Forest City evolves into new development models

Forest City West Coast explores new development models to drive innovation.

Following the 2008 financial crisis, the national developer takes on exciting new innovations in real estate to evolve into the next generation of placemakers.

A $12B publicly-traded national developer transforms
Real estate is not known for being innovative but a number of growing forces are pressuring the industry to evolve.  The pressures are diverse and broad across the development process.  Supply chain and manufacturing technologies are creating new materials and new methods for erecting buildings, while labor laws and environmental regulations are beginning to impede traditional methods and materials.  A growing awareness of community-led development has created a sea-change in how cities are permitting projects, demanding more involved processes of community engagement.  Leasing, trading and financing are each also evolving as the internet economy begins to migrate control  away from traditional models, mirroring much of the share economy and community-sourced strategies we see in other sectors like ride-sharing and crowd-funding.  These are all opportunities for innovation that development companies will need to tackle if they are to remain relevant and sustain their businesses.

Real estate is slow to evolve but the mounting pressures on development are bringing new opportunities for innovation across the industry.

Forest City is a 12-billion dollar privately owned and publicly traded national developer.  Following the 2008 financial crisis, Forest City’s West Coast operations, directed by Kevin Ratner, was striving to capitalize on these opportunities through a series of innovative new developments, new business models, and R&D projects.  The effort included a year-long research project on the future of office and subsequent 4-acre development showcasing how real estate can increase innovation; a side-by-side construction and market absorption test of identical buildings, one fabricated off-site through modular construction and one built traditionally on-site; a new community engagement process using a phased development strategy and programming to enable the social networks of early small-scale tenants to help define future phases; and a new research and consulting division to mitigate the risks of expanding into new markets.

FIX’s Role
Forest City retained FIX for four years beginning 2009 to help the company research, define and operationalize each of these initiatives.  FIX worked in tandem with Forest City leadership and development teams, embedding within the company for periods to project manage and ensure viability and adoption within the organization.  Our work spanned across the entire West Coast, including Seattle, San Francisco and Los Angeles.


A new GIS tool to understand neighborhoods

Mapping more diverse data to value community and identify need

FIX builds custom geospatial database, layering data from US Census, King County Assessor, and City of Seattle to guide development goals and understand the complexity of community

A searchable geospatial database to support impact development goals
The real estate market is crowded with providers of sales data like Loopnet, Redfin, and Costar, but few if any are able to marry their data with more complex location-based information like  geography, permitting, and neighborhood demographics.  Current providers are oriented to think like brokers, focusing on statistics relevant to sales and comparables.  They don’t provide information more relevant to community builders or developers who might want more intelligent insights to support forward-thinking development goals for specific projects, clients or tenants.  For example, none could provide heat maps on likely minority displacement like, how many NC-zoned sites are appraised below market 75% or greater within neighborhoods that have a majority of minority populations?  Or information that might suggest assemblage opportunities like, how many LR3 sites are there with less than 60% lot utilization that are adjacent to lots with homes that have not pulled a permit in the last 35-years?  Or identify ideal sites for a particular non-profit with a retail-oriented model where it would be useful to see on a single map all sites inside a 2 mile radius of a given customer database that are located in Urban Villages with frontages 75′ or greater and that have not traded in the last 12 years.

Maps are powerful for identifying development opportunities but only when the data they illustrate are sophisticated enough to reveal experience.

FIX’s Role
In 2010, FIX created its own custom searchable geospatial database to graphically sort and show data compiled from King County Assessors Office, City of Seattle, and the US Census.  The resulting tool provides us the ability to create maps that identify individual properties based on the hundreds of qualitative data points within each of those databases of information.  FIX has used this tool to support its clients development goals and pursue its own development projects.


A replicable affordable housing development

An affordable and
replicable mixed-use housing prototype

Designed for Seattle’s most common NC-zoned lot size to replicate easily and affordably.

