Last week Common Current published its top sustainablity stories of 2008. More than half of the stories had implications for businesses including the “highest gas and oil prices ever.” The high gas prices caused people to want to live near retail districts. According to the Robert Wood Johnson Foundation, people would rather have “walkable retail districts” than golf courses in their neighborhoods. The International Economic Development Council cites mixed-use developments (MUDs) as a real estate trend across the U.S.
In a tough economy where consumers are less likely to spend money, MUDs have advantages for businesses. A study by the University of Wisconsin-Extension cites several advantages of mixed-use development, including the expansion of “market opportunities,” and more “customer traffic” from occupants of the development. According to the Condo Hotel Center’s website, MUDs offer “enhanced viability” over individual developments, allow development to be accelerated, and offer the opportunity to “spread or reduce by having investment revenue flow through multiple revenue streams.
The 1999 survey “Emerging Trends in Real Estate” said that mixing commercial and residential real estate is more beneficial in urban environments and creates stronger investments.
Commercial real estate in general has economic benefits. The development, construction and operations of commercial real estate create a “ripple effect.” The ripple effect is “derived from the respending of the salary and wages supported by direct construction and operating outlays and purchases of construction-related materials and services from vendors.”
The Regional District of Nanaimo, a town on Canada’s Vancouver Island, believes that “concentrating growth” in areas that already have water and sewer services enables municipalities to “reduce infrastructure servicing costs, while diversifying and growing their tax base.” MUDs can save developers up to 20 percent and “increase efficiency of land up to 30 percent over conventional development.”
Cities benefit from MUDs
A proposed mixed-use development proposal in Boone County, Indiana would bring “significant economic benefits,” according to a case study. An annual economic impact of $19.2 million would be created through direct sales plus supplier purchases and employee purchases. During the first year of the development’s operation, 154 jobs would be created in Boone County which then would support an 82 indirect jobs at other businesses throughout the county.
A MUD is planned for Monterey Park in Southern California with the hope of keeping tax revenue in the city. The development will include a movie theater, retail businesses, and condominiums. “It will hopefully inflate sales tax revenue in the city to a point where we can capture funding for future projects,” Interim Economic Director Rick Gomez. “We can entice more retailers, which will create more jobs; it helps with the overall synergy of the area.”