The fact that Downtown is vital to our economy should go without saying. A recent report by the International Downtown Association showed that while downtowns average only 3 percent of citywide land, they account for 31 percent of citywide tax revenue.
It's because of this that downtowns are usually some of the only areas generating more money in property and sales tax per acre than it costs government to pay for the infrastructure to support them. And that holds true in Lafayette. This study shows that the only areas that pay for themselves are Downtown, River Ranch and Acadiana Mall. Put another way: The tax revenue generated in these areas subsidizes government services throughout the rest of the parish.
At the same time, if we want to attract and retain as many college students and graduates, millennials, professionals and retirees as possible, then we need our Downtown to be able to fulfill this demand by people who want to live, work and shop in a walkable, culturally rich environment.
But that's not where we're at today. That IDA report found that downtowns typically account for 30 percent of citywide jobs, yet our Downtown only supports 7,000 jobs, or 14 percent of the 50,000 total jobs in Lafayette.
A recent study by a national retail expert highlighted how our underdeveloped Downtown could support another 160,000 square feet of retail and restaurant space if we were to bring Jefferson Street up to national standards and open more land to redevelopment, which would represent $55 million of additional revenue.
Even worse is the housing situation. Lafayette's Downtown Action Plan suggests that while our urban core should have the capacity to house 10 percent of our city's population, today it only has enough residences to support less than 1 percent of Lafayette's residents.
And relative to the rest of Lafayette, development in the city center has been stuck in the mud. Since 2010, 5,000 housing units have been added across Lafayette, yet less than 100 of them were built Downtown. Yet Downtown Development Authority's Residential Market Study demonstrates there's a market of thousands of prospective residents ready to buy or rent hundreds of homes every year. In total there's demand for at least 1,000 new market-rate housing units Downtown over the next few years alone.
So when you add this all up, our urban core is missing out on tens of millions of dollars in revenue from retail, restaurants, offices and homes year after year, which could be producing millions in additional sales and property tax revenue to help Lafayette Consolidated Government improve our infrastructure. Altogether over the last decade we're talking about hundreds of millions of dollars of opportunity lost to grow our economy and build wealth in our community, and tens of millions of dollars of lost tax revenue.
Meanwhile, other cities our size are achieving incredible investments in their downtown areas. Huntsville, Ala., has $250 million in projects currently in development downtown, including the addition of 500 hotel rooms. Chattanooga, Tenn., saw $529 million invested in its central district in 2015 alone, adding 1,200 new residential units with another 2,100 in the pipeline.
These are the kinds of cities that we're competing with to attract new residents and new businesses. So not only are we missing out on opportunities, but we're also actively being left behind, which means we're getting less and less competitive with each passing year of inaction in developing our Downtown district.
No project is perhaps more emblematic of the morass Downtown has been in than the old federal courthouse. One of the largest contiguous developable properties in one of the most prime locations has been abandoned and effectively blighted since 2001. While there have been multiple attempts to redevelop it, including a 2014 partnership with LPTFA and again a 2015 plan to build a new parish courthouse, nothing's been able to clear the political hurdles and get this property back into commerce.
Yet a project of this magnitude is exactly what we need to catalyze development. While fully developing Downtown is a multi-faceted challenge, arguably the biggest problem is that no one has ever pulled the trigger on building a market-rate apartment or condo complex with 20 units or more that offers modern amenities and new commercial space.
Which is what makes the recent news of Mayor Joel Robideaux selecting a development partner for the old federal courthouse property potentially so economically significant. If this attempt can (finally) successfully redevelop this property, Downtown will gain all sorts of benefits, including:
- Establishing a comp to help other similar developments secure financing
- Adding residents who increase market demand for retail and restaurants
- Increasing the value of surrounding Downtown properties
- Generating additional tax revenue for LCG and DDA to reinvest in infrastructure
- Making Lafayette more competitive in attracting the kinds of residents and businesses that are seeking urban environments
The market opportunities that exist Downtown aren't going entirely unnoticed, as DDA's executive director, Geoff Dyer, tells me he's received multiple calls from national developers interested in developing projects Downtown just in the last few weeks.
But economically speaking, as much as I welcome any and all investment in our Downtown, I am hoping that we will continue to see significant leadership from our local developers and investors. The reason for this is simple: The more Downtown developments are owned locally, the more the revenue and wealth they generate will stay in our local economy.
That doesn't mean I'm against outside developers investing in our community, as any development is better than no development; in some cases national developers may have greater capacity to bring truly world-class developments.
But ideally the efforts of the locally owned Place de Lafayette group, which LCG selected to redevelop the old federal courthouse, are just the first among many similar local efforts to tap into the bounteous market opportunity awaiting anyone with the willingness and ability to invest here and potentially profit handsomely.
Proper Downtown development can't wait any longer. If we want to be a modern city that's competitive nationally, if we want to have a local government that can afford to support and maintain our community's infrastructure, and if we want to have a robust 21st century economy, then we need a fully developed Downtown district. Hopefully the old federal courthouse will be the first domino to fall.