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YLG’s panel on development in the post-RDA world packed in a full house. 109 people came to hear Kim Havens of Wilson, Meany Sullivan, Michael Yarne of SF OEWD, Chris Lynch of Jones Hall and Parker Colvin of Stone & Youngberg tell about other redevelopment tools for life without Redevelopment Agencies.

There are over 400 RDAs in the state of California, and recent legislation dissolved all of them as of February 1, 2012. Since 1945, these agencies have been spurring redevelopment in blighted areas creating jobs and housing (market rate and affordable) using tax increment financing. The San Francisco Redevelopment Agency has completed massive redevelopment of project areas such as Yerba Buena, Bayview Hunters Point, Western Addition, South of Market, Visitation Valley, Mission Bay and more.

This leaves everyone asking the question, how will we do these types of projects again?

Well, Wilson Meany Sullivan will show us with their Bay Meadows and Treasure Island large development projects. Kim Havens presented WMS’s Bay Meadows which turns 83 acres of a former racetrack into 1,171 units of housing as well as retail, office, parks, infrastructure and affordable housing. Stone and Youngberg was able to place the project’s first bond at 6% showing there is a market for non-rated bonds for the right investors and the right deal. Other deals Parker noted were getting 8% and the volume of CFDs making it to market has been very slim in the past few years. Wilson Meany Sullivan and City of San Mateo created a Community Facilities District to finance the project with 3 different tax rates for the different property owners with an overall effective tax rate of 1.7%. The panel explained the pros and cons of CFDs as financing tool. The bond is secured by a special tax and not the land, and requires a vote of 2/3rd approval if there are 12 or more owners in the CFD area. Michael Yarne added his experience developing the Mint Mall Plaza with a CFD and Business Improvement District to fund ongoing maintenance of the plaza area. A strong take-away for the CFD process is to create the CFD when you only have one or two landowners to move through the voting process relatively smoothly. Michael Yarne is also spearheading a BID (or Community Benefits District as they are called in San Francisco) in Rincon Hill area, which will comprise of over 10 owners to fund operations and maintenance of new green space in the area.

Lastly, the panel outlined the use of Infrastructure Finance Districts in such cases as Park Merced and Treasure Island. The IFD is similar to Redevelopment in that it uses tax increment but is narrower in eligible uses of the bond funds and the tax increment period is shorter. It’s mainly for public uses such as sewers, roads, parks and libraries but in wake of Redevelopment fallout there is legislation proposed to broaden the eligible uses and add a 20% housing set-aside, among other proposals. Park Merced is utilizing IFD financing and re-routing the SF Muni light rail M line. Yarne noted that IFDs do something RDAs did not, since creating an IFD can be in a post blight area, you are able to reinvest in an area if you can find a value for it. The IFDs are newer to the bond market, Parker noted, and some investors might be wary of tax increment since they learned from RDA bonds.

Overall, the panelist conveyed that with Redevelopment gone developers will be getting creative and moving into new municipal bond markets to see big scale projects move forward.

For more info go to: http://www.ulisf.org/events/ylg-presents-redevelopment-and-beyond-municipal-tools-to-help-fund-urban-renewal-and-growth/

And keep coming to ULI YLG events!!

Authored by: Faith Kirkpatrick, Senior Project Manager, Bernal Heights Neighborhood Center.

The building tour will highlight several innovative features such as:

• Building design and performance elements such as shading devices on building façade, daylight harvesting and high-performance curtain wall;
• The “Living Machine,” a gray- and black-water reclamation system;
• Building-integrated wind turbines for onsite power,
• Photovoltaics and other site-generated energy strategies; and
• Innovative frame making it one of the most quake-resistant in San Francisco

Tour leaders:
Shelby Campbell, Project Director-525 Golden Gate, San Francisco Public Utilities Commission
David Hobstetter, Principal of KMD Architects
Brook Mebrahtu, Project Manager, San Francisco Department of Public Works

NOTE: Tour limited to 30 participants.

$25 Members / $65 non-members
$10 Public Members / $45 Public non-members
$20 YLG Members / $55 YLG non-members
$10 Student Members / $20 Student non-members

$15 unemployed member
$10 unemployed YLG

Most seats in the meeting room at the Ferry Building venue were filled.

First, an overview described “Redevelopment: why we loved it”, including last year’s dissolution under AB26.  Powers lost by local agencies were outlined. The complicated dissolution process was described.

