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Category Archive for: ‘Futurecasting’

  • Anchoring and Priming in Commercial Real Estate

     

    He’s contemplating anchoring and priming

    After reading Thinking Fast & Slow, I was struck by two interesting concepts: anchoring and priming.

    Anchoring is the psychological concept of mentally attaching to an initial value. The most understandable example is retail discounts. Retailers will advertize the price of a good as steeply discounted from the original price in order to distract the buyer from the actual value of the product.

    For example, Bloomingdale’s will sell you a plate for $200, but will advertize it as “Originally $300”. That way, you focus on the fact that you are getting $100 and 33% off the original price rather than trying to determine whether or not the plate is actually worth $200.

    In the example, you as the consumer are anchored to the original “value” of $300 and ignore the intrinsic value of what you are buying.

    Priming is the idea that someone can affect your actions by conditioning your subconscious. Put another way, your conscious self can be motivated by your subconscious self.

    The classic experiment to demonstrate the phenomenon of priming is the word jumble experiment. In the experiment, people would be given 5 jumbled words and asked to make a four word sentence.

    An example would be: Happy, Men, Women, Make, Bingo

    Depending on your opinion, the sentence would be “Men make women happy” or Women make men happy.” The actual sentence is irrelevant. The “outlier” word is important. In this case it is “bingo” and in the experiment, all of the words were associated with old age. So they would give obvious 4-word sentences and then include words like Florida, Retire, Grey, Wrinkle, etc.

    The key part of the experiment was what the subjects would do after the word jumble. They were asked to walk down the hall to another room and those running the experiment would time that walk. They found that the walk down the hall after the word jumble was twice as slow as the walk before the jumble.

    The punchline is that the subjects’ subconscious had been primed to think about elderly people and the body then began behaving like an elderly person (walking much slower than normal).

    Kahneman gives several other examples that ring true and drive home the point, but let’s assume that I have convinced you that priming is a real phenomenon where your subconscious will cause you to do things your conscious mind might not be fully aware of and we can manipulate that subconscious.

    Big friggin’ deal, you say. What does it have to do with commercial real estate in Atlanta?

    Well, curious youngster, both have profound effects on our business and will be worth millions of dollars to you over the course of your career.

    I would argue that anchoring is one of the fundamental aspects of negotiation and pricing and priming might be one of the single most important considerations for developers, architects, and landscape architects.

    For the anchoring argument, let’s assume you are negotiating either the sale of a property or a lease of some of its space. You do your homework, figure out a realistic value range for the property and then need to advertize your price to the market. That initial advertized number is your “anchor” and you must choose it wisely. All ensuing negotiations and price discussions will be based upon a relationship to that number.

    If you advertize Midtown office space at $33 psf, then the tenant will probably want to settle at $26 or $27 psf. It doesn’t matter to them that Midtown office space is only worth $23 psf. They feel like they got a deal. Just like the Bloomingdale’s example above, they see only the discount to the original $33 psf rather than objectively analyzing the value of the space. Everyone wants to feel like they got a deal and if you wisely choose your original price anchor both parties will come out feeling like they had the better end of the deal.

    (*Note* – Of course, there is a limit to this effect. If you try to anchor at $55 psf in the example above, clients will ignore you and pass you off as ridiculous. But, done well, anchoring can serve you very well in your negotiations.)

     For priming, I would argue that developers, architects, interior designers, landscape architects, and any other “space creators” are in the business of first impressions and must understand priming. Bob Lutz of General Motors famously said that they were in the “arts and entertainment business” because he understood the value of consumer impressions. If he could position his cars as “works of art” and mobile entertainment centers, they would transcend the mundane Point-A to-Point-B machine that cars had symbolized for many of us.

    The exact same concept applies to commercial property. If you can convince tenants that this is a safe, relaxing, a beautiful place to conduct business or live (for apartments), I bet they will be interested in leasing your space. If you can convince buyers that this industrial park is well-maintained, clean, and efficient, I would be surprised if they didn’t put an offer on the table to buy the property. You can use the subtle effects of priming to make leasing and selling your buildings much smoother.

