Downtown Placemaking an economic development strategy Texas Downtown Association and Texas Main Street Program Presented by Jon Hockenyos and Scott Polikov | November 12, 2008

© TXP and Gateway Planning Group, Inc.

National Context and Trends

Current Situation - National Context Overview • •

•

Data says U.S. economy continues to grow, but recession is the obvious reality. Little improvement expected soon. Expectations for near-term: • US government borrows at least $1.4 trillion for FY 2009 – FY 2008 budget deficit at $455 billion. • Housing prices begin to shake out – credit availability now main issue • Consumers get weaker – rise in foreclosure/bankruptcy – spending shaky for rest of the year • Inflation has reversed course – oil should keep falling • Small silver lining – exports very competitive – both goods and services Near-term forecast: GDP up 0.5% this year, 0.7% next year, then moving back toward the 2.5-3% range over the next five years.

Current Situation - Conclusions •

•

• • • •

Efforts to deal with the financial crisis will be ongoing, even in the wake of the “buy-in” bill – re Fed move to buy commercial paper; push toward direct ownership of banks. Will help extend to other industries? Fed lowering rates to stimulate economy – flight to “quality/stability” makes this more feasible, although price isn’t really the problem at this point Recession here, and numbers will catch up soon enough. Best guess is the crisis shaves 2-3 percentage points off growth. Back to the future on lending/credit availability – much lower leverage, focus on end-use and fundamentals. Community banks may see a silver lining – “if I don’t trust the equities market, maybe I’ll invest in a local restaurant.” Time is actually great for planning cycle/implementation.

More Fundamental Trends Overview • • •

• •

Household diversity increases. Technology is pervasive, and changes everything. Adding value through the application of knowledge/talent is the basis of our core economy – directly in services, embedded in technology/art, or proximate through “experience.” Consumption choices become inter-twined with values/community. The world gets larger, and smaller – greater local focus.

More Fundamental Trends Implications •

• • • •

Land use – mixed-use and walkable – diffusion of activity, fairly constant “intensity.” Compete/appeal to both locals and visitors. – implications for cultural/recreation. Authentic. Housing as vehicle to reinforce/invent sense of community. Transportation - choices. Open space – diversity of type, size, and locations Economic structure – moving away from strict economies of scale – craftsman/artisan/locavore model - food as harbinger of things to come. Technology becomes tool, rather than end.

Placemaking Context

Land Use/Project Orientation Place-Making as Economic Development • •

As mentioned earlier, trends in the global economy are placing a premium on community character and quality of life. Growing realization that talent a large determinant of economic success – workers want to live in places with: • • • • •

•

destinations; public and civic spaces; vibrant social life; recreational opportunities; and reasonable commute.

Place-making is an important component of urban economic development.

Land Use/Project Orientation Tax Base Implications •

•

•

Developments featuring traditional urban form and mix of uses tend to have a more “durable” value – combination of land use patterns and architectural/design orientation. Greater density at relatively higher values than would be expected in comparable conventional developments – leads to higher tax base value. Analysis at George Washington University of the Kentlands in MD shows that, all being equal, houses commanded an 11.7 percent price premium – may be on the low side.

Land Use/Project Orientation Cost of Service Reduction • Muro & Puentes for Brookings identify two primary interrelated areas where urban form can impact public sector costs: • Economies of scale – greater density yields greater efficiency in provision of service (public safety, etc.) and infrastructure. • Economies of geographic scope – marginal costs decline when density rises in proximity to major public facilities (hospitals, etc.). • Expected 25-year savings: 11 percent on road-building; 6 percent for water and sewer; 3 percent for annual operations and service delivery.

Land Use/Planning Orientation The Charlotte Analysis Relative Frequency Plots

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PCI in the Charlotte area grew at a compound annual rate of 3.83 percent between 1995 and 2005, from $24,830 to $36,151.

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The analysis here suggests that had New Urban Development policies been in place at the beginning of that period Charlotte might have enjoyed an annual growth rate of 4.05 percent.

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Given a 2005 MSA population of 1.5 million, aggregate personal income in the region would have risen from $54.9 billion to $56 billion a gain of $1.1 billion.

0

Relative Frequency .2 .4 .6

.8

% Growth in Per Capita Personal Income by Land Use Policy Regime

3

3.5 4 4.5 5 5.5 % Change in Per Capita Personal Income for U.S. MSAs, 1995-2005 Land Use Regime

Traditional

Reform

Land Use/Planning Orientation Durability of Value: Lifecycle Analysis

Downtown Context

Types of Downtowns Downtown Typology • Major Urban Center: MSA core cities w/excess of 250,000 population • Suburban/Urban Markets: “Edge Cities” that are part of larger MSA • Stand-Alone Regional Commercial Centers: smaller communities that traditionally functioned as “go to town” markets.

