Durham and Chisinau:

Urban Revitalization through Adaptive Re-Use of Industrial Structures

Urban EconomicsKseniya Benderskaya

An Overview

• Durham’s recent revival of its downtown’s economic and social activity can be used as a model for other cities with similar post-industrial disinvestment.

• Besides being relevant for analogous American cities, Durham’s redevelopment strategies are even more pertinent for post-Soviet cities that are still undergoing industrial downsizing and could learn to prevent further urban degeneration.

A Durham-Chisinau Comparison?

• Why?• Chisinau (Capital city of Moldova)

– Is undergoing economic and political restructuring from centralized to market economy

– One of USSR’s key industrial hubs– Soviet collapse in early 1990s-> ongoing

deindustrialization = thousands of sq. ft of recently abandoned factory space in and around the city’s center

• Its historic center is undergoing a wave of new commercial and residential construction- making room by demolition of architectural heritage

• …While its idle factory/warehouse structures are wasting away on strategically valuable land.

• These formerly industrial areas may develop into urban pockets of decay

• Can Durham’s paradigm of facility rehabilitation become part of Chisinau’s sustainable growth strategy?

The Aim of this Project

• Identify the specific catalysts for central Durham’s rebirth

• assess the potential for and implications of its tactics in a place like Chisinau

• Grounding this comparative analysis in actual examples of redevelopment efforts in both cities

What’s the Problem?

• The specific examples in this discussion not only account for the disparate demographics of these two cities but also provide a platform for assessing the efficiency of Durham’s approach in aiding Chisinau’s spatial wastefulness.

So, How Did Durham Do It?

• Catalysts of Durham’ successful revitalization fall in 3 broad categories:

• Legacy of historically grandiose but inoperative industrial edifices (tobacco warehouses, cigarette factories, and nearby mill buildings.)

• Well-coordinated pro-business leadership of local officials, non-profit organizations, and grassroots’ representatives

• Local, state, and federal monetary incentives to attract Big Business, young entrepreneurs, and art community to downtown

A Bit on Durham’s Industrial EpochDurham’s role in the national tobacco industry for much of the 20th century. Post-industrial reorientation from cigarette manufacturing toward services and innovative entrepreneurship Suburban sprawl in the 1970sDemise of Durham’s tobacco giants such as the American Tobacco Company in the late 1980s and the Liggett Group a decade late left the city with over 2.5 million square feet of empty factory spacestigma of undesirable real estate,- barrier for the city’s regeneration efforts.

Adaptive Re-Use• Modernizing old warehouses into appealing

dwellings and commercial venues

• The shift in the public’s perception (urban ruins to commercial assets) did not happen spontaneously or overnight.

• Use of urban “mega-projects” like American Tobacco Campus and West Village to galvanize spatial change

– Exemplify political initiatives, foresight, and private-public relations necessary for successful redevelopment

Durham’s Local Politics

• Urban Liberalism Dimension• Durham’s City Council and County Commission

– harnessing private investment for downtown’s revitalization plans.

– DBAP scandal (ignoring referendum) Though this deal cost several councilmen their elected positions

– Paying $16 mil. to keep Durham Bulls• Would the American Tobacco Complex as we know it

exist?• Megaprojects as “stage setters”

– ATC; Liggett &Myers West Village (600 luxury apartments)

Liggett & Myers Redevelopment – West Village Residential and Commercial project

Source:http://www.flickr.com/photos/westvillagetwo/3217236174/sizes/z/in/set-72157612828004899/

Creation of DDI

• Downtown Durham Inc.– business league consisting of city council

representatives, entrepreneurs, and non-profit organizations

– Durham’s Downtown Master Plan • grassroots participation in strategic planning • Mass surveys, charettes, interviews with stakeholders

Government’s Monetary Incentives for Private Developers

• tax reductions and/or partial funding for a project’s infrastructure.

• Ex: Capitol Broadcasting Co. – 20% federal historic rehabilitation tax credits– federal new markets tax credits – 2 projects, Hill Warehouse and the Lucky Strike

Buildings qualified for the NC mill rehabilitation tax credit, (another 30% tax credit for development expenses).

Administration’s Energy and Leadership for Piloting new projects

• constantly looking for additional federal funding opportunities

• Business Improvement District • Community Development Block Grants and

Intermediary Relending Program• total public sector expenditures to reach $300

million by 2012

Downtown Durham: “Luring Young Professionals with Amenities”

• High-tech startups; American Underground• Joystick Labs, Bronto Software, Inc., Intersouth

Partners, Square 1 and Launchbox Digital• “More than ever businesses and street life in

revitalized downtown offer tech executives what clean labs, glass offices and concrete can’t” (Local Tech Wire 10/29/2010)

• Attracting the arts community

Can Chisinau learn from Durham?

• Comparing Chisinau to Durham CITY OF DURHAM CHISINAU CITY

237,214 people 624,200 people71, 742 hectares 52,000 (12300) hectares

On a Map

Chisinau Post-1992

• Transition from industrial to service-based economy– Industrial downsizing; deconcentration of

industrial facilities in the center– 19 industrial zones that dominate 2800 hectares

of land and contain over 1,500 factories of various profiles This seems like a huge amount, even for a Soviet city.

