Live-Work Analysis NYC by rePLACE Urban Studio

TYPOLOGY ANALYSIS (BOOK 1)

This study was prepared by rePLACE Urban Studio for the New York City Economic Development Corporation (NYCEDC). The intent of this study is to: • • •

Identify and define the various live-work typologies; Examine how live-work typologies may be integrated into the City’s economic and physical landscape; and Consider how live-work may be implemented in New York City taking into account the realities of the fiscal, physical, and regulatory factors that govern development.

rePLACE Urban Studio 12-16 Vestry Street, 7th Floor New York, NY 10013 p. 212.380.1079 e. info@replaceurbanstsudio.com w. replaceurbanstsudio.com New York City Economic Corporation 110 Williams Street New York, NY 10038 p. 888.692.0100 w. nycedc.com Final draft Issued on July 1, 2015.

TABLE OF CONTENTS - BOOK 1 CHAPTER 1 CASE STUDIES CHAPTER 2 LIVE-WORK TYPOLOGIES IN NEW YORK CITY CHAPTER 3 LIVE-WORK IMPLEMENTATION IMPLICATIONS IN NEW YORK CITY CHAPTER 4 CONCLUSIONS & RECOMMENDATIONS

TABLE OF CONTENTS - BOOK 2 APPENDIX

LIVE-WORK TYPOLOGY ANALYSIS

CHAPTER 1: CASE STUDIES

OVERVIEW This chapter is a compilation of case studies of live-work typologies from around the world that best illustrate the full possibility of livework. It is intended to define the basic characteristics of each typology through the case study examples. The case studies are divided into basic six typologies: • • • • • •

Live-work apartment; Live-work building; Live-work mixed use building; Flexible building; Live-near planning; and Innovation district.

These basic typologies sometimes have sub-typologies, which are noted. Please see the appendix for additional examples of live-work developments that were identified during the research phase of this study. Industries favorable to Live/Work.

CHAPTER 1: CASE STUDIES

FIGURE 3.1-1 - METHODOLOGY DIAGRAM 5

LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE FLEXIBLE BUILDING LIVE NEAR PLANNING INNOVATION DISTRICT

TYPOLOGY: LIVE-WORK APARTMENT A live-work apartment contains a dwelling unit that combines a workspace and living quarters within a singular contiguous area.

Common Attributes: • Townhouse with below grade usable space or public fronting facade (Townhouse) • Adaptive re-use building (Loft & Studio) • Deep floor plate often results in no light and air at the center of the building (Home Office) • Usually weak market area, favors entrepreneurial/startup market sector (Shared) Target Markets: • Small business enterprises (across all sectors) • Entrepreneurs • Startup businesses • Professionals • Student and faculty housing • Short-term income for ‘mothballed’ property • Artist/artisan market (zoning regulated)

Case Studies La Esquina - San Diego, CA

Gunther Building - New York, NY

Examples Considered as Case Studies (see Appendix) • • • • • • •

Clock Tower Building - San Francisco, CA Mile Post 5 - Portland, OR Biscuit Company Lofts - Los Angeles, CA Overton 19 - Portland, OR The Q - San Diego, CA Paynes & Borthwick - London, UK The Renfro - Wichita, KS

CHAPTER 1: CASE STUDIES

• • • • • • •

Art Stable - Seattle, WA Pioneer Warehouse Lofts - San Diego, CA The Union Loft - San Diego, CA The Live Work Home - Syracuse, NY Home Cooking - East Lawrence, KS Bohouse - Middlesbrough, UK Greenwich Street Project - New York, NY

B/ W

L/ R

IT C

TOWNHOUSE ST

LOFT

SHARED SPACES

CL ID

L/R

LIVE WORK COMBINED

STUDIO

FIGURE 3.1-1 - METHODOLOGY DIAGRAM 7

LIVE-WORK TYPOLOGY ANALYSIS

HOME OFFICE

LIVE-WORK APARTMENT

CASE STUDY: LIVE-WORK APARTMENT LA ESQUINA - SAN DIEGO, CA

LIVE-WORK APARTMENT - TOWNHOUSE

Site Context:

Low density urban neighborhood adjacent to the Mexican border

Zoning Type:

Special Residential District - 1 to 2 Family homes with limited commercial and lightmanufacturing uses permitted

Developer:

Small private developer/operator - Hector Perez: a local architect/developer/builder

Target Market:

Rental units for students at a nearby college

Lease/ Rental Cost:

$1,000/month

Construction Type:

New construction

Construction Cost:

$130/sf

Development Incentives:

None

Size:

4,000 sf building

FAR:

1.00

Number of Dwelling Units:

7 live-work apartments and 1 office (apartments range in size from 450 to 595 sf)

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

This development is an assemblage of vacant lots that were developed into live-work apartments in 2012. It is a low-cost design-build project. Tenants are primarily university students.

CHAPTER 1: CASE STUDIES

City B oun da

San Diego International Airport

805

rs Country Borde

2 mi

SAN DIEGO, CA

200

500

1000 ft LIVE-WORK TYPOLOGY ANALYSIS

Downtown

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

UNIT #6 WORK SPACE - INDOOR

UNIT #3 TRANSITION FROM WORK TO LIVE

UNIT #6 LIVE SPACE - OUTDOOR CHAPTER 1: CASE STUDIES

LIVE/WORK UNIT #5

LIVE/WORK UNIT #6

LIVE/WORK UNIT #7

2ND 2ND FLOOR FLOOR PLAN PLAN

LIVE/WORK UNIT #1

LIVE/WORK UNIT #2

LIVE/WORK UNIT COMMERCIAL UNIT GROUND PLAN GROUND FLOOR FLOOR PLAN

LIVE-WORK TYPOLOGY ANALYSIS

LIVE/WORK UNIT #3

LIVE/WORK UNIT #4

COMMERCIAL/ GALLERY UNIT

LIVE-WORK APARTMENT

CASE STUDY: LIVE-WORK APARTMENT

GUNTHER BUILDING - SOHO, NEW YORK W

This building was converted to lofts under the 1971 Artist-In-Residence zoning ordinance, which permitted the conversion of about 200 commercial lofts into live-work spaces for certified artists.

LIVE-WORK APARTMENT - LOFT

Site Context:

SoHo-Cast Iron Historic District

Zoning Type:

Manufacturing (M1-5B)

Ownership:

Gunther Building 1873 Corporation

Target Market:

Artist

Cost:

$ 2,039/ sf

Development Incentives:

Under applicable state legislation and the New York City Zoning Resolution, certification as a working artist is necessary in order for an individual to qualify for joint living-working space in the M1-5A and M1-5B zoning districts. This permits fine artists working on a professional level who demonstrate a need for a live-work condition to reside in specific lofts zoned for manufacturing. Pursuant to the New York City Zoning Resolution, the Department of Cultural Affairs has been designated as the certifying agency.

FAR:

5.46

Number of Dwelling Units:

10 units

Construction Type: Adaptive re-use

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

CHAPTER 1: CASE STUDIES

Broadway

495

Can a

Metropolitan Av e

l St

WILLIAMSBURG M y r t le

BUSHWICK

278

BEDFORD STUYVENSANT

sh wi

6th

Ave

Av e

Ave

200

500

1000 ft LIVE-WORK TYPOLOGY ANALYSIS

St La fay ett e

oa dw

ay S

NEW YORK, NY

s nn Pe

0.5 mi

ia an y lv

PARK SLOPE

B e df ord A ve

SOUTH BROOKLYN

e Av

Hou sto nS

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

VIEW OF LOWER LEVEL

VIEW FROM STREET VIEW OF LOWER LEVEL

CHAPTER 1: CASE STUDIES

LIVE-WORK BUILDING

LIVE-WORK APARTMENT

BEDROOM

LIBRARY BEDROOM

LIBRARY

GREAT ROOM GREAT ROOM

LIVE AREA WORK AREA

MASTER BEDROOM

LIVE AREA WORK AREA

WORK WORK

WORK WORK UTILITY ROOM

W.I.C.

UTILITY ROOM

ENTRY LEVEL

FLOOR PLAN - 2ND FLOOR UNIT

LIVE-WORK TYPOLOGY ANALYSIS

UPPER LEVEL

LIVE-WORK APARTMENT LIVE-WORK BUILDING

Common Attributes: • Adaptive reuse building with a portion of the building converted to residential, therefore work space typically used as amenity space • Buildings that have floor plates that are less desirable • Developer/owner looking to seed entrepreneurial/startup market Target Markets: • Creative sector • Tech flex space • Artisan space • Commercial kitchen (light manufacturing) • Usually market-rate housing

Case Studies Factory 63 - Boston, MA

The Mercantile Building - Providence, RI

Examples Considered as Case Studies (see Appendix) •

Falcon Art Community - Portland, OR

INNOVATION DISTRICT

FLEXIBLE BUILDING

A live-work building contains shared workspace for residents dedicated to a common type of work or industry.

LIVE NEAR PLANNING

LIVE-WORK MIXED-USE

TYPOLOGY: LIVE-WORK BUILDING

CHAPTER 1: CASE STUDIES

L L L

L L

E RE

COMMON FLOOR

COMMON CORE

FIGURE 3.1-1 - METHODOLOGY DIAGRAM 17

LIVE-WORK TYPOLOGY ANALYSIS

FACTORY 63 - BOSTON, MA L L

LIVE-WORK APARTMENT

CASE STUDY: LIVE-WORK BUILDING

Factory 63 is a 6-story warehouse originally built in 1908 that was redeveloped into apartments. The property is located in the Fort Point Channel historic district of South Boston immediately south of the Boston CBD. It has two types of apartments, live-work and live only, which offer common work space on the ground floor.

LIVE-WORK MIXED-USE FLEXIBLE BUILDING LIVE NEAR PLANNING INNOVATION DISTRICT

LIVE-WORK BUILDING

L ET

LIVE-WORK BUILDING COMMON FLOOR

Site Context:

Old waterfront manufacturing district that is now a technology based innovation district

Lease/ Rental Cost

Zoning Type:

Special District - classified as a Planned Development Area (PDA) under that Boston Zoning Code, which is an overlay zoning district that permits residential and certain commercial uses

Construction Type:

Developer:

Target Market:

Private developer/operator – Gerding Edlen: a real estate investment and development firm that focuses on urban infill, office, apartment and mixed-use properties The live-work apartments in this building are intended for artists, but also offer “innovation apartments” that are intended to attract technology workers from nearby companies $2,400 for a studio, $3,000 for a one

CHAPTER 1: CASE STUDIES

Construction Cost: Development Incentives: Size: FAR: Number of Dwelling Units:

bedroom, and $4,300 for a two bedroom Adaptive reuse $343/sf Historic rehabilitation tax credits – 3 credits received at $200,000 each 35,000 sf building 5.05 38 apartments with shared workspace for artist and technology workers

CHARLESTOWN

CAMBRIDGE 90

FORT POINT

rt P

oin

BostonLogan International Airport

tC ha nn

FINANCIAL DISTRICT

1 mi

BOSTON, MA

Fort

Poin

etts chus

Mass

200

500

nel Chan

1000 ft LIVE-WORK TYPOLOGY ANALYSIS

Tunn

pike

Tum

LIVE-WORK APARTMENT LIVE-WORK BUILDING

GROUND FLOOR SHARED WORK SPACE

INTERIOR OF A STUDIO FOR TECHNOLOGY WORKERS

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

GROUND FLOOR SHARED WORK SPACE

INTERIOR OF A LIVE-WORK APARTMENT

EXTERIOR VIEW CHAPTER 1: CASE STUDIES

LIVE/WORK LIVE/WORK UNITUNIT #5 #5 LIVE/WORK LIVE/WORK UNITUNIT #4 #4

LIVE/WORK LIVE/WORK UNITUNIT #3 #3

LIVE/WORK LIVE/WORK UNITUNIT #2 #2

LIVE/WORK LIVE/WORK UNITUNIT #1 #1

WORK WORK SPACE SPACE

LIVE-WORK UNIT LIVE-WORK UNIT

GROUND GROUND FLOOR FLOOR PLAN PLAN - SHARED - SHARED WORK WORK SPACE SPACE GROUND FLOOR PLAN - SHARED WORK SPACE

LIVE-WORK TYPOLOGY ANALYSIS

TYPICAL TYPICAL FLOOR FLOOR PLAN PLAN - ARTIST - ARTIST LIVE/WORK LIVE/WORK APARTMENTS APARTMENTS TYPICAL FLOOR PLAN - ARTIST LIVE-WORK APARTMENTS

THE MERCANTILE BLOCK - PROVIDENCE, RI L L

LIVE-WORK APARTMENT

CASE STUDY: LIVE-WORK BUILDING

The Mercantile Block is owned by AS220: an artist-run organization committed to providing a forum for the arts. This 4-story plus basement building “presents a tremendous opportunity to provide still more spaces for artists to live, work and create in Providence” and reinforces the city’s reputation as a creative hub.

LIVE-WORK MIXED-USE FLEXIBLE BUILDING

LIVE-WORK BUILDING COMMON FLOOR

Site Context:

Existing commercial building in Downcity Providence

Development Incentives:

Federal and State Historic Tax Credits and affordable housing subsidies

Zoning Type:

Mixed-use

Size:

52,000 sf

Developer:

AS220: a non-profit organization

FAR:

5.01

Target Market:

Artists and non-profit organization

Number of Dwelling Units:

22 units of affordable and market-rate apartments for artists and 11 work studios and offices

Lease/ Rental Cost $ 1,400/ month for 1,088 sf Construction Type: Adaptive reuse

INNOVATION DISTRICT

LIVE NEAR PLANNING

LIVE-WORK BUILDING

L ET

CHAPTER 1: CASE STUDIES

Mem

l oria

Blvd

COLLEGE HILL Rhode Island State House DOWNCITY JEWELRY DISTRICT

195

i ov Pr

FEDERAL HILL

Cit

ar nd ou B y

n de R ce r ive

1 mi

o gt

PROVIDENCE, RI

200

500

1000 ft LIVE-WORK TYPOLOGY ANALYSIS

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE DANCE STUDIO LAB WORKSHOP

EXTERIOR VIEW ARTIST LIVE SPACE

CHAPTER 1: CASE STUDIES

LIVE-WORK BUILDING

LIVE-WORK APARTMENT

LIVE AREA WORK AREA TYPICAL FLOOR PLANS 25

LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE FLEXIBLE BUILDING LIVE NEAR PLANNING INNOVATION DISTRICT

TYPOLOGY: LIVE-WORK MIXED-USE A live-work mixed-use building has residential units and various shared workspaces for more than one work sector.

Common Attributes: • Adaptive reuse building in a challenged market-place. In a weak market, developers/ operators position the building for the entrepreneurial/startup market sector. Target Markets: • Weak residential rental market • Short-term income for ‘mothballed’ properties • Creative sector • Office based artists • Small business enterprises (across all sectors) • Entrepreneurs • Startup businesses • Professionals

Case Studies WeLive - Crystal City, VA

Castle Braid - Bushwick, NY

Examples Considered as Case Studies (see Appendix) • •

250 High Street - City of Columbus, OH Live-work Artists’ Housing - Mount Rainier, MD

CHAPTER 1: CASE STUDIES

L L

R EU EN PR ER

L T EN

L L

OR ST

OR ST E

OR ST

R ST

L L

OR ST

L S

TI AR

R TO BA

KOR E W PAC S

R TO BA

CLUSTERED

MIXED

FIGURE 3.1-1 - METHODOLOGY DIAGRAM 27

LIVE-WORK TYPOLOGY ANALYSIS

WELIVE - CRYSTAL CITY ARLINGTON, VA

L L

S UR NE RE RP

LIVE-WORK APARTMENT

L L

TE EN

WeLive is being developed by the team that created WeWork: a startup company that creates and manages co-work spaces. Here, the goal is to create a live-work project in which residents can share common work areas. Each residential floor contains a shared work space due to the building’s deep floor plate and its commercial core arrangement.

L L

TI AR ST S

LIVE-WORK BUILDING

CASE STUDY: LIVE-WORK MIXED-USE

LIVE-WORK MIXED-USE FLEXIBLE BUILDING

LIVE-WORK MIXED-USE MIXED

Site Context:

Mid-rise neighborhood of residential and commercial office buildings

Zoning Type:

Mixed-use district that permits both commercial and residential uses. This building is classified as a residential building.

Developer:

Developer/owner – Vorando: the largest landlord in Crystal City

Target Market:

Younger tech workers in their 20s

Lease/ Rental Cost: $24.77/ sf (calculation includes amenity spaces), about $10 less than other area office space

Construction Type:

Adaptive reuse

Construction Cost:

$242/ sf

Development Incentives:

None

Size:

165,000 sf building

FAR:

2.14

Number of Dwelling Units:

248 units: 208 studios, 22 three-bedrooms, and 20 four-bedrooms

INNOVATION DISTRICT

LIVE NEAR PLANNING

CHAPTER 1: CASE STUDIES

270

MARYLAND

nd ar

95 495

295

Po tomac Riv

495

S Clark St

Ronald Reagen National Airport

395

is Hwy

Bo u Ci ty

The Pentagon VIRGINIA

20th St S

The Capitol 395

Crysstal City Courtyard Green Park

1.5 mi

ARLINGTON, VA

Cheerios Park

200

500

1000 ft LIVE-WORK TYPOLOGY ANALYSIS

George Washington Memorial Pkwy

WASHINGTON

Jefferson Dav

GEORGETOWN

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE COMMON SPACE - WORK STATION

COMMON SPACE - MEETING AREA EXTERIOR VIEW

CHAPTER 1: CASE STUDIES

LIVE-WORK BUILDING

LIVE-WORK APARTMENT

UNITS

UNITS UNITS

FRONT PORCH LANDING STRIP

FRONT PORCH

ENTERTAIN / RELAX

FRONT PORCH STRIP LANDING COOKING / EATING ENTERTAIN / RELAX

LANDING STRIP CLEANSING / STORAGE

UNIT COMPONENT DIAGRAM UNIT COMPONENT DIAGRAM

UNIT COMPONENT DIAGRAM

COMMUNAL SPACES

O COOKING / EATING ENTERTAIN / RELAX S MP SLEEPING NT CO CLEANSING COOKING / EATING / STORAGE NE O S P M NT SLEEPING CLEANSING / STORAGE NE CO PO M SLEEPING CO

COMMUNAL SPACES COMMUNAL SPACES

BLOCK / LOCAL

TYPICAL FLOOR COMPOSITION TYPICAL FLOOR COMPOSITION

BLOCK / LOCAL

TYPICAL FLOOR COMPOSITION

UNIT COMPONENT DIAGRAM

TYPICAL FLOOR COMPOSITION

4 BEDROOM

4 BEDROOM UNIT #1 UNIT #1 4 BEDROOM STUDIO UNIT #1 UNIT #3

STUDIO

STUDIO UNIT #2

STUDIO

STUDIO MAX

4 BEDROOM STUDIO UNIT #3STUDIO UNIT #5 STUDIO STUDIO UNITSTUDIO #7 UNITMAX #9 UNIT #1 UNIT #1 UNIT #3 UNIT #5 UNIT #7 UNIT #9 UNIT #1 4 BEDROOM STUDIO STUDIO STUDIO STUDIO MAX UNIT #1 UNIT #5 UNIT #7 UNIT #9 UNIT #1

STUDIO

STUDIO STUDIO STUDIO STUDIO UNIT #2 UNIT #4 UNIT #6 UNIT #2 UNIT #4 UNIT #6 UNIT #8 STUDIO STUDIO STUDIO UNIT #4 UNIT #6 UNIT #8

4 BEDROOM UNIT #1

STUDIO UNIT #8

STUDIO UNIT #18 STUDIO UNIT #19

STUDIO UNIT #18

STUDIO UNIT #19

RESIDENTIAL COMMON SPACE

PUBLIC RESIDENTIAL COMMON SPACE PUBLIC UNITS PUBLIC UNITS SERVICE CORE PROGRAMMATIC DIAGRAM PROGRAMMATIC SECTIONSECTION DIAGRAM PROGRAMMATIC SECTION DIAGRAM PROGRAMMATIC SECTION DIAGRAM

UNITS SERVICE

SERVICE CORE

STUDIO STUDIO STUDIO STUDIO UNIT #10 STUDIO UNIT #12 UNIT #14 UNIT #16 STUDIO STUDIO STUDIO 3 BEDROOM 4 BEDROOM STUDIO STUDIO STUDIO STUDIO UNIT #10 UNIT #12 UNIT #14 UNIT #16 STUDIO MAX STUDIO STUDIO STUDIO STUDIO UNIT 3#2BEDROOM UNIT #2 UNIT #10 UNIT #12 UNIT #14 UNIT #16 UNIT #2 UNIT #11 STUDIO UNIT #13 UNIT #15 UNIT #17 3 BEDROOM 4 BEDROOM STUDIO MAX STUDIO STUDIO STUDIO UNIT STUDIO MAX#2 STUDIO STUDIO STUDIO STUDIO UNIT #2 UNIT #2 UNIT #2 UNIT #11 UNIT #13 UNIT #15 UNIT #17 UNIT #2 UNIT #11 UNIT #13 UNIT #15 UNIT #17

CORE

TYPICAL FLOOR PLAN PLAN TYPICAL FLOOR

TYPICAL FLOOR PLAN TYPICAL FLOOR PLAN

LIVE-WORK TYPOLOGY ANALYSIS

4 BEDROOM UNIT #2

LIVE-WORK APARTMENT

CASE STUDY: LIVE-WORK MIXED-USE L

L L

This is a residential building with integrated work spaces. The building amenities include a rooftop park, recording studio, wood shop, gym, computer lab, tuned piano, game room, yoga room, screening room and free video and camera equipment.

