Exit133 is about Tacoma
What Holds Back Tacoma’s Economic Development?
What holds back Tacoma's Economic Development? It is a provocative topic that stirs an expected range of reactions from defensiveness to concern that Tacoma isn't accomplishing more. The following piece is long for Exit133, but well worth the read. Blaine Johnson heard a question and went looking for answers over the last year. The topic stirs emotions in politicians, residents, businesses and visitors to Tacoma. Do you agree? Do you disagree? Where do we go from here?
One year ago, then City Councilman Jake Fey posed a question at the end of an Economic Development Committee meeting: “What holds back Tacoma’s economic development?”
The topic seemed sufficiently provocative that I have subsequently explored it with dozens of individuals ranging from positions of significant influence in the community to small business operators, people in the arts, politicians, governmental and private sector administrators and the proverbial man on the street. Many of the responses were in the form of lengthy emails conveying thoughtfulness and passion for the city. Nearly everyone asked for anonymity out of concern it might make their future dealings awkward. Their direct quotes are represented in italics.
While these opinions were being gathered there has been some encouraging investment in Tacoma. Still, we remain economically weaker than the region. – a chronic condition we struggle to overcome.
Much of the expressed passion was laced with frustration, in some cases annoyance, that Tacoma is not as economically vibrant as it should be. Given its assets - an appealing location globally as a gateway to Asia, regionally situated between the financial dynamo to the north and the state capitol to the south, functionally served by a great harbor and esthetically endowed with an accessible waterfront, museums and arts, and dramatic vistas in all directions - there is a feeling Tacoma is under-performing to its potential.
"Tacoma has always seemed to be victimized by business cycles and trends. It either is too slow in reading them or making the smart move in response to them. It’s a legacy that haunts us to this day and to not pay attention to where we have been puts into jeopardy hopes of doing considerably better in the future."
If trends can be seen as tides, Tacoma began with a tsunami and has ebbed and flowed with a lot of slack water ever since. When Tacoma became the terminus for the Northern Pacific Railroad, the wave of migration from the east produced an almost incomprehensible surge of growth in population and building in the1880s.
Tacoma was at a pace with Seattle. Then the national financial panic of 1893 caused a large outflow of Tacoma’s population. The numbers were replaced by the 1900 census, but Seattle had captured the economic wave as the jumping off place for the Alaskan gold rush in 1898 and never looked back. Tacoma never again caught a wave of that magnitude.
1870 78 1,151
1880 1,098 3,533
1890 36,000 42,830
1900 37,710 80,670
1910 83,740 237,100
1920 96,960 315,300
Thus, began a century of riptides that eroded Tacoma’s efforts to become the dynamic city that was originally perceived as its destiny. Still, into the 60s the city gathering place was downtown, where people worked, went to movies, restaurants, social clubs, watched parades and shopped on streets as busy as anywhere in the west.
"Tacoma’s economy was built on the extraction of natural resources. It was the timber capital of the world, but it remained a smelly, smoky place while Seattle was changing in the past 30 years and that got us stigmatized as a dirty industrial place to hold your nose and ignore as you drove through the area. The reality has changed, but the perception still hurts us regionally.”
The railroad delivered the people who created one of the major cities in the west. The automobile took the heart out 75 years later when the Tacoma Mall was built.
“By October 1965, there were 80 new stores in the mall, including 32 former downtown Tacoma mainstays. Suburbia all but killed Tacoma, leaving downtown a wasteland for decades. There are still many people in Tacoma and in the county who do not see how important a revitalized downtown Tacoma is economically.”
Concurrent with the exodus of business from downtown, was the heavy handed application of urban renewal that brought down many architecturally significant properties. The restoration of the Pantages Theater in 1983 is credited with stemming the tide of erosion and providing a toehold for the renaissance of downtown.
Leadership, praised and criticized, was referenced repeatedly in the responses to Jake’s question. There is a sense what happened in the 1990s was Tacoma’s best surge forward in 100 years, driven by a powerful Executive Council.
“This was an extraordinary group of powerful, talented, decisive individuals with divergent interests who became partners in a focused task - business and civic leaders that included Bill Philip, George Russell, Erling Mork, Larry Killeen, Bill Honeysett, Kelso Gillenwater, Ray Corpuz, George Weyerhaeuser and David Allen.
“Desperation breeds risk-taking. Tacoma was SO far down in the early 80’s, so forlorn, so desperate, we were willing to try anything to get out of our hole, even willing to suspend democracy, process and accountability and allow unelected power-brokers to break logjams and stimulate groundbreaking projects without oversight or permission from taxpayers, councils or commission. We broke the rules and got things done. Can that be done again? I wonder.”
This tidal surge was the guiding hand for such major downtown projects as the University of Washington Tacoma branch campus, Thea Foss Waterway, Union Station, the Washington State Historical Museum, the Chihuly Glass Bridge, the Museum of Modern Glass, the Columbia Bank building, the Pierce Transit center and the Theater on the Square development above it. The key was leveraging vision with performance.
“I would say what is missing today in Tacoma’s economic leadership, is 1) a lack of imagination, 2) a lack of decisiveness and 3) a lack of follow through.” The leaders talk a good game, but their actions are often contradictory, sending mixed signals about what they intend in regards to business.”
