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What Does the Future Look like for Post-COVID Downtowns?

 

What Does the Future Look like for Post-COVID Downtowns?

Written by Candace Damon

 

We have been wondering how the diversity of cities in which we work are innovating and adapting to the new reality of hybrid work. Specifically, we were curious if the civic leaders with whom we’ve worked on downtown revitalization in some parts of the country had lessons to share with their counterparts in other regions. Below, we invite you to read responses from nine private developers, city officials, business improvement district heads, and other civic leaders. Here are the key takeaways:

    • Cities that have committed to the long-term project of building mixed-use downtowns with a strong residential presence are bullish on their future. This is a theme that runs through the narratives from Fort Lauderdale, Jacksonville, Philadelphia, and Arlington (VA). The corollary is also true: cities like Vancouver are seeing the development of commercial product in formerly residential neighborhoods. These market developments will clearly have implications for long-term public policy with respect to, at least, transit investment and zoning.
    • Some of the currently most successful real estate products respond directly to the requirements of hybrid work. While demand remains soft for many conventional commercial and residential products in many markets, hybrid products that address the requirements of hybrid work are succeeding in cities that welcome experimentation. For instance, in Fort Lauderdale, commercial spaces that offer high-end residential amenities like dog runs are leasing strongly. Similar kinds of successful experiments with hybrid space usage are reported in Chattanooga. We wrote about the potential for this kind of development in an earlier issue and are intrigued to see it coming to pass.
    • Other kinds of experimentation with space reusage offer opportunities to improve equitable outcomes. A Portland real estate leader notes the potential of obsolete, small-floorplate office buildings for conversion to affordable housing. An Amarillo friend writes about successful reuse of a variety of obsolete and underutilized spaces to foster innovation and workforce development in that city’s core strength in meat production.
    • Investment in the public realm can do triple duty — improving equitable outcomes, boosting private commercial returns, and building residential demand.  That’s the view of clients and colleagues in New York City, Fort Lauderdale, Jacksonville, Chattanooga, and Arlington (VA). For AJARR’s readers with a passion for parks and open space, that is welcome — if unsurprising — news and ought to be part of the narrative we advance in our work.

    Please reach out if any of these experiences resonate with you, or if you want to share other lessons from the contemporary downtown experience.

     

 

Fort Lauderdale

Jenni Morejon, President & CEO

Fort Lauderdale Downtown Development Authority

Three pillars are driving Downtown Fort Lauderdale’s (FTL) successful evolution: a strong pipeline of residential development; offices that blend the line between living and working; and investments in public space.

 

More than 6,000 new residents moved to Downtown FTL in the past two years. The population growth—80% since 2010—created a healthy balance of residential and commercial uses. While most city centers largely made up of office buildings went dark during the height of covid, Fort Lauderdale thrived.

 

Traditional offices in FTL are now competing with unique amenities in new residential developments, from outdoor terraces to dog runs. This healthy competition requires new offices to up their game and blend the line between living and working, which in turn attracts new talent and the companies hiring them to Downtown Fort Lauderdale.

 

Quality places for the entire community to gather outdoors are key to an equitable future. For example, the reimagining of Huizenga Park in Downtown FTL will transform a vacant large outdoor event space into a highly activated park.

 

By prioritizing new residential growth, blending the line between living and working, and investing in accessible public spaces, cities can reenergize traditional central business districts towards a more vibrant and resilient future.

 

Pacific Northwest

Pat Callahan, Founder and Chief Executive Officer

Urban Renaissance Group LLC

Adaptive re-use is one of the most powerful tools we have for revitalizing the public realm and commercial business districts in a post-Covid world. The most immediate action item for local and state government in this new environment is to encourage change in use from older small floor plate office buildings into affordable residential units, close to services and jobs. Small floor plate office buildings can easily be converted to small residential apartment units and Single Room Occupancy (SRO) formats, if regulatory obstacles are removed. In fact, governments should provide subsidies to encourage these conversions through incentives, including low interest loans. We have a housing affordability crisis, and we need to get serious to solve it. This will address affordability and urban vitality at the same time. Single room occupancy should also be encouraged.

 

Experimental retail in the urban core should also be encouraged. For example, Urban Renaissance Group is currently reimagining Portland’s Lloyd Center — once the largest mall in the world, which “Portlanders had left for dead.” With a new master plan and tenanting strategy, Urban Renaissance Group is proud to engage in this iconic project turning around.

 

New York City

Celine Armstrong, ASLA, LEED AP, Chief Development Officer

Fifth Avenue

New York City has a rich and beautiful history of adapting and innovating during moments of uncertainty, struggle, and crisis. Case in point, during the early months of the coronavirus pandemic, the city’s people reclaimed their streets as well as the city’s underutilized spaces. While this is nothing new to many New Yorkers, it became a citywide reality, taking on a brand-new energy with people of all ages and economic status demanding—and creating—more spaces for outdoor activities.

 

People need to be around other people and thanks to these new spaces, New Yorkers were able to truly appreciate the pedestrian-friendly environment. The city quickly adapted several different areas, finding room for outdoor classes, eateries, and more. As with several European cities, the parts of the city that embraced these changes became more vibrant and their stores and restaurants lived to see another month.

