When we analyze an investment, we need to apply criteria to the project’s results to determine whether the project is positive. In the profit sector, this process is clear: The project must have a rate of return higher than the cost of capital or a positive net present value in order to be funded.
In public sector analysis, this is more complex. Different constituencies may have different priorities and therefore apply different or competing criteria.
As an economist and member of the Downtown Neighborhood Association, I propose we apply these criteria in the analysis of future public investments in downtown Savannah:
1. Job creation
2. Financial viability
3. Impact on the aesthetic neighborhood ambiance
4. Conformity with a strategic vision for Savannah
Jobs: There is no debate that our region needs more jobs, but our goal should be the development of long-term jobs that provide employees with living wages that can support a family. In other words, projects that hire people through construction but have little lasting effect are less valuable than those that lead to permanent employment.
Financial viability: Public investments must pass financial tests as severe as those in the private sector. To achieve this, all project discussion must be open to critical public analysis and not done behind closed doors. The city of Savannah cannot afford any additional loss of public confidence due to pet projects being funded without proper scrutiny.
Aesthetic neighborhood ambiance: There is no conflict between maintaining a high quality of aesthetic ambiance downtown and the tourism and business development on which our city depends. Anything that harms our aesthetic ambiance will also dissuade businesses from locating here and tourists from spending their money here.
They come here for the same reasons we live here: to enjoy our unique environment. Protecting our aesthetic ambiance downtown is essential to our ability to attract business, industry and tourists.
Strategic vision for Savannah: Major investments in the downtown region should be consistent with the best available strategic plan for Savannah’s future development. It seems necessary for the city to affirm a clear vision for our future and then make sure that all proposed development serve and not conflict with this plan.
In summary, DNA intends to participate vigorously in the debate about major proposed public investments in our neighborhood. The DNA Economic Impact Committee, which I chair, will develop objective data to access the potential for job creation and other economic benefits of these proposals.
We intend to contribute our findings in open and objective discussion with other stakeholders. In this process, where all perspectives are fully vented and vetted, we believe decisions will emerge that are in the best interests of our city.
Kenneth Zapp is a professor emeritus at Metropolitan State University, an adjunct professor at Savannah State University and a counselor at SCORE Savannah. He may be contacted at Kenneth.Zapp@metrostate.edu.