December 2007 VOL. 2

Urban Revitalization -
Creating a catalyst for downtown redevelopment

In the early 1990s, Spokane, Wash.'s downtown core was on its way to becoming a vacant, blighted area. Prostitutes and drug dealers had taken up residence on the downtown streets that used to bustle with businesspeople, shoppers and tourists. Only a coordinated effort by city leaders and downtown owners and businesses saved the city, which is built on the banks of the Spokane River about 300 miles east of Seattle.

As the hub for the Inland Northwest - a region with a population of nearly 2 million people and encompasses several states including Washington, Idaho, Montana, Oregon and parts of Canada - Spokane always boasted a strong downtown core, says Betsy Cowles, president of the Cowles Company, a Spokane-based company with a variety of holdings including downtown real estate.

"We've always been the economic center for hundreds of miles," points out Cowles, a fourth generation Spokanite. For example, Spokane hosted the 1974 World's Fair, which was - by all accounts - a roaring success. The Fair sparked a development boom in downtown Spokane, creating a 100-acre park along the river and a downtown mall called River Park Square, owned by the Cowles Company.

Over the next 20 years, Spokane proved that its urban core was vulnerable to the troubles other American cities experienced. "We saw what had happened to other cities' downtowns, and we could definitely see the writing on the wall," Cowles notes, adding that River Center lost two of its four department store anchors within months of each other.

The Cowles Company was faced with a dilemma - should it pack up its tent and look for other investment opportunities or stick it out in downtown and try to turn things around? With its long history in the city, the company decided to do everything it could to spark redevelopment in Spokane's core - it invested more than $115 million to redevelop River Park Square, a project that spans almost two city blocks. The new 373,000-square-foot retail center, which features a new 130,000-square-foot Nordstrom's department store and a 20-screen movie theater, launched the city's urban revitalization.

"We were motivated by the fear that Spokane would die on the vine," Cowles admits.

Plan for the best

Sadly, many of America's urban areas have "died on the vine", and city and business leaders are now faced with the tremendous task of revitalizing these downtown cores. In fact, 62 percent of all major city population growth in the 1990s occurred along suburban borders, compared to just 11 percent in city cores, according to a report from the Brookings Institution's Center on Urban and Metropolitan Policy.

A lack of investment in the downtown cores contributed to the decline and now cities across the nation are trying to figure out how they can take their urban centers from vacant to vibrant. Experts suggest three main strategies: create an organization to bring together business leaders and city officials; design a masterplan to encourage investment; and develop a way to leverage any special attractions in the downtown core.

Consider Phoenix, Ariz. - in the late 1980s, the city's core was in "dire straights," according to Don Keuth, president of the Phoenix Community Alliance, a non-profit organization that is focused on center city redevelopment. "Our downtown was really a no man's land," he recalls. "We didn't have any kind of well-funded community organization or governmental entity that stepped up to take ownership."

That's when several community leaders decided to create an organization that would be funded by member dues and whose goal was to foster and promote redevelopment of Phoenix's urban core. Thus the Phoenix Community Alliance was born.

"Our first step was to assess how bad the situation was," Keuth recalls, adding that the organization partnered with the Arizona chapter of the American Institute of Architects to craft a new masterplan for the multi-block area known as the Capitol District. Along with all of the state government buildings, Phoenix's Capitol District also houses most of the city's human services organizations.

As part of the revitalization, Phoenix Community Alliance created a program for the development of three new state office buildings and partnered with Maricopa County to develop a $22 million human services campus that consolidates all the social service agencies that were spread out over a five-block area. The cornerstone of the campus is the Day Resource Center that houses about 20 agencies that provide a variety of social services including housing assistance, job training and medical care.

These revitalization efforts have encouraged private sector development including the $46 million headquarters facility for Translational Genomics Research Institute (TGen), a private, non-profit research institute and the International Genomics Consortium (IGC), a private, non-profit medical research foundation that employs 450 people.

Like Phoenix, the City of Spokane also created an organization to lead its urban revitalization. The organization, dubbed the Downtown Spokane Partnership, was formed 12 years ago. Its first step toward revitalization was the creation of the business improvement district, which is comprised of 1,800 businesses and property owners.

The Downtown Spokane Partnership is funded by annual assessment fees and its main function is the management of the business improvement district, according to Marty Dickinson, president of Downtown Spokane Partnership. The business improvement district keeps the downtown area clean and safe and it also advocates smart development through its downtown masterplan.

Since the inception of the Downtown Spokane Partnership and the business improvement district, Spokane's urban core has been completely transformed. For example, the city's turn-of-the-century Davenport Hotel was renovated and reopened after years of neglect, and its historic Fox Theater just had its grand re-opening last month.

"We have learned that if you can make your downtown a clean, safe and inviting place for residents and visitors, it breeds more revitalization," Dickinson adds.

Making something special

Many cities have been able to resurrect their urban cores by leveraging specific downtown attractions - something special and unique that residents and visitors can only experience in the city center.

In Phoenix, for example, much of the redevelopment activity is concentrated around the sports venues. The city boasts two of the most heavily attended sports venues in the nation - US Airways Center, where the Phoenix Suns NBA team plays, and Chase Field, where the Arizona Diamondbacks MLB team plays. About 5 million people attend Suns and Diamondback games annually.

The city's biggest revitalization project, CityScape, is under construction right across the street from US Airways Center. Developed by Naples, Fla.-based Barron Colliers Company and Kansas City-based RED Development, the 2.5 million-square-foot, mixed-use project encompasses three city blocks. Wachovia recently announced it will base its regional headquarters at CityScape, which also includes the state's first Hotel Palomar.

Similarly, the city leaders of Chattanooga, Tenn., leveraged the city's 12-mile waterfront to encourage revitalization, says Jim Bowen, vice president of the RiverCity Company, a private non-profit organization that focuses on downtown Chattanooga's redevelopment.

Situated along the Tennessee River, Chattanooga went into a downward spiral in the late 1960s when it was recognized for having the worst air quality in the United States. City leaders put together a public-private partnership to improve the city's air, but the damage had been done - the city, long known as a manufacturing base, began losing its economic base and its downtown emptied, explains J. Ed Martson, vice president of the Chattanooga Chamber of Commerce.

The city's riverfront emerged as its only hope for resurrection, and the RiverCity Company was charged with the task of developing a plan for the riverfront. "We had to figure out how to use the riverfront to our advantage," Bowen explains, adding that the riverfront used to house a radiator repair shop and two tire stores. "We believed that if we improved our quality of life by creating these great public spaces, then ultimately the investor segment would cue up to it."

The final plan had a price tag of $120 million and involved the transformation of 29 acres of waterfront. The organization, along with the city, raised $51 million in private sector philanthropy, and that money kicked off the waterfront redevelopment.

Today, the river is home to the world renowned Tennessee Aquarium and Children's Museum and is dotted with three new hotels, a Class-AA baseball stadium and number of shops and restaurants. Additionally, there's about $330 million worth of residential condos under construction or recently completed in downtown.

Businesses are expanding too. For example, Blue Cross and Blue Shield of Tennessee, which had previously thought about leaving Chattanooga, instead decided to build a $300 million campus in downtown. The campus, which will house 3,000 employees, is currently under construction.

"Downtown is the signature of your community, and when people visit your city, the downtown is what leaves a lasting impression," Bowen says. "If it's boarded up like a ghost town, they don't have a good opinion. It makes sense to revitalize your urban core because its important to the economy and the future of your city."