UD ST

OR ST E OR ST

E OR ST

OR ST

IN R TO BA

LIVE-WORK BUILDING

CASTLE BRAID - BUSHWICK, NEW YORK

R TO BA

Site Context:

Bushwick, NY

Zoning Type:

Residential (R6)

Developer:

Mayer Schwartz

Target Market:

Young professionals in the creative sector

Lease/ Rental Cost:

One-, two- and three-bedrooms starting at $1,650, $2,200 and $3,000

Construction Type:

Adaptive reuse

Size:

153,909 sf/ 6 story

FAR:

2.87

Number of Dwelling Units:

143-unit

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

KOR E W PAC S

LIVE-WORK MIXED-USE CLUSTERED

CHAPTER 1: CASE STUDIES

495

Bro

ad wa y

Green Central Knoll Park

WILLIAMSBURG

Metropolitan Av e

M y r t le BUSHWICK

278

sh wi

Ferni Playground

Av e

Ce Ave

tm er

NEW YORK, NY

200

500

lA ve

gr ee

Tro u

s nn Pe

0.5 mi

ia an y lv

PARK SLOPE

B e df ord A ve

BEDFORD STUYVENSANT SOUTH BROOKLYN

e Av

nA ve

M Central Ave

Av e

1000 ft LIVE-WORK TYPOLOGY ANALYSIS

ve Myrtle A

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE VIEW OF COURTYARD

VIEW OF ROOFTOP DOG RUN EXTERIOR VIEW

CHAPTER 1: CASE STUDIES

LIVE-WORK BUILDING

LIVE-WORK APARTMENT

2BR #1

2BR #5

1BR #1

1BR #2

1BR #5

1BR #3

1BR #6

2BR #2

2BR #3

2BR #9

2BR #13

2BR #6

2BR #10

2BR #14

2BR #7

2BR #11

2BR #15

2BR #8 2BR #1

1BR #4

3BR #1

LIVE UNIT

1BR #9

2BR #4

1BR 2BR 3BR

TYPICAL FLOOR PLAN 35

LIVE-WORK TYPOLOGY ANALYSIS

1BR #7 1BR #8

2BR #12

2BR #17

2BR #18

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE FLEXIBLE BUILDING

A flexible building is an emerging typology in which a building’s core and shell are designed to allow a developer to respond to market demand for either commercial or residential program at the last possible moment before final regulatory approval.

Case Studies Soho Fuxing Plaza - Shanghai, China

Common Attributes: • High-design building that accepts the additional construction cost to accommodate flexibility (facade, building system, structure, and layout) • High-end mixed-use urban neighborhood with strong real estate market Target Markets: • For owners that foresee a changing marketplace and who want to maximize income potential over the lifetime of a property

Examples Considered as Case Studies (see Appendix) •

Brunnenstraße 9 - Berlin, Germany

INNOVATION DISTRICT

LIVE NEAR PLANNING

TYPOLOGY: FLEXIBLE BUILDING

CHAPTER 1: CASE STUDIES

L/W

SERVICE CORE LIVE-WORK VENTILATION SHAFT

STACKED FIGURE 3.1-1 - METHODOLOGY DIAGRAM 37

LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT

CASE STUDY: FLEXIBLE BUILDING SOHO FUXING PLAZA - SHANGHAI, CHINA L/W

LIVE-WORK BUILDING

L/W

Soho China develops buildings capable of accomodating both commercial and residential depending on market-place drivers. The Soho Fuxing Plaza is currently leased to only commercial users.

L/W

FLEXIBLE BUILDING STACKED

Site Context:

This development is located in a mid-rise district

Zoning Type:

Special District - a mixed-use district

Developer:

Developer/operator â&#x20AC;&#x201C; Soho China: the largest commercial office developer in China

Target Market:

Companies and residents that need to be near the city center

Development Incentives:

None

Size:

925,696 sf of development within multiple buildings

Number of Dwelling Units:

Currently none

Construction Type: New construction Construction Cost: $67.27/sf (NYC equivalent in hard cost of $623/sf)

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

L/W

CHAPTER 1: CASE STUDIES

ui Rd

5 mi

SHANGHAI, CHINA

200

ei R

Hef

500

1000 ft LIVE-WORK TYPOLOGY ANALYSIS

Madang

Dansh

HANGZHOU BAY

dle

id ng M

Fux

-Sout

Rive r

North

Huan g p u

h Ele

MINHANG

vated

Shanghai Pudong International Airport

PUTUO

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING BIRDâ&#x20AC;&#x2122;S EYE VIEW

VIEW OF ENTRANCE VIEW OF PUBLIC PLAZA

CHAPTER 1: CASE STUDIES

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

LIVE-WORK APARTMENT

RENDERING OF BUILDING COMPLEX 41

LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE

Common Attributes: • A defined geographic area anchored by an employer or community facility • Underutilized development parcels • Presents an opportunity for a nodal model of development.

INNOVATION DISTRICT

LIVE NEAR PLANNING

Live near planing is a district strategy that is utilized to promote economic revitalization and a walkable commute by offering public and/or private incentives for people to live near their place of work.

FLEXIBLE BUILDING

TYPOLOGY: LIVE NEAR PLANNING

Target Markets: • Home ownership within a district • Affordable housing • Large institutions or manufacturers who benefit from proximity between live and work for employees • Existing businesses seeking to retain employees • Municipality seeking to relieve transportation system stress

Case Studies Live Near Your Work Program - Baltimore, MD

Downtown Project - Downtown Las Vegas, NV

Examples Considered as Case Studies (see Appendix) • •

Hunter’s Point Shipyard - San Francisco, CA Anton Menlo - Menlo Park, CA

CHAPTER 1: CASE STUDIES

• •

Live Near Work Program - Detroit, MI Amazon Headquarter - Seattle, WA

FUNDING

GRANTS FROM EMPLOYER

GRANTS FIGURE 3.1-1 - METHODOLOGY DIAGRAM 43

STRATEGY LIVE-WORK TYPOLOGY ANALYSIS

GRANTS

FUNDING

LIVE-WORK APARTMENT

Live Near Your Work Program - Baltimore, MD GRANTS FROM EMPLOYER

$$Under this program, Johns Hopkins, Maryland’s largest private employer with 45,000 employees offers up to $17,000 to each employee towards

GRANTS home

purchase as an added benefit and as a tool to retain their employee base. This program is a partnership between participating employers and the City of Baltimore designed to encourage homeownership near places of employment. The program is available to first-time home buyers. Other participating employers have the right to include additional a requirements beyond the city’s baseline, such as setting the boundaries of the areas that benefit from the incentive.

GRANTS

LIVE NEAR PLANNING STRATEGY

Site Context:

City of Baltimore

Zoning Type:

Residential

Grand Provider:

City of Baltimore and all businesses within the city limits

Ownership:

Private homeowners

Target Market:

Employees of participating companies

Construction Type: Existing residential buildings or newly constructed buildings

Program Incentives:

This incentive gives grants to homeowners ($1000 to $2,500 from the city and an equal amount or more from an employer) to live near their place of work. Employers set the distance limits for their share of the grant contribution.

Size:

All privately held homes are covered under this program

Number of Companies:

80 companies are currently participating in this program, including Johns Hopkins Hospital

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

FUNDING

CASE STUDY: LIVE NEAR PLANNING

CHAPTER 1: CASE STUDIES

BROADWAY EAST 895

CHERRY HILL

195

695

2 mi

ne un

Ch an

Fo rt

int

Cit y

BALTIMORE, MD

JOHNS HOPKINS HOSPITAL

Fort McHenry Channel

JOHNS HOPKINS BENEFIT BOUNDARY

3300

10000

20000 ft LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

VIEW OF JOHNS HOPKINS HOSPITAL

VIEW OF JOHNS HOPKINS UNIVERSITY CAMPUS

VIEW OF DOWNTOWN BALTIMORE SKYLINE CHAPTER 1: CASE STUDIES

LIVE NEAR YOUR WORK - GRANT AMOUNTS • • • •

Effective 7/1/2014 A1 - $ 23,000 Effective 7/1/2014 A2 - $ 36,000 B1 & B2 Target Areas - $ 10,000 C Target Area - $ 6,000

•All other grants within black boundary footprint - $ 5,000

INCENTIVE AREA IDENTIFIED BY JOHNS HOPKINS UNIVERSITY 47

LIVE-WORK TYPOLOGY ANALYSIS

FUNDING

LIVE-WORK APARTMENT

DOWNTOWN PROJECT - LAS VEGAS, NV GRANTS FROM EMPLOYER

$$ The Downtown Project is a group of owners and investors who support (or own) companies that are located in downtown Las Vegas by investing

GRANTS $350

million to fund real estate, small businesses, tech startups and education in the downtown area. The group was founded by Tony Hsieh, CEO of Zappos. As part of the program, Zappos has relocated its headquarters to the downtown area, bringing 1,500 employees to the district.

GRANTS

LIVE NEAR PLANNING STRATEGY

Site Context:

Downtown Las Vegas

Zoning Type:

Residential, mixed-use, retail

Ownership:

Private land owners/business owners

Target Market:

Businesses and startups interested in moving to downtown Las Vegas

Construction Type:

Existing residential buildings or newly constructed buildings

Program Incentives:

Individual businesses are invested in or operated by Downtown Project

Number of Companies:

900 employees

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

FUNDING

CASE STUDY: LIVE NEAR PLANNING

CHAPTER 1: CASE STUDIES

Ste

RANCHO OAKEY

DOWNTOWN

rt A

SYMPHONY PARK

Hw Zappos

lvd

McCarran International Airport

215

2 mi

Las Vegas Fwy

DOWNTOWN LAS VEGAS

LAS VEGAS, NV

589

MAIN AREA OF ACTIVITY DTP OWNED/LEASED PROPERTIES

Stratosphere Hotel Casino

1000

3000

5000 ft LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

VIEW OF DOWNTOWN LUXURY CONDO

VIEW OF ZAPPOSâ&#x20AC;&#x2122; HEADQUARTERS

VIEW OF CONTAINER PARK, LAS VEGAS CHAPTER 1: CASE STUDIES

VIEW OF CONTAINER PARK, LAS VEGAS 51

LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE FLEXIBLE BUILDING LIVE NEAR PLANNING INNOVATION DISTRICT

TYPOLOGY: INNOVATION DISTRICT An innovation district is a defined geographic area where businesses and people are encouraged to cluster in order to share knowledge and resources. The district is planned and organized by government to bring together a market sector based community where housing, jobs, and amenities are intermixed.

Case Studies 22@ Barcelona - Barcelona, Spain

Common Attributes: • District facilitates a burgeoning startup community by offering targeted area for a market sector to develop and grow • Adaptive reuse buildings offering neighborhood character • Outside of downtown core but transit accessible • Class B or C office space available Target Markets: • Small business enterprises • Entrepreneur • Startup business • Design professional • Large tech/knowledge based business (i.e. media, bio-tech, and data) • A neighborhood that is being converted from manufacturing to a mixed-use district

South East Federal Center - Washington, DC

Examples Considered as Case Studies (see Appendix) •

Wallabout Bay, Special District - Brooklyn, NY

CHAPTER 1: CASE STUDIES

INDIRECT FUNDING

SHARED PURPOSE

FIGURE 3.1-1 - METHODOLOGY DIAGRAM 53

INDIRECT STRATEGY FUNDING LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT

INDIRECT FUNDING

22@ - BARCELONA, SPAIN

The transformation of this manufacturing district to an innovation district began around 2000. The city council managed to use the 1992 Olympic Games as a strategic tool to provide new infrastructure for the 22@ Barcelona area. Specifically a ring road was built, connecting this area with the greater metropolitan area and the airport.

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

INDIRECT FUNDING

CASE STUDY: INNOVATION DISTRICT

SHARED PURPOSE

INDIRECT FUNDING

INNOVATION DISTRICT - STRATEGY

Construction Cost:

$204 million (infrastructure, community facility)

Development Incentives:

FAR increase: a new policy for the district allowed private landowners to exchange old industrial land for air rights, and thus increase their property values. The city also mandated that 30 percent of the land would be donated to the district, and in exchange, the landowners could â&#x20AC;&#x153;build upâ&#x20AC;?- that is, rebuild with a greater number of stories than the original structures. Therefore, owners give up site area for public infrastructure and amenities but they retain their original development rights.

A mix of private and public parcels

Size:

Information and computer technology, media, medical-tech, energy, and design industry companies

21,312,165.6 sf (489.26 acres), which covers 115 blocks

Number of Dwelling Units:

4,614 Existing, 4,000 new state-subsidized, residential units with a target of 25% affordable

Number of New Jobs:

130,000 (as of 2012)

Number of Companies

7,000 (as of 2010)

Site Context:

Former industrial waterfront district that is now an innovation district with a focus on knowledge-based industries

Zoning Type:

Mixed-use district - rezoned from a manufacturing district to a mixed-use district. The district can support residential, manufacturing (tech-based and light), commercial, and community facility development

Developer:

Each parcel is privately owned and developed separately and the city is developing the public amenities: open-space and infrastructure

Ownership: Target Market:

Construction Type: Adaptive reuse, new construction, and new infrastructure

CHAPTER 1: CASE STUDIES

including

SARRIA-SANT GERVASI

SANT MARTI

EIXAMPLE

nal

EL POBLENOU

iago

D Av.

Aeroport de Barcelona-El Prat 2 mi

BARCELONA, SPAIN

1000

3000

6000 ft LIVE-WORK TYPOLOGY ANALYSIS

Ba le

b am

R La CIUTAT VELLA

Se a

LA VILLA OLYMPICA DEL POBLENOU

LIVE-WORK APARTMENT LIVE-WORK BUILDING LIVE-WORK MIXED-USE FLEXIBLE BUILDING LIVE NEAR PLANNING INNOVATION DISTRICT

VIEW OF INNOVATION DISTRICT WITHIN EXISTING URBAN CONTEXT

VIEW OF LANDMARK BUILDING CHAPTER 1: CASE STUDIES

MAP OF 22@ BARCELONA - RED DOTTED AREA 57

LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT

INDIRECT FUNDING

SOUTH EAST FEDERAL CENTER - WASHINGTON, DC

This mixed-use development will include 3.3 million sf of residential, 1.8 million sf of office, and 0.4 million sf of retail, creating a true mixed-use community when fully realized. Six existing historic structures will be renovated into retail, residential or office uses. Designed to improve the ecosystem, the paved brownfield site will be remediated. In addition to vegetated roofs that will appear above many of the commercial buildings, stormwater will be collected, cleaned and managed through low-impact development technologies flanking the streets that run through the site. The 5-acre waterfront park is extensively landscaped, and bio-retention features are employed. SHARED PURPOSE

INDIRECT FUNDING

INNOVATION DISTRICT - STRATEGY

Site Context:

Former Washington Navy Yard with historic structures and a brownfield site

Zoning Type:

Mixed-use

Developer:

Forest City Washington Inc.

Ownership:

Federal property

Target Market:

Workers in the district

Construction Type: Adaptive reuse, new construction, and new infrastructure Development Incentives:

The enactment of the Southeast Federal Center Public-Private Development Act of

INNOVATION DISTRICT

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

INDIRECT FUNDING

CASE STUDY: INNOVATION DISTRICT

CHAPTER 1: CASE STUDIES

2000, Public Law 106-407, provided the GSA special authority to adopt innovative, flexible approaches for working with the private sector to develop the South East Federal Center site Size:

Total 55.3-acre (residential 3.2million sf, 2million sf for commercial, retail, and cultural space, 5-acre waterfront park)

Number of Dwelling Units:

2,800 residential units

Number of New Jobs:

7,000 employees will be relocated to the new development

Expected Tax Revenue:

$30 million from first two projects at the Southeast Federal Center

270

NATIONAL MALL MARYLAND

GEORGETOWN

WASHINGTON

CAPITOL HILL

Bo u

nd ar

The Capitol Ci ty

395

Ronald Reagen National Airport

VIRGINIA 395

95 495

295

Po tomac Riv

495

1.5 mi

co sti aR ive r na

Washington Channel

WASHINGTON, DC

1000

3000

6000 ft LIVE-WORK TYPOLOGY ANALYSIS

M M

Rain

Yards Site

Potomac River

METRO SUBWAY

WATER TAXI

BIKESHARE

BIKESHARE STATION STATION

River 0

N N

400’ 400’

ECO-SYSTEM DIAGRAM CAPPER/CARROLLSBURG CAPPER/CARROLLSBURG NEIGHBORHOOD NEIGHBORHOOD

M STREET COMMERCIAL CORRIDOR COMMERCIAL CORRIDOR

US US DEPARTMENT DEPARTMENTOF OF TRANSPORTATION TRANSPORTATION HEADQUARTERS HEADQUARTERS

INNOVATION DISTRICT

MULTIPLE BUS LINES

ANACOSTIA RIVERWALK TRAIL MULTIPLE BUS LINES ANACOSTIA TRAIL DEDICATEDRIVERWALK BICYCLE PATH DEDICATED BICYCLELINE PATH PLANNED TROLLEY Anacostia PLANNED TROLLEY LINE PROPOSED LIGHT RAIL PROPOSED LIGHT RAIL

TRANSPORTATION NETWORK DIAGRAM

LIVE NEAR PLANNING

FLEXIBLE BUILDING

LIVE-WORK MIXED-USE

LIVE-WORK BUILDING

LIVE-WORK APARTMENT

PERSPECTIVE VIEW OF MASTER PLAN

I ST

O AC

AL W R E

AL W ER

WASHINGTON WASHINGTON NAVY NAVYYARD YARD

Yards Site

A TR

RESIDENTIAL Potomac River RETAIL OFFICE RESIDENTIAL HOSPITALITY RETAIL OPEN SPACE PRIMARY OFFICE / ENTERTAINMENT CULTURAL HOSPITALITY SITE BOUNDARY

PRIMARY OPEN SPACE CULTURAL / ENTERTAINMENT SITE BOUNDARY

CHAPTER 1: CASE STUDIES

Anacostia River VIEW OF SEDIMENT FROM STORMWATER RUN-OFF IN RIVER 60

RENDERING: VIEW OF THE MASTER PLAN 61

LIVE-WORK TYPOLOGY ANALYSIS

CHAPTER 2: LIVE-WORK TYPOLOGIES IN NYC

OVERVIEW As a complement to the case studies in Chapter 1, Chapter 2 examines how each of the six live-work typologies relate to New York Cityâ&#x20AC;&#x2122;s economy; market sectors including particular industries and jobs; real estate, land use regulations, and policy. This Chapter also includes a basic real estate analysis to identify the economic elements that are conductive to each live-work typology. (Please note that due to the breath of the topic and the wide variances between the different neighborhoods of the City, this analysis is at a high level).

CHAPTER 2: LIVE-WORK TYPOLOGIES IN NYC

FIGURE 2.1-1 - SOHO, NEW YORK CITY 63

LIVE-WORK TYPOLOGY ANALYSIS

LIVE-WORK APARTMENT TYPOLOGY:

HOW LIVE-WORK APARTMENTS RELATE TO NEW YORK CITY’S CURRENT REAL ESTATE AND ECONOMIC LANDSCAPE

The general economic landscape of New York City is strong and favors residential over all other types of development, which in turn limits opportunities for the live-work apartment typology. There are however, areas outside of the commercial core and the strongest residential W C that are favorable to the implementation of markets in New York City live-work apartments because of their lower land prices. This makes non-residential uses more competitive. These weaker markets can be targeted with incentives that foster live-work, such as the adaptive reuse & historic preservation incentives (see chart for more).

INDUSTRIES AND JOBS THAT ARE BEST SUITED FOR LIVE-WORK APARTMENTS AND BEST PRACTICES AND TR LESSONS SLEARNED THAT CAN BE APPLIED FROM EE T OTHER CITIES

LOFT A live-work apartment contains a dwelling W C unit that combines a workspace and living KI TC quarters within a singular contiguous HE N CO RR area. ID

The industries and jobs best suited for live-work apartments include commercial and fine arts (graphic designer, photographer, artist), education (private teacher), finance (day trader, technology support), light manufacturing (artisan and craftsperson), and professional services (architect, attorney, doctor, engineer, physical therapist, and mental health worker) because all can occur within the confines of a typical apartment configuration. In other cities, such as Boston, San Diego, and San Francisco, live-work apartments thrive in areas with W C weaker land values proximate to industries that require CL and tend to be B/ CO OS R RR Ework a young, educated base. Therefore, live-work apartments are T KI ID B/ TC OR R HE N typically found on the periphery of economically strong areas and/or L/R neighboring creative hubs. This typology occurs in an ad hoc manner because the cost of operating a new business is not paramount to its success. As a result, any economic advantage will be capitalized upon, and the owner’s home becomes the small business address.

WHAT MARKET CONDITIONS ALLOW LIVE-WORK APARTMENTS TO SUCCEED? One of the primary economic conditions that allow this typology to succeed is when an abundance of small businesses are unable to sign individual commercial leases. Meeting the requirements to obtain an office lease (such as large security deposits, fiscal track records and initial capital cost) can be difficult for newly established businesses. Live-work apartments allow small businesses to begin operating in their earliest stages of development. Another market condition that fosters this typology is a weak residential market in combination with a lack of small, affordable commercial spaces. WHAT PUBLIC SECTOR INTERVENTIONS IN THE FORM OF SUBSIDY, LAND USE POLICY, ETC. IS NEEDED FOR THE LIVE-WORK APARTMENTS? In general, public sector interventions have not been used to propel the live-work apartment typology, barring the New York City Loft Law for M1-5A and M1-5B districts. This is due to the fact that individuals and small businesses operating out of their homes are not eligible for – nor have the capacity to seek – funding and incentives commonly deployed by the public sector, e.g., subsidies, land use regulations, grants, or tax policy. The tax policy associated with home offices, such as the federal tax deduction for home offices, best supports this typology.

