A wide-angle, elevated photo taken from an arterial road adjacent to Southlake shows the stunningly inviting entrance to this town center near Fort Worth, Texas.
		Mike Lewis photography, courtesy of Cooper & Stebbins

Developer fascination with urban centers grows

Never mind the false starts and confusion, a book and a conference highlight the growing appetite for mixed-use environments.

Robert Steuteville

More than 500 developers and consultants attended a two-day Urban Land In-stitute “Placemaking” conference at Reston Town Center in Virginia in mid-September. The strong turnout was indicative of the industry interest in building mixed-use projects centered on main streets or designed as downtown districts.

Mixed-use, new urban projects are “hot” in the development industry, yet they require far more skill to pull off successfully than the typical suburban shopping center, office park, or apartment complex. Developers are thirsting for guidance, as was palpable in Reston, and they will find a lot of that in the newly published second edition of ULI’s Mixed-Use Development Handbook. It’s been 16 years since ULI put out the first edition, and boy, have things progressed in that time. Projects influenced by New Urbanism make up about two-thirds to three-quarters of the new volume.

Taken together, the Placemaking conference and the Handbook offer a good perspective on how the development industry views New Urbanism. While new urbanists routinely mix uses at smaller scales, the ULI is focused more on the Big Project, such as Mizner Park, City Place, Santana Row, or Easton Town Center. Most of the projects being talked about are urban centers and cores — what new urbanists would describe as T5 and T6 of the Transect. And they often arrive complete — a new downtown in one highly capitalized grand opening.

Yet there’s only so much demand for $500 million town centers in any market, and these projects — because of their sheer size — carry significant risks. Richard Heapes, the architect who designed the influential Mizner Park in the late 1980s, acknowledged as much in Reston. “I think these things [town centers] are going to get smaller,” said Heapes. “And that is great — because they have been too big and developers have tried to do too much. Town centers will be phased more. You start with a kernel of a place.”

Heapes cited Santana Row in San Jose, which struggled at first — partly due to the economy, and partly due to a huge fire just prior to opening in 2002 — but is now stabilizing (see article on page 6). As an urban environment, Santana Row is spectacular, Heapes said. Yet, he claimed, “It was too damn big. You can’t do a whole city district at once.”

Another trend is the growing willingness to have residential units permeate the core of mixed-use developments. “The notion of placing residential units over retail uses was long held unworkable in mixed-use projects even though this configuration is common in many downtowns,” notes the Handbook. “But ideas about the appropriate placement and configuration of residential uses have changed significantly in recent years.” At Reston, James Todd of the Peterson Companies stated flatly: “The single biggest change that I have seen in the last five years is the growth of the willingness of people to live right in the middle of town centers.”

It is not clear to what extent this represents a shift in the market or a shift in developers’ attitudes. Sales and leasing of residential units in town centers — i.e., apartments and condominiums over retail, townhouses, lofts, live/works, and stand-alone apartment buildings — have exceeded expectations time and time again, notes Charles Bohl, author of ULI’s recent Place Making manual and one of the featured speakers in Reston.

Apparently a significant segment of the population will pay a premium to live on top of urban amenities. This principle may also apply to lodging. Easton Town Center, a highly successful 1.5 million-square-foot project in Columbus, Ohio, has three hotels at 83 percent occupancy, although the project is not near any tourist attractions. “These environments are good for hospitality,” said Yaromir Steiner, one of the project developers.

Easton, however, doesn’t have any residential, which brings up a category of projects called “lifestyle centers.” These borrow from New Urbanism in design, but focus almost exclusively on retail. At Reston, a number of ULI developers admonished panelists to clearly distinguish lifestyle centers — referred to by one developer as “malls with the roof taken off” — from town centers containing a more balanced mix of uses. That points to a growing awareness on the part of ULI members about the elements of authentic urban environments.

Key details
The Handbook offers excellent case studies and important details that developers will need to know prior to embarking on major mixed-use projects. Many projects, for example, depend heavily on retail — so developers need to know how much commercial square footage can be supported by other uses on site. Let’s say the development calls for 400 housing units, 400,000 square feet of office space, a 300-room hotel, and 150,000 square feet of stores and restaurants. According to ULI research, the houses, lodging, and office workers will each contribute about $1.2 million in retail sales (a total of $3.6 million annually). That sounds good until one realizes that the retail needs $45 million in sales to perform well ($300 per square foot annually). The lesson is not to overestimate the volume of retail supportable by other uses on site. Shops generally must draw from a wider area.

