Larry Hogan Paving his Path to the 2018 Election

 

Governor Larry Hogan of Maryland had a major campaign event last week. With all the trappings of a political rally, he revealed his “plan” to spend $9 billion to widen three of the State’s major highways. Hogan’s announcement needs to be seen more as a multi-layered bid for reelection than a major transportation policy initiative.

The timing of the event, the list of specific projects and the initiatives that were not part of the plan add up to a well-conceived launch of his 20018 campaign to win a second term as governor.  What it did not do, however, is present a coherent route to an improved transportation system in Maryland.

Start with the splashy $9 billion price tag.  You can easily visualize a campaign ad that features that figure as its centerpiece.  The inconvenient truth is that neither the eventual cost nor the source of the funds is nearly as clear as Hogan has suggested.

First of all, in his plan, the funding comes from neither the federal nor the state government.  It is, instead, a public/private partnership, taking advantage of legislation passed by the Maryland General Assembly when they envisioned a Democrat sitting in the Governor’s chair.  In exchange for a significant share of the revenues to be produced by the new toll lanes that Hogan is planning to have built, private developers will be asked to front the money for the projects.

Will he find private financing?  Hard to know.  The next formal step in the process is for the State to issue a “Request for Interest.”  Besides not knowing if there will be sufficient interest to allow the three separate projects to move forward, there’s no guarantee that the terms that the Governor and his people assumed when they put together the announcement will be acceptable to potential developers.

A second unknown is what the three projects will actually cost.  The $9 billion estimate is the result of taking the average cost per mile of new highway construction and multiplying it by the number of miles of new lanes to be built.  Does that average figure take into account right-of-way acquisition?  Does it take into account the challenges of building next to existing roadway?  Does it take into account places where there is little or no excess space adjacent to current roads?

Even if all those questions have easy answers, the reality is that there hasn’t been a major construction project in the history of major construction projects that didn’t end up costing more than the original projections.  Will those overruns be the responsibility of the developer or of the State?

The additions to the Maryland section of the Washington Beltway, I-270 and what is currently known as the Baltimore-Washington Parkway will all be toll lanes.  That approach is not unprecedented.  Consider a section of I-95 north of Baltimore as well as the Inner-County Connecter.  Additionally, the Virginia section of the Beltway near Fairfax has toll lanes.

What will the relationship be between these new toll facilities and the existing ones?  Who will set the level of tolls on these new facilities?  How much do we know about the impact of the existing toll roads on non-toll road traffic?  The campaign announcement provided little or no information on these “details” which could go a long way to determining how successful this new initiative will turn out to be.

There is another more overtly political dimension to the Governor’s highway announcement last week.  The same chief executive who called the Baltimore Red Line a boondoggle and cancelled it has yet again snubbed the State’s largest city in his transportation priorities.

None of these project provide significant benefits for City residents. It’s clear that Hogan doesn’t expect many votes from that jurisdiction and would, actually, prefer to use Baltimore as a punching bag for his more conservative supporters.

What makes the decision to favor roads over mass transit even more significant is the Governor’s claim that he will be a fierce advocate for locating the new Amazon headquarters in Baltimore.  The disconnect between actions and words is unlikely to be missed by Jeff Bezos.

These observations don’t mean that there isn’t a case to be made for the roads Hogan is proposing.  It is likely to be a highly popular political gambit.  On the other hand, that the new lanes will actually ease congestion, based on past history, is highly dubious.  They will probably be over capacity the day the ribbons are cut.

Making this announcement one year before the 2018 election means that voters on Election Day will only know what Hogan has promised rather than what he has delivered.  In light of his incredibly thin record of accomplishments this far, it makes a lot of sense for him to go bold at this point.  Beyond good politics, however, the outcome is not going to be apparent for a long time.

 

 

Who Gets to Protest?

 

At one level, the furor precipitated by Donald Trump’s twitter attacks on professional athletes who kneel during the national anthem is a huge political distraction. While his losses pile up and the promised winning is nowhere to be seen, the President, as he so often does, has tried to change the subject.

His tirades, containing more than a tinge of racial overtones, certainly appeal to his political base. But they are also attracting some Americans who might not normally support him but agree on the importance of national symbols.  That fact alone guarantees he will keep up the attacks for quite some time.

Meanwhile, all the commentary on social medial and elsewhere that there are more important issues to be discussing–the threat of nuclear war with North Korea, the fate of yet another Republican effort to repeal the Affordable Care Act, an administration tax plan that will further exacerbate inequality in this country, a ransacking of environmental protections, and so much more–is exactly correct.

Yet, on the other hand–and there is always at least one more hand to consider–the right of citizens who happen to be professional athletes to protest racism in this country is not exactly a trivial issue.  Americans give up some rights when they join the U.S. military, but they certainly don’t relinquish their basic freedoms when they step on a football field or a basketball court or any other sport venue.

The constitutional issue is not a complicated one despite Trump’s bellowing.  That you could be fired from your job for expressing a political point of view is totally un-American.  That you are labelled a “son of a bitch” by the President is beyond despicable.

