Forum Replies Created
October 20, 2015 6:08 pm at 6:08 pm in reply to: 12-story, 170-room Hilton Garden Inn Proposed Downtown #1098282
I take it none of you live in this area… my condo is right behind this proposed 12 stories… my northern view is officially gone when this built. Couldn’t have bought this at worse time.
It’s not like they’re building a billboard in front of your ocean view. I’ve got a friend with a north facing unit in City View and while beauty is in the eye of the beholder there isn’t much to see. The best view is probably on the rooftop looking south. For some the additional building is only going to add to the “city view”.
Regardless from an investment perspective the additional development is only a positive for you. You should be happy you bought before the development comes instead of having to pay the premium afterward.
I don’t think its about saying we shouldn’t support integration. Right not there isn’t integration and both the lower income and higher income people know it. The higher income people usually come into an area with the expectation that the higher values and new developments will push the lower income people out. So any integration if at all is just temporary and until the area is fully gentrified. So from the lower income persons perspective they are intruders to them. Its fine and dandy to talk about things further dividing us and how we should work together but their reality is that they are going to get pushed out. When you live in an area for a long time and then get pushed out by no fault of your own it has to hurt.
Keep in mind I work in development where I’m on the other side pushing these people out. Do I wish we did things differently? Yes. However were a private business and need to make money. So we therefore have to basically cater to the market place and the standards of most other businesses. So we could voluntarily provide affordable housing at a loss but then we’d be out of business and that doesn’t help anyone. Therefore we need better regulations that all developers would have to adhere too making it an even playing field.
So my suggestions would be to first have some sort of inclusionary zoning. That is in order to build new units a percentage of those units would need to be affordable housing. That therefor ensures that all neighborhoods have affordable options and pushes the cost structure on to the new residents. The way we do affordable housing is backwards because we tend to make large affordable housing developments and then stick them in undesirable locations. This increases the likelihood those people continue to need assistance. It also segregates the community and the wealthy are able to move into area making them entirely wealthy leaving other areas to crumble with little taxes for schools, community, etc. So the lower income people live in lower income areas with poor schools and then its completely their fault their child doesn’t perform as well as the kid in the great area with great schools.
My next suggestion would be to have a better property tax system. Right now we primarily have homestead for seniors. Their should be a homestead for low income people and it should be calculated differently. It shouldn’t be an exemption of a certain amount but instead tied to the value at which you purchase. So for example lets say you buy a house for $80k and your property tax $100 a month. Sure a $50k exemption will help but what happens when the value of the houses in the area reach $300k. You’d still have to pay taxes on a $250k house value which is probably more than you can afford. Instead they should still value your house at $300k but each year your property tax bill should only go up acording to some inflation index.
So if you bought the house for $80k and have been there for 20 years then your $100 a month tax bill could have gone up at most to $180 (100 x 1.03^20) if inflation average 3%. That would be less than if the values went up to $300k, with a $50k exemption so you’d have a value of $250k and say a $310 a month tax bill. Keep in mind if someone purchased a house for $80k with a 5% FHA loan their payment would be $560. A $210 increase in their property tax bill is a 37.5% increase to their monthly payment.
So basically if you move into an area and buy a house, the increase in the property taxes in that area should be the burden of the new people moving in and purchasing at the higher rates. The way in which we calculate and use property taxes basically ensures segregation. When wealthy people move into an area, the property taxes rise to a level that only they can afford and then those property taxes are used to make there areas and schools better so they can live in their secluded communities protected from the outside. The notion that we have public schools is a sham. We have private community schools, but I digress..
I can’t speak for anyone else, but I’m very happy about having a racially and economically diverse neighborhood, and I’m glad to see wealthier people of any color moving in.
However, the downside of gentrification from a social perspective is when the wealthy people moving in push all the poorer people out, either just from housing costs rising, or from the original residents being made to feel unwelcome. This isn’t a farfetched scenario, it happens frequently. For example, when OTE was beginning to gentrify, I remember more than one occasion where brand new residents called in newly-minted housing code violations on long-term residents of the neighborhood (one was the famous sign battle documented in “Flag Wars”). Up unto this point I think the KLD has been a shining example of neighborhood revitalization going right, but I don’t think it’s alarmist to also have concerns.
