects between 1974 and 2000 indicates that slightly more than one-quarter of the buildings (measured in construction dollar terms), 26.0 percent, or $1.2 billion, was specifically related to making downtown Indianapolis a "fun place." An early measure of the successful impact of the programs can be seen in the continuing increases in hotel rooms. In 1974, downtown Indianapolis was not a destination for tourists. By 1996 there were 3,557 rooms in downtown Indianapolis and more than 5,200 rooms by 2001. The notion or idea that downtown Indianapolis would someday have more than 5,000 hotel rooms still appears to be an unreal dream to those involved with the initial plans for the rebuilding of Indianapolis and the sports strategies. Residential construction, a direct result of the redevelopment of downtown, accounted for $88.9 million in new investment.

1976 1980 1988 1999 1999 1989 2000 2000 1985 1986-2000

1974 1979 1982 1982 1982 1984 1988 1999 1997 1999 1999 1987

Sports related Market Square Arena Sports Center Indiana University Track and Field Stadium Indiana University Natatorium Velodrome Hoosier/RCA Dome National Institute of Sports Conseco Fieldhouse Victory Field RCA Dome improvements NCAA Headquarters Pan American Plaza Subtotal

Culture/entertainment Children's Museum Indiana Theater Zoo Zoo additions Aquarium Eiteljorg Museum Eiteljorg Museum expansion Indiana State Museum Walker Building Union Station Subtotal

Year

Projects

0.0 1.5 0.0 0.0 0.0 0.0 0.0 0.0 2.0 0.0 3.5

0.0 0.0 0.0 1.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0

Federal

0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 0.0 1.0

0.0 0.0 1.9 7.0 0.0 0.0 3.0 38.0 5.0 0.0 5.0 0.0 59.9

State

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

16.0 4.0 0.0 0.0 1.1 48.0 3.0 71.0 9.0 20.0 0.0 5.7 177.8

City

Source of funds

0.0 4.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.5

0.0 1.5 0.0 0.0 0.0 0.0 0.0 69.0 9.0 0.0 0.0 25.0 104.5

Private

25.0 0.0 37.5 6.6 60.0 60.0 15.0 104.0 1.4 8.8 318.3

0.0 1.5 4.0 13.0 1.1 30.0 3.0 0.0 0.0 0.0 70.0 4.5 127.1

Philanthropic

Projects and Sources of Funds for Downtown Development in Indianapolis, 1974-2000 (in $ million)

Table 5.2

25.0 6.0 37.5 6.6 60.0 60.0 15.0 105.0 3.4 8.8 327.3

16.0 7.0 5.9 21.5 2.7 78.0 9.0 178.0 23.0 20.0 75.0 35.2 471.3

Total

108

10.3 0.6 0.0 0.0 0.0 0.0 0.0

0.0 24.6 11.0 10.0 1.4 6.8 9.1

1985 1987 1988 1999 1999 1999 1999

Residential projects Lower Canal Apartments Lockfield Apartments Canal Overlook Apartments Canal Apartments Lombardi Row Meridian Row Ryland Homes 0.0 0.0 0.0 0.0 0.0 0.0 0.0

45.0

0.0

0.0

0.0

1999

Convention Center expansion 7.9 0.0 0.0 0.0 0.0 0.0 0.0

14.0 36.0 0.0 0.0 50.0

55.0 11.8 10.4 25.0 65.0 0.0 16.6 50.0 90.0 33.6 2.4 893.5 1,253.3

0.0 1.0 0.0 290.0 291.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.0 0.6

0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1

1.8 16.3 0.0 0.0 18.1

0.0 1.2 3.2 6.5 0.5 0.0 0.0 0.0 0.0 0.0 2.5 0.0 13.9

1986 1986 1986 1995

1977 1982 1982 1985 1989 1992 1996 2000 2000 2000 1985 1992-2000

Retail complexes Lockerbie Market Union Station City Market Circle Centre Mall Subtotal

Hotels/commercial buildings Hyatt Hotel/Bank 2 W. Washington offices 1 N. Capitol offices Embassy Suite Hotel Westin Hotel Farm Bureau Insurance Co. USA Funds, Incorporated Mark Adams Hotel Marriott Hotel Anthem Corporation Heliport Lilly corporate expansion Subtotal

(continued)

20.2 25.2 11.0 10.0 1.4 6.8 9.1

45.0 0.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0

15.8 53.3 4.7 300.0 373.8

55.0 13.0 13.6 31.5 65.5 36.0 16.6 50.0 90.0 33.6 5.6 893.5 1,303.9 0.0 0.0 4.7 10.0 14.7

0.0 0.0 0.0 0.0 0.0 36.0 0.0 0.0 0.0 0.0 0.0 0.0 36.0

~

~

~

1974-1898 1974-1999

Other projects

Property tax abatements

Total Percent

1982 1975-2000 1992

1999

Year

State of Indiana projects Capitol Tunnel Indiana University State Office Center Subtotal

Watermark Homes Subtotal

Projects

Table 5.2 (continued)

46.8 1.1

0.0

0.0

1.4 0.0 0.0 1.4

0.0 7.9

Federal

682 15.5

0.0

0.0

0.0 357.0 264.0 621.0

0.0 0

State

578.3 13.2

98.0

0.0

0.0 0.0 0.0 0.0

0.0 10.9

City

0.0

1,066.9

0.0 0.0 0.0 0.0

5.2 68.1

Private

2,592.3 58.9

Source of funds

498.1 11.3

0.0

0.0

0.0 0.0 0.0 0.0

0.0 2.0

Philanthropic

4,397.5 100

98.0

1,066.9

1.4 357.0 264.0 622.4

5.2 88.9

Total

~

~

~

INDlANAPOLIS

113

The data in Table 5.2 also underscore the extent to which Indianapolis's sports and downtown redevelopment program involved both governmental and nongovernmental funds. Gregory Squires,7 among others, has identified a number of cities where the public sector's commitment of funds has created extraordinary subsidies for private sector ventures. To be sure, Indianapolis did provide subsidies for a number of projects including the new home for the Indiana Pacers. However, the city of Indianapolis's expenditures accounted for just 13.2 percent of the $4.4 billion expended to rebuild the downtown area. More than half ofthe funds, 58.9 percent, came from the private sector, and when combined with the investments from the philanthropic sector, 70 percent of the cost of the downtown redevelopment program derived from private sources. Indianapolis was able to leverage more than $7.58 for every $1 its taxpayers committed. Although it remains to be seen whether the burden of the investment was equitably shared or whether the city received the returns it wanted, relative to the leveraging of funds, Indianapolis accomplished something that would be the envy of most cities in the United States: it was able to rebuild its downtown area with the extensive support of the private and nonprofit sectors and the state through its investments in Indiana University's Indianapolis campus and a new government center. Second, the plan included an export component designed to bring new employment opportunities to downtown Indianapolis and a substitution component to move intraregional recreational spending to the downtown area. The goals for the export component were to enhance job creation and attract firms. The substitution-effect component was designed to make downtown Indianapolis the center of the region's recreational and cultural life. To that end, the symphony moved to a renovated theater, the Pacers relocated to a new arena, several other theaters were built, and in 1985 the NFL's Colts moved to the Hoosier Dome (now the RCA Dome) from Baltimore. Third, the redevelopment plan also included a retail and residential component in an effort to make downtown a home for many people as well as a tourist destination. In this way the plan for a new downtown Indianapolis included new homes, recreation and culture, and the attraction of new businesses to the inner city. Fourth, all of the development noted in Table 5.2 (with the exception of the Children's Museum) took place within a two-mile radius from the center of downtown Indianapolis (denoted by a Civil War monument and a traffic circle that surrounds the memorial). In this sense Indianapolis also concentrated its redevelopment efforts in a very narrow area, and thus its tourism or sports policy established a set of resources or venues that can be easily accessed by pedestrians. The proximity of the venues also meant that tourists

114

BUILDING A TOURIST SPACE

and area residents mingle together in enjoying the activities hosted at the sites and in visiting the retail operations. Fifth, there can be little doubt, debate, or disagreement with the conclusion that the focus on sports, tourism, and the hospitality industry led to a rebuilding of downtown Indianapolis and the investment of a substantial amount of private money in commercial and residential facilities. As the data in Table 5.2 illustrate, $88.9 million in new residential construction took place in an area that had been abandoned by families who could move to other areas. The $1.3 billion investment in new commercial buildings and hotels also slowed a trend toward development in the suburban sections of the region that would not have taken place without the concentrated focus on downtown and the sports strategy. None of these observations are meant to minimize the subsidies provided to encourage this development, but it is also fair to observe that the level of private investment was quite substantial and completely altered the shape and use of space in downtown Indianapolis. In terms of categorizing Indianapolis's tourism or recreation policy, it can be seen as emphasizing a "visitor" framework as opposed to tourists. The export function of the policy was focused on individuals attending conferences or conventions and on those people coming to Indianapolis for a series of regional, national, and international amateur and professional sporting events. In this manner, Indianapolis's leadership hoped to promote a level of direct economic development from an emerging hospitality-industry sector. The establishment of a series of sporting events in downtown Indianapolis was also designed to underscore the centrality of the downtown area in the region's life.

