The End of Greenfield Sprawl One Parking Lot at a Time

The National Trust for Historic Preservation recently picked up on a story in the Atlanta Journal-Constitution that featured the orange giant, Home Depot, and their effort to make better use of their property. Home Depot, as many people know, is one of the nation's largest home improvement warehouse with stores approximately 130,000 square feet on lots that average 12-14 acres, most of which are underutilized parking lots. It turns out that Home Depot officials are looking at these grayfields - cleared, graded, and paved areas - as opportunities for new revenue. As it was reported,

“A number of stores have barren asphalt, and it’s not in anyone’s best interest to leave it sitting there,” said Mike LaFerle, Home Depot’s vice president of real estate.

So the Atlanta-based chain has a new strategy: Sell chunks of its parking lots to fast food chains, pet stores or auto parts outlets.

Home Depot has identified marketable portions of lots at hundreds of stores — including about 25 of Georgia’s 90 stores, according to a list the company handed out to potential buyers and brokers at a recent meeting of the International Council of Shopping Centers in Atlanta.

With the diminishing desire to return to the over-leveraged, land-consumptive period (pre-2008) that was typified by massive retail expansion of national brands both big and small, Home Depot's real estate office is now coming to a new level of awareness. All of these parking lots, often built to excessive local zoning standards, even by shopping center industry standards are now primed to receive the next wave of growth. To do this will take two key ingredients.

First, local governments need to radically reduce their parking requirements. Far too often I open a zoning ordinance that requires parking spaces at a rate of 5 cars or more for every 1000 square feet of retail space. And for shopping centers, these ordinances often require that every store in a center be able to comply independently of each other with no permission for shared parking arrangements. The International Council of Shopping Centers (ICSC) has regularly surveyed their members and found that the actual need for many of these so-called "power centers" is actually between 4 and 4.5 parking spaces per 1000 square feet of retail space - nearly 20% less than many local government requirements.

In the face of this evidence, why do many local governments still cling to excessive standards? The answer is likely just simple apathy. Many zoning ordinances are based on national model codes or whatever the next town over just adopted. And unfortunately, too many of these standards are never researched properly. So not only are many communities requiring the unnecessary installation of parking spaces, they are complicit with the environmental degradation that these parking spaces bring. Increased heat island effect, increased storm water runoff and not to mention the deforestation required to mass grade accessible parking spaces.

But even if local governments all wake up tomorrow and lower these artificially high standards, or perhaps even did away with all parking standards altogether and let the market decide what they need, we would still have another hurdle. These parking areas are still private property and are often encumbered with legal easements that preclude their use for anything other than unused black asphalt. As someone who has been advocating for redevelopment of these grayfields for more than a decade, it is heartening to see a retailer waking up and seeing these areas are potential redevelopment assets.

In fact, I suspect that if we were to add up all of the currently underutilized properties in each of our communities that we may have little need to develop commercial property in the greenfields. When we add up all of the excess parking lots with the now-closed malls, big box stores, and auto dealerships, the amount of potentially available property is staggering. (Hint to any graduate students in need of a thesis project - we need a good GIS inventory!)

Now some will argue that the continued parcelization of these sites for additional auto-oriented stores still is a step a backward. Perhaps. But isn't it a step forward for these large landowners to consider that maybe, just maybe, that there is a better use for their property. Even if it is simply a better economic return, that will help both the property owner as well as the local government. And once they get beyond the hurdle of making that property available, it is incumbent upon the local government and our DOTs to do a better job at creating more walkable, urban corridors. Because unless the characteristics of the fronting thoroughfare are radically changed, don't expect the development on the private side to be much different.

Without a doubt, property owners are looking these days on how to better maximize returns on their investments. It's too early to tell whether this will represent a sea change or simply an isolated experiment but every owner would be neglilgent if they didn't consider it. The results could benefit the financial bottom line and the environmental bottom line as well.

Shrinking Cities: What can we learn from Detroit?

The post below is written by Peter Zeiler who serves as the Transit Station Area Development Coordinator in the Neighborhood & Business Services for the City of Charlotte. He can be reached at pzeiler@CharlotteNC.gov.

