old warehouse

A century-old loft building has been retrofitted for tech workers with fancy pantries, bleacher seating for all-hands meetings and a library for Kindle readers where the only books are decorations on the wallpaper.

In another part of Manhattan, Google is creating a vast campus with offices spread out among three loft buildings. Even some new office towers are being made to look like lofts, with high ceilings, flexible floor plans, and exposed columns and pipes that evoke old New York to tech newcomers.

The humble loft building helped transform New York into an industrial powerhouse in the first half of the 20th century, with expansive, light-filled floors packed with workers stitching shirts and textiles, forging metal and machinery, and toiling in assembly lines. It was a utilitarian version of a modern coworking space.

But the lofts that once defined the cityscape were eventually abandoned by businesses, left to artists and homeowners coveting more space, and were no longer favored by city officials who saw them as outdated relics. Now lofts are back in vogue, coveted by technology companies that want an authentic New York feel.

“People used to think these kinds of buildings and areas are obsolete,” said Elizabeth Lusskin, president of the Long Island City Partnership, an economic development group in Queens. “In fact, it’s quite the opposite. They are now at a premium.”

Technology executives say loft buildings are versatile, provide more space and character for less cost than cookie-cutter office towers, and better reflect their collaborative work culture. And the buildings themselves have a past that can be irresistible for companies with so little history of their own.

“Loft buildings offer the open, creative and fun spaces of Silicon Valley, combined with the New York City urban industrial feel,” said Matt Glickman, a vice president of Snowflake, a California-based software company with a Manhattan loft office.

Citywide, there are fewer than 5,000 loft buildings, nearly all completed before the 1960s, according to the Department of City Planning. Zoning regulations since then have discouraged new loft buildings. The growing demand for lofts has alarmed community groups that say it could lead to higher rents, pushing out longtime residents and small businesses in favor of deep-pocketed technology companies.

“If you’re a landlord and you have a choice between loft artists and a coworking space, you’re clearly taking the coworking space,” said Gregory Louis, a lawyer for Communities Resist, a community group in Brooklyn.

“Technology companies were “a direct threat to artists and light manufacturers,” said Carl Riddle, 41, an artist and loft tenant in Brooklyn.

City planning officials said they were considering changing zoning regulations to make it easier to construct new lofts. Currently, regulations adopted in 1961 favor buildings that are constructed for a specific purpose (such as office towers or small factories outside Manhattan) as part of an effort at that time to create an orderly and modern cityscape.

The goal now is to update those regulations to increase the supply of multiuse lofts that create jobs and help the city’s economy grow, while keeping enough of them affordable for smaller and less well-off tenants, city officials said.

For many technology companies, a building is just one selling point, of course, along with access to public transportation and a talented workforce. But Peter Turchin, a vice chairman of CBRE, a commercial real estate firm, said he receives a half-dozen calls a day from technology companies looking for renovated loft buildings.

“More than 70 technology companies, including streaming service Roku, have moved into the loft-rich garment district in midtown Manhattan in the past five years,” said Barbara A. Blair, president of the Garment District Alliance, which runs the business improvement district.

In Long Island City, Uber, Lyft and Via have opened offices in the Falchi Building, a 1922 loft that was a warehouse for the Gimbels department store. Nearby, a loft that was used as a book bindery is being converted into laboratories and offices for up to two dozen bio-tech firms.

“One major developer, Related Cos., which is building Hudson Yards, the mini-city rising on Manhattan’s Far West Side, is renovating two Long Island City loft buildings to offer a more affordable alternative a short subway ride from Manhattan,” said Patrick Sweeney, a managing director.

VaynerMedia, a digital marketing and communications agency, has an office at 10 Hudson Yards but is expanding in Long Island City.

“A loft is a more collaborative atmosphere, and that’s the kind of creative space we want to build,” said Alan Harker, chief financial officer for VaynerX, the parent company of VaynerMedia. “It encourages people to get together.”

Even new offices have been marketed as modern lofts offering the best of both worlds. Buildings in Chelsea and on the Lower East Side in Manhattan, and in Williamsburg, Brooklyn, have loft-style features such as high ceilings, open and flexible layouts, and oversized windows.

“Lofts were an essential part of New York’s history, used for storage or light manufacturing in the 19th century in lower Manhattan and later spreading north along Broadway and to other corners of the city,” said Carol Willis, an architectural historian and founder of the Skyscraper Museum in lower Manhattan. “By the 1930s, there were more than 100 of these “skyscraper factories” in the garment district alone. They’re built as generic space that can be occupied by whoever wants to rent it. It makes no difference if it’s a printer’s shop or an ostrich-feather hat maker.”

