< Previous88 SEPTEMBER 2018 SI T E S E L E C T IO Noperational productivity by 75 percent, due to embedded efficiencies.The street-facing building side is the only one visible. A transparent glass exterior allows views into the elegant machinery at work inside. Lit up by a colorful and changeable array of LED lights, the facility itself becomes a breathtaking piece of performance art.The idea, says Karl Heitman, is to flip today’s standard horizontal design on its ear, and in the process take the proverbial sow’s ear — an unattractive warehouse — into a silk purse. “The warehouse of today is really long and really thin,” he says. “If you tip the whole thing on its side, you could fit 1 million square feet of horizontal warehouse into this really tall but really narrow vertical space as the perfect urban configuration.”Eliminating the Traditional Notion of InventoryIn this scenario, traditional inventory gets eliminated. Raw materials and product components are replenished by autonomous freight trains from the freight tunnel network below the streets. Drive-through receiving and shipping functions are handled by vertical-lift gantry cranes on one-way back alleys. The 40 floors of the building are designed to enable flexibility.Ground floors are pedestrian-oriented experience centers for shopping along streets converted to green, carless parkways within the central business district. The retail experience center offers virtual reality opportunities to further customize products in progress. It also serves as a recycle center, where obsolete products are returned, disassembled, and then recycled into new products on upper floors.Middle floors house additive manufacturing modules and final product assembly to produce custom, order-of-one products in real time. The system feeds last-meter delivery to urban consumers within hours of order placement. Upper floors serve as a warehouse with three aisles of vertical automated storage and retrieval system (ASRS) for parts sub-assembly components and raw materials that supply manufacturing below.Three top floors feature a multi-level aquaponic conveyer system that produces 500 tons of fresh produce annually. Rooftop real estate accommodates tilapia fish tanks that generate the nitrates needed for growing. The fish tanks serve another important purpose: as dynamic stabilizers to minimize the sway of the high-rise.Repurposed warehouses become factories of the future producing on-demand goods.90 SEPTEMBER 2018 SI T E S E L E C T IO NSolving the Last Meter Delivery DilemmaAlready, the reality of getting goods directly into the hands of city dwellers is creating logistical headaches. “That last mile — including the last meter — is one of the most costly and complex steps in the supply chain,” says Matthias Winkenbach, director of MIT’s Megacity Logistics Lab.The network of the future addresses the issue head-on, as the proposed hyperlocal center becomes a new supply-chain node on a physical Internet distribution model. It replaces bricks-and-mortar facilities with a real-time, on-demand, Uber-like mobile delivery hierarchy. Roving autonomous “mother ship” trucks supply fleets of autonomous vans that circulate the city on 24/7, continuous routes. The vans carry goods along with a contingent of drones and robotic carts for last-meter/rooftop and doorman deliveries.With alleyway access and underground docking berths at the hyperlocal center, the motherships are lifted by internal gantry crane for automated replenishment, guided by artificial intelligence that identifies restocking needs through sophisticated, lightning-fast algorithms.Air Rights: The New Warehouse Development FrontierThird-party logistics providers like are already eyeing land in densely populated areas for industrial warehouse development. But with demand growing and limited availability of large, industrial-zoned parcels in desirable locations, designers of warehouse space are beginning to look upward rather than outward.In April 2017, ProLogis broke ground on the first such facility in its own portfolio — a three-story, 589,615-sq.-ft. fulfillment center in South Seattle, Washington. The project, Georgetown Crossroads, is a first-of-a-kind in the United States — a highly visible, Class A facility featuring ramps for truck access to second-floor loading docks. A freight elevator will link the third floor to ground-floor loading docks. The company reports that the new paradigm was necessary because consumer are increasingly coming to expect rapid delivery of online orders, and transportation costs are rising.This example brings into focus the challenge for developers, owners and users of warehouse space. Now, more than ever, land in densely populated areas is being eyed 92 SEPTEMBER 2018 SI T E S E L E C T IO NBy the Numbers: Opportunities To Repurpose U.S. Real EstateVACANT LAND ACROSS LARGE CITIESOF CITY ADDRESSES VACANT4%NEARLY 1 TRILLION SQ. FT.OF OBSOLETE SUBURBAN OFFICE SPACEOF U.S. SHOPPING MALLS SLATED TO CLOSE WITHIN NEXT 5 YEARS25%5.3%INDUSTRIAL VACANCY RATE — A 17-YEAR LOW S I T E S E L E C T I O N SEPTEMBER 2018 93for industrial warehouse development. Repurposing narrow slivers of hard-to-develop urban land into multiple vertical, hyperlocal warehouses as proposed by the DesignFlex team could open up a world of options, even as removing stubborn little pockets of urban blight represents a real win for cities.Areas for Future StudyAs the team moved forward with its work and identified the full array of disruptions taking place, it became clear that some related issues requiring exploration fell outside the scope of this paper. Further exploration is recommended on the following:• Zoning codes: Changes to accommodate flexibility as uses change• Identification of future warehouse needs: Will the need for the mega-warehouse disappear entirely? Will there be a shift toward holding more properties, each with smaller footprints?• Incentives to encourage redevelopment of remnant parcels and obsolete office space• Approaches to strengthen fiber-optic networks• Energy investments to enable power redundancy• Demographic trends as the millennial generation ages: If the urban trend reverses itself, can the distribution network accommodate the shift?