Building for Wellness The Business Case

Transcript

1 Building for Wellness THE BUSINESS CASE Building Healthy      Places Initiative Building Healthy Places Initiative ULI Center for Capital Markets and Real Estate BuildingforWellness2014cover.indd 3 3/18/14 2:13 PM

2 Building for Wellness THE BUSINESS CASE Project Director and Author Anita Kramer Primary Author Terry Lassar Contributing Authors Mark Federman Sara Hammerschmidt This project was made possible in part through the generous financial support of ULI Foundation Governor Bruce Johnson. ULI also wishes to acknowledge the Colorado Health Foundation for its support of the ULI Building Healthy Places Initiative. ULI Center for Capital Markets Building Healthy and Real Estate Places Initiative

3 ACRONYMS HEPA—high-efficiency particulate absorption HOA—homeowners association HUD—U.S. Department of Housing and Urban Development Recommended bibliographic listing: HVAC—heating, ventilation, and air conditioning Kramer, Anita, Terry Lassar, Mark Federman, and Sara Hammer- Building for Wellness: The Business Case . Washington, D.C.: schmidt. LEED—Leadership in Energy and Environmental Design Urban Land Institute, 2014. VOC—volatile organic compound ISBN: 978-0-87420-334-9 MEASUREMENTS © 2014 Urban Land Institute 1025 Thomas Jefferson Street, NW ac—acre Suite 500 West ha—hectare Washington, DC 20007-5201 km—kilometer mi—mile All rights reserved. Reproduction or use of the whole or any part of sq ft—square foot the contents without written permission of the copyright holder is sq m—square meter prohibited. BUILDING FOR WELLNESS: THE BUSINESS CASE 2

4 About the Urban Land Institute The mission of the Urban Land Institute is to provide • Sustaining a diverse global network of local prac- leadership in the responsible use of land and in tice and advisory efforts that address current and creating and sustaining thriving communities world- future challenges. wide. ULI is committed to Established in 1936, the Institute today has more than 30,000 members worldwide, representing the • Bringing together leaders from across the fields entire spectrum of the land use and development of real estate and land use policy to exchange best disciplines. Professionals represented include practices and serve community needs; developers, builders, property owners, investors, • Fostering collaboration within and beyond ULI’s architects, public officials, planners, real estate bro- membership through mentoring, dialogue, and kers, appraisers, attorneys, engineers, financiers, problem solving; academics, students, and librarians. Exploring issues of urbanization, conservation, • ULI relies heavily on the experience of its regeneration, land use, capital formation, and members. It is through member involvement and sustainable development; information resources that ULI has been able to set Advancing land use policies and design practices • standards of excellence in development practice. that respect the uniqueness of both the built and The Institute has long been recognized as one of the natural environments; world’s most respected and widely quoted sources of Sharing knowledge through education, applied • objective information on urban planning, growth, and research, publishing, and electronic media; and development. About the Building Healthy Places Initiative The ULI Building Healthy Places Initiative is lever- Defining the appr Help to define and oach. • aging the power of ULI’s global networks to shape share information about the design elements, projects and places in ways that improve the health programming strategies, materials, and other of people and communities. approaches that improve health for people. In January 2013, ULI’s board of directors Build under- • Expl oring the value proposition. approved a focus on healthy communities as a standing of the market and nonmarket factors cross-disciplinary theme for the organization. at play in building healthy places, and the Through the Building Healthy Places Initiative, value proposition of building and operating in launched in July 2013, ULI is working to promote health-promoting ways. health in projects and places across the globe. • ancing the state of practice and policy. Adv ULI is focusing on four main areas of impact: Using the ULI membership as a lever, and in partnership with others, advance the state of • Raise awareness of the Raising awareness. policy and practice. connections between health and the built environment in the real estate community, We invite you to learn more at www.uli.org/health. and work to make sure health is a mainstream consideration. About the ULI Center for Capital Markets and Real Estate tersection of real estate finance and capital markets The ULI Center for Capital Markets and Real Estate and the diverse needs and interests of the ULI mem- focuses on tracking, analyzing and exploring real bership. The Center also seeks to address members’ estate investment trends globally. The mission is to interests in underlying topics such as market forces inform, educate, explore issues, create knowledge, affecting property sectors and economic trends. and foster communication and networking at the in- BUILDING FOR WELLNESS: THE BUSINESS CASE 3

5 AUTHORS Contributing Authors Primary Author Project Director and Author Mark Federman Anita Kramer Terry Lassar Sara Hammerschmidt ULI PROJECT STAFF ULI SENIOR EXECUTIVES Anita Kramer Patrick L. Phillips Vice President Chief Executive Officer ULI Center for Capital Markets and Real Estate Cheryl Cummins Mark Federman Executive Officer Project Assistant, ULI Center for Capital Markets and Real Estate Michael Terseck Chief Financial Officer/Chief Administrative Officer Sara Hammerschmidt Associate, Content Jason Ray Chief Technology Officer Rachel MacCleery Senior Vice President, Content  Lela Agnew Dean Schwanke Executive Vice President, Communications Senior Vice President, Case Studies and Publications Kathleen B. Carey James A. Mulligan Executive Vice President/Chief Content Officer Senior Editor David Howard David James Rose Executive Vice President, Development and Editor ULI Foundation Betsy VanBuskirk Creative Director Joe Montgomery Chief Executive, Europe Craig Chapman Senior Director, Publishing Operations John Fitzgerald Chief Executive, Asia Pacific Marilee Utter Executive Vice President, District Councils BUILDING FOR WELLNESS: THE BUSINESS CASE 4

6 Contents Executive Summary 6 Chapter 1: Renovation and Redevelopment 10 12 ECO MODERN FLATS 16 INNOVATION PARK 1221 BROADWAY 20 24 J ACKSON WALK  28 THE CENTURY BUILDING Chapter 2: New Construction 32 VIA6 34 THE INTERLACE 38 20 PARK 20| 42 VIA VERDE 46 Chapter 3: Master-Planned Communities 50 GROW COMMUNITY 52 SELANDRA RISE 56 RANCHO SAHUARITA 60 64 MUELLER 5

7 Executive Summary DOES WELLNESS MAKE BUSINESS SENSE AS A DEVELOPMENT OBJECTIVE? How have developers pursued this objective? What has the market response been? And how have developers measured their success? This publication provides answers directly from Each chapter focuses on an overall development developers who have completed projects with well- strategy and showcases a variety of building prod- ness intentions. In 13 sets of interviews, developers ucts and sectors within each strategy: explain their motivation, their intended wellness  Chapt er 1: Renovation/redevelopment and health outcomes, the development process and Apartment buildings (tw • o) operations as related to their health intentions, and • Business/call center the key issue in this publication—the metrics of ed-use building (apartments, office, and • Mix  market performance. retail) • Fitness/wellness/primary care facility SUMMARY OF WELLNESS FEATURES, BY PROJECT AND INTENT* General physical/ Natural Structured fitness/ Structured fitness FIGURE 1: OVERVIEW OF BUILDING FOR WELLNESS PROFILES Social pedestrian activity Support for wellness activity lighting/ Clean activity through bicycling daylighting interaction Other through project design indoor air through programming built amenities Project name Location Use Chapter 1 Fayetteville, AR Apartments Eco Modern Flats 1. RENOVATION/REDEVELOPMENT      Charlotte, NC Business park (back office, call Innovation Park     centers) 1 Apartments San Antonio, TX 1221 Broadway      Fitness/wellness/primary care center Jackson Walk Jackson, TN     2 Pittsburgh, PA Mixed use: workforce and market-rate The Century Building    housing, office, retail Mixed use: apartments and retail Seattle, WA Via6 2. NEW CONSTRUCTION    The Interlace Condominiums Singapore     Haarlemmermeer, Netherlands Park 20|20 Office         2, 3 Via Verde Workforce co-ops, low-income New York, NY       apartments Bainbridge Island, WA Single-family homes, apartments Grow Community 3. MASTER-PLANNED COMMUNITIES      Single-family homes Casey, Australia Selandra Rise      Rancho Sahuarita Single-family homes, retail Tucson, AZ      Mueller Austin, TX Single-family and multifamily homes,       retail, office * Wellness features noted here are those discussed in chapters 1–3. Some projects may have additional or planned features. 1. Finalist, ULI Global Awards for Excellence, 2013. 2. Winner, ULI’s Jack Kemp Excellence in Affordable and Workforce Housing Awards, 2012. 3. Winner, ULI Global Awards for Excellence, 2013. BUILDING FOR WELLNESS: THE BUSINESS CASE 6

8 While the profiles acknowledge the advantages  er 2: New construction Chapt that particular locations offer, projects were cho- Apartment building • sen for the wellness features specifically developed ed use (apartments, retail) Mix • on site. • Condominium de velopment Studies are underway at three of the projects e building Offic • to measure the specific health benefits of the  Chapt er 3: Master-planned communities wellness strategies implemented and inform future • Intown strategies. The focus of this publication is on the • eenfield (three). Gr business case for projects with such wellness ob- Ten of the projects are located in eight states jectives as encouraging physical activity, improving in the United States, primarily in secondary or the indoor environment, and encouraging social small er markets. Two projects are in the Asia engagement. Pacific region (Singapore and Australia) and one is in the Netherlands. Profiled projects were identified through the Highlights Urban Land Institute District Council and National The following are the common themes among the Council network, the ULI Global Awards for Ex- 13 profiled projects: cellence program, ULI’s Jack Kemp Excellence in Affordable and Workforce Housing Awards program,  et response—the metric most reported Mark and ULI’s Case Studies program, as well as through by the 13 developers—has exceeded developer information collected at ULI’s 2013 Fall Meeting and expectations with rapid lease-up and sales rates, Building Healthy Places Conference in early 2014. higher rents than pro forma projections, rent and SUMMARY OF WELLNESS FEATURES, BY PROJECT AND INTENT* General physical/ Structured fitness Structured fitness/ Natural FIGURE 1: OVERVIEW OF BUILDING FOR WELLNESS PROFILES Clean pedestrian activity Support for wellness activity Social lighting/ activity through through programming bicycling through project design daylighting indoor air interaction Other built amenities Chapter Project name Location Use 1 Apartments Fayetteville, AR Eco Modern Flats 1. RENOVATION/REDEVELOPMENT      Charlotte, NC Business park (back office, call Innovation Park     centers) 1 1221 Broadway Apartments San Antonio, TX      Jackson Walk Jackson, TN Fitness/wellness/primary care center     2 The Century Building Mixed use: workforce and market-rate Pittsburgh, PA    housing, office, retail Via6 Seattle, WA Mixed use: apartments and retail 2. NEW CONSTRUCTION    The Interlace Singapore Condominiums     Park 20|20 Haarlemmermeer, Netherlands Office         2, 3 Workforce co-ops, low-income New York, NY Via Verde       apartments Grow Community Bainbridge Island, WA Single-family homes, apartments 3. MASTER-PLANNED COMMUNITIES      Selandra Rise Casey, Australia Single-family homes      Rancho Sahuarita Tucson, AZ Single-family homes, retail      Mueller Austin, TX Single-family and multifamily homes,       retail, office * Wellness features noted here are those discussed in chapters 1–3. Some projects may have additional or planned features. 1. Finalist, ULI Global Awards for Excellence, 2013. 2. Winner, ULI’s Jack Kemp Excellence in Affordable and Workforce Housing Awards, 2012. 3. Winner, ULI Global Awards for Excellence, 2013. BUILDING FOR WELLNESS: THE BUSINESS CASE 7

9 “Our overall success indicates that the strategic positioning . . . through an amenities program that promotes health and wellness can differentiate a community . . . and mitigate long-term risks.” —Robert Sharpe, developer, Rancho Sahuarita als provide free seminars. In a master-planned sales premiums, and waiting lists. New interest by lenders and investors is also noted. community, a local health care provider offers a children’s “Be Well” summer camp and “Walk  De velopment costs attributable to the inclusion with a Doc” programs. of wellness components, where mentioned, were generally reported as a minimal percentage of eraction is purposefully planned for and Social int  the overall development budget. The notable encouraged through the design of the project, exception is a highly amenitized master-planned choice and placement of amenities, and pro- community where these costs are partially offset gramming. by homebuilder and resale fees. Thr ee of the projects—Selandra Rise, Mueller,   Ther e is a strong consensus that upfront devel- and Park 20 | 20—are currently under study by opment costs—even for those individual com- universities and foundations regarding their ponents that were significantly more costly than impact on residents’ and workers’ health, well- standard approaches—were well worth the cost being and pr oductivity. Two university studies and contributed to the projects’ overall success. have previously concluded that Mueller residents Challenges, such as working with contractors had increased their physical activity by 40 to 50 with little experience with nontraditional building minutes per week after moving in. systems, were noted as requiring additional time. Str ategies used to build and provide for wellness  can be grouped into seven categories of intent. ating expenses for maintenance of wellness Oper  As shown in figure 1, the number and combina- components, when noted, were typically mini- tion of strategies used by each of the 13 projects mal. Expenses, such as a full-time director of vary, and the profiles themselves show the tenant services to market the wellness amenities variety in the implementation of each strategy. at a business park or a full-time groundskeeper (Figure 1 summarizes the information presented who also cultivates the community garden in in each profile; it should be noted that some proj- an apartment complex, are noted as worth the ects may have additional or planned features not investment. Operating and maintenance costs in profiled in this report.) master-planned communities are covered by the homeowners association fee. Pr ogramming—such as fitness classes, walking  Wellness Strategies groups, wellness seminars, gardening classes, The following list provides examples of strategies “walking school buses”—is used as a means to for each of the seven categories of intent: offer additional wellness opportunities as well as Clean indoor air. Nonsmoking policy, ductless  to encourage the use of wellness amenities. heating/cooling, non-VOC materials, green walls. P  artnerships with local nonprofit organizations, General physical/pedestrian activity through project  businesses, and jurisdictions are often formed Active staircase, interconnected network design. to provide the programming. For example, at a of sidewalks and trail system, car-free site, use business park, the local YMCA teaches on-site of interconnected interior corridors for indoor fitness classes and leads walking groups, while business tenants and local wellness profession- track, shaded sidewalks, jogging track around BUILDING FOR WELLNESS: THE BUSINESS CASE 8

