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Setting a downtown housing goal


GRDadof3

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There was some talk at an event I attended last night about setting a downtown housing goal: X number of new residential units by Y period of time, and formulating initiatives and developer incentives to make it happen. Whether you need buyer incentives or not is debatable. Ren Zones helped fill a lot of condos, but the values on those condos have taken a huge hit since the tax credits expired.

 

The latest census in 2010 showed Census Tract 2, roughly 196 on the North, Ransom on the East, Cherry on the South, and the S-curve/the Grand River on the West, as having a population of 2166.

 

Add in probably 800 or so from Monroe North, 500 from the near West Side/Seward/Union Square area, and another 500 from the current projects underway, and it's probably close to 4000 people downtown.

 

 

What would it take to get to 10,000? How many years? 2020? With standard organic absorption of units.

 

The thought process is that it will take 10,000 people to get a major retailer/major grocer downtown, amongst the other benefits of having that many residents in the city.

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I have desired a 3x10 in 10 goal for downtown GR:

 

10,000 additional residents

10,000 more employees 

10,000 more students 

All in 10 years

 

So start in 2013 and successfully complete in 2023. To GRdad's point, downtown GR has reached the critical phase of when residential can explode in numerical numbers.  Projects that contain 250-400 rental units could feasibly be absorbed assuming the right price points. There likely would be greater demand for student-oriented housing similar to what Ann Arbor is gaining.

 

The DDA could become more aggressive in soliciting development for its properties for residential development. The City and DDA could also become more aggressive in acquiring underutilized or distressed properties to offer for redevelopment. 

 

In terms of incentives, the DDA could develop standard incentive programs that give clarity to prospective developers, such as a program that offers development containing 50 or more units, LEED certified and price points aimed at 120 AMI or less is entitled to a certain amount of TIF allocation. 

 

Local foundations could join forces with the DDA to establish a Detroit-styled program that encourages people to move downtown -- although we are not really experiences an demand problem.

 

In terms of new jobs, there is much opportunity to establish community challenge and incentive programs but it really needs to be more corporation led.  This is where a high-profiled corporate leader who grows a passion for downtown as a place for his/her businesses (vs her/his evening/weekend playground) could assist tremendously. Universal Forest Products and Wolverine World Wide would be two companies that immediately jump to mind as companies that would fit well into the ethos of downtown. 

 

Related to education, advancing existing strategic relationships with Ferris, MSU and GVSU could make this a reality in terms of what additional programs would yield synergistic opportunity. Specifically technology, art and additional health related programs would fit will in the general trajectory of downtown. There would be great value to attract additional students to these programs if they were relocated or expanded downtown. 

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More jobs is always good but in this case there are already way more jobs than residents downtown and in my experience especially in the yuppie crowd there is demand to live in a downtown area and have a reverse commute to wherever that might be in the metro area, usually avoiding traffic. 

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It's a "chicken or the egg" situation. I think you'll actually see a switch in a few years, where talented, sought-after people WILL NOT work in the suburbs. Many people that I talk to who are just graduating have no desire to work in the suburbs.

 

Heck, I live in the suburbs and would have a hard time working in the suburbs. Many people want to work downtown, and I think that trend will continue. It'll be interesting to see if certain departments (especially Marketing, Advertising, design and certain parts of IT) of employers (large and small) will have to have a presence downtown to attract the top talent.

 

Shouldnt we bring business's downtown first, and then the workers will follow? As much I would love to see new high rise apartments going up, and townhouse line the street, we have one big elephant in the room. Where is every body going to work?

 

I love the thought process here. What would it take, how long would it take, and what would downtown GR look like with 10,000 residents?

 

Joe

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I think now is a great time to get started on it. 2020 is exactly 7 years away, and a census year. If standard absorption rates right now are 300 or 400 units a year, bringing in about 500 new people a year, then you'd have to double that number.

 

Find out what the challenges are for developers to build more projects? Give height/density bonuses? Encourage the business community to pay their employees bonuses to live downtown, (like Detroit), to increase demand? Sell the city owned surface lots to the developers with the best vision for $1? With specific housing numbers as part of the requirement?

