Creative Finance Ideas for Real Estate Development

one of my first things I did is mayor back in o4 when I got elected as I took a trip down to to Charleston to learn a little bit about and look at the lab and see sort of how to do it right and I had the chance to sit next to Mayor Riley for three days in the aquarium and sort of just be a sponge he had been mayor for almost as many years as I had been days as that was my 45th day in the job and I think he was 30 second year as mayor so just a great opportunity for me to learn from the master and in a great community so and what came out of that meeting for me was the big idea was as you see here these these blast furnaces which are kind of they were just big rusting hulks 20 stories tall and at the time when I was running for mayor and early stages the big discussion was what to do with these things and they are right in our downtown they are a bit almost like a piece of our of our skyline and one of the first things that you'd look for when you came to Bethlehem and imagine these things would flames shooting out of him it was 1995 is when they show up the blast furnace is down so it really became and they were and and hopefully could be again an iconic symbol the city but in this case they were sort of a symbol of the past and what we had lost so but as a part of that mayor's Institute for a city design the the experts that were there said you know Callahan you know save as many of the old sheds the old machine shops as you can they call them sheds but you can't touch those blast furnaces so they will be the backdrop for whatever takes place on this so you have to figure out a way to save them and celebrate them and as you can see we kind of lit him up as a piece of sculpture we created some some parks and plazas around there and and so this idea was essentially stolen from Germany I had also had a chance to go and visit the Ruhr Valley and and the there's a Insalaco and they kind of treated there they have a set of blast furnaces similar to these not as nice as ours but but uh but but similar and and they can't they they did a similar treatment to them we kind of took the ideas from them but as Tom said we were the quintessential mill town the Bethlehem of Bethlem steel much of the steel that built defended and transported this country was made either in Bethlehem or another Bethel own steel plant outside of Bethlehem at its peak Bethlehem the Bethlehem plant employed 35,000 people in a city of 75,000 just to give you a little perspective and how important it was certainly to Bethlehem the city but the entire region really is what what drove our economy so the steel for the Chrysler Building the steel for the Golden Gate Bridge is we produced a ship a day during the war effort in World War two so it was you know so we felt obviously that this site was important regionally but but you know going to some of these other larger national events and international events helped me understand that this site had some importance even beyond our region and and we had an obligation in Bethlehem that to preserve as much of it as we could so it's an 1,800 acre site I went to an event early on in my time as mayor and that with a mayor's panel and the mayor I said I have an eighteen hundred acre brownfield site in my city and the after we got to the break that the mayor of Terre Haute Indiana came to me assistant you say you have a 18 he thought I said 180 acres I said a hundred eighty acres we can do that in our sleep in Bethlehem so it was a it's a 20 it's a site that represented 20 percent of the taxable land mass of the city and so when it went from an operating steel mill to a brownfield site Bethlehem Steel rightly went back and reassessed the property and so you could see our tax base really just fell off the cliff so they were a giant water user they used about a third of the water that our municipality produced to make steel so we were sort of getting hit on all ends from the standpoint of the impact to our economy and our ability to balance budgets and deliver services so as tom said you never have money for any of this stuff but we had no money at all for given what was happening to us so because it's such a large site it could be a lot of things to a lot of folks and I'm not going to talk about all 1,800 acres but this is a this is 1600 acres of the site that was redeveloped as a business park we had a local not-for-profit private redevelopment group that took about a thousand acres of the site and they put infrastructure in place and they've sold off these Lots to private developers small lots and lots fur and then the majestic realty out of California bought about 450 acres of the site and they're in the process they're about halfway done now of building about eight million square feet of logistics and warehousing so the site has great rail access eighty percent of the Lots have real axis and sort of taking advantage of the fact that we this we're about sixty miles from here and Bethlehem in general is about a day's ride to the third of the country's population so it's a great Center for those types of uses it's a brownfield site so you know it was a great opportunity for us to cap that site with these large buildings and working with it with the federal government and in particular with the state this was really the first example of Act two and brownfield regulations in Pennsylvania so we worked very closely with the governor's office and with DEP to get to site shovel-ready for for new investment and that certainly has had and continues to have a positive impact on the city's budget though this whole 1600 acres is taxa pated graduated tax abatement over ten years so you pay ten percent any real estate taxes in the first year twenty percent your second year over the course of ten years so that was one particular economic development tool that we used there I'm going to focus in on kind of the 124 acres that's in town the historic part of the site this is what it looked like in 2009 you can see that there are some new roads there the city this we created a TIF district around this bethe work site the old steel plant and we did a enact a section 108 loan early on to put the infrastructure in place in the hopes that private development would come and