A little more than six years ago, the Bristol Herald Courier published my letter expressing why I believed the multimillion-dollar subsidy for Cabela’s to be a huge mistake. From undermining local businesses to concerns that we were already overbuilt on retail, I argued that this project was a poor use of public money. And that the resulting “development” would be precarious at best. My letter made some Bristol leaders quite angry but otherwise had no impact.
Cabela’s has now closed, after just a bit more than four years of operations. More than 100 people were laid off (I’m skeptical about Bass Pro’s pledge to hire all of them); we have yet another large, empty shell building; there’s even less chance now that The Falls will attract significant new businesses; and meanwhile, other franchise companies from Best Buy to Outback are leaving county locations to set up shop at The Pinnacle.
A crystal ball wasn’t needed to predict this course of events. A simple look at economic trends and the recent past would have done the trick.
Nevertheless, here we are. What should we learn from this fiasco, and more to the point, what should our strategy for economic prosperity be going forward? I’ll suggest five priorities, not only for Bristol, but for Washington County and neighboring communities.
First, declare a complete moratorium on subsidies for chain stores and big boxes of any kind. Following the deal with Cabela’s, Bristol enticed Lowe’s to close its Exit 7 store and build a new one at Exit 5 at a total cost of nearly $12 million. More recently, the city agreed to subsidize not one, but two Pizza Huts, committing another $700,000 of public money. These chains offer low-paying jobs and little contribution to the local economy, but they do compete with established local businesses. We must end this practice.
Second, be very selective about subsidizing any outside corporation, especially where locally owned ones exist or could be fostered. A 2010 study in the Harvard Business Review found that “regional economic growth is highly correlated with the presence of many small, entrepreneurial employers — not a few big ones.” Nevertheless, in his book, “The Local Economy Solution,” economist Michael Shuman examined 45 different economic development programs in 15 different, predominantly rural states, and found that 80% of those programs gave the majority of their funds to non-local businesses.
Third, do a thorough inventory of existing local businesses, particularly manufacturers, with the goal of identifying what they need to survive and, hopefully, expand and add jobs. Twenty years ago, a region of rural Minnesota made this the centerpiece of their economic strategy, and the results were extraordinary: a doubling of jobs in those local companies, from 4,500 to over 10,000, an overall increase of 30,000 jobs in the region and an increase in average wages of nearly 20%.
Fourth, build in and build up. One of the justifications I heard for The Falls was that Bristol, Virginia simply doesn’t have available space within its boundaries for new development. That may be true for very large projects with a multi-acre footprint, but a quick look at Loopnet (a commercial real estate site) shows a couple dozen available properties and buildings, some with over 100,000 square feet of space. City officials should be working to upgrade and market those properties, as well as promoting multi-story housing and business incubation space, as they’ve done on State Street.
And finally, let’s shift the focus of economic development fundamentally, from “bringing in jobs,” usually with public subsidies, to building an economy based on what we have and what we need. (While some of this shift has taken place, it still gets very little real support in terms of public dollars.) We need good paying jobs, of course, but we also need much more energy-efficient homes and buildings; we need renewable energy generation on top of those buildings and elsewhere; we need more preventive, health-focused health care; our farmers need the equipment and facilities to grow and process healthy food, hemp and other products; and we need to be able to recycle items from our waste stream and turn them into useful products.
All of these needs represent real and growing business opportunities. When we refocus our economic development on meeting real needs, we get both jobs and better, stronger communities. The collapse of the Cabela’s project provides an opportunity to rethink our assumptions and reorient public resources toward building prosperous economies and resilient communities.