Donjek :: The Cents of Place Blog

Donjek Project: Little Rock's MacArthur Park District Master Plan Wins Awards

Last fall, Donjek was hired to support a master plan process for MacArthur Park in downtown Little Rock, Arkansas, producing findings on feasible investment models for the City and its partners to reinvent the space. 

The process,  led by Conway+Schulte Architects of Minneapolis, has since received two awards for the MacArthur Park District Master Plan: A Citation of Urban Design from the Boston Society of Architects, and a 2009 Merit Award from the Minnesota Society of Landscape Architects. Congratulations to Conway+Schulte and their partners at the University of Arkansas Community Design Center and Oslund and Associates.

As part of the planning process, I examined multiple park revitalizations, searching for sustainable models for renovating, operating and maintaining quality urban open space. 

Pack Square Park in Asheville, North Carolina provides an example. Just over six acres, Pack Square Park is today the focus of a $20 million redevelopment effort involving the public, private and philanthropic sectors, at the helm of which is an effective conservancy.  Private capital will finance half of the renovation, and the new Pack Square Conservancy is raising an endowment of $2 million to bolster ongoing maintenance by the City of Asheville and Buncombe County.

Funding the capital and operating components of open space is a key area of public finance. Open space, in turn, is a key driver for effective places and a substantial influence on surrounding property values. If your community has an underutilized space or a park calling out for reinvention, contact us.

The New American Dream

How does the contemporary American Dream appear? Has it fundamentally changed in recent years as the public will to invest in infrastructure has waned, and Americans grapple with the implications of climate change, fluctuations in energy prices and the current recession? 

What types of development will be in demand in ten or fifteen years in our cities and statewide?

On Thursday, April 16, I will be contributing to an effort to address these questions, and I hope you join me for the event, starting at 3:30pm at the downtown Minneapolis offices of the Dorsey and Whitney law firm. Consistent with a presentation approach called pecha kucha, each of the four speakers will make a brief, rapid-fire series of statements to brew up and engage in a vital discussion.

In their current form, my comments will touch on Athens and Venice, how younger Americans are not as different as they may believe, business improvement districts, and why property taxes may be destined to join the buggy whip and the dodo bird. I hope you will attend and heckle the panel!

@Strib Forum: Deciphering the News in the Economic News

After a hiatus that included time eating grits in Dixie, I am back at the Cents of Place, sorting through multiple notes for articles. Primary among them are GIS-related services for placemakers available soon from Donjek, and new content on business improvement districts. The first is posted at the Star Tribune this morning, and is available here.

Private Sector: Repay Energy Improvements with Consequent Savings

Around the New Year, I received an ambitious invitation to provide research and policy analysis to University UNITED, as they pursue a stated goal to “make University Avenue the greatest street in America.”  UNITED is a coalition of regional boosters and community organizations currently working to maximize the impact of the coming light rail investment along the most prominent street connecting St. Paul and Minneapolis, Minnesota. I have since that time been coordinating research on business improvement districts and other policy measures for UNITED.

In addition to its advocacy of transit-oriented development and concentration of urban tax base generally, UNITED has of late become more involved in efforts to evaluate carbon emissions for University Avenue and the region, and facilitating efforts to engage private partners in reducing the local carbon footprint. 

UNITED is working with partners to fill a key role in the process of managing emissions:  With HK Climate Solutions, UNITED is aggregating warehouse and office space along University Avenue into packages exceeding one million square feet.  Together, these buildings are then inspected for energy-conserving capital improvements, which are installed by third partner Johnson Controls.  Broadly speaking, the cost of the improvements is financed by Johnson Controls and repaid from the energy savings generated.  Once the equipment is paid for – and it’s typically amortized over ten years – all of the energy savings (which range around 20-50%) flow to the building owners.

Eddie Krakhmalnikov and Executive Director Brian McMahon are running the program, dubbed the University Avenue Green Street Initiative.  Krakhmalnikov says the real estate investors involved in the retrofits know the energy improvements “have huge effects, and are good not only for their image but their bottom line as well.”

Yesterday’s Star Tribune article on municipal efforts to manage carbon emissions noted that in St. Paul’s case, only 2% of emissions are from public sources.  Anne Hunt, aide to St. Paul mayor Chris Coleman, suggested that “trying to engage the private sector is going to be a big challenge.”  The promise of the UNITED/Johnson Controls/HK Climate Solutions initiative may well prove it surmountable.

