K
Klaus Philipsen
Guest
- Thread Author
- #1
The Perception
In my hometown of Baltimore it is a widespread conviction that the redevelopment of former industrial sites adjacent to downtown such as Harbor East, Harborpoint and the further out Port Covington did nothing but suck the lifeblood out of downtown and even out of neighborhoods.
The new developments did not only draw residents and jobs out of the old downtown and its neighboring older neighborhoods, opponents say, they also absorbed all the available public subsidies, TIFs, tax credits and the attention of the mayor and the city council. Furthermore these gleaming new areas are not really Baltimore, they are artificial, antiseptic and elitist, the saying goes. The real Baltimore is gritty, authentic, historic and yes a bit dirty, popular opinion would have it, and people with this belief would rather stay home than setting foot into the new developments. Which makes these assessments a bit imprecise, at least not based on actual experience.
The complaint about the focus on new shiny developments is not limited to Baltimore. Half a century ago Parisiens detested la Defense, a new city of high-rises built to absorb development pressures that jeopardized the historic core, similarly Londoners hated the new Docklands. Santiago de Chile got its Las Condes, Mexico City Polanco, both posh and seen as not representative of the city of which they are part. More recently Bostonians had to contend with the new, high-end Seaport Innovation District, sometimes described as the "Manhattan" of Boston, and Denver is booming in the RiNo district while downtown suffers from high vacancies rates. Rotterdam got Kop van Zuid, Hamburg the Hafenviertel as in house competitors to their historic cores. However, most economists, politicians and leaders would not regret today having developed those quarters.
Maybe it is presumptive to make a comparison between Baltimore and these other cities which are accepted a global metros. But lets not forget that Boston and also London had severe bouts of abandonment and decline in the 1970s and that new development was part of their turn-around story.
The Reality
Clearly the notion of unfair distribution of wealth is not only a Baltimore issue, it applies on the national level and also to many US cities. Analysis supports the popular opinion that investment and subsidies go predominantly to the already better off areas. Returning to the subject of my deeply unequal hometown of Baltimore: A report by MuniCap analyzed public subsidies in Baltimore City went and found that a disproportionate amount of money has gone to these new areas. Furthermore, subsidies and incentives are not always effective.
Out of 10 tax increment financing (TIF) districts in Baltimore two cost the city more than they yield but all are expected to provide some net profit over the longer term. However, even where TIFs provide a return on investment from a fiscal perspective, the matter of economic development is more complicated.
In Baltimore the list of companies that invested, rented or built in the newly developed areas, indeed, appears to have been mooched from older areas. Most companies have been in the area for decades occupying space in either the traditional financial district or in the surrounding counties before they moved to the new areas. This is to say, while some companies are not totally new to the region, some of them have at least been lured from the suburban office parks back into the city. Before COVID the trend of back to the city seemed unstoppable.
Demographic analysis shows that Baltimore did quite well in attracting young new talent to the city. It is less clear how much credit goes towards the brand-new developments and how much to upgraded historic buildings stock. Obviously the areas with the most new apartment buildings and conversions showed the biggest population growth while established older but underserved communities continue to lose residents. In many ways the new developments really kept the city young, to the point that the city's median age is about 3.8 lower than that of the surrounding county. It stands to reason that cities offering high end education and a certain coolness factor attract younger talent. Ultimately, cities are about people and the question of investment has to orient itself along what people want to see in their cities.
The concern that the new sucks the lifeblood out of the old is not new to Baltimore. It was already a concern in the time of urban renewal when Baltimore's downtown Charles Center was envisioned
initially and as far back as the 1950s. Even then a small band of business people were concerned that Baltimore had become stagnant in the post war years. An effort was made to offer in downtown Baltimore the type of offices, hotels and amenities that were not there at the time so that companies, investors and employees were looking for opportunities in the suburbs. Beginning in 1954, the "Committee for Downtown" addressed the commercial decline of central Baltimore with an over 40 acre masterplan developed by American urban planner and architect David A. Wallace. A $25 million bond issue put money to the promise abd delivered a modern mixed use site nearly two decades later. The success spawned an expansion to the Inner Harbor and gaining steam when developer and banker Jim Rouse and others discovered the long ailing waterfront as an area where he could place a "festival marketplace" that had already been tested in Boston.
