Collaborating With Developers to Make Strip Redevelopment a Reality

What developers want most, they say, is a cooperative environment. Specifically, cities “can recognize that economics are a major issue,” said Tony Brown, president of The Pelican Group, Mobile, Ala.

The degree of cooperation is generally reflected in the ordinances dictating what developers can and cannot do, and in local administrations’ willingness to bend or waive those rules on occasion, sources have said.

However, cities can’t generally do that, according to Keith McDonald, mayor of Bartlett, Tenn.

“There’s no slack to be cut,” McDonald said. “This is the law.” He said that cities shouldn’t be surprised by federal or state building codes and standards, or by a city government that appears inflexible.

Towns do need someone on staff who understands why retail properties underperform, said Brad Hutensky, president of The Hutensky Group, a Hartford, Conn., developer. Sometimes, local officials encouraging redevelopment should consider non-retail uses that fall into what Hutensky called “gray” zoning, such as health clubs or other nontraditional center tenants.

Sources extolled the virtues of mixed-use redevelopments, especially those including residential units. The inhabitants support the retail, breathe life into an area and can generate additional tax income.

Adding residential units is “a way of revitalizing a dead strip,” said Bill Hudnut, former mayor of Indianapolis, and senior resident fellow at the Urban Land Institute. "[Obsolete centers are] one-dimensional. We think they need another dimension.”

Mixing several uses on one site is another instance where public officials may need to tweak zoning or use broader discretion when deciding what uses meet current zoning.

Regardless of what uses are appropriate for the property, there are things cities can do to encourage redevelopment.

James Maurin, former chairman of the International Council of Shopping Centers and chairman of Stirling Properties, a Covington, La., development company, said the government’s role boils down to reducing the developer’s risk.

“Clearly, there is no way only private capital will make it work [for some projects],” he said.

Taxes are a powerful incentive. Local governments can utilize tax-increment financing, waive property taxes on improvements for a certain number of years or tax a redeveloped property at a lower rate than it would otherwise qualify for, even temporarily.

Sources listed other forms of financial help, too. Towns may offer grants for refurbishing storefronts, assemble land or condemn decrepit buildings for demolition.

Maurin acknowledged these public-private deals are difficult to negotiate, “because [the developer is] asking for a financial contribution and because the city has a wish list.”

The general condition of the community surrounding a center plays a role in encouraging redevelopments, too, because it affects a developer’s ability to lure fresh tenants, said Warren Cooley, director of retail and economic development with Valley Economic Development Center, a Van Nuys, Calif., business-development nonprofit.

A well-maintained streetscape — with roads and sidewalks in good condition, no overhead utility lines and generally intact infrastructure — will attract new retailers. Lots of trees help, too, one source noted. They provide shade and natural beauty.

But in a downtrodden area, “unless something physically starts to happen” to improve the environment, a city won’t accomplish change, Cooley said. Tackling the look and functionality of the community at large is the government’s responsibility, not a developer’s, he said.

Local zoning and other ordinances — anything from building codes to parking requirements — can also affect a redevelopment effort economically.

A town’s willingness to occasionally bend or break those rules goes a long way, Brown said. He recalled one municipality that compromised on a parking lot layout for a project. The city’s rules required an island for every 15 spaces in the lot. The Pelican Group’s plans didn’t include that many, but the city eventually allowed The Pelican Group to install islands roughly every 17 spaces. Safety-related codes are understandably ironclad, but regulations dealing with cosmetic issues should be flexible, Brown said. In this case, it kept The Pelican Group from spending big money to tear up more asphalt to meet code.

But McDonald warned that cities don’t have as much flexibility as developers may think especially to enforce ordinances for one project and ignoring them for another.

“We can’t discriminate in that way,” he said. “It’s either the law or it isn’t.”

Redevelopment and planning experts say certain rules are particularly important.

Over time, municipalities insisting on good design will reap more aesthetically pleasing commercial zones than those that allow the often cheap, uninspired retail look of the past, said John Shirey, executive director of the California Redevelopment Association.

A reason older community centers falter is because they aren't interesting, he said. “There’s one single face to the buildings — one uniform, long building with metal doors and uninteresting windows.”

McDonald said developers face restrictions today precisely because suburbs want to avoid gaining shopping centers that will eventually deteriorate as badly as their predecessors from the 1960s or 1970s.

“Many of us put into place laws and ordinances so somebody doesn’t do that again,” McDonald said.

Hudnut sees walkability as crucial, and believes two questions should be asked: Does a project encourage pedestrian access, and will people on foot feel comfortable lingering there?

David Mogavero, president of architecture firm Mogavero Notestine Associates, said suburban governments should not compromise on “the quality of the building architecture or quality of the site plan; the functionality of the community is the most important aspect.” For example, does it protect pedestrians from automobiles or provide appropriate landscaping? These questions go beyond the buildings, per se.

Other rules, such as traffic counts, should bend for the greater good of encouraging pedestrian-friendly projects in particular, Mogavero said.

Details: For more information, contact Christy McFarland at (202) 626-3036 or mcfarland@nlc.org. All delegates at NLC’s Congress of Cities and Exposition are invited to attend the upcoming meeting of the First Tier Suburbs Council on November 15 from 2 p.m. to 5 p.m. The focus of the meeting will be strip center redevelopment.

Maura K. Ammenheuser is a regular contributor to Shopping Centers Today, a publication of the International Council of Shopping Centers (ICSC). ICSC, an NLC Corporate Partner, is working closely with the First Tier Suburbs Council in a study of strip center redevelopment.