Reshaping Suburbia

Sept. 1, 2005
Traditionally a focal point in downtowns, mixed-use projects branch out

It’s still 89 degrees F. at 8 p.m. on a stuffy, humid, breezeless June night in suburban Cleveland.

One would expect people to be holed up in their houses, air-conditioning blasting. But at the new Crocker Park development in Westlake, about 10 miles west of downtown Cleveland, the scene is anything but a hot, dusty ghost town.

Families gather on blankets on the center’s green spaces to savor picnic dinners as they enjoy live music performed by local entertainers. Shoppers drift from store to store along the development’s traditional main street. Hungry diners line up outside of bustling restaurants, fitting in their names on waiting lists that sometimes top an hour. As its developer, Stark Enterprises Inc. of Woodmere, OH, had hoped, the 75-acre Crocker Park is alive and thriving.

Strategically placed in a suburb that has no traditional downtown, Crocker Park has filled a niche, giving Westlake residents, as well as those in neighboring communities, an attractive, welcoming place to shop, dine, play, and, eventually, live and work. Plans for the evolving development, which encompasses 12 city blocks, include Class-A office space; a boutique hotel; luxury apartments; and high-end, single-family homes.

In the familiar manner of urban sprawl, it appears that the concept of “new urbanism” has firmly entrenched itself in the suburbs.

New urbanism, an international movement originally designed to revitalize cities’ flagging downtown areas, promotes the creation and restoration of diverse, walkable, compact, vibrant, mixed-use communities. These developments are composed of the same components as conventional development - retail, office, hospitality, and residential - but are planned and executed in a more integrated fashion in the form of complete communities.

“Think new urbanism with a small ‘u,’ ” says Les Morris, corporate public relations manager for the Indianapolis-based retail developer Simon Property Group. “This kind of development doesn’t have to be in the city.”

Developers have seized upon the concept of new urbanism in planning and installing mixed-use properties in communities nationwide. Alexandria, VA-based says the new breed of mixed-use projects “contain housing, work places, shops, entertainment, schools, parks, and civic facilities essential to the daily lives of the residents - all within easy walking distance of each other.”

A Shift in Locale

For the past 20 years or so, much mixed-use development has been focused in the nation’s cities - large-scale developments designed to revitalize and re-excite a downtown, such as the harbor areas in Baltimore or San Francisco. These and other developments brought people back downtown to play, live, and work.

While this concept remains alive and well in America’s city hubs, it now has planted firm roots in the suburbs, too, as Baby Boomers near empty-nest status and/or retirement and find themselves longing for a more walkable, urban environment in which to live, shop, work, and play.

The catch is that many of these Baby Boomers have become attached to the suburbs in which they live. They don’t want to take care of the big house or the sprawling lawn, but they also have become ingrained in the community and don’t necessarily want to leave it.

“There are a huge number of people reaching the point in their lives where they have the income, wealth, and flexibility for the ‘new urbanism’ kind of lifestyle. They want to live somewhere where they can walk to dinner, walk to the movies, ride their bikes, but they are attached to their community,” says Tom Gougeon, a principal at the Denver-based development company, Continuum Partners LLC.

It all comes down to demand, says Donald Stanek, director of sales and marketing for developer Intracorp San Diego. “The big driver of any evolution is not the product; it’s market demand,” he says. “It drives city planning. It drives development.”

In the infancy of the mixed-use marketing concept, practicality came into play, Stanek notes. That practicality has since morphed into the concept of lifestyle and further transformed into the fact that, as Stanek puts it, “people want a lot for their money.” They want prestige, but they also want convenience. This new generation of mixed-use developments can fill that niche.

Simply put: “People are changing their perception of how they want to live and work,” Stanek says.

Such live/work/play communities as Crocker Park; Continuum’s Belmar, a 104-acre downtown district that is under development for the City of Lakewood, CO; and Simon Property’s Coconut Point, a 166-acre mixed-use project in Estero/Bonita Springs, FL, give the key Boomer market the opportunity to live in an urban-designed setting that allows them one-stop access to many needs. “The confluence of shopping, entertainment, and residential is very alluring,” Morris says. “You can live, you can work, and you can be entertained without leaving one of these developments. We have insurance agents, dentists, and doctors, too. With gas now over $2 a gallon, it’s not such a bad concept.”

Beyond Lifestyle

But don’t call these projects “lifestyle centers,” Morris says. They are much more than that. These “all-in-one, mixed-use projects” are much larger than the traditional, primarily retail-based, open-air lifestyle center.

