ready to go at the same time Amazon was ready,” explained local developer Bruce McNeilage of Kinloch Partners LLC. He went on to say that cities like Nashville, which has a long history of successful public-private partner- ship projects already in place due to constant cooperation between the city government and private investors, was far better prepared in the “bidding war” for HQ2. In the case of OCE, each job cost the city about $13,000 in public money for incentives and development compared to the per-job-cost in Long Island City of $48,000, for example. Ralph Schulz, CEO and president of the Wilson County Chamber of Commerce, elaborated, “Part of the reason it was so easy to pull it all together was because we had all these partnerships and teams that

areas, you like to handle your flips one at a time, or you are just focused on snagging that third long-term rental property by the end of 2019, community devel- opment should play a role in your investment strategy. Some community development projects pan out better than others, and you can use your ability to spot a well- planned project to optimize your chances of investing in an area perfectly positioned to benefit from pending community development. While you can (and should) look into transacting in areas that have been targeted for community devel- opment — the most ubiquitous example at present is probably investing in or near a qualified opportunity zone — there is more you can do to check the quality of a community development project. While many of these projects enjoy massive capital influx up front, when it comes to long-term benefits, not all succeed or are sustainable when the public well runs dry. There are three characteristics of a community development master plan that indicate the community itself will be well-positioned to grow long after the initial phases of the project are complete: FLEXIBILITY IN URBAN DESIGN AND ZONING Community development projects incorporate multiple vested interests, which often means zoning and urban design are subject to intense regulation. A sound com- munity development plan will provide protection for the important interests that make the development possible but retain flexibility so that the community can continue to grow. For example, if there are public-transit require- ments for the area it is important to allow for the tech- nological evolution of that transit over time and, also, changing rider preferences. Otherwise, you may find your community shackled to outdated transit that makes it an unattractive residential area in 20 or 30 years. SURROUNDING AREAS A well-planned community will have “open” areas that permit it to permeate and become part of other, adjacent communities. For example, streets should not run exclusively in a circular pattern that delineates the edge of the community all the way around, effectively enclosing it and creating a physical and mental barrier. Instead, at least some streets should extend outward into the surrounding areas so that there is room for future development and the new community can be integrated into the existing ecosystem of the city. NO. 1 NO. 2 INTEGRATION OPTIONS FOR

The Truth About “Community Development” and Your Real Estate Deals

are used to doing this [type of public-private project].” Ultimately, the chamber spearheaded the selection process of a site for the OCE, then Amazon made the final selection of Nashville Yards. The Yards is also al- ready involved in a number of philanthropic endeavors with entities like the Susan G. Komen Breast Cancer Foundation, which recently announced plans to host a series of events in the local entertainment district and possibly lease office space in the area, making it an even more attractive location for a company like Amazon. The project itself is a $1-billion, 17-acre development fronted by a 1.3-acre public park along a CSX Corp. railroad. The work has been partially subsidized with $15.2 million from the city government, and Amazon has boasted the OCE will permit employees to bring their pets to work so they can enjoy the adjacent dog park. EVERYREAL ESTATE INVESTOR BENEFITS FROMCOMMUNITYDEVELOPMENTDONE RIGHT It’s clear that on a grand scale, well-orchestrated community development projects bring economic de- velopment, rising property values, and great returns to investors. But what if your investing currently operates on a slightly smaller scale? Is there room in the com- munity-development strategy for you? Absolutely, yes. Whether you are involved in the multi-million-dollar types of deals that bring Amazon to new municipal


by Carole VanSickle Ellis

or real estate investors, engaging in productive, profitable community development projects can bring many practical benefits. Perhaps the most familiar is the concept of the public-private partnership, wherein public entities such as city and state governments com- bine forces with private entities such as real estate in- vestors and developers to undertake large development projects that neither party in the equation could fund or manage alone. Often, nonprofit organizations enter this equation as well, either matching funds in exchange for having a say in the “mission” of a development or contributing to the overall bottom line by bringing tax incentives or credits to the table. This is particularly common when the development in question will include F

affordable housing as part of the overarching plan. One of the best examples of this type of community de- velopment done well is in Nashville, where Amazon opted to place an “Operations Center of Excellence” (OCE) after concluding its search for a prime location for a second corporate headquarters. Although Nashville did not land HQ2, the OCE did bring with it 5,000 jobs on a much-ac- celerated timeline compared to the HQ2 winners. Per- haps more importantly, however, was that the OCE cost Nashville comparatively little in light of the expenses that other cities, including the winners, accrued. “Nashville landed Amazon’s business by having some- thing already built, by getting the word out, and by creating a multiuse development with retail, condos, etc. that was

62 | think realty magazine :: november / december 2019

thinkrealty . com | 63

Made with FlippingBook Online newsletter