Showing posts with label Development. Show all posts
Showing posts with label Development. Show all posts

Tuesday, June 5, 2018

For Upstate NY Practitioners: Small Scale Real Estate Development Workshop

If you plan to be in the Syracuse area on June 27th, this looks like a great day-long session designed to introduce the principles behind neighborhood based real estate development projects. Small scale development is a an important community development strategy - but it requires small developers!

The workshop is conducted by the Incremental Development Alliance, a national non-profit that works to build local wealth in neighborhoods through ground-up real estate development.

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Small Scale Real Estate Development Workshop

WHEN: Wednesday, June 27, 2018 8a-5p
WHERE: Hotel Syracuse, 100 East Onondaga Street Syracuse, NY, 13202
COST:
  • Early Bird Registration Rate ($170) open until Friday, June 8 
  • Regular Registration Rate ($200) open until Monday, June 25 
  • Last Minute Registration Rate is ($230) 
Register today at http://www.incrementaldevelopment.org/events/syracuseworkshop

Apply for a scholarship here

The workshop offers specialized training about how to create small projects, like 1-3 story buildings with less than 20 units, which are residential, commercial or mixed in use and 1,000-12,000 sf in size. The course assumes you know a lot about where you live, but not necessarily much about the real estate process or building development.

Through presentations on finance, design and site selection, a hands-on practice exercise, and networking with local like-minded people, this workshop is the first step to becoming a small developer yourself or creating a supportive ecosystem for small development in your city.

Who Should Attend?
  • Individuals in construction, design, planning or real estate looking to either enhance their current practice or make career transition 
  • Volunteers or professionals in business associations, main streets associations, historic preservation groups and neighborhood improvement groups looking to champion incremental development in their communities 
  • Public sector professionals in city management, economic development, planning, and related agencies who are looking to make it easier for small development projects to occur in their town 
  • Professionals in non-profit development organizations, churches, and community development or housing development organizations who need new strategies for small lot development 
  • Private banking professionals specializing in mortgages, commercial real estate loans or SBA loans and professionals as at Community Development Financial Institutions and Community Foundations who want to become more effective investors 

Monday, March 6, 2017

Coworking Spaces, Should Corridors Seek Them Out?

Ranging from large spaces. Coco, Minneapolis/St. Paul. 
Although we generally think of the tech industry when we think of start-ups, a relatively
new start-up has been emerging for years without much noise in the industry. We are talking about co-working operators and spaces.  

It's really a quite simple business model. Operators are providing a service for those that need a space to work and for those that would benefit from co-habitating this space with others in the same or complementary industries. Operators provide varying levels of space to fit the need of their customer and can offer anything from whole offices to single desks but provide shared amenities such as wi-fi, conference rooms and meeting spaces, kitchens, coffee, in-house cafes, mail and package services, etc. Forbes notes, "The operator provides flexible terms allowing renters to move in and out and upgrade or downgrade with short notice periods. Perhaps the most important characteristic, the operator designs community building programs and events to create a strong business network among its renters."

Co-working operators are not however always seeing profit and have to make due with influxes of renters and cash flow. On the other side, co-working patrons may also deal with nuisances within their spaces such as consistent loud noise, hidden fees, a barrage of rules, dirty facilities, and competitors too close for comfort. 


To the more small and intimate. Central Working, UK.
Who's in the game?

WeWork is the largest co-working operator in the industry with spaces spread around the globe. They definitely enjoy more economies of scale while other small operators like Bathaus, a co-working space in Brooklyn, infuses other income sources into their revenue stream through event space rental and they also enjoy a small niche community feel.




Who needs a co-working space?

Typically those that need a co-working space are young entrepreneurs who need and want job control wherein they can work as much or as little as needed. It is for those that seek community and perhaps need a space outside of a home office to meet clients. "Freelancers, remote workers, and other independent professionals" also fit the bill according to Harvard Business Review. This is likely because they need the shared amenities and are not in the market for their own office just yet. The added benefit of increased networking and collaboration opportunities make co-working spaces appealing to entrepreneurs.

Why does it matter to commercial corridors?

Diversifying a corridor with co-working spaces can bring great results to visitation downtown, including daytime workers who are able to spend money on food and convenience items. Given that the average co-worker is a “college-educated professional within their mid-twenties and late-thirties, primarily working within the creative industries, such as web developing, graphic design and programming, or new media” (Foertsch 2015), there appears to be many similarities between them and Richard Florida's ‘creative class’. Retailers downtown who are expecting an influx of co-workers therefore need to recognize the lifestyle preferences and retail expectations of this customer. According to Richard Florida, the creative class enjoys high quality amenities and stimulating environments that will encourage their own creativity. This might take the form of a vibrant downtown cultural scene with late night and weekend events or mixed-use streets that enable co-workers to shop, work and play locally. 

A 2016 study of WeWork Dumbo and TEEM Harlem, co working spaces in NYC, showed that co-workers are indeed more likely to dine out for lunch or grab a meal locally after work even with food pantries and coffee bars provided within the work space. Food and drinking places therefore need to remain cognizant of the varied working hours of co-workers in order to maximize sales and complement the offerings already made available in the co working spaces.

Examples of coworking spaces:
Industry City
QNS Collective
GreenSpaces NYC
Parisian Coworking Space - Deskopolitan
List of others in NYC

From elegant. Crew Collective, Montreal, Canada.

To eclectic. Conde de Casal, Madrid, Spain.
Co-authored by Nur Asri and Scott Landfried.

