Donjek :: The Cents of Place Blog

@Strib: Reconnecting Minneapolis' Seven Corners and West Bank

Like many urban and rural places, Minneapolis and St. Paul each have plenty of underutilized land area. 

One of Minneapolis' most striking examples is the Washington Avenue "trench," a 1960s-era highway that today splits the Seven Corners area, the University of Minnesota's West Bank, and the Cedar-Riverside neighborhood. Current plans call for construction of light rail transit service through the middle of the trench, a station beneath the 19th Avenue bridge, and a pedestrian/transit mall on Washington Avenue just across the river. In tandem, these plans translate to an opportunity for fundamental rethinking of how the trench inhibits the health of the places around it. 

I have posted a piece about these issues at the Star Tribune (link to that post), and I have included here at the Cents of Place, additional images created by University of Minnesota graduate students of architecture working with adjunct professor Mic Johnson, also of Ellerbe Becket. My thanks to Mic for his permission to include these images.

Donjek Project: Picturing Value in Walkable Neighborhoods

Over the last several months, I have been working with developer and consultant Michael Lander (Lander Group) and urban designer Peter Musty (Peter Musty LLC) to develop a concise, visual statement about the prospective impact that transportation investments can stimulate. Hopefully, you'll find the graphic product below clear and persuasive - and you can download a pdf version here if you prefer.

Quantifying Open Space Benefits: Donjek Presentation at MRPA Conference

Today, I am presenting to the annual conference of the Minnesota Recreation and Park Association on the costs and benefits of open space, with Jenna Fletcher, project coordinator of Embrace Open Space. View my part of the presentation here, and see Jenna's presentation here.

Intuitively, we all agree that parks, open spaces, greenways and natural areas have economic value. The real estate marketplace recognizes this: Studies consistently indicate that residential property owners pay up to a 30% premium to live within walking distance of a park. Similarly, access to bike and pedestrian infrastructure such as greenways also boosts property values.

Despite a surge in academic and practitioner analysis of open space premiums, many policy makers continue to view parks as cost centers, as opposed to stable assets that consistently support social and economic activity, as well as tax base, located nearby.

The case for identifying the benefits of open space more effectively is important. In addition to its relationship to residential and commercial property values, local policy stands to be improved by better information about the economic value of the physical activity, non-motor transportation, stormwater management and other benefits.

We have the tools in the form of property data sets and GIS analytics. We have the need to respond to overwhelming budget pressure. And we need urban design that helps rather than hinders our efforts to reduce greenhouse gas emissions. Each of these factors call for a change in the way we understand, talk and make decisions about the role of open space in our cities and towns.

Transportation Stimulus Projects Should Reflect Modern Economy

A New York Times analysis of over 5,000 transportation-related stimulus projects released today indicates that less than half of the funds are slated for investment in metropolitan areas. The analysis suggests that these transportation investments have been selected based on formula as opposed to what the American economy of today looks like.

As I’ve recounted at the Cents of Place in the past, the nation’s 100 largest metropolitan areas:

• Use 12% of the U.S. land area;

• House and employ 65% of our population;

• Generate 78% of patent filings; and

• Create 75% of total U.S. economic activity.

The report shows that the Minneapolis-St. Paul metropolitan area, while producing 1.36% of the country’s economic activity, is the location of 0.72% of the transportation-related stimulus projects authorized. Readers will note that the seven-county metro area contains just 12% of the state’s total lane miles. So doesn’t it make sense that stimulus funds reflect lane miles?

In its most succinct form, the answer may well be no. Here’s why: The federal stimulus legislation will provide capital grants to build, renovate, and replace transportation infrastructure – but it does not fundamentally address how state and local governments will pay for maintenance and operations. Over 87% of Minnesota’s total lane miles are county, township and city streets, paid for from limited state and local sources. Overbuilding may create long-term costs that will stifle prosperity in greater Minnesota, not the reverse.

