When the Community Becomes the Developer

April 26, 2019

Kirby A. Glaze Founder and President, Public-Private Partnership Project Management, Inc.

This article appeared in the April 2019 issue of the Georgia's Cities newspaper.
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F or years cities in Georgia have been waiting for their downtowns to be discovered by developers.They know their downtowns are as yet undiscovered jewels, just waiting on that visionary developer to invest in mining them, polishing them and reaping the financial rewards of their discoveries. They have even offered incentives and assistance to those who might seek to unearth these precious jewels. But alas, the developers still don’t come. Why do these rich fields lay fallow? Actually, there are several reasons, not the least of which is that the developers, for the most part, are not market makers, but rather market followers. Development is a herd mentality, seeking to do that which has already been proven to be profitable. As a general rule, developers don’t want to be the first to do something. In fact, within the development community there is a saying, “Pioneers get arrows in their backs.”

In addition, there is the problem of scale. In most downtowns in Georgia (at least outside the major metropolitan area) the buildings are often four stories or less and contain somewhere from 5,000 to 50,000 square feet. This is just not enough critical mass to attract the attention of developers or investors who are accustomed to projects of several hundred thousand square feet or 200 units of residential development. Finally, while incentives are helpful, downtown projects are often complicated, involving multiple sources of funding requiring both public and private participation. Such are often the very things that cause the private sector to shy away. Therefore the community continues to wait. Sometimes the community must be its own developer.

In March 2014 Clarkesville experienced a devastating fire in its historic downtown. Two buildings were destroyed and three others were heavily damaged. When the city went to the property owners to offer their assistance in rebuilding, they discovered that most of them did not intend to rebuild but rather simply take their insurance proceeds. They did not see a future in downtown Clarkesville. But the city officials did. They began, as should all communities, with a plan. In conjunction with the Department of Community Affairs (DCA) and the Georgia Downtown Renaissance Partnership (the Georgia Municipal Association, the Cities Foundation and the University of Georgia’s Carl Vinson Institute of Government), the city began a Renaissance Strategic Visioning and Planning (RSVP) process to re-envision what downtown Clarkesville could be. The result was several options for rebuilding the downtown square, especially those properties damaged by the fire, which garnered widespread community support.

When the property owners failed to show an interest in implementing the plan the city decided it was too important to leave to chance and purchased the five properties damaged by the fire. City Manager Barbara Kesler knew she had the political will among her elected officials to undertake the redevelopment of these properties, but she felt they lacked the technical expertise. The city reached out to Public-Private Partnership Project Management, Inc. (4PM) to help them manage the process of redeveloping these strategic downtown properties. 4PM worked with the city elected officials and staff to review the various options provided in the plan to consider the costs, the funding sources and the potential revenue in order to determine the plan that made the most economic sense for the community.

The result was a plan to rebuild three of the damaged historic buildings and turn the properties where the two destroyed buildings had been into a public plaza and additional parking. This would provide at least four new retail spaces and one residential space on the square, while also converting former basement space into usable space for other tenants. The task of actually developing the properties was given to the Downtown Development Authority, with the assistance of 4PM, while the city provided the financial support necessary. The development was funded by a combination of historic tax credits, city equity, a local bank loan, a DCA Redevelopment Fund Grant, a DCA Downtown Development Revolving Loan and a Georgia Cities Foundation Loan. The total project budget was just over $3 million with the city contributing approximately $675,000 in property acquisitions and pre-development costs. The entire process of planning and funding the project took two years and in April 2016 the development broke ground.

Completed a year later, today the project includes a new public plaza, a downtown pizza restaurant, an accessories shop, a women’s apparel shop, an outdoor education and outfitters store, a local real estate office and a second story two-bedroom apartment. The city sees a $3 million investment, five new businesses, a new downtown living opportunity and a long-term goal of eventually selling the properties either to the tenants or investors. Clarkesville is just one of a number of communities in Georgia who have realized that to accomplish the development they desired they needed to become the developer. Whether it is Waycross converting an abandoned downtown hotel property into a corporate office headquarters, Monroe converting their old city hall into professional office space, Jonesboro turning an old fire station into a coffee shop and micro-brewery, Zebulon renovating an old elementary school into an Air BNB and restaurant, or Springfield working to turn a former furniture store into a new downtown retail center, communities across Georgia are becoming their own developers. As an elected official, if your community is not developing the way you would like to see, especially in your downtown, the first question you need to ask is, “If we aren’t willing to invest in ourselves, why should we expect anyone else to do so?”
 

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