Rob Steuteville, the editor of CNU’s journal Public Square, recently interviewed David Milder about his article in The ADRR, Strong Central Social Districts: The Keys to Vibrant Downtowns. The interview was published on the Public Square website in two parts, on August 17th and 23rd. David thanks Rob for his great questions that helped him explain more fully CSDs and their importance.
Save the date for: Bringing Back Downtown Retail After COVID-19
Across the nation in downtowns large and small, leaders and stakeholders are beginning to ask questions such as:
Where will retail be in downtowns like ours as we recover from this very stressful crisis?
What are the best opportunities for regaining, and possibly increasing, the strength of our downtown’s retailing?
What strategies, projects, and programs can help us achieve those potentials?
To address these critical questions, the American Downtown Revitalization Review- The ADRR – is partnering with the University of Wisconsin Madison – Extension to present an online panel discussion on Bringing Back Downtown Retail After Covid19 on:
Wednesday.
October 6, 2021,
at 12:30 pm CST.
The focus will be on downtowns and Main Street districts in communities under 75,000 in population. The webinar is part of Extension’s Learning from the Experts series. The panel will include three nationally known experts: Michael J. Berne of MJB Consulting, Kristen Fish-Peterson of Redevelopment Resources, and N. David Milder of DANTH, Inc. Bill Ryan of UW Madison-Extension will moderate the session. Stay tuned for details about signing up for the Zoom link needed to attend.
No, We Are Not Facing a Restaurant or Retail Industry Apocalypse
By N. David Milder
An Introductory Overview.
While the economic impacts of Covid19 are culling the weaker firms in the industries that frequently occupy downtown storefronts, and permanent closure rates are probably higher than those during the Great Recession, they are not anywhere near reaching the apocalyptic levels that would involve the effective decimation of these industries and impair their recoveries. Claims of industry apocalypses seem to be the rage in recent years starting with retail before the crisis. Since Covid19’s appearance the restaurant, personal services, and arts industries have also been seen in that light – often by industry leaders who are desperate to gain public attention and win strong government financial support for their member firms.
Many of the reported closures did not reflect economic failure, but legal necessity, and these operations reopen quickly when allowed by local regulations. A more accurate view of the situation should be based on the fact, as established by a research team from the Federal Reserve, that business deaths are a normal occurrence with about 7.5 percent of firms and 8.5 percent of establishments exiting annually in recent years.[1] They also noted that small firms account for most of these closures. The team also found that “temporary business closure is common, affecting about 2 percent of establishments per quarter.” Covid19, as many crises do, has accelerated the processes of creative destruction that were already taking root in these industries prior to this crisis. Even if the permanent closure rates prove to be relatively higher than those produced by the Great Recession, there is no evidence that they will be so strong that they will prevent vibrant recoveries.
[1] Crane, Leland D., Ryan A. Decker, Aaron Flaaen, Adrian Hamins-Puertolas, and Christopher Kurz (2021). “Business Exit During the COVID-19 Pandemic: NonTraditional Measures in Historical Context,” Finance and Economics Discussion Series 2020-089r1. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2020.089r1.
Over recent months I’ve been getting a sense that some suburban downtowns may well make relatively strong recoveries from our current virus induced economic crisis, and relatively speaking, stronger even than those of our superstar downtowns. This also prompted me to think that the current and potential strengths of some of these suburban downtowns are too often underestimated and overlooked. I’m venturing to presume that others may also find these thoughts of interest and they are presented below. Please, let me know what you think about them.
Suburban Downtowns Are Different and Often Surprisingly Strong
Last year Bill Ryan and I did some research on dataset covering all of the 259 downtowns in cities in the 25,000 to 75,000 population range in seven Midwestern states. Our findings will appear in an article in the Winter 2020 issue of the Economic Development Journal, titled Living and Working Downtown: Is It a Population Growth Engine for Small Cities? Included in the dataset were 167 suburbs that usually are parts of relatively large metropolitan areas in which much larger cities are the cores, and 92 independent cities that are themselves the cores of a smaller metropolitan or micropolitan area. We were struck by how different these two types of downtowns are in many important respects. For instance:
Though less multi-functional, the suburban downtowns averaged about the same number of residents 3,089, as the independent downtowns, 3,294.
However, suburban downtowns had a higher population growth rate, 5% to 0.23%, and a lot fewer had declining populations, 31% versus 46%
Moreover, the suburban downtowns scored much lower on our two measures of live-workers in their downtowns, between 3.1% and 8.7%, than the independents, 12% to 29%. Additionally, such low levels even were present in the suburbs that had attracted relatively large numbers of office workers to other parts of their city, such as Dublin, OH, with 42,200+ in 2017
One factor that helps explain the greater strength of the suburban downtowns is that they are very probably located in metro areas with significantly stronger economies than the smaller metros the independent cities are anchoring.
A trend that helps to explain the low live-work numbers in suburban downtowns is that most suburban residents are not drawn to the type of dense housing units their downtowns tend to offer. National surveys for many years now have continued to show that about half of the adult population prefers living in the suburbs and that the vast majority of people who live in the suburbs want to be there. (See the table above.) That strongly implies that they prefer the urban lifestyle that includes single family homes, lower population densities, a slower pace of life, significant car use, and an environment that is predominantly “green” rather than concrete and asphalt.
Moreover, when these suburbs do attract offices they tend to be located in office park-like developments, within about a 5-minute drive of, but not in their downtowns.
The Importance of CSD Functions in Suburban Downtowns
Our findings also had some strong potential implications for a far broader range of downtowns:
Suburban downtown residential populations are not driven by the presence of downtown jobs, as some experts believe is the case with our large and superstar downtowns.
Consequently, they must be driven by other factors. Since the downtown populations of the suburbs and independents are so close, these other factors are probably as strong or stronger than downtown employment is in non-suburban downtowns. These other factors certainly are not weak, and they also could be present in non-suburban downtowns, too.
A very probable strong factor are the suburban downtowns’ Central Social District (CSD) assets: its housing, restaurants, bars, parks, athletic fields, public spaces, cinemas and theaters, libraries, art galleries, maker spaces, farmers markets, community centers, houses of worship, childcare and senior centers. Indeed, it can be reasonably argued that the suburban downtowns that have been successful in terms of popularity, use and investment have done so largely because of the strength of their CSD functions.
Housing is a very important CSD function. Two advantages suburban downtown housing may have are the likely greater comparative affordability of its costs and the convenience of it locations. In struggling downtowns units may be affordable because they are in poor condition and can only command cheap rents. In more successful downtowns, it may be that apartment rents/costs are cheaper than renting/owning an apartment in the region’s core city, or living in a suburban single family house (e.g., empty nesters), and/or because the apartment is occupied by several people who share the rent payments (young adults).
Units close to mass transit will probably be convenient for those who commute by rail or bus to large employment centers elsewhere in the region. Indeed, in these suburban districts, the commuters who live in TOD residential developments may be the equivalents, in terms of economic impacts, of the live-workers found in and near the cores of our largest downtowns. However, according to one report, NJ Transit has found that only 12.5% to 25% of the residents in the TOD projects developed around its stations are NJT commuters.1
These downtown residents can bring in substantial purchasing power. For example, it was estimated that, around 2010, the roughly 1,500 new occupied residential units in downtown Morristown, NJ, would bring in about $72 million in potential retail spending power. 2
Undeniably, when the CSD assets of a suburban downtown are strong, the district is highly urban in character, and more analogous to a strong big city neighborhood commercial district, such as Williamsburg in Brooklyn, or Forest Hills in Queens, than to a sizeable rural town. We might characterize these districts as “urbanized suburban downtowns.”
Typically, suburban downtowns have a Greater Downtown area that includes the downtown and nearby areas from which people can conveniently get to and from the downtown core , some on foot, but most by car. Sorry, folks, but we are talking about the suburbs here. That may be changing in the near future as AV vans and greater use of e-scooters and bikes come more into play.
The non-district portion of the Greater Downtown area can have relatively significant population and workforce densities and be the source of a lot of the customer traffic of downtown merchants. These users also can strongly influence the image of the downtown.
Unfortunately, there is no study of urbanized suburban downtowns. Some districts that I would include in that category are in Wellesley, MA; Englewood, NJ; Morristown, NJ; Cranford, NJ; Westfield, NJ; and Cranford, NJ.
Some have had strong GAFO retail, though that has weakened substantially with the upheavals in the retail industry over the past decade and the Covid crisis. Some have a lot of office workers located nearby in their town who are important lunchtime customers. Some have PACs, theaters and/or cinemas. All are walkable and have lots of eateries, coffee shops, and drinking places. All are surrounded by residential populations with high percentages of creatives – some also have large numbers of creatives working within or very near the town.
This suggests that non-suburban downtowns can also flourish by strengthening their CSD assets.
