Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

Month: July 2015

  • CAPREIT announces first joint venture development

    Yesterday CAPREIT announced that we have entered into our first joint venture development agreement for a mixed-use project at 1100 King Street West in Toronto’s Liberty Village neighborhood. 

    The agreement is to acquire a 1/3 undivided interest in the residential component of the project for $60.3M. The residential component will consist of 3 towers and 506 apartment suites (sitting on top of a roughly 160,000 square foot commercial/retail podium that will not be owned by CAPREIT).

    Here’s what Thomas Schwartz, President and CEO of CAPREIT had to say:

    “We expect our interest in the property, combined with the property management fees we will receive, will be accretive to our cash flow and set the stage for similar partnerships, along with our own new rental developments in the future.”

    As a member of the development team at CAPREIT, it feels great to get this one out there.

    Click here for the full public press release.

  • The Olympics are dead. Or are they?

    Olympic Pool – Barcelona, Spain by Tom Weightman on 500px.com

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    Early this morning Professor Robert Wright – who is a regular reader and commenter on this blog – sent me an article from The Guardian called, ‘The Olympics are dead’: Does anyone want to be a host city any more? And that got me thinking.

    With Toronto having just hosted the Pan Am Games (the Parapan Am Games are still going on), there’s a lot of talk and debate happening in this city right now about whether or not we should make a go at hosting the 2024 Summer Games. The deadline for cities to express their interest is September 15th, 2015.

    The supporters (of which I would include myself) say it’s a great opportunity for civic (re)branding and urban renewal. It creates real deadlines to get things done. But the naysayers argue it’s a fiscal disaster waiting to happen. See 1976 Summer Olympics in Montreal.

    But in my view there are ways to host the Olympics and there are ways not to host the Olympics. Montreal (1976) is an example of what not to do. And Los Angeles (1984) and Barcelona (1992) are some of the best examples of what to do.

    The key is to think of the Olympics not as the end, but more as the beginning. In Olympic talk, they refer to this as legacy. Here’s what Los Angeles managed to accomplish as a result of the 1984 Summer Games (via Gizmodo):

    In 1979, the L.A. organizing committee had made a deal. If the games saw any profits, LA84 would give 60 percent back to the U.S. Olympic Committee and keep 40 percent for Southern California. At the end of the games, the total expenditures came in at a respectable $546 million, but even more impressive was the profit: A surplus of $232.5 million, meaning $93 million would stay in the region. This was huge. The only other games at the time which could claim to be financially successful at all were the other L.A. Olympics: The ones held in the city in 1932.

    The profits were used to create an endowment called the LA84 Foundation, which funds youth sporting events, resources, and facilities throughout the area. With smart management, the endowment has grown over the years, and over $214 million has helped an estimated three million children and 1,100 organizations in Southern California. Recently, the LA84 Foundation helped raise money to pay coaches and buy equipment at LAUSD high schools after budget cuts decimated their programs.

    The rest of the above article is definitely worth a read. It’s a great example of fiscal prudence.

    So what I am suggesting is not that we run blindly into hosting the Summer Games. But that we instead open our minds to the opportunities. Let’s great creative. If we could catalyze further city building, turn a profit, and leave meaningful legacies for this region (like what LA did), then why wouldn’t we want to have a go at it?

  • Laneways and ravines

    Solitude by Lionel Linton on 500px.com

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    I have a new mission for this summer: To explore more of Toronto’s ravines.

    Last week I had a fascinating conversation with Steve Heuchert of the Toronto and Region Conservation Authority (TRCA). Most developers in this city would probably cringe when they hear those words. Because often when the TRCA gets involved it means your project is about to get more complicated.

    But if you take a step back and look at the larger city building equation, our ravines are a remarkable and unique feature of the Toronto area landscape.

    And unless you live near one or are fortunate enough to have a home that backs onto one, I suspect that for many of us this city’s ravines are a somewhat forgotten layer of the urban fabric. We drive by them. We pass through them on the subway. But they don’t really register in the way that they should.