 

If you think about the projects built in Grand Rapids recently, Icon on Bond for instance is 9 stories, about 120 units. 38 Commerce, 35 units I believe. Gallery on Fulton, 56 units. Tall House was supposed to be 93 units in 11 stories.

 

Renovation wise, Baker Lofts will have about 87 apartments. If the Klingman's building goes, I've seen some hypothetical plans that show 186 units. But those opportunities are starting to dwindle. That mammoth warehouse West of 131 near Wealthy, the Keeler Building, Morton House, what else?

 

If the average mid-rise has 70 - 100 units, and the goal is 1000 units a year....that's a lot of mid-rise projects and renovations over 7 years. Downtown Grand Rapids would be unrecognizable with that level of development, and the streets would be constantly bustling, particularly after normal business hours (weekends, weeknights, even Sundays!). Even if you hit half that...it would be about 35 - 40 projects.

 

Let's do it.

 

 

I have desired a 3x10 in 10 goal for downtown GR:

 

10,000 additional residents

10,000 more employees 

10,000 more students 

All in 10 years

 

So start in 2013 and successfully complete in 2023. To GRdad's point, downtown GR has reached the critical phase of when residential can explode in numerical numbers.  Projects that contain 250-400 rental units could feasibly be absorbed assuming the right price points. There likely would be greater demand for student-oriented housing similar to what Ann Arbor is gaining.

 

The DDA could become more aggressive in soliciting development for its properties for residential development. The City and DDA could also become more aggressive in acquiring underutilized or distressed properties to offer for redevelopment. 

 

In terms of incentives, the DDA could develop standard incentive programs that give clarity to prospective developers, such as a program that offers development containing 50 or more units, LEED certified and price points aimed at 120 AMI or less is entitled to a certain amount of TIF allocation. 

 

Local foundations could join forces with the DDA to establish a Detroit-styled program that encourages people to move downtown -- although we are not really experiences an demand problem.

 

In terms of new jobs, there is much opportunity to establish community challenge and incentive programs but it really needs to be more corporation led.  This is where a high-profiled corporate leader who grows a passion for downtown as a place for his/her businesses (vs her/his evening/weekend playground) could assist tremendously. Universal Forest Products and Wolverine World Wide would be two companies that immediately jump to mind as companies that would fit well into the ethos of downtown. 

 

Related to education, advancing existing strategic relationships with Ferris, MSU and GVSU could make this a reality in terms of what additional programs would yield synergistic opportunity. Specifically technology, art and additional health related programs would fit will in the general trajectory of downtown. There would be great value to attract additional students to these programs if they were relocated or expanded downtown. 

 

 

 

 

Great post. I like your thought process.

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Great thoughts. I particularly like the reduced land sales price idea for the project that most meets the vision. Building off that idea, DDA could then internally budget the increased tax increment revenue towards the purchase of additional depressed properties to perpetuate/expand the program. Another iteration would be for the City or DDA to become an equity partner in the deal via the land. Not sure if there is a difference here in terms of how the lenders would view the distinction differently $1 or equity partner with the land, but the more equity the development team brings to the table the greater likelihood of receiving financing.

 

I have heard second hand from apartment managers that 200-250 units is the sweet spot for full-time property management teams to have full-time leasing, maintenance office management crews. Not sure if that is true or not, but probably yields to a slightly higher unit mix than GR has witnessed in the past. It could also be the experience of the company that I was talking to and varies by developer or management company. 

 

Despite my dreaming, I don't think that downtown GR could absorb 1,000 folks a year at this time. The economy, while improved, is not expanding fast enough. Last year, the entire state only gained 6500 people. I think a 500 person per year goal through the end of the decade would be more attainable but aggressive goal. That would effectively double the downtown population within 7 years.  

 

Does anyone know what the downtown rental price per square foot is? The last time I rented, I think it was in the $12 per square foot per year range in a relatively new place. It would not surprise me to start seeing 15-20 story proposals for rental building in the coming years that could house 250 units. My guess is the rental rates have to be closer to the $15-20 range to make that type of construction justifiable (translates into $1,500-$2,000 monthly rents for a 2 bedroom).

