Southern California Development Forum brings value through educational, networking and philanthropic events around current developments in the A/E/C world. Read all about our recent events here.
Kicking off the new year, SCDF hosted a panel focused on a widely-discussed topic – the state of the local economy. More specifically, members of our community have been concerned with how the factors at play internationally, will affect our local industry. Architects, general contractors, engineers and more, all joined us last week for a full house of development community professionals eager for a variety of opinions regarding the 2020 economic outlook. This particular panel differed from others in that it was smaller, and did not have any members of our community speaking. Instead, we opted for a localized view from expert sources. Joining our panel discussion was Dr. Monica Morlacco, assistant professor of economics at University of Southern California, as well as Eric Hayes, associate economist at Los Angeles Economic Development Corporation’s Institute for Applied Economics. Both panelists presented the audience with different ways global impacts translate into local effects.
Global Forces at Work in the United States
Among the key points made by Dr. Morlacco was that big, multinational business is only getting bigger, and this has many different side effects. Unfortunately, the majority of these effects are not so great for the average consumer or worker. Morlacco pointed out that since 1980, there has been a steady increase in the average markup – which is the amount companies typically charge over and above their costs, to sell their goods at retail. This is largely the case for U.S.-based corporations, where the average markup now hovers around 61 percent, compared to 21 percent in 1980. Since 1980, much of the increase in markups has come from large firms. Their growing influence and increase in size is concurrent with the diminishing power of antitrust laws in the United States, as well as the increased costs of simply doing business. Logistics, litigation, and administrative costs have seen substantial cost increases which may not be as easily absorbed by smaller firms. However, it is important to note the other cultural and geographic factors which play a role.
Technology, which has disrupted almost everything to some degree, has skewed consumer preferences toward big business as well. The effects of e-commerce and online networks tend to keep customers locked in to a specific platform or brand. A tendency for consumers to remain brand-loyal and static in their choices can translate into difficulties entering the business marketplace. This metric is referred to as turnover, or the rate at which new businesses establish entry, and conversely, old businesses exit the marketplace. Dr. Morlacco also highlighted the fact that there has been a broad decrease in turnover and a broad increase in concentration across most industries in the United States.
In addition to technology, the largest corporations are also able to establish global value chains in order to optimize business functions, and these large conglomerates quite simply have the resources to do so. These global value chains are best defined as a network of production, trade, and investments where different stages the product cycle span multiple countries. A great example of this would be shoes and apparel. The product may be designed in the United States, materials sourced in South America, manufactured in Asia, and then distributed worldwide. Many everyday consumer goods are likely the product of a global value chain.
Effects on Our Local Economy
In light of the recent trade wars, residents of Southern California are forecasted to see an increase in consumer prices across most product types – this includes housing. However, the most pertinent information to our region has to do with shifting demographics and unemployment rate. Currently, our state, and the nation, have unemployment rate of 3.7 and 3.9 percent, respectively. The national unemployment rate is the lowest it has been in over 50 years. However, all economic cycles are subject to disruption, and for California, our population may be a deciding factor. What may surprise many of us in Southern California, is the fact that our population has actually been decreasing this past year. For a continually robust economy, a steady population growth is required as it is an essential component of a strong labor force. Not only has Southern California, particularly Los Angeles, been losing residents to outward migration, but the birth rate has also dropped. Birth rate is an important metric to economists as it is an indicator of the future working population who will not only spur additional economic growth, but pay into social service programs.
A more peripheral effect of the birth rate might be the tendency for parents to become homeowners, an increasingly inaccessible milestone for Southern California families. To put this into perspective, the minimum qualifying income for a home in Los Angeles County is $127,200. The median household income in Los Angeles County is $68,093 – which is vastly less than what is required to own a home. This leaves the average renter spending approximately $31,000 in rent annually. Still, low rates of homeownership in Los Angeles are also attributed to other outside factors, such as a scarcity of housing permits issued by local governments.
Despite all of this, California is likely to continue on a path of moderate, but sustained growth throughout the year. Venture capital investments to large tech and media companies that call our state home will prevail. Lastly, the tendency for our state to be an incubator for innovative ideas and a pool for great talent will likely keep the California afloat throughout the year and many more to come.
Southern California Development Forum capped off 2019 with an exceptional awards luncheon where we recognized some of the greatest local achievements in the areas of design and philanthropy. This was truly the icing on the cake for a wonderful 2019, and leaves us excited for what’s to come in 2020. SCDF prides itself in bringing members of the development community together, while also honoring local charities who do their best to make Southern California an even better place to live. From architects to developers to business executives, and more, our events serve as a way to connect passionate and visionary individuals to one another.
This year’s 2019 Design & Philanthropy Awards were held at a local landmark, the beautiful and historic California Club in downtown Los Angeles. While many development projects took home awards, we also recognized two philanthropies, School on Wheels, and Students4Students. Both philanthropic organizations are dedicated to fighting homelessness across Southern California. SCDF awarded each organization with a $22,500 check to aid in the furthering of their charitable missions. We also recognized Father Greg Boyle, founder of Homeboy Industries, as this year’s winner of the William Feathers Award of Distinction.
