Prospects of Marin-Sonoma transit-oriented development: An interview with David Bouquillon of Laulima

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ABOUT THE PROJECT

Location: 6400 State Farm Drive, Rohnert Park

On the internet: StationAveRP.com

Site size: 32 acres

Commercial space: 140,000 square feet

Office space: 130,000 square feet

Hotel rooms: 156

Residential units: 460

Estimated cost: $400 million

Target completion of first phase: Late 2020

ABOUT THE DEVELOPER

Communities built: 11

Acres developed: 173

Space managed: 10 million square feet

Completed projects: Bay Street, Emeryville; 2460 Sand Hill Road office space, Palo Alto; Alvarado Street retail repositioning and master plan, Monterey; Santana Row Park 40-acre mixed use development, San Jose; 631 Howard St. office modernization, San Francisco; Stellar Terrace, Dallas

The $400 million Station Avenue project in Rohnert Park that’s poised to roll the North Bay into the wider Bay Area and national world of transit-oriented development got its start a decade ago.

David Bouquillon and Jes Slavik founded San Francisco-based Laulima Development as a merchant developer, but over the past five years has transitioned to be more of a vertically integrated development group, owning and operating its investments.

That integration includes Laulima Partners, formed between Laulima Development and Highway 1 Hospitality to build boutique lodging. Other projects in the works now include resorts in the Lake Tahoe area.

Past projects include the 40-acre Santana Row Park mixed-use project in San Jose and 20-acre Bay Street new downtown for Emeryville. Laulima purchased the 32-acre Rohnert Park site in December 2017, got the city green light for Station Avenue in November, and demolition of the former State Farm Insurance building started at the beginning of this year. The goal is to have the initial parts of the project finished in 18 months.

The following are Business Journal conversations with Bouquillon on why the Sonoma County project will become a new type of magnet for jobs, shopping, entertainment and tourism. The interview has been edited for clarity.

Where did Laulima get its start?

We started off as a merchant developer. Then over the past five years we started to transition to a more vertically integrated development group that would own and operate the properties we invest in.

The name Laulima is a Hawaiian term: many hands working together — collaboration. I heard that as a young guy just out of college and it really stuck with me as I started to do mixed use because it really does take a team coming together in collaboration to pull one of these projects off.

I subscribe to the idea that there is no developer that does all of mixed use. You may do portions of it very well. One thing that we feel we don’t do well that others do better is for-sale housing, so we would partner with someone who does that.

How are you taking this background into the Rohnert Park project?

We’re going to double down. We love the investment. With the SMART rail, it’s something we’re very focused on. It’s going to bring a sense of urbane to this area but in a very conscientious way. Rail will take cars off the road; we subscribe to that. The urban centers we look at have a mixture of housing — for-sale; rentals — affordability; office component; retail — shop space, food and beverage.

We see the food and beverage component probably on the heavier side in ours, rather than a lifestyle center that relies on the shop space. We’re more of an 18-hour-a-day district where you live, work, play is wrapped all into one.

Where do you see the future of transit-oriented development in the North Bay, and how does your project fit into that, either for bringing it to the area or setting a new paradigm?

It’s strategically located in the North Bay. It’s heavily on tourism up here. It reminds me a little of the East Coast, say the Hamptons. You are going to get a lot of tourism that’s from the City (San Francisco) that would not necessarily come up here. Maybe, it’s transportation; they didn’t rent a car. I see that increasing the tourism, especially on our site.

ABOUT THE PROJECT

Location: 6400 State Farm Drive, Rohnert Park

On the internet: StationAveRP.com

Site size: 32 acres

Commercial space: 140,000 square feet

Office space: 130,000 square feet

Hotel rooms: 156

Residential units: 460

Estimated cost: $400 million

Target completion of first phase: Late 2020

ABOUT THE DEVELOPER

Communities built: 11

Acres developed: 173

Space managed: 10 million square feet

Completed projects: Bay Street, Emeryville; 2460 Sand Hill Road office space, Palo Alto; Alvarado Street retail repositioning and master plan, Monterey; Santana Row Park 40-acre mixed use development, San Jose; 631 Howard St. office modernization, San Francisco; Stellar Terrace, Dallas

Thirty-two acres is a big site, so you can create a lot of critical mass to make a great sense of place. … We really are creating our own district here. It’s not only a downtown, but I think it is also a downtown for Sonoma County at that kind of scale. We are the first significant TOD project along the SMART rail, and we take that very seriously.

For the rail being SMART, the most inefficient leg of the line is built, the middle piece, but they had over a million riders last year, their first year in operation. When it’s completed down to the Larkspur ferry, I think you’re going to see a lot more velocity of ridership going north to south, south to north. Then when (it) goes to downtown Healdsburg … that's when it’s really, really something special.

