Reviving The Roost: The Return Of The Empty Nesters To The City

It is a pleasure to be here today. I want to congratulate The Fannie Mae Foundation, The Enterprise Foundation, and the Brookings Urban Center for hosting this forum. This annual event is an appropriate tribute to the man whose legacy we celebrate today, James Rouse.

Our topic of discussion is the Future of the American Downtown. But we can abbreviate this title. We are really speaking about the Future of America.

Statistics suggest that our nation’s cities are shrinking in population and that our suburbs are the new growth centers for political and social and economic influence.

As Americans become more transient and disconnected, as three-generation households and one-job careers become increasingly rare, our cities become even more important to our sense of community and identity.

As the older suburbs face the same challenges as their urban neighbors ? on issues such as public safety, housing stock, and outmigration of wealth ? it is clear that the agenda of the cities has become even more critical.

As urban sprawl imposes an increasing burden on our citizens, whether they live in century-old neighborhoods or brand new exurban subdivisions, we realize the value of the city’s compact development and efficient use of existing infrastructure.

As study after study establishes the interdependence between the vitality of the central city and the economic success of entire regions, it is clear that the agenda of the cities must be an essential part of our nation’s agenda.

Essential for sustainable growth;

Essential for our economic development;

Essential for our sense of place and belonging; and

Essential for the values that define and enrich us.

And at the heart of each of our cities is a downtown. It is the hub from which a city’s success or failure will be determined.

And so the following question is one of national importance: How do we revitalize our nation’s blighted downtown areas, and how do we sustain the successes that we have achieved?

Let me talk, first, about the success. As Bruce Katz has emphasized on many occasions, the cities are the beneficiary of two very promising national trends: a strong market, and demographics.

The population is getting older. People are having kids later. This offers our cities an enormous opportunity. It’s an opportunity to bring the empty nesters back to the central city.

But it’s an opportunity for success. It’s not a guarantee.

Fulfilling that opportunity requires a focused civic and government leadership.

In Denver, our city-wide strategy encompasses 4 priorities, what I refer to as the cornerstones of a great American city.

First, we restored a sense of public safety. We know that people will not return to the city, despite all of its appeal, if they don’t feel safe. And we know that many people have exaggerated impressions of urban crime. In Denver, we’ve reduced our crime rate by 25% over the past five years alone.

Second, we reclaimed our open space. Since 1991, we have increased the parks and open space program by 50%, from 4,000 acres within the City’s boundaries to 6,000.

Third, we put our fiscal house in order. We transformed a $33 million cash deficit at Denver General Hospital into a positive annual surplus, we obtained an enhanced evaluation of the city’s overall credit rating, and, in a steady fashion, we tripled the general fund balance, from $29 million to over $99 million. We have made the delivery of services to our residents and businesses more cost-efficient and customer friendly, and we have consolidated city agencies and functions to cut waste and improve ease of access for our citizens.

And fourth, we have made kids and schools a priority. The success of any great American city depends, in large measure, on the quality of the education its children receive. In Denver, the school district is independent of city government. However, our futures are clearly interconnected. Over the last five years, we have provided over $10 million to fund police officers in schools, early childhood education programs, summer youth employment, after school career clubs, and a strict and nationally recognized curfew program. We also took over and re-energized a struggling Head Start Program.

Beyond these four cornerstones, we developed a very specific strategy for our distressed downtown area.

One of the first things I did when I became Mayor in 1991 was convene a Downtown Summit. And I made it clear that our top priority would be housing. Up to that point, the emphasis downtown had not been on housing, it had been on retail. But, as many of you know, if you establish a residential population, the retail will follow. Out of the Summit, came several initiatives:

• We created a downtown housing office to proactively market downtown’s inventory of vacant buildings to housing developers and to provide developers and investors with accurate information on properties and market conditions.
• We made sweeping changes in downtown zoning to encourage housing and, transit oriented development and to protect historic buildings. The land use regulations in place at the time actually inhibited housing. We used higher density as an incentive for housing projects, and created design standards and review. As a result of these changes, we were able to save a critical mass of our older buildings downtown. They may not have been functional for office space, but they were functional for housing.
• We also eliminated parking as a “use by right”, which further strengthened our effort to preserve historic buildings and stimulate residential development. We know that once a downtown is more than 1/3rd parking lots, it loses its character and sense of place. We provided housing financing on unconventional projects. As these projects achieved success, they were supported by conventional lenders.
• We directed all of our private activity bond allocations toward downtown housing projects for at least 3 years.
• We created a 1 million-dollar revolving loan fund for housing, thanks to the outstanding work of Ann Wheelock when she was my Community Development Director.

In 1995, I convened another Summit to take our success one step further. Our lower downtown was booming, and our midtown was under renovation. The time had come to expand our focus to the inner ring neighborhoods right around downtown. These areas were not benefiting from the economic resurgence. But they offered lower property and building costs, and a strong downtown as an anchor.