Types of Downtowns Major Urban Centers: Significant Issues • Compete with other national urban centers for travel/tourism • Stem flight to suburbs (people, jobs, dollars) • Balance redevelopment and gentrification • Traffic management/transportation options

Types of Downtowns Suburban/Urban Centers: Significant Issues • Compete with other communities in the region for tax base • Balance household growth against employment and commercial activity • Maintain unique identity and community values • Manage spill-over urban issues from core city • Traffic management/transportation options

Types of Downtowns Standalone Regional Centers: Significant Issues • Provide sufficient amenities/opportunities to attract and retain working-age adults • Stem possible loss of retail demand to urban centers elsewhere • Maintain unique identity and community values

State of Downtown - National Who Lives There? 10.1% 18.9%

29.5%

35.6%

71.0% 29.5% 35.2% 41.0% 29.3%

Downtown is disproportionately non-traditional family Downtowns

Non-families

Cities

Families without Children

Suburbs

Families with Children

State of Downtown - National Who Lives There? 50%

Share of Residents with Bachelors Degree

45%

Downtown is increasingly well-educated

Downtowns

40% 35% Suburbs

30%

Cities

25% 20% 15% 10% 5% 0% 1970

1980

1990

2000

State of Downtown - National Who Lives There? 30%

25%

Share 25 to 34 Share 45 to 64

Share of Age Group

20%

Share 35 to 44 Share 18 to 24

15%

Share 65 Over Share Under 18

10%

5%

Downtown is increasingly working-age

0% 1970

1980

1990

2000

Downtown Redevelopment Keys to Success • Mix of mutually reinforcing land uses is required, with market best indicator of general direction • Activity must be relatively constant and balanced – build on what already exists • Key entertainment & cultural attractions must be authentic • Public spaces are an important part of the mix, as is mobility and way-finding • Walkability is crucial using design for connections

Strategic Considerations

Building on Historic Character Roanoke, Texas

Babe’s on Oak Street serves 175,000 meals a year.

Analysis of existing conditions—potential character zones

New master plan based on character zone analysis

Form-based code to implement master plan

Fiscal impact analysis established the tax base potential of the new master plan and form-based code.

The analysis provided basis to commit $8 million public funds for Oak Street improvements.

Linking Land Use and Transp. Design McKinney, Texas

Downtown McKinney Master Plan

During the charrette process, the Gateway Planning Team analyzed the historic square and its future potential, concluding it had excess roadway capacity while at the same time need for café seating.

Reducing from 3 lanes to 2 allows for expanded sidewalks and a net increase in parking, while maintaining sufficient traffic capacity…

…the new café seating on the square spurred business expansion in anticipation of the improvements.

Linking Land Use and Transp. Design Duncanville, Texas

Existing Main Street in Downtown Duncanville

Illustrative Main Street Master Plan and Section

Master plan, regulating plan and downtown form-based code

Mixed use block on slip lane

Fiscal Analysis 5-Year Phasing New retail in mixed use (sqf) New retail in live/work (sqf) Town homes (units) Live/work (units) Office (sqf) New lofts (units)

Phase 1 36,000 23,400 109 39 28,625 115

Phase 2 51,250 14,400 0 20 25,625 96

Phase 3 230,250 0 0 0 111,875 132

Phase 4 46,500 0 0 0 15,125 65

Fiscal Analysis Assumptions • • • • • • • •

Current tax base in area is $48.2 million Commercial and office space is estimated to be valued at $150/sqf Live/Work spaces are valued at $225,000 per unit Townhomes are valued at $150,000 per unit Lofts at valued at $130,000 per unit Retail sales are estimated to average $200/sqf City of Duncanville property tax rate is held constant at 0.696% City of Duncanville sales tax rate is held constant at 2%

Fiscal Analysis Incremental & Cumulative Tax Base Gain New retail in mixed use (sqf) New retail in live/work (sqf) Town homes (units) Live/work (units) Office (sqf) New lofts (units) TOTALS

New retail in mixed use (sqf) New retail in live/work (sqf) Town homes (units) Live/work (units) Office (sqf) New lofts (units) TOTALS

Phase 1

Phase 2

Phase 3

Phase 4

$5,400,000

$7,687,500

$34,537,500

$6,975,000

$3,510,000

$2,160,000

N.A.

