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Sorenson Presentation

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  • 1. Vibrant DowntownThe Heart and Soul of America’sCommunities Reaching the Boiling Point Presentation by Clifton Consulting Group Los Altos Forward July 11, 2012
  • 2. 2 Vibrant DowntownIs Los Altos Dense?1. Marked by compactness or crowding together of parts2. Slow to understand3. Having high or relatively high opacity
  • 3. 3 Vibrant DowntownWho is the Clifton Consulting Group?• Ted & Jerry Sorensen • 30 year residents
  • 4. 4 Vibrant DowntownWho is the Clifton Consulting Group?• Ted Sorensen • Attorney • 15+ years real estate development • Master Degree in Engineering • Transportation/economic planning
  • 5. 5 Vibrant DowntownWho is the Clifton Consulting Group?• Jerry Sorensen • 25+ years real estate • Market Center management/development • Vibrant Buildings • Trade Shows • Management Consulting
  • 6. 6 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
  • 7. 7 Vibrant DowntownWhy our interest in Downtowns• Downtown Development Committee 3• How many people?• How many more people?• How do you quantify?
  • 8. 8 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!
  • 9. 9 Vibrant Downtown“Doing the same thing over again and expecting different results.” - Albert Einsteins Definition of Insanity
  • 10. 10 Vibrant Downtown• Redevelop Downtown• Revitalize Downtown• Reenergize Downtown Why is it Important?
  • 11. 11 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”
  • 12. 12 Vibrant DowntownWhy Downtowns are important!A Vibrant Downtown Could…• Increase retail/restaurant choices• Increase residential property values• Protect historic resources
  • 13. 13 Vibrant DowntownWhy Downtowns are important! • Pulse of a community • Community pride • Quality of life
  • 14. 14 Vibrant DowntownWhy Downtowns are important! • Attracts new businesses • Creates local jobs • Allows residents to work in town
  • 15. 15 Vibrant DowntownWhy Downtowns are important!Did you know?• $3 Million Annually to MVLA• $3 Million Annually to LASD• $900 parcel tax
  • 16. 16 Vibrant DowntownWhy Downtowns are important!Did you know?• $4 Million Annually to City $10 Million/yr incremental tax revenues! ―Is it time for downtown to contribute?‖
  • 17. 17 Vibrant DowntownCommon Characteristics of Vibrant districts • Events • Entertainment • Destination retail
  • 18. 18 Vibrant DowntownCommon Characteristics of Vibrant districts • Geographically remote • Transit hub • College town • Tourist town
  • 19. 19 Vibrant DowntownCommon Characteristics of Vibrant districts • Sense of Place • Density These we can achieve
  • 20. 20 Vibrant DowntownArchitecture – sense of placeHow 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
  • 21. 21 Vibrant DowntownMetrics for Downtown!Where are we?• Inventory the town • People • Parking Stalls • Parking demand
  • 22. 22 Vibrant DowntownWhere are we?• Inventory the town • Parcels • Buildings • Uses • Owners
  • 23. 23 Vibrant Downtown• Parking demand= People2,200 People
  • 24. 24 Vibrant DowntownMetrics for Downtown!How do we quantify vibrant?• How many people?• 1,000 people/hr William Whyte ―Rediscovering the center city‖
  • 25. 25 Vibrant DowntownMetrics 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
  • 26. 26 Vibrant DowntownMetrics 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?‖ 900 – 700 –500 or 225
  • 27. 27 Vibrant DowntownMetrics 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
  • 28. 28 Vibrant DowntownMetrics for Downtown!How do we quantify vibrant?• Retail Rents
  • 29. 29 Vibrant DowntownMetrics 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
  • 30. 30 Vibrant Downtown Metrics for Downtown! Sales Tax Trends – Los Altos Downtown Core 100.00 80.00 60.00PERCENT 40.00 Fourth Street Berkeley 20.00 Burlingame Los Gatos 0.00 Mountain View 20.00 Los Altos 40.00 The figures in this chart represent the 60.00 downtowns for each of the jurisdictions and are 1995 1997 1999 2001 2003 2005 2007 2009 not city-wide, i.e., the Downtown Los Altos YEAR Retail Core. Source: City Data adjusted to 1995 constant dollars by Andrea Eaton
  • 31. 31 Vibrant DowntownMetrics 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
  • 32. 32 Vibrant DowntownMetrics for Downtown!Retail Rents= $1.20 ÷ $4.00= 30% Vibrant―Our Businesses close, they almost never sell!‖
  • 33. 33 Vibrant DowntownMetrics for DowntownWhere are you?• People – 25%• Economics – 30% Where do you want to go?
  • 34. 34 Vibrant Downtown2008 Rezoning20 year prediction• 34 parcels• 895,000 sq ft office• 495 residential units
  • 35. 35 Vibrant Downtown2008 Rezoning5 year results• 895,000 • 1,000• 495 •2
  • 36. 36 Vibrant DowntownLast 5 years• 895,000 • 1,000• 495 • 70 • 18 hotel rooms
  • 37. 37 Vibrant Downtown3 parcels14,305 sq ftNo Parking capacity
  • 38. 38 Vibrant DowntownMetrics 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
  • 39. 39 Vibrant DowntownHow 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
  • 40. 40 Vibrant DowntownEconomics – the Dismal Science!Why don’t properties develop?• Prop 13• Property owners have been here forever• Property owners comfortable—Don’t care No Compelling Economic Reason!
