San Diego needs to stop saying ‘Now is not the time’

San Diego needs to stop saying ‘Now is not the time’

By: Mary Lydon and Tony Pauker

San Diego seems always faced with a number of major civic and civic related development plans. The Civic Center, the Embarcadero, Federal Courthouse, an expanded Convention Center, an airport, a main library, Lane Field, Navy Broadway and a Chargers stadium. Unfortunately, historically, we are our own worst enemy.

We appear uniquely qualified at expending copious amounts of energy fighting for what we believe is the cheapest near-term solution.

For example, the fight to charge a fee for trash service is upheld as a right San Diegans based upon a near century old practice of selling garbage to hog farmers. In 1919 it was discovered that the company that was charging to pick up trash was also being paid by hog farmers in Los Angeles who used the trash for feed. We still don’t charge trash pick up fees and it costs the city of San Diego over $50 million a year to provide this service. That would feed a lot of hogs.

In the past few months San Francisco has enacted one of the strictest recycling efforts in the nation with a goal of zero waste by 2020. They currently recover 72 percent of materials they discard but to reach their goal of zero waste, other measures will need to be put into place. This includes passing legislation to increase producer and consumer responsibility. Manufacturers, businesses and individuals will need to be accountable for the environmental impact of the products they produce and use. Some would argue this is what a bunch of NorCal do-gooders feel is important to mother earth (which it is), where others would argue that landfills are an expensive way to utilize precious land resources and base their argument on strictly economics.

The point is San Francisco has a waste vision for its future and they are willing to pay for it whereas San Diego never seems willing to invest in its future for anything.

Unfortunately, the same ostrich mentality seems to pervade current discussions of civic and public projects here in San Diego. A well-designed civic building should have a useful life of 100 years yet our planning horizons tend to be a four-year elected term or a five-year lease. Short-term planning makes long-term visions and decisions impossible.

While it is true that the current economic climate may make any development planning seem economically disadvantageous, it is extremely shortsighted.

Given public scrutiny and large-scale development projects — public or private — realistically what is proposed today would be lucky to be complete in 2015.

But what is the role of a civic place? One role is to office required governmental functions — such as a courthouse, book storage or municipal workers. Another role is to provide places for public gatherings and to create civic pride. Every great city is defined by their civic buildings and public spaces — both available and not available to the public. From the Sydney Opera house, Las Ramblas in Barcelona, the Spanish Steps in Rome, Rockefeller Center in New York, the Ferry Building in San Francisco to the scores of places in small towns in between; all bring great identity and civic pride to their cities. San Diego has one — Balboa Park.

Putting the park aside we really have nothing our region can look to for civic pride. Our downtown is defined by a few office towers and a plethora of condo towers but even collectively they do not define the heart of our region.

In and around downtown we have many new proposed civic candidates. Unfortunately our city and state’s dismal financial crisis makes it tempting to say “now is not the time” as if that makes life better. It will not — it only prolongs our status as a third tier city related to civic buildings. Facilities for required civic uses will still continue to be inadequate and it will not get any easier to address these same issues when our financial house is in order.

This is not to say that we can do everything. Some projects should be pursued as in the long run they make fiscal sense and could be iconic images of our region. Some can provide much needed civic space, and others are simply inappropriate now or in the future due to a changing world. The issue is that cheaper is not always better. Massive amounts of time and effort have been devoted to each proposed civic project listed above. The current downturn should not be the impetus to throw out planning and start anew when our conservative economic vision seems brighter — there will always be another boom and another downturn. But rather, we should support the ongoing process and act — to build or not build — now.

[space]Community is a place “to build trusting relationships, to achieve consensus around values, to collaborate toward the realization of collective goals” says Michael Gurstein. Gurstein is a PhD in Social Science from Cambridge University. Gurstein works to enable and empower communities through the use of information and communications technology. A foundational role of cities is facilitating human contact: to meet, to imagine, to present, to ponder, to govern, to decide, to help, to build. Community equals identity, trust, justice, and civic pride. Civic buildings and public places have the opportunity to create community, trust and pride. San Diego seems abhorrent to look to our future civic buildings and public places. What does that say about how San Diegans value community, trust and civic pride?

 

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Implementing sustainable development in the community

Implementing sustainable development in the community

By: Mary Lydon and Tony Pauker

Sustainable development practices are becoming the norm for local jurisdictions. Citizens and community leaders are calling on public policy makers to develop and implement programs and initiatives that conserve energy, reduce carbon emissions and protect natural resources, all while balancing economic and social opportunities.

