Autumn on Lake Thoreau

Autumn on Lake Thoreau

Friday, October 31, 2014

Successful Clarabridge expands Reston office space, and provides another lesson in office space planning.

BIZNOW reports that Reston's Clarabridge, a young social media marketing research firm, is expanding its office space next to the Wiehle Metro station by about 40% to accommodate 80 new employees within the next year.  Great!  It is precisely the type of high-tech start-up that Reston wants in its emerging Silver Line transit station areas. 

Here is a little of what BIZNOW has to say:
Clarabridge will increase its 250-person workforce by 40% next year and has just doubled its Reston HQ. Naturally we wanted to hear more, so we stopped by the software firm right in the middle of moving day. . .
CEO Sid Banerjee . . . says Clarabridge’s growth is coming from large customers like DIRECTV, Walmart, and Best Buy that want to know what people are saying about their products and services. Clarabridge, launched by Sid over seven years ago, pulls customer feedback from social media and from surveys and call center data and turns it into recommendations. He says the company is on the road toward an IPO in the next few years.  . .
Sid, trying out a treadmill desk, says revenue has grown 55% and head count has grown 50% this year. That's why the company took another floor in the Reston building where it’s been for several years. The company will occupy both floors, doubling to 42,000 SF. The new space allows the company, which also has offices in San Fran, London, and Spain, to hire roughly 80 more people in the next year. . . 
Its new floor, which formerly housed a government contractor, was also redesigned with Silicon Valley in mind. (SVP) Emily (Markmann) toured 28 startups and midsize companies, including Salesforce and Etsy, to get ideas. Those ideas included private and open collaborative spaces, private rooms, exposed floors and ceilings, and large colorful disks hanging from the ceiling that control noise. . .
From an office space perspective, Clarabridge is an excellent example of what future office space will look like, especially in the high tech industry Reston and the County are pursuing.  

And, oh yes, the 42,000 square feet of space will serve 330 employees--250 current and 80 prospective.  Getting out our slide rule, we find that the space allows 127 square feet of space per employee--which we presume are "leasable square feet."  As we pointed out in a letter (p. 8) to County Board Chairman Sharon Bulova more than a year ago, that translates into about 144 gross square feet (GSF)--the metric used by the County to plan future office space--per employee.

Unfortunately, the County insists on using 300 GSF per employee as its planning metric as noted in this letter responding to our point from the County's planning chief, Fred Selden.  Why?  Because Houston has an average of 300 GSF per employee and so do nine firms in the Reston-Tysons area!  Of course, all of these firms are legacy businesses, not the new companies the County is theoretically trying to attract.

The result, of course, is that Reston's transit station areas will over time see about twice the employment that the planning process projected if developers are successful in filling out their land as planned.  Unfortunately, the transportation planning for these areas is also based on one worker per 300GSF of office space.  The result will be, at bets, about half the transportation capacity--roads, buses, pedestrian & bicycling capabilities--the community needs to meet even the most basic transportation standards.  It will result in absolute gridlock on local roads, including community thoroughfares through the station areas.  Ultimately, it will erode the attractiveness of Reston's station area development.

The County can change the plan now, but once it translates the plan into zoning decisions, the densities can not be revised downward in this property rights-obsessed state.  And don't look to the Board of Supervisors for forward thinking on these matters, especially when they see developers at the way to County financial nirvana where no tough budget decisions need be made.

We will continue to point out how new and expanding firms in Reston's urban areas are leasing and furnishing their office spaces for the future of work in which telework, collaboration, and cost efficiency are the principal drivers.  We hope that our leaders will learn this rather sooner than later in the face of a County office space vacancy rate now running near record high levels.  In its third-quarter office “snapshot” report, Cassidy-Turley (CT) puts Fairfax County’s office vacancy rate at 16.3% and total office space availability (including currently occupied, but available space) at 22.7%.  It puts Dulles Corridor vacancies and availability as follows:


Location                 Vacant                Available
                                                                Tysons                     17.1%                     24.3%
                                                                Reston                     15.3%                     22.1%
                                                                Herndon                   12.5%                     21.3%

Together, there is more than 13,000,000 (yes, 13 million) leasable square feet of office space available for lease in these three areas, 4,000,000 GSF of which are currently vacant.

