A COMMERCIAL ENHANCEMENT STRATEGY FOR
LINDEN NEIGHBORHOOD
DEVELOPMENT STRATEGIES
A Commercial Enhancement Strategy for the Linden Neighborhood | 1
Acknowledgments C l i e n t Te a m
Funders
Neighborhood Design Center
NDC City of Columbus
City of Columbus
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A Commercial Enhancement Strategy for the Linden Neighborhood
Consultant
TA B L E O F C O N T E N T S
Chapter 1
1
Chapter 2
3
Chapter 3
9
Chapter 4
17
Chapter 5
47
Chapter 6
68
Chapter 7
81
Matt Wetli, AICP, Principal in Charge Brian Licari, Project Manager Steve Schuman, Real Estate Strategist Megan Hinrichsen, Art Director Katie McLaughlin, Physical Planning Nathan Coursey, Market Research Jill Mead, GIS
DEVELOPMENT STRATEGIES
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SUMMARY
Following an introduction in Chapter 1, each stage of the Development Planning Process is provided by chapter in this report. CHAPTER 2: NEIGHBORHOOD AND MARKETABILITY CONTEXT The first step is understanding Linden’s marketability and regional context. This includes current and surrounding uses of the community and nearby amenities and development that can act as both an asset and as potential competition. Despite some market constraints as a result of a decades-long period of disinvestment, Linden has assets that should be leveraged to attract new economic activity, including its central location, excellent accessibility to public transportation and regional thoroughfares, neighborhood parks, and distinctive and engaged business community.
CHAPTER 3: DEMOGRAPHICS Chapter 3 provides an overview of various demographic and socioeconomic characteristics that help to understand Linden and its position relative to the rest of the city, region, and nation. In many ways, the spatial context of
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A Commercial Enhancement Strategy for the Linden Neighborhood
population change, income, and housing values provide a strong indication of the significant market challenges faced by the community, but also provides leads for potential opportunities to capture more regional market demand.
CHAPTER 4: MARKET ANALYSIS Chapter 4 outlines current market demand for a variety of land uses, including residential, retail, and office. Based on this demand analysis, a series of market strategies are formulated for the Linden study area. Given the large size of the study area, the supply and demand characteristics for certain types of retail and commercial uses will vary by location, requiring unique strategies for different nodes or sub-areas of Linden. From this analysis, a development program is presented with specific uses, densities, and scales appropriate for each node.
CHAPTER 5: MARKET STRATEGY
CHAPTER 7: IMPLEMENTATION
Based on the market analysis, Chapter 5 provides a framework for the types of interventions needed to help facilitate the implementation of the development program. While this includes a number of placed-based strategies, it also recognizes the need for strong investments in people and places.
The ultimate goal of this process is to translate it into actionable items that result in built projects and increased investment in physical and human capital. Building upon the analysis from the previous sections, Chapter 7 provides funding and investment strategies, including short, mid and long range actions with an emphasis on catalyst projects and the different actors—city, foundations, institutions, private sector—needed to realize the potential of each sub-area node.
CHAPTER 6: DEVELOPMENT PLANNING Building upon the market analysis and strategy, Chapter 6 provides sub-area development concepts and evaluates and tests these likely development prototypes through an economic feasibility analysis. While market analysis helps to identify opportunities and establish revenue potential, feasibility analysis considers the cost side of development equations. Given market constraints in Linden, in most cases, projects are not viable through private finance alone and subsidy is needed to fill various “feasibility gaps” that will be demonstrated in this chapter.
DEVELOPMENT STRATEGIES
A Commercial Enhancement Strategy for the Linden Neighborhood | 2
CHAPTER 1
INTRODUCTION
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A Commercial Enhancement Strategy for the Linden Neighborhood
INTRODUCTION The following report is intended to assist the Neighborhood Design Center and City of Columbus understand current market conditions and opportunities for new commercial development in the Linden study area (“Linden”), an area of central Columbus that includes portions of North and South Linden. This study has been commissioned by the Neighborhood Design Center and City of Columbus to help inform the broader Linden Community Master Plan process by determining the best strategy for future retail and commercial development within the Linden study area, a roughly 2.5-square-mile area of central Columbus. Despite its central location and proximity to numerous major employment activity centers—Downtown, Ohio State University, and the Columbus International Airport—Linden has struggled in recent decades with population loss, disinvestment, and weak market conditions. Theses problems have greatly and negatively impacted its once vibrant commercial corridors. The goal of this report is to help in reversing these trends by establishing and developing a long-term strategic framework for targeted and incremental investments that set the stage for longer-term market-based investment throughout the community. The study considers market opportunities, strategies that utilize these opportunities to develop sites to their most productive potential, the economic implications of these strategies, and the political realities of the surrounding community that will impact the development process. Ultimately, these considerations will inform which strategies best align with Linden’s goals and in formulating a plan of action for moving forward with the most strategically feasible options. Though this report focuses on retail and commercial development opportunities, it also recognizes that a successful economic investment strategy must also consider and incorporate housing, community services, and regional alignment.
DEVELOPMENT STRATEGIES
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NEIGHBORHOOD ECONOMIC DEVELOPMENT Current and future development opportunities at the neighborhood level are inuenced by a number of interdependent factors demonstrating the need to address economic development comprehensively and align residential, commercial, and civic uses. The evolution, marketability, and development potential of a mixed-use, urban neighborhood is contingent on a number of factors, from housing to retail to the overall attractiveness of the area. Demand for housing in a given neighborhood drives up housing values, and given limited supply, catalyzes new housing development. Urban neighborhoods with viable commercial retail corridors can then support more retail with the increasing population and attractiveness of the neighborhood. As neighborhoods become more attractive, this drives further housing demand and the cycle continues. Interventions by the public sector or community can increase neighborhood attractiveness, which can include improving accessibility and transportation, recreational amenities, and expanding quality schools and educational options. As part of this Neighborhood Economic Development cycle, other external forces influencing housing demand and values are regional economic development activities and job growth, while visitors/tourists in an area can also influence the retail environment. In the case of Linden, the Neighborhood Economic Development cycle, has been in disrepair after decades of disinvestment, population loss, and declining neighborhood conditions. There is a need to rebuild this system through a series of long-term investments, strategies, and market interventions, since the market alone cannot catalyze future development and generate a successful recovery. It is important to recognize that this cycle can only generate positive outcomes with incremental investments in both people and places. Though public realm improvements along the Cleveland Avenue corridor could improve overall marketability and attractiveness for commercial development, these investments must go hand-in-hand with a more comprehensive investment strategy to improve housing, transportation, educational outcomes, and community services.
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A Commercial Enhancement Strategy for the Linden Neighborhood
Regional Economic Development
Regional Economic Development
DEVELOPMENT STRATEGIES
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ALIGNMENT OF INTERESTS A successful planning process and development strategy will be found at the intersection of market forces and community wishes. Through meetings with various community stakeholders and working with the Neighborhood Design Center, Development Strategies has worked to identify various commercial services and amenities desired by the
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A Commercial Enhancement Strategy for the Linden Neighborhood
community, while also completing a market and planning analysis to isolate what desires are realistic given certain constraints that will be outlined later in this report. The aim of this planning process is to align these opportunities with the wishes of the community.
DEVELOPMENT PLANNING PROCESS In support of the Linden Community Master Plan, Development Strategies worked closely with the Neighborhood Design Center and key stakeholders to conduct a four-stage Development Planning Process as presented in this report.
CONTEXT AND MARKET ANALYSIS
CONTEXT AND MARKET ANALYSIS MARKET STRATEGY
CONTEXT AND MARKET ANALYSIS DEVELOPMENT PLANNING
4
CONTEXT AND MARKET ANALYSIS IMPLEMENTATION
DEVELOPMENT STRATEGIES
UNDERSTAND
What can it be?
Context and Market Analysis included asset mapping of the area surrounding the site and the collection and analysis of demographic and real estate data for the potential market area for the site. These analyses revealed the need and demand for particular types of development.
FORMULATE
How can value be added?
Market Strategy identified the development products that fit with the conclusions of the market analysis, and created a spectrum of development programs on the site utilizing those products. The programs were categorized by their level of development intensity, based on different zoning scenarios for the site.
TEST
What is the value?
Development Planning assessed the value of each development program. This included the raw land value, in order to provide the institution with an order-of-magnitude understanding of its own value proposition for each scenario. This step included a discussion of the tradeoffs involved with selling the land versus being a partner in any given project.
IMPLEMENT
What is the strategy?
The actions that will follow in implementing the preferred development strategies represent the fifth step, Implementation.
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CHAPTER 2
NEIGHBORHOOD & Marketability Context
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A Commercial Enhancement Strategy for the Linden Neighborhood
NEIGHBORHOOD DESCRIPTION REGIONAL CONTEXT
STUDY AREA
Centrally located about three miles northeast of Downtown Columbus, the Linden neighborhood is strategically situated near many of the region’s primary institutions, employment centers, and rapidly developing neighborhoods. Despites these advantages, the neighborhood continues to struggle with a number of problems not uncommon for older urban areas, including continued disinvestment, weak market conditions, elevated levels of crime, and other factors that have negatively impacted this once vibrant neighborhood. Given its status within the broader regional context, it is of considerable value to the city and local stakeholders to develop a long-term strategic framework for targeted and incremental investments in the neighborhood’s commercial corridors.
The project study area has been established as a roughly 2.5-square mile area located along the east side of Interstate 71 that is bounded by Weber Road on the north, the railroad tracks near 11th Avenue on the south, and the railroad tracks near Billiter Boulevard to the east. The neighborhood consists primarily of small-track single-family housing, but has two main commercial corridors— Hudson Street and Cleveland Avenue. Conditions and along these two corridors varies, but are mostly below average to poor and require substantial intervention. This report, and the analyses contained within, take into account the large size of the study area and the substantial differences in attributes for these corridors.
City of Columbus
Linden
Downtown
Regional Location
DEVELOPMENT STRATEGIES
Linden
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ASSETS & OPPORTUNITIES
Despite various challenges, the Linden study area has a number of community assets that should be harnessed to support and increase opportunities for development in and around the neighborhood. Beneath the surface, Linden has a number of strengths and assets that should be harnessed to stimulate new additional development and maximize the area’s potential. On the whole, there is an opportunity for the community to improve existing conditions and enhance the quality of commercial options available to local residents.
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FOUR CORNERS
LOCAL BUSINESSES
The Four Corners commercial intersection sits at the southern end of Linden and has already experienced renewed investment in both enhanced streetscapes, public spaces, and new development. This includes the new home of the Linden Primary Care Center, the Columbus Metropolitan Housing Authority, a Neighborhood Policing Center, and small-scale retail. As an attractive commercial node for South Linden residents, there is a good opportunity to build upon initial successes.
Authentic local businesses are spread throughout the neighborhood, with some clustered near the northern and southern ends of Cleveland Avenue. These businesses are primarily restaurants, many of which are seen as destinations within the neighborhood. These businesses contribute to Linden’s identity and have the potential to encourage future local businesses to relocate to the neighborhood, which would create an eclectic mix of commercial amenities and services.
A Commercial Enhancement Strategy for the Linden Neighborhood
PUBLIC INVESTMENTS
BUS RAPID TRANSIT
NEIGHBORHOOD PARKS
The City of Columbus has made a number of recent public investments throughout the neighborhood, including a full renovation of Linden-McKinley High School, improvements to the Hamilton STEM Academy, a new public library branch, new fire and police stations, a new housing authority building, and a new Bus Rapid Transit (BRT) line that will run through the neighborhood along Cleveland Avenue. These recent investments demonstrate a renewed public sector interest in the neighborhood and can help lead to improved medium and longterm improvements, while also catalyzing additional private investments.
COTA recently opened a new Bus Rapid Transit (BRT) line along Cleveland Avenue that will stretch from Downtown Columbus to Polaris Parkway/ Africa Road, right through the Linden study area. The BRT line will create six new stations in Linden in additional to the existing stop at the Linden Transit Center. The line will expand transit options for Linden residents, while also potentially bringing more people through and into Linden, making each station a potential opportunity area for development activity.
Linden has four neighborhood parks within its boundaries—Audubon Park, Linden Park, Maloney Park, and Windsor Park—that offer various recreational amenities and greenspace. Other than school facilities, these are the primary green spaces within Linden, offering some of the best assets for encouraging new higher-value residential development.
DEVELOPMENT STRATEGIES
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ASSETS AND OPPORTUNITIES
INTERSTATE 71 ACCESS
REGIONAL AMENITIES AND GROWTH
Interstate 71, one of Columbus’ most heavily utilized commuter routes, runs north and south along the west side of Linden, providing easy access to Downtown and the Columbus suburbs. The interstate increases visibility and accessibility, which can enhance the opportunity of interchange-related development such as large-scale retail or offices.
Linden is centrally located within the Columbus region, placing it within close proximity to numerous major employment and activity centers. This makes it a potentially attractive neighborhood for moderate-income residents and small businesses seeking low-cost space. With continued population and economic growth at the regional level, as well as a decline in affordability for households and businesses in other urban Columbus neighborhoods, Linden’s market position is likely to improve in the relatively near future.
On the other hand, it is important to note that the interstate can have a negative impact on the marketability of certain uses, particularly residential properties that are adjacent to the highway. It also serves as a large physical divider between Linden and more affluent city neighborhoods to the west.
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A Commercial Enhancement Strategy for the Linden Neighborhood
DEVELOPMENT STRATEGIES
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CONSTRAINTS AND CHALLENGES
Despite its strengths, Linden is faced with a number of constraints and challenges that have hindered market-based investment and economic activity. Moving forward, it will be critical to make strategic interventions to overcome these challenges and facilitate sustainable growth. The nature of retail and consumer preferences have evolved considerably over the past few decades and communities across the country face many of the same challenges as Linden. With the proliferation of larger-scale big-box retail centers, and most recently, online commerce, neighborhood-scale retail development, place such as Linden face considerable challenges that deter development.
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DISINVESTMENT
NEARBY COMPETITION
Despite recent redevelopment activity in nearby communities—Italian Village, Weinland Park, and Clintonville—over the past decade, Linden has yet to experience similar market-based investment activity. Property values remain some of the lowest in the city, with little appreciation over the past five years, and a relatively large portion (20 percent) of its housing units are vacant. Although, there still remains a challenge with vacant, distressed, and blighted properties. While population loss has leveled out from the previous decades, slowing the downward cycle of disinvestment can often take decades without some private- and public-sector interventions.
With national changes in retail development and preferences over the last few decades, automobilecentric retail centers such as nearby Northern Lights Shopping Center have put a strain on the economic competitiveness of the types of locally-owned neighborhood-scale businesses that predominate much of Linden. Given these challenges, future retail development in Linden will need to differentiate itself from its competition by focusing on a mix of convenience, authenticity, and strong community-based support.
