Unique and beautiful material like Porphyry paving can have a major benefit to a project. Remarkable materials and incredible designs create a high economic value and return on investment and return on perception. A recent report clarifies the extent that this has happened for Chicago’s Millennium Park.
This report is based on the book Urban Design and the Bottom Line: Optimizing the Return on Perception, published by ULI and authored by Dennis Jerke, and on the methodology applied in the Master of Science in Land Development program at Texas A&M University. The results are based on thorough research, credible sources, data analysis and conclusions for the four categories of quadruple net value (social/cultural, economic, environmental and sensory). The two Texas A&M University graduate students in the Land Development Program and the two students from the Department of Real Estate at DePaul University have examined the quadruple net value of Millennium Park within a short eight-week time frame.
Millennium Park is an example of real estate value creation through proper conceptualization, design, delivery and management. Mayor Daley, Ed Uhlir, John Bryan and the rest of the Millennium Park team spent countless hours recruiting artists and designers, raising interest and soliciting donations to create an inviting public space that serves as the cultural center of Chicago. Millennium Park is now an internationally recognized symbol of the city on a site that could have easily become a parking garage. The research demonstrates that the return on investment and “return on perception” of Millennium Park have impacted the City of Chicago with significant quadruple net returns. These returns are summarized as follows:
Economic Value and Return
The economic downturn in 2008, along with the historic landmark designation of Michigan Avenue buildings adjacent to the park, has created recent property tax assessment challenges for the park and its nearby properties. Despite these circumstances, it is clear that Millennium Park has generated the following economic impact on the City of Chicago: $490M in total park construction; $ 2.45 Billion in new construction near the park; 70,070 direct, indirect and induced jobs created by new construction in the area; a 57% increase in new residential units near the park (3,587 units since 2005); 29% premium on park units sold with views of the park; five million annual visitors which generate $1.29B in tourism dollars; $5.9M in annual operations costs that feed the local economy; 2,126 new underground parking spaces at Millennium Park; an 11% increase in hotel rooms (751 rooms) near the park; $173.5M donated by 115 founders to specific projects within the park; and 11 fortune 500 companies that donated to the park.
Return on Perception
The subjective value of the park can’t be calculated, but the added value from the following items illustrate a greater return on perception: world class design has added value to the brand and image of Chicago; international visitation is an indicator of the park’s international reputation; building frontage on the park is more valuable but not calculated because typical office space covers the entire floor plate of the buildings; there is generally over $100 per square foot increase in value for residential units that have views of the park; the Millennium Park brand provides additional value to over 19 businesses; the park view from Michigan Avenue restaurants has stimulated the development of outdoor patios; generally, rental rates for retail space near the park has gone up; the brand value of Millennium Park has strengthened Chicago’s reputation as a tourist destination; an increasing number of suburban residents visit downtown Chicago to enjoy Millennium Park activities; and Chicago’s reputation as a world-class art destination has been enhanced by the permanent and rotating art and architecture at the park.
Frank Gehry’s design of the pavilion and the bridge to Grant Park was a major factor in elevating the park to its current international status. World-class designers were interested in being a part of a project that Gehry was involved in. The world-class art and architecture stimulate the senses to levels not experienced in most other parks, and this has helped lead to high real estate value creation. Though difficult to measure, the impact of the park design on the sight, sound, smell, feel and taste of the park experience are reflected in the extensive visitation, worldwide recognition as a destination, economic stimulus and overall positive influence on the citizens of Chicago.
Porphyry’s composition determines its high compression strength, resistance to stains, slip resistance, and high freeze/thaw ratings. The stone is the most popular paver in Europe, and is favored for its flexibility in design, beauty, durability and low maintenance requirements. ADA Compliant Porphyry pavers are also adaptable to a permeable paving set. The stone is by far one of the most durable pavers in the world. These beautiful materials are available from Milestone Imports. Milestone supports the creativity of architects, planners and designers. Porphyry offers surfaces of various finishes and mixed colorings, tending towards tones of grey, gold, violet and red, depending on where it is extracted. The products are available in North America from Milestone Imports. – www.milestoneimports.com