Plattsburgh Shock Therapy: Urban Renewal Like It's 1955 (Part 1)

This is part 1 of a 3 part series: Part 1 / Part 2 / Part 3

"Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable."   

-Milton Friedman

"Now we've been talking about this as a city since Frank Arvay was trying to build a mall downtown in 1978. The vision just kept getting more and more detailed. And we're just really ready to take the next step.  Now it's a very big deal but the money that’s out there in this competition really is to revitalize downtowns and that's exactly what we've been pointed towards for decades and it just seems that this is now the time that we may have the means to do that."  


Mayor Jim Calnon



A stunning thing happened in Poland in 1989. Lech Walesa's progressive political party, Solidarity, which fought for increased autonomy from the authoritarian Soviet Union, collective bargaining rights, and to transform corrupt and inefficient state-owned industries into worker cooperatives, came to power in a landslide victory at the polls after years of persecution. But once in power and forced to deal with a full fledged fiscal crisis which emerged at around the same time, Solidarity quickly reversed course on practically everything it ever fought for in exchange for debt relief and IMF funding. Solidarity privatized huge swaths of the economy and worker ownership plans were cast aside; the party cut social spending and even resorted to persecution itself to achieve its new, anti-democratic agenda.

This is a classic example of the "shock doctrine" at work in Naomi Klein's book of the same name. The book examines several examples of how crony capitalists are able to realize their "policy trinity" of privatizing public wealth, providing tax breaks and lax regulations to corporations, and cutting social spending in democratic societies by using crises--real or perceived--as cover. In democracies where these corporatist policies are inherently harmful to the 99%, crony capitalists must rely on states of emergency to create "democracy-free zones—gaps in politics as usual when the need for consent and consensus do not seem to apply" to realize their agenda.

If this sounds reminiscent of what is happening in Plattsburgh, that's because the adage is true--history repeats itself, first as tragedy, second as farce. We've already seen parts of the shock doctrine at work when the mayor, invoking a fiscal crisis, quickly cast the tie-breaking vote to eliminate four city departments. To do so, the administration even rewrote the city charter with very little public discussion and without careful consideration of the effect these substantial changes will have on the provision of services. We've witnessed the administration fail to follow through on its promise to litigate suits involving the reduction of property tax assessments for large property owners for the same reason as the prior administration: When in crisis, it is "in the best interests of the city to avoid litigation costs and settle." And of course, we've seen the mayor use a crisis to fabricate a public mandate to solve the our fiscal problems by any means necessary, even by dissolving the city. But the Plattsburgh shock doctrine is most fully at work in the city and state's emerging plans to redevelop downtown.

2015-2016 


Even before Plattsburgh was awarded a $10M Downtown Revitalization Initiative (DRI) grant in 2016, the city and state were eager to convert the city's municipal parking lot, which is a little over three acres and in the heart of downtown, into a predominantly private development. Both the city and the state invested taxpayer dollars into studying how best to privatize the public lot before consulting the public. Furthermore, preliminary plans for a massive (for Plattsburgh) mixed-use building including housing, offices, and retail were distributed to the press and submitted in the DRI application before the public had a chance to comment1.




At the time I argued that circulating these plans to the press before engaging the public limited and shaped the public's perspective on what's possible and not possible for this piece of city property, but the public turned out to be unimpressed with the proposal regardless. After the state announced that Plattsburgh won the DRI award, WPTZ conducted a poll which revealed that the public was overwhelmingly in favor spending DRI funds to develop the city's lakefront instead of on a big mixed-use building in the city center. Although the poll results are no longer available on the web, then mayoral candidate Colin Read referenced it in this campaign press conference in August 2016 (at 3:03). Read seized upon the project's unpopularity with the public and actively campaigned against it. For example, in a Press Republican article, Read stated,
"We should be building our downtown around people rather than the 'build it and they will come' mentality that we might have used in urban economics 50 years ago."
In this campaign video, Read elaborated:
"..if you look at the proposed area for where we’d like to concentrate that ten million dollars [the Durkee Street lot], and you walk one minute in each direction, you’ll find—I’ve counted—about twenty four empty buildings or storefronts and no developer is going to want to invest in that area until this glut of unused real estate is already being used. So whatever we do down there..the first thing we have to do is to revitalize the other areas of downtown, to make it an attractive core so a developer can argue to put more footage in place..."
I couldn't agree more with Read's assessment of the situation here: Plattsburgh doesn't have a real estate supply problem, it has a real estate demand problem. Adding to the supply--even if it includes around four dozen units of housing as proposed--and expecting the development to catalyze downtown revitalization is to imbue the project with magical powers. As Jane Jacobs declared about a similar supply-side proposal in New York in The Death and Life of Great American Cities, the development "will amount to only 1 percent of the number of persons in the daytime population. What Herculean economic power this little band is to exert. What amazing feats of hedonism must it accomplish to support the development of shopping facilities, restaurants, places of entertainment." 

