Crafting the New Normal

Regenerative Value CaptureScott Polikov

12.7.12

Who primed the pump?

But what about today?

Opportunity?

Unfounded fear or legitimate criticism?

Can we align underlying economic realities?

An afterthought or a core consideration?

An afterthought or a core consideration?

What does the past tell us?

The new de facto Master Developer

Use

Operations

Form

Form

Operations

Use

PREVIOUS REAL ESTATE OFFICECONVERTED TO PET STORE

PREVIOUS HVAC COMPANY CONVERTED TO A COMMUNITY OUTREACH CENTER

MAIN STATIONDeveloper partnered with Duncanville to

build a Mixed-Use property located at old city hall site.

22,000 SF Building

11,000 sf of RETAIL space on street level11,000 sf of LOFT space on second level

FUTUREMAIN STATIONSITE

FUTURERAILROAD FLATS SITE

PROJECT MAIN STATION

• $3,000,000 estimated project cost

• $800,000 City ED Corporation grant/land

• $400,000 developer’s contribution

• $1,800,000 ED Corp. loan

MAIN STATION RETAIL/LOFT

MAIN STATION RESULTS

• ED Corp Retains 30% Ownership• Developer has 70% Ownership• Rents at Main Station double

compared to down the block• Total city taxes- + $1 Million• Momentum for Main Street Form-Based Code (FBC)

Initiative

Assessed development potential, leveraging Main

Station Project

Illustrative Corridor Master Plan and new Main Street Section

Master plan, regulating plan and downtown form-based code

Calibrated code from Main - Station scale and market

potential

Market Phasing build out Analysis Phase 1 Phase 2 Phase 3 Phase 4

New retail in mixed use (sqf)

36,000 51,250 230,250 46,500

New retail in live/work (sqf) 23,400 14,400 0 0

Town homes (units) 109 0 0 0

Live/work (units) 39 20 0 0

Office (sqf) 28,625 25,625 111,875 15,125

New lofts (units) 115 96 132 65

Fiscal Impact

Existing Value:

$48,206,147

Property

Value

Property Tax

Revenue

Retail

Sales

Sales Tax

Revenue

Total Tax

Revenue

Existing + Phase 1 $101,484,897 $370,820 $11,880,000 $237,600 $608,420

Existing + Phase 1-2 $132,156,147 $584,292 $25,010,000 $500,200 $1,084,492

Existing + Phase 1-3 $200,634,897 $1,060,904 $71,060,000 $1,421,200 $2,482,104

Existing + Phase 1-4 $218,328,647 $1,184,053 $80,360,000 $1,607,200 $2,791,253$2,791,253

• Almost $3 Million city taxes per year at buildout

MAIN STREET RECONSTRUCTION

• Initial 3 Block reconstruction• Based on Form-Based Code Street

Section• Received $1.5M NCTCOG Grant for

sustainable community approach• City provided 20% match (no brainer)• Developer must redevelop two sites

BEFORE

AFTER

Developer agrees to redevelop two sites as part of $1.5M NCTCOG (MPO) grant to reconstruct Main Street:

• 212 N. Main Street• 111 E. Davis Street

NCTCOG REQUIRES DEVELOPMENT

111 E. Davis

PROJECT DETAILS

• Planned Two Story Studio/Loft – 2 Loft Space (opportunity for owner

occupied)– 2 Retail Spaces

• $100,000 Value on Tax Roll Today

• Value Upon Completion est. $700,000

• $200,000 Down Payment Incentive

• Under Construction!

RAIL READY (TOD)

Ready for extension of DART rail and setting up value capture for funding

Summary of Strategies

• Public role should be utilized more creatively

(e.g., credit)

• Regional funding tied to demonstrated private

investment

• Eligible private investment = focus on owner

occupied

• Embrace and support pioneer developers

Summary of Strategies (cont.)

• Form-Based creates predictability and attracts

investment

• “Complete Streets” must include development

context

• “Rail ready” sets stage for value capture even

if no rail

www.gatewayplanning.com

www.montewanderson.com