the dawson company urban residential ... - pensacola, florida
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The Dawson Company
Urban Residential and Public-Private
Partnership for Community Development
Presented to the City of Pensacola, FL July 23, 2012
For more information, contact:
Harold Dawson, Jr., CEO hdjr@thedawsoncompany.com
404.347.8030
191 Peachtree Street NE
Suite 805
Atlanta, Georgia 30303
www.thedawsoncompany.com
2
Community Development is NOT about Real Estate
It is first and foremost about empowering people
to create a sustainable and inclusive community.
The Dawson Company’s approach to effective
community development that employs an integrated
two-pronged approach combining
a STRATEGIC VISION with
TACTICAL INITIATIVES.
Community Development Philosophy
3
• Overview of The Dawson Company and
Approach to Community Development
• Aspects of a Strategic Vision
• Initial Assessment of Pensacola
• Review of Housing Economics
• Potential Tactical Initiatives for Transformative Real Estate Developments
• Summary and Discussion
Table of Contents
4
OVERVIEW OF THE DAWSON COMPANY AND
APPROACH TO COMMUNITY DEVELOPMENT
5
● The Dawson Company, founded in 1969 by Harold Dawson, Sr., is a second
generation African-American real estate firm with a legacy in affordable housing
development and real estate advisory services.
● Industry leader in sustainable, mixed-use, transit oriented development and
public-private community development.
Development can be transformative and bring about generational change.
● The Dawson Company builds workforce and affordable housing developments
as well as large scale, catalytic, mixed-use community developments that are
typically collaborations between public sector and private market partners
Large-scale projects typically involve multiple stakeholders including government
agencies, community stakeholders, and other public/private partners.
● Dawson offers public sector clients with a set of services that compliments our
private market practices to assist them in realizing tangible results
Dawson Company Overview
6
Dawson Company Overview
Harold A. Dawson, Jr President & CEO
• Joined Dawson in 1992
• Leads the development team
• Specializes in structured finance
Jerome Hagley Executive Vice President and
COO
• Joined Dawson in 1992
• Responsible for overseeing the
Company’s operations
Professional and Educational Highlights
• 22+ years of real estate investment, and
development experience
• BA, Princeton University
• MBA, Harvard Business School
Professional and Educational Highlights
• 20+ years of real estate development and
management experience
• BS, Spring Hill College
• Masters in Public Accountancy, Georgia State
University
7
Dawson Company Overview
Bailey Pope, AIA, LEED
Green Associate Senior Vice President Design &
Sustainability
• Joined Dawson in 1999
• Responsible for design, and
regulatory compliance
Professional and Educational Highlights
• 20+ years of architectural experience
• BA, Princeton University
• Masters in Architecture, Georgia Institute of
Technology
Roderick W. Teachey Senior Vice President of
Development
• Responsible for oversight and
execution of all development
activities including due-diligence,
pre-construction planning,
construction oversight, and post
construction sales and leasing
activities.
Professional and Educational Highlights
• 20 years of diversified real estate experience
including institutional asset management, lending
and underwriting and development.