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Don't overstate that 6500 of population growth when several years ago it was a loss of over 100,000. Michigan's growth will only help GR.

I really think we need a large employer to move jobs downtown, put their name in neon lights and sell DT. Maybe just the R&D department of Perrigo or whatever. I just that as an employee if everything was equal I'd pick the urban employer every time.

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Don't overstate that 6500 of population growth when several years ago it was a loss of over 100,000. Michigan's growth will only help GR. I really think we need a large employer to move jobs downtown, put their name in neon lights and sell DT. Maybe just the R&D department of Perrigo or whatever. I just that as an employee if everything was equal I'd pick the urban employer every time.
Kent County was estimated to have grown by 5800 people in 2011, highest growth rate since 2002. And by 35,000 since 2000. 7 years of that kind of growth, through 2020...
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Great discussion - and I'd say definitely worth pursuing.  Some data notes...

 

- Downtown's census tract is 20, not 2.

- The 2011 estimate for tract 20 is 2,008, so despite the uptick this year for GR, downtown may have actually lost a little ground.

- There are 1,508 housing units counted in tract 20, 1,202 of which are occupied.

 

[so we have to get building!  How many units will we need in full to get 10,000?  My uneducated guess would be around 3000 new units in tract 20 alone, for a total of 4,500 ... With an average household size of 1.45, that would put about 6500 residents in that tract, and the surrounding tracts can fill in for the remaining 3,500...

 

I think we need to push the boundaries of downtown, regardless of SWAN's kicking and screaming.  Higher density housing should extend past Seward Ave.  We can also push north, into Belknap and past Leonard.  We're already pushing southward.]

 

- Of the 1,202 households, 256 are family households, and 946 are non-family, which is over 3/4.  Of the 946 non-family households, 86.9% are singles living alone.

 

[in the long run, downtown will need to appeal to families.  Young single professionals and students are good in the short term, but probably won't get us all the way to 10,000, and they tend change residences frequently.  Families are stabler, and they will raise the average household size to more than 1.45.  That means crafting incentives around schools, and pushing all opportunities GRPS has to offer (Seriously. Don't scoff), as well as other choices.  It also means making sure we have enough green space, well-maintained and safe]

 

Not sure if I had anything useful in there, just wanted to stir the pot...

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Great discussion - and I'd say definitely worth pursuing.  Some data notes...

 

- Downtown's census tract is 20, not 2.

- The 2011 estimate for tract 20 is 2,008, so despite the uptick this year for GR, downtown may have actually lost a little ground.

- There are 1,508 housing units counted in tract 20, 1,202 of which are occupied.

 

[so we have to get building!  How many units will we need in full to get 10,000?  My uneducated guess would be around 3000 new units in tract 20 alone, for a total of 4,500 ... With an average household size of 1.45, that would put about 6500 residents in that tract, and the surrounding tracts can fill in for the remaining 3,500...

 

I think we need to push the boundaries of downtown, regardless of SWAN's kicking and screaming.  Higher density housing should extend past Seward Ave.  We can also push north, into Belknap and past Leonard.  We're already pushing southward.]

 

- Of the 1,202 households, 256 are family households, and 946 are non-family, which is over 3/4.  Of the 946 non-family households, 86.9% are singles living alone.

 

[in the long run, downtown will need to appeal to families.  Young single professionals and students are good in the short term, but probably won't get us all the way to 10,000, and they tend change residences frequently.  Families are stabler, and they will raise the average household size to more than 1.45.  That means crafting incentives around schools, and pushing all opportunities GRPS has to offer (Seriously. Don't scoff), as well as other choices.  It also means making sure we enough green space, well-maintained and safe]

 

Not sure if I had anything useful in there, just wanted to stir the pot...

 

 

Ah, that's weird. The New York Times had it mislabeled. I'd trust the census' site though.

 

http://projects.nytimes.com/census/2010/map

 

I'd really find it hard to believe that the population went down. Hmmmm.

