Mixed Use Development Newsbriefs

National News and Trends
Banks Might Widen Real-Estate Role
Jones Lang LaSalle Offers Investment Strategies for 2006 (and They Include Mixed-Use)
Fannie, Freddie Have Limited Appetite for Mixed-Use
What Drives TOD? (New Mixed-Use Projects Combat Sprawl Nationwide)
Branch Properties Focuses on Mixed-Use
All Mixed Up and Loving It (as Mixed-Use Furthers the New Urbanism Movement)

Regional News
Reversal of Fortune (With Mixed-Use Projects Helped to Revitalize Several SoCal Markets) (CA)
Consultant to Conduct More Studies at Playa Vista Development (CA)
Growth Angers Some Residents of College Park (FL)
Harborview Plans Could Get Bigger (FL)
Mini-City Would Be an Antidote to Sprawl (in Massachusetts) (MA)
BDC Seeks Developers for Gateway South Project (MD)
Mixed-Use Development Holding Charrette (in Mississippi) (MS)
Back to the City (as Bethlehem Becomes Another Mid-Size Market to Embrace Mixed-Use) (PA)

National News and Trends

Banks Might Widen Real-Estate Role
Wall Street Journal (01/09/06) P. A3; Schroeder, Michael

Bank of America Corp. and PNC Financial Services Group Inc. reportedly have been given the go-ahead from federal regulators to develop and own large office, hotel, and even mixed-use properties, possibly paving the way for banks to take a much wider role in commercial property affairs than simply as lenders. Banking laws traditionally have prohibited banks from owning and developing commercial space unless the structures are predominantly used by bank employees. In the past, regulators also have been reluctant to permit bank portfolios to have a large number of loans in the commercial property market, with the main concern being that a sudden economic jolt could hamstring bank capital. The Comptroller of the Currency recently broadened its interpretation of allowable development activities, though; and Bank of America reportedly was given the green light to develop a 15-story Ritz-Carlton lodging, while PNC was permitted to invest $122 million in a mixed-use hotel-office-condo complex near its Pittsburgh headquarters.
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Jones Lang LaSalle Offers Investment Strategies for 2006 (and They Include Mixed-Use)
GlobeSt.com (01/06/06) Ruda, Mark

In its Investment Strategy Annual note, LaSalle Investment Management dismisses the notion that a bubble is forming in the country's commercial real estate market and is in danger of bursting. According to the firm's report: "The ingredient that would turn today's high commercial real estate prices into a bubble is the possibility of a total collapse in values. We do not see that element at work anywhere in the private direct markets today." Among LaSalle Investment Management's recommendations for the new year are investments in high-quality multifamily housing markets, along with industrial properties in U.S. port cities. Those looking for higher returns are advised by the firm's researchers to look at mixed-use projects that redevelop existing shopping malls.
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Fannie, Freddie Have Limited Appetite for Mixed-Use
Affordable Housing Finance (01/06) Zipperer, John

Congress for the New Urbanism President John Norquist is calling on Fannie Mae and Freddie Mac to finance more mixed-use projects, particularly residential-retail, as such developments often include affordable housing. Officials at both government-sponsored enterprises say they are willing to back mixed-use, provided that the development is primarily residential and the commercial components are compatible and likely to enhance the community. Fannie Mae restricts commercial space to no more than 20 percent of the development's effective gross income and no more than 20 percent of the net rental space, while Freddie Mac simply demands that no more than a quarter of the development's gross income comes from the commercial space. Both companies give developers some flexibility when it comes to downtown projects with ground-floor grocery stores and other such developments. Even so, a number of industry experts doubt that the GSEs will significantly increase their investments in mixed-use development, especially at a time when they are under such political and regulatory scrutiny.
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What Drives TOD? (New Mixed-Use Projects Combat Sprawl Nationwide)
Commercial Investment Real Estate (12/05) Vol. 24, No. 6, P. 22; Hoban, Sarah

Transit-oriented developments (TODs) are popping up all over the American landscape--from urban centers to the suburbs to small towns--spurred by higher gas prices, worsening traffic congestion, people looking to avoid long commutes and communities seeking new ways to combat sprawl. TODs typically offer a mix of housing, stores and offices clustered around a rail station and/or bus transfer point. Many even offer cultural attractions, entertainment venues and green space that appeal to those who opt to live there. Mainly, quality of life is what is driving both employers and home buyers and renters to settle in these developments. Shelley Poticha, head of the Center for Transit Oriented Development in Oakland, Calif., remarks, "There's increasing recognition from the business community that the combination of uncertainty about how to get [people] to work and the difficulty of attracting people to congested regions . . . is a problem. What started out as being an environmental philosophy is becoming the bailiwick of big-business and chamber of commerce groups around the country." Parking is a design challenge of TODs, with developers often resorting to factoring in underground parking and multideck garages in their final development proposals. Additionally, TOD developers often run up against opposition from two other entities: community groups that worry these dense, multi-use developments will bring noise and increased traffic to their neighborhoods; and transit agencies that maintain that land development matters are not central to their overall mission of delivering efficient transit service.
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Branch Properties Focuses on Mixed-Use
Commercial Property News (12/05) Vol. 19, No. 21, P. 25; Gilligan, Eugene