Paying for Redevelopment in a Consolidated City As detailed in Table 5.2, the city ofIndianapolis's investment in the redevelopment plan was in excess of $578 million. The vast majority of these funds, $410.7 million, involved tax abatements and the creation of a tax increment financing district. The use of these financing tools might normally require little additional analysis, as their use simply redistributes tax burdens among all property taxpayers. However, the structure of local government in Indianapolis is quite exceptional in the sense that the consolidation of Indianapolis with Marion County created a complex set of urban service-delivery units financed at the township level. As already discussed, while the city and county were consolidated, the existing school districts were preserved. In addition, maintaining the existing township structure of local government meant that all existing police and fire departments were also retained. Finally, four cities elected not to join the consolidated government, and they continued to

INDIANAPOLIS

115

provide services to their residents. This complex organizational structure left intact nine townships, eleven school districts, ten fire departments, and at least seven police departments. Many of the financial commitments made for the redevelopment of downtown Indianapolis by the consolidated city and county of Indianapolis affect only the finances of Center Township, an area whose boundaries roughly approximate the old city of Indianapolis. This is also the area with the highest concentrations of low-income households in the city of Indianapolis and the entire central Indiana region. The vast majority of the region's tax-exempt property (state government center, federal facilities, nonprofit organizations, Indiana University-Purdue University Indianapolis and the Indiana University Medical Center, religious facilities, etc.) is also located in Center Township. The property tax abatements given for redevelopment in the downtown area have no negative impact on taxpayers living outside of Center Township. Similarly, the tax increment financing district created for the new downtown mall changes the distribution of property tax burdens only within CenterTownship. The Indianapolis public schools, the Fire Department, and the Police Department each provide services to the residents of Center Township. Some of the capital construction costs for the facilities that were integral to the definition of the sports strategy were financed at the county level. To build and oversee the sports facilities and the convention center, Indianapolis created the Capital Improvements Board. (The mayor of Indianapolis appoints the members of the Capital Improvements Board.) To provide the board with the capital necessary to meet its responsibilities, a 1 percent food and beverage tax was passed. As this tax is collected at all bars and restaurants throughout the county, these funds do enhance Center Township's economy and represent a contribution from all county residents to the development of the township. Similarly, a hotel occupancy tax is collected, and these funds have been used to expand the convention center. That investment improves Center Township without increasing tax burdens for residents. In addition, a car rental tax to support the additional enhancements to the RCA Dome is another example of a tax increase that improves Center Township without unduly increasing the tax burdens on residents. Use of a countywide food and beverage tax, a hotel occupancy tax, and a rental car tax for facilities located in Center Township does not place excessive fiscal burdens on the residents of Center Township or businesses located in that area. However, the use of abatements and a tax increment financing district does have an important impact. Tax abatements in Indiana and the City of Indianapolis move the responsibility for locally funded urban services to the owners of unabated property. State financial support of public

116

BUILDING A TOURIST SPACE

education reduces the burden of abatements on the operating budgets of all public schools. However, capital costs for education are borne by local taxpayers, and these costs are shifted to the owners of unabated property. Local taxpayers also are responsible for the operating and capital costs of all other government functions; as a result, these costs are shifted to the owners of unabated property. In effect, once a budget is developed, property owners pay the required or needed taxes. If some property is abated, owners of nonabated property pay higher taxes. Of course, at the margin, as the taxes paid by owners of nonabated property rise, political pressure increases to reduce spending to maintain taxing levels that match those in other areas. If urban service-delivery units in Indianapolis fail to maintain competitive tax rates relative to surrounding townships and counties, there will be an increase in families and businesses leaving the area. Tax abatement, then, creates two burdens. First, there is a financial burden that is created as the responsibility for paying for local services is shifted to the owners of unabated property. Second, if service units cannot reduce taxes to meet the rates paid by property owners in suburban locations, there is the very real possibility that service levels will be reduced to maintain competitive tax levels. Tax increment financing (TIF) programs also remove taxes from the base used to support urban services as the revenues from the increased value of the property are used to repay the costs of the new infrastructure. Tax increment financing has been used in Center Township to support the development of the new shopping mall and the new arena where the Indiana Pacers will play their home games. When the bonds sold to build the required infrastructure are retired, the property in the district will return to the tax base for the service-delivery units. However, this will not occur for at least twenty years (the term of some of the bonds). There is evidence that property values tend to increase in areas outside of a tax increment district. 8 However, the geographic size of the district created to finance Indianapolis's downtown mall and arena may have a negative impact on the extent to which property values increase. To generate sufficient revenues to support the repayment of bonds for the new mall and arena, the tax increment district extends for more than forty city blocks (four miles on its north-south axis) and approximately two miles on its east-west axis. In 2000 the city also received some disappointing news relative to the performance of the TIF district. The funds generated by the district were insufficient to meet the bond payments, and Indianapolis may have to rely on other revenues collected from CenterTownship taxpayers to meet its obligations. This would further increase the burden of responsibility for financing the redevelopment on inner-city Indianapolis.

INDIANAPOLlS

117

The vast majority of the funding for the new home of the Indiana Pacers derived from the creation of a sports tax district that directs sales and incomes taxes generated by individuals working and consuming services in the district. If the sports tax district did not exist, the vast majority of these funds would have remained in the state's budget. In Indiana, only the state collects a sales tax, and the redirection of these funds collected in the sports district has no negative impact on taxpayers in Indianapolis. The state also collects an income tax equal to 3.4 percent of gross earnings, and the direction of these funds to the financing of the arena also had virtually no effect on taxpayers in Indianapolis. Marion County does collect a local income tax equal to 0.7 percent of earnings, and the deflection of these funds did have a negative impact on the general fund of the City of Indianapolis. As a result, a substantial portion of the public's investment in the new arena came from the state's resources. As such, the presence of the facility and the small number of jobs it generates proved a gain for Indianapolis and the residents of Center Township who work at the arena or enjoy the hosted events. It is also important to note that all elements of the sports and downtown redevelopment program were approved by the city council in its capacity as the county council for the consolidated city/county government. In this regard, then, city/county council members elected from other townships within the consolidated city have voted for financing programs that reduced the revenues available for the delivery of urban services to the residents of Center Township. All of the abated taxes and the TIF program did not have a fiscal impact on their constituents. In essence, their representatives voted for programs that changed tax liabilities in another township while leaving tax burdens in surrounding townships unchanged. To the extent that residents and businesses located outside of Center Township (and the service boundaries of the Indianapolis schools and the police and fire departments) benefit from the redevelopment of the downtown area financed with abatements and TIF districts in Center Township, they become "free riders." Costs are imposed on a small subset of property owners and residents to generate regional or county wide benefits. However, it is also fair to report that there was no substantial opposition to proposed projects or the redevelopment of downtown Indianapolis. The complex nature of the financial structure of Indianapolis's consolidated city/county government obscured the long-term impact of the financing strategies, but there is evidence that the residents of the city do believe that the benefits of the redevelopment were both substantial and important to Indianapolis. 9 Between 1992 and 1998 the responsibility for generating a total of $130.8 million in property tax revenues was shifted from abated property and property within the TIF district to other property owners and users. The

118

BUILDING A TOURIST SPACE

Indianapolis public schools endured the greatest challenge to finance its operations, as the total revenue shifted to unabated property and property outside of the tax increment district was $88.4 million. The burden transferred to support the Indianapolis Police Department was $17.3 million, and to finance the Indianapolis Fire Department, $15.4 million in costs had to be shifted to other taxpayers. For the programs administered by Center Township, $9.7 million in taxes was shifted to other property owners. 10 While property tax abatements and TIF districts shift the burden of forgone taxes to unabated property and property located outside of an increment district, some have argued that without these incentives, investors would locate in other, more desirable areas. As a result, there is no lost or forgone revenue, because without the abatement or increment district no development would occur. This is a powerful and emotional argument. There are, however, two issues that need to be considered. First, is it true that differential property tax rates influence locational decisions? Second, who benefits from the enhanced development of downtown areas? With regard to the first issue, virtually every elected official would point to a situation or "development deal" where he or she was told that a tax abatement or other incentive seemed to change a locational decision. Business leaders, however, have a financial interest in reporting that incentives change their decisions. If communities believe that incentives change locational choices, then corporations will receive more inducements. As a result, it becomes difficult to ascertain which firms need or profit from downtown locations and which corporations actually make their intraregionallocations based on tax incentives. ll Regardless of the impact of inducements, the more important issue may be who benefits from the locational choices of firms. Even if one were to assume that abatements encourage corporations to move to downtown areas, all segments of a community may benefit. For example, a downtown location could reduce congestion costs and the need for additional infrastructure in a suburban area. In addition, the movement of a corporation to a downtown location reduces demands for suburban land, thus reducing the costs for homeowners and other businesses. A vibrant downtown area can also be an effective tool in attracting other businesses and homeowners to a region and provide convenient access to service-level jobs for individuals without access to private transportation. If all segments of a community can benefit from the location of firms in downtown areas, then it would be appropriate for all property owners to support the burden of the incentives provided. In Indianapolis, under the current system, property owners in only one township absorb the burden of a shift in property taxes as a result of abatements or a tax increment district.

