Testimony on Clean Energy DC Act

My name is Payton Chung, I live in Southwest Waterfront in Ward 6, and I am testifying with regard to the Clean Energy DC Omnibus Amendment Act of 2018. I am also a board member of the District of Columbia chapter of the Sierra Club, which has heartily applauded this bill, and an editor for Greater Greater Washington.

I’m a homeowner in a vulnerable location, just a few meters above the rising tides in the Anacostia and Potomac rivers. Some of my neighbors live in houses that are over 200 years old, which have made it this far, but whose survival in coming decades depends upon the passage of this bill and others like it.

The past few years of weird weather have given us a small taste of what a destabilized climate means for DC. So-called “business as usual” carbon emissions are a misnomer, as they will ensure that business will soon become very un-usual. Instead, businesses need the certainty of knowing that emissions will decline, and therefore that their business can indeed proceed as usual.

Passage of this bill will also cement DC’s position as a leader in green business development. We are the nation’s undisputed champion in the green and energy-efficient building sector, with more buildings certified under the Leadership in Energy and Environmental Design (LEED) or Energy Star rating systems per capita than any other U.S. city. Green building professionals like myself (a LEED accredited professional in neighborhood development) have risen to the challenge set by DC’s high standards for building energy efficiency, and are capable of helping DC achieve the even more rigorous standards included in this bill. By expanding the SETF and Green Bank, this bill also ensures that all Washingtonians can implement these advanced technologies.

Passage of this bill will also boost expand DC’s already substantial “green dividend” – the economic gains we see from the fact that DC residents spend relatively little on fossil fuel imports, and therefore spend more with DC businesses. Since DC does not produce oil or gas, every dollar spent on these fuels vanishes from our local economy in a puff of smoke. Increasing energy efficiency for our buildings and transportation network directly lowers operating costs, saving businesses and residents money and keeping dollars within DC.

Thank you for the opportunity to testify in favor of the Clean Energy DC Omnibus Amendment Act.

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Overrated and underrated cities

Screen Shot 2018-09-16 at 18.07.47

 

Which cities did I expect to enjoy visiting, and which ones did I enjoy in reality? Here’s a 111%, completely, utterly, totally subjective look at 57 cities in North America, reduced to a scatterplot. Since the data labels might overlap, a link to the full spreadsheet is here.

Overall, I found that about 75% of cities are about as hyped as they deserve, with the hype being informed mostly by overall population and media buzz. This makes the outliers all the more interesting. The most overrated cities:

  • Austin
  • Miami (tie)
  • Cleveland (tie)
  • Boulder (tie)
  • San Francisco (tie)

Yes, Cleveland (4,2) tied San Francisco (9,7).

Surprisingly, I’ve found more cities are underrated, probably because I had an exceptionally fine experience:

  • Philadelphia
  • Madison
  • Asheville
  • Ottawa
  • Minneapolis
  • Richmond
  • Newark
  • Buffalo
  • Providence

As always, YMMV. Based on visits mostly within the past decade.

Coming soon to a power center near you: Ikea?

Big Blue Box

Atlanta, Ga.

Ikea is in the midst of a complete rethink of their US store strategy, rapidly announcing the cancellation of multiple superstores that were due to open in 2020: in my hometown of Cary, N.C., outside Nashville, west of Phoenix, and Fort Worth. Other stores set to open in 2020 could also be canceled, affecting plans in northwest Denver, the East Bay, and northwest of Atlanta. Stores already under construction, like one in Norfolk, are proceeding as planned.

As Ikea branched out from America’s top-20 metro areas (median population ~5 million) to the top-40 metro areas (reaching some with populations below 1.5 million), it doubled its store footprint — but now each new-build store addressed fewer than half as many potential customers. Some of the mid-sized cities draw from large hinterlands and can easily support full-sized stores, like Salt Lake City or Jacksonville… but many blur into Ikea-served regions nearby: Hartford, Providence, Tulsa, Richmond, Raleigh, or Buffalo and Rochester (near Toronto). Even within the megacities, customers on the far side of town, or downtown, don’t want to carve out an entire day to drive all the way across town to wait in long lines and stress-eat meatballs.

Much has been written, albeit with few details, about Ikea opening shops in city centers. A look at their small shops in the UK and Canada indicate that they’re primarily using these new compact store formats to reach smaller metro areas, not necessarily “alpha” global cities, and to fit into strip malls where people are already shopping.

