Should government promote Urban Development

Many will say that land use and zoning laws, along with government funding of roads and infrastructure is a mjor contributing factor to suburban sprawl.  Some of this is true, but not to the extent many will lead you to believe.  In fact many times developers will pay for water, sewer, and road improvements out of thier pockets and then give these improvements to the municipality.  This expands their system or road network without cost to the taxpayer. 

The argument that governments are spending money that leads to sprawl would lead you to believe that no money is being spent in Urban areas.  This is just not true.  A great deal of money is being spent and has been spent in efforts to revitalize urban areas.  Rachel Tobin writes a good article in the AJC today detailing some of downtown Atlanta’s past and future efforts (not posted on AJC websitebut listed below thanks to author Rachel Tobin).  Some of the monetary figures she cites in this article are very large and we all know that a very large amount of money was spent on downtown in 1996 when the Olympics came. 

Many in the urban revitalization movement will tell you that you need to get people living in the downtown areas again so it does not become a ghost town after all the business people go home.  Once you have people living there, you will get retail, entertainment, etc.  Well if people living in the area is at the core of revitalizing an urban area – How has that worked out for Atlanta.  Since 1990 the metro Atlanta area has added 2,872,278 people.  Since 1990 downtown Atlanta has added 21,400. 

So with all of the money, time, and effort put into revitalizing downtown, less than 1% of the new residents in metro Atlanta chose to move downtown. 

Another telling quote in this article is from Georgia State University’s president – “Everybody who’s got a piece of land that’s for sale has pitched us.”  If there were plenty of ohter prospects wanting land downtown, they wouldn’t all be pitching their sites to GSU so hard. 

This is not to say that downtown and urban areas shouldn’t be revitalized.  I have serious reservations about continuing to sink this much taxpayer money into areas that are not proving to be financially successful.

 Article Below

The Atlanta Journal-Constitution

Page D1

Sunday, March 13, 2011

Metro Atlanta’s land rush: What’s next?

  Filling downtown’s gaps

  Projects aim to usher in new era of success. Transformation could begin with transit, dorms, tourist draws.

  By Rachel Tobin  rtobin@ajc.com

     Downtown Atlanta is one of the metro area’s most diverse — and possibly most worrisome — commercial centers.

   Since the 1996 Summer Olympics were announced 20 years ago, downtown experienced dramatic changes. Billions of dollars of tourist and convention facilities were built, including the Georgia Aquarium and Centennial Olympic Park. The Georgia World Congress Center continued to grow, as did the countless hotels that were built or renovated.

   And downtown’s historic and modern office buildings hold their own with a 13.7 percent vacancy rate below the 17.3 percent average for the metro area last year, CoStar Group reported.

   Downtown has become a mecca for students and workers at government agencies and nonprofits.  

   However, the area roughly from Centennial Olympic Park to the state Capitol, and Turner Field to the Fox Theatre, still faces considerable hand-wringing.

   Despite the daytime population of 140,000 workers, by the count of Central Atlanta Progress, downtown lacks thriving retail, entertainment and residential districts. It struggles with the poor image left by panhandlers and others, and continues   to fight the flight of silk-stockinged professional services to other business centers inside and outside I-285.

   Without another Olympics on the horizon, what could bring success to downtown in the next 20 years?

   The Atlanta Journal-Constitution chose five projects that could transform downtown. Other projects could have been highlighted, such as the potential for a new football stadium or the Center for Civil and Human     Rights; these five aren’t necessarily “the most important,” but were picked because they have the potential to change the fabric of downtown, from redrawing its skyline to filling a hole in the landscape.

   Central Atlanta Progress President A.J. Robinson said it best: “This is not your grandfather’s downtown. For people with perceptions from years ago, we’re on a different trajectory.”

