Manhattan Bridge, New York City.

Members of ULI’s new Placemaking Council discuss the value of bringing the notion of placemaking to development, the strategies for setting up placemaking projects that will thrive, the obstacles that can get in the way of success, common misperceptions about placemaking, and related trends.

Why is placemaking particularly relevant now?

Heather Personne: Across the real estate industry, there is greater interest in creating projects that are less focused on a specific asset class—multifamily housing, retail, or office—and more focused on creating a place where people want to convene. It’s about creating that third place that’s not necessarily where you live or work, but where people come together. Much of this change has been instigated by the millennials, who want to work and live differently, who are interested in the sharing economy. Even baby boomers are transitioning to living in more urban environments.
Kristopher Jon Takacs: There is a renewed interest in vibrant cities and urban places driven by the millennials, baby boomers, and gen Z. The real estate industry is trying to decode the creation of experiences in a walkable, transit-oriented, and cosmopolitan lifestyle environment, and to make that succeed at various scales and in different geographies and different markets.
Philip Palmgren: For a long time, retailing was the cornerstone or the foundation for placemaking. But just because you put a retail store in a certain spot doesn’t mean that all of a sudden you have a great place. Now, retail continues to struggle, and the millennial generation is demanding a more qualitative experience rather than a quantitative experience: they want places that aren’t necessarily about buying and selling, but rather about the experience of exchange between people. It’s a great time to think of both qualitative and quantitative analyses of developments and the precedents that can inform how we can make the world a great place for future generations.
Candace Damon: The kinds of places that we value as American communities are changing. When I was a kid, placemaking was about making sure there were enough roads that allowed you to move fast enough to get out of your urban place of employment to your suburban home, where you were guaranteed some modicum of private space. We’re now in a very different point in time, where the people coming of age and who are creating value all over the country want a different kind of space. Placemaking today is about thinking about transit solutions and how we’re going to create housing for low- to moderate-income people. It’s about great schools, great parks, and streetscapes that work to make cities livable and foster a level of inclusivity and socialization that wasn’t envisioned 50 years ago. Cities that are home only to the very wealthy and very poor can’t function, and betray our values.

What are some of the best practices for placemaking?

Takacs: It’s important to start with a powerful design vision. This helps build coalitions among all the various people it takes to make a successful project and, beyond that, to achieve authenticity of place over time. Developers, designers, and everyone else involved in the creative process must look deep into the future, to a time when they’re no longer involved, and consider the stakeholders who will live, work, and play there. Placemaking is shaped around these future users.
Personne: It’s all about curation. I’ve done retail development most of my career, and in the past, a lot of it has been tenant driven, helping tenants find spaces. Now, developers and property owners are being more selective about the type of tenant they bring in. They want tenants who will contribute to the kind of experience they’re creating and be catalysts for others joining in to build that sense of “wow.” Also, we’re not in this only for the money. We want to make some money along the way, but also create a return on the investment for the community and for the public sector, helping drive new opportunities in the surrounding areas.
Damon: The best practices are, to a very significant extent, specific to the communities in which one’s working. But it boils down to listening hard, using communities as sources of information about those communities and how they function and what they want, and bringing back the best data and the most creative ideas for solving the needs that have been identified. It’s important to understand that communities are extraordinary as editors and less successful as creators.

What are some of the challenges or pitfalls involved with placemaking?

