Enduring Paradise: Positioning San Diego for Its Next Episode

Enduring Paradise: Positioning San Diego for Its Next Episode November 15, 2013 William Kohn Fleissig Communitas Development San Diego s Legacy (1906) 1

San Diego s Legacy (1924) San Diego s Legacy (1974) 2

.and So Does the Transportation Network Emerging Market Trends job growth concentration 4

Underlying Infrastructure Policy Targeting Priority Development Areas SAN DIEGO SANDAG MTS Utilities Water Districts Counties Municipalities public policy + infrastructure investments Demographic Shifts Common Aspirations. Matures (b )before 1946 Gen X (b. 1965-1980) Millenials (b. 1981-2000) Baby. Boom (b )1945-64 2/3 of market wants to live and work in urban, walkable districts demographic shifts 5

Property Investments Near Transit job growth concentration public policy + infrastructure investments demographic shifts Transit Oriented Development has evolved TOD 1.0 Transit A. Route Alignment B. Station Location C. Station Area Real Estate A. Land Assemblage B. Infrastructure C. Vertical Development UMTA Era: Uncoordinated transit infrastructure implementation and real estate development. One-off real estate projects built only when markets and regulations support development. 6

Toward better connection between land use and transit Transit Real Estate TOD 1.0 A. Route Alignment B. Station Location C. Station Area A. Land Assemblage B. Infrastructure C. Vertical Development TOD 2.0 1. Route Alignment 2. Station Location 3. Station Area 4. Land Assemblage 5. Infrastructure 6. Vertical Development Since ISTEA: Greater regulatory coordination between transit and local land use planning focused on TOD outcomes, Projects still occur on a one-off basis when markets support development Combining transit, land use and benefits TOD 1.0 TOD 2.0 TOD 3.0 Transit A. Route Alignment B. Station Location C. Station Area 1. Route Alignment 2. Station Location 3. Station Area 1. Route Alignment 2. Station Location 3. Station Area 4. Land Assemblage 4. Land Assemblage Real Estate A. Land Assemblage B. Infrastructure C. Vertical Development 5. Infrastructure 6. Vertical Development 5. Infrastructure 6. Vertical Development 7. Livability Benefits Livable Communities Era: Transit investments are aligned with real estate development potential. TOD can generate corridor-wide livability benefits via corridor-wide financing tools 7

The goal of TOD is to produce livability benefits Category Livability Benefits Category Livability Benefits Mobility Housing Environment and Heath Public Space Pedestrian/Bicycle improvements Parking Local shuttles Car/bike sharing facilities Low-income housing Workforce housing Supportive housing Site remediation Air quality programs Water resources Habitat preservation Walking/Obesity Wellness programs Open/green space Recreation/active space Community Gardens Streetscape enhancements Trails Façade enhancements Historic structure preservation Arts and Culture Services Economic Development Education Infrastructure Street/Sidewalk cleaning service Increased police patrols / Ambassador force Farmers markets Other social services Job training Business development District marketing Kindergarten / Daycare / After-school services Charter Schools Magnet Schools Public Schools School facility improvements Community facility construction Undergrounding utilities Upgrading infrastructure Alternative energy production 1 5 but not the same benefits in every station Category Livability Benefits Category Livability Benefits Mobility Housing Environment and Heath Public Space Pedestrian/Bicycle improvements Parking Local shuttles Car/bike sharing facilities Low-income housing Workforce housing Supportive housing Site remediation Air quality programs Water resources Habitat preservation Walking/Obesity Wellness programs Open/green space Recreation/active space Community Gardens Streetscape enhancements Trails Façade enhancements Historic structure preservation Arts and Culture Services Economic Development Education Infrastructure Street/Sidewalk cleaning service Increased police patrols / Ambassador force Farmers markets Other social services Job training Business development District marketing Kindergarten / Daycare / After-school services Charter Schools Magnet Schools Public Schools School facility improvements Community facility construction Undergrounding utilities Upgrading infrastructure Alternative energy production 1 6 8

TOD s Take Many, Many Years To Create Value Requiring a different approach To realize value In a shorter time frame Leveraging infrastructure upgrades With multiple, smaller investments Reducing risk and generating returns.. Recognize that theoretical TOD process. Regional Planning Transit Route Selec3on Transit Sta3on Planning Transit Delivery District Planning Land Use Planning Infrastructure Investment Site Acquisi3on PreDev TOD Delivery 1 8 9