As far as the concept of an entire neighborhood changing racially overnight, it may seem fanciful, but it has happened before. When my grandparents moved into OTE, they were the second black family on their block. It was an all-black block within 2 years and remained so for 30.
Yeah I agree here. I also don’t want to speak of other people but I think right now I think the paradigm is that wealth people moving in and lower income people remaining are mutually exclusive.
To go back to a quote from the original article:
“I think you’re going to have class segregation no matter what you do. It would be nice to have people of all classes living right next to each other in gentrified downtowns. That’s probably not going to happen. It is true that a gentrified area tends to become less diverse. Cities can’t solve all problems.”
The vast majority of the lower income people in most of these areas that are going to get gentrified are not property owners. So wealth people moving in only raises prices and forces them out. It can even be tough for propety owners as well. You have people who may own and are on a fixed income and the values increase they essentially can’t afford the new property taxes and are therefor forced to sell.
So when we’ve gone into areas to gentrify them for a profit its usually met with heavy resistance from the locals. They come to the city meetings to argue against us and they aren’t arguing to keep wealth white people out because they don’t want mixed income communities, they’re arguing to keep them out because they know its usually an “us vs. them” situation.
Making things worse the white flight that happened in the past was the wealth leaving the cities and moving to the suburbs. So the lower income people were left IN the cities where they still had better access to public transit, and a better connected area. This time you have the wealth moving back to the city and therefore pushing the less wealthy out to the less connected areas where they will be even more unequipped to succeed.
I think (besides High) a line from downtown to CMH to Easton would be good. If it cannot be built along the railway right of ways, then down Broad and up Steltzer would work. It would help rejuvenate East Broad and help kickstart the redevelopment they want near the airport, and there are still some open spaces along Stelzer for high density development(as well as at Easton). Also it looks like Stelzer could be widened without too much difficulty. Have a transit center at the airport, and you would have a connection between the main retail center, the main transportation center(the airport and the transit center) and the core of the city and major job center.
I’m not a fan of the existing rail route. At first though it seems like an obvious choice but in terms of functionality I think it would be bad. If your goal was to get people from the airport into downtown without any stops then I think it works. But I just don’t think were to the point where that should be the focus. A route down Stezler to Broad would take longer but would connect to so much more of the city.
And as you mentioned a connection to Easton would be great. Imagine a train location at Easton with a lot of mixed used residential on Stezler rd. First it’s what Easton really needs to move forward past just primarily shopping. With more residents it could develop into a true town center. You have plenty of jobs nearby and then when you want you could take a train into downtown. It would be a great affordable option for young professionals.
I fail to understand the reason or need for super high skyscrapers other than a cool skyline look.. it seems all they do is block sunlight which we dont get enouygh of in this town anyway with all the gray days.. the 10-15 story building makes for a nice density level and also still being able to see the sky when walking along the street. with the ;large amount of land we have in this city it seems like a population base large enough to support retail / restaraunt growth can be obtained with buildings in that 10-15 floor range. we arent bounded by mountains, oceans, lakes, etc like many cities are so we can spread a little and still be very walkable / bikeable in the central area.
An area of 10-15 story buildings can block out more sunlight than an area with 30 story buildings. In order to create view/light corridors many places usually put setbacks. So for example when you go above 8 stories you have to set the building back further. This allows for the sun and light to get through more hours of the day. So depending on what density you are shooting for you may need a taller building that get’s slimmer as it gets higher than a shorter fatter one.
For example let’s say you a shooting for 300 units per acre and want a max lot coverage of 80% and you have an acre lot. That would mean you want to build 300 units which when taking into consideration hallways, back of house, etc that would be about 350k SF of space. You would need about 450 parking spaces which would be about 160k SF of space and lets throw in another 25k SF for lobby, retail etc. That about 530k sf of space. Now you have an acre lot and want 80% max lot coverage so you have about 35k square feet to build on. So 530,000/35,000 is about a 15 story building. So could be shorter or taller depending on the density you’re shooting for. But that’s a 15 story building that is straight up and down. You’d get a much better building with more view corridors, space between the buildings for better balconies, etc if the building stepped back to a 20k floor plate after the 8th floor which would lead to a 20 story building.
