Can the Plentitude Business Model save cultural resource management?

The plenitude model is at the heart of historic preservation and it's smart moneyHistoric preservation-minded developer Bill Naito didn’t just save buildings. He helped create ambiance, character, and augmented the quality of life in downtown Portland, Oregon. During the 1960s, Naito saw potential in the rotting waterfront warehouses. He realized that remodeling these buildings may not immediately improve property values, increase foot traffic, or eliminate crime in the local area, but historic preservation was one of the best ways to turn things around in declining neighborhoods.

Just like his preservation efforts, Naito understood the way rehabilitated historic properties can help foster growth and help communities take ownership of their surroundings and the environment. Naito’s fondness of planting trees around Portland is similar to the way he built a commercial development company around historic preservation. Today, Portland honors local horticulturalists with the Bill Naito Community Trees Award.

I’m pretty sure Naito didn’t set out to become a community icon. He probably never imagined that he’d have a local humanitarian award named after him and he definitely didn’t think that someone would be blogging about his preservation efforts almost 20 years after his death. But, that’s what happens when you base your efforts after the Plenitude Economic Model.

Improve your community, Improve your bottom line

No one has written Bill Naito’s biography. Most of what I know about his life comes from the Wikipedia and his company’s website. Naito came from a business-owing family who started a wholesaling business in Portland during the 1920s. Bill realized the potential in a skid road warehouse and moved the family’s business there in the 1950s. Recognizing both the economic and social impact of rehabilitating older buildings, Naito continued to acquire, fix up, and manage historic buildings during the 1960s and 1970s. By the 1990s, he and his brother owned over a million square feet of commercial real estate in Portland and had saved more than a dozen of Portland’s iconic historic buildings. He has been credited with reversing the decline of the city during the 1970s.

I’m reading between the lines, but I believe Naito loved the city in which he lived. He loved it so much that he was willing to sink hard-earned money into buildings that were considered blighted by other businesspeople. Remember, Naito started doing this before the NRHP, before historic preservation tax credits, and before the Main Street Program. He was taking a gamble based on a gut feeling that other Portland citizens could love shopping in his properties if only he could scrub the rust off. He was right.

Naito isn’t the only entrepreneur that has become rich in the process of saving the town they loved. The preservation of Pioneer Square in Seattle happened because some local businesspeople decided to move their offices to the buildings along the original Skid Road, fix them up, and turn the area into an arts district. Today, it is one of the most visited parts of the city.

Buying, rehabbing, and holding run down properties with potential isn’t simply an American phenomenon either. The Company for City Restoration (Stadsherstel) was incorporated in 1957 in Amsterdam, the Netherlands specifically to develop public housing in areas threatened with demolition. After remodeling these buildings, the Stadsherstel remained the landlord, maintained the existing tenants, and strove to retain the mixed economic character of the neighborhoods. In typical Dutch fashion, it accomplished these goals while also turning a profit for investors¬ a tax-exempt 5 percent return annually. By the mid-1990s, the Stadsherstel’s 400 properties were worth $540 million.

Today, Stadsherstel properties house restaurants, art galleries, and are a central element to the city’s cultural agenda.

Most efforts to rehabilitate run down historical properties revolve around two guiding principles:

1) Develop property in order to make money, and

2) Preserve the local character, making the area more attractive/interesting/avant-garde/hip which increases property values, tax revenue, and makes more money.

The process of rehabilitating historical properties also tend to have basic residual effects, including:

1) Successful regeneration of downtrodden neighborhoods beyond the initial estimates (sometimes, too much [i.e. gentrification]),

2) Conservation of local heritage, and

3) Preservation of environmental resources.

The economic benefits of historic preservation are well documented. If properly done, histpres is an excellent investment in local business, creates a greater number of jobs than new construction, and is environmentally friendly. Revitalization can also be done without completely displacing low-income and minority communities, but it requires a more holistic consideration of how the process can benefit as many people as possible.

Everybody wins from good preservation projects. Communities win (cool places, more shopping, dollars circulate locally). Local governments win (increased tax revenue, stable tax revenue, eliminated blight). Investors win (investments pay off, profitable properties are acquired). And, future generations win (less waste, less energy used, embedded energy preserved).

This is the basic tenets of the Plentitude model. Creating win-win-wins like this are the future of business if the human race is going to survive.

The traditional CRM-only paradigm is short sighted and we’re starting to see the cracks in that business model. CRM companies don’t produce anything but reports. Unless they invest in their facilities, their businesses aren’t worth any money. Struggling to get each contract is a losing proposition because it doesn’t create any passive income or long-term relationships.

Most CRM companies are like Lyft drivers—once the ride is over, the client is done with us.

Cultural resource management companies need to adopt Plentitude

Plenitude (n.)— 1.) ample abundance; 2) the full spectrum of resources available in the universe.

Human beings create their reality from thought and realize their dreams through materials that can be found in the world around them. This is nothing new to archaeologists; in fact, our entire field of study exists because of the abundance of thought and material resources.

