Cleveland: General Business & Economic News

[KJP]

What's interesting is that the eds-n-meds job growth this year has stagnated. The job growth actually was led by manufacturing.

[cle_guy90]

Another encouraging stat in the report is that for the first time since 2008 employment is over a million.

[AmrapinVA]

I'd be very cautious about these stats ever after the preliminary revision. BLS usually goes back at the end of the year and re-revises the "final" numbers and for Cleveland it's usually revised downward.

 

For example at the end of last year Cleveland had a growth rate of about 1% for the last three months of the year. The BLS revised those numbers in January and growth basically fell to zero. Not saying these numbers aren't real but I'd wait until at least January to see if these figures will be final.

[Dougal]

It sounds like Bernie Moreno is serious about this Blockchain business:

 

http://www.crainscleveland.com/technology/bernie-moreno-rolls-out-details-blockland-cleveland

 

If he's looking for a location how about the old juvenile justice center? It's sized right. It looks like a prep school. It's super-convenient to Tri-C and CSU. It's worth preserving. And you can bet it's available cheap.

 

I guess I'd bet on batteries before blockchain, but it's worth a try.  "Blockchain Cleveland" worth it's own thread?

[Dougal]

The US Department of Energy is holding its Better Building Summit in Cleveland this year - 2300 attendees for most of a week at the convention center.  Only Freshwater Cleveland covered it.

 

http://www.freshwatercleveland.com/features/BetterBuildings082318.aspx

 

 

[tklg]

It sounds like Bernie Moreno is serious about this Blockchain business:

 

http://www.crainscleveland.com/technology/bernie-moreno-rolls-out-details-blockland-cleveland

 

If he's looking for a location how about the old juvenile justice center? It's sized right. It looks like a prep school. It's super-convenient to Tri-C and CSU. It's worth preserving. And you can bet it's available cheap.

 

I guess I'd bet on batteries before blockchain, but it's worth a try.  "Blockchain Cleveland" worth it's own thread?

 

I think the community needs to be incredibly skeptical of these "blockchain" efforts.  Building a place for $150M isn't going to put CLE on the tech map.  There needs to be close watch on how many public funds are allocated to this effort - especially with the number of heavy hitters at the county level involved.

 

If wealthy business leaders want to create marketing engines for their VC associates, they should be using their own funds or VC funds.  Tapping public tax dollars for these efforts is a slippery slope IMO.

[Clefan98]

It sounds like Bernie Moreno is serious about this Blockchain business:

 

http://www.crainscleveland.com/technology/bernie-moreno-rolls-out-details-blockland-cleveland

 

If he's looking for a location how about the old juvenile justice center? It's sized right. It looks like a prep school. It's super-convenient to Tri-C and CSU. It's worth preserving. And you can bet it's available cheap.

 

I guess I'd bet on batteries before blockchain, but it's worth a try.  "Blockchain Cleveland" worth it's own thread?

 

I think the community needs to be incredibly skeptical of these "blockchain" efforts.  Building a place for $150M isn't going to put CLE on the tech map.  There needs to be close watch on how many public funds are allocated to this effort - especially with the number of heavy hitters at the county level involved.

 

If wealthy business leaders want to create marketing engines for their VC associates, they should be using their own funds or VC funds.  Tapping public tax dollars for these efforts is a slippery slope IMO.

 

Did you read the article?

 

The project financing sources, Moreno said, will largely be private, though Pinney said the "stack" could include a variety of cost-saving public financing tools such as tax credits.

 

"We're not looking for a big public ask," Moreno said. "It's a business."

[tklg]

"The project financing sources, Moreno said, will largely be private, though Pinney said the "stack" could include a variety of cost-saving public financing tools such as tax credits."

[YABO713]

"The project financing sources, Moreno said, will largely be private, though Pinney said the "stack" could include a variety of cost-saving public financing tools such as tax credits."

 

Tax credits do not cost anything to the public up front, though.

[327]

"The project financing sources, Moreno said, will largely be private, though Pinney said the "stack" could include a variety of cost-saving public financing tools such as tax credits."

 

Tax credits do not cost anything to the public up front, though.

 

Neither does a bank loan but so what.  I wouldn't commit too many local dollars to speculation.  Some of this sounds an awful lot like the Medical Mart.

[KJP]

What's the occupancy of the Medical Mart?

