Archive for the ‘Development’ Category
Wednesday, December 1st, 2010
Because Chicago is home to approximately 80 wind companies, including corporate headquarters and turbine factories, the city is seen as a hub for the wind industry. With plenty of farmland suited to wind turbines, Illinois has a law mandating that the state gets at least 18 percent of its electricity from wind by 2025. Unfortunately, the state agency that decides the source of all of Illinois’ wind power has halted development of new wind farms and could hamper the state’s ability to use this resource for years to come. The culprit is the Illinois Power Agency, which so far has not provided the necessary guarantees to facilitate new wind farm construction. The rub is that the agency is compelled to buy electricity from the lowest-cost source to satisfy the wind-power mandate.
Unless the governor, the Illinois Commerce Commission or the state legislature acts to change the state’s renewable-energy process, few or no long-term contracts to build new wind farms will be granted. In that scenario, the state will have to fulfill its renewable-energy requirement by purchasing credits from wind farms in other states such as Texas. Created in 2007 to assure that ComEd and Ameren give customers the best possible deal, the Illinois Power Agency dictates where the utilities purchase their electricity. Because the agency’s duty is to buy the cheapest electricity possible, it purchases wind power on the spot market or through short-term contracts.
Despite the Illinois Power Agency’s convoluted rules, the state is out-performing many others in terms of wind power. The American Wind Energy Agency ranks Illinois 7th nationwide in installed wind capacity in 2009, and 14th for wind potential. Howard Learner, an environmental law professor at Northwestern University, believes this is a make or break moment for the future of wind power in Illinois. “There’s been recognition by everyone involved in the need for long-term contracts for new wind farms to support jobs in the state and also reduce pollution here,” Learner said.
Tags: American Wind Energy Association, Illinois Commerce Commission, Illinois Power Agency, Midwest, Midwest Wind Energy, Wind farms
Posted in Development, Green | 1 Comment »
Tuesday, November 30th, 2010
With the Patient Protection and Affordable Care Act now the law of the land, commercial real estate executives are waiting to see what impact the legislation will have on their business. Consensus is that the new healthcare law changes crucial demand drivers for real estate by introducing alternative models to deliver medical services. The potential to impact commercial real estate lies in the fact that as many as 32 million additional Americans will receive coverage when the law becomes fully implemented in 2014. They will need a place to receive healthcare.
In a white paper written by Kenneth Meyer and Rob Grossman, Principals with Deloitte Consulting LLP, the authors note that “Using an industry multiplier of 1.9 SF required per patient to estimate the net effect of additional patients on space utilization, it can be estimated that 64 million SF will be required to meet the increased demand. Since the demand for additional medical space will begin almost immediately, the industry cannot afford a long wait due to development of new medical office buildings, nor can the industry continue to thrive by building more square footage without addressing current square foot absorption.”
To fill growing demand, retail locations are becoming increasingly important to healthcare, especially wellness centers, preventive care clinics and urgent care clinics -a new and emerging trend. As of February of 2010, there are approximately 1,200 retail clinics in the United States. “CVS leads the market with 569 retail clinics in 25 states and the District of Columbia,” according to the authors. “Recent changes in healthcare legislation should help to drive demand and support profitability. Retail space dedicated to health education could see a boost in the near future.”
Healthcare providers present diversity in a tenant mix and can protect the owner against shifting market conditions. “A recent study of Fitch-rated Real Estate Investment Trusts (REITs) in the U.S. further illustrated the strength of the healthcare real estate sector,” according to Meyer and Grossman. “In 2009, Healthcare REITs were the only property type that did not receive a downgrade by Fitch. In fact, during that same time period two Healthcare REITs actually received ratings upgrades.”