We subscribe to, it has to be office daytime population around light rail. We’ve never been concerned about the nighttime and weekend for Station Ave, because there’s a food and beverage void we feel in the marketplace. For weekends, we can program around it with music and festivals and farmers’ markets that will attract people as a weekend thing to do. The collection of all our restaurants give people a, “What are we going to do tonight? Hey, let’s go to Station Avenue.” Why? Because there are choices.

From north and south and you’re coming from Petaluma or farther down, it’s just a few train stops away. That’s a real benefit.

When I drive back to the City, it’s a sea of traffic driving north at the end of the day. In the morning, it’s the same thing only going south, it’s a parking lot full of traffic. To me, SMART is going to be a great link from the City to up north. When SMART was conceived that’s what they thought would happen, it would take people who live in the North Bay into the City by the Larkspur ferry, and they’d make the reverse commute coming back.

What happened is — (BioMarin Pharmaceutical) is a good example — certain employers have created their own employment base around the SMART stations, and you don’t see as much going into the City. The more office you can have along these SMART rails, the more ridership you’re going to have, the more cars you’re going to take off the roads, it’s going to decrease the carbon footprint, which is all good for everybody.

How would transit-oriented development in the North Bay be different or similar to what you see in Walnut Creek or similar suburban markets?

One of (the differences) is the speed of (the SMART) train, and it doesn’t go under the Bay. When you take the East Bay commute on BART, you are taking it all the way into the City. Coming from the North Bay, you do have to get on another alternate nodes of transportation via the Larkspur ferry or continuing with a car. (SMART) has only a certain amount of ridership it can handle, because of the way those trains are designed, but it is still significant enough to take people from A to B. You’re going to see more of a North Bay commute than going all the way into San Francisco.

Why did you pick Rohnert Park versus somewhere else in the North Bay?

A couple of things. One was when we saw the opportunity — that there was 32 acres available along the light rail that was entitled with one APN number (one parcel) — that gave us enough critical mass that we feel we need in our developments to make this great sense of place.

The second, and it became very obvious from the very first meeting, is the general leadership at city hall. Darren Jenkins, a collaborative, open-minded city manager, has been working on this vision long before we showed up. The city was fortunate that a developer like us was interested in investing, and we were lucky that we found a city that saw this type of development as their future. Before we showed up, the city was very progressive in doing their own (environmental impact report) for a future downtown. It was a good marriage, that we both feel the same way about the vision.

How much does your project rely on other businesses and especially employers adopting the same vision?

Downtowns remain important employment locations, and here in the Bay Area our employment patterns have significantly changed over the past 25 years. High-density job clusters have emerged outside of the central business district (CBD), along freeways and highways. This “employment sprawl” has fueled much of the traffic congestion we experience daily. Contributing significant dollars in lost time and fuel every year.

In general, TOD planning has focused on the origin side of the trip, conceived as dense residential neighborhoods and mixed-use development featuring housing built over retail. But with employment uses more closely associated to transit ridership, Station Avenue job centers is a key component of the TOD success for most employers. Having met with many HR Directors to understand their top priorities, their needs are very similar, employers value access to convenient transit, because it’s what their employee’s want.

Where do you see the future of housing and retail development? How is that going to be exemplified or taken forward by Station Avenue?

The future of retail — that industry is going to continue to change over the next five to 10 years. The stores, the shop spaces are going to get smaller. The trade areas are going to get wider. Bricks and mortar is alive and well. When retailers become irrelevant to their customers, their guests, they seem to fail more.

The indoor mall is an anachronism that, I think, is going to continue to fail. Street retail and lifestyle centers have historically outperformed the indoor malls.

So when I look at Station Avenue, we are creating a district for the way people live their lives. I think the millennials are a big part of the way we do our retailing: a lot of choices; they want everything at their fingertips. This gives them ability to not own a car, or not use it as often.

The choices people are going to make at Station Avenue will affect their lives: I’m going to take the train to work, I live there, my gym is there, I do yoga there.

What other nascent opportunities are there for more TOD — more dense, high-productivity development — in the North Bay?

We’re looking at them right now. Marin County has always been cautious about growth, where Sonma County — specifically, Petaluma, Rohnert Park, Santa Rosa — have experience the majority of that growth … with new housing being built. If I’m a southern Marin County city and area, I would want this type of TOD community near me, because it stops that traffic from going all the way north. Traffic is going to continue going north, because that’s where the building is going on.

Novato is an area we’re paying attention to. Petaluma: I think there are some spots. The challenge is going to be, with the rising cost of construction and having only a very small footprint — say, 4 to 6 acres — it causes you to build vertical construction. And we know that is the most expensive kind of construction in the Bay Area right now. It causes rents in all segments, from office to housing to retail, to increase.

Most large residential and commercial projects might have locations for bus stops and such. But clearly you and your team are taking much bigger steps to integrate the way people use transit today and in the future. Explain some of the ways how people get from Point A and Point B that influenced your team in planning your project.

