Strong Commercial Centers

Creating Vibrant Downtowns, Business Districts, Urban Villages and Other Accessible, Mixed-Use Activity Centers

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TDM Encyclopedia

Victoria Transport Policy Institute

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Updated 25 January 2010

This chapter describes how to help create vibrant downtowns and business districts, and how this helps support TDM objectives. 

Description

Commercial Centers (also called Downtowns, Central Business Districts, and Urban Villages) contain a concentration of business, civic and cultural
activities, creating conditions that facilitate interaction and exchange. This increases overall Accessibility. Vibrant commercial centers have the
following attributes:

·         Density and Clustering. Commercial centers should be medium- to high-density, with multi-story buildings. Densities of 50 employees or
more per gross acre are desirable. As much as possible the ground floor of buildings should have activities and services that involve
frequent public interaction (such as retail, professional services, civic offices, etc.), with office or residential activities above, which
creates an attractive street environment while accommodating dense employment. 

·         Diversity. Centers contain a diverse mix of office and retail space, banks and law offices, public institutions (such as city hall,
courthouses, and other government offices), entertainment and arts activities, and other suitable industries. Increasingly, commercial
centers also have residential buildings, either within or nearby.

·         Local and Regional Importance. Commercial Centers should contain a significant portion of total regional employment and business
activity.

·         Walkability. Most Commercial Centers are less than 250 acres in size so all destinations are within about 10-minute walk, with good
sidewalks and pathways, pedestrian shortcuts, attractive Streetscapes, pedestrian scale and orientation, relatively narrow streets (4
lanes or less is desirable), relatively slow vehicle traffic (30 miles-per-hour or less is desirable), Universal Design, and a high degree of
pedestrian Security. Some have Pedways, which are indoor walking networks that connect buildings and transportation terminals.

·         Transportation Diversity. The area should be accessible by walking, cycling, taxi, automobile, and public transit.

·         Parking Management . In order to avoid the need to devote a large portion of land to parking, Commercial Centers require that parking
be managed for efficiency (Manfille and Shoup 2004). It is often appropriate to use structured or underground parking, and to limit the
total amount of parking in a commercial center.

·         Transit Oriented Development. This refers to districts designed with features that facilitate transit accessibility, with maximum
developing within convenient walking distance of Attractive Transit Stations.

There are many types of Commercial Centers, ranging from Downtowns (also called Central Business Districts or CBDs), which are the primary
Commercial Center serving a region, to Secondary Business Districts and Village Centers . A large Central Business District can contain thousands of
businesses with tens of thousands of employees, while a local village center may be considered successful if it has a dozen businesses with two or
three hundred employees. Some have a particular base or specialty, such as a cluster of medical facilities, a wholesale district, a tourist district, or
an adjacent university campus, but such centers include a diverse range of businesses providing support services.

Business activities tend to be more efficient in a Commercial Center that contains related industries, because clustering allows convenient
interaction between staff, and convenient access to the services they use. A typical business district contains offices for finance, insurance, real
estate, law and research companies, government agencies, plus various support services such as stationary retailers, janitorial services and
computer supplies. This allows more specialization, for example, lawyers that specialize in a particular subject, translators who support trade and
cultural activities with a particular region, and suppliers of specialty equipment for a particular industry. Commercial Centers also contain
conference centers, hotels and other types of meeting facilities. As a result, people working in such areas can meet with several colleagues each
day (a banker, a lawyer, a translator) with minimal time spent traveling. This high degree of accessibility that occurs when related industries are
clustered together tends to increase economic productivity, called Economies of Agglomeration. 

Strong Commercial Centers are an important component of Smart Growth and New Urbanism. Many central business districts and nearby
neighborhoods are experiencing new residential development in the form of high- and medium-density condominiums and apartments,
townhouses, and small-lot single-family homes. Urban living is particularly popular among young adults and retirees. Market surveys indicate that
about a third of home buyers would prefer to live in mixed-use new urbanist community if available (Hirschhorn, 2001). Some central business
districts are still losing business and population, but there are numerous indications that, with proper support, downtowns can be successful and
provide numerous economic, social and environmental benefits.

Transportation planning decisions have significant impacts on the success of Commercial Centers. Walking, Public Transit and Parking
Management are particularly important, and Commute Trip Reduction programs tend to be particularly effective. Public Bike Systems increase the
convenience of cycling in downtown areas. 

