Brandin talked to In Business about Newland's community development strategy and the challenges facing developers in Las Vegas and across the country. She also provides details about the complexities of overseeing the development of Union Park, the public–private project on 61 acres at the edge of downtown.

Rita Brandin SAM MORRIS / STAFF PHOTOGRAPHER

Well, Newland has cornerstones, as we call them, about how we approach the development of all of our neighborhoods. The first is what we've called healthy living systems, the second is home and the third is called innovations.

Healthy living systems is all about how we create neighborhoods in our community that support people's quality of life - their quality of life with regards to their mental health as well as their physical health - how we design neighborhoods that allow people to recreate, but at the same time have private time.

Healthy living systems isn't just about sustainability from a green perspective. It's about creating the kinds of environments where people can live, where they can work and play and be healthy about it. Healthy is about satisfaction.

A big focus of ours as we move forward with our healthy living cornerstone is looking at what is our carbon footprint in our communities. How we allow people to get out of their cars and participate in their communities in different ways than in the traditional suburban model. I think the Union Park overlay of our mixed-use design is a great example of Newland bringing that cornerstone to life in an urban community. We've really begun to look at some of those key principles in some of our suburban communities, too.

Home is really about what people call home. We've got a variety of communities across the country, we have some 40 active projects in 19 different communities. Each of those communities, whether it's in Chapel Hill, N.C., or Tampa, Fla., or Houston, Texas, there are unique qualities about those communities that when you design a mixed-use or a master plan, you have to take into account how people live and what their expectations are about their lifestyle. So we don't have a cookie-cutter approach to what home is. We do a lot of research in the communities that we go into to do new projects, to understand the consumer's mind-set, understand what amenities they prefer and to understand what makes buying a home in a large community special for them.

Innovation is all about how do we do things smarter and differently and stay with the times. One of the examples is all of our home-finding centers across the country. We've all seen home-finding centers, whether it's Henderson or Summerlin, at some of the major products. How do you provide an environment for potential customers in your community to learn about the lifestyle? We've begun to really analyze that buying experience.

In the frenzy days, people walked in and put down their deposits and the sales folks took orders. Well, that's not the way it is anymore, so how do you create an information-sharing, experiential environment in home-finding centers? That's something that we, as Newland, are doing in a very different way. We work with a company in San Francisco called Ideo that has done a lot of branding for major packaged goods for retailers. We sort of got outside of the box about us being a real estate development company. We had a branding company come in and tell us its thoughts on how to enhance that buying experience and we're employing a lot of the concepts that they brought to the table. You'll see that, as well, at Union Park when we open our information and sales center for our first development. It will be very much about, "What does life look like at Union Park?" not just about selling a building.

We have the unique position to truly create a mixed-use neighborhood, where you've got the residential, the commercial and the civic all in a compact city mode on 61 acres. It allows us to truly provide all of those mixes of uses and lifestyles for folks. From a healthy-living perspective we were very instrumental in Union Park's submission and acceptance into the LEED (Leadership in Energy and Environmental Design) neighborhood development pilot program. We felt very strongly that since we had employed the key planning principles from the very beginning as we worked through the master plan, that it would be an appropriate project for the pilot program. We have worked through that and hope to receive Gold Certification through LEED, which is very special. Newland's influence has been positive in that regard because we've believed from the beginning that requiring projects to be LEED certified in their construction was going to be important for the future of new development in Las Vegas.

There are no concerns about the future of Newland. Newland is a 30-year-old company that has all three of its principals still strongly and actively in play. We have a great relationship with our joint partner, the Hunt Realty Co. out of Texas and solid funding for four different funds with CALPERS. So Newland, as a company - as in any smart development company - has taken a really hard look at where we need to be deploying our capital right now. In markets that have slowed down with regards to lot sales to homebuilders, we may have, in some of those cases, slowed down that development, but every one of our communities that has been active continues to be active in sales. We have, I think it's 14 new communities, acquisitions that we've made over the last three to five years that are all in the planning stages. A lot of those are in the Southeast and Northeast corridor. We have just over 380 employees across the country. Many of those are out in the field offices; they are the people on the ground who are making these projects move forward. As far as entitlements, it's a good time to be going through entitlements on new projects because that upfront work to get through entitlements in some markets, such as Florida and up in the Northeast, is time consuming. It takes one to three years for final entitlements. So, it's a good time for us to get those projects envisioned and designed and then entitled.

