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CONNECTION

EMERGING HOT SPOTS

THE CONNECTED CITY PROJECT

URBAN INFILL

DESIGN AWARDSAWAWA ARDS

WARDSW

SPRING 20146

Contributors

URBAN INFILL: MASTERING INVESTMENT hURDLES AND DESIGN OPPORTUNITIESMichael Buckley, FAIA

Michael is a clinicalprofessor and director ofthe University of Texas-Arlington’s urbanthink-tank, The Centerfor Metropolitan Density.His research is focusedon strategic industryclusters, demographicshift, and high-densityresidential and workplaceformats. Michael alsoheads a UTA advanceddesign studio, testingfinancial feasibility forlarge-scale urban infillwith an emphasis oncreating tax revenues,from which taxincrement financing canoffset infrastructure costs.As president of HalcyonLTD, he advises cities onurban mixed-use projectsand re-use scenarios forunder-utilized sites. He isa former board memberof AIA Dallas, and aformer president of theConnecticut Society ofArchitects.

hOT SPOTS:EMERGINGNEIGhBORhOODSMAKE DALLASSTRONGERMarcel Quimby, FAIA

As a Dallas resident forover three decades(much of that in the innercity), Marcel hasobserved andparticipated in thetransition of inner-cityneighborhoods—bothhistoric and non-historic—from neglectedand unappreciated tothriving and popular. Sheis a principal withQuimby McCoyPreservationArchitecture, a practicecommitted to therehabilitation andadaptive re-use ofhistoric structures.Marcel serves on the Cityof Dallas Urban DesignPeer Review panel. Shehas served as presidentof AIA Dallas andPreservation Dallas, andhas served on the boardof advisors of theNational Trust forHistoric Preservation, aswell as similar boards forthe city and state.

PROFILE OF LISALAMKINJames Adams, AIA,RIBA

Passionate for denseurban environments andthe people and placesthat make them thrive,James proudly walks towork in the West End ofDallas daily from his loftin Downtown. AtCorgan, he has workedas an architect on amultitude of office,mixed-use and residentialprojects over the past 10years. An aspiring writingalways looking for goodstories, he is theassociate editor ofcontent for Columns.James has a zest fortraveling the world whichhe hopes to instill in his5-year-old daughter,Audrey.

DREAM wEAVING:hOw wILL DALLASREACT TO ThEPLANS PROPOSEDThROUGh ThECONNECTED CITyPROJECT?Greg Brown

Greg is program directorfor the Dallas Center forArchitecture. His careerhas always includedarchitecture, the arts,and film. Prior to DCFA,Greg was managingdirector of the AFIDALLAS InternationalFilm Festival, which grewto become one of thelargest in the Southwest.He has also served asmanaging director ofboth the MeadowsSchool of the Arts andthe Meadows Museumat Southern MethodistUniversity. A nativeDallasite, he holdsundergraduate andgraduate degrees fromSMU.

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Urban infill is the opportunistic repositioning of underutilizedsites with higher density mixed-uses targeted to specific nichemarkets. Urban Infill presents unique development difficulties withincreased density and re-zoning approvals, feasibility hurdles withexpected investment returns, and most importantly, designopportunities to create new architectural profiles, thoughtful openspace, and walkable streetscapes. Urban Infill is the premier signalthat an area is ready for residential and live-work regeneration.

Advantages of Urban InfillUrban Infill sites offer proximity for living closer to work,

avoiding increasing suburban commutes. For obsoletewarehousing or light manufacturing sites, prior uses can providecontextual themes for new developments. Infill allows largerfootprints and denser residential projects than prior uses, creatinga new “Density of Investment” for financial institutions based

upon expected future values. An absorption advantage also exists,as sites are typically under the development radar screen.

Disadvantages Also ExistUrban Infill occupies pioneering locations, where

security and quality of life perceptions are not alwayspositive. Prior uses may cause environmental uncertainty whichaffects timeline and financing. Approval thresholds are equallyunclear due to re-zoning and increased density necessary forfeasibility. Landowners may have unrealistic expectations for sitevalues which can stifle revival that the neighborhood wouldotherwise enjoy. Hence, cities should consider assisting siteacquisitions based on future Tax Increments generated, asexisting uses are upgraded to mixed-use, producing higher taxeswith portions re-dedicated to site infrastructure.