    And so if you think about it, our ravines actually share many similarities with our laneways (alleys). We know they exist, but we could be doing a lot more to truly celebrate and integrate them into the rest of the city. They are missed opportunities.

    The challenge with our ravines though is finding the right balance between preservation and increased usage. But this isn’t something that a great landscape architect couldn’t help solve.

    So today’s thoughts are: How do we increase ravine awareness? How do we improve access and expand their uses? How might we craft our ravines to become an interconnected open, green, and cultural network within the city? And how do we better position the ravines as part of Toronto’s overall city brand?

    If you’re interested in this topic, check out this talk that Steve Heuchert did last year. It was part of an event that Megan Torza of DTAH organized called RavinePortal.

  • Guest Post: For whom the road tolls?

    For those of who were following Architect This City during the Gardiner Expressway East debate here in Toronto, you might remember that Darren Davis (transport planner with Auckland Transport) wrote a guest post called, Three minutes that rule the world – Will demolishing the Gardiner East actually make traffic worse?

    It was an incredibly popular post at the time, so I’m thrilled that Darren volunteered to do another one on road tolls. This is a topic that I’m very interested in and have written about a few times. Road pricing, as you’ll see below, puts us in a bit of a chicken-and-egg situation. But sooner or later I think we will need to get our head around it, as will many other cities.

    I hope you enjoy today’s post. Thanks again Darren.

    ——————————-

    A recent post on Architect This City, The Tragedy of the Commons, raised a fundamental but all too often forgotten point about transportation: That in networks where the price of use doesn’t change when demand changes, there is no effective mechanism to manage that demand.

    Because there is no incentive to act in the public good, we often act in what we perceive to be our own personal interest, which is often the antithesis of the public interest. And remember that if we are driving, we are traffic. So often people will sit fuming in their cars in the midst of congestion with thoughts like in this cartoon. But of course with unpriced roads, there is no real price signal to these drivers to consider taking the bus.

    In a world where time is money, we are constantly berated about the economic costs of congestion. In 2011, the Toronto Board of Trade estimated that congestion in the Toronto region alone cost the regional economy $6 billion a year, rising to an estimated $15 billion in 2031 should no action be taken. More recent research by the CD Howe Institute pegs this figure at up to $11 billion.

    Given these sorts of eye-watering figures, one might be tempted to think that car drivers, and in particular the goods industry, would be flinging their wallets open at the chance to buy their way out of congestion. And in fact Toronto has the 407 Express Toll Route which has elements of variable road pricing. However, while the 407 ETR carries around 350,000 vehicles per day, price increases have been matters of controversy. It provides some ability for those who can afford it to bypass Toronto’s notorious traffic congestion, but its fundamental weakness is that it’s just one road in one of North America’s largest city-regions.

    Similar stand-alone efforts to address congestion in Metro Vancouver with tolled routes, such as the Port Mann Bridge on the Trans-Canada Highway and the Golden Ears Bridge, have fallen well short of their projected traffic volumes, while nearby untolled bridges such as the Patullo Bridge are heavily congested. We have a similar experience in New Zealand where our two tolls roads, with car tolls of $2 and $2.20 respectively, experience diversion rates of up to 30% to the alternative but substantially longer and slower free routes.

    This brings up a fundamental paradox: Congestion costs the economy a fortune and congestion is a top-of-mind frustration, yet people seem reluctant to pay even comparatively small amounts to bypass congestion.

    For example, the City of Toronto’s Roundtable on Gridlock & Traffic Congestion in February 2014 came up with the usual shopping list of “transportation systems management” responses – improved management of curbside space and construction projects; synchronized traffic signal phasing; better traveller information and improved incident response. While these are all worthwhile responses, they only improve system operation at the margins. Encouraging greater use of public transit was the very last recommendation and there was not a single mention of charging or pricing as a tool to address congestion. And the feverish activity continues with a hackathon called TrafficJam on October 2 – 4, 2015 with the goal of fixing Toronto’s traffic woes.