School on Wheels
Schools on Wheels is a nonprofit, 501(c)(3) organization founded by a retired schoolteacher who witnessed firsthand the unique challenges faced by homeless students. At the time of it’s founding, up until current day, Schools on Wheels is the only organization in Southern California dedicated exclusively to the educational needs of this marginalized population. The driving force behind Schools on Wheels’ are the volunteer tutors who come from all backgrounds and professions. The common goal of all tutors is to reach out to a child, to teach, mentor, or otherwise assist in their educational life. The services provided by volunteers is intended to enhance educational opportunities for children from kindergarten through twelfth grade.
Students 4 Students, also a nonprofit, 501(c)(3) serves a similar cause, but for college students. This organization is devoted to the establishment and promotion of collaborative shelters for college students. Each shelter is also run by college students who wish to support their peers that might be experiencing homelessness. The model is also shared with institutions of higher learning, student groups, and faith-based organizations who want to participate in the cause. The program aims to empower student volunteers to become the next generation of philanthropists and community service leaders. For those receiving services, the goal of the program is to assist homeless students in determining their own path by way of their ambition and education, rather than their unfortunate circumstances.
Homeboy Industries – William Feathers Award of Distinction
Homeboy Industries is the largest gang intervention, rehabilitation, and re-entry program in the world. Father Boyle formed Homeboy after witnessing the ravaging effects of gang violence and mass incarceration while serving at Dolores Mission Church in Boyle Heights during the late 1980’s and early 1990’s, the peak of Los Angeles gang activity. Father Boyle began implementing what would later come to be known as Homeboy Industries in 1988. Through this organization, he oversees the employment, training and social services for former gang members as they reintegrate into society. Father Boyle has authored a 2010 New York Times bestseller, “Tattoos on the Heart: The Power of Boundless Compassion. He also published a second book in 2017, “Barking to the Choir: The Power of Radical Kinship.” In addition, Boyle has received the California Peace Prize and has been inducted into the California Hall of Fame.
And last but not least, we also recognized a number of stunning projects which serve as exemplary models of design across Southern California. See the full list of winning projects and their categories below.
2019 Project Winners
Adaptive Reuse / Renovation / Preservation
1. RADAR, Inc. for Libros Schmibros Lending Library (Honor)
2. KFA Architecture for Los Angeles LGBT Center, Anita May Rosenstein Campus (Merit)
Commercial Mixed Use
1. RCH Studios for FLIGHT at Tustin (Honor)
2. Gensler/AECOM Hunt for LAFC Performance Center (Merit)
1. CO Architects for Cal Poly Pomona Student Services Building (Honor)
1. Belzberg Architects for USC Shoah Foundation, The Institute for Visual History and Education Global Headquarters (Merit)
2. Rottet Studio, LLC for Paradigm Talent Agency (Honor)
1. KFA Architecture for Blue Hibiscus (Merit)
2. KFA Architecture for Pico Eleven (Honor)
Single Family Residence
1. Clive Wilkinson Architects for West Los Angeles Residence (Honor)
2. Assembledge+ for Laurel Hills House (Merit)
1. Structural Focus for May Company Façade Rehabilitation, Academy of Motion Pictures (Merit)
2. C.W. Driver and Integral Group for Cal Poly Pomona Student Services Building (Merit)
1. Lehrer Architects LA for Los Angeles – Glendale Water Reclamation Facility (Merit)
2. HDR, Inc. for West Los Angeles District Power Year (Merit)
3. Moore Rubell Yudell and HED for Santa Monica High School Discovery Building (Merit)
4. HDR, Inc. for Orange County Sanitation District Headquarters Complex (Honor)
1. Wolcott Architecture for Von Karman Creative Campus (Merit)
It is no secret that the retail sector has undergone significant changes in the last decade, with no end in sight. As e-commerce becomes increasingly sophisticated, more consumers opt for shopping online and having the goods delivered to their home. As a result, restaurants will continue to move toward out-of-the-box experiences becoming part of people’s lifestyles. Our November panel discussed how this new focus on food and dining experiences is changing the face of retail across Southern California.
Our panel was moderated by Rachael Zanetos, Leasing Director of Mixed-Use Retail at Brookfield Properties retail group. Rachael’s 15 years of commercial real estate experience give her a comprehensive understanding of the Los Angeles market. Currently, she is responsible for overseeing notable downtown projects such as FIGat7th, Halo at Wells Fargo Center, and California Market Center. Rachael led a panel of three additional speakers, all in various roles within the restaurant and design industries. Panelists included: Mike Simms, founder of Simmzy’s and Tin Roof Bistro; Ziba Ghassemi, Vice President of Design - Airports at Unibail-Rodamco-Westfield, a global developer focused on making positive contributions to users and communities; and Sam Polk, co-founder and CEO of Everytable, a fresh-prepared food concept aimed at making healthy food affordable for everyone. All panelists came from different arenas of the restaurant and retail sectors, but many overlapping similarities were found in a topic that seems to unite everyone – food and dining.
What is Your Most Impactful Meal?
As each panelist introduced themselves, moderator Rachael Zanetos asked the icebreaker question “what was your most impactful meal?” Each panelist had completely different responses, but they all shared a common thread. The most impactful meal for each panelist had not only to do with an exceptional food choice, but also with the location. Panelists noted the city, restaurant space, setting and even ritual as characteristics that made their choice stand out as their most recent impactful meal. This common denominator of what makes a meal impactful was the core of the panel discussion. As retailers are turning to food to fill spaces, there is more competition than ever. Each restaurant must have a unique concept and sense of place in order to deliver a multisensory experience to remain competitive and keep customers coming back. Now more than ever, food is just a starting point. Making a meal or a dining experience truly impactful requires exceptional design, a welcoming location, and for multi-venue concepts, a robust supply chain that can replicate dishes consistently.
