Friday, August 27, 2010

Main Street USA

There is a lot of talk about Main Street USA these days. President Obama says he wants to help Main Street USA through his efforts to recover the American economy and Main Streets all across the USA are challenged like never before.

The struggles faced by Main Street USA are not new. Main Street businesses feel like they are under siege and the attacks come from many fronts. Certainly, federal issues such as tax policies, free trade agreements, minimum wage, banking regulations, health care, energy policies have had their impact; some would say mostly negative. But, there are also a host of free market changes that have impacted Main Street USA from Wal Mart and the big-box revolution to suburbia and the proliferation of shopping malls and strip centers. A less loyal set of consumers coupled with a high degree of mobility as well as the phenomenal growth in internet trade have also contributed to Main Street woes. Add to all that what the pundits now call the Great Recession and it is not hard to see why Main Street USA is suffering.

On the other hand, there are a number of things that bode well for Main Street USA. Entrepreneurship is still alive and well, although some would say many new policies coming out of Washington, DC, these days are driving entrepreneurs out of the marketplace. Nonetheless, high unemployment rates always cause a number of people to pursue that business dream they have always had. And, while high vacancy rates on Main Streets don’t do much for business right now, they do represent opportunity and more affordable places to locate new businesses.

Fortunately for Main Street USA, Americans are a nostalgic lot and they are longing for the hometown feel that takes them back to a more idyllic time. We love our history and nothing conveys that like a thriving historic downtown area. The United States has a robust federal policy to preserve our history in the National Historic Preservation Act. In the United States, we use the free market system to preserve history by granting very generous tax credits to real estate owners who preserve and redevelop historic commercial properties to rigorous historic standards. Called “adaptive reuse,” downtowns across the USA are seeing historic buildings converted to indoor shopping malls, micro-breweries, restaurants, retail outlets, office space, and even apartment complexes.

In conjunction with historic preservation, there is a national Main Street Program that seeks to facilitate the preservation and re-invigoration of historic downtown areas across the country. In addition to physical improvements to store fronts and thematic preservation of history, the Main Street Program gives downtown associations and chambers of commerce the tools to create a thriving retail atmosphere. Store hours are adjusted to meet the needs of today’s two-income families, pedestrian friendly streetscapes enhance the visitor experience, events make downtown more than a shopping destination, return policies are changed to match the big-box competition, the business mix has changed so as to not compete directly with the chain-discount stores, and excellence in personal service and product expertise helps downtown compete with the internet.

What makes Main Street USA work is not a federal stimulus program, not another pork-barrel project brought to you by your local Congressperson, and not more government interference in the free enterprise economy. No, what makes Main Street USA work is less government, streamlined regulations, lower taxes, especially the capital gains tax rate. And, Main Street needs a National Historic Preservation program that recognizes the requirements of today’s developers and new businesses and more cooperation that allows historic preservation to be profitable. Most of all, what Main Street USA needs is government at all levels to see that what is good for business is good for all, that government/private-sector cooperation is what causes the economic tide to come in and float all the ships, big and small, a little higher.

Farmville, Virginia, is a text book example of how Main Street USA and the United States economy will grow strong once again. It will not be through government programs, but by Americans pulling ourselves up by the boot straps. There has been a lot of talk in Farmville in recent months about the high vacancy rates, declining condition of the store fronts, and lack of downtown visitors.

At first the discussion seemed to focus on the Town of Farmville and their parking meter policies. This local issue is a lot like a microcosm of our national economy. While it is true that the parking policies are not the cause of downtown Farmville’s woes, the parking meters are not helping the historic area recover. At the national level, while President Obama did not cause the Great Recession, his proposed policies such as nationalized health care, carbon emissions cap and trade, and higher taxes on the Americans who invest in Main Street USA have severely impaired the ability of America to pull itself out of this economic slump.

In Farmville, the Town Council immediately took to heart the notion that their parking policies may be hurting the historic downtown, but they were not willing to shoulder the whole burden. They wisely engaged the downtown business owners, the chamber of commerce, the two local college communities, and other interested parties. The Town Council appointed two council members to be part of a newly formed, non-governmental committee to address the revitalization of downtown. At a recent inaugural meeting of the new downtown group, ideas were thrown out faster than lightning bolts in a late summer thunderstorm. The excitement was contagious and the enthusiasm to undertake a thorough and comprehensive assessment of all of the possible actions has caused some long-time downtown observers to conclude that this effort will be successful.

In my varied career as a bank loan officer, a congressional staffer, and the director of a chamber of commerce, I have seen time and time again what can happen when a vibrant, highly motivated, unfettered-by-government group can do if the rest of us just step back and get out of the way.

For much of my life, I had a plaque that my mother gave me that read, “Lead, Follow, or Get Out of the Way!” I actually resented that plaque for years because I thought my mother was trying to push me to lead; something I was not ready for or inclined to do at the time. Then it hit me like an epiphany. There are three elements to good leadership—being a good leader, being a good follower, and knowing when to get out of the way. Government, at all levels, can learn a lot and do more good for the country if they would sometimes just get out of the way.

Sunday, August 15, 2010

National Parks "For Sale"

The headline on the British news website,, reads “US national park faces sale.” The story talks about school section land the state of Wyoming owns within the boundaries of Grand Teton National Park and the Wyoming Governor’s threat to sell the land to the highest bidder if the federal government will not swap the land for a minerals estate of equal value or other compensation. Headlines like this are used by some organizations to suggest that our national parks are threatened and not adequately protected or funded.

