Author: Rob Morris

The UnTower Manifesto: 1. Truth

Rob Morris 0 Comment Business, CentrePointe, Community, Customer Service, Ideas, Neighborhood, Rants, UnTower

[Note: The UnTower Manifesto is a three-part series about responding to the failure of CentrePointe.  You can read the full story of that failure here.]

As the CentrePointe project becomes the UnTower scandal, a general consensus has developed which agrees that CentrePointe will never be built on the crater that its developers rushed to create. 

A critical question, then, is this: If CentrePointe will not be successfully constructed, how should Lexington move forward in the wake of the UnTower scandal?

There is the obvious question of how to proceed with the colossal scar in the middle of our city.  But there is also the less obvious – but, ultimately, more important – issue of changing how Lexington works in order to prevent the next UnTower catastrophe.  Let me start there, and we'll return to the issue of what to do with the site.

Toward a Better Lexington
The details of how UnTower happened have slooowly trickled out from the developers.  Their secrecy, lack of candor, intimidation, outright deception, and possible fraud have sharpened questions about how decisions have been made throughout the project's approval process.  UnTower has exposed how opaque and how ill-informed our mayor's and our Urban County Council's decision-making processes have been.  And, if you look closely enough, the scandal shows us how Lexington should improve.

So, how did this fiasco happen?  The details have been covered many times from many, many, many quarters, so I'll simply summarize the key themes:

  • Throughout UnTower, the developers have maintained great secrecy about the financing and the business model behind their development.  As details have emerged, neither looks viable.
  • The developers claim their project is 'private', but have pressured the public to provide approvals and special Tax Increment Financing (TIF) for the project, with much of the TIF dependent upon a vibrant long-term business model which they don't have.
  • The developers, the mayor, and some council members have not shared how and when they learned about key elements of and issues with UnTower which led to its ultimate demise.
  • The developers, the mayor, and much of the council have responded to pointed and informed questions about the project with vague, non-responsive answers.  Often, they refused to respond at all.
  • While there was public discussion about the decisions our government was making, the conversation was muffled by their timing and format.

In the end, the whole affair had a distinct 'backroom deal' flavor to it which left more questions than answers: How were these decisions made?  What information went into the decisions?  What information was withheld?  What information was fabricated? Who talked with whom about the project?  When did they talk? 

All of the questions have raised a bigger question: How is it possible that our community doesn't have absolute clarity into how decisions are made by our elected representatives?

In my business, if we failed to clearly explain how a vehicle was repaired, we'd lose customers.  If we came across as less-than-honest, our loyal customers would fire us.  If we refused to meet with a customer to address their complaints, they would tell their friends and family.  If we didn't make things right when we screwed up (and, yes, that does happen occasionally), our reputation would suffer.  In the end, our business would fail.

With UnTower, our community's 'business' failed us.

Clarity.  Explanation.  Honesty.  Availability.  Accountability.  These are the pillars of a transparent business that customers can believe 'does things right'.  A healthy, vibrant business which grows and prospers.

We wouldn't accept anything less than these qualities from a business.  And we shouldn't accept anything less from Lexington.

In an age of websites, blogs, Twitter, and Facebook, every business has had to engage in conversations with customers on the customers' terms.  The ubiquity of the internet means that these tools are available to nearly everyone, nearly everywhere.  The latency of the internet means that the conversations don't have to happen at the same time – they can build over time.  The internet's ubiquity and latency forms the foundation of a new and better town hall.

Why should we all have to cram into a room at the same time?  Why should we have to play 'beat the clock' when talking about issues which are complex and nuanced?  Why should we have to forgo pressing business or personal matters to attend a meeting which is designed to be convenient for our representatives?

The internet provides the perfect public forum for every citizen to express his or her public policy views, ideas, and thinking.  Even better, our ideas can build on one another as we tinker with and improve the ideas of our neighbors.  Plus, conducting civic conversations on the internet can happen around the clock.  Citizens can participate in the public discussion when and where it is convenient for them, not for the elected representatives who serve them.  Isn't that the way it should be?

Further, every single representative should publish their conversations, thinking, dilemmas, trade-offs, beliefs and positions (and the transactions between them and other interested parties – like developers or investors or campaign contributors).  These records should be posted online for all citizens to see, comment on, debate, and improve.

The council members' emails are listed on the city's website, as are the mayor's newsletters.  But these are old, closed, one-way forms of communication.  They aren't vibrant community discussions.