    If you can use things like beautiful landscaping, water features, clean hallways, organized parking, and other small features to “prime” your investor/client/tenant to think that this is a great property, then 95% of your job is done. Because in the end, almost all of us are selling the same thing:

    This is a great property and you want to be involved here.

    So, if that is what we are selling, then we should all be using subtle priming methods to convince others that this is first class and well done. We can dig into more of the details of this later, but suffice it to say that everything from the way you dress to the way you shake hands to the way you smile when you talk will affect the subconscious of the buyer or renter.

    So you want to “prime” people to buy what you are selling, no matter what it is. That’s why they tell telemarketers and phone sales professionals to smile when they talk on the phone. It makes them seem happy and we consumers like to buy from happy (friendly) people.

     

    Hopefully you can see that the subtle effects of anchoring and priming can have profound effects over the course of a career. If you can get an extra 5% pricing on your deals because you anchor well or you can close an extra 4% of deals because you prime buyers well, and then compound that over a 40 year career, look out. You can waive at me from your Maserati.

    I exaggerate a little, but please don’t miss the point. In this highly competitive business, you need to use every small psychological advantage you can over your competition.

    To bring it home, when was the last time you refused a deal you wanted where the salesman warmly smiled at you and offered you an immediate 20% discount off the asking price?

    See my point?

    – Duke

  • Book Review: Startup Nation

    Startup Nation – The Story of Israel’s Economic Miracle by Dan Senor & Saul Singer

    Start-up Nation: The Story of Israel's Economic MiracleImage Courtesy Amazon.com

    I full admit that I’m a startup junkie. I love to hear the rags-to-riches stories of entrepreneurs who had great ideas and then the guts to follow through on making something special. It’s the quintessential American capitalism story and I get my monthly fix in Inc and Entrepreneur magazines.

    So it shouldn’t be a huge surprise that I read a good deal about startups. Entrepreneurship, venture capital, and the art of creating something from nothing are just fascinating, in my opinion. Oddly enough though, I got this book recommendation from David Birnbrey of Shopping Center Group.

    (When I am meeting with industry veterans to pick their brains and look for wisdom I almost always ask for good book recommendations. Startup Nation was Birnbrey’s recommendation.)

    I usually expect books that are country-specific to be overly patriotic or home country propaganda. This wasn’t like that. Startup Nation is basically just an examination of the culture created in Israel that has pushed this tiny nation to be one of the top 5 most innovative cultures on the planet.

    The author asked, “How can such a tiny country with such limited natural and human resources become such a technology and innovation giant?

    A large part of the answer, it turns out, comes from the IDF. The Israeli Defense Force is the national military that protects this small nation from hostile neighbors. Senor found out that the IDF culture is one of improvisation and questioning authority.

    For example, he found that in an air raid all planes and pilots will know the main objectives of the mission and do what is necessary to accomplish those objectives. If one plane is shot down or fails to hit a target, another plane will carry out the bombing run with the remaining explosives it has on board. Seems logical, right?

    Well in the U.S. Military (and apparently most national militaries), all planes are to stick to their objectives and ONLY their objectives. Any deviation from the prescribed flight pattern will lead to reprimand and possibly disciplinary action. Not so in the IDF.

    The IDF has created a system where you are encouraged to go “off-script” if it will lead to accomplishing the major objectives of the mission.

    The IDF also encourages questioning superiors.

    If you disagree with the judgment of a superior officer, question him or challenge her respectfully. The IDF seems to believe that leaders should have accountability to those they lead and apparently it’s not uncommon for privates to go over the heads of captains when they disagree on decisions or actions.

    So the IDF actively promotes a culture where all servicemen and women are asked to consider the broader goals of the military and to actively question authority. Senor argues that this culture leads to a fantastic startup culture once these soldiers enter the private business market. Since all adults in Israel are required to serve in the military, it’s easy to see why this mentality pervades the entire adult population of Isreal.

