Author: Foon Rhee, Associate editor

Should Sacramento aspire to become a “world-class” city? If so, what would it take? Comment on this issue in our forum

There’s a familiar and fraught phrase being bandied about yet again – “world-class city.”

This time, it’s on the lips of those who say Sacramento needs a new sports and entertainment arena, preferably downtown, to join that special club.

But what does “world-class city” mean, really? And if that’s the right goal, what’s the best path?

Sure, one way to get on the map is to build sparkling edifices: an arena, the Crocker Art Museum expansion, maybe even a new performing arts center. A building binge would fit into the official view of a “world-class” city: a place that has global impact through finances, culture or politics; that is known internationally by its first name; that is home to a major international airport, important financial institutions and corporate headquarters; and that boasts world-renowned cultural institutions.

But no matter how hard it tries – or how much it spends – that’s not in Sacramento’s future anytime soon, if ever. It is a mirage, a siren’s song that has lured other mid-sized cities, to their regret.

That definition of “world-class” is also limiting and outdated. In the 21st-century competition among cities, a broader measure of a community’s strength and greatness is just as important, if not more so: quality of life.

The cities that will thrive are those that offer arts, nature and other amenities for families and singles alike, yet are still affordable places where the middle class can buy homes; and that have distinctive neighborhoods but are still united by an active civic culture.

And it just so happens that it’s on those counts where Sacramento is best positioned to compete.

Cultivating an identity

The identity a city chooses for itself is no mere academic exercise. It can be crucial in deciding its future and determining its success.

Many experts say that cities are becoming more and more important as generators of jobs and economic output. While the late 20th century was the age of globalization, the first part of the 21st will be “the age of the city,” says Bruce Katz, director of the metropolitan policy program at the Brookings Institution in Washington, D.C.

He is among the host of policy wonks, social scientists and others who have spent a lot of time thinking about what makes a city healthy and vibrant in the new century. Katz has said that to compete, cities require “strong, resilient, adaptive” job bases and robust transit systems, and need to figure out ways to retain the middle class and integrate residents across lines of race and class.

Richard Florida, the best-selling author and guru of the “creative class,” asserts that while some believe that globalization and the wired world mean it doesn’t matter where you live, place is more important than ever before – both to the global economy and to an individual’s job prospects and life options.

Since “talented and productive people” – the creative class – tend to cluster in specific places, the cities that will do best are the ones that can draw those people, he says.

“New ideas are generated and our productivity increases when we locate close to one another in cities and regions. The clustering force makes each of us more productive, which in turn makes the places we inhabit much more productive, generating great increases in output and wealth,” he writes in his most recent book, “Who’s Your City? How the creative economy is making where to live the most important decision of your life.”

Florida notes that the places that invariably show up on lists of “world-class” cities – New York, Chicago, San Francisco, Toronto – have become extraordinarily expensive, so people might choose somewhere with a good quality of life that is far less costly.

To draw them, some experts stress a strong education system, from kindergarten through postgraduate, to nurture future entrepreneurs and leaders. Sacramento’s challenge to establish high-quality public schools – essential for keeping the middle class – is daunting, particularly with the budget crunch leading to teacher layoffs and classroom cutbacks. All of Sacramento County’s major school districts are on the latest state financial early warning list, and two schools are on the roster of the state’s lowest performing. But at least the framework is in place with institutions such as California State University, Sacramento, and some new, visionary leaders like Sacramento City Unified School District Superintendent Jonathan Raymond.

Other analysts emphasize a strong urban core where people live, work and play that draws visitors from the surrounding region and that gives a city its identity. In Sacramento, Westfield Downtown Plaza is struggling, and a $120 million face-lift of the K Street Mall is on hold. But there is hope: The city is trying to find a buyer to pump up the plaza, and it recently received four proposals to redevelop the properties it acquired along K Street. Progress downtown could piggyback on the grass-roots evolution of midtown into a much more vibrant, happening place.

And some experts say that, as society becomes more diverse, what will set cities apart is how well they encourage tolerance for ethnic and other differences. Sacramento can be justifiably proud for helping lead the way. Harvard University’s Civil Rights Project concluded that it is the most integrated city in the country, thanks to affordable housing, government jobs that prevent discrimination and innovative programs for the poor. But as elsewhere, racial tensions linger. Harmony can never be taken for granted; it must be continually promoted.