I cannot figure out why the Columbus business community won’t push for rail transit. I am sitting in a hotel looking at the building boom around the new Metro stop at Tysons Corners Virginia. Everywhere light rail and heavy rail is build it results in a real estate bonanza–jobs, profits, new businesses. Buses do not do that. And has anyone really taken a look at the Health Line in Cleveland? What a waste of money. The city should have build a light rail line. I was there a week ago and was not impressed. Again, buses just don’t cut it when it comes to attracting riders and stimulating growth.
Having lived in DC I completely agree. From a real estate development prospective to fixed nature of light rail it what you need when you are looking to build/own transit oriented developments. Once the investment is spent to put light rail at a certain location you can be assured that location will not only have access to the network well into the future, but you have a higher probability that new developments are going to happen along that line.
Light rail also helps expand the value of locations to other locations. So for example right now High st is essentially the hear of Columbus. But the value of High st can only extend so far as people are only willing to walk so far. So if Columbus really wants development and growth to spread out more then they should be looking to run light rail not on High st but from/to High st. So if I had to choose just one line to build I would choose something like Broad st. since it goes straight through downtown west to east and intersects High st. I’d start from say maybe 70 to the west and go all the way to Franklin Park to the east. It could then easily be extended to run from 270 to 270 and an extension from Broad to the airport along Stezler.
That would essentially extend the value of downtown/SN out to the the first inner ring suburbs. Broad st. is already a thoroughfare. Developers could build higher density projects with retail along the ground floor and which decreases in density as you flow into the neighborhoods. KLD, OTE, Franklinton, etc. would become much more walkable and connected overnight.
I think its the difference between city planning an looking to the future and simply managing day to day. High st. future is determined and set. It has enough traffic that people are going to feel comfortable hoping on the circulator and business/developers feel confident that its going to be a destination into the future. If you’re going to spend x amount of dollars you might as well do it in a way that revitalizes well suited locations on the margin where you’re going to get more back.
Put it this way given the current zoning the SN corridor is pretty much close to capacity. Most people already don’t want more dense buildings/traffic etc. And the more density that is coming is coming regardless of transit as this is essentially the primary location. However increasing the density along Broad st. in a way that allows the residents to get to/from high st without a car only adds to the synergy of both locations.October 3, 2015 2:27 pm at 2:27 pm in reply to: Columbus Apartment Rental Market Getting More Expensive #1095836
Class A, B, & C categories are absolutely used for multifamily. Working in multifamily developer I’m looking at it all the time. Go to Reis, Axiometrics or any of the other large apartment data sites and if you sign up for their data you can sort by these classes. And building brand new Class B would be pretty hard. I guess if you went into a horrible area and built the cheapest product you could it could be Class B but that simply isn’t going to happen much because no bank is going to finance it. Unless your talking about Affordable housing which is a whole other ball game.
I agree developers look for opportunity where they can find it. But the issue is that you can’t build a brand new 105 year old building. For that reason developers can only build to the top of the market or build affordable housing which is subsidized. There isn’t much middle ground. The middle ground comes in the form of location. They can purchase more expensive land in the urban areas or less expensive land in the suburban areas. But in both cases they are building to the top of those locations.
As far as the building smaller units I only slightly agree. In places where land and space in the urban areas is limited building smaller can get you cheaper pricing. But in general just building smaller units is more of marketing trick in locations that aren’t as constrained. The biggest cost to building are going to be the land and construction costs. So unless you are squeezing a lot more units on the same amount of land then it’s not that big of a savings. On the construction side the biggest costs are in the kitchens and bathrooms. Reducing the empty space of a unit is not going to save much.
So for example lets say you have a piece of land that you bought for $5M and you are going to do 100 units. Thats $50k a unit in land cost. Now lets say it cost you $250/SF all in to build the units. So if you have on average 1,000 SF unit (blended of studios, 1 and 2 bedrooms) then its going to cost the developer $250k in construction cost and $50k a unit in land for a total of $300k per unit. At a 6% cap you would need to rent the units at $1,500.
Now by making the units smaller the cost per square foot is going to go us slightly. You still have to pay for the same appliances, fixtures, same parking, same pools, workout equipment, etc but now for a smaller space. So let’s say you get the average unit size down to 800 SF and the cost per square foot is $300. That means that now you can build the units for $240k instead of $250k. And you still have the same $50k per unit is land cost so the total unit cost is $290k instead of $300k. So now at a 6% cap you would need to rent the $290k units for $1,450.
