What's the No. 1 strategy for successful public/private partnerships in the urban development space? "Patience," says Los Angeles-based Forest City Residential West President Kevin Ratner, who joined Peter Houghton, managing director of investments for San Francisco-based MacFarlane Partners, and Neville Rhone, senior director of acquisitions for Beverly Hills, Calif.-based Canyon Capital Realty Advisors on the "Urban Partnerships" panel at the 2008 Developer Conference this week in Las Vegas.
The panelists each highlighted their marquee projects in the urban space, including Canyon's Block 21 in Austin, Texas; Forest City's Met Lofts in Los Angeles; and L.A. Live, MacFarlane Partners' project in downtown L.A., which has received $300 million in transit-oriented tax credits, permit rebating, and CRA grants.
However, Rhone emphasized that not all public/private partnerships need to be capital-driven. While the Block 21 project was 100 percent privately financed, Austin Mayor Will Winn played a lead role in assembling the Canyon/Stratus Real Estate team that will develop the $260 million, 196-unit high-end condo project. "Mayor Winn was instrumental in the concept and development of this project, and he continues to be just one phone call away," Rhone said.
While Rhone admitted that having NBA legend Earvin "Magic" Johnson on the Canyon team is helpful in creating those types of relationships, he stressed that developers interested in urban partnerships need to have a team with a variety of experiences and skill sets to best underwrite?and thus successfully execute on?the complexity of urban projects.
"It can be arduous," Ratner agreed. "These projects are large and complicated, and getting the continued support of city and regional politicians is critical to success. These communities are ultimately going to be career-makers or career-breakers."