Thursday, January 5, 2017

The Food Hall Revolution


The retail industry has seen its fair share of trends and advancements this past year – ecommerce is up and millennials are driving experiential shopping. However, one that has inescapably stood out has been the development of food hubs and food halls all across the country. In fact, earlier in 2016, UrbanLand predicted that food was to be the ‘anchor of retail developments’ based on the rising proportion of store growth being attributed to restaurants. From Detroit to Irvine, cities and developers are catching onto the culinary-oriented developments in their own unique ways but are these places simply sexier, marketable versions of the traditional food courts? Let’s find out what constitutes food hubs and food halls and what impacts they are having on economic revitalization and food access.

Marketplaces have been a key economic, cultural, and social component of villages, towns, and cities for thousands of years and food, particularly fresh produce, has always been a vital commodity for trading at these markets. A food hub, as defined by the National Food Hub Collaboration and Michigan State University, is a “business or organization that actively manages the aggregation, distribution, and marketing of source- identified food products primarily from local and regional producers”. By doing so, food hubs bridge the gap between food producers and consumers and satisfy wholesale, retail, and institutional demand all under one roof much like traditional marketplaces. Today, many fresh food producers lack the capacity and financial resources to access these markets on their own so food hubs are indeed making it possible for these producers to gain entry into new markets, increase their incomes, and up scale production.

Not only are food hubs profitable to producers, distributors and retailers, they are also vital in improving neighborhood access to local foods by offering complementary programs and resources such as shared community kitchens for healthy cooking classes and food incubators for budding restaurateurs. All of these components that make up a food hub differentiate it from farmers markets that simply provide platforms for producers to sell directly to consumers like you, but what about the difference between food hubs and food halls?  

As it turns out, the term ‘food halls’ is increasingly being used interchangeably with food hubs. However, food halls are more often than not one of the many programs within a food hub (complementary to grocery stores, food education facilities, food distribution centers, and kitchen incubators). When food halls function separately and independently, they are often less community- and agriculturally-based. While they may claim to support locally-owned businesses and chefs, they often do not guarantee as tight a policy of local produce-sourcing as food hubs do given their varying administrative organizations and missions. Often, these food halls simply bring together multiple vendors, carefully curated to meet the targeted consumers’ taste and preference, and provide them space in high traffic areas at potentially lower rental rates.

Regardless of semantics, both food halls and food hubs are cooking up destinations for local food and providing opportunities for local businesses to grow – albeit to different degrees. Given the infancy of these food-based developments, we can only begin to predict their position as catalysts for redevelopment and socio-economic revitalization.

The Eastern Market in Detroit, Michigan, for example, demonstrates the potential for food hubs to be really sustainable and efficient food sources for communities. The food hub is the “largest historic public market in the Unites States” and has been connecting small farms with customers from metro Detroit for over a century. It has done more than just organize farmers markets for locals; the Eastern Market also hosts a massive wholesale market for local restaurants and grocers from midnight to 6am on weekdays. In addition, the market has incubator spaces for food entrepreneurs and provides professional kitchens for entrepreneurs who would otherwise be unable to access such resources. At Eastern Market, entrepreneurs can develop and test-market their products before expanding regionally. Take for example, McClure's Pickles. The firm got its start at the market and has since expanded nationally.

The Eastern Market not only meets the scope of a regional food hub but has certainly met its mission to “build facilities and critical infrastructure that fortifies the food sector as a pillar of regional economic growth while improving access to healthy and affordable food choices in Detroit”. A survey conducted by Michigan State University found that the majority of food hubs in Michigan helped increase access to healthy foods in underserved neighborhoods, thereby supporting a healthier population. More than 95 percent of Michigan's food hubs are experiencing an increase in demand of their products and services with restaurants, small grocery stores, and kindergarten through 12th-grade school food services being their number one customers. Furthermore, among the food hubs surveyed, about half of food hubs were equipped to accept federal Supplemental Nutrition Assistance Program (SNAP) benefits.

Food hubs also have the potential to act as arts and cultural centers for their neighborhoods. The large halls and spaces located in the hubs are conducive to art and design festivals. Eastern Market, for example, is home to the Detroit Design Festival every fall and many other creative pop-up events and programs. Like other food hubs, it is increasingly becoming a mixed-use building and yet food-based hub. Even food halls that simply feature chef-driven vendors and tenants are becoming arts and culture centers hosting a myriad of events throughout the year. In a time where millennial customers seek out unique retail experiences, the merging of the arts and culinary worlds was only an inevitable next step.

On the other side of the coin, when food-based developments do not serve the wider community, however, it stands to run into accusations of causing gentrification and rising property values. In Anaheim, California, where a former fruit packing and distribution center was transformed into a food hall dedicated to local vendors, it has quickly evolved into  a selling feature for new residential developments in the neighborhood. Broookfield Residential for example is hoping to “attract young buyers with units priced between $300,000 and $400,000” in a neighborhood that was once a sleepy town known only for Disneyland. Whether intended or not, the Packing House food hall in Anaheim has led to huge inflow of development into the neighborhood, raising prices of property in the area.
Furthermore, food halls that only serve ready-made meals or chef-made meals are often too upscale for the average customer. While they may help fill gaps in a food desert, prices often prevent lower income bracket groups from accessing these freshly-made and locally-grown foods since most prepared foods are not even eligible for SNAP benefits. So while food hubs and food halls may have a right to celebrate their contributions to the local food system and local communities, there are a few implications to also be wary of.

