Downtown turnaround? In these places, yes.

Downtown Minneapolis (Photo: Dan Anderson)

For decades, “going downtown” meant something special – probably from its very first use as a term to describe the lower tip of Manhattan, which was then New York City’s heart of business, commercial and residential life.

Downtown was literally “where it was at” – jobs, shopping, cultural attractions and all.

But then, beginning in post-World War II America, many downtowns lost their luster, as people were drawn to the suburbs thanks to cheap land and easy means to traveling to and fro.

In some places, downtowns and the areas immediately adjoining them became places of high crime, industrial decay, shopworn appearances and various socio-economic pathologies.

Things hit rock bottom in the late 1970s, as personified by the Times Square area of New York City. But since then, many downtowns have slowly come back from those near-death experiences, spurred by new types of residents with new and different priorities.

Dan Cort, author of the book Downtown Turnaround, describes it this way:  “People – young ones especially – love historical buildings that reintroduce them to the past.  They want to live where they can walk out of the house, work out, go to a café, and still walk to work.”

There are a number of cities where the downtown areas have come back in the big way over the past several decades. Everyone knows which ones they are:  New York, Seattle, San Francisco, Minneapolis …

But what about the latest success stories? Which downtowns are those?

Recently, Realtor.com analyzed the 200 largest cities in the United States to determine which ones have the made the biggest turnaround since 2012. To determine the biggest successes, it studied the following factors:

  • Downtown residential population growth
  • Growth in the number of restaurants, bars, grocery stores and food trucks per capita
  • Growth in the number of independent realtors per capita
  • Growth in the number of jobs per capita
  • Home price appreciation since 2012 (limited to cities where the 2012 median home price was $400,000 or lower)
  • Price premium of purchasing a home in the downtown district compared with the median home price of the whole city
  • Residential and commercial vacancy rates

Based on these criteria, Realtor.com’s list of the Top 10 cities where downtown is making a comeback are these:

  • #1 Pittsburgh, PA
  • #2 Indianapolis, IN
  • #3 Oakland, CA
  • #4 Detroit, MI
  • #5 Columbus, OH
  • #6 Austin, TX
  • #7 Los Angeles, CA
  • #8 Dallas, TX
  • #9 Chicago, IL
  • #10 Providence, RI

Some of these may surprise you. But it’s interesting to see some of the stats that are behind the rankings.  For instance, look at what’s happened to median home prices in some of these downtown districts since 2012:

  • Detroit: +150%
  • Oakland: +111%
  • Los Angeles: +63%
  • Pittsburgh: +31%

And residential population growth has been particularly strong here:

  • Pittsburgh: +32%
  • Austin: +25%
  • Dallas: +25%
  • Chicago: +21%

In the coming years, it will be interesting to see if the downtown revitalization trend continues – and spreads to more large cities.

And what about America’s medium-sized cities, where downtown zones continue to struggle. If you’ve been to Midwestern cities like Kokomo, IN, Flint, MI or Lima, OH, those downtowns look particularly bleak.  Can the sort of revitalization we see in the major urban centers be replicated there?

I have my doubts … but what is your opinion? Feel free to share your thoughts below.

McCormick Place Loses its Luster

Has all the grumbling about Chicago’s vaunted McCormick Place as America’s premier tradeshow venue finally reached critical mass?

For years, corporate exhibitors have groused about government-controlled, money-losing McCormick Place. Stories abound of exhibitors being forced to spend hundreds of dollars for services as mundane as plugging in a piece of machinery, or being charged $1,000 to hang a sign from the ceiling, because of onerous union rules governing “who does this” and “who can’t do that.” It’s been a constant refrain of complaining I’ve heard at every tradeshow I’ve attended at McCormick Place, dating back some 20 years.

Despite all of the criticism about McCormick Place’s high costs and lack of user-friendly service, it remains the largest convention complex in America, with over 2.5 million square feet of exhibit space. But attendance has been declining pretty dramatically, from ~3.0 million in 2001 to ~2.3 million in 2008. While the figures haven’t been released yet for 2009, it’s widely expected that show traffic will be reported as down another 20%.

As the current economic recession has put the most severe strains yet on the tradeshow business, it seems that a rebellion against McCormick Place is in now full swing. According to a recent article in The Wall Street Journal, “a gradual drop-off in business … has turned into a rout as a string of high-profile shows have pulled out.” The deserters include a triennial plastics show (~75.000 attendees), as well as the Healthcare Information & Management Systems Society’s annual conference (~27,500 attendees).

But isn’t tradeshow attendance off in other convention centers as well? Well … yes. But clearly not as much. In truth, tradeshow attendance has been under pressure at a “macro” level ever since 9/11, and an important reason beyond the issue of terrorism is technological innovation and the ability for people to interact through video-conferencing and for companies to demo their equipment and services via the Internet and other forms of digital communication.

Tradeshows were once the only way to gather a community together, but now there are other options. One school of thought holds that large tradeshows are now less effective than small, targeted conferences that provide heightened ability for attendees to interact with one another on a more intimate basis. Some events no longer charge attendees … but they make sure to “vet” them carefully to ensure that the show sponsors who are underwriting the costs are reaching prospects with important degrees of influence or buying authority.

On top of these “macro” trends, the current economic downturn just makes McCormick Place look more and more like a loser when it comes to the tradeshow game. Compared to Chicago’s three most significant competing tradeshow locales – Atlanta, Las Vegas and Orlando – the cost of many items from electricians (union labor) to foodservice (greasy spoon-quality coffee at Starbucks® prices) to hotel accommodations (room fees and surtaxes that won’t quit) ranges two times to eight times higher in Chicago. And in today’s business climate when every cost is scrutinized closely, none of this looks very cost-effective to the corporate bean-counters.

True, Chicago is more centrally located for travel from both coasts: Who wants to take a five hour flight from New York to Las Vegas or from California to Orlando to attend a meeting?

[On the other hand, no one can honestly say that the weather in Chicago is preferable to sunny Florida or Nevada!]

So it would seem that Chicago’s worthy tradeshow competitors have achieved the upper hand now. I just returned from two national shows this past week – the International Air Conditioning, Heating & Refrigeration Expo and the International Poultry Expo. Where were they held? Orlando and Atlanta – the same cities which are attracting McCormick Place’s erstwhile customers.