On April 20, we joined the forces with International Council of Shopping Centers (ICSC), Local Initiatives Support Corporation (LISC) NYC, Larisa Ortiz Associates, and the NYC Department of Small Business Services, for a forum on how Business Improvement Districts, nonprofit community-based developers, and other neighborhood-based groups can promote high-quality ground-floor design in new mixed-use affordable housing developments.
New affordable housing developments have the potential to bring much-needed retail options to underserved communities throughout the five boroughs. Yet too often, poor design choices render these spaces inflexible, cramped, and hard to lease. The Design Trust’s Laying the Groundwork Design Guidelines aims to rectify this problem and ensure the next generation of developments strengthens our city’s neighborhoods and commercial corridors.
The panel, moderated by Larisa Ortiz of Larisa Ortiz Associate, included Madison Avenue Business Improvement District (BID) President Matthew Bauer, real estate consultant Noel Caban, IMPACCT Brooklyn Executive Director Deb Howard, WHEDco Community Development Vice President Kerry McLean, and Slade Architure Principals & Design Trust Fellows Hayes and James Slade.
Larisa Ortiz: How can we use the Laying the Groundwork Design Guidelines and how would they inform your work?
Deb Howard: I wish we had these guidelines twenty years ago! Our work at IMPACCT Brooklyn, then called Pratt Area Community Council, started in 1997 with developing five store fronts on two blocks of Fulton Street between Bedford and Classon Avenues, which had 41 vacancies at the time.
We worked with the local retailers to make their stores successful in this vicinity that didn’t have much commercial activity because of all the vacancies. Also at the time, the nearby Franklin Avenue shuttle train was in danger of shutting down. Then luckily it was saved and did become a very active station, which certainly helped the foot traffic for the storefronts in the neighborhood.
Over the next eight years IMPACCT provided see-through gates, new storefronts, signage and awnings for 11 additional retail spaces on Fulton through the New York City Department of Small Business Services’ storefront improvement grants and the New York State’s Main Street program, so the businesses could function properly and attract customers. Bed-Stuy has developed a lot since then but similar challenges still remain and we’re trying to convey the importance of design for energizing street life to other developers and retail tenants.
Larisa Ortiz: How might a business improvement district utilize these design guidelines and promoting them?
Matthew Bauer: We’re one of the groups that had the privilege of participating in the review process for the guidelines as part of the NYC BID Association's Zoning Working Group. What appealed to us was the fact that these guidelines addressed not only what was happening in the interior spaces, but also the exterior. We also appreciate the flexibility that they offer allowing for different sized spaces.
One of the biggest questions we get from retailers is, “Who’s going to be next to me, and how is that storefront next to me going to look?” When you have a national tenant and a local community tenant coming in next to each other, a comprehensive set of best practices that Laying the Groundwork offers would help them create an integrated system of design and a consistent look.
As a business improvement district, we need to get the word out to our constituents about the advantages of these guidelines.
Larisa Ortiz: Noel, you have incredible experience as a real estate consultant taking retailers around and looking at spaces - I'm sure you have many stories. What's your take on the design guidelines from a broker's and a retailer's perspective?
Noel Caban: I cover 85 markets and sub-markets within all five boroughs. I've dealt with hundreds of small businesses and national tenants over the years.
The national tenants come to the table with very specific proposals because they have something called a shell requirement, which in essence demarcates exactly what they're looking for, and if you don't fit those requirements, you don't have a deal. That’s kind of the way it works. Laying the Groundwork is a great tool set for new developments, and is equally important for the neighborhoods of Bedford-Stuyvesant with the existing stock that's out there. What does a typical landlord have to do to improve the visibility of her/his storefront? To realize the grate in the middle of a building is not helping anybody with stocking their shelves. Or a restaurant wants to be in a lovely corner space but there's no way to vent - What do we do? These are real things that I deal with day to day.
When there’s a set of guidelines that spells out - here's an approach, here's a series of ways to look at this - the local landlords are going to have to deal with the reality and spend some money to get it up to speed. If they want to improve the tenancy and improve the value of what they’re getting there. So I think the Laying the Groundwork Design Guidelines are wonderfully helpful.
Larisa Ortiz: We’ve talked about the guidelines’ emphasis being on new construction, but it seems a lot of the principles could certainly apply to existing buildings. Kara, do you have any thoughts or experience on that piece?