If that didn’t scare you enough, there are also a set of complex challenges involved in setting up and running food-based developments. Start-up, administrative and operational costs can run up high, especially when run by a nonprofit. Although finding capital through donations, grants, and city funding is a common strategy, these funding sources can easily go away. The many moving parts of food hubs also means that overhead costs can arise at all points on the operational chain.
Further still, site development has proven to be a huge challenge for food hubs. This is due to requirements for cold storage, space for processing food, distribution, and strategic marketing. The non-profit Boston Public Food Market, for example, is already spending close to $14 million to turn a state-owned building into a market.

Indeed, food hubs and food halls can take several years to achieve financial profitability. However, it is food hubs that work with various partners, including local farmers’ associations and school districts, which are able to increase their earnings easily by establishing distribution agreements.  These partners often also help with advertising and marketing efforts – lowering food hub overhead – and provide food hubs with a consistent yet diverse customer base.
On the other hand, food halls that function separately and independently with only chef-driven vendors open with 100 percent occupancy before quickly running into problems of high operation and marketing costs. This often leads to high lease rates for vendors. Since local entrepreneurs are particularly susceptible to rent charges and often are unable to make their businesses work in the long run without continued support from the food hall, these food-based developments hollow out and struggle to find replacement chefs.

As we move into a new year, and the trend of food hubs and food halls catches on rapidly across cities, let’s watch out for the saturation point in food-based developments. More importantly, let’s beware of its real impacts on food access and our local neighborhoods and communities. 

Thursday, June 30, 2016

Retail Recruitment 101 Webinar

Are you struggling to meet your goals to attract development or redevelopment opportunities to your community? 

ICSC (International Council of Shopping Centers) & IDA (International Downtown Association) experts will be on hand to give tips and strategies to connect with success. 

This webinar will cover who to meet, where to be and what to do to make your community more business ready for retail real estate.



Join the webinar, July 26th at 2:00 PM EDT.
Register HERE




Tuesday, April 5, 2016

What comes after streetscape improvements? One Caribbean island tries to figure out what's next for its centuries old historic district.

Last week I had the opportunity to tour the Ciudad Colonial, or the "colonial city" of Santo Domingo, the capital of the Dominican Republic. The tour was led by the Inter American Development Bank (IDB), one of the leading funders of downtown revitalization throughout Latin America. I was thrilled to be back in my element. Almost twenty years ago I spent a year traveling around the world as a Watson Fellow (quite honestly the best gig I have ever had!). I puddle jumped my way through thirteen countries to study downtown revitalization as it was being practiced in Spain and former Spanish colonies. Yet despite all of my travels, this was my first visit to Santo Domingo.

The downtown is of modest size - 9,000 residents - and is about 5 km square. As one of the first Spanish colonial outposts in the New World, the city follows the Law of the Indies. These were the planning ordinances that the Spanish Crown set for its colonies. These laws were themselves modeled on Roman planning practices that were developed during the expansion of the Roman Empire in Europe.

I was thrilled to see the effort to revitalize the City Center taking shape. The effort has received significant support from the IDB and according to my guides, almost $30 million dollars has been invested in streetscape improvements intended to both beautify and make the very narrow colonial streets safer for pedestrians. The improvements were quite impressive and certainly have made an impact on the street.



But challenges remain. As the IDB team and local stakeholders look to graduate their efforts from capital and physical improvements, the road ahead can be rocky. Capital funding is generally easier to secure than the resources - both human and financial - that are often critical to keeping up the momentum.  Now that the streets are in great shape, the work of getting people there, and ensuring that the offerings of housing, hospitality, culture, retail and entertainment keep them there as either visitors, businesses or residents, is the next step. 

In thinking this through, I am reminded of the "Retail Ready" Hierarchy that we speak about at LOA quite frequently. 

"Retail Ready" Hierarchy


The first step involves "who" is going to get things done. The individuals, organizations and institutions who lead and execute the effort. The second phase involves focusing on the fundamentals, making sure the physical environment is comfortable, clean, accessible and safe. While you never really move on from Phase II - maintaining improvements over time is as important as getting them constructed int he first place - you need some of the basics in place before moving on to the advanced stages of revitalization. Phase III is about building the customer base through a variety of methods. For some communities, it can mean increasing the number of residents who form the basis of stable market demand. In a district like the Ciudad Colonial, with a 70% upper vacancy rate, repopulating the downtown is one potential strategy. These residents subsequently become a stable source of demand that support local businesses through the ups and downs of tourism. In communities whose economies are driven by tourism, there is the additional need to ensure that visitors have enough to see and do, from retail offerings, to events and activities, to make a stay worthwhile. These offerings need to be simultaneously marketed through thoughtful promotion and innovative partnerships that help attract visitors to the district - and ensure they stay as long as possible.   

Nearly 18 years ago I wrote about this strategy in Habitat Debate, a United Nations publication, in a piece entitled "Rehabilitating Historic Districts through Public-Private Partnerships" (which amazing can still be found on-line!). The premise of those findings still hold. In both Santiago, Chile and Quito, Ecuador, non-profit or public-private partnerships were first formed to improve the physical environment, attract investment and development new housing - i.e. grow the customer base - for downtown goods and services. Both efforts have had great success and have been lauded as models for other Latin American countries. These lessons have clearly made it to Santo Domingo and it will be exciting to see what happens next!

Here are a few pics from my visit...enjoy!


