Donjek :: The Cents of Place Blog

Donjek Project: Site Evaluation and Selection

Over the last few months, I've been partnering with a client to examine potential redevelopment sites along a planned rail transit corridor. As I described in this previous post, some property owners and users are in search of sites that are not only near station areas and other nearby assets, but clearly and conveniently connected.

In my home market in the Minneapolis Saint Paul region, the same impulse can be observed. Take, for example, the 34-story residential redevelopment recently approved by the Minneapolis Planning Commission, which is adjacent to a light rail transit platform at the Nicollet Mall station, next to the prospective Gateway Park, and reachable (both by pedestrian and transit mall and skyway) from all work, civic and entertainment locations in the central business district.

The Minneapolis example, however, made for easy site selection - its value is obvious. As customer preferences shift and transportation (both in mode and in cost) evolves, new opportunities will arise to identify and redevelop less evident, but very high-potential sites. Welcome to the future.

Related Articles:

• The Business Case: Connect to Your Surroundings
• Urban Economies: Going With the Flow
• Charles Landry: City Making in Minneapolis Saint Paul

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.

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.

@Strib: Foreclosure Continues Regional Damage

Minnesota’s housing market is stabilizing, but prices dropped more here than the national average. Mortgage delinquency is at or over the national average in Isanti, Sherburne, and Chisago counties. These three, as well as Anoka and Scott counties, are among the state’s ten counties currently hardest hit by foreclosure, according to the New York Federal Reserve Bank.

A new study suggests this is consistent with a national trend. Households located in areas far from jobs and services are more reliant on long car commutes and their expense, creating another hurdle for households as job losses have accumulated. These maps illustrate who pays the largest share of household income to transportation and housing costs – exurban residents.

Foreclosure and vacancy is toxic for any community, urban or elsewhere. It’s not particularly constructive to introduce “slumburbia” as a new label for hard-hit exurbs and suburbs. If access to parts of our region is contingent on cheap, subsidized gas prices, people who buy property are exposing themselves to changes in those prices. If many homeowners in one area do so, the effects can be brutal for neighborhoods.

The Twin Cities region has grown by up to 25 acres per day in recent years. Providing houses with water and sewer, roads and other infrastructure demands a long-term and expensive public commitment. The foreclosure wave serves to highlight how households, local and state governments are all leveraged by development that relies on cheap, distant commutes to workplaces and services. As we’ve relearned in recent years, leverage works just as swiftly in reverse as it does moving forward.

Note: This piece is also published on the Star Tribune website in its Your Voices forum. See Commers posts on Your Voices here. 

Donjek Project: Minneapolis' Lowry Avenue Strategic Plan

Less than two miles north of downtown Minneapolis is Lowry Avenue, the focus of a project recently initiated for the City’s Community Planning and Economic Development (CPED) department. Partnering with Cuningham Group and Biko and Associates, Donjek is contributing economic development, market and finance perspective to the development of a Lowry Avenue Strategic Plan. Three nodes along Lowry Avenue hold particular significance as transportation access points and potential commercial hubs: Those at Penn Avenue, Emerson/Fremont Avenues, and Lyndale Avenue.

At a recent community meeting, Cindy Harper from the Cuningham Group organized an exercise where participants reviewed images of various building types and designs, and selected those best (and worst) suited to Lowry Avenue. Three groups of people undertook this process at once, and (with the exception of one image) each group selected the same five photos for ideal redevelopment types, and the same five photos to represent redevelopment they wished to avoid.

The consensus was interesting. Even more striking was the response I received when I asked a participant why she thought the five favored images had been chosen by each group. “They look like they’re going to last,” she said, and turned her attention elsewhere. Building materials can present evidence of commitment by investors and developers, or they can convey a short horizon and lack of interest in a structure’s relationship to its surroundings. 

Several of the preferred images reminded me of the scale of streetcar nodes still traceable in both Minneapolis and St. Paul. Along the many streets served by the streetcar system, observers can identify street-facing buildings of two to three stories centered around intersection points or other higher-traffic streetcar service areas. In part because the real cost of materials and labor was lower in the early 20th century, many of these buildings have proven durable and flexible to reuse. The future appears bright for such commercial space integrated into primarily residential areas.

Some suggest that fixed-rail transportation represents a similar kind of physical and financial commitment to a series of places strung together. But unless the marketplace shifts substantially – and private capital leads – I don’t see the streetcar network replicated by a 21st century fixed-rail version soon. So in lieu of fixed rail and affordable stone and brick materials, how do neighbors, developers and investors effectively signify that places are built to last?

@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.

@Strib: Twin Cities Gearing Up for Greenways

In mid-July last summer, gas prices peaked, remaining in the range above $3.50 per gallon until late September, 2008. One consequence of the spike was a boom in interest in commuter bicycling. July traffic on the Midtown Greenway, the principal bike commuter infrastructure in the Twin Cities, was 30% higher in 2008 than the previous year. An average of over 4,100 cyclists per day used the Greenway at Hennepin Avenue.