A quick review of the five US-drugstore-sized “IKEA order and collection points” in the UK & Ireland turns up:

  • two urban locations, although with plenty of parking, in large metros with existing suburban stores (London & Birmingham)
  • two suburban locations outside smaller cities that previously didn’t have IKEAs (Norwich & Aberdeen)
  • one suburban location, across town from an existing full-size IKEA (Dublin)

Canada’s six “IKEA Pick-up and order points” are up to twice as large — about the size of a small supermarket, from a Fresh Market on the small end (20,000 sq ft) to a Whole Foods Market on the large end (40,000 sq ft). They are all located in suburban locations, outside smaller cities in Ontario and Quebec. Around Toronto, for instance, are a series of smaller satellite cities — close enough that people could drive to the city for Ikea, but in practice rarely do. The biggest city, Hamilton, has a full Ikea, but what do with the smaller ones? Now that the PUP exists, every city can have a conveniently sited Ikea. For instance, Ontario’s Tri-Cities, a collection of college towns (Kitchener, Cambridge, Waterloo) about 60 miles outside Toronto, with a regional population of about 500,000. There, IKEA located in a Costco-anchored strip mall in the center of the region — well away from the area’s universities. All of the six PUPs are adjacent to either Costco, Home Depot, or the like; five are in power centers, and one in an enclosed mall (although untraditionally anchored by Walmart).

The “Pick-up and order points” (PUPs) address many of the potential customer segments that its previous superstore strategy missed. Since they’re 90% smaller than full-sized stores, they can easily branch out into smaller metro areas, or fill in around megacities. As a bonus, they can go into existing spaces, for faster and cheaper build-outs, and can go into first-tier locations rather than being shunted to second-tier sites which happen to have room. Several have even backfilled existing dark big boxes — e.g., Birmingham was a Toys ‘R’ Us.

Two of the cancelled locations, in Cary and Nashville, were being planned as part of turnaround plans for dying malls. Those locations contrast sharply with the first wave of Ikea USA locations, which were often right outside fortress malls. Future PUPs will likely be in well-trafficked power centers, close to fortress malls, and are a terrific opportunity for landlords like Kimco or DDR.

Neighborhood guide: DC’s waterfront

[A guide for my houseguests, which others might find useful.]

There are four major commercial areas within walking distance; they’re also all connected via the DC Circulator’s L’Enfant Plaza – Eastern Market bus route. The table below is roughly arranged from nearest to furthest.

WS – Waterfront Station; has most necessities
W – District Wharf; entertainment and retail destination, see wharfdc.com
LP – L’Enfant Plaza, 1+ km northwest near 10th & D St. SW; office area and major public transit hub
YThe Yards, 2 km east near 2nd & M SE; entertainment and retail surrounding baseball stadium

Essentials and shopping

  • Safeway supermarket (5 AM-midnight) – WS
  • Public library (9:30 AM–9 PM, except 5 PM close Fri-Sun, 1 PM open Sun & Thu) – WS
  • CVS pharmacy – WS, W, LP
  • Senate Dry Cleaners (tailor) – WS
  • Enterprise rent-a-car – WS
  • Post office (24 hours) – LP
  • District Hardware & Bike – W
  • Politics & Prose books – W
  • Anchor Ship Store (beer, sundries) – W
  • Cordial (wine/liquor) – W
  • M Street Yoga – WS

Dining highlights, updated 6/2018

  • Masala Art (Indian, jazz Wed/Fri) – WS
  • All About Burger – WS
  • Velo Cafe (coffee) – W
  • Canopy Central (spacious hotel bar) – W
  • Hank’s Oyster Bar (seafood) – W
  • Union Stage Tap (local beer, pizza) – W
  • Del Mar (elegant Spanish, reserve) – W
  • Dolcezza (ice cream, coffee, breakfast) – W
  • Officina (Italian) – W
  • Due South (Southern) – Y
  • Agua 301 (Mexican) – Y
  • All-Purpose (pizza) – Y
  • Bluejacket (brewery) – Y
  • Chloe (global) – Y
  • District Winery – Y
  • Lot 38 (coffee) – Y
  • Salt Line (seafood) – Y
  • Rasa (Indian) – Y