Suburban Creatives
For many creatives, these urbanized suburban downtowns may be extremely attractive, especially if they either: 1) prefer the suburban lifestyle when it comes to single family housing and green spaces, yet still enjoy urban type entertainment venues such as good restaurants and cultural events, or 2) they are nesting and need affordable and relatively spacious residential units, while also appreciating many aspects of urban entertainment and leisure time activities. The fact that these suburbs often have excellent public school systems also makes them attractive to core city nesting creatives who are looking for a more affordable place to live. In NYC, for example, the private elementary school average cost per student is $13,000 per year and for private high schools the average is $25,267 per year. With taxes, parents will probably need double that amount of their income to cover those costs.
My prior research on 14 counties in Northern NJ that are suburbs of NYC or Philadelphia – see the above table — certainly suggests that in 2010 very substantial numbers of creatives lived, worked or even possibly live-worked in these communities. Interestingly, the median of the percentage of their workforces that were creatives was 31%, but the median of the residential adult population in the labor force who were creatives was 40.3%. See above table. In Somerset and Hunterdon Counties over 50% of the residents in the labor force were creatives. So these suburban counties of superstar cities/downtowns probably have been recruiting lots of creative residents for decades. The size and economic power of these suburban creatives often seems to be overlooked because so much attention is focused on the young creatives being attracted to hip urban neighborhoods of the superstar cities.
Some downtowns in these high creatives counties have tried to attract more creatives to spark economic growth, while what they probably needed to do was to better leverage the numerous creatives they already had! Far too little attention has been paid to these suburban creatives.
The downtowns in these counties did not have anywhere near the number of apartments or condo units needed to house all of these creatives, so it seems reasonable to deduce that most were living in the single family type homes the suburbs are famous for. It also seems reasonable to deduce that the vast majority of these creatives probably were living there because they liked the lifestyles these suburbs support. In turn, this seems to counter the blindered visions of where creatives want to live that only focus on hip urban neighborhoods. Furthermore, it also counters visions that just focus on the young creatives who may indeed have a significant tendency to live in the hip urban neighborhoods, by showing lots of probably older creatives, who have probably nested, prefer suburban or rural residential areas.
Some Downtowns Will Be Better Positioned to Recover Economically Than Others
There already is plenty of evidence that points to the imputation that suburban downtowns, especially those that are urbanized, will be much better positioned to have a successful economic recovery than others. There are also a number of steps their leaders can take that will further solidify their strong recovery positions.
Tourists. Most suburban downtowns, especially those that have been urbanized, are unlikely to be heavily dependent on tourist customer traffic/expenditures as are the downtowns in our large cities such NYC, Washington, D.C., San Francisco, etc., or in rural towns where tourism is the main economic engine. In those areas the collapse of their tourist markets have had large negative impacts.
Moreover, the resurgence of tourism will be hampered by other factors besides the pandemic’s impacts. International politics is one. For example, It probably will be very hard for our major downtowns to regain the strong flows of big spending Chinese tourists they once had. Even under an optimistic scenario, it very probably will take a few years for tourism to return to prior levels in these downtowns.
Office Workers. Merchants in our big city downtowns have also been clobbered by the disappearance of their office workers. In many of them only abut 20% to 30% are now showing up. Moreover the growing adoption of remote work probably means that the number of office workers employed in our largest downtowns probably will decrease by 16% to 22% after the crisis. 3 In contrast, in the suburbs – e.g., Morristown, NJ, Dublin OH, Garden City, NY – that have attracted large numbers of jobs, office worker presence has remained substantially higher through the crisis than in central cities, and they are also more likely to fully recover more quickly. The suburban office workers do not have to use public transportation to commute to work. Consequently, these suburban towns are unlikely to be hurt as much by remote working or to experience their office jobs being decanted to less populated, and less public transit dependent areas as may happen in our large cities. To the contrary, some suburbs may be substantial recipients of such workforce decanting and the growth in remote working. Their downtowns will benefit from this.
Foot Traffic. It should not be surprising then to find that while in many large downtowns foot traffic has fallen by roughly 60% – 70% since 2019, it has been substantially less in their suburbs. See chart nearby.4 Foot traffic is critical to the health of any downtown. The suburbs may not need to recover as much as the center cities on this key variable.
Downtown Small Merchants. Truth be told, small merchants have been a disappearing breed in big city downtowns well before Covid19 appeared. At best they have retreated from the major commercial corridors to sidestreets. A number of factors were involved such as: unaffordable rents; associated real estate bubbles and consequent landlord needs for high paying tenants; new landlords who knew nothing about managing retail properties, and redevelopment that forced closures and relocations. In contrast, small merchants remain the primary occupants of the storefronts in most suburban downtowns, though vacancy rates have continued to creep up for many years now, and non-retail uses continue to increase.
While there has not been any rigorous systematic study, a review of many reports on the internet suggests that merchants who are more dependent on residential markets and less on tourists and office workers were doing significantly better than those who were focused on tourists. Many of our largest downtowns have relatively few residential units within their boundaries, but a whole lot within a Greater Downtown area that includes nearby neighborhoods from which residents can easily and quickly get to the downtown core. That would suggest that merchants in suburban downtowns, especially those with substantial new market rate housing, will not be among those hardest hit. Of course, that does not mean that they are not being hurt or stressed, but it may indicate that it will be relatively easier for them to survive and recover.
Downtown Retail Chains.
Superstar Downtowns, In these districts retailers have long paid extremely high rents for premier retail locations. However, in recent years, real estate bubbles and high rents have resulted in high “availability rates, ” with 20% or more not being unusual. The above table details such a situation in Manhattan in Q2 of 2019. Most of those locations have been very dependent on tapping office worker and tourist shoppers and their ability to again earn meaningful profits probably awaits the return of those shoppers at some still unknown time in the future. The prior high availability rate suggests problems that the Covid19 crisis can only have exacerbated.
Many of these retailers are in the luxury market and BCG recently estimated strong declines in luxury retail sales for 2020 and 2021, with a recovery appearing in 2022, BCG also found that many more shoppers are now trading down than trading up.5 Moreover, online sales of luxury merchandise has been growing significantly.
Many observers expect a new equilibrium between retailer and landlord needs will be reached in the coming years. However, until then retail in these big downtowns may be somewhat unstable. While the landlords of the luxury retailers may continue to claim that all is well, 20% availability rates and the disappearance of key market segments are strong visible evidence that those assertions are not true.
Retail Chains Resurging Post Crisis in Suburban Downtowns. The claim has been made that the closure of many malls and chains will set free so much market share that retail chains and small independent retailers located in suburban downtowns will grow and prosper as the current crisis ebbs. There is probably some merit to this claim – but not much.
Most suburban downtowns have not attracted large numbers of GAFO retail chains, though they often do quite well with those selling necessities such as groceries, convenience goods, and medicines. That is not likely to change in the future because these districts lacked and will continue to lack the required locational assets. Few have the auto traffic that passed near the malls. If retail chains do return to the suburbs, standalone locations abutting high traffic roads on the periphery of these towns may very likely be preferred to those in their downtowns. However, some in wealthier market areas – e.g., Westfield and Englewood in NJ, Wellesley in MA — have in the past attracted lots of GAFO chains, and they often were like open air lifestyle mall downtowns. Even then, though, while the number of retail chains present in these districts was often impressive, according to information confidentially provided by one well known national brokerage firm, their profits per store usually ranked relatively low within their chains. They were thus among the most prone to be closed if their chain got into financial trouble. So unsurprisingly their strength and numbers were eroded by the Great Recession, new competitors appearing both online and from strengthened malls, the retail chains’ corporate weaknesses being magnified by the process of creative destruction occurring in the retail industry, and the negative economic impacts of Covid19. For example since 2009, one of these retail chain rich suburban downtowns has lost the following chains: Esprit, Coach, Chico’s, Ann Taylor, Lucky Brand, White House-Black Market, Janis & Jack, Papyrus, Aerosoles, Victoria’s Secret, Eileen Fisher, Coldwater Creek, Kiels, Omaha Steaks, and Game Stop.
For many years the trophy retailers downtown leaders wanted to attract were largely in the apparel sector, e.g., The Gap, Chico’s, Talbert’s, Ann Taylor, Victoria’s Secret. Today, that sector is in disarray – even some off-pricers, like Stein Mart, that had been seen as well positioned, have fallen.
The argument for the supposed market share being yielded by closing malls and retail chains being captured by retailers in suburban downtowns has a number of problems analytically:
The demand for some kinds of merchandise has been in long decline, e.g., for apparel. This has been influenced by the trend toward informal workplace attire that has been strongly reinforced by the current crisis, and the growth in remote working. It also has been impacted by consumers wanting to spend more for interesting and rewarding experiences than for things.
More than ever, retail chains are looking for low risk locations. These locations tend to be in areas where there are significant numbers of fairly affluent shoppers or very large numbers of easily accessible shoppers with more modest incomes. About 20% of our malls were doing well prior to the crisis, and they tend to capture these affluent shoppers. Walmart, Target, Costco, Best Buy, et al are prospering even during the crisis from their growing proficiency with omnichannel marketing strategies. They are attracting the mid-market shoppers. These malls and big boxes are formidable competitors and probably are sopping up lots of any market share the folded malls and retail chains yielded.
