Donjek :: The Cents of Place Blog

The Business Case: Connect to Your Surroundings

"We're at a very interesting inflection point in real estate history. The next 10 years will be very different than the last 30." – Peter Miscovich, Jones Lang LaSalle, 2010

Connections bring foot traffic, and foot traffic underlies prosperous places. We depend on and value connections in different ways than in the past. Census data released this year confirms falling commuting by car and rising use of transit, bike commuting, and walking. America’s two largest demographic groups – Baby Boomers and the “Millennials” – are aligned in driving this trend.

Stronger links between buildings and their surroundings have long been values of urban designers. Increasingly, because these links present a business case by reducing vacancy and increasing lease rates, commercial tenants, property managers and owners are focusing on connections to neighboring property.

Connections nearly always involve interaction with both private and public sectors. Consider these examples:

• Average space per employee has fallen from 500-700 square feet to 200 today, and is still dropping. Accommodating the needs of more employees, and maximizing spillover benefits, involves the public and private sectors, and can distinguish property owners and increase demand and values.
• In 2011, transit in the region will move over 80 million passengers, including 69% who choose transit instead of their cars. In Minneapolis, the number of bicycle commuters increased by 27% from 2007-10. Property owners and managers prepared to engage these audiences will link to a growing base of consumers arriving by bicycle and foot. 

Donjek has demonstrated expertise in real estate finance, public/private sector negotiations, and planning to help owners, managers and other users of urban real estate increase the function and desirability of property. More specifically – I can work with you to:

• Enhance visibility, increase safety, and boost foot traffic
• Create value by taking advantage of proximity to nearby large employers or institutions
• Produce real-time analysis of TIF cash flow of any district that may contain your property
• Monitor the development process of nearby parcels in transition, for impacts on your transportation, zoning, or other assets
• Create communication about these initiatives in a way that sets you apart.

The preferences of businesses and their customers are evolving. Tenants and their customers are leading the way, and you have an opportunity to attract and retain them with innovative strategies.

Related Articles:

• Mobility Understood Best at Metro Scale
• Donjek Project: Picturing Value in Walkable Neighborhoods
• The Big Sort: A Small Summary

Mobility Understood Best at Metro Scale, Not State

Analysis of 2010 Census data reveals that Americans are relocating at the lowest levels recorded since the public began tracking these trends in 1948. Mobility is influenced by conditions in housing and labor markets, which vary substantially by region or metropolitan area, and are continuously shifting.

That's why I take issue with an interpretation recently put forth by respected author and speaker, Richard Florida, in a pair of short posts ("America the Stuck" and "The Geography of Stuck"). He distills his interpretation into a claim that "America can be divided into two distinct classes, the stuck and the mobile." These "classes," in his view, are not only sorting themselves geographically, but by state: Residents of coastal states are mobile, others are not.  

In my view, the Census data really don't support this narrative. As Florida and others have documented, America's economic and cultural landscape is increasingly metropolitan. Those metro areas with the highest proportion of residents born in another state are found primarily in states that Florida highlights as "mobile":

These data don't support the "two class" thesis for two reasons. First, while clearly in-migration is good for regions in forms including new ideas, cultural vitality and diverse labor pools, the specific kind of mobility Florida is calling out doesn't appear to correlate with economic strength. The right column in the table shows each region's rank (out of 366) in income growth from 2009-10; these aren't the nation's star performers. Second, as the map below illustrates (click on it for a larger image or see the source brief here), mobility continues to occur within states, from rural or micropolitan regions to larger metros and among metros. This is occuring in the states he calls mobile, and in many of the states he deems "stuck." As it turns out, neither label accurately reflects recent trends.

There are structural shifts underway, and Florida has named some aspects of these in recent years. This most recent chapter strikes me as a departure from his record of nuanced analysis. Some American communities are clearly less mobile than others, but these dynamics haven't developed in clean ways that follow state boundaries in an either/or fashion. They've developed by region, subregion, and neighborhood - and that's where our focus belongs.