Incentivizing the Establishment of New Business Improvement Districts (“BIDs”)

Editor’s Note:  I am pleased to present guest writer Max Musicant.  Mr. Musicant hails from Minneapolis and is currently serving as Project Manager for the Greater Jamaica Development Corporation in Queens.  The commentary that follows reveals some of Musicant’s perspective on Greater Jamaica’s successful use of BIDs for local development.  Contact Max at mmusicant (at) gjdc.org. 

Business and property owners love business improvement districts – once they are in place and the benefits manifest themselves.  Still, with the benefits of business improvement districts being touted by municipalities across the country as well as in publications like The Economist, very little is being said about the often difficult task of establishing them in the first place. Despite numerous studies citing their benefit (including this recent one by the NYU’s Furman Center), it can be a difficult task initially to convince a property owner or merchant that they will see increased profits as a result of their higher property tax assessments. The positive impact of cleaner streets, more pedestrian amenities, and better marketing for the district can be more difficult to quantify than an increase in property taxes.

So how do you convince skeptical merchants and property owners that the trade off between a new assessment and increased business related services is a good one? The establishment of three BIDs over the past 35 years in Jamaica, Queens, New York City illustrate that linking the establishment of a BID to a targeted public investment can be a highly effective tool to bring merchants and property owners on board.

165^th Street BID
From 1900 to 1960 Downtown Jamaica was the historic shopping center of Southern and Eastern Queens, with 165^th Street as a one block stretch bustling with destination shopping anchored by the first non-Manhattan Macy’s department store. Starting in the 1960s revenues began to decline due to the opening of large suburban shopping malls with free parking on Long Island, as well as the perceived declining state of New York City as a whole. The merchants wanted to fight back and regain their premier position by creating a pedestrian mall along 165^th Street based on the highly successful Nicollet Mall in Minneapolis. Before constructing the pedestrian mall, City officials required the property owners and their tenants to form a special assessment district. The substantial public infrastructure investment created a large enough incentive for the merchants and property owners to establish the special assessment district. The new special assessment district also insured that the retailers would be able extract the maximum benefit from the new pedestrian mall through dedicated and on-going funds for its maintenance.

Jamaica Center BID
By the 1970s, Jamaica’s other commercial corridor, Jamaica Avenue, was a shell of its past self; all three of its major department stores had left, along with a bank headquarters, two newspapers, countless legal offices, and many quality shops. A major reason for the decline of Jamaica Avenue was that it had an old and run down elevated train running over the length of the roughly twenty-block shopping district. The elevated train tracks created a dark and dirty atmosphere that gave the impression that the area was unsafe. As the effort began to lobby City and State officials to replace the elevated with a new subway, the promise of an improved shopping experience along with the need for a unified voice and organizational capacity created the strong incentive to establish a BID. The eventual organization of a BID along Jamaica Avenue was crucial in the lobbying effort that successfully got the elevated replaced by a subway line in 1980. With the elevated train gone Jamaica Avenue was able to come back, and today it is thriving.

Sutphin Boulevard BID
In the mid-1990s the Port Authority of New York/New Jersey was searching the region for a location to build a terminal for its new AirTrain light rail link to JFK Airport.  The terminal would serve thousands of domestic and international travelers each day and give whatever neighborhood it was located in a customer boost as well as positioning it well as a potential “Airport Village”. The local development corporation, Greater Jamaica Development Corporation, lobbied hard to have the terminal built in Downtown Jamaica arguing that it was only a few miles from the airport, was served by four subway lines, 49 bus lines, eleven of twelve Long Island Railroad (LIRR) lines, and was only twenty minutes from Midtown Manhattan via LIRR commuter rail. Despite the locational advantages of Downtown Jamaica, the establishment of a BID was deemed essential; so as to ensure the area’s continued maintenance and upkeep. By using the possible construction of a direct mass-transit link to JFK Airport as a motivator, skeptical merchants and property owners were convinced of the merits of establishing a BID. The AirTrain was completed in Jamaica in 2004 and today the Sutphin Boulevard corridor is poised and prepared to become JFK Airport’s first “Airport Village”, in part because of the Sutphin BID.

As these three examples exhibit, substantial focused public investment can be a highly effective tool to establish a BID. Local stakeholders and public officials can encourage BIDs by making them a required precursor to an investment, or local merchants and property owners can organize a BID to lobby the powers that be for public action that would significantly improve their business interests.  The important lesson is that the ability to link the establishment or enlargement BIDs to other previously unrelated issues is a highly effective strategy to bridge organizational hurdles.