 

1202/1508 is only about 80%. Not bad, but could be better. I'm guessing it's the ones that haven't been updated in a long time that are vacant. Wonder how apartment buildings like The Globe and Plaza Towers are doing for occupancy?

 

Speaking of that, I'm sure there would be some backlash from some of those existing apartment building owners. But I guess like a lot of incentives, like the BRIP Grant, maybe there are ways that existing building owners could get grants to do updates on their buildings? Particularly for energy efficiency?

 

I tend to agree with one of the posts above, 10,000 might be too many. It might even do damage to the market. Maybe 7000 (total) in 7 years? 7k in 7y?

 

I've already emailed some peeps at the city to talk more about this idea.

 

BTW, the city of GR grew 1649 in 2011 (estimate), county 5300, net domestic migration for the County for the first time in about 12 years, 127 people. Scratch that, for the first time since domestic migration has been tracked going back to 1991.

 

Texas A&M does a good job of breaking down the major census data every year:

 

http://recenter.tamu.edu/data/pop/

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Ah, that's weird. The New York Times had it mislabeled. I'd trust the census' site though.

 

http://projects.nytimes.com/census/2010/map

 

I'd really find it hard to believe that the population went down. Hmmmm.

 

1202/1508 is only about 80%. Not bad, but could be better. I'm guessing it's the ones that haven't been updated in a long time that are vacant. Wonder how apartment buildings like The Globe and Plaza Towers are doing for occupancy?

 

Speaking of that, I'm sure there would be some backlash from some of those existing apartment building owners. But I guess like a lot of incentives, like the BRIP Grant, maybe there are ways that existing building owners could get grants to do updates on their buildings? Particularly for energy efficiency?

 

I tend to agree with one of the posts above, 10,000 might be too many. It might even do damage to the market. Maybe 7000 (total) in 7 years? 7k in 7y?

 

I've already emailed some peeps at the city to talk more about this idea.

 

BTW, the city of GR grew 1649 in 2011 (estimate), county 5300, net domestic migration for the County for the first time in about 12 years, 127 people. Scratch that, for the first time since domestic migration has been tracked going back to 1991.

 

Texas A&M does a good job of breaking down the major census data every year:

 

http://recenter.tamu.edu/data/pop/

 

You also have to consider that the density surrounding downtown is a lot higher than other places that a grocery store might be sited in the suburbs.  I think that 7-10,000 in downtown is a good goal, but it seems like the fact that retail stores would also likely draw customers from Heritage Hill and the near east side could/should play into any decisions by retailers.  I know that if a small-format Meijer or similar grocer were to go in at Wealthy/Division, we would be more likely to make more purchases there than we do when we have to drive out to Knapp's Corner or Alpine.

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the easiest way to close most of the gap to 10k would to be to extend the boundaries of what is considered downtown.  the area surrounded by 131/196/layfayette/wealthy would have significantly more people than census district 20. I think that it more accurately reflects the area that functionally represents downtown. Homeless-side, i mean Heartside, is being rapidly incorporated into downtown and should be included in any study of the area. unfortunately, the census map divides it into three different districts.  adding heritage hill with it's +/- 4,000 residents and you will already be to 10 k.  

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the easiest way to close most of the gap to 10k would to be to extend the boundaries of what is considered downtown.  the area surrounded by 131/196/layfayette/wealthy would have significantly more people than census district 20. I think that it more accurately reflects the area that functionally represents downtown. Homeless-side, i mean Heartside, is being rapidly incorporated into downtown and should be included in any study of the area. unfortunately, the census map divides it into three different districts.  adding heritage hill with it's +/- 4,000 residents and you will already be to 10 k.  

 

For sure, that's what I was getting at in my first post. In any definition of "downtown," you'd have include Monroe North, the near West Side/GVSU area, Heartside. I don't know that I'd go so far as to include Heritage Hill in downtown.