In reality is itera3ve, non- linear, and loca3on- specific Regional Planning Transit Route Selec3on Regional Planning Site Acquisi3on Land Use Planning Infrastructure Investment PreDev TOD Delivery Transit Sta3on Planning District Planning Site Acquisi3on PreDev Transit Delivery TOD Delivery Land Use Planning Infrastructure Investment PreDev TOD Delivery 1 9 So Many Plans; So Many Stalled TOD projects Primary step Transit Facili3es Land Use Plans District Management Standard Real Estate Evalua3on Affordable Development Evalua3on Decision makers FTA Transit agency board Agency planners and consultants Regional Gov City Gov Regional Gov State Gov City Gov Redev. Agency Property owners Investors Investors/ Lenders Developers Architects Contractors Regulators Investors/ Lenders Developers Architects Contractors Regulators Advocates Decision criteria Least cost per passenger Popular vote District reps GHG Trips Affordability Economic Development NIMBY 50% of property owners see posi3ve ROI But for test Economic development Risk adjusted ROI/ROE/IRR % AMI Funding qualifica3on requirements Community needs assessments Decision Dming 10+ years 3-5 years 2 years 6-9 months 6-18 months 2 0 1 0

Multiple Bottom Lines Primary step Transit Facili3es Land Use Plans District Management Standard Real Estate Evalua3on Affordable Development Evalua3on Decision makers FTA Transit agency board Agency planners and consultants Regional Gov City Gov Regional Gov State Gov City Gov Redev. Agency Property owners Investors Investors/ Lenders Developers Architects Contractors Regulators Investors/ Lenders Developers Architects Contractors Regulators Advocates Decision criteria Least cost per passenger Popular vote District reps GHG Trips Affordability Economic Development NIMBY 50% of property owners see posi3ve ROI But for test Economic development Risk adjusted ROI/ROE/IRR % AMI Funding qualifica3on requirements Community needs assessments Decision 3ming 10+ years 3-5 years 2 years 6-9 months 6-18 months 2 1 1. Expand the geography Investments and Benefits Objective: Investments by public sector return 3x or 4x in resulting benefits to the community Strategy: Improve safety; upgrade neighborhood and jobs (shuttles; open space; schools; day care) expand benefits.. Tactic: Expand corridor to increase affordable housing zone, expand private partnerships more families, more units, less subsidy/unit, better mix of unit types 11

Let the circle morph into a real district Objective: Expand the funding and benefit base Strategy: Broader approach than 1/2 mile circles Tactic: Derive the District boundaries with property owners, businesses and residents Proposed Bayfair BART Station and District San Leandro, CA 1 2

2. Dig up the data Classic Mixed-Use Redevelopment Transitional Retail Transitional Employment 1 3

Linking Race, Education, Housing, Jobs, Open Space Denver Equity Atlas 1 4

3. Find the Nuggets Northern Liberties/Piazza at Schmidt s Philadelphia s Northern Liberties Makes List Of America s Top Hipster Neighborhoods Piazza at Schmidt s is the New Nugget 1 5

4. Forge Districts and Mini-metrics Rows represent years 1982 1983 1984 1985 1986 1987 1988 Heights of rectangles represent each event s implementation duration (when data was available) NW Triangle Plan "Pearl" District Coined PDC Control of Union Station Central City Plan Feasibility Study HUD Grant for Streetcar Pearl Lofts HSP Purchase of Railyards Housing Strategy River District D- Plan City Lofts FTA Funding Streetcar RFP Hoyt Common Irving Street Townhome Pearl Townhomes Irving Street Lofts Alignment Identified Events are color coded by type of event Each station area event is in a unique column Plan Deal Infrastructure New Development Renovation New Affordable Dev. Amentities Funding District 3 1 Messy Station Area Plans, Funding Cycles, etc. NW Triangle Plan "Pearl" District Coined PDC Control of Union Station Central City Plan Feasibility Study HUD Grant for Streetcar Pearl Lofts HSP Purchase of Railyards Housing Strategy River District D- Plan City Lofts FTA Funding Streetcar RFP Hoyt Common Irving Street Townhome Pearl Townhomes Irving Street Lofts Alignment Identified Pearl Court The Yards - Ph1 Chown Pella Hoyt Street Development Agreement McKenzie Townhomes Modern Confectioners Building PNCA Campus Tanner Park Plan Riverstone Condos Housing Strategy Update Powells Expansion Weiden+Kennedy River District Urban Renewal Agency Yards - Phase 2 Streetcar Construction Lovejoy Viaduct Project Option on Neighborhood Park Buy Brewery Blocks Pedestrian Bridge Jamison Park Tanner Place Johnson Street Townhomes Kearney Plaza Lovejoy Station Streetcar Lofts The Gregory Pearl District Plan Brewery Blocks Marshall Wells Whole Foods Opens The Edge Bridgeport Condos 10th & Hoyt Burlington Tower REI Park Place The Avenue Station Place South Pearl Tanner Park The Lexis The Pinnacle The Elizabeth The Henry The Louisa Rite Aid Crane Building Gerding Theater The Sitka The Metropolitan The Casey The Wyatt The Encore Safeway North Pearl District Plan The Encore 937 Condominiums Waterfront Pearl The Ramona PPS @ Ramona Fields Park 1982 1983 1984 1985 1986 Plan 1987 Deal 1988 Infrastructure 1989 New Development 1990 Renovation 1991 New Affordable Dev. 1992 Amentities 1993 Funding 1994 District 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3 2 1 6

