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Vibrant Downtown The Heart and Soul of America’s Communities
Presentation by Clifton Consulting GroupLos Altos ForwardJuly 11, 2012
Reaching the Boiling Point
Vibrant DowntownIs Los Altos Dense?
1. Marked by compactness or crowding together of parts
2. Slow to understand 3. Having high or relatively high opacity
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Vibrant Downtown
Who is the Clifton Consulting Group?• Ted & Jerry Sorensen
• 30 year residents
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Vibrant Downtown
Who is the Clifton Consulting Group?•Ted Sorensen
• Attorney• 15+ years real estate development• Master Degree in Engineering• Transportation/economic planning
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Vibrant Downtown
Who is the Clifton Consulting Group?• Jerry Sorensen
• 25+ years real estate • Market Center
management/development• Vibrant Buildings• Trade Shows• Management Consulting
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Vibrant Downtown
• Why downtowns are important• Metrics for downtowns• Economic Levers • The Economic Model• Parking the key lever• Village Feel v. Mass & Bulk• Create Great Streets
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Vibrant Downtown
Why our interest in Downtowns• Downtown Development Committee 3• How many people?• How many more people?• How do you quantify?
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Vibrant Downtown
• If you don’t know where you are!• If you don’t know where you’re going!
Any Road will get you there!
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Vibrant Downtown
“Doing the same thing over again and expecting different results.”
- Albert Einstein's Definition of Insanity
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Vibrant Downtown
•Redevelop Downtown•Revitalize Downtown•Reenergize Downtown
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Why is it Important?
Vibrant DowntownWhat is Vibrancy?To be Vibrant• “Pulsating with life, vigor, or activity”
• “She (the city) has a vibrant personality”• “New legislation to help small businesses and
restore the vibrance of the local economy”
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Vibrant Downtown
Why Downtowns are important!
A Vibrant Downtown Could… • Increase retail/restaurant choices• Increase residential property values• Protect historic resources
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Vibrant Downtown
Why Downtowns are important!
• Pulse of a community• Community pride• Quality of life
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Vibrant Downtown
Why Downtowns are important!
• Attracts new businesses • Creates local jobs• Allows residents to work in town
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Vibrant Downtown
Why Downtowns are important!Did you know?
•$3 Million Annually to MVLA•$3 Million Annually to LASD•$900 parcel tax
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Vibrant Downtown
Why Downtowns are important!Did you know?
•$4 Million Annually to City
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$10 Million/yr incremental tax revenues!
“Is it time for downtown to contribute?”
Vibrant Downtown
Common Characteristics of Vibrant districts
• Events• Entertainment• Destination retail
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Vibrant Downtown
Common Characteristics of Vibrant districts
• Geographically remote• Transit hub• College town• Tourist town
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Vibrant Downtown
Common Characteristics of Vibrant districts
• Sense of Place• Density
These we can achieve
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Vibrant Downtown
Architecture – sense of place How do communities create vibrancy?
“If you plan cities for cars and traffic, you get cars and traffic, If you plan for People and Places, you get People and Places.”
Fred Kent – Project for Public Spaces
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Vibrant Downtown
Metrics for Downtown!Where are we?
•Inventory the town• People• Parking Stalls• Parking demand
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Vibrant Downtown
Where are we?•Inventory the town
• Parcels• Buildings• Uses • Owners
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Vibrant Downtown
•Parking demand= People
2,200 People
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Vibrant Downtown
Metrics for Downtown!How do we quantify vibrant?
• How many people?• 1,000 people/hr
William Whyte“Rediscovering the center city”
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Vibrant Downtown
Metrics for Downtown!How do we define vibrant?
People on the Street? – 12:30-1:30• 575 Castro Street• 512 California Ave• 933University Ave
• 870 Castro Street – 8:20-9:20
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Vibrant Downtown
Metrics for Downtown!How do we define vibrant?
How does Los Altos compare?• 225 2nd & Main
• Location • Location • Location• “Where would you open your retail store?”
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900 – 700 –500 or 225
Vibrant Downtown
Metrics for Downtown!How do we define vibrant?
