VOLUME 5, NO. 1 IDAHO BUSINESS REVIEW 2019 Property and Facilities Management

INSIDE: • Adding amenities to attract offi ce tenants • Finding the best use for downtown Boise’s parking lots

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Idaho Power is surrounded by surface parking lots. Photo by Teya Vitu. Surface parking lots are the recipe

By Teya Vitu for downtown Boise’s future Special to the IBR

Downtown Boise is one big surface parking lot. A map of surface parking lots shows downtown awash in car- bedecked asphalt and dirt. If you mass all the surface parking lots together, it would equal 28 city blocks – the equivalent of the entire heart of downtown: 5th to 12th streets and Main to State streets. The surface parking lots add up to 84.4 acres within the more or less 1867 township boundaries of Boise, what is considered today’s downtown: Fort to Myrtle streets and Broadway/Avenue B to 16th street, according to calculations by Carl Miller, principal planner at Community Planning Association of Southwest Idaho (COMPASS), the region’s metropolitan planning agency. That exceeds the 73 acres of Boise Towne Square, Boise Towne Plaza and their parking lots, all operated by General Growth Properties. The one major exception is the 10-block Central District urban renewal zone that the Capital City Development Corp., the city’s redevelopment agency, has built up for the last 30 years with signature projects. One thing is certain, a vast number of those surface lots will evaporate in the coming years and decades. Even Jeff Wolfe, overseer of the most surface parking lots in downtown Boise, recognizes the eventual demise of surface parking lots. “They are going away,” said Wolfe, president of The Car Park, downtown’s largest surface and garage parking operator. “In most cases in a downtown urban core, surface parking is not the highest and best use. Surface parking is an interim use in most cases.” The question is what will the future downtown Boise look like? Would Mayor Moses Alexander 100 years ago ever have imagined today’s downtown Boise? The first 12-story building didn’t even Surface parking lots cover 84.4 acres of downtown Boise. Image courtesy of Community Planning Association of arrive until 1930 with the Boise Hotel – today’s Hoff Building at Southwest Idaho. Eighth and Bannock streets. The Idaho Business Review posed this theme to a number of structures that even historians won’t defend. And, in this age of 1980s and 1990s eventually resulted in the Boise Centre, Grove downtown adherents: what could, should, needs to be done with disposable architecture, anything built today or in the past 50 Hotel, CenturyLink Arena, Wells Fargo building and Clearwater all these surface parking lots and what should not be done? years could be wiped clean in the next 20 to 30 years. building. Three of the four downtown Boise hotels opened in the past The responses were as widespread as the respondents The entire downtown Boise footprint could be rethought in the two years were erected on parking lots and so was the Hampton themselves. next 50 to 100 years. For now, this exercise will focus on surface parking lots. Inn a decade earlier. The proposed fifth hotel, Home2 Suites by We already know what has been happening with surface Hilton at Front and Sixth streets, will also claim a surface lot. Today’s downtown Boise parking lots in recent years and decades. Everything around Downtown Boise is at a profound crossroads that could impact the Grove Plaza started as a wasteland created by urban renewal the remainder of the 21st century. Idaho started 2018 as the fastest Surface parking lots are but an 84.4-acre-recipe for downtown clearing away a century of history for a downtown shopping mall growing state and COMPASS predicts metro Boise’s population Boise’s future, roughly 18 percent of Boise’s boundaries in 1867, that never came. will reach 1 million in 2040 and will undoubtedly continue to today’s basic downtown. There are plenty of aged one-story An impromptu four-block dirt parking lot surface until the late grow after that. January 18, 2019 | www.idahobusinessreview.com| SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | 5

Surface parking lots are a large key to the future downtown as are older, not necessarily historic, single-story structures at the edges of downtown. A multitude of unknowns confront leaders and visionaries as they chart the next generation of downtown Boise. One thing certain is the future is now, said Paddy Tillett, a Portland architect at ZGF Architects who 30 years ago shaped the Grove Plaza and Eighth Street pedestrian-friendly heart of downtown. “I think the time is now,” Tillett said about considering the future of more than 75 surface parking lots. “One needs to take the initiative now.” Th at won’t be easy. As much as city leaders have been consumed with downtown redevelopment for 50 years, the focus has been on buildings – fi rst demolishing them in the 1960s and 70s and then building new ones since the late 1980s. “We don’t have a coherent strategy to get rid of surface parking lots,” said Daren Fluke, comprehensive planning manager at the city of Boise. Parking, of course, is a hot-button issue. People sense it’s hard to fi nd a convenient parking spot and it costs a lot – if you don’t compare parking rates to any other big city within 1,000 miles. “Th e fundamental question is how much parking do we need and nobody knows that,” said Diane Kushlan, former district council coordinator at the Urban Land Institute Idaho and a comprehensive planning and zoning consultant. “Th ere is a whole future of unknowns. From my experience, there’s not a lot of strong visions about downtown.” Dan Everhart’s passion is historic preservation as an independent architectural historian and former Preservation Idaho board member. As much as surface parking lots aren’t cataloged, neither are downtown Boise’s century-old or more buildings. “We need a thorough documentation of the downtown core,” Everhart said. “I tell you there are old buildings that don’t need or deserve to stay in play. We don’t know much about what is out The 28 blocks of combined surface parking lots in downtown Boise would stretch from Fifth to 12th streets and State to there. We don’t have a complete inventory of historic places.” Main streets. Drawing by Teya Vitu.

‘Best use’ for parking lots a major Look at the potential of the block. Th at might be higher or Manhattan neighborhoods from demolition for a proposed lower.” expressway. CCDC named its conference room aft er her. question as Boise grows CCDC Executive Director John Brunelle thinks similarly as David Hale headed up several Linen District redevelopment head of the city redevelopment agency. projects and recently completed the 14th and Idaho Townhomes. Boise started going vertical in 1900 with the Idanha Hotel “I think Idaho Power and Boise Plaza set the tone for “I think land constraints in downtown demand higher and a string of others for the next massing and height,” Brunelle said. “I think Idaho Power sets density,” Hale said. “Th at requires going vertical. Density and 15 years, but six stories was the the standard of height in that part of town.” height go hand in hand. We can’t continue to build four-story ceiling at that time. Th is was not New one-story structures or anything much below four buildings. We have to be able to allow density and height.” exceeded until the Boise Hotel stories don’t seem to fi t into downtown Boise’s future. Carley and Schoenherr address how Boise fi ts in the (today’s Hoff Building) rose in “Single story buildings should be disallowed altogether,” hierarchy of American cities. No matter how many million 1930. Th e state Capitol remained architectural historian Everhart said. “Let the developer decide people eventually live here, Boise may always be a smaller city the tallest building until 1975. how high to go. You probably shouldn’t build below four stories.” in comparison. Today, 11 towers reach nine “What shouldn’t get built are the one- to three-story “We are a tertiary market,” Carley said. “Tertiary markets to 18 stories. Conceivably, buildings,” said Scott Schoenherr, partner at Boise real estate develop much slower and at a diff erent scale.” downtown Boise 100 years development and management fi rm Rafanelli & Nahas, which Schoenherr doesn’t see very tall towers in downtown Boise from now could be towers from owns Boise Plaza and Key Financial Center. “We want to be able Broadway to 16th Street if not to increase density.” any time soon. “It’s tough,” Schoenherr said. “Boise is still a small market.” Clay Carley beyond. CCDC Commission Chair Dana Zuckerman thinks of “Fift y to 80 years from now we people fi rst and second. Schoenherr gets aggravated with city leaders pushing the will be a Denver,” said Clay Carley, general manager of Old Boise “We should not have towers and not one-story buildings,” defi nition of downtown outwards all the way to Whitewater and developer of several downtown projects. “Some developers Zuckerman said. “It’s the medium-sized buildings that create Park Boulevard, the former 30th Street. will have 50- to 60-story buildings. Th e market will drive it. We the best experience for the city. Jane Jacobs said six stories is the “Why are we worried about 30th Street?” Schoenherr should go as high as possible, go as high as the market allows.” perfect size. Th ere is no street activity created by towers as by ponders. “We have a lot of stock we should be focusing on Tillett doubts Boise will become a mini-Manhattan. small buildings.” fi lling here (between 1st and 16th streets). We’ve gotta keep our “I would answer it is highly unlikely,” Tillett said. “Look at Jacobs gained fame in the 1960s with her treatise, “Th e Death downtown dense. If somebody wants to build at 30th, why are three blocks in each direction and look at what’s compatible. and Life of Great American Cities,” and led campaigns to save we not building it at 12th?”

