Real Estate Commoditization, the Art of New Urbanism & CNU23

In The End of Secrets (by Ryan Quinn), Kera, an FBI agent, is recruited out of the government to covertly spy on domestic targets. The ONE Corporation starts buying up media and entertainment companies, building up a stable of top performing artists in an attempt to massively commoditize their art/music by carefully engineering the “product” – the sound, the art, the media, the message. A number of their performers go missing, the supposed victims of suicide, murder or abduction and the intrigue begins. Kera and her computer hacker friend use computers and surveillance cameras around the city to spy on various persons of interest.

With rare exception, from the 60’s to the 90’s, real estate development in the United States was conceived, designed and built by the ONE Corporation – real estate as a commodity, a financial instrument, something  that could be easily understood on a nameless, faceless proforma. To meet the requirements of Wall Street and Big Banks, the product had to be contained within a certain box – high end neighborhoods, certain homogenous designs, separation of uses, a certain number of units – so that we could slice and dice the debt and equity components of the investment into manageable chunks and sell it off to the masses – pension funds, life insurance companies, overseas investors, etc. We can’t really blame the real estate developers – they were constrained by what was financeable and what the cities would let them build under (arcane) zoning and development codes that require separation of uses, to say nothing of “not in my backyard” pressures from homeowners if the new project was not the norm of surrounding uses.  As long as the federal, state and local governments built super-highways further out into the favored sectors, land was cheap and plentiful for this type of development.

There are two problems with all this commoditization.  First, like in the End of Secrets, the process of commoditization murders the artists and destroys the art – in the case of cities, the art of placemaking. Great places, like great art, inspire us and makes an impression for decades. We can avoid bad art – bad real estate development has a 50 year impact that is hard to remedy. And second, in many booming, growing places like DFW, we really are at the End of this Secret – government can’t afford to maintain the infrastructure we have, much less build more highways to Oklahoma.

The good news is that over that last 15 years or so, DFW has really begun to embrace New Urbanisms’ “art” of better placemaking.  We see it in Klyde Warren Park and Sundance Square, downtown Plano and Legacy Town Center, downtown McKinney and downtown Burleson, Dallas’ revived Main Street (thank you Tim Headington), downtown Carrollton and downtown Garland, renovated and repurposed buildings in Dallas and Fort Worth, etc. etc.

You don’t need surveillance cameras and supercomputers to spy on the bad or learn the new. The Congress for New Urbanism (CNU) is bringing their 23rd annual Congress (CNU23), “Meeting the Demand for Walkable Places”, to DFW April 29 – May 2, 2015 – and we invite you come expand your horizons in the art of New Urbanism. You’ll get the chance to see world-famous speakers like Jan Gehl (responsible for much of the biking infrastructure in Copenhagen and the urbanization of Melbourne, Australia), Judith Rodin (Executive Director of the Rockefeller Foundation), Chris Leinberger with the Brookings Institution, Jeff Speck (author of The Walkable City) and Charles Montgomery (author of The Happy City), to name just a few.  You can find out more and register here.

Posted in Uncategorized | Leave a comment

Jan Gehl to Headline CNU DFW Congress, April 29-­‐May 2, 2015

“HUMAN SCALE” PIONEER JAN GEHL TO HEADLINE CNU DALLAS/FORT WORTH CONGRESS, APRIL 29-­‐MAY 2, 2015

The beloved guru of human behavior in public space will speak to an expected 2,000 attendees at CNU 23

DALLAS/FT WORTH, TX (October 23, 2014) – Architect and author Jan Gehl will bring ideas from his latest work to the 23rd Annual Congress for the New Urbanism in Dallas and Fort Worth, Texas April 29–May 2, 2014. Gehl has been highly regarded for years for re-­‐orienting city design towards the pedestrian and cyclist. But he has enjoyed a new burst of acclaim with the release of the film The Human Scale, which focuses on his life and work.

Gehl’s recent work uses public life surveys to better inform people-­‐focused design. Gehl maintains that to create thriving, prosperous places, we must design at the human scale and shape policy to invite and reward public life.

“I’m thrilled that Mr. Gehl can join us in Dallas and Fort Worth.” said Lynn Richards, President and CEO of CNU. “I’ve been a fan of his ever since reading Life Between Buildings. CNU has always been about encouraging design at the human scale. The theme for this 23rd Congress is ‘Meeting the Demand for Walkable Places.’ So having Jan Gehl with us in Texas couldn’t be more appropriate.”