pay for it through the TIF and to be quite honest with you not a lot happened we were fortunate that Bethlehem Steel beat us being kind of the namesake of the company as it was moving into bankruptcy and they put a lot of money into remediation and demolition on the site they probably spent about thirty million dollars in the waning years of Bethlem steel before they went into bankruptcy in 2001 essentially deconstructing the site so that we'd have an opportunity to the road to fill-in do some infill and reconstruct the site but despite our best efforts with this TIF and in trying to lay the groundwork and priming the pump not a lot happened fast forward to today this is a this is what the site looks like there's and I'll go through the the various components of it but really for us to game-changer was when Pennsylvania passed gaming in the state we were successful in getting one of the two at-large gaming licenses we partnered up with Las Vegas Sands so an investment group out of New York bought the site prior to gaming and then they ultimately partnered up with Las Vegas Sands to build what is the most successful casino in Pennsylvania so with this casino comes a ten million dollar host fee to the city that certainly helps balance the budget and deliver good services I think if you look at the publication that Tom and his colleagues put together the first part of it and I don't want to lose kind of being the mayor up here the first part of setting the stage for development is clean and safe you really have to make and we are what we are the safest city in Pennsylvania with a population over 30,000 so unless people feel safe that they can come to your town in the first place you can build all the best attractions in the world and they're not likely going to come so unless you're doing a good job balancing budgets and and and delivering good city services that that really is the ultimate setting of the stage so we used this project cost about 850 million dollars it opened up in 2009 and so when you drop in 850 million dollar project into a TIF district good things will happen and so this shed an awful lot of so we had a couple of opportunities to site the casino in various areas of the city it was a little risky to put it on the old seal site they took over kind of one of the most difficult sites to redevelop they spent a lot of money on infrastructure and investment to get it shovel ready and we dropped it within the TIF so as you might imagine being a colonial city that dates back to 1741 there wasn't a lot of excitement about gaming initially in the city but what because we were able to tie this development to historic preservation this development to lighting the blast furnaces this this development to building this arts and cultural campus people were willing to along with it plus the economics were rather compelling sort of to the the so the casino site is on your I guess your your right and the the SteelStacks campus is on the left so you have a couple of entities you have ArtsQuest Center there we have a the largest music festival in free music festival in the country is in is in Bethlehem we attract about 1.2 million people over the course of ten days it's in our data in our historic downtown on the north side but the organization that runs that built the arts arts quest Center at the base of the blast furnaces we have a local public television station also at the base of the blast furnaces and these two projects were privately funded through new market tax credits state grants the foundation donors and a and they went out and floated some some debt as well with a bank so those two projects were privately funded you know through those two not-for-profit organizations but everything around it the entire campus though the hardscape was all funded through this TIF we brought on what Wallace Roberts and Todd to work on the architecture the landscape architecture plan this is a Levitt pavilion the levitt pavilions there's a there's I think six or seven in these now in the country we we were the sixth one that got up put up there generally in some pretty cool cities and we wanted to introduce some green to the area this was another idea that we sort of stole from from Germany the opportunity to have concerts so we have 50 free concerts on this lawn with the big beautiful blast furnaces in the background so this Pavilion was about a four million dollar project five hundred thousand dollars came from the Levitt foundation and along with that comes some funding for programming through the Levitt and then we augment that with arts quests who are already having free concerts and now we just sort of augmented that with a summer series took the oldest building on the site in 1862 stock house and did a meticulous restoration of this building and is now the visitor center for the city I wish I had a before picture but it it was quite a fixer-upper when we took it on and and the project has just opened last year in 2015 is the called the Hoover Mason trestle and it's sort of our Bethlem version of the High Line this is a an older elevated rail line that would take the raw materials from the from the the or pit and the and the the coke to the blast furnaces to be dumped in these conveyors would take it to the top so we sort of use this this trestle to act as kind of a spine to run east and west on the site and connect both the casino which was a huge investment and a note of activity the casino tracks about eight and a half million visitors a year and this particular site still stacks attracts about a million people a year over the course of the year so together we've got a site now that ten million people have an opportunity to enjoy and insight that not too long ago that as I said back in 1998 is when when they ceased all operations and it was a padlocked site that no one could reach everyone kind of wanted to get to it but they couldn't and now it's a site that ten million people have an opportunity to enjoy so I'm going to just run through some of the the pictures just to give you a sense of what this site looks like at night I mean the real the real heroes in this I think are our lighting architects they did a wonderful job on the site and it takes on just a completely different feel in the evening you see