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Current view of the West Northfield Drive focus area Real Estate Development & Reuse Indiana Economic Development Course Horizon Convention Center, Muncie,

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Presentation on theme: "Current view of the West Northfield Drive focus area Real Estate Development & Reuse Indiana Economic Development Course Horizon Convention Center, Muncie,"— Presentation transcript:

1 Current view of the West Northfield Drive focus area Real Estate Development & Reuse Indiana Economic Development Course Horizon Convention Center, Muncie, Indiana Parkview Randallia Campus

2 Good Morning! 2 Founded in 2004, Greenstreet Ltd. is an Indianapolis-based real estate development, brokerage and consulting firm which leverages sustainable strategies in the planning, development, marketing and disposition of urban mixed-use assets throughout the United States. Agenda  About the Audience  Chapter 6  Development Defined  The Basic Real Estate Development Process  Dealing with Environmental Contamination  Public Participation in Development  Roundtable Discussion about Development & Reuse Strategies IN Economic Development Conference | © Greenstreet Ltd.

3 Types of Development 3  Build-to-Suit  Speculative Development  Greenfield Development  Redevelopment, Reuse, Brownfield Development IN Economic Development Conference | © Greenstreet Ltd.

4 Lots of projected growth… 4 US Growth Projections : + 82 million more people (27 million between 2000 and 2010) + 55 million new housing units IN Growth Projections : + 718,000 more people (400,000 between 2000 and 2010) + 481,000 new housing units Source: U.S. Census Bureau IN Economic Development Conference | © Greenstreet Ltd.

5 Neighborhood Preference Studies 5 Source: Arthur C. Nelson; RCLCO; National Association of Realtors NelsonRCLCONAR Housing Type Attached38% 39% Detached62% 61% The National Association of Realtors completed a major national survey on neighborhood preference in February 2011 (95% confidence level) IN Economic Development Conference | © Greenstreet Ltd.

6 Neighborhood > House 6 Source: National Association of Realtors Downtown8% City-Residential Area11% Suburb-Mixed-Use28% Suburb-Housing Only12% Small Town18% Rural Area22% Do our land use policies support the fulfillment of nearly half of demand? 88% favor neighborhood over home size 59% would buy a smaller house on a smaller lot in exchange for a shorter commute to work Most important factors in purchasing a home: 1.privacy from neighbors 2.short commute to work 3.high quality public schools 4.access to sidewalks 5.places to walk to IN Economic Development Conference | © Greenstreet Ltd.

7 Where will growth occur? 7 US Growth Projections : + 82 million more people + 55 million new housing units IN Growth Projections : + 718,000 more people + 481,000 new housing units  Greenfield ~60-65%  Suburban Densification ~15-20%  Urban Infill ~15-20% Source: ULI, ‘Developing Greenfields without Sprawl,’ 2004 IN Economic Development Conference | © Greenstreet Ltd.

8 Trends Redefining the American Dream 8 Source: MPO-MIBOR Consumer Preference Survey IN Economic Development Conference | © Greenstreet Ltd. % Owner Occupied Indianapolis MSA64%69%66%? % U.S.64%66%65%60% Drivers: Single-person households already outnumber family households The sub-prime mortgages that enabled growth in ownership between 1990 and 2000 are history Fannie Mae and Freddie Mac may disappear 20% down payments will become conventional The next generation of homebuyers is the most educated generation ever, but also the poorest generation since the Great Depression - submerged in debt, no savings or liquid assets

9 Central Indiana Reflects National Trends 9 Source: MPO-MIBOR Consumer Preference Survey IN Economic Development Conference | © Greenstreet Ltd.

10 Massive Supply-Demand Inbalance 10 Source: MPO-MIBOR Consumer Preference Survey IN Economic Development Conference | © Greenstreet Ltd. Suburban Housing-Only Neighborhood Suburban Mixed-UseUrban NeighborhoodDowntown 25% of regional Consumer Preference 88% of the regional Construction Pipeline 75% of regional Consumer Preference 12% of the regional Construction Pipeline

11 Evolution toward Smart 11 Source: Urban Green IN Economic Development Conference | © Greenstreet Ltd.

12 Paying the Way 12 Sources: U.S. Source: Growing Cooler, Urban Land Institute; Smart Growth & Conventional Suburban Development: Which Costs More? U.S. EPA Smart growth development patterns reduce infrastructure costs from 32% to 47% vs. conventional development patterns. IN Economic Development Conference | © Greenstreet Ltd.

