TRANSIT COOPERATIVE RESEARCH TCRP PROGRAM REPORT 102

Transit-Oriented Sponsored by Development in the the Federal United States: Transit Administration Experiences, Challenges, and Prospects TCRP OVERSIGHT AND PROJECT TRANSPORTATION RESEARCH BOARD EXECUTIVE COMMITTEE 2004 (Membership as of January 2004) SELECTION COMMITTEE (as of January 2004) OFFICERS

CHAIR Chair: Michael S. Townes, President and CEO, Hampton Roads Transit, Hampton, VA J. BARRY BARKER Vice Chair: Joseph H. Boardman, Commissioner, New York State DOT Transit Authority of River City Executive Director: Robert E. Skinner, Jr., Transportation Research Board

MEMBERS MEMBERS KAREN ANTION MICHAEL W. BEHRENS, Executive Director, Texas DOT Karen Antion Consulting SARAH C. CAMPBELL, President, TransManagement, Inc., Washington, DC GORDON AOYAGI Montgomery County Government E. DEAN CARLSON, Director, Carlson Associates, Topeka, KS RONALD L. BARNES JOHN L. CRAIG, Director, Nebraska Department of Roads Central Ohio Transit Authority DOUGLAS G. DUNCAN, President and CEO, FedEx Freight, Memphis, TN LINDA J. BOHLINGER GENEVIEVE GIULIANO, Director, Metrans Transportation Center and Professor, School of Policy, HNTB Corp. Planning, and Development, USC, Los Angeles ANDREW BONDS, JR. BERNARD S. GROSECLOSE, JR., President and CEO, South Carolina State Ports Authority Parsons Transportation Group, Inc. SUSAN HANSON, Landry University Prof. of Geography, Graduate School of Geography, Clark University JENNIFER L. DORN JAMES R. HERTWIG, President, Landstar Logistics, Inc., Jacksonville, FL FTA HENRY L. HUNGERBEELER, Director, Missouri DOT NATHANIEL P. FORD, SR. ADIB K. KANAFANI, Cahill Professor of Civil Engineering, University of California, Berkeley Metropolitan Atlanta RTA RONALD F. KIRBY, Director of Transportation Planning, Metropolitan Washington Council of Governments CONSTANCE GARBER HERBERT S. LEVINSON, Principal, Herbert S. Levinson Transportation Consultant, New Haven, CT York County Community Action Corp. SUE MCNEIL, Director, Urban Transportation Center and Professor, College of Urban Planning and Public FRED M. GILLIAM Affairs, University of Illinois, Chicago Capital Metropolitan Transportation Authority MICHAEL D. MEYER, Professor, School of Civil and Environmental Engineering, Georgia Institute KIM R. GREEN of Technology GFI GENFARE SHARON GREENE KAM MOVASSAGHI, Secretary of Transportation, Louisiana Department of Transportation and Development Sharon Greene & Associates CAROL A. MURRAY, Commissioner, New Hampshire DOT JILL A. HOUGH JOHN E. NJORD, Executive Director, Utah DOT North Dakota State University DAVID PLAVIN, President, Airports Council International, Washington, DC ROBERT H. IRWIN JOHN REBENSDORF, Vice Pres., Network and Service Planning, Union Pacific Railroad Co., Omaha, NE British Columbia Transit PHILIP A. SHUCET, Commissioner, Virginia DOT CELIA G. KUPERSMITH C. MICHAEL WALTON, Ernest H. Cockrell Centennial Chair in Engineering, University of Texas, Austin Golden Gate Bridge, Highway and LINDA S. WATSON, General Manager, Corpus Christi Regional Transportation Authority, Corpus Christi, TX Transportation District PAUL J. LARROUSSE EX OFFICIO MEMBERS National Transit Institute MARION C. BLAKEY, Federal Aviation Administrator, U.S.DOT DAVID A. LEE Connecticut Transit SAMUEL G. BONASSO, Acting Administrator, Research and Special Programs Administration, U.S.DOT CLARENCE W. MARSELLA REBECCA M. BREWSTER, President and COO, American Transportation Research Institute, Smyrna, GA Denver Regional Transportation District GEORGE BUGLIARELLO, Chancellor, Polytechnic University and Foreign Secretary, National Academy FAYE L. M. MOORE of Engineering Southeastern Pennsylvania Transportation THOMAS H. COLLINS (Adm., U.S. Coast Guard), Commandant, U.S. Coast Guard Authority JENNIFER L. DORN, Federal Transit Administrator, U.S.DOT STEPHANIE L. PINSON ROBERT B. FLOWERS (Lt. Gen., U.S. Army), Chief of Engineers and Commander, U.S. Army Corps of Gilbert Tweed Associates, Inc. Engineers ROBERT H. PRINCE, JR. EDWARD R. HAMBERGER, President and CEO, Association of American Railroads DMJM+HARRIS JOHN C. HORSLEY, Exec. Dir., American Association of State Highway and Transportation Officials JEFFREY M. ROSENBERG RICK KOWALEWSKI, Deputy Director, Bureau of Transportation Statistics, U.S.DOT Amalgamated Transit Union WILLIAM W. MILLAR, President, American Public Transportation Association PAUL P. SKOUTELAS MARY E. PETERS, Federal Highway Administrator, U.S.DOT Port Authority of Allegheny County SUZANNE RUDZINSKI, Director, Transportation and Regional Programs, U.S. EPA LINDA S. WATSON JEFFREY W. RUNGE, National Highway Traffic Safety Administrator, U.S.DOT Corpus Christi RTA ALLAN RUTTER, Federal Railroad Administrator, U.S.DOT EX OFFICIO MEMBERS ANNETTE M. SANDBERG, Federal Motor Carrier Safety Administrator, U.S.DOT WILLIAM W. MILLAR WILLIAM G. SCHUBERT, Maritime Administrator, U.S.DOT APTA ROBERT A. VENEZIA, Program Manager of Public Health Applications, National Aeronautics and Space MARY E. PETERS Administration FHWA JOHN C. HORSLEY TRANSIT COOPERATIVE RESEARCH PROGRAM AASHTO Transportation Research Board Executive Committee Subcommittee for TCRP ROBERT E. SKINNER, JR. TRB MICHAEL S. TOWNES, Hampton Roads Transit, Hampton, VA (Chair) JOSEPH H. BOARDMAN, New York State DOT TDC EXECUTIVE DIRECTOR JENNIFER L. DORN, Federal Transit Administration, U.S.DOT LOUIS F. SANDERS GENEVIEVE GIULIANO, University of Southern California, Los Angeles APTA WILLIAM W. MILLAR, American Public Transportation Association SECRETARY ROBERT E. SKINNER, JR., Transportation Research Board ROBERT J. REILLY C. MICHAEL WALTON, University of Texas, Austin TRB LINDA S. WATSON, Corpus Christi Regional Transportation Authority, Corpus Christi, TX TRANSIT COOPERATIVE RESEARCH PROGRAM

TCRP REPORT 102

Transit-Oriented Development in the United States: Experiences, Challenges, and Prospects

ROBERT CERVERO STEVEN MURPHY CHRISTOPHER FERRELL NATASHA GOGUTS YU-HSIN TSAI Institute of Urban and Regional Development University of California at Berkeley Berkeley, CA

G. B. ARRINGTON JOHN BOROSKI Parsons Brinckerhoff Quade & Douglas, Inc. Portland, OR

JANET SMITH-HEIMER RON GOLEM PAUL PENINGER ERIC NAKAJIMA ENER CHUI Bay Area Economics Berkeley, CA

ROBERT DUNPHY MEL MYERS SHANNON MCKAY NICOLE WITENSTEIN Urban Land Institute Washington, DC

SUBJECT AREAS Planning and Administration • Public Transit

Research Sponsored by the Federal Transit Administration in Cooperation with the Transit Development Corporation

TRANSPORTATION RESEARCH BOARD

WASHINGTON, D.C. 2004 www.TRB.org TRANSIT COOPERATIVE RESEARCH PROGRAM TCRP REPORT 102

The nation’s growth and the need to meet mobility, Project H-27 FY 2001 environmental, and energy objectives place demands on public ISSN 1073-4872 transit systems. Current systems, some of which are old and in need ISBN 0-309-08795-3 of upgrading, must expand service area, increase service frequency, Library of Congress Control Number 2004107489 and improve efficiency to serve these demands. Research is necessary to solve operating problems, to adapt appropriate new © 2004 Transportation Research Board technologies from other industries, and to introduce innovations into Price $45.00 the transit industry. The Transit Cooperative Research Program (TCRP) serves as one of the principal means by which the transit industry can develop innovative near-term solutions to meet demands placed on it. The need for TCRP was originally identified in TRB Special Report 213—Research for Public Transit: New Directions, published in 1987 and based on a study sponsored by the Urban Mass Transportation Administration—now the Federal Transit Admin- istration (FTA). A report by the American Public Transportation NOTICE Association (APTA), Transportation 2000, also recognized the need The project that is the subject of this report was a part of the Transit Cooperative for local, problem-solving research. TCRP, modeled after the Research Program conducted by the Transportation Research Board with the longstanding and successful National Cooperative Highway approval of the Governing Board of the National Research Council. Such Research Program, undertakes research and other technical activities approval reflects the Governing Board’s judgment that the project concerned is in response to the needs of transit service providers. The scope of appropriate with respect to both the purposes and resources of the National TCRP includes a variety of transit research fields including plan- Research Council. ning, service configuration, equipment, facilities, operations, human The members of the technical advisory panel selected to monitor this project and resources, maintenance, policy, and administrative practices. to review this report were chosen for recognized scholarly competence and with TCRP was established under FTA sponsorship in July 1992. due consideration for the balance of disciplines appropriate to the project. The Proposed by the U.S. Department of Transportation, TCRP was opinions and conclusions expressed or implied are those of the research agency authorized as part of the Intermodal Surface Transportation that performed the research, and while they have been accepted as appropriate Efficiency Act of 1991 (ISTEA). On May 13, 1992, a memorandum by the technical panel, they are not necessarily those of the Transportation agreement outlining TCRP operating procedures was executed by Research Board, the National Research Council, the Transit Development the three cooperating organizations: FTA, The National Academies, Corporation, or the Federal Transit Administration of the U.S. Department of acting through the Transportation Research Board (TRB); and Transportation. the Transit Development Corporation, Inc. (TDC), a nonprofit Each report is reviewed and accepted for publication by the technical panel educational and research organization established by APTA. according to procedures established and monitored by the Transportation TDC is responsible for forming the independent governing board, Research Board Executive Committee and the Governing Board of the National designated as the TCRP Oversight and Project Selection (TOPS) Research Council. Committee. Research problem statements for TCRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the TOPS Committee to formulate the research program by identifying the highest priority projects. As part of the evaluation, the TOPS Committee defines funding levels and expected products. Special Notice Once selected, each project is assigned to an expert panel, appointed by the Transportation Research Board. The panels prepare The Transportation Research Board of The National Academies, the National project statements (requests for proposals), select contractors, and Research Council, the Transit Development Corporation, and the Federal Transit provide technical guidance and counsel throughout the life of the Administration (sponsor of the Transit Cooperative Research Program) do not project. The process for developing research problem statements and endorse products or manufacturers. Trade or manufacturers’ names appear herein selecting research agencies has been used by TRB in managing solely because they are considered essential to the clarity and completeness of the project reporting. cooperative research programs since 1962. As in other TRB activ- ities, TCRP project panels serve voluntarily without compensation. Because research cannot have the desired impact if products fail Published reports of the to reach the intended audience, special emphasis is placed on disseminating TCRP results to the intended end users of the TRANSIT COOPERATIVE RESEARCH PROGRAM research: transit agencies, service providers, and suppliers. TRB are available from: provides a series of research reports, syntheses of transit practice, and other supporting material developed by TCRP research. APTA Transportation Research Board will arrange for workshops, training aids, field visits, and other Business Office 500 Fifth Street, NW activities to ensure that results are implemented by urban and rural Washington, DC 20001 transit industry practitioners. The TCRP provides a forum where transit agencies can and can be ordered through the Internet at cooperatively address common operational problems. The TCRP http://www.national-academies.org/trb/bookstore results support and complement other ongoing transit research and training programs. Printed in the United States of America The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished schol- ars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and techni- cal matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Acad- emy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. William A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Acad- emy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both the Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is a division of the National Research Council, which serves the National Academy of Sciences and the National Academy of Engineering. The Board’s mission is to promote innovation and progress in transportation through research. In an objective and interdisciplinary setting, the Board facilitates the sharing of information on transportation practice and policy by researchers and practitioners; stimulates research and offers research management services that promote technical excellence; provides expert advice on transportation policy and programs; and disseminates research results broadly and encourages their implementation. The Board’s varied activities annually engage more than 5,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. www.TRB.org

www.national-academies.org COOPERATIVE RESEARCH PROGRAMS STAFF FOR TCRP REPORT 102

ROBERT J. REILLY, Director, Cooperative Research Programs CHRISTOPHER W. JENKS, TCRP Manager GWEN CHISHOLM, Senior Program Officer EILEEN P. DELANEY, Managing Editor ELLEN M. CHAFEE, Assistant Editor BETH HATCH, Assistant Editor

PROJECT PANEL H-27 Field of Policy and Planning

RICHARD G. BICKEL, JR., Delaware Valley Regional Planning Commission, Philadelphia, PA (Chair) EDWARD A. BEIMBORN, University of Wisconsin—Milwaukee Center for Urban Transportation Studies TODD HEMINGSON, VIA Metropolitan Transit, San Antonio, TX WILLIAM JONES, CityLink Investment Corporation, San Diego, CA JACK KANAREK, New Jersey Transit Authority JACK LIMBER, San Diego Metropolitan Transit ANASTASIA LOUKAITOUS-SIDERIS, University of California—Los Angeles JEFF ORDWAY, San Francisco Bay Area Rapid Transit DOUG GERLEMAN, FTA Liaison Representative PAUL MARX, FTA Liaison Representative EFFIE STALLSMITH, FTA Liaison Representative RICHARD WEAVER, APTA Liaison Representative PETER SHAW, TRB Liaison Representative

AUTHOR ACKNOWLEDGMENTS Many individuals and organizations—too many to list individu- rell and Yu-Hsin Tsai were co-authors of Chapter 19 and con- ally—contributed to this study. In particular, those taking the time to tributed to Chapter 4; and Natasha Goguts co-authored Chapters 11 complete surveys, sit through interviews, and support the case-study and 18 and contributed to Chapter 8. Chris Amado of Berkeley’s work provided insights and information that were invaluable to the Institute of Urban and Regional Development helped with prepar- completion of this work. The TCRP H-27 panel also provided ongo- ing the manuscript. ing guidance and direction that was pivotal to conducting the research. G. B. Arrington and John Boroski of Parsons, Brinckerhoff, Robert Cervero, Professor of City and Regional Planning at the Quade & Douglas, Inc., were the principal authors of case studies University of California at Berkeley, was the Principal Investigator in Chapters 14, 15, and 17. From Bay Area Economics, Janet Smith- of the project, designing and directing all phases of the research. He Heimer, Ron Golem, Paul Peninger, Eric Nakajima, and Ener Chui wrote the Summary; Chapters 1 through 9; Chapters 11, 20, and 21; were the principal authors of Chapter 13 and contributed to Chap- co-authored Chapters 12, 18, and 19; and edited and contributed to ters 5, 10, and 12. From the Urban Land Institute, Robert Dunphy all other chapters. Graduate research assistants from the University co-authored Chapter 12 and contributed to Chapter 10, Mel Myers of California at Berkeley contributed as follows: Steven Murphy and Shannon McKay contributed to Chapter 10, and Nicole Witen- authored Chapter 16 and contributed to Chapter 5; Christopher Fer- stein contributed to Chapter 12. FOREWORD TCRP Report 102: Transit-Oriented Development in the United States: Experi- ences, Challenges, and Prospects provides a comprehensive assessment of the state of By Gwen Chisholm the practice and the benefits of transit-oriented development (TOD) and joint develop- Staff Officer ment throughout the United States. This report will be helpful to transit agencies, Transportation Research the development community, and local decision makers considering TOD. Board

Focusing development around transit facilities has become a significant way to improve accessibility, support community and regional goals of enhancing the quality of life, and support the financial success of transit investment. The experiences of a new generation of transit systems highlight the powerful role that transit investments play in channeling urban development. Benefits attributable to transit-oriented development (TOD) initiatives include improved air quality, preservation of open space, pedestrian- friendly environments, increased ridership and revenue, reduction of urban sprawl, and reorientation of urban development patterns around both rail and bus transit facilities. Today, many transit systems and communities across the country are participating in TOD programs. TOD participants range from small local and intercity bus systems with community-related services to large local and intercity rail systems with numerous projects. Increasingly, transit agencies are looking at programs and analyzing real-estate competitiveness to solicit developer interest. This report defines TOD and joint devel- opment and offers insight into the various aspects of implementing TOD, including political and institutional factors; planning and land-use strategies, benefits, and impacts; fiscal considerations and partnerships; and design challenges and considerations. Robert Cervero, of the Institute of Urban and Regional Development at the Uni- versity of California at Berkeley, was the report’s principal author. To achieve the proj- ect’s objective of summarizing the state of the practice of TOD, the research team per- formed a literature review, conducted a comprehensive survey, performed interviews, and conducted 10 case studies. The 10 case studies (Boston, New Jersey, the Washing- ton [D.C.] Metropolitan Area, Miami, Chicago, Dallas, Colorado, Portland, the San Francisco Bay Area, and Southern California) covered a range of TOD designs and practices. The report focuses on TOD and joint development and practice; the level of col- laboration between various partners (e.g., the development community, financial part- ners, planning and land-use agencies, and government entities); the impacts of TOD and joint development on land values; the potential benefits of TOD; and successful design principles and characteristics. A companion publication to this report, TCRP Research Results Digest 52: Transit- Oriented Development and Joint Development in the United States: A Literature Review, reviews pertinent literature and research findings related to TOD and joint development. It contains a bibliography annotated by subject area. CONTENTS S-1 SUMMARY 1 PART 1: TRANSIT-ORIENTED DEVELOPMENT IN THE UNITED STATES TODAY 3 CHAPTER 1 Transit-Oriented Development: An Overview Introduction, 3 Study Approach, 4 What Is TOD?, 5 Joint Development: What Is It?, 8 Goals and Objectives, 9 Summary, 11 Notes, 11 13 CHAPTER 2 The Breadth and Scope of U.S. TOD and Joint Development TOD Activities, 13 Joint Development Projects, 18 Summary, 35 Notes, 35 37 PART 2: THE POLICY ENVIRONMENT 39 CHAPTER 3 The TOD Institutional Landscape in the United States Institutional Setting, 39 Transit-Agency Organizational Context, 39 Other Organizational and Legislative Contexts, 43 Cooperation and Collaboration, 51 Regulatory Environment, 54 Summary, 58 Notes, 59 61 CHAPTER 4 TOD Implementation Tools Getting the Job Done, 61 TOD Visioning and Planning, 61 TOD Zoning, 63 Implementation Tools and Ratings, 71 Help from Above, 75 Funding TOD: Public Perspective, 76 Summary, 81 Notes, 82 83 CHAPTER 5 Building and Bankrolling TOD: A Private-Sector Perspective TOD and the Private Sector, 83 The Market for TOD, 84 The Decision to Develop, 86 Private Financing, 89 Availability and Terms of Finance, 92 Summary and Lessons, 96 Notes, 97 99 CHAPTER 6 Barriers to TOD: What They Are and How to Overcome Them Types of Barriers, 99 Fiscal Barriers, 99 Political Barriers, 102 Organizational Barriers, 102 Barriers Unique to TOD, 103 Public-Sector Perspective on TOD Barriers, 109 Overcoming Barriers: The Development Community’s Perspective, 110 Summary and Lessons, 114 Notes, 115 117 PART 3: THE IMPACTS OF TOD 119 CHAPTER 7 Benefits of TOD TOD’s Range of Benefits, 119 Primary Benefits, 122 Secondary Benefits, 125 Debates, 131 Perceptions of Benefits, 133 Conclusion, 134 Notes, 135 139 CHAPTER 8 Evidence on Ridership Impacts TOD and Ridership, 139 Reviewing the Evidence, 140 Self-Selection and Rail Commuting, 144 Transit Joint Development and Ridership, 146 TOD-Ridership Case Study: San Francisco Bay Area, 147 TOD-Ridership Case Study: Arlington County, Virginia, 152 Conclusions, 156 Notes, 157 161 CHAPTER 9 Real-Estate Market Impacts of TOD TOD and Real-Estate Markets, 161 Evidence on Market Performance, 162 The Importance of Business Cycles, System Maturation, and Timing, 166 Leveraging Transit’s Added Value Through Proactive Planning: The San Diego Experience, 168 Transit’s Added Value and Public Policies, 173 Summary and Conclusion, 176 Notes, 177 181 PART 4: CASE STUDIES 183 CHAPTER 10 TOD in Boston: An Old Story with a New Emphasis Boston Recovers Its Traditional Neighborhood Roots, 183 Boston’s TOD Toolbox, 186 MBTA, Joint Development, and TOD, 189 The Boston Economy and the Real-Estate Market, 191 Easy Transit Connections, Tough Development Sites, 191 Main Street and TOD, 196 South Station: Development Around Commuter Rail, 197 South Boston Waterfront: The Future Transit Neighborhood, 198 Lessons Learned, 202 Notes, 205 207 CHAPTER 11 New Jersey’s Transit Villages: From Refurbished Rail Towns to Ferry-Oriented Development New Jersey’s Market for TOD, 207 Other Factors Stimulating TOD, 208 The Transit Village Initiative, 212 Transit Villages in Traditional Rail Towns, 213 Ferry-Oriented Development, 220 Re-urbanization in Jersey City, 222 Transit Joint Development, 225 Conclusions and Lessons, 225 Notes, 226 229 CHAPTER 12 Washington, D.C.: Model for the Nation Washington Metropolitan Area Transit Authority: A Joint Development Pioneer, 229 Arlington County, Virginia: Three Decades of TOD Success, 235 Transit and Economic Development in Washington, D.C., 249 Montgomery County, Maryland’s Mature Business Districts, 251 Rail to Dulles, 254 TODs and Real-Estate Market Performance, 257 Conclusions and Lessons, 259 Notes, 260 263 CHAPTER 13 TOD and Joint Development in the Sunbelt: Miami-Dade County TOD in Florida, 263 Transit Planning and Joint Development in Miami-Dade County, 264 TAD at Brickell, 271 Overtown: TOD and Inner-City Revitalization, 272 Future Plans and Activities, 276 Conclusions and Lessons Learned, 276 Notes, 277 279 CHAPTER 14 Chicago’s Transit Villages: Back to the Future for Historic Commuter-Rail Towns Greater Chicago Is Sprawling Out and Growing In, 281 Chicago’s Multi-Layered Institutional Landscape, 281 TOD Implementation Tools, 283 TOD in Commuter-Rail Communities, 285 TOD Shaping New Commuter-Rail Lines, 292 The Future of TOD in Metropolitan Chicago, 293 Conclusions and Lessons, 296 Notes, 297 299 CHAPTER 15 Dallas: Using TOD to Create Place and Value in a Sprawling Metroplex Regional TOD Players and Tools, 299 TOD in Light-Rail Communities, 301 The Future of TOD in Dallas, 316 Conclusions and Lessons, 317 Notes, 318 321 CHAPTER 16 TOD in the Mountain West: Colorado Introduction, 321 Transit-Oriented Redevelopment in Metropolitan Denver, 322 Bus-Based TOD in Boulder, 338 Resort-Based TOD in the Roaring Fork Valley, 345 Conclusions and Lessons, 350 Notes, 351 355 CHAPTER 17 Portland’s TODs: Building Community on a Regional Scale The Regional Policy Framework for TOD, 355 Evolution in Transit to Encourage TOD, 357 TOD in Portland, 359 The Future of TOD, 377 Conclusions and Lessons, 378 Notes, 379 383 CHAPTER 18 The San Francisco Bay Area: The Challenge of Creating a Transit-Oriented Metropolis Regional Initiatives, 383 Transit Agencies, 388 BART Joint Development and Outreach, 393 Fruitvale BART Station: Fulfilling a Community’s Vision, 394 Local Government Initiatives, 397 For-Profit Developers, 399 Nonprofit Affordable-Housing Developers, 402 Advocacy Groups, 404 Conclusions and Lessons, 407 Notes, 409 411 CHAPTER 19 Southern California: From TODs to a Region of Villages Southern California’s Market for TOD, 411 Other Factors Stimulating TOD, 412 Policy Context, 413 Challenges to TOD in Southern California, 416 Financing Tools and Obstacles, 421 TOD Cases, 423 Joint Development and BRT—Los Angeles, 430 San Diego’s TOD Tools, 435 Impacts of TOD, 435 Monetary Benefits of Joint Development in Los Angeles, 436 Conclusions and Suggestions, 437 Notes, 440 443 PART 5: LESSONS AND CONCLUSIONS 445 CHAPTER 20 Research Findings and Policy Lessons Current TOD Practices, 445 TOD’s Multitude of Stakeholders, 446 Points of Agreement and Disagreement, 448 Benefits of TOD, 453 Recurring Themes and Lessons, 455 Lessons Through Case Studies, 463 469 CHAPTER 21 Policy Reflections and Future Research Directions Policy Reflections, 469 Future Research Directions, 471 Notes, 474 475 BIBLIOGRAPHY 479 GLOSSARY OF ACRONYMS AND ABBREVIATIONS A-1 APPENDIX A: Transit Agency Survey B-1 APPENDIX B: Developer Interview Protocol C-1 APPENDIX C: Lender Interview Protocol SUMMARY

Transit-Oriented Development around heavy-, light-, and commuter-rail in the United States stations. While typically nodal in form, TOD corridors have taken or are Transit-oriented development (TOD) has beginning to take shape; examples attracted interest as a tool for promoting include the Rosslyn-Ballston axis in smart growth, leveraging economic Arlington County, Virginia, and the development, and catering to shifting Vermont/Western district in Los market demands and lifestyle Angeles’s Hollywood area. In addition, preferences. This study, based on a over 100 joint development projects combination of stakeholder survey today exist on, above, or adjacent to responses, interviews, and in-depth case U.S. transit-agency property. The studies, paints a national portrait of most common joint development contemporary TOD practice in the arrangements are ground leases and United States. operation-cost sharing. Most often, joint development occurs at rail stations TOD is viewed and defined differently surrounded by a mix of office, throughout the country, with its most commercial, and institutional land uses. common traits being compact, mixed- However, examples of public-private use development near transit facilities joint ventures can be found among bus- and high-quality walking environments. only systems as well, normally in the Joint development is a form of TOD that form of joint intermodal transfer and is often project specific, taking place on, commercial-retail space at central-city above, or adjacent to transit-agency bus terminals. property. The results of a national survey suggest that the principal aim of TOD Institutional Landscapes and joint development is to boost ridership and, thereby, boost revenue Many voices shape the practice of TOD income. Community economic in contemporary urban America. A development and broader smart-growth multi-layered, sometimes complex agendas are secondary objectives. institutional and political environment has evolved that ensures accountability Scope of TOD and instills a degree of responsibility and fairness into the decision-making A rich mix of TOD can be found across process, but this environment can also America today, and all indications are form roadblocks to implementation. that the numbers and types of TOD will grow in years to come. Over 100 TOD The spectrum of participatory roles transit projects currently exist in the United agencies can take on are wide-ranging— States, found overwhelmingly in and from roles as modest as providing

S-1 technical guidance (e.g., transit- restrictive state statutes or self-imposed supportive design guidelines) to those as transit-agency rules. Some states limit, ambitious as being the self-anointed lead ipso facto, real-estate transactions developer. Most transit agencies get undertaken by transit agencies to involved in land-use affairs (broadly “transportation uses.” Many transit defined); however, they generally limit properties shy away from land their involvement in TOD matters to development matters on the grounds that interagency coordination. Most TOD it is not central to their mission of work concentrates on public outreach delivering safe and efficient transit and education. A common method for services. As a result, most transit drawing public input into the TOD agencies have no personnel assigned to planning process is organizing design TOD or, more generally, land charrettes—ranging from multi-day development, leaving it to their legal workshops led by professional designers departments to handle land-use affairs to facilitated community discussions and disputes. One in-house rule that has (inspired by the successes at the Pleasant clearly hampered TOD is one-to-one Hill BART station in the San Francisco replacement parking requirements. Bay Area and along the Wasatch Front Nonetheless, over 50 transit stations under the guidance of Envision Utah). across the United States are presently Local governments wield considerable being targeted for parking lot control over TOD outcomes through conversions, thanks in part to FTA’s zoning ordinances and building codes. new joint development rulings. Some states, notably California and New Jersey, have sought to jump-start TOD TOD Implementation Tools through transit village initiatives that critics view as mere window-dressing TOD implementation ideally starts with since little funding support is provided. a vision, cultivated from broad-based public input, and proceeds to strategic Important recent federal initiatives have station-area planning backed by been the new joint development ruling appropriate zoning as well as policy (which enables transit agencies to sell land incentives and regulations. Around half for TOD even if the land was purchased of surveyed transit properties in the using federal dollars), new starts criteria, United States state that their regions and various livable community initiatives. have a vision, policy, or plan in place that embraces TOD principles. Coordination between public agencies as well as with the private sector normally Overlay zones are the most common occurs through various ad hoc task means of controlling land uses, densities, forces and similar forums. In recent and site designs of TOD. Overlays, often years, private developers, builders, and introduced on an interim basis to head real-estate interests have joined forces to off automobile-oriented uses that might promote TOD in cities like Houston, compromise a TOD, usually specify Charlotte, and San Jose. desired land uses as-of-right, such as housing and convenience shops. For The major institutional barriers to TOD urban TODs, densities of 20 to are regulatory ones, either a product of 30 dwelling units per residential

S-2 acre and FARs of 1.0 and above are In terms of what metropolitan planning not uncommon. Some of the more organizations, state departments of progressive TOD zoning districts also transportation, and the federal lower automobile parking requirements government might do to help implement and sometimes even set bicycle parking TODs, respondents from the local levels mandates. stated loudly and clearly that what is most needed is money—specifically The national survey of U.S. transit for strategic station-area planning, agencies revealed that besides standard infrastructure, and on-the-ground zoning, the tools most frequently used to improvements. Smart-growth legislation leverage TOD are funding for station- that targets state infrastructure and urban area planning and ancillary capital renewal grants to transit station areas improvements; the introduction of density (such as that in Maryland) is also looked bonuses, sometimes used to encourage upon favorably by local interests. the production of affordable housing Regulations like concurrency units; and relaxation of parking standards. requirements, on the other hand, These measures, moreover, received generally received low grades among high marks in terms of their overall survey respondents from the local level. effectiveness among transit professionals who responded to the survey. Next in the For financing streetscape and other order of frequency of usage have been ancillary improvements around transit land-based tools, like land purchases on stations, monies have mostly come from the open market (for land-banking and federal and state grants such as the potential “deal-making”) and assistance Transportation and Community System with land assemblage. For the most part, Preservation Pilot Program under the redevelopment agencies have applied Transportation Equity Act for the these tools, meaning their role in 21st Century (TEA-21). The most leveraging TOD has been mainly limited common sources of non-grant funds used to economically depressed or blighted to leverage TOD are individual investor neighborhood settings. Because of the funds and nonprofit/foundation funds. higher risk involved, redevelopment tools have often been accompanied by other Building and Bankrolling TOD funding sources, sometimes with a dozen or more participants involved in the Ultimately, TOD is an outcome of one or process. more developers putting up their money, or the money of lenders and investors, to Implementation strategies that are create a new form of urbanism around procedural in nature, like expediting transit stations. Interviews revealed that entitlement reviews and excluding TODs developers view TOD in mostly positive from concurrency requirements, have terms. When asked to rate the overall been applied less often in practice and financial record of TOD, interviewed are also viewed by public-sector developers on average gave it a 5 on a interests as less effective than other scale of 1 to 7, indicating that they think measures in jump-starting TOD. This it performs better than most products. view, however, does not square with that Developers were especially optimistic of many TOD developers. about TOD’s prospects in areas where

S-3 traffic congestion continues to worsen general agreement that TOD offers little and there is a pro-TOD political help when it comes to securing sentiment. conventional debt financing. Loan decisions, they note, are governed by While there were substantial areas of fundamentals, not urban planning agreement among developers who were concepts. Interviewed lenders echoed interviewed, a number held conflicting this sentiment. views of certain elements of TOD. One of these elements was parking. On the one Most of the interviewed lenders had hand, many developers relate to the idea difficulty pinpointing the positive and that parking standards should be lowered negative factors that influence whether to the degree that significant numbers of they invest in a TOD because banks, residents, shoppers, and workers ride they contend, look at each project on its transit. On the other hand, many have individual merits. Dealing with the embraced the principle that parking is an innate market characteristics of TOD— effective marketing tool and can notably, mixed-use projects with the sometimes make or break a project. advantage of being near transit—is Regardless, most favor leaving the generally viewed as the best way to decision of how much parking to provide market the TOD product to the lending to the private sector. Developers feel that community. Factors that enhance the they know the market best and will take connection of a parcel to a rail station— advantage of cost savings when justified. direct and attractive pathways, well- lighted and secure portals, and a strong On balance, many developers feel that degree of public commitment backed by locating projects near major transit stops infrastructure improvements like under- is advantageous to the degree it provides grounding utilities and upgrading road rent premiums. Some also feel that access—are likely to make TODs all the locating projects close to transit can more attractive to lending institutions. improve the ability to secure equity finance, particularly for certain product Interviews suggest that joint development types in pioneering locations (e.g., projects are more difficult to finance than office development in suburban neighborhood-scale TODs. This is partly locations). Most developers realize that due to guilt by association—the fact that more is needed than spatial proximity, a project is directly tied, symbolically and however. Making sure that the walk figuratively, to a transit facility seems to between a project and a station portal is detract from its value. The bureaucratic safe and reasonably attractive matters to component of joint development projects, many. Putting in complementary land involving government institutions that are uses, such as convenience shops and not always driven by the profit motive, service retailers, is particularly makes some lenders uneasy as well. important to TOD homebuilders. Nonetheless, developers realize that TOD Barriers regardless of what they think, access to funds is often dependent upon the views Many roadblocks stand in the way of of lenders. Many developers embrace TOD, just as they do with most forms of TOD as a concept; however, there is a compact, mixed-use development. Some

S-4 barriers are fiscal in nature, such as the price of housing and parking, creating higher costs and risks of dense, infill separate markets for each.) Within development; the alignment of rail lines transit station boundaries, clashes are along low-cost corridors that have also found between the preferences of minimal development potential; and professional-class suburbanites who park fiscal/exclusionary zoning policies that and ride and other groups who would restrict housing production. Others are in prefer more human-scale station designs. the form of political roadblocks, like Many transit officials side with “not-in-my-backyard” (NIMBY) automobile-using patrons, invoking opposition to infill. Still others are one-to-one replacement policies to institutional and organization in ensure that parking is in ample supply. character, such as the difficulty of Lastly, mixed land uses, which are a coordinating TOD activities among characteristic trait of TODs, pose multiple actors and stakeholder groups difficulties in lining up funding, with divergent interests. investors, and contractors. Vertical mixing is particularly problematic; most While many of these barriers are generic developers call for horizontal mixing to all forms of dense, infill development, instead. Quite often, the ground-level some are more often associated with retail components of mixed-use TODs TODs. One of these barriers is the suffer the most, in part because they are “congestion conundrum”: the fact that poorly laid out. nodal development around a transit station increases spot congestion, The national survey of public-sector prompting some jurisdictions to stakeholders shed light on what barriers downzone. Another barrier is the are perceived to be the most onerous and logistical dilemma of accommodating difficult to overcome. Most problematic, multi-modal access needs, which often according to survey respondents, are results in station road designs and automobile-oriented development parking layouts that detract from the patterns. The lack of lender and quality of walking. More fundamentally, developer interest in TOD, limited local this represents a conflict between the expertise in planning for TOD, and role of a station as a functional “node” questionable market demand are also (particularly in the minds of transit generally seen as significant stumbling managers) and a desirable “place” blocks. Factors like NIMBY opposition, (particularly in the minds of urban inadequate transit services, and poor planners). Still another stumbling block siting of transit stations were generally unique to TODs is the rationalization of rated as moderate barriers. parking. By their very nature, transit stations offer “location efficiency,” While the developers interviewed for enabling residents to get by with fewer this study were enthusiastic about TOD, automobiles than they might otherwise their views on what is “transit-oriented” own. Despite transit stations’ inherent did not always square with urban design location efficiency, lenders and planners principles that call for mixed-use often insist that code-standard parking buildings clustered in close proximity to be provided in station areas. (One a transit station. Notably, a handful of mediating approach is to unbundle the developers felt strongly that TOD design

S-5 guidelines should not overemphasize TOD’s secondary benefits include vertically mixed uses such as ground- congestion relief, land conservation, floor retail and upper-level residential. reduced outlays for roads, and improved They explained that outside of dense safety for pedestrians and cyclists. Many urban locations, building mixed-use of these benefits feed off of each other, products in today’s marketplace can be and quite a few are redistributive in a complex and risky proposition; few nature—gains experienced by some believe that being near a train station are matched by losses experienced fundamentally changes this market by others. reality. Those interviewed did welcome certain public-sector efforts to create The impacts of TOD no doubt vary by incentives for development, including time and circumstances. In a boom land assembly, infrastructure provision, economy, when highways are jam- strategic investments to improve packed, the benefits of living, working, neighborhood image, and expedited and running a business near a grade- development review processes. In separated, high-performance transit line general, developers cautioned against are likely much greater than during an over-regulation and identified actions economic downturn. TOD is also likely that could be taken well in advance of to be more highly valued in large development that would reduce risks congested cities than in small uncongested and encourage more TOD. ones. It is because of such variation that our knowledge of TOD benefits remains The Benefits of TOD partial. Such variation has also given rise to harsh debates and conflicting signals The potential benefits of TOD are social, on TODs benefits, especially in “best environmental, and fiscal. Focusing case” settings like Portland, Oregon. growth around transit stations capitalizes on expensive public investments in Those working for transit agencies and transit by producing local and regional local, regional, and state governments benefits. TOD, proponents believe, can generally give TOD a moderate rating in be an effective tool in curbing sprawl, terms of its ability to produce benefits. reducing traffic congestion, and TOD gets high marks for contributing to expanding housing choices. neighborhood and housing conditions. Its greatest benefit, according to national The most direct benefit of TOD is survey respondents, lies in increasing increased ridership and the associated ridership. revenue gains. Research shows residents living near stations are five to six times In light of the premium placed on more likely to commute via transit than TOD’s ridership-boosting potential, this are other residents in a region. Other study carried out original research that primary benefits include the revitalization examined the association between of declining neighborhoods, financial development patterns around rail gains for joint development opportunities, stations and transit usage in two regions increases in the supply of affordable of the country with among the most housing, and profits to those who own successful TOD track records: the San land and businesses near transit stops. Francisco Bay Area and the Washington

S-6 (D.C.) Metropolitan Area. For the Bay on land values of affected properties. Area, census data from 2000 and To the degree that TODs enhance geographic information system tools accessibility, this benefit gets capitalized were used to build statistical models that into the sales price of real estate. The showed transit commute shares increase weight of evidence to date shows that with density, land-use diversity, and development near transit stops enjoys pedestrian-oriented design of land-value premiums and generally out- neighborhoods around rail stops. performs competitive markets. This Significant interaction effects were generally holds for residential housing found between residential density and (especially condominiums and rental city block size. The model suggested units) as well as office, retail, and other that a doubling of mean residential commercial activities. However, the densities from 10 to 20 dwelling units payoffs are not automatic, and quite per gross acre, for example, increases often a number of preconditions must transit’s commute mode share from be in place. One is an upswing in the 20.4% to 24.1% for a typical Bay Area economy, with plentiful demand for real rail station setting with an average block estate and, importantly, worsening traffic size of 6 acres; the commute share rises congestion. Only then will there be to 27.6% if residential densities are market pressures to bid up land prices combined with a smaller (and thereby and a clear benefit to having good rail more pedestrian-friendly) average block access as an alternative to fighting size of 4 acres. Similarly robust highway traffic. Also important are relationships were uncovered for public policies, such as zoning bonuses, Arlington County, Virginia, in the which further leverage TOD and system Washington (D.C.) Metropolitan Area. expansion that produce the spillover There, office-retail development was the benefits of a highly integrated network. most powerful predictor of ridership at Moreover, it is important that transit be seven Metrorail stations. For example, in a neighborhood free from signs of models estimated that every 100,000 stagnation or distress with a reasonably square feet of additional office and retail healthy real-estate market if significant floor space near an Arlington County premiums are to accrue. Metrorail station increased average daily boardings and alightings at that In San Diego, premiums have been station by around 50 customers, all else recorded for commercial properties in the being equal. Housing construction Mission Valley corridor, an area that has interacted with transit service levels to generally enjoyed sustained growth over give ridership a further boost. Every the past decade. Pro-development policies 1,000 additional residential units around introduced by local governments—such a station, when combined with as overlay zoning to encourage mixed 100 additional railcar passenger spaces land uses and targeted infrastructure per day passing through the station, led investments—bolstered commercial to more than 50 additional daily station property values in the Mission Valley. boardings and alightings. This stands in marked contrast to San Diego’s South Line (to the Tijuana Another valid means of gauging the border), where little effort has been made benefits of TOD is to examine impacts to leverage TOD, in large part because of

S-7 stagnant growth, and, predictably, no Through effective partnerships with meaningful land-use changes have transit agencies, local government, and occurred. others, and under the right conditions, all parties are in a position to reap the Insights into the property-value impacts financial gains conferred by well- of TODs carry policy significance. For planned and well-managed TOD. one, public entities are in a position to recapture some of the added value Case Studies and Lessons through benefit assessments, land acquisitions and re-sales, and ground/ To embellish and extend the insights air-rights leases. Some areas, such as gained from the national surveys, the Washington (D.C.) Metropolitan literature reviews, and informant Area, Los Angeles, and Portland, interviews, 10 case studies were carried have been particularly aggressive in out for the following U.S. locations: recapturing some of the value created Boston, New Jersey, the Washington by transit investments; however, legal (D.C.) Metropolitan Area, Miami, and institutional concerns continue to Chicago, Dallas, Colorado, Portland, the impede progress in this area. San Francisco Bay Area, and Southern California. Together, the case studies TODs take time to evolve, and offer a rich set of perspectives on the experiences suggest that land-value challenges and potential payoffs of benefits from TODs take time to accrue implementing TOD. as well. This was underscored by experiences in Santa Clara County, The 10 case studies provided valuable where no measurable land-value lessons on 5 important aspects of TOD: premiums were found for transit in its political and institutional factors, infancy, but where, by the system’s planning and land-use strategies, benefits tenth anniversary, when the real-estate and impacts, fiscal considerations and market had revved up, benefits were partnerships, and design challenges. appreciable. Savvy developers increasingly understand that profiting Political and Institutional Factors from TOD is a long-term process. In the words of one active TOD developer in • Political leadership is vital to TOD the Denver region, “We’re not here to implementation. Having someone ‘flip’ properties in the search for quick step up as the political champion of a profits with TOD and infill in general; TOD proposal is critical to we’re in it for the long haul.” More and marshalling resources, building a more, developers are using long-term coalition, and resolving disputes that pro formas when evaluating the potential invariably crop up along the way. payoff of TOD. As with any long-term investment, asset management is • Inclusiveness and ongoing public essential to reaping handsome profits. input in TOD planning, design, And for profits to accrue, the public and implementation is essential to sector needs to do its part to ensure that success. Outreach not only helps to transit-served neighborhoods are, and fend off a possible NIMBY backlash, will continue to be, viable places. but also gives those who live and

S-8 work in a TOD neighborhood a Planning and Land-Use Strategies vested stake in ensuring that what is built is consistent with neighborhood • Successful TODs start with shared goals, has a human-scale “feel” and visions that guide planning and is of the highest caliber possible. implementation for years to come. The enterprise of creating a TOD • Institutional coordination and over an extended period of time is streamlining are especially crucial subject to so many distractions and to TOD implementation when interruptions that the ability to stay multiple agencies govern different focused on a shared vision is pivotal elements of land development and to success. Arlington County, transit-service delivery. Red tape, Virginia, adopted the metaphor of a institutional bickering, and multiple “bull’s-eye” to articulate its TOD levels of review are sometimes future. Many local observers attri- enough to frighten away the hardiest bute Arlington County’s success at of developers from station locations. adding over 15 million square feet of Places like Metropolitan Baltimore, office space, 18,000 housing units, Philadelphia, San Francisco- and several thousand hotel rooms to Oakland, and Denver have formed the bull’s-eyes of the Rosslyn- interagency working groups and Ballston corridor since 1970 to this committees to streamline the TOD early vision and the subsequent review and coordinate decision general plan and specific station-area making. plans that contributed to the vision’s realization. • More permissive regulatory environments and enabling • Start TOD planning early. TODs legislation are often needed if are often the cumulative products transit agencies, local governments, of many individual development and regional planning organizations decisions, some of which unfold are to proactively implement TOD. slowly and in fits and starts. Areas The absence of authorizing with successful TOD track records, legislation or simple avoidance of like Portland, Arlington County, and the issue of how far transit agencies Montgomery County (in Maryland), can go in pursuing land development have been working on TOD for a has many times cast a cloud of long time. suspicion on whether TOD is a legitimate public-sector undertaking. • TOD success can hinge on Without clearly articulated rewarding developers with measures legislation that enables transit that grant more latitude in designing agencies and other local actors to projects; allow mixing of uses; assemble and bank land and enter increase density envelopes; and into joint development arrangements, offer certainty, clarity, and built-in TOD either gets ignored or ends up assurances that the public sector on the back-burner, lost in the will follow through on planning pressing day-to-day needs of commitments. Because of the risks running a transit organization. sometimes encountered in building

S-9 near transit stations, especially with every TOD project in large part infill and redevelopment projects, and because the TOD market is not because of the public good conferred “standard.” Experience shows that by TOD, “business as usual” should new housing built near rail stops not apply to TOD developers. Zoning often appeals to single professionals, must often be revised to allow childless couples, and empty-nesters higher-than-average densities and a who value amenities as much as the land-use program and mix that satisfy amount of living space and who often market demands. In cities like own fewer automobiles and log fewer Seattle, San Diego, and Atlanta, miles on their odometers than the zoning overlays have been typical urban household. Standards successfully used to increase for mortgage qualifications, building permissible densities, diversify uses, designs, and parking supplies need to and prevent automobile-oriented uses reflect these market realities. from preempting TOD possibilities. • Station-area plans and planning • Successful TODs emphasize “place- matter. Given the risks and un- making”: creating attractive, certainties associated with TOD, memorable, human-scale environs developers, residents, and merchants with an accent on quality-of-life expect, and indeed deserve, carefully and civic spaces. Increasingly, crafted, forward-looking plans that projects built around up-and-coming orchestrate how, when, and where a transit nodes, like Dallas’s TOD will evolve. Good TODs begin Mockingbird Station, Portland’s with good planning. Pearl District, and Metropolitan Chicago’s Arlington Heights, are Benefits and Impacts targeted at individuals, households, and businesses seeking locations that • TOD’s ridership bonuses are are vibrant and interesting; these substantially a product of places usually have an assortment of residential self-selection, suggesting restaurants, entertainment venues, art that policy reforms should focus on shops, cultural offerings, public allowing residents to sort themselves plazas, and civic spaces. into transit-served neighborhoods unimpeded. Research continues to • TODs invite bold new policies that demonstrate that self-selection is a push conventional boundaries and major factor behind higher transit acknowledge the unique market ridership among those living near niches that are being served. rail stations. It follows that public Location Efficient Mortgages and policy should focus on breaking sliding-scale impact fees, along with down barriers to residential mobility unbundled parking costs and flexed and to the introduction of market- parking standards, are good responsive zoning in and around examples of “out-of-the-box” transit stations. thinking. Standard designs, cost pro formas, and building-code templates • TOD benefits are not automatic and have to be challenged for each and generally accrue during upswings

S-10 in local economies, when traffic revenues that can go to various congestion increases. Favorable station-area improvements like conditions must exist for TOD to landscaping, pedestrian-way produce significant economic upgrades, and public spaces. benefits. Experience shows that if compact, mixed-use development • Creative financing is essential to around transit nodes is to attract spreading the risks; expanding the enough motorists to transit to reduce base of knowledge and experience; traffic congestion and increase and tapping into the fiscal environmental benefits, areas need advantages of certain partners, such to be growing rapidly and traffic as local governments’ superior bond conditions need to be bad and getting ratings and guarantees, to make worse. Since TODs increase projects “pencil out.” Partnerships accessibility among those living, are pivotal to successful TODs. In working, and shopping near transit, redevelopment districts that suffer an extensive transit network is also from a poor marketing and often necessary for the benefits of performance image, multiple partners TOD to materialize. are often necessary to raise sufficient capital to spread financial risks. Each • Transit’s benefits, as reflected by partner can bring something unique land-value premiums, also generally and of value to the table. increase with proactive planning, network development, and system • Market fundamentals, not a TOD maturation. External factors like label, govern whether private regional economic and traffic capital gets invested around transit conditions do not solely govern stations. The availability of equity the potential benefits of TOD. and loans to fund projects near Experiences in Santa Clara County transit is primarily driven by capital and San Diego, California, show that market conditions and perceived land-value premiums tend to increase market demand, not a project’s status as a system’s network expands and as a TOD. Lenders involved with are generally higher in areas with TOD projects (not all of whom even stronger real-estate markets and realize they are funding a TOD) where farsighted, proactive rarely adjust lending standards to planning has taken place. reflect proximity to transit.

Fiscal Considerations and Partnerships Design Challenges

• TODs benefit from efforts to • In urban settings, rationalizing recapture some of the value parking policies in relation to TOD conferred by transit investments is essential to influencing how a to generate revenues needed for TOD station will be accessed and to ancillary improvements. avoiding conflicts over whether land Recapturing some of the land-value goes to parking or development. premium conferred by transit If not properly dealt with, parking investments provides much-needed can form a huge obstacle to TOD:

S-11 separating a station from the conflict between the role of transit neighboring community, diminishing stations as “nodes” and their role as the quality of the walking “places” often makes this difficult. environment, and precluding station- Research shows that the majority of 1 site air rights or joint development. residents living within ⁄4 mile of a Transit boards need to rationalize transit station arrive by foot or parking policies beyond a carte bicycle; however, this share blanche one-to-one replacement plummets markedly if there are mandate. Where affordable housing significant physical, symbolic, and is being built near stops, reduced psychological barriers to bicycle and parking quotas or at least flexible pedestrian traffic like wide, busy standards should be considered to roads and incomplete sidewalk reflect the tendency of many TOD networks. San Diego’s Mission households to own fewer automobiles. Valley and suburban Denver are Unbundling the cost of parking from good examples of places where (with the cost of housing can make transit- the help of smart-growth planning based residency all the more monies and pedestrian-sensitive affordable. zoning ordinances) design attention and resources were directed to • Even though mixed land uses are a improving the quality of circulation, trademark of TOD, arriving at a aesthetics, and basic provisions workable program poses design (e.g., crosswalks and benches) of challenges that need to be overcome areas surrounding rail stations. for a successful TOD. Quite often, finding the right formula for mixed • Transit service improvements and land uses is every bit as difficult as system upgrades can trigger TOD rationalizing parking policies. activities, especially in settings with Planners sometimes impose a design expensive housing markets and a template of ground-floor retail and pent-up demand for transit-oriented upper-level housing or offices living. “Choice” transit users are (i.e., vertical mixing) on any and all highly sensitive to service quality; development proposals within a therefore, running frequent and TOD. Mixed-use projects are trickier reliable trains and minimizing the to design, finance, and sometimes need to transfer can be critical to the lease than single-use ones. Local future of TOD. In northeast New governments need to be sensitive to Jersey, the through extension of New such challenges and focus more on Jersey Transit’s (NJ TRANSIT’s) achieving a desired land-use mix Northeast Corridor to New York’s within a transit station area as Pennsylvania Station unleashed a opposed to individual parcels flurry of building activities around (i.e., horizontal mixing). century-old commuter rail stations. In Boulder, Colorado, the integrated • Walking access, quality of Community Transit Network— circulation, and the overall known for its colorful “Hop,” pedestrian environment are critical “Skip,” “Jump,” “Leap,” and to successful TODs. However, the “Bound” buses—triggered bus-based

S-12 TOD (typically second- and third- amounts of time behind the wheel, and a floor offices and lofts above street- feeling of isolation from cultural level retail) along several routes. offerings—are prompting more and more Americans to leave the suburban Policy Reflections and edge and head to transit-served subcity Future Research nodes and even the traditional inner city.

The state of practice with TOD in the As long as TOD confers both public and United States is generally a healthy one. private benefits, there is no replacement There are many exciting examples of for public-private partnerships in TOD currently on the ground and at least advancing TOD implementation. Each as many on the drawing boards across party brings unique talents, insights, and the United States. Mixed-use TODs like resources to the table. Experience has downtown Plano, Texas, and Englewood shown that creating an in-house City Center, outside Denver, would have capability within transit agencies to been unimaginable in the 1980s, when pursue partnerships, hammering out these and other suburban communities fair and mutually rewarding risk- and were hosting a boom in campus-style revenue-sharing agreements, and office development and automobile- building in contingencies that allow oriented shopping plazas. The United projects to change course as needed can States is in the midst of a sea change produce win-win outcomes. Successful when it comes to linking transit and TOD partnerships win recognition in the urbanism. In once automobile-dominant marketplace and deserve other kinds of settings, yesterday’s design templates recognition as well such as national are being discarded in favor of TOD. awards, “best practice” web sites, and Atlanta’s BellSouth TOD is the result of high-profile special sessions at national taking scattered automobile-oriented conferences like those sponsored by development and transforming it into a Rail∼volution and the Urban Land concentrated TOD. Attention has been Institute. As the joint development talent given to every detail, such as siting pool and knowledge base expands, additional BellSouth employee parking lessons will be learned and put to good around other Metropolitan Atlanta Rapid use on new and up-and-coming projects. Transit Authority stations to enable Disseminating knowledge and cross- workers to commute by rail for part of pollinating it offer the best hope of their trip. The company’s aim is for at achieving future generations of TOD least 30% of its workforce to arrive by and joint development projects that transit, a huge change from the current are robust, smartly designed, and market share of under 5%. financially viable.

Also different from the past is that it is Considerable progress has been made in not just public policies and interventions our understanding of TOD: what works that are paving the way for TOD. and what does not, what preconditions Unfettered market forces are also having are necessary to effectively leverage a profound impact. The less desirable land development around stations, and features of sprawl—automobile how private developers react to different dependence, congestion, excessive regulations and incentives. More is also

S-13 known about land-value premiums fully loaded costs of pursuing TOD with enjoyed by property owners with parcels standard patterns of suburban near rail stops and ridership impacts, development. among other areas. Still, knowledge gaps remain. Areas that hold future research Finding ways of effectively disseminating promise include studies that monetize the results of TOD research is equally TOD’s benefits under a range of important. Research reports, professional conditions; set cost-effectiveness journal publications, and conference thresholds for TODs at varying densities presentations are obvious channels. The and transit services at various levels of Internet is another important channel. A intensity; evaluate impacts of TOD- national TOD web site that showcases friendly measures like Location Efficient “best practices” and highlights the latest Mortgages, flexible parking standards, research findings would be welcomed by and bus-based initiatives; and compare many professionals and practitioners.

S-14 PART 1

TRANSIT-ORIENTED DEVELOPMENT IN THE UNITED STATES TODAY

Transit-oriented development (TOD) has gained currency not only as a promising means of expanding the ridership base of U.S. urban rail and bus systems, but also as an approach to revitalizing communities, a new vernacular of architecture and urbanism, and a venue for increasing choice and diversity in local housing markets. Part 1 of this report reviews the scope of TOD activities in the United States today. The first chapter provides an overview of TOD and transit joint development, reviewing local definitions as well as goals and objectives, and discussing this study’s overall methodology. Chapter 2 inventories the scope and breadth of contemporary TOD and joint development in the United States, highlighting noteworthy examples among rail and bus systems and across big and small cities. Chapter 1

Transit-Oriented Development: An Overview

Introduction formation of the Georgia Regional Transportation Authority (GRTA), a Transit-oriented development (TOD) has watchdog state agency with purse-string gained currency in the United States as a powers, whose principal charge is to means of promoting smart growth, coordinate transportation and land use. injecting vitality into declining inner-city The recent transformation of Atlanta’s settings, and expanding lifestyle choices. Lindbergh Station from being TOD’s focus of locating new predominantly a surface parking lot to construction and redevelopment in and being a vibrant rail-served mini-city around transit nodes is viewed by many signals an abrupt shift in policy, one as a promising tool for curbing sprawl aimed at exploiting transit’s and the automobile dependence it development potential. Rather than spawns. Some hope that TOD can passively sitting back and letting the breathe new life and vitality into areas of market determine what, if anything, need by channeling public investments happens around stations, more and more into struggling inner-city settings. And transit agencies and their partners across by creating more walkable, mixed-use the United States are today proactively neighborhoods with good transit creating new markets for transit by connectivity, TOD is thought to appeal targeting growth in and around stations. to the lifestyle preferences of growing numbers of Americans, such as childless Interest in TOD is being driven from couples, those Americans belonging to the supply side also. New rail or bus “Generation X,” and empty-nesters. rapid transit systems are planned or under construction in all but three of That elusive concept, quality of life, is the 30 largest U.S. metropolitan areas. another often-heard reason why TOD While older east-coast cities like should be pursued. Many Americans Boston, Philadelphia, and New York spend too much time getting to and from have more than a 100-year legacy of work, robbing them of time at home with TOD, going back to the streetcar families and friends. Between 1990 and suburbs of yesteryear, today cities like 2000, the average nationwide travel time Dallas, Denver, Salt Lake City, to work rose by almost 3 minutes, to Charlotte, Portland, and Minneapolis 25.5 minutes. Commuters in Atlanta are borrowing a chapter from the past, reported the largest increase in commute exploiting new rail investments to time, on average, a 5.2-minute increase. create transit-friendly urban forms. The widespread perception of many Atlantans that quality of life is rapidly This report provides a comprehensive eroding has prompted a number of review of the practice of TOD in the radical changes in recent years, like the United States. Through a combination of

3 canvassing the literature, surveying and political leadership in spearheading interviewing key stakeholders, and redevelopment in traditional commuter- conducting in-depth case studies, TOD’s rail neighborhoods. Part 5 concludes the current state of the art and state of report with a summary of key findings, practice in the United States are assessed. overall policy conclusions, and suggestions for further research. Part 1 of the report provides a summary Appendixes A, B, and C provide of the present-day scope of TOD in the supplementary material. United States and its closely related cousin, joint development. As discussed Study Approach later, joint development is defined in this study as a form of TOD that occurs on The main tactic used in compiling transit-agency property and typically information about TOD and joint involves a public-private partnership. development in the United States was to Part 2 probes the current institutional, talk with, interview, and survey those organizational, and regulatory most actively involved—the environment that governs TOD practice, stakeholders. Insights and information drawing on survey results and informant for five public-sector stakeholder interviews of seven stakeholder groups groups—transit agencies, local from both the public and private sectors. governments, redevelopment agencies, Part 3 is evaluative in nature, reviewing metropolitan planning organizations evidence on the benefits of TOD and (MPOs), and state departments of assessing the degree to which it has transportation (DOTs)—were compiled achieved its hoped-for targets, be they mainly from responses to open-ended traffic congestion relief or expanding and close-ended survey questions. options in affordable housing. Original Views and opinions from two private- research on the ridership impacts of sector interests—developers and development activities around transit lenders—were elicited primarily stations is also presented, based on through telephone interviews, using a experiences in the San Francisco Bay structured interview protocol. Surveys Area and Arlington County, Virginia. and interviews were conducted from Part 4 provides focused insights into July to September 2002. TOD and joint development through 10 in-depth case studies. Each case study The survey process focused on focuses on a particular theme or issue compiling background information and related to TOD. Together, they provide attitudinal responses from all U.S. transit a rich portrait of contemporary TOD agencies as well as other stakeholder practices in the United States—successes groups in large metropolitan areas where as well as failures—from a multitude of TOD is known to exist in some form.1 perspectives. Case studies like that of In all, the number of surveys received Portland, Oregon, focus on experiences (and the response rates) from each in promoting mixed-use development public-sector stakeholder group was and affordable housing near rail lines in the following: 90 from transit agencies a setting where anti-sprawl initiatives (21.7%), 23 from local governments abound, while case studies like that of (29.5%), 8 from redevelopment agencies Chicago, Illinois, examine the role of (44.4%), and 24 from MPOs (28.9%).

4 For further discussions of the survey What Is TOD? methodology and copies of survey instruments, see the interim report for There is no universally accepted TCRP Project H-27: Transit-Oriented definition of TOD because development Development and Joint Development that would be considered dense, in the United States: A Stakeholder pedestrian-friendly, and transit-supportive Analysis. in a middle-size city in the Midwest would be viewed quite differently in the Complementing the national survey were heart of Manhattan or the District of the 10 case studies, chosen to provide Columbia. Moreover, the “tag” of TOD more detailed insights into the “art and has recently come under attack by those science” of TOD implementation. These who contend that buildings erected near highlight best-case practices and U.S. transit nodes do not always have performance impacts as well as missed any kind of functional or meaningful opportunities, disappointments, and relationship to the station. In sizing up implementation barriers. neighborhoods surrounding train stations in the United States today, Hank Dittmar, The 10 cases—Boston, New Jersey, the President of the Great American Station Washington (D.C.) Metropolitan Area, Foundation, a nonprofit corporation that Miami Metro, Chicago, Dallas, Colorado, promotes economic development through Portland (Oregon), the San Francisco the preservation of railroad stations, Bay Area, and Southern California— recently remarked: “Most often they have were selected in close consultation with conventional single-use development the TCRP H-27 project panel to patterns, with conventional parking highlight various themes and issues requirements, so that the development is surrounding TOD. Case studies were actually transit adjacent rather than transit conducted through a series of steps: oriented.”3 Such a take has spawned a collection and review of background new term for characterizing land materials and information (through development near transit, “transit- literature reviews and Internet searches); adjacent development,” or TAD (a less initial telephone correspondence with desirable form of development for some “key local players” (to explain the than TOD). purpose of the study and solicit local support and interest); preparation of a In this study, we opted not to parse “study plan” (based on background definitions of TOD, leaving it to local materials and telephone contacts); field stakeholders to identify what they visits (using interview templates to elicit consider to be TOD from their own or inputs from local stakeholders); their agencies’ perspectives. Ten of the collection of data, reports, newspaper 90 surveyed transit agencies (11.1%) had articles, and other secondary materials; formally adopted a definition of TOD, visits to and photographs of projects; according to respondents. Most in-house follow-up contacts (to fill in missing definitions of TOD came from large information); draft case-study transit properties operating rail services, preparations (provided to key local with the notable exception of the Roaring contacts for reactions and suggestions); Fork Transportation Authority serving and final case-study write-ups.2 the Aspen, Colorado, area. Table 1.1

5 Table 1.1. Transit Agency Definitions of TOD Transit Agency Definition ATLANTA: Metropolitan Atlanta Rapid Transit Broad concept that includes any development that Authority (MARTA) benefits from its proximity to a transit facility and that generates significant transit ridership.

ASPEN: Roaring Fork Transportation Authority, Land development pattern that provides a high level Colorado of mobility and accessibility by supporting travel by walking, bicycling, and public transit.

BALTIMORE: Maryland Transit Administration A relatively high-density place with a mixture of residential, employment, shopping, and civic uses located within an easy walk of a bus or rail transit center. The development design gives preference to the pedestrian and bicyclist.

CHARLOTTE: Charlotte Area Transit System High-quality urban environments that are carefully planned and designed to attract and retain ridership. Typically, TODs provide for a pedestrian-friendly environment.

NEW JERSEY: New Jersey Transit Corporation An environment around a transit stop or station that (NJ TRANSIT) supports pedestrian and transit use, created by providing a mix of land uses in a safe, clean, vibrant, and active place.

CHICAGO: Regional Transportation Authority of Development influenced by and oriented to transit Northeast Illinois (RTA) service that takes advantage of the market created by transit patrons.

ORLANDO: Central Florida Regional A sustainable, economically viable, livable Transportation Authority (LYNX) community with a balanced transportation system where walking, biking, and transit are as valued as the automobile.

SALT LAKE CITY: Utah Transit Authority (UTA) Projects that enhance transit use, improve the quality of service provided to Authority riders, or generate revenue for the purpose of supporting public transit.

SAN FRANCISCO: Bay Area Rapid Transit Moderate- to higher-density development, located Authority (BART) within an easy walk of a major transit stop, generally with a mix of residential, employment, and shopping opportunities designed for pedestrians without excluding the automobile. TOD can be new construction or redevelopment of one or more buildings whose design and orientation facilitate transit use.

WASHINGTON, D.C.: Washington Metropolitan Projects near transit stops which incorporate the Area Transit Authority (WMATA) following smart-growth principles: reduce automobile dependence; encourage high shares of pedestrian and bicycle access trips to transit; help to foster safe station environments; enhance physical connections to transit stations from surrounding areas; and provide a vibrant mix of land-use activities. presents the definitions of TOD adopted California Department of Transportation by these 10 agencies. Some definitions (Caltrans). In its recent comprehensive relate to smart-growth and sustainability study of TOD, Statewide Transit- principles in general, although most Oriented Development Study: Factors focus on the design characteristics of for Success in California, Caltrans transit-supportive environments. Most defined TOD similarly to most local definitions emphasize the importance transit agencies: higher than usual of high-quality walking environments. densities, mixed land uses, and Four of the definitions call for mixed pedestrian-friendly designs. California’s land uses and two specifically mention definition is noteworthy for making the higher-density developments. Also, point that TOD is not “anti-car,” three definitions tie TOD to increases in emphasizing that TOD creates an ridership and revenues. The Regional attractive pedestrian environment Transportation Authority (RTA) in “without excluding the auto.” This caveat metropolitan Chicago views TOD in is not surprising given that California has market terms. In general, there is one of the highest automobile ownership agreement within the professional transit rates in the country.4 community as to what constitutes a TOD: a pattern of dense, diverse, It bears noting that TOD is hardly a new pedestrian-friendly land uses near transit concept. A century ago, highly walkable, nodes that, under the right conditions, mixed-use communities blossomed translates into higher patronage. around most streetcar and interurban rail lines in the United States. The Similar definitions of TOD were offered subsequent uprooting of these systems by other stakeholder interests. Local in favor of roads and super-highways governments tend to cast TOD in more witnessed the gradual disappearance of specific terms, such as minimum floor- transit-oriented communities. Single-use area ratios (FARs) and distances to rail automobile-oriented subdivisions, stops, that are often tied to development scattered in all corners of a metropolis, regulations and zoning codes. Buffalo, became the dominant built form instead. New York, for example, allows specific In many ways, TODs aim to restore uses with specific FAR and setback many of the features of yesteryear’s requirements in its “transit station zoning cityscapes—comfortable and enjoyable district.” Mountain View, California, has streetscapes, vibrant and interactive adopted a 2,000-foot radius around rail public spaces, and an assemblage of land stations to circumscribe TOD, applying uses that invite people to stroll, linger, fairly permissive zoning standards within and interact with each other. In his the sphere in hopes of leveraging new recent report, The Returning City: investments. Historic Preservation and Transit in the Age of Civic Revival, Dan Costello et Comparatively few redevelopment al. comment that the recent spurt in agencies, MPOs, or state DOTs surveyed literature and considerable press given had formally adopted TOD definitions. to TOD seems to suggest that there is One higher-level agency that has taken a something different and unique about leadership role in promoting and this approach to urbanism and community marketing the TOD concept is the design than in years past. They remind

7 us that contemporary TOD borrows a form of TOD that is project-specific heavily from the past: and takes place either on or adjacent to transit-agency land. The highly visible ‘neo-traditional’ success stories have led to the The distinction between TOD and joint notion of TOD as a new idea. In development was described in the fact, new TOD developments following way in the questionnaire sent promote transit use through time- to transit properties for this research: honored strategies to create density and mixed uses, income diversity, and pedestrian-supportive Transit joint development is design.... The transit villages that distinguished from TOD mainly by came of age in the late 19th century being tied to a specific real-estate exhibited all the characteristics project, venture, or brokered deal modern TOD proponents describe and involving the direct as ideal for today, including a participation of a public entity, often coherent transportation pattern that a transit agency, in revenue streams worked within each transit village and sometimes ownership. Joint at the pedestrian scale and development often occurs on a multiplied efficiently throughout transit agency’s property or in its air corridors and regions, connecting rights; however, it can also occur neighborhoods and suburban towns on nearby private land if an to the urban core via public improvement is physically or transportation.5 functionally integrated with a transit facility. Joint development at transit One must also be careful not to cast stations includes air-rights development, ground-lease TOD purely in physical determinist arrangements, station interface or terms. TOD is not simply an assembly of connection-fee programs, and other buildings around transit nodes. It is also initiatives that promote real-estate about community and neighborhoods. development at or near transit To some observers, TOD is partly about stations to the mutual benefit of building social capital—strengthening public and private interests. the bond between people and the communities in which they live, work, Despite this effort to distinguish the two socialize, and recreate. This is a side enterprises, it is clear that most transit benefit, however. Mainly, the aim is to professionals lumped them together. create settings which prompt people to Only 9 of the 90 transit-agency drive less and ride public transit more. respondents indicated that their organizations had adopted a definition Joint Development: What Is It? of joint development. Take, for example, the Washington Metropolitan The distinction between TOD and joint Area Transit Authority (WMATA), a development is not always clear, and pioneer in the practice of transit joint quite often survey respondents from development. WMATA defines joint transit agencies (and other stakeholder development as: “a creative program groups) used the terms interchangeably. through which property interests owned In this study, joint development is and/or controlled by WMATA are treated as a subset of TOD—specifically, marketed to office, retail/commercial,

8 recreational/entertainment, and Several survey respondents said that residential developers with the objective their agencies have adopted the FTA’s of developing transit-oriented definition of joint development. The development projects.”6 WMATA FTA’s web site offers a generic practices what it preaches. Between definition: “joint development involves 1970 and 2002, WMATA formally the common use of property for transit entered into 38 joint development and non-transit purposes.”8 More projects in the District of Columbia and specific is the language in FTA’s bi-state area, more than any transit Circular 9300.1 for capital grant agency in the United States. The sum applications: “FTA encourages value of these ventures has exceeded incidental uses of real property that can $2.5 billion. Collectively, these raise additional revenues for the transit projects—everything from air-rights system or, at a reasonable cost, enhance leases and land rents to station system ridership. FTA approval is connection fees—yield the agency required for these incidental uses of real some $6 million in annual revenues. property which must be compatible with Currently, the most remunerative the original purposes of the grant.”9 This initiatives involve air-rights and ground provision has been interpreted to mean leases at the Bethesda, Ballston, and that transit agencies can sell land White Flint Stations. holdings financed by federal grants without having to return proceeds as San Francisco’s Bay Area Rapid Transit long as the grantee retains control over (BART) District, also active in joint projects, and funds are used to shape development, adopted the following communities being served by transit.10 joint development definition in 1984: Goals and Objectives In the broadest sense, it [joint development] represents active Given the definitions above, what are the cooperation between the public and goals and objectives that have been set private sectors in undertaking real for TODs and joint development? Open- estate ventures which either ended survey responses from the five physically connect to or functionally public-sector stakeholder groups shed support the transit facility. For the light on this question. purposes of this policy, the term ‘joint development’ is also meant to cover those value capture TOD Goals mechanisms aimed at ensuring that the public shares in the benefit Increasing ridership was at the top of the which accrues to the private sector list of TOD goals identified by transit- (property owner/developer) because agency respondents, representing one- of improved access to a regional fifth of all goals stated (see Figure 1.1). transit facility.7 The next most frequent set of goals identified by transit agencies was Between 1984 and 2003, BART has financial in nature. This set of goals entered into eight joint development included promoting economic agreements, mostly in built-up areas of development (and job growth) and the cities of San Francisco and Oakland. raising revenues for transit properties.

9 Increase Ridership 20.0%

Promote Economic Development 15.6%

Raise Revenues 13.3%

Enhance Livability 11.1%

Widen Housing Choices 8.9%

Private Development Opportunities 6.7%

Improve Safety 4.4%

Share Construction Costs 4.4%

Reduce Parking 4.4%

One-Stop Center/Fare Outlet 4.4%

Improve Intermodal Integration 2.2%

Enhance Pedestrian Access 2.2%

Improve Air Quality 2.2%

Put Property on Tax Rolls 2.2%

0% 5% 10% 15% 20% 25% 30% Percent of Total Stated Goals Figure 1.1. Relative Frequency of Stated Transit-Agency Goals for TOD Projects.

