Analyst: Restorative development likely to increase in 21st century

Restorative development which restores value to a piece of property, a neighborhood or a community is the development paradigm that is replacing new development as the dominant industry activity for the 21st century, according to an industry analyst speaking at a recent conference held by the Urban Land Institute.

Storm Cunningham, chief executive officer of RestorAbility in Alexandria, Va., and author of The Restoration Economy, discussed the shift toward more redevelopment and less new development at the Urban Land Institute's fourth annual "Place Making: Developing Town Centers, Transit Villages and Main Streets" conference, held Sept. 9-10 in Pasadena, Calif.

According to Cunningham, there are three basic forms of development: new development, which he described as any development that destroys an asset whether it is undeveloped land or a historically significant building to create something new; maintenance and conservation of the built and natural environments; and restorative development, through which either new construction or redevelopment can be used to return value to property.

With restorative development accounting for more than $1 trillion in development activity worldwide, it represents the "fastest growing economic development opportunity for businesses and communities," Cunningham said. "We've had two centuries of the industrial and post-industrial revolution, in which we developed the world like crazy. And now, the world not just America is becoming more resistant to sprawl and geographic growth. New development is shrinking, in terms of its slice of the development pie."

Restoration development involves both the natural and built environment, with restorative and revitalization processes applied to the natural environment; and renovation, rehabilitation, adaptive reuse and replacement processes applied to the built environment, Cunningham said.

The movement toward restoration is based on three "global crises" the restraint crisis, corrosion crisis and contamination crisis, he explained.

The restraint crisis "basically means we are out of room We've reached a point at which if we want to build more, we have to destroy some other value a property already has whether it's a greenfield, park, land used for agriculture, or another purpose and someone is going to fight to protect that property," he said.

The corrosion crisis refers to the massive deterioration of infrastructure serving the built environment (the American Society of Civil Engineers estimates that the United States currently has a $1.3 trillion backlog in infrastructure restoration).

The contamination crisis refers to the enormous stress being placed on ecosystems worldwide, Cunningham explained.

To be successful, future development cannot occur in a vacuum, but rather must include several components integrating restoration, preservation and maintenance of both the built and natural environments, he said.

"Those who bid on projects saying all we can do is the built environment' are going to start losing bids, because what city managers and planners want more of is integration," Cunningham said. "It makes no sense to revitalize an old industrial waterfront, put a Starbucks there, and have people sucking down their lattes, watching raccoons float by in a cesspool of a river."

From the public-sector perspective, the cities that will be the most successful in attracting restorative development will be the ones that lift barriers restricting innovative reuse, create incentives for renovation or reinvention, and encourage public-private coalitions, he said. From the private-sector perspective, the most successful developers will be those with the ability to put together fully integrated "mega-projects" and provide long-term management of those projects, Cunningham said.

The scale of restorative development, which can involve any combination of environmental clean-up, historic preservation, new construction or renovation, is only for developers with a long-range commitment, he said. "It's very seldom that you run in, you do it and then run away to the next project," Cunningham said. Real estate investment trusts will become more involved in the financing for these projects, he predicted.

Cunningham encouraged conference participants to weigh the overall benefits of involvement in restorative development versus new development. "Do you want to continue doing something that has shrinking markets, increasing public resistance, decreasing government funding and incentives? Or do you want to get into what has growing markets, increasing public support and increasing government funding? Restorative development is real and it is lasting," he said.

The Urban Land Institute is a nonprofit education and research institute supported by its members.