Mr. Gehl’s presentation will fit the tone of the four days of high-­‐level training, discussion and application of placemaking strategies in real places in Dallas and Fort Worth. “The demand for compact, walkable neighborhoods is rising,” said Ms. Richards. “We’ll be using Congress sessions and demonstration projects to put the spotlight on success stories in the region and the nation and to explore ways to ramp up our mission to help communities build places people love.”

Speakers and sessions will be announced as they are confirmed. Visit cnu23.org and signup for the mailing list to stay updated on the latest news about the Congress.

Posted in Uncategorized | Leave a comment

Connecting the Dots – DART/TRE, Uber/Lyft/ZipCar and I-345

Not many in DFW know this stat – We have THE LARGEST light rail system in the US (of course we do – everything in Texas is bigger!)

However as in most things, size isn’t everything. Makes for great bragging rights and huge costs, but does not necessarily result in ridership. If you can’t ultimately connect easily from your point of origin to your point of destination, a sprawling transit system that does not “connect the dots” is ineffectual and will be underutilized. [DART ridership per mile is like 28th in the country)

This lack of connectivity is one reason DART ridership is so low. For those of you who have not climbed aboard, I invite you to try DART or the TRE – in stark contrast to drive by a highway stress-induced commute, travel by rail is de-stressing, decompressing, “I don’t care if the highway is at a standstill” relaxation moment. And it allows time for more creative enterprises – like taking a moment and considering how to make DFW a better place and writing fun articles.

Back to mass transit and connectivity – the DART/TRE conundrum is two-fold. One, like fiber optic cable (a different kind of “connectivity”) the most critical part of the infrastructure is the final mile. If it doesn’t get to my house, it doesn’t really matter if there are a guzillion gigs of high speed capacity a mile away. DART to TRE stations a mile or 5 miles from my house are not conducive to my taking the train. If I have to drive to the station, park, wait for the train, etc, the hassle factor takes over, my commute gets measurably longer and I’ll put up with the highway driving stress to gain time (isn’t time our most precious commodity?)

We could dive into the importance of connecting the train stations to their surrounding neighborhoods by better pedestrian and cycling paths. Or better yet better cycling all the way from the suburbs to downtown. I’d love the option of biking from Coppell to Dallas and back. I might actually lose that 20 pounds I’ve been talking about for 20 years (I know, it’s too hot in Dallas to walk or bike – but an aside – what US city. Has the highest percent of people who bike to work? Until recently the answer was Minneapolis — not exactly the best weather in the country to bike to work (NYC may just surpassed Minneapolis)

So why are Uber and Lyft part of the equation? Simple – they are the last mile connection – for example you can take DART from DFW Airport to downtown Dallas, and then have Uber or Lyfy pick you Up and take you to a meeting in Uptown. All by smart phone app (DART has a great app and Uber should get an award for most useful app ever designed) – and Uber shows up in 5 minutes or less – try that by cab. And Uber/Lyft and ZipCar (as of a month ago we finally have ZipCar in Dallas) reduce the “range anxiety” of taking transit by providing travel options that don’t require personal car availability in Downtown. Consider this – if more of us took advantage of these transit options/connections, we could eliminate the ugly surface parking lots and quit talking about how we need more parking (which destroys the urban experience) in our downtown cores (I bet your favorite destination cities in the US relish the fact that parking is hard to find in their cores and that parking is expensive – this just means you have a desirable city). Is parking really the most important issue in enhancing our urban cores? If so we lack imagination and need to spend more time out on the train reimagining our cities.

Which comes full circle to the I-345 teardown dialogue. I recognize this is a highly contentious discussion. The fact that we are discussing whether the Trinity Toll Road should be built and whether I-345 should be torn down evidences that we are maturing as a city, beyond a pure car culture and toward multi-modal transit options (enter Uber/Lyft/ZipCar, bike share, walkable neighbors and overall connectivity) and a greater understanding of the impact of our infrastructure decisions and investment on where & how and with what quality we live and work and play. We are at a crossroads (pun intended) where we can either enhance or impair our future based on the decisions we make over the next few years. Choose wisely as what we do now will have a 50 year impact. DFW has been incredibly forward thinking in our transportation infrastructure decisions with DFW airport in the 60’s and DART/TRE (not to be forgotten, the Denton A-train) over the last 20 years. Where we go with highways and parking and Uber/Lyft are equally as critical to our regional future.

If this discussion about connectivity connects with you, consider attending the Congress for New Urbanism’s annual meeting (CNU23) next April 29-May 2 in DFW. Learn more here.  You can also follow CNU23’s Twitter Feed on DFW Urbanism here.

