Activation of dormant spaces should be a low risk, sustainable way to generate economic activity in slow moving economies.
While in Newcastle recently, I was surprised and impressed by how the city had managed to use dormant spaces to create activity and stimulate consumer interest. For example, the old train station is currently being converted into a public space and what were dormant station rooms, are now being filled with various art attractions, cafes and events.
Newcastle is now one of Australia’s thriving regional cities. Townsville in North Queensland is a city with similar aspirations to Newcastle. As a participant in development in Townsville, I have been frustrated with a political narrative focused on large projects or major infrastructure as a catalyst for economic stimulation and growth. While these projects do contribute to economic stimulus, their effects often take time to move through the economy. These projects introduce large scale stimulus for a short and finite period of time. They often don’t introduce sustained productivity generation over the long term.
I have long held the view that a simpler, grass roots approach could generate a lot of activity for a relatively small investment. This would strengthen the city’s economy in a compounding, more sustainable way, while further developing the culture of the city, creating pride for residents.
To find out more about how Newcastle appeared to be leading the way in making the most of what it already had, I met with Christopher Saunders. Christopher is the General Manager of Renew Newcastle. Renew Newcastle is a not-for-profit organisation that partners with the city of Newcastle and local Developers to activate spaces by offering them at little or low cost to creative entrepreneurs. This allows creatives to “road test” their ideas prior to having to make a substantial investment in committing their IP to a business with a more permanent cost structure.
The City of Newcastle benefitted from this because large amounts of dormant spaces were activated and in doing so the culture of the city was celebrated. The creatives benefitted from being able to scale their IP. Some of these businesses have since sold for multiples of millions and a large proportion are now full rent-paying tenants in some of the city’s retail outlets.
Developers and land owners also got the benefit of securing leases for spaces faster in what was a soft market because retailers could see the benefit of being in a particular activated space.
The economic impact is limitless and the investment is minimal.
Developers can take a responsibility for strengthening the economic value of a city. To do so, Developers should make the most of what they have before they start, in partnership with local government. In my opinion, some of the benefits of early site activation for developers are as follows:
1. Consumers become familiar with a space
If consumers become familiar with a space, they will advocate for it; they will find feedback on how to improve it; and your tenants will have established customer bases when they commence trade. This will strengthen retailer performance, which is always in a landlord’s best interest.
2. Potential tenant relationships are established
Some of the operators who are allowed to activate your site early could become your first tenants in a completed development. Of the 260 creatives that used a space vacant space in Newcastle, 36 of them became permanent tenants.
3. Favour with local Councils and city governments is earned
The best way to win favour with city governments is to provide their constituents with something that they don’t have to deliver but can claim an association with. Typically, layers of bureaucracy, misplaced budgets and a lack of skin in the game prevent Councils from being able to deliver well-executed early activation.
4. Community engagement occurs and support for development activity rises
Engaging with the local community is now a given prior to committing to any development application process. Sharing the journey of a development with the local community ensures support is garnished and concerns are managed. Community feedback and buy-in is essential to get any development approval.
As an example of the benefits of early activation for Developers, food hall operator Urban Space run food and holiday markets in various locations in New York City. These markets become the source of well-regarded and popular tenants for their more permanent food halls.
Developers and city governments have joint responsibly for activating spaces, which should, in turn, establish sustainable economic growth within an area. Developers, cities, and consumers benefit from this activity.