So while Sacramento has work to do on all those fronts, there’s no reason why progress can’t be made. And those advances will accentuate the city’s advantages. It is blessed with the American River Parkway and inviting parks, emerging food and music scenes, real neighborhoods with history and character, and active neighborhood associations and grass-roots nonprofit groups.

Civic involvement, compassion

Mayor Kevin Johnson is one of those who makes a mantra of urging Sacramento to be “world-class.” He is also among the most ardent champions of a new arena.

But for my money, his audacious initiatives to help the homeless and encourage volunteerism are far more interesting and promising because of what they share in common: public compassion and civic involvement.

Lots of cities have built new arenas, arts complexes and the like. How many have truly embraced communitywide activism or realistically dealt with homelessness? Just take a look at that city by the bay, which is now considering a remarkable ordinance to make it illegal to sit or lie down on the sidewalk. San Francisco may be world-class, but it’s also on another list: the No. 11 “meanest city,” according to the National Coalition for the Homeless.

Johnson took on the homeless issue after “The Oprah Winfrey Show” came to town in February 2009 and trained a less-than-flattering national spotlight on its tent city. Through Sacramento Steps Forward, the mayor is trying to bring together businesses, nonprofits and government agencies to help the estimated 2,800 homeless people in the Sacramento area.

He wants to build 2,400 permanent housing units for the homeless in the next three years. In a campaign where donors were urged to give the equivalent of one day’s rent or mortgage payment, houses of worship and a telethon have raised $290,000 in pledges and commitments toward a $400,000 goal to win $1.6 million in matching federal money.

Through Volunteer Sacramento, Johnson is encouraging everyone to donate at least 10 hours of their time toward a total of 3 million hours this year. The 1.7 million hours Sacramentans gave last year when Johnson launched the effort more than tripled his goal of 500,000.

If Johnson is able to reach his goals on homelessness and volunteerism, they would be an achievement more profound than building the Kings a new home.

The two initiatives are a reminder of a newer catch phrase making the rounds nowadays: that Sacramento is, or can be, a “big city with small-town values.”

That’s shorthand for an affordable, livable place that is a good environment to raise a family and make a mark in the world; that offers arts and sports and the outdoors; and that boasts a strong sense of community, even if it is a little slower-paced and less cosmopolitan than other cities.

As Matthew Mahood, president and CEO of the Sacramento Metro Chamber of Commerce, puts it: “Sacramento is never going to be a San Francisco or a New York or a Boston. … We should be very proud of who we are and where we are. … It’s a big city with a little bit of small town, mid-America charm.”

Being a “big city with small-town values” is not provincial or parochial; it’s a goal within reach that plays to the city’s strengths.

And to my ear, it sounds a lot better than “world-class city” anyway.

What would be the consequences if Sacramento fails to build an arena? To comment on this issue, please use our forum.

Beware of boosters promising an economic bonanza from a shiny new Sacramento arena.

As city and state officials kick the tires on proposals over the next months, you’ll also be hearing and seeing a lot about how a world-class sports and entertainment venue would jump-start development and shower benefits across the region.

While the City Council seems adamant that no citywide tax money should go directly to an arena, there is bound to be some public contribution. Before that decision, officials should scrutinize any economic impact numbers with healthy skepticism – a lesson other cities have learned the hard way.

There’s a reason why financial projections for arenas and stadiums tend to be so rosy, says Stanford University economist Roger Noll, an expert in the field. Support from sports fans alone is not enough to build a majority in favor of public subsidies, he says, so boosters resort to two lines of argument: the benefits will ripple far and wide, and the arena will attract lots of family-friendly events besides sports.

But such boosterism is “increasingly not working,” Noll said, because inflated claims are getting punctured by hard reality.

More and more cities that helped finance arenas and stadiums are having buyer’s remorse, as more independent studies are debunking the oversold benefits. That research points out four main flaws with the projections from supporters:

• The economic impact figures often don’t account for the shifting of existing entertainment spending. The money that fans spend at an arena or a nearby bar means less money spent at other restaurants and entertainment venues. And the farther away from the arena, the less direct benefit there is.

