The City’s Landmark-Van Dorn small area plan, which has been moving on a roughly parallel track with the Braddock Road Metro plan, has churned up a doozy of a study.On the surface it’s a consultant’s analysis of affordable housing opportunities that redevelopment might offer in the West End.
But what’s really intriguing is that for the first time we have been permitted a glimpse into the hidden world of developer profit.
The respected firm Economic Research Associates (ERA) was hired to analyze the feasibility of rezoning areas at Landmark-Van Dorn to “allow increased density in the planning area to encourage mixed use development with privately financed mixed-income housing” (ERA Presentation, p. 3). Their study was presented to Planning Commission at a work session on January 4.
ERA staff interviewed select developers and property owners and built a model to determine how much density could be added to sites to achieve different levels of profit. Every variable was thrown into the model, from construction costs to land prices to marketing and architectural services. ERA also calculated maximum mortgage payments for individuals at 60, 80 and 100% of Alexandria’s median income (i.e., those who might qualify for affordable housing).
The first eye-popper was that developers expected a minimum profit of 20%. Name any publicly traded company with margins like that.
The second jolt followed when ERA detailed the different levels of profit developers could attain with existing zoning and 100% market units, or at a higher FAR with 15% affordable units and 85% market units.
With all market rate units at 1.25 FAR in areas zoned RCX, developer profits were estimated at 33% for low-rise townhouses and 21 to 28% for low-rise condos. The range for condos was due to different methods for building parking (surface, structured, or underground).
That’s sweet. But if FAR was raised to 2.00, developer profits soared to 44% for townhouses and 25 to 35% for condos.
What if the City demands 15% affordable housing in exchange for higher FAR?
At existing FAR of 1.25, townhouse profit in zoning area RCX was lower with affordable housing but still nearly 24%, rising to 32% when FAR was bumped up to 2.0.
Profit on low-rise condos was projected at 21.5% with existing FAR of 1.25, but climbed from 22.8 to 28.7% if FAR were to be raised to 2.0.
The analysis concluded that redevelopment was unlikely in the short-term at Landmark not only due to current market conditions but because “current income stream [is] profitable and sufficient for long-term hold” (ERA Presentation, p. 4).
So these area studies are not really about a vision of neighborhood but about developer profit and how the City can help maximize that profit.
But nowhere in the ERA study was there any calculation of the cost of adding quality of life elements that small area plans typically gush about (improved streets, refurbished sidewalks, better lighting, and new parks.) Nor did ERA calculate the costs of mitigating the effect of more traffic, increased demand for parking, and pollution.
The City is using elusive quality of life benefits to sell us the Braddock Road Metro plan. Why don't they figure in the calculations here or at Landmark and why aren't the impacts included in the equation?
In fact, what are the numbers for Braddock Road developers? Why don't we merit a study like this?
27 comments:
Ouch! Folks this is about power, not developer power but neighborhood power. The ICCA doesn't get it but the Del Ray Civic Association does. Del Ray's contribution to development in and around the metro is ball fields. Ours just keeps on growing. I want change but change that rids of certain shackles. I vote with whoever said we should begin by revitalizing the existing Braddock Place. Growler your entries are becoming ever more depressing.
There is no realistic chance of "neighborhood power" when the politicians of our city have no fear of the electorate. Why should they? None of them face any realistic opposition come election time, they get free pass endorsements from the local media, and they hold their elections as far afield from the federal election cycle as possible so as to ensure minimal turnout. Why would the mayor listen to anyone when he runs unopposed? City council members know they keep their seats until they decide they don't want them anymore, so why would they worry what the community thinks?
The constituency to which the city council and mayor caters are the people who fund their show campaigns. Until there is a realistic threat that they'll lose their jobs, all of the public pronouncements and promises are completely worthless, and PG will continue to be dumped upon.
Until there is electoral reform in Alexandria, the developers will continue to run the show.
"The constituency to which the city council and mayor caters are the people who fund their show campaigns."