Unfortunately, we are entering a time period where there are not enough resources to live life as we have been for the last 200 years. Finite resources like petroleum and rare earth minerals are getting used up very quickly. We are only now beginning to scan our solar system in search of more resources, but this process will take some time. The legacy of industrialization, namely environmental degradation and species extinctions, are further reducing our capacity to respond to climate change.

Tough times are getting tougher. Just like during the Hohokam Classic Period, we our civilization will change drastically. In some ways, we will probably live like we did at some point in the past—conscious of the way our actions effect the world around us; working toward the betterment of our community rather than personal gain. To some, this seems like a regression but it is actually a return to the foundations of human society.

Is this summary of the future too optimistic? Myopic? Poetic? Realistic? Who knows. I don’t plan on being around before we go Planet of the Apes, although we are already seeing the initial phase of these changes.

The book Plenitude: The New Economics of True Wealth by Juliet Schor describes the new world in which we all live:

Reexamination of “business as usual,” neo-liberal economic growth—Turning the resources of the commons into commodities will not result in constant economic growth. Also, generating hypothetical profits along the vein of the subprime mortgage-backed securities is not sustainable either. Our economic model is too simplistic and does not take an accurate accounting of all the variables that go into business transactions.

Stagnating wages— There are more items in the cost of living index than ever before. All of these things cost money. There are also more people fighting for jobs than ever before and the existing business model will not create enough jobs in the first world to by all the things created in the developing world. Outsourcing technology, expertise, and information to cheaper countries will force us in the United States to make serious decisions about how we spend our money.

Environmental degradation— Our planet has limits. We cannot keep making things the way we have been without suffering.

Generation change— The harsh economic environment is forcing younger people to rethink what life is all about. Gen-Xers and Millennials have seen what happens when you give 30—40 years of your life to a single company/bank/way of life and it isn’t pretty. We are also keenly interested in the environment in a way our parents never were. Thanks to our parents/grandparents, environmentality is normal now.

All of these changes are happening against a backdrop of increased intellectual sophistication, knowledge, and ideation. How to we chive on in this changing world? Schor suggests we adopt the Plenitude Economic Model:

1) Change our consumption strategies— Buy less, make less, and spend less in order to have more time.

2) Diversify our income strategies— Don’t put all your eggs in the same basket.

3) Focus on small, niche, and decentralized— Use the internet and digital solutions to free our work from place. Identify niches and create targeted, small solutions to the problems in those niches.

4) Connect— Network, collaborate, and cooperate for mutual gain.

How can this can help the cultural resource management industry?

I’ve asked this question before. During the Great Recession, we saw the end of a number of amazing, talented, niche CRM-only outfits. Many of the companies started by Baby Boomers in the 1970s and 80s were bought out by larger CRM companies or huge “environmental solutions” outfits.

Why would bigger companies want to buy smaller ones? Any number of reasons: to increase market share, eliminate competition, found a great deal on a profitable company, to expand their offerings, ect.

It makes financial sense to buy a smaller company, but it also makes sense to launch a CRM-only startup. Why? Again, any number of reasons: less overhead, easier to provide real solutions to customer problems, can do an excellent job at a fraction of the cost of a multinational corporation, easier to establish a personal relationship with clients, carve out a niche that large companies are too big to exploit. The list goes on.

Small companies can run rings around larger ones, especially if they harness the power of the internet and workflow management software. This smaller, more nimble company will be forced to partner with other reputable firms in order to defeat the scale and money of big corporations. Small-timers will also have to build robust relationships with local clients by emphasizing the one thing they have in common—interest in improving the quality of their local community.

Local governments are in the forever business; they have to care about their communities for the long term. CRM companies that embrace the Plenitude Model will have to find and partner with other small businesses rooted in the local community also care about the quality of life in those communities. They will also have to diversify their offerings beyond simple NRHP/NHPA compliance because these services are not needed all the time. The feast or famine nature of contract archaeology can be ameliorated by diversifying services, especially by expanding sources of residual income. The resulting small business partnerships should also jive with local preservation, smart growth, and community organization campaigns, and local legislators and administrators that care about the local community.

This takes time and effort, but a smart consortium of local governments, businesses, and interest groups is the only way to slow the degradation caused by neoliberal capitalism. Historic preservation, cultural resource management, and heritage conservation has an important role to play in improving quality of life on the local level. These benefits are most easily attained by following the Plenitude Economic Model.

The first step is caring about the local environment. CRMers are particularly interested in environmentalism. It’s why we work in this industry. We can connect with other environmentalists and environmentally minded entities in order to include the cultural environment in the wider struggle.

Amenity is at the heart of our craft. Every CRM company starts locally. Every CRM company operates locally because historic preservation works at the local scale. We know what happens when CRM companies do not follow Plenitude– stuff like the Big Western Layoff.

What do you think?

Can the Plenitude Economic Model save cultural resource management archaeology and historic preservation?

Write a comment below or send me an email.

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