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CUE at Aksarben Village

I was recently asked how we name our projects.

Some are obvious.  Shadow Lake Square Apartments are next to Shadow Lake and Shadow Lake Mall.  Along with the neighboring amenities – the centerpiece of the development collect at a square traffic pattern.   We also name the floorplans.  At Shadow Lake Square – the Monarch is a nod to Papillion – the french word for butterfly is Papillion. There is also the Cottonwood, a tree common to Nebraska and Meadowlark, the Nebraska state bird.

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In Aksarben Village, our first 3 buildings speak to the previous use of the neighborhood- the Ak-Sar-Ben horse race track, and the projects design.  Pinhook is a racing term, Flats is a design term:  Pinhook Flats.  Inside, meaning the floorplans, we stuck with horse racing and named the floorplans after Kentucky Derby winners – Seabiscuit, Winning Colors, Secretariat for example.

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Our latest building in Aksarben, we wanted to do something different from Pinhook Flats.  We looked at the neighborhood – there is much growth and change. Stinson Park continues to hold great events – walks, marathons, markets and bands.  The University of Nebraska at Omaha – is continuing to add space for classes, parking and living.  Baxter Arena is hosting many events – sporting, graduation, conferences.  The retail and restaurants in Aksarben Village continue to develop – along with businesses joining the mix.  The homes here are being remodeled and updated by singles, familes and empty nesters.  We knew that many were looking for the next place to live – unique, bringing a little drama, a step up, a signal to take the spotlight….UP NEXT…CUE

 

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We are coming to the end of this one – we love how the exteriors are coming together for our new building at Aksarben Village!  A few minor finishes outside, then the sidewalks and landscape – will pull the project together.  The colors blend nicely with the neighborhood.  However, many have told us the materials have really made the building take center stage.

Come on inside and you can see we have chosen to use some pretty and unique ones.  It comes together, next level living in Aksarben Village, CUE.

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Alchemy Development presents: A New Urban Living Development located in Aksarben Village.

Alchemy Development presents:  A New Urban Living Development located in Aksarben Village.

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Located in a neighborhood with history; and now, with a great Vibe – progressive, education, youthful, urban.  Around the corner from shopping, entertainment and Stinson Park events; the new buildings will be a part of Pinhook Flats.

These new buildings will have a combined 53 apartment homes:  Studios, One Bedrooms, Two Bedrooms, Two Bedroom Lofts.  Each having its own washer and dryer and beautiful finishes.  Each apartment will have access to garage parking, trash chute, recycle program andhave access to Pinhook Flats amenities.

Combining the practical needs of life with urban living spaces for those aspiring to an elevated lifestyle –

             Upscale Living…Next Level Lifestyle.              CUE “Up. Next.”

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Alchemy Development Looks to the Future at Werner Park

0731_NEW_WERNERPARKAlchemy Development plans to construct 522 apartments in the Werner Park. The site is adjacent to Pennant Place and the Stormchasers home stadium. The area is envisioned as a recreational, retail, and residential neighborhood with a variety of mixes.

Omaha World-Herald, August 5, 2014

The Growth Ponzi Scheme

Reprinted from StrongTowns.org

We often forget that the American pattern of suburban development is an experiment, one that has never been tried anywhere before. We assume it is the natural order because it is what we see all around us. But our own history — let alone a tour of other parts of the world — reveals a different reality. Across cultures, over thousands of years, people have traditionally built places scaled to the individual. It is only the last two generations that we have scaled places to the automobile.

How is our experiment working?

At Strong Towns, the nonprofit, nonpartisan organization I cofounded in 2009, we are most interested in understanding the intersection between local finance and land use. How does the design of our places impact their financial success or failure?

What we have found is that the underlying financing mechanisms of the suburban era — our post-World War II pattern of development — operates like a classic Ponzi scheme, with ever-increasing rates of growth necessary to sustain long-term liabilities.

Since the end of World War II, our cities and towns have experienced growth using three primary mechanisms:

Transfer payments between governments: where the federal or state government makes a direct investment in growth at the local level, such as funding a water or sewer system expansion.
Transportation spending: where transportation infrastructure is used to improve access to a site that can then be developed.
Public and private-sector debt: where cities, developers, companies, and individuals take on debt as part of the development process, whether during construction or through the assumption of a mortgage.
In each of these mechanisms, the local unit of government benefits from the enhanced revenues associated with new growth. But it also typically assumes the long-term liability for maintaining the new infrastructure. This exchange — a near-term cash advantage for a long-term financial obligation — is one element of a Ponzi scheme.

The other is the realization that the revenue collected does not come near to covering the costs of maintaining the infrastructure. In America, we have a ticking time bomb of unfunded liability for infrastructure maintenance. The American Society of Civil Engineers (ASCE) estimates the cost at $5 trillion — but that’s just for major infrastructure, not the minor streets, curbs, walks, and pipes that serve our homes.

The reason we have this gap is because the public yield from the suburban development pattern — the amount of tax revenue obtained per increment of liability assumed — is ridiculously low. Over a life cycle, a city frequently receives just a dime or two of revenue for each dollar of liability. The engineering profession will argue, as ASCE does, that we’re simply not making the investments necessary to maintain this infrastructure. This is nonsense. We’ve simply built in a way that is not financially productive.

We’ve done this because, as with any Ponzi scheme, new growth provides the illusion of prosperity. In the near term, revenue grows, while the corresponding maintenance obligations — which are not counted on the public balance sheet — are a generation away.

In the late 1970s and early 1980s, we completed one life cycle of the suburban experiment, and at the same time, growth in America slowed. There were many reasons involved, but one significant factor was that our suburban cities were now starting to experience cash outflows for infrastructure maintenance. We’d reached the “long term,” and the end of easy money.

