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SCT

Retail helps revive struggling communities

Redevelopment, the driver behind a return of retail to the U.S. urban core, continues to reinvigorate neighborhoods and historic districts, adding luster to dormant properties, elevating residential property values and even helping to lower local crime rates. This is a movement that both challenges and rewards those developers able and willing to work with the community and to clear regulatory hurdles for the sake of a desirable place-making mix. Media narratives about retail-driven neighborhood turnarounds in major cities such as Chicago, Detroit and New York City abound, but the industry is also helping to reshape neighborhoods in dozens of less-heralded cities across the country. Here are five such revitalization projects.

DELMAR LOOP — St. Louis, University City, Mo.

The Peacock Diner, in Delmar Loop, in St. Louis

The odds of turning the once-downtrodden Delmar Loop neighborhood, in St. Louis, into a collection of boutiques, eateries, and entertainment and cultural venues seemed slim in the early 1960s. Aging infrastructure, suburban flight and wholesale closures of fashion businesses that had thrived there rendered the Loop (named for the streetcars that once looped around it to connect with other routes) little more than a vacant strip of boarded-up storefronts.

But the Loop was rediscovered in the late 1960s and 1970s by an eclectic group of shopkeepers, artists and entertainers who began repopulating it, as the city acted to reserve its street-front buildings for retail, galleries and restaurants. “A lot of open-minded people came in and embraced the neighborhood’s diversity,” said local investor and preservationist Joe Edwards. Chief among them was the indefatigable Edwards himself, president of the Delmar Loop Special District, and whom St. Louis Magazine dubbed the “The Duke of Delmar.”

Today the neighborhood is festooned with a thoughtfully curated collection of one-of-a-kind shops, art galleries, live music, movie theaters, cafés and other eating places, a luxury hotel and the Edwards-created St. Louis Walk of Fame — with brass stars honoring 150 famous St. Louis people.

At The Loop’s core is Blueberry Hill, an iconic restaurant and rock venue that Edwards opened in 1972 and which takes up a full city block; the Tivoli Theatre, a restored circa-1924 movie house; and the seven-story luxury Moonrise Hotel.

“It’s an amazing neighborhood to visit, with all these independent stores, theaters, restaurants and unique businesses and unique people”

Edwards still does his own commercial leasing when a rare vacancy occurs, he says. Occupancy in the complex is at or near 100 percent. Smoke shops, pet stores, galleries and boutiques join the likes of the Pageant concert nightclub, Midtown Farmers Market and Pin-up Bowl to round out the 150-business mix. Delmar’s eating places represent practically every region of the world. “It’s an amazing neighborhood to visit, with all these independent stores, theaters, restaurants and unique businesses and unique people,” Edwards said.   

Edwards also launched the Loop Trolley line, which arrived last year, courtesy of a $25 million grant from the Federal Transit Administration, along with some private funds. The line rolls along a 2-mile fixed track tying the neighborhood into MetroLink and the city’s historic Forest Park. Delmar also benefited from some $8 million in regional redevelopment funds used to revive a small section of the adjacent University City, which enabled the owners to demolish or renovate substandard structures. It also paid for the city to narrow some streets to slow traffic and make way for outdoor seating.

Among its accolades, Delmar Loop was named one of the American Planning Association’s 10 “great streets” and cited in a Cushman & Wakefield report as one of the top 15 North American “cool streets.” Washington University in St. Louis honored Edwards with an award for “creative vision, risk-taking and consensus-building skills that helped transform Delmar Loop into one of the most vibrant restaurant, shopping, [and] arts and entertainment districts in the U.S.”

BROOKLYN — Jacksonville, Fla.

Regency Centers' Brooklyn Station is home to restaurants, a Navy Federal Credit Union and other service businesses

The transformation of Florida’s Brooklyn community is coming along a bit more slowly than the one ensuing in its namesake New York City borough some 900 miles to the north — but a transformation it is, nonetheless, as evidenced by a spate of retail deals, new mixed-use projects, a retail REIT strip center, apartments and a succession of new restaurants.

