Rethinking the Politics of Downtown Development

In the political science literature, downtown redevelopment has long been seen as the project of a region’s economic elites. But in recent years, large corporations, banks, and department stores have in many cases abandoned central business districts, and downtowns are now more likely to be developed as centers of entertainment and culture, or as residential districts. This article posits that changing downtown land uses are accompanied by changes in the downtown influence structure, with nonprofit sector and real estate industry leaders now dominating downtown business organizations. Those interested in both the physical and political changes reshaping the downtowns of large American cities can find themselves engaged in two parallel conversations. In the first, found among urbanists from many fields as well as in the popular press, we learn that much of the new (e.g., post-1980) development in American city centers has been focused on activities we might characterize as “consumption”—professional sports, cultural institutions, themed shopping districts, and housing are now taking over areas once dominated by banks, corporate headquarters, and department stores. Downtowns, we learn, are now developed and marketed as mixed districts in which retail, housing, and entertainment may even come to overshadow traditional central business district (CBD) functions. The second is a conversation mostly among political scientists and political sociologists, who have been interested in the various stakeholders (elected officials and bureaucrats; corporate leaders and peak business associations; neighborhood organizations) who have sought to shape downtown. In this narrative, business elites with a financial and symbolic stake in the economic health of the central business district began mobilizing in many cities during the 1940s and 1950s to protect their investments, which were in many cases thought to be “sunk” and immobile— Richard King Mellon, the Pittsburgh financier who mobilized resources behind the redevelopment of downtown Pittsburgh in the 1940s, explained his commitment to his city as an outgrowth of his business interests: “We have a lot of property here. We can’t very well move out the banks” (Fitzpatrick, 2000). Business leaders worked with entrepreneurial mayors and development officials, leveraging federal urban renewal funds to shore up downtowns. Although in some cities these downtown-focused coalitions were eventually challenged by neighborhood-based groups seeking a more equitable share of public investment dollars, the basic political science Direct Correspondence to: Professor Elizabeth Strom, Department of Geography, NES 107, University of South Florida, Tampa, FL 33620. E-mail: [email protected]. JOURNAL OF URBAN AFFAIRS, Volume 30, Number 1, pages 37–61. Copyright C © 2008 Urban Affairs Association All rights of reproduction in any form reserved. ISSN: 0735-2166. 38 II JOURNAL OF URBAN AFFAIRS II Vol. 30/No. 1/2008 narrative—that downtown development is the project of the city and region’s most powerful economic elites—has not been revised. But if downtown is now less a seat of corporate power and more a “place to play” (Fainstein & Judd, 1999), do these assumptions still hold? If indeed the value and use of downtown land has changed over the past four decades, would not that suggest that the nature and relative strength of downtown development interests would have shifted as well? This article posits that in many U.S. cities, downtowns are no longer the region’s economic heart, and they are therefore unlikely to generate the sort of political power assumed in earlier political science studies. I study the players in peak, downtown-focused business organizations as a way to understand who in the business community is most engaged in downtown development issues, and to generate hypotheses about how further research could shed light on the relationship between the geography and the politics of the American downtown. Narrative One: The New Downtown is Fun! Whether for a leisurely walk next to the Reedy River Falls or a night of music and fast-paced entertainment, Downtown Greenville is the place to go for fun just about any day of the week. From the Greenville, South Carolina website1 Downtown is a great place to attend family friendly events, dine at one of the 170 plus restaurants, visit over 30 attractions and over 200 retail and service establishments. With over 17 new restaurants and 22 new retail stores that have opened since 2003, you owe it to yourself to come see what all the “fun” is about. Have fun in downtown St. Louis. From the Downtown St. Louis Partnership website2 Over the past two decades, much of the new development in American downtowns has been the construction of cultural facilities, convention centers, and sports venues. Often these projects have been undertaken with the goal of encouraging tourism, seen by many economic development officials as an important new growth industry (Judd et al., 2003). In addition, city officials and business leaders have better recognized the competitive advantages of central cities for functions like culture and night-time entertainment, as downtowns can offer amenities (access to mass transit, a dense and historically interesting built environment) with which sprawling suburbs cannot easily compete. Downtowns are now marketed as exciting areas in which to be enriched (by museums and concert halls) and entertained (by professional sporting events and themed restaurants). Downtown, we learn from promotion groups, is now officially “fun.” In many downtowns, moreover, market-rate housing has become a major part of the built environment.3 The growing popularity of