Business Planning for a 21st Century Park System

Business Planning for a 21st Century Park System

June 22, 2011

HR&A Advisors, Inc. Minneapolis Riverfront Development Initiative | HR&A’s Experience | 2

RiverFIRST: an economic development strategy

0

100,000

200,000

300,000

400,000

500,000

600,000

1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Population, City of Minneapolis



2010

2000

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Racial Composition, City of Minneapolis

White Alone Black Alone

American Indian Alone Asian or Pacific Islander Alone

Some Other Race Alone Two or More Races


HR&A experience

Governors Island, NYC Don Mouth, Toronto Daniel Island, SC

The High Line, NYC Brooklyn Bridge Park South Street Seaport, NYC

Central Delaware, Philadelphia London Olympic Park Anacostia Riverfront, Washington DC


HR&A experience in the Twin Cities

Ford Site Open Space Planning The Union Depot, Saint Paul Bottineau Transitway

Peavey Plaza Great River Park

RiverFIRST | A Perspective on Revenue Identification


Great ideas, great designs and strong leadership attract capital.


Following decades of resource challenges, cities are increasingly

turning to a range of private sector funding sources.

Public Private Earned Income

General

Fund

Special

Levy

BID Charge Parking

Fees

Food &

Beverage Events &

Promotions Corporate

Sponsorship Philanthropy

Real Estate

Proceeds 501(c)(3)


Real estate is often the most significant potential revenue source.

Development pro forma

ability to support

parkland

Development / Parkland

concessions

Public capacity

to fund parkland

Legacy Amendment Funding?

Tax Increment Financing?

Improvement District?

Privatized Public Space?

Corporate Sponsorships?

Philanthropy?

Quantity & timing

Other public benefits?


Typically, new parks systems rely on phased revenue streams.

Government Funding

Time

Reve

nue S

cale

Real Estate

Development

Events & Programming

Sponsorship & Fundraising

RiverFIRST | Stories from the Front Lines The South Brooklyn Waterfront


History of a working-class industrial waterfront


More than two decades of master-planning through engagement


The public sector committed to funding park capital costs.

PANYNJ/NY State

City of New York

~36%

~60%

~$355 million total development costs

Borough President & City Council ~2%

Private Donors ~2%

Secured Funding $233 million

Planned City Supplement $55 million


Elected leadership made a policy decision to leverage owned

lands for real estate development to sustain park operations.

75 acres of public space

10 acres of development


Marine infrastructure and the inclusion of an appropriate capital

reserve became significant cost drivers.

EIS Projection

2004 $

Landscape O&M $4,475,000

Security and Recreation

Staff

$2,682,000

Utilities and Insurance $1,037,000

Administrative Expenses $1,380,000

Marine Infrastructure $3,600,000

Vehicle Replacement $202,000

Capital Reserve $1,820,000

TOTAL: $15,200,000


Real estate development value potential was calibrated against

ongoing project costs, with considerations for parkland activation.

Maintenance Budget $15.2M

Annual Land Value per SF $12-15

Required Development 1-1.3M SF

Absorption & activation

considerations

Development Program

Residential Units 1,210-1,240

New Construction 710-740

Adaptive Re-Use 500

Retail SF 400,000

Hotel Rooms 170-225

÷

=


Results


A mission to bring New Yorkers to the waterfront and support the

growth of burgeoning residential neighborhoods in Brooklyn


Results

TODAY


A mission to bring New Yorkers to the waterfront and support the

growth of burgeoning residential neighborhoods in Brooklyn


Programming: …and for all New Yorkers


Results: One Brooklyn Bridge Park

$3M provided / $15.2M needed

HR&A Advisors, Inc. Minneapolis Riverfront Development Initiative | HR&A’s Experience |

RiverFIRST | Stories from the Front Lines Hudson River Park


Pier 40: 2 failed development attempts

Pier 57: 1 failed development attempt, with second selected

during the great recession

Chelsea Piers: a pioneering tenant secured a great deal after

multiple workouts

Short of changing legislation, two alternatives remain:

• A proven, politically challenging source: special levies on

upland real estate

• An unproven source with recessionary risk: Transitioning the

Friends from an advocacy organization to a major source of

philanthropy

Restrictions on development program have prohibited success.

RiverFIRST | Stories from the Front Lines Rose Kennedy Greenway, Boston


Rose Kennedy Greenway: building open space through a tunnel

project to reconnect downtown to its waterfront.


