Archives

DOWNTOWN WINSTON-SALEM REVITALIZATION FAR FROM AN OVERNIGHT SUCCESS

by Rich Lewis

Revitalization efforts are going on in just about all major and minor cities throughout the South, if not the entire United States. While each has its own character and level of achievement, you’d be hard pressed to find a more vibrant and successful one than in our own Winston-Salem.

Downtown Winston-Salem is one of the liveliest areas in North Carolina and that energy gives the community the appearance of something new, something that just happened. Just like Rome wasn’t built in a day, the story of the area’s rebirth goes back decades— and it may have decades of work ahead of it, too.

Jason Thiel, president of the Downtown Winston-Salem Partnership, Inc., explained that what the city has accomplished has been the work of many, many people and organizations. While his group currently oversees many of the projects and efforts, they are very eager to point out the work done by many different groups over the years.

“The success in downtown Winston- Salem has been built off the efforts of a lot of risk takers and pioneers,” he said. “Those folks have been developers and retailers and restaurateurs, business leaders and members of local government.

It’s not something that just one person or one group has done, but it has been a culmination of all the things they have accomplished so far.”

To see what has been done, you’d need to take a look back at how things were and how they started to fade away.

Thirty years ago, Winston-Salem found itself at a moment of change that was going on throughout the region. Downtowns were withering in southern States as more and more people moved to newly developed suburbs and bedroom communities.

Real estate was in the doldrums as interest rates hit historic highs and the economy began to change as the first moves away from manufacturing began to hit Main Street America. Winston- Salem up until that time had been a city pretty much built around the RJ Reynolds Tobacco Company, with a bit of economic diversity in the banking and insurance industries. Tobacco led the parade, though, and the drumbeat began to slow as ware houses and manufacturing plants began to be closed and moved elsewhere.

Downtown, fewer jobs meant fewer people coming to work. An entire webwork of businesses that depended on those people began to suffer. Restaurants that had done brisk daily business started having trouble finding enough customers. Retail stores that sold clothes, medicines, tires or magazines began to falter and fold up. Old buildings around the downtown area that had been busy and maintained began to show their age and fall into disrepair.

As one former resident put it, you didn’t want to be caught on Trade Street after dark as it was rife with drugs and prostitution. Other parts of downtown quickly developed their own unsavory reputations and most people just gave up on it and went elsewhere to live, work and shop. People still drove in to office jobs in the local high rises, but when the day ended at 5 p.m. it was a mad dash to get to the parking decks, their cars and the roads that led to nicer, better lit, safer neighborhoods. Downtown Winston-Salem, for a while, just about rolled up the sidewalks and put them away at night.

In the 1960s and 1970s urban renewal was purely a government affair. It took unused properties, bulldozed them and started construction projects to create buildings to hold governmental agencies and organizations. The architecture was uninspired and utilitarian, their drab and depressing hulks still standing testament to the lowest bidder process and bureaucratic boredom.

In the 1980s, the government just got out of the business for the most part and left development to private entities. Capital investment and loans came dear, though, and few wanted to invest in tearing down old buildings downtown when there was plenty of cheaper, unused land out in the suburbs, where the people had moved. Downtowns were left as fallow ground, lease rates plummeted and landlords were stuck with properties that many times weren’t worth much or were just outright liabilities.

And then something happened that rarely does outside of the movies— the artists moved in and started saving the place. Maybe it was the Sawtooth Center and the Stevens Center downtown that provided the anchors for the arts community to begin flourishing in a part of the city that was beginning to look shopworn and nearly forgotten.

Right on their heels, a new thing started happening across the country that would have a major impact on cities – the idea that public/private partnerships could take what was once old and make it new again.

“You began to see organizations like ours begin to grow all across the country,” Thiel said. “There were a lot of specific decisions made on the national, state and local levels that had a major impact on us.”

As the arts community began opening gallery spaces and renting lofts for studios, one of the old major players in downtown gave a huge set of properties to one of the fastest growing entities in Winston-Salem.

“Reynolds gave Wake Forest Bowman Gray School of Medicine the land and properties that would become the Wake Forest Innovation Quarter,” Thiel said. “This was a major, major thing for Winston-Salem, there was a lot of land, but there were also strategic goals developed. While that started many years ago, it is still developing and growing.”

“We’re really thankful for what it did and for how the city council, the mayors and local businesses invested in that project and the ones that grew up around it,” he continued.

The Wake Forest Innovation Quarter started out small, with one of the former RJ Reynolds Tobacco Co.’s warehouses. Renamed the Piedmont Triad Research Center, in 1994 Wake Forest moved its School of Medicine’s Dept. of Physiology and Pharmacology into the building, along with eight researchers from nearby Winston-Salem State University.

That simple start has become something really amazing, Innovation Quarter President Eric Tomlinson said. Over the following years, the project grew and grew as Wake Forest acquired nearly 150 acres from RJ Reynolds Co. and the plan came together to create a center for innovation focused on the emerging biotechnology sciences.

“Since it began, we’ve had about $580 million invested in transforming the spaces, creating new jobs and creating new businesses,” he continued. “Right now, we have 3,100 people working in the Innovation Quarter at 64 different companies. And we still have all four of the local educational institutes very involved and working here: Wake Forest University Bowman Gray Medical Center, Winston- Salem State University, Forsyth Technical Community College and the UNC School of the Arts.”

“Our first phase is complete and has been very successful,” Tomlinson said.

“By the end of next year, we expect over 3,600 people will be working in the Innovation Quarter. What we have planned for Phase II is as much again over the next decade.”

Right now, you can see companies in the Innovation Quarter that are pursuing and producing technologies like biomaterials (KeraNetics, LLC, Creative PEGWorks), pharmacology and testing (BiOrg, Carolina Immunochemistry LLC), and research and training (NC BioNetwork Pharmaceutical Center, the Neuroscience Research Institute of North Carolina).

