Rethinking the cities for Millennials, Baby Boomers
For most urban areas, in the question of the chicken or the egg, it's clear which came first. The metropolis developed from a mature downtown core with neighborhoods surrounding it, and then smaller cities were incorporated as suburban areas that grew over decades. In southeastern Michigan, that's how it happened, too.
In 1920, Detroit was the fourth largest city in the United States, after New York, Chicago and Philadelphia, due to the booming automobile industry, and later, the addition of Prohibition, as the Detroit River was a major conduit for liquor smuggling throughout the U.S.
Detroit experienced growing pains through racial conflict and discrimination which followed rapid demographic changes, as hundreds of thousands of new southern workers, including many African Americans, came north to work in auto factories during the mid-20th century, as well as significant immigration of southern and Eastern Europeans, which led to segregated neighborhoods. In the 1940s and 1950s, freeways split Detroit neighborhoods, and the suburbs began to burgeon and grow, led by “white flight. “By the 1970s and '80s, Detroit was a city rapidly in decline, which seemed to hit rock bottom with the (former mayor) Kwame Kilpatrick scandal in 2008.
Then, in the midst of the Great Recession, surprisingly, Detroit began to rise again. Spearheaded by mortgage baron Dan Gilbert, who initially brought 1,700 Quicken employees from Livonia to downtown in 2010, he also started buying numerous buildings in the center core. Today, his business empire includes approximately 20,000 employees in the city's heart. Many of those employees are young, college-educated, and seeking an urban lifestyle experience. Where once they lived – and would have worked – in suburbia, they are now living, working, dining and playing in the city their ancestors fled. It's a hipster hangout, and Detroit is suddenly hot and desirable. The Lonely Planet named Detroit number two in the “Best in Travel 2018.”
The Detroit resurgence is providing a challenge to suburban communities to either reinvent themselves, or stagnate.
“There are so many things motivating them to rethink how they've lived in the metro area for 30 years,” said architect and urbanist Mark Nickita, principal at Archive DS and a city commissioner in Birmingham. “Detroit's rise is coming from millennials and baby boomers who are demanding a lot of different things. There is a demand for authentic urban experiences – for walkable places, which Detroit and Birmingham are. There's also the full cultural experience in Detroit – all four sports teams are now down there, there's the opera (Michigan Opera Theater), symphony (Detroit Symphony Orchestra), Detroit Institute of Arts, Detroit Historical Museum, science center (Michigan Science Center), and now they're talking about an aquarium focused on the riverfront. There is nothing like being in a big city, in the core. It's what draws people to Chicago.
“This is a new synergy in the region, and it's driven by two fundamental demographics,” Nickita continued. “Boomers are increasingly finding urban areas are where they want to be. They've lived their suburban lives, and now are spending weekends downtown. They're taking advantage of the city for the first time. And then there are millennials. They're all-in. They want to live in the center city, hang out, take advantage of all it has to offer, to take transit, ride bikes. They have the opportunity to do what they've done in other cities.
“And it's growing like wildfire. It's not a ‘will come.’ It's come,” Nickita said.
Robert Gibbs, an urban planner and retail consultant who is president of Gibbs Planning Group in Birmingham, agreed. “Twenty-somethings and fifty-somethings both want the same things,” he noted. “They want to walk to coffee shops and restaurants, and to live in a walkable environment, to walk to schools, libraries, offices, parks, and to see friends.”
Gibbs has helped spearhead numerous reinvented urban communities around the country, including for Birmingham, along with noted urbanist Andrés Duany of Miami, with Birmingham's 2016 Plan, which helped to envision a walkable city where residents and businesses could coexist, with the maxim of “work, live and play.” He and Duany were recently asked by the city of Birmingham to respond to a new request for proposal (RFP) for a new master plan proposal, the first for the entire city since 1980, and they have begun the process, which is due June 1. He is also involved with Troy Town Center, an effort by the city of Troy to create a walkable town center where their municipal complex currently is on Big Beaver Road near I-75. While forward thinking and desirable, according to acting Troy city manager Mark Miller, it is currently in a holding pattern.
“It was going a little fast for our residents,” Miller said, who said the goal given to Gibbs was to create a mixed use town center with alternate housing.
“We hear from a lot of our residents that there's not a lot of new housing for them when they want to sell their homes and downsize,” Miller said. “For baby boomers, everything is really more expensive than they want.”