A Commercial Enhancement Strategy for the Linden Neighborhood
PRESERVATION Linden contains a large number of older, historic structures that are in various states of disrepair. While restoring and preserving this historic building stock remains a good economic and community development strategy, it is also a critical component in maintaining its culture, history, and identity. Maintaining historic and/or aging structures can, however, be costly, and few projects will be economically feasible without the use of public subsidies such as historic tax credits. Regardless, future redevelopment along Linden’s commercial corridors will need to strike a balance between preservation and selective demolition of properties that are beyond repair.
DEVELOPMENT STRATEGIES
LACK OF AVAILABLE DEVELOPMENT SITES As an older community mostly developed prior to the establishment of newer retail development patterns, nearly all of the neighborhood’s commercial corridors are comprised of outdated and obsolete property types and lots. This severely limits the availability of move-in ready spaces for retailers and the number larger-scale development sites that could accommodate modern development patterns. For these reasons, acquisition and assemblage will be very difficult and will typically include multiple properties in varying conditions that are owned by a number of different entities.
NEIGHBORHOOD FRAGMENTATION In addition to historical delineations of North and South Linden, the Linden study’s east-west access and connectivity is limited by Interstate 71 and the Ohio Expo Center and State Fair Grounds. The size of the study area also presents some challenges given its large scale and the variations in development conditions along commercial corridors such as Cleveland Avenue. This emphasizes the need to develop strategies that concentrate investment and focus on select sub-districts to catalyze future development.
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CHAPTER 3
Demographic overview
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A Commercial Enhancement Strategy for the Linden Neighborhood
NATIONAL DEMOGRAPHIC TRENDS Demographic shifts and changes in lifestyle preferences are impacting how people live, work, play, and interact with their environments. These shifts are playing out nationally, as well as regionally and locally, and have far-reaching impacts on demand for certain types of real estate development. Changes in demographics and lifestyle preferences are altering the types of real estate products that are most desired. Nationally, population is growing and households are becoming more diverse, which has lead to increased demand for a broader range of housing types and benefited urban areas. For example, in 1960, 48 percent of households had children. By 2025, this number will be reduced to 28 percent. Simultaneously, 28 percent of housing units in 2025 will be occupied by a single person, up from 13 percent of units in 1960.1 At the same time, consumer preference surveys show a shift in community preferences that align with these demographic changes. Surveys indicate a slight majority, or sizeable minority, prefer walkable communities and will live in denser, walkable environments if it places them closer to jobs and amenities. In fact, 49 percent of survey respondents prefer a neighborhood where they can walk to nearby shopping.2 Despite this preference, 42 percent feel there are “too few� shops or restaurants within an easy walk of their house, indicating that demand for these types of places far exceeds supply.3 Due to these demographic changes and shifts in preferences, many urban areas throughout the nation have experienced considerable investment and positive
DEMOGRAPHICS ARE CHANGING
Demand will More SENIORS
More SINGLES
Smaller FAMILIES
increase for
population growth over the last ten to 15 years. According to CBRE research, as of December 2017, nearly a quarter of all multi-family units under construction in the U.S. are in urban cores. These trends have been more pronounced in coastal markets such as Boston, San Francisco, Denver, Seattle, or New York, but Midwestern cities, and many so called secondary markets, have also experienced strong growth. From 2005 to 2015, the three major urban areas within Ohio, Cincinnati, Cleveland, and Columbus saw a combined population increase of just over 70 percent in their downtowns. Secondary markets have also been able to attract significant investment through their lower costs of living and doing business, which is partially reflected by the Midwest’s emergence as a tech-industry leader. According to CBRE research, five Midwest markets ranked in the top 20 nationally for high-tech job growth rate by percent change over the last five years, these areas include Indianapolis, Cincinnati, Chicago, Kansas City, and Minneapolis. These cities have been successful at attracting and retaining talent in part through lower office rents which have fostered new businesses due to lower start-up capital costs, but also through providing the amenities and living opportunities that appeal to high-skilled workers. As the economy continues to shift towards service and knowledge-based industries, urban areas that are able to capture a larger share of these jobs and retain the talent needed to work them will be positioned for greater success in the future. While greater investment in once neglected urban areas has created stronger economies and expanded living choices to fit changing lifestyle preferences, strategic planning and thinking is increasingly needed to ensure urban revitalization benefits all citizens. For more challenged urban areas and communities such as Linden, investments in place based initiatives and expanding housing opportunities and choices within walkable mixed-use districts will be important for growing the population and attracting the people and business that will strengthen the city into the future.
smaller homes
DEVELOPMENT STRATEGIES
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SELECTION OF MARKET AREA Analysis of a defined market area provides useful insight into the demographic characteristics of a given area and the types of development products that may be in highest demand. DEFINITION OF MARKET AREA In market analysis, a Primary Market Area (PMA) is typically defined as the smallest geographic area from which a high percentage (often 75 percent) of support for a project will be drawn. In some cases, particularly in large metropolitan regions, a Secondary Market Area (SMA) is identified as the origin for most of the remaining support, in order to focus the analysis on the most relevant geographies for a project. Market boundaries are sometimes defined by hard boundaries, such as rivers, highways and other major thoroughfares, railroads, etc. Market areas are often defined by soft boundaries—that is, marked changes in socio-economic condition, such as income, density, ethnicity, and educational attainment. The purpose of market areas is to better understand the unique demographic characteristics for which most of the study area’s market support will come from. Despite the size of Linden and retail demand from local residents, future retail will be the most successful if it can draw support from a broader customer base. Therefore, additional support will need to come from communities located immediately outside the market area. The PMA covers all of the Linden study area and stretches to areas to the north, east, and south due to comparable socio-economic conditions in these areas. Because areas west of Interstate 71 are more affluent and include a sizable student population, demand is less likely to come from these areas. Given Linden’s geographical location in the region and accessibility via public transportation and arterial road networks, an SMA was not defined, as secondary customer support will be drawn from throughout the remainder of the city of Columbus.
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A Commercial Enhancement Strategy for the Linden Neighborhood
PLACE IN THE REGION As of 2017, the Linden study area had a population of roughly 18,000 people, accounting for just under half of the total population in the PMA. After decades of decline, the Study Area and PMA have increased population at a rate just under the regional average since 2010. Modest additional population growth is projected for the Study Area and PMA through 2022, indicating a growing opportunity for new development. The median age of PMA households is generally comparable to the regional median of 35, while household sizes are slightly higher at 2.6 persons per households compared to 2.5 for the remainder of the region. Age distribution and protected change of age cohorts in the PMA is also generally comparable to the regional average, but with generally more households containing children than other more urban neighborhoods of the city. Median household income and housing values in the PMA are, however, considerably lower than the rest of the region. In fact, the median household income for the region is nearly twice the median household income of the PMA. This indicates a need for a broader economic development strategy that incorporates investments in workforce development and education as well as improvements to employment accessibility via public transportation.
Study area
Market area
STUDY AREA
PMA
CITY OF COLUMBUS
COLUMBUS MSA
18,000
41,000
871,000
2,071,000
1.1%
1.1%
1.5%
1.2%
MEDIAN HOUSEHOLD INCOME
$25,000
$30,000
$47,000
$57,000
MEDIAN HOME VALUE
$70,000
$74,000
$140,000
$175,000
POPULATION
ANNUAL POPULATION CHANGE (2010-2017)
DEVELOPMENT STRATEGIES
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LOCAL DEMOGRAPHICS Compared to other parts of the Columbus region, Linden has a high proportion of low-income households, low levels of education, and low home values. It is also an area—despite recent gains—that has experienced significant population loss since 2000 and has a large supply of vacant housing.
QUICK FACTS LINDEN
49% 16% 41% 79% 13% 21 |
of residents earn less than $25,000 annually
of residents have an associates degree or higher
of housing units are owner-occupied
of housing units are occupied
of Linden residents use transit
A Commercial Enhancement Strategy for the Linden Neighborhood
POPULATION CHANGE The Columbus region has experienced considerable growth over the last 15 to 20 years. From 2000 to 2016, the Columbus MSA population increased by nearly 24 percent adding nearly 400,000 new residents. Through significant redevelopment efforts in many of the city’s close-in neighborhoods, its population also increased considerably by nearly 22 percent during this time period. However, this redevelopment activity has only occurred in select neighborhoods, most notably in the areas stretching from south of Downtown to the University District. Some neighborhoods have not shared the same resurgence and have remained stable, whereas, some areas, as in the case of Linden, have lost population over this time period resulting in higher vacancy rates, property abandonment, and blighted conditions. Conversely, since 2010, Linden as a whole has increased its population by around eight percent indicating a shift in trajectory.
HOUSEHOLD INCOME
HOUSING VALUES
Linden’s socio-economic conditions limits market-based opportunities for new retail and housing. Household incomes in Linden are considerably lower than in the rest of the city and region. According to ESRI, Linden’s median household income is $25,338, which is less than half of the regional median household income figure ($57,216). Approximately one-third of Linden households also earn less than $15,000 and are well below the federal poverty line. Consistent with national trends, income levels and educational attainment are intrinsically linked as only nine percent of Linden residents (aged 25 and older) have a bachelor’s degree or higher compared the regional average of 35.3 percent. .
Spatial patterns of housing values are generally consistent with household income; although the areas to the southwest comprising of portions of Downtown and Italian Village have some of the highest property values in the region despite relatively low income levels (again, due to the student population). The median home value in Linden is just over $70,000, which is roughly half the median home value in the city ($140,000) and one-third of the region ($214,000). Given the relatively low property values, this limits the feasibility of market-based investment in Linden. At the same time, given its proximity to areas with considerably higher property values, as moderateincome households get priced out of these areas over time, they may eventually seek housing in Linden as a more affordable alternative.
DEVELOPMENT STRATEGIES
Median Household Income
Median Household Income
$0
$0
$45K
$60K $75K $90K $120K
$100K $150K $200K $250K $700K
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CHAPTER 4
Market analysis
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A Commercial Enhancement Strategy for the Linden Neighborhood
RETAIL TRENDS When considering the types of retail that could be successful in Linden, it is important to recognize national trends that continue to impact how retail should be planned and implemented moving forward. Retail development generates activity and vibrancy, adds value to surrounding development, and enhances the overall desirability of a neighborhood. Retail is also perhaps the most competitive of the real estate industries; products and retailers are constantly evolving to meet changing consumer demands, often replacing outdated products (be it shopping centers or competitive retailers) in what is often referred to as “Retail Darwinism.” The nature of retail and how people shop has also changed considerably in recent years. This is most evident in the rise of online shopping, which has caused a sharp decline in sales at traditional department stores and malls. Although the equilibrium of online and brick and mortar retail demand has yet to be fully determined, the impact is undeniable. Despite the rise of online sales, opportunities remain for various types of retail development. Big-box retail, for example, continues to define much of the retail landscape, as 90 percent of Americans live within ten miles of a Walmart.4 At the same time, even big-box retail has had to adapt by offering more groceries and food items, while also increasing their online presence. Americans also now report dining out more than ever, with households spending seven percent more at restaurants than grocery stores, a reverse from previous decades.
Online sales have increased
3,700 percent since 2000, yet consumers prefer in-store shopping
The effects of technological changes are also less pronounced in communities with higher proportions of low-income households. According to PEW research, low-income households have lower rates of internet usage and access to computers, making them less likely to shop online.5 With research showing that such retail also serves as essential employment options and provides valuable starting points for upward economic mobility, its clear that brick and mortar retail stores continue to be important to many low– and moderateincome communities.6 Given increased competition from online retailers and large-scale shopping centers in suburban Columbus, urban retail in places such as Linden must focus on smaller-scale spaces and tenants with a focus on niche markets, workforce needs, neighborhood services, and day-to-day convenience shopping. Studies have shown that consumers spend more when public spaces are more inviting,. In many cases, this indicates that investments in place and creating a unique experience for nearby residents, employees, and visitors is critical for neighborhood-scale retail to be successful.
RISE OF ONLINE RETAIL
9% OF 2017 RETAIL SALES WERE ONLINE, COMPARED TO 1% IN 2000
SOURCE: US CENSUS
DEVELOPMENT STRATEGIES
GROCERY TRENDS
7% MORE SPENT AT RESTAURANTS THAN AT GROCERS
SOURCE: US CENSUS
BIG BOX RETAIL
EXPERIENCES
90%
15%
OF AMERICANS LIVE WITHIN 10 MILES OF A WALMART
CONSUMERS SPEND MORE WHEN PUBLIC SPACES ARE MORE INVITING
SOURCE: ECONOMIST.COM
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MARKET OVERVIEW Despite a strong regional market for retail development, the city of Columbus and its urban core has had limited expansion of net new square footage in recent years, indicating the challenge that exists for developing new retail even in urban areas with strong market conditions.
Columbus MSA, 2007-2017 Source: CoStar 1,400,000
4.8%
1,200,000 4.7%
1,000,000 800,000
4.6% 600,000 400,000
4.5%
200,000 0
On the other hand, the Central Columbus sub-market, which incudes a large portion of the city’s urban core, has had limited retail inventory growth with only a net increase of 48,000 square feet during this time period. However, this does not necessarily indicate weak market conditions. It instead suggests that urban retail development and expansion is hindered by the limited availability of large, contiguous sites prime for development, as well as the significantly higher costs associated with redevelopment. Urban retail development must, therefore, rely more heavily upon niche markets with a greater emphasis on adaptive reuse and redevelopment of obsolete spaces rather than larger-scale retail expansion, which is generally more feasible in suburban areas.
Total Vacancy
Net Annual Increase in Inventory
Over the last 10 to 15 years, the retail market has been fairly strong in the Columbus region due to population growth and suburban expansion. Since 2007, the overall retail supply in the region has had a net increase of six million square feet for an increase of nearly seven percent and this pace of development has continued until recently. According to CoStar, from 3Q 2014 through 3Q 2017, the region experienced a net increase of 1.9 million square feet of retail space, while vacancy decreased from nearly 6.0 percent to 4.3 percent. These trends, in addition to an overall increase in average rents, indicate that even with increasing supply, demand is strong.
YEAR-OVER-YEAR NET INCREASE IN RETAIL INVENTORY
4.4% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3Q
SHARE OF RETAIL CONSTRUCTION SINCE 2012
Columbus MSA 3.0 Million Sq. Ft.
Central Submarket 48,000 Sq. Ft. Source: CoStar
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A Commercial Enhancement Strategy for the Linden Neighborhood
RETAIL MARKET AREAS The market for a retail establishment will generally depend on the type of development and how far consumers are willing to travel to access it. Some types of establishments, such as grocery stores and pharmacies, generally only attract shoppers from short distances away; while others types, such as entertainment venues and high-end restaurants, will draw its customer base from farther away. When considering the types of retail that would be appropriate in Linden, drive-times are critical since certain types of retail centers such as regional and super regional have a scale (minimum of 300,000 square feet) that would be infeasible in an urban neighborhood like Linden. Therefore, most retail uses would be appropriate for a customer base within a five- to ten-minute drive or roughly one to three miles.