Next in frequency were objectives that projects. Predictably, increasing are more social in nature, such as revenues—at the farebox (from enhancing quality of life and widening ridership) and from direct lease housing choices for consumers. A few payments—is what motivates most transit agencies supported TOD to transit operators to pursue joint create private real-estate opportunities. development. After fiscal objectives, Respondents from local government and transit-agency representatives identified redevelopment agencies cited similar a host of societal reasons why joint TOD goals. They emphasized the role of development is important. Among these TOD in promoting affordable housing, broader societal objectives, ones related stimulating economic development, and to the economic well-being of cities—in revitalizing declining neighborhoods. terms of spurring private investments and redevelopment—topped the list. Joint Development Goals Some respondents also emphasized the aesthetic role of joint development in As with TOD, transit-agency respondents creating secure and active civic spaces, were asked to list the goals for providing needed in-neighborhood implemented joint development facilities like bike paths and showcasing

10 architecturally integrated and well- implementation, including those related designed public and private buildings. to goal formulation and visioning, are taken up in Chapter 6. Unanimity Versus Pluralism Summary A recent assessment of TOD across the United States, drawn from interviews TOD continues to attract interest as a with practitioners and site-specific tool for promoting smart growth, workshops, argues that the absence of a leveraging economic development, and universal working definition of TOD catering to shifting market demands and hampers the ability to set agreed-on lifestyle preferences. This report, based goals and therefore to gauge success. on a combination of stakeholder survey The authors write: responses, interviews, and in-depth case studies, paints a national portrait of Because of the lack of clarity in the contemporary TOD practice in the definition of TOD, legitimate United States in its many shades and disagreements about what might colors. constitute good TOD, and diverging priorities and interests, actors may TOD is widely defined as compact, bring different, and sometimes mixed-use development near transit contradictory, goals to the table.11 facilities with high-quality walking environments, not necessarily at the On its web site, the recently formed expense of automobile access. Joint Center for Transit-Oriented development is a form of TOD that is Development further echoes this view: often project specific, taking place on, “There is no clear definition of TOD or above, or adjacent to transit-agency agreement of desired outcomes, and property. Recent FTA policy promotes hence no way of ensuring that a project joint development by allowing transit delivers these outcomes.”12 agencies to use incidental property, even if purchased with federal funds, Plurality of interests and perspectives can for private real-estate projects that be both a strength and a liability in the support broader community pursuit of TOD. The marketplace, be it development objectives. for real estate, places to live, or widgets, is based on the very principle of variety The primary aim of TOD and joint and choice. A project next to a rail stop development are to boost ridership and, that is belittled as too automobile-centric relatedly, increase revenues. Community in its design in some camps might stretch economic development and broader the limits of what is perceived as smart-growth agendas are secondary “comfortable” and politically feasible in objectives. others. The breadth of perspectives on what constitutes a TOD “success story” Notes is addressed throughout this report, but particularly in the coverage of various 1 While surveys were sent to the full population stakeholder viewpoints in Chapters 3 of U.S. transit agencies (at least those who through 5. Impediments to TOD were members of the American Public

11 Transportation Association), for other groups design considerations, creative financing representative samples were drawn. A true approaches, and impacts of public policies). random sample format was not used in part 3 M. Leccese, “Will T-Rex Meet TOD?” because of the effort to target surveys to large Urban Land, Vol. 62, No. 5 (2003): 86. metropolitan areas, especially those with rail transit systems, where TOD is known to exist 4 According to the 2000 census, the mean in some form, such as the Washington (D.C.) number of motor vehicles per household Metropolitan Area, the San Francisco Bay in California was 1.79. This is higher than Area, metropolitan Atlanta, the Dallas-Ft. the national average of 1.68. (Census Worth metroplex, and the Philadelphia-New Transportation Planning Package 2000 Profile Jersey-New York axis. To ensure a balance of Sheets, http://transportation.org/ctpp/home.) responses from smaller areas that operate bus 5 D. Costello, R. Mendelsohn, A. Canby, and services only, random samples of local J. Bender, The Returning City: Historic governments, redevelopment agencies, and Preservation and Transit in the Age of Civic MPOs in areas with regional populations Revival (Washington, D.C.: Federal Transit under 200,000 were selected from master Administration, National Trust for Historic lists of these organizations. Preservation, 2003), 10. 2 Open-ended, in-depth interviews were 6 Washington Metropolitan Area Transit conducted among appropriate local Authority, WMATA Joint Development individuals for each case study. Besides Policies and Guidelines (Washington, D.C.: obtaining relevant information on the “what,” WMATA Office of Property Development “who,” “why,” “when,” and “where” of TOD and Management, February 2002). and joint development, efforts were made to 7 elicit information from the perspectives of Bay Area Rapid Transit District, “BART interviewed stakeholders on the following Joint Development Policy” (Oakland, topics: goals and objectives for TOD; the California: BART, 1984). presence of local or regional plans or policy 8 http://www.fta.dot.gov/. visions regarding TOD; identification and 9 description of major TODs and joint Federal Transit Administration, FTA Circular developments; impacts, performance, and 9300.1, Capital Grant Program: Application outcomes (and the degree to which goals and Instructions (Washington, D.C.: 1997). objectives have been achieved); tools applied 10 Federal Register Notice, FTA Policy on and incentives introduced to promote and Transit Joint Development, Vol. 62, No. 5 leverage TOD (as well as interviewees’ (March 14, 1997) pp. 12266–12269. perceptions on how effective these tools and 11 D. Belzer and G. Autler, Challenges to incentives have been); approaches to Implementing Transit-Oriented Development institutional coordination in promoting TOD; (Las Vegas, New Mexico: Great American marketing and outreach initiatives (successful Station Foundation, 2002). and unsuccessful); major impediments to the formation of TODs; and other issues (such as 12 See http://www.ReconnectingAmerica.org/ impacts of park-and-ride lots on TOD, urban tod_to_scale.htm.

12 Chapter 2

The Breadth and Scope of U.S. TOD and Joint Development

TOD Activities served cities. The San Francisco Bay Area has the most identified TODs, A wide array of TOD currently exists served by heavy-rail (BART), across in the United States. Table 2.1 commuter-rail (Caltrains and the Capitol lists the TOD projects identified by Corridor), and light-rail (Santa Clara surveyed stakeholders, starting with Valley and San Francisco Municipal TODs oriented to rail followed by bus- Railway [MUNI]) systems. Other based ones and organized by numbers of national TOD leaders are the projects in each metropolitan area. Most Washington (D.C.) Metropolitan Area, TODs on the list were identified by Portland (OR), Atlanta, and Dallas. The survey respondents, but known TODs list for pro-TOD cities like Portland documented in the literature are also could be expanded if smaller-scale shown. Many more TODs are in various projects were included. As discussed in stages of planning and development; Chapter 17, the Portland area has those listed in Table 2.1 were on the witnessed a considerable amount of ground or substantially developed as of high-density infill projects within late 2002. walking distance of light-rail stations, like 172nd and East Burnside and the In all, well over 100 TODs were Oneota Townhomes in the Greshman identified. TOD designations, of course, area and the Westshore Apartments, are quite subjective: one person’s TOD Vandalay Arms, and Hazelwood may be viewed by others as little more Apartments in the city of Portland. Many than an office building with suburban infill projects in Portland are also found parking ratios that happens to be near a on active bus corridors, like Irvington train stop. Table 2.1, moreover, is not a Place, Hollywood Townhomes, complete inventory because not all transit Macadam Village, and Pearl Court agencies, local and state governments, and Apartments. other surveyed groups responded to the survey. Thus, the list should be viewed as Many U.S. TODs are situated outside of illustrative of the types and geographic central cities, in newer and older suburbs distributions of TODs found in the United alike. Some TODs, notably the Rosslyn- States although not necessarily complete. to-Ballston axis and Jefferson Davis Figure 2.1 shows that the largest numbers Corridor (Pentagon and Crystal City of TODs on the list were served by heavy- areas) in Northern Virginia, are quite rail systems, followed by light rail, dense, featuring high-rise clusters of commuter rail, bus, and ferry. office towers, retail shops, housing, entertainment, and civic uses (see The majority (more than 100) of the Chapter 12). Since 1960, over 98% of listed TODs are located in large rail- office and retail development and 95%

13 Table 2.1. Existing TODs Identified by Survey Respondents or from Literature Review, Late 2002 Metropolitan Areas: RAIL TODs Descriptions & RAIL/BUS AGENCIES San Francisco Bay Area: Bay Area * Concord BART * Mixed-use office & housing Rapid Transit (BART) District * Pleasant Hill BART * Mixed-use office, hotels, housing * Walnut Creek BART * Predominantly office with some retail * Rockridge BART * Mixed-use housing, office, retail * Daly City BART * Mixed-use office, retail, housing * El Cerrito del Norte BART * Mixed-use housing and retail * Berkeley BART * Traditional downtown with office & retail * Lake Merritt BART * Office, educational, housing, modest retail * Fruitvale BART * Mixed office, retail, housing, services * Hayward BART * Mixed housing, retail, city hall * Fremont BART * Mixed office, medical, housing * Embarcadero BART corridor * Dense downtown of office, retail, hotels, (downtown San Francisco) housing, government * 16th/Mission BART * Mixed-use retail & housing * 24th/Mission BART * Mixed-use retail & housing * Colma BART * Mixed-use retail & housing

San Francisco/San Mateo/Santa * Mission Bay (San Francisco) * Mid-high rise residential/mix use Clara County Axis: Caltrain, * Bay Meadows (San Mateo) * Mixed-use development Peninsula Corridor Joint Powers * The Crossings (Mountain View) * Townhouses, neo-traditional streets Board, San Francisco Municipal * Redwood City * City Center, affordable housing, & retail Railway, San Mateo County * San Mateo downtown * Traditional rail-served center city Transit District

Santa Clara County: Santa Clara * Moffett Park (Sunnyvale) * Office cluster Valley Transportation Authority * Ohlone-Chynoweth (San Jose) * Compact housing, retail center, civic uses (VTA) * Almaden Lake Village (San Jose) * Compact housing & services * Northside Industrial district * High-tech office, commercial, housing

San Jose-Oakland-Sacramento: * Davis Station * Nodal, walking-friendly development Capitol Corridor Joint Authority * Martinez Station * Traditional downtown undergoing redevelopment * Emeryville Station * Adaptive reuse/mixed housing & office

Washington, D.C.-Maryland- * Silver Spring Metro (MD) * Redevelopment of urban core Virginia: Washington * Bethesda Metro (MD) * Mixed office, hotel, restaurant node Metropolitan Area Transit * Grosvenor Metro (MD) * Housing & commercial node Authority (WMATA), * Twinbrook Metro (MD) * Office, retail, housing, hotel infill Montgomery County Transit * Gallery Place-Chinatown (D.C.) * Urban mid-rise office, retail, housing * White Flint (D.C.) * Mixed housing & retail uses * Rosslyn (VA) * High-rise office, retail, housing * Courthouse (VA) * Major mixed-use development * Ballston (VA) * Office, retail, housing, hotel, civic uses * Clarendon (VA) * Office, retail, housing node * Virginia Square (VA) * Office, retail, housing, hotel uses * Pentagon City (VA) * Mid-high rise office, retail, housing, hotel * Crystal City (VA) * Office, retail, housing, hotel node

14 Table 2.1. (Continued) Metropolitan Areas: RAIL TODs Descriptions & RAIL/BUS AGENCIES Portland, Oregon: TriMet * Orenco Station * Mixed housing, town center * LaSalle Apartments * Compact housing & ground-floor retail * Greshman Civic Neighborhood * Retail, housing, community uses * Russellville Commons * Large-scale apartment complex * Center Commons * Mixed-income housing development * Stadium Station Apartments * Mid-rise mixed housing & retail * Collins Circle * Mid-rise housing & ground-floor retail * Liberty Centre * Office, retail, plaza development * Buckman Heights * Housing & retail with carsharing

Atlanta: Metropolitan Atlanta Rapid * Georgia State Station * State of Georgia Floyd Office Towers Transit Authority (MARTA) * North Avenue Station * Office concentration, with retail * BellSouth Center * Office tower with auxiliary buildings * Midtown Station * Office concentration, with retail * West downtown area * Entertainment/office/retail area * Decatur Station * Restaurant/entertainment district * Lindbergh City Center * Office, retail, multifamily housing

San Diego: Metropolitan Transit * America Plaza * Downtown office, shops, art museum Development Board (MTDB) * Rio Vista West * Mixed housing & neighborhood retail * Hazard Center * Townhouses, office, retail * Uptown District * Bus-oriented housing & retail * La Mesa Village Plaza * Condominium, offices, retail * Village of La Mesa * Large-scale apartment development * Mercardo at Barrio Logan * Mixed housing and retail center

Los Angeles: Metropolitan Transit * Hollywood/Highland * Retail, entertainment, theater complex Authority (MTA), Metrolink, * Pine Court (Long Beach) * Vertically mixed retail, office, housing Antelope Valley Transit Authority * Holly Street Village (Pasadena) * Apartment & ground-floor retail * North Hollywood Arts District * Mixed-use bus transit village * Lancaster Metrolink * Mixed-use development * Montage at Village Green (Sylmar) * Mixed single-family housing

Dallas: Dallas Area Rapid Transit * Mockingbird Station * Mixed office, retail, housing (DART) * Southside on Lamar * Mixed-use development * Galatyn Park (Richardson) * Housing with retail * Plano Transit Village * Traditional redeveloped downtown * Westside Village * Mixed-use development * Cedars Station * Apartments & ground-floor retail

Chicago: Regional Transit * Evanston-Davis Street * Dense residential, retail, entertainment Authority of Northeast Illinois, * Marion Street Station * Housing & retail near mall Pace Suburban Bus, Metra * Arlington Heights Station * Dense residential, retail, entertainment Railway, Chicago Transit * Riverdale Metra * Traditional mixed retail area Authority * Woodstock Metra * Mixed housing and retail * Franklin Park * Traditional neighborhood

New York Suburbs: Metro North * Mount Vernon Station * Retail, hotel, sports arena * Ossining Station * Mixed residential, retail project * New Rochelle Station * Intermodal center in traditional downtown * Yonkers Stations * Retail, office, restaurant, housing * White Plains/Bank Street * Housing, office, hotel development Commons

Baltimore: Maryland Transit * Owings Mills Metro * Converting to compact, mixed-use center Administration * Cultural Center Light Rail Station * Symphony Center/State office complex * Lexington Market Metro * Urban revitalization zone (Table continues next page) Table 2.1. (Continued)

Metropolitan Areas: RAIL & RAIL/BUS AGENCIES TODs Descriptions Denver: Regional Transit District * Englewood City Center * Compact, mixed-use development * I-25/Broadway * Mixed-use area poised to redevelop * Greenwood Village * Traditional mixed-use center

Seattle: Seattle Metro * Overlake (Redmond) * Rental housing & services * Northgate North * Retail, apartments, park-and-ride stalls * Renton Transit Center * Apartments & intermodal center

New Jersey: New Jersey Transit * Rutherford Boiling Springs * Mixed-use development * South Orange Station * Mixed-use redevelopment

Salt Lake City: Utah Transit * Delta Center * Mixed office, commercial, civic Authority * 4500 South Station * Compact, pedestrian-friendly setting

Miami: Miami-Dade Transit * Dadeland South * Office, retail, hotel node * Dadeland North * Concentrated retail

Sacramento: Sacramento Regional * Aspen Neighborhood, West Davis * Medium-density housing Transit * Butterfield Station * Office development

Cleveland: Greater Cleveland * Tower City Center * Redeveloped office, retail, hotel complex Regional Transit Authority * Shaker Square * Renovated housing & retail, traditional

St. Louis: Bi-State Development * Cupples Station * Office, hotel, entertainment, sports center Agency Metropolitan Area: BUS AGENCIES/OTHER Charlotte Area Transit System * South End * Historic Trolley upscale neighborhood with popular retail/entertainment district

Delaware Transit Corporation * Wilmington Station * Downtown TOD near rail station

Orange County Transportation * Buena Park * Housing near Metrolink Authority

Everett Transit, Washington * Everett Station * Multimodal public-private partnered development * Hewitt Avenue/Westmore * Traditional neighborhood with transit

Triangle Transit Authority * Triangle Metro Center * Dense, mixed-use development

Jacksonville Transportation * Riverside * Marketplace shopping in historic Authority neighborhood

Dayton Regional Transportation * Schuster Arts Center * Cultural mixed-use center Authority

Rock Island County Metropolitan * Centre Station/John Deere * Offices, hotel, convention center at bus Mass Transit District Commons transfer station

Kitsap Transit, Washington * Bremerton Center * Downtown ferry terminal * Baimbridge Island Transfer Center * Traditional downtown setting Sources: Survey responses; T. Parker, G. Arrington, M. McKeever, J. Smith-Heimer, Statewide Transit-Oriented Development Study: Factors for Success in California (Sacramento: California Department of Transportation, 2002); R. Bernick and R. Cervero, Transit Villages for the 21st Century (New York: McGraw-Hill, 1997); various web sites and local sources.

16 Heavy Rail 37.4%

Light Rail 31.3%

Commuter Rail 21.8%

Bus 7.8%

Ferry 1.7%

0% 10% 20% 30% 40% 50% Percent of TODs Figure 2.1. Distribution of Listed TODs by Type of Transit Service.

of housing additions in Arlington County respondents from smaller communities. 1 have been within a ⁄2 mile of Metrorail Some small-city TODs are organized stations: 29.7 million square feet of around intermodal transfer facilities. office space, 4 million square feet of Several TODs in the state of Washington retail, and 26,500 residential units in all.1 are served by passenger-ferry ports. Outside of the Washington (D.C.) Chapter 16 provides several examples of Metropolitan Area, however, the typical bus-based TODs in Colorado, and TOD is a small- to moderate-scale mixed- Chapter 11 discusses ferry-oriented use development with slightly above- developments in Northeast New Jersey. average densities (e.g., mid-rise offices with ground-floor retail, residential Although not shown in Table 2.1, quite a townhouses and condominiums in the few TODs were identified by survey range of 20 to 30 dwelling units per respondents as being in various stages of residential acre, a scattering of construction and development. Listed restaurants with entertainment uses, below are some metropolitan areas that occasionally a hotel or two, and often are actively pursuing new TODs and civic spaces and buildings like plazas some of the TODs that are beginning to and libraries. Survey respondents from take shape in each: the New York City Metropolitan Transit Authority and San Francisco MUNI did • Seattle: Beacon Hill, MLK@Holly, not list TODs because, they noted, their Jefferson@Ballard, Othello, “entire city met the definition of TOD.” Edmunds, The Gilmore; The same can largely be said for other • Portland: Cascade Station, Sunnyside cities with century-old rail services like Village, Lexington Park, Richmond Chicago, Philadelphia, and Boston. Place, The Yards at Union Station; • San Juan: Sagrado Corazon Station, While TODs exist mainly in large rail Hato Rey Station; cities, a fair number of predominantly • Santa Clara County: Whisman bus-based TODs were identified by Station, Japantown;

17 • Metropolitan Washington (D.C.): commercial boulevard, mid-rise New York Avenue, Rhode Island housing, and civic uses in a Avenue, Twinbrook, Court House, 2.2-square-mile area served by U Street/African American Civil four Metro subway stations in the War Memorial/Cardozo Station; Hollywood-Wilshire neighborhood • New Jersey: South Amboy, (Map 2.1).2 See Chapter 19 for more Morristown, Hamilton, Rahway, discussions of TOD activities in South Orange, Rutherford; Southern California. • St. Louis: Emerson Park, Swansea, Belleville, Maplewood; • Houston: The city of Houston • San Francisco-Oakland: West Dublin, anticipates several TODs will take Richmond, Ashby, McArthur; form once the Main Street Corridor • Denver: I-25/Broadway, Union light-rail system is completed. Station; • Sacramento: Folsom East, South • Raleigh-Durham: The Triangle Line Extension; Transit Authority’s diesel multiple • Miami: Martin Luther King, Jr. unit (DMU) system, currently under Station, Santa Clara, Okeechobee construction, calls for several TODs Station; along the axis connecting downtown • Cleveland: W. 65th St./EcoVillage; Durham to downtown Raleigh. Town • Charlotte: Huntersville, Cornelius; centers designed around rail stops are • Salt Lake City: 7200 South, 10000 planned for the Cary, 9th Street/East South; and Campus, and Alston Avenue stations. • Dayton: Wright Plaza • Minneapolis: Recently, the city of Additionally, a number of transit Minneapolis and the Metropolitan properties from smaller cities identified Council have joined forces to TODs that are on the drawing boards, prepare TOD plans for four station including Lane Transit District in areas along the Hiawatha Corridor. Eugene, Oregon (Walnut Station, Glenwood), Kenosha Transit in Joint Development Projects Kenosha, Wisconsin (Harborpark), and Peoria Mass Transit in Peoria, Illinois How prevalent is transit joint (Hope IV-Riverwest). development—private development on, above, or adjacent to a transit agency’s The notion of TOD as nodal development property—in the United States today? is also being recast. Today, a growing A 1990 study counted 117 projects number of cities have slated entire nationwide.3 There appear to be at least corridors for TOD, with rail-served this many today, if not more. districts stretching over dozens of city blocks, including Respondents from 33 of the 90 surveyed transit properties (37%) indicated that • Los Angeles: The city of Los their agencies currently have some form Angeles has prepared a specific plan of joint development at stations or stops. for the Vermont/Western TOD, Joint development projects were self- aimed at preserving and expanding a identified according to each agency’s

18 Map 2.1. Vermont/Western Transit-Oriented District, City of Los Angeles, 2002. Source: City of Los Angeles, Vermont/Western Transit Oriented District Specific Plan, Ordinance No. 173,749 (March 2001).

19 own definitions of what constitutes joint leases (mostly office space) above rail development (see Chapter 1). Most stations are Ballston in Arlington transit agencies (22) with joint County, Great American Plaza in San development operated rail services; still, Diego, Union Station in Los Angeles, nearly a third of agencies with some form Datran Center at the South Dadeland of joint development operated buses only. Station in Miami, and Resurgens Plaza at Atlanta’s Lenox Square Metropolitan Tables 2.2 and 2.3 list and describe joint Atlanta Rapid Transit Authority development projects that were cited by (MARTA) Station (see Text Box 2.2). respondents from rail and bus agencies, Los Angeles’s Metropolitan respectively.4 Transit properties in fast- Transportation Authority (MTA) growing areas like greater Washington presently receives nearly $3.5 million D.C., Atlanta, Dallas, San Diego, and the annually in air-rights lease revenues. San Francisco Bay Area have been particularly aggressive in pursuing joint Over 25 rail joint development projects development. Washington’s WMATA is involve the sharing of operation costs in a league of its own when it comes to (e.g., ventilation systems, utilities, and joint development, having engaged in parking facilities). WMATA’s Farragut 30 projects of varying sizes and scopes West Station, for example, taps into the since its inception in the late 1970s, International Square office and retail including Bethesda Metro Center, project’s heating and air conditioning currently the nation’s biggest joint system. At the Bethesda Station, heat development moneymaker, earning the generated by the transit system is being agency some $1.6 million in annual recycled into an integrated mixed-use lease revenue (see Photo 2.1). Two up- office-retail-housing project. and-coming joint development projects, at the White Flint and New Carrollton Sharing of construction costs Stations, will be the agency’s biggest (e.g., building foundations, parking and most remunerative joint facilities, and construction staging areas) development ventures over the coming by transit agencies and adjoining private decade (see Text Box 2.1). development projects has occurred over 20 times nationwide. Developer-financed Most joint development projects use a bus bays and drop-off spaces at the variety of tools to spread risks and Van Ness and Bethesda Stations, for rewards. Forty of the 103 projects (39%) example, saved WMATA an estimated listed in the two tables have pursued $2.1 million (1982 dollars) in multiple joint development initiatives. construction costs. Besides air and The most common type of joint ground leases, construction cost savings development is leasing of ground space has been the only other form of joint and air rights, constituting 50 and 30, development adopted by bus agencies to respectively, of the sampled joint any notable extent. Still, rail agencies development projects. Figure 2.2 shows have been far more aggressive in seeking ground leases to be far more common out cost-sharing deals, especially east- among rail properties. Besides the coast transit agencies like WMATA Bethesda Station mixed-use project, and New York City’s Metropolitan other notable U.S. examples of air-rights (continues on page 29)

20 Table 2.2. U.S. Rail Joint Development Projects, Transit-Agency Responses Agency/Project Type(s) Primary Land Use(s) Heavy-Light Rail Properties

WMATA (Washington D.C.) Ballston AR, GL, SC, SO Mixed Commercial–Residential Bethesda AR, GL, SC, SO Mixed Commercial–Residential Clarendon SCF Office Columbia Heights GL Residential-Retail Court House GL Office-Retail Dupont Circle GL Retail Farragut North GL, SCF Office-Retail Farragut West SCF, SC, SO Office-Retail Fort Totten GL Residential-Retail Franconia - Springfield GL Retail Friendship Heights SCF, GL Mixed Commercial Gallery Place SC, SO Mixed Commercial–Residential Greenbelt SC, SO Mixed Commercial–Residential Grosvenor GL, SC Mixed Commercial–Residential Huntington GL, SCF Mixed Commercial–Residential McPherson Square GL Office-Retail Metro Center GL, SCF Office-Retail Minnesota Avenue SC, SO Office-Retail Prince George's Plaza GL Mixed Commercial–Residential Rhode Island Avenue GL Residential-Retail Shaw - Howard University GL, SO Mixed Commercial–Retail Silver Spring GL Mixed Commercial–Residential Takoma SC Residential-Retail Twinbrook (East & West) GL Mixed Commercial–Residential U Street SC, SO Mixed Commercial–Residential Union Station (Connection) SCF Retail Van Dorn GL Residential-Retail Van Ness GL Office-Retail Western Bus Garage GL Residential-Retail Wheaton GL, SC Mixed Commercial–Residential

BART (San Francisco) Fruitvale AR, GL, SO, EP Mixed Commercial–Residential Castro Valley GL Mixed Commercial–Residential Richmond SC, SO, EP Residential-Retail-Civic Oakland: 12 St./Civic SCF Mixed Commercial (office-retail-other) Oakland: 19th St. SCF Mixed Commercial (office-retail-other) San Francisco Embarcadero SCF Mixed Commercial (office-retail-other) San Francisco Montgomery SCF Mixed Commercial (office-retail-other) (Table continues next page)

21 Table 2.2. (Continued) Agency/Project Type(s) Primary Land Use(s)

BART (San Francisco) (cont.) San Francisco Powell SCF Mixed Commercial (office-retail-other)

MARTA (Atlanta) Lindbergh City Center GL Mixed Commercial (office-retail-other) Abernathy GL Mixed Commercial (office-retail-other) Medical Center GL Mixed Commercial (office-retail-other) One Atlanta GL Office Resurgens Plaza AR Office

DART (Dallas) Mockingbird AR, SCF, NPC, SO Mixed Commercial–Residential Southside on Lamar NPC, SO Mixed Commercial–Residential Galatyn Park NPC, SC, SO Mixed Commercial–Residential Plano IA, BAD, SO Mixed Commercial–Residential City Place SCF, BAD, IA Mixed Commercial (office-retail-other)

MTDB (San Diego) American Plaza AR, NPC, SO Mixed Commercial (office-retail-other) Imperial-12th Street NPC, SO Mixed Commercial (office-retail-other) Grossmont GL, SO Retail Barrio Logan EP Residential La Mesa Village EP Mixed Commercial–Residential

MTA (Los Angeles) Union Station Gateway AR, SCF, BAD, SC, SO Mixed Commercial (office-retail-other) Grand Central Market AR, BAD, SO Mixed Commercial (office-retail-other) Hollywood/Highland AR, GL, SC, BAD, SO Mixed Commercial (office-retail-other) Pacific Court EP Mixed Commercial–Residential

TriMet (Portland) Arbor Vista EP Residential Collins Circle EP Mixed Commercial–Residential Gresham Central EP Residential

Maryland Transit Administration Cultural Center AR Civic-Entertainment Owings Mills AR Mixed Commercial (office-retail-other) Old Court Metro AR Residential

Cleveland Regional Transit Tower City GL, NPC Mixed Commercial (office-retail-other) Gateway Walkway AR Mixed Commercial (office-retail-other) CEOGC Headstart Daycare GL, NPC Mixed Commercial (office-retail-other)

22 Table 2.2. (Continued) Agency/Project Type(s) Primary Land Use(s)

Santa Clara Valley (CA) Sunnyvale: Moffet Park GL, NPC Office San Jose: Olhone-Chynoweth GL, NPC Mixed Commercial–Residential San Jose: Almaden GL, NPC Residential

Port Authority of Allegheny (PA) Castle Shannon Station AR Mixed Commercial–Residential Carnegie Station SCF Mixed Commercial (office-retail-other) Steel Plaza Station GL Retail

Southeastern Penn. Transp. Authority Gallery I & 11/Market East NPC Retail Suburban Stations NPC Retail

Miami-Dade Transit Dadeland South AR, GL, SC, SO Mixed Commercial (office-retail-other) Dadeland North AR, GL, SC, SO Mixed Commercial (office-retail-other)

Regional Transp. District (Denver) Englewood CityCenter SO Mixed Commercial (office-retail-other) Arapahoe Station EP Mixed Commercial (office-retail-other)

MUNI (San Francisco) Mission/Stuart Hotel GL Hotel

Commuter Rail Properties

Metro-North Railway Harrison GL, SC, SO Mixed Commercial (office-retail-other) Mt. Vernon AR Mixed Commercial (office-retail-other) Ossining NPC Mixed Commercial (office-retail-other) Port Chester SO Mixed Commercial (office-retail-other) Yonkers SC, SCF Mixed Commercial–Residential New Jersey Transit Morristown GL, SCF, NPC, BAD, SO Mixed Commercial–Residential

Key: AR=air rights lease; GL=ground lease; SCF=station connection fee; NPC=negotiated private contribution; BAD=benefit-assessment district; SC=construction cost sharing; SO=operations cost sharing; IA=incentive agreements (e.g., bonuses in exchange for improvements); EP=equity participation.

23 Table 2.3. U.S. Bus Joint Development Projects, Transit-Agency Responses Agency/Project Type(s) Land Use(s) Dayton Regional Transit Authority Wright Stop Plaza SCF Mixed Commercial (office-retail-other) Fifth Third Field SC Sports Facility Schuster Performing Arts Center SC Civic Facility Dayton Riverscape SC Recreation/Entertainment Use Dayton Aviation Heritage Park SO Recreation/Entertainment Use

Orange County Transp. Authority Santa Ana Transit Terminal AR Office

San Mateo County Transit (CA) Sequoia Station SC Institutional Colman GL Residential

San Antonio VIA Metro Transit Robert Thompson/Sunset Station GL Mixed Commercial (office-retail-other) Ellis Alley GL Mixed Commercial (office-retail-other)

Lane County Transit (Eugene, OR) Eugene Station GL Retail

Pace Suburban Bus (IL) General Transit Center GL Institutional

Foothill Transit (CA) Covina Transit Plaza SC, SO, EP Mixed Commercial (office-retail-other)

Kenosha Transit (WI) Harborpark GL Mixed Commercial (office-retail-other)

Kitsap Transit (WA) Bremerton Transportation Center AR Mixed Commercial (office-retail-other)

Peoria Mass Transit Authority (IL) Transit Center SC Daycare Facility

Rock Island MetroLINK (IL) Centre Station GL, NPC, SC, SO Mixed Commercial (office-retail-other)

Southwest Metro Transit (MN) Southwest Station NPC Mixed Commercial–Residential

Key: AR=air rights lease; GL=ground lease; SCF=station connection fee; NPC=negotiated private contribution; BAD=benefit-assessment district; SC=construction cost sharing; SO=operations cost sharing; IA=incentive agreements (e.g., bonuses in exchange for improvements); EP=equity participation.

24 Photo 2.1. Bethesda Metro Center: America’s Biggest Joint Development Moneymaker. The mixed-use project in downtown Bethesda, Maryland, was completed in 1985 and sits directly atop the Metrorail station, with direct connections to commercial office space and an adjoining civic plaza.

Type of Joint Development:

43 Ground Lease 7

19 Air-Rights Lease 11

25 Operations Cost Sharing 3

18 Construction Cost Sharing 7

19 Station-Connection Fee 1

13 Negotiated Private Contribution 2

6 Benefit-Assessment Districts 0

4 Bus Rail Equity Partnerships 1

1 Incentive Agreements 0

051015 20 25 30 35 40 45 No. of Transit Agencies Figure 2.2. Distribution of Joint Development Types Among Surveyed Transit Agencies.

25

WMATA’s Joint Development Ventures: Still Growing After 30 Years

Washington Metropolitan Area Transit Authority (WMATA) was one of the first transit agencies in the country to leverage real-estate development above and adjacent to its rail stations. For more than 30 years, the agency has been actively working with private developers, lenders, and other public entities to develop over 30 property sites in and around the nation’s capital.

WMATA’s joint development projects range from revenue-producing schemes (e.g., air- rights leasing and station-retail connections) to cost-sharing arrangements (e.g., shared use of heating systems and construction-cost co-venturing). Key to success was the formation, early on, of a real-estate division within the transit agency. With financial and institutional support provided by board members, WMATA’s real-estate office has over time amassed an impressive portfolio of land holdings, much of it purchased on the open market. Rather than waiting and reacting to developer proposals, WMATA’s real-estate office aggressively seeks out mutually advantageous transit joint development opportunities. WMATA generally executes long-term, unsubordinated ground leases with private developers and in a few cases has made fee-simple sales.

The agency’s top-performing and most impressive joint development project, the Metro Center in downtown Bethesda, features some 400,000 square feet of office space, a 380- room Hyatt Hotel, and 60,000 square feet of retail space that lies above or adjacent to the Bethesda Metrorail station. The project has spurred other nearby office, retail, and residential development within a walkable distance, including a popular nighttime restaurant, arts, and entertainment district. The air-rights lease at the Bethesda Station today generates $1.6 million annually in rents, the highest earnings for any single joint development project in the country. This sum will likely be eclipsed by the leased payments generated by the planned office-retail-residential project at the White Flint Station in Montgomery County.

Commercial-Retail Joint Development at Bethesda Metrorail Station

Text Box 2.1 WMATA’s Joint Development Ventures: Still Growing After 30 Years

The White Flint project is poised to be a colossal joint development undertaking. The 34-acre site adjacent to the station in North Bethesda has been leased by LCOR, Inc., a Pennsylvania developer. WMATA will receive $66 million from LCOR for the 55- year, long-term ground lease. The $625 million proposal for the site includes the construction of 1.2 million square feet of office space, 212,000 square feet of retail 1 space, and 1,400 high-rise apartments. Additionally, a ⁄4-block “tree-save” area has been designated to allow 50 mature trees and indigenous rocks to be preserved. It is estimated that the mixed-use development will generate over 6,500 additional daily Metro riders. The project is slated for completion some time between 2011 and 2013.

Another mega-project is slated for the New Carrollton Station, a joint venture between the state of Maryland, Prince George’s County, and WMATA. Plans call for the transformation of several parcels (47 acres in total) into a 2.1-million-square-foot, mixed-use project focused on the area’s Metrorail and Amtrak stations.

The proposal for the WMATA parcel calls for 1.17 million square feet of office space, 92,000 square feet of retail space, 30,000 square feet of restaurant space, and a 20- screen cinema. The state of Maryland parcel will hold an additional 200,000 square feet of office space, a 300-room hotel, 375 residential units, and a possible college or university facility. Additionally, two major pedestrian axes will connect the Metro/Amtrak station to the new mixed-use development.

The project’s success will depend on a close and effective working relationship among developers, construction firms, architects, real-estate professionals, and planners, in addition to public agencies. The anticipated benefits of the New Carrollton Station development include a boost in Metro ridership, increased tax revenues for the state and county, and the creation of new jobs in the area.

The developments at New Carrollton and White Flint are evidence of WMATA’s continued commitment to public transit and the communities that it serves.

Text Box 2.1 (Continued)

Large-Scale Air-Rights Joint Development Projects at U.S. Transit Stations. The top left photo shows Resurgens Plaza, a 400,000-square-foot office building constructed above MARTA’s north line tracks adjacent to the Lenox Station north concourse. When completed in 1989, the developer agreed to pay MARTA an annual rent of $120,000, with increases tied to the Consumer Price Index. In 2001, it added $177,000 to MARTA’s coffers. The top right photo shows the more than 4 million square feet of mixed-use space above the Ballston Metrorail subway station on what, prior to the late 1980s, was a major parking lot and bus staging area at the Orange Line terminus. Once freed from its use as an intermodal staging zone, the station area quickly emerged as the centerpiece of the Ballston redevelopment campaign. The bottom left photo shows a San Diego Trolley train entering the ground level of the 34-story Great American Plaza Tower, a 272-room hotel, restaurant, museum, and retail project at the Broadway and Kettner Transfer Station. The transit arcade that covers the Trolley station resulted from a partnership of the transit agency, the city redevelopment office and a private developer. The developer donated the land and built connecting passageways, and the regional transit operators contributed $1.2 million toward station construction. The bottom right photo is the Datran Center office towers, above and adjacent to the South Dadeland Station. Six acres of land were donated to build the 1 station in return for a 99 ⁄2-year air-rights lease with a guaranteed annual income of $300,000 going to the Miami-Dade Transit Authority.

Text Box 2.2 Transportation Authority. In New York been applied less frequently. Because of City’s case, cost-shedding as opposed to their greater institutional capacities and cost-sharing is perhaps a more planning resources, rail agencies are appropriate description; regardless, the more likely to negotiate monetary presence of a density bonus provision contributions with private developers makes this program potentially lucrative than are bus agencies. Santa Clara in the minds of many developers.5 Since Valley Transit Authority (VTA), for 1982, New York City has required example, negotiated with housing development sites within the Midtown developers to sell land used for parking Zoning District and adjacent to a subway for residential development, taking stair entrance to relocate the subway stair advantage of FTA’s new joint within the development lot as a development rulings that allow the precondition to building approval. agencies to keep the proceeds as long as Making a substantial pedestrian the development is supportive of transit passageway enhancement and major in its design and layout. Benefit- improvements to an adjacent subway assessment financing has been used by station can earn a developer up to a 20% the Los Angeles MTA to co-finance density bonus, a potential windfall in ancillary improvements around Red Line midtown Manhattan’s pricey commercial subway stations. Benefit assessments real-estate market (see Text Box 2.3).6 have also been used to pay for bus malls in downtown Minneapolis, Denver, and Station connection fees, another Portland. Minneapolis’s Nicollet common form of joint development, Mall/busway was the first application likewise tend to fall within the province of benefit-assessment financing in the of rail agencies. Also referred to in the transit field. Property owners paid 75% literature as station interface fees, they of the cost of financing the $3.8 million are especially popular with retail (1968 currency) bus-mall project developers since they can deliver transit in downtown Minneapolis in the riders (and potential shoppers) to the late 1960s. ground floors of connecting buildings (see Text Box 2.4). WMATA is also a Most transit joint development projects national leader in this arena. In the case in the United States are commercial in of the Friendship Heights Station, a nature. Figure 2.3 shows that rail and major retailer (Woodward and Lothrop) bus agencies have pursued different joint paid the agency a one-time fee of development land uses. Rail properties $300,000 (1982 currency) for the right to tended to focus on large-scale mixed-use connect to the station rotunda and also projects, most commonly commercial- paid for the design and construction of office and retail developments. Mixed the tunnel. This was followed by two residential and retail developments have other retail developers who paid tie-in also constituted a large share of rail joint fees of $737,000 and $775,000, development projects. In contrast, the respectively, plus annual rents, for their joint development projects of bus own connections to Friendship Heights. operators were more likely to be single or specialized uses like sports facilities, Among the surveyed transit agencies, entertainment centers, or daycare other forms of joint development have facilities.

29 New York’s Density Bonus Program

A good example of cost-sharing as a “win-win” proposition is New York City’s Density Bonus Program. Introduced in the 1980s, the program entitles the city’s planning department to grant FAR bonuses of up to 20% to new commercial developments in return for improvements made to subway stations and their entrances. This program not only offloads rehabilitation costs to the private sector but also shifts development to “ground zero” (i.e., directly above subway portals). Given Manhattan’s lofty real-estate prices, the prospect of being able to add several more floors to a mid- or high-rise building has made the program an attractive proposition to the development community. New York’s subway has long suffered from being perceived as an aging, unkempt underground facility. Historically, subway entrances have not been terribly attractive, sometimes appearing like an oversize sewer cap in the middle of a sidewalk. The density bonus program has sought to provide more “humane” and “civic” connections among the streetscape, the public realm, and the underground transit facility. To date, the majority of improvements have gone toward pedestrian circulation (e.g., passageway upgrades) although monies have also been used to remove barriers to accessibility for those with disabilities, enhance air circulation and natural lighting, and add beautification/ landscaping. The cost of the typical station-entrance improvement is around $10 million, monies that the cash-strapped New York Metropolitan Transit Authority would otherwise have to bear. Among the most recent examples of developers receiving density bonuses in return for multi-million dollar subway enhancements are midtown Manhattan (8th Ave. & W. 57th St., Lexington Ave & E. 53rd St., 3rd Ave. & E. 53rd St, 8th Ave. & W. 50th St) and Queens (Long Island City).

Upgraded Ground-Floor Subway Entrance and the Density-Bonused Worldwide Plaza Above It, 8th Ave. & W. 50th St., Manhattan

Text Box 2.3 New York’s Density Bonus Program

Enhanced Subway Entrance on 42nd St. Civic Plaza and Glass-Shielded Subway in Newly Refurbished Time Square Entrance at Lexington Ave. & E. 53rd St.

Spacious, Airy Subway Entrance on Property of the Density-Bonused Office Tower at 3rd Ave. & E. 53rd St., Manhattan

Text Box 2.3 (Continued)

31 Station Connections. Station interfaces or connections are one of the least expensive and potentially lucrative forms of joint development. Typically, a retailer or developer pays for the costs of a pedestrian tunnel that connects a concourse to the main level of an adjoining or nearby department store. It is a “win-win” proposition in that the transit agency benefits from being near so many shoppers (in the form of potential riders), and the retailer benefits from having transit riders walking through the ground-floor shops (and possibly purchasing an item or two). WMATA has been particularly ambitious in negotiating station-connection fees with retail developers at the busiest subway stations in the District of Columbia.

Text Box 2.4

Land Use: 36 Mixed Commercial 7

24 Mixed Commercial–Residential 1

18 Mixed Residential–Retail 0

6 Retail 1

4 Offices 1 Bus Rail

4 Residential 1

1 Civic/Entertainment Center 1

0 Recreation Facility 2

0 Sports Facility 1

0 Daycare Facility 1

051015 20 25 30 35 40 No. of Transit Agencies Figure 2.3. Distribution of Land Uses of Joint Development Projects Among Surveyed Transit Agencies. While joint development is pursued proposals (RFP) for joint development of mainly by large transit properties, a parking lot at the 7800 South Station instances were also found among smaller and is assessing the market potential of agencies. The Rock Island County converting land around the 7200 South Metropolitan Mass Transit District and 10000 South Stations to mixed-use (MetroLINK) in Illinois, for instance, has development. In San Juan, the Puerto jointly developed a bus transfer center Rico Department of Transportation and and mixed-use commercial center with a Public Works has issued RFPs for joint private developer. The Centre Station in development projects around six Tren John Deere Commons contains offices, a Urbano elevated train stations: Sagrado convention center, a hotel, a parking Corazon, Hato Rey, Roosevelt, structure, and various pedestrian Domenech, San Francisco, and Martinez amenities (Photo 2.2).7 The joint Nadal. Miami-Dade Transit has two development projects of many smaller notable joint development projects to its bus-only properties are often at major credit, at North and South Dadeland terminal facilities (e.g., Santa Ana Transit (which currently yield $800,000 in Terminal, Bremerton Transportation annual lease revenues), and is actively Center, and Corpus Christi’s mixed-use seeking to expand this amount transit center (Photo 2.3). considerably. The agency is currently seeking to enter into deals with private Some transit agencies have yet to enter interests to develop 11 agency-owned into formal joint development properties. Most impressive is the agreements but are actively planning to Coconut Grove Metrorail station for do so. Utah Transit Authority, for which the transit agency entered into a example, recently put out a request for lease agreement with a private developer

Photo 2.2. MetroLINK’s Centre Station at the John Deere Commons. The redevelopment project along the riverfront in downtown Moline, Illinois, is home to a Radisson Hotel, several restaurants, a pavilion, and the MARK, a 12,000-seat civic arena. The Centre Station intermodal facility, shown in the photo on the right, consists of a 12-bay bus staging area arranged in a sawtooth pattern at the grade level with an elevated bus transfer platform. The 4,000- square-foot structure contains office space and a multi-purpose retail lobby. Deere & Company participated in the financing of this $8.4-million project.

33 Photo 2.3. Corpus Christi’s Staples Street Bus Transfer Facility. Serving 14 bus routes and some 5,000 daily transit users, the transfer facility, built in a Spanish-style motif, features on-site retail offerings and involved public-private equity participation. The transfer center has become a veritable town square, featuring a weekly farmers market, food concessions, and 1,500 tiles hand painted by local residents and students. By all accounts, it has given bus transit a positive image in Corpus Christi. The transfer center was the recipient of the 1995 Presidential Design Achievement Award. to build a 19-story mixed-use retail and of enticing private capital to the residential project, a 19-story office neighborhood, no proposals were building, and a community supermarket received. In 2000, an unsolicited (see Photo 2.4). Miami-Dade Transit also proposal was received from Saint Agnes has high hopes for the Overtown/Arena Rainbow Village Development Metrorail station area that to date has Corporation, Inc., a not-for-profit seen few land-use changes. When an community development corporation, RFP was issued in the 1990s in hopes calling for a mixed-use office, retail, and

Photo 2.4. Planned Redevelopment for Miami- Dade Transit’s Coconut Grove Metrorail Station.

34 civic-use project that could yield more Vermont/Western district in Los than $14 million in rental payments over Angeles’s Hollywood area. Further, more the initial 30-year lease. (See Chapter 13 than 100 joint development projects today for further discussion of joint exist on, above, or adjacent to U.S. development in greater Miami.) transit-agency property. The most common joint development arrangements Two other agencies currently building are ground leases and operations cost- rail systems, Houston Metro and Triangle sharing. Most often, joint development Transit Authority, are actively seeking occurs at rail stations surrounded by a out joint development opportunities. As mix of office, commercial, and part of the Main Street light-rail corridor institutional land uses. However, program, Houston Metro is soliciting the examples of public-private joint- co-participation of private interests in venturing can be found among bus-only constructing facilities and building real- systems as well, normally in the form of estate projects on agency properties. joint intermodal transfer and commercial- To entice private investment along the retail space at central-city bus terminals. 16-station DMU rail system between Durham and Raleigh, the Triangle Notes Transit Authority has adopted WMATA’s approach to joint development, evaluating 1 Department of Community Planning, the development potential of agency- Housing and Development, Arlington owned land on an ongoing basis and County, Development in the Metro Corridors soliciting private-sector participation (Arlington County, Virginia, 2002). through an RFP process. 2 City of Los Angeles, Vermont/Western Transit Oriented District Specific Plan, Summary Ordinance No. 173,749 (March 2001). 3 R. Cervero, P. Hall, and J. Landis, Transit A rich mix of TOD is today found across Joint Development in the United States, the United States, and all indications are Monograph 42 (Berkeley: National Transit that TOD numbers and types will grow Access Center, Institute of Urban and in years to come. The practice of TOD in Regional Development, University of California, 1992). contemporary America is “alive and well,” not only in big rail cities but also 4 This is not an exhaustive list of current transit increasingly in places where only bus joint development projects in the United States but rather a representative coverage of services are offered—places not often recent-day initiatives. Most of the major associated with strong linkages between transit joint development deals known to transit and urbanism. have occurred over the past two decades are thought to be included in the list. Many More than 100 TOD projects currently smaller transit joint development deals from exist in the United States. They are found earlier times, involving fairly modest monetary exchanges, are known to exist and overwhelmingly in and around heavy-, are documented in the literature. For a fairly light-, and commuter-rail stations. While extensive coverage of transit joint TOD projects are typically nodal in form, development projects up to 1990, see TOD corridors have or are beginning to R. Cervero et al., 1992, op. cit. take shape, such as the Rosslyn-Ballston 5 New York City’s experiences are not listed in axis in Arlington County and the Table 2.2 because it is not joint development

35 in a true sense of public and private interests further discussions on New York City’s voluntarily pursuing a program as a “win- density bonus program, see R. Sandler, win” proposition. New York City’s program, “Private Development/Public Transit: Using in contrast, is mandatory, stipulated in the Transit’s Zoning Tools,” New York Affairs, zoning and permitting codes of special Vol. 7, No. 3 (1982): 114–120. purpose districts in Midtown Manhattan, 7 See http://www.gcmetrolink.com/services/ Union Square, Lower Manhattan, and centrestation.php. Long Island City Mixed Use District. 6 Over the past decade, the program was expanded to encompass three other areas: Photo Credit Union Square, Lower Manhattan, and Long Island City Mixed Use District. For Photo 2.3: Project for Public Spaces

36 PART 2

THE POLICY ENVIRONMENT

In the United States, TOD takes form in a complex, sometimes charged policy environment. While market pressures have a strong imprint on TOD, public policy initiatives can also exert considerable influence. Part 2 probes TOD’s policy environment in its many shapes and forms. Chapter 3 reviews the institutional setting of TOD, focusing on the roles of transit agencies, local and regional governments, state agencies, and the federal government. In-house policies, legislation, regulations, interagency collaborations, and other initiatives introduced by public-sector actors are examined. Chapter 4 looks at TOD implementation, beginning with the process of visioning and planning and moving on to discuss how various tools, like zoning and fiscal measures, are being used to leverage TOD. Chapter 5 shifts to a private-sector perspective, relying on interviews of developers and lenders involved with TOD projects. The chapter examines the market for TOD, factors that weigh in on the decision to build around transit stations, and approaches to private financing of projects. Chapter 6 ends Part 2 with a discussion of impediments to TOD implementation, particularly in the minds of builders and developers, and what might be done to overcome them. Chapter 3

The TOD Institutional Landscape in the United States

Institutional Setting are the developers, building associations, construction firms, and lending Given the many vested interests in TOD institutions that end up designing, and joint development outcomes, not financing, and building much of what surprisingly a complex and sometimes happens on land parcels in and around fractured institutional environment— transit stops. Not to be forgotten are the involving multiple jurisdictions, each with many nongovernmental organizations, its own agendas, boards, staffs, budgets, or NGOs, that have an active voice in and constituents—has evolved. Some TOD outcomes as well, including large transit properties have set up neighborhood associations, bicycle in-house real-estate departments to coalitions, and sustainable transportation negotiate joint development deals and advocacy groups. assigned planners to TOD oversight duties. Many rail-served municipalities Taken together, these vested interests have enacted zoning ordinances that allow form an institutional environment that for high-density, multi-use development more closely resembles a “marble cake” in neighborhoods surrounding stations. hierarchical model of governance—with In quite a few inner-city neighborhoods, interlocking agreements, checks and redevelopment agencies have seized on balances, and subtle chains of opportunities to assemble land using command—than the “wedding cake” eminent domain powers to build model taught in high school civics affordable housing near rail stops. courses. This has unavoidably created Moreover, some MPOs, such as those in roadblocks and impediments to TOD the Portland (OR), San Diego, and Dallas- implementation, but it has also served to Fort Worth regions, have embraced TOD democratize and infuse a certain degree as part of their regional smart-growth of accountability and fairness into the strategies, using pass-through federal process. This chapter draws upon transportation dollars to promote and stakeholder surveys, interviews, and other leverage transit-supportive development background information to characterize in rail-served communities. Even state the administrative, budgetary, DOTs have gotten into the picture, using collaborative, and participatory carrots to entice local governments to dimensions of contemporary TOD target new growth along transit corridors. practice in the United States. Two states—California and New Jersey— have undertaken “transit village” Transit-Agency Organizational Context initiatives for this very purpose. Transit agencies are vital to TOD since, These examples represent only the after all, they control where, when, and public side of things. On the private side even if rail and bus services are

39 delivered. Further, when it comes to (See Appendix A for the instrument used joint development, transit properties in surveying transit professionals.) occupy the front line of implementation, deciding if and when agency-owned land Transit Agencies and Land-Use Affairs and air rights are to be leased or sold. For TOD to take form, public entities The role of transit agencies in promoting must plan for, manage, and regulate land TOD and joint development raises uses. This often means promoting mixed fundamental questions regarding uses through inclusionary and overlay legitimacy and mission. Not all transit zoning and increasing permissible board members subscribe to the view densities by granting FAR bonuses. that land development lies within the Normally, land-use controls and purview of a transit agency’s portfolio concessions are the prerogatives of local of tasks, preferring to define transit’s governments. However, as public mission more narrowly. Moreover, entities, transit authorities not only transit agencies are sometimes so control the use of agency-owned property consumed by pressing everyday matters, but also are in a position to influence such as securing full-funding agreements land-use decisions on adjacent and for investments and defusing labor neighboring parcels through cooperative tensions, that joint development falls arrangements with local governments way down the list of priorities. and negotiations with private landholders Moreover, some agencies have adopted as part of joint development deals. firm parking replacement policies, all but precluding development opportunities in The majority of transit agencies instances where land prices are high responding to the survey openly enough to warrant structured parking. acknowledged that land use is first and foremost a local-government prerogative, Transit agencies are in a position to with freely elected city council members assume many roles in the TOD and other local elected officials implementation process—brokers, shouldering the lead responsibility (see facilitators, educators, funders, active Figure 3.1). However, nearly one out of development partners, and advocates. five indicated that their transit agency Sometimes these roles are co-dependent shares responsibilities with other entities, (e.g., equity participation requires a including local governments, in land-use certain degree of advocacy and affairs. Moreover, in roughly one out of mediation), and sometimes they are in ten cases, the MPO was identified as conflict (e.g., advocacy can compromise taking the lead on land-use issues related the ability of a transit agency to act as to TOD, generally in the form of setting an impartial mediator). policies and promoting a pro-transit political climate. This section discusses the present-day organizational setting and context of Three of the responding rail agencies— TOD and joint development from a BART, NJ TRANSIT, and Triangle transit-agency perspective. This is done Transit Authority (in North Carolina)— largely from the responses of the provide funds for strategic station-area 90 surveyed U.S. transit properties. planning and for leveraging land-use

40 How Transit Agency Addresses Land Use:

67.6% Local Government Leads 54.7%

17.4% Shares Responsibility 18.9%

MPO Leads 9.2% 11.3%

Conducts Studies with Others 2.0% 7.5%

8.7% Uses Funds to Leverage 1.9% Rail Agency 0.0% Bus Agency Not Concerned With 5.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% Percent of Transit Agencies Figure 3.1. How Transit Agency Addresses Land Use, Rail versus Bus Agencies, National Survey Results, 2002. decisions by local jurisdictions. In the mission of a transit agency, taking contrast, several of the smaller bus the next step of actively promoting TOD companies responding to the survey and joint development can be a big leap. indicated that “land use is not something Fifteen of 32 (46.9%) rail transit that we are concerned with.” More agencies surveyed indicated that they telling is the fact that respondents from have “formal programs” designed to 95% of bus agencies and all rail agencies encourage TOD. Among bus operators, indicated that land use is something their there was far less in-house support—just transit agency is and will continue to be 5 of 58 agencies surveyed (8.6%). The concerned about. amount of staff resources devoted to TOD activities (as opposed to land-use While relatively few of the surveyed matters more generally) varied transit properties have staff who focus considerably. Only two of 58 bus on TOD, full time or part time, half (45 agencies (3.4%) devoted full-time staff of 90) stated they have staff or to TOD. Among rail agencies, 42% did.1 consultants assigned to work on land-use matters on an as-needed basis. The most Among transit agencies without staff frequent level of involvement on land- assigned to TOD tasks, more than three- use affairs was 10% of a full-time quarters indicated that they encouraged equivalent (FTE) staff position. TOD planning and implementation in other ways. In most instances, this In-House Support for TOD involved agency staff routinely reviewing development proposals early in the Even though being involved in land-use process to ensure that they were affairs is widely considered to be within supportive of transit—meaning

41 everything from having sufficient respondents from smaller transit agencies densities to support stepped-up transit indicated that they work with city services to designing streets that can planning departments and neighborhood accommodate the turning radii of groups on an ongoing basis as part of both standard coaches. A number of agencies short- and long-range transit planning. also said they promote TOD through the preparation and distribution of transit- Table 3.1 outlines the nature of in-house supportive design guidelines. Most TOD programs among five responding

Table 3.1. Activities of Transit Agency TOD Programs, Including Staff Time Allocations Transit Agency Activity % of Time Utah Transit Authority Preparing RFPs for agency properties 33% Planning future land uses for agency properties 33% Public outreach and meetings 6% Developing transit pass program 10% Ongoing administration 18%

Miami-Dade Transit Preparing RFPs for joint development projects 20% Negotiations of joint development projects 20% Zoning and regulatory reviews 20% Administration of leased properties 40%

Maryland Transit Funding of TOD projects 40% Administration Administering local conservation grants 35% Administering TOD incentive grants 11% Planning pedestrian/cycling improvements 10% Ongoing planning and administration 4%

Denver Regional Implementing joint development projects 60% Transit District Public outreach, education, and training 20% System integration of TOD 20%

San Diego Reviewing development projects and proposals 40% Metropolitan Transit Interjurisdictional outreach and coordination 25% Development Board Preparing and updating development guidelines 10% Pursuing funding opportunities and grants 10% Ongoing planning and administration 15%

42 transit agencies, along with staff time agencies involves technical assistance on commitments to various tasks. Besides TOD planning matters. advancing joint development projects, the most common activity is public outreach The most common approach to general- and coordination, consuming 6 to 25% of public outreach on TOD matters among TOD staff time. Reviewing development surveyed transit agencies has been proposals typically takes a quarter to one- design charrettes, that is, neighborhood half of a TOD staff member’s time. The meetings where residents and business- Maryland Transit Administration, owners participate in the design of a responsible for transit in metropolitan master plan for a station area under the Baltimore and other urbanized parts of assistance of trained professionals (see Maryland, has assigned its staff to a range Figure 3.2 and Text Box 3.1). Charrettes of TOD activities including planning and need not be expensive undertakings designing pedestrian/bicycle/bus-stop involving highly paid designers and access improvements and administering architects. Charrettes can be facilitated development grants. The agency’s strong community meetings that forge a commitment to TOD is revealed by its consensus on future land-use directions. generous budget allocations, far more than Many surveyed rail agencies have also any transit agency surveyed. During the turned to conferences and workshops on three fiscal years spanning 2000–2003, the TOD to reach both the general public Maryland Transit Administration invested and professionals. Public hearings, $500,000 to $600,000 annually in TOD media coverage (e.g., television shows), administration and planning, compared and web sites have also been used to with $7 million to $13 million annually market TOD, albeit less frequently than for TOD construction and charrettes or conferences. The Maryland implementation.2 Transit Administration, for example, has its own local access cable show that has Outreach and Education featured stories on the Symphony Center and Owings Mills TOD projects. Public outreach and education have constituted the lion’s share of TOD Outreach programs generally get passing activities among U.S. transit agencies. grades from transit-agency respondents. Around one-quarter of the surveyed Figure 3.3 shows that around 40% of transit agencies reported that they respondents felt outreach was significant conducted such activities, targeted in helping to initiate projects.3 Outreach normally at the general public. In some generally received the lowest marks for cases, efforts are aimed at reaching local effectiveness at helping to resolve government staff, elected officials, conflicts and temper neighborhood developers, and lenders. The Utah opposition to TOD projects. Transit Authority, Dallas Area Rapid Transit, and SouthWest Metro Transit Other Organizational and in Minnesota, for example, concentrate Legislative Contexts on reaching out to the development community. For NJ TRANSIT, the Other spheres of government and primary aim is to reach local elected stakeholder interests have formed their officials. Most outreach by transit own institutional forums for advancing

43 Initiative Taken:

81.1% Design Charrette 36.4%

74.4% Conference for General Public 26.1%

73.3% Conference for Professionals 36.4%

66.7% Public Hearing on TOD 25.6%

47.6% Media Coverage 14.0%

42.9% Internet Web Site 32.5%

0% 20% 40% 60% 80% Percent of Transit Agencies

Bus Agency Rail Agency

Figure 3.2. Outreach Initiatives Taken in Transit Agencies’ Service Areas Over Last 2 Years Involving TOD.

Effectiveness of Outreach at:

Increasing Public 22.2% 66.7% Awareness 11.1%

Increasing Private- 27.8% 55.6% Sector Awareness 16.6%

Engaging Public 17.7% 70.6% Dialogue 11.8%

11.1% Resolving Conflicts 61.1% 27.8% Significant Helping to Initiate 39.9% 39.9% Moderate Projects 22.2% Minim al

0% 10% 20% 30% 40% 50% 60% 70% 80% Percent Rating Figure 3.3. Rating of Effectiveness of TOD Outreach Efforts by Transit-Agency Respondents.

44 Pleasant Hill’s Second-Generation Transit Village Charrette BART’s Pleasant Hill Station is one of America’s most prominent suburban TODs, although some would call it more TAD than TOD. It currently boasts some 2,400 housing units and several million square feet of office and commercial floor space nearby, but it suffers from a poor-quality walking environment and the absence of a human-scale “feel.” Plans to add more retail and office space to the area unleashed a “not-in-my-backyard” (NIMBY) backlash, prompting local officials (in concert with BART, residents, business leaders, activist groups, and area employees) to organize a community-based design charrette aimed at building broad-based local support for transforming the 18-acre site from a TAD to a TOD. Portland-based Lennertz Coyle and Associates was retained to lead the charrette process. More than 500 people participated in the 6-day “give-and-take” event in the spring of 2001. Participants discussed dozens of ideas before agreeing on a plan that calls for the strategic siting and infill of mid-rise housing, community-oriented retail space, offices, and assorted public amenities. Emphasis was given to providing attractive, accessible, and automobile-restricted spaces for pedestrians and cyclists. Also, the process led to the revamping of local implementation tools, mainly in the form of devising building and site-design codes based on New Urbanism principles. How to replace the 1,294 park-and-ride spaces that will be lost to the development remains a bone of contention in seeing the plan through to implementation. For further information, see Pleasant Hill BART Station Design Charrette Outcome at http://www.co.contra-costa.ca.us/depart/cd/charrette/outcome/ outcome.htm.

The citizen-driven charrette process led to a community plan that calls for the transformation from the present-day TAD (top left) to a second-generation, master- planned TOD with the ambience of Tuscan village (top right). With the aim of creating a human-scale, pedestrian-friendly environment, the charrette process relied on streetscale computer-generated visualizations to depict how current intersections (bottom left) might be transformed (bottom right). Text Box 3.1 TOD. TOD’s potential to spur economic San Francisco Bay Area (Metropolitan growth and relieve pressure to expand Transportation Commission), Seattle roads can create a powerful incentive for (Puget Sound Regional Council), and local governments to become proactive. Dallas-Fort Worth (North Central Texas As stressed earlier, TOD often relies Council of Governments). Big MPOs upon “precursors” that only municipal mostly provide technical assistance governments can introduce, like germane to TOD (e.g., planning permissive zoning ordinances or information and demand forecasts); a few streamlining entitlements. In distressed provide grant assistance and occasionally inner-city locations, responsibilities broker cost-sharing arrangements among often lie with redevelopment entities. local governments (e.g., for funding Higher levels of government, from strategic planning studies). Portland regional entities to federal agencies, Metro budgeted $1.7 million specifically are also increasingly vital to TOD for TOD planning in fiscal year implementation if for no other reason 2002–2003, the largest amount among than they often control funding and the MPOs nationwide. The more typical legislative powers vested in transit amount spent by MPOs was around agencies and local governments. $100,000 per year, funded mainly using federal pass-through planning grants.4 Sub-State Institutional Roles State Roles and Involvement Thirty percent of the surveyed local governments (7 of 23) have “formal More and more state DOTs are turning programs” to encourage TOD in their their attention to TOD because sprawl, jurisdictions. This has typically involved left unchecked, poses a serious threat to creating station-area development plans, scarce state resources—not only prime matched by zoning reforms (e.g., overlay farmland, natural habitats, and open zones and interim-use restrictions) and space but also thinly stretched state building code revisions, topics addressed budgets. Most states with metropolitan in the next chapter. A few of the and/or intercity passenger rail services surveyed local entities (the cities of Los encourage TOD indirectly through Angeles, Charlotte-Mecklenburg, and funding grants, technical assistance on Baltimore) have personnel who work planning, and participation on various full time on TOD affairs. Most local interagency coordinating committees (see municipalities as well as redevelopment Text Box 3.2). A few states have adopted agencies support TOD through other policies that explicitly call for steering means, such as cooperating and future statewide growth to transit coordinating with other agencies. corridors. For example, in 2001, the state of Georgia approved a smart-growth At the MPO level, the formal promotion initiative through the GRTA and the of TOD is found mostly in large, rail- Governor’s Development Council that served regions, such as greater embraces TOD as a sprawl-curbing tool. Philadelphia (the Delaware Valley Regional Planning Commission), Oregon’s recent Public Transportation San Diego (San Diego Association of Plan, an outgrowth of several decades of Governments), Portland (Metro), statewide land-use planning, encourages

46 State Governments and TOD

In a recent report, The Role of State Government in Transit-Oriented Development, the Pennsylvania Environmental Council identified nine possible roles for state governments on the basis of a review of experiences in 11 states that have been the most active in pursuing smart growth:

■ Promote regional coordination; ■ Forge collaborative working relationships among state entities such as transportation, transit, highways, community development, and housing; ■ Develop a set of goals to promote tax savings and environmental well-being through new community design strategies such as TOD; ■ Implement programs and funding initiatives (often using federal dollars) that achieve these goals; ■ Provide financial incentives; ■ Remove regulatory and statutory barriers to land use; ■ Promote public-private partnerships; ■ Provide planning, policy research, technical assistance, and information support and help local governments employ innovative redevelopment strategies; and ■ Establish pilot programs to test and show by example how new modes of thinking can work.

Source: L. Hersh, The Role of State Government in Transit-Oriented Development (Philadelphia: Pennsylvania Environmental Council, December 2001).

Text Box 3.2 public transportation projects that funding of TOD planning, administration, support compact or infill development or and capital improvements throughout the mixed-use projects.5 state (discussed in the previous section). No other states in the country are thought To date, few state laws or regulations to have passed similar legislation. Brief have been enacted that pertain specifically descriptions of the activities in California, to TOD. Four states have passed New Jersey, and Oregon follow. legislation or have provided funding through departmental agencies • California: In 1994, California’s specifically aimed at promoting TOD: legislature passed Assembly Bill California’s Transit Villages Planning 3152, which promotes the adoption Act of 1994; Oregon’s Senate Bill 763 of transit village plans. The Act Vertical Housing Zone Bill; New Jersey’s says that no public works projects, Transit Village Initiative; and the tentative subdivision maps, or parcel Maryland Transit Administration’s maps may be approved, or zoning

47 ordinances adopted or amended, areas and transit-oriented areas are within an area covered by a transit defined using definitions already in village plan unless the map, project, Oregon Revised Statutes. The most or ordinance is consistent with the salient feature of the bill is that it adopted plan. It also automatically authorizes tax abatement as an exempts conforming projects in a inducement to infill and moderate- to transit village district from traffic high-density development, especially impact assessments under the state’s near transit stations. In this sense, Congestion Management Act. The Oregon’s bill has more “teeth” and lack of funds directly committed to “purse-string punch” than initiatives TOD, however, is widely thought to in California and New Jersey. have limited the Act’s effectiveness.6 Another noteworthy California Federal Roles and Involvement requirement says that all new state office structures built within the The primary role of the federal service district of the Sacramento government in encouraging the growth of Regional Transit District lie within TOD is one of funding. About 18% of all 1 ⁄2 mile of a rail stop. funding from the Transportation Equity Act for the 21st Century (TEA-21), • New Jersey: The NJ TRANSIT roughly $36 billion between 1997 and Village Initiative, established by the 2003, was allocated to transit, mostly New Jersey Department of going for capital improvements. The Transportation (NJDOT) with federal government also encourages numerous state agencies, assists collaboration between government communities in leveraging private agencies as well as between the public redevelopment. A collaboration of and private sectors. An important state agencies provides technical program in this regard has been the assistance and resources to help Transportation and Community and communities implement the Systems Preservation Pilot Program initiative. Additionally, communities (TCSP) of the Federal Highway designated as “transit villages” get Administration. TCSP has provided priority access to NJDOT’s Local grants to state, local, and regional Aid for Centers Program, the agencies that partner with community Transportation Enhancements groups, nonprofit organizations, or Program, and Bicycle and Pedestrian private investors to enhance projects. (See Chapter 11 for further transportation and land-use connections. discussions of this initiative.) NJ TRANSIT, for example, was recently awarded over $800,000 in TCSP grants • Oregon: Senate Bill 763, passed by to assist 11 municipalities in developing Oregon’s legislature in 2001, strategies to enhance connections authorizes the creation of a “Vertical between station areas and surrounding Housing Zone” within local communities and to leverage private jurisdictions. The bill applies to capital to redevelop station areas. light-rail station areas, transit- oriented areas, and core areas of Other important national policies and urban centers. Both light-rail station programs that have promoted TOD and

48 joint development include the the past.8 Some agencies have given following: priority to route alignments and station locations in jurisdictions that • New Joint Development Policy: have adopted transit-supportive land- FTA’s 1997 reinterpretation of the use plans, and many are seeking Federal Common Grant Rule, among zoning and parking-code changes that other things, permits transit agencies are “transit friendly.” The national to sell land holdings financed by survey of 90 transit properties federal grants without having to confirmed these findings. Figure 3.4 return proceeds as long as funds are reveals that more than 40% of used to “help shape the community respondents from transit agencies felt that is being served by the transit that the New Starts process “raised system.” Transit properties in the profile of the transit/land-use Washington D.C., Atlanta, Portland, connection.” Respondents from Southern California, and the San several rail-served agencies, Francisco Bay Area have been including Portland’s TriMet and San particularly aggressive in exploiting Francisco’s BART, indicated the new this new ruling. For the BellSouth criteria “led directly to changes in multi-tower complex, currently taking locally adopted land-use policies and form at MARTA’s Lindbergh Station plans for transit corridors.”9 in the fashionable Buckhead district of Atlanta, MARTA took advantage • Livable Communities: Launched by of the ruling to expedite the FTA in 1994, this program has construction of some 5 million square sought to empower inner-city feet of mixed-use development on a neighborhoods by making them former surface parking lot. (See eligible for special grants and tax Text Box 3.3.) credits. Assistance has gone to siting child-care centers and police • New Starts Criteria: This policy substations near transit stations and mandates that applicants for federal improving access to and lighting New Starts funds carefully address conditions around rail stops in land-use matters as part of their Cleveland, St. Louis, Baltimore, capital investments.7 Key to Philadelphia, and Oakland. successful applications for highly competitive New Starts funding are • Other Federal Initiatives: Included “transit-supportive existing land- here are Location Efficient Mortgage use policies and future patterns,” (LEM) programs, jointly sponsored “supportive zoning regulations near by Fannie Mae and private banks, transit stations,” “tools to implement that make it easier to purchase a land-use policies,” and “the home near transit stations (under the performance of land-use policies.” premise that lower transportation Several recent studies have costs free up earnings for housing concluded that this policy has spurred consumption); the Environmental U.S. transit properties to take land- Protection Agency’s Brownfields use matters and transit-supportive Initiative for cleanup of former planning far more seriously than in industrial sites (particularly

49 From Parking Lot to Mini-City: Atlanta’s Lindbergh Station

Atlanta’s Lindbergh Station is in the midst of transforming into a “mini-city,” thanks in no small part to FTA’s joint development policy ruling that enables land purchased using federal funds, including parking lots, to be leased to the private sector as long as the resulting development is transit supportive. Using a competitive-bid process, the Metropolitan Atlanta Rapid Transit Authority (MARTA) selected a master developer, Carter and Associates, in 1997 to move full-speed ahead with a large-scale mixed-use project. Some 1.3 million square feet of office space, retail shops, and a hotel, plus residential condominiums, are slated for an 11-acre park-and-ride lot. A pedestrian-friendly Main Street, featuring retail shops and restaurants, will bridge over the rail station into a multifamily residential district. One of Atlanta’s largest companies, BellSouth, will be the project’s anchor tenant. BellSouth’s move to the Lindbergh site reflects a corporate decision to relocate scattered suburban offices to a central-city transit node in response to growing employee frustration over traffic congestion and a perception that quality of life was eroding. The consolidation of its offices into three new centers will mean that 80% of company employees in metropolitan Atlanta will work near a MARTA station, compared with 30% today. Due to pressure from local residents, parking ceilings have been introduced at the Lindbergh Station, an about-face given that the city of Atlanta has in the past always imposed parking minimums. (Local residents were not informed of the full extent of the BellSouth project, prompting a backlash over parking and traffic that required a mediator and a lawsuit before matters were settled.) Parking for retail and office space has been reduced by a third from the city’s standard of 3.7 and 2.3 spaces per 1,000 square feet, respectively. Shared parking between office and retail uses is also in the works. BellSouth hopes to lure its employees to MARTA by providing free or discounted transit passes and free private parking at outlying MARTA stations. Also, MARTA will consider eliminating some station parking as ridership numbers increase.

Master Plan for Lindbergh City Center (top left); first-phase construction, 2003 (top right); streetscape rendering of Main Street (bottom left). Sources: http://www.carterusa.net/ lindberghcitycenter; G. B. Arrington, et al., Statewide Transit-Oriented Development Study—Factors for Success in California (Sacramento: California Department of Transportation, 2002).