We also continued several other important elements of Denver’s long-term strategy, which includes:

Placing our sports arenas downtown;
Emphasizing and supporting the Denver Performing Arts Complex
Providing free shuttle bus service on our downtown mall, providing easy access for employees, residents and visitors; and
Maintaining downtown as the hub of the regional transportation system, including the first phase of the light rail system

In Denver, our focus is on development of a transit system not only to enhance the mobility of our residents but also to shape land use and support economic development. To that end, we have initiated a station development program which has brought together city agencies, the Regional Transportation District, the Colorado Department of Transportation, and the private sector. The goals are to revitalize those areas of the central city served by rail and to enhance ridership of the system. In this way, we can address transportation, housing, jobs, and containment of urban sprawl.

What are the results of these efforts?

Since 1991, 51 vacant buildings have been redeveloped in downtown Denver, including more than 2,000 residential units, 1200 hotel rooms, and over 400,000 square feet of commercial space.

Warehouses, office buildings, and banks have been transformed into residential developments. Light industrial buildings have been converted into mixed-use developments.

Department stores have been successfully re-used, as hotels, retail space, offices, and lofts. Too often, the empty spaces left by department stores symbolize the flight of prosperity from the cities to the newer suburbs. We were determined to avoid that fate.

In addition, 2,600 residential units in downtown Denver are currently under construction or proposed for construction. Included among these are two very large multi-family rental developments. West Commons Park is being developed in the Platte Valley across the river from a new urban park. The other large project consists of 500 units on the site of a former hospital.

And in our upper downtown, we have just completed a two-block, 350,000 square foot entertainment and shopping project. Essential to this success has been a constructive partnership between the public and private sector. Just yesterday, the International Downtown Association awarded Denver its Outstanding Achievement Award for 1998, and said that “the collaboration of the City and County of Denver, the Denver Urban Renewal Authority, and the Downtown Denver Partnership provide a model for cities all over the world.”

What are the lessons learned from the Denver experience and from the revival of other downtown areas?

First, we know that the revival of our nation’s downtown areas is a serious and very positive trend for our cities. And we need to do all that we can do to leverage this to the maximum extent possible.

Second, the downtown experience reflects how we should think about urban policy generally. It offers a strategy for building a competitive urban agenda that takes full advantage of the real market and demographic trends that are shaping the country.

As CEOs of municipal corporations, Mayors have to try to understand our cities’ functions, and to exploit our assets.

It means that we should not try to involve ourselves in sectors of the economy that started to diminish 50 years ago. And it means that we should think about key sectors of the economy, such as retail, publishing, financial services, and other higher-end services in the new, knowledge-based economy. These are services that belong in our cities because of our infrastructure and our compactness. These are the economic advantages of density.

Related to this is the message of Michael Porter at Harvard and of William Goodyear, Chairman of the Bank of America of Illinois. We have untapped retail markets in our inner cities. And, for too long, we have understated or ignored their enormous potential for profit.

There are other assets as well. Every person living downtown is a person who is not stuck in a 45-minute commute.

In short: The 24-hour downtown represents a more sustainable form of development, both fiscally and environmentally.

What lessons do we have to offer the federal government?

Cities remain a power in the new economy. They are places to invest in, and they are not places to disinvest.

Many of our cities are in good shape. Crime is down. Unemployment down. We have balanced budgets. We are run by pragmatic administrators. We are not overly political and we are not ideological. There is a new urban environment and it warrants a new and enhanced partnership with the federal government.

That means investments that are sound. And that means “do no harm”.

In many ways, the federal government has been enormously helpful and inventive. Examples include the Empowerment Zone and Hope VI grants. The cleaning up of Brownfield sites. ISTEA, and now TEA-21, provide needed flexibility in developing transportation systems that best serve local needs.

And we are fortunate to have an Administration that has reinvigorated the dialogue about our nation’s urban agenda. Vice President Gore’s remarks at the Brookings Institution earlier this month reflected a deep and impressive appreciation for the importance of the cities in the formulation of federal policies.

I commend him for his leadership.

Among the new initiatives the Vice President announced was FANNIE MAE’s program to promote location-efficient mortgages. This is a good example of how the market place can recognize and reward the cost savings enjoyed by families that live in centrally located areas, near existing transportation and other infrastructure.

The Vice President also defined an important element of a new and more vigorous urban agenda when he challenged us to reexamine federal policies that have the unintended but very real consequence of subsidizing urban sprawl, the kind of growth that is unsustainable and harmful to our cities.

I embrace this challenge.

The first step, which we are doing today, is to recognize and underscore the central role of the cities and inner ring suburbs to the nation’s prosperity.

Once we do that once we appreciate that cities are essential to our country’s well being then we can go forth with an agenda that unites our great urban centers in a new and expanded alliance.

An alliance that includes older suburbs, financial institutions, major corporations, and faith-based organizations.

With this expanded alliance, we can forge a new partnership between the cities and the federal government. We can look closely and seriously at the way in which federal tax policies and transportation dollars impede and even reverse the hard-fought progress we have achieved in our nation’s cities. And we can establish the public and private sector coalitions necessary to implement a real urban agenda that encompasses the full scope and potential of the great American City.

A place where commerce, smart growth, opportunity, and culture intersect with tradition and faith and family and hope.

A place that is textured and reassuring, that is rich with a sense of continuity and belonging.

A place where I know and respect my neighbors and where I can walk to restaurants and shops, sometimes to spend money and sometimes just to exchange stories with old friends.

A place that millions of Americans call home.

And a place that millions more would like to call home.

Thank you.