Retail Streetscape Redevelopment

Spring 2016
In Hackensack, New Jersey, a public-private partnership now known as the Main Street Business Alliance has been working for over a decade to renovate building facades and signage, clean streets and sidewalks, and install or refurbish crosswalks, planters and more. Courtesy of the Main Street Business Alliance

Real estate and business leaders can work with the public sector to plan and fund streetscape improvements that benefit all stakeholders.

HACKENSACK, NEW JERSEY, the county seat of the state’s most populous county, is seven miles northwest of the George Washington Bridge. Hackensack’s Main Street has for decades been a one-way arterial, with most traffic heading somewhere else. In the last dozen or so years, however, property owners, businesses and public officials in Hackensack have redefined that “somewhere else” with a new vision for a lively, mixed-use, more prosperous Main Street.

“Upper Main,” in local parlance, is a 16-block corridor that includes many additional blocks on both sides of the arterial and comprises 163 acres, 375 businesses and 389 parcels. Starting in 2004, with the creation of the Hackensack Upper Main Alliance, a public-private partnership known as a special improvement district (SID), the real estate and business communities have worked with the city to create a new future for Upper Main. The district’s property owners pay a special assessment, ranging up to 10 percent of their property taxes, which funds the SID.

The SID, which recently renamed itself the Main Street Business Alliance, has gone far beyond its original successes in marketing the district and helping to clean sidewalks and streets; renovate facades, buildings and signage; and put in new or refurbished crosswalks, hydrants, mailboxes, parking meters and planters.

Street-Works, the White Plains, New York-based master-planning consulting firm, wrote a 2009 report recommending the conversion of Upper Main to a two-way street. The city then commissioned Hasbrouck Heights, New Jersey-based DMR Architects to write what became an award-winning plan to reimagine Upper Main. One key element of the plan focuses on the high-volume one-way street’s destructive effect on the district’s retail and mixed-use environment. One-way arterials are incompatible with a good shopping experience in a walkable neighborhood, and depress retail sales, real estate values, tax revenues and mixed-use development prospects. “We found no successful comparable one-way main streets anywhere,” says Albert Dib, who served as the SID’s executive director from 2009 until 2015.

men placing a planter on the street

The city council adopted the plan, which included a streamlined entitlement process, new incentives for better development and new ways to finance streetscape improvements. Since 2012, Hackensack has authorized incentives for a series of residential projects above new retail and commercial space. Patrice Foresman, the new executive director of the Main Street Business Alliance, reports that the developer of the first project, Capodagli Property Company/Meridia, plans an opening early this year. A second project has broken ground, and the city has approved several additional applications and is reviewing others. These will add over 800 dwelling units to the downtown. 

A Two-way Street

The city also commissioned an engineering proposal, finished in late 2015, for a revamped two-way street. It has started to seek funding for the project and expects to begin work before the end of 2017. It has also reduced parking requirements, responding to the preferences of a younger workforce for downtown living, walking, bicycling and on-demand car sharing. Several of the new mixed-use projects include structured parking and shared parking. Other proposed parking changes involve developer payments in lieu of parking (PILOPs), adding spaces on side streets, redesigned curbside parking and higher parking prices.

Two rail lines and a bus terminal serve the Main Street area. One of the rail lines has two commuter stations next to Upper Main, and both stations have seen large ridership increases in recent years. Hackensack has applied for New Jersey Department of Transportation designation as a Transit Village, which would provide additional incentives and technical support.

The Upper Main SID is an excellent example of how a small city’s real estate and business communities can demonstrate leadership and create incentives for commercial and residential development, historic preservation, enhancement of the tax rolls and new jobs. “It takes perseverance,” says Jerome Lombardo, chairman of the SID and owner of a local real estate investment and management firm. “We’ve been working on this for over a decade. It takes bridge-building too — we’ve been working hand-in-hand with the city on all of these projects, and the city gets the major share of the credit for the progress that’s been made.”

