Cities Strive to Bring Back Downtown Bustle
`IF you build it, they will come.''
That is what city officials and developers are saying about such downtown shopping projects as Baltimore's Inner Harbor and St. Louis Union Station, which have been luring consumer dollars from the suburbs back into United States cities.
``The downtowns that have survived ... have been revived by a mall or a downtown retail project,'' says Keith Foxe, spokesman for the International Council of Shopping Centers (ICSC) in New York.
In the last five to 10 years, however, developers say they have seen a tremendous drop-off in the number of cities investing in downtown shopping projects for two major reasons: The economic condition of cities has changed for the worse and federal funding for such projects has almost dried up. Yet some cities are finding that a public-private partnership between municipalities and private business groups is the answer.
The Rouse Company, headquartered in Columbia, Md., was one of the first developers to get involved in downtown retail development in the mid-1970s. Since then, the company has built 16 urban shopping projects, including Boston's Faneuil Hall Marketplace, Harborplace and The Gallery in Baltimore, St. Louis Union Station, Bayside Marketplace in Miami, Riverwalk in New Orleans, and Underground Atlanta.
The last project built by the Rouse Company was almost five years ago, says company spokeswoman Cathy Lickteig. In the 1970s and early '80s many cities built downtown shopping centers, she says. Cities had more money available and could obtain federal backing through Urban Development Action Grants.
But the recipe for funding has since changed. Federal grants were virtually eliminated in the 1980s. In addition, urban malls cost more than before. Today's projects are ``ferociously expensive,'' Ms. Lickteig says, costing tens and hundreds of millions of dollars. It can take up to 10 years for cities to gather funding.
While all 16 urban properties that the Rouse Company has built have helped revitalize their downtowns, Lickteig says that all are not highly profitable. ``The people who are investing with you ... have to be prepared to wait it out because it could take 10 or 15 years before ... [projects] are really generating money,'' she says.
Seventy-five percent of Baltimore's Inner Harbor project (started in the late '60s) was built with federal funds and 25 percent with city funds, says Walter Sondheim, former chairman of Charles Center - Inner Harbor Management, an organization that oversaw construction. ``I'd like to think that we'd be able to find a way to do it [again],'' Mr. Sondheim says. ``But the federal money certainly isn't available.''
A public-private partnership has helped Indianapolis get its Circle Centre off the ground. The $325 million mall is to be completed by the fall of 1995. Funding was made possible by a partnership between the city, Simon Property Group (the developer serving as the project's managing general partner), and 14 local corporate investors. Creating the partnership helped end years of delays, says Billie Scott, a Simon Property Group spokeswoman.
But ``you can't just plop a mall in a downtown area and assume everything is going to be rosy,'' Ms. Scott says. Projects need to have a heavy worker and residential base, and ``should always be tourism oriented.''
Cities also must work extra hard to attract shoppers, Scott says. She gives three reasons why customers no longer shop downtown: the lack and expense of parking, security issues, and being ``out of the habit.'' To solve parking problems, many cities acquire land, build facilities, and provide low-cost parking.
``We need to change people's ideas about their shopping patterns,'' Scott says. ``Downtown projects ... must be special.''
Downtown areas must also attract a night business as well as daytime traffic, Mr. Foxe says. ``You are cutting margins pretty close if you are just relying on a daytime crowd,'' he says.
Underground Atlanta, built in 1989, had its ``ups and downs'' at first, he says. But the city has worked very hard in the last couple of years to attract a night crowd, he says, and ``that's what is going to keep the operation well in the black.''