[tklg]

According to this article, 80% - https://www.cleveland.com/cuyahoga-county/index.ssf/2017/04/global_center_for_health_innovations_vacant_space_is_an_eyesore_report_says.html

 

What are you suggesting?

 

Isn't a better question, what is the average tax payer getting as return on their investment?

 

 

[327]

And some of the occupancy has been given away to juice that very stat.  Occupancy was never the goal of the project-- that aspect was taken for granted and it was supposed to generate jobs.  Much like this is but, like before, we aren't being told quite how.  If we're going to support private businesses with public funds, especially our scarce local funds, I would lean toward proven business models and try to maximize the impact on neighborhoods. 

[KJP]

According to this article, 80% - https://www.cleveland.com/cuyahoga-county/index.ssf/2017/04/global_center_for_health_innovations_vacant_space_is_an_eyesore_report_says.html

 

What are you suggesting?

 

Isn't a better question, what is the average tax payer getting as return on their investment?

 

 

 

Over the 30-year lifetime of a major capital investment? I don't know, but with occupancy high and transformational tenants like BioEnterprise and Plug and Play making a difference in affecting the region's economy, I would say the chances are good that the region can get a decent return on its investment. Give me a shout in another 25 years. Five years of operation is way too soon to declare failure...or success.

[327]

You speak as if Cuyahoga County were trying to land people on Mars.  Not many business investments can fail for multiple consecutive years and demand a generation worth of patience. 

[KJP]

It's not a business investment. It's a public infrastructure investment. And in public infrastructure accounting, of which I am well versed, this is how the real world works. You can let us know how Mars works.

[StapHanger]

Not sure there's any real question that the MedMart has been a failure. The county is perfectly able to limit operating losses by filling it with tenants, but unless those tenants are creating or enjoying some time of synergy in that specific location, with big spillover benefits to the convention center, the project is best viewed as a horribly performing speculative office building. Which is a terrible use of discretionary public money.

[KJP]

Not sure there's any real question that the MedMart has been a failure. The county is perfectly able to limit operating losses by filling it with tenants, but unless those tenants are creating or enjoying some time of synergy in that specific location, with big spillover benefits to the convention center, the project is best viewed as a horribly performing speculative office building. Which is a terrible use of discretionary public money.

 

On that narrow measuring stick, it should be viewed as a marginal success even at this very early date. It's occupancy is equal to that of the rest of the CBD office market. And its tenants are creating synergies as well as usage of the adjoining convention center. Who else is synergizing local business development more than Bioenterprise? And there aren't many organizations on the global scale that are nurturing new startups more effectively than Plug and Play -- which just moved here in the past year. I know we all want immediate results, but causing the world to take notice of Cleveland's potential as a start-up haven isn't going to happen in just five years. The fact that Plug and Play already has is an enormous coup. Will it be deemed a success over the next 25 years? Please let me know.

[tklg]

I'm sorry, but creating a visitor center exhibit for the purpose of classifying as public infrastructure is a stretch.  How many county tax payers are patrons?  I assume (perhaps ignorantly) the annual visitors are minimal.

 

I will also argue, given without much evidence, that the real benefit of the med mart is the companies selling the products and the hospitals buying them.  The new plug n play development is interesting, though still for the benefit for VC firms.  Yes, some jobs may be created, but for a select few.  Is it really fair to tax the county citizens to pay for the luxuries of a few?  Sigh...I suppose they did vote for it.

 

If a few mega startups come through plug n play successfully, and turn the region around, then it could be viewed as a successful regional economic catalyst.  Still not sure how that equates to a return on tax payer dollars though...but I'm not an accountant :D

 

[YABO713]

This probably belongs in the Medical Mart thread, n'est pas?

[KJP]

I'm very disappointed at the narrow definition being applied to infrastructure, at all of this impatience and at the lack of awareness of what is happening inside the Med Mart right now. Just because it's no longer performing its intended mission, doesn't mean it's a failure. Indeed, I believe its current tenant mix now is creating more spinoff benefit than the medical showroom aspect that was originally intended. Yes, it is an incubator. And the region is better for it.

 

But Yabo is probably correct. It doesn't belong here -- except as to what spinoff benefits are occurring at the Med Mart that affect the Cleveland economy.

[StapHanger]

You can only see so many of these dumb economic development get-rich-quick-schemes without realizing the people who've appointed themselves in charge have no idea what they're doing.

