WITH New Kingston, the king of business districts reaching its maturity, and Downtown, the touted heir apparent in a state of dereliction, a new contender has emerged in the race to become the new business district of Kingston — Midtown.

The emerging business district was so dubbed, by a number of developers with the support of town planners due to its strategic location between New Kingston and Downtown.

It is a business district brimming with potential and featuring a cluster of businesses that makes it the logical next step for businesses that want to start-up, relocate or expand.

Valerie Levy and Associates (VLA) executive director, and the mastermind behind the apparent solution to the scarcity of affordable Kingston commercial real estate, Anya Levy told the Business Observer that there are already 10 new business developments planned for Midtown within the next two years.

Levy, along with retired senior deputy town planner, Colin Powell have defined Midtown along the boundaries of Oxford Road, along Old Hope Road, Retirement Road, Lyndhurst Road, up to Maxfield Avenue and back around to Half-Way-Tree Road.

Within Midtown are areas, such as Norwood, Lismore and Melmac Avenues, Warrenton Road, Beechwood Avenue, Grove Road, Kencott Cresent, Ballater and Balmoral Avenues. The area, which Levy said is far more affordable than New Kingston, and ‘newer’ and safer than Downtown is the newest business district precisely because of these and other important distinctions including its impressive cluster of businesses that range from retail, financial to manufacturing and educational.

There are media companies the Jamaica Observer and Radio Jamaica on Beechwood and Lyndhurst Roads, respectively. There is the telecommunications company LIME and financial firm Access Financial Services on Half Way Tree Road. There are manufacturers, such as Continental Bakery and Jamaica Producers. ATL has both its upmarket auto facility ATL Auto Haus and Appliance Traders Limited in Midtown. There are pharmaceutical companies, such as the multinational GlaxoSmithKline and Carimed; educational institutions, such as B&B University College and the Kingston School of Nursing; fast-food restaurants KFC, Burger King, Tastee, Island Grill, and government agencies National Environment and Planning Authority, and National Insurance Scheme.

“I feel it is the last piece of affordable commercial real estate in Kingston. And the thing is, Midtown is more established, it’s a newer district than say Downtown,” said Levy. According to Levy, while the thrust to develop Downtown as a commercial district is gaining momentum, the area has obvious limitations because it can only accommodate certain large players such as telecoms giant Digicel, which is moving its headquarters there.

“Buying real estate Downtown is not for everybody. It is only for certain players,” she said. “The incentives that they are trying to put forward to companies and to purchasers to try to come Downtown, what the public fails to realise is that these incentives have been in place for many, many, many years. It is just that because of the whole hype about Downtown they are coming out and saying hey, you get incentives.

“But these tax incentives only suit the big corporate players because you have to open up your books and not everybody is willing to do that unless you are a public company or you have shareholders,” she said. In addition, she said businesses will have to make allowances for high-cost security and for parking facilities, which are scarce Downtown.

Levy noted that in addition to the issues with crime, parking and the state of the infrastructure, investors Downtown will have to prepare for a long payback period.

“Downtown is so old that if you want to invest in Downtown you have to have what I call ‘speculative money’,” Levy said. “It has to be money that you can put down and say ‘hey, they say Downtown is coming back in five years, let me hold on’. So you have to be a big player. You have to be somebody who can buy it and sit on it,” she said of properties in the old commercial district.

Powell, who has been a town planner for over 30 years, said New Kingston was developed as a commercial district to absorb the spillover from Downtown in its heyday, but that area has now matured. He said now that Downtown is beginning a new lifecycle, developers should be looking at Midtown.

“Town planning is not a static thing, it is dynamic. A new name is a rejuvenation of the area,” he said of Midtown, an area that was once classified as Cross Roads.

Levy added that there is little or no more growth left for the New Kingston area, property rarely changes hands and the cost to purchase or rent, where available, are extremely prohibitive. She said that while a property in Midtown which features adequate space to expand, parking and a relatively secure business community can be bought for $15 million to $30 million, in new Kingston purchasers would be contemplating prices in the ‘millions of US dollars’.

“I predict that even when Digicel leaves and if you even have three or four major people who leave New Kingston to go Downtown, the prices cannot soften to where they can for the average player to enter the market,” Levy explained. “The reason is because of the type of construction. You have mid-rise to high-rise in New Kingston. And those types of real estate come with heavy maintenance because you have elevators and all the support services of a high rise to carry. So you cannot see give-away prices in New Kingston for rental or sale,” she said.

However, in Midtown, with development, the return on the purchase of property can be significant.

“Say you have $20 million, you can’t go Downtown with the $20 million and start up a business right away. You are going to have to wait for the crime element to subside, you’re going to have to wait and do some renovation and then you are going to have to look for parking. But if you come to Midtown, you are going to get a building for $20 million and I’m talking a sizeable building, up to say 9,000 square feet and you can move in right away,” Levy said. And as for New Kingston, Levy said: “You can’t afford New Kingston, don’t even wait, don’t even save up your money, because it won’t come.”

Both Powell and Levy agree that with the focus on Downtown, there is an obvious fallacy regarding how commercial districts have been known to develop. Levy said in practical terms, these areas develop more organically, which is what has happened with Midtown.

“When you talk to the planning authorities town planning is all about being orderly and being progressive. So you will never find in any major financial district anywhere in the world where people move from one financial district, jump a section and move to another section,” Levy said. “So what will happen in other countries of a similar area you would see New Kingston radiating. So you would see, we burst New Kingston and go on the periphery. You would never see people move from New Kingston, skip Midtown and go to Downtown.”

Powell said in his experience town developments happen in a ‘orderly fashion’. He said what makes Midtown particularly special is not just the strategic location between the two major areas, but also the support services that are available to the business districts on either side and the “good transportation links”. You can get to Midtown from a number of roads all of which are linked by a good transportation system. “People in the service business would find that attractive,” Powell said.

Levy said in addition to all the practicality and cost effectiveness, Midtown offers zoning options that neither New Kingston, nor Downtown can.

“You have many, many well-established places. The great thing about Midtown, unlike New Kingston, unlike Downtown, Midtown offers you a variety of zoning options. So unlike New Kingston where you can only get office and commercial use, in Midtown you can get mixed use, which we would love to see more of,” she said.

Mixed usage, which refers to combining residential and commercial areas provides opportunities for more economic activity to take place, even into the night. Additionally, workers can seek living accommodations in the area instead of further out of town.

“I would welcome mixed use because the land is affordable and instead of going out to Spanish Town or Old Harbour look at these areas. It would help the commute,” Levy added.

So Midtown offers office use and commercial use, but the real clincher is that, according to Levy, it is the only section in Kingston where you can get light industrial use.

She said light industrial, which is what is done by players such as National Bakery, The Observer and Jamaica Producers, is what is needed to drive economic growth.

“Light industrial is what you need, you can’t get that Downtown,” she said.

And more production will hopefully translate to more jobs, more corporate profits and more taxes to collect. “This is going to enhance the government’s coffers because the more players come it’s the government that benefits,” Levy said.