SOUTHTOWN NEIGHBORHOOD REVITALIZATION STRATEGY INTRODUCTION

Transcription

1 SOUTHTOWN NEIGHBORHOOD REVITALIZATION STRATEGY INTRODUCTION The City of Grand Rapids is located thirty miles from Lake Michigan, in an area called the West Michigan Gold Coast, and is equidistant from Chicago and Detroit. Grand Rapids is the second largest city in the state with a population of 198,000 and is the center of a 1.5 million person metropolitan area. Grand Rapids was one of only two urban core cities in the state that gained population according to the 2000 census. Along with its population growth, the city is experiencing significant public-private investment in the downtown and in many of its central city neighborhoods. Although these revitalization efforts are occurring, some areas still struggle to reverse physical and economic decline. One such area is known as Madison Square. In 1915, Madison Square, at the intersection of Hall Street and Madison Avenue was a thriving, bustling area of commerce and traffic that rivaled every shopping area in the city. (Heart & Soul, The Story of Grand Rapids Neighborhoods, Samuelson, Schrier, et al. 2003) Homes were nicely kept and residents felt a sense of community. The riots of 1967, murders in the 1970 s, and the insurgence of street drugs in the 1980 s damaged Madison Square s image and resulted in boarded-up houses and. Today many community organizations, institutions and private investors are working to turn Madison Square and its surrounding residential areas around. Their plans for neighborhood revitalization take into account the physical, social and economic aspects of rebuilding the neighborhood, as well as the leadership and spirit of area residents. Lighthouse Communities, a Community-Based Development Organization, has worked over the last year to interconnect goals and plans of multiple organizations with the vision of neighborhood residents and to develop a comprehensive strategy for revitalization of this area now being called Southtown. BOUNDARIES The Southtown boundaries consist of Wealthy Street on the north, Eastern Avenue on the east, Cottage Grove to Madison Avenue to Garden to Division Avenue to Stevens on the south, and Buchanan Avenue to Albany to Division Avenue on the west. (See attached map.) Although Southtown is predominately residential, the area includes three business districts. The primary neighborhood business district is located near the center of the area at Madison and Hall, known as Madison Square, but other commercial areas are located on the eastern border at Franklin Street and Eastern Avenue and on Division Avenue along the western border. The Division Avenue corridor serves primarily 7661cboh06a.doc (sb 01/27/2006) 1

2 automobile traffic as it is a major thoroughfare to downtown from the south. The other two commercial areas fit the more traditional form of neighborhood business districts, while a small industrial strip lies at the south end of this residential neighborhood. DEMOGRAPHICS The Southtown area is primarily residential and has a population of 10,735. The table below shows the race composition of the area based on 2000 Census data. Southtown Race Composition Total Persons Percent White 1,498 14% Black or African American 7,770 72% American Indian and Alaska Native 58.5% Asian 51.5% Native Hawaiian and other Pacific Islanders 109 1% Some other race 982 9% Two or more races 362 3% TOTALS 10, % The Southtown area has a high concentration of low- and moderate-income (LMI) persons. In fact, one block group has an LMI rate of 87.5%. The aggregate LMI for Southtown is 74.6% which is above the City of Grand Rapids upper quartile percentage cutoff of 68.1%. (See attached map.) PROJECT PARTNERS Lighthouse Communities, a Community-Based Development Organization, will be the lead agency on this project. Serving as the fiduciary for the Southtown project, Lighthouse will enter into subcontracts or memorandums of understanding with partner agencies to accomplish intended outcomes of the Southtown neighborhood revitalization plan. Since its inception in January 2002, Lighthouse has overseen the rehabilitation of 20 single family homes for resale and 33 units of rental property that it manages. Under the City's Lead Hazard Reduction Programs Lighthouse has made 123 homes lead safe and renovated 10 units of owner occupied homes under its Neighborhood Housing Fund. Additionally, it has 49 units currently under development. Lighthouse has experience in contract and financial management and has an information technology (IT) infrastructure that enhances grant and project management. Lighthouse is expanding its administrative department to include a new contract administrator in the spring who has a Master of Public Administration (MPA). Jeremy DeRoo, current operations director for Lighthouse has administered over $2.5 million of federal program funds serving low-income households. 7661cboh06a.doc (sb 01/27/2006) 2

