By Aylene McCallum, Director of Downtown Environment at the Downtown Denver Partnership
Downtown practitioners have known for quite some time that downtowns are rapidly attracting the eye of investors, residents and corporate America. Smart Growth America’s recently released report thoroughly and convincingly confirms this with third party research and on-the-ground interviews. While the report is not necessarily a comprehensive analysis, it is a comprehensive compilation of anecdotal evidence supplemented with third party research that supports the notion that the popularity of locating in downtowns across America is growing. The report provides downtown practitioners solid examples to point to when creating planning documents for downtowns, developing a broad-based economic development strategy or simply preparing for a conversation with a company looking to move downtown.
Smart Growth America partnered with global real estate firm Cushman Wakefield to review why companies are locating and re-locating to downtowns across America. Through their research, Smart Growth America identified 500 companies who have made such a move, documented the details of the move (i.e. old location and new location) and interviewed senior leadership to frame an anecdotal picture describing the reasons for the move. Smart Growth America’s research revealed that companies relocating to downtowns are diverse in nature and geography. Fifty-two companies reside on the Fortune 500 list, represent over 170 different industries, and span across the United States. The report highlights the top reasons for companies who have made the move to the central business district: to attract and retain talented workers, support creative collaboration, build brand identity and corporate culture, centralize operations, be closer to customers, business partners and service provides, and improve the triple-bottom line.
Downtown Denver is becoming an increasingly attractive place for companies looking to relocate. Employment is up 11% since 2010 and dozens of companies have recently or are in the process of relocating to the center city. In March, industrial real estate firm Prologis announced the relocation of their operations headquarters from a suburban location near Denver International Airport to a brand new commercial mixed-use development near Denver Union Station in Downtown Denver. The project, which is currently under construction, will be completed in 2016. In addition to Prologis, highly regarded companies such as Liberty Global, WorldRemit, TransAmerica, McKinsey & Co., Personal Capital, Comcast and Ardent Mills have relocated to or added offices in Downtown Denver in the past several years. This continues to solidify Downtown Denver’s role as the employment hub of the city, region and state, comprising approximately one-third of all the jobs in the City and County of Denver, while constituting less than 1 percent of the City and County of Denver’s land mass.
“Denver has become one of the most powerful magnets… (for) the young and educated.”
– New York Times
One strength of the Smart Growth America report is the comprehensive list of reasons why companies are attracted to downtown locations, followed by excerpts, like the one below, from interviews with more than 40 company representatives to better understand the interest companies currently have with moving to downtowns.
“Our old location was literally at the end of a cul-de-sac and you had to get in a car to go everywhere. You couldn’t walk to lunch. You couldn’t walk to a park. You couldn’t do anything. I mean, there was nothing around you. From a client and teaming partners perspective, downtown was by far the best place – especially when you combine that with the fact that it was actually pretty centrally located for our employees’ commute pattern. We picked a building two blocks from the major downtown transit hub, one of the main downtown transit hubs on purpose.”
– Bill Siegel, President and CEO, Kleinfelder, San Diego, CA.
The report also outlines a list of qualities that companies are looking for in a downtown, noting that these qualities, “can almost be used as a competitive checklist for localities.” These qualities shouldn’t be a surprise to most downtown practitioners. Qualities noted in the report like walkable, live/work/play neighborhoods; convenient transportation options; clean, safe streets; and economic development are the legs that our organizations are built upon. It is useful to hear from companies who have recently relocated and how these qualities played a part in their decision making process.
The conclusions that Smart Growth America makes in the report are not groundbreaking, but all downtown practitioners should take notice of this trend – even if your organization is in a small region, does not represent a downtown proper or if you often find yourself working in dense, walkable, yet, suburban locations. Smart Growth America’s research clearly reveals that corporate America’s attraction to downtowns is not isolated to the biggest cities in the United States, and is occurring in regions all across the country from the largest and densest regions like San Francisco, California to smaller cities like Lincoln, Nebraska. On a similar note, Smart Growth America asserts that this focus on walkable downtowns is, in fact, not isolated to downtowns – but that walkable, transit-oriented suburban locations are also receiving attention from businesses looking to relocate.
Smart Growth America is well aware that they haven’t filed away every business move and encourage businesses and local authorities to notify them at www.smartgrowthamerica.org/core-values.