Mixed Use Development Newsbriefs

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National News and Trends
Sierra Club Could Gain Allies as It Steps Up on Behalf of Some Builders

Regional News
Mixed-Use Project Proposed (AZ)
'Infill' Project Builds Anaheim Up, Not Out (CA)
Downtown Project in El Cajon Gets OK (CA)
Buzzards Point Condos Planned (DC)
Commission Approves Fallschase (FL)
Atlanta Gambles on Atlantic Station (GA)
In Chicago, Major Mixed-Use Project Breaks Ground (IL)
Soleil Developers Eye Another Site at Crabtree (NC)
Mixed-Use Development Set for Barelas Neighborhood (NM)
In Transit (PA)
Developer Eyes South Fayette (PA)
JV Plans $165M, 42-Story Murano Condos on Market Street (PA)
Apartments, Condos Could Turn Downtown Pittsburgh Into a Popular Place to Live (PA)
Highway Project Will Open Up 40 Prime Acres (RI)
Still Struggling After '80s Bust, Downtown Tries to Woo Families (TX)
Several Properties Near Fort Belvoir Seem Ripe for Office Development (VA)
Running a Seattle-Area Mall as a Family Business (WA)

National News and Trends

Sierra Club Could Gain Allies as It Steps Up on Behalf of Some Builders
Wall Street Journal (11/30/05) P. B4; Carlton, Jim

The Sierra Club, a San Francisco-based nonprofit environmental group that has long opposed massive residential developments, now is voicing support for several housing projects across the country. The organization's "Guide to America's Best New Development Projects" praises builders of mixed-use residential, commercial, and retail projects. For example, the guide lauds the replacement of a former Atlanta steel mill with upwards of 5,000 dwellings. The Sierra Club insists that developments built on existing urban land minimize sprawl. The endorsement of mixed-use development could give the group a political boost, considering that builders have many government connections. However, it has pitted the Sierra Club against neighborhood activists that continue to fight residential projects.
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Regional News

Mixed-Use Project Proposed (AZ)
Arizona Republic (12/01/05) Purtill, Corinne

A parcel of land that Wal-Mart once owned in the Ahwatukee Foothills region of Arizona could become the site of an ambitious mixed-use development. Late last month, the Ahwatukee Foothills Village Planning Committee was given its first glimpse of the 1.5-million-square feet project that Parkway Cos. is proposing. Dubbed Parkhouse50, it would include a mix of high-end condominiums, offices, restaurants, public parks and art galleries. This would be the first project of its kind in the Valley region. Larry Lazarus, a lawyer representing the development group, remarks, "It affords people an opportunity to have an urban environment without necessarily having to live downtown." Preliminary plans call for a half-dozen eight-story buildings with ground-floor retail space and condos on the upper levels. Each structure would be topped by a luxury penthouse. A seventh building is also in the works and would contain a supermarket. A first-quarter 2006 groundbreaking is the goal, with the first residential units ready for move-in by the fall of 2007.
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'Infill' Project Builds Anaheim Up, Not Out (CA)
Investor's Business Daily (12/02/05) P. A8; Mandaro, Laura

Increased demand for housing and the scarcity of developable land have developers turning their attention to infill construction. Michael Buckley of Columbia University's Center for High Density Development explains, "You cannot possibly keep expanding at the edge, so you have to 'densify' in these underutilized sites, and that means infill." One such redevelopment project is in the works in Anaheim, Calif., a suburb that is looking to create a downtown. The city has given the okay to a mixed-use development featuring retail space and 11 high-rise condominium towers. While the concept of infill has been around for years, it is seeing new interest. Notes John McIlwain of the Urban Land Institute, "You've always had younger professionals liking the city, because that's where the action is. Now, you have a new group, the baby boomers, who are drawn in by the fun of the city." Infill developers typically benefit from faster approvals, since they do not have to undertake traffic or environmental studies or build new infrastructure.
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Downtown Project in El Cajon Gets OK (CA)
San Diego Union-Tribune (12/15/05) Neely, Liz

