Urban-waterfront developments: a geographic problem in search of a model

Geofomm, Vol. 20, No 4, pp 459-W Printed m Great Britam

oolfF7185/89$3 oo+o.Oo Pergamon Press plc

1989

Urban-waterfront Developments: a Geographic Problem in Search of a Model

NIELS

WEST,*

Kingston,

RI, U.S.A.

Abstract: A modified version of the economic rent model is applied to the significant urban-waterfront changes which have characterized most European and North American port cities during the twentieth century. The model is at this stage conceptual, although supported by case studies, and employs elements which are characteristic of the majority of waterfront renewal literature. The model addresses four different conditions, three of which trace the evolution which has characterized the traditional inner-city port. The first analyzes the conditions prevailing prior to the late 195Os, when most ocean cargo still used the traditional harbor. The second application of the model relates to the dynamic changes which started in the late 1950s and lasted approximately 20 years, a period in which many piers and warehouses were abandoned and destroyed. The urban-waterfront renewal efforts which have occurred in both Europe and North America are analyzed in the third phase, which emphasizes boundary changes and potential and real economic rent windfalls accruing to landowners in the path of or adjacent to proposed urbanwaterfront renewal efforts. The final application of the model reviews the impact on both economic rents and land uses of improvements to the shore and nearshore marine environment.

Introduction

summarize past urban-waterfront developments. With further refinements, the model may be extended to enable the projection of future land-use changes along the inner urban waterfront.

The literature dealing with the urban waterfront has grown considerably in recent years, yet the vast majority of these have been case studies.’ Virtually no papers have attempted to classify and model the problems associated with the dynamic changes occurring in ports and harbors. This dearth is particularly troublesome, given the numerous urban-waterfront renewal efforts underway in both North America and Western Europe. This paper uses a modified version of the economic rent model* for the purposes of describing the temporal changes which have taken place within inner ports and projecting future changes in this environment. While the model is conceptual, it appears to *Department of Marine Affairs, University Island, Kingston, RI 02881, U.S.A.

of Rhode

459

In its classical version, the economic rent model is based on the hypothesis that land use is a function of economic accessibility or marketability. Consequently economic rents are hypothesized to be the highest in the central business district (CBD), which generally caters to capital- and labor-intensive activities. Land uses located farther away from the CBD command lower rents unless local conditions are made particularly profitable by improved access. BERRY et al. (1963) have successfully shown that economic rents are affected by improved accessibility. This may be accomplished by more and/or better roads although simple accessibility is no longer the only factor affecting the probability of business success or failure. Environmental amenities are increas-

460 ingly influencing will be discussed

Geoforum/Volume business decisions, a point at some length later.

which

20 Number

4 1989

The second factor limiting the utility of the economic rent model relates to the static nature of the model, particularly when used graphically. Data and information on which the model is based traditionally represent the condition at one point in time. Each economic rent estimate represents a particular stage in the evolution of the urban environment.

land uses are illustrated in Figure 1. Although the model is highly idealized, especially those centered on the CBD, the functions commonly found on the inner-city waterfronts of Boston, New York, Los Angeles and other major port cities were by and large, port- and shipping-related. Individual shipping lines often owned or leased substantial areas of the waterfront to insure adequate dock and warehousing facilities. In fact, the ownership pattern of many waterfront properties is often complex and, according to SCOTT (1973)) has posed a serious obstacle to redevelopment efforts. During the early part of the twentieth century, prior to the development of the Federal Highway System in the U.S. and comparable systems in both the U.K. and on the Continent of Europe, many railroads also acquired substantial areas on or adjacent to the piers. Some of these areas were used to service the break-of-bulk functions, others were used as switching yards to accommodate the growth of shipping and the diversity of products carried. This situation characterized both European and North American ports almost without interruption during the first half of the twentieth century (BELCHEN and LINVILLE, 1971).

Third, the model is based on empirical data, which makes its general application difficult. For these reasons, land-use change over time has usually been represented in the form of maps illustrating land uses at the time the data and/or information was collected. The map reader inspecting these ‘sequent occupancy’ events has to infer the changes in between the mapped events.

Land use along much of the waterfront on both sides of the Atlantic was dominated by marine, rail and, later, road transportation and associated activities. Furthermore, landholdings were on the whole larger than the average city lot, a characteristic which may also have contributed to a delayed conversion of many waterfront lots to other uses during the 1970s and i98Os (MOSS and DRENNAN, 1976).