Thank you to my wonderful hosts! And to my son for being rather patient as him mom takes him on urban planning tours. 
A quaint residential block in the historic district
Tourists can rent bicycles for an easy ride around town. 
Paseo Conde is the main pedestrian corridor. 
Directional Signage/Maps for tourists dot the Paseo El Conde

The IDB is funding some development projects that promise to bring more people to the district.
The building clad in black scaffolding is one such project. 

Thursday, December 10, 2015

What have we learned from the urban big box parking boondoggles of the past?


I realize that two examples don't suggest a trend, but these two examples of underutilized urban parking lots suggest a real problem - that hopefully we are on a path to overcome - in the world of urban retail.

In Columbia Heights, DC, the 1,000 space parking lot adjacent to DC USA, whose anchors include Target and Bed Bath & Beyond, remained empty enough upon opening in 2008 that "the operator typically blocks off one of its two sprawling levels" ["At Columbia Heights Mall, So Much Parking, So Little Needed", Washington Post, 10/09]. The $40 million dollar parking lot was financed with public monies. In 2010, the developer, likely with approval from their tenants, started renting spaces out for daily and monthly use.

Fortunately, we have come a long way since the days when suburban style big box retailers were squeamish about urban locations that violated their parking requirements. At the time that both of these projects were conceived, there were very few examples of big box stores in urban setting, so offering parking was a way for the public sector to mitigate the perceived risk of an untested product for retailers. But the truth is we can't put all the blame on the retailer or developer. It wasn't just the retailers who wanted parking. In many communities development stokes fear that shoppers will troll the neighborhood for parking, creating a residential parking shortage. To make matters worse, antiquated zoning based on suburban parking requirements sometimes require far more parking than might be truly necessary.

In New York, there was a similar situation with East River Plaza ["East River Plaza Parking Still Really, Really Empty, New Research Shows", Streetsblog NYC, 4/12]. The mall, like DC USA, is anchored by Target, as well as Manhattan's first Costco, and opened for business in 2010. According to the New York Times, the parking garage cost $62.4 million to build.

I did a quick analysis of parking ratios for both sites and found that they both come in, on average 2.10 spots per 1,000 SF of retail.


For those familiar with parking ratios, 2 spaces per 1,000 SF of retail might sound insufficient. These days, major suburban shopping centers offer 4 or more parking spaces per 1,000 SF of retail. But to be fair, it is light years from where we have come.  In 1954, the American Society of Planning Officials, the predecessor to today's American Planning Association (APA) published a report on "Site Design, Parking and Zoning for Shopping Centers" that looked at parking ratios for 49 of the nations shopping centers and on average, the parking ratio was 9.2/1,000 sf.

So while we are still learning about what makes sense in urban areas, what we can say is that transit rich communities like Columbia Heights and East Harlem can support retail with much less parking than they currently have. And the public sector could have gotten away with contributing much less in public funds to underutilized parking. Of course, hind sight is 20/20 and we may not have known that at the time, but it's certainly helpful to know for the future.

Wednesday, November 11, 2015

'Micro' Leasing Equals Big Opportunity for Local Eateries in the Age of Nouveau Food Courts


By Scott Landfried

I recently came across a small article in the November 2015 issue of Shopping Centers Today, which discusses the trend of micro leasing space to independent food tenants by developers seeking to offer both variety to customers and opportunity to owners. Typically, local small businesses and new restaurants are too small and precarious for developers to court them and sign a lease agreement, but micro leasing allows spaces to be broken down to small (500-1,000 SF) spaces, allowing for lower start-up costs and making expansion less prohibitive.

Fort Worth based, Trademark Property is one of these developers poised to "offer smaller spaces, lower startup costs, shorter term leases, free outdoor seating and generous tenant-improvement packages" (SCT, Center's 'micro' leasing strategy targets local eateries, Nov 2015).

This concept seems similar to Berg'n, a beer hall and food court that I've visited a few times since its 2014 opening in the Brooklyn neighborhood of Crown Heights. Berg'n offers a common eating/drinking area, four small bays of local eateries, plus a full bar and a coffee shop within the same space. This makes for a stress-free one-stop shop.

This is not a one-size-fits all sort of recipe for shopping districts, but there continues to be greater community appreciation for and a desire to have more local small eateries in the mix. I don't see this form of nouveau food court going away any time soon.

The rising popularity of food carts, especially in cities like Portland and Austin as well as micro-restaurants - small, full-time operations with limited seating and a limited menu - raises an interesting question. Can this economic model might be replicated along other commercial districts?


Additional reads:

Wednesday, May 13, 2015

What does a burned out and looted CVS have to do with upward mobility?

The Baltimore riots came to be exemplified by a looted CVS 
I have been fascinated by the recent coverage of upward mobility in the New York Times ["In Climbing Income Ladder, Location Matters"]. This topic is of interest to me because our firm is often engaged in improving retail environments in under served urban communities. Consider the CVS that was looted during the recent Baltimore riots. Did you ever stop to wonder how long it took to attract a CVS pharmacy to that neighborhood? And do you think that CVS or any other retailer will be eager to return as things settle down, regardless of how much demand and need there might be? In the end, the politics of place matters quite a bit when it comes to improving the retail environment for local residents.