Troy, along with Royal Oak, Birmingham and Rochester, are examples of Oakland County communities actively reinventing and recreating in the advent of Detroit's rise. For some communities, like Birmingham, the effort at reinvention has been ongoing for decades. Others, like Rochester, began in 2012, when city leaders recognized stagnation was the alternative. Royal Oak came to confront the realization that a city defined by its nightlife cannot survive in the long run nor stabilize its neighborhoods, and recognizing its inherent potential, made a concerted effort to go after office development, believing it will fortify its retail base as well. Troy, an example of post-World War II suburbia, like several other suburban communities, is at a sink-or-swim moment in time.
“The suburban areas that continue to just have large lots will become functionally obsolete,” Gibbs prognosticated. “However, inner ring suburbs will stay vital and popular. These smaller urban areas need to continue.”
Gibbs said that studies he's seen show that suburban areas, those with subdivisions with homes with larger lots and strip centers, perhaps office buildings, and little else, “will decline about 20 to 30 percent by 2030, and walkable communities will go up by 30 percent. It may be the biggest change in real estate.”
Another is a demand for rental properties for the same demographics – which not all communities are responding to, nor permitting, Gibbs said.
“I just saw a study from the Urban Institute in Washington D.C., that found that Oakland County will find itself with a shortage of 70,000 apartments by 2025,” he said. “What's odd is it is illegal to build apartments in most communities north of Royal Oak – so it's illegal to build what is wanted in these communities. They'll need to change their zoning.”
Or watch residents – and potential residents – flee elsewhere.
His company is seeing requests by numerous suburban communities to have urban plans developed for them for walkable town centers, to have zoning rewritten to recreate their densities, as they have done for Troy.
“We just did one for (the city of) Warren and for Westland, and we're talking to five others in Oakland County to create walkable town centers,” Gibbs said.
“When we plan a walkable community, we plan that you can have three or four housing cycles,” he said of the variety of housing unit styles a successful town center should offer. “You can have your first condo through your family house to senior housing – so you don't have to leave the community, and your friends and family.”
“There's a general interest in town centers, in a walkable context, just as there is a demand for traditional downtowns,” Nickita noted, with his firm currently working with Sterling Heights on a new master plan and the Lakeside Mall property to change its zoning from retail to mixed uses, to look into a town center as retail uses change.
“Troy, and the other post-war car-oriented suburban sprawl newer communities, these non-traditional communities were designed with wider streets, bigger blocks and separation of uses, none of which work together,” Nickita said. “They were zoned to be separate. You can't put an office near a store or a residence. It wasn't part of the zoning at that time. Now, Troy, Southfield, Novi, Warren, Sterling Heights, they're all thinking about how to become more pedestrian and people-oriented rather than car-oriented – more mixed-use, and more interactive.
“These communities are recognizing that they weren't built for these uses, and they're looking to be attractive for this changing demographic,” Nickita pointed out.
Troy, known to many for its retail behemoth Somerset Collection, has a residential population of about 84,000 people, and for many years had a vibrant office and industrial market.
“We did a Big Beaver corridor study in 2006, and what was apparent, with the exception of Somerset, it was an office building corridor,” said Troy's Miller, of a corridor study of the city which was completed in 2008, as the Great Recession was beginning.
Kmart's corporate headquarters had been at the corner of Big Beaver and Coolidge, but closed well over a decade ago, in 2005 or 2006, Miller said. In addition, further commercial space became available as General Motors left, along with numerous automotive suppliers.
“All the suppliers left – they didn't have to be here,” he said. “It became apparent we had way too many empty buildings – with office vacancies of about 40 percent.”
He said their Downtown Development Authority did a Quality Development Initiative (QDI) to ascertain appropriate mixed uses, and recommended building lower rise buildings in parking lots to counter empty parking lot space and stormwater retention. Office vacancies are now at about 16 percent.
Today, there are about 24 global subsidiaries in the city of Troy, “foreign-based companies from all over the world. We're competing for these in the office market, not with Detroit, but with Auburn Hills, Novi/Plymouth, Ann Arbor and Southfield,” Miller said. “We're centrally located by I-75.”
On the Maple Road corridor, he said, “We've allowed a lot more land uses, except single family. There's more industrial, and it's almost at full occupancy now. We still want a brew pub in the industrial area – we've always envisioned someone taking over an underutilized space and building something from scratch, something organic. There's a ton of restaurants there.”
