Measuring Design, Development, and Opportunity Cost
We typically look at the big picture of development and tax efficiency but a contentious Publix grocery store proposal in Chattanooga, TN gave us an opportunity to put our ideas into practice. Proposing design alternatives and reviewing their impacts is where the fiscal rubber meets the road. This is how cities can at least understand the ramifications of the decisions they make. How can cities expect to stay solvent if they don't measure impacts or consider alternatives? Maybe it’d just been too long since we broke out Sketchup and started drawing.
There is a difference between the kind of planning you do to decide it’s a good business decision to build a grocery store and actually designing one. The former, a market study, relies on abstract demographic and economic data. While it might be spatial, real world features such as topography are irrelevant and thus it might as well rest in the flat featureless plain of a blank Sketchup template. The problem is that, all too often, this is the extent of the planning that takes place. The physical reality of a building is but a consumer product designed for maximum profit efficiency and site interchangeability. Which is to say an off-the-rack one-size-fits all structure that can fit anywhere if you have enough bulldozers. This is what accounts for the sanitized placelessness of our cities and their lackluster inter-connectivity.
I have nothing to offer in the way of commentary on the Publix itself. I’m not in the business of dictating uses or arguing with market studies. Particularly when there is such a thing as food deserts. As this article puts it: this is a discussion over design rather than use.
The Northshore Neighborhood is a rapidly changing community with special considerations the original proposal overlooked. This roughly five acre site marks the edge of new mixed use urban infill growing out from downtown and existing single family neighborhoods. It’s an important site because it represents a sizable portion of the area’s developable land. Chattanooga is a mountain city and as such its topography often requires site specific adaptations. The development site, for example, sits on a steeply graded slope. The original proposal addresses the grade change by crudely flattening it and installing a huge (graffiti magnet) wall. It likewise severs an existing road creating a superblock and disrupting the existing grid. Where a sensitive transition from urban-scale development to neighborhood scale development is needed the proposed Publix provides an abrupt and jarring wedge. There is also a missed opportunity to handle large truck traffic in a less obtrusive manner.
Alternate Publix Realities
We decided to play “what if” and look at some alternate design scenarios in order to point out some of these flaws and, in particular, highlight the wasted opportunity. This exercise was meant to be a back-of-the-envelope analysis. The design of the buildings, layout of the site, and values aren't meant to be taken as fully accurate but as reasonable placeholders.
To save time and take realistic feasibility into account we took examples from the surrounding Northshore community. We figured that if these buildings were already successfully plugged into the neighborhood they would be reasonable on this site too. Northshore already has examples of an urban format grocery store, townhouses, and mixed-use buildings. We cloned these examples and situated them on the site in several scenarios.
We also looked at other Publix stores in the area and in other communities to get an idea of the value of a typical Publix but also some of their more context sensitive designs. If nothing else it demonstrates that a grocery store need not be a homogenized design.
When we line each of these scenarios up by their yearly property tax production we find that the more development you can put on the site the more tax production you can expect. Even the scenario with the most modest additions (an extra retail building and some townhouses) nearly triples the tax production.
The lesson from this case study really stands out when you look twenty years into the future and take in account the time value of money. This tells us what the total value of all the taxes produced over twenty years would be worth today which helps cities understand the return they can expect for the services and infrastructure they will have to provide. If we took that concept one step further we might ask what investments a city could afford to provide. This is how real estate developers look at their options. When a city thinks and acts this way it’s called tax increment financing.
This case study also provided us with an opportunity to try out ESRI's CityEngine software. Use the layer controls on the right to switch between scenarios. Use the arrows in the bottom left to navigate around the model.
Let’s take a closer look two of these alternatives. Even if Chattanooga were to kick in $2 million to make this deal work they would earn it back plus an additional $2 million over 20 years. This is a somewhat ham-fisted way to think about it but it provides a nice way to quantify resources. How else could that revenue be spent? It could be used to address some of the concerns at the heart of the development dispute. Transit improvements to offset traffic concerns? More money for education? Perhaps it could subsidize affordable housing to mitigate income disparities?
Imagine if discount big box megastores were required to add a functional second floor containing affordable housing. That might be pretty convenient given the generally low wages of their customers and employees.
What Got Built
Dystopian nightmares aside, the point is that the additional development provides the resources to solve whichever issues concern the community. By forgoing this opportunity we announce, by default, that we value the status quo over anything else. This case study, which we presented at the GeoDesign Summit, is from a few years ago. Since then the community has made its choice. Here’s what ended up getting built and here’s what it’s worth. At least big parking lots are easy to redevelop I guess.