For a long time, planners and city administrators have been looking at the spin-off, financial benefits of revitalizing parks. There are lots of examples, but none may be more dramatic than the financial redevelopment of the Loop area in Chicago where much of the credit for the rebirth goes to Millenium Park.
There’s a story here for Memphis. The potential exists to revitalize the Memphis Public Promenade and help transform the core of downtown.
Often described as the best land along the Bluff, the Promenade was dedicated in 1819 to be used as a park in perpetuity, much like the conservation easement just created to protect Shelby Farms. Although the city has built some inappropriate buildings on the Promenade, which currently block the city from the river, wise, long-term revitalization of this extraordinary public site and its connection to trails, neighborhoods, and parks citywide could reap not just quality of life benefits for our city, but financial ones as well.
Here’s an article about Millenium Park and the Loop area of Chicago that appeared recently in the Chicago Tribune.
Loop lights up with a retail wick
Rebounding from decades of decline, the Loop has dusted itself off and is undergoing a renaissance as a magnet for tourists, shoppers and other spenders--and taxpayers--drawn to stores, theaters, restaurants-- are flocking to the area.
By Sandra Jones
Tribune staff reporter
Published August 20, 2006
At 7 p.m. on a recent weekday the crowd was so thick outside the Oriental Theater in the Loop for the show "Wicked" that passersby had to walk single file near the edge of the sidewalk just to get by.
Around the corner, diners waited outside for 30 minutes for tables at Petterino's, a steakhouse in a corner building that stood vacant only six years ago.
And two blocks away, dozens of shoppers leafed through handbags and sundresses at Nordstrom Rack and H&M on State Street, where stores are now lit up long after office workers have gone home.
Not long ago the Loop was a ghost town after 6 p.m. on a weeknight. Restaurateurs and bar owners wouldn't go near it, following instead the trail of night-lifers to trendy neighborhoods to the north and west.
Real estate experts confirm what has become increasingly apparent: There is a bona fide retail renaissance taking shape in the Loop, one of Chicago's oldest and best-known destinations but one that was long ago left behind as other areas, especially north of the Chicago River, flourished with restaurants and shopping.
Thanks in large part to a $60-million investment to revive the theater district and $475 million spent to build Millennium Park, a record number of retailers and restaurants are moving into the Loop looking to benefit from the influx of tourists, residents and students who hang out downtown long after offices have closed.
"It's definitely paid off," said Allen Joffe, principal broker at Chicago-based Baum Realty Group Inc., a real estate firm tracking the Loop's retail revival.
The Loop retail market posted a banner year in 2005, with 89 new leases signed, topping the previous record in 2004 of 60, according to an annual study from Baum Realty. That's almost triple the 34 leases signed in 2003, Joffe said.
What's more, the gross average asking rent rose 10.3 percent, to $58.52 per square foot a year in 2005, from $53.04 in 2004. The 2005 rate was the highest since the firm began tracking rents eight years ago.
Not surprisingly, almost half of the new leases signed in 2005 were for food service, with 20 fast-food outlets, 13 coffee shops and seven full-service restaurants. But in a sign of the longstanding belief that the revival is here to stay, another 27 deals were for specialty stores, including six for apparel.
More tax money
The renewal is likely to result in an influx of new tax revenue from one of the biggest money pits in the city. Several mayoral administrations have spent tens of millions of dollars trying to lure retailers back downtown with little or no success.
Attracting more restaurants and national retailers to the Loop not only boosts the city's image but also helps pay for city services at a time when operating budget shortfalls are a common occurrence. Chicago restaurant sales in particular represent more than 20 percent of the sales tax revenue the city collects each year, making restaurants the fastest-growing retail category in the city, said John C. Melaniphy, founder and president of Melaniphy & Associates Inc., a Chicago-based retail consulting firm.
The streets that experienced the most activity were Michigan Avenue, State Street, Madison Street and Randolph Street, Baum said.
Retailers had avoided the Loop for decades, particularly State Street, the city's first major shopping district. The street lost cachet to North Michigan Avenue in the 1970s and then chased away traffic when it was closed to autos from 1979 to 1996 in an ill-conceived attempt to create a pedestrian-friendly outdoor shopping mall. As recently as 2004, retail vacancies for specialty stores on State Street surpassed 20 percent, according to Northern Realty Group Ltd. That figure dropped to 4.6 percent last fall.
Claudia Martin, who moved to an office building turned condo in the heart of the Loop five years ago, has watched the transformation from her living room.
"We used to joke you could lie down in the street on a Saturday afternoon and no one would run over you," said Martin.
