Event Blog

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.

Maintaining Exclusivity

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.

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.

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.

Higher Ed

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.

Aviation 

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 21^st 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.

Of all the various issues that can plague the development community, none is so crucial to the general population as healthcare. Ensuring our medical facilities are adequate and up-to-date is one of the most pressing items. In this month’s panel event, hundreds of architects, engineers, and more, filed into the California Club to hear from a group of panelists at the forefront of the medical facility planning and development processes. In one of our most heavily attended events, panelists discussed how the various issues in the healthcare industry will affect development, Southern California, and the nation as a whole.

Sarah Meeker Jensen, AIA, LEED AP, President of Jensen + Partners began the program by introducing the 4 panelists who work in different domains of healthcare development. Jean Mah, FAIA, FACHA, LEED AP of Perkins + Will, who is a principal and healthcare planner, has been recognized for her innovative style. The second panelist, Andrew K. Moey, AIA, is an assistant deputy director at Los Angeles County Public Works. Projects he has worked on include the renovation and master-planning of UCLA Harbor Medical Center, which is currently in development stages. Our final panelist, who was quite a rarity, was George Tingwald, MD, AIA, ACHA of Stanford Healthcare. Dr. Tingwald was able to provide unique perspectives due to his experience as both a physician and an architect, which also serve him exceptionally well in creating medical facility master plans.

Sustainability in Medical Facilities

Our panel discussion touched on many topics which pertain to sustainability, both of individual medical facilities as well as the state of the healthcare industry itself.

“Hospitals are the most challenging building type to make sustainable, but they also present some of the biggest opportunities for designers,” said Jean Mah. “The potential benefits to people and the environment are so high.”

All panelists had their own concerns regarding the sustainability of our current healthcare facility model. This is especially important to California – both northern and southern – whose metro areas face increasingly limited quantities of space. San Jose, was noted specifically as having a notable access problem with over 350,000 individuals being turned away from hospitals in 2018 alone. Other issues relate to the resiliency of structures. It is estimated that between 20% and 40% of California hospitals may be forced in to closure in the near future due to the inability to fund seismic retrofitting renovations, which are mandated by state law. While these regulations have the best intentions, they can often hamper development efforts. This can be especially precarious in the arena of structures which provide essential services, hospitals being among them.

Current Successes, Failures and Looming Crises

While the panelists delivered mostly sobering information during the discussion, not everything was laden with bad news. For instance, some of successes that were noted by panelists centered around certain progress made in the realm of behavioral health.

“Healthcare in Los Angeles has developed to place a large emphasis on behavioral healthcare,” said Andrew K. Moey. “However, for it to be truly successful on a long-term basis, healthcare professionals must adapt a model in which behavioral health is fully integrated into mainstream medical care,” he continued.

Other panelists agreed that while progress has been made, there is still abundant room for improvement. Issues surrounding behavioral health are especially pertinent in Southern California, a region notorious for being rife with homeless individuals, many of whom are suffering from mental illness, addiction, and other behavioral health issues.

“These problems affect many areas of society, we need to move into a model of behavioral health that removes those who are suffering from the vicious cycle they are caught up in,” said Moey of the current shortcomings.

Wellness, a popular concept which has taken the healthcare landscape by storm in the last decade was noted by panelists as largely being a failure. This concept is perhaps better suited towards retail environments in the form of a service provided, not necessarily healthcare. Looming crises include the current statistics of nurses and physicians.

“Around 50% of nurses and doctors are over the age of 50,” said Tingwald. “This is especially going to affect the baby boomer generation, who are the next generation to advance into the upper stages of aging.”

Panelists all agreed that while development efforts are crucial in the future of the healthcare landscape, the medical profession must also reconsider how doctors and nurses are trained. In addition to training, medical professionals must continue to work with members of the development community to provide both the best care for patients, as well as the best working environment for hospital staff.

Among the various challenges associated with life in Southern California, resiliency is one that needs to be discussed with greater frequency. Surely the devastation of the recent Woolsey Fire, and the potential threat of mudslides almost immediately after serve as the most recent example of our vulnerability to the surrounding natural environment. The moments that follow a natural disaster, from realization to actual rebuilding are what seems to be when people are most concerned with resiliency. However, our February panel event speakers explained why resiliency measures need to become a continuous dialogue, rather than limited only to the moments after suffering a catastrophic loss of property or lives.

