Urban CPR: Community. Preservation. Resurgence

By Stephanie Meeks

Urban CPRThank you for the opportunity to speak with you here in this historic and stately sanctuary. The Masonic Temple and the city of Detroit are the perfect venues for my talk today, and I am honored to have the occasion to address the distinguished Detroit Economic Club. 

I am also pleased that our National Main Street Center is in town hosting a conference this week. This subsidiary of the National Trust has worked with nearly 2,000 communities over the past three decades to change the way they think about deploying older buildings to revitalize commercial districts. The Main Street Board of Trustees is here with us today. Welcome.

I will have a little more to say about Main Street later, but it might interest you to know its three-day meeting ends tomorrow and will attract more than 1,000 preservationists to your city.  So you can expect to see them roaming the streets for a firsthand lesson about Detroit’s resilience and resourcefulness.

Now, whatever your thoughts are about historic preservationists, there are two, I am certain, all of you in Detroit know well: Henry Ford and Jack White. I bet you never thought you would see the two of them on the same slide!  Preservation has a way of making interesting bedfellows.

Ford, who originally thought very little of history, uttered some colorful language to underscore this point.  I quote:  “I don’t know much about history, and I wouldn’t give a nickel for all the history in the world. It means nothing to me. History is more or less bunk. It's tradition. We don't want tradition. We want to live in the present, and the only history that is worth a tinker's damn is the history we make today.”

He had a change of heart after Detroit grew to epic proportions and began to lose some of its buildings. He went on to collect historic structures—residential, commercial, and industrial architecture—when he created Greenfield Village, what became the first outdoor museum in the world, right here in Dearborn, MI. Ford, you might say, came to understood the value of older buildings.

As I stand in this amazing place, I also cannot help but think of your native son Jack White, formerly of the White Stripes. Yes, he is a preservationist, too, although he might not call himself by that name. But in my mind, the rock star’s generous financial gift to pay the temple’s taxes last year qualifies him as a certified member of our preservation family. White, you might say, understands the value of this historic building very well. 

Ford and White represent what has long characterized the work of preservationists. Creating museums of historic buildings and protecting landmarks like the one we are in today. And that work must continue. But there is an even bigger opportunity.  An opportunity, in the words of Henry Ford, to make history today. 

I am here with you in Detroit because I want to talk about cities, and specifically how we can move cities forward, making them more dynamic and livable by getting the most out of historic and older buildings. I also want to demonstrate why certain places work, and what can be done to improve those that do not. 

Now you may be thinking, with all the challenges facing Detroit these days, historic preservation may seem like a relatively minor concern—a luxury this city cannot afford to worry about given other, seemingly more pressing issues.

But I want to challenge that perception as I share how cities like Detroit can embrace historic preservation as a central part of any strategy for economic growth and urban development.  In the process, I hope you will think differently about the buildings in a real estate portfolio you control, those held by the City in the public trust, and even the neighborhood where you live.

Today, I will demonstrate that areas with a mix of older, smaller buildings perform better than districts with larger, newer structures when tested against a range of economic, social and environmental outcomes.

Our research at the National Trust is leading to a better understanding of the relationship between a city’s traditional places of commerce and its future prosperity. Using big data analytics, such as cell phone usage patterns and combining it with more traditional neighborhood surveying techniques, our research team— led by my colleague Mark Huppert, who is here with me today and can answer any questions that you may have—has uncovered how cities can use older commercial districts and corridors to achieve a competitive advantage.

Just last week, we released a groundbreaking report, “Older, Smaller, Better: Measuring How the Character of Buildings and Blocks Influences Urban Vitality.” We have copies available to share with you today.  It is an exciting and in-depth look at Washington, D.C.; San Francisco and Seattle and highlights neighborhoods in those cities—places that were not such hot spots just a few years ago, but which are working today. Their rise from tough times has implications for Detroit’s future as well, one reason I thought this would be the perfect place to share the report’s findings. 

