Cities, Sport Arenas, and Redevelopment:The Case of Milwaukee
and the Arena District Redevelopment Plan
Written by Dr. Anthony Pennington-CrossChair, Department of
Finance; Professor of Finance and Center for Real EstateMarquette
University, College of Business Administration Straz Hall,
Milwaukee, WI 53201-1881
May 14, 2015
Cities, Sport Arenas, and Redevelopment: The Case of Milwaukee
and the Arena District Redevelopment Plan
IntroductionThe history of cities in the U.S. is a story of
transformation, as cities attempt to keep up with technological
advancements and the changing needs and interests of U.S.
populations. People used to live in cities because they had to.
Today, people tend to live in cities because they want to. As a
result, cities need to seek ways to attract people to move back.
Many cities have turned to redevelopment plans centered around
sports arenas.Milwaukee has been presented with the opportunity to
redevelop a long-unused tract of land near its downtown area. Much
of the land was part of the freeway but is now simply empty and
unsightly space. A new arena for the Milwaukee Bucks would be the
centerpiece of a large scale redevelopment plan in this tract. The
plan proposed by the Bucks would create what might be called the
Arena District, which would include approximately 700 apartment
units, 255 thousand square feet of office space, 280 thousand
square feet of retail, open space, and 2,900 parking spots. The
question this paper explores is whether such a redevelopment
project would create a positive amenity that makes Milwaukee a more
attractive destination city. Understanding the changing role of
cities is essential to that exploration.Many of the original cities
in the U.S., including Milwaukee, formed around trade routes (the
transportation network). They were convenient places to collect
commodities such as lumber, fur pelts, and crops to be distributed
to other cities in the U.S. and across the globe. Eventually, many
cities became hubs for factories and manufacturing industries. In
order to obtain a nonagricultural job or a higher paying management
job, a worker had to live in the city; it was too expensive to
commute from any distance. With the widespread introduction of
automobiles and trucks in the 20th century, households and firms
were no longer as strongly tethered to downtown and began to spread
out, reducing cities' population density and economic activity. The
pull of cities has been reduced even further in recent decades by
the development of high quality communication and computing
technology, which made it possible for workers to complete many
tasks without an office. At the same time, the goods and services a
city is likely to offer changed from physical commodities to more
information- and innovation-based services (finance, consulting or
technology, for instance). Some cities have suffered mightily from
these shifts. But many larger cities and some of the more quirky
mid-sized cities have thrived instead of falling apart. As
described in more detail below, these cities attracted high-skill
workers, who needed and wanted to share physical space to enhance
their productivity. Moreover, younger and highly skilled workers
agglomerated in certain cities because these locales had become the
place to be and to be seen. Firms have followed these workers back
to cities, despite the high cost of land and property. The lesson
successful cities have learned is simple but fundamental. First the
city must attract the workers; their presence in the city in turn
attracts firms. In short, the traditional competition among cities
has shifted from providing incentives (subsidies) to firms and
employers to relocate to providing incentives (subsidies and
amenities) for high skilled workers to relocate. The idea of a
major urban redevelopment should be viewed through the lens of this
paradigm shift. Workers are looking for nice places to live, with a
lot of amenities. Some cities have natural amenities such as good
weather year round or mountains with lots of ski resorts nearby.
Other cities have created their own amenities based on their local
culture. One example is the music industry. An important part of
the success of Nashville, Austin, and even Seattle is their vibrant
and unique local music scenes. Cities now must provide a wide array
of high quality and unique amenities to attract a mobile and
educated workforce.Sports related entertainment provides another
potentially important amenity to attract a younger workforce. The
academic literature has shown that a sports arena as part of a
redevelopment plan can help to revitalized underutilized parts of a
city. A good example of this process is in Columbus Ohio, where a
new arena was opened in 2000 for the National Hockey League (NHL)
Columbus Blue Jackets. The arena is also used by an arena football
team and for other entertainment. A largely abandoned section of
the city has been revitalized as part of what is called the Arena
District. Can the Bucks redevelopment plan do for Milwaukee what
the Blue Jackets have done for Columbus?
