Interview: Philip Auchettl of RAD LAB

In August 2017, I spoke with Architect & Developer Philip Auchettl of RAD LAB in San Diego, CA. See more information about RAD LAB at radlabsd.com. Also, check out a short documentary on their student thesis turned reality, Quartyard, {here}. See more articles about RAD LAB {here}.

Philip Auchettl: Myself, Jason, and David all went to school for architecture together in San Diego. I was an artist before getting into architecture, I was always very interested in getting into development so architecture just made sense.

James Petty: Can you talk about the Quartyard project and how you guys took a student thesis project from the school studio to a reality?

PA: It was pretty crazy. Our thesis was a pretty unique. We started the whole concept with the mindset that we wanted to build something. This was in 2013, still while we were coming out of the recession. We were looking at properties, but we were just a couple of students and we didn’t have any money. So we started looking at empty land parcels, whether it was publically or privately owned. We came to find that people weren’t necessarily ready to develop, but just sitting on them. So that was when the question came to us. “OK, if people were not ready to build on it for 3, 4, 5, even 10 years from now, how can we activate it now and create a community space?” From there, we started looking at publically owned properties. We had this crazy notion that if it was publicly owned and vacant, that it should be used for the public good. That is what we approached the Mayor’s office with while we were still in school. Basically, we started knocking on his door until he started listening to us.

Eventually, we got a meeting with him. He told us, “Yeah, sounds good!” But then we never heard back from him. So we went back. Eventually, we were able to get something going through the city. By the time we graduated, we had identified the property that we and the city felt would make sense. It was a property that they had no plans for the next few years. It was a high impact area that had a lot of visibility. It was also in a designated problem area according to the police department. For us, that was just part of the whole challenge of what we were trying to do by improving the area.

After we graduated, we agreed to give ourselves six months to see if we can get this project funded and built. We were working at design firms on the side and we took some additional loans out. One of our partners was living in a closet eating ramen every day. Not the nice ramen that is trendy now. After we graduated, we didn’t have any office space so we ended up working at school in the back of one of the classrooms for six-months until they eventually kicked us out. In the end, it took us about a year after we had graduated to get it built. There were plenty of up and downs. We had this plan, we had some tenants locked in. The next step was to try and raise money.

To get this project moving we needed about $60,000. That was the cost for the conditional use permit along with a number of other city permits. So, we did a Kickstarter for Quartyard. It was super cool which really started to get the community involved in the project. We managed to raise $60,000 in thirty-days. It was basically pure donation from the surrounding area as they wanted to see an urban park instead of an empty dirt lot.

It was pretty amazing to watch the community take such a stronghold to that, to actually want something in their community, and willing to support that. The project obviously cost more than $60,000. But after the Kickstarter and approval from the City, we were able to get investors involved. They were definitely angel investors as we didn’t have a track record and just a short lease with the city. The concept was that we would do this for a few years until the city is ready to develop this property, acting as a placeholder for future development. All the structures are built out of recycled shipping containers, so when the time comes to move we can pick everything up and reactivate somewhere else. That was when people started to get excited. It also made the community more open to the whole idea of it. Anything that is temporary, people seem willing to give it a go. Compared to a developer who wants to build a brick-and-mortar, people can tend to line up with their pitchforks.

JP: How did you find the initial property? What made you choose that specific property?

PA: We just kept digging, going down to the city and we ended up putting together a map of all the vacant city-owned properties in San Diego.

JP: Did they own the properties out-right?

PA: They owned the property. There is actually a large amount of land that they own and are slowly selling it off. It was pretty interesting as it wasn’t even a parking lot, it was just vacant.

JP: Was the property repossessed with the previous owner?

PA: The City has owned it for a long time, initially with the plan to develop it. After the recession state of California took control of a large number of city-owned properties. In order for the state to release them back to the city, the state put a bunch of regulations on the land of what they can and cannot do with it. The state had already released the property that we ended up taking over. Part of the restriction to the city was that they had to put out a Request for Information (RFP) for a 34-story high rise with a specific amount of affordable units and a specific amount of office space.

JP: What do you think you did that really got buy-in from the city? What got them on board? Was it the dog park? Was there anything specific that resonated with them?

PA: I think we had a pretty good story. We were putting up signs on all of the empty lots asking, “What do you want here?” That was our initial driver. We met with all of the community groups and obtained letters of support from them. The Mayor was on board to begin with and was pretty excited about the whole concept. This was a new type of public-private partnership we were proposing with no risk to the city, but the upside was a community urban park. So really, it was a win-win.

JP: It is an amazing learning opportunity compared to your peers from school. I would assume they were simply working as interns at a local office while you were changing San Diego. You mentioned that this was a Public-Private-Partnership (PPP). Did you get any funding from the city?

PA: No. That would have been nice. We took the project on as a lease. We are leasing the land from the city since they were not making money on it anyways. The profit that the city earns goes towards the affordable housing fund. That was part of the project overall, which was great.

