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Life at the intersection of public-private partnerships, neighborhood regeneration and real estate development.

Saturday, January 31, 2015

How to Maximize the Impact of Neighborhood Investments

Hellllooo Detroiters, PPPers, and those of you who think Tom Brady and the Patriots need to bring in Olivia Pope to deal with Deflate-Gate.
It's not whether or not you cheat.  It's whether you cheat and it can't be fixed by a fixer.
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Executive Summary for my busy PPPers:  Cities, philanthropic organizations and non-profits often take a "Measles" approach (spread a little bit everywhere) or a "Mumps" approach (one big investment in one place) with their neighborhood investments.  Those approaches do not maximize the impact of those investments.  The three things you should do to maximize your impact: 
  • Use Data to Inform Decisions.
  • Prioritize the Outcomes You Seek.
  • Synchronize Your Investments. 
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Full Blog Post:
Today's blog post is called "How to Maximize the Impact of Neighborhood Investments," or as I like to ask people when discussing their investments in urban neighborhoods:

Do you want Measles, Mumps or Impact?

You remember the measles right?  Of course you do, since you now have to worry about getting the measles while hanging with Mickey and Minnie Mouse at Disneyland...


Considering the outbreak, that was an unfortunate choice of dress, Minnie.
Many cities, foundations and non-profit organizations take a "Measles" approach to their revitalization investments:  They sprinkle a little bit here, there and everywhere, and end up with little overall impact or catalytic effect. Their investments kind of look like a measles outbreak:

No, those are not freckles.
You think I'm stretching this analogy? Look at this summary of certain foundation & non-profit investments in Detroit at one point in time:

A little bit to you, and to you, and to you!!
This "Measles" approach surely doesn't lead to sustainable impact or catalytic change.

Conversely, many urban revitalization investments often reflect a "Mumps" approach:  A disproportionately large investment is made in one large-scale project, with the hope that it will spark change throughout the city, or "trickle-down" to other neighborhoods.

No, that's not chewing tobacco:  12 NHL Hockey players and referees contracted the mumps late in 2014. 

This "Mumps" approach has the same "M.O.":  Each deal is an expensive, one-off, custom-tailored suit.  It won't fit any other neighborhood.  And it won't work in the next market cycle.  The "Mumps" approach is not limited to real estate deals, but can also be found in infrastructure projects and government subsidies of company relocations.   Most city-funded sports stadiums are "Mumps" deals that tend to be bad or mediocre investments for the city in the long term.

So, how do you maximize your ROI on neighborhood investments?  How do you create replicable and scalable impact through strategic investments in neighborhoods?

Three things you can do to maximize the impact of your neighborhood investments:
  • Use Data to Inform Decisions. 
  • Prioritize the Outcomes You Seek.
  • Synchronize Your Investments. 
Use Data to Inform Decisions.  You would be surprised how many philanthropic and government investments in neighborhoods are made without the benefit of defensible data.   Neighborhoods are targeted without a quantitative basis for choosing that neighborhood.  Certain types of neighborhood investments (e.g. facade programs) are prioritized without clear data that they catalyze change.  Invest in compiling clean and current data, analyze the data for patterns and associations, and do your market and feasibility homework.  After that work is finished, invest based on what you learn.  Do this right and you are more likely to end up with replicable projects.  A great example of a data-driven approach is the City of Detroit's fight against blight through the data collection, cleaning and analysis efforts of the Motor-City Mapping project led by Data Driven Detroit and Loveland Technologies.

Prioritize the Outcomes You Seek.  Is your #1 goal to improve the housing stock in the neighborhood? If yes, what kind of housing?  Affordable?  Market-rate?  Mixed-Income?  Mixed-Use?  Rental or home-ownership? Single or multi-family? Or is your priority supporting local small businesses and neighborhood supporting retail?  Or are you trying to improve the quality of life in the neighborhood through open space and infrastructure investments? If you look at the resources you've allocated to a neighborhood and your top priorities are not clear, you are almost certainly going to have a limited return on those investments.