Since the late 1950s the urban waterfront in both Europe and North America has undergone significant technological change, which has been documented in numerous papers (ANON., no date), conferences and seminars3 on both sides of the Atlantic.4 Consequently, these will be addressed only insofar as they have affected the economic rents of the piers and the warehouse districts (HERSHMAN et al., 1978).

Theoretual Waterfront Associated Economic Rent Curves ,900 1950’s

Although the economic rent model has been an important geographical conceptual model, it has generally not been useful in applied contexts. There are several reasons for this. First, the model is based on a central location, from which the economic rents decline and the resultant land uses change. Some studies have utilized variations of the model to measure landuse changes at highway exits. Other studies have measured the value of land adjacent to highways with unlimited egress, which often results in the development of strip shopping centers. The economic rent model, however, has not been applied to measure the land-use changes along the waterfront.

The traditional inner-city port consisted of piers extending perpendicular from the bulkhead line fronting a linear district of warehousing and stevedore companies. This area represented a linear use of urban land. Furthermore, these land-use activities were able (at least until the middle part of the twentieth century) to compete successfully with other urban land uses lying in between the CBD and the docks. The economic

rent curves

and resultant

generalized

CBD ASSOC Land Uses I

Shore

_I CE3D

Figure 1. Generalized economic rent curves and associated land uses, modified after GARRISON et al. (1959).

GeoforumNolume

20 Number

While similarities between North America, the U.K. and the rest of Europe outnumber differences in the morphology of the port-associated land uses, there are significant variations in the manner in which these areas have developed during the past 10-15 years. One important source of variation lies in the way the land-based transportation system has evolved. In North America, the road network was stimulated by the eventual need to connect coastal cities by road as well as by ship. During the early Colonial Period, transportation and communication were primarily overseas with the mother country, principally the U.K. and France (ALBION, 1939). During this period, intra-coastal trade was undertaken by ship. Only later were the early settlements connected by roads paralleling the shoreline. The Old Post Road (today’s Route 1) connecting Northern Maine with the Florida Keys is one such example. By contrast, in Europe, the construction of roads in most instances antedates the establishment of many of today’s leading ports and, to this day, few European waterfronts are dominated by roads and railroads as is the case in both Canada and the U.S. The implication of these early developments was not really felt until the latter part of the twentieth century, following the migration of most of the traditional port functions to outlying areas (COWEY, 1978). When the U.S. Federal Highway System got underway in earnest in 1956, the practice of building along waterfronts was often repeated for several reasons. Coastal areas and river flood plains are level and, therefore, relatively easy to build on. Historically, these areas were often occupied by low-income and/or ethnic groups, which in the 1950s had not yet realized the potential political muscle that enabled other groups to oppose those road constructions which impacted their neighborhoods. From an urban land-use perspective, these physical developments represented very formidable obstructions when urban-waterfront redevelopments began during the 1970s and 1980s.

Urban-waterfront

461

4 1989

Abandonment

The technological developments which made the inner-urban port largely superfluous for traditional shipping resulted in a dramatic decline in waterfront activities. Land-based impacts resulting from the demise of the conventional general cargo vessel and the smaller bulk carrier have been addressed extensively in the literature and will not specifically be dealt with here. They did, however, result in an almost

wholesale abandonment and other service-related

of piers activities.