5 36 5 5 1 1 19 1 6 1 1 1 # 2 1 1 4 4 1 9 1 2 4 1 5 1 1 6 1 4 10 1 4 9 5 5 5 5 4 1 4 2 6 # 2 3 4 1 4 1 7 7 5 5 4 8 5 1 4 1 6 8 1 5 # 5 4 9 5 1 4 9 2 1 8 8 2 9 5 1 4 9 5 2 3 5 5 7 5 5 1 4 9 4 7 5 5 1 2 2 5 5 9 3 3 6 8 5 9 9 9 3 5 5 2 5 7 5 8 5 5 7 5 2 1 4 8 6 3 5 5 5 5 5 8 1 2 2 5 7 6 2 4 5 9 6 8 7 1 9 8 2 10 5 10 1 3 3 5 5 5 1 10 5 9 5 5 5 7 7 9 5 5 5 1 5 9 2 9 5 5 5 5 1 5 5 5 2 2 5 4 8 7 7 3 3 5 8 5 5 5 9 5 5 5 5 5 5 5 4 3 1 5 5 1 2 2 3 3 3 3 3 3 5 5 5 5 5 1 1 1 5 5 5 5 2 8 2 5 9 1 9 5 3 3 3 5 4 7 9 5 5 5 5 9 5 7 9 5 7 8 8 3 2 2 3 5 5 5 5 8 5 5 10 7 7 7 4 5 36 5 5 1 1 19 1 6 1 1 1 # 2 1 1 4 4 1 9 1 2 4 1 5 1 1 6 1 4 10 1 4 9 5 5 5 5 4 1 4 2 6 # 2 3 4 1 4 1 7 7 5 5 4 8 5 1 4 1 6 8 1 5 # 5 4 9 5 1 4 9 2 1 8 8 2 9 5 1 4 9 5 2 3 5 5 7 5 5 1 4 9 4 7 5 5 1 2 2 5 5 9 3 3 6 8 5 9 9 9 3 5 5 2 5 7 5 8 5 5 7 5 2 1 4 8 6 3 5 5 5 5 5 8 1 2 2 5 7 6 2 4 5 9 6 8 7 1 9 8 2 10 5 10 1 3 3 5 5 5 1 10 5 9 5 5 5 7 7 9 5 5 5 1 5 9 2 9 5 5 5 5 1 5 5 5 2 2 5 4 8 7 7 3 3 5 8 5 5 5 9 5 5 5 5 5 5 5 4 3 1 5 5 1 2 2 3 3 3 3 3 3 5 5 5 5 5 1 1 1 5 5 5 5 2 8 2 5 9 1 9 5 3 3 3 5 4 7 9 5 5 5 5 9 5 7 9 5 7 8 8 3 2 2 3 5 5 5 5 8 5 5 10 7 7 7 4 4 4 4 4 1 1 1 1 5 5 5 5 11/22/13 Station Area Productivity Pearl District Beaverton White Flint NOMA North Hollywood 3 3 Productivity Correlated with District Formation Pearl District Beaverton White Flint NOMA North Hollywood District formations 3 4 1 7

5. Link Private Investment with Community Benefits Objective: Achieve buy-in from residents, businesses, developers and institutions Strategy: Establish a sequence of Transit Oriented Investments (TOI) over multiple years Tactics: Government credit enhancements and grants Match property owner assessments with foundation, pension, affordable housing, public agency funds What bets to place where and when? Excellent TOD factors Consider where each station area s submarkets are on the matrix axes Poor Poor Parcel-level development feasibility Excellent 3 6 1 8

Targeted Development Initiatives Excellent TOD factors Poor Catalyze with subsidy Organize Capture value Catalyze with infrastructure (& Capture?) Poor Parcel-level development feasibility Excellent 3 7 6. Market Readiness Identify Financially-Optimal Outcomes (1) Market metrics + (2) Public policies + (3) Development feasibility = (4) Potential Data/Charts by Ian Carlton U C Berkeley 1 9

