Category Archives: Land use & development

The Center-City Job Resurgence

job_shift

by James A. Bacon

After decades of losing jobs to the metropolitan periphery, the nation’s downtown employment centers have been recording faster job growth since the recession than areas located further from the city center, according to a new report, “Surging Center Job Growth,” by Joe Cortright, president and principal economist of Impresa, a consulting firm specializing in regional economic analysis.

Cortright compared job growth between city centers (defined as within three miles of the center of a metropolitan region’s central business district) and outlying areas. During the go-go years of the 2000s-era real estate boom (2002-2007), the periphery enjoyed rapid job growth while city centers stagnated. Since the recession (2007-2011), city centers have gained jobs while the periphery has lost them.

Those  numbers represent a composite of 41 of the nation’s largest metropolitan regions for which Cortright could find comparable data. The national trend does not apply to all metropolitan regions. Indeed in two of Virginia’s largest metro areas — Hampton Roads and Richmond — the periphery continued to out-perform the city centers.

richmond_hr

What’s going on? The big-picture story is that the industry mix of the national economy is changing, and that shift increasingly favors central business districts.

In general, knowledge-oriented industries that require considerable face-to-face interaction are clustered in city centers, while goods producing and moving industries are more decentralized. Knowledge-oriented industries tend to use land much more intensively than goods producing and distribution centers.

The biggest construction declines occurred in the construction and manufacturing sectors, which tend to be located on the periphery. Those sectors have been slow to rebound during the recession, but if and when they do, Cortright said, the compositional disadvantage of the periphery might diminish. (By “compositional,” he means the advantage of disadvantage conferred by industry mix.) However, he argues that center cities will continue to enjoy generalized “competitive” advantage.

These factors — the growing preference of well-educated  young adults for urban living, the shift of companies to city centers to tap this labor pool, the growing pull of the “consumer city,” the growth of “eds and meds,” the continuing relative decline of manufacturing and distribution, and the waning of major investments in new highway infrastructure — all give us reason to believe that the shift toward city center growth is not a temporary anomaly.

A closer look at Virginia metros. How do we explain the departure of Hampton Roads and Richmond from the larger, national trend? Remember that the “national” trend is derived from composite numbers that include a lot of variability. The trend does not apply equally everywhere.

Hampton Roads is a special case because its economy is so dominated by military spending, and military employment is concentrated in military bases. The military makes its decisions where to grow and contract based on different factors than the civilian economy.

As for Richmond, my sense is that downtown living and employment has surged since 2011, the most recent years cited by Cortright. The competitive advantages of central business districts apply to the Richmond region as well, and we’ll see the proof in more recent numbers. Another possibility is that the three-mile definition of “center city” does not fit Richmond, one of the smaller metros surveyed. The economic vitality of central districts like Shockoe Bottom and Manchester may be offset by declining employment in the 2- to 3-mile band, which are really aging suburbs.

Government Fragmentation and Economic Growth

fragmentation

by James A. Bacon

What are the secrets of successful metropolitan regions? According to conventional economic-development thinking here in Virginia, success hinges upon the ability to maintain a positive business climate, a concept that encompasses everything from tax rates to the tort system, the transportation network to the education level of the workforce. But a new publication by the Organization for Economic Cooperation and Development (OECD), “The Metropolitan Century,” identifies a critical variable rarely discussed in Virginia: the fragmentation of municipal governance.

Metropolitan regions characterized by higher levels of municipal fragmentation tend to experience lower economic growth rates than metros with less fragmentation, contends the OECD report, as seen in the chart above. Metropolitan regions run the gamut in the degree of fragmentation, from the United Kingdom with an average of 0.4 municipalities per 100,000 residents to the Czech Republic with an average of 2.43 per 100,000. All other things being equal, the report says, “For each doubling in the number of municipalities per 100,000 inhabitants within a metropolitan area, labour productivity in the metropolitan area decreases by 5-6%.”

(I would surmise that the number of municipalities in Virginia falls in the “moderately low” category. For example, the 1.7 million inhabitants of the Hampton Roads metropolitan area are governed by 16 jurisdictions, including two in North Carolina, or slightly less than 1.0 per 100,000 population.)

