top of page

Location Quotient Targets Your Local Financial Power

by Glenn Greenidge

 

Community development activists don’t have to be rocket scientists, but using the simple gauge of a location quotient helps them understand a neighborhood's economics, according to the Useful Community Development website.

 

The site comes from four authors who deal with urban and regional planning.

 

Any economic foundation seeks businesses that generate income for the neighborhood. They look for more than a set usage by that business. So an example of bodegas or eateries should not rank as the key support of an economic system.

 

One tool, called the location quotient (LQ) helps discover where such income can be generated. Target those to improve the financial health. 

 

Start the economic study at the county level.

 

A community developer should search where the percentage of a total employment lies in a particular category. Check to find where this percentage exceeds the state's stat or the national one. The location of the community under some average numbers could point a finger at where opportunities exist. 

 

Since the tool operates as a quotient, the method hinges on a dividing process. Think of the economic base to include an area with an LQ greater than 1.0. Look for a county percentage of employment in that economic sector that exists greater than the percentage of employment in the same sector.

 

For example, a fast-food business might draw many people into a neighborhood, but the business might have an LQ less than the employment in a similar sector. On the other hand, a recycling business aims to hire people to collect material. That business could pose an LQ greater than found in the sector.

 

Community people can access the Bureau of Labor Statistics website to find the location quotient calculator. They can select their counties so they can compare them with their states or the country’s financial state.

 

Don’t ignore the obvious. A tourist-oriented state, such as Florida, might offer a comparison to a town in that state. However, the community activist might want to view the country to absorb the full scope of the tourism industry.

 

On the other hand, a developer could desire to find whether a community serves as the largest tourist opportunity in Florida. Then, the search would aim to compare the community only with Florida. 

 

The area where a planner sees a higher percentage of employment in a particular sector in the county compared to the nation or state would become an economic base, according to the Useful Community Development website. The base might not be the latest taco stand. See which other indicators reveal more.

 

If you found this helpful, please contact Glenn at Glenn@FamersBlvd.Org.

 

PROMPT:

 

Design your list of must-haves for your community. Which parts of the community’s income have proven to be more valuable for your area? Why?

 

Describe in a comment how those factors of income have changed over the past 30 years.

Contact Tom Pope or Glenn Greenidge at TomP47@aol.com or at Glenn@FamersBlvd.Org

 

 

 

Financial Problems in a Community Affect the Youth

 

by Tom Pope

 

The following is my book review I’m reprinting from the Bookpleasures.com site. Bookpleasures.com offers viewers an indepth analysis of a book.

 

Celebrate The Sinners Reviewed 

        

Sin Lies in the Eye of the Beholder

What is sin? 

 

Does that horror strike when a child disappoints his father, or a teacher shares knowledge of the world different from that of the local community?

 

Or does sin occur when the mother feels a failure for not having a child? Those questions haunt the coming-of-age novel Celebrate the Sinner by Steven Merle Scott.

 

Scott strove to show the value of the sinner through the eyes of pre-teen Teddy, growing up in a lumber town during the depression. 

 

That depression might be felt throughout the story as Scott tries to expose the grownup world to an alienated youngster. 

 

Midst this evolution, Scott wanted to unveil the overriding forces of a society in turmoil as the child matures.

 

While Scott excels in having the reader watch the wide world unfold into some form of understanding of Teddy, his choice of a child puts the reader in a delayed mode to pick up on the social forces that affect his characters. 

 

The full impact of the flaws in Teddy’s family and town only explode during the last third of the story. That’s natural since a younger Teddy would need time to digest the powers around him. 

 

But the novel’s pace could take away from the impact of how those social forces highlight Scott’s Steinbeckian attempts. Teddy grows up next to his father’s mill in Oregon where social forces frame the way people think about good versus evil. A resurgence of the Klan adds to social oppression while many people fear the influence of the Catholic Church. Economics drives people to seize the most of any opportunity, exemplified by the broker who sold the mill to Teddy’s father and the role played by using the railroad to move the mill’s lumber. How does Teddy’s father respond to these pressures — perhaps like another version of a sinner?   

 

Scott pulls readers into the life of a young person who grows up unaware of the pressures that form his early thinking. Teddy becomes fascinated by the saws and machinery at the mill and spends hours watching them. 

 

Yet, he has no idea why that activity attracts him more than being with his family. Teddy accepts his limitations of failing to read until fourth grade without wondering why certain limitations exist. He follows his father’s instructions about being on the lookout for fires that destroy mills, or carrying water to the workers. But he has no notion of whether his father really fills the role support of a father.

