With the post-covid decline of Downtowns, arts and cultural institutions are affected too
There is a dumb letter in the San Francisco Chronicle, suggesting that people be paid a decent amount of money to visit Downtown (granted tongue in cheek), riffing off the idea of having congestion charges--daily fee paid by motor vehicle operators when entering the core of the central city in the face of the decline of both tourists and office workers--no Downtown across the country, except for Houston, is experiencing the return of more than 50% of its pre-covid office population.
Given that Downtowns are reeling, I can't see congestion charges being viable in the US for the next few years, although NYC still continues to pursue it, as a primary source of funding for transit.
First Thursday participants examine a poster showing the locations of galleries, open studios, theaters and more in Pioneer Square. (Ellen M. Banner / The Seattle Times)
OTOH, it's not just office buildings ("Stress Builds as Office Building Owners and Lenders Haggle Over Debt," New York Times), hotels ("Difficulty Securing Financing Halts More Than Half Of U.S. Hotel Development," Bisnow), retail spaces and transit ("Metro: Massive funding increase needed to avoid ‘catastrophic’ cuts," Washington Post, "With Commuters Staying Home, Transit Agencies Try to Reinvent Themselves," New York Times) that are getting crushed.Meanwhile, a few hundred feet away, Pioneer Square mainstays Linda Hodges Gallery and the Center on Contemporary Art are celebrating a different milestone: their last First Thursday Art Walk. Linda Hodges Gallery, whose owner is retiring, and CoCA, which will be operating online only for a while, are among a number of high-profile Pioneer Square galleries that have closed their brick-and-mortar spaces in recent years.
At the same time, new galleries, pop-up exhibits and artist-led events like Forest For The Trees are bringing fresh blood to the neighborhood and upending the long-held ways galleries have operated. This generational shift comes as the neighborhood itself is in flux, with new restaurants and retail spaces, various construction projects in the works and foot traffic picking back up after a deep pandemic slump. More than three years after the first COVID closures, as Seattle Mayor Bruce Harrell has declared arts and culture an important part of his plan to revitalize downtown, Seattle’s premier gallery district is at a crossroads.
What shape the new Pioneer Square takes and whether it remains the place to see and be seen in the city’s arts scene (and the place to buy art) doesn’t just affect local artists’ livelihoods and galleries’ bottom lines. It also plays a role in how well the city can recover from the pandemic as local leaders look to a lively arts district to help draw people to the neighborhood and propel the local economy.
Over the last ten years rents are up, more recently sales are down, and foot traffic is down 50% or more.
Also see:
-- "How Sonoma County theaters are trying to survive in a post-COVID world," Santa Rosa Press Democrat
-- "New Pike Place Market venue aims to rekindle Seattle’s arts scene," Crosscut
-- "Seattle arts events are back, but audiences are hesitant," Crosscut
-- "What Does It Take to Run a Museum? The Job Description Is Changing," New York Times
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Other relevant blog entries
-- "Reprinting with a slight update, "Arts, culture districts and revitalization" from 2009" (2019)
-- "A comprehensive list of funding sources for arts and culture" (2019)
Cultural quarters and innovation districts
-- discussion on the Arabianranta district within "Helsinki as an example of creative industries driving urban revitalization programs," Europe in Baltimore, 2013
-- discussion on the Liverpool Knowledge Quarter within "Liverpool regeneration as a process for regaining relevance at the regional, national, and global scales," Europe in Baltimore, 2014
-- "Naturally occurring innovation districts | Technology districts and the tech sector," 2014
CDCs and owning culture-related property
-- "The Howard and Lincoln Theatres: run them like the Pittsburgh Cultural Trust/Playhouse Square Cleveland model," 2012
-- "BTMFBA: the best way to ward off artist or retail displacement is to buy the building," 2016
-- "When BTMFBA isn't enough: keeping civic assets public through cy pres review," 2016
-- "BTMFBA revisited: nonprofits and facilities planning and acquisition," 2016
-- "BTMFBA: Artists and Los Angeles," 2017
Important elements often missed in creating city/county culture plans
-- "Should community culture master plans include elements on higher education arts programs?," 2016
-- "The song remains the same: DC's continued failures in cultural planning as evidenced by failures with Bohemian Caverns, Howard Theatre, Union Arts, Takoma Theatre...," 2016
-- "The tension between monetizing public space and placemaking | rethinking how neighborhoods are supported by local governments," 2018
-- "Leveraging music for cultural and economic development: part one, opera," 2017
-- "Leveraging music as cultural heritage for economic development: part two, popular music," 2017
Transformational Projects Action Planning
-- "Why can't the "Bilbao Effect" be reproduced? | Bilbao as an example of Transformational Projects Action Planning," 2017
-- "Downtown Edmonton cultural facilities development as an example of "Transformational Projects Action Planning," 2018
Labels: arts-based revitalization, capital improvements planning, civic assets, comprehensive planning/Master Planning, cultural planning, public realm framework, urban design/placemaking
posted by Richard Layman @ 11:31 PM&Permanent Link
12 Comments:
Wall Street Sours on America's Downtowns
https://www.wsj.com/articles/cities-real-estate-bonds-taxes-c6736f8b
https://archive.is/mOrFz
Wall Street is betting against America’s downtowns.