These days, the garment workers have been replaced by computer programmers, software engineers and graphic designers. Many building owners say they seek out “TAMI tenants,” or companies in technology, advertising, media and information.

At a loft building on West 41st Street in the garment district, 10 of the 15 tenants are technology companies, including Roku. The building caters to tech workers with lounges and pantries with cold-brew coffee and beer on tap. There are big-screen televisions and skateboards hanging on the wall, and a library with a pool table.

“These prewar buildings often pose infrastructure challenges, but we’ve retrofitted our building to handle modern technology,” said Diane Carlini, a Roku spokeswoman. “The ‘old’ meets ‘new’ is pretty cool, and our employees really appreciate it.”

“Another tenant, Demandbase, a marketing technology company for businesses, moved its office from the prestigious Chrysler Building because the open spaces and glass walls at the West 41st Street site better reflect its culture,” said Gabe Rogol, the chief executive.

Last year, the city changed a long-standing regulation requiring garment district buildings to reserve half their space for manufacturers after building owners complained that they could not find enough tenants. That has attracted newcomers into loft spaces that would otherwise stand empty, creating jobs and supporting the local economy, said Blair, of the Garment District Alliance.

“We all have to evolve,” Blair said. “You’ve got these new industries, and they need somewhere to go.”

Well-funded technology companies have moved into the neighborhood after a large share of manufacturers’ leases expired over the past two years and cleared the way for lofts to be renovated. Joseph Ferrara, whose family owns Ferrara Manufacturing, said many manufacturers were paying about $20 to $30 a square foot.

“Tech companies, in particular those funded by venture capital activity, are happy to pay $50 a foot,” Ferrara said.

Google led the way when it settled in a loft building in Chelsea in 2006.

“Google pointed out to the world that these massive loft-style buildings were very attractive to their employees,” said Paul Pariser, co-chief executive of Taconic Investment Partners, which developed the building. “What were once secondary buildings started gaining traction.”

As Google now expands in lower Manhattan, it is moving into two loft buildings and taking over the commercial space in a third, in a former industrial neighborhood near the Holland Tunnel that has welcomed newcomers with $27 million in improvements, including a park.

Lofts have become hubs not just for technology companies, but for manufacturing companies that embrace technology. At the Brooklyn Navy Yard, companies are assembling robots, drones and 3D printers in lofts. Some have even asked that their buildings not be fixed up too much.

“None of them would want to be in a traditional office space,” said David Ehrenberg, president and chief executive of the Brooklyn Navy Yard Development Corp., the nonprofit that runs the city-owned complex on the East River.

When Tim Armstrong was hired as Google’s first New York employee in 2000, he turned his loft apartment on the Upper West Side into the company’s inaugural office. Now his latest venture, DTX, a product, design and technology company, is based in a former metalwork shop in SoHo that was transformed into a loft. There are open areas with couches, long tables and rows of computers in an airy mezzanine. No one has offices or desks.

“Life is not all about being in a shiny office building,” Armstrong said. “It’s about being in a zone where you’re trying to figure things out the world doesn’t know it needs yet.”


Source: SunSentinel

Florida state sign

Florida‘s state legislature just convened for its 2020 session, charged with passing laws and an estimated $91.4B state budget over the course of the next 60 days.

In his annual State of the State speech to kick off the legislative session, Gov. Ron DeSantis touched on everything from raising teacher pay to reducing barriers for occupational licensing. DeSantis said he would like to see people who pollute water be penalized and that $1B in mitigation funds would soon be distributed to areas affected by hurricanes. The first-term Republican said the state had a chance to correct some environmental wrongs and brace for sea-level rise.

Real estate professionals from around the state talked to Bisnow about other measures the legislature will be considering that could affect the industry. Of the 3,000+ bills that get filed each session, fewer than 10% pass.

Florida NAIOP President Darcie Lunsford said her group will continue its years-long fight against the state charging sales tax on commercial rents — something that only Florida does. Some critics argue this amounts to double taxation in many cases, since tenants already pay for certain real estate taxes when they sign triple-net leases.

“It’s an onerous tax that is unique to Florida and makes us less competitive,” said Lunsford, an executive vice president at Butters Construction.

She said a bill hasn’t yet been filed, but probably will be in February. For three years in a row, the rate has been reduced by a fraction of a percentage point — it is now at 5.5%. Lunsford said that rolling back the tax is challenging because Florida doesn’t have a state income tax, so it relies on such measures to fund state government functions. She estimates the tax brings in about $1.8B per year. The recent reductions have resulted in about $156M less being paid to the state.

