Competition Questions
Q1. Are we to consider the decking as part of the cost of our development, or can we assume that decking is being taken care of separately?
A1. Decking is part of the public infrastructure; therefore you need not consider its cost as part of your development cost. You will want to graphically show the extent of the decking, however—though it has no cost consequences—to illustrate the urban design character of the downtown-to-Cedars transition.
Q2. Are faculty advisors permitted to view the data files for the competition?
A2. Yes. There are two limitations:
In both cases, we rely on academic honor to guide the teams and their advisers.
Q3. The GIS file you provided is a higher version than the version we have in our department. Is it possible to send us a lower version one?
A3. We will not be able to provide any other version.
If there is a higher-version installation of ArcGIS at your campus, you may be able to borrow its use and down-convert the files in one batch. Or your faculty or professional adviser may have a solution. This question will be posted to all teams, and if another team offers a solution, it will be posted for everyone's use.
Q4. GIS layer <land_use_2005> does not work when I import it into a GIS file. Does it have a different coordinate system?
A4. The coordinate system is GCS_North_American_1983. (It's different from the others since it comes from the North Central Texas Council of Governments, not the City of Dallas.) Layer <land_use_2005> should draw properly if it is loaded in the proper sequence. Use the shapefile rather than the layer file, and then import the symbology from the layer file after the shapefile is loaded. Also, load a boundary file (either the study area or the data extent <SelArea.shp> into a new map to make sure the projection is set correctly.
If you cannot get the symbology to import, the land use code key can be downloaded from http://www.dfwmaps.com/clearinghouse/metadata/lucodes.html.
Q5. Should the seventh board displaying the financials be separate from the six boards displaying the design idea, or is it preferable for all seven boards to be contiguous?
A5. The seventh board should be separate.
Q6. In reference to Q&A #1, should public infrastructure costs be included in our tally of the costs outside of our development site?
A6. Yes, indeed, as instructed on p.5 of the competition brief, under Assumptions, item “5. Infrastructure Costs.”
Q7. Again, in reference to Q&A #1, isn’t there a certain level at which the cost of infrastructure outside of the development site makes the project unfeasible? And at what point do these costs adversely affect the way our submission is judged?
A7. In practice, yes, at some point, excessive infrastructure cost might delay or prohibit the decking over of the Canyon. But that is not your concern—we are proceeding on the assumption that the decking has happened.
Your development proforma must include infrastructure costs on the private portions of the development, and should not include infrastructure costs on public property, as explained in Q&A #6. But public infrastructure costs must be reported on the financial summary board, without consequence to your development proforma. The jury will be neutral on public infrastructure costs.
This is intended to be an educational exercise; therefore we intend that you be aware of these costs, but not be responsible directly for them. In the real world, the truly committed developers would look for ways to partner with the public to creatively finance public costs for everyone’s benefit.
Q8. Is the industrial area at the south and the southeastern part of the study area active or just under-utilized? What resources are available that have more information on this area?
A8. The industrial areas within the study area are active, except in the southwestern quadrant to the south of Corinth and west of South Lamar, which is underutilized and spottily vacant. But that is a static view of the market, which will inevitably become more dynamic after the Canyon is decked over.
Availability of resources depends on your resourcefulness.
Q9. Are any of the following previous plans available to us?
Cedars Area Plan (2002) 2002
Cedars Area Special Purpose District # 317 1994
Cedars TIF Final Project Plan and Reinvestment Zone Financing Plan
A9. Information about Dallas TIFs and PIDs, and a 2006 annual report for the Cedars TIF, are available at <www.bigd-ed.org/area_redevelopment.html>
Information about the special purpose district is available at <www.dallascityhall.com>
The amended Cedars TIF plan and the 2002 Cedars Area Plan are downloadable from "2.Competition:" --> "Web Links."
Q10. Are we allowed to speak with a developer who has a project on the site about their own project? Can you please specify whom we are allowed to speak with and about what?
