Great Inversion – But Not Monolithic Inversion

Alan Ehrenhalt’s latest book, “The Great Inversion,” is valuable reading for nearly anyone in my professional practices: In particular, private and public organizations involved in redevelopment and city building.

The author’s premise argues that the comparative value of proximity to core cities – their economic and cultural assets, diverse building stock, and ease of transit access – is rising. As that shift in value unfolds, says Ehrenhalt, many U.S. metro areas will invert, assuming a pattern where core city neighborhoods typically are among the most desired, while suburban areas offer values accessible to more residents.

Ehrenhalt writes a compelling narrative, observing dynamics that can be observed in cities across the country. In interviews he’s described the shift as “an entire metropolitan area rearranging itself…a true inversion of demographic groups.” Still, at times the premise does not allow full exploration of variation within regions. He stresses the importance of transit in reshaping regions, for example, but does not organize his argument to reflect how effective transit service can itself reshape the city/suburb relationship. If in one area of a metro, transit can move people from city to suburb (and vice versa) more effectively than in other areas, how might they invert differently? Job growth on a transit corridor, for example, may affect residents living elsewhere along that corridor, more than it does other residents living nearer by, even if it’s occurring within the same municipal boundary.

That caveat aside, it’s clear that fiscal scarcity, changing pricing caused by climate change (essentially unaddressed to date), shrinking households and shifting cultural attitudes about cities are converging powerfully to reshape metro areas, and increasingly channel investment toward the center. For public agencies and firms involved in redevelopment, such as Donjek clients, this return to a pattern based on proximity will produce a whole universe of new opportunities.

The news narrative around these issues is usually simplified in an unhelpful way (see this critique of coverage of recent demographic data released for the Minneapolis Saint Paul region), presenting these trends as “core cities up, suburbs down.” None of the ingredients here are so simple: The physical geography and amenities of regions, job location criteria, and the politics that shape transportation investments are just a few examples. Instead, shifts like the Great Inversion will create opportunities and troubles which are different than the recent past, but very familiar in history. Creativity is required for good redevelopment, now more so with these dramatic demographic shifts underway.

Intuition, Criterion for Your Next Project

Got intuition?

I work with parties involved in urban land use and redevelopment, ranging from public agencies to private developers and foundations. In some respects, this field, like many, become more analytical and data-driven. We break down components of location: Road, rail and transit access. Visibility. The quality of pedestrian environment. Hot zones. Proximity to vendors and customers. Market values and discretionary income in surrounding neighborhoods. Mix of adjacent land uses.
Recently, I called a client involved in commercial real estate investment for forty years and asked, what's in a location? How do you evaluate places for their potential? To be sure, he cited all the factors listed above and others. It didn't take long to move through these aspects of location, presented individually, understood to influence each other.

But afterward, the list exhausted, he had more to say. After the division of location into components, there was a remainder. An important one.

Intuition. Or is it thin slicing?

I recently read Malcolm Gladwell's book, Blink. The premise of the book is that we have an ability and tendency to evaluate others and situations on an immediate, subconscious level. Once we establish these "thin slices," in the author's lexicon, they guide (or misguide) us without much consultation from the thinking side. I'm left to wonder how much of my time has been spent residing in the analytic part of my mind, pretending I am in charge while the subconscious pulls all the levers.

On loan in the Donjek office space is an energetic pair of oil paintings created by a friend, whose artistic method for the works was to project an image on the canvas, paint based on the projection, project a different image, repeat. The outcome is a finished work thickly endowed with oil, drawing the eye and teasing the brain to interpret the combinations of strokes a hundred different ways.

Welcome to the places we're redeveloping.

The Urban Engine, or Trading Places Part 1


Welcome to the first in a short series of three posts inspired by three very different places.  I’ve spent today immersed in national and global issues thanks to the Federal Policy Forum hosted by the International Economic Development Council here in Washington, D.C. The second and third posts, as you’ll see, will address local development issues in a mid-size and small community.

Between the articles I read on the airplane, the content of the sessions and accessory conversations with other participants, I have notes on papers small and large hanging from folders and pockets and briefcase.  It’s all related to a notion I sketched out in a post about regional differentiation a few months ago, but I’d like to summarize a new line of inquiry related to the conference.

