In retail development, like politics, spin is everything. That's why developer Ben Devine found time in his busy schedule to sip cider at a Maine senior center one Saturday, pressing the flesh, explaining his controversial development proposal and trying to win the town over, one hard-of-hearing citizen at a time.
Was he pushing a mega-mall? A power center next to the historic Kennebunk town common? Hardly. Devine wanted to build a small grocery-anchored center on a highway on the outskirts of town, a project that would have caused barely a murmur in years past. But few projects go unchallenged these days, whether they're in sleepy Maine or booming California, and Devine's had stirred up an anti-growth referendum. So he took his case to the people — and won.
“It was like a political campaign,” says Devine, a principal in Boston's Great Island Development Group, recalling the many forums and meetings he attended in the months leading up to January's vote. “I would have to say that I didn't know how much effort it would take.”
Indeed, developers such as Devine are being forced to learn political skills and campaign for their causes much like city council candidates do — by holding coffee klatches, hosting open houses and knocking on doors. Some are even spending millions to woo the community before the project even breaks ground.
Call it retail politics. It's the new way of getting things done.
GET READY TO RUMBLE
“There's much more public participation in the development process than there used to be,” says Herbert L. Tyson, vice president for government relations at the International Council of Shopping Centers. “There are quality of life concerns and growth management concerns, and communities are struggling with issues like traffic and road congestion as well as school crowding.”
They're armed with information, too. “Local stakeholders are much smarter and much more aware of the potential implications and of how a development project will affect their quality of life,” adds William J. Roache, senior vice president of land development for VHB/Vanasse Hangen Brustlin, a Massachusetts planning, engineering and environmental services firm that counts many retail developers among its clients.
Those stakeholder concerns are showing up as unified opposition to retail expansion. Indeed, the country is peppered with projects that are under withering fire from community opponents.
In Monroe, Ohio, Taubman Centers has sharply scaled back plans for a 1.4 million-square-foot mall, but even the smaller version continues to be attacked as too much for the community. Foes say it will contribute to traffic problems and sprawl.
In Lakewood, Ohio, CenterPoint Properties has canceled plans for a $151 million mixed-use development on land the city considers blighted. It pulled the plug after a referendum backing the project was defeated in November.
Developer Robert Stark spent $2 million for grassroots lobbying, including infomercials, to sway a suburban Cleveland community in favor of Crocker Park, his $450 million mixed-use development. The opposition spent $1 million. (See story on page 33.)
Running a grassroots campaign is expensive. Stark says he spent $2 million, closed his office for four months and had all 50 employees out on the street spreading the word. “We rolled up our sleeves collectively,” he says. It took him another $1 million to fight off a suit by then competitor the Jacobs Group, and now he's facing legal action by Westfield America, which acquired some of Jacobs' properties.
Competition often gets ugly, particularly when rival projects are still in the leasing phase. Developers foster community opposition against competitors' projects. For example, Taubman Centers successfully slowed down the opening of Forest City's Short Pump Town Center in Richmond, Va., by filing a lawsuit contesting use of public funds for the building of the project. The roadblock helped Taubman's Stony Point Fashion Park catch up to Short Pump.
And Mills Corp. faced off with Hartz Mountain over a parcel in New Jersey where it is now building its 1.5 million-square-foot Meadowlands Xanadu project. Hartz Mountain lobbied politicians, cozied up to citizens' groups, and even filmed an attack video it sent to the entire New Jersey legislature.
Objections to development are nothing new. California became a hotbed of anti-growth activism in the 1980s. But local challenges have never been more intense, and opponents are becoming increasingly effective at the tactics of stalling and killing projects. A popular tool is the local referendum. In many areas, even a few hundred signatures can place a development question on a ballot, ensuring higher costs and long delays, and maybe even cancellation.
That's part of the democratic process, to be sure. But all that public participation can produce headaches for developers, even those who are highly sensitive to the issues — like Ben Devine.