“NAIOP is pushing for legislation that would tax internet retailers the same way as brick-and-mortar retailers, which could bring in $300M to $400M annually,” Lunsford said. “It’s a way to shift some of the tax burden off the commercial real estate sector.”

NAIOP also hopes to revive the FAST Act, a measure that was proposed last year, which would require local governments to offer expedited permitting processes, cap fees, and establish timelines for issuing and replying to permits. Lunsford said that state law now requires permits to be issued within 120 days.

“But there’s no teeth in the law as cities struggle to keep up with demand,” Lunsford said. “Another proposal, HB469/SB1224, would drop the requirement that two witnesses sign leases, which is not necessary in the modern era, when people sign electronically.”

NAIOP will be hosting events at the Capitol Jan. 21 and 22 in Tallahassee.

The nonprofit 1000 Friends of Florida called for smart growth management, lest unbridled sprawl ruin the things that make the state an attractive place to live and visit. Water quality and traffic congestion are top concerns.

The organization has outlined its legislative priorities for 2020. These include repealing an amendment that passed last year that could make citizens pay a developer’s legal fees in certain cases — such as when a developer seeks an exemption to a local comprehensive plan, citizens oppose it, but the developer prevails.

“That amendment was tacked onto HB7103 on the last day [of the] legislative session. It never got vetted by the public, by committee, by subcommittee. There was no staff analysis,” 1000 Friends Policy & Planning Director Jane West said. “It was a dirty move — and it’s had massive repercussions in the state. People are dismissing cases that have been pending for years. People are opting not to challenge new projects.”

SB250, introduced by Sen. Lori Berman (D-Palm Beach), would repeal that amendment. 1000 Friends is also fighting the amendment in the courts, hoping to have it deemed unconstitutional.

Lunsford said that the CRE industry would see a repeal as “going backwards,” and that the law as it stands could benefit not just developers, but either party that prevails.

The legislature last year also authorized three new highways. 1000 Friends is hoping to see that decision reversed, but it would require a repeal, plus de-authorizing related funding that passed. Instead, the group is calling for generous funding for land acquisition efforts, such as Florida Forever, the Rural and Families Lands Program, Florida Communities Trust and other land protection programs.

“Our environmental tragedy is the destruction of our raw lands,” West said. “You see it in every part of the state you go to … sprawl after sprawl after sprawl.”

The only sure way to save Florida‘s green space is to buy it and protect it in perpetuity, she said. The Florida Forever program is set up to acquire recreation and conservation lands. It is funded by doc stamps, a fee paid when people buy and sell property. It had been popular with both the left and right, including Gov. Jeb Bush, back to the early 2000s, but was essentially wiped out under eight years of Gov. Rick Scott. The current budget includes $33M for Florida Forever; DeSantis is asking that figure to be bumped to $100M in 2020-2021.

“We’d like to see it back to historic funding levels, over $300M,” West said. “But this is a nice start.”

Florida Realtors are also paying attention to Tallahassee. The group’s top legislative priorities for 2020 include environmental protection and full funding of housing trust funds, according to its website. For more than a decade, state money that is supposed to be in a trust fund to create affordable housing has instead been diverted for other uses, steering away some $2B.

Florida Realtors is also lobbying for a reduction in the business rent tax and will support initiatives that allow owners to rent out their private properties more freely on Airbnb, which was in a heated legal battle with the city of Miami Beach before settling in August.

Former Florida Speaker of the House Dean Cannon, the president and CEO of law firm Gray Robinson, now oversees lobbyists who closely monitor the state legislature. He said the commercial rent tax could likely get cut a bit more, and that water quality and environmental funding will loom large, especially because DeSantis has been vocal about those issues.

“The House and Senate will want to deliver a good environmental message because it’s an election year,” Cannon said. “I think they have the collective political will to get something done.”

Appropriations decisions — such as which projects get funding, and whether the affordable housing trust gets raided again — are likely be influenced by economic forecasts that legislators receive in February.

“That’s the last one we get before voting on the budget. It’s always sort of a question mark,” Cannon said.  “All budgeting is balancing an infinite number of priorities against a finite number of dollar. There’s no perfect policy — just a best effort at balancing the interests.”


Source: Bisnow

boynton beach mall

Boynton Beach Mall could have half the square footage for retail businesses once it’s redeveloped, but it might add apartments, a hotel and offices.

The plans reflect attempts across America to transform malls as fewer people go there to shop. Apartments also are planned at the Coral Square Mall in Coral Springs and at the former Fashion Mall in Plantation.