• Transformational strategies to create smart, connected cities• Financing next-generation transportation infrastructure. Navigating theLabyrinthDenver makes a case for TOD in a world of DOTs, says a global transit expert based in the city. Other cities, not so much. PROJECT94 SEPTEMBER 2018 SI T E S E L E C T IO NNew analysis from Transwestern of offi ce buildings in major U.S. metro areas shows average rent in central business districts was $. per sq. ft. for transit-accessible buildings versus $. per sq. ft. for car-dependent buildings, a -percent premium that only shrunk to percent in transit-accessible rent in the suburbs (avg. rent: $.). Denver, New York/New Jersey, Washington, D.C., and the San Francisco Bay Area are rated the highest.Marilee Utter knows those markets well. President of Citiventure Associates in Denver and a former leader with he Urban Land Institute and the City of Denver, she advises clients and municipalities on public/private partnerships and urban and transit-oriented development. She says the evidence is overwhelming about the value of TOD real estate, and she points to her hometown for proof.At one end of a -block stretch you can navigate on a free Regional Transportation District (RTD) shuttle are skyscrapers from the s and ’s. At the other end is the river, where the old train station, warehouses and contaminated bowery areas were. Today the train station and riverfront are the hot area for mixed use. “ e offi ce rents in the riverfront now are in the high s, and if you go seven blocks away, the rents are half that,” she says.Time Over TaxesDenver’s Regional Transportation District (RTD) FasTracks Program is a multi-billion-TRANSIT & CONNECTIVITYComposite image courtesy of Jonny Therrell and Getty ImagesInfrastructureRural AdvantageLogisticsTransitNavigating the by ADAM BRUNSadam.br uns @ site s ele c tion.c omPROJECT96 SEPTEMBER 2018 SI T E S E L E C T IO Ndollar comprehensive transit expansion plan to build 122 miles of new commuter rail and light rail, 18 miles of bus rapid transit, 21,000 new parking spaces at rail and bus stations, and enhance bus service. One reason transit improvements have proceeded quickly is the city and county decided not to go through the federal process of seeking funds for one train line at a time, getting it up and running, then applying for funding for the next one.“Seven lines take at least 100 years,” Utter says. “What they figured out through very specific polling was that getting the system up and running in their lifetime — the ballot said 12 years — was more important to them than taxes.” Young, progressive Denver has weighed in on 48 ballot measures (such as the bonds they approved for RTD last November) in the past 30 years, and only two have not passed, says Utter. State-level conditions need to be right too.“You need public-private partnership legislation,” Utter says. “You have to have the private sector jumping in. You need a multimodal transportation agency so funding can come through. The last mile is the biggest issue you face with fixed-rail transit. You have to have policies that sa that, in addition to rail, ‘we want roads, we want bikes, we want scooters.’ If your DOT is still focused on highways, that’s a big problem.”Holders vs. FlippersOne factor that can help move things forward is thinking more creatively about parking — or its lack. “I’m kind of appalled at all the parking I see built today,” Utter says. Part of the reason is cities are requiring it. “They think new building brings congestion and therefore parking is going to solve the problem.” Developers shoulder some of the blame too, because they’re only in it for the short term, ready to flip the project to an investor.“It’s the private equity, long-term holders, not flippers, where we see innovation going on,” she S I T E S E L E C T I O N SEPTEMBER 2018 97says, singling out such organizations as Grosvenor and Brookfi eld. “When I look at development, one thing I want to know is, ‘Are you a holder or a fl ipper?’ If you have merchant builders who can’t wait to sell to the pension fund, they’ll just build. Frankly a lot of fi nancial institutions aren’t progressive either, and just take the safe way out.”Sometimes the safe way out means avoiding social equity issues. How much do racial, ethnic and socio-economic prejudice still hold back progress in building out transit infrastructure?“A lot,” Utter says. “Social equity is one of the major goals of transit. You’re always going to have people at a lower income level riding transit. But if there happens to be a racial correlation with that income level, then you get into all that emotional stuff . Dallas had a horrible time. St. Louis. Atlanta just can’t get their arms around it. Even Austin can’t get behind transit. I think it’s a big issue.”Utter says those looking for signs of progress in a community should look for signs of a complete system, and for how much innovation is happening in the private sector. Again, she fi nds a great example in Denver, where fl eets of motorized scooters have just joined the bikes, skateboarders and other modes moving people all over downtown. “I love it,” she says. “It’s a mess, it slows everybody down, and it works much better.”Yes, the key to speeding up transit progress might just be slowing things down to that authentic neighborhood scale. And getting used to the fact that transit projects, like the congested commutes they’re meant to eliminate, just take a while.“So much of my work has been infrastructure,” Utter says. “It just takes so damn long. Once it’s there, people think it’s always been there, and they love it.” fi nds a great example in Denver, where fl eets of motorized scooters have just joined the bikes, skateboarders and other modes moving people all over downtown. “I love it,” she says. “It’s a mess, it slows everybody Yes, the key to speeding up transit progress might just be slowing things down to that authentic neighborhood congested commutes they’re meant there, people think it’s always been Marilee Utter, President, Citiventure AssociatesNext >