SAN FRANCISCO—Wouldn't it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers' questions.

Dear Ms. Real Estate,

Copia is a handsome building, on a beautiful site, amid verdant and productive gardens serving Napa chefs—burdened by a killer debt. It is for sale: http://url.ie/uc8t. Conflicts among community groups, politicians, and developers seem irreconcilable. So far, most ideas put forward for the property are as poorly conceived and impractical as the initial vision for the property as a "center for wine, food, and the arts." A single developer, with deep pockets, and a vision backed by research (such as by GG+A) might find a use for the property that could succeed, and add a star to Napa's crown. How might that be brought about? Are there models elsewhere?

—Needing a Creative Solution Equal to the Space

Dear Creative Solution:

Finding a financially viable publicly acceptable star for Napa's crown requires, as you suggest, the engagement of a consultant real estate economist with a team capable of researching relevant markets and community/planning priorities as inputs into an analysis that will identify and estimate the feasibility of alternative options. The link you provide suggests an existing debt level of $78 million for the property. Ms. Real Estate must warn you that the analysis may find that meeting both financial and political criteria will require giving the debt a haircut. To avoid reinventing the wheel, listening carefully with the “third ear” to the financial and marketing history of the current and past users of the center and the reaction of key stakeholders will probably be the place for the consulting team to start. The term describing the process is “pre-architectural programming,” which concludes with a description of the use and the spatial envelope of one or more financially feasible options that will be approved by the local planning authorities.

Ms. Real Estate's experience is that implementable results are most likely to be achieved if the process does not include architectural designs. The role of architects and/or cost estimators on the consultant's team should be limited to indicating the development or redevelopment costs, remodeling and retenanting alternatives. The alternatives should not be designed, but described only in terms of their use and the net and gross square feet of their spatial dimensions. Including conceptual designs into the analysis tends to be an attractive diversion from the task of obtaining public approval of uses and spatial massing. Given contemporary capital market conditions, developers able and willing to obtain and put up the cash and development skills can be attracted once the project's financially feasible alternatives are guaranteed to win public approval if produced within the parameters of planning design criteria.

But as is the case today in many communities, particularly in California, the costs and risks associated with having to obtain use and massing approvals are likely to act as barriers to the attraction of developers capable of implementing the construction and design of a development that will serve as the crown of Downtown Napa. So obtaining knowledge of what works from a market and financial perspective, as well as obtaining entitlement in advance for the proposed development will give the decision makers maximum flexibility in their choice of developer. From “The Flats” on the once burning Cuyahoga River in Cleveland to “Rivermark” in Santa Clara, California, Ms. Real Estate has seen the process she suggests guide communities to award winning, financially successful, civically rewarding development projects.

Instant Insights /

How to Make Feasible a Creative Space

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