How Are Modern City Centers Evolving to Suit Hybrid Desires?

Hello, everyone, and welcome to the very first edition of fx's brand new show, where we break down the modern construction industry today we are talking city centres, specifically what it takes to plan, build and maintain them and to break it down. We brought in the expert himself, vc's own Verizon CEO Derrick Ali. Derrick, how are you doing today? Wonderful thank you, Ben. Well, it's so great to have you on Derek. I know you guys have completed, even just recently, some brand new city center projects. We're going to talk about that today and maybe some of the things that historical city centers could do to elevate their game and the modern day. So, Derek, let's kick it off really hot from the start. Talk to us about what a modern city center is, right? We're talking, we're not talking about something that's a little bit older. We're talking about 2020 2032 1,040 something that is a modern city center. What does that look like to you? Yeah, it's interesting because you know, that term city center might have historically meant something very different, right? I mean it it could have had a civic nature to it. It could have had a lot of different things. And I think the transition from city center to multiple community centers is almost the best way to describe it. What as we've urbanized as a country and as a world, as population has gotten into more dense areas, frankly, you find yourself having to think of it as a community center. What's happening specifically on that corner, what's happening within that radius? And so, you know, some of the things that transcends it, too is that there's no cookie cutter way to approach it. It's very much so about partnerships. We might get to that hearing a little bit later in the discussion, but it's about partnerships from a public private partnership perspective. It's about partnerships of community understanding, you know, really what the locals on the ground want to see. And I guess ultimately, you know, we live in a world where there's a lot of drivers to grab people's attention. And so ultimately, it comes down to having multiple aspects of connectivity. Obviously, in the built world, we see that through a mix of uses. So, you know, apartments, office, retail, but even dialing deeper into that, which we can get into is you want somebody thinking, I have eight reasons to go to this place, not just one reason. So so developing projects and building projects that are fulfilling multiple aspects of somebody's daily life is critical to create that engagement and that connectivity. Well, you know, Derek, you mentioned that there's not really one cookie cutter approach anymore. What are some of the things that you're seeing that are a little bit more non-traditional in the modern city centre? Well, you know, so the reason that there's a lot of ways to unpack that question, frankly, the reason it's gone, there's no cookie cutter and you can't rinse and repeat, which is what we all like to do and what we wish we could do. One is the nature of changing patron interest and demand, so people are changing what they want a lot more quickly than they used to in the past. And you know, they're the interconnectivity of nature and how we can create urban environments in nature is probably one of the biggest things I'm encouraged to see. Really, every qualified developer that we might work with in today's world is figuring out how to touch on a historic aspect of the community that they're living in to intertwine the natural environment into the physical built world environment. And so and you know, a lot of that comes with cost, and I think ultimately they're finally seeing that there is a return to be realized from that cost. If you really invest in making a place special, people are going to come back and they're going to come back for more and they're going to do it quite often. Well, that's great insight, Derek. I appreciate that it's one of the questions that we hear all the time and, you know, not only in a city centered planning perspective, but maybe in a population growth perspective as well, is, you know, how long does it take to a grow a population big enough in a specific place to warrant the city centre? And b, how long does it take to actually plan and build that city centre? Yeah, great question. My facetious answer is it takes somewhere between, you know, two years and two decades to plan a city center. I guess the point I'd make here is you got to you got to change the scale on which you think of something as a city center. So there's an opportunity in lots of cities, almost every city, even with smaller populations, to create a dynamic experience on the right scale. I mean, and so, you know, we tend to think of city centers as these, you know, multiple million square feet mega, you know, hundreds of acres, typekit projects or super dense vertical type projects if they're not on large land acreage, it doesn't have. To be like that, it's about engagement, it's about doing really what connects with the community. So so we're currently working in a lot of traditionally suburban markets, frankly, but to deliver the urban feel on a smaller scale that there's plenty of demand for. And frankly, the people in those markets deserve it just as much as somebody that lives, you know, in a New York City or in La and. And I'm encouraged again to see really, you know, design development teams and contractors and cities think of ways they can engage existing space and take it to the next level. That's right, sized for their community. But it just really depends. I mentioned I'll keep going been just for a second. I mentioned, you know, this concept of public private partnership. I can't stress that enough. And frankly, it goes to private partnership as well. We can't think of ourselves as competitors in today's world as much as we might have. The best projects I believe are done in synergy with not only the local municipalities, but with the other developers that might be around them so that everybody can win together, frankly. And so sometimes that adds level of complexity. And that's why, you know, I give you a wide range of how long it might take because it just depends on