Cities find gold along the waterfront

America is rediscovering its waterfronts. Cities and towns on oceans, rivers, and lakes throughout the nation are shoring up rundown sections of their waterfronts for recreation, retail trade, restaurants, parks, and housing.

In addition to generating thousands of new jobs and millions of dollars in tax revenue, mushrooming waterfront redevelopment projects become in effect brand new neighborhoods, rising phoenix-like from the ashes of industrial and commercial decay.

Though heavily dependent on federal grants during the past decade, these burgeoning "people places" may weather Washington's budget cuts far better than other urban projects. The private sector's role, lured as to sunken treasure with promises of high yields, is inexorably increasing, statistics show.

At the same time, development may take more time because of a growing desire to preserve and incorporate historic structures into such projects and because of greater public participation in the planning process than ever before.

The Rouse Company, one of the nation's leading real estate development firms and developer of Baltimore's Harborplace and Boston's Faneuil Hall Marketplace, currently is participating in waterfront projects in 10 other cities.

In almost every case, says Rouse spokesman Scott Ditch, one of the company's primary jobs is to remove "the barriers between people and the water" -- whether they be ramshackle warehouses, storage lots, or a basic lack of appreciation of the fact that "cities have a jewel in their midst in the form of water. And it has a very humanizing effect on the cities."

"Until recently, urban waterfront areas were one of America's most neglected resources," says Ann Creen Cowey of the US Office of Coastal Zone Management. Her office has provided small planning grants to more than 50 cities and towns for waterfront revitalization. "Once thriving, they fell into disuse and disrepair as economic and technological changes occurred."

But beginning in the early 1960s, she notes, new interest was spawned through federal studies and private intiative. Then, extravaganzas such as Operation Sail during the nation's Bicentennial celebration in 1976 sent public interest soaring.

A look at what some cities are doing:

* New York. South Street Seaport, which sits like a diminutive antique along the eastern fringe of a section of downtown Manhattan's glass and steel skyscrapers, is on the verge of vast new development that will incorporate the 200-year-old-plus architecture and a small town or "seaport" atmosphere.

After completing a feasibility study, the Rouse Company has received the green light to invest $69 million in building a commercial-retail complex on an East River pier adjacent to the Fulton Fish Market. Finding a way to save the market, which in its heyday actually sold more meat than fish, was an intregal and time-consuming part of Rouse's project. But Rouse and city officials stress that the project could only have been possible with the $20 million Urban Development Action Grant (UDAG) it received to build a new pier.

* Boston. This old seaport city is perhaps the "granddaddy" of waterfront redevelopment, with the Faneuil Hall Marketplace widely considered its centerpiece. In 1973, Rouse, together with the architectural firm of Benjamin Thompson & Associates, created a plan to revitalize three antiquated market buildings. Though actually set back from Boston Harbor, the marketplace is closely integrated with the harbor and was considered a linchpin for the establishment of urban parkland and apartments facing the water. Though many shops are not selling as much merchandise as original envisioned, Faneuil Hall Marketplace now provides some 2,800 jobs, up dramatically from pre-renovation levels. Tax revenues from the three buildings are now running at $1.5 million annually compared to less than $100,000 before renovation.

Still, there is growing concern in Boston, as in many other cities, about waterfront redevelopment. Dean Johnson, a spokesman for Boston Harbor Associates, a nonprofit group that tries to balance the interests of industry with those of recreation and commerce, believes "the city has to very, very careful to prevent the waterfront from becoming a "private preserve" for high-income people.

"In the early 1970s the trick was to get any developer at all interested in the harbor. Things were just getting started . . . but we've gone beyond that. There are many developers knocking at our door, and the urban waterfront has become very valuable. We want to make sure that existing users of the harbor are not squeezed out in the gentrification process. . . ."

* Baltimore. Harborplace has become the "in" place in downtown Baltimore for residents and visitors. Consisting of two glass-enclosed pavilions on the city's inner harbor, Harborplace boasts restaurants, cafes, markets, and speciality shops with harbor views.

Before the city passed its Harbor Renewal Ordinance in 1967, the inner harbor was anything but pretty to look at. But gradually it has undergone a metamorphosis few city officials even dreamed of. In 1977, the city council approved Rouse's plan for Harborplace, and site work began in early 1979. Meanwhile, a new skyscraper, Baltimore's World Trade Center, sprouted on the edge of inner harbor. And pleasure boat dock space and moorings replaced some of grimy industrial eyesores.

* San Francisco's Ghirardelli Square, like Boston's Faneuil Hall, has become a prototype for waterfront revitalization and renovation there continues. Savannah, Ga.; New Bedford, Mass.; Annapolis, Md.; Newport, R.I.; Pittsburgh, Pa.; Norwalk, Conn.; and scores of other cities are doing likewise.

What ultimate effect the proposed federal budget cuts will have on all this is unknown. That it will have some effect is certain. The National Endownment for the Arts, for example, which the Reagan administration wants to slice in half, sponsored studies for waterfront projects in dozens of cities. But private interest is strong, say waterfront experts, and getting stronger all the time.