As you can see not much movement. However if you were doing smaller units and therefore were going to the city and getting the right to build more units to where now you’re building 200 units on the same $5M piece of land that would cut the land cost per unit from $50k to $25k. So now you’re building units for $265k can and at the same 6% cap you could rent at $1,325.October 2, 2015 5:07 pm at 5:07 pm in reply to: Columbus Apartment Rental Market Getting More Expensive #1095777
The “problem” is the current level of demand. If there’s a line of people willing to pay $1500 a month because I tossed in granite countertops and “stainless steel” appliances than I’m going to choose that option and the bank is going to want to me to choose that option. The demand is so high that you don’t even have to actually build a luxury property to command high end prices. Look at the Atlas building (existing building, historical tax credits, cheap renovation), but they don’t even have to charge lower rents because there are people who will pay whatever it takes to live there.
I think at some point that high end demand has to run out. The newly built stuff will always tend to be higher end, have the latest features, demand the highest rent and offer the highest return to the developer. But the other older properties are actually going to have to compete with one another and some will have to drop their rent to stay full. Downtown housing practically didn’t exist 10 years ago, so everything is new enough to command high rents, especially with the demand the way it is.
I think the only way you get newly built “affordable” housing is with subsidies and if you’ve got developers willing to build without them why spend money you don’t have to. At some point the market will figure it out.
I think this is starting to touch on the issue. From a developers point of view you aren’t going to ever build something aimed at the middle of the market. That just doesn’t make economic sense. The finishes, amenities, etc. aren’t really going to make that much difference to the cost. That’s more about making extra money on the margins and in the current case doing it because it has now become the standard. Look at it this way, in todays world would a car manufacture really make a car without power windows or a radio just so the price could be $500 cheaper? No it’s just included in the base price and if someone can’t afford a new car then they buy a used one.
So all new development is built toward the top of the market. The only differentiating factor is location. You could build to the top of the market in a urban location where rents are $2,000 a month or build to the top of the market in a suburban location where the rents are $1,300 a month. And the biggest issue there is price of land.
If you want middle of the road rents then you need to go to Class B buildings which by definition can’t be a brand new buildings. So in most cases these Class B buildings are simply buildings that were Class A years ago and are starting to show their age and therefore slipping to Class B. Again the used car. The other way to get Class B are really old buildings that are Class C that get a light renovation to spruce them up. Think taking an really old building and throwing in new appliances and flooring.
The reason you’re not seeing a lot of the middle of the road Class B pricing is that in most of the desirable urban locations there isn’t a current stock older buildings that can be converted to Class B. It’s just all brand development. Traditionally in Columbus all the apartment housing was built in the suburbs and if you look around those areas you will find plenty of Class B middle of the road buildings. The problem is that people don’t want to live in those locations as much anymore.
So in the short term people are going to have to choose. The people who can afford it will move into the urban areas and the people who can’t will have to move into the older suburban areas and wait for the stuff that is new now to start getting old. When they’re building new apartments 10 years from now by then Arena Crossings for example will be showing its age. You can already start to see it now where it has formica countertops, the sinks aren’t undermounted, plastic tub surrounds, etc. etc.October 3, 2014 12:29 pm at 12:29 pm in reply to: Columbus Apartment Rental Market Getting More Expensive #1044545
I’m not really all that interested in debating how national investors see Columbus because, honestly, the city has done just fine without them if they’re actually absent in the way you’re saying. National investors could potentially bring in larger-scale projects, but they’re clearly not that important to overall ground conditions.
Where did I say the city wasn’t doing fine. Last time I check pretty much most cities are doing fine. You compile a lot of information that shows where Columbus is out performing other cities. If the metrics are higher than other cities you highlight it, if they are lower than you say who cares Columbus is doing fine. Also just because something is fine today doesn’t mean it will be fine years from now. 20 years ago a lot of rust belt cities could have made decisions when they were doing fine that would have greatly impacted them years later.
As a side not one of the primary reasons national investors/developers aren’t here is our lack of rail. I would say the primary factors are 1. coastal cities 2. Texas because of insane job growth and 3. TOD. Build rail and it would change Columbus from a tertiary market to being on par with Denver, Charlotte, etc. from an investment/development perspective.