market-rate downtown housing is by now even reflected in census data, which show an increase in downtown populations, with more downtown residents who are college educated and who own their homes (Birch, 2005; Perlman, 1998).4 The trend toward renovating industrial lofts into living space has been underway, at least in some cities, for several decades (Zukin, 1982). Now even office buildings have been repackaged for residential use, as apartments are seen as ways to rescue obsolete, class B office stock in cities like Denver, Tampa, St. Louis (Sharoff, 2001), and Los Angeles (Bergsman, 2004), where a recent study found continued increases in residential population, alongside decline in downtown employment (DiMassa, 2007). New entertainment spaces and residential districts are often heralded (by city officials and by the local press, if not always by academics—–see Fainstein & Judd, 1999; Hannigan, 1998) as II Rethinking the Politics of Downtown Development II 39 signs of a downtown “revival” or “comeback.” This narrative of revival, however, overshadows (and indeed, is often intended to overshadow) the key underlying trend found in many American metropolitan areas: downtown is no longer the center of the region’s economic life. The traditional CBDs are no longer necessarily their region’s largest office markets or their largest employment nodes. In most metropolitan areas, a majority of jobs are found well outside the traditional CBD (Glaeser & Kahn, 2001). And only a few downtowns continue to dominate their metro area office markets. In the cities studied by Lang (2003), traditional downtowns contained about one-third of the area’s office space. He and other sources (see, for example, Center City District, 2006) note wide variation between more centralized MSAs (New York, Boston, San Francisco, Pittsburgh, and Chicago are examples) and the most decentralized areas (Las Vegas, Phoenix, Miami, and Houston) where CBDs may contain less than 20% of the region’s office space (Center City District, 2006). Both Lang and the Center City District find that the downtown share of the office market is decreasing over time. For example, Philadelphia contained just 27% of its region’s office space in 2005, which was down from 41% in 1993—a reflection of the much faster pace of growth in its suburbs (Center City District, 2006). CBD office space had also, traditionally, been the most expensive in the region (indeed, urban economic theory’s “bid-rent curve” assumes that the highest land values will always be at the center (Alonso, 1960)). That has also changed. Quite often, newer, peripheral office developments are pricier than the average center city building. The most expensive offices in Atlanta are found in the Buckhead neighborhood (within the city limits, but miles from the downtown); the Philadelphia region’s costliest offices are on the suburban Main Line (Center City District, 2006). And that’s why we find office buildings converted into condominiums, banks renovated into theaters, and 50-acre football stadium/parking complexes usurping commercial districts: too few companies are compelled to be downtown, leaving space for more land-intensive and less profitable uses (Ford, 2003). The trend toward big-footprint projects like stadiums and conventions centers in downtowns, or of converting office buildings into loft apartments, may be framed by city boosters as signs of an urban resurgence, but in some fundamental way they indicate that a city’s downtown has lost its function as the key economic hub and real estate powerhouse of the region. NARRATIVE 2: DOWNTOWN AS THE CENTER OF POWER These changes in land use and economic geography would seem to presage fundamental changes in the urban political economy, but students of urban politics have not yet begun to grapple with their implications. Although there are political scientists who find new ways to write about downtown development (Fainstein, 1994; McGovern, 1998; Turner, 2002), the basic political science downtown development paradigm first developed decades earlier has not been questioned: the redevelopment of the city’s center is seen as the project of the most essential regional economic stakeholders who will reap immediate material and longer-term symbolic advantages from a robust urban core. They work in coalition with elected officials and appointed redevelopment directors who gain clear political advantage from their association with the city’s dominant economic interests. Much of the urban political science literature on downtown development has been an exploration of these stakeholders and their mutual interests in the physical redevelopment of the city’s center (Dahl, 1961; Mollenkopf, 1983; Salisbury, 1964; Wolfinger, 1974; Stone, 1989). The Peak Business Association: Downtown Development Catalyst The peak downtown business association has been at the center of downtown development since emerging in the 1940s (Fogelson, 2001), and it has been the focus of much urban development 40 II JOURNAL OF URBAN AFFAIRS II Vol. 30/No. 1/2008 literature. The best known and most successful of these organizations played a dominant role in shaping policies to redevelop their downtowns. Some (e.g., Central Atlanta Progress) did so with an explicitly downtown focus; others (Greater Philadelphia Movement, Allegheny Conference on Community Development) were regional organizations that gave priority to a downtown redevelopment agenda. To ensure their effectiveness, many of these organizations restricted membership to the most prominent businesses (in contrast to Chambers of Commerce that represent all businesses) and required the participation of a company’s CEO. In cities like Boston (Mollenkopf, 1983), San Francisco (McGovern, 1998; Mollenkopf, 