DPZ creates venture capital fund

With funding from an investor, the architecture and town planning firm Duany Plater-Zyberk (DPZ) & Company has created a $5-million venture capital fund to plan and permit new urban communities throughout the US. The Fund for New Urbanism seeks to partner with municipalities that are eager to foster new urban development. The goal is to forge five to 10 such partnerships. The fund’s resources will be used for planning — done by DPZ — permitting, and acquiring purchase options. The fully permitted, planned, and coded sites will be sold, according to Demetri Baches, a DPZ planner. The fund aims to yield returns “at least at the industry average for venture capital of 20 to 30 percent over the course of a five-year period,” says Baches. DPZ hopes to use its reputation as a New Urbanism standard-bearer to partner with municipalities who would like to see this type of development, but have been unsuccessful in getting local developers to make the change, he adds. Municipalities are sought that will identify a site where New Urbanism could or should occur and will cooperate in approvals. The support of publics works officials — or the political will to override these officials — is also key. “If we can’t get the narrow streets [for walkability], we won’t do it,” says DPZ architect Jeff Speck. In addition, DPZ is looking for communities that are growing and have a demand for finished lots. The long-term goal is to gain the confidence of Wall Street, and then get into more ambitious investments — such as being in charge of the actual development of communities. Baches sees a lot of other design firms that are gaining expertise in New Urbanism — which DPZ and a handful of other firms pioneered. Getting more into development is a way to maintain a competitive edge, he says. The private investor is not being disclosed as this point, although it will come out in time, says Baches. The investor is a well-known firm that owns land but has never been engaged in development, he says. DPZ approached the firm about investing in the fund. The fund will be managed by a six-person board of directors, three of which will be from DPZ. The others will be land-use attorneys and real estate professionals, Baches says.