Seven Types of Urban Redevelopment Sites

Riding the #16 back from the streets.mn Writers Conclave, one sees that the Green Line (nee Central Corridor) has left a path of destruction in its wake. From downtown Minneapolis to past the edge of the University of Minnesota, parking ramps, the Star Tribune headquarters, the Metrodome, and WaHu are just some of the largest redevelopment sites oriented toward this line as Minneapolis strives to become Manhattan (or perhaps we should say Maxiopolis).

Before we are too quick to credit transit investment as the cause of the development, note that even off the line, in places like Uptown, the Wedge,  and Dinkytown, the 2010s say out with the old and in with the new.

Yet regardless of the causes of redevelopment, it is here, it is generating controversy, and that controversy in part is a result of insufficient policy tools.

Hierarchy of Redevelopment (with examples)

I will propose these guidelines for seven types of urban redevelopment sites:

1. If it’s a vacant lot – Build on it. [Example: 2700 University Avenue (now) ]
2. If it’s a parking lot – Build on it. [Example: Latitude 45 ]
3. If it’s a parking ramp – Tear it down and build on it. [Example: 4th and Nicollet ]
4. If it’s an urban-hostile building (e.g. fast food restaurant with surface parking and a  drive-thru) – Tear it down and build on it. [until we get to the last one]. [Example: WaHu Student Housing (contra: Save the Hat)]
5. If it’s a really, truly about to fall down building (formally: 5(a) structurally deficient and not cost-effectively  remediable or 5(b) functionally obsolete and not cost-effectively adaptable – and thus abandoned leading to 5(a)) – Tear it down and build on it. [Bad example: Minnesota Multi-Purpose Stadium (leave aside what you should put there, and who should pay for it)]
6. If it’s an ugly but structurally sound building (i.e. occupied or occupiable) with little or no historic or architectural importance –  Wait until all of the above sites have been completely used up, see if you can do adaptive reuse and improve its attractiveness, then consider tearing it down and building something new on it. [Example: House of Hanson, Dinkytown Hotel/Mesa Pizza, ]
7. If it’s actually a viable (i.e. occupied or occupiable), attractive or historic, functional building – Wait until all of the above sites have been completely used up, see if you can do adaptive reuse, before even considering tearing it down. [Example: Marshall High School,  Wesbrook Hall]

The examples are far from a complete list, and certainly there will be debate about what constitutes 5, 6, or 7, and lots of nuance and qualitative decisions.

Nevertheless, I think we are far too quick on type 6 and especially type 7 sites when there are so many sites still remaining in categories 1-5 in much if not most of the city. An aerial view of Dinkytown, e.g. will show that surface parking lots are disappearing. It will also show they have not already disappeared (the block between 14th and 15th Avenues and 5th and 4th Streets is more than half parking).

This hierarchy is not simply my personal preference (although it is my personal preference). It is a hierarchy that will lead to better urbanism. As I have written before:

A key lesson is that it is often easier to grow an urban neighborhood from an existing lattice of structures than try to plop one down on a brownfield site. … Thus we should try not to destroy viable structures or neighborhoods until we have considered renovating them and we have exhausted vacant parcels. Of course, one might say, that is the obvious lesson from urban renewal some 50 years ago.

But this still happens: The old Marshall HS in Dinkytown, e.g., or the Colonial Building at Emerald and University on the Central Corridor that has been a vacant parcel for about 7 years now. While construction is well-underway on the Marshall HS site, the Emerald and University site (variously 2700 The Avenue or City Limits Apartments) sits fallow. Things might happen between demolition and construction, so that construction which was planned falls through mid-project.

 

Economic rationale for the hierarchy

Consider a simple two-block walking route. One block (X) is a functional, occupied one-story building (with doors and windows) and one block (Y) is a zero-story parking lot. To go from A to B one passes the building (which might be interesting), and a parking lot (which probably is not). Now a developer comes in and wants to build a non-awful six-story wood frame apartment building. Where would you rather have him build this. The answer is block Y because then when you are walking, you will walk past two buildings, instead of one building and a parking lot. This improves walkability, which is a good value to have, since it likely increases walking, personal connections with the city, and even retail sales;  but it also improves accessibility (the number of places which can be reached in a given unit of time), which produces positive economic spillovers in the interim. A six story building plus a one story building is better than a six story building and a parking lot.

In the end, both blocks may have apartment buildings, that is fine. But you want to develop the empty lot first because “in the end” is not “right away”, as the recession of 2008-09 showed, and we are losing urbanism in the interim as projects can get deferred a long time. The sequence of development matters. In the interim, the walk accessibility (local density) will be higher when the empty lots are developed before existing buildings are torn down and replaced.

[For the math-inclined, if we integrate accessibility over time, it will be larger if we defer tearing down #6 and especially #7s until after filling all the vacant or vacuous #1-5 sites.]

 

Improving the sequence of development

Property is private, and developers should  (in order to maintain political stability by ensuring a consistent legal framework (i.e. the US Constitution) that guarantees property rights) be allowed to develop what and where they are legally permitted. But cities intervene in these markets all the time, both through zoning codes (police powers) and subsidies (purse powers).

There are a number of solutions to improve the sequence of development. The land value tax is one, but that has political difficulties in that it creates winners and losers compared to the baseline.

Another idea in this regard is the awarding of Transferable Development Rights on existing #6 and #7 sites that are built less than code allows, which can be transferred to vacant lots to allow those parcels to be developed more intensely. (Thus compensating the sellers for not developing right-away).  These would temporary rights, so if sold, the selling parcel would not be able to be redeveloped more intensively than its current structure (for a period of time (e.g. 10 years)) without either buying rights from other properties, or waiting until the expiration. Of course the buyer would get to build somewhat more intensively than current zoning allows as a permanent structure (so even after the rights expire for the seller, the buyer does not need to unbuild their building).

These kinds of rights are used for agricultural parcels in many places, to preserve agricultural uses in places where it might otherwise be developed into a subdivision as a matter of right. These are also used for air rights developments.

So imagine our scenario above. Instead of redeveloping right-away, the owner of Parcel X sells to the owner of Parcel Y a TDR that defers development on Parcel X for 5 years and gives Parcel Y one extra story. Parcel X gets enough revenue to put off development. Parcel Y may now be slightly more financially feasible with the density bonus. The community gets more walkability in the interim five years.

The only prospective downside is if you don’t like the additional density. TDR donating / receiving areas can be downzoned as part of the package to ensure the end state is no denser than it otherwise would be (so the as-right development would only be 5 stories, with the 6th story coming from the TDR).