Raise the Hammer
Between Hamiltonians for Progressive Development and energy expert Richard Gilbert, Hamilton City Council has a great opportunity to restore an open, citizen-based program for setting goals and establishing criteria.
By Ryan McGreal
Published September 15, 2005
"When the facts change, I change my mind. What do you do, sir?" -- John Maynard Keynes
Hamilton City Council seems determined to push ahead with its aerotropolis plans, hiding behind the claim that it is only beginning the process of deciding whether and how to develop up to 1,215 hectares of farmland around Hamilton International Airport into an air transport centred complex.
If so, then why has City Council already voted to expand the urban boundary before knowing the results of its investigations? It's not enough simply to say they can always reverse their decision later.
So far, the city has studied aerotropolis from the premise that the idea will go ahead, which all but guarantees the conclusions will simply beg the questions. As Mayor Larry Di Ianni explained, "it may have been nice for people who don't believe in aerotropolis for whatever reason [for the city to draft a GRIDS proposal that didn't include the plan], but it wouldn't have been honest, though." 1
When Mayor Di Ianni says, "My hunch is that it's desirable" to build aerotropolis and then hard-codes aerotropolis into the city's planning framework, he casts serious doubt on the entire process.
City Council really seems to believe it is making the best decision for the city's future. To understand why, it may help to understand aerotropolis better.
John Kasarda, Director of the Kenan Institute of Private Enterprise at the University of North Carolina-Chapel Hill 2, is the architect behind the concept.
According to Kasarda, eighteenth century cities grew around shipping ports, nineteenth century cities grew around rail nodes, and twentieth century cities grew around highways. Twenty-first century cities will grow around airports, as people demand the speed, flexibility, and convenience of product delivery that only air transport can provide.
In the aerotropolis economy, Kasarda explains, the three As ("accessibility, accessibility, accessibility") replace the three Ls ("location, location, location").
Never mind that the eighteenth- and nineteenth-century technologies of shipping and rail still transport the vast majority of Canada's products, and that air transport consumes a hundred times as much energy per tonne-kilometre as its more prosaic conterparts.
Kasarda explains the economic factors driving aerotropolis thus: "We've all become spoiled. If we order something over the Internet we want it delivered in two days. Even if we can wait, we won't."
Suffused with the heady vapours of the 1990s' "weightless economy" that was supposed to expand forever and ever, world without end, amen, via the Internet, aerotropolis seems destined for hyperbole.
Proponents of the Hamilton plan claim it will produce up to 52,000 new jobs 3. It may be instructive that a similar claim, made in 1991 by North Carolina Governor Jim Martin, has turned out to be so much hot air.
The Kinston, North Carolina development is called Global TransPark. Linking an airport with adjacent highways, ports, and 2,300 hectares of serviced land, GTP was supposed to generate 55,000 new jobs and produce $2.8 billion dollars a year in revenue by 1998.
All the fundamentals were in place: just-in-time manufacturing, speed and accessibility, critical infrastructure, and the support of all three levels of government. Nevertheless, as of April, 2005, according to local news service WRAL, "the project has failed to land a major corporate tenant, has no manufacturing facilities as tenants and has not created a single manufacturing job." 4
Plagued by delays, cost overruns, and scandals, the GTP is only now starting to attract a few businesses, albeit nowhere close to the massive investments promised by GTP supporters.
Granted, there are significant differences between Hamilton and Kinston. They share a public commitment to airport development and nearby multi-modal transport infrastructure. However, unlike Kinston, Hamilton is a city with a diverse workforce, a university, and a college, anchors around which high-tech investments have a better chance of taking hold. 5
To make up for the remote Global TransPark location, the North Carolina government sweetened the deal for investors by spending lavishly on infrastructure and facilities and offering rich subsidies and "targeted incentives" to businesses.
However, as recently demonstrated by Toyota's decision to locate its new factory in Stratford, Ontario rather than a number of possible stateside locations that offered much larger incentives, businesses are more interested in an educated workforce and a good investment climate than subsidies. 6
To that extent, Hamilton is a more promising location for an aerotropolis than Kinston. However, even if Hamilton has a native research base and a local workforce, still missing is the other essential ingredient for air transport: cheap, abundant energy.
Last week, CIBC World Markets economist Jeff Rubin shocked the soporific business press by predicting that petroleum prices will average $84 (USD) a barrel next year, and hit $100 a barrel by 2007. 7
Exploring the economic consequences, Rubin predicted that spiking oil prices will soon start to affect global trade. "It would pretty well offset the trade liberalization efforts of the past four decades." 8
Kasarda's "three As" business model works only insofar as the energy cost of transportation remains trivial. According to Rubin's report, "All of a sudden, proximity to major markets becomes far more important in determining comparative advantage. Distance translates directly into costs." 9
(I tried to contact Kasarda to ask him about the effects of oil scarcity on aerotropolis development, but he is out of the country.)
As energy costs continue to rise, the interplay of distance and transportation mode exercise increasing constraints on accessibility. Because its costs per tonne-kilometre are the most susceptible to the price of oil, the airline industry is the most vulnerable transportation sector, and will start to fail for North American transport long before shipping and rail are seriously affected.