 

Fortunately, city leadership has supported efforts like Open Streets and there is now enough data available to know that an investment in the public realm not only leads to an increase in revenue for local business, but also increases quality of life in a way that people want to return to the reimagined business districts.

 

Jacksonville, Florida

Jake Gordon, CEO

Downtown Vision Inc, Jacksonville Florida

Like all cities, we’re still adjusting to the “new normal” in Jacksonville, Florida. We as city builders need to continue to focus on what’s important — the people that make our urban centers great. In Jax, we have focused on supporting existing tenants, and adding residents, both valuable and effective strategies.

 

Still the effects of pandemic were substances. In Downtown and citywide, our office market is experiencing record levels of available and vacant space[1]. However, direct asking rates have not only surpassed pre-Covid levels, but they have actually reached record highs[2]. Talk about a new normal! Downtown covers less than one percent of Jacksonville, but it’s home to a third of Jacksonville’s office inventory and so most affected with changes brought on by increased remote work.

 

Yet these negative effects from the pandemic are balanced out in Jacksonville by both a huge increase in relocations to North Florida and ongoing diversification of who is coming Downtown. Sustained growth has actually led to an overall increase in street traffic Downtown. Plus, in the past five years, we here in “DTJax” have focused on adding residents and have doubled that number over the past decade. If all the development projects in the current pipeline are built, the number of residents will double again, reaching more than 16,000 people. Meanwhile, the City and our Downtown Investment Authority is investing heavily in waterfront activation, parks, and bike and pedestrian trails to provide unique amenities to enhance the quality of life and recruit business and talent.

 

Downtown Jacksonville is on the rise! All of these statistics come from our new State of Downtown Jacksonville Report 2022, to be released soon at DTJax.com/research.

 

[1] 2022 Q2; 26.1% vacancy rate in Downtown, 19.8% in Jacksonville overall

[2] 2022 Q2 Average Lease Rates: $22.96 for Downtown, $21.94 for Jacksonville overall

 

Philadelphia, Pennsylvania

Prema Katari Gupta, Executive Director
Central Philadelphia Development Corporation and Vice President for Parks and Public Realm

In Philadelphia, office-to-residential conversion is not a new concept. A quarter-century of successful conversions of old office buildings, while new ones have been added, has yielded a highly diversified downtown with one of the country’s largest residential populations. Today, foot traffic on Center City sidewalks is approaching pre-pandemic levels, despite the fact that only 52% of office workers have returned, typically only three days per week. Residents, and increasingly tourists, have animated streets and generated economic activity that has insulated downtown retail and restaurants from a more pronounced downturn. Demand from residents and visitors for parks, shopping, museums, and theater will sustain the amenities that entice more office workers downtown.

 

A diversified downtown brings together people from across the income and socioeconomic spectrum. Compelling research from Raj Chetty has demonstrated that meaningful cross-class connections boost individual economic mobility more than anything else. As regions become more politically polarized, neighborhoods sort by demographics, and social media displaces eye contact, downtowns remain places where everyone can come together and share space, making downtowns a key accelerant of upward mobility and a pathway to the American Dream.

 

 

Chattanooga, Tennessee

Emily Mack, President & CEO

River City Company

What happens when you combine a pandemic with a city that has been voted “Best Outdoor City” twice and offers the world’s fastest community-wide internet through their local municipal utility, EPB? It welcomes a flood of new residents and companies along with recognition as “PC Mag’s 2021 #1 remote-working town.” Since 1986, River City Company has led downtown redevelopment projects, which have been replicated across the United States, including a renowned riverfront featuring large-scale festivals, billions of dollars generated from tourism and a renewed focus on emphasizing creating an atmosphere for residents first.

 

Today, organizations like River City Company are needed more than ever. As Chattanooga continues to evolve, River City Company serves as the convener and works with companies to transform single-use spaces like offices and surface level parking lots into dynamic spaces geared toward improving social interactions, new housing types and connections to culture. By no means does this mean the “traditional office” is dead. In fact, Steam Logistics, who was just ranked #254 on the Inc. 5000 list of America’s Fastest Growing Companies, is renovating a decades vacant downtown building to welcome 400 employees to their new headquarters.

 

For those returning to the office, some are expecting more from it. green|spaces just announced embarking upon a “Living Building Challenge” with the goal of a creating a health-conscious community hub that is net positive water and energy. History has shown us that downtowns can be resilient, but only if the residents and businesses are willing to take steps to evolve and transform. Chattanooga, where the streetlights were once set to blink after 5pm, is a shining beacon in the South that has proven through strong private/public partnerships, innovation, adaptiveness, and a bit of grit, you can create a city where all can thrive.

 

Arlington, Virginia

Tracy Gabriel, President/Executive Director

National Landing

COVID has changed the landscape for downtowns and central business districts. Locations that foster a mix of uses, welcome inclusive growth, invest in open spaces, provide regulatory flexibility for reuse, and embrace innovation will be best primed to succeed in building a more resilient, competitive, and equitable market.

