Lowell's

Lowell's wins 2014 Readers' Choice Award

For the eighth time - including each of the past six years - Lexington Herald-Leader readers have voted Lowell's their "Favorite Auto Repair Service" in the 2014 Readers' Choice Awards.  

We also came in second place in the new "Favorite Oil Change" category. 

We are humbled and honored to have the support of our wonderful, wonderful customers. We are also very grateful to have such thoughtful and skilled employees. We promise to keep improving our service to keep deserving your appreciation.

Lowell's won the Repair Service category even when matched up against other great finalists who have national backing, multiple locations, and who service multiple vehicle brands (Tire Discounters and S&S Tire).

In addition to the past six years, Lowell's was also the top pick for Herald-Leader readers in 2007 and 1994 - to our knowledge, that's every time the auto repair category has been up for voting.

Thank you so much,
Rob, Suzanne, and your Friends at Lowell's

Lowell's selected for Angie's List 2013 Super Service Award

Lowell's wins Angie's List Super Service Award for Auto Repair in Lexington

We are extremely humbled by the awards that customers have chosen for us over the years.

We have won 7 Readers' Choice Awards from Herald-Leader readers as Favorite Auto Repair Shop. We've also won 9 Ace Magazine Best in Lex Awards as Favorite Mechanic.

Now we are pleased to add a new award to that great list!

Lowell's has earned the Angie's List 2013 Super Service Award for the outstanding things our customers have said about our service on Angie's List. 

Not all online reviews are equal. Angie's List collects reviews from real people on a variety of services, including reviews of auto repair service in Lexington.

According to Angie's List, “winners of this award have met strict eligibility requirements, which include an 'A' rating in overall grade, recent grade, and review period grade; the company must be in good standing with Angie’s List, have a fully complete profile, pass a background check and abide by Angie’s List operational guidelines.”

“Only about 5 percent of the companies Lowell's competes with in Lexington are able to earn our Super Service Award,” said Angie’s List Founder Angie Hicks. “It’s a mark of consistently great customer service.”

We are so honored to serve great customers and to have had those customers make this award happen for us. Thanks for all of the wonderful things you say and do for Lowell's!

A better auto repair invoice

Every customer deserves to understand exactly what we've done while servicing their vehicle at Lowell's. Over the past few months, we've introduced a new invoice design which helps do just that. We built it from scratch to make  it easier to see just what you are getting with every visit to Lowell's.

After looking at a lot of invoices, we think ours is the best invoice in the repair industry.

But why care about your mechanic's invoice? Because the invoice tells you a lot about your mechanic, and whether they want you to be informed about your car and their work. Here's what our invoice does for you:

Easier Reading

Click image to magnify

We've placed basic information about you and your vehicle along the left side of the invoice, while the main part of the invoice shows details about this visit to Lowell's.

Making Our Work Clearer for You

We've organized the core of our invoice into three sections to help you see what we did (and what we did not do). A dark red bar visually marks the beginning of each section.

Your Service Request outlines the reasons you brought your car into Lowell's.

What We Did contains the details surrounding the work we've done to your vehicle.

What We Recommend tells you about items we noticed during your service which might need your attention soon, along with estimates for addressing each issue.

Job by Job

Lots of repair places lump their work into a big jumble which makes it hard for customers to figure out what they're paying for. Many dealers, for example, take the labor from several separate jobs and smush it all together into a single big labor charge. That makes it really, really hard to decode what they're really, really charging you for.

At Lowell's, we want you to see exactly what you are paying for. For each distinct job in our What We Did section, we show you our labor (in bold) and every part used (indented). These items are grouped together by job - a Lubrication Service, say, is clearly separated from other work, like a Brake System Flush. Our charges for each component of a job are also clearly shown.

The Best Warranty in the Business

We really stand behind our work here at Lowell's. Most of our repair work carries an unmatched 3 year, 36,000 mile warranty - three to twelve times the warranty of most dealers and other shops for the same work.

Whenever we do work for you which carries a warranty, your invoice will clearly show that with a green "warranty box", which describes the duration of the warranty for that particular work. 

Because we also note the date and your vehicle's mileage on each invoice, you can easily see whether a repair is still covered. (And if it is, we'll fix it, of course.)

You Can Plan Ahead

When we notice things during your service which might need your attention, we try to prioritize those items for you in the What We Recommend section of the new invoice.

Related Post: How we make recommendations at Lowell's.

We color-code each recommendation to help you understand its urgency: Red means that the item represents a potential safety issue, and should be addressed immediately; Orange means that the item could damage your vehicle soon if left untreated; Yellow denotes items which you should address to keep your vehicle operating smoothly; and Gray indicates items which might be due according to your vehicle's mileage (usually these are items we can't confirm the need for with a simple visual check and which might have been done elsewhere).

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Our new invoice clarifies our work, and helps you plan how to keep your car running long into the future. We think it reflects the unique 'spirit' of Lowell's toward automotive repair: open, direct, clear, and easy to understand.

As always, we'd love to know how we can do better (with this invoice or any other aspect of our service). Let us know what you'd like to see in the comments below.

Your mechanic on Mechanic Street

Lowell's is Lexington's only mechanic on Mechanic Street.

Many of you know that Lowell's has been serving Lexington for more than 30 years from the same location at 111 Mechanic Street. We love being your mechanic on Mechanic!

While we like to joke that the street was named for Lowell's, we've long been curious about where the name came from.  "Mechanic" seems like a pretty new term, and we wondered if the street was relatively new or if the name had been changed from something else.  

So we were surprised to learn that it has been called Mechanic Street for nearly 200 years!

Today, "mechanic" is commonly used to refer to someone who works on machinery.  Back then, it had a somewhat different usage: "mechanic" referred to a variety of skilled tradesmen.  Essentially, "mechanic" was used in the same sense that we use "artisan" today.

Records from an 1818 directory of Lexington show an Elisha Babcock as Mechanic Street's only resident. In that directory, Babcock was listed as a "carriage maker".

200 years later, we'd like to think that we're doing a pretty good job of keeping up Mr. Babcock's legacy of helping Lexington move forward!

If you're curious about the data, Richard E. Stevens of the University of Delaware compiled historical datasets from many U.S. cities.  I found Elisha Babcock in the 1818 Lexington Directory (Excel file) and 1818 tax rolls (DBF file - can be opened with Excel).  I also found RootsWeb's Fayette County resources and maps to be useful in my research.  Access Geneology lists many other Kentucky directories, as well.  

Tracy Briggs (Re)Joins Lowell's

The Lowell's family is growing!

We are thrilled to announce the return of a familiar face to Lowell's.

Tracy Briggs, a long-time technician for Lowell's and for Lexus of Lexington, returned to Lowell's just yesterday!

We think Tracy will make a terrific addition to our already-terrific crew, and will help Lowell's be even better and faster!

Please join us in welcoming Tracy back to Lowell's!

When your car still isn't right

Hi everyone!  Keith here and today's topic is a difficult - but important - one.  

What do you do when there is a problem with your car soon after you pick it up from Lowell's? Do you bring it back or do you take it somewhere else?   

While you may be tempted to take your vehicle elsewhere, we hope that you will bring it back to us so we may address your concern.  If we ever let you down, we ask for the chance to make things right.  

I can honestly say everyone here is dedicated to doing the job right the first time. Sometimes, though, we might miss something or may not communicate something that you need to know.  

As such, we'd like to correct any discrepancy there may be.  We try to resolve any issues with customers -- however large or small.   

If you bring your vehicle back to Lowell's, I can promise we will do our best to make it right.  If we made mistakes during your service, we can usually resolve the problem at no extra cost to you.  If for some reason you still are not satisfied, please contact Rob personally.  

We appreciate the trust you place in Lowell's, and will always work hard to keep it.

And now for the hard part...

Critics have identified three interrelated categories of problems for CentrePointe since it was introduced to the public in 2008:

1. Context.  Will it 'fit' with downtown Lexington?
2. Financing.  Will it be built?
3. Viability.  If built, will it work?

And CentrePointe has consistently failed across all three dimensions.  It didn't fit Lexington.  It couldn't be financed.  And it wasn't viable.