The companies making their home there, however, have grown beyond just the medical field. Law firms, marketing companies and software companies have been drawn to the environment that has grown up. Amenities and services have also flocked to the area, with restaurants, bars, photography studios, coffee shops and even the Innovation Quarter YMCA operating to serve the folks that spend their time working in the area.

You may have noticed a theme. As the Innovation Quarter began to grow and attract businesses, and therefore workers, other businesses came along to share the energy and setting. Those in turn, once they reached a tipping point, attracted retail, banking and services to cater to the people working there.

And that is how revitalization is supposed to work, like restarting an old economic engine that had fallen into disrepair. A little elbow grease, some investment and the willingness to stick with it through the first sputters and coughs.

There have been people questioning the costs and efforts of revitalizations in downtown areas all across the country.

There have been questions about developers and cities working too closely at times, or if tax incentives are fair, or even constitutional in some cases. Many of those questions are still being decided and each community’s efforts should be looked at individually.

Gentrification, or the retooling of urban neighborhoods that sometimes make it unfeasible for lower-income families and small businesses to remain there, is often attributed to revitalization efforts. Revitalized areas often have a population that benefits from lower lease and rental rates. It can be a sobering truth that as these areas become trendy and wealthier, those lower income residents are often forced out as they can no longer afford to live there. The businesses that they patronized follow not long afterwards.

Urban planning and development is left with a difficult balancing act, but in the end, one of the guiding principles of real estate is that of highest and best use. Whether an older downtown block or vacant lot is better used as is, or as an office building, park or parking lot is never an easy question to answer. Too many run-down buildings become a blight on a city and can actually hinder economic growth in other parts of the city, particularly when it comes to pursuing outside industry or investment. Too many new developments tearing up downtown can put too much high-rent office space on the books at once, leaving new and pretty, but empty buildings. Cities like Detroit and Houston have shown both ends of that spectrum over the last decade.

There are some major benefits to cities, however, to undergoing revitalization, which make efforts like those in Winston-Salem really pay off. Abandoned downtown spaces deteriorate quickly and become property tax deserts. As they age and fall into further disrepair, they can become incredibly expensive for cities as they draw crime, or create fire and public safety hazards. Changing these places from liabilities to assets is a major goal for just about any city.

There’s more to making the change than just restoring some buildings and handing out some tax credits. Sometimes you have to change the business environment of an area as a whole. This takes work from those who have been there for a long time as well as the newcomers. It also takes a buy-in from the public to see it through.

“Our goal was to make downtown a destination again,” Thiel explained. “We wanted to make a positive change through dedication and marshal the different resources of the people here. We wanted to change how people felt about living and working in downtown.

“We have great, historic buildings, manufacturing facilities and warehouses from the tobacco industry,” he continued, “and they lent themselves to great adaptive uses.”

Part of the challenge came from changing people’s attitudes as to what downtown was and could be, Thiel explained.

People had to see that new, high-quality living spaces could be created and that there was still life in downtown.

“We had to even go to a number of restaurants downtown and talk them into staying open for dinner, which was a rarity for a while here,” Thiel continued.

He explained that in the 1990s, communities began to realize that cooperation between private and public entities was the best route to go for urban renewal and growth. Organizations, like the Downtown Winston-Salem Partnership, began to be developed across the country, bringing together developers, business owners and local governments to bring life back into city centers that were breaking down from lack of investment and attention.

“There have been a lot of specific decisions made locally and on the state level that have had a profound impact on us,” Thiel said. “A major, major thing has been developing the land and strategic goals that started years before and are still developing. We’d like to thank the City Councilmen and mayors over the years for investing in projects for downtown, from the baseball stadium to the Fourth Street Restaurant Row program and a host of other initiatives.”

“I think we have only reached the beginning,” he continued. “I want to keep raising the bar for the area neighborhoods. I want to see more neighborhood pedestrian connections and recruitment of retail back into the downtown area. There is a need to continue to grow.”

While Winston-Salem’s downtown growth may be in its brightest days of recent memory, there’s still a lot of work to be done and potential to be developed.

And there are challenges.

In the near term, the closure of Business I-40 from US 52 to Peters Creek Parkway will cause a major detour leading people away from downtown. It’s something that will just have to be endured during the construction project.

One of the biggest challenges may be the success of the downtown revitalization itself. As the business environment gets stronger and stronger, lease rates on spaces will most likely go up alongside demand. Thiel sees this being balanced out at the moment by the sheer amount of available space that is still open in the downtown area.

“There are still vacant properties to be developed, particularly on Liberty Street,” Thiel said. “These properties have one time costs to bring them back into productive locations. And there are some folks in our Arts District that are worrying about the rents getting too high, but we also have some that are taking bigger spaces and splitting them up for separate studios.”

“So many people deserve credit for what is happening here,” he said. “We (the Downtown Winston-Salem Partnership) are a facilitator and we want to really celebrate the people making the financial and work investments in our community.”

Overall, Winston-Salem’s downtown is probably best called a success in progress. The city has to navigate new business recruitment while maintaining and growing what is already in place. So far, it seems to be making the most of what it has. Downtown has transformed yet again and there is a vitality to it. Coffee shops, art galleries, small businesses, innovators and heritage businesses are working side by side. Amenities like parking areas and green spaces are developing alongside the businesses. New hotel space like the Cardinal will host visitors downtown and the ballpark is a great attraction as well. Local arts, visual and performing, have a great stage downtown and inject a lively quality to an area that once was just dragging along from day to day.

Winston-Salem has begun billing itself as a City of Arts and Innovation. You’d be hard pressed to argue with them on that subject. !

Share: