Mixed-Use at Work
Different developers look at mixed-use in different ways. One developer will look for trade areas that provide solid demand for retail, residential, office and perhaps other uses. The goal is to create developments where no single use dominates the others.
Still other developers gauge the demand for various uses and adjust the use offerings to match demand. In such cases, one use may dominate the center.
The Trademark approach to demand
Fort Worth, Texas-based Trademark Property Co. wants to meet the demands for all uses represented in its mixed-use centers.
Trademark researches market demands in trade areas by using the latest demographic technologies, and by presenting ideas to trade-area residents and businesses, asking what they want.
“If we’re the retail developer, we’ll also bring in multi-family, office and hotel developers to help evaluate markets,” said Terry Montesi, Trademark’s chairman and CEO. “Every use needs an advocate to ensure that it receives equal consideration and treatment.”
Trademark is currently talking to residents and business groups about a 63-acre wooded site in Fort Worth, Texas, called Waterside. A multi-family developer and office experts are also involved in the preliminary research and planning.
The preliminary plans for Waterside envision 150,000 sq. ft. to 225,000 sq. ft. of retail with a grocer and two to three junior boxes. In addition, the project will include 150,000 sq. ft. to 250,000 sq. ft. of office space and a signature hotel. The office space will include medical, legal and financial. Residential development will use 20 to 30 acres for a four-story multi-family structure and detached townhouses. Trademark also plans to maintain and enhance many of the natural features, including the river and existing heritage trees, with amenities such as hiking trails, amphitheater, dog park, recreation for children and adults, and water refill stations.
CASTO’s southern style of mixed-use
In the South, CASTO adjusts its offerings for different demands. “Our region is not high density like major urban areas,” said Shannon Dixon, CCIM, executive VP development and leasing, Southeast Realty Services, for Columbus, Ohio-based CASTO. “Here, retail is more dominant in mixed-use projects, and we spread out horizontally instead of vertically.
“Our customers dislike density. For instance, they want surface parking — not parking decks.”
Park West Village in Morrisville, N.C., illustrates CASTO’s mixed-use style. The five-mile ring has 145,000 people, a much less dense population than is customary for many other urban areas, yet still quite desirable.
“We have good residential and daytime populations, thanks to a major neighboring business site,” Dixon said.
With an average household income of $106,353, the Park West trade area is wealthier than most.
What does less density and more wealth mean to mixed-use plans?
At Park West, a main road splits the property approximately in half. On one side stands a 350,000-sq.-ft. power center anchored by Target, T.J.Maxx, PetSmart and buybuy BABY. Mixed-use lifestyle is across the road.
When complete, Park West Village will have 600,000 sq. ft. of retail, 42,000 sq. ft. of office space and 75 residential units on top of retail. That’s mixed-use, southern style.
Forest City idea: Born again centers
Forest City has noticed something that may alter shopping centers everywhere: As well-located shopping centers mature, their trading areas grow denser — with more homes and more residents, plus more daytime business employees. In short, as good centers mature, they morph into mixed-use sites.
“We’re looking at bringing our various disciplines — residential, office, hotel, civic center and others — into a number of our retail centers,” said Emerick Corsi, president of Real Estate Services with Cleveland-based Forest City Enterprises.
One project, for instance, will convert Forest City’s 580,000-sq.-ft. Ballston Common Mall in Arlington, Va., into a transit-oriented, urban mixed-use center with restaurants, entertainment, residential, office and upscale retail — to accommodate a larger and much wealthier trade-area residential and daytime employee population.
The plan is under way. The existing mall has a Macy’s and a Macy’s Home Store. Forest City has acquired the Home Store from Macy’s. “The Home Store structure connects to the mall on three levels,” Corsi said. “We’ll create three levels of new retail there and add residential and parking on top.
“We’ve also acquired the top three levels of Macy’s department store, which we’ll convert to office.”
Ballston Common Mall opened 28 years ago in 1986. Soon, it will be born again.
Making the Switch
The Black Dog Tavern is reducing its energy costs and carbon footprint while improving its customer experience with LED technology. The specialty retail and restaurant brand has upgraded the lighting in five stores (and its warehouse) to date, with more locations in the works.
Although Black Dog entered into the project with a primary goal of increasing energy savings, store aesthetics were also a priority. The company worked with Sylvania Lighting Services (SLS), which recommended replacing the existing lighting with energy-efficient Sylvania Ultra LED lamps. The lamps are designed to be a direct replacement for traditional sources.
The Black Dog store in Oak Bluffs, Mass., served as the test location, with SLS replacing 45-watt PAR lamps and 65-watt halogen floor lamps with Ultra PAR20 and PAR38 lamps, which use eight watts and 18 watts, respectively. The new lamps provided more flattering illumination for the store’s merchandise, while dramatically reducing energy use by almost half.
“After we installed the new lighting from Osram Sylvania in our Oak Bluffs store and got our first electricity bill, we were astounded. It was a fraction of what we were used to paying,” said Dan Pucillo, COO, The Black Dog Tavern, Vineyard Haven, Mass., which operates 19 stores.
