- The Washington Times - Monday, March 13, 2000

Building new housing in existing neighborhoods, better known as "in-fill" development, can invite clashing architecture, traffic congestion and anger among neighbors.

In this niche that discourages many developers, Arlington-based Eakin/Youngentob Associates Inc. has carved out a healthy business. Founded in 1992, the firm has grown to 100 employees and $110 million in revenues last year. It has won 70 awards, many for its designs done with Lessard Architectural Group. In January, Builder magazine named it one of America's best builders.

It only makes economic as well as social sense to build in developed areas, said founders Leroy "Terry" Eakin, chairman and chief executive officer, and Robert D. Youngentob, president. They call their projects "smart growth," but said it was an unmet need that drew them into their current business.

That need is the desire for an urban lifestyle, to be close to the city's amenities and out of the traffic, they said. It's a desire that endures through roller coaster home-buying markets. Despite the economic security, the business is trickier, requiring great quality and creativity, and working closely with neighbors, they said.

Question: Why is the residential market so strong right now?

Mr. Eakin: It's strong in our in-fill locations because of increasing traffic, density and, more importantly perhaps, the desire of empty nesters and urban buyers to have an urban lifestyle.

Mr. Youngentob: There's micro and macro reasons. The economy is strong, job growth is strong, that's obviously forcing tremendous demand on the housing market. Our market is driven by lifestyle choices as much as it is job growth. Whether it's young professionals getting their first jobs, or empty nesters who don't need a big yard, who want to get closer in, that's driving the movement in closer. Clearly the traffic problems are driving people to want to shorten their commutes. They want urban amenities like not having to spend time in their cars, more access to restaurants, and less time taking care of a big house and a big yard.

Q: How many projects are you working on now?

Mr. Youngentob: Right now we're active on four jobs and we have four, five in various stages of approvals, which is typical. We deliver 200 to 300 units per year.

Q: What's the range of your projects?

Mr. Youngentob: What price point? Our prices range from $200,000 on up to over $1 million, depending on location, unit size, the design that is appropriate. We don't have any fixed products. We go into a location and really design a product and site plan that best fits in with the existing area and who would be attracted to that area.

Q: How do you fit a project into a particular location, especially an in-fill site? There can be a lot of complications.

Mr. Youngentob: Every single one is totally unique. That's where we add a lot of value. We look at each site as a blank slate, not having any cookie-cutter products. We look at the critical utilities, the dimensions, the structural restraints, the zoning, the community. We work very closely with the community. We try to find architectural styles that blend in. We don't gate any of our communities. Everything wants to be open and part of the neighborhood, and we start from scratch on every one. In one particular case, we created a unit that was 17 feet 6 inches wide because that's what fit the critical dimension of a given block length from one street to the next. Rather than say it had to be a 16 foot or an 18 foot, we created what was going to work.

Mr. Eakin: We created town houses that fit into the Old Town Alexandria fabric. We like to think that years from today they will blend in.

Q: Do you have a favorite architect?

Mr. Youngentob: We primarily work with Chris Lessard Architectural Group.

Q: How did you get started in this niche of urban in-fill development?

Mr. Youngentob: In 1990, 1989 when we both worked for the Holladay Corp., we worked on Highgate Terrace. It was an in-fill project with nine town houses, even in the heat of the recession.

Mr. Eakin: Some called it depression.

Mr. Youngentob: The project continued to sell, meeting this lifestyle demand that was less influenced by economic conditions than the timing in someone's life. We also saw there were few builders tackling this market. Because the demands of every site were unique, most of the bigger builders, it didn't fit with their corporate philosophies. This was an opportunity to bring significant capital to the table and do development.

Mr. Eakin: We saw the strong move back into the cities. This market niche had a good combination of risk-reward and

Mr. Youngentob: downside protection.

Q: When did you start the company?

Mr. Youngentob: [In] 1992, when we broke away from Holladay.

