For Citiwire.net by Curtis Johnson:
Legendary Chicago planner Daniel Burnham would like Scott Polikov. No timid plans, no boutiqued, half-done solutions. Polikov – attorney turned town planner and public-private partnership consultant – spoke in mid-January to a roomful of rest estate developers, financiers, planners and local officials at an event sponsored by the Minnesota chapter of the Urban Land Institute.
Polikov was bursting with big ideas – even for small places.
He told this audience that the key to better development today is a mindset centered on economic strategy. “We never approach a project and start out by just planning,” he said. We start with a market study, to see what level and what kind of investment will actually produce good results. Planning, in the absence of examining market conditions ought to be considered malpractice.” And, this approach could provide more local funding capacity for infrastructure to make up for diminishing federal capacity.
Proving his point, he put up slides from a small Texas community. The scene looked familiar to anyone who’s seen small cities with neglected centers. Roanoke, Texas, just north of Fort Worth, Texas, has a population of 7000 people. Despite having a median household income level of almost $80,000, the city’s center looked weary and worn. A tableau all too familiar – aging concrete spread all over, with the usual eruption of power poles and tacky signs pointing to places people already know how to find. Few pedestrians in sight. And because it’s Texas, a predominance of pick-up trucks.
Polikov’s firm, Gateway Planning, did a market study, including an inventory of assets that might be leveraged into bigger dividends – such as a popular restaurant and historical trivia (Bonnie of the infamous Bonnie and Clyde duo grew up there). The market study made a good case for $ 8 million in publicly financed improvements all along Oak Street, the heart of downtown. The city council adopted Gateway Planning’s form-based code, which Polikov calls the new ‘master developer.’ Essentially, form-based codes regulate the types and characteristics of buildings, streets and public spaces, but lets the market dictate uses.
Six years later, property values along Oak are up 300 percent. The bonds for infrastructure improvements will be retired in less than a decade. The place looks and feels different. New buildings and adaptive re-uses of old ones are lining its shoulders. The mayor’s dad’s car wash is still there, but it’s in a better neighborhood, and “progress,” as Polikov puts it, “doesn’t mean putting anyone out of business.” At the end of the street, there’s suddenly interest in developing housing, mixed with entertainment and offices.
Looking at how this place-making approach can be used at the regional level, Polikov then described a corridor that stretches from south of Fort Worth northeast all the way to Plano some 62 miles across the Dallas Fort Worth region. Dubbed the Cottonbelt Corridor, it’s prime territory for development, if it gets the transportation infrastructure it needs, especially connections to the region’s rapidly burgeoning rail system. Left to the public sector, this won’t happen. The metropolitan planning organizations have already trimmed their project lists by some $50 billion because federal statutes require plans to be constrained by assured future revenue.
Which, Polikov explained, invites a robust use of the “value capture” approach, whereby the underlying financing for infrastructure and development carves out a share of the economic gain to reward investors for the risk they’re undertaking. Polikov pointed to one parcel of 100 acres within this corridor and adjacent to a toll road; it’s land owned by the University of Texas at Dallas, which would appear to be a willing partner in a value-capture deal.
Market studies for this corridor pencil out at about a $10 billion value gain. But, in addition to lining up a steady chain of willing landowners, the project must negotiate the consent of multiple municipalities. Polikov says that one key is securing the consent of the Texas Legislature to create a single regional district to coordinate all the cities, counties and developers along the line.
If they do, he said, it will demonstrate that the public sector is beginning to see that it’s not political risk that should dominate these decisions, but economic risk. And that using value capture can turn that risk into almost certain rewards.