Kerry McLean: There's definitely a lot of applications for existing buildings. It’s about how to influence the property owners who have had their spaces a certain way for decades, to consider making some of the changes recommended in the guidelines.
There are very structural constraints that some property owners have in one of the commercial districts that I work in the Bronx. One of the spaces that has been vacant for a long time has only been vacant for two reasons. One - it's very big and raw. So you really have to have a lot of investment. As mentioned in the Laying the Groundwork Design Guidelines, it's important to include as much as you can in the base building, so that potential tenant doesn't have to make too much investment in order to get it up to speed.
The other constraint of this property that I've been telling you about is its low ceilings - another crucial topic addressed in the guidelines. When you think about putting in the HVAC, there's just not enough space for it to go.
Larisa Ortiz: Facade transparency is yet another success factor, and it’s an issue at many existing buildings. Especially in underserved neighborhoods, we have bodegas that have covered up their windows with lots of advertisements, which negatively affect the business.
Deb Howard: And you get the cacophony of signage in addition to that. Having a property owner who can set up clean, organized signage following the guidelines and be successful would help other retailers see that they don't have to be quite so garish in their signage. It’s also important to get a business improvement district on the street. That's where the help with the public spaces - bicycle racks, trees, benches - comes into play, because BIDs work on cleaning the street and recycling as well.
Larisa Ortiz: BIDs can help with the investment in the public realm that perhaps doesn't come through the building.
James and Hayes, is it more expensive to follow these guidelines and do better design? Do you get the return back because you are now able to rent the space?
James: The vast majority of the recommendations in the guidelines are cost neutral. One thing that did have an implication on the cost was raising the slab on the ground floor level. For that, there is the cost-estimate tool. When you're really looking at the dollars and cents, it is not that much more, and the benefit is so much more.
Hayes Slade: I agree with that. It was great the the Design Trust went forward with commissioning this cost-estimate tool that ARUP developed, because the main negative feedback that we got from developers was, “We can't build all these things because we just can't afford it." Enabling people to quickly evaluate those decisions through this tool addresses one side of the challenge. The other side is financing, because you're not getting money from the city to build out these spaces, you're piggybacking on the money you're getting through the residential project. Financing is an important component that is outside the scope of our design work but the NYC Department of Housing Preservation and Development is looking at it and developers are constantly thinking about it for sure.
Larisa Ortiz: Noel, did you have something add?
Noel Caban: When thinking of financing, we also have to look at the life cycle of a building over a 20 or 30 year period - and the attractiveness of the kind of rent that you can capture over time - versus if you want to sit with that property over the next eight months or longer while it keeps costing you money. The quality of your tenant also is impacted when you look at the property holistically - whether it has a HVAC system, a graded slab, etc. All these things are critical to getting "the deals done”, to getting to the other side, which is renting an asset and generating income out of that asset.
Kerry McLean: We do want to implement these guidelines, but we’re a non-profit developer and there are constraints when it comes down to cost. We want to get a restaurant at one of our developments and we're looking at building in venting now, so that we don't have to do it afterwards. But sometimes you don't have that choice. You just need to use the financing that you have to get your core, shell and everything else done, and then afterward you worry about the build-out. I don't want to underestimate the importance of financing early on, but sometimes it is what it is.
Noel Caban: I want to add that retail is about the energy of the street and the interfacing of transportation. You can't put your retail in the middle of nowhere and expect high numbers just because your cost factors are X and that's what we're going to have to charge. There's a push and pull here. Before a business owner even looks at your property, s/he's going to say, ”What kind of street is this? What kind of people are here? Who's going to feed my enterprise? How am I going to pay your rent?" Those are key considerations for a retail space that's going to sit there vacant for quite a while because somebody can't envision what kind of business will go there. You can build a beautiful space, but end of the day you've got to understand what makes great retail.
Larisa Ortiz: We're not here to discuss market demand, but that's a really important piece of the puzzle. Let me open up to the audience.
Audience member 1: A C-Town that is right by where I live and has been there for 20 years just recently took down all their ads. It improved the transparency to the back to the store, and I bet it has completely transformed their business. So I think it could help current retailers already in their space to know these principles.
