Development Magazine Winter 2012

Development - Ownership

Navigating Project Expansion During a Recession

RTKL designed the apartments to the specifications of Columbus Realty Partners, apart from The Beck Group and JPRA. This required review of two sets of initial objectives and reconciliation of two distinct designs before the project began.

Deciding to add another phase to a development project is a daunting task in the best of times; doing so during a recession is something else altogether. Domain II, developed by The Simon Property Group, is a large, mixed-use development in Austin, Texas, completed by a group of firms that worked through an unstable economy, construction and design challenges, and local community concerns.

Domain II contains 480,000 square feet of shops and restaurants, 78,000 square feet of office space and 438 apartment units. Totaling nearly 800,000 square feet, the project is twice the size of Domain I, Simon’s original job, on an adjoining site.

The Beck Group, a 100-year-old international architectural design and construction firm, was awarded the Domain II project in 2007 as architect of record and general contractor, shortly after completing construction of Domain I. Beck, along with commercial design architect JPRA, residential architect RTKL, landscape architect TBG and civil engineer Bury + Partners, were integral to the successful completion of Domain II.

Development projects of this scale pose numerous challenges, and Domain II was no exception. They included:

  • Site perimeter limitations;
  • National economic instability that began after the project was in the design and planning phase;
  • Simultaneous construction of residential units above commercial space; and
  • Developing in an active home-owner community.

Designing Around Site Limitations

the plaza at Domain II

The Beck Group’s work on the plaza hardscape, landscaping, rain garden, interactive water feature and multiple fountains were integral to the visual appeal of the project.

The Domain II project called for nine buildings on approximately 30 acres — two parking garages, three retail/residential properties, one retail/office structure and three retail anchor buildings. The site was adjacent to an avenue that serves the Domain I project, a set of heavily used railroad tracks and a major thoroughfare. As the site perimeter was inhospitable to pedestrian activity, the initial development plan called for Domain II to face inward. The emphasis would be on the pedestrian experience, with shoppers, diners, office workers and residents reaching their destinations via an intimate plaza, and buildings turning their backs to the site perimeter.

Because of an electrical easement that ran between Domain I and Domain II, they could not be physically linked. That barrier, coupled with the inward-facing design, meant that Domain II would be a standalone project, distinct from Domain I.

Accommodating Local Residents

Anyone who has executed a large-scale development project in Austin, Texas, can attest that it’s a neighborhood-friendly environment that comes with inherent challenges from homeowner associations, the Texas Bicycle Coalition, strictly enforced impervious surface allocations, water impact provisions and tree ordinances. Fortunately, Bury + Partners, with extensive engineering experience in the City of Austin, was able to secure all of the site development permits. However, the city had recently implemented a new set of design standards, and Domain II was the first project of its scope and complexity subjected to those standards. As a result, construction began later than planned, due to time spent on an extensive series of planning commission and city council meetings, as well as design reviews which resulted in significant changes, such as reorientation of the inward facing buildings to the street, creating the desired street/pedestrian/building relationship. While redesigning the building layout was unexpected, the resulting connection to existing areas did make the project more welcoming.

Domain II mixed-use project

Project design packages were issued individually and approved by the city outside the planned schedule, resulting in partial completion of utilities as building construction began.

To further complicate matters, project design packages were issued individually and approved by the city outside the planned schedule, resulting in partial completion of utilities as building construction began. The greatest challenge involved a long approval process relating to the chilled water system design. Delayed approvals meant that multiple properties were under construction before the first piece of pipe was installed.

Challenges of Integrating Commercial and Residential Elements

Once construction began, the mixed-use nature of the project required coordination between Beck and the construction group working on the apartments above the retail, restaurants and office space. The residential portion of Domain II was under the purview of Dallas-based Columbus Realty Partners, developing and constructing separately from Simon. RTKL designed the apartments to the specifications of Columbus, apart from Beck and JPRA. This required review of two sets of initial objectives and reconciliation of two distinct designs before the project began.

