OUR LARGE DOWNTOWNS CAN LEARN SOME IMPORTANT THINGS FROM THEIR SUBURBAN BRETHREN?

By N David Milder

Introduction

Throughout the pandemic suburban downtowns have stood out from our largest downtowns in their ability to recover. This was no accident, but the result of the smaller districts not being dominated by monofunctional office clusters, and often actually being far more multifunctional than their larger cousins.

The pandemic has sparked numerous claims that our CBDs (Central Business Districts) are now in decline, and perhaps even perilously so. (1)  What is usually lost in such pessimistic analyses is that the areas referred to as CBDs are just large office clusters that are part of the larger downtown. The unexpected and now persistent popularity of remote work, and the consequent empty CBD office spaces certainly lend credence to those claims of weakening. So do the declines in business tourism and a severe thinning of pedestrian traffic on sidewalks usually flush with platoons of office workers at lunchtime and during rush hours.

While all of these deficiencies are undeniable, the assertions that our large downtowns/CBDs are doomed to extreme diminution or death are greatly exaggerated. To understand why our great downtowns are far from doomed we need to properly understand them and their key component parts. Most importantly, they can be not only places where people come to work and make money, but also to socialize and connect with others, to spend money, and to satisfy important personal needs. Moreover, these socially connecting functions are of growing importance to the health and well-being of all of our downtowns. This growth of the socially connecting functions is shifting the nature of our large downtowns. Such a shift would make them much more like our strong suburban downtowns.

Let’s Be Clear About What We Are Talking About

A good starting point is to acknowledge that downtowns are more than geographic areas within our towns and cities filled with clusters of offices and shops. They are complex socio-economic systems, that over time can flex in geographic extent, and the nature and strength of the functions performed within them. To persist and thrive they must change. In the post WWII years, the functions associated with working and making money took physical form in office buildings that dominated our largest downtowns.

Most of the articles proclaiming that our downtowns are in trouble use the term CBD  as a synonym for downtown. This is more than a verbal slight, since it too often leads to a narrow focus on the socio-economic functions associated with office operations, while ignoring or downplaying the other vital downtown functions. Consequently, it is important to consider all of a downtown’s functions, with the most important falling into three categories:

  • CENTRAL BUSINESS FUNCTIONS (CBFs): These are money based, dealing with work, business transactions, and the creation and management of wealth and job creation
  • CENTRAL SOCIAL FUNCTIONS (CSFs) : The downtown’s collection of activity venues that facilitate people socially connecting and having enjoyable experiences with other people, usually relatives and friends, but, importantly, sometimes strangers                      
  • CENTRAL SUPPORT FUNCTIONS (CSUPFs): These industries support the proper operation of the CBFs and the CSFs. 

Figure 1 shows some of the types of venues/operations associated with each group of downtown functions. The CBFs are but one of the three essential functional groups performed in our downtowns, and office operations are but one part of the possible CBFs!

The Ebbs and Flows of Downtown Functions.

Since the Agoras of Greece, the Forums of Rome, and the village wells everywhere in antiquity, places of agglomeration have had Central Business Functions as well as Central Social Functions. Over time the strength and importance of these types of functions have varied. In the late 1970s and 1980s downtowns responded to the post WW II weakening of their CBFs and CSFs caused by the flight to the suburbs of White residents, corporate offices and HQs, and major retailers by building monofunctional office clusters filled with fortress type buildings. This established office buildings as a viable and desirable use in fear ridden times. However, the office centric districts were also deader than door nails most of weekdays — save for rush and lunch hours — and on weekends.

It is notable, that such large office clusters have not developed in the large city centers of Western Europe. Moreover, in the mid 19th Century downtowns in América and Western Europe saw the growth of strong retail functions, especially in the new format of department stores. (See Figure 2). Yet, in recent decades, the viability of department stores in our downtowns has diminished and  become increasingly uncertain.

 Starting in the late 1990s and accelerating in the 2000s, some of these office centric downtowns, such as Downtown Manhattan and Charlotte’s Center City, turned into much more activated downtowns, drawing local residents, and domestic  and international visitors. Sidewalks that had been  devoid of people for most of the day then saw platoons of pedestrians even in off-peak hours – see photos in Figure 3.

 Downtown housing began catching on in the 1990s. New housing units in, but mostly near these downtowns also brought in a pump priming flow of nearby patrons. The number of people who lived and worked in or near a large downtown grew, but there was considerable variation in the degree with which this was achieved. The ten downtowns listed in Figure 4 ranged between 40.7% in Philadelphia and 55.9% in Midtown New York in the number of people who lived within one mile of the downtown who also worked within that area. However, 60% of the 230 employment nodes studied, had under 20% of their residents also working in the area.

