Posted: June 26, 2020 by
Quality of Life and Economic Prosperity Will Take a Long Time to Recover
A company that has been in Minneapolis for 80 years is leaving that city. Businesses in Seattle are moving to Idaho and Arizona or at least out of the area to other parts of Washington State.
For many years now, people and businesses have been leaving California in droves. This has been in large part due to government policies, such as onerous tax burdens. The Nevada real estate market has been a testament to this exodus. Today the Phoenix, Arizona real estate market is booming as is the Boise market.
Why? Yes government policies again but not the ones to do with taxes. This time it is the leadership of elected officials that has come into question. The increase of homelessness on the streets has plagued businesses and some say they have had enough.
The lack of leadership, as vocalized by Seattle business owners recently, has to do with the violent unrest America has seen in its cities in the last few weeks. A billion-dollar investment firm says they will move to Phoenix because they have no protection since the mayor allowed a portion of downtown to be taken over by anarchists. The CEO says Phoenix will offer a lower cost of living and a better quality of life.
Insurance payouts for damaged and destroyed businesses are rising dramatically.
The Minnesota Star Tribune reports that “More than 1,500 buildings across the Twin Cities have been vandalized, looted or had doors and windows smashed. Some have been reduced to rubble, and dozens have been destroyed completely by fire. Others have reported extensive water damage or severe fire damage.”
This destruction of businesses has effects that can last for years.
How does economic development factor in during this time of violence?
Some business owners who have spent years, decades and lifetimes building their businesses and employing others will not recover. That’s the sad truth.
Other businesses will need help to recover. What that help will look like is a question economic developers better start trying to figure out right now.
As I mentioned, many are first making the decision to move to states with perceived, better leadership and policies. The states who are recipients of the businesses and who have robust economic development will assist these companies as they assist all companies who move to their communities.
Many states may reach out to attract companies to their states by advertising differing policies. Is that OK? Yes, because this is not a natural disaster that could happen to anyone. This migration is due to policies enacted by elected officials who must take responsibility for said policies. Unfortunately the citizens they are supposed to serve suffer from the policies and the results.
These policy consequences such as loss of businesses, loss of jobs, loss of downtowns, loss of safety and loss of quality of life are real life disasters, that many would argue today, are man-made.
Those businesses that will try to recover, but can’t move, will have a huge up-hill climb. Businesses make take years to recover fully if they ever do. Will they have trouble getting good employees or will customers come back if the neighborhood isn’t safe? Will insurance premiums go up in certain areas that make it cost-prohibitive to run a business in those areas or hire as many people or have as big a location? Bottom line – money will be needed to help a lot of people. Where is that coming from?
Will elected officials realize policy mistakes and try to correct them or will others be elected in their place?
Economic developers in the worst of the destroyed cities will also have an up-hill climb. A huge part of economic development is about business retention and expansion, neighborhood development, real estate development and reuse. These strategies will be much harder to implement in the riot torn cities. Marketing and attraction in these areas is going to be a tough sell.
Now more than ever, real people are depending on the people who are supposed to be public servants to manage their cities for the betterment of all concerned. Economic developers will need to be even more creative, form new partnerships and work harder in the areas affected by the violent riots.