DEVELOPMENT STRATEGIES
Type of Center
Typical Anchor
Gross Leasable Area (Sq. Ft.)
Population Support
Radius (mi.)/ Drive Time (mins.)
Drugstore/ Supermarket
30,000 100,000
3,000 40,000
1.5/5-10
Junior Box or Anchor Store
100,000 450,000
40,000 150,000
3-5/ 10-15
1-2 Big-box or Anchor Stores; Entertainment Component
300,000 900,000
>150,000
8/15-20
3-4 Big-box or Anchor Stores; Entertainment Component
500,000 2,000,000
>300,000
12/2030
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RETAIL SUPPLY REGIONAL SUPPLY
REGIONAL & SUPER REGIONAL CENTERS
Most large, regional destinations have suburban locations outside the urban core. However, Linden is within the Regional and Super Regional market area (12 miles) of three such retail developments. Even if Linden had a large tract of developable land, the market for a town center or larger-scale regional shopping hub is extremely limited given the existing supply of such developments within 12 miles. Though the MAPFRE Stadium and Ohio Expo Center and State Fair Grounds immediately west and southwest of Linden could offer a future redevelopment opportunity given their scale and location, any new development would likely require a strong mixed-use presence with commercial and residential, since the existing retail supply is considerable. The Mall at Tuttle Crossing: The mall and adjacent development features 1.1 million square feet of retail space, including the mall, Walmart, Office Max, and Best Buy. Strong suburban demographics and access to I-270 makes it a very competitive retail destination.
polaris
The mall at tuttle crossing
Easton market & Easton town center
Study area
12-miles
NEARBY CENTER
Polaris: This cluster offers 2.2 million square feet of retail space, including the shopping mall, Lowe’s, Target, and Best Buy. The surrounding area has experienced considerable population growth over the last 10 to 15 years and has further market support from the presence of the JP Morgan Chase McCoy Center with 2 million square feet of office space and 13,000 employees onsite. Easton Market & Easton Town Center: This development offers 2.0 million square feet of retail with walkable, outdoor town center, Lowe’s, Target, Walmart, and Costco. The development continues to expand with residential and commercial development. Though primarily an automobile-centric development, Linden residents can access the town center via public transportation in about 30 minutes.
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A Commercial Enhancement Strategy for the Linden Neighborhood
Easton market & Easton town center Square Feet
Anchor Tenants
2M
Lowe’s, Target, Nordstrom Rack
COMMUNITY SUPPLY Based on the standard three-mile radius market area of Community retail centers, Linden is also well-served with six such developments each offering between 120,000 and 500,000 square feet of retail space. Community retail centers are more or less “traditional” retail strip centers or big -box centers that are auto-oriented and typically offer a few larger anchors such as grocery store, home good store, or department store with smaller in-line tenants and out-lot tenants (such as fast food restaurants with drive-through). Given their proximity within a mile or less of Linden, Northern Lights Shopping Center, Lowe’s Center, and North High Street & Olentangy Street offer the most competition with a total of nearly 700,000 square feet of retail. Northern Lights Shopping Center: Located on the CMAX Bus Rapid Transit line, Northern Lights is the closest and most accessible retail center for Linden residents. It features 360,000 square feet of retail space, with anchors such as Foot Locker and out-lot fast food restaurants. The Kroger recently announced its closing in January 2018, leaving residents with reduced grocery options moving forward.
COMMUNITY RETAIL CLUSTERS
Fountain square & morse center n high street & olentangy street
Northern lights shopping center 3-miles
Lowe’s center Lennox town center Town & country
NEARBY CENTER
Lowe’s Center: Located just west of Linden, the Lowe’s is the closest hardware/home improvement store to Linden and the development also features an ALDI grocery sore. Despite its proximity to Linden, accessibility is limited given the presence if Interstate 71. North High Street & Olentangy Street: This cluster offers 120,000 square feet of retail space with a Giant Eagle, Lucky’s and a number of restaurants. Though within a reasonable driving distance, accessibility is limited for those Linden residents who rely on public transportation or do not have access to an automobile.
DEVELOPMENT STRATEGIES
Northern lights shopping center Square Feet
Anchor Tenants
360K sq. ft.
Kroger (closed), Foot Locker, Save-a-Lot
A Commercial Enhancement Strategy for the Linden Neighborhood | 28
RETAIL SUPPLY Neighborhood, or daily needs, retail clusters are smaller in size usually offering less than 100,000 square feet and are intended to serve the local community within a 1.5 mile radius. NEIGHBORHOOD SUPPLY
DAILY NEEDS RETAIL CLUSTERS
n high street & n broadway
Some of the community-level retail centers also serve as neighborhood-level retail centers given their tenant-mix and offerings, most notably grocery stores and pharmacies. By distance, the northern and western portions of Linden are well-served with these types of centers, including Lowe’s Center and Northern Lights; however, Interstate 71 presents an east-west accessibility challenge for the community and the closing of the Kroger store at Northern Lights will create a sizable void in grocery supply for residents in the northern part of Linden. Additionally, the southern and eastern portions of Linden are outside of the standard market range for neighborhood retail centers leaving residents in these areas underserved. Despite a considerable number of daily needs retail clusters within one or two miles of Linden, the neighborhood itself has a very limited supply of available, move-in ready space, which has impacted the diversity of the retail offerings in Linden. Of all retail-oriented businesses in Linden, approximately 37 percent are auto-related (service stations, used car lots, or gas stations), whereas citywide, only nine percent of businesses are auto-related. Linden also has a much higher proportion of convenience stores, discount stores, and liquor stores and a lower proportion of restaurants and “other” stores, which include apparel, department stores florists, sporting goods, shoe stores, etc. On one hand, this could be expected since Linden is primarily a residential area without any larger-scale retail supply; on the other hand, this shows a need to further improve and diversify the offerings in the community.
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A Commercial Enhancement Strategy for the Linden Neighborhood
Northern lights
Mccutcheon rd & stelzer rd
Lowe’s center Mock road Northwest boulevard
High street & 7th avenue
EXISTING RETAIL BUSINESS DISTRIBUTION LINDEN
REST OF CITY
AUTO-RELATED
37%
9%
RESTAURANTS
19%
27%
CONVENIENCE STORES
18%
4%
GENERAL MERCHANDISE/ DISCOUNT STORES
8%
2%
LIQUOR/TOBACCO
4%
1%
PHARMACY
3%
3%
OTHER
11%
54%
DEVELOPMENT STRATEGIES
A Commercial Enhancement Strategy for the Linden Neighborhood | 30
RETAIL SUPPLY SELECT RETAIL CENTERS
1
Understanding current lease and occupancy rates at nearby competitive retail centers helps inform the achievable rents for future retail development in Linden. Nearby higher-quality retail centers generally have lease rates of at least $12 per square foot. Given relatively weaker market conditions in Linden, lease rates would have to be at or below most of the competitive supply for “standard” strip center development. Rents could be higher depending on quality, visibility, and accessibility among other factors, although historic “main street” storefronts would achieve lower rents given quality and condition. Asking rents at the Four Corners or Linden Transit Center are around $12.00 per square foot indicating that new retail product can be competitive in this market.
Built 1966/2011 76,000 SF 100% Occupancy $10.00 - $12.00 PSF Tenants: Weiland’s Market, Planet Fitness
2
2
THE MARKET AT STELZER Built 2008 115,000 SF 97% Occupancy $18.00 - $20.00 PSF Tenants: Giant Eagle, Subway
3
4
NORTHERN LIGHTS Built 1995 386,000 SF 91% Occupancy $12.00 PSF Tenants: Kroger, Family Dollar
3 1
INDIANOLA PLAZA
4
THE SHOPPES AT AIRPOINTE Built 2008 17,000 SF 90% Occupancy $14.00 PSF Tenants: Donatos, Wendy’s
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A Commercial Enhancement Strategy for the Linden Neighborhood
SELECT COMMERCIAL CORRIDORS Other comparable commercial corridors in the city have similar challenges as Linden in terns of supply and achievable rents, including stretches along Broad Street and Parsons Avenue. Older retail spaces are available for between $6.00 and $10.00 per square foot.
hilltop
3085 W Broad Street
3166 W Broad Street
Built 1923 6,400 SF Total 2,200 SF Available $6.00 PSF/MG
Built 1955 2,600 SF Total 1,300 SF Available $10.00 PSF/NNN
Parsons avenue
franklinton
1300 W Broad Street
1185 W BROAD STREET
1124 PARSONS AVENUE
1014 PARSONS AVENUE
Built 1920 5,200 SF Total 1,500 SF Available $5.65 PSF/NNN
Built 1920 12,100 SF Total 7,500 SF Available $6.65 PSF/NNN
Built 1924 8,000 SF Total 3,500 SF Available $8.00 PSF/MG
Built 1926 13,400 SF Total 7,700 SF Available $10.00 PSF/NNN
DEVELOPMENT STRATEGIES
A Commercial Enhancement Strategy for the Linden Neighborhood | 32
RETAIL DEMAND In order to determine the feasibility for new retail in Linden, it is important to understand the types of retail that consumers support in terms of aggregate annual spending and the types of spaces these retailers typically occupy. As presented in the market trends section of this report, there are emerging trends in consumer behavior and retail offerings that are changing how people shop and what types of store will be successful in the future. There are certain types of stores such as clothing and home furnishings that are typically only successful in a big-box format such as at a department store. Building material stores like Lowe’s and Home Depot and general merchandise stores like Target and Walmart are also only successful in a big-box format. Once strong retail sub-sectors such as books and electronics have struggled with the proliferation of Amazon and other online retailors, which changes how these types of stores will retail competitive.
RETAIL DEMAND
REGIONAL COMPARISON
Clothing
“CATEGORY KILLERS”
Electronics and appliances
Therefore, even with strong demand for certain types of products, retail in Linden will likely need to focus on neighborhood and community stores, dinning and drinking establishments and auto-oriented uses as well as services such as dry cleaners, barbers, and banks.
Demand gap analysis helps to determine whether a market is underserved or oversaturated. For example, the average household spends roughly 30 percent of its income on retail goods. By comparing the types of goods that households in a market area are buying with the actual stores located in a market area, gap analysis can determine whether supply is effectively meeting demand. If not, there may be opportunities to build more now or in the future.
Building materials/gardening General merchandise
AMAZON EFFECT
RETAIL GAP ANALYSIS
Furniture and home furnishings
Sporting goods, hobby, books, music
Grocery store/supermarket NEIGHBORHOOD & COMMUNITY
Pharmacy/drug store Specialty food Miscellaneous
Drinking establishments DINING & DRINKING
Restaurants
Auto parts B-STREET
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A Commercial Enhancement Strategy for the Linden Neighborhood
Gas station
Because demand characteristics for retail vary throughout the study area, demand has been considered at three separate nodes, helping to understand the speciďŹ c needs and opportunities for each sub-area and node. This analysis was completed at a neighborhood scale, or ďŹ ve-minute drive-times, as the community and region is currently very well-served by existing supply. NODE 1 (HUDSON & AUDUBON) Given the presence of the I-71 on/off ramps, the 15-minute driving shed covers a relatively broad area and future development will likely be more automobile-centric.
Node 2 Node 1
NODE 2 (CLEVELAND & MYRTLE) The retail character is more at a neighborhood scale, although Cleveland Avenue currently carries heavy volumes of traffic making it less pedestrian friendly.
NODE 3 (CLEVELAND & 11TH) Anchored by the Four Corners and Point of Pride Building, Node 3 represents the new civic heart of Linden, and given its location, could serve the MiloGrogan community as well, although pedestrian access is limited given the railroad overpass.
Node 3
DEVELOPMENT STRATEGIES
A Commercial Enhancement Strategy for the Linden Neighborhood | 34
RETAIL DEMAND NODE 1: EAST HUDSON & INTERSTATE 71
5 - MINUTE DRIVE TIME
GAP ANALYSIS
Population
49,000
According to ESRI, there are 49,000 people in 21,300 households living within a 5-minute drive of Node 1. The median annual disposable income for these households is estimated at $22,900, indicating an aggregate retail purchasing power of approximately $466 million and providing support for an estimated 1.05 million square feet of total retail space. Based on an estimate of aggregate sales, the area’s existing supply generated total retail sales of roughly $343 million, representing an existing supply of about 800,000 square feet. Therefore, there was a total gap of 250,000 square feet of retail, indicating there may be potential opportunities for new retail development at or near this node.
Households
21,300
COMPETITIVE OPPORTUNITY
Based on supply and demand by retail type, the greatest competitive opportunity is for General Merchandise and Miscellaneous retail stores, as many households are forced to leave the area to satisfy their shopping needs for these retail types, which broadly include retailers such as Target or Walmart. Conversely, there is an oversupply of Building Materials square footage given the Lowe’s located in the 5-minute driving shed. Small gaps also exist for electronics, apparel, and grocery stores, though some of these categories face fierce competition from online sales. It is important to note that while these gaps exist, opportunities for new retail development will remain limited as long as large developable sites with good access and visibility are unavailable. In the case of Node 1, there are no sites currently available east of Interstate 71 that could accommodate large-scale retailers such as Target or Walmart, but opportunity sites may be available to the west of the interstate.
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A Commercial Enhancement Strategy for the Linden Neighborhood
Average Household Size
2.3
Median Disposable Household Income
$22,900
Total Demand
1.05M SF
Total Supply
800K SF
Retail Gap/Surplus
250K SF Gap
OPPORTUNITY SUMMARY BIG-BOX GENERAL MERCHANDISE
120K SF
HOME FURNISHINGS
2K SF
SPORTING GOODS
4K SF
BUILDING MATERIALS
-4K SF
NEIGHBORHOOD SCALE MISCELLANEOUS
18K SF
APPAREL
10K SF
ELECTRONICS
9K SF
GROCERY
6K SF
SPECIALTY FOODS
2K SF
RESTAURANTS
-1K SF
AUTO PARTS
-3K SF
PHARMACIES
-19K SF
NODE 2: CLEVELAND & MYRTLE
5-MINUTE DRIVE TIME
GAP ANALYSIS
Population
38,500
According to ESRI, there are 38,500 people comprising 15,000 households within a five-minute drive of Node 2. With median annual disposable income of $24,900 (the highest of the three nodes), these households have an aggregate retail purchasing power of nearly $290 million, indicating demand for about 620,000 square feet of total retail space Based on an estimate of aggregate sales, the area generates about $260 million in total retail sales, indicating a total supply of about 530,000 square feet of space. Therefore, there was a total retail gap of 90,000 square feet of retail.