E-retail was growing impressively before the Covid19 economic crisis, but its growth has accelerated substantially during the crisis, and strong evidence suggests these high e-sales levels will not diminish all that much as the economy improves. E-commerce definitely has and will capture substantial portions of any market share that folding malls and chains might yield.
There seems to be fundamental weaknesses with the business model used by retail chains, especially when they are taken over by hedge funds and the like. Bean counters seldom are good merchants, much less great ones!
Internet born retailers may look for spaces in suburban downtowns, but their behavior to date indicates they will look for locations in higher income market areas with strong customer flows. For example, Warby Parker now is located in downtown Hoboken and downtown Westfield in NJ. They are unlikely to flood our suburban downtowns.
The failed malls and chains probably will yield a relatively small amount of market share that downtown retailers might capture. Small downtown merchants are much more likely to benefit from that yielded market share simply because they need much lower sales revenues to survive. That said, these small merchants still better have other market segments to tap.
There is little reason to believe that our recovery from this crisis will somehow coincide with the resurging strength of our specialty retail chains. Because of their high rents, landlords in our large downtowns will probability continue to seek retail chain tenants, or shift to other users who can pay those rents. Consequently, the large downtowns will continue to feel the impacts of the process of creative destruction that the retail industry still is in. On the other hand, relatively few suburban downtowns had many GAFO retail chains, and their numbers were substantially reduced even before the Covid19 crisis. Consequently, they neither benefit a lot from the presence of these retail chains, nor are they very vulnerable to the substantial vicissitudes that these chains may continue to face.
The Costs and Availability of Space. The ability of small merchants to recover and for startups to succeed will be significantly influenced by the availability and costs of their storefront spaces. While deflated rents and increased availability can be expected in both suburban and center city districts, the suburban rents long have been significantly lower and probably will remain so in a relative fashion well into the future. This fact, combined with the greater stability of their potential consumer market segments, probably will give the suburban merchants a greater chance of achieving a sound recovery, or a startup succeeding, than their center city peers might have.
Rent costs are particularly important for restaurant operations.
Remote Working.
The suburbs are also likely to benefit significantly from the shift to remote working:
Their numerous creative residents are likely to be in occupations prone to remote working.
Remote workers are likely to favor downtowns with strong CSD assets as they seek relief from the social isolation of their home offices, and they often also require business services and supplies.
Suburban communities are likely to have more relatively affordable housing, with more space per rental dollar than their regions’ center cities. This may attract many remote workers who are residents of the regions core cities. However, the affordability advantage might be blunted by rent deflation in the core city. For example, reports indicate that rents in Manhattan below 96th Street have already fallen by 20% to 30%.
Also recent research has shown that significant economic growth based on quality of life assets and the attraction of remote workers can lead to rising housing costs even in rural areas.
What will not be blunted, however, are the large numbers of people who prefer living in the suburbs, and they often include commensurately significant numbers of creatives, the group most prone to becoming remote workers.
It is fairly probable jobs will be decanted by a significant number of corporations from their prime big city locations to less expensive, auto accessible suburban satellite locations. Such office facilities will have cheaper rents than those in the core city downtowns, and provide corporate tenants places where their remote workers can come to get the social interactions they need to help their productivity, creativity and career advancement.
Recovering CSD Functions.
Many CSD venues have been hit very hard by the pandemic’s economic adversities. Almost all performance and exhibition venues have been closed or their public access severely limited. Many pamper niche operations closed permanently or shifted to operating online. Yet many of these operations, when allowed by local governments, have reopened on a limited basis, and the characteristics of some suggest that they will recover along with the local economy.
Two characteristics will determine those that will recover quicker and stronger and those that will not: if they are for profit operations and if they are large.
Small Arts Organizations. About 40% of the arts nonprofits are usually in the red financially, and mortally threatened by strong economic recessions and economic crises such as the present one. 6 Their business model is so dependent on contributions from numerous sources that their financial recoveries are seldom easy. So downtowns of all sizes are likely to have to wait quite a while for these smaller arts organizations to recover and contribute to their vitality.
Pamper Niches. In contrast, many of the pamper niche operations are for profits and relatively small – hair and nail salons, Pilates and yoga studios, dance schools, martial arts, studios, spas and gyms. They have relatively very low start up and operating costs, and little need to keep large inventories of goods on hand. While many were quick to close during an economic crisis, they are also relatively easy to restart or start anew as the economy improves. They are also the types of operations that often occupy large numbers of downtown storefronts, especially in the suburbs. Indeed, in many of our suburban downtowns there have long been complaints that these pamper niche operations were crowding out retail tenants because they could pay the higher rents landlords were looking for that small retailers found unaffordable.
Restaurants. Some of the most important CSD venues for all downtowns are their restaurants and bars. From early on in the crisis, there have been dire predictions of calamitous levels of restaurant failures – one foresaw the prospect of 85% of our eateries failing.7 These claims seemed to be supported by prior research showing that the average small restaurant only had enough cash on hand to cover their expenses for so few day, 16, that they were unlikely to stay open if they faced a major economic crisis – see table below. Months later, well into the current crisis, the Census Bureau’s Pulse surveys of small businesses have had consistently similar findings.8 One might have thought that by then their numbers would have declined as many went out of business. National survey data seems to indicate that about 20% of our restaurants may have closed do far.
The Center City district in Philadelphia recently published very interesting and well researched counter findings about restaurant closures.9 Well into the crisis, their survey found that only about 5% of their 1,078 restaurants had closed permanently, with another 19% closed temporarily. Just 19% were deemed fully opened and have indoor dining. Perhaps most interesting are the 600 restaurants (about 55%) that are classified as partially opened because they have outdoor dining, or only do take outs and deliveries.
My observations in the solidly middle income neighborhoods close to my home here in Queens, NY, also found a surprisingly low number of permanent restaurant closures. My communications with some suburban downtown managers yielded similar observations. The only reports of numerous closures I’ve found were about the eateries in the Midtown Manhattan CBD that are so dependent on tourist and office worker customers. The City’s Comptroller just issued a report that “found that more than 2,800 small businesses had permanently closed between March 1 and July 10, including at least 1,289 restaurants.” That would mean that about 5% of NYC’s restaurants closed, on par with the Center City findings.10
The fascinating question is: How are so many restaurants surviving so long when they never seem to have enough cash on hand to do so? CARES or other government program dollars? Owners not taking any salary? Dipping into their 401ks? Tapping extended family resources? Landlord forbearance? Public donations via gift cards, crowdfunding, etc.? The Center City research findings suggest a possible viable explanation: many are in some stage of operational hibernation – e.g., the 19% that are temporally closed and the 55% who are partially opened. Their reduced operational metabolism rates translate into a reduced need for cash. In turn, that means that the cash they have on hand can cover more days of operation. It also may mean that financial tools that are well within the restaurant owners control – such as dipping into 401ks, using credit cards, tapping family resources, etc. – can get many through the survival phase of this crisis if they hibernate. That also would mean that they are making substantial personal and family sacrifices in the hope that they again will earn meaningful annual incomes as they emerge from hibernation during the economy recovery.
If recovery means that these restauranteurs have to come out of hibernation and compete to again win adequate annual incomes, then it may prove to be a time period as, or even more, arduous than was the survival phase of the crisis. More restaurants may close because they will need to earn a lot more money to thrive than they did to survive, while they may have depleted the financial resources that helped them to survive thus far. Local market conditions will probably play a very important role in determining those eateries that will survive and those that will fail.
Households in the top income quintile (above $109,743 in 2017) accounted for about 38% of all the consumer spending for food away from home; those in the top two quintiles (above $66,898 in 2017) accounted about 61% of those expenditures. See table above. Moreover, so far into the crisis, employment in households with incomes above $60,000 has been far more secure than for those with lower incomes. Downtown restaurants able to easily tap affluent residential customers are more likely to survive the recovery than those that are not. The urbanized suburban downtowns tend to be in rather affluent market areas: in 2016, I estimated the annual household income at $188,000 for downtown Wellesley, MA; $131,000 for downtown Englewood, NJ; $152,000 for downtown Westfield, NJ, and $165,000 for downtown, Morristown, NJ. That will help their restaurants recover relatively quickly and substantially.
Let’s compare the prospects during the recovery phase of this crisis for restaurants in our superstar downtowns with those in our urbanized suburban downtowns:
Markets: The superstars must wait for the return of two very large market segments, office workers and tourists. Their residential markets may not be all that strong. Financially, that means many may have to wait quite a bit of time for their revenues and profits to return to the levels their owners were sacrificing to stay in business for. Their potential residential customers live mostly in nearby neighborhoods that are likely to have their own restaurants that are much closer to them. In contrast, the suburban downtown eateries rely mainly on the residential market segment that has never gone away and that savvy operators have been serving with takeouts, deliveries, and curbside deliveries during the crisis. These suburban eateries may also have office workers who are still present in the town in significant numbers, and others returning at a rapid rate as the virus’s impacts subside because of their reliance on autos to commute. New remote workers and newly decanted office installations may add significantly to their numbers. The suburbs’ consumer markets will start strong and may get even stronger. The superstars’ markets will start off very uncertain and require an unclear length of time to reach an iffy level of recovery. For example, though their office workerforces eventually may return, they’re very likely to be, at best, about 16% smaller in number.