and warehouses,

The adaptive reuse of these potentially very valuable waterfront properties did not take place for several years. There are several reasons for this. During the 1960s and extending into the 197Os, the waterfront was perceived as industrial wasteland, potentially dangerous to individuals, who on occasion might find their way down to the docks. While no studies were undertaken during this period on the general public’s perception of the waterfront, it is clear, based on popular writings, several films and innumerable news articles, that the waterfront was then perceived not as an area of economic and social opportunity but as a wasteland to be avoided. The decline of the waterfront in the U.S. coincided with the massive urban-renewal efforts undertaken in numerous older cities throughout the country. The causes of the urban decay and of the deteriorating conditions along the waterfronts, however, were fundamentally different. Urban-renewal efforts emphasized the central part of the city and were based on the faulty notion that the prevailing social conditions in many cities could be rectified through a technical fix: i.e. the tearing down of old structures and replacing them with new constructions. The decay which took place along the waterfront resulted from an inability to adapt existing structures to new and innovative uses. It was, of course, the combined effects of new shipping technologies and the economic environment resulting from these technologies that precipitated much of the physical decay within the traditional port. Equally important, however, was the inability of the key players to come together to organize and plan for the recycling of these potentially very valuable properties. The developments outlined above are depicted in Figures 2 and 3. CBD-associated land uses in Figures 2 and 3 remain more or less identical to those associated with the previous period, except that thewaterfront economic rents are significantly lower. This reflects the depressed levels of economic activity during the late 1950s the 1960s and the 1970s. Figure 2 illustrates the average or aggregated conditions prevailing along the waterfront. Property values have been averaged for all of the docks, warehousing and stevedoring activities along the entire waterfront. This is comparable to the classical urban economic rent model, in which all of the economic rents are aggregated for a given economic activity associated with a particular concentric region. A decline in

Geoforum/Volume

462 TheoreMal Waterfront Assoaated Ewnomlc Rent Curves 1950’s 1970’S

1

CBD ASSOC Land Uses

Shore

DlstanCe

CED

Figure 2. Pier-associated

rent curves that have declined and merged with warehousing and related land uses. Generaked Economic Rent Surfaces 8 Associated Land-use D~slwts wfh Isolated Waler Dependent or Water Enhanced Uses Prwx to urban Waterfront Renewal IPer

use

Poe1use : II If: !I

t

: _.

AbandOned : Warehouse_b

Figure 3. Generalized economic rent surfaces illustrating isolated water-dependent or water-enhanced uses prior to urban-waterfront renewal.

traditional inner-harbor activities has impacted the economic rent in several ways. Economic rents declined relative to most other urban land uses throughout the waterfront region and in a few instances fell below the economic rents one would have expected had there been no waterfront at all. The decline of the pier rents and eventual merger with the lower economic rents associated with warehousing and other transportation land uses also resulted in an inland-moving land-use boundary. This phenomenon was first identified by SINCLAIR (1967). During the height of the movement to the suburbs, it was noticed that farms located in the path of residential developments appeared to deteriorate

20 Number

4 1989

physically. Farmers, it was concluded, recognized that the value of their homestead was related to its locational attributes rather than to the quality of the farm’s resources, including soil, drainage and the buildings associated with farming. Consequently, efforts to maintain barns and fields declined, a phenomenon which it was claimed could be identified several years prior to the subdivision actually taking place. A similar development appears to have occurred along the waterfront, albeit for different reasons. The economic viability of the docks declined, with direct implications not only for the docks but also for the marine-dependent land uses lying inland. The physical deterioration of many docks and warehouses which had been in evidence along most urban waterfronts during this period strongly supports the Sinclair hypothesis. Figure 3 illustrates the economic rent curves associated with the parts of the inner-urban port which retained some of the economic activities associated with water transport. Some ports retained ferry slips, fish markets and associated activities, while others used portions of their waterfronts for storage of salt, sand and, in a few instances, coal. Other waterfront properties became parking lots, and quite a few police departments used abandoned piers for the storage of impounded vehicles. London developed a STOL (short landing and take off) airport while New York constructed a helicopter port on the East River and an expensive cruise terminal on the Hudson River. The latter was an attempt to retain a portion of the transatlantic passenger trade, which unfortunately did not work out as planned. Many of the luxury passenger liners which were converted to cruise ships moved to Florida and California (CLARK et al., no date), and the remainder were eventually sold for scrap. Since such activities generally do not cover the entire waterfront but represent isolated economically viable activities, they should be viewed as secondary centers of economic activity located away from the CBD. This is analogous in the conventional application of the model to neighborhood shopping centers, which act as peaks in the classical CBD-centered economic rent model. For this reason, the economic rents and the spatial impacts are curvilinear, extending outward from the facility as well as along the waterfront. As redevelopment efforts expand, the curvilinear boundary will tend to straighten and become parallel to the shoreline, so approaching the conditions illustrated in Figure 2.

