Transit-Oriented Development Tips for Developers and Governments by NANCY B
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GUEST COLUMN Transit-Oriented Development Tips monthly for Developers and Governments BY NANCY B. LASH AND RYAN D. BAILINE As transit-oriented developments move increased revenue, provide affordable housing, developers on such developments include from planning to construction in South create commercial enterprises and/or renovate Gables Station, Coconut Grove Station, Florida, residents and surrounding businesses transit stations—is key to structuring the deal. Douglas Station, Brickell City Centre and can expect multiple benefits. Benefits also Many such developments are underpinned the MiamiCentral station. Combined, South accrue to the local governmental authorities by a ground lease to provide a continuous Florida will have new and growing urban that sponsor and approve such communities— source of revenue over a long period of neighborhoods connected to transit, parks and the developers that build them—if they time to the local government rather than a and entertainment, with accessibility from approach the projects with an eye toward single upfront payment. Local governmental downtown Miami, Brickell Avenue, U.S. maximizing their respective goals and authorities have developed an understanding Highway 1, Douglas Road, the Metrorail, opportunities. of the complexities presented by larger mixed- Miami-Dade bus lines, and the Coral Gables This is a fast-growing community use projects and allow for flexibility in the Trolley. development trend that includes a mix of hotel, transaction while preserving public benefits. Achieving this type of synergy that benefits retail, residential, office and/or entertainment Developers have a long list of considerations residents and businesses alike requires uses centered around or located near a transit when evaluating involvement, including the decisions to be made simultaneously by local or bus station, or similar mass transit corridors. time and cost of the initial request-for-proposal governments, transit authorities and real-estate Many local governmental authorities, process relative to nonpublic projects. In developers. Financing can be complicated and including counties and cities—often through ground-lease developments, the economics the logistics are highly complex. Nevertheless, their respective boards, departments and of the lease—minimum rent, percentage both developers and our local governments agencies—have embraced the concept and rent, transfer fees and increases to same over are more willing than ever to undertake such recognize that dense, walkable, mixed-use the term of the lease—obviously are critical projects. And many have become quite adept developments near transit stations alleviate factors to both parties. Considerations of how at balancing the interests of all parties— traffic and promote vibrant, connected the development will be developed—by one recognizing that participation might not communities. or more developers and in one or multiple only achieve or exceed their goals, but also To achieve these benefits, local and regional phases—is equally as important as flexibility transform communities they serve. ♦ governments facilitate these developments in timing for development and transfers will via ground leases and innovative land- be paramount. Greenberg Traurig shareholder Nancy use planning, which is often coupled with Understanding how the project will B. Lash is cochair of the firm’s Miami real- publicly focused incentives. For example, it be financed, such as through a traditional estate practice. She represents clients both is not uncommon for lands surrounding transit mortgage, mezzanine financing, equity or in Florida and nationwide in broad aspects stations to be “upzoned” to increase density likely a combination, serves as another key of commercial real-estate transactions. for a development while also requiring a level consideration and often informs the terms of Her experience includes the negotiation, of affordable or workforce housing and local the lease. These developments often require documentation and closing of the sale, business incentives. This encourages seasoned developers to make substantial improvements purchase, financing and development of south florida legal guide legal south florida real-estate developers to invest significant to nearby stations and public infrastructure, property, with a specialty in public-private time and resources in infill area projects while which factor into the economics of the overall long-term ground leases. Greenberg Traurig simultaneously providing substantial public deal. Developers and local governments must shareholder Ryan Bailine focuses his practice benefits. consider all of these factors when negotiating on the development and financing of complex Local governments interested in the transaction to analyze and predict the real-estate projects, including real estate, encouraging such projects have various issues short-term and long-term viability of each land use and regulatory aspects. He advises to consider for success of the project from the project. on residential, commercial, industrial and public agency perspective. Identifying the Impressive examples of how local mixed-use projects, including transit-oriented primary goal or goals—whether to generate governments are working with real estate developments..