• Indirect spending – the “multiplier effect” – is often exaggerated. The principle is that the same dollar generated by an arena is spent again and again within a city, multiplying the economic impact, with sales taxes collected each step of the way. But if that dollar would have been spent somewhere else anyway, it is being double-counted.

• The “opportunity cost” is ignored. The real measure of a proposal is not whether it generates some economic growth. Rather, it is whether a project offers the best return on investment of all the potential uses for that site – and whether the public money could be better spent on another priority, say, hiring more police officers.

• The quality of jobs is given short shrift. Sports facilities tend to produce lower-skill and lower-wage jobs than what would be generated by many other kinds of development. The biggest beneficiaries, not surprisingly, are the team owners and the athletes to whom they pay multimillion-dollar salaries – money that usually doesn’t stay in the community.

Remarkably, or perhaps not, the nearly unanimous studies haven’t stopped public officials from chasing that proverbial pot at the end of the rainbow with eye-popping amounts of taxpayer money. Their pursuit has continued even during the worst recession in decades.

New York City will pay out as much $1.8 billion in tax breaks, infrastructure improvements and other subsidies for the new stadiums for the Mets and Yankees, which both opened last season. The city of Arlington, Texas, will eventually funnel as much as $325 million to the luxurious Dallas Cowboys stadium that opened last year. Closer to home, Santa Clara’s City Council has set aside $114 million in redevelopment, hotel tax and other funds to help build a $937 million stadium for the 49ers. Voters will get the final say on June 8, and a poll released last month showed a majority opposed.

There are cities that have done better. AT&T Park in San Francisco, the $357 million home of the Giants, was almost entirely financed with private money, with only $15 million from the city’s redevelopment agency. That came after voters rejected four attempts between 1987 and 1992 to use public money to build a new ballpark.

Indeed, the public is often far more realistic about the possible benefits and far more wary of being taken to the cleaners than their elected representatives. In 2006, Sacramento voters overwhelmingly rejected a quarter-cent sales tax increase to raise as much as $600 million for an arena in the downtown railyard.

With that history, Mayor Kevin Johnson and his volunteer Sacramento First task force, which solicited and evaluated arena proposals, declared one of its guiding principles as putting taxpayers first. In its report Thursday, the task force recommended that the city look first at a complicated land-swap deal that would put a new arena in the downtown railyard, in large measure because that proposal has the firmest private financing and would require less city funding than other plans. The panel also urged council members to press for full repayment of the $69 million the Kings still owe the city.

The task force also deserves credit that an economic impact study it commissioned is more realistic than many like it. The analysis concluded that Sacramento would gain 1,300 temporary jobs, mostly in construction, and 229 permanent jobs from a new arena. It didn’t try, however, to project how many spinoff jobs would be created, and it acknowledged that money spent at the arena would take away from other entertainment venues. But the study did not address who would pay for the arena, and whether any public investment would be justified.

That is the big unknown, of course: what taxpayers will be asked to fork over – whether in cash, publicly-owned land, tax abatements or some other subsidy or contribution.

The most talked-about proposal – one with the blessing of the Kings owners and the NBA and now the mayor’s task force – is the three-way land swap: The state would get the current Arco Arena site in Natomas for a new fairgrounds; the developer would buy the Cal Expo property from the state and sell off parcels for residential and commercial projects; and the arena would go on city-owned land in the railyard.

A group led by local developer Gerry Kamilos says the new development at Cal Expo would generate money to help build the arena, estimated to cost $300 million to $400 million or more. But they also want the city to donate 100 acres it owns near Arco for the new fairgrounds and plan to ask for other assistance. That could include a share of tax revenue generated by new development in the complex deal. If everything falls into place, Kamilos envisions $4 billion worth of development, half new to the tax rolls.

All the cautionary tales from other cities do not necessarily mean that Sacramento should pass on a new arena. It might be worth it, especially to help revitalize downtown and particularly if any taxpayer contribution is strictly limited. But officials should proceed with their eyes wide open and not in hopes of a huge financial windfall.