Devine proposed building a 65,000-square-foot Stop & Shop supermarket and 18,000 square feet of multi-tenant space, with a 6,000-square-foot restaurant pad nearby. The site, which he found two years ago, was already zoned commercial, and the use meshed with the town's comprehensive plan. He even planned to emulate some of the Federal architecture that delights visitors to the town center. “I'm a seasoned enough dog to know that only a certain type of retail was appropriate,” he says.
But a vocal group of Kennebunk residents complained that the project was too big, and some say a competing supermarket chain quietly opposed it as well. Eventually, enough signatures were collected to put a referendum on the January ballot that would have limited new stores to 35,000 square feet.
The Great Island strategy was to show opponents that the company has an open mind. It had meetings, held open forums, met with owners of adjacent property. “We listened a lot,” Devine says. “We got their input, what they wanted and what they didn't.” Great Island invited the public to walk the site and inspect the building footprint, and then produced drawings of the proposed store and photos of other projects. It even brought the prospective tenants to town to talk about their philanthropy. And it changed its design to increase open space and improve sight lines.
The voters sided with Devine. The referendum was defeated by a vote of 2,750 to 1,788.
The battle typified today's development climate, where speed is a relative term. “We look at projects now in terms of years, not months,” says Devine, who at 43 is already a veteran of such campaigns across New England.
The Kennebunk fight is being played out all across America.
“Getting projects approved these days takes an awful lot,” says Roache of VHB/Vanasse Hangen Brustlin. “When I started it was simple and straightforward,” he says. You looked at what you had a right to do from a zoning perspective, laid out your plan and talked about what you wanted to do. “Communities by and large were happy to get whatever they could get out of a developer in the process.”
Roache advises clients to get involved with the public immediately. “The fact that you go out and listen and make the attempt, and then come back to them and say ‘Here's what we can do,’ goes a long way,” he says.
Bruce Walton spent 25 years in the radio business, starting in sales and working up to station ownership. Eighteen months ago he was approached by William Gerrity, president of San Diego's GMS Realty. GMS already ran Seaport Village, a 90,000-square-foot retail center on the waterfront, and was interested in developing two adjacent, seven-acre waterfront sites owned by the city. Gerrity asked Walton if he'd like to be involved.
“I told him I didn't know anything about real estate development, and he said that was okay. He said the job was all about managing process,” Walton says. He became a senior vice president.
GMS has proposed 180,000 square feet of retail, restaurant and entertainment space, a complicated idea because one of the parcels contains a protected fish-processing plant and a landmarked Depression-era police station.
In an effort to get to yes, Walton says he spends a lot of time “working the crowds,” and gathering opinions. “There's been a lot of coffee consumed, and a lot of shaping our ideas with different stakeholders and constituents. Between talking with residents, city officials, port staff, preservationists, the fishing industry, neighboring hotels, existing Seaport tenants, engineers and architects, there's been a lot of shoe leather worn out,” he says. “I love it.”
Robert Stark agrees. The hard campaigning he has had to do for Crocker Park in Cleveland, he says, gave him a better understanding of what motivates politicians. “There's this rush of intensity they experience from a 100-percent-plus effort they've made for a race or issue, where all you do is live and breathe the campaign. The endorphins kick in and you get lightheaded.”
And there's something that Stark calls “a wonderful positive byproduct” of arguing and winning your case in public. “After you shake the hands of the community and kiss the babies, and when you're fortunate enough to win and you've spent all that money, you've created an extraordinary amount of good will,” he says.
All of this chatting and chewing doesn't guarantee smooth sailing, of course. Some projects seem destined for trouble, and no amount of community contact makes it easier.
Devine of Great Island Development recalls trying to build a big-box project in a small city in New Hampshire. It was do-able from a planning standpoint, but what Devine didn't recognize until too late was that “there simply was no political will to do it.” After much preliminary work, Great Island pulled the plug. “That was an expensive mistake,” Devine says.
“This is all about engaging in a constructive dialogue,” says Roache. “There are times you come in when you are simply not going to get folks to engage constructively, but that doesn't mean you shouldn't engage.”
