The Dawson Company. Urban Residential and Public-Private Partnership for Community Development. Presented to the City of Pensacola, FL July 23, 2012

Transcription

1 The Dawson Company Urban Residential and Public-Private Partnership for Community Development Presented to the City of Pensacola, FL July 23, 2012 For more information, contact: 191 Peachtree Street NE Suite 805 Atlanta, Georgia Harold Dawson, Jr., CEO

2 Community Development Philosophy Community Development is NOT about Real Estate It is first and foremost about empowering people to create a sustainable and inclusive community. The Dawson Company s approach to effective community development that employs an integrated two-pronged approach combining a STRATEGIC VISION with TACTICAL INITIATIVES. 2

3 Table of Contents Overview of The Dawson Company and Approach to Community Development Aspects of a Strategic Vision Initial Assessment of Pensacola Review of Housing Economics Potential Tactical Initiatives for Transformative Real Estate Developments Summary and Discussion 3

4 OVERVIEW OF THE DAWSON COMPANY AND APPROACH TO COMMUNITY DEVELOPMENT 4

5 Dawson Company Overview The Dawson Company, founded in 1969 by Harold Dawson, Sr., is a second generation African-American real estate firm with a legacy in affordable housing development and real estate advisory services. Industry leader in sustainable, mixed-use, transit oriented development and public-private community development. Development can be transformative and bring about generational change. The Dawson Company builds workforce and affordable housing developments as well as large scale, catalytic, mixed-use community developments that are typically collaborations between public sector and private market partners Large-scale projects typically involve multiple stakeholders including government agencies, community stakeholders, and other public/private partners. Dawson offers public sector clients with a set of services that compliments our private market practices to assist them in realizing tangible results 5

6 Dawson Company Overview Harold A. Dawson, Jr President & CEO Joined Dawson in 1992 Leads the development team Specializes in structured finance Professional and Educational Highlights 22+ years of real estate investment, and development experience BA, Princeton University MBA, Harvard Business School Jerome Hagley Executive Vice President and COO Joined Dawson in 1992 Responsible for overseeing the Company s operations Professional and Educational Highlights 20+ years of real estate development and management experience BS, Spring Hill College Masters in Public Accountancy, Georgia State University 6

7 Dawson Company Overview Roderick W. Teachey Senior Vice President of Development Responsible for oversight and execution of all development activities including due-diligence, pre-construction planning, construction oversight, and post construction sales and leasing activities. Professional and Educational Highlights 20 years of diversified real estate experience including institutional asset management, lending and underwriting and development. BS in Finance, The Wharton School of Business at the University of Pennsylvania Bailey Pope, AIA, LEED Green Associate Senior Vice President Design & Sustainability Joined Dawson in 1999 Responsible for design, and regulatory compliance Professional and Educational Highlights 20+ years of architectural experience BA, Princeton University Masters in Architecture, Georgia Institute of Technology 7

8 Approach To Community Development The Dawson Company s Development Philosophy The Dawson Company s approach Public-Private Partnerships for development transcends basic real estate (design, finance, bricks and mortar) in following ways: Emanates from and embodies a public policy purpose Has a desired outcome that addresses a public need to satisfy a deficiency Is catalytic by nature in creating sustainable multipliers for organic growth The bottom line is that it is bigger than just a real estate deal Public-private partnerships for community development generally seek to unite public policy and free market economics Public and private sector assets are combined to change the trajectory of a community, city, state, or even country Public agencies provide the initial catalyst to jump-start the free-market engine that ultimately sustains itself in a transformed community The City of Pensacola can leverage the model that has been set with the planning process and ultimate implementation of the Downtown Retail Strategy Comprehensive, fully-integrated executable business plan Not another study but executable business plan with action items, schedule, critical path, milestones with accountability, metrics, benchmarking to measure success and compare to best-practices 8

