July 12, 2016

Growth Planning Roundtable

– Business Tennessee –

A healthy community is a growing community. Companies prosper and expand their facilities; their prosperity attracts new residents looking for jobs; new residents drive demand for new housing and schools. This is how our economy and standard of living have improved continuously for centuries – citizens seeking the American Dream by building a big, new house on a multi-acre lot, or though entrepreneurship by opening a shop in a nearby strip mall.

But one person’s dream can be another’s sprawl if that growth harms the existing quality of life. Communities across Tennessee are finding various ways of balancing the need to grow with planning efforts to reduce its ill effects.

To hash out these issues, Business Tennessee assembled a discussion in mid-March with five experts.

Barry Bennett, executive director of the Chattanooga-Hamilton County Regional Planning Agency.

Rusty Bloodworth, executive vice president of Boyle Investment Co., a development company based in Memphis.

Steve Darden, a commissioner of Johnson City and a member of the Johnson City Economic Development Board.

Bridget Jones Kelley, executive director of Cumberland Region Tomorrow, a Nashville-based nonprofit seeking to influence future growth plans in the Midstate.

Arthur Seymour, a partner with the Knoxville law firm of Frantz, McConnell & Seymour who is active in land use and zoning issues.

BTN: Bridget, it might be useful to define what’s meant by “smart growth.” – Bridget Jones Kelly: Okay, I’ll take a stab at that. Smart growth, or quality growth, is a systematic process for an organized growth in a way that protects and sustains our quality of life. These plans define what’s needed in preserving farmland and open spaces, protecting the environment, and strengthening cities, towns, communities and neighborhoods so that they become preferred places to live and work. It requires a significant change in mindset to look at development this way, and it must be supported by enforceable planning and zoning that makes these priorities compatible with economic development.

BTN: Is there any difference in meaning between “smart” growth and “quality” growth? – Kelly: For us, no. It’s really a matter of semantics. Sometimes “smart growth” doesn’t fly with people.

BTN: Barry, how do you judge the mindset toward growth planning or smart growth in the Chattanooga area? – Barry Bennett: We had a fairly difficult time here locally, with the Tennessee urban growth legislation several years ago. They really got so far away from anything that even remotely resembled the smart growth initiative that it just kind evolved into an annexation. It was a very divisive situation, particularly between the local city and county governments because the county commissioners were getting quite a bit of flack from constituents who did not want to be annexed. They knew that if this law passed, the burden of proof would pass from the municipalities seeking to annex to the people they were trying to take in. It pretty much restacked the cards. Of course, the interest on the part of the people in the municipalities was having a fair distribution of taxes, so it was very difficult here. So smart growth and the growth plan as it was passed became two different issues.

As far as how smart growth in its pure form is perceived, I went to a national smart growth conference that was held by the homebuilders association in Denver three or four years ago. I was very surprised to find that none of the builders across the nation were opposed to smart growth. The main problem that they had, and this was from one end of the country to another, was a feeling that they were not being included in the discussions at the front end when it came to developing new regulations, standards and zoning, and so forth. If they were involved in the discussions and had some part, as a stakeholder, actually developing those regulations, then normally they would buy into them and things would get passed without much heartburn on anybody’s part. So we’ve been making every effort to have them at the table at the front end.

BTN: Rusty, as an active developer in Memphis and various markets around the country, what’s been your experience with the growth planning process? – Rusty Bloodworth: When you get into the homebuilder organizations, they typically have not been as focused on smart growth or growth issues, adopting more of a defensive position. There’s no question that there’s been much more buy-in when they’re included. We’ve had a little bit of that down in our area where there has been an effort to make some inclusions. I think that what happens often is, if they are not included, many times the growth initiatives get derailed politically. And if they are included, and you’ve got the right players at the table, you can craft a policy that can get onto the books and actually take effect and have an impact. I would say we’re on a learning curve as an industry.

BTN: Arthur, how much discussion is there of issues of smart growth and sprawl in the Knoxville region? – Arthur Seymour: Quite a bit. The problems we have here both in the City of Knoxville and our Knox County zoning ordinances are ‘40s and ‘50s-type ordinances with some band-aids applied to them. The builders, as our planners point out, will always take the easiest path. For years our zoning ordinance has permitted going out and buying a farm and chopping it up, and putting houses out there. We have tried to amend the zoning ordinance. We’ve got traditional neighborhood areas in there, which are mixed office, commercial and residence. We’ve got our first project going in on that now and if that’s successful, I think it’ll encourage other people to follow but it’s certainly a topic that is discussed.