A10. Here is what the competition brief (p.2) says about your question:
"…Under no circumstances should there be any communication regarding the competition, other than in the manner stipulated here, with members of ULI staff, the nonprofit and public agencies involved, the landowners or employees of the landowners, consultants who are working or have worked on the project, or the competition jury."
There are 103 teams x 5 members per team = 515 potential inquirers. The people and entities enumerated above cannot devote time to inquiries from students. In order to get the various entities to participate in this competition, to share their resources with ULI, we have to insulate them from individual inquiries. The bottom-line answer to your question is: please do not contact anyone listed above.
We have requested that individuals and organizations we have worked with enforce this contact limitation by reminding inquirers about ULI's position on this matter. Furthermore, as in all matters pertaining to the ethics of this competition, we are relying on all participants to abide by their institution's code of academic honor.
Q11. In the GIS package there are multiple .dbf files. Please explain the difference among the DBF files dcadmult07cert.dbf, dcadmulti07cert.dbf, and dcadmult0807.dbf.
A11. Only use dcadmult07cert.dbf—that file relates to the GIS data and allows you to complete your analysis of taxable values. Delete the other two DBFs.
Q12. What is the time frame of the final study area master plan? The development site assumes a start date of 2010, and the urban design study starts at 2020. So, to what year is the master plan held accountable?
A12. Quoting the competition brief (p.6):
"This can be accomplished with vignettes and a master plan showing the study area in 2020 (year ten after development commences)."
This might have been awkwardly phrased. It meant to say that you should show how the study area looks, in vignettes and in plan form, in the tenth year (2020) after development commences in 2010.
Q13. If we propose public improvements, will it or will it not count against our development square footage allotment?
A13. Portions of public improvements that are in public space do not count against your development square footage allotment.
Portions of public improvements on privately owned parcels count against your development square footage allotment.
In both cases, such public infrastructure costs must be identified in the summary of costs (Excel worksheet 3a), but they are not part of your summary proforma accounting (Excel worksheet 1).
Q14. If we are not allowed to contact local government and entities, how are we to determine typical funding amounts and terms? That is, what guidance can you provide to help us determine realistic amounts that our project could receive from such funding sources?
A14. The ones we know of typically publish project structures on their Web sites.
For example, at one of them, the following is available on its Web site:
Typical Project Structure
50% bank financing
40% CDC financing up to:
$1.5MM for small businesses
$2.0MM if Public Policy goal(s) met
$4.0MM for manufacturers
10% borrower equity minimum
+ 5% for start-up
+ 5% for special-purpose entities
In any case, please do not contact them directly.
Q15. Regarding the decking of the Canyon, the second paragraph on page 6 of the brief indicates that we assume the decking project goes forward, but that it retains/maintains existing interchanges and access ramps. Yet, on the bottom of page 5 we're encouraged to keep in mind the effects of Project Pegasus (the redesign of downtown interstates and interchanges). May we modify the interchanges and access ramps in accordance with the designs proposed in the Project Pegasus literature?
A15. The recommendations of Project Pegasus, as they affect the Canyon's interchanges and accesses, seemed to be moving targets and open to different interpretations about scope and consequences. Therefore, we decided to maintain a baseline assumption that interchanges will be retained in their current states.
Q16. The competition brief requires that the development site be a contiguous twelve blocks if we use the existing grid, or 20 acres if we reconfigure the grid. Since the blocks are of varying sizes, twelve blocks on existing grid can exceed 20 acres, please clarify the area restriction.
A16. Twelve blocks on the existing grid, minus public space, is approximately 20 acres in round numbers.
We emphasize that though you might gain efficiencies of scale in a larger development site, giving you greater IRR on your project, the jury's main interest in the development proforma is how accurately, thoroughly, and logically the finances reflect the urban design intent.
Q17. For the contiguous 12-block quadrilateral requirement, do you mean "approximately" quadrilateral? There aren't many true quadrilaterals in the study area.
A17. Yes, “approximately quadrilateral” will do. We just wanted to avoid having teams cherry-pick the development site edges or to gerrymander the site in any way.