– 36 factory complexes in the center

Post 1992 Cont.• current factory stock was constructed during

the late 1950-1980s • Durham’s developers are capitalizing on the

aesthetic/historic value of the former warehouses

• Chisinau’s factories draw investors for more practical reasons- buildings are equipped with seismic resistant technology- expensive–

Context for Current Development Ventures

• Production volume has declined to 36% of its capacity in 1990.

• Government owns 61.3% of once-privatized factory space (repossession for debts)

• 40% of production facilities in CBD- inoperative

• Government also owns 89% of land in the city

Chisinau’s Attempts at Downtown Revitalization

• attempted urban revitalization via 2 conflicting approaches– adaptive re-use of old structures vs. new

construction and demolition.– The following analysis of these 2 policies shows

that Durham’s adaptive re-use paradigm is most efficient for Chisinau’s growth.

Comparative Analysis

• The “Al’fa” and “Tracom” projects- privately sponsored conversions of derelict factories into mixed-use developments

• SKYTOWER Business Center and Megapolis Mall - urban revitalization by adding new structures to the landscape.

• Which model has been more efficient for Chisinau?

Key Differences Between Durham’s and Chisinau’s Leadership

• Chisinau’s support for adaptive reuse of old facilities has only been declaratory thus far

• Chisinau’s General Plan 2025 and “UrbanProject”

• Interview with A. Gordiv– no coordination or communication between city,

municipal, and national government branches

Chisinau’s Policies- Economic Incentives?

• Chisinau has never engaged in a public-private partnership of Durham’s nature– No tax incentives; no partial funding for

infrastructure– Corruption within the government actually inhibits

business interests and fair competition for real estate and land

• Interview with N. Zaporozhan

What Attracted Private Investors to Convert the Old “Tracom” and “Al’fa” Factories?

• Chaotic transition policies regarding land and real estate privatization– Paying 1/30 of the parcels’ market values– Little competition in land auctions; bribes– Real-estate “add-ons”

Need for Sustainable Economic Development of the CBD

• Chisinau lost over 10% of its “protected” historic properties to make room for new business

• In 2009, seventy 19th century homes in the historic district perished

• The modernization of unused factories in Chisinau have attracted and retained small local business in formerly neglected areas

• Tracom and Al’fa ventures are good examples

Re-Use is Better for Homegrown Business

• “Tracom”-– shut down production in 2004– the city inherited over 36 hectares of industrial

space• with four large plants of concrete and steel• Located just “2 steps away” from CBD• attracted 4 different investors, each only needing a

quarter of the space

“Tracom”

More “Tracom”

Source: http://wikimapia.org/#lat=47.0332796&lon=28.8228035&z=15&l=0&m=b&tag=4979

Why This Redeveloped Space attracts Local Business

• Cheaper construction= cheaper rent for tenants– Rents are 4.5 times lower in these mixed-use

complexes than in new business centers downtown

– Operates at 90% capacity; high retention rates– Theses businesses specialize in construction,

home improvement, and legal and real estate services- which are in high demand

Distribution of Consumption Expenditures in Kishinev- Aspects of the Standard of Living of the Population in 2009: Results of the Household Budget Survey. National Bureau of Statistics of the Republic of Moldova 2009.Chisinau 2010. Pg. 53

Old “Al’fa”

• The 17-hectare property that has once supplied USSR with TVs and other electronics now makes room for 158 small firms

• Affordable leases (12 Euro/sq m per month), central location

• diverse services: from children’s school preparatory programs and clubs to administrative offices for auto-repairs and cheap retail- in sync with population’s demand.

Al’fa’s newer section, 1985

Al’fa’s First Section, 1930s Construction

“Al’fa” and “Tracom”

• Reduce business’ leasing expenditures• Divert more traffic from center’s main streets• Opportunities for parking- a rarity• Seem to attract local businesses that are

better matches for local consumer needs than the more elite downtown establishments– reflect of purchasing power

SKYTOWER AND MEGAPOLIS MALL

• SKYTOWER-Moldova’s fist “Grade A” international office complex

Cont.

Source:http://www.rabota.md/image/megapolis-mall.jpg

Skytower

• 56 euro per square meter (excluding amenities)- to cover construction costs

• could only find tenants for 60% of its 2,000-m2 space• Catering to Moldova’s oligarchs and foreign officials.

– very small segment of managerial positions in Chisinau

• Lost 1/3 elite tenants during recession• The 700-m2 space reserved for an elite restaurant

failed to attract buyers

Megapolis, Not Much Better

• Follows Skytower’s business trajectory• A Chinese Investment (~80 mil)• Moldovan businesses could not keep up with

the rents• Saved by a Ukrainian grocery chain• Boutiques outcompeted by cheap domestic

clothing made in Ionel’s Textile Factory right downtown

Concluding Thoughts…• revitalization through renovation of vacant

industrial structures is not only a “greener” approach to the center’s renaissance but one that engenders new functions for the built environment of a different age.

• Moldova has enough construction- it does not need new buildings, just has to re-use old ones smartly.

Current Housing Shortage and Future Development

• Factories Bucuria and Ionel are scheduled to move out of center next year

• Could be used for multifamily apartments• Keep developers away from destroying

historical structures• A need for strong political coordination and

leadership in Chisinau• Sustainable growth is key

Bucuria

Source:http://commondatastorage.googleapis.com/static.panoramio.com/photos/original/10227325.jpg