There also appears to be an important discrepancy in how much housing actually was going into the downtown core areas versus the more outlying areas of the downtown. Indeed, since these “downtown” residential areas were usually beyond the boundaries of the CBD they were often overlooked in recent discussions of CBD demises. In our largest downtowns offices tended to cluster near commuter rail and subway stations, housing less so. Center City in Philadelphia is having a faster economic recovery from the pandemic than Midtown Manhattan and it is noticeable that Center City’s housing has more strongly penetrated its core area than it has in Midtown Manhattan. During the crisis residents still went out for necessaries and pedestrian traffic and retail sales have done much better in downtown residential areas than in their office clusters.    

Large downtowns with insignificant housing in the core seem to be those struggling the most to bring workers and pedestrian traffic back to pre-crisis levels.

While the need for our large downtowns to become more multi-functional has been recognized by some for several decades, the recent pandemic has revealed that many have not done so, especially in their core areas.

Learning From Suburban Downtowns.     While employment center functions have long dominated our major downtowns, this has been far less the case in our suburban and independent rural cities. Their downtowns are seldom referred to as CBDs, because their CBFs are seldom dominated by a large office cluster. Yes, they often can have a relatively significant number of people working in them, but they seldom are the location for most of the people working in the town. As can be seen in Figure 5, in the cities with the most jobs – Dublin, Downers Grove, La Crosse and Appleton – their downtown areas only hold between 3% and 7% of them.

And yes, these suburban downtowns can have a significant number of office spaces, though they usually are neither in high rise buildings nor in a dense cluster. Many are scattered among second story and some storefront spaces. Given that the people who work in these towns commute overwhelmingly by auto, offices have not been prime drivers of TOD in these downtowns. That role has usually been played by housing.

Morristown is a very interesting town because it has long been a standout as a unique suburban downtown employment center, that even these days has about 43% of the city’s jobs. Yet years ago, its political and business leaders worried about its well-being because the offices alone where not taking the district where they wanted it to go. Today, the downtown is vibrant, well activated, with a slew of CSF venues and places such as a PAC that draws 200,000 people annually, The Morriston Green public space, about 100 eateries and watering holes that average over $1 million/yr in sales, and a very strong pamper niche adding much to its magnetism. It has just a few national retail chains, but many successful small boutiques. It is widely acknowledged that what turned this downtown around was not its offices or retail, but the 1,500 or so new residential units that were built between about 2000 and 2010, with more units added consistently since then. This pattern of new downtown housing sparking the development and growth of CSF venues is replicated in a growing number of affluent suburban downtowns across the nation. Cranford, NJ, for example, has built 366 Transit Oriented Development housing units since 2006 – see Figure 6 – boosting the vibrancy of Its CSF venues.  Out in the Midwest, take a  ride on a Metra train from downtown Chicago to Aurora and one finds town after town with lots of residential units near their rail stations.

An important lesson our large downtowns can learn from these successfully urbanized suburban downtowns is that strong, dominant CBFs are not required for a downtown to be strong and successful if it has strong CSFs!

Another important lesson is that housing near rail stations that are located in the downtown core may be a very sound idea. That would be in sharp contrast, for instance, with:

  • The current situation in Midtown Manhattan where the residential units within this downtown are  overwhelmingly at its edges and not its core
  • The State’s current  plan in NYC to raze the area around Penn Station between Sixth and Ninth Avenues from 30th to 34th Streets, and fill those properties with very large office buildings. (2)

Also, it may be a very sound idea for office spaces in our largest downtowns not to be part of any substantially sized office building cluster, but as parts of either clusters of mixed use buildings or mixed-use  clusters of buildings specializing in different functions. One way or another, however, it is essential that substantial housing be brought into the core office area. Happily, projects of this kind are happening. The rehabilitation of the 40 story Seneca One Tower in downtown Buffalo, NY is a great example of what such a mixed use building might contain. It combines 115 apartments, with office spaces, a food hall, a large gym and a craft brewery.(3)  In downtown Dallas the 50-story Thanksgiving Tower is undergoing a similar mixed-use transformation that will have a substantial number of residential units. In Lower Manhattan’s financial district, the conversion of One Wall Street from office to residential uses will provide over 500 units and be the largest such conversion in the city’s history.

The opportunities for such large conversions of existing office spaces may be relatively hard to find, but when they occur their impacts on a downtown can be substantial in terms of generating  non office worker foot traffic and the businesses to serve it. 

The problem with converting most large modern office buildings to residential uses is reportedly their large floor plates with most space distant from windows. So far, the mixed use conversions have the offices still occupying these large floors, while the conversion to housing occur on smaller and usually higher floors. One might wonder if some property owner might try a mixed use program on the larger floors, with spaces along the windowed perimeter taking on residential uses, and the remaining window-distant spaces retaining their office uses?