Most arts tourists (tourists who attend arts events) visiting our large cities are not big spenders. A study of 21 study regions with populations over one million by Americans for the Arts that included the cities of San Jose, Dallas, San Diego, San Antonio, Phoenix, Philadelphia, Miami—Dade and Chicago found that, in 2016, the average arts tourist spent about $51.41 a day. See the table above. About 31% of that went for meals and drinks, averaging $16.05. Another $6.57 went for refreshments and snacks. While there certainly are significant numbers of wealthy arts tourists and they are likely to be among those who resume visiting our superstar downtowns fairly early, they will tend to go to the higher priced eateries. The less expensive eateries in these downtowns are less likely to see their tourist patrons return as quickly or as robustly. Their recovery is likely to be weaker and slower
Rents. During normal times, the lower commercial rents in suburban downtowns may have been equivalent to those in the superstar districts when the number of potential diners and their spending power are considered. Today, with the superstars’ disappeared market segments, increased risk, and uncertain rent deflation, suburban commercial rents look like a much better buy for all businesses, especially restaurants that are so rent sensitive.
Performing Arts Venues, Museums and Galleries. One might assume that the superstars are far richer in major arts, cultural and entertainment venues than the suburban downtowns, and that will help them to be better at attracting people back to their districts. In turn, that would enable them to better support local merchants. A closer look, however, reveals that their advantages may not be as strong as many might assume.
For example, superstar CBDs often have surprisingly few of these venues. In Midtown Manhattan, there are only two important museums, MoMA and the Morgan Library & Museum. The Metropolitan Museum, Whitney, Frick, Guggenheim, Neue Galerie, New Museum, Folk Art Museum, and many others are not. The major area for art galleries was in Soho, but is now in Chelsea and other parts of Manhattan. In Cleveland, the prestigious Cleveland Museum and Severance Hall, home to the Cleveland Symphony, are located about five miles from the heart of the downtown. It’s theater district, Playhouse Square, is about one mile away. Similarly, in Philadelphia, the Museum of Art, the Barnes and the Rodin Museum are outside the downtown district. MOCA and The Broad are In downtown LA, but LACMA. Hammer, Norton Simon, Annenberg, Huntington Library and Getty Center are not. Still, many of these superstar downtown museums are themselves superstars and that means that they are very dependent on tourists for visitation. For example, about 75% of MoMA’s visitors are tourists. See table above. Their full recovery and ability to activate the downtown will probably await the return of the tourists.
Strong art museums are seldom found in suburban downtowns, so how strongly these districts are activated is not dependent upon them, or their recoveries, or the return of lots of tourists.
Theater clusters are certainly to be found In some of these large downtowns such as Manhattan and Houston, as are performing arts venues such as Carnegie Hall and Madison Square Garden in Manhattan, the Kimmel Center for the Performing Arts in Center City Philadelphia, and the Music Center in downtown LA. However, in Manhattan, the Lincoln Center for the Performing Arts is located close to, but beyond the Midtown CBD. These venues are often considered world class, and that usually means that they, too, are heavily dependent on tourist ticket buyers. About 66% of the attendance of Broadway’s theaters are tourists, as is about 46% of Lincoln Center’s. Some observers claim that tourists will return once these venues open. However, getting Broadway shows ready to open will take time as will the scheduling and staging of other performing arts events. The Broadway League, for example, is now talking about reopenings starting around June 2021, but how long it will take to achieve a full recovery is still unknown.
These performing arts venues have another characteristic that poses serious problems for the downtowns and neighborhoods in which they are located. For very substantial parts of many days they are dead and inert, only coming alive outside for relatively brief moments before and after performances that occur usually during the evenings and a few afternoons. When inert, they diminish from, instead of contributing to, the sense of activation and pedestrian friendliness of the sidewalks they abut.
A number of these urbanized suburban downtowns do have sizeable performing arts venues, though most do not. In NJ, for example, The Count Basie Theater in Red Bank was the attendance leader among the state’s theaters in 2016 and 2017 selling 235,000 tickets. It has a budget of around $17,000,000.11 The Mayo Performing Arts Center in Morristown, NJ, has an annual attendance of about 200,000 and an annual budget of about $8, 000,000. It is a major component of the downtown’s strong and broadly defined entertainment niche that also includes a six-screen movie theater and eateries and bars that have annual sales above $100 million. The Bergen County PAC also has attendance in excess of 200,000 and an annual budget of about $10,000,000. These performing arts organizations have significant budget, and their audiences are not heavily dependent on tourists. Similar performing arts venues located in less affluent suburban markets have budgets well under $2,000,000 and lower attendance. The larger the budget, the more likely these performing arts organizations will survive through this crisis and recover. Once social distancing precautions are lifted, their primarily regional audiences, often from affluent households with members in creative occupations, can be expected to quickly return as their productions are presented. However, many of the weaker suburban performing arts organizations may struggle to recover or fall to the wayside—as will be the case pretty much everywhere.
Some Challenges and Opportunities Suburban Downtowns Will Likely Face
Downtown Cinemas Are Again In Danger. DANTH, Inc has been following the plight of downtown movie theaters for about 15 years. During that time streaming via cable or online was a persistent and slow growing threat to our traditional brick and mortar movie theaters. By releasing movies electronically either before or simultaneously with the theater releases the potential audiences of the theaters are substantially diminished. The Covid19 crisis has shut down movie theaters either completely or substantially. Streaming has grown enormously in utility, attraction and supporters among producers, and there is general agreement in the trades that it will be much more important in the future, and there is no going back. It’s a very cheap and efficient distribution channel that is unconstrained by the need for social isolation. Warner Bros. just announced that it will release all of its 2021 films on HBO Max at the same time that they open in theaters. Other studios are expected to soon follow.12
This Problem Is Especially Dire for Many Suburban Downtowns. How many movie theaters and theater chains will survive the crisis is a question of considerable interest to all types of downtowns, but much more important for those in the suburbs. For many, their movie theaters are their strongest arts/entertainment draw, especially after dark. Moreover, they invariably occupy strategically important locations in buildings that often are difficult to convert to other uses. Also, movie houses are among the most reasonably priced of all entertainment venues, and they have rather few user frictions compared to going to a sports event, concert or stage play.
Streaming may mean that it will be much more difficult for operators to make sufficient profits to recover from the crisis and stay in business long term. However, during the digital projection conversion crisis of a few years ago, many towns used community owned businesses to step in and save their cinemas. Suburban downtown leaders soon may find that tool can be used to save theirs’s, too. Moreover, a whole toolbox of tools to capture community value is emerging that also can be used. The leaders of these suburban downtowns should prepare for such a contingency since quick action is often needed to save these cinemas.
Unrealized Potential to Develop Strong and Well – Activated Public Spaces. By and large suburban downtowns lack popular, well-used downtown public spaces. Within their communities, the parks are generally located elsewhere. Additionally, even when they do have a physical public space downtown they are usually badly under-utilized, mainly purposed as adornments, ceremonial venues, and weakly scheduled event spaces. Where the missing vibrant public spaces are most surprising is in the urbanized suburban downtowns that have so many potential eager users and operations such as loads of strong eateries that mesh well with them.
In the past, this was just a missed opportunity, but with the need of these downtowns to have strong attractions that can again draw lots of people downtown, they well may be a savvy strategic move, or even a necessity. This need will also be reinforced if the local cinema weakens or closes.
The crisis induced closed streets and parklets can also provide these suburban downtowns a way of creating quickly and cheaply some needed spaces. Given that the sidewalks in many of these districts are fairly narrow, such projects can have a variety of immediate benefits. Still, the formula behind strong public spaces such Bryant Park can be distilled to scale to the smaller sizes and different characteristics of the urbanized suburban downtowns. A good place to start doing this is Andy Manshel’s new book Learning From Bryant Park.13 Here are a few things that interested downtown leaders might consider:
Location really matters. A public space on the periphery will have far fewer users and far weaker positive impacts on its surrounding properties and their uses.
How the space is programmed will have a far greater impact than how it is physically designed or how pretty it was meant to be. This is a major point that Andy strongly argues for.
Simple things really matter: as Holly White pointed out, if you want people to stay, they will need places to sit. Shade also counts. Andy stresses in his book that you don’t have to spend big bucks to succeed.
With programming, test things out and if they don’t work well, learn what went wrong, then either fix them, or do something better. Also, iterate, keep refreshing an improving the programming you have.
Just don’t think about events. Think also about how people-watching can be facilitated and enhanced. Public spaces can proved opportunities for people to do things, to let them become the space’s performers such as chess tables, boules courts, ping pong tables, reading rooms, ice skating rinks, carousels, swings, climbing rocks, etc.
Bottomlines
Urbanized suburban downtowns, with strong CSD functions, that are able to draw upon large numbers of creative class households, have growing numbers of remote workers, and maintain steady consumer market segments are well positioned to experience relatively strong economic recoveries from the Covid19 induced economic crisis. They can do even better if they take steps to protect their movie theaters and develop vibrant public spaces.
