Gay Marriage: An Economic Engine for Cities

NEW YORK ( TheStreet) -- Next week, I head out on a two-week vacation. With pit stops in two of North America's greatest cities -- New York and Toronto -- I will spend most of my time in Niagara Falls, USA. That's my hometown.

I haven't been back in two years. And while I hear things have improved, that's what they always say. I still expect Main Street's whitewashed windows and vacant stores. In many ways, Springsteen's classic "My Hometown" is about Niagara Falls:
They're closing down the textile mill across the railroad tracks/Foreman says these jobs are going boys and they ain't coming back to your hometown.

My Dad is one of the lucky ones.

He received a pension from Union Carbide when the plant closed down. I still remember him coming home with his clothes full of soot. When the plant closed, he could have moved, become a drunk or sat around collecting unemployment. Instead, he picked up work on the side -- like he always has -- and landed a better full-time job that allowed him to pay the house off ahead of schedule and retire comfortably.

My Dad is among a few exceptions to the rule.

As kids, another Springsteen line took on meaning for me and my friends as we sat underneath the bridge on Hyde Park Boulevard drinking beer: It's a town full of losers and I'm pulling out of here to win.

To be fair, plenty of my high school friends have carved out nice lives for themselves in Niagara Falls and the more vibrant surrounding areas of Western New York, particularly the City of Buffalo and its suburbs. But, at day's end, for many of us, we absolutely had to get out of Niagara Falls while we were young.

Missed Opportunities

Because Niagara Falls -- and dozens of other places just like it -- has always, by and large, lacked progressive leadership and a progressive population, it has missed a ton of opportunity.

Errant sociopolitical views often lead to missed opportunities. Social conservatism -- a hallmark of my hometown -- tends to stifle innovation. Populations that refuse to open their minds to 2012's realities leave quite a bit of potential on the table in the name of staying in their outdated comfort zones.

Granted, that's not the whole story.

Buffalo, for example, would be a completely different city had private and public entities come together to make smart choices decades ago. The Buffalo Bills football stadium as well as the main University of Buffalo campus would both be downtown instead of in the suburbs.

So, it's not just "traditional" social values that get small towns in trouble. It's more complicated than that. I get it. I spent a good chunk of my life studying what makes cities live and die. But, there's something to be said for catering to the so-called "creative class," a term coined by University of Toronto professor Richard Florida.

Back in 2002, Florida wrote a now seminal essay in Washington Monthly, titled The Rise of the Creative Class: Why cities without gays and rock bands are losing the economic development race.

Noting that his measures of the creative class jibed with another researcher's "Gay Index," Florida observed:
When we compared these two lists with more statistical rigor, his Gay Index turned out to correlate very strongly to my own measures of high-tech growth. Other measures I came up with, like the Bohemian Index -- a measure of artists, writers, and performers -- produced similar results.
Talented people seek an environment open to differences. Many highly creative people, regardless of ethnic background or sexual orientation, grew up feeling like outsiders, different in some way from most of their schoolmates. When they are sizing up a new company and community, acceptance of diversity and of gays in particular is a sign that reads "non-standard people welcome here."

A decade later -- with quite a bit of more qualitative and anecdotal evidence in between -- it appears Florida might have been onto something.

Witness this Newser story from Tuesday morning -- Gay Marriage Pays: NYC Pulls in $259M in 2011:
Critics of gay marriage bash its societal costs, but apparently it pays pretty well, too, with New York City pulling in a tidy $259 million last year. In the first year that same-sex marriage has been legal in New York, 8,200 marriage licenses for gay couples were issued -- nearly 11% of all marriages in the city -- and more than 200,000 guests traveled to New York to attend same-sex wedding receptions, reports Bloomberg.
... The $259 million estimate also includes 235,000 hotel room nights, booked at an average of $275 per night.

When I saw that, I immediately told my wife about the story.

We often have conversations about Niagara Falls as well as gay marriage. Two of our very best friends are a lesbian couple and raise three children in the San Francisco Bay Area.

Having lived in San Francisco for many years, we were basically on that island the conservative evangelists often go on and on about. We were literally surrounded by gays and lesbians. The lesbian couple next door to us owned their building, lived in one unit and rented out the other two. They have two kids. The lady next door to her used to babysit our daughter when she was little. Her partner just ended a (thankfully) successful battle against breast cancer.

I provide these mini-vignettes because they quickly drive home a point that has changed more than a few opinions on homosexuality and, more specifically, gay marriage. Gays and lesbians are just like the rest of us in most ways -- they face the same struggles and have similar goals and objectives in life. Often, they contribute to society and the economy at a level on par with, and often above, the typically successful straight person.

Ever since New York State legalized gay marriage, my wife has argued that Niagara Falls should take advantage of the legislation and regain its past glory as "The Honeymoon Capital of the World." If they had made such a move, I have to think that some chunk of the millions gay marriage had brought New York City's way would have made its way to my hometown.

Such a move would have tied in with other initiatives in place. A few forward-looking folks my age and younger have stayed in Niagara Falls. They want to restore some semblance of pride to their hometown. They're doing good things.

For example, there's a program in the works where the city will pay a portion of your student loan bill if you agree to live in a designated neighborhood for two years. When a small town in Kansas did this they received far more applications than they could serve and selected a well-educated group of relatively young people to locate in their town. (Full story at CNBC).

This type of initiative blends well with a new culinary institute set to open in Niagara Falls and other plans to revive downtown and environs. Leveraging gay marriage makes sense; however, any hint of it from City Hall would likely lead to an outcry of epic proportion from what is -- there's not a nicer way to say -- a pretty close-minded citizenry.

When cities such as Niagara Falls pass on these types of, let's call them, "social opportunities," they not only fail to generate direct revenue from something such as gay marriage, they also risk forgoing other potentially lucrative opportunities.

Whole Foods Market ( WFM), according to some observers (story via Salon.com), has assumed Starbucks' ( SBUX) role of neighborhood gentrifier. It enters neighborhoods at a tipping point and helps push them over the edge.

This is not to say Whole Foods would even entertain the idea of moving to downtown Niagara Falls. At least not now. It might be more reasonable for city officials to approach one of the nation's fastest growing retailers, relatively high-end grocer Wegmans Food Markets, to expand its presence in the city.

This is what draws the attention of other major retailers such as Whole Foods and can help turn a city's fortunes fast.

This type of process cannot happen in a place like Niagara Falls, however, unless two primary things take place.

One, the city and the state must come together to offer companies like Wegmans tax breaks to help offset the losses they will most certainly have to absorb early on. It's well worth the "handout," though, as one Wegmans, for instance, can snowball into other economic opportunity nearby.

And, two, you need the type of population (and some critical mass) to support desirable businesses, attract other employers and drive the economy.

You'll never attract enough of these types of people if you don't take a cue from Michael Bloomberg's New York City: Open your mind and then watch the cash roll in.

At the time of publication, the author held no positions in any of the stocks mentioned in this article.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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