Tuesday, October 23, 2012

Pringle Creek Urban Renewal District Nets Little over Inflation

The City is trumpeting the closure of the Pringle Creek Urban Renewal district. But has it been really so great?

In today's paper:
The city’s Urban Development Department noted in its memo to the council: “The Plan accomplished its purpose of improving the area. In 1971 the assessed value was $18,977,000, and in 2012 it rose to $73,766,630, with a Real Market value of just under $108,945,000.”
According to the government's Bureau of Labor Statistics consumer price index calculator, $18,977,000 in 1971 dollars equals $108,429,892 in 2012 dollars. If we just look at assessed value, the assessed value of the district badly underperformed inflation!

Pringle Creek Urban Renewal Area, 1975
I don't know how to perform this calculation in a sophisticated way. So this is very crude swag. (Maybe a reader with a background in economics can help?)

But in this crude calculation leveling a somewhat shabby mix of homes and commercial buildings, and replacing them with a campus-like cluster of mostly single-use government buildings set in a generous parkland, together yielded less than doing nothing and just leaving those buildings, their owners, and prospective new developers alone. Isn't that a little disturbing?

(Moreover, how much in property taxes are these government buildings paying, hmm?)

I don't know that I want to delve into a debate about urban renewal generally. I think it still has uses, though range of appropriate uses is almost certainly smaller than what its proponents suggest.

But I want to suggest that we should run away from the way it was implemented here.   In fact, big box government buildings like the library, city hall, and SAIF, share more with big box retail than we might like. The economic advantages of mixed-uses and density are clear:

Charts:  "The Smart Math of Mixed-Use Development"
Again, I'm not going to dig into the details, but I bet if we evaluated the Pringle Creek Urban Renewal District on a value/acre basis, we would find that it scores pretty low.

To say that the intervention of the Pringle Creek Urban Renewal District was a great success may be at best naive, and at worst a significant misrepresentation of urban renewal.  Unless someone comes up with some really different numbers (I have a query into the City), it seems to me that the district's value is not much different than the default condition of having done nothing.  If the goal of urban renewal is to create lots of value over doing nothing, then this district failed. 

In addition to the lack of direct economic value, the land use patterns of old-school urban renewal impose other costs.   In transportation, this pattern of institutional development near downtown has girdled downtown proper. Residents and regular pulses of traffic into downtown, especially pulses by those on foot, on bike, or on transit, but even those in cars, face formidable barriers on the south, east, and west.  It is difficult to move through this kind of urban redevelopment.  And should it matter that City Hall is seismically unstable, and that we need $60 million or so for a new police facility?  Should we include the fact much of what was built through the urban renewal apparently had a lifespan of only 50 years or so - and does the replacement cost need to be factored in?  There are a bunch of externalities not included in the City's assessment, hidden costs that render the urban renewal patterns even more problematic.

As we look at the Downtown-Riverfront Urban Renewal District and others in Salem, we should do a better job of thinking about generating future value and about the expected delta between doing nothing and staging an intervention.


Anonymous said...

When I read this I just shook my head - Mayor Anna Peterson acknowledged the gentrified area and called it “one more gateway to our city,” and “a very eye catching area for our city.”

B+ said...

And just what is being planned for the North of downtown? More girdling? I've visited castles in Europe with less effective moats than what has been done to downtown over the years.

Salem Breakfast on Bikes said...

North? It's hard to say. There's some discussion of it at the end of this note on a Council agenda.

The cluster of urban renewal projects at Market and Broadway is a mixed bag, but certainly Broadway Commons is a step in the right direction.

In the Pringle Creek zone, 295 Church participated to some degree in the urban renewal funding, I believe, and it too is a step in the right direction.

I don't think there are many who would argue any more for the moat, campus, and superblock style.

But I still worry that instead of, say, focusing on renovating largely abandoned second stories of downtown buildings, we want to build new things like The Meridian and The Rivers, or want to start afresh with the auto dealership land around Liberty and Division.

I worry that instead of lots of small ideas, we want to focus on one big idea - and monolithic visions and master plans are rarely nimble enough for phasing and mid-project course corrections as market and other conditions change. Plus, the whole "too big to fail" kind of thing.

(This might be a straw man, however. It might be that economic conditions are such that we will never again see urban renewal projects level multiple blocks to refashion them in one grand gesture. Most recently, I think, the cluster of projects at Market and Broadway was at least done in three discrete parcels and projects. It was staged in smaller chunks.)

Hopefully folks who know more about urban renewal will chime in at some point!

Salem Breakfast on Bikes said...

A reader over the weekend reminded me of the way urban renewal gutted the Hollywood neighborhood. Here's one snapshot that completely encapsulates the transition from a shabby-but-vital neighborhood to a green-but-sterile wasteland.