Meet Me at the Casbah

Likewise, Spokane's own Second City served as a catalyst for dozens of local firms and added to the region's intellectual ferment by providing new and unusual entertainment venues (including space for KPBX and the city's first art-film theater). Several companies succeeded and continued to grow after the demise of Second City; at least one business, called Rings & Things, developed a worldwide market.

A public market is not just an economic development tool, though. It becomes a gathering place, a home for small businesses, a tourist attraction, and a source of serendipitous interactions. This is true wherever such markets are found, from Europe and Asia to the Americas and Africa. In the 1938 movie Algiers, Charles Boyer tells Hedy Lamarr, "Meet me at the Casbah," sending her through a warren of souks and alleys filled with exotic goods and exotic people. The Phoenix Project can be home to our own Casbah, including an international marketplace that entices locals and tourists alike. Every tenant would sell products they make themselves or to which they add some value. These businesses would not necessarily have a national or global market, but would add to the intellectual ferment of the region.

In addition, space is available for a permanent farmer's market that would be open during the growing season. This market would be a smaller version of Vienna's Naschmarkt or Les Halles in Paris. In a true symbiotic relationship, startup restaurants in the Casbah could buy their fresh foods directly from the farmers in the market.

Entertaining Atmosphere

Visitors will not only be able to buy goods, but watch artisans making paper, needleworkers embroidering scarves, bakers kneading dough, leatherworkers making saddles and handbags, soapmakers, weavers, candlemakers, craft printers, even a Chinese fighting-kite maker. An area set aside for a permanent folk-life festival, drawing on the resources of the Museum of Arts and Culture and its cooperative arrangement with the Smithsonian, can bring history and culture to life, featuring Polynesians carving ocean-going canoes, a Norwegian fisherman building a wooden boat, members of local tribes extracting dyes from plants; children and parents can hear ghost stories, tall tales, tribal legends about Coyote and the creation of the Spokane Falls, work songs, drinking songs, love songs, children's game songs; while nearby farmers are selling carrots and cabbages grown on their own land and glassblowers are twirling glowing strands of molten glass and local bands are performing live at the KPBX auditorium for a national radio show, showcasing Spokane as a center for rising musical talent.

International visitors, foreign residents, and native film buffs will be drawn to the multi-screen art-film theater and adjacent mega-video and music store, which can supply as many as 100,000 video and DVD titles through their affiliation with a Netflix-type startup founded upstairs in the Catalyst startup space. Many of them will be joined before or after the movie in The Cavern, located in the rock-walled basement of the Phoenix Project. The Cavern will introduce many people to new musical acts on its stage, just as the original Cavern in Liverpool introduced the world to the Mersey Beat scene, one of whose bands became known as the Beatles.

Minimizing Risk, Maximizing Reward

Case Study: American Alley and Akihabara

The other market was in Akihabara, a few blocks from Ameyoko. You could find anything there--tubes, resistors, cables, wire. It was heaven to the students of a nearby electrical engineering college. It also contributed to the growth of a tiny startup that became one of the world's largest companies.

A Startup Fairy Tale

So Tokyo Telecommunications Engineering Corporation should have failed quickly. The handful of smart, young engineers had no plan at all. They sat around for weeks in the half-gutted hulk of a department store surrounded by the postwar ashes of Tokyo brainstorming for any idea that could make money, like creating a mini-golf course that would provide a bit of cheer to the burned-out city, or making sweet bean-paste cakes. They had scrounged together $500 to fund these dreams. They failed at one idea after another, including an electric rice cooker that either scorched the rice or left it wet and mushy.

Without any money, they had to make their own equipment, building soldering irons and screwdrivers "from motorcycle springs fished out of the war ruins," according to the company's website. "They constructed their own electrical coils and substituted telephone cables for electrical wiring in their trial products."

Their first big success was an electric heating pad stitched together by their wives. By trial and error, they discovered a distribution channel through tiny vendors in the city's street markets, like Ameyoko.

It was months before someone proposed a product that had anything to do with telecommunications, but it was a good one for a news-starved country: a shortwave adapter for regular radios which used just one vacuum tube. The big electronics companies were hoarding their precious supplies of parts, so the only place a tiny startup could find the tubes was the black market in Akihabara, a few blocks from Ameyoko. The company scrounged together the parts, assembled the shortwave adapters in their scruffy quarters, and began to grow.

What has happened since those days? Tokyo Telecommunications Engineering Company simplified its name to Sony, and Akihabara has become the most famous electronics shopping area in the world.

The moral of the story: sometimes all you need is a good team, dirt-cheap space, freedom to fail, a little money, and a lot of imagination. And maybe a public market.

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Case Study: Spokane's Second City

To everyone's surprise, Second City was profitable from the start. Spokane loved the collection of unusual retail shops, galleries, restaurants, and kiosks of artists and craftspeople. It was like having our own Pike Place Market. Moreland's Café thrived and metamorphosed into Moreland's Restaurant. Rings & Things grew from a little collection of, well, rings and things, into a consolidator for thousands of small manufacturers of rings, beads, and craft materials, and introduced a growing mail-order catalog. Children's Corner bookshop enchanted the children of the city. The Human Race, co-founded by Olympic marathoner Don Kardong, shod the intrepid few runners who showed up for a new, little race called Bloomsday. The New Bijou Theater gave a new generation of movie fans their first chance to see Humphrey Bogart hide the letters of transit in Sam's piano and Buck Rogers save Earth from the evil designs of Ming the Magnificent.

