The State of Downtown Turnarounds

Revitalization is vital for successful downtowns of all sizes.

Comeback. Turnaround. Rebound. Call it what you will. Downtown revitalization is a story that keeps getting told — and for good reason. 

“These are places that still matter,” said Tracy Hadden Loh, a fellow with the Center for Transformative Placemaking at the Brookings Institute.

Back in the 1960s and 1970s it seemed otherwise. Usurped by the suburbs, splintered by freeways and crippled by deindustrialization, downtowns across the country were at risk of becoming irrelevant after decades of economic and cultural supremacy.

In a sign of the times, two Seattle real estate agents put the words, “Will the Last Person Leaving SEATTLE Turn Out the Lights,” on a billboard in 1971 — a funny/not funny commentary on overall urban malaise and mass layoffs by the Boeing Co.

But there was too much at stake to turn out the lights. Seattle recovered in the 1980s, as did many other cities and downtowns. Through the ups and downs that followed, they validated an old saying — That which didn’t kill them, made them stronger.

Today the beat goes on. Faced with fresh challenges, many cities large and small are reinvesting in the health of their downtowns because they contain too much history, investment and opportunity to sit by and let them lose their mojo.

In a study of 45 cities and surrounding regions across the country, Loh found that the largest and densest job center in each region was the downtown. “These are still the most important places in any region in terms of their economy,” Loh said.

A dynamic downtown generates employment, incubates small businesses, and makes a community proud.

That’s why downtown revitalization remains a vital part of any planning and development discussion. A dynamic downtown generates employment, incubates small businesses, curbs sprawl, stabilizes property values and makes a community proud of its unique character.

While those benefits are well documented, not every city has succeeded in realizing them. And now cities everywhere face an unprecedented X factor — the fallout from a global pandemic that robbed many downtowns of their economic lifeblood by causing people to ditch the office and begin working at home.

Cities should help developers pursue the adaptive reuse of old office buildings.

The question is how should downtowns respond? Research from the School of Cities strongly suggests that many downtowns — especially those dependent on tech workers and other professionals who may never fully return to the office — will need to find new sources of fuel for their economy.

The School of Cities is a team of academics from the University of California and the University of Toronto. Using cell phone data to track visits to significant destinations, they developed a recovery quotient that gauges the degree to which human activity in the downtowns of 62 cities has returned to levels recorded before COVID chased everyone away.

Recovery rates vary widely from a low of 31 percent in San Francisco to a high of 135 percent in Salt Lake City, but generally speaking, downtowns with high shares of employment in the professional, scientific and technical categories are lagging in their recoveries.

In its latest research brief, the School of Cities reports that up to half the workforce in downtowns powered by the tech sector may not return to the office, concluding that it may be time to “reinvent downtown.”

The authors of the brief suggest cities may need to diversify their downtown economies with a focus on bedrock employment sectors such as education, health and government. Cities could also help developers pursue the adaptive reuse of old office buildings. And they could get more people to visit downtown by creating outdoor spaces, hosting cultural events and retooling downtown streets to prioritize transit, bikes and pedestrians over automobiles.

But reinvention on this scale is a heavy lift. “Unlike past recoveries, this may take significant public-private collaboration to accomplish, given the extensive intervention required to remake space,” the authors warn.

On top of the exodus of office workers, many downtowns are struggling with crime, open drug use and homeless camps — scourges that place an additional drag on economic activity. Seattle, Portland and San Francisco are among the hardest hit — which is reflected in their place at the bottom of School of Cities recovery rankings.

But crime, drugs and homeless issues aren’t confined to big cities. Many smaller cities are struggling with those same issues in their downtowns. Asheville, N.C., is often cited as a poster child for downtown revitalization, but today, business owners are complaining that downtown no longer feels safe.

“The challenges are real,” Loh said. “Everybody has a right to feel safe.” Concerns about going downtown and about using public transit are “negatively affecting downtown recovery.”

