Forum Journal & Forum Focus

Urban Revitalization: When Rehab Grows Up 

12-09-2015 17:35

"Our allegiance is to the future, not the past."

This statement, spoken during a heated discussion about the fate of historic downtown Pittsburgh in light of the most recent urban renewal proposal, was not stated by the project developer or by city redevelopment staff. Instead, the chairman of the Pittsburgh Historic Review Commission (to accompanying hisses from a packed house of merchants, preservationists, and concerned citizens) made this remark just before a unanimous vote by the commission to approve a $480 million plan to demolish more than 60 historic buildings and displace 125 tenants for an upscale redevelopment project anchored by a multiplex theater.

Was the chairman`s statement wrong? No. But, what was wrong was what didn`t get said, and what many city leaders are eager to say, namely that when it comes to downtown revitalization, a successful city pays allegiance to a future that invests in its past. Richard Moe, president of the National Trust, summed up the decision this way; "Because it would destroy the historic buildings that represent the best hope for the rebirth of downtown, this is one of the most wrongheaded revitalization proposals to appear anywhere in the country in the last 30 years."

So what is the answer to today`s urban revitalization problem? It`s a comprehensive approach, a plan for the future that addresses mass transit, downtown housing, safety, tax incentives, design controls, public amenities, walkability, livability and, oh yes, historic preservation. More than just an afterthought, historic preservation has served as the impetus for many successful urban revitalization efforts under way today. As case studies from Denver, Dallas, Chicago, St. Louis, and Pittsburgh-yes, Pittsburgh- demonstrate, the successful urban experience is not about multiplex theaters or "category- dominant chain retailers," it`s about a vital and eclectic mix of businesses, night life, housing types, cultural amenities, corporate headquarters, and transportation options

Downtown Denver: A Showplace
Lower Downtown Denver, or "LoDo" offers an appealing mix of housing, shopping, and entertainment in a 25-block area of warehouses and small commercial structures built between 1870 and 1920. Over the last decade, the district has attracted more than $120 million in private investment, spurred by tax incentives and a low-interest loan pool for building and streetscape improvements. Vacancy rates have fallen from 40 percent in 1988 to 7 percent today, with downtown boasting a 20 per-cent population increase since 1980. But, it wasn`t always that way for LoDo.

LoDo, a warehouse district around Denver`s Union Station, served as a bustling commercial area during Denver`s early boom years. After World War II and up through the height of urban renewal, one-fifth of the area`s building stock was demolished. In order to halt this ongoing demolition and preserve the historic character of the area, preservation advocates successfully persuaded the Denver City Council to create the Lower Downtown Historic District in 1988.

A combination of historic district zoning, infrastructure improvements, and a revolving loan fund administered by Historic Denver and the Downtown Denver Partnership generated such activity that Lower Downtown led downtown Denver out of a recession by 1990. Today, most of its 131 historic buildings have been rehabbed for uses that include 550 housing units, 60 restaurants, 40 art galleries, and other retail businesses, hotels, and professional offices. With only a handful of the historic buildings not already rehabbed, developers are now focusing on compatible new construction to replace surface parking lots. In fact, more than $125 million in new infill projects are under construction in LoDo.

According to Denver`s Mayor Wellington Webb, "LoDo is a hip, energetic section of downtown full of restaurants, nightclubs, art galleries, shops, and new housing. Working in partnership with our business community, we are revitalizing once-dormant downtowns, and we are working hard to spread this success to our distressed neighborhoods and to create job opportunities, with decent wages, for all of our citizens."

How did Denver do it? Following his election in 1991, Webb called a summit of downtown stakeholders including business people, the Downtown Denver Partnership (Denver`s downtown business advocacy group), the Denver Urban Renewal Authority, Historic Denver, and others. Downtown housing was identified as a top priority. As a result the Downtown Denver Partnership established a downtown housing office that pro-actively marketed vacant buildings to housing developers and investors.