Synchronize Your Investments.  Make sure that your investments follow or correlate with other investments in the same geography.  Are there local organizations on the ground making similar or complementary investments?  If you're a city with limited resources (don't you all have limited resources?), strive to invest where there are also philanthropic, non-profit and private sector investment and resources being deployed.   The same rule applies to philanthropic and non-profit organizations -- just because you're mission-driven doesn't mean you need to be an "island of investment" floating by yourself with no partners and no cavalry in sight.  You cannot have the impact you seek if you are the only source of positive activity in a neighborhood! Make sure your investments flow to places where there are community leaders and local organizations that will help make your investments catalytic, rather than just cathartic for your glossy annual report.

Use Data.  Have Priorities.  Synchronize Investments.  That's the way you maximize the ROI on your neighborhood investments.

-- Calvin

*****
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Wednesday, January 14, 2015

Wednesday, December 31, 2014

How to Manage a Retail Pop-Up Placemaking Project


Helloooooo PPP'ers, Detroiters and those of you who've had enough of year-end lists!

Turn Down For What?!  Thanks Spin Magazine. 
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***
It's the last day of the year, so I just wanted to quickly drop the mic on how to manage a placemaking or neighborhood revitalization strategy that uses retail pop-ups as the catalyst for change.

Check out my infographic below.  *Boom*



Let me know what you think!

-- Calvin

*****
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Thursday, November 27, 2014

3 Ways Developers and Land Use Professionals Can Help Urban Schools & Neighborhood Revitalization

Hellooo PPPers, Detroiters, and those of you who are not one of the 20 million people who have already watched the new Star Wars trailer!

The new light saber may help you handle drunk co-workers at the company holiday party.
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Raise your hand if you've been to a conference on real estate development or neighborhood revitalization where one of the key topics was urban schools.

No one?


Okay, well raise your hand if you've been to an conference on urban schools where they've discussed real estate development. 

*Crickets*


Despite the lack of an integrated conversation on these topics, the fates of urban neighborhoods, real estate development and urban schools systems are often intertwined.




Unfortunately, how we discuss these issues -- in separate conferences, hearings and studies - is only part of the problem.  The other problem is the lack of cross-sector accountability. As an example, the schools chancellor is mainly focused on the educational outcomes IN the building -- he or she is not responsible for the effects on the neighborhood if the building is empty. Nor is she responsible for the vibrancy-killing, anti-placemaking effects of hulking school buildings that are a dead zone during evenings and weekends.

The Walking Dead.  Oh wait, not THAT kind of dead zone.

This kind of dead zone.

Empty or underutilized schools are a persistent blight on urban neighborhoods around the country. Public schools aren't the only blighting force in urban neighborhoods, but they are a significant one.  The declining quality of our public schools is directly correlated with an increase in empty or underutilized public school buildings in our urban neighborhoods.  The reasons for the correlations are numerous, and they depend on the city.  The common thread is poor quality public school education causing parents to flee urban public schools and therefore urban neighborhoods.  Many are flocking to urban charter schools (which are public schools, btw) and therefore staying in urban neighborhoods.  However many people are also moving to the suburbs or, when they can afford it, out of emerging neighborhoods and moving to other neighborhoods in their cities which have better public schools.

Why Should We Care?

Let's face it, many of us developers, consultants, land use professionals do not live in the type of neighborhoods where hulking, soul-killing public school buildings are usually located.  Nor do we usually have to send our kids to schools in those neighborhoods.  The state of public school education and public school buildings don't affect our day-to-day lives.  However, a number of us care anyway.  We just do.  With that said, there is a business case for real estate professionals to care about the state of the public school system and its school buildings.  We should care for reasons that go beyond sheer compassion:  Empty or underutilized public school buildings negatively affect the development and retail market in urban neighborhoods, particularly emerging neighborhoods or ones with other challenges.