One of northern Florida’s oldest settlements, the 16-block Brooklyn neighborhood, on the western fringes of downtown Jacksonville, was founded as a plantation in 1801 but grew into a residential suburb after the Civil War and then got annexed by Jacksonville. It was once home to hundreds of former Buffalo Soldiers, as the black military men who served in post–Civil War regiments were called, but later the neighborhood became a gritty industrial area and suffered a rapid population decline — from 6,000 residents in 1950, to a mere 60 in 2010.

Despite its proximity to downtown, vistas of the St. Johns River and upscale businesses to its south, redevelopment bypassed the ailing neighborhood until about 13 years ago when Jacksonville started plotting its revival. The city’s first challenge was to remediate the potentially toxic ash created from trash residual that was used as property infill material until 1960, and still sat beneath roads and buildings.

Soon afterwards, developers started recognizing the “new” Brooklyn for its retail and residential potential, in part because of immediate neighboring communities that are thriving, according to Oliver Barakat, a senior vice president in the CBRE Jacksonville office and a board member and former chairman of the city’s Downtown Investment Authority. In particular, Brooklyn is profiting from the bohemian Riverside neighborhood to its south, “which has become cool and edgy and has amazing diversity,” he said. “Their progress is going to overlap into Brooklyn.”

“The potential so many people talked about for years [in Brooklyn] is finally in motion and becoming a reality. Vibrancy grew from dormancy.”

Barakat got involved with the neighborhood’s revival when banks took back property on Magnolia Street that would later be redeveloped into a Fresh Market–anchored strip center developed by Regency Centers for an opening in 2014. Brooklyn Station has since welcomed restaurants, a Navy Federal Credit Union and other service businesses.

The Vista Brooklyn mixed-use development won approvals last summer for a 10-story Riverside Avenue building with 300 apartments and 12,500 square feet of retail. The city may have gotten ahead of itself with the nearby Unity Plaza, however, which opened at 220 Riverside Avenue in 2015 on the strength of some $2.6 million of taxpayer money. Late last year private developers turned over the complex’s ground-floor retail and restaurant strip to lenders. The events-oriented Unity Plaza, intended to serve as the downtown’s central park, was supposed to get some 76,000 square feet of retail space but then opened with only about a fifth of that. Unity Plaza does have about 150 high-rise residential units.

Still in the works is a Burlock & Barrel, which is to occupy a 7,000-square-foot warehouse on Magnolia Street, renovated into a distillery and tasting room, at a cost of some $800,000. On Park Street, an undisclosed developer is reportedly assembling land for a mixed-use project that is to include retail. The developer is said to be seeking to calm traffic to make the street harmonious for bicycles and pedestrians, according to Barakat.

Alvin Brown, a former mayor, told the local press that “the potential so many people talked about for years [in Brooklyn] is finally in motion and becoming a reality. Vibrancy grew from dormancy.”

OVER-THE-RHINE — Cincinnati

Taft's Ale House, in Cincinnati’s Over-the-Rhine neighborhood, was recently renovated

Over-the-Rhine, a neighborhood named by Cincinnati’s German settler population after the Rhine River–like canal separating it from the downtown, had by the early 2000s become a blighted landscape, littered with some 700 vacant lots and 500 empty buildings. The population had dropped from a peak of 75,000 to 6,000.

With the highest crime rate of any Cincinnati neighborhood, the neighborhood was so downtrodden that film director Steven Soderbergh chose it as the setting for scenes showing abandoned buildings and rampant drug use in his 2000 movie Traffic. That is hardly a Chamber of Commerce coup.

But over the past dozen years or so, nearly 140 new businesses have opened along the area’s once-beleaguered business stretches of Vine and Main streets and the 166-year-old Findlay Market, thanks largely to some urban-renewal fleet-footedness on the part of the privately funded, nonprofit Cincinnati Center City Development Corp., nicknamed 3CDC, and a combination of new-market tax credits, strategic acquisitions and tenant build-out allowances. In 2004 the newly created 3CDC began buying vacant properties in the neighborhood and started renovating them five years later, according to Joe Rudemiller, 3CDC’s communications director. “A few pioneering retailers and restaurateurs opened up new spots on Vine and several others followed.”

