Mississippi Rebuilding



By Robbie Corey-Boulet

For one hour Saturday morning, CNU XIV openly embraced the profit-oriented developer, hosting two presentations that moderator Bill Tucker said shared a common theme: how to make money.

Though Tucker, president of real estate firm Tucker & Associates, said many lessons for the New Urbanist developer can be culled from basic real estate practices, the seminar's presenters emphasized what sets New Urbanist projects apart from the rest of the market.

"I believe that well-done New Urbanism costs more, and I believe it makes more," said David Pace, managing director of the Baldwin Park Development Company, who talked about his company's efforts to redevelop a former Navy training center in Orlando.

While Baldwin Park employees "love the idea of great place-making," an overarching aesthetic vision "isn't why we do this," Pace said. Instead, "we do real estate development to make money."

The Baldwin Park site sits on 1,100 acres and includes 4,300 residential units, ranging from luxury homes to low-cost apartments. One immediate obstacle developers faced was the lack of "God-given amenities" - say, a mountain range - to draw prospective buyers to the land.

To overcome this, Pace said planners "spent a lot of money to make even more," turning over large sections of the site to green spaces that are fully integrated with residential developments. As a result, each unit requires tenants and buyers to pay a park premium, and the now-desirable land generated a "lease-up rate" of 45 units per month, the fastest Pace has seen in his career. Pace said some people questioned why he would incorporate New Urbanist principles on the site when slab blocks of housing would have also turned a profit. In the end, he viewed this decision as an investment in the site and future projects in the area.

"You're going to be looking at the results of those efforts for a long time You're going to be selling against those results," he said.

Pace stressed the need to avoid large-scale builders that will take control of a project. Instead, developers should diversify building contracts so a project isn't dependent on any single company, he said.

By avoiding large-scale production and adopting a more varied program, Pace said he can place a luxury home near an apartment that rents for $750 per month. Perhaps more importantly, "I will change my product mix on the fly" if certain units aren't selling, he added.

In describing her company's projects in Denver, Colorado, Denise Gammon echoed this need for the "malleable builder."

"The big guys are nice from a production standpoint," but mid-sized companies are often more appropriate for New Urbanist developments, said Gammon, who is senior vice president of development for Forest City Stapleton.

Gammon's company took charge of an infill development placed on the former site of an airport that shut down in 1995. Located 10 minutes from downtown Denver, Stapleton sits on 4,700 acres, and site plans include around 12,000 homes and apartments.

Like at Baldwin Park, developers at Stapleton devoted a sizeable chunk - 1,100 acres - of the site to green space, and Gammon said the results justify this decision.

"We're paid back in many ways for having that integrated open space," she said.

Gammon's company also invested considerably in a town center, a feature that ultimately became "our number one amenity" and "the heart and soul of our communities," she said. The resulting mixed-use, pedestrian-friendly project is in line with much of historic Denver, Gammon said, adding that its overall appeal has led to many sales despite a "flat" real estate market.

Following the two presentations, one audience member asked whether smaller New Urbanist developments - like those hovering at around 50 acres - can be as successful as the examples available in Orlando and Denver.

"I think it's a real struggle when it gets down to that size," Gammon conceded, though Pace said developers always want more land, regardless of how large the project is to begin with.

Ultimately, for any project, the New Urbanist developer will have to spend more money, but this can generate higher profits in the long run, Pace said.