LAI KeyNotes: February 2010

Editor's Column

Lou Slade

Dear Colleagues,

A great land economics experiment is underway in the Washington metropolitan area that I’ll try to capture in this month’s column. We’re experiencing one of the fastest creations of a large new city in history. Since the middle of the last century, Tysons Corner in Fairfax County VA is developing from a rural area into a high-density cosmopolitan city center that will ultimately have two forms of rail transit and a residential population and workforce that will place it among the ten biggest cities in the U.S.

When we moved to Washington D.C. in 1971, Tysons Corner consisted of a brand new regional shopping center, a Holiday Inn, a couple of new moderate-sized elevator office buildings, and a bunch of highway-oriented businesses. The Capital Beltway was opened to traffic in the mid-60’s, and Dulles Airport and Access Road opened in about 1970; that infrastructure combination spawned that level of development at Tysons. A woman I worked with at the time said her daddy had sold the family pig farm to the shopping center developer.

In the past 39 years since we moved here, Tysons Corner has become Fairfax County’s center with a second regional shopping center across the street from the first, several hundred thousand square feet of other retail including big-box stores, discounters, strip centers, a high-end “avenue” that includes a Tiffany’s store, and every other form of retail you can imagine. Today, there are 18,500 residents, and 112,600 jobs. Tysons Corner is currently the 12th largest commercial business district in the U.S. Joel Garreau cited Tysons Corner as one of the biggest case studies in “Edge City, Life on the New Frontier” published in 1991.

The two Tysons’ regional shopping centers have intensified their density in phases and now include structured parking and other non-retail uses. Many of the office buildings are on sites with a 1.0 floor area ratio and therefore have structured parking. The transportation network serving the area consists of a very limited road network: two freeways (Beltway and Airport Access Road), two major arterial highways, a few high capacity circulation roadways and some smaller local streets. The grid of streets is very sparse, and public transportation service and usage is inconsequential. No one walks anywhere in Tysons Corner except within the malls.

About 20 years ago, Fairfax County and the Tysons Corner business community recognized where the area was headed, and they began to collaborate on several studies to determine how to exploit all the best attributes of the area, develop it to a much greater density, and convert the suburban transportation system into an urban environment to disperse vehicular traffic and to encourage walking and transit use. The early attempts failed to go anywhere, but in the last five years, a great experiment has taken hold. In 2008, a set of Task Force recommendations were approved that authorized the development of a new comprehensive plan. In 2009, Federal funding for the Silver Line extension of the Metro rail system was authorized and appropriated, and the first of two phases is under construction. That phase will have four stations in Tysons Corner connecting it to the existing 103 mile rail network and ultimately out to Dulles Airport.
The third draft of the comp plan was recently released. Over the next 40 years it anticipates: a 500% increase in the residential population to almost 100 thousand residents, a 70% increase in jobs to over 190 thousand, the development of a dense well-connected urban street grid with street frontage development and streetscape, people-friendly public spaces, and the development of a ubiquitous local transit circulation system that is envisioned to include a surface rail trolley system.
The implementation of this plan is the great experiment. It will require a number of conditions to be in place that would be incentives for the replacement of the entrenched investments with a totally different pattern of urban real estate investment. The proposed street network attempts to respect property lines, but the blocks are smaller that most of the existing land parcels, and redevelopment approvals will require completion of great segments of the street and transit network. This means that for a property owner to redevelop to a higher density, he must demolish his existing building(s) and construct one or more street segments through his site. Then he may have to wait for his neighbors to do the same until the grid has reached a required level of completion. This will require cooperative proffer deals among land owners, private land consolidation, and government intervention and investment.
Tysons City is poised to reach its next level of evolutionary growth. Check it out at: http://www.fairfaxcounty.gov/dpz/tysonscorner/drafts/tysons_draft_plan_011510_clean.pdf

Lou Slade
International LAI Editor
louis.slade@goroveslade.com

A special plea to all Chapter officers

We need your help in getting the word out on the great experience that the Land Economic Weekends (LEWs) provide. These include important looks behind the real estate scenes in every city they are held in – with the local development community providing information that you won’t get anywhere else – I am sure that all of our colleagues who went to Vancouver are feeling that as they watch the Olympics! The LEWs provide an incomparable opportunity to talk in depth with professionals from across the globe and also learn much more of the role LAI plays in the real estate scene by attending the LAI Board meeting. These conversations include hearing about hot discussion topics and ways other chapters do their work.
Please try taking printed registration forms to your meetings and spend a few minutes talking about the upcoming LEW in Minneapolis! You might also consider sending this KeyNotes to your membership so they can read what the Minneapolis – St. Paul community will share with us. And do plan to join us this May!