The Cycles of Development
Today the best known building of Charles Center, an office tower by Mies van der Rohe stands nearly empty. At the base of the tower the local chapter of AIA maintains a design center. The urban renewal from back then shifted the center of gravity of Baltimore's traditional financial district south towards the water and further east along the shoreline.
The shift continued when Harbor East was developed on fallow land and is now culminated with the near full build-out of the 28 acre HarborPoint peninsula, beautifully located in the Inner Harbor, which once housed the Allied Signal chromium plant. With the HarborPlace project, Harbor East and HarborPoint Baltimore fully capitalized on a worldwide trend that turned water into a locational advantage and asset. Many other cities, including San Francisco, Boston and Seattle, did it by removing expressways separating downtown from the water. Still, Baltimore kept losing population even before the trifecta of a pandemic, online work and shopping, and AI continues to bear down on downtowns globally. Even booming cities saw their downtowns decline and once again the search is on for the next best thing, which is often a brand-new development area.
Public subsidies are supposed to cure the ailments and provoke a renewed critique of investments in new development instead of shoring up the old. Once again, the logic of the critique is that the new development accelerates the decline of the older areas.
The historic office buildings predating the initial round of urban renewal are no longer a problem. They have long been renovated and transformed into apartments and hotels aided by the trend of "back to the cities" that made downtown living cool. In Baltimore's fastest growing "neighborhood" is the old downtown. But the trophies of the 1970s urban renewal with their large open floors and their curtain walls and glass facades are now unloved stranded assets, their conversion into something different much too difficult or expensive.
If suburban flight, and malls preceded the first urban decline, it is now remote work and AI on the horizon that could equal in size and scope the decline of manufacturing half a century ago. Even recently booming cities like Boston or San Francisco are now facing large office vacancy rates, empty storefronts and bleak prospects for a reversal.
In ever faster changing trends, even the new developments with the latest in office trends, retail, restaurants and coffee shops are not immune from yje reduced demand. When the late John Paterakis who baked in Baltimore the rolls for all McDonald franchisees east of the Mississippi was browbeaten by the then Mayor Donald Schafer to buy and develop fallow industrial waterfront land with his money, he was lured with such a long-term tax abatement that the end of it coincides even this area showing signs of aging. While there can be no question that this Harbor East area injected new life into Baltimore, initial star tenants such as the Sylvan Learning Center, Whole Foods or T Rowe Price have already moved on, in some cases only for a few blocks into the next new place. In Baltimore this next door newest development area comes in shape of a peninsula which is jotting into Baltimore's Inner Harbor providing fantastic views of the old downtown skyline.
The peninsula development is a heroic act on land that used to be a hulking chromium plant that had left behind massive contamination with hexavalent chromium. But an original masterplan developed when Harbor East was still filling up grew in 30 years from 1.8 million sf of gross development to 3.8 million with way over 2 million sf of development already completed. HarborPoint's offices, mixed up with urban parks, hotels, restaurants, coffee shops and high end retail along very carefully designed streetscapes and a surrounded by a waterfront promenade is like a different world. Does it pay off for Baltimore?
Zero Sum or Growing the Pie?
Ideally economic development "grows the pie" instead of being a zero-sum game in which assets just move around like in a game of musical chairs. While Boston managed to attract many new companies, there aren't any big new newcomers at HarborPoint. But the pie still grew. Baltimore has stabilized its population and the companies moving here such as Morgan Stanley, T Rowe Price,
BGE/Constellation/Exelon grew and flourished in the new location attracting new and discerning employees. Again, it is about the people. Educated young talent can go anywhere in the US or even beyond. The new areas also follow good planning principles: Harbor East and HarborPoint seamlessly connect the Inner Harbor and Baltimore's old downtown to historic Fells Point, offering a perfect timeline of the various layers of history that make a city unique. Unfortunately viable transit is missing, because a long planned $3 bn east west rail line was killed out of political spite by a previous Governor.
Unlike old style urban renewal, none of these Baltimore examples displaced residents or viable businesses. Without development these brownfields would have remained urban wastelands where any planner or economist coming to town would asked: Why are you leaving so much potential lying fallow?