So, do I want to see tweets that the mayor's advisor is picking up eggs?  Or a Facebook entry featuring the halloween costumes of the councilwoman's children?  Not particularly.  But we deserve to see real-time updates of their thinking on critical community issues.  We should know why they have changed their minds at the last minute.  They should tell us who they talked with and what they said.  After all, they are public officials.  We should see into a transparent civic machine which serves all of us.

What is clear is that a 19th-century civic apparatus has hamstrung our
21st-century community. The ancient contraption allows far too many
secrets to hide within.  Whether our representatives and our governments use blogs, Twitter, Facebook, or some other platform matters far less than whether they start participating in open conversations with the people they serve.

The technology already exists.  Millions of people already use it.  Thousands of your constituents use it every day.  It's easy.  It's free.  And it will make Lexington better.  What are you waiting for?

[Continued in: The UnTower Manifesto: 2. Consequences]

[where: E Main St & N Limestone St, Lexington, KY 40507]

The UnTower Manifesto: 2. Consequences

Rob Morris 2 Comments Business, CentrePointe, Community, Ideas, Neighborhood, Rants, UnTower

[Note: The UnTower Manifesto is a three-part series about responding to the failure of CentrePointe.  You can read the full story of that failure here.]

The consequences for UnTower should rest on the people who perpetrated the scandal: The mayor, some council members, and the developers.  Let's start with the mayor.

In other venues, I've seen the mayor talk with his skeptics with apparent openness and graciousness.  He was quite articulate.  He listened to their concerns and seemed to hear them.

But the last several months have shown a repeated abdication of his duties in the face of scandal.  This pattern first emerged with the airport staff's misappropriation of public funds in their credit-card-and-travel scandal, where the mayor displayed a perplexing tendency to drag his feet.  Now, as CentrePointe devolves into the UnTower scandal, the mayor has shown a similar lack of initiative to lead on his citizens' behalf.  Instead, he has resorted to 'happytalk' to defend what is clearly a failed project.

Meanwhile, the vice mayor has been active and vocal in challenging both scandals.  The effect: a grassroots effort to draft him to run for mayor in 2010, complete with its own Facebook fan page and glowing coverage in local media.  The current mayor seems to have no such dialog with the citizens he serves, and seems to have generated little enthusiasm for a 2010 run.

The mayor needs to begin to lead with candor, action, and transparency – beginning with complete clarity around what happened to create UnTower – or his constituency will chase him from office.

The same can be said for the members of the Urban County Council – especially those who rubber-stamped the UnTower project without adequate scrutiny or analysis.  They must assume a more actively transparent posture – including using the tools and technologies to have conversations with the people they serve – or they, too, will be removed from office by their increasingly-informed electorate. Their citizens will no longer tolerate the kinds of hijinks and misdirection that characterized UnTower.

Finally, there are UnTower's developers.  What should happen to them?

The scar in the middle of town is their property.  But the destruction of the block and the special tax status endowed on the block were public events, with public investments and public impacts.  If anyone doubts the public impacts, just talk with businesses bordering the UnTower eyesore about its effects as a customer-repellent.

So here's my modest proposal for penalizing their deception.

First, the council should explore all options for rescinding the block's special Tax Increment Financing (TIF) status.  TIF was granted under conditions which no longer seem to apply, and the developers no longer appear to have earned that special status.

Second, the council should – to the extent it is able – strictly re-define acceptable future uses of the property in light of the UnTower scandal.  Given that the developers contributed to the scandal with their hollow promises and continual lack of disclosure, I would hope that our council would be particularly stringent with requirements for how the property functions as part of our community and that they would set a strict timetable for the developers to act.

The developers misled us to gain advantage; now they should pay the price.

[Continued in: The UnTower Manifesto: 3. Beyond UnTower]

[where: E Main St & N Limestone St, Lexington, KY 40507]

The UnTower Manifesto: 3. Beyond UnTower

Rob Morris 0 Comment Business, CentrePointe, Community, Ideas, Neighborhood, Rants, UnTower

[Note:
The UnTower Manifesto is a three-part series about responding to the failure of
CentrePointe.  You can read the full story of that failure here.]

The final piece of the UnTower puzzle is what to do with the pit now that the historic buildings are gone and the promised tower cannot be built. 

Up front, let me declare that I don't have all of the answers regarding what needs to be done with the block.

But I do have some general principles which we might start to apply to the site.

