The path cities are on isn’t financially sustainable. Municipal leaders often are increasingly dependent on borrowing for multimillion-dollar commercial endeavors, adding to the debt service rather than refocusing on existing assets and depending on taxpayers to bail them out.
“You can’t lose money on residential and make it up on commercial development,” said Charles Marohn, executive director of Strong Towns, a Minnesota-based nonprofit group. Marohn, who has authored several books, was invited to speak before a large audience Wednesday at Lycoming College in a “Curbside Chat,” sponsored by the Larson Design Group, architects, engineers and surveyors.
He warned the leaders the taxpayers, who already are stressed by mortgages, rents, college tuitions for their chil-
dren and higher costs overall, must be considered.
He said city leadership mustn’t add to debt service or continue to depend on investing in million-dollar commercial endeavors but rather look toward innovative ways to reinvest in existing buildings, especially those downtown within walking distances of colleges, universities and places where people gather.
The highest returns on investment sometimes come from “nickel and dime” ideas and neighborhood improvement strategies, he said.
Cannot repeat the past
What worked after World War II, a post-war economy that spread wealth based on a populace that made decisions using a savings-and-investments strategy, has become an economy dependent on increasing its debt service to survive.
“We can’t continue to lose money on the residential end and make it up on commercial development,” he reiterated. He described such practice as “an illusion of wealth,” one leading many local municipal governments into bankruptcy, such as Detroit.
“We are so affluent and have such an illusion of wealth that it has put us out of touch with our ancestors,” he said. “They understood because they had to make things work over a long period of time.”
He cautioned on continuing to depend on a “build it and they will come” mentality, one he considered to be for cities facing a desperation phase.
He described Williamsport as having a great downtown, but then paused before saying it had too many “one-way streets.”
He put up a photograph of a downtown street in Brainerd, Minn., a century ago and the same modern-day street in the city two hours north of Minneapolis.
It was shocking to see the vibrancy of the early 20th century compared to the same street that consists of parking lots, blight and vacant or under-used buildings.
“Get out of the office,” he said to the stakeholders in the audience.
“The problem is not a lack of growth,” he added. “It is a lack of financial productivity. We need to talk, roll up our sleeves, try new things – in order to have the greatest chance of being successful communities.”