As the project has changed trajectory in the past few months, it is worth re-examining these critiques.

Context
The first three iterations of CentrePointe were uninspired and uninspiring.  The designs seemed devoid of place - as though they could be plopped down on any block in any random city - Nashville, Atlanta, Phoenix, Detroit.  There was nothing about the designs which was particular to Lexington.

The bland and imposing structures were also the architectural equivalents of bullies - crowding Main Street, unwelcoming to pedestrians, overshadowing nearby buildings, and oblivious to the surrounding fabric of downtown.  

The heavy-handed designs seemed to mirror the developers' if-you-don't-like-it-well-that's-just-too-damn-bad demeanor.

In recent weeks, however, we have begun to see much more hope for CentrePointe.  With help from the mayor, the developers engaged Chicago's Studio Gang Architects (SGA) to reconceive the site. And the developers have interacted much more with the public and the press - including a quasi-interview with the developer which utilized our questions from an earlier post. (We'd like to ask some follow-ups!)

Jeanne Gang presented her firm's initial architectural concept for the CentrePointe block to a packed crowd at the Kentucky Theatre last week.

It was a great design.

And like most great designs, it poses elegant solutions to several problems at once.  Here are a few highlights which caught our attention:

• Mass.  SGA departed from previous monolithic designs, and redistributed the mass of the project across the site.  The new asymmetric distribution allows the design to accomplish a number of goals.  Breaking the project into components also opens the possibility that the site might be developed in phases - perhaps as financing becomes available.
• Main Street.  Along Main Street, SGA proposes having 6 distinct building designs which would mirror the varied designs across the street and which would also help maintain the organic, eclectic feeling of a typical Main Street.
• Inclusiveness.  To help ensure distinct building designs along Main Street, SGA has selected five local architects to design 5 of the 6 buildings on that side of CentrePointe.
• Plays Nice.  Unlike the earlier "bully" designs, this one seems to play nicely with the surrounding city. SGA used "shadow studies" to assess how the 30-story tower might throw shadows over nearby buildings.  Those studies helped them decide to place the tower near the corner of Upper and Vine Streets, where the building would be less overpowering on the surrounding blocks.  
• Circulation.  This design also departs from earlier versions in that it promotes pedestrian circulation with the surrounding city and within the site, with ample open spaces and public areas.  It is able to accommodate parking access for cars without significantly disrupting pedestrian access.
• Lexington.  Studio Gang are trying to give the project local meaning - connecting it to our history, stories, and environment.   And while I'm skeptical of the real utility of "the connected separateness of paddocks" or "the porosity of limestone" as sources of inspiration for the new design, SGA is the first CentrePointe architect who seems to realize that it will be built in a unique setting within our unique city.  

Studio Gang have crafted this particular design to this particular spot in Lexington, and the result is very encouraging.  Lexington may finally have a signature project worthy of the center of our city.

Financing
The changes in the nature of the CentrePointe project don't alter the economic environment for getting the project funded.  

While now armed with a world-class architect and a world-class design, the developers are still faced with the enormous challenge of finding funding while the commercial real estate market remains in severe recession.  

Investors will be far less interested in the aesthetics of the project than its financial viability as an investment vehicle...

Viability
Our central criticism of CentrePointe over the past few years has been its economic viability.  We've spent a lot of time deconstructing the economics of CentrePointe, and whether it can 'work' as an economic entity.

In short, the project wasn't - and still isn't - realistic.

Each of the four components of the project (condominiums, hotel, retail, and office) demanded exceptionally high prices and required exceptionally high occupancy to be successful.

Despite the inclusion of SGA in the design of CentrePointe, the developers won't be able to achieve the levels of occupancy needed to make the project successful.  (Both prices and occupancy were far in excess of the Lexington market.)

The project also needed the infusion of Tax Increment Financing (TIF) from the state and city to help pay for 'public' improvements to the site (including sidewalks, parking garage, storm sewers, and other infrastructure).  

The city and state would issue TIF bonds (debt) to pay for today's improvements, and would pay them back with interest by harvesting future tax revenues coming out of the CentrePointe site.

And, as we have shown before, the CentrePointe TIF - based on incredibly optimistic assumptions - never pays back the city or state for their investment.  In essence, TIF amounts to corporate welfare for the developers.

And no knowledgeable bond analyst would ever recommend the CentrePointe TIF to his or her investors.  It would never pay them back.

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Over the past three years, CentrePointe seemed like a lose-lose for Lexington: We lost if the project wasn't built; we lost if it was built, too.

CentrePointe was a bad idea.  And it was badly executed.

The new approach to designing CentrePointe is different: This new design incorporates so many great ideas, and it seems to function so well with downtown Lexington.  

Studio Gang has helped transform the threefold criticism of CentrePointe - It doesn't fit Lexington; It can't be financed; It isn't viable - into a twofold critique.  CentrePointe still can't be financed.  It still isn't viable.  

While still deeply skeptical about the project's economic viability (and its value for Lexington), we find ourselves pulling for this vision of the project - just a little.  

This CentrePointe seems like a good idea - maybe even a great one.  And that's the first time we can legitimately say that about CentrePointe.  

But great ideas are the easy part.  

Now, the community's attention must turn to the hard part of CentrePointe: Execution.

The transition to execution poses new challenges for the developers and for Studio Gang.  

How will the project find funding?  Can they conceive a more realistic plan which pulls back from today's more ambitious design?  Can they make a 20-story tower work, for instance?  Can they craft an economic model which doesn't rely so heavily on TIF?  Can they build smaller parts of the project today, and finance the rest when the economy improves?

The future of downtown might rest on the answers.

UPDATE 7/18/2011: Jeff Fugate has an excellent post on what the new design of CentrePointe accomplishes over at ProgressLex.

The Promise (and Predicament) of CentrePointe

Since CentrePointe was initially proposed over three years ago, the project has been marked by fantastical bluster, broken promises, poor designs, and, ultimately, a failure to build.  All of which was compounded by the developers' riteously indignant, arrogant, and combative attitude when challenged on the wisdom of CentrePointe.

A couple of years ago, after declaring CentrePointe an impossible-to-build failure, we outlined some basic principles for reconceiving the (still) empty block in the heart of our city.  Here's an abbreviated excerpt from that post:

• Create a vibrant destination which attracts residents, workers, and tourists.
• Make that destination a distinctive place which no other city has.
• Create public and private spaces within the destination.
• Balance the types of uses within the development.
• Ensure local businesses have significant presence.
• Ensure that the space is well-integrated with the surrounding community.
• Build it soon.

After three years of apparent tone-deafness by CentrePointe's developers, the prospects for such a "signature place" seemed quite dim.

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On the sweltering third floor of the old courthouse yesterday, an overflow crowd of some 300 Lexingtonians received a tantalizing glimpse of a new approach to the CentrePointe project.

And that approach represented an enormous (and refreshing) step in the right direction.

With the encouragement of Lexington's new mayor, the developers engaged Jeanne Gang of Chicago's Studio Gang Architects (SGA) to rethink the CentrePointe block.

On Thursday, she present preliminary site design concepts for the CentrePointe block.  And she presented a marked departure from the old approach to CentrePointe.

Gang's presentation and the developers' new approach are refreshing in a number of ways:

• Design. SGA abandons the "Fortress Lexington" approach of the old CentrePointe.  By breaking the project into independent components with different volumes and designs, SGA will avoid the imposing and monolithic designs offered in previous iterations of CentrePointe.
• Openness. By showing preliminary design concepts and inviting public input on them, CentrePointe promises to be a much more open project.  The developers are even inviting local architects to design the Main Street components of the project.
• Humility. Gang showed her work and her thinking while it was still in progress, while it was still incomplete.  Exposing this level of uncertainty takes a striking degree of humility and confidence - for both the architect and the developer.  Whereas previous iterations of CentrePointe were presented as a fait accompli to be adored by a passive audience, SGA's version promises to be a shared community treasure which we might be able to design together.  In this more humble regime, once-adversarial relationships might transform into more-cooperative ones.

The mayor and the developers and SGA are to be commended for crafting this new approach to CentrePointe.  

The chances for creating a unique, signature place for Lexington went way up yesterday. And the developers deserve some credit for allowing that to happen.