10 moved in allowing them to meet beforehand/ perimeter of site that is wide enough to double form interest groups, classes on a range of in- as access for emergency vehicles. terests that also promote social cohesion of the  - Support for bicycling. Protected bike lanes, multi community. ool bike-repair station, private bicycle shop t  Other intentions. Chemical-free outdoors through as project anchor, on-site bicycle commuter use of native vegetation and a saltwater pool, nat- center, on-site bike-share program, bike storage ural light for office space through building design facilities. and LED lighting, aging-in-place condominium Structured fitness activity through built amenities.  units, and universal design principles applied to Expansive fitness centers, fitness center in same fitness amenities. building as preventative care/wellness center, The 13 projects that follow were chosen because themed gardens and trails, multiple fitness they include a variety of wellness features and rep- rooms with specialized equipment, rooftop/ resent a range of project types, and because all of open-air workout space and exercise equipment, these developers consider their projects a business 50-meter pool. success. This group of projects does not necessar- Structured fitness/wellness activity through program-  ily represent the universe of such projects, so the ming. Fitness classes, walking groups, wellness observations and conclusions noted above are not seminars, runs/races, walking school buses. necessarily universally applicable. However, it is  Community gardens, urban Social interaction. hoped that the project details are educational and agriculture, greenhouses, design/themes of inspire further discussion and innovation. courtyards, a block party before first residents BUILDING FOR WELLNESS: THE BUSINESS CASE 9

11 ECO Modern Flats Timothy Hursley

12 CHAPTER 1 Renovation and Redevelopment

13 ECO Modern Flats Fayetteville, Arkansas THE FAYETTEVILLE APARTMENT MARKET had long been dominated by a PROJECT DATA single developer who built mostly on large suburban tracts. But Specialized USE MULTIFAMILY HOUSING Real Estate Group, formerly a property management firm, recognized a 96 RENTAL UNITS significant market of young professionals and students looking for a rental YEAR OPENED 2011 product unavailable in the city: urban apartments with high-end design and SITE SIZE premium amenities. In addition, “creating a built environment that promotes 2.9 AC (1.2 HA) RENTAL RATES sustainability and good health was especially important to me,” says Jeremy $795–$990 (INCLUDES UTILITIES, INTERNET, CABLE) Hudson, CEO of Specialized. “I grew up with severe allergies and asthma, and PROJECT COST  it wasn’t until much later that I learned how much our living conditions affect $7.4 MILLION DEVELOPER our health.” SPECIALIZED REAL ESTATE GROUP OWNERS ROBERT DANT, SPECIALIZED REAL ESTATE GROUP ARCHITECT/LANDSCAPE DESIGNER MODUS STUDIO LENDERS CONSTRUCTION: USBANK; PERMANENT: GRANDBRIDGE REAL ESTATE GROUP EQUITY PARTNER ROBERT DANT This adaptive use of a 1960s apartment complex includes a community garden and attractive exterior staircases. Timothy Hursley BUILDING FOR WELLNESS: THE BUSINESS CASE 12

14 Concrete ECO Modern Flats, a rehab of a 1960s apartment Non-V OC paints, stains, and finishes, used  flooring, non- complex, was the first development in the state throughout the complex, that emit no harmful VOC finishes, to promote health and the state’s first multifamily gases and chemicals; some of these materials and a ductless complex to be LEED certified, achieving a Platinum heating and follow LEED guidelines that address indoor air cooling system rating. The group of four buildings includes 96 quality. are a few of the one-bedroom apartments, each 600 square feet (56  A ductl ess, energy-efficient, mini-split heating strategies used sq m), and is located adjacent to the University of to provide clean and cooling system to reduce the amount of mil- indoor air. Arkansas and downtown Fayetteville. ECO Modern dew, mold, and dust that collects compared with Adaptive Creative Flats has a Walk Score (from www.walkscore.com) a traditional HVAC system. of 85, indicating it is “very walkable.” oller-shade window covering made of syn A r  - thetic mat erial that emits no VOCs.  Kit chen countertops made of poured concrete, Main Wellness Features eliminating use of traditional chemical-based CLEAN INDOOR AIR sealants. ete floors. The developer took advantage Concr  A wide array of strategies were used to Strategies. of the structure’s original concrete material for provide high-quality indoor air: flooring throughout the new development. In A nonsmoking policy, s  trictly enforced, both addition to creating an interesting aesthetic, the indoors and outside. Eco Modern Flats is the floors eliminate use of toxic glue and formal- first and only completely nonsmoking apartment dehyde frequently found in carpets. The hard, complex in the region. According to the develop- smooth surfaces also are less likely to harbor er, this policy attracted more residents than it dust mites and other allergens. turned away, and this success has encouraged Though the healthy building Development. Specialized to make its other apartment com- components did not increase engineering or design plexes under construction nonsmoking as well. BioBased spr ay foam insulation, which is  fees, the developer found it challenging to work GreenGuard certified, representing independent with those contractors who had no experience with verification of good indoor air quality attributes. healthier materials and nontraditional building BUILDING FOR WELLNESS: THE BUSINESS CASE 13

15 as much as traditional laminate, and the ductless heating system cost about 10 percent more than a traditional system. Maintenance. The ductless heating and cooling system requires additional preventative mainte- nance; in particular, Specialized cleans the HEPA filters every three months. Although the concrete features require special maintenance procedures— Specialized rewaxes the concrete kitchen counter- tops every six months—the added durability of the concrete floors and countertops compared with traditional materials makes up for the minimal additional maintenance expense. Concrete floors eliminate the expense of regular carpet replace- Before and systems. “Anytime you ask a contractor to do some- ment. The developer also educates residents about after images thing they’re not accustomed to, there’s a learning appropriate cleaning products for upkeep. show how curve, and you’re going to pay a premium,” Hudson As an alternative to concrete floors, which are the buildings were adapted says. Measures to achieve cleaner indoor air were too costly for new construction, Specialized is in- to create a part of a larger holistic approach that included ag- stalling chemical-free vinyl synthetic flooring in its well-designed gressive strategies to reduce energy use, ultimately new developments; this flooring has the benefits of and healthy apartment halving the development’s utility costs, he notes. being allergen-free and durable like concrete but complex, The overall premium for purchasing materials costs less. including and equipment to improve indoor air quality was a central CHEMICAL-FREE OUTDOORS less than 1.5 percent of the overall development saltwater pool. Timothy Hursley (top) budget, the developer estimates; the new materials The use of chemicals outside was minimized Adaptive Creative (bottom) and equipment also improved energy efficiency. through the following strategies: Because non-VOC paint and stains are readily e, drought-tolerant plants and noninvasive  Nativ available, additional costs associated with their species planted on the grounds. use over conventional materials were minimal. ed with saltwater,  An outdoor swimming pool fill However, the concrete countertops cost about twice which is more comfortable for swimmers and BUILDING FOR WELLNESS: THE BUSINESS CASE 14

16 healthier than the heavily chlorinated water it Performance replaced. Although slightly higher upfront invest- Since its completion in January 2011, ECO has been ment was needed, the annual operating costs for fully leased and has a waiting list. Current rents run operating a saltwater pool are similar to those 113 to 140 percent of pro forma estimates, signifi- for chlorinated systems. Specialized is switching cantly higher than those for comparable apartments to saltwater pools for other apartment develop- in the area. Rent rates of $1.42 per square foot are ments in its portfolio. higher than the average of 99 cents per square foot COMMUNITY GARDEN/SOCIAL INTERACTION for comparable one-bedroom units in the area. No other apartment complex in the area offered Since the project opened, turnover has been about a community garden. The developer believes the 15 percent lower than the market average. 350-square-foot (33 sq m) garden, in a series of raised planters, was an important amenity to help attract its target market—young renters erested int in gardening and easy access to healthy foods. Located next to the pool courtyard and barbecue area, the garden promotes social interaction and serves as the heart of the residential complex and a popular gathering place. Specialized met with the first ECO residents to determine how to manage the garden. Many com- munity gardens are divided into separate plots and maintained individually. However, the veloper de learned that, although most of the 20-something residents were interested in healthy foods and access to fresh produce, they did not want the re- sponsibility of maintaining their own garden plots. In response, the developer built a shared commu- nity garden. A few residents who prefer to plant their own gardens were given small parcels. “ECO confirmed our belief that there was a Several features of The cost of maintaining the garden runs about significant market of potential renters who were the complex 25 percent of total landscaping costs and 1.25 not being served,” Hudson says. “These renters-by- promote social percent of the project’s overall operating budget. choice were interested in urban-style apartments interaction, including a Specialized employs a full-time groundskeeper with modern design, premium amenities, as well as community to maintain the site’s landscaping, including the green and healthy building features”; they were also garden, pool, garden; once a year, Specialized collects infor- willing to pay a premium even for apartments sig- courtyard, and rooftop deck. mation from residents about specific herbs and nificantly smaller (15 to 20 percent) than the norm. Timothy Hursley vegetables they want in the garden. “If we could ECO was Specialized’s first significant devel- encourage more of our residents to care for their opment project. Its market success encouraged own gardens, we could reduce maintenance costs,” investors to team up with Specialized on a number says Hudson. But he views the $6,000 or so that of additional new multifamily developments in the Specialized spends on maintaining the garden as area and emboldened other development firms to well worth the investment. The garden’s success build apartments in the city on infill sites. has prompted Specialized to include similar ame- nities in its other multifamily developments. BUILDING FOR WELLNESS: THE BUSINESS CASE 15

17 Innovation Park Charlotte, North Carolina WHEN CHRIS EPSTEIN, NOW HEAD OF BECO SOUTH, first visited the PROJECT DATA nearly empty 2 million-square-foot (186,000 sq m) former IBM complex in USE BUSINESS PARK the University City neighborhood of Charlotte as head of leasing for BECO 1.9 MILLION SQ FT (82,000 SQ M) OFFICE Management, he envisioned a turnaround strategy for reviving the moribund YEAR OPENED campus. Having read about Google’s multiple-building complex in Mountain 2010 View, California, and its array of attractive amenities, Epstein set as the core of SITE SIZE 200 AC (80 HA) his strategy to “Google-ize” the Charlotte campus, offering high-quality fitness LEASE RATES $21.50–$23.00 PER SQ FT, FULL and health amenities not typically found in suburban multitenant buildings and SERVICE  scarcely associated with call centers and other back-office operations. PROJECT COST $77 MILLION DEVELOPER/OWNER BECO SOUTH LLC Interconnected corridors spanning a half ARCHITECT mile are used and promoted as an indoor REDLINE DESIGN GROUP track. University City Partners FINANCING FINANCED ENTIRELY WITH DEVELOPER EQUITY BUILDING FOR WELLNESS: THE BUSINESS CASE 16

18 The centrally Several developers had attempted to redevelop Main Wellness Features located fitness the site. When BECO Management, which specializ- center is a Epstein estimates that about 2 percent of his devel- es in purchasing and turning around distressed real big draw for prospective opment budget was spent on wellness components. estate, first learned about the 200-acre (80 ha) site, tenants. the property was in receivership. BECO purchased Rebecca Shrum FITNESS CENTER the campus—which had a 70 percent vacancy rate— The $1 million, 7,000-square-foot (650 sq m) in 2010 for $42 million in cash, and Epstein relocated fitness center offers a wide array of cardiovascular from Washington, D.C., to head BECO South, a new equipment, plus individual audio-visual stations, division to be led from Charlotte. Using its own strength-building systems, and group fitness class- resources, BECO spent $35 million cash renovating es that include Zumba, Pilates, yoga, and strength the campus, as well as adding 2,300 parking spaces training. Members are charged $99 per year. “We and Google-style amenities in an effort to reposition could have made the center free, but we wanted the campus as an office park for call centers and people to have some skin in the game so that they back-office users. would be more likely to actually use the facility,” Epstein views himself as an “evangelist” of says Epstein. BECO South partners with the local work/life balance and well-being; a primary goal YMCA, which teaches two fitness classes per day, at is “giving people the opportunity to make healthy lunch and in the evening. Members can also partici- choices,” he says. Additional amenities at Innova- pate in the YMCA Stay Healthy Fitness Challenge, an tion Park are charging stations for electric cars, eight-week program promoting health and wellness subsidized daycare, a dry cleaner, a farmers mar- in which participants are evaluated at the start and ket, multiple on-site food options, and wifi-enabled end of the program to assess their progress. indoor and outdoor brainstorming spaces. The center, which remains open until 10 p.m., is operating near capacity, and BECO South is plan- ning to build a second one soon to accommodate the influx of new tenants. “In contrast to most of- fice gyms, which are typically cramped, closet-like BUILDING FOR WELLNESS: THE BUSINESS CASE 17