As preservationists, we have a fondness for old buildings and historic neighborhoods, and now we have the empirical analysis to underpin the argument that incorporating older and historic buildings can jumpstart the revitalization of communities.

Across America, cities are becoming younger and more diverse, and our research shows how new investment and old buildings together are creating the kind of livable and dynamic places that this upcoming generation of workers prefers to call home. The research also shows how preservation can help generate more creative jobs and sustain greater population and commercial density than investments in newer, large-scale development are able to achieve.

The statistical analysis also teases out some interesting, underlying reasons why young people seem to love these older places. It shows higher cell phone activity on weekends and evenings, indicating that these places are magnets for restaurants, bars, and other places where friends like to meet up. Measures of walkability and lots of business listings show that these places are convenient. And real estate indicators show that these places are reservoirs of affordability for start-up businesses and first time workers.

Based on some of these metrics, Detroit is already attracting the creative class. The barrier to entry for start-up businesses may be lower here than they are in other cities where older buildings are not as affordable, or as plentiful. 

So, as I talk about the cities mentioned in the study, think about Detroit, which has some of the most striking collections of pre-depression buildings in the U.S., but many have been sitting vacant for decades, waiting for economic revival and a new lease on life. 

Take Washington, D.C., the home of the National Trust. There is an emerging, 12-block enclave there known as the H Street Corridor, located just behind the Union Station train depot. The area is nationally recognized as a valuable historic place—one of the last intact “riot corridors” from the 1960s. And a diverse building stock is aiding its robust transition.

Ranked number six on Forbes magazine’s list of “America’s Best Hipster Neighborhoods,” the corridor is lined with narrow, century-old two- and three-story homes and commercial blocks housing local retailers, restaurants, and bars.

The young people who gather there might say, “it is a hot, happening place,” particularly after the sun goes down. Its residents, whose median age is about 35—younger than residents in areas of the city with the newest, largest buildings—would agree with this. 

To give you a sense of the businesses that are located there, the National Trust held a holiday party at a place called the H Street Country Club two years ago. This funky restaurant offers great Mexican food and has a fun rooftop deck that attracts crowds, but the real draw is the mini-golf course inside.  

But of particular interest to us, and what our data shows, is: one, that H Street has a great mix of old and new buildings; two, it hosts a higher concentration of new businesses, women and minority-owned businesses, and non-chain businesses than D.C. as a whole. 

The third point is that H Street’s Walk Score—which measures proximity to basic neighborhood amenities such as stores, parks, and restaurants—and its population density are also higher than the local average. 

What the area has going for it are fine-grained blocks with buildings of various ages. Both of these characteristics support people across the economic spectrum. And they accommodate the ever-changing needs of society—from clothing stores to a performing arts center. Older, smaller buildings like the ones found on H Street house a greater concentration of creative jobs per square foot, as evidenced by the study’s linkage of business listings to specific blocks. 

And according to H Street Main Street, a part of the National Main Street Center’s network of more than 1,000 communities across the country that employ preservation-based strategies to revitalize traditional business districts, the H Street Corridor actually created more than 250 new businesses, and added close to 3,000 jobs, in just over a decade. 

Entrepreneur Erin Losie partnered with her brother to introduce a fitness gym in the neighborhood and had this to say before launch day: “We were hoping to have 20 clients when we opened. Now, as soon as we open, we’re going to have to look to expand.” 

Overall, the report found that older business districts provide affordable, flexible space for entrepreneurs from all backgrounds. This allows for a variety of uses and income levels within the corridor. You might say, here the butcher, the baker, the candlestick-maker is very likely to work alongside the artist, the techie, the local filmmaker.

Mid Market San FranciscoThe same can be said about other emerging neighborhoods, such as Mid-Market in San Francisco. Mid-Market, decimated by the 1906 earthquake and fire and then quickly rebuilt, is now in the midst of another high-profile transformation. Known for many years as a down-at-the-heels area of social service delivery sites and single room occupancy hotels, the neighborhood, also known as Central Market, is evolving rapidly to include tech firms, arts organizations, and market rate housing.