City officials in El Cajon, Calif., have voted unanimously in favor of Priest Development Corp.'s Corners Promenade mixed-use project. The development will add three new commercial buildings to El Cajon's downtown district--including new offices, stores and a restaurant. The decision came one day after the development received unanimous approval from the El Cajon Planning Commission. Local officials concede that it is a rare occasion when both decision-making boards consider a single project in the same week. An exception was made this time because there was room on the two groups' agendas and city officials were already familiar with the Corners Promenade proposal. The development will include two one-story structures and one three-story building. Together, these properties will add approximately 31,000 square feet of leasable space to the downtown corridor.
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Buzzards Point Condos Planned (DC)
Washington Post (11/18/05) P. D4; Hedgpeth, Dana

Walnut Street Development hopes to build a mixed-use project that will contain 90 condominiums and 20,000 square feet of ground-floor retail space in the Buzzards Point neighborhood of Southwest Washington, D.C. The residential units, some of which would overlook the Anacostia and Potomac rivers, are slated for completion in 2008 and will priced at approximately $500 per square foot. The developer expects the project to spark additional housing development in what AMR Commercial Real Estate senior vice president Arthur Benjamin calls "the new downtown." Walnut Street is still in the process of purchasing the land from investor Duane Deason, who bought it in 2004 for $275,000 and plans to either retain an interest in the site or sell it outright for $8.3 million.
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Commission Approves Fallschase (FL)
Tallahassee Democrat (FL) (12/07/05) Burlew, Jeff

Commissioners in Leon County, Fla., have given the okay to AIG Baker Shopping Center Properties to build 757 homes and an equal number of multifamily units on 700 acres off Mahan Drive and Buck Lake Road. The Fallschase mixed-use development has been in the works for three decades, but financial problems and concerns about flooding and pollution resulted in delays. In order to secure the approval, AIG Baker reduced the project's retail space to 750,000 square feet from 850,000 sq. ft., scaled back the office space to 35,000 sq. ft. from 50,000 sq. ft. and lowered the number of homes surrounding Buck Lake to 30 from 80. Construction could begin as early as the middle of next year.
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Atlanta Gambles on Atlantic Station (GA)
National Real Estate Investor (12/05) Vol. 47, No. 12, P. 14; Woods, Walter

The 138-acre Atlantic Station mixed-use development is one of Midtown Atlanta's great success stories. Built on a former steel mill, the project has proven to be a solid performer on several fronts. For one, its 22-story office tower is 94 percent occupied; while two residential condominium projects on site are sold out. A third condo building was 80 percent sold as of press time. Additionally, sales at two of Atlantic Station's retail sites--Dillard's and AnnTaylor Loft--have met or surpassed initial projections. However, doubts remain concerning plans to add up to 6 million square feet of new office space at Atlantic Station, while others are worried what will become of the project's condos should the residential property bubble bursts, as some predict it soon will. But Atlantic Station CEO John Whitaker notes that the submarket's 15.5-percent office vacancy rate has fallen 10 percentage points in 18 months. Mixed-use developments such as this are relatively new to Atlanta. Atlantic Station boasts the metro area's only IKEA store, along with an 800,000-sq.-ft. retail village and more than 1,700 condos.
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In Chicago, Major Mixed-Use Project Breaks Ground (IL)
Interior Design (11/05) Beautyman, Mairi

Groundbreaking commenced late last month on a major mixed-use project on Chicago's Loop. The design firm Gensler is serving as architect for the 400,000-square-foot retail, entertainment and transportation component of the facility, which will also boast an undisclosed number of offices, residential units and an upscale hotel. A ground-level broadcast studio also factors into the mix. Perkins + Will has agreed to serve as architect of the office portion, which should be completed in the fourth quarter of 2007. The retail, entertainment and restaurant portion should be up and running the following spring. Gensler project director Grant Uhlir comments, "It's got all of the components to become a major city icon. There's no doubt it will make downtown even more attractive to workers, residents and visitors."
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Soleil Developers Eye Another Site at Crabtree (NC)
Triangle Business Journal (12/12/05) Jones, Amanda

In Raleigh, N.C., the Soleil Group is in negotiations to acquire a 40,000-square-foot office building that would be demolished to make way for a mixed-use project. Dubbed the Soleil Center, the proposed development would include 254 hotel rooms, 54 condominiums, a spa, an eatery and a parking garage. When completed in the summer of 2007, the complex would hold the distinction of being the city's tallest structure. Soleil officials note that demolishing the office building would provide better access for vehicles to the property and allow for the project to have a Glenwood Avenue address. The Soleil Group developed a 42-story, mixed-use project nearby in Crabtree Valley.
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Mixed-Use Development Set for Barelas Neighborhood (NM)
New Mexico Business Weekly (12/09/05) Roedel, Abby