I have sadly come to realize that the most disturbing aspect of all this is the relationship between Mayor Euille and development attorney Bud Hart. Together they hold the rest of us hostage to their polluted notion of social good.
"There is no realistic chance of "neighborhood power" when the politicians of our city have no fear of the electorate."
The only calculation missing is the percentage of profit that transfers to the Mayor and Council at election time.
The Growler has hit on the central issue that many of us learned in planning school (I'm obviously speaking for the urban planners here) in economic analysis courses. Just because you get a positive number (i.e. profitability) out of an economic impact analysis does not mean it is the correct course of action. All those intangibles, including quality of life, pollution, traffic, amenities, etc., can't be given a quantitative value. That doesn't mean they are not a factor, and that's where the back-and-forth of public participation and lobbying from the community comes in. The ecomonic analysis is all the developers really care about, but it should not be the sole driver in any redevelopment scheme.
Out of curiosity how many bloggers think the Growler's last few entries are on the right track? Yes, the Growler offers insight but the neighborhood needs an action plan. I like the notion of putting a grocery in Braddock Place, revitalizing that development before starting others, getting rid of Adkins, holding Diamond Properties accountable for retail, and asking QSABA for a vision statement. Based on QSABA's website it is not looking to neighborhoods like Adams Morgan for help. At the last ICCA meeting Diamond Properties' attorney reminded us of the company's goodness including its contribution to both Hopkins House and the Boys Club. We need to redefine community and accomplish something greater.
"The ecomonic analysis is all the developers really care about, but it should not be the sole driver in any redevelopment scheme."
AMEN! AMEN! AMEN! Like someone said, "Del Ray's contribution to development in and around the Braddock metro is ball fields." What does that tell you about their and Potomac Yards'notion of quality of life? Years ago PG Blacks had to sacrifice Patrick and Henry Streets their front yards to a federal highway. Yet US1 north of the Monroe Street Bridge (Del Ray) was never similarly widened. Is neighborhood history repeating itself and are we just as impotent as our older neighbors?
I don't think you need a fancy planning degree to understand that concept...
Trust me, a planning degree and a buck fifty can get you a cup of coffee. Not trying to hype the coursework, just saying that it is planning 101 and that everyone involved is aware of the quantative and therefore somewhat one-sided nature of these economic studies.
In response to the inquiry, "how many readers think the Growler is on the right track?"
Not I. But two thumbs up for creating the forum.
The Growler and others are aghast at the Monarch because it towers over the historic neighborhood. Huh? I walked all the way around it and was nothing but happy for the improvement. Looking forward to the other warehouses getting developed. Soon. Big tall buildings with some one bedroom apartments so young folks starting out can stand a remote chance of affording to live in such a wonderful place on a dime other than mommy and daddy's.
Growler and others are whipping themselves into a frenzy over developers profiting from development. Spare me. Anyone out there want to bet their substantial home equity on getting a project through the City? Sure the community can, and should, elicit concessions from developers.
Growler and others worry about brick sidewalks, undergrounding wires, parking for their Prii and traffic woes that are pre-ordained with or without FAR increases.
I'm hoping to walk to the metro through a safe neighborhood.
I'm hoping no on else has a random bullet go through their gas grill any time soon.
I'm hoping to take my trash out without watching prostitutes and drug dealers at work in my ally.
I'm hoping vaporlocked obstructionists don't screw up the opportunity our part of the city has to transform into a vibrant, walkable business sustaining area.
High density development is the future of the Braddock area. Thank goodness. ^^^
"I'm hoping vaporlocked obstructionists don't screw up the opportunity our part of the city has to transform into a vibrant, walkable business sustaining area."
I thought The Madison/Harris Teeter connection was a uniquely North Carolina one. Walkable? What takes me inside Braddock Place? Nothing! Obstructionist, hardly. Just thoughtful! You fail to mention that your "safe walk to metro" is compromised by public housing and the related crime.
"Big tall buildings with some one bedroom apartments so young folks starting out can stand a remote chance of affording to live in such a wonderful place on a dime other than mommy and daddy's."