Attractions

  • Arena Stage theaters, half-price tickets at 7 PM – 6th & Maine, between WS & W
  • Anthem, Pearl Street Warehouse, Union Stage concerts – W
  • Riverwalk, seasonal boat rental and ice skating, summer Wednesday free concerts – W
  • Fish Market, cooked blue crabs & fresh fish – W
  • Washington Nationals baseball stadium – Y
  • Farmers’ market on Sunday midday, spring-fall – Y
  • Yards Park waterfall/splash park, summer Friday free concerts – Y
  • East Potomac Park golf, mini-golf, tennis, outdoor pool – W, free shuttle boat from 7th St. pier
  • Tidal Basin, cherry trees, memorials – 6.5km round-trip walk through W

Getting around

  • Metro Green Line – WS, LP
  • Metro Yellow, Blue, Orange, Silver Lines – LP
  • Capital Bikeshare – WS, W, Y, LP
  • Southwest Shuttle to National Mall (free) – W (by CVS), LP
  • DC Circulator ($1) runs between LP, W, WS, Y, and Eastern Market, via 7th St SW & M St.
  • Water taxis to Alexandria, Georgetown/Kennedy Center ($20 roundtrip) – W

Beyond the neighborhood — by foot, Metro, or bikeshare

  • National Mall: 1.5km north (along 4th or 7th St.); my favorites are the Air & Space Museum with its giant IMAX cinema, African-American Museum, American History Museum, Botanic Garden, Holocaust Memorial Museum, Hirshhorn, Freer, and Sackler Galleries, and National Gallery of Art.
  • Downtown DC/Gallery Place/Chinatown: 2.3km north (just beyond the Mall), particularly along 7th St., F St., H St., and I St. (NW), is the busiest retail, dining, and entertainment area in the city. The American Art Museum, Building Museum, and Renwick Gallery are excellent and compact.
  • Capitol Hill: 2.5+ km northeast, home to the Capitol and Library of Congress, plus shops and dining around Eastern Market (7th & C St. SE, additional vendors on weekends) and along H St. NE.
  • 14th & U St. and Shaw are two of the city’s liveliest nightlife areas, just up Metro’s Green Line. For a more hipster vibe, try 11th St. in Columbia Heights and Georgia & Upshur St. in Petworth.

Recommendations from others

Focus preservation resources on the best, and let the city continue to evolve

Comment submitted to HPO, regarding its Preservation Plan.

I am a homeowner, in a historic landmark building. I have been a National Trust member for my entire adult life, and have spent almost all of that time living in National Register-listed buildings. I consider myself an ardent preservationist.

It therefore pains me to say that the historic preservation process in DC is broken — as I have recently documented in Greater Greater Washington. The District has designated almost as many historic structures as New York City, which has 6.4 times as many total structures. Thousands of unremarkable buildings such as production-built rowhouses and strip mall parking lots, almost identical to thousands or even millions of others around the country, have been deemed by HPO and HPRB to be “locally significant” for seemingly no other reason than the fact that they exist.

Kennedy Street commercial strip

Kennedy Street is a rare rowhouse corridor that’s still allowed to evolve with new structures, instead of being frozen in amber by overzealous historic preservation

I became a preservationist because I am pro-urbanism, and want to maintain the rich urban fabric of small-scale buildings, evolved over generations, that was common in pre-WW2 America. It is dispiriting to see that NIMBYs have hijacked the historic preservation process to stop that very process of urban evolution that created the places they claim to admire.

Instead of pouring all of its resources into finding more and more mediocre buildings to designate as “locally significant historic resources,” HPO should instead halt the process of reviewing outside nominations and focus its efforts on a comprehensive, District-wide survey of structures to identify those of high historic and aesthetic merit. Los Angeles has eight times the land area of DC and six times as many buildings, and completed a full survey of its structures within eight years. Meanwhile, DC HPO is now 40 years old, and has not completed a District-wide survey — ignoring many potential treasures in overlooked neighborhoods, while lavishing time and attention to ensure that no detail is overlooked for every single building in the District’s prosperous quarters.

Historic preservation also should not triumph over other aspects of the Office of Planning’s remit. The District has other planning priorities besides preservation, including creating affordable housing, allowing more people to live and work near transit and the regional core, and increasing renewable energy production. HPO and the HPRB must find ways to balance their own mandates with others’.