Households
15,000
COMPETITIVE OPPORTUNITY
Similar to Node 1, there is net demand of more than 200,000 square feet of General Merchandise however, there is also net demand for Node 2 for Electronic, Miscellaneous, Apparel, Specialty Foods, and Auto Parts stores, indicating that despite the presence of Norther Lights Shipping Center, there is still an undersupply of retail serving the community for certain retail types. With the recently announcing closing of the nearly 60,000-square foot Kroger at Northern Lights, the surplus of grocery store space should decrease to roughly 75,000 square feet.
Average Household Size
2.6
Median Disposable Household Income
$24,900
Total Demand
620K SF
Total Supply
530K SF
Retail Gap/Surplus
90K SF Gap
OPPORTUNITY SUMMARY BIG-BOX GENERAL MERCHANDISE
205K SF
HOME FURNISHINGS
15K SF
SPORTING GOODS
9K SF
BUILDING MATERIALS
-9K SF
NEIGHBORHOOD SCALE MISCELLANEOUS
20K SF
ELECTRONICS
12K SF
SPECIALTY FOOD
7K SF
AUTO PARTS
7K SF
APPAREL
5K SF
RESTAURANTS
-7K SF
PHARMACIES
-8K SF
GROCERY
DEVELOPMENT STRATEGIES
-135K SF
A Commercial Enhancement Strategy for the Linden Neighborhood | 36
RETAIL DEMAND NODE 3: CLEVELAND & EAST 11TH
5-MINUTE DRIVE TIME
GAP ANALYSIS
Population
46,000
According to ESRI, there are about 46,000 people, representing 19,600 households, live within a 5-minute drive of Node 3. The median annual disposable income of $22,500 is also similar to the other two nodes and these households have an aggregate retail purchasing power of roughly $400 million, representing demand for about 900,000 square feet of total retail space. Based on an estimate of aggregate sales, the area had approximately $530 million in total annual retail sales, representing supply of about 1.3 million square feet of space. These figures indicate there is a surplus of about 400,000 square feet of retail.
Households
19,600
COMPETITIVE OPPORTUNITY
Opportunities also remain limited at Node 3, though there is a retail gap of more than 130,000 square feet of supportable space for General Merchandise stores at this location. Most remaining retail categories are, however, oversupplied. Although Node 3 presents few obvious opportunities for new retail development and may need to draw from a broader customer base, this is a more reasonable assumption in this location given its superior east-west access to markets with significant buying power, including Italian Village, Weinland Park, and University district. The 11th Avenue on-off ramp to Interstate-71 also makes Node 3 very accessible to markets to the north and south.
Average Household Size
2.3
Median Disposable Household Income
$22,500
Total Demand
900K SF
Retail Gap/Surplus
400K SF Surplus
Update layout report layout for report Total Supply 1.3M Update SF
OPPORTUNITY SUMMARY BIG-BOX GENERAL MERCHANDISE HOME FURNISHINGS
273K SF 6K SF
SPORTING GOODS
-56K SF
BUILDING MATERIALS
-190K SF
NEIGHBORHOOD SCALE
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A Commercial Enhancement Strategy for the Linden Neighborhood
ELECTRONICS
11K SF
SPECIALTY FOODS
-2K SF
MISCELLANEOUS
-10K SF
AUTO PARTS
-12K SF
APPAREL
-18K SF
PHARMACIES
-28K SF
GROCERY
-58K SF
RESTAURANTS
-150K SF
FUTURE RETAIL DEMAND On average, households in the United States spend about 21 percent of their income on food, clothing, furnishings, entertainment, and other daily needs. Based on average sales per square foot by retail category, 370 households can support about 14,400 square feet of retail space; however, the amount of square footage varies by income level. Generally, lower income households spend a higher proportion of their income on retail goods and services, but spend less overall compared to higher income households. For example, based on data from the Consumer Expenditure Survey (CES), households earning around $22,000 annually spend $9,300, or 42 percent of their income, on retail goods and services. Conversely, households earning $84,000 annually spend about $18,000 on retail goods and services, which represents only 22 percent of their annual income. Based on projections from Esri, the Linden study area is projected to have a net increase of 370 households from 2017 to 2022. Based on average retail sales per square foot, 370 households earning $22,000 could support about 8,600 square feet of retail, while 370 households earning $84,000 could support about 17,700 square feet. It is important to recognize that this spending is about potential retail support. This spending can occur throughout the Columbus region, nationally, or even internationally depending on commuting, migration, or travel patterns. Also, this potential retail support includes online spending, which continues to be a growing share of retail spending;. This analysis also demonstrates the need to attract shoppers to support local retail. Since not all retail buying power by Linden residents is retained in Linden (aka leakage), in order to support a vibrant retail environment, there is a need to make the area more attractive and accessible for outside shoppers in order to draw “new money� into the community.
DEVELOPMENT STRATEGIES
+370
PROJECTED NET NEW HOUSEHOLDS Linden Study Area
The amount of retail supported by 370 households by income level:
HOUSEHOLD
RETAIL SUPPORT
$15K - $30K
8,600 SF
$30K - $40K
10,600 SF
$40K - $50K
11,700 SF
$50K - $70K
13,500 SF
$70K - $100K
17,700 SF
2018 Median Household Income = $22,000
A Commercial Enhancement Strategy for the Linden Neighborhood | 38
OFFICE MARKET OVERVIEW The Columbus regional office market has been fairly robust in recent years, adding roughly 5.0 million square feet of space during the past four years due to rising employment. This indicates there may be opportunities for new office development along Interstate 71. OFFICE CLASSIFICATIONS While office space varies based on users’ needs, expectations of quality, tastes in design, and images that they wish to project to their clients and customers, a simple way to categorize office space is by labeling them as “Class A” or “Class B.” In general, Class A space typically offers the highest level of service in new or renovated buildings, with high-quality finishes and most expenses included in the lease rate, while Class B spaces have negotiable lease terms with lower rates in existing buildings, sometimes with modest renovations. Given the difference in users of each class type, analysis of the potential demand for and current supply of office space looks at each class separately.
REGIONAL OVERVIEW Due to rising employment driven primarily by the health care and tech sectors, the Columbus regional office market is currently in expansion mode. More than 5.0 million square feet of office space has been added to the market since 2013, an annual average of slightly more than 1.2 million square feet. This follows a four-year period where the annual average was roughly 500,000 square feet. Vacancy rates have also declined from a ten-year high of 11.0 percent in 2009 to its current ten-year low of 6.4 percent, while rents have increased to an average overall rate of $18.07 per square foot. Powered almost entirely by Short North and Easton, Linden’s submarket— North Central—has performed fairly well, capturing roughly 13 percent of new office development within the region, most of which is Class A development. Current vacancy rates and average asking rents for Class A and B properties in the North Central submarket are also similar to the region as a whole despite an
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A Commercial Enhancement Strategy for the Linden Neighborhood
NEW OFFICE CONSTRUCTION SINCE 2009 CLASS A
CLASS B
Columbus MSA 6.2 Million Sq. Ft. Columbus MSA 3.7 Million Sq. Ft. North Central Submarket 1.2 Million Sq. Ft.
North Central Submarket 120,000 Sq. Ft.
Source: CoStar, Development Strategies, 2017
office building inventory that is, on average, much older than the rest of the region. These trends indicate there is increased demand for new strategically located office space, particularly in more urban and central locations. While the Downtown submarket has performed very well, the cost of delivering new space will limit the CBD to certain types of tenants, particularly as it relates to medical office users. As our analysis of demand will indicate, the largest share of future employment growth is expected to be for medical office users. For these reasons, there is a strong opportunity for new office development in wellpositioned and centrally located sites.
DEVELOPMENT STRATEGIES
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COMPETITIVE SUPPLY Based on the few recently built properties in or near the study area, a new Class B office property could generate full-service or gross rents of about $16.00 per square foot. However, a new Class A product on the soccer stadium site could achieve rents of approximately $26 per square foot. As a primarily residential neighborhood with few large developable sites, opportunities for future office development are very limited. As such, new, high-quality office properties are also in short supply in Linden, with the newest properties located in the Four Corners District—the Linden Transit Center and Point of Pride buildings. The most recent asking rate for the Linden Transit Center property was $15 per square foot, which is below the asking rents of some selected properties located outside the study area, as they generally range from $16 to $20 per square foot.
Occupancy 1390 Cleveland ave
Asking Rent/SF
Other opportunities exist, however, along the interstate and on the Columbus Crew soccer stadium site. If the team relocates, it would create a considerable development opportunity that could be leveraged to boost area employment and provide additional revenue or funding sources for community improvements projects within Linden. Achievable lease rates for this type of product would be about $26 per square foot.
The 670 building
Square Feet
Occupancy 100%
Asking Rent/SF $15
Year Built
Square Feet
Occupancy
Asking Rent/SF
Year Built
18,600
100%
$15
1999
48,000
100%
$16.50
2002
Ye Square Feet
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Given the lack of available sites and lower lease rates of new products, new office development within Linden would be smaller in scale and unlikely to occur without development incentives or other subsidies. Despite these conclusions, there are opportunities to provide space for community-based services. For example, feedback from key community stakeholders and local businesses indicated that there is a need for general office space, especially a business center or incubator type space to serve local businesses and entrepreneurs.
A Commercial Enhancement Strategy for the Linden Neighborhood
SELECTED OFFICE DEVELOPMENTS
TOTAL SIZE (SQ. FT.)
CURRENT OCCUPANCY
AVG. LEASE RATE
YEAR BUILT
PARKING RATIO (PER THOUSAND SF)
LAND AREA (ACRES)
LINDEN TRANSIT CENTER
1
18,600
100%
$15.00
1999
1.6
0.9
THE 670 BUILDING
2
48,000
100%
$16.50
2002
4.0
3.9
UNITY HEALTH & RESOURCE CENTER
3
53,811
73%
$18.50
2001
4.0
3.6
THE MARK H ZANGMEISTER CENTER
4
109,667
99%
$20.50
2006
N/A
8.6
AIRPORT IV
5
104,069
100%
$18.00
2000
4.7
9.3
Source: CoStar, Development Strategies
DEVELOPMENT STRATEGIES
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DEMAND Analysis of future office demand—based on job projections and the likelihood of the strategically positioned site west of Interstate 71to capture those jobs—yields an estimate of demand for 500,000 square feet of office space over the next decade. Determining future demand for office development involves evaluating a complex set of variables. This includes the desirability of the location, availability (and price) of land, existing industry clusters, and potential changes in consumer preferences and industry growth. A somewhat simpler method involves looking to: 1) past office performance: i.e. what regional share of office growth did the study area or submarket capture over the past decade?; and 2) future job growth: i.e. how many jobs are office-related industries in the region projected to add over the next decade? Job projections for the Columbus region over the next ten years indicate there will be an increase of 11,400 jobs in occupations that typically lease Class A space such as finance, law, architecture, engineering, and other professional services. These jobs would provide support for roughly 2.1 million square feet of new office space during the next ten years. Jobs that tend to locate in Class B space, including sales, arts and design, computer programming, and the sciences are projected to increase by about 13,500, which would also provide support an additional 2.1 million square feet of space Lastly, occupations in healthcare and other medical-oriented fields are expected to increase by 19,400, which would support approximately 6.0 million square feet of new space.
SITE CAPTURE Although the Linden neighborhood is not currently positioned to capture a significant share of this future demand, the current site of the Columbus Crew soccer stadium immediately west of Interstate 71 would be very marketable if strategically positioned for it. Alone, the soccer stadium site contains roughly 47 acres of land area, while the campgrounds immediately south could provide up to 55 additional acres of land. Based on the past performance of the North Central submarket, which captured roughly 13 percent of demand during the past decade, a capture rate of five percent would be reasonable, indicating the potential for roughly 500,000 square feet of new office development on the site during the next ten years. This assumes the site is repositioned to accommodate new office development and becomes a marketable alternative to more suburban developments on the edges of the region.
PROJECTED 10-YEAR OFFICE DEMAND
MEDICAL 6.0M sq. ft.
CIVIC CLASS B CLASS A CONVENTIONAL CONVENTIONAL 400K sq. ft. 2.1M sq. ft. 2.1M sq. ft. Columbus MSA Source: Ohio Department of Job and Family Services, CoStar, Development Strategies, 2017
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A Commercial Enhancement Strategy for the Linden Neighborhood
CASE STUDY
The Highlands in St. Louis, Missouri
TOTAL DEVELOPMENT (TO DATE)
290,000 Sq. Ft. Class A Office Space
724 Upscale Apartments
126 Hotel Rooms
As the former site of the St. Louis Arena— home to the St. Louis Blues hockey team for more than 30 years—the success of the Highlands development in St. Louis, Missouri provides a relevant case study for redeveloping the soccer stadium site if the Crew were to relocate—in or outside of Columbus. Containing nearly 26 acres of land area, the site is located immediately south of Interstate 64 on the west side of St. Louis City. After the Arena’s demolition in 1999, development began on a new 146,000square foot Class A office building, which was completed in 2001 and was the first new Class A building in the city in over a decade.
DEVELOPMENT STRATEGIES
Since then, an additional 144,000 square feet of Class A and medical office space, 724 upscale apartments, 126 hotel rooms, and 21,000 square feet of retail space, and two parking decks have been successfully developed. Lease rates for the new Class A office space have also easily exceeded market averages, with rates ranging from $25 to $28 per square foot. The apartment projects have also achieved rents of more than $2.00 per square foot, which are also well above market averages. Overall, the project is representative of the type of development that is possible on the soccer stadium site in the event of the Crew’s relocation. There are other relevant local examples of office and/or mixed-use developments such as those at Gowdy Fields and in Grandview Heights.
21,000 Sq. Ft. Retail MAJOR TENANTS
Renaissance Financial BJC Healthcare The Daniel & Henry Co. Clear Channel AECOM Hampton Inn Comet Coffee
A Commercial Enhancement Strategy for the Linden Neighborhood | 44
RESIDENTIAL: ZVA REPORT OVERVIEW An analysis of residential uses is outside the scope of this study; however, a report on the residential market potential for Linden was completed by Zimmerman/Volk Associates, Inc. (ZVA). The conclusions and key findings of this report were utilized as a resource regarding a potential development program for the study area. Given the highly connected relationship between housing and retail, new residential development can be catalytic in the creation of walkable retail districts or neighborhood centers. As the ZVA report suggests, the provision of new housing in the immediate vicinity of Ena’s Caribbean Kitchen could begin to create a walkable town center, while there is potential for multi-family housing on East 11th Avenue just east of Interstate 71. Despite these suggestions, the report provides a number of key findings that highlight the challenges evident in new residential construction in Linden. Using the housing preferences and financial capacities of residents within a “draw area”, ZVA determined the market potential for new housing products within the Linden study area. The report identified up to 1,400 households that represent the annual potential market for new and existing housing units in the Greater Linden neighborhood. The majority of households are renters with incomes that would qualify them for deeply subsidized or affordable housing. On the flip side, demand for new market rate rental housing is extremely limited and concluded optimum market rents are not high enough to support the costs of new multi-family housing development. This is also true of for-sale housing, with support for only 12 to 14 units of new homes or units annually in the study area. The implications of these findings are significant for a number reasons, but most importantly, they demonstrate that new residential development will be dependent on public subsidies such as Low Income Housing Tax Credits (LIHTC), Section 8, and/or grants. They also indicate that community leaders and planners will need to be selective and highly strategic about which projects are supported to maximize the benefits of these finite resources.
