Case Study: Highlands' Garden Village Implements New Urbanism Principles

Jonathan Rose Companies LLC

Implementation of New Urbanism:
Case Study: Highlands‟ Garden Village

Highlands’ Garden Village Introduction


Environmental Responsibility

Himalayan Village LEED Rating: 29
Himalayan Village
LEED Green Building Rating System

Project Checklist
14 Pos s ible Points Points Earned
Sustainable Sites

Y Prereq 1 Erosion & Sedimentation Control Required

Y ? N Credit 1 Site Selection 1 1
Y ? N Credit 2 Urban Redevelopment 1 0
Y
Y ? N Credit 3 Brownfield Redevelopment 1 0
Y ? N Credit 4.1 Alternative Transportation, Public Transportation Access 1 0
Y ? N Credit 4.2 Alternative Transportation, Bicy cle Storage 1 0
Y ? N Credit 4.3 Alternative Transportation, Alternativ e Fuel Ref ueling Stations 1 0
Y ? N Credit 4.4 Alternative Transportation, Parking Capacity 1 1
Y ? N Credit 5.1 Reduced Site Disturbance, Protect or Restore Open Space 1 1
Y ? N Credit 5.2 Reduced Site Disturbance, Dev elopment Footprint 1 1
Y ? N Credit 6.1 Stormwater Management, Rate or Quantity 1 0
Y ? N Credit 6.2 Stormwater Management, Treatment 1 0
Y Y N Credit 7.1 Landscape & Exterior Design to Reduce Heat Islands, NonRoof 1 0
Y Y N Credit 7.2 Landscape & Exterior Design to Reduce Heat Islands, Roof 1 0
Y ? N Credit 8 Light Pollution Reduction 1 1
5
Water Efficiency 5 Poss ible Points

Y ? N Credit 1.1 Water Efficient Landscaping, Reduce by 50% 1 1
Y ? N Credit 1.2 Water Efficient Landscaping, No Potable Use or No Irrigation 1 0
Y ? N Credit 2 Innovative Wastewater Technologies 1 0
Y ? N Credit 3.1 Water Use Reduction, 20% Reduction 1 1
Y ? N Credit 3.2 Water Use Reduction, 30% Reduction 1 1
3
Energy & Atmosphere 17 Pos s ible Points Points Earned

Y Prereq 1 Fundamental Building Systems Commissioning Required

Y Prereq 2 Minimum Energy Performance Required

Y Prereq 3 CFC Reduction in HVAC&R Equipment Required

Y ? N Credit 1.1 Optimize Energy Performance, 20% New / 10% Existing 2 0
Y ? N Credit 2.1 Renewable Energy, 5% 1 1
Y ? N Credit 3 Additional Commissioning 1 0
Y ? N Credit 4 Ozone Depletion 1 1
Y ? N Credit 5 Measurement & Verification 1 0
Y ? N Credit 6 Green Power 1 1
5
Materials & Resources 13 Pos s ible Points Points Earned

Y Prereq 1 Storage & Collection of Recyclables Required
Y ? N Credit 1.1 Building Reuse, Maintain 75% of Existing Shell 1 1
Y ? N Credit 1.2 Building Reuse, Maintain of Existing Shell 1 1
Y ? N Credit 1.3 Building Reuse, Maintain 100% of Shell & 50% Non-Shell 1 1
Y ? N Credit 2.1 Construction Waste Management, Div ert 50% 1 1
Y ? N Credit 2.2 Construction Waste Management, Div ert 75% 1 1
Y ? N Credit 3.1 Resource Reuse, Specif y 5% 1 1
Y ? N Credit 3.2 Resource Reuse, Specif y 10% 1 1
Y ? N Credit 4.1 Recycled Content, Specify 25% 1 1
Y ? N Credit 4.2 Recycled Content, Specify 50% 1 1
Y ? N Credit 5.1 Local/Regional Materials, 20% Manufactured Locally 1 1
Y ? N Credit 5.2 Local/Regional Materials, of 20% Above, 50% Harves ted Locally 1 1
Y ? N Credit 6 Rapidly Renewable Materials 1 1
Y ? N Credit 7 Certified Wood 1 0
12
Indoor Environmental Quality 15 Pos s ible Points