It’s about time that academics and economic development professionals realize that suburban downtowns do not grow or function in the same ways that our urban districts do. The suburban districts depend far, far less on being employment centers and more on being the central place for people to meet, enjoy themselves, help each other, buy necessities, and sometimes to buy non-necessities. Daytime workforces may be very important customers for district merchants, but their workplaces are far more often than not located beyond the district’s borders, and sometimes even in other towns. Their downtown housing is not driven strongly by live-workers, yet it can provide a very important in-close user/shopper base. Most of their shoppers also get to the downtown by car, and will continue to do so until AV shuttles and micro mobility vehicles provide viable alternatives.
ENDNOTES
1) Source: John Shapiro, formerly of Phillips Preiss Shapiro Associates, based on interviews with New Jersey Transit officials while working on multiple TOD projects in northern NJ, including for NJT.
3) N. David Milder. Remote work: An example of how to identify a downtown-related trend breeze that probably will outlast the COVID-19 crisis. Journal of Urban Regeneration and Renewal Vol. 14, 2, 1–20. Forthcoming.
4) The chart is from: Michael Sasso and Andre Tartar. U.S. Downtowns Yearn for Vaccines as Merchant Traffic Off 79%. https://www.bloomberg.com/news/articles/2020-12-03/u-s-downtowns-yearn-for-vaccine-as-merchant-traffic-falls-70?sref=mHw3n8zP
5) Christine Barton. BCG LUXURY PERSPECTIVE. Luxury First Look 2021| Where are we headed? September 2020. Presented at the Future of Luxury Conference, September 23-24, 2020, convened by Luxury Daily.
Contact: N. David Milder, Editor The ADRR — The American Downtown Revitalization Review 718-805-9507 [email protected]
THE CREATION OF THE AMERICAN DOWNTOWN REVITALIZATION REVIEW (THE ADRR)
There currently is no real professional journal for the downtown revitalization field. For many years, that has been strongly lamented by many of the field’s best thinkers. To remedy that situation, a band of accomplished downtown revitalization professionals are creating The ADRR. It will be a free online publication, appearing four times each year. The target date for the debut issue is now set for the June 1-15, 2020 timeframe, with the second issue aimed for the Sept 7-14, 2020 timeframe.
This ADRR is intended to be a lean and mean operation, based totally on the availability of free online resources and the time, energy and elan contributed by its authors, advisory and editorial board members, and its editor.
How to Subscribe to The ADRR
Those interested can now visit The ADRR’s website, www.theadrr.com , where, on the home page, they can sign up to become subscribers. This enrollment places the subscriber on a MailChimp mailing list so that they can receive New Issue Alerts (see below).
How Issues of The ADRR Will Be Distributed.
New Issue Alerts, containing the Tables of Contents of issues and links to their downloadable pdfs of articles are sent to subscribers via a MailChimp email blast and posted to the ADRR’s website. Each issue’s pdf files initially will be stored in a folder in ND Milder’s Dropbox account from which they can be downloaded. Subscribers can download only those articles they want to read and whenever they want to read them. The ADRR also can be found via Google searches.
The Content We Are Aiming For. Only manuscripts about major downtown needs, issues and trends will be considered for publication. They will be thought pieces and not just reports about a downtown’s programs and policies that its leaders want to brag about. Articles must have broad salience and their recommendations broad applicability within the field. The “voice” of The ADRR will be anti-puff, and very factual, evidence driven, though not dully academic. Discussions of problems and failures will be considered as relevant as success stories if, as so often is the case, something substantial can be learned from them. The ADRR will not avoid controversial issues.
Also, the focus of The ADRR will not be overwhelmingly on our largest most urban downtowns, but also provide a lot of content and relevant assistance to those in our small and medium sized communities, be they in suburban or rural areas.
Who Will Write the Articles?
Hopefully, they will be from people in a broad range of occupations – downtown managers and leaders, municipal officials, academics, developers, landlords, businesspeople, consultants, etc. — who have significant downtown related knowledge and experience.
Curated Articles and Wildflowers. Initially, the ADRR will solicit articles to prime the content pump. Once The ADRR is up and running some articles will continue to be solicited on topics deemed a high priority by the editorial board members. Each board member can select a topic to curate an article on and seek the author(s) to write them. However, there still will be a continual traditional general call for submissions (wildflowers) focused on subjects selected by their authors. All submissions, curated or wildflower, must demonstrate sufficient merit to warrant publication in The ADRR. All submitted articles will be reviewed by board members. We hope to see many submissions!
Article Length and Author Responsibilities.
There will be short reads and long reads. Articles of 1,500 to 5,000 words will be considered. Multi-part articles of exceptional merit and salience will also be considered. What counts is their quality, not their length. Authors must have their articles thoroughly proofread prior to submission. Poorly proofed manuscripts will be rejected. Guidelines for submissions may be found on The ADRR website.
Publication Schedule:
Published four times per year, with a minimum of 5 articles in each issue. Given that this is an online publication, from a production perspective, the number and length of the articles is not a particular problem. However, from an editorial and content management perspective, the number of articles and their lengths can quickly become burdensome.
How It Will Be Organized.
The ADRR will be published by an informal group for its first year, with no person or group having ownership.
Editor. During the ADRR’s first year, N. David Milder has volunteered to serve as its editor.
The Advisory/Editorial Board :
Jerome Barth, Fifth Avenue Association
Michael J Berne, MJB Consulting
Laurel Brown, UpIncoming Ventures
Katherine Correll, Downtown Colorado, Inc.
Dave Feehan, Civitas Consulting
Bob Goldsmith, Downtown NJ, and Greenbaum Rowe
Stephen Goldsmith, Center for the Living City
Nicholas Kalogeresis, The Lakota Group
Kris Larson, Hollywood Property Owners Alliance.
Paul R. Levy, Center City District, Philadelphia
Beth Anne Macdonald, Commercial District Services
Andrew M. Manshel, author
N. David Milder, DANTH, Inc
John Shapiro, Pratt Institute
Norman Walzer, Northern Illinois University
Articles in our first issue that will be published in June 2020
Michael Berne, MJB Consulting, Working Title, ” Bringing Downtown Retail Back After COVID-19”
Roberta Brandes Gratz, “Malls of Culture.”
Andrew M. Manshel, “Is ED Really a Problem?”
N. David Milder, DANTH, Inc., “Developing a New Approach to Downtown Market Research Projects – Part 1.”
Aaron M. Renn, Heartland Intelligence, “Bus vs. Light Rail.”
Michael Stumpf, Place Dynamics, “Using Cellphone Data to Identify Downtown User Sheds”.
The Spotlight: “Keeping Our Small Merchants Open Through the COVID-19 Crisis”
Katherine Correll, Downtown Colorado, Inc.
David Feehan, Civitas Consulting
Isaac Kremer, Metuchen Downtown Alliance
Errin Welty, Wisconsin Economic Development Corporation.
I have been working in the field of downtown and urban revitalization since 1974. Back then, the riots of 1968 had brought considerable attention to our urban distress. Many civic and business leaders became much more aware of the cascading erosion their downtowns were facing. The white flight of shoppers and residents living in the downtown and close-in neighborhoods, disinvestment by landlords and businesses, spreading physical decay, soaring fear of crime, badly tarnished public images, and widespread frustration about not knowing how to reverse this situation were common problems in downtowns across the nation. Today, many of our downtowns have been thoroughly revitalized and become very popular places for people to live, play and work. Scads of other downtowns are in the process of doing so. These days, the expectation that downtowns can and will be revitalized has replaced the fears of the 60s, 70s, 80s and early 90s that downtowns were doomed to be places of failure, despair and decay. Downtown leaders now can tap a large and growing knowledge base that includes an array of tools and techniques they can use to solve the problems that had previously plagued our downtowns. Among them are: place-making, improving walkability, transit-oriented development, mixed-use residential development, niche marketing, BIDs, TIF, PILOTs, community policing, etc. This success — both actual and expected — and the knowledge base and leadership pool that support it, are some of the defining characteristics of the New Normal for Our Downtowns.
The Downtown Residents – CSD Connection
Successful downtowns, however, are not stagnant socio/economic/geographic organisms. Indeed, some of the factors that explain their success have also both changed the way they operate and generated a new set of problems that now need attention and solutions. For example, though it is generally agreed among downtown revitalization experts that the significant growth of housing in and near our downtowns has been a primary engine for their recent rejuvenations, questions recently have emerged about downtowns being turned into ghettos for the affluent. Still, the significant presence of these residential units are themselves an important and new phenomenon. Moreover, these new residents have created a significant new demand for services, amenities and merchandise that are not typically associated with the Central Business District (CBD) functions and venues that dominated our downtowns in decades past. These CBD functions and venues also have long dominated our understanding of how successful downtowns should operate and been the focus of most downtown revitalization strategies (e.g., retail growth, office development, job creation, transportation improvements). While many of these new downtown residents may also work in the district, their demand for and consumption of opportunities to socialize, relax and be entertained has driven the development and/or use of strong restaurant and bar niches, public spaces and parks, libraries and community centers, movie theaters, museums, PACs, churches, senior centers, etc. These venues are associated with a downtown’s Central Social District (CSD) functions.