Freak Alley is a surface parking lot that evolved into a signature downtown Boise attraction. Photo by Teya Vitu. 6 | SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | January 18, 2019 | www.idahobusinessreview.com

Beyond the towers

Boise has been the City of Trees since Day One. Copious tree planting was a priority as soon as Boise was established in 1864. Downtown today certainly has pockets of groves, but much of the city center is fairly sparsely adorned with trees. Trees came up quite early in the Idaho Business Review’s chat with Tillett, the Portland architect responsible for the Eighth Street-Grove Plaza dynamic of downtown. “One could expand the tree canopy,” Tillett volunteered without a tree-related prompt. “Th e best way to create shade is to plant trees. Th ey need not be on the (parking) lots but on the edges of lots. Expanding the tree canopy is important. Th e city could help with tree planting. Phil and Diane Kushlan, Boise is a carpet of tree tops as seen from Table Rock. Photo by Teya Vitu. principals at Kushlan|Associates, have noticed development talk is almost always site-specific, but little attention goes to how Diane Kushlan everything ties together. The Kushlans are consultants to local governments for urban renewal, strategic planning and municipal administration. Diane’s focus is on comprehensive planning and zoning, and Phil is past executive director of CCDC. Diane Kushlan does acknowledge the Pioneer Corridor, the paved pedestrian/ bicycle path from the Boise River Greenbelt that feeds into downtown east of 11th Street Phil Kushlan and through Jack’s Urban Meeting Place. But that’s an exception. “We don’t have a vision to make contextual links,” said Diane Kushlan, a past district council coordinator at ULI Idaho. “There is no layer of looking at context. How does this all fit together? We have bits and pieces: Eighth Street, Pioneer Corridor, Freak Alley, Broad Street.” Along with context, downtown needs texture, said Skip Oppenheimer, CEO of the Oppenheimer Companies, a Boise-based nationwide food distribution and real estate development firm. The High Line in New York City reclaimed an abandoned elevated freight railroad line for pedestrians. Photo by Teya Vitu. Brothers Skip and Doug Oppenheimer twice were pioneers in downtown development. They built the 14-story One Capital Center tower in 1975, a period where nobody was building towers in downtown Boise. Then they followed in 1988 with the 11-story First Interstate Bank building (today the Wells Fargo Building) in an era when today’s Grove Plaza area was still largely a four-block dirt lot. “One of the things that creates texture is creating downtown neighborhoods,” Skip Oppenheimer said. “You can amplify different parts of downtown to create neighborhoods. You can help amplify the character of each of these areas. You have to look at a mix of elements to have a vibrant downtown. It’s land use. It’s urban design. It’s transportation. It’s sustainability. How do you create a continuing vibrant urban center?” Phil Kushlan looks to New York City’s High Line on Manhattan’s West Side. Community activists convinced the city to convert an abandoned rail freight line into a 1.45-mile public space for pedestrians and bicyclists with nature and art elements. Kushlan said when downtown development focuses on buildings, people can get lost in the equation “It’s supposed to be a place for people,” he said. “The High Line in New York City is huge. Looking back and having not done it would have been a loss.” “We have our own High Line: The Boise Canal,” Diane Kushlan said. “We can daylight it and at least maintain the right of way (as a pedestrian path).” That would follow Caldwell’s lead, where a few blocks of the covered Indian Creek in downtown were uncovered with park features added on both banks, which led to creation of Indian Creek Plaza, Caldwell’s new gathering place with a stage and winter ice skating rink. There is an active Boise Canal that flows underground through the Basque Block and then under the Front Street sidewalk along the Grove Hotel and Boise Centre and under the Safari Inn before veering toward the North End. “(Uncovering the Boise Canal) has been an idea that’s been out there for a while,” said Leon Letson, a city associated planner, in a 2016 interview. “This came from the development community: ‘Is there a way to do something with that and make it a public amenity?’” Much of the canal has been underground since the early 1900s, though the section on West Grove Street wasn’t covered until the Safari Inn was built over it in 1966, said Mike Johnson, the canal’s water manager.

Downtown Boise’s skyline. File photo. January 18, 2019 | www.idahobusinessreview.com| SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | 7

A 10-story tower is planned for 11th and Idaho streets. Image courtesy of Rafanelli and Nahas. Downtown apartment developments development to surface lot owners. The key is to find owners to Downtown housing lagged behind but became a top priority in voluntarily step up. 2014 with the release of Urban Land Institute Idaho’s study, “The often supplanting parking lots “One could demonstrate the potential increase in income,” Next 1,000: Stimulating Housing in Downtown Boise.” The goal Tillett said. “Walk them through the process. They stand to make was to create 1,000 new residential units in Downtown Boise by a great deal. This is about presenting an opportunity. Make it clear 2019, since revised to 2020. In December 2017, Diamond Parking put in a winning bid of that it is not a coercive program.” Since 2014, developers have completed 390 downtown $1.59 million at an auction of state-owned commercial properties The Capital City Development Corp. has studied every surface residential units with another 347 under construction and 250 for three surface parking lots in downtown Boise’s east side with a parking lot within its 144-acre Westside urban renewal district under city review for a total of 1,658 new units, according to city combined 54 spaces on lots adding up to just .41 acre. that roughly runs from Ninth to 16th streets and Grove to State/ of Boise statistics. “These are postage size lots that sold for a fortune at auction,” said Washington. These include The 951, One Nineteen, The Watercooler, The John Brunelle, executive director of the Capital City Development “Every surface lot on the West Side has its own story behind it,” Fowler, 14th and Idaho, Ash Street, The Afton, River Street Lofts, Corp, the city redevelopment agency. “Time will tell if they go CCDC CEO Brunelle said. “Some will remain surface lots for a Fifth and Idaho, The Owyhee, and the proposed River Caddis, vertical. For now, I’m glad to see them back on the tax rolls.” long time. (We have to) educate them that they can do even better The Cartee and Scot Ludwig towers. Diamond Parking operates 15 parking lots with 1,600 spaces on financially if they go vertical.” Livability.com, a real estate research and education website, in leased property in Boise, but these are the first lots in Boise that With CCDC Central District urban renewal district having 2016 named Boise the No. 6 best downtown. Downtown Boise Diamond Parking own, Dan Geiger, vice president of Diamond ended its 30-year run Sept. 30, Brunelle is especially intrigued was fourth among 19 U.S., Canadian and Mexican cities in the Parking’s Spokane region, said at the time of the 2017 auction. with the potentials in the Westside District. Expedia Viewfinder Travel Blog’s list of North America’s Coolest He said Diamond Parking will continue operating the lots for “We have identified several surface parking lots where we will Downtowns. parking but development would be considered. be partners on development in the next five years, probably four “I hear, ‘As soon as our third child graduates, I want to live “We’re happy to have a developer build something,” Geiger said or five blocks worth,” Brunelle said. downtown,’” said Schoenherr, partner at Rafanelli & Nahas, who in 2017. himself recently moved downtown. “I’m shocked how many David Hale, the downtown developer who coined the phrase people want to live downtown.” Linen District, said some parking lot owners see more value in People want to live downtown again Housing development likely will be the big player in downtown parking lots than development. throughout the 21st century. Downtown’s increasing popularity “It sold for twice the amount for what a developer would have In 1867, everybody lived and worked between Front and Fort will drive housing growth, but there is an equal necessity to paid,” Hale said about the three Diamond Parking lots. “It’s more streets and First and 16th street. That was the township four years convert surface parking lots into housing. valued for them to add surface parking.” after Boise was established. “People are going to have to live somewhere,” said Phil Kushlan, Across the country, downtown parking lot owners often see People first starting moving east on Warm Springs Road a former CCDC executive director. “You’re either going to live in more value in collecting parking fees than developing the lots, and north on Harrison Boulevard and 13th Street in the 1890s, a downtown environment or plow alfalfa fields.” but Tillett believes lot owners can be won over. followed by the relentless push west until Boise and Meridian One term in vogue is mixed-use development, which invariably “The big thing is most parking lot owners are not developers,” city limits first touched in 1999. Today Idaho’s two biggest cities boils down to street level retail, offices above that and condos said Tillett, an architect, planner and urban designer with over touch for 5.39 miles, according to calculations by the Community and apartments above that. Or at least the retail and residential 40 years of experience. “They are thinking of returns. For some Planning Association of Southwest Idaho. elements, which are in play at The Watercooler and The Fowler people, it’s a steep learning curve. It looks like it’s too big a bite By the 1960s and 1970s, in Boise and across America, apartments in Downtown Boise. to take. The reaction is ‘Look, I’m happy with my income every downtowns had lost their allure for living and large-scale retail. Diane Kushlan, a former Urban Land Institute Idaho district y e ar.’” Boise’s downtown revitalization got started in 1985 with four council coordinator, sees more to mixed-use development than Tillett said urban economics demonstrates surface lot owners pillars to provide the foundation for modern Downtown Boise: retail, office and residential. could make higher income developing their lots. He said city Eighth Street, Grove Plaza, parking garages and housing. The first “Mixed-use also needs day care, schools, churches and parks leaders need to become fluent in displaying the benefits of three pillars emerged soon thereafter. that support the other three,” Kushlan said.