Trump’s behavior doesn’t surprise me.  In fact, despite his capacity to constantly further demean his office, nothing that he does should be seen as a surprise.  It’s just Trump being Trump.

What is dismaying, however, is that so many Americans have come to accept his ignorance, bullying and generally erratic actions.  He has contributed to a coarsening of politics which has made rational discourse, compromise and problem solving harder and harder to achieve.  It didn’t start with Trump, but he certainly put his foot on the accelerator.

I’m trying to understand why so many Americans are so disturbed by Colin Kaepernick’s protest or by that of large numbers of NFL players this past Sunday.  They weren’t engaged in violent protest.  They weren’t even engaged in civil disobedience, which generally involves being willing to accept the consequences of breaking a law that you believe to be unjust.  None of them burned a flag or trampled on one.

Rather, what we saw was a symbolic protest.  Let’s be clear.  The flag is not the same as our country or as the members of the military who fight  to defend us.  It is a symbol.   To assert, as Trump and others have done, that the players were disrespecting the country or the military is nothing but demagoguery.

As an American, you have every right to disagree with their actions, to criticize them, to boycott NFL games if that is the way you choose to express your political views.  Conceptually, those actions are no different from what the players did on Sunday.

Ken Burns’ newest documentary on the Vietnam War is particularly relevant to this debate.  Supporters of that tragic mistake used as one of their tactics questioning the patriotism of critics of the war and arguing that, somehow, their opposition was illegitimate.  In fact, those critics were right and the defenders of the war policy were tragically wrong.  We were lied to, the war policy was based on fallacies piled upon falsehoods covered in secrecy.

At a time that we have a president who blatantly disregards truth, fact and science, it is more important than ever not only to allow dissent, but, indeed, to encourage it.  Nothing could be more patriotic, more fundamentally American, than that.  Even those who disagree with the tactics of NFL players last Sunday should be vigorous defenders of their right to engage in those tactics.

No one was harmed.  It is actually ironic that those on the political right in this country invest enormous energy in criticizing what they call “political correctness.”  Their position on the NFL protests is merely another form of insisting on conformity that they would otherwise condemn.  Get over it.  There really are life and death issues facing the country.  Choosing to protest during the playing of the Star Spangled Banner is not one of them.

Amazon HQ2 Skirmishes

 

Let me start by saying that Jeff Bezos has not yet responded to my offer to help with site selection for his new headquarters. My comments are not based on inside information, but reflect only my own observations. On the other hand, they are not influenced by a personal or professional stake in the outcome.

The war of words that broke out this week between the Baltimore Sun and Prince George’s County Executive Rushern Baker, on the other hand, demonstrated yet again that where you stand depends on where you sit. The last daily paper standing in Baltimore accused Baker of stabbing the City in the back by promoting his own proposal for the new Amazon headquarters rather than supporting Baltimore’s Port Covington bid.

The Sun editorial can best be described as snarky and misguided. If the City fails to land the Amazon project, it won’t be because of a competing bid from Prince George’s County. Given that this is a national competition, both these proposals have to be seen as long-shots at best– probably true of most of the bids that will be submitted.

In fact, the Sun’s attack on Baker could well end up backfiring and hurting the Baltimore bid.  It comes across as petty and parochial, hardly the kind of global, inclusive environment that Amazon prides itself on and is undoubtedly seeking.

Rather than whining about Baker’s effort, City advocates should be focused on putting together the best possible package they can. At the end of the day, there will be negotiations between Amazon and, in all likelihood, several bidders. Either Baltimore City or Prince George’s County would, in such an eventuality, be strengthened by being able to point to other assets within Maryland that would benefit an Amazon facility located within the State.

Both contestants have significant obstacles to overcome.  While Baltimore is close to an international airport, its mass transit system is far from outstanding and has been the subject of ongoing disputes between city residents and the State. However, the success of Under Armor, the presence of numerous institutions of higher education and available land in Port Covington are all assets.

On the other hand, its national reputation has taken a real hit in the last couple of years with continuing stories about crime, drugs, poverty and police misconduct.  Unless Amazon views the headquarters decision as an opportunity to “rescue” Baltimore, the odds are very long indeed.

One curiosity of the Port Covington proposal is that it has created an odd mix of bedfellows.  Governor Larry Hogan, Comptroller Peter Franchot and Baltimore County Executive Kevin Kamenetz, with the first two often in loud public disputes with the third, have all come out in favor of the location.  Still, Amazon might be concerned about Hogan’s general antipathy to the City and his tendency to use it as a whipping boy for political gain.  Would Bezos make a calculation on the Governor’s chances of being reelected?

With respect to any Prince George’s site, the threshold question is whether Amazon would be willing to settle in a suburban location.  While Prince George’s is certainly an urbanized county, that’s not the same as being a city. Access to two major airports, DC metro and, eventually, the Purple Line, are all positive features.  Having a close relationship with the University of Maryland at College Park is also a plus, particularly if that campus ended up receiving the $1 billion in added support that State Senator and gubernatorial candidate Rich Madaleno has proposed.