Meanwhile, the city reversed the climate that had previously inhibited housing by creating density bonuses, enacting design standards, and eliminating surface parking as a use-by-right-a big-city zoning disaster and "the biggest catalyst for building demolition," according to Webb. "Once a downtown is more than one-third parking lots, it loses its character and sense of place." These actions saved a critical mass of older buildings that could now function as housing.

The city`s next step was to provide financial incentives. The city provided bridge financing for unconventional housing projects; directed all private bond allocations toward downtown housing for three years; and created a $1 million revolving loan fund for housing. Other important elements in the city`s long- term plan, completed or under way, include developing a major downtown park along the South Platte River, placing a sports arena near down-town, supporting a performing arts complex, providing free shuttle bus service on the downtown mall, and maintaining downtown as the hub of the regional transportation system, including light rail.

The end result? Since 1991, more than 2,000 residential units, 1,200 hotel rooms, and more than 400,000 square feet of commercial space have been added to LoDo and the Central Business District. Warehouses, office buildings, banks, light industrial buildings, and department stores have been converted into hotels, retail, offices, and lofts. At last count, approximately 2,600 residential units were under construction, many in historic buildings.

Housing options in LoDo and downtown range from million-dollar lofts to below-market- rate apartments. With such regionally evocative names as Icehouse Lofts, John Deere Plow Lofts, and Rocky Mountain Warehouse Lofts, the history of downtown Denver is showcased for a burgeoning downtown population of 3,600.

LoDo`s growth has spurred revitalization uptown. The rate of residential growth in the upper end of downtown has been on par with LoDo. Several vacant office buildings at the upper end of downtown have been rehabbed for apartment and condominium units. These include the historic Boston Lofts, the Denver Dry Lofts, the A.T. Lewis & Rio Grande Lofts, Buerger Brothers Lofts, and Bank Lofts which include below-market-rate apartments for downtown employees.

In recognition of their significant contribution to the revitalization of downtown Denver, the International Downtown Association recognized the Downtown Denver Partnership, the City and County of Denver, and the Denver Urban Renewal Authority with the 1998 Out- standing Achievement Award for their shared effort in saving 51 historic buildings from the wrecking ball and helping developers convert them into lofts, hotels, restaurants, and offices.

A recent Denver Post article, "Downtown: A Real, Live Showplace," observed that in Denver, "having almost run out of dilapidated warehouses to renovate, builders are transforming parking lots into loft and condo complexes." Thus, in the West where the car is king, parking lots are giving way to buildings and walking to work has meant an urban renaissance for Denver. And, instead of attracting big-box, large-scale category-dominant retailers, the city wants "little-box retailers-grocery stores, hardware stores, pharmacies, bakeries, shoe-repair shops, and delis."

Sounds like the downtowns of yesteryear, right? Wrong, it`s the downtown of tomorrow where high-tech start-ups, artists` lofts, and 24- hour living make for a diverse, vibrant, and self-reliant urban village.

Chicago: Technology Starts Up Downtown
Beginning in 1997, with approval of landmark designation for more than 30 historic buildings in downtown Chicago, Mayor Richard M. Daley put the City of Chicago in the driver`s seat by investing city resources into a preservation-based renewal strategy.

Project developers are receiving city subsidies through permit fee waivers, tax increment financing, class-L property tax relief, and preservation easements. In addition, they are taking advantage of their buildings` historic status to apply for federal tax credits.

Some two dozen rehabilitation projects are under way in the East Loop-Chicago`s historic retail core-a diverse downtown neighborhood that brings together businesses, academic and cultural institutions, large and small retailers, restaurants, hotels, and homes. More than 15 historic buildings, previously Class B or C office buildings, are now being converted to housing or hotels. Notable examples include Daniel Burnham`s historic Reliance Building with a new life as a 122-room hotel, and the Fisher Building converting to rental housing.

Additionally, the Carson, Prairie, Scott and Company building, Chicago`s famed department store, is undergoing a conversion of its upper floors to office space and the project developer has agreed to restore the historic cornice, long ago removed from this National Historic Landmark building.