  • 41. 41 Vibrant DowntownEconomics – the Dismal Science!Why will properties develop?• How to create the boiling point? • Market Conditions • Policy changes/city levers
  • 42. 42 Vibrant DowntownWhere 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
  • 43. 43 Vibrant DowntownThe Economic ModelWhy will properties develop?• Policy changes/city levers? • Floor Area Ratio (FAR) • Height • Fees
  • 44. 44 Vibrant DowntownThe Economic ModelWhy will properties develop?• Policy changes/city levers? • Use requirements (rents) • Parking  Requirements  In lieu Program/Fees
  • 45. 45 Vibrant DowntownThe Economic ModelWhy will properties develop?• Ratio Redeveloped Value/Current Value = Development Pressure Index (DPI)Greater DPI = Greater Development opportunity
  • 46. 46 Vibrant DowntownAchieving the development boiling point!Additional outputs• School revenues• City revenues• Parking spaces required• People on the street• etc
  • 47. 47 Vibrant DowntownThe Economic ModelWhy Will Property Develop?• Case Study #1 2001 • Office Rent $7.50 • Parking 4/1000 • No In Lieu program
  • 48. 48 Net New Development 3,000,000 2,500,000 Six Story Five Story Four Story 2,000,000 Three StorySquare Feet Current 1,500,000 1,000,000 500,000 0 0 1-5 6-10 11-15 16-20 21-25 Years
  • 49. 49 Vibrant DowntownThe Economic ModelWhy Will Property Develop?• Case Study #2 Current Situation • Office Rent $4.00 • Parking 3.3/1000 • No In Lieu Program
  • 50. 50 Net New Development 3,000,000 2,500,000 Six Story Five Story Four Story 2,000,000 Three StorySquare Feet Current 1,500,000 1,000,000 500,000 0 0 1-5 6-10 11-15 16-20 21-25 Years
  • 51. 51 Vibrant DowntownThe 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.
  • 52. 52 Net New Development 3,000,000 2,500,000 Six Story Five Story Four Story 2,000,000 Three StorySquare Feet Current 1,500,000 1,000,000 500,000 0 0 1-5 6-10 11-15 16-20 21-25 Years
  • 53. 53 Daily Census 8000 7000 6000 Six Story Five StoryPeople 5000 Four Story Three Story 4000 Current 3000 2000 0 1-5 6-10 11-15 16-20 21-25 Years
  • 54. 54 Vibrant DowntownWhy 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 $10 Million/yr incremental tax revenues!
  • 55. 55 Vibrant DowntownShould we zone for dollars? NO!
  • 56. 56 Vibrant DowntownWe Should zone for…• Great streets• Distinctive Architecture• A sense of place
  • 57. 57 Vibrant DowntownParking RequirementsA Quick History• Nobody studied Parking! 1. Build More! 2. What are their requirements? 3. What does ITE recommend?
  • 58. 58 Vibrant DowntownParking 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
  • 59. 59 Vibrant DowntownParking Best Practices• Understand current requirements• Medium term growth requirement• Efficiencies in Parking lay-out• Efficiencies in Parking management
  • 60. 60 Vibrant DowntownBest Practices Los Altos• Establish a Parking Benefit District (PBD)• Create a parking In-lieu program• Adopt parking requirements based in reality• Identify future parking
  • 61. 61 Vibrant DowntownLos Altos Actual Average Demand!• Private Office – 1.6 per thousand!• Average Peak – 2.0 per thousand!• Grocery Retail – 2.4 per thousand!
  • 62. 62 Vibrant DowntownParking Requirements• Mountain View• Palo Alto• Burlingame• 3000 Sand Hill Rd.
  • 63. 63 Vibrant DowntownParking In-Lieu ProgramBenefits for Los Altos• Would open up development• Creates shared parking resources• Shared Resources lead to activity (vibrancy) on the street.
  • 64. 64 Vibrant Downtown• ―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
  • 65. 65Vibrant Downtown
  • 66. 66 Vibrant DowntownGreat Streets• Building to street Ratio • ½ to 1 • 1 to 1Los Altos Buildings are 25% to 30%
  • 67. 67Vibrant Downtown Greentown Los Altos
  • 68. 68Vibrant Downtown
  • 69. 69Livermore, CA:First Street
  • 70. 70Livermore, CA:First Street
  • 71. 71Livermore, CA:First Street
  • 72. 72Livermore, CA:First Street
  • 73. 73Livermore, CA:First Street
  • 74. 74Livermore, CA:First StreetCommissioned by Design, Community and Environment
  • 75. 75 Vibrant DowntownBut I can’t see the mountains!
  • 76. 76 Vibrant DowntownBut I can’t see the mountains!
  • 77. 77 Vibrant DowntownBut I can’t see the mountains!
  • 78. 78Vibrant Downtown
  • 79. 79San Bruno, CAEl Camino Real - San Mateo Avenue
  • 80. 80San Bruno, CAEl Camino Real - San Mateo Avenue
  • 81. 81San Bruno, CAEl Camino Real - San Mateo Avenue
  • 82. 82San Bruno, CAEl Camino Real - San Mateo Avenue
  • 83. 83Vibrant Downtown
  • 84. 84 Vibrant DowntownWe 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
  • 85. 85 Vibrant DowntownWe want a more vibrant Downtown!The model• Informs Community• Informs Policy Makers• Identifies Alternatives/TradeoffsA Powerful tool for a community based visioning process
  • 86. 86 Vibrant DowntownLos Altos Recent survey• 47% opposed• 43% supported• 3 stories or more• What if they knew?
  • 87. 87 Vibrant DowntownWhy Downtowns are important!What is the vibrant downtown experience? ―What attracts people most, it would appear, is other people‖ Walkable Streets
  • 88. 88Vibrant Downtown Greentown Los Altos
  • 89. 89Vibrant Downtown
  • 90. 90Vibrant Downtown
  • 91. 91Vibrant Downtown
  • 92. 92Vibrant Downtown

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