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).

Green line train on Washington Avenue

Green line train on Washington Avenue

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]
Nicollet and Fourth, Parking Ramp coming down for Xcel Energy HQ (photo: UrbanMSP)

Nicollet and Fourth, Parking Ramp coming down for Xcel Energy HQ (photo: UrbanMSP)

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:

The Marshall - Site old Marshall HS and UTEC

The Marshall – Site of old Marshall HS and UTEC

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

Site of the former Wesbrook Hall which was leveled so Northrup Hall could have an outdoor gala space (er, Breathing Room)

Site of the former Wesbrook Hall which was leveled so Northrup Hall could have an outdoor gala space (er, Breathing Room)

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).

 

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21 Responses to Seven Types of Urban Redevelopment Sites

  1. Bill Lindeke
    Bill Lindeke May 5, 2014 at 7:16 am #

    Good philosophy. I was reading Jane Jacobs a while back and was struck by how she valued old buildings not for their inherent historical, aesthetic, or cultural qualities, but because they provided cheap opportunity to small and new businesses, affordable housing, etc.

    http://quotes.dictionary.com/cities_need_old_buildings_so_badly_it_is

  2. Adam Miller
    Adam May 5, 2014 at 10:38 am #

    I agree in principle, but as you imply, real estate markets are chaotic and illiquid. A deal today to build on a 6 or 7 property does not necessarily imply that a deal could be as easily reached 1-3 property. Should our preference for 1-3 be so strong that we say no to the deal on the table? And what role does the preference of the property owner play in deciding that question? Obviously, your policy suggests are meant to help on those questions.

    And, of course, the harder example is where the proposal is to replace both the surface parking lot on parcel Y and the one story building (perhaps a by-the-slice pizza place) with something newer and denser? Without your policy tools in place, do we say yes because half is 1 or no because half (or way less than half) is 7?

    Then of course, there’s the question of why we don’t seem to see compromises in these situations. I can think of a number of projects in DC (2000 Penn, Mexican Embassy, Spy Museum, etc) in which the facades of the historic row houses were preserved while a larger structure was put up around them. Granted, the height restriction and other market forces make downtown DC property a lot more value, so maybe that type of compromise is more cost effective in DC, but it sure seems like a potentially attractive compromise, yet I can’t think of any Twin Cities examples of it.

  3. Obvious Oscar May 5, 2014 at 1:16 pm #

    #4 is the one I find most problematic and needing of further discussion. OK, so no one likes fast-food restaurants, but what about so-called “urban hostile” buildings that are full of thriving, diverse, independent businesses? That was, to some degree, Dinkytown, and it most definitely is Lyndale-Franklin. Why are you OK with tearing down these sites and displacing (or worse) their businesses when Minneapolis remains chock-full of empty parcels and whatnot?

    • Peter May 5, 2014 at 2:52 pm #

      New development has a broad impact, but the transactions that create developable parcels are quite limited in scope. They’re usually an individual transaction between a land owner and a developer. Real estate markets are, as Adam says, chaotic and illiquid. A developer assembles a site to build on based on what can be bought from individual sellers. He can’t pick and empty lot out of a hat and decide to build there because the lot exists.

      At a macro level, yes, I would like to see empty lots developed over non-empty lots, but developers build on the lots they can assemble, not on the lots activists want them to assemble.

      There’s also the issue of where these empty lots are in relation to demand. And then the issue as Adam points out of a site with mixed lots. I’m not on board with the idea that every single empty lot should be filled before we tear down a single building. As much as I wish it were different, right now the economics favor large block projects, which require large site assemblies. What’s better, a lot that’s 75% parking lot and 25% single story commercial, or a lot that’s 100% 4-6 story residential with commercial on the ground floor? In demanding that every empty lot be filled before anything be torn down, are we letting the great become the enemy of the good?

      And finally, I don’t think anybody would make a claim that the buildings at Lyndale and Franklin qualify as #4. I’d say they’re #6 at best, but I’ve heard some reports that they’re more like #5, which is to say the maintenance on them is too expensive to allow them to be economically viable. They’re economically obsolete. A building like that should probably be higher up on the list. A parking lot can at least generate a little bit of revenue to become revenue positive, a building that costs more to maintain than can be charged in rent is revenue negative, and should be replaced as soon as possible, before it becomes blight.