Unfortunately, the desire to implement these efforts has outpaced our ability to develop standard practices, codes and a common set of accepted practices.

The Urban Land Institute San Diego/Tijuana District Council, the leading land use organization for real estate issues in our region, has partnered with the ULI Daniel Rose Center for Public Leadership in Land Use, which seeks to encourage and support excellence in land use decision making. The Rose Center helps provide public officials with access to information, best practices, peer networks and other resources. ULI and the Rose Center will be hosting a public policy workshop entitled, “Implementing Sustainable Development in Your Community — A Workshop for Local Public Officials.” The two-day workshop will be held on May 19-20 at the New School of Architecture and Design in downtown San Diego.

The workshop will provide tools and strategies for local public officials to help them understand, implement and leverage more sustainable development practices in their communities. The workshop includes definitions, measurements, case studies and group exercises that focus on best practices and the most effective role that public officials can play in creating more sustainable communities while enhancing constituents’ quality of life. Probably more importantly, ULI, as a real estate organization with both public and private sector members is well equipped to help define strategies that have real-world, business friendly approaches.

During the workshop attendees will learn new trends in sustainability programs and policies; emerging tools and best practices for sustainable development; lessons from successful programs for setting goals and measuring what matters; how private sector sustainable development can create public economic benefits; models for public/private leadership and collaboration; and barriers to sustainable development practices and ways to overcome them. Of greatest importance is likely the real world and private sector experiences that can be shared with our public sector partners.

The workshop will be taught by Charlie Long, principal with Berkeley-based Charles A. Long Properties LLC and will feature a wide range of distinguished panelists, including Carolina Gregor, SANDAG; John DeWald, John DeWald & Associates; Marisa Lundstedt, city of Chula Vista; and Devon Muto and Jeff Murphy, county of San Diego, just to name a few. The panelists will provide case-study examples of sustainable development in the region.

Locally, tremendous efforts are under way to protect and improve the important aspects of this region. The city of San Diego has a number of sustainable initiatives already in practice, including a recently announced and ambitious solar roof plan that will help residents finance solar panels on new and existing homes. In early 2008, the San Diego City Council unanimously approved a comprehensive update to the city’s General Plan.

The plan sets out a long-range vision and policy framework for how the city should plan for projected growth and development, provide public services and maintain the qualities that define San Diego over the next 20 to 30 years. It represents a shift in focus from how to develop vacant land to how to design infill development and reinvest in existing communities.

Register online at ulisd.org.

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When we awoke, everything was green

When we awoke, everything was green

By: Mary Lydon and Tony Pauker

Like it or not, our real estate market is taking a pause. While the lack of liquidity and fear has frozen much financial activity, it should not freeze thought and planning. When we emerge from this downturn it will be much like Snow White who awakened after 100 years to find a much changed world. No projects passing through development services these days will be immune from smart growth, sustainable and green components. Simultaneously the market is demanding it.

When we wake up from the big sleep, San Diego will largely not be a city with growth patterns familiar to those in the development and planning business over the past 30 years. It may look more like San Diego pre-1940 or downtown of the post-2000 period. That means more compact development, more walkable communities, and a mix of land uses in closer proximity to each other and public transit. This is a function of limited greenfield land as well as a shifting demographic demanding different types and forms of land use and development.

We have another new wrinkle, the “green” movement. To some this means overregulation, to others it means critical changes we must make in how we use energy, water and other resources. It does not matter where your personal beliefs are, the fact is that the younger your target audience is the more it will demand “green,” and we will find many more governmental mandates for being green as well.

As we are taking a pause, it is an opportune time to evaluate what sustainable design and smart growth mean. For five years the San Diego/Tijuana Urban Land Institute (ULI) has been conducting a Smart Growth Awards program that is designed to showcase to the public at large great examples of just that. Clearly the past 12 months have not been a robust time for significant amounts of new development, but many examples of smart growth may, in fact, be older concepts. Anyone is invited to submit a nomination by simply filling out the online form at ulisd.org.

This year ULI will be partnering with the San Diego Architectural Foundation (SDAF) and the San Diego Chapter of U.S. Green Building Council (USGBC).

The SDAF will present a single award called the Community Vision Award (CVA) which comes with a $25,000 beautification grant to the community in which the project is recognized in. The intent of the program is to encourage the construction of projects that will serve as examples for future urbanization throughout the region. Hamilton Row, a 16-unit row house project in North Park, won the first community vision award in 2008. The award is underwritten by the county government to encourage well-designed infill projects that neighborhoods support. To nominate your community for a CVA go to sdarchitecture.org.

