Top Main Image: CB20 in Phoenix (office + retail mixed-use), developed by Wetta Ventures, Image by Kitchen Sink Studios
by Kimber Lanning, Executive Director, Local First Arizona //
Vacant Spaces to Happening Places | The Case for Preservation and Reuse
In the current race to create high quality jobs, retain local talent and attract great companies, several American cities are looking closely at the kinds of places educated workers want to live. Rather than solely focusing on tax incentives or other strategies to entice the desired companies, they are instead focusing on building great places where those companies want to be. According to the American Institute for Economic Research (AIER), an increasing number of workers have been choosing their city before their job and now more than ever, companies are reluctant to relocate to cities that have a dry, homogenized or suburban feel to them, no matter how large the financial incentives are. The workers, and Millennials in particular, are actually driving location by voicing loudly the kinds of places they’d want to consider home. In a recent study, AIER cited 70 percent of young college graduates decide where to relocate based on quality-of-life factors such as robust restaurant scene and good mass transit, rather than economic conditions.
Community Wealth Building, a term created by Ohio’s Democracy Collaborative, is a new approach to economic development that outlines a more comprehensive approach to building quality cities and towns- places where people want to live and where the economies are vibrant. Those communities using Community Wealth Building strategies will be more successful at attracting and retaining the next generation of educated workers, and in many cases the tech companies and their employees are paving the way.
Local First Arizona (LFA) is a statewide organization working to build a more diverse and resilient Arizona economy through supporting and celebrating Arizona owned companies. LFA is a strong advocate for Community Wealth Building and is focused on the relationship between older buildings, which create vital incubator spaces for entrepreneurial spirit essential to any thriving city, and the locally owned businesses that give cities character. Over an 8-year period. LFA worked with the City of Phoenix Planning Department to streamline the process for the adaptive reuse of existing buildings across the city. Because of this extensive work, over 80 new businesses opened in older buildings in the city’s center over a 5-year span, which along with the recently built light rail, have absolutely changed the quality of life for the people who live there.
Sixteen years ago, the first economic study was completed by Civic Economics (The Civic Economics of Retail, 2002) in Austin, TX, which focused on the multiplier effect, which in turn led to several reports showing that local business ownership is critically important to job creation. If America had 30,000 chain coffee shops, the company would still only support one accounting firm, one graphic designer, one website developer, one law firm. Conversely, 30,000 independently owned coffee shops support 30,000 accountants who have a client, 30,000 website developers 30,000 graphic designers, and so on. The chain store model actually eliminates 3 jobs for every 2 it creates, according to the Institute for Local Self-Reliance (ILSR), an advocacy group that provides technical assistance to communities about local solutions for sustainable community development. So before the economist claims the hospitality industry is supporting only low wage jobs, let’s remember it’s the ecosystem of primary, secondary and tertiary jobs we need to count.
The ‘Buy Local’ movement has been gaining momentum around the country for nearly 15 years and many people mistakenly think it’s just about cute boutiques and farmer’s markets. In reality, independently owned businesses are bringing cities back faster from economic crises while simultaneously creating the kinds of places where people desire to live, according to Good Jobs First, a national policy resource center for grassroots groups and public officials, promoting corporate and government accountability in economic development.
Too many economic developers are chasing chain store development even though trends studied and reported by ISLR in the past 5 years show independent businesses are bouncing back mightily. Independent coffee shops are opening a 1.5 times the rate of Starbucks, 140 new bookstores have opened in the past 3 years and even record stores are experiencing the best sales they’ve had in 20 years.
Combined, the built environment and local business ownership can create the kind of quality of life people strive to find in any city. The planning and development sector should embrace creative infill development and adaptive reuse, rather than larger, new developments that lack the character so desired by entrepreneurs and the people who want to live near them. The greater Economic Development community needs to frame the conversation around the connection between planning and job creation, along with quality of life and workforce retention.. In its recent study “Investing in Place for Economic Growth and Competitiveness”, the American Planning Association (APA) demonstrates that the next generation of workers does not want to live in a suburban monoculture- they want creative environments with unique buildings and walkable urban streets.
Rethinking traditional urban planning must begin with the economic argument that older buildings are better for many reasons. First, they encourage walkability and interesting street connectivity which makes a place feel alive and vibrant. Second, because they are smaller and older they tend to house more independently owned businesses which have been proven to keep more money and jobs re-circulating in the local economy. Finally, these older buildings allow for the kind of diversity and unique personality that better connects residents to their place. ‘Connection to place’ was shown in a recent study by the Knight Foundation , “Soul of the Community”, to be the single-most leading indicator in places that have prosperity. They found that when people love their place, they are more likely to vote, to volunteer, to give charitably, and even to pay their taxes, thus improving local prosperity for all who live in that place.
Preservation Green Lab, a research arm of the National Trust for Historic Preservation, demonstrated in their study Older, Smaller, Better, the measureable benefits of keeping older buildings factoring in such concepts as real estate performance, employment rates for people of color, local prosperity, and jobs created per block versus newer, larger developments. In Seattle’s commercial areas, Preservation Green Lab proved blocks with older, smaller buildings provided 36.8% more jobs per square foot than those blocks with newer, larger buildings.
Despite what the APA reports, most city planning departments don’t consider themselves to be part of an economic development ecosystem, when in fact they play a major role in business attraction, workforce development and even blight. Indeed, the policies that make up their playbook could be quietly eroding opportunities to thrive in communities across the country.
In Phoenix, Arizona, the adaptive reuse process was once so cumbersome that an estimated 40% of the downtown was empty old buildings that had fallen into disrepair. Combined with massive new office, institution, and arena development, along with corresponding parking structures, many people assumed the reason for the surrounding blight was absentee owners, lack of interested new businesses, or the recession. No one suspected that outdated building code was to blame, and yet entrepreneur after entrepreneur were quietly turned away when they inquired about setting up shop on one of these smaller structures. We’ve been able to turn the tide in Phoenix, and are proud to say many in our planning department are eagerly working to preserve older building stock and work with entrepreneurs to find ways to expedite the process to get businesses open and cash registers ringing. Let’s continue to encourage this positive trend across the country.
Planners, economic developers, local entrepreneurs, along with the community bankers who fund them, must align themselves around a shared vision, working together to build resilient, vibrant, inclusive, and sustainable economies that provide higher quality of life, increased equity, and prosperity for all residents.
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