McMahonFood_1_351What can help stop global warming, feed the hungry, make us healthier, and add value to real estate? A jam-packed session at the recent ULI 2011 Fall Meeting in Los Angeles learned that the answer to this question is locally grown food.

In the United States, we often take food for granted, especially where it is grown and how it is sourced. But as a growing number of developers are learning, food can have a big impact on the success or failure of new development, particularly in these challenging economic times.

“The Food Revolution and Its Impact on Real Estate” showcased three different examples of how food is becoming an increasingly important part of not just our diets, but also our developments. Moderated by California marketing expert Beth Callender, this panel provided food for thought on the role of food as a real estate amenity, a community builder, and a project differentiator.

The panel kicked off with a presentation by Christian Meany, a partner with San Francisco developer Wilson Meany Sullivan. In 1998, Wilson Meany Sullivan was selected by the Port of San Francisco to rehabilitate the Ferry Building, a famous city landmark on the San Francisco waterfront. Developed pursuant to a 66-year ground lease, the Ferry Building represents an outstanding example of urban redevelopment through public/private partnership. The renovation of the 1898 landmark building included rehabilitation of the historic west facade, clock tower, and 660-foot (201-m) Grand Hall. However, it was the creation of a European-style food marketplace on the ground floor which launched a renaissance on the San Francisco waterfront and made the Ferry Building one of San Francisco’s five most visited destinations, attracting more than 1 million visitors a year.

 To draw people to the waterfront, the developers brought an existing farmers market to the site. This, in turn, attracted food vendors to the market hall. The food market now generates $1,250 per square foot ($13,440 per sq m) and has become one of San Francisco’s premier destinations.

The second panelist at the Food Revolution session was Brent Herrington of DMB Associates and president of Kukuiula Development Company. DMB is an Arizona-based diversified real estate company with a history of developing signature commercial properties and resort/recreation and primary home communities throughout the western United States. Herrington’s presentation focused on the role of agriculture in a luxury resort development. Long known for setting aside large tracts of open space in master-planned communities such as DC Ranch and Verrado, both in Arizona, DMB is now developing Kukuiula, a 1,000-acre (405-ha) low-density resort community on the island of Kauai in Hawaii. Like most luxury residential resorts, Kukuiula includes a golf course and a high-end clubhouse and spa, but what is unexpected and unique about the development is its ten-acre (4.05-ha) community farm. The farm, which abuts a 22-acre (8.9-ha) lake, grows bananas, papayas, chard, citrus, herbs, pineapples, arugula, and breadfruit, among other foods.

The farm has a small staff, but many community members choose to get their hands dirty by volunteering at the farm, while others simply sit back and enjoy the farm at table dinners. The range of fruits, flowers, and vegetables grown on the small farm is impressive, but what is even more impressive is the big impact on sales and marketing of this relatively low-cost amenity (roughly $1 million), especially when compared to high-cost amenities like the golf course, clubhouse, and spa (roughly $100 million).

The final presenter was Sibella Kraus, president of Sustainable Agriculture Education (SAGE) in Berkeley, California. In the early 1980s, Kraus was a cook at Berkeley’s famed Chez Panisse Restaurant, but she has since gone from cooking food to helping communities grow food closer to home. SAGE works to develop urban-edge agriculture and to engage diverse populations with the sustainable agriculture movement.

According to Kraus, urban agriculture is not just a way to grow vegetables, but also a way to strengthen communities. She described how more and more cities are developing urban agriculture policies, which often start with a “greenprint.” A corollary to a blueprint, a regional greenprint identifies where a community should invest in natural lands, just as most communities identify where to invest in development.

Because we all eat every day, it makes sense to bring food production closer to home, especially considering the carbon footprint of food transport and distribution. As James Howard Kunstler likes to say, “The era of the 1,500-mile Caesar salad is going to have to come to an end.”

Kraus was particularly enthusiastic about linking farming, natural resource protection, and environmental education together by creating agricultural parks, food belts, and agricultural preservation districts. She described ongoing efforts to create urban-edge food belts around Fresno and other California communities. She also discussed agriculture tourism and urged communities to differentiate themselves by thinking about the “taste of place.”

When we think about what’s next in real estate, it is clear that food and farming will become a more important and profitable part of the equation.