 
Like the workspace Clarabridge is so carefully re-cycling into a contemporary creative office environment, there is at least room for 116,000 more office workers along the Dulles Corridor at 150 GSF per worker before developers need to pour any concrete.  Now the County needs to find companies that can be as successful and creative in doing so as Clarabridge.

Keep up the great work, Clarabridge.  The County Board of Supervisors needs to learn from your example about the future of office space in the Dulles Corridor. 

Thursday, October 30, 2014

Reston, not Tysons, begins to dominate Northern Virginia real estate, WaPo, October 30, 2014

October 30 at 11:34 AM  
 A busy intersection in RestonTownCenter. (Melina Mara/The Washington Post)
It will be years before we’ll know whether the vision for an urbanized Tysons Corner will become a successful model for re-inventing suburban areas. The long-range plan for overhauling Tysons is just four years old and Metro’s Silver Line trains have only been arriving there for three months. . .
But while multiple projects in Tysons, most notably Macerich’s Tysons Tower, are attempting to combine enough new uses to create dense, walkable areas, none are likely to catch Reston Town Center any time soon.
Working off a plan devised by Robert Simon 50 years ago, a four-block area of Reston Town Center combines 2.8 million square feet of office, 50 shops, 30 restaurants and three residential high-rises.
Tysons, to this point, still doesn’t really have any areas with a walkable grid of blocks, much less a neighborhood or node that dense. . .
(Sarah) Dreyer (Director of Mid-Atlantic research for Cushman & Wakefield) points out that some of the newer offices in Tysons are shaping up as strong competitors to buildings in Reston, particularly those that can offer closer access to the Silver Line than Reston Town Center will be able to. But the plan for Tysons is four years old. The plan for Reston is 50 years old. That’s a 46-year head start.
To be fair, the original plan for Reston Town Center's current development was approved a mere quarter-century or so ago, not a half-century ago, but two decades is still a heck of a head start.

Over the longer term, however, the more important point is that Tysons is planned for much more intense mixed-use development than Reston Town Center or either of Reston's two Metrorail station areas.  That Reston plan was updated last year with much greater commercial and residential density  as part of the Reston Master Plan process.  Indeed, the planned infrastructure to support Reston Town Center's development would choke trying to support the kind of development planned at Tysons.  In fact, we believe its transportation, education, and parks & recreation planning for Reston Town Center is terribly inadequate even for the densities now planned there and well below existing County planning standards and guidelines. As a result, the Town Center area will be less able to handle traffic and meet the recreational needs of its residents, workers, and visitors than Tysons if they both develop as their new plans propose. 

Maybe long term Tysons will turn out to be the better, more walkable, more accessible, more attractive mixed-use urban area than Reston's Town Center.  We certainly hope not, but that is what the two plans currently offer!
 

$100 million in transportation projects on Fairfax County ballot, Robert Thomson, WaPo, October 30, 2014: Reston 2020 encourages Restonians to vote "YES!"


Voters in the D.C. region’s most populous jurisdiction will be asked on Tuesday to approve a new round of investment in their transportation system through a bond program.
Fairfax County is among the local jurisdictions that periodically go to the voters for permission to finance transportation construction through the bond markets. The road, pedestrian and bike projects to be financed through bonding are just a portion of the county’s $1.4 billion transportation program for the next six years. So looking at the list of bond projects doesn’t reveal much about the county’s overall plans for developing the transportation infrastructure. Also, Fairfax residents, like those in other jurisdictions, travel on roads and rails developed with federal, state and private funding. . .
Tom Biesiadny, Fairfax County’s transportation director, said some of those other sources are better suited to finance major road and transit projects. So the money raised from the bonds would target some spot improvements in roadways, as well as trail and sidewalk improvements that would improve community connections to schools, transit hubs and other centers of activity.
This is a "must read" article for those headed to the polls next Tuesday.  The Post's Robert Thomson lays out the $100 million bond referendum that is a small part of the County's $1.4 billion six-year transportation plan, primarily funded by federal and state resources.  The $100 million in this referendum will go to spot road, pedestrian, and bike/path improvements.   