LIVE WORK COMBINED

CHAPTER 2: LIVE-WORK TYPOLOGIES IN NYC C

LIVE-WORK BUILDING TYPOLOGY:

HOW LIVE-WORK BUILDINGS RELATE TO NEW YORK CITY’S CURRENT REAL ESTATE AND ECONOMIC LANDSCAPE

A high demand for Class ‘C’ office space, coupled with a demand for residential in New York City, may facilitate the emergence of the livework building typology. Commercial developers may see benefits from this typology as it can be easily marketed and introduced into weaker L New York City residential areas. The addition of workspaces into such L districts may spur economic growth, thereby laying the foundation for neighborhood revitalization. L

L L

L ARE BEST SUITED FOR INDUSTRIES AND JOBS THAT ET LIVE-WORK BUILDINGS LAND BEST PRACTICES RE AND ST LESSONS LEARNED THAT CAN BE APPLIED FROM L OTHER CITIES W

W ET

COMMON FLOOR A live-work mixed-use building has residential units and various shared workspaces for a mix of work types from more than one industry.

The live-work building typology may be implemented effectively in several different settings. For example, an area that has successfully supported the live-work apartment typology may be a prime candidate for live-work buildings. Because the apartment model demonstrates a demand for live-work, the risks associated with a building model becomes quantifiable. A second path of implementation involves clustering live-work buildings around a creative or thought ‘anchor’. Examples of anchors include, but are not limited to, universities such as MIT or Stanford, and tech giants such as Apple. It should be noted that both of these examples are able to draw from an economic pool of businesses that are unable to afford the minimal financial requirements for a commercial lease.

LIVE-WORK TYPOLOGY ANALYSIS

WHAT MARKET CONDITIONS ALLOW LIVE-WORK BUILDINGS TO SUCCEED? The live-work building typology favors light industry, the arts, and the tech industry, all of which are staples of the New York City economy and culture. In other cities, this typology is generally found on the periphery of strong economic centers and creative hubs, as real estate costs are significantly reduced and the eclectic lifestyle may be better suited for the younger work force that these industries are trying to attract. WHAT PUBLIC SECTOR INTERVENTIONS IN THE FORM OF SUBSIDY, LAND USE POLICY, ETC. IS NEEDED FOR THE LIVE-WORK BUILDING? The market condition that supports a live-work building model is best characterized by an unmet demand for specialized workspace and Class ‘C’ office space. Furthermore, because live-work buildings are typically on the fringe of strong market areas, incentive programs similar to quality housing bonuses may be utilized to attract the requisite funding for this type of development. It is also worth noting that the risk of development is lowered because this typology appeals to a wider audience of potential occupants – those looking for more living space with distinctive building amenities, as well as, those seeking a workspace.

LIVE-WORK MIXED-USE TYPOLOGY: L

HOW LIVE-WORK MIXED-USE TYPOLOGY RELATES L L TO NEW YORK CITYâ&#x20AC;&#x2122;S CURRENT REAL ESTATE AND L ECONOMIC LANDSCAPE L

$ L

L L L L

I UD ST

E OR ST OR ST

E E

OR ST

The mixed-use typology is a derivation of the live-work building andL apartment typologies. As developers attempt to capitalize on a growing market, which has demonstrated demand through the proliferation of live-work apartments and buildings, live-work mixed-use offers a less risky means to meet this market pressure by L appealing to a wider portion of potential occupants. Implementation of L L the live-work mixed-use typology in New York City will rely heavily on L highlighting to developers the favorable market conditions for live-work L L spaces in targeted areas. S UR NE RE RP

TE EN

live-work L

OR ST

The primary market conditions that allow the live-work mixed-use typology to succeed are similar to those of the live-work building: a demand for specialized workspace that is affordable; a need for housing; and proximity to an industry hub. Unlike live-work buildings, which serve a single work sector, live-work mixed-use may be implemented in areas where the work type trending is ambiguous because this typology is not targeted to a single industry. While a clustering of live-work apartments in a given neighborhood is not a prerequisite for the success of live-work mixed-use, the clustering indeed proves that there is a demand for such spaces, hence mitigating development risk.

TI AR

INDUSTRIES AND JOBS THAT ARE BEST SUITED FOR LIVE-WORK MIXED-USE DEVELOPMENTS AND BEST PRACTICES AND LESSONS LEARNED THAT CAN BE APPLIED FROM OTHER CITIES S

R TO BA

WHAT MARKET CONDITIONS ALLOW LIVE-WORK MIXED-USE DEVELOPMENTS TO SUCCEED?

KOR E W PAC S

R TO BA

CLUSTERED A live-work mixed-use building has residential units and various shared workspaces for a mix of work types from more than one industry.

The added advantage for developers of the live-work mixed-use over the live-work building typology is the potential to capture a larger market share by attracting a diverse pool of different types of workers. These include, but are not limited to artisans and light manufacturers, small business enterprises across all sectors, office based workers and professionals. Live-work mixed-use developments, as seen in WeLive in Crystal City, Virginia mitigate owner/operator fiscal exposure by allowing mothballed properties to generate short-term income during a market downturn.

CHAPTER 2: LIVE-WORK TYPOLOGIES IN NYC

WHAT PUBLIC SECTOR INTERVENTIONS IN THE FORM OF SUBSIDY, LAND USE POLICY, ETC. IS NEEDED FOR THE LIVE-WORK MIXED-USE DEVELOPMENTS? Because live-work mixed-use occurs in weak residential markets and is not targeted to a particular industry, incentives should be focused on encouraging live-work housing development or providing zoning bonuses for certain workspace amenities.

FLEXIBLE BUILDING TYPOLOGY:

HOW FLEXIBLE BUILDINGS RELATE TO NEW YORK CITY’S CURRENT REAL ESTATE AND ECONOMIC LANDSCAPE

The flexible building typology is not feasible for the New York City economic landscape from a market standpoint due to funding and current regulatory requirements.

L/W

INDUSTRIES AND JOBS THAT ARE BEST SUITED FOR FLEXIBLE BUILDINGS AND BEST PRACTICES AND LESSONS LEARNED THAT CAN BE APPLIED FROM OTHER CITIES

L/W

To initiate a flexible building typology in New York City, changes to financial models must be made to allow loans on development that are not classified by use. The regulations concerning the Certificate of Occupancy would also need to be altered. Due to the nature of the flexible building typology, the use of a building is not known until the actual transaction between the developer and owner (or user) is completed.

STACKED A flexible building is an emerging typology in which a building’s core and shell area is designed to allow a developer to respond to market demand for either work or living spaces at the last possible moment before final regulatory approval.

SERVICE CORE LIVE-WORK VENTILATION SHAFT

LIVE-WORK TYPOLOGY ANALYSIS

WHAT MARKET CONDITIONS ALLOW FLEXIBLE BUILDING TO SUCCEED? The types of industries that benefit from this typology include day trader, established businesses, and tech support. As other typologies can easily accommodate the same industries/jobs, the flexible building does not offer any particular advantages in terms of workspace. That is not to say that this typology does not have its use. For example, the alteration of regulatory practices in Shanghai to allow flexible buildings demonstrates that there are markets that value this typology, in particular, dynamic or unpredictable markets. WHAT PUBLIC SECTOR INTERVENTIONS IN THE FORM OF SUBSIDY, LAND USE POLICY, ETC. IS NEEDED FOR FLEXIBLE BUILDINGS? The flexible building typology requires both a strong residential and commercial market, with high land costs and interest rates fueling them. In order for them to be feasible in New York City, changes must be made to banking and civil regulations to allow greater flexibility. Currently, developers must declare the use of a building before acquiring financing. Moreover, if the development is residential, they must declare the project with the state of New York. Once regulatory hurdles are removed – in particular, those related to financing – this typology could find footing in the New York City market.

LIVE-NEAR PLANNING TYPOLOGY: FUNDING

FUNDING

GRANTS FROM EMPLOYER

GRANTS

STRATEGY Live near planing is a district strategy that is utilized to promote economic revitalization and a walkable commute by offering incentives for people to live near their place of work, or by an employer investing heavily in a community that surrounds their business.

HOW LIVE NEAR PLANNING RELATES TO NEW YORK CITY’S CURRENT REAL ESTATE AND ECONOMIC LANDSCAPE

Live near planning typically involves the intent to revitalize a weak residential market. Therefore, this typology is only feasible in New York City neighborhoods that are outside of strong market areas and require incentives to bolster investment and homeownership. The target areas must be within walking distance from large anchor employers or $$clusters of employers. Versions of the live near planning typology are GRANTS already occurring in New York City. Columbia University, for example, has created a program dubbed ‘Work/Life’, which seeks to provide housing and other benefits for staff and faculty. INDUSTRIES AND JOBS THAT ARE BEST SUITED FOR LIVE NEAR PLANNING AND BEST PRACTICES AND LESSONS LEARNED THAT CAN BE APPLIED FROM OTHER CITIES

WHAT MARKET CONDITIONS ALLOW LIVE NEAR PLANNING TO SUCCEED? The most important economic element in the live near planning typology is that it requires a business or institution to have sufficient capital to invest in their local community. This, coupled with a weak residential real estate market, allows for a transformative impact to occur. WHAT PUBLIC SECTOR INTERVENTIONS IN THE FORM OF SUBSIDY, LAND USE POLICY, ETC. IS NEEDED FOR LIVE NEAR PLANNING? New York City can target weak markets that have existing or planned anchor employers, and can use homeownership financing incentives and down-payment grants to promote live near planning.

Live near planning is best suited for industries trying to attract and retain workers in a very competitive labor market such as nursing or education. These industries use live near planning programs as an added employee benefit. Cities such as Baltimore have used ‘employer match’ programs to revitalize their downtowns by providing grants for home purchases close to employees’ places of work. This is a best practice that shares cost burden and leverages the collective strength of the public and private sectors. In other examples, such as the Downtown Project in Las Vegas, most of the capital is provided by private companies who fund, co-own or operate small businesses and tech companies in downtown Las Vegas. The Downtown Project has begun the reinvestment process of downtown and has currently resulted in the creation of over 900 jobs.

CHAPTER 2: LIVE-WORK TYPOLOGIES IN NYC

INNOVATION DISTRICT TYPOLOGY:

INDIRECT FUNDING

New York City has a robust base of higher education institutions, a growing tech industry, life sciences, and well-established media and information sectors. This knowledge base, combined with a current demand for various classes of office space, would allow innovation districts to succeed in New York City – and in fact may propel these sectors to greater heights because it would build upon their success with bolstered public infrastructure.

SHARED PURPOSE

INDIRECT FUNDING

STRATEGY An innovation district is a defined geographic area where businesses and people are encouraged to cluster in order to share knowledge and resources. The district is planned and organized by government to bring together a market sector based community where housing, jobs, and amenities are intermixed.

HOW INNOVATION DISTRICTS RELATE TO NEW YORK CITY’S CURRENT REAL ESTATE AND ECONOMIC LANDSCAPE

INDUSTRIES AND JOBS THAT ARE BEST SUITED FOR INNOVATION DISTRICTS AND BEST PRACTICES AND LESSONS LEARNED THAT CAN BE APPLIED FROM OTHER CITIES Creating an innovation district is a multifaceted undertaking that requires civic will, stakeholder consensus, and vision. An example of an ongoing effort to develop an innovation district is the Brooklyn Tech Triangle. To promote this endeavor, the City of New York rezoned targeted areas to support vibrant growth, created amenities such as Brooklyn Bridge Park, and revitalized the Brooklyn Navy Yard. Without more meaningful investment in the public realm, however, the full potential of an innovation district will be limited, given that skilled workers and sophisticated infrastructure and systems are the twin needs to cultivate this typology. The types of industries and jobs that generally emerge in these districts include, but are not limited to software developers, biomedical researchers, Internet companies, information technology, positions in higher education, and the myriad positions that support these sectors. Other cities, such as Barcelona and Washington, D.C., have provided incentives for knowledge-intensive businesses to locate within targeted districts. Cities such as Boston and Toronto have invested significant capital in infrastructure improvements, such as T1 lines, laying the

LIVE-WORK TYPOLOGY ANALYSIS

foundation for private investment. Innovation districts usually have one or more anchors – either a higher education institution, large technology company, or other creative/thought hub. In other cities, these districts often manifest as mixed-use, walkable neighborhoods. WHAT MARKET CONDITIONS ALLOW INNOVATION DISTRICTS TO SUCCEED? The market conditions necessary for an innovation district include sufficient underutilized or underperforming properties that would benefit from revitalization, change in use, or infrastructure improvements. Innovation districts generally lie outside of the urban core, but are connected through sufficient public transit. Usually one or more anchor is present, either at the outset of planning or during the evolution of the district. WHAT PUBLIC SECTOR INTERVENTIONS IN THE FORM OF SUBSIDY, LAND USE POLICY, ETC. IS NEEDED FOR INNOVATION DISTRICTS? The implementation of innovation districts in New York City would require similar public intervention as outlined above, alongside support from the real estate community, tech firms, and educators. Government and private investors, in tandem, must utilize their resources to provide fertile ground for attracting businesses to innovation districts, whether through infrastructure, revising tax policy, or enhancing access to capital.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS IN NEW YORK CITY

OVERVIEW This Chapter builds upon the work of the Chapters 1 and 2. Chapter 1 focuses on case studies in order to understand and define the traits of the different live-work typologies. Chapter 2 examines how the typologies relate to New York City, and in particular the relationship between different industries, economics, policy, and real estate. This Chapter examines how different live-work typologies may be implemented in New York City and the associated implications. As seen in Chapter 1, live-work covers a wide variety of development types with an equally wide variety within each typology of possible configurations, sizes, construction types, costs, levels of affordability, and associated industries. This chapter will focus on a select few development scenarios with the intent of illustrating the broad potential of implementing live-work in New York City.

INDUSTRIES FAVORABLE TO LIVE/WORK The success of implementation of any live-work typology in a New York City neighborhood depends on establishing a strong link to local industry. As seen in Chapter 1, there are numerous industries that are conducive to live-work. For this study, the following industries were identified as having the potential to be a feasible for one or more livework typologies: • • • • • • • • • • •

Arts; Education; Finance / Commercial; Information Technology; Healthcare and Biomedical; Manufacturing; Media; Professional Services; Retail; Tourism; and Trade.

(See figure 3.1-1 for a more detailed breakdown by typology and some of the jobs associated with each industry). For this chapter, each typology is tested using one or more of the above industries. We have included all of the industries considered because it is apart of the filtering process to vet live-work typologies for a neighborhood. Although it is redundant for the document as whole, including all of the considered industries allows each neighborhood and its associated live-work typology to be able to stand alone as its own study; equally, it allows the reader to understand how this study’s methodology is being applied through various filters.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

SELECTED SAMPLING OF INDUSTRY SECTORS AND ASSOCIATED JOBS / LABOR MARKETS

ARTS

ARTIST - COMMERCIAL ARTIST ARTIST - FINE ARTS ARTIST - PERFORMING ARTS

EDUCATION

PRIVATE TEACHING PRIMARY EDUCATION HIGHER EDUCATION

FINANCE/ COMMERCIAL INFORMATION TECHNOLOGY

LIVE-WORK BUILDING Live-Work Building

LIVE-WORK MIXED USE BUILDING

Live-Work Mixed Use

DAY TRADER TECH. SUPPORT/ BACK OFFICE OFFICE WORKER START-UP BUSINESS

ESTABLISHED BUSINESS

HEALTHCARE AND BIOMEDICAL

HEALTHCARE WORKER LAB TECH.

MANUFACTURING

ARTISAN / CRAFTSPERSON LIGHT INDUSTRY HEAVY INDUSTRY

MEDIA

BROADCAST PRINT

PROFESSIONAL SERVICES

LIVE-WORK APARTMENT

ARCHITECT / ENGINEER ATTORNEY DOCTOR / DENTIST PHYSICAL/ MENTAL HEALTH

RETAIL

SMALL SCALE

TRADE

WHOLESALE

FIGURE 3.1-0 - LIVE-WORK TYPOLOGIES BY INDUSTRY/ JOBS 71

LIVE-WORK TYPOLOGY ANALYSIS

FLEXIABLE BUILDING Flexible Building

LIVE-NEAR PLANNING Live Near Planning

INNOVATION DISTRICT Innovation District

METHODOLOGY Under the direction the NYCEDC, the team examined the implications of implementing four live-work typologies in four different New York City neighborhoods. While certain typologies could be implemented in numerous neighborhoods in the City, it was agreed that each typology would be tested in one neighborhood in order to create a broad picture of live-work in NYC. It was also decided that due to regulatory complexity and financing challenges that the Flexible Building typology would not be tested. Finally, it was also decided that the live-work apartment typology would not be tested because, as established in the research of Chapter 1, the live-work apartment is an informal phenomenon that does not lend itself to the formal development scenarios.

4. Appropriate High-Level Financial Considerations – The final step is an examination of the larger financial factors that govern development in the city. This four-step process determines which typology or typologies are most suitable for a given neighborhood.

In order to test the four selected live-work typologies (live-work building, live-work mixed-use building, live near planning, and innovation district) in a consistent and holistic manner, the team created a methodology to apply to the implementation study. To establish the viability of a typology in a particular neighborhood, there is a four-step filtering process (see figure 3.1-2): 1. Industry Filter – Consider the industries favorable to live-work in the study neighborhood. This step will establish the industry or industries to be targeted and its needs. 2. Typology Filter – Once the target industries have been identified, the second step is to select a live-work typology to be tested. The selection of a live-work typology is based upon the physical needs of the industries selected. There may be more than one typology that could succeed in a given neighborhood as noted. 3. Site Context – Every neighborhood and site is different and accordingly needs to be carefully considered when implementing a live-work development scenario. This can be at the parcel level for a live-work building and a live-work mixed-use building or at the neighborhood scale for live near planning and innovation districts.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

EXAMINE AND DISCUSS

TAKE INTO ACCOUNT:

LIVE-WORK TYPOLOGY

HIGH-LEVEL FINANCIAL CONSIDERTIONS

Appropriate

IMPLICATIONS for IMPLEMENTING

Being Considered For Implementation

Live-Work Typologies In Certain Neighborhoods

TAKE INTO ACCOUNT:

02 THIS FORMS

Required For This Work

TAKE INTO ACCOUNT: THEN DETERMINE

Industry-defined

DEVELOPMENT SCENARIOS /

SITE CONTEXT

Details Of What Industry Needs

FIGURE 3.1-1 - METHODOLOGY DIAGRAM 73

LIVE-WORK TYPOLOGY ANALYSIS

WHICH TYPOLOGY/IES

ARE MOST SUITBALE FOR THIS NEIGHBORHOOD

Implication for Live-Work Implementation The implementation of live-work typologies in Sherman Creek would create jobs and residential units in the neighborhood, primarily in the form of newly constructed development. While standard forms of development (e.g. single-use residential buildings or single-use commercial/manufacturing) would also create units and jobs, the livework typologies have the unique potential to create both within a single development. Live-work developments would also allow developers to capture more market by providing both residential and commercial uses.

