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Think downtowns don’t matter anymore? Think again, thriving cores often mean thriving cities

While there’s some question how much direct benefits arenas and convention centres can have,  municipal policies that support city cores produce healthier downtowns that lower the tax burden on ratepayers and spur investments that benefit whole communities
There is huge anxiety that removing Sudbury Arena from downtown will worsen the already challenging environment in the area. In particular, there are concerns the casino-arena-hotel development on the Kingsway will draw people away from downtown, creating a new economic district that will compete with the already struggling area. (File)

Let’s start with a downtown horror story.

The tale heats about five years ago — but began decades earlier — in the U.S. city of Detroit. As the middle class flocked to outlying communities beginning in the 1960s, the Motor City’s core declined catastrophically, suffering what's called the “doughnut effect”: development all around downtown Detroit, leaving vacant commercial land in the centre – land the city couldn't afford to maintain properly because of a shriveling commercial and residential tax base.

Entire neighbourhoods were virtually abandoned – 80,000 buildings were vacant or crumbling – and 40 per cent of streetlights didn't work. The city declared bankruptcy in 2013, citing a $19-billion debt it couldn't pay.

No one is arguing Sudbury's downtown faces anything close to what Detroit went through, but there is huge anxiety that removing Sudbury Arena will worsen the already challenging environment in the area. In particular, there are concerns the casino-arena-hotel development on the Kingsway will draw people away from downtown, creating a new economic district that will compete with the already struggling area.

Changing face of downtowns

For decades, downtown areas in North America have struggled as major retailers flocked to suburban malls or, more recently, to online shopping.

That reality was hammered home in Sudbury in January when the people who own the Rainbow Centre made a plea to city council to locate the new art gallery and library – even the convention centre – in the downtown mall.

“Everybody knows the retail environment all over North America is dying,” Robert Green, project co-ordinator with Vista Sudbury Hotel Inc., said at a January news conference where the company argued its case. “On the retail side, the general strategy we have is to go more toward services.”

The Rainbow Centre, like many parts of downtown, has focused in recent years on attracting non-retail tenants. It now hosts several government offices, for example, but has never fully recovered from the loss of Eatons 18 years ago.

The problems at the downtown mall reflect the larger challenges city centres across the continent are facing. 

Not only have consumers fled to suburban malls, they also have become accustomed to the idea of being able to drive close to the mall, park for free and walk right in. 

Perception is everything

The lack of retail is a double whammy, said Dr. Pierre Filion, who teaches at the University of Waterloo's School of Planning. Not only does it remove people from downtown, it also increases the relative population of poor people, who can intimidate the general population when they are downtown for whatever reason.

“The reason for that is, if you're homeless, where else can you go?” Filion said. "Where do people who don't have a car, who have precarious living conditions, where are they going to go? They're going to gravitate downtown.

"So in a way, they don't have any choice. And it does create an environment where people say, I don't want to go downtown because it has all those people there and I don't feel comfortable."

To overcome that, Filion said cities need to give people a reason to come downtown, and to live downtown. He cited the case of Toronto, which has a high population of vulnerable people in its downtown, but the area is thriving because there's so much to do, and lots of people walking around, making everyone feel safer.

"If you don't have those activities, and those other people, then what you get is this perception of downtowns as where people are panhandling or seem to be threatening," he said. "So in a way, it's a chicken or egg situation. If you don't have an arena, you're removing a reason for people to go to downtown.

"Arenas are a major component, because they do bring in a lot of people at a given point and time," he said, bringing people to the area at a time when there's not a lot other activity going on.

And the less familiar people are with downtown, Filion said, the more threatening it can appear to them. Whether the fears are grounded in reality is beside the point, he said: the perception can take hold and people will avoid downtown.

Clusters are key

Dr. Tony Hernandez, director of the Centre for the Study of Commercial Activity at Ryerson University, said many cities are building arenas downtown as part of a broad goal to group public and other uses in the area.

“The key to success for most larger downtowns is in their ability to cluster economic, commercial, public service, health care, educational, and other cultural activities, such as, theatres, sports arenas, etc.,” Hernandez said in an email.

“The idea is that the clustering of a broad range of activities serves to create spinoffs — with the activities benefiting from being in close proximity to one another. Downtowns have traditionally been the major hubs of employment, (but) the suburbanization of employment and other activities has placed added pressures on downtowns.”