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Despite the new approach to designing CentrePointe, a number of nagging issues remain for the tortuous project.

While Gang's site design breaks up the monolithic tower of previous CentrePointe concepts, it appears to maintain the overall square footage and volume of the last iteration of the project.  If the project is roughly the same size, it should be roughly the same cost - around $200 million.

And if the developers have had difficulty lining up financing for the past three years, what will allow them to line it up now?  The commercial real estate market remains deeply depressed, and it isn't clear that such abundant premium space would find tenants in Lexington.  The business model issues we identified early in the project haven't fundamentally changed.

Is it possible that the new design will be so revolutionary, so inspirational, so great that investors and tenants will line up around the CentrePointe block to get in?  Perhaps.  We'd be thrilled.  But we doubt it.

The $200 million price tag is also important because that is the minimum required to qualify for tax increment financing (TIF).  TIF allows cities and states to allocate future incremental tax revenues to finance today's public improvements related to new economic development initiatives.  

In CentrePointe's case, the city and state would finance about $50 million in improvements - a parking garage, sidewalks, storm sewers, etc. - around the project, and they would hope to recoup that investment from new taxes generated by CentrePointe.  In previous analysis, we've found that the CentrePointe TIF is highly problematic, and that it is doubtful that the city or state would ever get their money back.

Even though the new design direction is encouraging, several other aspects of the project are still unresolved.  Is the project the appropriate scale for Lexington?  Can it find willing tenants? Can the developers nail down financing?  Is the TIF worth the up-front expense?

The developers find themselves in a dilemma: If their project falls below the $200 million mark, it will be much more realistic to finance and to find occupants.  But it will lose the $50 million boost from TIF financing.  

If the project comes in over $200 million, it is much more difficult to finance and occupy, and the opportunity for financing the project in the next 5 to 6 years looks grim.  (The TIF agreement between the Kentucky Economic Development Finance Authority and the city specifies that the $200 million be spent by January 2015).

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We applaud the developers' new, more-open approach to designing CentrePointe.  Bringing Jeanne Gang and SGA in to rethink the site is a welcome departure from the past three years. As frequent critics of CentrePointe and its developers, we're very encouraged by the new direction of the project.

But because the economic challenges to the project linger on, we'd like to see a more open, more flexible approach applied to the execution of the project as well.  Perhaps the project could be built progressively or in stages, to allow for further construction as new financing becomes available. Perhaps it could be downsized to multiply financing options.  

If - and this is a big 'if' - the developers can rethink their business model the way they've begun to rethink the design, the future of CentrePointe may be bright indeed.

UPDATE 6/6/2011: Graham Pohl now has a fine post up on an architect's perspective of the new CentrePointe design and process over at ProgressLex.

The Trouble with Consultants

In the wake of the scandal surrounding Angelou Economics and their "recycled" economic development plan for Lexington, there have been a number of calls for developing a more homegrown economic development strategy.  

These include Tom Eblen's thoughts on local knowledge and leadership, John Cirigliano's project-based approach, and our own ideas about extending the work of the mayoral transition teams.

In response to these calls for a more local economic development approach, I've noticed counter-memes emerging.

• One argument contends that we need consultants to fight insularity and to provide a valuable outside perspective.  
• Another - in a particularly egregious defense of the indefensible - contends that this is what creative professionals do, and shame on those who called out Angelou - they destroyed a civic foundation of teamwork and trust.

I think these arguments are mostly wrong, and that they mostly distract us from taking the reins of our own economic development.

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I'm pretty jaded when it comes to consultants.

I've managed a wide range of consultants throughout my career: industrial designers, research agencies, brand consultants, business strategy consultants, operations consultants, and even internet consultants at the height of the dot-com bubble.

I've engaged with enough consultants over the past 15 years to notice distinct patterns:

• Consultants play "follow the leader".  Every industrial design consultant starts by deconstructing what Apple does.  Business strategy consultants start with Google.  Or GE.  Or Proctor and Gamble.  They consistently take the leader in a category and dangle it in front of the client like red meat.  The implication: "With us, you can make products like Apple.  You can grow like Google.  You can mint money like P&G.  Just hire us and we'll share that 'secret sauce'."
• Consultants tell clients what they want to hear.  A few consultants throw some early jabs to get a client to sit up and listen - "Here's why your marketing sucks..."  Ultimately, though, they calibrate their recommendations to what they think the client wants to hear.  What they deliver are bland, unobjectionable, safe ideas which don't really threaten the status quo.  "You can be wildly successful without discomfort!"
• Consultants position for the next engagement.  The most successful consultants are always angling for their next big score.  They deliver big, fat, visually-stunning reports loaded with aspirational recommendations which seem reasonable enough, but which neglect any significant detail on how to execute what they recommended.  Because execution is something they would be glad to help you with, for an additional fee.  They promise the 'secret sauce', but never actually provide the recipe.
• Consultants recycle.  Relentlessly.   Once a consultant comes up with a 'big idea', they don't usually isolate it to a single client.  They leverage that idea over and over again, across their business.  They might customize or repackage their big idea for each client, or they might just make it a signature 'product' which they patent or trademark.  About eighteen months after we rejected an industrial design, for example, we'd see elements of that design pop up in another client's products.  Many of the presentations and reports we got from consultants were 70% to 90% 'boilerplate' - stuff which could have been used for any of their clients in any industry.

Not every consultant follows these patterns, but enough do that these behaviors are fairly predictable.  If consultants are so predictable, why do so many people work with them?  There are a couple of unfortunate reasons.

First, consultants can provide a kind of political cover for difficult decisions: "I'm not recommending layoffs, the consultant is..."  Their 'independence' and 'objectivity' make the consultants' recommendations seem to carry more weight than when those same recommendations come from the people who hired them.

Second, and often related, is that consultants help us look busy when we're tackling a difficult problem.  They signal to others that we're taking action: "Our consultant is looking into that."  In these cases, the appearance of action seems more important than the production of results.

Consultants can, indeed, provide a valuable outside perspective.  Often, they've seen a lot of diverse examples of smart stuff that others are doing, and they bring those best practices to their clients.

But consulting engagements perform best when consultants augment and enrich the client's work - when the clients have already done their homework; They fail when the client abdicates their work to the consultant. 

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Given my jaded perspective on consultants, I wasn't too surprised when Ben Self exposed the Madlibs-style, fill-in-the-blank consulting work done by Angelou Economics in their "Advance Lexington" strategy for economic development. 

Angelou fit a lot of the consultant patterns.  

• They recycled reports they had created for other cities.  
• They played "follow the leader", holding out their work in successful cities like Austin and Boulder with the implicit promise that Lexington could be like them.  
• They also told their clients what they wanted to hear - recommending a much more prominent role for report sponsor Commerce Lexington (which is partly subsidized by Lexington taxpayers) in Lexington's economic development.  That gives Commerce Lexington "cover" when it requests increased public funding; After all, it isn't Commerce Lexington's idea...

The problem for Lexington is that we attempted to have the consultant do our work for us without doing our own homework first. We can't expect to get great economic results when we outsource our economic development strategy to others.

We had folks whose job it was to produce such a strategy.  They just didn't.  They abdicated their responsibility to a consultant.  And that's not acceptable.

The important question: Why didn't Lexington already have a strategy for economic development before we engaged Angelou?

Lowell's Joins Local First Lexington

Here at Lowell's, we have long supported buying goods and services from small, local businesses to spur Lexington's economic development. 

We believe that buying from local businesses keeps more of Lexington's money at home - helping to create jobs and greater opportunity here.  (See more of our rationale in our "Local First" post.) 

So - in a long-overdue step - we are pleased to announce that Lowell's has now joined Local First Lexington. 

So... what is Local First Lexington?

Local First Lexington is an alliance of nearly 200 independent, Lexington-owned businesses, aimed at celebrating and promoting buying locally-produced products.

If you're interested in buying more local goods and services, please visit LFL's directory of great local businesses.

On Compromise

Last night, Congress passed the $900 billion tax compromise reached between President Obama and Republican leaders.  

In the end, progressives and conservatives alike lambasted the deal.  And that might be a very good thing.