Another defining characteristic of the New Normal is that successful downtowns have very strong CSD venues and, with increasing frequency, they are as important or even outshine those associated with its CBD functions. Some types of CSD venues have long been present in some downtowns, but the appearance of a bolus of downtown residents has generally sparked their significant growth while broadening the kinds of venues present. In turn, by strengthening these venues, the downtown residents have helped them be stronger magnets for people working in the district as well as daytime visitors from the district’s largest trade areas and for tourists from even more distant places.
The presence of these residents and the strength of these CSD venues also has changed the way a downtown operates. Most importantly, they widen the range of a downtown’s multi-functionality, increasing the reasons why people will use the downtown. By doing so, they also provide a steady and significant flow of pedestrians and customers that helps assure the district does not close down on weekends or weekdays after 6:00 pm. Strong CSD venues also make the downtown “stickier,” keeping visitors in the district for longer periods of time.
Strong CSD venues also make working in a downtown more appealing. In a labor market where many job offers now find no takers, firms located in strong CSDs are likely to find it easier to recruit quality employees. Moreover, many of the quality of life needs of creatives/knowledge workers are met by strong CSD assets. In smaller towns, strong CSDs can help attract quality independent retailers and Lone Eagle business operators.
But CSD Development Can Be Very Bumpy
Nevertheless, CSD development and growth does not always have clear sailing. Many communities may opt for CSD development projects that are ill-suited for their demographics, geographic locations, or industry trends, while they could have instead undertaken projects that were cheaper to build and operate and capable of attracting many more users. For example, advocates for new arts events venues such as PACs, theaters, and museums as well as for arenas and stadiums often badly over-estimate their potential economic impacts on the downtown, while underestimating construction and operating costs. In larger cities, major organizations in the opera, ballet, symphony orchestra and nonprofit theater fields are badly stressed having to cope with significant declines in paid attendance and financial contributions. In smaller communities, the impacts of new arts events venues on their downtowns are too often grossly exaggerated, and operating costs badly underestimated. Consistently, between 40% and 50% of arts nonprofits are financially in the red.
The most effective strategic path is to first focus on the strengthening and/or development of well-activated parks and public spaces, restaurants and watering holes, and movie theaters. They are usually the easiest to create and operate and have the fewest user frictions or are asset treasures that need to be improved and saved.
Though a lot of strategic planning is done for CBD functions and venues, strategic plans for CSDs are rare, but equally needed. While attention may be given to individual CSD projects, too many of such studies are marred by advocacy induced puffery. Very unfortunately, little attention is being paid to the CSD as whole entity.
Technology Is Creating a New Set of Problems
The impacts of technology are also strongly defining the New Normal. This is most apparent in the way the Internet is forcing the whole retail industry to search for a new operating paradigm and electronic consumption has reduced the brick and mortar consumption of the arts. How and when people shop is consequently changing in significant ways. They first research online and then shop the store for the targeted item(s). Strolling and browsing shoppers subsequently are on the decline. Many Americans are time-stressed, so many shoppers want quick, convenient retail transactions. Yet, many others want more interesting, more meaningful and more socially appealing shopping experiences. Shoppers have also become much more careful and deliberate when making purchases. While this is most strongly apparent among middle-income consumers, affluent shoppers are also showing signs of greater caution.
Changed consumer behavior, combined with growing online sales, have reduced the demand for downtown store locations and the amount of space retailers want for their new stores.
While downtown retail shops will not disappear, they almost certainly will change in the way they operate, the amounts of space they each need, as well as the types of locations they will want.
Yet, as my discussions with potential clients demonstrate, many downtown organizations still see retail as a key element in their downtown’s future, while largely disregarding improvements to their CSDs.
The appearance of app-driven car services such as Uber and Lyft have already impacted on traffic congestion and the use of public transportation in several large downtowns. The imminent use of automated vehicles – e.g., by Waymo soon in Phoenix – will likely have important impacts on traffic congestion in a host of additional downtowns. What these impacts will be remains uncertain- as do the possible remedies to those that are harmful. The transition to automated vehicles will probably take 20 to 40 years, with different issues dominating downtowners’ concerns at each stage of its progression.
Success Can Create Problems
The very success of our downtowns also has created its own set of problems. For example:
High housing demand has created a very serious affordability problem for many downtowns and their nearby neighborhoods.
Downtown success usually means more pedestrian traffic. For example, from 2009 to 2015, pedestrian growth in Manhattan’s economically healthy central business district grew by about 18 to 24 percent. At what point does the density of downtown pedestrian traffic become uncomfortable and unappealing for pedestrians and detrimental to an area’s image and popularity? The uncomfortable density of users is already occasionally being felt in such famed public spaces in NYC as Times Square, Bryant Park and Central Park. Will those instances of pedestrian congestion increase? Some of the managers of these public spaces seem unconcerned about pedestrian congestion. Indeed, they seem to be committed to having the largest number of visitors possible.
As a recent study of Center City in Philadelphia has shown, greater downtown development density increases traffic congestion.
Postscript.
This is part of book proposal I am writing. I’d appreciate hearing if you would be interested in a book that expanded upon the above content. Please let me know at [email protected] .
For about 10 years now, I have been advocating in my blog, presentations at conferences and recommendations to clients that vibrant parks and public spaces are more critical than ever to the success of downtowns in our smaller communities. However, more often than I’d like, I’ve had some pushback from folks who argue one or more of the following points:
They already have a public space, and nobody uses it. It’s deader than a doornail, more of a town liability than an asset.
They’re a small town and their market area has a small population, so their downtown does not attract a lot of visitors who might use a public space.
Their municipalities have limited finances, so it is extremely difficult to build a new public space or to significantly improve an existing one. Insufficient financial resources also mean that it is problematic to properly maintain existing public spaces or to provide the staff needed to facilitate the use of potential attractions, e.g., ping pong tables, boules courts, etc.
This article is premised on the belief that there are solutions to all of the above problems and that by incorporating knowledge of them into the designs and management of small-town public spaces, these spaces can be turned into successful and important downtown assets.
Setting Viable Aspirations for Use Levels
At the outset, it is essential to establish realistic expectations. These small-town spaces will never have the visitation levels of major urban public spaces where, for example, Bryant Park in New York can attract over six million visits annually and its neighbor, Times Square, draws over 300,000 pedestrians per day. On the other hand, if meaningfully activated, on days when they are not serving as the venues for events, the small-town parks and public spaces still can attract a significant number of visitors. Annual visitation levels for these small-town venues of 100,000+ are certainly possible and counts as high as 300,000/year have been achieved (1).
Town Green on a summer midweek afternoon, Guilford, CT
At most points in time during the weekday the small-town public spaces may have very few to no users, but this also even happens in large urban parks that still appear well activated, e.g., the Overlook section of Forest Park here in Kew Gardens, NY. However, at several times during the day — my observations suggest lunchtime, after school, and possibly 7:00 a.m. to 9:00 a.m. are the most likely times — a successful small-town public space can have a good chance of attracting platoons of users, some of whom are there with different subgroups, while others are alone. Altogether they may number no more than five or six people at a specific point in time, though their numbers on occasion can be substantially higher, e.g., 50 to 60.
Visitors Attract More Visitors. The presence of one small group of visitors helps attract other visitors, who may come at a later point in time. The existing visitors help validate in the eyes of passersby that the park has something worthwhile to see or do, encouraging them to visit as well. (This assumes the visitors’ behaviors are orderly).
To my knowledge, there, unfortunately, are no studies that show how many users a public space needs to project an image of being active, popular and worthy of a visit. But, my sense is that potential visitors make their own subjective judgments about visiting a park based substantially on who they see there and what they are doing.
Small town and market area sparse populations do not have to mean dead, inert and underutilized parks and public spaces if, on non-event days, those spaces attract several platoons of visitors at several times of the day.
Too Often, Public Spaces in Smaller Communities Focus on Just One of Three Necessary Functions
My field observations have led me to conclude that these venues can perform three important and essential functions:
Provide visitors with a green refuge for resting in peace and quiet.
Provide infrastructure assets and programs that stimulate visitors to engage in activities (i.e., to “perform”), many of which also will entertain people watchers visiting the venue. Some examples of such assets are ping pong tables, boules courts, model boat ponds, “reading rooms,” carrousel rides, ice rinks, chess tables, swings, spray pads, square dances, dance contests, etc.
To present events visitors can attend such as movies, plays, concerts, lectures, dance recitals, etc. Event attendees are almost always passive audiences (2).
The Pocket Park in downtown Washington Borough, NJ. This 4,000 SF park is the location for the town’s Farmers Market and several other events, but it has little appropriate seating or shade and no opportunities for visitors to engage in any activities. Its sole function is to serve as a location for events.
A Primary Focus on Events Limits a Public Space’s Potential Magnetism. One of the major problems of underutilized small-town public spaces is that their design and operation are focused on their being an events venue (see photo above). Such a narrow focus, of course, means that the space was probably easier to design. Operational costs are also probably minimized since the venue’s events are probably produced and funded by non-municipal organizations. Programming is offloaded. However, the number of their probable events means that the venue will be inactive on the vast majority of days in any year. For example, if the venue had a relatively robust schedule of events on fifty days, it still would have no events and be inactive on 84% of the days in a year.