Here are two ways underutilized public school buildings limit urban neighborhood revitalization:
  1. Debases Your Customer Base. A vacant and/or poorly designed school building will have an effect on who is willing to move to the neighborhood and who will stay.  If you think about the folks who will pay the greatest rents, the people who will pay the highest condo prices and the customers who will pay the most for a cup of coffee (supporting your ground floor retail), they all pick neighborhoods that are not pock marked by poorly lit, out-of-scale and mostly dark, public school buildings.   Moreover, long-time residents of neighborhoods, even if they are of limited means and have less neighborhood choices, may leave for affordable housing in other neighborhoods, if they can find a neighborhood without a public school building eyesore.   To be clear, this debasement of your customer base is not just about the buildings -- the lack of quality education being provided in many of these schools also keeps your ideal renters, buyers and shoppers away, and helps push longtime residents with options out of the neighborhood.  As a matter of fact, the state of many public school buildings is really just a symptom of the larger disease -- poor urban school educational outcomes. 
  2. A Pox on your Placemaking (and your Retail). Residents, developers and investors alike benefit from well-lit, pedestrian oriented places which feel vibrant, safe and welcoming.  As Chris Leinberger and Mariela Alfonzo showed in their seminal Brookings analysis, better built environments --i.e. better places--are directly correlated to higher rents, higher values and better development metrics.  Many of these school buildings and urban schools contribute to the aspects of the neighborhood which are the antithesis to great placemaking -- including poor design, limited pedestrian activity and large, monolithic curtain walls.   If you are thinking about doing a multifamily building with ground floor retail near a public school building, your retailer options often become limited to cell phone stores, fast-food places and miscellaneous shops.  It's all correlated --the school building negatively affects the placemaking near your building, and accordingly limits your retail options. Residents suffer from the limited neighborhood-serving options, and your proforma suffers as well. Poor placemaking and urban design can almost singlehandedly restrict the urban regeneration potential of an emerging neighborhood.
What Can Land Use Professionals, Real Estate Developers and Public Officials Do?
"Do what you do!" is a mantra of many rap songs.  That mantra can also apply to real estate developers and land use professionals when it comes to urban public school education and its buildings.  We're not educational professionals, so we often believe our ability to directly affect public school educational outcomes is limited.  So we usually move on, skip those neighborhoods and ignore those school buildings. But we can do more.

Here are three examples of things we can all can do in the intersection of real estate and public education - and two of them involve "doing what we do":

#1: We can become part of public-private partnerships that redevelop the buildings themselves.
Earlier in this post I called Hine Junior High School a dead zone.  You can see from the pictures below that I wasn't joking. 

One side of Hine Junior High School on Capitol Hill in DC.


This side of Hine Junior High faces retail across the street.
The building is underutilized, hulking and not a positive contributor to placemaking or neighborhood revitalization in the area.  This area of Capitol Hill has boomed in recent years, but for years this building stood tall as a remnant of the not-so-good-ole days.  Luckily, the DC government and a local development team have joined forces to redevelop Hine Junior High into new luxury rental apartments and affordable housing.  It's a public private partnership at work. 

#2:  We can leverage new financing tools to build new schools that will better support the neighborhood.
Developers can partner with cities to redevelop schools into a higher and better use, but they can also help bring new schools to a neighborhood and simultaneously improve public school education and a neighborhood's revitalization efforts.  Forest City development's ground breaking partnership with Johns Hopkins and the City of Baltimore is a great example of how a developer can help catalyze the redevelopment of a neighborhood partially through the building of a new school.

The East Baltimore Development Initiative's revitalization of East Baltimore includes a new charter school.  Graphic courtesy of Gene Thorp, Washington Post. 

#3: We can support our elected officials and legislators in their activities to assist in the redevelopment of urban neighborhood schools.
Developers and land use professionals not only have to make our jackhammers heard but our voices heard as well.  We need to support efforts by our elected officials and legislators that support neighborhood revitalization and the redevelopment of urban schools.  We also need to speak up and push back on legislative or regulatory efforts that make the redevelopment of urban schools harder or less likely.
Developers should help city legislators repeal laws that harm our ability to execute on school building redevelopments like the Hine School redevelopment discussed above.  For example, in DC, Senator Mary Landrieu created a huge stumbling block for the redevelopment of vacant school buildings by secretly passing a law that forces the DC government to give charter schools "a right of first offer" to lease or purchase such buildings at a 25 percent discount.  The law creates unnecessary red tape and does not necessarily focus on the highest and best use for the buildings or the neighborhood's vision for its own revitalization.  Maybe they don't want a new charter school!  The Landrieu law -- and Senator Landrieu may be the Walking Dead herself considering her current political status -- is an example of a law that real estate developers and land use professionals should fight against.