Tags: commercial real estate, healthcare reform, Medical office buildings, Patient Protection and Affordable Care Act
Posted in Development, Financing, Office | No Comments »
Monday, November 29th, 2010
Celebrity architect Helmut Jahn has created a vision for redeveloping Chicago’s Navy Pier, which celebrates its 100th anniversary in 2016. Writing in the Chicago Tribune about Jahn’s plan, architecture critic Blair Kamin says “Yes, it’s over the top and, in all likelihood, ridiculously expensive. But it’s full of creative sparks — precisely what was missing from the largely predictable list of recommendations made by a visiting panel of developers in conjunction with the news about the pier’s revamp. Think of it as a conversation starter, one that kick starts the civic debate over Chicago’s first signature public work of the post-Daley era. So what if the twisting, 2,000-foot Chicago Spire is dead? Now, Chicago can channel every ounce of its civic energy into rebuilding and re-conceiving the ramrod straight, 3,300-foot-long pier.”
Jahn’s proposal includes the following:
- Build a two-story retail addition to the south of the pier’s existing corridors. This would follow the canopy’s curve and be topped by a lengthy skylight.
- Expand the Dock Street pedestrian walkway to the south and add small angled piers for pleasure boats.
- Build a 500-foot-tall Ferris wheel and orient it to the east and west.
- Expand the park at the west end to include a 1,300 lower-level garage and build ramps to accommodate CTA buses.
“Even if his plan is a relic from the Age of Excess that’s seeing the light of day in the Age of Austerity, it sets the architectural agenda, raising design issues that other architects who vie for this plum job will invariably have to address,” Kamin said. “A big design competition might yield fascinating ideas, yet it also might prove time-consuming and unwieldy. If, as expected, pier officials issue a request for proposals, it will be essential that they look not only for a powerful design but also an architect who can meld the practical and the visionary. Jahn’s heroic, imperfect plan is but a first step down that road.”
Tags: Blair Kamin, Daniel Burnham, Helmut Jahn, Navy Pier, Richard Daley
Posted in Development, General, Green, Industrial | No Comments »
Tuesday, November 23rd, 2010
Noted Chicago architect Ludwig Mies 
van der Rohe’s famous maxim “Less is more” should apply to ambitious plans for revamping Chicago’s Navy Pier, the city’s top tourist destination. Writing in the Chicago Tribune, architectural critic Blair Kamin says “The good news about the latest vision for the pier is that it discards the excesses of a 2006 plan that would have layered a roller coaster and an indoor water park onto an attraction that already resembles a shopping mall or a carnival midway. But it is one thing to ditch a bad plan and another thing to find the creative spark necessary to bring order and élan to Navy Pier’s architectural mishmash.”
A bold design framework is needed for the 3,300-foot-long pier, which was a vision of Daniel Burnham and was completed in 1916. The Urban Land Institute has issued a 40-page report with recommendations that address the ways in which the Metropolitan Pier and Exposition Authority could enhance the Pier, which has seen a fall in attendance to 8,000,000 annually from a high of 9,000,000 in 2000. According to Kamin, “The report’s principal recommendations lack flashes of insight about the great public work, which originally consisted of classically inspired buildings framing freight and passenger sheds. The sheds disappeared as part of the pier’s $225 million makeover, completed in 1995. Still, the Urban Land Institute is offering a few promising ideas that could refresh the pier’s identity as a public pleasure ground and replace its once-graceful appearance.”
Among the recommendations are replacing the white fabric-roofed Skyline Stage with a 950-seat venue that would expand the Chicago Shakespeare Theater. This has the potential to restore the pier’s clean-lined silhouette. Another is to replace the current Ferris wheel with a larger one similar to the London Eye. Some of the elevated pier’s edges might be redesigned, giving visitors access to Lake Michigan.
“But as the report itself acknowledges, the next step is for architects to translate these vague notions into a reality that is both user friendly and visually striking,” Kamin says. “Fortunately, pier officials say they will consider asking Chicago’s architects to submit redesign proposals based on the report. And well they should, given that the city has a mother lode of design talent that’s been sidelined by the construction downturn. It’s time to use that talent – and to use this fresh opportunity to make Navy Pier the great public space it ought to be.”