Much of what was identified as holding back Tacoma centers on us and the challenge/opportunity seems within our control if we can get our act together.
Gaps & overlaps – This describes much of the criticism of how Tacoma pursues economic development. Criticism even comes from some of those directly involved with the various organizations responsible for economic promotion. They cite a lack of communication and coordination, partly due to turf battles, that inhibits the most efficient use of the collective resources. Greater collaboration in this area is essential and could pay dividends.
“We need to be sorting out/coordinating various economic development entities’ roles /responsibilities in such a way that our efforts are focused and meaningful in outcomes, and finding an agreed upon pathway whereby new initiatives/new projects have a chance to be advanced/discussed/condensed/prioritized by both public and private stakeholders. We need to do much better.”
There are over two dozen organizations involved with promoting Tacoma in one role or another.
“There is a lot of hand-wringing in Tacoma about how we can’t get any respect and we don’t have enough resources and it’s excuses, excuses . . . If you really want something, you figure out what needs to be done and you go do it. I think we not only lack vision, but we aren’t very efficient in using the resources we have dedicated to economic development. Why can’t all these organizations just develop one strategic plan?”
Beyond the banalities - For all our assets and outreach opportunities, a number of criticisms were made about the lack of distinctive marketing for tourism as well as investment, such as the U.S. Open coming in 2015 to Chambers Bay Golf Course:
“Everyone says this is going to put Tacoma on the map, let the world know who we are. Well, what exactly is our story and how are we leveraging that event to promote ourselves in the meantime. “
“Tacoma/South Sound has done a rotten job promoting itself. Last year Fortune Magazine featured a multi-page “advertorial” on Washington State . . . The only mention of Tacoma was a few words mentioning the Glass Museum. I called the person in charge and he said they made a special effort on Tacoma-Pierce County but got no traction or interest at all… where were the Chamber, EDB, VCB, City and County folks who are responsible for promoting us? Asleep?”
Several months ago, a consultant coming to Tacoma was unable to find one piece of literature about Tacoma at Sea-Tac Airport. A recent check turned up a new Tacoma guide, which equaled the representation of Gig Harbor, LaConner and Winthrop.
“We have this great story to tell about all our tourist attractions and yet we have been doing it in such a mundane manner, if at all. We just don’t seem to be able to break out creatively. For all we have to offer, I would say the way we sell it is pretty lame.”
For all the calls for boldness, perhaps the new visitor bureau slogan “Fearless Exploration” will define the mission ahead in finding ways to tell Tacoma’s story.
Civic mindset - While many saluted Tacomans as honest and hard-working, part of the mission is believing the story ourselves.
“If you want to get into a little psycho-babble, Tacoma has problems with how it views itself. There is a self-doubt that really good things can happen here. Every time we think were on our way, something stops us short. We’re going to be a big financial center and Russell bails on us. We’re going to have a downtown full of people living there and the real estate market collapses.
“What is worse than disappointment is a cynicism or jealously of anyone who might be getting ahead. A new restaurant opens and the ones around it feel threatened as if it’s a closed, net-sum-game. If people are afraid of growth and change, we’re going to miss out on the opportunities that are right there for the taking and I’m talking about New Urbanism, which should be Tacoma’s salvation.”
Community involvement - The City, which has a structure of 15 business districts and eight neighborhood councils overlapped in 17 mixed-use centers, is currently examining the effectiveness of these entities. The intention is to get close-to-home engagement by citizens and businesses. Many of these entities are either functioning in name only or criticized for not promoting the communication for which they are designed.
Meanwhile, there are pockets of community activism where neighborhood spirit can be transforming, such as in the Theater District where businesses, residents and the arts community have produced a number of public amenities. The Hilltop Action Coalition is another citizen-based organization operating on local passion.
“People feel good when they join together in a common purpose, like cleaning up a vacant lot down the street, getting their exercise by walking around the block picking up litter, looking after each other in neighborly ways, that’s what can be happening all over Tacoma to make it the most livable city anywhere. That’s at the grassroots level that promotes quality of life and, believe me, it leads to economic value. Don’t forget it was community activism that saved Union Station and the Murray Morgan Bridge.”
The governing gauntlet – City Manager T.C. Broadnax was described as “the mystery man from San Antonio who has come to town to clean up a mess and change the culture so that people will feel like trying to do business in this city.” There was an era where the City leadership aggressively participated in development and promoted others to do the same through supportive staff. This was followed by a reversal of direction that discouraged many trying to do business in an already bleak economy.
“Trying to navigate the planning/permitting/licensing functions has been a huge barrier for business small and large. In recent years there has been no ‘Culture of YES’, instead the systems and values are contradictory in codes, enforcement and operations.”
Now, there are signs of a more cooperative approach being directed internally and the City is overtly trying to promote investment, including marketing properties it owns. That should help shift at least a few properties onto the tax roles, a welcome move with close to half of downtown properties and 38.4 percent city wide (highest in the state) tax exempt, including non-profits.