19 The local Y spaces, BECO Fitness was designed to resemble The project employs a full-time director of tenant organizes a high-end Equinox-style facility,” says leasing services specifically to market the amenities. walking groups director Mercedes Merritt. The fitness center has To call attention to the bike-sharing pro- through the played a critical role in the lease-up of the project, gram, tenant services director Rebecca Shrum campus for employees. Merritt says, describing the “a-ha” moment pro- e from the ceiling in an office suspended a bik University City spective tenants experience when they first see the corridor with an E.T. figure peeking out of its bas- Partners center. Moreover, tenants like the notion of shifting ket. She also placed signs throughout the complex the cost of pricey amenities like the fitness center encouraging workers to complete their waiver to onto their landlord. According to the developer, the ride a bike, and “grab your helmet and go.” Shrum fitness center grosses about $80,000 a year, but spends about 40 percent of her time on program- BECO South breaks even on the facility after paying ming for the health and fitness amenities. a fee to the Y to manage the classes, plus deprecia- BECO South also promotes the half mile (0.8 tion of equipment. km) of interconnected corridors at the 13-building complex as an indoor track and contracted with the FITNESS AND WELLNESS PROGRAMMING Y to organize walking groups for employees. The The developer has implemented a number of developer also partners with a tenant—a chiro- programs to promote physical exercise and well- practor/massage practice—to organize monthly ness, including a bike-sharing program. Initially, wellness seminars. The first seminar, “Get Fit the bikes were scarcely used; once the developer while You Sit,” specifically addressed call center introduced programming and marketing to call at- workers, who rarely leave their desks during the tention to the 25 free bikes on campus, enrollment day. The second session, “Your Body Is Talking: soared. BECO South contracted with the Y to bring 10 Reasons Why You Should Listen,” was equally in a trainer to lead orientation sessions and bike successful. The seminars are free and open to all tours. “It’s not enough just to place bikes on cam- employees of park businesses. pus and expect that people will use them,” says Innovation Park holds annual health fairs. BECO Merritt. “It’s all about marketing the message.” South started out working with a local hospital to BUILDING FOR WELLNESS: THE BUSINESS CASE 18

20 Employees take cially pleased with the outcome of the project when check key health statistics—such as cholesterol advantage of AXA Equitable asked to participate in placing $100 levels and blood pressure—but moved to a model the complex’s million in permanent financing on the project. “AXA that instead focuses more on prevention and ho- bike-sharing Equitable is a tenant and now also our lender at In- listic approaches to encourage a healthy lifestyle. program. University City novation Park; that is a very powerful endorsement BECO South brings in life coaches, nutritionists, Partners of the project’s transformation,” Epstein says. He chiropractors, and other alternative health care speculates that the complex is now worth close to professionals who meet with employees during $200 million, not including the undeveloped land. a two-hour lunch session. Local vendors were selected for the program in order to give them exposure and help them expand their businesses. Performance It has been nearly four years since the developer first imagined the vision for Innovation Park. As of June 2013, the campus is 93 percent leased. Nearly 5,000 employees currently work on campus, and an additional 1,600 employees from Allstate will be relocating there starting in April 2014. Additional large new tenants that joined the campus since BECO South purchased it include Wells Fargo & Co., AXA Equitable, and Siemens; in August 2013, Areva moved its North American headquarters here. The developer has just closed on its first 40,000-square-foot (3,600 sq m) stand-alone, built- to-suit building on the campus. Epstein was espe- BUILDING FOR WELLNESS: THE BUSINESS CASE 19

21 1221 Broadway San Antonio, Texas major residential THE 1221 BROADWAY PROJECT WAS THE FIRST PROJECT DATA development in the long-neglected, formerly industrial neighborhood of USE MULTIFAMILY HOUSING River North. The project’s proximity to the two-mile (3.2 km) extension of 307 RENTAL UNITS the Riverwalk and the city’s commitment to revitalizing this ragged edge of OTHER USE 10,000 SQ FT (930 SQ M) OFFICE downtown were key reasons AREA Real Estate purchased the abandoned YEAR OPENED project. Developer David Adelman recognized that the Riverwalk would be a 2011 SITE SIZE major draw for the project’s primary target market—young professionals and 3.87 AC (1.56 HA) empty nesters. “Our residents are renters by choice who are seeking a healthy RENTAL RATES $900–$1,600  lifestyle,” he says. DEVELOPER/OWNER AREA REAL ESTATE ARCHITECT LAKE/FLATO ARCHITECTS, O’NEILL CONRAD OPPELT ARCHITECTS INC. (ARCHITECT OF RECORD) LENDER HUD 221(D)(4) LOAN SECURED THROUGH ROCKHALL FUNDING Exterior of 1221 Broadway. Fitness classes are held in the open-air parking structure, on the right. Frank Ooms BUILDING FOR WELLNESS: THE BUSINESS CASE 20

22 Located 1.5 miles (2.4 km) north of downtown, 1221 Broadway is an adaptive use of a housing development that initially failed during construction in 2007. Occupying three blocks, 1221 Broadway transformed the abandoned concrete super- structure into a four-story structure offering 307 apartments and 10,000 square feet (930 sq m) of ground-floor office space. Main Wellness Features FITNESS AMENITIES Property manager Christian Vargas notes that many residents say they moved to 1221 to be near the Riverwalk, which they can use to walk to restaurants and entertainment and to jog and bike without needing to drive to a gym; the project’s Walk Score of 71 confirms that it is in a “very walk- able” location. On-site elements that encourage exercise and physical fitness include the following: Courtyards are  Fitnes s centers. The developer turned a rarely open to the elements and provides a 360-degree the site of many used space on the fifth floor of a garage into view of the city. The developer subsidizes the programmed an open-air workout space where classes in classes so residents pay only $5 per class; other, events. Chris Cooper high-intensity interval training are held twice a unsubsidized classes were offered but were week. Covered with a metal roof, the space is subsequently canceled because of poor turnout. Oversized floor-to-ceiling windows bring additional daylight into the residences and offer views of downtown. Chris Cooper BUILDING FOR WELLNESS: THE BUSINESS CASE 21

23 Yoga classes will be added soon with a similar subsidized agreement with the instructor. The project features two additional work- out areas: one is a free-weight gym with heavy dumbbells and studio flooring for classes; the other, a gym located next to the heated pool, has cardio equipment and light weights.  Residents can choose between two P ools. pools—the rooftop lap pool, heated during the cool season to promote year-round use, and a resort-style pool on the first floor. The cost for heating the rooftop pool is minimal.  veloper installed a In 2013, the de Biking. multitool bike repair station that is available 24 hours a day. The station is regularly used and well worth the minimal cost of only $1,000, says Adelman. Capitalizing on the proximity of the Riverwalk hiking/biking trail, the developer incorporated a number of other biking amenities, such as the on- site B-Cycle station, which is part of the downtown bike-sharing program, and about 100 outdoor bike racks are available to residents for bike storage. COURTYARDS AND OUTDOOR STAIRCASES/ SOCIAL INTERACTION Most of the residences are organized around court- yards, each with a distinct character, which gives a more human scale to the concrete superstructure and creates a collegial feeling, says project archi- tect David Lake. One courtyard has a 12-foot-long (19.3 m) table where residents often eat dinner; another has a barbecue area. The courtyards are used for programmed events—outdoor movie nights, fitness classes, and food truck dinners several nights a week. Instead of being embedded within the building, the stairs are placed on the outside walls facing the courtyards, Before and after images show thus becoming places where residents can meet the transformation of 1221 their neighbors, Lake says. Broadway from an abandoned concrete shell to a residential The courtyards also bring more light and fresh and office project with pools, air into the apartments. Planted with an abundance fitness classes, and bike of trees, the courtyards are shady in the summer amenities. Chris Cooper (top) and help minimize urban heat-island effects. Lake Flato (bottom) The project is unusually welcoming to pets. More than 100 dogs live in the complex. The dog park on the north end of the site is a favorite amen- ity and gathering place for residents. Annual costs for maintaining the park total about $1,500. BUILDING FOR WELLNESS: THE BUSINESS CASE 22

24 1221 Broadway’s exceed pro forma projections, and the developer’s ACCESS TO DAYLIGHT health and rate of return for this first phase was 8.4 percent. An important selling feature of the apartments wellness This early success encouraged the developer to features and is the oversized floor-to-ceiling windows, which amenities are build a second phase—an additional 39 apartments bring additional daylight into the residences, offer distributed above a 10,000-square-foot (930 sq m) single-story dramatic views of downtown, and make the units throughout the building (part of the original structure), which hous- complex. feel larger. “Our apartments have far more day- Lake Flato es the developer’s and leasing offices, as well as a lighting than any others in the area, which helped landscape architecture firm. The development team distinguish us from our competitors and boosted originally planned a retail/restaurant/entertainment lease-up,” Adelman says. Enlarging the windows development for this space, but came to recognize on a concrete frame structure was a challenge and that because “we were the first one on the block in costly, but well worth the effort, he says. this still-evolving neighborhood, there wasn’t suffi- cient density to support the retail,” says Lake. Performance The developer secured a HUD 221(d)(4) loan aimed at promoting market-rate projects in blighted In 2011, the project leased up its first phase of areas. “This neighborhood looked like Beirut after 268 units quickly, achieving 99 percent occupancy the war, and it was difficult to convince private within four months. “This was one of the fastest lenders to fund a project here,” notes Adelman. The lease-ups in the city,” notes Lake, and proved the 1221 Broadway project was the catalyst for addition- depth of the market in the River North district. al development in the previously derelict district—all It also proved that residents were willing to pay of which has been funded with private capital, he premium rents for smaller units. The average unit notes. Multiple commercial projects are underway in size unit at 1221 Broadway, 725 square feet (67.5 sq the area: more than 800 residential units have been m), is about 200 square feet (19 sq m) smaller than typical apartments in the San Antonio area. Rents built and about 600 or so are under construction. BUILDING FOR WELLNESS: THE BUSINESS CASE 23

25 Jackson Walk Jackson, Tennessee HEALTHY COMMUNITY LLC WAS SELECTED by the city of Jackson’s PROJECT DATA Community Development Agency to revitalize a 17-acre (7 ha) downtown site, USE FITNESS/WELLNESS/PRIMARY which had been sorely neglected for many years. At about the same time, the CARE CENTER: 82,000 SQ FT (7,600 SQ M) city was launching a community-wide health and wellness initiative to make OTHER USES Jackson the healthiest city in the state. 20,000 SQ FT (1,900 SQ M) RETAIL 149 MULTIFAMILY RENTAL UNITS; 32 SINGLE-FAMILY HOMES AT BUILDOUT YEAR OPENED 2013  SITE SIZE 17 AC (7 HA) LEASE RATES/RENTAL RATES LIFT: $13.50 PER SQ FT RETAIL: $15 PER SQ FT APARTMENTS: $675–$1,105; $1.01 PER SQ FT PROJECT COST $46 MILLION ($42 MILLION, PRIVATE FUNDS; $4 MILLION CITY AND PUBLIC SUPPORT) DEVELOPER/OWNER HEALTHY COMMUNITY LLC (A PARTNERSHIP OF CROCKER CONSTRUCTION COMPANY/HCB DEVELOPMENT AND HENRY TURLEY COMPANY) ARCHITECT LOONEY RICKS KISS (LRK) LENDER WELLS FARGO, SUNTRUST BANK EQUITY PARTNER HEALTHY COMMUNITY PARTNERS, JACKSON WALK PARTNERS LIFT houses a fitness center, a preventative care wellness center, a primary care clinic, and a café that serves sugar-free meals. Zvonkovic Photography BUILDING FOR WELLNESS: THE BUSINESS CASE 24

26 Paths through the site provide opportunities for physical activity and connect Jackson Walk with downtown. Looney Ricks Kiss In 2010, Tennessee had the second-highest Main Wellness Features obesity rates in the nation. News that potentially high employee health care costs had discour- FITNESS CENTER/WELLNESS CENTER/ aged a company from moving to Jackson was the CLINIC AS AN ANCHOR wakeup call, leading to the Jumpstart Jackson LIFT, which is operated by West Tennessee Health- initiative, which was intended to boost econom- care, is the Jackson area’s only medical fitness ic development as well as improve the health of center and had first considered a suburban location Jackson citizens. Using health and wellness as before deciding to partner with Healthy Commu- the redevelopment theme for Jackson Walk, the nity. The LIFT building houses a fitness center, a Healthy Community master developer selected preventative care wellness center, a primary care an 82,000-square-foot (7,600 sq m) medical care– clinic, and a café that serves sugar-free meals for based LIFT (Living in a Fit Tennessee) fitness/well- diabetics and calorie-conscious diners. The largest ness center as the site’s main anchor, creating a element, the fitness center, includes a gym with new type of anchor for the downtown as well. a basketball court, indoor pools, cardiovascular “Caring for your city is analogous to taking and strength-training equipment, and an indoor charge of your health,” says Hal Crocker, president walking track. of HCB Development, one of two partners that The wellness center offers physical and formed Healthy Community LLC. “Restoring an occupational therapy; cardio and orthopedic ailing part of downtown is vital to a city’s health and rehab; and programs focused on women’s health. long-term prosperity, much the way caring for your- The center holds numerous outreach events at self contributes to better health and a longer life.” schools and seniors’ centers, and has an extensive This infill redevelopment features the combi- disease-management pr ogram that offers free nation fitness center/wellness center and primary educational programs on diabetes and congestive care clinic, some retail space, and apartments. In heart failure. The center’s corporate-wellness addition, new single-family homes, a city-owned program partners with Jackson businesses to amphitheater, and a dog park create a new neigh- offer preventative care resources and guidance borhood around this center. to employees. The developer worked closely with the three main employers downtown—city hall, BUILDING FOR WELLNESS: THE BUSINESS CASE 25