I’m just provide the background information on why things are the way they are. The title of this thread is “Columbus Apartment Rental Market Getting More Expensive”. I’m not the “Debbie Downer that pointed this out or created the thread. I think everyone can understand the concept of supply and demand. I’m simply pointing out that for the people who think we are building more supply than demand and therefore prices are going down that ISN’T the case and the background information as to why. As pointed out before this can be a good thing as it will drive up the prices/value of many other areas like OTE that were neglected because of cheap (subsidized) suburban supply.
Second, what is the difference between the research companies you’re quoting and the census construction permit counts?
Apply for a permit is sort of like putting a deposit on a product in the future. It helps to gauge future demand but isn’t exact because that order may or may not be fulfilled. So like I’ve been pointing out with few developers with smaller resources they tend to pull back faster and adjust to the market quicker. If you have 3 developers with 4 projects each in the pipeline and some in similar areas and you start to reach equilibrium then they tend to pull back or push the completion dates out further as the oversupply will likely directly impact their other projects. However if you have 20 developers some with 2 or 3 projects spread out and a lot with just one project they tend to all move forward because getting lower rents on one project is better than no rents on no project.October 3, 2014 11:16 am at 11:16 am in reply to: Columbus Apartment Rental Market Getting More Expensive #1044527
Based on past interactions, I think it’s more about unreasonable expectations and comparisons. IC treats Columbus like it should be a Sun Belt boomtown, but it’s not… at least it doesn’t yet have those full characteristics. Even so, the claim about it being significantly behind in housing construction is just not true. I still have no idea where his numbers came from. My numbers above were not just for total permits, but for total number of individual units. Austin, for example, is nowhere near the 11,000+ units this year that he claimed, even at the metro level. Austin is higher than Columbus, of course, but that’s probably due to the fact that Austin is growing significantly faster.
I can’t post actual reports being that you have to pay for them but here is a screen shot:
Units by UMdev[/url], on Flickr
Permits don’t easily translate into the number of actual units delivered. You could get a permit and never build or build years later. Again Columbus is a market where there are few local developers building and are more sensitive to new supply. Pick most developers and they probably have multiple projects. They can’t afford to build at the expense of the other guy when they are the other guy.
I get it that you want to cherry pick all the information that you think is positive. Again this isn’t saying something is “bad” about Columbus. I’m just point out that for the people who think we’re building a lot and that is going to lead to rent decreasing that isn’t the case.October 3, 2014 10:57 am at 10:57 am in reply to: Columbus Apartment Rental Market Getting More Expensive #1044512
Just curious, IC, where are you getting the total unit numbers for these cities? Also, are these all urban units, for the whole city, county, metro, what? I know you have mentioned this discrepancy before, but from what I can tell, units under construction in Columbus have ramped up rapidly in recent years from less than 400 in 2011 to more than 5x that this year. Come 2015, that number will rise to around 4,000, or 10x what it was 4 year prior. This only counts units being constructed within I-270, with probably 80% of them within or just adjacent to the 1950 urban core. While Columbus may or may not be having the same total units as other cities (some of which are growing much faster and are not a direct comparison anyway), the very fast rise in construction at least points to an effort to more keep pace with demand.
The numbers are for the MSA. Columbus delivered 1,400 units in 2011, 1,200 units 2012, 4,200 in 2013 and then deliveries dropped to an estimated level of 2,300 in 2014. It peaked and has already leveled off.
I want to make this point clear as people seem to take everything in a negative manner. Columbus is a very STEADY market. Because most national developers/investors consider it a tertiary market they don’t rush in to capitalize on the next trend. As a result, as Columbus grows it builds just enough for that growth as you have primarily local guys who know the market well making those decisions.
Contrast that with a market like Austin where they have more growth. Instead of building proportionally more just to satisfy that growth all the national guys are going to rush in to get piece of the action. So for exmaple Columbus grew by about 20,000 people a year over the last 3 years. Austin grew by 50,000 people a year over the last three years. So Austin’s growth is a little more than double. But you can see the difference in deliveries swung a lot more than double for Austin. While they delivered 6,200 last year compared to Columbus 4,200 instead of cooling off like Columbus and decreasing they shot up to 11,500.