Where to turn when you need political spin.
When developer Robert Stark needed political advice, he turned to a consultant who knows that rough-and-tumble world intimately.
Jerry Austin has been a political advisor for a quarter of a century. He managed Jesse Jackson's 1980 presidential campaign and consulted on the high-profile Senate campaigns of Paul Wellstone and Carol Moseley Braun.
Austin's advice to developers: Get professional help on matters involving politics. “You would turn to a professional for architecture or management,” he says. “Anyone who would try to do this himself is making a big mistake.”
There's no shortage of places to turn. National public relations powerhouses like Burson-Marsteller provide consulting services on governmental relations and grassroots communications. So can many local public relations practitioners, who may have the added advantage of better knowing the community.
But for purely political issues, like Stark's campaign for a zoning variance, Austin suggests contacting local political organizations and asking for names of consultant candidates. The Chamber of Commerce can often provide a similar service, he says, and networking with other developers is valuable.
Emil Malizia, chairman of the department of city and regional planning at the University of North Carolina, says the rise of NIMBY-ism — “not in my back yard” — means that the political dimension of development will grow stronger every year. “You're going to see PR and government relations become much more a part of what developers do,” he says.
— Curt Hazlett
An Unlikely Candidate
Robert Stark's grassroots campaigning builds support for a major redevelopment in Cleveland.
There's no better example of a developer taking his case to the street than Robert L. Stark, whose development company has spent years smoothing the road for Crocker Park, an ambitious $450 million mixed-use project in Ohio.
Stark speaks fervently of his vision for the project, which he describes as a traditional downtown neighborhood that will transform life in the affluent city of Westlake, 15 miles southwest of Cleveland. “We're building the defining center of the community,” he says — a project that will successfully mix retail, residences, offices and open space “and ennoble all of them.”
But turning that vision into reality takes tenacity.
Construction required a public vote in November 2000 on rezoning 75 acres of land from mostly residential to planned unit development. A neighborhood opposition group soon emerged, financed by the Richard E. Jacobs Group, which is based in Westlake and at the time owned two malls in the area, Westgate and Midway.
The opponents charged that the Crocker Park team's advertising was misleading and underestimated the cost of needed road improvements, which the developer denied. News reports at the time, however, indicated that Jacobs Group — which said it was financing the movement “as a corporate citizen” of Westlake — opposed Crocker Park because it would include a top-end department store that would compete with Jacobs' own tenants.
To defend Crocker Park, Stark and his team went to the community. “When you're proposing that type of place-making, that type of personal impact on a community, more and more places are requiring you to go to a vote of the people,” he says. “You have to campaign on the issues of living in the community, and growing old in the community, and recreating in the community — and on the very definition of the community.”
That campaign started by contacting neighbors and gathering their ideas and objections. There were meetings in homes. There were coffees, parties, dinners, events. There was direct mail and Internet marketing and polling. The project got an added boost when it was endorsed by the Sierra Club, which described it as a large development that was “environmentally benign.”
“We used every instrument that a candidate has to use to get elected. I wound up making infomercials for television and being interviewed by every kind of media,” Stark says. “I had speechwriters and experts on public relations on my team. Suddenly I found myself to be more like a candidate for office than a person who was planning a development.”
The effort paid off when the referendum was approved by a healthy margin. Construction started not long afterward, and the first phase of Crocker Park is expected to open in October.
Jacobs Group has since sold its 33 malls. Westfield America bought nine of them in 2001, including Midway. But the challenges to Crocker Park aren't over. In October, Westfield — whose Great Northern Mall is only five miles from the proposed development's site — sued the Toledo-Lucas County Port Authority to stop it from providing $230 million in financing to Crocker Park.
In court documents, Westfield claims that the Lucas County agency doesn't have the right to finance a project in Cuyahoga County, 80 miles to the east. The agency defends the financing, saying it will bring the county $1 million in profit.
Stark is stoic about the obstacles he's faced. “If you haven't been through the gauntlet, then you can't survive in this business,” he says.
— Curt Hazlett