 

If Scott’s main goal aimed to follow the development of a child, dealing with learning the world around him, then he succeeded. Readers can stumble with Teddy as he grows into life. Readers can feel the sawdust and their noses might twitch from the fresh cut lumber. Scott paints the canvass of details to show the world of a lumber mill town.

 

However, if Scott wanted readers to link the social forces around the character with their actions, then he might have chosen a later age for his protagonist where the person could sense the vital implications of social oppression.

 

For example, John Steinbeck’s The Grapes of Wrath directly links the protagonist Tom Joad with an ability to see the linkage of the forces around him that push him on a set course. Joad’s conversation with a neighbor who lost his farm to the bank hits readers right away. The problem is a system or structure, chaining people like Joad. Joad’s anxiety of leaving Oklahoma clearly shows on how he feels about a loss of control over banks, weather, and greed from union busters.

 

On the other hand, readers can not expect such insight from a young Teddy in Celebrate the Sinner. Teddy is a preteen who struggles with digesting the problems he sees. Rather, readers watch a child who hears about his father’s hatred of FDR, unions, and his ambivalence to the Klan. While Teddy hears those ideas, he fields those forces as though they existed in the distance. Only during the last third of the novel does the reader fully see the connection between those forces around Teddy and Teddy’s actions.

 

A major focus Scott exposes is the arbitrary way a community declares someone as a sinner. A sin once meant taking the path opposite to a religious belief. However, the ways a community treats the sinner has grown beyond forcing a person to wear a scarlet letter “A”. 

 

Communities can shy away from children like Teddy who show a slow ability at reading or struggle with a lisp. Those communities can consider people from another religion as sinners. They can feel that workers who demand equal bargaining rights act as sinners. And the Black performer at the bar must be a sinner since his skin shows a difference from those in the community. Even the mill owner could become a sinner if he fails to accept an overbearing loan pressure from the town controllers.

 

Scott might have completed the circuit better to show the linkage between Teddy and the social forces, but despite that comment, Scott takes the reader into a child’s world where ideas about right and wrong have to be challenged. Readers might read about the mill town in Oregon, and then gaze out their window to see social pressures right on their doorstep.

 

If you found this helpful, please contact Tom at TomP47@aol.com

 

 

PROMPT:

 

 

Design a character who feels torn by forces between a sense of ethics and the norms of his society. 

 

 

How does he feel? Tell us which forces are putting pressure on him or her. How does his community reflect your neighborhood? 

Contact Tom Pope or Glenn Greenidge at TomP47@aol.com or at Glenn@FamersBlvd.Org

 

Fiction’s Community Power by Tom Pope 

by Tom Pope

 

Lessons from fiction? In my upcoming novel, The Violence of Cotton, the lead character, Sharpy as son of a slave, faces a crucial moment that could help community leaders deal with finance in reality.

 

Sharpy’s actions built an economic base for a struggling poor community.

 

The novel is an alternative history that traces four generations of a slave family starting in 1830 America.

 

However, while the facts stream from real history, the characters deal with those forces by using nonviolent strategies to change their community.

 

Sharpy’s slave father changed the return on investment that cotton promised for the plantation economic. That base became so decimated by the 1860s, that the country abolished slavery as an industrial south emerged. The new direction avoided the Civil War.

 

But the new factories prompted other ways the White business community tried to control the former slave workers. Sharpy’s newspaper offered him a chance to show the White community how workers faced problems. 

 

Yet Sharpy’s moment of challenge hit when he seemed to opt for gaining support from the new banking interests, which supported the factories. His newspaper became viewed by the bankers as a vehicle to spread the message about why America had to stand up to Britain. In return, he obtained changes in laws to recognize some labor rights for the workers.

 

Despite compromises, the poverty level remained because key clothing distributers worked only for the big businesses. Sharpy started to see through the eyes of a former slave woman who wanted to expand income for African Americans. 

 

Sharpy’s financial coops became a new engine for defying the banking community. Sharpy set up the coops using the Indian Grameen mini-loan system. That approach aimed to share the few dollars the community made from home sewing of clothing. Garments went to members of the local community and allowed people to gain small loans to raise part of the way above the poverty level.

 

However, he saw a potential to sell some clothing to people in the backwoods who lacked general stores. The activity built a link between the makers of the clothing and the people in the state’s interior.

 

The action prompted anger from the banking community because those sales hurt the income the factory distributors made in the backwoods. 

 

Sharpy could have buckled under the pressure of the dollar from the bankers and owners. But Sharpy’s use of targeted news articles to northern factory workers brought problems of the southern workers to the entire country. 

 

The rise of workers’ councils gave voice to Congress that prompted a change in laws against the monopolies in the South.

 

While the message comes from fiction, the message shows a model to build from within a local community. 