Text Box 3.3 Effects of FTA’s New Starts Criteria on Land-Use Activities:

Significant Impact 4.2% 0.0% Rail Agency

Led to Changes in 12.5% Bus Agency Land-Use Plans 2.1%

Elevated TOD 8.3% Planning 10.6%

Raised Profile of 45.9% TOD 40.4%

29.2% No Impact 40.4%

0% 10% 20% 30% 40% 50% Percent of Transit Agencies Figure 3.4. Effect of Federal New Starts Land-Use Criteria on Transit Agencies’ Interests in TOD Planning.

important where rail is being built on initiatives, private-sector committees/ abandoned railroad rights-of-way); working groups, and public-private housing subsidy programs under the forums. U.S Department of Housing and Urban Development (HUD), which Public-Sector Interagency Initiatives promote coordination between transit and housing; and Congestion Almost all U.S. transit agencies with rail Management/Air Quality (CMAQ) services and a majority of the big all-bus funds (designed to help local operators participate in some forum to governments implement the federal coordinate transit and urban development Clean Air Act Amendments of among government entities. In Maryland, 1990), eligible for TOD planning a TOD working group has formed with activities (CMAQ funds were representatives and co-funding from the recently used in Minneapolis’s Maryland Transit Administration, the Hiawatha corridor). Maryland Department of Transportation, the Governor’s Office of Smart Growth, Cooperation and Collaboration and the Maryland Department of Planning. Along the San Francisco– Given the various institutional roles and San Jose Caltrain commuter-rail corridor, legislative mandates discussed above, each commuter-rail station project has a what mechanisms have evolved for working group, spearheaded by the local coordinating activities and building agency, which brings public agencies partnerships among stakeholders? This together to coordinate activities (see section reviews collaborative experiences Chapter 18). NJ TRANSIT actively at three levels: public-sector interagency participates in the state’s transit village

51 program, working with the state DOT, the agencies and state governments or Economic Development Authority, the redevelopment authorities.10 Office of State Planning, and other groups to promote transit-friendly planning and Private-Sector Initiatives smart growth (see Chapter 11). The Greater Cleveland Regional Transit Developers, builders, real-estate brokers, Authority has joined forces with and others involved with TOD from the Cleveland’s planning department and private side have over time formed their other local interests to form a Committee own forums to promote their collective for Transit-Oriented Design that meets interests. Examples include monthly to promote awareness and the need for TOD. An example of regional • Houston’s Main Street Coalition. cooperation comes from the Seattle area, Formed in 1994 to create a signature where Sound Transit and the Puget Sound transit-and-pedestrian spine along an Regional Council coordinate planning, 8.5-mile boulevard stretch, the funding, and development activities coalition is today focusing on the around existing and future transit stations. land-use and architectural integration along the $300-million light-rail line Figure 3.5 shows that the most common being built in downtown Houston. interagency cooperative agreement entered into to promote TOD, as • Charlotte’s Business Community for identified by the 90 surveyed transit Regional Transportation Solutions. properties, has been between transit Formed in 2000 as a task force of the agencies and city governments. Charlotte division of the Urban Land Comparatively few agreements have Institute, the association has raised been entered into between transit developer awareness of TOD

Transit Agency Entered into a Cooperative Agreement with:

17.6% Redevelopment Agency 4.2%

35.0% City Government 35.3%

26.3% County Government 19.1%

26.3% Regional/MPO 14.0% Rail Agency 17.6% State Government 0.0% Bus Agency

0% 5% 10% 15% 20% 25% 30% 35% 40% Percent of Transit Agencies Figure 3.5. Cooperative Interagency Agreements Between Transit Agencies and Other Entities to Promote TOD.

52 opportunities for planned rail have been relied on in forging and bus corridors. public consensus on how to best transform selected neighborhoods • Envision Utah. A privately led into transit-friendly environs. (See initiative to promote regional smart Text Box 3.4.) growth in Salt Lake City’s rapidly urbanizing Wasatch Front, • Silicon Valley Manufacturing Envision Utah has embraced Group. Composed of senior TOD as a central component of managers of member companies in the region’s strategic long-range this burgeoning high-tech corridor, plan. An ambitious outreach the Group addresses transportation program and visual simulations and sustainable growth issues for

Envisioning Utah Through Visual Simulations

Envision Utah has launched an ambitious outreach program, conducting various workshops and polling residents (through newspaper ads and focus groups) on their preferences for their community’s and the Wasatch Front’s future .

Envision Utah hired a local consultant, Cooper, Roberts, Simonsen Architects, and a national consultant, Calthorpe Associates, to work with local communities in developing illustrative plans for four sites: Central Park and Murray North stations on the present TRAX light-rail line and proposed stations in West Jordon and downtown Layton. The consultants understood that citizens do not think of or view places in plan (i.e., bird’s eye) view, but rather from a streetscape perspective. Thus, visual simulations were relied upon to suggest how corridors, such as those near the Murray North TRAX station, might be transformed from dreary landscapes (left) to vibrant, pedestrian-active streets (right). These efforts culminated in the preparation of a handsomely illustrated report, Wasatch Front TOD Guidelines, published by Envison Utah in 2002. Source: Cooper, Roberts, Simonsen Architects and Calthorpe Associates, Wasatch Front TOD Guidelines (Envision Utah, 2002).

Text Box 3.4

53 rail-served Santa Clara County. (See boundaries delineating the degree to Chapter 18 for further discussion.) which transit agencies can pursue TOD are mainly defined through statutory • 1000 Friends of Oregon/Livable regulations and legal mandates. The Oregon. Nonprofit, grass-roots Utah Transit District Act limits transit initiatives, led by 1000 Friends, were authorities to building and operating instrumental in winning support transit services and facilities except as for the TOD-friendly Westside stipulated in federal grants and Metropolitan Express (MAX) line in legislation.11 Miami-Dade Transit is metropolitan Portland in lieu of a limited in its leasing and sale of county planned beltway project. The group property under State Statute 125. Under funded sophisticated planning and the State Transportation Article, the modeling of transportation/land-use Maryland Transit Administration is futures for the region. required to offer the original owner any land acquired for transportation Public-Private Forums purposes that is no longer being used; some interpret this to mean that Thirteen of the 90 transit agencies underutilized land banked or set aside surveyed identified public-private for TODs may have to revert to its organizations or committees that have original ownership. Also, the state of formed to promote TOD at some level. Maryland’s procurement code did not These include the Salt Lake City anticipate public-private partnership Downtown Alliance Transportation agreements that are not always reached Committee; Denver Regional through an open-bid competitive Transportation District’s (RTD’s) process. TOD Task Force; Portland’s Livable City Housing Council (committed to Some enabling legislation expressly identifying barriers to TOD and funding forbids transit agencies from engaging demonstration projects, with in land-use activities. State legislation representatives from TriMet, the city that authorized the formation of the of Portland, for-profit developers, Southeastern Pennsylvania Transportation insurance companies, Fannie Mae, and Authority (SEPTA), for instance, major banks); and the San Francisco prohibits the agency from pursuing land Bay Area, where BART and private development.12 Similarly, New Jersey’s interests have entered into exclusive Public Transportation Act of 1979, which agreements to develop mixed-use created NJ TRANSIT, allows the agency TODs on agency land at Walnut Creek, to acquire property for “transportation El Cerrito del Norte, and several other uses” but not to pursue ancillary real- stations. estate development opportunities, including TOD.13 Several transit agencies Regulatory Environment responding to the national survey cited FTA’s Third Party Contracting Many things stand in the way of TOD Requirements (Circular 4220.1D) as a implementation, a topic addressed in the regulation that ties their hands in next chapter and throughout the case negotiating the best land-use programs studies in Part 4 of this report. The for TODs.

54 Even within the same state, statutory inclined to embrace TOD in principle, powers governing land development can but, when it comes to specifics, they are vary markedly among transit properties. sensitive to the fact that land use lies In California, for example, original within the purview of local governments. statutes governing BART’s joint They see themselves as mainly in the development powers are far more business of running trains and buses, restrictive than those granted to Southern deferring specific land-use decisions California’s Metropolitan Transit for station-area development to Authority (MTA). BART relies on municipalities. As one respondent of a powers of eminent domain, which the large east-coast transit property put it: “we authority was originally granted to try to assist and influence communities’ construct and operate the heavy-rail land-use decisions without overstepping system, but MTA’s statutes are more local home rule.” The line between being permissive and explicitly allow the in favor of TOD as a concept and actively agency to pursue value-capture strategies promoting specific TOD projects is often like benefit-assessment financing.14 a delicate one to cross. MTA was formed after BART, allowing the authority to review and improve on Parking Policies BART’s charter. For several big rail properties, an in- Most state statutes are vague about transit house policy that has stood in the way of joint development matters. Since most converting surface parking lots into on- transit agencies were created before joint site mixed-use developments is one-to- development gained ascendancy, many one replacement parking requirements. contemplating joint development face the Fourteen of the respondents indicated prospect of bending the original intent of that their agencies have replacement their authorizing statutes. The absence of parking requirements.15 Given that half clear state-level policy directives (outside (45 of 90) of the respondents said that of Oregon and Maryland) and authorizing there are park-and-ride spaces at stations legislation regarding land development where TOD is being promoted, it appears has, de facto, steered some U.S. transit that replacement parking strictures affect properties away from the practice of TOD at least a third of TOD settings.16 In the and joint development. case of BART, the elected board of directors’s one-to-one replacement Internal Strictures policy has reduced ground-rent income by providing rent credits to developers According to transit-agency survey who provide replacement parking. Even respondents, what ties their hands more in if BART’s board were to relax the one- pursuing TOD than state regulations are to-one replacement requirement, this internal ones—policies, strictures, might not result in reduced parking since mandates, and so forth within agencies all local jurisdictions require that BART that limit the practice of TOD. Around replace all parking displaced by 15% of surveyed transit-agency development on agency land. respondents said such controls, whether explicit or tacit, existed within their In and around transit stations, parking is organizations. Most transit properties are a double-edged sword. On the one hand,

55 it is absolutely essential for drawing parking is seen as a more important transit customers to transit in low-density use next to the platform than a TOD. settings where feeder bus services are sparse. On the other hand, parking lots Notwithstanding the sometimes can form huge obstacles to the creation schizophrenic relationship transit of viable and attractive TODs. Parking properties have with parking, most reduces opportunities for TOD in several transit-agency survey respondents did ways. First, parking separates the transit not feel that parking facilities inhibit system from the adjacent community, TOD. Fifteen percent of transit-agency along with potential TOD parcels. respondents said park-and-ride spaces Second, parking creates a station-area were a “significant obstacle” to their milieu that is distinctly automobile- agency’s ability to successfully plan and rather than pedestrian-oriented. Third, build TOD projects. Figure 3.6 breaks parking demands lead to stations being the responses down, revealing that sited in marginal settings that are not respondents from rail agencies were conducive to TOD. Finally, regulatory generally more critical about parking as requirements on replacement parking a deterrent to TOD. The figure shows severely limit the possibility of some degree of sensitivity to the impacts converting commuter spaces into TOD. of park-and-ride spaces on pedestrian environments. Almost half of rail- It must be remembered that the cost of agency respondents and over 60% of replacing parking becomes a TOD, not a those from bus agencies felt that parking transit-system, requirement. The TOD spaces moderately detracted from the must develop enough revenue to replace pedestrian-friendliness of station surface parking with a costly deck environments. structure. Replacement parking policies have placed a higher value on the short- Despite the obstacles to removing term ridership generated from park-and- parking lots near stations, respondents ride than on the long-term benefits from from 17 of the 90 transit agencies creating viable communities around (18.9%) said plans are underway to stations. The notion of generating riders convert park-and-ride lots to TOD. In from TOD to offset the cost of all, parking lots at over 50 rail stations replacement parking is quickly dismissed or bus terminals are slated for in many parts of the United States. This conversion to commercial and/or has been the case at Dallas’s Mockingbird residential development. The FTA’s Station. The developer of an adjacent new joint development ruling that mixed-use TOD inquired about the allows transit agencies to sell off possibility of relocating parking in front parking lots to private investors and of the station and developing the parcel as retain proceeds has no doubt helped apartments. The Dallas Area Regional trigger this response. Agencies with Transit agency, DART, has so far resisted. park-and-ride conversions in the works Even with a one-to-one replacement are listed below with affected stations: policy, DART is more interested in preserving this choice piece of land for • Washington Metropolitan Area commuter parking. For many local Transit Authority. Branch Avenue, decision-makers and their constituents, Suitland, Rhode Island Avenue,

56 Impact Bus Agency Rail Agency

28.6% Significant 5.0%

28.6% Obstacle to Moderate 40.0% TOD 42.8% Minimal 45.0%

Significant 23.5% 0.0% 47.1% Harms Moderate 61.1% Walking 29.4% Minimal 38.9%

0% 20% 40% 60% 80% 100% Percent of Transit Agencies Figure 3.6. Views of Transit-Agency Respondents on Impacts of Park-and-Ride Spaces on TODs and Quality of Pedestrian Environments.

Van Dorn, Prince George’s Plaza, • New Jersey Transit: Morristown, Wheaton, Greenbelt, and Hamilton, Liberty State Park, Takoma Stations; Jersey City, and Dover Stations;

• Metropolitan Atlanta Regional • Portland TriMet: Gateway, Transportation Authority: Chamblee, Rockwood, and El Monica (land King Memorial, Lakewood-Fort swap) Stations; McPherson, Abernathy Road, Kensington, Avondale, and • Metropolitan Transit Development Hamilton E. Holmes Stations; Board (San Diego): Morena/Linda Vista and Grossmont Stations; • San Francisco BART: Pleasant Hill, MacArthur, West Oakland, • Caltrain/SamTrans (San Mateo Richmond, El Cerrito Del Norte, County): Redwood City and El Cerrito Plaza, Ashby, Fruitvale, Colma Stations; Hayward, and Union City Stations; • Maryland Transit Administration: • Miami-Dade Transit Authority: Owings Mills, Old Court Metro, Coconut Grove, Overtown/Arena, Reisterstown Plaza Metro Stations; Brownsville, Douglas Road, Dr. Martin Luther King Jr. Plaza, • Dallas Area Rapid Transit: and Santa Clara Stations; Mockingbird Station;

57 • Utah Transit Authority: 10000 South to jump-start TOD through transit Station; village initiatives that critics view as mere window-dressing since little • SouthWest Metropolitan Transit funding support is provided. Commission (Minnesota): Important recent federal initiatives Chanhassen Station; and have been the new joint development ruling (that enables transit agencies to • Regional Transportation District sell land for TOD even if the land was (Denver): Arapahoe Station. purchased using federal dollars), New Starts criteria, and various livable Summary community initiatives.

Many voices shape the practice of TOD Coordination among public agencies as in the contemporary urban United States. well as with the private sector normally A multi-layered, sometimes complex occurs through various ad hoc task institutional and political environment forces and similar forums. In recent has evolved that ensures accountability years, private developers, builders, and and instills a degree of responsibility and real-estate interests have joined forces to fairness into the decision-making promote TOD in cities like Houston, process, but this environment can also Charlotte, and San Jose. form roadblocks to implementation, a topic addressed in Chapter 5. The major institutional barriers to TOD The spectrum of transit-agency are regulatory in nature, either a product participation can range from modest of restrictive state statutes or self- (providing technical guidance such as imposed transit-agency rules. Some transit-supportive design guidelines) to states limit, ipso facto, real-estate ambitious (being the self-anointed lead transactions undertaken by transit developer). Most transit agencies get agencies to “transportation uses.” Many involved in land-use affairs, broadly transit properties shy away from land defined; however, they generally limit development matters on the grounds that their involvement in TOD matters to it is not central to their mission of interagency coordination. What TOD delivering safe and efficient transit work is carried out concentrates on services. As a result, most transit public outreach and education. Design agencies have no personnel assigned charrettes have been used quite to TOD or, more generally, land successfully to draw public input into the development, leaving it to their legal TOD-planning process, as exemplified departments to handle land-use affairs by the successes at the Pleasant Hill and disputes. One in-house rule that has BART station and along the Wasatch clearly hampered TOD is one-to-one Front under the guidance of Envision replacement parking requirements. Utah. Local governments wield Nonetheless, over 50 transit stations considerable control over TOD across the United States are presently outcomes through zoning ordinances and being targeted for parking lot building codes. Some states, notably conversions, thanks in part to FTA’s California and New Jersey, have sought new joint development rulings.

58 Notes planning (Oregon, Massachusetts, and Georgia), enact development of regional 1 Sixteen of the 90 transit properties responding impact (DRI) requirements (Georgia and to the survey (17.8%) have people working Massachusetts), and target state infrastructure part time on TOD affairs. BART has the most funding to direct growth (Oregon). part-timers (11), followed by NJ TRANSIT 6 R. Cervero, Transit Villages in California: (4) and the Regional Transit Authority of Progress, Prospects, and Policy Reforms, Northeast Illinois (3). Working Paper 98-08 (Berkeley: Institute 2 Funds used for TOD usually came from of Urban and Regional Development, transit agencies’ operating budgets. Several University of California, 1998). agencies, however, have dedicated funding, 7 49 U.S.C. § 509(a)(5), Federal Transit targeted specifically at TOD planning and Administration, Technical Guidance on development. San Mateo County Transit Section 5309 New Starts Criteria District (SamTrans) supports its TOD (Washington, D.C.: 1999). functions with earmarked sales-tax revenues and developer fees. While most of Portland 8 Parsons Brinckerhoff Quade & Douglas, TriMet’s TOD activities are supported by the Transit Oriented Development in California agency’s general fund, Interstate highway (Sacramento: California Department of transfer grants have been used in the past to Transportation, 2001); E. Deakin, C. Ferrell, support station-area planning and development J. Mason, and J. Thomas, “Policies and and are envisaged for the 5.8-mile Interstate Practices for Cost-Effective Transit MAX extension now under construction. The Investments: Recent Experiences in the Maryland Transit Administration gets 98% of United States” (paper presented at the its funding from a State Transportation Trust 81st Annual Meeting of the Transportation Fund and 2% from a Transportation Research Board, Washington, D.C., Enhancement Program grant under the January, 2002). federal TEA-21 legislation. In the past, NJ 9 When asked whether “the presence of land TRANSIT has supported its TOD functions use as an FTA New Starts rating criterion with federal TCSP grant funds and support changed how your agency approaches land from the state budget. Denver RTD’s TOD use in the development of transit projects,” functions are supported by developer around two-thirds of respondents from transit contributions and community development agencies stated “no.” Most responding “no” grants, with the current focus on the indicated that their agencies have always Transportation Expansion Project (T-REX) treated land-use issues seriously and would be in Denver’s Southeast Corridor. addressing land-use issues regardless. Around 3 A number of questions in all surveys a quarter indicated that “land use is a local discussed in this report judged attitudes using issue; having a federal criterion has had little a 7-point Likert (ordinal) scale. In this figure to no impact.” Respondents from WMATA, and most others, scores of 1 or 2 were the Maryland Transit Administration, DART, interpreted as “minimal,” scores of 3 through and NJ TRANSIT, among others, felt the 5 were translated as “moderate,” and scores criterion “provided the impetus to more of 6 or 7 were weighed as “significant.” seriously address land-use issues.” Other respondents, including those from BART, 4 These were an FHWA TCSP grant, FHWA MARTA, and the Houston Transit Authority, planning funds under Section 112-PL, and indicated that the criterion “has opened the FTA’s Section 5303 planning enhancement door to get discussions going.” funds. 10 Redevelopment districts exist in the service 5 More common are state land-use planning areas of 71% of transit agencies surveyed and growth management rules that mandate (62% of the non-rail agencies and 91% of the statewide land-use plans (Oregon and rail agencies). Georgia), create regional authorities with quasi-control over land use and transportation 11 Utah Transportation Code 17A-2-1101, et seq.

59 12 Pennsylvania Title 74 C.S.A. Chapter 17 Development Board (San Diego), New (Transportation). Jersey Transit, Peninsula Corridor Joint Powers Board (Caltrain), Regional 13 New Jersey Statutory Act 27: 25-1 et seq. Transportation District (Denver), San 14 M. Bernick and A. Frelich, “Transit Villages Francisco Bay Area Rapid Transit District, and Transit-Based Development: The Rules San Mateo County Transit District, Santa Are Becoming More Flexible—How Clara Valley Transportation Authority, Government Can Work with the Private SouthWest Metro Transit Commission Sector to Make It Happen,” The Urban (Minnesota), Utah Transit Authority, and Lawyer, Vol. 30, No. 1 (1998): 1–31. Washington Metropolitan Area Transit Authority. 15 The fourteen are: Capitol Corridor Joint Powers Authority (Sacramento–San Jose), 16 According to responses, the mean size of the Dallas Area Rapid Transit, Los Angeles average agency parking lot was 220 spaces, Metropolitan Transit Authority, Maryland with considerable variation (with the average Transit Administration, Metropolitan Transit size ranging from 40 to 1,200 spaces).

60 Chapter 4

TOD Implementation Tools

Getting the Job Done concept in the case of Stockholm.1 Arlington County, Virginia, arguably Going from the theory of TOD to real- the United States’s most successful world implementation can be a gargantuan example of TOD outside of a central leap. Local governments, redevelopment business district, embraced this authorities, regional planning Scandinavian model when it adopted organizations, and even public transit its “bull’s eye” concept plan for the agencies have over time accumulated an Rosslyn-Ballston corridor in the 1970s arsenal of tools and techniques to get the (see Figure 4.1). Through a collaboration job done. This chapter focuses on methods that engaged local stakeholders and an currently being used among multiple ambitious campaign that targeted stakeholder groups in bridging TOD supportive infrastructure improvements theory and practice. The focus is on tools to rail stops along the corridor, introduced and controlled by the public Arlington County managed to transform sector; Chapter 5 provides a private-sector the Metrorail Orange Line into a perspective. Most implementation tools showcase of transit-supportive reviewed in this chapter lie within the development, with mid- to high-rise purview of local governments and special towers and multiple uses today at the authorities, like redevelopment agencies. Rosslyn, Court House, Clarendon, Funding and finance issues related Virginia Square, and Ballston Metrorail to supportive TOD infrastructure stations. Since 1970, over 15 million (e.g., streetscape and access improvements) also receive attention in this chapter.

TOD Visioning and Planning

Step 1 in implementing TOD is to forge a shared vision and prepare a strategic plan. Transit can be a catalyst to achieving a desired community—the kind of place where people want to live, work, play, and raise a family. Two Scandinavian cities known as paragons of TOD, Copenhagen and Stockholm, Figure 4.1. “Bull’s Eye” Vision for adopted metaphors early on to articulate the Rosslyn-Ballston Corridor in and market their visions of the future— Arlington County, Virginia. the celebrated “Finger Plan” in case of Source: Arlington County Department of Community Copenhagen and a “Planetary Cluster” Planning, Housing and Development.

61 square feet of office space, several Focused Areas” as part of its “Land thousand hotel rooms, and 18,000 Guidance Program”; Miami-Dade’s housing units have been added to these Comprehensive Development Master station areas. With the bull’s eye Plan; Eugene-Lane County’s Regional metaphor in place to guide ongoing Transportation Plan (RTP) that calls for planning, Arlington County proceeded mixed-use nodes around bus rapid transit to leverage Metrorail’s presence and (BRT) stops; and Grand Rapids, transform once dormant neighborhoods Michigan’s “Blueprint Plan” that into vibrant clusters of office, retail, and similarly endorses bus-based TOD. residential development. (See Chapter 12 for more details on Arlington County’s When asked whether any cities or other experiences.) governmental entities in their regions had adopted TOD plans or introduced How prevalent is TOD visioning and TOD zoning, 38 of 90 national survey planning in the United States today? respondents (42%) answered “yes.” In the national survey of 90 transit More than three-quarters of rail agencies agencies, questions were asked about had local TOD plans or zoning in their regional visioning and planning as well service areas, compared with 36% of as the zoning of land around agencies’ non-rail agencies. Within BART’s transit stations. When asked whether service jurisdiction alone, 15 separate there was “a regional vision, policy, or TOD plans have been prepared for plan in place that calls for compact station areas, along with complementary development organized around transit,” zoning.2 WMATA’s TOD planning has 44 agencies, or nearly half, said there spanned two states (Maryland localities was. Among the regional initiatives in Montgomery and Prince George’s promoting station-area development are Counties and Virginia localities in Charlotte-Mecklenburg’s “Centers and Arlington and Fairfax Counties) and the Corridors” plan promoting TOD along District of Columbia. Greater Chicago five transit corridors; the Washington has seen TOD plans and/or zoning (D.C.) Metropolitan Area’s “Corridors districts introduced in more than a dozen and Wedges” plan, introduced in 1957; small- to medium-sized townships that the “Livable Communities Program” and collar Chicago proper: Tinley Park, Blue “Housing Incentive Program” sponsored Island, Elmhurst, Westmont, Olympia by the Metropolitan Transportation Fields, Waukegan, Orland Park, Commission and Association of Bay Riverday, Robbins, University Park, Area Governments in the San Francisco Hazel Crest, Morton Grove, and region; Portland Metro’s “Region 2040 Evanston, among others. In Plano, Functional Plan” and “Regional Texas, on the outskirts of Dallas, the city Transportation Plan”; Envision Utah’s planned and developed a downtown Long-Range Vision, committed to TOD transit village before light rail had even as an alternative to sprawl; the Long- arrived. Plano offices agreed on a vision, Range Plan of the Delaware Valley set in place supportive zoning, Regional Planning Commission in the landscaped and upgraded local Philadelphia area that embraces TOD infrastructure, and found a developer to principles; the San Diego Association of bankroll and implement the vision. Governments’ designation of “Transit (See Chapter 15 for more details.)

62 The state of North Carolina has, as of permissible land uses, building setbacks, late, witnessed a surge in TOD planning. and allowable densities in and around In the Raleigh-Durham area, for transit stations. Land-use controls derive example, Town Center Area Plans have from eminent-domain and home-rule been prepared for several stations under powers granted by states. The standard construction, with the largest amount of tool used by local governments to development slated for the fast-growing regulate land and enforce specific plans, technology-driven employment center, such as those for station areas, is zoning. Cary. North of Charlotte, the town of Zoning brings macro-visions of the Huntersville has prepared a TOD plan future down to the parcel level, to complement its neotraditional zoning providing a fine-grained interpretation of ordinance. The town’s TOD-R district TOD. Once regulations are written that promotes residential growth with embrace compact growth, a pedestrian compatible commercial uses within a orientation, and mixed uses, TOD 1 ⁄2 mile of rapid transit stations; the visions can be implemented on a case- TOD-E district, meanwhile, promotes by-case basis, in a consistent fashion, as high-density office employment with a city goes about its regular business. FARs between 0.5 and 1.5 within Incremental implementation through walking distance of transit stations. zoning is especially important in big Huntersville’s TOD plan is an cities that are essentially built out and outgrowth of a 1999 design charrette, prime for strategic infill development.3 led by New Urbanist Andres Duany, which forged a community consensus Traditional, or Euclidean, zoning to transform an abandoned garment separates land uses, sets density factory into a multi-use retail- thresholds and minimum lot sizes, and entertainment-hotel-civic complex that usually contains explicit regulations such will open onto a planned commuter rail as bulk and height controls and station. The nearby cities of Cornelius minimum parking. With TOD, however, and Davidson have developed similar traditional zoning is often turned on its plans that orient future growth to head (i.e., uses are intermixed, not planned rail stations. excluded, and parking caps, rather than parking floors, are sometimes set). A semi-rural setting where transit- oriented zoning has been introduced is TOD Overlay Zones Garfield County, Colorado. There, a “Transit Planned Urban Development” To allow for TOD, a municipality can district has been formed, and various create a special TOD zone or change streetscape improvements have been existing classifications. Officials in made to bus corridors. Chapter 16 reviews Mountain View, California, for example, experiences with TOD planning and recently rezoned 40 acres of industrial zoning in semi-rural areas of Colorado. land for 520 housing units adjacent to the Whisman light-rail station. More TOD Zoning common than either rezoning or new designations, however, is the creation of By and large, local governments wield an overlay zone. As its name implies, an almost complete control over overlay zone is placed on the zoning

63 map over a base zone. The overlay facilities to be installed within 50 feet of modifies, eliminates, or adds regulations building entrances of all new office and to the base zone. Overlays provide for multifamily structures. Even the city of effective land-use control without Phoenix, long considered a haven for increasing the complexity of the automobile travel, is planning an interim regulations. TOD overlay zone as it moves forward with its Valley Metro Rail program. A growing list of U.S. cities—San Diego, Seattle, Portland, Eugene, San TOD Land Uses Antonio, Oakland, Columbus, Durham (NC), Mountain View (CA), Morristown Besides identifying unwelcome land (NJ), and Bayonne (NJ), among others— uses, like automobile repair shops, TOD have introduced overlay zoning in recent zones often specify activities that are years to existing or planned station areas permitted as-of-right, such as housing to promote complementary mixed-use and convenience shops. Lynwood, development. San Diego’s overlay zone Washington, for example, has created a is the chief instrument for implementing special mixed-use/transit-supportive transit-supportive design guidelines zone that grants special use permits to introduced early into the city’s light-rail any of the following services that are program (see Text Box 4.1). sited near transit stops: banks, professional businesses, retail stores, An overlay district can be an effective offices, and child-care centers. interim tool when demand for land around a station is strong. To prevent Permissible uses often depend on the automobile-oriented uses before station type of TOD; large-scale urban TODs, area plans could be enacted, the city of for example, might allow regional trip Portland created interim overlay zones generators like entertainment complexes, along the westside light-rail extension to whereas neighborhood-scale TODs are Hillsboro. Similarly, the city of Seattle’s apt to ban such activities. Figure 4.2 interim overlay district prohibits portrays the land-use mixes and site- automobile-oriented uses and lowers design features recommended by noted 1 parking standards within a ⁄4 mile of TOD designer Peter Calthorpe. These proposed light-rail stations to preserve standards have been adopted by a host future TOD opportunity areas (see of cities that have hired Calthorpe and Text Box 4.2). It has since been replaced his associates over the past decade to by permanent overlay zones at seven prepare local design guidelines and planned light-rail stations. To prevent TOD ordinances, including Portland, big-box retailers and automobile- San Diego, Salt Lake City, and oriented designs from preempting TOD, Minneapolis. Calthorpe calls for in 1998 the city of Minneapolis enacted the employment and commercial 1 interim overlay zones within ⁄2 mile of components of a TOD to increase the planned Hiawatha light-rail corridor. as it becomes more urban. Parking ceilings were also set for TOD zones. Besides placing a maximum “lid” The Puget Sound Regional Council on parking, Columbus’s interim TOD suggests that to ensure a good balance overlay zone requires bicycle parking of activity within a TOD, the number

64

San Diego’s TOD Zoning and Design Guidelines

The city of San Diego pioneered TOD zoning in the early 1990s, relying upon zoning overlays, interim zoning, and floating zones to promote compact, mixed-use development around light-rail stops. A key document in framing the city’s zoning initiatives was the 1991 Transit-Oriented Development Design Guidelines, prepared by Peter Calthorpe and local planners.4 The guidelines present a typology of TODs. At the upper range of the hierarchy are regional-serving TODs that feature large mixed-use cores with supermarkets, professional offices, restaurants, and retail shops. Village greens and public plazas are also included. Neighborhood TODs, on the other hand, focus on moderate-density, grid-street designs that connect residents to rail stops and feature neighborhood parks. The guidelines stress that TODs should be inviting to pedestrians, with buildings that open onto sidewalks and design elements that enliven streets and form a pleasant walking milieu. According to the Guidelines, the following design principles are to be applied when station-area plans are drafted: Buildings must be of sufficient intensity to create safe and active streets enhanced by a sense of enclosure and visual interest, and to support transit. Orienting buildings to public streets will encourage walking by providing easy pedestrian connections, by bringing activities and visually interesting features closer to the street, and by providing safety through watchful eyes and activity day and night. Moderate to high intensities also support frequent and convenient transit service; and retail centers can provide a greater variety of goods and services if more residents and employees are within close proximity. Recommended residential densities are 12 to 25 dwelling units per net acre; single- family detached housing should be built at 12 to 17 units per acre on small lots with ancillary units (“granny flats”) on some parcels. Office densities vary according to parking provisions, with FARs of 0.35 to 0.6 for projects without structured parking and 0.5 to over 1.0 (with exact amounts set by community plans) for those with structured parking. In recognition of shared-parking possibilities, the city of San Diego recommends below-code reductions of 2% to 15% for different types of land uses in urban TODs. Also, retail, office, and public uses can count on-street parking spaces adjacent to their properties toward meeting minimum parking requirements.

San Diego’s Transit-Focused Hazard Center TOD, Mission Valley Districts Trolley Line

Text Box 4.1 Seattle’s Station-Area Interim Overlay Zoning District

Seattle’s City Council passed Station-Area Overlay Zoning legislation in 2001 to preserve opportunities for transit- and pedestrian-oriented development around proposed Link light-rail stations and the voter-approved 14-mile monorail extension. Overlay zoning districts embody the following TOD characteristics:

1 • A radius that extends up to 1,320 feet ( ⁄4 mile) of a station or stop; • Medium- to high-density residential development;

• Presence of a commercial or mixed-use area where goods and services are

available to the public, with opportunities for enhancing the pedestrian

environment;

• Opportunity sites for new developments with good access to transit, bicycle, and

pedestrian modes; and • Single-family development only if minimum density standards are met.

Seattle’s overlay zoning district further requires conditional use permits for residential development in a pedestrian-designated zone that might otherwise be preferable for commercial and retail activities (i.e., bigger trip generators). Residential uses are prohibited at street level along principal pedestrian streets, and single-purpose residential structures are prohibited if they are located within a zone that has a height limit of 85 feet or higher. The district further defines activities that are prohibited, such as drive-in businesses and industrial uses. Flexible parking standards, on the other hand, are encouraged. Design standards call for the placement of parking between the rear or side lot lines of a structure. Also, nonconforming uses (such as gas stations, heavy commercial services, mini-warehouses, and vehicle repair shops) cannot be expanded by more than 20% of the existing gross floor area of an existing use. Besides light-rail and monorail station areas, overlay zoning is also being applied to two bus- based TODs: Convention Place Station, at the north end of the downtown bus tunnel, and Northgate Transit Center, a high-density, mixed-use urban development on the “super block” south of the Northgate Mall, which is to be built on 8 acres now occupied by two King County Metro park-and-ride lots.

TOD in Seattle. The Central Link light-rail line (left photo) suffered a setback when local voters turned down a sales-tax referendum in 2002; current plans call for a 2011 opening, assuming funding can be obtained. Top right photo shows a rendering of light rail as a “redevelopment catalyst” in Seattle’s Rainier Valley. Bottom right photo shows the existing transit center at the Northgate Mall, which will soon be flanked by hundreds of apartments, retail shops, restaurants, and entertainment venues.

Text Box 4.2 TOD Densities Use Neighborhood Urban TOD TOD Public 10 – 15 % 5 – 15 % Some TOD zoning codes specify Core/Employment 10 – 40 30 – 70 Housing 50 – 80 20 – 60 residential density thresholds. Table 4.1 reveals these can be as low as 7 dwelling units per acre for bus-based neighborhood TODs to 30 units per acre 1 for larger TODs within ⁄8 mile of a light- rail station. For non-residential uses, minimum FARs are sometimes defined in hopes of not only generating transit riders but also creating lively streetscapes and minimizing dead spaces created by surface parking lots. Based on a review of 11 TOD design guidelines across the United States, Reid Ewing concluded that the following rules of thumb are appropriate: 7 units per acre (basic bus

Figure 4.2. Land-Use Prototypes for TODs. Source: P. Calthorpe, The Next American Metropolis: Ecology, Community, and the American Table 4.1. Recommended Residential Dream (Princeton: Princeton Architectural Press) 1993. Density Thresholds for TODs Minimum City/ Residential Source TOD Type Densities (Dwelling of jobs should not exceed the number Units/Acre) of residents by more than three to one.5 Urban TOD 25 NJ TRANSIT, in its design guidelines, San Diego (light-rail served) (18)

encourages mixing of uses within TOD Guidelines Neighborhood station areas to generate peak and off- TOD 18 peak ridership (e.g., mixing offices with (Bus served) (12) Urban TOD 15 entertainment uses encourages activity Washington (light-rail served) (7) 6 County, beyond normal business hours). In general, industrial uses are discouraged Oregon Neighborhood in TODs, although not always. The city (Land Use and TOD 8 Transportation (Bus served) (7) of Seattle bans manufacturing activities Air Quality from TODs since such uses have few Study) workers per acre. However, the city Light-Rail Served 30: 0–1/8 mi of San Diego’s TOD design guidelines Portland Tri TOD 24: 1/8–1/4 mi hold that light industrial uses with Met, TOD 12: 1/4–1/2 mi Guidelines Bus Served low employment densities can be TOD 24: 0–1/8 mi appropriate in some TODs if they 12: 1/8–1/4 mi are located outside of the mixed-use Source: Community Design + Architecture, Model core and are compatible with other Transit-Oriented District Overlay Zoning Ordinance TOD uses. (Oakland: 2001).

67 services); 15 units per acre (premium bus services. The Crossings replaced an aging service); and 20 to 30 units per acre (rail and under-performing shopping center services).7 Such numbers are not based with 400 housing units clustered around on widely accepted research findings nor a Caltrain commuter rail station. (See are they universally applicable. They Text Box 4.3.) The city of Mountain View merely represent thresholds found in zoned the land on which The Crossings transit-agency design guidelines and are sits for compact, mixed-use development not necessarily relevant to specific sites according to TOD-supportive design or corridors. guidelines. Net residential densities at The Crossings include single-family homes By way of example, The Crossings in at 12 units per acre, townhouses and Mountain View, California, is noteworthy rowhouses at 30 units per acre, and for its adaptive reuse of a marginal site in apartments at 50 units per acre. The an older suburban area with good rail average net density is 22 units per acre,

The Crossings, Mountainstation View, access. California Nevertheless, some U.S.

The top left diagram shows a former shopping mall, surrounded in big-box retail fashion by acres of asphalt parking. The bottom left diagram shows the site design of The

Crossings, a residence-based TOD, with the new Caltrain station at the top. The right top photo shows row homes coming in at 30 units per acre, and the bottom right photo shows zero-lot-line single-family residences in the range of 15 to 18 units per acre.

Text Box 4.3

68 which places all units within walking patronize transit. Guidelines normally distance of the train station. call for densities to decline from the core of an urban TOD in a “wedding cake” What about the densities for employment fashion, so as to put more people closer and commercial uses? Peter Calthorpe to the train station (see Figure 4.3). suggests a minimum FAR of 0.35 for Research suggests that density gradients nonresidential activities in TODs, while that decay exponentially with distance the Puget Sound Regional Council from a station maximize ridership.10 suggests a target of 0.5 to 1.0 for commercial developments without TOD Parking Codes structured parking and at least 2.0 for developments with structured parking. Rail transit has always had a The Regional Council further contends schizophrenic relationship with parking. that employment densities of 25 jobs per On the one hand, acres of surface gross acre will support frequent, high- parking detract from the walking, capacity transit service. This density human-scale quality of stations. Yet, 1 translates into 15,000 jobs within a ⁄2-mile radius of a station. For light-rail service, employment densities of 50 jobs per gross acre are needed.8 A recent national study on transit and urban form estimated that downtown densities of 100 workers per gross acre translate, on average, into 300 boardings per day for suburban light- rail stations that are surrounded by low- density residences (of five persons per acre) 20 miles from a downtown.9

Among medium-sized cities, Denver has pushed the envelope for commercial densities in TODs. Through Blueprint Denver, the first overhaul of city zoning regulations in 50 years, the new zoning designation of transit mixed use (TMU-30) allows FARs of up to 5 to 1; parking requirements for areas close to light-rail stations are slashed 25%. To qualify for TMU-30 zoning, sites must cover at least 12 acres and be a short walk from a station platform. See Chapter 16 for further discussion on Denver’s bold TOD zoning initiatives. Figure 4.3. Density Gradations for an Urban TOD at 18 Dwelling Units How densities are arranged within a per Acre (du/ac). Source: P. Calthorpe, The Next American Metropolis: Ecology, Community, and TOD zone can have a bearing on whether the American Dream (Princeton: Princeton residents and workers are inclined to Architectural Press, 1993).

69 in the vast majority of suburban settings, densities are so low and feeder bus services are so meager that park-and-ride is the only viable means of station access. Nevertheless, some U.S. cities have sought to flex or even lower TOD parking standards. The city of San Diego recommends reductions between 2 and 15% for land uses in the urban TODs. Photo 4.1. Shared Parking Sign at The cities of Denver and Dallas have San Diego’s Grossmont Trolley similarly enacted language reducing the Station. Parking demands of transit number of parking spaces in mixed-use stations and entertainment venues districts near rail stops. dovetail nicely. Theater-goers can use Trolley Station parking on evenings The city of Portland, meanwhile, has and weekends, and Trolley park-and- adopted parking maximums for several riders can use theater parking spaces TODs, including the recently opened Monday through Friday, from early Cascade Station/Portland International morning to early evening. Center Plan District. Montgomery County, Maryland, reduces minimum parking requirements for office uses in A survey found that nearly one-third of close proximity to Metrorail stations. theater employees commuted via transit, compared with a regional transit market Some cities allow projects within TODs share of just 3% for work trips.12 The to count on-street spaces in satisfying arrangement generates $40,000 in annual minimum parking requirements. The city lease revenues for MTDB. of San Diego, for instance, allows retail, office, and public uses to count as on- While capping automobile parking street spaces for parcels adjacent to San supplies, some jurisdictions have called Diego Trolley stations. Short-term for minimum levels of on-site parking parking meters are sometimes installed to requirements for bicycles. The Mid-Ohio ensure high rates of customer turnover. Regional Planning Commission, which San Diego is also noteworthy for its serves the greater Columbus area, has shared parking initiatives at Trolley stops, proposed a model TOD ordinance that a de facto form of capping parking requires that bicycle parking be installed supplies. There, the regional rail for all office and multifamily structures authority, Metropolitan Transit as well as freestanding commercial uses Development Board (MTDB), entered and that it be located within 50 feet of into a license agreement with a theater the central or most frequently used owner to share the transit-agency parking building entrances (see Table 4.2). lot at the Grossmont Station (Photo 4.1).11 Zoning provisions requiring showering For use of the parking lot, the theater facilities for cyclists have been pays MTDB an annual lease. Theater- recommended in Atlanta’s Lindbergh goers can use the parking lot at all hours, Station District and similar guidelines subject to the same limitations as Trolley have been enacted around Mountain patrons (e.g., no parking over 24 hours). View’s Caltrain commuter-rail station.

70 Table 4.2. TOD Bicycle Parking marshals who complained that planned Requirement for Model Overlay streets were too narrow (for safety and Ordinance, Columbus, Ohio, Region liability reasons) and neo-traditional Minimum Bicycle planners who insisted they were too wide Land Use Parking Requirement (and thus oriented to automobiles). Multifamily 1.00 space per dwelling residential unit Implementation Tools and Ratings Retail 0.50 spaces per 1,000 sq. ft. Office 0.25 spaces per 1,000 sq. ft. To the extent that TOD represents a Industrial 0.14 spaces per 1,000 sq. ft. desirable land-use outcome, a number of Source: Mid Ohio Regional Planning Commission, planning, policy, and implementation Model Transit Oriented Development Zoning Overlay tools are available to local entities to District (Columbus: 1999). encourage TOD. In addition to zoning strategies, these include density bonuses, Zoning Obstacles favorable lending terms through dedicated bonding issues, direct grants It should be noted that not all TOD or loans, assistance with land assembly, zoning has met with success. Clark relaxed parking standards, streamlined County, Washington, north of Portland, development reviews, and other Oregon, adopted a TOD ordinance in mechanisms that encourage developers 1995 that was repealed a year later to undertake projects that might not fit because of an anti-regulatory backlash their usual business model. mounted by small businesses and employers. The city of Vancouver, Among the many available Washington, adopted a TOD ordinance implementation tools, which have the same year, and while still on the been applied most widely in practice? books, the absence of any firm Figure 4.4 summarizes experiences to guidelines on what goes within a TOD date as identified by survey respondents. has rendered it, according to local Percentages are broken down by accounts, “toothless.” Such roadblocks instances where tools have been applied to TOD implementation are taken up in for both rail and bus services. To date, the next two chapters. U.S. rail cities have been most aggressive in applying policy tools to leverage TOD. Implementing TOD zoning and design Also included in the table are the mean guidelines can also give rise to “effectiveness ratings” of each tool as unforeseen institutional conflicts. Many assigned by public-sector survey transit-supportive design manuals call respondents (based on a 7-point Likert for generous turning radii at street scale, where 1 is the lowest score and 7 is intersections to allow buses to negotiate the highest). Tools are listed in the table turns. Such designs are generally at odds in descending order (from right to left) of with the minimalist street designs mean effectiveness, revealing the degree advanced by neotraditionalists and TOD to which those that are rated the highest advocates. In the case of proposed TODs have been embraced in practice. in California, Oregon, and Virginia, developers have been caught in a crossfire The most widely applied tool to leverage between traffic engineers and fire TOD has been the expenditure of

71 Bus Transit Systems Rail Transit Systems Mean Effectiveness Rating

5.6 80% 6 5.2 5.3 4.9 4.9 70% 4.7 4.7 4.5 4.6 4.3 4.4 4.4 5 4.2 60% 3.9 4 50%

40% 3

30% 2 20% High) (1:Low; 7: 1

10% Rating Mean Effectiveness

entage Where Tool Applied entage Where 0% 0 rc

Pe et elp nds ding H o n bly ty Bonuses zed Housing ssem ncy Standards Tax Abatement Eminent Domain rking Standards Capital Fu reamlined Review nd A Planning Funding St Subsidi nd on Open Mark Tax-Exempt B ncurre La La UnderwritingZoning/Densi Land TaxCosts Increment Financing Buy om Co Relaxed Pa

ion fr

Exclus TOD Tools Figure 4.4. Transit Agencies’ Experience with and Perceived Effectiveness of TOD-Supportive Policy and Planning Tools. planning funding, in most instances to increase the residential floor areas to pay for consultants to prepare strategic twice a parcel’s lot area if at least 20% station-area plans. Next most common of the units are affordable.14 Developers are zoning/density bonuses and relaxed must agree to keep the units affordable parking standards, followed by capital for at least 15 years. In suburban Chicago funding (for ancillary improvements like and greater Denver, there are good streetscape enhancements and pedestrian examples of capital improvements, such ways). Near the Ballston Metro station in as refurbishment of aging commuter-rail Arlington, Virginia, bonuses have been stations and provision of shared parking introduced to create housing and retail facilities, which have attracted private spaces in buildings that would otherwise investment to station areas (see be exclusively office space, creating a Chapters 14 and 16, respectively). 24-hour district. Density bonuses in Montgomery County, Maryland, have Figure 4.4 shows that a number of U.S. been used around the Bethesda and rail cities have also introduced land- Silver Spring Metro stations to relieve based policies, such as buying land on developers of the cost burden of an the open market (for land banking), as inclusionary housing ordinance that well as providing land assembly help. mandates affordable unit set-asides.13 In the San Francisco Bay Area, for The city of Atlanta’s Lindbergh Station instance, redevelopment agencies have District also includes an incentive for been instrumental in assembling and affordable housing. Developers can delivering to master-builders large plots

72 of land that accommodate major mixed- $11 million was provided through use projects at Pleasant Hill, El Cerrito 40-year, fixed-rate, tax-exempt mortgage del Norte, and Fruitvale stations. In the revenue bonds issued by Contra Costa case of El Cerrito del Norte, the city’s County. The loan proceeds were insured redevelopment agency forged a workable through the FHA coinsurance program, partnership to create Del Norte Place, a 221(d)(4), which gives the bonds a mixed-use project with 135 multifamily Government National Mortgage units (20% of which are affordable) and Association guarantee and thus a 21,000 square feet of street-level superior bond rating. Remaining funds commercial space (Photo 4.2).15 The were in the form of equity provided by redevelopment agency acquired a site the Del Norte Place Limited Partnership. next to the BART station for $3 million The Ibex Group contributed through the issuance of qualified approximately $3.2 million. Low- redevelopment bonds and then leased it income housing tax credits were to the Ibex Group, the project owner- syndicated to 30 individual limited developer, for a 65-year period. The partners for a further $1.8 million in redevelopment agency in return will equity contributions. Moreover, the receive 20% of the net project cash flow Contra Costa County Department of (after the 5th year) and 20% of the share Community Development kicked in of retail-sales proceeds.16 Construction $200,000 in block grants. BART joined and permanent financing of some the partnership by selling an easement for parking under the adjoining elevated track.

As Figure 4.4 shows, implementation strategies that are procedural in nature, like streamlined review and exclusion from concurrency standards, have not been put into practice very often. Where applied, however, they have made a difference. According to the lead developer, the 86-unit Atherton Place project near BART’s Hayward Station owes its existence in large part to the local redevelopment authority, which expedited the project through the city’s bureaucracy. As noted in the next chapter, this sentiment is often heard among TOD developers. A good example of TOD-friendly evaluation standards comes from Santa Clara County, California, where sliding-scale impact fees have been used to bring down the cost of affordable housing at Photo 4.2. Del Norte Place Mixed-Use several light-rail stations where parking TOD, El Cerrito, California. lots have been infilled. The county,

73 through its Congestion Management It bears repeating that most of the Agency, recommends that localities implementation tools listed in Figure 4.4 reduce the estimated traffic impacts of have not been applied by transit agencies new housing projects by 9% if they are themselves, but rather by municipalities within 2,000 feet of a light-rail station or other local interests. The most and 2% if they are within 2,000 feet of common contributions of transit a bus stop. Trip generation rates for agencies have been capital and planning mixed-use projects are further adjusted funding as well as acquisition of land on downward. The Los Angeles MTA has the open market. recently followed suit, offering a 15% credit for residentially oriented mixed- In terms of mean effectiveness rating by use projects that have at least 24 units public-sector respondents, the most 1 per acre and that are within ⁄4 mile of a highly regarded tools are fiscal light-rail station. The biggest credits for measures, like capital funding, tax- a mixed-use TOD were given to the exempt bonds, and planning funding. 34-acre mixed-use megaproject at Those working “in the trenches” of TOD WMATA’s White Flint Station in the implementation seem attuned to the Washington (D.C.) Metropolitan Area. notion that “money matters.” In keeping Traffic mitigation credits granted to this with their more limited use, procedural project in light of its proximity, mix, and tools like concurrency exemptions and orientation to transit were streamlining of permit reviews are generally considered to be the least • Mixed-use reduction: 10%–25%; effective. The simple correlation • Proximity to station reduction: 40% between usage of a tool and its mean for apartments, 50% for offices effectiveness rating was a respectable (a.m. peak), 28% for offices +0.668. For the most part, tools that are (p.m. peak), 25% for retail, viewed by public-sector stakeholders as and 5% for cinema; and most effective at leveraging TOD are the • Traffic management reduction: ones actually being used by transit 10%–23%. agencies and their local government partners. Together, these measures afforded the project a 45% reduction in estimated TOD developers and other private vehicle trip generation rates. Smart- interests generally have a different growth planning requires a smart perspective on the effectiveness of tools. calculus, such as in these TOD As discussed in the next chapter, examples. Through sliding-scale impact interviews with real-estate developers assessments such as those used in from across the United States (all with northern and southern California and the firsthand experience with TOD projects) nation’s capital, mixed-use projects built revealed that tools that increase near light-rail stations end up paying certainty, reduce turnaround time, and considerably lower impact fees than upgrade transit services are generally other comparably sized projects. preferred. However, developers also Presumably, some of these savings get generally agree that supportive zoning, passed on to tenants, thus boosting the help with land assembly, funding set- market demand for TOD. asides for streetscape improvements, and

74 other tools within the sphere of public- Figure 4.5 summarizes the views of sector control can be a boon to TOD transit-agency respondents regarding implementation in some circumstances. desired roles of higher levels of government; rankings were similar Help from Above among respondents from municipalities and redevelopment agencies. Initiating Survey respondents from transit planning grants and targeted agencies, municipalities, and infrastructure funding (such as for new redevelopment authorities were also highway access or regional utility asked to weigh the importance of improvements) were actions that higher- initiatives introduced by higher levels of level governments could take that were government (e.g., regional, state, and most valued among local-level federal) toward promoting TOD. While respondents. Smart-growth initiatives, the hands of higher-level governments typically introduced at the state level, are often tied when it comes to were also generally looked on favorably. exercising direct control over land use or Smart-growth legislation often ties state the behavior of developers and lenders, infrastructure dollars to local anti-sprawl state and federal authorities can exert programs, as in Maryland where counties influence by introducing financial must designate priority funding areas incentives or providing local and faithfully strive to restrict growth to governments with the legislative and those areas. State tax-abatement statutory means to enact smart-growth programs introduced through smart- measures like TOD. growth initiatives were looked upon

Initiative: Planning Grants 4.5

Targeted Infrastructure Funding 4.0

Smart-Growth Legislation 3.8

Tie Capital Grants to Local TOD Commitments 3.6

Concurrency/Adequate Public Facilities 3.3 Ordinance Requirements

Required Siting of Govt. Buildings Near Transit 3.2

Development of Regional Impact Requirements 3.1

2345 Mean Rating (1=minimal; 4=moderate; 7=significant) Figure 4.5. Transit-Agency Respondents’ Mean Importance Rating of Initiatives by Higher Levels of Government to Promote TOD.

75 favorably by local respondents from big marketplace. Still, transit agencies, rail cities. Like the state of Oregon, local and regional governments, and which authorized tax exemptions for redevelopment authorities have turned multifamily housing near transit stops, to a variety of sources to finance Minnesota’s state legislature has sought ancillary improvements and amenities, to incentivize TOD, although unlike like sidewalks, civic plazas, and under- Oregon, its focus is on commercial grounding of utilities. Such development. In 1996, Minnesota enhancements, proponents contend, authorized a 12 to 15% tax break for can be a catalyst to private investment, commercial and industrial projects that particularly in marginal neighborhoods 1 lie within ⁄4 mile of high-frequency bus suffering from an image problem. This or rail stations. High-frequency stations section reviews experiences with are defined as either regional transfer funding TODs and the physical armature hubs or stations served by routes with associated with them. Funding tools and 30-minute or shorter headways during finance issues are discussed from the peak hours. perspective of four public stakeholders: transit agencies, municipalities, Regulations imposed by higher levels redevelopment agencies, and MPOs. of government generally received low Chapter 5 discusses finance further, marks among local respondents. although from a private-sector Strictures such as adequate public perspective. facilities ordinances, required siting of government buildings near rail stations, Transit Agencies and DRI requirements (such as those recently introduced in Georgia and Rarely, if ever, are general funds from Florida) were not of much interest to transit agencies’ budgets used for many local respondents. Despite such ancillary improvements like streetscape low ratings, some of these higher- upgrades; transit operations and on-site government measures have paid off capital investments usually lay claim to nicely; an example is the ridership boon any discretionary agency dollars. A that followed the Franchise Tax Board’s number of transit agencies have received recent opening of its new headquarters federal and state grants, through such near an existing Sacramento light-rail entities as TCSP, to finance ancillary station (see Text Box 4.4). Overall, improvements around stations. In the local-level interests place the highest national survey, transit-agency value on federal, state, and local respondents were asked to identify initiatives that provide capital “concrete whether different funding sources have and steel” improvements to TOD been used to finance either the pre- districts as well as cash grants and are development (e.g., planning) or actual less enthusiastic about those that are construction of TODs and their procedural or broad-based in nature. appurtenances. Table 4.3 summarizes the responses. For the most part, non-grant Funding TOD: Public Perspective sources have been used sparingly to finance ancillary improvements around As with most real-estate development, stations. Besides inter-governmental TOD occurs largely through the private grant transfers, individual investor funds

76

Building a State Office Campus Near Light Rail

With multiple locations in Sacramento, California’s Franchise Tax Board (FTB) wanted to unite employees on a single campus site. State-owned land near the Butterfield light- rail station, where two preexisting FTB buildings stood, was chosen as the desired site, in keeping with a state mandate that requires relocated state-government offices within a rail transit service district to be within walking distance of a station. The Butterfield station served as a catalyst for the design of a pedestrian-friendly, human-scale project focused on light-rail transit. The state entered into a joint development agreement with Sacramento Regional Transit to use portions of the existing Butterfield light-rail station for the expanded facility. The 1.85-million-square-foot campus includes a town center building, two new office buildings, and an existing tax processing building, all linked by an indoor pedestrian main street. The town center, which is open to the public, serves as the front door to the campus and includes a dining facility, auditorium, daycare facility, and various sundries and shops. The complex includes 300 bicycle lockers and shower and change facilities. Proximity to the light-rail station and various transportation- demand management measures reduced the number of parking spaces needed by about 1,500. A light-rail passenger can step off the train, walk 75 feet, enter the town center building, and reach various facilities on campus without going outside. Still, all good campuses invite outdoor activities; thus, the FTB project includes a 1.8-acre courtyard connecting two office buildings and a landscaped plaza to the light-rail station.

New Warehouse Butterfield Entry . Existing Light d RT Parking New Butterfield Way Rail Station Extension som Blv Fol New Town Future Oates Center RT Parking Dr. Connection New Office Building Proposed Complex Theater/Retail Complex Staff Parking Staff Parking

Ma Rd..

yhew

M AY

H

E W

Bldg. 1 ROA

Mayhew D Bldg. 2 Entry 0 Frwy. 5 Central Plant North

Text Box 4.4

77 Table 4.3. Non-Grant Funds Used by planning and construction grants that Transit Agencies to Leverage TODs can go toward TODs, but just 10 of the 90 respondents (11%) have received Number and Agencies Using such grant funds to date. Lane County Funds for: Type of Transit in Eugene, Oregon, for instance, Fund Predevelopment Development received funds from the Oregon Pension 1: RTD-Denver 2: SamTrans; Department of Transportation to pursue Funds WMATA TOD planning around several BRT Union 0 2: TriMet; Funds SamTrans stations currently under construction. BART received state Environmental REIT 2: BART; RTD- 2: BART; Funds Denver WMATA Justice Grants to conduct community- based planning around six inner-city Individual 7: BART; 10: BART; Investor Jacksonville Jacksonville rail stations. Funds Transit; Metro Transit; North; Miami- Maryland What about joint development projects? Dade; TriMet; Transit RTD-Denver; Administration; Where have transit agencies generally WMATA Metro North; secured funds to finance their share of Miami-Dade Transit; NJ public-private co-ventures? Figure 4.6 TRANSIT; reveals that traditional funding sources— Riverside grants and loans—have largely been Transit; Southwest relied on for these purposes. As a set- Metro (MN); aside, individual investor funds have been TriMet; used more often to pay for advanced WMATA planning and other predevelopment Nonprofit/ 5: BART; Kitsap 5: BART; activities. Sources more directly Foundation Transit (WA); Kitsap Transit Funds Miami-Dade (WA); Miami- controlled by equity owners, like union Transit; RTD- Dade Transit; funds and REIT funds, are used far less Denver; TriMet RTD-Denver; frequently for transit joint development. TriMet A majority of surveyed transit properties with joint development projects have have been most widely used for planning built-in financial safeguards. Over three- and constructing TOD improvements. quarters of surveyed transit properties These funds are followed by nonprofit with joint development projects have and foundation funding in frequency of equity partnerships in which the agency usage. Pension, union, and Real Estate receives a share of profits from the sale Investment Trust funds (REIT) have of properties. This is usually in return for been used sparingly. the transit agency having written down land costs (and occasionally having BART and Denver’s RTD have been donated land outright). An equal share particularly proactive in tapping into of surveyed transit properties receives various fiscal resources in order to guaranteed minimum rents, regardless leverage TOD. of market cycles. A slightly smaller share—58% of respondents— Nearly half of the transit-agency survey participates directly in the profits of respondents said their states offer private real-estate ventures. Less

78 Funding Source:

15.0% Grants/Loans 6.0%

Individual Investor 12.0% 14.0% Funds Nonprofit/Foundation 9.8% Funds 6.0%

7.7% Pension Funds 0.0% Development

2.0% Predevelopment REIT Funds 4.0%

3.9% Union Funds 0.0%

0% 5% 10% 15% 20%

Percent of Transit Agencies Practicing Joint Development That Have Used Funding Source Figure 4.6. Joint Development Funding Sources, Predevelopment and Development. common is the levy of penalties against in redevelopment districts. Tax developers who finish projects late. One increment financing (TIF), a out of four surveyed agencies practicing quintessential redevelopment-agency joint developments exact a late fee. tool, is often used for reducing the costs of development that the private sector Local Governments might otherwise bear. TIF secures funds by floating bonds based on the Municipalities are not as active as transit anticipated future increases in property- agencies in financing ancillary tax revenues that will result from improvements around transit stations. planned development within the Rarely do general municipal funds go for redevelopment area. Table 4.4 shows these purposes because of other pressing how redevelopment funds have been needs. Special assessments or transfer used within redevelopment districts in grants from higher levels of government four jurisdictions. Three of the four are for the most part relied on by jurisdictions—Houston, Contra Costa municipalities to finance sidewalks and County, and Redwood City—have other streetscape improvements in and spent TIF funds on such infrastructure around transit stations. improvements as roads, utilities, and parking. The La Mesa Community Where one does find direct local funding Development Agency has used TIF to of station-area ancillary improvements is purchase land around a trolley station

79 Table 4.4. Redevelopment Agency Higher Levels of Government Respondents’ Uses of Tax Increment Financing MPO funding sources for TOD planning come primarily from federal and state Redevelopment Uses of Tax- Agency Increment Financing government in the form of pass-through Houston, TX: Midtown * Utilities grants. These include FHWA TCSP Redevelopment Authority * Streets grants; FHWA planning funds under * Curbs * Gutters Section 112-PL; and FTA’s Section * Sidewalks 5303 planning enhancement funds. For * Street lighting * Street furniture example, the Delaware Valley Regional * Landscaping/Irrigation Planning Commission has a 2-year-old Contra Costa County, CA: * Streets grant program (the Transportation and Redevelopment Agency * Drainage Community Development Initiative) that * Utilities * Parking Structure (Public) provides Transportation Improvement * Housing Program funds for TOD planning studies Redwood City, CA: * Infrastructure improvements and other activities targeted to the Redevelopment Agency * Landscaping region’s core cities and inner-ring La Mesa, CA: * A channel was under- Community grounded to provide more suburban municipalities. In a few Redevelopment Agency usable land for new instances, regional planning bodies have development adjacent to a trolley station. used their own funds. Portland Metro, * Public street improvements for example, uses its general funds and land acquisitions were completed for a new as a local match for state and federal development fronting a trolley planning and enhancement grants. As the station. nation’s only directly elected regional governing body, Portland Metro is the exception more than the rule. and underground a stream channel so as to make a parcel more usable and There are no states that provide funding attractive for TOD. TIF, it should be explicitly for TOD planning and noted, is not available in all states, in development, although several (New large part because it is politically Jersey and California) give TODs controversial, effectively subsidizing priority access to state-controlled development by creating tax-privileged transportation funding under certain districts. conditions. State support tends to be more indirect, in the form of technical Besides TIF, special assessments are assistance. State governments do also used to finance TOD improvements. channel funds to pedestrian and bicycle Montgomery County, Maryland, for improvements that can enhance the example, charges a special parking quality of non-motorized access and assessment on new development near the circulation around transit stops. The state Bethesda Metro Station. Developers who of Illinois, for example, under the opt not to comply with requirements for “Illinois Tomorrow: Balanced Growth structured parking must pay a fee that for a Better Quality of Life” initiative, is used by the county to build and recently award $3.7 million in grants; maintain its own multi-story parking some of this money went to improve the lots in the area. walkability of local streets and

80 streetscapes in and around aging survey. Next in the order of frequency commuter-rail stations. of usage have been land-based tools like land purchases on the open market Summary (for land-banking and potential “deal- making”) and assistance with land TOD implementation ideally starts with assemblage. For the most part, a vision, cultivated from broad-based redevelopment agencies have applied public input, and proceeds to strategic these tools, meaning that their role in station-area planning backed by leveraging TOD has been mainly limited appropriate zoning as well as policy to economically depressed or blighted incentives and regulations. Around half neighborhood settings. Because of the of the surveyed transit properties in the higher risk involved, redevelopment United States stated that their regions tools have often been accompanied by have a vision, policy, or plan in place other funding sources, sometimes with that embraces TOD principles. a dozen or more participants involved in the process. The most common means of controlling land uses, densities, and site designs of Implementation strategies that are TOD is overlay zones. Most overlays— procedural in nature, like expediting often introduced on an interim basis to entitlement reviews and excluding head off automobile-oriented uses that TODs from concurrency requirements, might compromise a TOD—specify have been applied less often in practice desired land uses as-of-right, such and are also viewed by public-sector as housing and convenience shops. interests as less effective than other For urban TODs, densities of 20 to measures in jump-starting TOD. As 30 dwelling units per residential acre discussed in the next chapter, this view and FARs of 1.0 and above are not does not square with that of many uncommon. Some of the more TOD developers. progressive TOD zoning districts also lower automobile parking requirements In terms of what MPOs, state DOTs, and sometimes even set bicycle parking and the federal government might do to mandates. help implement TODs, respondents from the local levels stated loudly and The national survey of U.S. transit clearly that what they need most is agencies revealed that, besides standard money—specifically for strategic zoning, the most frequently used tools station-area planning, infrastructure, introduced to leverage TOD are funding and on-the-ground improvements. for station-area planning and ancillary Smart-growth legislation that targets capital improvements; the introduction state infrastructure and urban renewal of density bonuses, sometimes used to grants to transit station areas (which encourage the production of affordable currently exists in the state of Maryland) housing units; and relaxation of parking is also looked upon favorably by local standards. These measures, moreover, interests. Regulations like concurrency received high marks in terms of their requirements, on the other hand, overall effectiveness among transit generally received low grades among professionals who responded to the survey respondents from the local level.

81 For financing streetscapes and other 9 Parsons Brinckerhoff Quade & Douglass, Inc., ancillary improvements around transit R. Cervero, Howard/Stein-Hudson Associates, stations, monies have mostly come from and J. Zupan, “Regional Transit Corridors: The Land Use Connection,” TCRP Project federal and state grants such as the TCSP H-1 (Washington, D.C.: Transportation program under the Transportation Equity Research Board, National Research Act for the 21st Century. The most Council, Washington, D.C., 1995). common sources of non-grant funds used 10 JHK and Associates, Development-Related to leverage TOD are individual investor Survey I (Washington, D.C.: Washington funds and nonprofit/foundation funds. Metropolitan Area Transit Authority, 1987); JHK and Associates, Development-Related Survey II (Washington, D.C.: Washington Notes Metropolitan Area Transit Authority, 1989); R. Cervero, Ridership Impacts of Transit-Focused Development in California, Monograph 45 1 R. Cervero, The Transit Metropolis: A Global (Berkeley: Institute of Urban and Regional Inquiry (Washington, D.C.: Island Press, Development, University of California, 1993). 1998). 11 San Diego Metropolitan Transit Development 2 Specific TOD plans have been adopted for Board, “License Agreement for Parking,” these stations: Pittsburg/Bay Point, Concord, April 19, 1990. This agreement was between Pleasant Hill, McArthur, West Oakland, the San Diego Metropolitan Transit Richmond, San Leandro, Hayward, Union Development Board as Licensor and CCRT City, Fremont, Castro Valley, El Cerrito Properties as Licensee. del Norte, El Cerrito Plaza, and Richmond. 12 Bragado, 1999, op. cit. 3 N. Bragado, “Transit Joint Development in San Diego: Policies and Practices,” 13 Montgomery County’s Moderately Priced Transportation Research Record, Dwelling Unit (MPDU) program, one of the No. 1669 (1999): 22–29. first inclusionary zoning requirements in the United States, stipulates that 12.5% to 15% 4 Calthorpe Associates, “Transit-Oriented of all units in projects of 50 units or more be Development Design Guidelines: City of San set aside for households earning moderate Diego,” Department of Planning, August income (roughly 60% of the area’s median). 1992. In exchange for the set-aside, developers who 5 Puget Sound Regional Council, Creating comply with the program are given density Transit Station Communities in the Central bonuses that allow more units—22% in the Puget Sound Region: A Transit-Oriented MPDU program—to be constructed on the Development Workbook (Seattle, 1999). same amount of land. 6 New Jersey Transit, Planning for Transit- 14 The Atlanta City Council has defined the Friendly Land Use: A Handbook for price of low-income units at 1.5 times the New Jersey Communities (Newark, NJ: city’s median family income and the rent of NJ Transit, 1994). low-income units at 60% of fair market rent. 7 R. Ewing, Transportation and Land Use 15 M. Bernick and R. Cervero, Transit Villages Innovations (Chicago: Planners Press, 1997). for the 21st Century (New York: McGraw-Hill, 1997). 8 Puget Sound Regional Council, 1999, op. cit.; R. Ewing, Pedestrian and Transit-Friendly 16 R. Dunphy, D. Myerson, and M. Pawlukiewicz, Design: A Primer for Smart Growth Ten Principles for Successful Development (Washington, D.C.: Smart Growth Network, Around Transit (Washington, D.C.: The 1999). Urban Land Institute, 2003).

82 Chapter 5

Building and Bankrolling TOD: A Private-Sector Perspective

TOD and the Private Sector among other inputs, to probe a host of TOD implementation issues mainly Real-estate developers occupy the front related to project financing. A series of lines of TOD, organizing the financial, one-on-one phone interviews were physical, and human resources needed to conducted with 35 real-estate developers build projects around transit stations. from across the United States who have Beyond their role in implementation, been involved with projects near transit developers also often have a strong hand stations. The head offices of interviewed in the planning and design of TOD. developers, reflecting, for the most part, Dating from the streetcar suburbs of the where they have been most active, were early 1900s, the history of development distributed as follows: Portland (8), in the United States is replete with San Francisco Bay Area (7), Washington examples of private real-estate interests D.C. (4), Boston (3), Chicago (3), responding to market demand by Denver (3), Atlanta (2), and Los planning, designing, and building projects Angeles, Minneapolis, New York City, around rail stations. Today this tradition Sacramento, and San Diego (1 each). is carried forward by a dedicated corps of Surveyed developers come from large developers who see TOD as a smart public corporations, mid-sized private investment in increasingly congested and firms, and small nonprofit housing and built-out urban areas. These developers community development corporations.1 are drawn to TOD in hopes of making More than two-thirds of the surveyed nice financial profits, but they usually developers indicated that residential require and expect supportive public development is their firms’ main focus.2 policies that allow them to do so. Appendix B presents the protocol used to guide developer interviews.3 The Also essential to TOD implementation experiences of those interviewed are are banks and other lending institutions discussed in this chapter, focusing on the because, after all, as Willie Sutton said financial, market, and public policy when asked why he robbed banks, “that’s issues that affect developers’ ability and where the money is.” At the end of the willingness to undertake TOD. day, the prettiest drawings, most elegant cost pro formas, and greatest intentions of A similar tact was used in soliciting green-minded planners will matter little if inputs from the lending community. those who finance the majority of real- Lenders from four large metropolitan estate projects in the United States are areas—the San Francisco Bay Area (4), unwilling to put their money on the line. Philadelphia (2), Chicago (1), and Los Angeles (1)—were queried about their This chapter draws on interview past experiences with TOD and joint responses from developers and lenders, development projects in the United

83 States. Professional staff members household of a male breadwinner, stay- known to have been involved in making at-home mom, and two kids is pretty loan decisions for TOD projects were much a thing of the past, especially in interviewed over the telephone.4 While big U.S. cities with rail systems. an interview protocol was used to guide Nationwide, the share of “non- the discussions (shown in Appendix C), traditional” households—single parents, for the most part, interviews were open- childless couples, divorced or never- ended and conversational, covering married people, or two or more unrelated topics that the interviewees felt were adults—rose from 69.8% in 1980 to most important, on their terms. Lender 76.5% in 2000.5 The numbers of new- interviews were often factual and to the immigrant households are also on the point, peppered with anecdotes and rise, and the location of choice for new frank opinions. immigrants tends to be big cities where economic opportunities are the greatest; The Market for TOD big cities, of course, are also where urban rail systems are concentrated. Developer interest in TOD stems in large Many recent immigrants from Latin part from the fact that the market for America and Asia are accustomed to transit-oriented living, working, and transit and understand the value of living shopping continues to expand, and working near regional rail systems. particularly in big cities that are They constitute a natural niche market increasingly choked with traffic. Traffic of TOD dwellers. Also, as America congestion, in particular, is prompting continues to “gray,” retired couples more and more Americans to pay a seeking to downsize are increasingly premium for housing near rail stations, opting to locate in walkable even if it means living in smaller houses neighborhoods that are well served by on smaller lots. Between 1990 and 2000, transit. (Projections are eye opening; by the average travel time to work 2025, more than one out of five residents nationwide rose by 13%, or almost in 27 states are expected to be 65 years 3 minutes, to 25.5 minutes. In big cities of age or over, higher than in Florida notorious for their traffic congestion, today.6) The neighborhoods around like Atlanta and Los Angeles, mean many rail systems are particularly commute times rose by nearly 20%. attractive to seniors because they enable Besides the increased stress that access to cultural and sports events, accompanies traffic congestion, many shopping malls, and other destinations working parents complain about what that appeal to retirees. This is only the John Whitelegg, a transportation case, however, if TODs are perceived to geographer from Great Britain, calls be safe and secure. “time pollution”: being robbed of quality time, time that could be better spent with The many public policies devoted to children and family. smart growth in general and TOD specifically (reviewed in the previous Besides worsening traffic congestion, chapter) have, of course, further the market for TOD is being driven by strengthened the market for TOD. shifting demographics and receptive Policies that seek to increase supplies of public policies. The “Ozzie and Harriet” affordable housing have been

84 particularly important. In many parts this could be changing. At the extreme, of the United States, redevelopment take the GW Terrain housing project, agencies require a set percentage of new in Amsterdam, The Netherlands (see units built within redevelopment districts Photo 5.1). Served by several light-rail to be below market rates. Many rail transit lines, this project is an stations built on disused railroad “automobile-free” residence. Tenants corridors, former industrial corridors, are not allowed to keep private or transitional neighborhoods, where automobiles on the premises land is cheap, happen to fall within (automobile-sharing kiosks are available redevelopment districts. As noted in immediately adjacent to the project). Chapter 4, redevelopment agencies bring While one might assume that a powerful kit bag of tools to the table environmental “greens” and other such as TIF. Other means of financing “progressives” largely inhabit the affordable units used by redevelopment project, in truth, many tenants are authorities include tax-exempt bonds, traditional families with children. Many low-interest loans, loan guarantees, are drawn to the transit-oriented, grants, and direct equity participation. automobile-free project because of its Creating TODs, whether around superb access to Amsterdam’s many Miami’s Overtown Station, Oakland’s cultural offerings and because the Fruitvale Station, or Montgomery project interior is given over to gardens County’s Silver Spring Station, offers a and playgrounds instead of asphalt chance to redress the “twin evils” of parking. That is, the GW Terrain TOD affordable housing shortages and travel is perceived as a safe haven for kids to congestion. play in and grow up in. Projects like the GW Terrain show that if site designs A New Jersey developer interviewed that instill a sense of security by during the course of this research providing “defensible spaces” and “eyes confided that his firm has gotten out on the interior” are built near major of the business of building residential transit stops, TOD can reach a more subdivisions on suburban greenfields. mainstream demographic, including Instead, the firm today concentrates traditional households with children. solely on redeveloping brownfields and grayfield sites, particularly near commuter-rail stations and on the waterfront with ferry connections to Manhattan. These developments are targeted at professional-class workers. The state of New Jersey’s progressive brownfield program, which reduces some of the risks and instills greater certainty in remediating contaminated sites, was a decisive factor in this developer’s reorientation.