    While the IDF argument was my favorite theory, Senor provides ample resources and supporting arguments for why Israel has become so innovative. Be sure to check out his argument on why Charles DeGaulle was responsible for the rapid ascension of Israeli weapons technology and why Intel owes much of its chip-selling success to Israel.

    The reason I am including this book in our Commercial Real Estate Bookshelf, is that I think it is crucial to understand innovative culture. If we aspire to be next-generation leaders in the commercial real estate industry, then we had better gain a firm grasp on creating innovative cultures. If we do not innovate, we will be passed.

    So, if you aspire to inspire, then I recommend reading Startup Nation and taking note of how the leaders described in the book use deliberate and intentional practices to create environments conducive to some of the best work on the planet. If you can replicate that type of environment, there is no telling how far you and your company can go in the business.

    Happy Innovating!

    Startup Nation in Two Sentences: The tiny middle-eastern country of Israel has become a global hotbed for innovation and technology startups. This culture of innovation can be attributed to a national culture of questioning authority, improvisation, and a few other key historical events that have forced the Israeli people to innovate or perish.

    Pros: Solid arguments on the foundation of innovation, Good historical examples, Easy read and interesting anecdotes

    Cons: A bit redundant at times and can seem like an Israeli tourism magazine ad

    Target Audience: Those who aspire to create an atmosphere of innovation

    This book is best for: Business leaders looking to replicate an innovative culture

    Overall Rating: ♦♦♦♦ (out of 5)

    Here is the Amazon link to buy this book:

     

    Ratings Guide

    ♦ = Not worth your time

    ♦♦ = May be worth your time if it is specific to your industry or interests

    ♦♦♦ = A decent book and worthy addition to your library depending on your interests

    ♦♦♦♦ = A great book and an excellent addition to your library.

    ♦♦♦♦♦ = One of the all time classics. A must-read for anyone and everyone.

  • Book Review: Thinking Fast and Slow

    Thinking Fast and Slow by Daniel Kahneman

    Thinking, Fast and Slow

    Image Courtesy Amazon.com

    Don’t tell anybody, but the economist in me is breaking out. I’m starting to get more and more interested in behavioral economics, game theory, and decision theory as I grow into my commercial real estate career.

    I have found that the concepts I learn and grow to appreciate in behavioral economics are useful in my every day interactions with deal-makers and colleagues. Learning about how people make decisions and how they make rational choices given the information available is crucial.

    Let me see if I can bring it home to commercial real estate. Consider the following questions:

    Given the information available to me, should I build this shopping center?

    Given the information available to me, should I buy this flex industrial building?

    Given the information available to me, should I lease this office space to this prospective tenant?

    Given the information available to me, should I refinance my apartment complex with Life Company debt?

    Given the information available to me, should I pursue this retailer as a potential lease lead?

     

    Those are just a handful of examples of decisions facing CRE professionals that I would file under behavioral economics, game theory, or decision theory. You can certainly apply the concepts to tenants or clients:

    Given the information available to them, how will a tenant want to use this space?

    Given the information available to them, what will a shopper want to see in this center?

    Given the information available to them, what will visitors to my property want in their parking experience?

     

    Again, just a few examples of behavioral economics in action in our world, and I hope you can see why I find those concepts so relevant. They shape almost everything we do.

    That’s why I enjoy books like Thinking Fast and Slow by Daniel Kahneman. To call this a follow up to The Black Swan wouldn’t be fair, but I can say that they are highly related and TFaS quotes tBS fairly often. Black Swan told us how much we suck at predicting anything, particularly “outlier” events. I would say Thinking Fast and Slow is more about our everyday decision-making skills and biases.

    In the book, Kahneman discusses two systems of our thinking that he labels System One and System Two. System One is our automatic recall memory, our first impression, our first thoughts and reactions to the world around us. System one isn’t very good with statistics and is prone to mathematical errors and all sorts of biases.

