A couple of weeks ago I read an article in the Cincinnati Business Courier by Tom Demeropolis about a big firm looking for a new office. (http://www.bizjournals.com/cincinnati/search?q=tom+demeropolis&s=1&pl=5 ) He said they might not be able to find a space that works in existing buildings and could opt for new construction instead.
One line of his article haunts me and I’ve been arguing with Tom Demeropolis in my head ever since.
“A new office tower in downtown would be a huge boon for the city.”
If Tom were in the room with me right now, here’s what I’d say to him:
Real estate is a long term investment, Tom. What we build today has to be relevant to the way we live our lives in Cincinnati for at least the next thirty or forty years – hopefully longer. We can’t base expensive decisions about our built environment – ones that usually involve significant public subsidy – on the tastes of successful men in their sixties who are nearing retirement. We have to build for the young.
And young workers don’t want to drive cars everywhere, live in the suburbs like their parents did, play golf, join private clubs, wear Rolex watches, sit in private offices with the door shut while their secretaries screen their calls, get their news from a 6 p.m. broadcast, or work for the same big corporation for their entire professional careers.
One of the two possible new construction candidates you mention in your article, Eagle Realty, envisions using their properties around the Lytle Park Historic District as a “corporate campus.” Notice the terminology, Tom. The same way we tried to reinvigorate downtown with retail concepts borrowed from malls with their anchor-tenants, that idea is borrowed from the rush of big corporations to Mason and Blue Ash for tax advantages and free parking in the Eighties.
Tomorrow’s economy is a different, internet-based animal. It’s about decentralization, being light on your feet, rapid adjustment to change, and collaboration. Isolation – be it out in the suburbs on a corporate campus or high-up in the sky in a vertical fortress is a major miscalculation. Look at Dunnhumby, one of the fastest growing new companies on the local scene and what they are building for their new corporate headquarters at 5th & Race. Modest, natural light, environmentally friendly, lots of interactive spaces where employees regularly share. That’s tomorrow.
The average square feet a company leases per employee has declined from 250 square feet to 180. Today’s best workplaces favor shared spaces and flexible, off-site work arrangements. Procter & Gamble is selling one of their downtown office buildings as they continue to streamline their operations. Look at the success of the Brandery if you want to understand the rising influence of entrepreneurs in the economy. Then there’s the fact that the vacancy rate for commercial office space was 12.4% in 2004 and today it’s still over 20%. We aren’t using what we already have. The writing is all over the walls if we question accepted wisdom that bigger is better and success looks like another tower on the skyline.
Developers might be able to put together a financing package that works for them and even get a new skyscraper leased initially, but shortly after the guys who built it have retired, it is highly likely that Cincinnati will be trying to figure out how to rearrange the pieces of a giant monument to yesterday’s America into something that’s useful for us today.
Thanks for listening, Imaginary Tom. And, by the way, Real Tom Demeropolis, thanks for making me think.