Parking: More Expensive Than We Thought

A dramatic reuse of an aging church for the new Stepping Stone Theatre required a variance of 104 parking spaces, or 92% of the requirement stipulated under the zoning code in St. Paul, Minnesota, meaning only 8% of the requirement is directly provided by the theatre's property. Do the City’s parking requirements create a structural oversupply of parking in the city? It’s likely. I will revisit parking requirements in coming months, during which city planners and stakeholders will engage the future of local parking policy. The focus of this post is to consider the public cost associated with requiring developers to meet the parking requirements currently in place.

Stepping Stone Theatre is a success story, providing children with training and experience in acting and stagecraft. Shows in the new theatre on Victoria Street
are sure to be well attended, leading the reader to ask:  How will the neighborhood accommodate the parking needs during performances? The theatre has arranged for patrons to park in existing surface lots at William Mitchell College of Law, located across the street, and at the House of Hope Church parking lot at Holly and Avon Streets one block away. A few scattered observations about the area we can use for housing or other uses, due to the shared parking arrangement in place for Stepping Stone:

• Each parking space requires 200-300 square feet of space. If the theatre had been required to purchase and renovate a site allowing them exclusive control and use of 113 spaces, surface parking would represent between 0.52 acres and .78 acres of land committed to a conspicuously low level of land use and productivity. This area is equivalent to between five and nine residential lots for single-family or duplex homes.

• A mixed-use development recently built in St. Paul, with structured parking underneath, is valued at $157/square foot of the lot; at this level, the area equivalent to 113 parking spaces would represent between $3.5 million and $5.3 million of market value. In the theatre’s new location, a site this size might accommodate 20-40 units of housing or mixed use development, leading to enhanced property and perhaps sales tax base.

The car is here to stay, so devising intelligent ways of storing cars during their many hours of non-use is essential for cities serious about their future vitality and financial wherewithal. Ideas worth exploration on this issue abound, but one in particular deserves note: Adoption of a payment-in-lieu-of-parking program. A sample of potential benefits:

• Allow building owners unable to satisfy a parking requirement to make payments to the City, parking authority or business improvement district, in return for parking credits

• Proceeds would be devoted to capital financing for structured and/or shared parking, and pay a parking liaison charged with connecting parties for shared parking arrangements

• The City could be separated into a number of “parkingshed” zones, so that payments would fund parking infrastructure and agreements in relative proximity to property owners paying the fees

• Potentially, a local market for parking credits could be established, further enhancing the efficiency of the program.

Parking policy is a confluence of real estate development, public finance, transportation and land use, and hence advocates in each of these realms get involved in parking discussions. In the theatre’s shared parking arrangements lies one critical tool for cities, the leadership of which must be absolutely focused on concentrating tax base with redevelopment and forward-thinking approaches to land use.

Photo: Courtesy of Stepping Stone Theatre.

An Interactive Calculator for Business Improvement Districts

One of the reasons that the business improvement district is an increasingly popular mechanism to finance essentially public activity is its flexibility, which I discussed in late August here.  In Minnesota, State statute allows a district to assess charges to finance capital or operating activities on the basis of “a reasonable classification of the types of premises to which service is furnished, or on any other equitable basis” [emphasis added].  For business and property owners, and for local stakeholders generally, language this broad provides the material to create a structure that serves an area’s unique needs.

Minnesota Statutes, Chapter 428A spells out the terms for establishment and operation of a special service district (this state’s incarnation of the business improvement district).  Regardless of whether the most vocal advocates of a special services district are business owners, elected officials or other community leaders, they are ordinarily asked right away what will be the basis for assessing fees. 

The Donjek worksheet available here gives a user the ability to “rough out” your own special services district.  The tool allows you to choose an annual budget, select a basis for assigning fees (remember that these four alternatives are just a sample), and add information for up to twenty parcels if you choose.  Or use the data and assumptions already on the worksheet, and note how changing the basis affects the level of fees assessed.

If your community or business association is interested in exploring how a business improvement district could enhance your efforts to support retail and office activity, contact me about how this type of tool can be expanded and made even more dynamic for your key audiences.

Pricing Out Parking

Television advertisements for cars never show drivers pulling in or out of a parking space, or trawling around the block looking for a spot. In fact, most ads show car and driver all alone on a scenic, recently resurfaced stretch of mountain road. If only the financial picture of managing car parking was so seemingly idyllic!

