Yesterday we looked at how development patterns tend to become less financially productive as they move towards the edge of town. These places cost more to build, service and maintain than traditional development closer to the center of town and they consistently yield less value per square foot.

This same effect happens when a city takes the style of development typically seen on the edge of town and brings it into core neighborhoods. When this happens, financial productivity drops while the city/public's liability for service and maintenance stays constant. This is a sure path to financial difficulty.

For example, Brewed Awakenings sits at the intersection of NE 4th Street and NE 1st Avenue in downtown Grand Rapids. Right next door is a building with law offices and a small retail outlet. These buildings are built in the traditional style -- built up to the sidewalk, fronting the street, human-scaled, etc... -- although there are in an environment that does not play to their strengths. Fast moving traffic, wide crossings and a lack of connectivity to surrounding neighborhoods are a challenge for this type of building form.

Right next door to Brewed Awakenings, just across 1st Avenue, is the Edward Jones building. This building is constructed in a modern style consistent with zoning codes and regulations commonly used today. It is set back from the street, ample parking is provided and there is a modest landscape buffer. The disposition of the site is meant to lure drivers off the highway -- also known as 4th Street -- but then have people enter the building through the more hospitable side door.

This is truly an apples to apples comparison. These buildings are right next to each other; they share the same intersection on the same street. The coffee shop and law office together take up 1.2 acres. The Edward Jones uses 1.8 acres. Yet when we look at the financial productivity, there is a huge difference in outcome.

In an apples-to-apples comparison, the traditional development pattern outperforms our modern approach by a wide margin. Those two old buildings are nearly twice as productive and produce 67% more tax revenue for the city than the new building across the avenue. From the public's standpoint, the Edward Jones site is actually slightly more expensive because it uses more street, sidewalk, curb and pipe, which makes the disparity in outcome all the more striking. Again, this is not an isolated case but a larger trend that has been documented in cities around the country.

Some questions to consider this week:

  • Are the perceived advantages of the development style represented by the Edward Jones building justified by the extra expense and lower financial return?
  • Without spending money we don't have, what policies and approaches could we implement that would help tenants in the Brewed Awakenings building be more successful? Without spending money we don't have, what policies and approaches could we implement that would help tenants in the Edward Jones building be more successful?
  • How many different ways -- most of them hidden -- do we pay for parking? Is subsidizing parking through our policies and regulations the best use of our community's scarce resources? Parking requirements impair financial productivity; do they also increase business startup costs?

All week we're discussing these questions and more here in the comments section below as well as on our discussion board. Please join the conversation.

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