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.

@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.

Revelations in Milwaukee: Historic Reuse, Natural-Lit Parking and Free Parking

I’ve returned from a recent junket to fair Milwaukee. I hadn’t been to Milwaukee in fifteen years, and parts of the city have changed dramatically since then. Two examples and a policy observation:

• I noticed on my tour of the lakeshore, the vital reuse of the Milwaukee River Flushing Station (pictured). Alterra Coffee (in combination with the Milwaukee Metropolitan Sewerage District and Milwaukee County) rehabilitated the station, which was built in 1888 to flush sewage harbored in the river into Lake Michigan. Does this strike you as an ironic piece of infrastructure to reuse as a coffee shop?

In fact, it works conspicuously well. The building remains owned by the sewerage district (“MMSD”), and the county owns all land from the periphery of the building to the edge of the site. The physical structure is aligned with its new mission: Pervious pavement and water filtration systems are narrated on displays constructed by the county’s parks department. The building’s lakeshore location is not surprisingly home to a brisk business moving excellent food and coffee; Alterra also sponsors a music series with wares ranging from opera to Latin American.

Special thanks to Bill Robison, Principal at Engberg Anderson, an architecture firm with offices in Milwaukee, Madison and Tucson. As the lead architect on this reuse project, Bill partnered with Alterra, MMSD and the county, and generously responded to my recent cold inquiry about its development.

• Milwaukee Art Museum’s renovation and expansion includes dramatic architecture and serves the need for a much-enhanced connection between downtown and Lake Michigan. Of course, as principal of a public finance and transportation consulting firm, I was most drawn to the underground parking garage lit with skylights (also pictured). Facilities Director Charles Loomis explained that sensors evaluate the quality of light admitted through the skylights and adjust the use of lighting to supplement, creating significant (but to date unquantified) energy cost savings to the museum.  And to preempt your question before you read below, museum parking is not free.

• A recent post at Urban Milwaukee cited SBT and Colliers data showing the median metered hourly parking rate in downtown Milwaukee is $0.63, versus a national average of $1.48. Author Jeramey Jannene suggests an oversupply of metered parking downtown has suppressed redevelopment efforts: The zoning code requires structured parking in site plans, which represents a mandate to lose money in an environment with an oversupply of cheap on-street parking.

In St. Paul, a very different discussion is taking place regarding the anticipated loss of roughly 85% of on-street parking on University Avenue as light rail transit is added to the street’s modes. At the same time, the Metropolitan Council has indicated their wish to discourage the building of structured parking just off the avenue in order to avoid the avenue’s use as a park-and-ride. Arguably, the main impact of this move is to drive up land values and favor those who control larger parcels near University. It also highlights the importance of the type of transportation consulting that Donjek’s Dan Walsh can provide, including analysis and negotiation for structured parking, shared parking, and travel demand management (TDM).

The travel log would remain incomplete without noting our visit to Sprecher Brewery, where I sampled their very fine Shakparo beer, fermented according to an African protocol using bananas.  The beer tent in Milwaukee continues to get bigger and bigger!

Photo of Milwaukee River Flushing Station: Retinal Fetish, Flickr. Parking garage photo: J. Commers

Talking Infrastructure Blues, or Trading Places Part 3

What if, during his hard travels by road and rail, Woody Guthrie had penned a song he called “Talking Infrastructure Blues”? 

Talking

In Minnesota and elsewhere, much verbal back and forth continues to be had over the high-profile and disastrous collapse of the I-35 bridge over the Mississippi River.  Just this week, conservative-turned-liberal blog magnate Arianna Huffington claimed in her speech at the University of St. Thomas that neglected infrastructure is a direct outcome of the wars in Iraq and Afghanistan.  She’s wrong.

Clearly, the wars – and the way they have been debt financed – have placed and will continue to place stress on the national budget and the dollar for years to come.  Still, it’s unfair to suggest that without American involvement in Iraq and Afghanistan, infrastructure in Minnesota and elsewhere would be the focus of long-term foresight and investment by policy makers.  In political terms, infrastructure is a more elusive issue that Huffington’s assertion suggests.

Infrastructure

It’s an election year.  I will wager very little of the coming campaign messages will (excepting mention of the I-35 bridge, of course) include calls for ramped-up investment in infrastructure.  Transportation systems of roads, rail and intermodal facilities, airports, locks and dams will be missing, as will the real estate needs of university and school buildings.  Three of the reasons why:

• The price tag for quality infrastructure gives the public sticker shock

• The benefits of quality infrastructure, while they certainly justify the investment, are dispersed among private and public parties that use it

• The cost of deferring investment is difficult to measure, though decreasingly so with evolving analytic tools.

The American Society of Civil Engineers has provided ratings of U.S. infrastructure in recent years; the latest report (2005) proffered Cs and Ds in every category, with an overall grade of D, down from D+ in the 2003 report.  Their estimate of national deferred costs is a baffling $1.6 trillion. The Urban Land Institute at the end of April released a comprehensive analysis of U.S. infrastructure that notes

2008 seemingly marks a critical juncture in a rapidly changing economic environment where new approaches to land use, infrastructure and energy efficiency will likely determine and possibly reorder the next generation of winners and losers – countries, companies, investors, and peoples.

