Catalytic Redevelopment Part 1: Setting Goals
After over a year’s worth of engagement by respondents and community members, the Atlanta Beltline Inc. (ABI) recently announced that they were abandoning the Murphy Crossing RFP and parting ways with their selected finalist, Place Properties in partnership with South Carolina-based developer WRS. As a large intown parcel with historic existing structures, Beltline frontage, and a MARTA station less than a mile away, the Murphy Crossing site has the potential to spark development across a huge section of the city, resulting in a range of outcomes that will impact generations of Atlantans. In 2018, KUA and our development partners Prestwick Companies, Urban Realty Partners, and Stream Realty Partners, were among several groups to submit a proposal. In the wake of the collapse of this long-anticipated redevelopment, we have been asking ourselves: what is the right approach for the redevelopment of large catalyst sites like Murphy Crossing?
In our experience, successful redevelopments creatively balance the goals of the community, development finance, and the basic principles of good urban design. Balance is the key word here, because trade-offs are often required to achieve project goals and maintain a viable project. Our hope with this post is that community leaders and elected officials can better understand these trade-offs, and in turn more effectively communicate with local development authorities and developers on future projects – including any future attempts to redevelop the Murphy Crossing property.
Approaching Catalytic Redevelopment Projects
Our approach to designing large redevelopment projects involves three steps aimed at understanding the objectives of stakeholders, confirming the project’s feasibility, and establishing a long-term roadmap. As neighborhood redevelopment specialists, we think that if you have a good handle on those three areas, you’re on the road to a successful redevelopment project. Here are the steps:
1. Set goals: Prioritize affordability and feasibility
2. Do the math: Do not over-rely on outside subsidy
3. Think incrementally: Create a flexible framework that allows for growth over time
When evaluating development proposals, it should be evident whether these steps have been taken in some form or fashion. Over the next four posts, we will go into detail on each step, highlighting what to look for and what questions to ask of developers to clarify intent and methodology. Along the way, we’ll use past KUA projects like Murphy Crossing and our work on the Lee + White redevelopment as real-world examples. First up: Setting Goals.
Every project starts with certain goals in mind, and the goals of a city or redevelopment agency may or may not align with those of the community. It is relatively easy to state high level goals that should allow for consensus, but things can quickly break down when details and tradeoffs come into play. Some goals will be outlined in an RFP: for Murphy Crossing, ABI stipulated that proposals should endeavor to provide affordable rent rates, support job creation, provide a certain amount of green space, execute the redevelopment in a timely manner, and provide structured parking. We also understood from attending neighborhood meetings in Oakland City that the community supported the preservation of the existing structures and desired that new development serve existing community members. They sought housing, office space, job opportunities, amenities, and public spaces that were affordable and accessible to existing neighborhood residents, while also welcoming new folks to the neighborhood. In other words, the community was and is wary of the gentrification and displacement that has been a byproduct of other Atlanta developments and wanted any new developer to recognize, understand, and accommodate those concerns.
Groups submitting proposals will have their own goals: constructing certain types of buildings, certain quantities of units, or generating a particular return for their investors. As w e will discuss in this series of posts, achieving these goals is intimately associated with the project’s financing strategy and with the design decisions undertaken by the project team. Achieving all goals is often impossible as some are naturally in conflict with each other. Negotiation and compromise are required to achieve balance, and knowing what questions to ask and what details to look for are critical to entering those negotiations. While most come prepared to fight for their goals, a critical skill is learning how to effectively prioritize your goals so that you can negotiate and talk trade-offs. Let’s dive into some typical goals that often appear in RFPs and are voiced in community meetings.
Affordable residential and commercial rents are a common goal of communities and a critical tool towards achieving a second goal: minimizing gentrification and displacement. Lower residential rent rates allow community members to continue living in their community; low commercial rent rates encourage local entrepreneurs to locate in the neighborhood and can also help jump start new small businesses. However, as we will discuss in more detail in Part 2, less revenue from rent translates to fewer funds to pay for and maintain the project – placing the goal of affordability and the financial feasibility of a project in conflict from the very beginning. Without huge outside subsidy – see Part 3 – the only way to provide affordable rent rates are trade-offs that balance project costs with desired affordability goals. A lot of times this means providing less expensive infrastructure, such as less parking and/or fewer flashy amenities. The Lee + White development just up the street from the Murphy Crossing property is prime example: a light touch was applied to the renovation of the buildings, and only existing surface parking was provided instead of a costly new parking deck. This kept project costs low, and in turn enabled low rents for new tenants. A couple of years later we have a thriving food and beverage destination and a productive small business incubator.