By Michael Buckley, FAIA

SPRING 2014

Urban inFiLLMastering Investment Hurdles and Design Opportunities

+

–

ZIMMERMAN, UTA ADVANCED STUDIO

Feasibility TestingMany architects fail to understand that the “holy grail” for

developers is the capitalized value of a project, not itscost. This capitalized value concept is foreign to many architectsas they may concentrate on controlling cost alone. Developersalso focus on net operating income (NOI), the net revenue afteroperating expenses, maintenance, and taxes—but not includingfinancing/mortgage charges. Financial institutions also focus onNOI as the source for debt repayment.

The Advanced Design Studio at the University of Texas-Arlington (UTA) has developed feasibility templates and cash flowmodels for architects to illustrate NOI over time with discountedcash flow (DCF) spreadsheets. These inflate both revenues andexpenses each year over 10 years, and include a hypotheticalresidual project sale in year 11. Then the annual NOI amountsand residual sale are discounted to present day at an appropriatediscount rate (UTA Model uses 8.5%).

The resulting net present value (NPV) is also used incomputing the internal rate of return (IRR) which includesmortgage debt (UTA’s model set at max 70% loan to cost). IRRis also carefully monitored by developers during design (UTAmodel threshold feasibility is 12% IRR). Thus,

architect/developer interactions feature two distinct modalities—architects fixated on cost and developers focused on IRR.

Architects should know that the developer’s “management ofrisk” drives development value—and that designers who have anunderstanding of the risks and revenue potentials of their work willaccordingly have more powerful roles in creating better architecture.

13COLUMNS | www.aiadallas.org

≥

+ + =

FinanCiaL FeasibiLiTy TesT

Hard Construction Costs + Soft Cost Fees & Allowances + Land Acquisition = Total development Cost

Revenues less Expenses =Net Operating Income

NOI at Year 3 Capitalized @ 7.5% (UTA) =

Capitalized value

≤

internal rate of return

IRR target minimum = 12% (UTA)

Far LeFT: VISION PLAN INFILLSCENARIOSInfill projects can be grouped toform a new urban district withunique image and identity. UTA’sAdvanced Studio for Fort Worthand Dallas repurposed currentlyvacant land with Infill usestargeted to specific nichemarkets. UTA Advanced DesignStudio goals are to test feasibility

and the benefits of density, and assuch the scenarios are academicexercises, not intended to showconsensus with stakeholders orcity agencies.

below: DALLAS REGEN—MAPPING NEW URBAN DNAProposal focuses on re-purposingvacant /underutilized sitesconnected by a new transit

linkages andresidential/retail/learningofferings to create a regionally-definitive, high-density, NextGenWorkplace. Infill sites shown incolor are connected by a“SkyRide” people-mover, linkingthree parking “Motherships,”each with high-density offices, anincubator, and new residentialchoices such as micro-lofts,

innovation district workforcehousing, and family courtyardunits. “Tomorrow’s Workforce”educational concepts feature anInnovation Institute, STEM HighSchool and Jobs Academy, with“E-Mote” digital kioskssponsored by Dallas PublicLibrary scattered throughout.

DRASKOVIC, UTA ADVANCED DESIGN STUDIO

LeFT and CenTer: DallasIncubator—Shared officecollaborative features stick-builtover concrete first level garagewith barrel vault wood truss

righT: Stacked townhomes allowtwo units per footprint—groundfloor flat, double-height upperfloor, and roof decks.

GONZALES, UTA ADVANCED STUDIO (LEFT AND CENTER) A. ESPINOSA; MARTINEZ, UTA ADVANCED STUDIO (RIGhT)

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The Infill Design OpportunityUrban Infill allows great flexibility for architects if they

understand the developer’s financial objectives. Density isthe watermark solution for Urban Infill, as shared costs can bespread further and mixed use offers more revenue to affordarchitectural features, landscaping, and designed open space.

Multifamily is today’s favored product, as young professionalseschew suburbia for more engaging urban experiences. Evenconservative organizations such as the Pension Real EstateAssociation have endorsed a “Walkability Premium” of increasedvalue for developments with walkable character.

Most Urban Infill is “stick-built” to conserve costs, providingwood-framed residential over a concrete podium ground floor,with supporting retail as significant revenue source and amenity.Structured parking is the unintended consequence of higherdensity Urban Infill, as the cost of urban parking is tenfold overthat for suburban. Solutions include tuck-under and podium stylegarages with units built above. These solutions do not improvethe streetscape experience and hence parking is a very special

design challenge. Design limitations imposed by stick-builtrequire articulated facades and a “kit of parts” of materials anddesign vocabularies which adopt existing neighborhood contextto achieve visual appeal for the “Walkability Premium” sought.