Tags: architecture, Blair Kamin, Chicago, Lake Michigan, London Eye, Navy Pier, Urban Land Institute
Posted in Development, General, Industrial, Student Housing | No Comments »
Monday, November 15th, 2010
A financing vehicle that has been used in Europe since it was invented in Prussia in 1769 is finding its way to American shores as a replacement for commercial mortgage-backed securities (CMBS). The vehicle is known as covered bonds, which is a securitized debt instrument backed by a pool of top-quality assets, primarily mortgages. What is different about covered bonds is that the assets – known as a cover pool – are maintained on the issuer’s balance sheet. This acts as a safety measure because the issuer is less likely to underwrite loans that carry significant risk.
Currently, the United States has no established market for covered bonds, although they are a $3 trillion business in Europe. In July, the House Financial Services Committee approved a bill that would establish a regulatory framework for covered bonds. Although the bill just missed being included in the Dodd-Frank financial reform overhaul, the consensus is that the legislation could win House and Senate approval in 2011.
“We have seen the difficulties wrought by the complexity of securitizations,” said Bert Ely, a financial and monetary policy consultant. “Covered bonds, on the other hand, are a very clean and simple tool. A bank makes a loan, keeps the loan on its books, and issues a covered bond. There is no sale and resale of mortgages.” With a covered bond, several elements protect the bondholder. All assets in the covered pool are subject to monthly monitoring by an independent third party. If one of the loans becomes non-performing, the issuer must remove it and replace it with a loan that is performing. Thanks to the safety features, the majority of covered bonds enjoy a triple-A rating.
Despite the fact that many in the investment community support covered bonds, the Federal Deposit Insurance Company (FDIC) has some concerns about them. Primary is the fact that the pools are over-collateralized – sometimes by as much as three times the bonds’ face value. The FDIC wants access to these assets when a bankruptcy occurs. The FDIC argues that if the cover pools protect the bulk of the banks’ assets from being claimed, the depositors are being asked to take on too much risk. “We support covered bond legislation, but not at the expense of our obligation to protect the deposit insurance fund,” said the FDIC’s Michael H. Krimminger.
Tags: bonds, Canada, capital markets, commercial real estate, Europe, Fannie Mae, Federal Deposit Insurance Company, Freddie Mac, mortgage, residential market, securitized real estate market, Triple A ratings, Wall Street
Posted in Development, Economics, Financing, Residential | No Comments »
Thursday, November 4th, 2010
A total of $1.4 trillion worth of commercial real estate loans are coming due between now and 2014, with the majority on small- and medium-sized buildings that are either under water or very nearly there. Writing for the Huffington Post, Daphne Wysham says that “crisis breeds opportunity. It turns out that buildings are responsible for about half of America’s emissions of greenhouse gases.” Wysham, a fellow and board member of the Institute for Policy Studies, is founder and co-director of the Sustainable Energy and Economy Network, as well as founder and co-host of Earthbeat Radio, which airs on 54 stations in the United States and Canada.
According to Wysham, “Here’s the crazy truth: With a national effort to boost energy efficiency, we could actually meet the building sector’s greenhouse gas emissions target set by the Obama administration for the next few years, put 1,300,000 million workers – 600,000 of them construction workers, 20 percent of whom are unemployed – back to work and dodge the next wave of mortgage meltdowns. We could make a painless downpayment on our emissions reductions goals, while giving some of our beleaguered businesses a tax break and saving money we’re now squandering on wasted energy.”