Q18. If we accept the 20-acre development site option, may we count parks as "public right of way"? In other words, do we have to count the park against our 20-acre limit?
A18. Yes, parks are public space and do not count against the 20-acre development site limit, along with streets, sidewalks, and other public-use space owned by the city or other jurisdictional entities.
Q19. Are we to choose the zoning, planning, etc., of the decked portions over the Canyon?
A19. Yes.
Q20. Can our 20-acre development site be wholly or partly on the decked-over area?
A20. The entire Canyon is part of the study area and your chosen development site can be anywhere inside the study area, including on the decked-over area.
Q21. After reviewing all of the financing-related aspects of the competition, I'm confused about exactly what the competition is looking for in this area. While the competition brief mentions a TIF zone, the PID area, an assumed real estate tax rate and includes an affordable housing enhanced equity/financing spreadsheet, the actual template for the development finance information is completely devoid of financing aspects, and it appears to only want unlevered IRR and NPV. So I'm confused as to what is desired for competition purposes and on panel 7. Can you please clarify? Should creative sources of equity financing (like TIF funding) be documented elsewhere as an option for the developer to pursue? How should real estate taxes be treated in the template spreadsheet if financing is not to be included? If it is to be included, can you provide guidance on what types of information should be added to the template.
A21. Our proforma template is for an unleveraged scenario; consequently, financing considerations are ignored. The brief's reference to real estate taxes was an unintended misdirection, a holdover from previous years when a leveraged scenario was asked for.
The only parts of the financing picture in which the jury is interested are equity sources and amounts. These are not entered in the proforma, but should be enumerated in a chart in a relevant place on the six graphical boards (as opposed to the seventh, proforma board).
The mechanics of how the jury will view your submission might help you visualize this arrangement:
All submissions are laid out on tabletops or on walls—exactly as configured by the teams—in one very large room. The seventh board, containing a summary proforma, will be placed on a table next to the 6 graphical boards. On the day before the jury meets, two developers from Dallas (with knowledge of the local market and financial/political conditions) will examine the submitted "seventh boards" and grade them A, B, C, or F according to the criteria in the brief and according to their experience with the Dallas market. (They are staying on to advise the jury when the full jury meets the following day.) The jury will decide what the threshold "grade" must be in order to receive further consideration. (We are expecting that no F will be issued.) Being able to see the equity sources alongside the master plan, urban design, and development proposal will give the jury a good idea of how creatively (and realistically) you approached this development opportunity. There are many other equally significant criteria for consideration, but this is one aspect of the judging in which the proforma plays a major role.
We believe that asking for the financing consequences of your development proforma would complicate matters for students and for the jury without adding anything to the core reasons for conducting this competition.
Q22. My team’s [12-block/20-acre] development site is on the study area boundary where the boundary is irregular. The other sides of our development site are straight. Is that acceptable?
A22. If your development site is on the study area boundary you have no choice but to accept those edge conditions, so yes, such a development site shape is acceptable.
Q23. The blank pro forma Excel file included with competition materials has several "factors" filled in already. Should we use these factors as our assumptions, develop our own estimates, or are there set standards? (net rentable area, asset value, cost of sale, vacancy factor, and more).
A23. Use the factors that are filled in; for all others, use your own estimates.
Q24. On the blank pro forma Excel file included with competition materials, sheet "11. Hotel," line 15 is "Total Revenues as Percentage of Gross Revenue." The corresponding line in the Mixed Use Development Handbook is "Total Expenses as Percentage of Gross Revenue." Please advise as to which is more appropriate to use.
A24. "Total Expenses as Percentage of Gross Revenue" is correct.
Q25. APA’s land use colors do not include one for mixed use. What do we do, for example, if we have residential over retail?
A25. See APA’s http://www.planning.org/lbcs/standards/FAQ.html. Since you are not creating multi-dimensional maps, you may show the different uses by showing the color codes as alternate hatching.
