Savannahâ€s surging downtown defies downturn

The article opens:

SAVANNAH — A city center that Atlanta and plenty of other cities dream about is the reality here.

Downtown Savannah teems with tourists and college students stroll past coffeehouses and restaurants in an eminently walkable urban environment. Chocolate shops sit side-by-side with art galleries, bawdy bars and boutique stores, creating the type of seamless mixed-use environment that developers dream of manufacturing.

Though long been known for walkability, downtown Savannah wasnâ€t always this way. Sections were plagued with empty storefronts and lagging foot traffic just a decade ago. A fresh influx of tourists, a renewed focus on the “creative class” and Savannah College of Art & Designâ€s unorthodox growth strategy have led to a downtown renassaince.

Atlanta certainly doesnâ€t have the waterfront lure or historic charm of its older cousin. But the importance of a pedestrian-friendly downtown and Savannahâ€s careful cultivation of a vibe that appeals to a wide swath of residents and tourists may hold lessons.

Residents turned out in droves for Fashion’s Night Out on Broughton Street

“The economy has changed, but the plan doesnâ€t need to,” said Sottile, referencing the city squares that Gen. James Oglethorpe laid out almost 300 years ago. “It survived the American Revolution, the Civil War and the 20th Century. And now itâ€s defining sustainability in the 21st Century.”

For an upbeat insider’s view of how Savannah has weathered the downturn, take a look at Tommy Linstroth’s recent post on The Creative Coast blog: Here for the Long Haul.

In a recent column, I noted that by year’s end we could be close to full occupancy on Broughton Street again, despite the long hangover from the recession.

Sure, Savannah has lots of problems, but those who don’t dwell on the problems and who forge ahead trying to get stuff done are making dramatic positive changes to the city.

No one in Washington or anywhere else plays referee to determine which ports should handle the ever-larger cargo ships expected to traverse the Panama Canal en route to the East Coast by 2015.

“We donâ€t need a half-dozen deep-water ports on the Eastern seaboard. We just need a couple to deal with the larger ships coming on line,” said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan budget watchdog group in Washington.

“Spending all this money is clearly in the ports†and shippers†interests, but itâ€s not in the taxpayers†interest.”

Savannah and Charleston, for example, compete for the same ships and plan to spend almost $4 billion upgrading harbors, docks and terminals. South Carolina politicians, whoâ€ve plowed billions of dollars into the port of Charleston, vow to stop Savannah from deepening its river and harbor.

Savannah and Charleston of course are just two of the ports on the East Coast pushing for significant upgrades, and the full cost rises dramatically when all the East Coast ports’ plans are considered:

The port association reports that the $46 billion will pay for new or rebuilt piers, wharves, warehouses, roads, cranes and dredging to maintain channels and berths. Private terminal operators will cover two-thirds of the costs. More than $18 billion will be borne by local, state and federal taxpayers.

There’s also a fascinating analysis now available at Port Strategy, a publication for port executives: Eggs in one basket

The piece focuses largely on transshipment — i.e., the transferring of containers from larger vessels to smaller ones after they have left the Panama Canal but before their final destinations in the U.S.

From the article:

Dredging and transhipment are bumping heads in the heady rush along the East Coast to capitalise on the supposed bounty of the Panama Canal after 2014. Ports are clamouring and competing for 14.6 and 15.2 metres main channel drafts for 13,000 teu vessels while the canal is talking of transhipment, probably in the 6,000-8,000 teu range.

One indication is the construction of the new terminal at Colon (PCCP), at the Atlantic end of the canal, with a capacity of 2m teu a year. John Carver, of Jones Lang LaSalle, the development advisor, says: “Too many seaports do not currently, and may never, have the harbour depth required to take advantage of the trend towards post and super-post panamax vessels.” He sees the terminal as “further enhancing Panamaâ€s already strategic designation as one of the worldâ€s primary global transshipment hubs.”

The piece directly contrasts the additional transshipment potential with all the efforts to deepen harbors to prepare for the bigger ships.

The article also mentions the added pressure on unions and concludes with this about job creation:

The ports are now a much more important source of revenue and jobs than 15 years ago and a backlash will swiftly develop, from public and politicians, should union militancy drive traffic away.

The union will probably have to continue to compromise, accepting a loss of jobs while insisting that only its members run certain operations. As Baltimore and Bayonne have shown, terminal gates will be automated, optical character reading will be the norm and yard stacking will become increasingly remote controlled.

If passed in that region, there would be a 1% additional sales tax added that would go directly toward transportation infrastructure and transit.

Today the AJC has a really interesting piece that tackles a fundamental question: Will sales tax shorten Atlanta commutes, reduce traffic?

From the article:

As the vote approaches, the Atlanta Regional Commissionâ€s traffic-simulation computers have gamed out the 10-year showdown between the tax and its mighty foe, traffic congestion. The resulting study predicts how the referendumâ€s $6.14 billion regional project list is likely to change metro Atlantans†commutes and job prospects.

The lesson, say planners: The needle is really hard to budge.