HQ2 search is still about talent, above all else

Last September, I pointed out that the Amazon HQ2 RFP was almost entirely about site readiness and talent. On the latter topic, one excellent resource was a 2017 report from commercial real estate broker CBRE that ranked metro areas based on “tech talent” — the number of people employed as “software developers and programmers; computer support, database and systems; technology and engineering related; and computer and information system managers.”

Not too surprisingly, eight of the top 10 from that particular ranking ended up as finalists for Amazon’s HQ2. The other two are Seattle (HQ1) and the Bay Area, which is currently Amazon’s second largest location.

cbre tech talent 1

Top 10 (minus SF) circled in blue; cities officially ruled out for talent reasons in red; shortlist cities with even smaller talent pools ruled out in blue. Source: BLS, via CBRE.

A single theme keeps showing up in the “thanks, but no thanks” feedback interviews. “Talent was the most important factor out of everything they looked at,” said Ed Loyd of Cincinnati. Charlotte’s “pool of tech talent is lacking compared to other markets.” “We weren’t good enough on the talent front,” said Sandy Baruah of Detroit. Amazon “really emphasized that they put a high weighting on talent,” says Mary Moran of Calgary. “Talent that could be hired immediately… ‘it was clear from the earliest stage of the RFP that it was the top priority,” says Tom Geddes of Baltimore. The feedback got more specific in one instance: “Prince George’s county doesn’t have a large enough pool of senior-level software engineers.”

Now that we know that Detroit and Baltimore don’t have enough local software engineers, who does? Helpfully, CBRE also looked specifically at the software engineer labor pool.

cbre tech talent 2

HQ2 candidates are in blue, Seattle and the Bay Area are in black, Detroit and Baltimore are shown in red. Click to enlarge.

There’s a substantial gulf between the top 10 and the latter 10, with Los Angeles having about 50% more local programmers than Denver. More importantly, if Detroit was rejected because they don’t have enough programmers, how can Philadelphia or Raleigh say otherwise? This puts the smaller labor markets on the shortlist at a steep disadvantage. Only Newark can make a case that it could pull commuters across the Hudson (though not for long).

Shallow talent pools also explain why “turnaround” sentiment wasn’t enough to save bids from Rust Belt cities. The only Midwestern cities that made the cut are either Sunbelt-era cities that happen to be north of the Ohio, like Columbus and Indianapolis, or the classic turnaround success stories of Chicago and Pittsburgh (even if both have deeper post-industrial legacies than the coastal cities).

A bit less confidently, recent large office leases in Boston and Manhattan are probably best thought of as consolation prizes, given that the locations chosen don’t have much in the way of expansion options. Leases being negotiated now would reflect planning work that was underway before the HQ2 search got going. [Update, 1 May: not alone on this reasoning.] Recent warehouse and data center leases or openings, of course, have zero bearing on future office locations.

The Boston move also has implications for cities 5-10 in the above chart, all of which have ~45,000 programmers. Quality of local talent is also important, and proximity to MIT gives Boston an edge over others in this group. If Boston and NYC are only worthy of consolation prizes, who’s left?

Hint: it’s also the metro where not just the number of programmers most closely matches that of Seattle’s, but their skill sets do, too.

Other thoughts:

  • Reporters are so desperate to write anything about this story that they’re making mountains out of molehills, especially given the paucity of public information. Don’t read too much into:
    • Paddy Power betting odds, which explicitly exclude the Americans who might know anything about the cities. I don’t see British newspapers breathlessly tracking every movement in how Vegas bookies view the English Premier League.
    • Hiring a lobbyist in Georgia. They have lobbyists in other states (e.g., two listed in Virginia, five in Kentucky, three in Tennessee).
  • Amazon really does seem to prefer working with single developers. Just one developer (COPT) has a four million square foot portfolio of Amazon data centers in NoVA.
  • The already-tight timing is now getting a little ridiculous. The decision will be announced sometime in 2018, presumably not in the next few months — but occupancy is still supposed to be in 2019? That essentially limits the search to existing buildings.
  • Given that fact, I’m going to give a Top Three that combine the right site, the right workforce, and the right time:
    • Arlington – Crystal City, the only move-in-ready location with access to as many programmers as Seattle has
      • Update, 25 Apr 2018: Others share this prediction
      • Update, 15 Sep 2018: Someone suddenly seems interested in Crystal City offices. As recently as January, JBGS filed plans to switch 670,000 sq ft of office capacity to 665 apartments. As recently as August, the CEO’s quarterly letter to shareholders promised a company-wide pivot from office to residential. Yet… In July, they retracted 1750 Crystal’s conversion, puzzlingly adding back 250,000 sq ft of office to a block with 551,000 sq ft empty. The result fits in neatly with a short, medium, and long-term occupancy strategy for HQ2.
    • Chicago – Old Post Office, the perfect building with great access and aggressive leadership but more iffy growth potential
    • Dallas – Union Station, although the buildings require considerable work. (Not that Amazon’s RFP mentions this topic, but: right-wingers love to harp on Chicago’s fiscal woes even though Dallas isn’t far behind.)
  • Expanding to a Top Five adds:
    • Toronto, great workforce but no new buildings opening until 2020, and not enough adjacent space
    • Atlanta, the AT&T and BofA towers have vacancies between downtown and Tech Square, but land/building ownership is fragmented; also concerns over “cultural fit”