“Over-the-Rhine attracts a diverse residential mix these days, including Millennials, young families and empty nesters”

Things really started popping in 2012 after completion of a $48 million revitalization of Washington Park, which includes a 450-space underground parking garage, a huge new children’s play area, water features, a dog park, a full bar, plus improved green spaces. “This added amenities that resulted in more economic development in surrounding areas,” he said. Restaurants and retailers opened, residents moved into new apartments and condos, offices were renovated and companies began relocating there. In 2016 alone, 20 retailers gravitated to Over-the-Rhine, among them men’s boutique Righno, home-furnishings retailer Elm & Iron Loft and jeweler Lane & Kate.

Though at one time the place was a beer-making epicenter that boasted 18 breweries, most of them shut down over the years. But in 2003 business owners and residents formed a brewery district there to revive some of those and to create others. Now there are thousands of Brewing Heritage Trail tour visitors annually.

Over-the-Rhine attracts a diverse residential mix these days, including Millennials, young families and empty nesters, according to Rudemiller. The area also became a foodie sanctum after the Food Network spotlighted the Bakersfield taco, tequila and whiskey concept; gourmet hot-dog seller Senate; and waffle-maker Taste of Belgium on its Diners, Drive-Ins and Dives reality TV show.

This spring three developers finished off a $17 million affordable-housing project spread out over five formerly blighted historic buildings on Green and Race streets, adding 7,000 square feet of ground-floor retail to the market. Initially, part of the 3CDC strategy was to resist national tenants until the market model could stabilize, but now national chains that can complement the existing merchants are welcome, Rudemiller says. Since 2004, roughly $1 billion has been invested in new construction and redevelopment in Over-the-Rhine and the adjacent downtown.

NORTH LOOP — Minneapolis

Upscale apparel and home furnishings retailer Martin Patrick 3, in Minneapolis

The revitalization of a derelict warehouse district in Minneapolis into an upscale 24-hour neighborhood lively with innovative eateries, chic fashion boutiques and historic hotel and living spaces has created a Greenwich Village of sorts in this preservation-minded city.

The North Loop, also known as the warehouse district, derived its name from the trolley line that circled the neighborhood in the 1890s. Adjacent to the downtown, the North Loop developed into a manufacturing hub served by a convergence of railroads that allowed gristmills, farm-tool and auto manufacturers, grocery distributors and other businesses to flourish. But its roughly 60 structures became, for the most part, six- or eight-story empty shells when the manufacturing sector shrunk.

Today the facades and cast-iron entries are preserved and endowed with a new purpose: as storefronts and upper-floor residential, office and hotel uses. “This got started about 10 years ago, and the North Loop has really established itself as a retail and restaurant destination since,” said Fritz Kroll, a real estate agent at Edina Realty, which is based in the neighborhood. “It has become a regional draw.”

MartinPatrick3, the heavily patronized, 17,000-square-foot men’s lifestyle retailer on Third Avenue North, jump-started retail development here. The upscale store combines apparel, home furnishings and interior design and was the first retailer to set up shop in the district, says Kroll. “It is not only the best draw the neighborhood has, it is one of the best men’s stores in the country,” he said. “The area has since attracted a number of fantastic local men’s, women’s and home stores.”

“It’s great, because office, retail, housing and hotels are all under construction. It is a wonderful base for a 24-hour neighborhood”

Among the dozens of high-end boutiques that have sprung up are D.Nolo (the name is a play on Destination: North Loop), a women’s fashion arcade of nine retailers in the fashion, style and home-decor categories; and Jeromeo in the Loop, a wellness center that also sells antiques, jewelry, furnishings, jewelry and art. The nonretail tenants helping to round things out include the Minneapolis Farmers Market, the Minnesota Opera, and some museums, schools, theaters and corporate office facilities. Yet another traffic draw is Target Field, home of the MLB’s Minnesota Twins. The baseball park’s 2010 opening helped spur light-rail expansion and creation of the intermodal Target Field Station, which helps residents lead a car-free existence.

North Loop’s restaurant ecosystem ranges greatly in specialty and price: Nordic-inspired The Bachelor Farmer; a lobster restaurant called Smack Shack; and eclectic brunch houses such as HauteDish and Moose & Sadie’s. Some Millennials are drawn to the North Loop, which was added to the National Register of Historic Places in 1989, but there are loads of older residents there too, says Kroll. “The vibe is definitely more high-end than Uptown, which has a retail mix that caters more to Millennials,” he said.