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Wolfe believes more garages will replace surface lots. Dirk Kempthorne thinks the same. “Parking structures were the first thing we did,” Kempthorne said, recalling his days as Boise’s mayor in the 1980s when he led the way for the revitalization that created today’s downtown. Kempthorne, who went on to be Idaho’s governor and U.S. Interior Department Secretary, still thinks garages are in downtown Boise’s future development. “There is a lot of benefit to it and good use of space,” Kempthorne said. Some surface parking will likely remain long into the future. “The first thing one needs to do is survey the use (of parking lots),” said Tillett. “Some are active, Idaho Power for example. Set some sort of threshold. If they are two-thirds occupied, those probably stay surface parking for the foreseeable future.” Rafanelli & Nahas has proposed a 10-story tower at 11th and Idaho streets and a public park at 11th and Bannock – all on a surface parking lot that covers nearly the entire block. A small patch of surface parking for a couple dozen cars would remain at 11th and Bannock. “To have a small amount of surface parking is favorable,” said Rafanelli & Nahas’ Schoenherr, referencing the 11th and Idaho project. Rafanelli & Nahas became landlords of nearly three blocks worth of surface parking when the Boise real estate development and management firm bought the Boise Cascade building, now Boise Plaza, in 2006. “One of our goals around Boise Plaza is to get rid of surface lots,” Schoenherr said. “We are systematically getting rid of them. We are working on something on the north side of the Hyatt.” The 150-room Hyatt Place that opened in May 2017 filled half a Boise Plaza parking lot, and the Boise Plaza garage filled another surface lot. “I think Rafanelli & Nahas is doing God’s work,” said Everhart, a local architectural historian. “I think they are the ones leading the change from a development standpoint.” Wolfe predicts surface parking lots will eventually depart downtown Boise. “What happens as the population grows and the city develops, the market really works itself out,” Wolfe said. As more buildings are built on surface lots, more garages are built. “I think that has worked out since Henry Ford turned out the Model T,” Wolfe said.

Conclusion

The future of downtown Boise, and specifically its surface parking lots, calls for not just planning but analyzing the inventory of buildings and lots and determining community priorities. “We should identify certain sites we expect density on,” Schoenherr said. “We also need to promote zero density: green space.” Not all surface lots are equal. “Identify which ones are underused resources,” Tillett said. “See what’s no more than three- Doug (standing) and Skip Oppenheimer. quarters used on the perimeter.” In the end, American cities essentially have evolved organically, the modern term being “market Alternative transportation, affordable housing critical issues driven.” Downtown Boise is no exception. Planning and visions can set the stage, but developers will bring it to life in their own way. in parking lot debate “You want density,” Schoenherr said. “You want the market to dictate that.”

Downtown apartments built in the last four or so years typically have monthly rents above $1,100 a month and generally $1,500 or more if you want any breathing space. That calls for a salary at least in the $45,000 to $50,000 range. Urbanists drive home that mixed-income neighborhoods are the key component to a thriving community. “We need to have housing for people who want to spend $1.5 million and people who make $12.50 an hour,” said Schoenherr. “We need to make sure we have housing for people at all income levels.” Without hefty construction subsidies, downtown housing is not affordable for hospitality or retail workers or much of the hourly-wage workforce. The 118-unit Adare Manor affordable housing project on Boise’s West End qualified for $890,526 in federal Low-Income Housing Tax Credits, $18 million in tax-exempt bonds and $1.2 million from the HOME program, all issued by the Idaho Housing and Finance Association. “One question is how do you serve a broad demographic?” said Skip Oppenheimer, CEO of Oppenheimer Companies. “I think (affordable housing downtown is) the key to the future. I think we’re proactively going about that.” “It does take collaboration,” added Doug Oppenheimer, president of Oppenheimer Companies. “It takes people that have the leap of faith to be the first in.” “There is a lot of chatter about affordable housing,” said David Hale, developer of the 14th Street Townhomes. “That chatter has been going on for the 20 years since I moved here. Those needs are always going to be there, especially since we’re always on those Top 10 lists. It’s very difficult to make those units pencil. Small lots and lower density won’t result in workforce affordable.” Schoenherr, who moved to downtown this year, pondered how to build housing in Boise that leases for less than $1,000 a month. “You’re never going to do affordable housing in a taller tower,” he said. “You need to figure out how to do affordable housing.” Tillett, the Portland architect who jump-started downtown Boise revitalization, suggests new housing should be market rate, while older housing is offered at lower prices for those with lesser incomes. “What has always happened is the newer housing is always more expensive,” Tillett said. “The older housing becomes more affordable. The more housing types you produce, the better the outlook for workforce housing.” In Ada County in 2017, no new home sold for less than $120,000, and only three new homes sold for between $120,000 and $160,000. Only 282 of the 8,265 existing homes sold for less than $160,000, and only 21 of those for less than $120,000, according to Intermountain Multiple Listing Service statistics. Many Midwest cities have median home prices below $120,000.

Future parking

Talk is rampant that parking needs will dwindle as alternative means of transportation emerge, that parking garages are already on the verge of extinction. The American reality is different. Nowhere in America is public transit a universal mode of transportation. Even in New York City, only 54 percent of commuters ride public transit. Portland, which is touted for alternative forms of transit, has a transit ridership of only 12 percent, according to the Census Bureau’s American Community Survey. “I don’t see office workers commuting from Caldwell take an Uber every day,” said Wolfe, president at The Car Park, downtown Boise’s largest garage and surface parking lot operator. “The parking garage will not go away. Parking is part of the urban environment that needs to be taking into account.” What does that mean for surface parking lots? January 18, 2019 | www.idahobusinessreview.com| SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | 9