 

ADDENDUM: and people shouldn't confuse the tenants in the MedMart with the MedMart itself. BioEnterprise might be great, but it doesn't exist and isn't located in Cleveland as a result of the MedMart. And it has zero synergy with an Ohio State recruiting office.

[KJP]

No one says it did. Med Mart was repurposed less than five years after it opened. One can look at that in either a positive or negative light, and it seems largely depending on one's personality.

[Clefan98]

Sooo what we've learned here is our region should never try anything different due to fear that it might end up like the med mart, which can't even be labeled as an unsuccessful project yet....brilliant logic.

[tklg]

More-so that county citizens need to be more skeptical of projects relying on public funding, especially when using public tax increase to fund the private industry HQ (in med mart case)

 

Innovation is necessary.  So how can CLE start innovating and breading new economic development, without forfeiting years of property taxes or hitting up the county citizens with a tax increase?  I think the answer starts with taking a look at what the community already has and finding ways to utilize existing, under utilized properties in a constructive way. 

 

For example, we don't need a new $125M blockchain incubator when we have tons of vacant space all over the city.  How can we begin repurposing the existing assets in a way that attracts and encourages new economic development?

[KJP]

I don't know if we need a new building for a blockchain incubator. I'm not presumptuous enough to declare, in the absence of a great deal of information, as to what type of structure, power needs, cooling systems, fire code requirements, etc. are needed or not needed at this time. Maybe some people here are experts in the types of server farms and support facilities needed to provide a blockchain incubator service. I would actually like to read some documents by others who have built similar, large-scale blockchain server farms. I know some who have turned their basements into a blockchain server farm and had to work with their electric utility to add more power capacity into their homes. I suspect that building an industrial-scale blockchain server farm would require very large-scale power capacity as well as cooling systems. So it's possible the incubator may be site-restricted. It will be interesting to see what the research eventually shows. My only opinion at this time is that it would be premature to have one.

[327]

Are they proposing to manufacture the servers here?  That might move the needle a bit.  I struggle to find much public benefit in simply hosting server farms, especially if we're going to offer tax credits to get them here.  This is one of those times I'd love to be wrong, I just haven't been sold on the idea.

[X]

Who said anything about server farms?  I didn't see anything about server farms in any of the articles I read.  It seemed more like they were looking to make a space where blockchain companies could have offices/incubator space/coders.  That isn't server farms- which usually go on cheap rural land with cheap electricity.

[327]

I was responding to the post immediately above mine.  If all we need is office space for coding, there is vacancy in Erieview Tower and 55 Public Square.  If we need massive co-working spaces instead, Cleveland offers a stylish and authentic array of old factories.

 

Or... we still have 20% of the Medical Mart to give away.  Synergy!

[StapHanger]

I think KJP is bringing this up because "blockchain" has to this point typically required enormous (though decentralized) computational intensity. This is way out of my depth, but sounds like this is one of the problems that a research push would try to solve.  Here's a summary of the issue: https://www.technologyreview.com/s/609480/bitcoin-uses-massive-amounts-of-energybut-theres-a-plan-to-fix-it/

 

I'm sure this will sound defeatist, but I have very little confidence Cleveland has any special comparative advantage to solve these kinds of problems.

 

[Typos]

[X]

I was responding to the post immediately above mine.  If all we need is office space for coding, there is vacancy in Erieview Tower and 55 Public Square.  If we need massive co-working spaces instead, Cleveland offers a stylish and authentic array of old factories.

 

Or... we still have 20% of the Medical Mart to give away.  Synergy!

 

The problem is that people are responding to the post above, instead of any of the articles posted with actual information.  The sites under consideration are either Tower City, The Union Trust (Huntington) Building, or possibly new construction in Midtown.  Tower City seems to be the frontrunner- so vacant space Downtown.  Synergy!

[Dougal]

One of the biggest spinoffs of the Med Center is HIMSS - they bring thousands of continuing-ed professionals into town every year. Thousands of students = hotel rooms, meals, and entertainment expenditures downtown and a positive view of the city in the students minds.

[MuRrAy HiLL]

^And don't forget about Plug and Play:  https://www.plugandplaytechcenter.com/locations/

[StapHanger]

^Any reason to believe Plug and Play was attracted specifically because of the MedMart building?

 

HIMSS is great. If the MedMart had something like 5 more HIMSS and generated a couple thousand more privately financed hotel rooms for all the out-of-town visitors, and a big bump in retail and restaurants, the MedMart would have lived up to the vision.