Lou Slade, International LAI Editor

In Memoriam

London Chapter

Robert James McIntosh Gibson Died Thursday 28 January 2010 at Hospice in the Weald, Pembury

Bob was born in Glasgow and although he went south in his early days on the road to Carlisle, you could not take Scotland out of him. He began his career at the BBC and then joined the Royal Navy and truly saw the world. When he returned to the UK, he joined the Public Trustee Authority which gave him a taste for fund management and investment. This neatly dovetailed to his joining the Electricity Supply Nominees (the third largest pension fund in the UK) and he became its Chief Executive. After selling the fund management business, he formed KASPAR Associates Ltd with his co-director and partner, Dr Karen Sieracki. They continued to work in fund management, the biotechnology sector and mergers and acquisitions.

Bob and Karen travelled the world for work, thought, analysis and inspiration. He died of idiopathic pulmonary fibrosis, a rare disease which commences with the absorption – quite possibly unwittingly – of toxic dust or spores.

He will be remembered as a caring, cultured, intelligent, gentle and interesting man and many of us will have fond memories of him. His dry, wry wit and his off-hand observations were a characteristic hallmark of his conversations which engaged people and pushed the boundaries of inquisitiveness.

Bob leaves his wife Dr Karen Sieracki who has been the London Chapter President for 5 years and last October in Chicago became the first Lady President of Lambda Alpha International. Both Bob and Karen have worked tirelessly for Lambda Alpha over the last 10 years and were instrumental in the formation of The Irish Chapter of Lambda Alpha. It was Bob’s idea that we hold the 2011 Spring LAI Economic weekend in Scotland and before his illness did a lot of work towards this.

Bob will be greatly missed and the members of the London Chapter extend their heartfelt condolences to Karen and the family at this very difficult time.

Mari McMorrough Kavanagh, Hon. Secretary LAI London Chapter

Chapter Corner

The Chapter initiated four new members at our meeting of Tuesday, February 16, 2010. We are also considering the priority topics and speakers for the chapter to focus on during this first year. Of particular interest is co-hosting programs with organizations like the local ULI chapter to expand their outreach. This can also help expand our outreach because LAI chapters include everyone who touches a real-estate deal. It is hoped that we can bring in representatives from all sectors including those in the “public development” fields like the planning department, housing and redevelopment fields. These outreach efforts will also help expand the chapter’s mailing list.

Of great interest is the role and responsibilities that other chapters have assigned to their officers. It would be helpful if other chapters could share some of their ideas and solutions. I look forward to hearing your suggestions

Bill Struever Reflects on Realities of Real Estate Development in This Economy

From his early start rehabbing one house at a time in the Federal Hill neighborhood, Carl William “Bill” Struever, President of Struever Brothers Eccles & Rouse (SBER) has been a leader in redefining the urban landscape in Baltimore and other cities in seven states on the East Coast. The company’s hallmark is the conversion of obsolete and often historic buildings in disinvested neighborhoods into mixed-use properties (e.g., Tide Point and American Brewery in Baltimore, and the American Tobacco Company in downtown Durham, North Carolina).

When Bill talked about these signature properties and how they helped resurrect the cities’ industrial heritage, by catalyzing the revitalization of distressed neighborhoods, it inspired the members and guests at the 2010 Kick-off program lunch on January 20th. The 2001 LAI Gerald Hines Humanitarian Award Winner, Struever shared how the recession has impacted SBER and how he is learning humility. He is a fervent believer that working in cities is at the heart of where action is needed--on public education, health, poverty, and race.

As a former Board member of the American Diabetes Association, he is a strong proponent of a healthy urban life style, understanding that mixed-use transit oriented projects are the sweet spot of real estate in the future. He credits his mentor, Jim Rouse on teaching him how for -profit entities can prosper by dealing with the hard issues of American cities economically and socially.