Idle speculation: podium apartments, floating above a parking lot

Podium construction: if it's good enough for these guys, it's good enough for you

As of 2015, the IBC now permits multi-story concrete podiums. At first, this was mostly of interest because it permitted even taller “double podium” apartment buildings, with up to eight stories framed mostly in wood.

This diagram (by Nadel, Inc. for Multifamily Executive) shows the effect between The Podium and The (Double) Podium: you can squeeze an additional floor in above grade, and because it’s concrete (heavy line) it can be used for residential, retail, or parking.

Yet using that magical concrete-framed second floor for residential (which could just as easily be wood-framed) seems like a bit of a missed opportunity. Instead, the second floor could be a mezzanine parking level for the wood-framed residential above — as was done in the mixed-use Grey House at River Oaks District pictured above, or in this mixed-use development on LA’s Olympic Blvd.

The real breakthrough possibility for the parking mezzanine isn’t atop retail, though: it’s atop yet more parking.

It just so happens that a 65-75′ wide module fits either a double-loaded apartment building or a double-loaded parking aisle. Therefore, a four-story building (three floors of Type V residential, one level of parking) can be stacked atop an existing aisle of parking — without diminishing the existing parking lot, and without excavating any parking.

It’s the suburban infill version of “have your cake and eat it, too”: keep your parking and add infill housing, too.

3 over 2

Developing these air-rights infill parcels used to require some pretty tremendous trade-offs. The first such projects that I saw were designed by Gary Reddick, a Portland architect who won a CNU Charter Award in 2004 for two such projects. Jury chair Ellen Dunham-Jones subsequently wrote about these in HDM:

In Seattle and Portland, where there are very good markets for residential development, Sienna convinced a variety of non-residential building owners to sell the air rights over their parking lots or roofs for housing. In Portland’s desirable and compact Northwest neighborhood, Sienna saw the parking lot of a specialized medical center as a potential housing site. After producing a pro forma, the firm approached the owners and showed that it could provide them with a covered, forty-three-space parking lot (with only three fewer spaces than before) and a million-dollar profit in exchange for stacking an additional layer of parking (with a separate entry) and two stories of condominiums. The built project, Northrup Commons, screens the parking with duplexes entered from the streets and adds two floors of apartments.

This turns out to be tough to replicate elsewhere. Because the residential comes with its own parking requirement, fully replacing the on-site parking requires adding parking somewhere else — either building a new parking lot elsewhere, or digging underground, at super-high cost ($11 million at one Seattle project). Most of the Sienna projects, including Northrup, used sloping sites (common in the Northwest) to tuck one parking level partially or fully underground.

tyson

Since the resulting buildings would block visibility and doesn’t result in an active ground-floor frontage, this particular infill seems best for infilling around Class B offices that currently sit adrift in a moat of parking — such as the above complex on Old Courthouse Road, at the southern fringe of Tysons Corner (image from Bing Maps). Or, many properties along this stretch of the infamous Executive Boulevard near White Flint (image from Google Earth):

exec

* A rough assumption here is that each 1,000 sq. ft. apartment would have one parking space, which works out to about 3:1 residential:parking floor space. The ratio seems to work for the Houston example, which promises its residents the ability to park in-building rather than having to venture outdoors. Sufficient parking for rich Houstonians is probably enough for anyone.