For every reason not to locate in an urban/downtown project, there are at least two, maybe three, arguments in favor of it.
No type of project offers the same density and diversity that true urban/downtown projects do and, generally speaking, no other project has the same rehabilitative impact on a significant area. And while the challenges are numerous (think tight spaces, existing buildings in need of rehab and a politically charged process), the advantages can make the headaches worthwhile.
Just ask the experts. The Cordish Co., based in Baltimore, has a host of urban projects dotting the country. And, despite the recessionary climate, VP Blake Cordish said that, by and large, the format in general and his company’s projects in particular are escaping the downturn.
“We have found that downtown sites have outperformed other geographic categories, such as suburban sites,” said Cordish. The reasons, he explained, are multifold.
“Primarily, it is because downtowns draw from a variety of demographic demand centers, so you’re reaching into different pockets, whether that be convention, downtown office workers, downtown residents, sporting event attendees or cultural patrons,” he said. The larger net cast by downtown sites reduces the impact of a general economic malaise.
Cordish Co. is tuned into the urban district concept. The company has a score of downtown projects and districts, from Philly Live!, Indiana Live! and K.C. Power & Light District, all designed to reflect what Cordish calls the “pure” definition of urban.
“I think the word ‘urban’ has broadened in scope, especially with the new urbanism movement, to capture more non-downtown sites,” he said, “but I still personally subscribe to the pure definition of urban, which means core downtown locations.”
Only core downtowns offer the density and mix of uses, with the multiple attractions that include sports venues and cultural destinations. And, said Cordish, it is important that these areas continue to thrive, especially in the face of suburban sprawl.
“Many incentives were originally targeted to true downtown or urban locations,” he said. “As some of those incentives move to other non-downtown projects, it is in my view less beneficial in that the point of urban/downtown projects is to help revitalize our downtowns.” That revitalization, said Cordish, is paramount to the quality of life and to the overall economic health of the downtown core.
Cordish’s The Walk project spans 11 city blocks in Atlantic City, N.J. The development snugs between the anchor casinos that line the boardwalk and the convention center. “In fact, we have filled the hole of the donut, if you will,” said Cordish, who developed the project about five years ago. Thirty-eight million people visit the casinos each year.
The Walk is currently in the throes of a Phase 3 expansion, with expansion No. 4 already master-planned and prepped to begin on the heels of Phase 3 completion.
The project is a public-private development among the city of Atlantic City, the state of New Jersey’s Casino Redevelopment Authority and Cordish Co.
“What was once a very troubled area of Atlantic City has been completely revitalized,” said Cordish. “While the sales have been off the charts, which has allowed us to go to Phase 2, Phase 3 and eventually Phase 4, what has been even more gratifying is the transformation of downtown Atlantic City.”
The project has attracted premier retailers, including Coach, Polo Ralph Lauren, Tommy Hilfiger, Liz Claiborne, Nike and H&M, as well as restaurants such as Ruth’s Chris Steak House.
There was a time when the project could have gone a different direction. Before Cordish was involved, another developer looked at the site and proposed an enclosed mall. “As we looked at the district and how it would link with the rest of the city and act as an anchor for further spinoff, we felt it important to keep the existing street grid and create an open-air district,” said Cordish.
“One of the reasons for The Walk’s success, from a planning and design standpoint, was adhering to those urban principles.”
Risk tolerance: Urban projects aren’t for the faint of heart. Despite the success of The Walk, K.C. Power & Light and the other vibrant downtown destinations around the country, the challenges that come with building them, and inhabiting them, bear understanding—not the least is the cost involved.
“Inner-city projects are usually more expensive to build on a per-square-foot basis, so rents have to be higher,” said Adam Ifshin, president of Tarrytown, N.Y.-based DLC Management Corp. “That, of course, increases the risk for the retailer.”
In addition, downtown projects frequently require a pioneering approach to retail design and construction. “Many downtown deals involve non-prototypical space, multi-level access and untested markets,” said Ifshin. “Imagine the complexities of subterranean parking and vertical transportation; the risk is therefore magnified.”
But then there’s the risk-to-gain ratio. “If it’s true urban, then you have powerful demographics involving lots of people with lots of money, packed into an organically grown, multi-ethnic area that can generate huge numbers in terms of retail sales,” Ifshin added.