Would Charlotte be better off with less planning?

A film I recently watched at the Bechtler Museum about the planning conflicts between Jane Jacobs and Robert Moses in 1950s New York City got me thinking about how issues with planners and the planning process play out today.

(Disclaimer: As a teenage surfer in NYC at the time, I had a very high regard for Robert Moses for his role in developing the beaches in the Rockaways. I have since come to learn that maybe he wasn’t so wonderful.)

Charlotte has a lot of ambitious, master-planned efforts underway right now, but it is the more spontaneous, less-planned areas that have seen truly explosive growth.

Consider six areas: Brooklyn Village, Eastland Mall, North Tryon, South End, NoDa and Stonewall Street.

In the first three, there has been extensive, and expensive, preliminary work done by professional planners retained by various agencies, detailing exactly what will go where, as well as the formation of large public-private partnerships. Buildings have been vacated and, in some cases, torn down.

What has been missing is much actual construction.

In the case of the latter three — South End, NoDa and Stonewall Street — there has not been nearly as much detailed, prescriptive, block-by-block formal planning. But there has been a massive amount of actual development.

Builders have created totally new, vibrant neighborhoods. Remember then-Mayor Pat McCrory’s famous “Corridor of Crap?” It is now booming South End. Stonewall Street? Just a few years ago, it was a bunch of empty lots left over from building I-277 on-ramps. Now, millions of square feet of new office space, thousands of apartments, a Whole Foods, hotels and more have sprung up there.

To be sure, much of this development has been spurred by infrastructure investments from government, such as the new light rail in the cases of South End and NoDa, and the sale of the residual land left from I-277 for Stonewall Street.

Nonetheless, the differences in outcome and approach are significant. One wonders what would have happened in these areas if they had been subject to the same exacting planning process as the other three.

These factors may contribute to the lack of building at some of the master-planned, public-private developments:

Lack of focus for large areas

How do these large master plans translate to individual parcels?

A prerequisite for any development is an experienced developer with capability, an interest in the site and a clear concept. Large-scale, master-planned developments usually involve multiple parcels with different uses and thus different experience requirements and interests from the master developer.

Each of these different uses has its own economics. Each use or concept must make economic sense to be viable. That makes it more difficult to come up with a single developer who can pull it off.

Development plans also tend to be moving targets. What may be perceived as an opportunity today may not last past tomorrow. That’s why developers usually deal with bite-sized parcels where they can evaluate the economics of a specific proposal, rather than starting billions of dollars of work for many different uses at once.

Lack of center

A typical large, planned development will have several distinct ultimate uses. Private users are unlikely to want to finally commit to a deal until the surrounding uses can be determined.

Development in Charlotte’s Third Ward has been anchored by the Carolina Panthers’ stadium, the Charlotte Knights ballpark and Roman Bearden Park. With those in place, the surrounding property owners could be assured of their primary neighborhood and could thus proceed with some confidence.

The decision to base the headquarters and practice facility for Charlotte’s new Major League Soccer team at Eastland Mall could provide the center and focus to build around that the plans have thus far lacked. That kind of confidence leads to construction.

The same might be considered for Brooklyn Village in Second Ward. If the master developer were to decide on where the Marshal Park replacement will be and even commence its redevelopment, that would lend definition to all the blocks surrounding it.

Economics will ultimately drive deals

There may also be mismatches between the planned use and the value and current use of the land being considered. Sites inside the inner loop in Charlotte are extremely valuable and may not work for uses which may be considered socially desirable, such as affordable housing, without very substantial subsidies.

There also may be non-financeable uses proposed (such as affordable housing or a boutique shopping district catering to small, mom-and-pop retailers) — but they will still each need to have a source of funding.

Affordable housing component

Most large-scale public/private ventures have a requirement for “affordable” (meaning subsidized) housing. This requirement adds a significant element of complexity to any real estate deal.

The economics for that parcel become more complicated and thus more difficult to finance. A common source for financing subsidized housing is the federal tax credit program. In North Carolina, the state Housing Finance Agency administers the credits. These grants can be slow and difficult to obtain, and bring with them a whole set of additional requirements.

Also, any affordable housing financing arrangement requires an ultimate investor. These must be both patient and tolerant investors. Twenty years is a short time in the life of a real estate development.

Slow progress?

Now, we should note that there is some development activity occurring at the sites we highlighted — albeit more slowly than in the less-planned areas. Eastland is finally seeing some movement with the MLS announcement. And along North Tryon Street, a new Intercontinental Hotel is rising next to the Foundation for the Carolinas building, while the Charlotte Mecklenburg Library is preparing to kick off its new Main Library building in 2021.

Whatever the cause (and there may be several others), the difference in actual development between the “master-planned” areas and some of the new, dynamic neighborhoods is striking.

Maybe the cause of that difference is something that will be better evaluated and understood as we proceed. Where is the new Jane Jacobs when we need her?

John Huson is founder and CEO of Carocon, a Charlotte-based contractor with extensive experience building multifamily housing. This article represents his personal views and opinions.

John Huson