The inclusive economic impacts of downtown public space investments

Editor’s note: This brief is part of a three-part series which examines the economic, social, and civic impacts of public space investments in Albuquerque, N.M., Buffalo, N.Y., and Flint, Mich.

Throughout the height of the COVID-19 pandemic, public spaces provided a refuge for small businesses to safely operate and for people to gather—prompting many cities to rethink the relationship between public space and economic recovery. Now, as public health restrictions ease and a new “normal” emerges, critical questions are arising. Among them: What role should public spaces play as cities strive to recover more equitably? At a time when so many people and small businesses are suffering, what is the value of public space investments, and importantly, who stands to benefit from this value?

This brief shines light on these questions using on-the-ground data collection from three cities that have long struggled with economic inequities: Albuquerque, N.M., Buffalo, N.Y., and Flint, Mich. As part of a three-part research series on the holistic impact of public space[i] investments, this brief centers the voices of residents, small business owners, and community-based stakeholders to document the economic impacts that numbers alone cannot capture—providing a more holistic picture of the relationship between public space investments and inclusive economic outcomes.

The economic value—as traditionally defined—of public space investments is well documented. Quality public space investments (such as those that provide urban greenery, walkability, and public realm improvements) are correlated with increased land and property values in the surrounding area, including retail, housing, and residential renting values, and are associated with helping areas regain market strength through sale prices and turnover rates of commercial and residential properties.[ii] Some evidence also indicates that public spaces can generate fiscal benefits for local governments through long-term infrastructure cost savings.[iii] It is difficult, however, to isolate whether these economic impacts are the direct result of public space investment or of other factors that affect the economies of surrounding areas.[iv] Nonetheless, these traditional economic indicators are commonly accepted and used to advocate for greater public space investment.[v]

In recent years, however, there has been growing recognition that examining the amount of capital that enters a geography (or the amount of public resources saved) is not sufficient for measuring inclusive economic impact. A substantial body of evidence demonstrates that the higher property values correlated with public space investments may fail to benefit underserved residents and businesses, particularly those renting and leasing.[vi] Additionally, in “hot market” neighborhoods, these higher property values may even cause harm by fueling displacement—disadvantaging longtime residents for whom many park efforts are ostensibly funded to serve.[vii] On the other hand, communities of color and low-income neighborhoods are often left without access to public space or with public spaces that are smaller, poorly maintained, lack programming, and/or have limited play options—leaving them excluded from the benefits that public spaces can bring.[viii]

For these reasons, it is important to look beyond traditional measures of economic value and ask the questions: Who is benefitting from the economic value of public spaces? Are the benefits distributed to people of different races, incomes, ability statuses, and tenures in a community? Are there additional economic benefits public spaces produce that traditional measures are not capturing?

With growing recognition among public officials that public spaces should be part of intentional place-based revitalization strategies (and many cities explicitly building and programing public spaces as part of downtown revitalization efforts), these questions are increasingly urgent.[ix] They can be answered, in part, by using equity-focused metrics: examining trends in employment, poverty, demographics, business, and housing markets, as well as how such benefits are distributed across a population.[x] Several organizations, including Reimagining the Civic Commons and others, are embarking on this important work.

Yet numbers alone cannot tell the whole story—particularly, the story of what residents, small businesses, and other community-based stakeholders perceive the value of public spaces to be, and who benefits most from such value. This brief centers on the third question—Are there additional economic benefits public spaces produce that traditional measures are not capturing?—and relies on community and stakeholder voices to find the answer. As the Knight Foundation pointed out, “building public spaces alone does not create thriving downtowns or city centers,” particularly if not everyone can access, benefit from, or feel attached to the space itself.

Our research revealed three multifaceted findings, providing new insights into the role that downtown public space investments play in shifting perceptions of places, in inspiring new infrastructure and private sector development, and in incubating underserved small businesses within the public spaces themselves.

All three cities invested in their public spaces as part of a larger effort to revitalize their downtown districts. Each city had wrestled with the well-known story of downtown “decline” in the latter half of last century—experiencing depopulation, job shifts to the suburbs, and economic stagnation—but had not yet “come back” as many other big-city downtowns such as Chicago, Seattle, and Dallas.[xi]

In Albuquerque, Flint, and Buffalo, it wasn’t uncommon to hear from stakeholders that downtown was a virtual ghost town after 5:00 p.m.—impacting the small businesses trying to stay open and the growing number of residents living in the area.