 

Seek Balance. The pandemic exposed the economic vulnerabilities of office-dominated downtown districts. In National Landing, a growing downtown and innovation district in Arlington, VA just outside DC, we have learned the importance of a balanced mix of uses — including housing and open space — for a competitive district. Our nearly 1:1 ratio of workers to residents has buoyed the area and fostered a vibrant, active streetscape. Increasing housing, including committed affordable housing and adaptive reuse of vacant space, is key to building an equitable future, especially amid affordability pressures.

 

Innovation Mindset. To tackle vacancies/reuse, we are keeping our sights set in National Landing on embracing innovation, digital infrastructure, technological advances, and sustainability as key to evolving our future. We are building on the assets of major employers and educational institutions, like Amazon, Boeing and Virginia Tech, to pilot technology, enhance mobility, and support workforce development to cultivate talent for an inclusive ecosystem.

 

Vancouver, British Columbia

Katie Maslechko, Director of Development

Beedie

As a city challenged with extreme issues of affordability, the greatest lesson the Metro Vancouver region stands to take away is to embrace that “traditional” doesn’t look the way it used to, and that this new reality has accelerated a new definition of commercial business districts.

 

Across the region, Vancouver’s past decade of transit expansion created half a dozen neighborhoods with unique cultural and ethnic identities, each at a scale and mix of uses to rival the traditional commercial business district in downtown Vancouver. Prior to COVID, while many of these neighborhoods built more affordable communities focused on providing housing options, residents still commuted to the traditional commercial business district for jobs and services. All of that that changed after COVID.

 

This new reality has shifted, so instead of these neighborhoods being miles away from the urban core, they have spread new services, investments, and jobs across this diverse region. It has created a fundamental shift in equity and access across Metro Vancouver that must remain as much as a focus as the reenergizing of our “traditional” commercial business district.

 

Amarillo, Texas

Matt Garner, PhD, Scientist/Founder

MicroResearch

Amarillo is located five hours from larger cities like Dallas, Oklahoma City, and Denver, and is unofficially considered the capital of the Texas/Oklahoma Panhandles. Located in flyover country, our region produces 30% of the nation’s beef and 100% of its nuclear warheads, resulting in expertise critical to food and national security.

 

To serve regional stakeholders, Amarillo developed initiatives that converted physically and intellectually vacant space to fill in workforce and technological “knowledge gaps.” Considerable local resources were allocated establishing: i) a technically-dedicated high school (AmTech) in an abandoned warehouse, ii) a Community College Center for Technical Upskilling (Innovation Outpost) in a vacant community center and iii) an EDC stimulated Beef and Dairy “Global Food Hub” aimed at resource alignment & re-branding the area as a “Technological Oasis” serving our current businesses’ technological and workforce needs in an unrented downtown storefront.

 

These ideas were manifested into physical spaces while COVID shut down physical collaboration and work across the country; meanwhile, Amarilloans continued working & making food.

 

Many small/mid-sized cities would be well-served to lean into their authentic identity & expertise by creating physical spaces to strengthen the areas where they are already global leaders and formally creating their own “Centers of Excellence.”

Welcoming New Team Members and Celebrating HR&A University

HR&A is pleased to announce one of our largest and most diverse cohorts of new additions to the firm, spanning our six offices and various roles. This group of analysts, urbanists, and creative problem-solvers came together early this summer in our New York office for our annual HR&A University training week to network and learn about the wide range of important work happening across our practice. We’re excited to continue tackling the complex challenges facing our cities with these talented team members.

 

Alexandra Belyaev, Special Assistant to the Executive Office  | Alexandra joins HR&A as Special Assistant to the Executive Office. She brings extensive experience in shaping collaborations that center dignity, generativity, and abundance.

 

Andrew Bolton, Research Analyst  |  In his role as a Research Analyst, Andrew provides research and analytical support to a wide range of projects at HR&A.

 

Melanie Downing, Practice Operations Manager – Broadband & Digital Equity  |  Melanie supports HR&A’s growing Broadband & Digital Equity Practice in the public interest broadband ecosystem.

 

Kayley Estoesta, Research Analyst  |  Kayley is interested in making cities more economically, racially, and socially just, while meaningfully engaging with neighborhood residents throughout the process.

 

Tara Fay-Reilly, Recruitment Manager  |  Tara works with our People team to oversee HR&A’s recruitment strategies, helping to ensure equitable recruitment processes and a strong pipeline of candidates.

 

Will Finkelstein, Research Analyst  |  Will provides research and analytical support to urban innovation, economic development, and real estate projects throughout the southern United States.

 

Vidhee Garg, Principal  |  Vidhee brings over 14 years of experience advising public and private sector clients in 25+ countries on developing new policies, programs, and business plans to help improve access to housing for underserved populations.

 

Kayla Jaffe, Analyst  |  Kayla is at the forefront of creating equitable and just urban communities; she has worked with a variety of government agencies, nonprofits, foundations, and private sector clients to develop policies and programs that support the United States’ changing demographics.

