Seven Ways Anchor Institutions Can Support Commercial Revitalization, Courtesy of ICIC

Wesleyan University was a major investor at the Inn at Middletown,
which involved the rehab of an old armory building right on Main St.

Local communities often struggle to find resources to advance their commercial revitalization efforts. Engaging property and business owners is obviously a first step, but it can sometimes be easy to overlook other stakeholders in a community. Universities are often seen as partners in this effort, as we have written about on this blog a number of times before [click here for previous posts], but increasingly, health care and cultural institutions are also playing a role in community building. Yet by and large they remain an untapped resource for revitalization.

Anchors are a good example of “sticky capital”, their looming physical presence and investment in built facilities means they are literally anchored in the community. They may be so focused on their primary mission, that they may not even realize the benefits that accrue to them from improvements to the surrounding neighborhood. In some communities, rather than engage in community efforts, they have done just the opposite. They have instead built fences around their properties, concentrated retail and services on-site, effectively isolating themselves. In communities with high crime rates and public safety challenges, this can be seen as the easy way out. I recall a tour of the Ivy City neighborhood in northeast D.C when I worked for LISC. Ivy City is a community with its fair share of public safety challenges. Looming large over the neighborhood was Galludet Univesity, with its tall fences and closed campus. The distinct 'them vs. us' attitude was mentioned again and again by community residents who were frustrated by the lack of meaningful engagement from the university.

Last week, I had the opportunity to hear Mary Leonard, President and CEO of the Initiative for a Competitive Inner City, speak at the City of New York’s Annual Business Improvement District (BID) Conference. ICIC, founded in 1994 by Harvard Business School Professor Michael Porter, has been analyzing the impact of anchor institutions on urban economic development. They have come up with a framework for the role of anchors in community revitalization. While the most obvious contribution that an anchor can make is money, Mary Kay laid out a framework for the role of anchors that goes much further and suggests seven ways in which anchors can participate in community building. With full credit to ICIC, and peppered with my own examples culled from my own experience, I offer this framework to readers interested in a comprehensive set of options for the ways in which local anchor institutions can have a more significant impact on their commercial revitalization efforts. [For a more detailed look at the ICIC framework click here]

1. Core Products or Services – This refers to the contribution that an anchor makes based on their area of expertise. If the anchor is a university, students might be tapped to do research or service. If the anchor is a health organization, they might provide free health screening to area residents. If the anchor is a cultural institution, they can contribute enhanced programming that draws visitors to the district. Vassar College, for instance, runs a field work program that provides students with academic credit and a stipend to intern with local community organizations and government agencies. 
2. Real Estate Developer – Anchor institutions can use their real estate investments to either turn their back on the local community or to build linkages to the district. Pratt University, in Brooklyn, NY recently unveiled a 120,000-square-foot, $54 million six-story building that houses administrative offices, galleries and classrooms right on Myrtle Avenue – a district that has benefitted significantly from Pratt’s active engagement. [For more on the Myrtle Avenue story, click here]. Another good example is Wesleyan University in Middletown, CT. Wesleyan was a lead participant and investor in the building of the Inn at Middletown. The hotel, located in a restored armory on Main Street, was once a blight on the district. Today the building and its guests are a stabilizing force that helps drive retail sales in the district.
3. Purchaser – The purchasing power of anchors can be directed to local businesses and suppliers. Communities can work closely with the anchor to identify local businesses, set up local purchasing goals, and offer incentives to help them to meet these goals.
4. Employer – I was shocked when Mary Kay mentioned that 2/3 of hospital and 1/3 of university employees only need associate degrees. There are clearly untapped opportunities, particular in lower income communities, to establish connections to residents through screening, training and referral. These jobs help stabilize a neighborhood by building wealth among local residents, building buying power for local businesses in the process.
5. Workforce Developer – Anchors can work closely with other community stakeholders, particularly universities, in identifying gaps and training local residents for jobs in the future.
6. Cluster Anchor – Anchors can collaborate with other organizations to incubate new businesses that simultaneously provide needed services and also fill local retail space. Hospitals are an excellent example of this trend. You often see complimentary retail and services in the vicinity of a hospital – and a hospital can help build demand for these services by encouraging patients and staff to patronize these local businesses.
7. Community Infrastructure Builder – There are many ways in which an anchor can help build local infrastructure. For example, ICIC notes that Yale University provides a subsidy for faculty and staff to buy homes in New Haven. While a student at Wesleyan University, In Middletown, Connecticut, I worked closely with the City planning office to apply for a competitive Connecticut Main Street program grant for technical assistance from the National Main Street Center. Our successful application counted on the support of seven organizations that contributed $10,000/year for three years to fund a Main Street program, one of which was the University. This effort eventually led to the formation of a Business Improvement District.

I could hang dozens of wonderful examples onto this framework, and I'm sure our readers could too. It is an excellent starting point that pushes us to think more creatively about how to engage anchor institutions beyond asking for a blank check. These options inevitably result in deeper, more lasting relationships that simultaneously benefit the district and the anchor over time.

It’s lunch time! Why office workers avoid sit-down restaurants, and what you can do about it

Office workers need convenience and proximity. They will not walk more than a few minutes to grab lunch, and even then, every minute counts. Here are some findings from a 2004 study completed by the International Council of Shopping Centers that support these conclusions:

• Office workers eat out, a lot. Approximately eight in ten office workers purchased their lunch outside their office at least once a week.
• Office workers choose carry out with significant frequency. 47% of office workers visit carry-out lunch destinations, like delis, grocery stores, and sandwich shops.
• Office workers need a quick turnaround. The 'lunch hour' is a thing of the past. Office workers now spend an average of 41 minutes away from the office for lunch. In fact, 40% take only 30 minutes or less for lunch. So if your local lunch destinations do not allow for a quick turnaround, office workers will take their business elsewhere.
• Office workers prefer to walk to lunch. Nine in ten office workers usually walk to lunch when the local options exist. If they do not, office workers will bring their lunch from home or hop in the car if that is an option.

