Cleveland is getting public 100-gigabit internet connection

Building upon a legacy started by Case Western Reserve University, the City of Cleveland has launched an initiative to create one of the fastest publicly available internet services available to the public.

Linking downtown to the city's technology center in University Circle, the project will provide 100 gigabit internet service to commercial enterprises, and eventually, residents. It will connect to an existing 100-gigabit network at Case Western that links Ohio institutions and government entities together, and for the first time, the public will be able to tap into such high speeds.

"We can tell the next candidate from Silicon Valley, 'We have the first 100 gig Internet right here in Cleveland.'" And you don't.

 "The commercial Internet is being reinvented in Cleveland," said the article related on Cleveland.com. Read more here.

Some will remember a few of the groundbreaking networking projects that have germinated in this city.

In 1971, Case Western Reserve University was one of the first ten universities to be connected to ARPANet, the predecessor to the internet.

One of the predecessors to the internet as we know it was the dial-up bulletin board system. Later iterations would produce CompuServe and the more graphically friendly interface America Online. The inspiration for both of these services can be traced back to the Cleveland Free-Net, which was run by faculty at Case Western. For many years the system served as an archetype for the implementation of similar services across America.

Downtown Cleveland needs a parking tax

Cleveland city officials and developers have lately begun making noise that the city center is short over 600 parking spaces thanks to the development of the new convention center and its companion Hilton hotel.

Naturally, the need to serve an increased number of visitors with parking facilities can be viewed as a boon to local businesses, not the least of which, the parking lot operators. But what is the economic cost of all this?

We Clevelanders have learned a painful lesson about surface parking lots: they destroy the urban fabric of a neighborhood and discourage surrounding development. Below is a forty-year time lapse photo of the historic Warehouse District, as taken from the top of the Terminal Tower.

Most agree that surface parking lots in central business districts are categorically a bad thing. Land devoted to storing idle automobiles is not productive land. Dimly-lit surface lots encourage crime and kill pedestrian activity. Open land creates windswept sidewalks unpleasant for walking. Cheap parking discourages uses of pre-existing efficient transportation methods. To this end, several cities in the United States have identified the elimination of surface parking as one of their enumerated goals.

Current parking operators in town are also getting away with murder tax-wise as well. Because surface parking lots are not very given a high valuation when compared with, say, a 50-story highrise, parking lots pay magnitudes less property tax than their more developed neighboring lots. For example, owners of surface lot close to the WKYC-TV studio pay just $26,500, as opposed to the landowners of the Lakeside Avenue studio who pay a staggering $158,000 for roughly the same amount of land. Couple a low tax bill with a practically risk-free business model of selling little tickets to people for $5 per day, and one can see why surface parking is such a good business to be in today in Cleveland.

The reality is that the surface lot is costing us all money in the form of reduced property taxes to the city, higher crime, lower desirability, and the destruction of a sense of place. A surface parking lot owner is little more than a squatter, making the easy money selling small pieces of paper to solo motorists while waiting for the next building boom to increase property values. Unfortunately, when a market is composed entirely of rent-seeking squatters, that building boom never materializes.

The Golden Rule of Politico-Economic Policy

The government has a powerful tool in its arsenal to guide growth and development in the right direction. The old adage goes: if you want more of something, subsidize it; if you want less of something, tax it. Currently, downtown surface parking lots are enjoying something of a subsidy in the form of a reduced property tax burden when compared to owners of more productive, adjacent real estate. Instead of giving owners of fallow properties tax breaks, we ought to tax them just enough to make them go away.

Raise the Parking Tax: Pittsburgh case study

Pittsburgh is one of the best examples of a progressive parking-elimination policy. Its 37.5% tax on parking revenues is one of the highest in the nation. The surface parking lot is a rare sight indeed in Pittsburgh's central business district.

Clearance of slummy surface lots from highly valued land is not the only benefit of such a high tax. Pittsburgh collected over $44 million from its parking tax levy when it was implemented in 2004 in current form. 

Impact on Cleveland

Cleveland has its own parking tax, an 8% levy passed in 1995 to fund the construction of the Cleveland Browns Stadium. With a quick peak at the city budget, we can back-calculate just how much more the city will earn from a hypothetical tax hike to match Pittsburgh's 37.5% tax.

• Cleveland 2014 budget for parking tax collections (8%): $11,250,000
• Cleveland projected parking tax collections (37.5%) assuming revenues are unchanged: $52,734,000
• Projected difference: $41,484,000
• Percent increase in total revenue receipts: 8.25%

By enacting this space-saving, city-rebuilding measure, the City of Cleveland can increase its revenue to budget by 8.25% overnight in an almost risk-free move. 

