While doing some research for a potential Strong Towns visit to the Bay Area, I was introduced to Ian Ross with OppSites. OppSites helps communities connect with developers to spur infill development projects. This could be a useful resource, particularly for communities that have taken steps to prioritize infill development.
Jason Schaefer: Tell us a little bit about your background.
Ian Ross: I am not a real estate developer, as one might expect. Rather for fifteen years beginning in 1999, I worked as an urban design consultant, providing economic development and planning services to cities, mostly throughout California. I've always been an advocate for economically responsible investment and sustainable growth.
JS: How did that background inform what you are doing today?
IR: A few years ago, I completed (yet) another corridor plan for (yet) another city. That plan, called the Park Street Revitalization Code, created a vision and regulations to guide desired new investment for a disinvested portion of Park Street in the city of Alameda, CA. All-in the plan required over 2 years of meetings with community members, stakeholder groups, and elected officials, and the city spent quite a bit of money and political capital preparing and approving studies, reports, findings, and ultimately adopting the development code, unanimously.
The adopted code replaced the 1958 zoning which limited development to single-story commercial buildings and a huge off-street parking requirement - with a new code that permitted 5 story buildings with a mix of residential, commercial, office, and lodging above ground floor retail.
The day after Council adopted the plan, I remember walking the corridor and looking at a privately-owned half-acre corner lot with a run-down muffler shop and a bunch of cars in disrepair, and thinking to myself, 'holy shit, nobody knows'.
- Nobody knows - that the plan was adopted.
- Nobody knows - that somebody could build 4 stories of housing above ground floor retail on that site- by right - tomorrow.
- Nobody knows - that the city is planning new transportation investments to connect the corridor with BRT to the nearby BART system, and soon it will be a 20 minute commute to San Francisco.
- Nobody knows - that there are additional incentives, that density bonus rules apply, that the city will streamline approval.
- Nobody knows - that new project proposals will have the full support of the community.
O.K. - not 'Nobody’…granted, there were plenty of city planners, a few consultants, and a handful of residents and business owners who knew the details, but the only people from the Real Estate sector who knew, were two local brokers who track every lease in the corridor and hope to find another site that works for the regional Walgreens rep.
The problem hit me like a ton of bricks, and mortar...
JS: We like puns! So essentially, you are saying the city and various stakeholders went through a long and laborious process to make their corridor more friendly to mixed-use development, denser housing development and transit. But they didn't have a plan to actually get the desired development to occur?
IR: Cities and communities of every size (and price point) are responsible for planning for growth. They often create incentives, change zoning, and craft policies to enable and guide new development. And when those efforts increase development capacity on publicly and privately owned property, they create new economic potential. And just at the time when cities and communities are ready to implement those visions, the efforts die down, the plan goes on a shelf, and the economic potential goes unrealized.
That site, like so many properties in every community across the country wasn't necessarily for sale, but had enormous economic potential. With so much potential at stake, how do cities connect with the right real estate professional?
JS: What are cities doing to reach out to developers and real estate professionals?
IR: I spent some time researching the ways that cities were communicating their potential with members of the investment community. And I spent even more time interviewing developers, brokers, and acquisition guys to understand how they found their sites. What I found is that there are almost no standards and few shared methods from one city to the next. In fact, the whole industry of economic development employs highly inefficient communications tools and at times relies solely on word-of-mouth, and private relationships.
Some of the cities I was working with hosted semi-annual ‘broker breakfasts’ during which the economic development director would stand in front of a room of local brokers_whom they had known for years_ and present slides of ‘opportunities’ consisting mostly of for-sale properties that were well-known and had been combed-over by everyone in the room. But at least it gave everyone a chance to get together and chat about local sports and schools while enjoying pastries and coffee.
Lots of cities created their own ‘economic development webpage’, replete with a list of for-sale properties, vacant store fronts, and perhaps a link to the city’s fee schedule. We ran analytics on some these web pages, and found that very few of them were receiving many views, if any at all.