A Brief Look at Arenas and Stadiums Stadiums and arenas have
been in existence since people have been competing with each other
and a portion of the population cared enough to watch the
competition. Perhaps the first known arena was the Roman Coliseum,
built in 80 AD so that Romans could watch gladiators fight
(http://www.tribunesandtriumphs.org/). In the U.S., the connection
between the arena and the team was sometimes so strong that they
are forever linked together the Polo Grounds and the Giants, Yankee
Stadium and the Yankees, and Madison Square Garden and the New York
Knicks. Early sports arenas were really just places for fans to
watch their teams compete. There were no concessions, and
sightlines were often restricted. These stadiums and arenas were
located in downtown areas, next to train stations and within
walking distance of homes and public transportation. As the
automobile become the predominant form of transportation, stadiums
and arenas adjusted by moving into the suburbs. Often an arena
would be surrounded by acres of surface parking lots. A good
example of this type of arena was the Capital Centre (formerly the
USAir Arena) located in the Maryland suburbs of Washington, D.C.
While this configuration provided easy access to suburban fans, the
parking lots physically separated the facility from the
neighborhood around it and the urban core.Figure 1: Capital Centre
Aerial View Source: Capital Centre satellite view, Image U.S.GS de
Nasa World Wind 1.3.5
http://en.wikipedia.org/wiki/Capital_Centre#/media/File:Capital_Centre_satellite_view.png.The
Capital Centre was completed in 1973 and was actively used by local
NBA and NHL teams, college sports teams, other sports teams, and
for events such as concerts. The Capital Centre was demolished in
2002 and effectively replaced by an arena (the Verizon Center) in
downtown Washington DC.
The movement of sports facilities from the city to the suburbs
began to reverse course in the 1990s. Camden Yards in Baltimore
(baseball) and formerly Jacobs Field (now Progressive Field,
baseball) in Cleveland were among the first to show the potential
benefits of developing a sporting complex downtown. Many cities and
their professional teams have since been following this trend, in
all the major sporting leagues. For instance, the Verizon Center
(formerly the MCI Center) is located in downtown Washington, D.C.
in the Chinatown neighborhood. The arena reflects the cultural
heritage of the location and is seamlessly imbedded into the urban
landscape.
Figure 2: The Verizon Center Street View
Source:
(http://en.wikipedia.org/wiki/Verizon_Center#/media/File:Verizon_Center_wide.jpg).
The Verizon Center opened in 1997 and hosts a variety of sporting
and cultural events.The move from the city to the suburbs and back
to the city partly reflects the same economic path of the cities
themselves, but it also reflects a change in the fan base.
Traditionally, the fan base was made up of middle or working class
households. But by at least the 2000s, the corporate fan base was
becoming a critical part of any professional sports team and arena.
This fan is not usually located in the suburbs but inside the city,
and the luxury suites in modern arenas are used to entertain
clients and provide fringe benefits for employees. By 2000, the
corporate fan was willing to pay anywhere from $50,000 to $500,000
annually for a suite in an arena (Chapin, 2000). In this same time
period, there was a growing perception that downtown stadiums are
useful mechanisms to aid redevelopment of challenging locations in
the urban core.