 

Anna Messer  |  A research analyst in our New York office, Anna is passionate about equitable economic development, affordable housing, and urban resilience.

 

Kimbaley Mitchell, Administrative Assistant  |  ‘Kimberly’ brings over 15 years of administrative experience across government, public, and the corporate sectors supporting Sr. Executives to her role as Administrative Assistant in HR&A’s Atlanta office.

 

David Nugroho, Analyst  |  David provides research and analytical support to projects ranging from transit-oriented development to affordable housing and real estate advisory.

 

Garrett Robinson, Research Analyst  |  Garrett provides research and analytic support for a variety of real estate and economic development projects.

 

Marielle Saunders, Analyst  |  Marielle provides research and analytical support to projects ranging from economic development and inclusive cities to urban resilience and innovation.

 

Mark Siriban, Business Analyst  |  Mark supports the internal business using data analytics to aid in making decisions on strategic initiatives about growth, people, and operations.

 

Kas Tebbetts, Analyst  |  Kas supports projects ranging from comprehensive planning to real estate development, with a focus on meaningful community engagement and holistic, interdisciplinary solutions to place-based challenges.

 

Alexandra Tomasulo, Executive Assistant  |  Alexandra joins HR&A’s New York City Office as an Executive Assistant where she brings over 6 years of executive assisting experience across private and public sector projects.

 

Tommy Truong, Analyst  |  Tommy draws on his experience in community engagement, data analysis and democratization, and public policy to support equitable and inclusive urban development.

 

Shoshana Wintman, Research Analyst  |  Shoshana is a Research Analyst based in the New York office. She is passionate about equitable urban development, resilient planning, and climate change adaptation.

 

Sylvia Xiaomeng Li, Director  |  Sylvia leverages her planning, design, policy, and engagement expertise to help shape transformative development, robust large-scale planning efforts, and regulatory innovations to advance housing and economic equity.

An Innovative Approach to Evaluating the Public and Private Benefits of Land Use Decisions

Written by Shuprotim Bhaumik and Alexander Meeks.

 

The Massachusetts Public Waterfront Act — “Chapter 91” — gives every state resident a legal right to access waterfront areas called tidelands. The Act defines specific requirements for land uses, building heights, and the siting of public open space in tidelands. The goal of these rules is to preserve public access to the waterfront.

In high-value real estate markets — such as Downtown Boston and Boston’s Seaport neighborhood — Chapter 91 requirements and real estate and economic development goals can come into conflict. On the one hand, waterfront tideland parcels offer access to high quality open space, provide opportunities for waterfront connectivity, permit water-dependent uses, and are the logical sites for resilient, green infrastructure. On the other, they provide significant opportunities for public fiscal return, enabling economic and housing development and private return on investment.

 

Under Chapter 91, if a property owner receives a waiver from the law to build bigger, higher, or otherwise reduce public access onsite, then the owner usually has to compensate the public for the public access it is removing. This compensation is called a “mitigation payment.” There is, however, no consistent or clear methodology or framework for negotiating such a payment. This lack of clarity can make waterfront development approvals and decision-making challenging and controversial.

 

To fill in this gap, the Conservation Law Foundation—an environmental advocacy organization based in New England—worked with HR&A to design the Massachusetts Tideland Development Calculator.

 

The Tideland Development Calculator estimates the additional land value unlocked by a project that reduces public access to tidelands compared to a Chapter 91-compliant project. The calculator suggests that this “land value premium” could be a source of financial compensation to the public that could support other public benefits, including alternative public access to the waterfront, water taxi stations, community spaces, public programming and/or coastal resilience infrastructure.

 

To assess the land value premium, the calculator creates two versions of the same project.

 

  1. Proposed project.  The calculator allows the user to define a tideland site and a potential project on that site. Given regional market assumptions, the calculator estimates the ballpark land value of this proposed project.
  2. Compliant comparison project.  The calculator compares the proposed project to a Chapter 91-compliant comparison project. The comparison project represents the legally achievable building scale onsite given Chapter 91 requirements. The compliant project is assumed to share the same proportional mix of uses as the proposed project.

The difference in value between the two projects (assuming the proposed project is taller or bulkier than the compliant project) is the “land value premium” – the total extra value generated by reducing public waterfront access.

 

By estimating the land value premium associated with relaxing Chapter 91 rules and limiting public access, the Calculator transparently sets the upper bound for negotiation about what amount of compensation is owed back to the public. The Calculator provides a framework for debating the private value at stake in Chapter 91 decisions and their economic and fiscal impacts. This information, which is usually not shared or agreed to, can serve as input to a more informed process of municipal harbor planning.

 

We invite you to play with the Calculator.  We welcome your suggestions as to how it could be made useful for your community and your land use debates.

 

This article is an abridged version of an article previously published on HR&A’s website and is a companion to an article published by The Conservation Law Foundation.  Both are part of a series of articles on the Massachusetts Tideland Calculator

 

 

 

Applying the Massachusetts Tideland Development Calculator

This article is the second in a series of articles on the Massachusetts Tideland Calculator. See Part One HERE. This series is a companion to an article published by The Conservation Law Foundation, available HERE.