The San Diego Chapter of the U.S. Green Building Council will be coordinating a Green Expo to showcase new and emerging green building technology at the event.

Past ULI Smart Growth Award recipients celebrated by ULI include Market Creek Plaza, a mixed income, mixed use community located in southeast San Diego. Market Creek proved that established urban neighborhoods were viable retail locations. The Sprinter line won an award for efforts to connect the Highway 78 corridor with the Coaster for efficient rail transit. The Coastal Training Program at the Tijuana River National Estuarine Research Reserve, received an award for a program that influenced decision makers by providing alternative solutions to address the environmental degradation caused from excess accumulation of sediment and erosion pollutants that flow into the Tijuana River Estuary.

In 2008 Hines’ new Platinum LEED Certified office building, the La Jolla Commons in UTC was awarded a smart growth award for Hines’ commitment to LEED design principals (which coincidently reduced Common Area Maintenance costs). A more unusual award was given to the Tierra Miguel Organic Farm and Education Center in 2007 for providing an example of how organic, sustainable, cooperative farming can serve a nearby metropolis. Since then this has become the hallmark of many emerging new restaurants in San Diego. The Update to the General Plan for the city of San Diego was awarded for incorporating the City of Villages strategy. The City of Villages strategy is to focus growth into mixed-use villages that are pedestrian-friendly districts of different scales, linked to the transit system. A “village” is a place where a mix of residential, commercial, employment and civic uses are present and integrated.

The Smart Growth Awards will take place this year on May 14 at Wonderhaus located at 14th and L in downtown San Diego — a great example of an adaptive reuse building. The event begins at 5:30 p.m. Anyone who plans on taking advantage of the real estate upswing cannot afford to sleep through this event where you’ll see first-hand examples of how the future of San Diego will be built.

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Connecting entrepreneurialism to a clean energy stimulus grid

Connecting entrepreneurialism to a clean energy stimulus grid

By: Mary Lydon and Tony Pauker

In times like these job loss is a major concern. However the pink slip can catalyze creative impulses. Steve Williams of SENTRE Partners, a successful real estate investment and services firm, used his pink slip in the early 1990s to start his own business and now is inspiring others to follow his lead. San Diego has a great history of entrepreneurialism and currently leads in industry sectors for biotechnology, communications and software development.

It may be trite to say, but these are actually the times of great opportunity — if we can look beyond the crisis immediately at hand. Hopefully, we’re starting to emerge from the shocking initiation of the end of the old and will poise ourselves for the new. Since San Diego has entrepreneurialism running through its veins, we are uniquely positioned to take advantage of the new economy we are being called to create. We certainly do have a track record of this. The downturn of the early 1990s and “peace dividend” yielded a huge proliferation of new technology companies in our region.

Policy and economic stimulus alone will not lead us out of our troubled economic waters. We again need innovation and the ability to move quickly, the core of entrepreneurialism, to move us back to sustainability and prosperity.

At a recent gathering of the Center for American Progress, former President Bill Clinton, former Vice President Al Gore, Lee Scott of Wal-Mart, Carl Pope of Sierra Club, Robert Kennedy and other big thinkers, rolled out an action plan call Wired for Progress, which is a vision that if executed properly, can create many new jobs and put us in control of our own sustainable energy supply. The Center for American Progress is a think tank dedicated to improving the lives of Americans through ideas and action inspired by the likes of Teddy Roosevelt, FDR, JFK and Martin Luther King.

The Wired for Progress Action Plan calls for a national clean-energy smart grid that has an interstate sustainable transmission grid to transport clean utility-scale renewable energy long distances to market and a digital smart distribution grid to deliver this electricity efficiently to local consumers. The absence of a national grid that seamlessly integrates these two components is one of the biggest impediments to large-scale deployment of low-carbon electricity. No matter on how you may personally feel about this, it s clear that energy is the growth industry of the next decade. With our universities and the creative class infrastructure we have, San Diego should be a leader, not a follower, in this direction.

We will need scores of scientists, planners, engineers, planners, economic analysts, developers, software developers, workforce training to build and maintain grid, investors, land brokers, architects and more.

San Diego should create a coalition to prepare to take advantage of this emerging clean energy grid initiative. We saw how quickly we were able to pull together as a region to develop the “ready to go” infrastructure project list. But there is a greater advantage for San Diego to participate in the clean energy stimulus grid. It creates sustainable, high-paying jobs that last well into the future. This opportunity was created for San Diego’s unique skill set.