Would the areas have developed without subsidies? This is harder to tell. In the case of Baltimore, the lack of much outside demand would probably have made development too expensive to be competitive without any public seed money. Maybe the most important question is, would the old downtown be better off without the new developments? Or should Baltimore have sent whatever subsidies into the ailing disinvested neighborhoods instead, so there wouldn't be some 13,000 vacant city owned rowhouses sitting around?
New Development vs Equity
Indeed, Baltimore (and almost any other US city) has many needs and many areas not living up to the full potential. However I would argue that neither the old downtown or the inner neighborhoods would be any better off if Harbor Charles Center, Harbor East, HarborPoint or some other new brownfield areas would not have been developed or never seen a cent of subsidy.
Urban development relies on strength and anchors. Like it or not, a dollar spent in a disinvested and disadvantaged area doesn't yield the same economic results as one spent in an area of strength derived from locational advantages or close by anchors. In the examples the water is such a strength. As for anchors, Baltimore's large universities and medical campuses are anchors located adjacent to large
swaths of disinvestment. The advantage of these anchors also has been leveraged for massive new developments in the underserved areas and these developments have received just as much, if not more criticism, mostly centered on displacement, condemnation and other heavy handed strategies. In addition, the positive economic effects are also in question. However, this would have to be the topic of another article. (I have written about EBDI here and here). In contrast to Philadelphia, the two Baltimore university anchored bio-parks and their stop and go neighborhood re-investment prove that throwing large amounts of money at areas of highest need doesn't necessarily yield large economic pay-backs.
Conclusion
Reinvestment in established neighborhoods and investment in new development areas don't have to be an either-or proposition; nor do new developments nothing for older neighborhoods. Keeping a city from calcifying, aging or shrinking its tax base benefits all residents. In the case of Baltimore, it could keep its tax base stable or grow it in spite of many years of shrinking population because the newcomers earned more and paid more taxes.
Investment can also be directly leveraged to assist disadvantaged communities. Increasingly new development subsidies are tied to community benefits agreements in favor of disinvested and underserved communities. Baltimore's latest waterfront development, Port Covington, supported by a large tax increment financing (TIF) deal is tied to such a community benefits agreement.
Yielding to the criticism of the TIF deals Baltimore also launched an innovative non-contiguous TIF approach for its disinvested neighborhoods with the many vacant rowhouses. This as of yet untested approach runs on the promise that Baltimore's tax base can grow if the vacant rowhouses could be filled again and that the future taxes could leverage the needed investment now.
Baltimore has also some large subsidized investments in underserved communities such as the redevelopment of the Perkins Homes public housing complex as a large mixed use, mixed income community or the Park Heights community with the renovation of the Pimlico race track area. Critics may call all of this crumbs for the poor from the table of the rich. That may be so, but the question of the overall tax base is certainly key to keeping a city young. Adding fuel for the engine works best where there will be ongoing yields.
In a world where the rich get richer all the time and where the top 1% now hold nearly half of the global wealth and where the ultra rich can unsettle entire neighborhoods, just to build themselves a compound, it is easy to become jaded and cynical about urban development. The national housing crisis and the near universal inability to create sufficient and affordable housing add to the discomfort. The history of urban renewal is full of displacement, environmental injustice and destruction.
Still, constant renewal is not only what our bodies do with their cells, it is also what a city needs. As for the question of authenticity: It will come with time. Layers of different periods, styles, and demographic and economic conditions sitting on top or next to each other is what makes a city interesting. In the quest for building new its is urgent to ensure that tax breaks and TIFs don't undermine the future tax base and mortgage away the future of coming generations. It is equally as important to find the right balance between attracting new young, talented residents, and retaining the residents that have long made their city their home.
Klaus Philipsen, FAIA
In my hometown of Baltimore it is a widespread conviction that the redevelopment of former industrial sites adjacent to downtown such as Harbor East, Harborpoint and the further out Port Covington did nothing but suck the lifeblood out of downtown and even out of neighborhoods.
The new developments did not only draw residents and jobs out of the old downtown and its neighboring older neighborhoods, opponents say, they also absorbed all the available public subsidies, TIFs, tax credits and the attention of the mayor and the city council. Furthermore these gleaming new areas are not really Baltimore, they are artificial, antiseptic and elitist, the saying goes. The real Baltimore is gritty, authentic, historic and yes a bit dirty, popular opinion would have it, and people with this belief would rather stay home than setting foot into the new developments. Which makes these assessments a bit imprecise, at least not based on actual experience.