All in all, there is a clear intersection between the fate of our public schools, our neighborhoods and the real estate development market.  We developers, consultants and land use professionals should care, not only because we have a unique ability to help, but also because the fate of public school buildings does have an effect on our pocket books.

Let me know what you think!

-- Calvin

*****
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Wednesday, November 12, 2014

The 3 Things You MUST Consider When Choosing a City Agency Director




IMHO:  You must have at least 2 out of 3 to end up with a great director.  

Let's discuss.

-- Calvin

*****
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Tuesday, November 4, 2014

Convergence of Place and Pace?

Convergence of place and pace? A developer and a fitness chain buy NYC's bikeshare.  What will this mean for this key component of public mobility infrastructure if a private developer owns it? http://t.co/xM1Rb8t3bC 

Sunday, September 21, 2014

The 5 Pillars of a Citywide Revitalization Strategy

Helloooo Detroiters, PPP'ers and those of you who will absolutely, positively, be watching the Scandal season premiere this Thursday!

Will Olivia Pope wear white after Labor Day?

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Here's the Executive Summary of this entire Blog Post for all of you busy PPPer's:

                                         
The 5 Pillars of a Citywide Revitalization Strategy


*BOOM* (I just dropped the microphone and walked off of the stage.)

*****
The 5 Pillars of a Citywide Revitalization Strategy


There’s plenty of buzz these days about the comeback and preeminence of cities.  Bruce Katz has written about it in The Metropolitan Revolution. Edward Glaeser has trumpeted cities in The Triumph of the City:  How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier.

In contrast, two of Mr. Katz’s colleagues, Elizabeth Kneebone and Allan Berube, recently wrote extensively about the epic struggles with poverty occurring in the suburbs. Not only are the suburbs struggling with poverty, they're also struggling with, well, urbanity. As an example, Ellen Dunham-Jones has led the call to have suburbia "retrofitted."  To me, much of that retrofitting seems designed to bring the urban amenities of the city out to the suburban people who fled those same cities! Cities are the new golden child of our country, and the country's population is getting increasingly urbanized.  This is not just a U.S. but a worldwide phenomenon-- the UN announced in June that more than half of the world's population live in urban areas.  It’s almost become axiomatic that the city is the [revitalized] place to be. 

"If I can maaaake it there, I can make it...anywhere!"
What’s discussed less is the “how.”  How are urban cities revitalizing themselves?  What is the one strategy that has brought cities like Pittsburgh, Washington, DC and yes, New York back from the dead?  What’s the silver bullet which will save the day? 
 
The answer:  There isn’t just one strategy.  There isn’t just one plan.   As we discussed in a previous post, there isn’t one silver bullet that works for all cities.   

A successful citywide revitalization strategy is really the synchronization of 5 sub-strategies and plans. 
 
I call these 5 sub-strategies and plans "The 5 Pillars."  The 5 Pillars are the core components of any sustainable and equitable revitalization of an urban city.


The point of this blog post isn't to go into a detailed dissertation on each of the 5 Pillars, but I do want to point out the key activities, topics and issues that tend to fall within each of the Pillars.  Cities will differ on how important is each Pillar -- however, every city will ultimately need a solid foundation for each Pillar.  Each Pillar, is not, however, an end goal itself-- they are only tools to be used to achieve the larger vision for the City.  Accordingly, the creation and implementation of each Pillar-- i.e. each plan and strategy-- must be synchronized, prioritized and designed to achieve the same goal:  the actualization of the residents', Mayor's and City Council's vision for the city.  