27 the county courthouse, and the Jackson Energy fitness facility, its members tend to be older than Authority—which all purchased fitness center those at a typical gym; many are retired. As a memberships for their employees. result, the facility is busy throughout the day rather LIFT has become the hub for health activities than attracting peak use before and after work, in Jackson and sponsors numerous community which benefits the development’s 20,000-square- events, including monthly five-kilometer runs, foot (1,900 sq m) retail component. obstacle course runs, and high-speed bicycle races Healthy Community’s retail strategy is to target that attract several thousand people. Many groups retailers providing synergy with the health-related use Jackson Walk’s walking trails as part of their theme and the pedestrian-oriented community. LIFT Wellness Center serves event route. Of the total $44 million in development costs, $17 as an anchor The developer notes that the fitness center million was spent on the LIFT facility. for the newly and rehab components work well together. For redeveloped DESIGN FOR PEDESTRIANS AND BICYCLISTS site and a example, after completing their rehab program, fitness hub The developers recognized the importance of individuals have the option to continue pursuing for the city of making healthy choices convenient. The ability to long-term fitness goals and join the fitness center. Jackson. Looney Ricks Kiss reach three of the city’s largest employers as well Because the LIFT center is a medical care–based BUILDING FOR WELLNESS: THE BUSINESS CASE 26

28 as the West Tennessee Farmers’ Market on foot or by bike was a key factor in the developer’s decision to redevelop the site. The University of Memphis Lambuth Campus is also a walk or bicycle ride away. In addition, Jackson Walk residents have easy access to the amenities and services provided in the multiuse neighborhood. The site has a Walk Score of 72, indicating it is “very walkable.” On-site strategies include a parklike setting, with an unsightly concrete drainage artery trans- formed into an attractive water feature, and a 1.5- mile (2.4 km) walking trail with exercise stations. Additional walking and biking paths connect the site with downtown and midtown neighborhoods. To balance the convenience required by a medi- cal facility with the parklike ambience, automobile parking was split into smaller segments rather than provided in one large lot; some parking was tucked behind the commercial buildings. The developer undertook parking studies, which iden- tified opportunities for shared parking and helped convince potential retail tenants and the operators of LIFT that it was not necessary to surround the commercial development with a sea of parking. The West incentives from the city for first-time homebuyers, Tennessee and 20 larger homes at 2,400 square feet (220 sq Farmers’ Market, m). So far, Crocker has built four smaller homes: Performance providing city two have sold, for $115,000 and $122,000. A residents with The LIFT facility, which opened in January 2013 access to fresh model home for the larger-style residences, which and local food, and has attracted more 3,000 members, exceeded opened five months ago, is priced at $209,000. is located at the membership and financial projections in its first “Considering that these were the first homes built southern edge of year. The developer attributes much of LIFT’s suc- the site. in this part of the city in more than 40 years, it’s Nona Brummett cess to the pedestrian-friendly setting, with shop- early, and we’re still overcoming perception issues ping and restaurants nearby. Center members can typical of revitalization projects. But we are well walk or drive to the gym, then visit the nearby dry ahead of where we expected to be at this time,” cleaner, grab a quick lunch, or visit the farmers’ says Crocker. market without having to drive to each destination. The decision to make health and wellness the Sixty percent of members live within eight miles dominant theme at Jackson Walk was “not just the (13 km) of the center, and the remaining members morally right thing to do, it made economic sense,” come from throughout the region, bringing new life says codeveloper Henry Turley. to the area. Meanwhile, the city’s Jumpstart Jackson initia- The upscale apartments attract young, most- tive, which encourages citizens to “eat right, get ly single professionals who like the ambience of out, and get active,” is credited with helping reduce downtown living, and older empty nesters, who like city employee health care costs. And Jackson’s living in a neighborhood where many amenities are community-wide health and wellness initiative within easy walking distance, including the farmers prompted the U.S. Conference of Mayors to select market, downtown businesses and the entertain- Jackson in 2013 as one of the most livable cities in ment district, the new city-owned outdoor amphi- America in the small cities category. theater (opened spring 2014), and the dog park. PROJECT DATA S/WELLNESS/PRIMARY USE FITNES At buildout, Jackson Walk will also have 32 CARE CENTER new single-family homes, including 12 smaller 82,000 SQUARE FEET (7,600 SQ M) homes—1,300 to 1,650 square feet (120 to 150 THER USES AIL: 20,000 SQUARE O RET sq m)—that will be offered through special grant BUILDING FOR WELLNESS: THE BUSINESS CASE 27

29 The Century Building Pittsburgh, Pennsylvania SINCE THE LATE 1990S, DOWNTOWN PITTSBURGH has been experiencing a PROJECT DATA housing renaissance, largely for higher-income households. The redeveloped USE MIXED USE Century Building, which opened in 2009 with 28 affordable workforce units and 60 WORKFORCE AND MARKET- 32 market-rate housing units, was the first affordable housing built downtown. RATE APARTMENTS 12,000 SQ FT (1,100 SQ M) OFFICE Working with the Pittsburgh Downtown Partnership and other civic groups on 10,000 SQ FT (900 SQ M) RETAIL their goal of encouraging provision of workforce housing in central Pittsburgh, YEAR OPENED 2009 developer TREK Development Group had both a personal commitment SITE SIZE 8,000 SQ FT (743 SQ M)  RENTAL RATES/LEASE RATES MARKET-RATE APARTMENTS: $1,050–$1,550 FOR 1–2 BEDROOMS OFFICE: AVERAGE $18 PER SQ FT RETAIL: OVER $20 PER SQ FT PROJECT COST $18 MILLION DEVELOPER/OWNER TREK DEVELOPMENT GROUP ARCHITECT KONING EIZENBERG ARCHITECTS, MOSHIER STUDIOS FINANCING SEVEN PUBLIC, PRIVATE, AND NONPROFIT FUNDING SOURCES The redeveloped Century Building provided the first workforce housing units in downtown Pittsburgh. Eric Staudenmaier Photography LNESS: THE BUSINESS CASE BUILDING FOR WEL 28

30 and business motivation for achieving high stan-  or the market, A nonsmoking policy, unusual f dards for sustainability. “The market is increasingly which helped the project achieve LEED Gold. demanding sustainable features, including ones About six residents have been reprimanded for that promote an active, healthy lifestyle,” observes smoking, but only one resident has had to leave William Gatti, president of TREK. because of the policy. The 12-story, 80,000-square-foot (7,400 sq m),  ow-VOC paints and nontoxic materials Use of l formerly underused 1907 office building in the throughout the residences. downtown cultural district was redeveloped to pro-  onsistent level of heating and cooling provided A c vide housing for 60 residents, as well as two floors by the building’s open-loop, electric geothermal of office space and a restaurant. It was the first system. The system, which cost 5 percent more residential development in the city to achieve LEED than a conventional HVAC system, operates Gold certification and has a Walk Score of 100, indi- at roughly 30 percent savings compared with cating the location is a “walker’s paradise.” conventional systems. In severely cold weather, a backup gas boiler and cooling tower are used to supplement the geothermal system. Main Wellness Features TREK had used geothermal systems in A nonsmoking its projects regularly in the past ten years. About 15 percent of the construction budget was policy and the Because these open-loop systems draw water devoted to green and wellness features. use of nontoxic building from an aquifer, Gatti says it is important CLEAN INDOOR AIR materials have a to pay attention to water quality, which can positive impact Residents routinely inform the building manage- change over time. For example, the iron content on residents’ ment that their asthma and allergies have im- allergies and may increase, which can create problems for asthma. proved since they moved to the building. Strategies the heat exchanger. “It’s important that your Eric Staudenmaier for clean indoor air include the following: maintenance person has the requisite skills to Photography BUILDING FOR WELLNESS: THE BUSINESS CASE 29

31 care for these more complicated, specialized systems.” gy-recovery wheel, used to heat the  An ener common spaces, which creates positive pressure in the hallways, effectively removing the smell of spillover cooking odors from the building. The recovery ventilation system also provides fresh air when windows are closed. BICYCLE COMMUTER CENTER “We wanted to promote bicycle usage in a mean- ingful and elegant way,” notes Gatti, whose firm teamed with the Pittsburgh Cultural Trust, Pitts- burgh Downtown Partnership, and Southwestern Pennsylvania Commission to create an on-site bicycle commuter center. Largely funded by a grant from the Federal Transit Administration, the center provides secure bike storage for residents and is available to the office tenants and other city com- muters for $125 a year; about half the 49 spaces The prominent bicycle commuter center promotes bicycle use for residents and other city bikers. Eric Staudenmaier Photography BUILDING FOR WELLNESS: THE BUSINESS CASE 30

32 A rooftop deck with views of downtown Pittsburgh provides a gathering place for residents. Eric Staudenmaier Photography are used by residents. Constructed of recycled Performance shipping containers, the green-painted center When the renovation was completed in August was inexpensive to construct, and maintenance 2009, the Century Building was fully leased within fees are minimal—about $1,000 a year, including 90 days—six months ahead of schedule. Over the utilities. The primary cost is lighting the structure years, TREK has raised the rents for all the housing and hosing it down once a year. On the first three units, which are exceeding pro-forma projections. stories of the north building wall behind the center, According to Gatti, the location, the product, and the developer painted a bright green billboard with the price all helped make the development suc- a bicycle graphic as a way to call attention to the cessful, but it is the green and wellness features center and welcome the biking community. that are the main attraction. “Anyone in the indus- FITNESS CENTER try who is not intently focused on sustainability The building’s fitness room has eight pieces of and health is behind the curve,” he notes. “This is equipment and a dumbbell rack. It cost about what the consumer expects.” Moreover, these are $25,000 to equip the room; maintenance costs are the features that have contributed to the building’s minimal. remarkably high 90 percent retention rate, he says. BUILDING FOR WELLNESS: THE BUSINESS CASE 31

33 Via6 Ben Benschneider

34 CHAPTER 2 New Construction

35 Via6 Seattle, Washington BEFORE THE PINE STREET GROUP CONCEIVED OF VIA6, its adjacent blocks PROJECT DATA had no housing, very little street life, and few amenities. The design for Via6 USE MULTIFAMILY HOUSING was started with the objective of building a community rather than building an 654 STUDIO, ONE-, AND TWO- BEDROOM UNITS apartment building, says Matt Griffin, principal and managing partner of Pine YEAR OPENED Street Group. Taking that approach changed the way his company thought 2013 SITE SIZE about designing and marketing the project. Via6 is not only the first apartment 0.89 AC (0.36 HA) building Pine Street Group has developed, but also the largest residential RENTAL RATES $1,400 TO $4,380 project in downtown Seattle built in one phase. PROJECT COST  $193 MILLION DEVELOPER PINE STREET GROUP LLC ARCHITECT/INTERIOR DESIGNER GGLO EQUITY PARTNERS CANADA PENSION PLAN INVESTMENT BOARD AND THE MULTI-EMPLOYER PROPERTY TRUST, CLIENTS OF BENTALL KENNEDY, SEATTLE. The design for Via6 was started with the objective of building a community rather than building an apartment building. Tim Rice Architectural Photography BUILDING FOR WELLNESS: THE BUSINESS CASE 34

36 Griffin was inspired to create a place where people wanted to stay, as well as where they could live without needing to own a car. Via6 is located two blocks from the Westlake Transit Hub, which connects people to all reaches of the city. Via6 is a 24-story, two-tower mixed-use project spanning the length of one downtown block. It has 654 studio and one- and two-bedroom apartments located above 15,000 square feet (1,400 sq m) of community-oriented service businesses. Main Wellness Features Location aside, by focusing on building a commu- nity rather than an apartment building, Pine Street Group created a project that includes features that strongly promote both physical activity and social interaction—features that can be adapted in other projects. Establishing this sense of community is a big part of what sets Via6 apart from similar apartment complexes. With a perfect Walk Score of 100, the site is ideal for promoting walkability and bikability— and removing the need for car ownership. Griffin believes that a car-free lifestyle is a way to reduce the stress (as well as the cost) that comes with car ownership. Though the units are smaller than most in the e area—averaging 715 square feet (66 Seattl The seventh- sq m)—Griffin noted “the location is so good that floor pavilion over time we believe people will pay a premium to includes indoor be here.” and outdoor spaces that SPACES FOR COMMUNITY GATHERING AND encourage resident SOCIAL CONNECTIONS interaction. Creating spaces and opportunities for planned and Ben Benschneider spontaneous social interaction was a major factor in the design and remains a focus of operations of Via6. The original motivation for creating this sense of community was to retain tenants, Griffin says, but he now believes that if people know their neighbors, they will be healthier as well. Community-supporting w ellness features include: ound-floor public uses. A restaurant, grocery Gr  store, coffee shop, barber shop, and bike shop are used by both residents and the general pub- An 18-foot lic, providing both convenience to residents and (5.5 m) chances to meet others in the neighborhood. chronograph in the lobby An 18-f oot (5.5 m) steel-clad chronograph  displays located in the lobby. Residents and guests can information click through topics displayed on the chrono- about Via6 and the graph to see what is trending online and get the neighborhood. latest headlines. The chronograph also displays Ben Benschneider BUILDING FOR WELLNESS: THE BUSINESS CASE 35

37 A mezzanine level contains social amenities and games for residents and is visible from the lobby below. Ben Benschneider information about Via6, and neighborhood ame- pool tables and shuffleboard tables, and easy nities and services—all of which provide people chairs with tables. Abundant power outlets and with information that will help them strike up free wifi encourage residents to come down conversations with one another. from their units to work or relax during eve-  evel where activity is visible A mezzanine l nings and weekends, allowing people to meet Amenities located there include from the lobby. Bicycle amenities feature prominently within the ground and mezzanine levels of Via6. Pine Street Group BUILDING FOR WELLNESS: THE BUSINESS CASE 36