Back up in Detroit I spent a lot of time and energy focused around the Shrinking Cities project and discussing the issue with local and global policy makers.

One of the key points missed in planning for a shrinking city is property ownership & control and the costs to actually a policy of shrinking. Disinvestment is not linear or block by block. A city managing decline must rationalize the chaotic decay in order to effect any meaningful change other than the natural entropy – which as we have seen is not a viable model.

The costs to return large tracts of patchwork land in neighborhoods back to natural or agricultural (or even industrial) uses is staggering.

As an example, a project I worked on in Detroit over a seven year period was to basically apply the coup de grace to a dead neighborhood. Out of 1,600 homes in 1940 in the target neighborhood, only about 400 were still standing. 100 of those were vacant, the other 300 were about half owner occupied, 85% were sub-code and the households were largely impoverished. Nearly 700 of the vacant parcels were already owned by the City through tax foreclosure.

The neighborhood was surrounded by industrial uses in a classic pre-zoning land use pattern. The goal was to remove the vestiges of the trapped neighborhood, move the residents to other neighborhoods that had a chance to survive to help stabilize them and then backfill the site. The site would become an industrial / office park with excellent freeway access and tax free status for 15 years through a program known as Renaissance Zones (businesses would be exempt from all non-bonded property tax, utility taxes and all local and state business taxes- and we would sell them the newly cleared land with significant writedowns).

Shorty story – it failed. Miserably.

The cost to relocate households averaged about $150,000 - $200,000 per household despite the fact that their homes were valued generally at less than $30,000. Following state and federal guidelines for eminent domain added significant (and wholly justifiable and ethically correct) expenditures. Then came the task of tracking down and condemning vacant 40’ x 90’ residential lots – at an average expense of $35,000 per parcel.

Once the majority of the site was acquired the physical work needed to be engaged. Because we were demolishing a significant number of structures, the entire site needed to undergo a full EPA analysis – meaning house by house investigation for contaminants which would be part of an overall environmental program. No just bulldozing the home, you had to check each and every one and – for example - mitigate ACMs like linoleum mastics by hand. $3,000 per unit demos skyrocketed to upwards of $60,000 per in some cases. There were significant costs to relocate water, sewer, gas and electrical infrastructure that ran through the site and connected to other neighborhoods. Infrastructure is a network, not a system of nodes that can be switched off arbitrarily and thus creates reengineering and rerouting challenges. Then the vacant land and abandoned streets had to be remediated (lead, arsenic etc in soils, PCB plumes from neighboring uses) and grubbed.

In short nearly $120 million was used to create a 50 acre industrial park - without roads. Recall the Empowerment Zone program of the Clinton era that was to spark urban redevelopment was criticized as squandering tax payer dollars by granting $100 million to each of six cities. The entirety of the Detroit Title IX money could have been consumed and still not been enough for the 50 acres of the site.

The result of all this is a 200,000 square foot JIT (just in time) warehouse facility that employs 60. Even with generous land write-downs and nearly full tax exemption for 15 years, the site did not attract users. There are simply no jobs left in southeast Detroit and no reason to move jobs there. Now if that is the cost for 50 acres, the math for even 10% of the 138 square miles of Detroit would be staggering.

This isn’t to say that the goal is not worthy or that it can’t be done. Flint, MI and Youngstown, OH have moved towards managing decay but they are timid steps still. The concept is viable and no longer groundbreaking in a policy context. The next step that needs to be taken to advance the policy of managed decline is a true accounting of its costs and a national program to address it.

I have a hunch that when people see the cost of managed decline and its non-existent ROI, the costs of regeneration will seem like chicken feed in comparison. If we are gun-shy to spend $100 million in ten years in Detroit for regeneration, how gun-shy will we be for the billions to create forests?

The time has come to move beyond the idea. If urbanists and environmentalists want to move the managed decline argument forward, it’s time to start hanging a price tag on it. It may be that the most compelling argument for sprawl containment and smart growth is the exponentially higher cost of returning developed land back to nature for which we are now beginning to have an understanding of the full and quantifiable costs.

Food for thought.