Related Articles:

• Productivity and Design Merge in the Gated City
• Urban Economies: Going with the Flow
• MSP Metropolitan Business Plan (and Executive Summary)

Donjek Projects: Upcoming Speaking

I'm working on the concluding phases of work on an urban park-oriented redevelopment analysis, a reuse study for a historic manufacturing building, and a feasibility study for a commercial land trust. As each comes to fruition, I look forward to sharing results with you in the coming weeks.

In the meantime, I'm preparing for two events where I will present as a panelist. On October 5, I will be in Washington, D.C. to participate in an intensive one-day conference on economic vitality, coordinated by the Living Cities Integration Initiative. I will be joining Tracey Nichols, Director of Economic Development, City of Cleveland; Olga Stella, Vice President of Business Development for the Detroit Economic Growth Corporation; Leslie Anderson, Executive Director of New Jersey Redevelopment; and Paul Graziano, Commissioner of Housing & Community Development for the City of Baltimore.

The following week, I look forward to walking down the street to the University of Minnesota's Saint Paul campus on October 12 for the 27th Annual Conference on Policy Analysis. The conference topic is this year focused on defining the public good and the role of government in the state; I will participate in a panel with Caren Dewar, Executive Director, Urban Land Institute-Minnesota; Ann Mulholland, Vice President with The Saint Paul Foundation; and Mark Vander Schaaf, Director of Community Planning and Development at the Metropolitan Council.

I'm looking forward to the opportunity to present in each of these forums; even more, anticipating all that my colleagues will have to say on the issues of urban economics and policy that form the core of my work.

Last: While I'm unable to attend (and post from) the Inner City Economic Summit to be held by the Initiative for a Competitive Inner City in Chicago on October 3-4, I hope readers present there will share a summary for the rest of our collective benefit.

Productivity and Design Merge in the Gated City

Since his publication in the New York Times' Sunday Review this past weekend, Economist magazine correspondent Ryan Avent has been showered with digital ink following release of his short book, "The Gated City." Based on his Sunday excerpt, it's clear his fundamental argument is that land use and productivity are inextricable.

Amen.

The policy arena is stocked with arguments over which strategy or which sector provides the most efficient return for job creation (for a sample, search "jobs per dollar" on Google - although, as this commentary indicates, your results will be different than mine).

This dialogue, however, does not usually consider the spatial issues involved. How many jobs, and of what type, are created across a city or region? Employers rely on a workforce that is trained and educated, able to reach the workplace reliably, and able to transport a product - by rail, by digital means, or other mode of movement. Employers and the economies of which they are part also rely on relationships that form networks around industries, innovations, or particular skill areas. Success or failure in each of these areas is all about how our cities are designed and how intensely infrastructure is used.

It's relatively simple to evaluate job creation initiatives if direct public expenditures and jobs ("full time equivalents") are the only terms examined. As I suggested a few months ago, Steven Johnson and Ed Glaeser illustrate this would miss a substantial part of the essence of why and where jobs are created. The last few days' eruption of interest in Avent's message indicates we're headed for a more nuanced, comprehensive view of how urban design and productivity are linked. That's a very good thing.

*Postscript: Thanks to Ryan Avent for including this short post in his list of commentary pieces on the Gated City. See the others here.

In Search of Inzichten

Over the last several years, readers of these periodic posts may have noticed I have had a longtime appetite for inzichten uit de Nederlandse stedebouwkunde – insights of Dutch city planning. I’m intrigued by the international nature of Dutch culture, its democratic roots, and the relationship of their planning to scarcity of land. The constant threat of flooding through their history has stimulated shifts in each of these areas.

This week, I leave for travel that will include time spent with family in Holland, and I’m looking forward to exploring another tradition’s approach to city building and public finance. A few examples I’ve touched in here at the Cents of Place include:

• Understanding the value created both by access to transportation, and by a mixing of real estate asset types, remains a driver in Donjek projects. The Dutch connection is diluted in this piece, but I cited evidence from the Lowlands suggesting the premium for commercial real estate located near rail stations exceeds 10%.
• Highlighting the historical connection of urban success stories and concerted public investment, I cited the model of Amsterdam as it emerged from the Middle Ages in reviewing Joel Kotkin’s 2006 book, “The City, a Global History.”
• As a past adjunct instructor of economics, I could not be expected to forego some consideration of the fascinating period of Dutch history that centered on the mania of the tulip bulb. Similarly, I could not be expected to forego the comparison to the housing bubble, which I did in 2008.
• Given the intensive construction underway outside the Donjek office, which will lead to easy access to nearby light rail transit, I’ve been reminded of the promising product of Dutch firm, the Ooms Avenhorn Group. Using street infrastructure for more than multimodal transportation, the geothermal systems collect and store warm and cool water beneath road surfaces for climate control in nearby buildings.

