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Thursday, Feb 29, 2024

CONSULTING—The Latest Development

A veteran team of real estate, public affairs and policy experts has launched a consulting firm that will house real estate development and law, urban planning and public affairs under one roof a combination of services not typically found in the industry, but one that many say is becoming increasingly critical to developers. DGLM Consulting Group, based in Glendale, includes Dan Garcia, an attorney and well-known former Warner Bros. executive who headed the studio’s highly controversial master plan expansion efforts in Burbank; Lucy McCoy, a high-profile public affairs consultant who most recently led the effort to bring the 2000 Democratic Convention to Los Angeles; and Mee H. Lee, who shepherded Douglas, Emmett & Co.’s Sherman Oaks Galleria makeover from its inception through to construction. Garcia and McCoy formed the company in April; Lee joins next month. The company name is expected to change at that time. In addition to the Douglas Emmett projects, which Lee will bring with her, DGLM will also oversee the development of the 21-acre Sports Academy for at-risk youth at Hansen Dam Recreation Center, a project that will involve everything from obtaining permits and entitlements to financing, construction and community relations. Most real estate consultants typically specialize in one or two of those areas, like law or zoning, but DGLM executives say they expect their diverse expertise to attract clients. “I think it’s fair to say the business and regulatory environment in Southern California is very complicated, and there are very few firms that are broadly experienced in terms of getting a project to completion,” said Garcia, who has also served on the Los Angeles Airport, Police and Planning commissions. In addition to the details of the real estate transaction and construction, developers have increasingly become involved in urban planning and policy issues, such as living wage ordinances; government funding partnerships, such as bond financing; and community affairs, to such a degree that many believe the lines between these areas have blurred altogether. “I think the process of trying to marry the needs of the community with the marketing of a project and the successful financing and development and approval process is getting so close together now, I’m not sure there’s a true separation anymore,” said Hayden Eaves, a real estate development veteran who is managing director of Investment Development Services Inc. As land becomes more scarce and developers encroach on existing communities to build projects, they are facing a growing number of special interests that need be addressed and, often, placated. “Our business has totally changed,” said Frank Gangi, president of Gangi Development, which recently completed a mixed-use project in Burbank. “It used to be that if you owned a piece of property with certain zoning, you could just go out and produce the product. Now it’s very important to get the community involvement. The better you are at handling the community, the more chances you’ll have at a successful project.” These days, a developer can spend half his or her time working with community and government groups with interests in the project, leaving less time to obtain financing, handle the administrative work and oversee the construction of the project. Future projects are likely to attract even more community scrutiny, requiring more time still. “Now we have neighborhood councils,” said McCoy, who has also served as a political campaign consultant. “You can’t expect that, because you’re a major corporation, that (communities) will be receptive.” Not only have communities become more outspoken in their opposition to large urban infill projects, these projects increasingly involve city and county redevelopment agencies that may have entirely different, even opposing, interests. While residents resist the increased congestion a new development often brings, cities often seek out new businesses and residents to build their tax bases. Even if they have the time, individual developers differ widely in their ability to effectively forge community and government relationships. “I think there are a handful of developers out there that are very good in that public relations, political schmoozing (role), but they are definitely the exception rather than the rule,” said Paul Novak, president of Novak + Associates, a Glendale zoning and land use consultant. “And as the process becomes more public, more community oriented, you need people to do that. Otherwise, you rely on consultants to do it for you.” During the highly controversial Warner Bros. expansion, for example, executives met with some 1,000 community representatives in Burbank, said Lee, who worked with Garcia on the project. “When we go to dinners now in Burbank for a retired council member or other official, I can walk into a room of 300 people and I can tell you who they are and how many kids they have,” said Lee. “That’s how intimate we got.” The academy project, a partnership between the Los Angeles Dodgers; Major League Baseball; a variety of city, state and federal governments; private enterprise; and a local community of residents that have already voiced some opposition to the project, is an example of the complex array of relationships developers must build. The academy, which will help prepare kids for careers as pro baseball players, sportswriters, coaches, trainers, managers and other related professions, needs to find about $10 million in financing from public and private sources in addition to the $3 million Major League Baseball already has pledged. And it will require organizers to navigate a maze of entitlement and permitting issues, not the least of which are the different entities that lay claim to the land the Army Corps of Engineers, which owns most of it; Southern California Edison, which owns a piece of it; and Caltrans, which holds easements on it before they even get down to construction. While the academy may be an extreme example, even private sector real estate deals are increasingly coming into contact with a wider variety of public entities, from redevelopment agencies to public bond financing, all requiring outreach efforts. “I think more and more developers are turning to consultants to assist them,” said Daniel F. Selleck, president of Selleck Development Group Inc., which built The Plant in Panorama City. “I think they can assist, and that’s the key word. The developer has to stay involved and be at these meetings, but certainly (consultants) can help organize these meetings, and they have key contacts in different cities that can be very helpful.”

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