    System Two is our more analytical, slow, methodical thinking system that takes the time to analyze probabilities, best practices, likelihood, etc. This is the system we use when we take the time to really break down a problem or decision and analyze it mathematically or systematically. We don’t rely on our impressions or memories of similar problems in System Two. We approach everything more carefully and methodically than we would in System One.

    A large section of the book is dedicated to the short-comings and biases of System One and how we, as imperfect decision-makers, rely too heavily on System One for our decisions. Kahneman does a thorough job of breaking down our biases and heuristics when faced with similar situations. He uses questions like: “Would you prefer a 40% chance to win $100 or a 8% chance to win $1000?”

    All-in-all the thought processes and common decision biases he examines are though-provoking and interesting, but I would warn you that his style of writing can tend toward academic. He is very skilled in describing complex scenarios at high levels, but tends to use numbers heavily and will stroll through complex psychological issues that the lay reader may not be familiar with.

    So, this wouldn’t be an easy beach vacation read that you leisurely peruse between trips to the pool. You need to take your time with Kahneman, take notes, and allow yourself a chance to digest these complex psychological contradictions. I think it’s worth your time to do so, if nothing else you will better understand your own short-comings in quick decision analysis and judgment and may be able to recognize when to slow down your thinking and engage System Two for some heavy lifting.

    Thinking Fast and Slow in Two Sentences: Each of us have two systems of thinking: System One (Thinking Fast) and System Two (Thinking Slow). System One is our quick-judgment, memory, and recognition center that is prone to errors in estimation while System Two is our more analytical and statistical system that methodically breaks down options to reach rational conclusions.

    Pros: Very interesting foray into psychology that explores decision-making, game theory, and behavioral economics. Well-researched and well-argued.

    Cons: A bit length and highly academic/mathematic in parts. Not a leisurely read.

    Target Audience: Any reader interested in human psychology, the psychology of decision-making, heuristics, game theory, and behavioral economics.

    This book is best for: Someone wanting to analyze and improve the way they make decisions and judgments.

    Overall Rating: ♦♦♦ (out of 5)

    Here is the Amazon link to buy this book:

     

     

    Ratings Guide

    ♦ = Not worth your time

    ♦♦ = May be worth your time if it is specific to your industry or interests

    ♦♦♦ = A decent book and worthy addition to your library depending on your interests

    ♦♦♦♦ = A great book and an excellent addition to your library.

    ♦♦♦♦♦ = One of the all time classics. A must-read for anyone and everyone.

  • Writing for CRE – The APJ’s Editorial Guide

    As you begin to build your writing toolkit, it may help to have a guide on writing articles catered to a CRE audience. What follows is the APJ Editorial Guide that serves as a kind of checklist for writing articles that fit well with the content guidelines and format of this site and many other CRE-specific sites.

    I would argue that most of these points are universal to blogging in general. In fact, this entire guide was paraphrased and tweaked from Michael Steltzer’s SocialMediaExaminer.com. (Be sure to check them out for cutting edge social media news and tips!)

    Audience Profile – Commercial Real Estate professionals in Atlanta. This group includes 19-year-old interns and 70-year-old chairmen. So be basic enough for beginners to follow, but not so simplistic that you’re boring or condescending.

    Article Length – Depends on the article subject. If you’re writing a quick note or observation on breaking news, keep it 200 words or less. If you’re writing a comprehensive guide to retail tenants in Buckhead, you may need a couple thousand words. Err on the side of brevity, but fully explain and defend your points.

    Use Short Sentences – Again, brevity is key. Readers want color and description in novels. They want facts and pithy anecdotes online. Keep it short and sweet.

    Add Plenty of SubHeaders – This is a great way of breaking up long lines of text. Most experts suggest a new header every couple paragraphs. Use you judgment here because you don’t want to split up a great point just for the sake of breaking up the page, but this practice will help keep your points succinct.