What Drives Consumer Demand?
Panelists noted that food culture has become more relevant than ever. The advent of social media with consumers photographing and sharing their food and restaurant experiences has not only created traffic and demand, but also shifted trends. Simms noted that his team now considers social media when making decisions about lighting design and table settings. Design is noted as a key factor in what will drive a consumer to go from a first-time visitor to a repeat customer. Beyond design or marketing strategies, panelists all seemed to share the sentiment that the most important factor in determining long-term success is to know your customer. This will take some research to not only identify who your customer is, but also their preferences and how to target them. Understanding demographics to this degree is important not only for restaurants in the mixed-use retail environment of today’s economy, but in any business across all industries. Certain “homegrown” restaurant concepts may be established with the local preferences in mind and have a keener sense of who their customer is. Once the correct customer profile has been identified, creating a sense of place is the next most important strategy in a successful restaurant concept within a mixed-use setting.
Strategizing design and curation of a restaurant concept must take into consideration the location and what the customer will be doing there. For example, in an airport, where food offerings are becoming more sophisticated, customers still want to be able to maintain contact with their gate. This requires open spaces, clear lines of sight, and the infrastructure to produce fresh, high quality meals that can be eaten on location or on the go. Other restaurant concepts might be more dependent on the leisure aspect of dining or an adjacency to a destination like the beach. The customer’s route should be taken into consideration when choosing a site, for example a location on a street that runs from parking areas to the beach ensures higher visibility via foot traffic. Despite the tendency for today’s consumers to be digitally connected, prime real estate is still heavily influenced by pedestrian foot traffic.
With new restaurant concepts becoming an ever more important part of our culture, there is a push on owners to be authentic and experiential. The potential of a restaurant lies largely in the ability to get customers to come in and to come back – that characteristic has not changed. What has changed is that great food and exceptional customer service are really just the first step into having a successful restaurant in today’s market of imaginative concepts.
During SCDF’s October breakfast panel event, we explored the connection between college sports facilities, the success of sports programs, and the overall image of the university as it relates to these concepts. Moderated by Chris Nations, president of the Nations Group, our panel consisted of five different collegiate sports professionals, all of which provided a different perspective from the usual panel made up of development and design professionals.
Speakers on our panel included: Paula Smith, director of intercollegiate athletics at University of California, Irvine; Craig Pintens, athletic director at Loyola Marymount University; Rich Mylin, director of recreation at University of California, San Diego; Andy Fee, athletic director at Long Beach State University; and Dr. Lindy Fenex, director of recreation at University of California, Riverside. The panel discussed various strategies and tactics for sport & fitness-related complexes, as well as challenges associated with not only developing these new facilities – but also with funding them. A common theme throughout the discussion was the sense of pride that athletics and their corresponding facilities create for students and alumni, as well as the manner in which athletics are a critical financial driver for universities.
Health and Wellness
Another common theme across all panelists was the versatility in their positions, almost all of them had worked at a number of different universities across the nation. Regardless of where each panelist had worked, whether past of present, they all noted the push for health and wellness-focused common areas across each and every campus. While athletics are a primary driver of the campus, athletic directors are also seeing an increase in demand from all students for health and wellness-related amenities. This is in addition to the facilities used for university spectator sports. Multiple panelists cited the demand for students of all types – not just student athletes – to have robust access to gyms and exercise equipment. Many students are seeing this as a requirement of their student housing hall, instead of utilizing a more centrally-located student gym. The old model for university gyms is changing to embrace both physical and mental wellbeing of their student body. Nap pods, massage chairs and other amenities are also finding their way into what panelists referred to as “rejuvenation spaces.” Most students – athletes or not – are coming to campus with much greater expectations for robust amenities in all spaces throughout the campus. Items such as nap pods and massage chairs are finding their way not only into recreation centers and gyms, but into more mainstream and highly trafficked areas of today’s college campus.
Mental health-related amenities are an additional item which panelists noted as having been on the wish list of students. Quiet spaces for yoga, meditation and counseling are among the biggest drivers. In order to maximize space and profitability, many of these quiet spaces reserved for mental health and relaxation uses are also intended to be multipurpose spaces. Mental health-driven amenities are not seen as desirable by today’s student population, but expected and necessary, in today’s climate of increased awareness on this topic. These program elements along with common public meeting spaces promote inclusivity, accessibility and comradery for students and athletes alike. While these spaces are essential, it is not always cost effective to devote an entire space to such a use. Today’s trend could very well be obsolete in a decade, so flexibility of uses in these spaces becomes the key factor. All panelists agreed, that regardless of whether the space is driven by a rejuvenation, mental health, or recreational use, we are more likely to see smaller spaces that are easily adaptable to suit multiple needs.
