Wednesday, February 27, 2008

Rust Belt Cities as Consumer Cities: Does Providence Rhode Island = Paris?

Urban Economists continue to debate the future of the Rust Belt. Ed Glaeser has earned much praise from upstate New Yorkers for his "kind words" about Buffalo's fate. See

Other economists have also highlighted the challenges that cold Rust Belt cities face. Bruce Sacerdote paper on the Rust Belt

The New York Times is becoming a more optimistic newspaper. Perhaps the end isn't near afterall. What I find interesting about this Booster piece about Providence Rhode Island is the synergies between Brown University and Providence. Brown is becoming a more serious research university at the same time that Providence is improving. Which way does the causality go? Is it now easier for Brown to recruit star faculty like Ken Chay because it is a "consumer city"? Or as Brown has grown richer it is investing more in the city and being a good neighbor? Yale for years has had to wrestle with this issue of "playing nice".

The bigger issue here is the role that major Universities play in helping a city's image and its actual day to day quality of life in terms of culture, restaurants, book stores, young people walking around and nerds. Richard Florida's thesis on the creative class may be partially at work here but the true "exogenous" institution drawing the creative through a social multiplier effect is the major university.

If this thesis is wrong, then you name a fun , hip city that doesn't have a great university. I can think of downtown San Francisco as one counter-example but Berkeley is close.

February 27, 2008
Square Feet

Providence Begins to See Its Future Around the Corner

PROVIDENCE, R.I. — This is a city of 25 diverse neighborhoods, many with distinctive New England character, but it is Downcity that is the urban core and the city’s historical heart.

Downcity is centered on Westminster Street, an urban thoroughfare lined with a cohesive ensemble of 18th- and 19th-century neo-Classical-style and Italianate mercantile buildings, made of brick, limestone and cast iron.

Until the middle of the 20th century, it was a vibrant shopping district, perhaps the most prominent in the state, whose residents used to talk about going “downcity” rather than “downtown.” It offered chic clothing shops, jewelers, tailors, salons and a number of local department stores: Shepard’s, Peerless and Gladdings.

But once the venerable tenants left, the buildings were vacant for years. Today, different kinds of stores are opening here. Cheese shops, design stores and restaurants are setting up in these stately buildings, hoping first-floor retail spaces will capture the attention of new residents in the area.

There has long been talk of a renaissance in Downcity, which covers a 36-block area, about a quarter mile long and a third of a mile wide, and progress has been made.

“In 1990, you could have thrown a bowling ball down Westminster Street,” said Thomas Deller, director of planning and development for the city and executive director of the Providence Redevelopment Agency.

“Everything in Downcity continues to evolve,” he said. “What happens in good city planning is the ability to keep a pulse of what’s happening, to make sure that the plan is clear about what you want to achieve.” He added: “Here’s a city that has figured it out.”

Arnold B. Chace, 60, owner, president and chief executive of Cornish Associates, a real estate development firm, has been a seminal figure in the redevelopment of Downcity.

Today, there are residential lofts, a bookstore, a cafe, a college library, stores, a wine shop, restaurants, arts organizations, theater companies and a hotel in Downcity. Many occupy buildings owned by Cornish.

According to Mr. Chace, Cornish Associates has acquired eight buildings since 1991, paying as little as $3 to $10 a square foot. To date, his company has committed $80 million to restore them.

As Mr. Chace, who is known as Buff, tells it, his interest in Downcity dates to a day in 1991 when he was looking at buildings that had been foreclosed, accompanied by his twins, who were then 7 years old. “I was explaining to them about what had happened here, and my daughter asked me, ‘Why don’t you do something about it?’ ” Mr. Chace said.

That elicited a response. “The very heart of our city was in disrepair, and I became committed to rebuilding that heart,” he said.

He helped to persuade the mayor, Vincent Cianci, and the Providence Foundation, a nonprofit group that works on redevelopment, to sponsor a five-day program in 1991 to analyze the downtown and develop a master plan to revitalize its core. A leading participant was the architect and New Urbanism advocate Andrés Duany.

There were two more such planning sessions involving Mr. Duany, in 1994 and 2005, and a master plan was adopted by the city after the 1994 meeting.

For the revitalization of Downcity, Mr. Chace has been guided by the principles laid out in the plan: walkable streets; continuous retailing, with no offices on ground floors; and mixed use.

But the effort to attract retailers was undercut when the huge Providence Place Mall, with about 1.3 million square feet and 170 stores, including Nordstrom and Macy’s, opened about a half-mile away in August 1999.

Cornish Associates shifted its focus to housing. It has created 196 loft apartments by renovating the eight buildings. About 95 percent of the apartments are occupied, roughly a fifth by artists. The lofts range from 550 to 2,700 square feet and rent for $500 to $3,000 a month.

None of this could have happened without significant tax credits. “It took a major effort, changes in zoning, and getting legislation passed to make this work,” Mr. Deller said. Federal and state historic tax credits return 20 and 30 percent of the total rehabilitation expenses respectively to the developer of a project in a historic district.

In 1999, additional incentives to attract artists were passed, including a proposal pushed by Mr. Cianci that artwork created in the district would not be subject to sales tax, nor would artists be subject to state income tax.

Three universities — the University of Rhode Island, Rhode Island School of Design, and Johnson & Wales — own property in Downcity. There are also a number of arts organizations, including the Trinity Repertory Company, the Providence Performing Arts Center and the Black Repertory Theater.

AS220, a nonprofit artist group, currently owns and operates two buildings. Umberto Crenca founded the group at 220 Weybosset Street in 1985; the name, short for Artist Space 220, is supposed to evoke P. S. 1, the contemporary art center in Queens.

He began in a single room, but in 1993, Lucie Searle, a developer, assisted the organization in buying a 22,000-square-foot- building for $400,000. A second building was bought in 2005 using tax credits. AS220 is about to buy its third building for more than $1 million.

Retail spaces have been slower to fill, and this is a problem in Downcity. “Critical mass must be created for an infrastructure of services to come in,” Mr. Chace said, citing dry cleaners, groceries and drugstores as the kinds of businesses that are needed.

In 2003, Mr. Chace offered extraordinary leases to his first retail tenants. “I allowed tenants to enter deals without rent, and I took a percentage of sales,” he said. He now lists annual asking rents of around $20 a square foot. At Providence Place Mall, the annual rents are about $75 or $80 a square foot.

The attractive rents have helped attract independent shop owners. Heejun Arms, 38, opened Elsa Arms, a store selling designer clothing, one year ago on Westminster Street. She was drawn to the high ceilings. “I couldn’t find this anywhere else,” Ms. Arms said.

George Germon and Johanne Killeen, prominent Providence chefs who own the restaurant Al Forno, which has operated for 28 years in another part of the city, are about to create a new venture in Downcity. Their restaurant-wine bar, called Tini, is to open in April.

Michael Corso, 37, who has worked for Cornish Associates, opened Tazza Caffe in late 2003, signing a 10-year lease. His goal was to create a European style neighborhood espresso bar. “We have a dynamic bunch coming in here: artists, professionals, politicians,” he said.

David N. Cicilline, the current mayor, is optimistic about Downcity. “People are living here for the first time in a long time,” he said.

Mr. Crenca, the artist, notes there is more to be done, however. “We are at a very critical juncture,” he said. “Others need to step up to the plate.”