What this means is that proximity, convenience and a quick turnaround time are key if a business expects to office workers to patronize them during lunch. So ask yourself, do your sit-down restaurants have a express lunch specials? Is their service speedy and responsive to patrons who have limited time to eat? Do they have a dedicated and short lunch menu that makes decision making simple and fast? These minor offerings can make or break their ability to meet the needs of the lunchtime crowd.

At the end of the day, proximity to office workers can end up being a life or death situation for local lunch destinations. A distance of 100 ft can be just a smidge too far, or a location across a busy street that takes too long to cross. These minor barriers can make a major difference between success and failure with the lunch crowd.

Debate: Two Communities, Two Opposing Positions on Downtown Infrastructure Investment

CON: “I am not going to spend down our reserves especially in a time when we don’t know what the economy is going to bring.”

[Los Alamitos Puts the Brakes on Downtown Revitalization, Los Alamitos-SealBeach Patch, 7/19]
 
When funding gets cut for planning and outreach, downtown infrastructure projects can come to a grinding halt, as is the case in Los Alamitos, CA, where a concept design for a $2.5 million dollar downtown streetscape improvement project was recently put on hold.

We often say that planning is an excellent thing to do in a down economy, so that when the economy gets better and resources become available, projects are ready to go. But sometimes realpolitik intervenes and despite an organization's best efforts, finding the resources, even just for planning, can be a challenge.

PRO: “The city is getting significant value for our investment in terms of parking, public spaces, the future expansion for the museum”

[Proposal: Palm Springs to pay $43M in Desert Fashion Plaza mall project, Mydesert.com, 7/19]

In contrast to Los Alamitos, Palm Springs, CA is contemplating committing $11 million dollars for new street construction and parking facilities improvements (an additional $32 million will be held in escrow for other project related costs) as part of a revamping of a single-owner shopping center called Desert Fashion Plaza. Voters will be asked to approve a 1% sales tax increase. The City argues that the investment would result in $600,000 in additional property taxes annually.

MY TAKE:
I'm not quite sure that investment in a single-owner downtown shopping center is necessarily the best alternative, but I do find it interesting that these two communities lie on opposite ends of the investment spectrum, each conducting a very different calculus resulting in two different outcomes.

In most cases I do believe that failure to invest is shortsighted. But the cost-benefit analysis of any particularly investment must be measured accurately so that scarce resources can be allocated appropriately and with full disclosure. That said, without investment in downtown infrastructure and improvements to the public realm, a community can end up digging its downtown into a deeper and deeper hole of disinvestment that is difficult to crawl out of, even when the economy gets better. As the competition for scarce consumer dollars gets stiffer, competitive districts and more controlled shopping environments (like the mall), benefit as consumers choose places that  look and feel better. These alternative shopping venues are cleaner, safer, and managed in a way that better meets customers needs. The dangers of long-term disinvestment are very real, and ultimately affect the tax base, not to mention puts small businesses at risk over the long-run.

So here are my questions for our readers...is downtown investment the right thing to do in a down economy? And if so, under what conditions? And how do you sell this investment in a challenging political environment?

Giving a new meaning to "Paint the Town Red"

Murals are a wonderful way to bring life to downtown. In Philadelphia, the Mural Arts Program is also credited with increasing sales within the business districts where they are located. How's that for impact! In Great Falls, Montana, the Business Improvement District is paying for supplies for 10 artists to create murals on the dilapidated building and enhance the appearance of downtown. This is a relatively easy idea that harnesses the skills and talent of local artists.

Here are two recent articles on the BIDs efforts:

Temporary murals light up 'blights' in downtown Great Falls [Great Fall Tribune, 7/11/11]
Artists Legally Paint Downtown Eyesore to Create a Masterpiece [www.kfbb.com, 7/11/11]

Definitive evidence on what works to revitalize urban commercial corridors

I am excited to see this research getting more attention. I recently wrote a white paper for the Institute for Comprehensive Community Development, which was recently posted on their website. Here is a preview.

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If they work well, neighborhood commercial corridors make an important contribution to community quality-of-life, particularly in pedestrian and transit-dependent lower-income neighborhoods. Yet in many lower-income neighborhoods, these corridors don’t work well at all, which is why community developers have for years designed and carried out programs to revitalize these areas.
In 2006, Philadelphia LISC, in partnership with the William Penn Foundation and the City of Philadelphia, engaged Econsult Corporation, an economic consulting and research firm, to assess the performance Philadelphia’s commercial corridors, and identify those factors shown to improve them. Using extensive collection of very high-quality data and use of powerful econometric statistics, Econsult researchers have produced the most convincing evidence yet that the right kind of investments, including those typical of community-based revitalization efforts, can indeed improve corridor performance.

The bottom line: practitioners should focus on improving district fundamentals – store density and retail mix – through investments to identify and support district leadership, create business improvement and other corridor management districts, improve area attractiveness, and increase security. No surprises here to community development veterans, but the Econsult researchers have now backed anecdote with solid numbers.

For the entire white paper and the original post by the Institute for Comprehensive Community Development, click here: http://www.instituteccd.org/case-studies/2519.