The Showpiece of the University
Athletic venues say a lot about a campus, something we can all agree on. While sports facilities are a source of pride for students and alumni, they are also a great source of pride for the surrounding community. When sports events are not taking place, these facilities create new revenue streams, serving as venues for local high school graduations, concerts, eSports tournaments, community events and more. Multiple panelists agreed with the statement that an exceptionally designed college sports facility is the showpiece of the entire campus. Another way these venues function as a “showpiece” is in the area of fundraising. Students, alumni, and other donors want to feel their dollars are well spent. Academic prestige will always remain important, but a sports venue is more external facing to the outside world. These venues are often the face of the university, the gathering place for generations of students to share a common ground.
Athletic facilities come in two forms, which is the competition venue, and then the combined form, which includes the competition venue paired with the training and recreation aspect of the building. Internally-facing training areas are all about recruitment and retention of athletes in addition to performance. Student-athletes and coaches“live” in these facilities. Athletes and their parents have an expectation that universities will offer the best in training and care to help their children reach success beyond school as athletes or leaders in society beyond sport. These spaces must demonstrate that, from branding and amenities to nutrition and performance technology. Experiential spaces in these training complexes facilitate collaboration and socialization with other student-athletes. Many of these facilities include social areas for mingling with peers, building strong bonds between players that result in mental wellbeing, teamwork, and on-court success.
This focus on experiential design in competition and performance venues, while a benefit for the student, has additional reach to the alumni and community users. Flexible, open spaces with comfortable seating and TVs are in demand by students but can be adapted on game-day. This was noted as being especially important in the area of donors, because it is emblematic of the hospitality and camaraderie spaces that these VIP alumni expect as part of their event experience. Athletic entertainment is a crowded marketplace. The concept of a “pre-function” event space is becoming more popular, as it adds to the experiential quality of the facility. Experiential elements are gaining traction across all property types, college sports facilities are no exception. From big stadiums to small venues, experiential design has an effect on college sports, and in turn the potential finances generated.
September’s breakfast panel event hosted by SCDF was on the topic of an iconic natural feature of Southern California, our beloved waterfront. The conversation was thought provoking as it involved development industry leaders, each with unique waterfront development projects currently underway. SCDF President, Ann McLennan kicked off the discussion by introducing moderator David Waite, partner at Cox Castle Nicholson, LLP. As a land use and environmental lawyer with over 25 years of experience, Waite was able to seamlessly navigate the conversation with his knowledge of legislation such as the California Environmental Quality Act (CEQA) and his role as former president of the Los Angeles Chapter of the Urban Land Institute.
“The Coast is Never Saved, it’s Always Being Saved”
In an environmentally-conscious state like California, one important distinction of this panel, is the fact that all panelists see themselves as stewards. Members of the development community are often face stringent environmental regulations as they further the progress, or even at the inception of their projects. Members of this panel are noted for balancing perseveration and responsible development with exceptional coastal access that is rich and unique for all Californians to enjoy. The precious coastline in California is publicly accessible to all citizens, with no private ownership under current law. Waite led the conversation by introducing the three panelists: Jenny Krusoe, founding executive director of AltaSea; Ryan Altoon, executive vice president of AndersonPacific, LLC; and Yehudi “Gaf” Gaffen, CEO of Protea Waterfront Development.
AltaSea at The Port of Los Angeles
Jenny Krusoe introduced the audience to her latest development project, a 35-acre property at the Port of Los Angeles. Here, AltaSea is creating an urban, ocean-based campus where innovators from multiple fields can collaborate on furthering AltaSea’s mission – which Krusoe simply stated is people. By “people,” Kruose went on to elaborate that AltaSea’s goal is the acceleration of marine-related scientific research and job creation in the blue economy for the next generations. The blue economy is a term used to describe the economic activity that falls under the sustainable use of ocean resources for economic growth while maintaining or improving the overall health of oceanic ecosystems. In the bigger picture, AltaSea is focused on the creation of solutions to the planet’s most pressing challenges such as food security, ocean exploration, and energy.
Currently, AltaSea has a 50-year agreement with the Port to develop and operate their campus on the man-made peninsula that was formerly utilized for Panama Canal cargo in 1914. The development is also the site of a World War I-era submarine base, and is located in a historic neighborhood. The future Phase 2 of project, is to further the identity of the campus as a center of innovation. This will largely be driven by the Southern California Marine Institute, which will host 23 university organizations for research and the discovery of solutions to environmental problems.
Shoreline Gateway in Long Beach, California
Ryan Altoon, executive vice president of AndersonPacific, LLC introduced one of his latest projects, which is located in the booming city of Long Beach. The coastal city of approximately half a million residents has experienced a resurgence in recent years. As of 2018, there was more than $5 billion in both public and private development, the full figures from 2019 are expected to be comparable, or even higher. The project, is part of the Shoreline Gateway Master Plan and is a 35-story, 315 unit high-rise residential tower which will ultimately serve as the eastern gateway into Downtown Long Beach. Altoon noted that the tower’s strategic location, on the inland side of Ocean Boulevard, made for an easier approval process when dealing with the California Coastal Commission, one of the state’s most powerful regulatory groups.
The residential towers will provide unobstructed views of the ocean, as well as the city. Ground floor retail will be accompanied by a lobby with community-focused amenities, in an effort to design for both residents and non-residents alike. The development will also incorporate a public space with the addition of a new 25,000 square foot urban plaza positioned between the two towers. This space will incorporate a 1% Arts component by artist team McCarren/Fine. Shoreline Gateway is on track to be the first LEED-ND project in the City of Long Beach.