[td]
[/td]
[td]
Baltimore's HarborPoint (Photo Philipsen)
[/td]The complaint about the focus on new shiny developments is not limited to Baltimore. Half a century ago Parisiens detested la Defense, a new city of high-rises built to absorb development pressures that jeopardized the historic core, similarly Londoners hated the new Docklands. Santiago de Chile got its Las Condes, Mexico City Polanco, both posh and seen as not representative of the city of which they are part. More recently Bostonians had to contend with the new, high-end Seaport Innovation District, sometimes described as the "Manhattan" of Boston, and Denver is booming in the RiNo district while downtown suffers from high vacancies rates. Rotterdam got Kop van Zuid, Hamburg the Hafenviertel as in house competitors to their historic cores. However, most economists, politicians and leaders would not regret today having developed those quarters.
Maybe it is presumptive to make a comparison between Baltimore and these other cities which are accepted a global metros. But lets not forget that Boston and also London had severe bouts of abandonment and decline in the 1970s and that new development was part of their turn-around story.
The Reality
Clearly the notion of unfair distribution of wealth is not only a Baltimore issue, it applies on the national level and also to many US cities. Analysis supports the popular opinion that investment and subsidies go predominantly to the already better off areas. Returning to the subject of my deeply unequal hometown of Baltimore: A report by MuniCap analyzed public subsidies in Baltimore City went and found that a disproportionate amount of money has gone to these new areas. Furthermore, subsidies and incentives are not always effective.
[td]
[/td]
[td]
Mexico City: Nuevo Polanco - Museo Soumaya
(Photo Philipsen)
[/td](Photo Philipsen)
Out of 10 tax increment financing (TIF) districts in Baltimore two cost the city more than they yield but all are expected to provide some net profit over the longer term. However, even where TIFs provide a return on investment from a fiscal perspective, the matter of economic development is more complicated.
In Baltimore the list of companies that invested, rented or built in the newly developed areas, indeed, appears to have been mooched from older areas. Most companies have been in the area for decades occupying space in either the traditional financial district or in the surrounding counties before they moved to the new areas. This is to say, while some companies are not totally new to the region, some of them have at least been lured from the suburban office parks back into the city. Before COVID the trend of back to the city seemed unstoppable.
[td]
[/td]
[td]
Baltimore HarborPoint central plaza (Photo Philipsen)
[/td]Demographic analysis shows that Baltimore did quite well in attracting young new talent to the city. It is less clear how much credit goes towards the brand-new developments and how much to upgraded historic buildings stock. Obviously the areas with the most new apartment buildings and conversions showed the biggest population growth while established older but underserved communities continue to lose residents. In many ways the new developments really kept the city young, to the point that the city's median age is about 3.8 lower than that of the surrounding county. It stands to reason that cities offering high end education and a certain coolness factor attract younger talent. Ultimately, cities are about people and the question of investment has to orient itself along what people want to see in their cities.
The concern that the new sucks the lifeblood out of the old is not new to Baltimore. It was already a concern in the time of urban renewal when Baltimore's downtown Charles Center was envisioned
[td]
[/td]
[td]
Historic Baltimore: Washington Monument
(Photo: Philipsen)
[/td](Photo: Philipsen)
initially and as far back as the 1950s. Even then a small band of business people were concerned that Baltimore had become stagnant in the post war years. An effort was made to offer in downtown Baltimore the type of offices, hotels and amenities that were not there at the time so that companies, investors and employees were looking for opportunities in the suburbs. Beginning in 1954, the "Committee for Downtown" addressed the commercial decline of central Baltimore with an over 40 acre masterplan developed by American urban planner and architect David A. Wallace. A $25 million bond issue put money to the promise abd delivered a modern mixed use site nearly two decades later. The success spawned an expansion to the Inner Harbor and gaining steam when developer and banker Jim Rouse and others discovered the long ailing waterfront as an area where he could place a "festival marketplace" that had already been tested in Boston.
The Cycles of Development
Today the best known building of Charles Center, an office tower by Mies van der Rohe stands nearly empty. At the base of the tower the local chapter of AIA maintains a design center. The urban renewal from back then shifted the center of gravity of Baltimore's traditional financial district south towards the water and further east along the shoreline.