JP: You said that angel investors funded the construction of Quartyard. Did you set up a contract with them that you would give them a percent of return?

PA: We did. We set up contracts with about half a dozen investors. Based on them getting get paid back first and then there is a percentage share there on out. The way we brought in tenants; the coffee shop, the restaurant, the bar, was pretty unique. They actually own their own containers. So they paid for the development cost of those units. The concept being that when we do close this location, they have first right of refusal to move with us to the next location or go somewhere else. That saved us big in initial construction costs.

JP: Do they then lease the space in the park for the container from you?

PA: Correct. We have a management team that manages the tenants and they also book all of the music, events, food trucks, farmers markets, and art shows. They take care of all the fun stuff. The tenants themselves pay us rent which is profit based, based on a percentage of their sales. The idea is that the more profitable they are, the more everyone is which encourages everyone to work together.

JP: Is that how RAD LAB is able to be profitable?

PA: RAD LAB is the architecture firm, and Quartyard was our first project. RAD LAB is a part owner in Quartyard along with our other investors. From there we have grown our architecture firm on a large scale, specializing in container development which we have since implemented all over the country.

JP: You mentioned that you guys had initially taken some loans out. What was that used for?

PA: The three of us took some personal loans to get through the first part of the project. Trying to start a new business, let alone two businesses at once can be costly.

JP: Were you able to pay those back once the project was up and running?

PA: We sure did.

JP: What do you think was the biggest obstacle of Quartyard? Did you ever feel like there was a moment when the project wasn’t going to take off?

PA: There were certainly a couple of times when we thought it wasn’t going to work. The biggest one was when we initially had just one investor and he decided to pull-out. We had to scramble and find new investors, there was a bunch of drama. Then the second scariest moment was when the city decided they wanted to scrap the lease we had been working on and restructure the whole thing. That was going to cost us another $10,000 in fees which we didn’t have. To be honest, I don’t know if it was just ignorance in that we didn’t know any better, but we kept going and pushing forward.

JP: It paid off. It feels like one of the best returns on investments of completing the first project is that it stems new projects. It looks like Quartyard attracted other clients for RAD LAB, like Pocket Park. Do you think Quartyard helped you get off the ground and attract commissioned work?

PA: Absolutely. Quartyard has been a huge flag in the ground for us. Pocket Park was one that we did for pennies as it was on a very small budget but had the opportunity for big impact. We took a small empty lot and activated it using a few hundred recycled pallets as furniture, threw in some trees, and painted giant words on the ground. We were out there ourselves on our hands and knees painting these words. It was ridiculous but we were able to create a big impact.

JP: It was real sweat equity.

PA: It was fun, these types of projects have opened up so many doors. We are doing projects across the country now. We have one that just opened up in Oakland, Bay Meadows, and Monterey. We are doing some cabins up in Tahoe. We are doing a boutique hotel project up in Seattle. We have been busy and growing which has been a good thing.

JP: What was your initial interest in this tactical urbanism and creating nodes of entertainment in cities?

PA: We do it because we think it makes sense. What we do is actually pretty simple, we look at how to best activate an underutilized space.

JP: But no one else is doing it.

PA: It’s funny. I mean we took an empty lot and made Quartyard. When you break it down, we took an eyesore and gave the community something they wanted. You throw in a dog park, cut a few holes in shipping containers, serve beer, good food, and people come! You add in live music, events, and make it a cool space. That is what we focus on. That is what makes sense to us. I think that we are very fortunate that we are not stuck doing bathroom remodels. I fully appreciate how fortunate we are for that. A big part of that is due to Quartyard. It has opened up a lot of doorways.

JP: Do you think that this type of development is something that other people could replicate in other cities?

PA: Absolutely. If someone can see what we have done here and replicate this, it is a huge win for us. We are currently working with a number of developers as a consultant to help facilitate activation of their outdoor space. Whether it is vacant land or outdoor public space of a high rise, you have to activate it. You have to create a place where people want to go to and have a reason to go to.

JP: Do you still engage with local communities and the Mayor’s office about other opportunities?

PA: Yeah, Quartyard’s first location just wrapped up in June this year. After we closed we proved the model, we picked everything up and moved ready to reopen on another vacant site only a block away. It is another unoccupied city-owned lot that has its own challenges, but we are excited to activate it continuing the community sense of place that has become so important to the neighborhood. The city has been very supportive of this. We have a couple of other locations in San Diego that the Mayor’s office is wanting us to get involved in. It’s growing and it is definitely something that can be activated anywhere. This can be a reality in any city and the concept of Quartyard is simply that it is flexible.

JP: It is like having the best parts of Brooklyn all in one place. If you could go back in time and give your younger student-self some advice on the future, what would you tell your younger self?

PA: Just keep going. Patience is a virtue. As long as you keep working hard, it does pay off. I think that is something that always been instilled in me. Just keep going.

For more on Philip Auchettl, see the book Architect & Developer: A Guide to Self-Initiating Projects.

Also, watch a video on Quartyard {here}. See more articles about RAD LAB {here}.