• BS in Finance, The Wharton School of Business
at the University of Pennsylvania
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Approach To Community Development
● The Dawson Company’s approach Public-Private Partnerships for development
transcends basic real estate (design, finance, bricks and mortar) in following ways:
Emanates from and embodies a public policy purpose
Has a desired outcome that addresses a public need to satisfy a deficiency
Is catalytic by nature in creating sustainable multipliers for organic growth
The bottom line is that it is bigger than just a real estate deal
● Public-private partnerships for community development generally seek to unite public
policy and free market economics
Public and private sector assets are combined to change the trajectory of a community, city,
state, or even country
Public agencies provide the initial catalyst to jump-start the free-market engine that
ultimately sustains itself in a transformed community
● The City of Pensacola can leverage the model that has been set with the planning
process and ultimate implementation of the Downtown Retail Strategy
Comprehensive, fully-integrated executable business plan
Not another “study” but executable business plan with action items, schedule, critical path,
milestones with accountability, metrics, benchmarking to measure success and compare to
best-practices
The Dawson Company’s Development Philosophy
9
• A major mixed-use urban development
in partnership with Carter Real Estate
located in Cincinnati, Ohio
• 18 acres (eight city blocks) of prime
waterfront property along the Ohio River
• $700 million projected development
costs
• 2.8 million square feet of new mixed-use
development at full build out
• Phase IA was completed in Spring 2011
• This project was stalled for over 10
years until Dawson was able to bring the
City, County, and various stakeholders
together to move the deal forward
The Banks Mixed-Use Development
Approach To Community Development
10
Lindbergh City Center TOD Development
• A major mixed-use transit oriented
development in partnership with
Carter Real Estate located in Atlanta,
Georgia
• Dawson worked with the City of
Atlanta and Metropolitan Atlanta Rapid
Transit Authority (MARTA) to create
the first transit-authority sponsored
TOD in the United States, based
around MARTA’s Lindbergh Transit
Station in Atlanta
• Once completed, will include 1.2 MM
sf of office space for AT&T, 200 K sf of
retail space, 300 K sf of multi-tenant
office space, a hotel and 2 K
residential units
• Dawson developed 700 residential
units as part of the $500 M deal
Approach To Community Development
11
Centerpoint Mixed Use Development
• Dawson worked with the City of Baltimore’s Baltimore Development Corporation and Bank of America Community Development Corporation to develop a $104 million mixed use development that encompasses an entire city block on Baltimore's Westside
Lexington Square Mixed Use Development
• Dawson’s second landmark development as part of the major West Side redevelopment initiative sponsored by the City of Baltimore
• A proposed mixed use development project which includes up to 1 MM SF of construction and over $150 MM in total development cost
Centerpoint
Lexington Square
Baltimore’s Historic West Side Developments
Approach To Community Development
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ASPECTS OF A STRATEGIC VISION
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Moving the Needle and Changing the Trajectory
Fully integrated, comprehensive, executable business plan
Rebranding and Messaging –
Promoting Assets and Mitigating Liabilities
Selecting Your Audiences
Establish public policy goals
Property Tax Base Smart/Balanced Growth
Workforce Housing Stock Public Education
Unemployment Rate by Segments of Population
Sustainable and equitable economic expansion
for all residents vs. gentrification for the few
Identify and Create the Economic Anchors
Plan for Economic Sustainability
Aspects of a Strategic Vision
Strategic Initiatives
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● Leverage Assets
University of West Florida Global Learning Academy
Port of Pensacola US Naval Air Station Pensacola
Industry Cities to Create Critical Mass, Economies, Synergy
Pensacola Downtown Technology Campus
Medical Technology and Services
Environmental Technology and Green Industry
Identify and utilize existing economic development tools
Create new economic development tools, including enacting
corresponding enabling legislation and regulations
Establish and strengthen relationships with state and federal government
through delegations and direct alliances with departments
Aspects of a Strategic Vision
Strategic Initiatives - continued
15
Establish and strengthen relationships with private markets
Create multi-dimensional dashboard to facilitate accountability, establish
metrics and benchmarking, coordinate resource allocation, track costs
Exploit the interrelation and integration of initiatives
Exploit the integration and interrelation of the entities
CRA, DIB, Pensacola Bay Area Chamber, Escambia County,
Pensacola-Escambia Promotion and Development Commission,
Community Maritime Park Authority, etc.
