A City’s Future Lies in the Power of Its Downtown and Regional Centers

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Urban3 Principal Joe Minicozzi, AICP (left) answers a question asked by Rivard Report Director Robert Rivard.

Bonnie Arbittier / Rivard Report

Urban3 Principal Joe Minicozzi, AICP (left) answers a question asked by Rivard Report Director Robert Rivard.

With just more than a month to go before San Antonio voters decide the fate of an $850 million municipal bond, of which $250 million is dedicated to the urban core, Centro San Antonio hosted a program Friday at the Briscoe Western Art Museum on how “the power of downtown and its regional centers” can make an entire city stronger.

“What’s good for downtown is great for the city, but even better for the county,” said Joe Minicozzi, an architect with Urban 3, a sought-after lecturer on city planning issues and founder of the Asheville (N.C.) Design Center. He was introduced at the luncheon, attended by nearly 400 city planners, municipal leaders, corporate partners, and developers, by City Manager Sheryl Sculley.

A large crowd gathers to view Urban3 Principal Joe Minicozzi's presentation at the Centro San Antonio Luncheon at the Briscoe Western Art Museum.

Bonnie Arbittier / Rivard Report

A large crowd gathers to view Urban3 Principal Joe Minicozzi’s presentation at the Centro San Antonio Luncheon at the Briscoe Western Art Museum.

The power of downtown and regional centers, like the Medical Center, lies in its density and taxable value per acre, Minicozzi said. And the data proves it. He used his own hometown as an example.

With a population of 90,000 and 40 breweries today, downtown Asheville, like many cities, began to decline in the 1970s and ‘80s as growth moved to the suburbs and shopping malls sprang up. But because the City and developers have begun to breathe life back into the urban core, taxable values also have risen, from $104 million in 1991 to $665 million in 2010.

He presented the case of a vacant, six-story building in Asheville valued at $300,000 that, since renovations, has increased 3,500% in 15 years and is now worth $11 million. He contrasted the tax revenues of that building’s footprint, one-fifth of an acre, to the 34 acres an area Walmart occupies with its $20 million tax value, or $6,500 per acre.

Even when adding sales tax, the renovated building downtown delivers $330,000 in tax revenues while the megastore only pays $3,300. Jobs-per-acre are significantly different as well.

Closer to home, in Austin, Texas, Minicozzi showed that 1.8 acres of the urban InterContinental Stephen F. Austin Hotel is equal in taxable value to 172.1 acres of the suburban Southpark Meadows center.

It’s a cautionary tale for city government when cities like South Bend, Ind. and Lafayette, La. allow development to outpace its ability to maintain the infrastructure required to keep up with growth – a clock that’s hard to turn back.

“A city is a finite boundary of land that has to be managed,” Minicozzi said. “There’s no difference between my real estate development company and the city of Asheville. It’s just a bigger corporation. You have a charter, a boundary, a CEO, and you all are shareholders in this large corporation. It has to function.

“Does Ted Turner wake up every day and not look at numbers and not see what the return is of ad space and what shows are functioning and which are not? Of course not. So why don’t we expect that of our communities?”

He said it’s like looking at buildings like crops, and making a decision as the farmer does, on which harvest is going to yield the best value. “Do the math,” Minicozzi urged.

During a question-and-answer session, moderated by Rivard Report Director Robert Rivard, the audience asked about the common issue of downtown parking – to which Minicozzi mostly responded “use your feet” – and also how San Antonio compares to all the other cities he discussed.

Urban3 Principal Joe Minicozzi, AICP (right) answers audience questions directed by Rivard Report Director Robert Rivard.

Bonnie Arbittier / Rivard Report

Urban3 Principal Joe Minicozzi, AICP (right) answers audience questions fielded by Rivard Report Director Robert Rivard.

Minicozzi declined to speak specifically about San Antonio because he has not studied the city’s metrics, but added, “I will say, as a random guess, you’ve got a lot of density downtown, a lot of old buildings that are mixed use, that are being rehabilitated, (so) you’re probably doing alright.”

He also addressed the question of how North Carolina’s “bathroom bill” has affected the state, admitting that while many companies, especially tech ventures, pulled out after the bill was passed, many people didn’t pay much attention until the men’s NCAA Final Four withdrew and Duke University was knocked out of the finals.

Minicozzi’s company, he said, has been blocked from submitting proposals for some jobs due to the new state law that prohibits transgender people from using the bathroom that matches their identity.

To a question about tax abatements, and what level is prudent, Minicozzi said, “That depends on the project.

“The thing we need to realize is there are anomalies built into the system that are called subsidies, even if we don’t call them that,” he said. “So if I go to a meeting and ask your City manager for a tax abatement, that’s a conscious public act where you all are aware of the special deal I’m getting.”

But everyone knows, he added, that developers like Walmart produce low revenue for the city.

“They have figured out how to take advantage of tax policy. They build really cheap buildings and massive parking lots. So they actually get a discount on the value of your dirt. It’s a really weird thing, but that’s how our tax system works. I call that a subsidy. They get all this infrastructure and they don’t pay for it.

“I’m sorry I keep beating up on Walmart, but the data is out there. The average Walmart consumes all of its property tax bill just with the police services you all send there.”