Sounds like you were either spoiled growing up or favor public housing now.
"The Growler and others are aghast at the Monarch because it towers over the historic neighborhood. Huh?"
The Planning Department took the first Monarch design back to the drawing board declaring it too big. If Diamond Properties does not produce quality retail soon then, yes, we bought a pig in a poke.
As for the forum, yeah, thanks Growler for your efforts.
"The Growler and others are aghast at the Monarch because it towers over the historic neighborhood. Huh? I walked all the way around it and was nothing but happy for the improvement."
Don't know anybody who's complaining about The Prescott so hold on because somewhere somthing seems to be going well.
Growler,
I have a question. I know you your feelings on open space and low density development. But is the Monarch, with the way its going to look, in your opinion, better or worse than the printing building and power lines that were there before.
On a different note:
Another blogger posed a question that I have to agree with. How will anyone know that the park/open space in the center of the Monarch, will be open access for all to enjoy.
I can bet you that the people that buy and live there won't have a problem with me walking my dog there and sitting on the benches. What if the people at hunter/miller park want to congregate or sit there? Do you really think that there not going to call police for loittering?
Once this starts, "No Trespassing" signs will be placed all over the area by the Monarch civic association and the general public will not feel free to use the space.
If I'm way off base, please feel free to tell me so.
"I have a question. I know you your feelings on open space and low density development. But is the Monarch, with the way its going to look, in your opinion, better or worse than the printing building and power lines that were there before."
I am not the Growler but your question intrigues me. What typically is the useful life of a building? Hennage Printing, Hennage's building, was more than 20 years old when demolished, the business location chosen, the construction completed relying on economic development bonds. Hennage was lured to this neighborhood at a time when few if any businesses of reputation were willing to locate here. His building, the architecture, were an improvement on what was there then. One only has to look at old insurance maps to appreciate the difference. Can one now compare a business of his type, yesterday's notion, with The Monarch? Both occupy the same square block, The Monarch is larger. The Monarch, a mixed use project, reflects today's marketplace.
Hennage himself was an ardent antiques collector. He supported historic preservation and moved, I've heard, to Williamsburg upon retirement. His furniture collection reportedly is earmarked for the DeWitt Wallace Museum there.
So do I prefer one building over the other? Times have changed. May I ask you how you would compare The Monarch to The Prescott?
To last anonymous,
Thank you for the history lesson. I didn't have know any of this. I have nothing against the old Hennage building. When I moved here in 95, I initially noticed the side that faced N. Henry St. I liked the way it looked. As for the rest of the block, in 2004 I was like, ok, when are they going to redevelop this.
My point of asking the growler the question I asked was to see what his/her thoughts were on what looks better in the community in the here and now (2007). I'm glad that Diamond Properties listened a little bit to the community and reduced the overall height of what they were allowed by the city to have been able have built.
I still have issues about their so called open space park that they claim will be a nice addition to the community.
"May I ask you how you would compare The Monarch to The Prescott?"
The Prescott is more in keeping with the scale of the neighborhood.
"When I moved here in 95, I initially noticed the side that faced N. Henry St. I liked the way it looked."
If I'm not mistaken Hennage found the decorative iron siding at an old plant somewhere. Many thought the building's exterior in keeping with his preservation interests. Hennage was helpful to the neighborhood in ways better left unspoken. Let's just say the jumpouts appreciated the advantages his roof line offered.
"I still have issues about their so called open space park that they claim will be a nice addition to the community."
Me too! The Helen Miller Park improved once the picnic tables were removed. Surely the homeowner's association will not tolerate the same abuse. Who has final jurisdiction? The city, because it is a public park, or the homeowner's association because it is a condo courtyard?
The main difference between the Monarch and the Prescott is that the latter was developed with BAR approval because it was just inside the boundaries of the historic district.
"The main difference between the Monarch and the Prescott is that the latter was developed with BAR approval because it was just inside the boundaries of the historic district."
Your point is well taken but obviously the main difference is size and height.