And every step along the way, they need to make sure that Sacramentans have a clear accounting of what they’re paying and what they’re getting.

Charles Montiero has been unemployed for 13 months after laboring for 23 years in a tool repair shop. Montiero and Niyyah Seraaj, a former medical assistant and office assistant for the state, watch a computer lesson during a retraining class at the Sacramento Food Bank on Tuesday morning.

Charles Montiero is staring intently at his computer screen as the instructor tells her pupils to try copying and pasting a photograph into a document. He picks a pretty winter scene of snow-covered trees and pops it into a file.

With the slightest hint of a smile, he tells a fellow student, “I don’t know if I can do that again.”

But such small triumphs, repeated countless times across the state, could decide the pace of California’s steep climb to recovery – and what the job landscape looks like on the other side.

About 2.3 million Californians are unemployed, and Montiero is part of the largest group – those out of work for more than six months. Their ranks have more than doubled over the past year to about 768,000, and if they find jobs, many of them will be doing something entirely different or making much less money.

The plight of the long-term jobless is a primary reason why digging out of this recession will be tougher than in the past. To get the state back on track, government, along with nonprofits and businesses, will need to focus their efforts on this group – with aid so families can survive what’s left of the downturn, and also with training so that as the economy rebounds, they’ll be ready for the new jobs.

The state’s latest unemployment rate, announced Friday, was 12.5 percent for January, up slightly from December and up from 9.7 percent a year ago. That’s bad enough, but if you go deeper into the numbers, it gets shockingly worse:

• The unemployment rate has doubled in two years and is at the highest level since the early 1940s. Add another 1.5 million Californians forced to work part time, and 20 percent of the work force is either unemployed, underemployed or has given up looking.

• California lost 900,000 jobs just last year. That means the state has about as many jobs as it did a decade ago, when there were 3.6 million fewer working-age residents. Just to get back to even would take four years of adding 20,000 jobs every month, an unlikely prospect.

• The payout in unemployment benefits totaled an astounding $20 billion last year, compared with the previous record of $8 billion in 2008. (Whatever your opinion of President Barack Obama’s $862 billion stimulus package, just think how much worse off California would be without that shower of unemployment cash.)

• While about 1.4 million Californians are collecting unemployment insurance, one-third of the state’s jobless are not receiving any benefits, either because they don’t qualify or because they have used up their share. (The maximum check is $450 a week and the average is about $308, and the benefits have been extended from the usual 26 weeks to up to 79 in high-unemployment states like California).

Yet even all those statistics do not truly tell the story of the toll on individuals, families and communities of the wrenching economic disruption.

Stretched thin

Charles Montiero only knows that after 13 months without a job, he’s barely keeping afloat financially, and he’s running out of time.

“I need to get to work now,” he says. “At this point, I’m just looking to make ends meet.”

Montiero, who turns 52 next month, has thinning hair and a graying beard, and he has an easygoing manner as he talks about what has befallen him.

The only other time he was unemployed in his entire life, he says, was a short stretch in 1984 after he left the Army, which he joined out of high school and where he spent eight years repairing M-16s and other small arms.

He came to Sacramento nearly a quarter-century ago and quickly found a job at Sierra Pacific Tool Service. For 23 years, he repaired jackhammers and other construction and demolition equipment. Making $13.50 an hour, he was settled, finding his way back from a divorce and some financial problems.

Then a little more than a year ago, his boss died, the shop was swallowed up by its main competitor, Capital Air Tool, and he and a fellow worker were let go. He doesn’t blame the small family firm that took over, but the timing could scarcely have been worse.

He says he applied last October with Paratransit for a job driving disabled people around, but that didn’t work out. Two weeks ago, he put in for a warehouse job in Natomas at HAVI Logistics, which delivers food to area coffee and juice shops, but he hasn’t heard back.

Cost-cutting lifestyle

For more than a year, Montiero has been collecting unemployment of $291 a week that he says is the main reason that he has been able to keep his house in North Sacramento.

