The Project Renovation Paradox

When times are good, property owners don't want to impact revenues by embarking on a renovation project; causing site disruptions which impact tenants, visitors and shoppers. Paradoxically, today, poorly performing properties in need of a facelift lack the necessary revenue to do anything about it.

Alas, a Catch-22: If your property is making money, you don't feel the need to renovate. But when sales and rents are down and you feel the need, you don't have the money to renovate.
So, when is a good time to renovate?

John F. Kennedy once said, "The time to fix the roof is when the sun is shining." In terms of the economic climate, these are cloudy times at best (even stormy, in many locations). So, what can a property owner do today who is strapped for cash?

Find some money. Invest in capital expenditures and make decisions with an eye on ROI.

The most obvious advantage of renovating in this environment is cost savings. Now is the first time in the 30 years that construction costs have actually come down. Historically, they have gone up steadily, if not sharply. Today, in many parts of the world, costs are down by over 10% from just six months ago. According to statistics compiled by Rider Levett Buchnall (http://www.americas.rlb.com/documents/cost/reports/2009_q2_qcr.pdf), construction costs in cities like Denver and Seattle declined by as much as 8% in the first quarter of 2009 alone.

A second advantage: When business is slow and there are vacanies, there is less disruption to guests and less impact on cash flow from operations. On top of that, construction can proceed more quickly, and property owners and managers can get the word out that their property is newly renovated and open for business.

Properties that have been newly renovated will be in the best position to restore and/or raise rents and increase occupancies. Properties that defer needed maintenance and refurbishment and wait until times are better will miss being able to take full advantage of the inevitable upturn. When thinking about where to shop or go see a movie families most often go to the ones that are either new or newly renovated. Research data from a recent study conducted by STR shows that, over a five-year period, revenues for renovated properties increase at three-and-a-half times the rate of un-renovated properties.

Bottom line: Hard times are good times to prepare for better times.

Images courtesy of: Global Graphica, Mission Viejo Life

Some Text Courtesy of: WATG

Simon Malls looks to engage the community

In an attempt to create buzz around its properties, Simon Property Group Inc., owner of the Shops at Mission Viejo has put in place a marketing plan that will include hosting 11,000 events this year at its various locations.

A release about the planned events outlined a couple programs that will be held throughout 2009. Simon Fashion Now will showcase the newest fashion trends. Kidgits Eco-community will teach parents and their children how to be eco-friendly in today’s environment. Simon Grassroots Programs will be community-based activities like career fairs and charity fundraisers.

Read more at Globe St.

I think it is great to see their awareness about their impact on the community. Looking back to the evolution of the mall, these were the heart of the community. Today, the poor design of massive blocky architecture which turns it's back to their external facade and then surrounded by a sea of asphalt; has caught up to them over recent years. They are failing to compete with the newer retail destinations which seem to be woven into the fabric of the community by focusing on pedestrian friendly and engaging experiences. Hopefully these operators will see this reality during these waning times and start planning to reinvent themselves to be competitive again in the reatil world and offer what the community is looking for.

Recent improvements at the Shops at MV replaced turf with drought tolerant planting which is a good step in the right direction to be more eco-friendly!

The Phenomenon of Dying Malls

American malls have been around for less than a century, but their influence on our culture has been amazing. However, even in prosperous times, distressed malls have been a persistent problem, as well as a point of intrigue in the suburban landscape. The current economic slump has magnified the problems that ailing malls have been battling for years, or even decades.

The rapid development of North American suburbs resulted in a rush to build malls. Most developers assumed that if their mall was newer and larger than the competition then they would make money, and for the most part they did. But what many developers failed to consider or neglected to care about was what happens to their project when the next mall is built. The blight that is left behind when one fails is a weight on the community. Lost tax revenue and jobs, increased vandalism and crime and lower property values are just a few of the problems a dead mall creates.

While dying malls are not a new phenomenon, their sustainability is something developers should consider. The dominance of the fashion, food-court and family-focused mall is ending. The good news is that no new enclosed malls have opened in the U.S. since 2006.

Vacant malls, strip center shopping centers and big box stores have already been redeveloped into more sustainable, less auto-dependent places more in sync with today’s demographics. Depending on the specifics of each site, we can expect to see future failed malls re-inhabited, re-greened, or retrofitted. Essentially malls can be repositioned into what a community needs. When a mall dies, many options are on the table. Redevelopment into a more sustainable mixed use center is often a good solution if the real estate is valuable. They have the advantages of an already existing infrastructure and usually are located on major transportation routes. They should be regarded as a potential asset, much as you would look at well-located unimproved land, or a deserted warehouse or office district in a city center.