Fragmented government inhibits economic growth through its impact on transportation and land use, suggests the OECD report. The inability to plan regionally can result in “sub-optimal provision of transportation infrastructure” that falls short of its potential to provide the connectivity required by a productive, growing regional economy.

In the context of large urban agglomerations, land use planning and transport planning are often the fields where the need for co-ordination is greatest. … Housing and commercial developments need to be well connected to other parts of the urban agglomeration, and public transport in turn relies on a minimum population density to operate efficiently.

Integrating transport and land-use planning makes it easier to utilize value-capture tools for financing transportation infrastructure. “Public spending for infrastructure increases the price of adjacent land,” states the report. “Often, this price increase provides a publicly funded windfall profit to land owners or developers. Land-value capture tools aim at recapturing these windfalls from developers in order to (partially) fund the infrastructure investment.”

Echoing arguments that EM Risse made on this blog years ago, the OECD report observes that administrative borders in metropolitan areas have not evolved in concert with economic and social patterns.

While good governance structures are no guarantee for good policies, it is very difficult to design and implement good policies without them. … Administrative borders in metropolitan areas rarely correspond to these functional relations. Often, they are based on historical settlement patterns that no longer reflect human activities.

A few decades ago, there was a move in Virginia to consolidate cities and counties in order to achieve administrative efficiencies and economies of scale. There were some notable successes — Virginia Beach merged with Princess Anne County, Suffolk merged with Nansemond County — but the movement petered out.  The OECD report spelled out reasons for resistance to consolidation that apparently apply across the economically developed world:

Common reasons for the persistence of administrative borders are strong local identities and high costs of reforms, but also vested interests of politicians and residents. Even if policy makers try to reorganize local governments according to functional relations within urban agglomerations, it is often difficult to identify unambiguous boundaries between functionally integrated areas.

There doesn’t seem to be any appetite for consolidating local governments in Virginia, but the OECD report does suggest an alternate strategy: Identifying specific functions that can be transferred to regional authorities.

Would it be worth the effort to invest political capital in such endeavors? Take a look at the chart at the top of this post. The big dividing line in economic growth is between medium-low and medium-high fragmentation. Assuming Virginia metropolitan regions fall into the medium-low category — and I do confess that I do not know exactly what the dividing line is — there doesn’t seem to be much of a growth premium from consolidating our way into “low fragmentation” status. Indeed, I would argue that some competition between jurisdictions in a metropolitan area is a good thing — the ability of inhabitants to “vote with their feet” helps keep the politicians honest.

But that’s a shoot-from-the-hip reaction based upon one OECD chart. If Virginia is serious about positioning itself for economic prosperity in the years ahead, our governance structures, rooted in 19th-century settlement patterns, surely need to keep up with economic reality.

“Hacking for Good” Comes to Virginia

Andrew Hyder with Code for America describes the "hack for good" movement spreading across the U.S.

Andrew Hyder with Code for America describes the “hack for good” movement spreading across the U.S.

by James A. Bacon

Michael Kolbe experienced first-hand the power of data-driven election campaigning while working on the 2012 Obama re-election team. He went on to take a job as a strategy analyst for Health Diagnostic Laboratory in Richmond but didn’t discard his idealism. Hoping to harness the power of data to solve social problems, he joined others to bring the burgeoning civic hacking movement to Richmond last year.

His first “hackathon” fizzled, Kolbe concedes. The goal was to create a “where’s my school bus” app for the City of Richmond schools, adapting open code developed elsewhere. Despite initial enthusiasm, school officials “went radio silent” and Kolbe and his compatriots didn’t have a strong enough team to push the project through. “It just fell apart.”

Learning from that inauspicious beginning, Kolbe tried again. The results of his efforts could be seen Saturday in Code for RVA’s code-a-thon held at INM United’s warehouse-chic office building in Richmond’s Scott’s Addition. This time, more than 60 participants worked on a half-dozen projects to make local government data more accessible and useful to citizens.

