Tulsa ROI Training Presentation 111209
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Tulsa ROI Training Presentation 111209






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Tulsa ROI Training Presentation 111209 Tulsa ROI Training Presentation 111209 Presentation Transcript

  • Envision Tomorrow: Return on Investment Model Tulsa, Oklahoma Training Presentation 2009
  • What is Prototyping? Approach used by innovation leaders around the world – IDEO approach: “Right, Rapid & Rough” – In developing prototypes “creating epiphanies and model building go hand in hand” – The Art of Innovation – "We make lots and lots of prototypes: the number of solutions we make to get one solution is quite embarrassing, but it's a healthy part of what we do." Apple Chief Designer Jonathan Ive
  • Prototyping is Like Using a Crash Test Dummy
  • Creating Building Prototypes: Envision Tomorrow Process Overview Building Development Scenario Evaluation Types Types Development
  • Creating Prototype Buildings Building Envelope and Financials Square Footage by Use Using ROI Model… Units Rents Sales Prices Costs …Create a Building Value Range of Buildings Employment Parking
  • Building Prototype Modeling
  • Prototype Examples Mixed-Use Residential Mixed-Use Residential Mixed-Use Rehabilitation 2 Story 4 Story Restaurant and Hotel Mixed-Use Office Mixed-Use Office 2 Story 4 Story
  • Prototype Library 250+ buildings and growing
  • ROI Model The ROI model is a way to physically and financially model potential development The goal is to model feasible development – or to see where existing regulations could be optimized
  • Overview Page
  • Physical
  • Parking Layouts
  • Parking Parameters
  • Financial
  • Detailed Financial
  • Summary
  • Brainstorm: Tulsa’s Prospective ROI Model Users and Uses Users Uses City of Tulsa Evaluate zoning code Universities Heath dept Business improvement Use together in a districts database format/ shared CDCs web Main Street program Educate users re needed Neighborhood associations incentives Property owners Assist in financing RE developers especially in MU Banks/lending institutions developments
  • Tulsa Example: 22 Prototype Buildings Original Standards New Standards Prototypes Prototypes Apartment Cottage Home Single Family Home 5-8K Lot Townhome Single Family Home 8-15K Lot Live / Work Neighborhood Grocery (1 Story) Business Park Neighborhood Retail (1 Story) Mid-Rise Business Park Mixed Use Apartments & Retail (2 Story) Retail Mall Mixed Use Retail & Office (2 Story) Strip Commercial Mixed Use Retail & Office (3 Story) Heavy Industrial Mixed Use Residential & Retail (4 Story) Light Industrial High Density Condo or Apartments (5 Story) Office Retail (3 Story) Office Retail (5 Story) Office Retail (10 Story)
  • New Prototypes: A Richer Palate The following prototypes were dubbed the “illegal” uses Under current regulations, they can’t really be built Have a broader range of uses and densities, tend to have smaller footprints, and have lower parking requirements
  • Prototype example Shuttered commercial building Parcel Size: 14,500 SQFT
  • Prototype example New mixed-use building: Three stories of residential over retail, parking in the back Total area: 37,000 sf Retail: 3,500 sf Residential: 11,000 sf (gross) per floor x 3 floors = 33,000 sf (gross) 32-36 total units (800 sf avg.) Surface parking: 33 stalls
  • Prototype example
  • Prototype example
  • Example: Cherry Street A close-up example along Cherry Street (HP-zoned properties are screened out) Cherry Street
  • Land values by square foot
  • Selected New Prototypes are applied to test whether redevelopment would occur under new zoning conditions
  • Property values that are low enough to be feasible will “tip”– indicating that regulatory improvements can help spur infill development
  • Count up potential development sites Acres Units Live Work 7 43 Condo/Apt 2.8 460 Mixed Use 1 50 Residential Office over 1.5 44,000 SQFT Retail Total 12.3