If you would like a copy of the whole ULI report, contact me and I will be pleased to email it to you.  I should warn you, it may give you the…

Blues

Guthrie would want his song to take place in a particular place, and this being the last of three posts on particular locales, let’s return to St. Paul.  The Minnesota legislative session is required to conclude here this Monday, May 19.

Advocates including the City of St. Paul, City of Minneapolis, St. Paul Area Chamber of Commerce, Midway Chamber of Commerce and a range of transportation and environmental organizations have been laboring over the last month to restore state funding for the light rail line designed to connect the two downtowns and the University of Minnesota.  Funded with $70 million in the state bonding bill passed by the Legislature in early April, light rail was removed from the bill by Governor Tim Pawlenty.  At stake is $450 million in Federal funding contingent on the State investment.

It’s a case study of the three dynamics I described above.  Without context, a $70 million investment just sounds like a large price tag as opposed to a key step for movement of workforce, connectivity of two downtowns and a major university, and regional differentiation.  From the list of advocates cited in the preceding paragraph, it’s clear that the private and public sector each recognize the value of light rail for the region’s future, but the benefits to be gained collectively are a challenge to gauge.  And last, proponents have not succeeded in shifting discussion to the costs of failing to build light rail now, in part because they are difficult to quantify easily.

As an optimist, I am hopeful in our ability to commit to a program of modernized and well-maintained infrastructure.  It will, however, require more than a talking blues.

The Urban Engine, or Trading Places Part 1

Welcome to the first in a short series of three posts inspired by three very different places.  I’ve spent today immersed in national and global issues thanks to the Federal Policy Forum hosted by the International Economic Development Council here in Washington, D.C. The second and third posts, as you’ll see, will address local development issues in a mid-size and small community.

Between the articles I read on the airplane, the content of the sessions and accessory conversations with other participants, I have notes on papers small and large hanging from folders and pockets and briefcase.  It’s all related to a notion I sketched out in a post about regional differentiation a few months ago, but I’d like to summarize a new line of inquiry related to the conference.

Bank of America CEO Ken Lewis and Pennsylvania Governor Edward Rendell have led an effort described in the publication of Retooling for Growth: Building a 21^st Century Economy in America’s Older Industrial Areas (see a summary of the book here).  The content is unabashedly “metrocentric” in light of the following metrics outlined in a session today.  The nation’s largest one hundred metro areas:

• Use 12% of American land area;

• House and employ 65% of our population;

• Are home to 74% of college graduates;

• Generate 78% of patents; and

• Create 75% of gross domestic product.

In the words of Paul Brophy, a consultant who hatched the project, the metro areas are engines for economic, social, scientific and cultural development despite the increasingly conspicuous absence of a significant federal role or resources.  In particular, he says, to move the U.S. forward it is critical to harness and foster entrepreneurship, human capital, infrastructure and what he termed “quality of places” in our urban centers.  A few thoughts on the prospective form of such infrastructure and placemaking improvements:

• Establishment of a National Infrastructure Bank to provide coordinated, significant, long-term dollars for urban infrastructure reinvestment, with accountability measures in place for both the local and federal partners involved.

• Perhaps as part of or independent from the infrastructure bank, aggressively fund urban transportation networks, including transit.  Spendy, yes.  Essential to be competitive, definitely.  This month’s Urban Land magazine reports that the City of London’s Crossrail project will extend subterranean Underground lines at a cost of $30 billion.  The business community, in a testament to the project’s competitive potential, will fund much of the investment.

• Adoption of local, state and federal policy that recognizes the missed opportunity that vacant and polluted urban land represents, and enables its reuse as developed property or open space such as parks.

• Perhaps most germane to the Cents of Place forum, standardization of the development process and fundamental property tax reform is also in order.  In Minneapolis and St. Paul, Minnesota – contiguous and mutually dependent municipalities – zoning codes and the development process continue to remain estranged.  And, as documented by a property tax report I authored last year, the current property tax system stifles the concentration of tax base upon which the health of our urban areas (and the states that rely on them) will rise or fall.

• Adoption of at least a regional, and at best a statewide approach to subsidies that seek to attract businesses location.  This idea is hardly new:  See the Economic War Between the States report published by the Minneapolis Federal Reserve in 1994.

• Focus on retaining the talented people who arrive in your region from Bangalore or Missoula or Moscow, to pursue educational experience.  See the integrated approach Philadelphia has taken to housing, employing and engaging students before they graduate and leave.

Resolving these underlying finance and policy issues is a priority that simply can’t wait.

Still with me?  Then, dear reader, indulge yourself and browse over one other publication I encountered today:  The 2007 State New Economy Index compiled by the Kauffman Foundation.

Photo:  Musely, Flickr

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.

"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.