Neighborhood Environments Impact Outcomes
This is why I found the research that the NYTimes covered quite riveting. Two Harvard economists conducted a time series analysis on the impact of neighborhood environment on the outcomes of poor children. In short, they found that the neighborhood environment in which a child is raised is one of the most important determinants of income (by age 26). From the standpoint of a low-income family living in a low-income community and looking to meet the needs of their children TODAY, not tomorrow, the news is not good. Basically, the research suggests that mobility is the answer. Get the hell out, basically. But the authors acknowledge that this solution is not scalable, and I agree. Moving every family out of poverty stricken neighborhoods is not a long term solution. It’s a band aid fix for an intractable problem. The real problem is the quality of the neighborhood in which they live. Addressing that problem is where the future of public policy SHOULD be if we are truly interested in improving the outcomes of poor children over time.

So what kinds of neighborhoods produce better outcomes? If we can answer that question, we can begin to craft policy solutions that will support these conditions in low-income communities. The study found the following, places that had higher rates of upward mobility demonstrated five key characteristics:

- less segregation by income and race
- lower levels of income inequality
- better schools
- lower rates of violent crime, and
- a larger share of two-parent households

Policy Solutions?
According to the authors, “our findings provide support for policies that reduce segregation and concentrated poverty in cities (e.g., affordable housing subsidies or changes in zoning laws) as well as efforts to improve public schools.”

In the short term, we must, must, must find ways to do the following:
  • REDUCE the concentration of poverty and INCREASE racial diversity. This means encouraging economically integrated neighborhoods by combining efforts to attract higher-income families WITHOUT involuntarily displacing existing residents. That means building – yes, building – NEW housing. This in turn means that some communities will need to be rezoned for density. But while that happens, we must ensure that existing families have the opportunity to remain as a neighborhood improves. Some potential policies include strengthening landlord-tenant laws that prevent harassment of tenants, helping tenants with the right of first refusal and provide financing to enable them to buy their properties and stay in place, and providing incentives or loans to landlords that allow them to rehab their buildings in return for maintaining affordability. These are just some interesting ideas advanced by The Center for Community Progress.
  • Make these neighborhoods “communities of choice” by addressing the quality of schools, the quality of the physical environment, access and transportation to jobs, and the retail offerings and cultural amenities that make a neighborhood a compelling place to live. By doing that, we create an environment that is not only better for the people who live there, but is also attractive to people of all incomes and races who are necessary to ensure diversity.
  • Reduce violent crime. The impact of crime over time on the lives of children living in a community is significant. The study found that 20 years of exposure to high violent crime rates causes a reduction in average income. Not only that, but children get caught up in crime, paying a steep price through incarceration and shortened life span. Addressing crime is critical not just for people living in a community, but its common sense that crime has a strong negative impact on people’s residential decision making. Residential sorting – where people CHOOSE to live – is directly impacted by the crime rates in a particular neighborhood. So if we are trying to reduce poverty and encourage economic integration, we have to address crime too, otherwise those with a choice to move somewhere else will do so. 
While this is only the beginning of a conversation, I am extremely hopeful that this research will drive fact-based decision making and help change the dialogue public policy dialogue. 



Tuesday, October 21, 2014

Innovation Through Competition: Grants Available to Enhance Local Commercial Districts

Commercial District Advisor would like to share some exciting news!

The NYC Department of Small Business Services, in partnership with the New York City Economic Development Corporation  and the New York City Business Assistance Corporation, has again launched Neighborhood Challenge after a successful year in 2013. "This is a competitive grant initiative designed to encourage Business Improvement Districts (BIDs) and Community-based Development Organizations (CBDOs) throughout the five boroughs to execute innovative and forward-thinking ideas that address challenges faced in many business corridors."

Last year's initiatives included storefront improvements, district marketing campaigns, and public art installations. The winning programs and initiatives are currently being implemented in business corridors across the Bronx, Brooklyn, Manhattan, and Queens.

This year grant awards of $30,000, $60,000, and $100,000 will be given to the boldest ideas in four categories:
  • Business Attraction, Retention, and Growth,
  • District Planning, Streetscape Improvements, and Public Space Activation, 
  • District-wide Marketing and Events,  and
  • Property Activation and Development.
Image via nyc.gov
CDA supports this initiative because the projects help solve small business challenges, generate, community and economic impact, and receive local recognition.

For all the guidelines, eligibility, and to apply visit: 

Applications must be submitted by Wednesday, November 5th, 2014, at 5:00 p.m.

An example of a project by 2013 Neighborhood Challenge winner:

Winners of 2013 Neighborhood Challenge:
http://www.manhattancc.org/news/newsarticledisplay.aspx?ArticleID=553

Monday, February 17, 2014

What does kidnapping have to do with retail attraction? Just ask the former Mayor of Pittsburgh

The successful effort to bring Home Depot to East Liberty was a
game changer for Pittsburgh's efforts to revitalize
the then downtrodden neighborhood of East Liberty. 
Last week I served on a two-day ULI/ICSC/HUD roundtable with about 30 of the nation's leading retail developers, retailers, financiers, policy analysts and retail consultants. The goal of the meeting was to develop a set of strategies that ULI and ICSC can act upon to help the commercial real estate industry better address the retail needs of under served markets.

I particularly enjoyed a presentation by the former Mayor of Pittsburgh, Tom Murphy and Mulu Birru, former head of the Pittsburgh Urban Redevelopment Authority (URA). During Mayor Murphy's tenure these two men were at the forefront of an innovative investment strategy that produced outcomes that were nothing short of amazing. Much of Pittsburgh's current Renaissance can be attributed to their work in the late 1990's. My favorite anecdote was a story that Murphy told the group about the City's efforts to turn around the neighborhood of East Liberty.