    • Adam Miller
      Adam May 5, 2014 at 2:54 pm #

      The 4s are the hard cases, although I don’t think that I’d put the Dinkytown hotel proposal or Lyndale-Franklin in that category (and I suspect David wouldn’t either).

      To me, both are part 2 (the surface parking lot parts, obviously) and part 6 or 7 (probably 6 for Dinkytown and 7 for Frank-Lyn).

      As to Dinkytown, I’d be willing to give up the small #6 building because (1) it gets rids of the surface parking lot, (2) it’s in a high demand area, and (3) I’m not worried about that business being to relocate (especially as it just opened a new location in Stadium Village). Perhaps if I had a magic wand to waive I’d preserve the facade and work it into the design of the new building, but as there’s nothing particularly remarkable about it, I don’t see that as an imperative.

      As to Frank-Lyn, there’s the theater and a church-run thrift store. The proposal involves a new home for the theater and the thrift store doesn’t seem concerned about finding a new home. Why do you see the site as occupied by thriving businesses that will be displaced or worse? It looks like substantially surface parking lot to me.

      • Adam Miller
        Adam May 5, 2014 at 2:58 pm #

        Oops. I confused my numbers. 7 for Dinkytown (that building at least appears to still be perfectly functional) and 5-6 for Frank-Lyn.

    • Matt Steele May 5, 2014 at 3:06 pm #

      If they are full of thriving and diverse businesses, the landowner (which is often one of the business owners) probably wouldn’t be interested in selling to a developer. But if businesses in that category fail, are run down, and an owner wants to get out – I think that’s the point of #4.

    • Bill Lindeke
      Bill Lindeke May 5, 2014 at 3:22 pm #

      The only #4 in dinkytown is that mcdonalds witha drive thru, and unfortunately nobody is tearing that down.

  4. David Levinson
    David Levinson May 5, 2014 at 2:51 pm #

    Obvious Oscar, I think the buildings you describe are under my #6 (ugly but structurally sound). I would prefer not tearing them down before the other options (1-5) are locally exhausted.

    Adam, in the end, people can do what is legally allowed, and not what isn’t – so if they don’t want a variance or other rezoning, they can tear down existing structures. However, if there were some market value to keeping it going a few years as is through a TDR, that might change the market calculation.

    Aesthetically, I am not much for preserved facades on larger buildings. While sometimes it is interesting, usually it looks wrong (as Matt says – Penfield). Perhaps better (though not ideal) is keeping the buildings and putting up something larger in the back. which is accessed through the existing front. But I believe the urban function is more important than the architectural form.

  5. San Francisco May 5, 2014 at 3:37 pm #

    You forgot a big one which should be in the top three: Gas stations.

    • Eric Saathoff
      Eric S May 14, 2014 at 8:36 am #

      Yes, and other types of car service. I’m thinking Snelling Ave north of University.

  6. Scott Shaffer
    Scott Shaffer May 5, 2014 at 5:14 pm #

    David, I agree with your hierarchy as an ideal. We should push for policy reform that will improve the sequence of development.

    I’m thinking of arguments I read against development at 24th and Colfax from Nicole Curtis and Cadillac Kolstad. They said that there were vacant lots in Minneapolis, so they shouldn’t tear down structurally-sound houses to build new housing. So an important question is, what is local? Anything within a five-minute walk? Within a mile? Within Minneapolis city limits? In the Twin Cities proper? Inside the 494-694 beltway?

    Are there vacant lots near 24th and Colfax? I looked on the city’s website, and of the 221 vacant lots listed for sale, 197 are in North Minneapolis, nineteen are in Phillips, three are in Powderhorn, and one is in Standish. Vacant lots are concentrated in a few neighborhoods, and I don’t see any near 24th and Colfax.