38 without having to go down to the street-level bars and restaurants.  The theater can ound-floor theater area. A gr be reserved for private events but is open to all residents when local sports teams are playing. Residents who are sports fans can watch their favorite teams in a social setting with other fans rather than watching in their own apartment.  An area on the seventh floor be- The pavilion. tween the two towers, referred to as the pavilion, has indoor and outdoor space that can be used nearly year-round due to Seattle’s temperate climate. Instead of individual grills, the area has three large barbecues with multiple controls, as well as communal tables, encouraging residents to cook and eat alongside their neighbors. Griffin says he has been amazed by the number of peo- ple who first met in this space. Left: ViaBike, with bike tools. The bike shop offers classes for a bike club  vent coordinators. During the first year, In-house e residents on changing flat tires and performing for downtown a husband-and-wife musician/artist team has lived other minor maintenance. The shop also reserves bicycle at Via6 rent-free in exchange for planning social a few bikes for lending to residents at no cost for commuters, provides secure events for residents to meet their neighbors. running errands. These features, which have made bike storage for Via6 known as a hub for bicyclists, have played a club members. SUPPORT AND AMENITIES FOR BIKING big role in marketing the building to prospective Bike storage for Via6 residents Via6 has embraced the notion of bikability not only residents and retail tenants, and in creating a is separate. for residents, but also for the broader downtown health-focused identity for the project, says Griffin. Ben Benschneider community. Griffin convinced the popular Velo Bike Right: The Shop—located in another neighborhood for 24 Velo Bike Performance years—to relocate to Via6 to help with this vision. Shop, which Pine Street Group also built space for ViaBike, relocated to Via6 has performed better than expected in terms Via6, serves as a bike club for downtown bicycle commuters that of income, Griffin says, though the Pine Street a bicycling hub is managed by Velo. For a monthly fee of $15, the Group measures early success more by lease-up for the whole club provides secure storage for 150 bikes, private rate than lease premiums. The firm expected it neighborhood. Ben Benschneider access to the club off an alley, and locker rooms would take 18 months for the project to be 90 per- with showers and towel service. Members’ bikes cent leased, but it took less than a year, despite the parked in designated stalls can be serviced by Velo small unit size and an increased apartment supply while their owners are at work. in Seattle. Rents range from $1,175 to $4,285 per Bike storage for residents is separate and is month, and Griffin notes that Via6 is pushing rent reached by a ramp off the alley. Residents also rates higher in Seattle. Rents at Via6 currently have access to a bike wash, air pump, and stands average about $3 per square foot. BUILDING FOR WELLNESS: THE BUSINESS CASE 37

39 The Interlace Singapore THE INTERLACE IS ONE OF THE LARGEST RESIDENTIAL DEVELOPMENTS in PROJECT DATA Singapore. The 24-story complex in Singapore’s District 4 has 1,040 residential USE MULTIFAMILY RESIDENTIAL condo units, ranging from two to four bedrooms to penthouse units, as well 1,040 CONDOMINIUM UNITS as eight retail shops. Seeking a solution in the face of scarce open space and OTHER USE 500 SQ M (5,400 SQ FT) RETAIL controls on floor/area ratios, the architect for the Interlace was “inspired by YEAR OPENED the old villages of Singapore,” says Ong Sim Lian, senior vice president for 2013 SITE SIZE design management at developer CapitaLand Singapore Limited (CLS). 8 HA (19.8 AC) SALES PRICES S$9,150–S$11,300 PER SQ M  PROJECT COST S$1.44 BILLION (US$1.14 BILLION) (APPROX.) DEVELOPER CAPITALAND SINGAPORE LIMITED DESIGNER OFFICE FOR METROPOLITAN ARCHITECTURE (OMA) ARCHITECT RSP ARCHITECTS PLANNERS & ENGINEERS (PTE.) LTD. EQUITY PARTNERS HOTEL PROPERTIES LTD. AND ONE OTHER SHAREHOLDER Multiple fitness amenities aimed at promoting a healthy lifestyle were incorporated, including a 50-meter (164 ft) lap pool. CapitaLand Singapore/ Woh Hup (Private) Limited BUILDING FOR WELLNESS: THE BUSINESS CASE 38

40 A one-kilometer Designed by Ole Scheeren, who was then the Main Wellness Features (0.6 mi) jogging partner in the Office for Metropolitan Architecture track surrounds (OMA), the Interlace breaks away from the standard the complex. DESIGN FOR PHYSICAL ACTIVITY CapitaLand Singapore typology of residential developments in Singa- The Interlace provides a wide range of facilities pore, which typically are composed of a cluster promoting a healthy lifestyle. The developer of isolated, vertical towers. At the Interlace, 31 estimates that expenses for the outdoor ameni- apartment blocks, each six stories tall, are stacked ties account for about 50 percent of the project’s in a hexagonal arrangement to form eight large- operating budget. The project’s physical-fitness scale courtyards. The interlocking blocks resemble facilities include the following: a “vertical village” with cascading rooftop gardens  ometer (0.6 mi) jogging track around A one-kil and terraces. “This arrangement allows for po- the perimeter of the main complex. Because the rosity of views, ventilation, and green spaces to be project is large, CLS has been able to build this spread throughout all levels,” says Ong. feature into the design since its conception. The During the concept and design phase, wind and track, four meters (13 ft) wide, doubles as access sun test analyses were conducted to maximize the for fire and emergency response vehicles, which benefit of shade in Singapore’s tropical climate. have the same width. These tests helped determine the placement of “to er (164 ft) Olympic-sized lap pool A 50-met  facilities and bodies of water to allow passive cool- encourage ‘serious’ swimming,” says Ong, as ing of the environment, thus encouraging outdoor well as a series of play pools. The lap pool is a activities. main feature provided in most of CapitaLand’s developments. BUILDING FOR WELLNESS: THE BUSINESS CASE 39

41 diameter. The developer noted that the variation  ter of three tennis courts and one multi- A clus in theme for the outdoor spaces is important to purpose court, positioned along one side of the encourage community bonding and social gath- blocks. erings to take place. One courtyard has a com-  with 26 e-meter (3,000 sq ft) gym A 280-squar munity garden that will be used by the residents’ pieces of equipment. garden club; another courtyard caters to children OUTDOOR AMENITIES/SOCIAL INTERACTION and includes a family-friendly playground. Other The developer considers ample open space a vital courtyards have pavilions, spa pools with Ja- feature of the project. Parking and bike storage are cuzzis and rainshowers, barbecue pits, a dog run located underground, freeing up space at ground area, and outdoor fitness equipment. level and above. Creating vast green spaces by  den” roof terraces accessible to Nine “sky gar The Interlace extending the landscape vertically, the Interlace’s all residents. These sky gardens together with is made up of 31 stacked ground landscape spans 66,641 square meters private roof terraces cover a total area of 23,588 blocks forming (717,300 sq ft). CapitaLand notes that all these square meters (253,889 sq ft). eight courtyard open spaces combined amount to over 112 percent areas. The AGING-IN-PLACE UNITS interlocking of the original land area. By maximizing green blocks allow The Interlace has features that appeal to multi- coverage, the Interlace ultimately extends living for views, enerational families. One-eighth of the units are g spaces outdoors for all its residents. ventilation, and aging-in-place (AIP) units with provisions that cater The primary outdoor spaces are: green spaces at all levels. to senior residents—for instance, bathroom access.  xagonal courtyards, each with a differ- Eight he CapitaLand In Singapore, bathrooms are traditionally separ ated ent theme and measuring 56 meters (184 ft) in Singapore BUILDING FOR WELLNESS: THE BUSINESS CASE 40

42 Themed from other rooms with a drop of about 2.5 to 5 Performance courtyards such centimeters (1 to 2 in). In the Interlace’s AIP units, as a community More than 80 percent of these units were sold those drops have been removed, making the units garden before the developer obtained a temporary occu- wheelchair-friendly. (pictured) and kids’ playground pation permit (TOP) in September 2013; the TOP The public spaces in the Interlace follow uni- promote social is granted when basic building requirements and versal design principles, allowing residents of any interaction amenities such as water and sanitary components age to gain access to them and enjoy the project’s between residents. have been approved by authorities. According to the amenities. For instance, the state-of-the-art fitness CapitaLand Singapore developer, there has been a 10 percent increase in center includes wheelchair-accessible weight ma- the sales premiums since the launch. chines. For incorporating multiple universal design features, the Interlace has been awarded the Gold Plus (Design) by Singapore’s Building Construction Authority. BUILDING FOR WELLNESS: THE BUSINESS CASE 41

43 Park 20|20 Haarlemmermeer, Netherlands was inspired DELTA DEVELOPMENT GROUP, DEVELOPER OF PARK 20|20, PROJECT DATA to follow the Cradle-to-Cradle (C2C) philosophy, a development strategy USE OFFICE conceived by architect William McDonough, the master planner for the project, 160,000 SQ FT (14,900 SQ M) and chemist Michael Braungart. The C2C platform is “a human-centered OFFICE, PHASE I 127,350 SQ FT (11,831 SQ M) design,” notes Owen Zachariasse, innovations and sustainability manager for OFFICE, PHASE IIA Delta, “meaning building occupants are central to all design choices we make.” RETAIL AND HOTEL AT BUILDOUT YEAR OPENED 2013 SITE SIZE 11 HA (28 AC)  LEASE RATES €200 PER SQ M OFFICE PROJECT COST €65.4 MILLION (US$89.5 MILLION) FOR PHASE I DEVELOPER/OWNER DELTA DEVELOPMENT GROUP ARCHITECT DONOUGH + WILLIAM Mc PARTNERS FINANCING REGGEBORGH GROEP ENGINEER ROYAL VOLKERWESSELS STEIN N.V. A spine of greenhouses spans the park in the center of the development. Delta Development Group BUILDING FOR WELLNESS: THE BUSINESS CASE 42

44 Walking and Park 20|20 is an 11-hectare (28 ac) mixed-use as well, allowing fresh air to enter directly from biking paths business park about eight kilometers (5 mi) south- outside. traverse the west of Amsterdam. The first phase of the project The developer also incorporated green walls as site’s nine was delivered in April 2013, and additional stages secondary air filtration techniques. Interior green hectares (22 ac) of open space. are to be completed by 2018. features were employed to sequester carbon dioxide Delta Development and produce oxygen. Plants for the green walls in Group building atriums were selected according to their Main Wellness Features ability to live indoors with little water and light, and the amount of oxygen they produce. Moss was used The site sits only 100 meters (330 feet) from train to back partitions separating work areas as a sound and bus transit and has a Walk Score of 72, which buffer and as a natural dust filter. indicates a “very walkable” location. On site and within the context of its overarching NATURAL AND LED LIGHTING C2C strategy focusing on building high-quality and Though the Netherlands has an office lighting code sustainable spaces, Delta has provided the follow- requiring 500 lux of artificial light per workspace, ing wellness components for Park 20|20. Delta exceeded those by also providing natural CLEAN INDOOR AIR lighting at minimal cost at Park 20|20. Buildings are designed in a horseshoe shape, with large A Slimline floor system with a 70-millimeter-thick atriums allowing light to permeate indoor spaces (2.8 in) concrete core was implemented in buildings from two sides. to allow for air circulation, heating, and cooling. This For artificial lighting, the developer employed concrete-and-steel subfloor allows for radiant heat- LED lights as much as possible—the closest light- ing, eliminating the need for much of the traditional ing type to sunlight—with a combination of general ductwork that requires regular cleaning and can and task lighting. Traditional halogen lights give blow dust particles into the office space. All office off too much heat and can lead to worker fatigue, buildings in Park 20|20 contain operable windows BUILDING FOR WELLNESS: THE BUSINESS CASE 43

45 says Zachariasse. Even so, the natural lighting at DESIGN FOR PEDESTRIANS AND FITNESS Park 20|20 is so effective that Zachariasse notes Park 20|20 is a car-free site at ground level. he has “not once seen the task lighting turned on.” Multiple walking and biking paths traverse the In addition, Park 20|20 buildings use an automat- site, connecting nine hectares (22 ac) of open ed MechoShade sun-shading system to regulate space, including an entire park and buildings that lighting—the first project in the Netherlands to do sit above parking. One notable aspect of the site so. The system reads cloud cover and automatically design is the central park’s visibility from sur- adjusts interior lights to create the best possible rounding streets, creating a more open and inviting environment for occupants. space. Parking is provided in underground garages To address the higher investment costs of LED reached at the perimeter of the property, adjacent lighting compared with traditional halogen lights, to pedestrian access points. Delta is renting the lighting system from lighting Park 20|20 offers a fitness program that is also supplier LED Lease. Each year, Delta calculates available to employers located off site. The devel- the amount it expects to spend for lighting and oper collaborated with the municipal government, pays that amount upfront to LED Lease. At year’s which provides trainers for fitness classes both end, Delta compares that amount with the actu- indoors in the gym and outdoors. Both the upkeep al energy consumed and settles the difference, of the gym and the classes are paid for by tenant getting a rebate if its electricity use is lower than association dues. projected. Renting the LED system—or “leasing COMMUNITY GARDENS/SOCIAL INTERACTION light”—is cost-effective: “Both Park 20|20 and our company have the [financial] incentive to save Two greenhouses have been completed in the first energy to the greatest extent possible,” says Gijs development phase, part of a spine of gr eenhouses de Rooij, CEO of LED Lease. This process elim- under construction that will span the middle of Park 20|20 is a inates the initial investment for purchasing the the development. The greenhouses are already car-free site at higher-cost LED system, and Delta has received producing food that is purchased by Delta’s on-site ground level. William McDonough rebates on the estimated rental expense. + Partners BUILDING FOR WELLNESS: THE BUSINESS CASE 44