In 1994, the City of Pittsburgh bought a former Sears site (an abandoned department store on about 7 acres) in East Liberty, a neighborhood that had once been the State of Pennsylvania's third largest retail hub. To that they added an additional 10 to create an 18 acre assemblage. The first question most would ask is, how did a broke City like Pittsburgh get to the money to buy the property? Well, part of what was so innovative about the effort was the creation of a Development Fund, controlled by the URA, of $65 million dollars. The money was raised by siphoning off $6 million in operating funds from the City budget, which was then used to raise bond money for a dedicated acquisition fund. In a City replete with vacant, post-industrial land, this effort was tantamount to turning the City into the prime driver of development. It was a risky maneuver at the time. 

But back to East Liberty. The site the City purchased was strategically positioned and located between two neighborhoods - one the poorest and one the wealthiest in the Pittsburgh region. After some planning and research, the decision was made to pursue Home Depot as an anchor tenant for what was essentially a wholesale strategic repositioning of the district. Like many communities who embark on retail attraction efforts, early outreach to Home Depot was unsuccessful. No one thought the site had potential. Not easily deterred, Murphy called the Mayor of Atlanta where Home Depot is based in search of some intelligence on the owners. The Mayor of Atlanta shared with Murphy that one of the owners, Bernie Marcus, was a philanthropist and very involved in Jewish issues. With that, Murphy hatched a plan. He asked Pittsburgh's Jewish community to invite Marcus to speak. At a reception, Murphy's body guard approached the Home Depot owner and opened his lapel to show his gun, at which point he said, "we're kidnapping you". Murphy then took the owner on a 20-minute tour of East Liberty. Later that night, Marcus committed to building a Home Depot with the City as a partner.Wow. 

Murphy and Birru knew that concessions were going to be required - and those concessions were not insignificant. For every $1 of Home Depot investment there was over a $1 of incentive required. For Home Depot, this was an untested market and they were a first mover who wasn't sure if the project would work. The project was a resounding success, and the store become the highest volume Home Depot in the Pittsburgh region. In addition to real estate taxes, nearly 250 jobs were created and according to Murphy, 80% of employees at Home Depot walked to work. This particular point is important because some of the neighborhoods surrounding Home Depot are quite poor. It's also important to note that future development did not receive the same incentives. In fact, the last project, Bakery Square, received $0 in public monies. Now the area includes a Trader Joe's a Whole Foods and a Target. 

Not every community has a visionary leader like Tom Murphy, someone with a clear vision and a forceful personality to make it happen. But what other lessons can we take from this story?

  • The importance of eminent domain to pull together an assemblage. We cannot forget that urban sites are often not large enough to support the kind of retail that is competitive in today's economic environment, so the ability to use a mix of traditional property acquisition with eminent domain is an important and not to be overlooked policy tool. 
  • The importance of the Development Fund, which gave Birru the legitimacy to enter into conversations with developers. Without the ability to write a check, he would have had significantly less leverage.
  • Let us not forget aggressive salesmanship! While I wouldn't suggest trying to kidnap a senior executive, Murphy knew it would take a national brand to change the perception of the area, and he did whatever was necessary to get to a decision maker and get past the traditional site selection gatekeepers. "Go around the brokers" was something we heard a few times during the round table. 
  • The acceptance of risk sharing for early catalytic projects is critical. While inducements over time from the City fell to zero, public funding was critical when the market wasn't working.
For those interested in learning more about what happened in East Liberty, here is a good story from the Wall Street Journal, printed in 2012. "A Neighborhood's Comeback: Part of Pittsburgh Finally Recovers From 1950s Planners; Google Sets Up Office"

Larisa Ortiz is Principal of Larisa Ortiz Associates, Commercial District Advisors.

Monday, August 26, 2013

UPDATE: REINSTATED - SEPT. 19, A CONVERSATION WITH MIRIAM HARRIS, NYCEDC SVP OF REAL ESTATE,

Seward Park Mixed-Use Development will transform more than six acres of underutilized land and transform them into a vibrant mixed-use development. Miriam Harris will speak about this and other projects. 
Update - Miriam cancelled briefly to accommodate a mayoral press event...which was then cancelled...so we are back on! Come join us for what promises to be a great conversation with fantastic networking!

****

As co-chair of the New York ICSC Alliance Committee, I am pleased to announce a conversation with Miriam Harris, Senior Vice President of Real Estate Transactions at the New York City Economic Development Corporation (NYEDC). NYEDC is New York City’s lead agency for public-private real estate development projects in all five boroughs of the City. As Senior Vice President at EDC, Ms. Harris has a keen understanding of what it takes to successfully partner with the City to bring a project from concept to completion. She is currently responsible for over 25 active projects including the 62 acre Willets Point Project in Queens, the 1.5 million square foot Seward Park mixed-use project on the lower east side of Manhattan and the 2 million square foot Cornell-Tech campus on Roosevelt Island.

The breakfast event will be held at ICSC Global Headquarters, 1221 Avenue of the Americas on Sept. 19th. Pre-registration is required to ensure you do not have problems with security. Seating is also limited, so please register ASAP. Registration fees: Members, $20; Non-Members, $35. Click here to register.

The ICSC Alliance Program is a program of the International Council of Shopping Centers (ICSC), the international trade association for the commercial retail estate industry. Alliance Programs are wonderful opportunities to network, share experiences and exchange ideas with commercial real estate professionals from both the private and public sectors. Needless to say...bring business cards!

If you want to know more, or to get involved in planning ICSC events such as these, please feel free to contact me at lortiz@larisaortizassociates.com.