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A Commercial Enhancement Strategy for the Linden Neighborhood
QUICK FACTS LINDEN
1,400
households represent annual potential rental market for next 5 years
64%
of demand is for rental housing
61%
of rental housing demand is for subsidy-required units or tenants earning 30% - 80% AMI
$1.27-$1.42
per square foot is the optimum market rent range for new market rate rental housing
70-85
new multi-family rental apartments are supportable annually
12-14
new for-sale housing products are supportable annually
DEVELOPMENT PROGRAM
LOCATION Competitive Position
RETAIL PROGRAM Alternative 1:
NODE 1:
Class A Office
SQUARE FOOTAGE 500,000 square feet Class A and medical offices
INTERCHANGE Economic Engine
Alternative 2: Big Box Anchored Retail
NODE 2: LOCAL RETAIL Authentic Local and Ethnic Restaurants
NODE 3: NEIGHBORHOOD SERVICES Grocery Anchored Retail and Services
Local Businesses and Restaurants
300,000 square feet anchored retail
10,000-20,000 square feet over ten years $8-$10 psf
RESIDENTIAL COMPONENT
The lack of large development sites with central locations and good Mixed-use market highway access make the current rate rental housing soccer stadium desirable for new (later phases) office development if the Crew relocates.
50-70 affordable apartments 10-20 single family homes
15K-25K Grocer Grocery Anchored Retail Services
15K-25K Inline 10K Dollar
COMMENTS
50-70 senior affordable apartments
Phase one involves investing in existing buildings to support local restaurants with a competitive niches. Plan for additional phases leading to a total 30,000 to 40,000 s.f. of parking needs, in case development occurs more rapidly Apartments are largely driven by the availability of Low Income Housing Tax Credits. Townhomes and single family could be supported by other programs, such as HOME funds Strategy dependent on finding appropriate grocery anchor. Other inline tenants could include a jeweler, video game store, cell phone store, ice cream shop, and take-out restaurant
$12-$15 psf Senior affordable apartments could have synergy with nearby
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CHAPTER 5
Market strategy
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BIG PICTURE STRATEGIES A market strategy ensures that the right types of products will be delivered to the right markets, thereby reducing risk to developers and the public sector while increasing the likelihood of lasting, sustainable development and communities. A market strategy builds on the program derived from market analysis, molding it into a strategy that takes advantage of a community’s or site’s assets—resulting in a plan that is wholly unique and distinctive. By leveraging investments in place and the public realm, sound urban design and architecture, anchors to drive traffic, and coordination of complementary uses, a development, district, or community can be created that is greater than the sum of its parts.
1
SUB-AREA STRATEGIES
1A
TARGET THE PRODUCT
2
CREATE DEFINED ACTIVITY CENTERS
3
ENHANCE THE PUBLIC
4
CURATE THE TENANT MIX
5
CREATE THE PLACE
INVESTMENTS IN PEOPLE AND PLACES Given some of the market-based challenges in Linden, enhancements in its retail offerings must be part of a broader community-wide strategy that incorporates investments in both people and places. The following market strategy recognizes these challenges and, in many cases, acknowledges that subsidy and other public or philanthropic investments will be necessary to ensure Linden is on a path of long-term and sustainable growth with the hope that it can eventually attract more market-based investment. Therefore, a major component to the following strategy is that targeted public investments must be made that leverage existing assets in the community such as public transportation, parks, schools, and institutions. These investments must also ensure that local entrepreneurs and community leaders continue to be the driving force behind business development in Linden. Given the size of Linden and differences between the varying nodes, as presented previously, sub-area strategies will be critical, especially as they relate to placemaking and enhancements to the public realm. Most importantly, sustainable growth will only be possible unless investments are made in the people of the community, so they can thrive and be part of the gradual positive changes as incorporated in this strategy.
DEVELOPMENT STRATEGIES
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PEOPLE-BASED INVESTMENTS
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1
S U B - A R E A S T R AT E G I E S
A key part of any market strategy is understanding the characteristics of a particular place and what makes them unique. In the case of the Linden, the character and opportunity changes at different segments requiring a more targeted approach at the sub-area level.
to the south. This sub-area has the strongest potential for the creation of a “Main Street” Linden, with pedestrian-scale retail and commercial uses given its existing building stock and cluster of local businesses near Cleveland and Myrtle avenues.
This market strategy suggests there are different strategies and product types suitable for varying sections, or sub-areas, of the study area and different strategies will be necessary for each to achieve their individual potential.
MALONEY PARK
Historically, Linden has been divided by its residents into North Linden and South Linden, which has had a recognizable impact on community identity. The following sub-area districts are not intended to supersede these historic delineations, but offer a new way to recognize certain community assets, most notably, the existing public spaces. These areas also consider general walking times in which residents and visitors could walk throughout the sub-district within 15 minutes.
Representing the “core” of Linden, the retail environment along Cleveland Avenue and Hudson Street is less cohesive. Though there are some vacant parcels throughout, there is limited opportunity for any large-scale redevelopments due given lot depths and fragmented ownership and use patterns along these corridors. The strip retail center at 24th and Cleveland avenues provides sustainable community-oriented retail, though some capital improvements are warranted. Given the lack of clear opportunities for this sub -area, a community development strategy that focuses primarily on stabilizing housing in the area would be more effective. .
AUDUBON PARK
WINDSOR PARK
Representing the portions of Linden northwest of McGuffy and Maynard streets, this area is anchored by Audubon Park. Given Weber Road to the north and Hudson Street to the south, this sub-area has excellent east-west access and is better connected to areas west of Interstate 71. The housing market is also generally stronger and urban fabric is more intact relative to other parts of Linden. However, there are fewer opportunities for pedestrian-scale commercial uses in this sub-area and the Hudson Street and Interstate 71 interchange is better suited for more automobile-centric development.
Areas south of 17th Avenue represent the Linden’s gateway into the community. It has also been a focal point for development in the neighborhood, as the Four Corners/Point of Pride development at 11th and Cleveland avenues are the newest commercial developments in the community. This area also has excellent access to Weinland Park to the west and MiloGrogran and Downtown Columbus to the southwest via automobile or public transportation, with interchange access at 11th Avenue. Given the civic anchors, including the Columbus Metropolitan Housing Authority and future home of the City of Columbus Department of Neighborhoods, as well as parcels with redevelopment potential, this sub-area has the greatest potential for new community-based retail development.
LINDEN PARK This area includes the northeast portions of Linden, which encompasses Linden Park and the cluster of commercial properties near the intersection of Cleveland and Myrtle avenues. The housing market is generally less stable than in the Audobon Park sub-area, but is in better condition compared with areas
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Linden park Audubon park
Maloney park
windsor park
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1A
TA R G E T T H E P R O D U C T — A U D U B O N PA R K
Identifying the best development opportunities within the Linden study area and targeting those products for certain sites can make these projects more successful, but also help catalyze additional development. While our development program provided a variety of products that could be marketable throughout Linden, certain ones are likely to be marketable only in specific locations. In the case of the Audubon Park sub-area, marketable sites for new large-scale commercial developments are limited , but an opportunity exists to leverage the interchange and a potentially underutilized site immediately west of Interstate 71 for new office and/or retail products.
CLASS A OFFICE Although not currently marketable in Linden, new Class A office space would be marketable on the soccer stadium site (Site A) just west of the interstate if the team were to relocate. New, high quality space would likely lease for around $26 per square foot. Target tenants would be upscale medical practices, single-occupant corporations, and/or other professional business services.
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MEDICAL OFFICE Small-scale medical office properties occupied by neighborhood health care providers or clinics are often located in smaller Class B office buildings, but also in strip retail or first floor commercial spaces, many of which are standalone products. Building or space sizes can range considerably from 2,000 to 30,000 square feet and these types of spaces may be suitable for sites along the eastern edge of the interstate. Achievable rents in the Linden study area are $18 to $20 per square foot, but would be significant higher west of Interstate 71.
ANCHOR RETAIL Anchor tenants include supermarkets or big-box stores such as Target or Best Buy. These stores typically have a large footprint – 50,000 to 150,000 square feet - and large sales volume. Anchor tenants often pay lower rent than inline tenants, given their contribution in terms of sales and customer traffic draw. Due to the lack of visibility from a major non-interstate thoroughfare, this type of retail is less likely than Class A office, but an anchor tenant on the former soccer stadium site would likely pay around $16 per square foot in rent.
ANCHOR TENANTS
CLASS A OFFICE
INLINE RETAIL
MEDICAL OFFICE SPACE
Lease Rate Per Sq. Ft.
Lease Rate Per Sq. Ft.
Lease Rate Per Sq. Ft.
Lease Rate Per Sq. Ft.
$16
$24-$26
$18—$20
$18—$20
Parking Spaces
Parking Spaces
Parking Spaces
Parking Spaces
5/1,000 Sq. Ft. GLA
3.5/1,000 Sq. Ft. GLA
4/1,000 Sq. Ft. GLA
4/1,000 Sq. Ft. GLA
Bldg. Square Footage
Bldg. Square Footage
Bldg. Square Footage
Bldg. Sq. Footage
100,000—125,000
75,000—125,000
50,000—100,000
5,000—10,000
Tenant Types
Tenant Types
Tenant Types
Target Market
Target, Walmart
Corporations, Upscale Medical Office, Professional Business Services
Chain Stores, Take-Out Restaurants, Fitness Centers
Urgent Care, Neighborhood Health Clinic
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1A
TA R G E T T H E P R O D U C T — L I N D E N & W I N D S O R PA R K S
Targeted development products for the Linden Park and Windsor Park sub-areas should be significantly different from the Audobon Park sub-area and include a mix of historic commercial rehabs, affordable housing developments, smaller format retail anchors, and inline neighborhood retail. HISTORIC SPACES A strategy that targets the rehabilitation of existing structure near the intersection of Cleveland and Myrtle is strongly recommended, as they provide unique opportunities to create affordable space for local businesses and entrepreneurs/ Rents for this type of space are, however, very low relative to other larger retail properties at $8-$10 per square foot, but the availability of historic tax credits increase their financial viability.
AFFORDABLE HOUSING As determined by the ZVA report, the only viable housing options for Linden are projects supported with various subsidies such as LIHTC. An attractive family-oriented product with frontage along Cleveland Avenue could help catalyze additional development in the Linden Park node, while an affordable senior housing development in the Four Points area would support the recent investments already made in this location, particularly those related to health care. Additional single-family or townhome development may also be supported with other grants and subsidies, but the amount of actual development realized will depend on the amount of tax credits awarded.
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ANCHOR TENANTS Anchor tenants typically include supermarkets or big-box stores such as Target or Best Buy, with store sizes of more than 50,000 square feet. Anchor tenants often pay lower rent than inline tenants, given their contribution in terms of sales and customer traffic draw. In regards to the Linden study area, while there are no direct opportunities for a large anchor retailer, there is a potential for smaller anchor tenants such as a small format grocery store or a dollar store. These store types are typically stand-alone concepts and would likely be owner-occupants of the real estate or would have a ground lease for the site.
INLINE TENANTS Inline tenants are smaller retailers offering a variety of products and services. Store sizes can range from 1,000 to 5,000 square feet. These tenants will pay a higher rent – in this case, an estimated $14 per square foot.
ANCHOR TENANTS
HISTORIC REHABS
INLINE RETAIL
AFFORDABLE HOUSING
Site Sale Price Per Sq. Ft.
Lease Rate Per Sq. Ft.
Lease Rate Per Sq. Ft.
Average Rents
$10
$8—$10
$12—$14
$575—$1,000
Parking Spaces
Parking Spaces
Parking Spaces
Unit Sizes (Sq. Ft.)
5/1,000 Sq. Ft. GLA
3/1,000 Sq. Ft. GLA
4/1,000 Sq. Ft. GLA
600—1,200
Bldg. Square Footage
Bldg. Square Footage
10,000—25,000
10,000—20,000
Bldg. Square Footage
15,000—25,000
Avg. Rent Per Sq. Ft.
$0.80—$0.95 Tenant Types
Tenant Types
Tenant Types
Dollar Store, Small Format Grocery
Locally Operated Vendors (Coffee Shop, Bike Shop, Salon, Restaurant, Bakery)
Chain Stores, Take-Out Restaurants, Fitness Centers,
Target Market
Low-Income Families & Seniors
Units Per Acre
25—30
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2
C R E AT E D E F I N E D A C T I V I T Y C E N T E R S
Creating deďŹ ned activity nodes with inviting public spaces through targeted investments in place is a key piece a community market strategy for Linden.
CIVIC SQUARE
Given the scale of Linden, there is a need for multiple activity nodes throughout the community each with its own feel, scale. identity, and offerings. This consists of meaningful public space, some retail, and other uses, such as housing. Because of limited demand and market-based opportunities, new, high-quality public spaces will likely be necessary in accomplishing this goal.
Sometimes referred to as a village green, this space can serve as an identifiable central gathering place for community residents— a beautiful place that everyone can point to as the heart of their community.
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PROGRAMMED EVENTS
COMMERCIAL PERMEABILITY
CIVIC ANCHOR
Movie nights, concerts, group exercise, and a weekly farmers market can all take place in a town center, fostering community and boosting the marketability of the city for residents.
Commerce often activates a place in ways that other uses cannot. A well-curated mix of restaurants and independent vendors, with appealing outdoor seating, can blur the lines between public and private space, creating an authentic feeling of vibrancy and energy.
While commerce contributes greatly to a town center, a virtuous cycle can be created in which attractive public space can serve as an anchor, bringing people in and enhancing the visibility— and viability—of retail and restaurant vendors in the process. A civic anchor—libraries, city halls, community centers, public plaza—can enhance such a place further.
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3
ENHANCE THE PUBLIC REALM
The greater opportunity and vision for Linden is to transform an existing marketability hurdle into a civic amenity. This means shifting Cleveland Avenue from one that merely functions as a road for cars to a livable street that is supportive of mixed-use development, socialization, and pedestrian activity.
LIVABILITY While a relatively high-traffic corridor today, it can also be made to serve increased pedestrian activity through a variety of measures that include traffic calming, planted medians, improved pedestrian crossings, reduced curb cuts, street-oriented buildings, plantings, and bicycle facilities. Of particular issue is the lack of comfort in the pedestrian realm that is created by poorly designed sidewalks and fast-moving cars. Creative solutions are needed with plantings, planters, street furniture, and other measures that can be both attractive and provide a level of comfort for pedestrian activity. Such efforts will serve a broader market strategy of making specific portions of Linden more desirable.