    Highlight Key Text – There are usually one or two sentences that contain the main thrust of your article. Highlight or bold them. This will help drive your point home and give it the visual pop to stick in your reader’s mind as he or she glides through your text.

    Link to as Many Sources as Possible – This is a great way to integrate with the web and add substantial value to your reader. If you can aggregate all of the supporting and exemplary articles that coincide with yours, you will save your reader the time and hassle of doing so. Plus, for whatever reason, linking to articles that support your point of view or act as poignant examples seems to give you more credibility. It’s almost like saying “I’m not the only one who feels this way.”

    Use Internal Linking – This is a great way to improve the flow of your site. Interconnecting articles with others will allow readers to have a better and more thorough experience on your topic and it will encourage readers to click around in your archives (almost always a good thing).

    Try to Quote People – Just like the links, this seems to lend credence to your view. If a smart, well-known person shares your opinion you look smart. It’s the halo effect. Readers are impressed by the smart person who agrees with you and therefore become impressed with you. Support yourself and gain readers with good external linking.

    Include at least One Image – How often do you read a blog or site that is 100% text? Almost never, right? That’s because web designers and marketers have figured out that images catch eyes, not poignant articles. If you want to catch someone’s eye in the middle of the “information onslaught” that is web surfing, you have to have something visually appealing to catch it.

    Use Video When You Can – An under-utilized medium. It’s actually very easy to record yourself saying something interesting or insightful and can be much quicker than writing an article. Check out our Image guide for a few tips on capturing videos of your screen or yourself. You can also drop in something from YouTube or Vimeo to add color to a point or illustrate a new project.

    End Your Article with Engaging Questions or Action Requests – You want readers to comment on your post or go do something. This is your call to action and it is where you will move readers from being passive observers to active participants. So take some time to think about your last statement or question and how you want your reader to respond to what you just wrote.

     

    That’s the basic Editorial Guide for the APJ and hopefully a decent template for articles written on commercial real estate in general. Can you think of anything we missed? Have you found any other tips or tricks that you like? Please share them in the comments!

    – APJ Staff

  • We Built This City on Eth-nic Foooooooood!

    Brookhaven!!!!!

    So Brookhaven’s a city.

    And now I live in the suburbs again. Dang it.

    Oh well.

    Now it’s time to see how a city is built. I have a few friends and neighbors who were heavily involved in the creation of the new city and I will be working with them over the next few months to figure out how this whole shin-dig is going to play out.

    I see from the BrookhavenYes site, that the city begins operation on December 17th of this year. Presumably there is a ton of work to be done when trying to create a new government from scratch.

    Between now and then, I have a few questions that I would like to have addressed:

    What about the budget? Who makes it? Who approves it? How is it balanced?

    What about taxes? I’m told that they will be low (3.35 mils), but why do we think we can run a government with lower tax revenue than any other government?

    What about the big three? Atlanta’s three biggest problems are transportation, water, and education. What are we doing as a new city to address those?

    Where will town hall be? Where will any of the Brookhaven government buildings be?

    What is the election structure? Who are we electing and when do we elect them to plan this party?

    When do all these new policemen start patrolling?

    What about zoning? I’m familiar with the Brookhaven-Peachtree Overlay District and its zoning requirements, but what will this new animal want in new developments?

    A decent resource for new residents of Brookhaven

    While you ponder those vexing queries, here are a few resources for you to conduct your own research.

    Brookhaven Yes FAQs

    Brookhaven Map

    Google Map of Brookhaven

    Brookhaven Yes Board (J Max Davis seems to have all the quotes)

    Brookhaven’s Wikipedia Page

    AJC article on the challenges facing the new city

     

    What do you think about the new city? Are you optimistic, pessimistic, legalistic, masochistic? Do you have any more resources? If so, please share them in the comments.