A little Grant Teton history is warranted here. According to the National Park Service history of the park, “The birth of present-day Grand Teton National Park involved controversy and a struggle that lasted several decades. Animosity toward expanding governmental control and a perceived loss of individual freedoms fueled anti-park sentiments in Jackson Hole that nearly derailed establishment of the park.” A large portion of Grand Teton was carved out of private land that had been bought up by John D. Rockefeller and later donated to the National Park Service. Unlike nearby Yellowstone National Park, the nation’s first, that was 100% federal land when it was established in 1872, Grand Teton to this day continues to have substantial tracts of privately owned land within the park boundaries.

The tension between private land owners and the park system and the animosity generated by carving a park out of privately-held lands are very similar to what occurred in Virginia during the establishment of Shenandoah National Park and in North Carolina and Tennessee when Great Smokey National Park was established.

Back to the fire sale in Grand Teton, because the land in Jackson Hole that became Grand Teton National Park was private property, there are also state school lands in the park that were set aside when Wyoming was granted statehood in 1890. Under the Wyoming Constitution the state is required to manage those school lands to maximize return to the school trust for education in Wyoming.

In Grand Teton, Wyoming owns two full sections (a section is one mile square or 640 acres) of land plus one smaller 85 acre parcel. With land values in Jackson Hole at about $200,000 per acre, it is easy to see why Wyoming may be tempted to sell their land. Especially when you consider that the state currently receives about $3,000 per year in grazing lease revenue on land that may be worth more than $250 million.

Back in 2002, Congress passed a law directing the National Park Service and the Bureau of Land Management to work out an exchange with Wyoming for the state lands inside the park. At the time, Wyoming wanted undeveloped minerals of equal value to the land, but valuation of undeveloped minerals is challenging and other matters of law caused that deal to bog down. Moreover, nobody really wants to have the state land sold into private ownership and that includes the residents of Wyoming who have long since realized that, despite a controversial beginning, Grand Teton is an economic engine that drives millions of dollars into Wyoming’s economy every year in the form of tourism. There is also the recognition in Wyoming that even though $250 million is not chump change, it would be quickly absorbed into the $1.4 billion per year school budget and $1.4 billion per year capital construction for schools.

So the questions are: Will Wyoming really sell their land inside Grand Teton National Park? Is it worth $250 million to a bankrupt federal treasury to make sure Wyoming does not sell the land?

In my opinion, the answer to the first question is “No.” I believe Wyoming’s governor is playing high stakes poker and attempting to leverage the national and international appeal of Grand Teton National Park to extract money from the feds. To answer the second question, let’s first take a look at the National Park Service annual budget and what they should be doing with the funds they are appropriated.

As a general principle the National Park Service has enjoyed increasing budgets when other agencies have been cut. They spend more dollars per acre of land managed than any other federal land management agency. There is the perennial complaint that there is a maintenance backlog that ranges from $4-6 billion. Ironically, no matter how much more money Congress gives the park service, there seems to be no end to the backlog. You may have heard recent radio advertisements featuring actor Sam Waterston decrying the failure of the federal government to address the maintenance backlog and telling us that your national parks are falling into complete disrepair.

A scan of annual NPS budgets over the last 10 years is illustrative. In 2000, the year George W. Bush was elected President, the NPS budget was about $2.1 billion. When Bush left office in 2009, the NPS budget was $2.9 billion. On top of those annual appropriations, over the years the Bush Administration spent more than $4 billion in additional money on the maintenance backlog. Soon after Barack Obama took office, the so-called stimulus bill allocated an additional $750 million to the National Park Service presumably to address the backlog. How many of you have seen a nearly 50% increase in your income over the last decade and were given about two years’ worth of salary to improve your home and property to boot? Most likely none of you saw that kind of boost in your personal budget, but nonetheless, I would wager that your home has been maintained and is in as good or better condition than when you bought it.

So why can’t the National Park Service maintain our national parks on an ever increasing appropriation? First and foremost, maintenance is not very exciting, but acquiring land and building new facilities is the stuff that pads a park superintendent’s resume. Secondly, Congress keeps adding new parks to the system. Not only do new parks rarely come with new money, the added units often have ready-made maintenance backlogs as well as future commitments for construction and land acquisition.

We are witness to this latter phenomena right here in Southside Virginia. Congressman Perriello has asked the National Park Service to study the feasibility of adding the National D-Day Memorial in Bedford to the national park system. I have seen dozens of these kinds of studies by the park service during my tenure at the Department of the Interior, and in almost every instance, the NPS will present a wonderful case for why the particular site is of national significance and should be added to the list of national parks. Buried in the conclusion of the study, you will find small and weak argument about why the system cannot afford the new unit. Few Congressmen can resist the lure and glory of adding a new park to their district and they usually ignore the fact that the system cannot afford to take on the burden of new units. But, for the good of the whole national park system, somebody in Congress should stand up and say enough.

And by the way, until the Bush Administration made the NPS develop a system that established and validated an inventory of their assets and each asset’s condition, nobody could ever give an accurate estimate of any maintenance backlog. But that matters little to the groups, like the National Parks Conservation Association who use celebrities like Sam Waterston to bemoan the degradation of our parks, because they are more interested in whipping up a crisis and selling memberships than actually doing anything that would benefit or conserve the national park system.

Be careful which environmental groups you support. Do your homework. Research the fact base around each issue and behind each headline. And most of all, understand the motives and tactics of the group to whom you are giving your hard-earned money. Some organizations are actually doing conservation work on the ground and others are just doing it to you.