Comeback Kids: Troubled cities re-emerge from the shadows, hopeful for a bright future.
By Barbara Ballinger
With the presidential election months away, it’s tough not to make comparisons to the political landscape. Just as politicians can reinvent themselves and triumph, a number of down-and-out cities get a second, third, or even fourth chance to survive. Across the country, you’ll find examples of shrinking cities quickly losing residents and businesses, often due to a natural disaster or financial crisis. Some of these cities will tread water, never increasing the number of new residents or attracting fresh employment resources. Others will re-emerge stronger than ever.
We selected six success stories, highlighting cities from coast to coast that teach important lessons on the tools cities need to get back on their feet and how developers can become part of the solution. The common denominators that often make the difference between a success story and a failure include strong government leadership offering tax and other financial incentives; private visionaries, including developers, who take calculated risks to restore their communities; and public and private sectors that forge a healthy partnership so the whole is more important than an individual mission.
And there are a few strategies from which to steer clear. John Norquist, former mayor of Milwaukee and now president and CEO of the Chicago-based Congress for the New Urbanism, says, “Avoid developing brand new convention centers that tend to lose money, fancy art museums that show how sophisticated your city is, and anything embarrassing and messy that scares away business. Keep the city true to itself rather than following a flavor of the month.”
At the same time, cities must embrace change. None of the towns profiled emerged as exact clones of their original glory days. Many are still showing declining populations, but forecasters believe that, in time, those numbers will rise. Unfortunately, the slowing economic climate now challenges plans in several cities. Only time will tell if all possibilities are realized. Stay tuned; we certainly are.
Biloxi, Miss. - Riders of the Storm
After Hurricane Katrina tore through Biloxi, Miss., in August 2005, the losses added up: $20 million a year in casino revenue, 6,000 homes, and 25 percent of business inventory. “We lost our infrastructure, commercial activity, and tax base since everything was along the [destroyed] historic beachfront on Highway 90,” Mayor A.J. Holloway says.
The city’s population also plummeted 12.5 percent. In 2000, before Katrina, the population was at 50,644; after the storm, it dipped to 44,342, according to 2006 U.S. Census Bureau data. Yet forecasters say that by 2010 the resident base will increase by 20 percent. Another positive growth indicator: Eight of the 10 casinos are up and running, yielding $1.2 billion in revenue last year—more than at any time since they opened in 1992, Holloway says.
Several reasons account for the city’s survival. Because of prior hurricanes, Holloway purchased a business interruption insurance coverage plan that cost $94,000 and guaranteed up to $10 million in lost tax revenue from gaming. “We never did that before, but we saw the devastation from four hurricanes in Florida,” the mayor says. “We felt we had been too lucky with Ivan, so we wanted funds if we had to rebuild. We’ll probably spend about $1 billion over the next six years.”
A novel “megacommunity” approach also made a difference in the rebirth of the city’s oldest, poorest, and hardest-hit neighborhood—East Biloxi, a 2-squaremile section where 90 percent of the city’s African-American population lived. City Council member Bill Stallworth founded the East Biloxi Coordination Relief and Redevelopment Agency, a nonprofit organization uniting businesses, government, and volunteers to help rebuild the city.
Stallworth’s agency participants listened to the needs of area residents rather than relying strictly on developers’ input. “We surveyed people, and they said they wanted affordable housing and a sense of community,” Stallworth says. “We realized it was important for people to see tangible progress, so we first rebuilt houses of worship and homes.”
The collaborative initiative worked. In the East Biloxi area, 35 new homes were built, 600 were rehabbed, and 2,000 other structures were fixed. The community’s population, which dropped to 10,000 from 12,500 after the storm, is back to 11,000. “The hardest part was to get past the shock and have hope,” Stallworth adds.
What continues to fuel the entire city’s progress, albeit slowly, is the belief that Biloxi is stronger than ever. “Here in Biloxi we were already enjoying a renaissance before the storm,” Holloway says. “Our goal is to revive the renaissance we had been enjoying and build back, bigger and better, and more responsibly.”
Still, problems exist throughout Biloxi. The slower economy has caused the city’s sales tax revenue to dip, and residents worry about future hurricanes. “We have drills during the season, but you can’t really prepare,” Holloway says. “We thought we were prepared for Katrina, but it was like no other storm.”
Riders of the Storm
After Hurricane Katrina tore through Biloxi, Miss., in August 2005, the losses added up: $20 million a year in casino revenue, 6,000 homes, and 25 percent of business inventory. “We lost our infrastructure, commercial activity, and tax base since everything was along the [destroyed] historic beachfront on Highway 90,” Mayor A.J. Holloway says.