A critical tool to supporting local wealth generation is to create jobs in the community – especially in the form of new small businesses. Not every development will be able or should be expected to accomplish this, but it is a common goal for communities, and in the case of the Murphy Crossing RFP it was a central requirement. While the provision of a wide range of commercial space options that will attract a variety of employers is best, we will focus on the toughest job types to facilitate: small businesses, especially new small businesses. Why are they the toughest? Because they depend on low rent rates to survive the “getting off the ground” phase, and small businesses typically have limited access to capital. A project’s ability to generate jobs and support small business growth is closely tied to the relative affordability of its rent rates – lower rent rates are easier for new businesses to afford – and we know that affordability is tied to project cost. Unless major outside subsidy is provided, a small business incubator, for example, must be housed within a cost-effective building in order to provide affordable rents. And as we’ll discuss in Part 2, that need for cost-efficiency extends beyond the building itself to the surrounding site and the hidden infrastructure that enables the building to function.
Green Space vs. Public Space
A perennial goal of communities is the provision of ample green space, often envisioned as a sprawling park space. Everyone loves parks, and green space provides welcome relief from density. Folks often communicate that developers should not be allowed to build out every square inch of a property and should be required to provide a green space amenity for the neighborhood. This goal of the community comes into conflict with the developer’s need to build a certain amount of rentable space in order to fund the project. Each square foot dedicated to horizontal park space is a square foot that cannot be rented. Some of that can be made up by building taller – adding more floors to buildings – but in many cases height limitations instituted by local zoning codes prevent building tall enough to make up for the lost horizontal area.
One thing to consider is that at the core of the desire for green space is a desire for public space, and public space can take many forms other than a park. If a developer is unable to dedicate satisfactory ground area to park space, know that other opportunities exist to create space for use and enjoyment by the public. One that we think deserves more attention in Atlanta is our streets. Streets with generous sidewalks, bike lanes, street trees, street-facing patios, and sidewalk dining are the heart of public life in many of the world’s most prized cities – think of New York, Paris, Amsterdam, Rome, and New Orleans. As we’ll discuss in Part 4, developers can design their projects with small blocks and generous streetscapes to provide more of this public space. And there is a critical financial incentive for developers: more streets mean more frontage for ground-level commercial tenants, which means much higher value for those tenant spaces. When evaluating a proposed development, remember that there are alternative ways to incorporate public space into projects other than green space, and that developers can benefit from that public space as much as the community.
Preservation and Reuse
The Oakland City neighbors were eager to see the unique existing structures on the Murphy Crossing site repaired and brought back to active use – another common goal for communities. It is easy to understand why folks don’t want to see their neighborhood buildings torn down and replaced with new development that doesn’t reflect the character of the neighborhood or the people in it. Many times across the country the piecemeal replacement of existing buildings in a community with new development has led to the physical and characteristic transformation of a community into something entirely new and separate – sometimes complete with a new name (see West Midtown in Atlanta and DUMBO in Brooklyn). When existing residents are not invited to participate or lead the redevelopment of their own community, a sense can develop that the new iteration of their neighborhood is not for them.
As architects who have spent the last couple of decades focusing on transformational adaptive reuse projects in the Southeast, we are extremely familiar with the benefits that come with repurposing existing buildings. As we will discuss in Part 3, there are numerous financial benefits of reusing old buildings that developers can take advantage of to lower their project costs. But equally important are the intangible benefits to the community. When combined with affordable rent rates and local job creation – both of which are more attainable when project costs are low - seeing familiar structures incorporated into a new development can lend a sense of ownership for the surrounding community towards the new development and a sense of continuity through the transformation process. Without affordable rents or accessible jobs, however, the surrounding community may no longer have access to the repurposed buildings that may have previously housed beloved neighborhood businesses and may feel deeply wronged by the new development. Buildings are a central component of the physical legacy of a neighborhood, its people, and its history; repurposing them for continued use keeps that legacy alive.
Setting goals at the outset of a redevelopment project is critical for all stakeholders – and each group will be advocating for different and often competing objectives. For groups issuing RFPs, communicating objectives sets the tone for a redevelopment project: they are a mandate to developers for what to prioritize in their proposals and a message to the community about what they can expect. For developers, outlining goals sets the framework around which the design and financing of a project can be organized. For communities, establishing a unified vision of the neighborhood’s objectives creates a solid platform around which advocacy efforts can be built and effective negotiation with developers can be accomplished. Like all aspects of redevelopment, achieving goals is all about balance, strategic compromise, and trade-offs – but knowing what to fight for – and why – is more than half of the battle. As we’ll discuss in the next post, things really get interesting when it comes time to balance goals with the financial realities of project budgets.
Editor's note: this post was edited on 10/19/2020 to clarify the name of the original finalist for ABI's Murphy Crossing RFP. Place Properties was the primary submitter with WRS Inc. as a partner.