Making Live/Work Work

Beat Kahli, a central Florida TND builder and developer with an investment banking background, has come up with an innovation that might help live/work housing succeed on an important second level. He's offering seed money to fund new businesses and linking it to incentives to buy his townhouses.

At Kahli's $1.3 billion, 1,868-acre Avalon Park, a TND community on the east edge of Orlando, live/work townhouses are a critical component of the project's 2.5 million-square-foot town center. Kahli will build 100 two-story live/work townhouses (ranging from 1,400 to 2,000 square feet) in a European form that places about 600 square feet of retail or commercial space facing the street on the first floor. Residential space is at the rear, where the private entry and garage connect to an alley, and on the second floor. The units sell for $160,000 to $180,000.

Kahli's incentive program links purchase of a townhome to seed money to start a business on the first floor. "We give them $12,500 for the down payment on a townhouse, and then we offer to invest another $12,500 to start the business," he explains. "We wrap that into a second mortgage and negotiate a payment plan that fits the buyer's business plan."

Kahli is evaluating 39 business plans that made it past his first cut. "If somebody wants to create a business requiring 20 employees, that won't work in a townhouse," he says. "We know what kind of businesses we want. TND takes a lot more than real estate knowledge. It's town building. We have to create jobs. I know how to make the town center successful. We are structuring public/private partnerships. We’ve already created 500 jobs in Avalon over the past 18 months."