Tale of Two Cities

June 1, 2016

Suburban sprawl, the mantra of the second half of the twentieth century, appears to be gasping its last breaths as baby boomers and Millennials alike are seeking cities providing walkability as part of a multi-modal plan in residential, commercial and entertainment districts. Known in the municipal planning field as New Urbanism, it is a process which promotes walkable communities with a mix of housing, businesses and retail establishments while focusing also on local history and ecology. Embraced locally in the 1990s and 2000s, the process continues today to be the dominant trend in urban design, and one that has helped the downtown areas of Birmingham and Rochester continue to flourish, each in its unique way.

At first look, the downtown areas of Birmingham and Rochester couldn't appear more different, with one a mini-city and the other a homey town, but a closer look shows there are as many similarities linking the two municipalities as there are differences that make each a vital and unique part of the communities where they are located.

Separated by just 17 miles, each city provides a walkable downtown experience for its residents and surrounding communities. With hundreds of thriving businesses in each downtown and two of the highest business occupancy rates of any community in the state, both Birmingham and Rochester seem to have found success.

"It is going exceptionally well. Extraordinarily well because as it happens, people have the feeling that it has always been there, but it hasn't in fact," said Andres Duany, an urban planner from Miami, and mastermind of Birmingham's 2016 Master Plan, which has guided downtown planning in the city for the past two decades.

A renowned architect, Duany is one of the founders of the Congress for the New Urbanism. As the organizing body for New Urbanism, it advocates for the restructuring of public policy and development practices to support neighborhoods that are diverse in use and population; communities that are designed for pedestrians, as well as transit and cars; physically defined and accessible public spaces and community institutions; and urban places framed by architecture and landscape that celebrate local history, climate, ecology and building practices.

As one of the pioneers of New Urbanism, city leaders in Birmingham hired Duany, along with other firms, to assist with a 20-year plan for developing the community's downtown. Released in 1996, the plan was updated in 2014 when Duany returned to Birmingham to weigh in on the city's progress. 

"Credit needs to be given for three things," he said. "First, it's a wealthy community, and that always helps. Two, there is fantastic political and cultural leadership. Three, the parking garages existed prior to our coming. That made things an awful lot easier."

Today, Birmingham is home to more than 600 businesses, drawing more than five million visitors each year, not including those that work in the downtown area. There is more than 3.5 million square feet of retail and office space, with a retail occupancy rate of about 98 percent.

It's somewhat ironic that one of the major challenges to developing walkable downtown communities remains the key to the area's affluence – the automobile. In this case, where to park it.

"In a community that doesn't have the means to keep restaurants and shops open, that doesn't have a tax base to build parking garages, it would be a different strategy,” Duany said. "It's a very privileged place."

Parking, specifically for those who work in the city during the day, continues to be a challenge for Birmingham, as well as downtown Rochester. Also boasting an occupancy rate of about 98 percent, downtown Rochester is home to about 450 businesses, including roughly 225 retail shops, restaurants and salons. Along with special events throughout the year, the downtown draws in more than one million people each year. To accommodate parking in the downtown area, the city developed two downtown parking decks in 2015 at a cost of about $12 million, providing 555 new parking spots. 

"During the day, there is more than enough parking," said Nik Banda, deputy city manager and director of economic development for the city of Rochester. "On the weekend, it's just about right. It was built more for that, and we should be good for at least five years."

However, some workers downtown say the cost of parking in the downtown area for an entire day is an expense some can't afford.

Claudette DiFelice, who works at The Urban Merchant, 314 S. Main Street, in Rochester, said the business moved to downtown from Romeo in June of 2015 because many of the store's customers were from the Rochester area. While business has been good at the new location, she said parking passes must be renewed every three months, and can be costly. Meanwhile an employee at The Home Bakery, 300 S. Main Street, discussed the parking situation with a customer on a spring morning.

"It's hard for people who work downtown, part-time, to afford parking," she said.

In Birmingham, success has caused a parking crisis, with some larger businesses located downtown having difficulty securing passes for their employees to utilize the city's parking structures, said planning commissioner Robin Boyle, who is a professor of urban planning at Wayne State University.

