What about a Green Bay Packers model for Real Estate Development?

With the North Campus of the State Hospital, the O'Brien car dealership parcels in downtown, the debate over a new Police Station, a stalled Request for Proposals at the Blind School, and the elongated development time at Boise, it seems like the moment might be ripe in Salem to at least talk about a different model of real estate development.

Howard Hall at Church and Mission

A little over a year ago there was a story in Atlantic Cities about a crowd-funded real estate development model in Washington, DC.

It's operated by a firm called Fundrise. Basically they created the legal framework for neighborhood residents to be able to invest as little as $100 in what amounts to a publicly-owned real estate deal. (It was complicated and difficult!)

From the Atlantic piece:

Dan and Ben Miller began tugging two years ago at a simple question they believe is central to the failings of the American real estate industry.

The brothers – sons of a well-known Washington, D.C. developer – had begun acquiring properties themselves in the city’s emerging neighborhoods where traditional capital seldom goes. Real estate developments are typically financed by wealthy investors who live in the suburbs, or by Wall Street funds even farther away. In a neighborhood like Washington’s H Street Northeast corridor, this means that local projects often can’t find backing, or that far-flung investors put up safe, formulaic products in their place: say, "the glass shiny office/condo building that’s horrible," Dan Miller says, grimacing.

This model – with its broken connection between a neighborhood’s desires and its investors' bottom line – seemed to the brothers illogical. Why couldn’t people in the community invest in real estate right next door? Why couldn’t the Millers raise money to purchase a property on H Street from the very people who live there? The neighborhood is a quirky mix of barbershops and hip beer gardens. It’s not the kind of place that investors from wealthy Chevy Chase, Maryland, quite get.

With "pride of ownership," in some ways it's like the Green Bay Packers approach to community ownership.

Perhaps as important as "pride of ownership," though, is that neighbors have deep knowledge of hyper-local market conditions. Instead of crappy big-box generic development, neighbors can specify exactly what they want and what a neighborhood needs.

The concept the Millers put together has mutated and grown.  The Fundrise project has a staff, including regional representatives - one located in Vancouver, WA, in fact! - and looks more like a high-tech start-up than a DC real estate development firm.  Clearly they are trying to scale and port the model to other states and cities, and it may be that there are additional regulatory hurdles that vary from state to state.  But there is also a private part of the website that promises to link "accredited investors" to other deals, and this match-making service looks a good bit more exclusive than a project for neighborhood investors at a floor of $100.  It's probably true that the intellectual property and corporate concept can be used for multiple kinds of arrangements and may have revealed powerful flexibility - or it could be just the same-old, same-old.

Reading about the company is fascinating stuff, and it would be even more interesting to see if there are conditions in Salem amenable to a project like this.  Most of the developments associated with Fundrise are in larger cities - Portland and Seattle have some presence, for example.

But if Salemites aren't getting the kind of infill development they want, and are faced with several large parcels coming into the market in the next decade, maybe there's something here of interest.

Update, March 12th

Not sure this is worth a separate not just now, but see comments for update on this piece that discusses a proposed land trust as well as additional State measures.

Update, March 15th

From the piece

Representatives of neighborhood associations, historic preservationists and others had an opportunity to review a local group’s vision for the Oregon State Hospital North Campus at a private meeting on Thursday.

Geoffrey James and Gene Pfeifer presented their ideas for redeveloping the North Campus, which they called the “Salem Solution,” to a small group gathered at the Grand Ballroom. James, a local architect, and Pfeifer, a construction specialist, have proposed renovating six historic buildings on the North Campus and incorporating them into a mixed-use development.

James and Pfeifer suggested that business tenants, a university campus and housing were possibilities for the 47-acre North Campus.