How will a parking tax affect the availability and pricing of parking downtown? Generally, studies indicate that parking demad can be somewhat price elastic -- that is, consumers will more readily substitute a cheaper option when the price rises, like carpooling or public transportation. Given that parking rates are based on what the market will bear, price-sensitive consumers will substitute cheaper options like parking further away, or using the train, thus resisting parking lot operators' attempts to pass on the parking tax to the consumer.

Even if parking lot operators decided to simultaneously preserve their margins by passing on the cost to consumers, the average $5 parking spot would rise to $6.37 -- a small price to pay to put the surface lots out of business.

In the long run, parking rates will increases as the now unprofitable surface lots become redeveloped into more productive office buildings or residential units.

To recap, we will see several benefits from a parking tax increase:

• Encouraged redevelopment of surface lots into more productive uses
• Higher ridership of public transportation systems, leading to service expansions
• An increase in demand for downtown residences as people desire to move closer to their places of employment
• Increased density of the central business district
• Increases in urban tourism and streetside activity
• A decrease in crime in dimly lit, unpatrolled parking lots
• A $44 million increase in revenue to the City of Cleveland

"We city-dwellers don't like to think of parking as expensive; we prefer to think of our suburbanites as cheap."

On top of that, it will close the loophole allowing parking lot operators to pay an unfairly small share of property taxes, encourage more new construction downtown, and revive the historically high density that once characterized Downtown Cleveland.

Occupancy rates of newly opened downtown office-to-apartment conversions

The most recent residential offerings in Downtown Cleveland are getting snapped up by renters hungry to experience urban living. This red-hot market is running between 96-98% leased and developers can't produce enough units. Here's a roundup of what's been happening.

Residences at 1717

Formerly known as:
The East Ohio Gas Building

Construction started:
September 11, 2013

Construction finished:
March 2015 (estimated)

Rents: $1.25 per square foot

Lease-up rate: 65% (as of August 26, 2014)

Read more here. 

"The 9"

Formerly known as: The Ameritrust Tower

Construction started: February, 2013

Construction finished: September, 2014

Rent: $2.00 per square foot

Lease-up rate: 90% (as of September 4, 2014)

A Marriott signature hotel property will partially occupy the tower, alongside apartments, a movie theatre, several restaurants and an indoor dog park. Includes the historic and stunningly appointed Cleveland Trust Rotunda, which is slated to become a Heinen's upscale grocery store.

Read more here.

Wall Street Journal gives some love to C-town

The City of Cleveland has been fortunate enough to bask in the sunlight of the coming of the RNC and the return of Lebron James.

It seems that the latest maelstrom of events have managed to catch the all-seeing eye of the Wall Street Journal, always on the lookout for new investment opportunities. And what a comeback it's been...

http://online.wsj.com/articles/just-in-time-for-lebron-downtown-cleveland-stages-a-comeback-1409242880

Hipsters battling to rent warehouse lofts. Trendy bars, espresso shops and music venues. A funky, celebrity-chef-owned restaurant serving bone marrow and crispy pig ears.

This isn't Brooklyn or Portland. It is downtown Cleveland. Nicknamed the "Mistake on the Lake," the much-maligned city on the shore of Lake Erie has long had a reputation for crime, pollution and corruption. Over the years, Cleveland's downtown became almost a ghost town at night.

Now, Cleveland's fortunes seem to be turning around. LeBron is headed home! The 2016 Republican National Convention is coming! The Browns nabbed quarterback Johnny Manziel in the draft! There is lots of exuberance and chest thumping in Cleveland, accompanied by lofty predictions of the positive economic impacts of these events.

Read more here.

Greater Cleveland ranks 8th in nation for educated young workforce

A few weeks ago, we pointed out the growth of the college-educated young adult workforce in the Greater Cleveland area. Now, more news hits the press: a new study reveals that Cleveland rank 8th nationally in the percentage of 25- to 34-year-olds in the labor force with a graduate or professional degree.

The final ranks are as follows:
1. Washington, D.C.
2. Boston
3. Pittsburgh
4. San Jose
5. New York
6. San Francisco
7. Baltimore
8. Cleveland

That's right, we beat out Chicago, Seattle, Philadelphia and Austin.

As the fans will note, this blog's perennial anti-Columbus stance will be vindicated by this report: notable is the precipitous drop in Columbus' rank among the proportion of college grads when controlling for recent grads (by only examining the 25-34 cohort). In fact, if you don't count the throngs of non-working students living in Columbus, there is a larger population living in Cleveland.

According to the article, we're trending to become the "next Pittsburgh." Although I have no intention of developing an Appalachian accent, nor repealing our indoor smoking ban, one has to give the hill city credit for good governance and responsible county reforms which have served as the blueprint for our new Cuyahoga County executive. I have no doubt that their tackling of corruption has hastened their turnaround.