Loh said hiring more police officers and putting more people in jail is not the answer. Neither is opening more emergency shelters. Loh said cities must not only invest in transitional/supportive housing to coax and keep people off the street, but also assist people at risk of becoming homeless in the first place.

A year into the pandemic Politico magazine convened a policy hackathon during which mayors and civic leaders from cities of various sizes described the challenges facing their downtowns and created a list of seven strategies for shaping their future.

  1. Create and maintain open spaces.
  2. Convert office space to residential housing.
  3. Eliminate or reduce parking to make room for other uses.
  4. Improve transit and other alternatives to cars.
  5. Promote cultural uses of downtown spaces.
  6. Draw more diverse groups of people to downtown.
  7. Emphasize public-private partnerships.

Lucy Vinis, mayor of Eugene, Ore., observed that the list has a familiar ring. “Even though we say we’re going forward, we are actually going back … to the downtown of the fifties,” she said. “It’s the new iteration.”

While there is little doubt COVID represents an inflection point, some downtowns were still reeling from the 2008 recession when the pandemic struck, said Hannah White, interim CEO of Main Street America, which helps small towns, urban business districts and commercial corridors restore their economic vitality.

“What COVID did was accelerate [existing] trends,” White said. “Our organization has definitely experienced increased demand for assistance as a result.” Much of the demand, she noted, is coming from communities burdened by longtime socio-economic inequities

The first thing every community needs to know about revitalization is that there are no silver bullets. “There’s no one type of project or type of investment that is going to ensure resilience,” White said.

Main Street America encourages communities to capitalize on their historic strengths.

Main Street America encourages communities to capitalize on their historic strengths. “We look at what a community has, whether it’s natural assets or human assets or architectural assets or recreational assets, and use that as the basis for planning... as opposed to the much more traditional form of economic development which is much more about what a community doesn’t have,” White said.

Not everyone wants to hear that.

“Sustaining a local economy that is based on local business takes time and investment and patience and that’s not always sexy to an elected official or someone who wants to claim a win immediately,” White said. “But luring a big corporation to remake the destiny of your downtown is rarely that easy.”

While the pandemic hit main streets hard with shutdowns and operating restrictions, it also created an opportunity driven by the rise of remote work. Untethered from the office, workers have more freedom to choose where to live based on their lifestyle rather than proximity to their place of employment.

Suddenly places that were beyond commuting range are viable places to live if they can create affordable housing and deliver the urban amenities — coffee shops, restaurants, entertainment venues — that people want. “Communities that have worked on housing as a strategy to drive development have been really successful,” White said.

The city of Dover, Del., is all in with the housing-as-a-catalyst strategy.

Dover has a lot going for it. Not only is Dover the state capital of Delaware, the city of 39,000 is home to Delaware State University, Bayhealth Hospital and Dover Air Force Base, giving it a muscular cluster of local employers.

One thing Dover does not have going for it — at least not today — is a vibrant downtown. “It is a beautiful downtown, but over the last 15 years it’s been struggling, especially after COVID,” said Diane Laird, director of the Downtown Dover Partnership. “Having half of your storefronts vacant in a six-block area is pretty challenging.”

Dover hopes to change that by adding nearly 1,000 housing units and various amenities to the downtown core as part of the Downtown Dover Strategic Master Plan. The recently completed plan was being kicked around before COVID but gained greater urgency after the already languishing downtown lost the daily foot traffic generated by state employees after most began working at home.

“We didn’t time the master plan related to COVID, but I am thrilled … that we have something in the works that we believe will be transformative,” Baird said. “It would have been transformative before COVID, but right now it’s critical.”

Commissioned by the Downtown Dover Partnership in concert with the city and other stakeholders, the master plan envisions downtown Dover welcoming 2,000 new residents drawn largely from ranks of its large local employers — a badly needed shot of oxygen for a business community gasping for customers now that far fewer people work downtown.