N.A.

$16,350,000

N.A.

N.A.

N.A.

$8,775,000

$4,500,000

N.A.

N.A.

$4,293,750

$3,843,750

$16,781,250

$2,268,750

$14,950,000 $53,278,750

$12,480,000 $30,671,250

$17,160,000 $68,478,750

$8,450,000 $17,693,750

Phase 1

Phase 2

Phase 3

Phase 4

$5,400,000

$13,087,500

$47,625,000

$54,600,000

$3,510,000

$5,670,000

$5,670,000

$5,670,000

$16,350,000

$16,350,000

$16,350,000

$16,350,000

$8,775,000

$13,275,000

$13,275,000

$13,275,000

$4,293,750

$8,137,500

$24,918,750

$27,187,500

$14,950,000 $53,278,750

$27,430,000 $83,950,000

$44,590,000 $152,428,750

$53,040,000 $170,122,500

Fiscal Analysis Fiscal Impact Existing Value: $48,206,147

Property

Property Tax

Retail

Sales Tax

Total Tax

Value

Revenue

Sales

Revenue

Revenue

Existing + Phase 1

$101,484,897

$370,820

$11,880,000

$237,600

$608,420

Existing + Phase 1-2

$132,156,147

$584,292

$25,010,000

$500,200

$1,084,492

Existing + Phase 1-3

$200,634,897

$1,060,904

$71,060,000

$1,421,200

$2,482,104

Existing + Phase 1-4

$218,328,647

$1,184,053

$80,360,000

$1,607,200

$2,791,253

The redevelopment approach proposed offers the possibility of more than four times the current property tax base, with total additional fiscal impact approaching $3 million

Planning for Realistic Absorption Owensboro, Kentucky

Strategy: leverage the arts and entertainment for national and local tourism and attract more residences downtown

Owensboro Downtown Charrette Market Study Downtown Private Sector Growth Baseline demand indicates that downtown Owensboro likely will absorb development of: • • • •

approximately 300 to 500 residential units; 350,383 sq. ft. of office space; 137,294 sq. ft. of retail/restaurants; and 225 hotel rooms

This new development could result in an aggregate value of approximately $98 million (in $2008).

Illustrative Charrette Master Plan

Planning TIRZ Support for Downtown El Paso, Texas

Catalyst Projects Projects of initial 2015 Downtown El Paso Plan

Catalyst Projects Emerging projects since 2015 Plan • • • • •

Double Tree Hotel Mills Plaza District (public and private) San Jacinto Plaza Federal Courthouse Florence Street Housing/Mixed use

Linkages (El Paso TIRZ #5 Support) Emerging Catalyst Projects and Public Spaces

Linkages Leveraging Streetscape, Public Art, Way-finding

Streetscape

Public Art

Wayfinding

TIRZ #5 Financial Forecast Economic Impact of Downtown El Paso Development Direct Impact (millions) Economic Activity Employment Total Impact (millions) Agriculture, etc. Mining Utilities Construction Manufacturing Wholesale trade Retail trade Transportation & warehousing Information Finance and insurance Real estate and rental and leasing Professional & scientific services Management of companies Administrative services Educational services Health care and social assistance Arts, entertainment, and recreation Accommodation & food services Other services TOTAL

Retail $195.0 1,050

Lodging $10.4 165

Economic Activity $0.77 $0.10 $6.91 $1.81 $19.33 $9.37 $104.77 $10.67 $15.66 $12.51 $34.94 $7.14 $2.13 $159.57 $2.99 $18.31 $1.19 $19.00 $8.29 $435.46

Office $145.2 1,005

Total $350.5 2,220

Earnings $0.11 $0.02 $1.14 $0.63 $3.07 $2.89 $34.07 $4.05 $3.95 $2.77 $2.36 $3.39 $1.05 $53.53 $1.32 $8.59 $0.44 $6.89 $2.58 $132.85

Jobs 11 0 14 17 66 51 1,472 114 77 55 78 69 23 1,956 57 237 28 381 108 4,814

Conclusions • Competition for economic activity makes authenticity crucial in attracting people and firms—build on what you have • Look for opportunities to redesign transportation to leverage urbanism • Facilitate adjacency value creation via form-based codes • When goal for public investment is to incent private investment, gauge absorption carefully • Investments for regenerative activity should focus on pedestrian linkages • The sum is always greater than the parts

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