At a recent Urban Land Institute (ULI) meeting in Louisville’s Portland neighborhood one of the speakers made a point about infrastructure—namely that, as the owners/ratepayers of our local water and sewer utilities, it was in our economic interest to develop in areas where infrastructure already exists. This goes along with the thought that the greenest building is one that is already built.
As a preliminary matter, there are many factors that go into locating a business or developing property, many of which won’t be discussed here. Of course, there are uses that are totally inappropriate for the urban core of the city—there will never be a golf course in SoBro. By the same token, the likelihood of a 35 story office tower in Middletown is near zero. But for those uses for which location matters but isn’t critical, there are several advantages to developing or redeveloping property in the urban core and surrounding neighborhoods.
The Pipes Are Already in the Ground
First, to the ULI speaker’s point, the roads, sewers, water lines, and other utilities are already there in the built-up parts of the city. Compared to a suburban site where water, sewers, and other utilities will need to be extended, if they are available at all, the inner neighborhoods have a clear advantage. A look at the MSD service map shows a significant amount of service available in the near urban parts of the city. The same goes for most other utilities.
In addition to utilities, the road system in the inner neighborhoods is set. Often, developers are required to widen or improve roadways in the suburban areas of the community to offset the increased car traffic a successful development will bring. This can be a huge expense that, in some cases, is only tangentially tied to the proposed development. If you develop near the urban core of the city, road widening is usually off the table.
It’s Easier to Get Around
Second, Louisville’s inner-ring neighborhoods are generally friendlier to other forms of transportation, too. Bike and mass transit infrastructure already exist in the inner neighborhoods and downtown. And in the last few years, miles of bike lanes and sharrows have been added to streets predominantly in the inner neighborhoods and downtown. While cyclists and transit riders aren’t the majority, without bike and transit facilities, certain parts of the community are simply inaccessible to those that cycle or ride as their primary means of transportation.
A review of the TARC service map also shows more service available in the inner neighborhoods. Having a variety of transportation choices means that you can attract a broader variety of workers and customers. And many cities have seen young and creative professionals seek out places to live that are services by bike and transit infrastructure.
There’s Less Red Tape
Third, the regulatory environment for redevelopment has been improved dramatically in recent years. Through changes to state statutes and the Land Development Code, redeveloping property has been incentivized significantly. For instance, brownfields, sites with real or perceived contamination, have long been avoided due to liability concerns and the expense of cleaning up the prior owner’s mess. But Kentucky created the Brownfield Redevelopment Program so that owners who conduct a proper investigation of a site before purchase can limit their liability significantly. For qualifying projects, a purchaser can obtain a determination that cleaning up existing contamination is not their responsibility. This program has already made many redevelopment projects easier to finance and execute.
The Land Development Code also provides incentives for redevelopment through the Green Development Design Criteria. Developing on TARC routes with frequent service and developing on brownfields are two ways to obtain the incentives, in most cases a 20 percent reduction in required parking. This development intensity bonus allows more building on a given property, meaning a developer is able to realize more value from a given piece of land for building green. These incentives can also be paired with incentives designed to protect historic structures to further reduce off street parking requirements.
While not every project is right for the inner neighborhoods or downtown, the incentives for development and redevelopment in these areas are too many to be ignored.