I'm no fan of the bonus tax cuts for the wealthy that Obama conceded to congressional Republicans; Despite Republican claims, those cuts fail to create significant job growth.

Lost in much of the analysis over what Obama conceded, however, is just how many bigger concessions he won back from Republican leaders, as Ezra Klein points out with this chart:

Unproductive and unneeded tax cuts for the wealthy make up only one-eighth of the compromise. The other seven-eighths of the deal are much more stimulative to our economy and to job production.  

In essence, this tax deal is a second "stimulus" which is much-needed at this stage of our fragile economic recovery.

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During the Constitutional Convention in Philadelphia in 1787, representatives of each state teetered on the knife's edge between walking away from the proposed Constitution for what they might have to give up, and giving up important principles (and power) in order to gain something better, stronger, and more resilient.

While the present compromise is not nearly as momentous, it does remind me of what Benjamin Franklin - then 82 years old - said when addressing that convention in September, which galvanized the representatives into agreement:

I confess that there are several parts of this constitution which I do not at present approve, but I am not sure I shall never approve them: For having lived long, I have experienced many instances of being obliged by better information, or fuller consideration, to change opinions even on important subjects, which I once thought right, but found to be otherwise. It is therefore that the older I grow, the more apt I am to doubt my own judgment, and to pay more respect to the judgment of others. Most men indeed as well as most sects in Religion, think themselves in possession of all truth, and that wherever others differ from them it is so far error. Steele a Protestant in a Dedication tells the Pope, that the only difference between our Churches in their opinions of the certainty of their doctrines is, the Church of Rome is infallible and the Church of England is never in the wrong. But though many private persons think almost as highly of their own infallibility as of that of their sect, few express it so naturally as a certain french lady, who in a dispute with her sister, said "I don't know how it happens, Sister but I meet with no body but myself, that's always in the right - Il n'y a que moi qui a toujours raison."

In these sentiments, Sir, I agree to this Constitution with all its faults, if they are such; because I think a general Government necessary for us, and there is no form of Government but what may be a blessing to the people if well administered, and believe farther that this is likely to be well administered for a course of years, and can only end in Despotism, as other forms have done before it, when the people shall become so corrupted as to need despotic Government, being incapable of any other. I doubt too whether any other Convention we can obtain, may be able to make a better Constitution. For when you assemble a number of men to have the advantage of their joint wisdom, you inevitably assemble with those men, all their prejudices, their passions, their errors of opinion, their local interests, and their selfish views. From such an assembly can a perfect production be expected? It therefore astonishes me, Sir, to find this system approaching so near to perfection as it does; and I think it will astonish our enemies, who are waiting with confidence to hear that our councils are confounded like those of the Builders of Babel; and that our States are on the point of separation, only to meet hereafter for the purpose of cutting one another's throats. Thus I consent, Sir, to this Constitution because I expect no better, and because I am not sure, that it is not the best. The opinions I have had of its errors, I sacrifice to the public good. I have never whispered a syllable of them abroad. Within these walls they were born, and here they shall die. (...) I hope therefore that for our own sakes as a part of the people, and for the sake of posterity, we shall act heartily and unanimously in recommending this Constitution (if approved by Congress & confirmed by the Conventions) wherever our influence may extend, and turn our future thoughts & endeavors to the means of having it well administered.

On the whole, Sir, I can not help expressing a wish that every member of the Convention who may still have objections to it, would with me, on this occasion doubt a little of his own infallibility, and to make manifest our unanimity, put his name to this instrument.

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Progressives hate what was conceded in this deal.  So do conservatives.  And everyone should be concerned over how much this deal grows our national debt.

Both sides wanted their leaders to stick to core principles - no matter the cost.  But that's demogoguery, not democracy.  It isn't how our country works.  It isn't how our country was formed.

"Compromise" has become a foul word in this political season.  

But it is the very heart of a functioning democracy.

Small Business Saturday

It should come as no surprise to our regular readers that Lowell's supports small local businesses.

Local businesses reinvest in our community's economy.  Small businesses create most of our nation's jobs.  We have frequently promoted many of the small businesses you can visit in our thriving North Limestone neighborhood.  

So we really like the idea of declaring the Saturday after Thanksgiving (November 27th) as "Small Business Saturday".

Small Business Saturday is a day to patronize small local businesses for holiday shopping needs (which distinguishes it from cousins "Black Friday" on November 26th and "Cyber Monday" on November 29th).

The initiative is nominally sponsored by American Express, but Small Business Saturday has taken on a decidedly grassroots form, with many small businesses seizing upon the opportunity to appeal to local customers.

Small Business Saturday won't make or break local businesses, and it shouldn't substitute for patronizing great independent businesses on an ongoing basis (such as outlined in The 3/50 Project). But it is a great way to celebrate the many small businesses which help grow the local economy.

While Lowell's will be closed on Small Business Saturday, we encourage our friends and customers to use the day to buy the things that they need from the small local businesses that they love.

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Need some ideas for great local businesses in Lexington?  Take a look at business listings at Local First Lexington and Kentucky Proud for some great ideas.

A Small Business Perspective on Jobs and Tax Cuts

In late July, one of our technicians left our award-winning auto repair shop to return to his hometown.  He has been our only employee to leave since I bought the business over two years ago.  

His departure raised a question for us that a lot of small businesses have faced in this economy: Do we accept the risks of hiring a new employee to replace him?

The answer, I think, is instructive for many of the economic and political issues facing our country.

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Impatient voters punished Democrats two weeks ago for not giving enough focus to our nation's sputtering economy after the near-implosion of 2008.

With our nation's unemployment rate hovering just under 10% (and 'real' unemployment much higher), voters sent a clear signal that they want government to focus on creating jobs and growth.

According to the Small Business Administration [PDF Link], small businesses like ours make up 99.7% of employer firms, and account for two-thirds of new job creation.

Both Republicans and Democrats have reiterated the importance of getting small businesses hiring to get our country's economy moving again.  

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This week, congress reassembles in the wake of the elections to consider extending temporary tax cuts  implemented under the Bush administration in 2001 and 2003.

Republicans want to extend the entirety of the Bush tax cuts, which would add $5 trillion to the national deficit over the next ten years, and vastly expanded the national debt over the past decade.

Democrats want to extend the tax cuts as well, but would let them expire for the highest-income households which make over $250,000 per year.  The Democratic plan would cost almost $700 billion less than the Republican plan over the next ten years.

Republican leaders claim that giving tax breaks to top earners is critical to generating the new jobs that the economy needs to recover.

Unfortunately, they're wrong.

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Just how would the Republican proposal affect small business jobs? A hypothetical example from my industry might help us get to an answer.

A very healthy auto shop might have annual sales of $1,000,000 - an amount which would put it well into the top 5% of shops nationwide.  If that shop is exceptionally well-run, it might see net profits of 30%, or $300,000.

For those few shop owners in such a fortunate situation, what are the implications of extending the Bush tax cuts for those making more than $250,000?  Under the Republican plan, that shop owner would save an incremental $1,500 in taxes over the Democratic tax cut plan.  

As a small business owner, I'd happily take the $1,500.  But such a small amount would give me zero incentive to undertake the much greater expense - and risk - of hiring a new employee.  

So while extending the Bush tax cuts would certainly line my pockets, they would do little to encourage me to create jobs in my small business.    

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Some observers might contend, as incoming House Budget Committee Chairman Paul Ryan did on CNBC yesterday, that most job growth comes from larger "small" businesses and that my example above isn't really that relevant to job creation.

So let's pretend, for a moment, that our hypothetical business is actually 10 times as large as the example above: It has annual sales of $10,000,000, and its owners see profits of $3,000,000 per year.  

Under the Republican plan, that business owner would save an additional $125,000 in taxes over the Democratic tax cut plan.  Now, this seems like an amount which might let a business hire a couple of additional employees.

But while the tax savings might be enough to hire additional employees, it provides little actual incentive to use that newfound money to hire in an uncertain economic environment.  

A tax windfall fails to meet a prudent business owner's criteria for making a hiring decision. Business owners don't hire because we have extra money laying around. We don't hire out of charity. We hire when there is more work to do.  