Ackneil “Neil” Muldrow, CEO of Parker Muldrow and Associates and LAI’s Vice-President of the Eastern Region and former President of LAI-Baltimore Chapter chairs the Small Business Task Force. The Task Force was charged with presenting Governor Martin O’Malley with recommendations to strengthen and support Maryland’s small businesses and create jobs.

On December 9, 2009, Governor O’Malley joined the members to formally accept their recommendations. The Task Force, which is made up of small business owners, legislators and leaders of several State and local agencies presented a report on the key issues impacting small businesses and a list of strategic recommendations on expanding access to capital, procurement, regulatory reform, sustainability and workforce.

L-R - David Kirk, president of Boston Chapter; James Rooney, Executive Director Massachusetts
Convention Center Authority; and Lowell Richards, MassPort Director of Real Estate.

The Boston Chapter met with Jim Rooney, Executive Director Massachusetts Convention Center Authority (MCAA) on February 8, 2010 at the Boston Convention and Exhibition Center (BCEC) to discuss the “Top 5” strategy announced November 23, 2009 by the MCAA. Jim Rooney presented the master plan completed by Massachusetts-based Sasaki Associates for the 62-acre BCEC site, which includes the undeveloped 22-acre site currently used for parking, and the findings of convention consultant Convention Sports & Leisure of Minnesota. The consultants reviewed the recent and successful record of BCEC as well as the Hynes Convention Center in the Back Bay, and recommended a strategy to move Boston from ninth position to among the Top Five North American Destinations for meetings as well as a leading international destination. The MCAA formed the Convention Partnership, a stakeholder working group, to steward the public dialogue about the merits and alternatives and report yearend 2010 to the Mayor, the Governor , the Senate President and the House Speaker on the initiative. The expansion plan includes options for more space and more hotel rooms to meet and beat the competition. The Boston Chapter will meet on April 6, 2010 with State Senator Stan Rosenberg to discuss casino development in the commonwealth which is being revisited by the legislature and the governor.

Streetcars are coming to the District of Columbia. (Or, coming back, as the city once had an extensive trolley network which was abandoned in the late 1960’s.) At its regular monthly luncheon in January, the chapter heard from Scott Kubly, the District of Columbia Department of Transportation’s Director of Progressive Transportation, and Richard Bradley, Executive Director of the Downtown BID. Kubly described three current first phase initiatives which are under way: an H Street/Benning road line planned for completion in the summer of 2012, an Anacostia Starter Line, with roughly the same completion date, and a K Street Transitway presently designed for rapid bus. Ultimately, the plans are for 37 miles of streetcar line, built in 3 phases and expected to carry 140,000 riders per day. One of the issues currently being debated is whether overhead wires are necessary. Kubly described a combined battery/wire system being investigated that will allow cars to travel a mile or so on batteries, thus preserving important viewsheds, and then to recharge from overhead wires while traveling for short distances. The District is next looking to select an operator for the system.

The chapter’s new board met for the first time in January. In addition to the officers reported in the January Keynotes, other board members and their areas of program/recruitment responsibility are: architecture, landscape architecture and civil engineering: David Haresign; economic development and real estate management: John Schlicting; government, public administration and communications: Bill Dowd; land development: Bob Elliott; land use and development law: Ed Rogers; real estate economics, finance and appraisal: Alvin Nichols; teaching and research: Uwe Brandes; historic preservation and conservation: Emily Eig; urban and regional planning: Rosalynn Hughey; and environment and land conservation: Alan Harwood.

From the panoramic view from the top of the IDS Tower to spectacular vistas from a Mississippi River paddleboat, we’re rolling out the red carpet for the upcoming Land Economics Weekend. Highlights of the meeting include tours of the world-famous Guthrie Theater; Target Field, the new Twins ballpark; and the Central Corridor Light-rail Line currently under development. We’ll explore everything from suburban revitalization in upscale Edina to urban redevelopment on the riverfronts in Saint Paul and Minneapolis. Our base of operations is the elegant Westin Hotel, recently converted from a 1940s bank with the help of historic tax credits.