Just ask my colleague Chuck Marohn, President of the Community Growth Institute, who provides planning and zoning expertise to small towns across Minnesota. In recent weeks, Chuck has blogged extensively about how and why our current approach to locating infrastructure investments is financially unsustainable. Moreover, it undermines the quality of life in communities like Brainerd, Minnesota, where Chuck grew up.

In metropolitan areas, the higher concentration of economic activity will allow for the funding of ongoing maintenance of road, rail and other systems, which will in turn bolster the metro economy as well as the statewide economy. Future stimulus funding, and the coming debate about a new federal transportation bill, ought to be designed in this light.

Photo courtesy of Resedabear/Flickr: http://www.flickr.com/photos/resedabear/ / CC BY 2.0

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!

Velcro, Thorny Devils, and Placemaking

Last April, en route to a conference of the International Economic Development Council in Washington, D.C., I encountered a feature story in National Geographic and became lost in the journey.  The topic? The history of Velcro.

Among other things.

Velcro (photographed up close, at right) was invented in 1948 by Swiss chemist George de Mestral who, according to the article, was inspired by the effectiveness with which burrs would become entangled in his dog's coat.  De Mestral could be counted as a pioneer among modern biomimeticists, who seek to create innovation based on the aerodynamic design of a fish's body, the ability of a thorny devil to "drink" by wicking water up its legs from the ground, or the way a desert beetle collects fog for needed moisture.

The thorny devil, and biomimetics generally, is important to urban planning and development, too. Ecology and the benefits of biological diversity are reflected in modern portfolio theory, which suggests the importance of holding multiple assets whose values fluctuate independently of each other.  Some of the neighborhoods hit hardest by the current wave of foreclosures are those communities with monolithic development patterns - very similar single-family homes with limited or no proximity to commercial or retail services or other assets.  Builders and homeowners alike witnessed the positive side of life without diversification during the real estate boom, with values marching upward.  Today, the same parties are experiencing the negative side of the same approach, because a decline in prices for one type of land use is not mitigated by a diverse mix.

The capabilities of today's biomimeticists to understand the functions of plants and animals inspired a response of marvel from me. Human understanding of the complexity of the relationships among the flora and fauna around us is similarly advancing.  Placemakers shaping our cities and metro areas have much to gain from imitating nature, extending from building healthy human habitat to applying the lessons of diversity to our urban economic thinking. 

Photo courtesy of American Museum of Natural History. Map courtesy of Donjek.

Donjek Project: Designing a Structure for Purchase and Operation of Reused School Buildings

We are very pleased to announce that Donjek is involved in a process to convert recently-closed school buildings in Minneapolis to active reuse, using a range of equity and debt sources including equity investments, debt financing and tax credits. Partnering with the Minneapolis School District, Urban Design Lab and the Local Initiatives Support Corporation (LISC), Donjek will be in the coming months evaluating the prospects for establishing a real estate investment trust (REIT) to acquire and operate two large former elementary schools totaling over 200,000 square feet of leasable space. Such a REIT could be a very effective investment instrument with which to involve a range of potential investors in a new real estate investment model.

The reuse of school buildings is an increasingly relevant issue for many communities nationwide, both small and large in population.  Minnesota’s school districts each face a particular circumstance – for example, enrollment trends are strong in Pequot Lakes in the lakes region, stable in the small town of Rushford, and falling dramatically in the Lac Qui Parle valley. On the other hand, the small district in Houston, Minnesota has nearly tripled in enrollment as a result of its innovative web-based curriculum, which has secured the presence of its physical school.

The data communicate the story effectively. As shown in the graph included here (click on it to enlarge the image), the overall public school enrollment trends for Minnesota statewide and for Midwestern states together have been stable in the last decade. Minneapolis Schools, however, have seen significant declines in enrollment, due in part to students leaving to attend neighboring school districts, charter schools and other alternatives. The policy discussion aside, the Minneapolis Public Schools have twelve buildings they are seeking to sell in one form or another.  Note also the dramatic red line, which indicates the enrollment drop among Minnesota's fifty smallest school districts, which had an average total enrollment of 80 students during the 2007-8 school year.

