30 October 2009

Additional Columbia Development Details

For those that have not seen it yet, Wordbones put up a very interesting post regarding James Rouse (Jim Rouse was not an Oracle) and how Columbia was developed. In my research I have uncovered some information that supports his post.

With respect to General Electric, Wordbones provides us with these details:

When GE decided to abandon Columbia and consolidate manufacturing operations in Louisville, Kentucky, Rouse adjusted his plans. Realizing that Columbia’s labor force was changing from what he originally expected, the company exercised its option to buy back the industrial park from GE and created Columbia Gateway Corporate Park.

I would like to add the financial details of how General Electric first came to Columbia. The following is from pages 304-305 of the book Columbia and the New Cities.

Financing on a Giant Scale

In order to snare the GE facility, Rouse not only paid for a four-mile railroad spur, but expanded Columbia beyond its original borders. He bought 2139 acres of farms and gravel pits adjacent to the new town for a staggering $19 million, more than six times the price per acre that he had paid for the new city’s original land only five years earlier. Since its original acquisition of land for $23 million, Rouse had filled several of the “holes” in his “Swiss cheese” land-holding for $2 million. With addition of the acreage for G.E. and an adjacent rail-served industrial area, Rouse has bought 17,868 acres for his new city at a total cost of $44 million, an average of $2485 per acre. General Electric got a bargain. The company announced that it paid only $3.8 million for its 1100-acre factory and warehouse site. Columbia’s expansion will add to the city’s ultimate profit despite its high cost, Rouse told his stockholders at their 1969 meeting. But the G.E. deal forced Rouse to reshape the entire financial structure of his new town.

So with respect to General Electric, Rouse bought the land for $19M, sold half the land to GE for $3.8M, and then years later bought the land back from GE. Each time the Rouse Company had to alter the financial structure of the entire city.

Moreover, Wordbones uses the General Electric transaction as an example of Rouse adapting to change. A few pages later in Columbia and the New Cities (p. 309) provides an equally compelling example:

As development progresses the differences between estimated costs and actual costs or between estimated and actual revenues force a constant rejuggling of decisions about when to invest, how much, and in which facilities. For example, when final cost estimates showed that Rouse would have to spend three million dollars more than was originally planned for one year in Columbia’s water system (even though the total cost of the system remained about where it had been figured), the increased interest cost on the extra three million dollars forced Rouse to defer several roads and put off other items of community facilities until later in Columbia’s life. Otherwise, he explained to me, in order to sustain his profit he would have been forced to crowd another six thousand dwelling units onto the land (which he could scarcely do under the zoning he had arranged.)

In a community that has been struggling with WWJRD, a partial answer is provided above. When confronted with unexpected, Jim Rouse considered increasing density and ultimately deferred road and public amenity construction. What is particularly interesting is those that oppose GGP plan before the county are loudly saying that regardless of what the future holds, the roads must be built and the amenities must be erected before any particular development phase is initiated. And to an extent, they have a point. Developing acres of farmland into a wondrous community allows a bit more latitude with respect to infrastructure and amenity phasing than a large infill development project. However, when confronted with WWJRD, they are clearly saying don’t do what Jim Rouse did.

Columbia and the New Cities. Breckenfeld, Gurney. Van Rees Press, New York. 1971


wordbones said...


It's good to see you posting again. Thanks for the shout out.


Anonymous said...

Will you be bringing this rich nugget to the HCC hearings anytime soon and enlighten the masses?