The city’s population also plummeted 12.5 percent. In 2000, before Katrina, the population was at 50,644; after the storm, it dipped to 44,342, according to 2006 U.S. Census Bureau data. Yet forecasters say that by 2010 the resident base will increase by 20 percent. Another positive growth indicator: Eight of the 10 casinos are up and running, yielding $1.2 billion in revenue last year—more than at any time since they opened in 1992, Holloway says.
Several reasons account for the city’s survival. Because of prior hurricanes, Holloway purchased a business interruption insurance coverage plan that cost $94,000 and guaranteed up to $10 million in lost tax revenue from gaming. “We never did that before, but we saw the devastation from four hurricanes in Florida,” the mayor says. “We felt we had been too lucky with Ivan, so we wanted funds if we had to rebuild. We’ll probably spend about $1 billion over the next six years.”
A novel “megacommunity” approach also made a difference in the rebirth of the city’s oldest, poorest, and hardest-hit neighborhood—East Biloxi, a 2-squaremile section where 90 percent of the city’s African-American population lived. City Council member Bill Stallworth founded the East Biloxi Coordination Relief and Redevelopment Agency, a nonprofit organization uniting businesses, government, and volunteers to help rebuild the city.
Stallworth’s agency participants listened to the needs of area residents rather than relying strictly on developers’ input. “We surveyed people, and they said they wanted affordable housing and a sense of community,” Stallworth says. “We realized it was important for people to see tangible progress, so we first rebuilt houses of worship and homes.”
The collaborative initiative worked. In the East Biloxi area, 35 new homes were built, 600 were rehabbed, and 2,000 other structures were fixed. The community’s population, which dropped to 10,000 from 12,500 after the storm, is back to 11,000. “The hardest part was to get past the shock and have hope,” Stallworth adds.
What continues to fuel the entire city’s progress, albeit slowly, is the belief that Biloxi is stronger than ever. “Here in Biloxi we were already enjoying a renaissance before the storm,” Holloway says. “Our goal is to revive the renaissance we had been enjoying and build back, bigger and better, and more responsibly.”
Still, problems exist throughout Biloxi. The slower economy has caused the city’s sales tax revenue to dip, and residents worry about future hurricanes. “We have drills during the season, but you can’t really prepare,” Holloway says. “We thought we were prepared for Katrina, but it was like no other storm.”
Des Moines, Iowa -Midwest Renaissance
Downtown Des Moines always managed to maintain a strong base of financial and insurance businesses, medical centers, and government headquarters. But many observers describe the downtown as stagnant in recent years because it lost population and employers to surrounding suburbs.
The slow period is over. The population is on the rise, and d residents, employeess, and visitors are enjoying new restaurants, entertainment venues, and businesses. In 2007, approximately 206,000 people lived in the Des Moines proper area, up from about 199,000 in 2000, according to Matthew A. Anderson,the city’s Economic Development Administrator.
Several catalysts have caused this uptick. Jake Christensen, coowner of Des Moines-based Nelson Development, says a key stimulant is the state’s “Vision Iowa,” a funding mechanism that Iowa leaders use to create city attractions. The program fueled the development of the Science Center of Iowa, a new library, Western Gateway Park and its sculpture garden, Wells Fargo Arena, and the Principal Riverwalk outdoor attraction by the Des Moines River.
Others attribute success to a strong public/private partnership that helped retain area businesses and attract new ones. “Leaders saw people leaving downtown and through strategic quick-thinking put [in] plans to avoid that,” says Martha Willits, president and CEO of the
The first step was to grow housing and retail development in the late 1990s; the second step began in 2003 with an emphasis on attracting people via arts, culture, and recreational facilities. City leaders then crafted aggressive financial incentive packages for developers, assisted firms with land acquisition and street upgrades, and touted the skilled workforce and quality of life, Anderson says. “We have the shortest commute for a city our size; the average commute is 19 minutes,” he says.
Nationwide Insurance, a Fortune 100 company based in Columbus, Ohio, found that to be true and is expanding its Des Moines operation from 200,000 square feet to 1.13 million square feet of space. “We viewed the city as a growth market and a good offset of our Columbus site,” says Roy Kunko, associate vice president of Nationwide Insurance.
Another crucial factor for Des Moines’ success: The city’s decision to include the entire region in the revitalization efforts rather than just the downtown. “The economy is ever expanding, and we’re living and working across bigger geographic lines,” Willits says.
That’s just the beginning, says Tim Leach, vice president of economic development for Downtown Community Alliance, a part of the Greater Des Moines Partnership. Their ultimate goal? Make Des Moines the biggest mid-market city in America. And they just might succeed.
Oakland, Calif. - Public Push
Oakland, the largest city in California’s East Bay area, never experienced the flurry of urban, infill, residential development in the mid-1990s that other cities did. There were a number of problems: a lack of planning and leadership; the city’s failure to promote itself as being open to new development; government corruption; widespread crime; and poor public schools. But nine years ago, the city got a shot in the arm when former Mayor Jerry Brown announced the 10K Downtown Housing Initiative in his 1999 inaugural address. The goal was to lure 10,000 new residents to the struggling downtown, bring private residential investment to the city, and encourage a vibrant mixed-use community.