3 South East Community Association (SECA) is a neighborhood association that provides crime prevention and neighborhood improvement services, as well as neighborhood leadership development in the City of Grand Rapids CDBG Specific Target Area. SECA is a 501(c)(3) incorporated as a Michigan Nonprofit on March 27, Madison Square Business Association (MSBA) is a 501(c)(4) nonprofit membership organization consisting of industrial, commercial and retail business owners and managers in the Madison Square area. One of the largest and oldest business associations in the City of Grand Rapids, it was incorporated in its current form in The MSBA serves as a unified voice for local business to express concerns in the area and to resolve issues. Additionally, it supports members by providing information, networking opportunities and promotions. Neighborhood Ventures is a newly formed nonprofit organization dedicated to the revitalization of neighborhood business districts. Neighborhood Ventures recently evolved from the Neighborhood Business Specialist (NBSP) Program after a strategic planning process with the Neighborhood Business Alliance, a city-wide association of business districts. The NBSP operated under the Grand Rapids Chamber of Commerce, and partnered with the NBA and City of Grand Rapids for 16 years. It is an active partner of the Neighborhood Business Alliance (NBA), and provides training, capital and information to new and established operating in Grand Rapids neighborhoods. Kent County Tax Credit Coalition is a community collaborative comprised of more than 50 organizations and individuals who facilitate financial independence for low- to moderate-income working families in Kent County. This coalition implements an organized system to make working families in Kent County aware of federal and state tax credit opportunities available including the Earned Income Tax Credit (EITC); and provides free tax preparation services to families who qualify. Tax preparation services were provided by 188 volunteers in 2005; contributing over $95,000 worth of free services to families who are in need of assistance. Over 2,952 families were provided free tax preparation services in 14 sites in PLAN CONSULTATION The planning process in Southtown has been dynamic. It began in 2001 with the creation of a revitalization strategy. This initial strategy was developed by national consultants who interviewed neighborhood association members and staff, residents, business owners and developers. The strategy called for the coordinated efforts of housing improvements and resident organizing. Over the past 18 months a market study was conducted to determine economic and commercial needs in the area and to help establish direction for future efforts. Upon receipt of the study, a design charrette for the south central portion of the neighborhood was jointly coordinated by the South East Community Association (SECA), Restorers, Inc., Lighthouse Communities and the Madison Square Business Association (MSBA). This area forms the heart of the Madison Square commercial 7661cboh06a.doc (sb 01/27/2006) 3

4 district and includes commercial, industrial and residential zones. This planning process evaluated current zoning, traffic patterns and uses in the area and created a plan (see attached renderings) for development that would improve the physical infrastructure, and economic and social health of the area. While the charrette was being conducted, the neighborhood association (SECA) and business association underwent a strategic planning process to determine how to best serve the area. These processes concluded that improved communication with residents was needed, as was a renewed focus on neighborhood change. Building on the success of past projects, such as the design charrette, SECA, MSBA, and Lighthouse concluded that a higher degree of coordination was needed to maximize impacts and prevent the duplication of services. The Southtown plan is the culmination of these efforts. Development of the plan included a wide range of participants. The design charrette process included input from many local residents and business owners, and City of Grand Rapids' staff from the planning, traffic safety and economic development departments. Input was also provided from the regional transit authority, St. Mary s Hospital, members of local churches and other community stakeholders. This community visioning process that occurred in south central portion of Southtown is expected to be repeated in other parts of the area. ECONOMIC ASSESSMENT In September 2005, an economic assessment was completed for the Madison Square area. Although this study did not encompass all of the Southtown planning area, it did include a majority as Madison Square has a population of over 6,000 people. The following statistical information was compiled from this assessment performed by Community Research Services, LLC and titled A Community Development Assessment of Southeastern Grand Rapids, MI (see attached) unless otherwise indicated. The median household income in the City of Grand Rapids is approximately 187% higher than in Madison Square neighborhoods (pg 3). This disparity is even greater at the county level where Kent County's median income is 231%. According to the latest census Madison Square neighborhoods had a median income of $19,605 (pg 33) with approximately 30% of households in the area earning under $10,000 a year. Only 45% of homes are owner occupied, which is significantly lower then the City (60%) or County (70%). Between 44% and 56% of homeowners with mortgages in the area are financially overburdened by housing costs (greater than 30% of income for housing), compared to 20% and 16% in the City and County respectively. An additional 18% of homeowners are classified as severely overburdened (greater than 50% of income for housing) which compares to 6% and 2% in the City and County. Due to the low income in the area, even 30% of homeowners without mortgages are overburdened. Of these persons, approximately 10% are severely overburdened (pg 54). 7661cboh06a.doc (sb 01/27/2006) 4

