kevin caravati-georgia tech research institute · as a result of the global financial crisis,...
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Red Fields to Green FieldsNational Research Program
Innovations in Economic Development ForumSeptember 7, 2011
Kevin Caravati-Georgia Tech Research Institute
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As a result of the global financial crisis, millions of families lost their homes, millions of Americans lost their jobs, and over $10 trillion in real estate value was lost.
During our toughest times, we have taken on the biggest projects (Eisenhower Interstate System, $425 billion).
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In response to this global economic crisis, the US established an $11.4 trillion
rescue program.
We’ve rescued Wall Street and the paper assets.
What should we do about Main Street andthe abandoned physical assets?
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AIG ($182 Billion)
TARP Stimulus
ARRA Stimulus
Source: Strategas, Bloomberg, 2009.
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Current Economic Conditions in the Atlanta Region
In metro Atlanta, (and throughout most of the US) we have far too much housing, office, retail and industrial real estate
GA leads the nation in bank failures at 67
Real estate transaction volumes down 95%
Start of the economic recovery by 2015-2016??
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The Drinking Will Continue…
Until The Economy Improves
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A “red field” property is both overleveraged and mis‐developed.
Red field properties have negative value civically, environmentally, and economically.
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Problem Statement
• Given $3B, how much excess, for-sale commercial real estate could be purchased and converted to green space, trails, and parks?
• How could Atlanta be transformed?
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Sounds crazy.
What could be possible?
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Source: Trust for Public Land
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• Historical 5-yr price per acre average, improved lot: $1.76 million
• Price per acre, average:$371,000 per acre—a 79% discount
Inside the Perimeter Market
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Nearly 22,000 acres of vacant land listed at an average price of $154,000 per acre
Outside the Perimeter Market
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The Impacts
• 2,850 acres of park space inside the Perimeter (equivalent of over 15 Piedmont Parks)
• 13,000 acres OTP for infrastructure improvements
• Land values stabilized• Liquidity returns to banks
AND • Over 70,000 jobs created
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Construction is Down to Lowest Level in 30 Years
Red fields to green fields can enable Houston to make necessary changes now . . . when the economy and our citizens need jobs, and our infrastructure needs refurbishing.
HOUSTON
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Local Projects
1,000 acre Ft. McPherson/Lakewood/Honor Farm Corridor
Peachtree Creek Greenbelt-36 mile connected trail system
Purchase over 400 properties in Atlanta’s distressed historical neighborhoods (i.e., Pittsburgh, Mechanicsville)
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Establishes an American Infrastructure Financing Authority, supported by the US Chamber of Commerce
Proposed initial funding of $10 billion for transportation, energy, water infrastructure
Provides low cost loans to attract private capital
The BUILD ActBuilding and Upgrading Infrastructure for Long Term Development
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Atlanta Cleveland Denver Detroit Hilton Head Island
Los Angeles Miami Philadelphia Phoenix Wilmington
Thank you!
www.redfieldstogreenfields.org