While the market for TOD is largely Photo 5.1. Amsterdam’s GW Terrain considered to be “niche” in nature, even “Automobile-Free” TOD.

85 The Decision to Develop much easier by creating a margin of certainty. In the best of worlds, land What factors drive the decision to go use ordinances reflect community forward with a TOD? While the sentiments; however, it is sometimes the presence of market demand is without case that neighborhood interests fight question the overriding factor, the projects that threaten to add traffic even presence or absence of other factors, if they fully conform to local zoning. many outside the direct control of developers, can also have a bearing. This was the case around the Pleasant Interviewed developers were asked Hill BART station. Development plans about 13 factors thought to influence the stalled in 1995 in the face of stiff willingness to go forward with a TOD community opposition, despite a proposal project. These factors are ranked in that fully complied with the area’s land- Figure 5.1 in terms of their importance use plan. The addition of some 2,200 to the development decision. households to the Pleasant Hill Station area over the past two decades led to the The presence of supportive land-use formation of neighborhood associations designations was rated as the most that proceeded to fight all large-scale important factor affecting the decision projects that threatened to draw regional to develop. This bodes well for local traffic into the community. Not until the governments interested in attracting completion of a major community- TOD to their communities; changes to planning process in 1999 did a new zoning are squarely within the purview development proposal begin to find of local government and can be changed traction. With the completion of a with relatively little expense. One successful charrette process in 2002, a developer indicated that supportive land- second-generation TOD is presently use designations are particularly moving through the approvals process. important for small parcels of land, such as infill sites. She explained that the time The second most important factor and effort associated with seeking a influencing willingness to develop, as change in zoning is only justified when expressed by interviewed developers, is there is a large potential return the potential for rent premiums due to associated with a major development. superior location. This is not surprising Small projects need the proper zoning to given the “location, location, location” be already in place. Another developer cliché ingrained in the minds of most mentioned that supportive land-use developers, and it reflects the more designations are most important when general comment, made repeatedly by they reflect clear community sentiment. those interviewed, that development He noted that the most important factor decisions—including decisions to lend, for his firm in deciding whether to invest, or build—are driven by the real- undertake a project is whether the estate market fundamentals. community has gone through a visioning or community-planning process that Most developers interviewed also expresses the kind of development most considered proximity to transit an desired. He feels that when such plans important factor in the decision to have been completed it makes his job develop. Admittedly, the group of

86 Supportive Land-Use Designations 5.5

Potential Rent Premium for Superior Location/ 5.3 Access

Adjacent to Transit Station 5.0

Availability of Tax Incentive 4.1

Extent of Real-Estate Investment Activity in 3.9 Area or Near Site

Mixed-Use Development 3.9

Public-Sector Participation 3.8

Location in Emerging Real-Estate Market 3.4

Unsubordinated Ground Lease with Public 3.4 Agency

Brownfield Issues 3.3

Parking Below Local Standard for Product Type 3.1

Limited Developer Experience with Proposed 2.8 Product Type

Majority of Tenants are Local/Non Credit 2.8

123456 Mean Rating of Importance to Decision to Develop (1 = miminal; 4 = moderate; 7 = significant) Figure 5.1. Importance of Factor in Willingness to Develop, as Rated by Interviewed Developers.

87 developers interviewed was selected attached,” such as requirements that a because of their affinity for doing TOD. certain percentage of housing units be One developer noted that a high tide, or affordable to low- or moderate-income strong real-estate market, “floats all households or requirements to pay union boats, but when the tide goes out it is the or prevailing wages. These developers boats in the best position relative to felt that the public sector should not transit that continue to float.” Other assume its involvement is necessarily developers spoke of a competitive helpful in the implementation of TOD advantage for their TOD products, which unless it is backed by sufficiently large are not easily duplicable because of the monetary incentives. Finally, while limited number of transit-accessible many of the developers surveyed sites. Finally, one developer indicated believed that mixed-use projects work that he was willing to undertake well in certain market contexts, many development at “marginal” sites with looked askance at planning doctrine that good access to transit. It is notable that holds that buildings near transit stops the developers interviewed rated transit must be vertically mixed. Vertical as among the most important factors mixing of uses was perceived to increase affecting their willingness to develop, insurance costs and to create potential despite the fact (as noted later in this conflicts between tenants. Developers chapter) that many indicated that being strongly favor allowing the private near transit has little influence on their sector to make decisions about when it is ability to secure a conventional loan. appropriate to mix uses within the same building. Other factors that influence decisions to develop included tax incentives, public- Unsubordinated ground leases, whereby sector participation, whether or not a private developers and their lenders development is mixed use, and the use of absorb most of the risks should a real- unsubordinated ground leases. Overall, estate venture fail, were not generally tax incentives were rated to be a thought to significantly affect moderately important inducement to development decisions. Indeed, most development. Nonetheless, some developers had no experience in working developers discounted their importance, with such leases. (Whether public noting that tax breaks are not generally agencies are required to use large enough to overcome a difficult unsubordinated ground leases is market and are unnecessary (but still something that varies across state and welcomed) in a strong real-estate market local jurisdictions.) Nonetheless, several where growth happens regardless. developers spoke to the potential Public-sector participation in difficulties associated with building on development was regarded favorably by land with an unsubordinated ground most developers, particularly when used lease from a public agency. Some to spur development in down markets or indicated that unsubordinated leases can provide assistance in the entitlement be an enormously complicating factor, phase. On the other hand, some which has the potential to make some developers were skeptical of public- developments impossible to finance. sector involvement in development, Others indicated that such leases can be noting that there may be “strings done, but they require greater equity

88 participation and reduce developer size and type (whether residential, office, inclination to undertake the project. retail, or industrial) and the firm’s size and credit rating. As an example, Interviewed lenders had a somewhat affordable-housing developers7 who different take on unsubordinated leases were interviewed indicated that they use and public-private partnerships more a wide array of funding sources, generally. Involving multiple parties including conventional debt, low-interest introduces complexity in terms of loans and grants from governmental understanding a project, its credit risks, agencies and community development and the nature and quality of the bank’s organizations, and the sale of tax credits. collateral. Five out of the eight lenders Although this combination of funding interviewed noted that public-sector sources is complex and involves involvement introduces additional considerable public participation, it is challenges in financing a project. typical of affordable housing Unsubordinated leases are a particularly development regardless of whether it is sticky point in the minds of lenders. One undertaken as part of a TOD. In addition emphatically stated: “Unsubordinated to standard financing products, a handful ground leases make the project much of developers indicated that they do tap more complicated due to the large into pools of funding specifically number of parties and different available for TOD. These sources of motivations that they have.” To the monies are generally small albeit degree that joint development produces important in some instances. social benefits like increased ridership and improved air quality, lenders Debt Finance generally believe that subordinated loans that protect the financial interests of What private funding sources have been private groups over those of the public used to bankroll TODs? Nearly all of the sector are appropriate. One interviewee developers surveyed indicated that they suggested: “When agencies do ground used conventional construction and leases, they should look at the greater mortgage financing as the primary public benefit of TOD and joint sources of TOD funding. The BellSouth development.” Ultimately this debate Corporation, which has developed a comes down to what degree the public number of office buildings along the sector is willing to absorb near-term risk MARTA rail line in Atlanta, was one for the purposes of reaping long-term exception; it normally self-funds its benefits. development activity.

Private Financing Developers consistently stated that whether or not projects are TODs does How does being near a major transit stop not affect lending standards in terms of affect how developers fund projects? interest rates, points for securing loans, Interviewed developers felt it had no loan-to-value requirements, or debt effect. A project’s status as a TOD coverage ratios. Comments such as the generally has no bearing on the palette following from a Bay Area residential of financing tools used. For the most developer were common: “I am not part, financing is governed by project aware of any positive or negative impacts

89 on any of these lending standards on they have used REIT funds as an equity TOD. The only potential issue is if there source for TOD. Firms using REIT is no perceived market for a product equity were generally quite large. They type, then a premium might be required.” included a developer in the Bay Area that By virtually all accounts, proximity to has completed six residential TODs transit is a peripheral consideration in totaling approximately 1,500 units, a obtaining loans. Lending standards and developer in Denver currently working the availability of financing are instead on a residential project encompassing tied to conditions in the capital markets 15 city blocks, and mixed-use master and whether the lending community developers from Atlanta and Boston. The believes that there is adequate market Atlanta developer is currently working demand for a real-estate product. on a 4.8-million-square-foot mixed-use project, while the Boston developer has This view was echoed by all eight completed a mixed-use TOD in excess of lenders who were surveyed. 1 million square feet. A few developers Underwriting decisions are based on a indicated that they use outside equity number of factors that need to be sources such as investor pools and considered in the context of each monies from large capital management individual project. None of the lenders funds for TOD. Finally, one developer, interviewed was willing to say that TOD who works exclusively with brownfield or joint development projects have sites, indicated that his firm uses a factors (aside from unsubordinated private equity fund targeted specifically ground leases and, in some cases, lower at brownfield redevelopment to help parking standards) that make them more finance TOD. While developers were not difficult to finance than other types of specifically asked about their own firms’ projects. In large part, TODs were equity contributions toward TOD, a few treated like any other form of urban were eager to speak to this issue, development when subjected to banks’ indicating that most of the equity in their financial litmus tests. projects is self-financed. This included one developer who noted that “a major Equity Finance obstacle to developing socially responsible infill is predevelopment Other owners of equity capital, such as equity and what we have to pay for it.” pension and trust funds, also provide potential sources of TOD monies. There was considerable agreement Among the development firms surveyed, among developers that the availability of 14 indicated that they have used equity equity, as with debt, is primarily driven funds from outside their company to help by capital market conditions and the finance TOD. Of this group, nine stated marketplace, not a project’s status as a that they had used pension or insurance TOD. Nonetheless, when asked if there funds. This includes two developers from were any characteristics of TOD that the Portland (Oregon)–Vancouver help in obtaining equity funds, about (Washington) metropolitan area, each of half of the developers surveyed pointed whom has used funds from the Oregon to at least one characteristic of TOD that and Washington state retirement systems. is helpful, a subject taken up in the next Additionally, four developers indicated section.

90 Public-Sector and Foundation Finance improvements adjacent to a 93-unit, multifamily development in San While the developers surveyed generally Francisco, near a MUNI transit station. relied on conventional sources of debt In another instance, the firm submitted a and equity finance for their TOD projects, joint application for TLC funds along 6 of the 35 indicated that they have with the Contra Costa County developed projects with the assistance of Redevelopment Agency. MTC granted public-sector grants or financing linked $231,000, which was used to pay for the specifically to TOD or transportation. creation of a pedestrian walkway adjacent These funds were generally earmarked to a high-density residential development for the provision of infrastructure, transit, that was then under construction near the or parking improvements, as discussed in Pleasant Hill BART station. the previous chapter. A handful of developers indicated that The major source of grant assistance public-sector tax-exempt bond financing related to TOD was disbursement of has been used to finance infrastructure federal TEA-21 funds. A Chicago area components of TODs. This was most developer indicated that the Chicago often the case where projects were built Transit Authority used TEA-21 CMAQ on transit-agency land as part of joint funds to pay for a bridge connecting one development efforts. of her firm’s developments to the “El,” the elevated municipal rail line that In addition to public-sector financial operates in Chicago. In the Bay Area, support earmarked specifically for TOD developers stressed the importance of or transportation, five of the developers “seed grants” provided by the surveyed indicated that their TODs had Metropolitan Transportation Commission benefited from public-sector support (MTC) under its Transportation for targeted at the provision of affordable Livable Communities (TLC) Program.8 housing, such as low-income housing tax This program sets aside money for the credits or tax-exempt bond financing. planning, design, and construction of Only two of the developers surveyed small-scale, “community-oriented indicated that economic revitalization transportation projects,” including funds such as Enterprise Zone grants or streetscape improvements carried out in Urban Development Action Grants had conjunction with real-estate development been used in financing a TOD. near transit.9 On an annual basis, the MTC channels $27.5 million dollars to Finally, foundation support was a minor this program, most of which comes from source of TOD funding among the the region’s TEA-21 allocation. (See developers interviewed. Only three Chapter 18 for further discussion of this indicated that they had received program.) A San Francisco–based non- foundation assistance. These included profit housing developer who was community development corporations in interviewed indicated that TLC funds the Bay Area and Chicago and a have been helpful in paying for developer undertaking a complex reuse infrastructure costs for two of her firm’s of a historic property in downtown projects. In one instance, her firm Denver, which included retail, office, received $425,000 to spend on streetscape and affordable and market-rate housing.

91 For the most part, foundation funding is proximity to transit, whether projects not on the radar screen of most have sufficient comparables, whether developers of TOD and it has been projects are mixed use, whether reduced reserved for a unique subset of TODs parking standards are applied, and undertaken as part of community whether there are environmental revitalization efforts. concerns. Around half of the interviewed developers indicated that there is at least Availability and Terms of Finance one characteristic of TOD that has helped in obtaining equity funds from Although a project’s status as a TOD outside sources. was generally not considered to have a major impact on the ability to obtain Figure 5.2 presents the characteristics of debt or equity finance, a number of TODs that, according to surveyed characteristics associated with individual developers, aided them in obtaining TODs that have affected the availability equity funds. Each entry indicates that and terms of finance were identified by one of the interviewed developers surveyed developers. These are the identified the characteristic as helpful.

Located Near Transit 8

Good Location Within 5 Metropolitan Area

Supported Financially 4 by Public Sector

Requires Less Parking than Standard 3 Development TOD Characteristics

Supported Politically 3 by Public Sector

Mitigates Public Oposition to High 1 Densities

0246810

Frequency of Response Figure 5.2. Characteristics of TOD that Enhance Ability to Obtain Equity Funds, Based on Developer Interviews.

92 Proximity to Transit knowledge of transit’s impacts on commute patterns is useful in talking Although most developers indicated that with lenders. This developer explained a project’s proximity to transit is not a that while homeowners are willing to significant factor affecting the ability to travel longer distances to reach work, obtain conventional loans, 8 of the renters are known to travel only about 35 developers surveyed indicated that it half an hour to work. To the extent that has been helpful in financing the debt for transit places additional locations within projects. Those believing that proximity a half-hour commuteshed of job centers, to transit is helpful include office, retail, this developer believes it expands the and residential developers. In general, market for multifamily development and their responses to interview questions potentially increases the geography in demonstrated an ability to explain the which lenders will make loans to build benefits of development near transit in a apartments. sophisticated and realistic manner, a skill that they relied on during conversations Among for-sale residential developers, with lenders. three brought up the topic of LEMs. As noted in previous chapters, LEMs allow One office developer explained: homebuyers in transit-accessible areas to borrow more money toward the purchase All development financing is about of a home than they would normally be demonstrating market support for a able to borrow based on their incomes. project. Transit access can help While the developers who spoke about make the case for market support, LEMs did so in fairly general terms, all especially for office uses in non- of them felt that they improve the market CBD [central business district] for for-sale housing around transit. locations. If a development is in a pioneering location, then access to transit becomes a primary rationale Lenders who were interviewed seemed for market support and financing. indifferent to whether a project was near a transit stop or not. Adjacency to transit The developer explained that aside from stations, increased real-estate investment these instances, when developments are in the area, and potential rent premiums in up-and-coming locations, access to for superior access did not influence transit is a marginal consideration. lending decisions according to those Another developer, involved primarily interviewed. One interviewed lender did with mixed-use projects that include note, however, that “improved access to large retail components, noted that employment areas increases the value proximity to transit can be helpful in of TOD residential projects because making the case to lenders because being of lower vacancies and better rents near transit means “additional commuter compared with non-TOD projects.” In traffic generation.” order to make TODs more attractive to banks, one interviewee suggested Another interviewee, a multifamily implementing “programs or policies developer, indicated that while it is hard that strengthen creditworthiness, put to “sell a project to lenders” based only additional money into projects, or on the TOD aspects of a project, create more publicity for them.”

93 Mixed Use Despite these concerns, several lenders said they are beginning to have a more A number of developers indicated that favorable view toward the financial while TOD, per se, does not pose a viability and marketability of mixed-use challenge to obtaining debt financing, products, especially in urban districts mixed-use development does. According experiencing an economic renaissance to one developer, this was due to the and undergoing gentrification. It is likely lack of comparables in suburban the case (and four lenders acknowledged locations, where single-use buildings this) that many banks have lent on predominate. Higher insurance costs mixed-use projects near transit stations associated with mixed uses also without ever realizing that the project introduce risks. The challenge of doing represented a TOD. One interviewee mixed-use projects near transit stops is stated, “TOD projects on private property taken up in the next chapter, on barriers would never be recognized as TOD.” to TOD implementation. TOD seems to be largely an irrelevant concept for these lenders, distinct from Lenders’ views on mixed uses and other financing issues. One lender comparables were generally guarded, surveyed, for example, was the account reflecting the uncertainties and manager for the Ohlone-Chynoweth challenges of intermixing activities like TOD (parking-lot infill) project in residences, shopping, and workplaces San Jose, and he did not even know what on a single parcel, whether near a train TOD meant until it was defined for him. station or not. Those interviewed cited For a couple of the interviewed lenders, several factors that make lending for TOD was a negative label in that it was such projects more difficult, even if it associated with inner-city or community does not result in different loan pricing development type projects. One or terms: (1) the mix of uses makes it suggested dropping the TOD label more complicated to understand market altogether and casting these as mixed-use support and thus estimate likely rates of projects that have the added bonus of return, (2) there are fewer permanent being near a transit stop. This suggestion lenders willing to provide take-out indicates that what matters is the financing for these types of projects, combination of mixed use and accessible and (3) the underwriting process is transit, not the notion of government- generally more complex and takes more planned TOD (and all the connotations time. Permanent lender requirements this brings, such as lengthy entitlement may be more significant in determining and permit-review processes). the potential financing for a particular TOD or joint development project. More important than whether a project is Technical analyses that better reflect mixed or not is developer experience, at the benefits of mixed-use projects— least in the minds of lenders who were such as evidence that they reduce interviewed. One stated: “Mixed-use vehicle trip generation rates that can could be a plus or a negative; it depends in turn be used as credits against on a particular project.” Seven out of the development-impact fees—would also eight lenders cited limited developer aid in making mixed-use products experience with proposed project type as “pencil out.” a highly significant factor in deciding to

94 invest. This suggests that a TOD project according to the interviewee. What also with an experienced developer of mixed- might help is if more and better transit use areas will be more likely to have capitalization studies, based ideally on financial backing than an inexperienced matched-pair comparisons (the tried- TOD developer. and-true method of appraisers), are published in professional journals read Comparables by appraisers.

Having comparable projects from which Parking lenders can assess market performance can sway financing decisions according Below-code parking standards are to several interviewed developers. Of another trait of TOD that some course, whether the decision is a “go” developers believe affects their ability to hinges on TODs exhibiting superior secure financing. Sentiment on this issue financial performance, a topic addressed was mixed among the developers in Chapter 9 of this report. The absence interviewed. While a few indicated that of similar projects, particularly mixed- building projects with lowered parking use projects that have sold near transit ratios harms their ability to get stations, can be a stumbling block to conventional debt financing, a similar financing, especially in smaller urban number indicated that the lowered need settings where TOD is still a novel for parking, particularly structured concept. parking, helps the viability of projects, making it easy to obtain loans. Several surveyed lenders remarked that the views and opinions of real-estate One developer stated that a decade or so appraisers are particularly important in ago developers had to make a forceful establishing value for lending decisions. case to banks and city agencies as to why Appraisers normally weigh standard a TOD project with reduced parking was features of “comps,” like building square a good idea. Now, he feels that virtually footage and on-site amenities, in arriving all local planning departments are very at an estimated property value. Few familiar with TOD and that the public think about or seriously consider benefits sector is happy to prioritize it and support that might be associated with proximity it with public funds. The private-lending to transit. The idea of capitalization sector, he mentioned, has been slower to benefits, whereby the accessibility come around. As recently as 6 years ago, advantages conferred by transit get he took a completed TOD retail project, absorbed into land prices, is not leased to a credit tenant, to 50 different something that usually registers among lenders before finding a lender who most real-estate appraisers. Appraisals would provide permanent financing for do not separately attribute value to the project. A couple of lenders initially transit orientation or location. One committed to the project but pulled out lender suggested that this is partially when they found that there was no because TOD is not an established parking lot. According to the developer, market for premium rents or valuation. lenders would not fund a retail project Technical training of real-estate that had no parking, even though the appraisers would help in this regard, developer had an operational project and

95 could prove that all of the customers loan, even in complex deals. were walking in off the street or arriving Nonetheless, she noted that lending by transit. He feels that most lenders standards tighten when brownfield issues continue to hold suburban development are involved. Several lenders who were up as their model and are reluctant to interviewed echoed this sentiment, lend to projects with parking ratios below noting that brownfield sites are riskier industry standards. Several developers and more complex. noted that national associations whose views carry a lot of clout, including the Summary and Lessons Urban Land Institute and the National Association of Homebuilders, continue Ultimately, TOD is an outcome of one or to praise the value of ample, convenient more developers putting up their hard- parking as a means of gaining a earned money, or the money of lenders marketing edge over other competitors and investors, to create a new form of almost regardless of location. urbanism around transit stations. To a large degree, interviews reveal that Not all the surveyed developers bought developers have a positive view of TOD into this logic. One noted that reduced as a viable and growing market niche. parking ratios for a TOD saved on the When asked to rate the overall financial cost of building structured parking. As record of TOD, interviewed developers a result, he improved the bottom line on average scored it as a 5 on a scale of of his project, which he believes made 1 to 7, indicating that they think it it more attractive to lenders, who performs better than most products. understood the rationale for providing Developers were especially optimistic fewer parking spaces. Fighting about the prospects of TOD in areas opposition to reduced parking, whether where traffic congestion continues to from neighborhood groups or traffic- worsen and there is a pro-TOD political engineering departments, however, can sentiment. While there were substantial add costs and uncertainties that some areas of agreement among developers developers would just as soon avoid. who were interviewed, a number held conflicting views of certain elements of Environmental Concerns TOD. One example is parking. On the one hand, many developers relate to the A couple of the developers surveyed idea that parking standards should be indicated that environmental issues have lowered to the degree that significant affected their firms’ abilities to obtain numbers of residents, shoppers, and debt financing for TODs. A developer workers ride transit. On the other hand, affiliated with a large residential many have been reared on the principle development company indicated that her that parking is an effective marking tool company normally likes to tackle and can sometimes make or break a complex deals because experience has project. Regardless, most favor leaving given the company a competitive the decision of how much parking to advantage in this area. Due to her firm’s provide to the private sector. Developers size and credit rating, she indicated that feel that they know the market best and it almost never has to pay a premium on will take advantage of cost savings when the interest rates or points for securing a justified.

96 On balance, many developers feel that backed by infrastructure improvements being near major transit stops is like undergrounding utilities and advantageous to the degree that it upgrading road access—are likely to provides rent premiums. Some also feel make TODs all the more attractive to that being close to transit can improve lending institutions. the ability to secure equity finance, particularly for certain product types in Interviews suggest that joint development pioneering locations (e.g., office projects are more difficult to finance development in suburban locations). than neighborhood-scale TODs. This is Most developers realize that more is partly due to guilt by association—the needed than spatial proximity, however. fact that a project is directly tied, Making sure that the walk between a symbolically and figuratively, to a project and a station portal is safe and transit facility seems to detract from its reasonably attractive matters to many. value. The bureaucratic component of Putting in complementary land uses, like joint development projects, involving convenience shops and service retailers, government institutions that are not is particularly important to TOD always driven by the profit motive, homebuilders. Nonetheless, developers makes some lenders uneasy as well. realize that regardless of what they Of course, had lenders from the think, access to funds is often dependent Washington (D.C.) Metropolitan upon the views of lenders. While many Area been interviewed, where well- developers embrace TOD as a concept, publicized joint development projects when it comes to securing conventional like Bethesda and Ballston are known debt financing, there was a general to be hugely profitable, the reactions agreement that TOD offers little help. might have been different. Clearly, Loan decisions, they noted, are governed the transit industry would benefit by fundamentals, not urban-planning from well-designed and financially concepts. Interviewed lenders echoed remunerative joint development projects this sentiment. outside the Washington (D.C.) Metropolitan Area. As transit properties Most of the interviewed lenders had like Miami-Dade, MARTA, and BART difficulty pinpointing the positive and continue to make headway on joint negative factors that influence whether development deals, perhaps the they invest in a TOD because banks, cumulative experiences will eventually they contend, look at each project based cast these public-private partnerships on its individual merits. Dealing with the in a more positive light. innate market characteristics of TOD— notably, mixed-use projects with the advantage of being near transit—is Notes generally viewed as the best way to market the TOD product to the lending 1 The largest TODs undertaken by developers community. Factors that enhance the surveyed were Lindbergh Station in Atlanta connection of a parcel to a rail station— and the Northpoint Project in Boston. Each of these projects covers nearly 50 acres and such as direct and attractive pathways, represents approximately 5 million square well-lighted and secure portals, and a feet of space in a mix of uses. On the other strong degree of public commitment end of the spectrum, six developers surveyed

97 indicated that their standard projects consist affordable-housing loan officers; and the of fewer than 100 residential units. others are involved in market-rate lending. The large banks where the surveyed lenders 2 Following residential, the next most common work all have functional distinctions between product type was retail; 27 of the developers “market-rate” lending offices that serve a indicated that their firms are involved in at region and “community development least some amount of retail development. lending” offices that are involved in Of this group, only two firms indicated that affordable housing or other projects retail development accounts for more than oriented to community development. half of their overall development activity. In total, 10 firms indicated that they have 5 U.S. Census Bureau, Profile of General developed retail projects in excess of Demographic Characteristics: 2000 Census of 100,000 square feet. The remaining 17 firms Population and Housing (Washington, D.C.: that have done retail development indicated U.S. Printing Office, May, 2001). that it is usually a small component in 6 See http://www.census.gov/population/ mixed-use developments. Nineteen www/socdemo/age.html. developers indicated that their firms develop office space, including five developers whose 7 The term “affordable housing” is used here to firms are primarily involved with office describe housing that is built with development. A few developers indicated government assistance using federal income involvement in projects with institutional tax credits. In order to qualify for such and industrial uses. funding, developers have to agree to maintain specified affordability levels over long 3 In some cases, where developers preferred to periods of time, typically 55 years. answer questions in writing rather than over the phone, mail-in questionnaires were sent 8 MTC is the Bay Area MPO, responsible for that solicited the same information as was programming federal transportation dollars being collected through the interviews. allocated through TEA-21. 4 The profile of those surveyed was as follows: 9 Metropolitan Transportation Commission, all work for large banks providing construction Transportation for Livable Communities or short-term financing (i.e., no permanent Program Overview (Oakland, California: lenders); two lenders interviewed are 2002).

98 Chapter 6

Barriers to TOD: What They Are and How to Overcome Them

Types of Barriers many barriers are interrelated—for example, the higher densities of TOD The literature cites many obstacles to might prompt politicians to downzone, TOD, just as it does to most forms of unleash citizen opposition, and prompt compact, mixed-use development.1 lenders to reject loan requests. Others are Some barriers are financial in nature embedded in these larger categories— (e.g., lender skepticism), while others automobile-oriented development are quintessentially political and patterns form barriers to TOD in large institutional (e.g., zoning restrictions due part because overcoming them (i.e., to opposition). While some barriers can creating denser, more transit-friendly be overcome through local actions and environs) raises costs and political flak. policies (e.g., restrictive zoning), others (e.g., automobile-oriented development The barriers reviewed in this chapter and patterns) are largely outside the sphere discussed in the literature explain, in part, of local influence (e.g., cheap gasoline why projects are not built, but, as some prices set through the global marketplace observers note, they are less useful for encourages automobile dependence), at explaining why many of the projects least in a direct sense. This chapter billed as TOD fall short of expectations. discusses these and other barriers to In a recent Brookings Institution white TOD implementation. Initiatives that paper on TOD, Dena Belzer and Gerald might help overcome impediments are Autler note: “The barriers people also discussed. A combination of associate with TOD tend to parallel the literature reviews, developer interviews, barriers associated with building types of and survey results of stakeholder groups high-density infill projects, regardless of informed the discussion of this chapter. proximity to transit.”2 While this is true, unless the factors discussed in this The literature sorts barriers to TOD into chapter are dealt with at some level, TOD three basic categories: fiscal (factors that will remain more of an exception than the detract from the financial feasibility of rule in most U.S. rail-served cities. TOD projects, such as questionable Regardless, barriers that are particularly market viability and lack of conventional unique to transit station settings are also financing); organizational (structural given attention in this chapter. impediments lodged in the institutional fabric of transit agencies and other Fiscal Barriers governmental entities responsible for projects); and political (land-use The higher construction costs, policies and NIMBY forces that development fees, and risks that impede multifamily housing and infill accompany dense, nodal development development more generally). Of course, like TOD form significant financial

99 obstacles. Mid-rise, multistory structures development have been successful on require strong foundations and footings, the residential side, but the project steel-frame construction, elevators, and managers have struggled to find lobby areas, all adding cost and cutting financing for the commercial down on net leasable space. Infill development that will agree to a TOD development might incur expenses plan (see Photo 6.1). The absence of an for site clearance, environmental anchor tenant for the project hampered remediation, and infrastructure the developer’s ability to obtain upgrading. Many developers weigh such financing. As long as the developer is risks and costs against building single- able to provide loan guarantees, banks story structures on greenfields or the typically loan up to 70% of the money suburban edge where neighborhoods are for a shopping center development.4 The stable and crime rates are low. In anchor tenant typically provides the loan California, a series of lawsuits holding guarantees for the project, promising to condominium builders liable for faulty continue paying rent even if the business construction up to 10 years after units at that site fails. Without an anchor were sold has frightened some tenant, banks are usually unwilling to developers from the high-density provide loans.5 housing market altogether. Perhaps the trickiest part of high-density TOD is Similar difficulties have been encountered the pricey structured parking that among non-profit/affordable housing accompanies it. A real-estate economist groups trying to build TOD projects on involved with TOD planning along the transit-agency land in the San Francisco T-REX corridor in Denver has remarked: Bay Area.6 Since lenders often require ownership of the land being built on to You have to get the land values up be put up as collateral to secure the to support structured parking. That project loan, financially strapped costs at least $15,000 a parking nonprofit housing builders must often space, but add special features like make concessions to lenders in terms of a ‘retail wrap’ to the garage and streetscape improvements, and you’re looking at $23,000 to $25,000 a space. Development interests will be there as long as there are partnerships with the city. But it’s not instantaneous. It can take 10 to 15 years to evolve.3

Lining up financing for TODs in economically stagnant areas can be particularly challenging. While a host of public and private programs exist for financing affordable residential units, similar programs for commercial development are rare. In the case of San Photo 6.1. Barrio Logan, Mercardo Diego’s Barrio Logan neighborhood, Apartments, Near San Diego Trolley efforts to create a mixed-use Station.

100 project design. In the process, the promise to generate the most sales and delicate details of good transit-oriented property-tax revenues, even if property design may be sacrificed in order to lies within a walkable distance of a rail satisfy the lending institution. station. Fiscal zoning has been particularly rampant in states like While projects like Barrio Logan in San California that have imposed ceilings on Diego have been successful at building local property-tax rates. In a study of residences near transit, Atlanta has had 232 southern California rail stations with some difficulties attracting residential commuter-rail and light-rail services, development near its MARTA stations Boarnet and Crane found that fiscal because of the high demand for office zoning thwarted efforts to build development there. Consequently, while affordable units around rail stations. there is a great deal of dense development California municipalities that rely around MARTA stations, it is mostly heavily on sales-tax and property-tax suburban-style office towers with lots of proceeds were found to have high shares parking and poor pedestrian connectivity of citywide commercially zoned land 1 7 to nearby stations. This “dysfunctional within ⁄4-mile rings of rail stops. density” is in part a result of density entitlements provided by the zoning Many other barriers to TOD might be code, which have increased property put under this fiscal category, such as values in station areas. Since property automobile-oriented development values are so high, only high-value patterns (which cost money to office and retail developments are overcome), mixed-use TOD designations financially feasible. These fiscal (which might not have a market base of pressures result in monocultures of high- support), and the process of permitting end office or retail that must draw on and entitlement (which increases large market areas that are not easily “transactive” costs). Many of the served by transit, placing automobile developers interviewed for this study site access above transit accessibility. were critical of what they viewed as the unnecessarily cumbersome and fickle From the public-sector side, financial process of entitlement and permit considerations also influence the review, even with TOD. Uncertainty and likelihood that TOD will take form. red tape add risks and costs. Some Many recent-generation light-rail transit developers simply move on, almost systems have followed the path of least literally, to greener pastures. Developers resistance, seeking out disused freight and, perhaps more importantly, those lines, power transmission easements, and who often bankroll projects—lenders— freeway medians where right-of-way know that they can make a nice profit acquisition and disruption costs are building single-family tract housing and minimal. Such cost minimization also sprawling subdivisions oriented to means development minimization. A highways. They have been doing it station tucked in a freeway median quite successfully over much of the largely precludes TOD. post–World War II period. TOD, on the other hand, has a spotty track record, and Fiscal realities might prod some local in some parts of the country, it is governments to zone land for uses that virtually nonexistent.

101 Political Barriers Furthermore, the component of rental housing was eliminated, such Many residents equate transit-based that individuals and families who housing and infill office development cannot yet afford to purchase a with more traffic, crowded schools, and house or prefer the flexibility and longer lines at grocery stores. Less often convenience of rental housing have no option to do so, especially along voiced but still in the minds of some is a transit line. So, the demand for the prospect of people with lower alternative development continues incomes moving into the neighborhood. unmet thanks to projects like NIMBY opposition has stopped mixed- Whitman Station.9 use, infill development near rail stations in Oakland, Miami, Atlanta, and most likely every U.S. city that has built rail Organizational Barriers systems over the past century. The difficulty of coordinating TOD Frightened by the prospect of additional among many actors and stakeholders is traffic generated by the planned mixed- often a stumbling block to success. By use development at Atlanta’s Lindbergh one account: Station, a neighborhood group filed multiple suits against MARTA to block In today’s typical TOD project, the construction. While the project is moving public sector builds the transit (often forward, these suits have put it behind with the involvement of multiple schedule. Because of community agencies), local governments try pressures, the 512 housing units recently to control development, and built near Santa Clara County’s Whisman developers look for opportunities to light-rail station—“representing the make profits. Transit agencies also biggest housing development Mountain become involved as property owners View has seen in at least 20 years”— in joint development projects. All contained no rental units and were built of these entities—not to mention at less than half the density originally transit riders, neighbors, and the public at large—have different ideas proposed.8 While the addition of more about what the project should than 500 units near the Whisman Station accomplish.... Too often, projects might be considered a success by many, are implemented without a clear Inam views it as a promising TOD co- vision of desired outcomes, the opted by NIMBY resistance: different goals of the actors, and the ways in which those goals may The developers proposed a high work at cross-purposes and lead to a density project because they project that, while perhaps superior perceived that there was a demand to traditional development, falls for that number of units on this site. short of the potential of TOD.10 Now, the 500 families who might have been housed through the original density have not only had TOD coordination between transit their residential choices further agencies and localities can be especially reduced, they do not even realize difficult in areas with strong traditions of that they have reduced choices small, independent governments, like because their units were never built. greater Philadelphia, where several

102 hundred municipalities govern land-use In the case of WMATA, years of joint matters via local zoning. Similarly, development experience has resulted in successful TOD projects often require lease agreements that provide the agency changes in thinking and organization with legal and financial protections. within the government agencies involved WMATA’s initial lease terms vary from in the process. Struggles over turf and 50 to 60 years, with an option renewal to resistance to change within public a 99-year term. Rent is guaranteed, even agencies are legendary and present if the developer declares bankruptcy. major obstacles to effective project The rents also “bump up” when implementation. The classic conflict surrounding properties increase in value. is between city architects and planners Consequently, WMATA stands to who argue for traffic-calming and benefit from increases in land values that neotraditional design standards may occur after a lease with the (e.g., “skinny streets,” and intersection developer is invoked. bulb-outs) and fire marshals and police chiefs who insist on generous and Sometimes it is the private side that feels unrestricted road geometries for alienated by the process. The structure of emergency vehicles. For liability reasons the land development agreement for alone, the interests of protective services Miami-Dade Transit’s Dadeland South many times win out. project proved problematic from the developer’s perspective. Since the land Lack of technical expertise within the for the project was leased to the public sector is sometimes cited as developer and the county retained the another barrier to TOD. This can be the property’s rights of ownership, the case particularly with jointly developed developer needed to comply with public-private projects. In Miami, Atlanta, government equal-opportunity laws, and other rail cities, transit agencies have adding to costs.13 The process of putting “gotten the short end of the stick” when together a standard lease following the dealing with business-savvy, seasoned Disadvantaged Business Enterprise developers who know how to negotiate a Program and other government favorable deal.11 Bad experiences have at requirements can also be time- times turned transit board members consuming. against potentially lucrative joint development deals when opportunities Barriers Unique to TOD have arisen. One analyst recommends that transit properties entering into lease As mentioned earlier, many of the agreements insist on contractual language barriers outlined above are generic to that ensures a percentage of gross any form of higher-density development. revenues from the development, not net This section builds on the previous ones revenues (profit). Since accountants have by focusing on four areas that are a number of “creative” ways to calculate particularly troublesome when trying costs so that a venture never shows a to move forward with a TOD: (1) the profit on paper, the public entity needs to congestion conundrum, (2) logistical protect itself and its revenue stream with dilemmas (caused by the conflict contractual language that has very little between “node” and “place”), (3) the “wiggle room.”12 parking puzzle, and (4) getting the

103 mixed-use formula right, particularly in jealously guarded property rights. TOD relation to retail components. that threatens to add traffic to local streets (not to mention more kids in public The Congestion Conundrum schools, shoppers at outlets, and so on) does not fall in this category in the minds In creating TODs, planners face a of most suburbanites. Elected officials paradox. Development concentrated in who are beholden to their constituents do one area invariably adds more traffic and not always have the patience to wait until lowers levels of service. The threat of the longer-term benefits of TOD reveal traffic build-up can unleash a community themselves. Downzoning or building backlash against TODs with the very moratoria are easier ways of heading off best of intentions. Thus, while TODs are traffic problems. presumed to increase transit ridership, they are also equated with more traffic Logistical Dilemmas: the Conflict congestion. Between “Node” and “Place”

There are no easy solutions to this Transit stations are “messy places.” dilemma; higher densities in a They are expected to accommodate the concentrated land area invariably bring interface of feeder buses, park-and-ride, more spot congestions, particularly at key walk-on traffic, cyclists, passenger drop- intersections. Planners often plead that off, taxicabs, paratransit vans, goods these short-term “disbenefits” must be delivery, and other access functions. weighed against the longer-term Movement conflicts, circuitous travel “benefit” of less regional traffic. While paths, and less-than-optimal usage of the levels of service might deteriorate in space are inevitable. Creating a and around a station as a result of TOD, comfortable human-scale environment overall regional vehicle miles traveled that transforms a station into the (VMT) and congestion levels will fall centerpiece of a community can be with time. Some planners also make the next to impossible. case that added traffic is a sign of an active, rejuvenated community. They At a more basic level, Belzer and Autler distinguish between “good” and “bad” call this a conflict between the role of a congestion (a distinction like that transit station as a “node” and its role as a between good and bad cholesterol). “place.”14 Transit officials think in terms Traffic, in the form of both people and of nodes—points on the network where automobiles, characterizes all vibrant customers can access trains and buses. places with stellar transit services, Function takes precedence over form (e.g., 42nd Street in Manhattan, (e.g., parking is sited as close to a station Leicester Square in London, or Tokyo’s as possible even if it means creating a Shinkansen district). The “good dreadful walking environment). City congestion” of TOD helps to reduce the planners, New Urbanists, and TOD “bad congestion” elsewhere. Such logic advocates tend to view a station as a does not always resonate with local place—a focal point for marshalling residents, however. Doing what is within community resources so as to create an the broader good of the region is fine as attractive, vibrant neighborhood that long as it does not infringe on peoples’ promotes sustainability, social interaction,

104 economic development, affordable they believe that much more TOD would housing construction, and other ideals. happen if the public sector could deliver Transit managers judge any projects that preassembled parcels. take place on their property on the basis of whether they are financially self- The Parking Puzzle supporting, increase ridership and farebox receipts, and help keep trains and buses If there is any spot on the map where it on schedule. Neighborhood activists look makes sense to revamp parking at joint development as an opportunity for standards, it is neighborhoods in and “place making.” around transit stops. Many station-area residents buy into neighborhoods near To ensure that transit managers “keep rail stops because they want to shed one their eye on the ball,” some transit or more automobiles, thus freeing up boards have banned their agencies from money for other purposes, such as the business of property development, all buying a nicer house or traveling more but ensuring that a station is treated as a often. At the Alma Place housing project node, not a place. While it can own and in upscale Palo Alto, just two blocks reserve land, the DART authority cannot from the Caltrain commuter rail station, develop agency-owned property. This is peak-hour parking demand is just four- considered outside of, and potentially tenths of a parking space per unit, even distracting to, the agency’s central though parking is free.15 Nonetheless, mission of running a transit business. lenders and local planners often insist Dallas’s much-heralded Mockingbird on two parking spaces per residential Station TOD would not have happened unit (this is what lenders’ financial had the developer not been able to spreadsheets tell them is necessary, and purchase property from DART. most planners follow time-honored parking codes that say this is what is Another type of logistical challenge needed). In dense areas, podium or tuck- facing many station areas is land under parking spaces can add $20,000 or assemblage. This is partly because many more to the cost of a unit. Rigid parking rail lines are built in older parts of the standards can make TOD financially city and occupy former streetcar infeasible. For some developers, the corridors or disused tracks. Land plots problem is not excessive parking tend to be small in such settings. A lack minimums but rather insufficient parking of developable parcels was cited by caps. They complain that jurisdictions many of the developers interviewed for that are particularly sympathetic to TOD this study as a major obstacle to TOD, can impose maximum parking limits that particularly parcels of sufficient size to fall below market demand. Getting attract large development firms with lenders to invest in such projects is significant financial resources. One virtually impossible. developer indicated that his firm needs parcels that are at least 5 acres in size to One way to get the parking ratios right is make infill development worthwhile. to replace regulatory codes with market Developers indicated that the cost and prices. This can most easily be done by risk of negotiating to assemble land is decoupling, or unbundling, the price of ordinarily too great to justify the reward; housing from the price of parking

105 spaces. Most ownership housing and apartments have parking included in the base price of a unit. Those who do not own or need an automobile must pay for a space anyway, driving up the cost of housing. Unbundling parking can thus promote affordable-housing objectives and create a more walking-friendly environment. Below-grade parking nearly sunk the Pentagon Row mixed- use TOD in Arlington County, Virginia, because of cost inflation; the project continues to struggle financially despite high occupancy levels. Arlington County planners learned their lesson, decoupling parking and housing codes for the Market Common mixed-use project at the Clarendon Station. The project’s site design was changed to make extensive use of surface and curbside parking and in so doing improved the project’s “bottom line.” (See Photo 6.2.)

Parking dilemmas also surface within the boundaries of a station, again Photo 6.2. Contrasting Approaches to reflecting a clash between a station’s role Mixed-Use TOD Parking in Arlington as a node versus a place. Across the County, Virginia. Pentagon Row, in the top United States, suburban rail stations are photo, relied heavily on below-surface podium enveloped by huge surface parking lots, parking, inflating construction costs. Market catering to riders with automobile access Common, in the bottom photo, put parking on rather than the desire of some to create the street, complemented by nice landscaping, an attractive civic space (as found to save costs, even though its building profile around many suburban European rail is similar. stations) and serve the needs of walk-on users and cyclists. Park-and-ride patrons often have staunch supporters within transit agencies, creating barriers to the San Francisco Bay Area, BART’s transformation of park-and-ride lots into policies protect the park-and-ride patrons transit-supportive developments. Some by requiring “one-to-one” replacement board members of U.S. rail-transit of any surface parking removed for the agencies have been voted into office purposes of development on BART land. largely on the platform of working to Consequently, only those projects able to increase parking supplies. produce sufficient revenues to cover replacement-parking costs are permitted These political fault lines have both to proceed. In practical terms, this means fiscal and physical consequences. In the that ground-lease income must equal or

106 exceed the debt-service costs for a projects together on a single parcel can parking structure. This is rarely the case. create confusion. Few financiers understand mixed-use development. The hard line taken on parking deters John Gosling cautions that “mixed-use TODs by creating a built form that is development has many moving parts, hardly conducive to pedestrian access. making it geometrically more difficult to Broad expanses of surface parking finance, which translates directly into separate stations from surrounding higher costs; recognize that there is no neighborhoods and create an urban such thing as a mixed-use development landscape that encourages people to flee industry—very few players have deep transit stations as quickly as possible. enough pockets.”18 Shared parking between transit agencies and adjoining development is often seen Further complicating the mixed-use as one way to shrink the footprint of challenge is the lack of comparables. TOD parking. However, this does not The “comps” that do exist do not always always work in practice. Efforts were have distinguished track records. Mixed- made to strike a shared-parking use TODs, such as Palm Court near the arrangement between the Mockingbird Blue light-rail transit line in Long Station TOD and DART; however, the Beach, California, fell into arrears, deal fell through when it became clear forcing banks to take over. Often it has that the agency’s generous parking been the ground-floor retail component standards did not square with the of TODs that have suffered the most. developer’s more restrained views on (See Text Box 6.1). parking. John Gosling, a designer of mixed-use TODs, says “shared-parking Developers interviewed for this study reductions in mixed-use settings are not took a fairly cautious stance toward what they are cracked up to be.” He mixed-use TODs. One developer cautiously recommends 3% to 5% for indicated that because insurance costs housing and office mixes, 7% to 9% for are higher when uses are vertically housing and retail mixes, and 9% to 12% mixed, it affects the bottom line and for housing, office, and retail mixes.16 harms the ability to get financing. Still another developer noted that it is All sides agree that sorting out the extremely difficult to do vertically parking puzzle is crucial to forming TOD. mixed-use development when In the words of one rail planner, “If the ownership components are involved. parking requirement doesn’t reflect the Multiple-use structures are also hard transit resource, it’s not TOD; it’s just to build. Developers are generally development close to a transit station.”17 more comfortable with a mix of uses in close proximity but on separate lots Getting the Mixed-Use Formula Right (i.e., “horizontal” versus “vertical” mixed uses). Mixed land uses are a defining trait of TOD. Yet, mixed uses can be difficult to Expressing this preference for horizontal realize. Often, each real-estate type has mixed-use development, one developer different lenders, investors, contractors, said he hoped he was beginning to see a and financing parameters. Bundling slow shift in thinking on the part of city

107 Getting the Retail Component of a Mixed-Use TOD Right

The piece of mixed-use TODs that has often struggled the most is retail. TOD retail is market driven, not transit driven (i.e., it is nearby residents, workers, and passersby who generally support the retail portion of a TOD, not transit riders). Retail is successful because of fundamentals—location, market, and design. Being near transit is secondary. In its recent publication, Ten Principles for Successful Development Around Transit, the Urban Land Institute warns: “It is misguided to believe that just because there is transit, if you build retail ‘they will come.’” (See Note 19 at the end of this chapter.)

TOD designer John Gosling offers the following advice on the retail component of mixed-use TODs, based on years of experience: determine retail mix, critical mass, and merchandizing strategies early, and design the project accordingly. Understand that retail tenants need good “presentation” and snazzy environmental graphics and keep the retail layout simple with a singular, continuous design that maximizes visual impact and invites foot traffic. Try to get it right because failing retail stigmatizes an entire development. Part of getting it right is making sure that ground-floor retail opens onto the street, clearly within the viewshed of passing motorists and that sufficient short-term parking within easy reach of the front entrance (a must for convenience retail) is available. Many TOD retail shops are inwardly focused in their designs, buffered from the street. This minimizes drive-by shopping and impulse- buying, both of which make up a growing part of the retail marketplace. If not designed properly, retail gets associated, visually and symbolically, with the “turf” of the upper-floor office and residential tenants.19

The Pacific Court mixed-use transit village in Long Beach, California, is a textbook example of a retail component that went awry. Pacific Court, with nearly 100,000 square feet of ground-floor retail and 142 above-ground apartments, opened in 1992 as a joint venture between the Long Beach Redevelopment Agency and a private developer. Many of the small retail shops are situated on the project’s exterior, away from the interior courtyard where the biggest draw, a 16-screen movie multiplex, is located. Moreover, there is no short-term parking next to the shops, meaning they depend entirely on walk-in traffic. Retailers complain that the layout also prevents movie-goers from passing by. As a result, many storefronts are empty. According to some observers, high retail vacancies may have pushed the project into foreclosure. In 1993, Pacific Court was valued at $53 million. After foreclosure in 2000, the developer sold the project for $13.5 million.

Pacific Court, Long Beach, on MTA’s Blue Light-Rail Line

Text Box 6.1 planners to be more willing to recognize reduce traffic congestion—two products single-use infill development in mixed- of automobile-oriented land uses—and use neighborhoods as a desirable way to yet TOD is impeded by the same strengthen pedestrian-oriented automobile-dependent forces. neighborhoods. This developer focuses on multifamily infill housing and argues Ranked next as obstacles to TOD were a that developers should not be forced to series of “lacks”—minimal lender and do mixed uses if it will only serve to developer interest, limited local expertise “dilute” the market for commercial real in planning and implementing TOD, and estate in an area sufficiently served by questionable market demand. In the retail. Instead, he argues that single-use views of higher levels of government, residential buildings bring new patrons MPOs and state DOTs, local zoning to existing commercial activities and restrictions are also to blame. should be encouraged. (Predictably, respondents from local government did not see this as a problem, Public-Sector Perspective on just as they discounted the view that TOD Barriers limited local expertise thwarted TODs.) Factors like community opposition, local The many barriers cited in this chapter skepticism over the value of TOD, form a veritable laundry list of hurdles inadequate transit services, and location to overcome. Which barriers are most of transit stations were generally rated as serious? The national survey of five moderate barriers. (Again, higher levels public-sector stakeholder groups shed of government were harsher in their some light on this question, at least from criticism of factors that fall largely under a government perspective. Survey the purview of local governments and respondents from transit agencies, local transit agencies.) Legal barriers and governments, redevelopment agencies, replacement parking requirements were MPOs, and state DOTs were asked: “To mostly viewed as having minimal effects what degree has each of the following on whether TODs take form. factors been an impediment to transit joint development in your agency’s It bears noting that many of these cited service area?” Respondents rated the obstacles fall within the public sector’s factors on a scale of 1 (minimal) to sphere of influence. Some require 7 (major). Figure 6.1 summarizes the institutional strengthening (e.g., better responses for the five stakeholder interagency coordination) and resource groups combined. reallocations (e.g., enhanced transit services). Tackling other problems, Stakeholders consistently ranked the notably automobile-dependent automobile-dependent landscapes of landscapes, is a much tougher challenge. many U.S. rail cities as the biggest While compact, mixed-use zoning and obstacle to TOD. Automobile dependency automobile-restraint programs will help was the largest factor in deterring TOD in in this regard, market realities will be the minds of those working in the public far stronger determinants of whether sector. This presents a “chicken-and-egg” America’s future built environments problem or a “Catch-22,” wherein TOD is become relatively more transit or needed to increase transit usage and automobile dependent. Public policies

109 Automobile-Oriented Land Uses

Lack of Lender Interest

Lack of Local Expertise

Lack of Market Demand

Lack of Developer Interest

Local Zoning Restrictions

Lack of Political Support

Skepticism in Local Govts.

Community Opposition

Inadequate Transit Services

Lack of Govt. Collaboration Transit Agencies Location of Transit Stations Local Governments Redevelopment Agencies MPOs Replacement Parking Mandates State DOTs

Legal Barriers

234567 Mean Rating (1=minimal; 4=moderate; 7=significant) Figure 6.1. Rating of Impediments to TOD Among Five Stakeholder Groups.

like zoning affect market realities to the TOD enterprise and the role of the some degree; however, exogenous public sector in shepherding this effort. factors like rising affluence and gasoline Most view public agencies as supportive prices exert far stronger influences. and possibly even important partners in While not an insurmountable barrier, advancing TOD. Few are of the opinion the prevalence of automobile-oriented that planners should “get out of the way.” development makes the enterprise of Figure 6.2 shows the percentage of TOD more difficult in the United States developers interviewed who view various than anywhere else in the world. public agencies as either partners, supporters, indifferent or obstacles when Overcoming Barriers: The it comes to advancing TOD. Development Community’s Perspective As might be expected, developers see the appropriate role of the public sector as Despite the many hurdles to TOD, incentivizing private development. Most developers interviewed for this study believe they can make money in the TOD generally had a positive outlook about marketplace as long as they can avoid

110 27% Local Elected 53% Officials 10% 10%

18% Local Planning 68% Department 11% 4% Partner

24% Supporter 41% Transit Agency 24% Indifferent 10% Obstacle

29% Redevelopment 58% Agency 13% 0%

Metropolitan 4% 61% Planning 32% Organization 4%

10% State Department of 21% Transportation 59% 10%

0% 20% 40% 60% 80% Figure 6.2. Developer Views of Public Agency TOD Roles, Based on Developer Interviews. excessive red tape and minimize improving the practice of TOD in the uncertainties. What often bothers them United States. For purposes of most is when governments “change the discussion, their recommendations can rules of the game” at the last moment. be grouped broadly into four categories: Accordingly, developers support good land assembly and infrastructure, the planning that provides a more predictable regulatory environment for TOD, public- environment for development. Without a sector financing of TOD, and public- good station-area plan, there are no private partnerships. guarantees that neighbors and public officials will accept a real-estate proposal, Land Assembly and Infrastructure nor is there a good handle on what a neighborhood is apt to look like 10 years In general, developers were interested in down the road. Good plans increase the seeing a more active role played by the odds of good returns on investments. public sector in completing activities that “lay the groundwork” for TOD. The developers interviewed eagerly They were particularly enthusiastic offered a number of suggestions for about seeing public authorities such as

111 transit agencies and redevelopment processes, particularly for fast-track agencies assemble land. Help with land projects near transit stations. assembly is particularly important for large-scale mixed-use projects in big, Interestingly, developers more often cited built-out cities, where land prices are streamlining regulatory processes as a high and developable parcels are few needed policy reform than increasing and far between. subsidies or tax incentives. This stands in contrast to the views of public-sector In addition to assistance with land stakeholders, who generally thought assembly, some developers were also streamlining measures were ineffective at eager to see public-sector investments in promoting TOD (as noted in Chapter 4). infrastructure around transit stations, Some developers drew a distinction including installation of parks and between development review and roads in greenfield locations and planning processes, questioning the implementation of streetscape efficacy of the former while expressing improvements in existing urban locales. enthusiasm for increased public-sector These investments were seen as being efforts to create community plans for particularly effective at attracting areas around transit stations. Developers development. Most developers who were explained this apparent paradox by interviewed felt that the public sector asserting that a carefully crafted should concentrate on investing in good, community plan adds certainty to workable mass transit systems. Running development review by establishing a clean and modern trains on time and lucid vision for development around a expanding transit systems to grow the transit node. Having broad-based network of transit-accessible locations community buy-in is also essential. are things they actively support. In the minds of many, neighborhoods around In addition to a desire to see increased stations that enjoy world-class transit community planning, some developers services create their own markets for were interested in seeing the public TOD, with little government intervention sector complete environmental impact necessary beyond permissive zoning. reports (EIRs) focused on areas around transit stations. Examples provided The Regulatory Environment included the focused EIRs done for rail- served portions of downtown Oakland While in some respects developers and San Diego, California. These EIRs welcomed additional public-sector served to expedite the environmental involvement, not surprisingly, many of review process for developers building those interviewed equated this with more in areas where a city agency had already red tape. To a developer, the clock starts completed preliminary environmental ticking once land is acquired and impact assessment work. Although financing costs begin to accrue. Two California’s Transit Village Act exempts things critical to the developer’s TODs from “level-of-service” standards schedule are certainty and timeliness.20 under the state’s Congestion Management The most commonly heard policy Act (see Chapter 3 for more on this), recommendation from developers was none of the 10 interviewed developers to streamline the development review from California were aware of any

112 projects that took advantage of this downs, assistance with land assembly, provision. and equity partnerships are among the expected “perks.” Many developers also Public-Sector Financing insist on loan subordination to protect them against potential creditors should Some developers were interested in TOD projects fail. Still, developers seeing more public-sector financial generally view the challenge of creating support for TOD in the form of subsidies, TODs in less attractive urban settings as tax incentives, and below-market-rate a partnership, with both risks and rewards loans. A developer at a nonprofit shared among public and private community development organization interests. Defining exactly how much of believes that additional subsidies are the risk gets shifted to the public sector, needed for the retail components of of course, is often a bone of contention. mixed-use projects in order to attract Most TOD developers believe a retail outlets as a community substantial share of the burden should fall revitalization strategy. A for-profit on the shoulders of local agencies since developer feels that the public sector the developers are taking unnecessary needs to be ready with subsidies when it risks as long as opportunities for requires vertically mixed uses in places automobile-oriented development on where market forces do not justify them. greenfields exist. One mechanism to A brownfield developer believes that the offset risk that was advocated by a public sector should step forward with developer was for the public sector to money to pay the insurance premiums on make equity funds for predevelopment environmental insurance policies, which activities available for developers would indemnify developers for cleanup working on risky infill sites where costs in excess of an agreed-on dollar development serves a public purpose. figure. While developers were certainly willing to accept public-sector financial Public-Private Partnerships incentives when they were available, they were not usually the factor driving The sentiment of developers toward decisions to develop. In instances where public-private partnerships can best be subsidizes or the lack thereof drove summarized by the following comments development decisions, there was a from one interviewee: sentiment that the public sector should “put its money where its mouth is,” so to As a private developer, my first speak, by paying to support policy goals preference is a project near [the local subway] totally controlled by such as community revitalization or to us with no public entity partner. The offset disincentives to development public entity partner makes a project created by policies that run counter to longer, more complicated, and more market forces. management intensive . . . unless the public relationship brings an Of course, in highly depressed inner-city economic advantage. neighborhoods, real-estate developers expect (and usually insist on) direct While developers favored more financial assistance from the public sector involvement from the public sector in in building TOD projects. Land write- certain activities, like land assembly,

113 they, not surprisingly, prefer that land be (for projects such as parking lots) to be turned over to private control before sold to private developers for TOD development begins. Reasons for without returning proceeds to the federal reticence toward public-private treasury, has opened the way for fee- partnerships generally hinge on the slow simple transactions in the Washington, pace of decision making within the (D.C.) Metropolitan Area, the San public realm. Public agencies, many feel, Francisco Bay Area, and other regions are too bureaucratic to make good actively seeking to infill surface park- development partners. Also, developers and-ride lots. are leery of public counterparts because of their general lack of real-estate Summary and Lessons expertise, particularly in the case of transit agencies and their governing Many roadblocks stand in the way of boards. One interviewee suggested that TOD, just as they do with most forms of the real-estate operations of transit compact, mixed-use development. Some agencies might be outsourced to a private barriers are fiscal in nature, such as the entity with more real-estate knowledge. higher costs and risks of dense, infill development, the alignment of rail lines Some developers did, however, recognize along low-cost corridors that have the economic advantage of partnerships, minimal development potential, and including one developer who works fiscal/exclusionary zoning policies that almost exclusively with public-private restrict housing production. Others are in partnerships, often relying on the public the form of political roadblocks, like sector to pay for parking construction. In NIMBY opposition to infill. Still others theory, these arrangements lower overall are institutional and organizational in development costs by allowing public character, such as the difficulty of facilities such as a parking garage to be coordinating TOD activities among built concomitantly with privately owned multiple actors and stakeholder groups buildings. Construction staging areas can with divergent interests. be shared, and efficiencies of scale can be achieved. While it is possible that While many of these barriers are generic such cost-sharing benefits exist, few to all forms of dense, infill development, developers seemed to believe that they some are unique to TODs. One is the adequately offset the red tape involved in “congestion conundrum”: the fact that partnering with a public agency. nodal development around a transit station increases spot congestion, From a developer perspective, arguably prompting some jurisdictions to the most bothersome elements of downzone. Another is the logistical working in public-private partnerships dilemma of accommodating multi-modal are requirements that land be leased access needs, which often results in rather than sold. Developers felt that station road designs and parking layouts financing would be easier and therefore that detract from the quality of walking. more TOD would happen if land were More fundamentally, this represents a available fee-simple rather than through conflict between the role of a station as a a ground lease. FTA’s new joint functional “node” (particularly in the development rulings, which enable land minds of transit managers) and a

114 desirable “place” (particularly in the While the developers interviewed for this minds of urban planners). Still another study were enthusiastic about TOD, their stumbling block unique to TODs is the views on what is “transit oriented” did rationalization of parking. By their very not always square with urban design nature, transit stations offer “location principles that call for mixed-use efficiency,” enabling residents to get by buildings clustered in close proximity to with fewer automobiles than they might a transit station. Notably, a handful of otherwise own. Yet lenders and planners developers felt strongly that TOD design often insist that code-standard parking be guidelines should not overemphasize provided in station areas regardless. One vertically mixed uses, such as ground- mediating approach is to unbundle the floor retail and upper-level residential. price of housing and parking, creating They explained that outside of dense separate markets for each. Within transit urban locations, building mixed-use station boundaries, clashes are also found products in today’s marketplace can be between the preferences of professional- a complex and risky proposition; few class suburbanites who park-and-ride and believe that being near a train station other groups who would prefer more fundamentally changes this market human-scale station designs. Many transit reality. Those interviewed did welcome officials side with automobile-using certain public-sector efforts to incentivize patrons, invoking one-to-one replacement development including land assembly, policies to ensure parking is in ample infrastructure provision, strategic supply. Lastly, mixed land uses, which investments to improve neighborhood are a characteristic trait of TODs, pose image, and expedited development difficulties in lining up funding, investors, review processes. In general, developers and contractors. Vertical mixing is cautioned against over-regulation and particularly problematic; most developers identified actions that could be taken well call for horizontal mixing instead. Quite in advance of development that would often, the ground-level retail component reduce risks and encourage more TOD. of mixed-use TODs suffer the most, in part because they are poorly laid out. Nothing will do more to surmount the obstacles to TOD than success stories. A The national survey of public-sector developer active in north Dallas’s TOD stakeholders shed light on what barriers scene remarked: “Density used to be a are perceived to be the most onerous and dirty word, but now that there are built difficult to overcome. Most problematic, examples on the ground of TOD and according to survey respondents, are higher density, everybody is getting on automobile-oriented development the bandwagon.”21 patterns. The lack of lender and developer interest in TOD, along with limited local expertise in planning for Notes TOD and questionable market demand, are also generally seen as significant 1 See R. Cervero, M. Bernick, and G. Gilbert, stumbling blocks. Factors like NIMBY Market Opportunities and Barriers to Transit- Based Development in California, Working opposition, inadequate transit services, Paper 621 (Berkeley: Institute of Urban and and poor siting of transit stations were Regional Development, University of generally rated as moderate barriers. California, 1994); E. Deakin, T. Chang, and

115 M. Bernick, Implementation of Residential suburban, automobile-oriented development, Development at Rail Transit Stations in but they also place pressures on public California: Case Studies and Policy Options, institutions to do the same. Working Paper 736 (Berkeley: University of 6 G. Ohland, Transit-Oriented Development in California, Institute of Transportation Studies, Four Cities (Santa Fe, New Mexico, The 1992); M. Boarnet and R. Crane, Travel by Great American Station Foundation, 2001). Design: The Influence of Urban Form on Travel, New York, Oxford University Press, 7 M. Boarnet and R. Crane, “Public Finance 2001); and D. Belzer and G. Autler, Transit and Transit-Oriented Planning: New Evidence Oriented Development: Moving from Rhetoric from Southern California,” Journal of to Reality (Washington, D.C.: The Brookings Planning Education and Research, Institution Center on Urban and Metropolitan Vol. 17 (1998): 206–219. Policy, 2002). 8 Inam, A., “Who Is Responsible for 2 Belzer and Autler, 2002, op. cit. Alternative Development ?” (paper presented at the 43rd Annual Conference of the 3 M. Leccese, “Will T-REX Meet TOD?” American Collegiate Schools of Planning, Urban Land, Vol. 62, No. 5 (2003): 87. Cleveland, Ohio, 2001), 24. 4 G. Ohland, Barrio Logan: Natural-Born 9 Inam, 2001, op. cit., pp. 26–27. Transit Village (Santa Fe, New Mexico, The Great American Station Foundation, 2001). 10 Belzer and Autler, 2002, op. cit, pp. 19–20. 5 Since the retail portion of the Barrio Logan 11 Price Waterhouse LLP, TCRP Report 31: project qualified the lender for Community Funding Strategies for Public Redevelopment Act credits toward state- Transportation—Volume 2: Casebook mandated minimum investments in (Washington D.C.: Transportation Research economically depressed communities, the Board, National Research Council, 1998). bank was willing to provide the loan without 12 Cushman, K., “Joint Development at Transit an anchor tenant willing to guarantee the loan. Stations,” in Transit, Land Use & Urban The character of the Barrio Logan shopping Form, ed. W. Attoe (Austin, Texas, Center for center will be decidedly suburban in design, the Study of American Architecture, 1988). making it more of a “transit-adjacent” than a “transit-oriented” development. Due to the 13 Price Waterhouse LLP, 1998, op. cit. eagerness of the lending institution and the 14 Belzer and Autler, 2002 op. cit, p. 24. redevelopment agency to begin construction and start receiving the sales-tax revenues, the 15 M. Tumlin and A. Millard-Ball, “How to city’s TOD planning guidelines are being Make Transit-Oriented Development Work,” overlooked in favor of suburban strip-mall Planning, Vol. 69, No. 5 (2003): 14–19. development. The community and the 16 J. Gosling, “Development Around Transit: developer have compromised at 3.5 parking Bringing Community Back to the City,” spaces for every 1,000 feet of retail space, mimeo (Baltimore, Maryland: RTKL well above the 2 spaces recommended by the Associates, Inc., 2003). city’s TOD guidelines but well below the suburban standard of 5 spaces, which is what 17 Tumlin and Millard-Ball, 2003, op. cit. the developer wants. While the site currently 18 Gosling, 2003, op. cit. has a street running through its center—a feature that could be useful as a conduit for 19 Gosling, 2003, op. cit. pedestrian site access—the current plans call 20 R. Dunphy, D. Myerson, and M. for its removal. Current designs also call for Pawlukiewicz, Ten Principles for Successful the rear of the grocery store to face a main Development Around Transit (Washington, street adjacent to the site and the truck D.C.: The Urban Land Institute, 2003). delivery bays to face the trolley station. Consequently, it seems that fiscal pressures 21 S. Newberg, “TOD in Dallas,” Urban Land, not only cause private institutions to press for Vol. 62, No. 5 (2003): 105.

116 PART 3

THE IMPACTS OF TOD

TOD is in a position to produce a wealth of benefits, although impacts vary considerably, and some disagreement is found in the literature. Still, evidence continues to accumulate showing that, under the right conditions, TOD can produce real and meaningful benefits, especially with regard to ridership increases and improved economic conditions in neighborhoods surrounding stations. Chapter 7 reviews evidence on the breadth of benefits attributed to TOD, drawing from the literature and secondary sources. The views of various local stakeholders regarding TOD’s potential benefits are also presented. Chapter 8 zeros in on TOD’s ridership impacts, reviewing experiences to date and presenting original research on how development around rail stops gets translated into additional passengers in the San Francisco Bay Area and Arlington County, Virginia. Chapter 9 looks at the benefits of TOD from a private-sector perspective in terms of land- value and real-estate market impacts. Experiences show that various factors, some within the sphere of public-sector influence and others outside it, have a strong bearing on whether development near transit gets translated into price premiums. Chapter 7

Benefits of TOD

TOD’s Range of Benefits often used as an umbrella term for some of the less tangible benefits of TOD. TOD has attracted the interest of Living in a neighborhood that allows one politicians, environmentalists, real-estate to drive less and walk, bike, and use developers, and other groups in recent public transit more, some feel, reduces times because it yields benefits. TOD, as stress, enables one to meet neighbors one of the more visible forms of smart more often and spend more time with the growth, is increasingly viewed as an family, increases physical activity, and antidote to traffic congestion, the offers a safer living environment (i.e., it isolation and detachedness felt in many increases the quality of life). By one suburban communities, affordable- account, “when people say ‘livability,’ housing shortages, and inner-city decline they mean clean air and water, safe and disinvestment. TOD, proponents streets, positive race relations, affordable maintain, can contribute toward creating homes, quality public schools, greenery a sustainable built form, functioning as a and open space, uncongested roads, and counter-magnet to automobile-induced low taxes.”1 Finding pathways to such sprawl. Under the right conditions, TOD lofty goals and reconciling conflicts can be a boon to local communities, (e.g., between quality public schools and especially when coupled with proactive low taxes) is no easy task; nonetheless, public assistance. TOD can spur the TOD is increasingly being looked on as redevelopment of declining a promising approach to providing a neighborhoods (e.g., downtown Long more livable and sustainable future. Beach, California, and Arlington Heights, Illinois), spawn new suburban The literature is replete with platitudes villages (e.g., Pleasant Hill, California, that have been heaped on the TOD and Orenco, Oregon), breathe life into concept; however, relatively few serious older suburban downtowns (e.g., studies have been carried out that assign Bethesda, Maryland, and Plano, Texas), benefits to TOD in any quantitative or and speed up the transition of places monetary sense. For the most part, suffering from slow commercial anecdotes and story lines are relied on encroachment (e.g., Ballston, Virginia, instead. Two benefits for which and Rutherford, New Jersey). quantitative impacts have been measured—ridership increases and Even larger aspirations have been property value gains—receive special attached to TOD, such as its potential treatment as their own chapters in this for building human capital by increasing report (Chapters 8 and 9, respectively). day-to-day social interaction and Methodologically, the challenge in strengthening the bond between residents gauging the payoff of TOD is and their community. Quality of life is attribution—how much of a change in

119 traffic congestion, property values, or the public and private spheres to some open-space consumption is due to TOD degree. Moreover, quite a few of the versus all the other (confounding) benefits attributed to TOD are factors that could account for the associated with any form of compact, change. Presently, the state of mixed-use development (e.g., knowledge on the benefits that can be neotraditional neighborhoods), not just assuredly attributed to TOD is fairly TOD. Benefits like reduced road limited. expenditures, preservation of open space, and lower parking costs are Table 7.1 organizes TOD’s purported generic to any program that reduces benefits into several categories, sprawl and automobile usage (and more providing the structure for much of the specifically VMT). discussion in this chapter. Some benefits are public in nature, accruing to society Table 7.1 also divides benefits into at large.2 Others are largely private, primary and secondary categories. conferred on selective individuals, Primary benefits are those that represent businesses, or property owners. Some a direct cause and effect between TOD benefits, such as increased affordable- and impacts. Secondary benefits spin off housing opportunities, accrue to both largely from primary ones and thus are

Table 7.1. Classes and Recipients of TOD Benefits Primary Recipient of Benefit: Class of Benefit: Public Sector Private Sector Primary 1. Increase ridership and farebox 5. Increase land values, revenues rents, and real-estate performance 2. Provide joint development 6. Increase affordable- opportunities housing opportunities 3. Revitalize neighborhoods 4. Economic development Secondary/Collateral A. Less traffic congestion and G. Increase retail sales (1, VMT-related costs, like pollution 2) and fuel consumption (1) B. Increase property- and sales- H. Increase access to labor tax revenues (5) pools (A, 6) C. Reduce sprawl/conserve open I. Reduced parking costs space (1, 3, 6) (C, 2) D. Reduce road expenditures J. Increased physical and other infrastructure outlays activity (C, E, F) (1) E. Reduce crime (3, 4) F. Increased social capital and public involvement (3, 4) Note: Values in parentheses represent primary benefits and/or secondary benefits that are the source(s) of the secondary/collateral benefit listed.