people get an opportunity to get an up-close and personal view of the blast furnaces themselves but you also get a chance to sort of look back on the complex and get a completely different perspective on the rest of the site and the city itself but the scale of these blast furnaces are rather dramatic that's a place making a sculpture that we got a half of the grant hours came from the mayor's in the mi cd25 they celebrated their the 25th anniversary and the half half of it came from a Foundation grant and that that you'll see in a future picture that that we call it the bridge but that actually lights up with a natural gas over on the spine of the project this is this is what the site looks like during Music Fest again you know all these tools that everybody uses we use them you know as well but TIFF really for us was the driving factor but we've done historic preservation tax credits we've done new markets as I said the section 108 loans CDBG dollars it is a low moderate income census tract so those dollars are available for us as well the city did geo debt and we took an old abandoned rail line and created a rail set rail project in which I also convinced the SANS to make a fairly significant investment in as well and then you have the investment of ArtsQuest and the PBS group and the state of Pennsylvania really was a huge help not only with their brownfield legislation and helping us through the act to process and making it so that you know a private entity would feel confident to come in here and redevelop it without fear of the environmental ramifications but they also contributed a major dollars in in the context of grants to these organizations and and I guess the you know I would close by saying that at the end of the day we didn't have a choice you know Tom mentioned that just yet this is some of this has to be intentional but when you know 20% of your city is a brownfield site you better get going on redeveloping it but I think we did it in a way that we were patient we were persistent and we wanted to sort of build upon our past so let's figure out what makes Bethlehem unique and special if you know Bethlehem it's because of Bethlehem Steel and you know because of Lehigh University those probably the two reasons why anyone would know anything about the city of methylamine so you know let's take our past and use it as a bridge to a brighter future and build upon that uniqueness in 125 years of steelmaking history in the city and so we're not done yet there's still now I was term limited so I now work on the development side with the gentleman that originally bought the site to try to introduce sort of office and residential to the rest of the site we've got the you know the little everybody wants live-work-play we've got the entertainment in the play down from Thursday to Sunday this place is jumping and the end particularly in the evenings but what we need to do now is make it a more 24-hour site and a seven-day-a-week site and we're introducing residential to the site this year we're very bullish on that so all these kind of amenities that a millennial or an empty-nester would want and their kin their development are there now the public and it's all and it's open to the public it's as another kind of Riley ISM is the public realm should be your best places in the city and this is this is a must go to it went from a place that you kind of would turn your back to and don't don't look there and now it's like the place to go and it's one of the most unique places you could you could be it you know it's one of the more unique economic development projects in the country and and now we're wading through and there's some other incentives that that are unique to our our site that I won't get into but we think the next wave will be residential in office on the site thank you John sure Anastasia Milan is from 3cdc in Cincinnati she'll explain to you with 3cdc is it is a very interesting model that I think a lot of cities ought to look at because it is privately driven rather than publicly driven in the redevelopment of a downtown and a and a blight a very blighted urban neighborhood so with that Anastasia why don't you start how many of you have been to Cincinnati here we go how many have been in the last day six seven eight years okay I had met a couple of women who are in merchandising at Macy's last night that hadn't been to Cincinnati actually one of them had because Macy's is headquartered in Cincinnati but the other one hadn't been in 12 years and she's like you know I don't didn't really like it it kind of rolled up at night there wasn't anything going on there the company that I work for is a private nonprofit real estate development group and and unlike Steve and John's stories there's some similarities we had a visionary mayor who really kick-started the formation of our organization but everything that I'm going to talk about and that has happened over the past ten years in Cincinnati is very specific to one organization called the Cincinnati Center City Development Corporation so while we're a private nonprofit real estate development group we we do have a great public-private partnership with the city but all of this work has really been done with by one organization and I think the the success of it can be attributed to all the major corporations that are headquartered in our city and that's Procter & Gamble Macy's western and southern Duke to name a few Kroger who kind of looked at our city a decade two decades ago and said we have to do something about economic development it's not happening we're here to stay we're headquartered here we want to grow our businesses here and we want to recruit the best and the brightest to live here and work here and and there's just not much going on in our in our Center City and so this this this group that was really formed as a task force by our mayor at the time Charlie Lucan to study how economic development was done in our city kind of put their money where their mouths were and pooled their funds a total of 50 million dollars in the beginning to create this private nonprofit real estate development group the the city's economic development department department really wasn't getting it done and the private corporation said said we got to do