 

The Conservation Law Foundation and HR&A Advisors developed the Massachusetts Tideland Development Calculator. Grounded in a solid understanding of real estate finance and market realities, the tool suggests a helpful framework for evaluating public and private use of public lands in many contexts.

 

“Chapter 91” of Massachusetts General Laws preserves public access to the waterfront by establishing requirements on land uses, building heights, and the siting of public open space in waterfront areas called tidelands. However, a project can obtain exceptions and build bigger or higher than what Chapter 91 rules allow on tidelands. In these cases, the project owner often has to compensate the public for the loss of waterfront open space by making a “mitigation payment.” Unfortunately, there has been no consistent framework for sizing these payments. To help fill this gap, the Conservation Law Foundation worked with HR&A Advisors to design the Massachusetts Tideland Development Calculator. The Calculator models the land value premium that a real estate development project gains by relaxing Chapter 91 rules.

 

The calculator in action—a theoretical case

For example, a real estate developer files plans to build a residential high-rise located on private tidelands in Boston’s Charlestown neighborhood. In addition to imposing strict height limits on the building onsite, Chapter 91 also requires that 50 percent of the site consist of open space. However, the proposal exceeds these height limits and only preserves 34% of the site area as open space.

 

The Calculator estimates that the proposed project includes about 210,000 square feet of gross floor area, 60,000 square feet more than what would be legally possible under Chapter 91. This increased gross floor area results in a residual land value premium of at least $4.6 million.

 

Project details: The site is 35,000 square feet in area, and it is located on private tidelands in Boston’s Charlestown neighborhood. The proposed tower includes 80 rental apartments, 60 condominiums, and 20,000 square feet of retail on top of 190 units of underground parking. In addition to imposing strict height limits on the building onsite, Chapter 91 also requires that 50 percent of the site consist of open space. However, the proposal exceeds the height limits and only delivers 12,000 square feet of open space.

Because the project delivers less than the minimum required open space onsite, the project owner has to compensate the public for the loss. A portion of the residual land value premium could serve as a source of this payment. And reaching out to the surrounding community would be a key step to envision the types of benefits that payment could create for everyone along the waterfront.

 

For more information on the methodology for calculating project value—referred to as residual land valuation—take a look at the calculator methodology.

 

Public and private benefits can align under Chapter 91

Although the narrative above suggests inherent conflict between public and private interests, this is not always the case. The developer’s returns and the public’s rights can often align. For example, delivering high-quality open space and public-facing amenities such as retail and community space can also significantly boost the private value of a project.

Photo by Tim Pierce

 

Boston Properties’ Atlantic Wharf project in Downtown Boston exhibits the potential for alignment. The project’s waterfront amenities include a public plaza facing the water, interior public spaces and exhibition rooms, ground-floor dining, and docks for water taxis and public boating use—all of which arguably boost the value of residential and office space onsite.

 

A new approach to evaluating private use of public lands

When it comes to waterfront development regulations, Massachusetts’s Chapter 91 is uniquely bold and specific. However, federal agencies, states, and local governments across the country engage in similar negotiations and deals to secure public benefits from private interests that develop on or use public land and water.

 

In California, the California Coastal Commission—and local agencies in specific cities like San Francisco—regulate development activities along the state’s coastline to ensure that the public enjoys uninterrupted access to the beach and ocean. On rare occasions when shoreline real estate developments cannot meet coastal development guidelines, the projects contribute a payment in lieu of compliance to a trust fund administered by the California Coastal Conservancy. The Trust Fund, in turn, distributes funding to projects that improve public access, natural resources, working lands, and climate resiliency projects along California’s coast.

 

Around national parks across the country, the Land and Water Conservation Fund (LWCF) acquires lands and waters to expand or protect federally owned areas, or extend public access to those areas. To make purchases, the LWCF relies on earnings from offshore oil drilling and natural gas leasing on said federal lands. In doing so, the LWCF effectively monetizes private energy-related imposition on public lands in order to further expand public resources.

 

Monetizing private interests in public lands in order to exact payments for public goods is nothing new. But in this broader context, the Calculator represents a new approach—one grounded in a solid understanding of real estate finance and market realities—to unlocking tangible public benefits from private actors that access land and water that belongs to the public. The Calculator makes it easier to have a conversation about the scale of public benefit that is appropriate, leaving public stakeholders and community groups to weigh in on how the money is used.

Welcoming New Members of our Team

HR&A is pleased to announce new additions to the Growth, People and Operations (GPO) team in our New York and LA offices, and our Consulting team in our New York, Washington DC, and Raleigh offices.

 

Adina Jahan, Research Analyst | Adina’s research and quantitative analysis guides strategies for equitable urban development, bringing expertise in the health policy and politics of underprivileged populations. Learn more about Adina.

 

Tajae Hinds, Recruitment Coordinator | Tajae supports HR&A’s People team by informing, developing and implementing recruitment strategies for consulting and non-consulting roles. Learn more about Tajae.