Yet at the time of our study, these patterns were beginning to shift and enter what stakeholders called a “momentum” phase. Residents and stakeholders across the cities pointed to a key reason why: Peoples’ perceptions of downtown were changing, in part, because public spaces and a diverse activation of these spaces gave them a reason to go downtown and stay there.

In Flint and Buffalo, this dynamic largely played out through the Farmers’ Market and Canalside, which attracted people from across the region to downtown and gave them a reason to spend their dollars locally.

“Some people haven’t been downtown in 20 to 30 years,” one Flint downtown stakeholder told us. “What the Farmers’ Market did is it brought people from the county to downtown Flint…Without the Farmers’ Market, I don’t think we would have captured the wealth of a lot of that community.”

“The Farmer’s Market was a catalyst project that people needed to see for downtown to be more than just that place where bad things happen and a couple of bars,” another resident who worked at a Flint-based nonprofit told us. “They started seeing it as a destination.” By virtue of seeing the market as a “destination,” these visitors supported the almost 50 small businesses housed there.

In Buffalo, respondents reported the same trend; however, they explained that its impact transcended the dollars spent at Canalside and helped give residents confidence in their city’s economic health more broadly. “I think the biggest impact Canalside has had is it’s demonstrated to us that we can have our downtown back,” one university stakeholder told us, echoing the thoughts of many interviewees. “It gave the city confidence in its resurgence.”

In Albuquerque, public sector officials were clear that peoples’ perceptions of downtown were still a significant barrier to economic activity in the area. As one city official told us, “People’s beliefs and perceptions can be so tricky to change. How do you overcome that? When a place has been ignored for a long time, how do you change people’s view about it to actually get people out there to experience it?” Yet through our focus groups, residents indicated that their views of downtown were slowly changing—largely due to programming at Civic Plaza, including concerts, movie nights, and farmers’ markets.

This provides further indication that a diverse activation of spaces and mixed uses in downtowns can be a critical component of economic resilience. Shifting perceptions of and increasing visitation to downtown was, of course, merely a first step in revitalization—but it arose as a common pattern across all three cities and all 78 interviews as one of the most impactful ways public spaces supported small businesses in the area. This trend, however, also ushered in new dynamics between city and suburban residents—sometimes heightening long-standing social divides, which we discuss in-depth in “Exploring the often fraught relationship between public spaces and social divides.”

More tangibly, our interviews revealed that successful public space investments can help inspire long-overdue public sector infrastructure and private sector development in the downtown area, which in turn can support nearby small businesses. Stakeholders often described the public space as the “catalyst” needed to demonstrate that new private sector investments (outside of solely office space) could be successful in downtowns, or the impetus for the public sector to increase public investment in the area.

In Albuquerque in particular, small business owners and residents explained that they had largely felt like the city abandoned downtown until recently, and pointed to the importance of Civic Plaza in encouraging much-needed public investment downtown. “I would say that the changes in Civic Plaza dramatically increased the city investment in downtown up until this point,” one downtown stakeholder told us. “We felt so neglected with city improvements, infrastructure improvements. So all of a sudden they’re replacing our street trees, they’re putting in the bike lanes, they’re redoing the fountain.”

When we spoke to Albuquerque Mayor Tim Keller, this sentiment bore out. He told us he was intentionally working to triangulate placemaking efforts downtown to spur economic development, of which Civic Plaza and the new Rail Yards Market were an important part.

In Buffalo, stakeholders reported that Canalside helped catalyze new investment that transcended the immediate district and master plan for the waterfront. Many pointed to the nearby Ohio Street Corridor revitalization into a multiuse pathway linking activity centers as an initiative the success of Canalside spurred. “Between Canalside and the river restoration work in tandem, it’s provided that springboard and safety net for these other developments,” one public sector stakeholder told us. “Now you see the private development that’s happening along Ohio Street. It’s kind of a chain reaction, one doesn’t happen in isolation of another.”

In Flint, stakeholders repeatedly spoke to the Farmers’ Market’s critical role in supporting the development of other small businesses within the downtown area by providing the necessary foot traffic and critical mass of people needed to inspire additional success.