  • Create a vibrant destination which attracts in-town residents, weekday workers, other folks from throughout the Bluegrass, and tourists.
  • Make that destination a distinctive place which no other city has (and this doesn't need to be a towering monument to ego)
  • Create public and private spaces within the destination which allow the community to create shared experiences while also providing a much needed economic boost
  • Balance the types of uses within the development to include an attractive mix of retail, nightlife, dining, and lodging options
  • Ensure local businesses have significant presence within the development to help supercharge the local economy
  • Ensure that the space is well-integrated with the surrounding community and that its design promotes circulation throughout surrounding businesses and public spaces
  • Build it soon.  Remove the eyesore that the UnTower scandal left behind.

So lets look at these principles in more detail.

Destination.  If we want the UnTower block to directly feed the local economy, we need it to function as a destination for both our visitors and our community.  The previous imposing design did not encourage local residents to participate in the space.

Distinctive Place.  The new development should, to the extent possible, function as a signature place for Lexington.  Much like Keeneland and our horse farms showcase Lexington as a city like no other, the new development should showcase our city, our region, and our people.  Portland, Austin, Miami, Chattanooga, Denver, and even Louisville have these memorable and distinctive signature places.  Lexington should, too.  A distinctive place will draw people (and dollars) into our community; A forgettable one will not.

Public and Private Spaces.  The most effective places (like those in the cities above) combine public spaces with private enterprise.  Thus, memorable shared experiences can also feed the local economy.

Balanced Use.  Others have proposed using the block for a single kind of use – say, a new basketball arena.  Such dedicated uses of the property would be counterproductive to our economic engine.  To get the biggest economic bang for the buck, we should encourage a unique and balanced mix of stores, restaurants, attractions, clubs, and perhaps a unique 'boutique' hotel.  (My best-ever customer experience was at a Kimpton Hotel, which made for a hugely positive impression of Portland in general.  What if Lexington could wow its visitors like that instead of giving them a bland cookie-cutter hotel?)

Local Businesses.  To supercharge the impacts of the dollars spent within the new development, we should try to ensure that many of the businesses located there (30%? 50%?) are local businesses.  This will yield two big benefits.  First, it would contribute to the distinctive character of the place.  Second, it would keep a significant portion of that money in Lexington.

Integration.  When CentrePointe was proposed, many derided the design as too fortress-like and too disconnected from the city fabric.  The UnTower scandal offers an opportunity to correct that mistake.  The new development could more thoroughly integrate with several aspects of downtown development.  The site borders Phoenix Park, Courthouse Plaza, and the History Museum / old Courthouse / Cheapside complex.  An 'open' design would promote circulation through those spaces (and into surrounding businesses) and would better integrate with our other urban initiatives (such as our street improvement plans).

Build Soon.  Regardless of the type of development we ultimately put on the UnTower block, we probably have missed our window for using it to improve our city's appearance for the World Equestrian Games in 2010.  Nonetheless, we cannot allow the crater left by UnTower to remain. 

Is this list comprehensive enough (or even correct)?  Probably not.  Feel free to point out what I got wrong or what I missed.

In any case, this is the kind of civic discussion that the citizens of Lexington must engage in if we are to build a better community – and if we are to heal the scar in the middle of our city.

[where: E Main St & N Limestone St, Lexington, KY 40507]

What do you hate about Lowell’s?

Rob Morris 2 Comments Blog, Customer Service, Lowell's

OK, so 'hate' is a strong word for it.

But as much as we try to be the best mechanic in Lexington, we know we're not perfect.  We know that there must be some parts of your experience with us which could be better.

So tell us.  Let us have it.  We can take it.  And we need it.

To get the conversation started, here are some aspects of our business you might want to riff on:

  • Our location
  • Our pricing
  • Our service
  • Our website
  • Our blog
  • Our lobby
  • Our restroom
  • Our people
  • Our honesty
  • Our attitude
  • How we checked you in
  • How much time we took
  • How well we explained what we did
  • How we checked you out
  • Something we did
  • Something we didn't do
  • Something we should do

Please let us know how Lowell's can get better.  Use the comments section below, call the shop at 233-1173, or email us at lowells [at] iglou [dot] com.

We can't promise we'll do everything you suggest, but we will work to make your overall experience with Lowell's a better one.

And thank you.

[where: 111 Mechanic St., Lexington, KY, 40507]

Why CentrePointe will fail

Rob Morris 3 Comments CentrePointe, Community, Neighborhood, Predictions, UnTower

CentrePit A few months back, I openly wondered about the viability of the CentrePointe project, which thus far has only managed to crater an entire city block of historical buildings.

Since our post (which came long after the controversy started), there has been a continued flurry of discussion around CentrePointe in the community.  But nothing has happened on the construction site. 