13 Green is the New Granite Gen Y and the Baby Boomers have a strong preference for green amenities… and they’re the largest generations in history. Serving these 50 million potential homebuyers over the next years will dominate the U.S. economy. Nationally, consumers are paying premiums of 1.5 to 5% for green development. Surveys are indicating that green is the fastest way to sell a home, and that the neighborhood is more important than the house. Is green the new granite countertop? (Atlantic Monthly) Source: The Atlantic Magazine, Joe M. McIlwain

14 Green Building Megatrends U.S. Trends 1.Green building growth to rebound 2.Federal momentum has slowed 3.LEED-EBOM will gain momentum 4.Water issues grow in importance 5.Zero net energy to gain traction Global Trends 1.Green building movement will continue to grow 2.Performance disclosures 3.Global carbon ratings 4.Solar power stalls 5.Building management goes into the Cloud Source: Hanley-Wood Builder online

15 Real Estate Development Process 15  Pre-development  Market, financial and political feasibility  Site and engineering analysis  Financing  Contractor negotiations and public approvals  Construction  Marketing  Building occupancy and management IN Economic Development Conference | © Greenstreet Ltd.

16 Dealing with Environmental Contamination 16 Indiana defines a brownfield as: “a parcel of real estate that is abandoned or inactive; or may not be operated at its appropriate use; and on which expansion, redevelopment, or reuse is complicated; because of the presence or potential presence of a hazardous substance, a contaminant, petroleum, or a petroleum product that poses a risk to human health and the environment.” Source: Indiana Code IN Economic Development Conference | © Greenstreet Ltd.

17 Challenges in Brownfield Redevelopment 17 Environmental Liability Concerns Developers and property owners want to manage past and future liabilities associated with the property’s environmental history. Financial Barriers Private lenders are often reluctant to give loans for potentially impaired lands. In some cases, cleanup costs for a property may ultimately be more than the property’s value. Cleanup Considerations A brownfield redevelopment timeline may take longer than typical development due to environmental assessment and cleanup activities. Reuse Planning A reuse plan based on community goals or sound economic and environmental information (e.g., market potential) may be lacking. IN Economic Development Conference | © Greenstreet Ltd.

18 Typical Brownfield Redevelopment Process 18 IN Economic Development Conference | © Greenstreet Ltd.

19 19 Brownfield Redevelopment Process IN Economic Development Conference | © Greenstreet Ltd.

20 Public Sector Partnership in Development 20 Bond Financing Loan Guarantees Revolving Loan Funds Tax Credits Tax Increment Financing Sale-Leasebacks Tax Abatement Grants  Regulator Establishing rules of the game  Facilitator Helping catalyze development  Initiator Lead role in some capacity IN Economic Development Conference | © Greenstreet Ltd.

21 Brownfield Toolbox 21 Federal Site (property) assessment grants Site cleanup grants Grants to establish Revolving Loan Funds Job training grants Funds for state brownfield programs Indiana Grants for site assessments Grants for remediation of petroleum contaminated sites and hazardous substances Grants to match federal funding Low interest loans for assessment or remediation activities Tax credits for voluntary remediation IN Economic Development Conference | © Greenstreet Ltd.

22 Public Sector’s Role in Development 22 Type IType IIType III IndustrialUsed more in the past; less frequent now CommonRare OfficeRareCommonly used as initial catalyst for development Used occasionally RetailUsed more in the past; less frequent now CommonRare ResidentialCommon Rare HotelRareUsed to stimulate convention business Rare Type I - No market demand, requiring subsidy with little potential for value recapture Type II - Little current market demand, but potential support if built Type III - Publicly owned/controlled land with market demand and development potential IN Economic Development Conference | © Greenstreet Ltd.

23 Homan Square, Chicago, IL 23 Urban mixed-use redevelopment of former Sears, Roebuck and Co. Headquarters (1907 to 1973) 55 total acres 14 acres of open space (25%) 308 for-sale and rental homes One million sf of adaptive reuse of commercial and institutional space to serve as “vessels for jobs” and community services Development: 1994 to 2000 Developed as a venture of The Shaw Company, Sears, Roebuck and Co., and the City of Chicago IN Economic Development Conference | © Greenstreet Ltd.

24 Vacancy to Vibrancy 24 U.S. Census Unemployment24%21%18% Single-Parent Households45%43%28% Families in Poverty51%31%22% Home Ownership20%32% Sources: U.S Census Bureau for the four census tracts around Homan Square (2715, 2716, 2904, and 2905) IN Economic Development Conference | © Greenstreet Ltd.

25 Redevelopment Strategy 25 Jobs: One million sq. ft. of adaptive reuse of commercial and institutional space to serve as “vessels for jobs” Community Services: Integrate new community center services with existing facilities and programs Diverse Housing: Mixed-income for-sale and rental homes IN Economic Development Conference | © Greenstreet Ltd.

