Intangibles and economic development: win, lose and tie

When it comes to thinking about the role of intangible assets in economic development, this morning’s Washington Post contains the full range of outcomes.
First, the win is a small town in Virginia where:

Over the past two years, the languid farming town of Culpeper, 70 miles southwest of Washington, has been transformed into an exceptional place to walk and shop for great groceries. The boards have come off the windows on East Davis Street. In the center of the historic district, built between 1880 and 1920, decay and neglect have been replaced by fine restaurants as well as food shops selling hot tamales, fresh geese and good wine.
Culpeper, rich in Civil War history and with a population of 15,000, has never looked better. The weathered brick buildings decorated with heavy cornices and detailing are filled with newly renovated shops selling imported and local foods alongside surviving bakers and hardware purveyors.

Key to Culpeper’s success goes beyond building on its history and location (as a number of small towns around Washington have done, such as nearby Fredericksburg). Culpeper’s revival is anchored in its local assets: Calhoun’s Ham House – a well-known supplier of country hams, including to the White House. Anchored off of the Ham House and using historic preservation tax credits (and other programs), the city was able to turn the downtown area into a food cluster.
This is no easy feat. My old hometown also has two regionally-known food purveyors. But they have not been able to create a food cluster. Part of the reason is location. Culpeper is located between Washington DC and Charlottesville VA – an easy drive from both and from Richmond VA. My hometown is located 200 miles from any major metropolitan area and not on a major travel route. But part is also image. Culpeper has created more than a food processing cluster (which is what AceNet has done in Appalachian Ohio). They have created a destination that blends the food shops with other local amenities, including interacting with other designations in the area, such as the award winning Inn at Little Washington. A smart use of all your local intangible assets.
– – –
The loss is New Orleans’ exodus of musicians, such as the Neville Brothers, to Austin. But Austin isn’t the only destination:

Storm-tossed New Orleans musicians have resettled in music capitals such as Nashville (where Aaron Neville has established his home), Memphis, New York and Los Angeles. But since the hurricane, musicians also have relocated throughout Louisiana and to Atlanta; Houston; Dallas; Birmingham; Orlando; Santa Fe; Montgomery, Ala.; Portland, Ore.; and even Hoboken, N.J. Some have trickled back into the flooded city. Others are in and out, playing in reopened clubs and hoping they, too, can start their lives anew in New Orleans next year.
Cyril Neville and his wife, singer-writer Gaynielle Neville, just bought a house in southwest Austin and have helped resettle 10 members of the extended Neville family and 26 of Gaynielle’s relatives here. Neville said he has no desire to return to a New Orleans that will never be the same.

That does not bode well for the economic rebuilding of the city.
– – –
The tie is Prince George’s Country (directly east of Washington) where a court overturned a law to ban small used-car lots on Route 1. The law was enacted to force the existing auto dealers to move as part of a plan to turn the area into an Arts District. Route 1 had been a major auto deal cluster since World War II. But, now the proliferation of small used car lots is seen as a determent not an asset. The Arts District is struggling, but making progress. However, it has never been clear to me that forcing the used-car lots to close would help spur the growth of the Arts District. More likely it would result in a number of parcels sitting empty. Creative destruction is fueled by the creative – not the destructive. If the Arts District concept takes off, the used-car lots will eventually vacate. Maybe the ruling will force community leaders to concentrate on other tactics.
Oh, and part of the tie in PG County is the strengthening of their historic preservation laws. Done right, historic preservation can be a strong attracter for economic development. It creates a powerful intangible asset – just think of Culpepper.


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