This time Kolbe had time to build an organization and line up sponsors and alliances. The Richmond hack-a-thon was held as part of a national CodeAcross event organized in dozens of cities across the United States by San Francisco-based Code for America. Code for America dispatched a team to help organize the Richmond event. Socrata, a Seattle-based open-data company, created a portal to which the Richmond hackers could add their data. Code for RVA also found a local champion for its open-government projects in Andreas Addison, a self-described “civic innovator” for the City of Richmond.

“This meeting wouldn’t have happened two years ago,” said Addison, who has led the effort to bring data analytics to City of Richmond decision making. “Things are changing.”

Even the governor’s office is getting on board. Zaki Barzinji, deputy director for intergovernmental affairs in Governor Terry McAuliffe’s policy shop, said the administration hopes to work with Code for America, Virginia universities, state agencies and local Code for America “brigades” like Code for RVA to organize a statewide conclave with the goal of driving open data and cultural change in state government.

Most of the projects undertaken Saturday were simple, aiming to make existing data more accessible to the public. One team worked on creating RVA Answers, a Web resource providing answers to most frequently asked questions. Another team tackled the goal of making data about city boards & commissions more readily available, including information on how to apply for a position. Yet another group worked on improving the display of city crime data.

The most ambitious project, long in the works, is an initiative to address the spread of STIs (socially transmitted infections), especially among the city’s poor and young. The city has pulled together a multi-disciplinary team to organize and analyze existing data, supplemented by insight gleaned by interviewing poor people and shadowing government health workers. The mission is to encourage people to get tested for STIs and to direct them to locations in their neighborhoods where they can do it.

This initiative will not likely wither on the vine — Danny Avula, deputy director of the city health department, is pushing the project forward. “A lot of people in government don’t get it,” Avula said, speaking of the use of data analytics. “But there are advocates now.”

Open data sounds great in the abstract, but civic hackers often face indifference or resistance. When the McAuliffe administration launched its open data portal last year, said Barzinji, it encountered a tendency among state agencies to keep their data to themselves.  The administration started small, asking each agency to share at least one data set. Once the value of public data can be demonstrated, he said, he expects the agencies to loosen up.

Never under-estimate the role of simple bureaucratic inertia. Mike Walls, IT strategy manager for the City of Richmond, noted that government IT departments are focused on the core mission of “just keeping the lights on.” Top priorities are making sure payroll is met, bills are paid and basic functions work. “You can’t have the network go down. You can’t have the emergency dispatching software crash. It creates a very cautious mindset.”

In his experience, Walls said, IT bureaucrats aren’t opposed to releasing data to the public as much as they are overwhelmed by their existing responsibilities. They see the task of opening up data as more work. “When your day job grinds you down, it’s hard to find the enthusiasm.”

Another issue, said Walls, is that data can’t just be dumped willy nilly into public databases. When data reveals information about individuals, public access may raise privacy issues. Often there are technical issues as well. Data is typically compiled to the standard of “good enough for the intended purpose,” not for a purpose someone might dream up later. As a consequence, mashing up, say, land use data calibrated to difference levels of accuracy might lead to absurd results like fire hydrants appearing in the middle of a street.

But civic tech advocates expressed optimism that the obstacles can be overcome. Small victories lead to larger victories. Said Barzinji: “First what we need is the proof of concept.” Then the push for legislation and executive action can follow.

Land, Density and Resilience

Flood-prone areas of south Hampton Roads. Source: Virginiaplaces.org.

Flood-prone areas of south Hampton Roads. Source: Virginiaplaces.org. (Click for detail.)

One more takeaway from the Resilient Virginia launch conference yesterday: All other things being equal, more compact communities are more resilient communities.

Like Bacon’s Rebellion, Cooper Martin, program director of the Sustainable Cities Institute, is a big fan of Joe Minicozzi and his maps and graphics showing how dramatically land value-per-acre varies between core urban areas, suburbs and the countryside. Densely settled urban cores have land values that are literally a hundred times higher per acre than low-density shopping centers and large-lot subdivisions.

In my commentary, I have focused mainly upon the fiscal folly of building disconnected, low-density development. The infrastructure — the roads, utilities, sidewalks and other amenities — are more expensive per household to maintain. But Martin added a new dimension when addressing the Resilient Virginia conference yesterday. Low-density development makes it more expensive to harden homes and businesses against disruption and catastrophe. When the taxable value of land is high, it’s easier to support expensive investments to protect that land than when the value of the land is low.