Thats because 1 – 2 years ago not only were local guys developing but all the hype nationally is about millenials moving to place like Austin. So they were looking at only 6,200 deliveries last year and everyone rushed in. Meanwhile the local guys in Columbus saw the 4,200 units last year and pulled back.October 3, 2014 10:11 am at 10:11 am in reply to: Columbus Apartment Rental Market Getting More Expensive #1044498
Before I start my response I want to just state by saying this isn’t a city A better than city B issue. “Problems” are not merely negative. Your business could have the “problem” that it has a lot of demand and current can’t produce enough to meet that demand. That is a problem many business would like to have. Understanding the issue helps to identify the solution so said problem. I get it that all Walker wants to hear is cheerleading and sees pointing out problems that can be addressed as hatred for Columbus. In my post I cited actual data to show that Columbus is affordable, just didn’t cheerlead and say it was more affordable than cities it’s not.
With that said, I work for national developer/owner of multifamily property. As a result, I constantly look at the metrics of pretty much all the cities to decide where others are investing/developing to make a better more informed decision on where we should be investing/developing. If I hate Columbus then so do pretty much all the national investor/developers. Although I think the issue is simply a matter of economics as are most.
A lot of my information comes from either CoStar, Axiometrics and Reis. These are all reserach companies that cater to the multifamily industry. The have researchers that look into every market, compile that data and then sell it to companies like ours. For all of the markets that we are in we pay about $15k a month to access this information.October 2, 2014 5:19 pm at 5:19 pm in reply to: Columbus Apartment Rental Market Getting More Expensive #1044458
The article above doesn’t make much sense or at least draws a conclusion without the needed information. Affordability is a measure of what one can obtain within their financial means. The article talks about how expensive rents are but doesn’t actually provide any info about affordability like the headline suggest because it doesn’t discuss income.
Here is a website that looks at among other things housing affordability.
They look at median rent and housing prices as compared to median household income. Using those metric do actually show that Columbus is affordable, ranking 22nd. However there isn’t much difference from some of the places you highlighted for example rent in Denver was .2% more of median income than Columbus and Minneapolis was actually more affordable.
The problem in Columbus is they simply aren’t building enough. I know local folks see the construction and think things are booming but from a macro perspective Columbus is well behind the curve. Looking at the top 50 markets the average number of apartment units set to be delivered this year is about 5,000. Columbus is less than half of that with about 2,300.
If you look at MSA similar in size, say about 1.5M to 2.5M that have decent growth you get Columbus (2,300), Austin (11,500), Denver (9,600), Charlotte (5,500), and even Indianapolis (3,900).
Columbus doesn’t attract larger national developers who can develop larger amounts of units and is confined to local guys who know the market well. We had a spike in 2013 where Columbus delivered over 4,000 units and is now regressing back to the historical average. Keep in mind were in a national trend where people are renting more and living in more urban locations. So were not building large amounts of cheaper homes out in the suburbs. Without that supply affordability is going to decrease.
So as we only build a decent amount of luxury units at some point those prices might soften but the vast majority of rents are going to continue to increase. So for example say you have class A rents at $1600 and class B rents at $1200. As you get more class A product and vacancy increases they might drop prices to $1500 but since you can’t build class B and we don’t have a lot of Class A converting to class B they’ll continue to raise rents from $1200 to say $1400.
So while it gets less affordable this will translate into urban areas going up value which overall I think is a good thing.August 13, 2014 3:57 pm at 3:57 pm in reply to: A good way to wreck a local economy: build casinos #1034495
<div class=”d4p-bbt-quote-title”>Alex Silbajoris wrote:</div>
cited a few posts above, there’s a spinoff effect for establishments near the casino. With only the Blue Jackets to provide the draw to the AD, that’s a “single point of failure” leaving the AD vulnerable to anything going wrong with the hockey team.
I don’t see that at all. There’s the ball park, the LC music venue, and a wide variety of corporate offices and headquarters in the Arena District, not to mention the Park St. strip and other restaurants, bars, and the like. Hell, the North Market would be considered a part of the AD, wouldn’t it? Plenty of high-density residential buildings, too. Questions about the viability/financing of the hockey arena are beyond my pay grade, but it isn’t anything close to a single point of failure for the district.