225 people= 25% vibrant= Lack of sales= Lack of rent= Diminished retail environment= Diminished Social Environment = Second hand shops – salons – other
services
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Vibrant Downtown
Metrics for Downtown!How do we quantify vibrant?•Retail Rents
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Vibrant Downtown
Metrics for Downtown!
How do we quantify vibrant?
• Retail rents > Office Rents• Retail rents = 4% to 12% (8%) gross sales• @8%, $4.00 rent = $600 per square foot
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Sales Tax Trends – Los Altos Downtown Core
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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 200960.00
40.00
20.00
0.00
20.00
40.00
60.00
80.00
100.00
Fourth Street BerkeleyBurlingameLos GatosMountain ViewLos Altos
YEAR
PERCENT
The figures in this chart represent the downtowns for each of the jurisdic-tions and are not city-wide, i.e., the Downtown Los Altos Retail Core.
Source: City Data adjusted to 1995 constant dollars by Andrea Eaton
Metrics for Downtown!
Vibrant Downtown
Metrics for Downtown!
How do we define vibrant?
• 100% Vibrant = $600 / sf annual sales• 1995 Avg. Los Altos = $300 / sf Annual sales• 2009 Avg. Los Altos = $180 /sf annual sales
• Los Altos Retail/Restaurant = @8% = $1.20
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Vibrant Downtown
Metrics for Downtown!Retail Rents= $1.20 ÷ $4.00= 30% Vibrant
“Our Businesses close, they almost never sell!”
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Vibrant Downtown
Metrics for DowntownWhere are you?•People – 25%•Economics – 30%
Where do you want to go?
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Vibrant Downtown
2008 Rezoning 20 year prediction•34 parcels•895,000 sq ft office•495 residential units
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Vibrant Downtown
2008 Rezoning5 year results
•895,000•495
•1,000•2
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Last 5 years
•895,000•495
•1,000•70•18 hotel rooms
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Vibrant Downtown
3 parcels 14,305 sq ftNo Parking capacity
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Vibrant Downtown
Metrics for Downtown!
How vibrant do you want to be?
• 2,200 today = 25% to 30% vibrancy •50% to 60% = 2,200•75% to 90% =4,400•100% to 120% = 6,600•125% to 150% = 8,800
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How Vibrant do you want to be?•100%
• Add 4,400 people
=2,000 Residential units=3,500,000 sq. ft.= 1,900,000 sq. ft. office
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Economics – the Dismal Science!Why don’t properties develop?•Prop 13•Property owners have been here forever•Property owners comfortable—Don’t care
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No Compelling Economic Reason!
Vibrant Downtown
Economics – the Dismal Science!Why will properties develop?
•How to create the boiling point?• Market Conditions• Policy changes/city levers
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Vibrant Downtown
Where is the Development Boiling Point? • Develop a proforma for specific properties• Developed multiple proformas – testing
the edge• The Economic Boiling Point for...
• Developer • Property Owner
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Vibrant Downtown
The Economic ModelWhy will properties develop?
•Policy changes/city levers?• Floor Area Ratio (FAR)• Height• Fees
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Vibrant Downtown
The Economic ModelWhy will properties develop?
•Policy changes/city levers?• Use requirements (rents)• Parking
Requirements In lieu Program/Fees
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Vibrant Downtown
The Economic ModelWhy will properties develop?•Ratio Redeveloped Value/Current Value
= Development Pressure Index (DPI)
Greater DPI = Greater Development opportunity
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Vibrant Downtown
Achieving the development boiling point!Additional outputs•School revenues•City revenues•Parking spaces required•People on the street•etc
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Vibrant Downtown
The Economic ModelWhy Will Property Develop?
•Case Study #1 2001• Office Rent $7.50• Parking 4/1000• No In Lieu program
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0 1-5 6-10 11-15 16-20 21-250
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Net New Development
Six Story
Five Story
Four Story
Three Story
Current
Years
Sq
uar
e F
eet
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Vibrant Downtown
The Economic ModelWhy Will Property Develop?
•Case Study #2 Current Situation • Office Rent $4.00• Parking 3.3/1000• No In Lieu Program
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0 1-5 6-10 11-15 16-20 21-250
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Net New Development
Six Story
Five Story
Four Story
Three Story
Current
Years
Sq
uar
e F
eet
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Vibrant Downtown
The Economic ModelWhy Will Property Develop?