The plan projects a mix of public and private investments totaling $500 million. It calls for constructing four new mixed-use buildings with commercial on the ground floor and residential above, but also awards grants to help owners upgrade older buildings. Other targeted additions include a specialty grocery store, café, microbrewery, river walk, amphitheater, streetscape improvements and more than 700 new parking spaces.

At this point the plan is conceptual, but stakeholders are taking tangible action to make dirt fly. The Downtown Dover Partnership is hiring a property development director to recruit developers and oversee construction of the mixed-use buildings. The organization is also working with the city to streamline the permit process for developers.

Omaha, Neb., is long past the conceptual stage of downtown revitalization.

“The last 15 to 20 years there’s been a concerted effort to invest in our … downtown area because the people of the community understand that in order to have a strong and vibrant metropolitan area, our urban core has to be vibrant, as well,” said Mark Norman, vice president for economic development with the Greater Omaha Chamber of Commerce.

That may help explain why downtown Omaha stands near the top in the School of Cities recovery rankings with a recovery quotient of 95 percent.

A new Urban Core Strategic Plan aims to keep the momentum going. Spearheaded by the chamber in alliance with the city and other stakeholders, the plan outlines a set of private projects and public investments designed to add 30,000 new residents and 30,000 new jobs to the urban core in the next 20 years. Major elements include constructing a freeway lid, building light rail and converting a municipal golf course into a walkable urban neighborhood.

While much of the plan is aspirational and subject to ongoing decisions and agreements, several important projects and investments are already moving forward led by Mutual of Omaha’s construction of a new 40-story downtown headquarters building that will be completed in 2026.

That’s also the expected opening date for a new downtown streetcar line that is currently under design. In addition, the city is nearly finished improving and knitting together three riverfront parks to connect downtown to the Missouri River. Plus, the University of Nebraska Medical Center is designing a new administration building and the medical center campus is one of five nationwide sites selected to house a federal health disaster response facility.

Omaha benefits greatly from the pride people take in the city and the tradition of philanthropy that goes with it, Norman said. The RiverFront project cost $350 million, but $300 million came from private contributions.

“The way people care about the community is what sets us apart,” Norman said. “If there’s something that needs to get done in Omaha, we can find the people who can get it done.”

Hometown spirit is also a big part of the story behind downtown revitalization in Bellefontaine, Ohio, where native son Jason Duffy has led the renovation of dozens of historic buildings and storefronts over the last 12 years, filling them with shops, restaurants and apartments that have brought a dying main street back to life.

A neighborhood cafe with sidewalk tables in Bellefontaine, Ohio

Courtesy of the City of Bellefontaine, Ohio

Duffy and the team at Small Nation, the real estate company he founded to undertake the turnaround, now consult with other communities to help them engineer similar rebounds using their “hustle hard” approach. Small Nation doesn’t just buy and renovate old buildings. It recruits tenants, provides them with access to increasingly scarce capital and helps them with their marketing and other aspects of running a business.

Beyond hustle the key to turning around downtowns like Bellefontaine is to capitalize on what makes it unique, Duffy said. In the case of Bellefontaine, that was the historic architecture that connects with people emotionally and cannot be easily replicated.

“Driving downtown renaissance is about telling stories and sharing history and identifying what’s unique, weird, funky and fun,” he said. “Too many towns lack that personality or they don’t know how to articulate that message.”

Authenticity is in great demand these days, Duffy said. Attracting and promoting local pubs, restaurants and coffee shops is one of the best ways for small towns to deliver that. Besides being a landlord and developer, Small Nations started and operates seven restaurants. “Local food has become part of our economic development strategy,” he said.

Another go-to strategy is creating co-working facilities with high-speed internet, meeting rooms and shared workspaces as a way of encouraging remote workers to consider moving there. “With all of the disruptions in the marketplace, a lot of people are thinking about small towns differently,” Duffy said.


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