Five Ingredients For Adaptive Reuse
From what makes neighborhoods special for redevelopment and how to decide what to use a disused property for to who's buying Miami properties to how one major city got a redevelopment wrong, here are five things we learned at our Adaptive Reuse and Repositioning Revolution.
1. What Makes A Neighborhood Prime For A Redo?
There has to be a critical mass, not only of infrastructure, but of “content” as well, says The Mana Group CEO Eugene Lemay (left). That content, he adds, are features of the neighborhood's culture that make it unique when it comes to art, music, theater, etc.
“You have to really curate your clients and the retail for sure, and you definitely have to bring content,” Eugene said. “Without content, it's just a bunch of buildings. I don't think anybody here at all wants to live in a place that's just concrete and glass. You have to create culture.”
It also has to have some feature that “makes a light bulb go off,” says Colliers International's Mika Mattingly (right). That feature, like the bayside property in Sunset Harbor, is a way “you can sell the dream” to investors and potential customers.
2. What's Old Is New Again
When looking at a building and how to reuse it, many of our panelists suggest that its history should play a role. “I think people are looking for a sense of connection to a place and a sense of authenticity,” says Touzet Studio's Jacqueline Gonzalez Touzet.
A prime example is the music/nightclub venue Ball & Chain in Little Havana on Brickell Avenue. The Barlington Group's Bill Fuller told our audience that his group turned the former furniture store back into a use not seen since the '30s, a place where Cuban culture mixed and jazz greats such as Count Basie played.
“We had to build a storyline as to what the Ball & Chain would have been had it never closed, what it would have been on its 80th anniversary,” Bill says.
“People, today especially, they don't want to be fooled,” Bill adds. "You know when you enter an environment that's been programmed or are being played with. I think that people at this point are on the hunt for true authenticity."
3. Municipalities Need To Offer More Incentives For Redevelopment
Claro Development's Sandor Scher says municipal governments need to play a more active role in adaptive reuse projects—by which he means help them financially.
“From a development perspective, anything you can do to offset your principal, your equity...it's still something that helps,” Sandor says. Even easing zoning codes to allow certain uses is helpful. “And quite frankly, our cities are not doing nearly enough,” he adds.
Bill notes he installed a 23k SF Goodwill store on 8th Street in a space that had no parking. He says for Goodwill, it was tough to convince them of the potential for success given they were used to having suburban-style surface lots for customers. But it worked out.
“That Goodwill is one of the highest-grossing stores in South Florida,” he says.
4. Tenant Selection Is A 'Vetting Process'
Bill also said developers must vet potential tenants for the right fit on a reused property.
“It's not just who is willing to pay us the highest rent,” he said. "Sometimes it's the group that's brought the lowest rent.“
Mainly it comes down to identifying what their strength is. Are they a great operator? Do they have a great vision? Do they have the capacity to execute on their vision?
When you pick the right operator, the right team, when they build it, they will come," Bill said. "They will absolutely come.”
5. Miami Is The Big Apple In New Yorkers' Eyes
Mika told our audience of the $1.5B in commercial property that sold last year in Miami's urban core, 68% of the properties were bought by investors from New York. Which is great, but Sandor cautioned that out-of-town investors still need to understand the community before developing. He cites Williamsburg, Brooklyn, where he lived from 1999 to 2003.
“Watching the beginning of that neighborhood change was a real interesting experience for me," Sandor said. "There were real opportunities that were missed by the city and the developers in Williamsburg. And it's almost the same thing we struggle with here in Miami."
Sandor says Chicago did it right with Millennium Park. The city took prime real estate in the downtown area and created a compelling public space.
“If you give the best real estate in the city to the people in the city,” you create an ideal situation for developers. “We'll still build our buildings, we'll just build them on the other side of the park.” He adds Williamsburg had a chance at creating Brooklyn's “Central Park, and it didn't happen.”