So, to take Hampton Roads, which I have written much about recently, resiliency planners need to take into account not only which areas are flood-prone, but which urbanized areas have land values high enough to make them economically justifiable to protect.

It’s going to be gut-wrenching and agonizing, but local officials must come to grips with the reality that much of the development that has taken place is fiscally indefensible. The region cannot possibly afford to protect every low-density subdivision in every flood-prone region — much less the roads and bridges providing connectivity for them — no matter how loudly unhappy homeowners howl at the prospect of being abandoned. The sooner local officials begin making these determinations, the sooner developers will stop building in indefensible areas and the fewer the naive homeowners who will be harmed.

As a practical matter, Hampton Roads municipalities will have to evolve to a pattern of denser development on higher land. Where development exists in flood-prone areas, there will have to be sufficient density to justify spending millions of dollars on protective measures. Fortunately, this is a slow-motion problem. The region has decades to adapt. But it needs to begin now — when complex and painful decisions must be made, decades can slip away in no time at all.

– JAB

The Non Global-Warmist’s Case for Resiliency Planning

hampton_roads_flooding2

by James A. Bacon

The key to building a strong resiliency movement — making communities more adaptable in the face of natural and man-made disasters — is finding common ground. So argued Steven McNulty, director of the U.S. Department of Agriculture Southeast Regional Climate Hub, in addressing the launch event of Resilient Virginia this morning.

Fear of rising temperatures, droughts and sea-level rise is a major impetus behind the increasing emphasis that all levels of government are placing on resiliency. But political views about climate change are highly polarized, McNulty said. “Are you a fear monger, or are you a denier? We need to get beyond that.”

Most climate scientists believe that man-made climate change is a cause for concern. But the forestry land managers McNulty deals with do not. In a recent survey, he said, “only 10% of Southeast foresters thought that climate change is man-made and real. The agricultural community is almost as disbelieving.” As it happens, their perceptions are not without basis, he added. Rising temperatures in the Southeastern U.S. have been far less pronounced than anywhere else in the country.

It’s hard to mobilize people who don’t believe in catastrophic man-made global warming to change the way they do business. “Don’t talk climate change; you’ll lose a lot of folks,” said McNulty. But flip the issue to climate variability, and the conversation takes on a different tone. Everyone acknowledges that temperatures and precipitation fluctuate, and everyone would like to protect themselves from those fluctuations. “You don’t need global warming to have big disasters.”

McNulty was one of several speakers Thursday morning who made the case for resiliency planning. The resiliency issue hasn’t made big inroads in Virginia but Resiliency Virginia, a non-profit group of state and local government officials, environmentalists and private companies, hopes to change that. The group has a mission of educating the public, sharing best practices and encouraging people to take action.

In Virginia, the most pressing resiliency issues are in the low-lying Tidewater region, especially the Hampton Roads metropolitan area where thousands of people and millions of dollars in private buildings and public infrastructure are exposed to flooding. As Brian Moran, secretary of public safety and homeland security, told the gathering, a one-and-a-half foot sea level rise would inundate 82 square miles of dry land in Virginia, 15 miles of interstate highway, miles of railroad track and significant port acreage.

While there is plenty of controversy over how rapidly the sea level is rising in Hampton Roads — not everyone accepts the prediction that the sea level will rise 18 inches by 2050 — few would deny that between subsidence (partly caused by the draw-down of aquifers, partly by the shift in tectonic plates) and the slow-but-steady sea level rise seen over the past century unrelated to man-made climate change, flooding will become increasingly severe.

Flooding in low-lying areas is not the only potential disruption to Virginia communities. Flash flooding is an issue in urban areas where the ground has been covered by asphalt and the ground has lost is capacity to absorb rain water. Ice storms, snow storms and drought are recurrent concerns. Some worry about the impact of massive solar flares that could overwhelm the electric grid. There are man-made issues as well, such as potential terrorist strikes against critical infrastructure, particularly the electric grid.