Y Prereq 1 Minimum IAQ Performance Required

Y Prereq 2 Environmental Tobacco Smoke (ETS) Control Required

Y ? N Credit 1 Carbon Dioxide (CO 2 ) Monitoring 1 0
Y Y N Credit 2 Increase Ventilation Effectiveness 1 0
Y ? N Credit 3.1 Construction IAQ Management Plan, During Construction 1 0
Y ? N Credit 3.2 Construction IAQ Management Plan, Bef ore Occupancy 1 0
Y ? N Credit 4.1 Low-Emitting Materials, Adhesiv es & Sealants 1 1
Y ? N Credit 4.2 Low-Emitting Materials, Paints 1 1
Y ? N Credit 4.3 Low-Emitting Materials, Carpet 1 1
Y ? N Credit 4.4 Low-Emitting Materials, Composite Wood 1 0
Y ? N Credit 5 Indoor Chemical & Pollutant Source Control 1 0
Y ? N Credit 6.1 Controllability of Systems, Perimeter 1 0
Y ? N Credit 6.2 Controllability of Systems, Non-Perimeter 1 0
Y ? N Credit 7.1 Thermal Comfort, Comply with ASHRAE 55-1992 1 0
Y ? N Credit 7.2 Thermal Comfort, Permanent Monitoring Sy stems 1 0
Y ? N Credit 8.1 Daylight & Views, Day light 75% of Spaces 1 0
Y ? N Credit 8.2 Daylight & Views, Views for 90% of Spaces 1 0
3
Innovation & Design Process 5 Poss ible Points

Y ? N Credit 1.1 Innovation in Design: Winrock Policy 1 1
Y ? N Credit 1.2 Innovation in Design: Roof and Cistern Assembly 1 0
Y ? N Credit 1.3 Innovation in Design: Economic Feasibility in Marketplace 1 0
Y ? N Credit 1.4 Innovation in Design: Prototypical Building Model 1 0
TM
Y ? N Credit 2 LEED Accredited Professional 1 0
1
Project Totals 69 Pos s ible Points

Ce rtifie d 26-32 points Silve r 33-38 points Gold 39-51 points Platinum 52-69 points 29


Highlands’ Garden Village Denver,CO

Highlands’ Garden Village Financing

Highlands Garden Village

Project Cost $101.8 million
Project Size 27.39 acres

Site Acquisition, Infrastructure,
Demolition, Planning
and Open Space $15.5 million
Single Family, Town Home $25.8 million
Cohousing $ 8.3 million
Live/work Lofts $ 7.8 million
Senior $ 7.0 million
Multifamily $10.0 million
Commercial $18.5 million
School $ 5.8 million
Plaza and Entrance Park $ 1.0 million
Theater $ 2.1 million

Total Housing Units 306
Single Family 52
Carriage Homes 20
Town Homes/Condominiums 38
Senior 63
Multifamily 74
Co-housing 33
Live/work Lofts 26

Commercial Area 75,000 sq. ft.
School 43,000 sq. ft
Civic Uses: Historic Elitch
Theater and Carousel Building 20,000 sq. ft.
Open Space 140,000 sq. ft

Highlands’ Garden Village History


•Mary Elitch and Her Bears


•Elitch Formal Gardens

Highlands’ Garden Village Planning Process

Highlands’ Garden Village
Perry-Rose LLC & Rose Companies Management LLC Housing

Co-Housing Town Homes
Single Family
Multi Family

Highlands’ Garden Village Single Family Housing

Highlands’ Garden Village Townhomes

Highlands’ Garden Village Live-Work Housing

Highlands’ Garden Village Co-Housing

Highlands’ Garden Village Multi-Family Housing

Highlands’ Garden Village Senior Housing

Highlands’ Garden Village Commercial

Highlands’ Garden Village Public Realm

Careful Attention to the Public Realm:
• Utilization of the historic and natural features of the
site guided the planning and design
• Building narrower streets than had been previously
permitted in Denver
• Inclusion of diagonal street parking
• Streets that end in vistas
• Attention to the interaction of the civic space and
the sense of place.


Shared Uses of
Theatre Plaza

Highlands’ Garden Village Green Features

HGV Has Been a Pioneer in Green Building:
• 30 Tons of Concrete from the Original Park were Recycled into
the HGV Road Base

• Sunflower Market Building is a Participant in the LEED Core
and Shell Pilot Program and is LEED Gold Certified

• Single Family Homes Were Built to Exceed EnergyStar and
Colorado Built Green Requirements

• Multi Family Buildings Were Built Using Recycled Materials,
Low VOC Finishes and High Efficiency Mechanical Units and
Windows.


Additional Environmentally Sensitive Features:
• All Public Spaces Powered by Windsource or PV

• Xeriscaped Tree Lawns

• Native Buffalo Grass in Theatre Plaza

• The Preservation of Existing Trees in Laying Out the
Development

• Reuse of Existing Buildings

• High Density Allowing an Increased Population to Live Closer
to Downtown.