TYPOLOGY TEST FIT: LIVE-WORK MIXED USE BUILDING SHERMAN CREEK • AGE - 63% are ages 20-64 • INCOMES - $43,049 HH • UNEMPLOYMENT - 14.2% unemployment • BUILDING STOCK - Mid-rise residential with industrial warehouses and vacant land • ANCHORS INSTITUTIONS - NYP - The Allen Hospital, Columbia University, CUNY, and the Cloisters • CONNECTION TO TRANSIT - Strong GENERAL MARKET STRENGTH - Strong real estate growth -10% (CAGR 2009-13) • KEY INDUSTRIES - Health and arts

The nature of live-work, regardless of scale, results in a more mixeduse character of neighborhood development than is typically found throughout the City. Indeed, a primary goal of the zoning resolution is to separate uses in order to improve the health and safety of residential neighborhoods. However, as certain types of manufacturing become cleaner and less hazardous, the basic principles of separating uses should be thoughtfully reconsidered. This is an opportunity for Sherman Creek if the neighborhood embarks on a transitional period of development, because the manufacturing identity of the area can be preserved within the framework of a live-work strategy that allows for a mix of land uses. In addition to the jobs associated with new workspaces, an increase of residential units in the area would increase demand for new service industry jobs while supporting existing establishments. Live-work typologies, by definition, promote a mix of uses and can thus add value to properties by targeting tenants requiring residential and commercial functions. In Sherman Creek, live-work strategies can also help to preserve and grow the manufacturing job base of the neighborhood while responding to residential market pressures. The abundance of large city-owned parcels along the waterfront (see figure 2-1), as well as other large underutilized properties, offers the potential for a significant amount of infill development. Live-work typologies have the potential to unlock value in properties that cannot yield market-rate income due to physical or market constraints.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

The Sherman Creek neighborhood could support development scenarios related to existing industrial anchors in the Bronx, such as the Hunts Point food distribution center (see figure 2-2). Improving the infrastructural connections to Hunts Point is not necessary for this type of scenario to succeed; rather, the proximity alone is something to consider when contemplating light manufacturing uses in Sherman Creek. The neighborhood could also support industries associated with nearby health and medical institutions, such as New York Presbyterian. Class C office space, which is in high demand throughout the City (see figure 2-3), could be considered in the neighborhood as part of a mixed-use development. Finally, the neighborhood is conducive to spaces for artists, who have been present in Inwood for many years. Industries Favorable to Live-Work in Sherman Creek For the purpose of this study, development scenarios have been defined by the key industries that are present in or proximate to the neighborhood and would benefit from the implementation of live-work typologies. Commercial and Fine Arts: Artists have been present in the Inwood neighborhood for many years. This broadly defined sector includes painters, sculptors, graphic artists, writers, and artisans. Ideal developments contain large, affordable spaces that are well lit, such as the Factory 63 development in Boston, which utilizes the large spaces and large windows of a former manufacturing building. With the exception of well-established artists who have achieved a great deal of financial success, this target market requires low rental costs for their workspaces and living spaces. Sharing communal galleries or other resources, such as costly equipment required for their work, helps ease the financial burden for upcoming artists and artisans. These types of work favor adaptive reuse properties due to their relative affordability compared to new construction. Health and Medical: Healthcare facilities benefit when employees live within a reasonable distance from the facilities because commute times are shorter for on-call professionals and because of the resulting social connections to the neighborhood. The provision for local, 74

affordable housing and services benefits both the employers and the employees. Additionally, hospitals frequently work in collaboration with or for universities in a teaching and research capacity. These proximate research facilities either institutional or commercial require wet and dry lab space. These lab spaces offer particular challenges in an urban environment requiring large floor plates (see figure 2-4) and physical separation from residential use due to environmental and health concerns. Specialists and family doctors are sometimes able to work from spaces within their homes, which could be possible within the livework townhouse sub-typology, within the live-work apartment typology. Class C Office Mix: Class â&#x20AC;&#x153;Câ&#x20AC;? office space is scarce in Manhattan, according to the 2014 CoStar Office Report (see figure 2-3). The 5% vacancy rate of Manhattan class C office space compels companies to look for options outside of the commercial core and sometimes to the outer boroughs. In order for these offices spaces to attract tenants, they must be reasonably priced, sufficiently connected to mass transit, contain shared resources such as printing facilities and conference rooms, and offer flexibility of layout. Diverse Light Industry: A development scenario with a diversity of light manufacturing uses, such as woodworking shops, repair shops, and wholesale service and storage facilities, requires suitable infrastructure for the streamlined movement of goods, and benefits from strong connections to public transit. An established economic anchor devoted to a particular sector is not necessary, but the presence of such anchors can indeed help spur development either through direct investment in the neighborhood (e.g. the Downtown Project in Las Vegas, which is comprised of several private companies who invest in businesses and residential real estate in the downtown district), or by acting as a magnet to smaller industries that benefit from being proximate to anchors. Potential Typologies for Consideration Certain live-work typologies have the potential to meet the needs of the above industries. The reasons for pairing particular live-work typologies to a development scenario, along with a summary of general conditions needed for the typology to succeed, are described below.

Development Scenario: Commercial and Fine Arts. The needs of this sector are best met with the live-work apartment and live-work building typologies. The apartment typology combines living and workspace in a singular unit. A live-work building contains collaborative communal spaces with additional shared resources (e.g. gallery space or costly equipment). Both of these typologies, if developed within the correct market and/or location, can address the necessarily low rental costs of the target market. Development Scenario: Health and Medical. To maximize the benefits of collaboration between hospitals, medical centers and universities, an innovation district focused on biotech could be created in neighborhoods that have the requisite adjacencies between these types of facilities. An innovation district, in general, also needs large enough direct and indirect subsidies (e.g. access to high-speed internet or loan programs) in order to incentivize companies to locate to and/ or expand in the area. This typology benefits from strong public transit that is already in place, such as the Kendall Square district in Boston, or where transit systems are introduced at a later time, such as Seattleâ&#x20AC;&#x2122;s South Lake Union district (see figure 2-5). Because of the shared benefits to employers and employees, Live Near Planning is best suited for this particular development scenario. One of the best examples of this typology is the Live Near Your Work program at John Hopkins University Medical Center. Part of a broader policy in the city of Baltimore in which the city matches employer grants for homeownership, this program can also be implemented for rental units as seen in programs in Detroit. This typology requires a weak residential market that benefits from the bolstering of land value due to the increased purchasing power of residents in the neighborhood. Development Scenario: Class C Office Mix. A class C office space development scenario would be best implemented as a live-work mixeduse building. Unlike a standard live-work building, this typology does not cater to one specific work sector. Rather, a live-work mixed-use building offers workspace to an array of industries, making it suitable to a mix of office tenants. The typology requires a market demand for affordable spaces with shared resources, and typically attracts startup companies and small businesses. LIVE-WORK TYPOLOGY ANALYSIS

TYPOLOGY TEST FIT: LIVE-WORK MIXED USE BUILDING

The health and medical sector requires other public or private institutional partners that are willing to invest in live-work strategies such as the live near planning typology or an innovation district focused on biotech. This implies that the health and medical sectors are mostly applicable to the innovation district typology and the live near planning typology. Small-scale medical spaces, such as family physicians, can occupy a live-work townhouse sub-typology (within the live-work apartment typology).

Site Context Sherman Creekâ&#x20AC;&#x2122;s physical and market conditions are ideal for the implementation of live-work typologies. There is a surplus of large, publicly controlled sites along the waterfront. Adjacent to these sites are large, underutilized infrastructure sites. The neighborhood has access to public transit, specifically through the 1-train and the M100 and Bx12 bus lines. There are local truck routes along 10th Avenue and the 207th Street Bridge (see figure 2-6).

Class C office space requires relatively little financial investment when compared to the health and medical sector or compared to capitalintensive manufacturing work. A mix of light industrial uses would require the added costs of slightly more robust construction and additional loading docks.

The relationship with the Harlem River offers potential for the cityowned parcels to capitalize on waterfront access through views and public open space. Already an established network of parks, these waterfront areas have kayak/canoe launch sites, free movie nights, and gardening events. Any influx of residential units would benefit from these open spaces, as would waterfront retail uses. From a market standpoint, Sherman Creek is a strong candidate for live-work development as the price per residential square foot is 70 percent lower than the City average: $441 compared to $1471 (see figure 2-7). Market trends over the last year (including an appreciation of sales prices over the last 5 years) demonstrate that the market is strengthening and will continue to do so. High-Level Financial Considerations The commercial and fine arts scenario may be difficult to incorporate into the neighborhood due to the lack of adaptive reuse opportunities. Because this target market requires lower rents, a scenario involving new construction would require subsidies similar to inclusionary housing, such as the 421a tax abatement, but retooled to encourage live-work. CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

Neighborhood Test-Fits The live-work mixed-use building typology was selected for implementing test-fits in Sherman Creek because this typology does not target a single, specific industry or work sector. By definition, the live-work mixed-use building typology targets multiple types of work, as the case study research suggests. Both the WeLive development in Arlington, VA and the Castle Braid building in Bushwick, Brooklyn target multiple sectors. The former targets young professionals and startups; the latter targets painters, sculptors, musicians and performers, offering multiple kinds of studio spaces and work areas (see Chapter 1 for more details). Because Sherman Creek does not have a dominant industry or sector, and because the neighborhood lacks a strong anchor needed for live near planning or an innovation district, the live-work mixed-use building is the most applicable typology. Two potential sites were chosen for implementation study: one at 10th Avenue between 202nd Street and 203rd Street and the other at the intersection of 10th Avenue and the University Heights Bridge (see figure 2-8, 2-9, 2-10, and 2-11). Both sites are large in size, which is a requisite for the live-work mixed-use building typology. Another factor that makes these sites suitable for this typology is their location: one site is directly adjacent to the bridge entrance, and the other is directly adjacent to functioning electrical utilities. Case study research shows that both the live-work building and the live-work mixed-use typologies 76

are often located adjacent to M districts or transportation/utility infrastructure. For example, the Factory63 building in Boston is located adjacent to the Summer Street Bridge entrance and within 400 feet of the Massport Haul Road bypass area, which along with other former warehouse buildings contributes to the areaâ&#x20AC;&#x2122;s industrial character. The reasons for this phenomenon are both economic and physical: sites adjacent to industrial areas or utilities are less desirable and therefore less expensive. The more affordable sites lend themselves to live-work buildings and live-work mixed-use buildings, because the workspaces will generate less income than a standard residential development and require less land value to be feasible. In Sherman Creek, for instance, average residential rents are approximately $35 to $40 per square foot, as opposed to $20 to $30 per square foot. It should be noted that the sites between the two Sherman Creek test-fit sites would be more suitable for standard development (e.g. residential developments with the possibility of retail at the ground level). These sites are located an adequate distance from the bridge entrance and electrical utilities Test-fit 1: 3775 9th Avenue (Block 2184, Lots 20). This property is currently owned by Consolidated Edison but does not contain electrical utilities. It is approximately 33,800 square feet and is zoned as an M3-1 district. M3 districts are designated for areas with heavy industries that generate noise, traffic or pollutants. Typical uses include power plants, solid waste transfer facilities and recycling plants, and fuel supply depots. For the purpose of the proposed test-fit, the site was assumed to be rezoned as a C6-1 district, which would allow a maximum residential FAR of 3.44 and a maximum commercial FAR of 6.0. The test-fit utilizes the maximum residential FAR, thus using 2.56 FAR for commercial use. It is important to note that C6-1 districts have a residential equivalent of R7, which is the most prevalent zoning in the Inwood neighborhood. Thus a rezoning to C6-1 would ensure a similar residential bulk and density of the adjacent neighborhood, and the commercial FAR would encourage developers to incorporate work areas within the development, presumably at the base of buildings. Test-fit 1 proposes three levels of workspace areas serving as the podium of a 17-story building. Fourteen residential floors are placed above the podium, and are configured with a central elevator core. The scheme could also be configured as a standard double-loaded corridor. 77

A total of 114,535 residential ZSF (zoning square feet) is proposed, along with 75,235 ZSF of workspace areas. These workspaces include light manufacturing uses such as commercial kitchens and studios for artists or artisans. It also includes general office areas on the third floor, targeting creative professionals (such as graphic and web designers, printing companies, architects, or fashion designers). The ground floor is dedicated to retail use fronting 10th Avenue and West 206th Street, and a residential lobby on the northern side corner of 10th Avenue. Test-fit 2: 408 W 2017th Street (Block 2203, Lot 21). This property currently serves as half of the parking lot area for a Pathmark grocery store, but does not include the store itself. It is owned by Morris Altschuler and is approximately 20,000 square feet. It is currently zoned as an M1-1 district. For the purpose of the proposed test-fit, the site was assumed to be rezoned as a C6-1 district, which would allow a maximum residential FAR of 3.44 and a maximum commercial FAR of 6.0. See the description of Test-fit 1 above for the reasoning behind a C6-1 rezoning scenario. Test-fit 2 proposes two levels of workspace areas above ground-level retail, with 7 residential floors above. The residential floors are configured as a â&#x20AC;&#x153;side coreâ&#x20AC;? layout (meaning, elevators and service core located along the wide side of a double-loaded corridor). A total of 55,391 residential ZSF (zoning square feet) is proposed, along with 38,575 ZSF of workspace areas. Similar to test-fit 1, these workspaces include light manufacturing uses such as commercial kitchens and studios for artists or artisans. It also includes general office areas on the third floor, targeting creative professionals. The ground floor is dedicated to retail use fronting 10th Avenue and West 206th Street, and a residential lobby on the northern side corner of 10th Avenue. Two high-level net present value (NPV) calculations were examined alongside test-fits for two different sites in the Sherman Creek neighborhood (see figures 2-12, 2-13, 2-14, and 2-15). The results for both test-fits show a positive return on investment and depict feasible developments for live-work mixed-use buildings, yielding an IRR of 10% for test-fit 1, and 14% for test-fit 2. The NPV (net present value) for test-fit 1 is approximately $7.5 million, and the NPV for test-fit 2 is LIVE-WORK TYPOLOGY ANALYSIS

approximately $10 million. Based on our cost and income assumptions, there is no need for public subsidies. However, a special zoning district encouraging the live-work mixed-use typology would need to be created in order to encourage workspace at the bases of buildings and to support the development of a unique mix of uses (see figure 2-16).

•

Provide a conceptual building program that allows the market to balance live work to optimize the return at this location. From this study we feel the work areas will occupy the less desirable spaces adjacent to heavy vehicular traffic and/or utility equipment.

Next Steps: Sherman Creek — Live-Work Mixed-Use Building •

Within the neighborhood Study Area (roughly the M district bound by the University Heights Bridge to the north, 201st Street to the north, 10th Avenue to the west, and the Harlem River), should this concept be advanced, it is recommended to implement live-work mixed-use buildings at the least desirable • development sites. • I.E. the two test fit sites of this study: one adjacent to the University Heights Bridge along 9th Avenue (less desirable at the ground floor as a result of the bridge on-ramp), and one between 202nd Street and 203rd Street, also along 9th Avenue (less desirable at the bottom 3 floors due to adjacent electrical utilities).

•

Study and implement a zoning change that encourages a mixed-use building, or utilizes district guidelines that would instruct developers to create large floor plates at the lower portions of buildings that are applicable to commercial space rather than residential space (see Figure 2-16). • I.E. the two test fit sites used C6-1 zoning districts, which allow a maximum residential FAR of 3.44 and a maximum commercial FAR of 6.0. C6-1 zoning districts have a residential equivalent of R7, which is the most prominent zoning district in the Inwood neighborhood, thus ensuring a certain amount of contextual height and bulk relative to the area west of 10th Avenue.

•

Meet with ConEd and the owner of Block 2203, Lot 21 to discuss potential development deals.

•

Issue an RFP to developers. CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

FIGURE 3.2-0 BIRDâ&#x20AC;&#x2122;S EYE VIEW OF SHERMAN CREEK

LIVE-WORK TYPOLOGY ANALYSIS

Figure Figure 2-1 2-1

FIGURE 3.2-1 City-owned City-owned properties properties and and largelarge underutilized underutilized utility utility sites* sites* in Sherman in Sherman Creek Creek City-owned properties and large underutilized KEY MAP KEY MAP utility sites* in Sherman Creek

â&#x20AC;˘

* * * * CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

Figure 2-2

FIGURE to 3.2-2 Sherman Creek’s proximity industria districts within the Bronx, specifically th Hunts Point Sherman Creek’sIBZ proximity to industrial districts within the Bronx, specifically the Hunts Point IBZ. KEY MAP

SHERMAN CREEK

A E FORDHAM RD

TE AM S

AN MAJOR DEE G

SHERIDAN EXPY

DW AY

CROSS BRONX EXPY

EX PY

K UC

R NE

I95

PY EX

LEGEND SUBWAY LINE

HUNTS POINT

I95 MAIN TRUCK ROUT NYC TRUCK ROUTES 0

LIVE-WORK TYPOLOGY ANALYSIS

2000

4000

8000ft

compared to negative (192,828) square feet in the third quarter 2014, negative (123,297) in the second quarter 2014, 2014 and Year-End positive 41,238 in the first quarter 2014. Vacancy YTD Net YTD Under Quoted

was positive 3,894,934 square feet in the fourth quarter 2014. Class A Market Statistics That compares to positive 1,813,064 square feet in the third Existing Inventory

Market

FIGURE 3.2-3

# Blds

Downtown

Total RBA

Direct SF

84,068,479

9,754,515

Vacancy Rates340 by Class 221,852,566 1994-2014 16,313,110

Midtown

Manhattan class C office space: vacancy and absorption statistics

Midtown South 16%

Uptown

14%

Totals

15,281,241

1,132,000

456

322,334,286

A 543,205

Total SF

Vac %

Absorption

10,375,954

12.3%

3,626,528

18,542,688

8.4%

1,388,851 755,135

C 625,961

0 26,610,830

Total Market

4.1%

0.0%

29,544,603

Deliveries

Const SF

3,038,168

2,861,402

$49.88

2,967,859

$66.13

114,000

$88.20

9.2%

5,770,514

0 3,038,168

Rates

$0.00

5,943,261

$59.16

Vacancy Rate

Source: 12% CoStar Property®

10%

Class B Market Statistics 8%

Year-End 2014

Existing Inventory

Market 6%

# Blds

Downtown 4%

Total RBA

160

•

2% Midtown

Vacancy

29,612,731

Direct SF

Total SF

Vac %

1,522,445

1,755,994

5.9%

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

$41.80

$53.71

(73,071)

569

68,303,476

3,431,828

3,674,471

5.4%

774,093

483

57,484,587

3,920,702

4,273,502

7.4%

249,650

172

6,892,383

1,384

162,293,177

0% South Midtown

44,500

117,588

$64.25

1994 3q1995 3q1996 3q1997 3q1998 3q1999 3q2000 3q2001 3q2002 3q2003 3q2004 3q2005 3q2006 3q2007 3q2008 3q2009 3q2010 3q2011 3q2012 3q2013 3q2014 3q

Source: CoStar Property® Uptown

Totals

Absorption & Deliveries

Past 10 Quarters

Deliveries

Market

# Blds

4.0

Downtown

263

Midtown

9,591,969

662

2.0

0.00

Uptown 0.0 Totals (1.0)

783

0.010.02 0.00

0.00

(2.0) 2012 3q

(1.29) 2013 1q

0.00

6,471,211 (0.04)

2,009 (0.83)

Source: CoStar Property®

29,323,390 0.62

301

3.08 601,682

Total SF

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

(42,176)

$47.99

4.5%

(328,864)

$45.22

12.0%

6.6%

73,584,534

1.811,134,519

1,256,481

1,472,146

1,559,418

5.3% 6.0%

(63,424)

$54.49

298,286

309,193

4.8% 4.0%

(45,465)

$37.55

3,506,633

3,762,755

5.1% 2.0%

(479,929)

0.04

8.0%

$48.84

(0.98) 0.0% 2013 3q

2014 1q

2012 3q

2014 3q

Source: CoStar Property®

Existing Inventory

Downtown

United States

YTD Net

Vac %

637,663

Total Office Market Statistics Market

10.0%

28,197,964

1.18 1.01 1.17

0.88 Midtown 1.0 South

3.89SF Direct

2.72

3.0

14.0%

Vacancy

Total RBA

$55.22

Year-End 2014

New York City

Existing Inventory

Vacancy Rate

Net Absorption

5.0

$50.98

Past 10 Quarters

Class C Market Statistics

Millions SF

362,606 5.3% 46,243 36,000 42,771 Special LIC 9,237,581 10,066,573 6.2% 996,915 80,500 160,359 Mixed Use The CoStar Office Report U.S. Vacancy Comparison District 362,606

# Blds Total RBA Direct SF CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS 507 123,273,179 11,878,642

2013 1q

2013 3q

Total SF

Vac %

12,769,611

10.4%

2014 3q

Year-End 2014

Source: CoStar Property®

Vacancy

2014 1q

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

3,038,168

2,861,402

3,511,281

$47.97

FIGURE 3.2-4 Examples of large floor plates required for typical healthcare and research spaces

LIVE-WORK TYPOLOGY ANALYSIS

FIGURE 3.2-5 South Lake Union District,

Transit systems to support Innovation District

â&#x20AC;¢

Special LIC Mixed Use District

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

FIGURE 3.2-6

SHERMAN CREEK

Sherman Creek has good access to public transit and has access to regional/local trucking routes

EXPY

EX PY

SH ERIDA N R

EX P

I95

KN E

ER ST AM

A MAJOR DE EG

DA M

EXP Y

DW AY

CROSS BRONX

U BR

HUNTS POINT

LEGEND SUBWAY LINE I95 MAIN TRUCK ROUT NYC TRUCK ROUTES 0

LIVE-WORK TYPOLOGY ANALYSIS

2000

4000

8000ft

FIGURE 3.2-7 A E FORDHAM R D

Sherman Creek has a relatively weak market when compared to the rest of Manhattan

E FORDHAM R D

EXPY

CROSS BRONX

EXPY

I95

EX PY

U BR

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LEGEND Median Listing Price Map, recreated based on data LEGEND from the National Home Price Page by Trulia Median Listing Price Map, recreated based on data from the$National Home Price Page by Trulia 3375,000 $515,000 $ 3375,000 $1,000,000 $515,000 $1,600,000 $1,000,000 0 0

$1,600,000 2000

4000

8000ft

2000

4000

8000ft

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

SU B EX WAY ITS

FIGURE 3.2-8 M

9A V

LOCATION OF 2 TEST-FIT DEVELOPMENTS

E GL

AT W ING

RO F R

T N

UN HE IVER IG HT SITY SB RID G

LI NK

Legend

INF CON RA ED ST ISO RU CT N UR

SITES OF INTEREST EXISTING WATERFRONT PARK

CON ED INFRASTRUCTURE PROPOSED PEDESTRIAN ROUTE

LIVE-WORK TYPOLOGY ANALYSIS

100

200

400 ft

R TA IL

A G

A A

R IL

B L

A R

TA IL

E A

O O P F E A FI N R C E E A C S O H M K M AR IT E E C R D H C E IA R N L E TA IL

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ITY

V 9A

IVE

E N A O R F E F A IC

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W S O P R A K C E

R PA

AC SP E

E AT W

R PA

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

W S O P R A K C E

T 7S 20

O P

Overview of 2 test-fit developments ED AT V E Y EL BWA SU

RO RF

E AT W

V 9A

ST E N A O R F E F A IC

Test-fit 1: Block 2184, Lots 20 & 40 Test-fit 2: Block 2203, Lot 21 C PA S

3 20

N E P

FIGURE 3.2-9 2

W 20 6S T

FIGURE 3.2-10 W 5

20 ST

Test-fit 1: Block 2184, Lots 20 & 40 (EDC Study Area sites 19 & 20) Sherman Creek