Sprawl has been very much in the newspaper because it may have been the Urban Land Institute that said our area – Knox, Blount, Anderson, Loudon – was as guilty of urban sprawl, if you can be guilty of that, as any area in the country. Our growth tends to follow the spokes of the highways and the interstate systems.

BTN: Bridget, what’s wrong with growth tending to move along roadways? – Kelly: Well, we have just completed here in the Cumberland Region a pretty aggressive regional visioning project. We brought in John Fregonese from Portland (Ore), one of the national experts in growth scenario modeling. The visioning project produced two growth scenarios. One is a good depiction of a general traditional sprawling development pattern following our roads and highways that are going around and into Nashville. The second growth scenario is an alternative case that incorporates practically all smart growth principles – more concentric growth and development, maintaining open space and farmland, encouraging mixed-use, high-density development.

With the base case, letting growth happen up and down the new roadways and highways, that sprawling development pattern would consume 365,000 acres, or the amount of land that equals the size of Davidson County. With our alternative case scenario accomplishing the same amount of growth the same number of folks moving in, the same amount of job creation – that case would consume only 91,000 acres, or 25% of the land. The next point: the infrastructure costs for the alternative case are $3.5 billion.

BTN: Steve, as somebody that’s involved in Johnson City’s BCD efforts, what’s your take on growth planning efforts in the Johnson City area? – Steve Darden: I think we are somewhere between the recognition phase and the meaningful action phase. The concern that people have about sprawl and the impact that it will have – the disappearance of farmland and whatnot – is a real concern to folks, but we have not really figured out what we can do to reverse that trend which seems to be the type of things that takes on a life of its own.

BTN: In the conversation of that region, is there any talk about any trade-off between these sorts of concerns and creation of jobs and business development? – Darden: There certainly is. The concern is that if we’re too proactive in limiting what can happen on a piece of land that it can stifle growth and would encourage business that might locate here to simply go elsewhere. Ultimately, that would have a negative effect on the local economy.

BTN: Rusty, a little bit earlier, early-stage mixed-use development was mentioned. How have Boyle projects like Schilling Farms accommodated some of the concerns that have been discussed? – Bloodworth: We’re trying very hard to mix uses much more complexly than we did 20 years ago, or even 10 years ago. In fact, if you chart our company’s large-scale developments in the 200-400 acre range, over the last 30 years, we’ve gone from hiring just two or three land uses on a 200-acre tract to having 14 land uses on our Schilling Farms tract. There are some economic incentives to doing that because you create an increase in the pace of development. But it is much more difficult to accomplish. High quality, mixed-use development requires a huge team of really top consultants to do the work. We employ today 11 or 12 different consultants on a team for a property that we’re working on in Franklin (the 600-acre Berry Farms project along I-65). Thirty years ago, we would have had two.

BTN: What’s the market demand of these sorts of developments? – Bloodworth: What we’ve found at Schilling Farms is that it’s difficult right out of the chute to create a sufficient sense of place and an understanding of really the kind of quality environment you’re putting together. It takes having enough of it put together that people can visualize it. We’ve found that while we’ve probably lost part of the market, at the same time we are putting a product out that, long-term is a much better way to build communities that will not suffer the very clear obsolescence that most suburban areas that have been in existence for 20 years are suffering.

BTN: Barry, what sort of market interest are you seeing in Chattanooga for these sorts of mixed-use developments? – Bennett: That depends on where we are. We had a great deal of success with mixed-use overlay zones in the urban core. Those zones don’t have any prescribed standards dealing with such things as lot size, setback, building heights, off-street parking, and so forth, and they’ve been extremely successful. Now, as we move out, the degree of acceptance on the part of the public decreases tremendously. And when you get into the suburbs, the development community, particularly the home builders, is very concerned about some of the design review issues moving from the downtown area into really what they consider their domain. Plus, the acceptance by the general public for that type of development in the more outlying areas is not there, at least not in this community. The cost of single-family housing is still relatively low compared to other communities. There’s quite a bit of developable land left, and I guess you could say that we’re still somewhat behind other more metropolitan areas in that regard. The townhouse concept has been accepted here for only a few short years.