Still, the area offers a range of residential rents and is highly diverse in its racial and ethnic makeup. Many low- and mid-rise early 20th century commercial buildings—including theaters, government buildings, and hotels—dot the landscape. A year-round farmers’ market is interspersed with a gritty mix of restaurants and retailers, with a few new businesses catering to young professionals. The area is still in transition but it is showing us some interesting ways to move neighborhoods in this direction.

Three years ago, for example, San Francisco began offering tax incentives to businesses as a way to encourage them to move into Mid-Market to spur activity. The strategy is working. A payroll-tax exemption has attracted entrepreneurs and those in the creative economy and is helping to revitalize the neighborhood, which—fortunately—has experienced very little demolition over the years.

Twitter, the big social networking service, fell in love with and moved into an art deco furniture mart building in the Mid-Market neighborhood.  Todd Rufo, a San Francisco economic development officer, had this to say: “You had a once vacant and blighted area that is now a gravitational center for some of the most innovative companies in the world.”

The merchant services and mobile payments firm, Square; along with Spotify, a digital music service; and Dolby, the audio specialist—are also now located in historic buildings. Together, their presence has not only sparked new, high density development on vacant parcels and surface parking lots, but it has also led to an influx of vibrant new small businesses and arts groups. 

The numbers really do tell the story. Just a few years ago, Mid-Market had a vacancy rate hovering around 30 percent. This has fallen by a third, and at the same time, the area has had a 21 percent increase in sales-tax revenue. 

In Seattle, a 26-square-block area called Pike-Pine is generating a lot of buzz. Once the setting for the growing grunge rock scene in the early 1990s, it is now a cultural hive of restaurants and nightclubs and the center of Seattle’s L-G-B-T-Q community. The neighborhood also has a reputation for doing small-scale urban infill the right way. 

But in the early 20th century, it was known as “auto row” because of the car dealerships and other car-oriented businesses that dominated the area. Its pre-war buildings—made of solid concrete or masonry, standing three to four stories high and equipped with large garages and bay doors—set Pike-Pine apart from other city neighborhoods and serve as the area’s signature architectural form. 

Because of their design, the buildings have been adapted for reuse as nightclubs, cafes and coffee shops. I had the occasion to visit a great independent bookstore there, The Elliott Bay Book Company, which relocated to the area about four years ago and occupies space in a historic Ford warehouse dating back to the early 1900s. “The neighborhood is one of incredible vitality,” said its owner, Peter Aaron. He moved the bookstore from a less lively location where it resided for 36 years.

One thing we know from our report is that older commercial and mixed-use districts have greater population density —the number of people per square mile—than streets with large, new buildings. This is especially true in Pike-Pine, where the population density is high at nearly 20,000 people per square mile. The Seattle city average is close to 12,000.

What is driving this trend? Why are younger people and creative professionals flocking to America’s inner cities? I can tell you much more than economics is driving this trend back to older buildings and neighborhoods. People and businesses are seeking authentic urban experiences that cannot be manufactured. So it is not unusual for them to make their way into historic areas to enjoy the unique architecture, the human scale of the buildings, the walkability factor, and neighborhood character.

The Knight Foundation of Miami, Florida, documented this “feel good” vibe in a study of 43,000 residents in 26 cities. It found the factors that inspired the greatest feelings of attachment to communities were things like a variety of social offerings, how welcoming a place is, and a community’s aesthetics. The single category of “social offerings”—which include arts and cultural opportunities, good places to meet people, and a vibrant nightlife—was the top factor in every community studied. 

What is so exciting is that our new research shows empirically that elements like these are found most often in older neighborhoods, including places like Corktown and the Villages of Detroit here in the Motor City.