 

Eve Lettau, Analyst | Eve’s analysis guides policy recommendations for equitable and holistic economic development related to innovation districts, workforce development, and wealth. Learn more about Eve.

 

Danno Lemu, Analyst | Danno pulls from diverse experiences in community organizing, research, and data analysis to support economic development and affordable housing initiatives in the DC-region. Learn more about Danno.

 

Sam Moeller, Communications Manager | Sam helps HR&A tell its story by overseeing the firm’s digital communications strategy in support of intentional growth and meaningful impact. Learn more about Sam.

Launching the Massachusetts Tideland Development Calculator: An Innovative Approach to Evaluating Public and Private Waterfront Benefits

This article is a companion to an article published by The Conservation Law Foundation, available HERE. This article is the first in a series of articles on the Massachusetts Tideland Calculator. See Part Two of the series HERE.

 

The Conservation Law Foundation and HR&A Advisors developed the Massachusetts Tideland Development Calculator, a unique education and advocacy tool that represents a new and innovative approach to evaluating the economic tradeoffs between public and private access to public land.

 

The Massachusetts Public Waterfront Act—also known as “Chapter 91” of Massachusetts General Laws—gives every state resident a legal right to access waterfront areas called tidelands. The Act sets specific requirements on land uses, building heights, and the siting of public open space in tidelands. The goal of these rules is to preserve public access to the waterfront.

 

Diagram of a shoreline that complies with Chapter 91 regulations.

 

 

When public and private interests conflict, a need for new tools

In high-value real estate markets—such as Downtown Boston and Boston’s Seaport neighborhood—Chapter 91 requirements and real estate development goals can come into conflict. Waterfront tideland parcels are tremendously valuable to the public, especially in contexts where development is already limiting views and available open space. At the same time, maximizing real estate development on these parcels can generate significant financial returns to private developers while achieving important economic development and housing goals in dense urban areas. Therefore, a developer or city may desire to build larger or taller, or to reduce public open space on a site in order to unlock greater financial returns for both the private and public sectors.

 

Public Value of the Waterfront

  1. High-quality open space facing the water
  2. Opportunities for waterfront urban connectivity (e.g., Boston’s Harborwalk)
  3. Access to water-dependent uses and amenities: water taxis, boating, fishing
  4. Space for green infrastructure that combines public use and flood resilience

 

Private Value of the Waterfront

  1. Significant opportunity for private profit and greater local property tax revenue
  2. Significant value premium conferred by waterfront views and waterfront proximity
  3. Development of commercial office space to advance economic development goals
  4. Development of housing in urban areas with high demand for residential space

 

In the context of Chapter 91, if a project owner receives an exception to build bigger, higher, or otherwise reduce public access onsite, then the owner usually has to compensate the public for the public access it is taking away. This compensation is called a “mitigation payment.” But there is no consistent or clear methodology or framework for negotiating such a payment. This lack of clarity can make waterfront development approvals and decision-making challenging and controversial.

 

To fill in this gap, the Conservation Law Foundation—an environmental advocacy organization based in New England—worked with HR&A Advisors to design the Massachusetts Tideland Development Calculator.

 

Benefits communities can unlock from waterfront development

The Tideland Development Calculator estimates the additional land value unlocked by a project that reduces public access to tidelands. The calculator suggests that this “land value premium” could—at least in part—be a source of financial compensation back to the public. This funding could support waterfront-related public benefits. Benefits could include: public access to the waterfront close to the site, enhanced public amenities (e.g. water taxi stations, community spaces, public programming), or investments that deliver waterfront open space integrated with coastal resilience infrastructure.

 

To assess the land value premium, the calculator creates two versions of the same project.

 

  1. Proposed project. The calculator allows the user to define a tideland site and a potential project on that site. Given regional market assumptions, the calculator estimates the ballpark land value of this proposed project.
  2. Compliant comparison project. The calculator compares the proposed project to a Ch91-compliant comparison project. The comparison project represents the legally achievable building scale onsite given Chapter 91 requirements. This project shares the same proportional mix of uses as the proposed.

 

 

When the proposed project is larger and more valuable than the Ch91-complaint comparison project, this means that it exceeds Chapter 91 rules and unlocks greater land value as a result. This incremental value is the “land value premium”: the total extra value generated by reducing public waterfront access.

 

By estimating the land value premium associated with relaxing Chapter 91 rules and limiting public access, the Calculator sets transparent bounds for negotiations about what amount of compensation is owed back to the public—to fund investments like enhanced open space nearby and other public amenities.

 

The Calculator can reveal vital information about the private value at stake in Chapter 91 decisions. This information, which is usually very difficult to estimate, can serve as input to a more holistic process of municipal harbor planning. In practice, this broader process of harbor planning must also continue to meaningfully engage the public to understand the quantifiable and non-quantifiable importance of waterfront access for all community members, balanced against the importance of real estate development.

 

This article is a companion to an article published by The Conservation Law Foundation, available HERE.

How to turn dreams into dollars

Written by Amitabh Barthakur, Kate Collignon, and Stan Wall

 

The $973 billion Infrastructure Investment and Jobs Act (IIJA), signed into law last year, represents the largest investment in national infrastructure in decades. Before cities, counties, and states can access these funds and leverage any additional public or private funding, they must differentiate their visions, competing with exemplary projects from every corner of the country.  