Keeping it simple
This is a prototypical design for a 10,000 square-foot mixed-use infill project in Seattle’s Neighborhood Commercial zoning.  It is designed specifically for the 40 foot-wide lots that are ubiquitous throughout the city.  It is a replicable prototype with a base development program and façade design that can be adapted specific to each location.  The building has six to ten residential units (depending on site zoning) over 3,000 square feet of commercial space that can flexibly be divided into smaller suites as desired.  Through the design of a single open-air stairway servicing the entire building, the project provides cross-ventilation, natural light, and egress to all units in the center of the building without diminishing net rentable efficiency.  Combined with a grade level foundation and limited parking, the design reduces overall construction costs by approximately 30% relative to comparable mixed-use projects.  The result is an efficient design with flexibility in unit layout not typically found in buildings with long or deep proportions and a pro forma that affords significant reduction in rental levels, targeting workforce affordability.  Shared access to the open-air stair core integrates the ground-level commercial space with the residential community, creating a small-scale vertical neighborhood.

FIX’s Role
FIX developed this design in 2012 as a means of proving development viability for the smallest of mixed-use infill sites with the belief that there is economic and social value in providing small-scale projects.  The designs were reviewed by SDCI through their pre-submittal permitting process.

Clientn/a
Size10,000 SF, 8-12 units
LocationSeattle, WA
ProgramA prototype design for mixed-use
residential, to be replicated
throughout Seattle on NC-zoned
RoleMarket analysis
Visioning
Design
Project management
ImpactHousing: A replicable and sustainable housing prototype that increases density through urban infill.


Forest City wins SF Pier 70, 28-acres of redevelopment

The Port of San Francisco awards Forest City 28-acres of historic Pier 70.

Forest City will turn the defunct shipyard into a new mixed-use innovation campus, beginning with interim adaptive reuse of existing structures for artists, makers and entrepreneurs to stimulate community-driven program and inspire the long-term vision.

Congratulations Forest City!
The Port of San Francisco has announced Forest City as the winner of its selection process for Pier 70, a 28-acre redevelopment project along the waterfront, just south of downtown and AT&T Park.  Pier 70 was the site of the first steel hull ship manufacturing on the west coast and produced most of the US naval fleet for WWII.  The site has hundreds of square feet of historic warehouses and acres of open space with views of the Bay Bridge.   Forest City proposed a new innovation campus to provide jobs and housing across sectors and spectrum of affordability.  Its winning proposal also outlined a phased strategy for redevelopment, leading with a rich program of events and interim uses of existing structures for artists, makers and entrepreneurs  to organically stimulate a community-defined redevelopment vision for later phases.  See our work on the first phase Pier 70.

Pier 70 can become a new model of how public/private partnership can bring industrial waterfronts back as leading economic growth and innovation drivers. New construction will compliment the historic resources and new uses, tenants, and programs will co-exist with existing maritime infrastructure. All of this activity is expected to increase the Port’s tax base, spur job creation and deliver significant community benefit.  — Kevin Ratner, President, Forest City West

FIX’s Role
FIX helped Forest City develop the winning proposal for Pier 70, creating the community-led, phased approach for development.  FIX was Project Manager for the RFP, developing the strategy and producing the submittal.   We drew on our prior work with the national developer, including the 5M Project and underlying research on how place makes us more innovative.  See the team’s Pier 70 Look Book that was part of our winning submittal.


New architectural strategies for vibrant public spaces

New architectural strategies for creating vibrant public spaces.

Exciting new strategies using landscape, vertical circulation and multiple levels of public access to create spaces that stimulate community interaction.

Circulation is the program
There is an exciting attitude about the role that architecture can play in creating vibrant public spaces. Architects, urban designers and landscape architects are blurring the lines between traditional public spaces like plazas and vertical or enclosed architecture typically hosted by private companies and organizations. The results are new forms and program ideas, creating exciting spaces for people to experience their cities and each other.  In these new design strategies, supported by new construction and fabrication techniques, architecture is playing with circulation in a way that was traditionally used by landscape architects, designing the ground and walkways into multiple levels that pass through and on top of the architecture.  The gestures are inherently democratic: the building object is yielding to the people milling about it.