Most of the tenants are independents, according to Kroll, but the opening of a Whole Foods in a former car dealership building on Hennepin Avenue in 2013 “certainly put us on the map for regional and national retailers.” The 124-room Hewing Hotel pays homage to the city’s logging industry, with its six stories of wood framing, flooring and paneling. There are several other buildings under construction and redevelopment as well. “It’s great, because office, retail, housing and hotels are all under construction,” said Kroll. “It is a wonderful base for a 24-hour neighborhood.”

RENAISSANCE SQUARE — Forth Worth, Texas

Renaissance Square, in Fort Worth, Texas, is living up to its name, thanks to an influx of stores and other businesses

It was 2007 and retail development markets were starting to crumble under the weight of a Wall Street meltdown. Investor Happy Baggett, a key man in the creation of master-planned deals in Dallas and in the town of Trophy Club, had bought slightly more than 200 acres a few years earlier, at U.S. 287 and Berry Street, in southeast Fort Worth. But deals were slow to develop.

The parcels he bought in the historic Mason Heights neighborhood had been used as a dumping ground and the only remaining building on the site was the long-closed Masonic Temple. Despite the imminent recession, Baggett, of Happy Baggett Properties, pushed ahead, meeting with city officials, partners and hundreds of area residents. The historic neighborhood was a classic food-and-retail desert, he found. Perceived locally as a poverty-stricken neighborhood with minimal consumption power, the area actually had twice the income that the census takers had reported: $44,000 per household, not $22,000 — some $500 million in additional spending power, Baggett discovered.

Baggett brought in capital partners, including Midland-based Moriah Real Estate and Cedar Falls, Iowa–based developer Lockard, in the wake of the worst downturn since World War II. Baggett first had to determine whether Lockard even had the stomach for the challenge. “I told them, ‘If you don’t have a heart for this kind of development, we can’t be partners,’” Baggett recalled. “‘We’re going into a minority neighborhood that has all these preconceptions; we have no zoning, and we have no TIF yet.’”

As the team went about securing entitlements and incentives, it resolved to enlist only class-A retailers — passing on rent-to-own stores, pawnshops and the like. The group landed their big fish: a 175,000-square-foot Walmart Supercenter, to anchor what would be aptly named the Shoppes at Renaissance Square. Baggett counted the meetings he had attended in the run-up to Walmart’s 2013 opening: “My logbook showed 671.”

The development would soon enlist roughly 30 in-line and pad-site occupants, including Hibbett Sports, Marshalls, Rainbow Apparel, Ross Dress for Less and about 10 fast-food eateries in its 350,000-square-foot retail component, adding residences and a huge community-service presence that Baggett called “essential”: This included an 18,000-square-foot Cook Children’s Health Care System medical and dental clinic, ACH Child & Family Services and the Uplift Mighty college-preparatory charter school. A 45,000-square-foot YMCA is to open later this summer, complete with a water park. Many of those operations enjoyed the advantages of Baggett financial seeding (what he calls “just good business”).

“The residents are proud to see an already good neighborhood get even better and put so many of their neighbors to work”

Renaissance Square benefited from a city tax increment finance district and received a 20-year Chapter 380 grant tied to job creation and property improvements. Indeed, the complex has since created some 1,000 jobs, with 90 percent of the workers living within a three-mile radius. Center sales have risen by some 3 to 5 percent in each of the past four years, and the development suffered only one closure: an El Pollo Loco restaurant that, though profitable, got caught up in a company retrenchment, Baggett says.

Renaissance Square is negotiating deals with a movie theater and a sit-down restaurant and has plans to add more pads, he says. The first 140 units of the 400-unit multifamily Columbia Renaissance Square Apartment Homes project have opened. Jon McDaniel, president of the Fort Worth retail unit for NAI Robert Lynn, notes that there was a huge void in the Mason Heights market, but that “this development really filled it.”

The residents have done their part, Baggett says. “They’ve taken ownership,” he said. Crime is low, “and there hasn’t been one incident of graffiti. The residents are proud to see an already good neighborhood get even better and put so many of their neighbors to work.”

According to the Cushman & Wakefield report on trendy streets, which includes some of the neighborhoods profiled here, such areas are becoming “incubators of sorts for what will likely be the hottest new retail concepts of tomorrow.”

By Joel Groover

Contributor, Shopping Centers Today

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