Cities and Competition Classic urban economics helped us
understand two things about cities 1) why they exist, and 2) why in
the middle of downtown the buildings are at their tallest and both
rents and values are at their highest (Ling and Archer, 2010). From
this point of view, cities exist to sell goods and services to
people who do not live in the city. This is because when you sell
to outsiders (export), the money used to purchase the goods and
services is infused (imported) into the local economy. The more a
city can sell goods and services to other locations, the bigger the
city can get. It is this export activity that drives the demand for
all the local (non-export) economic activity such as grocery
shopping, car repair, haircuts, etc. Over time the goods and
services that cities export has changed. Many cities in the U.S.
started as trading posts for fur and lumber. Over time, many cities
shifted to manufacturing and then more recently to services and
information related goods. The most successful cities have adapted
quickly to the next important mode of exporting goods that are
demanded by the world at large. The shape of the city depends on
the need or desire to be in certain locations (downtown for
instance). If a lot of firms or people want to be in a specific
location, they will bid up land and property values. When prices
get high enough it will become profitable to start building
multiple story buildings. In classic urban economics, this
relationship depends critically on transportation costs. Land and
property near to the rail station or port is valued the highest
because this is where the goods are shipped out. As firms move
further way from the point of export (rail or port) there is less
money left over to pay for property use. As a result, as a firm
moves further away from the export location, the lower prices and
rents are. The same process applies for the workers who bid to use
property with income left over after paying their transportation
costs of getting to work and back. As a result, space gets
segmented into different types of uses depending on who is willing
to bid more.Technology change has had large impacts on the shape
and purpose of cities. The first major challenge for cities in the
U.S. came as freeway systems became widely developed. These new
transportation avenues made export locations in cities (such as
ports and rail yards), far less critical to firms. This allowed
firms to move to the suburbs so they could be closer to their
workforce and away from expensive urban land. The second major
challenge for cities was a substantial reduction in transportation
costs for the general population. The widespread use of the car
made the cost of traveling to work lower, so more households could
live further away from work or the city. Both of these challenges
made traditional downtown property less valuable and less
desirable. As a result, cities and especially many downtowns
struggled to find a reason for existing. In general, cities became
more spread out and had multiple nodes of concentrated economic
activity. Joel Garreau popularized this idea by examining what he
called edge cities (Garreau, 1991).Even though substantial numbers
of firms and households were moving to the suburbs, they were still
recreating mini-cities (edge cities). These mini-cities had many of
the attributes of a traditional city, including higher rents and
property values and eventually congestion. This indicated that
firms intentionally located near to each other even when there was
no key export location and transportation costs were low. Urban
economists searched for reasons why this would be. They found that
many types of workers are more productive in locations when there
are a lot of other workers around. This higher productivity makes
it possible for firms to pay higher wages. The benefits of
agglomerating workers in a physical location seems to be strongest
for educated employees, but the benefits can extend even to
supermarkets (for example, Garrate and Pennington-Cross 2014,
Rosenthal and Strange 2008). Due to rapid improvements in
computing, computers, and communications, throughout the 2000s the
role of transportation costs in shaping cities was again radically
changed. If everyone could just hold virtual meetings, there would
no need to have an office and no need for anyone to live in a city.
However, cities did not crumble. Instead, many large cities
flourished and creativity (another word for productivity) became
the reason of the day for office space and shared office
configurations. To enhance creativity, office space is being
reorganized. In many firms, individual offices are being replaced
with benches and small shared desks. Shared or interactive space is
being increased to enhance and internalize the productivity gains
associated with workers interacting with each other. See the
Economist magazine for a discussion of this topic in an article
entitled The office cubicle: Inside the box, How workers ended up
in cubesand how they could break free, by Michigan Holland Jan 3
2015.
http://www.economist.com/news/international/21637359-how-workers-ended-up-cubesand-how-they-could-break-free-inside-box.The
shift in the purpose and shape of a cityfrom the need for
physically exporting a good to organizing people and space to
maximize productivityhas also affected how cities compete with each
other. Traditionally, cities attempted to attract companies with
low wage workers and low cost land and buildings because this
increases profits. But as firms now focus on productivity and
creativity, they need to locate in places where there is a large
pool of highly skilled workers. In this sense, firms are following
the workers. So, cities must compete less on input costs (wages and
land) and more on ways to attract large quantities of high skilled
workers. Thus, the primary challenge for a mid-sized city like
Milwaukee is to provide an amenity package that can make it an
attractive place to live for highly skilled workers. It competes
directly in the regional labor pool of recent college and graduate
school graduates with Chicago, Illinois. Despite recent challenges
in Chicago and Illinois (crime, public leader corruption, and
fiscal/budgetary strain), the city continues to attract the types
of firms that need a deep and talented workforce that benefits most
from the agglomeration-driven productivity gains. See Companies Say
Goodbye to the Burbs: Young Talent Wants to Live in Chicago, Not
Libertyville; Dilemma for Older Workers, by Lauren Weber Dec 4
2013, published in the Wall Street Journal.