Carpe Diem.

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The real looming housing crisis

The real looming housing crisis

By: Mary Lydon and Tony Pauker

We face one of the most significant housing crises this region has seen in the last half century. No, it is not the wave of foreclosures that are sweeping across our country and San Diego County. It is what will come after the foreclosure wave.

The current foreclosure epidemic is better characterized as a systemic re-pricing, actually right-pricing, of our for- sale housing stock. As we emerged from the recession of the early 1990s, housing in the San Diego Metropolitan Statistical Area was affordably priced. The cost of housing to the end consumer was not a burden to our economic growth. At that time the challenge of job creation and shifting from a military economy to a creative class was our biggest challenge.

By 2001, two things happened. First, the housing market entered a cyclic, but not astonishing, increase in value. Second, the impact on the national and world economy post-9/11 forced the Fed into lowering interest rates to levels unheard of in our lifetimes. Housing was the engine to avert a terrorist-induced prolonged recession. Unfortunately, the stimulus turned into a financial orgy of low interest, even lower oversight, and the lowest levels of accountability.

The result was believing that 25 percent annual appreciation rates for housing, and affordability levels where less than 5 percent of the population could afford the median home price was sustainable. This was simply a fantasy many fold greater than even Bernard Madoff’s Ponzi scheme.

The hand wringing over our current foreclosure “crisis” is a misguided diversion from the real issue. True, there are stories of great sadness. People losing their homes and equity, declaring bankruptcy and the impact on our economy is extremely painful. However, it was entirely predictable.

But there is a silver lining. Affordability in the region is up from the low single digits to in excess of 35 percent — still well below where it needs to be but affordability is no longer a drag to our economy. A household of average income can actually afford to buy a home within San Diego city limits rather than making the 60-90 mile commute into southwest Riverside. Credit may be tight this quarter but mortgages will become available, if for no other reason than banks will want to make money in 2009.

Looking at the sale of foreclosed homes, virtually every buyer is an owner or occupant — they are Mom, Dad, Billy and Jane, their dog Max and cat Snowflake. Concepts of “stabilization” and “foreclosure moratoria” are simply dragging out the inevitable. They would simply be the water boarding of the housing market. To pretend a family earning the median income of $72,100 can afford a $550,000 home with 3 percent down is a fantasy. Keeping them in that home is torture. Provided we do not drag our feet on this, we should be able to get through this foreclosure debacle by the middle of 2010 and move on.

So if my premise that the real housing crisis is not foreclosures, where is the real crisis? It begins in 2011, and we will then enter a challenging and prolonged period when affordability is our biggest bugaboo. Local employers will be unable to attract the best and brightest, and the young rising stars graduating from our local universities will look to other areas to live. Our society will further divide into the lower-paid service workers and the highly- compensated creative class. Our scant middle-income industrial base will be nothing more than a distant memory.

The reason for this dire prediction is we have used all available land for our traditional “Greenfield” model of suburban development. We have no more space for another Clairemont, University City, Carmel Valley or East Lake. Further, virtually every developer and builder is gone from our marketplace. None, literally no one, is in the business of entitling land. A recent Fannie Mae report given to leaders at the Urban Land Institute in late January predicted that nationally over then next decade we will need between 5 million and 6 million new units of rental multi-family housing. In the prior decade our net production was only 1 million (after apartments converted to condos are eliminated from this total).

Even worse, our municipalities do not have this on their radar screens. When the recovery occurs, as it will, we will create jobs and people will have no option to purchase new homes for a growing population.

This is not to say that we do not have available land, we just do not have available raw land. As a relatively new area — remember a century ago, there were only a few thousand people living in San Diego — we had no need to recycle land. We could simply build further out. The only real example of developing a second generation of land uses in San Diego is the growth of downtown over the past decade.

There is another reason all is not lost, demographics. People of college age and those into their latter 20s are not expecting an Ozzie and Harriet future where a couple were married and with a young family by their mid-20s, and could afford to purchase a home in Clairemont on a single income. A two-income household is the norm. People are postponing marriage, delaying having children, and having smaller families — and are more focused on urban than suburban lifestyles. While life in a downtown high-rise is certainly not for everyone, life in a three- bedroom row home within a short walk to work, transit, shopping, schools and social networks is highly desired. Vast underutilized portions of our county — those “grayfields” where we have provided acres of land to park cars so we can have a few shops — are ripe for redevelopment.

