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The Growth of Mixed Use and What It Means for Design

The Growth of Mixed Use and What It Means for Design

Jack Portman knows a thing or two about mixed-use projects. He began his career in 1973 as an apprentice in his father’s architecture and engineering firm, John Portman & Associates, and now serves as vice chairman of both that company and Portman Holdings, a real estate development firm. Together, these Atlanta-based companies are responsible for a number of major mixed-use developments around the world, from Peachtree Center in Atlanta and Embarcadero Center in San Francisco to Marina Square in Singapore and Shanghai Centre in China.

The firms’ latest mixed-use projects include a new $100 million hotel and office development across from Denver’s Union Station, expected to break ground this fall, and a 27-story tower in downtown Atlanta that’s being converted to approximately 290,000 square feet of office space atop a 200-key Hotel Indigo, scheduled for completion in late 2015. (Portman first designed and developed the tower in 1965 as a Peachtree Center office building and reacquired it in April.)

While mixed-use developments remain prominent in large, tier 1 cities—as more and more people want to live near where they work, eat, drink, and play—these types of projects are also popping up in smaller, tier 2 cities. A seasoned architect and developer, Jack Portman explains what’s spurring the growth of mixed use across North America, why developers have their sights set on up-and-coming destinations, and what that means for design.

Why is there a growing interest in mixed-use projects these days?
It all boils down to lifestyle from a user point of view and spreading your risk from a financial point of view. The shift from suburbia to urban has taken place. This generation doesn’t necessarily aspire to have a house with a white picket fence in the suburbs. They’re looking for more interactive, community-type environments, and that changing lifestyle has spawned a lot of redevelopment in town areas. If that’s what the customers want, then that’s what the developers are going to build. It’s an interesting dynamic because you’ve got demographic influence from both directions, from younger people coming out of college just starting to work and also from empty nesters.

What makes tier 2 cities appealing for this type of development?
In a tier 2 city, you have perhaps more opportunity as a developer to come in and do something. It may be a little smaller, but if you do the right sort of mixed-use components, you have an opportunity to make a bigger impact. Your risk is relatively similar to a tier 1 city, but you can normally get a better return, maybe 21 to 22 percent. Whereas in a tier 1 city like San Francisco, the investor may be satisfied with 16 or 17 percent because it’s a more established market.

Why types of tier 2 cities do mixed-use projects work best in?
The difference between a good tier 2 city and a bad tier 2 city as far as mixed use goes has a lot has to do with infrastructure. The cities that have really good infrastructure attract much more interest, not just in terms of lifestyle, but in terms of investment. Where there is better infrastructure, you don’t have such a demand or need for automobiles. So being mixed use lends itself to a pedestrian lifestyle, and if you have good transportation, then you don’t necessarily need a car to get around.

What other aspects do developers and investors need to consider?
You’ve got to analyze what’s around you and put in your sights what complements and fits within the whole area to give you the full component of an overall mixed use. Sometimes you don’t have to build all the pieces yourself. Scale also is a factor. You’ve got to have enough density to create enough activity and enough people so you have a sense of community. But you have to get the right mix to get the right population to create the right kind of activities scene that makes it a place people want to be.

What’s the key to designing a complex that will draw people in?
From the very beginning, my father has focused on pedestrian-oriented design. If you can create the right kind of environment to give that pedestrian a sense of excitement, mystery, and comfort—sometimes cozy, sometimes expansive—and play with their senses, as if you’re conducting an orchestra, you’re able to create an enjoyable experience and a very present environment that people feel attracted to. They want to be there, and they want to come back.

How does designing mixed-use projects for tier 2 cities differ from large tier 1 cities?
That may be less apparent. In a tier 2 city, you normally wouldn’t be able to charge the same kind of rent, so maybe you would use a nice terrazzo floor instead of a marble floor or stucco rather than brick, in terms of materials. It has to be site specific. You want it to blend in. You may have to do it a little more economically. But at the end of the day, you want to preserve the authenticity of the place so the project seems to really belong there, and that doesn’t necessarily mean you have to clad it in granite to do that.

Photo credit: John Portman & Associates

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