[td]
[/td]
[td]
Mies van der Rohe tower at Charles Center
Baltimore (Photo: Philipsen)
[/td]Baltimore (Photo: Philipsen)
The shift continued when Harbor East was developed on fallow land and is now culminated with the near full build-out of the 28 acre HarborPoint peninsula, beautifully located in the Inner Harbor, which once housed the Allied Signal chromium plant. With the HarborPlace project, Harbor East and HarborPoint Baltimore fully capitalized on a worldwide trend that turned water into a locational advantage and asset. Many other cities, including San Francisco, Boston and Seattle, did it by removing expressways separating downtown from the water. Still, Baltimore kept losing population even before the trifecta of a pandemic, online work and shopping, and AI continues to bear down on downtowns globally. Even booming cities saw their downtowns decline and once again the search is on for the next best thing, which is often a brand-new development area.
Public subsidies are supposed to cure the ailments and provoke a renewed critique of investments in new development instead of shoring up the old. Once again, the logic of the critique is that the new development accelerates the decline of the older areas.
The historic office buildings predating the initial round of urban renewal are no longer a problem. They have long been renovated and transformed into apartments and hotels aided by the trend of "back to the cities" that made downtown living cool. In Baltimore's fastest growing "neighborhood" is the old downtown. But the trophies of the 1970s urban renewal with their large open floors and their curtain walls and glass facades are now unloved stranded assets, their conversion into something different much too difficult or expensive.
[td]
[/td]
[td]
Hamburg Hafen City - Elbphilharmonie
(Photo: Philipsen)
[/td](Photo: Philipsen)
If suburban flight, and malls preceded the first urban decline, it is now remote work and AI on the horizon that could equal in size and scope the decline of manufacturing half a century ago. Even recently booming cities like Boston or San Francisco are now facing large office vacancy rates, empty storefronts and bleak prospects for a reversal.
In ever faster changing trends, even the new developments with the latest in office trends, retail, restaurants and coffee shops are not immune from yje reduced demand. When the late John Paterakis who baked in Baltimore the rolls for all McDonald franchisees east of the Mississippi was browbeaten by the then Mayor Donald Schafer to buy and develop fallow industrial waterfront land with his money, he was lured with such a long-term tax abatement that the end of it coincides even this area showing signs of aging. While there can be no question that this Harbor East area injected new life into Baltimore, initial star tenants such as the Sylvan Learning Center, Whole Foods or T Rowe Price have already moved on, in some cases only for a few blocks into the next new place. In Baltimore this next door newest development area comes in shape of a peninsula which is jotting into Baltimore's Inner Harbor providing fantastic views of the old downtown skyline.
The peninsula development is a heroic act on land that used to be a hulking chromium plant that had left behind massive contamination with hexavalent chromium. But an original masterplan developed when Harbor East was still filling up grew in 30 years from 1.8 million sf of gross development to 3.8 million with way over 2 million sf of development already completed. HarborPoint's offices, mixed up with urban parks, hotels, restaurants, coffee shops and high end retail along very carefully designed streetscapes and a surrounded by a waterfront promenade is like a different world. Does it pay off for Baltimore?
Zero Sum or Growing the Pie?
Ideally economic development "grows the pie" instead of being a zero-sum game in which assets just move around like in a game of musical chairs. While Boston managed to attract many new companies, there aren't any big new newcomers at HarborPoint. But the pie still grew. Baltimore has stabilized its population and the companies moving here such as Morgan Stanley, T Rowe Price,
[td]
[/td]
[td]
State of the art office building - T Rowe Price
at Baltimore, KPF Architects (Photo: Philipsen)
[/td]at Baltimore, KPF Architects (Photo: Philipsen)
BGE/Constellation/Exelon grew and flourished in the new location attracting new and discerning employees. Again, it is about the people. Educated young talent can go anywhere in the US or even beyond. The new areas also follow good planning principles: Harbor East and HarborPoint seamlessly connect the Inner Harbor and Baltimore's old downtown to historic Fells Point, offering a perfect timeline of the various layers of history that make a city unique. Unfortunately viable transit is missing, because a long planned $3 bn east west rail line was killed out of political spite by a previous Governor.
