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February 27, 2007

Comments

I

I wonder who will get rich now?

Ron Newman

I hope that Federal Realty and MVTF and the city all keep in mind the desirability of preferring locally-owned businesses over national chains. For example, the preliminary plans show a new cinema. Wouldn't it be great if that went to the local owners of the Somerville Theatre, instead of to AMC or Regal or Showcase?

Dominic Santos

Ron:

I am confused by your comment. I am for a living wage, robust employee benefits, and fostering an environment where the business community (including both large (what you may term, "national chains") and small businesses) is an integral part of the larger community. Getting to this eutopia, however, is not achieved by promoting locally-owned businesses cart blanche. Locally-owned business, particularly small businesses, are plauged by inefficiencies that prohibit robust employee benefits and the offering of a living wage. If a locally owned cinema has 20 employees, the per-employee cost for health insurance will be much higher than the per-employee cost for a national chain cinema with 50,000 employees. Thus, in competing in the market place, the locally owned cinema may have to forego providing health benefits and a higher wage to keep movie ticket prices competitive.

Large businesses with a national presence do feel further removed from our city than a local business, like Diesel Cafe. With that said, the movement from the progressive side of the aisle (a side of which I am so far from that high powered binoculars would not aid me in seeing it) should be toward integrating large national chains into the community by persuading national chains to empower local managers to make an investment in the community. Barnes & Noble is a good example. B&N has a community investment manager at its Prudential location with a budget to provide free books to charity organizations. B&N has the cashflow to provide higher wages and a employee benefits. Once community investment is achieved, folks can urge these companies to provide employees with higher wages and benefits. The difference between national chains and small locally owned businesses is that the national chains likely have the means to provide benefits and higher wages.

Dominic

Solh Zendeh

Dominic, the ideas that you are promoting are, in my opinion, anti free market. Large national and international corporations take advantage of taxpayer subsidies to achieve their size. In fact, you could argue that the single biggest subsidy is the ability to form a corporation in the first place. Limited liability is something that can and should be paid for as an insurance by the corporation. Having it for free is simply allowing the gigantism many seem to think of as a normal and natural. A free market is only as good as it's fundamentals, free limited liability introduces something profoundly unnatural to the system.

On a more practical note, I'm guessing that the global peak oil supply plateau that we've just entered in the past year or so will wipe out many of the largest and most ridiculous brands that we have here in America. The ability to import electronic toys, cloths, and other non-necessities from Asia will be crushed as a combination of the coming housing crash, devalued dollar and wildly fluctuating oil prices all complete the destruction of the so-called middle class here. Same goes for all that beef and corn we grow in monstrous feed lots in California using immense inputs of natural gas and oil, then ship 2500 miles by truck.

Past performance does not predict future results. The fact that these huge corporations flourished when there was an ever growing supply of the most useful resource ever discovered means nothing when that supply stops increasing and then slowly starts to dwindle. Hanging on to the past is a losing bet - lets get started rebuilding a sustainable and reality-based local economy.

Bill Shelton

Dominic,

National chains' primary competetive advantage is, indeed, scale economies. On one side, scale gives them the bargaining power to exact price concessions from their suppliers, including suppliers of labor. On the other, it enables them to compete on price, at least until they have driven out local competitors.

In the absence of an empowered workforce, these advantages do not necessarily translate into higher wages, and they often translate into the reverse. National chains' only relationships with local workers are market relationships, whereas local owners share other rights and obligations with members of their community.

Distant corporate managers' pursuit of profit maximization in behalf of anonymous stockholders is less likely to be modified by other goals. They have sought leadership in the campaign for universal healthcare (a policy position from which one would need high-powered binoculars to see you) only because healthcare inflation is mutilating their bottom line. Meanwhile, these same corporate players, e.g., Walmart, pay as little for employee healthcare as they can get away with, while advertising to the gullible that they are stepping up to their healthcare obligations.

I'm not saying that the corporados are evil people. They take our economic institutions as they find them, and then do the best that they can for their stockholders within those parameters.

Locally-owned businesses have a significantly higher multiplier effect on the local economy than do national chains. That is, a greater proportion of what customers spend at local firms is reinvested in the local economy through the purchase of local goods and services. How much does Home Depot, or Staples, or Burger King buy in Somerville?

And if you talk about how much national chains give to the community, both through charitable donations and participation in community affairs, the contrast with locals is shameful. During the past decade, the Somerville Home Depot had the highest gross sales per square foot of any store in the chain. It continues to generate well over $1 hundred million per year in sales. How much do you think that it gives to Somerville?

I'm one of the few locals who persuaded them to give to a local charity. That was so long ago that if you look at the picture that they proudly display, I still have hair on top. If you go to them with a modest request for support of a worthy local cause, you are redirected to an unresponseive flack in Atlanta.

You suggest that we "persuade national chains to empower local managers to make an investment in the community." As someone who has tried, I would appreicate your wisdom regarding how that might be accomplished.

Meanwhile, companies like Federal Realty, themselves, are national concerns and simply aren't set up to recruit local tenants. I'm not saying that they are hostile to locals, or that they would not welcome a solid local tenant.

They are overwhelmed with the demands of a complex development. And, frankly, the availability of viable local businesses of sufficient scale to be reliable tenants is scarce. If we want that to happen, we will have to conduct the recruitment efforts, and a good measure of the due diligence, ourselves.

Real World

With all the talk of Assembly Sq., hotels, housing, blah blah blah. Can someone with common sense help out he everyday people of Somerville who have stayed loyal to this city. Can one, just one person write a workorder to re-pave Broadway at Temple St ? Maybe a truck full of asphalt all the way down Temple to Mystic? Hey, anyone try to navigate Washington St near McGrath H'way....thats interesting ! PLEASE help the people that are here now, and stop worrying about the people that aren't even here yet........WOW, "public" service, thats different. I'm on the way to Midas for another new muffler, so I can drive my old car to my middle class job.....HEY, remember us we still live here Joe.

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