Sunday, May 23, 2010

Weekly Unemployment Claims Rise

The number of workers filing unemployment insurance claims rose by 25,000 from 446,000 last week to 471,000 this week. The rise was unexpected. Economists and policy makers were concerned that the recovery may be slowing the creation of jobs. Jobs are part of the dynamic at the heart of the US economy. Slow job growth leads to slow consumer spending, and then slow economic growth which finally leads back to slow job growth.

The chart shows unemployment claims stuck in a flat trend at about 450K since the beginning of the year. Many people believe that UI claims must be below 400K to reduce the unemployment rate.

There was no clear reason for the change. The economy has been adding job's for the past four months. The change may be due to random fluctuation.

Continuing claims dropped by 40,000 to 4.6 million.

This second chart of the longer term trends show the baseline case of about 300K during periods of economic growth and 400K or below during recovery. Our current UI situation is about 450K.

How to write Blog Stuff

I think I have figured out how to do this blog. It took about three months, but writing is a really tough activity. It has to be done early in the morning before noon. And as old person, I completely lose the mental edge in the afternoon and become a useless ball of clay. So I just have to get up earlier and write.

End of story.


Sunday, May 2, 2010

New Roc City in New Rochelle: An Update

Well, I finally got to New Roc City in downtown New Rochelle. New Roc City (NRC) was design as an entertainment mall, with movie theaters, ice rinks, go-kart racing, rides, bowling and amusements. New Roc City was opened in Oct. 1st, 1999 with a huge amount of press coverage. NRC is located in downtown New Rochelle, NY and was developed by Louis Cappelli, president of Cappelli Enterprises, the largest real estate developer in Westchester County, NY. New Roc City was supposed to spur the development of New Rochelle, one of the poorest communities in the richest county in New York State.

New Roc City was developed as an entertainment complex, but plans have also included switching to big box retailing. Target had planned to open on the second floor, replacing the skating rink in 2008. The new opening date has note been set.

New Roc City was developed as an entertainment complex. It has had several issues with public safety and earned a reputation as being unsafe. On April 8th, 2007, hundreds of youths from NYC and New Rochelle fought with police. Another incident happened in New Rochelle on October 16th, 2007. NRC failed to attract the suburban kids in large numbers or to extract sufficient extra income to stay profitable. Many amusement parks operate on razor thin margins or losses and earn profits from food, drinks and merchandise.

NRC, now, is interesting place. The movie theater, go-karts, Buffalo Wild Wings and Modell's sports store were open. The bowling alley was packed. But the ice rink was closed, the entire second floor was closed off, the fitness club has moved out, and the amusement floor had a power failure. Sections of the complex are closed, dark or roped off. You can peer into the empty ice rink from the second floor. It was a real mixed bag.

My gut feel was that the place had a coney island, run-down amusement park feel, like it was intended for higher end spenders but could not attract them, so it settled for what it got. It's like an amusement park that is past it's prime.

New Roc City is pretty beat up but they did the right thing trying to develop it. They built the Trump Plaza and Avalon condominiums and New Roc City itself. They built a new transit hub. They redeveloped a good section of New Rochelle. They also generated a lot of good jobs.

The lesson: Yeah we gotta have a lesson. New Roc City is a great learning lesson in development. There are a couple of specific lessons: Security, Size, Customer Knowledge

First, economic development requires planning and security. When you make a project on the scale of NRC you must be ready to handle large crowds of Black and Hispanic kids without violence. You need smarter and better security guards that will stop any incident from getting out of hand. It would be better to close the complex to new customers rather than damage the reputation.

Second, NRC was probably too big. Perhaps it should have started smaller with a movie theater, bowling and ice rink, then see which ones worked and which ones did not make money, then expand in that direction. It takes years, maybe a generation, to re-develop and area at the grass roots level.

Third, know your customer. A smaller New Roc City might have worked if it targeted suburban kids who want a real, New York city feel without the hassle of traveling to the east village. They should have promoted resturantes, live music, clubs, bars and perhaps even adults entertainment in a controlled and contained fashion (similar to Europe). Plus new and different retailed (non-mall) like consignment, design, retro, vintage or custom. You cannot beat the mall. On persons sleaze is another persons spice.

Economic, class and racial trends in the US make projects like New Roc City very difficult economically. The future of New Roc City is uncertain.

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