the dawson company urban residential ... - pensacola, florida

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 [email protected]

404.347.8030

191 Peachtree Street NE

Suite 805

Atlanta, Georgia 30303

www.thedawsoncompany.com

http://www.thedawsoncompany.com/

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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

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• 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

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OVERVIEW OF THE DAWSON COMPANY AND

APPROACH TO COMMUNITY DEVELOPMENT

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● 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

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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


• 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


• 20+ years of real estate development and

management experience

• BS, Spring Hill College

• Masters in Public Accountancy, Georgia State

University

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Bailey Pope, AIA, LEED

Green Associate Senior Vice President Design &

Sustainability


• Responsible for design, and

regulatory compliance


• 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.


• 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

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• 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


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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


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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


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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


Strategic Initiatives - continued

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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


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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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:


● 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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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)


Initiatives that need to be re-energized or need initialization:


● 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



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



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


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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


Saudi Telecom Company (Kingdom of Saudi Arabia)

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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

the dawson company urban residential ... - pensacola, florida

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