When help from Pennsylvania can actually do harm

Philadelphia Inquirer
Monday, March 1, 2004

Editor's note: The Pennsylvania General Assembly is considering a proposal from the Rendell administration to borrow $2 billion for economic development and $800 million to clean up polluted sites, preserve farmland, and improve parks. At the same time, Gov. Rendell is seeking substantially increased funding for public schools.

The lack of a coherent state policy means some of this funding could be wasted - or worse, harm the very region it's supposed to help, according to a recent report by the Brookings Institution. By encouraging development in outlying areas, Pennsylvania has undermined its cities and towns.  "In short," the Brookings report said, "the state lacks a clear strategic focus in doling out its billions of dollars in investment money."

To shed light on this argument, commentary writer Thomas Hylton examines how state policies are influencing the destiny of Warren, a small city in northwestern Pennsylvania. The state's contradictory efforts to help Warren, Hylton contends, has lessons for communities throughout Pennsylvania.

By Thomas Hylton

Warren is one of the loveliest small cities in Pennsylvania. It has a healthy downtown, stately old homes, an ornate courthouse and library, a historic theater, and beautiful scenic views.

But the town of Warren and Warren County both have been losing population for more than 20 years. The town of 10,000 residents has lost about 15 percent of its population since 1980. That's twice the county's rate of population loss.

Gov. Rendell pledged millions of dollars to help turn things around, but his help may leave the downtown worse off than he found it.

With the enthusiastic support of the community, developer Bob Yoder has proposed a $40 million mixed-used project called Impact Warren on land hugging the Allegheny River just off Warren's main street. Capitalizing on a $7 million investment by Northwest Savings Bank to enlarge its downtown headquarters, creating 300 new jobs, Impact Warren envisions two new buildings with a mixture of retail, housing and offices; a cluster of new townhouses overlooking the river; a new hotel; and a conference center in a renovated factory building, which also would house Warren's transit authority.

To make the project fly, the Rendell administration pledged an outright grant of $8.2 million to the city for a 629-space, four-level parking garage. More than $2.5 million in other state grants and forgivable loans would help pay for the housing portion of the project and a new amphitheater. All told, the $10.7 million state investment is an enormous sum for a town of Warren's size.

Yoder is confident the whole project will be built, even though a draft feasibility study said Warren's isolated location and lack of tourist attractions "suggested that the development of the conference center project in the current environment would be a high-risk undertaking."

The draft study suggested Warren should refocus its efforts on upgrading the downtown's retail and entertainment environment before tackling the conference center.

That won't be easy with the advent of the area's first Wal-Mart, just north of town. Wal-Marts have a long history of draining the retail life out of nearby towns, said Constance Beaumont, who has written two books on the impacts of superstores on traditional downtowns. "The studies I've seen show Wal-Marts get most of their sales at the expense of existing businesses, especially in markets that are not growing," she said. It would be far better, she suggested, to entice Wal-Mart to downsize and move downtown, as it did in Rutland, Vt.

Geoff Kirkland, author of the feasibility study, said his final report will recommend ways Warren can improve the conference center's chances of success. But he admitted the new Wal-Mart was a concern. "The question is, how do we make sure we don't put our small town out of business? I'm not sure I have an answer."

Ironically, the proposed new Wal-Mart was made possible by the active involvement of Gov. Rendell, the state legislature, and the Warren County Commissioners. The Wal-Mart will go on farmland formerly owned by the Warren State Hospital. Not only is the state transferring the land to the county so it can be sold to a developer for Wal-Mart, Gov. Rendell signed special legislation removing an existing easement intended to permanently protect the farmland.

Considering that Warren County is larger in land area than Chester County but has only 44,000 residents, it's hard to see how the population base can support both a Wal-Mart superstore and a flourishing downtown. History suggests the downtown will lose.

Pennsylvania can't save its cities and towns by promoting development on farm fields. As the Brookings Institution's recent report says, only a disciplined investment strategy, focused on established areas, can stanch the flow of jobs and residents from our core communities. The governor may get the $2 billion economic stimulus package he has requested, but unless he has a thoughtful plan, it won't make things better.