At last month’s annual dinner hosted by HAP, Inc., Urban Strategy America Fund President Kirk Sykes gave a keynote address focused on his organization’s significant efforts in Boston. USA Fund is a development and redevelopment fund that targets areas of the city that might otherwise not receive investment—and allows those select investors to achieve "an effective return." During the talk, Sykes touched on how the ideas inherent in the projects he discussed might apply to Springfield.
As HAP’s executive director, Peter Gagliardi, introduced Sykes, he referenced the September week-long visit of a volunteer Urban Land Institute panel (Sykes is a member of the ULI-Boston District Council). "This engagement by the ULI was initiated by its Boston-based executive committee," Gagliardi said. "ULI itself is a national organization of development professionals who have a common bond: they care about the cities in which they live and work."
Incidentally, in an issue of this week’s Boston Globe, Gagliardi published an op-ed piece about reviving older industrial cities. This month he published a white paper, "Housing Programs in Weak Market Neighborhoods" (PDF).
"Kirk Sykes combines his professional training and hands-on experience in the areas of development, design, and construction," Gagliardi said, "to create customized responses to the complex issues of urban real estate development. His combination of business and community-based experience allow him to bridge competing concerns that sometimes block urban projects from moving forward. His specialty is the creation of urban mixed-use developments."
One of Sykes’s initial projects, the Dudley Street Neighborhood Initiative, gained eminent domain access to large tracts of vacant land in Boston, and was featured in Holding Ground, a PBS documentary. A second project, a 40-unit townhouse in Roxbury called Winthrop Estates, crystallized Sykes’s understanding of the opportunities and challenges in attracting families to the inner city, and keeping them there voluntarily.
Sykes talked about his brief tour of some Springfield neighborhoods during his visit, including Old Hill and the South End, finishing with a capuccino at La Fiorentina, "the high point of my day," he said. He added, "Transformation of urban transitional neighborhoods, whether they’re in Boston or Springfield, is the same around the world. Hopefully some of [my story] will resonate with you, and will speak to the commitment to your transformation of your city."
Older American cities are changing, Sykes said: they are now populated by a predominance of ethnic minorities. "African American, Hispanic, and Asian residents are defining the character in each of these cities," he began, resulting in the country’s "transformation to a majority of ethnic minorities within the next 50 years. I think you’re experiencing some of that now." Similarly, cities are seeing a return of older baby boomers. "These families left the cities after World War II, in search of better schools, more open space, fewer urban problems," Sykes said. "In some cases, they left to avoid the ethnic minorities that now comprise the majority of our city dwellers. Now baby boomers crave the institutions of higher education, culture, and the arts, that remain in the cities, and they’re returning. We want to bring back the middle class to Springfield, too, and that’s an opportunity that will hopefully continue to resonate."
"There is, however, a disparity in the needs and desires of each group," Sykes cautioned. "In order to make a city a place for everyone, these two groups now have to find common ground on issues of preservation, housing, education and safety. If these needs are not addressed, vitality and the future of the city will be at risk. That common ground can happen here in Springfield."
Sykes is likely quite right, but I wonder how many groups the city can target at once while still successfully meeting the needs of its current residents. It’s been said before that the city should actually be marketing to itself. But it also desperately seems to need a new infusion of both residents as well as a pool of investors who have what it takes to see through the right kinds of projects—whatever those may be.
"The density of America’s largest urban centers has created a demand for housing, jobs, and retail investment," he said. "I have created a fund that invests in this demand. Our investors believe that investing in the growth of their cities will be both profitable and reflective of their commitment to their markets."
Key areas of focus, Sykes said, include housing, job creation, retail, preserving versus developing open space, and learning how to engage a community in the development process.
Sykes claimed that the trend of upper management and professionals to relocate in cities, simply because suburbs are less affordable, is prompting more investment in the central cities. A need for stronger infrastructure to support the early edge of the trend stimulates yet further investment. While this may be true in larger cities, and Sykes’s point is well-taken, it is not necessarily a trend that benefits Springfield just yet. But it could.
In discussing retail investment potential, Sykes highlighted banks and grocery stores. "In the last ten years, banks have voluntarily expanded their presence in cities," he said, "due to the financial benefit they have received, and the loans and mortgages made to ethnic minorities. Supermarkets have recognized the demand for grocery stores in cities, and began developing smaller, neighborhood markets that carried standard products as well as ethnic foods tailored to the buying interests of a new class of shoppers. Traditional retailers have begun to recognize the demand for hard goods and services in urban areas, and are beginning to build more stores in the city."