http://www.wsj.com/articles/SB10001424052702304281004579222442197428538.Milwaukee
has many attributes that make it an attractive place. It has most
if not all of the major cultural amenities associated with large
cities. It has a wide array of museums and interesting
architecture, including the Milwaukee Art Museum, Milwaukee Public
Museum, Harley-Davidson Museum, Villa Terrace Decorative Arts
Museum, Discovery World, Grohmann Museum, Patrick and Beatrice
Haggerty Museum of Art, and Thomas A. Greene Memorial Museum.
Imbedded in this list are major icons of Milwaukee located on the
waterfront of Lake Michigan. The successful weaving of the lake and
the Milwaukee River into the city is unique amenity that other
midsized Midwest cities have struggled to create or cannot create.
Another unique amenity offered by Milwaukee is Summerfest, which
brings a wide array of popular musical talent to the area.High
quality professional sports teams provide another potentially
important amenity. The Milwaukee Brewers (Major League Baseball)
and the Milwaukee Bucks (NBA) are well-known professional sports
teams. Both teams have the ability to attract fans from outside the
city and the region. For example, Mayborne estimates that
approximately 30% of the attendees are from outside of the
metropolitan area. (See Economic Impact of the Bradley Center, by
Bret Mayborne, March 2012.)
http://bradleycenter.s3.amazonaws.com/doc/MMAC_Bradley_Center_Analysis_Mar_2012.pdf).
The Economic Impact of Sport Stadiums and ArenasThe Amenity and
Public GoodSporting events and the stadiums they are located in can
be viewed as one of the amenities that a city uses to attract a
skilled workforce and the firms that want to employ this workforce.
You do not have to attend the games to benefit from the existence
of the team. The teams games can be watched on TV or online;
discussions about the game and team can continue at work the next
day and via online discussion forums and social networks. The
existence and popularity of these activities indicates that people
value their local professional sports teams. The fact that anyone
can enjoy the team without directly paying for it (attending games)
makes professional sport teams and their arenas a public good. It
is almost impossible to measure directly the value of the sports
team amenity. However, economists can use rents paid on housing to
indirectly measure its value. Carlino and Coulson (2004) do just
this using individual household property rents. They examine the
impact of having an NFL franchise on rents within central cities
and metropolitan areas as a whole. They find that rents are 8
percent higher within the city with a team and 4 percent higher
within the metropolitan area. This provides strong evidence that
professional teams provide a substantial public amenity to the
region, one that is valued by people living in the region.The Story
from the 1990sA substantial amount of research was conducted on the
economic impact of stadiums and arenas using data through the 1980s
and early 1990s. Siegfried and Zambalist (2000) review the
literature and find no evidence that a stadium or arena has a
positive impact on economic outcomes (income, income share of the
region, or employment). The literature indicates that there are
several reasons for these findings. First, entertainment
expenditures tend to be made on a fixed budget. So, if a household
spends money to watch to professional baseball game, it spends less
money on other forms of entertainment (going to a movie,
Summerfest, museum, eating out, etc.). Second, much of the money
that goes into sporting events is not spent locally. The players
and owners receive the largest share of the revenues and both tend
to spend their money elsewhere. This reduces the ability of
expenditures to create jobs and income locally. Third, the players
and owners are high income households that are typically taxed at
the highest federal income tax rate. Fourth, local municipality
budgets are limited, so any subsidy or expenditure for the sports
team and its arena is often financed through an increase in taxes
on other parts of the economy or a reduction in other types of
spending (See for example -- Siegfried and Zimbalist 2000,
Siegfried and Zimbalist 2002, Hudson 1999, Miller 2002, Johnson,
Groothuis, and Whitehead 2001, and Alexander, Kern, and Neil 2000,
Coates and Humphreys 2003).The New, More Nuanced Story from the
21st Century One of the major problems with the story from the
1990s was that many of the empirical findings depended on moves of
stadiums and arenas from the city to the suburbs (moves and new
stadiums in the 1960s, 70s and 80s) and not the more recent
stadiums and arena redevelopments in downtown areas. As mentioned
above, the Capital Centre (opened 1973) in the Washington, D.C.,
metropolitan area was typical for its time. It was surrounded by
acres of surface parking lots. This physical isolation made