In Reston, four important pedestrian/bicycle improvements are on the list:
  • Sidewalks on Sunrise Valley Drive that will make access to the Wiehle Silver Line station easier and safer.
  • A sidewalk on South Lakes Drive from the village center west to Soapstone that will make it safer and easier for kids to walk to/from the high school and intermediate school.
  • A pedestrian/bike along Fox Mill Drive that will make biking and walking there safer and easier to reach the Fox Mill shopping center.
  • RMAG-recommended pedestrian/bicycle improvements near the coming Reston Town Center Silver Line station.
For the full list of projects, click here.
The County's transportation infrastructure is probably its most pressing and enduring problem.  This bond will be an important first step in addressing our traffic and safety problems.  We strongly encourage Restonians to vote "YES" on this bond referendum and, most importantly, VOTE next Tuesday.

Friday, October 24, 2014

We wonder if Boston Properties ever thought about this for Reston Town Center?

At the last meeting of the Reston Master Plan Phase 1 Task Force, Boston Properties' representative on the task force, Peter Otteni offered an amendment to the draft plan changing the parks language for the transit station areas from requiring twenty percent open space to establishing twenty percent open space as a goal.  In human-speak, a County planning "goal" means, "yeah, yeah, whatever"--that is, nothing.  The developer and developer attorney dominated task force approved the the amendment; RCA voted against it.

Now we learn this:
Open spaces in urban areas not only improve communities but can add billions of dollars to adjacent commercial real estate properties, agreed panelists at the Urban Land Institute’s (ULI) Fall Meeting, being held this week at the Javits Convention Center in New York City. . .
According to the Trust for Public Land’s annual survey of 100 U.S. parks, Harnik noted, cities are being “brought back from the brink,” in some cases, or pushing forward economically due to parks development, including Chicago, Atlanta, Seattle and Denver.  . .
(Peter) Harnik (Director of the Trust for Public Land’s Center for City Park Excellence) cited six benefits for property owners derived from investing in parks development:
  1. Reduction in air pollution, water pollution and flooding
  2. Direct use by local residents, who are able to participate in no-cost or low-cost in activities
  3. Improved health for the local populace
  4. Increased tourism (for instance, Central Park’s exhibit of Christo and Jeanne-Claude’s The Gates  drew 2.8 million people during February 2005)
  5. Increased property values, in turn bringing higher property taxes
  6. Elevated office rents in adjacent properties. . . .
While Reston Town Center has so far been relatively resilient in the face of the office market recession in Fairfax County, Reston's other station areas continue to suffer.

Maybe it's time to re-think the language in the Reston Master Plan for its station areas.  Everyone--developers, tenants, residents, the County, shoppers, and more--would benefit from being assured that at least one-fifth of the available space in these areas would be open space.   Moreover, it would significantly reduce the huge deficit currently planned in parks and athletic facilities in Reston's transit station areas.   

RA looking at possibility of annual assessments based on property values.

We know that most of you don't read RA News, RA's weekly e-mail newsletter.  Indeed, even though we receive it, we rarely look beyond the headlines.  And it took an alert Reston reader to bring to our attention this one-liner under the topic "Sustainability and Community Viability" on p.4 of the CEO's report in this week's newsletter identified as an RA Board goal :

"--Examine the Association’s flat rate assessment structure with an eye toward moving to one based on property values."
We don't know anymore than that, and it is likely the RA Board doesn't know much more than that.  Moreover, we haven't assessed the implications of such a move on our own, so we don't have a perspective on the topic at this time.  In general, of course, those Restonians with higher-valued properties--largely single-family homes--would pay higher annual dues than those with lower-valued homes.  Moreover, we have no idea how this would affect rental properties, including affordable housing units in the community. 

But you need to know and understand what your RA Board is considering.  


Does Loudoun's broken development apply in Fairfax County? Quite likely.