• Locating Neighborhood Retail within Walking Distance of
High Density Living


Transportation Use
250 Household Use

200

125
150
Million BTU
per Year 87 35
per Household 100
26
50 101 101
71 71
0
Suburban Avg Suburban Urban Avg Urban Green
(226 Mbtu) Green (136 Mbtu) (97 Mbtu)
(158 Mbtu)
Household Type
© Jonathan Rose & Companies, LLC


Water Efficient Buffalo Grass Uses 1/6th the Water of
Blue Grass


600000

500000

400000 Gallons per Year

300000

200000

100000

0
Blue Grass Buffalo Grass


$45,000

$40,000

$35,000

$30,000

$25,000 Cost of installing Buffalo
Grass (20,000 SF)
$20,000
Water Savings ($1083/year)
$15,000

$10,000

$5,000

$0
Replacement New
(39 yr payback) (7 yr payback)


Experiments in Xeriscaped Tree Lawns


HGV Sunflower Market Building is
LEED GOLD Certified


Success With Public/Private Partnerships:
• Developers worked closely with DURA to structure TIF
financing for HGV infrastructures.

• A Citizen Design Review Board reviewed and gave input into
all building designs.

• Developers provided support to a not-for-profit to renovate the
historic theatre.

• The Master Plan was informed by a public survey requesting
senior housing, mixed uses, historic preservation, and more.

• In Partnership with the Denver Botanic Gardens the original
garden entry was recreated.

• The grounds are maintained in partnership with a group of
resident volunteers.


Risk Mitigation Strategies:
• Phasing
• Sharing Risk and Return with Home Builders
• Flexible PUD


Acquisition & Development Financing

Loans, TIF & Equity

SOURCES Amount %

Acquisition and Development (A&D) Loan
Phase I $ 4,600,000
Phase II $ 3,420,000
Phase III $ 555,000
Total A&D Loan $ 8,575,000 48.86%

Tax Increment Financing Annual Payments $ 590,644
Tax increment Bond Issue $ 4,400,000 28.43%
Developer Equity $ 3,933,958 22.41%
Misc Income $ 51,774 0.29%
Total SOURCES $ 17,551,376 100.00%


Land Sales, TIF
SOURCES Amount %
Single Family Lots $ 2,484,875 13.08%
Townhouse Lots $ 756,450 3.98%
Profit Sharing on SF & TH $ 3,428,663 18.05%
Sale of Tennyson Site $ 900,000 4.74%
Sale of Co-housing Site $ 752,500 3.96%
Profit Share Cohousing $ 265,076 1.40%
Sale Senior Site $ 687,000 3.62%
Sale Multi-family Site $ 1,093,881 5.76%
Sale Plaza Loft Sites $ 695,000 3.66%
Sale of Commercial Site $ 1,726,498 9.09%
Sale N 38th Office $ 225,000 1.18%
Sale of Tap Credits $ 177,191 0.93%
TIF $ 5,750,000 30.27%
Misc Income $ 51,774 0.27%
TOTAL Sources $ 18,993,908 100.00%

USES Amount %
Acquisition (Land) Cost $ 2,415,859 12.72%
Demolition and Environmental
Remediation $ 1,241,628 6.54%
Infrastructure $ 3,648,532 19.21%
Parks & Open Space $ 1,681,140 8.85%
Theatre $ 2,074,262 10.92%
Carousel $ 323,839 1.70%
Permits & Fees $ 169,720 0.89%
Professional Fees $ 1,840,576 9.69%
Operating Expenses $ 734,390 3.87%
Bank Loan Fee $ 180,003 0.95%
Interest $ 252,844 1.33%
Marketing $ 199,495 1.05%
TIF Bond Costs $ 553,662 2.91%
Development Fee $ 2,235,426 11.77%
TOTAL Uses $ 17,551,376
Profit $ 1,422,532 7.59%
TOTAL $ 18,993,908 100.00%

Single Family and
Townhome Sales

REVENUES Amount % Per Unit
Sales $ 25,849,791.00

EXPENSES
Hard Cost $ 10,791,241.00 41.75% $ 119,902.68
Soft Costs $ -
Legal/ Admin $ 94,779.00 0.37% $ 1,053.10
Permits & Fees $ 629,967.00 2.44% $ 6,999.63
Design & Engineering $ 296,173.00 1.15% $ 3,290.81
Site Development $ 59,461.00 0.23% $ 660.68
Landscape $ 286,927.00 1.11% $ 3,188.08
Land Cost $ 3,194,630.00 12.36% $ 35,495.89
Marketing $ 1,063,838.00 4.12% $ 11,820.42
Construction
Supervision $ 626,223.00 2.42% $ 6,958.03
Financing $ 790,210.00 3.06% $ 8,780.11
Development Fee $ 1,777,446.00 6.88% $ 19,749.40
TOTAL USES $ 19,610,895.00 $ 217,898.83
Profit $ 6,238,896.00 24.14% $ 69,321.07
TOTAL $ 25,849,791.00 100.00% $ 287,219.90

