Mixed-Use Development Newsbriefs

National News and Trends
The Great Debate (Over Lifestyle Centers, Mixed-Use Developments and Other Projects)
Affordable-Housing Empire Fuels Developer's Upscale Aims
Mixed Management
Old Warehouses Reborn as City Centers, Homes, Offices
Leading Chicago-Based Real Estate Developers Urban Retail Properties Co. and Landmark Properties Sign Partnership Agreement
Exceptional Mixed-Use Projects CD, Volume 1 Now Available
Mixed-Use Development Conference, November 16-17, 2006, Hollywood, Fla.

Regional News
Scottsdale Aims to Lure Elite Fashion Tenants (With Mixed-Use Project) (AZ)
Hines Forms JV With TIAA-CREF for 340,000-SF San Diego Office Tower (CA)
$1B Mixed-Use Campus Moves Forward With Land Purchase (CO)
Plots & Ploys: A Lifestyle Change (as J.P. Morgan Targets Mixed-Use in Florida) (FL)
Condos, Stores Could Revive Key Intersection (FL)
Developers Fine-Tuning $50M LEED Mixed Use (LA)
Is Columbus Center Up in the Air? (MA)
Marcello Marketplace Eyes October Ribbon Cutting (NV)
Hyde Park Considers a Makeover (That Would Include Mixed-Use Development) (NY)
Christian Themes Found in Neighborhood Plans (That Feature a Mix of Uses) (TN)
Opus West Launches Retail Development (TX)
Auburn Planning Mixed-Use Complex: Development Would Bring Mass Transit Riders Closer to Transit Facilities (WA)

National News and Trends

The Great Debate (Over Lifestyle Centers, Mixed-Use Developments and Other Projects)
Retail Traffic (08/06) Vol. 35, No. 8, P. 34; Popovec, Jennifer

Debate about what constitutes a lifestyle center has swirled around the term ever since its introduction more than a decade ago, eventually prompting the International Council of Shopping Centers to convene a special committee to draft a formal definition. Now, a similar debate is playing out over the definition of mixed-use properties. Among the issues being debated by developers and experts are how many uses a property must have for it be mixed use; whether or not the different uses must be integrated; and whether mixed-use developments must be in urban settings, or if developments anywhere can legitimately use the name. Semantic issues aside, some experts worry that too liberal of a definition could cause the term to be overused, eventually burning out a concept that holds the promise to revitalize blighted urban centers. There is also the fear that mixed-use properties could become carbon copies of each other, though the concept of multiple functions requires developers to tailor their plans to the specific demands of the community. Many analysts believe that developers will see their projects fail if they simply filch a successful design from another community.
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Affordable-Housing Empire Fuels Developer's Upscale Aims
Wall Street Journal (08/22/06) P. A1; Frangos, Alex

Related Cos. owner Stephen M. Ross has long specialized in building such luxury developments as Manhattan's Time Warner Center with profits generated by the company's affordable-housing properties. In fact, an estimated 90 percent of the 37,700 apartments that Related currently owns in 16 states are government-subsidized units. In order to receive government tax credits, Related agrees to purchase and manage a given property and to keep rents affordable for a set number of years. Related then sells the credits to CharterMac, a Ross-founded public company that turns around and sells those credits to investors and pays dividends back to Related. Related management then invests the revenues from the affordable-housing properties into mixed-use developments and upscale projects. Its next target appears to be New York's Pennsylvania Station. Related is now collaborating with Vornado Realty Trust to rebuild Madison Square Garden one block to the west, then raze that arena's current home. In the process, the underground Penn Station would become two connected stations and tall office buildings, condominiums, and retail space would be added. The U.S. government currently distributes about $5 billion in affordable-housing tax credits annually to private development firms, which agree to keep rents artificially low for periods ranging from 15 to 40 years.
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Mixed Management
Commercial Property News (09/06/06) Vol. 21, No. 14, P. 23; Marsha, Amanda