how grand the vision is that you're trying to deliver on average, you know, you're spending at least a couple of years to get out of the ground. Well, thank you, Derek, for that. That really oddly specific answer. But, you know, you mentioned private partnerships. One one of the city centres, you guys just cut a ribbon on what's called grand scape, right? And you know, private partnerships is you've got an anchor tenant like Nebraska Furniture mart, but you've also got shields shields. You've also got Andretti karting and racing. You know, talk about how the partnership between the core tenets really is imperative for not only planning, but the promotion of the space. Yeah, it's such an important point. And that interconnectivity between the retailers themselves or the end user, whatever the use might be, whether it's an outpatient surgery center or whatever it might be, you know, you have there has to be an interconnectivity between the users and what's and what's around them. So ultimately, I mean, the beauty of grand escape to your point there is something for everybody. There's there is a flavor of it's a very walkable environment. There's great physical connectivity between the space. So to get from you're not changing experiences. When you leave Nebraska Furniture Mart and you enter shields, you're getting high quality customer service at both places. Same for galaxy theaters. Same for Andretti and all the rest of the uses and restaurants around. And so and and I got to give the landscape development team a lot of credit because they sought best and quality retailers and tenants that believed in that philosophy and wanted to be part of something bigger. Yeah, we're going to operate our store on a great level, but we know that like, we're happy when our customer leaves happy and they're walking into one of our neighbors stores like, that's a good thing. It's not. It's not what we want to keep them in our store and our store alone because ultimately the better holistic experience a patron has, the more often and the more likely that they're going to come back to take another bite of that Apple. Yeah, absolutely. I actually had a chance to visit Grand scape this weekend. Actually, vc's office is up in the new grand scape complex in the colony, Texas. It's a fantastic space, but you mentioned kind of the flow from one place to another. You know, I think Nebraska Furniture Mart was built, I think, five or six years ago, and it was one of the only things out there. And you talk about building into a flow. How do you build a city center specifically to accommodate for that flow? Is it finding the correct tenants? Is it similar architecture? Is it, you know, similar brick colors? Or, you know, what do you think is the key there? Yeah, you get you've got to keep. I would describe it as the human scale in mind. It's so easy to get lost in the forest when you're thinking, OK, I want to maximize the amount of rentable square foot. And because I have a forma and I'm trying to get to return at the end of the day, you've got to close your eyes and put yourself as a human being in the space. And so I think again, something that we're proud to have been a part of, and I give a lot of credit to the pre-planning that went into this project, the level of detail of the customer, the human perspective. And when you're walking, you're not walking in some sea of towering buildings where you feel like an ant, you're there is well maintained and mature landscaping there, you know, a lot of connectivity to the outdoor. Obviously, this is a very they wanted to create in particular, a very walkable environment here. So the way you think about things like parking or where restrooms are located and how, you know, these are things that back when and the old model of how we would develop space, you might just throw that to, you know, we're going to put the bathrooms wherever they fit and let's be done with it. No, now you want you want mothers to feel comfortable and know where they're going to go to the rest of you. You want this interconnectivity that gets people moving throughout the center because that's ultimately going to be better for the tenant. So in this case, you know, instead of having a Main Street with parking in the middle, all the parking is wrapped around the outsides. And once you get out of your car, it really feels like a place that you can spend hours at. That's proving out to be exactly what people are doing. And so it's you don't forget about the human aspect of like at the end of the day, people people are going to be used in this space and it just takes being thoughtful. Yeah, Yeah. I mean, you mentioned the human element there as well. Obviously, if humans aren't interested or they're bored or they don't think there's enough to do, they won't show up, right? So how do you do? How do you decide on some of the core tenets and maybe some of the amenities that are going to, you know, pop up in this space? Are you guys doing focus group testing? Is there an element of, you know, we want to start with these four or five core tenets and expand from there? What is your process with that? Yeah, it's all the above you got to we still and you know, of course, you know, we're the. Tractor, we're a partner, so we get we get the benefit of saying, hey, just tell us what you want to build and we'll build it for you. But no, I'm being, I'm joking because ultimately we're sitting around the table as a partner in the process to throw out good ideas and to think about it from that end user experience, because ultimately we want to be associated with the projects that are going to be highly successful in the long run. And so, so yeah, I mean, you know, coming back to that, that thought process of you've got to have some anchor of critical mass. So whether it's an apartment component that's going to be the anchor or whether in the case of grand escape and lots of other projects, it's an entertainment district that's going to be the anchor. You need something for the headline billboard to draw people in. Now what's critical is not stopping there and thinking, I can, I can. I can get away with one headliner and then, you know, people are going to come and the rest of it, I can. I can. I