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PUBLIC-PRIVATE PACTS

Developers, municipal leaders explore ways to help each other prosper

By Dave Bodamer

Mayor David L. Armstrong of Louisville, Ky.; Mayor Ed Garza of San Antonio; and James E. Maurin, chairman of Stirling Properties

No one needs to preach to Baltimore’s Mayor Martin O’Malley about the importance of the relationship between public officials and the retail development industry. That city’s Inner Harbor revitalization project, which includes The Rouse Co.’s HarborPlace, is a classic example of the fruit that such a partnership can bear.

This year’s ICSC Spring Convention made one thing abundantly clear: Retail developers and municipal leaders need each other. Though developers still dominate the Leasing Mall, more and more municipalities have been coming to the convention each year, which demonstrates the heightened role that the public-private partnership is playing in the industry. A total of 36 municipal exhibitors had booths this year, ranging from major cities such as Baltimore to such smaller, suburban communities as Santee, Calif. (population 58,000). All came with the same goals: to pitch ongoing projects or lure new development. Mayors and other public officials also featured prominently in panel discussions.

“We want to put Baltimore on the map and to let people know, even though we’ve had a lot of development on the waterfront, that we’ve got other opportunities as well,” said Marshall Snively, economic development and planning director at the Downtown Partnership of Baltimore.

It was also a chance for officials to showcase what they have already achieved through alliances with developers.

“Essentially, we took a backwater area and made it the city’s front door,” said O’Malley, who has been widely praised for turning Baltimore’s fortunes around. “Now we’re trying to do that in the rest of the city.”

Though O’Malley and three other U.S. mayors — David L. Armstrong of Louisville, Ky., Ed Garza of San Antonio and Patrick Hays of North Little Rock, Ark. — come from very different cities, they had a common message during the convention’s Opening General Session, titled “Public/Private Collaboration in the Development of Successful Retail Projects,” namely that developers and elected officials need to be partners in order for either to succeed.

“The city of Baltimore is going through another rebirth,” O’Malley said, noting that Baltimore has targeted nine districts for redevelopment. “In order to make that happen, we need the help of everyone in this room.”

Right after his panel appearance, O’Malley marched to Baltimore’s booth and held 27 meetings with retailers to talk about opportunities. The mayor said that the city is also seeking a master developer for the redevelopment of a historical retail district in Baltimore’s West End.

Baltimore Mayor Martin O’Malley.

This was the first show at which Baltimore had its own booth. In 2000 and 2001 the Downtown Partnership piggybacked on a space rented by architectural firm Williams Jackson Ewing. This year Baltimore has turned the tables and invited several local developers to set up shop inside its 1,300-square-foot area, including H&S Properties Development Corp. and Struever Bros. Eccles & Rouse. In addition to the Downtown Partnership, development agencies representing other parts of the city were also exhibiting in Baltimore’s booth.

Ten years ago few, if any, municipalities even thought about renting Leasing Mall space; at the 1992 Spring Convention, there were about half a dozen. To many back then, retail development meant out-of-town shopping centers, and urban leaders often accused developers of eroding their downtowns. Since then, however, the public sector has learned that it can use retail development to reinvigorate its communities, resulting in the recent interest it has shown in ICSC’s conventions.

ICSC itself is changing as a result of the increased participation of public officials. As of the spring, membership in the public/academic sector was up 14 percent over last year, and this is the fastest-growing segment of the organization, according to ICSC officials.

“Both elected officials and cities, as well as developers, are finding the convention a great way to showcase opportunity,” said Herbert L. Tyson, ICSC’s director of state and local government relations.

A newcomer this year is Chicago Heights, Ill., a suburban city 25 miles from Chicago, which sent two representatives who had their initial experience with ICSC at this year’s Chicago Idea Exchange.

“We had a really good time, and it actually helped our city out,” said Jennifer Duffy, who is with the city’s economic development office.

Duffy said the city is trying to rebuild and improve its existing downtown retail base and fill some vacancies.

“We’re open to just about anything — anything that we think would help our city,” she said.

This is the fourth time that Chandler, Ariz., has attended the Spring Convention. The city was introduced to ICSC by Westcor Partners when the latter was seeking tenants for Chandler (Ariz.) Fashion Center, which opened in October.

“They encouraged us to exhibit, and we helped with marketing that project,” said Garrett Newland, the city’s economic development director, describing the working relationship that officials developed with the company. “We’ve been coming ever since.”

There are many ways municipalities can help developers get projects off the ground, from providing tax incremental financing to smoothing out the permit process, the mayors said.

“In San Antonio the downtown is coming alive again because of Federal Realty and a $100 million investment in an eight-block area,” Garza said. “But that wouldn’t be there if the city didn’t leverage the deal with $20 million itself.”

Armstrong said that Louisville has made use of tax incremental financing in the past and wants the private sector to be closely involved in planning the city’s future.

“We also want to work with all of you on the marketplace that we’re beginning to build in Louisville,” Armstrong said. “We want you to know that you’re involved.”

One sign of the increased importance of developers to U.S. cities is the streamlining of the bureaucratic process. In San Antonio, for example, all the various agencies from which developers need approval are being put under one roof, in what Garza called a “one-stop development center.”

Chicago recently launched the Online Building Permit Application Status system, which allows commercial developers to monitor the progress of permit applications on the city’s Web site (www.ci.chi.il.us/Buildings).

Hays said that while touring the convention’s Trade Expo, he was struck by just how many common interests and goals developers and cities share. Several of the expo’s exhibitors, for instance, also attend the annual U.S. Conference of Mayors, he said.

“A retailer’s job is to create a pleasurable, sociable and livable experience in their projects, while our goal is to create a pleasurable, sociable and livable experience for the whole community,” Hays said. “Our goals are really one and the same.”

Tax statistics provide another measure of the importance of retail development, he said. Retail taxes account for about 70 percent of his city’s spending budget.

After the session, James A. Garner, mayor of Hempstead, N.Y., talked about the benefits his city has received from his ICSC involvement. He said he has been coming to the Spring Convention for seven years.

“From the first time I came, it was so clear to me that I should have been here the day after I was elected,” Garner said. “I’ve seen that this is a partnership, and coming here has helped to redevelop my city during the past decade.”

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