•Case Study #3• Office Rent $4.00• Parking 2.2/1000*• $10,000 In Lieu Fee**
*Based on 4 recent parking studies of 22 office buildings in Los Altos
** Based on Parking, Best Practices.
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0 1-5 6-10 11-15 16-20 21-250
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Net New Development
Six Story
Five Story
Four Story
Three Story
Current
Years
Sq
uar
e F
eet
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0 1-5 6-10 11-15 16-20 21-252000
3000
4000
5000
6000
7000
8000
Daily Census
Six Story
Five Story
Four Story
Three Story
Current
Years
Pe
op
le
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Vibrant Downtown
Why Downtowns are important!Did you know?
A Vibrant Downtown Could Contribute… •$3 Million Annually to MVLA•$3 Million Annually to LASD•$4 Million Annually to City
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$10 Million/yr incremental tax revenues!
Vibrant DowntownShould we zone for dollars?
NO!
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Vibrant DowntownWe Should zone for…
•Great streets•Distinctive Architecture•A sense of place
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Parking RequirementsA Quick History•Nobody studied Parking!
1. Build More!2. What are their requirements? 3. What does ITE recommend?
Vibrant Downtown
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Parking Requirements & Parking Management
•Lead Poison •The first step – The seminal step to
revitalizing downtown!•Without change – Look for continuing
decline ▫Economics ▫Vibrancy ▫As the Social Center/Place
Vibrant Downtown
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Parking Best Practices•Understand current requirements•Medium term growth requirement•Efficiencies in Parking lay-out•Efficiencies in Parking management
Vibrant Downtown
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Best Practices Los Altos•Establish a Parking Benefit District (PBD)•Create a parking In-lieu program•Adopt parking requirements based in
reality•Identify future parking
Vibrant Downtown
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Los Altos Actual Average Demand!•Private Office – 1.6 per thousand!•Average Peak – 2.0 per thousand!•Grocery Retail – 2.4 per thousand!
Vibrant Downtown
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Parking Requirements•Mountain View•Palo Alto•Burlingame•3000 Sand Hill Rd.
Vibrant Downtown
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Parking In-Lieu ProgramBenefits for Los Altos•Would open up development•Creates shared parking resources•Shared Resources lead to activity
(vibrancy) on the street.
Vibrant Downtown
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•“The Opinion of this mischievous Effect from Lead is at least above Sixty Years old; and you will observe with Concern how long a useful Truth may be known, and exist, before it is generally receiv’d and practis’d on”
Benjamin Franklin
Vibrant Downtown
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Great Streets•Building to street Ratio
• ½ to 1• 1 to 1
Los Altos Buildings are 25% to 30%
Vibrant Downtown
Vibrant Downtown
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Greentown Los Altos
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Vibrant Downtown
Livermore, CA:
First Street
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Livermore, CA:
First Street
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Livermore, CA:
First Street
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Livermore, CA:
First Street
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Livermore, CA:
First Street
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Livermore, CA:
First Street
Commissioned by Design, Community and Environment
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But I can’t see the mountains!
Vibrant Downtown
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But I can’t see the mountains!
Vibrant Downtown
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But I can’t see the mountains!
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Vibrant Downtown
San Bruno, CA
El Camino Real - San Mateo Avenue
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San Bruno, CA
El Camino Real - San Mateo Avenue
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San Bruno, CA
El Camino Real - San Mateo Avenue
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San Bruno, CA
El Camino Real - San Mateo Avenue
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Vibrant Downtown
We want a more vibrant Downtown!•Greater economic vitality
= Taller buildings/more density• You must reach the Development Boiling
Point! •Nostalgic feel low density
= Diminished retail•Excessive Parking
= Stunted downtown
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Vibrant Downtown
We want a more vibrant Downtown!The model•Informs Community•Informs Policy Makers•Identifies Alternatives/Tradeoffs
A Powerful tool for a community based visioning process
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Vibrant Downtown
Los Altos Recent survey •47% opposed•43% supported•3 stories or more•What if they knew?
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Vibrant Downtown
Why Downtowns are important!What is the vibrant downtown experience?
“What attracts people most, it would appear, is other people”
Walkable Streets
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Vibrant Downtown
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Greentown Los Altos
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Vibrant Downtown