In Chicago urban flooding is a significant issue, said Cooper Martin, program director for the Sustainable Cities Institute. When city officials began mapping where the insurance claims were occurring, they expected them to cluster in the flood plains. The traditional response to flooding had been to bring in the engineers, build some levees and build some dams. But close analysis showed that many claims were occurring outside the flood plains. “All that concrete has created a new ecosystem, creating flash flood hazards,” said Martin. “The way we’ve built this community is fundamentally non-resilient. More concrete is not the answer. Taking out some of the pavement may be the most productive thing to do.”

Another problem is rampant developing in vulnerable coastal areas. An analysis of 77 counties along the Gulf Coast (not including Florida) showed $2 trillion in asset value. “Even without climate change,” said Martin, “the way we’re building our communities, we’re creating risks where we didn’t have them before.”

People have a lot of ideas of how to prepare for another Katrina-scale hurricane, said Martin. But which options offer the greatest protection for the least cost? Building up beaches offers a high payback, as do building codes mandating construction standards to withstand higher winds. (Sixty percent of Katrina’s damage came from winds, not flooding.) Mandating higher home elevations is on the borderline of being economically justified; other proposals offer a very low return. As long as coastal communities continue to permit development, they need to address these issues.

Bacon’s bottom line. As I’ve made clear repeatedly on this blog, I’m not convinced that human-caused climate change is a cause for alarm, much less an excuse to re-engineer the economy. But you don’t need to be an apocalyptic environmentalist to value resiliency. Disasters happen. They always have, always will. We don’t protect ourselves from disaster by burying our heads in the sand and pretending they can’t possibly happen. We protect ourselves by anticipating possibilities, weighing probabilities and setting priorities. That kind of thinking is making inroads in Virginia, but we have a long way to go. I applaud Resilient Virginia for highlighting the issue. Check out the Resilient Virginia blog here.

Yes, Virginia, the Millennials’ Shift from Burbs to Downtowns is Real

washington

by James A. Bacon

The debate still rages over the extent to which young Americans, especially members of the Millennial generation, are moving back to the urban core. Data published by Luke Juday on the StatChat blog should settle that question once and for all. The only questions worth pondering is why they are moving, and how many will move back to the burbs.

The chart above shows the proportion of Millennials living at varying distances from downtown Washington, D.C. In 1990, there was a weak tendency for young adults (defined as 22- to 34-year-olds) to live in the urban core but it was not pronounced. By 2012, however, the next generation of post-college young people had shifted markedly to the urban core.

The chart below shows Richmond.

richmond

In Norfolk, where the distribution of young military-age people in military facilities is determined largely by the location of military bases, the shift is less evident.

Norfolk

While the change is preference is dramatic, it is important to note that a large number of young people still resided miles from the city center in 2012. It’s not as if the suburbs are emptying of young adults. But even a modest shift in locational preference can drive the demand for new construction.

Juday, a Millenial himself, suggests a couple of reasons for the shift. Millennials have worse job prospects than previous generations at the same age and are saddled with greater student loan debt. As a consequence, they are less likely to take on mortgages for single-family dwellings in the suburbs. They’re also postponing marriage and child-bearing, which diminishes the incentives to move to suburban school jurisdictions with better schools. In keeping with their more modest economic prospects, Millennials place less emphasis on home ownership, automobile ownership and driving; they prefer walkable urban neighborhoods.

How Hospitals Can Take the Lead in Economic Development

exxon-mobil

The Exxon Mobil facility

by James A. Bacon

As budgetary pressures continue to squeeze federal spending in the Washington metropolitan area, who will assume the mantle of economic growth in the region? An unlikely champion has emerged — Inova Health Systems, Northern Virginia’s dominant health system. The company announced yesterday its intention to lease and ultimately purchase Exxon Mobil’s 117-acre campus to house a world-class facility dedicated to genomics and personalized medicine.

The story is fascinating in many ways: first, for the ambitious thinking behind the venture, which sounds like it has a legitimate shot at success; and second, for what it says about the economic clout of Virginia’s major health care systems.

Genomics and personalized medicine is one of the hottest areas of medical science today. The human genome contains about 23,000 genes, the variations in which account for much of the difference in how individuals respond to chemotherapy-based cancer treatment. The goal is to tailor treatments for a patient’s specific genome — to “personalize” medicine — to attack cancer cells while minimizing side effects.