So, what can we do? To get the most out of historic and older buildings requires more than a notion. It requires action. We now know, from the insights offered in our report, that how we build, and what type of structures we maintain, matters tremendously to the success of our communities. While people have been pushing density above all else as the way to grow cities and keep them vibrant … you may recall Ed Glaeser’s book, The Triumph of the City, which got a lot of attention for emphasizing density’s role in creating successful cities … density is not the only answer.

What this means for Detroit and other cities is that we must make building reuse a priority to help revitalize the urban core, and by clearing away the red tape, we open the door to help create the kind of thriving neighborhoods we studied in these other cities. 

Recently, we partnered with the Urban Land Institute in an innovative effort to encourage more building reuse in downtown Los Angeles. The success of our Partnership for Building Reuse pilot program has already led to similar research projects in Baltimore and Philadelphia, and will expand to two other cities later this year.

The partnership brings together community groups, real estate developers, and civic leaders to find ways to make it easier to reuse and retrofit older buildings.  And it led to several recommendations in Los Angeles, including modernizing land use policies and removing financial, technical, and regulatory barriers to restore older buildings. 

Changes to ordinances, zoning codes, and regulations were necessary to allow for a more business-friendly environment for developers who seek to repurpose old buildings. We found that innovative public policy can make all the difference between a building that sits vacant and one that actively contributes to the neighborhood.

Let me give you an example that I think is very powerful. In 1999, Los Angeles passed a carefully targeted Adaptive Reuse Ordinance. Over a 15 year period, this generated 14,000 new housing units in older buildings. This in turn spurred sensitive infill construction. And the next thing you know, the population of downtown Los Angeles almost tripled. 

Los Angeles removed regulatory barriers on eligible projects, provided incentives and helped make it possible to repurpose more than 60 historic buildings as apartments, lofts, and hotels, many 20th century buildings which had sat vacant for decades. Although more change is still needed to overcome some of the obstacles mentioned earlier, this is real progress and a wonderful story that can be replicated in cities across America, including, I believe, right here in Detroit. 

As the Los Angeles example shows, focusing these strategies in targeted areas of opportunity can be particularly effective. Here in Detroit, new survey data that is now being collected, along with analytical approaches—such as those used in our new report—can help identify concentrations of solid, viable older buildings with potential for adaptive use.   

I hope I have made the case that preservation can be a helpful tool in building urban vitality. 

So, too, can the preservation community. We are here to work with you as you help build your future and grow your city. Not only at the National Trust, which has more than 65 years of experience protecting America’s cultural resources, but also right here in Michigan, with the expertise and resources offered by Nancy Finegood and her organization, the Michigan Historic Preservation Network, as well as Preservation Detroit. 

Thanks to the Detroit Blight Removal  Task Force, these two organizations were able to work together recently to conduct a precedent setting “preservation overlay” to the city’s mapping project, which catalogs every single troubled property in Detroit.

This survey is significant because we have been invited to provide an alternative view and bring a preservation perspective to the decision making process.  Of the 18,000 properties eligible for the National Register, less than a handful were identified as not being good candidates for rehabilitation. 

It is our hope that when the report is released by the Blight Task Force in the coming days, it will include a preservation solution for many of Detroit’s vacant properties. The opportunity to turn them from seeming liabilities to significant community assets could make all the difference to the Detroit cityscape and its economy. 

After all, preservation is about keeping buildings alive, in active use, and relevant to the needs of the people and the cities that surround them. It is about building a bigger, better and brighter future by creating jobs, spurring revitalization and improving the economic health of the nation. When done correctly, it can elevate and accelerate a city’s effort to remake itself. It is about making history today. 

Take the Green Garage here in Detroit. It is a living laboratory and co-working space for “triple-bottom-line sustainable enterprise,” such as the Social Club Grooming Company. Up until three years ago, the building was a vacant 1920s warehouse in Midtown. It had three distinct, earlier lives: as a Model T showroom, a garage, and a shoe repair supply facility. Now, I understand, the building is a metaphor for urban reinvention. 

