New town law A functional town center is critical to new urbanist projects

Setting up a legal framework for a mixed use town center may require the developer to look at malls for inspiration. Town center is by far the most complex part of a traditional neighborhood development (TND), where the mixed uses converge in a tiered and stratified, party-walled assemblage. Storefront is jammed next to storefront, with residences above and a layer of office space often positioned in between. The squares and plazas are not just passive parks in town center, but take on a variety of roles as a place for farmers’ markets, art festivals, even small, semipermanent shops. In town center, the automobile, however tamed and mollified, cannot be denied. And it is the place where the financial stakes are the highest. Commercial property in general is more valuable than residential, and the density of uses intensifies greatly in town center, making each square inch valuable. In most TNDs, the residential portions are developed first, in order to sell the first lots relatively cheaply. Once a lot is sold, the founder rarely has an opportunity to share in the appreciation. When the commercial district of a TND is developed later, appreciation on the residential side will often present itself as increased value on the commercial side, allowing the founder to capture the appreciation. If, instead of selling commercial property, the founder retains ownership of town center and acts as landlord, the property can generate a steadily increasing stream of rent income. Legal structure important Before letting go of land in town center, or submitting any part of it to a declaration of covenants, conditions and restrictions, the founder should consider how town center will be owned and maintained in the long term. In the pre-World War II towns that TNDs emulate, ownership and maintenance weren’t developer issues. The civic realm was designed, owned and maintained by the municipality. In a handful of new urbanist projects (such as the stunning redevelopment of West Palm Beach) this is still the case. But most TNDs are designed and developed by private enterprises. While these TNDs may resemble traditional downtowns, the most suitable legal model may be the shopping mall. In the mall model, a single commercial manager retains long-term ownership and control of the common spaces — either directly, or through a separate town center Association. To maintain the common areas — the plazas, the parking areas, public restrooms and, if private, the streets — merchants are charged common area maintenance fees. The founder may retain the right to modify and reconfigure common areas, including the right to carve out additional commercial space as the project matures. If the founder sells off parcels within town center while retaining other portions, he or she may retain a good deal of power over the use of parcels through recorded deed restrictions. These restrictions may regulate things such as signage, hours of operation, cleanliness standards, and even what type of merchandise may be sold. While expedient, the thought of applying mall mentality to a TND may be somewhat disquieting to TND enthusiasts. Land use planners see town center as the civic realm, the heart of the community where people meet, congregate, and enjoy the urban environment. Town center is, in that viewpoint, an amenity to which all residents should contribute. The mall approach works because these two roles—civic realm and market place—are complementary. A successful, pedestrian-oriented market place will add to the vitality and livability of a good TND. If the founder is lucky, a good urban design will result in a successful market place. (When this is not true, the mall approach fails.) Is this top-down approach the only way? Certainly not. When there are multiple property owners within town center, it could be run by a commercial property owners’ association which is not dominated by a single entity. In a smaller TND with limited commercial areas, a single association could manage both residential and commercial areas—although the commercial uses must be protected in the recorded documents to prevent the majority residential owners from imposing unreasonable restrictions on the commercial minority. The live-work units which make up the town center fringe could easily be part of a more democratic environment. New models are possible. For now, the view is this: the mall approach to town center may be inelegant, but it works. u Doris S. Goldstein is an attorney representing traditional neighborhood developments. To submit a question or topic to be addressed in a future column, call or fax at 904-730-2960, or e-mail to NewTownLaw@aol.com.