5 The rate of housing overburden is even higher among renters, with over half paying more than 30% of income on housing and nearly 40% paying more than 50%. The rental overburden rate in the City and County are 38% and 32% respectively (pg 53). As property values are increasing at a rate of 240% faster than incomes in the area, the housing affordability situation is likely to worsen without intervention (pg 54). Given the above information, it is not surprising that access to capital in the area is more limited then in other places. CRA data for small business lending shows that "lending to the study area's commercial ventures lags behind other areas of the city with neighborhood commercial districts of roughly the same size" (pg 21). HMDA data also reveals that the area is among the lowest in the city for home purchase loan acceptance rates with "evidence that credit for home purchase has gotten more difficult to obtain in some portions of the study area [acceptance rates] had decreased by about ten percentage points since [2000]" (pg 56). Despite the low incomes and current limits on capital, there remains significant economic opportunity in the area. The relatively higher population density (30% above the city average) means that, regardless of the low incomes, there is a sizable amount of retail spending by residents. Claritas data shows that total consumer expenditures of neighborhood residents surpassed $66 million in 2004 with a combined total of $21.9 million being spent on grocery store purchases, apparel and health care. The Southtown area has only begun to capture this market and added approximately 20,000 sq ft of commercial/retail space in A full service grocery store and a medical center are located at the heart of the business district. Additionally, a hospital is located on the northern boundary and there has been some expansion in the industrial area to the south over the past twelve months. Despite this growth, a significant retail gap still remains. Unfortunately, Madison Square and the Southtown area hold a strong negative reputation within the broader community. Neighborhood decay and problems that began in the 1960's is a history maintained by the greater Grand Rapids area. This perception has not changed despite some of the more promising economic signs in the past two years. Successful economic development strategies will have to combat this negative image while addressing the needs of low- and moderate-income residents. ECONOMIC EMPOWERMENT To realize the vision the neighborhood cast, an economic empowerment strategy has been developed that focuses on five components to: 1) improve capital flow, 2) expand retail and commercial activities, 3) ensure affordable housing, 4) increase social capital, and 5) improve the area s image. Although there is clear interdependency between these components, an approach addressing all these areas is needed to truly empower residents. 7661cboh06a.doc (sb 01/27/2006) 5

6 1) Improve Capital Flow: Access to capital is an important component of a healthy neighborhood. HMDA and CRA data show that access to capital is more limited in Southtown than in other parts of the city. This may be due to a perceived risk of conventional lenders to investing in an area that is alleged to be declining. It can also be due to residents lacking the skills and knowledge of how to access conventional lending resources. To combat the limits of conventional lending, Lighthouse will work to provide alternative lending sources and training opportunities that connect potential local business owners with these resources, and will seek to improve the financial resources of residents. Private investment alone cannot revitalize the area. Public-private investment is a must to revitalize and maintain neighborhood assets. The Southtown area must have improved infrastructure and routine maintenance of these investments for sustainability. As a result, the Southtown plan includes the following four approaches to improve capital flow: a) Lending - Lighthouse Communities has established a residential lending program (called the Neighborhood Housing Fund or NHF) that provides low interest rehab and second position acquisition loans to homeowners in the area. This program has secured over $2.5 million dollars to be lent over the next two years, and provides homeowners the financial resources needed to improve older housing stock that exists in the area. The program staff also includes a rehab specialist who can assist owners in navigating the construction/renovation process. Lighthouse expects to add to the non-traditional lending resources, a commercial lending product that will provide loans to small for start-up or expansion. These two programs will assist in overcoming the barriers to investing in a low-income neighborhood and are needed to bridge the gap until conventional funding sources are more easily available. b) Training - Many neighborhood residents do not have the skills or experience to start or expand a business. To assist residents in attaining these skills, a training program is being developed in which residents will be linked to a commercial lending product upon completion of the program. It is anticipated that 30 residents or current neighborhood business owners will participate in the program, and at least five will start or expand a business in Southtown within five years. c) Infrastructure - In addition to private capital investments, public infrastructure investments are also needed in the Southtown area. Results of the design charrette calls for significant improvements to the streetscape of the Madison Square commercial corridor, as well as improving lighting in some alleyways 7661cboh06a.doc (sb 01/27/2006) 6