"The main difference between the Monarch and the Prescott is that the latter was developed with BAR approval because it was just inside the boundaries of the historic district."
The first convincing argument for expanding the historic boundaries.
And why are the size and height so different??? Duh, because one was designed to be in keeping with the historic district (stepped back from the street, many concessions to alleivate the 'appearnace' of density) and one was not. And those pocket parks deemed "public" in these new super block developments (1500 King, proposed in 1600 King, Monarch, etc.) will never truly function as public spaces. They are just ways for developers to cram in their open space requirements.
The open space debate is one I don't fully understand. While I appreciate it and do believe we shold have some of it, some of the people on this site and at the community meetings act as though there is this great need to establish vast tracts of open space as if there were none in the area at all. What is Braddock Fields? Granted not the prettiest or most enjoyable, but it's there. What are all of the parks along the river and the pocket parks within Parker Gray? The path next to the metro. Jefferson-Houston? With all of these large piece of land, I don't understand the enjoyment one would have on small setaside of open space next to a condo building next to a bunch of traffic. If I have a need for a park, I'm going to go to one that I can truly relax in and enjoy. To demand that all of these new development reserve a parcel of open space seems kind of silly to me. In many cases, the land could be better served with development on it.
What especially surprises me that people are demanding this open space on redevelopment of tracts of land that currently do not have it.
As idealistic as it may be to create a city with green, open parks all over the place, reality sets in when the lack of density because of these open spaces translates into lower tax revenue and not enough density to support the city's retail and commercial entities.
I just think that people need to think really long and hard about whether adding another postage-sized park is worth it on such valuable land. Advocating open space to make the building seem less domineering over the landscape is a fair reason. But adding it for the sake of adding another pocket park when we have so many nice, much larger parks as it is, does not make sense to me.
"As idealistic as it may be to create a city with green, open parks all over the place, reality sets in when the lack of density because of these open spaces translates into lower tax revenue and not enough density to support the city's retail and commercial entities."
I find the repeated retail argument exhausting. How stupid do my neighbors maybe developers think I am. One only has to walk King Street to know that any assurance of quality retail is a salesman's pitch. Along upper King Street Belise is closing. Romance of the Senses closes February 14. Silk Road is moving to Georgetown. Other shops have moved to Bethesda and more are said to be in trouble. Supposedly the traffic is not there to support them. Retail may be an argument for density but it is an unconvincing one.
"I find the repeated retail argument exhausting."
I agree. The city hired consultants to conduct the King Street Retail Study and since then King Street offers less retail not more. Retail is slowly being replaced with services. King Street is becoming humdrum and at its best Parker Gray will offer even less.
Does anyone else out there think that the previous post essentially makes the argument that it is trying to refute?
Oh, you are a clever development pro. If anyone thinks by referencing King Street's decline I argue in favor of increased density ... as a solution to retail ... dream on! Georgetown retail succeeds not for reasons of dense high rises but vision. City staff lacks strategic vision, plain and simple, and the draft Plan like King Street proves it. King Street when combined with PTO's lack of new retail Del Ray's ball fields tells me it's time to rethink the formula.
Density isn't the only thing, though we do have to have enough customers to spend money at the shops. Georgetown has a BID (Business Improvement District). That and they don't make every new busienss go through a wringer of reviews. But I think the BID is the real difference. It puts coordination and beautification power in the hands of the businesses not the government. Georgetown has really taken off since the BID was put in place. The anti-tax folks killed the King Street Bid. And if we are not careful, King Street will die as well. Though, does the Growler really want King Street to be a success? Traffic in Georgetown is a bear...pun intended.
"The anti-tax folks killed the King Street Bid."
Maybe the "anti-tax folks" wouldn't have such a problem with the city providing funds for BIDs for King Street and other areas if so many tax dollars weren't already being wasted on the array of questionable social programs which the city provides.
It's hard so swallow more city taxes to help improve the poor conditions which are caused in large part by the same overly-intrusive government to which the taxes would be paid.
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