DREXEL UNIVERSITY
Indoor Urban Farm and Community Center The Philadelphia Prototype Lauren Deming March 2015
I certify that I am the author of the following work and that any assistance I received in its preparation is fully acknowledged and disclosed therein. I have also cited any sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this work was prepared by me specifically for this course.
Indoor Urban Farm and Community Center: The Philadelphia Prototype Overview: The Need: Michelle Obamai and Guerilla Gardener, Ron Finleyii of Compton, are just a few figure heads striking out against the shortage of nutrition in urban communities. Urban communities throughout the nation lack access to plant-based nutrition.iii This is the source of the America’s deadliest epidemics-- heart disease, many forms of cancer, childhood obesity, diabetes, and so on. Furthermore, the carbon footprint associated with the transporting of food from the farms to the urban grocery stores to the homes is astronomical and unnecessary.iv Educating communities on plant-based agriculture and nutrition, and moreover, supplying the masses with access to nutrition should be our highest domestic priority—from our Federal government down to every community. Green houses, food banks, urban gardens, produce bodegas and farmer’s markets have made leaps and bounds in getting their respective urban communities involved with growing their own produce and supplying alternatives to fast food, but a new method of farming could yield nutrition on a larger scale to the urban communities. The Solution: Indoor farmingv is a new means of delivering fresh, local produce and agriculture to the urban communities without the carbon footprint. With the help of local non-profit organizations—Philabundance, Philadelphia Youth Network, Greensgrow, Greater Philadelphia Coalition Against Hunger—and academic networks—Center for Hunger Free Communities at Drexel University and government agencies like Mayor’s Office for Sustainability, Mayor’s Office for Community Empowerment, and Pennsylvania Hunger Action Center—abandoned warehouses in Philadelphia can be retrofitted and prepared for urban farmers to lease. Physical Site Characteristics According to Time Magazine (2014), Philadelphia ranks the third poorest city in the United States with the largest population on the top-ten list.vi The figure below shows the proposed site for the prototype in relation to Philadelphia’s borders.
Figure 1: Site Location in Relation to Philadelphia's Footprint
The proposed site is in one of Philadelphia’s most economically recessed, and nutritionally deprived communities. The Renewal Community and Empowerment mapvii (courtesy of Phila.gov) shows the urban development areas that qualify for municipally funded incentives. The proposed site is marked with two red rectangles connecting two “renewal communities.”
Figure 2: Renewal Community and Empowerment Zone Map (left) and Vacancies surrounding Proposed Site Map (right) The below map from Phila.govviii, show the number of vacancies within blocks of the site and accessible “healthy corner stores.” The residential vicinity around the proposed site is encircled in red with a half mile radius. “Healthy Chinese Take Out” seems almost like an oxymoron. Then there are “healthy corners stores.” The map shows four within the five-block radius. The awning for Caribe advertises, “hoagies, pet food, snacks, soda and cigarettes.” There are six “enhanced health food stores” within the five-block radius—the Tastykake Outlet, which actually sells wholesale cakes and breads… but mostly cakes, potato chips and processed snacks with long shelf lives. Then there are a series of other bodegas that may sell produce, but there is no evidence of it from their window displays and awnings, all of which advertize candy and /or cigarettes. Not called out on the municipal site, but among these noted stores; Wendy’s, Checkers and Rita’s Water Ice are open for business.
Figure 3: Healthy Corner Stores within Proximity of the Proposed Site
Figure 4: Alternative Area Food Options
Because this site is located so close to the city’s center, it is a densely populated area with seemingly little geographic access to resource imports from other cities, however, the map below (adapted from the SEPTA Regional Rail Map)ix shows the site’s proximity to both commuter rail (red) as well as the Amtrak North East Corridor line (blue).
Figure 5: Site Access by Rail
The proposed existing facility may be the greatest blight for the local residents—the 2400 block of West Hunting Park Avenue (19129). Below are aerials showings its sheer size and then a street view. It is currently registered with the city as vacant with multiple minor code violations, indicating that it is not being maintained and is a greater liability for the owner.