9 Approach To Community Development A major mixed-use urban development in partnership with Carter Real Estate located in Cincinnati, Ohio 18 acres (eight city blocks) of prime waterfront property along the Ohio River $700 million projected development costs The Banks Mixed-Use Development 2.8 million square feet of new mixed-use development at full build out Phase IA was completed in Spring 2011 This project was stalled for over 10 years until Dawson was able to bring the City, County, and various stakeholders together to move the deal forward 9

10 Approach To Community Development Lindbergh City Center TOD Development A major mixed-use transit oriented development in partnership with Carter Real Estate located in Atlanta, Georgia Dawson worked with the City of Atlanta and Metropolitan Atlanta Rapid Transit Authority (MARTA) to create the first transit-authority sponsored TOD in the United States, based around MARTA s Lindbergh Transit Station in Atlanta Once completed, will include 1.2 MM sf of office space for AT&T, 200 K sf of retail space, 300 K sf of multi-tenant office space, a hotel and 2 K residential units Dawson developed 700 residential units as part of the $500 M deal 10

11 Approach To Community Development Baltimore s Historic West Side Developments Centerpoint Mixed Use Development Dawson worked with the City of Baltimore s Baltimore Development Corporation and Bank of America Community Development Corporation to develop a $104 million mixed use development that encompasses an entire city block on Baltimore's Westside Lexington Square Mixed Use Development Dawson s second landmark development as part of the major West Side redevelopment initiative sponsored by the City of Baltimore A proposed mixed use development project which includes up to 1 MM SF of construction and over $150 MM in total development cost Centerpoint Lexington Square 11

12 ASPECTS OF A STRATEGIC VISION 12

13 Aspects of a Strategic Vision Moving the Needle and Changing the Trajectory Fully integrated, comprehensive, executable business plan Rebranding and Messaging Promoting Assets and Mitigating Liabilities Selecting Your Audiences Establish public policy goals Property Tax Base Smart/Balanced Growth Workforce Housing Stock Public Education Unemployment Rate by Segments of Population Sustainable and equitable economic expansion for all residents vs. gentrification for the few Identify and Create the Economic Anchors Plan for Economic Sustainability Strategic Initiatives 13

14 Aspects of a Strategic Vision Strategic Initiatives - continued Leverage Assets University of West Florida Port of Pensacola Global Learning Academy US Naval Air Station Pensacola Industry Cities to Create Critical Mass, Economies, Synergy Pensacola Downtown Technology Campus Medical Technology and Services Environmental Technology and Green Industry Identify and utilize existing economic development tools Create new economic development tools, including enacting corresponding enabling legislation and regulations Establish and strengthen relationships with state and federal government through delegations and direct alliances with departments 14

15 Aspects of a Strategic Vision Strategic Initiatives - continued Establish and strengthen relationships with private markets Create multi-dimensional dashboard to facilitate accountability, establish metrics and benchmarking, coordinate resource allocation, track costs Exploit the interrelation and integration of initiatives Exploit the integration and interrelation of the entities CRA, DIB, Pensacola Bay Area Chamber, Escambia County, Pensacola-Escambia Promotion and Development Commission, Community Maritime Park Authority, etc. Create an environment of inclusion Create consistent internal and external messaging Implement an Economic Inclusion Policy M/WBE Participation to build capacity and wealth Workforce development programs to build skills Inclusionary Housing Policy to promote equity 15

16 INITIAL ASSESSMENT OF CITY OF PENSACOLA 16

17 Initial Assessment Of Pensacola Assets: Natural/Environmental Historic Military Educational Civic Cultural Public Infrastructure ATTRIBUTES Coastal City with vibrant tourism, burgeoning downtown, Maritime Park, University of West Florida, Naval Base Liabilities: Low Quality of Education Lack of Economic Anchor Socio-Economic Disparities Demographics Racial Inequity Generally Lower Median Income OBJECTIVES Looking specifically at development to address housing shortage: Create a cohesive executable plan to stimulate stalled development initiatives Address real economic and perceived social disparity amongst racial lines Address the shortage of affordable and workforce housing 17