Geoforum/Volume

20 Number

4 1989

There are, however, important differences between the conventional CBD-associated economic activities and those identified along the waterfront. First, waterfront economic rents resulting from these activities are generally lower than those associated with the CBD. Secondly, the economic rent curves associated with water-dependent activities are usually much steeper, i.e. covering a much narrower area compared to most other activities. The implication of this is that the economic benefits associated with fish markets, ferry terminals, and other nonconventional inner-port activities are limited to the site itself. Few economic spillover effects appear to benefit neighboring properties. On the contrary, some of these activities may be associated with economic and environmental diseconomies. These may include increased traffic, in the case of ferry terminals, waste pollution, noise and smell, all of which may act as detriments to potential investors and land developers.

Urban-waterfront

Redevelopments

Urban-waterfront redevelopment in the U.S., the U.K. and the remainder of Western Europe has taken quite different paths. In the U.S., the massive urban-renewal efforts which transformed many city centers during the late 1960s and extended well into the 1970s rarely included the waterfront. In the relatively few cases where federal funds were spent along the water, such investments were often made to improve transportation. Several highways were constructed along the waterfront during this period, presumably because the waterfront was perceived by the transportation planners as an area of minimal social and economic resistance. Federal highways were, for example, constructed in Philadelphia which effectively cut off the Penn Landing Waterfront project from the rest of the historical part of the city. Similar developments occurred along the Louisville, Kentucky, waterfront. Boston’s extensive waterfront-redevelopment efforts have been seriously hampered by the elevated Southeast Expressway, which is perceived by most pedestrians as as real barrier between the waterfront and the Quincy Market lying inland from the shoreline. The socioeconomic success of both the waterfront scheme and the Quincy Market have in turn led to serious consideration of relocating the expressway below ground through the downtown area. Finally, a massive project was proposed in New York to replace the now abandoned West Side Highway, which also paralleled the Hudson River shoreline. The New York project

463 has since been substantially modified but has still not been given a go-ahead, albeit for different reasons than protecting the historic waterfront. In the U.K., the planning tradition has historically been quite different, influenced to a considerable extent by the experiences gained in both Canada and the U.S. British projects appear to cover larger areas than do those in North America. Initial funding has often been made available by Parliament, through the establishment of Crown Corporations, and a greater emphasis is placed on mixed uses, including low- and middle-income housing. The traditional social-planning component appears to have played a stronger role in both Britain and Canada than in the U.S., where economic considerations have been the dominant force stimulating and implementing waterfront renewal efforts. Continental efforts represent yet another dimension. While the same factors leading to the abandonment of the inner port have been present, the need to develop and readapt former warehouses etc. to new functions (many of them not water-dependent) has been a continuing process. In the U.S., a lO--15-year lag was experienced between abandonment and revitalization. However, in Europe, where space regardless of location tends to be at a premium, the need to find new uses for the sites was generally recognized earlier. Reference has already been made to the studies addressing urban-waterfront problems, particularly in North America. What has been learned from these efforts? Although exceptions undoubtedly exist and with a recognition that overgeneralisation may be dangerous, a number of common features can be discerned. First, the hypothesis has emerged that real-estate values are positively correlated with the perceived amenity value of property. This hypothesis has been addressed in a number of different environments, including properties adjacent to parks (KITCHEN and HENDON, 1967) and lakes (DARLING, 1973; WHITMAN et al., 1971). Second, the majority of redevelopment projects have been concerned with very small areas when compared with the total length of the waterfront. Even in the cases of Baltimore and Philadelphia, where projects were located very close to the downtown area, the actual size of the projects in terms of length of shoreline within the city was quite small (POLITES, 1973). Until 1985, the only waterfront revitalization project of any major significance in New York City

464 was the South Street Seaport: its total length (including the recently completed commercial Rouse project) of less than 1 mile, however, represents a small fraction of the more than 540 miles of shoreline within the City of New York. The underlying assumption of the South Street Seaport was that economic spillover effects would diffuse, benefiting both business and the general public.