Again, I'd happily take the $125,000.  But I'd also know that a drop of just 1% in my sales - a fairly likely risk in our current economy - would wipe out my tax savings.  If I were that business owner, I'd stash my cash as a hedge against an uncertain economy.  Net effect: no new jobs created.

The criteria for hiring is scalable: Whether a business has $1 million, $10 million, or $100 million in sales, the decision to hire is based on needing employees to meet demand - not on having spare cash supplied by tax cuts.

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In my shop, the economic slowdown - coupled with a nearby street closing for almost a year - contributed to a sales decline of over fifteen percent from our record 2008 levels.  The declines would have been worse if not for our solid reputation, our increased community involvement, and our vigorous marketing.

In fact, our business has more customers than ever before; It's just that each one is investing far less in their cars.  We see a lot more folks putting off needed maintenance and hoping that their cars won't break down.

And as I look at replacing the technician who left in July, this drop in sales has been my primary consideration.

An extra $1,500 from tax cuts wouldn't induce me to hire a new technician.  Neither, frankly, would an extra $125,000.  

I'll hire when our core business is better - when there is more work to do - and not just when I have a convenient pile of cash.

And to make our business better, we need more customers with more money - and more willingness to spend. 

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To encourage small business hiring, policymakers need to encourage spending.  In particular, they need to encourage the kind of spending which reverberates through the economy as that money is spent and respent in the form of wages, further buying, more wages, and - ultimately - hiring.  

This respending feedback loop is key to creating enough demand that businesses like mine will start to hire again.  It is key to driving our nation's self-sustained economic growth.

The fatal flaw of tax cuts for the wealthy is that the cuts don't foster respending at a scale which drives significant hiring.  As seen in my examples above, a large chunk of each dollar given out in tax cuts to the wealthy is stowed away in savings - thereby stunting the benefits to the economy.

Mark Zandi, Moody's Chief Economist, has found the same phenomenon in his research (Full PDF Here).  

Tax cuts to the rich don't yield as much overall economic benefit because the wealthy don't need to (and won't) spend that money, thus diminishing the virtuous feedback loop.

Government spending which goes to those in need - the poor, the unemployed, state governments - does get respent (often out of necessity) and the feedback loop is much, much stronger than with tax cuts.

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If I'm looking at my bank account, the tax cuts seem like a fantastic idea. More money for me!

But if I'm looking at my business, my employees, their families, and my community - I want the government to focus on assisting those in need.  I want the government to encourage buying (especially from small, local businesses).  That's what will help my business for the long term. That's what will - ultimately - encourage me to hire. 

Lose the tax cuts.  Give me customers instead.

The Next Best Thing

We love our awards.

 Over the years, Lowell's has been voted "Best Mechanic" eight times by Ace Weekly readers, including a win in 2009.  

We've also been voted Readers' Choice "Favorite Auto Repair Shop" four times by Herald-Leader readers, including the last three times the repair shop category has been available: 2007, 2009, and 2010.

Our awards are vital to our growth as a business - they tell prospective customers that our current customers really like doing business with us.

So you might imagine our disappointment when we found out that Ace dropped the "Best Mechanic" category from its 2010 Best of Lex [PDF link] awards.

When the Best of Lex awards came out recently, however, we were in for a pleasant surprise:

"Some 'classic' categories are retired this year to make room for new ones to rotate in — best veterinarian and best mechanic always generate a frenzy of votes, for example — but Chevy Chase Small Animal and Lowell's (respectively) have won so often that it was time to let the readers vote for something new..."

While it isn't quite as prestigious as a 'win', having a category retired because we've won it so often is still a considerable honor.

Thank you so much for supporting us (and voting for us!) over the years.  And here's hoping the "Best Mechanic" award makes a return in 2011.

Lowell's Wins 2010 Readers' Choice Award

Lowell's is honored to win our third consecutive Readers' Choice Award for "Favorite Auto Repair Place" in voting submitted by Lexington Herald-Leader readers.

Lowell's won the voting even when matched up against other finalists (our good friends at Auto Tech and S&S Tire) who service all brands or who have multiple locations around the region.

We are grateful to our loyal customers for voting for us.  We are especially grateful to our very talented employees who earn this award through their thoughtful hard work and excellent service every day.

Thank you.

The CentrePointe Scam

We've long been critical of the economics of the proposed CentrePointe development just a few blocks away in downtown Lexington.  

One of the least understood portions of the project is the element known as Tax Increment Financing, or TIF.

In essence, TIF allows cities and states to allocate future incremental tax revenues to finance today's public improvements related to new economic development initiatives.  

The recent changes to the CentrePointe project invite a reassessment of the CentrePointe TIF program.

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CentrePointe's TIF program would use future new tax revenues from the CentrePointe development to fund about $50 million in projects around CentrePointe.

These public initiatives would include:

• A new underground parking garage beneath Phoenix Park;
• Renovating Phoenix Park;
• Renovating the old Fayette County Courthouse (now the Lexington History Museum); and,
• Providing new infrastructure including storm sewers, sidewalks, and - according to the most recent renderings - a pedway which seems to cross Upper Street to (?!) McCarthy's Irish Pub.

The state and city would issue some $50 million in 30-year bonds (i.e., public debt) to fund the initiatives.  Over the course of the next 30 years, our governments would pay out some $100 million in principal and interest to the investors in the CentrePointe TIF bonds.  The state would cover three-quarters of the total payments (about $72 million), and Lexington would cover the rest.  

Then, the state and city would hope to use new taxes generated from CentrePointe over the next 30 years to offset the $100 million spent paying bondholders.

But is this a good investment of taxpayer dollars?

To get an informed answer, we need to dive deep into the business fundamentals of the CentrePointe TIF project.

(Note: What follows is financially 'geeky', but it is also critical to understanding how our money is invested.)

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We have two major concerns with the CentrePointe TIF:

1. The valuation methodologies used by the state and city are fundamentally flawed, and are not the standard for evaluating a long-term investment.
2. CentrePointe will not generate the promised revenues, due to incredibly optimistic business model assumptions.

Let's look at each of these concerns in succession.

Valuation Methodology
As far as we can tell, there have only been two evaluations of the public impacts of the CentrePointe project:

• A late 2008 assessment of CentrePointe done for Lexington by Morgan Keegan & Company which expected $211 million in total tax revenues over 30 years; and,
• An Economic Research Associates (ERA) report [PDF Link] done last summer for the state's Cabinet for Economic Development, which expected nearly $70 million in tax revenues from CentrePointe for the state alone.

Of the two, ERA's assessment is the more recent, more complete, and - in our judgment - more reliable.  It is also the one which the state used to approve the CentrePointe TIF.

But, as mentioned above, there are deep flaws in how both of these reports valued the public benefits stemming from CentrePointe.

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Businesses make investment decisions all the time: products, facilities, acquisitions, marketing, and so on.  

When businesses evaluate an investment project, they look at how much they put in up front ('the investment') versus how much they can get out over time ('the return').  

But when looking out into the future, most businesses lower the value of future earnings.  In other words, the promise of $1 million next year isn't worth as much as $1 million in-hand today.  A lot of things can happen in the course of a year - inflation, disasters, competition, market shifts.  And $1 million two years from now is worth even less, because there is even more risk of something happening.

Typically, stable and established businesses use an annual rate of around 10% to 'discount' future earnings.  For example, if an investment generates a return of $1 million today, that is valued at $1 million.  Simple enough.  But if it promises another $1 million next year, that is worth just $900,000 to us today (i.e., 10% off of $1 million). The promise of $1 million two years from now is worth just $810,000 today, and earnings further in the future are given even steeper cuts in their valuations.  So the promise of $1 million 30 years from now is worth just $42,000.

This 'discounted cash flow' method is the same standard that Warren Buffett and other investors use to evaluate how much to pay for an investment, and it is the financial equivalent of 'a bird in hand is worth two in the bush'.

Depending on the kinds of risks an investment faces, the discount rate might be significantly higher.

When we purchased Lowell's, we used a 20% discount rate.  Even though Lowell's was a solid business with loyal customers, we faced a number of uncertainties.  Would we lose key employees? Would customers stay away in droves?  Would things fall apart? Those things didn't happen, but they posed very real risks as we purchased a new business.