In all of this turmoil, one fact has become crystal clear: CentrePointe will fail.

The project will fail in one of two ways:

  1. The project will fail to be constructed, or
  2. The project will be constructed, and then fail financially

I say this not out of emotion or disgust aimed at the project, the developers, the mayor, or their conduct (although all may be worthy of disgust) – but because the justifications for the project fail to stand up to basic business logic.

Instead of acknowledging the flaws in their business plans, CentrePointe's developers have continually invoked wishful thinking to rationalize their actions. 

I've seen this kind of fatal optimism in business many times before.  Business executives often think they can make a project succeed by just wanting it badly enough.  (Unfortunately, optimism isn't a viable business strategy.)  In their blind pursuit of their goal, they disregard the facts. 

So, lets explore the facts around CentrePointe ('CP' from now on), which really can't be ignored any longer.  (Read more from the Herald-Leader here, here, and here.)

  • CP has had an unnamed international financier who committed $250 million to the project.  This week, we learned that the mystery investor died.  Without a will.  The project certainly won't commence until a) the financier's estate goes through probate court, and b) the heirs agree to continue support for CP.  Odds the financier ever existed: Iffy.  Odds heirs will support CP: Doubtful.
  • CP is supposed to house a J.W. Marriott luxury hotel.  Meanwhile, Marriott's CFO (who is their soon-to-be CEO President and COO [correction]) has repeatedly announced that even the best projects – a group that CP cannot possibly belong to (see more below) – are stopped in their tracks.  Odds Marriott will end up in CP: Doubtful.
  • The Marriott would have 250 rooms going at $190 per night.  The price is 50% higher than competing hotels, yet the developers' analysts estimate occupancy rates at startup which are better than those (less expensive, more established) hotels.  Odds of getting higher occupancy at a much higher price: Very slim.
  • There are 91 luxury condos at the top of CP, which would sell for $1.2 million each and which would generate over $100 million for the project.  The analysts estimated that 45 of those would sell before construction starts.  And all 91 condos would be sold in 3 years.  In all of Lexington, there were 31 million-dollar properties on the market at the end of 2008, and only 10 such properties sold during the entire year.  So… CP's developers would flood the market with luxury properties — essentially quadrupling the number that are on the market — and expect to sell them faster than historical rates.  Odds that Lexington could absorb a 300% increase in ultra-luxury properties in only 3 years: Zero.
  • CP's developers have to sell 4.5 years (45 condos at 10 condos per year) worth of luxury property inventory before construction starts.  And that assumes that every million-dollar prospect would prefer to live in a 2700-foot high-rise condo instead of a country estate. Odds that CP's developers can sell 45 million-dollar condos before construction starts: Zero.  (Note: This week, CP's developer claimed that 61 of the 91 condos were 'spoken for'.  This is patently false, and reveals a worrisome desperation from the developers.  Unless 'spoken for' means that someone said "I wish that I could live in a place like that…"  Which is also worrisome.)
  • CP's analysts assumed that the $1.2 million condo buyers would have an average income of $220,000.  That's an incredibly aggressive price-to-income ratio of nearly 6, which ranks with inflated San Francisco, New York, San Diego, and Los Angeles averages – before the real estate bubble burst.  Snakebitten banks are much more critical of an applicant's ability to pay in this economic environment.  Lexington's average price-to-income ratio: 2.35 – indicating an income of over $500,000 to afford the condos and drastically limiting the pool of eligible buyers.  Odds of finding enough eligible prospects in Lexington: Very slim.

So what are we to conclude about CentrePointe from these facts?

  1. The developers' tendency toward secrecy and intrigue are unacceptable in light of the public investments in and public impacts from this project.  We deserve transparency.
  2. The project is not financially viable.
  3. The primary financing (if it even exists) is shaky at best.
  4. The analysts' projections are unrealistic and misleading.
  5. The project cannot generate the promised tax revenues.
  6. The developers are prone to either fantasy and/or outright deception; either case bodes poorly for the feasibility of the project.
  7. CentrePointe will fail.  Miserably.

Lexington must now accept the failure of CentrePointe and begin to move beyond the CentrePointe fallacy.  We must hold accountable those who recklessly ramrodded the flimsy development through our city council.  We must prevent future irresponsible allocations of our common wealth.  And our community and our public officials must begin carefully contemplating what's next for the block that CentrePointe obliterated.