Affluent CSF Driven Suburban Downtowns Will Recover Quickly and Strongly from the Crisis

Morristown and many other wealthy suburban downtowns are also primed for recovery because they suffered far less from the Covid crisis than have their big city cousins:

  • They were much more dependent on residents than office workers or domestic and international tourists than most of our large downtowns
  • They have lots of new housing units within their downtown cores, often within a 10 minute walk of their commuter rail station.
  • Their restaurants and other CSF venues were and are bringing people downtown
  • Their pedestrian traffic returned much quicker than it has in our large downtowns
  • Any tourist flows, are overwhelmingly domestic, and are returning quickly.

In addition, the crisis has positively impacted on their  assets:

  • It has significantly increased the number of residents who work remotely and are now part of the downtown’s important daytime population. Conversations with several suburban downtown managers found that merchants definitely have noted their presence.
  • It has accelerated a trend that was already apparent prior to the crisis of Millennials in search of affordable housing and good schools moving from their region’s central city greater downtown areas to the suburbs. Unfortunately, this trend also has a downside – rising housing costs.

Metuchen, NJ is another downtown positioned for a quick recovery and demonstrates many of their characteristics. It started a major revitalization effort in 2016 and since then has seen about a $169 million invested in the downtown, with 397 new residential units being built. Many of these units are near the commuter rail station that has direct connections to New York, Newark, and Trenton.

Metuchen’s residents have high median household incomes $128,619 and 62.5% have a BA degree or higher.

Between March of 2020 and March 2021, 33 downtown businesses closed, while 38 opened. Interestingly, 55% of the new businesses were related to CSFs—they are already leading the way to recovery.  Here again, these downtowns provide a useful lesson for our larger downtowns.

ENDNOTES

1. See for example: Emily Badger and Quoctrung BuiJu. “The Downtown Office District Was Vulnerable Even Before Covid.” New York Times. July 7, 2021. https://www.nytimes.com/interactive/2021/07/07/upshot/downtown-office-vulnerable-even-before-covid.html

2. Justin Davidson. “Hochul’s Penn Station Plan Is the Worst Kind of Urban Renewal.” Curbed Jan. 26, 2022. https://www.curbed.com/2022/01/hochuls-penn-station-plan-is-bad-old-style-urban-renewal.html

3. C.J. Hughes. “SQUARE FEET: Buffalo’s ‘Other Story’ Is Told in Redevelopment and Growth.” New York Times. July 3,2022. https://www.nytimes.com/2022/07/03/business/buffalo-economy-shooting.html


 

A Search for a Clearer and More Useful Vocabulary for Talking About and Analyzing Downtowns

By N. David Milder

Over the past decade I have become increasingly focused on what I have been calling Central Social Districts (CSDs).  The simple analytical framework I’ve been developing saw downtowns being composed of two major components: Central Business Districts (CBDs) and CSDs. However, over the past year or so, email discussions with members of The ADRR board, and an interview by Rob Steuteville at CNU’s Public Square have prompted me to take a much closer look at the vocabulary we use to describe and analyze our downtowns. My objective in this article is to start a discussion of the topic. I don’t claim to have definitive answers, but certainly aspire to getting such a discussion off to a very good start.

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The “Unbonding” of a Growing Number of Creative Workers From Their Employers Can Impact Our Downtowns

By N. David Milder

Introduction

In recent months I have again confirmed my conclusion that remote work is here to stay, and that it will undoubtedly impact our large and suburban downtowns. In the past, I felt this was the case because:

  • So many more employees now have tried and liked remote work. They also have become much better at it
  • Major corporations are adapting their operations to it and investing substantial sums in equipment and programming to help assure its optimal performance. This is even happening in major companies whose CEOs were initially opposed to remote work
  • There is much wider acceptance of remote work. Importantly, those who engage in it are far less likely to be seen as slackers or second-class employees.

Recently, I have also come to see the critical importance of remote working being a response to needs other than those related to the pandemic. This is critically important because new or heightened trends will only persist past the crisis that impacts them if non-crisis related needs are there to sustain substantial future interest in them. That critical non-crisis related need for remote work, I would argue, is related to the “unbonding” of creatives working for corporations. Just as there are forces that bond together atoms, ions, or molecules to form chemical compounds, so there are forces that make creative employees bond or unbond to the companies that employ them. The pandemic has reinforced those that press toward unbonding. This unbonding may not mean the termination of the relationship between creative employees and their employers. However, it certainly does mean a change in it, and a loosening of the bonds between them so that the workers have much more control over their work and personal lives. Remote work allows the workers to have greater control while still maintaining a meaningful relationship with their employers. In turn, remote work allows employers to retain and attract desperately needed highly talented employees.

It increasingly looks like remote work will have serious negative impacts on our large office dependent downtowns, and potential positive impacts for many suburban and some rural regional commercial centers, i.e., those at the center of small metro areas. The time has come in the downtown revitalization field to look more seriously about how the negative impacts of remote work in our major downtowns can be offset, and how its positive impacts in the suburban and rural areas can best be leveraged.

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