A Brief History of Mixed-Use Developments 2-15-2013 - 201302201456235825

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A Brief History of

Mixed-Use Developments
Stephen J. Ferrandi, Principal
Director of Residential Land Brokerage
KLNB Commercial Real Estate

Mixed-use Development Needs


a Minimum of Three
Revenue-producing Uses

Residential
Manufacturing
Entertainment
Community/Cultural
Religious

Office
Hotel
Retail
Parking

An Early Example of a Mixeduse Community


The medieval village is a perfect
example of a functional, productive
community, incorporating all of the rules
of mixed-use development.

The Medieval Village


A medieval village was typically located
on a hill protected by walls. The smaller
the circumference of the walls, the more
dense the village.
By building all property uses close
together, the walls were able to protect
the village more securely than if the
village were spread out over many
hundred acres.

The Medieval Village


As the population of a village grew,
density was contained within the
limitations of the walls until no further
growth could be supported. Only then
were new ramparts constructed.

Rules for Building


a Medieval Village

Compactness.
Density.
Mixed uses.
Limited transportation systems.

The ramparts of Quebec City the only


remaining fortified city walls north of Mexico.

As cities sprouted from


medieval villages, they
adopted many of the
principles common to a
mixed-use community.

We can see the adoption of mixed-use


principals in this old map of London.

In this 1728 map of Manhattan, the compact city


shows multiple uses located within just a few acres.

Boston, 1814

As the populations of early


American cities swelled to
dangerous levels, local
governments began to
mandate segregation of uses
for the health and welfare of
its citizens.

New York, 1890

Zoning was first used as a


method for local government
to control development in
New York City, in 1916.

The Concept of Zoning


Local government has the right to
regulate how a private property can
be developed under the police powers
granted to government.

Ambler v. Village of Euclid, Ohio

The Village of Euclid, Ohio, down-zoned a


parcel of ground owned by the Ambler
Realty Company from industrial, which
was valued at the time at $10,000 per
acre, to residential, which was valued at
$2500 an acre.
Ambler sued, and in 1926, the U.S.
Supreme Court validated the concept of
zoning.

After the case was upheld in


court, the concept of Euclidian
Zoning wherein land use is
segregated into separate
distinct areas became the
dictate by local governments
when deciding how and where
their town should grow.

Euclidian Zoning Map

Three or More Uses Means


Larger Scale
Though it is possible to develop a
small-scale mixed-use project, the
typical mixed-use project often
exceeds 100,000 SF.
A mixed-use project can even be as
large as several million SF.

Mixed-use Development MUST


Exhibit the Following Attributes:

Be a development project in conformance


with a coherent plan.
Mixed-use components should be
significant for example, more than site
serving convenience facilities.
Be pedestrian friendly.

Cleveland Union Terminal


Now called Tower City Center

Opened in 1930, the project was an early


true example of mixed-use, featuring:
Train station,
Harvey shops and restaurants,
Higbees Department Store,
18-story Medical Arts Building,
18-story Midland Building,
18-story Builders Exchange Building,
52-story Terminal Tower,
Hotel Cleveland,
Post Office.

Todays Tower City Center

Rockefeller Center
Built in 1931.
19 commercial buildings.
Connected via an
underground concourse
8,000,000 SF.
22 acres.

West Edmonton Mall


in Alberta, Canada
Over six million SF that is home to 800+
stores and services, including a cinema
multiplex, nightclubs, an indoor lake with
sea lion habitat, the worlds largest indoor
water park, a NHL regulation-sized ice rink,
a hotel, parking for 20,000 vehicles, and a
full size indoor amusement park.

West Edmonton Mall

Physical and Functional


Integration
A vertical mixing of project components
into a single mega-structure, often
occupying only a single city block.

Baltimores
Renaissance Harborplace
586-room hotel,
four-story shopping mall,
multi-story office complex,
large underground parking
arcade.

DC-metro Area Mixed Use


Reston Town Center
Outdoor venue
with 50+ retail
shops, 30
restaurants, a
multi-screen
cinema, a hotel,
a pavilion for
festivals and
winter ice
skating.

DC-metro Area Mixed Use


National Harbor
is a 300-acre
development on
the shores of the
Potomac River,
with a convention
center, six hotels,
restaurants,
shops, outdoor
festival area, and
condominiums.

Physical and Functional


Integration
Interconnection of project components
through pedestrian-friendly connections,
such as sidewalks along streets, interior
walkways, enclosed corridors,
underground concourses, retail plazas
and mall areas, escalators, and bridges
between buildings.

Parking
Integrated shared parking is a key
component, improving land-use
efficiencies and reducing costs.

Successful Mixed-use Is
Pedestrian-friendly
The second criterion distinguishing mixeduse developments from other real estate
projects is pedestrian circulation and
orientation.
How a pedestrian is invited into the space
and is then able to freely move from
product type to product type is key to a
successful mixed-use project.

A Tidbit of Wisdom
When discussing mixed-use
development, stop thinking of
buildings as buildings and begin
thinking of buildings as communities.

Questions to Ponder

Why are you doing a mixed-use project?


Does it make economic sense?
Why this location?
Why will this project be a success?
What is the right mix of product types?
What are the negative aspects of the
project?

Mixed Use Development


Is Expensive
For the developer, costs dont go up
incrementally; they go up
exponentially.

Another Tidbit of Wisdom


Mixed-use projects experience the
greatest economic trouble when one
of the components is developed at a
scale, quality, or cost level that
requires other components to
subsidize it.

Successfully Developing
a Mixed-use Project
It all about the demographics, the
competing products, and the size of
the market.
How can the developer penetrate the
market, and why this location?

Why Mixed-use Projects Fail

The project was built in an area with


insufficient housing density.
Cost to construct commands rents that
consumer traffic cannot support.
There are too many competing projects
for customer dollars rent or retail.
Wrong mix of uses.

A Final Tidbit of Wisdom


We cannot FORCE mixed-use
development the property and market
have to be right.
If local government mandates
percentages, rather than allowing the
developer and its team of experts
decide, the project will probably fail
miserably.

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