The Wabash and State Street National Register Historic District has approximately 100 contributing buildings and, under the mayor`s leadership, the city is pushing a technology initiative for this area. In addition, the city is willing to step up as developer, acquiring the Lytton Building and using federal investment tax credits and tax increment financing to convert this for-mer office building and department store into the city`s first center for information technology, with offices for high-tech startup firms. This building is a highly visible corner property, and the city sees its rehabilitation as a catalyst for further downtown revitalization efforts.

David Bahlman, executive director of the Landmarks Preservation Council of Illinois, headquartered in Chicago, applauds the City of Chicago for its preservation-based approach to downtown revitalization, stating "there are only a few other cities in the United States that have demonstrated this level of commitment to preservation."

Dallas: In-Town Living
On Wednesday, January 12, 2000, the Dallas City Council voted unanimously to approve a new preservation ordinance that will allow demolition denial, address demolition by neglect, and establish a city-wide historic preservation fund. Preservation Dallas Executive Director Catherine Horsey sees the passage of this new ordinance as reflective of a new preservation spirit in Dallas, capping a decade-long struggle by preservationists to demonstrate to city leaders that preservation pays.

Unlike Chicago and Denver, where the leadership of the mayor and city agencies is sparking revitalization, in Dallas, a diverse mix of decision- makers is shaping down-town preservation. From Dallas- based developers to Hispanics representing the Guadalupe Social Center, community leaders are working together to support downtown revitalization. In the 1980s, the preservation battles were with individual property owners proposing piecemeal demolition of the historic core, culminating in the loss of the Old Cotton Exchange and the Dr. Pepper Building. Today, however, an economic study, Historic Preservation at Work for the Texas Economy, reports that property owners are utilizing city and national preservation tax incentive programs that have generated more than $260 million in economic investment in Dallas.

The City of Dallas offers tax exemptions to property owners in the downtown and the adjacent residential area within a one-mile radius of downtown, with additional exemptions for residential and retail conversions. Depending on the location, property owners are eligible to receive a 10- year abatement of city land and structures taxes on added value created by historic building improvements or a 100 percent exemption on land and structures taxes for 10 years. Dallas County also participates with tax incentives for larger projects.

Since 1993 when the property tax abatements were enacted, approximately 50 buildings have been rehabilitated within the targeted historic area. Today bringing a permanent population base downtown is critical to the downtown`s future. Demand for housing downtown is estimated at 14,000 units. Hundreds of new housing units have been completed in historic buildings, with one large project adding 800 new units.

And, it all began with the loss of a few key downtown buildings. As Horsey states, "In the early 1990s after we were threatened with the loss of the historic Cotton Exchange, city leaders said we need to figure it out." Eight years later and with 50 buildings fully rehabbed, downtown Dallas is proof of their success.

St. Louis: The Tax Credit Makes the Difference
While the reuse of historic buildings has a solid history of success in downtown Denver`s revitalization strategy, the City of St. Louis is just now picking up where it left off in the early 1980s with the adaptive use of historic buildings in its downtown core. And it`s the recently passed state historic tax credit that`s driving downtown revitalization.

The history and economy of St. Louis are inextricably linked to the meandering Mississippi and the city`s role as a regional trading center. The city`s population peaked in 1950 at a little over 856,000. But almost 50 years later, its population had plummeted to fewer than 340,000. During the late 70s and early 80s, the federal tax credit created tremendous opportunity for downtown revitalization with dozens of buildings rehabbed for new uses, including the biggest historic rehab project in the U.S. until that time-the St. Louis Union Station, which reopened in 1985 as a festival marketplace. But, after pas-sage of the Federal Tax Reform Act of 1986, historic rehabilitation all but halted in downtown St. Louis. And, since that time, local preservationists led by the Landmarks Association of St. Louis have been fighting downtown demolitions spurred by a population decline, deferred maintenance, and general stagnation of downtown.