Then each panel member, in turn, described the remaining policy tools available for financing improvements and accomplishing some of the goals formerly accomplished by Redevelopment Agencies.  The panelists used case studies to illustrate how these tools have been used.

Kim Havens described how the Bay Meadows project used Community Facilities District (CFD) financing to raise $92 million in 2011, the first large-scale, new-development CFD since the bank crash in 2008.  This is a large, single-owner project.

Michael Yarne described how Mint Plaza used CFD and Business Improvement District (BID) financing for a 20,000 square foot, multiple-owner urban plaza adjacent to the Old Mint.  An important component was the formation of an independent not-for-profit legal entity under ABAG’s auspices. The CFD bond issue raised $3.3 million.

Parker Colvin described the investor view of land secured financings. Prior to the crash, there was a reasonably deep capacity among a subset of municipal bond investors. Since the crash, there is limited capacity, restricted to projects characterized as urban infill with multiple uses and a diversity of taxpayers in high net worth demographics near employment centers.  Only this type of project can access the market prior to vertical development. Location and development status are more important than just value-to-lien ratio.

Chris Lynch described Infrastructure Financing District (IFD) statutes and formation, including the special case of San Francisco’s own IFD’s used, for example, in the America’s Cup projects.  Mike Yarne described how the Rincon Hill projects used a combination of IFD, CFD and BID financing to capture incremental value for payment of impact fees and construction of public improvements.   Mike also described how the Parkmerced project is using a Development Agreement and IFD financing for very large — $500 million — improvements including a transit line extension.

Kim Havens described recent changes in the Treasure Island improvements financing, which combines CFD and IFD.  The switch to IFD from redevelopment tax increment actually simplifies some of the project, in part by reducing the affordable housing requirement.

Parker Colvin discussed the market for IFD bonds, which has yet to emerge.  Investors feel burned by experience with some redevelopment Tax Allocation Bonds issued under aggressive assumptions prior to 2005.

Michael Yarne discussed the potential for innovation using Tradable Development Rights, used in certain historic-preservation projects.  These TDR’s make a commodity out of Floor Area Ratio development rights.  Another tool to consider is Transfer Fees, a private covenant recorded in deeds that collect a small fee into a fund at every subsequent real property sale.  BART used this tool in its Dublin station TOD project.

The panel concluded by taking questions and engaging with attendees over wine and cheese.  Many attendees made the observation that all of these “post-RDA” tools were implemented on projects already in the pre-crash pipeline, on high-value projects in high-income demographics, by very sophisticated public sector staff working closely with sophisticated and well-capitalized private developers in situations not requiring the missing powers of redevelopment such as eminent domain, area planning, parcel assembly and long-term bond repayment schedules.

Authored by: Steve Lawton, Main Street Property Services, Inc.

Drew Hudacek, Chief Investment Officer at Sares Regis Northern California, spoke first. Besides words of welcome, he updated the audience as to the current 2012 South Bay program. In addition to the February 14^th sneak peak of the One Marina development located in Redwood City, March 28^th brings an event destined to sell out quickly once it goes live – a behind the scenes tour of Facebook’s new headquarters in Menlo Park. Michael Polentz, a Partner at Manatt, Phelps & Phillips, LLP, followed with pitch for the benefit of a group operating under the umbrella of the ULI, but with a distinctly Silicon Valley identity which is gaining momentum.

Following the opening remarks, three other active members gave brief accounts as to the benefits they have gained due to ULI involvement. According to Elliot Stein, a Principal at Stein Consulting, one factor setting the ULI apart is it attracts a diverse member base. Architects, planners, lawyers, developers and non-profit employees all contribute, resulting in exposure to diverse perspectives which enhance one’s overall industry knowledge. Stein also stated his ULI contacts have resulted in lasting friendships in addition to professional enhancement.

Luce Forward Partner Tim Tosta then spent a moment discussing his opinion of the opportunities to which ULI members are privy. He encouraged members to listen to the frank advice regularly dispensed by seasoned veterans who are readily accessibly after joining the ULI network. However, he cautioned that active engagement with the group will yield the strongest results. “If you come in with a fair degree of curiosity,” Tosta said, “you will be rewarded.” Afterward, breakout group tables highlighted the individual committee functions, including Young Leaders Group, Urban Plan and Membership.