    The very few cities that have actually had significant success at reducing traffic congestion – notably Singapore, London and Stockholm – have done this through cordon-based congestion pricing wherein if you pass the cordon, you pay the congestion charge. Entering central London on a weekday between 7am and 6pm will set you back a cool £11.50 ($C23.30). From 2003 to 2013, about £1.2 billion ($C2.42 billion) of congestion charge revenue has been invested in public transport, road and bridge improvements and walking and cycling, of which £960 million ($C1.94 billion) was for bus improvements. These measures have included significant road space reallocation to improve conditions for pedestrians, cyclists, public transit and the urban realm.

    The latest Travel in London report states that “Over the 10-year period from 2003, total trips have increased by 11.4 per cent, with particularly notable increases of 52.3 per cent in rail trips and 32.0 per cent in Underground and DLR [Docklands Light Railway] trips, with cycle trips (as main mode) increasing by 53.9 per cent. Car driver trips decreased by 12.7 per cent over the same period” (my emphasis).

    One interesting insight is that Stockholm trialed congestion charging and then reverted to business as usual of unpriced roads in advance of a referendum on congestion pricing. This gave Stockholmers a clear sense of the difference in traffic congestion and was crucial in supporting a yes vote in the referendum.

    Stockholm has experienced a permanent reduction in traffic of about 20% across the toll cordon and congestion decreased by 30 – 50% – which demonstrates that traffic volume reductions have a disproportionately positive impact on congestion. About half of the “disappearing” drivers changed to transit, the rest to other alternatives such as different departure times and destinations and taking fewer trips.

    For more on Stockholm, I suggest reading the Tools of Change case study on Stockholm Congestion Pricing.

    Before and after congestion charge photos of traffic levels in Stockholm

    While this sounds very promising, congestion charging has significant equity implications and requires upfront investment to provide people who either choose to or can no longer afford to drive with transportation alternatives. Both Stockholm and London invested very heavily in public transit in advance of implementing congestion charging.

    And this brings up a big issue for Toronto. 

    For congestion charging to have a meaningful impact on congestion without stifling economic activity or impeding people’s ability to move around, the core capacity of Toronto’s transit system would need to be addressed first. In particular the Yonge Line capacity enhancements, Metrolinx’s Regional Express Rail and most likely the Downtown Relief Line would need to be in place to provide both capacity and choice for people who either needed or wanted a travel alternative to any congestion charge.  This would mean that Metrolinx’s Big Move might need to get even bigger.

    Disclaimer: The author of the above post is an employee of Auckland Transport, however, the views, or opinions expressed in this post are personal to the author and do not necessarily represent the views of Auckland Transport, its management or employees. Auckland Transport is not responsible for, and disclaims any and all liability for the content of the article.

  • Cottage weekend

    I just got home from a weekend up at a friend’s cottage. It’s an annual birthday tradition and it’s always a great time. A good cottage weekend can do wonders to reinvigorate yourself. I am ready for the week.

    But since the Pan Am Games closing ceremony fireworks are about to kick-off and I want to go watch them from my sun deck, I don’t have a lot of time to write a post. So instead, I thought I would share a few of my photos from the weekend.

    The first photo is near Shelburne, Ontario. The wind turbines are from the Amaranth Wind Farm, which is the largest wind energy installation in Canada.

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    This is the Georgian Bay. I love swimming in this water.

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    Cottage reading: Monocle.

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    The wood shop. There’s a lot of creative talent at this particular cottage.

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    Creemore = cottage.

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    All of these photos were also posted to my Instagram if you’d like to follow me there. The last photo was from Snapchat (donnelly_b).

    Regular scheduled programming will resume tomorrow. I have a great guest post queued up on road pricing. I can’t wait to share it.

  • Architectural spoonerism

    Pavelló Alemany by Sergi Pera on 500px.com

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    Back in architecture school we used to joke around that to be a great architect you had to have a badass sounding name. This was largely driven by the fact that so many famous architects were/are European and so they had/have more unique sounding names – at least to us.