The third broad generalization concerns the economic and political arrangements made in order to get most projects underway. Considering the many governmental agencies with jurisdiction over the waterfront (MORRELL, 1976)) the organizational arrangements have often been more time-consuming and difficult than the construction of the new facilities themselves (BENKENDORF, 1981) [see also DESFOR et al. (this volume)]. Several important factors have contributed to this, including the high costs of providing even the basic infrastructure and the complex ownership patterns which characterize most waterfronts. Several administrative models, involving state and federal governments, local governments, private and corporate landholders and financial institutions, have been developed in an attempt to facilitate the renewal process (GLAZER and DELAPORT, 1980). Fourth, projects organized in smaller cities and towns have had a greater impact upon the community than have those in larger cities. The spillover effects of the more successful projects in some cases have had significant adverse social and, in some instances, economic impacts on the community. The case of Newport (Rhode Island) can be used to illustrate these points. Newport has a long maritime tradition extending back to its Colonial period, when its commercial fleet actively participated in the triangular trade between the Northeast, the Caribbean and England. Until the early 1970s it served as the home port for a flotilla of U.S. Navy (USN) destroyers, and it remains the home of the Navy’s War College. The city also served as a base for many training facilities and until recently has been one of the two principal fishing ports in the state. During the early 1970s the USN severely curtailed its activities. While the educational facilities remained, the fleet (along with support personnel) was transferred, a move which had a severe impact on the city’s fiscal, social and physical infrastructure. In retrospect, two events appear to have provided the impetus for the city’s subsequent economic revival.

GeoforumNolume

20 Number 4 1989

The visit to Newport of Operation Sail (OpSail) during the country’s centennial year of celebration in 1976 was the first of many similar Tall Ship gatherings around the world. There is little doubt that such events did much to revive interest in maritime history. OpSail’s early visit to Newport contributed to the city’s growing reputation as a maritime-oriented community, catering especially to the boating public. The periodic defense of the America’s Cup, which until 1985 was conducted in Block Island Sound, with Newport as the racing center, reinforced the city’s reputation. Other transatlantic and around-theworld races, which in recent years either terminated or originated from Newport, further established the city as one of the leading boating centers in the U.S. The long-term economic impacts of these events are difficult to gauge: however, it is clear that Newport’s reputation has stimulated a continuing waterfrontredevelopment spree which has now diffused to neighboring towns and communities. Real-estate values during the past 10-15 years have quadrupled. Inevitably, this has adversely affected low- and middle-income households attempting to enter the property market: both cheap houses for purchase and low-income rental units are now rarities. Pressure on owners of rental properties to upgrade and convert (sell) apartment buildings to condominiums is very strong, not only in Newport but also in other cities and towns perceived as attractive recreational and/or retirement communities. Another common impact on smaller communities concerns the increases in real-estate taxes. Property taxes have often increased because of the rapid rate of new construction and because revaluation for purposes of tax assessments appears not to have kept pace with the inflated real-estate market. A growing population requires schools, sewage treatment, and other municipal services, so placing additional demands on a city’s physical infrastructure and on municipal budgets. The traditional manner in which communities confront such problems is to increase property taxes, which tends to have regressive impacts on both low-income households and the most recently arrived citizens. The majority of the renewal efforts characterizing North American waterfronts have been waterenhanced as opposed to water-dependent5 activities. Included among the former are up-scale restaurants, hotels, condominiums, giftshops etc., nearly all of which capitalize both economically and environmentally from their waterfront location. Most

GeoforumNolume

20 Number

4 1989

of the traditional water-dependent usages, including marinas, boatyards (STERNLIEB, 1969)) saillofts etc., are low-profit operations. Many owneroperators of marinas and charter boats are engaged in these activities, not because of the profit motive, but because of the perceived amenities associated with working on the water’s edge (ABBAS, 1978). The real profit of the traditional marina, charter boat and baitshop owner is commonly not realized until the business is sold at a premium price. In numerous instances the price demanded is so high that a similar water-dependent business cannot meet the asking price and also expect to make a profit. The net result is that the property is sold for nonwater-dependent uses (CLARK et al., no date). Another characteristic of many waterfront-renewal efforts is their spatial concentration and the diversity of merchandise and services offered under one roof. The concept is similar to that of the department store, where merchandise availability is related to customer attraction: it is clear from the range of goods and services on offer that the customers being attracted are the well-heeled, enjoying passive recreation in an attractive water-enhanced environment. There are, of course, exceptions to this theme, Granville Island in Vancouver, British Columbia, being a case in point. Concerted efforts have been made to integrate traditional water-dependent and industrial usage with water-enhanced uses which cater for tourists and local residents alike. The impacts of urban-waterfront renewal efforts can be summarized in graphic form (Figure 4). Since the majority of these developments are relatively small, they should be analyzed as individual enterprises. Consequently, the impact associated with each development is spatially limited to the immediate surroundings of the project. Only in those smaller waterfront towns and cities where waterfront projects have ‘taken off’ economically, will the impacts be felt along the entire waterfront. Initially the impact of the new water-enhanced projects parallels that of the more successful, traditional water-dependent industries, such as fishing piers, processing plants, and ferry terminals (Figure 3). However, in time, and as water renewal diffuses along the shoreline, a number of differences between the two types of development can be discerned. First, the economic rent curves during the most recent period have increased and the gradient of the curves has flattened. The original land-use boundary