Site 17

10th 9th Avenue and 203rd 206th Street

General Information

Lot Area (SF)

O O P F E F A I N R C E E A

O N R FE O R O E M N S C E

199,770

Above-grade Gross Floor Area (GFA)

207,761

Below-grade Gross Floor Area (GFA) Number of Levels

O P F E A FI N R C E E A

O SH M K M AR IT E E C R D H C E IA R N L E TA IL

Residential

A E

A IC

E TA

B P

ST E

E AT W

E R

B L

G E

RK PA

N RO RF

2,000

Circulation / Core

1,000

Amenities

2 E N A O R F E F A IC

119,116

44,814

Lobby

Workspace

114,535

Apartments (Net Area)

C E E N A O R F E F A IC

160 Feet

Zoning Square Gross Floor Feet Area

20 O

32,000 14 Floors

Programmatic Information

V 9A

33,295

Total Zoning Square Feet (ZSF)

20,250 75,235

78,244

Shared Commercial Kitchen

35,000

Open Office Area

20,000

Conference Rooms

6,000

Support / MEP

8,200

Circulation / Core Retail

9,389 10,000

10,400

E AC SP

Public Area

6,000

Storage / Support / MEP

1,200

Circulation / Core

3,200 32,000

Parking

21,000

Amenities

6,000

Storage / MEP

5,000

N RO RF

E AT W

Basement

R PA K

TOTALS

LIVE-WORK TYPOLOGY ANALYSIS

199,770

189,053

FIGURE 3.2-11 Test-fit 2: Block 54, Lot 6

(EDC Study Area site 5, eastern edge) Sherman Creek

9th Avenue and 206th Street

W S O P R A K C E

E C E

O OP S FF E P I N A C C E O O E F P

S F E P I N A C C E E

E S C

R D H C E IA N L

C S O H M K M AR IT E CE S C R OD H H C M A E KIA M R N ITL E E C P

A B R L E IC A P

U A B R L E IC A

E G A R S A T G O E R E

ITY RS

ITY

RS IVE

BR GE

3,000

V 9A

IVE

TA R IL E

IL TO

O OP S FF E P I N A C C E O OP E S F E

P FI N A C C E E

W W

131,325

GE ID

108,966

131,325

T ST 6S 06 2

TOTALS

108,966

Storage / MEP

80 Feet

Gross Floor Area

Zoning Square 57,607 Gross Floor 55,391 Feet Area 44,814 55,391 57,607 1,000 44,814 2,000 1,000 9,793 2,000 38,575 40,118 9,793 18,000 38,575 40,118 10,000 18,000 3,500 10,000 3,804 3,500 4,814 3,804 15,000 15,600 4,814 9,000 15,000 15,600 2,000 9,000 4,600 2,000 18,000 4,600 11,000 18,000 4,000 11,000 3,000 4,000

TOTALS

17,000

7 Floors

Zoning Square Programmatic Information Feet

Building Height Programmatic Information

108,966 17,000 113,325 80 Feet

113,32518,161

Zoning Square Feet (ZSF) Below-gradeTotal Gross Floor Area (GFA) Above-grade Gross Floor Area (GFA) 7 Floors Building Height Below-grade Gross Floor Area (GFA)

Area Floor (SF) Area (GFA) Above-gradeLot Gross

108,966

Apartments (Net Area) Residential Lobby Apartments (Net Area) Amenities Lobby Circulation / Core Amenities Workspace Circulation / Core Shared Commercial Kitchen Workspace Open Office Area Shared Commercial Kitchen Conference Rooms Open Office Area Support / MEP Conference Rooms Circulation / Core Support / MEP Retail Circulation / Core Public Area Retail Storage / Support / MEP Public Area Circulation / Core Storage / Support / MEP Basement Circulation / Core Parking Basement Amenities Parking Storage / MEP Amenities

18,161

Total Zoning General Square Information Feet (ZSF)

W S O P R A K C E

Lot Area (SF)

Residential

W S O P R A K C E

General Information Site 5

9th Avenue and 206th Street

O C N R FE O N O R O E R F M N O E S C O RE E M N

Sherman Creek

Site 5

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

Sherman Creek

Sites 19 & 20

Block 2184 / Lot 20 & 40 10th Avenue and 203rd Street

General Information Lot Area (SF)

33,295

Projected Value

199,770

Annual Taxes

Above-grade Gross Floor Area (GFA)

207,761

Based on Information obtained from Property Shark

Below-grade Gross Floor Area (GFA)

32,000

Number of Levels

14 Floors

Residential

Cost / SF

114,535

Apartments (Net Area)

$350,000

160 Feet

Programmatic Information Zoning Square Feet

Gross Floor Area

Cost

Rent / SF

Rental Income

119,116 $200

$8,962,800

$37

$1,658,118

Lobby

1,000

$275

$275,000

$37

$37,000

Amenities

2,000

$225

$450,000

$37

$74,000

20,250

$150

$3,037,468

Workspace

75,235

78,244

Shared Commercial Kitchen

35,000

$375

$13,125,000

$90

$3,150,000

Open Office Area

20,000

$275

$5,500,000

$60

$1,200,000

Conference Rooms

6,000

$225

$1,350,000

$60

$360,000

Support / MEP

8,200

$200

$1,640,000

Circulation / Core

9,389

$150

$1,408,399

Retail

10,000

10,400

Public Area

6,000

$300

$1,800,000

$90

$540,000

Storage / Support / MEP

1,200

$250

$300,000

$90

$108,000

Circulation / Core

3,200

$225

$720,000

$90

$288,000

Basement

32,000

Parking

21,000

$180

$3,780,000

Amenities

6,000

$250

$1,500,000

Storage / MEP

5,000

$150

$750,000

TOTALS Soft Costs and Site Preparation Land Acquisition

TOTAL PROJECT COST

199,770

189,053 25%

$9.05

$1,078,003

$14.00

$1,095,422

$16.00

$166,400

$4.00

$128,000

$11,149,667 $6,659,000

$62,407,334 $7,127,118

NOI

$4,309,293

Operating Expenses

$44,598,667

ANNUAL INCOME / EXPENSE

CAP RATE

Expenses per SF

Based on annual cost survey by Based on rental information from Based on information from NAAHQ Turner & Townsend Trulia and LoopNet and BOMA

44,814

Circulation / Core

FIGURE 3.2-12

$6,659,000

Total Zoning Square Feet (ZSF)

$2,817,825

6.9% LIVE-WORK TYPOLOGY ANALYSIS

Test-fit 1: Block 2184, Lots 20 & 40 (EDC Study Area sites 19 & 20) High-level Net Present Value (NVP) Analysis, Part 1

FIGURE 3.2-13 Test-fit 1: Block 2184, Lots 20 & 40 - High-level Net Present Value (NVP) Analysis, Part 2 Sherman Creek | Site 19 and 20 ASSUMPTIONS Annual Gross Rent, first year Vacancy and Collection factor Operating Expenses, first year Annual % change in rent Annual % change in expenses Loan to Value ratio Stated Annual Interest rate Loan Term (years) Percent of price in improvements CPI Annual Increase After tax, Real Discount rate Cap Rate assumed at date of sale Transaction costs as % of sales price Cap Rate at Purchase

7,127,118 5% 2,817,825 2.0% 2.0% 75.0% 4.5% 25 85.0% 3.0% 8.0% 6.9% 10.0% 6.9%

DEFINED VARIABLES

Source

Recovery period (years) Income tax rate (Corporate) Capital Gains tax rate

Property Valuation:

NOI Assumptions

39 34.0% 15.0%

Omnibus Budget Reconciliation Act of 1993 IRS - Varies based on taxable income IRS - Varies based on income tax bracket

97,250,085.36

ECONOMIC VALUES, CALCULATED BY MODEL Loan Amount Equity Required Mortgage Loan Constant

72,937,564 24,312,521 6.74%

DECISION ANALYSIS FACTORS year

Real Cash Flow to Owner Present Value of Real Cash Flow

NPV of Real Cash Flow: After Tax Real Internal Rate of Return:

0 -24,312,521 -24,312,521

1 1,310,486 1,213,413

2 -278,171 -238,487

3 5,940,384 4,715,668

4 5,825,005 4,281,553

5 5,711,838 3,887,381

6 5,600,820 3,529,467

7 5,491,891 3,204,466

8 5,384,993 2,909,344

9 5,280,068 2,641,349

10 41,839,154 19,379,624

0 0

21,211,255.27 18.10% CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

Sherman Creek

East portion of Site 6

Block 2203 / Lot 21 9th Avenue and 206th Street

General Information Lot Area (SF)

18,161

Projected Value

108,966

Annual Taxes

Above-grade Gross Floor Area (GFA)

113,325

Based on Information obtained from Property Shark

Below-grade Gross Floor Area (GFA)

17,000

Building Height

7 Floors

Cost / SF Zoning Square Gross Floor Area Feet 55,391

Apartments (Net Area)

$200,000

80 Feet

Programmatic Information

Residential

Cost

Based on annual cost survey by Turner & Townsend

Rent / SF

Rental Income

Based on rental information from Trulia and LoopNet

57,607 44,814

$200

$8,962,800

$32.00

$1,434,048

Lobby

1,000

$275

$275,000

$32.00

$32,000

Amenities

2,000

$225

$450,000

$32.00

$64,000

Circulation / Core

9,793

$150

$1,468,969

Workspace

38,575

40,118

Shared Commercial Kitchen

18,000

$375

$6,750,000

$90.00

$1,620,000

Open Office Area

10,000

$275

$2,750,000

$60.00

$600,000

Conference Rooms

3,500

$225

$787,500

$60.00

$210,000

Support / MEP

3,804

$200

$760,800

Circulation / Core

4,814

$150

$722,124 $2,700,000

$90.00

$810,000

$90.00

$180,000

Retail

15,000

15,600

Public Area

9,000

$300

Storage / Support / MEP

2,000

$250

$500,000

Circulation / Core

4,600

$225

$1,035,000

Basement

18,000

Parking

11,000

$180

$1,980,000

Amenities

4,000

$250

$1,000,000

Storage / MEP

3,000

$150

$450,000

TOTALS Soft Costs and Site Preparation Land Acquisition

TOTAL PROJECT COST

108,966

FIGURE 3.2-14

$3,632,200

Total Zoning Square Feet (ZSF)

131,325

Expenses per SF

Operating Expenses

Based on information from NAAHQ and BOMA

$9.05

$521,340

$14.00

$561,652

$16.00

$249,600

$4.00

$72,000

$30,592,193 25%

$7,648,048 $3,632,200

$41,872,442

ANNUAL INCOME / EXPENSE

$4,950,048

NOI

$3,345,456

Test-fit 2: Block 2203, Lot 21 (EDC Study Area sites 19 & 20)

$1,604,592

CAP RATE

8.0%

LIVE-WORK TYPOLOGY ANALYSIS

High-level Net Present Value (NVP) Analysis, Part 1

FIGURE 3.2-15 Test-fit 2: Block 2203, Lot 21 - High-level Net Present Value (NVP) Analysis, Part 2 Sherman Creek | Eastern portion of Site 6 ASSUMPTIONS Annual Gross Rent, first year Vacancy and Collection factor Operating Expenses, first year Annual % change in rent Annual % change in expenses Loan to Value ratio Stated Annual Interest rate Loan Term (years) Percent of price in improvements CPI Annual Increase After tax, Real Discount rate Cap Rate assumed at date of sale Transaction costs as % of sales price Cap Rate at Purchase

4,950,048 5% 1,604,592 2.0% 2.0% 75.0% 4.5% 25 85.0% 3.0% 8.0% 8.0% 10.0% 8.0%

DEFINED VARIABLES

Source

Recovery period (years) Income tax rate (Corporate) Capital Gains tax rate

Property Valuation:

NOI Assumptions

39 34.0% 15.0%

Omnibus Budget Reconciliation Act of 1993 IRS - Varies based on taxable income IRS - Varies based on income tax bracket

58,162,915.96

ECONOMIC VALUES, CALCULATED BY MODEL Loan Amount Equity Required Mortgage Loan Constant

43,622,187 14,540,729 6.74%

DECISION ANALYSIS FACTORS year

Real Cash Flow to Owner Present Value of Real Cash Flow

NPV of Real Cash Flow: After Tax Real Internal Rate of Return:

0 -14,540,729 -14,540,729

1 1,187,968 1,099,971

2 -288,397 -247,254

3 3,984,031 3,162,652

4 3,910,163 2,874,086

5 3,837,684 2,611,863

6 3,766,556 2,373,569

7 3,696,742 2,157,013

8 3,628,206 1,960,207

9 3,560,913 1,781,343

10 25,421,535 11,775,089

0 0

15,007,810.95 19.89% CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

THIS PAGE IS INTENTIONALLY BLANK 95

LIVE-WORK TYPOLOGY ANALYSIS

TYPOLOGY TEST FIT: LIVE-WORK BUILDING LONG ISLAND CITY • AGE - Young population (68% are younger than 45) • INCOMES - $43,909 HH • UNEMPLOYMENT - 12.2% unemployment • BUILDING STOCK - Former manufacturing buildings and new residential construction • ANCHORS INSTITUTIONS - Cornell / Technion and LAGCC • CONNECTION TO TRANSIT - Strong GENERAL MARKET STRENGTH Robust residential market; unmet demand for commercial office space • KEY INDUSTRIES - Technology, Arts, and Culture

Implication for Live-Work Implementation The implementation of live-work typologies in Long Island City would help foster the mixed-use character of the neighborhood, preserve and expand the existing industrial job base, and respond to residential market pressures. There is a mix of manufacturing uses within and surrounding the Special Long Island City Mixed-Use District. Some of this is traditional manufacturing use, such as metal fabricators, concrete suppliers, and packing companies. However, a new generation of innovative manufacturing uses, such as 3D printing technology companies (e.g. Shapeways), is pushing the neighborhood into the 21st century. Live-work typologies can be supportive of these new businesses by providing affordable space for startup companies or by offering a district-wide strategy such as an innovation district. Case study research has shown that the building-scale live-work typologies (e.g. the live-work building) cater mostly to newly established businesses who require affordable rents. The strategic adaptive reuse of existing structures in the neighborhood, in particular as part of challenged or undervalued parcels, offers opportunities for adaptive reuse developments, which are well suited for startup companies and small businesses, especially creative professionals (e.g. graphic designers, architects, or fashion designers). Opportunities to develop office space at rents significantly lower than those of the nearby Manhattan commercial core make Long Island City an affordable and competitive location for many businesses at a variety of scales. The 2001 rezoning of the neighborhood’s CBD utilizes “paired districts,” which allow both manufacturing use and residential use in a 37-block area (see figure 3-1). This area, the Special Long Island City MixedUse District, has seen the addition of 30,000 new daily workers and 35,000 new residents in the last 10 years. Live-work typologies, by definition, promote a mix of uses and can thus add value to properties by targeting tenants requiring residential and/or commercial spaces. Long Island City could support live-work development scenarios related to the thriving arts community, anchored by MomA’s PS1 gallery (see Figure 3-2); the tech industry, bolstered by the planned Cornell Tech campus on Roosevelt Island one subway stop to the west CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

(see figure 3-3); a maker economy associated with nearby innovative manufacturing, such 3D printing technology; general class C office space, which is in high demand throughout the City (see figure 3-4); or spaces for creative professionals, including web designers, architects, and fashion designers. Industries Favorable to Live-Work in Long Island City For the purpose of this study, development scenarios have been defined by the key industries that are present in or proximate to the neighborhood and would benefit from the implementation of live-work typologies. Technology and Innovation: This industry includes a wide variety of scales, from small startups to tech giants. Small companies and startups tend to locate near larger anchor companies (e.g. as with Amazon’s campus in Seattle, WA), or near universities with strong technology curricula (e.g. as with MIT in Cambridge, MA). While the primary target market includes software and application companies, this development scenario also captures innovative manufacturers, such as 3D printers (e.g. Shapeways in Long Island City). In general, businesses in this industry favor clustering near one another in order to share knowledge and resources. Commercial and Fine Arts: This broadly defined sector includes painters, sculptors, graphic artists, writers, performers such as actors and w dancers, and artisans. Spaces for this target market are best suited in developments that provide a collaborative work atmosphere. Ideal developments contain large, affordable spaces that are well lit, such as the Factory 63 development in Boston (see Task 1 case study). With the exception of well-established artists who have achieved a great deal of financial success, this target market requires low rental costs for their workspaces and living spaces. Sharing communal galleries or other resources, such as costly equipment required for their work, helps ease the financial burden for upcoming artists and artisans. These types of work favor adaptive reuse properties due to their relative affordability compared to new construction. Maker Economy: The term “maker economy” refers to a broadly defined movement of artisans, crafters, and independent inventors 96

that are usually small in scale and operate locally. Maker economies are commonly comprised of light manufacturers and artisans but can include industrial scale artists and pioneering creative professionals (note that there is some amount of overlap with the Commercial and Fine Arts sectors). This industry relies on the clustering of associated businesses, suppliers, and institutions to increase productivity. Additionally, businesses strive for geographic proximity to clients and/ or consumers in order to further increase retail opportunities to local markets. This industry favors affordable, flexible light industrial spaces (e.g. warehouse spaces in Red Hook, Brooklyn) that allow manufacturing operations to scale appropriately. Class C Office Mix: Class “C” office space is scarce in Manhattan, according to the 2014 CoStar Office Report (see figure 3-4). The 5% vacancy rate of Manhattan class C office space compels companies to look for options outside of the commercial core and sometimes to the outer boroughs. In order for these offices spaces to attract tenants, they must be reasonably priced, sufficiently connected to mass transit, contain shared resources such as printing facilities and conference rooms, and offer flexibility of layout. Space for Creative Professionals: A development scenario focused on creative professionals would utilize properties that are physically or economically challenged. This target market, which includes web and fashion designers, architects, interior designers, as well as the various jobs associated with LIC’s film industry (e.g. stage/set designers and builders, etc.) often requires below-average rental costs when companies are newly established or if the businesses are small. Equally important, this broadly defined sector is more likely to accept irregular floor plate geometry and lower quality of light and views, thereby unlocking value in challenged properties. As with general class C office spaces, these tenants benefit from shared resources and communal spaces. Potential Typologies for Consideration Certain live-work typologies have the potential to meet the needs of the above industries. The reasons for pairing particular live-work typologies to a development scenario, along with a summary of general conditions needed for the typology to succeed, are described below. (Also see Task 97

1: Background Research & Case Studies for more in-depth information and research on the identified typologies.) Development Scenario: Technology and Innovation. This scenario could be implemented with any of the live-work typologies, but is best suited for the innovation district typology and the live-work building typology. Innovation districts need to be located outside of the primary commercial core, but require good access to public transit, e.g. Boston’s Seaport district, located outside of downtown but connected to subway lines. This typology usually requires a large institutional or tech anchor, such as IBM in Research Triangle Park in Raleigh, NC. Innovation districts thrive when they are associated with a vibrant mixed-use neighborhood with adequate retail, restaurants, and other amenities that add value for employees in the area. The typology benefits from a mix of public and private investment, especially regarding infrastructure such as highspeed fiber optic internet cable or the bolstering of public transit. The live-work building typology can also accommodate this development scenario. This typology, according to case study research, is often associated with adaptive reuse properties. Tech companies, from startups to well-established businesses, prefer office spaces at lower rents and are often attracted to adaptive reuse properties. A livework building contains collaborative communal spaces with additional shared resources (e.g. gallery space or costly equipment). Shared spaces encourage the cross-pollination of ideas, and shared resources help to control overhead costs. A live-work building has the potential to add value to challenged properties by offering both commercial and residential space, hence expanding market catchment. This typology is most commonly associated with the arts industry and class C office spaces, which are preferred by tech companies. Development Scenario: Commercial and Fine Arts. The needs of this sector are best met with the live-work apartment and live-work building typologies. The apartment typology combines living and workspace in a singular unit. A live-work building contains collaborative communal spaces with additional shared resources (e.g. gallery space or costly equipment). Both of these typologies, if developed within the correct market and/or location, can address the necessarily low rental costs of the target market. LIVE-WORK TYPOLOGY ANALYSIS

TYPOLOGY TEST FIT: LIVE-WORK BUILDING

Development Scenario: Maker Economy. The needs of this sector are best met with the live work building and live-work mixed-use typologies. A live-work building contains collaborative communal spaces with additional shared resources (e.g. retail selling space or costly equipment). A live-work mixed-use offers an inherent affordability with shared resources, making it ideal for industries that rely on clustering and need the ability to scale their operations in line with market demands.

The addition of Cornell Tech’s campus on Roosevelt Island, beginning in 2017, will provide a strong tech anchor in the area (see figure 3-3). It is clear from case study research that universities or colleges attract startups and established tech companies (e.g. MIT has been a major factor in the relocation of companies to the Kendall Square innovation district). Other anchors have been drawn to the area in recent years including the City University of New York Law School with a new 441,484 square foot campus that opened in fall 2012.

Development Scenario: Class C Office Mix. A class C office space development scenario would be best implemented as a live-work mixed-use building. Unlike a standard live-work building, this typology does not cater to one specific work sector. Rather, a live-work mixeduse building offers workspace to an array of industries, making it suitable to a mix of office tenants. The typology requires a market demand for affordable spaces with shared resources, and typically attracts startup companies and small businesses.