“The Farmers’ Market has just been amazing catalyst in for the city and the rest of downtown,” a Flint Farmers’ Market vendor told us. “I don’t think the rest of downtown, of Saginaw Street, that everything would look the same if the market wasn’t here.”

From the perspective of our interviewees, what was so important about these new developments and public realm improvements was that they benefited small, locally owned businesses and downtowns that had experienced economic stagnation for too long. In other, more “hot market” cities, new development can bring gentrification. But in these cities, they were bringing long-overdue resources and amenities to the area.

Stakeholders in all three cities reported that the public space investments supported the development and success of local small businesses, either indirectly (by increasing foot traffic to the surrounding area) or directly within the public space (by providing vendors and small business owners with a physical, low-barrier-to-entry space to sell their goods). But the Flint Farmers’ Market stood out in its ability to incubate underserved small businesses, largely because it embedded small business support into the core of its placemaking vision.

With its relocation to downtown, the Farmers’ Market expanded the number of vendors it could house, worked to provide below-market rent, built new commercial kitchens to allow food-based entrepreneurs to create licensed products, and launched formal entrepreneurship training. The ability to operate a low-cost, low-barrier-to-entry small business within a downtown commercial corridor was described as an unprecedented opportunity for many underserved small business owners. As one public sector official explained, the goal was to help entrepreneurs “start their own business—not out of their garage, but out of downtown’s Main Street.”

The Flint vendors we spoke with echoed this sentiment. “I don’t know where in anywhere else in the country that you can start with having a place like the market and be able to access so many customers,” one vendor told us. “Especially at the low rate…35 bucks a day or something absurd. That’s something very unique.”

To ensure affordability, the market never raised vendors’ rents. Market management partnered with Co.Starters for a training course, offered one-on-one consulting through a Flint Food Works program, and offered free use of commercial kitchens to hopefully grow vendors’ capabilities to open up their own storefronts downtown.

“Flint Food Works and the commercial kitchens there really allowed me to operate my business on a learning curve,” another vendor told us. “I didn’t even know half the equipment existed until I finally moved in here and looked at the kitchen.”

Yet Flint was only able to achieve this kind of inclusive impact for small businesses because they embedded small business development in their placemaking vision from the outset. The other two sites had potential to do so, but witnessed varying level of success. Canalside, for instance, made supporting local small businesses a part of their planning process, adopting a consensus document, “A Public Statement of Principles for High Road Development of Buffalo’s Waterfront,” after community activists advocated for a legally binding Community Benefits Agreement that the Erie Canal Harbor Development Corporation and other city leaders ultimately declined to enter. While Canalside stakeholders fulfilled some of the goals in this nonbinding consensus agreement (such as hosting minority- and women-owned business enterprise job fairs and seeking local vendors for programming), some residents and interviewees remained unaware of these efforts, and no annual tracking on outcomes for these inclusive economic development goals have been reported to show progress.

Civic Plaza also had extensive potential to provide economic opportunity to small businesses, and did so at times through events, movie nights, and markets. But public space managers and the city did not have a coordinated plan or permanent infrastructure to help support Albuquerque’s local businesses through Civic Plaza’s activation. As one public space manager in Albuquerque told us when reflecting on the economic impact of Civic Plaza, “Do you have a vision in place? You could light one little fire over here, but how is it connected to a larger vision? I feel like we did an amazing thing with Civic Plaza and everyone is so proud of it, but if we had had a larger downtown vision in place that it was connected to it could light a fire.”

These findings spoke to the importance of being intentional about inclusive economic impacts from the outset, embedding efforts to support underserved residents and small business within the placemaking vision itself, and regularly re-engaging with residents and small businesses to measure progress and success.

Throughout the COVID-19 pandemic, nearly nonstop conjecture about “the future of cities” emerged, with the gloomiest predictions centering on the fate of downtowns. Rather than harping on the plight of “ghost town downtowns,” now is the time to think more expansively about the future of downtowns: How can they become more dynamic, inclusive, and mixed-use? How can they better support minority-owned businesses? How can they draw greater connections between prosperity downtown and nearby neighborhoods?