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WALKABILITY
STREETSCAPE
DEFINED SPACE
Walkability can have different meanings in different contexts, and is an important component of livability. In the context of Linden, the creation of safer, more comfortable street crossings at targeted intersections is an important strategy for enhancing economic opportunity. Planted medians, pavers, bump-outs, and other measures need to be explored and implemented, in order to encourage residents and shoppers to spend their time (and money) in the neighborhood.
Also related to walkability and livability, streetscape enhancements can use a combination of hardscape (brick pavers, cobblestones, etc.) and plantings to soften the appearance of a harsh environment, give Linden a distinctive brand identity, and evolve a functional road into a multi-purpose street.
Streets do not exist in a vacuum, whether in a city, a small town, or the rural countryside. What happens on either side of that street is at least as important as the materials on it. Cleveland Avenue and other neighborhood streets will be most marketable when buildings of some scale (two to four stories) address it, with the impact of surface parking relegated to less visible places, such as behind buildings. The key sites can serve as catalysts. Street trees, especially where they offer gracious canopies, can be an inexpensive way of branding and defining a place while market-based development occurs at its own pace. Creating a better “sense of enclosure”—a street framed by appealing architecture and street trees—can be an effective cue to drivers that they need to “slow down” and respect pedestrians, cyclists, shoppers, and residents.
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4
C U R AT E T H E T E N A N T M I X
In a “best of both worlds� scenario, both national and local tenants are curated to bind a market strategy with an economic strategy. Opportunities for retail development often exist in the competitive environment, even when it appears that retail is in oversupply. This often comes to light when devising a tenanting strategy, which involves evaluating tenants that are not currently in the market that could succeed. This exercise is equal parts science, art, and strategy. The science comes from evaluating consumer spending patterns, to find out what types of tenants are missing in the market that have been demonstrated to be supported by similar consumer groups in other locations. The art is in curating a tenant mix that is most appropriate for the market and/or economy of a particular place. Because chain tenants, including less desirable ones, tend to pay significantly higher rents than local operators, they can become an important part of an economic strategy to underwrite a development, or a public financial strategy that can be leveraged to pay for improvements to public spaces. Yet good, local businesses have certain strategic advantages (such as attracting residents to a building, development, or community), so these two needs have to be weighed against each other. This is the strategic part of the equation.
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5
C R E AT E T H E P L A C E
Creating a place involves aligning a number of moving parts, some seen and some unseen. These include zoning and economic policy, design, leveraging market forces, and financial packaging. The physical manifestation of the successful coordination of all these pieces is good design, which is the focus of this section. In an era when most development is homogenous and commoditized, great places stand out for their uniqueness, distinctiveness, and universal and timeless appeal. You never have to guess whether you have arrived at a great place. What distinguishes a great place, as it turns out, from a mediocre or unexceptional one, is the details.
SENSE OF ENCLOSURE Probably the most powerful and least understood concept in placemaking involves a concept known as a sense of enclosure. Put simply, building facades, street trees, and other vertical elements can create a sense of comfort in an urban place, the same way walls in a room do. Make the buildings too short, or push them too far apart (as they would be, say if you were walking alongside a wide street in which the nearby shops are far from you because of an expanse of surface parking separating buildings and pedestrians) and you would experience a sense of “placelessness”. Conversely, a main street environment offers an inviting sense of enclosure, and gives reason to amble, stroll, sit, play, and otherwise spend one’s free time in a place, rather than merely regarding it as a place to “get in and get out”, such as a strip mall or big-box development. In many ways, this sense of enclosure is already in place in the Four Corners node and, to a lesser degree, at the intersection of Cleveland and Myrtle avenues. Preserving and enhancing these nodes will result in an improved sense of place that will benefit the community as a whole.
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5
CREATE THE PLACE
PARKING ORIENTATION Where possible, the bulk of parking should be hidden from view, behind buildings and plantings, along major corridors like Cleveland Avenue and the Four Corners. This involves a change from the conventional suburban approach, where parking is oriented toward the front of buildings, greatly reducing or eliminating the prospect of creating a great place. With parking moved to the side or back of buildings and screened by landscaping, the pedestrian environment becomes more attractive and safe due to less curb cuts.
SETBACKS Deep setbacks (fifty feet or more) are often required in new, suburban settings, often with the stated intent of offering a pastoral feel. The result is typically far from it, however, and generally just separates buildings from people and adds to lawn maintenance costs. In the main Linden Park, Maloney Park, and Windsor Park, buildings should be encouraged to be built closer to the right of way to foster a sense of enclosure and encourage pedestrian-friendly forms of commerce, including window shopping. Relaxed setback requirements also increase the area on which a building can develop, increasing profitability and again creating more funds for architecture, building materials, and other valueadding features.
ON-STREET PARKING While surface parking cannot be allowed to dominate in areas where a great place is desired, some amount of parking, such as on-street, is essential for retailers to thrive. Parking meters can be used to encourage quick-visit shoppers to conveniently pull in front of a building, pay a nominal fee, and patronize a business before being on their way. On-street parking can also provide a useful buffer between busy traffic and pedestrians. On-street parking would be especially desired along the Cleveland Avenue corridor in Linden.
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FAÇADE RENOVATION While many of the previous design details are essential in creating a great place, they are mostly useful in Linden where new construction is encouraged. Where market findings conclude that many of the opportunities are in the rehab and renovation of existing commercial buildings, façade renovation can be a useful tool. Partnering and participating with property owners to understand and enact beneficial façade renovations would go a long way in improving the image and marketability of the area.
QUALITY SUBURBAN With respect to sites at highway intersections, pedestrian-friendly measures should be encouraged wherever possible. However, their locations ensure that automobiles will need to be accommodated in a large number. Further, it is strategically important to the community that it leverages these intersections for certain types of development that are likely more suburban in nature. While compromises in the pedestrian network will be necessary, this is less true for building architecture. Within reason, quality materials should be utilized, and a clear set of design guidelines are needed to ensure that chain restauranteurs and businesses conform to the aesthetic that the community intends to enhance for itself at this gateway location. Inspiration can be drawn from a number of cities that have “demanded more” from their chain and outlot tenants.
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6
PEOPLE-BASED INVESTMENTS
Though investments in place and the physical realm are major components to this strategy, there is also a need to align these efforts with creating more opportunities for residents, businesses, and organizations, since in the end, Linden will not thrive because of its physical structures, but the people that inhabit them. Given the market challenges in Linden, there is a need to attract new investment, but also develop a growth-from-within framework to ensure that those residents, businesses, and organizations that are already living or operating in Linden can be a integral part of a more prosperous, equitable, and sustainable future. Interventions can include investments in direct programs and services as well as the development of spaces that can anchor community-driven economic development efforts.
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ENTREPRENEURSHIP Sometimes referred to as a village green, these local businesses should be supplied with the financial and educational resources they need to grow organically from within the community. By establishing a business incubator that focuses on retail-oriented businesses in Linden, startup businesses would bring additional commercial activity to the corridor, which can trigger creative uses of vacant or underutilized properties. Though many business incubator models are geared towards promoting IT or service-oriented businesses, there are also successful incubator models that focus on retail oriented business in industries such as food production, restaurants, fashion, jewelry, and home decorations and furnishings; essentially any industries that require physical design, production space, and a venue for retail sales. By incorporating a well-integrated and well-functioning business incubator model In Linden, there would create a great opportunity to provide assistance to retail-oriented businesses that can then grow and expand locally.
SMALL BUSINESS ASSISTANCE
WORKFORCE DEVELOPMENT
There are numerous resources for small businesses in the Columbus region and throughout the state, including the Ohio Small Business Development Center, SCORE Columbus, and Economic & Community Development Institute. Many local businesses do not realize that most of these services are free and easily accessible and many of these services can provide financial assistance either directly or through referrals. This emphasizes the need for a local organization to help businesses in Linden navigate these resources, or to create a satellite business center in Linden. If small businesses in Linden could pursue some of these avenues, there may be great potential for future expansion and job growth within the community. In many cases, a Community Development Organization (CDC) can laisse between the community and existing workforce development resources and services.
Median income levels and other socioeconomic conditions in Linden are significantly lower than the citywide and regional average, emphasizing the need to develop better paths for upward economic mobility for residents. Given the strong correlations between education and income potential, Linden as a whole would benefit from enhanced and targeted workforce development initiatives. The city of Columbus has ample resources, including the Columbus State Center for Workforce Development, Columbus Urban League, Franklin County Workforce Development Center, and even the local Sisters of Empowerment, although there is a need to better link residents with these services and increase capacity. There would be a great benefit to incorporate workforce development resources with any future commercial development in Linden.
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6
PEOPLE-BASED INVESTMENTS
CAPACITY BUILDING
YOUTH AND EDUCATION
There is a need for a single organization, or strategic partnership of existing entities or organizations to “brig it all together� in terms of economic, community, and real estate development. There are a number of engaged community groups currently operating in Linden, but a coordination of efforts and additional resources are needed to increase influence and capacity.
Investing in youth is investing in the future. Improving education and economic outcomes is a long-term process, but can have profound impacts on a community. Numerous studies have shown that investments in education, especially early childhood education can have a much higher rate of return than investments in education and training for adults. Investments are needed for all phases of life and skill-levels, but aligning economic development strategy with youth development is critical.
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HEALTH AND WELLNESS Creating a vibrant community goes well beyond commercial development activity—the residents themselves must have access to the services and resources that promotes health and wellness for all ages. Planning for positive health outcomes is a process unto itself, but there are some synergies between the commercial/retail environment as discussed in this report and health and wellness. Some uses to consider include healthcare offices and facilities, pharmacies, senior housing, fitness centers (commercial or community-based, recreational facilities, and fresh food/healthy eating.
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CHAPTER 6
Development planning
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DEVELOPMENT PLANNING OVERVIEW Realizing the physical manifestation of market demand within the Linden Study Area is a long range proposition with a timeframe of at least a decade. There is, however, a need to focus on early catalyst projects that can seize on near-term market opportunities and set a new standard for future development. This is where a development plan becomes more tangible and short-term goals for the community come into clearer view. A critical component to a development plan is proper vetting through a number of criteria, including site capacity, market analysis, economic viability, and political support. The vetting of potential projects through these different lenses is often referred to as feasibility testing, as in:
Site Feasibility: Tests how much development product (typically expressed in housing units or commercial square footage) can be reasonably fit onto a site
Market Feasibility: Determines the likely revenues (expressed in rents, lease rates, and sale prices) and depth of demand that exist for different development products
Economic Feasibility: Compares revenues (typically in the form of rents or sale prices) with construction and operation costs, to determine whether a project is economically viable
Political Feasibility: Assesses whether a project is not only legally permissible, but also gauges level of public support or opposition
Testing political feasibility is outside the scope of this study, but some guidance has been provided by the Neighborhood Design Center about what developments and proposed land uses are desired by the local community.
ECONOMIC FEASIBILITY Economic, or financial, feasibility analysis evaluates and tests the financial viability of potential development products by determining their prospective development value and weighing it against their development (i.e., construction, acquisition, etc.) and operational. Where development value is equal to or exceeds development costs, a project is likely to be viable and attractive to private investment. Where development value is less than development cost, a financial “gap” will exist and public or institutional funds will be needed to make a project feasible.
The market feasibility of different development opportunities was explored in the market analysis chapter of this report, whereas this chapter tests economic feasibility—and, to some extent, site feasibility—of several marketable development programs within the Study Area. This is done to understand the degree to which they are viable, making the analysis the culmination of market, financial, and site feasibility testing.
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DEVELOPABLE PROGRAM #1—AUDUBON PARK Three potential development sites were identified in and around the Audobon Park sub-area that are large enough to accommodate new commercial development. Development programs were established utilizing the four points of feasibility and many of the market strategies outlined in the previous section. Given market limitations, some public interventions will be necessary. Based on our market analysis and concluded development program, there is a significant development opportunity near the intersection of Hudson Street and Interstate 71, or Node 1, and three potential sites were identified that could accommodate new commercial development. Given large traffic volumes, future uses would be more automobile centric and potentially less retail focused. Although much of the potential hinges upon redeveloping the soccer stadium site—which is outside of the study area—this would have a net positive impact on Linden by creating more nearby employment opportunities and would generate new tax revenues that could be leveraged to help fund other capital improvement projects within the study area.
SITE A Though it is beyond the scope of this engagement to conduct a specific development program for Site A (given its location outside of the study area), it is recognized that the future course of its development should involve the Linden community because it could have a positive and lasting impact as it relates to economic opportunities for residents. The linkage of Hiawatha Park Drive could provide easy vehicular, bicycle, or pedestrian access from Linden residents. With roughly 47 acres of total land area and supportable demand for up to 500,000 square feet of new office space during the next decade, the current soccer stadium site would be repositioned and developed as a Class A office development and major employment hub in the event of the team’s relocation. Additional commercial development such as hotels, multi-family, and/or retail
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would also be warranted, but the site is ideal for new office development given its central location, interstate access, and the state’s emphasis placed on job creation in its development incentive packages. As shown in the feasibility graphic on the following pages, this type of project will likely require some public subsidies such as TIF.
SITE B This 14-acre site is currently improved with a Family Dollar, Wendy’s Holiday Inn Express and a materials facility for the Columbus City Schools. As a publically owned building, there may be opportunities to keep the existing structure and adaptively reuse it as an office for business services, incubator space, or job training center, but these uses may be better suited for other, less visible, sites such as Site C. Instead, new small-scale office development would be a suitable use , particularly one that capitalized on any large-scale development located across Interstate 71. New office space would be best positioned as medical offices or a clinic, with services geared towards local residents. A small amount of inline retail with frontage along Hudson Street would also be a suitable use, though existing commercial development fronting Hudson is unlikely without large amounts of public subsidy.
SITE C This roughly 9.0-acre site is currently improved with a vacant US Army Department building. As the smallest and least marketable of the three considered sites, it offers limited development potential in the short term, particularly for retail due to its lack of visibility from neighborhood thoroughfares. For these reasons, Site C is best positioned as a long-term play for small-scale offices, civic, or institutional use, particularly one that could reutilize the existing building. Any changes to the marketability of the property will also be driven by the redevelopment of Site A, which would greatly increase its development potential.
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DEVELOPABLE PROGRAM #1—AUDUBON PARK
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ECONOMIC FEASIBILITY
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DEVELOPABLE PROGRAM #2—LINDEN PARK A development program was identified for the Linden Park sub-area that would create a small-scale mixed-use commercial district centered around Myrtle and Cleveland avenues. Due to strong market limitations, significant public interventions will be necessary.
amounts of public subsidy/development incentives. Any new residential construction, for example, is unlikely to occur without assistance from LIHTC, while rehabs of existing commercial buildings will require assistance from federal and/or state historic tax credits or brownfield tax credits.