How do they do that? The recommended approach is to create a compelling place that will lure shoppers back repeatedly. A good example was right outside the lobby of the conference center in Reston Town Center. The developer, Terrabrook, is creating the most compelling and compact urban environment in Fairfax County, Virginia. Reston Town Center has been under construction on and off for more than 10 years. The problem is, as Heapes noted to the general amusement of the crowd, “they torture you to get in here.” The comment struck a chord with me, because that morning I had driven right by the town center, unsure of how to enter and uncertain even about which side of the highway it was located on. Urbanism is Reston Town Center’s strongest asset — and it’s hidden.

The visibility problem is being addressed in some of the more recent projects. At Southlake near Fort Worth, Texas, developer Cooper & Stebbins has created a big, compelling square anchored at one end by a four-story city hall/library and on two sides by two-story commercial buildings. This square opens to the arterial road, putting the urbanism on display to all and drawing visitors into the larger town center. Perhaps it is no coincidence that, according to Bohl, “six of the seventeen national retailers reported that their Southlake stores had the best opening-day sales of their entire national chains, and none of the retail tenants turned over during the first year.” And that’s without a major anchor. Bohl reported that the planners had initially wanted to hide the square behind two buildings, but officials insisted that the city hall be on display. That “compromise” was probably a lucky one, and perhaps ULI members will take note. Southlake is the cover image for the Handbook, evidence that the project’s success has garnered industry attention.

The Handbook isn’t all about town centers and urban villages. ULI identifies two other types of projects: mixed-use towers (huge buildings usually reserved for major downtown cores) and what are called “integrated multitower structures.” The latter concept began with Rockefeller Center, which also represented the high-water mark in urban design for this category. These types of projects degenerated into some pedestrian-unfriendly developments in the 1960s and 1970s. Some of that approach continues today — especially overseas. It’s amazing the degree to which modernist designs in Japan look dated — meet George Jetson! — compared to the new urban-influenced US projects.

The Handbook is an important resource, and it is encouraging to see how many ULI members are interested in town centers. But don’t expect all of the answers from ULI experts yet. “I urge people to be patient,” said Steiner. “The reason why cycles [of what is fashionable in development] are so short is that people are trying to find their footing. When you see mistakes, don’t point fingers.”

He added: “Urban planning was destroyed in the last 50 to 60 years. I think we are moving in the right direction.”

Mixed-Use Development Handbook, Urban Land Institute, 2003, 414 pp. Hardcover, $89.95.

Grocery stores adapt to urban trends

Supermarkets fit into pedestrian-oriented sites with basement parking, liner stores, housing above, and other techniques.
Philip Langdon

Philip Langdon

		A 50,000-square-foot Whole Foods store, which opened last year, takes up nearly an entire 200-by-200-foot city block in the Pearl Street area of Portland, Oregon. The store anchors the five-block Brewery Blocks development on the site of the former Blitz-Weinhard brewery, a new urban infill project. The store, which has an in-store café and coffee shop, occupies the ground floor and a mezzanine. A stairway, passenger elevator, and a vertical conveyor system for groceries connect it to the underground parking garage, where an employee loads groceries into the customer’s vehicle. Upper floors contain 78,000 square feet of office space. On the rooftop is a 25,000-square-foot chiller plant.

North America’s grocers are discov-ering that if they build a better food store, customers will beat a path to their door — or, in some instances, to their basement parking garage. Across the US and Canada, a growing number of supermarket companies no longer automatically insist on constructing a 55,000- to 65,000-square-foot box sitting behind a big expanse of asphalt. Instead, they’ll agree to operate stores that come up to the sidewalk, that have small shops along their perimeter, or that — in dense urban settings — have parking underneath.

A new age in grocery store design appears to be dawning. “Almost all the supermarket chains are willing to be flexible,” says Robert Gibbs, a retail consultant based in Birmingham, Michigan. Here are conclusions that emerge from a New Urban News look at food store innovations:

• In high-density city neighborhoods, supermarket operators are learning they can attract plenty of customers despite placing much of the parking in a below-ground garage or on the roof. To make underground or rooftop parking relatively convenient, one escalator carries the shopping carts full of groceries to the parking level while an adjoining escalator carries the customers.

• In the upscale and natural-foods niches of the grocery field, operators have found that stores can be much smaller than the industry standard. The New Seasons chain in Portland, Oregon, says customers prefer its 30,000-square-foot or smaller stores, which offer a friendlier, more intimate atmosphere.

• On suburban greenfield sites, new urbanist developers are bringing supermarkets up to the sidewalk or lining them with small stores so that the grocery contributes to an appealing streetscape. Surface parking remains essential in most new suburban projects, but it may be placed to the rear or side, where it does less damage to a retail district’s coherence.

• Some new urbanist developers have done a good job of introducing grocery stores in a size range that seems a throwback to decades ago — roughly 4,000 to 5,000 square feet. In greenfield developments like Southern Village in North Carolina and Harbor Town in Memphis, small grocery stores are important socially.

