The Wharf: a Monumental Waterfront Urban Regeneration Development in Washington, DC
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The Wharf: A Monumental Waterfront Urban Regeneration Development in Washington, DC Working Paper by Arielle Levin and Derek Hyra1 The Metropolitan Policy Center School of Public Affairs American University September 2020 1 We thank the Wilson Center’s Urban Sustainability Laboratory and the Korea Housing & Urban Guarantee Corporation for supporting this research. 1 Introduction As cities reinvent themselves from industrial to residential and commercial hubs, waterfront redevelopment has become a popular urban regeneration tool.2 Certain cities have found that investments in large, mixed-use projects along their underutilized waterfronts can generate large tax revenues by attracting businesses, residents, and tourists. These festival-like developments can be an enticing way to stimulate economic development that potentially benefits the entire city.3 However, these large-scale redevelopments are often perceived as financially risky and typically require substantial public investments and support.4 For instance, seed capital from national or local governments is sometimes needed to attract sufficient private capital.5 Other government actions may include rezoning to accommodate new structure types, tax abatements to draw anchor commercial tenants, or the creation of special tax districts such as tax increment financing (TIF), payment in lieu of taxes (PILOT), and business improvement districts (BIDs) to support infrastructure improvements or development management over time.6 Sizable waterfront projects are often structured as public-private partnerships, where the government works closely with private real estate developers to execute these complex 2 Brian Doucet, Ronald Van Kempen, and Jan Van Weesep, “Resident Perceptions of Flagship Waterfront Regeneration: The Case of the Kop Van Zuid in Rotterdam,” Tijdschrift voor Economische en Sociale Geografie 102, no. 2 (2010): 125-145; Sylvia Hannan and Catherine Sutherland, “Mega-projects and Sustainability in Durban, South Africa: Convergent or Divergent Agendas?” Habitat International 45, no. 1 (2015): 205-212; Andrew Jones, “Issues in Waterfront Regeneration: More Sobering Thoughts-A UK Perspective.” Planning Practice & Research 13, no. 4 (1998): 433-442; Jennifer Laidley, “The Ecosystem Approach and the Global Imperative on Toronto’s Central Waterfront.” Cities 24, no. 4 (2007): 259-272. 3 Paul L. Knox, “The Restless Urban Landscape: Economic and Sociocultural Change and the Transformation of Metropolitan Washington, DC.” Annals of the Association of American Geographers 81, no. 2 (1991): 181-209. 4 Erik Swyngedouw, Frank Moulaert, and Arantxa Rodriguez, “Neoliberal Urbanization in Europe: Large-Scale Urban Development Projects and the New Urban Policy.” Antipode 34, no. 3 (2002): 542-577. 5 Richard C. Hula, “The Two Baltimores,” In Leadership and Urban Regeneration: Cities in North America and Europe (Newbury Park, CA: Sage Publications, Inc., 1990). 6 Susanna F. Schaller, Business Improvement Districts and the Contradictions of Placemaking: BID Urbanism in Washington, D.C. (Athens, The University of Georgia Press, 2019). 2 endeavors.7 These partnerships are critical in today’s fiscally constrained times as neither the public nor the private sector typically have the independent resources or risk tolerance to take on these massive developments. By sharing risk and resources, these joint ventures can collaboratively produce large-scale projects that are mutually beneficial to citizens and shareholders. Economic development goals are often paired with social objectives in these public private partnership projects.8 For instance, these developments often have public participation in the project design. Furthermore, the government or citizens might negotiate a set of civic objectives with the development team including the creation of jobs, the production of affordable housing, small business development, or public amenities such as parks, walkways, and parking lots. Some of these projects also include environmental goals such as the minimization of stormwater runoff or the improvement of nearby water quality.9 Because public private developments often have economic and social goals, they can be complicated to produce, maintain, and evaluate.10 This report focuses on a major mixed-use, public private waterfront redevelopment project, known as The Wharf, in Washington, DC (DC). The Wharf is a massive development combining opportunities to work, play, and live in one large-scale 27-acre space along DC’s Southwest waterfront. The total construction cost to redevelop this site stands at $2.5 billion. 7 Chris Hagerman, “Shaping Neighborhoods and Nature: Urban Political Ecologies of Urban Waterfront Transformations in Portland, Oregon.” Cities 24, no. 4 (2007): 285-297. 