SeaPort San Diego
A great example of waterfront development is seen in our neighbor to the south, San Diego. Our panelist, Yehudi “Gaf” Gaffen, CEO of Protea Waterfront Development is originally from Cape Town, South Africa, and has worked specifically in waterfront development for the majority of his career. In his latest project, which is scheduled to break ground in 2024, public spaces, nature, and ecology will all be combined into one venue to serve as an iconic landmark for the San Diego waterfront. When complete, over 70% of SeaPort San Diego will be composed of parks, urban open space, promenades, pedestrian walkways and other public spaces for people to gather.
The design also features a tower, reminiscent of the Space Needle in Seattle. This iconic tower will feature multiple layers of retail, lodging, dining as well as SeaPort San Diego’s lifelong learning center. This center will house educational workshops focused on marine sciences, maritime logistics, as well as music. Both University of California, San Diego and the Scripps Institution of Oceanography have contributed to the development of plans for the learning center.
A Common Theme
While all projects are unique in their own regard, they all have one thing in common – public access. In keeping with the tradition of California, all waterfront developments are at their core, public spaces for community members to gather. These new developments will perpetuate the ideal that the coast is for everyone, for many generations to come.
For the month of August, SCDF hosted a panel event focused on a niche concept, seemingly losing its exclusivity – boutique hotels. The discussion was led by some of the industry’s leaders, all of whom work in various executive positions of the hospitality development sector. The event itself was heavily attended by hospitality development professionals from all sectors. The panel was moderated by Bruce Baltin, managing director, CBRE Hotels Advisory. Baltin has experience across the hospitality and tourism industries including market demand studies, valuations, leases, franchising and more. The breadth of his experience encompasses properties located in large resorts, restaurants, theme parks, and national and state parks.
Panelists included: Ryan Bean, director of development for Sydell Group, a creator and manager of unique hotels with a special connection to their location and design. Bean’s portfolio includes NoMad, The LINE, Freehand and the Saguaros. Prior to Sydell Group, he spent five years as director of development for New Urban West, a residential and mixed-use urban infill builder. Amie Marben, director of development, Relevant Group, also joined the panel. Amie brings over 15 years of experience in hospitality design and development to Relevant Group’s development and construction teams. Some of Relevant Group’s most notable area projects include, Dream Hollywood, Thompson Hollywood, and Hotel Barclay. Margaux Rotter, also VP of development at BLVD Hospitality joined the panel. Rotter’s experience in hospitality development began while working on the construction team at ACE Hotel in downtown Los Angeles. Other projects by BLVD include: Soho Warehouse, Hoxton Hotel, and CitizenM.
Ryan Bean began the conversation by stating that “we aren’t necessarily seeing boutique hotels becoming mainstream, but they are becoming more popular.” The rise of technology and social media has created a significantly more accessibility to information about places, things and concepts that were once considered niche or had some air of exclusivity, boutique hotels are just one example. Bean notes that when the boutique concept began in the 1980’s, it was largely unknown to the everyday traveler. Now, guests are more discerning in general and that is simply the way the market has gone, again, boutique hotels are just one of many examples of this trend. Boutique brands have become so popular, they are even popping up in some secondary, suburban markets. However, this doesn’t mean that the boutique concept is necessarily allowed to become “less boutique” in the midst of greater demand. Amie Marben notes that while the demand has grown, the challenge for developers and designers has shifted slightly. “A lot of what we do now involves how you keep that exclusivity and intrigue for the guest,” she said. All panelists agreed that while maintaining intrigue was a key concept related to keeping boutique hotels true to their form, a lot of this has to do with the placement of the hotel. Location is paramount in attracting the target market.
Location and Form
All panelists agreed that while boutique brands are popping up everywhere in terms of the type of submarket, a true boutique hotel tends to be urban. “We generally see these in more hip, or up-and-coming areas where our target market is likely to congregate,” said Margaux Rotter. The target market tends to be those who are design conscious and fashion forward. She went on to elaborate that the location is also important in giving guests a sense of locality. The boutique hotel guest tends to be a bit more discerning and will want to experience an authentic slice of the city in which they are staying. Local design, nature, shops, and restaurants all play heavily into the site selection and guest experience of a boutique hotel. As for the design, all panelists agreed that a key characteristic is that it “has a story to tell, it has a soul.”
A lot of this “story and soul” is directly attributed to the aesthetics of the establishment. Generally, the guest rooms vary in their look, they are not uniform. Also, common areas tend to either be exquisite in design, or not exist at all. Boutique hotels with minimal to no common areas and limited amenities have come to be known as “select brands” and they cater more to crowds who intend on spending very little time in their hotel rooms. Other types of boutique brands include “soft brands,” which are essentially boutique hotels under the name of a chain. Soft brands can give some consumers the sense of security and familiarity of staying at a well-known and credible chain. However, the soft brands tend to be more individualistic, which is a direct result of their ability to be more liberal and unique with design standards. The design principles of boutique hotels have also caught on to traditional (not soft branded) chain hotel establishments, as they are increasingly open to considering design shifts. Although, soft brands, in a way, provide a certain consumer with the feeling they are getting “the best of both worlds.” Still, the chain establishments will inevitably have their corporate image and standards to maintain, part of what sets them so far apart from the boutique brands they have been competing with. With a rise in boutique hotels happening everywhere, even within chain hotels, we may see the whole industry shift, at least from a design standard.
