.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Fritz Trost is ready to give up trying to work with other landowners around his 0.9-acre parcel north of the Created in Johnston Inc. store on the west side of Merle Hay Road. Paying $450,000 for two acres was too steep for a mixed-use project, he said, and many landowners put their plans on hold when the Johnston City Council commissioned a study of the area.

Though the council approved a plan for a site around Trost’s property at its Oct. 15 meeting, he feels it will take a lot of cooperation from landowners who are not experienced in real estate or fear losing their homes and businesses.

“I am really impressed with it,” said Trost, a custom builder and developer. “It all looks good on paper, but is it really doable? I think the plan as it stands right now, in order to make it happen, you would have to have an unusually high amount of cooperation with everybody.” Just putting together the apartment complex planned for his area, Trost said, would take six to eight landowners to agree and could cut land values zoned for commercial development 30 to 40 percent.

Trost’s situation shows that the City Council’s approval of a plan for a Merle Hay corridor between Northwest 62nd and Northwest 66th avenues is only a small step toward making the vision real. Now city leaders will have to begin working with 40 property owners, each with a small stake in the project area, and consider incentives to attract developers.

“I think the encouraging thing is the council has agreed that they want to progress in that direction and be proactive, so that just gives the staff the direction to give more thought to it,” said Gene Martens, who recently retired as Johnston’s community development director. “In the next month or two, I think we’re going to have to evolve in our thinking of where do we go with this.”

In addition to getting property owner support, Martens also believes the corridor’s progress could be delayed by a slowdown in the development market, which he believes makes it a good time to put ideas in place that can be implemented when economic conditions improve.

“The plan is very aggressive, “he said. “I would be shocked if five years from now (we) see it all implemented.”

The vision

If implemented as suggested, the proposal prepared by RDG Planning & Design would increase the value of the area to $64 million from about $5 million.

The City Council emphasized that the plan is just an idea for the type of development Johnston could support in that area. It also is part of the city’s efforts to key in on some specific areas in its comprehensive plan; the plan always had the intersection at Northwest 62nd and Merle Hay as a potential site for a city center. But unlike other planning, where development seemed to take off immediately, City Administrator Jim Sanders believes this area could require greater city participation because developers need to work with several landowners, remove vacant buildings and improve infrastructure.

The cornerstone of the project would be a town center on the northeast corner of Northwest 62nd and Merle Hay, where the city hall is now located. The plans for the commercial center call for smaller retailers and restaurants in a pedestrian-friendly setting. The report also recommended a pedestrian bridge over Merle Hay and streetscape improvements.

“The city needs to find some draw, some magnet, and the city residents have been anxious to get other shopping opportunities in Johnston aside from the more traditional arterial kinds of commercial that we have on Merle Hay,” Martens said.

An area across from the plaza is earmarked for offices, along with a small office/business park around Maurice’s Distribution Center to the north. High-density housing is recommended for the rest of the area, which would help serve a greater diversity of families. A study of Johnston found that 60 percent of new houses being built are single-family, but only 40 percent of the city’s households are families with children.

The proposed amount of residential development might be the biggest surprise to property owners and community leaders.

“I don’t think many people realized that’s where we were going to go,” Sanders said, “but we took a look at the marketing analysis and what (development characteristics) makes sense, which includes building the residential to help support some commercial we would really like to see in the area.”

Economic Research Associates’ market study, which was part of the report, suggested that Johnston could support another 100,000 to 200,000 square feet of retail space through 2011, which would help reduce the amount of retail dollars flowing out of the community, which has the highest income level in the region.

In addition to the town center, the plan calls for vacant land just south of City Hall to also host some commercial development.

Landowner buy-in

Leaders believe the biggest obstacle will be getting landowners and developers on board. Though only three property owners stand in the way of developing townhomes south of Northwest 64th Place, 14 would need to buy into the town center concept. The plan also calls for realigning streets, which would take even more collaboration.