At FIX, we find this trend exciting for the implications it has for providing more equitable and stimulating public spaces within both the public and private sectors. We believe that spaces can help communities, companies, and individuals become more effective, creative and productive.  The more excuses we can design into our spaces to delight and stimulate interaction with one another, the more that becomes true.

This book is a small collection of precedents we’ve collected, exploring this new trend.


500 net-zero affordable housing units in Dallas

Downtown Dallas creates a net-zero city block of affordable housing

Central Dallas Community Development Corporation, in collaboration with the Rocky Mountain Institute, to create 500 units of affordable housing.

An underutilized surface parking lot
In 2009, the Central Dallas Community Development Corporation announced a $60M plan to redevelop a 2.5 acres downtown parcel into a leading-edge sustainable, mixed-use affordable housing project.  The program was for 500 units, 40% of which were to be at 60% AMI or lower.  The project was to be carbon neutral, produce zero waste, including storm water, and divert 75% of waste during construction. The site was a high-profile city block located between City Hall and the convention center, underutilized as a surface parking lot.  With the endorsement of Mayor Tom Leppert and working in collaboration with the Rocky Mountain Institute, the Development Corporation intended this to be a national model of affordability and sustainability for urban revitalization.

FIX’s Role
FIX was brought on to help the Development Corporation define a roadmap for accomplishing the project, including specific design criteria and metrics, formalize the development strategy, and create initial design feasibility studies.  Working in collaboration with facilitation team, Urban Re:Vision, FIX guided Dallas city planners, consultants and the development team through a series of charette-style workshops to complete the initial vision for the project.  Construction is targeted to begin in 2011.


Seeding authentic community in new places

Growing community in new large-scale master-planned developments.

The country’s largest master-planned community developer, Newland Communities, creates a new sales strategy that flips the industry norm on its head.

Before the 2008 financial crisis, Newland Communities was the country’s largest master planned community developer with 150 properties and over a billion dollars in annual revenue.  The developer had sold more than 200,000 residential units in its 50 year history.  But in the years prior to the financial crisis, leadership at Newland recognized that the market was evolving and that despite the fast pace of homesales, homeowners were aspiring for a stronger, more authentic community experience, particularly within Newland’s new development projects.  Previously, Newland had structured their sales model on pre-sales, often proceeding with the majority of development activity only once a critical mass of buyers had moved in.  This hedged the company’s financial risk but often meant they were not providing significant infrastructure or community amenities, straining relationships with the communities’ founding homebuyers and diminishing future sales as a result.

Despite booming sales, Newland understood in 2006 that it needed to create stronger community for homebuyers or it would risk commoditizing its developments.

In 2007,  Newland began an initiative to redesign its entire community development and sales strategies, beginning with a year-long user-based research project on the home buying experience.  Their goal was to design a new process that would foster the organic growth of community at pace with the growth of new homeowners to ensure that they were providing the amenities and infrastructure to do so while not overextending investment in advance of sufficient sales.  The result of their initiative was an entirely new sales process that shifted how and where Newland first invests in their communities.  Their new strategy centered on leading with the construction of a 10,000 square foot community center that would connect potential homebuyers with each other and with the existing natural and cultural amenities in the surrounding context.  New organizational structures and staffing supported the design, flipping the prior model on its head where 90% of Newland’s initial resources which had been focused on sales were now focused on providing buyers with excuses to participate in and help create new community experiences, trusting that these new experiences would convert to sales if it felt meaningful to the homebuyer.  The new community center was designed as a replicable prototype to be rolled-out nationally in all of Newland’s communities, modified at each location to fit its context.  The first was built as part of Newland’s Tehaleh Community, near Tacoma

Shannon Loew led the research and design for Newland Communities first while at IDEO in 2007 and then as the founder of FIX from 2008-2010.