Under the vision laid out by Inova CEO J. Knox Singleton, the health system will establish a world-class facility, akin to the prestigious Mayo Clinic, that can recruit top physicians and draw patients from around the country, according to the Washington Post.

Inova has several advantages. First, the Washington region is a prestigious, world-class metropolitan area, which should aid in recruiting world-class scientific talent. Second, Inova’s flagship hospital, Inova Fairfax Hospital, is situated right across Gallows Road from Exxon Mobil, a campus assessed at $193 million in value. Third, while not in the same biotech league as Boston, San Francisco or San Diego, Northern Virginia does have significant assets, most notably the Howard Hughes Medical Institute. (See a list of biotech assets.) Fourth and most intriguingly, the data-intensive field of genomics could draw upon the region’s strength in IT. Writes the Post:

Singleton said the use of translational medicine to develop treatments for cancer and other diseases could be accelerated by taking advantage of Northern Virginia’s expertise in cloud computing and data analytics.

“The beauty of Northern Virginia is we’re building in sort of a greenfield when it comes to this personalized medicine, genomics research,” Singleton said. “But when you look at the big data and bioinformatics capacity, there are a ton of companies in Northern Virginia who are extremely sophisticated and well-advanced; they’ve just been working on cybersecurity or weather forecasting.”

Oh, and there’s one more advantage Inova brings to the venture: It is an incredibly profitable non-profit company. In 2013 (the most recent figures I could find), Inova generated operating income of $132 million. That profit is non-taxable. Not only can Inova make philanthropic appeals to the community — the Peterson Family Foundation also announced yesterday a $10 million gift to recruit cancer specialists — it can tap the cash thrown off by its own operations. Nobody else, not even the Commonwealth of Virginia, has that kind of money to pump into an economic development project.

It remains to be seen whether the state will contribute to the effort. A key component of the project will be a new medical school. The Post notes that Singleton has not yet struck a deal with a college or university to operate the school. Governor Terry McAuliffe told the Post the state had not been approached for funding, and he did not expect to provide it. “This is all being done privately, which is great.” But you can bet your bottom dollar that George Mason University would love to get into the medical school business, which could require some level of state support. It will be interesting to see how this plays out.

As an aside, there are parallels between Inova’s plans and the Virginia Tech Carilion School of Medicine, a partnership between Carilion Health System in Roanoke and Virginia Tech, which combines “Virginia Tech’s world-class strength in basic sciences, bioinformatics, and engineering with Carilion Clinic’s highly experienced medical staff and rich history in medical education to train the next generation of physician thought leaders.” The medical school in Roanoke, which averages 42 students, had a $59 million bond package included in a state bond issue. Don’t think that Singleton hasn’t considered that precedent.

As promising as the project sounds, caution is warranted. Inova made a similar splash in 2009 when it announced plans for a $200 million Ignite Institute, which also had a focus on genomics and personalized medicine. That project fizzled, and Ignite moved to Philadelphia instead. As GenomeWeb explained in a 2010 article:

That plan collapsed after Inova Health Systems withdrew a commitment to provide $25 million over five years to the institute, citing in a statement, “The scope and scale of the project and the time needed for capital development in the current market.” Inova’s pullout, in turn, prompted Fairfax County to retreat from its own plan to partially finance the permanent facility by issuing up to $150 million in Fairfax County Economic Development Authority industrial revenue bonds.

Hopefully, Inova has learned from the experience, and the financial chemistry will be different this time.

Dominion Resources Is on a Tear

acl pipeline map By Peter Galuszka

Dominion Resources has been on a tear recently.

It’s been muscling through a dubious law in the General Assembly that would allow it to avoid State Corporation Commission rate audits for six years.

And, it has been throwing its weight around in less populated sections of the state. It is suing to force its way on the land of private property owners to survey its $5 billion Atlantic Coast Pipeline project that would take fracked natural gas from the Marcellus Shale formation in West Virginia and Pennsylvania on new routes to the southeast.

Property owners, particularly those in Nelson and Augusta Counties, are fighting in federal court in Harrisonburg.