Investors are paying less for bonds linked to New York subways and buses. Downtown-focused real-estate investment trusts trade at less than half their prepandemic levels. Bondholders are demanding extra interest to hold office-building debt.
Downtowns have been a mother lode for American cities over the years, providing billions of dollars in tax revenue along with their distinctive skylines. In turn, investors who bet on downtown office towers, or on the trains and buses delivering workers to them, could generally trust they held a winning hand.
Analysts at Asset Preservation Advisors, a municipal-bond management firm, are watching downtowns closely. The team remains confident of certain tax-backed bonds sold by New York City and Boston, but has grown wary about debt of some other Northern urban centers and big California cities, even bonds backed by those cities’ full taxing power.
“The suburbs are going to be one of the big winners in this, and the potential losers could be the large cities that have depended on people coming back and forth to work,” said Ken Woods, founder and chairman of the firm.
Office buildings are only about 50% as full as before Covid-19 across 10 major metro areas, according to keycard tracking by Kastle Systems, a building-security company. Federal transit data show public-transportation ridership at less than 70% of pre-Covid levels in major metro areas.
https://www.marketwatch.com/story/problem-office-loans-are-piling-up-in-chicago-and-houston-but-not-yet-in-san-francisco-1272d1b4
Stong market vs. weak market.
Ny, San Jose, Boston Seattle look healthier.
LA, Chicago, Philly and Houston less so.
Also hung chunks of CRE are suburban office buildings; many of the same issue but not quite so translatable to downtown woes.
I'd say everybody is underestimated the impact of downtown of the value of urban multifamily. Real estate is a slow moving market.
Again another way to approach this is it's a an interest rate problem; why would a bank want to refinance a commercial property right now? You'd need a very very decent return and that drives away money.
Overall not looking great for cities. Different markets need different solutions, but we are very much NOT in a build it and they will come era.
Exogenous shock. It's why in good times you can't let things slide, give an inch you can lose a mile when conditions change (eg decriminalization of fare beating).
Good point about strong versus weak and identifying what differences lead to better outcomes.
And yes about refinancing. Wfh + inflation leading to increased interest rates makes it hard to deal.
Eg in the UK wrt residential mortgages, banks have agreed to a one year foreclosure moratorium.
"Financial storm bears down on US commercial real estate"
https://on.ft.com/3Xq3eix
Focusing on actual mark to mark sales in the NY official market.
Again NYC is basically half of the "downtown" office market nationwide so people focus on it. Most "office" across the country is still very suburban. And arguably easier to turn into residential or multi use -- like malls. But not an immediate transformation.
Now this is what JJ was talking bout -- adaptive reuse in old, worthless, office buildings. The bigger danger is they remain zombies building with 10% occupancy.
In fact I'd view the DC type efforts to promote downtown living as a deliberate cull of bad office buildings. They are looking at low hanging fruit but we need demolitions -- just like they did in the 1970s -- to turn into parking lots.