New Development Feasibility Analysis May be feasible Likely infeasible RESIDENTIAL Building Type Construc3on Type Low Density Wood No Surface Medium Density Wood No Structure Podium Parking Mitchell Golden Triangle High Density Concrete No Below Grade MIXED- USE RESIDENTIAL Medium Density Wood Yes Structure High Density Concrete Yes Below Grade MIXED- USE OFFICE Medium Density Wood Yes Structure OFFICE High Density Concrete No Below Grade Low Density Cinder block No Surface Medium Density Concrete No Structure High Density Steel No Below Grade Blake Beltline Penn NOTE: The results published in this chart represents a basic analysis of development feasibility for each station area. The chart is intended to illustrate the types of projects that may or may not be feasible under current market conditions without public subsidies. For instance, this analysis assumes that land costs are a fixed percentage of development costs whereas land speculation, environmental remediation, or other considerations will impact actual land values. Detailed economic analyses should be performed for individual projects to determine actual feasibility. 3 9 7. Third Party to Maximize Livability Benefits Sustainability Local & Minority Biz Fair Share Housing TOD 3.0 Coordinator ~ Livability Benefits Manager Community Groups Social Equity Workforce Housing 2 0

City Vision + City Actions Must Be Coordinated with Other TOD Players Schools Sustainability Advocates State DOT Transport funds FTA Formula funds New Starts Small Starts Neighborhood Groups Regional gov t Planning & Zoning Permitting Community outreach Land owner Affordable housing Transit agency Development Land owner Planning Construction Joint development Police & Fire Mayor s Offices Housing Social Justice Groups Private developer Proposals Land assembly Entitlements Construction Council Offices Coordinating City LADOT Body Planning Public Works Local & Minority Biz HUD US Treasury LIHTC NMTC Chamber of Commerce Housing Orgs Village Scale (Density + Design) Boulder, Colorado 2 1

MU-D IMS-X BMS-X RMS-X BMS-X IMS-X BMS-X MU-X BMS-X Incremental Community Investments Objective: Achieve buy-in from residents, businesses, developers and institutions what will happen around them and who pays Strategy: Establish a sequence of Transit Oriented Investments (TOI) over multiple years Tactic: Link parallel investments in the community that can come on line as part of planning the transit corridor, when station construction occurs, to project developments, and to district infrastructure upgrades 2 2

East Pearl Street Mixed-Use Redeveloping (MU-X) 2 3

18th and Pearl Mixed-Use Redeveloping (MU-X) 2 4

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Planning / Implementation Continuum Planning Permitting Community Plan Framework Bldg Types Open Space Types Connectivity Parking Options Density / Afford Thresholds Comm Facilities Building (By Right) Access Setbacks / Ht Open Space Landscape Uses Parking Planning / Implementation Continuum Planning Design Consultation Permitting Community Plan Framework Bldg Types Open Space Types Connectivity Parking Options Density / Afford Thresholds Comm Facilities Building (By Right) Access Setbacks / Ht Open Space Landscape Uses Parking 3 3

Planning / Implementation Continuum Planning Transaction Entity Permitting Community Plan Framework Bldg Types Open Space Types Connectivity Parking Options Density / Afford Thresholds Comm Facilities District Infrastructure Streetscape Parks/O Space Shuttles Util / Alt Energy Parking Funding Marketing/Brand Low Int Loans Building (By Right) Access Setbacks / Ht Open Space Landscape Uses Parking Planning / Implementation Continuum Planning Transaction Entity Permitting Design Consultation Community Plan Framework Bldg Types Open Space Types Connectivity Parking Options Density / Afford Thresholds Comm Facilities District Infrastructure Streetscape Parks/O Space Shuttles Util / Alt Energy Parking Funding Marketing/Brand Low Int Loans Building (By Right) Access Setbacks / Ht Open Space Landscape Uses Parking 3 4

Planning / Implementation Continuum Planning Transaction Entity Design Consultation Permitting Community Plan Framework Bldg Types Open Space Types Connectivity Parking Options Density / Afford Thresholds Comm Facilities Specific Area Plans Detailed Use & UD Codes Open Space Network Roads/Ped/Bike Utility Phasing Comm Benefits District Infrastructure Streetscape Parks/O Space Shuttles Util / Alt Energy Parking Funding Marketing/Brand Low Int Loans Master Plan (Dev Agreement) Streetscape Utilities Parks/O Space Circ/Networks Uses / Density Parking Phasing Building (By Right) Access Setbacks / Ht Open Space Landscape Uses Parking Vision + Leadership 3 5

Continues Today For Discussion - Corridor Strategies 1. Expand the geography think beyond station area 2. Dig up the data embrace the new realities 3. Find the nuggets -- talk to residents and business owners; discover the possible gems 4. Forge districts derive the boundaries; set realistic targets/ benchmarks/segments 5. Link private investment with community benefits execute in small chunks 6. Priority for limited public dollars understand market readiness 7. Create momentum -- galvanize stakeholders for the long haul through coordinating entity 3 6