Update 4/13: Crossposted to Ace Weekly as "Optimism is Not a Business Strategy"

Update 4/14: Tom Eblen did an excellent parody of the CentrePointe situation here.  Very cool.

Update 4/17: OK.  Let's just get the whole story out on the table.  The UnTower Manifesto: What went wrong, what to do about it, and what to do about the scar it left on our city.

[where: E Main St & N Limestone St, Lexington, KY 40507]

Lowell’s Bluegrass Vehicle Report

Rob Morris 1 Comment Auto Industry, Bluegrass Vehicle Report, Community, Lowell's, Toyota

Today, we are pleased to release the Bluegrass Vehicle Report 2009.  Using state registration data, Lowell's compiled statistics on vehicles in seven Bluegrass counties.  We've put the results together in a fun and informative format which shows details about the automotive marketplace in and around Lexington.

In addition, Lowell's is releasing Lowell's School Tools.  School Tools is a companion guide to the report which helps teachers, parents, and student create their own fun and interesting findings from the automotive data.  More about School Tools can be found here.

Among the more interesting results from the Report:

  • Toyota is the #1 brand of vehicle in Lexington.  The 33,624 Toyota vehicles on the road put Toyota ahead of both Ford (31,018) and Chevrolet (29,712).  Toyota nameplates are on 15.4% of the cars on the road.
  • A lot of Toyotas.  All of those Toyotas, placed end-to-end, could fill all 4 lanes of New Circle Road, completely encircling Lexington.
  • A lot of gas.  Lexington drivers consumed over 156 million gallons of gasoline in 2008 — more than enough to fill Rupp Arena from floor to ceiling.

You can see all of the results here:

Bluegrass Vehicle Report 2009

View more presentations from Rob.

Or, you can download a PDF of Bluegrass Vehicle Report 2009 (1886.4K).

[where: 111 Mechanic St, Lexington, KY 40507]

Lowell’s School Tools

Rob Morris 0 Comment Bluegrass Vehicle Report, Community, Fun Stuff, Lowell's

Lowell's is pleased to release School Tools, which is a companion guide to the Bluegrass Vehicle Report.  School Tools is designed to help teachers, parents, and students develop their own interesting real-world insights about cars in the Bluegrass.  Along the way, they will engage their skills in research, creativity, and applied mathematics.

The School Tools guide is meant as a starting point – please adapt it to your particular needs and the particular aptitudes of your students. 

School Tools is free to teachers, parents, and the general public.  All we ask is that you give us suggestions for making it better, and that you share your stories about how you used School Tools.  We can't wait to see what you do with it!

School Tools 2009

View more presentations from Rob.

Or, you can download a PDF of School Tools 2009 (5804.0K)

[where: 111 Mechanic St, Lexington, KY 40507]

Toyota is the top brand in Lexington

Rob Morris 0 Comment Bluegrass Vehicle Report, Community, Toyota

On Thursday, Lowell's will release the Bluegrass Vehicle Report, which will look at the kinds of cars central Kentuckians drive.

One surprise finding:  Toyota is now the top brand (or "make") of vehicle on the road in Lexington, surpassing both Ford and Chevrolet.  Obviously, as Toyota specialists we're pleased.

We'll have all of the details in the Report later this week.

[where: Lexington, KY]

Dealership troubles

Rob Morris 0 Comment Auto Industry, Business, Dealerships, Predictions

In January, the Wall Street Journal ran a page one story about the troubles facing two dealerships in southeastern Kentucky.  One of them, Johnny Watkins, had filed for bankruptcy.

At the time, we predicted that there would be a lot more dealership closures in 2009, especially in smaller towns. 

MaysvilleFordAuctionThen, a couple of weeks ago, we received an auction notice to liquidate the assets of Maysville Ford.
 
Why is this happening to dealers in small towns?  There are a few key reasons:

  • There really isn't enough critical mass of car sales to support a dealership in a small town.  So dealers have to draw customers from nearby cities, usually with discounts that squeeze their profitability.
  • The most profitable part of the dealerships come from service to vehicles after the sale.  When out-of-town customers purchase from a small-town dealer, they tend to have their cars serviced somewhere else, as the dealer is too inconvenient for frequent maintenance.  So small-town dealers lack the service customers that larger dealers have.
  • The heavy reliance on car sales (and the lack of substantial service sales) means that small-town dealers are much more sensitive to economic downturns.  As car sales plummet, the service business is what has sustained many big-city dealers.  The smaller dealers just don't have that cushion.

The economic realities of being a dealer in a small town mean that a lot of them won't survive over the next couple of years.

[where: 41056]