Branch Properties is moving into the mixed-use development arena with its recent acquisition of The Highland Cos. Terms of the deal were not disclosed. Branch Properties officials note that mixed-use projects are becoming especially prevalent in the Southeast, as more and more developers seek partnerships to get such projects off the ground. Branch has been mostly known as a retail developer, while Highlands has long specialized in multifamily housing development. The two companies have collaborated on numerous joint ventures, including the $300 million, mixed-use West Village project in Atlanta's Vinnings submarket. Looking ahead, the company will focus on vertical mixed-use projects that will feature both retail and residential space. Regent Partners President David Allman observes, "It's a fairly logical progression. We're seeing more mixed-use development overall, so vertical mixed-use projects will increase as part of that."
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All Mixed Up and Loving It (as Mixed-Use Furthers the New Urbanism Movement)
National Real Estate Investor (12/05) Vol. 47, No. 12, P. 51

Last year saw a rebirth of mixed-use development as a major tenet of the New Urbanism movement. Those tired of suburban sprawl and fed up with rising fuel prices were turned on by the increase in the number of live-work-walk projects that offer residential, office and retail in the same high-density community. Also on the drawing board of many of these projects have been such non-traditional additions to mixed-use as civic centers, hospitals, senior-citizens facilities and police sub-stations. Now, such retail REITs as Simon Property Group and Equity One Inc. are considering adding multiple uses to projects in their development pipelines to increase their value. Brett J.D. Kratzner, a principal at the architectural firm of Dorsky Hodgson + Partners, comments, "Virtually every project we have worked on in the past year has had at least one other use beyond retail, with residential, office and hospitality the most prevalent. Because of this phenomenon of adding additional uses to retail, usually on top, we have become more attuned and adept at meshing disparate uses into one and making the two or three work as one."
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Regional News

Reversal of Fortune (With Mixed-Use Projects Helped to Revitalize Several SoCal Markets) (CA)
Real Estate Southern California (12/05) Vol. 6, No. 10, P. 16; Cole, Benjamin Mark

It used to be that downtown corridors throughout Southern California were on the decline; but many of these urban areas are now flourishing, and mixed-use development has played a role in that change. As the 1990s progressed, crime rates that plagued these areas in previous decades started to improve and more and more people were getting fed up with long highway commutes and wanting to move closer to their work, to stores, and to cultural venues. The cities have played a major role. Long Beach, for instance, acquired the former Long Beach Mall and sold it to a developer; the result is the 450,000-square-foot, mixed-use CityPlace project that spans eight city blocks and includes a plethora of retail space and 341 residential units. Anaheim, meanwhile, has given the go-ahead to a mixed-use redevelopment project known as Garden Walk. Situated near Disneyland, the project will include retail and restaurant space, hotels, health clubs and a city-financed parking garage. Finally, the City of Ontario is playing a key role in the addition of 272 parking spaces in its Downtown Project Area. There, an urban village is being created that will add 766 condominiums and 72,000 sq. ft. of retail stores to the downtown area.
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Consultant to Conduct More Studies at Playa Vista Development (CA)
NBC4 (Los Angeles) (01/11/06)

In Los Angeles earlier this month, the City Council voted 9-1 to conduct additional groundwater studies before methane mitigation can be approved for the Playa Vista mixed-use project. In doing so, council members have authorized the Chief Legislative Analyst, the City Attorney's Office, and the Bureau of Engineering to hire consultants to measure methane gas levels and look into groundwater issues surrounding the development's first phase. Additionally, the council agreed to hold two public hearings on the matter. Donald Klein, head of the nonprofit Coalition to Save the Marina, commented, "The water table in the Playa Vista marina area is very high and fluctuates with the tidal changes and local storm water. Dewatering was not addressed in the EIR [environmental impact report], and the dewatering itself may cause the intrusion of salt water, and in fact cause more methane gas to permeate the soil and the buildings in this area." The mixed-use project is slated to include approximately 2,600 residential units, 150,000 square feet of stores and another 175,000 sq. ft. of office space.
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Growth Angers Some Residents of College Park (FL)
Orlando Sentinel (FL) (12/29/05) P. H3; Glick, Nancy N.

