MARKET FOCUS: REAL ESTATE PR - Real estate reinvented - Real estate is a mercurial market in which down-and-out properties can be retooled into economic gold. Steve Stackhouse investigates the role of PR in urban development

It takes a lot to turn around a troubled piece of real estate: political will, developer commitment, creativity and money. It also takes a strong PR effort to build and maintain support and attract investor dollars.

It takes a lot to turn around a troubled piece of real estate: political will, developer commitment, creativity and money. It also takes a strong PR effort to build and maintain support and attract investor dollars.

It takes a lot to turn around a troubled piece of real estate: political will, developer commitment, creativity and money. It also takes a strong PR effort to build and maintain support and attract investor dollars.

New York-based PR firm Rubenstein Associates has an entire practice devoted to real estate, representing residential and commercial developers, owners, brokers and construction companies.

Steve Solomon, EVP at Rubenstein and head of the real-estate practice, says redeveloping troubled properties can be lucrative. A Rubenstein client specializing in this business is New York's SL Green Realty Corporation.

'It acquires buildings, invests in new infrastructure and competes effectively with newer buildings,' Solomon explains.

But before companies like Green can compete, potential tenants and the public have to be convinced that a formerly undesirable property has been turned into a prime address.

'Public relations is a very effective way of telling the story of redevelopment and changing the nature of the building,' Solomon says.

'We use major media, like The New York Times and The Wall Street Journal.

That provides the credibility. We're positioning these companies to be perceived as major players. Usually, the results are very dramatic,' he adds.

Creative presentation

Solomon represented Green in the redevelopment of the vacant, former Bowery Savings Bank on 42nd Street in Manhattan. 'We did a very creative publicity program, showing the history of the building and talking about potential uses of the space, and Cipriani leased the entire property for a restaurant and catering facility.'

For another client, Rubenstein promoted a residential development in lower Manhattan. 'The biggest problem the developer faced was the sense that lower Manhattan is not really a residential neighborhood - that you don't have the residential infrastructure,' Solomon says.

A lot of legwork uncovered sufficient infrastructure - grocery stores and other facilities - to promote via a publicity campaign, which also tangentially pushed the property's excellent views. The project sold out in eight weeks, and more residential development followed nearby. 'Success breeds success,' says Solomon.

Rubenstein saw further success in downtown Brooklyn, where client Muss Development Company created Renaissance Plaza, which includes an office tower and hotel. Solomon says the biggest PR challenge was getting the project noticed by local media.

'Even though downtown Brooklyn is the fourth-largest central business district in the US, in the New York media it's perceived as a weak sister.

We did a very focused PR program on downtown Brooklyn and its growth as a corporate center,' he explains.

PR's job can be harder when an area or property is recognized by the public, but in a bad light.

Turning communities around

In Chicago, the Cabrini-Green housing project has been a magnet for crime and a symbol of how badly public housing can fail. Like many similar projects, Cabrini is on the way out. The city's housing authority is gradually demolishing buildings and moving tenants to subsidized housing elsewhere.

A significant player in the rebirth of the neighborhood around Cabrini is developer Dan McLean. His MCL Companies is not known for low-income housing, but upscale dwellings, including one occupied by the mayor. MCL's problem was the fact that turning a run-down area into a high-rent district can leave a bad taste in many people's mouths.

McLean's Cabrini development is a bold experiment in a new type of urban redevelopment. MCL was allowed to acquire land at prices below market value for the Mohawk North development of condos and single-family homes.

Most were sold at market value, but the Chicago Housing Authority was allowed to move in some carefully chosen Cabrini residents: enough to fill 20% of the development.

Charged with the task of selling this attempt at mixed-income housing to the public was MCL's PR firm, FigelMurphy Public Relations. Partner Bill Figel chose to spread the word from the outside in. He saw an opportunity in a Chicago conference on the National Association of Real Estate Editors and arranged a panel discussion involving developers, city officials and others involved in the redevelopment project. He also invited 100 real estate journalists.

They asked some tough questions, such as: 'How did you determine who the tenants would be?' and 'How was it determined that it was going to be just 20%?'

Figel attributes much of his success to his client's willingness to openly and honestly discuss the project - controversy and all. The result was mostly positive national attention that trickled into Chicago from the outside.

Among the evidence that the project had developed a positive spin was fall 1998 coverage in the Chicago Tribune documenting the early experiences of former Cabrini residents and their much wealthier neighbors in Mohawk North.

The article detailed the friction and discomfort inherent in the mix, but declared it 'an extraordinary opportunity for the former Cabrini families and, so far, a good deal for the homeowners.'

The troubles facing the community of Chelsea, Massachusetts were equally daunting because government corruption became so pervasive that the state had to take over.

'If you said the word 'Chelsea' to nearly anyone in Massachusetts, they would almost laugh, except it was so sad,' recalls Janey Bishoff, principal and cofounder of Bishoff Solomon Communications, which was hired to help mend the damage after the state returned control of the city to a new elected government.

New reputations

'Despite its proximity to Boston, Chelsea had become very impoverished,' Bishoff says. Locals couldn't help but notice how often the media associated Chelsea with criminal activity. 'We don't have statistics, but our theory was that any time a crime was committed in Chelsea, or by someone from Chelsea, the word 'Chelsea' got put in the headline - more than with other communities,' she says.

All this negative attention, she says, was obscuring an emerging turnaround story. So Bishoff Solomon went to work on spotlighting the reborn city's accomplishments.

One of the more dramatic developments was the opening of seven new city schools in one day - fruit of a partnership between the city and Boston University, helped by state and private funding. The PR agency distributed a news release in a red plastic school-supply box filled with a pencil, ruler and other school items.

Other promotional efforts included more traditional contacts with reporters on a variety of topics. Bishoff has a large stack of clippings from The Wall Street Journal, The Boston Globe and the Boston Herald, trumpeting the city's achievements, from its upgraded bond rating and growth as an artists' colony, to its honor as an All-America City. The Wall Street Journal summed up the coverage: 'Chelsea has changed - really.'

But positive press is only part of the success story, because good news can generate more good news. Recently, the newspapers have welcomed the arrival of Chelsea's first new hotel in decades, a dollars 16 million Wyndham Garden that opened January 8.

Now, says Bishoff, the ongoing challenge is to grow Chelsea's reputation as a bedroom community. 'It's a phenomenal location,' she says, 'but five years ago, many people would not have considered it a viable residential option.' Today, however, housing and property values are rising.

As critical as PR is to many redevelopment projects, its cost is a relative drop in the bucket when compared to other components.

More for your money

'PR is one of the great bargains,' says Rubenstein's Solomon, noting that PR can cost dollars 6,000 to dollars 10,000 a month for a major real estate project. But when a project's price tag hits tens of millions of dollars, the PR portion is a pittance. Also, Solomon points out, 'that's a fraction of the cost of an advertising budget.'

The return, on the other hand, can be substantial. If a PR campaign can help a developer generate interest to sell a redevelopment project quickly, the developer profits.

If public relations can ease the way for relocating tenants to better subsidized housing, the developer, residents and community benefit. And if getting the right word out can help a run-down city build a positive public image, it's a boon for schoolchildren, developers, merchants, residents, homeowners - the entire business and social infrastructure. A bargain, indeed.

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