Wednesday, January 9, 2013

Getting Big Projects Right: The Seward Park Mixed-Use Development Project


Is it possible to create a seamless connection between big downtown projects and adjacent commercial districts? Can a tenant mix be curated that adequately addresses community concerns while simultaneously allowing a developer to meet his/her investment hurdle? These are just some of the challenges that communities face when a large downtown parcel is poised for redevelopment. Unfortunately it’s easier to get it wrong than to get it right. New development can inadvertently cannibalize existing retail districts. When a big enough project is located in any community, the proximity and convenience of what is offered within the confines of the project boundaries can make it difficult to get visitors to venture into the local community. Moreover, ensuring that an existing area - one that may need some sprucing up anyhow - remains competitive is a huge lift, particularly when existing commercial areas have multiple property and business owners who may not have the financial wherewithal, or the interest, to make the changes necessary to attract new customers.

The Seward Park Mixed-Use Development Project presents just such a challenge. The six+ acres on New York’s Lower East Side has been vacant for nearly 47 years. New development on the site will add 1.65 million square feet of housing, community, retail and commercial space. Because the site is publicly owned, interested developers will not only be competing for the right to develop the property, but will also have to balance community priorities with market realities during the process. This is no easy task in a community that fiercely identifies and defends its small local business owners.
The site of the Seward Park Mixed-Use Development Project

To that end I have collected a few “lessons learned” from other similar projects that have come across my plate in the past few years…

Create meaningful connections between the old and the new. This means taking pains to think about investing in nearby streets and connectors that may not be part of the official development area. Find ways to ensure that there is continuity in public space elements like street lights, benches, bike racks, etc. Consider carrying some of these elements through to the neighborhood so that there is no “us versus them” feeling for the visitor.

Denver Pavilions on 16th Street in
Downtown Denver takes pains
to avoid turning its back on the rest of the retail district
      
     Make sure that open space connects the project to its surroundings, rather than remains embedded in the middle of the project. If you create a gravitational pull away from edges of the project, the result will be two districts that fail to communicate in any meaningful way. Visitors to the project will probably arrive and have no reason to visit the surrounding community. Warning…there is a natural tension here. The developer will want to pull people into the project but the community will want to make sure the project does not cannibalize local businesses. Managing these objectives and perspectives is always a challenge. One project that I think has done this particularly well is the Denver Pavilions on 16th Street in Downtown Denver. 

The open space in South Side Works,
a large mixed-used development project
on Pittsburgh's South Side is embedded
within the project, giving visitors little reason to
venture into the community.
     Rethink and revisit the typical "mall" tenant mix. Destination mixed-use projects often include a healthy balance of entertainment, restaurants, and retail uses. So what is the ideal mix? Like anything, the answer will differ by project and market. But in most large scale entertainment destinations, 20-50% of gross leasable areas is dedicated to entertainment uses. These include programmable entertainment venues such as ice-skating, live-performance, megaplexes, sports venues, cultural attractions, event facilities, etc that serve to continually renew demand and achieve repeat visitation. Surprisingly retail uses only make up 30-40% of gross leasable area for many of these projects, compared to 60-80% of the average mall.

     Much of this may be easier said than done...but keeping these principles in mind will go a long way towards educating both developer and community on the challenges and possibilities that come with these big projects. 

Wednesday, June 15, 2011

Do you know your 'district orientation'? If not, here's why it matters...

I am often called upon to help communities develop revitalization strategies for their downtowns - and the most common question I get asked is "how do we know what to do first?" What may have been the right set of first steps for one community, may not work in another, so it's sometimes hard to figure out how to prioritize your efforts and resources.

A professor from my days at MIT, Karl Seidman, is an author of a number of publications on urban commercial district revitalization strategies that offers a framework I find useful in my work. Karl starts by helping to unpack the question of “what kinds of intervention makes sense and when?” His field research on seven “urban” Main Street programs in three cities (Revitalizing Commerce for America's Cities) found that districts often fall into four ‘orientations’ depending on where each district is in its implementation efforts. If you can figure out your district orientation, you have a better chance of figuring out what kinds of activities you should take on first, second and third.

These orientations are useful because they help us avoid a far too common mistake made by practitioners: the tendency to apply known, familiar solutions to new challenges that require adaptive solutions. (For district managers in the Coro Neighborhood Leadership Program, this will sound very familiar!). What I mean is this - what typically happens is that a BID hires someone with a background in say, marketing, and all of a sudden all of the BID's activities are oriented towards marketing, whether or not these are right solutions to the problems at hand. Or the BID hires someone who really know real estate development, and lo and behold, all of the 'right' solutions for the district become about real estate. It is important to first take a step back and figure out what kind of district you are so that you can apply the right set of solutions to the challenges you face, rather than simply apply the only set of solutions you may be familiar with.

So with that, I offer Siedman’s framework below, with one exception - the addition of a ‘clean-and-safe-oriented district’. This additional category recognizes the critical contribution that neighborhood safety plays in neighborhood commercial district stabilization.

