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Is Mixed Use The Cure-All?

Is Mixed Use The Cure-All?

Mixed Use developments are very popular components to re-development in many cities. Cities often see a new multi-tenant building with a retail component as the jumping off point towards cleaning up blighted neighborhoods.  Some developers are happy to provide this product and are very successful.  Others are more cautious and wait for the appropriate moment.  But some cities can’t see the forest through the trees and make first floor retail as a condition to approval of multi-family projects.  The planners in these cities aren’t necessarily considering whether the site will have adequate visibility or access for retail or whether the existing critical mass in the neighborhood will support retail.  Because of this, a new project could be doomed for failure.

Mixed use projects are great assets in thriving urban areas. However, when a blighted area is targeted for redevelopment, the first building in might not be prime for a mixed use building.  This is a mistake many cities and developers make.  While renters do like having restaurants, groceries, pharmacies, dry cleaners and other amenities within walking distance, these features don’t have to be within their buildings.  Cities should focus on bringing these businesses to the neighborhood through small business incentives such as community development block grants, CRA and other tax incentives.  These efforts should occur as the first multi-family buildings are being developed.  As renters and businesses locate to the targeted area, the neighborhood will become more attractive to developers and more upscale businesses.  That is the time to start planning for mixed use projects and the new urbanism development can take hold.

Planners need to allow for developers to achieve success. Forcing a portion of a building to have a commercial component when the neighborhood is not ready not only takes away from potential income stream, it adds to the costs of construction as accommodation must be made for ventilation, electrical and structure that would not need to be made for a purely residential building.  If the neighborhood can’t support the commercial tenants, the space will go unleased and the vacant space will discourage other businesses from locating to the neighborhood.

Mixed use projects serve a definite purpose – a positive one. However, they can’t be over used and they have to be used at the right time and in the right place.

David Blattner

David Blattner

dblattner@beckerlawyers.com

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JoAnn Nesta Burnett

jburnett@beckerlawyers.com

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