This is a small, unscientific sample of ideas. There are a great many who have both a more authoritative and more comprehensive perspective on Dutch planning and development. Call me a student. With luck, I will bring home more ideas for applying the most effective Dutch practices in American central cities.

Photo: Courtesy Flickr/Tashenka

Urban Economies: Going with the Flow

Reading Ed Glaeser's Triumph of the City (which I mentioned in this post on transfer of ideas in cities), I learned that in the year 1816, transporting goods across land in early America cost an equivalent amount to shipping it from Boston to London. The comparative relationship tilted settlement and trade distinctly toward our waterways; construction of the Erie Canal and the Illinois and Michigan Canal completed a loop that connected four corners of the developing country. Between 1850 and 1970, at least five of the ten largest U.S. cities were located on this trade circuit.

Waterways remained critical as arteries to transport commodities and other inputs for trade and commerce; they also provided the doorway through which most entered frontier towns like my place, St. Paul. Over time, comparative pricing and relationships to rivers changed - railroads, then cars and trucks, airplanes, and digital thoroughfares provided radically cheaper modes of overland movement. 

Ports facilitate accumulation of value through transfer of material from one transportation mode to another. In the past, the fact that river ports fronted riverways was only significant in that barge transportation was cost-effective. As freight rail (for long runs) and trucks (for shorter runs) compete with river navigation, many river ports have declined. Minneapolis' Upper Harbor Terminal, for example, has managed falling volumes in recent years, the region's barge traffic dominated by the St. Paul (downriver) harbor.

Today, the relationships of "prices" continue to shift. In particular, the pressure to attract and retain talent is familiar to American mayors and business operators across the country.  In addition to creating recreation amenities, urban riverfronts also create collective open space that draws the eye through the city landscape. When perceived as safe and clean, access to river frontages creates substantial property value and economic potential. In addition to moving things in and out, the role of some riverfronts has expanded to focus on use as open space magnets that  make places more distinct and attractive. 

Our river, the Mississippi, formed and shapes both Minneapolis and St. Paul in important ways. Earlier this year, a team to which I served as regional advisor won the Minneapolis Riverfront Design Competition, now evolved into the Minneapolis Riverfront Development Initiative. I've been engaged for several months managing a project focused on strengthening the connection of downtown Minneapolis to the Mississippi via the Gateway. Comparable efforts have been underway in St. Paul over the last twenty years, including the Great River Park master plan developed in the last year. This subject, conveniently, presents an opportunity for field work: I'm looking forward to August visits to Roman river towns Maastricht, Ghent, and London.

Open space and riverfronts cannot by themselves replace key economic functions such as port activities. Still, as larger forces transform cities, the prominence and role of rivers continue to be key in distinguishing prosperous regions.

Photo courtesy of pmarkham/Flickr.

Charles Landry: City Making in Minneapolis Saint Paul

Expectations were high for remarks by urban theorist Charles Landry, given late last week at Minneapolis' Guthrie Theater thanks to program partners at Metropolitan Council and the McKnight Foundation. I shared these expectations, due in part to this article, which described Landry's focus as "the complex blend of elements that most effectively draw talented people to specific cities and regions." In my view, interesting work with immediate relevance.

True to form, Landy offered a compelling and global perspective on what differentiates successful cities and metropolitan areas from those in decline. Each region's approach is key: Is the dominant strategy an "urban engineering paradigm," or "creative city making"? Presented directly to us in the Minneapolis Saint Paul region, Landry asked: Is this a city of projects, or is the project the city?