spillover economic activity after a game very unlikely -- viewers
simply drove away when the game is done. In contrast, the move to
the Verizon Center in downtown D.C. (opened 1997) from the suburbs
integrates the arena into the city. This makes it much more likely
that fans leaving or arriving at the stadium will also spend some
time at area restaurants and other forms of entertainment. It is
also safer if patrons have been drinking during the game. More
recent literature began to look at new stadiums that were part of a
larger redevelopment plan and investigated the differences in
outcomes and what might explain those differences. Austrian and
Rosentraub (2002) found that the redevelopment of downtowns in
Cleveland and Indianapolis performed better than the similar
efforts in Columbus and Cincinnati. The authors attributed this to
the ability of sports stadiums to create a sense of place and a
destination on tracts of land that had been vacant or severely
underutilized. This study was completed before the Nationwide Arena
was completed in Columbus. Santo (2005) redid some of the prior
research using newer stadiums and found that in some locations new
stadiums and arenas were associated with economic growth and in
others they were not. Case studies tended to show that some key
features are required for a stadium or arena to be a successful
part of economic redevelopment. The opening of Camden Yards in
Baltimore began a new era of baseball stadiums and helped
popularize sports facilities as a catalyst for urban redevelopment.
Camden Yards converted about 20 blocks of urban industrial
property, which was a sort of wasteland abutting downtown
Baltimore, into a sports entertainment complex. However, it did not
aid all areas around it. It has been a success and helped feed off
the redevelopment of the waterfront area (the Inner Harbor)
destination. The owners of the Orioles (the MLB team) actively
opposed entertainment development directly outside the stadium in
an attempt to keep patrons inside the Camden Yards. There was also
a proliferation of ground level parking in the lower income
neighborhoods. These 2 factors limited the positive spillovers
possible from the stadium. Cleveland also redeveloped a large plot
of land on the edge of downtown called the Gateway. The Gateway
houses an NBA arena and a baseball stadium. In order to drive into
downtown Cleveland, a visitor must go right past it. There was an
attempt to create a physical connection with the nearby areas using
pedestrian walkways. An association funded by local business and
corporations spent millions of dollars marketing, designing
opportunities and doing feasibility studies. The Gateway has been
associated with retail, hotel and office redevelopment around the
area and stadium (Chapin, 2004). In Detroit, Michigan, a survey of
stakeholders emphasized that sports alone cannot be a successful
redevelopment tool but is useful as one part of a strategy to drive
the economy and must be one attraction among many
(Trendafilova,Waller, Daniell, and McClendon 2012). In summary, the
more nuanced view of the 2000s literature is that a sports arena
and stadium can be an important part of a redevelopment plan. The
redevelopment plan needs to be coordinated with the arena and the
arena itself needs to be physically integrated into the community,
not separated. Good examples of this approach are in Cleveland and
Washington DC (the Verizon Center). Both plans took underutilized
land and transformed it into sports entertainment complexes with
substantial spillovers.Other midsized cities that have used arenas
and stadiums as part of their redevelopment plans include Kansas
City, Columbus, Memphis, and Oklahoma City. All of these sports
facilities have been part of a coordinated redevelopment plan that
has tried to create a destination using entertainment, food and
beverage locations, and retail establishments. They have been very
successful in driving development to these locations and have
transformed underperforming real estate into multi-use locations
that can attract visitors from both within the region and nation
(typically these are users of convention space who also attend a
game at the arena while in town). The key is that the arena is one
of many amenities the location can offer in order to create a live,
work, play environment. Columbus, Ohio, is a typical example. After
the Austrian and Rosentraub (2002) study collected data, Columbus
constructed and opened the Nationwide Arena in 2000 primarily for
the National Hockey league (NHL) Columbus Blue Jackets. An arena
football team also uses the facility. In 2009 a baseball stadium
was constructed for a minor league team. The arena construction was
coordinated as one part of the Arena District redevelopment plan in
Columbus. This area used to be a neglected part of city that
included a state prison and other brownfield redevelopment sites.