Since the implementation of the Special Long Island City Mixed-Use District, there has been a robust market for development, in particular residential. The neighborhood has had steady population growth during the past decade, and residents have higher wages than the NYC average (LIC’s average annual income is over 61,000, which is in the top 20% of NYC).

Development Scenario: Diverse Light Industry. This development scenario requires an array of different space types and a broad, diverse target market. Because of the variety of spatial requirements and the need for flexibility of layout, the live-work mixed-use building typology is best suited for this scenario. The live-work building typology also has the potential to succeed, but because this typology is dedicated to a single sector, there would have to be a clear indication of the target industry. Site Context Long Island City is close and adequately connected to the Manhattan commercial core. The existing large-plate buildings provide development options for adaptive reuse and are made more appealing due to their waterfront location, view of Manhattan, and below-average market price. One example of these large buildings is the Department of Education building at 44th Drive, near the waterfront. Another example is 28-11 Queens Plaza North, which was chosen as one of the test-fit scenarios (see figure 3-6).

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

High-Level Financial Considerations The commercial and fine arts scenario may be feasible to incorporate into the neighborhood due to the inherent adaptive reuse opportunities. Because this target market requires lower rents, a scenario involving new construction would require subsidies similar to inclusionary housing, such as the 421a tax abatement, but retooled to encourage live-work. Class C office space requires relatively little financial investment when compared to the health and medical sector or compared to capitalintensive manufacturing work. A mix of light industrial uses requires the added costs of slightly more robust construction, which the neighborhood’s adaptive reuse opportunities would provide. The loading docks that were originally built, as part of these large warehouses, would serve a maker economy scenario. Neighborhood Test-Fits The mix of manufacturing and technology companies, along with a burgeoning 24-7 mixed-use atmosphere, has resulted in an ad hoc innovation district. This could be further cultivated by the formation of an organization dedicated to an innovation district, such as the public

and private investment in infrastructural upgrades, incentive strategies to attract larger tech companies. The innovation district typology would face challenges due to the lack of available development sites. The live-work building typology was selected for implementing test-fits in Long Island City. Because of the neighborhood’s strong residential market, it is necessary to either develop city-owned properties that can be incentivized to provide live-work strategies, or to use marketrate residential units to subsidize the workspaces and more affordable units for the workers using those spaces. For the former (incentivizing workspace within development), a strong case study can be found in downtown Columbus Ohio. The “Mile on High” package of incentives includes a “Downtown Office Incentive” that provides grants equal to 50% of local income tax withholdings for a period equal to a lease term minus 2 years (not to exceed a maximum of 5 years). The qualifications for participation include a lease or purchase office space and the creation or relocation of 10 new full-time jobs to the targeted area downtown. As is sometimes seen with 421a Inclusionary Housing program in the LIC neighborhood, market-rate units do not always subsidize affordable units. It can be assumed that a similar challenge will arise when developing a live-work building in LIC. Therefore, it is recommended that city-owned properties be considered for implementing the live-work building typology (see figure 3-5), because the City can control the sale process and gauge developer interest for the typology. The City should support this typology because it has the potential to grow the number of affordable housing units while supporting commercial/manufacturing activity. Two potential sites were chosen: one at the intersection of Queens Plaza and 29th Street (Block 417, Lot 2), and the other at 11-36 45th Road (Block 54, Lot 6). See figures 3-6, 3-7, 3-8, and 3-9. In both of these test-fits, the properties are challenged due to large floor plates that would not normally be chosen for a standard residential project. The current zoning of these properties is Test-fit 1: 28-11 Queens Plaza North. This is a city-owned property (Department of Education) that contains an existing 9-story building. The zoning is an M1-5/R9 paired district. The size of the building is

188,542 square feet, which translates to 7.32 of the allowable 8.0 FAR. The floor plates are too large for a standard residential development. The property is therefore, conceptually, on the “market edge” within the otherwise strong residential market of Long Island City due to the spatial difficulty of converting to residential. However, the building’s large floor plates are ideal for a Live-Work Building (see the sub-typology from Chapter 1, which provides shared work areas on most of the residential floors). The lower levels can contain contiguous, common workspaces. The extra space on the residential floors can contain shared work areas adjacent to residential apartments. Test-fit 2: 11-36 45th Road. This is a city-owned property that contains an existing under-built structure. The zoning is an M1-4/R6A paired district. The property is therefore on the “market edge” within the otherwise strong residential market of Long Island City. The property is currently under-built, using only 1.62 of the allowable 3.0 FAR. Therefore, residential units can be added to the existing building. The large floor plates of the existing building can contain shared workspaces, which smaller residential floors above. On the 46th Avenue side, the livework townhouse sub-typology (see Chapter 1) can be implemented for artisans, craftspeople, or artists. A mix of class C office spaces for startup companies and small business, along with incubator spaces for tech companies, is a viable development scenario for both test-fits, due to the high demand of class C space throughout NYC. Also feasible is a mix of light manufacturing tenants as part of a maker economy scenario, as long as the particular uses are compatible with residential use. Two high-level net present value (NPV) calculations were examined alongside test-fits for two different sites in the Long Island City neighborhood (see figures 3-10, 3-11, 3-12, and 3-13). The results for both test-fits show a positive return on investment and depict feasible developments for live-work mixed-use buildings. Based on our cost and income assumptions, there is no need for public subsidies. However, the properties may have to be sold to the developers at a rate below market value, as is assumed in the high-level cost projections.

LIVE-WORK TYPOLOGY ANALYSIS

TYPOLOGY TEST FIT: LIVE-WORK BUILDING

Next Steps: Long Island City — Live-Work Building • 28-11 Queens Plaza North (Block 417 Lot 2) will be an adaptive reuse project with approximately 203,000 above-grade zoning square feet. The property at 11-36 45 Road (Block 54 Lot 6) will include adaptive reuse of approximately 56,000 zoning square feet of an existing school, as well as approximately 67,000 zoning square feet of new construction above grade. The next step for both of these properties require a full formal building survey of interior, exterior and associated environmental testing. • Identify existing tenancies for relocation and develop relocation plan as required. • The test-fits assume that rezoning is not needed. However, developers should be informed of the city’s desire to implement a live-work building on these sites. • Issue two RFP’s to developers for the live-work building testfits: Block 417 Lot 2, and Block 54 Lot 6. • From this study, the test fits suggest a conceptual building program that includes a ratio of 50-60% residential, 20-30% workspace, and 10-15% retail (see Figures 3-7 and 3-9) is viable.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

100

FIGURE 3.3-0 BIRDâ&#x20AC;&#x2122;S EYE VIEW OF LIC

101

LIVE-WORK TYPOLOGY ANALYSIS

Figure 3-1

FIGURE 3.3-1 The Special Long Island City Special Mixed

The Use Special Long Island City Special Mixed Use District utilizes paired districts that District utilizes Figure 3-1 paired districts that allow both allow both and residential manufacturing andmanufacturing residential development.

development. The Special Long Island City Special Mixed KEY MAPutilizes paired districts that Use District allow both manufacturing and residential development. KEY MAP

â&#x20AC;˘

Special LIC Mixed Use District Special LIC Mixed Use District

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

102

Figure 3-2

FIGURE 3.3-2

The neighborhood’s thriving art community

The thriving is neighborhood’s anchored by MOMA’s PS1. art The community culture and identity of LIC is enhanced with the mix is anchored by MoMa’s PS1. The culture of artisans, film studios, and 3D-printing and identity of LIC is enhanced with the mix companies. of artisans, film studios, and 3D-printing The planned Cornell Tech campus and LaGuardia companies.

Community College can help strengthen the neighborhood’s burgeoning startup culture.

The planned Cornell Tech campus and Laguardia Community College can help strengthen the neighborhood’s burgeoning startup culture.

103

LIVE-WORK TYPOLOGY ANALYSIS

Figure 3-3

FIGURE 3.3-3

Tech anchors such as the planned Cornell

Tech anchors as the planned Cornell Tech Techsuch campus, one subway stop away, will campus, one subway stop away, will attract attract startup companies to the area and will startup companies to the area and will bolster the existing small tech in the area. bolster the businesses existing small tech businesses in

the area.

10 â&#x20AC;&#x2122;T M

CO R

LL TE CH M

W ITH

11th

M M M M ve nA

kso

Jac

M M

Queens B

lvd

M M

LEGEND Lon g Is

FERRY M

SUBWAY STATION

land E xpy

SUBWAY LINE TRAIN LINE

500

1000

2000 ft

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

104

Net absorption for the overall New York City office market was positive 3,894,934 square feet in the fourth quarter 2014. That compares to positive 1,813,064 square feet in the third Class A Market Statistics Existing Inventory Market

# Blds

Downtown

Vacancy

Total RBA

Direct SF

84,068,479

9,754,515

Vacancy Rates340 by Class 1994-2014 221,852,566 16,313,110

Midtown

Midtown South

compared to negative (192,828) square feet in the third quarter 2014, negative (123,297) in the second quarter 2014, and Year-End 2014 positive 41,238 in the first quarter 2014.

15,281,241

1,132,000

543,205

YTD Net

YTD

Under

Quoted

Total SF

Vac %

Absorption

Deliveries

Const SF

Rates

10,375,954

12.3%

3,626,528

3,038,168

2,861,402

$49.88

18,542,688

8.4%

1,388,851

2,967,859

$66.13

755,135

114,000

$88.20

Total Market

625,961

4.1%

16%

Uptown

14%

Totals

456

322,334,286

0 26,610,830

0.0%

29,544,603

9.2%

5,770,514

0 3,038,168

$0.00

5,943,261

$59.16

12%

Vacancy Rate

Source: CoStar Property®

10%

Class B Market Statistics

Year-End 2014

Existing Inventory

Market

# Blds

4% Downtown

160

Midtown

Vacancy

Total RBA 29,612,731

569

68,303,476

Direct SF

Total SF

Vac %

1,522,445

1,755,994

5.9%

3,431,828

3,674,471

5.4%

YTD Net

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

$41.80

$53.71

(73,071) 774,093

Midtown South 483 57,484,587 3,920,702 7.4% 44,500 117,588 $64.25 1994 3q1995 3q1996 3q1997 3q1998 3q1999 3q2000 3q2001 3q2002 3q20034,273,502 3q2004 3q2005 3q 2006 3q2007249,650 3q2008 3q2009 3q2010 3q2011 3q2012 3q2013 3q 2014 3q Source: CoStar Property®

Uptown Totals

172

6,892,383

362,606

5.3%

46,243

1,384

162,293,177

9,237,581

10,066,573

6.2%

996,915

Absorption & Deliveries

Past 10 Quarters Deliveries

New York City

Existing Inventory

4.0 Market

# Blds

Millions SF

Downtown 3.0 2.0 Midtown 1.0 South Midtown

2.72 9,591,969

662

28,197,964

783

0.62 29,323,390

0.010.02 0.00

0.00

0.0

Uptown

301

(1.0) Totals (0.83)

2012 3q

2,009 (1.29) 2013 1q

Direct SF

263

1.18 1.01 1.17

0.88

3.89

Total RBA

0.00

3.08

Vacancy Total SF 637,663

160,359

$55.22 1

1,134,519

1,472,146

1.81

YTD

Under

Quoted

Absorption

Deliveries

Const SF

Rates

$47.99

1,256,481

8.0% 4.5%

(328,864)

$45.22

1,559,418

6.0% 5.3%

(63,424)

$54.49

4.8%

(45,465)

$37.55

2.0%

(479,929)

0.04

298,286

309,193

73,584,534

3,506,633

3,762,755

(0.98)

2014

YTD Net

(42,176)

6,471,211

(0.04)

United States Year-End

6.6% 10.0%

4.0%

5.1%

$48.84

0.0% 2013 3q

2014 1q

2012 3q

2014 3q

Source: CoStar Property®

Market

12.0% Vac %

601,682

Total Office Market Statistics 105

14.0%

Vacancy Rate

Net Absorption

5.0

(2.0)

$50.98

Past 10 Quarters

Class C Market Statistics

Source: CoStar Property®

80,500

42,771

U.S. Vacancy Comparison

The CoStar Office Report

Source: CoStar Property®

0.00

36,000

Existing Inventory # Blds

Total RBA

Source: CoStar Property®

Vacancy Direct SF

Total SF

Vac %

2013 1q

2013 3q

2014 1q

2014 3q

Year-End 2014

YTD Net YTD Under LIVE-WORK TYPOLOGY ANALYSIS Absorption Deliveries Const SF

Quoted Rates

FIGURE 3.3-4 Manhattan class C office space is in high demand, forcing many companies to look to the other boroughs for affordable space.

Figure 3-5 Figure 3-5

FIGURE 3.3-5

e Av

ks Jac

11th

It is recommended to utilize a City-owned property It is recommended for the implementation to utilize of a City-owned the liveIt is recommended to utilize a City-owned workproperty building for typology implementation in LIC. The strong of the liveproperty for thethe implementation of the live-work building typology in LIC. The strong residential residential work building market typology in the neighborhood in LIC. The strong market in the neighborhood makes it unfeasible makes residential unfeasible market to touse insubsidize the market-rate neighborhood toituse market-rate units workspace units and the associated living space for workers. to subsidize makes itworkspace unfeasible to and use themarket-rate associatedunits livingtospace subsidize for workers. workspace and the associated living space for workers.

son

k Jac

e Av

Long Isla nd E Lonxgpy Isla nd E

Queens

Blvd Queens

Blvd

xp y

LEGEND LEGEND CITY-OWNED PARCELS CITY-OWNED PARCELS

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

106

FIGURE 3.3-6A TEST-FIT 1: BLOCK 417, LOT 2 (28-11 Queens Plaza North) Photo of 28-11 Queens Plaza North - LIC Test Fit 1.

107

LIVE-WORK TYPOLOGY ANALYSIS

Figure 3-6

FIGURE 3.3-6B

Test-fit 1: Block 417, Lot 2 1: BLOCK (28-11TEST-FIT Queens Plaza North) 417, (28-11 Queens Plaza North)

LOT 2 th

41 e Av e

Q a

Pl th

This is a city-owned property that contains This is a city-owned property that contains an an existing building. The floor plates are too existing building. The floor plates are too large for a large for a standard residential development. standard residential development. The property The property is therefore on the “market edge” is therefore “marketstrong edge”residential within the otherwise withinon thethe otherwise market of Long Island City. strong residential market of Long Island City. The building’s large floor plates are ideal for a The building’s large floor plates are ideal for Live-Work Building. The lower levels can contain a Live-Work Building. The lower levels can contiguous, common workspaces. The extraThe contain contiguous, common workspaces. space on space the residential floors can contain shared extra on the residential floors can contain shared work areas adjacent to residential work areas adjacent to residential apartments. apartments. The zoning is an M1-5/R9 paired district.

eet Str

The zoning is an M1-5/R9 paired district.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

108

Figure 3-7

FIGURE 3.3-7

Test-fit 1: Block 417, Lot 2

TEST-FIT 1: BLOCK (28-11 Queens Plaza North) 417, LOT 2 (28-11 Queens Plaza North) Long Island City

Test Fit 1

28-11 Queens Plaza North

General Information 1 1 E

th 28

eet Str

Lot Area (SF)

25,762

Total Zoning Square Feet (ZSF)

N E L A

Above-grade Gross Floor Area (GFA)

188,542

Below-grade Gross Floor Area (GFA)

25,000

Number of Levels

9 Floors

108 Feet

A A

Programmatic Information

41 e Av

Residential

Zoning Square Gross Floor Feet Area 94,150

Apartments (Net Area) 1 1

Lobby

1,000

Amenities

2,000

Circulation / Core

Workspace

E N E

R L

O E IC

A E

R A

40,000

General Office Area

20,000

Conference Rooms

5,000

a N 1

th or

3,804

Circulation / Core

L A A E R R E A N E E C G FI F O IL TA E

Retail

10,199 20,000

20,800

AN TR

EN CE

E C N E R S E F M N O O O R IL TA

H R C O E T T BA U C

Public Area

Storage / Support / MEP

Circulation / Core

LIVE-WORK TYPOLOGY ANALYSIS

84,995

Tech Incubator

Basement

25,000

Parking

11,000

Amenities

4,000

Storage / MEP

3,000

TOTALS

109

16,646 81,726

Support / MEP

az Pl

E C

e ue

TR EN

T EN

97,916

44,814

195,876

161,463

Figure 3-8

FIGURE 3.3-8

Test-fit 2: Block 54, Lot 6 TEST-FIT 2: BLOCK (11-36 45 Road) th (11-36 45 Road)

54, LOT 6

45 ue

en Av

45 ad

The zoning is an M1-4/R6A paired district.

ee Str

H IT CE W A S P E S S K U R O O H W N E W T O A T RIV P

This is a city-owned property that contains an This is a city-owned property that contains an existing under-built structure. The property is existing under-built structure. The property thereforeisontherefore the “market edge” within the otherwise on the “market edge” within the strong residential Long Island City.of Long otherwise market strong of residential market IslandisCity. The property currently under-built, using only 1.62 of the allowable 3.0 FAR. Therefore, residential property is currently under-built, using units canThe be added to the existing building. The only 1.62 of the allowable 3.0 FAR. Therefore, large floor plates of the building contain residential units existing can be added to can the existing shared workspaces. building. The large floor plates of the existing building contain shared The zoning is ancan M1-4/R6A pairedworkspaces. district.

1th

t 1s

ee Str

46 e

u en Av

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

110

Figure 3-7

th 11

FIGURE 3.3-9

t ee Str

Test-fit 1: Block 417, Lot 2

2: BLOCK 54, LOT 6 (28-11TEST-FIT Queens Plaza North) (11-36 45th Road) 2

Long Island City

Test Fit 1

General Information

Lot Area (SF)

th 45 e Av

e nu

1 1

IC L B A U E P R

L A A R E E R N A E E G IC

L A A R E E R N A E E G IC F F O

Residential

IC L B A U E P R

LIV

E LIV

45 ad Ro

H R C O E T T BA U C

111

94,150

1,000

Amenities

2,000 16,646 81,726

84,995

Tech Incubator

40,000

General Office Area

20,000

Conference Rooms

5,000 3,804

Circulation / Core Retail

10,199 20,000

20,800

Public Area

Storage / Support / MEP

0 0

Basement

25,000

Parking

11,000

Amenities

4,000

Storage / MEP

3,000

TOTALS t ee LIVE-WORK TYPOLOGYtrANALYSIS tS s 21

97,916

44,814

Circulation / Core

H IT CE W A S P E S S K U R O O H W N E W T O A T RIV P

RK E WO PAC S RK E WO PAC S RK E E LIV WO PAC S RK E E WO PAC LIV S RK E E LIV WO PAC S RK E E WO PAC LIV S RK E E LIV WO PAC S E LIV

Zoning Square Gross Floor Feet Area

Support / MEP

E C N E R S E F M N O O RO

IVE

LIV

108 Feet

Lobby

Workspace

E LIV

25,000 9 Floors

Circulation / Core

TA E

E LIV

188,542

Apartments (Net Area)

IVE

Above-grade Gross Floor Area (GFA)

Programmatic Information

Total Zoning Square Feet (ZSF)

Number of Levels

IVE

25,762

Below-grade Gross Floor Area (GFA)

R L A A R E E R N A E E G IC F F

LIV

28-11 Queens Plaza North

195,876

161,463

re 3-10

Long Island City

Test Fit 1

FIGURE fit 1: Block 54, Lot3.3-10 6

evel Net Present Value (NVP) Analysis, Part 1

TEST-FIT 1: BLOCK 417, LOT 2 (28-11 Queens Plaza North)

Block 417 / Lot 2 28-11 Queens Plaza North

General Information Lot Area (SF)

25,762

Above-grade Gross Floor Area (GFA)

188,542

Below-grade Gross Floor Area (GFA) Number of Levels

$1,277,134

Based on Information obtained from Property Shark

25,000 9 Floors

108 Feet Cost / SF

Zoning Square Gross Floor Area Feet Residential

$29,181,000

Annual Taxes

Programmatic Information

High-level Net Present Value (NVP) Analysis, Part 1

Projected Value

Total Zoning Square Feet (ZSF)

94,150

Apartments (Net Area)

Cost

Rent / SF

Rental Income

97,916 $200

$8,962,800

$55

Lobby

1,000

$275

$275,000

$55

$55,000

Amenities

2,000

$225

$450,000

$55

$110,000

16,646

$150

$2,496,858

Circulation / Core 81,726

84,995 40,000

$225

$9,000,000

$55

$2,200,000

General Office Area

20,000

$275

$5,500,000

$60

$1,200,000

Conference Rooms

5,000

$225

$1,125,000

$60

$300,000

Support / MEP

3,804

$200

$760,800

10,199

$150

$1,529,911 $2,640,000

$110

$968,000

$110

$330,000

Circulation / Core 20,000

20,800

Public Area

8,800

$300

Storage / Support / MEP

3,000

$250

$750,000

Circulation / Core

9,000

$225

$2,025,000

Basement

25,000

Parking

11,000

$180

$1,980,000

Amenities

4,000

$250

$1,000,000

Storage / MEP

3,000

$150

$450,000

TOTALS

195,876

Soft Costs and Site Preparation

182,263

$9.05

$886,140

$16.00

$1,359,921

$16.00

$332,800

$4.00

$100,000

$2,464,770

Tech Incubator

Retail

Operating Expenses

Based on annual cost survey by Based on rental information from Based on information from NAAHQ Trulia and LoopNet Turner & Townsend and BOMA