On Thursday, July 18, leaders in the Southern California real estate industry gathered to mix and mingle at our 2019 Annual Night Under the Stars Cocktail Mixer. We enjoyed stunning views from the packed and lively rooftop terrace of the California Club, overlooking the soft lights of downtown Los Angeles, against a backdrop of a Southern California sunset.
In keeping with the tradition of our summer cocktail mixer, SCDF was proud to announce the 2019 Philanthropic Award recipients. The two philanthropies recognized were Students 4 Students and Schools on Wheels. Students 4 Students is a unique organization as it is a student-operated charity, hosted by a church. We were joined by Reverend Eric C. Shafer and his wife, Kris Shafer of Mt. Olive Lutheran Church in Santa Monica. The church provides the facilities needed to host the Students 4 Students program.
Both organizations serve charitable causes related to homeless students and education in the greater Los Angeles area. Representing Schools on Wheels, was Charles Evans, the organization’s chief regional officer. As a native of South Los Angeles, Charles is familiar with the obstacles faced by students, and how to overcome them.
SCDF feels privileged to be able to grant both organizations our 2019 Philanthropic Award.
“We feel it is especially important to highlight these causes which Schools on Wheels and Students 4 Students have devoted themselves to, said SCDF President, Ann McLennan. “Our industries have a unique opportunity to collaborate with organizations fighting homelessness.”
We will be honoring the 2019 Philanthropic Award recipients at the Annual Design & Philanthropy Awards, which will also be hosted at the California Club in downtown Los Angeles in December 2019.
This month’s discussion was led by six female panelists – an impressive number for the development industry, which is often characterized, perhaps rightfully so, as being male-dominated. Our event was a complete success with both individual and sponsor tickets completely sold out. The City Club was packed with people who gathered around to hear what is at the forefront of higher education design. The panel was moderated by Catherine Kniazewycz, campus architect and director of design and construction at California State University, Northridge. She brings a breadth of experience in higher education design as she has also served in similar roles at UC Merced and UC Berkeley.
Panelists included: Elvyra (Vi) San Juan, assistant vice chancellor at the CSU Chancellor’s Office; Julie Hendricks, director of design and construction services and campus architect at UC Santa Barbara; Crista D. Copp, Ed.D., director of educational technology services and support at Loyola Marymount University; Anne Eisele, director of projects and energy management at Pomona College; and Monica Amalfitano, associate director and campus engineer at Cal State Long Beach. With so many changes, both taking place, and looming in the horizon, each panelist had unique ideas about what the future of higher education facilities might look like.
Campuses in Transition
Kniazewycz began the discussion by mentioning that many campuses are changing to reflect a shift in student demand. Hendricks, who works at and earned her bachelor’s degree from UCSB noted that the campus has undergone an evolution into a research institution. This is especially notable since UCSB was originally a liberal arts school. Transforming from a liberal arts-oriented campus to a research institute doesn’t happen overnight, but it also doesn’t happen without considerable renovations. For example, UCSB is in the process of construction on its first classroom building in 50 years. The campus is also undergoing a seismic assessment, looking at earthquake maintenance and seismic retrogrades in anticipation of future disasters.
Elvyra San Juan, who brings perspective from a multitude of campuses, notes that many universities are looking into several renovations and new additions – for various reasons. With a role that oversees capital, planning, and construction, San Juan noted that the CSU system is increasingly engaging in public-private partnerships to accommodate new construction for approximately 450,000 students across 23 campuses. With so many renovations happening at various schools, Crista Copp of Loyola Marymount University, poses the question of just how we will teach in these new spaces. This question rings true for Pomona College as well, who Anne Eisele said also has a student population which is very interested in STEM fields, but attends a campus which was intended to teach liberal arts.
Rethinking Learning Spaces
One common ground that all panelists seemed to find was that in order to educate for the unknown jobs of the future, one thing that needed to be done was to rethink the spaces they are taught in. Monica Amalfitano added that rethinking spaces is clearly a priority, but it is probably secondary to building structures that will last for the next 60 to 70 years. As for the space itself, the concept of an “active learning space” is something which resonated with each panelist. An active learning space is not always what we would think of as a typical classroom. Instead, these spaces are flexible for many different types of learning. Some of their characteristics include: furniture which is easily rearranged, multiple screens, and the ability for professors change the focal point of the room. Instruction within these active learning spaces can be turned in multiple different ways. These spaces will also include non-traditional seating such as hi-tops, couches and pods.
Crista Copp gave the audience a breakdown of LMU’s active learning spaces, explaining that at the campus, which has an average class size of about 20 students and 250 different learning spaces. Of the 250, 100 of those are general purpose classrooms, out of that only 7 are currently in the active learning space category. She added that LMU’s strength was actually within a different concept called makerspace. This style of learning area, sometimes also referred to as a “hackerspace” is different from an active learning space in that it contains the tools and resources required to make specific projects. At LMU, makerspaces are separate for each distinct college, but they are developing one that is going to be available for use by all colleges. Copp points out that campus wide makerspaces have failed as they were not closely related enough to the classroom material. In her experience, these spaces are most successful is when they are very directly connected to what is going on inside the classroom.