Architects and researchers from Architecture 2020 have devised what they call the “CRE Solution”, which would allow small business and business owners in danger of default a multi-year tax break if they retrofit to improve energy efficiency. “The more energy efficient the building becomes, the greater the tax break,” Wysham said. “Commercial building owners could trade or sell these tax deductions to investors, who would be invested in putting our highly skilled construction workers back on the job, retrofitting these properties. For the $6 billion in tax breaks the federal government would provide for this purpose, Uncle Sam would receive $10 billion back in net federal tax revenue, while state and local governments netted $5.25 billion.”
Tags: CRE, democrats, Greenhouse gases, Huffington Post, Obama administration, Republicans, sustainable design, sustainable economic growth, underwater
Posted in Development, Green | No Comments »
Tuesday, November 2nd, 2010
Eight Chicago taverns – all built more than a century ago by the Joseph Schlitz Brewing Company and which bear the brewer’s signature globe logo – may be given landmark status by the City Council. The former brewery-tied houses were built in the Queen Anne or Baroque styles and “convey important aspects of the ethnic, social and commercial life of the city’s neighborhoods,” according to the Chicago Department of Zoning & Land Use Planning. The distinctive buildings are reminders of the bygone era when brewers like Schlitz owned and operated their own taverns. The city’s Commission on Chicago Landmarks says the process of granting the eight buildings landmark status could take as long as a year.
Although some building owners are resisting landmark status, Thomas Magee, who owns Mac’s American Pub at 1801 West Division Street, is eager to receive the landmark designation. “Obviously, there’s concern because any time I’d want to make a change, I’d have to get (city) approval,” he said. But, “it’s a beautiful old building and I want to keep it that way. I’m not opposed to it.” Magee’s pub was built in 1884 and was one of 57 taverns that the Milwaukee-based brewer operated in Chicago. After Prohibition was repealed, the state banned brewer-owned bars and Schlitz was forced to sell its buildings. Today, only 10 of the Schlitz buildings remain, according to the Chicago Bar Project.
In addition to the Division Street building, the proposed landmarks include Schuba’s at 3159 North Southport; 11400 South Front Avenue; 3456 South Western Avenue; 958 West 69th Street; 2159 West Belmont Avenue; 1944 North Oakley Avenue; and 5120 North Broadway. According to James Peters, president of Landmarks Illinois, “Usually taverns are just simple commercial structures, and these have a lot of attention to craftsmanship and structure. This shows that there’s some really great architecture in the neighborhoods.”
Tags: Chicago, Chicago City Council, Illinois, landmark
Posted in Development, General | No Comments »
Monday, November 1st, 2010
The way America has been built in the last half century has assured that a majority of the population is dependent on the car to get to work, to school, to shop or virtually any place. This is the opinion of Andres Duany and Jeff Speck, who are city planners and co-authors of “The Smart Growth Manual” as well as “Suburban Nation: The Rise of Sprawl and the Decline of the American Dream”, writing in a recent opinion piece in the Washington Post. “This is sprawl, the dominant American pattern of settlement, and sprawl, more than anything else, has cemented our relationship with oil,” according to the authors.
Urban planners have been working for more than 30 years to find a solution to get people out of their cars and create environments that are walkable. Suburban sprawl has been identified as contributing to some of the major challenges Americans face – oil dependency, climate change and soaring healthcare costs. According to the authors, discussions of climate change and our carbon footprint are not often mentioned in terms of city planning. “The sustainable-building movement is fixated on gizmos – ‘what can I buy for my house to make it greener?’ – but the thing that really matters is location,” the authors say. A study has found that households in downtown Chicago produce just 25 percent of the greenhouse gases as households in suburban Kane County. That has less to do with energy-efficient appliances, but the need of suburbanites to spend so much time in their cars.
“Ending our love affair with the automobile, no matter how unhealthy it has become, seems overwhelmingly disruptive. Although more and wider roads lead only to more congestion, states are loath to reject federal highway dollars such as those offered in economic stimulus packages. Highways are easy things to spend money on, so who cares if what they stimulate is sprawl?” Duany and Speck note.
