In the current economic climate it’s tough to make a case for anything fast and furious but I still think it’s worth talking about both ends of the spectrum to understand their nuances. I’ll admit that slow & steady and fast & furious are probably not found in the commercial real estate dictionary but I’ve taken the liberty of adapting them to talk about Kent redevelopment. Basically what we’re talking about is incremental redevelopment (aka slow and steady) versus major block reconstruction (aka fast and furious). Folks like to argue the merits of one over the other around the water coolers but just like drivers and their cars, I think there’s room for both and we’ve actually got proof of that in downtown Kent right now.
Slow and Steady Example Fast and Furious Example
Unless you’re able to be your own lender the credit markets have slowed traffic in both lanes but the fast and furious stuff have definitely seen the biggest impact. All over our region most of the big projects (those similar to First and Main in Hudson) have come to a screeching halt. That’s probably understandable since projects of these size usually need a healthy dose of equity and credit and even the largest developers these days have had a hard time generating liquidity for cash or financing for borrowing so good projects have shifted into neutral waiting for the market to shake itself up enough to restore favorable risk ratios.
But anyone that’s ever run low on gas knows that you can keep moving forward even in neutral. A little momentum can go a long way and sometimes you can coast downhill all the way to the next service station. That’s a good metaphor for the hotel/conference center project that’s underway right now in downtown Kent.
We’re taking advantage of the market pause to line ourselves up with our major project partners and lay out the path forward that will enable us to be fully fueled and ready to put the pedal to the metal as soon as it makes sense to do so. That means negotiating terms, affirming commitments and laying out a development program that will satisfy the community expectations for the project — which means coming up with the right mix of retail, restaurants, hotel, university and business functions in the project. There’s not much sense in trying to squeeze a round peg through a square hole right now so we’ll keep trying to shape our peg until we get the right fit.
In the meantime incremental redevelopment continues to rule the day and that’s certainly proven true in downtown Kent thanks to Ron Burbick’s Phoenix project. Phase One will have it’s official grand opening at the end of this month (December 30th) and Phases Two and Three are targeted for completion by next summer. Mr. Burbick happens to have the good fortune to be able to be his own banker so he’s a bit more immune to the whims of the market which is why he’s actually one of the few projects that is operating under the premise of damn the torpedo’s and full speed ahead.
But while the Phoenix Project stands out it is not alone. We’ve seen a series of small projects roll out in Kent over the last 12 months. Smaller, incremental investments makes a lot of sense in current market conditions and we’ve seen plenty of them, like Ray’s Place, Water Street Tavern, Empire, the Bakerai, to name of few.
I ran across an interesting article that offered a slightly different angle on the whole incremental versus one fell swoop dichotomy that actually started me thinking about what to write in this blog post. The focus of the article was more about creating a destination out of your downtown by leveraging the cultural assets into clusters that eventually push the downtown to a regeneration tipping point, attracting new business investment and residents on its own.
The article differentiates between what they call authentic destinations that have grown naturally (aka incrementally) over time and corporate developments that attempt to become destinations in one fell swoop. Both attract tourists and business invesment, they just go about it differently. Here are a few of the differences in approach from a placemaking point of view:
Time: Authentic districts are built slowly over time, decades even.Corporate districts are built completely within a couple of years.
Developers: Authentic districts involve multiple developers and property owners. Corporate districts involve just a few, and often only one.
Building age: Authentic districts have a mix of old and new buildings. Corporate districts are predominantly new buildings.
Building proportion: Authentic district buildings are often taller than they are wide, and not more than 3 to 4 stories. Corporate districts are almost always wider than they are tall.
Building size: Authentic district buildings square footages measure out to four digits (ie 5000 s.f.) or five digits (ie 50,000 s.f). Corporate buildings are usually no less than six digits in square feet (ie 500,000 s.f.), even seven (ie a million s.f.), typically encompassing entire blocks.
Retail: Authentic district restaurants and shops are primarily local independents. Corporate district businesses are mostly chains.
Retail scale: Authentic districts almost never have big box stores. Corporate districts often have big box stores.
Entrepreneurs: Authentic districts often host entrepreneur-oriented workplaces. Corporate districts favor Class A corporate office space.
In reading through the list I hope you’ll find it a little easier to visualize what it is we’re trying to create in downtown Kent. We’ve said that we want to mix the best of the old with the best of the new and to me that involves a little bit of each type of redevelopment. It might be easier to just stick with one type at the expense of the other but we’ve said what makes Kent so interesting is that there’s room for everyone here, and I’d argue that includes all types of redevelopment too.