The ‘Gulch’ Transit Hub

   Two grand central stations and a network of trolley cars once crisscrossed downtown. Since the 1950s, however, development has been more car-centric. Amtrak’s only remaining in-town station is in the Buckhead area, and a Greyhound terminal is blocks from the Five Points MARTA hub.  

   The Georgia Department of Transportation wants to change that, and has $60 million in seed money for planning a transportation “mini-city.” The idea could be downtown’s biggest project in play.

   “The Gulch,” an unattractive tangle of train tracks and parking lots near CNN and Philips Arena, would be the recipient. On one level, people will live, shop, work and play. On another, they will catch buses, streetcars, commuter trains and inter-city rail.

   Three development teams are vying for the project. A finalist will be announced Monday, and the DOT board will vote on the selection in May.  

   Scott Condra with Jacoby Development wants the job. “The way the city has grown, there is a hole at the Gulch,” he said. “But around the edges are some very big players.” He ticked off Philips Arena, CNN Center, Centennial Park on one side, and federal courts and agencies on the other.

   The federal government is considered one of the biggest potential tenants for the project. Shyam Reddy, U.S. General Services Administration’s regional administrator, said it is a credible idea, but only if the hub is a true mini-city and an ecosystem is built.  

   The $60 million renovation of the historic Martin Luther King Jr. Federal Building at 77 Forsyth St. is a good example of new federal practices: recycled materials, outside seating, planters and sustainable energy. That’s something the master developer must consider to lure federal offices, Reddy said.

   Architect and engineer Mickey Steinberg said the hub idea is brilliant. He helped John Port-man on the first “mart” building downtown — now AmericasMart — in the 1960s, and is a senior advisor to Portman, who isn’t bidding for the project. “It just may be the thing that can spur commercial office buildings,” he said, noting it worked around Lindbergh MARTA station. Other cities, especially Denver, also have experienced commercial renaissances near train hubs.  

 Georgia State University

   The urban campus for Georgia State University will continue to grow its footprint downtown, school president Mark Becker said.

   “More than pride, it’s really a distinguishing characteristic for the university,” he said. “Being in a city provides unique opportunities for our students.”

   Georgia State University has steadily increased its investment: Soon the school will have 4,000 beds for students; nine years ago, there were none.

   Enrollment has grown by 5,000 students to 31,000 in the last four years alone, attracting the attention of nearby land-holders. “Everybody who’s got a piece of land that’s for sale has pitched us,” Becker said. “But our resources are limited.”

   Still, the school has made recent moves, buying two hotels for student dorms. New business and law schools some day   will rise near Woodruff Park.

   GSU doesn’t have to be the only developer there, said Becker, who wishes others would get involved. “There’s not a decent pizza parlor within two blocks of the residence halls,” nor a 24-hour pharmacy, the president said.  

   Someone will “figure out how to piece together the market between students, tourists, office workers and residents into a viable retail model,” CAP’s Robinson said.

 Atlanta Streetcar Project

   Downtown has both pedestrian-oriented streets and one-way streets fenced in by office   buildings and tangles of freeway overpasses.

   The streetcar project seeks to change that. Atlanta won a federal grant for $47 million and committed $31 million to build a route from the historic Martin Luther King Jr. district to Centennial Olympic Park. Construction begins in the fall, and paying customers could expect rides as soon as 2013, said Duriya Farooqui, Atlanta’s deputy chief operating officer.

   The streetcar will reconnect two areas severed by construction of the interstate in 1960s, Farooqui said. It is hoped the project will spur economic development, similar to Portland, Charlotte, N.C., and Houston.  

   Portman’s Steinberg said the east-west line isn’t the one to start with, because a comparable bus route didn’t find much success.

   “This is a not a theme park ride,” he said. “The ride should fulfill the demand. It is not going to create the demand.” Steinberg would rather see a streetcar go from downtown to Midtown along Peachtree Street, where demand exists.  

   CAP’s Robinson has heard complaints about downtown’s livability, an issue he said the streetcar will resolve.