The arena and stadium were part of a large redevelopment plan that
has incorporated multiple different types of use including housing,
office, and retail. Over the ten years from 1998 to 2008 there have
been substantial increases in economic activity across all metrics,
including property values and employment. (See report titled
Assessment of the Gross Economic Impact of the Arena District on
greater Columbus.)
http://bluejackets.nhl.com/ext/2008/AssessmentGEIArenaDistrictonGreaterColumbus.pdf.
The Arena District Redevelopment PlanThe proposed arena in
Milwaukee is located adjacent to the vacant land where the Park
East freeway used to be. The development plan articulated by the
Milwaukee Bucks includes redeveloping all of the undeveloped land
and more (Arena District). The academic literature indicates that a
successful arena needs to be part of a larger redevelopment plan.
The new arena should connect with the neighborhood, so that when
fans are leaving and arriving at games they have ample
opportunities to stop for more recreation. Ideally, the arena is
within walking distance of multifamily housing (rental or condo).
This should help to increase the value of the amenities the arena
provides. The arena should be located at an entry point to the
downtown area so on the drive to work in downtown you go right past
the arena district. If possible the arena should be linked to other
amenities in the areas so that the sporting event is one of many
entertainment/enjoyment activities.Figure 3 provides a map of the
arena development site. The proposed new arena site is outlined in
green. The arena is located on streets that are easily accessible
from the Interstate and have one of the highest traffic flows in
the city. See traffic count map in the Appendix. It will also be
viewed by commuters and tourists coming to downtown McKinley
Avenue. The arena is also within walking distance of many existing
amenities and areas of concentrated employment. Nearby amenities
include the UWM Arena, Milwaukee Theater, the Milwaukee Public
Museum, the Marcus Theater for Performing Arts, the river itself
and the expanding river walk. This will provide visitors with a
wide variety of amenities to enjoy for a wide variety household
types art/artistic oriented households, families with young and
teenage children, as well as younger and older adults. The location
is also within walking distance of existing and developing
employment zones, such as the Schlitz Park Business Campus, Pabst
Brewery Business Campus, Manpower, and the courthouse. Younger
college age students (Marquette University, Milwaukee Area
Technical College, and the Milwaukee School of Engineering) are
also within walking distance to the arena site. Housing is also
within walking distance across the river. For example, Jackson
Street and the area around it, where substantial multifamily
development has been occurring, is 6 blocks from the arena. Figure
4 shows the restaurants and bars on Old World Third Street that can
be gathering places before and after games. Figure 5 shows the
location and the estimated number of stalls in each parking
lot/structure. In total, there are over 11,000 parking spots
available within walking distance for most events. Much of this
parking can be efficiently used used by commuters during daytime
Monday-Friday and used by event attendees in the evenings and
weekends. In summary, Figure 3 shows that the proposed arena
location has many of the required features for it to be a
successful part of a redevelopment plan.
