Downtown Revitalization Efforts Create a Market for Contractors
Cities in nearly every state are either launching downtown revitalization and redevelopment efforts, or planning for them. Whether the project is a sports arena, entertainment venue, affordable housing, library, hospital, or community college, these initiatives have one thing in common: a need for private sector contractors, investors, or partners.
Revitalization projects typically include a mix of elements, and they are appealing because of the benefits that result. Safe downtowns with thriving businesses and opportunities for walking, shopping, eating, and gathering for recreation and entertainment make the downtown areas a great destination for families, retail establishments, tourists and workers.
What’s more, vibrant downtown areas greatly enhance city tax revenues. City leaders are using non-revenue producing properties to entice private-sector developers into downtown projects. Once repurposed, the old, non-revenue producing assets begin generating new revenue that can be used to fund other priorities.
A recent study by the International Downtown Association reports that vibrant downtowns contain around 3% of citywide land, but contain 14% of all citywide retail and food and beverage businesses, and 35% of all hotel rooms. This results in $53 million in sales tax per square mile, compared to the citywide average of $5 million. Not to mention that downtown residential buildings also add to the tax base. In the 24 cities included in the study, residential growth in these downtowns outpaced the rest of the city by 400% between 2010 and 2016.
Partnerships between city officials and contractors result in new and visionary downtown destinations. Along with large vertical construction projects, there are opportunities for countless other projects, including parking structures, enhanced Wi-Fi, landscaping, pedestrian and biking paths, and traffic improvements. Some revitalization efforts are anchored by a signature park, convention center, stadium or entertainment venue, but that is not always the case.
Not only are cities promoting it, state leaders are also prioritizing downtown redevelopment. New York’s Downtown Revitalization Initiative (DRI), now in its fourth year, provides $100 million in state resources available annually to 10 cities throughout the state for community revitalization and business growth.
There are many funding options available to cities. Generous federal grant programs include BUILD grants (U.S. Department of Transportation), Community Development Block Grants, (U.S. Department of Housing and Development) and Smart Growth grants (Environmental Protection Agency). Other grants are provided by non-profit networks like the Main Street America program, a subsidiary of the National Trust for Historic Preservation. Other funding options include downtown public improvement districts (PIDs), bonds or loans, and master developer/P3 partnerships.
Opportunities for downtown revitalization are announced almost daily. Here are a few upcoming:
- The City of Paterson, New Jersey just announced a plan to advance a $100 million investment in Downtown Paterson. The initiative will utilize $40 million of the tax credits to support the construction of an entertainment arena, hotels, and other amenities. Ultimately, the project will bring new retail, entertainment, and commercial amenities to the downtown area, create a walkable, transit-friendly, urban environment, create 400 new permanent jobs, and draw visitors, workers, and steady revenue to the city.
- The City of Milwaukee, Wisconsin recently unveiled plans for an affordable housing high rise apartment tower in downtown Milwaukee. The mixed-income building will contain market-rate apartments as well as a significant number of affordable housing units. Plans also call for a shorter tower for office space and a parking garage. Projected to cost $140 million to $150 million, the project will be attractive to investors because of an Opportunity Zone designation. Investors in the zone will be incentivized because of attractive tax breaks for projects in lower-income areas.
- The City of Wichita, Kansas plans to issue a request for proposals (RFP) for site selection and concept development for a new performing arts center. The city owns property near Main Street and will select a private sector partner to help develop a signature community asset for the downtown area. Currently, the modification/expansion study and design are complete, and the assessment is under review by the city. The performing arts center will be part of a larger initiative to develop the downtown riverfront so other projects will be announced.
- The City of San Luis Obispo, California completed a feasibility study for a proposed new convention center and has now embarked on a second study will focus on identifying potential site locations. Interested contractors are advised to follow the activities carefully over the next few months. New convention centers attract all kinds of additional projects.
- City leaders in Hot Springs, Arkansas have announced plans to redevelop a downtown site that formerly housed a historic hotel. The city has already invested more than $2 million to acquire the property, demolish condemned structures and clear it of environmental liabilities. Hot Springs will issue an RFP based on reports from the public planning sessions, and renderings from university partners to be made public soon.
- The City of Rockport, Texas, was recently awarded a $5 million grant from the U.S. Department of Commerce to assist in a redevelopment of the Rockport Center for the Arts. The total cost of the project, which will add over 20,000 square feet of new space, is estimated at about $8.5 million. A planned campus will house the center’s sculpture garden, visual arts and art education programs and a performing arts conference center. The facility will make the downtown more vibrant and increase tourism, the city’s most significant industry.
Revitalization is a hot trend, and a very positive one. Not only do such projects benefit city coffers, the initiatives result in thousands of new opportunities for companies of all types.
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