BALLSTON QUARTERProposed Redevelopment Plans & Potential Public-Private Partnership

Meeting with Civic Association Representatives,Planning Commissioners and Arlington County Staff

Tuesday, June 30, 2015, 7:00 P.M.National Rural Electric Cooperative Association

4301 Wilson Boulevard, Room CC2 1

Welcome & IntroductionsSteve Cover, AICP

Director, CPHD

Opening RemarksMary Hynes

Chair, Arlington County Board

Mark SchwartzActing County Manager

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History of the Role & Importance of the Mall To Ballston Planning & Redevelopment

FROM PARKINGTON TO BALLSTON QUARTER

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Significant Events in The Development & Planning of Ballston

• 1951 – Parkington Shopping Center constructed• 1979 – Ballston Metro station opens• 1980 – County Board approves the vision for a “New Downtown” in

Ballston• 1986 – Ballston Common Mall opens at site of former Parkington

Shopping Center• 1999 – Mall expansion including:

– Regal Cinemas– E-Trade Tower

• 2004 – Ballston Point• 2006 – Kettler Capitals Iceplex

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General Land Use Plan

• Ballston Station Area Concept:– High density office and residential uses with a

regional shopping center forming a new downtown in central Arlington

• Relevant Plan Features:– Regional Shopping Facilities (Ballston Common Mall)– Commercial Revitalization and Growth

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Ballston Sector Plan & Summary

• Ballston has been a major retail center since the 1950s, when Parkington was first constructed.

• Initial planning focused on redevelopment of Parkington to provide the commercial centerpiece of the station area.

• Parkington served as a catalyst for additional commercial development along the major thoroughfares in the area.

• GLUP supports commercial growth and revitalization of then Parkington Shopping Center (today, Ballston Common)

• Development of Ballston Common and the associated office building stimulated much of the commercial revitalization in Ballston.

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Sector Plan – Commercial Development

• The County Board should continue to encourage major revitalization of commercial facilities in Ballston.– Emphasis placed on Parkington with

alternative sites to also be explored.• Existing commercial development

recognized as a key asset in the Ballston Community.

• Parkington provides a focus for commercial expansion. 7

Ballston Today

Photo Credit: Arlington County Department of Community Planning, Housing & Development.

Ballston in 1980

Station Entrance

StationEntrance

Photo Credit: Arlington County Department of Community Planning, Housing & Development and Pictometry International Corporation.

Land Use and Planning Around the Mall

• Land use, planning, and development in Ballston has always been defined by a regional shopping mall as the focal point and catalyst for the area’s commercial and residential development and growth.

• The vitality of the Ballston Common Mall is necessary to the long-term fulfillment of the County’s land use and planning goals for commercial and residential development and growth in Ballston as provided in the GLUP and Ballston Sector Plan and Summary.

• Without the existence and preservation of the Ballston Common Mall, there will not be the continued growth and development as anticipated and provided for in the County’s long-term plans for the area. 10

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BALLSTON QUARTERPROPOSED REDEVELOPMENT PLAN

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Site Plan Applications Summary

Mall Renovation

Mixed Use Building

Office Renovation

Site Plan Applications

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Mixed Use Building

• 22 Story Multifamily Building– 405 Residential Units– 51,860 sf Retail– 282 Below Grade

Parking Spaces– LEED Silver– Bonus Height– Bonus Density– Reduced Parking

Ratio15

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Mall Renovation

• Interior Renovations• Façade Improvements• Streetscape

Improvements• Plaza• Mews• Garage Improvements

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Office Renovation

• Façade Improvements• Interior Renovations• New Office Entries• Interior Courtyard• LEED Silver & LEED

EBOM

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Purpose, Process, Participation & Schedule

SITE PLAN REVIEW COMMITTEE

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SPRC Goals

• The Site Plan Review Committee (SPRC) is the community’s forum for reviewing special exception development requests.

• The goals for all site plan reviews are that the process be:– Fair– Thorough– Efficient

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SPRC Purpose

• Enable public review of the three site plan applications that comprise the Ballston Quarter redevelopment.

• Provide a forum for understanding, examining and discussing the site plan proposals prior to Transportation Commission, Planning Commission & County Board public hearings & associated actions.

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SPRC Membership

• Planning Commission• Designated Advisory Commissions• Civic Association Representatives

– Ashton Heights– Ballston-Virginia Square– Bluemont– Buckingham

• Ballston Business Improvement District

• Arlington County Staff 29

SPRC Process & ScheduleMeeting General Topic Date Time Location

SPRC Meeting 1 • Site Visit• Informational

Presentations• Land Use &

Zoning

July 20, 2015 6:00 - 10:00 pm NRECA

SPRC Meeting 2 • Site Design & Characteristics

• Building Architecture

July 30, 2015 7:00 - 9:30 pm County Building, Rooms, C/D

SPRC Meeting 3 • Transportation• Landscape &

Open Space

September 14, 2015 7:00 - 9:30 pm County Building, Rooms C/D

SPRC Meeting 4 • Community Benefits

• ConstructionIssues

• Wrap Up

September 28, 2015 7:00 - 9:30 pm County Building, Rooms C/D

Transportation Commission

October 29, 2015 7:00 pm County Board Room

Planning Commission November 2, 2015 7:00 pm County Board Room

County Board November 14, 2015 9:00 am County Board Room

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Potential Tools & Opportunities to Achieve Redevelopment