Posted in Uncategorized | Leave a comment

Filling the Elusive Middle of the Capital Stack

In our post-real estate recession economy, secured debt at the bottom of the capital stack is easy to find — depending on the asset class, 55%-70% of cost, great interest rates.  Top end equity can also normally be found, although at a high preferred return (high teen’s / low 20’s), typically requiring giving up a significant part of the back-end profits, which results in taking money out of the developer’s pocket.  Building the middle of the capital stack is the most important slice for the owner/developer – sizing up this part of the financing at cheaper rates results in more retained profit potential.

Filling this part of the capital stack requires patience, persistence and ingenuity, with multiple possible sources that can be layered:

EB-5 Foreign Visa Capital: For every 10 direct, indirect or induced jobs created in a high unemployment or targeted employment area (TEA) the project can receive $500,000 in investment. Job counts is determined by a qualified EB-5 economist and more jobs are deemed created than would be envisioned.  Additionally, TEA’s can be expansive (Dallas’ official TEA – which is not exclusive – runs from South Dallas to West Dallas to Uptown).  EB-5 capital is normally mezzanine debt, does not take a back end interest, has an interest rate ranging from 6%-12% and is repayable out of sale or refinancing proceeds in 5-7 years.

Federal or State Tax Credits: Depending on the location and type of project, the project could be assisted by low income housing tax credits, new markets tax credits or state or federal historic tax credits. All of these sources of financing provide either equity or a forgiven loan.  Each of these credit programs have their own sets of complexities, and may or may not be available up front, such that the developer may need to source bridge loans for these future credit equity streams.

Tax Increment Financing: Many cities have TIF districts where grants are available for “public improvements” for projects that create tax value, jobs or affordable housing.  Many of the TIF Districts have pledged out their future tax increment to projects already in the queue, which means the funds may not be available for a number of years, requiring creativity to find sources of financing (such as HUD Section 108 loans) to “advance the TIF” forward to the start of construction or redevelopment.

City Ground Leases or Infrastructure Improvements: Depending on the location of the project and the benefit of the project to the city, low cost ground leases, city developed parking garages (part of which may be leased to the developer) and city subsidies to infrastructure may be available to reduce project costs.

Charitable Grants or Low Cost Loans: If components of the project have social value, local or national charitable organizations or foundations may be possible sources of low cost financing or grants.

Get Creative: If the project has some inherent value to certain constituencies in the area, a “license” may be granted to those constituencies to use the project.  An example would be a hotel room right of first refusal to sports boosters wanting access to hotel rooms during home game weekends, or arts’ patrons subsidizing affordable artist lofts for artists in residence. If a project has “public benefit” the city may have a source of funds that is not encumbered, that could be used as collateral for a tax-exempt or taxable bond issuance, the proceeds of which could in turn be used to finance the public facility.

Making these parts of the capital stack work in harmony can be tricky — but the end result may be a project that becomes feasible by reducing the overall blended cost of capital — or better yet, a project that returns a higher end profit to the developer.

Posted in Uncategorized | Leave a comment

Dallas Could Learn a Thing or Two (from Indianapolis??)

Someone rescue me! I’m becoming as wonky (nerdy) as some of my urbanist friends.

After an early morning Labor Day DART trip from Downtown Carrollton to the Akard station, my bike in tow, I rode through Downtown Dallas, up through State Thomas/Uptown, Cedar Springs, and paralleled the DART track back north to Carrollton. The worst bike riding experience wasn’t the suburbs or even the industrial area between Denton Drive and Harry Hines … even with no traffic, riding through downtown Dallas is a miserable experience. No bike lanes, not even nice landscaped medians or wide sidewalks or even street trees. Other than about 5 blocks of Main Street (the Main Street “District” is a misnomer / cute marketing ploy), downtown Dallas screams “this is not a place for pedestrians or bikes.”

Say it ain’t so, Joe – or at least it doesn’t have to be so. Many of the downtown streets south of Ross are oversized for their current usage. They were designed for when most of the office workers were on Main, Elm and Commerce – when I started my career in the early 80’s, this was the urban center of Dallas. The throngs of office workers have long ago abandoned LTV Tower, First National Bank, Republic Bank Tower, One Main Place, Renaissance Tower, etc. (for those of you old enough to remember those names). The economic center of “downtown” Dallas is now north of Ross, and maybe north of Woodall Rodgers – and it is interesting to note that very few of the streets where the new office buildings are located in Uptown are near the scope of Elm Street and Commerce Street – and almost all of those streets are two way. The old core is now being repopulated at an increasing rate with tech incubators, rental residential units and restaurant/entertainment uses. And with DART centered on Pacific, there is less of a need to quickly move massive amounts of cars in and out the old urban core. 

I hear the cries of the office brokers – we need more parking, we need more parking, parking, parking – like the howling zombies, or maybe a bit of Monty Python – “bring out your dead, bring out your dead …. But I’m not dead yet, I’m feeling better.”