But now, according to Carolyn Toft, executive director of the Landmarks Association of St. Louis, the tide is changing thanks to a new state tax credit. Missouri is one of the growing number of states that has enacted a state historic preservation income tax credit, providing a 25 percent transferable credit toward eligible rehabilitation costs for both residential and commercial projects. This new credit has resulted in nearly 20 new preservation projects in downtown St. Louis.

Building on the city`s reinvestment in downtown with the construction of a convention center, a 70,000- seat stadium, and an 18-mile light rail system connecting downtown to the airport, preservation-minded developers are contributing to a $1.2 billion investment in downtown.

Cupples Station, a historic railroad-freight depot featuring 10 historic buildings on 12 acres, is at the heart of that revitalization strategy. And, it`s the $50 million projected in state and federal historic tax credits that`s going to make this $250 million renovation project succeed, according to Cupples Station developer Richard D. Baron, president of McCormack Baron & Associates (and Trustee to the National Trust for Historic Preservation). Cupples Station will include a 260-room Westin Hotel and a 500,000-square-foot mixed-use complex. Another redevelopment project in downtown St. Louis includes a 1,081-room Marriott Renaissance Hotel, involving the rehabilitation of two historic hotels. This $242 million project uses $18.5 mil-lion in state tax credits. The New Orleans-based developer for the project, Historic Restoration, Inc., will add to that $15.5 million in federal tax credits.

Two other historic hotel rehab projects and a dozen loft building housing conversions are planned for the old garment district. Even small business owners are benefiting from the new incentive. A local marketing and promotions firm, SJI, Inc., is slated to finish a rehab on its 176,000-square-foot headquarters building utilizing $1.3 million of state tax credits. As Toft explains it, the downtown revitalization effort stunted in the 1980s is reborn. "Rehab is back. People throughout the city are reinvesting in historic buildings. A preservation industry has emerged once again."

St. Paul: A Sustainable Urban Village
Lowertown, in downtown St. Paul, was once considered a "no man`s land" of abandoned warehouses and rail yards. Cut-and- clear urban renewal projects, much like those being proposed again today in Baltimore (Forum News, Nov./Dec. 1999, "Who Wants to Revive Urban Renewal?") and Pittsburgh, had left gaping holes and economic ruin in their wake. The city`s leadership stepped forward with what was then a bold idea-use the historic warehouses as assets and promote their rehabilitation through mixed use as apartments and small business and retail properties. Mayor George Latimer approached the private McKnight Foundation with this idea and secured a $10 million grant to launch a nonprofit corporation as a catalyst for Lowertown`s revitalization. Formed as Lowertown Redevelopment Corporation and headed by Weiming Lu, a planner and urban designer turned preservation-ist, this corporation serves as a marketing agency, a development bank, and an advocate for compatible urban design.

Working closely with developers, architects, property owners, retail businesses, and residents, Lowertown Redevelopment promotes using old buildings and compatible new construction to enhance the cultural fabric of the community. It emphasizes creating amenities for the area such as a new public park, playground, farmer`s market and streetscape enhancements. Artists` lofts and galleries support a thriving cultural community with more than 500 artists living and working in the area. As Lu puts it, Lowertown includes "unique work spaces in renovated historic buildings, one of the most extensive fiber optic telecommunication infrastructures in the region, a satellite uplink, and a concentration of creative artists, designers and engineers who understand the new media and are finding ways to be part of them."

Since 1978, Lowertown has attracted $428 million in new investment with two-thirds of the district`s previously vacant and crumbling historic structures put to productive use. That includes providing 1,500 housing units, 25 percent of which are low-to-moderate income, and 4,600 permanent jobs. In addition, the approach taken by Lower-town Redevelopment to encourage compatible urban design has resulted in rents that are generally 10 percent more per square foot than the rest of downtown St. Paul.

Yes, Pittsburgh, Too
Pittsburgh`s success revitalizing historic buildings had an early beginning. In the 1960s the city demolished thousands of Victorian-era row houses and displaced inner-city residents in order to construct massive sports arenas, shopping malls, and office complexes. In 1964 Arthur Ziegler and others interested in preserving the historic buildings and improving the African-American neighborhoods in the city formed Pittsburgh History & Landmarks Foundation. The foundation created a revolving fund to purchase and rehab the most dilapidated structures and eventually convinced the city`s urban redevelopment authority to lease the rehabbed buildings, then rent them to lower-income residents.