Developer Jim Kersey is working on a mixed-use development in the Orlando suburb of College Park, with 147 condominiums, retail space and a five-story parking garage slated for 2.3 acres. Such rapid growth concerns residents who do not want additional traffic and high-rise developments to alter their quiet neighborhood. These residents have banded together to block Kersey's latest proposal to erect 82 residential condos, offices, retail space and a four-story parking garage on 1.5 acres between Yale and Harvard streets. Locals oppose the building's height of 75 feet and plans to put commercial space in a largely residential community, and they are concerned that the project could be used as a model for future development. "Things are moving fast, and we need up-to-date master plans that involve the community," says College Park Neighborhood Association President Leza Tellam. "We also have to be sure the city's planning and transportation departments are well-funded and staffed to address development issues." Kersey--who is being criticized for inviting only south side Harvard and north side Yale residents to an early November public meeting--has been ordered to redesign the L-shaped building in order to obtain approval.
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Harborview Plans Could Get Bigger (FL)
Sarasota Herald-Tribune (FL) (01/11/06) P. BC1; Whittle, Patrick

Benderson Development Co. plans to submit changes to the Harborview Development of Regional Impact within a month. The developer originally expected to build 207 single-family homes, 1,020 multifamily units and 1 million-plus square feet of commercial, office and medical space on more than 400 acres in Harbour Heights. However, at a recent meeting with the Harbour Heights Civic Association, the developer indicated plans to expand the mixed-use project. The development could eventually include additional residences and commercial space, a restaurant, a hotel and public and private marinas. Residents expressed concerns about traffic and the burden such a development would place on existing infrastructure.
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Mini-City Would Be an Antidote to Sprawl (in Massachusetts) (MA)
Boston Globe (01/17/06) Palmer Jr., Thomas C.

Cabot, Cabot & Forbes of New England Inc. and New England Development have joined forces to turn 130 acres of an industrial park in Westwood, Mass., into a thriving, mixed-use community. The 4.5-million-square-foot Westwood Station will be located along University Avenue near the Route 128 transit station. The development will include upwards of 1,000 residential units, office space and several retailers. The land has already been rezoned to allow residential and large-scale retail development. However, the exact number of housing units, names of retailers and other specifics will not be released until spring. Westwood Station has earned the support of Douglas Foy, the state's secretary of commonwealth development, who believes people will be drawn to a pedestrian-friendly neighborhood where homes, eateries, shopping, jobs and public transportation are easily accessible.
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BDC Seeks Developers for Gateway South Project (MD)
Baltimore Business Journal (01/11/06) Harlan, Heather

The Baltimore Development Corp. (BDC) this month began soliciting proposals for the redevelopment of Gateway South, an 11-acre waterfront site on the Middle Branch of the Patapsco River. The economic development organization is looking for a team to build a mixed-use development that would bring substantial improvement to this particular area of Southwest Baltimore, as the site is expected to be a catalyst for additional revitalization of the area. Responses to the BDC's "request for qualifications" are due by the end of the first quarter.
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Mixed-Use Development Holding Charrette (in Mississippi) (MS)
Mississippi Business Journal (01/17/06)

A week-long planning workshop for Flowood Town Center in Rankin County, Miss., will be held Jan. 19-25. Flowood Town Center is a $325 million mixed-use project that will include both residential units and offices. It will be completely built over a span of 10 years and will feature approximately 650 residences and between 750,000 and 1 million square feet of office space. The planning workshop, or "charrette," is being held by the project's developer, Neopolis Development Group LLC. This planning session will enable citizens, developers and others with a vested interest in the development to collaborate on an overall vision for the project.
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Back to the City (as Bethlehem Becomes Another Mid-Size Market to Embrace Mixed-Use) (PA)
Allentown Morning Call (PA) (12/18/05) P. A1; Radzievich, Nicole

Bethlehem, Pa., is among the numerous mid-size cities nationwide reporting a boost in condominium development. One of several projects in the works is Lehigh Riverport, which will feature 172 condos, a fitness club and a restaurant. Another proposed mised-use development calls for hotel rooms, condos and shops in an 18-story tower on the city's north side. The recent jump in such construction is being attributed to demand from young professionals who desire an urban lifestyle but cannot afford to live in pricier, bigger cities. Retirees looking for low-maintenance dwellings in close proximity to museums, theaters, restaurants and other cultural amenities are also turning to Bethlehem. One of the city's biggest selling points is its short commute to Bucks County and New Jersey.
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