Create an environment of inclusion
Create consistent internal and external messaging
Implement an Economic Inclusion Policy
M/WBE Participation to build capacity and wealth
Workforce development programs to build skills
Inclusionary Housing Policy to promote equity
Aspects of a Strategic Vision
Strategic Initiatives - continued
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INITIAL ASSESSMENT OF CITY OF PENSACOLA
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Initial Assessment Of Pensacola
ATTRIBUTES
OBJECTIVES
Assets: Natural/Environmental
Historic
Military
Educational
Civic
Cultural
Public Infrastructure
Looking specifically at development to address housing shortage:
● Create a cohesive executable plan to stimulate stalled development initiatives
● Address real economic and perceived social disparity amongst racial lines
● Address the shortage of affordable and workforce housing
Liabilities: Low Quality of Education
Lack of Economic Anchor
Socio-Economic Disparities
Demographics
Racial Inequity
Generally Lower Median Income
Coastal City with vibrant tourism, burgeoning downtown, Maritime Park,
University of West Florida, Naval Base
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Initial Assessment Of Pensacola
FOUNDATION
CHALLENGES
Initiatives that have worked or are working:
● Downtown Retail Strategy
● Downtown Improvement Board
● Downtown Parking Management Strategy/District
● CRA’s Comprehensive Plan for the Waterfront
● Bayfront Parkway
● Community Maritime Park
Initiatives that need to be re-energized or need initialization:
● Community Maritime Park
● Port Administration (mixed-use development – commercial and industrial)
● Bruce Beach
● Escambia County Utilities Authority Site
● Sanders Beach/Corrine Jones Community Center
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Initial Assessment Of Pensacola
GOALS
CHALLENGES
Initiatives that have worked or are working:
● Downtown Retail Strategy
● Downtown Improvement Board
● Downtown Parking Management Strategy/District
● CRA’s Comprehensive Plan for the Waterfront
● Bayfront Parkway
● Port Administration (mixed-use development – commercial and industrial)
● Community Maritime Park
Initiatives that need to be re-energized or need initialization:
● Community Maritime Park
● Bruce Beach
● Escambia County Utilities Authority Site
● Sanders Beach/Corrine Jones Community Center
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REVIEW OF HOUSING ECONOMICS
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Capital Seeks Investments that Are:
Already Entitled
Shovel Ready
Primary Cities
Low Hanging Fruit
Minimal Complexity
Substantial Public Subsidy
Housing Economics
Capital Markets Basic Realities
Capital Tends to Avoid Investments with:
At Risk Development
Mixed-Use Programs
Tertiary Markets
Public Private Partnerships
36-60 Month Project Schedules
Capital Market Drivers for Housing Investment:
Subsidized Affordable and Workforce Housing
Student housing with credit/balance sheet enhancement from institution
Age restricted and assisted-living high-income housing supported by
Baby-Boomer demographics
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Housing Economics
Pensacola, FL Area Median Income $55,607 Annual Income Required Return on Cost Range: 5% - 10%
$4,634 Monthly Income (Market and Product Driven)
$1,390 Amount Available for Rent Pensacola = 7.0%
LOW-DENSITY SINGLE FAMILY Land Cost $20,000
Single-Story Block or Wood Frame Hard Cost $107,250 Amount Per Month $4,918 Monthly Rental Amount $284
Avg. Unit Size (SF) 1,400 Soft Cost $61,813 Annual Income $59,011 Cost Subsidy Per Unit $25,000
Project Size (# of Units) 12 Total Cost Per Unit $189,063
Density (Units Per Acre) 8
Monthly Mrtg. Payment $1,475
Garden-Style Apartments Land Cost $8,000
2-3 Story Wood Frame; No Elevators;
Surface Parking Hard Cost $98,500 Amount Per Month $4,255 Monthly Rental Amount $0
Avg. Unit Size (SF) 900 Soft Cost $26,625 Annual Income $51,063 Cost Subsidy Per Unit $0
Project Size (# of Units) 220 Total Cost Per Unit $133,125
Density (Units Per Acre) 45
Req'd Rent Per Month $1,277
Mid-Rise Apartments Land Cost $12,000
4-5 Story Wood Frame; Elevators Hard Cost $147,500 Amount Per Month $5,543 Monthly Rental Amount $273
Parking Deck Soft Cost $39,875 Annual Income $66,521 Cost Subsidy Per Unit $46,774
Avg. Unit Size (SF) 900 Total Cost Per Unit $199,375
Project Size (# of Units) 250
Density (Units Per Acre) 80 Req'd Rent Per Month $1,663
High-Rise Apartments Land Cost $20,000
15+n Stories Concrete Structure with Elevators Hard Cost $226,000 Amount Per Month $7,646 Monthly Rental Amount $904
Avg. Unit Size (SF) 850 Soft Cost $61,500 Annual Income $91,750 Cost Subsidy Per Unit $154,899
Project Size (# of Units) 300 Total Cost Per Unit $307,500
Density (Units Per Acre) 300
Req'd Rent Per Month $2,294
TOTAL COST PER UNITOPTION REQ'D INCOME REQ'D SUBSIDY
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Housing Economics