It came about because Dan Van Epp, who was the former president of Howard Hughes (Corp.), after he retired from Hughes, was really acting as a consultant with the city to help them negotiate the prior development agreement with the prior master-planned awardee under an (request for a proposal). When that development agreement fell apart, it was the third of its kind trying to have one developer be responsible for all of the construction at Union Park. Dan actually suggested to the mayor and OBD (Las Vegas office of business development) that they think about a different framework to move Union Park forward. Dan's suggestion was for a very strong master developer to act as a program and project manager, which might allow multiple development entities to commit to Union Park versus one developer to finance and develop and construct the entire project. That was discussed and negotiated in December of 2005, and approved by the City Council on, I think it was Dec. 23, 2005. It really came as a result of Dan looking at what may be a better way to get more development participation from other developers.

Any development project where you have multiple players involved has a rhythm and a demand on keeping all of the balls in the air. When I think about the private development of CityCenter, I can only imagine how complicated that is, with all the various hotel brands and the casino versus the retail. Any mixed-use, multifaceted development project is going to be a big challenge, but you just have to have a great team around you. A team of folks who stay focused on getting the work done. And relationship building is one of the very key qualities that you need to employ in this kind of project: communication and relationship building. Newland and the office of business development's relationship has been very strong, very open in discussing key issues, very collaborative in problem-solving. That's all you need is good groundwork to get a complicated project moving in the right direction.

Newland, when it puts its second hat on, will be one of the third-party developers at Union Park as well. We have option rights for seven of the residential core blocks at Union Park. About 2,600 of the 3,200 units proposed for Union Park are in our development agreement. We are in a development agreement that has a phased takedown, phased construction schedule, for the residential. When I say residential, each one of the blocks is required to have A-grade retail as well, so each individual block must be mixed uses as well as its core development program. We have focused very diligently on our first block, which is "F," and it's the block that's adjacent to Charlie Palmer (hotel). We've looked at a combination of product types on that block. Today we have planned a 19-story tower as well as low-rise, over retail units. We've got a nice mix of two-story condo units as well as flats, as they call them in New York, and we have town homes on that first project. We've done a lot of research trying to project into the future about demand for high-rise or mid-rise urban kind of product and looking at timeline for construction and delivery of our first units. The demand will be there. The market will have absorbed the inventory that's out there today. And we'll continue to test what that demand is for that urban product as Streamline and Allure and Juhl all get absorbed in the market.

The partners are still in place. I want to make a distinction between the Echelon project and the Summerlin Centre project, both of which are great projects (and Union Park). They are under that model that we talked about earlier, with one developer, where the project is relying on the billion and a half, or close to a billion (dollars) financing for that one project. We've got two unique characteristics about Union Park that's going to keep giving it strength in its legs. One, is that the city, as master developer, is responsible for this infrastructure construction. The first phase of the infrastructure that's under way now has been bonded from two years ago. The riskiness of the city's investment versus a private developer going out for a traditional bank loan to put in some $30 million of infrastructure is a very different place to be. The same is true with our second phase. The city will be moving toward a second bond phase around October. So, its ability to get those bonds at the right rate and to have those bonds paid back through the revenue generated at Union Park is a very different model than private developers. You always worry when you hear about projects being put on hold. There's a reality in the market that will affect timing at Union Park for our third-party developers, and that reality has nothing to do with the viability of their projects or their commitment. It has to do with the capital markets, and the capital markets are causing many projects to be put on hold. And I don't have the answer on the capital markets.