However, they also saw that without a traditional downtown, and with Detroit a competitor for jobs, office space and residents “for the first time in a long time,” they sought to create a mixed use town center with alternate housing.
“We don't have anywhere for young people to live. We're trying to make it all walkable, to encourage the mixed use developments, with retail, office and apartments all in one space, to encourage apartments that they would want to live in,” Miller said.
As for the suburban sprawl of strip centers, Miller acknowledges, “the die is cast. It would be hard to change that. But we're trying to humanize the new ones, to build them closer to roads, to add bicycle racks and put more parking in the rear of stores.”
Rochester, a mature city that was first settled in 1817, with the Village of Rochester first formed in 1869, and a city in 1967. The city became an industrial center in the 19th century using the abundant water power of the Paint Creek and Clinton River. Over time, industries like a refinery for a sugar beets, a paper products company and the Western Knitting Mills factory closed or moved on, and the city became a pastoral, bucolic suburban area of 13,000 residents with a lovely Main Street.
In 2012, city leaders began the work of morphing from a sleepy town to a vibrant city. The first step was redesigning that Main Street, complete with road work that narrowed the street, adding bump outs and cross walks and recreating the streetscape, as well as adding two new parking structures. Their website now boasts, “A perfect mix of historic and hip, downtown Rochester attracts both local residents and visitors from across the state of Michigan. Downtown Rochester is home to more than 350 shops, salons, restaurants and professional service businesses; 85 percent of which are independent merchants. Downtown Rochester’s natural beauty is attributed to the waterways that surround the city and the abundant green space that three parks and two winding trails offer.”
Kristi Trevarrow, executive director for Rochester's Downtown Development Authority (DDA), said, “When we came out of the makeover in 2012, at that time, everyone said we would die. But everyone also said we want our downtown to survive.
“We lost a net of two merchants,” she said proudly. “We had some businesses open during construction, while some closed. It usually takes six months to a year for people to start coming back after a big construction project. We had already had a long construction project, and we said, we can’t wait that long. We finished (the road construction) one week before Lagniappe (a downtown Rochester Christmas festival meaning 'a little something extra), followed up with the Big Bright Light Show, and we had the biggest crowd we ever had.
“And we saw the trends continue right through '13.”
Trevarrow acknowledges it wasn't a fluke, but partially attributable to hard work on the part of the DDA. “We were out there every day talking to people about the construction, downtown and our events,” she said. “People said we remembered how much we love downtown, and we want to support it.”
Since 2013, downtown Rochester has maintained a retail occupancy rate of 97 percent.
A city known for its festivals and events, Trevarrow said she and her staff are constantly looking to reinvent and redo those events, as well as working with businesses and retailers on what interests them and how to help them be better businesses.
“We're big on retail retention. We're teaching them social media, marketing,” she said. “We're all in business together in our downtown, and we run our DDA like a business.”
In the last few years, development has followed the remade downtown, with the latest, a planned senior housing development, proposed for across from the Royal Park Hotel. To help it avoid growing pains, the city enlisted McKenna Associates to create Sustainable Rochester, a planning and development document, the result of a $53,000 project, which was accepted by the city council in April to guide the city as it grows. It is intended to be a toolkit to assist city staff, elected officials, decision makers and developers on any and all aspects of developing in Rochester, from environmental impact, mobility, fiscal strength, neighborhoods, downtown viability, and public services. Projects are scored on how well they do – or don't do – in order to help steer appropriate evaluations.
Royal Oak is working to reinvent itself as well, in light of the resurgence of Detroit. While Royal Oak was first incorporated as a village in 1891, it became a city in 1921 and grew quickly due to its proximity to Detroit. A city with a strong neighborhood base and a population of approximately 58,000, its downtown lost its way in the 1990s and 2000s, as it became known for its nightlife, restaurants and bars.
“For at least 30 years, it's been a great place after 5, but not from 9 to 5,” said Royal Oak Economic Development Manager Todd Fenton. “That's the opposite of a lot of cities.”
In 2012, city staff put together a downtown task force comprised of members of the community, community leaders, property owners and other interested parties, and said, “How do we create a blueprint for people in Royal Oak? How do we bolster retail efforts? We were adamant that we want Royal Oak to be an unparalleled place for eclectic shops and boutiques,” Fenton said.