[Clefan98]

The Global Center's current occupancy rate is 85%, and is expected to grow even higher.  The 80% figure that was thrown around earlier on here was before Plug&Play, UPS, and Starbucks leased space.  It was also before Au Bon Pain, a bakery and cafe doubled in size. 

 

 

[KJP]

Yeah, it sucks that this is a county-funded office building. Which is next to a county-funded high-rise hotel. Which is down the street from a massively subsidized office tower (the first one built downtown in 22 years), and that doesn't include the courthouse tower that was built by the federal government. That's four large buildings built downtown this century, and only three skyscrapers built since 1991.

 

In a shrinking city, your tax dollars are how big things get built and can stop/reverse the shrinking. The Beacon seems to be using less tax dollars (thanks a parking pedestal that was bought for a clearance price) and the Lumen thanks to a large donation and a project sponsor who wants a return on an investment that doesn't necessarily involve money.

 

These are nonetheless big risks which help dislodge a city from stagnation and create momentum that appears to be picking up speed. No one else would take the risk to stop this city from fading away so we have to do it ourselves, including with our own tax dollars.

[327]

Yeah, it sucks that this is a county-funded office building. Which is next to a county-funded high-rise hotel. Which is down the street from a massively subsidized office tower (the first one built downtown in 22 years), and that doesn't include the courthouse tower that was built by the federal government. That's four large buildings built downtown this century, and only three skyscrapers built since 1991.

 

In a shrinking city, your tax dollars are how big things get built and can stop/reverse the shrinking. The Beacon seems to be using less tax dollars (thanks a parking pedestal that was bought for a clearance price) and the Lumen thanks to a large donation and a project sponsor who wants a return on an investment that doesn't necessarily involve money.

 

These are nonetheless big risks which help dislodge a city from stagnation and create momentum that appears to be picking up speed. No one else would take the risk to stop this city from fading away so we have to do it ourselves, including with our own tax dollars.

 

When you only have one cow, you don't trade it for magic beans.  That Kennedy fella robbed us blind and the officials who helped him do it are in federal prison.  Our tax dollars should not be wasted like that when we've got an entire city to rebuild and thousands of residents suffering while they wait.  We keep blowing fortunes on silver bullet fantasies instead. 

 

If we focus on making this city a better place to live and work, employers and educated workers will start to consider it a more viable location.  That's the only sure way to do it.  But no, we'd rather bribe people to ignore what they see when they make a wrong turn.  "We'll give you our most iconic building for free, Amazon-- I mean blockchain, I mean whoever just please take it."  I'm not against development subsidies, not at all, but they need to make sense.  And you're asking that we refuse to question the bets we're already made.  You say it's too early to evaluate when it's too late.  But it's not too late to evaluate future bets.  Now is the time, before we put the chips down.

[KJP]

When you only have one cow, you don't trade it for magic beans.  That Kennedy fella robbed us blind and the officials who helped him do it are in federal prison.  Our tax dollars should not be wasted like that when we've got an entire city to rebuild and thousands of residents suffering while they wait.  We keep blowing fortunes on silver bullet fantasies instead. 

 

If we focus on making this city a better place to live and work, employers and educated workers will start to consider it a more viable location.  That's the only sure way to do it.  But no, we'd rather bribe people to ignore what they see when they make a wrong turn.  "We'll give you our most iconic building for free, Amazon-- I mean blockchain, I mean whoever just please take it."  I'm not against development subsidies, not at all, but they need to make sense.  And you're asking that we refuse to question the bets we're already made.  You say it's too early to evaluate when it's too late.  But it's not too late to evaluate future bets.  Now is the time, before we put the chips down.

 

Not sure who the one cow is. Not sure I care to know either because it's probably a silly, misapplied metaphor anyway. But hindsight is a beautiful thing. Dwelling on the past is not. The fact is the old convention center's design was obsolete and a marketing angle was found to get the public to support rebuilding it. Good them and, over the long term, good for us too. The structure currently bearing the name "Global Center for blah blah blah" is going to be standing there long after we're both dead. It's use is probably going to change more times in our lifetime, too. So I really don't care what its originally intended purpose was. It's doing something worthwhile now. The rest of your post is generic platitudes. Add some specific proposals to it and you will probably be opposed to your own missive.