People who work, shop and live in a Commercial Center can satisfy many of their daily needs without using an automobile. For example, employees
who work in the area will find a diverse range of cafes and restaurants for refreshments and meals, shops that sell daily items (such as groceries,
books and stationary goods) and more specialized items (such as gifts, clothing and hardware). Similarly, a vibrant Commercial Center contains
medical and dental services, gyms for exercise, daycare facilities, and other types of services. It is therefore beneficial to locate affordable housing
near Commercial Districts, so non-drivers have convenient access to such services, called Location Efficient Development.

Commercial Centers are an alternative to more Automobile Dependent commercial land use patterns, such as suburban strips (activities are
scattered along major arterials, which requires a car trip between each destination), and private malls or campuses (which have a high degree of
internal walkability, but are generally surrounded by large parking facilities, are widely dispersed, and contain a limited range of activities, and so
tend to require numerous automobile trips).

Downtown Development Evaluation (Jacobs 2008):

1. Cities are for living in.

2. Understand who cities are for
3. Mixed-use environments
4. Think compactly
5. Invest in culture
6. Conservation
7. Mobility
8. Creative use of history

How It Is Implemented

There are many ways that public policies can encourage businesses to locate in commercial centers, and support their economic development
(Smart Growth Policy Reforms).

·         Governments can locate their own offices and services in suitable Commercial Centers.

·         Zoning codes can encourage or require businesses (particularly large employers) to locate in suitable commercial centers and
discourage strip commercial development.

·         Tax policies and utility fees can favor the location of businesses in commercial centers.

·         Infrastructure investments (roads, walking facilities, utilities, transit services) can favor commercial centers, particularly for industries
that have numerous employees.

·         Improve marketing efforts in Commercial Centers, for example, by sponsoring special events and coordinated advertising among
businesses.

·         Transportation policies and planning can favor multi-modalism, including walking, cycling and transit services. Walking and Cycling
improvements are important in Commercial Centers.

·         Parking Management tends to be particularly important in Commercial Centers.

·         Transit Oriented Development often provides a catalyst for the development of Commercial Centers.
 ·         Encourage infill development.

·         Suburban malls can be converted into more mixed-use Commercial Centers by adding employment and residential land uses, improving
pedestrian connections with nearby destinations, and expanding the range of services and activities available.

·         Locate major organizations, such as universities and industrial centers, either within or near existing commercial centers.

Travel Impacts

Residents living in or near Commercial Centers tend to own fewer cars than residents of more dispersed, isolated areas (Land Use Impacts on
Transportation). People who work in major centers tend to commute by transit significantly more than those who work in more dispersed locations,
and they tend to drive less for errands (Ewing, Pendall and Chen 2002). While about 90% of suburban employees drive to work, but this declines to
about 50% among downtown employees (even less in cities with major transit systems). Franks and Pivo (1995) found that automobile commuting
declines significantly when workplace densities reach 50-75 employees per gross acre, since this tends to support transit and ridesharing
commutes, and improved access to local services, such as nearby coffee shops and stores.

Because activities and people are concentrated, road and parking Congestion tend to be relatively intense in major Commercial Centers, but
because people use alternative modes and travel shorter distances, particularly for businesses meetings, per capita traffic congestion costs tends to
be lower. Commute trips may be somewhat longer if employment is concentrated in a central business district. For this reason, many urban planners
believe that the most efficient urban land use pattern is to have a Central Business District that contains the highest level business activities (“main
offices”), and smaller Commercial Centers with retail and “back offices” scattered around the city among residential areas.

Table 1            Travel Impact Summary

Objective Rating Comments

Reduces total traffic. 2 Reduces automobile trips.
Reduces peak period traffic. 1  
Shifts peak to off-peak periods. 0  
Shifts automobile travel to alternative modes. 2  
Improves access, reduces the need for travel. 3  
Increased ridesharing. 2  
Increased public transit. 3  
Increased cycling. 1  
Increased walking. 3  
Increased Telework. 0  
Reduced freight traffic. 1  

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.

Benefits and Costs

Strong Commercial Centers provide a high level of Accessibility and Transportation Diversity, which increases use of alternative modes (particularly
public transit), reduces per capita vehicle trips and allows Parking Management. Research by Ewing, Pendall and Chen (2002) indicates that cities
with Strong Commercial Centers tend to have lower per capita traffic fatalities. Strong Commercial Centers tend to increase productivity and
supports Economic Development. By concentrating activities and increasing Density, Strong Commercial Centers tend to reduce per capita land
consumption, and therefore reduce sprawl and associated Land Use Impacts.

Costs include more concentrated traffic congestion and pollution emissions, although this is usually offset by reductions in per capita vehicle use.
Infill redevelopment may increase some development costs, but total development and public service costs are generally lower than dispersed,
sprawl development (Litman, 2004). Other advantages and disadvantages associated with higher density development are discussed in the Land
Use Evaluation chapter.