Figure 6: View of proposed facility across from the Salvation Army Community Center
Relevant Regulatory Process – Approvals The below map shows the proposed parcels on a city zoning map from the Phila.Gov websitex. The properties are zoned and designated as follows (from left to right): industrial mixed use; mixed use; and “unknown.” The zoning map indicates that all these parcels are zoned “CMX-3 (Community Commercial Mixed-Use)” This zoning should be aligned with the development of the city plant farms, distribution center, and the farmer’s market.
Figure 7: Zoning Map
There is no indication of easements, transparcels, or rights of way shown for these parcels. Unfortunately, these parcels (although “vacant”) do not appear to be owned by the city and therefore there are no place-based incentives listed. The construction violations listed for the parcel (2301 West Hunting Park) are listed in the table below.xi Violation Number 372259
Description Violation: ARCHITECT/ENGINEER SERVICES Violation: WALL LOOSE/MISS BRICKS
368279
Violation: CLIP VIOLATION NOTICE Violation: VUPD-EXT-GRAFFITI
460581
Violation: EXT A-CLEAN RUBBISH/GARBAGE Violation: EXT A-CLEAN WEEDS/PLANTS Violation: VACANT BLDG UNSECURED COUNT Violation: VACANT PROP STANDARD
Violation: LICENSE-VAC COMM BLDG
460583
Table 1: Violations Register
These violations are largely maintenance issues that may be too costly for the private owner to repair, but may be easily fixed with the proper structural engineer and construction team. There are no violations for hazardous materials, which is a good indicator that asbestos abatement may not be necessary. The facility will require a general code inspection and life safety evaluation to bring it to compliance. Design Issues Fees Without entering the building, there is little means of knowing the costs associated with restoring code compliance, so a primary cost analysis will require a 15% contingency. Indoor irrigation will require a plumbing permit and almost certainly the lighting will need to be upgraded to support grow lamps. Design fees for this project are estimated at $5.1MM. The cost for design is higher than most (15% of hard costs) because such an extensive structural, environmental and green energy survey will be required to ensure the best yield of energy production for the least expense. Development costs (including design fees and other soft costs, land, approval fees, hard costs, developer overhead and aforementioned 15% contingency) are estimated at $58.1 MM. Development costs after construction interest and total project cost equal approximately $32.6 MM. The overall expense is less than the development cost because the revenue will be available to offset costs within the lease up period. A detailed structural survey and green energy analysis will be necessary to determine the cheapest way to yield the highest returns. This expense will be costly but necessary for the life cycle yield of the project. Strategy The intention of the development is, not just to turn an abandoned factory to useable industry, but to create a diverse experience that several different user groups from all aspects of the community can utilize. With an estimated 671,00O RSF of interior space, there is room for investors, large and small. The facility will host the following business types:
(40) Dining or community development spaces (~1,515 SF each). (14) Rentable indoor farm parcels (varying from 20,200 SF for $1/SF to 36,633 SF for $0.50/SF). Up to (3) tenants for a rooftop restaurant, lounge / cafe and brewery. (35) Rentable indoor community garden parcels (from 2,768 SF to $11,075 SF for $1 / SF). (94) Administrative offices (each 6,875 SF at $20/SF).