“Oakland development, both commercial and residential, had been very slow compared to other cities,” says Michael Dean, a partner in the law firm Wendel, Rosen, Black & Dean in downtown Oakland. “One reason was the negative perception due to crime but also of doing business since the bureaucracy seemed to make it harder.” In addition to the change in administration, the national real estate boom that began in 2002 helped trigger a change in perception, with multiple local developers announcing projects.
Developers recognized that Oakland offered a less expensive place to build, live, and work than nearby San Francisco. To date, an estimated 3,800 housing units have been constructed in downtown Oakland with more proposals approved, says Ken Stevens, co-founder of San Francisco-based marketing firm Accelerated Marketing Partners. Retail and restaurants are following, and the city expects the population growth to follow.
Jim Ellis, managing partner of Ellis Partners, a San Francisco-based real estate development firm, was among the first developers to jump on board with Brown’s development plan. His company’s $300 million Jack London Square project, which it purchased from the Port of Oakland five years ago, is now transforming nine waterfront blocks and many existing buildings into an urban project consisting of hotel, retail, entertainment, and office space surrounded by multiple residential buildings.
Despite the building boom, several challenges have emerged for the city—the economic slowdown that left an inventory of 1,800 units unsold; a still-suffering public school system; and a new mayor, Ron Dellums, who seems less interested in development than his predecessor, according to a number of developers. In fact, Stuart Gruendl, CEO of Bay Rock Residential, won’t pursue further development in Oakland during Dellums’ tenure.
The mayor’s office says Dellums is less interested in condo development than Brown and more interested in job-creating developments such as Shorenstein Properties and MetLife Real Estate Investments joint project at 601 City Center, a 500,000-square-foot, 23-story green office tower that broke ground this spring.
In light of this changing political landscape, developer Ellis is optimistic about the city’s future. “There’s been enough momentum. The downtown critical mass can keep the city going,” he says. “There’s also private involvement to improve public schools and the city council is allocating more resources to eliminate crime.”
Pittsburgh, Penn. - Steely Conviction
“People no longer ask, `Why are you moving to Pittsburgh?’” says architect Don Carter, president of Pittsburgh-based Urban Design Associates. That’s certainly a strong indicator that Pennsylvania’s second-largest city is transforming itself from a city heavy on industry to a thriving cultural center and knowledge-based city that draws visitors, businesses, and residents alike.
The city has also made a name for itself as a leader in green development. “We’ve gone from a smoky to green city and are now ranked fifth in LEED-certified buildings,” says Rebecca Flora, executive director of the local Green Building Alliance.
How has the City of Steel been able to make the dramatic leap forward? “The prime reason is that it was able to transform its industrial economy based on steel mills and heavy manufacturing in the 1970s and ‘80s to one focused on technology and knowledge due to its universities and hospitals,” says former Mayor Tom Murphy, now a senior fellow at the Urban Land Institute. The transformation and resulting loss of jobs was extremely painful, however, for multiple generations of families, including his own, Murphy says.
Murphy, who served as mayor from1994 to 2006, was an instrumental part of the solution. Because the city doesn’t offer ocean views or a balmy climate, he felt high-quality design, amenities, and access to the Allegheny River were critical to Pittsburgh’s growth. A key decision: The city purchased 1,500 acres of vacant steel mills and is transforming them into a mixed-use site of housing, retail, technology, and parks along the riverfront. American Eagle Outfitters is among the companies that relocated its headquarters from the suburbs to this urban locale.
Pittsburgh also boasts one of the highest percentages of Class A office space in a downtown of any mid-size metro area in the country, says Carter, whose firm is helping revitalize the city with a number of residential and commercial projects.
Plus, the city has gained a thriving cultural district featuring a new convention center, new football and baseball stadiums on the other side of the Allegheny River, and new condo and apartment development. What’s more, it has refurbished 19th- and early 20th-century loft buildings into rental and condo units. Carter estimates that 140,000 people work downtown, with an additional 50,000 working in Oakland, a second “downtown” 4 miles from Pittsburgh’s central business district.
To fund development, the city, under Murphy’s leadership, relied on a variety of sources including its own development fund of $60 million and city-generated sales taxes. Non-steel corporations and foundations raised another $40 million. Also instrumental was a healthy collaboration among regional, county, and city organizations and leaders. The group modeled itself after the Allegheny Conference on Community Development, an initiative started after World War II to help clean up the city.
Despite Pittsburgh’s major resurgence in recent years, the city still has a ways to go, especially in terms of growing its population. But leaders are confident that the population will increase in the next five to 10 years.