26 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd. Site Plan 26

27 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd. 27 Administration Building

28 Economic Development 28 Adaptive reuse of commercial buildings for non-profit and business incubator space Chicago Police Training Facility Henry Ford Academy: Power House Charter High School Holy Family Lutheran School 3,000 jobs generated Spurred development of new grocery anchored community shopping center IN Economic Development Conference | © Greenstreet Ltd.

29 29 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd. Community Center

30 Community Services 30 Chicago Park District Recreation Center North Lawndale YMCA Robert Crown Center for Health Education Lawndale Christian Health Center Family Focus of North Lawndale Neighborhood Technology Resource Center IN Economic Development Conference | © Greenstreet Ltd.

31 31 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd. Mixed-Income Housing

32 32 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd. Mixed-Income Housing

33 New Life for North Lawndale units of mixed-income housing 50% owner-occupied housing from $90,000 50% rental housing from $395 per month Integrated housing products Housing for families earning between $15,000 to over $75,000 (1999) Decreasing subsidy over time – market rate homes sold for $185,000 (1999) IN Economic Development Conference | © Greenstreet Ltd.

34 Public – Private Partnership 34 Private Sector Sears, Roebuck and Co. LIHTC Equity Investors The Shaw Company Federal/State HOME CDBG City of Chicago Infrastructure New Homes for Chicago Chicago Park District IN Economic Development Conference | © Greenstreet Ltd.

35 Homan Square: Lessons Learned 35 Committed founders and patient capital Compelling vision to inspire partnerships Community that is vested in the result Sustainable organization (strong HOA) Homes + Jobs + Community Services Homes vs. “affordable” or “workforce” Design for safety and security orientation, fencing, security, police Creating value by design open space, green building, architecture IN Economic Development Conference | © Greenstreet Ltd.

36 Prairie Crossing, Grayslake, IL 36 Greenfield, 40 miles northwest of Chicago Surrounding landowners partnered to buy the site after an intense legal battle that would have allowed 2,500 units Zoning allowed up to 1,600 units 678 acres total 470 acres Open Space (69%) 395 units (.58 UPA Gross) 9% attached product 73 acres of commercial including TOD with commuter rail to Chicago and O’Hare Charter School Community Barn Community Supported Agriculture Boarding Stable 10 miles of trails IN Economic Development Conference | © Greenstreet Ltd.

37 Conventional vs. Sustainable Development acres 1,600 units 2.4 units per acre 667 acres 395 units.4 units per acre IN Economic Development Conference | © Greenstreet Ltd.

38 38 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

39 39 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

40 40 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

41 41 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

42 42 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

43 43 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

44 44 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

45 45 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

46 46 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd.

47 Prairie Crossing: Lessons Learned 47 Price premium above market increased over time: 1995:15% premium 2000:33% premium 19% is the home 14% is the community 2005:100% premium LID practices yielded savings vs. conventional infrastructure: Reduced Road Width:$178,000 Curb & Gutter:$339,000 Storm Sewer:$210,000 Sidewalk Alternatives:$648,000 _______________________________ Total Savings $1,375,000 A 2,000 sq. ft. home is: $250,000 in Grayslake, IL $500,000 in Prairie Crossing IN Economic Development Conference | © Greenstreet Ltd.

48 Creating a Dynamic Life Sciences Campus In the Heart of Fort Wayne, Indiana Randallia Campus Future Use Plan & Economic Development Strategy

49 While space programming and configuration activities are on-going, commitments of Parkview Health System to the Randallia Campus include: At least a 120-Bed Main Hospital Facility with a mix of inpatient acute care, post acute care and rehabilitation services, including skilled nursing facilities Full Emergency Room Services Family Birthing Services Outpatient Services Physician Practices Surgery Suites Parkview Behavioral Health (Will continue to be located on Beacon St.) These services will remain at the Parkview Randallia Campus after the opening of the Parkview Regional Medical Center in Understanding Parkview’s Projected Services at Randallia

50 HOBSON ROAD PARKVIEW MAIN HOSPITAL COMPLEX ST. ANNE’S RETIREMENT COMMUNITY VETERANS ADMINISTRATION HOSPITAL PARKVIEW BEHAVIORAL HEALTH CROSSROAD CHILDREN’S HOME PARKVIEW CAREW MEDICAL PARK CENTER Parkview Hospital in the Context of a Neighborhood of Institutions and Organizations IN TOTAL, A HEALTH AND MEDICAL CAMPUS OF APPROXIMATELY 150 ACRES ALREADY EXISTS IN THIS LOCATION. PARKVIEW OWNS APPROXIMATELY 65 ACRES. VARIOUS PARKVIEW SUPPORT BUILDINGS

51 Senior Care Behavioral Health Rehabilitation Orthopedics & BioMechanics Health Technology Life Sciences Education & Research HEALTH CARE DELIVERY EDUCATION & RESEARCH A CAMPUS POSITIONING STRATEGY Beyond a continued Parkview Hospital presence… WHAT IS OUR NICHE? Parkview Health believes that the Randallia Campus, in association with neighboring institutions, can become a National Center of Excellence in Senior Care, Rehabilitation and Behavioral Health Services.