44,814

Workspace

Expenses per SF

$38,945,369 25%

Land Acquisition

TOTAL PROJECT COST

$9,736,342 $29,181,000

$77,862,711

ANNUAL INCOME / EXPENSE

$7,627,770

NOI

$3,671,776

CAP RATE

$3,955,994

4.7%

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

112

FIGURE 3.3-11 TEST-FIT 1: BLOCK 417, LOT 2 (28-11 Queens Plaza North) High-level Net Present Value (NVP) Analysis, Part 2

113

LIVE-WORK TYPOLOGY ANALYSIS

gure 3-12

Long Island City

Test Fit 2

est-fit 2: Block 54, Lot 6 FIGURE 3.3-12

gh-level Net Present Value (NVP) Analysis, Part 1

TEST-FIT 2: BLOCK 54, LOT 6 (11-36 45th Road)

Block 54 / Lot 6 11-36 45th Road

General Information Lot Area (SF)

34,500

Projected Value

Total Zoning Square Feet (ZSF)

56,000

Annual Taxes

Above-grade Gross Floor Area (GFA)

58,240

Based on Information obtained from Property Shark

Below-grade Gross Floor Area (GFA) Number of Levels

$8,669,000 $144,698

33,000 5 Floors

65 Feet

Programmatic Information

Cost / SF

Cost

Rent / SF

Rental Income

Expenses per SF

Operating Expenses

Zoning Square Gross Floor Based on annual cost survey by Based on rental information from Based on information from NAAHQ Turner & Townsend Trulia and LoopNet Feet Area and BOMA Residential

High-level Net Present Value (NVP) Analysis, Part 1

59,059

Apartments (Net Area)

61,421 44,814

$200

$8,962,800

$45

$2,016,630

Lobby

1,000

$275

$275,000

$45

$45,000

Amenities

2,000

$225

$450,000

$45

$90,000

10,442

$150

$1,566,245

Circulation / Core Workspace

44,441

46,219

Tech Incubator

18,000

$225

$4,050,000

$55

$990,000

General Office Area

10,000

$275

$2,750,000

$60

$600,000

Conference Rooms

3,500

$225

$787,500

$60

$210,000

Support / MEP

3,804

$200

$760,800

5,546

$150

$831,936 $2,700,000

$110

$990,000

$110

$220,000

Circulation / Core Retail

15,000

15,600

Public Area

9,000

$300

Storage / Support / MEP

2,000

$250

$500,000

Circulation / Core

4,600

$225

$1,035,000

Basement

33,000

Parking

11,000

$180

$1,980,000

Amenities

4,000

$250

$1,000,000

Storage / MEP

3,000

$150

$450,000

TOTALS

118,500

Soft Costs and Site Preparation

132,706

$555,863

$16.00

$739,498

$16.00

$249,600

$4.00

$132,000

$28,099,280 25%

$7,024,820

Land Acquisition

TOTAL PROJECT COST

$9.05

$8,669,000

$43,793,100

ANNUAL INCOME / EXPENSE

$5,161,630

NOI

$3,339,970

CAP RATE

$1,821,660

7.6%

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

114

Figure 3-13

FIGURE 3.3-13

Test-fit 2: Block 54, Lot 6 High-level Net Present Value (NVP) Analysis, Part 2 Long Island City | 11-36 45 Road

TEST-FIT 2: BLOCK 54, LOT 6 (11-36 45th Road)

ASSUMPTIONS Annual Gross Rent, first year Vacancy and Collection factor Operating Expenses, first year Annual % change in rent Annual % change in expenses Loan to Value ratio Stated Annual Interest rate Loan Term (years) Percent of price in improvements CPI Annual Increase After tax, Real Discount rate Cap Rate assumed at date of sale Transaction costs as % of sales price Cap Rate at Purchase

5,161,630 5% 1,821,660 2.0% 2.0% 75.0% 4.5% 25 85.0% 3.0% 8.0% 7.6% 10.0% 7.6%

DEFINED VARIABLES

High-level Net Present Value (NVP) Analysis, Part 2

Source

Recovery period (years) Income tax rate (Corporate) Capital Gains tax rate

Property Valuation:

NOI Assumptions

39 34.0% 15.0%

Omnibus Budget Reconciliation Act of 1993 IRS - Varies based on taxable income IRS - Varies based on income tax bracket

63,566,227.70

ECONOMIC VALUES, CALCULATED BY MODEL Loan Amount Equity Required Mortgage Loan Constant

47,674,671 15,891,557 6.74%

DECISION ANALYSIS FACTORS year

Real Cash Flow to Owner Present Value of Real Cash Flow

NPV of Real Cash Flow: After Tax Real Internal Rate of Return:

115

0 -15,891,557 -15,891,557

1 1,150,502 1,065,279

2 -259,230 -222,248

3 4,201,120 3,334,985

4 4,122,032 3,029,816

5 4,044,441 2,752,579

15,583,689.39 19.31%

LIVE-WORK TYPOLOGY ANALYSIS

6 3,968,307 2,500,706

7 3,893,589 2,271,872

8 3,820,248 2,063,961

9 3,748,246 1,875,056

10 27,641,235 12,803,240

0 0

TYPOLOGY TEST FIT: INNOVATION DISTRICT DOWNTOWN STATEN ISLAND • AGE - 35% are 20-44; 27% are 0-18 • INCOMES - $52,000 to $55,000 HH • UNEMPLOYMENT - 8 to 9% unemployment • BUILDING STOCK - Wide range of residential, retail, commercial, and industrial buildings • ANCHORS INSTITUTIONS - Civic, Richmond County Medical Center • CONNECTION TO TRANSIT Connection strong, but service is less strong • GENERAL MARKET STRENGTH Moderate signs of significant growth associated with the Wheel and Outlets. • KEY INDUSTRIES - Arts & Culture, Food; nascent Tech, Health Care

Implication for Live-Work Implementation In response to the market pressures along the waterfront, the implementation of live-work typologies in Staten Island can spur local job growth and expand the character of the downtown neighborhood. The strength of the NYC residential market and the tourist industry have already gathered force to transform the waterfront with investment, The Wheel’ and Empire Factory Outlets alongside Lighthouse Point and the New Stapleton Waterfront (see figure 4-1). These projects create destination retail and build on the residential feel of Staten Island offering medium density mixed-use development. In contrast, to the retail and tourist trade, the introduction of live-work typologies to Staten Island can create well paying local jobs and establish a 24/7 character. Typified by direct connections to downtown Manhattan and up to five times the average discount for land prices (source: Property Shark, June 2015), downtown Staten Island and its vicinity are well positioned to support a live work downtown within earshot of the closing bell. Live work conversions of existing post-manufacturing structures along Bay Street south from the ferry terminal to the New Stapleton Waterfront could help to identify Staten Island as a job center. Additionally, larger parcels that may accommodate appropriately scaled live-work development are also present along the existing Staten Island Railroad corridor (see figure 4-2). Often a detriment to urban development there is a mix of zoning types along Victory Boulevard. Perhaps this confluence of mixed zoning may be capitalized upon to create a balanced vision of live-work and open space, and thereby, knitting these transitions into a vibrant connected heart of a live-work community (see figure 4-3). Industries Favorable to Live-Work in Staten Island Staten Island is characterized as the least dense and least populated borough (pop: 472,621) of the City of New York. Often overlooked due to this fact, Staten Island’s real estate may in fact offer a unique opportunity in New York City to the industries that favor the live-work typology. And more specifically, as the market in Staten Island can deliver on quality of life issues with waterfront locations and downtown Manhattan views all at discount prices.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

Technology and Innovation: This industry includes a wide variety of scale, from small startups to tech giants such as Google. Businesses in this sector require high-speed broadband Internet and a frictionless work environment (e.g. flexible interior layout and flexible building systems). Small companies and startups tend to locate near larger anchor companies (e.g. as with Amazon’s campus in Seattle, WA), or near universities with strong technology curricula (e.g. as with MIT in Cambridge, MA). In general, businesses in this industry favor clustering near one another in order to share knowledge and resources. Tourism/Destination Retail: Tourism is a $1.4 trillion industry (source: World Tourism Organization UNWTO), providing people with countless opportunities to travel almost anywhere and do almost anything. Envisioned as a combination between the most visited tourist attraction in New York State, the destination retail outlets - Woodbury Commons, with the London ‘Eye, ‘The Wheel’ and Empire Factory Outlets will catapult the north shore of Staten Island to be one of the most visited tourist destinations in NYC. Currently over 1.5 Million tourists ride the Staten Island Ferry annually and will certainly grow. Any development scenario proposed for Staten Island cannot ignore the impacts of this change. As a component of a live work scenario the tourism/destination retail industry can become an anchor to draw upon. Perhaps, similar in nature to the tourism bureaus and information industries clustered around Times Square, this development scenario could respond as a 21st Century Tech Industry/Tourism/Retail mash up. Offering small innovative start up space for tourism focused app makers or larger scale workspace for the likes of a Yelp or Expedia. Maker Economy: The term “maker economy” refers to a broadly defined movement of artisans, crafters, and independent inventors that are usually small in scale and operate locally. Maker economies are commonly comprised of light manufacturers and artisans but can include industrial scale artists and pioneering creative professionals. This industry relies on the clustering of associated businesses, suppliers, and institutions to increase productivity. Additionally, businesses strive for geographic proximity to clients and/or consumers in order to further

116

increase retail opportunities to local markets. This industry favors affordable, flexible light industrial spaces that allow manufacturing operations to scale appropriately. Potential Typologies for Consideration Certain live-work typologies have the potential to meet the needs of the above development scenarios. The reasons for pairing particular livework typologies to a development scenario, along with a summary of general conditions needed for the typology to succeed, are described below. (Also see Task 1: Background Research & Case Studies for more in-depth information and research on the identified typologies.) Development Scenario: Technology and Innovation. This scenario could be implemented with any of the live-work typologies, but is best suited for the innovation district typology and the live-work building typology. Innovation districts need to be located outside of the primary commercial core, but require good access to public transit, e.g. Boston’s Seaport district, located outside of downtown but connected to subway lines. This typology usually requires a large institutional or tech anchor, such as IBM in Research Triangle Park in Raleigh, NC. Innovation districts thrive when they are associated with a vibrant mixed-use neighborhood with adequate retail, restaurants, and other amenities that add value for employees in the area. The typology benefits from a mix of public and private investment, especially regarding infrastructure such as high-speed fiber optic internet cable or the bolstering of public transit. The live-work building typology can also accommodate this development scenario. This typology, according to case study research, is often associated with adaptive reuse properties. Tech companies, from startups to well-established businesses, prefer office spaces at lower rents and are often attracted to adaptive reuse properties. A livework building contains collaborative communal spaces with additional shared resources (e.g. gallery space or costly equipment). Shared spaces encourage the cross-pollination of ideas, and shared resources help to control overhead costs. A live-work building has the potential to add value to challenged properties by offering both commercial and residential space, hence expanding market catchment. This typology 117

is most commonly associated with the arts industry and class C office spaces, which are preferred by tech companies. Development Scenario: Maker Economy. The needs of this sector are best met with the live work building and live-work mixed-use typologies. A live-work building contains collaborative communal spaces with additional shared resources (e.g. retail selling space or costly equipment). A live-work mixed-use offers an inherent affordability with shared resources, making it ideal for industries that rely on clustering and need the ability to scale their operations in line with market demands. Site Context Downtown Staten Island is positioned on New York City Harbor just south of Lower Manhattan. A unique NYC mass transit option, the Staten Island Ferry, connects the Island to the rest of the City. In addition the island affords excellent views of the harbor and lower Manhattan. Of additional importance, Staten Island prides itself with the 2nd fastest average Internet connection speed in the United States. (http://gcn. com/articles/2011/07/29/fastest-broadband-cities.aspx). A wide range of available building ‘stock’ and under developed sites, along with the proposed Tourism industry anchors, promises a positive outlook for development along the north shore of the island. Due to affordable real estate, the neighborhood is also home to emerging Tech enterprises such as Geothia, CaCash Corp, Kizbit Scooters, Superstring Group LLC, Caruso Apps, etc, Art & Culture institutes, and a variety of hospitality businesses. The waterfront is a valuable amenity that can be capitalized on for a unique life style environment a ferry ride from lower Manhattan. In the past, the live-work apartment typology has been implemented along commercially mapped streets such as Victory Blvd. housing local ground floor retail in two and three story residential fabric.

LIVE-WORK TYPOLOGY ANALYSIS

TYPOLOGY TEST FIT: INNOVATION DISTRICT

Financial Considerations The study area does not have a particularly strong market, however, it has experienced moderate growth (around 3.8 percent) in the past year. The land value for the area is 68.72 percent lower than the City average and therefore may encourage opportunistic development scenarios. The technology and innovation scenario may be feasible to incorporate into the neighborhood due to the offering of adaptive reuse, infill and new build opportunities. Additionally significant infrastructure investment, high speed IT, has already been made by the private sector. Tourism and destination retail will require public investments to improve local connectivity between the anchors (see Figure 4-1), the waterfront and future development. These investments should include wayfinding and signage, improving the pedestrian environment and perhaps creating a bike-sharing loop. This investment while not significant will help to improve the character of the experience and encourage crosspollination between the various venues offered as part of the north shore experience (see figures 4-4 and 4-5). The maker economy development scenario would be an attractive development model for the neighborhood. Although with the scale of opportunity in Staten Island, it may simply offer a piece of a larger scale vision. Because this target market requires lower rents, a scenario with adaptive reuse and potential subsidies may be necessary to encourage this scenario. Neighborhood Test-Fits Except for the presence of a true technology anchor, an Innovation District with a focus towards the Technology industry is a typology ideally suited for Staten Island. As per the methodology statement/ introduction, the overall goal for this Live Work study was to test fit each of the typologies to a specific neighborhood. As none of the other neighborhoods offered the scale of underutilized real estate and a high-speed Internet connection we chose to test the innovation district in Staten Island. This is not to exclude other Live Work typologies from being implemented on the Island. In order to meet the requirements of The Brookings Institute’s definition for an innovation district it requires an industry anchor, we propose for the purpose of an implementation CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

model to consider the Tourism and Destination Retail industry as the ‘stand –in’ anchor for this Tech focused district. Perhaps utilizing the proximity to NYC’s next big tourist draw, ‘The Wheel’, can be enough of a catalyst to attract a Tourism focused Tech anchor at a future time (see figure 4-7). Simply speaking this is a traditional innovation district but without a defined anchor the typology will not be viable. Therefore as an implementation strategy we suggest that enhancing the existing connections between the district, the anchor industry, the waterfront and the Ferry (see figure 4-4) will fulfill this requirement of the industry until such a time as a true high tech anchor is identified and located. From our research per Task 1, Innovation Districts are physically compact, transit-accessible, and technically-wired and offer mixeduse housing, office, and retail. With the existing infrastructure in place on the north shore of the island and a connected anchor industry, we have few hurdles to create an innovation district. Defining the bounds and identifying program potential model are the steps. In order to define the bounds of the district, we have identified underutilized sites (see figure 4-2). It became clear that the area along Victory Blvd in combination with the underutilized Manufacturing District offered the greatest potential for an innovation district (see below next steps for identifying path forward with regards to ownership issues) . With an established innovation district program model from Kendall Square in Boston, we have created a boundary that best promises to meet the percentages of program as identified in the precedent (see figure 4-6). To fully establish a working model for implementation we have suggested a rezoning target for the Manufacturing district into an MX district with a suggested live-work density that achieves the program percentages across the entire area (see figure 4-8). Unlike other MX districts, a targeted zoning special district should be implemented as agreed with the community and private property owners that looks to achieve a balanced vision for an innovation district.

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Next Steps: Staten Island — Innovation District • Additional study is required to bring about an innovation district in Staten Island: o Expand analysis to include existing buildings o Identify and quantify soft sites (i.e. underutilized parcels) • Issue RFP to consultants to create a targeted master plan. • Create marketing plan, strategic plan and associated public realm improvements to attract an anchor employer. • Define a special district with up-zoning potential and prepare master plan with DCP to ensure appropriate level of interest and support from the private sector and community, such as upzoning targets against market proforma(s). • Identify catalytic projects within the bounds of the innovation district for early action with live-work building opportunities in mind.

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LIVE-WORK TYPOLOGY ANALYSIS

FIGURE 3.4-0 BIRDâ&#x20AC;&#x2122;S EYE VIEW OF DOWNTOWN STATEN ISLAND

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

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FIGURE 3.4-1

TT AN

â&#x20AC;&#x2122; TO 5 2

2 4

H AN

NEIGHBORHOOD ANCHORS

1 5

EXISTING ANCHORS 1

STATEN ISLAND FERRY TERMINAL

STATEN ISLAND YANKEES

NEW ANCHORS

THE NEW YORK WHEEL

EMPIRE OUTLET

LIGHTHOUSE POINT

NEW STAPLETON WATERFRONT

LEGEND STATEN ISLAND RAILWAY STATEN ISLAND FERRY

ANCHOR SITES FUTURE ANCHOR SITES

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LIVE-WORK TYPOLOGY ANALYSIS

500

1000

2000 ft

UNDERUTILIZED PROPERTIES

’ TO 5 2

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TT AN

FIGURE 3.4-2 M

H AN

Special LIC Mixed Use District

LEGEND LEGEND

STATEN ISLAND RAILWAY

STATEN ISLAND FERRY STATEN ISLAND RAILWAY

UNDERUTILIZED SITES STATEN ISLAND FERRY UNDERUTILIZED SITES

500

1000

500

1000

2000 ft

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

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FIGURE 3.4-3

VICTORY BLVD

BAY STREET

CONFLUENCE OF ZONING TYPES

ZONING COMMERCIAL COMMERCIAL OVERLAY MANUFACTURING HIGHER DENSITY RESIDENTIAL (FAR 1.25-2.43) LOWER DENSITY RESIDENTIAL (FAR 0.5-1.25) PARK

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LIVE-WORK TYPOLOGY ANALYSIS

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S BAY

500

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ST BAY T S ZER

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ALREADY PROPOSED NEW PROMENADE

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PROMENADE PROPOSED CITI BIKE NETWORK

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STATEN ISLAND FERRY

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CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

4 124

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PROPOSED PUBLIC PLAZA

LIVE-WORK TYPOLOGY ANALYSIS

100

200

500 ft

FIGURE 3.4-6 KENDAL SQUARE INNOVATION DISTRICT, BOSTON: PRECEDENT PROGRAM MIX

COMMUNITY FACILITIES INCUBATOR SPACE

RETAIL

MANUFACTURING

COMMUNITY FACILITIES

15%

OFFICE & CONFERENCE

30%

RESIDENTIAL

30%

MANUFACTURING

20%

Special LIC RESIDENTIAL Mixed Use 30% District

Manufacturing

Oﬃce Space, Conferen Hotel Residen9al

Retail (Cafés, Restaura

Retail (Groceries, Phar

COMMERCIAL

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41%

HOTEL

Program Mix for Kendal Square Innovation District in Boston

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

Kendal Square Program Mix Translated into NYC Zoning - Allowable Uses

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FIGURE 3.4-7 TOURISM TECH REVIEW FourSqaure - Headquarters located in New York City, additional offices in San Francisco and London - Total of 170 employees between all three spaces - Located near New York University - Funding from several companies including: Union Square Ventures, Oâ&#x20AC;&#x2122;Reilly AlphaTech Ventures, and Spark Capital Yelp - Headquarters in New York City, additional offices in San Francisco, Palo Alto, Phoenix, Chicago, London, Dublin, and Hamburg - Company size: 1001-5000 employees - Palo Alto is an innovation district; high concentration of tech companies and is an economic focal point of Silicon Valley.

Kayak - Headquarters located in Stamford Connecticut, additional offices in Massachusetts, Berlin, Switzerland, London, and Lithuania - Company size: 201-500 employees - Located near Stamford Innovation Center: community driven space suited for the exchange of ideas and resources in addition to an area to network and provide guidance for local businesses. Trip Advisor - Headquarters located in Newton Massachusetts, 45 additional locations worldwide - Company size: 1001-5000 employees - Located outside of Boston

Tourism/Related Degrees in NYC - Graduate Certificate in Tourism Management: NYU School of Professional Studies - Bachelor of Science in Hotel and Tourism Management: Orbitz NYU School of Professional Studies - Headquarters located in Chicago, additional - Associate degree in Hospitality Management: City offices in Texas, California, and Florida University of New York - Company size: 1001-5000 employees Bachelor of Science in Hospitality and Tourism - Located near the Fulton Market Innovation - Management: Pace University Lubin School of Business District

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LIVE-WORK TYPOLOGY ANALYSIS

Examples of tourism focused technology companies and local tourism educational programs.