Table 2          Benefit Summary

Objective Rating Comments

Congestion Reduction 1 Reduces automobile trips, but concentrates traffic.
Road & Parking Savings 2 Reduces automobile trips, allows more efficient parking management
Consumer Savings 2 Reduces automobile costs.
Transport Choice 3 Improves transportation options.
Road Safety 2 Research indicates lower per capita traffic fatalities.
Environmental Protection 1 Reduces automobile trips and land use, but may concentrate pollution.
Efficient Land Use 3 Represents more efficient land use compared with dispersed development.
 Community Livability 2 Creates more accessible, mixed land use, and can revitalize urban neighborhoods.

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.

Equity Impacts

Strong Commercial Centers can benefit transportation disadvantaged people by increasing their travel options. It is particularly beneficial if such
areas include affordable housing nearby (Location Efficient Development).

Table 3          Equity Summary

Criteria Rating Comments

Treats everybody equally.
Individuals bear the costs they impose.
Progressive with respect to income.
Benefits transportation disadvantaged.
Improves basic mobility.
0  
0  
2 Benefits lower-income people if it improves affordable travel options
(walking, cycling and public transit).
3 Improves mobility for non-drivers, particularly if such areas have
affordable housing nearby.
3 Improves mobility for non-drivers to major destinations.

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.

Applications

Strong Commercial Centers can be developed in many conditions. They are most common in cities and town, but even in rural area, clustering
activities into a village can increase accessibility and reduce the amount of driving by residents to run errands, compared with activities being
widely dispersed. It is particularly useful if affordable housing is located within or adjacent to the Commercial Center, so people who cannot drive
can easily walk to common destinations.

Table 4          Application Summary

Geographic Rating Organization Rating

Large urban region. 3 Federal government. 1
High-density, urban. 3 State/provincial government. 2
Medium-density, urban/suburban. 3 Regional government. 3
Town. 3 Municipal/local government. 3
Low-density, rural. 2 Business Associations/TMA. 3
Commercial center. 3 Individual business. 3
Residential neighborhood. 3 Developer. 3
Resort/recreation area. 3 Neighborhood association. 2
College/university communities. 3 Campus. 3

Ratings range from 0 (not appropriate) to 3 (very appropriate). 

Category

Land Use Management

Relationships With Other TDM Strategies

Strong Commercial Centers support and are supported by  Smart Growth, New Urbanism, Location Efficient Development and Transit Oriented
Development land use policies. They tend to support Walking and Cycling, Public Transit, and Universal Design. They support  Commute Trip
Management, Parking Management, Shared Parking and Parking Pricing.

Stakeholders

Major stakeholders include local government officials (who set land use policies), businesses (which decide where to locate and what type of
building to use), residents (who may either support or oppose infill development), employers (who choose work locations and policies, such as
Parking Cash Out) employees (who may support or oppose working in a Commercial Center, and customers (who decide where to shop). 
Barriers To Implementation

Major barriers include various practical and legal constraints on clustered and infill development, and a preference among some employees and
customers for more dispersed, suburban locations for commercial activities.

Best Practices

·         Locate public facilities within Commercial Centers.

·         Encourage infill development and increased density in Commercial Centers.

·         Use Transit Oriented Development as a catalyst for Commercial Centers.

·         Use location-based development and utility fees to encourage infill over dispersed development (Smart Growth Policy Reforms).

·         Use Commute Trip Reduction programs and Parking Management to address transportation problems in Commercial Centers.

·         Allow Context Sensitive Design so development can better fit into existing commercial areas.

·         Discourage urban-fringe commercial development.

Examples and Case Studies

The Chattanooga Story (www.chattanooga.gov)

Over the last 20 year, Chattanooga, Tennessee has redeveloped its once-depressed downtown to become a major commercial and tourist center
that attracts millions of visitors a year. This evaluated out of three decades of community planning that emphasize citizen involvement, local
environmental quality and strategic investments.

Concerned about the impacts that pollution was causing on local economy, the Chattanooga Chamber of Commerce created a Air Pollution
Control Board in 1967. The board included a diversity group of business leaders and citizens. It established a 1972 deadline for all existing major
sources of pollution to be in compliance with emission standards, which was met at a cost of $40 million. National and international attention was
focused on a city that in three years had changed from the most polluted city in the United States to one of the cleanest. This inspired a new
community challenge, revitalizing a dying city.