something about this and so the primary focus and mission for this organization was the center city in really two main areas if you look at the screen there's a this is a funny map because it's sort of flipped upside down the river is this to the south of the city but it's up in the top right corner of your screen but the Green Square shows the central business district and the heart of the CBD is called Fountain Square and this is a two acre public space really in the center of CBD that at the time was sort of blocked off from any pedestrian or traffic that could walk up on a square was a pretty desolate space where nothing really happened much except for some homeless people hanging out begging and a couple of you know annual events the lighting of the tree ceremony but really not a great public space at all in the heart of that central business district and consequently there was little activity happening around it and then the red square you see here is a neighborhood just north of the CBD called over the rhyme and over-the-rhine had had suffered through many decades of disinvestment to the point where it was built in the 1800's by German immigrants that there was there's a street between these two squares that used to be a the Miami Erie Canal that the German immigrants affectionately referred to as the the Rhine and they would work in the CBD or work on the riverbanks and then cross the Rhine to get to the neighborhood they build so it was called Over the Rhine and in its heyday there were 50,000 people living in these 3 4 5 storey walk-ups Italianate renaissance style structures beautiful multifamily above and street-level activity lots of breweries a you know in the late 1800s Early 1900s it was really a bustling place to be fast forward obviously all the economic indicators that happen in these Rust Belt cities people moved out to the hills when the car was invented the you know the over the years many of the buildings were converted into subsidized housing units that the tax credits ran out and the out-of-town owners let them fall into disrepair and then the federal government changed the program and gave people vouchers so they voted with their feet left and ultimately what we were left with was this incredible collection that ultimately became a historic district of 943 historic buildings that were crumbling and vacant and that were attracting crime really significant crime that was spilling over into the central business district and really just wreaking havoc on the city so was the it was the the vacant the vacancy and the fact that that the city had really just sort of turned its back on the area and was just letting crime run rampant and then at the point where it's filled over in the CBD and this is really the turning point I think for all the major corporations so we're going to do something about this and this is a major focus of this new group that we've that we've put together this is a list of the you know the folks that are on our board they in the very beginning contributed it really paid for about ninety five percent of our operating budget today they still contribute this same 1.2 million dollars but it makes up about 15% of our operating budget we've grown significantly in in both you know the assets that we manage and the employees that are there putting the real estate projects together also since that first 50 million dollar loan fund pooled to go after new markets tax credits we've created some new funds and revolved you know once projects have condos have sold and projects have paid down their debt returned it into these new loan funds that together have totaled about 154 million but as we've invested in real estate projects over the years and rolled them over so we we've used these we've also applied for actually seven rounds of new markets fund allocations and received five allocation through five of those rounds totaling about 200 million that we've invested in this so those revolving loan funds and together with the new markets tax credits historic tax credits low-income housing tax credits we have produced real estate projects in downtown Cincinnati totaling nine hundred and twenty six million dollars over the past eight eight or nine years about three hundred and forty seven million of that has been from three cdc's loan funds that we manage and revolve into these projects and four hundred and sixty four million has been attracted from private so for example if we're building a headquarters building for done jambe or 84 51 they'll bring half of the public or the private dollars to the table and then we'll fund the rest so it's four hundred sixty four of that nine twenty six has come from private and then about a hundred and fifteen million from the city in the form of TIF and grants and that 926 million has resulted in this list here of 144 historic buildings restored in both the CBD and over-the-rhine 50 new can build instructed 15 acres of Civic space and this includes that Fountain Square that makes up two acres in the heart of central business district and then eight acres of a park that is in the heart of the over-the-rhine neighborhood that we restored and now managed and then another about five four and a half acres that we are currently under construction a different Park in that same over-the-rhine neighborhood in these parks and this and the Fountain Square these Civic spaces were really similar to their surrounding neighborhood attracting crime it wasn't a place where kids went to play there were hypodermic needles lying all over the ground and really bad activity happening in these spaces that once renovated that we now program and manage our hubs of activity they're some of the most democratic places in the city where people of all walks of life come together and enjoy free music concerts and festivals and markets and yoga nights and movie nights and it's we've we've built six hundred and seventy-nine apartments and this runs from the riverfront all the way up into over the Rhine and then 421 condominiums again in those main blocks that I showed on the earlier slide one hundred and fifty-six hotel rooms three hundred and twenty shelter beds we just finished a major homeless two homes project where we built three new facilities one women only one treat