Amenities Although indoor farm parcel rates are high in comparison to that of the average rural farm, these farms eliminate the overhead of transporting and selling produce to an intermediary distributor because the yield can be sold in farmer’s markets and to restaurants on site. Furthermore, the “gentlemen farmer,” interested in learning about the process of farming, contributing to the non-profits, or catering to a niche market (e.g. the production of honey or antioxidant infused jams), may be interested in the following amenities available for a slightly higher rent:
Rail road loading dock Reduced rate or free warehousing Solar / wind farming and rain water catchment (reduced utility costs) Community cold storage Fish farming membership
Access to lectures and workshops at the auditorium Access to the green roof Zen garden and atrium Free bike storage, locker rooms and showers Free access to the agricultural classroom, library, museum
A stand at the bi-weekly farmer’s market
Daycare facilities for farming parents Community tool share
Timeline The project schedule shows an estimated 350 working days (>16 months). Because this need is immediate and on-going, the sooner the project can break ground, the better. Sustainable Aspects This project has every opportunity to register for LEED EBOMxii standards with multiple green amenities. These amenities will reduce energy draw from the grid, reduce carbon footprint due to reliance on alternative transportation for commuters and product distribution. Some of these incentives include:
Bike racks, lockers and showers. (See bike route mapxiii below showing the site marked with a red “x.”) Alternative transportation via bus or rail. (As shown in rail map adapted from SEPTA’s map above.) Wind generated supplemental power. Solar generated supplemental power. Rain water catchment for supplemental irrigation. On-site gray water management and treatment through planters. Easy industrial rail export of excess food production. Retrofit / reuse of existing, underutilized facility.
Figure 8: Bike Route Map
Market Analysis Preliminary Market Analysis Studies have shown that it is not by choice that people are eating less than healthy options or struggling to feed their family. Families are aware of the food shortage and choose low quality food for convenience and affordability. The development initiative is in direct response to the market demand for healthy food options. Revisit figure showing healthy corner stores and the collection of food sources within walking distance of the proposed site.
The proposed site was selected based on its proximity to public transportation and its lack of conveniently located food distributors. Because plants need just as much room to grow indoors as they might in an open field, finding a site large enough within the confines of an already established urban grid was the greatest parameter. Secondary Analysis A short “windshield survey” showed that a supermarket had been built in proximity to the site that was not identified through initial Internet research. This store, identified the need first, and may be the primary competition. It will be important for the tenants to keep pricing competitive and accentuate the differences between the businesses—environmental responsibility, community values, and reduced overhead due to on-site production of goods direct to the consumers. Furthermore, unlike a super market, this indoor farm and community center will partner with the community—the bodegas in distributing food and non-profits, like the Share Food Program and the Food Trust. The “windshield survey” also gave rise to the discovery of the adjacent Salvation Army Community Center, which may be a great source of human resources in our efforts to maintain various aspects of the indoor farm facility.
Figure 9: Photo Showing Proposed Site and Adjacent Salvation Army Trail divided by Amtrak Line
Figure 10: Photo showing Adjacent Salvation Army Community Center Facility
Figure 11: Photo showing Adjacent Salvation Army Community Center Playing Fields, Track and Playground
As stated, the cost per square foot of farming parcel may be high in comparison to that of a rural farm, but the rent comes with a possibility for greater output, convenient location, and multiple co-operative (or shared) amenities. Managing/Scheduling the Project The overall development project from lease assessment to building buy out and turnover is estimated at a little over 16 months. The below schedule assumes an extensive structural survey will have to be conducted prior to design development.
Figure 12: Development Project Schedule
Construction Materials/Systems Because the building is existing, the majority of the challenge will be to reinforce the structure for agriculture (the weight of dirt and water), modernize the utilities for safety, sustainability and efficiency, and to abate any hazardous materials. Additional glazing will be required for green house spaces, and the roof will need to be reinforced to mitigate uplift from solar panels. Some areas will require tenant fit out work, like the brewery,
restaurants, and offices, but the majority of the space will remain brick and mortar and steel. As evident from the exterior, 100% replacement of glazing will also be required. Financial Feasibility (Pro Forma) The below plan shows the two sides of the facility divided into six zones (A through F). Each zone has different heights and different operations.
Figure 13: Facility by Zone
The table below shows the unit types in each zone, their respective area and price point.
