In a recent post on the economic difference between Eastern and Western County economic development in The Sierra Foothills Report, Steve Frisch posted a long comment on the issues. Over the years Steve and I have had many blog exchanges, and we rarely agreed on most issues, but we sometimes find some common ground. On one issue we agree, a community has to have some unified economic goals and strong leadership if the community is to make any significant progress forward. As a recent article in The Union reported, Western County does not have those key unified goals and lacks strong leadership. In contrast, Truckee in the Eastern County has solved those problems. They have a comprehensive economic development plan and a process for community input. Truckee appear to be making progress, though they still have to develop a diversified year round economy.
With Steve’s permission, I am posting his comments at the Sierra Foothills Report on the issues impacting the economic development in Eastern vs Wester Nevada County for your consideration and comments.
Steven Frisch, on October 19, 2013 at 12:10 pm said:
While it may be accurate to frame these issues as Truckee ‘beating the pants off the western county’ I think it is important to note that there are some very important differences between Truckee and western Nevada County. I have no doubt that the structural economic differences between the eastern and western County have a lot to do with the cultural difference, and have a lot to do with the relative strengths and weaknesses of the two economies.
Truckee is largely a tourism based and recreation amenity economy, with the retail and hospitality sector still playing the largest role in its economic wellbeing. That has been a strength during the recent great recession because tourism and hospitality saw less of an impact and a quicker recovery than many other sectors did, particularly construction; in fact tourism and hospitality may have improved in some areas due to Californians traveling more in-state to reduce costs.
Many surveys of visitors and homeowners in the intermountain west conducted by private groups like Headwaters Economics and Collaborative Economics and agencies like the USDA indicate that ‘amenity counties’, and particularly amenity areas within counties, like Truckee, have a more stable economic base than other ‘new west’ and exurban economies, and perform better economically in the long run.
Part of the reason amenity counties perform better is that associated industries, such as construction, education and health care, in areas where people are drawn by the amenities, are less affected by dramatic shifts in property tax revenue, and indeed statistics indicate that Truckee property tax receipts fell less than across the rest of Nevada County, and began to recover quicker, at the same time that sales tax receipts recovered more quickly, meaning a town like Truckee can afford to invest in economic development.
There is another important distinction that comes to amenity areas, particularly higher elevation amenity areas; populations have a tendency to be more affluent (Truckee per capita income is almost 20% higher than the rest of the County) and younger (Truckee residents are on average 10 years younger than the rest of the County). This means that there is more disposable income; per-capita there are more business start-ups; and, there is more of a propensity to take risk.
But the very thing that has made Truckee more economically stable can also a long-term weakness; too much dependence upon a single economic sector (tourism and hospitality) can backfire if unforeseen events intervene (as we are seeing in the gateway communities to the Yosemite Valley this fall, and saw in Truckee/Tahoe with the new years floods of 1997). In the long run the most important strategy Truckee could invest in is economic diversification, which often comes only after the development of an amenity economy in the ‘new west’.
To Truckee’s credit that is exactly what they are investing in now; making investments in infrastructure, business incubation, community partnerships with entities like our Chamber of Commerce, and preserving and improving the amenity itself, the sense of a unique ‘place’ that attracts investment. While an amenity region diversifies it is equally important that it preserves the very thing that made it attractive for investment to begin with, the amenity that drives the tourism and hospitality economy. Although tourism, hospitality and associated retail are relatively low wage jobs, they are entry jobs to the region, attract the young and risk-taking, and they drive the other economic sectors.
A great example of economic diversification in Truckee would be the siting of the national corporate offices for Clear Capital, a financial services company with more than 225 local employees. In the 10 years since Clear Capital sited in Truckee instead of the Bay Area, drawn by the quality of life, their employees have become community leaders, non profit board members, new business owners as they leave Clear Capital, customers for arts and cultural amenities, and evangelist for the region. Ironically, Clear Capital is playing the role that The Grass Valley Group previously played for the western County.
In addition, I don’t think it is fair [anymore] to compare Truckee with the western County. Western Nevada counties economy is more like western El Dorado or Placer County, or Yuba County, than it is Truckee, Lake Tahoe or Mammoth Lakes.
Western Nevada County has actually become an ‘ex-urban’ region rather than an ‘amenity economy’ or even a ‘new west’ region, and is more firmly in the orbit of Sacramento and western Placer, than it is the high Sierra. I believe that this is a major reason why western Nevada County does not see more involvement from Truckee in organizations like the ERC, or even in the crafting of a County economic development strategy. There are two economies and they require two different strategies.
Exurban regions can have substantive ‘amenity economy’ characteristics, which western Nevada County does with the Yuba River, but are more defined by commute patterns with urban centers (and statistics shows a substantive number of Nevada County residents commute out of county for employment) housing ownership patterns (more primary residents, less second homes), and more retirees (and thus more transfer payments rather than earned wages).
Western Nevada County is not alone in this dynamic of shifting from the rural to the exurban. The same could be said of Yuba, Placer, El Dorado, Amador, Calaveras, and rural Fresno and Madera Counties. This is largely a dynamic driven by increasing population and increasing diversity of population in California.