[inlovewithCLE]

I’m in complete agreement with KJP. And like the old saying goes “scared money don’t make no money.” In a city like ours where you’re trying to grow, in many cases you need taxpayer dollars to stimulate that. We have a city that needs to grow in an area where the entire region is stagnant. How the hell are you supposed to do that without actually making investments to do so? To me, thinking that you can grow in this environment without public investment THATS the magic bean approach. Any growth in Cleveland that we’ve seen is actually growth that has happened in spite of the state of our region, not because of it or in concert with it. And the progress that we’ve had has been the result of an enormous commitment from the public sector. Most of the things that we love in this city, the things that have attracted people downtown, the things that have given us hope that we’re going in the right direction, almost none of it would’ve happened without taxpayer dollars of some sort. Suck it up buttercup. It is what it is. That’s what happens when you’re trying to grow a city in a stagnant region. You have to do those things so that you can get to a point where you don’t have to anymore. But that doesn’t happen without the initial investment in many cases. It is what it is.

 

As far as the Med Mart is concerned, the criticism of the current state is baffling to me. There’s so much criticism of public officials here (especially Mayor Jackson) and one of the criticisms that I’ve seen is the abject refusal of some public leaders to admit when they’ve made a bad decision or even when a good decision just isn’t working right and reverse course. But in this instance, public officials realized the original course wasn’t working, they changed direction, got the occupancy rate up and that’s a BAD thing?! How? That just sounds like people who want to complain about the project no matter what. To the blockchain development directly, we need to see more before we understand it’s impact on the economy but I know what the potential is. And if this thing can create a bunch of jobs, and it takes taxpayer money to do it, you do it. Period. Point blank. End of story.

 

Everybody talks about rebuilding the neighborhoods and I’m all for that. I agree with that. But if there’s no jobs then you’ll have a bunch of nice new houses with nobody in it. We need jobs. Jobs attract people, and if this can bring jobs, so be it. Let’s stop acting like we can’t walk and chew gum at the same time. It’s not rebuild the neighborhoods vs targeted business investment. The good cities do both.

[StapHanger]

^I don't think anyone is criticizing the current state of the Med Mart. As far as I know, they are doing a fine job making lemonade out of overpriced lemons. And no one has criticized the idea of taxpayer "investments." The pushback is about what we spend that money on. The Med Mart was brought up not to cry over the past but as an object lesson now that some Very Serious Men are hatching another plan that has no prayer of being financed entirely with private dollars, a plan that sounds like a parody IMHO.

[tklg]

Subsidizing private industry with public capital is a failed experiment.  See USSR.

[StapHanger]

^For the record, that's not my view either. I think the historic preservation credits are terrific. If we want something like a Target downtown because we think it will make Downtown more livable for residents and the many car-free households in Central, I'd be fine committing to an ongoing subsidy for 10 years or whatever. I'm just done with these hugely speculative industry-seeding adventures. Picking the right tech niche horse is not an institutional competence of local government, and my confidence in the local business community to do it with the public purse ain't all that high either.

[KJP]

Subsidizing private industry with public capital is a failed experiment.  See USSR.

 

Highways for trucks and buses? Airports and air traffic control systems for commercial aviation? Ports and waterways for commercial shipping?

[X]

The question is if we want to look at the building as a business, or as a piece of infrastructure.

[Cleburger]

Subsidizing private industry with public capital is a failed experiment.  See USSR.

 

There was no private industry in the USSR, so someone has been watching Fox News for their business and economics lessons.

[YABO713]

Subsidizing private industry with public capital is a failed experiment.  See USSR.

 

There was no private industry in the USSR, so someone has been watching Fox News for their business and economics lessons.

 

USSR = friend now. Remember, we did it too, you guys.

 

That's FoxNews now - no economics or business to be found unless Kayleigh McEnany is on to pimp "unemployment is at its lowest ever since careers were invented. This stat is indisputable."

[KJP]

Cleveland in a nutshell.

 

https://www.clevescene.com/scene-and-heard/archives/2018/08/27/clevelands-leaders-are-old-and-not-smart-and-other-weaknesses-of-our-civic-culture

 

[StapHanger]

^-Tony Madalone

[YABO713]

Pinney should run. He's independently successful, has access to business and thought leaders, and isn't scared to call out inefficiencies, even at the highest levels

[TBideon]

Graham Veysey should run. One of the nicest and trustworthy people I've ever had the pleasure of knowing, and he's doing a ton for Ohio City too.