7 and residential area. As plans for the other quadrants are developed, it is anticipated that similar needs will be identified. The City of Grand Rapids is planning substantial improvements to portions of the roads and sidewalks in the area. Efforts will be made to secure funding from the State Department of Transportation and other sources to maximize the impact of such investments and realize the streetscape plans developed by the charrette within five years. For the long-term sustainability of the commercial corridor, opportunities will be pursued for establishing Business Improvement Districts and Community Improvement Authorities. These approaches use self-imposed, tax collection systems to capture dollars from commercial property owners for routine maintenance and beautification of the district. Additionally, a business district façade improvement program will be provided by Neighborhood Ventures. Through this program, business owners can receive up to $5,000 of assistance toward exterior building improvements. Over the next five years, 21 facades will be improved in the Southtown area. d) Increase Resident Income - Immediate increases to the amount of disposable income of residents are a means for supporting area business, sustaining jobs and improving the quality of life for residents. As a result, the Kent County Tax Credit Coalition will provide free tax filing services to low- and moderate-income residents in Southtown. Through this service, it is anticipated that over $2.5 million dollars in tax refunds will be realized by residents over the next five years. 2) Expand Retail Sector: Current trends show that traditional manufacturing is declining across the nation, in Michigan, and in particular, West Michigan. Recognizing this trend, the Southtown plan calls for the rezoning of some industrial land to an Urban Business District. This new zoning will allow for the construction of multi-story commercial and residential space that would be a long-term approach for creating jobs in the area. Adding commercial space is also expected to add value to existing commercial enterprises. Scholarship suggests that as retail sectors become larger, they begin to attract customers from a broader area thus increasing sales per square foot in the district. To encourage and promote the development of such space, the area needs to attract more people to the district to shop. This will be done primarily through creating public space and establishing an annual area event. 7661cboh06a.doc (sb 01/27/2006) 7

8 a) Create a Public Park - The Southtown plan includes creation of a public park along an existing, under-used green space in the southern portion of the neighborhood to provide active recreational opportunities for residents. It is also recommended that an outdoor theatre for public performances be developed. Such a structure could act as a summer concert venue and attract people from the greater Grand Rapids area to neighborhood. b) Organize a Street Fair - Historically, the neighborhood hosted an annual street fair that encouraged residents and others to come to the business district for a day of games, food and recreation. SECA and MSBA are planning to revive this event. This too will improve the quality of life for area residents, as well as provide a marketing tool for to increase exposure to a broader range of potential customers. It is expected that through expansion of commercial property and adding attractions to the area, 150 new jobs will be added to the neighborhood within five years. Although it remains difficult to determine what percentage of jobs will go to existing neighborhood residents, efforts will be made to ensure at least 50 of these jobs are filled by neighborhood residents. 3) Ensure affordable housing in an improving neighborhood: It is a necessary part of any revitalization strategy to ensure that current residents of a neighborhood are provided an opportunity to remain within their communities. To accomplish this goal, two strategies will be pursued. First is the sale of renovated homes to low-income families, and second is the establishment of long-term affordable rental property in the Southtown area. To increase home ownership opportunities in the area for low income families, Lighthouse will continue to buy, renovate and sell homes to families below 80% of AMI. At present, Lighthouse has developed over 20 such units in the City of Grand Rapids including four in the Southtown area. Lighthouse will sell an additional 35 units over the next five years in Southtown to low-income households. Due to the anticipated increase in property values in the area, home ownership should provide these households with significant home equity and improve their economic situation. Although home ownership provides a significant opportunity for equity accumulation, it is not for all residents. It is important that residents who are not ready for home ownership are also provided an opportunity to stay in the neighborhood. However, as property values increase market forces encourage significant investments in the housing stock and rental rates are likely to increase to account for it. In time, renters are forced to leave the area or live in substandard housing. This can only be prevented by adding and preserving affordable rental housing that is owned by an organization dedicated to maintaining affordability regardless of market activity. At present, Lighthouse owns 8 such units in the area. Implementation of the neighborhood revitalization strategy in the area will ensure that over the next five years 200 rental 7661cboh06a.doc (sb 01/27/2006) 8