Pucillo added that he noticed an improvement in the lighting quality, with the lamps providing better color rendering — and less heat — on the merchandise. Aside from the aesthetic and energy benefits, the lamps also provided cooler temperatures under the fixtures, which enhanced customer comfort and the overall customer experience.
Based on the successful results of the initial store, Black Dog and SLS completed retrofits of four additional locations. In addition, high-efficiency fluorescents were installed in some store stockrooms (Sylvania Octron T8) and in the company’s warehouse (Sylvania Pentron T5).
Across the upgraded locations, Black Dog experienced an average savings in energy consumption of about 45%. Energy use from lighting was reduced by 77,083 kWh, with 97,347 equivalent CO emissions averted annually. Along with energy savings and the environmental benefits, the retailer also stands to gain from reduced maintenance costs as the LED lamps last significantly longer than the halogen lamps they replaced.
Moving forward, Black Dog has decided to retrofit more of its stores to the LED lighting solution.
Scaling Solar Nationwide
Sustainability is a cornerstone of home furnishings retailer Ikea, its brand and its business plan, reflecting the company’s Swedish heritage.
To move this value set forward, the company has identified a sustainability strategy with three focus areas: sustainability at home, energy and resource independence and bettering lives in communities. Solar energy and enhanced energy efficiency are core components of this energy independence program, functioning to reduce the company’s electricity costs and minimize its carbon footprint. With solar costs at an all-time low, installing systems atop most of the company’s U.S. locations not only reinforces the Ikea focus on sustainability, but also makes good business sense.
Ikea has the ambitious goal of powering 70% of its energy needs with renewables by 2015. In order to accomplish this, the company has allocated approximately $1.8 billion to renewable and solar investments through 2015. Already, Ikea has installed more than 160,000 panels in the United States. Electricity generated from these solar systems powers everything from electricity to elevators, restaurant refrigeration, air conditioning, lights, phones and security systems at large stores and distribution centers.
As partners for this initiative, Ikea has worked with five different solar integrators on various locations across the country, and is now well on its way to reaching a generating capacity of 38 MW of solar energy. One of the major installers partnering with Ikea, REC Solar, a nationwide commercial and residential solar installer, worked to develop 18 Ikea solar arrays in the United States — or 17.4 MW of clean solar power — across 12 states, ranging from California to Florida to Maryland and beyond.
With just these systems, Ikea will generate more than 700,000 MWh of clean electricity during the next 30 years, the equivalent of planting 2.3 million trees. Installing solar at this scale provides useful lessons learned that can be applied by other large-scale retailers looking to go solar at multiple locations.
Adapting to regional differences was a primary challenge met by REC Solar and the four other installers. Ikea solar projects range widely in size — from 500 kW to 3.4 MW — and are located in varying geographic locations with unique climatic characteristics, including snow, tropical storms and high winds.
REC Solar optimized system design for the particular climate of each region. For example, spacing between each row of solar panels was increased or decreased based upon the latitude of the site to ensure there is no shade from the panels in the row ahead of them (called inter-row shading).
In addition, spacing was increased in areas with heavy snowfall to allow for snow shoveling between rows, if needed. Systems constructed in areas close to the sea were built with additional layers of galvanization or aluminum to prevent corrosion from salty breezes. Finally, some systems’ inverters were located within a building or under a shade structure to protect them from the elements and to ensure longer operational life. Many of the same situations applied to the Ikea projects led by other installers as well.
REC Solar and the other installers also focused on addressing specific site-related hardware concerns and delivering high-quality installations, while completing projects on time and on budget. For example, REC Solar developed the SnapNRack 450 Series, a hybrid ballasted and attached racking solution, specifically to minimize the roof penetrations required by Ikea system installations.
By working with solar integrators that flexibly implemented solutions to address rooftop design concerns, Ikea has ensured that every roof penetration is sealed and in good condition today across all 39 system locations — critical for reliable system performance over time.
Installing solar at scale has cost advantages as well. Ordering in bulk for multiple large systems can help reduce overall solar portfolio costs and increase a retailer’s return on investment. Certain fixed costs do not change from system to system, even if the size of the project varies. These costs include pre- and post-roof-inspection fees, structural engineering fees, site mobilization fees and equipment rentals.
However, with larger systems, these fees can be spread out across more watts — lowering the overall cost per watt and improving payback. Repeating business with a qualified partner can also generate savings for systems large and small. Partners are able to simply replicate their project proposals and legal contracts for work, based on successes at previous installations, which reduces the paperwork and logistics of the system development process, and in turn decreases overall system costs. As a retailer committed to offering affordable prices to its customers, Ikea has a keen focus on lean operating costs. For this reason, a large solar energy portfolio seemed like a win-win approach.
The strong Ikea commitment to building a large solar portfolio has brought great advantages to the company’s project development process and store operations. Ikea has been able to reduce costs and streamline efficiency by applying the lessons learned at one system to the next project. Choosing a strategic partner that understands first-hand a company’s specific needs has proven highly advantageous. With a diverse array of solar systems in place, Ikea looks forward to a future with clean, reliable electricity that will accelerate its business and keep operating costs low, to the benefit of many loyal home-furnishing customers.
Joe Roth is public affairs director of Ikea USA.