The secret to Second City's success was its dirt-cheap rent, which required tenants to build their own walls and clean their own floors. "The nice thing about it is that it allowed somebody with an idea but not much money to get started. It was a pretty effective situation," said Don Kardong. While some succeeded and some failed, the project as a whole thrived.

But Second City was not destined to last. The block was bulldozed in 1980 to make way for an 18-story bank headquarters and a parking lot. (The bank eventually left Spokane for Sacramento and then St. Paul.)

Second City was profitable up to the very end, and its legacy continues. Children's Corner is still enchanting Spokane's next generations from a new location in River Park Square. The Human Race is still fitting runners with shoes for the now enormous Bloomsday race. And Rings & Things is now an $8 million mail order and Internet business.

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Case Study: Pike Place Public Market

These visionaries were not alone in their desire to move their city into a glorious future free of such obsolete relics. Around the same time, civic leaders in San Francisco gleefully looked forward to the day they could rip out those old rattletrap cable cars that impeded the smooth flow of traffic and were a menace to civic order.

Fortunately backward-thinking Seattle residents voted in a landslide to save the Pike Place Market, making it possible for a little coffee house located there to grow into a company so huge that its $17 billion market cap alone is worth the value of dozens of skyscrapers, even at Seattle's generous real estate valuations. That company is called Starbuck's and their little coffee houses can now be found around the world. A purveyor of cookware at the market, Sur la Table, drew the interest of Spokane's own venture capital company, which threw $5 million into the pot to help grow another Seattle business. Sur la Table's annual sales exceed $75 million. Every day, winter and summer, between 20,000 and 40,000 people wander through that ramshackle set of old buildings, generating well over $60 million in annual revenues. And Seattle is still home to the Pike Place Market, one of the most famous tourist attractions in the world.

Clearly those visionaries seeking the destruction of the Pike Place Market overlooked its value as a generator of new businesses, as a tourist destination, and as an income generator for low-income people, including Hmong tribesman fleeing the turmoil in Vietnam who now make their living growing flowers and selling them at the market. Not to mention 377 street performers.

More than 100 farmers and 220 craftspeople ply their wares at the market's 175 daystall tables and 25 uncovered outside spaces, bringing in over $770,000 in fees to the market. (Proceeds from sales all go to the vendors.) Each table is 4 feet wide. While craftspeople can only rent one table, farmers are allowed two and sometimes three tables, so the actual number of vendors on any particular day can vary.

Craftspeople pay $35 for an annual or off-season permit, plus a daily fee ranging from $5 for Monday to Thursday during the depths of Seattle's gloomy winter to a high of $30 for a Saturday during the summer. During the Christmas selling season from October to December, the Saturday fee is $30, as well. All vendors must have a city business license and a state tax number.

The fish-tossers and produce shops and curiosity vendors are among the 210 permanent tenants (including non-retail office space), who generate over $5 million in revenue for the market. The market as a whole generates $62 million in retail sales per year from 62 specialty foods purveyors, 67 eateries, and 100 shops (on par with the revenues from Spokane's River Park Square).

The 9-acre project consists of several buildings in addition to the old market building famous for fish-tossing. Some private buildings are included in the preservation area, but 80% are owned and operated by the Pike Place Market Preservation & Development Authority (PDA), a "quasi-corporate" non-profit organization that can make use of government bonding authority to raise funds for improvements. The PDA is not tax-supported. Earnings from its property management activities are plowed back into the project.

The PDA is chartered to retain the traditional character of the market and its charm, but also to help the surrounding community by offering jobs for low-income people and providing outlets for those involved in arts and crafts. Over $25,000 worth of coupons are issued to low-income neighbors for the purchase of fresh foods at the market.

The PDA staff is overseen by the PDA Council with four members appointed by the mayor, four elected by the "Market Constituency," and four appointed by the PDA council itself. Members serve four-year terms.

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Case Study: Faneiul Hall Marketplace

Once upon a time, there was a seedy set of old warehouses on the fringe of downtown Boston where only an architect named Ben Thompson saw a "fun-filled shopping and entertainment mecca." He found a kindred spirit in James Rouse, who made a fortune developing suburban malls but in his heart loved the city. "It just seemed obvious that there was a human yearning for something like that in the heart of the city," he said. He envisioned "couples strolling hand in hand, looking at shop windows, touching displays of brightly colored fruits and vegetables on sidewalk carts, listening to a band concert in a green park; children tugging at balloons; the scents of seafood, spices, and hot concoctions enticing people into restaurants; people coming to buy, to eat, just to be there at the center of their community." But even Rouse had a hard time convincing others at his company that they could make a success of a place swarming with rats, where garbage floated in basements filled with water seeping from Boston Harbor. Lenders were, of course, even more skeptical, but a consortium of 11 banks finally took a chance, spurred by the desire to clean up the area in time for Boston's 1976 bicentennial celebration.

Rouse discovered that although even potential tenants were afraid to commit to long-term leases, when he offered European-style pushcarts for a weekly rental fee, they snapped them up. So although the market was not fully leased at the grand opening, the "combination of entertainment, unusual shopping, and festive atmosphere" attracted 100,000 visitors on its first day. More people visited the center that first year than went to Disneyland. Sales per square foot were 50 percent higher than at Rouse's highly successful suburban malls the first year, and twice as high the second year.

Rouse attributed the marketplace's success to its focus on small specialty shops run by their owners. A leasing rep said, "We were determined to try to make sure this place was no tourist trap." Rouse's biographer wrote that merchants were expected to offer food, flowers, and eclectic crafts that weren't wrapped in plastic. For this work and his efforts to address the problems of central cities, Rouse was awarded the Presidential Medal of Freedom in 1995.

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