Monday, November 14, 2022

Three-Legged Stool of Mixed-Use Development

Mixed-use development rests on three legs. First, residential. Second, retail and restaurants. Third, businesses like hotels that depend on nearby restaurant/retail to attract customers to their own business. Like a stool, all three legs are needed to provide stability. Unlike a stool, you don't have to have all three legs in place for the first leg to serve its purpose. Richardson has a development application that offers a perfect example.

According to The Dallas Morning News, "Alta Terra Real Estate wants to build a combination of student housing, apartments and a small hotel on the property located just north of the UTD campus. Up to 19,000 square feet of retail space would also be included in the plans." There you have it: the three legs of housing, retail, and hotel.

Richardson City Council, while offering support for such developments in the past, has balked at approving this particular project for various reasons. The latest argument seems to be distrust that all three legs of the stool will get built. For example, the City Council might try to impose conditions on its approval requiring the hotel to be built before any student housing. While this may sound like a reasonable guarantee against a bait-and-switch by the developer, it overlooks the nature of real estate development.

The hotel developer won't build his hotel unless assured of nearby restaurant/retail to make their hotel attractive to travelers. The restaurant/retail developer won't build unless assured of nearby people to patronize their businesses. The student housing component doesn't have such prerequisites. It is the obvious choice to lead this phased development, as there is, and has been, pent up demand for more student housing at UT-Dallas. Build it and they will come. With students next door, the restaurant developers will come. With restaurants next door, the hotel developer will commit. Put conditions on the order things get built, and maybe nothing will.

The City Council says they like this kind of development, especially near DART stations, as this one is. It's understandable that they are concerned about the whole thing coming together. But the best way to ensure it *doesn't* come together is to insist on building this three-legged stool in the wrong order. Approval of the student housing component can't be held out as a prize for the developer at the end of the process. It's the leader of this parade of development.

Monday night, the City Council has a chance to demonstrate that they understand this by approving Zoning File 22-11.


Louis Burns said...

I'm not an attorney, but it seems to me that the city puts itself into a precarious legal position in stipulating business operations for development through a zoning document without taking any responsibility for the financial outcome. My understanding is that is far outside the scope of what zoning is which is a prescription on the allowable uses (or, ideally, the form). Phasing is a business decision, and if the city isn't contributing any funds, then they have no legitimate say in that.

Mark Steger said...

On November 14, the City Council generally agreed with the planned development consisting of three components: A) a student-oriented apartment part, B) a mixed apartment/retail part, and C) a limited-service hotel part. But before voting on it, they directed staff to draw up an ordinance requiring part B construction to begin before a certificate of occupancy could be issued for part A. The owner and developers agreed to this phasing. The case was continued until December 12, when, if all goes as expected, there will be a legal ordinance to the effect everyone agreed to and it will be voted into law. That's the plan anyway.

Scott said...

Is this the development owned by the the MD who has posted on facebook about this in the past? I recall him saying that the University was blocking his approvals to build student housing, for the University's own reasons.

So what I'm asking is: is the council truly acting to serve the city and follow the law strictly... or are they manufacturing a legal way to protect their partner, the University, and the University's financials (profits) ahead of those of a competing developer?

Summary: this smells rotten. Richardson used to be known as a clean and honest city govt and lately they seem to grab every opportunity to abandon that reputation.

Louis Burns said...

@Scott - yes, it's the same developer still struggling with the city who has apparently gone anti-development all of the sudden on this one project.

No, the city is not acting on behalf of the people in this instance. There is no meaningful opposition to the project anywhere in the community. Even UTD's facility manager withdrew his concern when it became obvious to everyone that his primary concern could only be to maintain UTD's monopoly of substandard campus-adjacent housing. There is a large amount of community support.

Some of the rottenness of this is incompetence. City councils are not famous for understanding zoning. Still, at every step, the project has seemed to run into institutional inertia from the planning commission, which appears to be stacked with policial appointees who don't understand zoning to the city staff that misses the forest for the trees and tries to argue that 100 feet is no longer adjacent and therefore shouldn't get TOD zoning.

I still can't believe that at one point council was wringing its hands over the idea that students (i.e. legal adults) might have to cross a street - one that is signal controlled with a crosswalk.