That is a practical view, but I'd stand with the people trying to adapt the buildings to new uses and retain downtown buildings.
Urban multifamily next to fall. Way overbuilt and the market there is also going to implode.
I saw the headline of a Fortune Magazine article on the subject that says it will take as long as til 2040 for these markets to stabilize.
Exogenous shocks change everything.
2. The thing with office conversions, while I disagree about parking lots being a better choice, yes, many of the old buildings aren't that great for residential conversions either because of their age, condition, and floor plans.
I used to wonder why office building conversions don't have that many residents, but where you can fit 5 people in 1,000 s.f. in an office, that same space is required for a 1-2 person residence.
... with the city cultural plan, which has lots of flaws, they suggested s**** space in old office buildings could be used for arts uses. But I replied that over time DC doesn't have s**** office buildings, because they are rebuilt because of demand. But now that kind of velocity has dissipated. Not that it makes the space any more attractive for arts uses, but that's another issue.
and just like, SL Green sold a large NYC office building (across from Grand Central) for $2B at a nice profit.
So I'd say two things:
1) You can see how much this is a finance problem. EU office problems are just as bad, although they are not suffering from WFH disease. It's a question of higher interest rates and ability to refinance.
2) Way too much weak inventory that needs to be culled.
Also, WeWork is not dead YET -- it will be soon -- and that is going to release a lot more inventory.
offtopic:
https://on.ft.com/46scBSY
"Managed by Macquarie: the Australian group with a grip on global infrastructure "
https://www.bloomberg.com/news/articles/2023-06-21/to-break-the-urban-doom-loop-build-housing-and-transit?re_source=boa_related&sref=4NgeXq8Q
"I used to wonder why office building conversions don't have that many residents, but where you can fit 5 people in 1,000 s.f. in an office, that same space is required for a 1-2 person residence."
Seriously? Most people don't want to live in 200SF apartments, and they like kitchens, closets, bathrooms and living rooms. Office cubicles and apartments aren't the same thing. SMH
also this:
https://slate.com/business/2023/06/suburbs-driving-traffic-housing-affordable-solutions.html
"Not all sprawl is created equal, in other words. There are many places well within what’s conventionally considered “suburbia” that not only save residents an enormous amount of time and money by enabling shorter car trips. They also hint at a possible future where typical car trips are short enough to one day be replaced by other modes of transport, such as walking, biking, scootering, or other forms of new electric mobility. “You have people in every metro within 3 miles of five activity centers,” said Adie Tomer, one of the report’s co-authors. “That’s a biking distance.” There’s a 15-minute city in suburbia too. You just need to redesign the streets."
Basically the WALK-UPS that Lehman was promoting a few years ago.
True that suburbs have possibilities. Many do. Way more don't. Its not like Walkups are everywhere. Postwar development is tough to retrofit because it isn't easy to fix the street network.
Places with radial arterials emanating from the center cities often have town centers along them, which can be built upon. But all the property is privately owned, making it virtually impossible to fix. MoCo's North Bethesda is one of those rare efforts. Tysons too. However their unwillingness to address supersuperblocks makes it car scale not people scale.
Also early town development along arterials like around Woodward Avenue in Oakland County. Those are towns, and are intensifying. But it's taken decades to see overnight success.
... lots to read, thanks. Also some big deadlines taking up my time.
Oh, another problem with suburban recenterization is not being visionary enough. Not building density enough. Usually not investing in urban design. South Salt Lake has the advantage of transit, but they didn't do a real area plan, so its power to redevelop is stunted.
Holladay built a town center, not unlike Mosaic District, but way better, because it's a town already. But they don't have substantive transit and it is neither dense enough, tall enough, nor mixed use enough. I guess problem atic like Arts District Hyattsville (wrong type of housing, retail is single use, most people drive).
ULI reports in the suburbs links in the sidebar are still relevant 15+ years later.
And the Holladay design is quite good. I think I did a brief writeup in 2020?
https://www.inquirer.com/arts/arts-philadelphia-theater-concert-tickets-covid-20230727.html
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