Building a Powerful Toolbox

Jeff Green & Jerry Hoffman/Shopping Center Business - As increasingly sophisticated and successful public-private partnerships come together with a renewed appreciation for the power and potential of compelling retail and mixed-use environments, a number of exciting projects are emerging–and reshaping urban landscapes across the country.

Such projects can provide a jolt of commercial and social energy into neighborhoods and communities, transforming empty lots and underperforming spaces, infusing municipalities with dynamic retail and mixed-use options, and creating true destinations with a memorable and engaging sense of place.

To optimize on these transformative developments and redevelopments, municipalities need to master a very specific skill set. Publicly-elected decision-makers, civic and community leaders, and municipal agency professionals should have a strong grasp of how to use the tools that cities have in their “toolbox” to assist the owners and developers of mixed-use projects. They should be familiar with strategies and techniques for recruiting and working with developers, property owners, tenant reps and leasing teams, and should have keen insight into the ways in which a well-conceived public-private partnership is essential in transforming a distressed shopping center/mall into a vibrant city-space.

This is particularly urgent in secondary and tertiary markets, where one or two developments can make a relatively dramatic difference, and competition with neighboring municipalities increases the urgency to add compelling spaces that attract popular brands and businesses.

Financial tools

The most basic (and arguably the most important) tools in the development toolbox remain those public-private financial instruments and arrangements. These tools can green-light projects that would otherwise not get built because the margins are simply too fine for private developers to take the risk. The ability of the municipality to use tools like tax abatements, tax incentives, and dedicated sales tax programs to support infrastructure improvements remains a potential difference-maker, particularly for both individual projects and for larger multi-site initiatives. While the basic tools have not appreciably changed over the last few decades, they have become both more popular and more accepted as communities are able to see successful examples of similar projects that were partly funded through these mechanisms.

Context

The big picture isn’t just a vague notion: when it comes to developing with public-private partnerships, it’s a very concrete (and very important) piece of the design and development puzzle. First and foremost, civic and community leaders need to be thinking about a cohesive and coherent master plan for not only the latest proposed project, but for the municipality as a whole. With a detailed master plan and a comprehensive market and feasibility analysis in hand, each component of a proposed project–retail, office, dining/entertainment, multifamily or hotel–can be placed into context not only within the project and across the municipality, but around the region as well.

That same principle applies whether you are evaluating a single site or considering multiple sites. The question that needs to be answered is not just what is supportable on this one piece of property, but what is supportable in the larger civic, market and regional context. A sophisticated market analysis is critically important in order to understand that context. The analyses are all the more essential when neighboring towns or communities are vying for the same uses. The municipality that executes a thoughtfully conceived center and establishes first-to-market status for certain brands or specific uses can get a significant leg up on the competition.

Stakeholders

Conducting a comprehensive market and feasibility analysis also helps municipalities facilitate discussions between key stakeholders.  This can improve the coordination and integration of different viewpoints and priorities into a cohesive development.  Among the most valuable tools in the development toolbox are the stakeholders themselves, and getting everyone engaged both in the early conceptual discussions and throughout the management and construction stages of the process.  The earlier the buy-in from those stakeholder groups, the better the outcome will be.

In addition to the wheel-greasing properties of collaborative engagement and popular buy-in, the project can be enhanced by exposure to inspired ideas, valuable feedback, and a wide range of different perspectives. Projects that benefit from stakeholder engagement are more likely to become a successful resource that truly serves the whole community. While involving stakeholders can be a complex challenge, the result is a project that is stronger in the long run. Key stakeholders include business owners, developers, leasing or tenant reps, community leaders, city councils, school board members, and other publicly elected officials.

Relationships

For stakeholders to work together in a positive, productive and collaborative fashion, relationships between different people and parties must be nurtured and maintained. The strength of both personal and professional relationships plays an important part in any complex project, but the inherently collaborative nature of a public-private initiative makes those relationships critically important. In some respects, those relationships are even more important in secondary and tertiary markets, where everyone knows each other, and the connections between different stakeholders tend to be more pronounced and interwoven. Even projects in larger markets often hinge on impacts and insights that disproportionately affect smaller communities/neighborhoods within those markets. The result is an irony that those outside the industry may find surprising: one of the most important tools in a brick-and-mortar business is the power and possibility of human connections.