The theme of Day 3 of the ULI Washington Leadership Institute was Development Process and Real Estate Finance at took place at the First Congressional United Church of Christ. The first activity took the cohort into the streets for an urban scavenger hunt, during which groups located bike racks, food trucks, emergency vehicles and many other items found within a few blocks of Chinatown/Penn Quarter. It was a fast and fun way to start the day and get to know our peers even better!
The first presentation of the day was by William Hard and Matthew Hard from LCOR on the real estate development process through the case study of The Edison at 4th Street and Florida Avenue NE. LCOR explained the process from acquisition to lease-up, including the valuation, coordination, and challenges along the way. Matt and Bill explained how they are able to quickly evaluate land values to determine if a project is feasible. They also explained how they work with a talented team including the architect, general contractor and a zoning attorney to help develop the vision and tackle various development challenges, including unexpected site conditions and permitting issues.
After a quick break, the next panel gave the group a history of the redevelopment of the First Congressional United Church of Christ. The process was complex and made more so by the economic downturn of 2008. Meg Maguire, Chair of Site Development for FCUCC, provided a fascinating background on the history of the church and it’s approach to the redevelopment of the space. Often, institutions are concerned about adding commercial uses to their space, but it was clear from the panel’s discussion and from the final product, that the church was able to accomplish its goals largely by incorporating compatible private uses into the planned redevelopment. The church and their development partners stressed how the process was greatly improved by the church’s ability to clearly communicate their goals for the project and the architecture design. The Leadership group then took a tour of FCUCC and heard how it was designed to incorporate the thoughtful and intentional architectural goals of the church. In particular, the stunning sanctuary was designed to be a flexible space for religious and non-religious events with impressive acoustics and warm, inviting building materials.
After the tour, Bob Mills from PN Hoffman presented a primer on Real Estate Finance. In his introduction, Bob reviewed how real estate value can be created through entitlement increases, sales of improved assets, developer fees and equity investors. He continued to describe various financing structures and the risks and benefits of each debt and equity combination. He also touched on non-traditional funding sources including the EB-5 program and Tax Increment Financing. The group learned how complex projects also require complex financing structures that may combine many different sources and the internal expertise to bring the projects to reality.
The panel that followed Bob’s presentation provided The Wharf as a case study for real estate finance from the perspective a project team member, a lender, and a mortgage broker. The panel included Mike Antoneli, SVP/Relationship Manager at Capital One Bank (Moderator), Michael Zelin, Senior Vice President at Eastdil Secured and Brian H. Gould, Director of Finance at JBG Companies. Using The Wharf as a case study, the panel discussed the challenges faced by large redevelopments when approaching the debt market. Among these are the availability of debt for various land uses, how banks review projects, changing costs of capital, and valuation of place-making strategies.
Finally, the day closed with a discussion with Evan Goldman, Vice President of Land Acquisition and Development at EYA. He explained his unique role in the redevelopment of Pike and Rose. Evan’s experience as an emerging leader evolved through his dedication toward a larger community interest and aligning seemingly competitive development interests for a greater result. His involvement in the approvals process for Pike and Rose and the larger community provided opportunities to learn community speaking, be at the forefront of social media marketing, and build consensus. Though Evan moved on from his involvement in Pike and Rose, he continues to mentor colleagues and incorporate community building in his current work.