Toledo's water crisis: what's polluting Lake Erie?

Residents of the Toledo area are currently experiencing a water crisis. For the second day, Toledo's water supply has been contaminated by a toxin called microcystin, rendering the water undrinkable. The toxin is the result of yearly algae blooms in Lake Erie, caused by runoff from farming operations that contaminate the western half of the lake. Traditionally, prevailing currents in the lake send the algae to the center of the lake, leaving Toledo's water intake unaffected. However, this year, unusual weather patterns have pushed the algae bloom to the shore, turning the Lake Erie shore into a pea soup and leaving a half-million people without water.

Phosphorus is the major culprit for this bloom. Evolving commercial farming practices down the Maumee River corridor and the farms along the lake shore have led to an increase in phosphorus fertilizer runoff to these bodies of water. Unusually heavy rainfall has drenched farms and sent fertilizers straight into federal waterways. When it storms heavily, an algae bloom can almost certainly be expected to follow.

The problem is only going to get worse. Ohio has experienced a 37 percent increase in heavy rain events since 1958. Combined with the yearly world increase of fertilizer use of about 3%, what we have left is an infrastructure that is woefully lacking, unable to cope with climate change, further driving the Midwest into decline as the federal government allocates funds elsewhere.

Phosphorus and other fertilizers aren't the only issue with Lake Erie water quality. Any resident of Greater Cleveland have probably heard the term "combined sewer overflow" -- the practice of connecting storm sewers to sanitary sewers. When a region with a combined sewer overflow experiences heavy rains, the storm sewer overflows the sanitary sewer, intermingles sewage with rainwater, and the slurry mix is discharged into Lake Erie. The communities of Detroit, Cleveland, Toledo, Akron and Buffalo all contribute to the problem due to their aged and insufficient stormwater management systems. Some communites are making headway -- after being sued by the EPA, Cleveland's NEORSD has committed to invest over $3 billion in a CSO control project that basically amounts to a longer pipe to the treatment plant. There is a price tag to this effort, however -- it will cause sewer bills to rise by 13% per year for several years as the NEORSD makes its customers pay for its lack of stewardship over the lake waters.

Detroit's CSO and toxic waste discharge is probably the worst threat, and is likely contributing to today's algae bloom. In 2009, Detroit's sewage plant reported that it dumped 32 billion gallons of untreated overflows into the Detroit River, which provides about 90% of Lake Erie's inflows. Although Detroit also has a plan to build a holding pipe to its treatment plan like Cleveland, the current financial state of the city caused them to halt the project in 2009, forcing Lake Erie to continue its role as the sewage dumping ground for Detroit.

Lake Erie pollution is a national problem. Over eleven million people directly draw their drinking water from the lake. The lake's commercial fisheries comprise of the majority of the Great Lakes' $7 billion fishing industry. Our local communities are going bankrupt desperately trying to save our water supply. If the federal government doesn't step in to address Great Lakes water quality issues, we may lose our country's most valuable water resource forever.

Population bottom in sight for Cleveland metro area

The forty-year reign of population decline in the Cleveland metropolitan area appears to be coming to an end.

According to Census estimates, the Cleveland-Elyria metropolitan area lost 14 people over the 2012-2013 period.

If this trend turns out to be sustainable, the Greater Cleveland area will see its first population increase since 2000 in the 2020 decennial census. It will buck the overall trend of population decline since 1970.

Given the amount of great news and positive change that we've brought about in our region since 2010, this is cause for some cautious celebration. The press has noted that Cleveland's workforce is getting younger and more highly educated, and that the the young, educated population is on the rise in NEO. We're not out of the woods yet, though -- history shows us that the population of the metro area did briefly turn around and grew from 1991-1996. There are many signs of those go-go times that we can still remember: the "Comeback City" moniker, the opening of the Rock Hall, Jacobs Field, Key Tower, a winning baseball team, and a generally can-do attitude.

Maybe there's more to the story, though, if we look at the numbers. Let's look at the birth/death estimates for the last 30 years.

Hmm, it looks like people really like having babies around Census years. That's probably more the Census's fault for not estimating correctly, but it does look like there was a genuine baby boom of sorts in 1991-1996, which persisted beyond the odd spike year of 1991. The increased number of births probably pushed population growth over the top in those years.

Why is that important to us today? Well, unlike 1991-1996, the Census estimates do not show such a high birth rate, nor an abnormally low death rate. That means that immigration (whether domestic or international) is making the largest impact on the population growth. If people from outside the region are settling in Cleveland, that's good for all of us. It means that the country and the world beyond our region is responsible for the surge.