Unlike old style urban renewal, none of these Baltimore examples displaced residents or viable businesses. Without development these brownfields would have remained urban wastelands where any planner or economist coming to town would asked: Why are you leaving so much potential lying fallow?
Would the areas have developed without subsidies? This is harder to tell. In the case of Baltimore, the lack of much outside demand would probably have made development too expensive to be competitive without any public seed money. Maybe the most important question is, would the old downtown be better off without the new developments? Or should Baltimore have sent whatever subsidies into the ailing disinvested neighborhoods instead, so there wouldn't be some 13,000 vacant city owned rowhouses sitting around?
New Development vs Equity
Indeed, Baltimore (and almost any other US city) has many needs and many areas not living up to the full potential. However I would argue that neither the old downtown or the inner neighborhoods would be any better off if Harbor Charles Center, Harbor East, HarborPoint or some other new brownfield areas would not have been developed or never seen a cent of subsidy.
Urban development relies on strength and anchors. Like it or not, a dollar spent in a disinvested and disadvantaged area doesn't yield the same economic results as one spent in an area of strength derived from locational advantages or close by anchors. In the examples the water is such a strength. As for anchors, Baltimore's large universities and medical campuses are anchors located adjacent to large
[td]
[/td]
[td]
Change in Baltimore's old downtown with
former urban renewal in the background
(Photo: Philipsen)
[/td]former urban renewal in the background
(Photo: Philipsen)
swaths of disinvestment. The advantage of these anchors also has been leveraged for massive new developments in the underserved areas and these developments have received just as much, if not more criticism, mostly centered on displacement, condemnation and other heavy handed strategies. In addition, the positive economic effects are also in question. However, this would have to be the topic of another article. (I have written about EBDI here and here). In contrast to Philadelphia, the two Baltimore university anchored bio-parks and their stop and go neighborhood re-investment prove that throwing large amounts of money at areas of highest need doesn't necessarily yield large economic pay-backs.
Conclusion
Reinvestment in established neighborhoods and investment in new development areas don't have to be an either-or proposition; nor do new developments nothing for older neighborhoods. Keeping a city from calcifying, aging or shrinking its tax base benefits all residents. In the case of Baltimore, it could keep its tax base stable or grow it in spite of many years of shrinking population because the newcomers earned more and paid more taxes.
Investment can also be directly leveraged to assist disadvantaged communities. Increasingly new development subsidies are tied to community benefits agreements in favor of disinvested and underserved communities. Baltimore's latest waterfront development, Port Covington, supported by a large tax increment financing (TIF) deal is tied to such a community benefits agreement.
Yielding to the criticism of the TIF deals Baltimore also launched an innovative non-contiguous TIF approach for its disinvested neighborhoods with the many vacant rowhouses. This as of yet untested approach runs on the promise that Baltimore's tax base can grow if the vacant rowhouses could be filled again and that the future taxes could leverage the needed investment now.
Baltimore has also some large subsidized investments in underserved communities such as the redevelopment of the Perkins Homes public housing complex as a large mixed use, mixed income community or the Park Heights community with the renovation of the Pimlico race track area. Critics may call all of this crumbs for the poor from the table of the rich. That may be so, but the question of the overall tax base is certainly key to keeping a city young. Adding fuel for the engine works best where there will be ongoing yields.
[td]
[/td]
[td]
Public housing redevelopment as mixed use - Baltimore
(Photo: Philipsen)
[/td](Photo: Philipsen)
In a world where the rich get richer all the time and where the top 1% now hold nearly half of the global wealth and where the ultra rich can unsettle entire neighborhoods, just to build themselves a compound, it is easy to become jaded and cynical about urban development. The national housing crisis and the near universal inability to create sufficient and affordable housing add to the discomfort. The history of urban renewal is full of displacement, environmental injustice and destruction.
Still, constant renewal is not only what our bodies do with their cells, it is also what a city needs. As for the question of authenticity: It will come with time. Layers of different periods, styles, and demographic and economic conditions sitting on top or next to each other is what makes a city interesting. In the quest for building new its is urgent to ensure that tax breaks and TIFs don't undermine the future tax base and mortgage away the future of coming generations. It is equally as important to find the right balance between attracting new young, talented residents, and retaining the residents that have long made their city their home.
Klaus Philipsen, FAIA