    – Duke

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  • When I grow up, I want to be Jordyn Wieber

     “It’s not how far you fall but how high you bounce that counts” -Zig Ziglar

    Fine. I’ll admit it. I’m addicted to the Olympics.

    I LOVE watching our country compete in anything and the Olympics create this unique, high-tension environment where everyone is watching and Gold is on the line.

    Say what you want abut NBC, they are dominating my DVR right now. (I recorded the weight-lifting championships yesterday!)

    I even get into Women’s Gymnastics.

    Yep.

    I’m a 27-year-old, testosterone-filled meat-head and I like watching our girls flip around on balance beam, uneven bars, vault, and floor routine. Don’t judge me. Blame it on Kerri Strugg. I was 12 when she stuck that vault in ’96 a few miles away from where I was sitting. I’ve watched ever since.

    So, it should come as no surprise that I was watching this past weekend and I was watching last night when our girls, the so-called Fab Five, were competing. I’m not a sports reporter and I know a little-more-than-nothing about Gymnastics (I’m 6 foot freaking 7), so I will leave the details and superlatives to the experts.

    What I do know is courage and toughness.

    It’s the double-edged sword of sports that we can see the best and worst about us. You can know some of the most extreme highs and intense lows through competition, and sometimes they happen in the same week.

    Enter Jordyn Wieber.

    Wieber, as I am told, is the defending world champion in the individual competition. In my basic understanding of the sport, that means she is the best all-around gymnast on the planet.

    In the Olympics, girls compete on the team level and individual level. Their qualifying scores from this weekend determined who would qualify for the individual finals and which teams would qualify for the team finals. Through a quirk of the Olympic rules, only two girls from any one country can qualify for the individual finals. So, even if the U.S. has 4 of the top 5 gymnasts on the planet (which I am told is true this year) only two of the four can qualify for the individual finals in the Olympics.

    Again, I will leave the drama and sportscasting to the pros, but Wieber ended up placing third or fourth of all girls and two other Americans placed ahead of her.

    The reigning world champion did not qualify for the individual finals.

    NBC made sure to get a ton of close-ups of her sobbing into her hands as soon as she learned she wouldn’t qualify and in one particularly torturous shot they showed the U.S. teammate that beat her in the foreground as she was crying in the background. (Sometimes I think you have no soul, NBC.)

    But Wieber’s Olympics weren’t over. She still needed to compete for the team title for the U.S.

    Long story short, she did so last night and led our girls to their first gold medal since the aforementioned Strugg killed it in ’96. She was terrific. She was the team leader and maybe the best performer in the gym last night in London. Knowing that all personal accolades were gone and any individual medals were hopeless, she still went out and crushed it and led our country to a gold medal.

    Cool story. Queue the epic music. Wave the flag. And so on.

    Yeah, I was proud of her and proud of my country. But more than that, I was motivated. Whatever Wieber has inside of her, I want that.

    You may wonder what Olympics gymnastics has to do with commercial property in Atlanta.

    Well, you may have noticed that the last 5 or so years in our economy haven’t been so great. We aren’t exactly sailing smoothly. Some of the greatest names in our business in the last 20 years have retired, gone bankrupt, or just folded and drifted away.

    We are an industry that literally built the city of Atlanta. Yeah, we have Coke, Home Depot, UPS, and some other cool businesses here. But, at our heart, we are a commercial real estate city. We led all major U.S. cities in growth over the last 10 years (prior to ’08-’09).

    Our industry was home to the leaders and innovators in a great city heading for great things.

    Then 2008 came along. We got hit. We got black eyes. We lost momentum, time, and money.We lost chances at greatness. No doubt about it.

    But if little Jordyn Wieber can find the strength and courage to do what she did last night, why can’t we?

    Ours is a city filled with brilliant and talented people who have all been hurt by this Great Recession. Some of us have wanted to sulk into a corner and cry (and some of us have).

    But, you know what?

    The sun came up this morning. Today is a new day. Tomorrow is full of promise.

    And we still have something worth fighting for.