Most of the audience, I believe, share Landry's underlying confidence that urbanization can and ought to bring about a greener, more productive, healthier and happier world. In that vein, he offered five threads found in great cities. In each case, I've offered editorial comments:

• Anchorage: What is a region's gravity, which attracts people and ideas? The importance of robust networks of people and activity - industry clusters - can't be understated. It's true for people involved in chemistry, and for people involved in music (and for those involved in both at the same time!). See the Metropolitan Business Plan for more.
• Possibility: What's the potential for the place? Youth development, education, and workforce development (for the young and mature) are the critical areas of possibility for a place. No urban region can thrive without investing in the young, and their potential to generate new ideas.
• Connection and Reconnection: Beyond the need for physical connections to give community members and workers access to their most significant destinations (whether work, school, civic, religious), successful regions maintain strong bonds well beyond their borders. High rates of immigration and import/export activity, and the ability to communicate a region's message in the global arena are two examples of such ties.
• Learning: To me, Landry's citation of the importance of learning extends beyond the realm of education, which (as I suggested above) is a cornerstone for effective regions. Learning needs also to include the degree to which governance is flexible and intelligent enough to incorporate emerging trends and past experience, in planning for the future.
• Inspiration: Establishing shared values and shared identity are crucial, so that a region can articulate what is its inspiration. Why are we here? What do we have to communicate to the world? What is our contribution to the cultural, economic and political life that surrounds and includes us? 

Landry's framework of these five threads offered a provoking platform to consider how regions like Minneapolis Saint Paul move forward. Unfortunately, the speaker's efforts to speak in detail about the Central Corridor LRT line (and even specific sites along it) were neither specific nor reflective of context. He also appeared unprepared to discuss how manufacturing and other industry play a role as economic engines, job providers or as gateways for workers to earn good wages.

As Ed Glaeser argues in the Triumph of the City, places are powered by people, not buildings. Landry's presentation was worthwhile as a full (if high-altitude) depiction of how "creative city making," focused on harnessing talent, can craft durable regions in the 21st century.

Making for Leaky Places

Note: This post was also published at the Strong Towns blog - please feel free to visit there as well. 

We’re drawn to the challenge of remaking places that are more durable, more competitive, and more attractive for people who live there. If we systematically rethink street width, the basis of land and property tax, and the high-risk design we’ve adopted for many American communities, we’ll have more resources to invest in our real assets – people and their skills. Our interest at Strong Towns is to change physical layout as a way to restore order to our financial house, and to reduce the risk we bear to national and global trends such as climate and energy instability.

Tight budgets on the state and federal level – surely promising to get tighter still, as our previous post described – are helping focus attention on more deliberate and intense use of existing infrastructure. Whether we’re talking about the High Line, stormwater management at the Gophers football stadium, or the Complete Streets discussion, policy is increasingly structured around the search for multiuse infrastructure. In each case, literally doing more with less translates to more a productive system.

And while it may be impolitic in some quarters to say so, together we represent another key form of infrastructure: Developers and traders of ideas. Innovators in every sector are connected through “liquid networks,” says entrepreneur and author Steven Johnson, in his new book “Where Good Ideas Come From.” Approaching innovation from a historical perspective, drawing on brain research and sociological literature, Johnson makes a case that won’t surprise all the people who make up the Strong Towns forum: How we design places and use land directly impacts how innovative is the activity taking place within it.

Building design can form rich environments that encourage ferment and exchange of ideas, Johnson notes. Built in 1943 as a temporary structure, Building 20 at MIT housed faculty and student research in an open plan easily reconfigured for new projects. Over fifty years of adaptation, Building 20 produced significant research across fields including IT, linguistics and acoustics.

Inspired by models like Building 20, Microsoft in 2007 built a headquarters for its research division designed explicitly to cross pollinate employees’ ideas. Apparently also inspired by its generic moniker, Microsoft named their facility Building 99. “Building 99 – like Building 20 before it – is a space that sees information spillover as a feature, not a flaw,” writes Johnson. “It is designed to leak.” Walls feature surfaces for writing and erasing. Work spaces are all modular and can be built and rebuilt as the project or day inspires. Research confirms that active horizontal, diverse social networks are multiple times more innovative than uniform, vertical ones. Leaking is valuable.