In 1967, Ziegler began to work in two neighborhoods on Pittsburgh`s North Side-the Mexican War Streets and Manchester. He worked with residents of both neighbor-hoods to create the Mexican War Street Society and the Manchester Citizens Corporation (MCC). Year-after-year deteriorated structures were bought, rehabilitated, and rented or sold to neighborhood residents. Landmarks initiated a revolving loan fund in 1985 created by the sale of restored properties. Today more than 800 houses in Manchester have been rehabilitated, failed public housing projects have been demolished, and compatible new townhouses have been built. Recently, MCC began a multi-year $40 million neighborhood revitalization strategy.

In 1976, Landmarks embarked on its Station Square project-transforming a 52-acre railroad terminal site along the riverfront across from downtown Pittsburgh into a mixed-use retail, commercial, and entertainment complex. Completed as a demonstration project on the practical benefits of historic preservation, the site was redeveloped with no local public subsidy and only one federal grant of $980,000. Today, Station Square is home for 134 businesses with more than 3,000 employees. It attracts close to 3 million visitors each year, making it the top visitor attraction in the city, with a return to the city, county, and school board of $4 million annually in real estate and parking taxes.

Today, Pittsburgh`s residents are benefiting from their own example of historic preservation as the solution for urban revitalization. One of the first urban commercial districts to participate in the National Trust`s Main Street program, East Carson Street, has seen more than $50 million in private investment with 160 building rehab projects under-taken, and more than 200 new businesses and 750 new jobs created in the past decade.

As Ziegler sums it up, "In Pittsburgh, preservationists have developed positive plans for revitalizing neighborhoods, main streets, and older urban core areas with strong grass-roots support and representation. These plans have proven to work well."

Lessons Learned
So what should Pittsburgh, Baltimore, and other cities considering urban renewal learn from other successful big-city revitalization efforts?

It takes committed, visionary leadership to remake downtown. The mayor plays a key role, but it requires other business and civic leaders, including a nonprofit partner who can advocate for incentives, market downtown resources, and promote historic preservation.

It requires coalitions to implement and sustain a long-term strategy for downtown revitalization. All partners- business groups, housing advocates, social services, law enforcement, preservationists, property owners-must be at the table. Through partnerships, obstacles to redevelopment are identified, creative solutions are found, and the benefits of economic expansion are credited to all.

It won`t happen without local and state tax incentives and other forms of local financial assistance. Whether it`s a local tax abatement, a state historic tax credit, bridge financing, or bonds, local and state governments must make the same commitment and be willing to risk short-term tax revenues toward the revitalization of the urban core.

It takes a catalyst. In most cases, a key redevelopment project can serve as the catalyst for a larger revitalization plan, but in some instances it might be the designation of a historic district, the election of a new mayor, or the creation of a new tax incentive.

It won`t succeed without housing. Bringing people downtown means more than 9 to 5. It means 24-hour living. Eliminating impediments and creating incentives for downtown housing must be part of the redevelopment plan.

And, most importantly, it takes a plan! A comprehensive, phased strategy for downtown revitalization requires significant financial investment, buy-in by local and state stakeholders, and participation by the citizenry. A public process involving all the stake-holders including local businesses, investors, nonprofit organizations, and affected government agencies will result in a better plan with a greater chance of success.

Piecemeal approaches to redevelopment eventually fail, as have expansive tear-it-down, pave-it-over urban renewal programs. Cities with successful downtowns today started with the basics-creating a plan, building consensus, investing in existing building stock and local businesses, and making it easier to redevelop in downtown. And, ultimately what they`ve found is that preservation pays.

Our allegiance is to the future, but not at the expense of our past.

Publication Date: Spring 2000


Author(s):Lisa Burcham

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