It has to be a two-pronged approach, Hernandez said, in tandem with finding ways to get more people to live there, too. 

“Much of the current government urban smart growth policy in Canada is geared towards increasing employment and residential densities in existing downtown areas,” he said. “To foster live-work-play communities.”

Tax burden, or why you should care about downtowns

Much like his counterparts, Dr. Kevin Curtis, also a lecturer at the University of Waterloo, said getting more people to live downtown is key. Many cities are focused on attracting a mix of retired people looking to live somewhere they can walk to access services, as well as young professionals looking for diverse entertainment options, giving them a reason to move there.

That's important because downtowns are where there's extensive infrastructure that is older and must be maintained. If cities allow downtowns to fail, that means homeowners will have to bear a larger burden of the tax base.

"You can't afford to have a place as large as a downtown, that traditionally generated a lot of the assessment growth and employment, and have it not performing," he said.

"You do that, and developers will say, OK, I can sell that. It makes sense in the market."

"If you don't, if businesses leave and you don't find something to replace them with, the overall assessment goes down and you're shifting more of the burden on residential taxes," he said. "At some point, taxpayers will notice. And when they ask their city councillor why their taxes are going up, that's the answer."

Aside from practical realities, he said perception is a huge issue for developers, who often judge whether it's worth spending money in a city on the state of downtown.

"A lot of people, when they're thinking of moving or investing in a place, are heavily influenced by the state of a downtown,” he said. "So there's an image issue, and also the financial reality issue."

Curtis agrees that attracting more residents to the downtown is essential if a community wants a healthy downtown. And to do that, developers need to be offered a mix of financial incentives — and the city has to work to make it an attractive place to invest. 

"Where planners have been saying the last 10 years or so, is the greatest opportunity in revitalization of downtown lies in using many of the underutilized lands and buildings for new residential development,” he said. “And that development spurs new service and retail uses and helps create a more vibrant identity for downtowns. The alternative is to have that land sit there for 10 years and you're not going to get the assessment."

Arenas important but might not spur growth

Curtis disagrees, though, that arenas are part of the type of developments that generate economic activity, aside from simply occupying a significant amount of real estate (which has some value in itself). 

Cities such as Hamilton have built downtown arenas expecting development to occur around the rink, only to find that those areas remain vacant years later.

"One of the traditional critiques of arenas, and convention centres, is that people don't spend much outside of them," he said. "You can point to places like Windsor or Kitchener, where they say they haven't got the kind of benefit that we were hoping to get. It hasn't helped stimulate investment on the rest of main street.

"Guelph, London, St. Catharines, Hamilton, Kingston, Winnipeg — all have arenas, quite a few of them are new — and they put them downtown. But in Kingston, for example, they put the arena downtown, and the property adjacent to it has been vacant for a number of years now. And it's right on Tragically Hip Way."

Hamilton put Copps Coliseum downtown, expecting development around it, but “the development never happened.

"But when you get residential development in there, and you get that critical mass of people that allows new restaurants and entertainment facilities of all kinds to say, OK, there's a reason for us to be downtown," he said. "Then other people see that, and there's a domino effect. More people say, I can find (a place to live) and when I do, there's stuff to do there. And then more developers start to look at the area."

What's needed is development that will appeal to people who live in the area, or are considering moving. That's why cultural amenities are most important. It's more likely people will go out to dinner when they go to an art gallery, a concert or the symphony, for example. And they're more likely to frequent those cultural amenities if they already live downtown.

"A theatre or something like that, that's the kind of thing that offers more opportunity for spinoff effects," he said.

While there has been much talk that the city is violating planning rules by moving the arena, and that an economic impact study must be done first, Curtis says there's nothing in provincial planning rules that requires it beforehand.

The issue, he said, is those studies are open to a lot of interpretation and can be geared toward a specific conclusion – either agreeing or disagreeing with the decision.

"Depending on your assumptions, you can come up with various opinions of what the economic impact will be," he said. will be carrying live coverage of tonight’s city council meeting, which includes a vote on whether to accept the planning committee’s recommendation to rezone and OK an official plan amendment, which needs to be done to allow the Kingsway Entertainment District project (arena/event centre, casino and parking lot) to proceed.

The meeting starts at 6 p.m.