A problem for cities like Detroit isn't lack of land for development
... this comes up in legacy center cities that have lost much of their past base of manufacturing, they have thousands of acres, if not tens of square miles of unused land.
So the article, "Factories or Runways? Municipal Airports Face Economic Pressure," in yesterday's New York Times about cities like Detroit looking to deaccession their municipal airports (I lived for a time near the old "Detroit City Airport" in the late 1960s...) to "offer prime space for development" misses the point.
There is plenty of other land already available elsewhere, not being developed, and much of it is better located.
Furthermore, in weak real estate markets, you want to focus development on the areas where you have critical mass, and build from there, rather than do development willy-nilly.
E.g., in the DC area, Prince George's County claims to be focused on transit oriented development, but its two biggest projects, National Harbor ("National Harbor Is a Private Urban Island Designed for Fun—If You Can Get There," Washington City Paper) and Konterra ("Development in Prince George's Could Rival Tyson's Corner, NBC4) lack high quality transit connections and are located outside of the county's core.
Similarly, earlier in the week the Washington Post ran a story, "Isiah Leggett's signature plan for Shady Grove is less lucrative than promised," about the failure by Montgomery County Executive Ike Leggett to stoke development of county-owned property in the Gaithersburg area. From the article:
The idea was ambitious when Montgomery County Executive Isiah Leggett pitched it in 2008: transform 90 acres of county-owned industrial land at the Red Line’s Shady Grove terminus into a transit-friendly urban village.Shady Grove Station is about 20 miles from Downtown Washington. It's not centrally located. Other developments in the vicinity are doing poorly, like Lake Forest Mall ("Struggling Lakeforest Mall faces foreclosure," Washington Business Journal), even though sprawl development continues unabated, although some firms like Marriott, are relocating their headquarters from outer suburban locations to transit-connected locations closer in ("Marriott Signs Letter of Intent for Headquarters in Downtown Bethesda ," press release).
Leggett’s Smart Growth Initiative would be a break-even proposition for taxpayers over time, he said, and might even make money as the county got an attractive new residential neighborhood and replaced outdated warehouses and garages with state-of-the-art facilities elsewhere.
But nearly a decade in, as Leggett (D) nears the end of his 12-year tenure, this signature project has not gone forward as expected. Only a fraction of the money anticipated from land sales to private developers has been paid so far. And the county’s difficulty in finding a new site for a school system bus depot has slowed progress on a major portion of the planned Shady Grove community, including a new park and elementary school.
In any case, less well connected land is underdeveloped for a reason.
This is true in DC as well. The city government has spent millions of dollars of time and energy aimed at redeveloping the Skyland Shopping Center in Ward 7, a more than 20 year process ("Blaming Walmart for Skyland's failure is misdirected: the culprits are DC's economic development and elected officials") and the St. Elizabeths West Campus ("Here's what the St. Elizabeths East first phase will look like," WBJ).
These sites won't develop until better located properties on the north and west side of the Anacostia River are built out.
Even the redevelopment of the Walter Reed Medical Campus will have that issue, vis a vis other sites that are better located or have more desirable demographics. The Wegmans that developers were trying to land at WRMC is being developed on Wisconsin Avenue in Ward 3 instead ("Wegmans to open in DC, anchor Fannie Mae redevelopment," WTOP Radio).
The struggle for local governments is that for political reasons they want and need to push these projects, but because the projects aren't economically viable on their own terms as 100% private sector funded, they require extranormal government funding, and take forever, with many failures along the way, because they are marginal to begin with.
On the other hand, it's very difficult for elected officials to say "the market isn't ready, so your neighborhood/this site will languish for a long long time and there's nothing we can really do about it."
Instead, they throw tons of money at it, in the end for naught, but no one can accuse them of not trying, not doing anything.
Labels: commercial real estate market, real estate development, tax incentives and abatements, urban economics
12 Comments:
Goes back to your point on DC streetcar.
Brought in density further away from metro station.
I have no idea how much DC money is being burned on Fannie Mae, Skyland, McMillan, Walter Reed.
I'm guessing well north of $100M. I think the bill for McMillian alone is that.
Almos as if spending the money on a streetcar would be a wiser choice.
Very good point. It primes the pump.
When we discussed this in the past, I made a similar point, but not as succinct as you (natch), that probably the city should focus streetcar development in areas where it can really prime the pump.
H Street has special advantages because of its proximity to Downtown and Capitol Hill, but even so, without the streetcar, development east of Bladensburg Road or north on Bladensburg Road would never have been possible outside of maybe in 25 years, when every other speck of better located (outside of streetcar adjacency) land was developed first.
The funny thing about the streetcar and McMillan is that I argued those points when I was Main Street manager in Brookland in 2007, but more out of a transportation demand management standpoint and practicality -- you didn't need an exemption on wires outside of the L'Enfant City (although it's fair to say the wires on H Street don't really have much negative impact on the viewshed).
The city (Harriet Tregoning) ignored my points, they never even made it into the Small Area Plan. (Years later I had a conversation with the ex planning director for DDOT and she said that DCOP was totally fine with lots of parking for AFRH. Note that Washington Hospital Center is the #1 destination for trips in the city outside of transit connected places.)
The reality was that if DC really wanted development at McMillan and at ARFH (now about to go into its third iteration as the first effort tanked with the Great Recession, the second RFP process was withdrawn, and a third RFP process should be initiated sometime next year), by putting the streetcar there first, it would have drawn the development.