And herein lies the inherent difference between Truckee and western Nevada County.
In these formerly rural places that are becoming ‘exurban’ there is often a difficult conflict between the formerly traditional economies and the new economy. The traditional economy was the ‘old west’ natural resource based economy (timber, mining, grazing, tourism). The new economy is the ‘new west’ economy (growing amenities, education, health care, financial services, transfer payments, and even renewable natural services like water, energy and increasingly food systems).
Thus in the populations that live in these areas transitioning from rural to exurban there is a profound cultural conflict between the residents who are drawn to and are advocates of the ‘old west’ economy and those who are proponents of the ‘new west’ economy. This conflict becomes a part of the narrative while the transition is occurring, spilling over into the planning, politics, institutions, and even the cultural choices people are making. The landscape becomes a central feature of the conflict, because how land is used is central to the transition; the ‘old west’ economy views the landscape as a resource to be ‘consumed’ and transferred into wealth; the ‘new west’ economy sees the landscape as a resource to be ‘preserved’ and transferred into wealth, even if wealth is defined more esoterically by the proponents of the ‘new west’. The vitriol with which these conflicts are resolved reflects the point that so much is at stake—people’s very identities are tied up in the ‘place’ they select—and it becomes a struggle between cultures.
As a 25-year resident of Nevada County I have seen this dynamic play out in both the western and the eastern County.
In the western county the battle began as new residents moved to the region, first after the Summer of Love, and then in the great exurban migration of the 70’s and 80’s, who moved into an ‘old west’ economy. It manifested itself in the conflicts over the Nevada County General Plan, where competing visions of the use of the landscape, and thus competing visions of capitalism and wealth creation, did battle through two updates. It accelerated through the effort to designate the Yuba River a Wild and Scenic River, the 2000 Board of Supervisors elections, NH2020, and the recalls and new elections that followed. It might have seemed like a more conservative Board of Supervisors after 2004 would have laid the issue to rest. But the reality is the issue will not be laid to rest until the transition from rural to exurban is complete, largely because many of the conservative Supervisors recognize, either consciously or sub-consciously, that that transition WILL occur, it is inexorable, and unstoppable. Even if dragged kicking and screaming, and whether for better or worse, Nevada County will be dragged to ‘modernity’ economically, because time is a river.
In the eastern County we saw this dynamic playing out, and recognized that we had already made our choice, at least partly because we had not been dependent upon the ‘old west’ economic model for several generations. Truckee was already firmly ‘new west’ in the 1980’s. Thus we made a conscious choice to embrace the ‘new west’ and rather than engage in the vitriolic fight that ensues when landscapes are fought over, we defected. Truckee incorporated in 1993 largely to separate itself from the control of the County government, which was not only embroiled in this struggle, but was using the eastern County as a bank to finance services in the western County. Our ‘new west’ amenity economy was already returning on investment and we did not want to suffer taxation without representation. This was exemplified by specific land use decisions the County was making, such as citing a K-Mart next to downtown Truckee, without realizing our citizens had already made their choice to embrace the ‘new west’ model.
Truckee is beating the pants off of western Nevada County because it embraced its change, went with it instead of fighting the flow of the river, and had more favorable conditions to do so than the western County did from the start (and I say this as someone who had a natural inclination to fight the change rather than harness it to improve the community).
This is a long dissertation, but having gone this far I feel compelled to finish with some advice for the western County.
The clash of cultures you are experiencing is not unique, it is happening all over the inter-mountain west; the shift from rural to exurban is not unique, it is happening all over California, Oregon and Washington; the conflict over resources is not unique, it is happening all up and down the Sierra Nevada and the Cascade, and indeed in the Rockies, and the Wasatch. Lessons can be learned from looking into the communities that have prospered while making the transition from rural to exurban, and economic strategies to harness that change for good can be adopted.
What Nevada County is lacking, and here I am agreeing with some of my arch opponents on the eventual outcome, is REAL leadership. Leadership is no longer a dominated by the ‘great man’ theory; to be effective leadership must be more collaborative. We are learning this lesson from business and the social sector every day when we see emergent industries adopt collaborative models and prosper. When more people are empowered to be involved, the conflict between ‘old west’ and the ‘new west’ can be if not resolved at least minimized. When I wrote several years ago about democratization of decision-making in rural communities this is the dynamic I was hoping we would embrace, and the opportunity to embrace it is still there. The problem, and where I agree with my critics, is that leadership has been allowed to be and rewarded for being ‘tribal’, pitting sectors, towns, and cultures against each other. But to build leadership it must actually DO things, and show success. The best thing western Nevada County could do is pick one or two short term substantive competitive advantages that the vast majority of people can agree on and that are achievable, and concentrate on achieving progress there. From the exercise of concentrating on the few and achievable, relationships will be built that can later concentrate on the thorny.
To have real success western Nevada County must leave behind its cultural conflict between the ‘old west’ and the ‘new west’ and embrace its unique identity and future.
Please see this post for some ideas on where to start: https://sierrafoothillcommentary.com/2013/10/17/if-you-do-not-know-where-you-are-going-you-cannot-get-there-from-here/