Holding the line against decay is an accomplishment. If some spots edge toward transformation, thatâ€s a bonus. Regionwide, metro drivers in 2025 would waste 128,000 fewer hours in traffic each day than they would if the referendum doesnâ€t pass, the ARC found.

But theyâ€d still waste 1.8 million hours a day.

On average, the number of metro Atlantans able to reach job centers in under 45 minutes would rise just 6 percent by car, and about 20 percent by bus or train, if the projects are built.

The ARC study is not exactly new, but this seems a good time to cover it so extensively. The report was released in February: Travel Impacts of the Transportation Referendum.

The gains might sound slight, but 128,000 fewer wasted hours per day would mean huge things for affected residents — they’d have more time with families and friends, and more time to be engaged in other productive activities. They would presumably end up wasting less fuel and contributing less to air pollution.

At the same time, I have to wonder about the sustainability of cities like Atlanta where so many residents are so dependent on their cars and spend so much time, money, and energy in their daily commutes. Even though the TIA would be investing something around half the money in transit projects rather than road improvements, I suspect over the long run that far more transit will be needed. More importantly, unwieldy metro areas like Atlanta need to figure out how to get more workers living closer to their jobs. On the worst days, my daily commute to and from Armstrong takes less than 45 minutes — and sometimes takes less than 30. I cannot imagine how much quality of life would be reduced if that number were doubled.

I’ve got an image here from the ARC report.

I don’t know if that has been a factor in this week’s pretty big news here in Georgia that Governor Deal seems prepared for state taxpayers to foot the entire bill for the $652 million Savannah Harbor Expansion Project (SHEP), which has been approved to dredge the long Savannah River channel from 42 to 47 feet.

As I’ve previously noted, that depth will still leave the channel shallower than all the major competing East Coast ports.

And as I’ve written about ad infinitum, the depth — 42′, 47′, 48′, or 50′ — is absolutely irrelevant to the amount of cargo the Savannah port will see each year until about 2030, when the port’s capacity will be maxed out, according to the Corps of Engineers.

I don’t know whether Georgia politicians are feeling the pressure from South Carolina’s growing resolve regarding funding or whether there are simply growing concerns about the federal funding process, but yesterday’s press conference with the governor looks like it marks a turning point.

From the SMN’s Deal pledges to “do whatever necessary” to deepen harbor:

“Weâ€ll have our 40 percent, and we expect (the federal government) to live up to their commitment,” he said. “But if they donâ€t, we will accommodate accordingly.

“We wonâ€t make 2014, but weâ€re not going to let anything slow us down from this point.”

From the AP in the AJC’s Deal: Georgia will pay for port deepening if feds don’t:

Asked what would happen if the president and Congress fail to find dredging money for the harbor soon, Deal said, “We’ll spend our money.”

“We hope we don’t get to that point,” Deal said. “But it may be one of those things that, if that becomes necessary, we begin the project and hopefully get (federal) funding after the fact to reimburse the state.”

Ha ha. Does anyone really think that the federal government would come back and reimburse the state?

Of course, the state legislature just finished its session without coming anywhere near making such a commitment of money.

And Georgia legislators would need to appropriate close to another half billion dollars to the dredging project if there’s no firm federal commitment. It will be interesting to see how that issue plays out, especially with legislators from rural areas that would see no visible impact from all that spending.

I’m not quite sure of Deal’s goal in yesterday’s press conference. If it’s to try to further convince the Obama administration to pay for the project, then it would seem he just let them off the hook.

And it’s not like Georgia’s elected officials in Washington can simply turn to the old practice of earmarks. From the SMN’s Chambliss: Earmark end complicates port funding from a couple of days ago:

For years, every project of the U.S. Army Corps of Engineers passed Congress as an earmark, a process in which members of Congress simply wrote in amounts they wanted saved in spending bills for their state or district. When those earmarks became a major issue in the 2008 presidential campaign because there were never individual votes on those appropriations, Congress halted the practice.

“We are now in a post-earmark world, so that means we canâ€t go in and request it,” [Ga. Sen. Saxby Chambliss] said.

New construction is typically a driver of economic recoveries, but the combination of tighter credit because of the financial crisis and the massive overhang of existing homes — we built too many plus saw many others become distressed — could not be countered by any conventional, or politically acceptable, policy moves.

We could have done a few things differently to speed the process along and to help more homeowners refinance, but at the end of the day we were always faced with a long bottoming process.

This year, new home construction is likely to add to GDP since it will be better than last year, but it will likely still be one of the worst years of the post-WW II era.

The AJC has a really good piece today about all this, especially as it impacts Atlanta: Jobs up, but not the housing market

From that piece:

Without housing as part of the recovery so far, the job marketâ€s improvement has been slower than normal. In the past two years, metro Atlantaâ€s economy has added 68,208 jobs. Thatâ€s only 2.9 percent growth, compared to 5.4 percent growth in the two years after the recession of 1990-91.

The job rebound is real, 
but itâ€s not robust. So housing demand is not getting the boost it needs to match the still-swollen supply of homes for sale.

The lack-of-demand story has several facets.

