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  • Slide 1 Intro: Good Evening. We are Team Here There composed of Jen Elks, Rachel Newman and myself, Ariel Raymon. Our project is focused on one of many barriers affecting the revitalization of Central Market St, an area of downtown San Francisco with great potential for commerce. This project will address the issue of building vacancies and the associated lack of commercial activity on central Market St in San Francisco and propose some possible solutions to incentivize landowners here to pursue development projects using capital market tools.
  • Slide 2 (define the area): The central Market district of San Francisco lies on Market Street between 5th and Van Ness Avenue. This slide is taken from Jordan Klein, the Neighborhood Economic Development Director at the SF Office of economic and workforce development. In 2010, the San Francisco Office of Economic and Workforce Development (OEWD) launched a public-private partnership to help rejuvenate this part of the city. The section outlined in black is the area that this partnership is focusing on. Team Here There will be focusing on one vacant building in this area to use as a pilot for this project proposal. Source: OEWD Slideshow from Jordan KleinSource: OEWD Slide deck provided by Jordan Klein
  • Slide 3 (Who is taking on this project): This partnership is composed of over 20 stakeholders including Community Benefit Districts, Public Agencies, and Community & Planning Organizations.OEWD is leading this multi-agency effort reinvest in this neighborhood that has long suffered from blight and disinvestment. City partners include SF Planning, the SF Redevelopment Agency, the Department of Public Works, the MTA, Arts Commission, Police Department, and others.Source: Central Market Partnership http://centralmarketpartnership.org/partners/
  • Slide 4: (Outline of major problems)The central market partnership has identified this as an area that has resisted change even during the last economic boom. The primary issues include: Empty & underutilized large buildings Poor building condition; little “leasable” spaceLack of retail/services/jobs for neighborhoodRelatively high retail rents for what you get Open spaces and sidewalks populated by “bad behaviors” rather than positive activity/foot trafficHighest concentration of social services and SRO’s in the city.We have identified some viable capital markets tools for incentivizing the refurbishment of properties, so we’ll be addressing the first two issues since they go hand in hand.  Source: OWED Slideshow from Jordan Klein
  • Slide 5 (History of buildings on Central Market): According to a 1962 report entitled “What to do about Market Street”, the decline of activity on central market street is attributed to three primary issues/events:Decline of theatres and live art venuesDuring the 20th century Mid Market was a theatre district for Vaudville, live entertainment, and cinema. By the 60s the theatres were in decline and closing. 2) Over twenty years of constructionIn the mid 60s there was BART construction, in 70s muni constructionIn the 80s there was bus and trolley construction3) Poor City Planning GuidelinesConstruction of “back office” buildings that housed call centers, and other non-pretigious types of businesses. The mid-century planning controls for height and bulk, together with large SoMa blocks and the desire to maximize building square footage for large-floorplate back-offices, created many blocky office buildings.As corporate back office functions moved to suburban areas in the 1980s, and later to rural areas or overseas, these buildings became white elephants, unattractive to most office tenants and difficult to convert to other uses. These buildings weren’t designed to be front facing, thus their street level aesthetic was never designed to be inviting to retailers. The planning controls that prevailed until the 1980s also permitted huge slab-style high rises, which block sunlight and views, and create uncomfortable ground-level winds. Source: Livable Cities Website http://www.livablecity.org/campaigns/neighborhoods/mid-market.html
  • Here’s a list of some of the currently vacant large commercial buildings on Mid Market Street. So far, we have made contact with George Koster, Whose an entrepreneur who has taken an interest in this project. George has a background in realestate and is an executive certificate graduate. Our plan is to hone in on one of these landlords whose willing to talk with us and work with us on a pilot project and George knows many of these folksAnd talked with them at a meeting last Tuesday. Jen is now going to take you through the framework that we’d like to use for our project and a case study where it was proven to work.