We didn’t meet a single developer who ever visited a city’s economic development web page to find an opportunity. Not one.
JS: How are the developers finding opportunities?
IR: We did learn that while developers who build everything from retail neighborhood centers to affordable housing to multi-fam employ similar methods for performing due diligence on a site using architects, attorneys, brokers, title companies and their own staff, they all have vastly different methods for finding development sites, and understanding what exactly the city will eventually approve.
Some developers rely exclusively on personal relationships with mayors and other elected officials. Others pay staff to track zoning hearings, read policies, and make meetings with planning directors. Many say they simply know someone, and if they don’t, they find someone who knows someone. Others were reluctant to reveal their ‘special sauce’ for knowing how to decide where to build, before other developers start driving up the costs. Most developers agreed that finding ‘off-market’ sites that have new upside was key to being successful, and they ALL agreed that the most important thing there is to know about any site was what the city would eventually approve, and that insight comes from spending a great deal of time building relationships, all of which requires time, and money.
JS: You were seeing this disconnect between real estate professionals and communities that have areas ripe for infill redevelopment. It sounds like that was your inspiration for starting OppSites. Can you tell us about that?
IR: We built the OppSites Economic Development Network to connect cities and communities who actually want investment, with real estate developers looking for opportunities. You can think of it as LinkedIn for Cities and Real Estate Developers.
Cities of all sizes and locations can join the OppSites network for free, create a profile page, then highlight an unlimited number of publicly and privately owned properties whose redevelopment would advance their community's goals, even if those sites are not currently for-sale. Those sites can be shared with and viewed by the growing network of real estate professionals. Premier members gain access to OppSites Site Accelerators - wherein OppSites actively pushes opportunities out to our national network of real estate developers, helping to draw attention to sites that might otherwise go unnoticed.
Real estate professionals use OppSites to find development opportunities that have local support, and connect with the right person at the city to request additional information, and begin a meaningful discussion.
JS: You had mentioned in an earlier conversation that you see this as an opportunity to introduce some transparency. Can you elaborate on that?
IR: A lot of real estate development gets done through word-of-mouth. Some developers make a point of knowing the high-level staff and elected officials in the cities they're interested in. OppSites levels the playing field and gives all communities the ability to communicate with a network of real estate developers who they maybe don't already know, or have access to.
OppSites has been called matchmaking for cities and developers. We like to think of it as Economic Development 2.0
JS: Have you had any pushback from local developers in the communities OppSites works with?
IR: No. We haven't received any pushback from developers. My guess is you're inferring that local developers who benefit from inside knowledge about development opportunities might be concerned that OppSites could create competition for them by sharing those opportunities broadly.
My candid response to that is, well, too bad. Let me explain. When communities get together to create a vision, make a plan, write policies and make capital investments, they don't do it for the sole purpose of benefitting local developers - they do it because they want the community to evolve.
If there are local developers who can participate in that evolution, that is great. Keep in mind - every opportunity site posted on OppSites was posted by someone working for a city, or economic development organization, in order to attract prospective developers. In fact, quite often we hear from cities that OppSites is helping them gain exposure from developers who they otherwise would never have met. And that's a good thing if there aren't enough local developers with the right mix of skills and capacity to tackle every opportunity in town.
JS: Have you seen smaller developers utilize this resource or has it been mostly larger developers?
IR: OppSites evens the playing field for developers of every size. Whether you're a team of one, or the vice president of acquisitions for a national developer, you can use OppSites to find development opportunities in every city on the network. In fact, once you're on the network, you can 'Follow' any city you like, and OppSites will notify you of sites that match your criteria as soon as they are posted... and you didn't even have to take the mayor to lunch.
JS: How many communities and developments are listed?
IR: We launched OppSites just over a year ago. Currently there over 1,100 opportunity sites posted by over 320 cities in the network.
JS: Where can people learn more?
IR: If you’d like to learn how to post sites, or find sites on OppSites, feel free to join one of our upcoming webinars, or simply reach out to us at firstname.lastname@example.org