INDIANAPOLIS

119

The Accomplishments of the Sports and Downtown Redevelopment Program for Indianapolis Relative to rebuilding downtown Indianapolis and establishing a new and different image for the city, the sports emphasis and focus on redevelopment of the downtown area did indeed achieve an important measure of success. By 2000, Indianapolis had hosted numerous national and international events, including the 1987 Pan American Games, the Final Four Championship of the NCAA's Men's Basketball Tournament (four times), and several international competitions (including the World Gymnastics Championship). In 2000, the city hosted the International Games for Police Officers and Fire Fighters. In 2002, it hosted the World Basketball Championships. In terms of the city's identity and reputation, there was probably no better measure of the success of the sports and downtown redevelopment program than Indianapolis's secondplace finish to Philadelphia in a bid to host the 2000 Republican National Convention. Indianapolis's ability to compete for that prestigious convention described how far the city had come in redefining its image and re-creating its downtown area as a center for entertainment and consumption. The hosting of national and international events and the attraction of national organizations to Indianapolis represents the export component of the sports and downtown strategy. The fans attending events such as the NCAA Men's Final Four, the World Gymnastics Championships, and the World Basketball Championship include large numbers of people from outside of Indianapolis, individuals who would not have visited the city in the absence of the event. As a result, these visitors generate real economic development for the city. In addition, if a new sports authority such as the NCAA moves to Indianapolis, the jobs brought to the community by the organization also represent real growth. As a result, it is reasonable to expect that, in terms of jobs related to sports and the hospitality sector, Indianapolis will experience increased job opportunities. Indianapolis did enjoy a substantial increase in sports-related employment. Through the 1980s the regional economy enjoyed a 275 percent increase in the number of these jobs within this sector. However, by 1989 sports-related employment accounted for but 0.32 percent of all jobs in the region, and sports-related payrolls, including the players, accounted for less than one-half of 1 percent of the total payroll dollars in the Indianapolis economy.12 The increase in sports-related jobs, to be sure, was quite valuable, but by other measures of success the program's accomplishments were less stellar. In 1977, among a group of midwestern areas, Indianapolis had the secondhighest average income or wage level. In 1989, Indianapolis had declined to

120

BUILDING A TOURIST SPACE

fifth position, while at the regional level the Indianapolis region was second in 1977 and fourth in 1989.13 By 1996, the Indianapolis region was ranked third relative to the concentration of households with disposable income above $75,000 (see Table 5.3). In terms of the location of jobs, the sports strategy has not reversed the long-standing suburbanization pattern in the region. In 1985, 18 percent of the region's jobs were located in downtown Indianapolis; by 1995, the number of jobs in downtown Indianapolis accounted for but 14.8 percent of the region's employment opportunities. From 1985 to 1995 there was actually an increase of 3,239 jobs in the downtown area; the region, however, enjoyed more robust growth, accounting for the reduction in the centrality of the core area as an employment source. 14 Indeed, the expansion of the regional economy may well explain the changing employment levels in downtown Indianapolis. The downtown area continues to grow, but the region is growing at a faster rate. Indeed, the expansion of the regional economy may well explain the changing employment levels in downtown Indianapolis. The downtown area continues to grow, but the region is growing at a faster rate. The sports and downtown development strategy may have ensured that some of the regional growth would occur in the downtown area, but the strategy did not reverse the overall pattern of employment expansion and growth in suburban areas outside of Indianapolis. 15

Conclusion Indianapolis has changed its image and the image of its downtown area, and these were critical objectives for the city's sports and downtown redevelopment policy. Downtown Indianapolis is now a recreational destination providing important experiences for residents and visitors. There is also little doubt that the reputation and the image of the city have been drastically altered. It would have been absurd to think Indianapolis could have competed with larger cities to host conventions such as the Republican National Convention a short twenty years earlier. Today, Indianapolis is a destination and a stronger competitor for national and international events than cities several times its size. Indeed, for certain sports events it is a favored location. Indianapolis's repeated selection as the site for the Final Four of the Men's National Basketball Championship is another important measure of the success of the sports and downtown redevelopment program. Virtually every city competes for this event, and no other city has hosted the "Final Four" as many times as Indianapolis. If one turns to economic issues and the returns to the city from the sports and downtown development strategy, the results are mixed and even

INDIANAPOLIS

121

Table 5.3

Household Wealth By Region, 1996 Percent of households with disposable incomes between Region Indianapolis Cincinnati Columbus Dayton Fort Wayne Louisville Minneapolis/St. Paul Milwaukee SI. Louis

$75,000 and $150,000

Above $150,000

Total

Rank

9.9 10.3 9.4 9.1 7.5 7.8 9.6 9.1 10.1

1.16 1.33 1.11 0.90 0.84 1.04 1.22 1.11 1.29

11.06 11.63 10.51 10.00 8.34 8.84 10.82 10.21 11.39

3 1 5 7 9 8 4 6 2

Source: Market Statistics, Inc.

disappointing. The goal of underscoring the centrality of the downtown area and advancing the level of wages in the region was not achieved. Indianapolis's sports and redevelopment policies did create a number of jobs as a result of the export component of the program designed to bring visitors to the metropolitan area. In addition, the presence of the Pacers and Colts in downtown facilities transferred a level of recreational spending to the downtown area. Yet, even with an export and substitution element in the sports and downtown redevelopment plan, the overall economic gains for city and region were quite modest. In terms of wage levels in the region or the concentration of regional economic activity in the downtown area, Indianapolis's policies could only retard suburban sprawl. 16 Compared to other areas in the Midwest with which the city competes, wage levels in Indianapolis actually declined from its ranking as having the second-highest wage rate in 1977. This decline held consistent through 1996. While the change was slight, from second to third on one measure, the focus on sports did not attract the high-paying jobs that some believed would be forthcoming as the downtown area flourished. As the jobs associated with sports and the hospitality industry are in the lower salary levels of the service sector, this is not a surprising outcome. However, the presence of facilities did not attract a large number of firms with higher-paying salary levels to the region. There was an increase in the number of jobs in the downtown area, but growth in the region led to an actual decline in the proportion of employment opportunities in downtown Indianapolis. One also has to be sensitive to the possibility that a focus on a visitororiented policy for recreation, tourism, and identity crowds out other foci or

122

BUILDiNG A TOURIST SPACE

development perspectives. By the late 1990s and into 2000, Indianapolis had to focus on its "brain drain" problem as scores of its best graduates from the state's universities went elsewhere for jobs. The 1999 mayoralty race included repeated discussion of the best strategies for attracting businesses that would provide the kinds of jobs that would keep the best college graduates in the state. Tourism policies do not preclude other foci for development; certainly cities such as New York, Boston, Chicago, and Los Angeles seem able to focus both on tourism and the attraction of firms that recruit leading college graduates. In Indianapolis, however, one has to raise the possibility that the overall focus on sports and recreation did "crowd out" other options. Nevertheless, the sports strategies followed by Indianapolis did enhance the image of downtown areas and ensured that there will be a continuing level of economic activity in this area. However, downtown Indianapolis does not dominate in its region. During periods of regional growth, the downtown area did grow but not as quickly as other parts of the metropolitan region. The best that can be said is that the sports focus slowed the pace of suburbanization. 17 The policy, however, did not reverse the trend toward suburbanization or bring high-paying jobs to the metropolitan area. Indianapolis spent large amounts of tax dollars to ensure that a proportion of the region's growth would take place downtown. In the absence of these subsidies, some of the development that occurred in downtown Indianapolis would have happened elsewhere in the region. It is also not possible to review downtown development issues in Indianapolis without pausing to consider some of the representational and financial issues associated with the policy. The consolidation of Indianapolis with surrounding Marion County produced a very complex governmental structure. For the most part, the preexisting urban service-delivery structures were not changed by the consolidation. However, the rather unique structure created an environment in which businesses and homeowners in the old city of Indianapolis are responsible for more of the costs of the redevelopment program than are other residents of the consolidated city. In addition, representatives from townships that are not fiscally responsi ble for most of the costs of the redevelopment program can and do vote for the financing mechanisms that transfer the burden of the pr6gram to Indianapolis's Center Township. Many students of urban policy have noted the undemocratic nature of development decision making and the control of redevelopment programs by growth regimes. 18 Indianapolis's experiences underscore these issues and clearly suggest that greater care must be taken in ensuring that the burdens of redevelopment are equitably distributed. Indianapolis's experiences indicate

INDlANAPOLIS

123

the need for other areas to carefully consider the process for selecting decision rules and the structures developed to both make decisions and oversee development. The lessons for other cities to be learned from the outcome in Indianapolis are not limited to democratic control. Perhaps the most important issue is that a focus on sports and entertainment will not reverse suburbanization or lead to the attraction of high-paying jobs for the economy. The focus on fun and sports may help ensure a role for a downtown area in a regional economy, but development that transforms the economic space of a region is not to be found in the building of ballparks, stadiums, and arenas. If a city is interested in slowing suburbanizing trends, sports may well be an asset. The issue in every instance, however, is the cost to achieve this outcome relative to the modest gains observed and the other potential strategies that may have far greater success in revitalizing cities, their downtown areas, and urban life. It now remains for Indianapolis's taxpayers to decide whether what they received in terms of a more vibrant downtown center was worth their commitments. In addition, an area that focuses on sports and tourism must understand that these sectors do not have a large number of jobs to attract and retain a state's "brain trust." Economic development policies must also focus on those firms able to offer the highest-paying jobs as opportunities for a state's college graduates.

Notes 1. Mark S. Rosentraub, Major League Losers: The Real Costs of Sports and Who's Paying for It (New York: Basic Books, 1997). 2. William H. Hudnut, Ill, The Hudnut Years in Indianapolis, 1976-1992 (Bloomington: Indiana University Press, 1995),7. 3. John W. Walls, Onward and Upward: The Story of the Greater Indianapolis Progress Committee (Indianapolis: Greater Indianapolis Progress Committee, 1999). 4. Ibid. 5. Andrew Zimbalist, Unpaid Professionals: Commercialism and Conflict in Big- Time College Sports (Washington, DC: Brookings Institution, 1999). 6. This is the present value of the city's investment. The city is also responsible for a $33 million loan from the state of Indiana due in 2000. The data in Table 5.2 identify the annual costs for the bonds negotiated for the city's investment. 7. Gregory D. Squires, ed., Unequal Partnerships: The Political Economy of Urban Redevelopment in Postwar America (New Brunswick, NJ: Rutgers University Press, 1991). 8. Joyce Man and Mark S. Rosentraub, "Tax Increment Financing: Municipal Adoption and Its Effects on Property Value Growth," Public Finance Review 26, no. 6 (November 1998): 523-547. 9. David Swindell and Mark S. Rosentraub, "Who Benefits from the Presence of Professional Sports Teams?" Public Administration Review 58, no. 1 (1998): 11-20.

124

BUILDING A TOURIST SPACE

10. Mark S. Rosentraub, "City-County Consolidation and the Rebuilding of Image: The Fiscal Lessons from Indianspolis's Unigov Program," State and Local Government Review, 32, no. 3 (Fall 2000). 11. Timothy J. Bartik, Who Benefits from State and Local Economic Development? (Kalamazoo, MI: W.E. Upjohn Institute, 1991). 12. Rosentraub, Major League Losers. 13. Ibid. 14. Ibid. 15. Mark S. Rosentraub, "Stadiums and Urban Space," in Roger G. Noli and Andrew Zimbalist, eds., Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums (Washington, DC: Brookings Institution, 1997), 178-207. 16. Ibid. 17. Ibid. 18. Stephen L. Elkin, City and Regime in the American Republic (Chicago: University of Chicago Press, 1987).

6 DONALD

F. N ORRIS

If We Build It, They Will Come! Tourism-Based Economic Development in Baltimore

The story of the Baltimore Renaissance has been told numerous times over the past two decades in both the popular press and academic journals. It is a story, beginning in the mid-1950s and continuing to the present day, of a city that has been able, against often formidable odds, to revitalize a substantial and steadily growing portion of its downtown. In doing so, it has achieved both national and international recognition.! In this chapter, I examine Baltimore's decision to focus its post-World War 11 downtown economic development, in considerable part, on tourism, leisure, and, more recently, major league sports. Specifically, I address the following questions: (1) why Baltimore chose this particular downtown economic development trajectory; (2) whether this strategy has been successful as measured by its impact on physical redevelopment, employment, and tax revenues; and (3) whether the overall city has benefited from this downtown development strategy. I begin with a brief history of the redevelopment of Baltimore's downtown. (See Map 6.1 for Baltimore's location on the east coast of the United States and for the location of the city center area.) Central City Redevelopment in Baltimore

The initiation of Baltimore's downtown redevelopment can be dated to 1954, when the Greater Baltimore Committee (GBC), a representative organization of the 100 largest businesses in the metropolitan area, was formed. Its principal initial purpose was to bring the weight of the business community to bear on pressing problems of the city, particularly the problems of its deteriorating downtown core. 2 In 1957, in cooperation with another business group, the Committee on 125

126

BUILDING A TOURIST SPACE

Downtown (which was essentially a retail merchants' organization), the OBC funded a master plan for the downtown. This plan called for the redevelopment of a thirty-three-acre area in the central core of the downtown known as Charles Center. The plan was endorsed in 1958 by the city's mayor, Thomas D' Alesandro Jr., and formally adopted in 1959 by the Baltimore City Council. The project consisted of 2 million square feet of offices, 700 apartments, 700 hotel rooms, several retail establishments, and underground parking.3 The redevelopment of Charles Center was barely under way when, in his inaugural speech in 1963, Mayor Theodore McKeldin said that after Charles Center was completed, the next downtown area for revitalization would be the abandoned waterfront. 4 Although the business community was not immediately supportive of this idea, McKeldin eventually secured business support,S which has remained strong to this day. In 1964, with funding from the OBC, the Committee for Downtown, and city government, a redevelopment plan for the Inner Harbor was completed. The Inner Harbor had become both economically depressed and visually depressing. The harbor had slipped into disuse because physical limitations prevented it from adapting to changes that had occurred in the shipping industry. As a result, most of the shipping that reached Baltimore by the 1960s tied up at deeper water facilities in the outer harbor area where there was adequate depth and more space for loading and unloading large oceangoing vessels and storing goods (see Map 6.\). By the 1960s, the Inner Harbor, once the city's principal harbor for both oceangoing and commercial fishing vessels was run down, obsolete, characterized by decay and idle piers, by large areas of outmoded, obsolete and inefficient warehouses, and by wholesaling and light manufacturing buildings and uses. 6 The Inner Harbor was slated for a much different development than that of Charles Center, including office buildings, local cultural attractions, and a multi-income residential community on a seventy-five-acre parcel on the west side of the Inner Harbor. Additionally, the land immediately adjacent to the Inner Harbor was developed as parks and open space. As one leading participant in the revitalization effort has noted: "Initially, we had no plans at all for tourism around the Inner Harbor."7 By the early 1970s, the blocks immediately around the Inner Harbor were either developed or under development. However, the shoreline was mostly open. It was in this area that a variety of urban and ethnic festivals began to be held. These festivals attracted people to the Inner Harbor and showed that it could be a popular place for local residents. However, to this point, the city still had not considered a tourism strategy for the Inner Harbor. 8

BALTIMORE

Map 6.1

Baltimore City

Central Business

Central Business District

Central Business District Central Business

Source: Map produced by UMBC Department of Geography and Environmental Systems, Cartographic Services.

127

128

BUILDING A TOURIST SPACE

In 1976, an event occurred that led to the adoption of a tourism-based strategy. This was the arrival in 1976 of the "Tall Ships" in Baltimore's Inner Harbor after their bicentennial visit to New York Harbor. The Tall Ships drew hundreds of thousands of visitors to the Inner Harbor and planted the seeds of the tourism-based strategy among the Inner Harbor's planners and decision-makers. 9 Although the thrust of the redevelopment had changed, the motivation remained constant-to improve the physical appearance of the area and to increase the property tax 'base and the number of jobs in the redeveloped area and the downtown as a' whole. lO Thus, Baltimore's decision to redevt;lop the Inner Harbor based on tourism was not its first choice. It was a choice dictated by opportunity and circumstance-the success of the visit of the Tall Ships and the availability of the Inner Harbor as an attractive location with a potential tourist "draw." Ever since the initial decision twenty-five years ago to add tourism to the redevelopment of the Inner Harbor, this strategy has been followed with little or no variation. As a result, an impressive array of physical facilities (i.e., the infrastructure of tourism) catering to tourism has been developed immediately surrounding as well as within a few blocks of the Inner Harbor, and both the look and the feel of the Inner Harbor have changed dramatically. Photos 6.1 and 6.2 are typical views that depict the Inner Harbor prior to redevelopment, in 1960 and 1967. Photos 6.3 and 6.4, also typical views, show this area in October 2000. The most significant of these facilities, the dates that they opened or were modified, project ownership, and project cost data are listed in Table 6.1.11 Not all the physical developments constructed in the city center are listed in the table. For example, I deliberately did not include office buildings, governmental buildings, and the like (unless, as in the case of the World Trade Center, they were an integral part of the Inner Harbor project). Instead, the table focuses on facilities constructed for the purpose of attracting visitors for tourism, leisure activities, and sports events. Among other things, Table 6.1 shows a steady progression of physical developments designed to attract and capture the economic benefits of tourism, recreation, and attendance at sports events in and around Baltimore's Inner Harbor since 1976. It also shows a massive public and private investment, totaling by some estimates over $2 billion. See also Map 6.2 for the location in and around the Inner Harbor of the principal tourist-related facilities. The most significant of these facilities-the tourist infrastructure of postindustrial Baltimore-would, arguably, include at least the following: • the Maryland Science Center, opened in 1976 as the city's first major tourist attraction, with an IMAX theater added in 1987;

BALTIMORE

Photo 6.1

129

Baltimore's CBO and Inner Harbor, 1960

An aerial view, from the southeast to the northwest, of the Inner Harbor and city center in 1960. Source: The Maryland Historical Society, Baltimore, Maryland. Reproduced with permission.

• the Baltimore Convention Center, opened in 1979 and expanded in 1987 and 1997; • the two pavilions of HarborPlace, the Rouse Company's festival marketplace buildings, opened in 1980; • the National Aquarium in Baltimore, opened in 1981 and expanded in 1990 and 1992; • the Gallery at HarborPlace (featuring shops and restaurants) opened in 1988; • the Pier 6 Pavilion outdoor entertainment facility, opened in 1991; • Oriole Park at Camden Yards, Baltimore's major-league baseball stadium (for the Baltimore Orioles), opened in 1992; • the Power Plant, a 1997-98 private sector redevelopment of the old power-generating facility for Baltimore's trolley system, now featuring theme restaurants, a gym, a bookstore, and offices;

130

BUILDING A TOURIST SPACE

Photo 6.2

Baltimore's Inner Harbor, 1967

A view of the Inner Harbor from Federal Hill (south of the Inner Harbor looking north) in 1967. Source: The Maryland Historical Society, Baltimore, Maryland. Reproduced with permission.

• Port Discovery, the latest redevelopment of the city's former Fish Market, now a children's museum, opened in 1998; • PSI Net Stadium at Camden Yards, Baltimore's National Football League stadium (for the Baltimore Ravens), opened in 1998; and • The Power Plant Live!, the latest redevelopment of the Brokerage, a former wholesale/retail building, into a mixed use of facility with retail, restaurants, entertainment, and an art gallery. In addition, Table 6.1 lists eleven hotels in the downtown area serving the convention and tourism business, and plans exist (at various levels of realism) for up to seven more hotels, including at least one (Hotel 1) of considerable size, that would be located next to the Baltimore Convention Center.12 Finally, a public promenade exists along the entire circumference of the Inner Harbor waterfront from the yacht basin on the south to beyond the new Marriott hotel on the east, and plans are underway to extend it both east (to the neighborhoods of Fells Point and Canton) and south (to Ft. McHenry in Baltimore's outer harbor).

BALTIMORE

Photo 6.3

131

Baltimore's Inner Harbor, October 2000 (as seen from the marina)

Baltimore's Inner Harbor as seen from the marina (number 14 on Map 6.2, p. 145), October 2000. The tall building on the left is the World Trade Center (number 19). To its left are the Galleria and the Renaissance Hotel (numbers 17 and 18). Directly in front of and to the left and right of the Legg Mason building are the Pavilions at HarborPlace (number 16). To the far left is the Hyatt Hotel (number 10). Photograph by the author. Photo 6.4

Baltimore's Inner Harbor, October 2000 (as seen from Federal Hill)

A view of the Inner Harbor from Federal Hill, October 2000. Compare against Photo 6.2. Photograph by the author.

Type

Civil Warera frigate

WWII submarine

Science center

Office building

Convention facility

Shops and restaurants

Aquarium

Name

USF Constellation

USS Torsk

Maryland Science Center

World Trade Center

Baltimore Convention Center

HarborPlace

National Aquarium in Baltimore

Comments

1981

1980

1979

Public (city)/ nonprofit

Public (city)/ private

Public (city)

Exhibition of marine life. Building owed by city; facility operated by National Aquarium in Baltimore (NAIB), a nonprofit organization.

Dual-pavilion waterfront festival marketplace. Land owned by city. Buildings owned by developer (Rouse Company).

New convention center with exhibition space and meeting rooms.

27-floor office building on the Inner Harbor with an observation floor.

Public (state)

1977

Science exhibition hall.

Nonprofit

1976

Opened at Pier 3.

Brought to Baltimore in the 1950s, opened to the public in 1961, and tied up at Pier 1, now Constellation Dock, permanently in 1971. Various restorations in the 1960s and 1970s.

Nonprofit

Nonprofit

Ownership

1971

1961/1971

Opened/ modified

Tourist Oriented Facilities in Baltimore's Inner Harbor Area

Table 6.1

21.3

15

51.4

21

6.5

Not known

Not known

Total cost ($ million)

w

N

-

Hotel

Radisson Plaza Hotel b Private

Private

1986

Hotel

Harbor Inn Pier 5 Hotel a

1986

Private

1986

Harbor Court Hotel and Condominiums

Hotel

Hotel

Sheraton Inner Harbor Hotel

Private

1985

Wyndham Hotel b

Hotel

Marriott Inner Harbor Hotel

Public (city)/ private

1985

Nonprivate

Private

Office, retail entertainment

Brokerage a .b

1983

1985

Lightship

Lightship Chesapeake

Private

1982

Hotel, condos, offices

Restaurant

Rusty Scupper

Nonprofit

1982

Private

Museum

Baltimore Public Works Museum

Private

1981

1985

Hotel

Hyatt Hotel

19.9

12

100

38

28.9

Renovation (440 rooms), two restaurants, a bar and 35 cocktail lounge, health club, and meeting space. Formerly named the Lord Baltimore Hotel and the (continued) Baltimore Hilltop and Towers.

A 65-room inn with restaurant and conference facilities. Formerly named Harrison's Pier 5 Hotel.

Renovation (380 rooms, lobby). Name changed from Omni to Wyndham in September 2000.

200 hotel rooms; 177 condos, office, and retail; 900 parking spaces.

334 rooms; 533 parking spaces.

365 rooms; 580 parking spaces.

42

Not known

Opened at Pier 3. Redevelopment of former wholesale/retail buildings, 112,000 sq. ft. of office space, 110,000 sq. ft. for retail and entertainment, and 290 parking spaces.

Not known

Not known

33.5

Built as nautical-theme restaurant on south side of Inner Harbor adjacent to Baltimore yacht basin.

Building was (and is) a functioning city sewage pumping station, built between 1908 and 1911.

500 rooms; 650 parking spaces.

!.J.) !.J.)

Theater

Entertainment complex

Hotel, offices, retail restaurants

Lighthouse

Hotel

Hotel

WW 11 Coast 1990/1992 Guard cutter

IMAX Theater (at the Maryland Science Center)

Fish Marketa

Gallery at HarborPlace and Renaissance HarborPlace Hotel

Seven Foot Knoll Lighthouse

Days Inn Inner Harbor Hotel

Marriott Hotel

USS Taney

1989

1989

1989

1988

1988

1987

1987

Type

Convention center

Name

Opened/ modified

Baltimore Convention Center

Table 6.1 (continued)

Nonprofit

Private

Private

Nonprofit

Private

Public (city)/ private

Nonprofit

Public (city)

Ownership

Located in Baltimore in 1990; opened to public at Pier 5 in 1992.

175-room expansion.

256 rooms; 600 parking spaces.

Located at Pier 5 and opened to the public.

603 rooms; 125,000 sq. ft., retail; 450,000 sq. ft., offices; 1,200 parking spaces.

Former city fish market was converted to an entertainment complex (bars, nightclubs, and 1,OOO-seat concert hall), which closed after nine months of operation.

Addition to Science Center (425-seat theater).

Expansion (27,000 sq. ft. exhibition space; 60,000 sq. ft. Festival Hall).

Comments

Not known

Not known

15.5

Not known

174

26

4.2

16.7

Total cost ($ million)

w

.j:..

Nonprofit

Nonprofit

1992

1995

1996

Marine biotechnology center

Art museum

Restaurant

WWII 1996 Coast Guard cutter

1996

Aquarium

WWII submarine

Lightship

National Aquarium in Baltimore

Columbus Centera· b

American Visionary Arts Museum b

Rusty Scupper

USS Taney

USS Torsk

Lightship Chesapeake

1996

1995

1992

Baseball stadium

Oriole Park at Camden Yards

Nonprofit

Private

Nonprofit

Public (city/state)/ private

Public (city)/ nonprofit

Public (state)

Public (city)

1991 Outdoor entertainment pavilion

Public(city)/ non profit

Pier 6 Pavilion

1990

Aquarium

National Aquarium in Baltimore

Ownership changed to Living Classrooms Foundation and made part of Baltimore Maritime Museum.

Ownership changed to Living Classrooms Foundation and made part of Baltimore Maritime Museum.

Ownership changed to Living Classrooms Foundation and made part of Baltimore Maritime Museum.

Renovation.

Museum of "alternative" art.

Initially intended to be a marine biotechnology center with working laboratories and public exhibit space. The center was also intended to be open for public (tourist) tours and observation.

Outdoor ticketing center.

N/A

N/A

N/A

2

7

160

Not known

210

4.5

20.4

(continued)

47,000-seat baseball stadium; built and operated by the Maryland Stadium Authority.

3,500 covered seats, 1,500 open-air seats.

Expansion to include marine mammal exhibit.

v.>

Ul

1996-99

1997

Lighthouse

Civil Warera frigate

Convention center

Museum

Theme restaurants, entertainment

Children's museum

Seven Foot Knoll Lighthouse

USF Constellation

Baltimore Convention Center

Civil War Museum

Power Plantb

Port Discoveryb

1998

1997 and 1998

1997

1996

Type

Opened/ modified

Name

Table 6.1 (continued)

Public (city)/ private

Public (city)/private

Nonprofit

Public (city/state)

Nonprofit

Nonprofit

Ownership

Children's museum developed by the Disney Company at location of former fish market. Building owned by city with lease to the Children's Museum. (A previous redevelopment of the facility in the 1980s into an entertainment complex failed.)