465 Land-use Boundary Changes & Economic Rent Increases Following Urban Waterfront Renewal.

er Renewal.

Y2

Y.

X,

Shore

Figure 4. Generalized economic rent curves following urban-waterfront renewal. Point x marks the pre-1950 boundary between pier uses and warehousing and associated uses. Point yr refers to the economic rent associated with property located at point x. The difference between yr and yz reflects the economic rent increase at point x from urban-waterfront renewal. the former marine transportation and warehousing has been extended inland from point ‘x’ to point ‘a’ (Figure 4). This area is actively undergoing renewal, with a resulting increase in economic rents. For location ‘x7, the increased rent is equivalent to the distance from ‘yi’ to ‘y2’. between

Secondary impacts or spillover effects have often resulted in increased economic activities on adjacent sites, which have benefited from the greater number of potential customers attracted to the site. Where the developments have been successful, adjacent sites have been acquired by private developers and investors, as opposed to the primary projects, which usually have been financed or otherwise helped by the public sector. These properties have subsequently been renovated and either resold or leased at significantly higher rents. New leases are often acquired by law and design firms or other service-related companies. Graphically these secondary developments are identified as the area lying between points ‘a’ and ‘c’ in Figure 4.

Environmental Renewal In many

respects,

Quality

and

the passage

Urban-waterfront

of the Clean

Water

466

Geoforum/Volume

Act6 and the National Environmental Policy Act7 marked an environmental turning point in the U.S. The impacts of environmental legislation are only now beginning to be recognized. Using standard water-quality parameters (dissolved oxygen, biological oxygen demand, coliform bacteria and suspended solids), most U.S. nearshore waters have shown improvements with respect to organic loadings, although other pollutants, such as heavy metals and compound organics, still appear to be increasing. Preliminary inquiries by the author suggest that water-quality perception by the end user is a function of the intended use of the water. Thus, bathers, fishermen, boaters, tourists and residents living along the shoreline may view a given waterbody quite differently from one another. Furthermore, it appears that considerable discrepancies exist between water quality as rated scientifically and user perceptions. If these findings can be substantiated for other waterfront users, including non-recreational, what possible implications will environmental quality-specifically water quality-have on urban waterfront-renewal efforts? In fact, what impact does water quality have on urban-waterfront developments? At the very least, this raises questions concerning water quality: for what, for whom, and where should specific clean-up efforts be made? Theoretically, one would expect that the utility of an environmental resource would increase as that resource is qualitatively improved and/or its quantity

20 Number

4 1989

increased. For persons fishing along a waterfront, the untainted catch increases the value of the site compared to those areas where the catch is not considered clean. The implication of these rather obvious statements is that the economic rent curves increase from ‘b’ to ‘b2’ (Figure 5). Such increases may be accomplished in several ways, depending upon the nature of the improvement. One alternative is to increase the slope of economic rent curve from ‘abl’ to ‘ab;?‘. The economic rent accruing to the landowners located between the shoreline ‘s’ and x1 is equivalent to the polygon ‘QRb*b’ less the residual economic rent prior to the environmental improvement designated by ‘bQbl’. Environmental improvement will result in secondary spatial impacts if the boundary between the readaptive and conventional uses is moved from ‘x1’ to ‘x2’. The distance between ‘x1’ and ‘x2’ represents an expansion of the waterfront-renovation efforts beyond the initial site. The aggregate economic benefits accruing to landowners occupying sites located within the area between ‘x1’ and ‘~2’ are equivalent to the area designated by ‘QRz2’, As mentioned above, these developments are usually made by the private sector in response to the perceived improvement in the physical environment. A more likely scenario occurs when the environmental improvements are felt further away from the shoreline. These impacts are reflected in Figure 6. Economic Rent & Land-use Boundary Changes Caused By Environmental Improvements to Pier & Warehouse Districts.