The value of developing vacant sites, including those in the private sector, can be significant, even with tax incentives to promote development of multi family or historic rehabilitation. An example is a parking lot site that paid $6,000 per year in property taxes and had crime problems. After a multi-family project was built on the site, the increased land value results in over $25,000 in annual taxes, even with a tax credit.
Of the approximately 12,000 business licenses in Tacoma, half are independently owned, many on the mom & pop scale. The impacts of regulations and the process to meet those requirements can impose a heavy drag on the ability of those businesses to grow or even survive. A number of individuals cited the need for organizations responsible for promoting business to exhibit greater sensitivity to the needs of the entrepreneurial sector.
“This City Council seems disconnected from the realities of running a small business when you look at some of the policies they have put forth. Warren Buffett said something about finding out who is swimming naked when the tide goes out. Well, the economy hasn’t come back in Tacoma like it has all around us and that means we don’t have the luxury to put all the social agendas on the backs of struggling business people like they can do in a place with a stronger economy.”
For decades, the void of a weakened local economy left little push back against treating the area as a dumping ground for the state’s social problems, from released prisoners to those in incapacitating distress. Local government needs to insist on Tacoma being treated in balance with other communities in the state, and the subsidized housing and special needs facilities need to be distributed fairly throughout the community.
Port of Tacoma – If there was ever a trend that Tacoma nailed it is containerization. I was in a management position at the port in the mid-80s when the first major on-dock intermodal infrastructure was built to accommodate the arrival of Sea-Land and Maersk shipping lines. The ability to move cargo between ship, rail and truck in a relatively uncongested industrial zone, operated with a lean and productive staff, an aggressive deal-making philosophy and a productive ILWU partnership combine to make Tacoma encouragingly competitive in a brutally competitive business.
As Seattle fights against the type of gentrification that has erased cargo handling from the waterfronts of Manhattan and San Francisco, Tacoma needs to stay lean, mean and independent. While it is at it, its business acumen should be more engaged with the larger economic development agenda.
International engagement - The first cargo of tea from Japan, to be transshipped eastward by rail, arrived in Tacoma in August 1885. Three months later a band of racist thugs led by the mayor force-marched the Chinese out of Tacoma. Ever since Tacoma has built its shipping trade with Asia, while struggling to attain significant commercial investment from Asia.
Positioned as a gateway to Asia, Tacoma is plainly failing to capitalize on a trend that has economically transformed areas such as Richmond,. B.C. and the San Gabriel Valley in Los Angeles through Chinese immigration over the past quarter century. There are many in China who have prospered during the economic boom who want to reposition their business resources into investments in the United States. There is an opportunity to capture some of that “Made in China” capital through strategic, relationship-based connections.
Educational outreach – The colleges and even some high schools in the Tacoma represent collective resources that can be packaged and provide considerable enhancement to economic development, including the connection with international students.
Environmental remediation - If there ever was a trend that leverages a previous one it is the clean up of industrial pollution from land and water. Tacoma is the poster child for transforming contaminated sites into high value reuse, with the Foss Waterway and the former Asarco site serving as living laboratories. The Center for Urban Waters should be developed into an institution of global prominence.
Arts – As widespread as the praise was for the cultural amenities, the museums and performance organizations, there was criticism that these attributes are under promoted. There is a call for better packaging of our attributes to the outside world and also a need to ensure these assets are nurtured within the community.
"Tacoma has an incredible array of museums and performance entities for a city its size. But, unless we fund and support these existing entities and organizations, rather than adding more, we risk draining the sustainability of these wonderful assets."
JBLM - In 1917, local business leaders promoted a bond measure to buy 70,000 acres and donate it to the federal government for what became Fort Lewis. Ten years later similar action created what became McChord Air Force Base. Today the combined facilities are the state’s second largest employer with 63,000 jobs.
“Despite the huge jobs and money spent locally for housing, food, cars, etc., we really haven’t maximized the asset that JBLM provides. As these well-trained, disciplined people leave the service, they are prime to be drawn into the local workforce, many as individual entrepreneurs. We are not doing what we could to connect with those people.”
New Urbanism – There were several specific mentions of this as a trend on which Tacoma will rise if it can effectively address the issues recited here. The best feature about pursuing the new is that it can be built on what Tacoma was made of originally – a pre-automobile layout that served a pedestrian scale and public transportation. This is about density and diversity of uses, where people live, work, seek entertainment and shop within close proximity. If we want a vibrant city, this is the script.
The takeaway - If Tacoma was a completely undeveloped site, sitting on Commencement Bay, people would be as wild about coming here as those tens of thousands were when they flooded in 125 years ago. Considering the amenities we have added even in the past 20 years we have to ask ourselves what is missing in our message that keeps us from fulfilling our potential. Inherent in that answer is what holds Tacoma back.
There are things we can do about what is lacking, to encourage how others perceive us and how we perceive ourselves. There are plenty of informed ideas and strategies layered under these snapshot observations. Ultimately, it our performance that will determine if we are going to paddle in the slack tide or surge ahead to realize the potential that was recognized in a tsunami 125 years ago.
Blaine Johnson restores historic properties and has been active in community development in Tacoma for the past 30 years.
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