can cut, you know, cut corners and do whatever it's. It's the nuance of experience that keeps people coming back for more. So eventually, authenticity plays out in a really, really big way and and again ultimately comes down to that customer experience. I think we're in a world where in particular to retail, because I think city centers in a lot of senses are defined by the retail experience around them because that's what the vast majority of people have a chance to touch and feel more expertise at the service provider level. So I think, you know, there's a lot of talk about minimum wage and hiring and how can we hire labor? I think you're seeing the best retailers lean in and say, we're not worried about minimum wage, necessarily because we're worried about training at a higher level. We're worried about making sure that our salesperson on the floor is knowledgeable about the product and knows how to drive the customer to a great decision that's going to make them happy. And so those are the types of things that are slowly but surely becoming pervasive. And I think it's a great time to be a consumer because the innovation that's happening in our world, but in particular to the built world environment is tremendous. And so, you know, I think city centers and cities in general are going to just continue to get better and better and more dynamic for the local communities. Well, when you think innovation and you think future minded, there aren't many more places that come to mind, then the Las Vegas strip that may not have been what you guys thought that I was going to say. But you know, when you look back at the Las Vegas strip, Derek, it's a place that was formed almost 100 years ago on the core tenet of gambling, right? And we talk about evolving with the times and planning for the future. Vegas is now, I would say, potentially the entertainment capital of the United States. How do you look at a city like Las Vegas and you say, hey, they've adapted really well, how are we going to take some of these tenets and bring it into, you know, some of the things that we're constructing, maybe large scale city centers, but also maybe some of the smaller ones as well? Yeah well, so I guess I'll come back to the point I just made and build on it a little bit, which is you can't just have the marquee billboard use and ride your coattails on that. So Vegas, the marquee billboard use obviously is casinos and Casino floors. That's the moneymaker. If they were only worried about like, OK, this is what makes money, let's replicate it as many times. I mean, the strip would be nothing but Casino and slot machines. They know that that's not going to work, though, right? People need a place to eat. We want you want to. A lot of the data that goes into thinking through this is how can I extend the patron stay incrementally longer than it was before? So in the terms of Vegas, it may be an extra room night in terms of grand scape or other mixed use centers around. It may be an extra hour or two on the ground, not just coming in and out. And so I think Vegas, there's a lot to be learned from Vegas, you know, and a lot of it comes back to that human scale in that human perspective. Walkability, I mean, crossing the strip is an uncomfortable thing to do if you have to do it on, on, on the crosswalk. So what do they do? They've developed these sky bridges. How do we move people between these different uses? And then of course, you know, they're on the cutting edge of technology and digital entertainment. And so it's pretty epic what's happening in Vegas. And I think there's a lot of lessons to be learned because you can scale that down to fit your community. Yeah, you're not going to build a wind towers and you're not going to build a, you know, 1,000 foot high Ferris wheel, necessarily in every city in the country. But but you can get creative and take and take. Specks of pizzazz that Vegas has defined so well and bring it to your community for sure. Again, we are on with vc's Verizon CEO Derrick Ali. Derrick, one final thought here for you is, you know, what are we going to see in this city centers of the future? Think maybe 20, 30 years from now? I think it's a little bit easier, maybe to see the five 10 year plan. What are we looking at the 10, 20, 30 year mark from now that we might not be seeing right now? I think one thing you're going to see is they're going to be in areas that are going to surprise a lot of people. If you look around your cities and you see areas that have not had a lot of investment put into it that have maybe been forgotten, it may have been an important part of the city many decades ago. But it's, you know, all the growth has moved to the suburbs or other parts. Those areas are ripe for revitalization. We're doing a project here in Dallas that we're very proud of, called it's the Rydberg mall redevelopment. And it's a perfect example of how public private interests can work together to bring economic redevelopment, sales tax revenue, job growth and fulfill the demand. That's in a community that wants that wants to spend dollars on engaging experiences, but just doesn't have anywhere to do it. And so. So, you know, that's one point I'd make about the city centers of the future. I think we're going to look back and be surprised in cities all across the country that, Oh my god, I thought that area would never get the type of investment it's had. And now it's getting it. I also think that cities themselves are rethinking their role. Texas is a playbook for any other anybody else around the country that wants to see how it's done. Texas is a playbook for public private partnerships, and we're winning in a big way because of that. But there's a lot of city owned land and city responsibility to sort of engage those areas and incentivize private developers and private interests to help them along the way. So Derrick, thank you so much for your time today. We appreciate your insight. It has been incredibly valuable. Thank you for joining the podcast today. Thank you for having me. Have a great day, and thank you guys so much for tuning in again. We've been on today with Verizon CEO from VC Derrick Ali. I've been your host, Ben Thomas. Join us again next time. Thank you.