"We have some challenges. The first is one that we have been dealing with for a long time and it doesn't want to go away. That's the parking challenge," Boyle said. "Birmingham is blessed with having five parking decks, and many are filled. It's extremely difficult.

"One challenge is that office and commercial businesses want to secure monthly passes for employees and they aren't able to get them. And retailers are concerned with so much on-street parking that customers can't find parking adjacent to the shops. There's still some reluctance from shoppers going to the decks, and they hunt for parking and it increases congestion on the streets."

Birmingham has about 684 businesses located in its central business district, with about 323 retail locations, including some 59 restaurants and 58 salons and/or spas. In total, the city has about 1.5 million square feet of first-floor retail space in the downtown. However, it's the 2.2 million square feet of office space that helps differentiate Birmingham's downtown from Rochester and others throughout suburban Oakland County. 

"That's quite a bit, and it's unique for a (suburban) downtown to have that much," said John Heiney, executive director of the Birmingham Shopping District (BSD). "McCann came in 2006 from Troy. They wanted a downtown experience. That has been a big trend, especially with advertising agencies and creative endeavors. And that does work together to support restaurants."

As one of the largest employers downtown, McCann World Group employees about 750 employees. Of the total office space in the city, about 90 percent is occupied. Major employers in Birmingham include Google, Clark Hill law firm, Universal McCann, Munder Capital Management and other law, financial, architectural and advertising firms, growing the downtown's daytime population to nearly 14,000.

While Heiney said the BSD has a seat at the table when it comes to parking, overall, the issue is headed up by the city's engineer.

"With the influx of office, we have had a strain on the parking system, and the city is looking into that," Heiney said. "The BSD has been doing valet parking on the street during road construction, but the city has plans for long-term parking expansion. They are looking at expanding the North Old Woodward structure, behind the Google building."

Birmingham's Shopping District, formerly called the Principal Shopping District (PSD), was created in 1992 as the first of its kind in the state. The formation of the PSD authorized the development or redevelopment of principal shopping districts and business improvement districts in Michigan. They are permitted in a local municipality with a master plan that includes an urban design plan designating a principle shopping district. The city formed its shopping district after several years of a few merchants working, and paying, for events to bring shoppers into the city.

Leveraging a special assessment on business owners in the downtown area, the BSD collects about $875,000 in assessments each year to market the downtown and promote numerous special events. The BSD also receives about $125,000 in sponsorships and fees each year. It conducts some maintenance and improvement programs for the downtown, including providing lavish floral displays in the downtown area, with major infrastructure improvements and projects handled by the city.

The assessment to businesses, which is in addition to standard property taxes, are done on a four-tier system, with first floor retail locations paying the highest rate, of about 49 cents per square foot, charged on an annual basis to landlords who pay pass it through to their tenants. On the lower side of the assessment are upper floor businesses located outside the central business district, which pay about 9 cents per square foot.

"If you have a commercial space in the boundaries, then you're assessed," Heiney said. "There is no opt out or choice. If you're in the district, you pay the assessment."

In return, the BSD focuses on marketing, special events, business development and maintenance.

"We haven't done large projects," Heiney said. "We do the flower baskets and we do sidewalk snow removal in the district. We have an agreement with the city to do basic street cleaning and public trash receptacles. Those are some of the improvements."

The BSD assessments also follow development ordinances, which regulate retail shops, restaurants and salons to first floor uses, while services such as real estate, attorneys offices, advertising companies, and other uses not reliant on foot traffic to use higher floors. However, what constitutes as "retail" is often stretched.

"It's a work in progress," said Birmingham commissioner Stuart Sherman. "We want to encourage first floor retail. It enhances the walkability of the downtown and the interest. It's not real interesting to walk by an office."

In terms of marketing, the main functions of the BSD focuses on three major advertising campaigns each year, focused on print, some television and broadcast spots over the holiday season, as well as a great deal of online advertising.

However, the BSD's retail leasing program, which started in 2009, is unique and has been one of the keys to facilitating new business downtown.

"When Jacobsen's left their 100,000 square-foot buildings in 2002, the retail was really impacted, and national retailers all started to pull out. Vacancy was on the rise," Heiney said. "By 2007, we had a concerted effort to identify retailers that make sense for Birmingham and to actively recruit them."