    I do see a bunch of parking lots. Temple Israel and the Scottish Rite Temple each devote biblical proportions of land to car storage. On the 2400 block of Dupont, it looks like there’s 12,000 square feet of land devoted to eighteen (18) parking spots, which is a big ol’ waste. I casually boycott the Kowalski’s on Hennepin because they chose not to cater to pedestrians. You could fit a couple big buildings on their parking lot. But even if that were lawful to build in Minneapolis (it can’t be, right?), I doubt the organizations would want to give up the parking, because it’s taxed so low (if at all). Factor in the parking tax deduction for employers, and you can forget about getting businesses to sell parking ramps for a reasonable cost.

    This is all to say that, in most neighborhoods of Minneapolis, people who want to build have to consider demolishing 4s and higher.

    On a different note, what’s the deal with the vacant lot across Lyndale from the CC Club?

    • Matt Brillhart May 5, 2014 at 6:21 pm #

      Lyndale & 26th: http://spytwincities.com/end-of-rex-hardware-minneapolis-2269/

      Interesting (and long-winded) story surrounding the demolition aside, it sounds like it was purchased by an inexperienced developer and torn down before the proposed development was ready for primetime.

      That said, I am increasingly shocked/dismayed that nothing has been proposed or rumored for that site, given the ongoing demand for rentals in the area. I’m guessing the property is still in the hands of that same person and they aren’t ready to build or willing to sell to someone who is (which relates to why things like 2320 Colfax are torn down while vacant lots remain).

      Sidebar: the 3.5-story building to the east (fronting Garfield Ave) is actually owner-occupied condos, somewhat of a rarity in Whittier.

      • Matt Brillhart May 5, 2014 at 6:24 pm #

        I guess Bill wrote about Rex Hardware too: http://tcsidewalks.blogspot.com/2006/01/mpls-rex-hardware-closes-lyndale.html

        Which reminded me that the property is indeed owned by the owner of French Meadow (and now CC Club as well).

        • Bill Lindeke
          Bill Lindeke May 6, 2014 at 6:39 am #

          Back in the day! You were still in Jr High.

        • Janne Flisrand
          Janne Flisrand May 6, 2014 at 9:43 am #

          The owner of French Meadow wanted the Rex site — and the house next door — for parking. If memory serves me right, the Rex building was torn down when she thought she could get away with it as a lot, possibly interim until the development was built to accommodate the same parking. Happily, the neighborhoods on both sides (LHENA/Wedge and more prominently Whittier) nixed that plan, but not before the Rex building was gone.

          • Shane M May 6, 2014 at 5:47 pm #

            Yup. It was just about a year ago they came to the neighborhoods. If memory serves me correctly the development the owners showed as their ultimate goal for the site was a 4-story apartment building, not mixed-use. The parking lot was “temporary”.. I remember the Whittier CA meeting voted in favor of letting them build the parking but the board was unanimous against. The only time I’m aware I’ve sided with the board. Haven’t heard anything since.

            Thanks for posting these blog posts, Matt.. I’ve always wanted to know more about this site and the hardware store that was there. I’d argue it was an even trade for the neighborhood, though.. the hardware store was torn down and days later I moved to Minneapolis just a few blocks away.

  7. David Levinson
    David Levinson May 5, 2014 at 6:41 pm #

    Scott, what is local is an important question, and a non-trivial implementation detail. We could start with adjacent blocks and find more preferred to develop parcels in Dinkytown. We could look at a two-block radius, or three-block radius moving outward in concentric circles from the block in question. A five block radius (11 block diameter: 5 east, 5 west, plus the block in question) is 121 blocks or about a square mile, which seems the farthest we would want to go if we are assuming local walkability as the only rationale. A vacant lot in Dinkytown doesn’t substitute for one in The Wedge very well, though perhaps for one in Stadium Village or Como.

    Still, it is important that any new policy be thought of as evolving, not as a permanent fixture. It may turn out that a 10 block radius is better, or that the “neighborhood” as the City defines it might be administratively easier, or that adjacent neighborhoods are ok as receiving areas. These are pragmatic questions for which there is not a moral basis to right action.

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  1. Sunday Summary | streets.mn - May 11, 2014

    […] Seven Types of Urban Redevelopment Sites not only identifies types, but proposes a hierarchy in which they should develop (and some possible tools to guide this process). Policy-makers should be reading the discussion generated in the comments about redevelopment policy, time-frame and the necessity of dealing with the project on the table right now. […]

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