IRR 27.00%


Low est.
$450,000 High est.
Low actual
$400,000 High actual
$350,000
$300,000
$250,000
Sales Price
$200,000
$150,000
$100,000
$50,000
$0
Single Family Townhouses Co-housing
Housing Type


Cottage Hill Senior Apartments

Sources and Uses of Funds Total %

Sources
Permanent Loans $ 4,134,997.00 58.5%
Home Loans $ 795,000.00 11.3%
Developer Equity $ 15,769.00 0.2%
Tax Credit Equity $ 1,561,132.00 22.1%
Development Fee Deferral $ 381,000.00 5.4%
LOC $ 174,700.00 2.5%
Total Sources $ 7,062,598.00 100.0%

Uses
Acquisition Costs $ 687,000.00 9.7%
Construction Costs $ 5,007,305.00 70.9%
Financing Costs $ 442,205.00 6.3%
Development Costs $ 733,388.00 10.4%
Reserves $ 192,700.00 2.7%
Total Uses $ 7,062,598.00 100.0%

Annual Cash on Cash Return 9.4%
IRR 8.2%


Trocadero Apartments

Sources and Uses of Funds Total %

Sources
Permanent Loans $ 7,613,100.00 74.8%
Home Loans $ 398,000.00 3.9%
Developer Equity $ 35,392.98 0.3%
Tax Credit Equity $ 1,734,256.02 17.0%
Development Fee Deferral $ - 0.0%
LOC 4.0%
Total Sources $ 10,184,011.00 100.0%

Uses
Acquisition Costs $ 1,092,764.00 5.9%
Construction Costs $ 7,060,553.00 69.3%
Financing Costs $ 811,079.00 8.0%
Development Costs $ 696,353.00 6.8%
Reserves $ 523,262.00 5.1%
Total Uses $ 10,184,011.00 100.0%

IRR 17.0%


HGV Commercial

Sources and Uses of Funds Total % PSf

Sources
Equity $ 6,500,000 35%
Permanent Loan $ 12,000,000 65%
Total Sources $ 18,500,000 100%

Uses
Land Costs $ 1,772,700 10% 5.02
Hard Costs $ 10,629,000 57% 145.60
Tenant Improvements $ 1,982,000 11%
Architecture & Engineering $ 862,300 5%
Legal & Accounting $ 224,000 1%
Carrying Charges & Financing Fees $ 1,500,000 8%
Development Fee $ 1,530,000 8%
Total Uses $ 18,500,000 100%

IRR 11%

Highlands’ Garden Village Conclusion

CNU-Highlands Garden Village
Ron Tilton, President
FirstBank of Denver
ph. (303)595-2403
June 12, 2009

“New Rules”
• Commercial Real Estate (CRE) Guidelines: 300%
of Capital limitations are being enforced by
regulators
• CMBS Loan Maturities peaking in 2013 & 2014
and the impact on closure of this market
• Future Inflationary Concerns will impact long term
rates and available credit capacity
• The credit culture & “over exuberance” during the
last 10 years and the resulting losses, have pushed
underwriting criteria back in time.

What‟s In & What‟s Out

• LTC & LTV…real cash equity is „in‟; hybrid equity is „out‟ (developer fee‟s,
market appreciation, lower cap rates, etc.)
• Guarantors are „in‟; non-recourse and limited recourse are „out‟
• Real presales are „in‟; spec or soft presales are „out‟ (real buyers vs. the fog-a-
mirror buyer with little money down & pre-qualified for a subprime loan)
• Rate floors are „in‟; LIBOR + 75 bp‟s & Prime minus pricing with no floor is
„out‟
• Experienced/veteran development teams are „in‟; inexperienced developers and
contractors are „out‟
• Horizontal & phased development is „in‟; large vertical, single stroke
development is „out‟
• 1.3 DSCR‟s are „in‟; projected lease up on increasing rent schedules is „out‟
• Well located development sites near jobs & transportation is „in‟; drive-til-you-
can-afford-it is „out‟
• Reasonable cap & vacancy rates are „in‟; sub-6 cap rates & 5% vacancy rates
are „out‟

Case Study: Highlands' Garden Village Implements New Urbanism Principles

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Case Study: Highlands' Garden Village Implements New Urbanism Principles