  • Success: Mint Plaza – in 2009, the streets and sidewalks on Jessie St btwn btwn 5th and Mint were demolished and turned into Mint Plaza, a square with a clean, beautiful outdoor gathering space outlined by upscale restaurants and cafes. It’s a pleasant, quiet place to eat or just sit and relax between the noisy surrounding blocks, and has def added value to the neighborhood.Failure: Fillmore – By contrast, the redevelopment of the Fillmore neighborhood in the early 2000s began with the demolition of many historic Victorian buildings and replaced them with homogenous, art deco high-rise condos, diluting the area’s rich cultural history and displacing many of the area’s long-term residents (many of them African American)
  • These are some examples, from Jordan’s presentation, of mixed-use and commercial projects that are in various states of development in the Central Market area. The two outlined in red, SOMA Grand and Argenta, are upscale mixed-use properties that seem to be well-regarded and operational (SF.Curbed.com). But as of now, at least a few of the other projects – including CityPlace, the ambitious shopping center that Jordan mentioned during his presentation, which is in foreclosure – are struggling (“Central Market Development Projects,” SFredevelopment.org). Who knows if they will be completed.
  • In the last decade, the Portland Development Commission has completed completed major projects in five renewal areas across the city with the help of tax-increment financing, including Pioneer Courthouse Square.The East Lake district of Atlanta was known for its rampant crime, high dropout rates, etc, dominated by a notorious public housing project, The East Lake Meadows. Real estate tycoon Tom Cousins was inspired to redevelop the area and has transformed it into a new mixed-income development, The Villages of East Lake. With the Meadows demolition, crime began to rapidly decline, and the community began a renaissance as the 20th century ended. Crime is down. Employment rates and incomes are up. Kids are staying in school and going to college.
  • The success of the East Lake project led Cousins to establish Purpose Built Communities, a philanthropic nonprofit consultancy that helps transform struggling urban neighborhoods through a holistic approach to redevelopment, replacing crime-riddled housing projects with mixed-income housing developments, charter schools, parks, community service centers, health care facilities and recreation programs(“What we do”, peoplebuiltcommunities.org)Another example: Columbia Parc is a mixed-income community that PBC built on the site of a public housing development demolished by Katrina (Boston, 2010). Similar projects are underway in Indianapolis, Jackson, Rome, Charlotte, Birmingham and several other southeastern cities.
  • In looking for solutions We explored Urban RedevelopmentHow to build in IncentivesHow to pair with DisincentivesLand Trusts in an Urban context but came up against potential resistance from existing ownersDirect Public Offerings Like an IPO without the middle man, however, we struggled to find a draw Business Development Corporations Like VC’s or incubators, but again how to align with the various stakeholders and goals of Central Market?
  • Finally we found Social Impact Bonds, also known as Social Investment Bonds or Pay for Success Bonds.Gaining more attention of late, the Social Impact Bond is essentially where a private bond issuer generates initial capital by issuing bonds to private investors in exchange for government reimbursement further down the road once the program receiving the funding has been proven successful.  This in essence removes the risk from government for many social services, it also encourages innovation, and enhanced motivation to reach the desired targets required for public sector funds to kick in to repay the bonds, often with a bonus, hence the name Pay for Success Bonds as the Obama administration is calling it.
  • We saw the idea and successful structure of the Purpose Built Communities that Jen spoke about as a perfect vehicle to incentivize and drive a San Francisco Central Market Social Impact Bond.  Proven Successes create a great template for SF, and the foundation for a solid investment for private funders initially. At the same time we say the potential that it could also incentivize land/building owners and serve as a perfect pilot for viable investment in urban renewal and social services.  Obama’s proposal that up to $100M from the 2012 budget be invested in these types of pilot social investment programs added further excitement, as did the encouragement we received as we began to reach out to community members and the teaching team.
  • So where do we go from here?We will be meeting w/ Jordan Klein from the Office of Economic & Workforce Development who we are at last in contact with. George Koster has been a great resource and source of ideas and support so we will continue to work with him as we further develop & define our plan. He has also started to make introductions with the Central Market Community and Land Owners, so we will be exploring that as well.  We also plan to reach out and develop a contact @ Purpose Built Communities in the hopes of learning more from them and possibly working with them.  Lastly, we will continue to research and develop a Social Impact/ Investment Bond Strategy and how to pull this all together into a viable and potentially successful model.