120 collateral. Many secondary benefits are corridors to rail stations; however, total financial in nature, representing numbers of households and employment “accounting transfers” (i.e., shifts from in a region will not be affected (whether the bank accounts of one group to the the rail system is built or not).4 While bank accounts of another). transit construction might fail to lure new companies and big-dollar Another important distinction to make investments to a region that would not regarding benefits is whether they are otherwise occur, not building transit, not redistributive or generative. linking it with land use, and allowing Redistributive impacts involve transfers traffic congestion and quality of life to and accordingly are mainly financial and slip are likely to be “de-generative.” pecuniary. Higher sales-tax receipts This was brought to light in Atlanta from increased retail-sales activities in a when several large employers threatened TOD community are offset by lower tax to leave the region because of worsening receipts from the loss of retail sales (to traffic congestion. This proved to be a the TOD) in another community with an wake-up call, prompting the governor of automobile-oriented shopping center. the state to appoint a powerful oversight Generative impacts represent net agency, GRTA, whose principle charge efficiency gains that stem from improved is to ensure that land use and resource allocations and accordingly are transportation are closely coordinated economic (versus financial) in nature. every step of the way. GRTA uses its Any reduced traffic congestion and thus financial authority (i.e., control of state travel time savings afforded by TOD is transportation grants) to enforce its an unmistakable economic benefit. Time agenda. Mega-scale mixed-use has scarcity value, thus motorists and developments near rail stops, such as the others who save time as a result of mode Atlantic Steel Project and Lindbergh shifts spurred by TOD are able to use Station in Atlanta, are taking shape in their time more productively, whether large part because automobile-dependent at work or with friends and family. Of sprawl is no longer viewed as course, attributing travel time savings to economically sustainable. TOD is exceedingly difficult without an incredibly rich and extensive time-series One other point needs to be made about database. Factors like induced travel TOD benefits. One cannot simply sum demand (whereby short-term gains in the items listed in Table 7.1 as the average travel speeds are eventually totality of benefits because there is a eroded as motorists switch routes, fair degree of overlap among them. modes, and when they travel) can To do so would be double-counting. further complicate the analysis. Touting the multiplicity of benefits attributed to TOD without acknowledging A 1998 study, Economic Impact such double-counting can discredit Analysis of Transit Investments, TOD by giving nay-sayers an easy concluded that transit’s impacts on cities target for launching their critiques. It and regions are largely redistributive, is fair to say that many of transit’s with few, if any, generative effects.3 benefits are co-dependent and mutually Building a rail system, for instance, reinforcing, with a fair amount of might shift growth from highway overlap between them.

121 Primary Benefits over the past 15 years underscore the ridership payoff of TODs: This section reviews the primary benefits associated with TOD from both a public- • At the Randolph Towers near and a private-sector perspective. Arlington County’s Ballston Station, 69% of residents Public Sector commuted to work via transit, compared with a regionwide Below, the four primary public-sector transit mode share of just 9%;9 benefits—ridership increases, joint • Near the Pleasant Hill BART development opportunities, station, 55% of those living in neighborhood revitalization, and Wayside Plaza and 37% of those economic development—are reviewed. living in Park Regency regularly commuted via BART versus a (1) Ridership Increases. On the public citywide average of 16%;10 and side of the ledger, one of the primary • Nearly 80% of residents who benefits of TOD is higher ridership. moved to the Orenco TOD in What have been referred to as the Hillsboro, Oregon, reported in a “4 D’s”—density, diversity, design, survey that their transit usage had and distance to transit—have a strong increased since moving into their bearing on travel behavior in general new residences.11 and rates of transit ridership in particular. TODs, of course, score Virtually all other public benefits high on all four Ds: density—a related to TOD stem from its doubling of density is associated with ridership bonus. The ridership nearly a 60% increase in transit impact of TOD is considered so boardings according to one study;5 important that a separate chapter is diversity—transit ridership rates at devoted to the topic in this report. mixed-use suburban employment Chapter 8 presents original research centers are on average 5% to 10% probing the link between TOD and higher than they are at single-use rail patronage in the Bay Area and in employment centers (i.e., offices Arlington County, Virginia. As only);6 design—grid-like street discussed in the chapter, high patterns and pedestrian-friendly ridership is in large measure a result designs have been associated with of “self-selection”—those who wish transit-usage levels that are as much to commute via transit make being as 20% higher than usage levels at near a rail station a key factor in their typical suburban subdivision residential location choice. designs;7 and distance to transit— in the Bay Area, those living near Increased ridership represents a net transit are generally five times as economic benefit to the degree that it likely to commute via transit as other translates into the conservation of residents, and in the Washington resources with scarcity value, such as (D.C.) Metropolitan Area and less fuel consumption, and reduced Toronto the likelihood increases to negative externalities, such as less seven to eight times as high.8 Surveys pollution (air, noise, and “time”). A

122 financial benefit that is pecuniary in that an even greater benefit was the nature is higher farebox revenues to increased patronage, and thus transit agencies. (It’s a transfer farebox revenue, that it spurred. benefit in the sense that money goes Interdependencies between office from the pockets of consumers, or development and ridership were transit riders, to the pockets of found—jointly developed office producers, or transit agencies; the space atop or near a rail stop spurred generative, or economic, benefit of ridership, and ridership in turn increased revenues is found in the spurred office development. ridership shifts and consequent congestion relief discussed below, (3) Revitalize Neighborhoods. TOD not in the financial transfers.) can be a catalyst to inner-city redevelopment, breathing new life (2) Joint Development Opportunities. and economic vitality into once- TOD provides a financial benefit to dormant neighborhoods. Ballston in transit operators who are able to Arlington County, Virginia, is a capitalize on the ability to generate textbook example of this, as revenue (e.g., through air rights or discussed in Chapter 12. In the ground leases) or reduce cost outlays 1970s, before Metrorail arrived, (e.g., through sharing the costs of Ballston was a neighborhood in parking lots) from private transition, with an odd mix of low- development at or near a station. density apartments, fast-food outlets, As discussed in Chapter 2, there are automobile-repair shops, and other more than 100 instances of transit marginal land uses. Fortuitous joint development currently circumstances, like the extension of underway in the United States. They the Orange Line to Vienna (which are found mainly among rail freed up land previously used for properties in big cities, but some parking), coupled with proactive smaller bus agencies have managed planning on the County’s part to co-develop (and shed costs for) (e.g., density bonuses and targeted multimodal transfer facilities with infrastructure enhancements), private commercial projects as well. triggered the transformation of Ballston into a vibrant mixed-use Today, WMATA, serving the center. Today, it is one of Northern Washington (D.C.) Metropolitan Virginia’s most prestigious addresses Area, collects around $6 million for offices, restaurants, and hotels. annually in joint development revenues, a figure the agency hopes The extension of Boston’s Red Line to triple over the next decade. At the subway from Cambridge to Bethesda Station alone, the agency Somerville sparked a similar receives $1.6 million in ground-lease transformation of Davis Square, a revenues from the Bethesda Place once-thriving commercial district mixed-use project. A statistical that gradually declined during the analysis of joint development post–World War II era. Streetscape projects in the Washington (D.C.) improvements and storefront Metropolitan Area and Atlanta found upgrading, funded through

123 Community Development Block The Fruitvale transit village in Grants, accompanied the subway Oakland has sparked an economic extension. Soon after the subway renaissance in the once-declining was opened, two new office neighborhood; however, it is unlikely buildings with a total of 170,000 that this would have occurred were it square feet were added to Davis not for heavy subsidies, drawn from Square. Today, both are fully leased. 20 separate funding sources, that have gone into the neighborhood. Capitalizing on the potential Several million dollars in grants community benefits conferred by went to façade improvements and TOD can be an uphill struggle in building renovation for more than many inner-city areas. Research 100 properties along International shows that even in good economic Boulevard, Fruitvale’s main street. times, the mere presence of transit Before the program, vacancies had cannot, by itself, catalyze a been as high as 40% in the area; now miraculous transformation of they are less than 1 percent.15 So far, depressed inner-city neighborhoods.12 the Fruitvale transit village has been A delphi panel study of professionals credited with adding several hundred involved with TOD underscored the new jobs to the area, a figure that is particular difficulties of bringing expected to grow when the project projects to fruition in inner-city reaches build out over the next settings. The panel agreed that few years. difficult-to-surmount barriers include high financial risks, negative images, Private Sector fear for safety, class and racial prejudices, and sometimes concern Two primary benefits of TOD that among residents that their accrue principally to private interests are neighborhoods will be gentrified.13 increased land values and rents and increased affordable-housing (4) Economic Development. Closely opportunities. related to neighborhood revitalization is the ability of TOD to attract new (5) Higher Land Values and Rents. investments and businesses to Those owning properties and marginal or declining neighborhoods, businesses near transit stations can thereby creating new and better- reap financial gains from rising land paying jobs. New employment, of prices and rent. This is presumably a course, has a multiplier effect, pecuniary impact in that relative spinning off other local jobs. Union gains around transit stations are Station in Washington, D.C., a matched by relative losses for bustling facility for 50,000 daily train properties and businesses that lie and bus riders, has sparked an urban away from stations. As reviewed in renaissance. Retail sales have Chapter 9, some evidence suggests increased at an annual rate of 5%, and, that parcels near rail stations that are according to one analysis, between part of a TOD or joint development 1,200 and 1,500 new jobs have been project enjoy even higher premiums created at the station itself.14 due to factors such as better

124 circulation and architectural income renters to afford the higher integration. Land-value impacts rents found in many rail-served vary considerably by setting and cities. circumstances; however, in buoyant real-estate markets, such as the case Secondary Benefits of light-rail-served Santa Clara County in the late 1990s, premiums This section reviews secondary benefits in the range of 25% to 100% are not that spin off of the primary ones unheard of. reviewed in the previous section. The notation in each subheading links each (6) More Affordable-Housing secondary benefit to one or more Opportunities. Many American primary ones—“reduce sprawl/conserve cities with rail transit systems, San open space (1, 3, 6),” for instance, Francisco, Washington, D.C., Los denotes that the secondary benefit of less Angeles, Chicago, and New York, sprawl and open-space conservation to name a few, face an affordable- stems from the primary benefits of housing crisis. In San Francisco and increased ridership (1), neighborhood Los Angeles, for example, only one revitalization (3), and affordable housing out of four households can afford a production (6). The numbers correspond median-priced owner-occupied to those shown in Table 7.1 for the listed home.16 TOD provides an primary benefit. In some instances, so- opportunity to increase the stock of called secondary benefits are largely affordable units mainly because of products of other secondary benefits, for its “location efficiencies.” Studies instance, the private secondary benefit of show that those living in TODs “reduced parking costs (C, 2)” is partly a need to own and use fewer product of the public secondary benefit automobiles. This frees up income of reduced sprawl (C). for housing purchases. Reduced parking also lowers the cost of Public Sector housing. Researchers found that in San Francisco the average increase (A) Less Traffic Congestion and Other in the price of a housing unit with a VMT-Related Costs (1). A primary parking space compared with a unit second-order benefit of TOD, or so without parking is $39,000 to backers claim, is relief of traffic $46,000.17 Such numbers lend congestion and other “ills” of support to the LEM program, which single-occupant automobile travel is based on the very principle of like high fuel consumption and air households being able to trade off pollution. (This is an outcome of lower transportation costs for higher the primary impact of increased housing payments. TODs also help ridership, enumerated as the first rental markets. The poorest 20% of public benefit in Table 7.1.) American families spend 40% Reduced traffic congestion is of their take-home pay on clearly a generative benefit. In the transportation. By reducing driving chain of TOD increasing ridership costs by $3,000 to $5,000 per year, that in turns relieves traffic TODs make it easier for low- congestion, travel-time savings are

125 the hoped-for “outcome” of the transit riding does little good if most TOD “output.” people use their automobiles to reach stations. For a 3-mile automobile The Texas Transportation Institute trip, the typical distance driven to estimates that traffic congestion costs access a suburban park-and-ride the nation $68 billion in time delay lot in the United States, 84% of and extra fuel consumed per year, hydrocarbon emissions and 54% of wasting 3.6 billion hours and nitrogen oxide emissions are due to 5.7 billion gallons of fuel.18 The cold starts (inefficient cold engines increasing unpredictability of traffic and catalytic converters during the congestion (e.g., not knowing when first few minutes of driving) and and where one will get stuck in hot evaporative soaks.21 That is, a traffic) likely adds deadweight sizeable share of tailpipe emissions economic loss through disruptive of the two main precursors to the effects (e.g., having to cancel formation of photochemical smog meetings at the last minute). occur from turning the automobile engine on and driving a mile and Is TOD an effective palliative to turning it off. Drive-alone access traffic jams? There is no direct causal trips to rail stations, regardless of evidence that can be found in the how short they are, emit levels of literature; however, research has pollutants that are not too much made a link between TOD and VMT below those of the typical 10-mile reduction. In as much as VMT solo commute. Thus, relying on an declines occur in peak hours, it automobile to access a metropolitan follows that TOD reduces congestion rail service can reduce the air quality levels to some degree. A study of benefits of patronizing transit. residents living in TOD-like Accounting for the impacts of TODs neighborhoods in the San Francisco in reducing VMT and promoting Bay Area found that they averaged walk-and-ride access, the recent around half the VMT per year as California study claims that “TODs residents of suburban subdivisions, can help households reduce rates of controlling for factors like median greenhouse gas emissions by 2.5 to household incomes.19 Drawing from 3.7 tons per year.”22 Because of its its own literature review, the recent location, design, and density, the California TOD study maintains that Uptown District TOD in San Diego TOD can “lower annual rates of was estimated to have 20% less driving by 20 to 40 percent for those emissions per household compared living, working, and/or shopping with households in nearby near major transit stations.”20 developments.

Part of the environmental benefit of (B) Increase Property- and Sales-Tax TOD comes not just from reducing Revenues (5). A secondary by- VMT but also from substituting product of rising land prices and walk-and-ride and bike-and-ride rents from TOD is increases in access/egress for park-and-ride. property- and sales-tax revenues to From an air quality standpoint, host communities. From a regional

126 perspective, however, this is a financially participates in the land- financial transfer, for it means less value premiums enjoyed by rail- property- and sales-tax revenues in served properties, resulting from (presumably more automobile- accessibility improvements. oriented) communities that would have housed these uses if the TOD Evidence on the tax benefits of TOD did not exist. Still, property-tax is also found in California. More income is an indirect form of value than 60% of customers going to the capture whereby governments share San Francisco Center and Horton in some of the added value created Plaza in San Diego (both regional by infrastructure investments like rail retail centers near downtown rail systems. By reducing the windfall stops) take transit.24 Without rail that land speculators might enjoy, transit connections, a substantial property-tax transfers score high on share of these retail sales equity as well as efficiency grounds. transactions would occur at And to the degree that TODs boost automobile-served suburban land-value premiums above those shopping malls. The 55-acre La associated with being near transit, Mesa Village Plaza TOD in San they yield even greater value-capture Diego is estimated to have generated returns to jurisdictions with the over $3.2 million in additional tax political foresight and wherewithal to revenues over the past decade as a promote transit-supportive growth. result of stepped-up retail activities. It should be noted that subsidies—in As a case in point, take the Pentagon the form of redevelopment financing, City Fashion Center in Arlington discounted land costs, and site County, Virginia. Surveys show that remediation grants—were needed to around half of the shoppers and produce these tax gains. customers going to the Fashion Center arrive by Metrorail. Many are (C) Reduce Sprawl/Conserve Open federal workers who come from Space (1, 3, 6). By encouraging infill Washington’s Federal Triangle area, and accommodating small-lot a 5- to 10-minute train ride away. projects, TODs can reduce pressures Every time they make a purchase, to convert farmland and open spaces they produce sales-tax revenues for into tract housing and other land- Arlington County, which by hungry suburban development. The conservative estimates are several seeds of greater Portland’s ambitious million dollars annually. Overall, TOD initiatives lie in state-mandated Arlington County’s Rosslyn-Ballston Urban Growth Boundaries (UGBs) TOD corridor has been credited with whose principle purpose is to generating 32.8% of the County’s preserve open space and farmland real-estate tax revenue, even though (see Chapter 17). TCRP Report 74: it makes up just 7.6% of the Costs of Sprawl—2000 concluded County’s land area.23 While this that contiguous, compact added value is mainly redistributive, development could save the United one could argue that some of it is States nearly 2.5 million acres of generative since the County land—much of it agricultural and

127 environmentally sensitive—over that effectively curbed sprawl would the next 25 years.25 Sprawl-like likely save the United States over development uses 10 to 40% more $10 billion annually in public land than compact development.26 infrastructure expenditures. By one estimate, switching to higher- density development patterns could (E) Reduce Crime and Increase Safety save as much as 350,000 acres of (3, 4). By creating active places that farmland by 2040 in 11 counties are busy throughout the day and of California’s Central Valley evening, providing “eyes on the agricultural belt.27 Besides saving street,” TODs increase safety for land and money, reducing sprawl pedestrians, transit users, and the through TOD can produce other community at-large. Mixed-use, environmental benefits. One is compact, and pedestrian-friendly improved water quality through places near transit nodes are very reducing the amount of impermeable much in keeping with Jane Jacobs’s surface runoff. Another is preserving prescription for livable, vibrant, biodiversity by reducing the uplifting, and safe-feeling cities as fragmentation of natural habitat poignantly described in her book, and grazing grounds. The Life and Death of Great American Cities.29 TOD can also (D)Reduce Road Expenditures and create “defensible spaces” that instill Other Infrastructure Outlays (1). a sense of safety and well-being, Among the highest costs associated particularly for families with kids, with low-density, automobile- through a tacit form of neighborhood supported patterns of growth are policing. A review of transit stations outlays for roads, sewer- and water- in Tucson, Corpus Christi, and New line extensions, and other York City found that street life in infrastructure expansions. TCRP combination with lighting Report 74 suggests that improvements, addition of retail developments like TOD can reduce kiosks, street art, and a police fiscal outlays for water, sewage, and presence were associated with roads by as much as 25%.28 Overall, declines in both perceived and actual a savings of 188,300 lane-miles of crime rates.30 local roads (valued at $110 billion) and some $12 billion in reduced Another way TODs can increase water- and sewer-line extensions safety is by providing less hazardous could be achieved by redirecting settings for pedestrians and cyclists. growth to compact centers over the One study estimated that accidents 2000 to 2025 period. While some of involving pedestrians cost the state these savings would be offset by of California $4 billion in lost additional outlays for regional transit productivity and medical expenses systems and higher service costs in in 1999.31 The various streetscape, other sectors (e.g., for fire protection traffic-calming, and integrated- as a result of more buildings in dense pathway networks that accompany settings), on balance a stepped-up many TODs can reduce accidents by transit investment and TOD program slowing down moving cars and

128 shielding pedestrians and cyclists to light-rail transit. To create a from harm’s way. Countries with pedestrian scale, $500,000 in federal world-class transit services and clean air funds were “flexed” to transit-supportive land-use patterns, finance the project’s main promenade. like Germany and the Netherlands, Orenco’s interconnected street system have witnessed dramatic reductions shortens walking distances, and tree- in pedestrian and bicycle accidents lined roads, combined with on-street through such design treatments.32 parking, have created a comfortable sidewalk environment. Surveys show (F) Increased Social Capital and Public that the primary reason people have Involvement (3, 4). Robert Putman, bought new homes in Orenco has been in his highly acclaimed book, “community design and amenities.”35 Bowling Alone, makes the point that Orenco’s human-scale “community less automobile-dependent settings, feel” has no doubt increased social like TODs, spur volunteerism, social capital by strengthening the bond interaction, and community between residents and their engagement.33 Because they neighborhoods. The diverse stock of regularly come into face-to-face housing has also given consumers a contact, “chat across the fence,” and wide array of choices in how to spend get to know their neighbors and their disposable income for the two neighborhoods, Putman contends “big-ticket items”: housing and that those living in TOD-like places transportation. get involved in community affairs (expressed by higher levels of Private Sector participation in neighborhood clean- up drives, PTA meetings, voting, and (G)Increase Retail Sales (1, 2). By the like). He estimates that for every concentrating walk-on and walk-off 10% decrease in driving time there is traffic around rail stops, TODs are a 10% increase in civic participation. thought to increase shopping activities Some critics cringe at such physical- at nearby retail outlets. Those passing determinist talk; however, the flip by when exiting transit stations after side of the coin is research showing work, for example, might be inclined that living in automobile-dependent to pick up small items at nearby sprawling suburbs is associated with stores. Increased retail sales, however, commuting stress and higher rates of are a pure financial transfer—from the absenteeism.34 pockets of consumers and merchants of automobile-oriented shops to the The award-winning mixed-use TOD pockets of those doing business near built at the Orenco light-rail station in transit stops. Hillsboro, Oregon, features a wide range of housing options, from Chicago’s Union Station, the second multifamily rowhomes to small-lot, busiest railroad station in the United detached single-family units (see States, is home to several hundred Photo 7.1). The Orenco project was locally owned and operated designed to encourage walking, both businesses. In the mid-1990s, the within the community and for access station’s food retailers were

129 Photo 7.1. Variety of Housing Products and Communal Spaces at Orenco Station, Hillsboro, Oregon. Various amenities and streetscape improvements have drawn many homebuyers to the rail-served community and promoted social interaction, something that many new suburban communities lack.

generating more than $12.5 million only nationwide, but also within the in sales annually, which is about fairly intensively transit-served $600 per square foot of rentable San Francisco Bay Area. Bay Area space.36 This sales figure ranks the communities with high levels of station as one of the top food retail transit accessibility (which TOD locations in the country. contributes to) were found to have higher levels of economic output per (H)Increased Access to Labor Pools worker when controlled for factors (A, 6). Placing more workers within like population size and employment easy reach of jobs via transit can densities. The flip side of poor access increase the pool of labor and to labor is economic losses. The specialized skills from which San Francisco Bay Area Economic employers can draw, providing Forum estimates that local transit-accessible businesses a businesses lose some $2 billion competitive advantage. Recent annually in lost productivity because research demonstrates that higher of employees sitting in traffic jams.38 levels of accessibility during commute hours are associated with higher (I) Reduced Parking Costs (C, 2). labor productivity.37 This held not Businesses and homeowners located

130 near transit stops are able to data from the San Francisco Bay economize on parking, partly because Area, found that mixed land-use larger shares of trip ends are by transit patterns, like those found at most and also because of shared-parking TODs, significantly increased the possibilities. The Commons mixed- odds of walking for non-work trips use TOD in downtown Denver, for of 2 miles or less, controlling for example, has below-standard parking factors like rainfall and slope that (2 spaces per 1,000 square feet of might deter foot travel.41 commercial space compared to a norm of 2.5 to 3 spaces). Shared Debates parking has further lowered supplies. At around $25,000 per space for Not everyone sees TOD in a positive underground parking, reduced light. A spirited debate has surfaced parking afforded by TOD saved the about the pros and cons of TOD, with developer several million dollars. environmentalists and transit advocates Part of these savings, presumably, is praising TOD and skeptics criticizing it. passed on to consumers (especially when there is a “buyer’s,” or price- Portland’s experiences are often cited to elastic, real-estate market). underscore TOD’s beneficial side. Chapter 17 discusses Portland’s many (J) Increased Physical Activity (C, E, F). TOD successes. Portland’s MAX light- America currently faces a serious rail system opened in 1986, and by 2000 obesity problem in part because so more than $2.4 billion in development many teenagers and adults live a had occurred within walking distance of sedentary lifestyle. The U.S. Surgeon the Eastside and Westside stations.42 Job General recommends accumulating access has been materially enhanced by 30 minutes of moderate physical MAX—the Westside line today serves activity per day. However, 74% of 24,000 high-tech jobs, providing U.S. adults do not get enough mobility to what is increasingly a vital physical activity to meet public part of the region’s economy. More than health recommendations, and about 1,800 multifamily housing units have one in four U.S. adults remains been built on infill sites along light-rail completely inactive during their and streetcar lines. Numerous accounts leisure time.39 Public health officials and studies have chronicled the rising contend that walking has been land values and rents in neighborhoods engineered out of everyday life served by Portland’s light rail system.43 because of automobile-dependent landscapes. As walking-friendly Not all interpretations of Portland’s environments, TODs can play a role experiences are so generous. In a in increasing physical activity. A critique of the idea that transit’s benefits recent national study found that get translated into higher land values that those living in more compact settings can be recaptured, one Portland observer were 10% less likely to be obese commented: than those living in low-density neighborhoods, all else being equal.40 Instead of value capture, Portland is Another study, based on travel-diary having to subsidize transit oriented

131 development at light rail stations by Most of (Orenco’s) earliest means of property-tax abatements, construction took place adjacent to zoning bonuses, and permit Cornell Road, while the land expediting. Transit oriented immediately surrounding the rail development was not occurring stop remained vacant . . . In terms naturally in Portland and subsidy of transit use, Orenco Station is being used to jumpstart it. The has largely proven to be a major obstacle is that land prices disappointment. Most people who are not high enough to justify the take the train . . . arrive there by car. densities and structured parking Three large employers . . . provide that are desired by transit oriented free shuttles for their employees to development planners. However, get to and from the light-rail station. rationalizing the subsidy is difficult. This inflates light rail ridership, but TOD is supposed to yield benefits, adds to local traffic—shuttles not costs. Assurances about circulate for hours, often times reducing urban sprawl, increasing empty—thereby diminishing the use of alternative modes, and alleged environmental benefits 48 reducing pollution are not of rail. substantiated. In Portland, there appears to be a continuing need Based on a separate survey of Orenco’s for subsidy.44 residents, another critic claims that “Three-quarters . . . always drive; and Even at the level of a specific light-rail only one out of six use transit (including station, opinions differ markedly bus) more than twice a week.”49 She regarding net impacts. Take the much- further notes that “Orenco Station fails vaunted Orenco Station, discussed the housing affordability test, with earlier in this chapter. On the rosy side housing going around 30% higher are surveys showing that nearly 80% of than the county average.”50 residents living near the Orenco Station said that they ride transit more since Another critic challenges the very moving to their new residence.45 Another premise that TOD relieves traffic researcher estimated that 22% of Orenco congestion. In a paper written for the commuters regularly use public transit, Heritage Foundation, Wendell Cox wrote higher than the 5% average for the region.46 The Orenco TOD’s popularity Transit-oriented development is underscored by the fact that, according increases congestion. The overwhelming majority of travel to one observer, homes are selling 60% to proposed transit-oriented faster than comparable units in non-TOD developments will be by 47 projects. As a further testament to its automobile. This will strain road success, TOD boosters point out that space, slowing traffic and increasing Orenco was voted America’s Best pollution as a consequence.51 Planned Community by the National Association of Home Builders in 1999. This last comment speaks to the protracted nature of TOD’s impacts. In striking contrast, a critical perspective By attracting park-and-riders, passenger on Orenco is offered by analysts from drop-off traffic, pedestrians, and others to the Cascade Policy Institute: a concentrated area, transit stations are

132 often surrounded by congested agency professionals involved with TOD intersections. Also, in the near term, at some level have formed their own TODs unquestionably add more traffic to opinions. The national survey of nearby city streets. Over the longer run, stakeholder groups asked respondents to however, one expects less overall traffic rate, on a scale of 1 (lowest) to 7 congestion as TODs mature and win over (highest), the importance of TOD in more customers, and VMT is certainly achieving various benefits. Figure 7.1 less with growth around transit stops than shows that the highest marks generally without it. In modeling transportation went to TOD’s prospects for boosting and land-use scenarios for metropolitan ridership. TOD also generally scored Sacramento, California, using state-of- well on its ability to improve the-practice simulation approaches, neighborhood and housing conditions. researchers found that the addition of TOD’s contributions to livability and TOD to transit scenarios reduced VMT holding sprawl in check were rated most by up to 9% compared with baseline highly by respondents from large east- conditions.52 This translated to an coast rail cities. There generally economic benefit of 15 cents per trip, appeared to be the least amount of with benefits accruing to all income confidence that TOD could do much to groups. The researchers further found relieve traffic congestion. Respondents that TOD helped reduce the regressive from MPOs were particularly skeptical income effects of higher road pricing as of TOD’s congestion-relieving benefits. part of a balanced transportation strategy. Overall, there was the highest confidence in TOD’s ability to improve local Suffice it to say, many different “spins” conditions like neighborhood quality and have been placed on the impacts of TOD. housing affordability, and less faith in its For this very reason, TOD was called “a role in stemming acute regionwide much-hyped concept” in a recent national problems like sprawl and traffic publication, “with a predictable amount congestion. of misinformation and misrepresentation within the policy and development The 90 survey respondents from transit worlds.”53 Conflicting interpretations and agencies were further asked to rate the research findings stem in part from impacts of joint development projects methodological differences and vagaries, based on their own community’s but they also reflect the ideological experiences. Figure 7.2 presents the leanings of analysts. Polarized research results. Transit-agency respondents felt findings make it difficult to inform joint development was most effective at policy-makers about the benefits of TOD. spurring redevelopment and creating Invariably, decisions regarding TOD get better-designed (e.g., architecturally driven more by political and ideological integrated) projects. They assigned considerations than by objective research. moderate credit to joint development’s abilities to increase public-sector Perceptions of Benefits revenues and transit ridership. They were least confident that it raised Notwithstanding what the literature and property values or contributed research say (or don’t say) about TOD’s significantly to smart-growth benefits and disadvantages, many public- agendas.

133 Increase Ridership

Improve Neighborhood Quality

Increase Housing Choices

Increase Political Support for Transit

Reduce Sprawl

Relieve Traffic Congestion

23456 Mean Rating (1=minimal; 4=moderate; 7=significant)

State DOTs MPOs Redevelopment Agencies Local Governments Transit Agencies

Figure 7.1. Rating of Impact of TOD in Achieving Benefits Based on Experiences in Stakeholder’s Community.

Conclusion residents living near stations are five to six times more likely to commute via The potential benefits of TOD are wide- transit than are other residents in a ranging, spanning across social, region. Other primary benefits include environmental, and fiscal concerns. the revitalization of declining Focusing growth around transit stations neighborhoods, financial gains for joint capitalizes on expensive public development opportunities, increases in investments in transit by producing local the supply of affordable housing, and and regional benefits. TOD, proponents profits to those who own land and say, can be an effective tool in curbing businesses near transit stops. Among sprawl, reducing traffic congestion, and TOD’s secondary benefits are congestion expanding housing choices. relief, land conservation, reduced outlays for roads, and improved safety for The most direct benefit of TOD is pedestrians and cyclists. Many of these increased ridership and the associated benefits feed off of each other, and quite revenue gains. Research shows that a few are redistributive in nature—gains

134 Spurs 50.0% 37.5% Redevelopment 12.5%

Improves Urban 47.7% 50.0% Design 2.6% Significant Increases Public- 46.2% Moderate 30.7% Sector Revenues 23.1% Minimal

44.1% Increases Ridership 41.4% 11.8%

Promotes Smart 39.0% 56.1% Growth 4.9%

Increases Property 34.1% 56.1% Values 9.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% Percent Rating Figure 7.2. Rating of Joint Development Impacts by Transit-Agency Respondents. by some are matched by losses neighborhood and housing conditions. experienced by others. Its greatest benefit, according to national survey respondents, is in increasing Impacts of TOD no doubt vary by time ridership. It is to the potential ridership and circumstances. In a boom economy, benefits of TOD that we now turn. when highways are jam-packed, the benefits of living, working, and running a business near a grade-separated, high- Notes performance transit line are likely much greater than during an economic 1 Project for Public Spaces, Inc., TCRP Report downturn. TOD is also likely to be more 22: The Role of Transit in Creating Livable highly valued in big congested cities Metropolitan Communities (Washington, than in small uncongested ones. It is D.C.: Transportation Research Board, National Research Council, 1997), 5–6. because of such variation that our knowledge of benefits remains partial. 2 The economist definition of “public” is non- Such variation has also given rise to exclusivity, non-rivalness, and often natural monopoly properties (like economies of harsh debates and conflicting signals on scale). TOD benefits, especially in “best case” 3 settings like Portland, Oregon. Cambridge Systematics, Inc., R. Cervero, and D. Aschauer, TCRP Report 35: Economic Impact Analysis of Transit Investments: Those working for transit agencies and Guidebook for Practitioners (Washington, local, regional, and state governments D.C.: Transportation Research Board, generally give TOD a moderate rating in National Research Council, 1998). terms of its ability to produce benefits. 4 Transit investments certainly increase TOD gets high marks for contributing to employment in the form of construction jobs

135 and other project-related activities; however, Journal of Planning Education and Research, these are redistributive not generative in Vol. 17 (1998): 206–219; A. Loukaitous- nature. That is, they represent financial Sideris and R. Bannerjee, “Blue Line Blues: impacts in the form of shifting money from Why the Vision of Transit Village May Not national taxpayers to local (or imported) Materialize Despite Impressive Growth in construction firms courtesy of federal, state, Transit Ridership,” Journal of Urban Design, and local grants, in addition to other financial Vol. 5, No. 2 (2000): 101–125. sources. 13 A. Loukaitous-Sideris, “Transit-Oriented 5 Parsons Brinckerhoff Quade & Douglass, Development in the Inner City: A Delphi Inc., R. Cervero, Howard/Stein-Hudson Survey,” Journal of Public Transportation, Associates, and J. Zupan, “Regional Transit Vol. 3, No. 2 (2000): 75–98. Corridors: The Land Use Connection,” 14 Project for Public Spaces, Inc., 1997, op. cit. TCRP Project H-1 (Washington, D.C.: Transportation Research Board, National 15 T. Parker, G. Arrington, M. McKeever, and Research Council, 1995). J. Smith-Heimer, Statewide Transit-Oriented Development Study: Factors for Success in 6 R. Cervero, “Mixed Land Uses and California (Sacramento: California, Commuting: Evidence from the American Department of Transportation, 2002), 94–95. Housing Survey,” Transportation Research A, 16 Vol. 30, No. 5 (1996): 361–377. California Building Industry Association, Where Will They Live? (Sacramento: 2001). 7 R. Cervero, “Built Environments and Mode 17 Choice: Toward a Normative Framework,” Calthorpe Associates, Wasatch Front Transit Transportation Research D, Vol. 7 (2002): Oriented Development Guidelines (Salt Lake 265–284. City, Utah: Envision Utah, 2002). 18 8 R. Cervero, “Transit-Based Housing in G. Sciara, “Traffic Congestion: Issues and California: Evidence on Ridership Impacts,” Options” (conference summary, Conference on Traffic Congestion, Washington, D.C., Transport Policy, Vol. 3 (1994): 174–183; June 26–27, 2003). JHK and Associates, Development-Related Survey I (Washington, D.C.: Washington 19 J. Holtzclaw, “Using Residential Patterns and Metropolitan Area Transit Authority, 1987); Transit to Decrease Auto Dependence and JHK and Associates, Development-Related Costs” (San Francisco: Natural Resources Survey II (Washington, D.C.: Washington Defense Council, 1999). http:// Metropolitan Area Transit Authority, 1989); www.smartgrowth.org/library/cheers.html. M. Stringham, “Travel Behavior Associated 20 T. Parker et al., 2002, op. cit., p. 6. with Land Uses Adjacent to Rapid Transit Stations,” ITE Journal, Vol. 52, No. 1 21 R. Cervero, BART @ 20: Land Use and (1982): 18–22. Development Impacts, Monograph 49 (Berkeley: Institute of Urban and Regional 9 JHK and Associates, 1987, op. cit. Development, University of California, 10 R. Cervero, Ridership Impacts of Transit- 1995); Barry and Associates, Air Quality in Focused Development in California, California (Sacramento: California Air Monograph 45 (Berkeley: Institute of Urban Resources Board, 1999). and Regional Development, University of 22 Parker et al., 2002, op. cit., p. 43. California, 1993). 23 Arlington County Department of Community 11 Portland TriMet Transit Agency, “Transit- Planning, Housing and Development, Oriented Development Research Associated Development in the Metro Corridors 2000 with Westside MAX Opening” (Portland, (Arlington County, Virginia, 2002). Oregon: 1999). 24 Cervero, 1993, op. cit.; Air Resources Board, 12 M. Boarnet and R. Crane, “Public Finance The Land Use-Air Quality Linkage and Transit-Oriented Planning: New (Sacramento: California Environmental Evidence from Southern California,” Protection Agency, 1994).

136 25 R. Burchell, G. Lowenstein, W. Dolphin, 38 Local Government Commission, Building C. Galley, A. Downs, S. Seskin, K. Still, Livable Communities: A Policy Maker’s Guide and T. Moore, TCRP Report 74: Costs to Infill Development (Sacramento: 1995). of Sprawl—2000 (Washington, D.C.: 39 U.S. Department of Health and Human Transportation Research Board, Services, Center for Disease Control and National Research Council, 2002). Prevention, National Center for Chronic 26 J. Landis, “Imagining Land Use Futures: Disease Prevention and Health Promotion, Applying the California Urban Futures Activity DoNaP, Promoting Physical Model,” Journal of the American Planning Activity—A Guide for Community Action Association, Vol. 61, No. 4 (1995): 438–457. (Champaign, Illinois: Human Kinetics, 1999). 27 B. Muller and T. Bradshaw, Central Valley 40 R. Ewing, T. Schmid, R. Killingsworth, A. Alternative Growth Futures: Options for Zlot, S. Raudenbush, “Relationships Between Preserving California’s Agricultural Urban Sprawl and Physical Activity, Obesity, Capacity (University of California at and Morbidity,” American Journal of Health Berkeley: Institute of Urban and Regional Promotion, Vol. 18, No. 1 (2003): 47–57. Development Working Paper, 1995). 41 R. Cervero and M. Duncan, “Walking, 28 Burchell et al., 2002, op. cit. Bicycling, and Urban Landscapes: Evidence from the San Francisco Bay Area,” American 29 J. Jacobs, The Death and Life of Great Journal of Public Health, Vol. 93, No. 9 American Cities (New York: Vintage Books, (2003): 1478–1483. 1961). 42 G. B. Arrington, “The End of the Suburbs?” 30 Project for Public Spaces, Inc., 1997, op. cit., Community Building Sourcebook (Portland, pp. 65–83. Oregon: 1999). 31 Surface Transportation Policy Project, 43 See http://www.metrokc.gov/kcdot/alts/tod/ Dangerous by Design: Pedestrian Safety portland.htm. in California (San Francisco: 1999). 44 K. Duecker, “A Critique of the Urban http://www.transact.org/Ca/design/toc.htm. Transportation Planning Process—The 32 J. Pucher and L. Dijkstra, “Making Walking Performance of Portland’s 2000 Regional and Cycling Safer: Lessons from Europe,” Transportation Plan,” Transportation Transportation Quarterly, Vol. 54 (2000): Quarterly, Vol. 56, No. 2 (2002): 20–21. 25–50. 45 G. B. Arrington, Reinventing the American 33 R. Putman, Bowling Alone: The Collapse and Dream of a Livable Community: Light Rail Revival of American Community (New York: and Smart Growth in Portland (paper Simon & Schuster, 2000). presented at the 8th Joint Conference on Light Rail Transit Investment for the 34 R. Navaco, R. Stokols, and L. Milanesi, Future, Transportation Research Board, “Subjective and Objective Dimensions of Washington, D.C., 2000). Travel Impedance as Determinants of Commuting Stress,” American Journal of 46 B. Podobnik, “Portland Neighborhood Community Psychology, Vol. 18 (1990): Survey: Report on Findings from Zone 2, 231–257. Orenco Station,” unpublished (Portland, Oregon: Lewis and Clark University, January 35 L. Weigand, “Orenco Station,” Livable 2002). Oregon Case Study, brochure (June 1999). 47 Transit Alliance, On the Move, newsletter 36 Project for Public Spaces, Inc., 1997, op. cit., (February 2000). p. 62. 48 M. Barton and J. Charles, The Mythical 37 R. Cervero, “Efficient Urbanisation: World of Transit-Oriented Development: Economic Performance and the Shape of the Light Rail and the Orenco Neighborhood, Metropolis,” Urban Studies, Vol. 38, No. 10 Hillsboro, Oregon (Portland, Oregon: (2001): 1651–1672. Cascade Policy Institute, 2003).

137 49 C. Bae, “Orenco Station, Portland, Oregon: Regional Land Use Policies: Final Report A Successful Transit Oriented Development for the Environmental Protection Agency Experiment?” Transportation Quarterly, (Davis, California: Department of Vol. 56, No. 3 (2002): 9–18. Environmental Sciences and Policy, University of California, Davis, 50 Ibid., p. 12. February 2000). 51 T. Still, “Transit-Oriented Development: 53 D. Costello, R. Mendelsohn, A. Canby, and Reshaping America’s Metropolitan J. Bender, The Returning City: Historic Landscape,” On Common Ground Presentation and Transit in the Age of Civic (Winter 2002): 47. Revival (Washington, D.C.: Federal Transit 52 R. Johnston, C. Rodier, M. Choy, and Administration, National Trust for Historic J. Abraham, Air Quality Impact of Preservation, 2003), 10.

138 Chapter 8

Evidence on Ridership Impacts

TOD and Ridership accessed by walk-and-ride and bike-and- ride can reduce the need for parking, If there is any single benefit of TOD that improve air quality, and promote all sides agree is beneficial to society as physical activity. All transit trips involve a whole, it is increased ridership. TOD some degree of walking; however, recent is poised to relieve traffic congestion, research makes clear that attending to improve air quality, cut down on tailpipe the mobility and design needs of those emissions, and increase pedestrian safety who exclusively walk to and from in transit-served neighborhoods by stations is especially important.2 coaxing travelers out of their automobiles and into trains and buses. Another important ridership dimension However, congestion relief and of TODs is their mixed-use attributes. environmental benefits accrue to an Some destinations, like offices and appreciable degree only if TODs result residences, produce trips during peak in people making the switch from hours when trains and buses are often driving alone to using transit. While full. Others, like entertainment some critics charge that rail transit complexes, restaurants, and retail shops, investments generally lure bus riders to generate trips mainly during off-peak rail, experiences show that TOD can hours, helping to squeeze efficiencies attract significant shares of former into the deployment of costly rail motorists. A California study found that services. When mixed-use TODs are among those who drove to work when aligned along linear corridors—like they lived away from transit, 52.3% “pearls on a necklace”—trip origins and switched to transit commuting on destinations are evenly spread out, 1 moving within a ⁄2-mile walking producing efficient bi-directional flows. distance of a rail station.1 On balance, This has been the case in world-class research to date shows that TOD yields transit metropolises like Stockholm, an appreciable ridership bonus: well- Copenhagen, and Curitiba, Brazil, where designed, concentrated, mixed-use mixed-use TODs have given rise to development around transit nodes can 55%–45% directional splits.3 This is in boost patronage as much as five to contrast to many U.S. settings, where six times higher than comparable peak-period trains and buses are filled development away from transit. to the brim in one direction but nearly empty in the other. Mixed and balanced While the chief environmental benefit of land uses ensure mixed and balanced TOD comes from coaxing motorists over traffic flows. to mass transit, a secondary benefit is more walking and bicycle trips to and Why is it important to know about the from transit. Larger shares of rail trips ridership impacts of TOD? The main

139 reason is that evidence can be useful in uses. Past studies have mostly compared informing public policy. One application transit modal shares between those is the setting of credits and waivers living within a walkable distance of a against transportation impact fees. station and those who live farther away. Los Angeles, Orlando, and Santa Clara Among the research findings to date are County (CA) currently employ sliding- the following: scale programs, adjusting impact fees downward for TODs. The Santa Clara • Surveys from 1992 and 1993 of Bay County Congestion Management Agency Area workers living near BART found recommends a 9% reduction in estimated that, on average, 32% commuted by trip generation levels when setting rail; this is more than six times the impact fees for new housing projects that regional average of just 5%. lie within 2,000 feet of a light-rail or Automobile availability and parking commuter-rail station. Research can also prices had a huge bearing on help inform policy initiatives like LEM ridership rates. Station-area residents programs by shedding light on the from households with no automobiles commuting cost savings of transit-based were 14 times more likely to rail housing. It can also be of value to long- commute than those from three- range modeling whose outputs weigh automobile households. And 42% of heavily on how scarce transportation station-area residents who paid for dollars are allocated in Transportation parking commuted by rail compared Improvement Programs (TIPs). The with just 4.5% who received free recent scenario testing in Sacramento, parking.5 Further, if a commute was California, using an integrated land-use to downtown San Francisco and a and transportation model, for example, station-area resident from a one- showed that rail investments combined automobile household had to pay for with TOD and road pricing was more parking, there was an 82% likelihood cost-effective and environmentally he or she would take transit; if, on benign than a beltway scenario.4 The the other hand, the person commuted region’s TIP followed suit by giving high to a non–San Francisco destination priority to several major transit projects. and could park for free, the probability plummeted to just 4%. Reviewing the Evidence Recent research updating this study similarly found that the probability Research to date has measured ridership of workers who live near California impacts of residences, offices, and retail rail stops taking transit to work shops that are within walking distance varied dramatically according not 1 of transit stations, normally defined as ⁄4 only to parking policies at the 1 to ⁄2 mile away. Below, key findings workplace but also whether they based on U.S. experiences are were able to flex their work summarized. schedules (see Figure 8.1).

Residences • The highest transit capture rates among those living near rail stops Most of the evidence on the ridership have been recorded for the impacts of TOD is for residential land Washington (D.C.) Metropolitan

140 1.0

0.9 Flextime, Paid Parking 0.8

0.7 Flextime, Free Parking 0.6

0.5

0.4

0.3

Probability of Choosing Transit No Flextime, 0.2 Paid Parking 0.1 No Flextime, Free Parking 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 Travel Time Ratio = (Travel Time Highway/Travel Time Transit) Figure 8.1. Sensitivity of Rail Commuting to Parking Prices, Availability of Flextime Work Schedules, and Travel Time Ratios via Highway versus Transit, Based on Model for Predicting the Likelihood of California Station-Area Residents Commuting by Rail Transit in 2003. Source: H. Lund, R. Cervero, and R. Willson, Travel Characteristics of Transit-Focused Development in California (Oakland, California: Bay Area Rapid Transit District and California Department of Transportation, 2004).

Area.6 Surveys from the late 1980s origins and destinations, making show the share of work trips taken by efficient use of available capacity. rail ranging from 18% to 63%, with (See Chapter 12 for further the highest rates among residents discussions on TOD ridership heading to jobs in the District of impacts in Arlington County.) Columbia. More recent surveys of those living along the • A study of Santa Clara County’s 1 4-mile long, ⁄2-mile-wide Rosslyn- light-rail corridor found TOD Ballston corridor reveal that 39% use residents patronized transit as their transit to get to work and 10% walk predominant commute mode more or bike; these rates are three times than five times as often as residents higher than the average for Arlington countywide.8 County as a whole.7 Also, 64% of rail patrons who live along the corridor • At the Center Commons mixed- walk to stations. Moreover, because income TOD in Portland, transit of the mixed-use nature of TODs mode share increased nearly 50% for along the Rosslyn-Ballston corridor, work trips (from 31% before moving counts of station entries and exits are into the project to 46% after) and by fairly similar during peak hours—that 60% for non-work trips (from 20% is, stations handle a balance of trip to 32%).9

141 Offices by rail than other Bay Area commuters.13 Living near transit Many offices enjoy high rates of transit made a difference. On average, ridership by virtue of the fact that they 19.3% of those who lived in a city are located downtown where levels of served by BART and who worked transit accessibility are the highest. The near BART commuted by rail availability of free parking at most non- compared with 12.8% of those who downtown workplaces erodes transit worked in a similar setting but did ridership. Evidence on the ridership not live in a BART-served city. rates of offices near rail stops (summarized below) comes mainly from Retail California and the Washington (D.C.) Metropolitan Area. Retail shops and consumer services can be particularly attractive additions to • Surveys of rail commuting in the TODs because they often generate off- Metropolitan Washington (D.C.) peak and weekend trips. Thus, they help Area found that nearly 50% of those to fill trains and buses during periods of working in offices within 1,000 feet underutilized capacity. As all-day, all- of downtown Metrorail stations rail week trip generators, they improve the commuted; in the case of offices that cost-effectiveness of expensive rail were comparable distances from the investments. At least three studies have more suburban Crystal City and documented ridership rates among those Silver Spring stations, the shares shopping at retail stores near rail were 16% to 19%.10 Place of stations. Findings include the following: residence was a particularly important explainer of whether office • For retail centers near Washington workers patronized transit. In the (D.C.) Metrorail stations, location case of the Silver Spring Metro and time of day of trips were the Center, a 150,000-square-foot office most important determinants of tower 200 feet from the Metrorail mode choice: well over 50% of portal, 52% of workers who lived in shopping trips made to large Washington, D.C., rail commuted; downtown retail stores or made to among those living in surrounding other close-by malls at midday were Montgomery County, Metrorail was made by Metrorail.14 used by just 10%.11 • A 1993 survey found that over 60% • At one of San Diego’s most of customers surveyed at downtown prominent joint development San Diego’s Horton Plaza, two projects, the Metropolitan Transit blocks from the Trolley line, arrived System (MTS)/James R. Mills by transit or on foot.15 Building, surveys show that 18% of building users arrive by transit.12 • Experiences in the San Francisco Bay Area reveal that location of • Surveys of those working in offices retail centers has a strong bearing on near BART found that workers were rail capture rates.16 Surveys from 2.5 times more likely to get to work 1993 show that 33.8% of patrons at

142 the San Francisco Centre in station portal. In California, the ridership downtown San Francisco, which has gradient is even steeper. Surveys of a direct portal connection to BART, residents of 27 housing projects near rail arrived by transit. For two suburban stops in the Bay Area, San Diego, and malls also within an easy walk to Sacramento showed that ridership fell by BART, the shares were below 20%. 0.85% for every 100-foot increase in walking distance.18 Proximity and Built Environments Also Matter In addition to relative proximity to a station, built-environment characteristics Research also shows that proximity to of TODs also influence transit ridership. transit matters a lot. Table 8.1, based on The study of 27 transit-based housing 1987 experiences in the Washington projects in California found density to be (D.C.) Metropolitan Area, reveals that the most important land-use predictor of commuting by transit erodes rapidly ridership rates.19 Findings were similar with distance from rail stations. For for offices: on average, every addition of instance, 63% of residents of The 100 employees per acre was associated Consulate apartment complex, 300 feet with a 2.2% increase in rail commuting. from the Van Ness-UDC Station, The California surveys of residences and 1 commuted via Metrorail; at the offices within ⁄2 mile of stations found Connecticut Heights project, 3,800 feet land-use mixes and the quality of the away from the same station, 24% rode walking environment had relatively little Metrorail to work.17 In the Washington impact on transit usage after controlling (D.C.) Metropolitan Area, the share of for density: “It could be that within a trips by transit fell by around 0.65% for quarter to a half mile radius of a station, every 100-foot increase in the distance features of the built environment of a residential site from a Metrorail (ignoring issues of safety and urban

Table 8.1. Modal Splits for Residential Projects Near Metrorail Stations, Washington (D.C.) Metropolitan Area, 1987 Metrorail Station Housing Project Distance to Percent of Commute Station (ft) Trips by: Rail Auto Other Rosslyn (VA) River Place North 1,000 45.3 41.5 13.3 River Place South 1,500 40.0 60.0 0.0 Prospect House 2,200 18.2 81.9 0.0 Crystal City (VA) Crystal Square Apts. 500 36.3 48.8 14.9 Crystal Plaza Apts. 1,000 44.0 45.0 11.0 Van Ness-UDC (DC) The Consulate 300 63.0 32.6 4.4 Connecticut Heights 3,800 24.0 56.0 20.0 Silver Spring (MD) Twin Towers 900 36.4 52.3 11.4 Georgian Towers 1,400 34.7 43.1 22.2

Note: “Other” consists of bus, walking, cycling, and other travel modes. Source: JHK and Associates, Development-Related Survey I (Washington, D.C.: Washington Metropolitan Area Transit Authority, 1987).

143 blight) matter little—as long as places within an easy walk of a transit node. are near a station, the physical That is, being near transit and being able characteristics of the immediate to regularly get around via trains and neighborhood are inconsequential.”20 In buses weighs heavily in residential their comprehensive review of empirical location choice. High ridership rates are studies on travel and built environments, simply a manifestation of this lifestyle Reid Ewing and Robert Cervero preference. concluded: “transit use depends primarily on local densities and A study of Santa Clara County’s secondarily on the degree of land use Guadalupe light-rail corridor, for mixing.”21 Still, several studies show example, found TOD residents got to that the influences of mixed uses and work via transit five times as often as the urban design on transit ridership are not typical employed resident of the inconsequential, although these studies county.25 Self-selection was evident in were conducted across all land-use that 42% of respondents stated that being settings, not just TOD. A study of six close to transit was a big factor in the large suburban employment centers choice of a home or apartment. As found that the existence of a retail further evidence of self-selection, a 1993 component in an office building survey of San Francisco Bay Area increases transit commute shares by residents living near rail transit found 3%.22 Additionally, using data on over that 56.2% got to work by trains or buses 15,000 households from the 1985 at their previous Bay Area residence that American Housing Survey, another was far away from a rail stop.26 That study found that the presence of retail study concluded that many TOD shops within 300 feet of one’s residence residents have a proclivity to patronize increased the probability of transit transit, whether to avoid the stress of commuting by 3% (on average) commuting, for reasons of personal ostensibly because transit users could taste, or to make more productive use of pick up convenience items when heading time spent getting to work. home after work.23 Recent research using data from rail-served Montgomery A recent study explicitly examined County, Maryland, reached a similar residential self-selection as a primary conclusion: mixed uses at origins and determinant of ridership rates among destinations induce rail travel for all trip TOD residents.27 Using data on travel purposes, with elasticities between diaries and locations of residences and transit usage and land-use diversity workplaces from the 2000 Bay Area ranging from 0.45 to 0.62.24 Travel Survey, a nested logit model was estimated. The selection of rail transit Self-Selection and Rail Commuting for commuting was nested within the 1 choice of whether to reside within ⁄2 Ridership gains tied to TOD are mile of a rail station. Factors used to significantly a product of self-selection. explain whether someone lived near Those with a lifestyle predisposition for transit included workplace location, job transit-oriented living conscientiously accessibility via highway and transit sort themselves into apartments, networks, and household and personal townhomes, and single-family units characteristics (e.g., type of household,

144 type of occupation, and automobile From the nested logit results of the Bay ownership levels). Using records for Area study, a sensitivity test was more than 11,000 individuals, it was conducted to show how probabilities of found that 19.6% of those living within rail commuting varied as a function of 1 ⁄2 mile of a rail stop got to work by rail three policy variables: residential location 1 transit; among those living beyond the (within ⁄2 mile of a station or beyond); 1 1 ⁄2-mile radius, the share was 8.6%. For workplace location (within ⁄4 mile of a the residential-location component of station or beyond); and household the nested choice model, whether one automobile-ownership levels (0, 1, 2, 3+). 1 worked within ⁄4 mile of a rail station The resulting sensitivity plot, Figure 8.2, was the most significant predictor of shows probabilities of rail commuting are whether one lived near transit. In very high among all groups when the addition to residential location, worker lives in a household with no automobile-ownership levels were found automobiles. Adding one automobile to have a strong bearing on whether results in probabilities plummeting; they workers commuted by rail. All three fall most precipitously for those residing factors—residential location, and working away from stations. For automobile-ownership levels, and rail residents of transit-based housing, commuting—were found to be closely probabilities fall more gradually with interdependent. Using conditional automobile-ownership levels. For those probabilities, the study suggested that living away from transit, the likelihood of upwards of 40% of the ridership bonus rail commuting is not much different in associated with TOD is a product of two-automobile and three-or-more- residential location (i.e., self-selection). automobile households. And for those

0.9 0.8 Reside Near/Work Near Rail 0.7 Reside Near/ Work Away from 0.6 Rail 0.5 0.4 Reside Away/ 0.3 Work Near Rail

ility Commute by Rail by Commute ility Reside Away/ 0.2 Work Away from ab Rail

ob 0.1

Pr 0 0123+ Number of Automobiles in Household Figure 8.2. Sensitivity Plots of Rail-Commute Probabilities by Number of Automobiles in Household for Those Living and Working Near and Away from Stations. 1 1 Note: Reside Near = ⁄2 mile or less; Work Near = ⁄2 mile or less. Source: R. Cervero and M. Duncan, Residential Self Selection and Rail Commuting: A Nested Logit Analysis, Working Paper 604 (Berkeley: University of California Transportation Center, 2002).

145 living and working away from a rail stop, Holtzclaw and a team of collaborators the odds of commuting by a non-rail recently studied travel behavior and mode is about the same for a one- and a automobile-ownership levels as three-or-more-automobile household— functions of land-use and transit- less than 1 in 10. accessibility characteristics of neighborhoods in three regions with Figure 8.2 also reveals that working near LEM programs: Chicago, Los Angeles, transit interacts with automobile- and San Francisco. A doubling of ownership levels to produce different residential density was found to reduce probabilities among station-area household automobile ownership and dwellers and their counterparts. Working VMT per capita in the 32% to 43% near transit and having no automobiles range. The influence of transit means there is a very high likelihood, accessibility on automobile ownership well over 80%, of rail commuting for was less than that of density, but it was both groups. Adding an automobile to still appreciable.28 the household results in the probability dropping far more sharply for non- Self-selection in no way diminishes the station-area residents, however, to below importance of planning for and building the probability (0.28) for station-area transit-oriented residences. If the 1 residents who work beyond ⁄4 mile of marketplace was perfectly functioning, the station. This suggests that an then a case might be made for appreciable share of station-area governments to get out of the way so dwellers who rail commute do so out of that producers and consumers could sort choice rather than necessity, further themselves into station areas unfettered. hinting that self-selection has taken However, marketplaces are not perfect; place. Adding a second automobile to a factors such as NIMBY resistance to station-area household, however, lowers new construction, exclusionary zoning, the probability of rail-commuting imperfect information, or negative sharply, below that of a non-station-area externalities affect them. Accordingly, worker from a two-automobile findings of self-selection underscore the household whose job site is near a rail importance of breaking down barriers stop. This indicates that the transit- to residential mobility and introducing ridership benefits of transit-based market-responsive zoning in and around housing comes from those with transit nodes—zoning that acknowledges relatively few (i.e., under two) that those living near transit tend to automobiles in the household. In terms be in smaller households with fewer of public policy, this argues for flexing automobiles. Flexible parking standards parking standards for housing projects and LEMs would further encourage self- near rail stations. selection of TODs.

More recent research has confirmed that Transit Joint Development those living in compact, transit- and Ridership accessible locations tend to own fewer automobiles and log fewer vehicle miles Some evidence suggests that joint of travel per year. As part of an development projects, such as air-rights evaluation of the LEM concept, John development on transit-agency property,

146 yield among the highest ridership studied more in the San Francisco Bay dividends of any form of TOD. In a 1983 Area than anywhere. Surveys of study of nine transit joint development residents, office workers, and shoppers projects in the United States, Keefer in the early 1990s showed that being found that every 1,000 square feet of near transit significantly boosted new commercial floor space near a rail ridership levels, as documented in the station generated an additional six transit 1993 monograph, Ridership Impacts trips per day, yielding an additional of Transit-Focused Development in $11.4 million (in 1982 dollars) in annual California. This study was recently farebox receipts.29 Case studies from the updated based on travel-diary surveys early 1980s estimated that fully realized conducted in May 2003; the recent joint development at rail stations with surveys found that TOD’s ridership buoyant real-estate markets could bonus has held steady.33 increase ridership by 10% to 25%.30 An empirical investigation of joint To further probe the connection between development projects in the Washington land development and transit usage in (D.C.) Metropolitan Area and Atlanta the Bay Area, research was carried out, found more modest impacts, although as part of the TCRP Project H-27 study, interdependencies between office using recently released data from development and ridership were found Census 2000 on journey-to-work travel statistically. Jointly developed office and neighborhood attributes. Using the space on top of or near a rail stop census data and Geographic Information spurred ridership, and ridership in turn System (GIS) tools, an aggregate spurred office development.31 analysis of proximity to transit and Statistically, a 10% increase in a rail modal splits was conducted using each station’s share of regional office growth of the 129 rail stations in the San was associated with around a 1% Francisco Bay Area as a data increase in that station’s share of observation.34 The Bay Area features systemwide ridership. High rates of three types of rail services—heavy rail transit usage have also been found (BART), commuter rail (Caltrain and among patrons of joint development Altamont Commuter Express), and projects in San Diego and Miami.32 light rail (VTA)—thus the breadth of The ridership boost offered by joint rail offerings enriched the analysis. development projects could be due to (Map 8.1 shows the extent of regional design factors, such as architectural rail services in the urbanized portions integration of transit stations and of the Bay Area.) adjoining buildings, improved pedestrian circulation, and transit’s visible The analysis that follows uses presence. commuting, socio-demographics, and neighborhood characteristics of TOD-Ridership Case Study: households within 1 mile of each of the San Francisco Bay Area 129 Bay Area rail stations to probe how station-area land-use characteristics As revealed by discussions so far in this influence transit commute modal splits. chapter, the ridership impacts of GIS tools allowed census-tract-level data development around transit have been to be interpolated for 1-mile rings

147 commutes by transit among station-area residents and each of the “3Ds”— specifically, residential densities, numbers of retail and service jobs, and city block patterns. Figure 8.3 summarizes the results of simple bivariate regression equations that estimate shares of motorized commutes by transit as a function of each of the “D” dimensions.37 In general, Year 2000 transit commute shares among those residing within a mile of a station rose with residential densities, with the relationship exhibiting a slight logarithmic bend. From the equation, the likelihood that a Bay Area station-area resident rail commuted was 24.3% at densities of 10 units per gross acre. Doubling densities to 20 units per acre increased the likelihood to 43.4% and quadrupling them to 40 units per acre catapulted the probability to 66.6%.

Map 8.1. Rail Transit Coverage in The second “D” in Figure 8.3 relates to the San Francisco Bay Area. diversity, or land-use mix. The index used here is the number of retail and service jobs per gross acre within a mile around rail stations. On average, the radius of a station. From the perspective share of motorized commute trips made of modeling modal shares among by transit among those residing within residents, the addition of retail and 1 mile of the 129 Bay Area rail stations service activities represents a in the year 2000 was 12.6%. This diversification of land uses. Virtually all compares to a regionwide transit modal TODs, even if they are predominantly split of 9.7%, based on Census 2000.35 residential in nature, include retail and service uses. As noted earlier, several Ridership and the 3Ds: studies suggest that the presence of Density, Diversity, and Design shops, eateries, and other services in a station area can boost transit patronage Simple bivariate regression plots reveal by several percentage points since riders that among those living within a mile of can easily pick up convenience items a Bay Area rail stop, the “3 Ds” of the when en route to home in the evening, built environment—density, diversity, just as they often do by automobile.38 and design—matter greatly.36 For the The regression equation shown in Figure 129 Bay Area rail stations that were 8.3 shows that transit modal shares rise studied, a strong positive relationship with numbers of retail and service jobs was exhibited between shares of up to a point; at 80 or more jobs per

148 .6 Figure 8.3. Transit Commute Modal Splits and the “3Ds” of TODs .5 (Influence of Density, Diversity, and Design on Proportion of Commutes .4 DENSITY by Transit for Bay Area Station- Area Residents, 2000). .3

.2 Prop. Motorized Commutes by Transit .1 BIVARIATE REGRESSIONS 0.0 0 10 20 30 40

Dwelling Units per Gross Acre DENSITY:

.6 Prop. Commutes by Transit = .0015 + .0266(Housing Density) .5 – .00025 (Housing Density)2

.4 R2 = .738

.3 DIVERSITY DIVERSITY: .2

Prop. Motorized Commutes by Transit Prop. Commutes by Transit = .1 .0510 + .0121 (Retail & Service Jobs) – .000071 (Retail & Service 0.0 2 0 20 40 60 80 100 120 Jobs)

Retail & Service Jobs per Gross Acre R2 = .566

.6 DESIGN: .5 DESIGN Prop. Commutes by Transit = .4 .0830 – .844 (No. City Blocks per Acre) + 6.130 (No. City Blocks 2 .3 per Acre)

2 .2 R = .817

Prop. Motorized Commutes by Transit .1 Note: N = 129 for all equations. 0.0 All predictor variables are 0.0 .1 .2 .3 .4 significant at the .01 probability No. City Blocks per Acre level.

149 acre, transit modal splits trend Weighing Factors in Combination: downward, possibly representing the fact Multiple Regression Results that these are different residential markets given that residences generally While revealing, a limitation of the represent a small share of land uses at simple plots and equations discussed such high employment densities. From above is that built environment factors the equation, the likelihood of a station- are correlated—dense settings, for area resident rail-commuting was 11% example, also tend to be the most land- with five retail/service jobs per gross use diverse. Moreover, other factors acre. Raising this to 20 jobs per acre that might be associated with built- boosts the transit commute modal share environment variables, like parking to 26.5%, and increasing it to 60 jobs per supplies and median household income acre shoots the share up to 52.1%. levels, could also be significant predictors. Failure to account for these The third “D” in Figure 8.3 gauges the other relevant variables can bias the design features of neighborhoods around statistical results. In this spirit, a Bay Area transit stations. Specifically, it multiple regression equation was measures the average number of city estimated that predicts the influences of blocks per acre within a 1-mile radius of the three built-environment variables in stations. It gets at the general scale, land combination with other “control” platting, and street connectivity of station variables. areas. The larger the number, the more blocks per acre and correspondingly, the Table 8.2 presents the best-fitting more walkable a neighborhood generally multiple regression results. Including is. The average number of blocks per characteristics of stations and acre ranged from a low of .028 per acre neighborhoods resulted in the removal in BART-served Orinda, an affluent of some of the built-environment suburb in Contra Costa County, to a high variables presented in Figure 8.3 due to of .353 per acre for areas around the multi-collinearity. Still, the results are Embarcadero BART station in downtown revealing. Notably, residential densities San Francisco. (Stated another way, within a mile of a station still matter the average block size in Orinda was when it comes to transit commuting 35.7 acres compared with 2.8 acres among station-area residents. around the Embarcadero Station.) Controlling for other factors, every Among any single built-environment 10 additional units per gross acre (which variable, average block size (expressed on a net residential acre basis generally in quadratic form) was the strongest corresponds to 3 to 4 additional units) predictor of transit modal shares, is associated with a 3.7% increase in indicated by the R-squared statistic of transit commute modal shares. Of 0.817. The equation predicts that at an particular note, however, is the fact that average city block size of 6 acres (for the density and design positively interact 1-mile radius around a station), the with each other. That is, higher likelihood that residents rail-commuted residential densities combined with was 11.2%; shrinking the average block small city blocks boost transit commute size to 3 acres increased the probability shares up even higher. For example, of taking transit to work to 48.2%. accounting for interaction effects, a

150 Table 8.2. Multiple Regression Results for Predicting Share of Year 2000 Motorized Commute Trips by Transit as Functions of Built Environment, Transportation, and Household Variables (for 129 San Francisco Bay Area Stations and 1-Mile Rings, Ordinary Least Squares Estimation) Coefficient T-Statistic Probability Built-Environment Variables Residential Density: Housing Units per Gross Acre .0037 3.226 .002 Density*Design Interaction: (Housing Units per Gross Acre; * No. City Blocks per .0351 3.659 .000 Acre) Transportation Variables Transit Job Accessibility: No. of Jobs (in 100,000s) Accessible over Transit .0857 10.972 .000 Network During Peak Hours Highway Job Accessibility: No. of Jobs (in 100,000s) Accessible over Highway –.0035 –4.689 .002 Network During Peak Hours Parking Supply: No. of spaces (in 1,000s) at station .0234 3.613 .000 Household Variables Automobile Ownership: Mean No. of Vehicles per –.0851 –4.689 .000 Household Income: Mean Household Income (in $10,000s) .0359 2.085 .039 Constant .1880 5.096 .000 Summary Statistics N = 129 R2 = .928 F-ratio (F) = 224.1 (probability = .000) doubling of mean residential densities Other variables in Table 8.2 also reveal from 10 to 20 dwelling units per gross something about ridership rates among acre leads to a rise in transit commute station-area residents. Enhancing job mode share from 20.4% to 24.1% for a access over the transit network increases typical Bay Area station setting with an the share of work trips by transit; average block size of 6 acres; the predictably, doing so over the highway commute mode share rises to 27.6% network has the opposite effect.40 Park- if higher residential densities are and-ride supplies further increase the combined with a smaller average odds of rail commuting, even among block size of 4 acres.39 those living within a mile of a station.

151 While density exerts a stronger influence TOD-Ridership Case Study: on transit modal splits than do parking Arlington County, Virginia supplies, it is notable that even among those living within walking distance of a No place in the United States has station, availability of parking is still an witnessed more high-rise, mixed-use inducement to transit riding. The final development along a rail corridor over set of control variables in Table 8.2 the past three decades than Arlington captures socio-demographic attributes County, Virginia. Accordingly, there is of station areas. All else being equal, the no better place to examine the ridership share of motorized commutes by transit bonus associated with TOD. As falls as average automobile-ownership discussed in Chapter 12, Arlington levels rise in station areas. This is to be County’s two major rail corridors— expected. Perhaps more surprising is the Rosslyn-Ballston and Jefferson Davis— positive association of household income have witnessed an explosive growth in with transit modal splits. Given that Bay building activity since 1970, when Area rail systems converge on central Metrorail planning got underway: 24.4 business districts that contain large million square feet of office space, 3.8 shares of the region’s professional office million square feet of retail space, some sector, the positive influence of income 24,000 mixed-income dwelling units, is not unexpected. This relationship and over 6,300 hotel rooms.41 These probably reflects self-selection: office additions were hardly the results of good workers with downtown jobs and fortune or happenstance. Rather, the comparatively high incomes are more transformation of once-rural Arlington likely to reside near rail stops for County into a showcase of compact, purposes of economizing on mixed-use TOD has been the product of commute trips. ambitious, laser-focused station-area planning and investment. Overall, the model shown in Table 8.2 was a very good predictor, explaining For purposes of examining the over 90% of the variation in modal relationship between building activities shares of transit commutes among and rail ridership in Arlington County, neighborhoods surrounding the 129 Bay a cross-sectional/time-series database Area rail stations. The results suggest was built using annualized counts that building housing around rail stops of development activities for the is positively associated with transit 1985-to-2002 period. Data were commuting; doing so at higher densities compiled only for seven station areas— bumps up transit’s market share even Ballston, Clarendon, Court House, more. Combining higher densities with Crystal City, Pentagon City, Rosslyn, a more walkable scale design of city and Virginia Square—where building streets and block patterns draws even activities had occurred. (See Map 8.2 larger shares of employed residents to on Arlington County’s Metrorail transit. In combination, these results stations.) In combination, 18 time underscore the importance of creating points of data for seven stations and redeveloping neighborhoods around provided a pooled database of 126 rail stops that are transit-supportive in observations. Building-activity data their designs. were obtained from the Arlington

152 Map 8.2. Washington Metrorail Rail Stations in Arlington County. The station areas of the seven Metrorail stations with significant development activity since 1970 are shaded.

County Department of Community Station Counts and Development Planning, Housing, and Development; Activity summary information can be found in the report titled Development in the As expected, there was a fairly strong Metro Corridors—2000.42 association between the number of boardings and alightings at Metrorail Supplemental data on Washington stations and the amount of development Metrorail service levels were obtained that existed. Figure 8.4 shows that from the regional transit agency, ridership gains closely tracked increases WMATA, and additional information in the number of dwelling units and the such as mean regional gasoline prices amount of commercial square footage in (for each time point) were obtained from the seven station areas over the 1985-to- various secondary sources.43 For the 2002 period. From the simple linear 1985-to-2002 period, the average count regression equations, every additional of daily station entries and exits was dwelling unit added slightly more than 7,840 for the Arlington County stations one additional boarding and exit. Given that were studied. The mean amount of that residents usually enter and leave a development activity within the seven station during the same day, this station areas was 3,920 dwelling units corresponds to roughly one daily and 4.2 million square feet of office and Metrorail trip for every two housing retail space. units added—still a respectable number.

153 18,000 Figure 8.4. Station Boardings

16,000 and Exits as Functions of Development Activity in 14,000 Arlington County, Virginia, 1985–2002. 12,000

10,000

8,000 BIVARIATE 6,000 REGRESSIONS

4,000

Average Daily Station Boardings and Exits HOUSING UNITS: 2,000

0 Station Boardings & Exits = 0 2,000 4,000 6,000 8,000 10,000 12,000 3204.9 + 1.173 (Housing

No. of Housing Units in Station Area Units)

2 18,000 R = .680

16,000 OFFICE & RETAIL 14,000 DEVELOPMENT:

12,000 Station Boardings & Exits = 3603.6 + 1.018 (Square Feet of 10,000 Office & Retail Space, in

8,000 1,000s)

2 6,000 R = .723

Average Daily Station Boardings and Exits 4,000 Note: N = 126 for both equations. 2,000 All predictor variables are 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 significant at the .01 probability Square Feet of Office & Retail Space level.