James Bacon, Bacon's Rebellion, writes that Loudoun County has a broken development model largely dependent on a growing commercial office market that is just not going to reach there.  Here is some of what he has to say:
Office workers need less space than they once did. Over the years businesses’ space needs per office employee have shrunk from approximately 250 square feet to less than 190 square feet, says Ben Keddie, vice president of Coldwell Banker Commercial Elite, as quoted in the Fredericksburg Free Lance-Star. Office space is expensive, and businesses have learned how to function with less of it. With the rise of the mobile workforce, open work spaces and office hoteling, it is easier than ever to conserve space and rein in lease and rental costs.
That trend has dramatic, if unappreciated, consequences for local governments’ real estate tax base and the management of growth and development. If businesses need less office space per employee, they need less office space overall. Which means the cost of office space drops. Which means developers build fewer new office buildings. Which means local governments are finding it harder and harder to grow their tax base.
Loudoun County in Northern Virginia, it appears, is facing that very problem. “A softening commercial office market has made it difficult for developers to make money on their commercial land, because there are fewer companies interested in large parcels,” reports the Loudoun Times. Indeed, it might be said that outlying counties in the Washington metropolitan region are facing a trifecta of troubles regarding commercial real estate: (1) business enterprises are shrinking their office footprints everywhere; (2) sequestration-related budget cuts have dampened demand even more in the Washington region; and (3) when Washington-area businesses do seek new digs, they show strong preferences for walkable urbanism, a higher-density, mixed use pattern of development that accommodates walking, biking and mass transit. Walkable urbanism is found mainly in the region’s urban core and along Metro lines, not in low-density burbs like Loudoun.
Not surprisingly, Loudoun’s supervisors appear to be adrift in dealing with these trends. . . .
And so too does the Fairfax County's Board of Supervisors.  Even with the Silver Line extending through Tysons and Reston to Dulles Airport and beyond in the future, commercial office space vacancies remain near all-time highs in both Tysons and Reston.

Already the Board has had to shift a growing share of the burden of property taxes to residential owners because the commercial office market is simply not growing.  And, as the office market continues to stagnate, residential property values will also stagnate (if not decline) in the face of a lack of employment growth and property tax rates as well as actual property tax bills will need to go up to feed the County spending beast.  This image from Bacon's post pretty much says it all:

If housing stock like this Loudoun County beauty can’t cover its costs in infrastructure and services, the local governance model is badly broken.


We have pointed out multiple times to the Board why its expectations of massive commercial development at Tysons and Reston were unlikely to occur, highlighting the downsizing of office space per worker.  (The County's response:  Houston has 300 square feet of office space per worker.  Houston?!?!  Oh yeah, that's where Exxon moved its corporate headquarters to from Fairfax County.  If you want to see what we wrote, search "office space per worker" on this blog.)  And now Fairfax County is facing a decline in employment, especially in its high-value professional and business workforce focused largely on serving federal government needs, as Congress continues to prove it is incapable of governing the country--sequestrations, budget cuts, shutdowns, you name it.  And, of course, the County is not now and will be among the last to develop "walkable urbanism" like Arlington County in the face of reduced demand for the office space serving urban-style development.  Washington, DC, Arlington, and other close-in jurisdictions will be the beneficiaries of office space shrinkage, not Fairfax County--much less Loudoun.

Fairfax County's economic growth policy is based on the hopium of endless regional growth, and is bound to fail, possibly sooner than later.  

And please read all of Bacon's post here.

Library advocates to meet tomorrow in Oakton at 11:30AM.



Dear Fellow Fairfax Library Advocate:

It has been exactly a month since we met at the Tysons-Pimmit branch and a group of us decided to take a more activist approach to saving our libraries. Sadly, as you are probably aware, recent news has not been all that good - 21 staff positions slated for elimination, further cuts proposed, no action yet on the Federation's call for fiscal assurances that County and the Friends' funds are being appropriately used and the continued diminution of the system's book inventory.

A lot will be happening between now and the end of the year and it is incumbent of us to see that our voice is heard. I propose we get together at 11:30 am, Saturday, October 25 at Oakton Library, 10304 Lynnhaven Pl, Oakton, VA 22124 to discuss a plan of action. Please let me know if you can attend. If there are other individuals who you believe could add to our efforts, by all means bring them along.

Between now and then please also think about how we can craft a focused message that will encompass all the various issues before us.

Best regards, Dennis

Dennis Hays