By Marty Plunkett, Melissa McIntyre and Dave Heninger
In May, CBRE Research released a report titled “Placemaking: Value and the Public Realm” which highlights the value created by transforming buildings into urban spaces that offer well-being, pleasure and inspiration. The success of “placemaking” can be measured by improved lives, greater happiness and, when done successfully, an increase in property values.
The act of placemaking is prevalent in urban and suburban markets throughout the world; for example, consider the recently developed High Line in New York City. Most cities devote a considerable amount of valuable land to the public realm and many of the world’s most iconic locations are public spaces. But what is unique about this report is its examination of the relationship between the public realm and property values. It examines the impact good public realm interventions have on the value of real estate.
Urban planners have long recognized the benefits of building and maintaining good public realm, but this doesn’t mean that the issue has always been given the priority it deserves. For instance, during the period when many western cities were in decline, from roughly the late 1960s to the early 1980s, the role of public spaces was often neglected. Any development, however poor, was pursued to generate some economic activity. Understandably, this approach to urban development is still pursued by many emerging-market cities where the need to relieve poverty means that economic growth is given top priority.
Since the mid-1990s, when western cities began a widespread process of revival and repopulation, the quality of public space has once again come into focus. In the long period of deleveraging and low interest rates since 2008, property investment yields have fallen to a point where, in some markets, value can no longer be bought; it must be created. This has fed the recent resurgence of interest in placemaking, the relationship between design of public space and the creation of value in the post-industrial, post-modern urban area. Public space is clearly of value for the overall vitality and “liveability” of an urban area, but it is also critical to the commercial success of public authorities and private-sector developers and, ultimately, to the economic success of the urban area itself.
Jan Gehl is a Danish architect and urban design consultant who developed an analysis called the Gehl methodology. This methodology identifies 12 specific criteria to assess the human experience of place. Much of the theoretical basis for these criteria lies in Maslow’s hierarchy of human needs and includes categories such as 1. Protection (feeling safe); 2. Comfort (feeling connected); 3. Activity, functions and walkability; and 4. Enjoyment (identity and senses).
Building off this methodology, CBRE took things one step further by examining data which assesses the effect of public realm interventions on property values, encompassing a range of indicators such as rents, land prices and capital values. Blending these two elements together, this report tests the hypothesis that in addition to improving the quality of human experience in urban areas, public realm interventions also create financial value.
Based on an analysis of 11 prominent case studies throughout the globe, the report concludes that real estate value was created or enhanced by placemaking in the public realm and this value can be tied to the four themes: image, destination, versatility and character.
Placemaking is alive and well along the Wasatch Front, and examples of adherence to these four themes can be seen throughout the state of Utah.
Altering the Image of an Area
There are several examples of image-altering initiatives in Salt Lake City, but two of the most prominent are the Gateway and The Granary District.
The Gateway began as an image-altering development and it initially succeeded. When the site opened at the end of 2001, it was seen as a vibrant, safe destination for shopping, entertainment and living. Since that time many changes have taken place in the surrounding neighborhood that have been detrimental to the site, but today, 16 years later, the mall’s new owners are once again breathing new life into the area by repurposing and improving the project to alter the image of the site.
Another example of image that can be seen downtown is the emergence of the Granary District. The Granary District is bounded by 600 South on the north, West Temple on the east, and I-15 on the west and south. Historically, the area was used as an industrial and railroad corridor, but with support from the Redevelopment Agency of Salt Lake City, the area is shifting towards a vibrant, mixed-use destination for dining, shopping and living. Behind many of the old warehouse doors you will find local artisans, restauranteurs and entrepreneurs creating successful enterprises and revitalizing the neighborhood.
Creating a New Destination for Visitors, Residents and Workers
Perhaps the greatest example of destination in the recent past is the development of City Creek Center. Completed in 2012, the center opened at a time when many businesses were still struggling to overcome the Great Recession, but the impact the development has had on the city is undeniable. With its mix of housing, dining and shopping options, City Creek Center has turned into one of northern Utah’s premier destinations, drawing crowds from the surrounding area and states. It has also had a sizable, positive economic impact on the city.
Adding an Element of Versatility
Versatility has been top-of-mind for many developments in the state and can be seen in such destinations as Trolley Square, downtown Sugar House and Gallivan Plaza. But one of the best examples of versatility can be seen in the development of the plaza at the Salt Lake City Public Library and the Leonardo museum. The new city library opened in February 2003 and since opening, has hosted a number of annual events, such as the Salt Lake Arts Festival, as well as smaller events, like rooftop concerts and yoga. An amphitheater and outdoor shops were incorporated into the design of the plaza and there are several indoor event spaces as well providing versatility that can be utilized year-round.
As the UTA FrontRunner and TRAX lines were being constructed, several transit-oriented developments, or TODs, were incorporated to take advantage of the accessibility to public transportation. One such project that has changed the face of a newly developed area is Station Park in Farmington, a mixed-use development encompassing dining, shopping, entertainment, work and living spaces. In addition to its character, Station Park incorporates several of the themes already discussed, like destination and versatility. It includes a splash pad and water fountain, a plaza that holds outdoor concerts and events, a movie theatre and many shopping and dining destinations, providing a family-friendly atmosphere.
Based on reviews of 11 placemaking initiatives, the report concludes that good public realm interventions improve both human well-being and real estate values and support long-term value resilience. The study showed that creativity and investment can improve the public realm in such a way that the human experience of a place is materially enhanced and that public realm initiatives create greater desire to visit and dwell in an area, as well as greater demand to locate there permanently. This has been true of the examples highlighted along the Wasatch Front, and as more planners incorporate placemaking into their developments, these sites will endure as places of value for both users and investors.
Marty Plunkett, Melissa McIntyre and Dave Heninger are commercial office specialists in the Salt Lake City office of CBRE.