  • A look back at Mid-Market Street -. (2010, June 8).San Francisco Chronicle. Retrieved from http://articles.sfgate.com/2010-06-08/bay-area/21781420_1_city-releases-herb-caen-bay-area-rapid-transit/3Central Market Partnership. (n.d.). Retrieved October 3, 2011, from http://www.oewd.org/Central_Market.aspxCityPlace - Revitalizing San Francisco’s Main Thoroughfare. (n.d.).City Place. Retrieved October 3, 2011, from http://www.discovercityplace.com/index.shtmlDineen, J. K. (2010, September 14). CityPlace wins at Board of Supes - San Francisco Business Times. San Francisco Business Times. Retrieved from http://www.bizjournals.com/sanfrancisco/blog/2010/09/cityplace_wins_at_board_of_supes.htmlLivable City. (n.d.).Liveable City. Urban Advocacy City Planning, . Retrieved October 3, 2011, from http://www.livablecity.org/campaigns/neighborhoods/mid-market.htmlOffice of the Mayor : Mayor Lee Opens Zendesk in Central Market & Announces New Office Expansion. (n.d.). Retrieved October 3, 2011, from http://www.sfmayor.org/index.aspx?page=546San Francisco Office of Economic Workforce Development. (n.d.). Retrieved October 3, 2011, from http://www.oewd.org/Central_Market.aspxThe Designs For San Francisco’s “CityPlace” (935-965 Market Street) at SocketSiteTM. (n.d.). Retrieved October 3, 2011, from http://www.socketsite.com/archives/2008/10/the_designs_for_san_francsicos_cityplace_935965_market.html

Central market ppt1 a.raymon_j.elks_r.newman Central market ppt1 a.raymon_j.elks_r.newman Presentation Transcript

  • Project: Central Market
    Using Capital Markets Tools to Revitalize an Urban Area
    Team Here There : Jen Elks, Rachel Newman, Ariel Raymon
  • Boundary
  • Central Market Partnership led by OEWD
  • Issues
    Empty & underutilized large buildings
    Poor building condition; little “leasable” space
    Lack of retail/services/jobs for neighborhood
    Relatively high retail rents for what you get
    Open spaces and sidewalks populated by “bad behaviors” rather than positive activity/foot traffic
    Highest concentration of social services and SRO’s in the city
  • History of Buildings
  • Current Vacancies
  • SF: Successes & Failures
    The Fillmore
    • Mint Plaza
  • What’s in the Works
    Projects from Jordan’s PPT
    Dkd
    CityPlace
    High-end hostel
  • What’s Working Elsewhere
    Atlanta’s East Lake district
    • Portland, OR
  • What’s Working Elsewhere
    Purpose-Built Communities
    New Orleans, LA
    Jackson, MS
    Indianapolis, IN
    Rome, GA
    Charlotte, NC
    Clarkston, GA
    Birmingham, AL
  • Possible Solutions
    Urban Redevelopment
    Incentives
    Disincentives
    Land Trusts
    Direct Public Offerings
    Business Development Corporations
  • Our Idea
    Social
    Impact Bonds
    Social Investment Bonds
    Pay for Success Bonds
  • Our Idea
  • Next Steps
    Meeting with Jordan Klein
    Workwith George Kosterto further develop & define our plan
    Develop a contact at Purpose Built Communities
    Continue to research and develop a Social Impact/ Investment Bond Strategy
  • Questions
    • We are looking to use Social Impact Bonds
    • Does anyone have direct experience with this Capital Market tool?
    • Success stories?
    • Issues to be aware of?
    • Other ideas for tools that may work well to incentivize real estate development?