Cities struggle with parking for a host of reasons: In an aesthetic sense, it’s nondescript. Poor visibility, access, and lighting can create safety issues. Excess parking is also a very costly way to employ urban land. Instead of a structure that could be used to generate jobs, commercial activity and hence tax base (or, alternatively, an open space that bears related benefits to adjacent property and broader health and social benefits), excess parking represents a spoiler on the economy and treasury of a community. For one, Donald Shoup of UCLA has raised the profile of issues around how to manage and price parking (and how to use parking revenues to leverage strength in local economies); read his most recent New York Times editorial here, or look at his 2005 book on the same subject here.

The continuing dominance of the car is unlikely to fade in the near future, and cities and urban merchants recognize that providing parking capacity is important for commercial viability. Michael Monte, Director of the Community and Economic Development Office in Burlington, Vermont, noted during a meeting Friday that the Burlington Downtown Improvement District (a small, dynamic business improvement district) funds two hours of free parking downtown in order to strengthen its hand against suburban strip retail not far down the road. While at first blush this appears to be in conflict with Shoup’s ideas, the free parking complements a range of transportation demand management (TDM) measures including aggressive metering (I have a parking ticket to prove it), shuttling and park-and-rides, prominent bicycle storage facilities, and transit provided through a five-city transportation partnership. And the free parking is an incentive for customers to shop on foot in the area surrounding the Church Street pedestrian mall in downtown Burlington.

Near Macalester College, a group of retailers in Saint Paul, Minnesota formed an association to lease space for parking from a nearby church. Each retailer pays for their customers’ use of the space based on the distance from their front door to the small parking facility. In operation since 1994, the arrangement is a flexible, relatively inexpensive (annual budget is roughly $18,000) way to provide fifty parking stalls in an urban area characterized by a mix of residential and retail uses.

Of course, no parking is truly free: There are significant direct costs associated with building and maintaining parking surfaces or ramps. There are also indirect costs including congestion, the cost of increasing water runoff from the impervious surface, and the foregone cost of using the land in a more productive fashion. A great challenge for cities in coming decades will be recognizing and paying for these costs in ways that support the efforts of customers and employers in our cities.

Photo:  Opening Day, Lexington ball park, Saint Paul, 1929.  Courtesy of the Minnesota Historical Society.

Three Reasons to Consider Business Improvement Districts

There is genuine irony surrounding business improvement districts (“BIDs”) today. On one hand, many leaders of municipalities and chambers of commerce are unaware of how they could be used, or assume BIDs are suited primarily to huge urban centers. On the other hand, the BID (or in Canada, BIA – business improvement area) is an elemental way of pooling revenue together for collective purposes, and a tool with great potential for communities small and large.

There are over 400 BIDs operating in the United States alone, and many more in Canada and Europe. Organized as a public-private partnership among owners of commercial property, the impetus for forming a BID is ordinarily the importance of promoting a community’s downtown. They are formed locally, requiring majority approval from business owners and legal authority on the state or provincial level.

Here are three reasons to love business improvement districts as an economic development tool:

1. Custom built. The boundaries, the basis for assessing the charges from participants, and how the district chooses to brand its downtown can be tailored to what face the civic and business leadership most wants to show the world.

2. Local priorities drive. Communities have used BIDs for a broad range of applications. New York City’s fifty-five BIDs have over twenty years channeled $830 million into capital improvements, sanitation, beautification, public safety and tourist programs. In Los Angeles, the Downtown Center Business Improvement District has focused on business recruitment and retention, as well as serving as a housing information clearinghouse for prospective residents and developers alike. In Duluth, Minnesota, BID resources have been targeted to branding Duluth as a waterfront destination.

3. Suited to communities large and small. In addition to the metropolitan cases noted above, BIDs have been used to great effect by smaller towns, as well. Take the City of Salmon Arm, British  Columbia, a town of roughly 16,000 residents. The Salmon Arm Downtown Improvement Association was the first district in the province; its existence dates to 1974, before authorizing legislation was approved. Over the last thirty-three years, the district has focused on revitalization efforts and sponsorship of special events downtown.

Communities, planners and business leaders interested in exploring the benefits of a business improvement district can contact Jon Commers, principal at Donjek. We can assist in thinking through the process, running preliminary scenarios, and evaluating the use of BIDs to meet you goals.