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_ <br /> l J <br /> . , <br /> i <br /> <br /> The Economics of Mixed-Use Development July 2007 Page 3 <br /> recreational, and transient activities and (b) create a new physical environment on a large <br /> scale to overcome blight in adjacent areas. <br /> • Attaining higher densities and simultaneously creating more amenities and more usable <br /> and pleasant public open spaces. Mixed-use zoning can provide density bonuses that can <br /> help both the public and private sectors. <br /> • Encouraging superior design, creating places where people want to be, by allowing fora <br /> larger design budget and the integration of public spaces. ' <br /> Mixed-use developments require more time, energy, and expertise from the developer as well as <br /> greater skill from the designer. A developer must have greater expertise to handle the larger job <br /> of planning, managing people and capital resources, and political negotiating that amixed-use <br /> development requires. It typically has more intricate planning, higher front-end costs, and <br /> heavier negative upfront cash flows than asingle-use development. The developer must also <br /> have a high appetite for risk. In addition, the design needs to be more skillful than asingle-use <br /> development would require if it is not to be criticized (as many mixed-use developments have <br /> been) for being monolithic, incompatible with existing development, or recreating suburban <br /> sprawl in downtown areas. <br /> When amixed-use project works as a whole, the development can create a sense of place greater <br /> than the sum of its parts, but when one element fails; it detracts from the whole. Compared to 'I <br /> single-use projects, when mixed-use projects fail, they fail on a larger financial and <br /> environmental scale. Mixed-use projects magnify the successes and failures-the risks and <br /> potential rewards-for both the public and private sectors. <br /> LESSONS LEARNED <br /> To help avoid potential mixed-use development pitfalls and bring to light successful smart <br /> growth practices, several lessons learned from previous ECO studies are summarized as follows: <br /> • Developments need to take advantage of site characteristics. Successful centrally located <br /> mixed-use developments couple desirable commercial space with desirable residential <br /> space to take full advantage of their central location. Successful developments take <br /> advantage of natural features on the site, such as lakes and views, providing opportunities <br /> for community green space to be incorporated into the site's development. The corollary <br /> to taking advantage of a site's characteristics is the need to consider site constraints. In <br /> some- cases, fragmented land ownership poses a problem to development and street <br /> connectivity. In others, the proximity of industrial land to the site may restrict the types <br /> of development that may occur there. <br /> • Proactive work by cities facilitates mixed-use development. Cities may take a proactive <br /> approach to rezoning sites, creating asmart-growth friendly area, or master planning the <br /> area. Less proactive roles by cities slow the development process, adding to the developer <br /> costs. <br /> • Mixed-use developments frequently proceed in phases with residential coming first, and <br /> commercial following. By incorporating commercial space in later phases of <br /> development, the developer helps ensure an adequate consumer base within the area to <br /> keep businesses profitable. <br /> i <br /> <br />