Malcontent

Looking Beyond Providence’s “Bad” Climate for Business

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Providence’s economy is ailing and continues to lag in its recovery efforts. The job market is tough. The taxes are high. It routinely ranks near the bottom on various lists of cities that are good places to do business. These harsh truths are among our favorite topics of discussion – on talk radio, during election season, around the barbershop, at the dinner table, it seems like someone is always decrying the economic climate in our fair city. While none of these facts are in dispute, and improving these grim circumstances remains imperative for the health of the city, we must also examine the full scope of our socio-economic reality before throwing up our hands in utter despair. There’s a lot more to a vibrant metropolis than taxes and employment numbers, and a lot more to the business climate than the concerns of – to borrow a phrase from one partner in a small, creative local business – “silver-haired CFOs.”

A couple of months back, venerable news site The Daily Beast published its list of “America’s Thriving Cities,” ranking the 100 largest cities based on factors like population growth, unemployment and earnings, and market strength. Not surprisingly, Providence was nowhere near the top. Among the cities that were: Gilbert, AZ (#8); Plano, TX (#7); and number 1, Irvine, CA. If you’re ready to pack your bags and leave Providence behind in favor of any of those boomtowns, I’ll drive you to the airport.

The problem with gauging a city’s health by purely economic readings is that they’re so cut and dry –there isn’t a whole lot of room for the intangibles that can make a place truly great. New Orleans, surprisingly, is in the midst of a tech-driven economic surge that has led some to call it “the Silicon Valley of the South.” If I were to ask you to list the top ten appealing things about the Big Easy, you probably wouldn’t land on that one. It’s the food, the music, the celebrations, the history and countless other hard-to-quantify cultural factors that make the city such a desirable place to be – and when people want to be somewhere, they’ll work hard to make it more viable.

While Providence may be sorely lacking in favorable tax policies, it’s got culture in spades. Wilmington, DE, on the other hand, has a fantastic, business-friendly tax rate, and as such it’s a national financial center and home to many big credit card companies. Again, if you’re in a rush to trade your Providence address for a Wilmington one, I’ll see to it that your mail gets forwarded. Personally, I’ll take WaterFire over whatever happens along the banks of the Christina River any time.

The fact is that we’re dealing with difficult economic circumstances here in Providence, and they’re not going to get better in a hurry. The tax rate is high and it’s staying that way for the foreseeable future – even a marginal improvement in the commercial tax rate that might be possible by tightening the city’s belt isn’t going to turn this place into Irvine, CA. But that doesn’t mean we can’t make Providence the kind of place where people want to be – even business people.

First, there is the low hanging fruit on the economic front. We can make the city a better place to do business, even if it’s not necessarily a less expensive place to do business. Commercial real estate investors want low taxes, sure, but more than anything they crave stability and predictability. If we stabilize the tax rate, which Mayor Taveras has worked to do, and streamline the convoluted and bloated bureaucracies that business people must navigate just to get their doors open, we create a more hospitable business climate. It’s a lot easier to create a sustainable business plan when you’re not worried about the Tax Assessor, Board of Licenses or Fire Marshal throwing you a curveball.

Beyond that, we can look at the myriad other factors – both tangible and intangible – that make people want to live, work and run a business in a city. Among the types of young professionals, emerging entrepreneurs and owners of creative small businesses with whom I typically speak, I very seldom hear complaints about the commercial tax rate. They want some of the same things the silver-haired CFOs do – access to capital, a skilled labor force, affordable rent – but they also want to live in a city that’s exciting, vibrant and full of culture. They’re here because they love Providence – they just want to be here, and thus they’ll find a way to survive economically. They’ll invest their money, time and talent in making this a better place to be, and attracting others to come here. And they won’t threaten to leave every time the honey pot dries up, because they’ve made this their home. I’ll take 50 of those over one credit card company any time.

malcontent, business, providence, economy, providence monthly

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