Mixed-use property managers are forced to juggle a number of varying tenant needs. That is because each component of a mixed-use project has different needs and demands, meaning that managers of those properties must find a way to make the entire site run efficiently. Cushman & Wakefield senior managing director Joseph Lagano remarks, "You're always balancing complexities, [and] you have to understand that going in. You have to balance the wants of one with the convenience of another." A single property manager provides the advantage of coordination, giving tenants and others one point of contact. However, there are instances when the needs of mixed-use tenants warrant the use of multiple property managers on a single development. For instance, different types of tenants can have different accounting structures, while others may require different levels of management and service. A property manager might handle the security and HVAC for a project's office space, while a retail tenant in the same complex might prefer to manage its own. Parking is another issue, with retail tenants typically wanting free parking, residential tenants craving secured and even valet parking and office tenants wanting reserved spaces.
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Old Warehouses Reborn as City Centers, Homes, Offices
Investor's Business Daily (09/08/06) P. A6; Gose, Joe

Across the country, Sears, Roebuck & Co. is following a national trend by renovating several of its outmoded warehouse buildings and turning them into mixed-use developments offering everything from offices and housing to restaurants and new stores. Such buildings are usually well constructed and feature everything from large windows to high ceilings that appeal to tenants of varying types. In 2001, for instance, Sears redeveloped its 11-story distribution center in Dallas. Built in 1910, the project is now known as the mixed-use South Side on Lamar complex. Similar mixed-use transformations have been completed in Atlanta and Boston. The latest was the $190 million Midtown Exchange in Minneapolis, which previously was a 1.2-million-square-foot Sears warehouse and now offers a mix of offices, residential units, stores and eateries. It benefited from more than $30 million in grants from government programs, including historic tax credits and tax increment financing. Michael Beyard, a senior resident fellow with the Urban Land Institute, observes, "Adaptive reuse of commercial facilities has been accelerating over the last 10 years. We'll have a temporary pause if the housing bubble breaks, but over the long term it's going to be a continuing phenomenon."
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Leading Chicago-Based Real Estate Developers Urban Retail Properties Co. and Landmark Properties Sign Partnership Agreement
Business Wire (09/13/06)

Urban Retail Properties Co. has formed a strategic partnership with Landmark Properties and will co-develop projects together. Dubbed Urban/Landmark, the venture is set to start work on a half-dozen specific properties, each of which will consist of lifestyle, mixed-use, entertainment and power centers. Among the markets initially targeted are Memphis and suburban Chicago. The alliance has been set up as a limited liability corporation that combines the site selection, planning and retail design strengths of Landmark Properties with Urban Retail's proven expertise in property development, management and leasing. Urban Retail Properties CEO Ross Glickman notes, "We are excited about this joint venture with Landmark Properties and look forward to collaborating on the first of many mixed-use properties slated with Landmark. Our companies' philosophies are similar in that we are committed to developing the best products and services for our clients and retailers."
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Regional News

Scottsdale Aims to Lure Elite Fashion Tenants (With Mixed-Use Project) (AZ)
Arizona Republic (09/13/06) Corbett, Peter

DMB Associates Inc. has traveled to New York's Fashion Week in an effort to lure top-flight tenants to its One Scottsdale mixed-use development in Arizona. The Scottsdale-based firm is spending $1 million on the campaign, which included a VIP reception at the Four Seasons restaurant in Manhattan on Wednesday evening. More than 300 people associated with the fashion and retail industries were expected to attend. One Scottsdale is a $1.5 billion project that will include upscale retail stores, eateries, offices, hotels and more than 1,000 townhouses and condominiums. Dial Corp. recently agreed to build its new headquarters complex at One Scottsdale.
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Hines Forms JV With TIAA-CREF for 340,000-SF San Diego Office Tower (CA)
San Diego Business Journal (08/21/06)

Hines has partnered with TIAA-CREF to develop a 15-story office tower in San Diego's University Town Center submarket. Construction on the 340,000-square-foot project is set to start in this year's October-through-December period, with a spring 2008 projected completion. The project will be part of the 12-acre La Jolla Commons mixed-use development, which will also offer condominiums and a high-rise hotel. The new office building will be the first high-rise office project built in the University Town Center area in the last 15 years.
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$1B Mixed-Use Campus Moves Forward With Land Purchase (CO)
Commercial Property News (09/12/06) Murray, Barbra