• Meanwhile, residents of some new urban communities are trying to keep out large supermarkets. These residents want only small stores, whereas the developers see full-size supermarkets as critical to the success of their retail districts.

The Not-So-Big Store
New Seasons Market started in February 2000 and now has four stores operating in the Portland area and two more under development. Company president Brian Rohter believes a substantial number of people today want a food store that lets them feel like part of a community. “Our customers are interested in a human-scale shopping experience,” Rohter says. “Our stores definitely function as a ‘third place’” — sociologist Ray Oldenburg’s term for an informal gathering place.

The New Seasons Market in Portland’s Sellwood neighborhood “had a huge customer count on September 11, 2001,” he says, because people “wanted to reach out” after the terrorist attacks and they knew they could do that at the 15,000-square-foot store. Situated in an improving old neighborhood in the city’s southeast, the Sellwood grocery, according to Rohter, “has 38 parking spaces, which is tiny, but it has the largest per-square-foot sales figure of any store in Oregon. People come and shop daily. We provide places to tie up their
dogs and put water out for them.”

That kind of atmosphere would be hard to provide in a 55,000-square-foot store, he says. New Seasons, which sells “everything from Frosted Flakes to free-range chicken,” has mainly kept its stores in the range of 25,000 to 30,000 square feet. “They’re less costly to build because they’re smaller,” he says. So that a store can function on a small site, New Seasons has sometimes chosen to build a second story containing storage and the office, despite the inconvenience of moving goods from one floor to another. The stores open onto sidewalks and streets. In the new urban development of Orenco Station, a New Seasons Market containing 30,000 square feet has its front door opening onto a pedestrian-oriented street location and a second entrance next to a parking lot.

Although many supermarket chains claim they “need” 55,000 square feet or more, Rohter asserts that mammoth size is not mandatory. “The small size works for us because we see ourselves as the purchasing agent for the consumer rather than as the representative of the manufacturer,” he says. A large mainstream supermarket “has a lot of ‘me-too’ products because the manufacturers paid slotting fees to the retailer,” he says. “We don’t do slotting fees. We don’t need 50 feet of breakfast cereals. We get by with 24 feet.”

Specialty stores vs. mass marketers
Probably the chain best known for its success with not-so-big stores that fit into walkable urban districts is Austin, Texas-based Whole Foods. Specialty-store operators such as Whole Foods and Trader Joe’s “are creating pedestrian-oriented models with parking under or over the store,” says Michael Beyard, senior resident fellow at the Urban Land Institute. He adds, “Specialty stores are catering to a more affluent, upwardly mobile clientele, and so they are willing to pay more, expect the walkable setting, and are not put off by the unconventional parking arrangement.”

By contrast, he says, “the mass-market stores, while increasingly locating in urban areas, still tend to build the suburban model.” Why? “It is harder for mass-market stores to build structured parking because they can’t charge higher prices to pay for it except in really dense urban markets with high projected sales figures or if they are subsidized in some way by the public sector as part of a redevelopment scheme,” he says.

Gibbs credits mass-market chains with becoming more flexible in several respects:

• “They’re developing more models than they used to have. They typically have two or three size models,” which enables them to enter smaller markets. “In a city, you can do a smaller store because there are more people who walk to it and visit on a daily basis,” he notes.

• They are increasingly willing to have parking below or on the roof, though, according to Gibbs, “they only want to do it in tight urban areas.” An escalator system to carry shopping carts full of groceries, with an escalator for people next to it, may cost $250,000, he notes.

• They are becoming less resistant to having multiple entrances and to having certain specialty areas, such as a coffee shop, a bakery, or flower shop, open directly onto the street.

• “They are allowing housing on top. For them, that’s a radical change.”

Even so, it often takes a strong push from a municipal agency or a public development corporation to get a chain to agree to underground parking, housing above, or other nonstandard features. In San Diego, for example, a few supermarkets that depart from the norm have been doing well for years, says Senior Planner Lara Evans, yet when the city invites companies to build on a newly available urban site, “they just want to do their suburban model.” The biggest obstacle, in her view: “It’s corporate culture.”

Nonetheless, the trend is toward fitting grocery stores in with other activities and toward a somewhat more pedestrian-friendly atmosphere. Gibbs says a number of mass-market grocery stores have agreed to have shops that wrap parts of their usually dull perimeter. And cities are now on the supermarkets’ radar screens. Michael McElwee, development manager at the Portland Development Commission, points to a Whole Foods market in the “Brewery Blocks” just north of Portland’s center and says, “Clearly the grocers have made the decision that inner cities are new or emerging markets.”