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Sam Hall Kaplan

Some Shop Talk at the ULI Meet

November 02, 1986

Politicians, planners and architects are not really the prime shapers of our cityscapes and landscapes, though they usually are the most prominent and publicized players in the process.

It is the increasingly ubiquitous private developer who more often than not actually sets the pace of projects, makes the critical decisions as to their tone and style, and greases the skids so they can be built.

Developers make things happen. It is they who hire the architects and, in a fashion, the politicians--the latter through the traditionally generous contributions to election campaigns. As for the planners, alas, they tend to do what politicians tell them to do.

Therefore, to get a hint of the future of our built environment one turns to developers, for the deals they are making today are usually the basis of the architectural contracts of next year, the proposed projects of the year after, and the subsequent planning reports, political charades, citizen protests, ribbon-cutting ceremonies and design disasters and/or awards of the next decade.

It was with this in mind that I attended last weekend's conference in Chicago of the Urban Land Institute (ULI), a developer-dominated national organization of about 10,500 members with a reputation of being a relatively enlightened clearing house of real estate trends.

Put another way, if the development community could be pictured as a herd of grunting builders, investors, realtors, public officials and wheeler--dealers stampeding this way and that, followed in the dust by a supporting cast of yelping attorneys, accountants, architects, planners, hustlers and sycophants, a ULI conference is a neutral watering hole, a place to catch one's breath and have a drink.

While the formal program of speeches, seminars and workshops at the group's conferences are on occasion interesting, rarely does anyone make any public statement of any consequence. The real purpose of such conferences is for networking, deal making, backbiting and gossip.

The conference in Chicago celebrating ULI's 50th anniversary was no exception. The formal program consisted, in part, of ULI President William Caldwell declaring that the future lies ahead, and former Federal Reserve Board Chairman Arthur Burns adding that the nation's economy lies asleep.

Also at the conference attended by 2,300 persons a gaggle of venerable developers remembered the past; other developers and their consultants reviewed with hindsight select projects; and, as usual, urbanist Anthony Downs good-humoredly chided lending institutions and their regulators.

Because of the weak economy and the impending tax changes affecting real estate investments, of particular interest this year was the respected annual report of emerging trends by the Chicago-based Real Estate Research Corp.

It was delivered with verve by Leanne Lachman, who revealed, among other things, that the greatest real estate development potential for 1987 would be single-family homes. Also strong would be something she called "exotics": parking garages, specialty retail, mobile homes and retirement housing, and "premier properties," such as office and industrial projects in prime locations with good leasing prospects and institutional support.

Lachman added in so many words that in the opinion of the nation's leading real estate investors, lenders and developers, it will be a tough year for other office projects, for retail, condominium and apartment proposals, and worse for hotel development. The prediction was that office and hotel starts would drop by at least 50%.

"There will be the odd project here and there, but you are going to see very few cranes looming on the horizons of our cities and suburbs for the foreseeable future," declared George Puskar, president of Equitable Real Estate, which manages $23 billion in real estate assets.

Added Phillip Stukin of Lowe Associates in Los Angeles, "Everything is on hold, at least until the development community sees what the absorption rate is of present projects and the consequences of the tax bill."

What this means is that tough times are ahead for the design community, which for the last decade has been thriving on office towers, shopping centers and apartment and condominium complexes. Firms most likely will be scratching harder than ever for public and institutional projects, such as hospitals, museums, prisons and schools, and the rare private jobs.

But one did not need to hear Lachman's predictions or to read the report she wrote with Richard Kateley to get the drift of where development is heading.

At receptions, cocktail parties and dinners and in the hallways outside the conference sessions, the informal talk was not, as in the past, of new projects being packaged and new markets being tapped.

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