Now is the time our civic leaders and municipal planners look at the opportunities we have in this “down time” to re-engineer the way we look at land, land use and the urban form. We can plan for this shift in demographic trends, the demands the market will bring, and what we must do to effectively compete for business. This does not mean every part of the county should look like downtown. It would simply be inappropriate, and not meet the demands of demographic trends, to assume every city should plan for high-rise condos. However, a mix of low-, mid-, and in some cases, high-rise and mixed-use and mixed-income development forms can compliment the existing urban fabric.

Much can be learned from both our region and other parts of the country. Now is the time to reflect, plan and become prepared. If we do not, we should be prepared for a real housing crisis in the next decade.

 

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Infrastructure investment as an economic stimulus – Failure is not an option

Infrastructure investment as an economic stimulus – Failure is not an option

By: Mary Lydon and Tony Pauker

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2008 marks a juncture where rapidly changing economic climate, a heightened sense of environmental issues and a growing awareness of the dire condition of our infrastructure will determine and reorder the next generation of winners and losers — countries, companies, investors and people. Without optimal roads, waterways, transit and broadband width, those who fall behind will get left behind. Those with innovative solutions will become the new political and economic leaders.

[space]In countries like China, Japan, Australia and India, infrastructure planning is done at the national level and this gives them a sharp edge where the focus is based on the good for all. In the United States over the past half century, most infrastructure planning is done at the local and state level and causes a disconnect between local and national priorities. The hundreds of metropolitan planning organizations, and all the politics that goes with them, create an environment where short-sighted politicians and tax-adverse citizens collude against a future of global competitiveness.

[space]President-elect Barack Obama is considering following in line with other American presidents who have spearheaded significant national infrastructure initiatives. In 1808 there was Thomas Jefferson’s canal and road building endeavor. A hundred years later Teddy Roosevelt’s focus became power generation. Franklin Roosevelt rolled out the New Deal in the 1930s (maybe under similar economic conditions we are experiencing), and then in the 1950’s, Dwight Eisenhower’s interstate highway system. There has been no new national infrastructure agenda since.

[space]A federal infrastructure stimulus would be a win-win for the economy. Improving and replacing roads, sewers and bridges in this country have projected costs of $136 billion. Economists estimate that every $1 billion in infrastructure translates into 40,000 jobs. Job creation and global competitiveness must be a big part of the national economic stimulus package that Obama plans on rolling out on Jan. 20. An infrastructure initiative would fit that bill.

[space]Members of the National Governor’s Association met with Obama and Biden earlier this week, laying out a plan for an infrastructure economic stimulus program. There is $136 billion in infrastructure projects that are “ready to go.” The governor’s asked that if a program is put into place that the permit process is streamlined so that projects could be expedited. This is a great state and federal partnership where we all win.

[space]Infrastructure investment has the opportunity to create jobs and enhance our global competitiveness but clean air, water conservation and open space need to be planned into the equation as well. New concepts, as identified in ULI’s Infrastructure 2008 Report, include: cluster development; expanded rail and truck corridors; infill suburbs to be more urban but served by transit; congestion pricing to reduce traffic flows in urban corridors; intercity high speed rail; and water restriction in arid regions. Higher density that is clustered and connected by transit provides the opportunity for more open and green space.

[space]These same concepts should be considered at the local level. It is estimated that the city of San Diego alone may have an infrastructure deficit of $5 billion. At the same time it is clear our construction industry has been decimated. Any opportunity to not only address our crumbling infrastructure, but also stimulate the local economy should be seriously considered.

[space]The Federal Highway Trust Fund expires in 2009 and Congress more than likely will increase the gas tax from the current 18 cents/gallon, set in 1993, up to 58 cents/gallon. This is not a popular measure but would add working capital to the infrastructure stimulus initiative. Other funding strategies include tolling interstate roads; tying community development to goals for lowered vehicle miles traveled; stop subsidizing sprawl; and stop tapping user fee revenues as cash cows.

[space]ULI San Diego/Tijuana will be discussing the national and local opportunities that an infrastructure stimulus package could bring on Jan. 13 at the University Club in downtown San Diego. Come hear what San Diego has planned and how it will fit into a national initiative.

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Constraints breed creativity and entrepreneurship

Constraints breed creativity and entrepreneurship

By: Mary Lydon and Tony Pauker

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“True creativity makes the impossible possible. It can revolutionize a product, a business, the economy and the world around us.”

–Marissa Ann Mayer, vice-president, Google.

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Depression; volatility; lack of confidence; layoffs; bankruptcies; credit markets; greed; dysfunctional legislation; uncertainty.

