Salisbury, the most populous city on Maryland’s Eastern Shore, wants to transform its downtown to meet the growing demand for urban style development among its younger residents.
The city’s master plan for the area calls for investing $640 million during the next 20 years to increase its residential and retail density. About 90 percent of the funding is expected to come from private dollars.
“We’ve seen more commercial real estate activity in downtown Salisbury in the past two years than we have in the past 20 [years],” Mayor Jake Day said.
Earlier this week, Day’s administration presented the downtown master plan — which was two years in the making — to the City Council. Day also is scheduled to discuss his administration’s plans Friday at SVN-Miller’s Commercial Real Estate Forum at Salisbury University’s Perdue School of Business.
Day, a professional urban planner, is spearheading efforts to reinvest in a portion of the city hit hard by the planning trends of the 1960s and 1970s that emphasized convenience of the automobile. The development strategy annihilated much of Salisbury’s walkability and density currently viewed as key assets in modern urban planning.
Now the city, which is the largest landowner in the downtown area, is trying to find development partners to build over past mistakes, such as the large surface parking lots in “Old Town” taking up valuable real estate.
“We’ve been holding back our downtown by being the largest land banker,” Day said.
Salisbury Towne Center
A major step in reaching that goal came this fall when developer Devreco responded to a Request for Proposal from the city to help develop about four acres of land, including a surface parking lot.
The firm, which has a portfolio of development projects including the Headquarters Live! music and arts venue in Salisbury, has proposed building a mixed-use project with an underground parking garage; ground floor retail; residential units; Salisbury University graduate student housing; and a hotel as part of a $35 million Salisbury Towne Center development.
Brad Gillis, principal at Devreco, said the project will help complete an urban renewal goal the city has been trying to accomplish for 50 years. He said the firm was interested in pursuing the project from a business perspective because of low interest rates, and demand for multifamily development.
“We view it as a partnership with the city and if they succeed we succeed,” Gillis said.
Anirban Basu, economist and CEO of Sage Policy Group, who is also speaking at the commercial real estate forum, said it makes sense that cities, such as Salisbury, would want to adopt the development strategy. Smaller cities are competing to attract millennials just like major metropolitan areas.
“It’s a fairly hackneyed conversation about the creative class, work, live and play and all that — but it works,” Basu said.
Currently there are about 150 residential units being developed in the downtown Salisbury. Day said a “reasonable goal” for the near future is to see a total of 500 residential units. If the city’s plan is followed as envisioned, it could eventually mean as many as 1,000 residential units.
Much of the building in the area will try to take advantage of waterfront assets along the Wicomico River that runs through downtown.
Salisbury’s redevelopment plan has been influenced by Frederick’s revitalization efforts, which have received national acclaim from urban planners.
“We need retail density and residential density downtown,” Day said.
But there are some warning signs a slowing economy could hinder redevelopment efforts in the short term.
Basu said he believes consumer spending will carry the economy through 2016, but a recession in 2017 or 2018 isn’t unlikely.
A recession may have an outsized impact on multifamily and hotel projects because an overabundance of capital, and not enough good investment opportunities, has resulted in excess valuation of those assets.
“I’d rather predict a recession that doesn’t happen than not predict a recession that does happen,” Basu said.
Originally Published in The Daily Record – Written by Adam Bednar