Reuse of old power-generating facility, includes Hard Rock Cafe, ESPN Entertainment Zone, Gold's Gym, and Barnes & Noble Book Store. Building owned by the city with 75-year lease to developer (Cordish Company). At least two previous attempts to redevelop this facility (by other sources) failed before the current successful effort.

Renovation of the 151-year-old President Street railroad station building (Philadelphia-WilmingtonBaltimore Railroad).

ExpanSion, tripled its size.

Complete restoration.

Ownership_changed to Living Classrooms Foundation and made part of Baltimore Maritime Museum.

Comments

32

20

1.3

150

9

N/A

Total cost ($ million)

w

CJ\

-

Football stadium

Marine biotechnology center

Science centerl IMAX

Hotel

Hotel

Multiple use

PSI Net Stadium at Camden Yards (Baltimore Ravens NFL Team)

Columbus Center

Maryland Science Center/lMAX Theater

Marriott Baltimore Waterfront Hotel

Marriott Courtyard

Power Plant Live!

Private

Public (city)/ private

2001

2001

Nonprofit

2000

Private

Public (state)

1998

2001

Public (state)

1998

55

134

55

6.69

229

(continued)

Redevelopment under way by Cord ish Company to 20 develop this into a multi use faculty with retail, restaurants, entertainment, a nightclub, and an art gallery.

A 207-room hotel being built on Fleet Street in Fells Point, east of the Inner Harbor by H&S Properties (developer of the Marriott at the Inner Harbor East).

A 750-room hotel; located at the Inner Harbor East, approximately four blocks from the center of the Inner Harbor and eight blocks from the Baltimore Convention Center. Developed by H&S Properties; to be operated by Marriott developers. Involves PILOT (payment in lieu of taxes) from Baltimore City.

Addition of 3-D capability to IMAX Theater.

Ownership assumed by University System of Maryland for a total of $750,000, plus forgiveness of $1 million debt owed by the center to the university. State and city governments forgave $4.8 million in debt owed them. Building assets sold for $140,000 at public auction. Currently used as a marine biotechnology facility with no public space or tourism function.

A 68,000-seat football stadium; built and operated by the Maryland Stadium Authority.

w

-..J

-

Type

Office and retail

Science center

Museum

Aquarium

Hotel

Hotel

Hotel and offices

Name

Power Plant

Maryland Science Center

Baltimore Museum of Industry

National Aquarium in Baltimore

Hotel 1

Hotel 2

Hotel 3

Table 6.1 (continued)

2001+

2001+

2001+

2001+

Opened/ modified

A 35-story mixed-use facility including a 267-room Embassy Suites with 385,000 sq. ft. of office space and 660 parking spaces. To be located at Light and Baltimore Streets. Plans indeterminate.

Private

120 est.

85 est.

A 250-room hotel proposed by Ritz-Carlton. To be located south of the Inner Harbor near Federal Hill. Plans indeterminate.

Private

48

175 An 850-room hotel proposed by Baltimore Orioles majority owner Peter Angelos. To be located adjacent est. to expanded Convention Center and Orioles Park at Camden Yards. Plans indeterminate.

Proposed addition of 50,000 sq. ft. for new exhibit space to this existing 200,000 sq. ft.

8.5

Not known

Private

Nonprofit

Proposed addition to double the size of this facility.

Proposed addition of 45,000 sq. ft. of exhibit space (doubling present size).

Nonprofit Nonprofit

13-story addition planned at the former location of the Chart House restaurant.

Comments

Private

Ownership

Total cost ($ million)

'-'-' 00

13 est.

A 1S6-room Comfort Suites at Broadway and Fayette 17 est.

Not known

A 12S-room Marriott Residence Inn at Lombard and

Private Private Private

Hotel

Hotel

Hotel

HotelS

Hotel 6

Hotel 7

Sources: Department of Planning, City of Baltimore, December 1995, "Downtown (Metro Center) Baltimore Projects" (Baltimore, MD: Author); City Center-Inner Harbor Development, Inc., undated, "Baltimore's Inner Harbor Redevelopment Program" (Baltimore, MD: Author); Wrenn, p. 150; numerous articles from the Baltimore Sun; and files of the Baltimore City Board of Public Works. Notes: aIndicates projects that failed between 1985 and 2000. bIndicates that these are located in facilities that were redeveloped and not constructed anew. (All other facilities in the table were built anew.) The author wishes to thank MIPAR graduate research assistants Diana Campillo and Karen Siegel for their valiant efforts to collect and verify information for this table. It was hard, frustrating work, especially so as no single entity in Baltimore keeps detailed records about downtown redevelopment and also because such records as do exist may be in multiple locations and may be partial, incomplete, and inconsistent.

Hampton Inn and Suites at Calvert and Redwood Streets. Redevelopment of the vacant USF&G building into a 17S-suite hotel.

Streets. Status and developer unknown.

St. Paul Streets. Status and developer unknown.

90 est.

A 278-room hotel proposed by Kravco Co. and Switzerbaum Realty Capital (Philadelphia) at property owned by Baltimore City Community College, Pratt and Gay Streets. Plans indeterminate.

Private

Hotel, offices, and retail

Hotel 4

\0

w

140

BUILDING A TOURIST SPACE

The Focus on Tourism

As Fainstein and Gladstone,13 Levine,14 and others have noted, tourism is one of only a few strategies available to compensate for the loss of economic base that has occurred in many older American cities during the last thirty years or so. This is especially true for the older, formerly industrial cities of the American Northeast and Midwest. Much has been written about the deindustrialization of older American cities and the effects of the consequent loss of businesses, jobs, and tax base in them. Much has also been written about the movement of city residents and businesses to the suburbs and the impact of this movement on older central cities. I will not repeat that literature here. Suffice it to say that many a thriving urban center circa 1945 found itself on hard times indeed by the 1960s. 15 In the following pages, however, I will discuss the impact of some of these changes on Baltimore. 16 First, with respect to population, Baltimore lost ground both relative to its suburbs and absolutely during this period, declining from a population of 950,000 in 1950 to about 651,000 in 2000. Between 1990 and 2000 alone, the city lost over 85,000 residents. Meanwhile, the suburbs grew from 507,000 in 1950 to 1.86 million in 2000. Between 1990 and 2000, the suburbs expanded by nearly 250,000. 17 Additionally, the city's nonwhite population went from 24 percent in 1950 to 70 percent in 2000. The suburbs, in contrast, remained mainly white (increasing from 10 percent nonwhite in 1950 to 21.8 percent in 2000). Second, while the number of jobs in the city grew modestly (a gain of 61,972 between 1950 and 2000), the city's position relative to the suburbs worsened. In 1950, 79.1 percent of metropolitan area employment was located in the city (325,630 jobs). By 2000, only 33 percent of metropolitan employment was in the city (387,602 jobs versus 795,122 in the suburbs). Once the mighty economic engine of the region, Baltimore has become a poor relation. Third, the city became poorer as measured by income and prosperity values. In 1950, median family income in the city ($22,430) was second to only those of two suburban counties ($24,971 and $22,752, respectively) and was slightly higher than the suburban average of $21,155 (in constant 1998 dollars). By 2000, this situation had changed dramatically. By then, Baltimore's median household income of $27,713 compared poorly with that of the suburban average of $55,404 or the suburban high in one county of $68,024. The city also lost considerable ground with respect to tax base. For example, Baltimore's property value grew by over $9 billion between 1950 and 1960 (62 percent) when it peaked at $24.2 billion (in constant 1999 dollars). However, since then (with the sole exception of the decade of the

BALTIMORE

141

1980s), property value in the city has been on a downward trajectory. Between 1960 and 1980, it declined to $13.6 billion; increased to $20.2 billion by 1990; and decreased to $18.4 billion by 2000. Although between 1950 and 1999, the city experienced a net gain of 23 percent in property value, since its peak property value in 1960, it has lost 24.1 percent of its property value. The gain in the 1980s is primarily attributed to inflation affecting property values region- and statewide. 18 At the same time that Baltimore's property values were in free fall, property values in the suburbs skyrocketed. Between 1950 and 2000, suburban property values increased over 2,000 percent, from $5.2 billion to $114.0 billion. Finally, Baltimore City carries a substantial municipal overburden. For example, it houses about one-third of the persons living in poverty in the state and 60 percent of these in the region; approximately two-thirds of city school children are eligible for federally subsidized free or reduced-price meals; approximately 50,000 IV drug addicts reside in the city.19 Additionally, Baltimore City has an estimated 40,000 abandoned houses, many of which are derelict and literally falling down. At the same time, there is a substantial waiting list for public housing in the city and the absence of any substantial amount of public housing in the suburbs. Finally, the city experiences some of the highest incidences of crime (especially murder), teen pregnancy, and sexually transmitted diseases of any large city in the nation. This statistical portrait indicates a central city that has clearly been in decline for at least the past five decades. As a result, since the 1950s, Baltimore's city government and business leaders have faced a daunting task-how to stem the tide of population and economic movement away from the city. With regard to the city center, city government and the business community first embraced office development (the Charles Center project) and then tourism (the Inner Harbor project) as deliberate economic development strategies. City leaders chose these strategies in part because few, if any, other options appeared viable at the time. Certainly, few others were even considered (e.g., reindustrialization, housing, biotech, high tech, life sciences) and none of these was pursued consistently or as strongly as tourism. Hindsight suggests that city leaders were correct in their choice of a tourismbased economic development strategy, although at the time that choice certainly appeared risky.2o No American central city has been successful in reindustrializing, hardly any have been successful in maintaining significant downtown retail activity, hardly any have managed to reinvent themselves as first-choice residential locations, and only a very few have been more than modestly successful in other local economic development efforts. As has been shown elsewhere, cities are at best "semi sovereign," and are affected

