Baltimore and New York City.
Two great American cities.
Two rival cities, as well.
I am not referring to the sports rivalries between the Orioles and
Yankees. Rather, I am referring to the
intensifying rivalry for creative talent and thus a stake in the economy of the
future.
What made me think of the rivalry between New York City and
Baltimore was an announcement on Monday, December 19, by New York City Mayor Michael
Bloomberg. Cornell University, in
partnership with Technion-Israel Institute of Technology, was selected the
winner of a global competition for the right to develop an engineering campus
in New York City on Governor’s Island. Seven
proposals were submitted by seventeen institutions. Stanford University, the presumptive front
runner, pulled out of the competition last Friday. The
winner of the competition were offered the right, at no land cost, to develop an
engineering campus on Governor’s Island in the East River plus a $100 million contribution
towards the cost of building infrastructure.
The total cost of the venture is projected to be $2 billion, of which
$350 million was sourced from Charles F. Feeney, the billionaire Cornell
alumnus who founded Duty Free Shops. The
package includes a $150 million venture fund expected to spawn 600 new firms
that will create 30,000 new jobs and generate $1.4 billion in new tax
revenue. Cornell also committed to
training 200 teachers annually and annually supporting 10,000 students. Finally, constructing this new, 2 million
square foot urban campus will create 20,000 construction jobs.[1]
Amazing! New York
City, the largest city in the country and the financial capital of the world,
pivots on a dime in the middle of a deep recession to make a large wager on the
economy of the future. New York City leverages
vacant land plus a $100 million investment into a $2 billion initial investment
in human capital.
Looking south towards Baltimore, what do I see? Another
large municipality making a similar size wager on the economy of the
future. I see the State Center project. This is a planned $1.5 billion mixed-use
development project that will offer 2,000,000 square feet of office space,
25,000 square feet of retail space and 1,400 housing units. This project is slated to replace the 932,000
square feet of existing office space owned and occupied by various agencies of
the State of Maryland.[2] We will not discuss the pending lawsuits.
I ask the citizens of Baltimore City and the State of
Maryland to compare the Cornell/Technion engineering campus project in New York
City to the State Center project in Baltimore.
First, compare the public resources each jurisdiction has wagered: New York City - $100 million plus some vacant
land; State of Maryland/Baltimore City – up to $200 million plus some vacant
land.[3] Second, compare the goals of each
project: New York City – human capital
development, economic development, and a new source of tax revenue for generations
to come; State Center – a depreciating office building asset, housing units
that may only be built if they are heavily subsidized for low income/Section 8
tenants, waived real property tax revenue for 25 years, up-front developer
profits, and a free parking garage for state employees.
Is this the best Maryland can do? Why aren’t we investing our scarce resources
to secure a commanding role in the future economy? Why are we not investing in human capital,
the benefits of which are described by Edward L. Glaeser in his book, “Triumph
of the City?” Wasn’t Mr. Glaeser a guest
lecturer at a recent meeting of the Downtown Partnership of Baltimore?
When I think of the proposed State Center project as
compared to the Cornell/Technion project, Thanksgiving comes to mind. Growing up, I always marveled at my mother’s
cooking. She was the best cook in a
family of seven girls and four boys. She
could transform readily available ingredients into a spectacular meal using her
superb culinary skills and vast experience.
As a single adult living on my own, I once tried to replicate my
mother’s Thanksgiving dinner. I stocked my
pantry, cabinets and refrigerator with everything my mother used. I bought similar pots, pans and
utensils. I even used her recipes. My efforts resulted in a big mess, wasted
ingredients and wasted time. I realized
that my mother’s skills and experience made the difference between my big mess and
her exquisite meal.
Returning to my comparison of the State Center project to
the New York City project, I am concerned that twenty years from now, the State
Center project will a be pile of bricks and mortar at the end of its useful
life, while the Cornell/Technion engineeering campus will have become Silicon
Valley East, training world-class engineers, conducting research with global
partners, spawning start-ups, producing creative products, and attracting the
brightest minds from around the world.
New York City and the State of Maryland are both staring
into a pantry looking at the same ingredients.
Who will make a meal? Who will
make a mess? I believe we have New York
City’s answer.