Our research reinforces the powerful role that public spaces can play in achieving a more dynamic vision for the future of cities and downtowns, and the importance of embedding explicit inclusive economic development goals within placemaking from the outset. There are plenty of national best practices to choose from to enhance inclusive economic outcomes—from Washington, D.C.’s 11^th Street Bridge Park’s Equitable Development Plan, to the University City District’s Green City Works program in Philadelphia, to Chicago’s Neighborhood Opportunity Bonus that leverages downtown growth to provide new funding sources for neighborhoods lacking private investment. Now is the time for local leaders to seize these models and intentionally use public space investments to promote inclusive economic recovery in downtowns and beyond.

The way we plan, design, and program public spaces has far-reaching impacts for equity—shaping the amenities people have access to, the space available to them to grow a business, and the connections forged between people and places. It is imperative as we look ahead to leverage these impacts to rebuild more equitable downtowns, cities, and regions.

Cover photo: Local vendors sell goods at the Flint Farmer’s Market. Photo courtesy of Flint Farmers’ Market.

The authors thank Joanne Kim for her excellent research assistance on this series. They express their sincere gratitude to the community stakeholders who participated in research interviews and focus groups. They also thank Lola Bird, Lavea Brachman, Karriane Martus, Steve Ranalli, Nate Storring, and Jennifer S. Vey for their review of various drafts of the series. Any errors that remain are solely the responsibility of the authors.

[i] Please see the Introduction for our definition of “public space.”

[ii] Eldridge, M., K Burrowes, and P. Spauste.Investing in Equitable Urban Park Systems. Urban Institute, July 2019: https://www.urban.org/research/publication/investing-equitable-urban-park-systems; Carmona, M. Place value: place quality and its impact on health, social, economic and environmental outcomes. Journal of Urban Design, 24(1), 1–48, 2019: https://doi.org/10.1080/13574809.2018.1472523; Forestry Commission. Benefits of Greenspace, 2015:  https://doi.org/10.13140/RG.2.1.2177.6806.

[iii] Robert Wood Johnson Foundation. The Economic Benefits of Open Space, Recreation Facilities and Walkable Community Design Introduction, 2010: https://activelivingresearch.org/sites/activelivingresearch.org/files/Synthesis_Shoup-Ewing_March2010_0.pdf

[iv] Hoyt, L. and D. Gopal‐Agge, D. The business improvement district model: A balanced review of contemporary debates. Geography Compass, 2007: 1(4), 946-958.

[v] Izmailyan, E. Emphasizing Equity in Economic Impact Analysis. HR&A Advisors: June 2018:  https://www.hraadvisors.com/emphasizing-equity-economic-impact-analysis/

[vi] Gaynair, G., M, Treskon, J. Schilling, and Velasco, G. Civic Assets for More Equitable Cities. Urban Institute, August 2020: https://www.urban.org/research/publication/civic-assets-more-equitable-cities; Eldridge, M., K. Burrowes, and P. Spauste,Investing in Equitable Urban Park Systems. Urban Institute: July 2019. https://www.urban.org/research/publication/investing-equitable-urban-park-systems

[vii] Gaynair, G., M, Treskon, J. Schilling, and Velasco, G. Civic Assets for More Equitable Cities. Urban Institute, August 2020: https://www.urban.org/research/publication/civic-assets-more-equitable-cities; Rigolon, A., and J. Christensen: Without Gentrification: Learning from parks-related anti-displacement strategies nationwide. ULCA Institute of the Environment and Sustainability, 2019: https://www.ioes.ucla.edu/wp-content/uploads/Greening-without-Gentrification-report-2019.pdf; Eldridge, M., K. Burrowes, and P. Spauste,Investing in Equitable Urban Park Systems. Urban Institute: July 2019. https://www.urban.org/research/publication/investing-equitable-urban-park-systems.

[viii] Eldridge, M., K. Burrowes, and P. Spauste,Investing in Equitable Urban Park Systems. Urban Institute: July 2019. https://www.urban.org/research/publication/investing-equitable-urban-park-systems.

[ix] Knight Foundation. Measuring Progress Toward Downtown Revitalization and Engaging Public Spaces: A Review of Existing Research. August 2020: https://knightfoundation.org/reports/measuring-progress-toward-downtown-revitalization-and-engaging-public-spaces-a-review-of-existing-research/.

[x] Ibid.

[xi] Tomer, Adie and Lara Fishbane. Big city downtowns are booming, but can their momentum outlast the coronavirus? Brookings Institution, May 2020: http://www.brookings.edu/research/big-city-downtowns-are-booming-but-can-their-momentum-outlast-the-coronavirus/.