He’s not anti-suburb, however.

“Not everybody wants to or should live in high-density dwelling. So we should have some form of low density suburban environment. You just have to keep that in check,” he said, because infrastructure for sprawl is costly.

“This is an American paradigm where we’ve gotten ourselves into the habit of living as if the future is magically going to take care of these costs. It won’t,” he said. “What we’re dealing with right now are decisions that were made in the 1960s. And that’s why you’re having to go for a bond program.”

With bond measures, a city must also determine what it can afford, and it has to be measured to be managed. “When you don’t have the money for the greenway, the art teacher, the dancing traffic cop … it’s because it’s tied up in a development pattern that’s drying up growth,” Minicozzi said.

The country was formed on tax policies and codes, he added, and government should use it for the community’s advantage.

“Downtown is the golden goose, but you have to feed it every once in a while,” he said. “You can’t just make paté.”

Centro San Antonio President and CEO Pat DiGiovanni (left) announces a gift of a fiesta metal presented by Frost Bank President Don Frost (second from left) to Urban3 Principal Joe Minicozzi, AICP as Rivard Report Director Robert Rivard smiles.

Bonnie Arbittier / Rivard Report

Centro San Antonio President and CEO Pat DiGiovanni (left) announces a gift of a fiesta medal presented by Frost Bank President Don Frost (second from left) to Urban3 Principal Joe Minicozzi, AICP (right) as Rivard Report Director Robert Rivard smiles.

12 thoughts on “A City’s Future Lies in the Power of Its Downtown and Regional Centers

  1. When our society is measured by tax revenue per acre and/or jobs per acre, we are clearly measuring the wrong values.

    In San Antonio, I would point to military bases, churches, and government buildings. Oh yes!

    Perhaps the wrong issues and ideas are being addressed. Who wants San Antonio to be Chicago or Manhattan?

    • Measuring revenue per acre or jobs per acre is a key way of measuring efficiency, the same way Joe pointed out we measure a car’s efficiency by the number of miles it gets per gallon, not per tank. Again, he wasn’t arguing that every structure has to have maximum value or that everything should be densely packed together to be successful. In fact, he specifically pointed out the need for great public spaces and parks, which do not generate tax revenues themselves. But by doing the math, as he says, we can figure out pretty quickly whether our pattern of development can actually cover its long-term costs. Right now, it absolutely does not. And if it is truly San Antonio’s desire to be a sprawling city, which I hope isn’t the case, then we can’t expect it to be subsidized forever as it is today.

  2. Bob, I wasn’t suggesting Manhattan or Chicago. I was merely suggesting that you measure your car by the MPG instead of Mile per Tank. You needn’t drive a 500 mpg car, but it is completely unwise (and wasteful) to drive a 2 mpg guzzler, when you can get a 35 mpg for the same price. Additionally, you’d save tremendous sums in the cost of the gas over the lifetime of the car. I showed examples of Charleston and Asheville, which are both very far from being Chicago or NYC. If you’d like the slide-deck, the folks at Centro have a copy of it. Just be smart about your decisions. Your city is worth close to $100B in value. Just do your math to avoid guessing about your productivity.

    • Thank you for your kind reply, Joe, it is quite appreciated.

      SA doesn’t compare to Charleston nor Asheville in almost any way and those don’t make good examples/comparisons other than in some anecdotal ways.

      The reporting made it appear that your presentation said the building on 1/5 acre pays more taxes than a Wally World, while I think you were using per acre numbers. Does it actually pay less in dollars?

      Using farmers makes for an interesting but disingenuous analysis~at least in theory, farmers produce something. Government does not.

      Mpg doesn’t work either~if a vehicle gets 35 or 50 or 100 mpg rating but can only travel 80 miles on a tank or a charge, it is a blatant failure.

      Taxes are a POOR measure of success.

      I will ask for and view a copy of your presentation. Thank you very much.

      Respectfully,

      Bob

  3. Bob:

    I take offense to calling our work “disingenuous”. That’s a little outside the lines, especially coming from someone who clearly didn’t attend the presentation. But since you put it out there, let me answer some of your questions.

    For one, to call taxes a “POOR” measure of success is like calling the share price of Apple or the revenue generated at a concert, or your commission for project; a “POOR” measure of success. Taxes make up the majority of the city’s revenue when it comes to the general fund. Pull your city’s budget and take a look. Also in the presentation, I went over ‘jobs’, retail sales, booze sales, etc. Pound for pound, property taxes are the biggest indicator, as associated with land-use decisions. So what other ‘measure’ would you choose? I’m open to recommendations.

    Do go ahead and go through the presentation. I am more than happy to comment on serious questions on our work, but please reconsider the urge to comment BEFORE you see the information. And as a professional in the field, I offer that you reconsider calling our work “disingenuous” or “anecdotal”.

    Sincerely,
    Joe

    • Joe,

      Mea culpa.

      I have requested a copy of the presentation.

      I DO think the downtown area is very, very important to the image and culture of a city.

      Respectfully,

      Bob

    • Joe, where does building height come in to play with density?

      At what point is a higher building more attractive, density and tax wise, than re-purposing a shorter building, or, shorter new construction?

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