It would also have sparked improvements on the midsection of the Georgia Avenue corridor there, figuring that the streetcar would go to Woodley Park (and I argued from WP it should go in a Y, two legs, to Georgetown and AU, but then also be extended to West Hyattsville and UMD eastward).
It could help an upsizing too. E.g., outside of the immediate block at the Georgia Avenue-Petworth Metrorail, development on Georgia Avenue is significantly less dense compared to H Street.
It also provides a great opportunity for redevelopment at RFK, which won't really happen because the city and NPS would have to negotiate a change in use and neither party is prepared to do it the way it should be done.
http://urbanplacesandspaces.blogspot.com/2012/03/wanted-comprehensive-plan-for-anacostia.html
E.g., I would develop at least a couple blocks in on the RFK parking lots abutting Benning Road, creating a streetwall there.
I would also put the orange line subway underground from RFK to Minnesota Ave. (although it's probably not got enough ROI to really justify it, but it would add reliability) further capturing development value.
Clearly, rather than letting EventsDC do the redevelopment planning for RFK mostly separate from DC Government, it and streetcar and Metrorail planning should be integrated.
It adds value to the PEPCO site too, and could stoke redevelopment in the Minnesota Avenue corridor, etc.
As you know, I haven't been writing that much for various reasons, partly because it seems every piece I want to write is "more bigger" in my head, and it's hard to get the time to be able to write those kinds of pieces.
For many months I've been meaning to write about streetcars based on positive experiences in KC and Cincinnati, and "failures" in DC and Atlanta, reasonable success in Tucson, maybe Dallas, the new streetcar in Detroit, etc.
But then the Charlotte Observer had a piece about their streetcar lamenting it hasn't sparked any development.
The point is as I have been writing all along, that "success" is dependent on multiple factors, the state of the market, the transit effectiveness of the infrastructure (real "usefulness"), what it connects, etc.
I don't know Charlotte at all, but I do know that as we have discussed, a streetcar can add value in DC in some ways and it can't in others.
In KC or Cincinnati, both without heavy rail (unlike Atlanta) or light rail (Charlotte), the streetcar, if done right can have extranormal impact in terms of branding and attracting development to "the city" in the face of "sprawl/anti-center city" tendencies.
Like with how the MCI Center repositioned/rebranded the attractiveness and viability of DC more generally at a time when the city was seen as a cesspool (Control Board, Marion Barry, etc.) and specifically "the east" as being valuable (I've argued this would have happened anyway, but I haven't been fully objective about it, there is no question that the velocity of development in this section of the city--the east end--was accelerated).
We can call that BrandDC. And we can call the new successful streetcar efforts in KC and Cincinnati part of BrandKC and BrandCincy.
(KC has some real f*ed up stuff going on with various competing ballot proposals for future expansion/not expansion.)
OKC too.
Anyway, it's probably worth writing about this in this sense.
hey it's summer -- writing anything in this heat is a challenge.
FYI, Georgia Avenue is looking at a Main Streets program.
After dealing with DMPPED I think it is hard to switch the real estate function from transaction based (DMPED) to framework based.
(that is the oldest form of urban planing. Build a subway and let the developers populate it.)
I am not big on the MS program in DC, not anymore.
It's not that it isn't a good "framework" speaking of frameworks, it's just that DC's elected and local neighborhoods don't have the capacity to do a good job, it's too hermetic, etc.
E.g., it's laughable that there is a separate Main Street program for Barracks Row and for 7th Street and the 600 block of Pennsylvania Ave, when there should be one program for "Capitol Hill from the 200 block of PA to Potomac Ave. Metrorail."
There isn't enough indigenous financial support for all the programs, we don't leverage the potential value of the network, etc.
I was working with people to do a form of it on Upper Georgia Ave. but the lead is pretty wacked and I just got tired of dealing with him/them. Plus it was a form of my line that "you are only as strong as your weakest link." As long as he was the lead we'd never be seen as credible.
Yes, the one is being organized by HU. I've paid a bit of attention, but it's not like they've done much over the past 10+ years HU has been supporting the effort. I can't see a bit of money without a long term commitment making much difference.
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note that another of my unwritten posts is on rearticulating the property tax revenue stream into four tranches: general; transportation; parks and culture; and "neighborhoods" which would support BID/CID/Main Street type efforts, but would have to be paired with a serious capacity building and technical assistance infrastructure.
But it's not unlike how cities like Montreal are organized as "boroughs" so there is the city wide government and more local governments, providing micro-scaled programs like street maintenance and more radical transportation policy (or less) such as in the Plateau-Mont Royal borough in Montreal.
I don't know if it matters but... I got f*ed by DPR, they offered me a job then reneged. It was at a DC jobs fair. DMPED was also hiring for project managers. But I didn't double back and get interviewed by them, because I was confident about the DPR job. (Shouldn't have been I know.)
Obviously, I don't know why I wasn't hired. They didn't do follow up interviews or questions. Just a couple weeks later said no.
But I imagine it has to do with my "reputation" and body of work. Even though I do know how to curtail that and work within the constraints of executive branch govt., which I proved I could do in Baltimore County.
... so based on that, I don't think it would have mattered much had I interviewed at DMPED, and yes, they wouldn't have been interesting in my ideas of changing how they do things.
(although I don't know if he is there now, but a chief of staff there was one of my general "supporters" 10+ years back before he went back to grad school and then re-entered DC gov.)
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