    Think Rem Koolhaas, Bjarke Ingels, Ludwig Mies van der Rohe, Le Corbusier (actually Charles-Édouard Jeanneret-Gris), Alvar Aalto, and so on.

    There are of course lots of great non-European architects and lots of names that don’t sound as badass as the ones listed above. But that didn’t stop of us from perpetuating the belief that you needed a badass name.

    So what could you do if your name wasn’t badass enough to be a famous architect? Well we applied the principles of architectural spoonerism. That meant we switched around the first letter of your first name with the first letter of your last name to create a new architectural identity.

    Sometimes this worked beautifully, but sometimes it didn’t work at all. In my case, I became Drandon Bonnelly, which is arguably a bit more badass. But the best example is that of my friend Alex Feldman. He became Flex Aeldman. Now that’s badass. He sounds like an architect bodybuilder.

    What’s your badass architect name? Let us know in the comment section below. Perhaps we can dethrone Flex as the best one out there.

  • The second coming of the car

    Blue hour by Ryusuke Komori on 500px.com

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    As a kid growing up in the suburbs of Toronto, I remember when getting my driver’s licence and getting a car were some of my biggest priorities. 

    As soon as I turned 16, I went immediately to get my learner’s permit and then enrolled in a driving school so that I could shorten the time required until I could drive on my own. Every month counted at that age.

    It was such an important milestone that people born earlier in the year were seen as lucky. Because someone born in January, for example, could gain their driving independence before someone born at the end of the year even got their learner’s permit. As silly as it sounds to me right now, that spread was huge back then.

    But the world has changed and we are at the dawn of a new era: driverless cars. 

    Sooner than most people think, we are no longer going to drive ourselves around cities. I absolutely believe this. That means no more steering wheels. No more traffic calming measures on quiet residential streets. Safer streets. Perfect traffic information because all the cars will be networked. And a dramatic increase in urban efficiency. (Relevant post: The tragedy of the commons.)

    I can’t wait for this happen.

    Reid Hoffman, who is the co-founder of LinkedIn, recently wrote a fascinating article on autonomous vehicles called, Driving in the Networked Age. And in it he argues that cities should be starting to look at banning human-driven cars and generally putting in place policies to support networked autonomous cars. In fact, he sees it as an opportunity for Detroit to reestablish itself as the 21st century motor city.

    Again, I don’t doubt that this transition will happen. I think it’s a question of when, not if. But I also think that it’s going to be incredibly important to think about what driverless vehicles will mean for our cities and the built environment. 

    It’s once again an example of Marshall McLuhan’s famous phrase: The medium is the message

    Cars as a medium have had a profound impact on the way we live and the way we build our cities. We know this. But the medium is now changing. And while simply taking out the driver may seem like a small change, it is not. Have a read of Hoffman’s article.

    I’m excited about the possibilities. I don’t really like driving anymore. But let’s make this second coming of the car more positive for cities than the first. Deal?

  • When everyone thinks you’re wrong

    Sunset by Paolo Mastrogiacomo on 500px.com

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    I was recently talking to my good friend Jeremiah Shamess about the current state of development land sales in Toronto (he does this for a living) and he said something to me that I found really interesting.

    He said that because the market is so competitive, you can really only win development sites in one of two ways. Either you’re willing to spend the most money or you see something and have a vision that nobody else sees.

    And it was this second piece that really stood out to me because it reminds me of one of my favorite investing frameworks.

    Warren Buffet is famous for saying that you should be fearful when others are greedy and you should be greedy when others are fearful. And what I’m about to talk about is really that same core philosophy.

    Here’s how venture capitalist Fred Wilson put it (reiterating something that Bill Gurley said):

    I saw Bill Gurley say that you can only make money by being right about something that most people think is wrong. His logic was that you can’t make money by being wrong. And you can’t make money by being right about something everyone else knows. So you have to be right about something that most people think is wrong. I really like that framework.

    But this doesn’t just apply to technology companies or stocks. It applies to city building, most industries, and probably most things in life if you think about it.

    If all you’re doing are things that everyone else is doing, then how can you expect to outperform? You’re going to revert to the mean.