Landowners in areas recommended for residential development but zoned for mixed or commercial use may be even more reluctant to sell because the project could decrease the value of their land. Economic Research Association estimated the value of high-density residential in the area as $2 to $4 per square foot, compared with $6 to $10 per square foot for mixed use. Even then, Trost believes the prices are too high; his research shows that spending more than $2 per square foot for apartments would cause landowners to lose money. He paid $3.50 per square foot for commercial-zoned land, which is being considered for apartments.

“I think a lot of people thought that their property is more valuable than it is,” Martens said. “Those holding out realize that their property might not be worth commercial value because the demand isn’t there.”

Trost also pointed out that property-value assessments have fluctuated dramatically in the area. When he purchased his property about a year and a half ago, it was assessed at $33,000, and last year his assessment ballooned up to $137,600.

What it does is it puts some people’s plans in kind of a limbo on whether to reinvest in their current use or sell the property.
– Gene Martens former community development director, Johnston

Many landowners also are inexperienced in real estate or have fears that the city is going to take their house or business without their consent, even though the city has stressed it cannot use eminent domain. Low traffic counts past Northwest 62nd on Merle Hay and “years of lingering question marks” about the area will also make the development plan a tough sell, Trost said.

Nonetheless, Martens believes the majority of landowners are pleased with the city’s efforts. “I think property owners are enthusiastic – more positive than negative,” he said. “There are some people on the fringe of the plan that are concerned about losing their business. What it does is it puts some people’s plans in kind of a limbo on whether to reinvest in their current use or sell the property.”

Dennis Meyer, owner of Created in Johnston Inc. and a resident of Johnston Commons just north of the corridor, said he is not making any decisions about his business yet. From a community perspective, he said, “it is some really forward positive thinking, and it’s about time. Johnston hasn’t had the city or an individual or an organization get ahold of something in the community and try to make it happen, or at least talk about it. … If it even turns out close to the way they envisioned, it will be great for Johnston.”

For Trost, who lives in Grimes, the plan means leaving the area: “Sometimes you need to look at a situation and say, ‘Does my business plan point me towards staying here and helping the city of Johnston? Does that make sense?’ For me, it doesn’t because I’m such a small stakeholder. It makes more sense for someone who is a larger stakeholder to look at that investment.”

City steps in

RDG’s report offered the city two options to get involved in making the Merle Hay corridor project happen: promote and coordinate redevelopment with property owners and developers, or purchase properties as they come on the market and sell them in larger parcels to developers. The decision between these alternatives will likely be the City Council’s focus in the next few months.

“We’re a big landowner already with our own four acres as part of the plan,” Sanders said.

At the very least, the city is looking at incentives needed to attract developers. Though the corridor is part of a tax-increment financing district, the city will consider making policy changes to allow residential development, chain and retail stores and restaurants to be eligible. Approval of some TIF changes were delayed at the council’s Oct. 15 meeting for further discussion. Martens said the city may need to change some special zoning designations as well.

“There are numerous policies that would change in order to implement this plan,” he said, “and I think over time, the council is going to look into those. … When you deal with small parcels in multiple ownerships and when there’s residential structures that need to be cleared, there’s added cost to that, so there are some disincentives for the developers to go into an urban area like this.”

Meanwhile, some landowners have asked the city to buy their land, including Trost, who offered to sell his parcel for the price he paid.

To kick off the project, Trost also has urged the city to hire someone to be in charge of planning more events like the farmers market in the city hall parking lot, which he believes would generate excitement for that area and encourage developers to look at it. “The area where city hall is planned for mixed-use area could actually start to be used for that before it is really built out,” he said.

Those outside the corridor have voiced concern as well. At last week’s meeting, Howard Bernstein, owner of the Casa de Vino wine shop on 86th Street, said, “Just looking at this first quadrant, I’m kind of worried about competition coming in and the city throwing all its efforts behind this plaza and me being left out in the cold and wondering how we fit into this whole plan.”

Martens said he heard the same comments from Merle Hay businesses when 86th Street was under development and residents were moving west.

Either way, this corridor will likely be a main focus of the city in the near future.

“It’s an aggressive goal,” Martens said. “You don’t always achieve your goals, but you certainly try, and that’s the kind of position we’re at.”