Metrorail ridership was equally the same station, this corresponds to one responsive to office and retail additional Metrorail journey per 2,000 construction. The bivariate equation additional square feet of commercial floor suggests that each additional 1,000 square space.) In very general terms, these feet of commercial floor space was relationships correspond to an elasticity of associated with an additional station around 0.5; that is, a doubling of building boarding or exit. (Again, to the degree that activity was associated with a 50% employees or customers entered and left increase in Metrorail ridership.

154 Arlington County Ridership Model of the predictor variable “rail service frequency.” The second stage of A limited set of variables was available estimation involves using these predicted to estimate the Arlington County values, along with other variables, to ridership model because annual data, explain Metrorail boardings and such as the data obtained for building alightings. This technique is often activities, are rarely compiled for other referred to as two-stage least squares potential predictor variables (e.g., census estimation.45 data are available only once every 10 years). Fortunately, annual data were Table 8.3 presents the best-fitting available from WMATA on rail service multiple regression results. As expected, levels, as represented by the amount of Metrorail boardings and alightings rose passenger space in rail cars (assuming with service intensities over the 1985-to- four passengers per square meter of floor 2002 period. Office and retail building space) passing through stations per day. activities were even more influential. Given that transit ridership is highly Because of the close association of sensitive to transit service levels (with commercial and residential construction, elasticities typically in the range of 0.7 both variables could not enter the to 0.8), the availability of this variable equation at the same time; office-retail on an annual basis for all stations, along development was the strongest predictor with boardings and exits, enabled a of the two; therefore, it was used in the streamlined model to be estimated.44 model. Residential development did Other annualized data that were enter the model; however, it entered as candidates for entry into the model an interactive term with the service included mean regional gasoline, station frequency variable. That is, Metrorail parking supplies, and dummy variables station boardings and alightings for time points (to control for secular increased through the combined trends) and station areas (to control for influences of increases in residential idiosyncratic characteristics of particular construction and service levels. Because stations not captured by other variables of the multicollinearity of factors like in the equation). development and service levels, including this interactive term enabled In estimating a model of ridership as a the model to be expanded without function of service levels and other contaminating the results. explainers, ordinary least squares estimation can produce biased results. The model reveals the following This is because of the endogeneity, or relationships. Holding all else constant: interrelatedness, of transit supply and demand. Over time, service levels • Every 1,000 additional passenger influence ridership, and, assuming that spaces passing through a station per transit planners are doing their job, day attracted, on average, 210 ridership influences how much service additional passengers; is delivered. To account for this simultaneous relationship, instrumental • Every 100,000 square feet of variables, representing exogenous additional office and retail floor influences, were used to estimate values space increased average daily

155 Table 8.3. Multiple Regression Results for Predicting Metrorail Station Boardings and Exits as Functions of Transit Service Levels and Building Activities (for Seven Arlington County Metrorail Stations, 1985 to 2002, Two-Stage Least Squares Estimation) Coefficient T-Statistic Probability Transit-Service-Level Variable Rail Service Frequency: No. of Passenger Seats Passing Through Metrorail Station .2096 1.190 .236 per Day** Building-Activity Variable Office-Retail Development: Square Footage of Office and Commercial Floor Space (in 1,000s) in Station Area .4740 2.186 .031 Residential Development-Service Frequency Interaction: Dwelling Units, in 1,000s * Rail Service Frequency .0055 2.124 .036 Constant 1239.3 0.748 .456 Summary Statistics N = 126 R2 = .772 F = 137.3 (probability = .000) ** Instrument variables used to estimate predicted value were mean regional gasoline price ($); office-retail development; time-series dummy (1985=1, 1986=2, etc.); and station-area (0–1) dummy variables for Ballston, Clarendon, Court House, Crystal City, Pentagon City, and Rosslyn Stations.

boardings and alightings by nearly ridership in Arlington County. Along 50; and with the strong general influence of real-estate development on patronage • Every 100 additional residential counts (as discussed in Chapter 12), units, when combined with 100 Arlington County’s balance of housing additional railcar passenger spaces and employment growth along per day, led to more than 50 Metrorail corridors has given rise to additional Metrorail boardings and balanced flows. Also, the extensive alightings per day. pedestrian and landscaping improvements made to station areas For a streamlined equation, the model have encouraged many passengers to had fairly good predictive powers, walk-and-ride. explaining over three-quarters of the variation in Metrorail boardings and Conclusions exits across the seven Arlington County stations between 1985 and 2002. A considerable body of research shows Clearly, a fairly robust and well- that under the right conditions, TODs functioning relationship exists between can increase transit ridership and its building activities, service levels, and associated environmental benefits. This

156 is partly a product of self-selection: of stations in the San Francisco Bay those with a lifestyle preference for Area and Arlington County lends further transit-oriented living move into TOD support to past studies. For the Bay neighborhoods and act on their Area, transit commute shares increase preference. Higher transit ridership is with density, land-use diversity, and also a product of the compact, mixed- pedestrian-oriented design of use, and walking-friendly attributes of neighborhoods around rail stops. many TODs. From a public policy Significant interaction effects were perspective, evidence on TOD’s found between residential density and ridership bonus gives credence to city block size. In Arlington County, programs, like sliding-scale impact fees, office-retail development was the most that reward dense, mixed-use projects, powerful predictor of ridership at seven and flexible parking standards that Metrorail stations. Housing construction reflect the below-average automobile interacted with transit service levels to ownership rates among TOD residents. give ridership a further boost.

Research shows that those living in Given the preponderance of evidence, TODs usually patronize transit five to six the ridership benefits of TOD are times as often as the typical resident of a unassailable. Society at-large reaps the region. There is some evidence that size dividends of people traveling in efficient and connectivity of a rail system has and sustainable modes like public transit. some bearing on the ridership impacts of Whether private interests similarly TOD. The highest recorded rail capture benefit from TOD, as reflected by real- rates are found in the Washington (D.C.) estate market conditions, is the topic of Metropolitan Area, which could be the next chapter. because Metrorail has the most extensive network of any recent-generation rail system in America, providing good Notes accessibility to many parts of the region. Transit capture rates of those working 1 R. Cervero, Ridership Impacts of Transit- and shopping in TODs tended to be Focused Development in California, lower than those of residents partly Monograph 45 (Berkeley: Institute of Urban because self-selection is not as prevalent. and Regional Development, University of Still, capture rates can be appreciable for California, 1993). non-residents of TODs, as high as nearly 2 R. Cervero, “Walk-and-Ride: Factors 50% in the case of those working in Influencing Pedestrian Access to Transit,” offices near central-city stations. Joint Journal of Public Transportation, Vol. 3, No. 4 (2001): 1–23. development projects sometimes can boost transit’s modal shares even higher, 3 R. Cervero, The Transit Metropolis: A Global mostly likely because of conducive Inquiry (Washington, D.C.: Island Press, 1998). design factors like good pedestrian connectivity between rail stations and 4 J. Hunt, R. Johnston, J. Abraham, C. Rodier, adjoining buildings. G. Garry, S. Putman, and T. de la Barra, “Comparisons from Sacramento Model Test Bed,” Transportation Research Record: Research conducted using recent data on Journal of the Transportation Research transit usage and land-use characteristics Board, No. 1780 (2001): 53–63.

157 5 R. Cervero, “Transit-Based Housing in Record: Journal of the Transportation California: Evidence on Ridership Impacts,” Research Board, No. 1780 (2001): 92. Transport Policy, Vol. 1, No. 3 (1994A): 22 R. Cervero, “Land Uses and Travel at 174–183. Suburban Activity Centers,” Transportation 6 JHK and Associates, Development-Related Quarterly, Vol. 45 (1991): 479–491. Survey I (Washington, D.C.: Washington 23 R. Cervero, “Mixed Land-Uses and Metropolitan Area Transit Authority, 1987); Commuting: Evidence from the American JHK and Associates, Development-Related Housing Survey,” Transportation Research Survey II (Washington, D.C.: Washington A, Vol. 30, No. 5 (1996): 361–377. Metropolitan Area Transit Authority, 1989). 24 R. Cervero, “Built Environments and Mode 7 Arlington County Department of Community Choice: Toward a Normative Framework,” Planning, Housing and Development, Transportation Research D, Vol. 7 (2002): Arlington County Profile 2003 (March 2003). 265–284. Elasticities gauge the percent 8 Gerston & Associates, Transit-Based change in the probability of rail commuting Housing (San Jose, Santa Clara County given a 1% increase in the land-use diversity Transportation Agency and the Santa Clara index. Valley Manufacturing Group, 1995). 25 Gerston Associates, 1995, op. cit.; 9 C. Switzer, The Center Commons Transit G. Richards, “Housing, High-Tech Offices Oriented Development: A Case Study, Spring Up Along New Light-Rail Line,” unpublished student report prepared for MURP San Jose Mercury News, December 15, degree (Portland, Oregon: Master of Urban 1999, p. B1. and Regional Planning Program (MURP), 26 Portland State University, Fall 2002). Cervero, 1994A, op. cit. 27 10 JHK and Associates, 1987, op. cit. R. Cervero and M. Duncan, Residential Self- Selection and Rail Commuting: A Nested 11 JHK and Associates, 1989, op. cit. Logit Analysis, Working Paper 604, 12 J. Martin, MTS Joint Development Site Transit (Berkeley: University of California Surveys (San Diego: San Diego Association of Transportation Center, 2002). Governments, September 1996). 28 J. Holtzclaw, H. Dittmar, D. Goldstein, P. 13 R. Cervero, “Rail-Oriented Office Haas, “Location Efficiency: Neighborhood Development in California: How Successful?” and Socio-Economic Characteristics Transportation Quarterly, Vol. 48, No. 1 Determine Auto Ownership and Use-Studies (1994B): 33–44. in Chicago, Los Angeles, and San Francisco,” Transportation Planning and 14 JHK and Associates, 1989, op. cit. Technology, Vol. 25, (2002): 1–27. 15 N. Bragado, “Transit Joint Development in 29 L. Keefer, A Review of Nine UMTA-Assisted San Diego: Policies and Practices,” Joint Development Projects (Washington, Transportation Research Record: Journal of D.C.: U.S. Department of Transportation, the Transportation Research Board, No. 1669 Urban Mass Transportation Administration, (1999): 22–29. 1983). 16 Cervero, 1993, op. cit. 30 S. Cooke, “Joint Development,” Urban Land, 17 JHK and Associates, 1987, op. cit. Vol. 43, No. 7 (1984): 16–20. 18 Cervero, 1993, op. cit. 31 R. Cervero, “Rail Transit and Joint Development: Land Market Impacts in 19 Ibid. Washington, D.C. and Atlanta,” Journal of 20 Cervero, 1994A, op. cit., p. 181. the American Planning Association, Vol. 60, No. 1 (1994C): 83–94. 21 R. Ewing and R. Cervero, “Travel and the Built Environment: A Synthesis (with 32 R. Cervero, P. Hall, and J. Landis, Transit Discussion),” Transportation Research Joint Development in the United States,

158 Monograph 42 (Berkeley: University of Versus Automobile-Oriented Neighborhoods,” California, Institute of Urban and Regional Transport Policy, Vol. 3, No. 3 (1996): Development, 1992). 127–141. 33 H. Lund, R. Cervero, and R. Willson, Travel 39 In this scenario, mean values are used for all Characteristics of Transit-Focused other variables in the regression equation in Development in California (Oakland, Table 8.2 as follows: parking supply = 350 California: Bay Area Rapid Transit District spaces, mean household income = $76,000, and California Department of Transportation, highway accessibility = 895,200, transit 2004). accessibility = 88,900, and mean vehicles = 34 Other rail stops exist in the city of San per household 1.6. Francisco, including streetcar, cable car, and 40 Isochronic measures of accessibility were light-rail MUNI stops; however, these were estimated by accumulating census-tract job omitted because they are unrepresentative of totals within 30-minute centroid-to-centroid rail stops for the region as a whole. Many of travel distance ranges using peak-period these stops consist of on-street medians network travel times obtained from the MTC, served by trains operating in mixed traffic. the regional planning organization for the Also, Amtrak and Capitol Corridor Express nine-county San Francisco-Oakland-San Jose trains serve the Bay Area, operating on Consolidated Metropolitan Area. mixed-freight corridors; however, station 41 data were also omitted for these intercity Arlington County Department of Community services because they were not considered Planning, Housing and Development, to be representative of transit operating Development in the Metro Corridors— conditions for the region as a whole. 2000 (July 2002). 35 U.S. Census Bureau, 2000 Census 42 Ibid. Transportation Planning Package, San 43 Mean gasoline prices, for instance, were Francisco-Oakland-San Jose Metropolitan obtained from the Metropolitan Washington Statistical Area (Washington, D.C.: 2001). Council of Governments’s gasoline-price 36 For review of the “3 Ds” principle, see database, which is used to estimate long- R. Cervero and K. Kockelman, “Travel range regional transportation models. Demand and the 3D’s: Density, Diversity, 44 For a summary of empirical evidence on and Design,” Transportation Research D, transit service elasticities, see M. Wachs, Vol. 2, No. 3 (1997): 119–129; and Cervero, “Consumer Attitudes Towards Urban Transit 2002, op. cit. Services: An Integrated Review,” Journal of 37 Proportions of Year 2000 commutes made by the American Institute of Planners, Vol. 42, residents residing within a 1-mile radius of No. 1 (1976): 90–102. stations are for trips made by motorized 45 For further discussions on two-stage least nodes only (i.e., exclusive of walking, squares estimation, see R. Pindyck and bicycling, and work-at-home options). D. Rubinfeld, Econometric Models and 38 Cervero, 1996, op. cit.; R. Cervero and Economic Forecasts (New York: C. Radisch, “Travel Choices in Pedestrian McGraw-Hill, 1997).

159 Chapter 9

Real-Estate Market Impacts of TOD

TOD and Real-Estate Markets retail space today rent for $40 per square foot, some 40% above market rates. If transit investments create benefits, Even higher premiums have been real-estate markets tell us. As long as recorded for office and retail space near there is a finite supply of parcels around Washington Metrorail stations in stations, those wanting to live, work, or Arlington, Virginia, and Bethesda, do business near transit will bid up land Maryland.3 Rising land values have prices. The benefits of being well occurred not only in rail-served edge connected to the rest of the region cities but also transitional inner-city (i.e., being accessible) get capitalized neighborhoods. In the District of into the market value of land. As the Columbia, land prices near the U Street cliché goes, rail-served properties enjoy and 14th Street Metrorail Station, in a good “location, location, location”: predominantly minority neighborhood residents can more easily reach jobs and known for its jazz clubs and night-time shops; more potential shoppers pass by entertainment, have nearly doubled in retail outlets; and for employers, the the past 3 years. laborshed of workers is enlarged. For some, stress reduction is perhaps also The idea that transit confers benefits part of the attraction of being near transit. to local real-estate markets is hardly A developer of transit-based housing in new. After all, some of the toniest St. Louis remarked: “The MetroLink neighborhoods developed at the turn of station adds value to the project as part of the 20th century—Shaker Heights in the ‘no hassle’ lifestyle we are selling.”1 Cleveland, Chestnut Hill in Boston, Roland Park in Baltimore, and Because the benefit conferred by being Riverside near Chicago—were served near transit is improved accessibility, by streetcar lines. While the fortunes of looking at the land-value premiums is a neighborhoods skirted by rail corridors good way to gauge the benefits of TOD. suffered during the ascendancy of While research findings are varied, most automobiles and freeways during the of the evidence suggests that being near middle and latter parts of the century, in transit enhances property values and the 21st century, the tables once again rents. At the Orenco Station in Hillsboro, appear to be turning. In Dallas, San Jose, Oregon, absorption of housing averaged Portland, Northern Virginia, Northeast eight units per month in 2001, and prices New Jersey, and other rail-served were running 20% to 30% above the settings, residential properties within an area’s average, according to brokers with easy walk of light-rail stops are once Costa Pacific Homes, one of Orenco’s again hot commodities. Many are fully homebuilders.2 Near the Mockingbird leased and quite a few command top- light-rail station in Dallas, office and dollar rents.

161 Evidence on Market Performance Francisco Bay Area found that heavy- rail systems conferred the highest Most studies on the land-value benefits capitalization benefits to single-family of transit have evaluated the influence of housing because of faster speeds, more proximity to or distance from stations, frequent services, and wider spatial not whether a parcel of land is in a TOD. coverage than light-rail and commuter- Research findings on the effects of rail systems.5 The study found that for proximity to transit on land values are every meter closer a single-family home not very consistent in part because was to a BART station, its sales price impacts vary depending on severity of increased by $2.29, all else being equal. traffic congestion, local real-estate Alameda County homes several blocks market conditions, swings in business from BART stations sold, on average, cycles, and other factors. Some of these for 39% more than otherwise issues are addressed further in this comparable ones 20 miles from the chapter. nearest station. In the case of light-rail systems, however, capitalization benefits Below, empirical evidence on the land- (i.e., value-added) were far smaller, and, value and market-performance impacts in some instances, single-family homes of transit systems is reviewed, first within 900 feet of a station actually sold for residential housing and then for for less because of transit’s “nuisance commercial properties. Relatively little effect.” A study of Atlanta’s MARTA research has been conducted on the system suggested impacts also varied land-value impacts of transit on other by type of neighborhood: transit uses, like industrial activities; however, accessibility increased home prices in this should not be a concern since such Atlanta’s lower-income census tracts uses are not particularly prominent but decreased values in upper-income in TODs. areas.6

Residential Properties It is not hard to find conflicting signals on transit’s residential property impacts. Most, although not all, studies of A study of Portland’s MAX light-rail transit’s impacts on residential properties system found positive land-value effects have recorded premiums or net benefits. only within a 500-meter walking Studies over the past two decades show distance of stations.7 A different study average housing value premiums of both light-rail-served Portland and associated with being near a station heavy-rail-served San Francisco Bay 1 (usually expressed as being within ⁄4 Area suburbs found residential property 1 to ⁄2 mile of a station) are 6.4% in values were lower within a few blocks of Philadelphia, 6.7% in Boston, 10.6% in rail stops than five or six blocks away.8 Portland, 17% in San Diego, 20% in A study of single-family sales prices Chicago, 24% in Dallas, and 45% in found no disamenity effect when homes Santa Clara County.4 were within 300 meters of BART stations.9 The same study, however, The type of transit technology has some found a huge effect for commuter-rail bearing on land-value premiums. A services: in 1990, homes within study of experiences in the San 300 meters of the Caltrain stations

162 sold at an average discount of $51,000. It to the fact that, at the time, BART was seems plausible that whereas disamenity too new for meaningful accessibility effects exist from being “too close” to benefits to have accrued, along with the rail transit in suburban settings, in fairly fact that few zoning changes had been dense, mixed-use environments (with introduced. A study in Washington, Manhattan as an extreme), ambient noise D.C., found evidence of benefits to levels are so high and streets are so busy commercial properties in anticipation that there are no perceived nuisances of heavy-rail services: property values from living within a block or so of a rail fell by 7% for every 10% increase in stop. The alignment also comes into play: distance from a Metrorail station, up to because of noise levels, elevated a radius of 2,500 feet.14 No follow-up structures depress residential values the work was conducted to see if value most, whereas the effects of below- gains held over time, although ground systems are often negligible. numerous subsequent case studies suggest that Metrorail has materially Commercial Properties benefited nearby commercial properties.15 Two studies of MARTA Evidence on land-value benefits exists heavy-rail service reached opposite for office and commercial-retail parcels conclusions on impacts to commercial near heavy-rail systems in the properties. One found that offices within Washington (D.C.) Metropolitan Area, 1 mile of highway interchanges the San Francisco Bay Area, and greater commanded office rent premiums; Atlanta.10 Comparable or even larger however, those within a mile of premiums have been found for MARTA stations typically leased for commercial properties near light-rail less than comparable space farther stations in Santa Clara County, away.16 Another concluded that California, and suburban Dallas.11 Even commercial properties were “influenced bus malls, experience shows, confer positively by both access to rail stations substantial benefits on commercial and policies that encourage more properties. Office rents along Denver’s intensive development around those downtown transit mall, for example, stations.”17 were 8% to 16% higher than comparable space off the mall in late 2002. Sixty- Although theory suggests light-rail percent premiums were found for retail systems confer smaller benefits to shops on the mall relative to the typical commercial properties, some researchers downtown retail outlets.12 have reported otherwise. A study of the DART system compared differences in Most evidence on commercial property land values of “comparable” retail and comes from heavy-rail systems, and, as office properties near and not near light- in the case of residential properties, it is rail stations.18 The average percent not altogether consistent. An early study change in land values from 1994 to 1998 of BART found no evidence that rail’s for retail and office properties near presence increased commercial property DART stops was 37% and 14%, rents around a suburban station and two respectively; for “control” parcels, the inner-city stops.13 The absence of average changes were 7.1% and 3.7%, appreciable gains could have been due respectively. For retail uses, this study

163 suggested a value-added premium of use projects in walking-friendly settings 30%. Anecdotally, the authors noted that served intensively by transit produce North Park, the only regional mall healthy real-estate results. served by DART, generally outperformed other malls in the A study of experiences in the San Metroplex area, remaining 100% Francisco Bay Area in the mid-1990s occupied during the 1994-to-1998 period found that multifamily units within while rents increased 20%. A follow-up TODs commanded higher rents than study found office properties increased otherwise comparable projects not in value 53% faster than control sites within TODs. Besides being near transit, from 1997 to 2001; however, no these multifamily projects also had fairly premiums were recorded for retail high densities (over 50 units per net properties over this period.19 acre) and featured convenience retail shops and various pedestrian amenities, Several California studies of light rail’s thus taking on the attributes of a impacts on commercial properties have compact, mixed-use TOD. In 1994, rents been more rigorous in their research for one-bedroom units near the Pleasant designs; however, findings were Hill BART station were $1.20 per square generally inconclusive. A study of Santa foot compared with an average of $1.09 Clara County’s light-rail system found for similar projects (in terms of size, age, 1 that properties within ⁄2 mile of stations and amenities) that were in the same commanded premiums, although those geographic submarket but away from 1 1 that were ⁄4 to ⁄2 mile away were worth BART. Two-bedroom units near the even more.20 Compared with other Pleasant Hill Station leased for $1.09 per properties in the county, the estimated square foot compared with $0.94 per 1 monthly lease premium within ⁄4 mile of square foot for comparable units away a station was 3.3 cents per square foot, from BART. On average, rents for 1 1 and for properties ⁄4 to ⁄2 mile away, it one- and two-bedroom units in TOD was 6.4 cents per square foot. Sales apartments in the East Bay were 10% to premiums of $8.73 and $4.87 per square 15% higher than non-TOD units in the foot, respectively, were found, though same municipality that were otherwise models of sales values had poorer comparable. statistical fits. At Dallas’s Mockingbird Station, TOD TODs and Land-Value Premiums residential rents were going for $1.60 per square foot per month in mid-2003; The studies cited above looked at the other comparable nearby properties not effect of proximity to transit stations on served by transit were getting $1.30, or land values and rents as opposed to the 20% less. In Englewood, Colorado, affects of TOD per se. Few studies have apartments rented at CityCenter—a looked specifically at differences in rents transit-oriented village with civic uses, a and land values between projects that are cultural and performance center, and in TODs and those that are not. Studies retail—are more than twice as expensive that have looked at differences have as comparable units elsewhere in the often used matched-pair comparisons. In city. CityCenter’s Class A office space is general, experiences show that mixed- also leasing at a premium: gross annual

164 lease rates of $21 to $25 per square foot in property values and overall real-estate in mid-2002 compared with $13.50 to market performance. $17 per square foot for Class A space elsewhere in the city.21 Joint Development and Land-Value Premiums Moreover, CityCenter’s office occupancy rate is close to 100%, compared to 90% What about the joint development for the Denver metropolitan area. The projects? Do projects physically linked project’s retail sector is also out- to transit stations, like air-rights towers performing its competitors: annual rents or passageway connections, out-perform for stores averaged $18 to $20 per other markets? A comprehensive study square foot in 2002 versus $8 to $14 per of transit joint development projects in square foot for the city of Englewood. the Washington (D.C.) Metropolitan About 90% of CityCenter’s retail space Area and Atlanta suggested that they was leased and occupied in mid-2002 do.22 The study of five rail stations in compared with a citywide average of Washington, D.C., and Atlanta over the 80%. Another good example of TOD’s 1978-to-1989 period found jointly added value in the Denver region is developed projects were better 16 Market Square in Denver’s central performers: in addition to average rent business district (CBD). The project premiums of 7% to 9%, physically lies next to the Market Street Station, integrated projects tended to enjoy lower Denver’s “100% transit location,” vacancy rates and faster absorption of where all of the city’s downtown-bound new leasable space. On average, joint bus lines converge. In late 2002, 16 development projects added more than Market Square—with ground-floor $3 per gross square foot to annual office retail and five stories of renovated rents over the 1978-to-1989 period. office space—enjoyed a 60% premium Moreover, Atlanta’s and Washington’s over comparable downtown office joint development projects, the study space. Also, its commercial space was found, were generally “better” projects 100% leased; no other commercial (i.e., they were architecturally integrated, building in downtown Denver can they enjoyed better on-site circulation lay such a claim. [of both people and automobiles], and they made more efficient use of space What these experiences tell us is that through resource-sharing such as shared while proximity to good-quality transit is parking). In addition, the research an important trait of TOD, this is not the showed that average office rents of only factor that adds value. When transit joint development projects rose combined with higher-than-typical with increases in systemwide ridership. densities, consumer retail and services, Other matched-pair studies of joint and pedestrian amenities, proximity to development in the Washington (D.C.) transit can confer land-value benefits Metropolitan Area have reported that are well above those of competitive comparable rent premiums of up markets. TOD’s synergy of proximity, to 10%.23 density, mixed uses, and walking- friendliness, under the right conditions, A matched-pair comparison between gets expressed through geometric gains projects near rail stations and freeway

165 interchanges further substantiated these located within reach of its stations.”27 research findings.24 Office projects in Statistically, homes within 300 meters (a 1 Atlanta’s and Washington’s TODs little less than ⁄5 mile) of a light-rail showed modest rent premiums over station sold for $31,424 (in 1990 their freeway-oriented counterparts. currency) less than homes more than 300 Premiums were attributed, in part, to meters away, all else being equal. rail-served neighborhoods being more pedestrian-friendly and having more net The Landis study from the early 1990s leasable space (due mainly to lower stands in marked contrast to several parking requirements). Whether adjacent recent studies that have recorded commercial properties are physically positive and appreciable premiums integrated with rail stations, such as associated with being near light rail in through air-rights development or direct both the city of San Jose and Santa passageway connections, was also found Clara County as a whole.28 A study by to have a bearing on market Robert Cervero and Michael Duncan performance. Evidence likewise shows examined relationships in 1999, when that renovation of stations improves the Santa Clara County’s economy was on market performance of retail both within a roll, using land-sales data from the and close to stations. A recent study of county assessor’s office to study the older neighborhoods and business effects of proximity on single-family districts in the Northeast found rail- homes, rental properties, and station rehabilitation was positively condominiums. Hedonic price models, associated with increases in retail rents based on multiple regression estimation, and surrounding commercial property were used to net out the effects of values, with benefits increasing with proximity to transit from other factors city size and urban densities.25 that influence land values.29 This study found that in 1999 substantial benefits The Importance of Business Cycles, accrued to residential parcels within 1 System Maturation, and Timing a ⁄4-mile distance of a rail station, whether it was light rail or commuter More studies on the link between rail (see Figure 9.1). Large apartments 1 proximity to transit and land values have that were within a ⁄4-mile distance been carried out in the San Francisco of light-rail stops, for example, Bay Area than anywhere else. A study commanded a premium of around $9 led by John Landis of Bay Area real- per square foot. Compared with parcels estate market conditions in the early that were within 4 miles of a light-rail 1990s found that for every meter that a station, this translated into an overall BART-served Alameda County home land-value premium of 28%. was closer to a BART station, its 1991 sales price rose by $2.39, all else being What explains the huge difference in equal.26 However, no premium was recorded land-value impacts between found in the city of San Jose, and, in 1991 and 1999? There are four likely fact, the study suggested that there was a reasons: condition of the regional disbenefit associated with being near economy; levels of traffic congestion; light rail: “Transit in San Jose actually system maturation and extensiveness; and takes away value from homes that are institutional commitments to TOD. The

166 30 (103 %) $25. 40 25

20

15 (28%) 10 $9 .20 (24%) (17%) 5 $4 .10 $4 .16

0 Additional Land Value/Sq. Ft. ($, 1999) < 1/4 mile of < 1/4 mile of < 1/4 mile LRT < 1/4 mile LRT Caltrain & Business Caltrain District (BD) COMMERCIAL PARCELS RESIDENTIAL PARCELS

Figure 9.1. Commercial and Residential Land-Value Premiums in Santa Clara County, 1999. Sources: R. Cervero and M. Duncan, “Benefits of Proximity to Rail on Housing Markets: Experiences in Santa Clara County,” Journal of Public Transportation, Vol. 5, No. 1 (2002): 1–18; and R. Cervero and M. Duncan, “Transit’s Value Added,” Urban Land, Vol. 61, No. 2 (2002): 77–84. point on the business cycle when land- in the minds of Bay Area residents. In value impacts are measured probably has 1999, in fact, the Bay Area was ranked as a lot to do with how much of a premium the nation’s second most congested is recorded, if any. In 1990, the year for region by the Texas Transportation which the Landis study measured no Institute, and Santa Clara County was the impact, the Bay Area was in the trough of most congested of the region’s nine a deep recession; therefore, little value counties.30 Under these conditions, being was associated with being near transit. In near transit was a bonus. fact, so many people were out of work that traffic congestion had almost While the macro-economy might have disappeared (one of the few benefits of been an overriding factor influencing economic downturns). By the late 1990s, the degree to which land-value when Cervero and Duncan gauged premiums existed, another plausible impacts, the Bay Area’s economy and explanation is system maturation. In real-estate market were red hot on the 1991, Santa Clara County’s light-rail heels of the dot-com boom. Traffic system was in its infancy, providing congestion was as bad as ever, revealed service over 21 track miles; by the late by public opinion polls that identified 1990s, it was firmly entrenched in the gridlock as the number-one local problem local transportation scene, covering

167 nearly 30 track miles and offering more Exorbitant housing prices at the time— frequent services. Ten years into in 2000, the median single-family home service, the light-rail system was in the Silicon Valley cost $617,000, an beginning to take on more of the 87% jump from 5 years earlier—created characteristics of a network as opposed a ready-made market for small, more to a single line. It must be remembered affordable units near light-rail stops.31 that transit has to compete with the Among the instruments successfully private automobile, which operates on introduced by local governments to extensive hierarchical networks of local leverage TOD were tax-exempt roads, collectors, highways, and financing, public assistance with land freeways. Such networks provide high assembly, and overlay zones that levels of connectivity, or accessibility. permitted higher densities than the And, of course, it is enhanced norm. accessibility that drives up property values around rail stations. Only when Of course, the various prerequisites to transit begins to mimic the network land-value premiums reviewed in this attributes of its chief competitor, the section are co-related—traffic congestion automobile-highway system, will spurred more rail services and TOD accessibility improvements be institutional support. In 1991, the year in significant enough to register through which Landis measured impacts, these real-estate transactions. This was not conditions did not exist. The degree to the case in 1991 when the Landis study which TOD yields benefits, it would was conducted, but it was far more the appear, has a lot to do with timing and case in 1999 when the Cervero and at what point along the business cycle Duncan study looked at conditions. studies are carried out. Moreover, benefits are also not automatic. They Another explanation could be better require proactive measures on the part of institutional support. In the early 1990s, local governments to create TODs that VTA had no in-house program aimed at allow the value-added opportunities of promoting TOD and joint development. rail investments to be more completely By the late 1990s, the agency was very fulfilled. active in both areas, having hired a full- time staff member who worked closely Leveraging Transit’s Added Value with developers, industry, and public Through Proactive Planning: agencies in building a coalition to The San Diego Experience advance TOD. These efforts paid off, for few areas of the United States This last point (i.e., the importance of matched the amount of development proactive government support for TOD that took place around light-rail transit toward reaping land-value benefits) is during the boom years of the late 1990s underscored by experiences in San in Santa Clara County. Between 1997 Diego. When it opened in 1981, the and 1999, some 4,500 housing units and 16-mile San Diego Trolley system— 9 million square feet of commercial- with service from downtown San Diego office floor space were added within to the Mexican border at Tijuana—was a walking distance of the only recently huge ridership success. Within 2 years of opened 8-mile Tasman West corridor. its opening, trains were so full that the

168 system was recovering 95% of its thinking of the region’s transit decision- operating costs, an unprecedented makers. Rather than trying to minimize achievement in the U.S. light-rail transit cost, the mindset became one of industry. (Map 9.1 shows San Diego’s maximizing development potential. As existing and planned rail transit discussed in Chapter 19, this was part of network.) a larger smart-growth agenda that sought to put the region on a more sustainable In terms of land-use changes and TOD, pathway. The Mission Valley light-rail however, the “Tijuana Trolley” (i.e., the line became the region’s model for southern Blue Line [or South Line] on transit-oriented growth. The line crosses Map 9.1) has hardly been a success. No the San Diego River three times in order notable developments have occurred to site development on the flat valley along the Southern Blue Line over the floor and preserve the sensitive past two decades, nor should have they hillsides that define the valley. Helping been expected. For this first leg of the to lead the way was the city of San Trolley system, funded solely with local Diego’s progressive TOD ordinance monies, the overriding objective was that incentivizes compact, infill right-of-way and construction cost development near Trolley stops (see minimization. The South Line operates Chapter 4). These efforts paid off. on disused freight track that abuts Between 1982 (when the Trolley sagebrush and an odd mix of extension was first proposed) and warehouses, factories, a military 1995, the Mission Valley saw the complex, and various automobile- addition of 7,000 new housing units, oriented uses. Moreover, the South 2,375 new hotel rooms, 1.6 million County area was not “where the action square feet of retail space, and some was.” Employment has barely increased 6 million square feet of office in this part of San Diego County since inventory.33 Since 1995, these figures 1980. Accordingly, transit was not have trended steadily upward. poised to induce appreciable land-use changes. Experiences show that transit The impact of this “about-face” in policy investments do not create new regional is clearly reflected by differences in growth but rather redistribute growth land-value impacts. A hedonic price that would have occurred regardless.32 model was estimated for each of San Diego’s transit lines using real-estate Later extensions north of downtown, sales transaction data from Metroscan, a notably along the Mission Valley proprietary database available from First corridor, were an entirely different story American Real Estate Solutions. For (see Photo 9.1). North County was abuzz commercial properties (including offices, with real-estate construction when the retail, restaurants, and hotels), data were Mission Valley rail extension and acquired for calendar years 1999, 2000, Coaster commuter-rail line broke ground and 2001. Models were also estimated in the mid-1990s. Thus, unlike with the for residential parcels based on Tijuana Trolley, transit was poised to Metroscan data from the year 2000. channel land-use changes in these two Combining sales transaction data with areas. The Mission Valley extension, information on site (e.g., building size moreover, represented a change in the and quality), transportation (e.g., highway

169 Map 9.1. San Diego Rail Systems: Existing and Planned Light-Rail “Trolley” Extensions (Blue and Orange Lines) and Coaster Commuter-Rail Line. Source: San Diego Metropolitan Transit Development Board.

170 Photo 9.1. Contrasting Land-Use Outcomes Along San Diego’s Trolley Corridor. The top photo shows an inhospitable setting for land-use changes along the former freight corridor where the South Line operates between downtown San Diego and the Mexican border. The bottom photo shows the substantial amount of moderately dense housing recently built along the Mission Valley light-rail corridor, due in part to proactive planning by the city of San Diego.

171 travel times), and neighborhood establishments, restaurants, and other characteristics of each parcel, hedonic commercial facilities near Mission Valley price models enabled the added or Trolley stops and the downtown Coaster discounted value from being near transit station enjoyed huge premiums, in the stops, to be netted out.34 30%-to-40% range. Both settings have benefited from proactive TOD planning, Figure 9.2 shows the recorded land-value including targeted public infrastructure premiums or discounts for commercial improvements (e.g., sidewalk upgrades properties broken down by rail line, and public landscaping), overlay zones to including the Coaster commuter-rail encourage mixed uses, and streamlining service that connects downtown San of building reviews. In contrast, there Diego to the northern part of the county. was a disbenefit, or land-value discount, Premiums represent percentage associated with parcels near Trolley stops differences attributable to being near on the South Line. Where the commercial transit for “typical” commercial real-estate market was strong and 1 properties within ⁄2 mile of a Trolley or proactive planning took place, premiums Coaster stop, holding all other factors were appreciable. Where the market was constant. “Typical” means the average soft and little effort was made to promote characteristics of commercial property TOD, premiums were nonexistent, and in the database (e.g., the average some discounts occurred. commercial structure was an office building of 6,600 square feet in size in a For the housing sector, premiums were neighborhood with seven workers per recorded for multifamily units and acre. Figure 9.2 reveals that offices, retail condominiums across all Trolley lines.

-3.9% Trolley: South (Blue) Line

-0.5% Trolley: East (Orange) Line

Trolley: North Line 30.4%

1.9% Trolley: Downtown

-4.2% Coaster: Non-Downtown

Coaster: Downtown 38.5%

–10% – 5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Figure 9.2. Commercial Land-Value Premiums or Discounts in San Diego County, by Rail Line. Source: R. Cervero and M. Duncan, Land Value Impacts of Rail Transit Services in San Diego County, report prepared for the National Association of Realtors and the Urban Land Institute (Washington, D.C.: June 2002).

172 Differences were minimal. In the case of difficult to separate out the importance the Coaster commuter-rail line, however, of being close to transit stops from premiums were huge for condominiums public-policy incentives, like zoning (46.1%) and single-family homes (17%). bonuses, in explaining land-value Apparently, owning a condominium or increases. In many instances, they are detached home within an easy walk of likely to be codependent: zoning commuter rail is highly valued among incentives are necessary if proximity the many professional workers with to transit is to yield dividends, and downtown jobs who live in the North proximity to transit is necessary if County. Given that Interstate-5 north of density bonuses and other zoning downtown San Diego is the region’s “perks” are to pay off. most congested freeway, many home- owners appear willing to pay a Notwithstanding the statistical premium—$85,000 for the typical challenges, several studies have sought condominium—to be within easy to gauge the importance of public access of a Coaster station. policies and strategic planning in leveraging the accessibility benefits Experiences from San Diego County conferred by transit investments. Using reveal that rail transit is capable of data from Washington County, Oregon, producing appreciable land-value (served by Portland’s Westside light-rail benefits, although this is not automatic line), research found that announcements and relationships vary by type of land on the planned siting of light-rail stations use and corridor. Subregional market and the use of zoning tools (e.g., characteristics have a bearing on overlays and interim restrictions) to outcomes. In the buoyant North County promote TOD induced land-value area, for-sale residential units reap large increases even before the system began premiums, and in the healthy Mission operating.35 A study of TOD planning in Valley corridor and newly refurbished Atlanta also found that policies aimed waterfront of downtown, commercial at encouraging more intensive markets seem to flourish in transit’s development around stations, including presence. In the soft real-estate market parking waivers and minimum FAR of the South County along the Tijuana requirements, interacted with proximity Trolley corridor, the opposite holds true. to stations to yield rent premiums.36

Transit’s Added Value and Perhaps the most important public- Public Policies policy implication of transit’s potential to add value is in the financial arena. Some of the land-value premiums The existence of land-value premiums associated with being near transit could provides a potential source of revenue be due to supportive public policies that for transit agencies to tap into to help are targeted at TODs. At The Commons, defray capital costs. Value capture in Denver, planned use development makes sense in theory, but it is often (PUD) zoning was a factor in the master- difficult to implement in practice. Since developer’s ability to sell portions of the the public sector invests taxpayer monies property to individual developers at a in rail systems, recapturing some of the premium. In a statistical sense, it is value-added, one can argue, is equitable

173 from a societal point of view. Why let end up in the general treasury and rarely a fortunate group of landowners who get channeled back into transit projects, happen to own property where stations much less TODs. Only through tax are sited reap huge windfalls, especially income dedicated to transit agencies are when money is so desperately needed to tax receipts from land-value gains a bona retire capital bonds for expensive rail fide form of value capture. systems? Besides being equitable, public co-participation in land-value gains can A more direct means of recapturing also reduce the kind of land speculation value is through joint development, such that can drive real-estate prices so high as air-rights leasing, ground leasing of that housing becomes unaffordable, an adjacent agency-owned parcels, or outcome that subverts the purpose of station connection fees. Hong Kong’s many TODs. rail system covers all of its costs, including interest, from rents produced Recapturing value is particularly by land developments around stations important to jump-starting TODs. This and fare receipts. To date, U.S. transit is especially true in distressed inner-city properties have been far more timid in settings where a lot of upfront recapturing value, although a few are improvements and amenities are often beginning to move aggressively in this needed to entice private investment. direction. The responsibility often falls on cash- strapped municipalities to take the lead Presently, WMATA, serving the nation’s in attracting private capital to rail station capital and the surrounding area, areas by “sprucing up” the neighborhood “recaptures” around $6 million annually through generous landscaping and in value-added through various lease and sidewalk improvements and, in riskier interface fee arrangements, a number settings, underwriting land-acquisition that is expected to grow markedly in costs. All of this takes money, often lots coming years as very large joint of it. Thus, value capture provides a development projects, like White Flint, source of funds not only to help pay off take form. At Chicago’s Union Station, the debt on transit investments but also value capture occurs through rent to cover the cost of upfront ancillary surcharges (see Photo 9.2). Chicago’s improvements that can help jump-start RTA receives as much as 24% of gross a TOD. sales receipts when sales volumes reach certain thresholds. This rent is in In America, value capture occurs addition to common-area charges that indirectly through higher property-tax cover maintenance expenses. receipts. However, these are largely transfer effects since gains in values of One of the most direct means of properties near rail stops (due to relative recapturing value is through benefit improvements in accessibility) are, assessments. Los Angeles’s MTA theoretically at least, offset by losses obtained 9% of the funds used to pay in property values for sites farther for the $1.5-billion Red Line subway away (due to relative decreases in through special assessments levied accessibility). Even if there are net gains against owners of commercial properties in property value income, these monies in and around subway stations. MTA’s

174 Photo 9.2. Chicago’s Union Station. The top photo shows the exterior of the refurbished historic train station. The bottom photo shows an active restaurant and retail activities within the structure.

benefit-assessment program, scheduled is more difficult. Convincing property- to sunset in 2008, was made possible owners that transit adds value to their through statutory legislation that granted land-holdings is further made difficult the agency special access to beneficiary by the fact that empirical evidence is forms of financing. In most cases, a inconsistent, even in Los Angeles. benefit-assessment district can only be A recent study used hedonic-price formed if the majority of property- modeling, similar to what was discussed owners within the district agree to levy above for Santa Clara County and San themselves to fund the improvement. Diego, to net out the effects of proximity While land-owners are often willing to to rail lines (heavy rail, light rail, and do this to pay for improvements, like commuter rail) as well as BRT sidewalks, that directly abut their (MetroRapid) services in Los Angeles properties, getting them to agree to chip County.37 Appreciable land-value in to help finance rail systems or TODs premiums (6.1%) were found around

175 Red Line subway stations for partnership with Trammell Crow, is multifamily housing units; however, hoping to recoup its cost and then some land-value discounts, or disbenefits, by developing a 120-acre mixed-use were measured around Red Line stations TOD at the Cascade Station. The for commercial-office properties and Pasadena Construction Authority, condominiums. Premiums were found franchised to build the recently opened for these uses along some, but not all, Gold Line to Pasadena, hopes to Metrolink commuter-rail, light-rail, and recapture around $30 million of the even BRT stops. A confounding factor capital cost of this extension by that might have depressed land values developing excess property obtained for commercial parcels near some Red during right-of-way acquisition. Line stations is that many of these stations lie in redevelopment districts. Summary and Conclusion Being in a distressed inner-city setting could have suppressed real-estate values The weight of evidence to date shows near some subway stations, regardless of that development near transit stops transit’s presence. Nonetheless, the lack enjoys land-value premiums and of a consistent pattern of land-value generally out-performs competitive premiums makes it difficult to markets. This generally holds for implement benefit-assessment financing residential housing (especially in practice. The rational nexus doctrine condominiums and rental units) as well that courts apply in weighing whether as office, retail, and other commercial benefits have been conferred by public facilities. However, the payoffs are not infrastructure sets a high standard that automatic, and quite often a number of transit investments cannot always meet. preconditions must be in place. One precondition is an upswing in the Lastly, value capture can also occur economy, with plentiful demand for real through land acquisition and banking estate. Another is that traffic congestion aimed at securing profits through long- is getting worse. Only then will there be term leases or even fee-simple sales (i.e., market pressures to bid up land prices real-estate development on the part of and a clear benefit to having good rail the transit-service provider). This is how access: it provides an alternative to the first generation of U.S. streetcar lines fighting highway traffic. Also important from a century ago were built and are public policies, such as zoning continues today to be how the majority bonuses, which further leverage the of suburban rail lines in large Japanese TOD and system expansion that cities are funded.38 The reduction in produces the spillover benefits of a federal contributions to new rail starts highly integrated network. Moreover, (from 80% to 50%) and increased if significant premiums are to accrue, competition for the shrinking pot have it is important that transit be in a prompted more and more localities to neighborhood free from signs of think in entrepreneurial terms. In stagnation or distress that has a contributing some $28 million toward reasonably healthy real-estate market. the $125-million price tag for the light- In San Diego, premiums were recorded rail extension to Portland’s International for commercial properties in the Mission Airport, Bechtel Enterprises, in Valley corridor, an area that has

176 generally enjoyed sustained growth over More and more, developers are using the past decade. Pro-development long-term pro forma when evaluating the policies introduced by local governments, potential payoff of TOD. Like any long- like overlay zoning to encourage mixed term investment, asset management is land uses and targeted infrastructure essential to reaping handsome profits. investments, bolstered commercial For this, the public sector needs to do property values in the Mission Valley its part to ensure that transit-served corridor. This stands in marked contrast neighborhoods are, and will continue to to the South Line where little effort has be, viable places. Through effective been made to leverage TOD, in large partnerships with transit agencies, local part because of stagnant growth, and, government, and others—and under the predictably, no meaningful land-use right conditions—all parties are in a changes have occurred. position to reap the financial gains conferred by well-planned and well- Insights into the property value impacts managed TOD. of TODs carry policy significance. For one, public entities are in a position to recapture some of the value added Notes through benefit assessments, land acquisitions and re-sales, and 1 P. Downs, “Magnetic MetroLink,” ground/air-rights leases. Some areas, Stlcommercemagazine, online newsletter such as the Washington (D.C.) (February 2001). http://www. stlcommercemagazine.com. Metropolitan Area, Los Angeles, and Portland, have been particularly 2 Urban Land Institute, Development Around aggressive in recapturing some of the Transit: Enhancing Real Estate, Increasing Ridership, and Improving Communities, draft value created by transit investments; manuscript (forthcoming). however, legal and institutional concerns 3 continue to impede progress in this area. R. Cervero, “Rail Transit and Joint Development: Land Market Impacts in Washington, D.C. and Atlanta,” Journal of Because TODs take time to evolve, the American Planning Association, Vol. 60, experiences suggest that land-value No. 1 (1994): 83–94. benefits take time to accrue as well. This 4 T. Parker, G. Arrington, M. McKeever, and was underscored by experiences in Santa J. Smith-Heimer, Statewide Transit-Oriented Clara County, where in the transit Development Study: Factors for Success in system’s infancy, no measurable land- California (Sacramento: California value premiums were found, but by the Department of Transportation, 2002); system’s 10th anniversary, when the R. Armstrong, “Impacts of Commuter Rail Service as Reflected in Single-Family real-estate market had revved up, Residential Property Values,” Transportation benefits were appreciable. Savvy Research Record, No. 1466 (1994): 88–98; developers increasingly understand the M. Al-Mosaind, K. Dueker, and J. Strathman, long-term nature of profiting from TOD. “Light-Rail Transit Stations and Property In the words of one active TOD Values: A Hedonic Price Approach,” developer in the Denver region: “we’re Transportation Research Record, No. 1400 (1993): 90–94; R. Cervero and M. Duncan, not here to ‘flip’ properties in the search “Benefits of Proximity to Rail on Housing for quick profits; with TOD and infill in Markets: Experiences in Santa Clara general, we’re in it for the long haul.” County,” Journal of Public Transportation,

177 Vol. 5, No. 1 (2002A): 1–18; R. Cervero and Taxable Property Valuations and Transit- M. Duncan, Land Value Impacts of Rail Oriented Development (Denton, Texas: Transit Services in San Diego County, report University of North Texas, Center for prepared for the National Association of Economic Development and Research, Realtors and the Urban Land Institute January 2003). (Washington, D.C.: June 2002B); A. Gruen, 12 Fredrick Ross Company, View: Commercial The Effect of CTA and Metra Stations on Real Estate Quarterly, Vol. 8, No. 1 Residential Property Values: Transit Stations (January 2003). Influence Residential Property Values, Chicago, report to the Regional 13 C. Falcke, Study of BART’s Effects on Transportation Authority (June 1997); Property Prices and Rents, BART Impact B. Weinstein and T. Clower, The Initial Study (Washington, D.C.: Urban Mass Economic Impacts of the DART LRT System Transportation Administration, U.S. (Denton, Texas: University of North Texas, Department of Transportation, 1978). Center for Economic Development and 14 Damm et al., 1980, op. cit. Research, 1999). 15 R. Dunphy, “Transit-Oriented Development: 5 J. Landis, S. Guathakurta, and M. Zhang, Making a Difference?” Urban Land, Vol. 54, Capitalization of Transportation Investments No. 7 (1995): 32–36, 48; M. Bernick and into Single-Family Home Prices, Working R. Cervero, Transit Villages in the 21st Paper 619 (Berkeley: Institute of Urban and Century (New York: McGraw-Hill, 1996); Regional Development, University of A. McNeal and R. Doggett, “Metro Makes California, 1994). Its Mark,” Urban Land, Vol. 58, No. 9 6 A. Nelson, “Effects of Elevated Heavy-Rail (1999): 78–81, 118. Transit Stations on House Prices with 16 Bollinger et al., 1998, op. cit. Respect to Neighborhood Income,” Transportation Research Record, No. 1359 17 A. Nelson, “Transit Stations and Commercial (1992): 127–132. Property Values: A Case Study with Policy and Land-Use Implications,” Journal of Public 7 Al-Moisand et al., 1993, op. cit. Transportation, Vol. 2, No. 3 (1999): 77–93. 8 S. Lewis-Workman and D. Brod, “Measuring 18 Weinstein and Clower, 1999, op. cit. the Neighborhood Benefits of Rail Transit Accessibility,” Transportation Research 19 Weinstein, 2003, op. cit. Record, No. 1576 (1997): 147–153. 20 R. Weinberger, “Commercial Property 9 Landis et al., 1994, op. cit. Values and Proximity to Light Rail: Calculating Benefits with a Hedonic Price 10 D. Damm, S. Lerman, E. Lerner-Lam, and Model” (paper presented at the 79th Annual J. Young, “Response of Urban Real Estate Meeting of the Transportation Research Values in Anticipation of the Washington Board, Washington, D.C, 2000). Metro,” Journal of Transport Economics and Policy, Vol. 14, No. 3 (1980): 20–30; R. 21 C. Lockwood, “Raising the Bar,” Urban Cervero and J. Landis, “Assessing Impacts of Land, Vol. 62, No. 2 (2003): 70–77. Urban Rail Transit on Local Real Estate 22 Cervero, 1994, op. cit. Markets Using Quasi-Experimental Comparisons,” Transportation Research A, 23 S. Cook, “Joint Development,” Urban Land, Vol. 27, No 1 (1993): 13–22; C. Bollinger, Vol. 43, No. 7 (1984): 16–20. K. Ihlanfeldt, and D. Bowes, “Spatial 24 Cervero and Landis, 1993, op. cit. Variation in Office Rents Within the Atlanta Region,” Urban Studies, Vol. 35, No. 7 25 The Great American Station Foundation, (1998): 1097–1117. Economic Impact of Station Revitalization, (Las Vegas, New Mexico: 2001). 11 Cervero and Duncan, 2002A, op. cit.; Weinstein and Clower, 1999, op. cit.; 26 J. Landis, S. Guathakurta, W. Huang, and B. Weinstein, DART Light Rail’s Effect on M. Zhang, Rail Transit Investments, Real

178 Estate Values, and Land Use Change: A 31 Association of Bay Area Governments, Comparative Analysis of Five California Rail Silicon Valley Projections 2000 (Oakland, Systems, Monograph 48 (Berkeley, Institute California: 2001). of Urban and Regional Development, 32 Cambridge Systematics, Inc., R. Cervero, and University of California, 1995). D. Aschauer, TCRP Report 35: Economic 27 Ibid., p. 40. Impact Analysis of Transit Investments: Guidebook for Practitioners (Washington, 28 R. Weinberger, “Light Rail Proximity: D.C.: Transportation Research Board, Benefit or Detriment in the Case of Santa National Research Council, 1998). Clara County, California?” Transportation Research Record: Journal of the 33 W. Lorenz, Designing Light Rail Transit Transportation Research Board, No. 1747 Compatible with Urban Form (San Diego: (2001): 104–113; Cervero and Duncan, San Diego Metropolitan Transit Development 2002A, op. cit. Board, 1996). 34 29 Hedonic price theory assumes that many For more information about these analyses, goods are actually a combination of see Cervero and Duncan, 2002B, op. cit. different attributes and that the overall 35 G. Knaap, C. Ding, and L. Hopkins, “Do transaction price can thus be decomposed Plans Matter? The Effects of Light Rail Plans into the component (or “hedonic”) prices of on Land Values in Station Areas,” Journal of each attribute. For more on this technique, Planning Education and Research, Vol. 21 see: S. Rosen, “Hedonic Prices and Implicit (2001): 32–39. Markets: Product Differentiation in Pure 36 Competition,” Journal of Political Nelson, 1999, op. cit. Economics, Vol. 82 (1974): 34–55, and 37 R. Cervero and M. Duncan, Land Value T. Batrik, “Measuring the Benefits of Impacts of Rail Transit Services in Los Amenity Improvements on Hedonic Angeles County, report prepared for the Models,” Land Economics, Vol. 64, National Association of Realtors and the No. 2 (1988): 172–183. Urban Land Institute (Washington, D.C.: June 2002C). 30 T. Lomax and D. Shrank, 2000 Urban Mobility Report (College Station, Texas: 38 R. Cervero, The Transit Metropolis: A Global Texas Transportation Institute, Texas Inquiry (Washington, D.C.: Island Press, A&M University, 2000). 1998).

179 PART 4

CASE STUDIES

Case studies are to policy research what microscopes are to science. In this report, they help “zoom in” on many of the important issues, providing a more focused, grounded context. This penultimate section of the report presents 10 case studies that, in combination, offer a rich set of perspectives on the challenges and potential payoffs of implementing TOD. Cases are presented in approximate geographical sequence, from the northeast and to the southwest of the country, in the following order: Boston, New Jersey, the Washington (D.C.) Metropolitan Area, Miami, Chicago, Dallas, Colorado, Portland, the San Francisco Bay Area, and Southern California. Chapter 10

TOD in Boston: An Old Story with a New Emphasis

Boston is an ideal transit story, with a suburbs “not cool anymore,” they also long, rich tradition of transit-shaped “don’t work” very well. Boston, on development and a healthy present-day the other hand, wins kudos for its economy that is receptive to TOD. multifaceted economy of financial National comparisons show that the city services, health care, technology, and of Boston ranked third in transit’s education, which “cycle independently.” market share for commuting at 33%, While tourism continues to be hard hit slightly behind Washington, D.C. And since 9/11, and no massive recovery is unlike Washington, which has witnessed expected for the office market, barriers a gradual loss of population, Boston’s to entry of new products protect population grew by over 3% between investors, and apartment rents, while 1990 and 2000. In addition, many of softening a bit, continue to sizzle. Boston’s suburbs, such as Brookline, Somerville, Cambridge, Chelsea, and Boston Recovers Its Traditional Malden, experience significant transit Neighborhood Roots usage. This is a city that has grown up around public transportation, so TOD is Boston, as one of the oldest cities in the not considered something particularly United States, has a traditional layout novel, but rather business as usual. that was developed along TOD principles long before the term entered the In recent years, greater Boston has mainstream planning lexicon. When this enjoyed a robust economy. type of development fell out of favor in PricewaterhouseCoopers, in the report the 1950s and 1960s among planners, Emerging Trends in Real Estate: 2003, politicians, and the private sector, Boston ranked Boston sixth in terms of entered, like all U.S. cities, the full investment and seventh for development, throttle race to build more highways. buoyed by a 24-hour vibrancy and a During the same time period, the city diversified economy.1 The investment jumped on board the same kind of community has turned bearish on fast- “scorched-earth” urban renewal policies growing sprawling suburbs, worried that were in vogue elsewhere. In the about traffic, lack of planning, banal interest of creating a modern commercial strips, and premature aging government-center area, smaller-scale of housing stock. Suburban real-estate traditional buildings were cleared and investments, the report warns, are properties assembled to create monolithic subject to “becoming little more than buildings isolated in a vast space that commodity investments over time.” were subject to New England winds and There is a growing appreciation for the devoid of street life after work. Old- need to “create enduring main streets timers still remember with a certain and real places.” Not only are many amount of resentment how entire swaths

183 of traditional Boston neighborhoods were eliminated in the rush to modernize. Boston’s TOD story is about the way the city has tried to take back its old neighborhood character without sacrificing modernity and mobility.

Boston’s pursuit of its traditional character holds important lessons for other cities. By being responsive to its core constituencies and not fearing to go it alone in terms of transportation and planning, Boston has been able to recover its urbanity and vitality. For Boston, out-of-the-box thinking about transit and its relation to the city has helped the city recover from a decline; Boston now fetches some of the highest Photo 10.1. Boylston Street West housing and commercial rents in the of Copley Square. Boston’s human- United States. Boston’s TOD story oriented traditional streetscape has been demonstrates that it is not too late to rediscovered, leading to a sizzling real- recover from ill-conceived choices, estate market that now draws some of particularly if public leaders can muster the highest rents in the country. the courage and support necessary to embark on their own path to highways inside Route 128, Governor transportation and development. Frank Sargent repudiated his own past as Boston’s TOD resuscitation began when a highway advocate and spearheaded public officials recognized that their federal legislation that allowed the use constituents fervently wanted them to of Interstate highway funds for transit. save the traditional neighborhood feel of Massachusetts became the first state to Boston (see Photo 10.1). Those seeking allow use of federal highway funds to return their neighborhoods to the for mass transit improvements and qualities of yesteryear formed a acquisitions. This period, beginning in powerful bloc of the Boston electorate, the early 1970s under Governor Sargent although their perspectives were and continuing under the Dukakis and politically diverse. The TOD renaissance Weld administrations, resulted in Boston in Boston is inextricably linked to having a modern, efficient, and heavily conservative, aesthetic, and patronized network of subway and environmentalist impulses. commuter trains. Transfer funds were used to help extend the Red Line to Boston’s leaders understood that the only Braintree in 1980 and to Alewife in 1985 way to revitalize old neighborhoods was and to reconstruct the Orange Line in to modernize and upgrade public transit. 1987 (see Map 10.1).2 The very first step taken was to halt the state’s pro-highway transportation plan. The bold step of modernizing mass After establishing a moratorium on new transit with federal highway money gave

184 Map 10.1. MBTA Subway Map. Source: MBTA.

Boston the modern infrastructure Text Box 10.1). Finally, new MBTA necessary for neighborhood TOD-based stations in Boston were built without revitalization. parking, which promoted TOD by putting pedestrian accessibility above A second crucial decision for Boston’s automobile convenience.4 current TOD was Governor Dukakis’s revitalization of the Massachusetts Bay These public policies had the cumulative Transportation Authority (MBTA) effect of producing a more cohesive services. Commuter-rail lines were urban design. The policies adopted reopened, existing lines within Boston 20 to 30 years ago must also be given were extended and renovated, and credit, at least partially, for Boston’s new rolling stock was acquired (see phenomenal residential real-estate Map 10.2).3 market. Boston’s leaders recognized that the private sector would only build A third factor in TOD’s resurgence was along TOD principles if modern, clean, the negotiated parking agreement with and efficient transport were available. the U.S. Environmental Protection Financial constraints imposed by Agency (EPA) that froze the number of lenders meant that the public sector allocated spaces in Boston at 1973 levels had to take the risks necessary for the (approximately 35,500 spaces). This city to rejuvenate. After it was clear prevented excess parking from being that public officials were committed built in Boston’s urban core (see to a modern transit infrastructure,

185 Map 10.2. MBTA Commuter-Rail Map. Source: MBTA. the private sector enthusiastically an intertwining of business, retail, and embraced TOD. residential buildings at high densities; and close access to public transportation. Boston’s TOD Toolbox Thus, instead of pursuing grand TOD schemes, Boston’s planners use small, Boston does not so much plan for TOD subtle tools to make sure the system as it does find ways to maintain its continues to function in a transit- traditional urban fabric, a fabric that has oriented manner. been transit oriented from the beginning, having been built for the most part Today, Boston-style TOD is a proven around trolley and streetcar lines. commodity that developers and Almost all of Boston proper is within financiers are eager to deliver, and 1 ⁄4 mile of one or more transit stations. importantly for the city, an idea that Bostonians are used to this and expect does not have to be sweetened with lots the city to maintain this status quo. of public money to convince developers and banks to deliver. Boston’s modus Since the traditional neighborhood operandi is generally to encourage TOD appeals to the entire Boston political through zoning and other types of spectrum, it has been in Boston’s regulations and then sit back and let the political leaders’ interest to both sustain market deliver the product.5 In addition, and expand it. These neighborhoods are since Boston’s core is highly accessible characterized by a pedestrian orientation; by transit, and most of the downtown’s

186 EPA Parking Freeze

The 1972 Clean Air Act had a profound and lasting effect on Boston’s recent development. In the early 1970s, city leaders negotiated two agreements with the EPA to mitigate air pollution in the Boston area. This resulted in the formation of the Boston Air Pollution Control Commission, which was put in charge of implementing the agreement. The most noteworthy part of the agreement was that Boston was allowed to freeze its parking requirements at 1973 levels plus 10%. This cap is strictly enforced and includes all general public parking in Boston proper. It allows the Boston Air Pollution Control Commission to grant exemptions in only two cases: for private off- street parking based on need (e.g., residential, hotel guest, and employee) and residential parking, if the developers can demonstrate that the general public will be excluded from these spaces. Between 1977 and 1997, the total number of parking spaces grew by only 9%, from approximately 51,000 to 59,100 spaces.6 The cost of parking in Boston as compared with other American cities reflects the impact. Boston, at an average of $408 per month for parking, has the second most expensive parking in the nation (the most expensive is midtown New York). (The U.S. average is $147 per month.) The freeze has at times been politically unpopular, and developers often complain publicly, but in private they concede that they enjoy the higher profitability of not having to include parking in their projects. The parking freeze is next to impossible to lift because of a legal requirement imposed by the EPA that requires the city to offset the environmental impact of eliminating the freeze. No one in Boston, as yet, has found a politically palatable alternative to the freeze.

The popularity of parking caps is the result of its beneficial results. Besides improving air quality, it has produced an unexpected benefit: increased development activity. By making parking optional, developers are able to lower the cost of urban projects and thus more easily obtain financing. The parking freeze has also allowed the city to grow without disrupting the urban fabric with more automobiles, parking garages, and surface lots. Today, the city’s narrow pedestrian-oriented streets are teeming with life.

After Boston enacted the parking freeze in 1973, Portland, Oregon, and Los Angeles sought to follow suit. However, Congress stepped in and passed legislation forbidding the EPA from reaching parking freeze agreements with cities. Without the option of reaching agreements with the EPA, the ball bounced back into the cities’ courts. From the congressional action forward, cities have had to affirmatively vote to adopt parking freezes, which a number of close-in cities around Boston did, most notably Cambridge.

Former Massachusetts Transportation Secretary Fred Salvucci asserts that no public policy has had such a dramatic effect on Boston’s development as the parking freeze of 1973.7 The parking freeze allowed Boston to shift its focus to mass transit. The freeze has also helped Boston to become one of the largest metropolitan areas that is in compliance with federal clean air standards. As importantly, the freeze contributed to Boston’s human-scale ambience, producing handsome profits for developers in the process.

Text Box 10.1 real-estate market is red-hot, most Senior Planner with the Boston development occurring in central Redevelopment Agency, the city Boston is both transit oriented and requires projects of 50,000 square feet lucrative, eliminating the need for and or more to prepare transportation subsidies. While Boston’s legacy of mitigation plans as a precondition to TOD is in no danger today, it was once approval.9 The city has encouraged large threatened by new highways planned for developments to make use of existing the city. Boston was saved by forward- transit facilities and, if possible, to help looking state and city officials who with renovating or redesigning stations recognized that their transit systems to better align entrances to the could not survive in a system where the development. Other mitigation measures federal government almost exclusively used to gain approvals include funded roads. A plan was devised to subsidizing employees’ MBTA passes, siphon funds from Massachusetts’s making provisions for shuttle buses to federal highway funds and use them outlying transit stations, and provision of instead for transit improvements. storage facilities for bicycles.10 Moreover, unique among cities, Boston focused its transit dollars on Boston’s The Longwood Medical Area is an core rather than on suburban commuter example where Boston mitigations were lines. Boston was thus able to maintain required. The Longwood Area’s high-quality transit services and a institutions, which include Harvard semblance of a dense urban grid. Medical School and other major teaching hospitals, coordinate the The city of Boston and in particular the provision of shuttle bus and other multi- city’s redevelopment authority, has over modal options in the Longwood Area, the years sought to strengthen transit’s which is slightly isolated from presence by using regulations, surrounding mass transit services. As a incentives, and other tools. For example, result, very few workers today drive to the city placed a cap on downtown the Longwood Medical Area.11 parking; requires active ground-floor uses; promotes pedestrian-friendly A commonly used non-regulatory tool in streetscapes; and with large projects, Boston has been focusing economic requires contributions for infrastructure development dollars on and adding improvements. The city also encourages police officers to areas around transit a jobs/housing balance around transit stations that are perceived to be under- stations, which helps to maintain long- serviced and dangerous. For some areas, term economic health in all areas of the this has prodded developers to build and city and ensure extensive use of transit rehabilitate residential buildings around services both day and night.8 stations.

Of the tools the city of Boston possesses, The final piece of Boston’s TOD toolbox one of the most commonly used has is tax foreclosure. Boston consolidates been Article 80 of the city’s zoning and markets foreclosed properties code, which concerns the review and aggressively to promote TOD. Since tax approval of new developments. As part foreclosure is the main source of land of Article 80, according to John Dalzell, that comes to the city, it offers the best

188 chance for promoting TOD in utilized multifamily housing can be more underdeveloped communities. Generally, fully occupied. foreclosed properties are abandoned or, if active, need improvements and safety Finally, the discussion thus far has been repairs. Depending on the state of a on tools used to promote TOD. However, building, the city performs the necessary Boston is also seeking to expand its work, including safety repairs, transit system, even in bad economic environmental remediation, or times, to ensure the city has the demolition of the building. Although the infrastructure necessary to handle a city is required to seek payment of back growing city population. Boston has taxes and fees, which can include the focused its future transportation plans cost of any improvements, usually a on linking the “spokes” of the city’s developer who purchases a property subway system that radiate from ends up with a subsidized parcel.12 downtown to make commuting faster and more efficient for its residents. As Two other areas where the market needs part of this plan, the most significant help with city subsidies are affordable near-term new transportation investment housing and elderly housing. Affordable in Boston is the opening of four new housing is usually done on a small scale stations on what will be called the in conjunction with neighborhood Fairmont Line. These stations are to be community development corporations built along an existing commuter line (CDCs). An example is Phase II of Back and will “unlock” southeastern Boston, of the Hill, just completed, which which has remained relatively isolated included 50 units of infill affordable because of its lack of a good connection home ownership and rental housing with the remainder of the city’s job and 1 13 15 within ⁄4 mile of the Green E Line. retail market. Since the area’s real The other problem area, elderly housing, estate is not as coveted as elsewhere in has become synonymous in Boston the city, the development around the with what is called “overhousing.” Fairmont Line transit stations will Overhousing is the result of an initially be subsidized. overabundance of multifamily buildings in a neighborhood that once contained MBTA, Joint Development, and TOD 8 to 10 people in a family, but now only houses 1 or 2 elderly residents. Often, the The conventional definitions of TOD elderly owners of these buildings do not and joint development do not fit easily in rent the extra rooms or floors for fear of Boston, since the concepts have largely problem tenants. As a result, elderly been conceived for the 20th-century Bostonians are increasingly isolated suburban city prevalent in most of the socially from the rest of the community, country. For Boston, TOD was once the and at the same time, their neighborhoods only type of development. It could be and transit stations suffer from the argued that almost the entire Boston core resulting de-densification.14 The city is is TOD in that most longstanding addressing the problem by building buildings and neighborhoods were built senior housing in these types of around old trolley and interurban lines. communities. Once seniors are able to Likewise, joint development as it is move into senior communities, under- commonly understood—the selling or

189 leasing of transit-agency land to a Frequently, the MBTA will allow developer in return for a stake in the developers to use MBTA property to development project—is not common enhance pedestrian connections (e.g., to in Boston, though much of the city’s a retail shop) while also advancing development is physically oriented to MBTA’s goal of increasing ridership. transit stations. Unlike similar arrangements in the station-connection program in While Boston owes much of its TOD Washington, D.C., there is no monetary pedigree to its age, history also explains exchange between the private and public why joint development has not occurred sectors. In Cambridge, the city and the very frequently. Old transit systems like MBTA negotiated with the developer of Boston’s never acquired much land CambridgeSide Galleria, an urban mall, around stations because they pre-dated to run shuttle buses every half hour from parking lots. the two “T” stops at Kendall Square and Lechmere Square located nearby. This does not mean the MBTA has Presently, nearly 50% of the shoppers simply stood by and watched over the at the CambridgeSide Galleria walk years, however. The agency has sought to or use transit. maximize its influence on development. One step it took was to contract with a Another example of Boston-style joint private real-estate service company to development was the tripartite agreement identify opportunity areas for joint among the MBTA, Massport, and the development. Since 1996, the 23 stations developer of the World Trade Center in where joint development could occur South Boston to construct a new have been identified, with 3 or 4 of them underground Silver Line BRT station at considered to be good possibilities.16 the World Trade Center complex. Each party brought something to the table that The MBTA has been most proactive in the other parties wanted. Massport owned forming equity partnerships (e.g., the the land, the developer owned the World agency leases or sells its land near a Trade Center buildings, and the MBTA station to a developer and takes an had the power to choose the location of equity interest in the development). In the station. The essence of the agreement Boston, this occurs on a smaller scale concerned the sharing of costs and than it does in the agreements typically responsibilities for the station among the found at younger transit agencies. For three parties. Massport provided the example, at the Ashmont Square Station, infrastructure, the developer bore the cost the MBTA entered into an agreement of construction, and the MBTA delivered with a developer to build 150 units of the rail service. Both Massport and the housing on agency land. Proceeds from developer were able to add value to their the development went toward investments by vastly increasing access to construction of a new parking structure the building, and the MBTA was able to with 5,000 spaces near the station.17 increase ridership while defraying a large portion of the cost of a new station.18 Most real-estate activity at MBTA stations is not joint development, but While the MBTA has been working on rather is property management. joint development independently, it has

190 also gotten a renewed commitment from Easy Transit Connections, the state of Massachusetts in the form Tough Development Sites of the Office of Commonwealth Development. Formed by the newly Most of Boston’s historic buildings are elected Governor, Milt Romney, the new located on or near one of MTBA’s four office is headed by Douglas Foy, a TOD subway lines. Early developers routinely advocate. As part of its work, the Office sought out sites served by transit. The of Commonwealth Development has historical blending of buildings and formed a TOD task force that includes public transportation means that transit is the Secretary of the Environment, the imprinted in the community’s DNA, as Secretaries of Transportation and represented by quaint transit-served Energy, and the MBTA’s real-estate venues like Fenway and the Boston Pops. planner. The charge of the task force is To Bostonians, transit is an inseparable to formulate ways to promote TOD in part of the urban landscape. Boston Massachusetts. The hope is that this developer Richard Reynolds, principal of unprecedented partnership will help Spaulding & Slye Colliers, volunteered, Massachusetts secure federal funding “We never have to think about it.” Pam for new rail starts.19 McKinney, principal of the development consulting firm, Byrne McKinney & The Boston Economy and the Associates, Inc., says that in Boston, Real-Estate Market “Transit is bred in the bone.” In the 1990s, Boston encouraged development The major players in the Boston around the North and South Station areas, economy tend to sort themselves out by major commuter-rail destinations with location. Financial-services, law, and good connections to the subway and accounting firms drive the downtown and buses. Table 10.1 lists some of the TOD Back Bay submarkets, whereas venture projects under construction or completed. capitalists and technology firms are Many are building rehabilitations and concentrated in Cambridge. The Route infill projects. Boston’s list of TODs 128 corridor, dubbed the “High-Tech will continue to expand as subway Corridor,” is also home to healthcare, modernization programs and station-area manufacturing, finance, retail, and enhancements like the North Station/Fleet general-business firms. The largest Center take form (see Text Box 10.2). technology presence in the area is in the more distant suburban I-495 markets, Boston’s historic neighborhoods and focused on the beltway corridor.20 While quaint buildings enjoy strong appeal, and it is diversified in terms of industry mix, rents remain high. One challenge has Boston’s economy remains volatile. The been how to serve the needs of a modern area has captured a large share of venture business or an upscale resident, capital funds in recent years, and it accustomed to vastly larger spaces and a continues to attract cutting-edge diversity of services, on a street grid and technology ventures, both of which are lot pattern more appropriate to a highly susceptible to market swings. craftsman than a mutual fund manager. By early 2003, a deteriorating market Copley Place and Prudential Center were for office space pushed vacancy rates to pioneering 1960s solutions that broke the over 17%. limits of small-scale properties but

191 Table 10.1. TOD Projects in Boston

Project Size (sq. ft.) Use(s) Status Back Bay Station 1,000,000 Luxury Condos, Hotel, Under construction Parking Garage, Retail Ruggles Station 300,000 Office Park Completed in 1995 World Trade Center 1,300,000+ Hotel, Office Towers Near completion Fan Pier 3,000,000 Hotel, Multifamily Fully Permitted Housing and Condos, Office, Museum, Parks Northpoint 5,000,000 Office, Extensive Planning stages Residential, Park Millenium Center-Ritz 1,400,000 Mixed Use Completed 2003 Carlton Alewife Brook 1,600,000 Office, Residential Completed in 1988

involved huge public outlays to assemble however, building renovation required the land needed for such large building removing part of the subway entrance. scales. Boston’s “Big Dig” will provide A mezzanine was built on the fourth numerous opportunities for large-lot floor, adding 5% more space to the then transit-supportive redevelopment in years 45,000 square feet within the building to come (see Text Box 10.3). footprint. The exterior of the building was restored to a 19th-century façade Revitalization: The Liberty Tree (see Photo 10.2).21 Building and the Combat Zone The Liberty Tree building’s superior Invoking the name of a revered icon location above the subway station, its of early Boston, the Liberty Tree architectural beauty, and a tight office building was erected in 1850 near a market in Boston offset the risk of being large elm tree that stood as a symbol of located in a less desirable part of the resistance to British rule during the city. The building’s renovation proved to Revolutionary War. The location was be the turning point for the Combat named the Combat Zone for the Zone. Governor Weld offered a state military personnel who had uniforms agency—the Registry of Motor Vehicles tailored there, but it later was notorious (RMV)—as a lead tenant for the as the center of Boston’s adult refurbished building. With street life entertainment district. By the early active from day workers and customers 1990s, the Liberty Tree building was patronizing spin-off businesses like delis vacant save for an adult bookstore; a and retail shops, other buildings were concerted drive to turn the soon targeted for renovation. Numerous neighborhood around drew private renovations and conversions took place interest in renovating the building. in the Combat Zone, including new office space, dormitories, retail space, Among the building’s assets is direct and the massive Millennium Place stairway access to the subway system; mixed-use project.