Mr. Eakin: It was a pretty tough time in the economy. We were able to get our first project financed.

Q: What do you find are the most difficult obstacles to work around in an in-fill location?

Mr. Eakin: Certainly it's hard at the beginning to find properties.

Mr. Youngentob: Identifying sites is a major challenge.

Mr. Eakin: In the reuse of existing properties, there are always issues. Some are zoning; some are environmental.

Mr. Youngentob: Many of them aren't obvious. You have to turn over the rocks, try to find things that have been passed over for technical reasons or just people didn't see it as a residential site.

So it's really a variety of things.

Mr. Youngentob: The approval process is clearly becoming more intensive because you're in close. The scrutiny is far greater than if you were out in a cornfield with nobody around you.

Mr. Eakin: Existing neighbors have a lot of input.

Mr. Youngentob: We recognize this is part of the process. We don't come in with preconceived notions. We balance that off [with] what we need to do.

Mr. Eakin: We like to think of our projects as smart growth, helping to solve some of the transportation problems of our region. But we do believe that obtaining approvals will be a greater problem in the future, as there appears to be greater concern about the lack of adequate transportation network here. There's a lot of deferred spending on what we need for roads here in the Washington metropolitan area.

Mr. Youngentob: Roads aren't always the solution. It's getting creative with other types of transportation. In the site that we just got approved out in Rockville, Fallsgrove on the Thomas Farm property

Mr. Eakin: The Rockville City Council approved development of 256 acres on Shady Grove Road west of [Interstate] 270.

Mr. Youngentob: We came up with a privately funded live-where-you-work program where we as private developers provide incentives to homeowners who will work within a short distance of where they live.

Q: This is part of [Maryland Gov. Parris N.] Glendening's Smart Growth program?

Mr. Youngentob: Exactly, but they're doing it on a state basis. There's nothing like this in Montgomery County. Most programs are done through the employer, not through the residential builder.

Q: You work with other developers from time to time?

Mr. Youngentob: I think one of the things you'll see is a greater emphasis on mixed use, where in-fill development will be combinations of office, residential and retail. Each of these specialties requires different skills.

Q: Would it be possible to do the work you do if you were going for a different price point, if you were doing moderate housing?

Mr. Youngentob: With in-fill properties you're competing with other users who may want to do retail or commercial, so having to create value in the land, enough value to justify residential use, is one of the first challenges you find. So I think it is difficult unless the ground is so limited through zoning or ownership constraints. I think most moderate income projects are done with government support.

Mr. Eakin: We're currently selling the units directly behind you at Monument Place. They're in the million-dollar range. They're in many ways similar to units at Harrison Square in the $200,000 range. As an organization, we have the ability to cover a fairly wide swath. We do spend more money than many of our competitors for what we like to think is additional quality. To the extent that we had to get down to a lower price level, we would be forced to lose some of that initial advantage.

Q: How much is design a part of the projects you do?

Mr. Eakin: They're all tied together in one package excellent designs in excellent locations. It's hard to break one piece out.

Mr. Youngentob: We're dealing with the density of the site, keeping it pedestrian-friendly, dealing with the auto in a nonobtrusive way. I think that's one of our greatest skills. We're taking town house projects up to much higher densities than what was historically done. From densities that became acceptable in the '70s and '80s, of eight to 10 units an acre, we're going back to the urban densities that were done 100 years ago of 25 to 30 to the acre. It's how you treat the streetscape that makes the densities work, like Beacon Hill in Boston and places like it. Then there's the interior design. We tend to be [as] open as possible inside. Higher ceilings. Those kinds of things have made a big difference.

Q: You said identifying sites is sometimes a difficult process. Are there any shortages?

Mr. Eakin: Frankly we have more sites available to us than ever before. We always worry about sites, there seem to be a number of quality properties coming on the market.

Mr. Youngentob: The key is trying to find the ones that aren't so simple and aren't as obvious.

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