Mixed Use / Mixed Results

[mjkuhns]

My personal opinion is that "mixed use" ceased some time ago to be a useful term, within local conversation, having fragmented into multiple different (some of them firmly pejorative) meanings to different groups. But we also seem to be stuck with it.

Meanwhile, one writer suggested this week that it is indeed not an inherently negative model—but that it is vulnerable to certain hazards of typical implementation. fwiw:

…here’s the more common picture: a cookie-cutter five story apartment building over a vacant commercial space. … in my city, it’s not unusual to see a commercial space sitting empty for months and sometimes years. There are buildings like this near my home and, while they may be a shade better than the derelict one-story structures or vacant lots that used to occupy the area, an empty space is an empty space. At the end of the day, a vacant storefront makes the whole street feel neglected and undesirable, and it isn’t fulfilling its purpose.

At first, the whole scene just didn’t make sense to me. What business owner wouldn’t want to move into a brand new space with freshly painted walls, new windows and a blank canvas to lay out in whatever way suited the needs of the business? Why were these storefronts sitting empty? […]

Multiple developers and planners I spoke with in my research mentioned that today’s developers may be building those commercial spaces in the hopes of attracting a chain — businesses that typically want a larger amount of space than your typical mom-and-pop clothing store or barber shop.

What’s up with all those empty commercial storefronts in new mixed-use developments?

[Bridget Conant]

Great article, Matt.

I liked this quote:

At the end of the day, though, large developers constructing large new apartment buildings with large commercial spaces on the bottom floor — all financed by large banks — is hardly a recipe for building strong, economically productive towns. These developments may be mixed-use and walkable, but they are not materially contributing to the creation of a varied, strong local economic fabric.

[Jim O'Bryan]

Matt

It is my understanding that "mixed-use" became a favorite term in Urban Developments because it allowed developers and cities to skirt the Section 8 issues. IT was my understanding during the West End Debacle, a mixed use strip mall by many of the same players that have brought us "One Lakewood" mixed use strip mall, that it allowed for the destruction and reduction in Section 8, without the replacement of such properties there or elsewhere in the city.

From there it might have grown, but it was my understanding this is why it grew in favor.

.

[Bridget Conant]

http://cumbelich.com/blog/the-inconveni ... -mixed-use

As far as trends in retail real estate development go, none during my 30-years in the industry has been more counter-productive or government-driven than residential over retail mixed-use development

Rapt by the dogma of New Urbanism, our municipal planners have uniformly ignored the fact that retail by its very nature likes to congregate. In retail lease planning, this reality is expressed through anchor tenants, larger formats and critical mass. Yet New Urbanism’s RRMU designs plug its’ ears and closes its’ eyes to this essential truth.

So who exactly is campaigning for the RRMU design concept? Not the risk-savvy developers that have learned how this product type rarely succeeds. Clearly not the high quality retailers and first class dining establishments that consistently choose to avoid these projects, leaving them half vacant. Yet RRMU projects continue apace in a bizarro real estate world where the laws of supply and demand have been suspended by ivory tower planners who suffer none of the consequences of these failures, unlike the developers jammed with building them, the banks that might loan on them, or the brokerage firms charged with leasing them.

De-coupled from the financial realities of designing and building retail projects that will attract quality tenants and manage to stay leased in markets both good and bad, our bureaucrats appear more interested in how a project looks or if it comports with the latest fashion in the urban Meccas.

[Bridget Conant]

All too often, mixed use developments sit empty at the street level retail.

I could quickly name over a dozen new buildings conceived as mixed use that currently sit with virtually empty storefronts. They just never fill them.

https://www.strongtowns.org/journal/201 ... velopments

[Bridget Conant]

http://cityofnewalbany.blogspot.com/201 ... s.html?m=1

[Matthew Lee]

I could quickly name over a dozen new buildings conceived as mixed use that currently sit with virtually empty storefronts. They just never fill them.

I'll bite. Please name a dozen in Lakewood.

[Bridget Conant]

Yes, you name a dozen NEW mixed use buildings, as was discussed in the articles I posted, in Lakewood, and we’ll see where that goes.

[Matthew Lee]

Yes, you name a dozen NEW mixed use buildings, as was discussed in the articles I posted, in Lakewood, and we’ll see where that goes.

I'm confused. You said you could name a dozen. I never said anything about a dozen. So, can you name them or not?

[Mark Kindt]

To broaden this discussion, I submit the following questions to Deck users:

As a citizen and taxpayer of Lakewood, how much in public funds or public assets should be granted to a private party for any mixed-use development in Lakewood?

What principles should guide us in the use of public funds or public assets for private parties that are developing mixed-use projects in Lakewood?

[mjkuhns]

As a citizen and taxpayer of Lakewood, how much in public funds or public assets should be granted to a private party for any mixed-use development in Lakewood?

What principles should guide us in the use of public funds or public assets for private parties that are developing mixed-use projects in Lakewood?

My ideal answer to the first question would be zero, when it comes to any development project that will be privately owned.