Q26. The competition brief says “Easements may be relocated but not removed." How does this affect our ability to design and change streets?
A26. It doesn't, but be realistic. This was actually boilerplate language, to be applied where easements are in use. Where easements are not in use, it has no consequence to you in this competition.
Q27. If we choose to eliminate portions of the Canyon decking, is the money saved from that available to fund other projects?
A27. No, since your development project costs already are independent of public infrastructure costs. In any case, Project Pegasus does not prescribe the extent of the decking—you determine the extent. In other words, there are no portions of the deck to "eliminate."
Q28. Are we allowed to use diagrams of systems that other people have created as long as we source them?
A28. Yes. The operative phrase is "as long as you source them." In general, treat the competition as an academic exercise.
Q29. For the purpose of locating the 12-block development site, does a block with an alley count as one block or two?
A29. Alleys should not be counted as streets when defining a block. Therefore, a block with a through-alley would count as one block.
Q30. Can you clarify that for the first presentation requirement (Planning Context and Analysis) we are to relate the existing surrounding context with the new master land use and urban design plans that we develop for the site, and not to represent the land use, circulation, etc. as they currently exist?
A30. The existing context should inform the new master plan for the study area. You may suggest ways the existing context can be changed to support the new master plan, but that is not a requirement and should be undertaken only if your preferred scenario for the study area master plan does not work without such alterations to the context.
Q31. We are wondering how closely pinned up our boards will be for presentation to the jury. Can illustrations and maps flow over onto the following sheets, or is it best that each illustration remain within one board? Also, can the boards be arranged in any way, i.e., square vs. in a row?
A31. The jury will view the boards as you intend them to be viewed. By default, they will be butted tightly up against each other in the configuration you request. (The financial board, the 7th board, should be presented outside this configuration, as the jury members will pick it up and read it as if it were a spreadsheet.) The six graphical boards can be configured (rows x columns) 1x6, 6x1, 2x3, 3x2, landscape or portrait, or mixed (although mixed configurations generally are inefficient use of board space). Thus they can be read as one board of 17"x66", 11"x102", 34"x33", or 22"x51" (and their respective obverses).
Q32. The vacancy factor for the hotel in the provided Excel pro forma is 100%. Doesn't this suggest that the hotel is entirely vacant?
A32. As you point out, that factor is incorrect; the cell should be blank. You should substitute it with a vacancy rate that is in line with hotels of like quality in downtown Dallas. The rack rate might be lower than comparable downtown hotels, but vacancy can be safely assumed to be about the same, given the Cedars' proximity to the convention center and the neighborhood revitalization that your development will bring to the Cedars.
Q33. In the hotel section of the sample financial pro forma presented in the Mixed-Use Development Handbook, there is a line for "Other Revenues." Is there an industry-standard percentage or should we supply our own estimate?
A33. You should derive that estimate yourself. "Other Revenues" would depend on the amenities (services, restaurant, recreation, etc.) you are providing, which affects your development costs, etc.
Q34. Are we required to maintain zoning on government properties even if they are currently vacant?
A34. If the GIS data shows that they are currently vacant, you may rezone them and you may acquire those properties for development.
Q35. Is it assumed that the TIF financing available in the Cedar district should be incorporated into our proformas?
A35. Yes, if you use TIF funding. You'll have to create a line item for it in your proforma. TIF funding, as you know, is based on the taxes that the project is expected to generate.
A good round number to use in the Cedars is a maximum of 10% of the hard and soft development costs, including land acquisition.
Q36. There is a beige building at the southeast corner of Griffin and South Akard just north of the Cedars Art Gallery, which is labeled as institutional on the GIS zoning layer. Does it actually have an institutional use, or are we able to redevelop it?
A36. It is a child-care center for children of homeless families, thus it is institutional but not governmental. Therefore, it can be rezoned. There is a concentration of facilities for the homeless in this northern part of the Cedars, and many would welcome relocation—if only to shed the stigma of clustering—especially if a developer would provide an upgraded facility. By the rules of this competition, institutional uses can be rezoned, and vacant government-owned property can be rezoned (but not actively used government property).