PUBLIC-PRIVATE PARTNERSHIP

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The Manager shall report the results to the Board, including an outline of a possible agreement, within the next 30 days.• The outline of a public-private partnership agreement with Forest

City Enterprises for the redevelopment of the Ballston Common Mall property shall address the following elements, among others:– Economic and place-making benefits to the County.– The range of land use incentives (e.g. density, height, and

modifications to parking ratios), that could be used in combination to achieve the mixed-use, redevelopment vision for the Ballston Common Mall site.

– Strategic and measured use of public investment and financing tools in order to achieve the optimal economic and place-making benefits to the County of this redevelopment project.

County Board Direction – June 16, 2015

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What is a Public-Private Partnership (PPP)?

A formal partnership between a public and private entity for the purposes of jointly pursuing a shared objective. Optimally, a PPP will only be considered when both Planning and Economic Development objectives are met, including:• The project is of a scale and level of importance that will result in a

significant positive change for the community.• The project is consistent with broader planning and land use policy. • Private investment alone can not realistically achieve the outcome that is in

the public’s best interest, the “But For” hurdle.• Public investment is leveraging private investment, not driving economic

feasibility.• There is a measurable return on the public investment.• Risk is appropriately allocated within the deal structure.• Public investments are in public areas – infrastructure, owned assets, public

and open spaces, and in some cases, urban design elements.A Public-Private Partnership should not be about public subsidy. It should be

about strategic public investment to realize a greater public good. 33

• BCM in its current form is in a retail “death spiral”

• Greater competition for consumer dollars and retail tenants

• Mall has transitioned from asset to liability for Ballston

• Ballston faces broader threats to its fiscal base, and the Mall currently is a negative catalyst

• Mall property significantly underperforms with regard to fiscal benefits today

The Economic Challenge Facing Us Today

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Shifts in Consumer Behavior

Lose Ground to

Competition

Drops in Sales

Volumes

Key/Anchor Retailers Close or

Negatively Reposition

Vacancies and

Substandard Retailers

Co-Tenancy Require-

ments Triggered

Repositioning Efforts Fail or

Have Only Temporary

Impacts

The Anatomy of the Regional Center “Death Spiral”

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Increased Competition

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“Ballston mall. Make it better and everything else will fall in place.”

“Better shopping for the young business professionals.”

“More high end restaurants and shopping.”

“The new mall will be a great boost to Ballston. Overall Ballston is on the right track.”

“I like what I've heard about the changes proposed to the Ballston Commons mall.”

“Hopefully the improvements being made there will echo throughout the rest of the community...”

“It's awful right now. If it was a good, current mall I would be over there all the time during lunch, etc. Having an option to go grab a quick gift or go shopping for an hour would be awesome.”

“More dining (especially ethnic) and retail options! Redevelop the mall.”

Write in comments from Ballston BID April 2015 survey of office workers, in response to question: “What needs to be improved in Ballston?”

Need for Change…and Optimism of Impact

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18.2 % office vacancy rate

1.45M SF of vacant office

space

32.2% office space listed as available

-324,000 net office space absorption

since 1Q09

Ballston Commercial Fiscal Base Under Threat

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Why is Now the Time to Consider a PPP?

• Why is the proposed timeline critical:

• Forest City now in control of critical site

• Rapidly deteriorating tenant base

• Declining NOI

• Carry of recent acquisition and sunk costs

• Retail leasing rhythm and regional competition

• But more critically for the County:

– Project will become more, not less expensive, the longer we wait.

– Forest City’s appetite to take a bold risk will wane with significant delay and uncertainty.

– Future investment decisions may be less bold, and less impactful.

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Components of a PPP Analysis• Analyze Project Feasibility and Identify Private Investment Gap

• Identify Costs that are Appropriate for Public Investment

– County-owned or controlled assets

– Infrastructure

– Public spaces

– Urban design elements

• Study Potential Public Investment Tools

– Land Use Components

– In-Kind Contributions

– Public Finance Tools

• Bonds/CDA

• Developer Financed/Tax Rebate

• Analyze Net Return to the County of Proposed Investments40

Process

The analysis, and deal formation, of a PPP is inherently different than the community review process of a development project.

Still, it will be critical to engage in public discussions, where possible, through the analysis and potential deal-making periods:

• July CB – CM to report back to CB status of analysis, per the June CB direction

At that time the CM will also present to the CB a framework for a public outreach process that will focus on informational briefings at key points in the deal-making process. This may include:

• Economic Development Commission (EDC)

• Fiscal Affairs Advisory Commission (FAAC)

• CB Public Hearing(s)/Work Session(s) 41

QUESTIONS & ANSWERS

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WRAP UP & NEXT STEPS

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THANK YOU

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