As for principles that should guide any exceptions, I would start with public value, measured more stringently than by our current administration. For example:

1. Ask what private developers might produce in the absence of subsidies.
2. Compare the estimated answer for (1) with what the private developer proposes to produce in return for subsidies.
   1. Are the two possible outcomes meaningfully different?
   2. If there is a difference, does it represent meaningful public benefit?
   3. If there is public benefit to the subsidized proposal, is its value to the public greater than that of the public subsidy?

For practical purposes, I do think there should also be strong prohibitions on subsidies enriching the friends, political allies, predecessors, etc. of public officials who vote for the subsidies.

But I think tests 1-2c are very difficult to pass, by themselves, if one exercises any genuine skepticism.

To apply them to One Lakewood Place, I am familiar with the official rationale for funding that project. I have yet to identify anything in its generic combination of residential, office and retail space which seems different from what developers would build in that location in the absence of subsidy. (Would someone realistically buy up space in the middle of Lakewood, at market prices, in order to use it for e.g. a tannery or an old-tire dump? Even if zoning were no obstacle?)

The case for benefit in this particular transaction seems to rest entirely on an assumption that development, itself, is a public benefit, inescapably implying that building in Lakewood just does not carry enough value to justify the market costs of doing so. I find the scale of market failure which this would constitute questionable, at best, and I believe that accepting it without much better evidence also sets the bar awfully low.

Is our city really so unpromising that it just cannot compete with development opportunities elsewhere, without paying a high premium? And if that were the case, wouldn't it constitute an alarming conclusion about Lakewood's long-term sustainability?

[Paul Schrimpf]

The wrap-up graph in this story is the key:

"One thing is clear: the provision of affordable, appropriately-sized commercial spaces that small businesses rent and utilize is probably not going to come from large, wealthy developers. It is going to come from people like you and me who see the underutilized areas in our neighborhoods and creatively come up with ways to fill them."

JOB has said it 100 times. Growth that's not organic is not sustainable.

[Jim O'Bryan]

JOB has said it 100 times. Growth that's not organic is not sustainable.

Paul

As I reported here a couple months ago. I was sitting at Rising Star Coffee on Madison and the person next to me was working on some spread sheets, and presentation graphics. They mentioned to the Barista and long time friend. "Could I have another cup of coffee I have to get these charts ready for a presentation on Lakewood Hospital." The Barista laughed and said you are sitting next to the guy that knows more about the whole nightmare, cover-up and lie than anyone else in the city," so we introduced ourselves to each other and talked. Early on we agreed the conversation would only center on what comes next, as he also agreed the dirty deed was done, and the hospital was not coming back.

In cases like these I prefer to listen for awhile and see where the conversation went, and this one was interesting. It came back as these community discussions often do to "gentrification, good or bad." They had a completely realistic view of the entire dilemma and the pros and the cons. They even understood that the fact that developers and those at CDCs and Development groups loved development because that is what they do for a living and to get paid. They always have a new or borrowed idea, anything to keep the churn going, and to also camouflage how ineffective they really are most of the time. In essence, "one more development..." or "now what we need is..." or "that was just the first phase..." I mentioned to them about the small group of Lakewoodites that were "Development blocked" as in "cock-blocked" and the history of West End Debacle to "DowntowN failure" to the one subject we promised not to talk about. They nodded as said this is the problem, when you leave it to people that get paid or status for changing things they refused to look at the facts and the facts are 85% of artificial attempts to bring back the center of towns and cities fail, within a year of removing government funds to sustain them. They used Downtown Cleveland something they have a ton of interest in as a perfect example. Heniens, Geiger's and others there because they are paid to be there, or at least have been promised they will not lose money.

So you build the movie set, you advertise the movie set as "cool" and pray they come. But all you get are people that are desperate to chase the cool, and rarely stay, rarely if ever invest, and almost never become part of the actual organic community.

It is all an illusion built to give people jobs, whose jobs leave the second the illusion is forced to become real.

85% failure rate is a sobering number.

.

[Matthew Lee]

the facts are 85% of artificial attempts to bring back the center of towns and cities fail, within a year of removing government funds to sustain them.

Hi Jim,

Was this a number the other gentleman was saying as a fact or is this from a study somewhere? Would definitely be curious where this number comes from because it seems awfully vague and awfully high. For example, what is the definition of an "artificial attempt"? What is the definition of "center"? I would love to read the study that came up with this number. Thanks!

[Mark Kindt]

A Few More Questions To Add To The Mix

When public subsidies are made for mixed-use (or other) developments, are we seeing the city (our city or any city) sorting winners from losers?

In the situation of One Lakewood Place, the developer receives the economic benefit of the hospital demolition, site remediation, site preparation, and gets the prepared site for free or a nominal value.

Additionally, the city has reserved the right under the term sheet to provide "incentives" to future occupants of the development.

Existing businesses are asked to compete with new businesses that only arrive in the community because of taxpayer subsidies.

Is this a situation of the "rising tide raising all ships"?

Or, is it the situation where the city itself is choosing preferential businesses versus non-preferential businesses?

Or, do we just take existing businesses and taxpayers for granted in order to attract new businesses and taxpayers? --Counting on "inertia" to keep the non-subsidized in the tax base?

The answer is likely to be combination of the above.