Monday, January 25, 2010
The Pacific Club 11:30-1:30 PM
Sponsors: Carlsson Public Relations, Dan Carlsson
Sheppard Millin Richter & Hampton LLC, Deborah Rosenthal

Hasan Ikhrata, Executive Director
Southern California Association of Governments (SCAG)
“SB-375”
(Is it “Transportation & Land Use planning or Greenhouse Gas emission regulation?”)

Based on the presentation from Mr. Ikhrata, he gave his answer to the hotly debated and controversial SB 375 as California’s attempt for Transportation & Land Use planning. SCAG, the largest MPO in the USA with 83 members, 6 counties and 19MM people in SoCal is responsible for such planning. With their successful membership of 174 out of 189 cities being members, the collaborative regional and sub-regional transportation and land use planning should take place fairly easily or will it?

The ongoing regional planning has been affected by the ‘emission saga’ which has grown with the developments of California enacted legislation in September 2006 known as California Global Warming Solutions Act, AB-32. AB-32 directs the California Air Resources Board (CARB) to establish a comprehensive program that would reduce the state’s greenhouse-gas emissions to 1990 levels by 2020, a roughly 25% reduction under business as usual estimates. The regulation requires producers, refiners and importers of gasoline and diesel to reduce the carbon footprint of their fuel by 10% over the next decade. But wait….where is the Transit-Oriented Development (TOD) to assist in this reduction and a recent controversy has highlighted the loss of one million jobs based on these requirements. Mr. Ikhrata also shared that there needs to be some fundamental structural changes in the plans due to the enormous California deficit of which 85% of the budget is already spoken for. How is this all going to be paid for?

Then in 2008, the California State Legislature passed SB 375, which sets a framework and target dates to achieve Green House Gas reductions. This legislation impacts transportation planning, growth and development, housing, and land use decisions, hence the focus of this presentation. SB-375 also expands the role of SCAG in setting regional targets. This is where SCAG identifies some major flaws:

Conclusion: So how does this all affect development……to be continued Monday, February 25th with our February speaker, Mr. Roger Grable, Land Use.

New Chapter Fund Provides First Student Awards

The original goal of Lambda Alpha International of "fostering a closer association with academia and professionals involved with land economics and related fields" remains one of the cornerstones of the Society. In support of this worthy goal, the Vancouver Chapter initiated a permanent fund in 2007, the Lambda Alpha International Vancouver Chapter Fund, to support awards for students at their local universities. The fund was established at the Vancouver Foundation, the largest community foundation in Canada managing more than 1,200 separate funds worth more than $660 million. Our Lambda Alpha fund realizes the economies of scale of being part of such a large pool of investment capital while enjoying the quality investment performance and low administrative expenses characteristic of community foundations in Canada. (Richard Ely would be proud of this prudent stewardship of the funds.)

The Vancouver Chapter made an initial donation of $21,125 and members have subsequently made numerous individual donations to increase the permanent fund to $25,804. The Vancouver Chapter determined that the fund would initially support two awards of $500 per year to be granted to students in the Graduate Program in Urban Studies at Simon Fraser University (SFU) and the University of British Columbia (UBC), our two major public universities in British Columbia offering programs in urban studies and real estate.

The first recipient at SFU is Thomas Walker, a graduate student in the Urban Studies Program. Simon Fraser will announce their second award recipient in early 2010.
The first recipient at UBC is Michelle Seto, a student in the Real Estate option, one of the areas of specialization forming the four year full time Bachelor of Commerce program in the Sauder School of Business at UBC.

The Vancouver Chapter congratulates these first two award recipients and looks forward to supporting many more worthy students in the future by increasing the amount of the permanent fund supporting these awards.

About 50 members of the Vancouver Chapter gathered on the evening of January 20, 2010 to hear Penny Ballem, Vancouver’s City Manager, reflect on her first year in the job. A medical professional, Dr. Ballem came to the City after serving as Deputy Minister of Health for the Province of British Columbia. She shared her thoughts on some of the unique circumstances of serving in local government and outlined her management philosophy of leadership and collaboration, which have been particularly important as the city prepared for the 2010 Olympic and Paralympic Games, whose venues are located in five different local government jurisdictions. Her address was followed by a lively question-and-answer period, in which Dr. Ballem assured the audience that it would still be possible to do business in the city and with the City during the games.