The Boynton Beach Mall once had tenants including Burdines, JCPenney, Jordan Marsh and Lord & Taylor. But like other malls facing less in-store shopping and an increase in online shopping by consumers, retail tenants have dwindled over the years, with new types of tenants coming in.

“According to city documents, 30 percent of the mall is now vacant, and its proposed redevelopment would not only stabilize it, but make it a desirable destination once again,” said Bonnie Miskel, a lawyer representing primary mall owner Washington Prime.

The proposal would reduce the existing mall square footage for retail from about 1 million square feet to 482,750 square feet, and build separate, mixed-use buildings with retail use on the first floor and residential units above. Developers also would add up to 1,420 residential apartments on the site, along the north end and southwest side of the mall property, and inside the new mixed-use buildings. The redeveloped mall would include a 400-room hotel, 65,000 square feet each of medical office space, and general office space, and 35,000 of new restaurant space.

The master plan and rezoning request for the 116-acre site was filed with the Boynton Beach City Commission, which gave initial approval, but meets again on the plans Jan. 21. Some Boynton Beach residents expressed concerns on the NextDoor app about mounting traffic off Congress Avenue near the mall and that mall redevelopment plans didn’t seem to include any new entertainment venues for the community, such as a park, bowling alley or sports center.

The plan doesn’t affect Macy’s and JCPenney, the two major department stores remaining at the mall, which are owned separately, and Christ Fellowship Church, owner of a former Dillard’s department store space in the mall. The redevelopment would happen over five phases, with the first phase removing the former Sears buildings and adding a 400-unit apartment building, Washington Prime said.

In its proposal for redevelopment, Washington Prime says that “the current use of the property as an aging mall is in steady decline as it no longer meets the needs of the community and is slowly becoming a source of blight in the city.” Occupancy at the mall has dropped by 11.5 percent between 2015 and 2016, according to documents submitted to the city to justify rezoning.


Source: Sun-Sentinel

Changes made to the Comprehensive Plan will now allow self-storage buildings to be exempt from commercial cap space in the Ag Reserve.

When is a 130,000 square-foot, three-story self-storage facility not a commercial business? When it’s in the Ag Reserve.

With the Ag Reserve already at a commercial square-foot cap of 1 million square feet, the builder’s agent, Ken Tuma, came up with a novel approach: Exempt self-storage buildings from the commercial cap.

The reserve was designed as a sanctuary for farming and a rural lifestyle, but much land has still been developed there as western property has boomed in Palm Beach County.

County planning commissioners, urged on by the Planning Commission staff and the Coalition of Boynton West Residential Associations (COBWRA), agreed recently to recommend a change to the county’s Comprehensive Plan to accommodate a self-storage building on a 7-acre tract of land on the northwest corner of Boynton Beach Boulevard and Acme Dairy Road.

Because of the cap, the builder, Gary Smigiel of Lake Worth, was limited to a 40,000 square-foot commercial project, far less than the 130,000 square feet he needs for the self-storage building. He is proposing to build 20,000 square feet of commercial in addition to the self-storage. The commercial project will consist of retail and a restaurant. But the self-storage building won’t be considered commercial if the change to the Comprehensive Plan is made.

County commissioners are expected to act on the Planning Commission recommendation in 2020. Tuma told planning commissioners there is a real need for self-storage facilities as a number of large-scale developments have been built in recent years west of Boynton Beach and Delray Beach. Many of these communities prevent homeowners from storing items in their garages, he noted.

With limited space available for commercial development in the Ag Reserve, developers have yet to build a self-storage building.

The Ag Reserve is an area in the western end of the county with special rules designed to protect the region from over-development. It is the only part of the county with a cap on commercial development and a requirement that residential developers set aside a large portion of their property for open space.

Planning Commissioner Dagmar Brahs was a reluctant supporter of the “West Boynton Center” project. She said she is concerned about a precedent being set that could result in other self-storage facilities being built throughout the Ag Reserve.

“What we are doing here is making a change to accommodate a land user,” Brahs said. “That stinks.”

“To justify the zoning change, many retirees downsized when they moved into Ag Reserve developments,” Tuma said. “It is imperative for many of them to store some of their belongings in nearby self-storage facilities. Self-storage generates much less traffic than the majority of commercial uses permitted in the Ag Reserve.”

The site currently consists of a retail store, a small office and an apartment. The northern portion of the site is utilized for a nursery.

“COBWRA believes that the West Boynton Center is a good fit for the area,” COBWRA representative Steve Oseroff said. “It will serve as a book-end to the Cobblestone Commons commercial development just to the west on Boynton Beach Boulevard.”


Source: Palm Beach Post