Figure 3: Proposed Arena Site
Figure 4: Old World Third Street
Figure 5: Existing Parking
A key feature for a successful arena is for it to be part of a
larger redevelopment plan. Figure 6 provides a look at the
contemplated development plan, as provided by the Milwaukee Bucks,
for the district as a whole. The phases will be sequenced over
time. Phase I includes Blocks 1, 4, 7 and 8. Block 1 will be the
arena itself. Block 4 will be entertainment including retail,
restaurants and bars. Block 7 will include a parking structure that
is wrapped by office, residential, and retail uses. Block 8 is the
Bucks practice facility and an office building. As part of Phase I
Blocks 5 and 6 will be used as temporary surface lots. Phase 2 will
add office space, and retail on Block 2 with some grade surface
level retail along with more parking (housing is also being
considered). Block 3 will include additional entertainment-focused
retail and a 300 bed hotel. This phase deliberately provides the
sense of destination to the Arena District and provides ample
opportunity for customers to linger and for residents to use the
space for year-round entertainment. 1
Figure 6: Arena District Development Plan
Phase 3 will convert Blocks 5 and 6 from their surface lots to
mixed use development including retail, multifamily, office and
parking. The retail is planned to be a grocery store.The full Arena
District redevelopment plan includes over 320,000 square feet (sf)
of outdoor space, over 280,000 entertainment and retail space, over
780,000 sf multifamily apartments, a 300 bed hotel, over 256,000 sf
office space, and practice facility and over 2,900 parking spots.In
summary, the redevelopment plan includes most, if not all, of the
attributes associated with successful arena/sport centered
redevelopment efforts. If all phases are actually completed, it
will convert over 10.5 acres of unused land where the park east
freeway used to be into economic active land that is integrated
with the city and with the sports arena and its related
entertainment complex. Ample parking is provided without creating
any permanent surface level parking, assuming Phase 3 is completed.
The arena will be better integrated into the existing amenities,
places to work, and places to play, all of which are within walking
distance the arena.Estimates of Permanent Direct Employment: The
redevelopment plan summarized above includes a lot of new
buildings. It is possible to estimate the likely employment
associated with the new development as follows: Retail: Typical
retail space needs approximately 1 employee for each 425 sf of
space (Source: page 15 of
http://www.cityoforlando.net/city-planning/wp-content/uploads/sites/27/2014/06/GMP2013-2040Projections.pdf
and page 22 of
http://www.smgov.net/departments/PCD/agendas/Planning-Commission/2014/20140514/s2014051406aa.pdf
). Grocery space typically needs 1 employee for each 700 sf of
space (Source: page 446 of the pdf
http://www.uscis.gov/sites/default/files/U.S.CIS/About%20Us/Electronic%20Reading%20Room/EB-5%20Regional%20Centers%20-%20Static%20Files/Home_Paradise_Regional_Center.pdf).
In total there is a plan for 280,000 sf of retail. Approximately
70,000 sf of that total is for the grocer, while the remaining
210,000 is for general retail. Therefore, the total expected retail
employment is 594 employees (70,000/700 + 210,000/425).Practice
Facility: The Bucks practice facility currently has 55 employees
(players and support staff) and is planned to be similarly staffed
in the future. Apartments: The typical garden apartment has one
full time employee per 39 units (Source: page 36 of the pdf
http://www.naahq.org/sites/default/files/naa-documents/income-expenses-survey/2014-Income-Expenses-Summary.pdf
). The over 780,000 sf of multifamily housing includes an estimated
710 units. Therefore, the housing will require 18 full time
employees. Moreover, these apartments will require a concierge at
all times (3 full time employees per building for the 6 buildings).