 

HR&A has been helping cities across the country with competitive funding applications. We’ve convened stakeholders and partners to confirm visions, develop application narratives, refine strategies, and provide project management support through application deadlines and beyond. 

 

To illustrate what it takes to propose new projects that secure competitive funding, we spoke with three clients, all of whom have successfully competed for state or federal funding within the last year. Angie Rodgers is the Deputy Chief Administrative Officer for Economic Development in the Office of the Executive of Prince George’s County. Ron Golem is the Director of Real Estate & Transit-Oriented Development for the Santa Clara Valley Transportation Authority (VTA). Julie Schneider is the Director of Housing and Revitalization for the City of Detroit. Although their circumstances differ, certain themes are common among their successful efforts. 

 

A compelling narrative promises large-scale transformation. Prince George’s County, located outside of Washington, DC, recently secured over $400 million from the State of Maryland for Blue Line Corridor projects. The Blue Line Corridor is a vision for mixed-use transit-oriented development along the Washington Metropolitan Area Transit Authority Blue Line. The County is the largest and the wealthiest majority-Black county in the United States and has long sought to increase its competitive position in the Washington region. The County envisioned the Blue Line Corridor as a template for an equitable economic and community development strategy that could then be rolled out in other transit corridors in the County.  

 

The proposal to the State went far beyond just describing how to expand transit and attract business — it included fostering housing production, including affordable housing; celebrating the existing community through arts and cultural investments; and creating active mixed-use communities to attract new businesses. It set forth a goal of creating a sense of place across a diverse, 500-square-mile County comprising rural, urban, and suburban areas.

 

HR&A helped develop this vision and served as an extension of the County’s Economic Development team, specifically helping to translate the vision into a portfolio of infrastructure investments. Describing and visualizing the components of the vision attracted a wide range of stakeholders who successfully advocated to state lawmakers and continue to help leverage additional investment as the project unfolds.

 

Establishing the connection between competitive public funding and private investment makes for a compelling narrative as we learned from the Santa Clara Valley Transportation Authority (VTA) and its successful application to expand its transportation network through the new Federal Transit Administration (FTA) Expedited Project Delivery (EPD) pilot program. VTA understood that EPDs are required to utilize public-private partnerships and have a federal share not exceeding 25% of the project cost. Therefore, a partnership with Google was critical for securing federal support for the long-dreamed-of extension of Bay Area Rapid Transit (BART). HR&A worked with VTA’s Director of Real Estate & Transit-Oriented Development to estimate the impact of the BART extension on VTA’s real estate assets as well as well as the potential growth of transit-oriented communities proximate to the new stations, referencing the City of San Jose and Google’s commitment as evidence of the validity of the estimate. 

 

After solidifying Google as the project’s key private partner, all efforts pivoted to engaging regional agencies to establish the plan’s value, including economic opportunity, in order to secure the state and local funding commitments to establish the match for federal funding. One key hurdle was the lack of precedent — a new funding stream meant there was no playbook to reference. VTA and FTA collaborated to prove the plan’s readiness, feasibility, and impact for communities from San Jose to Santa Clara. VTA leadership stayed in close touch with their federal colleagues, especially to define the public-private partnership, proactively address equity, meet conditions required to enter into a federal funding agreement, and refine future frameworks. VTA relied on a core set of subject matter experts to assist in compiling the business case for the funding application. 

 

In the end, VTA was selected as the first recipient of this new FTA program. With a second federal allocation announced in late March 2022, HR&A is excited to work with VTA on implementation. 

 

Demonstrating community support is essential. HR&A worked with the City of Detroit’s Housing and Revitalization Department to secure $30 million in HUD Choice Neighborhoods (CNI) funding for the city’s historic Corktown neighborhood. In spite of the challenges of virtually assembling an application during the height of the pandemic, the City engaged residents from the Clement Kern Gardens Apartments, service providers, the Ford Motor Company, and City agencies to develop a collective vision for equitable redevelopment anchored by housing and workforce opportunities along with other infrastructure improvements. The City worked hard and early in the planning process to build trust with the community undertaking an extensive effort to listen, discuss, and identify opportunities for planned improvements and new resources to benefit different groups. The City successfully adapted its approach to community engagement during the course of the project, shifting from offsite and Zoom meetings to outdoor conversations onsite during more convenient times for residents. HR&A helped the City gauge the competitiveness of its application throughout the process, enabling it to remain accountable to the community and to the grant process. 

 

These efforts boosted the grant application’s chances of success in two ways. First, the City was able to demonstrate that the community’s priorities overlapped with the grant’s parameters. Second, the early focus on community engagement generated broad support around a set of common interests and priorities that elected officials and other stakeholders could use to advocate for the effort. 

 

HUD’s award of $30 million to the city will preserve the existing public housing in the neighborhood and create more than 700 new affordable and mixed-income homes. In addition, the grant is leveraging over $800M in additional public and private investment in public space, community facilities and commercial development. The extensive outreach effort established a strong base of support to move the project forward and not lose sight of the relationships developed during the application process. 

