Downtown Roanoke is pictured.
Downtown Roanoke, Virginia. Mason Adams

Roanoke, Virginia, has become what many cities of its size, geography, and history want to be. It started by bringing housing to a deserted downtown.

At the end of October, a blue Amtrak train pulled into downtown Roanoke, Virginia, to the sound of applause. This was a big moment. For the first time in nearly 40 years, a passenger train was rolling into this city founded on railroads.

The last time Amtrak carried passengers here, in 1979, Roanoke was a different city. Then, the so-called Star City at the eastern gateway to central Appalachia was a blue-collar New South city built around the Norfolk & Western railroad. The city core was decaying as businesses and residents moved outward to suburbs and adjacent counties.

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But in 2017, Roanoke is transformed. Amtrak is returning to a city that’s no longer dependent on the railroad. Meanwhile, the Star City has become what so many cities of its size, geography, and history want to be. It’s burgeoning, chock full of craft beer, and eminently welcoming to outdoorsy Millennials. As small cities struggle to retain young people, Roanoke is attracting them. The city has gained 25- to 34-year-olds for some time, and now, after three decades of losing 15- to 24-year-olds, it’s gaining them, too—that cohort grew 7 percent between 2010 and 2015.

So how did this happen?

It all starts with the area those Amtrak passengers find when they step off the train—an unorthodox, rapidly growing downtown neighborhood that didn’t even exist 20 years ago.

By 2000, a small retail and restaurant district served as the downtown core, but it was surrounded by buildings that were mostly or completely vacant. Slowly at first, that space was converted into housing—and that became “rocket fuel” for the downtown transformation, said Beth Doughty, executive director of the Roanoke Regional Partnership, the metro area’s economic development agency.

When housing went up, people followed quickly. In 2012, downtown was briefly identified as the fourth most rapidly gentrifying neighborhood in the U.S. But what’s happening isn’t gentrification in the traditional sense. In 2000, fewer than 50 people lived downtown. That swelled to nearly 1,000 by 2010, and nearly 1,800 today. It’s an influx of wealthier white people, but it isn’t a matter of displacement—at least not right here.

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The new downtown, in the heart of a historic district, came about from a convergence of factors. Federal and state historic tax credits provided adventurous developers with a lifeline of capital during the Great Recession. Government investment in ventures paved the way for private investors. And a generational shift from home ownership to apartment rentals has solidified demand for the new residences in the redeveloping area.

The seeds for downtown living were planted around the turn of the millennium, when officials at Center in the Square—an anchor building that’s home to several museums, non-profits, and Mill Mountain Theatre—renovated the upper floors of an adjacent building to provide housing for out-of-town actors. Private developers built luxury flats in the spaces above first-floor businesses of other nearby buildings.

The first really affordable apartments arrived in 2002, when the city housing authority redeveloped a pair of former Norfolk-Southern office buildings just north of the tracks. One was turned into an adult education center that offered collegiate and job training programs, and the other renovated into an 87-unit apartment building called Eight Jefferson Place.

“The city was handed lemons and made lemonade,” Doughty said. “Here we had these buildings because Norfolk Southern is moving out of them. What are we going to do? In a period of identity crisis, as part of that long slow march of the railroad moving out, they took those buildings and look what happened.”

The public investment into downtown rental apartments at Eight Jefferson Place blazed a trail into an urban frontier that was home to a handful of condominiums, but otherwise few residences.

Roanoke's downtown farmers market is pictured.
Roanoke’s downtown farmers market. (Mason Adams)

Four years later, another building’s transformation marked a watershed moment. Developer Ed Walker decided to convert the Hancock Building, a former piano and furniture store, into apartments. He financed the project in part through the use of historic tax credits, which had previously been used by the city and Virginia Tech in a collaborative 1993 effort to restore the Hotel Roanoke. When Walker discovered distinctive art deco patterns between the Hancock Building’s outer layer of bricks, he asked the city for financial assistance to restore the building’s facade.

The city council gave him an $880,000 performance grant for the facade work. This drew heated criticism for its use of taxpayer money to fund a private developer’s project, but also because Walker had previously taken the mayor to Mexico on a trip to look at public art, which some considered a quid pro quo. In retrospect, the grant looks like a good investment. It enabled Walker to complete the restoration, which he followed with a series of other successful redevelopment projects. The use of syndicated historic tax credits became a model for other developers who followed with similar projects.

“It sounds like a lot of money to casual citizens, but when you realize what it’s leveraging in private investment, it’s dollars well spent,” said Alison Blanton, a historic preservation specialist on many key projects in Roanoke. “The Hancock Building made downtown living affordable to young people. The population growth came from those larger buildings with 80 or 90 smaller apartments in them, not just six or eight luxury ones.”

“One, it put all these people downtown, which creates its own economic impact,” Doughty said. “Second, it was a catalytic event that demonstrated what could be done again and again. The other thing is, it activated an underutilized project in an important place. That’s an example of the best possible way of using incentives.”