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These are the issues of our day and it seems they will be our issues for some time to come. But there is another side to this darkness, and it is filled with great opportunity.

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Never have we been in such a place of constraints globally as we are today. History shows us, though, that necessity breeds invention; through adversity comes opportunity.

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The sometimes terrible power of nature has taught us to build better homes. Starvation in parts of the world has given rise to philanthropic programs. Global warming has fast-tracked invention and adoption of more efficient cars. What will we learn from the problems of today? How will we advance our civilization?

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Urban Land Institute (ULI) is no stranger to this conversation. The Institute works to educate, lead and inspire land use professionals. It is even credited for first coining the term, “smart growth.”

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The sixth annual ULI San Diego/Tijuana Real Estate Trends Conference will surely reveal some creative ideas for how to navigate these times. We’ll learn what’s ahead for developers, lenders and investors in the greater San Diego region. Rand Sperry and the Honorable Jerry Sanders, mayor of San Diego, will headline for this fact- filled, half-day conference taking place on Nov. 11 at the Joe and Vi Jacobs Community Center at Market Creek Plaza. The conference speakers will help us explore how the capital markets and government policy are reshaping real estate here and across the United States.

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Two back-to-back sessions on finance and development will wrap up with a special appearance by one of the country’s best-known money managers, Gabriel Wisdom, CEO of American Money Management and host of a weekly program on the Business Talk Radio Network.

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Other speakers include Dean Schwanke, Urban Land Institute; George Chamberlin, The Daily Transcript; Anne Wilson, Community Housing Works; Tom Murphy, ULI fellow and former mayor of Pittsburgh; Jim Madaffer, San Diego City Council member and chair, CA League of Cities; Sunne McPeak, president and CEO of CA Emerging Technology Fund; Jennifer Vanica, president and CEO of the Jacobs Center for Neighborhood Innovation; Chris Day, Swinerton Builders; and Kevork Zoryan, Morgan Stanley. To register for this information-packed session with the best CEO networking regionally, go to ulisd.org.

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These are uncertain times and we are in uncharted territory. We don’t know where we’re going or how we’re going to get there. We’re all looking for ways to harness our creative energy, to reveal untapped opportunities. This is how we will find our inspiration to participate in the new economic, environmental and social society we all must help to create. Each of us needs to take responsibility and discover for ourselves what role we will play during this time and then draw our teams together to implement those visions. Persistent entrepreneurship will be rewarded greatly.

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Let the innovators lead

Let the innovators lead

By: Mary Lydon and Tony Pauker

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Less than half a decade ago the term LEED (Leadership in Energy and Environmental Design) was unknown to virtually everyone in the development industry and municipal government. Today even considering a major new development that does not include sustainable and LEED features is not only at risk of not receiving approvals; it also is simply out of touch with the market.

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The role of LEED has served its purpose well. It is not only the brand of the U.S. Green Building Council, but more importantly, it is a confirmation that a project has met a rigorous test of sustainability standards. Basically, the USGBC has been the bridge for local planning and building officials in transforming building practices into sustainable projects. However, in very short order, LEED or LEED-like standards will simply become part of most cities’ building codes.

[space]The USGBC has played a great role, but LEED as a branded designation may not be sustainable when you take into consideration that we are in the middle of a technological renaissance. To put mandates in place right now may hamper innovation. To allow for an unfolding of technological innovation will ensure competitiveness, best practices and the lowering of costs of new technologies.

[space]The Gerding Edlen proposal for a new San Diego civic center is a great example. One of former Mayor Dick Murphy’s little-known contributions to the region was his 2003 mandate that all new city buildings be at least LEED silver certified. When CCDC released the RFQ for a new civic center, all respondents were willing to comply because now the net costs for such compliance are marginal and the city and market demand it. LEED silver is not a big deal and it ccan conform to existing codes

[space]Gerding Edlen, our lone finalist (after Hines’ withdrawal), went quite a few steps beyond LEED silver. They not only proposed the much more rigorous LEED platinum designation, but they proposed inclusion of concepts and technologies that push the envelope of code and design. The more tame aspects include prodigious use of solar panels. Then more and more exotic ideas, like wind turbines on the building (already a technology used in the Middle East) and green roofs – again, a technology that exists, but is far from commonplace. They also incorporated grey and black water use, which is a sustainable measure way beyond where most projects are willing to go. Grey water is the recycling of waste water for irrigation and non potable uses.