Makerspaces are creeping into campus libraries, which are increasing getting rid of books, as their purpose is dwindling. Monica Amalfitano pointed out that Cal State Long Beach has a great makerspace which has been highly effective, but is also filling a VR space where students from any college can work. In the Long Beach example, Amalfitano’s experience differed from Copp’s in that their makerspace proved to be the most collaborative for students between all colleges and the faculty is seeing students from all colleges collaborating on projects.
Collaboration and Flexibility are the Key
Despite some differences between campuses, two things seem to be the common denominator when designing for the future of higher education – collaboration and flexibility. In order to successfully plan for students and careers of the future, designers will need to prioritize spaces with accommodate multiple learning styles and facilitate collaboration, as well as creativity. These concepts be applied to any campus, regardless of size or student population.
Our May breakfast panel on the topic of aviation was extremely well attended with approximately 170 guests who arrived bright and early for the event. The discussion tackled how airports are becoming more experiential and customer-service-centric spaces rather than strictly operational and functioning solely as transportation hubs. The panel was moderated by George Makrinos, AIA, AC Martin, who has 14 years of aviation design experience. Panelists included: Barbara Yamamoto, Chief Experience Officer of Los Angeles World Airports, the governing body for Los Angeles area airports; Katherine Goudreau, Managing Director of Facilities at American Airlines; and Kirk Demers, Airport Manager, Virgin Australia. All panelists come from different avenues of the aviation industry which are especially tailored to the customer experience aspect of traveling.
Moderator George Makrinos opened the panel with astonishing statistics highlighting the fact that aviation is experiencing a period of unprecedented growth. In this time of rapid expansion throughout the aviation sector, an estimated $1.5 trillion is needed for renovations and new construction in order to meet the demands of flying customers. Makrinos referenced 12 million passengers in the air daily on an estimated 128,000 flights. LAX, the world’s fourth busiest airport, saw 87.5 million passengers passing through their gates last year. Makrinos also pointed out that while highly utilized, LAX is currently planning up to 30 new gates at terminals 0 and 9, which is new construction of interest to many audience members.
LA Exceptional Experience Initiative
Barbara Yamamoto pointed out that while new construction is important, the guest experience is not forgotten in the face of facilities expansion. Yamamoto cited the currently underway “LAXceptional Xperience” initiative driven by Los Angeles World Airports.
“Airports receive special attention and more scrutiny under programs like this,” said Yamamoto. “This is because we are often the first and last impression a traveler will have on the entire city of Los Angeles.”
Los Angeles World Airports (LAWA) is very passionate and driven by the guest experience and looks to elevate LAX to a higher global standard in order to parallel the more sophisticated and highly-amenitized airports of Asia and Europe.
“Airports have gone from being just a facility to an entire experience, it is a huge culture shift into more of a hospitality mentality,” Yamamoto continued.
Katherine Goudreau agreed with the sentiment that experience is now extremely crucial to airport travel, but added that this does in fact extend all the way to the facility itself. Goudreau noted that LAX is American Airlines’ west coast hub and serves as the gateway to Asia for the airline. Among the goals for LAX at American Airlines is to bring their terminal into the 21st century. Of course, this is the goal for the rest of the airport as well, but Goudreau noted the importance of doing so across all levels of the facility, including employee areas. LAX employs approximately 50,000 people who cater to the needs of an exponentially larger number of passengers. Goudreau pointed out her belief in a strategy which addresses the needs of this smaller, employee population, whose wellbeing facilitates airport operations and customer satisfaction.
“At American Airlines, we have adopted a mentality that if employees are treated well, they will treat the passengers well,” Goudreau said.
Goudreau also noted the importance of thinking about TSA checkpoints differently and taking logistics and emerging technology into consideration. She noted AA’s research and development initiatives focused on creating easier and more pleasant experience through security lines, while providing additional space at checkpoints.
Tech and Other Facility Concerns
Kirk Demers also highlighted the importance of facility improvements on the airside due to the need to park planes and accommodate ground service equipment between flights. Demers also addressed the need to consider any impact construction may have on surrounding communities.
“We need to be good neighbors to Inglewood, El Segundo, Westchester and other areas,” he said. “That means talking to them and explaining what our business is about and any opportunity that this might create for them,” he added.
Technology, as in many other industries, is a large part of the story of expansion and renovations. Biometrics and other innovation technologies are being implemented into the guest experience to decrease wait times and streamline processes. LAX is also a TSA Innovation Airport and boasts the most automated screen lanes of any airport in the USA. This designation is given by the TSA Task Force, an agency who works directly with airport property management staff, industry partners, and airlines to bring cutting-edge security screening technology to security checkpoints. These efforts are undertaken to not only improve the overall guest experience, but to enhance the TSA’s security capabilities through innovative methods.
Ringing true to the forward-thinking nature of Los Angeles, LAX is among the first airports to test pilot programs before further application at other airports. Recently, LAX launched an app-based pilot program for blind and visually-impaired passengers. The program provides instant access to a live person who can help them navigate through the airport. As the fourth busiest airport in the world, LAX sees a great diversity of passengers, and must cater to the unique needs of each demographic. While technology is a great tool for facilitating this, it is hardly the only tool being used to create more positive experiences. Barbara Yamamoto noted that while technology is paramount to prioritizing customer service and guest perceptions in 2019, it is really the people of LAX who are the proverbial “icing on the cake” of a great airport experience, a term which almost seems like an oxymoron.