142

BUILDING A TOURIST SPACE

by external social, economic, and demographic forces over which they have precious little contro1. 21 Perhaps the most important factor enabling Baltimore's officialdom and business leaders to choose a tourism-based economic development strategy was the very existence of the Inner Harbor. The economic and technological changes in the maritime industry that rendered older port areas less than economically viable also provided waterfront cities with the opportunity to revitalize in new and strikingly different ways.22 They could turn the old port areas into urban playgrounds, a choice that Baltimore and other cities made. According to Brian Hoyle: "Virtually every North American city possessed of urban waterfront ... has taken some steps towards the rediscovery and redevelopment of the interface zone."23 A second factor that made the redevelopment of the Inner Harbor possible was the earlier redevelopment of Charles Center and its focus on office construction. As Douglas Wrenn has noted: "A main impetus behind the private sector's decision to invest in the Inner Harbor area was the potential for office development.,,24 Between 1973 and 1980 over 1.6 million square feet of office space, including five new office buildings and a new federal building, were added to Baltimore's downtown area. "Without this office growth, there would not have been sufficient critical mass to encourage the overall rejuvenation of the Inner Harbor."25 Baltimore's business and civic leadership chose a tourism-based economic development strategy for the city's downtown in response to external forces over which the city had little control and also because the existence of an urban waterfront area provided the centerpiece and principal attraction for what was hoped to be a successful revitalization effort. Finally, city leaders chose the tourism-based economic development strategy for the downtown because of the absence of other viable economic development strategies for the city center. 26

Impacts of the Strategy One significant question, of course, concerns what effect Baltimore's tourism-based economic development strategy has had. In the best of social science terms, the answer is: "It all depends." By certain measures, the impact of the Baltimore Renaissance has been and continues to be highly positive. By other measures, the Renaissance has produced a shining urban center but one surrounded poverty and decay, or, as Peter Szanton reported, "the rot beneath the glitter.'>27 As various investigators 28 have pointed out, the success of the Inner Harbor and the propaganda of city officials have failed to

BALTIMORE

143

address problems in the rest of the city or to stem the continuing exodus of residents and businesses to the suburbs. Yet, it would also be fair to say that almost no matter how effective Baltimore's economic development strategies were (both the downtowncentered strategy and strategies for other parts of the city), several "push" and "pull" factors in the city and region most likely would have produced results in the rest of the city very similar to what is observed today. Indeed, without the Inner Harbor, those factors arguably would have produced even worse results for Baltimore. The principal factors that have pushed residents from the city have included at least the following: an old housing stock in many inner neighborhoods made up of small dwelling units tightly packed on small lots in high densities (many of which are row houses), numerous abandoned housing units, high crime rates, high rates of drug abuse, a deplorable school system, a decaying physical infrastructure, high taxes, and high automobile insurance rates. The principal factors pulling city residents to the suburbs have essentially been the opposite of the "push" factors (e.g., detached single-family dwelling units on green, landscaped lots; low crime and low drug-abuse rates, good schools, lower taxes, etc.). "Pull" factors have also included the availability of suburban jobs and the overall cachet of the suburbs, including their relative newness. The movement from the city and the growth of the suburbs in the Baltimore region have also proceeded, in part, because, as shown in a variety of public opinion polls and by actual behavior, most Americans prefer suburban or rural living to city living. (In this respect, the Baltimore region is little different from the other 300-plus metropolitan cities in the United States.) Additionally, as Anthony Downs 29 and others have observed, another factor abetting the decline of center cities is unrestricted suburban growth. As long as Americans prefer to live in the suburbs and as long as suburban growth is largely uncontrolled, most central cities will be competitively disadvantaged (especially those that cannot annex suburban territory, and Baltimore cannot). Thus, even with hindsight, it is hard to imagine how Baltimore might have overcome the seemingly inexorable trends of the past fifty years. What is more, without the Inner Harbor redevelopment, Baltimore's predicament would probably be far worse than it currently is. Next, I examine the city's downtown tourism-based economic development strategy to ascertain, as far as possible, its impacts on physical development, tourism (especially tourist utilization and spending), jobs, and tax base in the downtown and its overall benefits to the city.

144

BUILDING A TOURIST SPACE

Physical Development By nearly any measure, the physical redevelopment of Baltimore's once rundown, dilapidated waterfront area has been impressive. As Table 6.1 and Photos 6.1 to 6.4 have shown, in just over twenty-five years, decaying and derelict wharves and warehouses have been demolished, and in their place numerous modern buildings and other physical facilities have been constructed, totally transforming the Inner Harbor. For the most part, these facilities are quite attractive and architecturally pleasing. As Dale Thomson has noted: "The design standards associated with the Inner Harbor redevelopment have resulted generally in pedestrian-friendly, aesthetically pleasing designs that have won multiple awards."3o These facilities and the considerable public space surrounding them are much utilized by tourists and residents alike. The Inner Harbor has become a sparkling and dynamic locus of activity, a public space for the recreation and leisure activities of all who desire to come there. Moreover, both city leaders and residents alike are proud of the Inner Harbor, and its utilization has not created animosity or tension between city residents (who use the Inner Harbor in significant numbers) and visitors from beyond the city limits.3! In addition to facilities constructed anew in the downtown, considerable redevelopment, renovation, and expansion of older buildings have occurred in or near the Inner Harbor. Among others, these have included the Wyndham Hotel (1986), the Hilton Hotel and Towers (1986), the American Visionary Arts Museum (1995), Port Discovery (1998), the Power Plant (1997-98), and Power Plant Live! (2001). Additionally, private reinvestment in, and redevelopment of, at least three nearly residential neighborhoods (a.k.a. gentrification) has been spurred as a direct result of the Inner Harbor redevelopment. 32 The face, the streetscape, and the skyline of the Inner Harbor and nearby neighborhoods have been dramatically transformed. Many an American city would envy Baltimore's record for the physical redevelopment of its Inner Harbor. One question that might be asked about the expenditures behind these facilities is whether, as some have argued, they were made to the detriment of other purposes that might have slowed or reversed the decline of other parts of the city. This is a highly contentious issue in which critics like Marc Levine33 and others have essentially viewed funding for downtown redevelopment in Baltimore as a zero-sum game in which a dollar spent downtown is a dollar less that would have been available for purposes such as neighborhood redevelopment, social programs, education, and the like. On the other side of the argument are proponents of redevelopment, such as Mayor William Donald Schaefer's development director, Bernard Berkowitz,

~

0.

Cl

i

Iii

Ii5

~

W

Ii5

C"",*,nSt

0

RedwPod SI RedwbooSt

Baltimore's Inner Harbor

i

a:

Lornbard SI LombardSI

j

tn

~ Z3

8

0 (.)

~

(!)

I!2l i12J ®

',0.;

:§> ~

ill ~

@1nnatPierS @lnnatPier5

(.) G

£:

I1ii

~

w!

LeeS! LeeS!

1fcJJ. r1OJ'

ViJ W

Ticketed Tourism FadlitiesFacilities@ScieltceCenter @SclenceCenter&:I1.1AX &: IMAX Theater

@OaysInn @DaysInn

'

~ 00

C2)Hyatt @HyattBote-l Hotel @USF ®USF Constellation f@lHarbor Court Hotel &: Condos @UghtShip Chesapeake @JH.arborCourtHotel&CondO$®tightShipChesapeake @RenaissanceHotel @SubmarineToTSk tWRenaissance Hotel ®Submarlne TOTSk

~ fllli

,

,83. ,83

G2J I!2J

@;Seven Foot Knoll Lighthouse @lSevenFootKnoll fool K.noU Ughtho....

tOlL

"N

~St ~St

-.fleetSt -.FleetS!

£Power APower Plant Arowe'rW\,

M,Calleria .1.tGalleria £c.n.n.

0

~ ..... Pier s... Six c Concert Pavilion EiI ....... •• vllion

~ Columbus CoIumbus CenteI' Center ~CIu_c.n ....

I!21World [!2JWorld Trade Omter Centcr Ii!I\\\:wIJTrod.C ......'

