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COMMON GROUND VOL, 12 NOr 4 JULY—SEPTEMBER 2001 3 9
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<br /> Financin For 50 years, the real estate development velopment, hurting prospects for success .
<br /> industry has adapted itself to what car mak- This is why Arcadia Land Co . pursues
<br /> Progewiv . ers, road builders, farmers, local politicians development projects that employ an up-
<br /> and consumers want—a car- oriented, built dated version of traditional financing that
<br /> Deenvironment.
<br /> "il � �� We have standardized this we call " time traunches . " Rather than amor-
<br /> process so that " conforming" real estate tizing the financing of a project, both equity
<br /> products—strip malls and suburban office and debt, over the short-term (three-to -five
<br /> buildings—are commodities traded on Wall years ) as conventional development does,
<br /> Street, just like stocks or bonds . Arcadia slices its development financing
<br /> Considerable effort has been exerted into three time traunches . We give short-
<br /> - over the past decade to change how America term investors and banks short-term re -
<br /> builds itself. Sprawl' s damaging effect on the turns . We then give mid- to long-term inves -
<br /> environment and social equity motivated tors the kind of returns they want. Invest-
<br /> this movement . Consumers also have grown ment time horizons have been lined up with
<br /> disenchanted with the sterility of the Ameri- investment returns .
<br /> can built environment, its growing lack of Arcadia is using ttimeAraunche invest-
<br /> convenience and, most of all, increased traf- ing in downtown Albuquerque on a $30 mil-
<br /> fic congestion . There is "pent-up demand for lion movie-theater, retail, office and live /
<br /> ui � a pedestrian- oriented alternative, more in work development. Only 55 % of the cost of
<br /> taw
<br /> keeping with 5, 000 years of city-building the project 1s 1n the short-term time
<br /> is published quarterly 11a:, , a that preceded the current preoccupation traunche, with the remainder in the mid- to
<br /> service to the conservation with making the world a safe place to park long-term traunche . We can build real build-
<br /> community by one' s car . The most obvious evidence : the re- ings, with brick and tile facades and oper-
<br /> The Conservation Fund vival of half our downtowns, particularly in able windows, rather than the substantially
<br /> Chairman
<br /> Patrick Noonan the past five years . The remainder should re- cheaper buildings in strip commercial devel-
<br /> John F. Turner vive themselves over the next decade . opment . Our mid- and long-term investors
<br /> President Architects, planners and developers are realize returns that put a financial- founda-
<br /> Mike McQueen trying to relearn how great pedestrian- ori- tion under their organizations .
<br /> Editor ented places were built, exploring pre-World This approach gives progressive real es-
<br /> Jack Lynn War II precedents . New Urbanism in ar- tate one thin it needs : time to mature into a
<br /> Editorial Consultant P P g
<br /> Meg West ticular attempts to relearn the lessons of the real place, a place where people will have a
<br /> Art Director great planners and developers of the 1920s . reason to walk around . It recognizes that
<br /> For address corrections and But conservation development, smart real estate is a 40 -year asset class, not five -
<br /> information, contact: growth, urban revitalization, New Urbanism year . It gives patient capital—a very rare
<br /> April Berry and other forms of progressive development commodity today—superior mid- and long-
<br /> Circulation Manager all et hung issue : financing ' Pro - term returns that real estate has historically
<br /> The Conservation Fund g g up on one
<br /> 1800 N. Kent St., Suite 1120 gressive development does not conform to shown itself capable of producing.
<br /> Arlington, VA 22209 Wall Street expectations . The result : many —Christopher Leinberger
<br /> 703 / 525-6300
<br /> proposed projects will not get past the plan- The author is a partner in Arcadia Land Co . in
<br /> COMMON GROUND routinely pi
<br /> grants permission for reprints . ng stage . If they do, the cost of financing Santa Fe. , N. M . , and a member of the National
<br /> Address editorial correspondence will be much higher than conventional de- Council of The Conservation Fund.
<br /> and reprint queries to :
<br /> COMMON GROUND
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