It took us a while to work through what to do, but we ultimately decided to go “all in” using leverage. In the second life cycle of the suburban experiment, we financed new growth by borrowing staggering sums of money, both in the public and private sectors. By the time we crossed into the third life cycle and flamed out in the foreclosure crisis, our financing mechanisms had, out of necessity, become exotic, even predatory.

One of humanity’s greatest strengths — our ability to innovate solutions to complex problems — can be a detriment when we misdiagnose the problem. Our problem was not, and is not, a lack of growth. Our problem is 60 years of unproductive growth — growth that has buried us in financial liabilities. The American pattern of development does not create real wealth. It creates the illusion of wealth. Today we are in the process of seeing that illusion destroyed, and with it the prosperity we have come to take for granted.

That is now our greatest immediate challenge. We’ve actually embedded this experiment of suburbanization into our collective psyche as the “American dream,” a non-negotiable way of life that must be maintained at all costs. What will we throw away trying to sustain the unsustainable? How much of our dwindling wealth will be poured into propping up this experiment gone awry?

We need to end our investments in the suburban pattern of development, along with the multitude of direct and indirect subsidies that make it all possible. Further, we need to intentionally return to our traditional pattern of development, one based on creating neighborhoods of value, scaled to actual people. When we do this, we will inevitably rediscover our traditional values of prudence and thrift as well as the value of community and place.

The end of sprawl? Not likely.

The urban dreamers who want sprawl to end really wear me out. You see, sprawl is bad. It costs a lot of money to have a spread out city: all that driving is inefficient, and it costs more to build and maintain spread out infrastructure, let alone service it with police, etc. Plus its so damn boring. Cookie cutter houses, lame strip malls, big parking lots. I agree with these people. I hate sprawl. But we have sprawl for a reason: its what the market for land use creates. You fight the laws of supply and demand at your peril.

Governments seem to have a bass-ackwards view of sprawl. Omaha is a case in point. Well-intentioned urban planners provide incentives for urban redevelopment. They go out and offer tax breaks to developers for building in the decaying downtown areas and then invest a fortune in public sponsored areas like parks, arts, and new street lights. Millions of dollars are borrowed to build a convention center that no one bothered to mention to KPMG that Omaha as a convention destination is probably not going to rank as high as oh, say, Orlando and Las Vegas.

Then, the State goes out and turns Dodge Street in to a highway and builds an overpass over 114th Street so that people can get to West Omaha faster. You’ve just pissed all the hard work of the those city planners down the leg. How? By reducing the time it takes to get to a home in West Omaha, you effectively reduce the net cost of living in West Omaha. Demand for businesses and housing in West Omaha increases, and ten years later the City finds itself trying to help developers turn Crossroads into a viable mall. Crossroads sucked, but it may have had a fighting chance before it took five extra minutes to get to Village Pointe.

There’s a couple of op-ed pieces in the New York Times that appeared on November 25th and 26th. One seems kind of interesting and is a concise thesis of a forthcoming book by Louise Monzigo. It describes how suburban office campuses have contributed to sprawl. She doesn’t mention it in the article, but I’m sure her book does: require developers to build parking garages, and you’ll get much more dense cities. She also raises an interesting question about infrastructure. The days gotta be over for cities building all this spread out infrastructure. We just can’t afford it any more.

But the other piece is from a Brookings Institution scholar who says sprawl is what caused our economic crisis and how exurbs (far suburbs) will never come back.This guy totally sucked the energy out of me. I was bored by the reverse-logic. Sprawl didn’t create the financial crisis, loose credit did. All those people who bought houses with 110% leverage were living the dream: home ownership. Where are the cheapest houses? On the edge of a city. Sprawl is a coincidental factor, not the cause.

Will the exurbs turn into dust and vanish like ghost towns? No. As much as urban planners would like them to, they’re not going away. They will come back. Why? Its cheaper to live at the far reaches of the city. It’s simple math. If I can buy a cheaper house on the edge and drive to work, why wouldn’t I? The only reason I wouldn’t is if my time was so valuable that I needed to be closer to my job and couldn’t afford to sit in a car two hours a day.

The only thing that will change this equation is $5 per gallon gasoline. Then it won’t make sense to live that far away. But that’s a whole other issue. What can government do to stop sprawl? Stop building infrastructure that can’t be paid for and serviced efficiently. Stop building sewers, water lines, and widening country roads into five lane divided highways. Essentially, the government policy on sprawl should be to do… Nothing. No more infrastructure. We, as taxpayers, can’t afford it.

Aging Boomers – An urban myth?

The September 12, 2011, issue of Forbes features an article titled “Where the Boomers Are: Builders think empty nesters are moving to the big city. Guess Again.” Joel Kotkin and Wendell Cox cite the 2010 census as evidence that boomer populations declined by 10.3% over the previous decade. They go on to list their “Hot Spots for the Aging.”

1. Las Vegas
2. Phoenix
3. Tampa-St. Petersburg
4. Orlando
5. Riverside-San Bernardino
6. Raleigh
7. Austin
8. San Antonio
9. Jacksonville
10. Charlotte

Does this mean that developers and planners have been deluded for the past ten years as cities have sprouted new downtown housing? My downtown developer friends who sell condos would beg to differ. Many of their best sales are to gray hairs.

So what gives?

Affluence is the answer.

The authors did not make a distinction among income levels. There has been a slight increase in the number of affluent people above the age of fifty in many of America’s downtowns. Unfortunately, this has been swamped by the exodus of lower-middle-class folks who can’t possibly pay over $200 per square foot (let alone $2,000) presented in new developments.

All the jurisdictions above are in warm places with low taxes (excluding Riverside), and warm weather. Duh.

So, if you’re developing in urban areas you can benefit from the small minority of affluent seniors, but don’t bet on bucking the trend.