In Fort Collins, Colo., Airpark Village LLC has completed its acquisition of the 152-acre Community Airpark property. The deal clears the way for construction to start on Airpark Village, a mixed-use development that will include up to five million square feet of offices, stores, housing, laboratories and other uses. One of the campus' focal points will be research. Developer Lloyd Goff states, "It is national research that we're going after. We're marketing the project nationally to try to get companies to open up branches here for testing." The project also will look to serve the greater Fort Collins area. For instance, a retirement community is planned as one of the project's main components. The entire development is expected to take about 15 years to complete at an estimated cost of $1 billion.
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Plots & Ploys: A Lifestyle Change (as J.P. Morgan Targets Mixed-Use in Florida) (FL)
Wall Street Journal (08/30/06) P. B4; Herrick, Thaddeus; Forsyth, Jennifer S.; Chittum, Ryan

J.P. Morgan Asset Management has paid $150 million for a half-ownership interest in five mixed-use centers in Florida. At the same time, J.P. Morgan's Strategic Property Fund has revealed plans to collaborate with the seller, Casto Lifestyle Properties, to build more mixed-use projects in the future. Such developments typically involve street-level retail, second-floor office space, close-in parking accommodations, plenty of dining options and some housing. While Casto has avoided taking on institutional investors, President and CEO Brett Hutchens says J.P. Morgan has a keen understanding of mixed-use development. Hutchens, who is taking steps to move Casto Lifestyles' projects up to the $100 million-to-$200 million range from its historical range of $50 million to $60 million, says the deal will "expand our access to some of the most dynamic markets in the country for mixed-use lifestyle investment."
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Condos, Stores Could Revive Key Intersection (FL)
Palm Beach Post (FL) (09/13/06) DiPaolo, Bill

Juno Pointe Holdings Inc. hopes to build a mixed-use community on a five-acre parcel that once housed a gas station at U.S. 1 and Donald Ross Road in Juno Beach, Fla. If approved, that site and another parcel to the north will sprout four 60-foot structures comprised of ground-floor retail, office and restaurant space and a total of 98 condominiums ranging in price from $400,000 to more than $900,000. Juno Beach planning and zoning director Damian Peduto says officials will look to ensure that the plans address landscaping, covered walkways, parking and public focal points, considering that the site is the gateway to the town. Realtor Ted Brown says the condo market should rebound by the time the project commences. The Florida Association of Realtors reports a 44-percent drop in condo sales in Palm Beach County in the second quarter from the corresponding period in 2005 and an 8-percent jump in the median price to $215,700 from $199,900 over the same time span.
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Developers Fine-Tuning $50M LEED Mixed Use (LA)
GlobeSt.com (09/04/06) Gore, Connie

In downtown Baton Rouge, La., the 262-room Prince Murat Hotel will be replaced with a $50 million mixed-use project that will feature approximately 400 rental apartments and 20,000 square feet of retail space. The development will have views of the Mississippi River and access to a newly opened hiking and biking trail. Groundbreaking is expected by the end of this year on the nine-building project, which will also hold the distinction of being the city's first LEED-certified development. Baton Rouge has seen its population increase significantly since Hurricane Katrina wreaked havoc on coastal portions of the state. As many as 50,000 evacuees are expected to remain in the city, according to the latest projections.
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Is Columbus Center Up in the Air? (MA)
Boston Globe (08/25/06) Reidy, Chris

In Boston, one of the investors in the proposed $650 million Columbus Center mixed-use project is concerned that the urban village is "at risk" if the Massachusetts Turnpike Authority is unsuccessful in its attempts to renegotiate more favorable terms for its air-rights lease and the state does not consider more public assistance. In a letter to the authority, the investor wrote: "Our ability to proceed with this development without restructuring of lease payments and receipt of necessary state funding is at risk." Due to skyrocketing construction costs, Columbus Center's price tag has soared $26 million since earlier this spring to an estimated $650 million. In just the past three years, deck construction costs have jumped from $54 million to $118 million. Supporters note that it took years to complete the complex permitting process for the development. During that time, critics attacked the project's size, with project developer WinnDevelopment of Boston claiming the immense size was necessary in order to attract investors who would pay for it with private financing. Critics became more vocal when Winn sought public assistance without agreeing to reduce the size of Columbus Center.
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Marcello Marketplace Eyes October Ribbon Cutting (NV)
Las Vegas Business Press (08/22/06) Illia, Tony