We’ve found that the buy-in has been improved through getting much more public input in the planning process. We’re in the process now of trying to create a more detailed neighborhood plan for every community in Chattanooga and Hamilton County. The commissioners, the council people here, have learned that becoming part of the planning process is a most valuable tool for getting direct contact with their constituents. So, they’re attending every meeting that’s within their district, and when the other council people have seen the benefits that have been derived from that politically, then they want a plan done in their area.

BTN: Speaking of zoning, are you seeing much usage of other legal tools such as historic overlays and conservation easements in the Knoxville area, Arthur? – Seymour: Yes I had two projects last year. One was a construction and demolition landfill that we got expanded by going to the affected residences and putting a conservation easement over a good hunk of property that assured them that it would never be used for future landfill expansion. We sailed through pretty smoothly on that. For another project, a commercial office in the north end of the city, we used conservation easements over some really rough terrain to ensure the neighbors that these sites would never be used for commercial use. Now that we’ve got the conservation easements in place, we’re going to try to see if the city won’t just take them over and use them as a park. A very handy tool.

Bloodworth: We’re seeing much more of that in our area, increasing every year over the last four or five years since it was introduced. There was something in the Commercial Appeal about a 1,400 acre tract on the edge of Fayette County. We’ve worked on two or three ourselves in the last year. This is an incredibly helpful tool, particularly with farmland.

BTN: Bridget, the Land Trust for Tennessee has been working with large Midstate landowners in arranging conservation easements that permanently limit development of their property while conferring tax deductions for the diminished value of their property. How big a role is the Land Trust playing in preserving property? – Kelly: A very critical role. We are so fortunate to have had the leadership and the vision of the governor a long time ago and Jeanie Nelson, the president of the Land Trust for Tennessee, in forming that organization here. They have done a wonderful job of strategically conserving important open space areas, or areas with significant historic or natural resource value in this region around Nashville. Rusty, the Land Trust was involved in that announcement you mentioned down your way – it was one of their first significant West Tennessee projects. We’ve seen a growing level of this activity by landowners to use the conservation easement tool that the Land Trust offers to increase the choices they have in hanging onto their land, and keeping it in an open state, versus yielding to the pressures of development.

BTN: Steve, are you seeing any sort of development like that in the Johnson City and Tri-Cities area? – Darden: Frankly, I’m unaware of that taking hold here, but there’s a critical need for it. The mention was just made of historical sites, and we are the oldest county in the state. Our sister city in Washington County, Jonesboro, is the oldest city. Jonesboro has done a wonderful job of preserving its heritage. There are, however, historical sites in Washington County that are being encroached upon as we speak, and that really is a great concern.

BTN: As mentioned, some individuals have sincerely held opposition to some of the concepts here. Rusty, what do you see as the most troublesome aspect to accommodating growth planning advocates? – Bloodworth: A couple things really make the whole process difficult. One of those is trying to create a plan using a large scale parcel, which has tremendous advantages as far as being able to do a master plan in some detail. But the difficulty is that if it’s a large-scale property it means that it may go through a 30- or even 40-year development cycle. Today in some municipalities, they are not approving plans without what they consider a detailed plan – detailed down to the individual buildings. Yet, it is really beyond anybody’s ability to reliably project what a retail component, for example, might have to look like ten years out compared to what it looks like today. So the demand for great specificity, when it’s almost impossible to project, puts a kind of impossible task on the developer, costs an absolute fortune to do the planning for, and takes much longer, so much more money has to be committed upfront before you have any entitlement.

That’s one problem. The other problem to that is very difficult to legislate a great place. It’s hard to legislate great architecture and the relationship between buildings. If the community is too rigid in its approach, as I think Barry in Chattanooga was saying, the builders will simply opt out. For example, perhaps the choice is that there cannot be any brick in the community at all. We’ve got a few failures down here in our region that have come from over-specificity on the architectural front, while at the same time, the builders need a tremendous amount of guidance in order to create a wonderful place. So there’s a great tension there. When the regulatory bodies get too rigid, it pushes people away from doing the very kinds of things that the municipalities would like them to do.

BTN: At the risk of being too rigid ourselves, we’ll call this roundtable a wrap. Thanks for participating.