The ultimate goal of establishing a South Bay subgroup is to provide members with a forum to discuss issues particular to the vibrant and rapidly growing Silicon Valley. But besides a distinct market focus, Hudacek summed up his conviction the group will succeed by staying true to the ULI’s overall mission, which is providing members with access to honest information you just can’t get anywhere else.

Authored by: Kara Anderson, YLG member.

The tour will begin in ZyngaVille’s Café space with a hosted breakfast.  A tour of the ZyngaVille / 650 Townsend Street building will begin promptly at 8am and will finish with a Q&A session.  Hear from representatives of Zynga and TMG Partners on the details of the deal and how they closed one of the largest new office leases in San Francisco in the past 5 years.

Speakers:
David Cropper, Managing Director, TMG Partners
Jim Morgensen, Vice President of Workplace, Zynga Inc.

This event is sponsored by the Young Leaders Group, but is open to all members.

$30 Members / $55 Non-Members
$10 Public Members / $35 Public Non-Members
$20 YLG Members / $45 YLG Non-Members
$10 Student Members / $20 Student Non-Members

ULI San Francisco is proud to partner with ICSC on the Northern California Alliance Program on Thursday, February 23 from 8:30 a.m. – 5:15 p.m. (followed by a networking reception) at the San Ramon Marriott (2600 Bishop Drive, San Ramon, CA 94583).

This program’s lively dialogue will include perspectives from cities, property owners and retailers all seeking to find the balance between current market demands and the future of retail in cities.

Featuring Keynote Speaker, Don Wright, Senior Vice President of Real Estate and Engineering, Safeway and CEO of Property Development Centers (Safeway’s Development Company), will discuss when and why Safeway chooses to develop stores in the urban format or their more traditional suburban format.

ULI members can register for the ICSC discounted member price by using promo code: ANC12

If you are already an ICSC member, promo code isn’t necessary to sign up for the discounted ICSC member rate.

View Program Flyer: http://www.icsc.org/srch/mt/descs/2012A02/2012A02.pdf
Register online: http://www.icsc.org/apps/meeting_registration.php?meeting=2012A02

The Local Residential Council is designed to provide a forum for education, networking, and sharing of best practices among ULI Members.  The Residential Council promotes excellence in programming, solicits the highest quality of industry leader, and works to foster and preserve a culture of openness and sharing.

The Local Residential Council hosted approximately fifty members over an afternoon gathering that commenced with a panel that reviewed both multifamily apartments in addition to residential condominiums.   The first panel was moderated by Rick Dishnica with a seasoned group of panelists that included Alfred Pace, Nat Bosa, Oz Erickson and Steve Smiley.  The panel was lively with general consensus regarding escalation of apartment rents in 2012 through 2013 with an affirmative prognostication from Nat Bosa that the San Francisco for-sale market “is as good as it gets” and will see a meaningful increase in values, given projected employment growth, lack of new condominium supply, all under the backdrop increasing apartment rents.

The Residential Council was afforded the opportunity to review and discuss The Villas at Parkmerced, which was originally constructed in 1951 by The Metropolitan Life Insurance Company and is now owned and controlled by Fortress Investment Group.  The campus is one of the largest re-development projects on the west coast with entitlements to construct up to 8,900 residential units, once complete.

The afternoon closed with a spirited Town Hall session hosted by Michael Covarrubias where diverse and competing point of views were expressed with regard to the apartment and residential condominium markets, respectively.  The afternoon closed with a hosted cocktail reception among both the Residential Council and Commercial Council where members appreciated the opportunity to compare notes and direction of the Bay Area real estate market in 2012.

Authored by: Bryant Sparkman, Founder, Century Urban.

ULIsf’s panel discussion and Q&A will offer updates on neighborhood developments, a window into the visions of its most fervent supporters and unique perspectives from local experts that live, work and develop in Central Market on a daily basis.

Registration opens at 4:30 p.m. The panel will begin promptly at 5:00 p.m.

Moderator:
Meg Spriggs, Vice President of Development, Avalon Bay Communities

Panelists:
Amy Cohen, Director, Neighborhood Business Development, Mayor’s Office of Economic and Workforce Development
Tom Hart, Executive Vice President, Shorenstein
Crimson Rose, Founding Director, Fire Conclave Black Rock Arts Foundation
Matt Semmelhack, Owner, AQ; Mercer Restaurant Group

Pricing:
$30 Members / $55 Non-members
$20 Public members / $40 Public non-members
$25 YLG members / $45 YLG non-members
$15 Student members / $25 Student non-members
$15 Unemployed members