During the same period, the city invested more than $20 million into capital projects that gave new life to downtown parks, public spaces, and a parking garage that was retrofitted so a new hotel could be built on top.

The apartment boom has even bled over from rehabilitation of old buildings into construction of new ones, because rental rates are now high enough for developers to justify it. Downtown rentals typically run $800 to $1,300 a month for a studio or 1-bedroom unit, and $1,000 to $1,500 for 2-bedroom units. Downtown Roanoke Inc. lists the downtown rental average at $1.10 per square foot, which compares favorably to larger cities, especially when you factor in the city’s relatively low overall cost of living.

But still, those costs are rising, especially as the downtown boom has spilled into neighboring areas. One of the most striking things about the city’s transformation is the softening of three longstanding physical barriers—the railroad, Roanoke River, and Interstate 581—that have defined Roanoke for generations. It’s in these areas where the forces of gentrification are taking their usual form, and forcing the city to reconcile with the ripple effects of its successes downtown.

The railroad has long served as an especially hard barrier, dividing the commercial district downtown from Gainsboro, a historic black neighborhood that predates Roanoke itself. In the mid-20th century, urban renewal projects destroyed significant swaths of the neighborhood and its Henry Street business district, which participated in the Harlem Renaissance.

Today, multiple Gainsboro neighborhood groups fiercely protect the neighborhood against perceived encroachment. In 2007 they faced down an effort to build a $15 million Social Security building near Henry Street. Other projects have moved forward since then, but despite city efforts to market a parcel located at a key gateway to Gainsboro, the neighborhood has resisted government-sponsored incursions that run against its historic character.

A full moon rises behind the Mill Mountain Star in Roanoke. (Don Petersen/AP)

Even so, Brenda Allen, who leads the Historic Gainsboro Preservation District neighborhood group, said she has seen changes stemming from the new residents across the tracks, including an increased number of white homebuyers and cars parked on Gainsboro streets by people visiting the downtown business district.

The blocks west of downtown, on what used to mark the urban frontier, have changed more dramatically. In the ’70s and ’80s, west Salem Avenue, which runs parallel to the railroad tracks, was home to gay bars, rock clubs, and a street market for sex and drugs. The former Iroquois Club, which changed names but remained a home to punks and metalheads through the mid-’00s, was turned into condominiums. A gay bookstore in the stretch closed in the mid-’00s as well. One iconic gay bar was passed from its longtime owner to a non-profit LGBTQ advocacy group, and another—the site of a 2000 homophobic mass shooting—has become a sports bar while assuming the Iroquois’ old role as home to extreme music.

The biggest factor in transforming Salem Avenue was Bill Chapman, who had managed more than 15 adaptive reuse projects in Richmond before diving into Roanoke. Chapman gambled on investing in an area that local conventional wisdom deemed a no-man’s land, even though it had lost any sense of real danger by the time he arrived. He successfully reworked a former auto dealership and large warehouse into condominiums and apartments, attracting new residents who flipped the neighborhood narrative.

Today Salem Avenue is home to apartment buildings, a high-end tequila bar, an expansive local craft brewery and a handful of yoga, CrossFit and martial arts studios, along with earlier remnants such as a homeless shelter and electrical substation. The fitness studios, said Brian Townsend, assistant city manager for community development, are indicative of ongoing reinvestment that is still stretching west.

“Those kinds of things don’t have a lot of income, but there’s low overhead,” Townsend said. “That’s the first level of entry into an area that’s improving itself. The theory is, over time, those kooky, quirky uses generate people coming to an area they’ve never come to, and it puts that area on the map.”

Roanoke’s post-Millennial downtown growth has drawn attention from other cities looking to replicate its success, but the gentrification story is playing out here like elsewhere. It didn’t begin with displacement, but as the growth spreads from the downtown core into surrounding neighborhoods, that’s what it is turning into. The rapid growth may also be causing more subtle, long-term challenges for neighborhoods that have older, less desirable housing stock.

Most Roanokers see gentrification as the dark lining to a silver cloud. Community leaders in nearby neighborhoods welcome the injection of new blood and investment in old homes. Some have been wanting this for decades.

Those concerned about maintaining the current character of neighborhoods, as in historic black Gainsboro, feel the downsides more acutely. As downtown continues to grow and change the nature of housing in Roanoke, those effects will likely intensify.

Was this inevitable? To a large extent, yes. The rapid creation of a new neighborhood can’t help but create consequences, both intended and not. Ramifications already are playing out in city politics, where a perceived divide between the downtown core and outer neighborhoods already is seeping into campaigns for city council.

But compared to larger booming cities, it’s still early. The Star City already created a model this century for how small industrial cities can reinvent themselves. Perhaps the next step is finding replicable ways to preserve the special character of its neighborhoods.

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