  • References:
    A look back at Mid-Market Street. (2010, June 8). San Francisco Chronicle. Retrieved from http://articles.sfgate.com/2010-06-08/bay-area/21781420_1_city-releases-herb-caen-bay-area-rapid-transit/3
    All about urban renewal areas (URA) … (n.d.). Portland Development Commission. Retrieved from http://www.pdc.us/about_pdc/urban_renewal.asp
    The Argenta. (n.d.). Curbed SF. Retrieved from http://sf.curbed.com/tags/the-argenta
    Boston, Lauren. (2010, June). Rebirth on the bayou. Units. National Apartment Association. pp. 34-40. Retrieved from http://purposebuiltcommunities.org/images/stories/downloadable_docs/2010-06 units magazine cp article june 2010.pdf
    Central Market Development Projects. (n.d.). San Francisco Office of Economic and Workforce Development. Retrieved from http://www.sfredevelopment.org/Modules/ShowDocument.aspx?documentid=2363
    Central Market Partnership. (n.d.). San Francisco Office of Economic and Workforce Development. Retrieved October 3, 2011, from http://www.oewd.org/Central_Market.aspx
    CityPlace - Revitalizing San Francisco’s Main Thoroughfare. (n.d.). City Place. Retrieved October 3, 2011, Retrieved from http://www.discovercityplace.com/index.shtml
  • The Designs For San Francisco’s “CityPlace” (935-965 Market Street). (n.d.). SocketSite. Retrieved October 3, 2011, Retrieved from http://www.socketsite.com/archives/2008/10/the_designs_for_san_francsicos_cityplace_935965_market.html
    Dineen, J. K. (2010, September 14). CityPlace wins at Board of Supes - San Francisco Business Times. San Francisco Business Times. Retrieved from http://www.bizjournals.com/sanfrancisco/blog/2010/09/cityplace_wins_at_board_of_supes.html
    Evans, Tim. (2011, September 29). Warren Buffett joins team tackling urban redevelopment. USA Today. Retrieved from http://www.usatoday.com/money/economy/story/2011-09-29/buffett-urban-development/50610124/1
    Horton, Laura. (n.d.). East Lake. About.com. Retrieved from http://atlanta.about.com/od/neighborhoods/p/east-lake.htm
    Leonhardt, D. (2011, February 8). For Federal Programs, a Taste of Market Discipline. The New York Times. Retrieved fromhttp://www.nytimes.com/2011/02/09/business/economy/09leonhardt.html?_r=1
    Liebman, J.B. (2011, February 9). Social Impact Bonds: A Promising New Financing Model to Accelerate Social Innovation and Improve Government Performance. The Center for American Progress. Retrieved fromhttp://www.americanprogress.org/issues/2011/02/social_impact_bonds.html
    Mayor Lee Opens Zendesk in Central Market & Announces New Office Expansion. (n.d.). Office of the Mayor. Retrieved October 3, 2011, Retrieved from http://www.sfmayor.org/index.aspx?page=546
  • Mulgan, G. (n.d.). Social Impact Bonds and Social Value. The Young Foundation.Retrieved from http://www.youngfoundation.org/social-innovation/tips/social-impact-bonds-and-social-value
    Overview. (2010). Mint Plaza. Retrieved from http://www.mintplazasf.org/overview.php
    Paying for Success, The Federal Budget Fiscal Year 2012. (n.d.). Office of Management and Budget, The White House. Retrieved from http://www.whitehouse.gov/omb/factsheet/paying-for-success
    Performance bonds, Who succeeds gets paid: Barack Obama imports a big idea from Britain. (2011, February 17). The Economist. Retrieved fromhttp://www.economist.com/node/18180436?story_id=18180436
    Reviving Mid Market. (n.d.). Liveable City. Retrieved October 3, 2011, Retrieved from http://www.livablecity.org/campaigns/neighborhoods/mid-market.html
    Social Impact Bonds. (n.d.). Social Finance. Retrieved from http://www.socialfinance.org.uk/work/sibs
    SOMA Grand. (n.d.). Curbed SF. Retrieved from http://sf.curbed.com/tags/soma-grand
    What we do. (n.d.). Purpose Built Communities. Retrieved from http://purposebuiltcommunities.org/our-purpose/what-we-do.html