With an especially speculative venture like CentrePointe, we would usually apply an annual discount rate of 20%. Or more.

So what kind of discount did Morgan Keegan and ERA apply to CentrePointe's promised future tax revenues?  

Zero.

Instead of incorporating the risks inherent with a project like CentrePointe, these assessments valued CentrePointe as if there were no risks at all. In these scenarios, the faint promise of $1 million in 2040 from CentrePointe was just as secure as having $1 million in our wallet today. 

This is especially problematic, because so much of CentrePointe's tax revenues were promised so far in the future, when a conventional valuation methodology would steeply cut their value.

For instance, in Morgan Keegan's assessment, nearly half of CentrePointe's tax benefits - over $100 million - came between 2030 and 2040. 

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The original report [PDF link] from Economic Research Associates (the state's CentrePointe consultant) estimated that 30 years of tax revenues from CentrePointe would generate some $70 million for the state - while the state's expenses for CentrePointe projects ran $72 million.  So ERA projected that the state stood to lose $2 million on the CentrePointe TIF.  

And that estimate derived from the faulty methodology we described above.

So what does the CentrePointe TIF look like when we apply standard valuation techniques?  Let's be generous, and apply the 10% annual discount rate reserved for stable investments to our analysis of CentrePointe.  We'll also use ERA's estimated stream of future tax revenues.

Using a more conventional valuation of CentrePointe's incremental taxes, they're only worth about $25 million to the state, and an estimated $32 million overall.

In reality, the city and state would incur $50 million in public debt today for the CentrePointe TIF bonds, and only get back $32 million of that in future tax revenues.  CentrePointe TIF is a poor investment which loses $18 million for taxpayers.

And that is even before we look at the stability of CentrePointe's overly-optimistic business model...

Business Model Assumptions
A distinct pattern emerges in ERA's assessment [PDF link] of the CentrePointe project for the state. At numerous points throughout the document, ERA hedges: they express skepticism about some element of the project, but then use the developer's assertions about the project as 'proof' of its ultimate viability.

How ERA evaluates CentrePointe's million-dollar condominiums is typical of these hedges (we've added emphasis in red):

"ERA approaches new luxury condominium projects in 2009 with a healthy degree of skepticism. [...] Bank financing for new condominium construction has seized up. There is a very high degree of uncertainty in residential markets, especially high-end condominiums, across the U.S.  And in recessionary times, introducing a luxury product where it has not been present before represents a considerable risk.

"However, there are two reasons for optimism in the CentrePointe Tower. First, the developers have pledged an all-equity transaction. This greatly reduces the risk that loans would have to be renegotiated in the middle of a deal, that payments would be missed, or that financing would be pulled at the last minute. While it does not eliminate all risks associated with financing, an all equity transaction greatly reduces the risks and complications of development in this difficult market.

"The second reason for optimism is that the developers have reservations for 64 units, out of 91. While a reservation is less a commitment than a purchase contract, this is still an impressive level of sales for this stage of the process. With two-thirds of units reserved before construction begins, the developers have demonstrated there is demand for these types of units."

Both of the reasons for optimism that ERA cites come directly from the developer's tenuous assertions.

The 'all-equity transaction' refers to the developer's dead mystery financier, whom the developer had claimed was putting up cash (the 'all-equity' part of the transaction) to back the development. Last week, the developer admitted that he was forced to pursue more conventional financing.  Using ERA's logic, this would greatly increase the risks to the project's success.

The 'reservations for 64 units' refers to the handshake deals that the developer claimed for the old CentrePointe design.  As we have previously documented, 64 'reservations' stretches the bounds of credibility in a market which only sold 10 million-dollar properties in all of 2008. And last week, the developer trimmed the number of condominiums in the new design from 91 to 63.

(Update: As Beverly Fortune notes, the numbers haven't gotten better for million-dollar residential properties: Only 8 sold in Lexington in 2009, and only 5 have sold thus far in 2010.)  

With both 'reasons for optimism' now rendered impotent, how would ERA evaluate CentrePointe's condominiums today?

ERA's skepticism extends to every other major part of the project:

Offices: "Estimated rents of $26 per square foot would be about $6 per square foot higher than the current highest quoted rate in the market – a number that may be difficult to achieve given current market conditions and may require some concessions."

Retail and Restaurant: "ERA believes that $27 per square foot is an aggressive ask in this market, especially in downtown."

Hotel: "With a first year ADR [room rate] of $175 and RevPAR [revenue per available room] of $103 at 53 and 45 percent higher than any comparable properties in the market at the end of 2008, these metrics may be optimistic. [...] Projected hotel occupancy as well, is projected by the developer to be nearly 10 percentage points higher than the 2008 year-end average of 61.9 percent."

In evaluating the entire project, ERA says

"Traditional bank financing would be extremely difficult, if not impossible, to secure for a project of this scale at a time like this. [...] If the project’s equity financing remains intact and the investors are satisfied with the projected return, then ERA does not see a market barrier to feasibility of the project."

How would ERA evaluate CentrePointe's feasibility now that the 'equity financing' has fallen through?

Not well, we suspect.

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We took the liberty of re-running ERA's estimates with more realistic (but still quite generous) assumptions:

• The developer estimated that he would spend about $250 million on the old CentrePointe design. While there are few specifics, he has used a figure of $200 million for the new design.  We adjusted construction spending down by 20%.
• The developer assumed they could get higher occupancy levels (over 71%) even though they were charging 50% more per night than the Lexington hotel market.We adjusted hotel occupancy to market levels - a more reasonable 62%.
• The developer has claimed to be able to sell two-thirds of their condominiums at the outset of the project. We adjusted expectations down to about 20% at the outset, and we never expect full occupancy of the 63 condos without drastic reductions in property price.
• The developer assumes a $26 to $27 per square foot rate for its office, retail, and restaurant leases.  We've adjusted those assumptions down by about 20%. Such an adjustment still leaves these CentrePointe spaces as the highest rents in the Lexington market.

These adjustments to the CentrePointe business model have a number of economic ripple effects: Lower spending, lower sales, lower profits, fewer jobs created, lower quality of tenants, and lower tax revenues.  

Using these more realistic assumptions, our estimate is that CentrePointe will generate incremental state and local taxes worth only $21.5 million ($16 million of that would go to the state, and the remaining $5.5 million would go to Lexington).

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As long-time critics of the CentrePointe project, we hear a common counter-argument: that CentrePointe is a private development on private property and that we and our community leaders have no business questioning the project.  

CentrePointe is a private development on private property.

But CentrePointe also has a number of externalities that make it of public interest. It would require significant public investment in new infrastructure and facilities to support the new development.

And while TIF projects are targeted to public improvements, the reality is that about half of the $50 million publicly-financed CentrePointe TIF projects would most directly benefit CentrePointe's developer: the parking garage, sidewalks, pedways, and other infrastructure. 

It is highly unlikely that the developer would go forward with the project without the public subsidy of these elements - despite his prior threats to do so.

A second TIF reality is that the public bears a disproportionate part of the risk of the new development: In return for putting up $50 million of our money today, taxpayers are promised an unreliable trickle of future tax payments over the next thirty years.

So despite what many of CentrePointe's defenders - including Lexington's mayor - say, CentrePointe's TIF program does amount to a public subsidy of the private development of CentrePointe.  

And when we apply a realistic analysis, that CentrePointe TIF subsidy is a truly awful investment. 

In return for committing $50 million in new debt (and paying another $50 million in interest on top of that), taxpayers get a return of just $21.5 million.  

Local government would lose almost $7 million on its $12 million investment, while the state would lose $21 million on its $37 million investment.

And despite the developer's indignant none-of-your-damn-business attitude toward public inquiry on CentrePointe, it clearly is a public issue with public dollars at stake.  The CentrePointe TIF is little more than outright welfare for the developer and his project.

The CentrePointe TIF is a spectacularly bad public investment, and every attempt should be made to rescind the TIF approval.

The proposed redesign of CentrePointe should be a time for community leaders to rethink the community's investment in CentrePointe.

At a time when our public budgets are under extreme duress, now is not the time to spend extravagantly on a wildly speculative private development such as CentrePointe.

