Transforming brownfields into urban futures

Urban Places Group

Transforming brownfields into urban futures

Stantec’s Urban Places Group • Jeff Sauser, Associate, Senior Urban Designer • David Dixon, Senior Principal, Urban Places Group

Leader • Elias Rashmawi, Managing Senior Principal, Urban &

Brownfield Development

SunCal • Peter Johnson, Senior Vice President, Director of

Operations, Eastern Region • Brett Sherman, Vice President

Transforming brownfields into urban futures

1. The emerging role brownfields sites in urban transformations

2. Overcoming redevelopment challenges at brownfield sites

3. A developer’s perspective and case studies

4. Panel discussion and audience questions

Urban brownfields: “The hole in the donut”

Urban brownfields: “The hole in the donut”

Urban brownfields: “The hole in the donut”

Union Square

Once-in-a-generation opportunity to create lasting public value

Complex problems demand interdisciplinary solutions…

…and creative public-private partnerships

Planners play critical roles

• Identify and promote development opportunities

• Re-zone to unlock new value • Incent to enhance public benefit • Convene potential partners • Catalyze public-private

partnerships • Procure funding sources to cover

feasibility gaps • Negotiate in the public’s interest • Advocate for the under-

represented and disenfranchised • And more…

American Planning Association 2017 National Planning Conference May 8, 2017

Overcoming Redevelopment Challenges at Brownfield Sites

Elias Rashmawi Managing Senior Principal North America Brownfields Sector Leader

Resiliency

Sustainability

Brownfield Re-Use

Smart Cities, Growth, Communities & Streets ….

smart planning for our

Future

Montage of Deferred Dreams

Demystifying the

Unknown

Harnassing Value &

Transforming Assets

Today

1 Market Trend

2 Redevelopment Approach

3 Case Studies

Market Trend 1

P.H. Glatfelter Paper Mill Neenah, Wisconsin

Source: Emerging Trends in Real Estate, 2016

Improvement in All Business Lines

450,000 Brownfield Sites in the US alone

Brownfield is Infill VALUE

POINT

Engaged Sectors Manufacturing

Oil & Gas

Power & Energy

Pharmaceuticals

Technology

U.S. Department of Housing and Urban Development (HUD),U.S. Department of Transportation (DOT), and the U.S. Environmental Protection Agency (EPA) joined together to help communities nationwide improve access to affordable housing, increase transportation options, and lower transportation costs while protecting the environment.

VALUE

POINT

EPA Funding

Types of EPA Brownfield Funding

1. Assessment Grants 2. Cleanup Grants 3. Area-Wide Planning Grants 4. Revolving Loan Fund Grants 5. Job Training Grants

Redevelopment Approach

2

Buyer &

Seller

Context

• Market Demand • Regulatory Requirements • Public Agencies • Community

Investigation Risk

Assessment &Feasibility

Remedial Action

Plan Implement O&M

Due Diligence Land Use Conformity

Design (Vertical & Horizontal)

Construction Use

Risk & Value Progression

Selle

r Risk

Bu

yer V

alue

RAP Approval Certification

VALUE

POINT

Development Roadmap - Pg. 1

Development Roadmap - Pg. 2

Decommissioning Matrix

Critical Path Items:

Planning a. Market Analysis b. Land use & building massing/footprint c. Roads & Open Space d. Utilities e. Subterranean floors f. Zoning

Design a. Grading and transportation grid b. Foundation types and pad elevations c. Dry & wet utility distribution and approx. trench depth d. Stormwater scenarios (infiltration?) e. First floor on-grade or below-grade?

Critical Path Items Continued

Coordination a. RP remediation b. Municipal infrastructure c. Sustainability concepts d. Environmental approval e. Legal commitments

Funding a. P3 b. RP roles c. Phasing of vertical and horizontal improvements

Critical Path Items Continued

Regulatory a. Land use b. Cleanup goals c. Restrictions d. Environmental approvals e. Stormwater

Acquisition a. Which parcels b. Responsibilities assumed c. Due diligence

Key Regulatory Issues

• CERCLA & RCRA • Long term O&M • Inspections • 5 year reviews • Discovery of unknowns

post certification

Cleanup Goals

• Commercial • Industrial • Construction worker • Engineering controls • Institutional controls

Step 1

Site Feasibility Evaluate Market, Financial Proforma & Development/Entitlement Highest & Best Uses

Clean-Up Achieved

Development Required

Step 1.A Site-Specific Gap Analysis Model

Remediation Status

Due Diligence Data

Development Requirements

& Value

VALUE

POINT

$ Gap?