   Underground casino

   The managers of Underground Atlanta have a landmark that struggles to keep retailer and local interest. In an effort to change this, the holders of its 50-year lease, Dan O’Leary and partner John Aderhold, proposed   a $450 million casino that comes with 5,000 video lottery terminals and a 29-story hotel.

   They spent much of 2009 talking up the plan’s benefits, specifically $600 million in gross receipts — half going to the Georgia Lottery. Then-Gov. Sonny Perdue essentially said no way.

   O’Leary recently said if the lottery was interested in doing the project, it would still be on the table. Full-fledged casinos are not legal in Georgia, but O’Leary said video lottery games fit the lottery’s charter.

   CAP’s Robinson considers Underground Atlanta a beloved part of the city — as evidenced by the New Year’s Eve crowds — but said it could be better as a larger retail center.

   Whatever happens at Underground will require a major investment, Robinson said, adding that alone would be a good thing.  

  The Atlanta “Eye”

   If one thing could change Atlanta postcards forever, it could be an “Eye.”

   At more than 400 feet tall, the $200 million observation wheel, if built, would transform downtown’s skyline. Developers of the London Eye have pitched a replica for Atlanta, an idea supported by Bernie Marcus, who built the Georgia Aquarium.

   Local “Eye” spokesman, Eric Tanenblatt with McKenna Long & Aldridge, said they are still looking for a site.

   “Where they built the London Eye along the Thames River, it was undeveloped, and actually sort of rundown,” said Tanenblatt of an area that has had a rebirth of sorts, with an aquarium and art galleries.  

   Steinberg, of Portman Holdings, isn’t convinced Atlanta is ready for that.

   “People go to London because it’s London with Buckingham Palace and its various famous streets,” Steinberg said. “I think that if there’s not other stuff done in conjunction with it [in Atlanta], it would be kind of lame.”

   While it may seem eclectic, CAP’s Robinson said that’s the appeal of Atlanta’s new downtown with the aquarium, World of Coca-Cola, Center for Civil and Human Rights, among others.

   “It’s almost like there’s something for everybody,” he said.  

CAPTIONS FROM THE PHOTOS:

  The Atlanta Streetcar Project

   The Atlanta streetcar will run westbound down Auburn Avenue from Jackson Street. Atlanta won a $47 million federal grant for the project, which may be ready for riders in 2013. The proposal is similar to the Portland Streetcar system (right). Bita Honarvar  bhonarvar@ajc.com  , Peter Ehrlich

  The Atlanta “Eye” Ferris wheel

   Developers of the London Eye (right) in England have pitched a similar idea for Atlanta, but some aren’t sure such an attraction would fit in with Atlanta’s already established tourist destinations such as Centennial Olympic Park (left). Vino Wong  vwong@ajc.com  , Lefteris Pitarakis Associated Press

  Underground Atlanta casino

   Underground Atlanta’s leaseholders proposed a $450 million casino of 5,000 video lottery terminals with a 29-story hotel. It was not well-received by Sonny Perdue when he was governor. Central Atlanta Progress President A.J. Robinson said it may work better as a large retail center. Louie Favorite Staff 2009

  Georgia State University

   Enrollment Services Specialists assist students at GSU’s One Stop Shop with help related to registration, financial aid and other areas. In the past four years, Georgia State’s enrollment has increased by 5,000 to 31,000, and the school has bought two downtown hotels to turn into dormitories. Bob Andres  bandres@ajc.com

  The Georgia Department of Transportation has $60 million in seed money for creating a transportation “mini-city” at the “Gulch” near the Five Points MARTA hub. Jason Getz  jgetz@ajc.com

************************************
Rachel Tobin

Commercial real estate reporter

The Atlanta Journal-Constitution

phone: (404) 526-5343

e-mail: rtobin@ajc.com

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About George Baker III

Commercial Real Estate agent, investor and developer.
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