Meeting over coffee in the lunch room fosters a close company culture for employees at CTA Architects Engineers. Photos courtesy of CTA Architects Engineers. ‘Amenities creep’ a closely watched office market trend By Steve Sinovic While corporate landlords have long offered To be the owner of a premier commercial packages and strategic decisions shaping offices, Idaho Business Review small, shared conference rooms and perhaps office building in 2019, it takes more than some a new way of landlording that he calls “amenities coffee or an on-site sandwich shop, time has left vending machines in break rooms and showers creep.” Building owners in Boise’s Downtown core those basic features in the dust. on the ground floor, said David Wali, managing Smart landlords are stepping up by offering are going that extra mile – and sometimes For a certain type of employer tapping into partner for Gardner Development Co. in Idaho. amenities and services folks need during the day investing heavily – in order to attract quality, a specialized talent pool, especially tech and He’s seen the future, and it’s increasingly one and “in (creating) spaces where employees want long-term and happy tenants. creative class workers, the workspace has become where the layouts of the tenants’ spaces foster to be in rather than just pass through,” said Wali Often, the strategy includes creating or more of an experience than a destination, and collaboration, promote employee well-being as with a smile. retrofitting spaces so current and future tenants new office designs give tenants the opportunity well as having an “enjoyable company culture.” “Simply put, we want to keep tenants happy,” can draw and hold employees, but also rolling to create the kinds of environments that work At a recent Urban Land Institute program in said Wali, whose team collaborates closely out amenities that fit perfectly for select tenants. best with their businesses, say observers. Boise, Wali discussed the design trends, amenity with clients on their design and amenities preferences. Gardner isn’t the only player looking to recast the office experience. How office developers and building owners decide what amenities to incorporate in their facilities depends on the submarket and what type of tenant they are trying to appeal to. “It’s clearly driven by the demographic,” said Scott Raeber, a broker in the office services division of the Boise office of Colliers International. “What we offer (to a tenant) in a high-rise Class A building probably wouldn’t be relevant to a call center tenant” in suburban markets, Raeber said. Owners of those properties typically will make the most basic of tenant improvements for cost-conscious clients. “At best, a new tenant can get by with new paint and carpet” as long as there’s decent Internet and phone connections. Newly built or remodeled spaces clearly are the biggest differentiators in the office market today for leasing up-drawing a majority of tenant interest, said Raeber. That interest stems from what many companies now value most: flexible space to grow into, food offerings close by and enhanced employee morale, which often includes after-hours kegs and games. Raeber helped client One Capital Center ink two of the larger office tenants in downtown Boise in the past six months: Jacobs Engineering and Vacasa. Both saw major tenant improvements, some of which were bankrolled by the landlord. Jacobs, a Dallas-based engineering group that CTA’s work space, which consists of the entire eighth floor of the 18-story building, was designed to create an office of the future. An open acquired CH2M, leased 27,928 square feet of work environment brings the entire team together. former J.R. Simplot Co. space on the 12th and 10 | SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | January 18, 2019 | www.idahobusinessreview.com

Between ping pong and skateboard races, the CTA team can let off some steam during lunchtime and breaks.

part of the 10th fl oors. Vacasa, a vacation home & Main building, the state’s tallest offi ce structure, our employees since they spend so much time management company, now occupies 34,308 and City Center Plaza, where technology together,’” said Wali of the company, which square feet of former Simplot space on the second company Clearwater Analytics does business. inhabits fi ve fl oors of the facility. and third fl oors of One Cap, which is owned and During a recent tour of properties owned A provider of web-based investment portfolio built by Oppenheimer Development Corp. and managed by Gardner, signs in the elevators accounting and reporting to over 9,000 clients, Th e 150-person Boise offi ce resembles the remind tenants of services on off er while they Clearwater worked closely with the landlord Portland HQ with prominent use of blue and white; work, including car detailing, dry cleaning, to create a cohesive, designed space where the open work areas; large, open dining/meeting/ping- oil changes, windshield replacement, valet fi rm was able to consolidate its operations from pong playing area and various nooks with seating parking and bike sharing – all with the help of a several locations, said Wali. Everything from built into walls. While Vacasa didn’t disclose tenant dedicated Gardner Co. concierge. beta bars for gamers, break rooms and outdoor improvement costs for the Boise offi ce, building Maximizing time for a more well-heeled patios to shower rooms, and even a basketball permit applications at the city of Boise listed the demographic (like lawyers, accountants and court that takes up the entire ninth fl oor were project valuation at $2.7 million. real estate brokers) are on the punch list of their included in the tenant improvements, said Wali. Th e same clean lines of Vacasa also are on must-haves, in which case laundry delivery, an At the Eighth & Main Building, CTA Boise is display at Jacobs. “You couldn’t’ fi nd two more on-site car wash and some concierge services the home to the fi rm’s second-largest offi ce, and diff erent tenants, but you’d have a hard time are highly welcomed, said Wali. home to more than 90 team members trained in telling which one goes with which workspace, “We want to be on the list of places to show” architecture, engineering and landscape design. thanks to the cool break rooms, pods that allow for tenants considering a move to a Gardner When they moved in fi ve years ago, the people to interact, lots of natural light and building, said Wali. principals also worked closely with the Gardner excellent coff ee and beer,” said Raeber. When Clearwater leased up, the owners team, and found the landlord very supportive of Th e latter is an amenity that really goes down had a strong interest in creating an experience the company’s tenant improvement requests. The 9th fl oor basketball court for well, especially with Gen Xers and Millenials, for its hardworking, active and sports-minded “Because of the creative nature of what we Clearwater Analytics employees was added said Raeber. workforce. do as an integrated design fi rm, an open fl oor to help make work a more fun place. Wali’s company’s holdings include the Eighth “Th ey said, ‘We want this space to be about plan offi ce” was the main priority, said Danielle

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Canine co-workers: Tips to a make your office dog-friendly Trademark Signs easily has the best greeters in Boise – and they ask for nothing in return except food, walks and love.

A bike in the lobby and showers and lockers are conveniences landlord Gardner offers to its tenants at City Center Plaza.

Hurd, director of client services. To capitalize on the firm’s skill set, CTA staffers were the architects of record on the design and build out, said Hurd. “We wanted to foster a sense of community; there are no private offices, and the principals are out with the rest of us,” which encourages team building, mentoring and knowledge- sharing, said Hurd. “We have over 90 people on this floor, yet it’s still very comfortable because of the space planning.” McGruber hanging out. Photo courtesy of Trademark Signs. Much like Vacasa, Jacobs and Clearwater, CTA’s office is flooded with natural light and The design and fabrication company allows employees to there’s an outside deck where folks can repair for fresh air and inspiration. bring their dogs to work, and on any given day, there can be They also have access to a gym in the building, up to four canines milling around the office at 915 W Royal which offers discounted rates to CTA employees, a dental office and access to concierge services Boulevard. The gang includes Kenny, a slightly nervous Shih like “green” dry cleaning and car washing service Tzu mix nicknamed the “Tibetan trembler”; Marlow, a mellow employees might want to pay for. Between ping pong, slow bike races and retriever/collie; McGruber, a terrier mix who looks a bit like a lunchtime board games in the café, the team can Muppet and Rikley, a regal Irish wolfhound mix. get competitive, but always in good fun, said “It is a nice perk. I don’t have a dog, but I come here and get Hurd, adding that it brings the same intensity to its clients’ projects. my dog fix,” said Rachael Studebaker, a graphic designer. “They Another company perk: never underestimate are a nice break throughout the work day.” the value of really good coffee to foster a happy and engaged work crew, said Hurd. “At our old Office visitors also get to enjoy a little pet therapy when they space, the coffee wasn’t as good, so this was a big stop by. The company’s regular postal workers often bring dog priority” when CTA moved to Eighth & Main. Between having a workspace that is the treats with the mail, and 99 percent of customers love the furry epitome of a modern office environment (CTA employees, Studebaker said. has a rotating art exhibit in its lobby), a number of other amenities check the box for certain The trend is also gaining ground nationally. Major employees, said Hurd, adding that a number of corporations like Amazon, Ben & Jerry’s, Bissell Homecare, them bike to work or use the free bus passes the Build-A-Bear Workshop and Clif Bar & Company are dog- company provides. Indeed, the CTA workspace has become friendly. a template for what an innovative office can Want to introduce canine coworkers to your office? Here are become for prospective renters in the building. “They (the Gardner Co.) regularly bring in three tips from Trademark Signs co-owner Jason Keeble. potential clients through our space,” said Hurd. “We’re something of a showpiece.” Owners of several other office buildings already are considering tenant-friendly designs TRAIN YOUR DOGS: and amenities concepts before they know who A list of some of the services available to those tenants are, said Raeber. Even older tenants while they work at City Center All of the animals at Trademark’s office are well properties are getting some love, with some Plaza. owners looking to jazz up old, nondescript offices behaved – none of them jump on customers, howl or with awkward floor plates and poor mechanicals. of One Cap which converted an office space into “Many landlords are going out on a limb to an upper scale pizza eatery called Firenza. mark territory. spec these kinds of open spaces. They feel safe in According to a Colliers International white making these kinds of investments,” said Raeber. paper, “Amenities: A Hot Commodity,” allocating And the buildings with the best amenities and only 3 percent of portfolio space to communal MAKE YOUR OFFICE EASY TO CLEAN: tenant services are typically leasing faster and features like gyms or dining areas was once the getting higher rents, said Raeber. industry standard. These days, owners should That said, the occasional accident is bound to Repurposing some office space, especially on expect to commit at least 10 percent of portfolio the ground floors for food, beverage and retail space to these amenities in order to remain happen now and then. “Having concrete floors providers, is also wise, he said. He cited the example competitive, the white paper concluded. helps,” Keeble noted.