[space]In San Diego this is already done — our “purple pipe” system that can be seen in parts of the city. Although it is a technology ready to be put into place, funds to implement are very limited. Black water, however, is more extreme and refers to the recycling of raw sewage into grey water. All of these technologies are at the forefront of innovative design and engineering, and are all very relevant in our new market reality of high energy costs and water limitations.

[space]The problem is, in light of the constantly emerging and changing cutting edge technology, how do we even begin to address these methods from a code and implementation standpoint? The high cost of energy and threat of water availability has forced the private sector to innovate solutions disallowed by code. When Westfield recently won approval for the expansion of UTC, one of its strong selling points was a zero increase in water usage. In large part, this was achieved by tapping into the city’s reclaimed water “purple pipe” system. This company was pushing the edge of approved technologies. Gerding Edlen’s civic center project is moving even more out on the innovative sustainability ledge.

[space]In the spirit of San Diego as a world-renowned center for cutting edge high tech, bio tech and our emerging clean tech business segments, it makes sense to encourage the development sector to innovate — rather than limit it — within our existing code or even within the LEED standards. We do not need more regulation, but we may need more flexibility to allow private sector developers to lead the way to a sustainable building future.

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Green entrepreneurial capital leading the way to a new economy

Green entrepreneurial capital leading the way to a new economy

By: Mary Lydon and Tony Pauker

 

One of the most exciting things happening in our economy these days is a path that is being solidly constructed to pave the way for a new sector in our global economy that is sustainable. Entrepreneurs with great ideas and access to massive amounts of capital, like T. Boon Pickens, are in the front leading the way. Also, global investors have poured $148 billion into new wind, solar and other alternative energy assets last year, which is 60 percent above the previous year’s investments. With big business leaders taking on the charge there is a great opportunity for a trickle down effect that will spur an economic renaissance.

 

The Pickens Plan stresses that our oil crisis is a national security issue. We import 70 percent of our oil, up from 24 percent in 1970. Pickens’ vision is to couple a $1.2 trillion one-time investment in wind power and to tap into America’s natural gas reserves for vehicle use. His research shows that this will reduce our foreign oil imports by one-third, reduce our CO2 emissions and create a whole new sector of jobs revolving around a clean energy economy.

 

Elon Musk, the PayPal-founder-turned-green-entrepreneur, is chairman of the electric sports car company Tesla, which has a 250 mile range and 0 to 60 mph time of 4.0 seconds. The car was designed by Lotus, a British manufacturer of sports and racing cars. While the selling price is over $100,000, Musk’s goal is to get the price down to $30,000 in three years by refining the technology. These are just a couple in a field of thousands of plans and products that are activating our imaginations.

 

So how can San Diego take advantage of this rising tide of opportunities? The City of San Diego, the San Diego Regional Economic Development Corporation and the CONNECT-managed Cleantech San Diego are working together to analyze how the Cleantech market segment could benefit our region. Cleantech is defined as environmentally friendly technologies and green enterprises that promote a sustainable planet.

 

A Cleantech assessment of capabilities and assets for San Diego was completed in June 2007. A regional benchmarking report is due to be released at the end of August that will show how San Diego ranks with other top Cleantech cities. Early indicators show that San Diego is well positioned largely because we already have a great technology base in place and we have an educated workforce. Hi-tech, biotech, software, telecom and building material companies in San Diego are seeing that they can easily convert their technology to take advantage of the emerging green boom. Other new emerging companies are focused on algae commercialization, bio fuels and renewable energy. Our world-renowned educational institutions, UCSD and Scripps Institute of Oceanography, and the fact that we have industrial-zoned land in Otay Mesa and maquiladoras in Baja add greatly to our high ranking in the Cleantech arena.

 

Our climate also adds to our unique position for research, development and manufacturing of the booming solar market. Another up-and-coming technology that is emerging in San Diego and could potentially make our city a national hub is a new discipline that studies nature’s best ideas and then imitates these designs and processes to solve human problems. This technology is called Biomimicry. The world-class San Diego Zoo has been working with the Biomimicry Institute to explore how to leverage their work with this exciting new technology. Currently, through the zoo’s Conservation and Research of Endangered Species program, they study over 5000 plants and species in 32 countries. They are uniquely positioned to be a world player in this emerging technology. With these two technologies that fit our region uniquely, San Diego could position itself to become the Solar or Biomimicry Capital of the World.

 

What does this mean from a land use perspective? High-paying jobs will create demand for a range of housing, vibrant retail and the infrastructure development to support it all. And of course there would be a great need for commercial space. As we grow, due to our geographic constraints, we will need to look at how to densify our region in a smart and sustainable manner as well.