192 North Station/Fleet Center

By the early 1990s, Boston Garden, the long-time, venerable home of the Boston Celtics and Boston Bruins, had become a victim of the financial realities of modern sports, which require luxury boxes, club seating, and expensive restaurants. Several sites were considered for a new arena to replace the Garden, but Governor Michael Dukakis strongly opposed any site not at North Station, the property adjacent to the old Boston Garden. When the legislature took up the matter, it agreed with Governor Dukakis by eliminating all other sites from consideration. The fate of the new Fleet Center, as it eventually came to be called, as a TOD, was thus sealed. The 1973 parking freeze, the dense neighborhood surroundings, and the excellent transit connections made any other type of development impractical and unfeasible. Moreover, the MBTA had already made plans to modernize the Green Line, which ran through North Station, as well as to build intermodal connections to the Orange Line and commuter-rail lines, ensuring the Fleet Center's patrons would be well served by modern and efficient transportation. As a consequence, no new arena parking was constructed, which is almost unheard of in the modern age of sports arenas.

Fleet Center was successfully built adjacent to the old Boston Garden, but the transit development potential of the area around the Fleet Center and the new North Station is still in the process of being fulfilled. After tough negotiations, the air rights above North Station and adjacent to the Fleet Center were leased to the city; responsibility for the transit improvements on the land was given to the MBTA. Recently, the contract for the construction of the new Green Line tunnel connection and demolition of the old Causeway Street Station was awarded, symbolizing the final step in infrastructure improvements for the city’s North Station plans.

North Station/Fleet Center. The photo on the left shows the west side as seen from the outbound platform of the Green Line at North Station; the photo on the right shows the west entrance to North Station/Fleet Center. Lack of parking has not hindered the Fleet Center complex because of its dense pedestrian-oriented access points and superior transit location.

Text Box 10.2

193 North Station/Fleet Center

The Only Entrance to the Elevated Green Line at North Station (Left Photo). East Entrance to the North Station/Fleet Center (Right Photo).

A station-area plan for North Station/Fleet Center is nearing completion. Transit improvements and completion of the Big Dig will make the North Station TOD neighborhood the gateway for the northern approach to the Rose Kennedy Greenway development (being constructed over the Central Artery Tunnel). Although it was an arduous task to negotiate the title of the land between the city and state and involved extremely complex engineering and design to accommodate the new Fleet Center and modernized transit lines, the effort appears to have paid off. Real-estate insiders and local and state officials cite North Station as Boston’s one “can’t-miss” future TOD.26

Text Box 10.2 (Continued)

Rejuvenation: Back Office Space with a project with the goal of retaining Front Office Location tenants being lost to newer Class A buildings. The first anchor tenant for East-coast cities are filled with aging the newly refurbished building was buildings plagued with safety and Fidelity Investments, one of Boston’s environmental problems. The State Street thriving mutual fund companies, which Bank Building, in the heart of Boston’s had been looking for back office space financial district, is one of these buildings in the suburbs. The building’s quality (see Photo 10.3). Built in the 1960s, its refurbishment, central location, and exterior design no longer in vogue, and good transit access gave it an edge over years of deferred maintenance becoming its suburban competitors.22 increasingly evident, the building was about to slip into the less valuable Class The State Street building’s ability to B status. Moreover, the discovery of retain and attract tenants at Class A asbestos increased the cost of bringing the rents and maintain high occupancy building back to its original status. levels gave renovation a much needed boost in downtown Boston. Ease of Undeterred, the building’s owners transit access gave it a great advantage began a $98-million rehabilitation over newer suburban rivals dealing with

194

The Big Dig: New Land for TOD

Set for completion in 2005, the placement of Boston’s Central Artery underground ranks as the largest, most expensive highway project in U.S. history. The project has been key to the redevelopment of the South Boston Waterfront as well as the reunification of the Financial District with the Downtown Waterfront. Because major rail corridors parallel the underground artery, once the Big Dig is completed, access between rail stops and major waterfront destinations will be materially enhanced.

When it was originally designed, the Central Artery was meant to handle only local traffic going in and out of Boston. An inner belt was to be built that would take automobiles around the city. Because the construction of the Central Artery displaced 20,000 residents and destroyed 1,000 residential and commercial buildings, strong community opposition led to the abandonment of the inner beltway project. As a result, the Central Artery has been handling both local and through traffic for over 40 years, producing an accident rate four times the national average.

The tunneling of the Central Artery will provide Boston with more than 30 acres of new open space, parks, and commercial development. All of this bodes favorably for a waterfront that is attractive to pedestrians and transit users.

Central Artery Construction Project (the “Big Dig”) Source: Massachusetts Turnpike Authority. Text Box 10.3

195 Photo 10.3. Renovated State Street Photo 10.2. Liberty Tree Building Bank Building. The refurbished with MBTA Stop. The Registry of building’s comeback typified the Motor Vehicles (RMV) is located at spectacular performance of the Boston street level. The RMV’s success in office market and real-estate market in breathing life back into the neighborhood general in the 1990s. led to the decision by the Commonwealth to locate the transportation building in Park Square downtown. Both were a Preservation’s Main Street Program. The part of the Commonwealth’s strategy Trust’s program organized the city into to pioneer locations of government 19 neighborhoods. The premise of the agencies to stabilize conditions for the program was that in order to receive private market. help, each neighborhood had to demonstrate that residents, merchants, and nonprofit institutions would work increased gridlock on Boston’s together. They also had to find a freeways. corporate “buddy” that would invest money and personnel in the program. Main Street and TOD The program made immediate inroads. It Another important force in Boston’s won the National Trust’s Great TOD renaissance has been its cadre of American Main Street Award. In four local nonprofit organizations that years, the program produced 313 new specialize in smaller neighborhood-scale businesses, 2,326 (net) new jobs, 46,500 development projects. These groups, Main Street volunteer hours, 120 however, rarely communicated or storefront improvements, and $40 coordinated activities. million in new commercial and residential construction (see Photo This changed when Boston became the 10.4).23 Before these improvements, first large U.S. city to enroll in the most of the participating neighborhoods National Trust for Historic were considered crime ridden and thus

196 Photo 10.4. Main Street in Roslindale Village Neighborhood. The Main Street program focuses on improved storefront façades and improved streetscapes to enhance pedestrian access. The results have been a boon for participating businesses located near transit stops. drew scant interest from the core and inner suburbs, the region also development community. has an extensive commuter-rail system that links Boston with far-flung suburbs. The Main Street Program has also Historically, there has been a disconnect become a key component of Boston’s between the two. While there has been comprehensive TOD strategy. Most of unbridled enthusiasm for TOD in the Boston Redevelopment Authority’s downtown Boston, support for TOD in TOD work centered on revitalizing retail the outer suburbs is lukewarm at best. centers in rail-served neighborhoods, a This has led to an interest in problem the Main Street Program has concentrating development at major been particularly effective in solving. commuter-rail transfer stations. South Often, lack of supermarkets and other Station is the most successful example major retail outlets are a primary of this effort to date. deterrent to reinvestment. The Main Street Program’s success at solving this Constructed in 1898 with large windows retail vacuum in many places has and a grand waiting room, South Station resulted in vibrant TOD neighborhoods faced the wrecking ball in 1974. The offering all the basic services, along with Commonwealth intervened under then some specialty retail, within a short newly elected Governor Dukakis and walking distance of transit stations. The halted demolition on the grounds of Main Street Program has also helped historical preservation. Boston maintain a housing/jobs balance that is considered a crucial part of its Federal funds were later secured to long-term TOD strategy.24 restore the beautiful building as an intermodal facility hosting subway, South Station: Development commuter, and regional trains as well as Around Commuter Rail Boston’s spoke system of buses. The $29-million renovation was completed in While much of Boston’s TOD story 1989, with the bus portion of the station involves its subway system in the urban completed in the mid-1990s. The

197 refurbished building was designed with a structural support to allow an office tower to be built when market demand permitted (see Photo 10.5).25

Today, South Station is poised to realize its full TOD potential. Two developments, Russia Wharf and 500 Atlantic Avenue, are planned for parcels near South Station. Russia Wharf will be a mixed-use project with hotel, residential, and office buildings totaling over 1 million square feet and a 512-space parking structure built underneath. 500 Atlantic Avenue will contain a 420-room hotel and a 141-unit condominium for a total of 729,200 square feet, with a 375-space underground parking garage. In the course of two decades, the once rundown area around South Station has transformed into a bustling center of activity.

South Station, according to Al Raine, an assistant in the state office of planning under Governor Dukakis explained, happened only when the city and the state took a long-term perspective. In his estimation, it was vital that the city established a clear framework of public investments and regulations with plans that provided specific timelines. The plan for South Station also clearly shaped the densities and edges of the spaces around the station. All this was necessary to create the transparency that both developers and the public needed to see the vision through to fruition.27 Photo 10.5. South Station Main South Boston Waterfront: Entrance and Future Rendering. The The Future Transit Neighborhood Neoclassical building (top photo) that houses the station and the proposed The 1,000 acres of the South Boston Atlantic Avenue development (bottom Waterfront (or Seaport District) offer the photo) behind the station serve as city of Boston a chance to create the first anchors for the burgeoning commercial new urban neighborhood oriented to and office district targeted for suburban transit in decades. The key to TOD in commuter traffic.

198 the Seaport District is the creation and none have been focused on transit utilization of MBTA’s Silver Line, an opportunities. The TOD plan will be the underground dedicated busway linking largest and most comprehensive South Boston Waterfront to Downtown redevelopment effort to date for the Boston’s South Station. The Silver Line waterfront. The aim is to create a lively, is greater Boston’s first BRT service. 24-hour, transit-oriented community (see Photo 10.6).29 The Seaport District was bustling with activity until the mid-1970s, when the The success of transforming the Seaport marine and navy industries either closed into a TOD depends on the organization or moved elsewhere. To make matters of transit in the neighborhood. For worse, the construction of the Central financial reasons, a decision was made to Artery formed a physical barrier between use BRT in place of extending the the Seaport and downtown Boston. The subway line to the South Boston isolation of the area contributed to Waterfront. The MBTA created the making the South Boston Waterfront a Silver Line, a dual-mode/dual-propulsion site of underutilized and underdeveloped system. It operates as an underground land. For most people, the South Boston electric bus around the Seaport, but Waterfront has been a forgotten place.28 becomes a low-emission bus traveling in bus-restricted lanes on city streets There have been redevelopment efforts (see Photos 10.7 and 10.8). Two in the Seaport District in the past, but underground stations—Courthouse

Photo 10.6. Aerial View of South Boston Waterfront. Opportunities for cities to start over again on such a large tract of land so close to the central core are rare indeed. Boston has ambitious plans to make the Seaport District the crown jewel of its TOD renaissance by making the District a high-density urban village and tourist attraction served by a multimodal transit system.

199 Photo 10.7. Views of the World Trade Center Silver Line Transit Stop.

Photo 10.8. Depiction of the Future World Trade Center Transit Stop as a High-Density, Pedestrian-Oriented Urban Village. and the World Trade Center—and two With the MBTA goal of having 2 minutes above-ground stations—D Street near between every Silver Line bus, the South the Fish Pier and the new convention Boston waterfront will be a 7-minute, center—are planned for the Seaport. one-seat ride from South Station in one Most development will be within an easy direction and from Logan Airport in the walk of these stations (see Map 10.3). other.30 The construction of a tunnel under the Fort Point Channel will connect the The Silver Line is unique among waterfront with South Station where Boston’s bus services. Real-time Amtrak, commuter trains, and the tracking of the buses using global subway can be accessed. Using the Ted positioning system technology has been Williams Tunnel, the Silver Line will introduced. The low-floor, 60-foot buses also connect the Seaport District to can accommodate up to 120 riders. Logan Airport. MBTA is forecasting that 60,000

200 1 Map 10.3. Walkable ⁄4-Mile Radii Surrounding Silver Line Transit Stations in the Seaport District. The line will connect the isolated Seaport District with multimodal South Station. Source: MASSPORT. passengers will use the Silver Line each minimal private automobile traffic, and workday. extensive pedestrian spillover to hotels, restaurants, and stores. One of the Silver The Seaport District is also slated for Line’s underground stops is at the high-density residential development. BCEC. Two sites are planned for over 1,100 owner-occupied units (see Photo 10.9). Boston’s commitment to making the More housing will be needed, however, Seaport District oriented to transit if the Seaport District is to become a true instead of adjacent to transit is evidenced 24/7 neighborhood. by the parking limits imposed on the area. Before it has even been fully The commercial and open spaces of the developed, the Seaport is already Seaport District are moving along at a characterized as having “parking ratios faster pace than residential space. The typical of those found in mature, transit- centerpiece of the District will be the intensive downtowns.”31 The Fan Pier Boston Convention & Exhibition Center site is offering only 2,280 off-street (BCEC), with 550,000 square feet of parking spaces, or 0.85 spaces per 1,000 contiguous exhibit space and an square feet of development. Such low adjoining hotel. The site covers 60 acres parking ratios ensure that automobiles and, if successful, will generate a high do not have priority over transit in the level of evening and weekend activity, Seaport. Not all TOD initiatives in

201 Photo 10.9. Residential Development Plans for the Fan Pier Section of the Seaport District.

Boston are nodal in form. Plans are rest on its TOD laurels. Public officials under way to create a transit corridor and private developers must work that orbits the central city. See Text Box together to bring a more contemporary, 10.4 on the planned Urban Ring of TOD. market-sensitive version of TOD to the city and its surrounding communities. Lessons Learned Backsliding is prevalent in America, and there is a strong motivation to do things Boston provides five important lessons that are easy rather than those that are for other jurisdictions’ TOD development right. In Boston’s case, this has meant goals. First, a strong market makes many that when the private sector cannot lead, things work. Boston is such a desirable public officials must provide leadership city for migrants and an attractive place on TOD to reassure lenders that their for business that planning for transit helps investments are secure. reinforce a generally favorable climate. It also gives planners some leverage over The third lesson Boston provides is that development that might not occur in less a significant part of leadership is helping desirable communities. Planning is to make projects work financially. In important, but a strong market can help Boston, this has involved creating the raise all boats in the harbor. zoning; making infrastructure improvements (most notably in public Second, strong public-sector leadership is transit); and providing predictability and needed to promote TOD, even in a strong transparency in the form of plans, market. The Boston case shows that even guidelines, and permissible uses and if a city was built around transit, and densities. Also, enticements are needed transit is ingrained in its culture, it cannot to show developers that the aging

202 The Urban Ring

If the Seaport District is the future of TOD in the city of Boston, then the Urban Ring is the TOD future of the surrounding communities. The Urban Ring is a circumferential corridor, 15 miles in length and 1 mile wide, that encircles Boston’s core, running through the cities of Boston, Chelsea, Everett, Somerville, Cambridge, and Brookline. Currently, passengers who want to travel between these communities must take the subway or bus into downtown Boston, switch transit lines, and head back out of the core in a different radial direction. The Urban Ring would eliminate this congestion by connecting the corridor communities via tangential BRT and light- rail routes. Riders would completely bypass the core of Boston. The ring would be the wheel to Boston’s already built transit spokes and hub.

Building a circular transit corridor is not a new concept. In 1884, London completed the first circular transit line, the Circle Line, while the remainder of its transit lines were built in the spoke-and-hub design. The idea of Boston’s Urban Ring was first proposed in the early 1970s as an alternative to the Inner Belt expressway. Funding for the project, however, was redirected at improving the existing transit system, and the idea was put on the backburner.

In the early 1990s, the Urban Ring concept was revived by David Lee, president of the Boston Society of Architects, and George Thrush, chairman of the Department of Architecture at Northeastern University. They emphasized the economic and community development activities that such a project would bring. In 1995, the leaders of the six cities impacted by the Urban Ring joined together to sign the Urban Ring Compact, which pledged their cooperation with the planning and development of the project.

In 2001, MBTA conducted a major investment study on the Urban Ring service, which advocated implementation and construction of the ring in three phases. Phase 1 is crosstown and express bus service; Phase 2 is adding BRT service, which will reach commuter-rail intermodal connections; and Phase 3 begins rail rapid transit service. The total project is expected to cost over $2 billion.

Construction of the ring would bring new TOD opportunities to the area, which is growing faster than the region as a whole. Stephanie Pollack of the Constitution Law Foundation contends, “The Urban Ring alone shifts more people from cars to transit than every other project in the long-range transportation plan added together.”

Text Box 10.4

203 The Urban Ring

Phase II of the Urban Ring Project. When it is completed, the Urban Ring will be the first circumferential transit corridor in the United States. Backers hope a ring of transit lines will spawn a ring of TODs that orbits central Boston. Source: MBTA.

Text Box 10.4 (Continued)

204 buildings or storefronts near transit stops 6 Boston Transportation Department, “Parking are potential diamonds in the rough in Boston,” in Access Boston 2000–2010 ready to be polished and redeveloped. (Boston: December 2001): 19–23. 7 Frederick Salvucci, interview by Eric A fourth lesson is that transit has proven Nakajima, June 10, 2003. to be a lynchpin in a more sustainable 8 John Dalzell, interview, June 11, 2003. form of urban regeneration. Boston and 9 John Dalzell, interview, June 11, 2003. state officials took the bold step of using 10 highway money for transit purposes. The John Dalzell, interview, June 11, 2003. vast improvements and expansion made 11 John Dalzell, interview, June 11, 2003. to Boston’s transit network in the 1970s 12 John Dalzell, interview, June 11, 2003. and 1980s fueled the city’s population 13 John Dalzell, interview by Robert Dunphy, resurgence in the 1990s. The 21% October 8, 2003. growth in transit ridership over the last 14 decade exceeded that of any other major John Dalzell, interview, June 11, 2003. transit market in the country. 15 John Dalzell, interview, June 11, 2003. 16 William Constable, interview by Robert Last, a city must solicit broad-based Dunphy, July 24, 2003. support before committing to a TOD 17 William Constable, interview by Robert future. Public outcry stopped the Inner Dunphy, July 24, 2003. Belt project, while strong community 18 Pamela McKinney, interview by Robert support and involvement has made the Dunphy, August 6, 2003. Main Street Program an overwhelming 19 success. Listening to the needs of the Pamela McKinney, interview by Robert Dunphy, August 6, 2003. community will be key to creating a vibrant 24/7 Seaport District “new town/ 20 S. Coyne, “Boston: A Market Overview,” in-town.” Urban Land, Vol. 60, No. 9 (2001): 52–59, 118–122. 21 J. Albanese and S. Martinelli, “Restoration Notes Renaissance: Preserving and Reusing Historic Buildings to Renew the Economic Life of Neighborhoods,” Urban Land, Vol. 1 PriceWaterhouseCoopers, “Emerging 57, No. 12 (2003): 74–79, 96. Trends in Real Estate: 2003” (New York, 2003): 39. 22 Urban Land Institute, Project Reference File (October-December 1995). 2 S. Warner, Greater Boston: Adapting Regional Traditions to the Present 23 A. Raine “Waterfront TOD,” Urban Land, (Philadelphia: University of Pennsylvania Vol. 62, No. 5 (2003): 79–83. Press, 2001): 156–160. 24 John Dalzell, interview, June 11, 2003. 3 Frederick Salvucci, interview by Eric 25 Al Raine, interview, June 13, 2003. Nakajima, June 10, 2003. 26 Al Raine, interview, June 13, 2003. 4 Frederick Salvucci, interview by Eric Nakajima, June 10, 2003. 27 Al Raine, interview, June 13, 2003. 5 John Dalzell, interview by Robert Dunphy, 28 A. Raine, 2003, op. cit. October 8, 2003. 29 Frederick Salvucci, interview by Eric Nakajima, June 10, 2003.

205 30 MBTA SilverLine, “All Photo 10.3 P. Vanderwarker AboutSilverLine.Com.” See Photo 10.4 B. Ward http://www.allaboutsilverline.com; A. Raine, Photo 10.5 (top) MBTA May 2003, op. cit., p. 80. Photo 10.5 (bottom) Hines Interests Limited Partnership 31 A. Raine, 2003, op. cit., pp. 81–83. North Station Fleet Center Box: T. Glickman Photo 10.6 ULI/Massport Photo 10.7 (all) MBTA Photo Credits Photo 10.8 ULI Photo 10.9 Fan Pier Land Development Company Photo 10.1 J. Steinhart Photo 10.2 E. Nakajima

206 Chapter 11

New Jersey’s Transit Villages: From Refurbished Rail Towns to Ferry-Oriented Development

TOD has a long history in the state of influences are discussed in the next two New Jersey, going back to turn-of-the- sections. century streetcar suburbs and commuter- rail towns. Following decades of decline New Jersey’s Market for TOD and disinvestment, today a movement is underway to re-energize neighborhoods In 1964, William Alonso advanced the surrounding longstanding train stations “trade-off” theory to explain residential and to create vibrant and attractive location choice in the contemporary transit-oriented communities. Spurred by urban United States.1 At its core, the powerful market forces, shifting theory holds that Americans decide demographics, and forward-looking where to live in reference to their state-led public policies, a new workplaces by trading off housing and generation of transit villages is taking commuting costs. Those living near form in the ninth most populous state in major job hubs (e.g., downtown) pay the United States (and in terms of per high rent premiums for the ability to capita incomes, the second wealthiest). get to work quickly; those residing far away from the center, on the other One finds a rich, interesting mix of TOD hand, endure high transportation costs in the highly urbanized northeastern part (i.e., long commutes) but pay far less of the state. Much of it has been in the for housing. Residential rent gradients, form of redevelopment—from the Alonso postulated, taper with distance refurbishment of century-old rail towns to from CBDs and are matched by rising the creation of attractive, market-rate commuting cost curves. The model has housing on former industrial sites that the most relevance to a monocentric today border modern ferry terminals. region with a dominant center, like While TOD efforts are currently the greater New York–Northeast underway in other parts of the state, New Jersey Metropolitan Area notably the Trenton-Camden corridor, (at least compared with the rest of the most of what is on the ground is in the United States). state’s northeast quadrant. This case study thus focused on this part of the state. Because of major rail enhancements and an affordable-housing crunch, Alonso’s No single factor accounts for the trade-off model is “alive and well” along resurgence of TODs in New Jersey. the Manhattan–Northeast New Jersey Rather, a confluence of market axis. Manhattan has held the preeminent dynamics, local political leadership, position on the urban hierarchy over the supportive state policy, and significant past several decades. As a command- rail-transit service enhancements has and-control post in the global economy sparked recent initiatives. These and an international center of culture,

207 arts, and entertainment, Manhattan’s Other Factors Stimulating TOD economic future remains bright. This is reflected in high residential rents. Today, Market realities are not the only factors a two-bedroom, 1,200-square-foot, that have propelled transit village unfurnished apartment in the average development in New Jersey recently. price range in midtown Manhattan The following have also been important: goes for $2,500 to $3,000 per month. Manhattan workers pay a high premium • Rail service enhancements. The in return for minimal commuting state’s transit authority, NJ costs (both monetarily and in time TRANSIT, operates six major rail investments). Alternatively, one can live passenger services that provide radial across the Hudson River in a waterfront connections to the concentration of apartment in Hoboken, New Jersey, and jobs and services in the northeast pay $1,800 to $2,000 for the same unit. part of the state (see Map 11.1). Ferry-oriented housing developments, Four of the lines—Morris and Essex, such as Port Imperial, just north of Raritan Valley, Northeast Corridor, Hoboken, have been built in the past few and New Jersey Coast—tie directly years on former industrial brownfields into New York’s Penn Station. to serve this very market—namely, New York City workers who would Among the host of factors that have prefer to pay less for housing (or get stimulated TOD activities in New more for their money) and are willing Jersey, the most widely cited one is to take a 10-minute ferry ride to and major rail service improvements: from Manhattan each workday. Go out specifically, the introduction of farther to townships like South Orange, direct, no-transfer services into Rahway, and Rutherford—all within a midtown Manhattan; reduced 30-minute rail commute of Penn Station headways; and refurbished train in midtown Manhattan—and one stations. These enhancements have finds even better housing bargains. In worked to revitalize the town centers neighborhoods surrounding recently of traditional suburban communities refurbished traditional train stations by virtue of their superior access to in these places, the residential rent New York City as well as the gradient falls to a typical range of $800 burgeoning waterfront district to $1,200 per month for similar housing. between Hoboken and Jersey City. Thus, within a half hour commuteshed of midtown Manhattan, one finds a Developers openly acknowledge the fairly differentiated housing- importance of direct passenger transportation marketplace, enabling services operated by NJ TRANSIT households to trade off housing and in pursuing TOD projects. In commuting costs according to lifestyle explaining why his company was preferences. With the help of good investing $160 million to redevelop a planning practice and supportive public retail parcel next to a rail stop in a policies, these unfolding market depressed part of Essex County, one dynamics have given rise to rail- and developer recently confided to the ferry-oriented developments in a New York Times that: “midtown diversity of settings. direct train service is what drew us to

208 Map 11.1. NJ TRANSIT Rail Passenger Lines in Northern New Jersey. Source: NJ TRANSIT.

209 the site.”2 The Times article went on • Political leadership. In a number of to say: small New Jersey towns, TOD has benefited from strong mayors who The coming of Manhattan Direct are firmly committed to revitalizing rail service has brightened up their traditional downtowns and who the downtowns in places like see transit stations as the focal points South Orange, where new rail for these efforts. In New Jersey, the stores have opened to cater absence of term limits has given rise to commuters and close-by to strong mayors who have been in residents, and in Morristown, office for four or more terms. For where a development of 10 new some places, this has provided 10 town houses costing close to $1 million each has all but sold out.3 to 15 years without abrupt shifts in policy direction, which is often To date, these enhancements have required to mount successful benefited towns west and southwest downtown redevelopment of Manhattan. The opening of the campaigns. Moreover, a number of mayors championing transit $450-million rail transfer station in village development run full-time Secaucus will soon benefit rail businesses. As a result, they are commuters northwest of Manhattan often very entrepreneurial in (in the northeast corner of the state) their approach to TOD. and those on the Pascack Valley, Main, and Bergen County lines. The Mayors wield a lot of clout in real- transfer facility will allow commuters estate development in New Jersey, a to bypass Hoboken en route to New home rule state. Local leaders have York Penn Station, significantly nearly total control over zoning and shortening their commutes. land-use decisions. Many mayors in the northeastern part of the state see It bears noting that the premium TOD in fiscal terms (i.e., an effective placed on frequent, direct rail tool for downtown revitalization and services by developers is consistent economic development). In the minds with the national survey results of mayors, commercial and residential reported in Chapter 2. In a healthy investments spurred by the presence real-estate market with a pent-up of a rail stop translate into higher demand for conveniently located ratables and property-tax proceeds. housing, developers know they can make money building around rail • State policies. In New Jersey, TOD is stops. The most important thing the part of a larger smart-growth agenda public sector can do, as shown by spearheaded by Governor James New Jersey’s experiences, is to McGreevey and his predecessor, provide frequent, convenient, former Governor Christine Todd reliable, and safe public transit Whitman. New Jersey has become a services. This, as much as anything, national leader in the smart-growth will ensure a continued market movement, using a mix of purse- demand for living and running a string powers and regulation to curb business near stations. sprawl and stimulate economic

210 growth. The state’s Office of Smart active support of farmland and open Growth provides administrative and space preservation. Through the technical support for implementing Garden State Farmland Preservation the state land-use plan and directs Fund, the state has purchased state capital grants to local projects thousands of acres of farmland in an that embrace smart-growth all-out campaign to curb sprawl and principles. preserve natural habitats. This has constrained land supplies, however, New Jersey Future, a high-profile and thus driven up housing prices. nonprofit advocacy group that is Land conservation has also prompted leading the fight for sustainable developers to focus on urban infill development, has produced a opportunities, including housing Smart Growth Scorecard to help development near traditional train communities rate new development stations. proposals. Projects that are accessible by four or more transportation modes In New Jersey, smart-growth and that lie within a 5-minute walk of policies, like transit village a rail stop receive high marks. initiatives and farmland protection, have been driven by economic Two particularly important state development concerns every bit as policies that have helped to leverage much as conservation considerations. TOD have been the “Transit Village An affordable-housing crisis and Initiative” and progressive continually worsening traffic snarls, brownfield reclamation legislation. officials fear, will prompt businesses The 1999 Transit Village Initiative to leave the state and choke off (described below) provides state economic investment. (According to grants and technical assistance to the Texas Transportation Institute, localities committed to transit- the New York–Northeast New supportive development. And the Jersey metropolitan area ranks 1998 Brownfields and Contaminated fifth nationally in travel time and Site Remediation Act provides congestion cost per peak road technical guidance and funding to traveler.5) By locating mid-rise municipalities for conducting housing near train stations and major cleanups of the more than 8,000 bus routes, New Jersey hopes to known contaminated sites that are dramatically increase housing dotted throughout the state. The Act offerings while also staving off is credited with providing greater traffic congestion. Some 1.2 million clarity and certainty about the likely new residents will be added to the costs and timelines for remediating state’s existing 8.5 million total over contaminated sites.4 The permitting the next 20 years. Locating housing and review process for brownfield around suburban transit hubs and redevelopment has also been directing job growth to cities is streamlined. widely viewed as a cost-effective and environmentally sustainable Another state policy that has strategy for accommodating this indirectly spurred TOD has been the growth without burdening already

211 overloaded freeways and rail the program started in 1999, 2002 was corridors. the first year money was allocated. According to one account, The Transit Village Initiative 1 million dollars of the nearly $99 State interest in TOD gained million federal . . . CMAQ funds momentum with NJ TRANSIT’s New Jersey received in 2002 were 1994 release of a handbook on TOD, dedicated as transit village monies, Planning for Transit-Friendly Land granted to eight designated transit Use, chock full of illustrations and villages. According to government ideas on how to make communities sources, $3 million in CMAQ funds have been allocated to the transit more inviting to buses, trains, village program over the next pedestrians, and cyclists. Introduced 3 years. 7 by then-Governor Whitman in 1999, the “Transit Village Initiative” embraced According to several mayors who urban design and site planning ideals were interviewed, a transit village outlined in the handbook. Defining a designation helps in streamlining the transit village as “a municipality that is state permitting process. If a developer committed to redeveloping the area 1 encounters a problem in securing state around its train station (typically ⁄4- to 1 permits, staff from appropriate state ⁄2-mile radius) into a compact, mixed- agencies will, and often do, help in use neighborhood with a strong overcoming it. residential component,” the program awards funding for projects that contribute to these goals. To become a transit village, a local community must demonstrate a firm New Jersey’s Transit Village Initiative commitment to transit village principles. gives priority access to state grants (See Text Box 11.1.) First and foremost, (e.g., for urban renewal and station-area planning needs to be well transportation improvements) and underway, and some expression of provides coordinated technical private-sector interest needs to be assistance from 10 different state secured. agencies, with the NJDOT and NJ TRANSIT taking the leadership roles in To date, eight communities have been coordinating efforts among agencies.6 designated as transit villages: five in Transit villages are supposed to get 1999 (Pleasantville, Rutherford, South “bonus points” when it comes to Orange, Morristown, and South receiving funds from the 10 agencies Amboy); one in 2001 (Riverside); and and related state and federal funding two more in 2002 (Rahway and pools, such as NJDOT’s Local Aid for Metuchen). Most of these communities Centers, Transportation Enhancement, were originally settled in the mid-1800s. and Bicycle and Pedestrian Projects programs. Local officials are somewhat While New Jersey’s Transit Village guarded in their assessment of whether a Initiative was well intended, the jury is transit village designation will translate still out on its potential effectiveness. into meaningful dollar figures. Although One observer remarks:

212 Transit Villages in Traditional New Jersey’s Transit Village Rail Towns Scorecard The downtowns of most traditional To enjoy priority access to state grants railway towns in Northeast New Jersey and receive technical assistance, local have had similar fates. Over the past communities must demonstrate that 30 years, the opening of indoor mega- they are committed to TOD. Specific malls has slowly but steadily chipped criteria used to screen applicants and away at the economic vitality of once award a “transit village” status are vibrant commercial districts. Main streets became boarded up save for a coffee • Demonstrated land-use strategy. A shop here and a thrift store there. The master plan, zoning ordinance, or combination of an affordable-housing redevelopment plan must exist that crunch, worsening traffic congestion, embraces transit village principles. and the desire among many for more traditional living environments, however, • Available properties. Land must be is beginning to change the fortunes of available in proximity to transit many rail-served business districts in facilities. Northeast New Jersey. Thanks to local

leadership and state funding support, • Ready-to-go projects. There must be there is today a burgeoning market viable market interest and activities in the works. demand to live, work, shop, and do business in these once-moribund districts. • Station-area management. The heritage stock of buildings, the small- Economic development strategies and town ambience, and the presence of rail ancillary activities like streetscaping stops with a 30- to 40-minute direct and traffic calming are desired. connection to midtown Manhattan has triggered this renaissance. • Architectural integrity. The historical significance of buildings Rahway should be preserved.

The city of Rahway, 4 square miles in • Jobs, housing, and culture. Job size, with 25,000 residents, is strategically creation, affordable housing, and cultural offerings should be promoted. located along NJ TRANSIT’s Northeast Corridor (which shares tracks with Text Box 11.1 Amtrak’s Boston-Washington Northeast Corridor). With the 12th busiest NJ TRANSIT rail station and situated within a 35-minute train ride of New York’s So far, meager funding has kept the program from accomplishing much Penn Station, Rahway is on a rebound outside of a very few locations or after decades of decline and from serving as an incentive strong disinvestment. enough to change the behavior of towns that are not already inclined By all accounts, the perseverance of to transit friendliness or station-area Rahway’s mayor has been the catalyst to redevelopment.”8 Rahway’s transformation. A downtown

213 merchant who owns a shop directly Residents are the eyes of the downtown across from the Rahway train station, district, providing a sense of security. Mayor Jim Kennedy has doggedly Theater-goers add bustle during sought, over his 13 consecutive years in weekends and keep restaurants busy office, to reinvigorate the town center, after hours. As all-day, all-week trip beginning with the downtown rail generators, these activities also provide station. In an address to New Jersey’s a steady flow of transit riders. Housing, Finance, and Mortgage agency, Mayor Kennedy remarked: “Our plan In keeping with Scandinavian town- was designed around NJ TRANSIT’s planning principles, a civic plaza fronts investment of $18 million and a new the Rahway train station (see Photo 11.1). train station; the station is a great asset Every Thursday the plaza becomes a that has brought us the ability to develop farmer’s market, and several times per a unique central business district.”9 month it supports a crafts fair. In 2002, the plaza was recognized by Downtown Rahway’s downtown plan calls for 1,400 New Jersey as the best new use of public housing units to be built within walking space in the state. Traffic-calming and distance of the train depot. A mix of streetscape improvements have been affordable, up-market, and luxury-rate introduced to enhance the station area’s units will be added. The mayor is pedestrian environment. forthright in noting who is being targeted for these new units—principally As a businessperson himself, Mayor Manhattan workers who are priced out Kennedy has aggressively pursued of Hoboken’s increasingly expensive public-private partnerships. Using housing market. With typical leases condemnation powers to assemble land fetching $2,000 per month for two- and entering into equity agreements in bedroom Hoboken units overlooking the lieu of collecting taxes, the mayor and Hudson River, renters can save $1,000 his team have brought about remarkable or more each month by living in changes among several strategically comparable housing in Rahway. Several important parcels. A former dump site real-estate brokers who specialize in two blocks from the station, for instance, Hoboken’s housing market were brought was recently replaced by 87 modern in to advise the mayor on how to market townhouses. The city advanced transit-based housing. Borrowing a $1.5 million for the project and waived chapter from William Alonso’s “trade- property-tax payments for 10 years in off” theory, they urged the mayor to go return for 3% of the proceeds for real- after the “spillover” market—those who estate sales. Another deal involved the are willing to endure a longer commute city buying a boarded-up parcel across in return for cheaper rents. Units are from the train station for $250,000 and being built with a maximum of two selling it to a developer for $1,000. The bedrooms in order to attract a younger developer in turn invested $600,000 to tenant clientele. To enliven the center so overhaul the building, creating 4,000 as to appeal to young professionals, an square feet of ground-floor retail space arts-restaurant-entertainment district with eight apartments above. The city is in the works. Such mixed uses receives a share of rent proceeds plus complement and reinforce each other. some $15,000 annually in property-tax

214 Photo 11.1. Rahway Transit Village. Borrowing from Scandinavian town-planning principles, Rahway has made its recently refurbished train station the centerpiece of the community. The top photo shows a plaza fronting the station that occasionally hosts an open-air market, crafts fairs, and public celebrations. The lower left photo shows bicycle parking prominently situated at the station entrance. The lower right photo shows several nearby downtown streets have decorative lighting, bricked sidewalks, and traffic-calming chokers. income. Many credit these partnerships train station. A zoning overlay was to the mayor’s “can-do” outlook and created that creates a maximum parking business acumen. ratio of 1.2 on-site spaces per unit— a remarkably low benchmark for a Rahway is also notable for pushing the small town—for residential projects envelope on parking for parcels near the within three blocks of the train station.

215 A five-story parking structure is also 1996, which lowered the travel time being built next to the station in hopes of from South Orange to only a half hour. redeveloping the existing surface lot. A year earlier, the same trip took Some observers, however, feel that 50 minutes via a transfer at Hoboken. Rahway’s desire to attract park-and- riders could backfire by making the Over the past 3 years, 340 apartment 1 downtown less transit- and pedestrian- units have been added within ⁄4 mile of friendly than it otherwise would be. South Orange’s refurbished train station. (See Text Box 11.2.) This view, The flagship project is called Gaslight however, is not shared by Rahway’s Common—named for the town’s retro mayor and other civic leaders, who feel street lights. A national firm, LCOR, ample convenient parking is necessary Inc., built the 200-unit, four-story project in the near term to attract sufficient to take advantage of the developable ridership to revitalize the core. Another site’s close proximity to the station. The progressive policy has been the project has just one parking space per introduction of a free shuttle bus that unit—almost unheard of in suburbia— feeds into the train station, supported and a density of 38 units per acre. In by a grant from NJ TRANSIT. commenting on the natural market advantages of projects like Gaslight South Orange Common, an LCOR, Inc., vice-president said: “Transit-oriented development Situated along the Morris and Essex will be to this century what suburban lines with direct service to Manhattan, development was to the past; people do the city of South Orange’s train station not want to drive to the city anymore; recently underwent a dramatic facelift. they would rather take the train.”10 In Station facilities were modernized, and emphasizing the orientation of rail-based the structure itself was upgraded. Six housing to childless households, a New formerly unproductive storefronts under York Times article recently noted that the station viaduct were also renovated just three school-age children live in into commuter-oriented retail shops and Gaslight Common’s 200 apartments.11 sit-down restaurants (see Photo 11.2). Extensive streetscaping on and around As in Rahway, South Orange’s Mayor, the station, decorative lighting, and Bill Calabrese, has been the lightning urban art have created a pleasant rod for the dramatic revitalization that is pedestrian milieu. A traffic roundabout presently underway in downtown South and an entrance plaza have also helped Orange. When the plan was announced vehicle circulation around the station. in the early 1990s to bring direct train service to Manhattan, Mayor Calabrese South Orange, home to Seton Hall saw an unprecedented opportunity to University, enjoys a small-town charm, turn around the slowly declining a significant factor in the decision by downtown. A redevelopment plan was several developers to build moderately prepared that called for bringing full- dense housing near the train station. time residents to the downtown. Rail- More important, however, was the based housing would be complemented introduction of direct passenger rail by various urban design improvements services to New York’s Penn Station in and public amenities.

216 Rationalizing Parking Policies in Traditional Rail Towns

In the heated competition for shoppers, downtown merchants in traditional rail towns understandably want as much free and convenient parking as suburban malls. Generous parking supplies can also translate into park-and-riders who hang around and shop when they exit train stations in the afternoon. Parking, however, can also strongly influence the character of a district, making it seem not particularly pedestrian friendly or transit oriented. Below are excerpts from a commentary on Rahway’s downtown parking policy and the larger dilemma facing New Jersey, published by the Tri- State Transportation Campaign, an advocacy organization (each passage is an excerpt).

“Part of the criteria to become a transit village is to ‘reduce parking requirements and encourage shared parking.’ One way to do that is to rezone for more residential density and mixed uses around the train station.”

“In New Jersey, however, the urge to build more parking is strong, and counterproductive. For instance, Rahway is also building a five-story parking deck right across the street from the station. Rahway has the right idea—the new parking lot will liberate downtown land currently used for parking to be redeveloped for other uses—but why not reduce the number of new parking spaces and make other transportation options more attractive to commuters? It’s unclear whether other alternatives were thoroughly explored—like jitneys, car pool programs, bike lanes and parking, or increased feeder bus service.”

“The Rahway parking deck is just the beginning of New Jersey DOT’s enhanced investment in new parking spaces. In late 2002, the DOT announced its plan to create 20,000 parking spaces near bus and train stations; that was enshrined in the executive order the governor issued creating the blue ribbon commission to study ways to enhance revenue for transport capital projects. A whopping $200 million of New Jersey’s long term capital budget is scheduled to be used for designing and building parking spaces. If the state held stock in parking firms that paid dividends, they might at least reap some benefit from this partnership. But spending precious capital dollars for the storage of vehicles on valuable land that could be put to economically productive uses is a waste of taxpayer money.”

“In 2003, $13 million of New Jersey Transit’s capital fund (thirteen times the entire annual allocation for transit villages) is designated for the design and construction of parking spaces. 840 spaces are to be constructed and 3,300 more designed by 2004.”

“Though the McGreevey Administration continues to hail added parking spaces as part of its smart growth initiative to bring new riders to train and bus stations, NJ TRANSIT research has found that increasing the number of parking spaces does not bring a commensurate number of new riders. The research revealed that more often these same riders were existing passengers who previously got to the train station another way, like walking, biking, carpooling, being dropped off or taking a bus or jitney. The new parking spaces just encouraged existing riders to drive, rather than get to the station in a smarter, more efficient manner.”

“Increased parking around train stations also increases peak hour congestion and pollution on local streets, which runs counter to transit village ideals.”

“Gov. McGreevey’s agencies have to raise the bar for smart growth well beyond building more parking at train stations.”

Source: Tri-State Transportation Campaign, “Parking Investment Bad Sign for NJ TRANSIT Villages,” Mobilizing the Region, Issue 406 (March 10, 2003).

Text Box 11.2 Photo 11.2. South Orange’s Station Viaduct Stores. In 1995, café space was built in front of the station’s viaduct stores. Street trees, landscaping, decorative lighting, intersection bulb-outs, and diagonal parking have created a pleasant human-scale environment immediately adjacent to the station.

One of the first steps was to calm traffic redevelopment, emphasizing Arts, and enhance pedestrian safety. With Culture, and Entertainment uses. A state aid, a former four-lane state soon-to-be-completed theater-arts highway piercing the downtown and complex will share parking with the directly serving the train station was adjacent train station—a natural narrowed to three lanes, sidewalks were arrangement given that the parking widened, zebra-crossings and traffic demands for these uses are at opposite signals were added, and intersections hours of the day and week. Historic were bulbed-out to slow vehicular preservation is also vital to downtown speeds. These public improvements in redevelopment; for example, a historic turn spurred private investment in new firehouse near the train station was and old businesses. Today, South rebuilt rather than being torn down and Orange has one of the most successful replaced by a modern facility. Main Street programs in the state. As in other parts of the state, city South Orange is also pursuing the government has facilitated redevelopment “ACE” model of downtown in South Orange by using condemnation

218 to assemble and hand over land parcels to In a recent interview in On Common developers. Low-interest loans secured Ground, a publication of the National for redevelopment sites have also been Association of Realtors, a Morristown passed on to developers to entice private agent told this story about the seem- investment. ingly insatiable demand for living in small rail-served towns like Metuchen Morristown:

In 2003, the village of Metuchen, One of my clients absolutely would not sign a contract with me until he situated some 40 minutes from took a ride into Penn Station . . . Manhattan on the Northeast Corridor, I told him, ‘Don’t worry, it’s received $600,000 in Transit Village 51 minutes’ . . . ‘It better be,’ he Initiative grant funds. Money is going said. ‘If it’s 52 minutes, I’m not toward pedestrian walkways, bike racks, going to buy it.’ It turns out the and traffic calming near the commuter buyer was only kidding. He said, rail station. Although there are already ‘It was 72 minutes, but there was 75 spaces for bicycles at the station, a delay along the way. Where do demand has outstripped supply, with I sign the contract?’13 “bikes tied up all over the place,” according to the town’s mayor, Rutherford Ed O’Brien.12 For the past 20 years, the mayor has spearheaded a campaign The borough of Rutherford is situated to transform Metuchen’s downtown on the Bergen County passenger rail into a vibrant mixed-use center, taking line. Presently, it takes around advantage of the station. State funds, 40 minutes to reach New York’s the mayor believes, are helping to Penn Station via the Hoboken terminal seed this effort. and connecting Port Authority Trans Hudson (PATH) train Morristown or ferry services. When the Secaucus transfer facility opens, average travel With state Transit Village Initiative times to midtown Manhattan are assistance, the city of Morristown is expected to fall to 25 minutes. presently in the midst of “adaptively reusing” its 300-space surface parking These dramatic travel time savings have lot. Situated next to the train station, the been noticed by real-estate developers. lot is being converted to 228 rental After several decades of dormancy, apartments, 8,000 square feet of retail construction cranes are once again space, and a three-level parking deck for active in downtown Rutherford. 700 cars. Of the 700 total, 274 parking A two-story bank office was recently spaces will go to apartment units, coming built catercorner to Rutherford’s in at 1.2 spaces per unit. The remaining train station. A two-acre mixed-use 426 spaces will be for transit users. Both development (under construction) will rental and for-sale housing will be built, add 48 rental housing units, a medical targeted at professionals with jobs in office facility, ground-floor retail, and Manhattan and the I-287 corridor. a child-care center to the station area

219 Photo 11.3. Rutherford’s Transformation. A multi-story mixed- use project rises upwards across from Rutherford’s traditional train station. In recent years, NJ TRANSIT has invested over $2 million in station roof and façade restorations as well as in improvements in the platform to make it compatible with the Americans with Disabilities Act. Presently, 35% of passengers reach the station by foot. Through various streetscape enhancements and traffic calming, borough planners hope to increase this share.

(see Photo 11.3). The developer made various streetscape and traffic- received density bonuses in exchange calming improvements, hoping to for providing parking. strengthen pedestrian connections between the traditional train station and Rutherford’s emerging transit village downtown district. is a prime example of interagency cooperation. Through a planning Ferry-Oriented Development assistance program called “Transit Friendly Communities for New Jersey,” U.S. de-industrialization has left land NJ TRANSIT hired consultants to work holdings that were once thriving with the municipality to prepare a businesses and industrial centers. Thanks market-realistic land-use program, to the state’s progressive brownfield design parking deck and pedestrian remediation laws and smart-growth improvements, and provide traffic policies, many former industrial sites engineering assistance for intersection along New Jersey’s Hudson River and roundabout designs. With grant waterfront are being dramatically assistance from the state Transit Village transformed into viable communities. Initiative, the borough has recently Mid- and high-rise residential towers,

220 nestled around ferry ports, have sprung residents take some form of public up over the past decade in what transit to work each day: most take previously were depressed communities New York Waterway ferries, with like Hoboken, Jersey City, and Bayonne others taking nearby PATH commuter (see Photo 11.4). rail and Hudson-Bergen light-rail transit. Port Imperial is a classic One of the best examples of a example of residential self-selection: successful ferry-oriented development those with a lifestyle preference to live is Port Imperial, a mixed-use, master- in a pedestrian-friendly urban setting planned waterfront project situated 2 and take transit to work choose miles across the Hudson River from residences near major terminuses—in midtown Manhattan. With unparalleled this case, ferry ports. High ridership vistas of New York City’s towering rates are a direct outcome of this self- skyline, the 95-acre site features 1,900 selection. As long as a supportive townhomes, mid-rise apartments, and public policy environment exists, as has condominiums and 100,000 square feet been the case in New Jersey, the market of specialty retail and restaurants (see will create the kinds of products that Photo 11.5). At build out, these will allow workers to sort themselves amounts will more than double. An into neighborhoods that are well served estimated 70% of Port Imperial by public transit.

Photo 11.4. Ferry-Oriented Housing Development on Former Industrial Sites in Hoboken. With rents that are half or less of what tenants pay in midtown Manhattan, stunning vistas, and a 10-minute ferry ride to the city, Hoboken’s apartment/condo market is red hot.

Photo 11.5. Port Imperial. As viewed from a ferry shuttle, the master-planned, mixed-use project—with a range of housing products targeted to a professional clientele— enjoys nearly 1 mile of Hudson River frontage.

221 Re-urbanization in Jersey City

Not all rail-oriented development in the state has been predominately residential. In Jersey City, the state’s second largest municipality (with a population of 228,000 in 2000), there has been a recent boom in white-collar office and commercial development. Back offices of Manhattan headquarters have been attracted to Jersey City because of the direct line of sight to New York as well as direct PATH and ferry connections. Most of the new development has been along the 15-mile Hudson-Bergen light- rail system (see Map 11.2). Light rail has served to channel growth along Jersey City’s burgeoning waterfront, linking several dozen recently built mid- and high-rise office, retail, and hotel towers (see Photo 11.6).14 Photo 11.6. New Office Towers at the Essex Street Light-Rail Station in Downtown Jersey City.

Since the opening of the 15-mile Hudson-Bergen light-rail line between Hoboken and Bayonne, a flurry of building activity has occurred directly adjacent to the tracks: 690 mid- to high- rise apartment and condominium units, 3.95 million square feet of office space, two major hotels with 415 units, and around 100,000 square feet of street- level retail (see Photo 11.7).15 Projects abutting the tracks that are under Map 11.2. Hudson-Bergen Light-Rail construction or that have received Line. The system connects residential development permits will add another Bayonne and western Jersey City with 1,825 residential units, 4.42 million Jersey City’s Exchange Place and square feet of office space, 414 hotel Newport Center as well as Hoboken rooms, and 320,000 square feet of Terminal—business and shopping retail. Within the 1.5-square-mile centers with easy connections to New downtown Jersey City development York City via PATH and New York district, the 22 built or soon-to-be-built Waterway ferries. Source: NJ TRANSIT. parcels adjacent to the light-rail tracks

222 office and hotel additions and over three-quarters of housing units have congregated. There is little question that light-rail transit has been a powerful magnet in focusing Jersey City’s past decade of central-city reinvestment and renewal.

One land use that stands out along the Hudson-Bergen light-rail line is the Newport Centre Mall—a 930,000- square-foot indoor facility that has the Photo 11.7. Residential and Hotel appearance of a modern suburban mall, Towers at the Metro Plaza/Harsimus including four major anchor tenants, Cove Station in Downtown Jersey City. except that it sits in downtown Jersey City, right next to the Pavonia-Newport make up the majority of the 11.8 Station (see Photo 11.8). While the million square feet of commercial space mall pre-dated the light rail’s opening built downtown over the past 7 years in 2000, the availability of frequent at- and over 40% of the housing-unit grade tramway access to nearby offices, additions (see Figure 11.1). And within condominiums, and hotels has certainly two city blocks (or 750 feet) of the not hurt business sales. Macy’s recently light-rail tracks, all of Jersey City’s opened a 237,000-square-foot retail addition within 100 feet of the Pavonia- Newport light-rail station. Increasingly, Residential 40.7% Newport Centre is taking on a multi- Units 76.8% use character, adding offices, hotel space, and housing to the mix.

Office 80.9% Space 100.0%

60.6% Hotel Units

100.0%

Retail 58.6% Space 97.1% 0% 20% 40% 60% 80% 100% Percent of Downtown Total Photo 11.8. Light Rail at the Newport Centre Mall. The light-rail Within 750 feet of LRT tracks Adjacent to LRT tracks line lies under a pedestrian skywalk that Figure 11.1. Share of Development connects Newport office tower (on the Activity Near Light-Rail Line in right) to the modern three-story indoor 1.5-Square-Mile Downtown Jersey City. mall on the left (west) of the station.

223 Surrounding Newport Centre Mall are construction. Also, parking standards seven Class A, 20-story (or more) have been lowered for most parcels office towers, many of which host abutting rail lines to around one on-site office workers displaced from lower space per 1,000 square feet for office Manhattan by the World Trade Center uses and less than one space for tragedy. residential units.

For the most part, Jersey City’s light While office and retail growth has rail–oriented development has been predominated in Jersey City, one driven by the market, requiring little in notable residential project that is the way of policy levers or perquisites currently in the works is Liberty Harbor to steer development to the rail North. The project, slated for an 80-acre corridor. More important than light rail former industrial site, openly and to the addition of so much new aggressively embraces New Urbanism commercial and residential space in design principles. According to the downtown Jersey City has been the project’s master-designers, the Miami- presence of three PATH stations, based firm of Duany Plater-Zyberk & providing direct connectivity to Company, “Liberty Harbor North will Manhattan. It is doubtful that anywhere perhaps be the most thorough near as much as the 12 million square exemplification to date of the principles feet of commercial development added of the New Urbanism.”17 The mixed- in the past decade would have occurred use, transit-oriented, master-planned in the absence of PATH services. What project will feature 6,337 dwelling the light rail did, however, was to units, 4.6 million square feet of Class A channel Manhattan’s spillover growth office space, and around three-quarters that landed in Jersey City. Consistent of a million square feet of commercial- with experiences elsewhere, retail development. The site’s superb experiences in Jersey City show that proximity to local and regional rail light rail does not create new growth services is one of its strong suits. In but rather redistributes where already addition to being served by two light- committed development occurs.16 Local rail stops, the project is just a officials concede that little concerted 5-minute walk to the Grove Street effort has been given to strengthening PATH station, providing direct rail the transit/land-use nexus. TOD has connections to both lower Manhattan occurred regardless. The integrated and midtown. New York Waterways planning and urban design strategies also serves the site, providing frequent that have occurred have been more of ferry connections. an afterthought. Still, public initiatives have been important to the renaissance Liberty Harbor North’s New Urbanism currently underway in downtown Jersey design is most evident in its streetscape City. The major public-sector design—small city blocks in a modified contribution to large-scale development grid arrangement. The project is has been assistance with land assembly sprinkled with plazas, greenways, and through condemnation. Forty-year tax neighborhood retail to promote walking abatements have also been introduced and easy access to light-rail and heavy- to encourage affordable-housing rail services.

224 Transit Joint Development transporting commuters, its primary goal.”19 To date, there has been relatively little in the way of transit joint development Conclusions and Lessons in New Jersey, such as leasing air-rights above transit stations. This could New Jersey experiences point to the change in coming years, however. At importance of a viable market and the Secaucus transfer station, NJ supportive public policies, from the state TRANSIT spent several million extra to the local level, in bringing about dollars to strengthen the foundation TOD. An affordable-housing crunch, so that future office air-rights growing demand for accessing midtown development could occur. A soft Manhattan, and worsening traffic tie-ups real-estate market has stalled activities; have created a ready-made market for however, authorities expect a mixed- living, working, and doing business near use project to one day be built above rail stops. At the state level, major the facility. capital improvements of commuter-rail lines and progressive smart-growth and NJ TRANSIT is also committed to brownfield remediation legislation have public-private partnerships for paved the way for developers to build extending future light-rail services. The near rail stops and ferry ports, whether extension of the current 4.3-mile mid-rise housing or mixed-use infill Newark City Subway light-rail line to projects on former industrial sites. downtown Elizabeth, for example, is to be constructed through a public-private Not all communities with stops on a co-venture. The new $1.1-billion, direct rail line to Manhattan have 34-mile light-rail line between Camden witnessed TOD activities. Good access and Trenton, called the River Line and is not enough. Also needed are visions scheduled for an early 2004 opening, is and visionaries. Powerful and influential a design, build, operate, and maintain local mayors, many serving their third or project. The builder-operator, Southern fourth consecutive term of office, have New Jersey Rail Group, LLC, a spearheaded the transformation of rail- consortium led by Bechtel and Adtranz, served downtown districts in most is considering ancillary real-estate instances. Most are entrepreneurial in projects at several stations. One study their approach, seizing on the cachet of estimated up to 6,000 housing units a traditional rail station and materially could be added to the light-rail corridor enhanced rail services as selling points between Camden and Trenton over the for leveraging private investment. All next 20 years, a product of “induced have development plans in place that development.”18 A recent article in the orchestrate how, where, and when the Philadelphia Inquirer notes that the rebirth of station areas will take place. project “will restore some luster to the river towns whose economies Public policy and leadership have been faltered as sprawl took root in South important in leveraging TOD in New Jersey,” but calls the investment “a Jersey, but so have market pressures. controversial experiment that makes Increasing numbers of Manhattan and economic development, rather than Jersey City workers seek residences that

225 are a convenient walk to a train station. spillover growth with or without light As one realtor put it: rail. What light rail did was to channel and guide where the growth occurred. In the New Jersey suburbs, putting The Hudson-Bergen light-rail line the magic words ‘close to train’ in functions like a central-city circulator, ads generates more interest in connecting offices, shops, housing, properties . . . Transit is extremely restaurants, theaters, and cultural venues important to many potential buyers, along the once-moribund but now- and I lose some of them if I can’t bustling Jersey City waterfront. provide it . . . I can’t tell you how many folks I’ve had go away because a home is not close enough 20 to the train station. Notes

Small towns like Rahway and South 1 W. Alonso, Location and Land Use Orange are adding not only housing (Cambridge, Massachusetts: Harvard units but also revitalized cultural- University Press, 1964). entertainment districts near their train 2 J. Holusha, “New Vitality Around Old stations. These are complementary land Railroad Stations,” New York Times, uses in the sense that they provide all- March 16, 2003, Sec. 11, p. 6. week, all-day trip generators. State 3 Ibid. assistance via the Transit Village Initiative is seeding various streetscape 4 The Brownfields Act allows for a and traffic-calming measures that are memorandum of agreement (MOA) between a developer and the New Jersey Department crucial to creating a pedestrian-friendly, of Environmental Protection to remediate a human-scale setting. property. As long as the terms of the MOA are adhered to, a developer is protected from New Jersey’s TOD experiences show future liability in the event that unsuspected that there is an element of truth in the or unknown contamination is encountered at saying that “small is beautiful.” The some later date. places that have been most successful in 5 T. Lomax and D. Schrank, 2002 Urban turning around neighborhoods bordering Mobility Report (College Station, Texas: train stations have generally been small Texas Transportation Institute, 2003). towns with powerful elected officials and 6 Among state agencies that provide assistance small planning departments. This has to localities under the Transit Village created institutional efficiencies. Few of Initiative are the New Jersey Department of the state’s largest cities have gotten into Transportation; NJ TRANSIT; the Office of State Planning; the Economic Development the act, partly because of bureaucratic Authority; New Jersey Mortgage Finance; the inertia. The notable exception is Jersey Department of Environmental Protection; and City. The millions of square feet of the Council for the Arts. office, housing, and retail space along 7 Tri-State Transportation Campaign, “Promise Jersey City’s light-rail corridor, however, of New Jersey’s Transit Villages Requires is not so much the product of proactive Stronger State Commitment,” Mobilizing the station-area planning as it is good timing Region, Issue 405 (March 3, 2003). See and location. Lying within 5 to 10 http://www.tstc.org/bulletin/20030303/ minutes of Manhattan via train or ferry, mtr40505.html. Jersey City would have experienced 8 Ibid.

226 9 New Jersey Department of Community Form (Washington, D.C.: Transportation Affairs, “Rahway Mayor Touts Research Board, National Research Council, Redevelopment Plan for Central June 1995). Business District” (May 7, 2002). 17 Duany Plater-Zybeck & Company, Liberty 10 Holusha, op. cit., p. 1. Harbor North: Project Description (February 2001). 11 Ibid. 18 R. Pearsall, “Rail’s Fate Linked to Growth,” 12 Tri-State Transportation Campaign (March 3, South Jersey News, April 24, 2001, p. 2. 2003) op. cit. 19 F. Kummer and J. Downs, “South Jersey 13 J. Van Gieson, “Commute Time & Light Rail: Development Boon or Transit 24/7 Living,” On Common Ground Boondoggle,” Philadelphia Inquirer, July 27, (Summer 2003): 14. 2003, B-1. 14 The Hudson-Bergen light-rail system links the 20 Van Gieson, 2003, op. cit., p. 17. growing cities of the Hudson River waterfront. The system operates primarily at-grade between Bayonne and Bergen County. It serves Photo Credits the high-density commercial and residential centers in Jersey City and Hoboken and Photo 11.1 R. Cervero connects to ferries, PATH, and commuter rail. Photo 11.2 M. Rosenthal 15 City of Jersey City, Division of City Photo 11.3 M. Rosenthal Planning, Downtown Development Map Photo 11.4 R. Cervero (October 24, 2002). Photo 11.5 R. Cervero Photo 11.6 R. Cervero 16 R. Cervero and S. Seskin, TCRP Research Photo 11.7 R. Cervero Results Digest 7: An Evaluation of the Photo 11.8 J. Bell Relationship Between Transit and Urban

227 Chapter 12

Washington, D.C.: Model for the Nation

The Washington Metro system is the Washington Metropolitan Area first modern rapid transit system Transit Authority: A Joint built since the Second World War Development Pioneer to specifically incorporate a goal of shaping regional growth in addition to All major transit investments require fighting congestion and improving regional collaboration; however, the transit. The emergence of TOD Washington, D.C., region was especially around dozens of Metrorail stations is tricky, involving, as it does, two states widely hailed as a success by local and a federal district with direct oversight supporters and observers from around by the U.S. Congress. Washington the world. Washington’s transit Metropolitan Area Transit Authority planners wrote the book on modern (WMATA) is an independent regional joint development, and local transportation authority created by an governments chimed in with supporting Interstate compact that is still considered a local policies to advance TOD near model of multi-jurisdictional coordination. Metrorail stations. Originally created to build a rapid transit system consisting of subway, surface, TOD leadership came early on from and elevated routes, WMATA was Metrorail’s staff and board, as well as subsequently given authority to take over from three local jurisdictions: Arlington the private bus operators serving the County, Virginia; Montgomery County, region. The agency has grown to become Maryland; and the District of Columbia. the second largest public transit operator Each saw the development potential of in the United States, carrying over 1 the transit investment and jumped out in million customers a day on bus and rail. front to take advantage of it. Originally, Because of the region’s extraordinarily the TOD successes were largely complex political landscape, WMATA confined to downtown and upscale has no dedicated funding source, relying corridors in the District of Columbia, instead on a mix of various contributions and the adjacent communities of from state and local governments, as well Arlington, Virginia, and Bethesda, as passenger fares. This set the stage for Maryland. Recently, however, there has the agency to take joint development been a resurgence of development, opportunities very seriously. especially of in-town housing in once deteriorating neighborhoods in the WMATA’s primary goal, like that of District and in more automobile- most transit agencies, is moving people, oriented suburbs whose leaders are which in turn helps battle congestion and searching to replicate the successes of improve air quality. The 103-mile, their more prosperous “inside the 86-station Metrorail system is the Beltway” counterparts. centerpiece of the region’s transit network

229 WMATA’s leaders saw the importance of promoting adjacent development to generate riders and revenues, and long before the rail system became operational, the board adopted policies and procedures that created a public/private land development program. The first private development project, Rosslyn (Virginia) Metro Center, was initiated in 1973, 3 years before the Metrorail system opened. By 2003, there were 52 joint development projects with a market value of $4 billion, which delivered some $6 million in annual revenues to the transit agency (see Table 12.1). In addition, these new developments have generated an estimated 50,000 new transit riders and over 25,000 jobs.2

Map 12.1. Washington (D.C.) Metropolitan Creating a real-estate development Area Subway System. department within WMATA in its infancy was a vital step in moving joint (see Map 12.1). Metrorail is an important development activities forward. Staff presence in the District since, after all, with backgrounds in real-estate a nation’s capital needs to function as development were hired and given the efficiently and free of traffic gridlock as resources to build a portfolio of land possible. However, national, regional, and holdings. Private-sector experiences local leaders recognized early on—some helped to create a more entrepreneurial from their travels and work experiences approach to land-use issues than is found abroad—that a transit network is more in most transit agencies. Rather than than a people mover. A transit system simply waiting and reacting to developer should also shape regional growth. Metro proposals, staff aggressively sought Board Chairman Chris Zimmerman notes: out mutually advantageous joint development opportunities. Working on When we talk about the great their side was the fact that WMATA had success of public transportation in accumulated a large amount of real this region, we generally talk about estate around some stations, in part bus and rail ridership. But transit- because some of the properties oriented development is the real condemned and acquired were multi- unsung hero of our operation. Due acre farmsteads. While entire parcels to the tremendous success of this program, our region has benefited were often not needed, because partial from land use which attempts to takings would have created less maximize the value of our productive or unusable remnant parcels $9 million investment in our and severance damages would have been regional Metrorail system.1 substantial, WMATA ended up

230 Table 12.1. WMATA Joint Development Projects

PROJECT TYPE LAND USE

Ballston AR, GL, SC, SO Mixed Commercial (office,retail, hotel)–Residential

Bethesda Metro Center AR, GL, SC, SO Mixed Commercial (Office, hotel, retail) Elm-Reed Street GL Office

Clarendon SCF Office

College Park Negotiations with selected developer were terminated. Site is offered in current joint development solicitation.

Columbia Heights GL Residential, retail

Court House GL Office, retail

Dupont Circle GL Retail

Farragut North GL, SCF Office, retail

Farragut West Hill Building Assoc. SCF Office, retail International Square SC, SCF, SO Office, retail

Fort Totten GL Residential, retail

Franconia-Springfield (Greyhound Bus GL Retail Kiosk)

Friendship Heights Mazza Gallerie SCF Retail May Department Stores SCF Retail Chevy Chase Pavilion SCF Retail Chevy Chase Land GL Retail/Office

Gallery Place S, SC, SO Mixed Commercial (retail, restaurant, entertainment)– Residential

Georgia Avenue Site was sold to the District of Columbia to accommodate government office building. Project was cancelled. Site is being reoffered for development by the District with WMATA oversight.

Greenbelt S, SC, SO Mixed Commercial (office,retail, hotel)–Residential

Grosvenor North Parcel GL, SC Residential, retail South Parcels S Mixed Commercial (retail, health club)–Residential

Huntington North GL Office, retail South S Residential, open space (12-acre park to be dedicated to Fairfax County by developer) Montebello Connection SCF Residential

KEY: AR= air rights; GL= ground lease; S=sales transaction in which WMATA reserves the areas it requires for its facilities; SC=shared construction cost; SCF=station connection fee; SO=shared operating costs. (Source: WMATA) (Table continues next page)

231 Table 12.1. (Continued)

McPherson Square GL Office, retail

Metro Center Columbia Square GL Office, retail May Department Stores I SCF Retail May Department Stores II SCF Retail

Minnesota Avenue S, SC, SO Office, retail

New Carrollton Amtrak Ticketing/Waiting Room GL Retail Parking Garage GL Parking facilities shared with Amtrak. Joint Development Project Negotiations with selected developer were terminated. Site is offered in current joint development solicitation.

Prince George’s Plaza GL Mixed Commercial (office, retail)–Residential

Rhode Island Avenue GL Residential, retail (contract negotiations still in progress)

Shaw-Howard University Checkers Restaurant GL, SO Retail Howard University S Mixed Commercial (office, retail)–Residential (contract negotiations still in progress)

Silver Spring GL Multi-modal Transit Center (contract negotiations still in progress) Mixed Commercial (office, retail)– Residential

Takoma S, SC Residential, retail (contract negotiations still in progress)

Twinbrook (East & West) GL Mixed Commercial (office, retail)– Residential

U Street Parcels 1 and 9 S, SC Residential, retail Parcels 2 and 3 S Residential, retail Parcels 4, 5 and 6 S Residential, retail Parcel 7 S Office, retail

Union Station SCF Retail, major railroad station

Van Dorn GL Residential, retail

Van Ness GL Office, retail

Vienna SCF Office, residential

Western Bus Garage GL Residential, retail over new bus garage

Wheaton GL, S, SC Mixed Commercial (office, retail)–Residential (contract negotiations still in progress)

White Flint West S County Conference Center, hotel East GL Mixed Commercial (office, retail)–Residential

KEY: AR= air rights; GL= ground lease; S=sales transaction in which WMATA reserves the areas it requires for its facilities; SC=shared construction cost; SCF=station connection fee; SO=shared operating costs. (Source: WMATA)

232 purchasing more land than was contributor to transit funding, has necessary to build a new transit facility. slammed WMATA’s efforts as This was not a financial burden to ineffectual, especially with regard to WMATA since the federal government inner-ring developments. The transit- picked up the lion’s share of the tab. In agency staff identified the following as the end, WMATA was left with the obstacles to doing creative real-estate largest portfolio of land holdings of any development in a large bureaucracy transit agency in the United States. oriented more toward moving masses of people: Today, WMATA pursues joint development quite methodically. • A cumbersome, slow project analysis Station sites are carefully screened and approval process; according to a set of criteria that • Inadequate marketing of gauges development potential. For sites development sites; selected, an RFP is issued to solicit • Lack of community involvement; developer interest. Through • Lack of clarity of key business negotiations, a developer team is issues; and chosen and contracts entered into • An increasing tendency to build specifying the financial terms of the projects that are adjacent to, not deal. In 1996, WMATA tried a less- necessarily oriented to, transit judicious approach, soliciting (i.e., TADs not TODs). developer interest for virtually all stations—described by one staff These concerns have prompted internal member as an effort “to cast a big net organizational changes to clarify and see what sticks.” However, this responsibility for joint development proved to be too cumbersome, and the and integrate separate departments that agency has since gone back to a more often thwarted rather than facilitated selective review. development efforts. Next were the challenges of setting priorities for a Despite a record of successful joint small development team among a large developments that have buoyed range of potential development sites WMATA’s balance sheets, filled seats and clarifying business objectives on trains and buses, and won praise (whether augmenting revenues, throughout the United States, WMATA increasing ridership, or emphasizing has in recent years sought to reinvent TOD over TAD). To help target limited how it pursues TOD. Stinging criticism staff resources and board attention, by local observers, among other factors, WMATA engaged a private real-estate prompted this change of course. In view firm to conduct a portfolio market of the region’s exceedingly strong analysis of 24 available sites. A economy over the past two decades, classification was developed that matched by exurban sprawl, many have involved both market and public- felt WMATA could do more than it has intervention considerations. The 24 to guide growth in the region. Local sites were divided into three equal planners have often faulted the categories. Level 1 sites have agency’s glacial speed, and a former significant private-sector interest and governor of Maryland, a substantial will require little public-sector

233 intervention. Most of the sites are TOD concepts and pursue parking-lot surface parking lots, which developers infill possibilities. will need to replace, although the board is reviewing its policy to determine FTA’s new joint development policies whether a one-for-one replacement will also prompted changes in how be required. Level 3 sites, on the other WMATA goes about its business. hand, suffer from a lack of private- Before the policy changes, WMATA sector interest and require substantial entered into unsubordinated long-term public-sector intervention over a long leases because the agency would have period of time. The middle-range had to repay the federal treasury if land Level 2 properties show some private- that was purchased with FTA funds sector interest, but carry constraints due was sold. Lease revenues, on the other either to some hesitancy by the local hand, could be kept. Many developers, jurisdiction to move forward or to site however, were “lukewarm” about long- issues. The classification system helped term leases, preferring outright target agency resources toward near- ownership instead. With the new term partners and warn the board and rulings that allow an agency to sell participating governments about the land and keep the proceeds, WMATA extent of commitment required to has shifted to fee-simple sales, develop some of the more difficult something that has attracted stronger sites.3 developer interest. This has increased the pool of developers responding to In addition to a sharper focus on the RFPs and in so doing has made recent development potential of various sites, joint development deals that WMATA WMATA has developed its own TOD has entered into generally more guidelines, aimed at attracting new remunerative. riders, increasing revenue intake, and helping expand the local tax base. Some of the guidelines include One criticism leveled against WMATA’s joint development efforts • Maximizing the use of transit, not has been a lack of proactive community automobiles; engagement. Historically, the agency • Linking land use with transit has interacted directly with the (physically or functionally); development community, leaving • Providing a diversity of housing types; public participation matters to local • Emphasizing mixed uses in high- municipalities. This hands-off density developments; and approach backfired, however, in the • Creating special places. case of the Takoma mixed-use project slated for construction on WMATA This evolving focus on placemaking property. A community backlash over comes at a time when local planners the project design and the potential themselves are seeking to reinvent some impacts on housing affordability of the early ideas of TOD. The city of prompted WMATA to institute a Washington, D.C., developed a Mayoral program that actively seeks community Task Force on TOD in 2002, and input in the planning and design of suburban governments continue to refine future joint development projects.