In the early 80’s, city officials established a goal that Chattanooga should become a leader in developing solutions to urban problems. In 1982, City
and County governments appointed a task force to study and define the best way to develop the 22-mile Tennessee River corridor around
Chattanooga. Through this process thousands of citizens attended hundreds of meetings to focus on the riverfront. The Task Force drafted the
Tennessee Riverfront Master Plan covered 20 years and involved $750 million in commercial, residential and recreational development.

This led to creation of the RiverCity Corporation, a private, nonprofit organization with a mandate to implement the Riverfront Master Plan and 40
community development goals. Among other achievements, it developed the Tennessee Aquarium, the world’s largest freshwater aquarium, which
opened in 1992. The structure has become a trademark for the city that in 10 years transformed itself from a dying city to one of growth and
sustainable development. As a result of these efforts, Chattanooga is now one of America's most livable cities.

New Urbanism Street Design in Downtown Milwaukee (Voigt and Polenske 2006)

A number of innovative parking management, traffic management, pedestrian improvements and visitor information improvements are being
applied in downtown Milwaukee to make it more attractive and accessible. These include:

·         Changing from parallel to angled parking on several streets to increase total available supply.

·         Encouraging employees and visitors to use structured parking and walk to destinations around the downtown (called “park once” trips)
rather than driving from one destination to another.

·         Improving pedestrian conditions, including wider sidewalks, more pedestrian-friendly intersection design, and a riverwalk path.
 ·         Buildings designed for pedestrian access, with ground-floor storefronts.

·         Improving wayfinding signs.

·         Providing downtown circulator transit services.

·         Replacing an elevated freeway with a surface arterial to eliminate a barrier to travel between the downtown and nearby
neighborhoods.

Main Street Programs (www.mainst.org)

Downtown Revitalization (also called Main Street Programs) is intended to make downtowns and neighborhood commercial centers more
successful and attractive, helping to create more mixed-use, infill development reflecting New Urbanist principles. Such efforts involve downtown
economic development programs, increased downtown housing, promoting community activities (such as recreational, cultural and civic events
that attract regional residents to the downtown), Parking Management, Traffic Calming and building rehabilitation.

Downtown Living (Birch 2005)

Many cities are experiencing population growth. An analysis of downtown population, household, and income trends in 44 selected cities from
1970 to 2000 finds that:

During the 1990s, downtown population grew by 10 percent, a resurgence following 20 years of overall decline. Forty percent of the sample cities
began to see growth before the 1990s. While only New York's two downtown areas and Seattle, Los Angeles, and San Diego saw steady increases
from 1970 to 2000, another 13 downtowns have experienced sustained growth since the 1980s.

From 1970 to 2000, the number of downtown households increased 8 percent—13 percent in the 1990s alone—and their composition shifted.
Households grew faster than population in downtowns, reflecting the proliferation of smaller households of singles, unrelated individuals living
together, and childless married couples.

Downtown homeownership rates more than doubled during the thirty-year period, reaching 22 percent by 2000. Overall the number of
homeowners grew steadily each decade. By 2000, the share of homeowners across the sample downtowns swung from a high of 41 percent in
Chicago to a low of just 1 percent in Cincinnati.

Downtowns are more racially and ethnically diverse than 20 years ago. From 1980 to 2000, the combined share of white and black residents living
in the sample downtowns fell from 81 percent to 73 percent, while the share of Hispanic and Asian residents increased. The number of white
residents living downtown rebounded in the 1990s, however, despite an overall loss of this group in cities as a whole.

In general, downtowns boast a higher percentage of both young adults and college-educated residents than the nation's cities and suburbs. In
2000, 25- to 34-year olds represented nearly a quarter of the downtown population—up from 13 percent in 1970. Forty-four percent of
downtowners had a bachelors degree or higher.

Downtowns are home to some of the most and least affluent households of their cities and regions. Twenty of the sample downtowns—such as
Midtown Manhattan, Dallas, and Miami—have at least one tract where the median income is higher than that of their MSA as a whole. Thirty-eight
have at least one tract 50 percent or lower than their MSA median.

Prioritizing Public Funding

In 1997 the State of Maryland passed “Priority Funding Areas” legislation that limits most State infrastructure funding and economic development,
housing and other program monies to Smart Growth Areas which local governments designate for growth (www.op.state.md.us/smartgrowth). This
package facilitates the reuse of brownfields and provide tax credits to businesses creating jobs in a Priority Funding Area.