substance abuse facility for men and one safe step-up shelter that really just takes anybody that needs to come in off the street all three of those facilities at a total of 320 beds were completed last year and then about eight hundred and fifty three thousand square feet of commercial space and and how about half of that is an office building in the CBD but a large portion of this is you know scattered small thousand square foot spaces around over-the-rhine that we have tenant with 26 new bars and restaurants that are occupied maybe 51 thousand square feet of that and have gross revenues of about 43 they're doing probably an average of seven hundred seven hundred bucks a square foot these restaurants in these tiny spaces some of them are doing north of a thousand bucks a square foot in these in these restaurant spaces retail office users as well and then about 3,500 parking spaces so this is what we've done just in the past ten years or less with this 926 million is really created these structures and transformed both the central business district but primarily this over-the-rhine neighborhood that had fallen into such disrepair so not only has 3cdc been a real estate developer but we are also have moved into now this asset management role so not only are we managing and programming civic spaces but we have retained ownership of all the commercial spaces that we've built we carefully curate the tenants that we put into them and and manage those spaces and have have hung on to them the we have an operating budget 3cdc of about 8.3 million this year and half of that comes from revenue comes from development fees about another quarter of that comes from resource sharing allowance where we pay ourselves to manage those loan funds and the other quarter is split between those corporate contributions as mentioned earlier and and the management fees that we are paid to manage those assets we have seventy sixty nine full-time employees and about seventy five part-time seasonal employees that fall into that operating budget and really on the expenses side the employees and the payroll make up about 70 percent of the expenses we're governed by a board and executive committee and then a committee that focuses on each aspect of our business so asset an asset committee a development and finance committee that really analyzes every real estate project that we want to take on and how we're going to finance it and every project is its own entity which is then managed by the finance group and and then we have an events of sponsorship committee that really analyzes how we manage those Civic spaces which again are their own entities Fountain Square is a five million dollar entity we create all the revenue through sponsorship and concession sales to produce free programming in these Civic spaces and the parks are similar financing model like other CDC's around the country we have similar priorities we want to create manage great civic spaces and create high density mixed use development preserve historic structures whenever we can and repair Street scapes and then create these really mixed income diverse neighborhoods that support all walks of life that provide job opportunities that provide a bell curve of housing options for for every type of subsidized housing to market rate affordable we've introduced a for sale element into this neighborhood of over-the-rhine that didn't exist before there was really virtually no ownership to speak of and so by creating these for sale opportunities and selling these condominiums we've got buy-in from the community and into keeping their neighborhood clean and safe and I'm going to run through quickly here just a series of before-and-after photos of downtown and over-the-rhine this is Fountain Square this is an old SRO we converted into a hotel called the 21c out of Louisville an old restaurant that shut down everybody thought it was the end of downtown that we've converted into a three complex entertainment facility here's the new office building that we've built on a underutilized parking lot in the center of the city and this is what we purchased in over-the-rhine these buildings that we've converted into restaurants and condos were really just in terrible terrible shape we went in we bottomed we cleaned them up we really bought most of them over a two-year period where we bought maybe 200 buildings and 170 vacant lots cleaned them up boarded them up secured them and almost immediately crime dropped by about 50% because the criminal activity was happening in these buildings we bought a lot of the carry-outs where if you laid a crime map over the neighborhood you could see that most of the criminal activity was happening in these carry out shops that once we bought the building closed the business down the crime went away and you can see these these condos and apartments are in the beginning in 2007 six we were selling for about a hundred and fifty bucks a square foot where they're now selling for north of 300 bucks a square foot which we always felt when we got to that point the private community would be able to come in and sort of X needs Y in terms of what it cost to bring these old buildings back into shape and what you can eventually sell them for and lease them for this is the park in the heart of over-the-rhine that sits in front of our Music Hall which is home to all of our performing arts organizations that today is a big hub of activity that has encouraged more private development around the park that's a before picture and and the children's playground today and again this was a playground where children did not come to play before the park was renovated and then here are a series of you know these are this is what we purchased this is what the neighborhood looked like before before we came in purchased the buildings and cleaned them up a lot of vacancy a lot of poorly managed buildings that today we've brought back into use as mixed-use projects with commercial street-level activity and the condos and apartments above and again I think the difference here is you know unlike Greenville and Bethlehem there has been some some private some private public partnership going on but these projects have really all been because of this CDC funded by the major corporations that are