    Take, for example, billionaire Dan Gilbert and Detroit. Not everyone believes that Detroit will come back. In fact, I suspect there are probably more people who think it won’t come back, than people who think it will. Otherwise, it would already be back.

    But Gilbert is unquestionably long on Detroit (via Forbes):

    As you’ve likely heard, over the past four years Gilbert has become one of Detroit’s single-largest commercial landowners, renovating the city with the energy and impact of a modern-day Robert Moses, albeit bankrolled with his own money. He’s purchased and updated more than 60 properties downtown, at a total cost of $1.3 billion. He moved his own employees into many of them–12,000 in all, including 6,500 new hires–and cajoled other companies such as Chrysler, Microsoft and Twitter to follow.

    If/when Gilbert proves to be right about Detroit, then he will have been right about something that most people thought was wrong. And because of that, he will no doubt make a lot of money.

  • Made in Toronto: 500px

    https://500px.com/embed.js

    If you’re a regular reader of Architect This City, you’ll know that I generally like to include at least one photo with every post. Sometimes I run out of time and I don’t always do that, but that is at least the intent.

    You might have also noticed that my go-to for stock photography is 500px. That is the case for a few reasons. 

    I find the photos to be of higher quality than any other service. I can easily “embed” them into my posts while giving appropriate credit to the author and linking back to 500px. The company was founded by a good friend of mine and snowboarding compadre. And the company is made in Toronto.

    That’s why it’s exciting to report that yesterday the company announced an additional $13M in funding (Series B). To date the company has raised $23M of outside funding, from some big names like Andreessen Horowitz. This is great for the everyone in the company, and I believe it’s great for this city.

    Why is that?

    Well, here’s a video from the New York Times’ Cities For Tomorrow conference, where Andrew Ross Sorkin and Fred Wilson talk about creating startup hubs. It’s about 20 minutes long and well worth a watch.

  • Enabling innovation by lowering the barriers to entry

    Yesterday afternoon Sam Altman of Y Combinator published a blog post talking about a new YC Fellowship program for even earlier stage companies. 

    For those of you who aren’t familiar with Y Combinator, they are a super successful funding platform for early stage startups. They are located in Mountain View, California.

    What’s unique about their approach is that they invest a relatively small amount of money ($120,000 for 7% of your company) in a relatively large number of companies. Their most recent cohort was around 85 companies and they do that twice a year.

    The rationale behind this approach is that it can be incredibly hard to predict which people and ideas will produce the next great company. Oftentimes the best ideas appear really shitty at first. (Here’s a post by one of the cofounders of Airbnb talking about the company’s early rejections.)

    So instead of putting all of their eggs in one basket, YC invests smaller amounts in more companies.

    But beyond this being beneficial to them, it’s also a model that I think helps to reduce the barriers to people starting a company. It gives more people the chance to prove that their company has the potential to be something great. 

    And that’s precisely what makes this new YC Fellow program/experiment so interesting to me.

    Instead of $120,000, YC fellows will receive $12,000 and they won’t have to move to the Bay Area (although it’ll be encouraged). They’ll still get mentorship and advice like the regular YC program, but it’ll be a kind of light version. 

    Though this is almost certainly just the beginning. Here’s how Sam ended his announcement post:

    “Someday if it works, we’d love to fund 1,000 companies per year like this.”

    Now all of a sudden that’s some scale.

    What’s exciting about this is that I believe our cities have the potential to be far more innovative than they are today. Every city is trying to be the next Silicon Valley, but every city is not the next Silicon Valley.

    I saw a great tweet the other day that went something like this (I wish I could remember who the author was):

    “Entrepreneurs aren’t risk takers. They’re just rich kids with big safety nets.”

    It’s a bit of a tongue-in-cheek generalization. But to unlock the full potential of our cities, we should be figuring out how to get everyone participating and building their ideas, not just those with a head start. 

    I think there are a lot of people around the world who could be doing great things, but they just haven’t been able to take that first step for one reason or another.

    Hopefully organizations like Y Combinator will be able to help them take it.