“Technology and innovation are great, but we cannot lose sight of the human touch,” said Yamamoto. “It is very possible to do this and LAX will have new construction AND an elevated guest experience, there is no OR about it.”
As our nation’s most populated state, burdened with an exorbitant cost of living, its hard to comprehend how California will emerge from our current housing crisis. The issue often becomes a sociopolitical tug-of-war, with long-time or native-born residents generally opposing development as they cling to the ideal of the old California. Our state was often romanticized as the “new world” or the “land of plenty” in generations past. Newcomers found space was abundant, and an image of suburban sprawl became the norm. A stark contrast to density-driven cities along the Atlantic, such as New York or Boston. Fast forward to 2019, and this mentality has produced a sea of single-family homes on postage stamp-sized lots, all stacked right up against each other. Congestion, soaring rents and home prices are additional side effects of this antiquated view, which is no longer sustainable. Los Angeles is in desperate need of more housing – and long overdue for a wake-up call.
The development community, and other forward-thinking individuals are eager to solve this problem, but in this land of sardine-packed suburbia, the only way is up. New building initiatives, which tend to incorporate density, are often met with opposition, mandated fees, and sky-high construction costs. In our April panel event, we hosted a group of development professionals and city officials to address the lingering question of whether or not Los Angeles can truly build its way out of the housing crisis. If the only way is up, just how willing are we to put the past aside and go there?
Not Much Left for the Middle
Kevin Keller, executive officer for the Los Angeles Department of City Planning, opened the panel by explaining how the government entity is tasked with reviewing all developments of scale, while also trying to ensure that new homes for all income types are being built. The building of new homes is widely accepted as a crucial component to ending the Los Angeles housing crisis. Moderator Edgar Khalatian, partner at Mayer Brown, a law firm specializing in real estate, added that even Mayor Eric Garcetti is in support of new development. Under Garcetti, the city of Los Angeles has implemented a goal of building 100,000 new units by 2021. Since 2013, when Garcetti first announced this intention, the city has approved permits for 92,000 new units. Khalatian added that while this number is large, it pales in comparison to what is needed to alleviate rent-burdened families across Los Angeles. In addition to the shortage of housing, there is most notably a shortage of affordable housing.
Housing permits are up 49% which is roughly 21,000 units, with affordable units increasing by almost 63%, but in terms of hard numbers, affordable housing units have increased by only 1,600 units. Approximately 1,100 of which are reserved for very low-income households. The propensity for city governments to reserve affordable housing permits to very low-income households is a noble act; however, it creates even more of a shortage and less of a solution for the majority of residents who fall somewhere in the middle of the affordability spectrum. Panelists all agreed that there is a mismatch between the housing supply and the jobs in our region, and the simple fact that affordable housing costs roughly the same amount to build as luxury housing, doesn’t seem to be helping anyone.
“Without subsidies, it is very difficult to build affordable housing,” said Khalatian. “Land costs are the same, entitlement process is the same, consultant costs are the same, the only difference is the revenue source.”
With much of the new developments being geared toward both extreme ends of the spectrum, many are asking themselves why the current development boom is not catered more toward middle-income households. Panelists agreed the incentivization of middle-income housing development needs to be prioritized in order to reach real solutions.
The Only Way is Up
The rate of return is also a major factor that either helps, or hurts development efforts – of all asset classes. Clifford P. Goldstein, founder of GPI Companies, pointed out that construction costs often have an overwhelmingly harsh effect on development.
“We are down to building on about a 5% to a 5.5% return on residential projects,” said Goldstein. “And there are some investors who simply won’t even take on a project with such a low return on cost.”
This is especially problematic for Southern California because the low rate of return threatens the flow of capital, which is essential to a healthy economy. As construction costs continue to rise, the rate of return is unlikely to increase. If this trend persists, Los Angeles is likely to see the capital necessary for development, move to other parts of the country with more promising rates of return.
“Development is inherently risky, and when looking at opportunities, we have to look at many different metrics,” said Patrick Rhodes III of Brookfield Properties. “We need to be able to develop to a percentage of yield that coincides with our cap rate, this is becoming harder and harder.”
This would only further compound the housing crisis as it would deter development even further, leaving Los Angeles with older and increasingly deteriorating units. Reducing the cost of development is a necessary step in the right direction, but accomplishing this is not an easy task. This would require the dismantling of multiple sets of systems across state and local jurisdictions which have often opposed large scale vertical developments, especially those which favor density.
“70% of people in Los Angeles agree we have a housing crisis, but around the same percentage (70%) don’t want to see more housing in their neighborhoods,” said Khalatian. “Large changes in policy will immediately spur more development, but people need to become open to it.”
A solution to the housing crisis in Los Angeles has many forces stacked against it. Cheaper development costs are a solution, although not the most feasible. What really needs to happen is Angelenos need to get out of their own way. Communities need to come together and find mutually beneficial solutions. Our 88-city nation-state needs to realize we are all in this together, and what is good for one neighborhood, is good for all. The dream of a big house with a white-picket fence, is a dream which ended decades ago – and we have run out of times to hit the snooze button. Solving this problem will take a great change, to both our urban landscape and our mentality. The solution to the housing crisis is in fact, more development. Los Angeles can build its way out of this crisis, and the only way is up.
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