  • Development-oriented districts are areas in need of significant investment in physical improvements. There are often numerous vacant buildings and sites in need of development. Buildings and infrastructure have deteriorated overtime, and private investment is unlikely because few see opportunity for return without some form of public subsidy. Marketing and promotion cannot occur until the market is more stable and there is something of substance to market and promote.
  • Organization-oriented districts need help getting started. There is limited administrative capacity to take on any initiatives – and no established consensus around where to start or who will lead the initiative. These areas may have cultural or language barriers that make achieving consensus a challenge or they may suffer from ‘planning malaise’ or lack of leadership.
  • Promotion-oriented districts start from a position of relative strength. They may have clusters of strong existing businesses that are struggling to remain relevant in the face of neighborhood change. These districts need help growing the customer base, which may have changed or diminished over time. Retention-oriented districts often share many of the same attributes.
  • Retention-oriented districts typically have occupied buildings and few vacant sites. In these districts, the challenge is ensuring that the existing businesses benefit from development and escalating rents that often mark neighborhood change. These districts focus on providing resources and services to existing businesses. Promotion-oriented districts often share many of the same attributes.
  • Clean-and-safe-oriented districts struggle to manage the perception and/or reality of crime, which hurts local businesses in their efforts to attract customers. This challenge undermines nearly every effort to improve the district. Reducing crime and improving perceived safety is critical to neighborhood can often serves as the primary catalyst for change and engagement from residents and businesses alike.
So which district orientation are you??

Tuesday, February 22, 2011

University Partners with BID to Improve Brooklyn Commercial District

The partnership forged by the Myrtle Avenue Revitalization Project and Pratt Institute, a university located within the distrct, is one that I often mention when speaking about how partnerships in support of commercial district revitalization can result in a win-win for everyone. A recent NY Times article highlights the example. ["Pratt Institute Takes an Interest in Making a Neighborhood Nicer", NY Times, Feb. 15, 2011]. Pratt Institute has gone from a university that turned its back on the neighborhood to one that has made some serious investment on the corridor, whether it be in the form of leadership on the BID board or major capital investments such as Myrtle Hall (above), a $54 million building that will change the face of the district, adding vitality and most importantly, retail traffic in the form of students, on the Avenue.

Monday, November 16, 2009

Overcoming Challenges to Building Rehablitation

Larisa Ortiz is co-author of “Real Estate Redevelopment & Reuse, An Economic Development Practitioner’s Guide” [2000: out of print]. She has also authored articles and policy briefs on the topic of building rehabilitation, including “The Politics of Rehabilitation” [2004] published by the Rappaport Institute at the Harvard Kennedy School of Government.


Many commercial districts face similar challenges when considering the reuse of historic buildings in their commercial districts. Originally, I got my start in this field because of a deep concern for historic buildings and a deep desire to see historic buildings successfully incorporated into commercial district revitalization strategies.


Zoning

A recent New York Times article entitled “The Use Changes; the Look Stays” articulates the challenges of using historic buildings quite clearly – zoning laws that are often antiquated and do not allow for a mix of uses (mostly residential) on upper-floors.

In the case of Ossining, the New York Times noted that the mixed-use rehabilitation that allowed for the rehab of this beautiful bank building resulted, in part, from Village rezoning efforts that allowed for residential uses above commercial uses within downtown commercial district.


Zoning and building codes that prevent or discourage rehab projects are actually not all that uncommon. Some states have gone so far as to create a distinct set of codes that apply to building rehabs. See more on New Jersey’s Rehabilitation Subcode which is a national best practice in how zoning can help facilitate rehab, rather than impede rehab. The subcode creates a set of rehabilitation requirements distinct and separate from those for new construction. The reason why this is important is because often times, upgrading an older building to meet building code requirements for new buildings is impossible without starting from scratch. So what typically happens is that building codes are applied and changed on a case by case basis - which can add significant and unknown costs to a project - costs that cannot be defined at the outset of a project. This kind of risk is one that many developers will avoid - choosing instead to work on buildings and new construction where building codes and expectations are more clear cut. By clearly defining buildig code upgrades and expectations for older buildings, the building can be rehabbed in a way that ensures user safety, but that takes the guesswork out of how much these upgrades will cost, thereby removing some of the risk to the developer.


Another issue that frequently comes up is the need, although not always the requirement, for parking. In many communities, the marketability of residential apartments mean meeting the parking needs of prospective residents. Sometimes we forget this, but not every market allows for living without a car – so developers need to incorporate parking in one way, shape or form.


Financing: Not all Funding for Rehabilitation is Created Alike

As valuable as the Historic Tax Credit may be, the credit places a number of restrictions on rehabilitation, and sometimes makes a project financially unfeasible. In the case of a project I worked on in Boston many years ago that involved a former convent, the space as originally configured included a great deal of communal space for the nuns. A historic rehab would have to maintain the integrity of this communal space, i.e. leave it open, thus reducing the net leasable area and subsequently the level of debt service the project can carry.


In the case of the buildings profiled in the Times article, funding came through a variety of sources. Interestingly enough, none included the Historic Tax Credit. Instead, funding came from “$1.2 million from Westchester County, $480,000 from the New York State Affordable Housing Corporation, a traditional $2.6 million mortgage and the firm’s own equity.” I honestly don’t find it particularly surprising that Historic Tax Credits were not used for this project. Adding that layer of oversight might have further complicated the project for the developer – who indicated that it was in fact a more complicated project than they typically tackle.


In my experience, I have found that it is not uncommon for rehab projects to incorporate a mix of federal and state funds for affordable housing. Most common among this is the Low-Income Housing Tax Credit. The renovation of older buildings for the purposes of affordable housing is often the first step towards developing downtown market demand – and I have seen it serve as an effective catalyst for market rate development along commercial districts as well.


Overcoming the challenges associated with building rehab is not easy – and it does take a developer willing and able to tackle challenges and obstacles – but it is not without its rewards. The return of these iconic buildings to the housing and retail stock can be a wonderful stepping stone for overall commercial revitalization.