On a much larger scale, Dan Gilbert, the Chairman of Quicken Loans, is working to revive the Woodward Avenue corridor. As most of you know, he is purchasing and restoring historic buildings along that Avenue with the goal of bringing density and activity to the surrounding two-square-mile area. 

As I travel across the country, I hear from developers again and again that their historic rehab projects – similar to the Woodward Avenue project -- would not be possible without federal and state tax credits.

Just last month, several developers met at the National Trust for a Historic Tax Credit Summit. They were passionate about informing Congress, the Administration, and the public about the tax credit’s importance to fueling revitalization, leveraging investment, and creating safer neighborhoods. 

Developers and entrepreneurs here in Detroit have served the community well by taking advantage of the federal historic rehabilitation tax credit over the years.

$681 MillionDoing so leveraged $681 million in private investment to complete 57 historic rehab projects. These projects, undertaken roughly in the past decade, also created more than 9,000 jobs and introduced new life into some of the city’s struggling neighborhoods. 

In fact, both federal and state governments benefit from historic tax credit programs. At the federal level, we know that these credits generate a strong return on investment.  These credits actually return more to the Treasury than they cost.  Let me repeat that: they return more to the Treasury than they cost. 

For every $1 in credit, research shows that $1.25 in revenue comes back to the Treasury.  At the state level, these incentives return one-third of the state’s investment back in state taxes BEFORE credits are awarded and the building is placed into service. 

Despite these benefits, the federal tax credit is under attack in Congress. Now more than ever, we need to focus not only on preserving it, but also improving it.  

I would like to propose an “out of the box” idea to help with Detroit’s revitalization. You may not know this, but after Hurricane Katrina, city and state leaders in Louisiana successfully lobbied Congress for a temporary increase in the federal historic tax credit–from 20 percent to 26 percent—to help rebuilding efforts in New Orleans and neighboring areas that were designated disaster areas. 

Just last week, Senators Schumer, Bennet, Booker, Landrieu, Menendez, Rockefeller and Udall introduced the National Disaster Tax Relief Act of 2014, which would increase the historic rehabilitation tax credit from 20 to 26 percent for historic buildings affected in federally declared disaster zones in 2012 and 2013.   

But I would argue that natural disasters need not be the only time our hardest hit areas receive tax incentives to rebuild.  I believe financial crises in our legacy cities should have similar opportunities, and a temporary increase in the amount of the historic tax credit is an effective and proven approach to kick-start the rebuilding process.  

So I want to propose that Detroit join with these Congressional leaders and ask that the same opportunity for regrowth be given to this city.  

I also urge Michigan to re-establish the state historic tax credit, which was cut from its budget nearly three years ago. Before it was eliminated, $42.3 million in state historic tax credits were approved.  This was an effective job creation and community revitalization tool for driving re-investment in your historic neighborhoods and commercial corridors. Coupled with the federal tax credit, Michigan’s state credit could be the difference between a Detroit that survives and a Detroit that thrives. 

Unfortunately, Michigan is moving against the tide when it comes to state historic tax credits.  Wisconsin recently passed legislation to double its historic tax credit based on the economic promise of historic redevelopment.  And in Texas, where there is no state income tax, they found a way to make a state historic tax credit program work.  Detroit simply cannot afford to put itself out of competition for historic reinvestment.  

And so I will leave you with this: you have tremendous resources within reach that will make your city grow faster and be more attractive to the creative class, working class and professionals wanting affordable neighborhoods of character. 

For in the end, great societies are remembered not only for what they create, but also, for what they refuse to destroy. 

The National Trust looks forward to working with you to make history today, built on the foundations that have served you so well in the past. 

Thank you.

 

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The National Trust for Historic Preservation, a privately funded nonprofit organization, works to save America’s historic places.
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