It’s safe to assume not all trips are going to be via SMART exclusively, no matter how frequent or reliable it is. Driving and transit habits are changing and will continue to evolve, and with these new mobility habits, we must alter the way we design our projects. At Station Avenue for example, we’re creating designated ride service (such as Uber and Lyft) pickup locations to minimize traffic congestion that can be generated by these services. We’re designating short-term pickup parking for food delivery services (like Grubhub and DoorDash).

Easy access to alternative modes of transport is crucial, especially if other amenities can’t be found within walking distance of Station Avenue. This could take the form of a shared bike system, onsite Zipcars for a quick trip, or easy access via Uber and Lyft. In addition, we’re also preparing for a future with autonomous cars by designating vehicle queuing areas.

Even as we’re preparing Station Avenue for these future driving trends we’re also keenly focused on current driving and parking needs. We work with a “park once” strategy for our visitors, with a generous distribution of convenient parking opportunities. We’ll offer parking amenities such as mobile parking stall availability access, signage and EV charging stations.

For bicyclists, we’re extending Rohnert Park’s extensive bike lanes throughout our project as well as providing convenient bike parking. All of the office spaces will have showers and bike parking rooms. In addition, we’ll be participating in a regional bikeshare program.

We’re quite fortunate to have SMART adjacent to our project. We recognize that we’ll have two types of SMART riders visiting Station Avenue. The first type of rider will arrive at the Rohnert Park SMART station from other locations to work, shop or dine. We’re creating a major architectural feature, our portal, to welcome SMART riders to Station Avenue

The second kind of SMART user will live at Station Avenue, or in the area, and hop the train for outbound locations. For these riders, we offer amenities near the SMART platform such bike parking, commuter “kiss and ride” short-term parking, interactive SMART information kiosks, and more.

We see SMART ridership continuing to grow, with Station Avenue both helping generate more riders and benefiting from future growth.

After arriving at Station Avenue — by car, bike or train — everyone can easily navigate throughout Station Avenue in a very inspiring, walkable, environment. Through creative urban design and extensive use of placemaking features and amenities, we’re building more than streets and buildings. We’re building a sense of place — a destination for the community, a downtown.

One aspect of your plan is ride sharing, i.e. Uber. So, if someone is living at your project, and works nearby as well, what would their daily life be like? Do you see them using ride sharing as their predominate form of getting around, why?

Think about the average house or apartment complex. It’s where you live, sure, but you probably can’t get to a restaurant or store without getting in your car. It may be difficult or impossible to get to the nearest store on foot, not to mention unsafe if you’re crossing busy roads. In this environment your car requires three parking spots for your home, work and where is shop (mall or grocery store).

Station Avenue creates a walkable community that allows you to live, shop, work and dine. For instance, a typical day for a resident might look something like this:

  • Live at Station Avenue and wake up with the relief of knowing you won’t have to commute.

  • Work remotely at our creative co-op workspaces or head to work at one of the many companies that will call Station Avenue home. Don’t forget to stop for your morning coffee before heading into the office or riding SMART.

  • Play in the dirt at our community gardens, check out the art show or parties at the park or explore the nearby public art and trails.

  • Shop local for your groceries our weekly farmers' market or treat yourself to a new outfit at one of our chic clothing retailers.

  • Begin or end your day with a yoga class at Love Story Yoga.

Why do you and your company feel it essential to take this approach from the perspective of the future of the areas, as well as the success of your project?

It’s a good thing to bring people to live where they work, and it takes cars off the streets, while contributing positively in our daily routine. This kind of diversification has an urban component, which keeps the space vital and occupied 24 hours a day. People are coming and going at different times to do different things. That’s a good thing from a variety of points of view. It helps keep our space active and occupied; as you add urban vitality, you can also leverage and make it work harder.

When completed, Station Avenue will spur other private investment, lead to higher property values, promote tourism, and support the development of a solid downtown business climate for Rohnert Park and Sonoma County.

As a company we’re committed to going back to what always worked which is having retail close to home that is relevant to your lifestyle that’s inviting and scalable and relates to you as a person. We’re bring back Main Street, that’s Station Avenue.

What were the obstacles your company had to overcome to incorporate these elements into the project?

One challenge we faced early on was tenant awareness. Rohnert Park has never had a downtown and lacks an identity for why perspective tenants and businesses would want to be in RP. Since our Nov. 13 unanimous council approval and the completion of demolition, the market has responded very positively, and activity has increased significantly.

We continue to work closely with the city manager and his staff key documents such as the downtown form-based code guidelines are in place to keep the development process moving forward.

Many developers avoid what they see as the risk in trying new types of projects, but we embrace that challenge. Originality only happens once.

You’ve had to look into the future in a way, to anticipate how different generations of customers and people living or staying at your project will use transit. What research or experience with other projects helped to create this vision?

Station Avenue incorporates our most forward thinking into every aspect of design. Think about the average house or apartment complex. It’s where you live, sure, but you probably can’t get to a restaurant or store without getting in your car. It may be difficult or impossible to get to the nearest store on foot, not to mention unsafe if you’re crossing busy roads.

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