The Borough Office Building, formerly occupied by a title company, and now owned by Greater Jamaica Development Corporation.

An important, but underutilized, tool in the economic development kit is being the buyer of last resort for distressed property. This strategy isn’t frequently used because it requires equity capital (which many/most NGO’s don’t have) and carries the risks inherent in carrying debt and managing property. But it can be incredibly powerful. By purchasing (or long-term leasing), improving and repositioning an abandoned or derelict real asset, not only are the negative externalities associated with that parcel removed from the neighborhood and the market, but the purchaser now has an ownership stake in the community it is working to improve and will have the potential to reap some economic benefit from the success of its efforts. In addition, ownership of key sites gives the local development entity the power to influence what gets developed on the site. In my experience, this is one of the more potent forms of “nudge” to the local market that a not-for-profit can exercise in advocating for neighborhood improvement.

Community development organizations tend to shy away from the risks associated with property ownership. I’m not aware of any business improvement districts, for example, that actually own any property. But I would argue that this is a form of downtown revitalization that ought to be seriously be considered by more of the professionals who are working on downtown improvement. Continue reading →