The Intl. Council of Shopping Centers (ICSC), New York City, defines a lifestyle center as an open-air project located near affluent residential neighborhoods that includes at least 50,000 square feet of retail space occupied by upscale national chain specialty stores.

Other key factors that make a lifestyle center a “multi-purpose leisure-time destination” include restaurants, entertainment, design ambience, and such amenities as fountains and street furniture.

While this sounds similar to projects like Crocker Park, Belmar, and Coconut Point, the total typical square footage range for lifestyle centers is between 150,000 to 500,000 square feet. Office space and residential offerings at these new centers push them well beyond that, Morris notes. “You’ve got a million square feet [on top of] a million square feet,” he says. “You need a significant amount of land to do one of these [developments].”

Concept in Action

Stark Enterprises’ description of Crocker Park notes that the project will span more than 1.7 million square feet when fully built out. It will include 900,000 square feet of residential space, 550,000 square feet of upscale retail and restaurants, and 250,000 square feet of Class-A office space.

In May, the developer submitted a proposal to the city of Westlake seeking approval to build two 6-story buildings that would include first-floor retail space, residential condominiums, and a boutique hotel on upper floors. The area was initially designated for a small department store or a cluster of retail shops, and will total approximately 250,000 square feet. Crocker Park’s Phase One opened in October.

Across the country in Lakewood, CO, developers have spent the past year rolling out the $750-million Belmar project, a new development that serves as the city’s downtown district. It opened in May 2004 and, by the end of this year, will offer 16 restaurants and cafés, 49 stores, and several service tenants, as well as numerous residential units available for purchase and rent.

At full build-out, Belmar will have 22 city blocks of stores, entertainment, office space, and residences: 1,300 homes for sale or rent; a Century Theatres 16-screen Cineplex; a Whole Foods Market grocery store; 900,000 square feet of Class-A office space; 175 stores; 9 acres of parks, plazas, and green spaces; and 9,000 parking spaces (free garage and surface). “It’s a true integration of retailing and other mixed-use [spaces],” Gougeon says. “It’s not just some new incarnation of retail.”

Down in south Florida, Simon Property is developing Town Center at Coconut Point, an open-air, mixed-use mainstreet regional shopping center that is part of a 482-acre, master-planned community named Coconut Point (located in Estero/Bonita Springs). The Town Center at Coconut Point will contain approximately 1.2 million square feet of retail space; 45,000 square feet of office condominiums; and 305 condominium units.

The Town Center at Coconut Point’s retail space is comprised of three components: the village section, the community center, and The Lakefront, which will contain casual and sit-down dining and shops. Gross costs are expected to approximate $242 million. The project is scheduled to open in phases between March and September 2006.

Modern suburban mixed-use development doesn’t necessarily involve residential, particularly in municipalities where a plentiful housing stock will feed business directly into massive retail and office complexes, such as Simon’s St. Johns Town Center on the outskirts of Jacksonville, FL; Clay Terrace in Carmel, IN; and Firewheel in Garland, TX. That’s not to say that Simon Property would rule out housing stock as a future component of these developments, however.

Where to Go from Here

Just as enclosed regional malls ruled the 1980s and 1990s, it seems open-air, mixed-use developments have cornered the current commercial market. But will it last? Developers say yes.

One reason is the growth of the new urbanism concept beyond downtown settings into the suburban markets, Gougeon says. Developers feel such projects with a good mix of vertical offerings have the potential to increase in value over time. Thanks to the office and residential components, they are more durable, more walkable, and more transit-oriented than regional shopping centers.

It comes down to the fact that no two of these mixed-use developments are exactly alike, Gougeon points out. “Even the best mall gets eclipsed. Even the best office park gets a stronger competitor. They are easily replicated,” he says. “These aren’t easily replicated. You are creating a mix that can’t be on every corner. You can’t create the exact same thing down the street. There’s no formula. You can use the principles of good urbanism, but there is no formula to plug it in. It differs from place to place.”

That’s why developers are taking the plunge into large-scale mixed-use projects. “We’re trying to build good long-term real estate assets,” Gougeon says. “We want to own things that appreciate in value in the long term, not lose their value. Projects like Belmar and other projects in the suburbs or downtown are the most durable. The places that aren’t one-dimensional are becoming more appealing. The remaking of existing suburbs, and the making of brand-new and better suburbs, are one of the more interesting things going on in the country.”

Robin Suttell ([email protected]), based in Cleveland, is contributing editor at Buildings magazine.

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