Saturday, September 1, 2007

Urban Development and Restaurants:

Graham Bowley writes about the rebirth of New York.

“In a discussion paper titled "Consumer City," Glaeser and co-authors Jed Kolko and Albert Saiz call this "the demand for density." People now want to live in dense areas because dense areas offer what people want to consume - opera, sports teams, art museums, varied cuisine. In France, for example, he and his fellow researchers found a robust correlation between the number of restaurants and the growth of cities.

Chicago’s Lincoln Park and the West Loop areas have had a similar resurgence correlated with a vibrant restaurant scene. High density explosive residential growth followed pioneering restaurants on Lincoln Avenue and on Randolph Streets. Real estate developers include amenities in their developments, with the certain knowledge that such variables increase the price per square foot that a unit will sell for. A well worn joke in Chicago is that developers should offer a commission to restaurateurs in the West Loop for vastly increasing the value of their offerings.

The redevelopment of many suburban downtown centers is tied directly to reintroduction of residential units above retail on the ground level. The 60’s and 70’s saw “people living above the store” concept virtually disappear as suburban sprawl separated residential and commercial. The thinking went that people did not want the “noise” of commercial establishments. The dawn of the twenty first century brought the realization that the “noise” of high density provided by central cities has been an economic driver for centuries.

A neighborhood is anointed “up and coming” if Starbucks stakes out an outlet. Restaurants generally precede urban growth. The Museum Campus development in the South Loop of Chicago is one of the most incredible urban renaissance stories in the country yet residential per square foot selling prices lagged the Gold Coast area simply because it had limited availability of varied cuisine. That is changing as more restaurants are staking outposts in the area.

A wonderful recipe for success, Urban Development and Restaurants!