Heiney said market research shows that those who do shop in Birmingham tend to be from the area and surrounding communities. The typical shopper is a female, over 40 years old, with an income of $150,000 per year or more.

"It's a high-income demographic, but we draw from dozens of zip codes throughout metro Detroit," he said. "We have strong dining, salons and spas, which typically draws people from farther away."

Retail consultant Julie Fielder was brought in by the Birmingham BSD in 2009 to recruit new businesses. However, prior to recruiting new tenants, she said the BSD looked at the existing mix of local businesses, which include Tender, Linda Dresner, Lark, Shades, and numerous jewelers, in the downtown area and asked what would strengthen the area. It was then, she said, that they decided to bring in more national retailers which could add appeal to the city's customer base.

"With that, everybody — all the existing retailers — do well," she said. "When you bring in stores that appeal to the trade area, and you have more customers and more repeat visits, then you get more traffic in the downtown area and everyone does well."

Still, Fielder said there is no intention to compete with indoor malls for tenants.

"My background was 25 years in the mall leasing business, so I understand the differences," she said. "We have our own attributes. What we are doing is getting our message out there about what a great community Birmingham is. It's completely different than an enclosed shopping district."

The process, which started in about 2011, resulted in bringing in Paper Source and J. McLaughlin, which Fielder said have both been successful. In 2012, the PSD brought in Lululemon and Francesca's. More recently, Blue Mercury, Alex and Ani, West Elm and Sara Campbell have opened locations downtown. Local shoe store Sundance will open in July.

"There isn't a lot of space available in Birmingham, so we have to coordinate the space that is available with tenants who are looking to come into the downtown area," Fielder said. "That doesn't allow for more than a couple a year, but we feel those stores we bring in do add something more."

Rochester's Principal Shopping District was created in 1996 as a tool to provide funding for marketing initiatives, which collects about $244,000 each year in assessments, ranging from 14 cents per square foot to 23 cents per square foot, on an annual basis. Additionally, the PSD receives a $150,000 contribution from the Rochester Downtown Development Authority (DDA), which is focused on addressing capital improvements. The PSD also receives about $290,000 annually from sponsorships and fees.

Rochester's PSD hosts about 100 event days throughout the year, including the city's Fire and Ice Festival; Farmer's Market; Deck Art; The Big, Bright Light Show and other events. Promotional and marketing efforts include publishing In Town magazine, the PSD's website and downtown business directory; funding social media efforts; and other promotions.

Birmingham, unlike Rochester, has no Downtown Development Authority, which is typically focused on the development or redevelopment of the brick and mortar portion of a downtown.

Rochester DDA Director Kristi Trevarrow, said Rochester's downtown has a unique family-oriented feel with a mix of mostly independent businesses. 

Trevarrow said marketing focuses on local residents and surrounding communities that don't necessarily have a downtown.

"In terms of our target, we made the decision a couple years ago — we see Rochester as a regional downtown," Trevarrow said. "When we looked at surveys and research, we pull strongly from surrounding communities, so we feel because they don't have downtowns, we feel we are their downtown.”

Rochester Hills resident John Halsey said he considers Rochester his downtown, despite living in the adjacent community.

"I like the family feel and activities, and there is lots of history," he said while accompanying his second grade daughter on a field trip hosted by the city's historical society throughout downtown. "When I was younger, we used to go out to Royal Oak and party, but when you get older, you want something you can do with the whole family."

"We are a family downtown," Trevarrow said. "We choose events that have wide appeal. You would never feel uncomfortable there. As a general matter, once I get them to Rochester once, they will be back. If we can introduce young kids early on, they will come back and be supporters of our district, and maybe even be our future entrepreneurs."

Formed in 1982, Rochester's DDA utilizes a tax increment financing mechanism to fund DDA projects inside its boundaries. From 2004 to 2014, the city's DDA collected about $20.3 million in taxes in the DDA district. Major projects included a Main Street makeover in 2012, which included a partnership with the Michigan Department of Transportation to rebuild the road and streetscape. Last year, the DDA constructed its second parking platform, with the city contributing about $12 million toward the structures. 

By contrast, major infrastructure project in Birmingham are headed up by the city, said Birmingham City Manager Joe Valentine.