The total anticipated employment for the proposed multifamily
apartments is 36 (18 + 18). Office: The amount of space that a
typical office worker needs has been declining over time. Estimates
range from about 150 sf of space per worker to 180 sf per worker.
For this analysis I will use 180 sf per worker, which is likely
higher than necessary (Source:
http://www.normmiller.net/wp-content/uploads/2014/04/Estimating_Office_Space_Requirements-Feb-17-2014.pdf
and
http://www.naiop.org/en/E-Library/Perspectives/Changes-in-Average-Square-Feet-per-Worker.aspx).
The total anticipated employment for the proposed office space is
1,422 jobs (256,000 sf / 180 sf per worker).The total estimated
long-term (non-construction) employment associated with the
development is 2,107 employees (594 retail +55 practice + 36
apartments + 1,422 office). This estimate excludes arena specific
employment.
ConclusionThe traditional competition between cities has changed
dramatically over time. In the 1800s most cities existed as a point
of trade where goods were shipped into the city and out again to
other cities both inside and outside the U.S. The critical
attribute for a successful city was being at a key cog of the
transportation network. The most valuable land was located as close
as possible to the physical location (rail or water port,
typically) where the goods were exported. Over time manufacturing
became the economic driver of many cities. The manufactured goods
again needed to be transported (exported) to other cities or other
countries. The widespread use of automobiles and trucks, along with
the interstate highway system, allowed cities to spread out and
become less dense as households and firms moved to the suburbs.
This change in transportation technology fundamentally changed the
optimal shape and density of cities. But even bigger changes were
introduced in the 1990s and 2000s as information and
telecommunication technology became a viable alternative to being
in an office. The goods and services being exported only needed a
computer and a quality connection to the internet. Workers were no
longer physically tied to downtown. Despite these technological
changes it turned out that people are more productive at work when
they are physically interacting with each other. So, firms began
focusing on innovative and collaborative office space to maximize
these productivity gains. Cities now must attract a sufficiently
large number of highly educated and collaborative households. If a
city fails to do so, it will be at a competitive disadvantage
because its workers will be less productive. In fact, many
companies are moving their offices from the suburbs into the cities
to attract just these types of workers. The jobs are following the
people, even if the people live in high cost urban locations. A
city can attract these workers with a wide variety and large number
of amenities in short, it must be a good place to live.Milwaukee
has an opportunity to focus on taking advantage of the amenities
that are in place today and adding new ones over time. Seemingly
simple things like the change in format of small public radio
station, 88.9 WYMS, in 2007 from Jazz and Polka music to an
eclectic adult alternative music format can have meaningful impacts
on a city. The station has helped spur a renaissance in the local
music scene, and raises hopes that Milwaukee might someday rival
musical centers such as Austin, Seattle and Nashville. Milwaukee
also has cultural and artistic institutions that you would
associated with larger cities (Milwaukee Art Museum, major league
professional sports in baseball and basketball, Summerfest,
etc).The Milwaukee Bucks have proposed to build a new arena and to
redevelop the vacant park east freeway land. The Arena District
redevelopment plan includes over 320,000 square feet (sf) of
outdoor space, over 280,000 sf of entertainment and retail space,
over 780,000 sf multifamily apartments, a 300 bed hotel, over
256,000 sf office space, a new sport arena, a practice facility for
the Bucks, and over 2,900 new parking spots. I estimate that all of
this development will bring with it approximately 2,100 permanent
(not- construction related) jobs to the city of Milwaukee. The
arena redevelopment plan meets all the basic requirements of
successful projects identified by the academic literature 1) the
arena is physically integrated with the surrounding area, 2) there
are only a limited number of or no new surface parking lots, and 3)
the arena needs to close to other amenities, jobs and housing.In
conclusion, the Arena District redevelopment plan provides an
opportunity to develop underutilized land that has been an eyesore
for a decade and to provide an important and valued amenity that
helps Milwaukee compete for a creative workforce to attract future
companies to the region.
Appendix: Traffic Counts
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