Q37. According to the brief, "the size and mix of affordable units must be the same as the market-rate units." Does this mean that if we propose some very large market rate luxury units, we need to have an equal proportion of moderate and low income units that are the same size as the luxury?
A37. "Size" should have been "number of units."
Thus, in each phase of your development, if you have 100 market rate for-sale and 200 market rate rental, you should have 20% x 100 = 20 affordable for-sale units and 20% x 200 = 40 affordable rental units, with half of each in their respective AMI affordability brackets. Size of units (square footage) is immaterial.
Q38. In Q&A 35, you wrote: "A good round number to use in the Cedars is a maximum of 10% of the hard and soft development costs, including land acquisition." Do you mean 10% are taxes? Or 10% of our total development costs could be available as TIF funding? How does the logic of TIF work in the financial model—can we assume that it is funded in full on the day of the acquisition, and is it supposed to be repaid?
A38. This is how our contact in Dallas' city hall answers your question:
TIF funding, as done in Dallas, would be reimbursable after all development requirements are met (public improvements accepted by the City, certificate of occupancy issued, all design requirements met, etc. That is, the developer pays for all expenses up front, manages and builds the project (including the public portion), and then submits requests for reimbursement after the entire project is finished. The reimbursement schedule depends on how much is being built in the TIF district and how many of those projects have applied for TIF funding. The students can calculate this by determining how much net new City and County real property taxes the project will generate and then divide the amount in, say, half to account for any revenue sharing and administration expense. This would give a worst case scenario for reimbursement cash flow. They can add this cash flow in alongside other cash flow from rental income, sale of the properties, etc.
Q39. Can we use TIF in conjunction with the 80/20 program (as in NY, tax-exempt bond financing for affordable housing) to fund the rental residential projects?
A39. Dallas has a couple of grant programs that developers in the downtown area can utilize. One is a Section 380 grant. This grant, however, is not generally available to be layered with TIF financing outside of the downtown core.
[UDCompetition adds: do not use Section 380.]
However, the developer could apply for LIHTC funding (or other federal funds) or request that the public improvement portion of his or her project be added to an upcoming City bond program. These additional funds could be layered with the TIF funding. Example: the developer needs a new street for phase IV of the project. The developer petitions the City to put this project on the bond program for a future year. If successful, the new street would be built with bond funds from that future bond sale.
[UDCompetition adds: not applicable to proforma, as public infrastructure costs are not included in your development costs. However, you may cite such funds as sources when you tally the total public infrastructure costs.]
Q40. Is the land acquisition cost of $35/sf fixed, or can teams base the cost of acquisition on the (inflation-adjusted) 2007 valuation data provided in the GIS files?
A40. Stay with $35 psf. At the time the competition brief was written and vetted, we were not sure that the GIS data for valuation would link dynamically with the parcel shapefile—we thought it would require a manual look-up, parcel by parcel. Thus we took the easy way out on behalf of students.
Q41. Can the development site be smaller than 12 blocks/20 acres, or is that the exact size required?
A41. The development site can be smaller.
Q42. For board seven, should we present the data exactly as it is given in the provided pro forma template, or can we change the format (for instance, reorganizing the data, showing graphs, etc.)?
A42. You can change the format. You do not even have to use our proffered proforma. However, we believe that the format is already at a barely-readable level and that adding additional items will reduce the font size, row heights, etc. Do so at your own risk.
Q43. If we're going to actually build on a portion of the I-30 deck, do we have to pay for the air rights we use (at our $35/ft2 rate)?
A43. If any part of your development site is on the decked portion of the I-30 Canyon (the extent of the decking is up to you), you are to "purchase" development rights at the $35 psf rate for the portion used.
Q44. Do we have to pay the $500/ft2 price for the deck, or may we assume that the deck is completed by the state and we're simply building on top of it?
A44. The $500 psf infrastructure cost for the deck is a public expenditure.