Mission: a string of parkland to support downtown development

through new amenities and connections.


Design & Programming: 4 different segments reflective of 4

different neighborhoods with 4 different development targets.

North End

Amenitize residential

Wharf District

Attract visitors

Dewey Square

Retain & attract businesses

Chinatown

Build on cultural assets


$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

FY2010 Future Year

Massachusetts Dept of Transportation Mass Development Philanthropy & Sponsorships Event Revenue Other

Whereas capital sources were part of the “Big Dig” project,

operating sources lack long-term government commitments.

?

?


New development parcels made available as part of the “Big

Dig” project were planned for civic use, not revenue generation.

75% of reclaimed land dedicated to

“public open space”

Parcels unsuitable to parkland or on

the fringe were dedicated to civic uses: • YMCA

• Boston Museum

• New Center for Arts & Culture

• Horticulture Society “Garden Under Glass”


All development plans have failed.


Value creation on adjacent properties is a long-term proposition,

as buildings redevelop to face the Greenway.

RiverFIRST | Stories from the Front Lines Central Delaware River Waterfront, Philadelphia


Create a truly Philadelphia waterfront

Philadelphia, PECO building


Total Property 1,129 Acres

Total Land 930 Acres


Development Park

Penn’s Landing 1,200,000 sf 18.1 ac

Spring Garden 2,600,000 sf 6.5 ac

Washington 1,940,000 sf 18.9 ac

Subtotal 5,740,000 sf 43.5 ac

Washington Penn’s Landing Spring Garden

RiverFIRST | FIRST Impressions


Public Private Earned Income

General

Fund

Special

Levy

BID Charge

Parking

Fees

Food &

Beverage Events &

Promotions Corporate

Sponsorship Philanthropy

Real Estate

Proceeds 501(c)(3)


Resource identification

NOT Downtown

NOT affluent neighborhoods

NOT a city projected for significant near-term growth

LIMITED real estate value creation (total $)

LIMITED corporate interest

LIMITED philanthropy

+


Distinct contexts suggest distinct strategies for North & Northeast

North

Northeast


North riverfront: an established industrial district

Active light industrial district with

significant “green” business

Tensions between industrial and

residential land uses

Inefficient “Port of Minneapolis”

with uncertain future for barges

Highly constrained access from

disadvantaged neighborhood


North riverfront: an implementation strategy?

Strengthened/Rebranded North

Washington Jobs Park • Next generation trails, providing

neighborhood access, commutation &

industrial tourism

• Port consolidation for efficiencies &

potential long-term phase-out

• Fabulous wetlands restoration park

increased commercial value

Potential mixed use enclave

bounded by rail line


North riverfront: revenue implications?

1. In-kind management /

Commercial assessment district

2. Land disposition

3. Philanthropy

4. Environmental mitigation


Northeast riverfront: established & emerging community

Residents, artists & neighborhood

retail

Limited connections to the river

Mostly multi-party, small-plot,

private shoreline ownership.

Fantastic waterfront uses – boat

launches, Psycho Suzie’s, distinctive

housing


Northeast riverfront: an implementation strategy?

Focus on Scherer, Boom & Nicollet,

major publicly-owned sites

Leverage development for

parkland activation & funding.

Consider relative benefit of: • Major employers’ expansion

• Mixed use

• Community facilities


Northeast riverfront: revenue implications?

1. Land disposition(!)

2. Special assessment district

3. Events & concessions

4. Parking

5. In-kind management

6. Environmental mitigation


Prerequisite of phase I: demonstrate the vision can be realized

• Bring all Minneapolitans to the river

• Foster advocacy for plan completion

• Secure media attention

• Demonstrate public sector ability to conclude transactions


Phase I: Green Port?

Activation Advocacy Attention Transactions


Phase I: North Washington Jobs Park?



Phase I: Farview Park Extension?



Phase I: West River Road North?



Phase I: Downtown Cultural Connections & Spirit Island?



Phase I: Scherer Park District?



Phase I: East Bluff?



Phase I: Trails?



Next Steps

Q: Where is HR&A’s value-add?

A: Where is the revenue-generation potential?


Next Steps

Scherer Park District

Downtown Cultural Connections

Green Port

North Washington Experience

Trails

Farview Park Extension

East Bluff

West River Road North

Business Planning for a 21st Century Park System

Design

Transcript of Business Planning for a 21st Century Park System