Much of the previous demand for housing came from immigrants drawn to work in the booming economy — or to build houses. That flow to Atlanta has dried up.

Moreover, the anemic job market doesnâ€t draw young Americans from elsewhere the way it did.

And then, of course, there are many young people — and some not so young — living with parents because they donâ€t have the income or job security to live on their own.

And while household formation is key, there is one more handicap on demand, said Immergluck: Credit.

I’ll note that while Atlanta has added those jobs, in a fairly solid reversal of fortune, the rest of the state taken together has essentially added none.

The piece is well worth a read.

Despite myriad doubts raised in that 3-part series about the economic benefits, the Savannah River’s depth after dredging, and the environmental impacts (which deserved far more play than they got in the otherwise excellent series), the AJC editorial page came to this conclusion: Port Wars: Georgia canâ€t afford not to fight for port funding.

From that editorial:

More to the point, in the absence of a national strategy governing how Washington divvies up taxpayer dollars to pay for work on U.S. ports, Georgia has no rational choice but to keep rowing toward full funding of the $650 million deepening project to keep Savannah competitive. Itâ€s every state, and port, for itself until this nation gets better metrics to judge competing projects.

The editorial, written by Andre Jackson for the board, justifies this opinion by citing all of the known — and current — economic impacts of the Georgia ports. None of which would be jeopardized without dredging, according to the Corps of Engineers.

Based on the evidence, the AJC’s editorial is not a very rational one.

Today, the Charleston Post and Courier editorial board has weighed in on the AJC series. From Savannah’s dredging gamble:

The rival port of Charleston wants to deepen its shipping channel to 50 feet at a cost of $300 million-$350 million. In terms of price and environmental impact, it is clearly a better option than the Savannah project.

But in the absence of a national port development plan, it wonâ€t necessarily make a difference. Sen. Lindsey Graham, R-S.C., has endorsed such a comprehensive review proposal. Altogether, 10 ports on the East and Gulf coasts are planning similar projects.

Nevertheless, the details cited in AJC reporter Dan Chapmanâ€s series appear to bolster Charlestonâ€s case.

For example, the Corps of Engineers has predicted “no additional cargo volume through Savannah Harbor as a result of the proposed harbor deepening.”

This is in contrast to Georgia Gov. Nathan Dealâ€s prediction of “much more cargo coming in.”

I noted that same discrepancy between Governor Deal’s beliefs and the official projections.

The first subhead says a lot: “Deepened Georgia port will still be shallower than many of its rivals.” That, in a single phrase, covers much of the reason for objections about the project from South Carolina. Sure, there’s the interstate rivalry between Charleston and Savannah, but there are many S.C. officials who simply do not believe that dredging the Savannah River channel to 48 feet is insufficient to meet the demands of the future. That conclusion is not in any way supported by the Corps of Engineers’ analyses, but the Corps’ theories are being dismissed pretty widely on the Georgia side of the river too.

From the piece:

Meanwhile, most rival ports on the East and Gulf coasts are deeper than Savannah and will remain so after the Georgia port finishes its big dig. All are competing to lure more cargo.

And that’s the rub for Savannah and the rest of Georgia. Shipping lines increasingly rely upon ever more gigantic and efficient ships.

Result: The pressure on Savannah to expand — and on taxpayers to pay for the work — won’t let up.

“Never has so much been committed to a project with so many questions, so few answers and such a huge price tag,” said Steve Eames with the nonprofit South Carolina Coastal Conservation League, which is suing to stop the Savannah project to prevent environmental damage. “It’s madness.”

This part of the series deals a lot with issues of depth, of funding, and of the general difficult navigation of the 38-mile Savannah River channel.

It also touches upon some of the environmental issues:

More than a third of the project’s costs, though, are pledged to mitigate its impact on the environment. Still, green groups on both sides of the river have taken legal action to stop the issuance of water-quality permits. Chris DeScherer, an attorney with the Southern Environmental Law Center, said the deepening project “is truly pushing the envelope on what we believe the river can handle, and it could have truly significant impacts on the environment.”
Of particular concern: A loss of oxygen could kill fish.

The deeper the river, the harder it is for oxygen to reach lower depths. Fish, particularly the endangered shortnose sturgeon, would suffer. The corps and the ports authority have committed at least $52 million to ensure the river is safe for fish, including the installation of machines to pump oxygen into the water, though the U.S. Fish and Wildlife Service isn’t convinced it will work. Officials also promise nearly $33 million to restore salt marshes and to buy land to replace freshwater wetlands likely to be damaged.

Federal wildlife officials and environmental groups also worry the deepening will ruin a freshwater swath of the Savannah National Wildlife Refuge across the river from the Garden City Terminal.

Curtis Foltz, executive director of the Georgia Ports Authority, said the environmental “mitigation will actually improve the condition of the river today in many categories.” He pointed, in particular, to reduced brackishness in one of the river’s tributaries.

I’d love to see Foltz find a credible environmentalist who thinks the river’s condition will be improved by dredging.

Click here to read about and link to part one in the series.