In other words, trickle down economics applied to cities doesn't work, just as trickle down economics applied to national economies doesn't work. Read echoed this point when he stated“this city is only as good as its weakest elements. If our foundations are crumbling..it doesn’t make an awful lot of sense to build a mansion on it.” The point was lost on local economic developers and Mayor Calnon; they were completely spellbound by the illusion that a few hundred promised new employees coming to the area thanks to an obscene $125M taxpayer investment were all going to descend upon the city center development to "live, work, and play" and start the work of reinvigorating our city from this base of operations; to begin, they'd just need an additional $10M of taxpayer dollars in the form of the DRI to build the base. 

We can take the anti-trickle down argument even further. In a city with a 23% poverty rate, where 57% of the population is considered financially distressed or ALICE, and where income inequality is so pronounced that it is as bad as the 21st most unequal country on the planet, investing taxpayer dollars into developing a mixed-use building that will predominantly benefit a large developer and a small well-to-do cadre of future residents that officials hope to attract to the city is as egregious as Marie Antoinette's proclamation "let them eat cake." Actually, it's worse; at least then the city's existing population would have the benefit of eating cake. When it comes to the city center project, however, much of Plattsburgh's population wouldn't be able to afford to live in its proposed upscale housing or have the financial wherewithal to meaningfully support its additional retail. This is of course a major reason why downtown's retail is predominantly second-hand stores and why Read counted 24 vacant storefronts. In fact, given the limited purchasing power of city residents and people throughout the region, the proposal to add up to 47,000 square feet of retail to the mix downtown--if it succeeds at all in an economy full of overbuilt retail--runs the serious risk of siphoning off the limited sales currently garnered by downtown's existing small businesses; it would thereby "suck all of the lifeblood out of the downtown and concentrate it in one location" as Read explained (see 49:15). 

The project poses other risks for small businesses. Since constructing new real estate is expensive, developers must charge high rents that are often cost prohibitive for locally owned enterprises. As local developer Neil Fesette stated in an email to Mayor Read, "'ma and pa' tenants have limited rent pay ability which impacts a developer's ability to do deals profitably2." In fact, banks and lenders tend to provide developers with better financing terms if they have leases signed with national and brand-name tenants.  This means there's a good chance any new city center retail tenants--if any can be attracted downtown at all--will be national chains. Therefore, not only is there a good chance that a large quantity of new retail will cannibalize the sales of existing small businesses, the sales may very well be cannibalized by national chains, the type of business that cannibalized downtown decades ago, contributing to its stagnation and present need for "revitalization".

As the DRI planning process got underway, it was clear that the public shared many of these concerns and remained unenthusiastic about the city center project. At a DRI planning meeting in December 2016, the public was given its only opportunity during the planning process to vote on the projects it most wanted to see implemented using DRI funding. The Durkee Street city center mixed-use project came in 26th place out of 30 possible ideas3. As the year drew to a close, it appeared that the proposal to subject Plattsburgh to 1950's-style urban renewal was finally dead. Although federal politics took a turn for the worse, at least locally we elected a mayor that respected public input and understood the dangers of forcing through the city center project without it.  After all, our newly elected mayor had just said:
The bigger issue is there just hasn’t been enough public input in the city’s proposal.  And I think that’s really an important ingredient because if we want all this to succeed we need buy in."
Little did we know that 2017 would be the year that the shock doctrine came to town.

Click here to read part 2 of Plattsburgh Shock Therapy: Urban Renewal Like It's 1955










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Comments

  1. Over the years I've seen bad decisions made by the city in trying to revitalize downtown. Widen the sidewalks and convert Margaret Street to one way traffic. Install antique street lights emiting a harsh yellow glare.

    As for paid parking the city left parking meters in place after the first mall drew people away. Lots of empty spots back then. The choice: free parking at the mall with a good selection of shops or paid parking with a number of empty storefronts.

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    1. I hope to shed light on some of the more recent mishaps that resulted from this kind of Robert Moses planning in part 2, but there is a lot I still need to learn about the city and how it developed.

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