The Critical Need for Appropriate Seating and Shade. Another major problem with many of the underutilized spaces is that they fail to provide the prime requisite for adequately performing the green refuge function: adequate seating and shade. If these spaces are to be sticky and keep visitors for any meaningful length of time, there must be comfortable seating for them. Tables and chairs, of course, also encourage visitors to eat their lunches and snacks in the public space. Food consumption and sale is a key to having a successful public space, no matter the size of the downtown or the community.
Too many of the small-town public spaces I’ve visited in the past 10 years lack such seating in adequately shaded areas. Even some of my favorites such as Mitchell Park in Greenport, NY and Central Park Plaza in Valparaiso, IN. (Happily, the situation in Valparaiso was corrected in the park’s second phase of development). On hot days, that can strongly discourage visits from anyone who is not a sun worshiper. What has been most surprising, is that even some well-known designers of public spaces have been among those failing to include anything approaching adequate shade in some of their project designs.
People Need Reasons to Visit Public Spaces on Non-Event Days. Those that provide infrastructure assets and programs that stimulate visitors to engage in activities give people the strongest reasons to visit. They substantially widen the variety of things visitors can do. Many of these attractions are there all day and every day, and they are not scheduled. These attractions also allow visitors to be active participants in the venue’s activities, rather than being just passive audience members. However, public spaces in smaller communities often lack such attractions. They have event programming, but not what may be called infrastructure programming. If a ping pong tables or chess tables were there, visitors might be stimulated to use them. Most often such attractions are not there reportedly because of a lack of financial resources to cover the costs of creating such attractions as well as the costs of the staff that would be needed to operate them, e.g., a carousel, an ice rink, a reading room, a bocce court. However, I suspect that the designers of these public spaces and/or the people who now manage them never considered providing such attractions and were unaware of their power and importance. Rectifying this situation may be the best way to strengthen downtown public spaces in our smaller communities.
A Good Location is Necessary, but Insufficient for Success, and, Importantly, a Location Can Be Improved
The location of a public space is extremely important for a number of reasons. Its visibility to downtown visitors drawn by its other attractions – retailers, eateries, services, government offices, entertainment venues, etc. — will influence how many visitors it will attract. Also, as Olmsted proved long ago about Central Park, and as more recent researchers have proved about other successful parks, parks can have positive impacts on real estate values on proximate properties and impact the desirability of commercial spaces. Where a park is located will determine what it can potentially impact. Far too many small and medium-sized downtowns have located public spaces where they are invisible to most downtown users and where they have a low potential for having significant positive economic impacts. Instead, they should be located, if possible, in what otherwise would be considered as worthy development sites, those that already benefit from significant flows of pedestrian and vehicle traffic and areproximate to other downtown assets.
The Center Street Alley in downtown Rutland, VT is a troubled public space because it is surrounded by buildings and has no visibility from surrounding streets.
In downtown Downers Grove, IL, Fishel Park, and Its Veterans Memorial Bandstand are not visible from Main Street.
Very importantly, a public space’s location also will determine the pool of people who are its most likely users. In urban areas that pool is most easily defined by:
The people who live, work and study with a five-minute walk of the venue (about ¼ of a mile.
Those who visit this area to shop or complete medical or business chores or are staying overnight in its hotels.
Those who are walking or driving by the public space’s location.
In suburban and rural areas, whether we like it or not, the auto plays a much larger role in personal trips than walking. Based on my field observations, I would suggest that in suburban and rural small downtowns, the most likely users of their public spaces are to be found within a five-minute drive of the venue. Within that travel shed, I hypothesize that the propensity to visit the venue has the following hierarchy:
Those who are within an easy five-minute walk, say .25 miles.
Those with a doable ten-minute walk, say .50 miles.
Finally, those who are more than .50 miles from the venue, but within a five-minute drive of the public space.
Learning from Bryant Park. This park in Manhattan has been widely acclaimed for its successful revitalization and popularity after decades of crime induced decline. Though it is located in the largest and strongest CBD in the USA, it’s history is relevant to all public spaces, be they in small rural towns or in large, dense urban areas. It demonstrates a number of very important points related to activating public spaces.
Its Location Gives It Great Visibility and Access to a Huge Pool of Potential Visitors. The blocks surrounding this park are densely filled with high rise office buildings and a large number have ground floor storefronts. Its surrounding streets are jammed with cars and buses. The park’s management estimates that, on an average weekday, about 250,000 people walk by on the sidewalks of the four streets that surround the park; a significant number are probably tourists.
About 78,000 people are employed within a 5-minute walk just from the park’s 42nd Street and Avenue of the Americas entrance. Also, there are 29 hotels within 0.2 miles of the park. Times Square is within a three-minute walk, while the Grand Central Terminal, Macy’s and Rockefeller Center are both within roughly six-minute walks. This means that the park does not have to bring people into the area and its management can completely focus on the essential task of capturing users from the vast number of people who already are in the area.
A Strong Location Provides a Pool of Essential Potential Users, but the Park’s “Products” Are What Gets Them to Actually Make Visits. Bryant Park’s strong location is what gives Bryant Park access to a very large number of potential users, but it alone could not assure its success. Consider that the flow of pedestrian traffic near the park during its troubled days was probably lower than today’s, but still relatively very strong when compared to downtown locations in other cities. What turned the tide was not the new and renovated office buildings and hotels that have appeared since 1992 — they came after the park became a success– but what was happening inside the park, the new “products” it offered and how they were “packaged.” That’s what drew all the visitors into the park and encouraged them to stay. A superb location was not enough by itself, but it is still damned important.
A Location’s Pool of Potential Users Can Be Made Larger. Back in the 1950s and 1960s, before Bryant Park entered its period of steep decline, the area surrounding it was relatively healthy and successful. The park’s decline made the leasing of office and retail spaces proximate to it far more difficult. Pedestrians intentionally walked on the other sides of the streets from the park or avoided the entire area. The park’s resurgence rectified that situation. Pedestrians returned in abundance to its surrounding sidewalks. New office building and hotel projects wanted to not only be located close to it, but to claim the park’s name in their addresses. For example, the Bank of America Tower proudly proclaims its address to be One Bryant Park. However, the overall success of the commercial spaces near the park as well as the increasing strength of the Midtown CBD also had their own positive impacts on the size and composition of the park’s user pool (3).
The implications of this point can be very important for the success of small-town public spaces – redevelopment and the recruitment of residents, businesses, and nonprofits near these venues can significantly strengthen their pools of potential visitors.
Likely Pools of Potential Users in Smaller Towns.
As with Bryant Park, these pools will most likely be defined by the people who live, work, study and visit within a surrounding area, but that area will be more car trip defined than the densely urban Bryant Park’s. These pools will obviously also have far fewer potential visitors than Bryant Park’s, but then their expected user levels are also far lower.
Residents. Many smaller towns have sparse residential development in their downtown/Main Street areas, though more and more are rightly trying to correct that situation. For example, I did a deep dive into successful public spaces in three smaller communities a few years ago (see the above table). Based on my observations and discussions with local officials, I concluded that none had a significant number of downtown residents, though Somerville was developing a substantial number of new units. This means that most residents probably live beyond an easy walking distance (0.25 miles) of any downtown public space or even a doable walking distance of 0.50 miles. Another challenge is posed by the fact that most adult residents who are in the workforce will be at their employment locations during the daytimes on all five weekdays. For example, here are the percentages of working residents whose jobs are located out of town in three smaller communities:
Valparaiso IN, population 32,000: 64.4%
Somerville, NJ, population 12,100: 93.6%
Greenport, NY, population 2,200: 80.3%.
Events held in a downtown public space on weekends are likely to attract the most adult residents because they are then most likely to be in-town and have free leisure time.
The types of residents who are most likely to remain in town on weekdays are retired seniors (the fastest growing age cohort in rural areas), school children, and at-home parents with pre-school children. Well designed and managed public spaces in smaller communities would do well to offer attractions that appeal to each of these demographic groups, who are likely to visit them at different times of the day.
As Andy Manshel argues so forcefully, in his upcoming book “What Works: Placemaking in Bryant Park. Revitalizing Cities, Towns and Public Spaces,( Rutgers University Press, Spring 2019),” finding successful attractions is largely a matter of trial and error, with much tweaking and recalibration, though greenery, suitable seating and easy access to food and drink are essentials. Below are some ideas about attractions that might be aimed at seniors, school-age children and parents with preschool children. They are offered as some possibilities that might be tried and tested while recognizing that there are probably many other possibilities that might be discovered by talking to members of these three potential park-user market segments:
Seniors: exercise paths for walkers, bicyclists and bird watchers; exercise classes; chess/checkers tables; a “reading room”; a putting green. Seniors are likely to appear in the morning and midday hours.
School-Age Children: playground equipment; bike paths; skateboard areas; soccer/football/baseball field; basketball courts; outdoor hockey rinks; summer camps; after-school supervised activity programs. School children are likely to appear after 3:00 p.m.