Step 2

Structure the Deal

Seller

Buyer

Future Owner

• Soil, groundwater & vapor goals

• Institutional engineering controls

• Operation & maintenance

• Unknown discoveries • Third party liability

$

Step 3

Program Phasing & Entitlement • Design & Contractor Teams • Remediation & Development Phasing • Zoning and Entitlement Entitlement Design Construction O&M

VALUE

POINT

Example Tool: Critical Issues Tracking Matrix

Critical Issue Pa

rcel

Phas

e W

hen

Trig

gere

d

Who

is

Resp

onsib

le

Whe

n is

Reso

lutio

n N

eede

d

Age

ncy

Ove

rsig

ht

Valu

e of

Im

pact

Impa

ct o

n In

fra o

r Ve

rtica

l

Risk

for P

roje

ct

Crit

ical

Pat

h

Reso

lved

Task

Mas

ter

Deed Restriction

Impacted Soil

Impacted GW

Vapor

UST

Operating Systems

Cap Cover

Clean Soil Cover

Waste Pit

Above Ground Features

Asbestos

PCB

Lead Paint

Product Lines

Other (?)

Quantifying value of each planning, design, and construction components relative to cleanup requirements is a must to evaluate risk & liability.

VALUE

POINT

Example Design Element: Foundation Types, Grading & Cut/Fill Analysis

T1 • Existing topography • Impacted with contamination

T2 • Remediation topography • Minimum required by regulators

T3 • Development topography • Conforms to regulatory & land use

VALUE

POINT

Architect’s Design Process: Impact on: Civil, Geotechnical, Environmental, MEP, LSA …

SD •Schematic Design •Determine fundamental elements

DD •Design Development •Finalize elements and conduct VE

CD •Construction Documents •Change is very costly - constructability

VALUE

POINT

Land Use Change Industrial Commercial Unrestricted 1 T1 Unchanged 2 T1 to T2 X% of site Y% of site Z% of site 3 T2 to T3 X% of site Y% of site Z% of site 4 T3 to other uses X% of site Y% of site Z% of site

Land Use Change Short Term Liability

Long Term Liability

Remediation Cost

Development Cost

O&M

1 T1 Unchanged

2 T1 to T2

3 T2 to T3

4 T3 to other uses

Condition Soil Groundwater Vapor Land Features Other 1 T1 Unchanged 2 T1 to T2 3 T2 to T3 4 T3 to other uses

Land Use Change Grading Open Space

Foundations Wet/Dry Utilities

Public Roads

Other

1 T1 Unchanged 2 T1 to T2 3 T2 to T3 4 T3 to other uses

Example Worksheets

Case Studies 3

Thank you

Elias Rashmawi Managing Senior Principal

North America Brownfields Sector Leader

555 Capitol Mall, Suite 650 Sacramento, California 95814

Office (916) 442-3230 I Direct (916) 669-5904

elias.rashmawi at stantec.com www.Stantec.com

Strictly confidential

May 8, 2017

SunCal APA Conference NYC

46

SunCal Overview

• Founded in the 1930s, SunCal is one of the largest privately-held real estate developers in the country

• Specialize in large-scale, complex projects with the potential to create long term value through pre-development, horizontal and/or vertical development

• Focus on a select number of high-value projects, taking a prudent approach to risk

• Integrated development management company with in-house entitlement, brownfield management, horizontal development and construction management capabilities

• Privately held company backed by a small number of investors with a focus on long term involvement

Who We Are

• Pre-Development

– Creating value through master-planning of the property, entitlement, remediation, site infrastructure and delivery of finished lots/pads to homebuilders

• Horizontal and Vertical Development

– Projects include residential, retail, office, hotel and other mixed-use components

– Particular strength in industrial re-use, brownfield cleanup, historic preservations, repurposing and sustainable development

What We Do

Founded: 1930 Offices: 8 Employees: >100 Invested Capital: > $1 Bn Acres Under > 21,000 Control: Homesites Under > 44,000 Control: Current Projects: 24

SUNCAL AT A GLANCE

47

• SunCal is focused on large-scale, complex and high margin transactions with two primary strategies

– Suburban development near major employment centers

– Urban redevelopment in select metropolitan areas

• SunCal works on a select number of high-value projects designed to achieve attractive risk-adjusted returns that create long term multiples of capital

– Land development is a relatively inefficient market with few large scale competitors creating the opportunities for outsize returns

• SunCal’s unique competitive strengths:

– In-house capabilities covering entitlement, and all aspects of horizontal and vertical development

– Historical track record of maximizing development entitlements, master planning, re-positionings and de-risking complicated projects outside the risk curve

– Extensive experience in complex military and defense site reuse, brownfield cleanup and site management

– Management continuity – senior executives have worked together an average of 14 years through various market cycles and has been led and managed by founding family for over 80 years

Development Strategy & Competitive Strengths

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Selected Project References

• In 1996, General Motors shut down its major assembly plant on the site after an 82-year run. For the next 17 years, the property sat in limbo and plans stalled. In January 2014, our company and Diversified Realty Advisers, LLC, formed a joint venture to launch a redevelopment plan for the site.

