Before You Go - July 2015
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Public Parks = Economic Value
Pittsburgh Parks Create Solid Financial Impact

By Deborah L. Vence

Besides the fact that parks provide recreation and health benefits, are aesthetically pleasing and bring people closer to nature, they also provide economic value to cities.

In fact, a recent economic impact analysis of Pittsburgh's Three Rivers Park proved that parks generate significant economic value.

The analysis was initiated by Riverlife, a public-private partnership established in 1999 to guide and advocate for the redevelopment of Pittsburgh's riverfronts. Riverlife contracted Sasaki Associates to use a rigorous and quantifiable approach to analyze the economic benefits of Pittsburgh's Three Rivers Park, which is the city's 13-mile interconnected downtown riverfront park system. Three Rivers Park encompasses more than 13 miles of downtown riverfront and 850 acres of open space, and serves as a hub for many more miles of regional trail systems like the Three Rivers Heritage Trail and Great Allegheny Passage.

"Riverlife has been working with a number of partners since 1999 to build Three Rivers Park, downtown Pittsburgh's riverfront park system. In that relatively short amount of time, the city has seen tremendous growth adjacent to these riverfront parks in the form of new hotels, office buildings, sporting venues and housing. We had a gut feeling that the development was directly related to the improvement of the city's riverfronts, but we wanted to see what the quantifiable data would show us," said Jay Sukernek, Riverlife acting director.

According to the study, conducted over the past year beginning in mid-2014, the impact of park improvements in Pittsburgh and other U.S. cities shows public realm investments yield significant return on investment by catalyzing new development in adjacent areas and helping to meaningfully increase property values. The reason this is so significant is because it shows public realm projects can pay their own way. Moreover, the ability of parks to create value must be explicitly acknowledged and should play an important role in discussions around capital and operational funding for future park projects.

Some of the key findings from the analysis include:

  • $129 million invested in Three Rivers Park over the past 15 years has helped to catalyze nearly $2.6 billion in riverfront development activity and nearly $4.1 billion in total riverfront and adjacent development. Just analyzing the $2.6 billion riverfront yield, the ratio between park investment and riverfront development is 20 to 1.
  • This 20-to-1 yield is the high end of what has been achieved in comparable cities, and speaks to the strong success that has been accomplished along Pittsburgh's waterfront.
  • Studying changes in property value since 2001, the data shows a 60 percent property value increase within the vicinity of riverfront investment projects compared with a 32 percent property value increase citywide outside the riverfront zone of influence (ZOI). The pattern in Pittsburgh and in other cities across the country is clear: Properties with close proximity to high-quality park infrastructure increase in value more than properties that do not have such proximity.
  • The area with the highest property value increase is the area around the South Side Works. From the Birmingham Bridge to the Hot Metal Bridge and back past Carson Street, a new riverfront neighborhood has developed and property values have increased on average by 117 percent."The findings strongly indicate that investing in well-planned, well-designed public parks along Pittsburgh's riverfronts has had a multiplier effect on economic value creation," Sukernek said.

"The 'greening' of Pittsburgh's riverfronts has literally changed the face of the city. The $130 million invested in building Three Rivers Park over the past 15 years has catalyzed nearly $4.1 billion in total riverfront and adjacent development," he said. "When you see those numbers, it's hard to argue that parks are a luxury or only cater to a small segment of the population. People want to be near beautiful, well-maintained public open spaces, and in Pittsburgh's current real estate development boom we see downtown developers responding to that desire."

Furthermore, the study also projected the impact of a $50 million investment in waterfront-oriented public realm improvements in the Strip District neighborhood—which is the rapidly developing area along the Allegheny River in Three Rivers Park. Three different scenarios that estimated future value generation from tax revenue were used, informed by ratios comparing public costs of improvements to catalyzed development value from recently completed projects in Pittsburgh and other cities.

The analysis indicated that the estimated tax revenue projections range from $6.8 million to $15.6 million annually. At such levels the estimated revenue generated more than makes up for the estimated annual debt payment of $3.3 million to the city, which is considered a conservative estimate assuming that the entire project is bond financed.

As for future projects at Three Rivers Park, Sukernek said that more than 80 percent of the 13-mile loop is complete and Riverlife anticipates finishing the remaining gaps over the next 10 years.

"One of the most exciting projects on the horizon is the creation of a 20-block riverfront park in Pittsburgh's bustling Strip District and Lawrenceville neighborhoods," he said, "which will connect those growing communities to the riverfront while also creating solutions for managing stormwater runoff and restoring natural riparian habitat."

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