Grow op

By Gene Miller, April 2013

The City of Victoria is robbing the future to pay for today.

I want to enlist your help in fleshing out an idea for the City of Victoria and in designing a strategy for its implementation. I’m proposing that together we generate some innovative thinking directed at our downtown and, by extension, the city’s problematic economy. In doing this we’ll not only open new ground in citizen innovation and city/citizen collaboration, but assist the city we love—a place that has clearly found itself overwhelmed and temporarily out of ideas. We can do this on the pages of Focus (send in your thoughts as letters or emails); or around a table in a coffee shop (call or write me); maybe it wants to be a small conference or workshop. Possibly all. 

As framing, let me quickly invoke Paul Krugman, economist and New York Times columnist, who in the context of the current US recession debate recalls the “utter impenetrability of the elite [Bush-era] pro-Iraq-war consensus”:

Now, as then, this consensus has seemed impenetrable to counterarguments, and its leaders regarded as credible even though they’ve been wrong about everything, while critics of the consensus are regarded as foolish hippies even though all their predictions — about interest rates, about inflation, about the dire effects of austerity — have come true.

My local take-away from Krugman is this: the current mis-ordering of importances by our political leadership and civic management is driving this city to its knees financially. Believe me: right at the very borders of calamity, these folks are perpetuating a ruinous and fatal approach to the city’s economic strategy.

Here in Victoria, Council and key staff have for months been wrestling with a budget so tight that the effort to boil a mere $1.6 million out of it (less than 1 percent) has produced major brain damage in city hall and bizarre, funny-if-they-weren’t-so-tragic proposals like switching from annuals to perennials in some of the city’s flower beds. And all of this Herculean effort is in aid of tabling a budget for the following three years not with a zero increase, but one that will continue to increase by 3.25 percent a year—an 11 percent cumulative jump, presumably with further rises likely beyond that.

No portrait of Victoria’s present political and administrative leadership will be complete or accurate without making this simple fact clear: the city is robbing the future to pay for today. The blue bridge—a subject exhaustively discussed on the pages of Focus Magazine—is a lucid illustration of stealing from the future. In the city’s deal with the devil to keep the replacement bridge ‘within budget,’ the structure’s engineering standards have been relaxed, shaving not just amenities but two-and-a-half decades (25 percent) off its functional 100-year life—a clear case of the city essentially crapping in tomorrowland. It’s not just the bridge, it’s a pattern: the city is under-allocating incoming revenue to its capital account (the money needed to repair, upgrade, replace or add infrastructure), in favour of its operating account (what it spends today). As an example of city duress, the city recently required Chard Developments (and others, I imagine) to build wastewater holding tanks into its recent condo project at 834 Johnson Street to facilitate overnight, lower-volume discharge: the sewers are so old they lack the capacity to handle a growing downtown. 

None of this is sustainable and it’s going to get us into even more trouble down the road.

Ask yourself: How do these things happen, how did it come to this? The answer is that, as with personal behaviour, institutional behaviour follows the laws of circumstance and consequences—essentially, an ecological principle. Smoke for thirty years, you get cancer or lung disease. Leach the soil of nutrients season after season, eventually the crops fail. Spew a lot of carbon into the atmosphere for a half-century, the glaciers melt and the global weather roils. 

In this vein, the city’s current budget dilemma didn’t come out of nowhere. It has been years in the making and is best understood as a long-brewing, slowly evolving set of political and managerial miscalculations and missteps moving us toward the inevitability of consequences. Some of those consequences are here now; others are quickly approaching. The miscalculations span successive mayoral leaderships, beginning somewhere in the political dry gulch of the post-Pollen years, and speak to the ever-expanding fuddle culture at the city. The current challenge of boiling $1.6 million or so out of the budget? Believe me, just a symptom and not the disease.

Honestly, if you really imagine the solution to Victoria’s economic problems lies in switching from annuals to perennials in city flower beds, automating payment at the city’s five parkades, freezing a few pay packages here and there, and eliminating free egg salad sandwiches at committee meetings, you should stop reading this piece now. 

Consider leaky boat syndrome: Water’s coming in through a dozen holes! You can’t bail fast enough! The boat is getting heavier and less maneuverable! The tide’s pushing you away from the shore! Big, swamping waves are approaching! Oh-oh! As things deteriorate, all options are compromised. 

The city is trying desperately to reduce the budget (essentially, a 4.25 percent increase) by a mere 1 percent and clearly not having an easy time of it. But much bigger rollers are just offshore, and the city is under-equipped for an economic event-horizon likely to feature: 

• a regional sewage treatment levy imposed on taxpayers; 

• the growing drag of three-quarter-billion dollars in unfunded city infrastructure projects including underground systems, streets, parks, facilities and community amenities;

• potential cost overruns (in any event) on that embarrassment of a blue bridge replacement, coupled to the prospect of a legal challenge of the city for betraying the terms of the spending referendum approved by voters; 

• continued softening of the real estate market with drops in assessments and the need for compensatory mill rate increases (a bigger bite into home and commercial property owner equity value); 

• relentless commercial predation from the ‘burbs and accelerated erosion of downtown retail and service/office assets, prompting all kinds of bad consequences;

• financial challenges to the sustainability/viability of various city recreational and cultural assets; 

• an emptying piggy bank, hampering the city’s ability to mount new initiatives, exploit emergent opportunities, respond to rainy-day conditions, or compete aggressively in the face of regional economic challenges in the far-from-rosy near-future. 

These prospects point to an enfeebled city less and less able to invest in its own well-being. Our well-being.