Let's briefly discuss each of the 5 Pillars below:
 
Pillar:  Land Use Policy & Zoning.   Cities signal their long-term vision for the city through their land use policies and plans.   However, those land use policies and plans are only as good as the zoning laws and regulations that implement the policies.  Policies are necessary, and nice, but investors and developers want to know what the law says.  They follow the rules, not the suggestions.  Use the combination of land use policy, zoning laws and regulations to signal to residents, stakeholders and the private market where your city is going -- and where you want them to go.   This need for thoughtful follow-through is being recognized by smart policy makers through out the country.  As an example, in Detroit the Kresge Foundation and the DEGC have opened an implementation office to assist the city in moving forward Detroit's land use vision

To achieve a land use vision you have to plan AND implement. 
Pillar:  Housing & Commercial Corridor Strategy.  What type of housing do you want built in your city?  Where do you want these new product types built?  How many units?  By when? By whom?  As your city improves, how will you deal with issues of affordability and equity?  How does your housing strategy deal with your homeless problem (almost every city has one)?  What will the city do, spend and support to achieve these goals?  Commercial corridors in urban neighborhoods either connect or divide communities. What's your revitalization, stabilization or celebration (for thriving corridors) plan for each of your cities' key commercial corridors?  What tools do you have or could create to implement those plans?

Pillar:  Economic Development Strategy.  "It's the economy stupid," a pretty famous guy once said.  It's about jobs! Jobs. Jobs. Jobs. 
No, no, not that Jobs.

It's also about workforce development to help current residents access and compete for those jobs. The plan must include a focus on industries.  What industries can support the needs of your city?  Where can you realistically be competitive to recruit or bolster those industries?  Small business and local entrepreneur support, recruitment and retention are key.  A branding and marketing strategy for the cities' industries and small businesses- both current and desired - is necessary.  But economic development cannot be truly achieved without a baseline quality-of-life for your cities' residents.

Pillar:  Quality-of-Life Plan.  A citywide quality-of-life plan has to have both a citywide and a neighborhood level perspective.  Its key components include implementable strategies on:

  • Public Safety
  • Public Health
  • Open Space/Placemaking; and
  • Blight
A special word on blight.  Many cities are making real strides to eliminate blight in their cities.  I was a working member of the Dan Gilbert-led Detroit Blight Removal Task Force, and it is clear that the eradication of blight in cities requires an interdisciplinary and holistic strategy to achieve long-term success. There are tons of definitions of blight, but in many ways you know it when you see it. 

This is clearly blight on a city.
This is clearly blight on a city too.

Pillar:  Transportation & Mobility Plan.   I often get the feeling that some cities believe that a defined citywide strategy for transportation and mobility is a luxury, something only big boy cities do, not something that every urban city needs.  That sentiment is dead wrong.  A city cannot achieve its' economic development and quality-of-life goals without a forward-looking, innovative and correctly resourced transportation & mobility plan.  I'm not just talking about the current sexy like streetcars and light rail, but basic stuff like are there functional sidewalks and crosswalks for pedestrians; are there buses that can take residents to jobs centers; and are there bike lanes and paths for bikers? (Yes, I said it-- bike lanes, bike paths and the ability to navigate a city by bike are BASIC transportation infrastructure, not luxuries.)  

So those are the Five Pillars of a Citywide Revitalization Strategy.  But...

The implementation of the 5 Pillars is not the end goal.  The 5 Pillars only serve as tools to execute on the long-term vision for the city.  So first the city – often led by the Mayor and City Council but now sometimes led by philanthropic and non-profit interests– must create and communicate a narrative vision for the city.   Only after that vision is in place, and there is general buy-in from the city’s residents and key stakeholders, can the sustainable implementation of the 5 Pillars begin.
You Must Have a Citywide Vision for a Revitalization Strategy to Be Successful.
So there you have it. 

Does your City have a Citywide Vision and the 5 Pillars in place to create and implement a sustainable, equitable and innovative Citywide Revitalization Strategy?

Let me know what you think!

-- Calvin

*****
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