headquartered in Cincinnati I think tom has been the one really helping us tell this story and sort of a little-known community that that has grown significantly in the past years thank you thanks aunt Stasia so there you have three remarkable examples of intentionality of communities that made a really very clear choice that they wanted to be something other than what they were I've had an opportunity to have visited all three and and I think what what you've heard are different models I think what is particularly for me interesting about the Cincinnati model is this is a group of business leaders that didn't wait for the mayor is that they said we can we can be the leaders in this and and so often people wait for the mayor and the mayor might might might or might not lead and in this case the mayor was a partner willing to be a partner but largely being driven by the private sector and I think it is a model that has real importance to many cities in America and cities say well we don't have Procter & Gamble but every city has some companies and some wealth that if if they come together and share a vision so do you have any questions for each other I have a question for Anastasia you touched on this but I'm curious to know how you're gauging success and that critical mass of when you feel like you can take that let the the private sector take over and then at what point when that happens where will you go not you personally but what other good can you do in the community so of all the the property that we purchased in those first couple of years that I was talking about the 200 buildings 170 Lots and obviously we've done a little bit of acquisition since then but the bulk of that has been redeveloped or it's under construction right now there's there are a handful of sort of scattered site buildings that we have hung on to that we haven't redeveloped that we now have a program in place to sell those buildings because there's a ton of interest now in the neighborhood that it has come back and over-the-rhine from individuals you know private developers that that want to come in and sort of be a part of the action and we have tracked over the years sort of the money put into it what it cost us not just to purchase a property but then the carrying costs for the past decade that we've sort of spread around these properties so that we can recoup that and are selling to private developers that now you know like I said when you can sell a condo for north of 300 bucks a square foot it it starts to make sense I mean the cost to bring these old buildings back the remediation work the starts to make sense and so we have entered that market at the same time we we don't have an exit strategy because there is so much there's so many empty teeth still that we need to fill in in both the CBD and over-the-rhine that you know we're not going to expand the boundaries of our of what we're working on there so I don't feel like that the development community private development community has gotten to that point where they want to buy those Lots yet it has the world's little there and in fact we've attracted interest from neighboring cities like Indianapolis we've got a couple private developers from Indy that are doing projects in town there are a lot of predators literally cranes all over downtown right now and it isn't just 3cdc work so I think it's it's starting to attract that you've also got some of the operational management side that just with your existing assets well and that's what our I think our board really looks at all the time is is there an exit strategy from that asset management at what point do we feel like it's a stabilized and not retail environment that that we can you really start getting off I don't think we're there yet look there was a common theme also I think it's important I want to ask each of you to comment on is the programming is that that you've built great places but there's also been a real focus on creating activity that bring people to that area that then begins to feed on itself and so you might want to finish it I was curious about that with your project as you know who does that programming in the concerts and in the park we were fortunate that this organization that started this sort of tiny festival back in 83 is a Busan that you know on the arm to this to the city so it's like a nonprofit very not-for-profit group they are the largest arts organization in outside of Philadelphia Pittsburgh they've got an 18 million dollar budget and so the festival they run over ten days helps sustain the overall operation over the course of the year but that ArtsQuest facility is a money-making operation they do weddings and and corporate events there and and they sell tickets for it for those for those events so they have become kind of the arts and cultural arm of the city they're not affiliated with the city directly but they and that Levitt pavilion they were already doing a great deal of free concerts so the qualify for that Foundation money you had to do fifty free concerts a year so we mean that you know it didn't take much to get us to that that fifty number and they also you know they there's a there they're friends of the Levitt pavilion that's another sort of sub not-for-profit within the arts quest overall organization and they handle the programming and fundraising for those free concerts as well just love it is an ongoing support or was it a one-time it is uh the bulk of it was upfront and then they kind of give you some advice so talk a little bit about font Square and and just the sheer number of programs you're doing a year old yeah it's I mean we produce three cities thing we've got our own event the sponsorship team and but we produce over 800 events a year in Fountain Square and Washington Park and we're under construction right now on this new park Ziegler Park na na Performing Arts facility called Memorial Hall which we will also manage so we will double that in the next 18 months or so but each each each thing is its own entity so Fountain Square is a five million dollar operation if you take out the garage there's a six hundred space parking garage underneath it you take out that that's of two and a half million dollar operation and the revenue from the garage goes back