BE FLEXIBLE: While Trademark’s dogs get along well, there is a risk for spats in offices with multiple pets, particularly if they only come in occasionally. If two dogs just can’t coexist, work on a schedule to alternate their visits.

Office developers are stepping up with amenities that go beyond just a mere workplace. The Gym in the Eighth and Main building in Downtown Boise is a popular draw for its tenants. 12 | SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | January 18, 2019 | www.idahobusinessreview.com Sidewalks can be path to nowhere for accessibility challenged

By Sharon Fisher Idaho Business Review

Since the Americans with Disabilities Act (ADA) was enacted in 1990, it has gone a long way to help people with disabilities – ranging from being in a wheelchair to visually impaired – gain access to public buildings. Getting to the buildings in the first place, however, can be another story. Curbs, pavement irregularities, construction signs, and more modern impediments such as scattered e-scooters can make access difficult. According to the Centers for Disease Control and Prevention, about 18.5 percent of adults in Idaho have some type of disability. “Sidewalks are a huge deal right now,” said Jeremy Maxand, board member for the Idaho Access Project, a Boise-based nonprofit that advocates for accessibility. Idaho isn’t alone. In Atlanta, a class action lawsuit was filed in 2018 under the ADA, claiming A newly constructed accessibility ramp in Roberts, Idaho, funded by the Idaho Transportation Department. Photo courtesy of ITD. the city wasn’t doing enough to maintain sidewalks. In Idaho, on both the state “It’s a hard situation because the law changes over time. Many of the Jeremy Maxand and highway district level, steps are underway to improve sidewalks were built long before the law existed. It’s an ongoing discussion. the situation. The Ada County Highway District (ACHD) is upgrading its transition plan, —Ryan Head, planning supervisor. created about 10 years ago and updated every 10 years, with an such as commercial destinations, he said. ensure its facilities are accessible, he said. annual report on progress made Currently, the county is at about 64 percent for curb On a state level, the Idaho Transportation Department toward implementation, said ramps and 60 percent for sidewalks. “It’s a hard situation (ITD) allocates $500,000 in state funds for competitive grant Ryan Head, planning supervisor. because the law changes over time,” Head said. “Many of awards to local jurisdictions to construct ADA-compliant The report is currently in its 90- the sidewalks were built long before the law existed. It’s an curbs/ramps, in addition to ADA improvements made as day comment period, which ends ongoing discussion.” part of the normal maintenance and construction of the state Feb. 8. That is, where there’s a sidewalk at all. highway system each year, according to Ryan McDaniel, project The report creates an “The lack of a sidewalk does not necessarily make it manager. Projects are ranked according to the ITD Transition Ryan Head inventory of sidewalks and noncompliant,” Head noted. “The requirement is that, if there’s a Plan priority and selected by a review panel comprised of ITD, pedestrian ramps and ranks sidewalk, that it be accessible for all people.” the Local Highway Technical Assistance Council and the them by how well they comply with ADA requirements, Head Generally, any ACHD project includes upgrading and Federal Highway Administration staff, and must be completed said. It also includes a priority list for repair or enhancement, improving sidewalk facilities, Head said. “With maintenance within two years, he said. he said. “We then know, when we go out and do a project, projects, we upgrade pedestrian ramps,” he said. “With road Last year, 139 ramps were funded in 14 cities in five where we can do those improvements,” with priorities being projects, when we do a widening, we rebuild the pedestrian ITD districts, for a total award of $655,581, including civic facilities, government locations, and “public attractors” facilities.” Aside from the legal requirement, ACHD wants to funding advanced from previous years, McDaniel said.

ITD’s map of proposed ADA ramp projects statewide. Map courtesy of ITD. January 18, 2019 | www.idahobusinessreview.com| SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | 13

Cities awarded grants ranged from American Falls to Weiser and grants were typically on the order of $60,000. Ironically, construction zones are sometimes the biggest impediment, Maxand said. “The amount of construction going on is significant,” he said. “That poses its own challenges.” A bigger problem is it isn’t always clear to people how to complain, and complaints aren’t tracked, he said. “This is a huge issue that is not really tracked by ACHD, so while we know it’s a problem, we don’t have a handle on the scope, or what is being done to address it.” In addition, the ADA itself was updated in 1998 and 2010 on items such as turning radius, sign height, and crosswalk push buttons, and some items that used to comply no longer do, Maxand said. “The expectation isn’t that all push buttons that don’t meet current requirements be removed and updated, but rather that ACHD prioritize which push buttons should be upgraded based on location and use,” he said. Construction signs on Broad Street blocked access for the disabled. Photo by Mel Leviton.