ClientNewland Communities
Size10,000 SF community center
LocationMultiple locations nationally
ProgramCommercial, retail, event space
RoleVisioning & strategic planning
Market analysis & feasibility
Design
Project management


Development impacts of a new mining town in Guinea

Development impacts of a new mining town in Guinea.

Rio Tinto was to spend $12B opening a new mine and needed to address the impacts socio-economic impacts they would have with doing so in one of the poorest and most corrupt countries in the world.

The world digs-up and transports over 3.5 billion metric tons of iron ore each year to produce steel.  That’s equivalent to nearly 700 of the great pyramid in weight annually.  The world’s single largest reserve of iron ore was found in the Simandou mountains of eastern Guinea in the mid 1990’s.  Simandou is an impassably thick jungle region approximately 700 kilometers inland from the coast in a country with no major rail, roadway or port infrastructure.  Optimistic estimates to set-up a mine in Simandou is approximately $12 billion (USD) and would include the construction of a new heavy-gauge cross-country railway, and a deep-water port, including 15 kilometers of trenching through the continental shelf that precludes the large shipping vessels from reaching its coast.  At that cost, any mining company would need to know that it would have stable and consistent mine operations for approximately 75 years to amortize its costs.  However, since its independence from French rule in 1958, Guinea has been unstable complete with multiple coups, presidential assassination attempts and massive government fraud.  The US publication, Foreign Policy, has called Guinea a failed state and generally, Guinea is considered one of the most corrupt and poorest countries in the world.  Despite these risks, mining company giant, Rio Tinto, pursued and won the exclusive concession to extract the Simandou iron ore by the Guinean government in the early 2000’s and began setting-out to design the massive country-wide infrastructure required to mine and transport the ore.

“Our long-term perspective?  Behind every person with a job, there are 20 dependents.  Perspective is a luxury.” — Conakry official

In 2006, Rio hired design consultancy IDEO to help it tackle several key infrastructure challenges, the most complex of which was the formation of the new mining town at the base of operations in Simandou.  New mines generate new jobs but there are surprisingly few people needed to operate a mine of this scale.   And given the level of poverty in Guinea, word of a massive new mine would inevitably attract thousands of people from all over West Africa.  Contemporary examples of new mining towns are grim: poor who have migrated with the hope of fair wages find unemployment and lack of services able to provide and care for them.  Shanty towns quickly spring-up with health risks and violence. Mining companies fence themselves off to secure their employees and operations which increases tensions and furthers instability as the impoverished blame both their own government and the foreign organizations for not creating more equitable support and access to opportunity.

FIX Founder, Shannon Loew, led the development portion of the project while employed at IDEO.  He and team traveled to Guinea with the goal of designing a more sustainable and equitable strategy for opening-up mining operations.  The intent was to help Rio Tinto adopt inclusive urban development processes that would support a greater number Guineans and ultimately garner greater stability over the long-term.  While in country, the team met with officials and elected leaders of the country, local municipalities and communities.  They assessed local capacity, cross-referencing that with the needs of both mining operations and general urban development to identify synergies and opportunities for using local labor and materials in establishing the mine and its supporting town.

Sadly, just following this initiative, Guinea fell into political turmoil and violence.  In parallel, the mining concession has been contested and been at the center of a massive international case of fraud, embezzlement and bribery, with involvement from the US Justice Dept and multiple countries.

ClientRio Tinto
Sizen/a
LocationSimandou, Guinea
ProgramFormation of a new mining town
including operations, worker housing
medical and support services.
RoleEthnographic research
Urban design and planning
Strategic visioning
Policy
ImpactOpportunity: Supplanting tradition and creating hundreds of jobs and job training opportunities for local population (versus imported labor) in the opening and operation of mining activity.