"Sections of the downtown are planned for infrastructure improvements over the next few years," he said. "Given its age and usefulness, it will be similar to Rochester's (Main Street improvement). Birmingham is in the same situation, and will have to do the same thing in the next few years."

Rochester's Principal Shopping District was formed out of the city's Downtown Development Authority in 1996 as a tool to provide funding for marketing initiatives.

Trevarrow said she believes the downtown area is important to residents because it helps to create memories for people living there.

"If people have a place they are proud of and they call it home and make memories, that gives them a strong foundation in their life," she said. "So many people don't have that special place."

For Rochester, those special places downtown are mostly independent stores. Birmingham has made efforts in recent years to attract national retailers to the city at the same time it is working with its independent merchants. Trevarrow said Rochester is focused on unique businesses.

"There is nothing wrong with national businesses, but if you fill the downtown with only national chains, then what makes your downtown any different than other ones?" she said. "We have never pursued national chains, and that's not what we are looking for. It doesn't speak to our local character, and that's not what people here are looking for. There are a ton of chains surrounding us.

"If you're actively pursuing people, why pursue those that you can find five miles away?” Trevarrow continued. “The businesses have stories as to why they wanted to open a business here. You don't find that with national chains, and you don't get the same buy in because they have so many channels that they have to go through for participation in events."

Rochester deputy city manager and director of economic development Nik Banda said he works with potential clients to make sure they are a good fit for the city. In doing so, he said, the city's downtown success speaks for itself. However, that doesn't mean every business will do well in the area.

"We protect our brand by protecting their future. If they can't make it, we did something wrong," he said. 

An example, he said, was a fish and chip business that relocated to Rochester from Macomb Township. While the business was doing well on Ryan Road, Banda said he told the owner he had doubts about success in Rochester.

"He served up great food in minutes, and people poured in the parking lot and left," he said. "But, I said if you go on Main Street, you won't have parking. They aren't going to pop in and drive around to park, and get flash-fried food downtown. You won't have the same volume of people coming in on their way home from work."

Banda said the business owner decided to proceed with the move in spite of the warnings. Within eight weeks, the business was closed.

"We were bummed for him," Banda said. "The good news is that we have the pulse from the community. We can't make anyone not go in, but the landlords vet out who they want and who can pay. When they become part of the Rochester family quickly, and they put an effort forward, it's going to work."

Regardless of marketing efforts, much of the character and success of local downtowns revert back to the planning and will of the local government. Looking back to the start of Birmingham's 2016 plan, Birmingham mayor pro tem and urban planner Mark Nickita said putting forth the best possible plan and implementing it was the key to Birmingham's downtown success.

"The general thinking was that we have a lot of great assets, and it has been established for years as a regional downtown of importance," he said. "The city developed a plan of a downtown for the future, and where we would like to see it. It's a community embraced plan saying 'this is what we want 20 years from now.' There were lots of specifics in there.

"As with anything, there's not one thing, but overall, there were a number of factors. One key was that the plan was widely embraced by the community and clear to the leaders of the city and those that would implement it, and clear to the community, the developers and those in the private sector. There isn't a day in planning that the 2016 plan doesn't come up."

While undertaking a longterm plan and implementing it in Birmingham has been successful, it's now time for a new longterm planning process in Rochester, which is currently underway.

In April, the city hosted a downtown "visioning session," with the DDA and consultant Ron Drake, a nationally recognized planner who focuses on downtowns.

"I was really impressed with the amount of people who attended," Drake said of the crowd of more than 100 people involved in the visioning session. "There seemed to be a buzz in the room about what was going to happen."

Participants were encouraged to come up with a bucket list of what they would like to see in the downtown district in the future, should money not be an issue. Then, instead of saying why ideas won't work, the results will be compiled and published in a report to assist with planning.

"By the time they finished, there was a vibe in the room that felt like something I haven't seen in many places. A camaraderie," he said. “There were so many community leaders and concerned citizens involved who were all in the same room and had a similar direction."

While Drake couldn't say which ideas appeared to be the predominant visions for the future of downtown, he said he believes there will be much agreement.

"There will be a large number of people who agree with the top 10 ideas they came up with because there was such a unity in the group," he said. "I think that will continue as they see the list." ­

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