Despite tightening credit markets and slowing retail expansion, mixed-use and town center projects continue to be developed. The changes in just how those projects are created will be the subject of a session at the ICSC RECon meeting, being held next week in Las Vegas.
Financing, leasing and public/private partnerships will be among the topics discussed by leading developers and municipal officials at “Development Issues in Town Centers and Mixed-Use Projects,” being held Monday, May 19 from 2:30 p.m. to 4 p.m.
“The world has changed some, but it has continued to see that mixed-use is real,” said session chairman C. David Zoba, COO of Steiner + Associates, Columbus, Ohio. “Planners are demanding it, and people want to get more happening on a smaller footprint.”
But these developments remain challenging, particularly in tougher economic times. Some elements such as apartments, Zoba observes, can’t be pre-leased, complicating financing. However, some lenders now allow funds from public/private partnerships to be counted as developers’ equity, particularly helpful in this more stringent era.
In fact, municipal officials now act as bankers and cheerleaders as well as civil servants to attract these projects. Minute Maid recently announced plans to relocate to Sugar Land, Texas, after it received financial incentives from the city.
“When you reach out to the private sector, good things happen,” said Sugar Land Mayor David Wallace, another session panelist. “I’ve traveled from Barcelona to Paris to Israel to pitch this city.”
Wallace, a developer with an investment banking background, is working on a project in downtown Waco, Texas, that has drawn other development.
“Five years ago, there was no discussion of downtown redevelopment,” he said. “We committed $60 million or $70 million of capital to mixed-use, and that has result in over $300 million of capital coming downtown.”
Other topics to be included in what is planned as a free discussion include stabilization, sustainability and structuring deals. But the market remains active, Zoba said.
“Interest rates are low,” Zoba said. “Projects are getting done.”