  • Vetting the Prototypes Each scenario indicates a different level of new investment the city will need Value of Total New Construction $14,000,000,000 $12,000,000,000 $10,000,000,000 $8,000,000,000 Value Added $6,000,000,000 from All $4,000,000,000 Construction $2,000,000,000 $0 C d p D ho en io io ar Tr ks ar en en or W Sc Sc
  • Vetting the Prototypes But Workshop, C, and D will see much greater volumes of development New Employment Construction (Square Feet) 12,000,000 Retail 10,000,000 8,000,000 Office 6,000,000 4,000,000 Industrial 2,000,000 (warehouse, flex space, 0 etc.) Trend Workshop Scenario C Scenario D
  • Vetting the Prototypes For example, mixed-use development accounts for nearly 50% of new investment in Scenario D Value added from mixed-use construction $14,000,000,000 $12,000,000,000 Value Added $10,000,000,000 from All $8,000,000,000 Construction $6,000,000,000 $4,000,000,000 Value Added $2,000,000,000 from Mixed-Use $0 Construction C d p D ho en io io ar Tr ks ar en en or W Sc Sc
  • Portland and the Envision Tomorrow Process Created 30 building prototypes Capacity analysis of Portland’s general plan is underway – Testing city redevelopment model assumptions – Comparing capacity with Metro’s 2035 forecast
  • Building Prototypes Grounded in Reality Eight Portland developer/expert interviews were used to calibrate the ROI Model Prototypes were created based on successful recent development in Portland
  • Mixed-Use Office (Small Lot) Office (Neighborhood) Residential (Point Tower) Residential (Small Units) Residential (Family-Sized Units) Residential (Small Lot) Residential (Perimeter Block) Live/Work
  • Residential Single Family (Infill and Multi-Lot Subdivision) Townhome Courtyard Housing Skinny House Apartment (Small Site) Neighborhood Corridor Apartments
  • Retail and Office High Rise Office Mid Rise Office Low Rise Office Rehab/Adaptive Reuse Small-Scale Retail Large Format/Big Box Retail
  • Industrial Flex Space Industrial (1- and 2-levels)
  • Portland Tipping Point Analysis Example: Gateway Area
  • < $750,000 per acre “Tipping Point” Redevelopment Opportunity Sites Parcels with assessed value of less than $750,000 per acre Approximately 50 acres
  • Between $750,000 and $1.2 “Tipping Point” million/acre Redevelopment Opportunity Sites Parcels with assessed value of between $750,000 and $1.2 million per acre Approximately 50 acres
  • > $1.2 million/acre “Tipping Point” Redevelopment Opportunity Sites Parcels with assessed value of more than $1.2 million per acre Approximately 150 acres
  • Making Residential Development Work in Gateway We looked at areas in the CX, RX and EX zones Types of feasible buildings given: – Current regulations – Market conditions
  • Prototypes Created four basic housing prototypes – 2 Story Residential – 3 Story Residential – 6 Story Residential – 10 Story Residential Rapid prototyping allows us to hone in on the variables that affect the feasibility of new development in the area
  • Sample Gateway Prototype: 6 Story Residential 85 units/acre; 1.67 FAR Option 1: Option 2: Option 3: Subsidy No subsidy; raise No subsidy; rents/sales prices reduce construction costs Rent $0.90/sf $1.18/sf (+31%) $0.90/sf ($700/month) ($902/month) ($700/month) Sales Price $151/sf $205/sf (+36%) $151/sf ($116,000/unit) ($157,000/unit) ($116,000/unit) Construction $100/sf $100/sf $67/sf (-33%) Costs Subsidy (total) $2.8 million $0 $0 Subsidy (per $33,000/unit $0 $0 unit)
  • Comparing Per Unit Subsidies by Prototype Subsidies required per unit increase significantly when building above 6 stories and wood frame construction is not possible $60,000 $51,000 $50,000 $41,000 $37,000 $40,000 $33,000 $30,000 $20,000 $10,000 $0 2 Story 3 Story 6 Story 10 Story
  • Conclusion: Even development at a lower scale than the zoning allows would significantly increase Gateway’s housing base For example, if the 3 story prototype was developed on the sites currently valued at less than $750,000/acre (about 50 acres of land within analyzed zones), about 2,500 new units could be developed
  • Guided Inputs Tulsa YMCA Adaptive Reuse Example