Damon: The challenge is, in any particular place, to allow the range of private and public interests to explore which solutions are going to deliver the most value for each of them, and to come to consensus. I’m working on a site that currently functions as the divider between a community of great need and a community of great affluence. This site is viewed by one side of that divide as unwelcoming, and by the other side as dangerous. Until both sides of that divide can imagine a place that’s fun and provides opportunities for their children to play together and for the communities to mingle, the potential of that place can’t be realized. So the challenge begins with facilitating a conversation among private, public, nonprofit, and civic actors about what kinds of places really matter to them, and how we’re going to go about creating them.
Personne: The biggest challenge is the financing. You can talk about making a place creative and cool, but the numbers still need to work, and a placemaking project requires including something that doesn’t produce as much revenue as it could have in a different scenario. That may mean having more open space that isn’t revenue-producing, or bringing in a lower-credit tenant to attract other desirable tenants. Some owners have ­underwritten certain retail spaces at zero value, knowing that it may be necessary to cut some deals to start the process. Working with the public sector to find the right solution is key. People want something that feels real, genuine. They want something that doesn’t seem like it’s the same thing you could get everywhere else. They still want the experience to be efficient, because there are so many things that you could buy on Amazon instead of in a shop, but it’s a lot more about “stay and play” than “grab and go.” The challenge is to blend those things together.
Takacs: Authenticity is fundamental. Some places can end up feeling too canned, too specific, or too prescribed when they open. Successful places are ones that have strong bones but develop in organic ways, growing out of the DNA of the place that was designed.
Palmgren: Finding the right balance between outdoor open space and indoor open public space is hard. Both have to work in a harmonic balance, and these spaces need to be supported economically in some way. It’s up to the developer, elected officials, and the public. To build great public spaces requires including the public in the conversation; and often when these spaces fail, it’s because they aren’t tested through conversation and interaction with the public. Of course, even when you have the most robust outreach, sometimes it’s not in the cards that a project becomes successful.

The Hualalai Resort along the Kona-Kohala Coast of Hawaii’s Big Island. (Allen Kennedy)

What misperceptions about placemaking would you like to put to rest?

Palmgren: The biggest misconception being disproved by our market economics today is this notion that if you simply put retail in the base of the building, you’re placemaking. That’s been proven to be unsuccessful. Successful placemaking means offering people a place to exchange ideas and perhaps goods and services. The millennial generation continues to demand more with regard to a space. They want to just hang out without expectations that they’re necessarily going to buy something. They want a place of respite. So a place has to balance transaction and reflection. When you do that, the development community benefits because the value of their real estate goes up, and the community benefits because they’re able to have a space that they feel like they are welcome in.
Takacs: There’s a misperception that placemaking is an enhancement to otherwise conventional design work, and with the idea of enhancement usually comes the perception that one has to spend more money. I don’t think that’s true. Placemaking is a mind-set that can be brought to every project, from small to large scale.

What other trends are important to note?

Damon: The big moves in placemaking are about transit-oriented development, open space, and the linking of the two, which is a fairly new phenomenon. There is more attention to the question of how we introduce affordable housing into successful urban neighborhoods, at what scale, and with what money. And we are still figuring out what level of food and beverage should be incorporated, and in what locations, and how to best integrate pop-up activation.
Palmgren: National retailers strive toward the 25-foot-wide by 100-foot-deep (8 m by 31 m) strip-mall store or mall store. But there’s a real push in some underserved communities to find different models and different mechanisms for retailing. In one project we’re working on, we’re creating an exoskeleton that hooks onto the back of a building and provides shade and a utility infrastructure. So, a simple counter could be plugged into the back of the building and allow a vendor to sell coffee or ice cream without the burdens of a huge rent.
Personne: The federal legislation that created the Opportunity Zones Program a year ago is going to have a big impact, allowing investors to invest capital gains in properties being developed in low-income areas that have been designated as opportunity zones by the state. The program allows investors to defer paying income tax on those gains for years. It’s a pretty big incentive for people to put money into projects that will spur development in these zones. Hopefully, that will give developers more room to play and add in some of these placemaking concepts that people really desire.

Contributing their insights:

  • Candace Damon, vice chairman, HR&A Advisors, Athens, Vermont; vice chair, Placemaking Council
  • Philip Palmgren, founding partner, RePlace Urban Studio, New York City; vice chair, Placemaking Council
  • Heather Personne, principal, Point B, Phoenix, Arizona; vice chair, Placemaking Council
  • Kristopher Jon Takacs, director, Skidmore, Owings & Merrill, Washington, D.C.; vice chair, Placemaking Council