December 30, 1997 - From the December, 1997 issue

OliverMcMillan’s New Urbanist Agenda for Long Beach and Southern California

More and more, public/private partnerships are defining how real estate development is done in California, particularly in its older core areas. Carving out an early niche in this arena was San Diego firm OliverMcMillan, widely regarded for developing high-quality, design-intensive urban infill projects. The Morgan Dene Oliver and Jim McMillan-led firm is expected to ink a deal next month with the City of Long Beach to develop the massive Queensway Bay entertainment/retail project. They also are favored to win rights to build a key project in Culver City's Downtown. TPR is pleased to present the following interview with Oliver as his firm gears up on numerous downtown redevelopment projects from Old Town San Diego to Reno, Nevada.

Let's focus on your firm's development work with the City of Long Beach at Queensway Bay. What attracted you to this opportunity; and what your hopes are for the project?

For several years now, even before Queensway Bay, we've thought that Long Beach was a jewel which was ready to be polished. When we got involved with the City, we were attracted to the Redevelopment Agency's progressive attitude towards turning blight around, as they had done in Pine Avenue. The early success of Pine Avenue was obviously exciting to us. 

We were asked by the agency and the City Manager's Office to interview on the Queensway Bay project. We put a huge effort into working for selection, and we were thrilled that we were chosen. 

Queensway Bay is an unbelievable opportunity. It's rare in your career that you get a chance to work on such a large site in an infill capacity—18 acres. The last time we got to do that was when we built Uptown District in San Diego. We were able to secure a 14-acre former Sears & Roebuck site which had phenomenal demographics.

But both instances entail huge challenges. When you don't have the urban grid in place and you end up with a very large chunk of land that hasn't been conformed to the planning guidelines of a city, how do you make it work? That has been the real challenge for Queensway Bay, but conversely it provides the real opportunity.

The City, when it put out its request for proposals, told developers that the City was not able to subsidize development beyond the $180 million it had already spent for an anchor attraction and a total waterfront environment. What do you believe distinguished your firm's response to the City RFP from your competitors'?

Number one, we listened carefully when the City told us what they were capable of doing and what they couldn’t do. And we responded with a plan that works within both the physical and economic constraints they laid out. Number two, we have spent a lot of time since the mid-'80s working on difficult urban projects. We are not shopping mall developers—we really are urban infill developers.

Please elaborate, Dene, on what projects your firm has undertaken around the region or the country?

There's the Uptown District in San Diego, which has been written up by the ULI and many other organizations and has won around 15 major awards.

Again, the Uptown District was a $75 million project on a 14-acre site. We did a mixed-use village of 315 residential units, a Ralph's Market, and shops. We recreated the urban façade and didn't allow the market to have a big sea of parking, in fact we broke it up in pods. We also pulled the city streets straight through the site, so even though they were private they broke a very large site down into a grid. It was really the vocabulary of the architecture and the city planning that surrounded it that brought national attention. 

We did another very large $75 million mixed-use project in the Hillcrest area of San Diego, the Village Hillcrest, back in 1986. It was a 90,000 square foot lot in an area which transitioned from medical into retail uses. It's in an artsy, eclectic area—sort of the Melrose of San Diego. We ended up doing a major medical component and stepped it back down to a second-story Landmark Theaters multiplex for art ,films, with bookstores, record stores, restaurants, and apartments above that. We built offices and loft space on top. It was an early version of an urban entertainment center before there was such an animal.

We then went on to do projects in Downtown San Diego and in the Concord Area of Northern California—all tight, urban sights in which the architecture is extremely important. These characterized our work through the ‘80s-projects like an all-brick Ralph's Market in Downtown San Diego which looks like an historic warehouse building. 

More up-to-the moment, we're just opening the first phase of our Gas Lamp Entertainment Project in San Diego.

Dene, could you share our readership your plans for Queensway Bay and what will distinguish your approach to this design challenge from the entertainment-retail formulas we have seen at developments like the Irvine Spectrum or in Old Town Pasadena? 

Those two examples—Irvine and Pasadena—are obviously at opposite ends of the spectrum. What we expect to do will walk, talk, and feel a whole lot more like the existing Pine Avenue, the Gas Lamp Quarter in San Diego, or Old Pasadena than it will Irvine Spectrum. We are not going to do a project that is surrounded by a parking ratio of 17-to-l. It's also not going to be something that you just move on to the inside of.

