Saving St. Catharines

The St. Catharines mayoral debate occurred last night, and I was disappointed. The candidates discussed a spectator arena (to keep the Ice Dogs), problems getting visitors downtown, transit and bike lanes. One question was asked about keeping college and university grads in the city. Here are their answers:

Davidoff: "We don't want this town to become a retirement village"

LeBlanc: "Need to go high-tech and bring those biz here to keep young talent"

McMullan: "we have a wealth of young talent in Niagara. Also, have talent on the other end: Educated seniors"

-- source St. Catharines Standard Mayorial debate Twitter feed @stcatstandard

St. Catharine's history is steeped in industrial employment (factories, plants, shipyards etc) and the city's motto enforces this -- "Industry and Liberality". Over time the city has transitioned away from industry to manufacturing and services with 13.4% of the city’s populace working at the 9 largest employers in the city (DSBN, NHS, GM, Seaway Marine, Brock University, Algoma, SITEL, Transcom, and TRW Canada).

In reality, the cold hard truth is that St. Catharines is slowly dying. 63% of the city’s demographic population is over 45 years old and older, unemployment is almost 10% and the dependancy on ongoing industrial jobs provides clear indications that the city is at risk. Add to that the fact that only 5,860 people (less than 3%) migrated into the city in the last census period and that the median income is $23,000 the 2nd lowest in the province and clearly the city is in trouble.

Imagine the city as it is, 10 years from now when the Canadian dollar is higher than the US greenback, GM has cut shifts or closed plants, contracts are lost at Seaway Marine, and the NHS goes through consolidation and staff reduction due to the new hospital. Who are the top new employers going to be? What will the median age be? How many residents will be retired?

The candidates themselves fall into the above mentioned demographic: Davidoff is 52, LeBlanc is 58, McMullan is 52 and Beam is 51. D’Intino is the exception (a law student from Ottawa) at 26.

Do any of them actually have a plan to bring high tech into the city and do they even know how to do it? Where are their plans? It is clear from the debate and the lack of information online about their campaigns they don't.

Let’s consider for a moment, that D’Intino is the only one of the candidates that has an active personal website and Facebook page. Davidoff has a Facebook page and a blog but both haven’t been updated since May, McMullan has a Facebook page and an election website. The others do not have a Facebook presence nor do any of the candidates have a Twitter account.

As of the last census only 1.6% of residents have a tech degree even with a local university and college. That is a clear indicator that graduates in the tech fields relocate to other municipalities. It is important to keep them, as ideas are formulated in dorm rooms and labs. For every Facebook or Google (both formed on university campuses) there are smaller successes one who hold just as much impact to the community.

There is a long way to go to bring tech to the city, and someone needs to step up with a plan. So here it is!

St. Catharines has a 10% vacancy rate and issues with drawing high tech companies. A very simple yet radical solution comes to mind.

The city will pay the rent on office space to any qualifying (established or start up) high tech company for 3 years. In return for this space, the company allows their brand to be used in advertising of the growing tech sector in the city. If the company moves out of the city prior to that penalities can be established. After 3 years, the company starts paying rent based on current market rates and year over year growth.

Before the debate starts on whether the city can afford this with the sustainable debt it has, let me say yes it can.

Although there is a cost to covering the rent for 3 years there is an equal investment being returned to the community through job creation, corporate taxes, increased residency, lower unemployment, and higher after tax expenditures in the community and a marketable commodity in a high tech destination. In fact, the cost would be less than building an spectator facility.

There are many commercial properties for sale or lease currently in St. Catharines with base lease rates of between $6.50 and $14.50 a square foot which are far less expensive than other urban areas. Start with St. Paul, build out to King and James Streets rebuilding downtown with a stable base.

Here is the costing model:

A 20 person company takes on space of 1200 square feet at $10 per sq foot/month.

City Expense

• Rent would be $12,000 a month or $120,000 a year for that space


• (10 companies would be $1,200,000 a year in expendatures
  

City Growth

• each of the 20 people buy a home generating property taxes of $2000/year/person for a total of $40,000 in tax based revenue


• each person invests in local services by buying groceries and services from local shops


• a percentage will contribute to the local recreational activities


• cyclic ability to advertise St. Catharines as an increasing tech hub.


• increasing retention of university and college graduates in tech sector resulting in increasing ancilary population growth (from outside the municipality and province)

Over a 5 year period, the goal would be to bring in at least 10 companies a year. That would bring a potential of 50 tech companies to the city and will build a tech base of 1000+ new residents with a cyclic costing model where the first companies roll into paying rent or buying office space outright as the last twenty companies are drawn to the city and are given free rent. Once entrenched in the community, high-tech companies tend to relocate or expand inside the same municipality.

Why do I believe this will work? I am part of that 1.6% (but work outside the city). 12 years ago, I helped form a startup company formed from the unversity focusing on game development for the Playstation 2; there were 15 of us (programmers, artists, modelers etc) all home grown Niagara talent. Our funding was invested in hardware and licensing equipment from Sony, 12,000 dollars in total, leaving none for office space. We converted a basement into an office because it was free space. For 3 years, we operated night and day from the basement working to deliver a great product. In the end, we lost a publishing deal and closed up shop. Some now work with Marvel, Silicon Knights and other studios. Ultimately, having professional office space would have allowed us to secure potential investment and venture captial and grow the business through the confidence boost given to visiting a true office.

To pull this off, the mayor and city council need someone to run point on this; someone who understands the tech sector. I came back to Niagara, 10 years ago. I believe in the potential of the city, so let's get to work.