You know what? It's interesting: There is money. There's lots of money out there. The question is whether it's money that we're calling vulture funds that are looking for 30-cents-on-the-dollar projects that they can absorb and then sit on until the value comes back, or is it money that requires such significant equity from its developer that it doesn't make sense in a performer? There is tons of money out there. The other big challenge is that the big-money houses in New York as well as our regional banks have had so much real estate debt on their books that was incurred when land prices had gone through a frenzy. There's been a reset on a lot of these appraisals for land prices, thus many of the developers are getting equity calls. So when I say it's a capital market problem, it's across the nation, it's not just in Las Vegas. And until there is stabilization in this particular category, it will not make sense to go out funding these major projects.

The beauty of Union Park - again beyond these private developments - is that the city owns the land ... free and clear. You have a patient land owner that isn't pushing to sell a piece of land, unlike private developers that went out and bought 128 acres here or 61 acres there. They've got the carry of that land that generally means they are paying interest payments every month. So, we have a very patient city that believes in the vision of Union Park, that is working very closely with the developers that have been identified and are in development agreement about what is the right timing to get into construction.

I've told you this before, from the very beginning of Newland's work on Union Park, we've dealt with skepticism. Time after time when we would present, I would look out at the audience (that had) crossed arms and rolled eyes, and I would start the presentation with, "I can see you are all saying, 'Yeah, right, here we go again.' " This team has a little motto that's called: "Skepticism is a healthy motivator." I will tell you that World Market Center had skeptics, Chelsea Outlet Centers had skeptics, the Molasky Building had skeptics, but that goes with the territory when you are doing something new and innovative, when you are not doing the usual, easy, tilt-up in the valley.

In particular there have been skeptics about the World Jewelry Center and that's because it's a unique new concept. It is vision being brought to this valley that isn't easily understood, just like the World Market Center, when it was proposed. People didn't believe in its business model, but Robert Zarnegin, who is the CEO of Probity (the developer of the World Jewelry Center), is a very focused, very dedicated and a very well-capitalized developer. He has shown through his efforts over the last two years, a commitment to this concept. Whether it was here or somewhere else, he would be engaged in the same activities. To get over 160 international companies to commit and execute letters of intent for the World Jewelry Center should have some skeptics feel a little embarrassed, hopefully, in the future. As I said, "Skepticism is a healthy motivator."

I do. When you look at a developer such as CIM, that has proved, as a development company, its staying power in these tough urban redevelopment projects, and you see the commitment that they have made. They bought the Lady Luck, they own that land. The private-public part of that partnership is for them to obviously incorporate the city-owned land in a broader way to become a mixed-use project. When you see CIM and Forest City coming and committing to Las Vegas, you know there is going to be a sea change. These aren't overnight projects and one of the things about Las Vegas is we are so used to instant gratification. We are used to seeing these megabillion-dollar projects built in two years and boom: They're up and they're operating. Downtown urban redevelopment takes some time. I think 10 years from now we're going to have a downtown Las Vegas that looks a lot different.

Public-private partnerships work when there truly are incentives for developers that make their performers work. Developers are in the business of making return on development projects. The benefit for them is they can bring very unique projects to the urban core or some other redevelopment area that they would not otherwise be able to make pencil out. The benefit for the municipality, as I said earlier, is that they have an abandoned site, whether it was an old mill or an abandoned city block, sometimes vacant buildings that aren't generating revenue to the municipality. It's all about an economic development game and economic development is about creating jobs and creating tax revenue. Yes, it's about creating an environment where you've regenerated an urban core or an abandoned part of the city, but ultimately the developers get the incentives to allow them to make returns on their projects.

The general public doesn't always quite understand how cities work. The city has expenses. We all kind of understand that we wake up in the morning and we have our fire chief and our police chief and our service workers who are supporting our lifestyle. But we can only expect those services if there are revenues generated in whatever city you live in. For the general public it's about revenue generation, to allow cities to continue programs, to increase programs and to shape the quality of life in a community. Public-private partnerships - although there are incentives given to the developers - do yield short- and long-term sources of revenue for cities that are at the core of their budgets. Let me put this in perspective: We had 61 acres of former brownfield, owned by Union Pacific, but abandoned for many, many years. It is putting no income into Las Vegas' coffers today. At build out, what Union Park will provide in support for the citizens of Las Vegas will be dramatic from an annual tax revenue perspective - real estate tax, sales tax revenue, creation of jobs.