Tags: carbon footprint, climate change, healthcare cost, suburban
Posted in Development, Green, Residential | No Comments »
Wednesday, October 27th, 2010
Google is expanding its horizons by partnering with Good Energies, a New York-based investment firm that specializes in renewable energy, to create a $5 billion, 350-mile-long transmission grid to support offshore wind farms along the Atlantic Seaboard.
Each of the two firms has agreed to take 37.5 percent of the equity portion of the project – named the Atlantic Wind Connection — and are looking for additional investors. Trans-Elect, a Maryland-based transmission-line company, hopes to begin grid construction as soon as 2013.
“Conceptually, it looks to me to be one of the most interesting transmission projects that I’ve ever seen walk through the door,” according to Jeff Wellinghoff, chairman of the Federal Energy Regulatory Commission, which administers interstate electricity transmission. “It provides a gathering point for offshore wind for multiple projects up and down the coast.” The proposed grid will have a capacity of 6,000 megawatts, the equivalent of five large nuclear power plants. The system will be located in shallow trenches on the seabed in federal waters just 15 to 20 miles offshore and stretch from northern New Jersey to Norfolk, VA. It will harvest power from wind turbines situated where the winds are strong and the towers will be largely out of sight. Richard L. Needham, director of Google’s green business operations group, described the plan as “innovative and audacious. It’s an opportunity to kick-start this industry and, long term, provide a way for the mid-Atlantic states to meet their renewable energy goals.”
Trans-Elect says that the first phase – stretching from northern New Jersey, to Rehoboth Beach, DE – could be completed by 2016, with the rest of the system becoming operational in 2021. Using offshore wind to generate electricity is more expensive than coal, natural gas or onshore wind, though experts predict offshore turbines will be used more frequently to meet state requirements for locally generated renewable energy. James J. Hoecker, former chairman of the Federal Energy Regulatory Commission, described the Atlantic transmission grid as “a necessary piece of what the Eastern governors have been talking about in terms of taking advantage of offshore wind.”
Tags: fossil fuels, Google, Green, Green business, offshore winds, renewable energy, sustainability, Trans-Elect, wind farm
Posted in Development, Green | No Comments »
Thursday, October 21st, 2010
A new green initiative is joining the White House’s already famous organic vegetable garden. President Barack Obama plans to install solar panels on top of the White House’s living quarters to heat water and provide power to some of the historic mansion. The panels are scheduled to be in place by the spring of 2011, according to Energy Secretary Steven Chu.
Former President Jimmy Carter installed a $30,000 solar water-heating system for West Wing offices during 1976; they were removed 10 years later. George W. Bush installed a solar system that provided power to a maintenance building, parts of the White House and to heat water for the swimming pool. President Obama, who is a strong supporter of renewable energy, has been under pressure from the solar industry and environmental activists like 350.org to lead by example. According to White House sources, solar panels have been under discussion since the Obama family first took up residence at 1600 Pennsylvania Avenue.
Global warming activists from 350.org brought one of Jimmy Carter’s solar panels from Unity College in Maine to Washington, D.C., in an effort to persuade President Obama and other world leaders to install panels on their residences. Bill McKibben, 350.org’s founder, believes the administration is doing the right thing. “If it has anything like the effect of the White House garden, it could be a trigger for a wave of solar installations across the country and around the world,” McKibben said.
The price tag for the White House solar project is not yet known as it is still in the design phase. Another question is how much electricity it will generate. According to a survey of available roof space, the system has the potential to include 25 to 75 panels and could produce up to 19,700 kilowatt hours of annual electricity. A typical household would save $3,200 a year on their electricity bill and $1,000 on heating water.
“Around the world, the White House is a symbol of freedom and democracy,” Chu said. “It should also be a symbol of America’s commitment to a clean energy future.”
Tags: global warming, organic farm, President Barack Obama, renewable energy, Senate, solar panels, White House
Posted in Development, Green, Residential | 1 Comment »