52 THE FUTURE: A Center of Life Science Activity… Major Employment in higher paying jobs. Significant Education and Research Opportunities Focus on niche Areas and Themes for National Success Significant land for future Economic Development An Artist’s Conceptualization of a Year Vision of a Fort Wayne Life Sciences Campus

53 Indiana’s $69 billion health industry, defined as biopharmaceuticals, medical devices and instruments, healthcare delivery, laboratories and payors – accounts for over 20 percent of Indiana’s total state taxes and almost 10 percent of the state’s employment. Indiana is one of the nation's top four life sciences leaders as defined by number and concentration of life sciences-related jobs Getting in Alignment with Indiana Economic Development Strategy: An opportunity to tap the momentum and resources committed to Indiana’s Health and Life Science initiatives, such as BioCrossroads and OrthoWorx.

54 Getting in Alignment with Indiana Economic Development Strategy: An opportunity to expand the R&D capacity of Indiana’s Life Science initiatives 1 2, 3 4, 5, % of total university research in Indiana is in life sciences As the home to some of the best research institutions in the U.S., Indiana is unearthing innovative research, discovering the healthcare solutions of tomorrow. But, there is opportunity in Northeast Indiana. “Medical innovation has significant positive outcomes for the health of the nation, the health of the economy, and the health of Americans.” Battelle Institute

55 Indiana Adults with a College Degree: Indiana % Lumina Foundation Big Goal for % Additional number of degrees needed to meet workforce needs in ,737 Institutions can address these converging trends, with a more sustainable, cost-effective, public- private partnership model that integrates institutions into communities and leverages economic development strategies. Increasing Demand for Higher Education A State and National Challenge

56 Getting Started: Creating a Culture of Education and Research The Life Science Education and Research Consortium of Northeast Indiana In July 2011, 5 area education and research institutions agreed to form a consortium to create a culture of education and research at the Randallia Campus. Each institution is collaborating with each other to create dynamic and unique career paths or “ladders” for students – from K-12 through doctoral programs. The physical presence of the Consortium at the Randallia Campus will give unparalleled access for students, faculty and researchers to not only Parkview Hospital, but the tremendous health care assets of its neighbors, including the VA Hospital. Near-term activities are anticipated by Fall 2012, with full occupancy possible by 2013.

57 Reuse of Existing Buildings Provides Vessels for Jobs: Driving High Growth, High Wage Employment Source: Indiana Department of Workforce Development, 2011 High Growth and High Wage Employment: The Randallia Campus is an opportunity to align and support the implementation of local, regional and state economic development initiatives around life sciences. $33, Median Wage

58 Today, financing is always creative and the capital stack is getting taller Today, catalytic development is always a public-private partnership Make infrastructure work harder Do your own homework; know the market, ask the right questions Become a student of ‘best-practices’ – financial, regulatory, development You’ll always get what you always got if you always do what you’ve always done; if necessary, go outside your community to get what you want One size does not fit all; focus incentives by project to improve the developer’s return and/or reduce their risk Takeaway Thoughts on Redevelopment 58 IN Economic Development Conference | © Greenstreet Ltd.

59 Discussion Questions 59 IN Economic Development Conference | January 12, 2012 | © Greenstreet Ltd. When it comes to development, what type of community are you (proactive, reactive, supportive, or anti-growth)? What type of community should you be? Is a government's support for growth and development something that should be considered at a regional, rather than a local level? What are some ways that communities can make their infrastructure work harder, or more efficiently? In an era of limited resources, can long-term benefits outweigh the short-term costs? What type of development do residents of your community want? What type of housing choices do they have? Do your community's policies and incentives match up with local demand? Where does your community look for best practices? Within your region, the state, or nationally? What are some ways that you've brought attention to best practices, and how have you educated decision makers and the public? How does your community handle brownfields? Do you document them, help developers get funding, actively purchase and hold property, incentivize development, or help actively plan the site?

60 Urban Land Institute (Case Studies) : US EPA : IN Brownfields : IN Department of Environmental Management : New Markets Tax Credits : Historic Tax Credits : LIHTC : CDBG : HOME : NSP : hud.gov/offices/cpd/communitydevelopment/programs/neighborhoodspg/ Resources 60 IN Economic Development Conference | © Greenstreet Ltd.


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