A development team is planning to give an area in Albuquerque's southwest Barelas neighborhood a much-needed economic boost. Plans are in the works for a 13,000-square-foot mixed-use project there, which would include residential units and three commercial buildings. The partnership, which includes Yates Drilling Co.'s real estate division and SG Properties LLC managing member Sean Gilligan, report that the commercial portion of the project will feature a mix of retailers that will benefit the residents. The City of Albuquerque currently owns the site of the proposed development. However, the team of developers is expected to close the deal for the property by the end of the month. Under terms of the deal, Yates Drilling's Zydeco division will pay a portion of the sales prices for the property while it is being built out, then pay the full amount once the project is finished. Joni Miller, a Zydeco project administrator, remarks, "We've been trying to get this project going since July."
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In Transit (PA)
Pittsburgh Business Times (12/12/05) Curry, Jennifer

In Pennsylvania, the Port Authority of Allegheny County hopes to solve its budget woes by partnering with private developers to create mixed-use transit villages. These developments involve the construction of housing and retail space near transit stations and already have achieved success in cities such as Charlotte, N.C., and San Francisco. A pair of like projects are in the works in Pittsburgh, and the approval of Transit Revitalization Districts by state lawmakers could push them along. Under the TRID program, transit authorities can take a share of the tax revenue generated by developments within one-half mile of transit stations. Additionally, communities have access to $75,000 in grant money to facilitate the planning process, provided that they match 25 percent of the funds locally. In Pittsburgh, there are plans to build 150 to 200 apartments and 42,000 square feet of retail space above a park-and-ride lot in Castle Shannon. Development also will occur above the transit station in Mount Lebanon, but specific plans have not yet materialized.
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Developer Eyes South Fayette (PA)
Pittsburgh Business Times (12/05/05) Schooley, Tim

EQA Landmark Communities LP has started marketing its newest endeavor, a mixed-use, "lifestyle-retail" project located on a brownfield where Interstate 79 and Route 50 intersect in South Fayette. Pa. The company envisions a mix of 220 single-family houses and townhomes, 250 rental units and retail on the 75-acre former industrial tract. In all, Newbury Market would encompass 600,000 square feet. While there are three other lifestyle developments going up nearby--Collier Crossing, Southpointe II in Cecil and Settler's Landing in Robinson--EQA President Brett Malky does not view Newbury Market as a competitor for the Collier project, which lacks a housing component, although he does expect some overlap in tenants. "Our concept is truly mixed use," he insists. "We think the greatest opportunity is mixed use." Early estimates suggest that Newbury Market could be open for business by next fall.
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JV Plans $165M, 42-Story Murano Condos on Market Street (PA)
GlobeSt.com (11/22/05) Thomas, Marita

A joint venture of Philadelphia-based P& A Associates and Thomas Properties of Los Angeles intends to build high-end condominiums at the corner of Market Street and N. 21st Street in Philly's Center City neighborhood. The units will range in size from 742 square feet to more than 2,000 sq. ft. and in price from $300,000 to $2 million. Besides the 302 condos, the 42-story tower will host 9,000 sq. ft. of retail space--perhaps a restaurant or a home furnishings store. While he admits to being slightly worried about a glut of condos in Center City, Randy Scott of Thomas Properties says, "We're optimistic that we're at the beginning of the trend, and this location is ideal and ripe for residential development."
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Apartments, Condos Could Turn Downtown Pittsburgh Into a Popular Place to Live (PA)
Pittsburgh Post-Gazette (12/16/05) Gannon, Joyce

Numerous housing projects are in the works in downtown Pittsburgh, aiming to attract young professionals and empty nesters who desire an urban lifestyle and want to be close to jobs or cultural amenities. The old Union National Bank building, for instance, is being transformed into 61 luxury condominiums and an 82-unit residential tower is being erected near the Monongahela River. Additionally, Millcraft Investments hopes to convert the vacant Lazarus-Macy's department store into a mixed-use complex of condos and retail space. Though parts of the city remain blighted, these revitalization projects are expected to turn the area into a thriving downtown. Retailers, restaurants and other businesses will likely come to the area as the number of downtown residents rises.
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Highway Project Will Open Up 40 Prime Acres (RI)
Providence Journal (RI) (11/30/05)