What we're going to do is take the very large site, the Tidelands, and break it down. We'll run streets, roads, and sidewalks through it as though they already existed when the balance of Downtown was subdivided. A small portion of the site is directly on the water and is crossed by both Shoreline Drive and Grand Prix. 

We're going to create a pedestrian oriented urban project with some pods of structured parking that will hopefully be well-camouflaged. A major emphasis will be the linkages to the water, to the aquarium and back up to Pine Avenue. This will complete the development of the overall Downtown Long Beach area. We are interested in laying buildings, so it does not feel like a project per se, but a natural evolution and continuation of the cityscape, developed down to the water. 

Dene, you're working a lot in California cities. What arc the difficulties urban infill developers encounter in working in redevelopment areas when CRA's have so few tools to offer in partnership with a private developer? 

First, this project is being done by the City of Long Beach, not the Redevelopment Agency. That said, with a city like Long Beach, you can view the glass as either half-empty or half-full. From our perspective, the glass is half full in Long Beach. They have put infrastructure in place and made a huge investment in Pine Avenue, and they are recreating a harbor. In addition, they've got a wonderful convention center and great aquarium. They own the site, and the entitlements are in place. So, I don't consider Long Beach or its redevelopment agency entities without any tools. 

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Sure, there are some tools like tax increment financing that may be available in other communities that aren't available here. But that increment has already been used with respect to so much of what's been done already. Also, like all cities, Long Beach was negatively impacted when the tax increment was turned upside down by devaluation during the first half of '90s. 

Most of that infrastructure that Long Bench put in place was before the last anti-tax nail fell—Prop. 218. How difficult will it be to replicate these kinds of projects in the future in California? 

It is increasingly difficult. Again, we're working with some agencies that have more tools, and some that have fewer. The big misconception about redevelopment is that once an agency or city spends the money and begins to get it moving, the private sector will immediately take over and it'll be a honeymoon after that. But that is simply not the case. 

America did not arrive at its current level of inner-city blight over a 5­to-10-year period. It took a long time for suburbanization to lead to the decay of the downtowns. One of my major concerns for the redevelopment process is that although redevelopment agencies have planted many beautiful gardens in downtowns, these gardens must continue to be watered. If they aren't, they don't bloom. 

Lastly, what are the projects that you and your firm now have on the boards, and what project prospects, particularly in the metro L.A. area, are you pursuing? 

We are working on a project in Pasadena, where the City is trying to determine what to do with the property across from the old Plaza Pasadena at Los Robles and Colorado Boulevard. 

We were also selected from a field of about 12 firms to redevelop two blocks in Downtown Culver City. That project is moving forward with planning and tenanting right now. 

Our company is a partner in the Hawthorne Renaissance Corporation, working to redevelop Hawthorne Plaza, the old regional mall, and some contiguous property along with a community center. 

In addition, we were selected in competition by the City of Vista to do a 50-acre downtown evolution of their main street. We're working on the planning and tenanting of that right now. 

We are going to do a theater-based entertainment and retail project in Oceanside by the beach, which is underway. And we are just opening the first phase of our Gas Lamp Entertainment Center, which is going to be about 200,000 s.f. total, in Downtown San Diego. 

We're also working on four blocks in Downtown Reno along the Truckee River, where we will be building movie theaters, shops, and restaurants. We'll redo one or two old hotels into live/workspace apartments with retail on the ground floor. 

Finally, we are working on bringing a theater into Downtown Tacoma, Washington and restore and re-tenant some old buildings there. 

It appears OliverMcMillan has grown now from a boutique firm to a major player. Some of the cities involved in deals with your company might be concerned that a bigger OliverMcMillan might not be able to deliver the quality of development it has been known for. How do you respond? 

First, we haven't had that concern voiced by any of the cities we've worked with. Second, these projects are all in different stages. Third, real estate and buildings are the medium we work in, but we consider ourselves a design firm and a relationship firm. Of course, financial engineering is always an essential element in the transactions we are involved in because they all must make economic sense. But, again, design has been the hallmark of our company since its founding, as it will continue to be.

As the CEO of OliverMcMillan, I have my hands on the design of every project with which we're involved. And I can tell you that the limitation on our ability to grow will be our continued ability to deliver top-notch design. 

Where do you find your architects? 

All over. We try to find architects who are very sensitive to the urban development process; we consider ourselves to be urban developers, city-makers. There isn't a project description we don't handle—be it entertainment, retail, or residential—but the work that we do will be urban. And in every City, we go into, we assess the uses that are already there and those the city needs to grow and prosper.

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