Here’s something that happened in the last two years that brings a fine point to understanding the city’s dilemma. Under its new land use policies, the city telegraphed that it was prepared to allow densities of up to 6:1 (total building square footage six times the site square footage) in certain areas in and around the core. With guidance from an out-of-town consultant who demonstrated little intuitive understanding of either the competitive regional economic condition or local business culture, the city came up with a bonus density policy that said to developers: “Okay, you can build up to 6:1, but we’re going to charge you a ‘density bonus’ for every square foot over 3:1.” In other words: “No problem, we acknowledge that you can build at densities up to 6:1, but we’re going to punish you with a significant financial disincentive if you try.” As business messaging, this is perverse and anti-market, contradictory and un-partnerlike. It builds neither trust nor confidence within industry. It doesn’t say to industry: “Let’s build this city together!”

Why this push-pull insanity? It’s three-pronged. The simple answer is that the city desperately needs the dough. Driven by that need, it literally cannot afford the costs of acting more entrepreneurially. Next answer, there is an extremely murky social and political mindset in Victoria—sniffy, contemptuous and distrusting of business and enterprise, neurasthenic and carry-over colonial, second-rate in its business skills and energies. Final answer: The city doesn’t see itself as a partner in or facilitator of successful business outcomes, just as an administrator and regulator.

And here, I believe, is where the invitation to crowd-source needs to come in. As a citizen and taxpayer, I don’t like seeing my city and my downtown at risk. And as an investor in real estate—essentially, my home—I don’t like chilly reminders that no law prevents Victoria real estate values from tumbling if this place loses its lustre. Addicted to the hoped- (and prayed-) for constancy of provincial civil service presence in and around downtown (a crapshoot), and the sugar-high of seasonal tourism, Victoria coupon-clips as if these conditions were ordained, or written in fire. As downtown retail vacancy and the city’s budget challenges demonstrate, they’re not.

I’ve noted in a recent column (“Heart Warming,” January 2013), that if all the central area condos and rental units under construction or somewhere in the pipeline come on to the market in the coming years, it will add to the central area about 2,000 additional residential units trolling for roughly three thousand occupants. Take my word for it: Three thousand additional residents living and shopping and, with luck and effort, working in and near downtown would profoundly improve the economy and the street tone of the city.

However, downtown commercial rental vacancies are gradually rising, nudging 8 percent. Suburban retail is eating downtown’s lunch; and under current circumstances and trends, a lot more downtown retail is at risk of falling below the threshold of business viability—with all due respect to comic book shops, tattoo joints and specialty tea stores, which are great but not exactly cornerstone enterprises in today’s urban economy. 

To the extent that it’s possible to divine city thinking on the subject, the only city strategy operating right now is to try to woo suburban shoppers downtown by dangling the ‘specialness’ of the place: fizzy bribes like parades, festivals, fireworks, unique ‘character,’ and so on. This will not work to any appreciable degree. Car culture finds its own level and trust me, the Market On Millstream makes the Market On Yates (though profitable, I’m sure) look like a lemonade stand. My guess is that the downtown public realm—streets and other public spaces—probably needs a serious $20 million fluff-up. And a mobility strategy designed to whisk people (and their shopping dollars) downtown cost-free from James Bay, Fairfield, Fernwood, Gorge-Burnside and Vic West hasn’t even been conceived, leave alone priced. 

Not surprisingly, a downtown jobs/living paradigm hasn’t been formulated either. Not by anyone. The vision of an emerging downtown, as expressed in planning documents and policies, as articulated and ratified by mayor and council, is un-dreaming, unsure, underwhelming, un-strategic. In fact, with the exception of the usual high-minded flapdoodle on the preamble pages of the new Downtown Plan, there isn’t any ‘how’ there at all. 

Meanwhile, too many of the city’s condominium projects—from the towers in Humboldt Valley to those in Songhees—are not living buildings but dark-windowed, tombstone investments by prairie folk planning to ‘sunset’ in Victoria.

Years and years of inattention and neglect—the result of hubris, complacency, budgetary botch and mis-investment—have taken us to this place. It really is time for a local political revolution, which is to say it’s time for public (voter) outrage and action. It’s also time for a new crop of political hopefuls who can articulate vision, intention, substance and a detailed plan—before this city goes smelly with rot.

That said, changing the multifarious habits—the culture, really—of this place is going to be exhausting and nearly thankless. It starts with the need to replace conceits about how downtown is the “centre of it all” for the region with a muscular plan to actually re-make the centre as the centre—on its own terms. The only shopping carts I see in and around downtown are filled with beer and wine empties and the scant possessions of the marginal, not food or merchandise. By contrast, Greater Victoria’s suburbs are almost totally self-sufficient—economically, culturally, recreationally, socially; so the continuing effort to invite suburbanites to live their economic lives downtown must be acknowledged as an ever-more-thready and pointless undertaking.

Instead, how to ensure that an eventual 10,000-15,000 new residents are able to live, work and function south of Bay Street, west of Cook is, in my view, the city’s job #1. Our job as citizens and voters is to send the city that message, as quickly as possible.

Funny, but obscured by our dewy love of the old Victoria—mostly, the buildings downhill of Government Street—is the realization that they were shoulder-to-shoulder commercial structures created largely by a bumptious merchant class—people who were confident about the city’s economic future and their opportunity to make dough. 

The buildings weren’t an earlier generation’s idea of a legacy heritage project. The structures—and the merchant dreams that founded them—are at their centenary. Frankly, I can’t think of a better way to celebrate old bricks than with new plans for economic regeneration.

Gene Miller, founder of Monday Magazine and the Gaining Ground Conferences, is currently writing The Hundred-Mile Economy: Preparing For Local Life.