Preparation seen as key to crisis response

By Thomas Barstow Christ said. weeks of lost operations might have thought arrange for a temporary fix as quickly as BridgeTower Media Newswires At such sensitive times, companies must to have business-interruption insurance possible to avoid further damage from rain balance the human element of dealing but might not have thought through how pouring in for an extended period,” she said. Disasters strike, which is why businesses with a worker or a worker’s family while its contracts address obligations for filling A lot of times, owners are reluctant to have insurance. Nonetheless, a lack of other simultaneously taking steps to ensure orders, he added. report a claim right away, out of fear they preparation and an inadequate response can compliance with regulations, as well as “Businesses need to at least have an will incur higher premiums down the road. leave companies further exposed in a crisis. insurance policies, he and others said. appreciation for what could happen,” he said. That decision can be harmful, said Dana In a series of interviews, attorneys who “Planning for such things is first and One common mistake by companies is a Windisch Chilson, an attorney with the counsel businesses on insurance matters foremost,” said Joseph S. D’Amico Jr., failure to secure a property after an event, Harrisburg, Pennsylvania office of McNees outlined some pitfalls for companies that a senior shareholder in the litigation D’Amico said. If a fire or windstorm severely Wallace & Nurick. Policies routinely include aren’t prepared – from being underinsured department of the Lehigh Valley, damages a building, companies should language that requires a response within to facing regulatory penalties to being ill- Pennsylvania-based firm of Fitzpatrick Lentz strive to ensure that no additional damage is a given time frame. If those deadlines are equipped for a rebound. & Bubba. caused by subsequent weather, vandalism or not met, coverage issues might end up in Planning can pave the way for smart The attorneys said companies often fail to thefts, he and others said. litigation, she said. That can be avoided if a action immediately after an event, the completely understand the fine print of their Further complicating matters, the stress company and its attorneys understand the attorneys said. That means studying in insurance policies, which might cause issues of a situation also may cause companies to rules and limitations before issues arise. advance the regulatory and claims issues that when filing a claim. Boilerplate language make rash decisions. “Don’t be afraid to ask,” Chilson said. “If might surround an event. is designed to be one-size-fits-all, but a D’Amico recalled one company that you are covered, if you have a coverage issue, A fire, for example, is going to require company must make certain that its unique didn’t react quickly after a disaster and a you are better to check before an event.” different action plans than a roof that has circumstances would apply. That might mean municipality signed a demolition order, And once an event occurs, documentation been ripped off by a storm or an employee adding riders and notes to policies, they which the owner fought because he could becomes critical. That means lining up injured on the job, noted William D. Christ, said, which might seem obvious, but issues have done the work for less. The owner accident reconstruction experts, consultants a partner with Phillips Lytle, a law firm can be missed. It’s important that policies would have avoided higher costs and who understand loss issues and others who based in Buffalo, New York. be reviewed by an attorney – but most subsequent litigation if he simply had can be on call well before a storm, fire or Federal and state agencies, such as importantly an attorney who understands responded immediately. flood, Christ said. Experienced consultants the U.S. Occupational Safety and Health the details of how a company operates. Within the bounds of safety, companies will be sure to get photos and other evidence Administration require immediate responses “I tell clients to share insurance coverage should “deal with any emergency situation that can help when questions arise, such as when a worker is injured, so that should be with us,” Christ said. “Sometimes it looks as quickly as possible in order to minimize whether a roof blew off because of faulty top of mind for a company, said Christ, who like Swiss cheese – there are a lot of gaps and the potential loss,” said Kelly Smith Watkins, installation, poorly constructed materials or also is the firm’s litigation practice group holes.” an attorney with Norris McLaughlin, which another factor entirely. leader. That due diligence might also extend has offices in Allentown, Pennsylvania, New “That is why it is important to preserve “The reporting requirements can be to contract language, D’Amico said. For York and New Jersey. evidence,” he said. If a case goes to court, “a within a matter of days or even hours,” example, a manufacturer facing days or “If a tree falls through the roof in a storm, jury can decide who, if anyone, is at fault.” Watkins put it this way: “Don’t go it a l on e .” “Contact your broker as soon as possible to report the loss (perhaps even prior to taking any temporary measures, if circumstances permit), and contact your business attorney, as well,” she said in an email. “Both your broker and your attorney can assist you with reporting the claim, documenting the loss and making sure that you don’t inadvertently take steps that might jeopardize or limit your coverage.” She added that attorneys can help translate an insurer’s findings. “Coverage – and denial of coverage – letters are often confusing and convoluted, and frequently cite even more confusing and convoluted policy language on which the insurance company is basing their decisions,” she said. “A typical insurance policy might seemingly grant coverage in one place, then later exclude it an attached endorsement, but then perhaps grants it back through a series of definitions contained in yet another section of the policy.” Preparations will help prevent compounding headaches caused by the actual disaster. But even the most prepared companies still might end up in a dispute with an insurer. “The biggest thing is to make sure you have the right coverages and the right amounts,” Christ said. 14 | SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | January 18, 2019 | www.idahobusinessreview.com Mix of apartment projects on tap for the Treasure Valley

By Steve Sinovic Idaho Business Review

There’s no doubt the Boise-metro area is growing and with that comes development and redevelopment across all its commercial real estate sectors. As reported in a previous edition of Square Feet, the Treasure Valley had a banner year for multifamily construction in 2018. And dozens of new projects – mostly market rate but also senior and some affordable apartments – are on the drawing boards, ready to break ground or coming out of the ground in 2019. Property investors – both nationally and locally – are looking for unique opportunities in Boise, where the rental demand is intense, occupancy rates are high and rental increases are on the rise. One player with a major stake in the area is a global real estate investment company that’s not only looking to breathe new life into older properties but plans to add to its holdings by bringing new apartment homes to the market. Publicly traded Kennedy Wilson’s Nov. 21 acquisition of the 188-unit Cottonwoods Apartments is the fifth significant purchase in Boise since the company started investing in the region in 2014. In addition to the $24 million it paid for the Cottonwoods, the firm will bankroll a $6 refurbishment and rebranding of the Southeast Boise property, which will be renamed “The Reedhouse.” Beverly Hills-based Kennedy Wilson’s other assets include Whitewater Park Apartments with 324 units; Edgewater with 300 units; River Pointe with 204 units; and Rosewood Apartments with 168 units. All of the Boise multifamily properties were secured through off-market transactions, acquired directly from private sellers. “Boise has emerged as one of the fastest- growing metro areas in the United States and one of the top-performing markets in our multifamily portfolio,” said Nick Bridges, managing director at Kennedy Wilson. “With Cottonwoods, we have the opportunity to take a very well-located property and add significant value through a top-to-bottom renovation program that will bring the property in line with the best multifamily properties in the area.” The Cottonwoods apartments in Boise was recently purchased by California-based Kennedy Wilson. Photo by Pete Grady. “We are excited about the potential to find and create value within the Boise multifamily market and plan to continue exploring opportunities to boomers are downsizing and like renting because Brighton’s radar about 10 months before it complex also will include 13 market-rate expand our presence there,” added Bridges. With it frees them from maintenance and upkeep. bought the 2.5-acre lot behind the Boise Co-op apartments, according to the developers’ nearly 1,200 units owned currently, the company Meridian continues to be a hotbed of in January from CenterCal Properties, which website. hopes to grow to 2,000 units in the Boise area by apartment growth inside Ada County for those owns The Village at Meridian. Construction of a 26-unit housing project is the end of 2020 through new acquisitions and 55 and older. Construction at Cadence at The Village is expected to start this spring for local military development, he added. With the 150-plus-unit Affinity at Boise now underway, with completion targeted for veterans experiencing homelessness. Over the next several years, Kennedy Wilson apartments at Eagle and Ustick roads now fully summer 2020, Turnbull said. According to the City of Boise, Valor Pointe, also has plans to develop 166 multifamily units rented, another developer is moving forward Not to be outdone, the apartment market which will be located on the southwest corner on seven acres of land directly adjacent to the to appeal to the active adult demographic. also includes a few builders looking to serve of State and Fargo streets, is described as a $6.2 properties in its Boise portfolio, as well as 278 million project with funding coming from a units on a fully-entitled, 22-acre site on the “Boise has emerged as one of the fastest-growing metro variety of sources. Boise River Greenbelt in Eagle. The Boise City Council on Dec. 11 OK’d an Through a spokeswoman, the company application for rezoning the land on which the declined to comment on what the rental rates areas in the United States and one of the top-performing new, four-story apartment complex will rise. will be at The Cottonwoods once upgrades are Spearheading the development effort is a completed – or if the new apartments coming on markets in our multifamily portfolio” group of partners, including the Boise Veterans line will be catering to higher-income earners. Administration Medical Center (through the Just who Kennedy Wilson is targeting is no —Nick Bridges, managing director at Kennedy Wilson. VA Supportive Housing Program), the Idaho secret, though. Housing and Finance Association, Boise City/ In an interview with Commercial Property Ada County Housing Authorities and the City Executive magazine, Kennedy Wilson CEO Looking to serve this clientele is The renters needing affordable digs. of Boise. William McMorrow said young professionals Brighton Corp., which plans to add its first The 144-unit Adare Manor Apartments now Construction is slated to be finished by early appreciate the flexibility and mobility that residential element to The Village at Meridian are rising on Fairview Avenue between 24th and 2020, according to the development team. renting provides, and the company is looking with a 166-unit active adult living complex 25th streets. The same team recently opened With the city of Boise’s apartment occupancy to cater to this demographic. behind the Boise Co-op. the nearby 41-unit New Path Community rates hovering between 98 and 99 percent for “You’ve got a group of Millenials who in The five-story structure, which is called Housing for the chronically homeless. more than a year, competition is fierce for many cases don’t want to own a house, so the Cadence at The Village, will target residents The $20 million Adare Manor will have living space of all types. sacred cow of ‘You should all own your house’ aged 55 or older, said David Turnbull, designated units for tenants earning 30 percent Boise apartment rents have jumped an is just not true anymore,” said McMorrow, Brighton’s CEO. of the area’s median wage and for tenants average of 4 percent in the past year, according On the other end of the spectrum, many baby The Village at Meridian only came on earning 80 percent of the median wage. The to RentCafe, a national listing service. January 18, 2019 | www.idahobusinessreview.com| SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | 15

Era-appropriate renovation key to preserving Boise’s mid-century homes By TJ Pierce