towards paying down the debt that was created to renovate the space so the two and a half million on the plaza level is you know this mostly the revenue comes from sponsorship grants and concession sales we sell a lot of beer at our and and then and then we we produce these freezes we don't have the ticket sales there's no ticket sale revenue so it needs to come from sponsor Steve what about in Greenville there's a lot of well I you know use the word intentional was very intentional the community was designed the downtown area were designed almost to be framed by the museum district the baseball stadium that was built into a mixed-use facility a program the arena that has indoor and then the Performing Arts Center's that are throughout we like to think of Greenville as one entire Performing Arts District because there is something going on I think there's ten Performing Arts Center's at downtown at various levels of staging but there's something going on every day in the spring all the way through the fall that one block somewhere in downtown is closed off with it's either arts or music or something a lot of beer-drinking going on but people just love to be out of town and what you find is that applications are being made permits are being made for others to come in and want to do things as well of course and I think you probably saw a couple of the festivals the artist sphere festival and the fall for Greenville festival we're both top-ten festivals in the country so part of the lesson of this is that we all tend to focus on the real estate and placemaking Uli sweet spot but there's also then of creating creating reasons why people want to come to a great place and and often we we overlook that I think as people involve the development I'm going to open it up for a few questions David funding from Birmingham thank you all for being here and I have about three questions I'll throw out and you can handle in the way you want and what I think you've already sort of addressed Anastacia about what your exit strategy is for what you're doing and I appreciate those thoughts if you have any more about that but for you particularly how have you or have you had to deal with the g-word of gentrification in a neighborhood like over-the-rhine and bringing more values and is that doing anything to you know your doing having to do anything to preserve maybe local or what we're is existing already in terms of business and folks the final thing is I've heard a lot of you talk about TIF tax increment financing or tax credits how has self assessment districts where bids played into your strategies I don't think any of you are one specifically but you may have those in those places that you partner with thank you good I'll take the Jennifer keishon question first it it has been a struggle for us in terms of more of a PR thing we from the very beginning have been have been dedicated to preserving the existing affordable housing in the neighborhood but but but creating better quality like sort of changing the management of it better capitalization so that we have more quality affordable housing in the neighborhood and so preserving the existing but really trying to encourage the upgrade of the existing we have added slightly to the affordability count we've done a couple of mixed income projects with McCormack Baron Salazar out of st. Louis and we've done again the homeless facilities if you would consider those affordable housing and we've done some workforce housing and partnership with another developer in town but the majority of what we've done to date has been introducing that market rate element that didn't exist before and that homeownership and yeah it's changing the face of the neighborhood it has completely changed the face of the neighborhood and there's been a lot of discussion that we have participated in as much as we can about about what that means for the neighborhood moving forward whenever we've done a public Civic space project we've engaged all the community groups that surround it to participate in the discussion of what they want their space to become and and how it needs to be programmed and so we do a lot of those community engagement kind of discussions we are in in our pipeline right now embarking on a new affordability we just actually got approval on the strategy from our board yesterday on that we'll add about 360 new affordable units to the neighborhood what we're focused on is ad concentration of the existing right now there's these scattered site completely you know the the 1970s idea of just corralling everybody into into one building or one development and so this whole mixed income development spreading the HAP contracts around so that everybody feels a part of the clean safe nature of the neighborhood and this is a focus of ours in the next 18 months or so on this I'll respond to that as well in Greybull where there has been so much success now and there's an interesting stat 22.4% of the people that work in downtown Greenville live within one mile of there and so you can imagine the pressure on residential housing that has had that is occurred everybody wants to be there they want to be it used to be a zero hour city than an 8 hour city now it's an 18 hour city and it's you know it's a town of 50,000 people but there's a 1.3 million people live around it but it's still at a city of 150 thousand people I had said earlier when the pictures were all being run all of that was done by local developers that was true until podium style apartments hit the market and now in the last two years and what's what's been built what's been planned there's something like 4,000 units that have been built and/or are being planned and when you have that kind of density and you have acreage residential acreage our multifamily properties selling for two and a half to three million dollars an acre you have a real problem with gentrification in those markets and we've really experienced that we have an area by the ball field called the West End and that was the natural area for growth to go as a collection of older buildings and some really unique pocket neighborhoods that people had lived there forever and a long time and so they were entrenched in their communities and those areas are getting wiped out now so