All we have to do is look out across the valley and see how much dirt has been developed. I think if there is any key thing that's changed in the development community, it's that you've got new players coming to the table, like CIM and Forest City and Newland. It's not just gaming-based. It's grown up a bit and matured a bit in the other categories of development. You've now got serious real players that are learning the opportunities in Las Vegas alongside the traditional local developers. And there's more sophistication in the development arena.

I just said that Las Vegas is really a young city, and I think the boys' club is a valuable part of our heritage. We've still got first generation developers and leaders actively involved in our community. I think that's a benefit. I don't see the boys' club as a negative. I think that as new folks to the community, you have to learn from them, you have to develop relationships and you have to increase your credibility. It goes back to appreciation for what our early leaders have done in the community and learning from and contributing to the health of our community. The boys' club exists everywhere. I grew up in the South. For me, my dad is the one who said it doesn't matter if you are a girl, it doesn't matter how you look. You've got to work hard. You've got to do more than everyone else to prove yourself. My experience has always been that if you do your homework, you work hard and you prove yourself that you can break whatever club there may be, and it's not just about the boys' club. I think the opportunities in Las Vegas have been incredible for me personally and for anyone who comes into the market, acknowledges appreciates and recognizes what came before and sees themselves as part of the fabric of the town, whether it's in development or other arenas.

I think there are a lot of factors in the country that have to recover before the local economy stabilizes. I think that the elections are going to be a huge moment in time for consumer confidence. It's really not about the local economy as it is about consumer confidence. Consumers hear every day how horrible it is. Are we in a recession or are we not? We've got realities about all of this excess inventory of resale homes in Las Vegas, that's got to get absorbed. Predictions say that there will be a stabilization of pricing and inventory levels by the first quarter of 2010 in Las Vegas. Some other markets aren't going to fare so well. Other parts of the country won't be until mid-2010 or 2011, but once we get some basic stabilization on housing - the price levels - people can begin to believe in the value of the homes they are purchasing. "Is it the right value or is it going to go down again?" Once the capital markets turn around, it will positively affect the direction of projects in the community. We still have openings of CityCenter and Encore that will have a very positive effect on employment here. If I had to say a turnaround date, I think we will see significant shifts in the first quarter of 2010. Don't put that as a hard and fast date, though.

He is still very much of a positive consultant for Newland in some of the other projects in the country. He was very instrumental on the Goodyear acquisition, the Phoenix acquisition. That is a project very similar to Summerlin. Summerlin was 20,000 acres, and Goodyear is 22,000 acres. So Dan's mark remains very positive at Newland, and in particular because he was so prominent in the original agreement at Union Park, he will continue on as a consultant. Dan's influence in the community is a very important one. He has a great reputation, and we appreciate all of the support and influence he continues to bring to the table for Newland.

We are very committed to our developer role at Union Park as well as our development role. Our key development focus will be residential, and we are in it for the long term. As the market demand allows, we believe that the product that we'll design for each one of our residential blocks will be in great demand. There are a lot of things about this market residentially, as well as markets across the country, that are causing a slowdown, especially urban residential development. But we're very committed to this project for the long term.

Now across the country, as I said, we've got some 40 odd projects in various stages of life, and we're very geographically diverse which allows us to focus in the right communities. We've been very selective about what core cities we go into, what suburbs around those core cities that we commit to. Across all of those communities, we've got 80,000 entitled homes in single family, 14,000 entitled multifamily locations.

Master-planning community development is a long-term game. It's not the same as buying a block and building a building. We're in a very strong position because we are a privately held company. We have an equity partner in CALPERS, which is, if not the largest pension funds in the country, one of the top five. So, we are long-term landowners and developers. Some of our projects take 15 or 20 years to get to completion, like in Phoenix, where we have options on 22,000 acres. We're very solid with regards to where we're going in the future. We're not dependent on one project at a time, which I think is an important distinction in the development arena right now.