Boise, the fastest growing city in the country, has roughly 11,000 homes built in the 1950s and 1960s. Local architects and builders such as Art Trouter, Nat Adams, Charles Hummell, Joe LaMarche, Victor Hosford and Bradford Shaw marked this little city with some striking pieces of residential architecture. Th ese are the mid-century homes that most fans of this era dream of owning. Th is pool of name-brand, collector-style homes, which act as pieces of residential art, amount to less than 1 percent of the market in Boise. Th e majority of these homes attract buyers who have a high level of understanding for what they are and how to treat them. Premiums are oft en paid to acquire these homes, and premiums are oft en spent to care for them. Preservation is at the core of their eff orts, and celebrating their history is almost second nature to the homeowners. In the last year, our team has had the privilege of managing the sale of one of these prized homes that represent the top 1 percent - the Phillips Home. When working with folks that own these kinds of homes, we spend our time summarizing what makes their home unique. Th e architectural features are oft en at the top of that list, but close behind is the architect, as well as the history of the home. Once we have a grasp of this, we can start work on content we can create to capture the attention of a buyer who will properly care for and value a home like this. In the instance of the Phillips Home, we suggested they hire an architectural historian who would document the features and the history of their home. We also hired a top-shelf photographer to document the aesthetics of their home. Lastly, we hired a designer to create a quick guide to inform visitors who would be touring the home over the months to come. After all of that content was created, we pitched this story The Phillips House in Boise to local newspapers and television stations. Several outlets was meticulously preserved picked up the story. We also pitched our content to Atomic to maintain its mid-century character. Photos by Cy Ranch, a magazine covering all things mid-century in the Gilbert Photography. U.S., as well as Curbed, an online outlet covering mostly architecture. In addition, the buyer of the home was required to fi le it with the National Registrar of Historic Places and off er the opportunity for visitors to tour it every other year to serve as an educational and inspirational reference point for future architects and mid- century enthusiasts. By reaching an audience of over 200,000 people and helping escort over 400 people through the front door of the Phillips Home, a new owner was identifi ed who has been very agreeable in accommodating these requests. Idaho Modern, a division of 16 | SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | January 18, 2019 | www.idahobusinessreview.com

Preservation Idaho, will serve as the host for our next tour in spring 2020. Th at leaves 10,950 homes that lack name- brand pedigree recognition. Th is is where our company spends the majority of its time. Th ese “mid-century modest” homes oft en include wood paneling; built-ins; pink or baby blue sinks, bathtubs and toilets; galley kitchens; original kitchen cabinetry; hardwood fl oors (sometimes buried under carpet); lots of single-pane big picture windows and original brick or stone. Every now and again, you might see some good ole asbestos tile or popcorn ceilings for good measure. When working with folks who are selling these homes, we spend our time helping them understand what they have, what’s worth keeping, what’s worth changing, and how they can prepare their home to attract the people who have the most appreciation for a home in this era. We help bring the mid-century characteristics out in these homes, and our goal is to get as many people through the front doors as we can. We demonstrated this strategy ourselves by snagging a fi xer upper in Randolph Robertson on Holiday Street. It was a boring, basic brick ranch home that only had three original features that were intact and worth celebrating. Th e original exterior brick, hardwood fl oors throughout, and the brick fi replace were the cool features that signaled its era, and we kept those and really made them stand out. Th e rest of the home needed to be taken in a modern direction that leaned very heavily on its vintage roots. With the help of Jessica from Stussi Luque Designs, we delivered a product to the market in January that attracted 300 visitors in seven days. Five off ers later, and with an off er that showed how much the home was appreciated, the new owners were thrilled to call this place their own. Th e sellers we represented had no idea we would receive this type of reception, nor did they expect there would be a handful of people willing to pay a premium for this home. Th e sellers were very willing to trust our strategies, and they were thrilled with the outcome! What we do with mid-century homes is very specifi c, and we have been thrilled to see our passion for these homes celebrated. Our team’s vision is to make mid-century dreams come true, and preservation and era-appropriate renovation The Phillips is at the core of that mission. House has TJ Pierce is owner and operator of Mid-Century received Homes by Moniker Real Estate, a real estate national press coverage. Photos company specializing in homes built in the 50’s by Cy Gilbert and 60’s. Photography. January 18, 2019 | www.idahobusinessreview.com| SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | 17 Preservationists propose state tax credit to rehabilitate historic buildings By Sharon FiSher Idaho Business Review

Idaho’s State Historical Society plans to bring forth a bill during the upcoming legislative session that would give developers of historic buildings up to a 20 percent tax credit on money spent to rehabilitate them. Th ere is already such a tax credit on the federal level, and some 35 other states off er a state tax credit as well. In addition, several states that don’t already off er such a tax credit, including Arizona, California, Nevada and Oregon, are working on implementing one, said Janet Gallimore, executive director of the Society. While such a tax credit would cost Idaho money, statistics from other states, as well as experience with the federal program, indicate that such credits more than pay for themselves considering how much money is spent on renovation, as well as the taxes those buildings produce once they are rehabilitated, said Clay Carley, general manager of Old Boise LLC, who is promoting the legislation in the Treasure Valley historic renovation community. “Th ere’s a very select number of developers who even touch historic properties – fewer than 10 percent,” Carley said. “Th ey’re all in favor of it. It’s a great tool.” Idaho’s historic preservation community has been talking about such legislation for years. It was ready to tackle it last year, but the Society was busy with the renovation and expansion of Renovation of the 1910 Owyhee Hotel generated $2.2 million in federal historic tax credits. Photo by Teya Vitu. the Idaho State Museum, which is now complete, Gallimore said. As an agency in the executive branch, Gallimore worked with – like urban renewal in the 1960s – could actually hasten the Restoring such buildings structurally and bringing them up Gov. C.L. “Butch” Otter’s offi ce, but she needs approval from the demolition of those buildings, said Sheri Freemuth, senior fi eld to code for electricity, plumbing and Americans with Disabilities offi ce of the new governor, Brad Little, before she can approach offi cer for the National Trust for Historic Preservation. Act compliance is incredibly expensive, he said. legislators to sponsor the bill. She also worked with legislative Carley received $2.2 million from the federal historic tax Meanwhile, Carley now pays $269,463.58 annually in property leadership to help craft the bill, such as reducing the credit from credit for Owyhee Hotel renovations, which ended up costing a taxes on the renovated Owyhee, compared with $52,836.22 when 25 percent to the same 20 percent the federal law off ers. However, lot more than he planned. “Even with the $2.2 million tax credit, he bought it. Th at doesn’t count additional taxes it generates Gallimore said she hopes the state tax credit will include that project economically has not worked well,” he said. “If I went through its restaurant, businesses and employees. residential buildings, as well as the commercial buildings covered back in time, I would have recommended that we not do the job. “It’s a very signifi cant economic stimulus, way beyond the tax by the federal tax credit. If the state of Idaho matched that federal program, it would have Historic preservationists are anxious to get the tax credit been successful.” credit value to the state,” he said. implemented, because of the new Opportunity Zones community In fact, Carley – whose mother rehabilitated eight historic On the commercial side, Idaho probably has a couple hundred development program. While Opportunity Zones could provide buildings in downtown Boise – said that without a state tax credit, buildings that would qualify for the tax credit, Carley said. “For useful synergy to help rehabilitate old buildings, especially in he wouldn’t do any more such projects. “Th e next time historic a state our size, that’s not very signifi cant,” he said. “But if you rural areas, they don’t include protections or incentives to help renovation comes up, I’m not interested,” he said. “It’s too risky, lose them, you’re losing a piece of history that would never be preserve them. Without such incentives, Opportunity Zones too many uncertainties.” replaced, and that would be a shame.”

