Saturday, July 24, 2010

National Harbor, MD--A Visit To The Twilight Zone

A recent trend in shopping center development is the outdoor "mall" where the center is laid out in street grid form, kind of like the old downtown Main Street shopping areas. A good example of this is the Americana in Glendale, a highly successful shopping (actually mixed use) area built on faux streets which do not appear in the Thomas guide.

Such a center exists along the Potomac River in Maryland, no more than 10 miles south of downtown Washington D.C. National Harbor is the Americana and more, the more being a number of convention sized hotels, full to the brim with people like myself attending business meetings. So why, then, are the streets of National Harbor deserted and its trendy stores and restaurants virtually devoid of patrons?

At first I thought that National Harbor had just opened up. However it's already been open for over 2 years, so that's not the explanation. As I walked the deserted streets, I also noticed that while there were plenty of higher end stores and restaurants such as Fossil, Godiva Chocolates, Dolce Restaurants, Rosa Mexicano, there wasn't anything in the way of ordinary retail--no chain drug stores (though one is under construction), no place to buy groceries (though a gourmet store is promised), no familiar casual or fast food dining options. Maybe I had fallen into an episode of the Twilight Zone that I hadn't remembered.

Part of the explanation is the weather. Crowds of people do come to the hotels of National Harbor for business meetings, but when it's 95 degrees and humid, none of them have any desire to step outside to explore the neighborhood, even if it is immediately adjacent. But the main problem seems to be the demographics. The closest housing to National Harbor (aside from the high end condos currently being peddled there) is apparently of the Section 8 ilk. The closest part of Washington D.C., is the Southeast quadrant, clearly the sketchiest part of the city. While crossing the border into Maryland does present a visually more suburban environment, the demographics are still working class. A more likely customer base lies on the other side of the Potomac in Arlington, VA, but there's no bridge over the river and you have to take a water taxi between the two.

Maybe there's more activity in National Harbor on weekends. Maybe there's more activity when it isn't so hot and humid. Maybe there will be more activity when the Cirque de Soleil theater opens up in a few weeks. Or maybe National Harbor was a bad idea built at a bad time.

Wednesday, July 14, 2010

Governmental Poison Pills - Not A Good Idea

In the corporate world there's a debate whether poison pill provisions, which trigger unpalatable consequences if outside interests acquire too much of the corporation's stock, is a good thing or a bad. One viewpoint is that they stop greedy corporate raiders from pillaging helpless enterprises, while the opposite view is that they protect entrenched management which may be operating inefficiently.

One clear thing, however, is that poison pills in the government context are absolutely ludicrous. But that's what we have here in the city of Los Angeles, which last year agreed with city unions that if the city laid off city workers, the remaining workers would automatically be entitled to a pay increase. This is the height of idiocy, particularly since this is a new provision that was actually crafted in a time of budget distress. Where labor costs both in the aggregate and per unit needed to be reduced, the city agrees to increase its cost of labor. All this proves is the oft made contention that the city of Los Angeles is controlled by the public employee unions. Incredibly, despite this poison pill provision, the city wants to lay off city employees, triggering this automatic pay increase for the survivors. This could make sense if you laid off enough employees to offset the cost of the pay increase, but that's not what they're doing.

However, this episode demonstrates a much wider shortcoming in the way government is operated. Politicians are always talking about cutting the fat and inefficiencies from government. Indeed, this is the rallying cry for anti-tax activists who resist increasing government revenues at all costs because there are so many inefficiencies in spending that can be attacked. But this is government we're talking about, Alice In Wonderland in its most extreme incarnation. The sad fact is that it is impossible to cut most of the fat out of government spending. Cutting the fat implies the existence of a surgical knife that can disintiguish between fat, muscle and bone. Such an instrument does not exist. It appears the only government tool available is a hacksaw which cuts equal portions of fat, musicle and bone. I have personally heard of two situations in different departments of city government where individuals are paid highly for doing nothing, but in this era of tight budgets, have absolutely no fear of losing their cushy jobs. My sources do not know why these people are protected, but this just adds to the tons of evidence that government is dysfunctional and is incapable of efficient financial operation. Sad but true.