 

San Diego’s core values, as defined in the San Diego General Plan Update “developed through a multi-year dialogue with San Diegans in numerous community forums” sets the perfect tone for us to jump on the green economy train. Our physical values revolve around our natural environment and the conservation, preservation and environmental quality of natural resources. Our economic values call for a rising standard of living for all San Diegans. Cultural and society values focus on social equity and education. Green companies and jobs are in full alignment with all these values.

 

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Confluence of forces leads to a new era for the built environment

Confluence of forces leads to a new era for the built environment

By: Tony Pauker and Mary Lydon

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We are at a crossroads, and depending on your perspective, it could either look like we are on the precipice of a new era or that we have gone over the cliff. The incredible run of all aspects of real estate sure felt good while it lasted.

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Unfortunately, the subprime-induced credit tightening has turned into a downturn possibly more painful than we saw in the early 1990s. It appears that no property sector has made it though unscathed. Residential woes are old news even though they seem to be getting worse by the day.

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Retail spending is down, fuel costs have forced consumers to rethink vacation plans, hiring has slowed, and the story goes on. As bad as it is, and it is really bad, any real estate industry veteran can tell you that the market will inevitably bounce back with a vengeance — we just wish we knew when. But there is a bright spot on the horizon.

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This could be a time for all of us to retool and find ways to become more competitive. The interesting thing about real estate recoveries is they always seem to start small, and as the cycle becomes overheated, our irrational exuberance leads to building types and styles that prove excessive. Remember the average San Diego tract builder home produced in the late 1980s? Large homes on large lots with large price tags. As that product market collapsed and we started rethinking housing, we began planning on those very same vacant lots, houses that were scaled back in size and finish. The homes became smaller and more efficient.

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It’s interesting to observe how this has converged with the boom in sustainable building practices. In literally every past cycle, including the oil embargo of the late 1970s, we did not face the issues of global energy crisis and environmental concern.

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Now we face direct costs from oil and concerns over climate change that make still low-cost energy sources, like coal, a dubious alternative because of the long term costs associated with its use.

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This pause in the market may allow a paradigm shift to take place. In the United States half — fully 50 percent — of all greenhouse gases are emitted from the construction and operation of buildings. Cars, industry and everything else pales in comparison. Carbon emission is a proxy for another problem, energy usage.

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While some in the real estate industry may have genuine concerns of the long-term effects of carbon emission, everyone in the industry is concerned about costs. Energy inefficiency means higher operating costs. Construction waste means you purchase expensive raw materials only to discard them — at rising dump fees.

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All of these issues lead to lower yields and higher risk. As an example, a friend just moved into a new LEED certified condo with solar power. Her power bill in June was $16 — a month she used her air conditioner. The bill was a fraction of her former 1970s era single family home.

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In the past few years LEED has gone from a little know design concept to the forefront of every type of new development. Soon LEED will simply become part of our local building codes and the expectation of every major tenant, investor and asset manager.

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No one is well served by the current economic climate, but there could be a silver lining that will serve our economy and our environment as the confluence of rising energy prices, market demand and climate change elevate the dialogue on sustainability.

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Will a McMansion that does not use the latest technologies to ensure energy efficiency in a bedroom suburb be competitive when the market rebounds? Will a low-rise, non-LEED, certified office park command Class A rents, status and investors? Clearly not. The most savvy and well-positioned developers and real estate professionals have begun to focus on what is not only sustainable for environmental reasons, but the new awareness of cost. Sustainability is not more expensive, but in fact yields a better bottom line today and in the future of any real estate asset.

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The sad truth is that this retooling is not universal. China, India, Dubai and many other emerging and surging economies are looking to American expertise to help guide their land use and development activities. What is the model? Frequently it is a suburban American dream — Orange County. Wide roads, large single-family homes, sprawl — our post World War II development model that many in the United States are trying to get away from. As we look to recreate compact urban designs and transit systems that emerged in this country between 1890- 1930, these emerging economies look to our 1950s era Federal Highway Act-induced development patterns.

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Even more concerning is that their more equatorial and arid environments may be ill suited to such resource intense development. While it is true that there are some sustainable plans — such as Dubai’s attempts to develop a zero-carbon new town for 50,000 — many are not.

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We have some of the greatest intellectual capital on the planet. It is my hope that our real estate and design expertise can be harnessed during this pause in the U.S. market to evaluate more sustainable models of land use and development.

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This should not only be in anticipation of a turn in our market, but it should also create opportunities to export these models to the emerging economies that need them as well.

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Download the article pdf

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