No responsible business would make this kind of investment.  Our governments shouldn't either.

The Tombstone at CentrePointe

We last wrote about CentrePointe one year ago this week.  

In Tangled Webb, we wrote about the folly of the CentrePointe development, capping a series of posts chronicling our growing skepticism about the downtown Lexington project's financing and viability.

We then stopped writing about CentrePointe because there wasn't much left to say.

Four months later, Business Lexington reprinted Tangled Webb, prompting an aggressive and condescending response from CentrePointe's developer, in which he simultaneously attacked us, bloggers in general, and Business Lexington.  He asserted that we knew "little about commercial real estate development or the potential and viability of this project".  

Time would tell.

New v. old CentrePointe designs

A New CentrePointe?
Yesterday, finally admitting that his financial backing had failed and that his initial design wasn't viable, the developer submitted a smaller design for CentrePointe to the Courthouse Area Design Review Board (CADRB).

The new tombstone-shaped design (shown at right, superimposed over the older design) is 210 feet shorter than the one that the CADRB had previously approved.

The project still proposes a 237-room J.W. Marriott, along with office and retail space.  The upper tiers of the project would house 63 high-end condominiums (scaled back from the originally-proposed 91).

The developer asserts that "progress is being made" on "more conventional financing".

What is the CADRB?
Within Lexington's crazy-quilt of planning bodies and agencies, the CADRB is a five-person board commissioned by the Urban County Council to oversee a small portion of downtown called the Courthouse Area Design Overlay Zone.  The CentrePointe site falls within this irregularly-shaped zone.

In 2008, the CADRB approved the developer's demolition of several long-neglected-but-historic buildings on the site - including Morton's Row, which had some of Lexington's oldest commercial buildings.  In June 2008, the CADRB approved an initial design for CentrePointe, issuing an "authorization permit" good for one year.  The CADRB  then approved a modified design again in November 2008.  

On July 8th, 2009 the developers sought - and received - an early extension to their November 2008 authorization permit.   That third permit expires less than 30 days from today.

The Overlay Zone is intended to "encourage growth and redevelopment in the downtown area, while preserving and protecting the unique features and characteristics of the area."  As outlined in its bylaws, the CADRB has 5 mandates:

• promote those qualities in the environment which bring value to the community;
• foster the attractiveness and functional utility of the community as a place to live and work;
• preserve the character and quality of Lexington’s heritage by maintaining those areas which have special historic significance;
• protect investment in those areas;
• raise the level of community expectations for the quality of its environment.

Since initial approval, the CentrePointe site has been, by turns, a pit of rubble, a dust bowl, a pond, and, now, a horseless horse pasture with huge signs heralding how CentrePointe is "Coming Soon".

By issuing demolition and construction permits for the CentrePointe site, the CADRB failed on every one of its own mandates.  The development has failed to bring value to the community.  It has failed to deliver the promised 900 jobs.  It has failed to preserve the character and quality of Lexington's heritage.  The fantastical proposal never had the right scale or proportion for the Overlay Zone. Along every dimension, CentrePointe has been a collossal failure.

In light of that multidimensional failure, now is the time for the CADRB to take corrective action.

New design, same old problems
While scaled back in height, the new 'Pointe-less' design for CentrePointe is no less problematic than the old one.  It fails to address some of the project's deep, long-standing flaws. These include:

Financing: While the developer asserts that progress is being made on new funding, this is actually a step back from previous assertions that funding was already in hand.  On June 4th, 2009, the developer assured the Lexington Forum that he had two ready sources of funding if his dead mystery financier's estate didn't come through.  Yesterday's application for extension made it clear that those sources failed as well - if they ever existed at all.  

Capital flows to the most promising investments, even in a difficult economic environment.  The fact that the developer has yet to secure funding for CentrePointe speaks volumes about its quality as an investment.

Business Model: The developer has continually asserted that he has a ready list of tenants for the property.

But there are enough problems with his business model assumptions to call the viability of the entire project into question.

• Analysts hired by the developer assumed that the J.W. Marriott hotel could achieve higher occupancy rates - at start-up - than surrounding hotels even though the Marriott would charge 50% higher room rates.
• While the number of million-dollar condomimiums has now been scaled back to 63, that is still far too many for the Lexington market to absorb (when only 10 million-dollar properties sold in all of Lexington in 2008).  
• The one retail prospect that the developer has named as 'interested' in the project wasn't really that interested.

Vague Assurances & Broken Promises: The developer has offered many claims - but little substance - with regard to the project's viability.  He has repeatedly decommitted from previous promises.  When challenged, the developer usually responds by playing either victim or bully - and, sometimes, both at once.

It is time to openly challenge the developer's overreaching claims and blithe assurances.

Scale: CentrePointe's proposed tower has never had the appropriate scale for the historic character of the Overlay Zone.  The CADRB's approval of the initial designs and subsequent re-approvals were mistakes.

Now is their chance to undo those mistakes.

Accountability for CentrePointe
Before issuing a fourth permit, the CADRB needs to require the kinds of accountability for this iteration of CentrePointe that was missing in the project's earlier phases.  

They have a responsibility to ensure that our community does not end up with - in the words of former Councilmember Don Blevins Jr. - a "vertical Lexington Mall".

When the developer presents CentrePointe's new design to the CADRB on June 30th, the board should do the following:

Ask the tough questions.  Especially the ones which weren't answered the first time.

• Does the developer have financing in hand, or is he just 'working on it'?
• What, exactly, happened to CentrePointe's previously 'rock-solid' financing?
• Can the developer really build the design being considered?
• What is the business model for this property?  Will that model really work?
• Is this design really consistent with the unique character of our downtown?

Require documentation.  Don't accept the developer's word at face value.  His proven inability to deliver on previous promises mean that he should be required to document the stability of his financing and his business model before any design is approved.  

Rethink prior approvals. As mentioned above, the CADRB made a mistake by approving the old design of CentrePointe.  Don't just rubber-stamp the new 'tombstone' design.  Make sure it works with the surrounding community.

The Overlay Zone exists for a reason.  On June 30th, The CADRB should fulfill their duty to ensure responsible economic development within the Zone which preserves the unique character of our downtown.

The old design of CentrePointe didn't do that.

The new one still doesn't.

The CADRB should reject the application for extension.

It is time to put a stop to the empty promises.  It is time to stop enabling this kind of overreaching incompetence.  It is time to end the delusional fantasy of CentrePointe.

While you wait: Superlative Coffee Roasters

116 Mechanic Street, 2009

Last year, I wrote about some of the neglected properties surrounding Lowell's, including a small run-down house across Mechanic Street from our lobby.  

The house was long-abandoned, and the giant half-dead tree in front hung menacingly over passersby. 

A few months ago, that little house was sold to new owners, who spent a lot of time and money renovating the building and removing the rotting tree.  

The result: a very nice example of refitting an older property for a modern use.

116 Mechanic Street, Today

Last week, Superlative Coffee Roasters opened up for business at the new, much-improved 116 Mechanic Street.  Superlative is a craft roaster of organic, fair trade coffees.

Jenny Super, Superlative's owner, has offered to let Lowell's customers taste samples of one of her small-batch coffees through the end of June.

Today, I sampled the shop's Signature Blend.  Wonderful, wonderful stuff.

The Little Red Roaster

While there, be sure to check out their Little Red Roaster - It is often busy roasting up the latest fresh batch of beans.

Superlative is a welcome addition to our vibrant North Limestone neighborhood. Please lend your support to this great local business!

Come by the shop, pick up one of Superlative's free sample cards, and cross the street for a delicious free cup!

Superlative Coffee Roasters
116 Mechanic Street
Lexington, KY 40507
859.252.5000
Jennifer Super, Owner and Craft Roaster
superlativecoffee.com
Twitter: SipSavorShare

The Limits of Local

I am a strong proponent of 'buying local' - purchasing goods and services from local businesses to boost the local economy.  I made a case for Local First in our recent To-Do List for Lexington series late last year.

But I'm not a local 'purist'.  There are times when buying local is just not practical.  And there are times when non-local competition creates a healthy diversity for local consumers (and providers).