Greenway traffic diminished slightly this summer, thanks largely to a 40% drop in the price of gasoline. But interest in establishing a network of greenways has continued to rise. Two new efforts – the Twin Cities Greenways Initiative and the St. Paul Greenway Committee – suggest that the many interests who stand to benefit from an effective bike commuter system are joining together to move it forward.

The Twin Cities Greenways Initiative, inspired by the combination of ridership and development in Midtown, is working with neighbors to explore conversion of residential streets to greenways, linked together eventually in a network to link neighborhoods, schools, open space and commercial areas. “As we talk to neighbors,” said advocate Matthew Hendricks, “we find that 90% of them respond very positively to the idea of converting their streets to greenways.” Auto access would remain to homes via the alleys, as illustrated above.

The St. Paul Greenway Committee is stimulating interest east of the river in a facility akin to the Midtown Greenway – to which many in St. Paul have long sought a connection. Led by transit advocates St. Paul Smart Trips, the committee intends to begin planning with neighborhoods, to determine which connections will link high-priority destinations most effectively.

Greenways play a key role in a transportation system where implemented. They also enhance property values – a case proven by numerous studies of comparable cities. Gas prices will rise from current levels in the future, and providing affordable choices for getting around is key to our region’s competitiveness and quality of life.

Note: This post is also available at the Star Tribune, with fewer images. 

All images courtesy of Michael Nelson and Twin Cities Greenways Initiative.

Value Capture Finance: Seeing is Believing

One of the trends I've observed here over the last year, is that multiple factors are prompting more consideration of value capture finance - the mechanics of "capturing" development values and benefits to pay for elements of the development itself.  Among the drivers are:

• Diminishing public willingness to support funding for services traditionally considered to be core public functions; 
• Increasing gathering of data and readiness of access to this data; and
• Improving ability to use this data to measure property value, patterns of how people use places, and the economic health of small or large areas (just to cite a few examples) using geographic information systems (GIS).

Value capture finance, in summary, is a method of using future financial or economic benefits precipitated by a development, to repay part or all of the debt incurred to create the development in the first place.  A typical example is tax increment finance (TIF), authorized in forty-eight U.S. states, which allows increased tax revenues (property and/or sales) generated by redevelopment to be channeled to the project’s debt service or other uses.  A less typical example, not currently contemplated in Minnesota law, is the financing of public fixed-rail infrastructure through commercial districts, using neighboring properties’ increased tax revenues caused by enhanced access to LRT or streetcar service. 

I’ve just completed some analysis for the Midtown Community Works partnership pursuing this line of inquiry:  If state law could be amended to allow for a "transit TIF" district, for example, what kind of value could be captured in future years?  How much capital could be raised by borrowing against these future tax receipts?  What planning and equity issues demand consideration in exploring such an approach?  

This concept may strike some readers as marginal to the planning and public finance worlds.  I don’t agree.  The three forces described above are at the root of analysis commissioned by the Minnesota Legislature earlier this year, and continuing economic impact analysis of the state’s first LRT line, the Hiawatha.  Identifying what value is created by transit infrastructure is a critical step in leveraging this value for investment in a regional system, and made more feasible by improvements in GIS technology. 

And regardless of whether the infrastructure is constructed by a private, public or public/private entity, the end outcome - investment in places that work for people - represents an increasingly important competitive advantage for regions in the U.S. and abroad.

Donjek Tools: Transportation Consulting for Public and Private Clients

Donjek Transportation Consulting

Donjek is rolling out with transportation planning and policy service, so to speak.  Look to us to conduct travel demand projections and management analysis, evaluate streetcar finance, negotiate shared parking agreements, and determine whether to use tax increment financing for streets and structured parking.  We identify and present solutions in these areas on behalf of our public- and private-sector clients.  We are able to:

• Work with mid-size and large employers to reduce payroll taxes and parking lease charges.  We are able to analyze employee travel and parking requirements, to help employers identify and manage these costs, using travel demand management plans and other measures.
• Form urban and suburban transportation site plans to cultivate the vital places in your city.
• Develop shared parking arrangements and parking management plans that ensure efficient access and circulation.
• Prepare traffic impact studies to determine the effect of development on congestion, safety, and parking supply. 
• Analyze transportation markets to estimate demand and identify innovative, multi-modal solutions to transportation challenges.

Click here for a brief summary of Donjek transportation services and related background.

Getting Less Mileage Out of the Gas Tax

Last week, Congress recapitalized the Highway Trust Fund, a gas-tax funded resource available in the past for construction of roads and bridges as well as transit infrastructure.  If unaddressed, the U.S. Department of Transportation indicated the fund would empty as of October 1.  This article provides a sound recent overview of the move.  It also explores the increasing folly of levying gas tax as a dollar value per gallon, while inflation mixed with reduced fuel consumption by consumers is leading to deterioration of revenues and resources available for investment in transportation infrastructure.  Talk about a volatile mixture!

Learn more about the State of Oregon’s experimentation will replacing gas tax with a mileage fee in an article from Governing magazine available here.  If you have an afternoon to spend on it, see this document.