The Issue of Perception

The event was moderated by John Bwarie, deputy director at Dr. Lucy Jones Center for Science and Society. The center was founded with the intent to activate the use of science in the creation of more resilient communities. John began the conversation by pointing out that while resilience and sustainability are both topics of concern in the development community, there is an added level of difficulty surrounding them as both concepts deal with an issue of perception. What is perceived as a resilient measure in one community, may not be as applicable to another. For example, the panel’s next guest speaker, Jefferson “Zuma Jay” Wagner, who was recently re-elected as mayor for the city of Malibu, lives in a community where truly sustainable building practices would include preventative fire safety measures. This should come as no surprise given that the recent Woolsey Fire tore through his city, destroying 670 total structures including at least 400 single-family homes. In total, the fire burned about 96 thousand acres. Given the topography of Malibu, the threat of fire is much more likely than perhaps Downtown Los Angeles where the panel was held. A community such as Downtown Los Angeles would more likely be concerned about seismic resiliency rather than wildfire resiliency. This difference in need contributes the issue of how resiliency is perceived. Like sustainability, resiliency can be open to interpretation, which means it can be difficult to incorporate when considering re-development opportunities. A second panelist, Matt Barnard, principal at Degenkolb, agreed that because resiliency is a localized experience, it is difficult to broadly define. All panelists agreed that regardless of our difficulty in defining resiliency, there needs to be more discussion to move Southern California into a resilient direction.

What Keeps You Up At Night?

Another common theme for the panel discussion was a simple question often asked of leaders and decision makers: What keeps you up at night? Carey Upton, Chief Operations Officer at Santa Monica-Malibu Unified School District stated that a primary area of concern within the school district is ensuring that children will have the ability to safely attend school. Additionally, public schools are sometimes used as evacuation facilities. As schools are a cornerstone of any community, they will always need to be designed for safety as well as resiliency.  School districts also have the challenge of incorporating resiliency measures into the structure not just for today, but for the generations of tomorrow.

Christian Johnston, founder of the Sustainable Building Council, added that his work has taken him to visit many communities who are freshly in the wake of coping with natural disaster. The devastation endured by residents and the overwhelming desire for families and individuals to rebuild their lives, and more importantly, the need to help these people, is what keeps him awake at night. While panelists all had different aspects of resiliency and sustainability that might stir in their minds, all agreed that the Northridge Earthquake of 1994is the Southern California natural disaster that is one of the most pronounced in their minds when considering how to better plan for resiliency to seismic activity. However Matt pointed out that the Northridge earthquake, although memorable, is not large compared to “the Big One” that threatens Southern California. 

Risk

Another common connection made among all panelists was risk. Many communities are built in areas at high risk of enduring a natural disaster, and if a disaster occurs, we have seen them be rebuilt, only with the same structures and infrastructure as before. One audience member pointed out that Tejon Ranch, a master-planned community near the Grapevine in northern Los Angeles County, was approved for additional home construction sites in high-risk burn areas less than a month after the destruction of the Woolsey Fire ended on the other side of Los Angeles County. This has led many sustainability- and resiliency-oriented development professionals to question not just how rebuilding should occur but also if the risk of disaster outweighs the need to rebuild at all in specific areas especially prone to disaster. However, eliminating a community’s attempt to rebuild in the area they have known as home can be a restrictive tactic that may meet fierce opposition by recently displaced residents who want to rebuild their community.

The key takeaway is that resiliency needs to be approached more eagerly and with the entire community’s best interests at heart. Truly, resilience is the capacity for humans to survive, adapt and grow, regardless of what shocks or stressors ensue. It is an effort that will take full cooperation by developers, residents, and governments, alike.

Whether you are a native of California or a fresh arrival, the phrase “California dream” is likely one you have heard. However, it’s meaning has changed over time. Today, our state grapples with a multitude of unique issues that affect our economy and industry in a variety of ways. As the most populous state in the nation, and also burdened with a housing shortage, developers must consider certain trends and opportunities when conducting business. Larry Kosmont, president and CEO of Kosmont Companies, partnered up with Lew Horne, division president of Southern California, Arizona, and Hawaii at CBRE, led a panel discussion focusing on these issues.