Based on our market analysis and concluded development program within the Study Area, two development alternatives have been identified for the Linden Park sub-area that seek to maximize existing resources and create a district that is greater than the sum of its parts. These alternatives utilize a number of the market strategies outlined in the previous section, but in order to implement any of these alternatives, substantial public investments will be necessary. This includes, but is not limited to, public funding for capital improvement projects and use of various development incentives such as grants, low-interest loans, historic tax credits, tax increment financing (TIF), New Market Tax Credits (NMTC), and/or Low Income Housing Tax Credits (LIHTC).
The first, and recommended alternative, focuses development resources and attention to the existing buildings and properties near the intersection of Myrtle and Cleveland avenues, particularly those with frontage along Cleveland Avenue. These land uses and their strategic placement or shown in the landuse graphic on the opposite page.
ALTERNATIVE A Collectively, the Linden Park sub-area is large enough to support a number of commercial uses, but most of it is already developed with existing commercial and institutional uses that make redevelopment more difficult and costly. This includes a number of local churches and a funeral home that has received a considerable amount of recent investment. Despite these existing uses and the poor condition of many buildings near this node, there is an opportunity to create a defined neighborhood center that contains a variety of local restaurants and businesses in renovated commercial spaces, new mixed-use commercial and residential buildings, and some new meaningful outdoor public space. Public investments will, however, be necessary for many elements of this development plan to be implemented, as it includes improvements to the public realm with new streetscapes, outdoor public spaces, and rear surface parking. Initial feasibility testing for the prospective building rehabs and mixed-use apartment developments—demonstrated later in this chapter—also demonstrate that these uses are not currently feasible without considerable
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ALTERNATIVE B A second alternative would shift many of these programmable uses to the block north of Myrtle Avenue and Ena’s Kitchen. The benefits associated with this shift include the large amount of land located behind Ena’s and adjacent commercial properties, as well as the potential to place uses at the corner of Cleveland and Genessee avenues. However, the presence of the Marlan Gary funeral home—which has received considerable investments in recent years— makes acquisition more difficult and costly. Development on these blocks would also likely be less catalytic than those to the south, which are closer to stable pockets of housing.
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DEVELOPABLE PROGRAM #2—LINDEN PARK
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DEVELOPABLE PROGRAM #3—WINDSOR PARK The development program identiďŹ ed for the Windsor Park sub-area includes a small retail center anchored by a small-format grocery store and an affordable senior housing development. These uses would build upon, and have strong synergy with, existing properties in the Four Corners district. Our concluded development program for Node 3 identified an opportunity for small format grocery store and supporting retail, as well as affordable senior housing property assuming tax credits can be secured. A new dollar store is also in high demand despite the presence of an existing Family Dollar, which could be renovated or replaced with a new store. These uses would be highly supportive of the recently developed properties in the Four Corner district and would build upon the initial investments already made by the community.
ALTERNATIVE A Large contiguous sites are rare in the Windsor Park area, a significant constraint for major redevelopments. While a number of alternatives exist that could place these development products near the Four Corners intersection, the best alternative is to position them along Cleveland Avenue to the north of McClelland Avenue. Doing so will maximize their impact by placing them within closer proximity to residential areas and to the BRT line. These land uses and their general placement are shown in the graphic on the opposite page. Acquisition will, however, be difficult and more costly given the large number of individual owners and parcels on these blocks, increasing the need for strong public interventions.
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ALTERNATIVES B AND C Additional development options include shifting these uses to the southern or western edges of the neighborhood. The first potential development site is situated on the southeast corner of Cleveland and Bonham avenues near the neighborhood’s southern edge. As a large, underutilized site, this would make acquisition easier, but it would not maximize any benefit derived from the development and would reduce its potential impact on the broader neighborhood. Therefore, this is the least preferred option. The third development option would be to place some these uses along both the north and south sides of 11th Avenue just east of the interstate. Although this would better incorporate the development within the neighborhood and could establish an attractive walkable retail corridor on 11th Avenue, it would be less catalytic than the first alternative. The presence of the interstate also makes this location more desirable for auto-centric uses that will likely require fewer public interventions or resources.
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DEVELOPABLE PROGRAM #3—WINDSOR PARK
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ECONOMIC FEASIBILITY
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CHAPTER 7
IMPLEMENTATION
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OVERVIEW This study outlines market-based strategies that would have the greatest catalytic impact on the greater Linden community by focusing on targeted sub-district investments as well as area-wide policy, programs and investments. Given many of the market challenges and barriers to development, implementation will require a healthy balance of funding, governance, and investments from a number of public, private, non-profit, and institutional entities. As presented in previous chapters, there are a number of barriers to development, which has hindered new investment over the last few decades. Given these challenges, implementing the strategic elements presented in this report will require more than just projects—it will require a framework that incorporates three key actions: 1) Fund, 2) Govern and 3) Invest. This implementation framework is intended to support investments in the public realm, real estate, small business, and people in order to generate net positive community outcomes. It is critical that there is continual and consistent evaluation of community outcomes and there are systems in place to ensure accountability and community feedback. These elements are very much interdependent and are not necessarily linear. For example, in most cases, specific interventions such as the implementation of programs, policies, and projects cannot occur without funding or creating new organizational structures or partnerships. In other cases, funding sources many already be available (such as the low-income housing tax credits), but a specific project is needed to secure funding, such as a mixed-use development with affordable housing units. In order to change the trajectory of Linden, a number of incremental implementation steps will be necessary. Because this will require many years— likely 10 to 20 years—of dedicated effort on the parts of both the public and private sectors, the strategic goals and objectives laid out in this report should be seen as adaptable to changing circumstances and influences and should be periodically reevaluated.
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FUND One of the most important takeaways from this study should be the understanding that few, if any, quality development products will occur in the study area that are financed by the private sector alone. In nearly every case we tested, a substantial financial “gap” exists, indicating that partnerships with the public or institutional sectors will be necessary for the Linden to realize the development of these identified catalytic projects. There are a number of funding tools available that could help “push” certain developments forward as well as jumpstart new or expand existing programs and services. For most real estate development, additional funding or up front public subsidy will be necessary to attract private investment. Other types of community interventions such as investments in the public realm, streetscaping, or other infrastructure will be also needed, and, in most cases, primarily funded by public or philanthropic resources.
large-scale mixed-use developments, specifically for nodes 2 and 3; however, this subsidy is limited. From FY 2014 to 2017, affordable housing projects with total development costs of $377.2 million were awarded LIHTC, $202.1 million of which were for 23 developments (new construction or rehab) located in the city of Columbus. The average cost per development was around $8.8 million. It is reasonable to assume that at least two projects in Linden could obtain funding within a ten-year period, particularly if diversified by property type, tenant base, and affordability level.
STATE AND FEDERAL: TAX CREDITS
Historic Tax Credits are available for redevelopment and/or reuse for qualifying commercial and mixed use buildings. From FY 2014 to FY 2017, 40 projects in the Columbus MSA were awarded a total of $36.5 million in HTC representing just over 10 percent of total reported project costs. This shows that HTC are a viable resource for future redevelopment projects in Linden. There is a limited stock of eligible historic properties, but given the catalytic potential of these resources, here is a need to conduct a survey of potential eligible properties for state and/or federal tax credits.
Residential and Mixed-Use Development
Business Development
In most cases, tax credits represent the best available up front funding resource to bridge the real estate development feasibility gap. Since rents and sales prices are too low to support new market rate development, tax credits will be needed for short– and mid-term catalytic developments. Tax credits are typically awarded on a project-by-project basis and the recipient is often a developer and/or community development corporation (CDC) or organization. Historic tax credits (HTC) and Low Income Housing Tax Credits (LIHTC) are the primary resources for new residential and mixed-use construction or rehabilitation.
New Markets Tax Credits (NMTC) was created via the federal Community Renewal Tax Relief Act of 2000, which was designed to create incentive and investment programs to support businesses in low-income communities. The Community Development Financial Institutions (CDFI) Fund through the Treasury Department allocates funding to local Community Development Entities (CDEs) that then finances projects in eligible low-income areas. In the case of Linden, the entire study area is designated as an “Eligible with Severe Distress” area. Funding is available to directly support businesses or real estate development with the intention of job creation or retention. The Ohio Community Development Finance Fund was awarded $55 million and $65 million in 2014 and 2016, respectively, although funding or Linden-based projects could be provided by an out-of-state CDFI as well. Program
Given the limited historic building stock with redevelopment potential in the study area corridors, LIHTC would be the best possible source of funding for
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requirements are often complicated, which is why an official liaison in Linden should be designated for on-the-ground marketing and support. The Job Creation Tax Credit and Job Growth Incentive are city of Columbus incentive programs to encourage employment growth. Eligible businesses can receive tax credits or reductions in local income tax withholdings with rates based on the number of jobs or level of new investment. The state also offers the Ohio Job Creation Tax Credit (JCTC). These incentive programs are available to businesses throughout the city of Columbus, so they will not necessarily encourage new investment in Linden in particular, but the availability of these programs make larger scale investment in Node 1 and Mapfre Stadium site more attractive as employment-driven redevelopment opportunities. Therefore, it is critical that policies and programs are put in place to endure that Linden residents reap the benefits of any new development, including dedicating potential TIF revenues, community impact agreements, and workforce development and training opportunities.
Low Income Housing Tax Credits FY 2013 - FY 2017, City of Columbus
$20 million
23
$202 million
Total Annual Awards
Total Projects
Total Estimated Development Cost
Historic Tax Credits FY 2013 - FY 2017, City of Columbus
$31 million Total Awards
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26
$305 million
Total Projects
Total Estimated Development Cost
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FUND
LOCAL TOOLS
Special Improvement District (SID)
Establishing taxation districts can help generate additional resources that can be reinvested directly into the community, which can create a positive feedback loop of economic activity.
Special service districts are often a tool for commercial corridors or retail nodes that levy a special tax rate on property and/or business owners for enhanced services such as security, lighting, marketing, and other public improvements. These placed-based improvements can attract more customers and the cycle continues. The City of Columbus has four Special Improvement Districts (SIDs) that generate funds through a “self-assessment� based on the amount of property frontage within the district. Given the limited economic activity within Linden and relatively large amount of tax exempt properties and uses, a SID is a less appropriate tool in short-term. SIDs have the greatest impact by leveraging existing economic activity to enhance a retail environment. In the case of Linden, more is needed to catalyze economic activity before leveeing additional tax revenues.
Tax Increment Financing (TIF) TIF is a tool that leverages potions of incremental increases in property values for public improvements of a specific development or district, such as infrastructure, streetscaping, or other investments in the public realm. There is a need for the redevelopment site or district to have a project and a certain scale that can generate sufficient revenue for new public investments. In the case of Linden, a TIF district in nodes 2 and 3 would have minimal revenue creation; however, Node 1 could provide ample revenues. It is also encouraged that policies are in place that any future redevelopment of the Mapfre Stadium site provides a revenue stream for selected areas in the Linden study area. As part of the structuring of the Easton TIF to support the continued development of the Easton Town Center, Linden was guaranteed a $4.25 million in vestment in public infrastructure and an additional $1.5 million to support local revitalization efforts. There are some limitations to the use of these funds, but these funds can serve as a catalyst and perhaps as matching funds for a number of investments. Streetscape efforts should be high in quality and focused at nodes, key intersections, and future BRT stops. If the $1.5 million is eligible for use to acquire land, or for site preparation, it is encouraged that these funds are concentrated in Nodes 2 and 3.
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POTENTIAL ESTIMATED 10 YEAR TIF REVENUE BY NODE
DEVELOPMENT STRATEGIES
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FUND Neighborhood Commercial Program
Revitalization (NCR)
The stretch of Cleveland Avenue in the study area from East 11th Avenue to East Weber Avenue is one of six Neighborhood Commercial Revitalization (NCR) areas in the city, which is a program to provide a variety of services and resources, such as direct investments in capital improvement and planning, as well as financing and technical assistance for area businesses. The NCR investment fund offers loans of up to $100,000 for businesses that create jobs. There is also a Storefront Renovation Grant and Interior Renovation Program. It is highly encouraged that local businesses, developers, and community leaders connect with the City of Columbus to better understand these programs and project eligibility.
Tax Abatement The City of Columbus offers a number of tax abatement programs designed to encourage new real estate investment by freezing taxes at pre-development levels and lowering overall costs for developers and future owners. As part of the NCR program, properties in the Cleveland Avenue corridor would be eligible for a 100 percent exemption from new property tax from real estate investment for up to 15 years. The entire Linden study area is also a Neighborhood Investment District in which residential homebuyers are eligible for a 15-year tax abatement on new construction and 10-year abatement on substantial improvements (20 percent of market value). Rental property owners are eligible for a 12 year abatement on properties improved a substantially (50 percent of market value). These programs should be marketed to current and future property owners.
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NEIGHBORHOOD COMMERCIAL REVITALIZATION PROGRAM
INSTITUTIONAL/PHILANTHROPIC
GRANTS AND SEED FUNDING
Community revitalization efforts often need strong institutional or philanthropic involvement since these organizations often have the necessary resources and programs for significant impacts. In communities like Linden with limited market-based opportunity, many near-term strategies are resourcebased, yet public sector assistance is limited. Continued involvement from the United Way and The Ohio State University as well as additional foundational and institutional support will be needed for capital investments in public spaces and for placemaking and operational support for community-based organizations such as a CDC or programming.
A no strings attached seed funding program is another programs that can provide direct assistance entrepreneurs. Successful program can include a blend of public, private, and philanthropic funds and grant recipients can also receive pro bono services to help grow their businesses. This type of program with a focus on Linden-based businesses can also create additional marketing and promotion for both the grant recipient and Linden as a whole.
LENDING RESOURCES
The U.S. Economic Development Administration (EDA) can also provide funding to support local business development, including business incubators and other spaces and resources.
CROWDFUNDING In addition to funding for new real estate development and community programming, there is also a need to ensure that the local business community has the resources and financing to operate and grow. In many cases, small business funding may be available, but a local liaison is needed to link businesses with resources. The city of Columbus’ Economic Development Division has a number of business development funds, including the Business Development Loan Fund and Working Capital Loan Fund, which offer lowinterest loans for the acquisition of real estate and equipment. The city also offers Micro Loan programs through its Economic Community Development Institute.