46 Plants for the green walls in building atriums were selected for the amount of oxygen they produce, as well as their ability to live indoors. Foppe + Schut restaurant; the remaining food is sold to another local restaurant. The greenhouses are available for use by any- 20, as well as provide a | one who works at Park 20 work opportunity for local seniors and other city residents. To scale up the garden initiative, Delta Development is looking to provide similar green- houses at future projects in order to incorporate Park 20|20 into a wider urban farming concept. CLEAN OUTDOOR AIR The green roofs installed on all buildings not only provide a safe habitat for migrating birds, but also absorb particles from the outdoor environment. Park 20|20 is near Amsterdam’s Schiphol Airport, so outdoor air purification is especially important. Performance Park 20|20 is currently 100 percent leased and lease rates are €200 per square meter, a premium of about 12 percent over other local Class A new- build offices. Phase II office buildings, now under construction, are also 100 percent pre-leased. One major challenge for the developer was expressing its vision to the project’s contractors. Delta’s philosophy meant that major adjustments had to be made in the development process, partic- ularly in the contractors’ approach. “The industry is not adverse to change,” says Zachariasse. “It’s petrified of change.” In order that they might share Delta’s perspective and methods, all contractors, Overall, the cost of materials was not signifi- architects, and other project partners were trained cantly higher than for those used in a more tradi- in C2C design standards and principles by Braun- tional development, Zachariasse says, and Delta gart’s consulting company EPEA GmbH. may even see savings, especially by buildout of A key element of Delta’s development process the project’s later phases. So far, there has been a was the integration of its supply chain into the reduction in construction costs of 14.8 percent per design and approval process. Delta first conducted square meter. a broad-based study of the availability of C2C- ertified materials, offering some distributors c preferred materials status, and then informed the Studies general contractor of its findings. This process took place as early as possible in the design process. According to a press release in late 2013 by the Although this ran counter to the traditional supply Arizona State University Global Sustainability Solu- chain approach—which involves “playing a waiting tions Center (GSSC) at Haarlemmermeer, GSSC game” in an attempt to acquire materials at the will conduct research and analysis for Park 20|20 cheapest prices, says Zachariasse—Delta was able in order to assess the links between employee and to retain the highest value in its final product. firm productivity and the built environment. BUILDING FOR WELLNESS: THE BUSINESS CASE 45

47 Via Verde New York, New York VIA VERDE WAS THE WINNING RESPONSE IN 2006 to the city’s first juried PROJECT DATA design competition for affordable, sustainable housing. In early meetings USE MIXED-INCOME MULTIFAMILY with the city, South Bronx residents voiced concerns about their unhealthy 71 WORKFORCE CO-OPS, neighborhood, characterized by a lack of safe places for physical exercise 151 LOW-INCOME RENTAL APARTMENTS and low-quality housing with high levels of pollutants and noxious chemicals, OTHER USES 5,500 SQ FT (510 SQ M) MEDICAL known contributors to asthma. The South Bronx at the time had among the CENTER highest rates of asthma nationwide and high obesity rates. “This feedback from 2,000 SQ FT (185 SQ M) PHARMACY YEAR OPENED local residents influenced our decision to make health a dominant theme of  2012 Via Verde,” says Paul Freitag, managing director of project coowner/developer SITE SIZE 1.5 AC (0.6 HA) Jonathan Rose Companies. PROJECT COST $98.8 MILLION DEVELOPERS/OWNERS PHIPPS HOUSES, JONATHAN ROSE COMPANIES ARCHITECTS DATTNER ARCHITECTS, GRIMSHAW ARCHITECTS, LEE WEINTRAUB LANDSCAPE ARCHITECTURE FINANCING 19 PUBLIC, PRIVATE, AND NONPROFIT FUNDING SOURCES FOR DETAILS, SEE ULI.ORG/CASE- STUDY/ULI-CASE-STUDIES-VIA- VERDE/. Via Verde has an abundance of safe spaces for play and physical activity. Jonathan Rose Companies

48 Via Verde was codeveloped by Jonathan Rose Companies and Phipps Houses on a city-owned site ate in the South Bronx, New York, as a public/ priv partnership. The 6,400-square-foot (595 sq m) mixed-income development—combining high-rise and mid-rise housing, townhouses, and a health clinic and pharmacy—features rental apartments and co-op units. It has a Walk Score of 82, indicat- ing a “very walkable” location. Although the project cost about 10 percent more than a typical project its size, only a small portion of the excess cost went into green features (the developer estimates about 3 percent). The other cost increases were associated with remediation required by the brownfield site, the expense of high- Outdoor stairs idents to walk instead of using elevators—follow rise construction, and poor geotechnical conditions. connect a series New York City’s 2010 Active Design Guidelines, of green roofs which calls for stairwells that are accessible, and form a Main Wellness Features visible, and well lit. In contrast to the dark, fore- rooftop garden walk to reach Via boding cinderblock stairwells of older buildings, Verde’s orchard CLEAN INDOOR AIR Via Verde stairwells have bright paint and wide and gardens. Jonathan Rose The LEED Gold–certified development uses various windows to let in light and make residents feel Companies strategies to ensure good indoor air quality, among secure and comfortable. The developer originally them use of nontoxic low/non-VOC paints, sealants, planned to provide music in the stairwells, but and adhesives throughout the buildings. Freitag ran into a snag with city regulations. However, he says one great success of LEED is that by calling plans to offer music in the stairwells of a project attention to air quality and health issues, it has led in Philadelphia. to a larger selection and greater availability of rel- Stairs at Via Verde also have signs to en- atively inexpensive non-VOC products and healthy courage their use. “People adjust their behavior Various types building materials in local stores. based on these prompts,” says Freitag, “so it’s of gardens about incentivizing behavior changes and de- are integrated DESIGN FOR PHYSICAL ACTIVITY throughout Via signing a building to reinforce that.” Verde. Dattner Stairways at Via Verde—placed  e staircases. Activ Outdoor stairs connect a series of green Architects/Grimshaw prominently next to entrances to encourage res- roofs, forming a rooftop garden walk to reach Architects BUILDING FOR WELLNESS: THE BUSINESS CASE 47

49 Vegetable gardens and orchards provide residents with fresh produce and opportunities to learn about gardening. Jonathan Rose Companies the apple orchard and vegetable gardens on cost associated with the bike storage room was the the fourth and fifth floors. (The name Via Verde loss of leasable space given over to the room. means “green way” in Spanish). Next to the fit- Opportunities for exercise and s center.  Fitnes ness center on the seventh floor, the landscaped activity are provided at the fitness center, where area used for outdoor exercise classes and social residents can exercise or take yoga and cardio events completes the promenade. “We designed classes; Pilates classes for children are planned. the stairs as an architectural feature and made Partnerships with various nonprofits, including the walk interesting and beautiful so that by the Montefiore Hospital, allow the developer to offer time people reach the green roof on the seventh these classes for free. floor, they don’t realize that they have climbed  The e/social interaction. Urban agricultur The interiors of the units seven stories,” says Freitag. Although walking dominant image of Via Verde is the series of feature nontoxic the stairs is encouraged, all parts of the devel- terraced green roofs that cascade from the top and low-VOC opment, including the garden roofs, are handi- of the 20-story high-rise to the rooftops of the materials to provide clean capped accessible. lower-elevation buildings, then to a ground-level indoor air.  e storage. Bik Freitag notes that bike rooms have courtyard with an amphitheater. “Green roofs Jonathan Rose Companies evolved into a desirable building amenity. The main provide many benefits, including dissipating BUILDING FOR WELLNESS: THE BUSINESS CASE 48

50 heat-island effect, building insulation, and associated with organic gardening and higher absorbing rainwater,” Freitag notes. “Also, we water costs during dry summers. wanted them to function as a building amenity Education and communication are key to a that residents could enjoy. So we decided to successful urban agriculture program. “We felt create opportunities for urban agriculture, where the residents needed guidance in the first couple residents could grow fresh produce, socialize of years, so we hired GrowNYC to start the with their neighbors, or just relax.” Moreover, gardens. Now they act as mentors to the garden the South Bronx was a food desert, a problem club members,” says Ruperti. Ruperti waited to the roof orchards and vegetable gardens at Via start the club until residents were taught the re- Verde address. sponsibilities associated with membership. The The developer contracted with GrowNYC, a garden club membership application contains nonprofit that sets up urban gardens through- explicit rules—for example, committing mem- out the city, to plant the gardens at Via Verde. bers to at least three hours of work per week The first growing season produced an im- during gardening season and participation in at pressive harvest of 1,000 pounds (450 kg) of least six of eight monthly garden and cooking vegetables, donated to food banks and shelters workshops. Likewise, garden rules—prohibi- because Via Verde residents had not yet moved tion of smoking, eating, drinking, and playing in. GrowNYC also works closely with Via Verde’s music—are clearly communicated to residents garden club members and conducts workshops when they move in. on planting, harvesting, and composting. Mem- bership is limited to 30—one-third are tenants Performance and two-thirds are co-op owners. Rather than giving residents individual garden plots, Via Units were absorbed quickly. Verde management followed the community The 151 rental units, offered garden model, in which the gardens are operat- through a lottery, attracted ed collectively. Garden club members select the 7,000 applications; 5,000 vegetables and herbs each season and assign people are on a waiting list. tasks to different members. The for-sale units sold out in An important goal of Via Verde’s urban ag- seven months. Int ended as a riculture program is to educate families about new model for urban hous- food production and healthy eating. Local chefs ing, Via Verde demonstrates donate their time to lead cooking classes teaching a commitment to create the Via Verde residents how to use seasonal produce next generation of housing from the gardens to prepare nutritious meals. that addresses poverty, GrowNYC also organizes a “food box” program, health, and sustainability. The open to all residents: farmers set up a produce development has won nation- tent each Wednesday and charge $10 for 12 al recognition and received pounds (5.4 kg) of seasonal fruits and vegetables. numerous awards from local Residents who receive federal nutrition assistance and national organizations, get a $2 discount. such as the American Plan- Max Ruperti, senior property manager with ning Association, the Urban Phipps Houses, who oversees operations at Via Land Institute, and the New Verde, estimates that 1 to 2 percent of the devel- York chapters of the Amer- opment’s operating budget is devoted to main- ican Society of Landscape taining the gardens and green roofs. The plan is Architects and the American to gradually shift stewardship of the community Institute of Architects. Brightly colored, prominent, and well- garden from GrowNYC to residents. In this third lit staircases encourage residents to year, GrowNYC’s contract for garden services is walk instead of taking the elevators. significantly smaller than in previous years, and Robert Garneau as residents assume greater responsibility for the garden, operating costs will shrink. Ruperti notes unanticipated added costs: pest control BUILDING FOR WELLNESS: THE BUSINESS CASE 49

51 Grow Community Deb Henderson BUILDING FOR WELLNESS: THE BUSINESS CASE 50

52 CHAPTER 3 Master-Planned Communities BUILDING FOR WELLNESS: THE BUSINESS CASE 51

53 Grow Community Bainbridge Island, Washington “EVERY ELEMENT OF GROW COMMUNITY is intentionally planned to create PROJECT DATA a sense of community. The physical structure as well as community programs USE MASTER-PLANNED COMMUNITY are designed to build an interactive environment and strong social network for 24 SINGLE-FAMILY HOMES AND people to form close connections with their neighbors,” says Marja Preston, 20 MULTIFAMILY UNITS IN PHASE I; 132 RESIDENCES AT BUILDOUT president of Asani Development, the project developer. The developer chose to YEAR OPENED 2013 follow the One Planet Living framework; Grow Community is one of only seven SITE SIZE endorsed One Planet Communities in the world. The principles of One Planet 8 AC (3.2 HA) promote zero-carbon buildings, a reduction in water use, waste reduction, RENTAL RATES/SALES PRICES APARTMENTS: $1.75–$1.95 PER  and use of sustainable, healthy building materials. But they also call for SQ FT HOMES: $295,000–$525,000, “encouraging active, sociable, meaningful lives to promote good health and DEPENDING ON LOCATION AND FLOOR PLAN—1,180–1,880 SQ FT well-being”—the primary tenet that shaped the design of Grow Community. The (110–175 SQ M) developer chose to follow the One Planet principles with the goal of creating a PROJECT COST PHASE I: $16 MILLION, INCLUDING profitable, and therefore replicable, development model. An important element LAND DEVELOPER/OWNER of this strategy was to provide housing at a price point that young families, single ASANI DEVELOPMENT households, and individuals on fixed incomes could afford. ARCHITECTS DAVIS STUDIO ARCHITECTURE + DESIGN LLC, CUTLER ANDERSON ARCHITEC TS LENDER BUILDERS CAPITAL EQUITY PARTNERS A GROUP OF FIVE INDIVIDUAL LOCAL INVESTORS Grow Community was designed to encourage walking, biking, and engagement with neighbors. Deb Henderson BUILDING FOR WELLNESS: THE BUSINESS CASE 52

