The Continual Rise in Mixed-Use Developments

On Behalf of | Aug 3, 2022 | Environmental And Natural Resources Law, Land Use Law

Real estate developments are like any other commercial industry; it shifts and shapes their projects to the needs of their consumers. Not only that, but developers also often anticipate the needs and reinvent their projects to reflect the future desires of their customers as well.

It makes sense that many project leaders are redefining “mixed-use” developments to reflect a more tailored view of what Oregon residents want.

For example, Seattle developer Security Properties kicked off a mixed-use development that offered an area where residents could live, eat, work, and shop – all on a singular 1.5-mile block in downtown Portland, Oregon, in 2020. It wasn’t about squishing all these aspects into a single space, but instead, it would give accessibility to what these residents need in a localized spot.

And the global pandemic only further shaped the need for these multifunctional spaces where residents and businesses can thrive in 2022. A recent project was announced in Portland’s Goose Hollow neighborhood where there will be over 200 affordable housing units and some two-story townhomes. It was a unique process as the developers had to shift locations several times and work through financial hurdles along the way.

This newest example illustrates the frustrations that come with most developments – but especially with mixed-use projects. How can future developers use these examples as lessons for their own mixed-use developments?

The early stages

Most project managers know that hard work starts before you break ground. It is all about the planning, preparation, and permit applications to ensure the project can even begin. In the Goose Hollow example, the project’s team went through multiple iterations and locations before they were able to be approved by the Portland Design Commission.

First, it is critical to ensure that the mixed-use development system is right for your project. In these types of constructions, there are more hurdles and permits to attach to, especially if you are building from the ground up. There will likely be more government say of what the land use is if you intend to make your project located in a highly urban area.

Second, if mixed-use is the best route for a project, then you may want to review city plans and any development incentives to help move your project through the permit process and obtain the land use approvals.

According to the Commercial and Mixed-Use Code Handbook, many Oregon communities use urban renewal districts to fund these mixed-use developments in town cores and other commercial areas. For example, Portland may use development incentives such as:

  • Tax increment financing that provides funds for land acquisition and project development in targeted areas
  • Tax abatements for the housing portion of a mixed-use project
  • Permit fee reduction in targeted areas
  • System development fee reduction or waiver in targeted areas

To obtain these incentives, you would have to work closely with the city officials and local representatives to ensure that this project could either revitalize the city or stimulate growth in the local economy.

There is the possibility of “bonus” incentives if you have certain features in a project. One bonus incentive in Portland includes earning 1005 of the allowed bonus floor area in a given zone if you dedicated 25% of the bonus floor to rents affordable to households earning 80% of the median family income.

The “Red Tape” Of Mixed-Use Developments

Alongside permits and approvals, there is a strong likelihood that the community or local officials will want to review or “audit” the project to determine if there are any glaring issues that need to be solved in accordance with their regulations.

A hypothetical problem could be the development of an area with a high level of pedestrians. The city may show concerns over if the project can accommodate vehicles while remaining friendly to walking residents.

As the project manager or leader, you would show how you would identify if any areas were vehicle-dependent and then see how you can layout the property to ensure that the storefronts are convenient for pedestrians. Next, your team would have to consider how to accommodate any automobile-dependent areas and create a “transition” zone between the heavy walking areas and the needed services. You may have to work around the land zoning and consider the safest design for the locals.

While this is a very simple hypothetical, it illustrates the types of questions and concerns people will ask during the process. Even if you file and approve every single permit, there will probably be a hiccup to address either a design element, safety feature or a construction component that is unexpected.

It is critical to respond to these moments with thoughtfulness and logic. Working around red-tape regulations or pestering questions is not easy, but it’s mandatory. You have to balance many elements in mixed-use projects, and it is best to find where you can compromise and work around others’ concerns.

Along with land use, you may have to approach environmental regulations under certain developments – especially if there is an operation that produces a lot of waste. In these cases, you will want to play by the book completely. You need to ensure you’re in compliance with anything such as:

  • Opening a new site
  • Expanding existing landfills
  • Constructing transfer stations and facilities
  • Maintaining underground storage tanks
  • Contracting or franchising with local government

You will need permits, proper disposal methods, and adjusting the costs to reflect these mandatory steps.

First Steps Towards Construction

After addressing the preparation and red tape around a project, you will have to ensure you have proper financing and a team ready to pick up the construction. Once you have that, you’re well on your way to contributing to this rising development type.

A critical note is that support will be necessary throughout every step of the project. From conception to construction, you will need a team of people who understand the vision and are adaptable to any surprises along the way.

You will also need legal support to help prepare for compliance with local and federal regulations. Lawyers can also help dispute any issues with permits or applications that appear in the preparation stage. Just make sure to recruit the right person for your development’s needs.