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<br />The Apple Store and locals like George-
<br />town Cupcake and Ben's Chili Bowl to
<br />holster the rax rolls. It is adding mixed -
<br />use projects, including CityMarket at
<br />0, a 1 million- square -foot downtown
<br />development with some 87,000 square
<br />feet of retail and roughly 600 residences_
<br />Because mixed -use projects offer di-
<br />versity and density, they have become
<br />the favored vessel for new retail construc-
<br />tion in cities, which typically use public
<br />privare partnerships to get such deals
<br />done. "Municipalities are focused on
<br />creating urban mixed -use that can incor-
<br />porare fresh new retail programs," said
<br />Kevin Waycr, a Jones Lang LaSalle man-
<br />aging director who advises ciries on these
<br />sorry of projects. Not only does this strat-
<br />egy help them mitigate real- estare- related
<br />revenue losses, it can help lift neighbor-
<br />ing properties out of blight, he says.
<br />Mixed use urban projects represent
<br />the high csr and hest use of city tax -
<br />i.ncentive money because they deliver
<br />far greater tax yields per acre than large
<br />greenfield deals, according to Joe Mini -
<br />cozzi, an Asheville, N.C.-based real es-
<br />tate consultant "Downtowns serve as a
<br />major driver in helping cities overcome
<br />budgetary doldrums," he said. Califor-
<br />nia's city of Modesto and county ofStan-
<br />islaus pull in a combined $26,800 per
<br />acre in property taxes from a downtown
<br />building housing a sports pub and other
<br />businesses, Minicozzi says, versus $6,900
<br />per acre from a local suburban mall
<br />called Vintage Faire. Minicozzi's home-
<br />town of Asheville, meanwhile, enjoys an
<br />800 percent greater tax yield on down-
<br />town mixed -use projects per acre than a
<br />large single -user development such as a
<br />Walmarr Supercenter, he reports.
<br />The Colony, Texas, a city northwest
<br />of Dallas with a population of about
<br />42,000, might be an exception to that
<br />rule. The Colony netted one of the
<br />catches of the decade when Nebraska
<br />Furniture Mart agreed to anchor a 433 -
<br />acre public - private project there called
<br />Gran cheap e. Th e 1.9 million- square-
<br />40 SCr /APRIL 2013
<br />N PHIL ELPHIA'IS GETTING MORE RETAIL AND HOMES THIS YEAR.
<br />foot scare and distribution center is set
<br />to be the largest home- furnishings com-
<br />plex in North America when it opens in
<br />2015. Expectations are that itwill genet,
<br />are some $600 million and draw about
<br />8 million visits yearly. The city was able
<br />to land Nebraska Furniture with a huge
<br />incentive package," said Jeff Green, who
<br />owns an eponymous retail consulting
<br />firm in Phoenix. "They realized this was
<br />going to create millions in tax revenue
<br />for this small community and draw
<br />people from more than 100 miles away,
<br />plus create lots of income from ancillary
<br />retail. So they really got aggressive."
<br />But incentives are only part of it, says
<br />Green. You also have to understand
<br />what's supportable and where and how to
<br />make various disrricts commercially viable
<br />over the long haul," he said. Some cities
<br />are starting to trade on historic neighbor-
<br />hoods to attract retail. Though this has
<br />long been a practice in large urban areas,
<br />most U.S. cities have yet to fully capitalize
<br />on the appeal of classic neighborhoods,
<br />says Green. Consultants are examining
<br />the historic Willo Historic District in
<br />downtown Phoenix, known for its 1920s-
<br />era architectural styles, to determine the
<br />types of retail that would be supportable
<br />in the context ofrhe district's architecture
<br />and culture, says Green.
<br />Oklahoma City, which has thor-
<br />oughly redeveloped its downtown over
<br />the past 15 years, is pressed to recruit
<br />fresh retail because property tax there
<br />does not go into the city's general fund.
<br />Recent recruits are Anthropologic,
<br />Dave Sr Buster's, Whole Foods and a
<br />host of new-to-marker stores housed in
<br />the Ourlet Shoppes at Oklahoma City,
<br />already into its second expansion, hav-
<br />ing opened about a year and a half ago.
<br />Tax - increment financing and other
<br />incentive programs are offered, bur on
<br />a merit basis, says Jessica Herrera, com-
<br />munity redevelopment manager at the
<br />Oklahoma Chamber of Commerce.
<br />Cities have seen a marked increase
<br />in the formation of public- private part-
<br />nerships to grease deals in recent years.
<br />"Retailers' margins have been squeezed,
<br />and they're looking to municipalities
<br />to help them out," said Beasley. But
<br />cities that want to grow their retail tax
<br />base need to create a business - friendly
<br />environment first, she says. "They need
<br />to understand the demand versus the
<br />constraints they have put an retailers."
<br />If restrictions are too difficult, retailers
<br />often opt to locate a mile down the road
<br />in a different municipality, she says.
<br />"Cities that show a progressive effort
<br />toward planning development will ulti-
<br />mately increase their sales tax and their
<br />property values as part of a strong, over-
<br />all gain in revenue," said Beasley. "It's a
<br />delicate balance." scr
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