that's an unintended consequence and they're there there is filing you know in the south it's really hard to talk about telling people what to do with their property so zoning and these overlay districts it's a real sensitive subject and a lot of people want to say we're so successful why would we do that why do we need those guidelines but I think everyone is starting to realize now that affordable housing being sensitive to that making sure we're inclusive with all types is really what makes a downtown area great and you can't you can't be so commercial uniform with a certain that you can't just have a bunch of rich people there but it's also really difficult to do affordable housing and I think that obviously the housing advocates that are always we've got to keep this a mixed income neighborhood don't always realize the difficulty of it and you know and getting the light a can happen the you know and layering them in a way that that makes the project make sense and it's not easy John do you have any club we had some concerns of it being a low moderate income area there has been a fair amount of investment on the periphery of the of the seal site you know all market rate and there was some concern about gentrification the interesting thing about these sites is is is it there's so much opportunity there vacant and this is opportunity to introduce new housing and income diversity without necessarily having to push anybody else out so we're not to the point of Greenville yet but you know it's been talked about and so far you know we've been able to manage it because it's been I think what is interesting is in Cincinnati certainly in over-the-rhine and in Bethlehem and earlier on in Greenville is that there was no market rate housing in these places it was all for Taiwan and so now it is interesting in that has become the challenge that that's sort of in some ways the measure of success right is and the big question the Business Improvement District maybe you want to address that I would say that Cincinnati is a Business Improvement District in effect on steroids we have a bid that is the geographic boundaries are that the green square that was the central business district so it stops at Central Parkway which is the southern border of this over-the-rhine neighborhood so there is no bid in over-the-rhine it's in the CBD and it's a two and a half million dollar SID it's a special Improvement District you know the property owners it's generated from all the property owners within that geographic boundary and it has it really was sort of the predecessor to 3cdc it was never funded in the way that we are but really they created the TIF districts that have paved the way for a lot of this work really were focused on on retail recruitment and retention and office recruitment and retention and marketing marketing a downtown that really tried to make it look fun when there really wasn't anything fun going on down there at the time that is now a clean and safe really focused solely on clean and safe in that central business district you know originally you'd add grants and several TIF successful tips and other ways to incentivize success taxes that have worked and similar pretty well but no bids I didn't forget you know no that's fine go ahead you're set atoms Warners wait development from the Finger Lakes region in upstate New York I've recently moved back to my old homeland of upstate New York and I'm working in some small cities I'm hearing all these great ideas and they mirror what I experienced in Fort Worth Texas where I ran and operated a business for twenty but closer to the microphone what I would like to have addressed is how do small cities even approach developing ACDC how are they formed and how can I help kick-start one in a small city in upstate New York I think you're the seed I don't know if I'm the expert on the formation of the CDC but there's just there are certain guidelines that you need to fall under it's obviously it's a nonprofit as a community development organization you can apply for those new markets tax credits and the both federal and state if your state has them I don't know how you go about beginning working on it I think it really is a really fundamentally a 501c3 so it's the same process as any other nonprofit would do and your mission I mean the business community in this case is oh good it I think ours is a little bit unique in in that sense and and again I in in in all the cities we've been visiting and sort of talking about our story and in Cincinnati I have yet to see that model of you know 30 40 different organizations that are pooling their funds to form that CDC you know the I've done some consulting with some small towns and Uli has done a lot of these not advisory service panels but the taps technical advisory panels which were the smaller ones that come in look at these towns and I know in the South a lot of towns have done that and how do we do this and we see what these other communities are doing it's a tough thing but I mean the issue really is it's about jobs if you're a job generator if there are jobs there and there's job growth you can get these things done and people are willing to invest but if you don't have the job generation it's just a really really hard thing so I want to thank our three panelists because they think it's a remarkable story once you're joined and I thought the last question particularly for every community they are struggling to define their place in the world and how that happens it's about leadership and vision of knowing what you want and where does the leadership come from and in some cases it came from a mayor in some places a partnership between the political and private sector and in many cases from the private sector and you know I've been to some cities in upstate New York and other areas of the country that have sort of given up in a way we don't know what to do and I think what we are saying is there are great examples and learn from them of cities that were in your same position and made a decision in a different kind of way you

Channel: Urban Land Institute

Views: 34,011

Rating: 4.8620691 out of 5

Keywords: ULI, land use, real estate, cities

Id: cfo3BRw-TSA

Length: 50min 31sec (3031 seconds)

Published: Mon May 02 2016