Economic Rent Changes Associated With Environmental Improvement.

Figure 5. Spatial and economic rent changes resulting from improved shore and nearshore environmental improvements without associated waterfront redevelopment.

Figure 6. Economic rent chahges caused by environmen-

tal improvements

to both piers and warehouse district.

GeoforumNolume

20 Number

467

4 1989

The renovation of warehouses and adjacent buildings may result in a positive environmental perception by both investors and potential lessees. In this instance, the economic rent curve will extend from ‘ab’ to ‘a2b2’. With the assumption of no secondary impacts on adjacent land uses, the increased economic rent accruing to landowners occupying sites between the shoreline and the original land-use boundary (S - xl) is equivalent to the area marked ‘Qrbzb’. Perhaps more important is the outward movement of the landuse boundary from ‘xi’ (Figures 5 and 6) to ‘x4’. The increased economic benefits accruing to landowners situated within the area between ‘x1’ and ‘x4’ (Figures 5 and 6) are equivalent to the area designated ‘Qz,b2b’.

The perceived improvement in the environment, however, is not likely to be limited to the readaptive land uses characterized by the curve ‘a2b2’. Land uses located adjacent to such renovation efforts are likely to increase in value in expectation of future increases in demand for properties ripe for development. This has been illustrated in Figure 6 by moving the secondary economic rent curve from ‘albl’ to ‘a3b3’. Improved demand prices in the secondary real-estate market has the net effect of reducing the area benefiting from improvements to the urban-waterfront environment to that equivalent to the areas designated by ‘xqxs’. Although the affected area has shrunk, the net economic impacts are substantial. The landowner situated between ‘x3’ and ‘x4’ (Figure 6) will lose aggregate economic rents equivalent to the area designated by ‘y1z1z2’, whereas the owners of land between ‘x2’ and ‘x3’ will obtain aggregate economic rents equivalent to the area designated by ‘zyiz2y’. At this point a note of caution is in order. The beneficial impacts created by an environmental improvement are based on the assumption that such environmental enhancements are recognized by the users, including investors, shopkeepers, and the general public. This assumption has not yet been tested. Consequently, the relationship between environmental perception and increased economic activity must be tested in a variety of locations and among different users. The pragmatically oriented reader may ask the following question: given the large number of successful waterfront renewal efforts in North America and an increasing number of similar efforts in the U.K. and on the Continent, can it not be assumed that water quality has a positive effect on the economic viability of business ventures located in these environments? The astute observer, no doubt, will have observed that the attractiveness of water-

regardless of its inherent quality-is strong enough to enhance rather than detract from the economic viability of the water-enhanced activity. It is believed that the next step is to operationalize this hypothesis and to test its applicability in several areas both in North America and in Europe. Acknowledgement-The

author wishes to thank Professor Bruce Marti for his valuable suggestions in reviewing an earlier draft. Any omissions and errors, of course, are the authors. Notes

1. The list of case studies conducted over the past 10 years is very long. For specific studies, the reader is advised to review the Proceedings of biannual meetings of the Coastal Society, Suite 110, 5410 Grovenor Lane, Bethesda, MD 20814, and the biannual Proceedings of six Coastal Zone Conferences, held every 2 or 3 years and commonly referred to as CZ74, CZ76, CZ80, CZ83, CZ85 and CZ87. These are available from the American Society of Civil Engineers, 345 East 47th Street, New York, NY 10017-2398. 2. The economic rent model is usually associated with the von Thunen model, which measures the spatial pattern of rural land uses. Although economic rents refer to the profit derived from a piece of land, especially when its value is influenced by accessibility, there are no inherent reasons why the concept cannot be applied to urban land uses as well. In an early paper, Garrison and his fellow workers discussed economic rents and distances within a hypothetical city. Assuming the model has validity in an urban context, the utility of the land may be operationalized using any number of value parameters, including-but not limited to--assessed value for taxation purposes or those seeking to measure the value of real property. Additional variables might include contract rents, demand and/or sales price when a real estate transaction has taken place. See Garrison, W., Berry, B. J. L., Marble, D. F., Nystuen, J. D. and Morrill, R. L. (1959) Studies of highway development and geographic change, Seattle, WA. 3. The Geography Department at the University of Southampton has sponsored two conferences on port and urban waterfronts, the most recent entitled ‘Waterfront redevelopment and the cityport economy’, 11-15 November 1987. 4. The Waterfront Center has held five in recent years. For further information, the reader is referred to the Vaterfront Center, 1536 44th St., NW, Washington, DC 20007. uses are meant economic activities 5. By water-dependent which cannot exist unless physical access is provided to the water. Shipyards and all kinds of port activities (including marinas) are examples of water-dependent activities. Water-enhanced activities are those which could exist elsewhere, but which derive an economic benefit by being located on or adjacent to water. Restaurants, hotels, and oil and gas tankfarms are examples of water-enhanced activities. 6. U.S. Public Law 91-190. 7. U.S. Public Law 92-500.