Set to debut next month is Marcello Marketplace, a $20 million mixed-use project situated near the North Las Vegas Airport. The 17.7-acre development is being built on county airport land under a 50-year ground lease. The complex will contain both retail, hotel and office space. Among the tenants that have already agreed to lease space in the initial retail building at the site are Del Taco, U.S. Bank and Goodfellas Tavern. Project plans also call for a 30,000-square-foot office complex and a 120-room lodging. The development is the result of a joint venture of Las Vegas Development Co. and St. Louis-based Walpert Properties. Las Vegas Development managing principal Carl Marcello remarks, "For many years, that corner has sat abandoned and blighted. This project is going to make the whole area very prominent."
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Hyde Park Considers a Makeover (That Would Include Mixed-Use Development) (NY)
New York Times (09/13/06) P. C7; Siwolop, Sana

Hyde Park, N.Y., is looking to expand its commercial space while still preserving its small-town feel. In doing so, it hopes to cultivate more home-grown businesses while appealing to tourists. The plan is to create a strong community center. Hyde Park officials and business leaders are currently looking at two large development proposals awaiting approval that aim to make the town more commercially vibrant but that also offer locals more places to meet and work together. Early scrutiny suggests that the two plans' overall goals adhere to the master plan for development that Hyde Park adopted nine years ago and amended in 2005. Lauter Development, the company behind one of the projects, is looking to build a mixed-use project on a vacant 156-acre parcel in town. Dubbed the Club at Hyde Park, the proposed community would feature a combination of retirement housing, a large inn and spa, and an outdoor theater for live performances. The second project would be spearheaded by Gagne Development and the Baker Companies, which are looking to build a pedestrian-friendly, urban-style "village" on a separate site locally.
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Christian Themes Found in Neighborhood Plans (That Feature a Mix of Uses) (TN)
Tennessean (09/08/06) Booth, Charles

Developer Joe Swanson of Swanson Developments is building Christian-themed mixed-use developments in Middle Tennessee. These communities and their streets have Biblical names and entrances that resemble churches. Kingdom Ridge in Murfreesboro, for instance, has white pillars at the Covenant Street entrance, leading to homes priced from $130,000 to $250,000. Swanson adds that his developments will not have bars, massage parlors and other businesses "that would be damaging to people's character." While Swanson views faith as an amenity, Vanderbilt University management associate professor Jennifer Escalas says Christians who do not want to publicly advertise their faith could be turned off by the religious names, as could potential buyers of other belief systems. Another development with a religious name is being undertaken by Ashby Communities in Williamson County, featuring homes priced at $400,000 and up. However, developer John Powell says the community is named King's Chapel because of the restored chapel on the site, not for religious reasons.
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Opus West Launches Retail Development (TX)
Houston Business Journal (09/11/06) Dawson, Jennifer

Opus West Corp. has begun building a 56-acre mixed-use project in Houston. Dubbed The Crossing at Fort Bend Parkway, the development will boast a mix of stores and restaurants as well as an apartment complex. Home Depot has signed on as an anchor tenant and will operate a 100,000-square-foot store at the site. The Crossing's retail component will be ideally situated to serve both The Crossing's apartment tenants, as well as the myriad of new residential communities in the southwest part of the city. Opus West is looking to become a major real-estate player in Texas. Over the next couple of years, the Minneapolis-based firm is set to work on approximately 3 million sq. ft. of retail development in the Austin, Dallas and Houston markets.
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Auburn Planning Mixed-Use Complex: Development Would Bring Mass Transit Riders Closer to Transit Facilities (WA)
King County Journal (WA) (09/09/06) Archbold, Mike

In Washington state, Auburn currently is searching for a developer to erect a transit-friendly, mixed-use project near the Auburn Sounder mass-transit station. The development is being encouraged both by city officials and King County Metro Transit, with the chief aim being to bring mass transit riders closer to transit facilities. In return for building the project, the county will agree to purchase 100 parking stalls from the builder, which would be available for transit use during daytime hours and support the new mixed-use development in the evening. Dubbed Transit Oriented Development, similar plans have worked well near transit facilities in such Washington cities as Bellevue, Redmond, and downtown Renton.
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