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Sundanceco.com 208.322.7300 18 | SQUARE FEET quarterly IDAHO BUSINESS REVIEW publication | January 18, 2019 | www.idahobusinessreview.com Sustainability benefi ts commercial real estate in Idaho By Amber Bieg, Kelsey Jae Nunez, Deborah Hiller LaSalle and Sharon Patterson Grant As a property manager or business owner, a key question oft en is: How do I increase profi t without a huge upfront investment? While market forces and good marketing can drive up revenue, oft en the easiest way to increase profi t is to reduce costs. It turns out that doing good for the environment, such as reducing water use, energy consumption, and waste, saves signifi cant money in the commercial real estate sector. And it’s more than just fi xing leaks. According to several federally funded studies, commercial building managers who implement energy effi ciency improvements save an average of 35 percent on electricity. “Sustainability” is gaining traction in Idaho’s business sector, as demonstrated by increased social impact reporting (see Simplot’s sustainability report on industrial energy reductions), carbon emissions targets (see Idaho Power’s Sustainability Report) and renewable energy goals (such as Clif Bar’s goal for 100 percent green power). Sustainability focuses on doing good for the world - meeting the needs of the present without compromising the ability (l-r) Amber Bieg, Kelsey Jae Nunez and Deborah Hiller of future generations - while ensuring profi t. Companies like Clif LaSalle. Photo courtesy of Warm Springs Consulting. Sharon Patterson Grant. Bar have found that a solid commitment to sustainability improves operational performance, employee retention, reputation and Development Corporation (ODC), one of the largest property global world, there’s no more ignoring the fact that there is no such overall business integrity, which in turn increases revenue. managers in Boise, needed to replace a chiller in a downtown offi ce thing as “away.” How to start? For most property owners, a logical approach is building, they took advantage of an Idaho Power program that In 2017, China stopped accepting recyclables from the U.S., to start with operational changes. During the 2013 Boise Kilowatt can cover 75 percent of the cost to develop an energy model and placing an increased burden on domestic landfi lls, where dumping Crackdown competition, 47 buildings identifi ed 390 capital and analyze building energy use. Th ey purchased a new, more energy rates range from $25 to $120 per metric ton. It costs money to operational improvements to save energy and money. Th e common effi cient and technologically advanced chiller that was one-third deal with waste, which is why a growing number of companies are themes that emerged as opportunities for improvement were: smaller. Th at saved upfront costs and long-term operational costs. starting to look at zero waste programs to stop waste before it is According to Coby Barlow at ODC, “We are still taking advantage generated. Th e key to saving money while reducing environmental • Controls and equipment are not operating as intended. of the energy model as we consider upgrades. It is tough to bite problems is to design systems that are easy to use and build new • Exhaust fans are running when spaces are the bullet all at once. We are just now implementing the remaining cultural habits in workplace buildings. Easy opportunities include unoccupied. recommendations (fi ve years later).” Th e energy savings in this having water refi ll stations and encouraging employees to bring in • Temperature setpoints and other settings need to be building have totaled approximately 20 percent so far. reusable water bottles. optimized. Saving energy directly impacts the bottom line, and there is a Th e supply chain is another target area for savings. Bring • Th ere is still a lot of ineffi cient lighting out there! strong nexus between water and energy use. In Idaho, delivering skepticism into decisions about what products are brought into water to tall buildings takes energy to pump. Oft en water and facilities and offi ces. Do those products need to be there? Why? • Envelope air leakage is higher than expected. wastewater treatment are two of an industrial user’s or municipality’s How much does it cost to dispose of them? Can they be delivered • Most building managers are not tracking how much biggest energy expenditures. Applying that knowledge to offi ce in reusable packaging? Are there local suppliers available to reduce energy their building used. buildings means that switching to low-fl ow fi xtures and using less the need for superfl uous transportation, minimize resource • Building managers are not taking full advantage of water (especially hot water) results in direct savings on operating consumption, and support the local economy? Idaho Power tools and services. expenses for water AND energy. By supporting suppliers that share a commitment to Cost savings also come from managing properties in a way environmental stewardship, building managers promote the Participants learned from these outcomes and became strategic that produces less solid waste. Th e management of the waste and sustainability that the commercial world desperately needs. For about capital improvements. For example, when Oppenheimer disposal all costs money. And, with an increasingly interconnected example, Beth Israel hospital in New York City saved $800,000 per

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With 3.5 billion square feet under management, 400 offices in 70 countries, 2017 revenues Three Locations Our Attorneys of $6.9 billion and 48,000 hardworking Thomas J. Angstman innovators, this is where the power of real Boise Kaleena M. Beck estate is unleashed on behalf of Idaho’s top Bart D. Browning owners and occupiers. Our clients benefit from 199 N. Capitol Blvd., Suite 200 our insight that comes from the perspective of Matthew T. Christensen Boise, ID 83702 a trusted global leader. Natasha N. Hazlett Explore what’s next at paccra.com Wyatt B. Johnson Eagle Sheli Fulcher Koontz 1191 E. Iron Eagle Dr. Suite 200 Kylie L. Madsen Eagle, ID 83616 J. Dee May J. Justin May Twin Falls Chad R. Moody 516 Hansen St. E Anthony M. Shallat Twin Falls, ID 83301 Nicole L. Swafford Erin J. Wynne January 18, 2019 | SQUARE FEET quarterly | 19 year by implementing waste reduction practices, with sustainability, create a strategic plan that with a key focus on supply chain management. targets the low-hanging fruit fi rst that provide Property managers do not have to be in this immediate cost savings - enabling sustainability alone and should consider partnering with initiatives to pay for themselves. Th en utilize tenants to pursue sustainability. Tenants can take on responsibility for switching to low-energy the skill sets of your team to optimize the light bulbs, reducing wasted standby power, benefi ts of your program. Th ese are the tactics replacing outdated appliances and electronic sustainability consultants develop while fi nding equipment, and reducing water and waste. ways to help save money by improving building And in addition to these fi rst steps, what really and operational effi ciency through reducing moves the needle is the shift ing of values and energy, water and waste. perspectives, so that all building occupants are Because human habits run deep and resist acting with environmental awareness. change, even when it’s for the better, many Changing your tenants’ values might sound like a major endeavor, and when compared organizations hire sustainability consultants to to changing a light bulb to a more effi cient help design behavior change and system change alternative, it is. But the eff ort is worth it because, programs that ensure solid sustainability traction. ultimately, changing the context in which It’s highly benefi cial to work with a sustainability humans naturally make choices returns better expert to develop a strategic roadmap to results. And it’s not as complicated as it may sustainability to help identify priorities, low- seem at the outset. Th ere are a number of ways hanging fruit and ultimately optimize profi t, while to start bringing tenants on board: becoming a better steward for the community.

• Leverage an existing campaign, such as Energy Star or Idaho Power Energy Effi ciency kits and tips for businesses. PROPERTY MANAGEMENT • Set effi ciency goals or consumption limits that tenants are required to hit or incur IDAHO surcharges. MAXIMIZING PERFORMANCE • Ask tenants for ideas and input, giving them a stake in sustainable solutions. • Incentivize if necessary; reward and positively promote sustainable behavior. • Use recognition as a powerful tool to motivate tenants to take effi ciency and other sustainability actions. In a state growing a quickly as ours, • Test ideas for tenant engagement in one property and/or with tenants most likely to owners can achieve a greater value by be receptive, and replicate the success at other properties. embracing a holistic integrated services approach. Colliers Real Estate Management Taking advantage of opportunities for Warm Springs Consulting is led by managing positive interaction with tenants around partners Amber Bieg (MBA), Kelsey Jae Nunez Team works to develop strategies that efficiency and sustainability may help retain tenants, as well as boost the environmental (JD/MPP, LEED GA), and Deborah Hiller LaSalle provide clear guidance to help you make performance of the building. Additionally, (JD). e company’s focus includes strategic and smarter, more informed decisions. Let us once you’ve got your property on the track organizational planning, sustainability strategies, show you how we can grow your toward true sustainability, you may find that economic feasibility studies, comprehensive waste you begin to attract tenants that are good assessments, greenhouse gas inventories and commercial property values. stewards, not just to the planet, but to the renewable energy integration. Sharon Patterson property you manage - creating ongoing Grant (LEED AP BD+C, CSBA) is the owner of positive feedback loops in the property www.colliers.com/idaho management sustainability cycle. Eco Edge, which provides research, analysis and Once you’ve decided that it makes sense outreach on energy codes, as well as training and 208 345 9000 to explore the profi t incentives associated facilitation.

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