During construction, it became evident that shared responsibility would require intense cross coordination. Beck and Columbus had to agree on a single contractor to complete some of the building enclosures to ensure consistent exteriors. However, interior work had to be performed by two different subcontractors, one specializing in residential interiors, and the other in commercial. As the first group worked above the second, scheduling had to be carefully coordinated; for example, scaffolding on one floor limited work that could be performed on another.

The mix of contractors also affected construction site safety, a top priority for Beck, which applies a rigorous Zero Accident Safety Program to all projects. Beck had the ability to enforce the safety program for the residential portion of the work when crews worked in common areas controlled by Simon. However, once those workers moved to residential areas of the project, their safety standards were set by safety management company Endeavor.

courtyard of Domain II

As a result of new design standards by the City of Austin, significant time was spent in planning commission and city council meetings, resulting in construction delays and major scope changes.

Beck held mandatory daily safety meetings for all of its construction crews, but could not require the residential teams to participate. To promote overall safety for the entire project, Beck reviewed safety concerns at all owner coordination meetings, which included representatives from all parties. It also implemented plans that limited access to common areas, forced personnel and material to specific entrance points, and limited the overlap of residential and Beck-supervised workers.

Recession Brings Scope Changes

Simon provided the financing for the Domain II project, but economic realities during the latter half of 2007 caused significant changes in scope. For example, two smaller-scale buildings containing retail tenants that would have been located up against a larger scale structure were put on hold — the site for one property was filled with landscaping and a parking lot, the other with a temporary parking lot, where a modest building is now under construction. With the overall commercial project managed by an integrated architecture/construction firm, and two full-time architects onsite, this increased the speed at which design and construction changes were implemented and significantly reduced the number of days necessary to process Requests for Information (RFIs) between architect and contractor.

Insights from Mixed-Use Development

One lesson learned from the Domain II project involves the dynamics of a pedestrian plaza versus accommodating automobile traffic. Cars add movement and perceived activity to developments of this type. With cars absent from the plaza that faces the storefronts of Domain II, it sometimes appears to be a less vital environment than that of Domain I. Also, the lack of shop and restaurant visibility to drive-by traffic made it incumbent on Simon to market Domain II as a destination, which it does through such community events as Music on the Plaza.

Secondly, the physical separation of auto-dominated Domain I and pedestrian-oriented Domain II proved to be a larger issue than anticipated. Shoppers and diners who frequent businesses in the original project often don’t explore Domain II, as doing so requires walking across a large parking area which is unappealing to most visitors.

While Domain II faces challenges, the project was completed on-budget. The designs executed by Beck, JPRA and RTKL are complimentary, and Beck’s work on the plaza hardscape, softscape, rain garden, interactive water feature and multiple fountains were integral to the visual appeal of the project. Though the recession did pose initial leasing difficulties for Simon, Domain II is now fully occupied. Today, a portion of the space is leased by tenants not originally envisioned in the tenant mix. As these leases expire, the non-preferred retail/restaurant tenants are being replaced with the originally intended variety of retailers. The project continues to gain momentum and a new hotel is under construction adjacent to Domain II. Domain I and II were first to the table in a very large area of Austin that will soon be redeveloped, and, though distinct, they are both well-positioned to reap the rewards of having arrived early.

From the Archives: Development Ownership Articles from the Previous Issue

Lakeside at Loudoun Tech - Dulles, Va.

Strategically Green - A Smart Energy Retrofit for Office Parks 

Last year the management of Menlo Business Park faced several challenges. In a struggling economy Tarlton Properties, manager of the business park, needed to reduce operating expenses, upgrade the property to retain and attract tenants, prepare the property for energy price volatility, gain greater management control and develop a deeper insight into the operating conditions of each building.

300 New Jersey Avenue, N.W. in Washington, D.C.

Developer of the Year: The JBG Companies - Building a Sustainable Advantage 

The ability of The JBG Companies to analyze and understand dynamic market trends and conditions, as well as its state-of-the-art design and planning processes, have helped it achieve tremendous investment success. Focusing on the Washington, D.C.-Maryland-Northern Virginia metropolitan area, JBG has developed and invested in urban-infill, transit-oriented projects, strengthening the communities in which it works.