(facing page) The green promenade that organizes Mizner Park used to be the center walkway of the former Boca Raton Mall.
and buying power rose from $25.20 per week to $60.00 per week (Longstreth, 1997). The regional mall, a form that could provide the complexity and vitality of the urban experience without the grit and chaos of the central city, was the form that could capture this mass consumer market most effectively (Figure 1, next page). It offered a wide variety of consumer goods because large-scale development could accommodate large anchor store relocation from the downtown as well as smaller stores looking to reach customers making the auto trip for the anchor store (Leinberger, 2008). The automobile dictated the size and configuration of the regional mall more than any other form of retail development because retailers and developers believed that the accessibility of the site and adequate free parking were more important for stimulating sales than exterior architectural design (Longstreth, 1997). As a result, from the perspective of advertising, there was no need to have the building front and establish a relationship with the street. Retailers enjoyed the even distribution of parking spaces around a large lot because it kept walking distance to stores at a minimum.
The Greyfield Problem The modern retail landscape, which is a decentralized hierarchy of shopping center types and locations, is lined with dead or dying malls on greyfield sites. Greyfields are economically and architecturally obsolete properties with large swaths of parking that offer large infill redevelopment opportunities in below-average locations. They are commercial ventures that no longer generate income and dampen the public realm. Sobel has identified the processes by which malls become greyfield sites (Sobel, 2002). New and expanded centers with new retail formats and higher quality tenants compete in the market
usually lack owner investment in the property because the owner uses the losses as a tax shelter. Demographic market characteristics sometimes change in a way that dramatically reduces the buying power of the trade area for a greyfield property. Greyfields also lack the direct freeway access of more successful centers, which have located at new or extended highway interchanges.
Urbanizing Suburbia: The Greyfield Solution According to the Congress of the New Urbanism, there are five common redevelopment models for greyfields (CNU, 2005). These models are: single-use development, adaptive re-use, mall-plus, reinvestment, and the mixed-use town center or district. The mixed-use town center or district creates a dense, pedestrian-scaled center, with a sense of place where it previously did not exist. This article focuses on the mixed-use model because it strives to reinvigorate the public realm through infill development. It is an approach to development that recognizes that the car will not disappear and that suburbs will not become traditional urban centers, yet provides the convenience of suburbia and the liveliness of urban streetscapes.
The Challenge of Financing Large-Scale MixedUse Development The concept and the potential benefits of greyfield redevelopment are quite impressive but are ultimately meaningless if developers cannot secure financing to build these types of projects. There is no traditional practice of mixed-use finance. Historically, mixed-use was a term that described an older architectural vernacular that was financed by local investors (Lang, LeFurgy, & Hornburg, 2005). The challenge currently lies
public markets currently demand. Standardized product types are single-use projects that pose less risk due to simplicity and the long track record of repeated development (Leinberger, 2007). Trading on the public markets is a high volume business that demands common understanding and a definition of products among investors and analysts. Participants in the public markets want commoditized items that fit these definitions, otherwise they are deemed too risky and complicated. Similarly, real estate investment trusts (REITs) demanded the commoditization of real estate products. Since auto-oriented suburban development was the prevalent model of development in previous decades, these forms became the traded commodities. Non-conforming products, such as pedestrian-oriented mixed-use projects, do not get financing or require more expensive financing. A second reason that large-scale mixed-use projects are difficult to finance is that they have difficulty meeting four primary underwriting criteria used to assess all product types. These criteria are: the unleveraged yield on cost, the risk profile of the development, the developer track record, and the ability to pay for any construction cost overruns (Goodkin, 2006). Achieving a favorable unleveraged yield on cost is challenging because mixed-use districts typically require large upfront expenditures for the public space and infrastructure components that are essential in establishing the long-term value associated with a sense of place. This long-term value does not coincide with the time horizons of many capital providers. Large mixed-use infill projects require a critical mass in place or a high probability of reaching a critical mass within a short period in order to support the project. Developers must balance the need for this critical mass with high risk of overbuilding and competition within a particular
“The rise of the regional mall depended on the use of automobiles and growth and demographic changes in the suburbs. Household relocation to the suburbs accelerated the phenomenon of large-scale retailers moving away from downtowns between the World War.” —Andrew Jackson with older, smaller, and architecturally obsolete centers. These new formats include the “category killers,” which are large big-box stores that offer discounted goods, and “power centers,” which are clusters of category killers, that expanded rapidly in the 1990s (Hayden, 2003). Greyfields
in connecting mixed-use projects to the requirements of national and international flows of capital in today’s marketplace. One reason that large-scale mixed-use projects are difficult to finance is because they do not fit the standardized real estate product types that
use. In addition, the leases of ground-floor retail tenants are not large enough to eliminate the risk of failure, unlike a single-use retail building with a national, credit-worthy tenant (Jones, 2003, 33). Moreover, there are very few developers with the expertise to take on mixed-use projects.
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