 

Plus, in order to provide incentives, it'd probably have to be administered by the DDA, so the most likely scenario would be everything within the DDA boundaries, which makes more sense than the census districts. For instance, the census district for Monroe North also includes Belknap Lookout. I don't know that I'd consider Belknap Lookout "downtown."

 

Here's the DDA's most recent boundary map:

 

8300043223_e9ed6d5d22_z.jpg

 

 

 

Much like the downtown residential study that was done by Zimmerman Volk back in 2008 (sort of a waste of a report if you ask me), you'd have to determine your baseline: how many buildings, how many units, current occupancies of those units, all within the current DDA boundaries. Once you figure that out, then you figure out where you want to be, and a clear vision as to why.

 

And whether this 7000 or 10,000 goal has anything to do with a grocery store is really irrelevant. I think you could develop an economic impact model of what that many more residents downtown would do for downtown businesses and cultural institutions. In addition, the sight of 25 - 30+ more residential buildings downtown and the added vibrancy would have spinoff benefits, and may attract some bigger employers to downtown to help them attract new workers. That's happening a little now, but would probably accelerate.

 

The DDA has funding and resources to provide incentives for a lot of different things. I'm actually surprised this hasn't been done before (?)

 

The other benefit that downtown has is that many of the suburban apartment complexes are getting pretty old. The really big ones off of Alpine, in Kentwood and Grandville are at least 20 - 30 years old now, if not older. The suburban competition is getting pretty dumpy.

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The DDA's map seems accurate with regards to what I would consider downtown.I definately wouldnt' consider Belknap lookout part of downtown, especially since it is sort a pain to walk downtown. I also, wouldn't necessarily include Heritage hill in a definition of downtown but residents there would preferentially shop downtown if grocery, drug, etc. stores were available. Living in Heritage hill, I have to run out to fuller to go to a drug store or grocery store while I frequently walk downtown to go out to eat or get some coffee. If I could get something downtown I would much rather do that instead.

 

I think what needs to also be addressed is the proportion of low income to market rate apartments that are being built.  the high proportion of low income housing was mentioned as a barrier to new commercial development in a report that was released by some consulting group out of Birmingham recently (I cant remember the exact date or name). It seems that with all the various credits for low income housing it's a no brainer to go in that direction for most developers. New credits for market rate housing would seem like the solution if funding available. without the low income credits it is hard to say if the rate of new developments would slow. I suppose it depends on current rents

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Call me blasphemous for mentioning this (on Christmas Eve to boot) but there seems to be an overabundance of churches downtown that stand in the way of some prime development sites.  The downtown demographics don't exactly suggest many are church going, but then again maybe they do fill up for a few hours on Sunday morning from loyal members who've moved elsewhere.

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...

I think what needs to also be addressed is the proportion of low income to market rate apartments that are being built.  the high proportion of low income housing was mentioned as a barrier to new commercial development in a report that was released by some consulting group out of Birmingham recently (I cant remember the exact date or name). It seems that with all the various credits for low income housing it's a no brainer to go in that direction for most developers. New credits for market rate housing would seem like the solution if funding available. without the low income credits it is hard to say if the rate of new developments would slow. I suppose it depends on current rents

Gibbs Planning group. Here's a link for you.

 

"He said downtown workers, residents within a 10-minute drive and college students who attend the 10 educational institutions in and near the district are the primary potential customers, amounting to more than 220,000 individuals."

 

Ten minute drive would include at least a five-mile radius from Division and Fulton (and yes I know traffic backs up on Lake Dr and Lake Michigan Dr and Alpine and Clyde Park).

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Call me blasphemous for mentioning this (on Christmas Eve to boot) but there seems to be an overabundance of churches downtown that stand in the way of some prime development sites.  The downtown demographics don't exactly suggest many are church going, but then again maybe they do fill up for a few hours on Sunday morning from loyal members who've moved elsewhere.

But each is an architectural beauty which would be a shame to lose.

 

FLC has seen expansion in the past 10 years, St. Andrew's is the focus of the catholic community in GR, Fountain St. fills a unique niche.

 

The others I'm not sure about, but I'd imagine many people prefer being married in a picturesque old-fashioned church than a suburban warehouse, and thus I'm sure any which may have low participation make up for any costs in income from marriages.