9 units receive capital improvements while being preserved as affordable over the long term. 4) Improve the Image of Neighborhood: Low-income households experience many barriers to economic empowerment. These barriers are often enhanced when a person lives in an area that has a high concentration of poverty. Economic empowerment of people in such a position cannot be accomplished without addressing these barriers. One such barrier is the negative image that neighborhoods with high concentrations of low-income people contain. The perception that such places are extremely dangerous, lack resources to support or are poor places to raise families are not supported by data, yet drive decisions of lenders, perspective customers, developers, and potential business owners. Thus, a concentrated effort to support positive images of the area must be encouraged to attract and jobs. To do this, the area will positively market itself in the media and through publications, as well as improve its physical environment. a) Marketing Positive promotion efforts will occur to assist in reversing the negative image of the area. Newspaper articles and TV stories that are carefully crafted to promote positive features will be created to combat negative stories that often find their way into the news. Lighthouse has used this approach for the last year in its housing development target area and successfully managed to receive a positive news story nearly monthly in the Grand Rapids Press. It is intended that these activities result in one positive news story per month in either the Grand Rapids Press or other major local media during the next five years. In addition to mass media strategies, it is important to communicate neighborhood assets to specific audiences. To accomplish this, SECA MSBA and Neighborhood Ventures will work collaboratively to produce newsletters, brochures and a business directory for residents, potential business owners and area tourists. b) Physical Improvements - Publications are only one way perceptions are formed of an area. There are many studies that show the state of the physical environment contributes to crime, profitability and general success of an area. To help build a neighborhood image that promotes economic empowerment, the Southtown plan calls for significant beautification improvements to business districts and residential areas. As a result, three annual business district clean ups and ten annual residential clean ups will occur over the next five years. 5) Increase Social Capital: Although much information is attained through media, publications and other conventional sources, even more information is exchanged through informal social networks. Studies have found that in general, low-income people have smaller social networks then higher income people. As a result, low-income people have less access 7661cboh06a.doc (sb 01/27/2006) 9

10 to information regarding jobs, and housing and educational opportunities. This lack of information means that low-income neighborhoods are less connected, less informed and less capable of anticipating and solving problems that arise. To economically empower residents, the social capital of the neighborhood must be enhanced. This will be accomplished using block clubs and special neighborhood events. a) Block Clubs - One way to encourage networking is accomplished is through organizing block clubs. Such clubs allow neighbors to know one another and establish a foundation of trust for sharing resources and information, and increasing personal and neighborhood safety. This type of organizing increases personal connections to the neighborhood and increases individual and family involvement in neighborhood issues and volunteerism. SECA will develop ten new block clubs, while maintaining existing clubs, in the Southtown area that will meet at least six times per year. It is also intended that each club will complete one annual community improvement project over the next five years. b) Special Events - Another way to improve social capital is through events that attract people from across the neighborhood. Establishing annual events like block club parties, street fairs or summer concerts in the area are ways this can be accomplished. Within five years SECA and MSBA will work together to establish four annual neighborhood events. PERFORMANCE MEASURES The proposed neighborhood revitalization strategy will expand on recent developments in the Southtown area to improve the economic wellbeing of residents and, reduce crime by improving the social ties of the neighborhood, expand affordable housing options, and enhance the appearance, image and safety of the area through physical improvements. The first year of implementation will result in the creation of 15 affordable homes, renovation of 10 owner occupied homes, lighting enhancements in the Madison Square business district, completion of 5 business façade improvements, improved marketing between neighborhood and local residents, improved communication of neighborhood activities to residents, and 48 block club meetings that result in 4 resident driven beautification projects. Additionally, there will be an increase in the disposable income of 500 low- and moderate-income residents in the area by an average of $1,000, creating an additional $500,000 available to residents to cover the costs of housing and support local. Finally, business training to local entrepreneurs in the first year will benefit five residents and result in one new business that will serve the Southtown area. 7661cboh06a.doc (sb 01/27/2006) 10