He has been cutting costs where he can. He quit smoking in September and buys his groceries in bulk. Eating out is out, save for the Sunday breakfasts with his mother, Lori. If he couldn’t get treatment and his cholesterol and high blood pressure pills through the Veterans Affairs medical center in Mather, he couldn’t afford health care.

On a typical day, he says, he calls about possible job openings, fills out online applications and takes his 3-year-old German shepherd, Sheba, to a dog park near his house.

The biggest change in his life is that since last month, he has been learning computer basics for two hours every Tuesday morning at the Sacramento Food Bank’s “computer clubhouse” with two dozen other middle-aged and older students. On Monday and Thursday afternoons, he returns to practice during open computer lab.

In his old job, Montiero never had reason to use a computer, but says that nowadays he’ll almost certainly need basic computer skills in any job. Still, it has been 35 years since he has been in a classroom, and after each session, his brain feels “fried.”

He was referred for the two-month course by the state Employment Development Department. Short on cash, the agency is counting on the help of nonprofits and companies to train workers. EDD and the employer-funded Employment Training Panel are trying to scoop up federal stimulus money.

Older workers hard-hit

Charles Coger, who runs the computer lab at Sacramento Food Bank & Family Services, said that most jobs now require at least some computer skills and that the unemployed often have to search for jobs online. Two classes, totaling about 50 students, have graduated, and at least five have found work, he said.

While it’s certainly not easy for young people now trying to enter the work force, the challenge is particularly daunting for older workers, who once might have believed they would keep the same job forever.

“A lot of things are just being built to throw away. You don’t repair them any more. So therefore you’re doing away with the laborers, you’re doing away with the repair people,” Montiero says, a touch of bitterness in his voice.

He tries not to get upset or dwell on what might lie ahead if he can’t find work and his benefits run out.

“I kind of try to put it out of my head,” he says. “There’s got to be somebody out there who needs an old coot like me. I’m not stupid. I’m able. I can do work.”

Their worlds turned upside down, many long-term jobless are hanging on, afraid to look down at the dark abyss.

Here’s where government, partnering with corporations and nonprofit groups, can make a difference. While the private sector is much better at creating jobs, government can shore up the safety net with food stamps, health care and other aid. It can make sure that the jobless are receiving help promptly; after being slammed for slow and poor service, EDD has added staff as well as Saturday hours.

And state government can provide job training through community colleges, job centers and places like the Sacramento Food Bank.

Its computer lab, filled after school with students ages 10 and up, would not exist but for the generosity of two corporations. Intel gave $20,500 last fall to buy computers, and some employees volunteer to keep them running smoothly. UPS gave $20,380 to purchase computers and to pay for Microsoft training for Coger and instructor Michelle So.

Job market changed forever

The experts say that the job market will likely look a lot different than the one we knew before the recession started in December 2007.

Even when people start shopping again and when housing prices rebound, a lot of jobs will remain missing. Many companies have survived the recession by slashing payroll and then finding ways to wring more work out of remaining workers, or just doing less. And some kinds of jobs – including many that didn’t require a college education but that offered a gateway to the middle class – aren’t ever coming back.

Howard Roth, chief economist for the state Department of Finance, said he’s “greatly concerned” by the numbers of long-term unemployed, and the mismatch between their skills and the jobs that will be available. “That’s a major reason the recovery will be slow,” he said.

Most economists say that California’s unemployment rate will stay in the double digits well into 2012. The Legislative Analyst’s Office says that by 2015, the rate will drop to 6.9 percent – but that’s still higher than the peak during the last recession.

“It is going to be very long and very tough,” said Jean Ross, executive director of the California Budget Project, a nonpartisan research group in Sacramento that is among those calling on the Legislature to increase job training and to protect the human services safety net.

So if the question is what we can and should do to help the jobless on this steep climb to recovery, the answer is anything we can, or at least everything we can afford as taxpayers and citizens.

As the state’s politicians and policymakers confront the scary new normal, it’d be a good exercise for them to keep in mind people like Montiero. There are thousands and thousands like him. They are our neighbors and our friends. And for everyone’s future, they could use a helping hand.

Charles Montiero listens to instructor Michelle So at a computer class last week at the Sacramento Food Bank. He says his brain feels “fried” after classes.