54 The first phase was built with parking on the perimeter of the site; interior sidewalks connect the streets to the homes. Deb Henderson Phase I of this three-phase residential com- hall, the local farmers market, and shops, and ten munity combines 24 single-family homes with 20 minutes from the ferry terminal, which is a short rental apartments organized around shared com- ride from downtown Seattle. Its Walk Score of 80 munity gardens. At buildout, the eight-acre (3.2 ha) confirms that it is in a “very walkable” location. development will have 132 residences, a communi- On-site strategies to promote walking and exer- ty center, and an early childhood center. cise are the following:  P arking in Phase I is on the perimeter of the site; residents use paths crossing through the Main Wellness Features community gardens to reach their homes on foot. This design, derived from focus-group CHEMICAL-FREE INDOORS participants, was intended to encourage walking Following the One Planet Communities guidelines, and biking and spontaneous encounters with the zero-net-carbon homes at Grow Community are neighbors, and to encourage people to think constructed with sustainable healthy materials that twice before driving. Preston notes that from an contain no harmful chemicals and emit no noxious urban planning perspective, perimeter parking fumes. Preston notes that homes built at a similar is an interesting concept, but seems risky to price point to that of Grow Community typically have developers and investors. Nonetheless, Asani vinyl windows, which do not meet One Planet goals. decided to follow prospective residents’ recom- Asani decided to use wood/fiberglass windows to mendations in Phase I. meet the sustainable materials guidelines, even The paths were designed to be safe and though this option resulted in a 25 percent cost in- inviting for both adults and children. Vehicle crease for the overall window package. The result is roads are separated so cars never cross the a home with more durable, longer-lasting windows walking paths. In place of playgrounds inserted and better indoor air quality. in the community, the paths were designed with natural play elements, such as circles of flat DESIGN FOR PEDESTRIANS AND BICYCLISTS granite rock for children to jump on and play on. The site, on the edge of the town of Winslow on The site was designed so that parents would feel Bainbridge Island, is a five-minute walk from city comfortable letting their children walk on their BUILDING FOR WELLNESS: THE BUSINESS CASE 53

55 design components where they could remain into old age. By placing parking beneath the build- ings in Phase II, the design not only eliminates the visual impact of surface parking and mini- mizes impervious area, but it also allows three of the five acres in the second phase to be used for open space and community gardens.  T o further reduce the amount of car use, thereby encouraging walking, the developer started a car-share program: residents pay a small monthly fee to use a Nissan Leaf car. The charging station for the car is connected to a dedicated solar array that provides sufficient renewable energy to power the car. COMMUNITY GARDENS/SOCIAL INTERACTION Instead of having individual front yards, the e-family homes are clustered around commu- singl own to town, where the library, schools, and the Garages are nity gardens. In Phase I, the first of four gardens not part of the swimming pool are only minutes away. (one per pocket neighborhood) was constructed first phase, so  ause there are no garages, the homes have Bec for the model homes built in 2012. Asani plans to storage sheds storage sheds for bicycles, garden tools, and oth- and shared hold “work parties” to help residents build their bike barns are er outdoor gear. A number of residents have too gardens and to build a sense of community. Asani provided for many bikes to fit in the shed (one resident owns will provide soil and other materials for these early residents. Deb Henderson eight), so the developer built additional shared gardens before they are turned over to residents. In bike barns and storage for kayaks. Later phases, order to share resources and expertise, residents however, will have parking underground in decided recently to manage all four garden spaces response to input from baby boomers, whose in- as one large “urban farm” rather than allocate terest in Grow Community was not anticipated by separate plots to each household. the developer. These older prospective residents A nonprofit organization, Grow:Connected, will also wanted one-story homes with universal manage programs for the community center. The Interiors of Grow Community homes feature chemical-free materials and wood-frame windows. Anthony Rich BUILDING FOR WELLNESS: THE BUSINESS CASE 54

56 Four community developer envisions creating an “eco-concierge” sales. Instead, the first 22 for-sale units on the gardening position within the nonprofit. The concierge would market sold out within six months. There is a long spaces provide develop educational programs about urban garden- waiting list for rental units still under construc- residents with ing, One Planet Living, green building, and renew- tion; current rental units go for $1.75–$1.95 per opportunities to grow their own able energy. square foot, while other rental properties have produce and to Preston notes the importance of meeting early typically gone for $1.10–$1.25 per square foot. build a sense of with potential residents to learn their preferences. Sales were so strong that Asani had to accelerate community. Deb Henderson Another bit of information gleaned from these early its construction schedule. “We’re halfway through meetings was a strong preference for intergen- construction on Phase I, in schematics for Phase II, erational living: potential residents 55 and older and people already want to reserve units in Phase showed a strong desire to live in a community with III,” notes Preston. “We intended to list on the MLS, families and children. Asani plans to design the but haven’t needed to.” Although advertising did daycare center with universal design elements to not extend beyond Bainbridge Island, only half the accommodate older residents for volunteer work residents came from the island; the rest came from with children. around the United States and Canada. Performance With no comparable residential projects in the region that lenders could consider when weighing a loan, Asani Development, made up of a group of local investors, put up the equity itself for the three model for-sale homes. When Grow Community opened in August 2012, Seattle’s housing market was still sluggish, so Asani expected lackluster BUILDING FOR WELLNESS: THE BUSINESS CASE 55

57 Selandra Rise Casey, Australia IN 2008, THE STATE GOVERNMENT OF VICTORIA and the Planning Institute PROJECT DATA of Australia launched a groundbreaking partnership to facilitate a blueprint USE MASTER-PLANNED COMMUNITY for residential greenfield development projects. Stockland, Australia’s largest 1,300 HOMES AT BUILDOUT residential developer, joined this partnership to create Selandra Rise, a 10,000 SQ M (107,600 SQ FT) COMMERCIAL SPACE, OPENING demonstration project focused on principles of health and well-being, as well LATE 2015 YEAR OPENED 2011 SITE SIZE 115 HA (284 AC) SALES PRICES  A$295,000–A$595,000 PROJECT COST A$258 MILLION (US$231 MILLION) DEVELOPER STOCKLAND FINANCING FUNDED FROM STOCKLAND’S BALANCE SHEET Selandra Community Place holds 20 to 30 monthly community programs. Stockland BUILDING FOR WELLNESS: THE BUSINESS CASE 56

58 as diverse and affordable housing options and funded from Stockland’s balance sheet, with no employment opportunities within the project. equity partners needed at the table. The partner- Selandra Rise delivered a variety of programs, ship aspect of Selandra Rise has benefited Stock- amenities, and housing price points previously land from both a development and an operations not available in the Melbourne market, says Mike standpoint. Stockland built much of the community Davis, Stockland’s general manager of residential infrastructure, but partners—including the city of Hilltop Park development. Casey, the Victorian Health Promotion Foundation includes Selandra Rise is a 115-hectare (284 ac) (VicHealth), and the Growth Areas Authority (rep- outdoor fitness mas ter-planned community in the city of Casey, resenting the Victoria state government)—brought equipment. Stockland 50 kilometers (30 mi) south of Melbourne. The many services to the table as well. community currently has 65 townhouses and 793 two-, three-, four-, and five-bedroom single-family detached homes. The first phase opened to resi- dents in 2011, and the development is progressively being built out with input from the residents as the community grows and evolves. Main Wellness Features Even with the focus on health-promoting features, Selandra Rise cost no more than comparable projects Stockland has developed, Davis says. However, the company did have to commit a great deal of time to ensure that the community was delivered as envisioned by the partners. The cost of the wellness components was only 1 to 2 percent of the total project cost, he estimates. The project was An off-street biking and walking path is located along Clyde Creek. Stockland BUILDING FOR WELLNESS: THE BUSINESS CASE 57

59 Selandra Rise was designed in a gridded pattern to encourage walking and biking and to provide direct access to parks and trails. Stockland planned for a later phase. Heritage Park, opened in RESIDENTIAL PROXIMITY TO PARKS AND March 2014, incorporates a community garden that COMMUNITY WELLNESS FACILITIES was planned and designed by the residents. All homes are within 300 meters (less than a quar- DESIGN FOR PEDESTRIANS AND BICYCLISTS ter mile) of parkland, giving residents easy access by foot or bike to the Clyde Creek trail, small pock- Walkability within Selandra Rise was a key devel- et parks, and larger destination parks that contain opment principle pursued by Stockland and its facilities such as playgrounds. partners. The community was designed to have Hilltop Park, centrally located within the de- a permeable and gridded street network that en- velopment, has an outdoor fitness station with a sures direct connections among residences, open variety of exercise machines similar to what would space, and community facilities, with short blocks and sidewalks lined with trees. be found in an indoor gym. A sports park is also BUILDING FOR WELLNESS: THE BUSINESS CASE 58

60 The street network and the off-street path network encourage walking and biking. A wayfin- ding system informs residents of the time it will take them to walk and bike to various destinations within the community. In addition to the dedicated bike lanes and sidewalks that line the streets of the development, two kilometers (1.25 mi) of wide off-street walking and bike paths are located along Clyde Creek and in Hilltop and Heritage parks. WELLNESS PROGRAMMING AND SOCIAL INTERACTION Selandra Community Place (SCP), a community facility operated by the city of Casey and centrally located within the Selandra Rise development, opened shortly after the first community’s res- idents moved in. SCP organizes and promotes health, wellness, and social activities for residents. Residents the city of Casey are primarily responsible for the Twenty to 30 programs per month are arranged by have played programming costs. SCP, including walking groups both for children a role in the The partnership component of Selandra Rise design of the going to and from school and for adults, allowing was different from that of the typical Stockland community’s them to socialize; food-sharing programs; cooking open spaces. developments, but provided the opportunity to and gardening lessons; and fitness classes. The Stockland create a dynamic and successful new community. free programs are tailored to the needs of the com- In addition, Stockland learned about the impor- munity, with classes added or dropped based on tance of articulating specific marketing messages those needs. In addition to providing opportunities to potential residents through open discussions for improving physical health, SCP programming of the importance of health and well-being. Davis helps promote the social cohesion of the new com- says the Selandra Rise process has offered many munity, offering residents the opportunity to meet insights that will have benefits across Stockland’s their neighbors and reinforcing safety. entire portfolio as a range of new projects integrate SCP also acts as a laboratory for sustainable similar livability principles. and healthy building design, showcasing elements that residents can emulate, such as use of healthy building materials and strategies for improving Studies indoor air quality. An especially innovative aspect of this development is a multiyear longitudinal study of the community, Performance funded by project partner VicHealth, which will produce quantitative data on how the range of well- The market response to Selandra Rise has been ness initiatives benefits residents. The study has extremely favorable. According to Davis, it is the begun, with the first 18 to 24 months of data col- fastest-selling community project in Australia. lection establishing the baseline for the residents. Home prices range from A$295,000 to A$595,000 Stockland will be evaluating the baseline and how (with an average price of A$370,000)—A$7,000 to the community evolves in order to ensure that A$12,000 higher than competitor projects. The Selandra Rise is contributing to the c ommunity’s higher prices and sales volumes are linked directly health and well-being, and will make programming with the health and wellness focus of the project, or infrastructure adjustments if results are not as Davis says. “In time, I expect that the things em- expected. bedded at Selandra Rise will become an expecta- tion in the marketplace,” he says. Operating expenses are similar to those of other Stockland projects, even with the specialized health and wellness components. Partners such as BUILDING FOR WELLNESS: THE BUSINESS CASE 59

61 Rancho Sahuarita Tucson, Arizona master-planned INSPIRED BY SOME OF THE COUNTRY’S GREAT PROJECT DATA communities—such as Columbia, Maryland; Reston, Virginia; Celebration, USE MASTER-PLANNED COMMUNITY Florida; and Rancho Mission Viejo, California—developer Robert Sharpe set out 11,000 RESIDENCES AT BUILDOUT to create the most affordable, highly amenitized, lifestyle-oriented community OTHER USES 1.3 MILLION SQ FT (121,000 SQ M) in southern Arizona founded on promoting physical, social, and emotional RETAIL AT BUILDOUT well-being. By making physical activity and other elements of wellness readily 6 ON-SITE SCHOOLS (COMBINED 170 AC) WITH 4,000 STUDENTS accessible, the developer made it easier for residents to pursue healthy life 40 MI (64 KM) PAVED PATHS AND BIKE TRAILS AT BUILDOUT choices. Moreover, convenience and easy access to these health-related (EXCLUDING NEIGHBORHOOD  SIDEWALKS) amenities were important in appealing to the community’s primary market— YEAR OPENED first-time buyers and generation X families—as well as in distinguishing 2002 Rancho Sahuarita from competing neighborhoods. SITE SIZE 3,000 AC (1,200 HA) SALES PRICES $220,000–$350,000 (FOR MOST- RECENT HOMES) PROJECT COST $100 MILLION, SPINE INFRASTRUCTURE AND AMENITIES; $125 MILLION, BUILDER SUBDIVISION IMPROVEMENTS; $1.3 BILLION, TOTAL IMPROVEMENTS (HOMES, PUBLIC AND COMMERCIAL BUILDINGS) DEVELOPER/OWNER SHARPE & ASSOCIATES INC. INITIAL LENDERS NATIONAL BANK OF ARIZONA, ALLIANCE BANKS OF ARIZONA; PROJECT CURRENTLY UNENCUMBERED EQUITY PARTNER PRIVATE PLACEMENT OFFERING EQUITY INVESTMENT $4.1 MILLION A safari trail with life-size bronze animals is one of the kid-friendly community features that encourage play. Rancho Sahuarita BUILDING FOR WELLNESS: THE BUSINESS CASE 60