We can fight the transition in the old core, but it is coming, it is already here. D Magazine recently highlighted the rebirth – in a new way – of the old urban core.

And yet our streets still reflect “car culture.”  I’m not against the car, in fact I drive most days in from Coppell to downtown Dallas. I just want to see cars put in their proper place. We give more space and money and priority to cars than we do to place or people. If we told our spouses that our cars were more important that our kids or our houses, I wonder how that would play at home? But that is exactly what we are doing by continuing to grant supremacy to the automobile over the sense of place in downtown Dallas. We are basically peeing in our own pond, and then wondering why we don’t like the smell.

Which of your favorite cities in North America have this misguided sense of priorities of automobiles over people/place? Not San Francisco or New York or Portland or Vancouver or even Washington DC. 

Or even … Indianapolis, which connected their downtown via a bike/pedestrian path that found a creative way to balance cars, bikes and people. Pictures are worth a gazillion words.

2008-06SkyscraperCityMeetup015    Cultural-Trail_2012-06-04_BLRoss

IMG_3985    Indianapolis-Cultural-Trail

Downtown Dallas has the perfect street to convert to its own “culture walk” – Harwood Street connects Klyde Warren Park, the Dallas Arts District, Ross Avenue, Aston Park, Main Street Gardens, the newly revitalized Farmers Market and Old City Park just south of I-30. No other street in Dallas connects this many cultural/recreational areas. The street was cut off from Uptown when the Deck Park was installed.  Now comes the urbanist wonky part – according to the Council of Governments traffic count website, Harwood now only carries 1,700 cars per day at the Deck Park, 7,700 cars per day just south of Ross, 8,400 cars per day between Elm and Main Streets and 6,400 cars per day near the Farmers Market. Other than some short one or two block streets, Harwood Street is the most over-capacity, underutilized street in Downtown.

Let’s connect our great spaces downtown by reimagining Harwood as a great street, investing a bit in the horizontal pedestrian experience and see what effect it has on Downtown Dallas. We only have to look to Main Street to see the difference a good, balanced “complete” street (not a road) has on its surroundings.

Posted in Uncategorized | Leave a comment

DFW Area Urbanism #CNU23 https://twitter.com/cnu23dfw

DFW has some great urban projects — from Dallas & Fort Worth to McKinney, Grapevine, Carrollton, Southlake, Plano, Garland, North Richland Hills, Fort Worth Southside, Burleson, Denton ….. the list is endless.  Links to some of these urbanism projects:

Legacy Town Center – Plano

Sundance Square – Fort Worth

Downtown Plano

West Village – Dallas

CityLine – Richardson & More on this Project

Hometown – North Richland Hills

Dowtown McKinney

Denton Main Street & More on Downtown Denton

Downtown Carrollton & More Pictures

Roanoke – This Place Matters

Bishop Arts District – Dallas

Deep Ellum – Dallas & More on Deep Ellum

Soutlake Town Square

Victory Park – Dallas

Uptown – Dallas & State Thomas Neighborhood (and More on State Thomas)

Addison Circle

Austin Ranch – Carrollton

Las Colinas Urban Center – Irving

Historic Downtown Grapevine

West 7th – Fort Worth

Near Southside – Fort Worth

West End – Dallas

Dallas Arts District

Cityplace – Dallas

Downtown Garland

 

Posted in Uncategorized | Leave a comment

More Audacious Plans for Downtown Dallas

Mayor Rawlings has a 10 point Grow South initiative, that includes a private investment fund for Southern Dallas. What if we went further, and helped out Downtown and the Southern sector, forcing the business community to think south of I-30, and opened up vital development land and (dare I say it) parking in Downtown, with a bold, visible, long term move to literally rebrand City Hall.

HOW? What if the City of Dallas committed to moving City Hall to the Cedars as part of a larger mixed-use “town center” project, giving South Dallas a true cultural/civic center.  With due apologies to those who love “brutalist” architecture, we would then take down the existing City Hall (maybe the Pentagon could use it for target practice) and eliminate the giant building and plaza that sucks the life out of the surrounding area, and allow that land – and the massive amount of below grade parking – to be put out to developers under a request for proposal for a Downtown mixed-use project. This would leverage private investment going into “SoYo” (South of Young) – the Farmer’s Market, Butler Building, Masonic Temple, Encore Park, etc.  I’d bet that taking down City Hall alone increases property values in the area.

Seems like everyone wins – and the new City Hall just requires money, which for big important projects Dallas always finds somewhere.

Posted in Uncategorized | Leave a comment