Bank of America CEO Ken Lewis and Pennsylvania Governor Edward Rendell have led an effort described in the publication of Retooling for Growth: Building a 21st Century Economy in America’s Older Industrial Areas (see a summary of the book here).  The content is unabashedly “metrocentric” in light of the following metrics outlined in a session today.  The nation’s largest one hundred metro areas:

• Use 12% of American land area;

• House and employ 65% of our population;

• Are home to 74% of college graduates;

• Generate 78% of patents; and

• Create 75% of gross domestic product.

In the words of Paul Brophy, a consultant who hatched the project, the metro areas are engines for economic, social, scientific and cultural development despite the increasingly conspicuous absence of a significant federal role or resources.  In particular, he says, to move the U.S. forward it is critical to harness and foster entrepreneurship, human capital, infrastructure and what he termed “quality of places” in our urban centers.  A few thoughts on the prospective form of such infrastructure and placemaking improvements:

• Establishment of a National Infrastructure Bank to provide coordinated, significant, long-term dollars for urban infrastructure reinvestment, with accountability measures in place for both the local and federal partners involved.

• Perhaps as part of or independent from the infrastructure bank, aggressively fund urban transportation networks, including transit.  Spendy, yes.  Essential to be competitive, definitely.  This month’s Urban Land magazine reports that the City of London’s Crossrail project will extend subterranean Underground lines at a cost of $30 billion.  The business community, in a testament to the project’s competitive potential, will fund much of the investment.

• Adoption of local, state and federal policy that recognizes the missed opportunity that vacant and polluted urban land represents, and enables its reuse as developed property or open space such as parks.

• Perhaps most germane to the Cents of Place forum, standardization of the development process and fundamental property tax reform is also in order.  In Minneapolis and St. Paul, Minnesota – contiguous and mutually dependent municipalities – zoning codes and the development process continue to remain estranged.  And, as documented by a property tax report I authored last year, the current property tax system stifles the concentration of tax base upon which the health of our urban areas (and the states that rely on them) will rise or fall.

• Adoption of at least a regional, and at best a statewide approach to subsidies that seek to attract businesses location.  This idea is hardly new:  See the Economic War Between the States report published by the Minneapolis Federal Reserve in 1994.

• Focus on retaining the talented people who arrive in your region from Bangalore or Missoula or Moscow, to pursue educational experience.  See the integrated approach Philadelphia has taken to housing, employing and engaging students before they graduate and leave.

Resolving these underlying finance and policy issues is a priority that simply can’t wait.

Still with me?  Then, dear reader, indulge yourself and browse over one other publication I encountered today:  The 2007 State New Economy Index compiled by the Kauffman Foundation.

Photo:  Musely, Flickr

Donjek Project: Reuse of Iconic Jacob Schmidt Brewery

Schmidt_army_arch_flickrThe iconic Jacob Schmidt Brewery sits on fifteen acres along the Mississippi River in Saint Paul, Minnesota. The history of brewing on the site can be traced to 1855, three years before statehood. The brewery’s role as a major employer, architectural landmark in the river valley, public source of coveted spring water and – of course – Schmidt beer – has assured its iconic place in the city’s cultural life and historic fabric.


The questions of adaptive reuse have for years been daunting, but a new joint ownership between developers Jeff and Craig Cohen and the Fort Road Federation (one of Saint Paul’s district councils) elevates both the profile and the potential for redevelopment in the near term.  Theirs is a mixed-use, multi-phase approach that aims to utilize the bottling house and the leviathan main brewing building, affectionately known as “the Castle.”

Donjek has been retained by the prospective new ownership group (known as “Brewtown”) to assist with project finance, and I am enthused to conduct feasibility analysis for a site of such economic, cultural and historic value to the city and its prospective owners.  While Schmidt and subsequently Minnesota Brewing eventually fell victim to the market pressures facing mid-size brewing operations, the site today has the potential to thrive as a creative, historic mixed-use redevelopment.  I look forward to keeping you posted as the project unfolds!

Photo:  ArmyArch/Flickr.