468 References ABBAS, L. A. (1978) The North Carolina charter boat industry, In: Marine Recreational Fisheries, Vol. 3, H. Clepper (Ed.). Sports Fishing Institute, Washington, DC. ALBION, R. C. (1939) The Rise of New York Port 18% 1860. Charles Scribner, New York. ANON. (no date) Urban waterfront revitalization: the role of recreation and heritage, HCRS, U.S.D.O.I., Washington, DC. This volume consists of 18 case studies and includes recent projects undertaken in cities situated along rivers, lakes and the Pacific, Gulf and Atlantic Oceans. BELCHEN, B. and LINVILLE, J. (1971) The waterfront: let us face it, Am. Inst. Archit. .Z., 55(4), 17-28. BENKENDORF, A. (1981) Planning for successful waterfront renewal, Envir. Comment, April, 14-16. BERRY, J. L., TENNANT, R. J., GARNER, B. J. and SIMMONS, J. W. (1963) Commercial structure and commercial blight, University of Chicago, Department of Geography, Research Paper 85, Chicago, IL. CLARK, J., WILSON, C. and BINDER, G. L. (no date) Small Seaports: Revitalization Through Conserving Heritage Resources. Conservation Foundation, Washington, DC. COWEY, A. (1978) Access and Urban Waterfronts: Proceedings of the Annual Meeting of the Coastal Society, Toronto, Ontario, 26-28 September. DARLING, A. H. (1973) Measuring the benefits of urban water parks, Land Econ., 49,22-34. GLAZER, M. and DELAPORTE, C. T. (1980) Improving Your Waterfront: a Practical Guide. Office of Coastal

GeoforumNoIume

20 Number

4 1989

Zone Management, NOAA and Heritage Conservation and Recreation Service, Washington, DC. HERSHMAN, M., GOODWIN, R., ROUTSALA, A., McCREA, M. and HAYUTH, Y. (1978) Under New Management: Port Growth and Emerging Coastal Management Programs. Washington Sea Grant Program, University of Washington Press, Seattle, WA. KITCHEN, J. W. and HENDON, W. S. (1967) Land values adjacent to an urban neighborhood park, Land Econ., 43,3.57-360. MORRELL, D. (1976) Managing the urban coastal zone: the political realities, Envir. Comment, November 8-10. MOSS, M. and DRENNAN, M. (1976) The New York City waterfront: an analysis of municipal ownership and leasing of public land, New York Sea Grant Report, NYSG RS 80-04, New York City, NY. POLITES, N. (1973) Baltimore: an abandoned harbor reborn, Des. Envir., 4(2), 26-27. SCOTT, L. H. (1973) Water development and urban recreation, In: Environmental Quality and Water Development, C. R. Goldman et al. (Eds). W. H. Freeman, San Francisco, CA. SINCLAIR, R. (1967) Von Thunen and urban sprawl, Ann. Ass. Am. Geogr., 57,72-87. STERNLIEB, G. (1969) Leisure Market Studies. Urban Studies Center, Rutgers University, New Brunswick, WEZHER, J. C. and ZERBST, R. H. (1973) The externalities of neighborhood parks: an empirical investigation, Land Econ., 49,9%104. WHITMAN, I. L., DAVIS, R. M. and GOLDSTONE, S. E. (1971) Measuring impacts of urban water development, Wat. Resour. Bull., 7,661-669.