What’s most interesting about this case is how the Commonwealth of Virginia, which swaddles itself in the ideals of the American Revolution of individual rights , somehow ignores the rights of small property owners when a big utility with deep pockets for political donations is involved. One wonders where all the conservatives are who were huffing and puffing over the Kelo case a few years back

And (bonus question) what do the two situations have in common? Republican State Sen. Frank Wagner of Virginia Beach, that’s who. He introduced the bill for Dominion to sidestep SCC oversight with the excuse that Dominion has deal with the impacts of a yet-to-be-finalized set of new federal carbon emission rules.

In 2004, Wagner also carried water for Dominion and other power companies by getting a law passed that would allow a “public service company” to survey private property without getting permission.

This is the basis of several hundred lawsuits Dominion has filed against small landowners. In the pipeline case, it will be interesting to see whether the natural gas is used for the common good of American customers or will end up being exported to foreign countries. Dominion insists it won’t,  but time will tell.

Another oddity is that Dominion is demanding access to survey a pipeline route when it hasn’t formally applied for  the project with the Federal Energy Energy Commission. Imagine if some private landowners showed up at the front door of Dominion’s downtown Richmond headquarters and demanded access to the building because they were thinking about building a natural gas pipeline? (Somebody call security!)

Here’s an opinion piece I wrote for this morning’s Washington Post.

Hither Regency Square?

Inside Regency Square Mall -- not the experiencing people are looking for these days.

Inside Regency Square Mall — not the experience people are looking for these days.

by James A. Bacon

Thalhimer Realty Partners Inc. and The Rebkee Co., two Richmond-area developers, have closed on the purchase of Regency Square Mall for $13.1 million. That’s a bargain-basement price for a property that had been assessed for $25 million a recently as a year ago and once was the premier mall in the Richmond region.

The big question to those of us living in western Henrico is what the new owners have in mind for the mall. According to an account in the Richmond Times-Dispatch today, the new owners want to renovate the mall and reclaim its status as a pre-eminent retail location. They have no intention at present to raze the structure. However, they indicated that they are open on how to develop the property. “Nothing is off the table,” said Rob Hargett, a principal at Rebkee.

As I argued in this month’s Henrico Monthly (reproduced in the previous post) Regency Square is a strategically central property for the Tuckahoe district of Henrico County. It’s the dominant retail presence for a much larger commercial district around the intersection of Parham and Quioccasin Roads. What happens at Regency will shape future commercial re-development and determine the character of surrounding neighborhoods. If the new owners simply recycle the old mall into a new retail center that perpetuates the low-density, autocentric character of the area, we follow one path. If they re-develop the property as a walkable, mixed-use “town center,” we follow a very different path.

In other words, Henrico County residents have at tremendous stake in how the mall is re-developed.

Based on my research, Regency Square doesn’t have a future as a regional retail center akin to Short Pump Mall, which enjoys access to two interstate highways. Regency’s pull will be sub-regional — mainly from the Tuckahoe district of Henrico County — and the new property owners need to calibrate their re-development plans to that reality. Of course, having picked up the property for a thrift-shop price, $13 million, dusting off the old mall and spiffing it up may be a viable, low-risk strategy for them. Another possibility is bringing in an activity generator like a medical facility or an educational institution, as other malls have done successfully around the country.

Redeveloping the property as a town center would take longer, involve more consultation with the community and require cooperation from Henrico County to build a street grid, but the payback could be considerably higher. I have put in a call to Rebkee to see if the new owners have considered a more ambitious re-development option than the one they described to the Times-Dispatch. It’s possible that they did and that they determined that a market for such a project does not exist.

Personally, I think Henrico County is ready for islands of walkable urbanism, as long as the re-development preserves the integrity of existing residential neighborhoods. This opportunity is too good to waste. Let’s hope that Henrico County leaders make the most of it.

Malleable

This story was originally published in Henrico Monthly.

regency1Willow Lawn returned to its roots. Cloverleaf was torn down. So what will become of Regency Square?