1983); Atlanta (Stone, 1989), and Cleveland (Swanstrom, 1985) these groups shaped urban renewal policies and influenced local electoral politics, using these organizations as vehicles with which to “look more broadly, both in time and area,” than other local interests were able to do (Stone, 1989, p. 21). The Bay Area Committee, formed in San Francisco in 1946, included the Chief Executives of 23 of the 27 regional Fortune 500 companies, as well as the heads of the four major banks and two newspapers (McGovern, 1998; Mollenkopf, 1983). In Pittsburgh, extensive infrastructure improvement and downtown redevelopment came about when a politically connected mayor, David Lawrence, joined forces with local business leadership, led by financier Richard King Mellon (Ferman, 1996; Sbragia, 1989). Redevelopment in downtown Milwaukee was spearheaded by the Greater Milwaukee Committee, whose membership, according to its 1955 annual report, “owned or managed businesses representing one-fourth of the city’s total assessed value of business property” (Norman, 1989, p. 184). Either these business leaders literally invested in downtown, by dint of their ownership of its real estate, or they depended on getting customers/clients to come to downtown locations, or they would derive symbolic benefit from a robust downtown. In all the scholarly work on this topic, there is a stated or implied link between a business firm’s concerns with profitability, its presence in or near a city’s central business district, and its progrowth activism. These peak organizations have been identified in the political science literature as central to the project of downtown development, both because they symbolized the collective interests of the most powerful economic actors, and because, by mobilizing this power into an organizational vehicle, they could have real impact on a city’s electoral politics and on its redevelopment policies. They would seem, therefore, to be useful institutions to study if one wishes to see whether the private interests guiding downtown development have changed over the years. Are these economic interests still mobilized into peak organizations engaged in downtown development? If not, what do changes in private sector downtown leadership tell us about larger changes in the urban political economy? TRACKING DOWNTOWN CHANGES THROUGH PEAK ORGANIZATION LEADERSHIP To understand how urban business leadership has changed, and to suggest the implications of these changes for downtown politics, I have examined the leadership of three such peak organizations in earlier decades. These are the Greater Philadelphia Movement (GPM, formed in 1948), the Greater Baltimore Committee (GBC, formed in 1956), and Central Atlanta Progress (CAP, formed in 1941, when it was called Central Atlanta Improvement Association). (See Appendix B for further discussion of the choice of cases.) I have sought to identify the companies represented on these boards (which I have labeled “leadership companies”), ascertain the sectors in which these companies operated, and discover whether those companies are still in operation (and still in operation in those cities). Although these companies hardly represent any kind of random sample of locally based companies, it is fair to say that these organizations generally have represented the largest, most politically active companies in the area (the Greater Baltimore Committee, for II Rethinking the Politics of Downtown Development II 41 TABLE 1 Percentage of GPM (1960, 1965); GBC (1962), and CAP (1970) Members Still Active in Region in 2006 No. of Firms No. of Firms No. of Firms No. of Whereabouts Peak Org. in City in Suburbs Gone Unknown GPM 11 (31%) 4 (11%) 13 (37%) 7 (19%) GBC 13 (15%) 11 (13%) 28 (31%) 35 (41%) CAP 14 (56%) 0 11 (44%) 0 Note. Totals for all three groups: 38 (26%); 15 (10%); 52 (35%); 42 (29%). example, specifically sought to engage the heads of the region’s largest one hundred businesses). I have used the board of directors or members lists for the years available: 1960 and 1965 for GPM, 1962 for GBC, and 1970 for CAP (Appendix A includes a list of all the “leadership companies” studies; for a more extended explanation of these methods and their limitations, please see Appendix B).5 As Table 1 indicates, 26% of these “leadership companies” from the 1960–1970 period were still present in their region or city in 2006; 35% have either gone out of business, been bought out by another corporation headquartered elsewhere, or moved out of the region. It is quite likely that all or most of the 42 (29%) firms for which I could find no information are also defunct, so the percentage of firms represented on these boards that are no longer in the region is likely to be well over 50%. Atlanta has had the highest retention rate, which may reflect the fact that the board list is more recent, but could also speak to the greater economic success of Atlanta, which today has twice as many Fortune 500 headquarters as either Philadelphia or Baltimore, even though it has a smaller population than either of those cities. The “leadership companies” have been broken down by sector in Table 2. “Other professional service” firms include advertising, accounting, and architecture/engineering. Finance and insurance includes all manner of banks, investment firms, and insurance agencies. The admittedly clumsy “miscellaneous corporate” category includes all those companies not described in any other category (these run the gamut from manufacturers to energy producers to communications and transportation firms to retail establishments). TABLE 2 Downtown Leadership, 1960–1970 Atlanta, Baltimore, and Philadelphia Central Greater Philadelphia Atlanta Progress, Greater Baltimore Movement, 196