Urban Development Policy “The Politics of Bread and Circuses,” by Peter Eisinger

Introduction to City Planning  What is the role of municipal government? – To manage the politics of city building through public policies and laws.  For example: – Government sets economic development policies; – It sets policies for the distribution of public amenities services and resources; – It sets policies to manage the political process; and – It sets policies to maintain law and order.

The Purpose of City Planning (late 19th century to the1970s)  Oriented around building an industrial city.  Included the accommodation of residential (working class) interests, including: – The provision of basic infrastructure; – The provision of public health and safety; – The expenditure of public resources for the entertainment and recreation of city dwellers.  The role of municipal government was, thus, to provide the public services essential to the health, safety and civic education of the industrial working class who resided in cities.

The Purpose of City Planning (1970s to the present)  In the late 20th century and beyond, the role of municipal government has changed.  It is now oriented around building a post-industrial city.  New priority to make many US cities “places of play” for tourists, conventioneers and suburban visitors.

The new context of urban entertainment investment  Local governments are investing a much greater proportion of public funds in sports facilities, convention centers and other entertainment amenities.  This is occurring at the same time that the urban population is shrinking (and the tax base declining) and the number of the urban poor is increasing (and the social welfare needs are rising).

The new context of urban entertainment investment  Whereas the patron base for urban recreational facilities was once the urban populace itself, now today’s entertainment facilities are designed to bring visitors into the city.  The facilities that are built today are bigger and more expensive than they were in the past, requiring a greater proportion of urban public expenditure than in the past.

Building a city for visitors  In pursuit of big entertainment projects, municipal elites create a hierarchy of interests that prioritizes the comfort and concerns of visitors over that of residents.

Economic implications of tourist growth model  Promoters of the entertainment amenities model of economic development argue that big entertainment projects will generate big economic benefits for the city.  It will, according to promoters, attract revenue from outside the city, which will in turn stimulate the city’s economy.

Economic implications…  But studies have shown that this model does not necessarily generate large economic returns. – Cost overruns often increase city investment beyond what is originally planned. – Large capital investments bind the hands of city government, and complex financing schemes often constrain the degree of fiscal flexibility of the city. – Projections of economic benefit are often exaggerated and spin-off economic activity is minimal.

Political implications  Directing public subsidy to entertainment projects strains links between leaders and residents. – Many residents oppose the commitment of public funds to the construction of big entertainment amenities.  Referendum outcome typically produce negative results. – Residents often perceive big capital investment on entertainment as a diversion of funds from badly needed city programs and services such as public education.

Environmental Implications  Mega-projects siphon off resources such as water, electricity, etc.  They add to the city’s waste stream  They bring more cars and buses to the city

Social implications…  Civic agenda skewed in favor of downtown interests. – Cities divert resources so that downtown areas are cleaner, safer and more convenient than residential areas. – This can sometimes intensify race and class antagonisms that are already in place in cities. – Entertainment amenities growth model creates two cities: one for developers, suburban professionals and white middle class gentrifiers and another for people of color, displaced manufacturing workers and residents in poor, neighborhoods.

Case Study: Atlantic Yards

Atlantic Yards  $4 billion project to build a new stadium for the Nets; office tower and three residential buildings.  Created huge battle when they used eminent domain.  Developer just announced that two of those five buildings are on indefinite hold.  Everything else is delayed except for the stadium, including transportation infrastructure improvements developer promised to make.  As of early this month, only 100 people were put to work compared to 1,476 predicted in state documents by late 2010.

Case Study: the New Yankee Stadium  Yankees contributed $800 mm in construction funds  City contributed $210 to replace parks, garages and to make infrastructure improvements  But Yankees did not have to pay rent, property taxes, or other taxes.  Plus, the city generated tax exempt bonds so the Yankees could raise the construction money.  And they issued bonds + an additional $100 million in city and state grants to create 9,000 parking spaces.  As of Sept. the parking developer was on the verge of defaulting on paying back its bonds + it failed to pay rent to the city.

Yankees Cont.  In their “community benefits agreement” the Yankees agreed to give roughly $1.2 million a year, starting when the work began, to various community groups. But 16 mos. after work began, they had not distributed any of it.  New parks promised by the team were delayed by several years.  Now that they are open, new parks are state of the art.

Balancing urban priorities  Eisinger says that the public expenditure on entertainment amenities should be balanced with expenditure on other public services.  Entertainment projects can typically pay for themselves without government investment.  Most projects provide low economic returns in the way of jobs and tax revenues.  Why do cities continue to support this investment model?  How should be get urban priorities back in balance?