The task force came to the conclusion that first they needed to create a daytime population, which would then ultimately shop and dine in the downtown, and to accomplish that, they should take unused or lesser used downtown property and create an incentive to developers to build Class A office buildings – a minimum of 180,000 square feet of Class A office space, which would bring in 1,000 new office workers each day into downtown Royal Oak.
Fenton was hired in 2014 with the job of taking that concept and turning it into a creative reality, which has been branded Rethink Royal Oak.
“I was tasked with how do we implement that need to build up the daytime population, and where do we put them?” he said.
He said he spent most of 2014 doing an inventory of all of the city-owned parking, notably of the surface lots, and identifying which of those would be great for building upon as office buildings.
“I published that and took it to brokers and anyone I could get it in front of – 'would you consider developing in our city?'” Fenton asked. “I went to Oakland County, national groups, even the International Council of Shopping Centers (ICSC) group. We found a lot of interest in doing projects in the city, and then figured out where to have people park – because we also wanted to have one-to-one parking replacement.”
Fenton said at that point, Royal Oak's main concern was creating access, not revenues, in an effort to create an accessible downtown for people to utilize.
Doug Etkin, principal of Etkin Real Estate Solutions, was the first to bite, snatching up the city-owned parking lot at 11 Mile and Center streets, at 150 W. Second Street, across from the Royal Oak Post Office, for a 74,000 square foot luxury office building that will be completed in late May/early June. The four-story building, which Etkin will move his company into as well, is completely leased and will bring approximately 350 people into the city every day.
“Royal Oak is the recipient of the new confidence that downtown Detroit has brought,” Etkin said. “Royal Oak has walkable urbanity, good parking at reasonable prices, has been of interest to firms that have to compete for staff members, and is a desirable alternative to Detroit.”
Etkin said they wanted to build a high-quality building in an area that wasn't as developed.
“We were the first company to come in under their new plan, to increase daytime density in a surface parking lot,” he said of the purchase of the surface lot. “We have the ability to park people during the day at reasonable rates, and we leased up so quickly because of the (parking) structure kiddy corner across.”
Unlike in Birmingham and Ann Arbor, at the current time, despite wanting to increase pedestrian traffic through office tenancy, Royal Oak is not requiring office buildings to have first floor retail space.
“We did not make a requirement for first floor retail, but said it was a preference,” Fenton said. “We knew we needed to get office workers in first. It would have been difficult to prioritize on retail without the numbers to support them.”
Etkin counters that his building is not on a main street. “Urban planning is best served when Main Street offers retail,” he said. “There are streets that serve (main) access, and others that offer ancillary services.”
Now, with close to 300,000 square feet of office space being built or committed, Fenton said the next round of buildings will likely be required to have first floor retail space. “Usually, office and national retail go hand-in-hand,” he said. “We want to focus and maintain our mom and pops, but a few nationals are good, too.”
The latest groundbreaking in the city will truly transform the downtown with a re-envisioned center square, as a public/private partnership between the city and Lansing-based Boji Group that will create a new municipal center, police station, six-story office building and a new public downtown park.
Located on the site of the city's current city hall, the new city center will be anchored by a new six-story building located in the parking lot adjacent to the current city hall. As a tax incentive, the city sold the land for the building to the Boji Group, a 25-year development company with an expertise in private/public partnerships across Michigan, for $1, and is providing an incentive payment of $5.5 million.
It's not a no-brainer for Boji, who is taking a risk as well. Boji held their groundbreaking for their building, their part of the massive project on May 15, without the commitment of any tenants for the new office project. The city will break ground this summer on a new city hall to be located where the city's farmers market is currently. Where the existing city hall is, Fenton said, will become a new police station. Once the new buildings are completed, “we will demolish the old and create a new city park. We think it will be a fantastic amenity (for workers and residents).”
They are also replacing parking and adding an additional 581 spaces with a new parking structure.
“It is the largest project for the city of Royal Oak. It will be transformational,” Fenton said. He noted that the construction, combined with road and infrastructure improvements, will incur “short term pain, but with infrastructure as a whole, it's needed. We're communicating to businesses and residents as a whole that Royal Oak is open, they can navigate around the construction, and we're Rethinking Royal Oak. It's a city that is not just for food and bars anymore.”