Still, the competition is likely to be fierce and neither Maryland proposal bears much resemblance to Amazon’s Seattle environment.  Does Bezos want a totally different sort of second headquarters or does he want to try to replicate what he already has?

The list of prospective bidders is a long one.  Denver has been seen by some analysts as a leading contender, but that’s as much guesswork as anything I’ve written.  Chicago, Detroit, Boston, New York, Atlanta?

How about Philadelphia, the other location I know a lot about?  At this point, the City is considering three different possible sites, and Wilmington is also in the mix.  Unlike the Maryland skirmish, this one has not yet involved public name-calling, but it’s still early.

One of the Philadelphia locations seems to me to offer a particularly intriguing set of characteristics. The site being discussed is adjacent to the 30th Street train station and to the campuses of both the University of Pennsylvania and Drexel University.  It is 20 minutes from the airport and is served by a subway line, several trolley routes and buses.

There’s no question that this location is urban.  Philadelphia has a vibrant and thriving Center City with lots of cultural attractions, but it also has many of the persistent problems of older metropolitan areas.  The most troubling is the highest rate of residents living in poverty of any major U.S. city.

Does Amazon have an algorithm for factoring in all the calculations needed to select the location for its new headquarters?  It certainly does for making suggestions on what books I should buy next.  Or will this be a highly personal decision made by the Bezos?

Chasing Amazon HQ2

 

Jeff Bezos will soon be confronted with a fascinating decision. Public officials all over the country are claiming that they can provide the perfect site for Amazon’s new second national headquarters.  And who can blame them if they engage in a little hyperbole. After all, the winner of this sweepstakes is looking at the prospect of 50,000 new jobs and being home–or at least partial home–to one of the world’s leading tech giants.

The  announcement that the company was looking for a second headquarters site included a set of selection criteria sufficiently broad to encourage a lot of applicants.  Chief among those criteria are a highly educated workforce, access to good transportation and location in a major metropolitan area.

If applicants have visions dancing in their heads of becoming the next Seattle–a booming tech center–they might want to take a close look at the characteristics of that city which have made it so appealing to Amazon.  There’s actually a bit of circular reasoning involved since Amazon has clearly helped transform Seattle even as it has thrived in the atmosphere of the Pacific Northwest location.

I recently spent several days there and, as a result, suspect that it won’t be as easy to appeal to Bezos as it might appear from the selection criteria.  Seattle is home to a large major research university, the University of Washington, as well as numerous other institutions of higher education in the Pacific Northwest.  It’s also true that Amazon has attracted lots of bright, ambitious employees from all other the country, indeed all over the world.

Access to good transportation certainly includes having a major international airport. But transportation within the city also matters. Seattle’s mass transit is more buses than rapid transit, but it helps that the core of the city is not terribly large.  Riding buses to Seattle attractions, we saw lots of casually dressed and relatively young workers arriving around 10:00 am each morning.

Amazon HQ1 is located in the heart of Seattle.  Would the company really consider a suburban location?  Perhaps, but it would be a significant departure from the model that has developed in Seattle.

Amazon is such a behemoth that its arrival in a second headquarters city will help shape the future of the place.  This is more than just lots of new jobs, although that in and of itself would be transformational for most cities.  Amazon may well prefer that kind of dominant role and may, as a result, avoid a location like New York City where it would just be part of the crowd.

My guess is that the overriding factor in the decision that Bezos ultimately makes will revolve around quality of life for employees.  Again, think of Seattle as a model.  Progressive political environment, lack of extreme weather, cultural amenities, easy access to the outdoors, casual lifestyle.

Based solely on that perspective, Amazon HQ2 would most likely end up in Portland or Vancouver.  That’s probably not going to happen, although it wouldn’t be impossible.

Then the question becomes what locations meet the basic criteria and also provide an attractive quality of life.  The Internet is flooded with educated as well as wild guesses about the likely winner of this megabucks challenge.

Many contestants will approach the issue with a very traditional economic development bid.  What tax breaks and other incentives can be packaged together to appeal to Bezos?

Past history has shown that some benefits offered to lure companies to a particular state or city have in fact exceeded the value of having them there.  Cities with fragile tax bases have sometimes given away years of tax revenues in order to attract a new business.  Some of those businesses have failed or moved when the benefit period was over.  How much to offer is a very tricky calculation to make, often driven as much by political considerations as economic ones.

One of the candidates for the Democratic nomination for Governor in Maryland in 2018, State Senator Rich Madaleno, has come up with one of the few truly creative and innovative proposals for how to attract Amazon.  Madaleno has promised, if elected, to invest $1 billion in the University of Maryland, the state’s flagship research university, to enhance its ability to be a working partner with Amazon.

I have no idea whether Bezos will take the idea seriously, but it certainly is more responsive to the logic of where he wants to take Amazon in the future than receiving a bundle of tax breaks.  There will of course be lots of other proposals with various elements that go beyond tax incentives.  The race to win the Amazon HQ2 sweepstakes looks like a once in a lifetime opportunity that should bring forth some really good ideas.  If Bezos is lucky, he will have difficulty making a choice.