Cities do best to leak too. That’s one of the themes revisited through economic geographer Edward Glaeser’s “Triumph of the City,” released early this year. Glaeser documents the rise of single-industry marketplaces – whose collapse is now epitomized by conditions in Detroit – which, through sheer dominance, eroded the quality of information spillover among workers. Johannes Gutenberg invented the printing press by combining use of winemaking tools from his native Rhineland, his metallurgy background, and existing Chinese printing methods. Dialogue led to tinkering, tinkering led to more dialogue, and innovation emerged. On a modern scale, the same process takes place every day, and it’s much more likely to take place in physical environments that connect people in consistently unexpected ways – cities.

Cities themselves aren’t the source of innovation, and Glaeser warns of the error of “confusing a city, which is really a mass of connected humanity, with its structures.” Still, our structures and our physical layout can serve to intensify idea exchange, or inhibit it. A compelling public and private interest exists to support the leakiest land use and urban design we can devise.

Donjek Projects: Victory in the Minneapolis Riverfront Design Competition!

One of multiple reasons for my extended silence on the Cents of Place blog has been my involvement in the intense exercise of the Minneapolis Riverfront Design Competition. I posted in early November that my team, led by Kennedy and Violich Architecture (KVA) of Boston and the Tom Leader Studio of Berkeley, had been among four teams selected from over fifty to engage in a second round of competition.

This morning, the competition's supporters and sponsors (including the Walker Art Center, the University of Minnesota's College of Design, the Minneapolis Park and Recreation Board, the Minneapolis Parks Foundation, and others) gathered on Nicollet Island to announce that our team is the winner of the competition!

The process, inside our team, unfolded like a charette, only on a broader and deeper scale than I’ve seen before. Since early November, this team pulled together volumes to inform a thorough approach to a complicated river corridor. There are many meeting points in the project area that each represent opportunities: Where North meets Northeast, river meets shores, trails meet bridge heads, industrial meets other land uses, central business district meets neighborhoods. Hydrology, bridge design, area culture and history (indigenous, pioneer and more recent), land use economics, institutions, equity of access to parks - these topics and many others received focused, research-driven attention. Led by Tom Leader, and Sheila Kennedy and Frano Violich of KVA, this team produced an innovative approach to tie these issues all together in physical space.

It's a privelege to be a member of this team. I've also marveled at the compelling mix of collaborators who made this possible, from the sponsors to standout project manager Mary DeLaittre. That we will together have the opportunity to continue working, focused on a particular site to be determined on the Upper River in Minneapolis, promises to be a professional highlight.

See the final proposal here.

Comment on the Minneapolis Saint Paul Metro Business Plan

Last week, Mayors Chris Coleman of Saint Paul and R.T. Rybak of Minneapolis took the stage as part of the Global Metro Summit, an event held to elevate the metro-scale business plans developed by thinkers in Minneapolis Saint Paul, Seattle and Cleveland, in conjunction with the Brookings Institution. The event (video and print materials available here) provided an opportunity for these three U.S. regions, as well as counterparts from Barcelona, Munich, Torino and Seoul, to highlight the importance of approaching economic development on a metropolitan scale.

I have served as the project manager of Minneapolis Saint Paul's role in this work (see a previous piece about the work), and continue to find the idea of business planning to be an effective way to analyze strengths and weaknesses in those elements that differentiate those regions that thrive.

The draft plan explores how fresh, disruptive ideas are developed, passed through networks, cross-applied and used to create businesses and jobs. It considers to what degree all students - young and older - are able to access education and training opportunities, and transfer these skills to a workplace setting. It addresses the networks that comprise "clusters" among industries or among people involved in the region's high concentration of business headquarters, and how the region's systems and development pattern (transportation, housing, open space) serve or undermine competitiveness.

I hope you'll take a look at the materials. Please take time to look at these products and share your response. Specific questions about content may be directed to me at commers@donjek.com, and comments or changes may be sent to Snezhana Bessonov at Urban Land Institute - Minnesota, at snezhana.bessonov@uli.org. The documents are:

• The Minneapolis Saint Paul Metro Business Plan (discussion draft)
• The region's investment prospectus (pictured above)
• The presentation given by Mayors Coleman and Rybak to the Global Metro Summit in Chicago, Illinois on December 7.