Giovanni Bisignani, director-general of the International Air Transport Association, articulated the industry's woes this week. "Oil is once again robbing the industry of a return to profitability. We are in emergency mode." 10
The North American airline industry lost $32 billion between 2001 and 2004. As US Airways crawls out of bankruptcy and into the waiting arms of prospective buyer America West, Delta Air Lines and Northwest Airlines are both free-falling into bankruptcy. Air passenger travel has returned to pre-9/11 levels, but the airline industry as a whole is in even worse shape than it was in 2001.
As Michael Allen, a consultant with Back Aviation, explains, "This industry was not built for $62 a barrel oil." 11 Imagine how the industry will weather $84 a barrel oil.
City Council is finally starting to take energy costs more seriously. Council recently voted to hire Richard Gilbert, an energy policy expert and consultant to the International Energy Agency, to review Hamilton's long term planning strategy in the light of rising energy costs.
Council asked him to assess Hamilton's plans for aerotropolis, public transit, city fleet, and goods movement 12 in the event that gas prices rise to the range of $2.50 a litre to $4.00 a litre.
In an August 22 Hamilton Spectator article, he warned, "We are going to see the unwinding of the air freight bonanza, entirely because of high fuel prices," and cautioned that "an economic development concept on the expansion of air freight is something you seriously have to reconsider." 13
I met with Gilbert recently to discuss his work for the city. Gilbert believes $4.00 a litre gas within the city's twenty-five year planning horizon "has a sufficient chance of happening that it should be part of your planning." At the very least, he stresses, cities should have a viable "plan B" and a way to change direction mid-stream in the development process.
Gilbert believes energy scarcity will not be a disaster for cities that plan for it. He suggested that Hamilton's aerotropolis plan, for example, could become a solar energy farm if mass air travel ceases to be viable.
Gilbert plans to recommend that Hamilton focus its energies on leveraging its existing rail and shipping infrastructure more effectively, reducing automotive traffic, and becoming a leader in renewable energy production, including solar farms and rooftop PV panels, offshore wind turbines, and natural gas production via anaerobic digestion of biosolids.
In Hamilton, aerotropolis opponents are already being painted as a rogues' gallery of anti-business activists and malcontents. However, its two most prominent opponents are both businessmen. Michael Desnoyers is the owner and CEO of a Burlington IT company, and Jack Santa-Barbara founded a company that was voted one of the "50 Best Privately Managed Companies" by the Financial Post in 1997. (See the RTH interview with Desnoyers and Santa-Barbara.)
Another prominent opponent is local lumber baron Carl Turkstra, who warns, "We're heading for another major boondoggle that will distract Hamilton from real development." 14
Desnoyers and Santa-Barbara have formed Hamiltonians for Progressive Development, a non-profit group dedicated "to articulate and support the implementation of a progressive approach to city planning and development." HPD believes Hamilton needs to plan in open consultation with the public, as was done via the Vision 2020 process in the 1990s.
Santa-Barbara, who chaired the Vision 2020 task force, observes, "We are more than one-third of the way in time from when Vision 2020 was initiated to the year 2020. We are not a third of way of meeting those goals." 15
The HPD Open Letter to City Council reads in part:
We believe it takes more than traditional approaches to economic development to generate community prosperity. The community embraced this principle and expressed it in Vision 2020 over a decade ago. This vision remains alive in the minds and hearts of many Hamiltonians despite what we see as a lack of leadership from the City in achieving it. 16
Vision 2020 has long been the poor orphan of city planning, but it was the one planning exercise that truly followed an open, citizen-based program for setting goals and establishing criteria. It's even more relevant today than when it was first drafted. Following are excerpts from the Vision: 17
All of us take responsibility for citizenship and public decision-making. As citizens, we are active participants in co-operative community planning and we take action to ensure community improvement. Government is open, accessible, efficient, effective, and participatory. Policies, plans, strategies and operations implement sustainability.
Hamilton is a model for other communities in the way in which we integrate short-term economic benefits, long-term environmental and social costs, and indirect economic costs in our evaluation of public and private initiatives.
Rural and urban areas are designed in ways that maintain community character, respect our cultural and natural heritage, and satisfy people's needs and desires.
Urban development occurs within firm boundaries. Green corridors bring nature into the city, giving people easy and convenient access to the open countryside, natural areas and continuous public open space along the bay shore and lakeshore. Architecture, green building technology and environmental design are commonly used to create neighbourhoods that are models of energy-efficiency, waste-reduction and respect for nature.
Rail service brings people to Hamilton for recreation and work, and makes travel to other cities and regions easy and affordable. Our regional transportation system supports both our economy and environment. Rail and marine services offer efficient movement of goods and services, giving our businesses and industries a competitive edge.
Firms find a competitive advantage in being located in an attractive, safe and healthy community and operating at the forefront of energy efficiency, pollution prevention and control and material re-use and recycling. Environmental health and safety is a priority in the workplace.
New jobs are created in sustainable businesses that build on the community's strong academic, commercial, industrial, and cultural resources.
Agriculture is supported as a community resource and a vibrant part of the local economy which makes a valued contribution to our overall quality of life. All citizens recognize prime agricultural land as irreplaceable. Strong policies and programs ensure its continued use for food production.
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