8 Nufar Avni and Raphaël Fischler, “Social and Environmental Justice in Waterfront Redevelopment,” Urban Affairs Review (2019): 1-32; Susan S. Fainstein, “Mega-projects in New York, London and Amsterdam.” International Journal of Urban and Regional Research 32, no. 4 (2009): 768-785. 9 Scott Campbell, “Green Cities, Growing Cities, Just Cities?: Urban Planning and the Contradictions of Sustainable Development.” Journal of American Planning Association 62, no. 3 (1996): 296-312; Mike Raco, “Sustainable Development, Rolled-out Neoliberalism and Sustainable Communities.” Antipode 37, no. 2 (2005): 324-347. 10 Lindsay Morgia and Thomas J. Vicino, “Waterfront Politics: Revisiting the Case of Camden, New Jersey’s Redevelopment.” Urban Research & Practice 6, no. 3 (2013): 329-345. 3 Phase One was completed in 2017 at a cost of $1.4 billion and contained 2.2 million square feet of residential, hotel, office, restaurant, retail, and public space. This stretch of property is one of Washington’s most expensive and iconic developments in the 21st century. Phase Two of the project, another 1.2 million square feet of residential and commercial development totaling $1.1 billion in investment, is currently under construction and projected to be completed in 2022. Three legislative acts of the United States (US) Congress were needed to transfer the land rights to facilitate the project and nearly $300 million in national and local government support was allocated to undergird critical project infrastructure components. Washington’s Southwest neighborhood is unique in that it was one of the country’s first large-scale urban renewal efforts in the 1950s.11 This period of redevelopment displaced thousands of Southwest’s African American residents and businesses, and this history and its harmful impact are living memories in Southwest.12 Furthermore, the area still contains a substantial number of low-income African American families living in public housing projects located not too far from The Wharf, and some scholars question whether Washington’s current waterfront urban regeneration project will benefit the lives of low-income people.13 In this report, we investigate a set of questions related to The Wharf’s redevelopment. What were the capital and debt challenges to financing The Wharf and how did public sector resources help to facilitate private sector investments in the project? How did Southwest history of urban renewal relate to current social equity concerns, conversations, and accomplishments 11 Howard Gillette Jr., Between Justice and Beauty: Race Planning and the Failure of Urban Policy in Washington, DC. (Philadelphia, University of Pennsylvania Press, 1995). 12 Paula C. Austin, Coming of Age in Jim Crow DC: Navigating the Politics of Everyday Life (New York, New York University Press, 2019); Paul K. Williams, Images of America: Southwest Washington, D.C. (Charleston, Arcadia Publishing, 2005). 13 Avni and Fischler, “Social and Environmental Justice in Waterfront Redevelopment”; Schaller, Business Improvement Districts and the Contradictions of Placemaking; Brett Williams, “Beyond Gentrification: Investment and Abandonment on the Waterfront” in Capital Dilemma: Growth and Inequality in Washington, DC (New York, Routledge, 2016). 4 associated with this waterfront development? Finally, how is The Wharf perceived by low- income people who live near the redevelopment site? By answering these questions, we hope to provide insights regarding the production of mega-development projects that are profitable, replicable, and socially sustainable. Our aim is to understand how to maximize public and private gains so that urban regeneration projects become more mutually beneficial to all parties involved. Report insights were based on a case study design.14 Between December 2019 and September 2020, we interviewed 16 project stakeholders including real estate developers, city officials, non-profit and community leaders, and residents in DC’s Southwest neighborhood. We asked those interviewed about the major economic and social challenges and benefits of The Wharf project. Our interview pool was based on scanning local planning documents and current newspaper articles for key individuals related to the project. We added to this initial list by developing a snowball sample through asking each person we interviewed to suggest others they thought had extensive knowledge about the project.15 Each interview lasted approximately an hour and all interviews were taped and transcribed. Additionally, we gathered and assessed important archival records including city council and zoning documents, scholarly publications, and demographic data related to Southwest, DC and The Wharf’s development. We used this set of information to answer our research