This kind of recycling will be particularly useful in suburbs, as they develop more “urban’ amenities” — like interesting restaurants, live music and local festivals. By redoing the mall, this can be accomplished without urban “densification” and retain low-density environments of single-family homes preferred by the vast majority of Americans. Sometimes dead malls find new life as colleges, government buildings, branch libraries, spaces for nonprofit arts groups, places of worship, car dealerships and community centers that can host a variety of events. Most times, if the building is cheaply constructed, and neglected for years, the only viable option is demolition. In some of the more dense communities, this will provide an opportunity to repair the regional landscape by turning them back to open space

What should never be an option is to allow the building to sit neglected for years. Although it may be sad to see a place with so many memories bulldozed, there isn’t much future for an abandoned generic suburban shopping mall. The current crop of dying malls are by no means the end of the shopping mall. Retail and shopping are too integral a part of American life.

The biggest long-term challenge to malls isn’t economic. It’s environmental. Right now, consumers can’t afford all the stuff we used to buy. But in the long run, the planet can’t afford all the stuff we do buy. So finding a business model that’s economically viable and environmentally sensitive shold be a goal for all new (and repurposing) mall developers.

So going forward, developers and mall operators need to recognize that the shopping mall of the future can’t simply be a nucleus of stores surrounded by a sea of asphalt with a ring of highway around it. They need to hire talented suburban planners, architects, and landscape architects whom will encourage developing and/or transforming shopping centers into dynamic destinations that are woven into the fabric of the community. Developers should also strive to create malls that offer a place for people to socialize, not simply to buy. While no one likes to see businesses fail, dead malls provide great opportunities for communities to redevelop in healthy ways. Now is the time for them to remove the regulatory obstacles to retrofitting.

Here are some examples fo successful re-use.

Belmar in Lakewood, Colo.

Mizner Park in Boca Raton, Fla.

Bella Terra in Huntington Beach, Calif.

Photos courtesy of:

Chris Pixel

Xmelinda

ThePiratesDilemma.com

Trekearth.com

Huntingtonbeachevents.com

Epa.gov

Some text courtesy of:

DeadMall.com

Is Mission Viejo Walkable?

Taken from the guiding principles of the Internet site Walk Score, which is devoted to helping people find walkable places to live:

Walkable Neighborhoods
Picture a walkable neighborhood. You lose weight each time you walk to the grocery store. You stumble home from last call without waiting for a cab. You spend less money on your car—or you don't own a car. When you shop, you support your local economy. You talk to your neighbors.

What makes a neighborhood walkable?
A center: Walkable neighborhoods have a discernible center, whether it's a shopping district, a main street, or a public space.
Density: The neighborhood is compact enough for local businesses to flourish and for public transportation to run frequently.
Mixed income, mixed use: Housing is provided for everyone who works in the neighborhood: young and old, singles and families, rich and poor. Businesses and residences are located near each other.
Parks and public space: There are plenty of public places to gather and play.
Pedestrian-centric design: Buildings are placed close to the street to cater to foot traffic, with parking lots relegated to the back.
Nearby schools and workplaces: Schools and workplaces are close enough that most residents can walk from their homes.

Streets Designed for Everyone
Complete Streets are roads are designed for everyone who uses them, including bicyclists, pedestrians of all ages and abilities, and people getting on and off transit vehicles. These streets are:
Accessible: There are wheelchair ramps, plenty of benches with shade, sidewalks on all streets, etc.
Well-connected: Streets form a connected grid that improves traffic by providing many routes to any destination.
Built for the right speed: Lanes are narrow or traffic calming is in place to control speed.
Comfortable: Pedestrian medians at intersections, count-down crosswalk timers, bicycle lanes, protected bus shelters, etc. make the street work better for those outside of a car.

How does Mission Viejo compare?
If you were to live nearby or drive to, park, and then walk from the 'Central Hub' of Mission Viejo, we look pretty good...on paper that is. How many of these businesses are actually worth walking to? And, do you feel comfortable walking from one to another? Walking along Margurite's 5' wide curb adjacent sidewalk, next to a tiny, poorly maintained landscape setback is anything but comfortable to me. Hopefully the City is taking this into account in their street widening efforts and maybe one day Mission Viejo will transform from a typical suburban city to a community.