Childcare program in Memorial Park, Maplewood, NJ
Parents with Preschool Children: They have a long-demonstrated the need to get out of the house and socialize with their peers. For example, in Maplewood, NJ, and Englewood, NJ, they have turned tea shops and coffee houses into places for them to congregate. In NYC, this often happens in its parks, where the parents’ young children can also be safely entertained. For example, on any nice day just take a walk around any of the playground areas in Manhattan’s Central Park (where there may be nannies instead of moms) or in Forest Park here in Queens. Appropriate seating, amply shaded, and clean accessible toilets encourage the emergence of such social clustering. These parents usually will show up from late morning to late afternoon.
Given that the numbers of potential daytime residential users are likely to be relatively moderate, a downtown public space would do well to cultivate a structured corps of potential repeat users. This can be encouraged if downtown development officials take “location enhancement” steps such as, but not limited to, these:
Develop a community center in or adjacent to the public space that has daytime programs for seniors, kids after school and for parents with preschool children.
Locate senior housing within a very short walk of the public space that does not entail a need to cross a street. The attractions in the public space can also serve as a development incentive for such projects.
Invite any nonprofit that provides after-school programs for kids to use the public space.
Invite nonprofits that have summer day camp programs to use the public space.
If the public space has the needed playing fields, invite youth sports leagues to play on them.
Attract a coffee shop or tea house that can attract parents with preschool children to a location adjacent to the public space.
It is also helpful to avoid a kind of downtown revitalization snobbery. Chains like McDonald’s and Starbucks are often scorned by downtown activists, but in smaller downtowns, they are regularly strong magnets that attract the available daytime residential population segments. For example:
In Gering, NE, the downtown’s McDonald’s is its strongest customer traffic generator. It reported having consistent waves of seniors who are customers in the mid-morning and school children without adult supervision coming in after 3:00 p.m.
In Englewood, NJ, the downtown manager reported, back in the early 2000s, that the downtown’s Starbucks attracted a consistent group of moms with pre-school children in the early afternoons.
Encouraging their opening near a smaller town downtown public space should not be dismissed out-of-hand. Of course, independents that can perform the same functions should be also courted.
The Critical Downtown Workforce. Development density in smaller community downtowns is almost always the result of the agglomeration of businesses. This means that their downtown’s critical daytime population has a lot of people who work in or near the downtown. A very interesting research project done by Ryan and Jin of communities in Wisconsin shows just how significant are the numbers of workers who are located within acceptable walking distances and easy driving times of the centers of small downtowns (4). The above table provides Ryan-Jin data on four groups of smaller towns categorized by ranges of population size: 1,000 to 2,500; 2,500 to 5,000; 5,000 to 10,000, and 10,000 to 25,000. The top four rows of data show the number of towns in each category, the number of people employed within 0.25 miles of the downtown’s center, the number of people employed within 0.25 miles, 0.50 miles and 1-mile of the downtowns’ centers.
Morristown, NJ, has more people who work there than live there. Many visit The Green at lunchtime.
In a seminal article, Larry Houstoun’s analysis of data from the first ICSC study of office workers showed that they basically averaged trips that lasted 9-minutes to and from their lunchtime destinations (5). That trip time included time spent getting out of their buildings and then the time needed to walk from their building to their destination (and vice versa). To bring the Ryan and Jin data more, if not fully, in line with Houstoun’s findings, I have translated those data into downtown employees who have an easy walk to its center, those who have a doable walk to its center, and those who are located beyond a doable walk, but still within an easy drive of the center. I have included the “easy drive” category because my projects in many suburban and rural communities – e.g., Englewood, NJ, Gering, NE, Sherwood, WI –have shown that their downtowns attract a lot of people who are within a 5-minute drive of their downtowns during weekdays.
Even the 143 towns with populations between 1,000 and 2,500 have significant daytime workforces averaging:
400, who are within easy walks of any public space located near the center of their downtowns.
354 who are within a doable 5 to 10-minute walk of such a public space
406 who are beyond a 10-minute walk, but within a 5-minute drive of such a space (and who probably need another four or five minutes to get to and from their cars)
Among these smallest towns, the average workforce pool of potential users totals 1,160. The larger small towns, of course, have larger workforce pools of potential users.
Even though they are likely to be very proximate to the public space, converting them into actual visitors is very challenging simply because most of the time they are in the vicinity, they are busy working. Overwhelmingly, they are most likely to visit during their lunch breaks in the 11:30 a.m. to 1:30 p.m. time period. They will need to eat their lunches on their visits – indeed, if the public space is an attractive place to eat lunch, it will attract more of their visits, so they can eat there. This means that for the small town public spaces to capture significant amounts of workforce visits, it should have:
Quality food vendors in or adjacent to the space. They may be restaurants that do take out, fast food eateries, delis, food trucks, food carts, or kiosks. Whatever they are, they need to provide quality products at affordable prices. A public space in a good location will either have such food vendors nearby or be able to recruit them. But a public space poorly located in a fringe or low traffic area will neither have them nor be able to recruit them.
Movable seating and tables in the space where the workers can enjoyably and comfortably eat their lunches.
The workforce users of the public space can be critical pump primers for attracting additional users. Other downtown visitors, seeing them in the public space, may also be lured into visiting it and perhaps also easting their lunches there.
Tourism. Yes, tourism can provide some small town public spaces with a significant number of visitors. For example, Greenport, NY, only has a total of 2,200 year-round residents, who have relatively modest annual incomes. and a daytime downtown workforce of 399, but its Mitchell Park attracts over 300,000 visitors annually. – day trippers from the county and beyond, second homeowners, overnight visitors at its hotels, B&Bs and marina as well as travelers passing through to use its ferries to get to Shelter Island, the Hamptons and the casinos in CT (6). Public space managers in small communities with a strong tourist flow should definitely think about ways to attract them.
That said, care should be taken to assure that the attractions the park/public space offers to attract tourists do not conflict with the attitudes and preferences of local residents. Strong, attractive parks/public spaces are usually important cornerstones of a community’s Central Social District. Nothing should be done to jeopardize that role. Indeed, strong park attractions aimed at local residents probably will also please many tourists.
Still, most smaller rural and suburban communities that I’ve visited do not have significant tourist flows, though their leaders may want to attract more out-of-towners. The focus then should be on local residents and folks who have jobs located in the community. If that is done well, then out-of-town visitors also may be attracted.
Strategically Important: Attractions That Do Not Require Much, if Any, Staff to Function
As Andrew Dane and I have written, there is a large financial toolbox available that small town leaders can use to create attractive public spaces (7). In these smaller towns, substantial financial support from the municipality definitely will be needed and essential for winning outside funding and the use of such important financial tools as tax increment financing. It probably will also be necessary to assure proper maintenance, though responsibility for programming may be given to a non-profit organization.
Recent reports suggest that parks and public spaces are now attracting increased support from philanthropic organizations and wealthy private donors (8). In Valparaiso, IN, for example, a local family recently contributed $3 million for the construction of Phase II of the downtown’s Grand Central Plaza Park.
Strategically, I would argue that the most pivotal challenge for smaller town public spaces is how to create and maintain attractions that stimulate visitors to engage in various types of activities, e.g. eating lunch or a snack, play chess or ping pong, birdwatch, ride a swing, read a magazine or book, etc. The opportunities to engage in such activities are essential if more visitors are to be attracted on non-event days.
For those concerned about how to finance the creation of these attractions and the staff then needed to operate them, there are several possible responses. First, select attractions that are relatively affordable to create and that do not require a lot of staff time, if any, to be operational. Moveable seating and tables, so visitors can eat lunches and snacks, need not be expensive to create and require no staff time to supervise. The same for climbing rocks, adult or children’s swings and chess tables. Spray pads, popular across the nation, may need a little staff time to turn them on and off. (See photos below). These examples are not exhaustive. There are other possibilities.
Some attractions that small town parks and public spaces can have that are relatively affordable to create and do not require much staff, if any, to operate: climbing racks; spray pad; adult swings and chess/checkers tables.
Other attractions may be more expensive to implement and require staff to operate, e.g., a carousel or ice rink. Their operational costs can be covered by sponsorships and user fees. It probably will take some time to attract sponsors and meaningful numbers of users.
Finally, if paying for needed staff is a problem, then perhaps volunteers can be mobilized. Of course, the reliability of volunteers can be a problem. Involving civic groups – e.g., garden clubs, chess clubs, birdwatching groups — to provide them may be one way to alleviate the situation.
5) Lawrence O. Houstoun. “NINE MINUTES TO RETAIL: The Workplace-Marketplace.” Urban Land, December 1989, pp 25-29.
6) See endnote 1.
7) N. David Milder and Andrew Dane. “Some More Thoughts on the Economic Revitalization of Small Town Downtowns: Financial Tools.” Economic Development Journal of Canada, November 2014. http://tinyurl.com/qcbnefh
In downtown Downers Grove, IL, Fishel Park, and Its Veterans Memorial Bandstand are not visible from Main Street.