Landowners Come Together in Maryland

Two hundred miles to the south, Montgomery County, Maryland’s Rockville Pike is well-known in the National Capital Region for its miles of shopping centers and traffic congestion. The White Flint sector of “the Pike” is a 430-acre area along both sides of the corridor.

rendering of street view

Property owners in the White Flint sector of Montgomery County, Maryland’s Rockville Pike corridor have proposed turning part of “the Pike” — now a typical suburban commercial strip highway — into a walkable boulevard, and have created a special revenue district to help fund the transformation.
White Flint Sector Plan, Montgomery County Planning Department

The owners of major retail outlets in the White Flint neighborhood started making plans for redevelopment more than a decade ago. What made this effort different from others was that several large, independent owners decided to work together and with the county to transform the streetscape. They proposed turning a key part of the Pike into a walkable boulevard and eliminating over 80 percent of their surface parking spaces. The Rockville Pike makeover is a jumbo-sized example of a retail streetscape renovation.

The renovated Pike — as envisaged by these property owners, the community and the county — will have a landscaped center median wide enough for two lanes of bus rapid transit (BRT). The renovation will put utilities underground and add hundreds of new trees. A majority of the owners, led by Federal Realty Investment Trust, The JBG Companies and Lerner Enterprises, voted to raise about $100 million for streetscape improvements in the public right-of-way using a special revenue district. The district framework will allocate increased property tax receipts to pay for the streetscape renovation. The developers will invest well over $1 billion more in public space and streetscape improvements on their own land, in mall renovations and in new commercial and residential construction.

Montgomery County’s plans for the sector provide for the separation of local traffic from regional traffic on the new Pike and for the expansion of the adjacent street network. All streets will be “complete streets” designed to be used safely by cyclists, pedestrians and transit riders as well as motorists. The plans envision a mixed-use neighborhood with public spaces.

While the plans also call for BRT, the county acknowledges that the funds for it are not yet in hand or even identified. The county says that while BRT on the Pike may be an early part of the project, the entire BRT project will take 20 to 30 years and will cost much more than the streetscape renovation.

Federal Realty Investment Trust has completed the first phase of its mall reconstruction, a walkable mixed-use development known as Pike & Rose, and is starting the next phase. JBG has multiple projects open or under construction. The county has received and approved many proposals for additional development in the sector plan area.

Part of the sector plan met a bump in the road when Lerner Enterprises, owner of White Flint Mall, lost a suit brought by a tenant over the closing of the mall for redevelopment. As of press time the case remains under appeal.

Evan Goldman, a vice president at Federal Realty, was the public face of the effort to win support for the special revenue district and streetscape renovation, which included a social media campaign. Most of the nearby neighborhood associations have become supportive of the project. Goldman’s advice to other owners and developers is “Don’t underestimate neighbors’ desires for really great communities.”

Streetscape renovations can turn a corridor into a “place” by improving land values, connecting sidewalks to storefronts and improving the value proposition for retailers. Retail streetscape redevelopment is also good for local governments. The new business activity creates revenues for the municipality from higher property tax, sales tax and income tax receipts, without new taxes or a general rate increase. Goldman estimates that Montgomery County will collect at least $6 billion in additional tax revenues in the next 35 years as a result of the Pike makeover.   

Owners and developers elsewhere could use a similar approach to finance streetscape renovations in their own communities. Goldman notes that “If a few owners control much of the property in a neighborhood, and if they have a record of working together, the chances are better that they could pull off a project on the scale of the Rockville Pike makeover.” It helped that the Rockville Pike developers were well-capitalized, had some major leases expiring in properties that were showing their age and had a commitment to the region, but these factors are not all required. A clear lesson from the Hackensack and Rockville Pike stories is that the streetscape redevelopment model, combined with innovative financing, offers commercial property owners and developers an excellent opportunity for leadership — and for increasing the value of their own properties.