Panelists at a CB Richard Ellis/New England commercial property conference this week reported that approximately 40 acres of land will become available once Route 95 is relocated through downtown Providence. Development of this property, largely on the Rhode Island city's waterfront, will provide an extremely rare opportunity to attract businesses that create jobs and add to the tax base. Panelists noted that while the land will not be transferred to private owners until at least 2010, the process should start soon to decide who will have control of the area, what infrastructure will be needed to support development, and what--if any--design standards will be adopted. Providence Mayor David N. Cicilline is envisioning mixed-use development that will deliver an "18-hour neighborhood" of businesses, residences and public sites. Michael McMahon, executive director of the Rhode Island Economic Development Corporation, adds that the area could provide space for firms with 250 or more employees that would compete with available buildings and land in Massachusetts' Route 495 highway corridor. He stresses, "This is not a land grab, [and] no free land will be given to anyone. It will be purchased at market and [the proceeds will be] put into the highway trust fund."
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Still Struggling After '80s Bust, Downtown Tries to Woo Families (TX)
Wall Street Journal (11/28/05) P. A1; LeVine, Steve

Dallas is one of several cities looking to capitalize on the country's growing appetite for condominiums and urban living. The city has doled out nearly $160 million in grants and tax incentives to create a residential haven of sorts for those seeking to escape the sprawl that has come to characterize Dallas' suburban markets in recent years. City officials hope to attract a critical mass of approximately 10,000 downtown residences and also are taking steps to woo retailers that will support these residents with goods and services. The plans do not call for gobbling up downtown Dallas' top office properties, although city planners hope these various commercial towers eventually will become islands unto themselves in the middle of a bevy of apartments, condos and stores--often in mixed-use settings. The stakes are high. If this plan fails, the downtown corridor could be faced with long-term blight with city residents increasingly reluctant to pay higher taxes for another revitalization game plan. Moreover, it is still unclear if downtown will have any appeal to families, as that area has no elementary schools and few--if any--playgrounds. Recently, Dallas agreed to its largest payout in city history--$70 million toward a more than $200 million renovation of nine blighted downtown buildings by Forest City Enterprises, which is looking to develop nearly 840 rental apartments and for-sale condos.
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Several Properties Near Fort Belvoir Seem Ripe for Office Development (VA)
Washington Post (12/05/05) P. D1; Silverman, Elissa

With land becoming increasingly scarce in the closer-in Washington, D.C., suburbs, more and more commercial developers are shifting their focus to Southeast Fairfax County, Va., as the next hot market for new office construction. Office development, largely for technology companies and government contractors, is one of the cornerstones of the county's economic strategy. So, too, is mixed-use development. Even flourishing businesses are getting lucrative offers from developers to have their stores or facilities replaced with commercial office complexes or a mix of housing, stores and offices. One of the prime targets has been Smitty's Building Supply, a popular lumberyard near Fort Belvoir that has received numerous offers for its land. JPI recently filed to amend the county's growth plan so it can erect 500 residential units, offices, and retail space on a 25-acre parcel around Smitty's. Smitty's co-owner Rick Smith says he believes additional mixed-use development would be a good replacement for his family business should he and his brother, Scott, opt to sell. He remarks, "Maybe we could name a street after our mother and father."
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Running a Seattle-Area Mall as a Family Business (WA)
New York Times (12/07/05) P. C8; Pristin, Terry

Bellevue Square is a Bellevue, Wash., success story. Ever since its grand opening in 1946, the property has been the only shopping mall owned and managed by the Freeman family. In turn, this has made it one of a very few successful family-run malls nationwide. Six decades later, Bellevue Square now boasts over 200 stores; and the Kemper Development Co., majority-owned by Kemper Freeman Jr. and other family members, recently opened the mixed-use Lincoln Square project nearby. Kemper Development acquired Lincoln Square, which contains street-level retail, after an investment fund managed by Lend Lease Real Estate Investments was unable to complete it. The complex now boasts a multi-screen movie theater and a 337-room Westin Hotel and ultimately will feature 148 condominiums, a 525,000-square-foot office complex and approximately 310,000 sq. ft. of shops and eateries. Freeman, though, faces competition from Schnitzer Northwest, a Washington-based property firm that plans to open the $400 million Bravern complex a few blocks from Bellevue Square and compete for tenants. The mixed-use project will include roughly 130,000 sq. ft. of street-level retail space.
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