Time to Reimagine Our Economic Development Model
Oct 5, 2015
The following is reposted from the Charleston Regional Business Journal (Oct. 5 – Oct. 18; Volume 21, No. 21):
That is the amount of money given in subsidies to large corporations in South Carolina since 1992, according to Good Jobs First. What if we reimagined this regressive economic development model of luring large corporations who send profits back to other states’ or overseas? Let’s start with leveling the playing field and allocating even just a portion of these public economic development dollars to support locally-owned businesses headquartered right here at home.
Imagine if a portion of these dollars were invested into a community land trust that would afford local businesses the same advantage as our out-of-state and overseas friends. When studies show that if one in three microbusinesses hired just one person we would be at full employment, it seems to make sense in terms of economic responsibility, recruiting talent and continuing to rank as one of the top places in the world to visit. Implementing policies that preserve and create affordable space using innovative tools and a collaborative approach with both private and public partners can go a long way in preserving the Lowcountry that we love.
Starting your own business is becoming harder rather than easier at a time when all of the buzz is around developing an ecosystem where entrepreneurs can thrive. A recent conversation with one of our Lowcountry Local First business members ready to start her next venture after having sold her share in another successful business revealed that even the best laid plans are hard to implement. The ideal location for her venture was identified as the Cannonborough/ Elliotborough neighborhood on the peninsula, but between exorbitant rent, the cost of renovation and a cumbersome and lengthy permitting process, the plan was abandoned.
Established businesses are experiencing similar issues. Christina Mikolajcik-Edles, owner of Sweet185, a sugaring studio and boutique on Upper King St., moved her business from Saint Phillip St. to her current King St. location when the area was still known as the “Design District.” Christina was excited about being part of the revitalization of the area and it seemed to be a place where local businesses would have an opportunity to grow in the historic central business district. When she opened shop in 2009, it felt like a place for locals, rent was reasonable, and the location was convenient for her clients. Since then, her rent has more than doubled. The building was sold to a New Jersey-based development firm and she has lost access to the one parking space behind her building that she paid to have paved.
Christina, like most local business owners, would like to own the building for her business. She has spent years paying the property taxes, mortgage and insurance as well as footing the bill on improvements for real estate she doesn’t own. The issue, of course, is that the cost of real estate is prohibitive to nearly everyone but high-end restaurants and national chains. Also, the transition to a new space and the lengthy permitting process with the city means a business is generating no revenue during this time.
The difficulties that these and other local businesses face go beyond the direct impacts, filtering down to the smaller ‘B2B’ vendors that they work with who are overlooked by national retailers (such as printing companies, marketing firms, accountants and local media who count on them as clients). Our locally-owned businesses generate three times the economic impact as compared to non-local businesses, due to this ‘multiplier effect’ of working with other local businesses.
This is not just a City of Charleston issue; these rising rents and property prices are trickling into Park Circle, West Ashley, James Island and Mount Pleasant. A 1,000-square foot property on Spruill Avenue is now selling for $500,000. Lowcountry Local First values our local businesses. They are the pulse of our city and are what Christine Osborne of homegrown toy store, Wonder Works, refers to as the “special sauce”. Without them we become like any other town — bland and tasteless.
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