Kerry McLean: That's a great point. In the Laying the Groundwork Design Guidelines there's a tenant lease checklist, so we do want to get these best practices out to actual retailers, in addition to developers and designers.
Audience member 2: In my neighborhood, we have the ongoing problem of community facilities remaining vacant for long periods of time. How do the design guidelines address community facilities?
Deb Howard: I do know that when we were doing Navy Green, which was a new construction, our original application had a daycare center, but over the course of the four years of negotiating and three years of planning, their funding was cut because our community area became no longer Community Development Block Grant (CDBG) eligible and the Human Resources Administration took away the vouchers. We had to take out the daycare centers from the project, because nine daycare centers were closed in Clinton Hill, Fort Greene, and western Bed Stuy after their vouchers were taken away. My point being - if you do put a community facility in your space, then they have to have operating budget and sources of income to be able to support that community facility, which might not always be the case.
James Slade: What is going to help retail spaces is also going to help community spaces. If you have high ceilings, if there's infrastructure for air conditioning, it will be easier to find other community groups to fill spaces that have been emptied. So in that regard, these guidelines work in the same way for community spaces as they do for retail spaces, because they have similar requirements.
Audience member 3: How do you think about the programming of retail, when you’re planning a building?
Noel Caban: In a 10,000, 15,000 square foot space, you're not going to have multiple restaurants, so you have to make a decision - one or two. The programing is driven by so many other factors besides how much space you have, of course. What kind of restaurant can the community afford? Is there a subway stop nearby that's feeding traffic up and down the street? If there’s a lot of people coming home from work, they may want certain things as they approach your building: Maybe they have to pick up groceries, maybe they have to pick up last minute something. If the community can afford a certain level of restaurant, maybe it's not a fast food spot, but a sit-down business. You have to look at the context of the neighborhood and the street.
Deb Howard: Do shopper surveys so you know that you are answering the community needs when you're thinking of programming.
James Slade: Time is another important factor in determining the type of retail programming. It might be difficult for people to commit to a specific program three years out when they don't know if there’s going to be another giant supermarket on the other block by the time the project is done. There's definitely this time limit, which also has to be evaluated, because the context does change, especially in these neighborhoods that are having a lot of building happening.
Kerry McLean: Time is indeed a factor for programming with city financed properties especially. For example, we're just now approaching closing for a site that was awarded to WHEDco in 2009. It’s important to have different iterations of possibilities planned for the retail space. A key part of being able to do that is understanding what the communities’ needs are.
We had planned for a school at our site, and the school was going much faster than the housing development piece so we had to take out the school and replaced it with a supermarket. But then a supermarket got built across the street with fresh incentives, so we had to take that out as well. In the end, we decided to break up the 20,000 square feet of retail into two, and we’ve been able to do that with a little bit less anxiety than normal, because we've kept abreast of how the community has been changing through market surveys.
Audience member 4: Do you see more awareness towards the ability to tackle cost and design efficiency, and tenant turnover, where you can have a modular structure that is plug-&-play-to-smooth-things-out because there are certain variables that you simply can’t foresee and have control over?
James Slade: There are a lot of modular projects in the city that are coming on recently. This trend is prevalent not just in New York, but around the world. Particularly in Asia, there's a lot of "container construction" where they're bringing in basically pre-fabricated modules and plugging them in. Technology in a lot of ways has enhanced this development, because both on the production and design sides you have the ability to make a holistic model of everything and then translate it directly into a computer-aided fabrication that helps expedite the process in the factories.
Larisa Ortiz: Are the Laying the Groundwork Design Guidelines compatible with modular techniques?
James Slade: The guideline standardization would work very well with modular systems, because the structure tends to be very regular in modular construction. Traditional developments tend to do a layout and then throw structure everywhere to fit the layout of the units. Then when it comes to the ground floor, you end up having to have big transfer beams or a random assortment of columns. When you build modular, you can't have that, it has to be regular, which makes the Design Trust’s guidelines easier to implement.
Hayes Slade: It would be misleading to say that it’s entirely a plug-&-play situation. All of this gets back to the initial point of our conversation today - the importance of designing with good practice and for flexible space. Obviously you have to understand the market in a very granular way, but with the requirement of time, for these are big projects and everything is moving in its own direction, coming up with a good, flexible underlying design mitigates some the of fear that you would have, because it could be an A or a B or a C, and that's ok.