11 The following table illustrates the proposed outcomes for this project that will be implemented from July 1, 2006 through June 30, Southtown Neighborhood Revitalization Strategy Project Outcomes OUTCOMES YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL Increase/Improve Affordable Rental Housing Units/Qty $ Amount $1,600,000 $5,000,000 $150,000 $35,000 $180,000 $6,965,000 Increase Quality and Affordable Home Ownership Planned City Support: HOME $1,000,000 Façade Improvements in Commercial District Planned City Support: CDBG $105,000 Improvements to Public Infrastructure Units/Qty $ Amount $900,000 $920,000 $920,000 $900,000 $900,000 $4,540,000 Units/Qty $Amount $200,000 $200,000 $200,000 $200,000 $200,000 $1,000,000 Units/Qty $ Amount $25,000 $20,000 $20,000 $20,000 $20,000 $105,000 Units/Qty $Amount $25,000 $20,000 $20,000 $20,000 $20,000 $105,000 Activity Streetscape Streetscape Park Streetscape $ Amount $770,000 $3,800,000 $2,300,000 $1,500,000 $8,370,000 Commercial Square Ft Expansion $ Amount $640,000 $1,280,000 $1,600,000 $1,600,000 $2,000,000 $7,120,000 Permanent Jobs Added to district Number Increase income of current residents (tax refunds) Planned City Support: CDBG $35,000 Number of people $Amount $500,000 $500,000 $500,000 $500,000 $500,000 $2,500,000 $Amount $7,000 $7,000 $7,000 $7,000 $7,000 $35, cboh06a.doc (sb 01/27/2006) 11

12 OUTCOMES YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL Leadership and Involvement Increase public safety Improve housing conditions Planned City Support: CDBG $242,985 Increase microenterprise capacity Planned City Support: CDBG $151,600 Non-conventional lending for Home Owner Improvement Non-conventional lending to Microenterprise Total Housing Produced Total Dollars Invested Residents involved # of safety issues resolved # of housing and neighborhood conditions resolved $Amount $48,597 $48,597 $48,597 $48,597 $48,597 $242,985 # of expanded and people trained (technical assistance) 4 6 people 4 6 people 4 6 people 4 6 people 4 6 people people $Amount $31,600 $30,000 $30,000 $30,000 $30,000 $151,600 Loans $ Amount $120,000 $120,000 $120,000 $120,000 $120,000 $600,000 Loans $ Amount $10,000 $50,000 $60,000 $70,000 $80,000 $270, $3,295,000 $8,160,000 $6,670,000 $5,045,000 $4,800,000 $27,970, cboh06a.doc (sb 01/27/2006) 12

13 PROJECT EVALUATION The City of Grand Rapids Community Development Department will be responsible for monitoring fiscal and programmatic performance for the Neighborhood Revitalization Strategy Area, in particular, those activities using Community Development Block Grant (CDBG) and HOME funds. The City will enter into a contractual agreement with Lighthouse Communities for the use of CDBG and HOME funds, with performance outcomes and indicators clearly identified. As the lead agency, Lighthouse Communities will develop subcontracts or memorandums of understanding with its partner agencies. Lighthouse will provide oversight of project completion and effectiveness of all partners in achieving the identified outputs and outcomes. To do this, each program will produce an annual plan indicating milestones prior to implementation. Quarterly, actual outcomes will be compared to plan milestones to ensure that annual objectives will be met. In the event that milestones are not being met, plans may be revised and a corrective action plan will be implemented to ensure outcomes are met by year end. Lighthouse and its partners will conduct an annual review of programs to determine if the strategy outcomes remain appropriate. This will include examination of program results, identification of environmental changes that may impact program effectiveness, and discussion of alternative programming options if necessary. 7661cboh06a.doc (sb 01/27/2006) 13