POTENTIAL SUBSIDY SOURCES
• Section 8 /Housing Choice Vouchers
• CDBG Funds/ Neighborhood Stabilization Program (NSP)
• Low-Income Housing Tax Credits
• Tax-Exempt Bonds
• PILOT/Enterprise Zone (RE Tax Exemption)
• Tax Allocation Districts (TAD)/ Tax Increment Financing (TIF)
• Ground Lease Structure
• Land Bank Authority
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POTENTIAL TACTICAL INITIATIVES for
TRANSFORMATIVE REAL ESTATE DEVELOPMENT
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• Lindmont Apartments • Dawson acquired and redeveloped a low income, low rent,
racially diverse 1940’s era apartment complex in Atlanta,
demolished it and redeveloped the entire site
• Handled relocation of current residents and provided
mortgage and financial literacy assistance
• NO NEGATIVE PRESS
• Cincinnati “The Banks” • Brought County, City and Community parties together to
move decade long stalled project forward
• Worked with local African American religious leadership
and NAACP who represented historically extended
communities
• Currently developing Phase 1 of a 2.8MM SF mixed-use
development
• Baltimore Centerpoint • Worked with Baltimore Community Development
Corporation in an effort to revitalize the area
• Redevelopment of an entire city block which became the
catalyst for larger redevelopment
• Worked with Historic Preservationists and local community
leaders
• Asked by Governor (then Mayor) O’Malley to join the team
for the Lexington Square development
Community Development Highlights
Transformative Real Estate Development
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● Dawson has a legacy of affordable housing developed using 80/20 Low Income Housing Bonds
Uptown Square - a 364 unit mixed use development financed using tax-exempt bonds
Northside Plaza - a 167 unit mixed use development financed using tax exempt bonds and tax credits
City Plaza Apartments - a 127 unit mixed use development financed using tax exempt bonds and tax credits
Affordable Housing Developments
Transformative Real Estate Development
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• Recently engaged by the largest
telecom company in the Kingdom of
Saudi Arabia to provide professional
real estate consulting services on over
1500 real state assets
• Assignment included:
• Advise client on how to capture
value of underutilized real estate
• Inspect, perform valuations on, and
document all real estate assets
• Phase II Assignment (pending)
• Assist in implementing business
strategy involving leasing, selling,
refinancing and developing real
estate assets
• Implementation of the
recommendations derived from the
business planning assignment
Transformative Real Estate Development
Saudi Telecom Company (Kingdom of Saudi Arabia)
28
Potential Tactical Initiatives
GOAL ORIENTED IMPLEMENTATION
● Internal and external messaging through visible and immediate action
● Create an executable action plan around immediate goals of affordable,
work-force and mixed income housing
● Indentify land assets controlled by public entities conducive and
appropriate for housing and potentially other uses
● Formal business plan on each major asset where public entity has control
with strategic prioritization
● Create a land bank and repository with the corresponding economic
analysis on each parcel
● Financially model the contemplated transactions utilizing private sector
input
Tactical Initiatives address immediate needs, like
picking the low hanging fruit, but also create the
environment to achieve strategic objectives.
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Potential Tactical Initiatives
GOAL ORIENTED IMPLEMENTATION - continued
● Identify the subsidy needed and create a solution set (know the answer
before asking the developers)
Tax Increment Financing New Market Tax Credits
Low-income Housing Tax Credits Tax-exempt Bond Financing
P3 Infrastructure Financing EB5 Financing
Federal Grants Enterprise Zones (Property Taxes)
● Pre-market the story to the capital markets and court institutional investors
● Create solicitations
RFEI and informational sessions to screen developers
Issue RFP’s to pre-screened developers
● Utilize unsubordinated participating ground leases to facilitate affordability
and mitigate embarrassing windfall profit to developer
● Determine credit solutions in public, private, corporate and institutional
markets…don’t rely solely on the developer
● Once selected create “partnership” with developer to ensure success
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SUMMARY AND DISCUSSION
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Summary And Discussion
SUMMARY
DISCUSSION
• Strategic Business Plan for Community Development
• Economic Development and Community Engagement
• Tactical Approach to Identifying Catalytic Initiatives
• Promotion of Successes and Community Assets
• Questions and Answers
• Next Steps
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