DEVELOPMENT STRATEGIES
The growing impact of crowdfunding for grassroots initiatives cannot be overlooked. Crowdfunding can not only help raise much need funding for a variety of recipients, but also create synergies and support structures within the community. More and more small businesses are using crowdfunding to raise capital for new investments, product lines, or expansion. Businesses can use social media to both market their products, while generating funds and expanding customer base. This platform is also growing traction as a community development tool as community-based organizations have raised funds for public improvements, public art, community gardens, pop-up stores, and festivals. There are also recent examples of using crowdfunding for real estate development, including commercial development and affordable housing. Future use of crowdfunding for Linden will require an orchestrator and enhanced marketing efforts to reach potential funders.
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GOVERN The implementation of the strategic framework presented in this report will be reliant upon strong leadership, strategic partnerships, and a dedicated on-the-ground and well-resourced organization to ensure that incremental investments are best positioned for longterm growth. It is critical that there is not only a steward of this plan, but that all interested parties are aligned. Without a central voice or entity that speaks for the collective interests of the community, there is a risk that individual efforts will have less of an impact or even conflicting outcomes. It is recognized that the dissolving of the Greater Linden Development Corporation in 2017 was a considerable blow to the community, but the future of revitalization efforts in Linden will be dependent on having a strong and well-resourced organization that can consolidate and manage economic and community development initiatives.
COMMUNITY DEVELOPMENT ORGANIZATION (CDO OR CDC) One of the most critical steps in ensuring that the Linden study area is on the path of growth and prosperity is forming a dedicated organization or strategic partnership with existing organizations to be the official stewards of future planning efforts, fundraising, and investment. There are a number of community and faith-based organizations, business owners, and neighborhood groups making tremendous strides in improving conditions in Linden, which include the city of Columbus, North Linden Area Commission, South Linden Area Commission, United Way, Habitat for Humanity, and Saint Stephen Community House, to name a few. Given limited resources (especially funding), there is a need to better coordinate these efforts and ensure there is a unified vision for the community.
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There is also a need to create a better link between efforts along the commercial corridors and nodes and community development efforts in the residential portions of the neighborhood. As part of the Neighborhood Economic Development “system� presented previously, housing demand, retail development and neighborhood conditions are all part of an ongoing cycle, and targeted investments along Cleveland Avenue will only have minimal impact if the surrounding neighborhoods continue to deteriorate. A dedicated Community Development Corporation (CDC), a 501(c)3 organization, can often balance housing, economic development, and social service needs in a community, and also act as a conduit for public, private, and philanthropic funds. The CDC could pursue all housing subsidy funding sources for new construction, rehabilitation, and homeowner assistance. In addition, this type of organization could coordinate and improve existing services for youth and local economic development initiatives. This type of comprehensive organization would be immensely beneficial to the Linden community; however, given limited resources, in the near term, a formal partnership of the existing stakeholders should be an initial step. A successful (and impactful) CDC generally evolves over time. In many cases, these organizations are formed with a volunteer board and a single staff person primarily engaged in community organizing. This individual is often the liaison to connect residents with existing housing-related programs and begin early stages of fundraising and capacity building. Over time, the CDC can evolve into have a more direct role in property maintenance, new development, and public realm improvements, which generally requires additional staff and funds. The fully evolved CDC has the capacity to acquire and develop property leveraged by tax credit programs and focus more on economic development and catalytic projects.
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GOVERN KEY STAKEHOLDERS
Community Involvement
Institutions
As presented in the SWOT analysis, a threat to these planning efforts is a lack of coordinated vision and sentiments of mistrust from the community. It is common that with so many parties with vested interests within the community, there can be sentiments that the community is losing their voice or control of the process. At the same time, community leaders and organizations need to be activity involved and use their standing to maintain trust between the community and other key stakeholders.
The impact of community development efforts are dependent on having wellresourced organizations especially institutions and philanthropic organizations. Current stewards of the Linden Community Master Plan, including the United Way and The Ohio State University, will need to continue their involvement in the long run and can make contributions, not only financially, but through programming that directly serves the local residents.
Strategic Partnerships Partnerships with local stakeholders and the City of Columbus has helped move the Linden Community Master Plan forward. The City has demonstrated a strong commitment to the community with the BRT investments, Columbus Metropolitan Housing Authority, and relocation of the Department of Neighborhoods to the Point of Pride, which will continue to have a stabilizing impact. It is critical that the community not only maintains a strong relationship with city departments, but forge partnerships with other government agencies, organizations, and private companies throughout the region to encourage ongoing collaborative efforts.
Business Association As mentioned throughout this report, Linden’s local businesses are some of its greatest assets, because they bring vitality and identity to the community. Given economic challenges, it is in the best interests of business owners to become organized and continue working with a collective voice, since they all stand to benefit from revitalization efforts. The community needs their vision and commitment to increase development potential throughout the Cleveland Avenue corridor and nodes. At the same time, the businesses themselves also need strong community support.
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COMMUNICATION
ACCOUNTABILITY
Successful neighborhood planning efforts need consistent and continual lines of communication so the community and stakeholders have a clear understanding of the vision and timeline for future projects, but more importantly, milestones completed to date to help maintain momentum. Revitalization efforts in Linden will require incremental investments, programs, and actions, and the tangible results may not surface for several years. However, these ongoing efforts need to be well-documented and communicated. Additionally, with all of the stakeholders involved in the planning and implementation efforts, cross-communication between the city of Columbus, institutional partners, local businesses, and community stakeholders will be necessary to avoid duplication of efforts and to ensure that the community maintains some level of ownership of the plan. Some of these communication efforts could include grassroots organizing, maintaining an active social media presence, town hall meetings with plan updates, public meetings, events, and proactive outreach.
The Linden Community Master Plan is a long-term vision and path for the community and maintaining momentum will require a steward of the plan. With so many different public, private, institutional, and community stakeholders, this emphasizes the need for a centralized organization with linkages to all of these groups and interests, but can orchestrate collaborative efforts and maintain the eyes and ears of the community. Typically, this function is served by a CDC and this type of entity can maintain a level of accountability to endure that the plan is being implemented and continues to be in the best interests of the community. Based on community outcomes, certain elements of the plan may require revision or reassessment, which also emphasizes the need for accountability.
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INVEST Improving the economic conditions in Linden’s commercial corridors requires a blend of place-based investments, catalytic real estate development, and community-wide policies and programs to ensure that future growth equitable and sustainable for current and future businesses and residents. After decades of disinvestment in the Linden community as well as impacts from external forces such as suburban strip center development and regional migration patterns, changing the trajectory of Linden will require incremental and long-term interventions and involvement. At the same time, redevelopment in select close-in, core urban neighborhoods regionally and nationally has surged in recent years, which offers new potential for Linden. Common thread in urban redevelopment have included investments in (1) the public realm, (2) real estate (3) small business, and (4) people, including community-based services related to education, health, safety and quality of life. These investments will require alignment in terms of funding and governance as described previously. Using these four approaches, there is a series of actions or projects over the short, medium, and long terms that are needed to implement the strategic framework and laid out in previous chapters.
PUBLIC REALM These actions involve direct investment into the designated nodes and public realm in the commercial corridors. As part of the district strategy, there is also a need for further study, such as a comprehensive parking analysis, as well as space activation, programming, marketing and branding. 1. Develop comprehensive streetscape and capital improvement plan for Cleveland Avenue Investing in place will make the retail environment more attractive to customers and businesses; however, given limited resources, there is a need to plan targeted incremental investments, which in itself, will require a plan. 2. Develop traffic calming strategy and plan The lack of on-street parking throughout most of the Cleveland Avenue corridor and relatively high speeds of vehicular traffic distract from the pedestrian experience. In order to create a more inviting retail environment, there will need to a better balance of pedestrian amenities and traffic flow. 3. Develop marketing and branding program for Linden As presented in the retail market analysis section, vibrant retail districts and corridors are successful if they can draw a customer base from outside of the community. Given negative perceptions of the Linden community, a marketing and branding strategy that promotes locally-owned businesses and diverse culinary offerings could create stronger synergies with communities to the west and Downtown Columbus. 4. Conduct parking study Though key strategies include enhancing the pedestrian environment and investing in areas around the BRT stops, the (re)development of new retail space and success of local businesses will be dependent on drawing from a broader customer base with the vast majority of customers arriving by automobile. Parking needs to be available, visible, and accessible, but appropriately placed to not create conflict with pedestrian activity.
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5. Establish and implement a retail recruitment strategy Successful retail districts must maintain a healthy balance of organic small business growth and targeted recruitment of retailors to diversify service offerings. Smaller-scale local businesses will need financing, resources, and technical assistance (discussed in Economic Development section), while larger -scale retail development as proposed for Nodes 1 and 3 with anchors and inline tenants will require targeted outreach to retailors and brokers to “sell” the Linden community and demonstrate the market opportunities. 6. Engage local community with space activation and programming In the near-term, programming and space activation can have a profound impact on the perceptions of a community and create a sense of vibrancy. Some of these interventions can include public markets, performance, public art, and other community gatherings that can occur in public spaces and as an interim use for underutilized structures. 7. Explore special district formation Improvements to the streetscape along Cleveland Avenue, development nodes and public realm will demonstrate progress in plan implementation and help catalyze new private investment by making the area more inviting to potential consumers, benefitting all businesses located there. As presented previously, commercial activity in Linden is not robust enough to support a Special Improvement District, although as investment increases, this may be an option in the long term. A TIF District would have modest returns in Nodes 2 and 3, although Node 1 has the most revenue potential, especially with office development. Given these constraints, it is highly encouraged to seek some sort of direct revenue stream into Linden from the potential redevelopment of the Mapfre Stadium site.
DEVELOPMENT STRATEGIES
REAL ESTATE Real estate development in most cases is the role of the private sector. However, there is a need for public subsidies or incentives in communities like Linden with considerable feasibility gaps. There is also need to assemble land to allow for larger-scale and more catalytic development, as well as ensuring that future development has the greatest net positive impact on the community. 1. Acquire and assemble land in key sub-districts and nodes for redevelopment Helping secure critical, strategic, and early catalytic properties can assure that crucial sites are removed from speculation or absentee property owners. This also increases the odds that these sites are developed with uses consistent with the strategic desires of the community. Publicly acquired land can also be “contributed” to prospective redevelopments, but also leveraged for an acceptable rate of return to the initial funders through mechanisms such as land leases or partnerships. Where owners are recalcitrant to sell blighted commercial property at reasonable market prices, the City may need to exercise powers of condemnation in order to achieve a publicly-supported vision. Such activity need not be construed as heavy-handed state involvement, if it is used judiciously and as a tool of last resort. 2. Explore establishing development district overlays in key development nodes to allow greater flexibility in development Given the barriers to development and financial feasibility gap, it is critical that the underlying zoning and development codes are established to encourage development rather than form additional barriers. It is encouraged that the city create opportunities and an efficient process for allowing greater flexibility for nodal development in terms of use and density.
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INVEST 3. Create technical assistance programs to assist locally-based developers and property owners
CASE STUDY
Arlington Grove
The future of Linden is somewhat dependent on the ability for individual property owners and smaller-scale developers to maintain and/or upgrade the existing building stock. Technical assistance programs are available throughout the city and resources should be devoted to helping individuals access these services. A well-established CDC can often serves as a liaison. 4. Leverage low-income housing tax credits (LIHTC) to support mixed-use development in key development nodes Given the financial feasibility gap, in most cases, tax credits and other subsidies are necessary for any new development of scale in the study area. LIHTC is the primary program for affordable housing development, but there is a growing number of examples of using LIHTC for mixed-use development in commercial corridors. These development typically include a mid-rise structure with street-level commercial space that can be leased to retailers or community service providers. 5. Create developer/recruitment request for proposals (RFPs) for key development nodes In order to foster competition, innovation, and the best possible partnership, developer requests for proposal (RFPs) are recommended for any critical or strategic sites. In them, the City can proactively outline its aspirations for these sites, and the general expectations that need to be met in order to be selected and considered for use of public incentive and assembly tools.
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Arlington Grove (LIHTC)
Arlington Grove in St. Louis, MO includes more than 100 affordable, public housing, and market rate units and also includes ground level commercial space. Located on Dr. Martin Luther King Drive (Route 180), the corridor has similarities to Cleveland Avenue in Linden and this development has not only provided much needed quality affordable housing to the neighborhood, but also serves as a stabilizing presence, enhances safety, and increases development potential of neighboring blocks/parcels by enhancing the pedestrian experience with its street-level retail space. This is an excellent example of leveraging LIHTC and other subsidies to create a mixed-use product on a business commercial corridor. The development also includes diverse mix of residential typologies with townhomes and a rehabbed school building with agerestricted units.
SMALL BUSINESS
PEOPLE
Development and placemaking alone will not be sufficient enough to transform Linden. There is also a need to better harness local talent and ensure that existing local businesses and aspiring entrepreneurs have the resources to thrive, while also safeguarding the programs and resources necessary for upward economic mobility. These programs include workforce development, capacity building, and neighborhood-wide community development efforts.
It is recognized that a comprehensive neighborhood investment strategy needs to involve investments in programs and services that directly address the education, health, safety, and quality of life of its residents. The evaluation of existing community-based services and formulation of strategic efforts were beyond the scope of this report, but it is encouraged that these types services remain embedded in this plan. The integration of all four investment areas: 1) public realm, 2) real estate, 3) small business, and 4) people must remain aligned to ensure that the benefits of these revitalization efforts are equitable and longlasting.
1. Create business incubator/small business assistance center Some of Linden’s greatest assets are its locally-owned businesses and there is a need to provide a space to establish a local entrepreneurial ecosystem. Business incubators can cover a wide range of sectors, including information technology, small business services, and retail. Assisting aspiring entrepreneurs, or existing business owners to grow and operate in Linden will have a significant impact on the community’s long-term economic growth. 2. Establish local/small business development liaison to link Linden businesses to citywide resources or continue outreach and implementation of Neighborhood Commercial Revitalization Program (NCR) The City of Columbus offers a host of resources designed to assist small businesses, although some Linden-based businesses may need additional assistance in accessing these resources. 3. Create new or enhance existing workforce development resources The future prosperity of Linden is ensuring that its residents have the education and training necessary to fill well-paying employment opportunities. The BRT line will assist with physical accessibility, but there is also a need to enhance the skillsets of existing residents to compete in today’s economy. Enhancing existing services or creating a more comprehensive workforce development center in Linden is a necessary first step.
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1.
Riche, Martha Farnsworth. “How Changes in the Nation’s Age and Household Structure Will Reshape Housing Demand in the 21st Century.” HUD. 2003.
2.
Frank, Lawrence et al. “New Data for a New Era.” SMARTRAQ. 2007.
3.
“The 2011 Community Preference Survey.” National Association of Realtors. August 2011.
4.
“Thinking Outside the Box.” The Economist. The Economist Group Limited. June 2016.
5.
Anderson, Monica. “Digital divide persists even as lower-income Americans make gains in tech adoption.” PEW Research Center. 2017
6.
Lane, Bridget, and Maureen McAvey. “Retail in Underserved Communities.” Urban Land Institute. 2014
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