18 Initial Assessment Of Pensacola FOUNDATION Initiatives that have worked or are working: Downtown Retail Strategy Downtown Improvement Board Downtown Parking Management Strategy/District CRA s Comprehensive Plan for the Waterfront Bayfront Parkway Community Maritime Park CHALLENGES Initiatives that need to be re-energized or need initialization: Community Maritime Park Port Administration (mixed-use development commercial and industrial) Bruce Beach Escambia County Utilities Authority Site Sanders Beach/Corrine Jones Community Center 18

19 Initial Assessment Of Pensacola GOALS Initiatives that have worked or are working: Downtown Retail Strategy Downtown Improvement Board Downtown Parking Management Strategy/District CRA s Comprehensive Plan for the Waterfront Bayfront Parkway Port Administration (mixed-use development commercial and industrial) Community Maritime Park CHALLENGES Initiatives that need to be re-energized or need initialization: Community Maritime Park Bruce Beach Escambia County Utilities Authority Site Sanders Beach/Corrine Jones Community Center 19

20 REVIEW OF HOUSING ECONOMICS 20

21 Housing Economics Capital Markets Basic Realities Capital Seeks Investments that Are: Already Entitled Shovel Ready Primary Cities Low Hanging Fruit Minimal Complexity Substantial Public Subsidy Capital Tends to Avoid Investments with: At Risk Development Mixed-Use Programs Tertiary Markets Public Private Partnerships Month Project Schedules Capital Market Drivers for Housing Investment: Subsidized Affordable and Workforce Housing Student housing with credit/balance sheet enhancement from institution Age restricted and assisted-living high-income housing supported by Baby-Boomer demographics 21

22 Housing Economics Pensacola, FL Area Median Income $55,607 Annual Income Required Return on Cost Range: 5% - 10% $4,634 Monthly Income (Market and Product Driven) $1,390 Amount Available for Rent Pensacola = 7.0% OPTION TOTAL COST PER UNIT REQ'D INCOME REQ'D SUBSIDY LOW-DENSITY SINGLE FAMILY Land Cost $20,000 Single-Story Block or Wood Frame Hard Cost $107,250 Amount Per Month $4,918 Monthly Rental Amount $284 Avg. Unit Size (SF) 1,400 Soft Cost $61,813 Annual Income $59,011 Cost Subsidy Per Unit $25,000 Project Size (# of Units) 12 Total Cost Per Unit $189,063 Density (Units Per Acre) 8 Monthly Mrtg. Payment $1,475 Garden-Style Apartments Land Cost $8, Story Wood Frame; No Elevators; Surface Parking Hard Cost $98,500 Amount Per Month $4,255 Monthly Rental Amount $0 Avg. Unit Size (SF) 900 Soft Cost $26,625 Annual Income $51,063 Cost Subsidy Per Unit $0 Project Size (# of Units) 220 Total Cost Per Unit $133,125 Density (Units Per Acre) 45 Req'd Rent Per Month $1,277 Mid-Rise Apartments Land Cost $12, Story Wood Frame; Elevators Hard Cost $147,500 Amount Per Month $5,543 Monthly Rental Amount $273 Parking Deck Soft Cost $39,875 Annual Income $66,521 Cost Subsidy Per Unit $46,774 Avg. Unit Size (SF) 900 Total Cost Per Unit $199,375 Project Size (# of Units) 250 Density (Units Per Acre) 80 Req'd Rent Per Month $1,663 High-Rise Apartments Land Cost $20, n Stories Concrete Structure with Elevators Hard Cost $226,000 Amount Per Month $7,646 Monthly Rental Amount $904 Avg. Unit Size (SF) 850 Soft Cost $61,500 Annual Income $91,750 Cost Subsidy Per Unit $154,899 Project Size (# of Units) 300 Total Cost Per Unit $307,500 Density (Units Per Acre) 300 Req'd Rent Per Month $2,294 22