So a recent Twitter discussion and this blog post got me thinking about the limits of 'local'.  The tenor of these conversations was that a candidate for Lexington mayor [one that I personally support, by the way] was 'disloyal' to Lexington for using a Washington, D.C. firm to design the campaign's temporary website.

These discussions echoed several earlier ones about the purchase of non-local services by our city's government.

For me, the discussions raised an important question about buying local, especially with regard to public dollars and public figures:

Should buying local goods and services be a requirement or an aspiration for a political candidate?  For a local government?

The indignation of the writers seemed to imply that buying local goods was some sort of requirement - some sort of 'litmus test' for determining whether a candidate was good enough to run.

From my perspective, this line of thought leads to unreasonable conclusions about what disqualifies candidates (or what constitutes good governance).  For instance:

• They can't shop at Walmart.  Or Kroger.  Or Best Buy.  Or Home Depot.
• They can't eat at Chick-Fil-A.  Or Qdoba.  Or Five Guys.  Or Bonefish.
• They can't drive a Toyota.  Or a Ford.
• They can't drink Coca-Cola.  Especially the imported Mexican Coke with real cane sugar.
• They must only drink Bourbon produced in Fayette County.  (And wait a few years until it is actually available.)
• They can't update their blog with an HP or Dell laptop.
• They can't tweet with their iPhone.  Or BlackBerry.  Or Droid.
• They can't watch TV produced in Hollywood.  Or New York.
• They can't use Microsoft Office.  Or Adobe Acrobat.
• They can't use Facebook.

In short: They can't use any product or service which contains any non-local content.

Is such a list of prohibitions ridiculous?   Of course.  

And that's precisely the point: Requiring some sort of 'purity' in local purchasing creates an excessive, unreachable, and unproductive standard.

Buying local should be an aspiration - something we strive for, something we measure and attempt to improve, something we do more of.

Do we need our city, our political candidates, and our citizens to buy more local goods and services?  Should we actively encourage more purchasing at great local spots like Fáilte (profiled by Tom Eblen in yesterday's Herald-Leader)?  Absolutely, on both counts.  That was why I wrote my original Local First post.

We should spend more of our money here in Lexington.  But forcing our city to spend all of our money here would stifle Lexington's economy, and restrict us from being truly productive.

So let's adopt a reasonable posture aimed at encouraging our leaders to buy local.

Let's Change the World: A Review of Seth Godin's "Linchpin"

It was a few months before his third birthday.  It was also the day before he started school, and he was thrilled to embark upon this new adventure.  (He was also mighty proud of his new backpack.)

The sense of possibility radiates from his face: He's leaning forward, ready for anything, eager to engage with the new world awaiting him.

::

What happened to us?  

Once, we were like Carson is now.  We sang without fear.  We played with abandon.  We learned at incomprehensible speed.  We pretended.  We asked difficult questions.  We created things.  We did things.  We overflowed with joy.  It was (and is) a magical time in a child's life.

And no one "judged" our performance - we were just kids, after all.  In this stage of development, only a cruel adult (or sibling) would declare us "bad" at blocks or singing or playing or creating. 

But then, as we grew older, the regimen of school and critical teachers and vicious peers and numbing conformity drummed a lot of the magic out of us.  We became more anxious about singing or playing in public.  We became reluctant to stand out.  And many of us lost that childish joy associated with learning and discovery.

Then we graduated and went to work.  And the workplace actively stomped out anything which wasn't structured and standardized and routinized.  Our childish joy was smothered by conforming to the system.  But we accepted the slow, imperceptible death of our joy and creativity and genius in exchange for security.  Conforming, for all of its flaws, paid us well.

Until now.

Now, those standardized and routinized jobs that we worked so hard to "fit in" to can be (and are being) all-too-easily outsourced to someone else who will do them for less pay and less security. They are too easy to outsource precisely because the jobs are standardized and routinized and dehumanized and documented and commodified.  And it becomes a race to the bottom: There is always someone willing to do a standardized job for less.

As the economy has disintegrated, millions of jobs are evaporating as they move overseas or are consolidated.  And the sad truth is that many of those jobs won't reappear when the economy recovers.

::

I love books.  Especially business books.  I have a couple thousand books tucked into the nooks and crannies of my home, my basement, my office, and my Kindle. 

I also love learning, so the vast majority of my books are nonfiction, and most of them are business-related.  There are the software development books, many of which are getting dustier than I'd like.  There are the e-commerce books, the career-advice books, the business histories and biographies, the innovation books, the marketing books, the business-strategy books.  

Nearly every book had interesting information, insights, or perspectives.

But only a few really stand out.  Once every few years, I come across a book which rocks my worldview, which changes how I approach things and challenges me to do better. 

Seth Godin's forthcoming Linchpin: Are You Indispensable? is one of those books.

Seth is best known for his contributions to marketing, where he systematically dismantled business-as-usual approaches to marketing.  Interrupting and shouting at people (also known as "advertising") with boring "me-too" products is discredited in large part because of Seth's creative, insightful writing in books like Permission Marketing and Purple Cow.  His blog is a must-read for anyone in business.

But Linchpin is different.

::

Many of the themes in Linchpin will be familiar ones to readers of Seth's previous writing, but the scope and purpose of this book is much more grand (and effective): With Linchpin, Seth wants to do no less than help us change the world.  He wants to help restore humanity, creativity, generosity, and artistry into our work and our lives. 

When we are more human, creative, generous, and artistic, Seth shows how unique and invaluable we become.  Suddenly, instead of being another easily-replaced drone in the workplace, we are the critical links - the linchpins - of our organization (and our community).  We become indispensable.

Standing out is no longer dangerous.  Standing out is now the single most effective strategy for not being replaced or being forgotten.  Merely "fitting in" - once the source of our security and our income - is now the most dangerous strategy of all.  The more we fit in, the easier we are to outsource and the more precarious our jobs become.

How do we stand out?  By doing original, human, generous work.  Seth calls it "art", which he defines as "a personal gift that changes the recipient". 

The way for us and our work to stand out is to imbue it with artistry.  Only by adding our personal insight, ideas, innovation, and genius to what we do - only by being more human - can we avoid becoming a disposable cog in the system. 

::

Often, we have plenty of insight, and lots of ideas, and a surplus of genius.  But we fail to see it through.  We fail to produce our art.

What stands in the way?  Usually, it's ourselves.  More specifically, it is our fear.  Fear of failure.  Fear of being judged.  Fear of being rejected.  Fear of success.

So we wait.  We delay.  We procrastinate.  We go to the fridge.  We scan our email. 

And nothing happens.

In the most vital part of Linchpin (and the one which jolted me the most), Seth breaks down what really stops us from becoming great contributors.  He shows how we get in the way of our most brilliant ideas or plans.

And then he shows why that fear-mongering part of us can't be tolerated any longer.

We must confront our own delay tactics and call out our fears.  We must deal with the things which scare us and overcome them.  

Only then can we produce the art which will allow us to stand out and allow us to contribute meaningfully to our organizations and communities.

With his usual compelling and incisive style, Seth names each of these killers of our creativity, shows how they work, and demonstrates how to dismantle them.  In a fifty-page tour de force, he decimates the fears which limit our contributions.

Ridding ourselves of these paralyzing dread-monsters (or, at least, bringing them down to an appropriate size) allows us to inject some of that creative, playful, innovative, childish joy back into our work.  It allows us to connect more genuinely with others.  It allows us to change the world.

::

We face a choice.

We can attempt to hunker down, fit in, and conform, and live in dread that the economic storm will sweep our livelihood away.

- or -

We can take control of our careers and our lives to create unique, remarkable, significant work - "art" - and be determined to change the world for the better.

One is a passive victim's path, where the world - and life - "happens" to you. 

The other is an active, creative, joyful, innovative, human path for those who are liberated to leave a footprint on the world.  It is the same path that Carson is on right now.

It isn't really a choice, is it?

::

As I was reading Linchpin, I struggled with how to categorize this remarkable book.  Is it a self-help book?  A leadership book?  A business strategy book?

And then it hit me: It's a Seth Godin book.  And it's his best work.  And it will help you change the world - if you let it.

Let it.

[Linchpin: Are You Indispensable? will be released on January 26th.  Mark your calendars. Start here to check out other reviews.]