By James A. Bacon

As a teenager growing up in rural Hanover County, Andrew Moore remembers Regency Square Mall in Henrico as the place to go. He played the trumpet in Christmas concerts there with his junior high school band. Later, equipped with a newly minted driver’s license and the family car, he hung out with friends, circling the two-level shopping promenade and sampling the edgy and exotic wares of places like Spencer’s Gifts. “In a very real sense, Regency was the center of a regional community,” Moore recalls. “For a teenager, it was the cool place to go on a Friday night.”

Today Moore lives in the Westham neighborhood in Henrico, a mere five-minute drive from the mall. He’s been to Sears a couple of times to buy some Craftsman tools; otherwise he doesn’t recall visiting Regency Square in the last seven or eight years. “I have no reason to go there. There’s nothing there that I need,” he says. With all the congestion on Parham Road, he adds: “Frankly, it’s a pain in the butt to get there.”

And that’s a shame, he says. If the southwest corner of the county has a natural civic center, it would be Regency Square. But the mall has been supplanted over the past decade as a retail destination by newer, open-air shopping centers such as Stony Point Fashion Park south of the James River and the super-successful Short Pump Town Center off Interstate 64. Retail sales at Regency Square reportedly have declined by two-thirds.

By 2012 the mall was faring so poorly and bogged down with so much debt that its owner, Taubman Centers Inc., turned it over to its lenders. The lender group has kept the mall open, but the complex continued bleeding tenants. Now the banks are attempting to sell the property at a price said to be at a discount to its $23.5 million assessed value. In late January, the Richmond Times-Dispatch reported that two local real estate companies, Chesterfield-based Rebkee Co. and Thalhimer Realty Partners Inc., were in negotiations to buy the mall by the end of January. Further details weren’t available by Henrico Monthly’s presstime.

So what comes next? Will a new buyer continue to operate the mall on the cheap? Will another developer repurpose the mall, perhaps bringing in a medical facility or an educational center, to generate traffic and anchor the stores? Does the 48-acre property, if redeveloped, have a future as a walkable “town center” that sparks the transformation of the neighborhoods and shopping centers around it?

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Andrew Moore, president of the Partnership for Smarter Growth, says Regency Square has struggled to remain relevant as a mall. He envisions the property being redeveloped into a walkable shopping district such as Carytown.

Andrew Moore, president of the Partnership for Smarter Growth, says Regency Square has struggled to remain relevant as a mall. He envisions the property being redeveloped into a walkable shopping district such as Carytown.

As an architect at Glave & Holmes Architecture and president of the Partnership for Smarter Growth, Moore has high hopes for the mall and the surrounding commercial area. Despite the relative walkability of Westham – his children can walk to the local elementary school – he thinks Henrico could be more livable. He is looking for somewhere pleasant to hang out, walk around and spend time with family and friends, with connections that don’t depend solely on the automobile. There are places where he can do that but they’re mostly in Richmond, like Carytown. Henrico desperately needs something comparable, he says.

“It has lots of potential,” Moore says. “But not as a mall.”

In 1977, not long after it opened, Regency Square was a destination – a center of fashion, especially at Christmas, when visitors would come from miles around to see Santa.

In 1977, not long after it opened, Regency Square was a destination – a center of fashion, especially at Christmas, when visitors would come from miles around to see Santa.

Opened in 1975, Regency Square was designed as a classic enclosed suburban mall surrounded by vast parking lots. The business model was predicated on people driving to the shopping center in their cars, parking and spending time inside protected from the elements. Enclosed malls helped define post-World War II American suburbia and the auto-centric lifestyle. They were the closest thing to public gathering places that many suburban communities offered.

Over time, tastes evolved. As Americans became more aware of environmental issues, many became disenchanted with the idea of driving to every destination in their automobiles. Concerned about the lack of exercise in their sedentary lifestyles, they placed a premium on walking and biking. As a practical matter, the suburbs were impossible to redesign as walkable communities. Zoning codes separated land uses – houses here, offices there, retail over there – by distances too vast to walk. Most streets and roads were inhospitable to pedestrians in any case. In the early 2000s, developers emulated walkable neighborhoods by building open-air malls such Short Pump and Stony Point. They are oases of walkability, but they didn’t create organic communities. They are disconnected from surrounding neighborhoods; people still have to drive to get there. The only things to do are shop and eat. Continue reading