A separate thought – I have always been astounded by the idea that a casino would be any sort of significant financial boon to whatever neighborhood it landed in. I have no objections to gambling, morally or otherwise, but I could never wrap my head around the idea that a casino had more to give than it takes. That’s just not the casino business model. Hollywood Casino is making a profit – not a big one, but one nonetheless – and I drive by it frequently enough to see that the parking lots are mostly full. It pulls plenty of people, but hasn’t done a damned thing to spur on development outside of its property lines. It won’t – it exists to drain its customers of the money they’d otherwise use elsewhere, and is designed to give its customers no reason to leave its premises. On balance its customers leave with less money than they went in with – this is not in dispute, is it? – and on balance they don’t have that much to start with, demographically speaking.
That could be said for any business. When I go to the movies I leave with less money than I went in with. My whole gripe is that if you stick it in a neighborhood where people don’t really want to go to anyway then you are going to only attract people whose primary concern is gambling and therefore won’t be inclined to spend money on other things. I’ve gone to Hollywood casino, why would I leave the casino and spend money in the surrounding area when there is nothing I want to spend money on. Contrast that to AD, where for me at least, I’m 100% guaranteed to spend money somewhere else.
I don’t gamble a lot but when I do I’m usually playing something like craps where I have slightly less than a 50/50 chance at winning. So basically I know on average I’m going to lose money over the long haul which to me is the cost of entertainment. However when I’m up since I feel I got the money for free I usually spend it much more recklessly. So it usually works out like this, I go and play one day and win $500. Afterwards we go somewhere else and blow $300 of that money on nonsense, a more expensive meal, more drinks than usual or a splurge gift. But for every time I win $500 there are 3 times that I will lose $200. Then I still go out spend money on drinks to forget about the money I lost. So all in all after going 4 times I’ve lost $100 on gambling. Considering I’m there for a few hours each time that comes out to about $10/hr for entertainment, which isn’t much different than going to the movies. However in the process I’ve spent a lot of money on drinks, food, shopping and strippers (don’t judge) that I wouldn’t have otherwise.
So in the process of losing that $100 I spent $300 of my perceived winnings on other stuff which isn’t casino related. But there has to be something nearby because it’s obviously an impulse buy that will die down once I’ve gone home and slept on it. At Hollywood Casino there simply isn’t a place for me to spend that money. However in Vegas or the local casino here in Miami, I simply walk out the casino still full of energy with many non casino options to spend it.
Then on top of that I have my friends with me who don’t gamble at all and are just along for the ride/drinks. So at Hollywood, a few of us gamble, while others drink and watch and enjoy in the excitement. When were done we load up and go home. So basically because a couple people wanted to gamble, you now have less people going out where we would otherwise go. Which would be fine if that money was going to another neighborhood, but it’s not. It’s just going to the casino.
So for me at least, you’ve gone from a situation where a casino downtown would have led to me spending more money in local business to a casino in the suburbs that if I go is taking away money from local business.August 13, 2014 1:03 pm at 1:03 pm in reply to: A good way to wreck a local economy: build casinos #1034429
<div class=”d4p-bbt-quote-title”>InnerCore wrote:</div>
Having it downtown would have allowed it to act as more of an entertainment center than just a casino. Which is what I think the article misses.
False. In October 2009, it was reported that the Arena District Casino would be branded as a Hollywood Casino and would be a single-story building with attached garage, which is the exact same suburban-style format that was constructed on the West Side:
There were never any plans to build an urban casino in Columbus with larger entertainment venue options. Cleveland and Cincinnati were getting those types of casinos while Columbus and Toledo were getting the suburban-style format:
That was one of the reasons that supporters of the relocation did not want it taking up Downtown real estate.
I’m not really arguing that Walker. You seem to think that Urban means multiple stories but Urban just means location. The Cincinnati Horseshoe is primarily a single story with a garage. The main issues is that Columbus Hollywood 1) it’s set back behind a sea of parking making it less walkable and 2) it’s in a suburban location. If you moved the Cincinnati Horseshoe to the Columbus Hollywood location I’d have the same complaints. The outward facing restaurants at the Horseshoe are a derivative from there being something to open up outward too. Why would Columbus Hollywood put outward facing restaurants only to look at parking???
You could take the exact same building and put it in the AD and it would be an urban casino by definition. And most of my complaints would be erased. The smaller location would have forced it to have more structured parking and couldn’t have been placed far back from the street. And you could have easily moved between the casino and the many amenities of the AD SN and downtown in general.