We look forward to keeping you posted as the process progresses and we engage in mapping out ways to secure active reuse of these buildings. If you would like to learn more as an investor, a prospective tenant or a neighbor, feel free to contact me by email.

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.

"Lots of Energy in the Street" - Dutch Firm Produces Solar and Geothermal System Underneath

Ever run your car over the heating system of an office building? If you’ve been to Scharwoude in the Netherlands, you may have – but you would not have known it. As reported in this week’s Economist magazine, Dutch company Ooms Avenhorn Group has developed a heating and cooling system that relies on asphalt roadways and underlying aquifers. The company’s offices in Scharwoude are heated and cooled using this method. An excerpt of the article:

"The heat-collector itself is a circuit of connected water pipes. Most of them run from one side of the street to the other, just under the asphalt layer. Some, however, dive deep into the ground. In summer, when the surface of the street gets hot, water pumped through the pipes picks up this heat and takes it underground through one of the diving pipes. About 100 metres down lies a natural aquifer into which a series of heat exchangers have been built. The hot water from the street runs through them, warming the groundwater, before returning to the surface via another pipe. The aquifer is thus used as a heat store.

In winter, the circuit is changed slightly. Water is pumped through the heat exchangers to pick up the heat that was stored during summer. This water goes into the Ooms building and is used to warm it up. The water is then pumped under the asphalt, and the residual heat it carries helps to keep the road free of snow and ice. By now the water has been cooled to near freezing point, and it is once again sent underground—this time through a different pipe, to a second aquifer. Here, another set of heat exchangers is used to cool the groundwater. This store of cold water is then used in summer to keep the Ooms building cool.

The result is cheap heating in winter and cheap cooling in summer. And there is a bonus. Summer heating softens asphalt, making it easier for heavy traffic to damage the road surface. Dr de Bondt's system not only saves electricity, but also saves the road. Expect to see more examples of it, in other countries, soon."

Janet Attarian (project manager of Chicago’s new initiative to use alleys more productively) asked in a recent New York Times article, “can you make alleys do more for you?” Converting streets into energy collection and storage facilities may just qualify.

Why is this important? It could serve several significant ends:

 • Generating and storing energy through this combined solar/geothermal method provides a financial hedge against significant price fluctuations of conventional alternatives such as natural gas.

• Moving some infrastructure for heating and cooling under the street may increase the square footage available for the primary building purpose, be it housing, manufacturing, office or retail.

• Making streets and alleys “work for you” as energy infrastructure increases the intensity of use of urban land and bolsters tax base, providing support for the private and public efforts required for regions to differentiate.

Photo:  Courtesy of Flickr.

Placemaker News Miscellany, 11.26.2007

With the News Service now up and running, it’s tempting for me to make note of a sample of stories of interest to the placemaking audience: 

• Chicago’s Green Alleys initiative is featured in an article published in today’s New York Times, which notes that the city’s paved alleys represent an area equivalent to “five midsize airports.” The initiative’s project manager, Janet Attarian, asks in the article, “if you’ve got to resurface an alley anyway, can you make it do more for you?” In addition to reducing the volume of stormwater runoff (and consequent public and private cost), attention focused on alleys could lead to a broader, fruitful discussion about using this land more productively in a financial and economic sense.

• Relocating a State Fairground is bound to be contentious, as is the case in Lincoln, Nebraska, where university officials have proposed construction of a research campus financed via public-private partnership. Read a short column by University of Nebraska-Lincoln Chancellor Harvey Perlman here.

• Market jitters today are pushing the price of Treasury bills and notes up, as investors migrate toward securities with minimal risk. The result of increased prices for these bonds is to reduce yields or interest rates. For placemakers using private or public capital, this will be a critical dynamic to monitor, with the hope that we avoid combined low-growth, inflationary condition known as “stagflation” experienced in the ‘70s.