Downtown Pasadena Redevelopment

(from Douglas Kolozsvari and Donald Shoup, “Turning Small Change Into Big Changes,” ACCESS 23, University of Calif. Transport Center,
www.uctc.net/access/access23lite.pdf, Fall 2003, pp. 2-7) 

Old Pasadena’s downtown had become run down, with many derelict and abandoned buildings and few customers, in part due to the limited
amount of parking available to customers. Curb parking was restricted to two-hour duration, but many employees simply parked in the most
convenient, on-street spaces and moved their vehicles several times each day. The city proposed pricing on-street parking as a way to increase
turnover and make parking available to customers. Many local merchants originally opposed the idea. As a compromise, city officials agreed to
dedicate all revenues to public improvements that make the downtown more attractive. A Parking Meter Zone (PMZ) was established within which
parking was priced and revenues were invested.

With this proviso, the merchants agreed to the proposal. They began to see parking meters in a new way: as a way to fund the projects and services
that directly benefit their customers and businesses. Because parking had previously been unpriced, the city didn’t lose anything from the general
fund by dedicating the revenue to the local area. In fact, the city gained additional revenue from overtime fines. The city formed a PMZ advisory
board consisting of business and property owners, which recommended parking policies and set spending priorities for the meter revenues. This
approach of connecting parking revenues directly to added public services and keeping it under local control help guarantee the program’s
success. Investments included new street furniture and trees, more police patrols, better street lighting, more street and sidewalk cleaning,
pedestrian facility improvements and marketing (including production of area maps showing local attractions and parking facilities. To highlight
these benefits to motorists, each parking meter has a small sticker which reads, “Your Meter Money Will Make A Difference: Signage, Lighting,
Benches, Paving”

This created a “virtuous cycle” in which parking revenue funded community improvements that attracted more visitors which increased the parking
revenue, allowing further improvements. This resulted in extensive redevelopment of buildings, new businesses and residential development.
Parking is no longer a problem for customers, who can almost always find a convenient space. Local sales tax revenues have increased far faster
than in other shopping districts with lower parking rates, and nearby malls that offer free customer parking. This indicates that charging market
rate parking (i.e., prices that result in 85-90% peak-period utilization rates) with revenues dedicated to local improvements can be an effective
ways to support urban redevelopment.

Twelve Steps for Downtown Revitalization (Leinberger)

Developer Christopher B. Leinberger identifies twelve specific steps for local officials, businesses and community members to create a vital, healthy
and economically-successful downtown (see his report for details).

1.      Capture the Vision

2.      Develop a Strategic Plan

3.      Forge a Healthy Private/Public Partnership

4.      Make the Right Thing Easy

5.      Establish Business Improvement Districts and Other Non-Profits

6.      Create a Catalytic Development Company

7.      Create an Urban Entertainment District

8.      Develop a Rental Housing Market

9.      Pioneer an Affordability Strategy

10.  Focus on For-Sale Housing

11.  Develop a Local-Serving Retail Strategy

12.  Re-create a Strong Office Market

Smart Growth Infill

The publication, Getting To Smart Growth: 100 Policies for Implementation (SGN, 2002 and 2004) describes a variety of specific policy reforms and
administrative strategies to support more efficient development. Below are some examples:

·         Many communities offer “density bonuses” to developers who meet certain design objectives.

·         The Washington State Department of Transportation has flexible design standards that allow state highway funds to be used to create
wider sidewalks, curb extensions, bus stops and crosswalk improvements on urban arterials.
 ·         The San Francisco Bay Area Metropolitan Transportation Commission provides special funding for transit-oriented development
improvements such as pedestrian and cycling facilities, streetscape improvements and transit village development for areas within one-
third mile walk of a transit station. Funding increased with development densities: $1,000 per bedroom in projects containing 25 units
per acre, and up to $2,000 per bedroom for developments with 60+ units per acre.

·         The city of Fort Collins, Colorado, uses a Land Development Guidance System (LDGS) which gives developers density bonuses for
projects that have desirable, Smart Growth design features.

·         The Maryland DOT’s neighborhood conservation program provides funding for transportation improvements on roadways and other
transportation facilities located in state designated neighborhoods (often referred to as neighborhood revitalization areas), where the
improvements will provide economic revitalization and improved livability to older, run-down neighborhoods. Eligible projects include
roadway repaving or reconstruction, roadway signing, lighting and traffic controls, walking improvements, bus shelters and transit
station access improvements, streetscaping, etc.

·         The city of Austin, Texas uses a Smart Growth Matrix to analyze development proposals (www.ci.austin.tx.us/smartgrowth). It is designed
to measure how well a project supports Smart Growth objectives taking into account its location, its proximity to transit, urban design
characteristics, compliance with neighborhood plans, projected tax revenue, and other policy priorities. Financial incentives may be
available to developments with high scores, such as waiver of development fees and public investment in new or improved
infrastructure such as water and sewer lines, streets or streetscape improvements, or similar facilities.