In The Economic Innovation Group’s “2016 Distressed Communities Index” report, the researchers said that “place matters.”
The context was regarding the relationship between people and opportunities, and the communities where they lived. Framed in that way, the EIG used several metrics to gauge the distress levels of communities across the U.S. The metrics included high school education, housing vacancy rates, poverty rate and change in business establishments, among several others.
As a result, the researchers created a ranking of distressed and well-off cities. The top three most prosperous cities were all on the outskirts of Dallas, and included: Flower Mound, Allen and Frisco, Tex. The most distressed cities were Camden, N.J.; Cleveland, and Gary, Ind.
“Distress manifests itself in a lack of residential investment, in shuttering businesses, and in disappearing job opportunities; prosperity the inverse,” the authors of the report noted. “A high school diploma is the entry-level ticket to opportunity in the economy, and they remain scarce in many struggling neighborhoods.”
From a broad retail perspective, the most distressed cities are poorly served, and seemingly neglected by business. In an analysis by WWD of retailers located within the EIG’s most distressed communities, the only retail brands operating within the city limits of these communities are dollar and drug stores. The analysis found a virtual blight of fashion apparel, department store and food retailers.
For example, within the city limits of the top five most distressed cities, WWD found a total of 43 Family Dollar and Dollar General stores and two Wal-Marts. And between all of these cities, there was just one Sears and two Targets operating. This compares to the most prosperous cities where the breadth of retail offerings was broader with dollar stores, mass retailers, discounters and department stores all operating within city limits.
When WWD examined the stores of the distressed cities located within a 10-mile radius, the retail offerings were broader, but still skewed toward dollar and drug stores. The analysis reveals what the EIG scientists described as “spatial inequality.”
Although there were regional differences between the most distressed cities – housing vacancies were different, for example, in the West versus the East, the researchers found – the commonalities were striking. Many of the most distressed cities were former industrial or commercial hubs that had thrived during the U.S. Industrial Revolution. But as manufacturing has shifted overseas, these cities have become vacant of revenue- and employee-generating companies.
Yet all of the top 10 most distressed cities have well-established and – some would say – vibrant populations, which reveals a simple demographic lesson that sociologists know well: low-income people have to live somewhere.
But there are economic development efforts afoot in many of this cities. In Utica, N.Y., ranked sixth in the most distressed communities report, state officials are hoping workforce development in the areas of science and engineering as well as nano technology can make a difference.
But that’s hard to see when walking the streets of the city. Empty storefronts abound. Many of the quaint Victorian-era homes and mansions are boarded up and abandoned. In part of the downtown area, though, restoration work is being done here and there. The Stanley Theater, built by Thomas Lamb (who also built the famed Capitol Theater in New York) is thriving, and open for tours and shows with its gold-leaf interior as majestic as the terra cotta and tiled mosaic infused exterior.
Uptown, the story is different. There’s more activity, and a few people are streaming through Walgreens, Arby’s and an Auto Zone. A few years ago, Rite Aid moved further from the city limits to a Price Chopper supermarket. In its place on Genesee Street is a Family Dollar — one of three within the city limits of Utica.
The store features apparel for women and children, including tops, stretch bottoms and innerwear. There’s also canned food, ready-to-assemble furniture, health and beauty products, household supplies, pet food and home decor. For residents living in the downtown area who may not own a car, the store is the only game in town. It, and other dollar stores, have been thriving since the economic downturn — especially in economically distressed inner cities like Camden and Hartford, Conn., as well as here in Utica.
Family Dollar was founded in 1959. By 1981, it had swelled to 400 units. By 1989, the chain had 1,500 stores. But since the Great Recession, the retailer has seen explosive growth, increasing to more than 8,100 units today from 7,000 in 2011.
With more than 12,400 stores, Dollar General has seen a similar growth trajectory. Last week, it opened its 13th distribution center to keep up with demand and to replenish its stores. Analysts at Telsey Advisory Group said they “remain positive on Dollar General, given its consistent operations and ability to grow square footage. The company is on track to benefit from square footage re-acceleration to 7 percent in 2016 from 6 percent in 2015.”