Iffi IHl Yacht Basin fi!ly.dll 80sln

(JJ {1] Baltimore Convention Center 00.1_C.""",_

Other Other--~ Olh«

(jj;National Stadia[);omy'''Y Aquarium @NationalAquariuminBaltimore Aqu~u1um in I,. Baltimore <il"l\OrC StadiaSt3dia -

@® ®®

@J @)

;@ ,@

Eastem'Ave

£ . £. I£i, EastemAve

~American Vl.sionary Shops/Restaurants Visionary Art Museum ShopslResl>u ShopslRestaurants ..nts-.6. @Sheraton Inner Harbor Hotel \1YBaltimore @Baltimore Museum Mu~m of Industry &Pavilions at H.:bo

®

/.>.. @

::E ~

~a: ~ ~

~

®

G Discovery StOldium -

V1

IV

Includes museums, science centers, monuments, historic sites

43.0 35.0 11.3 15.0 16.5 Does not include anticipated $60 million to $100 million in conjunction with expansion of Palais des Congres

150.5

160.0 55.0 32.7

59.2 "Eco-museum," with imitation rain forest and arctic environments; converted from Olympic Velodrome 34.8 65.0 49.0 32.7 Space center 14.4 Botanical gardens 22.0 Comedy museum 30.5 Canadian history museum 35.7 Montreal archaeology and historical museum 93.0 252.0

576.1

35.0 Amusement park run by city on site of Expo 67; sold to Six Flags in 2001 30.0 Administrative and training center for international troupe

Sources: Tourisme-Montreal, see nn. 4, 16,62,68; Bodson, Samson, Stafford, see n. 37; Morin, n. 18; Levesque, see n. 33. *All investment totals represent the original, noninflation-adjusted expenditure. **Does not include operating deficits of publicly owned facilities.

Biosphere Centre Canadien d'architecture Centre des sciences Cosmod6me Jardin botanique Musee juste pour rire Musee McCord Musee Pointe-a-Calliere Musee des beaux-arts de Montreal Recreo-Touristique Facilities Major investments include Vieux-Port Parc-des-I1es Ecluses du Canal Lachine Neighborhood and Commercial District Improvements Major investments include Downtown commercial revitalization Complexe Desjardins Cours Mont-Royal Promenade de la Cathedrale Vieux-Montreal

Attractions Major investments include Biod6me

La Ronde Cirque du Solei I

N

VI VI

256

RESTRUCTURING THE URBAN ENVIRONMENT

Thus, no matter the fiscal worthiness of subsequent investments, red ink will always dominate the historical balance sheet of Montreal tourism. However, in fact, although tourism investments since 1980 have not produced fiscal disasters of Olympian scale, there is scant evidence that most have made fiscal sense either. Three prominent examples follow.

The Convention Center Like most convention centers, Montreal's Palais des Congres-built for $81 million in 1983 and currently undergoing a $185 million expansion-runs a substantial annual operating deficit: $6 million in 1997, projected to reach $18 million when the expanded center opens in 2002. These deficits are presumed to be counterbalanced by the tax revenues produced by the spending of conventioneers in the city, but at least one analysis suggests that the costs of the expanded center will exceed these revenues by $5 million annually.58 Moreover, the hypercompetitive and potentially saturated conventions market means that many cities, including Montreal, may have underperforming centers generating even higher levels of red ink in the years ahead. 59 In 2001, thirty-four new facilities in North American cities were either completed or under construction, and thirty-three existing centers had broken ground on expanded exhibit and meeting space. Expansions in thirtysix additional cities were in preliminary stages. 60 Montreal itself has three convention and exposition facilities-the Palais, the Olympic Stadium, and the Place Bonaventure-which provided 1.2 million square feet of space, even without an expanded Palais des Congres. 61 The economics of convention centers in this environment is, to say the least, uncertain. According to Tourisme-Montreal, the number of "business tourists and conventioneers" coming to Montreal declined by 38.9 percent between 1986 and 1999; curiously, this corresponds more or less to the years in which the Palais des Congres has operated.62 More ominously, the number of conventioneers attending large (1,200 or more participants), multihotel meetings at the Palais-the most lucrative end of the conventions market-declined by 33 percent between 1995 and 1999.63 Although the number rebounded in 2000, through September 2001 it had returned to the low 1999 level-and this was before the events of September 11. 64 Now, these declines may simply have been the result of the growing obsolescence of the Palais' exhibition space, which was the chief argument in favor of expansion. However, uncertainty in the hypercompetitive market for conventions means that an expanded Palais des Congres is by no means a fiscal "sure thing." Early reports on the 1990s expansions of convention centers in Baltimore and Chicago, for example, suggest that new space has been going unfilled. 65

MONTREAL

257

Business tourists and conventioneers are especially coveted by cities as "big spenders." But a study by Tourisme-Montreal found that "business tourists and conventioneers have little time to spend on tourist activities" in townonly 29.7 percent of those surveyed in 1999 indicated that they had visited a tourist attraction in Montreal outside of the convention center. 66 Apparently, conventioneers are not much of a fiscal benefit for other tourist activities in Montreal. In fact, almost 75 percent of conventioneer spending is on two items: lodging and meals. 67 In a very real sense, therefore, the Palais des Congres can be viewed, in economic development terms, as little more than an expensive subsidy to Montreal hotels and restaurants.

Professional Sports Montreal's investment in professional sports has been aimed, in part, at attracting tourists. Relatively modest public investments for a tennis stadium and auto racecourse, combined with corporate sponsorships, have brought two major international events to the city: the Canadian Open Tennis tournament and the Grand Prix Formula One race. The latter, in particular, is a substantial attraction, bringing to Montreal 250,000 spectators who spend about $50 million; for Montreal hotels, Grand Prix week is the busiest of the year.68 The most substantial public expenditure for sports has been for the Montreal Expos baseball team, possibly the most heavily subsidized professional sports franchise in North American history. The Olympic Stadium was built for the Expos' use after the 1976 Games; indeed, the retractable roof that caused so many problems and cost so much was a mandate of the baseball league. 69 To keep the team in Montreal when it was for sale in 1991, the city, province, and Quebec labor federation provided $43 million in equity capital and loan guarantees. 70 In addition, the provincial government spent $30 million to reconfigure Olympic Stadium in the early 1990s as a "more baseball friendly" facility and provided $25 million in "rent abatements" and other subsidies to the Expos.7l Although the team president at the time pronounced the revamped facility "one of the best baseball stadiums in North America,'>72 by 1997 the team was demanding a new, publicly supported downtown ballpark-modeled on Baltimore's heralded Camden Yards-as a condition for remaining in Montreal. Initially, the provincial government balked. "We don't open stadiums when we're closing hospitals,"73 stated the province's premier, and it appeared that Montreal might be one of the few cities to resist the blackmail practiced by major-league sports franchises to secure publicly funded stadiums and arenas. Eventually, however, the government relented and offered a $160

258

RESTRUCTURING THE URBAN ENVIRONMENT

million subsidy for the proposed ballpark, largely on the novel (and totally undocumented) argument that public expenditure was justified because the Expos' presence in North American media generated publicity for Montreal worth at least that much. 74 Serious studies of the Expos' situation, of course, confirmed what researchers across North America have found: that there is no economic or fiscal justification for publicly financed professional sports stadiums,?5 Few tourists attended Expos' games-in fact, according to Tourisme-Montreal, only 456,000 visitors (less than 8 percent of the total annual tourists to Montreal) attended any sports event during their stay in the city.76 By 2001, few Montrealers attended Expos games-the team had, by far, the lowest attendance in the major leagues, and the franchise was in imminent danger of being shut down by league officials. Despite the pledge of public funds for the proposed new ball park, internal wrangling among the team's owners effectively stymied the project. As the saga of the Expos drew to an end, after billions of dollars in subsidies 77 for the team, the Quebec minister responsible for the Olympic installations acknowledged: "The 81 games of the Expos give me the same level of income as a one-week exposition."78 Urban Entertainment Destinations

Substantial public funds have been spent in Montreal on various entertainment and "recreo-touristique" facilities. Some appear to have positive ledger sheets; others are stained with red ink and look like urban "deal making" at its worst. The government-run Casino de Montreal, for example, generates $400 million annually for the Quebec treasury, although as almost all of its patrons come from within the province, these are more "substitutable" consumer expenditures than "import" dollars derived from tourism. Moreover, recent studies have revealed a spike in compulsive gambling in metro Montreal since the opening of the casino and concomitant social and public health costs. Surely these costs figure in the fiscal balance sheet on this investment. Facilities such as the Vieux-Port and events such as Montreal's summer festivals also seem to have positive ledger sheets. Tourists constitute about 25 percent of their clientele, and they draw large numbers of suburbanites to the city. The festivals generate about $50 million in tourist spending, with relatively modest public investments (and considerable corporate sponsorship), while the Vieux-Port, financed largely by the federal government, produces average annual revenues of about $25 million,?9 Moreover, as we examine shortly, these are not simply tourist attractions: they are recreational facilities and entertainment events mainly frequented by city residents,

MONTREAL

259

enhancing the quality of life in a "ville-festive"-a difficult-to-quantify but important factor in assessing their fiscal worthiness. 8o By contrast, public funds have been invested in a number of projects of dubious fiscal merit. The city's four science-based tourist attractions-the Botanical Gardens, Biodome, Insectarium, and Planetarium---