LEF is a not-for-profit charitable foundation organized to administer an investment fund which provides grants for research projects related to land economics. Over the past three years LEF has committed capital (5% of assets) to a number of significant and worthwhile endeavors across the country on a matching basis with other non-profit entities. The following are projects LEF has funded to-date.

Amount	Project
$5,000	Safe Horizon – A mediation program designed to train volunteers in three New York locations to assist the underprivileged in dealing with aggressive landlords. Highly successful program being expanded nationally.

$5,000	San Diego Canyonlands Video – Created a video on a collaborative basis with several conservation organizations to expose on cable television the critical need to preserve open space canyons as a natural link to other urbanized communities in the county.

$5,000	Arizona State University Student Chapter – Provided the initial funding to create a graduate student chapter in real estate to function cooperatively with LAI’s Phoenix Chapter; a model for other Chapters.

$30,000	Burnheim Centennial Celebration – An advanced commitment for LAI to participate with other major real estate organizations in 2009 to recognizing the unique skills of Daniel Burnheim, credited with the masterplanning of Chicago, San Francisco, Washington D.C., Manila, etc.

$4,500	Ross Minority Program – In cooperation with USC’s Marshall School of Business, LAI is participating with the partial sponsorship of minorities in attendance in a comprehensive, two-week program involving community redevelopment projects, primarily in neglected areas.
$5,000	Light Rail Value Impacts – With the completion and now operational Light Rail system in Phoenix, the Foundation underwrote the cost of updating a ULI study addressing the impact on land uses and values surrounding the stations along the new rail line. The Master’s Thesis is to be submitted and published by Arizona State University.
$10,000	San Miguel de Allende Land Use Study – A technical work shop involving 15 participants from multiple disciplines will be assembled in Mexico to provide guidance for urban growth patterns, transportation, water management, conservation, etc. for this community of 80,000 people. LAI will be participating with six alliance partners.

LEF has carefully investigated a number of other proposed projects that it did not fund, primarily because of capital constraints at the point in time the request was made, others due to conflicts with our grant criteria. Without detail, the following were submitted and considered.

Amount	Project Name
$10,000	Tenement Museum Program

$10,000	World Urban Forum

$5,000	University of Memphis Scholarships

$5,000	California State University Scholarships

$100,000	Lewis Bolan Scholarships (John Hopkins University)

$5,000	Chicago Architecture Foundation

$10,000	DePaul University

$10,000	California State University (Fullerton) Scholarships

The principal thrust of our efforts has been to promote LAI recognition on a broad scale basis, with particular emphasis on local chapter involvement at numerous levels. We look forward to considering your Chapter’s application, the process can be found on LAI’s website. Please do not hesitate to contact any of the officers for guidance if needed, that is what we are here for.

LEF Board

Position	Name	Chapter	E-mail address
LEF President	Steven R. Gragg, MAI, FRICS	Phoenix	steven.gragg@cushwake.com
LEF Vice President	Ronald L. Buss	Los Angeles	bussshelger@pacbell.net
LEF Treasurer	Frank A. Clayton Ph.D.	Simcoe - Toronto	frankclayton@bell.net
LEF Secretary	Jack Swenson	Ely - Chicago	jswenson@camiros.com

Download this article in word format

LEF Grant Program (pdf)

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Minneapolis, Minnesota, Spring Land Economics Weekend
May 13-15, 2010
The Westin, Minneapolis, MN
Hotel Reservations Rates:
*$119.00US + taxes Single/Double
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Watch for more information in the coming months!

The John Marshall Law School, LAISA Student Chapter
Amanda Ault
Matt Butler
Vishal Chhabria
Monika Danecka
Sheraz Darr
Sammy Dorf
Geneva Garcia
Jim Gentile
Robert Gienko
Barry Glass
Jeff Hulbert
Joseph Menges
Anya Nikogosian
Brendan O’Connor
Brian Pilon
Evan Sauer
Louis Scanniccho
Marisa Sharko
Ericka Stawiarski
Michael Ward
James Wigoda