Now, fast-food lunch spots are staying open later and on the weekends. Tanning salons and dry cleaners are hanging up shingles. And fashionable restaurants and shops are starting to move in.
Among the new tenants in 2005: Morton's The Steakhouse, Kamehachi, Hannah's Bretzel, Cereality, Ace Hardware, Barnes & Noble, Claire's Accessories and Ann Taylor Loft.
The neighborhood even got its first trendy boutique, an accessories and handbag shop called Nakamol on South Michigan Avenue that would fit just as well in Bucktown or Lincoln Park.
The pace remains strong for 2006. Restaurants including California Pizza Kitchen, McCormick & Schmick's and Elephant & Castle are adding to the nightlife. And apparel retailers such as Annie Sez, Urban Outfitters and Chernin's shoe store are filling in State Street.
Kevin and Alan Shikami, the brothers who run the chic Kevin restaurant in River North, plan to open a second restaurant later this year, this one in the Loop.
The Asian restaurant, to be called Shikago, will serve lunch and dinner and host wine tastings.
Alan Shikami said he hopes the upscale outpost will help change the way people look at the Loop. "I've always thought the Loop was a peculiar and unfortunately underutilized area," Shikami said via e-mail. "I always wondered why it could not resemble Manhattan. Why did the Loop have to be so focused on business and devoid of other life?"
Much of the Loop's rebirth can be traced to Millennium Park's opening two years ago. Held up as a model use of urban public space, the free concerts, stunning architecture and gardens attract an estimated 3 million visitors a year. Priceline.com named Millennium Park the most requested travel destination this summer, according to a study of the top 50 summer travel destinations, released in June.
"The transformation is phenomenal," said Chris Holtebeck, a tourist from Appleton, Wis., who has watched Chicago change. "There's just so much to see. And I feel safe."
Some parents feel the same way. It's not unusual to find Kregg Kaducha pushing a stroller around the Loop after 8 p.m., something he wouldn't have considered before the redevelopment took place. His sons, ages 2 and 5, run up and down the terraced stairs at the newly opened Wabash Plaza along the Chicago river and gaze at skyscrapers.
"It's cheap entertainment," said Kaducha. "I hope the development continues. It encourages more people to come around here."
$100 per square foot
As part of the upturn, real estate agents say they are seeing landlords for the first time asking for retail rents of $100 per square foot, a price typically reserved for outposts in River North.
Rents in some spots south of the river have doubled since Millennium Park opened, said David Stone, founder of Chicago-based Stone Real Estate Corp. and a veteran broker for downtown retail real estate.
"It's in quite high demand," said Stone.
That's not to say there aren't still dead zones. The Loop office market, for example, is a mixed bag. While the West Loop is one of the hot spots for new office space, there are some office buildings in the Central Loop that have as much as 40 percent to 60 percent of their space available.
And State Street still has a gaping hole across from Marshall Field's, where the long-troubled Block 37 project is moving ahead in fits and starts. Developer Mills Corp., plagued by financial setbacks, reduced the retail space, yet to be constructed, at 108 N. State St. to 265,000 square feet from more than 400,000 square feet originally projected.
The Loop retail market's overall retail vacancy rate rose 1.12 percentage points in 2005 to 17.8 percent, according to Baum. The higher vacancy rate reflects in large part new projects that have yet to be leased, such as the Heritage at Millennium Park and the MetraMarket food court and retail center in the West Loop near the train tracks, Joffe said.
The Baum report covers the roughly 106-square-block Loop retail market bounded by Wacker Drive, Michigan Avenue, Van Buren Street and the Kennedy Expressway.
As an indication of how ready the Loop is to show off its new after-work persona, the Chicago Loop Alliance, an organization of Loop businesses, is working with the city to host the first dusk-to-dawn party on May 7 modeled after the popular "White Night" festivals in Paris and Rome. Stores, restaurants, museums and the park will stay open into the wee hours of the morning.
"There's been such tremendous growth here," said Ty Tabing, executive director of the alliance and former assistant commissioner at the city's planning department. "The objective is to highlight the Loop as much more than a place to go to work every day."
The alliance is preparing its own study, due out by Labor Day, to measure the economic growth of the Loop in the wake of Millennium Park. The Loop's residential population soared 50 percent from 2000 to 2006 to more than 13,000 people, according to Tabing. And residents have plenty of money to spend. The average household income is about $120,000.
"I really think the Loop has an incredible potential to be a true Chicago-style neighborhood," said Doug Zell, founder and CEO of Intelligentsia Coffee & Tea Inc. Zell opened his second coffeehouse in the Loop on Randolph Street across from Millennium Park in April. "You've got people living there. You've got people working there. It's just getting started."