62 The Rancho Sahuarita Clubhouse features a fitness center and more than 50 classes per week. Rancho Sahuarita Located nine miles (14.5 km) south of Tucson Lake, he set back homes from the water to in the town of Sahuarita, Rancho Sahuarita, is a provide space for a park and a wide pedestrian 3,000-acre (1,200 ha) master-planned community promenade. Lake Park, which is visible from two with a town center and a central Lake Park. Since collector roads, serves the entire community and 2002, national homebuilders have sold more than is a popular venue for concerts, art fairs, triath- 5,000 homes—about half of the residential portion lons, parades, and festivals. of the project—and there are currently more than  Community f acilities. The Rancho Sahuarita 15,000 residents. Clubhouse, a 30,000-square-foot (2,800 sq m) recreational facility located on the lake, has a 6,000-square-foot (560 sq m) fitness center with Main Wellness Features cardiovascular and strength-training equipment, dance and aerobic studios, multipurpose rooms, AMENITIES FOR PHYSICAL AND SOCIAL a lap pool, and a splash park. Residents can ACTIVITY select from more than 50 classes a week, most The developer has invested more than $100 million of which are covered by the HOA fee, including in community infrastructure, with about 30 percent karate, yoga, ballet, tennis, and stability ball allocated to amenities that encourage healthy classes; residents can register online for events physical and social activities. and classes. Personal training and sports camps To help offset the cost of this extensive ameni- are also offered, and a fee is charged for some of ties package, Rancho Sahuarita assesses a “parks the more advanced programs. and rec” fee of $2,500 per home on builders and The clubhouse also has an “adventure park” the HOA charges a 1 percent “community enhance- with an activities lawn, basketball and tennis ment fee” on resale houses. The HOA’s annual courts, a playground, and a mini-golf course. operating budget, which is funded by monthly dues Sharpe’s goal is to use Rancho Sahuarita’s of $93 per home, is about $5.5 million, with about facilities and services to help busy generation 40 percent of this income spent on maintenance of X households pursue a healthy lifestyle as they the amenities. take care of ordinary chores and responsibilities. When en-acre lake as community focus. T  For example, Rancho Sahuarita’s on-site ba- Sharpe created the ten-acre (4 ha) Sahuarita by-sitting service makes it easy and convenient BUILDING FOR WELLNESS: THE BUSINESS CASE 61

63 for residents to work out at the health club or swim at the pool without having to worry about taking care of their kids.  Neighborhood f acilities. Neighborhoods are served by 15 pocket parks and several larger satellite parks with pools, volleyball and bas- ketball courts, and other amenities to promote physical activity.  Kid-friendl y community facilities. The devel- oper created butterfly and desert gardens for children, as well as an African animal safari trail, replete with life-size animals in bronze.  aths and trails. Forty miles (64 km) of paved P walking paths and bicycle trails connect resi- dents to schools, parks, and commercial and recreational areas. PARTNERSHIPS TO PROMOTE FITNESS AND HEALTH The developer’s primary strategy for promoting health care and wellness is to form partnerships with like-minded stakeholders such as ondelet Car Health Network, a major health care provider in the Tucson area, which operates a primary and urgent-care facility in Rancho Sahuarita’s Market- place shopping center. Carondelet is in the design phase for a larger Health and Wellness Pavilion in the community’s town center, which will combine on-site urgent care with preventative health care facilities. Rancho Sahuarita also partners with Carondelet to offer a children’s “Be Well” Summer Camp, a “Healthier You” lecture series, a Health and Well- ness Day, and “Walk with a Doc” and “Lunch and Learn” programs that provide residents the oppor- tunity to ask local physicians questions. In addition, Carondelet supports Rancho Sahuarita’s kindness program by giving a “kindness mug” to residents at coffee socials to encourage compassion and em- pathy in the community. This emphasis on the re- lationship among kindness, happiness, and mental health furthers Rancho Sahuarita’s goal of creating a friendly place to live in by promoting kindness as a key to emotional and social well-being. The developer has partnered with numerous other organizations—United Way of Tucson and Southern Top: The ten-acre (4 ha) lake is a popular venue for community-wide events. Rancho Sahuarita Center: Among the activities organized by the community are sports camps for kids. Rancho Sahuarita Bottom: The splash park and lap pool are popular for fun and fitness in the Arizona heat. Rancho Sahuarita BUILDING FOR WELLNESS: THE BUSINESS CASE 62

64 Forty miles (64 Arizona, American Red Cross, United Community Performance km) of paved Health, Tucson Alliance for Autism, and the Young paths connect Since 2002, national homebuilders have sold more Athletes program of the Special ympics—to en- Ol residents than 5,000 homes at Rancho Sahuarita with a total hance health and wellness programming. to schools, parks, and value topping $1 billion, making the development Rancho Sahuarita also has a strong working commercial and one of the best-selling master-planned communi- relationship with the Sahuarita Unified School recreational ties in the country. Rancho Sahuarita has continu- District (SUSD), which has located six of its schools areas. Rancho Sahuarita ally dominated southern Arizona’s housing market, and recreational amenities in the community and accounting for an 8 to 18 percent share of sales in within walking distance of most of the homes. the Tucson metro area. The development’s “walking school bus” provides From 2001 to 2006, it’s platted lot prices more parents and children the opportunity to exercise than doubled. During the same period, Rancho together every day. SUSD’s health-related summer Sahuarita’s home prices, which initially experi- activities include free baseball camps and swim- enced a 10 percent discount to similar homes in ming programs at the new aquatic center located better-located subdivisions, rose almost 80 percent in the town center. and now command a 10 percent premium. Robert Sharpe notes that in response to the recession, Sharpe attributes these price increases and the ac- many developers have elected to cut costs and have celerated sales pace to Rancho Sahuarita’s healthy incorporated lower-budget amenity approaches lifestyle, amenities, and programming. “Our overall into their master-planned communities, like pro- success indicates that the strategic positioning of grammed open space. He emphasizes the impor- a development through an amenities program that tance of investing in hard infrastructure—such as promotes health and wellness can differentiate a the activity center, the lake, parks, and linear parks community from competing neighborhoods and with walkways—that creates venues for the “soft” mitigate long-term risks,” he says. programming. “Programming is not a quick, easy, and inexpensive solution to create instant commu- nity,” adds Sharpe’s son Jeremy, who heads Ran- cho Sahuarita’s community development endeav- ors. “It requires enormous effort and commitment to do programming well.” BUILDING FOR WELLNESS: THE BUSINESS CASE 63

65 Mueller Austin, Texas MUELLER WAS DESIGNED TO BE AUSTIN’S MODEL of antisprawl and PROJECT DATA sustainable development. However, as it has evolved, certain principles USE MASTER-PLANNED COMMUNITY of sustainability were implemented in ways now recognized as promoting 5,700 HOMES AT BUILDOUT, 25 community health and wellness, including protection of air quality, increased PERCENT AFFORDABLE OTHER USES pedestrian activity, and use of low-emission building materials. 4 MILLION SQ FT (372,000 SQ M) RETAIL AND OFFICE Mueller’s 700-acre (283 ha) site is at the former municipal airport just YEAR OPENED three miles (4.8 km) from downtown Austin and two miles (3.2 km) from the 2007 University of Texas. The first phase opened in 2007 with 350 single-family and SITE SIZE 700 AC (283 HA)  442 multifamily homes and 240,000 square feet (22,300 sq m) of retail space. SALES PRICES/RENTAL RATES MARKET-RATE SALES: $150,000– $1,000,000 AFFORDABLE HOME SALES: $125,000–$210,000 MARKET-RATE RENTALS: $879–$3,860 PROJECT COST $300 MILLION DEVELOPER/OWNER CATELLUS, CITY OF AUSTIN (JOINT PROJECT) MASTER PLAN/URBAN DESIGN ROMA DESIGN GROUP, MCCANN ADAMS STUDIO FINANCING The city of Austin owns and holds the land until it is taken down for infrastructure or vertical development. Catellus funds all the infrastructure costs with its own equity and is reimbursed for public infrastructure through tax increment financing or land sales revenue. The redevelopment of a municipal airport located three miles (4.8 km) from downtown Austin, Mueller was designed to meld seamlessly with the surrounding community. Thomas McConnell Photography BUILDING FOR WELLNESS: THE BUSINESS CASE 64

66 Currently there are 1,970 homes, 1.8 mil-  ork of protected bike lanes—provided in A netw lion square feet (167,000 square m) of retail and an update of the original master plan—that are office space, and 75 acres (30 ha) of parks, with buffered from automobile traffic by concrete 3,500 residents and 3,500 employees. At buildout, curbing. Existing streets have been retrofitted projected for 2020, Mueller will have more than with the improved safety measures, and new 5,700 homes, 25 percent of which will be reserved streets planned for future phases will incorpo- for low-income households; 4 million square feet rate these cycle tracks. (372,000 sq m) of commercial and office space; and  eation features such as sports courts, a Recr 140 acres (57 ha) of public parks and open space. state-of-the-art children’s playground, and a Mueller is well on the way to achieving its grand stretching area with pull-up bars and outdoor vision of melting seamlessly into the rest of the city. showers at Lake Park. Community gardens and a working orchard are planned in future phases at Mueller. Main Wellness Features SOCIAL INTERACTION COMPREHENSIVE NETWORK OF OPEN Before opening the first phase of Mueller, Catellus SPACE AND STREETS organized a block party to help new residents meet their neighbors and share contact information be- Master developer Catellus Development Corpo- fore moving into their homes. This forging of social ration and master planners ROMA Design and connections early on led to formation of grassroots McCann Adams Studio worked to develop complete interest-based groups, in addition to the communi- streets and open-space networks within Mueller ty’s property owner’s association, shortly after res- that include the following: idents moved in. Residents have formed more than  Side walks with shade trees that provide pedes- 40 different clubs, including fitness clubs. “There trian comfort during the extreme Texas heat and is so much community activity, we as a develop- connect to a comprehensive trail system—import- er could never keep up with it all,” says Deanne ant for both recreation and the residents’ ability to Desjardin, vice president of Mueller marketing. move around the community—to further encour- External organizations organize events in Mueller’s age walking and cycling. This trail system links to open spaces as well; Lake Park alone draws more existing parks and open space outside the site, ex- Most homes include porches than 70,000 people per year to larger-scale events. tending access to recreation for Mueller residents, to encourage The design of the residences in Mueller also as well as allowing residents of the surrounding social interaction facilitates social contact: homes are construct- community—who played a role in creating a vision between neighbors. ed with front porches to encourage interaction for the site—to be connected to the new parks, Thomas McConnell between residents and their neighbors out walking amenities, and retail space at Mueller. Photography BUILDING FOR WELLNESS: THE BUSINESS CASE 65

67 and cycling. This interaction is also encouraged by CLEAN INDOOR AIR A network the location of the homes on each lot. The homes of trails and All homes and commercial buildings in Mueller are sidewalks are located very close to the sidewalks with small required to be built to city of Austin Energy Green promotes biking front yards, facilitated by midblock alleys that move Building standards, which emphasize a healthy and walking. the garages to the back of the homes. These alleys Thomas McConnell indoor environment. At all its Mueller residences, Photography (top) also provide additional outdoor spaces for play and David Weekley Homes, one of the larger home- Holly Reed gathering. Photography (bottom) builders in the community, uses healthy, low-toxin building materials, a tight building envelope, and controlled and filtered mechanical ventilation sys- tems that bring in fresh air. Jim Rado, area president for David Weekley Homes, estimates that the firm spends an average of $2 to $3 per square foot to en- sure healthy indoor air along with upgraded energy efficiency products in all homes across its portfolio, but has seen good returns on that investment. Performance More than 1,000 people signed up for a lottery for Phase I lots when homebuilders only had sketches to show, and the 350 Phase I homes sold out. About ten different builders have designed and constructed homes at Mueller; David Weekley BUILDING FOR WELLNESS: THE BUSINESS CASE 66

68 All of Mueller’s Homes has built 35 to 40 percent of all units and idents and increased the marketability of commer- homes and over 60 percent of the affordable units—both town- cial sites to prospective office developers, as well. commercial houses and single-family homes—to date. Rado According to Jim Adams, former principal at ROMA buildings are and Ken Swisher, division president of David Week- Design and current principal of McCann Adams built to the city of Austin’s ley Homes, note that absorption rates in Mueller Design Studio, some residents waited for specific Green Building are the highest any community they are building of lots that would put them close to a park, a trail, or standards. Thomas McConnell in, and at There are the highest price per foot. the grocery store. Photography the development have variety of factors unique to a contributed to this success. Though the healthy Studies features at Mueller play a role in this success, so do other factors, such as proximity to downtown; Studies by the University of Texas and Texas A&M the architectural style of the homes (unique in have examined the effects of the pedestrian and Austin due to strict Mueller guidelines); and the bicycle orientation of Mueller on resident’s activity strength of Catellus’s master plan. levels. In both studies, residents reported they Though Catellus says breaking out the devel- had increased their physical activity—walking and opment and operations costs of the wellness com- biking—by 40 to 50 minutes per week. Catellus is ponents from the total project cost is difficult, it currently providing development information to acknowledges that these components have added other studies measuring health-related variables cost to development while also contributing to the such as physical activity and access to healthy project’s success. The project team has no doubt food in order to better understand their effects on that Mueller’s wellness components attracted res- resident health. BUILDING FOR WELLNESS: THE BUSINESS CASE 67

69     Building Healthy Places Initiativ e 978-0-87420-334-9 ISBN 51995 Building Healthy Places Initiative 1025 Thomas Jefferson Street, NW Suite 500 West Washington, DC 20007 9 780874 203349 www.uli.org ULI Center for Capital Markets and Real Estate BuildingforWellness2014cover.indd 2 3/18/14 2:13 PM

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