The Year of the H

Lew Horne kicked off the panel discussion by breaking down the core concepts which he referred to as the year of the “H”, or 4 key elements beginning with the letter “H” that make Los Angeles so unique. The first among them was the historic forum characteristic.

More importantly the historic forum aspect of our city is highlighted in the adaptive reuse category. Horne notes that while Los Angeles is lush with adaptive reuse projects, they are most apparent in Downtown Los Angeles and the Arts District. The Apple Store going into DTLA is a prime example of adaptive reuse. There have also been speculations that Apple’s selection of this space may be a signal that the tech company may venture into becoming a major Hollywood content creator.

The second “H” pointed out by Horne is high density, which is somewhat of a divisive issue among Angelenos. Horne also alluded to the fact that Los Angeles hosted 50 million visitors last year alone. A high demand for space by both the hospitality industry, as well as local residents continues to create issues centered around real estate development in a time where space is at a premium. To put it simply, when talking about Downtown Los Angeles, the only way is up. The region was home to approximately 50,000 residents 2 years ago, present day figures show the number has surged to slightly over 70,000 residents.

High-tech is the third “H” as pointed out by Horne. “Tech quite simply, is changing everything,” he said. “It is changing offices, changing industrial and changing retail. Tech is the new industrial revolution.”

Horne also mentions that tech tenants, which are innovative and forward-thinking in nature, view adaptive reuse as a way to attract and retain talent.

Whether brand new or redeveloped, Los Angeles is the number one target for foreign investment. Horne cited an approximately $170B in foreign investment capital being poured into the metro area over the course of the last 5 years. To the shock of much of the audience, Canada is largest foreign investor in Los Angeles, and the United States as a whole. About 50% of class-A buildings are the result of, or supplemented by Canadian investments.

Homelessness was cited as the final “H” in Horne’s dialogue. Los Angeles a city with approximately 58,000 homeless residents on any given night, has often been described as “ground zero” for homelessness in the United States.

 “This situation is here for 2 reasons, we are not passing the correct laws and also it’s a real estate issue, pure NIMBY’ism,” he said. “No one wants to see it.”

Horne has taken this issue on as a corporate social responsibility initiative for CBRE. Regardless of any private efforts, the homelessness crisis must be solved at the legal level through cooperation of local governments.

California’s New Direction

Larry Kosmont, chairman and CEO of Kosmont Companies continued the conversation by noting that many of the trends identified by Horne currently affect decisions made by California real estate and development professionals.  

“It’s a very complicated and diverse economy, which is exciting,” said Kosmont. “The reality is that California is looked at as place that seems to want to make changes, and do it right, but doesn’t always get it right, however, this is a common characteristic of any leader.”

Kosmont Companies is a real estate, financial advisory and economic development services firm offering a full range of services for both the public and private sectors.

“We are always at the convergence of public and private transactions, it’s an interesting perspective as to how public and private investment work, whether it be collaboratively or competitively. In our state, there is a little bit of both in the equation,” said Kosmont.

Kosmont pointed out that policy makers in California are taking our state into a green economy.

“As real estate investors, we need to get on board with this idea because these ideas are not going to go away,” said Kosmont.

Much of the sustainability-minded changes are driven by Millennials, who are also having less children, meaning demographics in our state are changing.

“California is also getting older, we don’t have as many children here anymore. We import and we transport,” said Kosmont in reference to California’s youth and workforce

Economically, the middle-class in our state is shrinking as the affordability crisis deepens. Our new governor, Gavin Newsom is prioritizing housing, homelessness and healthcare. Kosmont feels that our current balance is not sustainable to continue growth in our economy.

However, there is no single solution to solving this problem. Our state needs more housing, but housing trends are changing. Urbanization is taking a different form.

“Millennials want an ‘urban suburbia’ where they can walk freely, but also have access to good schools and other suburban comforts,” he said.

While Millennials demands might be a driving force for real estate and development professionals today, they are only one piece of the puzzle in our state’s complex economy. While the California Dream may have changed drastically, the idea persists. As our state struggles to deal with a set of complex issues, real estate and development professionals will be tasked with keeping the California Dream alive.