the development in question will include 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 creat- ing a multiuse development with retail, condos, etc. that was 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 part- nership projects already in place due to constant cooper- ation 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 Coun- ty Chamber of Commerce, elaborated, “Part of the rea- son it was so easy to pull it all together was because we had all these partnerships and teams that are used to doing this [type of public-private project].” Ultimate- ly, 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 already 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 attrac- tive 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.
STRATEGY
F or real estate investors, engaging in productive, prof- itable community development projects can bring many practical benefits. Perhaps the most familiar is the concept of the public-private partnership, wherein pub- lic entities such as city and state governments combine forces with private entities such as real estate investors 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 Truth About “Community Development” and Your Real Estate Deals ENGAGING WITH THE LOCAL COMMUNITY CAN LEAD TO BIGGER PROJECTS, HIGHER RETURNS.
EVERYREAL ESTATE INVESTOR BENEFITS FROMCOMMUNITYDEVELOPMENTDONE RIGHT It’s clear that on a grand scale, well-orchestrated community development projects bring economic de-
by Carole VanSickle Ellis
16 think realty housing news report
november 2019 17
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