Table 2: Unit Types and Associated Revenue
While this exercise estimates $104.6MM annual rent, there are many components that detract from the profitability and therefore feasibility of the investment. The following assumptions are based on the Real Estate
Development 568 lecture and text (Peiser & Hamilton, 2012). The facility will only be 95% occupied at all times, reducing the annual revenue to $99.4MM. Development costs are a major portion of the expense. A summary of the Development Costs are shown below.
Table 3: Development Costs
Table 4: Construction Interest
Operating Reserve during lease-up represents “the subsidy that will be required to cover operating costs and debt service before the project reaches break-even occupancy.�
Table 5: Operating Reserve
For the sake of this project, the operating reserve is negative, meaning the project’s income will exceed its expense, prior to completion of construction. All project costs—the sum of development costs, construction interest, and total project costs—is estimated at $32.6MM. Financing Options/Interest Rates & Terms The above calculations show a few cells highlighted in red or referencing the Debt Calculation Sheet. The Debt Calculation Sheet can be found below with value used in the above estimates. This sheet shows multiple assumptions made in relation to capitalization and interest rates. As you can see, the allotted loan amount of $531.1MM far exceeds the project costs of $32.6MM, indicating that (with these assumptions) the development project is feasible.
Table 6: Debt Calculation Sheet
Lease Strategy & Plan Diversification and flexibility of the parcel sizes is crucial to securing tenant agreements. That is why every square foot of parcel will be negotiated on a sliding scale between $0.50 and $1.00 per square foot. For example, a larger parcel may be half the price of a smaller parcel. Community gardens will be more costly, however, the costs will be shared among the community or offset by non-profit status. Finished spaces such as
offices will obviously be more costly ($20 / SF) and dining and community space on the first floor will be the most costly at an average of $75 / SF. As mentioned earlier, each tenant will have access to all the amenities listed above, but there will be a cooperative structure in ensuring that tenants also take part, in some way, with keeping these amenities maintained. In the end, the profits will be shared among the tenants through events and programs to make the community stronger. Operation/Maintenance Plan Due to the diverse nature of the facility, it will operate on many levels like a complex machine: to ensure maximum crop output year-round the environment will have to be carefully regulated for optimal temperatures, lighting, and humidity. This facility will require an engineer with expertise in mechanical building operations, agriculture, and sustainability, a costly trifecta. Second, the facility will require experts in numerous other areas. Foremost, a strong operating officer with a good understanding of event planning, community development, agriculture and non-profit initiatives will be crucial to the initiative’s success. Moreover, at least part-time or volunteer positions will be needed to fill the following positions: Rail road loading dock operations manager Lecture and workshops programs Warehouse and cold storage manager Green roof Zen garden and atrium upkeep Sustainable energy accountant Librarian, archives and museum director Fish farm manager Daycare Manager Farmer’s market operations director Community tool share volunteer Security Director Qualifications and salaries will vary for all these leads. Ultimately, this project is not intended to be a great moneymaker. Its goal is only to restore health in our urban communities and nation-wide. The health and well being of our communities depends on this.
i
http://www.letsmove.gov/ ii http://ronfinley.com/?page_id=2 iii http://www.greenfacts.org/en/diet‐nutrition/l‐2/1‐chronic‐diseases.htm#2 iv http://shrinkthatfootprint.com/food‐miles v http://www.ibtimes.com/indoor‐farming‐future‐takes‐root‐abandoned‐buildings‐warehouses‐empty‐lots‐high‐rises‐1653412 vi http://time.com/3581716/poorest‐cities/#3581716/poorest‐cities/ vii http://www.phila.gov/commerce/neighborhoods/Pages/EmpowermentZones.aspx viii http://www.phila.gov/map ix http://septa.org/service/rail/ x http://www.phila.gov/Map#id=de10acb42f0c413faa812195df3fb17f xi http://www.phila.gov/data/Pages/default.aspx?entity=violationdetails&eid=372259 xii http://www.usgbc.org/Docs/Archive/General/Docs3353.pdf xiii http://citymaps.phila.gov/portal/