Again, this is certainly true in larger cities, but in a city the size of Springfield—the small end of middle-range—is there a demand for grocery stores? Are there larger chains that will care to invest? Can their bottom line see a benefit? Are ethnic minorities taking advantage of mortgages and loans for projects that are targeted to benefit specific populations in the city?
Sykes next drew attention to the balance between urban land development and open space conservation, citing three examples in Boston: Olmsted Green, a $150 million, 500-unit housing and mixed-use development characterized as "formerly neglected open space" abutting Franklin Park; One Brigham Circle, a mixed-use development that involved a community development corporation, Mission Hill Neighborhood Housing Services, in generating support from nearby residents; and Parcel 24, development of a portion of land resulting from the Big Dig, which also involved a CDC, the Asian Community Development Corporation.
The One Brigham Circle project, Sykes said, now comprises a 20,000 square-foot Stop & Shop, two banks, two restaurants, a Walgreens, office space, and 350 covered parking spaces, as well as 5.5-acre Puddingstone Park. Sykes noted that conservation was an integrated part of the process.
Parcel 24, he said, is an attempt adjacent to the 30-acre Kennedy Greenway "to knit Boston back together after the previous elevated six-lane highway, built in the ’50s, claimed portions of neighborhoods without regard for streets, houses, or people. Not unlike the relationship between the downtown, the river, and the highway that runs along your neighborhoods, Parcel 24 is a reclaimed portion of Boston’s historical Chinatown," a small, eight-square-block area Sykes said is under significant development pressure. "In this case," he said, "the heritage of Chinatown was not sacrificed to preserve the restoration of the city."
"In all cases," Sykes continued, "the process is better when the community is involved and engaged in place-making and preservation. In the late ’60s and ’70s, the federal urban renewal program sought to change communities by assembling land for new development to replace frequently substandard housing in established neighborhoods. This process, like ones in New York, Washington, and other northeast cities, created a contentious relationship between communities, government and developers. Springfield can benefit with more partnerships with non-profits, like HAP’s. That’s clear."
Then Sykes described Crosstown Center, a mixed-use project that touches on four communities, "the Newmarket industrial area, the African-American neighborhood of Roxbury, the Hispanic and African-American communities of Lower Roxbury, and the rapidly gentrifying South End community. This may sound a lot like some of what’s going on in downtown Springfield: there’s a lot of different interests."
"The land was assembled, but few came to invest in this property," Sykes said. The Digital Equipment Corporation pioneered to the spot, but went out of business and "left an eight-acre, one-square-block hole in the community."
"In 1998, my partners and I approached the city of Boston to try and regain control of the DEC site," Sykes continued. "Our premise was that the prominent site would be a catalyst for change in the surrounding communities, by bringing jobs, services, and opportunities to a community that had few to buy it, if any. Our proposal was based on use of the great vitality of the area that was abandoned."
That proposal included a 175-room hotel, 50,000 square feet of retail space, 250,000 square feet of office space, and a medical facility. "In order to gain access to the site, which was in a federal empowerment zone," Sykes said, "we knew we would have to present a comprehensive construction and permanent employment program. Perhaps more important, we would have to attain support of the community—of the four surrounding communities, in fact."
"Our approach was quite simple: go to the community first," he said. "For the next two months, we met with 30 different community groups, and tried to find the common issues that people of different races, income levels, and business interests could agree on. Ultimately, we were able to agree that job creation, traffic, and transportation were the collective interests of this group." The Crosstown Council was born, a still-active community group that advises the developers on how Crosstown Center can be a "better neighbor."
"When completed a year from now," Sykes said, "it will be home to employees from two hospitals, one university, a national hotel chain, and several national retailers—all bringing in jobs and services for the surrounding community, with a minimum of impact on the surrounding neighborhoods."
"There was a sense that a lower-income ethnic community deserved everything that an established, more affluent community already had," Sykes reflected. "It was important to know that someone who looked like them, from their community, was undertaking the project. For all big economically-targeted investment is doing well by doing good. We at the USA Fund stand ready to help Springfield. We believe that the future of the cities is in providing all residents opportunities for a strong investment environment that will fuel urban vitality and growth."