 

 

PROMPT:

 

 

Design a character who has attracted you who comes up with a solution for a financial problem that occurs in your community. 

 

 

Would the approach work in your reality? What would hold back the chance for success?

 

If you found this helpful, please contact Tom at TomP47@aol.com

Cost Segregation

By Glenn Greenidge

 

Marcus might own a commercial strip on a street where he craves generating cash flow beyond his usual sale of groceries. Yet hidden funds could help his profit margin right from his tax structure. 

 

Property owners might be able to generate matching funds from the city or state agency through cost segregation.

 

Cost Segregation identifies building costs that should not be included with the structural cost of the building. The IRS code section 1245(a)(3) reclassifies components of the building, which becomes identified as personal property.

 

Commercial property owners can benefit by using cost segregation to reduce taxes that owners would normally have had to pay the IRS, usually on a quarterly basis.  

 

Any building qualifies as a commercial property in such categories as, office space, warehouse, shopping center, retail establishment, or as manufacturing outlets that have been purchased after 1986. 

 

Cost segregation does not operate as a reduction in property tax because the concept aims to become a reduction in the owner’s personal taxes. By reducing the tax liability, the owner owes less in taxes freeing up the money to be used for other costs, such as maintenance, renovations, or even inventory.   

 

If the owner has recently purchased or spent $1 million dollars on renovation, the expected benefit depending on the property type could rise between $70,000 to $100,000 in savings.  

 

Owners should seek information beyond the obvious to understand which benefits lie in accounting records. When owners purchase a building, the cost of the entire purchase is recorded. A building’s expected use looks at a 39 year span and applies to buildings that are not apartment buildings. Apartment buildings usually depends on a life expectancy of 27.5 years.  

 

In accounting, the cost of the use of that building becomes a tax advantage to the owner of the building though a accelerated depreciation. The depreciation provides a tax incentive to property ownership, especially in commercial property by reducing an owner’s tax liability.  

 

For example, when we purchased an office building for $100,000, a straight line depreciation without the accelerated advantage could have meant the annual depreciation reached approximately $2,564.11 per year for the life of the asset.  

 

But when we took into consideration the concept of cost segregation, we found that some items classified as personal property and became a benefit to lower costs. 

Items such as lightening fixtures, sidewalks, wallpaper, electrical fixtures for machines, and Internet wiring can appear on a shorter life cycle, which means they are depreciated at a higher rate. 

 

Those fixtures would be reclassified in five, seven, and 15 year life cycles. That compares with the 27.5 year cycle of apartment buildings or the usual 39 year schedule.  

 

That accelerated depreciation meant the $2,564.11 we expected would have increased as an overall reduction to our annual tax liability. Had we not used the accelerated approach, we would have lost an advantage.

 

Which costs would owners expect to use for cost segregation? An engineering study has to be done to identify the components to reclassify those costs from real property to personal property ones. 

 

Owners should be aware that some companies charge a percentage of the cost savings while others seek a flat rate based on the property type. 

 

I prefer the latter. Owners might want to pick a company that offers the experience of delivery and representation of the owner’s interests if the IRS audits the study.  

 

The character Marcus might have fared better than most because he looked deeply into his tax structure. Owners can help themselves by creating a unified neighborhood appearance by using cost segregation. Meanwhile, the owners can benefit by using a new tool from their community development toolkit. 

 

How has your approach worked despite the idea seeming silly at the beginning?

If you found this helpful, please contact Glenn at Glenn@FamersBlvd.Org.

 

Communication of Finance

By Tom Pope

 

Whether you’re advocating a mixed-use plan, seeking funding for a local store, or protesting a megastore, you have to show results to the developer as well as the community.

 

If a rift exists between the developer and community, find a way where your position discovers a set of facts that links the two audiences.

 

Example-

A developer decides against supporting a mixed use strip mall. They claim the mall would be too expensive because of the extra fees needed to construct an indoor garage.

 

Discovery Process-

Find a way to target specific stores that the neighborhood needs. Obtain tracking of similar businesses. 

 

Find the costs for the developer if the firm spends the funds in another location of the city. Find the tracking of local people who presently buy items elsewhere.

 

Resulting Presentation-

Show the developer that the targeted stores for the neighborhood will present the firm with individual stores more likely to succeed than one blockbuster successful store.

 

Show the developer that the extra cost for the indoor garage will draw more local people who would have shopped in a downtown area. 

 

Use direct language-

Key words become-

  • Mixed use costs are only temporary

  • Draws a sustainable audience

  • Present local population will support the effort

  • Investment is a long-term process

 

If you found this helpful, contact TomP47@aol.com

bottom of page