    This is a great city with a bright future and I’m excited to see where we can go. We have our issues to work out and demons to overcome, but we can be great and we just need another chance to show it.

    Maybe you went bankrupt. Maybe you damaged your reputation. Maybe some great relationships have come to an end. Maybe you lost your life savings. Maybe some dreams died.

    Cry. Get upset. Get angry.

    And then move on.

    We have some great things we still need to do around here, and our teammates need us to step up.

    So, here is a toast to Jordyn Wieber and a toast to all of us. She showed us what we all need to do after a crushing blow. Move on, keep competing, and act like the best.

    Do that . . . and greatness will never be far away.

    Thanks Jordyn.

    – Duke

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  • TSPLOST Videos

    In case you’re late to the polls today (polling ends at 7pm in most areas), here are a few more opinions via videos on TSPLOST –

  • T-SPLOST Vote is Tomorrow, How Will You Be Voting?

    For those in the Atlanta area, there may not be a single issue more important than the T-SPLOST vote on tomorrow’s ballot. Here are some great links to help you decide how you will be voting.

    Both sides weigh in on this AJC blog.

    Here are the facts as laid out on the T-SPLOST website.

    Those that oppose T-SPLOST have a very detailed blog that will include updates on voting throughout the day. Visit them for info on why they say to vote NO!

    Here are some of the T-SPLOST claims and why this writer thinks they are unfounded.

    T-SPLOST pros and cons is a quick overview of both sides of the fence.

    Untie Atlanta wants voters to vote YES to T-Splost!

    Creative Loafing shares pros and cons on the proposed tax.

    And of course, our own Atlanta Property Journal has been on the T-SPLOST debate for a while now. Take a look at these past posts for some helpful info:

    Can We Trust the DOT?

    Rounding Up T-SPLOST

    Questions on T-SPLOST

    APJ Quick Guide To T-SPLOST

     

     

     

     

     

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  • TSPLOST – Can We Trust the DOT?

    Gotta get downtown . . . .

    Our second question about TSPLOST is whether the DOT can get the job done on time and on budget.

    If I were hiring a contractor for a job, I would obviously want to do some background checking, get references, and see past work. If I am going to decide that Atlanta should spend several billion dollars on 150 projects around the city, I want to do the same diligence on the Department of Transportation.

    Is the DOT going to get job done on time and on budget?

    Well, I have watched this project improving the Peachtree Rd corridor from Piedmont to Peachtree Dunwoody. They seem to be doing fine, but doesn’t it seem like it has taken about twice as long as it should? I don’t remember the exact timeline for the project, but it has been several years to add a simple median with some plants.

    I also remember the project at Roxboro and E Paces. What did that take? Like 10 years?

    Or the widening of Abernathy from Roswell to Johnson Ferry? That’s been about 5 years and I still see orange cones.

    400 was supposed to stop tolling me when it was paid for. It got paid off a couple years ago . . . . I still pay. (I know Governor Deal claimed this would stop at the end of next year, but I am still paying right now.)

    I guess the moral is that I trust the DOT about as far as I can throw them. I know there are thousands of reasons for delays, setbacks, and cost overruns and maybe my expectations are too high. But I work in the CRE business. Construction is a little hobby of mine. We seem to get our stuff done on time and on budget.

    Having said all that, this TSPLOST vote is supposed to keep the money with the Georgia State Financing and Investment Commission and is also requiring the creation of a Citizen Review Panel to oversee progress of the projects. (Scott Selig wrote a decent article including these two entities here.) I have no idea who is selected to be on these two special groups or what “power” they will have.

    For example, if the DOT runs late on improving the 400 and 285 interchange, what will the Citizen Review Panel do about it? Will they write scathing letter?

    Good . . . now I feel better about the hundreds of millions of dollars we allocated there.

    Do you see what I’m getting at?

    The DOT’s track record is against it.

    Fine, then they are doing something to increase the accountability.