 

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There are billions of federal and state resources available for communities to address critical infrastructure investments, and the need to plan early and intentionally to win those funds has never been more evident. This is a historic opportunity to improve lives and entire regions. 

Marilynn Davis Joins HR&A

HR&A is proud to announce that Marilynn Davis has joined the firm as our newest Senior Advisor.

Marilynn, who most recently served as the Chief Real Estate Officer at Clark Atlanta University, will help expand the firm’s impact across Atlanta and beyond.

Marilynn’s career has placed her in leadership roles across sectors, including Assistant Secretary of Administration at the U.S. Department of Housing and Urban Development, nominated by President Clinton, Managing Director of the New York office of real estate development firm IMC Octave, CEO at landscape architecture firm, Martha Schwartz Partners and other roles at FleetBoston Financial Corporation (now a part of Bank of America), American Express Corporation and General Motors Corporation.

In April, Marilyn will represent HR&A on a panel at the Urban Land Institute (ULI) Spring Meeting in San Diego — Redefining Excellence in Real Estate with Equity at the Core.

Learn more about Marilynn’s story below.

What inspired you to join HR&A following such a defining chapter of your career at Clark Atlanta University (CAU)?

For over 150 years, CAU has provided young African Americans with the intellectual and leadership tools to shape “the future of the global community.” As the institution’s first-ever Chief Real Estate Officer, we aligned our 50+ acre portfolio with our mission by actively seeking to generate revenue while also reinvesting in the Atlanta community in which the University is situated.

CAU is successfully leveraging the booming real estate market in Atlanta to create economic opportunity and prevent displacement of our neighbors. As we see in Atlanta, universities, cities, and real estate professionals are uniquely positioned to develop projects that meet financial metrics, but also provide avenues for economic and social uplift. Joining HR&A enables me to advance these opportunities across the country as part of a firm operating with equity as an intrinsic part of the solutions it proposes to clients.

How do you approach turning vision into action, especially for projects that feature public, private and community stakeholders?

The most successful development projects enable public, private, and community priorities to converge. While the community remains engaged, and their concerns actively addressed, public leaders advance solutions to improve quality of life for all residents. The private sector acknowledges the connectivity between developing visionary projects and sustaining good quality of life to attract the talent that they will need to sustain their investments. In addition, it’s critical that we incorporate the perspective of education systems, cultural, non-profit, and philanthropic institutions in building ecosystems that lead to successful planning and development.

How can the Atlanta Metro region continue to address equity through real estate and economic development?

This region is experiencing an unprecedented economic boom from an array of industries, so a critical precedent for promoting equity exists. Historically, large-scale real estate development has been conceptualized as projects in isolation, rather than parts of communities that embrace housing, education, culture, and public space for everyone. Large-scale real estate development should be considered the ultimate platform for building an ecosystem that will interact with and respond to the needs and aspirations of the people who the project will inevitably impact.

What are three of your favorite things to eat, see and do around Atlanta?

  • Ponce City Market: This former Sears warehouse on the Atlanta BeltLine features curated food and retail concepts alongside public event space, as well as commercial and residential property. This is where I eat, meet friends, and explore. The historic renovation has been a catalyst for the resurgence of the Old Fourth Ward community, and I hope the broader corridor along the BeltLine continues to more fully prioritize inclusive development.
  • High Museum of Art: The exhibitions and programs are remarkable while also being accessible to a range of visitors with various experience in the arts.
  • WCLK 91.9 FM: Check out CAU’s 24/7 jazz station, which features live programming and the best from the Marsalises, Coltrane, Davis, and others. You can support the non-profit station from anywhere in the world via their app.

What advice would you give to a young person exploring a career in real estate and urbanism?

A liberal arts education empowers a young person to embrace their intellectual curiosity and find creative solutions. Since building cities and developing real estate present a multitude of challenges with monumental impacts, I strongly encourage young people not to limit their exploration. Rather, dive into a wide range of relevant topics, from history, architecture, and design to economics, sociology, and science. This diverse knowledge can expand can a young person’s perspective, enrich their life, and prepare them to lead.

HR&A study leads to Philadelphia establishing the country’s first municipal public bank

On March 3, the Philadelphia City Council voted to establish the country’s first municipal public bank, which will lend capital to small businesses and address the historic racial disparities in commercial banking. This decision accelerates a different path for a city with one of the highest poverty rates, as well as the highest rate of un- and underbanked residents among major U.S. cities.
 
HR&A built on the vision established by the City of Philadelphia and authored an independent feasibility study that sets the direction for an optimal public bank structure that could achieve the City’s dual goals of uplifting the power of small businesses, many in the Black and Latinx communities, and upholding autonomy over the City’s financial resources. A public bank will help the City channel its banking powers in the public interest and offers a launching point for both immediate action and systemic change.
 
We commend the City of Philadelphia for launching an autonomous and equitable financial system for the people who live and work across the city.
 
Learn more about HR&A’s work with public banking here.