23 Housing Economics POTENTIAL SUBSIDY SOURCES Section 8 /Housing Choice Vouchers CDBG Funds/ Neighborhood Stabilization Program (NSP) Low-Income Housing Tax Credits Tax-Exempt Bonds PILOT/Enterprise Zone (RE Tax Exemption) Tax Allocation Districts (TAD)/ Tax Increment Financing (TIF) Ground Lease Structure Land Bank Authority 23

24 POTENTIAL TACTICAL INITIATIVES for TRANSFORMATIVE REAL ESTATE DEVELOPMENT 24

25 Transformative Real Estate Development Community Development Highlights Lindmont Apartments Dawson acquired and redeveloped a low income, low rent, racially diverse 1940 s era apartment complex in Atlanta, demolished it and redeveloped the entire site Handled relocation of current residents and provided mortgage and financial literacy assistance NO NEGATIVE PRESS Cincinnati The Banks Brought County, City and Community parties together to move decade long stalled project forward Worked with local African American religious leadership and NAACP who represented historically extended communities Currently developing Phase 1 of a 2.8MM SF mixed-use development Baltimore Centerpoint Worked with Baltimore Community Development Corporation in an effort to revitalize the area Redevelopment of an entire city block which became the catalyst for larger redevelopment Worked with Historic Preservationists and local community leaders Asked by Governor (then Mayor) O Malley to join the team for the Lexington Square development 25

26 Transformative Real Estate Development Dawson has a legacy of affordable housing developed using 80/20 Low Income Housing Bonds Affordable Housing Developments Uptown Square - a 364 unit mixed use development financed using tax-exempt bonds Northside Plaza - a 167 unit mixed use development financed using tax exempt bonds and tax credits City Plaza Apartments - a 127 unit mixed use development financed using tax exempt bonds and tax credits 26

27 Transformative Real Estate Development Recently engaged by the largest telecom company in the Kingdom of Saudi Arabia to provide professional real estate consulting services on over 1500 real state assets Assignment included: Saudi Telecom Company (Kingdom of Saudi Arabia) Advise client on how to capture value of underutilized real estate Inspect, perform valuations on, and document all real estate assets Phase II Assignment (pending) Assist in implementing business strategy involving leasing, selling, refinancing and developing real estate assets Implementation of the recommendations derived from the business planning assignment 27

28 Potential Tactical Initiatives Tactical Initiatives address immediate needs, like picking the low hanging fruit, but also create the environment to achieve strategic objectives. GOAL ORIENTED IMPLEMENTATION Internal and external messaging through visible and immediate action Create an executable action plan around immediate goals of affordable, work-force and mixed income housing Indentify land assets controlled by public entities conducive and appropriate for housing and potentially other uses Formal business plan on each major asset where public entity has control with strategic prioritization Create a land bank and repository with the corresponding economic analysis on each parcel Financially model the contemplated transactions utilizing private sector input 28

29 Potential Tactical Initiatives GOAL ORIENTED IMPLEMENTATION - continued Identify the subsidy needed and create a solution set (know the answer before asking the developers) Tax Increment Financing New Market Tax Credits Low-income Housing Tax Credits Tax-exempt Bond Financing P3 Infrastructure Financing EB5 Financing Federal Grants Enterprise Zones (Property Taxes) Pre-market the story to the capital markets and court institutional investors Create solicitations RFEI and informational sessions to screen developers Issue RFP s to pre-screened developers Utilize unsubordinated participating ground leases to facilitate affordability and mitigate embarrassing windfall profit to developer Determine credit solutions in public, private, corporate and institutional markets don t rely solely on the developer Once selected create partnership with developer to ensure success 29

30 SUMMARY AND DISCUSSION 30

31 Summary And Discussion SUMMARY Strategic Business Plan for Community Development Economic Development and Community Engagement Tactical Approach to Identifying Catalytic Initiatives Promotion of Successes and Community Assets DISCUSSION Questions and Answers Next Steps 31