    Good idea. Did they go far enough?

    Meh . . . . maybe.

    I’d call this one a wash. I think they are trying to do more to hold the DOT to budgets and timelines, but decades of history are working against them.

    So let’s call this is solid “Maybe”.

    On to our final thoughts on TSPLOST Monday before the big vote Tuesday.

    – Duke

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  • Rounding Up TSPLOST

    I guess this is what rush hour will look like if we pass TSPLOST . . .

    As part of our ongoing discussion on the Transportation Special Purpose Local-Option Sales Tax, or TSPLOST, referendum up for vote on July 31, let’s take a minuet to dig a little deeper into these projects on the proposed list.

    We previously looked at a list of the projects proposed based on a map found at UntieAtlanta.com. Using that map, I counted 147 projects (some of the literature claims 157, but we are cloe enough to make some generalizations) spread across 10 metro counties. I am fully admitting that I may not have ALL of the information on this referendum, but I think I have MOST of it and that should be good enough to get a general sense of what is being proposed. If anyone knows of a more comprehensive or accurate resource than the ones I have used for my data-gathering, please let me know in the comments and I can update!

    So, as we are trying to figure out whether this initiative will actually alleviate some of the traffic burdens of the metro area, let’s take a deeper look at the projects, their budgets, and noticeable trends.

     

    The firs thing I notice is how spread out these projects are. I was under the impression that this was an Atlanta initiative. This looks more to me like an Atlanta MSA initiative with projects in every major suburban area (except the Panthersville/SE Atlanta corridor, interestingly).

    This handy pdf from Georgia Trend shows a quick breakout of the projects by region as follows:

    North Fulton – $384,900,000

    Northeast – $898,950,000

    East – $67,300,000

    Henry County & Southeast – $213,000,000

    Clayton County & South – $313,170,000

    Southwest – $196,860,000

    Douglas & Westside – $332,860,000

    Downtown & Midtown – $601,892,477

    City of Atlanta – $134,332,592

    Dekalb Projects – $185,250,000

    Total – $3,328,515,069

     

    A few things that stand out when looking at these numbers.

    The City of Atlanta is getting about $740 Million. That’s about $140 Million less than Gwinnett County.

    Is anyone else surprised that the largest number is going to Gwinnett? What does that say about our transportation priorities?

    Having said that, our last post had $112 Million going toward improving MARTA, so I suppose that could be counted toward in-town funds. But that is STILL less than is being spent in Gwinnett.

    Gimme more stop lights!

    While we are on the topic, why am I paying for upgrades to MARTA? I don’t see any new branches being developed or neighborhoods being reached by our rapid transit. So why am I sending money to MARTA to update their elevators, ventilation , passenger notifications, etc? Doesn’t MARTA have it’s own budget?

    Am I paying to bail out MARTA?

    As far as the in-town stuff goes, you know I love the Beltline and think it’s a great draw for bringing people to the city.

    I notice we are fixing some bridges downtown. Hmmmm. I also notice that our road projects in town seem to be cheaper than the suburban surface road improvements. Maybe that’s because some of those suburban improvements are widenings, but it seems odd that most of our road improvements are a couple hundred thousand dollars and most of the suburban deals are a couple million.

    From my list, I counted a total of 82 projects that I opposed and 65 projects that I supported. That’s closer than I expected, but I still oppose more than I support.

    All told, we are proposing to spend approximately $2,407,040,000 in the suburbs and $1,033,475,069 in town (I am including the Dekalb and MARTA stuff as in town).

    So, in a city whose culture has been decimated by sprawl, we are proposing to fix our transportation issues by spending more than twice as much money on suburban projects as in town projects?

    Hmmmmm . . . . maybe I am missing something.

     

    What else did you readers notice? Any trends or special projects of interest that stood out as you were trying to wrap your head around this massive proposition?

    Now that we have gone through what is in this deal, check back this week for an analysis of whether the DOT can pull this off.

    – Duke

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