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But each is an architectural beauty which would be a shame to lose.

 

FLC has seen expansion in the past 10 years, St. Andrew's is the focus of the catholic community in GR, Fountain St. fills a unique niche.

 

The others I'm not sure about, but I'd imagine many people prefer being married in a picturesque old-fashioned church than a suburban warehouse, and thus I'm sure any which may have low participation make up for any costs in income from marriages.

 

They are also historic landmarks (whether or not officially designated as such).

 

St. Andrew - Congregation founded in 1835, present building complete 1875

First United Methodist - Founded 1835, present building 1867

Park - Founded 1836, present building 1867

St. Mark's Episcopal - Founded in 1836, present building 1848

Fountain Street - Founded around 1842, present building complete in 1924 after a fire destroyed the first one.

Immanuel Lutheran - Founded in 1856, present building 1890

Westminster Presbyterian - Founded in 1861, present building 1886

LaGrave Ave. CRC - Founded in 1887, couldn't find a date on the building, but it was sometime in the 1950s

Central SDA - Founded in 1887; building was the original site for All Souls Unitarian, constructed in 1894.  Central SDA moved there in 1939.

 

Sorry if I missed any... Considering all of them were built prior to White Flight and Urban Renewal, I'd expect they'd be pretty ambivalent at the thought of moving.  They'd probably scoff and tell you they were downtown before moving downtown was cool.

 

The only thing I don't like about the churches is that they tend to take so much land for surface parking.  I wish they would find a way around that - like the way Fountain Street shares parking with GRCC - and we could use those lots for something.

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They are also historic landmarks (whether or not officially designated as such).

...

Fountain Street - Founded around 1842, present building complete in 1924 after a fire destroyed the first one.

...

 

The only thing I don't like about the churches is that they tend to take so much land for surface parking.  I wish they would find a way around that - like the way Fountain Street [Church] shares parking with GRCC - and we could use those lots for something.

We also help GRCC comply with their smoking ban! :/

 

GRCC avoids having to build a performing arts center/auditorium/chapel by using FSC's space. And yes, any tuck-pointing or concrete work, etc. has to go through historic compliance review.

 

ETA: FUMC shares parking with the Masonic building.

 

(recently appointed to FSC governing board)

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The churches downtown have a limited lifespan. Most of their members now (it seems) are elderly and need the convenient parking. But the numbers are dwindling.

 

There are plenty of other places for infill before pressure is put on the churches to sell.

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The churches downtown have a limited lifespan. Most of their members now (it seems) are elderly and need the convenient parking. But the numbers are dwindling.

 

There are plenty of other places for infill before pressure is put on the churches to sell.

 

Not all downtown churches are doing poorly - many of them are doing quite well, with non-negligible numbers of younger congregants. Many of the churches are also quite wealthy and attached to their buildings (as they should be).

 

The problem I see with the churches isn't the buildings - it's the parking. Plenty of downtowns have historic churches in their midst, and they fit in the fabric of the cities quite well. However, many of our downtown churches - LaGrave CRC, the Cathedral, First (Park) Congregational, and others - have beautiful buildings surrounded by parking wastelands. Given that all of the downtown churches have commuter congregations, I don't see this changing any time soon, though I could see a church that is struggling financially seeing the parking lot as a good potential source of revenue, either to sell for development or leasing the spaces to neighboring businesses during the week (though that can cause problems for mid-week events such as funerals).

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Re:churches - I tend to agree that the churches in of themselves are great additions to downtown, in terms of the architecture, bringing folks downtown on Sundays, and the services they offer. The problem lies in their surface parking lots. However, this is a short-term problem. As downtown land becomes more scarce, land values will increase, and churches will find themselves sitting on a high-valued asset that will be best used by selling and converting the cash into their other needs. I would much rather have churches owning this land than a for-profit parking company. For joint parking deals, office and church uses complement well, as offices use parking from 7am-6pm on weekdays and churches need the parking in the evenings and weekends. 

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