BLOGS: Multifamily Focus

2006-10-25, 10:11

"Green" construction is becoming a reality

By: Jonathan Groner
Mark Polston, a D.C. associate at Womble Carlyle, has just published an interesting article in the October 2006 issue of Southeast Real Estate Business. The title of the article is "The Legal Side of Building Green." Polston writes that green, or environmentally sensitive, construction has become the latest hot topic among builders and developers across the nation, as energy shortages become more and more acute.

"Knowledge of green standards ... will become a necessity for developers, builders and their advisors, as governmental entities are increasingly requiring that green standards be met for public building projects," Polston writes. For private construction as well, Polston says, green requirements may be in the offing in various locations in the Southeast United States. The article reviews tax credits and other preferences for green construction in Washington, D.C.; Virginia; North Carolina; Maryland; Georgia; and Florida.

The article is clearly relevant and in fact must reading for people engaged in all types of development, including mixed use. It can be found at:

2006-10-18, 17:01

Mixed use above Union Station

By: Jonathan Groner
Bisnow on Business' Real Estate Weekly, a lively, free online publication published in the D.C. area, is reporting that the Akridge company, a major D.C.-area developer, is poised to build its biggest project ever -- a development above the train tracks at D.C.'s Union Station. Akridge just purchased 15 acres of air rights over the tracks from the federal General Services Administration. This space will support three million square feet of offices, condos, apartments, stores, and even a hotel, Bisnow on Business reports. It is so large that first occupancy will not occur till 2013.

Bisnow on Business reports that "Burnham Place," named for Daniel Burnham, the visionary designer of Union Station itself, "will be Akridge’s biggest undertaking in its 30-year history, and a major move into mixed use. Historically, Akridge has been an office developer, with a sweet spot between 170,000 to 400,000 square feet and ground floor retail. . . . In recent years Akridge has added some residential components: Such predominantly office-focused projects as Gallery Place and The Hartford in Clarendon have included condos (192 and 70, respectively). Plus, they are considering a mixed use project in their current planning phase for seven acres at Buzzards Point. However, the Union Station development could be as much as 50% residential. In part this reflects an intentional new direction, although in large part it's also just a natural accommodation of new urban trends combining living, working, and playing. "

The project will have an estimated value of $1 billion, and Akridge has already brought in major out-of-town equity investors. Akridge is about to open a design competition to find an architect.

It seems to me that if Akridge and its investors are investing so much money and time in this project, mixed use is definitely here to stay. Those "new urban trends combining living, working, and playing" have tremendous commercial appeal.

2006-10-17, 15:25

Mixed use in Winston-Salem

By: Jonathan Groner
Mixed-use development is coming to Winston-Salem, N.C., in a small but significant way. The city, in which the home office of Womble Carlyle is located, is benefiting from downtown redevelopment in the same way as larger metropolises have benefited.

The former Davis department store on Fourth Street, just blocks from Womble Carlyle's offices, is being torn down and replaced by a new luxury eight-story condominium building, One Park Vista. Units in One Park Vista will run from about $250,000 to about $1 million. It is being designed in the 1920s classical revival style.

The building will feature 33 apartment units and a ground-floor commercial unit with about 3,500 square feet of commercial space -- either retail or restaurant. Separately, another developer is planning a civic plaza across the street. Observers expect that the face of downtown Winston-Salem will undergo a major makeover in the next few years.

John Allen, the head of the city's development office, told the Winston-Salem Journal earlier this year that the project is "a reflection of the trends that are going on not only in Winston-Salem but across the country."

2006-10-12, 15:27

An insurance and risk assessment perspective

By: Jonathan Groner
Laura Luger and Garth Gersten, two lawyers in Womble Carlyle's North Carolina offices, have graciously shared their observations on an aspect of insurance law that is relevant to anyone who is building a large mixed-use project. Their thoughts follow:

CIPs, OCIPs, CCIPs, wrap-ups - these are all acronyms or abbreviations for insurance programs that have been applied in large construction contexts. Defined generally, they include commercial general liability (CGL), worker's compensation, and umbrella coverages for all parties on a construction site. An OCIP is an owner-controlled program, while a CCIP is contractor controlled. Initially, these programs were marketed as a mechanism to cut overall insurance premium costs to enhance a project's bottom line. Now the insurance industry is taking a different tack.

Leading up to its Annual Construction Risk Conference held this week in San Diego, the International Risk Management Institute (IRMI) performed a survey of contractors and subcontractors to assess satisfaction with Controlled Insurance Programs or "CIPs." Six hundred parties responded to the informal survey. IRMI reported that among general contractors, 60% like CIPS, 35% tolerate them, and 5% hate them. Among subcontractors, 20% like CIPs, 50% tolerate them, and 30% hate them. For those contractors who like CIPs, the satisfaction usually stems from their ability to control a project's insurance and risk management. Owner controlled programs are less favored, since the contractors believe that they are better qualified to manage risk on the project. There are no known industry studies as to whether CIPs actually yield any cost savings to any participants. The benefits are difficult to quantify, so cost does not seem to the key driver for whether to employ a CIP. Experts tend to agree that CIPs or wrap programs may only be cost-effective on projects with values exceeding $150 million, but if "control" is the driver, maybe they should be considered on smaller sites. They do expand the availability of coverage for subcontractors who might otherwise have difficulty getting contractually required coverages. In the end, CIPs seem to make sense when the party who is in the best position to acquire the coverage, manage and administer the program - not usually an owner - controls the CIP with an eye toward effective risk management and breadth of coverage.

For more information on this topic, go to

2006-10-09, 16:00

The '60s and today: historical perspective on mixed use

By: Jonathan Groner
The Washington Post today has a fascinating article by Dana Hedgpeth that is essentially about the new urbanism, the old urbanism, and mixed use, though she doesn't use those words.

"More than 40 years ago, the District redid parts of Southwest Washington, reflecting the latest and the best urban renewal thinking of the day: Tear down as much as possible, replace it with efficient concrete buildings and build a freeway nearby. . . . Today, planners, developers and residents are looking at the area very differently. Today, cities want foot traffic, not cars. Waterfronts attract leisure use. The ideal cityscape is built to human scale. And so, Washington intends to reverse what was done in the last spasm of urban renewal and remake it to the modern taste."

Hedgpeth points out that the team of developers that was awarded the contract to redo 47 acres in Southwest D.C. will provide retail space, office space, condominiums, hotel rooms, and cultural spaces. Some of the residential units will be for moderate and low-income families. All this will not be completed till 2017.

Some present residents, Hedgpeth says, are enthusiastic, while others like things the way they are. Business owners worry about their continued profitability. And people who live on their boats in the Southwest marina are afraid that the "new urbanism" will push them out, something that the developer, PN Hoffman, denies will happen.

The old Waterside Mall represented an admirable attempt to "clean up the slums" near the U.S. Capitol. Apartments were designed by no less a famous architect than I.M Pei. But the 1960s vision did not take off, and now the thinking has changed.

The headline says it all: "Southwest Waterfront Will Finally Get Over the '60s."
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