by Paul Bowers
In last week's news feature about the proposed Horizon District, a $1 billion mixed-use development project on the west side of the Charleston peninsula, Horizon Project Foundation CEO Michael Maher made a claim that raised the hackles of at least one geographer: that the Horizon District would prevent brain drain.
"Anyone who's promising a brain drain plug is full of it," says Jim Russell, a research consultant for Cleveland State University's Center for Population Dynamics. "I've never seen an example."
Here's the original quote from Maher, which we paraphrased in last week's story:
That kind of brain drain we've experienced in Charleston. Because people want to be here, but at a certain point in their life, they realize economic opportunity and the ability to really feel the challenge and the pull of your career advancing above and beyond what you even think it could have — you don't hear that story a lot in Charleston. You're hearing it more, but with the Medical University and the growth in research, with the other institutions that surround it, the Citadel and the College of Charleston — with all of that brain power, a place like Horizon gives us the opportunity to keep that brain power challenged and really make the Charleston that we want become possible."
After reading the story, Russell scoffed at the idea that Horizon would prevent brain drain in a Twitter response: "No, it won't," he wrote. We called and asked him to elaborate, and he chuckled before answering.
"The short answer is there's no such thing as brain drain," Russell said. This is not a universally held view among geographers, but according to Russell, the entire concept of brain drain has been debunked on both theoretical and empirical grounds.
"People move to something; they don't really leave something," Russell said, "and the places that have the most people leaving are what we consider the most successful places." For example, Michigan — home of Detroit, long the poster child of brain drain — actually has a lower out-migration rate than most states. However, in-migration rates to Michigan still aren't keeping pace with out-migration, so the state has seen a net decline in population since 2004.
Russell says he came across the City Paper story because, as part of his research, he Googles the phrase "brain drain" every morning to see how it's being used. He says he typically gets about three pages of new results every morning, but when it gets close to graduation season, he often sees 12 to 20 pages.
"This is typical. Real estate developers will often make the claim that their development is in tune with millennials and will stop brain drain," Russell says. "And that's because most communities, whether it's fair or not, are anxious about brain drain. They don't think anyone should leave. Generally speaking, people associate 'brain drain' with some sort of place failure: 'There's something wrong with our place; otherwise people wouldn't leave.'"
If completed, the redevelopment of the 20-acre Horizon District could result in up to 3,000 new residential units, three-quarters of a billion dollars in private investment, and a hub of biotechnology business in downtown Charleston, according to Maher. But since the Horizon District is slowly sinking into the river (thanks to the fact that it's being built on a landfill over a historic marsh), the city is seeking a quarter-billion dollars in public assistance to fund the expensive and complicated infrastructure improvements that will be needed to support new parking garages, apartments, condos, and offices.
The funding mechanism for those improvements is a Tax Increment Financing (TIF) district, in which the city borrows money based on projected growth in property tax revenues from the surrounding area over a set period. Currently, due to a revenue shortfall during the Great Recession, Maher is seeking a 10-year extension of the TIF's term, meaning it would end in 2043 instead of 2033. Since Charleston County and the Charleston County School District would have to forego any increases in revenues from that area over that period, the extension will have to be approved by both entities.
That could be a hard sell for County Council and the school board, who recently have become wary of TIF plans during tight budget years. First, Maher will have to get the extension approved by City Council at a June 17 meeting.
"I would say that's one way to justify the TIF financing you're getting," Russell says. "You're pulling the heartstrings of locals and saying you need to pony up some money for this development."
Russell, who visits the Holy City several times a year, says he has observed anecdotally what the statistics show empirically: Charleston is not experiencing population shrinkage. Quite the opposite, actually.
"You can see the gentrification pressures," Russell says. "Clearly there's already tons of pressure to live in the city. That's not an issue. We're long past the point of urban core disinvestment in Charleston."
One more caveat from Russell:
"What's important to understand is that these high-tech jobs are great regionally, but more than likely you're going to have to hire people from outside the region and move them to Charleston to staff the positions."