Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, June 08, 2011

Vertical phasing in Real Estate Development and the Walmart proposal in Ward 4...

Vertical phasing in real estate development isn't that big of an issue in DC, because comparatively speaking, because of the height limit, buildings are small.

It is an issue in New York City. Phasing is important because the scale of projects can be very large, therefore very expensive, therefore very risky. If you want a project to come to fruition, it has to be phased, and it occurs over a long period of time.

There is an MIT thesis, Real Options in Action: Vertical Phasing in Commercial Real Estate Development by Jason Pearson and Kate Wittels, on the subject that I just came across while looking something up with regard to some redesign and physical improvements of the also renamed Court House Square subway station in Queens, New York. About 5/6 of the cost was "paid for by Citigroup" according to this NYT blog piece, "New Queens Transfer Point Aims to Ease Subway Travel," but really it was "paid for by the developer" which happened to be Citigroup.

The thesis looks at 4 projects in the US and Canada, including the one at Court House Square.

This becomes somewhat relevant to the "Walmart" issue in Ward 4. I served as the co-chair of an ANC4B committee convened to review the development application submitted by the developer for the site on Square 2986 that is a proposed Walmart store.

The Final Report and Summary Recommendations are online on the ANC4B website.

The report is 13,000 words, has lots of images, and 38 recommendations.

A big part of the report looks at the site plan and how it proposes, for 75 years, a single use--a Walmart big box store. Note that it is typical for these kinds of sites to be redeveloped over a 20 to 35 year period. But such a long lease for the most part precludes this from happening for the proposed Georgia Avenue store.

Walmart appears to be agnostic about where they put their stores in urbanized settings--merely responding to what a developer proposes.

The proposed store in Ward 6 will be located on the second floor, and topped by housing. The proposed store in Tysons Corner will be on one or two floors in a mixed retail building.

But the store proposed for Georgia Avenue is a typical big box, a single store occupying a site in its entirety, with underutilized vertical development rights, except that store will be on two floors, and have underground parking, rather than the more typical single floor footprint, fronted by parking.

For a variety of reasons, the committee didn't think that the proposal as submitted makes sense. (But because it is a "matter of right" project under zoning, we have limited ability to shape changes through planning and zoning regulations and processes.)

The report ascribes the reason for this ordinary and uninspired development proposal to lack of real interest on the part of the developer, Montgomery County based Foulger-Pratt, to do a good project in DC proper, in part because it would compete with their considerable investment just up the street a couple miles in Silver Spring, Maryland.

A goodly part of the argument on site planning advocated for a phased development approach, which would obviously be vertically-oriented.

Too bad I didn't know about the thesis when we were writing the report...

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