TT AN

FIGURE 3.4-8 TT AN AM

BOUNDARY DEFINITION

25’

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COMMERCIAL OVERLAY COMMERCIAL LEGEND STATEN ISLAND RAILWAY MANUFACTURING COMMERCIAL OVERLAY STATEN ISLAND FERRY STATEN ISLAND RAILWAY RESIDENTIAL MANUFACTURING ILLUSTRATIVE STATEN ISLAND FERRYDISTRICT BOUNDARY RESIDENTIAL UNDERUTILIZED PROPERTIES - COLOR ILLUSTRATIVE DISTRICT ALLOWABLE BOUNDARY ZONING REPRESENTS UNDERUTILIZED PROPERTIES - COLOR REPRESENTS ALLOWABLE ZONING

H AN

10 8

7 8 9 9 2000 ft

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1 2 3 4 5 6 7 8 9 10 11

1 2 3 4 5 6

Block 497 497 487 487 487 487 488 488 488 503 503 502 502 500 500 498 498 498 Totals

Lot 9 1 80 60 112 42 65 53 9 1 19 1 34 24 1 5 1 74

Residential Uses 504 499 501 499 499 569 569 569 569 569 17 Totals

49 38 55 53 1 36 361 318 372 163 112

Commercial Uses 498 16 6 1 1 1 Totals

40 7 20 7502 245 7501

Site Area 20,840 14,039 41,867 15,880 229,318 7,940 72,000 88,265 53,422 28,525 24,900 23,000 11,173 18,054 16,870 18,580 9,488 6,000 700,161

FAR 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Allowable SF 20,840 14,039 41,867 15,880 229,318 7,940 72,000 88,265 53,422 28,525 24,900 23,000 11,173 18,054 16,870 18,580 9,488 6,000 700,161

24,748 12,360 6,141 6,600 11,327 14,825 39,713 33,796 10,080 20,120 5,227 184,937

1 0.5 0.5 0.5 0.5 1.25 0.5 0.5 0.5 0.5 1.25

24,748 6,180 3,071 3,300 5,664 18,531 19,857 16,898 5,040 10,060 6,534 119,882

39%

33,500 18,100 25,038 33,288 140,000 145,337 395,263

3.4 3.4 3.4 3.4 3.4 3.4

113,900 61,540 85,129 113,179 476,000 494,146 1,343,894

62%

41%

Total FAR SF

2,163,937

Illustrative program mix for an innovation district based upon existing parcels within the boundaries of a proposed district.

Existing to Remain

32%

20%

700,161

PROPOSED FAR SF New +

Totals =

700,161

Proposed % of District

Manufacturing Uses

Target % of District

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

ILLUSTRATIVE PROGRAM MIX

Current % of District

Parcels # - See Figure 4-8

FIGURE 3.4-9

21%

Additional residential SF to be accommodated in new MX District

119,882

1,136,063

1,255,945

38%

1,343,894

41%

2,163,937

1,136,063

3,300,000

* = Includes 9% of Community Facility

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LIVE-WORK TYPOLOGY ANALYSIS

With a large area of MX zoning (‘as of right’ allows a mix of residential and manufacturing uses) and extraordinary transit connections, the Southwest Bronx should typify the benefits of Live-Work zoning. Instead, the neighborhood is characterized by lost potential. Large industrial scale sites along the East River sit vacant or underutilized. The neighborhood has the lowest median listing price for residential properties in comparison to the rest of the City (see figure 5-1A) as well as one of the highest rent burdens (see figure 5-1B). An able and youthful workforce, 58% of the neighborhood population is between the ages of 20-64, find it difficult to find employment as confirmed by an unemployment rate of 16.2%. It is clear, the Southwest Bronx needs more than mixed-use zoning; the neighborhood needs a systematic approach that promotes a Live-Work community.

TYPOLOGY TEST FIT: LIVE NEAR PLANNING SOUTHWEST BRONX • AGE - 58% are ages 20 to 44; 31% under 18 • INCOMES - $36,542 HH • UNEMPLOYMENT - 16.2% unemployment; 36.5% poverty • BUILDING STOCK - Low rise industrial with underutilized sites • ANCHORS INSTITUTIONS - Hostos Community College, Lincoln Hospital, and the Yankees • CONNECTION TO TRANSIT - Very Strong • GENERAL MARKET STRENGTH Weak market; increasing external investment • KEY INDUSTRIES - Health, furniture, moving/ storage; existing MX zoning

Implication for Live-Work Implementation The implementation of appropriately supported live-work typologies in the Southwest Bronx would create jobs and residential units in the neighborhood. The opportunity for adaptive re-use of existing building stock as well as new live/work development are present. In addition to the jobs associated with new workspaces, an increase of more affordable residential units in the area would increase demand for new service industry jobs while supporting the existing job base anchors. Live-work typologies, by definition, promote a mix of uses and can thus add value to a neighborhood by targeting tenants requiring residential and work functions. In the Southwest Bronx, live-work strategies can also help to preserve and grow the institutional, sports & entertainment and manufacturing job base while responding to residential market pressures from across the Harlem River. The abundance of large underutilized MX zoned parcels along the waterfront, as well as, underutilized properties within the residential fabric (see figure 5-2), offers the potential for a significant amount of infill development. Live-work typologies have the potential to unlock value in properties by combining the demand and calibrating the supply for residential and workspace.

CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

Industries Favorable to Live-Work in the Southwest Bronx The Southwest Bronx neighborhood could support Live-Work development scenarios related to the burgeoning ‘Maker Economy’; industries associated with nearby health, medical and academic institutions, such as the Lincoln Medical Center and Hostos Community College; and Entertainment and Sports, housing Yankee Stadium the neighborhood benefits for associated industries’ should be abundant (see figure 5-3). Maker Economy: This industry relies on clustering of associated businesses, suppliers, and institutions to increase productivity. Additionally, businesses strive for geographic proximity to clients to further increase retail opportunities to local markets. This industry does best in affordable, flexible light industrial spaces (eg. Red Hook in Brooklyn) that allow manufacturing operations to scale appropriately. Maker Economies are generally comprised of light manufacturers and artisans but can include industrial scale artists and pioneering creative professionals. Health and Medical: Healthcare facilities are typically large employers given their inherent need to cluster and their complex, 24-hour operations. These facilities benefit when employees live within a reasonable distance from the facilities because commute times are shorter for on-call professionals and because of the resulting social connections to the neighborhood. The provision for local, affordable housing and services benefits both the employers and the employees. Additionally, hospitals frequently work in collaboration with or for universities in a teaching and research capacity. These proximate research facilities either institutional or commercial require wet and dry lab space. These lab spaces offer particular challenges in an urban environment requiring large floor plates (see figure 2-4, from Sherman Creek section) and physical separation from residential use due to environmental and health concerns. Entertainment and Sports: The entertainment and sports sector similarly relies on clustering of associated businesses to increase business. In this case, however, Entertainment and Sports endeavors

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seeks support from both the hospitality industry (e.g. hotels, food & beverage, etc.) and the retail and restaurant industry. The availability of vacant ground floor commercial space and large parcels for mixed-use development is necessary to the implementation of any development in this industry. Potential Typologies for Consideration Certain live-work typologies have the potential to meet the needs of the above development scenarios. The reasons for pairing particular livework typologies to a development scenario, along with a summary of general conditions needed for the typology to succeed, are described below. (See Task 1: Background Research & Case Studies for more indepth information and research on the identified typologies)

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program at John Hopkins University Medical Center. Part of a broader policy in the city of Baltimore in which the city matches employer grants for homeownership, this program can also be implemented for rental units as seen in programs in Detroit. This typology requires a weak residential market that benefits from the bolstering of land value due to the increased purchasing power of residents in the neighborhood.

Development Scenario: Entertainment & Sports. This development scenario requires an array of different space types and a broad, diverse flexible market vision. Because the anchor, Yankee Stadium, is already in place a vision plan of the area would need to be put forth inclusive of, the live-work building and/or the live-work mixed-use. The live-work mixed use does not cater to one specific work sector. Rather, a live-work mixed-use building offers workspace to an array of industries, making it suitable to a mix of office tenants. The typology requires a market demand for affordable spaces with shared resources, and typically attracts startup companies and small business. The live-work building typology also has the potential to succeed, but because this typology is dedicated to a single sector, there would have to be a clear indication of the target industry. Both of these typologies are well suited for this scenario as they lend themselves to contextual solutions with perhaps symbiotic market relationships to ground floor retail.

Development Scenario: Health and Medical. To maximize the benefits of collaboration between hospitals, medical centers and universities, an innovation district focused on biotech could be created in neighborhoods that have the requisite adjacencies between these types of facilities. An innovation district, in general, also needs large enough direct and indirect subsidies (e.g. access to high-speed internet or loan programs) in order to incentivize companies to locate to and/ or expand in the area. This typology benefits from strong public transit that is already in place, such as the Kendall Square district in Boston, or where transit systems are introduced at a later time, such as Seattleâ&#x20AC;&#x2122;s South Lake Union district (see figure 2-5, from Sherman Creek section).

Site Context The Southwest Bronx physical and market conditions are ideal for the implementation of live-work typologies. There is a surplus of under built and under utilized sites within the MX district along the waterfront. In addition to the opportunities along the waterfront, the adjacent residential neighborhood is ripe for infill and new development. The neighborhood has access to public transit, specifically through the 2,4,5 and 6-train and the numerous bus lines connecting he Bronx and Manhattan. Additionally, there is pedestrian crossing between The Bronx and Manhattan at the Third Avenue Bridge. The neighborhood is within 5 subway stops from Grand Central Terminal.

Because of the shared benefits to employers and employees, Live Near Planning is best suited for this particular development scenario. One of the best examples of this typology is the Live Near Your Work

From a market standpoint, the Southwest Bronx is a strong candidate for live-work development with a significant amount of under-performing, low-rise, industrial properties that are sufficiently connected to mass transit systems. At an average cost of $235 per square foot â&#x20AC;&#x201C; 84 percent LIVE-WORK TYPOLOGY ANALYSIS

TYPOLOGY TEST FIT: LIVE NEAR PLANNING

lower than the City average – the Bronx offers the cheapest real estate options of the neighborhoods studied for Live-Work implementation. In addition to this, the borough’s high residential density may provide a suitable, local workforce for new development endeavors, in particular a Live-Near effort. Financial Considerations The nature of the Bronx’s market is both an advantage and a determent. While real estate costs are significantly lower, the market is not strong enough to support new construction without subsidies. Additionally, the cost of improving infrastructure (a necessity for the implementation of an Innovation District) combined with the under-performing market will require significant investment. The maker economy development scenario would be an attractive development model for the neighborhood. Although with the scale of opportunity in the Southwest Bronx, it may simply offer a piece of a larger scale vision. Because this target market requires lower rents, a scenario with adaptive reuse and potential subsidies may be necessary to encourage live-work. The health and medical sector requires other public or private institutional partners that are willing to invest in live-work strategies such as the live near planning typology or an innovation district focused on biotech. The Sports and Entertainment industry would require a large-scale vision and substantial investment from the anchor industry. This private industry investment has in the past resulted in requests for public sector support for the vision. Neighborhood Test-Fits Based on the assessments above, the live near planning typology was selected for implementation in the Southwest Bronx. The live near planning typology, by definition, is a planning tool and program associated with partnering existing neighborhood institutions with the public sector to incentivize live-work planning principles. The results of the program should focus on creating a locally based workforce and to CHAPTER 3: LIVE-WORK IMPLEMENTATION IMPLICATIONS

strengthen the local neighborhood economy. Additionally the program will increase the buying or rental power for residential square footage within the program boundaries and help spur private sector developer investment. The main goal of the program shall be to create a public/ private investment strategy for the Southwest Bronx that capitalizes on the existing zoning to help attract future live/work minded employers. Our background research to determine if this planning program is viable in the Southwest Bronx considered the Bronx residential market as a whole due to the available residential market data. All facts stated below have been cited from the ‘Selected Initial Findings of the 2014 NYC Housing and Vacancy Survey’. The Bronx has 15% of New York City’s total housing units (518,000 units). The ownership rate in the Bronx is 21.2% (102,231 units) that places it last amongst the five boroughs. The rental market in the Bronx captures the remaining units with a vacancy rate of 3.77% (14,871 units available) placing it ahead of Brooklyn and Queens and above the citywide average of 3.45% overall vacancy. The most applicable data to the live-near planning program would be the vacancy rate for ‘Private non regulated units’ for the Bronx. Unfortunately that information was not available by borough but the City, as a whole stands at 5.60% vacant. Ergo, the vacancy rate for ‘Private non regulated units’ for the Bronx has been assumed for this study to be higher than the stated 3.77% vacancy rate for all rental units in the borough. Our conclusions based on the above is that a live-near planning program in the Southwest Bronx should target existing market rate rental properties as they have the most potential for increased occupancy of existing housing types. Additionally, with the goal of bringing home ownership rates in line with citywide averages, the live-near planning should encourage development of available residential soft sites within its target boundary [see figure 5-6]. Given the site context, and the presence of anchors within the study area we have utilized the program definitions from both the John Hopkins Downtown Baltimore program for Live –Near Planning and the Las Vegas Downtown Live-Near Planning precedent to establish a two phased response. The first phase defines a boundary for the program around the existing anchor employers in the Southwest Bronx. The 132

boundary shown captures a 10 and 15 minute walking radius from the anchors within the underlying residential zoning (potentially creating two tiers of incentive) and eliminates the incentive on soft sites that may accommodate future employers (see figure 5-4). The success of the first phase of the program would work as proof of concept for a second phase. Future anchors would be attracted to the benefits of live work along with being a part of a vibrant and improved mixed-use neighborhood. A similar boundary is drawn for phase two anchors and again demonstrating a potential for a two-tiered program (see figure 5-5). In addition, research indicates that successful programs have required incentive definitions that include public and private subsidy. These subsidies for anchor business employees vary by market and manifest as down payment assistance for homeownership as well as subsidy payments for rentals within the program boundary. This assistance has been upwards to 3% of the required down payment for housing as defined by the FHA mortgage requirements. It should be noted that for this exercise both the boundaries identified and the actual incentives for the program are simply illustrative. The next steps identified below, include a more detailed analysis to calibrate the actual program definition for the Southwest Bronx. This detailed analysis should require a far more extensive research and design scope including extensive dialogue between the city and participating entities.

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Next Steps: Southwest Bronx — Live Near Planning: •

Prepare a marketing package based on cited precedents for discussion with anchor employers and the community.

•

Create a group of existing neighborhood employers to discuss the City’s intention and solicit feedback in order to create a path forward.

•

Prepare a more detailed ‘on the ground’ analysis of existing opportunity sites both for residential and commercial within the bounds of the defined study area.

•

Reach out to the creators and participants of the identified precedent programs in order to gain a greater understanding of applicability to the NYC market place (i.e. lessons learned that have not been shared publicly).

•

Based on the above, define the parameters upon which the program can be calibrated for individual employers, the city and participants.

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Create a Solicitation for local businesses to participate in a new Live Near Planning program in the Southwest Bronx.

LIVE-WORK TYPOLOGY ANALYSIS

FIGURE 3.5-0 BIRDâ&#x20AC;&#x2122;S EYE VIEW OF SOUTHWEST BRONX

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FIGURE 3.5-1A RESIDENTIAL MARKET -MEDIAN HOME PRICES

LEGEND Median Listing Price Map, recreated based on data from the National Home Price Page by Trulia $608,000 $774,000 $880,000 $1,015,000 $1,150,000 0

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FIGURE 3.5-1B RESIDENTIAL MARKET RENT BURDEN

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LEGEND Percentages of renter households who spend 50% LEGEND or more of their income on rent. From:U.S. Census Bureau,2013 Percentages of renter households who spend 50% or more38.0%-44.4% of their income on rent. From:U.S. Census Bureau,2013 31.0%-36.0% 38.0%-44.4% 27.0%-30.1% 31.0%-36.0% 23.5%-26.8% 27.0%-30.1% 16.5%-22.5% 23.5%-26.8% 0 0

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FIGURE 3.5-2 UNDERUTILIZED SITES

LEGEND SOFT SITES FOR DEVELOPMENT 0

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FIGURE 3.5-3

ANCHORS

2 1

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1 2 BRONX TERMINAL MARKET & GATEWAY PLAZA RETAIL AND WHOLE SALE JOB: 2,000

1 2 BRONX TERMINAL MARKET & GATEWAY PLAZA HOSTOS COMMUNITY COLLEGE RETAIL AND WHOLE SALE JOB: 2,000 3

EDUCATION JOB: 1,000 HOSTOS COMMUNITY COLLEGE 3 LINCOLN MEDICAL AND MENTAL HEALTH EDUCATION JOB: 1,000 4 HEALTHCARE JOB: 4,700 LINCOLN MEDICAL AND MENTAL HEALTH 4 HEALTHCARE JOB: 4,700 SUPREME COURT & BRONX CRIMINAL COURT 5 6 BRONX & BRONX HALL OF JUSTICE SUPREME COURT BRONX CRIMINAL COURT & LEGAL SERVICES JOB:&685 5 LAW 6 BRONX & BRONX HALL OF JUSTICE LEGAL SERVICES JOB: 685 THE LAW NEW &YORK YANKEES 7 RETAIL AND TRANSPORTATION JOB: 750 THE NEW YORK YANKEES 7 RETAIL AND TRANSPORTATION JOB: 750 CONCOURSE PLAZA MALL 8 RETAIL & SERVICE JOB: 274 8 CONCOURSE PLAZA MALL RETAIL & SERVICE JOB: 274 0

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FIGURE 3.5-4 PHASE 1 - PROGRAM DEFINITION

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FIGURE 3.5-5 PHASE 2 - PROGRAM DEFINITION

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LEGEND LEGEND SOFT SITES FOR POTENTIAL EMPLOYMENT ANCHORS SOFT SITES FOR POTENTIAL EMPLOYMENT ANCHORS INCENTIVE ZONES BOUNDARY INCENTIVE ZONES BOUNDARY INCENTIVE ZONE I INCENTIVE ZONE I INCENTIVE ZONE II INCENTIVE ZONE II 0 0

500

500 1000

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Chapter 4: Conclusions & Recommendations

OVERVIEW This chapter is an executive summary with general conclusions and recommendations for the next steps of advancing live-work to be a part of New Yorker’s daily lives. SUMMARY OF CONCLUSIONS The typologies of live-work present an opportunity to address the City’s need for more affordable housing while also preserving existing and creating new jobs. Driven by higher land costs, higher construction costs and costly expansion for its transportation systems, the NYC real estate market needs to better serve its ever-increasing population. Up-zoning industrial areas to create new housing opportunities often results in an erosion of the manufacturing capacity of the City by reducing the area of land dedicated to manufacturing. Instead, efforts should be made to identify responsive models that position market rate affordable residential development proximate to a living wage job base. The research during Task 1 & 2 of this study concludes that live-work typologies, if appropriately identified and located, can address some of these market conditions. This study reveals that each live-work typology varies dramatically in scale, cost, affordability, and scope. When applying live-work strategies to a particular development scenario, there might be more than one solution and therefore more than one typology could be feasible. Within each identified neighborhood, this study aimed at finding the most appropriate typology for a given program or scenario. Similar to the typologies, it is important to recognize that NYC is not a single market and that every neighborhood and site has its own unique set of strengths and weaknesses. KEY RECOMMENDATIONS In order to implement live-work typologies in NYC generally, there are three areas on which to focus: zoning, market considerations, and collective perception.

CHAPTER 4: GENERAL CONCLUSIONS AND RECOMMENDATIONS

ZONING • Rather than providing universal zoning guidelines for every MX Special District, the City should customize MX districts for each neighborhood. If calibrated correctly, this could encourage the implementation of live-work typologies. Foremost, a localized approach would enable different zoning controls (based on the typology and the target industry being considered) to be applied in a nuanced manner. For example, the live-work building or live-work mixed-use typologies would benefit from a street wall requirement because larger podium floors would encourage spaces for work below smaller residential floors above. Additionally, there can be special zoning exceptions that permit certain work related uses to coexist in the same building as residential uses. •

Live-work zoning, as part of customized MX Special Districts, can be implemented along the boundaries between multiple zoning districts. A precedent for this strategy exists in the Special Long Island City Mixed Use District. Refining the paired districts model of the Special Long Island City Mixed Use District to encourage a mix of commercial and light manufacturing uses with residences in the same development rather than the current situation, which strongly favors residential development over manufacturing because of its higher profitability. For live-work typologies that involve single, contiguous structures, such as the live-work building typology, types of work (use groups) that have no potential health impact on residents should be allowed. For typologies such as the innovation district and live near planning, individual properties can be dedicated to one particular use, but a mixed-use zoning strategy should be applied to the district in order to create compact, walkable neighborhoods. The success of innovation districts is dependent on the creation of livable neighborhoods; the neighborhood itself is viewed as an amenity for the attraction of highly valued employees.

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MARKET CONSIDERATIONS • The City should devise creative mechanisms to subsidize workspaces. One way to achieve this is through direct subsidy that incentivizes developers to build workspace within a development, similar to amenity bonuses that allow FAR bonuses to residential area or to the current bonus that subtracts half of circulation area from the FAR if a window is in viewing distance from elevators. Another method is to link indirect subsidy by leveraging the strength of the residential market in most NYC neighborhoods, similar to the solution that the NYCEDC is considering at the Brooklyn Navy Yard. This concept involves the transfer of development rights (TDRs) from the Brooklyn Navy Yard to developers in the adjacent Wallabout Bay neighborhood who build a manufacturing base into their new residential development. •

•

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COLLECTIVE PERCEPTION • To encourage the interest in the development community about live-work and its potential, the City should develop a live-work program position or mission statement, similar to the mayor’s statement regarding affordable housing, in order to mobilize developer interest in live-work.

Live-work can be used as a catalytic tool to alter the market profile and job creation ability of under-performing assets. Research shows that most live-work projects result from socalled “C” properties benefiting from a target market that sees a live-work scenario as a way to save on rental costs for both living space and workspace, or a target industry that thrives in collaborative environments such as the arts, crafts, tech, or creative professional sectors. As seen in Task 1, innovation districts often require infrastructure improvement and public realm upgrades. This is an economic factor that will vary greatly depending on the target industry, the capacity of the existing infrastructure, and the scale of the district. Live near planning typically does not require investment in infrastructure improvements. The single development livework typologies (at the building scale) will have different needs based upon the precise site and the target industries.

LIVE-WORK TYPOLOGY ANALYSIS