Putting the “Mix” into Mixed-UseUrban Infill relies on dramatic transformation of former

uses into higher intensity environments, mixing workplaceand housing with retail. This requires careful planning as each usehas varied mechanical preferences and user systems. Restaurantsrequire kitchen exhaust and solutions to manage deliveries andtrash removal far beyond what is needed for residential.Collision of these systems and services within the base buildingoften cause design and configuration conflicts.

Urban Infill Critical Success FactorsSix components define critical success factors with

desired attributes and performance standards:

SPRING 2014

Create Transforming Site/Use Concepts• Architectural Image• New District Character

Planned Mix ofRetail/Foodservice Offerings • Targeted Tenant Mix• Food /Fashion/Frivolity

Design Emphasis on walkability + Open Space • Streetscape Quality• Public + Private Spaces

Offer BroaderResidential Choices• Multifamily + MicroLofts• Stacked Townhomes

Respect User-DrivenConfigurations • Retail Layout/Servicing• Parking Adequacy

Advanced Testing ofFinancial Feasibility• Identify Market Niches • Illustrate Target Returns

Best Project Fit

The “best fit” balances compelling siteconcepts, with niche market support,matched with financial feasibility. This “holytrinity” of concept/feasibility/niche marketsupport is a fundamental litmus test forUrban Infill, particularly for unconventionalformats. New architectural profiles musttransform perceptions of the pre-existingproperty. Niche market support must match uses to targetedpsychographics, and financial feasibility must demonstrate market rents,with acceptable investor returns.

L. AGU, UTA ADVANCED STUDIO

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The Big Picture: Reconnecting the Urban LandscapeUrban Infill removes “missing teeth “from the urban streetscape experience and mitigates

security concerns with underutilized properties. Increased density allows Tax IncrementFinancing to justify better landscaped open space and community infrastructure. Urban Infill activatesneighborhoods, making them more sustainable and livelier. Unlike suburban development, Infill canuse surrounding urban fabric as context. Architects who master design limitations and financialchallenges of Urban Infill can create more valuable, authentic, and sustainable places. �

Michael Buckley, FAIA, is director of the UTA Center for Metropolitan Density.

For information on Higher Density Benefits, Demographics, and Industry Clusters, see UTA Center forMetropolitan Density Research Journals—CfMD #1 for Research Premises and Interim Uses, and CfMD #2for selected Advanced Studio projects—at www.uta.edu/architecture/research/cfmd.

15COLUMNS | www.aiadallas.org

Far LeFT, LeFT and above:

FORT WORTH S. JONESCORRIDOR VISION PLANEight blocks south of currentlyvacant lots transformed withInfill concepts such as expansionof Texas A&M/Wesleyan LawSchool; a new Geotech Institutefocused on the oil and gas

industry cluster; expandedconvention center and new hotel;a workforce residential /retailenclave; and innovativeeducational facilities for trainingthe emergent workforce,including Childcare/DiscoveryCenter/ Digital Academy /Learning Laboratory

J. BECK, MORRIS, B.NORS, UTA ADVANCED STUDIO (LEFT AND RIGhT)

Psychographics—The New User Mix

Infill should address specificmarket niches and certainpsychographic profiles withthese characteristics:

Techies—technology andmedia aware; Nighthawks—late-night roamers;Foodies—seekers of latest cafétrends; hipsters—effeteseeking edgy experiences;Family Values—family-orientedurbanites; Learners—seekinglifelong learning ; homeImprovers—décor-oriented;Arts/Crafties—fine artsdevotees; Entrepreneurs—individual achievers;Fashionistas—latest hotplaces/objects

beLow and righT: TRINITYLANDINGVacant site at the edge of DallasCBD, adjacent to the DesignDistrict with excellent highwayvisibility, offers park-orientedresidential multifamily and stacked

townhomes, boutique hotel, ethnicfood market Mercado, and ahealth club/café with access topedestrianized ContinentalBridge—uses which can serve on-site residents, Dallas CBDworkers, and the Design District.

above: Park-focused Residential,Hotel with skyline views of Dallas

above LeFT: ExistingUnderutilized Site

boTToM LeFT: Site Plan withHealth Club, Townhomes, Park-oriented MF Residential,Hotel and Mercado

J. wALLACE UTA

ADVANCED DESIGN STUDIO

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