A lot of cities with iconic industrial remnants are looking to imitate NYC’s High Line park these days, and I think that’s awesome. Repurposing this stuff to create interesting public spaces for people to enjoy is a great way for cities to add value for their residents and increase tourism and development.
But as always, there are different ways of approaching these projects and some are going to be more effective than others at promoting development and other positive effects.
Here’s a post I did on this over at the other blog on Bethlehem’s plan to create an elevated park on the Hoover-Mason Trestle that runs along the Bethlehem Steel blast furnaces, and why value capture is a better way of funding it than a TIF. It’s long so I’ll put it below the fold.
Turning the Hoover-Mason Trestle into an elevated park on the Bethlehem Steel site sounds like a much better idea to me than building a parking garage. I got to explore the Trestle a few times sneaking into the blast furnace area as a young scamp, and can attest that the view is seriously epic. If done well, this would be a real regional attraction.
John Callahan compares the idea to the High Line:
The sites are currently connected through East First Street, but officials said they believe the restored trestle would add another destination itself because of the great views it provides of the blast furnaces, the Steel site and the city. Callahan likened it The High Line, a linear park in New York City created from a former rail line [...]
Callahan said he believes the trestle’s restoration could be key to stimulating more development on the site, particularly the large No. 2 Machine Shop, near which the trestle runs. Sands owns the machine shop as well as the trestle and has been especially pushing the trestle’s restoration, officials said.
Bethlehem Steel used the trestle to carry ore cars from the ore yard — now the site of the casino — to the blast furnaces.
ArtsQuest President Jeff Parks said the SteelStacks campus gets some walking traffic from Sands, which he thinks would increase with the trestle’s restoration. He pointed out how the trestle could be much more than an elevated sidewalk, and with signs, used to tell the story of the Steel site.
I think Callahan’s comments here offer a good illustration of why value capture would be a better way to finance this project than Tax Increment Financing.
Callahan says the project could stimulate development, and I agree, but it’s important to understand why this would happen.
The reason the High Line park succeeded in spurring development is that it increased nearby land values. And the reason it increased land values is that the park is really nice, and people want to be near it.
More people started wanting to live near the High Line, work near it, and go shopping or eat and drink stuff before and after they went to visit it. The supply of land is fixed – you can’t make more land near the High Line – but the number of people wanting to use the land grew, so the price of the land got bid up.
This is the same story of what would happen if Bethlehem turned the Hoover-Mason Trestle into a nice park. The land next to the park on the Steel site would increase in value. This would create a profit-making opportunity for people who own land abutting the Trestle to charge people to use the now-more-valuable land for commercial or residential purposes.
Under the value capture (land tax) approach, Bethlehem would tax the publicly-created windfall in land value on private land next to the Trestle and use it to pay for the park improvements.
This would have two main benefits. First, by taxing the land instead of the building improvements to the No. 2 Machine Shop and other new buildings, Bethlehem would be offering a tax abatement on property improvements that would encourage new building. There’d be no tax on the property investment, only the speculative value of the land. It’s a Tax on waiting to build, rather than a tax on building. The effect would be even stronger if the BASD followed suit.
Second, this would encourage denser, more compact development on the Steel land next to the Trestle, some of which is now being wasted on surface parking lots. Not sure if these lots are government-owned, but if they are, it would be important to sell them off ahead of the value capture implementation.
Looking at a big parking lot from the Trestle would make for a crappy view, and it would be a total waste if the land value windfall from the park just accrued to a government-owned free parking lot.
It’s not like you could use that increase in value to reduce taxes or something, since a free surface lot is a non-performing use and is not producing any revenue.
And also the park is just going to be way better if it’s flanked by interesting buildings rather than empty space, and having a greater density of stuff to look at while walking the Trestle will also serve to encourage more walking between Sands and the Artsquest side of the Steel site.
(Thanks: Lynn Olanoff)