• Edge-On-Hudson is designed as a world-class master-planned community on the banks of the Hudson River, and, with an estimated cost in excess of $1Billion, is one of the largest projects in Westchester County.

• When completed, Edge-On-Hudson will feature 1,177 condominiums, townhomes and apartments; a 140-room boutique hotel; 135,000 square feet of retail space; and 35,000 square feet of office/loft space.

• Set within walking distance of two Metro-North train stations with direct access to Grand Central Terminal, the community will feature 24 acres of parks and gardens as well as a waterfront promenade winding along the river’s edge.

• Initial site construction is expected to begin in late 2015. Development will proceed in three phases, including the Loft District, with a modern-day vision for loft living derived from the site’s industrial heritage, the Central Park District, inspired by Hudson Valley architecture and set in natural landscaping with ample open space, and the Waterfront District, featuring contemporary residential buildings.

Edge-On-Hudson Location: Sleepy Hollow, New York Property Type: Mixed-use, transit-oriented, master-planned waterfront community Acreage: 65 Units: 1,177 Status: In development

49

Selected Project References Dublin Crossing Location: Dublin, California Property Type: Mixed-use, transit-oriented, master-planned community Acreage: 189 Units: 1,995 Status: Sold in 2015

• Representing the Army’s largest-ever Reserve Property Exchange Agreement, we worked with the U.S. Army Reserve at the Parks Reserve Forces Training Area to build Army facilities in exchange for 189 acres that will become a mixed-use, transit-oriented development.

• Constituting six major projects for the Army, including a medical training building, a 600-

person training center, a public works facility, maintenance facilities and various infrastructure improvements, as each phase is completed, our company is obtaining title to land designated for the Dublin Crossing master-planned community development.

• The approved plan envisions up to 1,995 housing units, significant parkland and

commercial uses. This will be a pedestrian-friendly neighborhood that creates new homes and businesses; and provides parks, trails and recreational amenities. Sitting near the interchange of two interstate highways and a BART light-rail station, Dublin Crossing will have various transportation benefits.

• In May 2015, the Army opened the first completed military project, the Access Control Point (ACP) on the west side of Camp Parks, which includes a new Main Gate and associated components. In exchange, our company received title to 20 acres representing the initial portion of the new community

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Selected Project References • This property is a former Naval Medical Center that was decommissioned in 1996 after

continuously serving military personnel since World War II.

• Our company conducted the demolition and cleanup of more than 100 former Navy buildings

throughout the site, including the implosion of the 11-story concrete and steel main hospital tower dating to 1968.

• We have held a series of successful workshops and worked closely with the City of Oakland to win public support as we shape the development vision.

• Extensive land planning and progressive community relations/public outreach have

yielded a comprehensive plan that will restore a creek, provide open space, allow homes on a prominent slope and offer a mix of residences, shops and restaurants.

• Besides new homes, the community will feature 72,000 square feet of commercial/retail uses; 76 acres of public parks and open space; over four miles of trails; and a new community center. New shaded walkways, cycling and running paths will flank the creek that will be restored to a natural state.

Oak Knoll Location: Oakland, California Property Type: Mixed-use, master-planned community Acreage: 187 Units: 935 Status: In entitlement process

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Selected Project References • Occupying 24 acres in the historic Charlestown section of Boston, the Bunker Hill Apartments

is the largest public housing project in the Boston Housing Authority’s portfolio

• SunCal and its local partner, Corcoran-Jennison Associates, were designated by the BHA as the team responsible for the redevelopment of the site on September 29, 2015

• Encompassing the demolition of more than 45 buildings, removal of all existing infrastructure and streets, remediation and abatement of soils and hazmat materials and the replacement of all 1,100 affordable units with 3,200 units of mixed-income housing, the Charlestown project is the largest urban in-fill redevelopment in the country

• Working with a stakeholders group that includes the Boston Housing Authority, the Boston Redevelopment Authority, Federal Department of Housing and Urban Development, the Boston City Council, the Charlestown neighborhood council and various other interested parties, SunCal is expecting entitlement and zoning approval in Spring 2017.

• Similar to other projects SunCal has worked on, the Charlestown project will utilize city, state and federal financing incentives to support the remediation and redevelopment of the site

Charlestown, Boston Location: Boston, MA Property Type: Mixed-use, master-planned community Acreage: 24 Units: 3,200 Status: In entitlement process

Thank you!

STANTEC’S URBAN PLACES GROUP Jeff Sauser Associate, Senior Urban Designer jeff.sauser@stantec.com | (404) 583-8735 David Dixon Senior Principal, Urban Places Group Leader david.dixon@stantec.com | (617) 416-7217 Elias Rashmawi Managing Senior Principal, Urban & Brownfield Development elias.rashmawi@stantec.com | (916) 669-5904 SUNCAL Peter Johnson Senior Vice President, Director of Operations, Eastern Region PJohnson@argentmanagementllc.com Brett Sherman Vice President bsherman@suncal.com