234 Arlington County, Virginia: Arlington County’s Metrorail stations Three Decades of TOD Success has taken on a specialized function: Rosslyn, Ballston, and Crystal City serve Arlington County is arguably the as business centers; Court House has nation’s best TOD success story of the emerged as a governmental center (see past 30 years. Located directly across the Text Box 12.1); Pentagon City has Potomac River from Washington, D.C., become a regional shopping center; Arlington County attracts many visitors Clarendon functions as an “urban to sights such as Arlington National village” with shops and restaurants; and Cemetery and the Pentagon. Since the Virginia Square has a cultural and 1970s, it has also become an increasingly educational focus. Of the nearly 190,000 popular place to live, work, and shop due people living in Arlington County, 26% in part to high-density development reside in Metrorail corridors even though along its two Metrorail corridors: they make up only 8% of the land area. Rosslyn-Ballston and Jefferson Davis. A Since 1960, over 31 million square feet conscious decision by County planners, of gross floor area (GFA) of office space officials, and citizens to locate the and nearly 30,000 residential units have Metrorail along two major arterials been constructed in the County, and over (Wilson Boulevard and Fairfax Drive) three-quarters of this construction has instead of down the median of Interstate been in Metrorail corridors. Arlington 66 created opportunities for both public County today boasts one of the highest and private development. Superb percentages of transit use in the region transit access coupled with connecting with 39.3% of Metrorail corridor thoroughfares ensured that trains, buses, residents commuting to work by public automobiles, and pedestrians could transit.4 These are European-style transit easily reach neighborhoods that surround modal splits, reflecting the kind of stations. Since Metrorail began operating transit/land-use nexus found in some of in Arlington County in the late 1970s, Europe’s great transit metropolises, like it has become a popular origin and Stockholm, London, and Munich. destination for residents and visitors alike. Because of its TOD successes, Arlington County has become a paragon of high- Metrorail’s Orange Line runs east and quality, transit-oriented redevelopment. west, connecting the city of Rosslyn to In 2002, the EPA recognized Arlington East Falls Church, and the Blue Line County with a National Award for Smart runs north and south, connecting Growth Achievement. The County’s Arlington Cemetery to Reagan National initial transit-supportive built form owes Airport (see Map 12.2). The highest- a lot to the foresight of visionary density section of the Orange Line is planners, local leaders, and citizens who called the Rosslyn-Ballston Corridor; the helped prepare the County’s general Blue Line axis spanning Pentagon City land-use and station-area sector plans. and Crystal City is called the Jefferson Textbook planning principles were Davis Corridor. introduced to ensure that compact, mixed-use development took form Through a combination of strategic around high-capacity transit nodes. planning and market forces, each of Arlington County planners understood

235 Map 12.2. Arlington County, Virginia, with Metro Station Areas. Source: Arlington County, GIS Mapping Center, Department of Public Works. that Metrorail provided an unprecedented proceed unencumbered. The ability of opportunity to shape future growth and complying developers to create TODs proceeded to introduce various as-of-right was particularly important, for strategies—targeted infrastructure it meant that developers could line up improvements, incentive zoning, capital, secure loans, incur up-front costs, development proffers, permissive and and phase in construction without the fear as-of-right zoning—to entice private of local government “changing its mind.” investments around stations. After preparing countywide and station-area Arlington County’s ability to promote plans on desired land-use outcomes, and sustain growth for some 40 years is a density and setback configurations, and result of maintaining the original vision circulation systems, zoning classifications while adapting to the changing needs of were changed, and developments that its communities. The ongoing revision of complied with these classifications could plans, adoption of new policies, and

236 Court House Station: Leading by Example

Arlington County has spearheaded the planning of high-density development along Metrorail corridors. It is only fitting that the County’s governmental offices, courts, and police headquarters are located in the heart of the Rosslyn-Ballston corridor at Court House Station Area in the 1970s Court House Station.

The sector plan for Court House Station, which was adopted in 1981 and amended in 1993, designated the area as an urban governmental center with high-density residential and office uses. Court House Plaza, built in 1988, was selected as a focal point of the neighborhood. The Plaza is a pedestrian mall with 19 shops, restaurants, and a movie theater that can be directly accessed from the subway station below. The streetscape creates a pedestrian-friendly environment and provides pedestrian linkages to surrounding office buildings and residential complexes. The construction of a new Courthouse and Detention Center in 1994 completed the vision for an all-inclusive governmental center.

In more recent years, several technology-related firms have located in the Court House station area, creating a “Silicon Valley” of the east. High-tech and dot-com companies, such as Washingtonpost.com, Verizon, and Sapient, have major offices within the Court House station area. Today, there are over 14,500 jobs in the 200-acre Court House Metrorail station area.

Development around Court House Station is not limited to commercial and governmental offices. Since it is only a 5-minute train ride from Court House Station to Washington, D.C., the station area has become a popular residential location as well. From 1960 to 2002, over 5,400 housing units have been constructed. Currently, 1 residential uses occupy around 55% of the land within ⁄4 mile of the station. The 2000 Census reported 9,643 residents in the Court House area, constituting 5.1% of Arlington County’s total population.

Court House Station Area Today

Text Box 12.1 commitment to citizen participation in market-responsive land-use changes the planning process have allowed along the Metrorail corridors, and Arlington County to maintain an active elevating the importance of urban design portfolio of development activities along kept the GLUP relevant and garnered Metrorail corridors. steady political support.6 Likewise, the station sector plans have been included in County Plans the County’s plan-revision process. In 1989, the County Board initiated a mid- One key tool used to promote TOD course review of the Rosslyn-Ballston along Arlington County’s Metrorail Corridor to determine how well corridors was the preparation of a development outcomes matched the goals thoughtful, illustrative general land use set for each station and the County. At plan (GLUP). The GLUP set the broad that point, the many stations were 50% policy framework for guiding all built out. County officials wanted to development decisions along targeted gauge the progress and rethink station- growth axes. In addition, individual area policies. As a result of the review, sector plans were introduced that addenda to the Rosslyn, Court House, orchestrated development activities and Clarendon sector plans were 1 within the ⁄4-mile “bulls-eyes” of each approved. Arlington County’s successful Metrorail station. The sector plans review and revision of land-use plans specified not only land-use and zoning demonstrates the importance of ordinances, but also urban design, evaluating progress and adapting to transportation, and open-space changes while maintaining guidelines. Commenting on the a vision for TOD. importance of a station-area plan for Ballston, one Arlington County senior New Policies planner remarked, “The Ballston Sector Plan represented a change in thought Although land-use and sector plans have among County planners . . . a reduced been helpful in shaping development in bulk of development, streetlife, walking Arlington County, they have not links to the transit station—all were addressed all growth issues. For elements reflecting new thinking about example, housing prices and rents along what makes a livable community.”5 The the Metrorail corridors have rapidly careful, ongoing review and revision of increased over the past 30 years. the GLUP and sector plans has ensured Additionally, new development has that planning activities were up-to-date, encroached on open spaces and put some market-responsive, and in synch with historic sites in jeopardy. In response, changing community goals. the Arlington County Board adopted new policies to address these concerns. Between 1961 and 1996, the GLUP was revised eight times. Each revision In 1990, the “Special Affordable promoted higher-density development Housing Protection District” (SAHPD) along the Metrorail corridors while was created to retain affordable-housing maintaining lower residential density options within the Metrorail corridors. elsewhere in the County. Adding Instead of allowing new moderate- to “mixed-use” designations, introducing high-income residential units to replace

238 lower-income ones, the special district the importance of greenery, parks, and permits higher densities to ensure that other open spaces to quality of life, but the affordable housing is preserved or also led to the preparation of an Open replaced. The SAHPD policy was Space Master Plan as a part of the followed by the adoption of Housing Comprehensive Plan. The plan helped to Policy Principles in 1991. This policy protect, preserve, and enhance Arlington made affordable housing a top priority County’s natural environment. The Open for the County. The policy states that Space Policy has been credited with “a range of housing choices should be allowing TODs to reach the kinds of available to accommodate households of very high densities needed to sustain all income levels” and “affordable intensive transit services. High-rise housing should be an integral part of the towers gained acceptance more readily County’s land use, human service, and as long as other parcels were kept open capital improvement planning process.”7 for the general public to enjoy. In 2001, the County increased density bonuses from 15% to 25% to encourage Citizen Participation developers to include affordable housing units within their projects. Citizens, Public outreach and community planners, and elected officials of involvement have been a key part of Arlington County recognized that Arlington County’s TOD success. affordable-housing options were being Business partnerships and alliances, taken away by TOD and responded neighborhood conservation groups, and quickly to enact new policies aimed at individual residents are frequently maintaining housing options. The Twin invited to express their opinions. These Oak project, an 18-story, 320-unit groups influence the planning process residential development in Rosslyn, took through a number of forums, including advantage of the County’s desire for neighborhood meetings, workshops, and more affordable housing near Metrorail interactive web pages. stations. In order to replace the existing 55 garden-style affordable units with the Three public-private partnerships in the new high-rise tower, as was required Ballston, Clarendon, and Rosslyn Metro under the special overlay affordable- station areas serve as forums for housing zone for this Arlington site, the community and business-related developer, Washington-based Donohoe concerns. Ballston Partnership, Inc., was Companies, was successful in increasing created in 1985 to attract investors and the allowable density by more than businesses to the area. Several of the 100 units. This enabled the developer to partnership’s committees focus on issues provide market-rate and affordable units like urban design, public safety, and in the same new high-rise structure, set real-estate development. in a high-demand location.8 Arlington County’s citizens also have the Like affordable housing, open spaces ear of the County’s planning commission. were being depleted by TOD, especially The commission reviews the County’s along the Rosslyn-Ballston axis. In Comprehensive Plan (including the 1992, the County adopted an Open General Land Use Plan) every 5 years Space Policy that not only recognized and makes ongoing land-use

239 recommendations to the County Board. citizens a voice and power to influence It often holds public hearings to solicit changes in their community.9 feedback and input from citizens about development in the County. Development Trends

For some 40 years, the Neighborhood Arlington County has witnessed a Conservation Program has drawn phenomenal amount of development thousands of local residents into the near its transit stops in the past four planning process. Organized groups of decades, more than any transit corridor citizens, with the help of County staff, in the country (see Table 12.2). With are able to create and implement a sector plans to guide growth, stations Neighborhood Conservation Plan. like Ballston, Rosslyn, and Clarendon have functioned as powerful magnets, These plans, which usually address issues attracting mid- and high-rise office, like zoning and transportation, are retail, and residential development. adopted by the County Board and serve as guides for the Board and staff members Since 1980, total office space has doubled when making decisions about future to more than 50 million square feet, with development or land-use changes in a 70% of the office space located within the neighborhood. Over 40 neighborhoods two Metrorail corridors. Additionally, the have joined the program, giving those number of housing units in Metrorail

Table 12.2. Development in the Arlington Metro Corridors, 1960–2002 Office Gross Retail Gross Floor Area Floor Area (GFA) in (GFA) in Residential Hotel Metro Station Areas: Rosslyn-Ballston Metro Corridor Square Feet Square Feet Units Rooms Rosslyn Completed 7,827,779 663,856 4,620 2,125 Under Construction 0 4,268 383 0 Approved, But Not Yet Under Construction 895,243 29,778 585 160 Court Completed 3,468,361 161,879 5,401 580 House Under Construction 0 0 5 0 Approved, But Not Yet Under Construction 555,009 51,472 306 324 Clarendon Completed 459,126 223,941 504 0 Under Construction 196,831 33,806 616 0 Approved, But Not Yet Under Construction 105,317 85,488 308 0 Virginia Completed 1,271,614 66,749 2,455 45 Square Under Construction 315,352 27,059 0 0 Approved, But Not Yet Under Construction 416,425 9,602 499 0 Ballston Completed 5,721,138 840,076 5,914 430 Under Construction 563,720 39,827 412 0 Approved, But Not Yet Under Construction 901,263 30,076 596 336 Metro Station Areas: Jefferson Davis Corridor Crystal City Completed 10,558,784 800,135 5,833 4,601 Under Construction 0 0 0 0 Approved, But Not Yet Under Construction 1,092,062 181,653 215 828 Pentagon Completed 11,650,846 981,788 6,048 5,429 City Under Construction 0 0 319 0 Approved, But Not Yet Under Construction 0 0 0 0 TOTAL 45,998,870 4,231,453 35,019 14,858

240 corridors has increased from 5,700 to over County also attracts workers from other 35,000 over the past 40 years. The Rosslyn- areas: 80% of all employees live outside Ballston corridor has also emerged as one the County. High levels of external of Northern Virginia’s primary retail commuting into and out of a historically addresses (see Text Box 12.2) suburban county usually set the stage for automobile travel. Has Arlington Comparing development trends in County’s success at concentrating these Arlington County to the region at large “trip ends” around rail stations translated underscores the importance of transit as a into a high transit mode share? The next counterweight to sprawl. Figure 12.1 subsection addresses this question. shows that for the past three decades, the amount of housing in Arlington County’s Modal Splits Metrorail corridors increased two to three times faster than the regional population. Table 12.3 shows that 39.3% of From 1985 to 1989, the inventory of residents in Metrorail corridors office space built in the County’s commute using transit while 10.5% Metrorail corridors increased more than walk or bike to work. Overall, 6 out twice as much as regional employment of 10 commuters use an alternative (see Figure 12.2). Since Metrorail’s mode to driving alone. Among inception, Arlington County has become County residents living outside of a prominent location within the region in Metrorail corridors, only about 40% which to live, work, and run a business. of commuters do not commute alone. Jobs/Housing Balance Surveys from 1989 highlight the An important outcome of promoting ridership benefits of Arlington mixed-use development along linear rail County’s TODs. Residents of three corridors has been balanced jobs and residential complexes at the Crystal housing growth. Balanced growth City Metrorail Station used transit for ensures economic vitality and, as shown 48.5% to 62.2% of all trips. Also, 80% later, allows for efficient two-way travel flows. In 2003, there were 1.06 jobs for to 90% of trips to Washington, D.C., 11 every employed resident in the County.10 were by transit.

Having both housing and jobs easily Mixed land uses and pedestrian-friendly accessible by transit translates into higher designs can influence how users access ridership levels, as reviewed in Chapter stations. Only one station in the County— 6. In 2000, 40% of the county’s housing East Falls Church Station—has parking. units and 65% of jobs were within At others, most customers are expected Metrorail station areas. Figure 12.3 to arrive by foot or bus transit, helped reveals the commute patterns of along by a network of pedestrian ways. Arlington County residents and As shown in Figure 12.4, 64% employees in 2000. Almost one-third of transit patrons walked to and from of employed residents worked in the the Ballston Station in 2001. Fewer County, and 36% commuted to than one in five arrived by private Washington, D.C., the epicenter of the automobile; many of these patrons region’s vast transit network. Arlington were dropped off.

241 Retail at Metro: The Arlington Experience

In Arlington County, the Rosslyn-Ballston categories of furniture and home transit corridor offers an example of a furnishings, food stores, and hardware. In highly developed retail market with a addition, even though the corridor had a distinct transit orientation. Roughly half of diversified retail base, in terms of total the County’s 5.2 million square feet of dollars, over half of the retail sales in the retail space is located within this transit transit corridor were occurring at used- corridor. automobile lots and auto repair stores. Moreover, the success of the larger-scale retailers along the corridor depended on traditional retail factors, such as freeway access and on-site parking, while many of the restaurants struggled to expand their business beyond the daytime patronage from nearby office buildings. In short, while the Rosslyn-Ballston transit corridor had achieved a retail base, the study identified numerous opportunities to Rosslyn-to-Ballston Corridor further improve the vitality of the retail mix. Stores near the corridor’s seven transit stations range from major home furnishing and apparel retailers to grocery stores. The transit corridor also provides a wide array of local-serving retail and services, including 251 restaurants (60% of the county total), 79 specialty retailers (71% of total), 63 beauty/barber shops (50% of total), and 43 banks (56% of total). Although the mix of stores and services varies among the seven station areas, Market Common at Clarendon transit riders in the County truly enjoy one of the broadest sets of shopping options in A new mixed-use project, Market Common the United States.12 at Clarendon, exemplifies a retail concept that successfully integrates pedestrian- Despite these positive trends, a 1999 study friendly, transit-oriented design with analyzing retail sales and leakage patterns automotive access for regional customers. found that Arlington County (including the Opened in 2001, the first phase of Market Rosslyn-Ballston transit corridor) was Common has 300 apartments, 78 losing potential sales to neighboring cities townhouses, 234,000 square feet of retail and towns and that additional retail space, and 100,000 square feet of office development could be supported.13 space, all located within easy walking Arlington County’s “leakages” were distance of two Metrorail stations. particularly evident in the retail

Text Box 12.2 242 Retail at Metro: The Arlington Experience

The project, fully leased at opening, contemporary retailing within a mixed-use, features lifestyle and specialty retailers transit-oriented design, recent analysis by such as Pottery Barn, Barnes & Noble, the County’s Economic Development Williams Sonoma, and Crate & Barrel, Agency suggests that the previously along with “uptown” eateries like identified sales leakage in the home Bertucci’s and Ben & Jerry’s. A 1,200- furnishings and hardware categories has space parking garage supports the project. not dramatically improved.14 Their finding Market Common II, currently under suggests that while Arlington County has construction across the street from Market expanded its retail base near transit, Common, will add 64,000 square feet of additional opportunities remain. retail space, including 22,000 square feet of Challenges to achieving full retail potential front stores and restaurants, plus 150 include redeveloping used-automobile lots surface parking spaces. Market Common and automotive parts stores along II will feature Ann Taylor and Orvis Clarendon Boulevard, which contribute Company, among other big-name tenants. substantial dollars to the retail base, but do Retail in this new phase is already fully not contribute to a reduction in automobile leased, and the developer expects that orientation. In addition, the County must residential units included in this phase will continue to encourage innovative be highly marketable due to the urban, development projects that maximize the street-oriented ambience of the project. benefits of a transit location while balancing the reality of customers living in While the Market Commons project nearby residential areas who travel by demonstrates a refined blend of automobile to shopping destinations.

Text Box 12.2 (Continued)

40% Regional Population 35%

30% Arlington County Metro Corridors Housing 25% Development

20%

15% Growth Rate Growth

10%

5%

0% 1970– 1975– 1980– 1985– 1990– 1995– 1974 1979 1984 1989 1994 1999 Figure 12.1. Arlington Housing Development and Regional Population Growth Rates. Source: Metropolitan Washington Council of Governments, Round 6.2 Cooperative Forecasts (Arlington County Department of Community Planning, Housing, and Development).

243 50% 45% Regional Employment 40% 35% Arlington County Metro Corridors Office Space 30% 25% Growth Rate Growth 20% 15% 10% 5% 0% 1970- 1975- 1980- 1985- 1990- 1995- 1974 1979 1984 1989 1994 1999 Figure 12.2. Arlington Office Space and Regional Employment Growth Rates. Source: Metropolitan Washington Council of Governments, Round 6.2 Cooperative Forecasts (Arlington County Department of Community Planning, Housing, and Development).

As revealed by the ridership model In 2002, the five Arlington stations that presented in Chapter 8, an outcome of were most active were Rosslyn, Pentagon, concentrated growth along Metrorail Crystal City, Pentagon City, and Ballston, corridors has been higher patronage in that order (see Table 12.4). Retail, levels. Metrorail ridership in Arlington office and residential development at has risen by over one-third—an Pentagon City gave rise to more than a additional 22,000 daily trips, since three-fold increase in boardings since operations commenced in 1980. 1980. Other stations that attracted mid-

Arlington County Residents Arlington County Employees Figure 12.3. Arlington County Commuting Patterns. The left panel shows commuting patterns of the County’s employed residents. The right panel shows patterns for those working in the County. Source: Arlington County Department of Community Planning, Housing, and Development; Arlington County Profile, 2003; U.S. Census 2000.

244 Table 12.3. Arlington Commute Other Mode Splits, 2000 2% Other Bus and Commute Outside Vanpool No Response Mode Metro Metro 2% 1% (2000) County Corridor Corridor Metrobus Drive Alone 54.9% 40.5% 60.9% 14% Carpool 11.5% 7.3% 13.2% Transit 23.3% 39.3% 16.7%

Walk/Bike 6.3% 10.5% 4.6% Automobile At Home 3.4% 2.3% 3.8% 17% Other 0.6% 0.1% 0.8% Walk 64% TOTAL 100.0% 100.0% 100.0% Source: U.S. Census, 2000. Figure 12.4. Ballston Metrorail Station Mode of Access and Egress, rise, mixed-use development, notably 2001. Source: Arlington County Department of Court House and Crystal City, also Community Planning, Housing and Development. experienced appreciable ridership gains.

As confirmed by time-of-day statistics, a hours than other jurisdictions, with the benefit of balanced development has exception of Washington, D.C. Mixed been balanced ridership. Figure 12.5 land uses along the Rosslyn-Ballston shows that Arlington County averaged and Jefferson Davis Metrorail corridors higher shares of transit boardings and produced relatively high shares of alightings at its stations in off-peak midday, evening, and weekend transit

Table 12.4. Metro Ridership in Arlington: Weekday Boardings, 1977–2002

Weekday Boarding Ridership Growth th, 1980–2002 1980/2002 Nov Nov. Station 771977 1980 1980 1990 1990 2000 2000 2002 2002 Total Total Percent Percent

Rosslyn 11,167 12,752 13,565 14,672 14,816 2,064 16.2% Arlington Cemetery 140 362 1,102 1,759 1,825 1,463 404.1% Pentagon 10,558 16,123 20,687 15,548 14,136 -1,987 -12.3% Pentagon City 1,312 3,586 6,650 11,058 12,805 9,219 257.1% Crystal City 3,912 8,204 13,349 12,108 12,908 4,704 57.3% National Airport 2,479 5,605 5,657 5,039 4,784 -821 -14.6% Court House - 2,825 5,310 7,079 6,695 3,870 137.0% Clarendon - 1,899 3,078 2,752 2,935 1,036 54.6% Virginia Square- - 1,728 2,312 2,334 2,623 895 51.8% GMU Ballston - 9,352 9,531 10,450 11,214 1,862 19.9% TOTAL 29,568 62,436 81,241 82,799 84,741 22,305 35.7% Source ñ WMATA Ridership Counts Source: WMATA database, 1977–2002.

245 90% 80% 70% 60% 50% Peak Period 40% Off Peak 30%

20% 10% 0%

Percentage of Average Daily Ridership Fairfax Prince Montgomery City of Arlington District of County George’s County Alexandria County Columbia County Washington, D.C. Metro Areas

Figure 12.5. Percentage of Average Daily Ridership by Peak versus Off Peak and Locale, 2001. Source: WMATA, 2002 Passenger Survey Final Report. trips. Figure 12.6 further shows that demand means Metrorail trains are used numbers of station entries and exits in efficiently, an important benefit of Arlington County were nearly equal mixed-use TODs along linear corridors. during peak and off-peak hours. During the morning rush hours, many of the Another important travel-demand impact County’s Metrorail stations are both trip of TOD has been to keep traffic volumes origins and destinations. The absence of on major arteries more or less in check. a unidirectional, tidal flow of transit Table 12.5 shows that this has been more

35 30 25 Entries

20 Exits

15 10 5

Thousands of Thousands Passengers 0 AM Peak AM Off PM Peak PM Off Time Period Figure 12.6. Arlington County Metrorail Stations, Entries and Exits by Time Period. Source: Arlington County Department of Community Planning, Housing and Development.

246 Table 12.5. Trends in Average Daily main route past the Court House TOD is Traffic Volumes on Main Arterials a one-way couplet, which is a taboo in Near Ballston and Clarendon Stations the minds of New Urbanists. Also, the Ballston Clarendon Court House Station’s attractive Wilson Blvd Clarendon Blvd pedestrian corridors are internal to the Year East of Glebe Rd East of Danville St TOD, robbing roadways of an active street life. Efforts are underway to 1982 21,935 ---- change this through a combination of 1984 20,354 ---- traffic-calming, context-sensitive road 1986 21,178 3,835 designs, and sidewalk improvements. 1988 21,183 3,089 1990 25,087 12,037 Factors Behind Arlington’s Success 1992 21,179 13,286 1994 23,173 13,293 Arlington County is an extraordinary 1996 23,064 13,793 success story, a high watermark in 1998 23,149 13,997 America’s relatively recent foray into TOD. Why did it work in Arlington 2000 22,350 14,790 Source: Arlington County Public Works. when other jurisdictions have tried and failed? Several key factors are listed below: or less accomplished on Wilson Boulevard serving the Ballston area, • where average daily traffic (ADT) has Textbook planning: Good hovered in the 22,000 to 23,000 vehicle planning—specific station-area range during much of the past two plans, density bonuses, as-of-right decades. Massive development during zoning overlays, and supportive the late 1980s generated a surge in infrastructure investments—played traffic; however, ADT on Clarendon an important role in achieving a Boulevard has generally stabilized since transit-supportive built form. the early 1990s. Good-quality transit Arlington County planners helped combined with market-rate parking write the book on American-style prices and traffic management has TOD and have over the years prevented the kinds of traffic woes often released new editions that reflect associated with TOD from materializing plan amendments, greater attention in settings like Ballston. to the needs of pedestrians, and a stronger accent on public amenities. Not everyone is happy with how roads • A receptive population: Since its have evolved near Arlington County’s development as a bedroom suburb Metrorail stations. Chris Zimmerman, a of Washington, D.C., in the New member of the County Board as well as Deal, Arlington County has the WMATA Board, recently remarked, attracted a progressive citizenry, “We got the land use ahead of the (at least by Virginia standards). transportation.” Many of the County’s Federal executives and those main roads serving station areas are working at nonprofits and more accommodating of high-speed international organizations that through traffic than pedestrians. The struggle with big-world problems

247 populate the County and are • Politics of collaboration: Arlington’s inclined toward good planning board members are elected at-large, and good governance. It is no on staggered terms and for long fluke that the fight against periods of time have been from the resistance to school integration same party, Democrat. Moreover, the in the 1950s in Virginia began County Manager is appointed by the in Arlington. Board, rather than elected, so there is • Location, location, location: not the usual tension that exists Lying just across the river from between legislative and executive Washington, D.C., and providing officials at the local level. Without the opportunity to build tall the usual politics of confrontation, it buildings with better views of the has been possible to put forward big- Capitol’s landmarks than were picture plans like TOD and stick available in the city, Arlington was with them over the years. Since all directly in the path of growth. As members serve at-large, they feel well-educated families flocked to less pressure to respond to particular Arlington and beyond, it became an constituent complaints and demands. attractive business location as well, NIMBY gripes about spot traffic with cheaper office space, more congestion tend to get less political parking, and an easy commute to airplay as a result. the District. • A manageable size: The County’s • A deteriorating corridor: Wilson physical size, approximately 26 Boulevard was one of the early square miles, makes it possible for access routes to Washington and, planners, officials, and citizens to like other early highway corridors, have a good grasp of the territory, was starting to show its age by the even in areas beyond their immediate 1970s, with automobile dealers and neighborhood. That has made it services, cheap motels, and dated stores. County planners realized possible to communicate the TOD that the corridor was ripe for vision to most in the community, redevelopment; otherwise, it would who can regularly visit and have been a suburban slum. The patronize many of the new coming of Metro provided an developments. • unprecedented opportunity for Good timing: Fortuitous revitalization. circumstances also had a hand in • Tax base potential: The upside of Arlington County’s successes. One revitalizing the corridor was the was the decision to extend the potential to expand the County’s Orange Line from its terminus at commercial tax base to fund schools Ballston to Vienna. Before the and other services desired by extension, the Ballston Station, like residents. Turning vacant, underused most rail terminuses, was surrounded and financially underachieving by a sea of parking and bus staging properties into prime real estate lined zones. When these functions moved the County’s coffers and made it the to the new terminus, large swaths of envy of Northern Virginia real estate became available to jurisdictions. support large-scale projects.

248 Arlington County is not just a story of detailed consideration in the formal the past. More TOD possibilities lie Alternatives Analysis phase, the ahead. There are 14 million square feet Council of the District of Columbia of commercial space and 22,285 housing requested fiscal impact projections units that can be built before the associated with future development in Metrorail corridors reach their each corridor. development capacity.15 Arlington County’s commitment to TOD will The economic development analysis allow the county to sustain growth for contributed to rerouting some of the another 30 years to come. corridors to enhance their potential economic spin-off. One route, initially Transit and Economic Development in proposed to run east-west via Florida Washington, D.C. Avenue and Benning Road, NE, was re-routed to use the H Street, NE, WMATA and the District of Columbia corridor, reinforcing the District’s have recently joined forces to tie ongoing focus on revitalization of this Metrorail investments to economic historic business district. Other high- development objectives. In a recent priority corridors emphasized evaluation of nine potential transit connections across the Anacostia corridors in the District, consideration River, linking neighborhoods east of was given to total ridership, mobility the river with the economic engines of of transit-dependent residents, downtown Washington and the “constructability,” connectivity to the expanding waterfront business center existing Metrorail system, construction near the Navy Yard. Table 12.6 lists costs, and traffic impacts. More TOD projects already constructed or unusual was the inclusion of economic under construction in the Washington, development criteria for transit corridor D.C., area. Activity has become so evaluation. Explicit weighting was brisk that the District has hired a TOD given to supporting the city’s economic planner to work full time in helping to development and neighborhood shepherd these and other projects revitalization goals. forward.

Stanmore Associates and Bay Area Columbia Heights Redevelopment Economics inventoried and mapped the District’s ongoing economic The opening of the Metro’s Green Line development and revitalization efforts has led to significant new private and to identify linkages and potential public investment. The last portion of economic benefits of alternative transit the Metrorail system to be built in corridors. The evaluation gave priority Washington, D.C. linked several low- to transit corridors that would bring income neighborhoods to the downtown private investment to some of the city’s and other employment concentrations. economically depressed neighborhoods. The improved accessibility has greatly Within each station area, development increased the demand for middle-income potentials were identified and growth housing in neighborhoods such as Shaw, projected. To assist in its selection of Columbia Heights, U Street, and high-priority corridors for more Petworth. These historic neighborhoods

249 Table 12.6. TOD Projects in have been largely bypassed by private Washington, D.C., 2003 investors for decades. Now, traffic Project Total Size Use(s) gridlock, shifting demographics toward (square feet) more childless households, and growing Department of 1.4 million Office interest in urban living have increased Transportation the demand for housing in rail- Headquarters accessible, in-city neighborhoods. Station Place— 1.2 million Office Security and (when Exchange complete) District of Columbia leaders place a high Headquarters priority on neighborhood revitalization, Southwest 2.5 million Majority building the Reeves Municipal Center at Waterfront office, 400 14th and U Streets, NW, investing in residential affordable-housing developments, units, & 100,000 sq. assembling development sites, and ft retail upgrading the public infrastructure. GSA Federal 422,000 Office, Columbia Heights has emerged as one Building some retail of Washington’s up-and-coming DC USA 500,000 Retail neighborhoods, with extensive private Gallery Place 1.1 million Mixed use, nearly renovation of historic rowhouses as well equal parts as new retail and entertainment venues office, to the south along U Street, NW. retail, & residential The 14th Street corridor that defines the (192 units) Jefferson at Penn 616,000 Residential neighborhood is attracting new retail Quarter (428 investment in response to population downtown growth. After languishing for more than units), retail a quarter century, the historic Tivoli & new Theater is being redeveloped for retail theater Columbia 183,500 and Residential uses, live theater, and office space with Heights 224,000 with retail a new adjoining supermarket and Station/Columbia (respectively) (203 units townhouses. Heights Plaza & 206 units)— A $140-million retail development, DC 20% of units are USA, proposed for development in affordable Columbia Heights, will include a Target Ellington Plaza 178,000 Residential department store, a movie theater, big- (186 units) box and small retail, restaurants, and a & retail major public parking garage. The (15,000 sq. ft) 540,000-square-foot project is dependent New Convention 2.3 million Hospitality on a proposed $50-million funding Center and retail package from the District government. Source: D.C. Office of Planning. The D.C. Marketing Center reports that 152 housing units have been recently completed, with construction or renovation of 511 housing units currently underway and development

250 of another 572 units pending in the retail are planned for the other. The Columbia Heights Station area. District’s Council member for the U Street area, Jim Graham, recently U Street TOD reflected on the economic development potential of these developments: One of the strongest markets for residential development and the If everything that’s planned happens, cornerstone of the District’s economic we’re talking about 600 to 700 new development plan is the U Street residences. And all those people will Corridor. Serving the area is the U want pet shops and hardware stores Street/African-American Civil War and other retail opportunities, which Memorial/Cardozo Station. The area is will really mean the economic 16 best known for its many traditional jazz diversification of 14th and U. venues and is also becoming popular for its culinary offerings, with Montgomery County, Maryland’s restaurants offering cuisines from all Mature Business Districts corners of the globe. Among the “20- something” crowd, U Street is an “in” Bethesda and Silver Spring, in suburban place to live. Montgomery County, are both first-ring, inner-Beltway communities with mature Since 2000, some 275 condominium downtowns. Both have enjoyed a and detached single-family units have significant amount of retail and office 1 been built within a ⁄4 mile of the U development since Metrorail’s opening Street Station. Currently, four projects (see Text Box 12.3). with over 500 multifamily residential units are in various stages of The Bethesda TOD: An Exemplar construction. Most eyes are on the Ellington Plaza mixed-use project, Bethesda is the more affluent of the whose namesake is the neighborhood’s two suburbs, with some of the County’s favorite son, the jazz legend, Duke highest property values and incomes. Ellington. Slated for completion in Extending north from Georgetown, early 2004, Ellington Plaza will include Wisconsin Avenue runs through the 186 residential units and nearly 15,000 heart of Bethesda. The Metrorail station square feet of retail space. is on Wisconsin Avenue at the East- West Highway, Bethesda’s 100-percent WMATA owns two parcels near the corner. Immediately to the north are the U Street Station and through the RFP National Institutes of Health campus and process has entertained development the Naval Medical Center. proposals for both. Current plans call for continued housing development, with In 1970, as preparation began for the some ground-floor retail, on both sites. arrival of Metrorail, the County amended One project will transform existing its master plan by reducing the size of vacant lots and a dilapidated building the CBD boundaries to concentrate into luxury lofts, office space, and development. The plan also established a contemporary retail. Condominiums commercial transition zone to provide a with some 6,500 feet of ground-floor buffer between the core and residential

251

Bethesda Row: Mixed Use TOD Federal Realty Investment Trust Federal Realty Investment Trust Federal Realty Investment Trust Bethesda Row, Bethesda, Maryland. Source: Urban Land Institute.

An exemplary model of the benefits of private-public collaboration is the Bethesda Row project in Bethesda’s CBD. Bethesda Row is a large-scale, mixed-use redevelopment project on a site that covers seven contiguous city blocks and encompasses 13.5 acres of land. Currently, three of the four phases of the project have been completed, featuring 110,000 square feet of office space, 190,000 square feet of retail space, and 40,000 square feet of restaurants. The final phase will include art facilities, a movie theater, and possibly a residential component. The site is transit accessible, located within walking distance of the Bethesda Metrorail station. It is also pedestrian-/bike-oriented, as it is adjacent to the Capital Crescent Trail, a bike and pedestrian path.

Bethesda Row’s developers, Federal Realty Investment Trust, funded the project through REIT financing and by phasing the project to both decrease development risks and create enough cash flow to cover future development costs. Montgomery County provided a significant funding source for the project by constructing a parking garage in the middle of the site using parking district funds.

The developers worked with county planners to ensure that the project complied with the city’s downtown master plan, and the parties negotiated streetscaping designs as well as what the project’s assumed traffic impacts would be. The developers also met with members of the community to address some citizens’ concerns regarding the effect of national retailers on local businesses. The developers attracted a mix of local, regional, and national retailers to the project in order to resolve the issue.

The project has been a commercial and community success thus far. Office occupancy rate is currently at 99%, with annual rents running between $20 and $35 per square foot. The retail component includes 53 stores with average annual sales at approximately $400 per square foot. The central location and diverse entertainment and restaurant facilities attract office workers and residents from nearby neighborhoods as well as from surrounding communities.

Text Box 12.3 252 neighborhoods. Bethesda’s CBD sector surrounding neighborhoods encompass a plan was amended in 1982 to ensure that wide range of incomes, and the the projects approved within the city’s community benefits from a rich diversity core maintained a high-quality design of residents and employees. and complied with the community goals, including transit-oriented, compact In Silver Spring, as well as Bethesda, development. The amended plan office development led the initial private established public-facilities and design investment response to Metrorail’s standards for the approval of new presence. Several major office buildings projects within the CBD. The plan also were developed in both downtowns. provided developers with the option Silver Spring attracted the National of choosing an “optional-method” Oceanic and Atmospheric development. These projects are judged Administration. Due to its more based on a “beauty contest” in which favorable demographics, Bethesda planners evaluate the site plan and the developed a thriving restaurant district, proposed provision of public amenities. attracting diners from around the region. These standards ensure that the city’s Both downtowns benefited from the planning board has more control over the heightened interest in living near design and the public resource capacity Metrorail, with increased demand and available to accommodate new projects housing prices. Apartment buildings within the CBD. near the Metrorail charge premium rents, and close-in neighborhoods enjoy high Public-private partnerships have also occupancies. enabled the city to meet its planning and transportation goals. In the late 1980s, For the first 15 years of Metrorail the county enacted legislation service, Silver Spring’s office market authorizing the creation of an urban flourished while the retail market district in Bethesda in which properties faltered. The community experienced are levied a special tax to pay for public several false starts as developers services within the district. In the early attempted to bring major new retail to 1990s, the Bethesda Urban Public/ the downtown. In 1992, redevelopment Private Partnership was created to of the former Hecht’s department store control the distribution of the revenues into the City Place off-price retail collected in the district. development brought new movie theaters and retailers to the core, but the Silver Spring’s Emerging TOD project was not large enough on its own to stem the retail exodus. Montgomery The Silver Spring Metrorail station, County planners responded. They originally a terminus, was sited assembled and cleared large tracts of somewhat outside of the existing land for redevelopment of Silver downtown because of a decision to use Spring’s core. When Discovery the existing railroad right-of-way west of Communications decided to consolidate the core. Downtown Silver Spring was a its Bethesda offices into a single thriving business district in the 1950s structure, major County incentives drew and 1960s but later declined in the face the company to the Silver Spring of suburban mall competition. The Metrorail station (see Photo 12.1).

253 a new civic building and public plaza, a residential complex, a hotel, and a sports club. This downtown development, three blocks from the Metrorail station, is the culmination of years of revitalization efforts by the County as well as private investments. While the development is not physically tied to the transit station, the close-in neighborhoods and the business district’s office projects have all benefited from Metrorail service, creating the critical mass of both daytime and nighttime populations essential to Photo 12.1. Discovery Communications successful retailing. Headquarters, Downtown Silver Spring, MD. Rail to Dulles

The latest planned addition to the system The move from upscale Bethesda to is an extension to Dulles Airport, long-struggling Silver Spring did not go through Fairfax and Loudoun counties. unnoticed by the region’s development This is Northern Virginia’s technology community. Suddenly, Silver Spring corridor, one of the nation’s fastest- became a hot spot. Renovation of the growing and most prestigious business historic Silver Theatre attracted the addresses. Extending rail to Dulles has American Film Institute and been envisioned since the airport was Roundhouse Theater, providing a new built in the 1960s, thus right-of-way was generator of pedestrian activity. More preserved in the median strip of the than 20 years following the Metrorail Dulles Access Road. Airport officials opening, the Peterson Companies and felt that implementing the original plan Foulger-Pratt have entered into an would be a cinch, with right-of-way in agreement with Montgomery County place and relatively low construction for the “Downtown Silver Spring” costs. However, the price of the project development. The first phase of this ballooned when consideration was given mega-project includes a new Whole to intermediate station stops to serve Foods market; Strosnider’s Hardware; localities as well as the cost of direct and several small restaurant, retail, and access to the terminal itself. Once the service operations. The second phase, cost hit $4 billion, the localities, the currently under construction, will bring FTA, and even some of the sponsors several new restaurants, a state-of-the-art blinked. Various combinations of 20-screen Majestic Theater, Border’s stations, bus rapid transit, and light-rail Books and Music, Pier 1, other specialty technology have all been considered to retailers, new parking garages, and a new keep the project within a reasonable office tower to downtown Silver Spring. budget. Service to Tyson’s Corner, the The retail space is all oriented to the region’s most successful commercial street, emphasizing pedestrian access. district, and, in retrospect, a major The first two phases will be followed by omission in the original subway plan,

254 was central to the deal. However, County approved Moorefield Station Tyson’s spread-out form meant that it TOD with 9.75 million square feet of could require four to six stations, adding commercial space and 6,000 housing significant expense to the construction units in late 2002. cost and delay to airport passengers (see Photo 12.2). Terminating at Tyson’s An application for Preliminary would invoke the wrath of the Federal Engineering funds is pending with the Aviation Administration, which would FTA. It is expected that federal funds probably deny access to the Dulles would cover half the costs, with Access Road. Bypassing Tyson’s would landowners and the state sharing the save money, but would lose needed remainder. The financing plan for the ridership, political support, and forgo the project, however, unraveled in late 2003 opportunity to make the region’s premier when the Herndon Town Council, one of edge city more oriented to transit. the affected municipalities, vetoed a single tax district for the Dulles corridor A proposal adopted in August 2003 calls that was to have provided Fairfax’s for a downsized 11-mile extension from portion of the funding. Property owners the West Falls Church Station to the in Reston, which is not incorporated, and Reston area, a $1.5-billion first phase of Herndon feared that they could pay taxes an eventual 23-mile route to Dulles and for a project that might never reach that beyond. The first phase would have far west because the federal government four stations in Tyson’s Corner. might opt to withhold funding. This Some 15 million square feet of new financing plan is in part due to the defeat development is expected around these of a transportation tax in the 2002 stations, about half of it residential. elections that would have generated Fairfax County approved a Tyson’s II significant revenues for the Dulles rail TOD for 6 million square feet of mixed- project. While the media and some use in June 2003 and a high-density Virginia leaders claim the project is residential project in Tyson’s with 1,540 dead, Herndon officials themselves have dwelling units in early 2004. Loudoun been open to working with the Fairfax County, and advocates still believe local concerns can be addressed in time to get the project back on track for federal funding.

The painful process of retrofitting transit into an unabashedly automobile- dependent edge city will be an uphill struggle and is a reminder of the importance of bringing transit in at the early stages of growth, as was the case in Arlington County. (See Text Box 12.4.) Some hope that one day some of the Photo 12.2. Proposed Rail Station Site region’s outer-ring edge cities can take at Tyson’s Corner. Source: Dulles Corner on the appearance and ambience of Rapid Transit Project. Bethesda and Ballston.

255 The Design Challenges of TOD

While transit-oriented residences have become hot commodities in and around the nation’s capital, they often pose special design challenges. Architect-designers with Dorksy Hodgson + Partners, a national architecture and planning firm with extensive experience in the Washington area, recently outlined these challenges in an article in the spring 2003 issue of Multifamily Trends, a publication of the Urban Land Institute.

➢ Each project is unique. A Metrorail station’s location in relation to residential development, current vehicular and pedestrian flows, topographic conditions, and neighborhood character must all be given careful thought when a project is considered. TODs are not cookie-cutter projects!

➢ TOD on constrained sites. The 11-story Jefferson apartment tower with 14,000 square feet of ground-floor retail is nearing completion one block from the Clarendon Metrorail station in Arlington. Three roadways define the triangular- shaped site, presenting a unique mixed-use design challenge. Key site design issues were placement of the front door, garage, service entries, and main retail spaces. A constraint was transformed into an asset by incorporating “place-making” architectural features at the three corners of the site, including roof structure design elements, accent lighting, and a public plaza with a clock tower at one corner. While being near transit is one of Jefferson’s draws, some visual and functional separation is necessary to ensure residents’ privacy. Accordingly, an entrance and lobby separate from street-level retail were built, and the project’s interior features amenities reserved for residents, including an outdoor pool and health club.

Constrained Site of the Jefferson Parcel, Near the Clarendon Metrorail Station. Three major roadways — Washington Boulevard, Tenth Street, and Highland Street — converged to form a difficult site for a TOD. Smart design treatments allowed a mid-rise transit-oriented apartment to take form.

➢ TOD density through design—thereby, heading off NIMBY backlash. NIMBY has formed impediments to TOD even in metropolitan Washington. What works best there, as perhaps everywhere, is a proactive approach: identifying key leaders early in the process, arranging community meetings, and reassuring everyone that a structure will visually enhance the existing neighborhood. For the 18-story Twin Oak residential tower near the Rosslyn Station, a highly articulated, stepped structure was designed to minimize the project’s visual impact on an adjacent high- rise condominium; this design helped to gain the community’s approval for the project. Twin Oak also kept land open by undergrounding parking for 350 cars, providing generous landscaping, designing an open plaza, and adding ground-floor retail uses that serve the entire neighborhood. One TOD developer from the area has remarked: “For a residential transit-oriented project to succeed, it must be attractive, look substantial, and be appropriately scaled, with plenty of curb appeal—while keeping everything within budget.”

Text Box 12.4 The Design Challenges of TOD

➢ Mixed retail and residential design challenges. Many residential transit-oriented projects in the Washington area aim to create a 24/7 urban lifestyle and use street- oriented retail to energize a project’s pedestrian life while at the same time tapping into foot traffic to and from Metrorail stations. However, significant design challenges are often encountered. For instance, ground-floor retail needs greater floor-to-floor height (typically 15 to 18 feet) to be marketable, compared with the 8 to 10 feet between residential floors. That means the entire ground floor, including multifamily areas, must have higher ceilings, which increases project costs. Ground-floor restaurants pose problems such as where to put the exhaust shafts for kitchens. The exact size and location of restaurant space may not be known until leases are signed. Designers must thus allow exhaust shafts to be put in several potential locations, which can reduce net leasable space. Mixed-use designs can be further complicated by the need to accommodate the existing transit station’s surface automobile and bus lanes, subgrade transit lines, and pedestrian walkways while addressing each site’s geographic challenges and setback requirements.

➢ The parking conundrum. Parking can be a particular headache with mixed-use TODs. Designing a garage to accommodate the diverse parking needs of retail shoppers, office employees, and building residents can eclipse all other design challenges in complexity. While many workers and shoppers will take Metrorail, daytime parking spaces are still needed for others, with easy pedestrian and elevator access to the building. For residents, parking security is a huge concern. A garage might therefore require separate entrances for residents and shoppers. The Residences at Rosedale Park near the Bethesda Metrorail station required a unique solution. The project design includes six- and eight-story buildings on opposite sides of the street. The site configuration allows for only one entry ramp for a garage and service area for both buildings, mandating a common three-level, 300-atuomobile, underground garage that spans the below-street space between the two buildings.

Source: S. Silverman, “Designing the Urban Future,” Multifamily Trends (Spring 2003): 30–35, 54.

Text Box 12.4 (Continued)

TODs and Real-Estate and around Metrorail stations to sell and Market Performance lease for a premium. Empirical evidence bears this out. Given that the Washington (D.C.) Metropolitan Area enjoys one of the Even before Metrorail services nation’s best modern-day rail networks commenced, research had demonstrated and transit/land-use connections and that developers and speculators were given its relatively healthy economic bidding up land prices around stations in standing, one would expect real estate in anticipation of downstream profits.

257 Using hedonic price models, researchers convenient and walkable. They want from the Wharton School at the proximity to Metro, whether or not University of Pennsylvania found a they commute to work.21 significant price elasticity of –0.69 for commercial-retail properties within Because of its demographics of young 2,500 feet of Metrorail stations one year professionals and couples with no before the system opened (i.e., sales dependents, Washington, D.C., has one prices per square foot for retail parcels of the strongest urban apartment markets fell by 7% for every 10% increase in the in the nation. According to Gregory distance to a station portal).17 A 1983 Leisch, chief executive of Delta article in American Demographic Associations, a real-estate market chronicled Metrorail’s land-market research company based in Alexandria, benefits in the early years. Between 1979 Apartments located close to Metro and 1982, 77% of mixed-use projects, transit lines are in high demand and 54% of hotel rooms, and 58% of total command higher rents than those in office space were built in Metrorail suburban locations. Traditionally, station areas, most on sites that apartments have served as an entry commanded healthy rent premiums.18 for younger people, but now the Articles from the real-estate sections of market is also fueled by baby the Washingtonian and the Washington boomers seeking close-in locations. Post from the early 1980s had banner Affluent empty nesters also see headlines that proclaimed, respectively, rental housing in the city as an 22 “houses and condos near future Metro attractive lifestyle alternative. stations can be gold mines” and “value Public policies have also made building of land around Metro leaps dramatically housing near Metrorail stops attractive to in 5 years.”19 By one account, during its the development community. Most first 5 years, Metrorail had “increased counties in the region have reduced their the value of downtown commercial land parking requirements from the traditional in the District of Columbia by at least $1.6 1.6 cars per unit to just over one space billion and the value of land in Northern 20 per unit for residential projects within Virginia by at least $81 million.” 1 ⁄4 mile or so of a rail station. The resulting reduction in cost increases Fast-forward 20 years and pretty much the the project’s bottom-line returns. same story is being told. Jonathan Cox, vice president of the Holladay Given the Washington area’s rosy Corporation that built the Hartford demographic and economic outlook, Condominium project a block from demand for transit-oriented living, the Clarendon Metrorail station says, offices, and retail shops will likely remain solid for decades to come. Everyone in the Washington area realizes the value of Metro . . . The Worsening traffic congestion—the Hartford’s boutique condominium region ranked the nation’s second most was sold out last April—early in the congested in 2003 in terms of share of construction process. Our buyers daily travel in “rush hour” conditions— value living in an urban area where will only increase the demand to be restaurants and shopping are around Metrorail stations in years to

258 come.23 In the words of one Washington- continue to struggle with attracting the area developer interviewed for this right mix or, in some cases, any new study, “Today’s smart money is around development. Greater public Metrorail stops.” involvement and concessions are needed to make such projects work, with or Conclusions and Lessons without transit. In the case of the District of Columbia, the upscale projects in hot Because Washington’s Metrorail was neighborhoods are desired in more intended to influence regional working-class communities. Even in development patterns, it offers some generally prosperous Montgomery lessons on building TODs from the County, Bethesda prospers with a ground up. While TOD in the region is relatively light hand on the planning of a scale and scope that is much grander tiller, while Silver Spring requires hefty than elsewhere in the United States, public subsidies to help overcome the when stripped to the basics, the lessons ills of an inner-ring suburb. that the Washington (D.C.) Metropolitan Area has to offer are transferable to Retailing follows rooftops, even in a other places. One important lesson is transit-intense setting. While it is often an that planning cannot start too early. attractive component of a TOD, WMATA’s joint development program it must pencil out to retailers and began before Metrorail service opened. developers more interested in the amount Two entities, Montgomery and and mix of housing nearby than the Arlington Counties, embraced the transit transit connections. Most developers project as part of their long-range future insist that retail spending far exceed that and continued to refine their planning delivered through a transit connection and implementation strategies to create alone. Encouraging housing along a transit-oriented communities around transit corridor helps support additional major rail stops. Citizens became retail, regardless of how the shoppers get reliable supporters, elected officials got there. There are, however, special on board, and developers worked opportunities in which excellent transit earnestly to implement the policies. This access reinforces a superior trade area, as early understanding of the role of transit in the case of Pentagon City, a regional made it possible to adjust the location of mall that is able to tap into a strong routes and stations and justified the high market of shoppers and also get more costs borne in return for a highly than one-third of its business from functional transit/land-use nexus. Metrorail.

The market is also crucial. In the cases Increasingly, WMATA is viewing of Arlington and Montgomery Counties parking as good interim use. Some of the and the District of Columbia, Metrorail best development opportunities around was built through many locations that transit are on parking lots originally built were attractive for residential and for commuters. The impediment is that commercial growth, making them while in the eyes of the planners this desirable for high-density development is an interim use, in the eyes of the even without subway services. Other commuters and the transit agencies, it is locations, lacking such market appeal, essential and must be replaced. A staged

259 plan is needed to be able to develop such Notes accessible sites and to ensure that if replacement parking is required, it will 1 Washington Metropolitan Area Transit not be a barrier to such development. Authority, “Metro Transit Oriented WMATA’s recent efforts to proactively Development Program Marks a 26 Year History of Success,” press release seek community input into the joint (Washington, D.C.: June 20, 2002). development decision-making process should make parking-lot infill a more 2 Alvin McNeal, “Placemaking: Developing acceptable practice in coming years. One Town Centers, Transit Villages and Main Streets,” (presentation at Urban Land is struck by the rich and diverse palette Institute Conference, Reston, Virginia, of TOD that is taking form in the September 11, 2003). Washington (D.C.) Metropolitan Area. 3 Arlington County remains one of the Jones Land LaSalle, “Real Estate Portfolio Assessment” (Washington, D.C.: Washington nation’s premier examples of TOD, if Metropolitan Area Transit Authority, not transit-oriented corridors. Over the February 7, 2002): III-1. past 30 years, Arlington County officials, 4 planners, and citizens have joined forces U.S. Census of Population, 2000, Census Transportation Planning Package. Special to employ various tools to steer high- tabulations of journey to work data for density, mixed-use development along county defined zones in transit corridors. the County’s two major Metrorail 5 Arlington County Board, General Land Use corridors. Besides high tax yields from Plan (Arlington, Virginia: 1996). development that would have probably gone to other jurisdictions, high and 6 Planning Division, Arlington County Depart- balanced-flow ridership has been an ment of Community Planning, Housing and Development, “30 Years of Smart Growth: important payoff. Older suburban Arlington County’s Experience with Transit downtowns like Bethesda and, more Oriented Development in the Rosslyn-Ballston recently, Silver Spring are also Metro Corridor” (PowerPoint Presentation), undergoing a TOD facelift. Progressive 2003. Available at http://www.co.arlington. city and county policies, including va.us/cphd/planning/hotitems.htm. density bonuses and flexible parking 7 Meeting minutes from a meeting of the codes, have encouraged TOD in these County Board of Arlington County, Virginia, areas; however, market demand for a Saturday, March 16, 1991. Available at suburban Metrorail address also deserves http://158.59.15.111:10001/isysquery/ some of the credit. The nation’s capital ir14e9f/1/doc. has long had transit-oriented commercial 8 S. Silverman, “Designing the Urban Future,” development; however, what one finds Multifamily Trends (Spring 2003): 30–35, 54. today are numerous housing projects 9 Arlington County Board, 1996, op. cit. breaking ground that are taking 10 advantage of Metrorail’s proximity. Arlington County Department of Community Planning, Housing and Development, Traffic congestion beyond the Beltway, Arlington County Profile 2003 (March 2003). a robust and fairly resilient job market, See http://www.co.arlington.va.us/cphd/ and new downtown amenities are planning. creating a back-to-city movement that is 11 JHK & Associates, Development-Related boosting infill and redevelopment in the Ridership Survey II (Washington, D.C.: District and inner-ring suburbs, often Washington Metropolitan Area Transit near Metrorail stations. Authority, 1989).

260 12 Arlington County Economic Development, 19 M. Weiss, “How Close to Metro? Houses and A Current Assessment of Arlington’s Condos Near Future Metro Stations Can Be Community Retail Base, Issue Paper No. 2 Gold Mines,” Washingtonian, December (August 2003). 1980, pp. B-1–B-4; L. Simons, “Value of Land Around Metro Leaps Dramatically in 13 Bay Area Economics for Arlington Economic 5 Years,” Washington Post, January 24, Development, Retail Market Assessment of 1981, p. C-1. Arlington County Metro Station Areas and Commercial Districts (June 1999). 20 Simons, 1981, op. cit. 14 Arlington County Economic Development, 21 S. Silverman, Spring 2003, op. cit., p. 31. August 2003, op. cit. 22 Ibid., p. 32. 15 Arlington County Department of Community 23 See http://www.mobility.tamu.edu/ums. Planning, Housing and Development, Planning Information Report 55: Development Capacity in the Metro Corridors (2002). Photo Credits 16 E. Kretikos, “Spate of Projects Enliven U Street,” Washington Business Journal, Photo 12.1: Silver Spring Discovery Inc. November 11, 2002, p. 1. Headquarters Photo 12.2: Dulles Corner Rapid Transit Project 17 D. Damm, E. Lerner-lam, and J. Young, Bethesda Row photo: Urban Land “Response of Urban Real Estate Values in Institute Anticipation of the Washington Metro,” All other photos in Chapter 12 are from the Journal of Transport Economics and Policy, Arlington County Department of Community Vol. 14, No. 3 (1980): 20–30. Planning, Housing, and Development. 18 C. Baker, “Tracking Washington’s Metro,” American Demographer (November 1983): 30–35, 46.

261 Chapter 13

TOD and Joint Development in the Sunbelt: Miami-Dade County

Over the past half century, Florida has across the state of Florida, followed by grown at a faster rate than any other state an examination of TOD as a tool for in the nation, from some 2.8 million stimulating revitalization and community residents in 1950 to nearly 16 million in development in Miami-Dade County. 2000.1 As the nation’s fourth most populous state, rapid-paced growth has TOD in Florida heightened concerns about dwindling natural resources, mounting traffic Florida has an established history of congestion, and an overall declining pushing transportation issues to the quality of life. forefront of city and regional planning. The state has more municipalities with In recent years, Florida’s largest explicit “smart-growth” development metropolitan areas have been under codes than anywhere in the country, and increasing pressure to either restrict it is currently in the planning stages of future growth or implement plans an ambitious statewide high-speed rail that emphasize compact forms of system. Florida’s Comprehensive Plan development oriented towards transit. stresses the importance of urban and In particular, Miami-Dade County, downtown revitalization and encourages Florida’s largest and most densely both the expansion of mass transit populated region,2 has aggressively systems and the development of sought to encourage TOD. Miami-Dade infill sites. County’s efforts are notable in several respects: (1) a unique institutional Despite these intentions, efforts to framework that allows the County transit promote TOD as a growth management agency to take the lead on planning and tool within state agencies such as the zoning at transit stations and along Department of Transportation and the transit rights-of-way, (2) a heavy Department of Community Affairs have emphasis on transit joint development been slow. TOD is given only general and public-private partnerships, and (3) a acknowledgment in the Department of long history of viewing TOD and joint Transportation’s Florida Transportation development as important tools for Plan. Objective 3.1 of the Transit revitalizing inner-city neighborhoods. In Element of the Florida Transportation addition to increasing transit ridership Plan promotes TOD through “land use and reducing traffic congestion, TOD planning and urban design practices that has often been looked on as a catalyst for facilitate transit service and access.”3 The promoting private investment in Plan also calls for “transit supportive depressed neighborhoods and redressing strategies and standards” to be social inequities. This case study incorporated into state and local plans, provides an overview of TOD planning but it does not specify what those

263 standards might be. The only active legal structure under which these joint policy in the Plan suggests the developments may be entered and sets incorporation of easements for future some limits on the scope of potential transit projects into the Department of lease agreements. This legal framework Transportation’s right-of-way acquisition for TOD has been crucial for TOD processes. In the absence of concrete and planning and implementation in Miami- specific direction from the state, local Dade County. governments, in conjunction with some MPOs, have taken a more proactive Transit Planning and Joint stance toward implementing TOD. Development in Miami-Dade County

The city of Tampa has adopted Plan Florida’s most promising opportunities for 2015, which proposes developing a TOD are found in Miami-Dade County, major fixed-rail transit system for where relatively high densities have made Hillsborough County and Tampa’s public transit a viable transportation surrounding areas. Plan 2015 explicitly option. Miami-Dade County is also recognizes a “general area of influence” home to one of the most active local 1 of 900 feet to ⁄4 mile around each governments in Florida with respect to proposed station that, if located within both transportation planning and joint Tampa’s CBD, should create pedestrian development. Objective 7 of the County’s networks separated from vehicular 2001 Comprehensive Development traffic, have a mixture of uses, and deter Master Plan (CDMP) encourages automobile travel close to the station. development of a wide variety of The city of Orlando’s most recent residential and non-residential land Transportation Element also mandates uses and activities in nodes around that the city “seek opportunities for rapid transit stations to produce development around transit centers . . . short trips, minimize transfers, attract transit readership, and in an effort to encourage public transit promote travel patterns on the ridership” (see http://www.cityoforlando. transit line that are balanced net/planning/cityplanning/Policy%20Doc directionally and temporally to ument5c.%20Transportation%20Element. promote transit operational and pdf). The Element calls for a harmonious financial efficiencies.5 relationship between major transit nodes and surrounding areas. In these and other The CDMP prohibits uses that are “not Florida cities, concerted efforts are conducive to transit ridership” and underway to introduce codes and create specifies minimum densities for new incentives for TOD. development within various radii around the station area. Florida law also recognizes the ability of transit authorities to enter into lease Despite clear goals from the CDMP, agreements with private parties “for joint TOD in Miami-Dade County has met public-private transportation purposes with mixed success. The situation is best to further economic development in understood in terms of the institutional this state and generate revenue for landscape and market reality within transportation.”4 State law provides the which TOD occurs. Although the public

264 sector has been most directly responsible 27% from 1990 to 2002, compared for the presence of TOD in the county, with a national growth of around local governments have not always been 15% over the same time period. able to smoothly coordinate amongst Average monthly rental rates themselves. Varying intra-county market climbed by over 5% between 2001 conditions combined with preexisting and 2003. Vacancy rates in 2002 land uses account for the relative success held stable as well, hovering between at some stations and lackluster 2% and 4% for suburban, garden- performance at others. style rental apartments. Luxury apartment units in more urban TOD Market Dynamics settings average a higher vacancy rate, closer to 10%. Presently, around The scarcity of developable land in 9,000 apartment units are being built Miami-Dade County has prompted annually in Miami-Dade County, the developers to turn to infill projects. Across majority of which are high-rise urban land-use types, the following development infill projects (see Photo 13.1). opportunities exist in the County: Transportation Agencies in • Office: Despite a recent softening in Miami-Dade County the market for Class A office space in most Miami-Dade sub-markets, The County operates Miami-Dade the region’s role as a center of Transit (MDT), the largest and most international trade between the heavily patronized public transit system United States and Latin America has in Florida, and the 16th largest in the kept the office market fairly strong. country. MDT is responsible for the The current pipeline of planned and daily operations, safety, marketing, and proposed office projects includes maintenance of four systems: Metrorail, hundreds of thousands of square feet Metromover, Metrobus, and Paratransit. near transit stations, mainly in downtown Miami.

• Retail: The Miami-Dade market is buoyed by a relatively small inventory of retail space. Miami-Dade County has the lowest retail space per capita in South Florida and has not added a significant supply in recent years. Presently, there is a pipeline of retail projects planned or under Photo 13.1. New High-Rise Housing construction in Miami-Dade County Near the Brickell Metrorail Station in such as Merrick Park in Coral Gables. Downtown Miami. Hundreds of rental and for-sale multifamily units are • Residential: Demand for multifamily currently planned or under construction housing remains strong in South on infill sites throughout Miami-Dade Florida, due in part to strong County, with much of the action in and 6 demographic growth. The regional around Metrorail stops. population increased by more than

265 Metrorail, which opened in 1984, is a more in the pipeline, as summarized in 21-mile, elevated rapid transit system Table 13.1. that runs from the city of Hialeah Gardens, southeast through downtown Throughout Metrorail’s 19 years of Miami, and continues southwest into operations, ridership has been flat, and Kendall. Metrorail connects with the the system has been perceived by many regional Tri-Rail commuter-rail system as underutilized. The County hopes to at the Tri-Rail station in north Miami remedy this problem with a two-pronged (see Map 13.1). strategy: (1) extending the system by approximately 90 miles and adding To encourage TOD along Metrorail nearly 50 new stations and (2) targeting corridors, the County has sought joint new development along Metrorail development partners at 11 of the corridors. This strategy, proponents existing 22 station areas. To date, four hope, will create new opportunities for projects have moved forward, with eight joint development and TOD throughout the region.

People’s Transportation Plan

To support the County’s efforts to manage growth, reduce traffic congestion, and encourage TOD, voters in Miami-Dade County passed the People’s Transportation Plan (PTP) in November 2002. PTP raised local sales taxes by 0.5% and mandated that these revenues be used only for transportation and public transit improvements. PTP is projected to raise more than $140 to $150 million or more annually.

Approximately 75% of the surtax proceeds will flow into three programs: Metrobus service improvements, rapid transit improvements, and major highway and road improvements. MDT’s fleet of buses will nearly double, significantly increasing the number of service miles and routes. Some 90 miles of new track will be added to the existing Metrorail system, with the 50 or so planned new stations serving as catchments for “smart-growth” TOD.

Map 13.1. Miami-Dade Metrorail The PTP stipulates that no more than Lines. Source: Miami Dade Transit 5% of the surtax proceeds are to be

266 Table 13.1. Miami-Dade County Metrorail Joint Development and TOD Activities, as of 2003 Daily Station Area Boardings Status Comments

Okeechobee 1,568 In Process At least 150 units of affordable rental housing with some market-rate housing. Hialeah 1,139 NA NA Tri-Rail (a) 744 NA NA Northside 1,309 In Process Affordable and market-rate rental units, 10,000 sq. ft. of ground-floor retail. Dr. MLK, Jr. 817 In Process 172,000 sq. ft. of County office space and 13,500 sq. ft. ground-floor retail. Brownsville 562 NA NA Earlington Heights 897 NA NA Allapattah 1,200 In Process 128 affordable garden style rental apartments. Santa Clara 366 In Process 208 affordable rental apartments in a 9 story building. Civic Center 3,492 NA NA Culmer 663 NA NA Overtown/Arena 737 In Process 341,000 sq. ft. office building, 588-space office garage, 4,000 sq. ft. of retail. Government Center (b) 6,418 Completed Station feeds directly into a mixed-use office and retail complex. Brickell (b) 1,800 NA NA Vizcaya 836 NA NA Coconut Grove 1,067 In Process 407 market-rate apts., 150-room hotel, 41,300 sq. ft. of retail, 367 parking spaces. Douglas Road 1,952 Completed 2002 150,000 sq. ft. of County office space, 750-space parking structure. University 1,231 NA NA South Miami 2,325 In Process Mixed-Use with 20 market-rate rental lofts, 160,000 sq. ft. office, 20,000 sq. ft. retail Dadeland North 4,415 Completed 320,000 sq. ft. big-box retail, 9,600 sq. ft. TOD-retail, 48 apts. Mall opened 1994. Dadeland South 4,144 Completed 600,000 sq. ft. office, 35,000 sq. ft. retail, 305 room hotel, 3,500 parking spaces.

Total 37,681

Notes: (a) Metrorail / Tri-Rail transfer station NA = No Activity (b) Metrorail / Metromover transfer station Source: Miami-Dade Transit, 2003.

expended on administrative costs. All “representative of the geographical, of the municipalities within Miami-Dade ethnic, racial, and gender makeup of the County will split the remaining 20% of County” (see http://www.miamidade.gov/ the total surtax revenues on a pro rata trafficrelief/citt_selection_process.asp). In basis according to population, with addition to these selections, the mayor and monies expected to go to local ancillary the Miami-Dade League of Cities will improvements like bikeways and each appoint one member to the CITT, for traffic calming. a total of 15 members.

The PTP created two new County-level The second new transportation-related transportation entities. The Citizens’ department created after the passage of Independent Transportation Trust (CITT) the PTP is the County’s Office of Public will serve as an independent, Transportation Management (OPTM), nongovernmental decision-making body which is responsible for the planning, with significant powers over the engineering, construction, financial, and expenditure and use of surtax proceeds. management services previously under Each of the County’s 13 districts will have MDT’s jurisdiction. OPTM will also one representative appointed by a advise the CITT on how to spend surtax “Nominating Committee,” which, in turn, revenues from the PTP. In addition, will be made up of members who are OPTM will manage all joint development

267 property and leases. In effect, MDT gaining momentum as urbanized continues to be responsible for the daily portions of Miami-Dade County have operations of existing public transit become more attractive to private service, but OPTM will manage, investment: three projects have begun develop, and implement all new construction since 2001, and projects and system expansions. groundbreaking is anticipated at two more station areas in early 2004. In its first 6 months of existence, OPTM has prioritized service improvements and As practiced in Miami, joint development expansions, with such actions as imple- typically involves the transit agency menting free service on the Miami down- (MDT/OPTM) selecting a private town Metromover and free transit for all development partner through a Miami-Dade residents who are 65 years in competitive bidding process and age or older. The agency also purchased negotiating a long-term ground lease with 170 new buses, increased the number of that partner for one or more County- hours on 12 existing bus routes, and added owned parcels near the transit station. on 50 new routes. To date, OPTM has had As with other transit agencies across the limited new activity in joint development, country, joint development is seen as a in part because other tasks have been key revenue generator. Miami’s approach considered higher priorities. to joint development has largely been market driven; land write downs and Joint Development financial incentives have not typically been part of agreements with developers. An important component of Miami-Dade Moreover, joint development initiatives County’s plan to increase public transit in Miami have, until recently, not ridership and transit-agency revenues involved direct participation or input lies in the joint development of agency- of local redevelopment agencies, owned properties at or surrounding development authorities, or other Metrorail station areas. Miami-Dade’s local public agencies. first joint development agreement was in 1984 at the Dadeland South Metrorail Rapid Transit Zone Station (see Text Box 13.1). The first three stages of that development One tool that the County has used to included more than 600,000 square feet encourage private developers to engage in of Class A office space, 35,000 square joint development activities has been the feet of retail space, and a 305-room adoption of a rapid transit zone (RTZ).7 luxury Marriott Hotel. Despite this This zoning classification applies to all successful initial foray, other joint land and airspace deemed by the Board of development projects have been “slow County Commissioners as necessary for going.” The vertical “big-box” mall at the construction of fixed-guideway transit, the Dadeland North Station (1994) and including all stations. The RTZ does not the Miami-Dade Water and Sewer restrict any type of land use so long as it is Department Headquarters at the Douglas “appropriate and compatible with the Road Station are the only other two operation of the Rapid Transit System and completed projects. However, in recent the convenience of the ridership” (see years, joint development has been Miami-Dade County Code, Section

268

Joint Development at South Dadeland Station

The South Dadeland Station’s mid-rise skyline is the result of a joint development quid pro quo in the purest sense. The property is in a prime location, situated off of the U.S. 1 expressway and the southern Metrorail line, and it is within walking distance of the 1.5-million-square-foot Dadeland Mall, South Florida’s largest. In the early 1980s, on recognizing the property’s development potential, the Green Company approached Miami-Dade County officials about a possible joint public- private venture to develop the site. Following several weeks of negotiations, it was agreed that the Green Company would donate the entire property—about 6 acres in all—to the County while retaining all air rights. The company then negotiated a 99-1/2-year lease (55-1/2-year direct lease with an option for a 44-year subsequent renewal). The terms of the master lease are that the County is guaranteed a minimum annual income of $300,000 over the life of the lease—$200,000 from the Green Company and $100,000 from the Marriott Corporation. Over time, these amounts have been indexed to the Consumer Price Index. If the amounts are greater, however, the County receives 4% of gross revenues received each year from the office and retail rentals from the Green Company and from lodging and concessionary proceeds from the Marriott Corporation. Since the original pay- out in 1988, the County has been receiving well over a half million dollars annually in lease income.

The South Dadeland Station is also a notable example of cost sharing. MDT benefited in part by connecting the station directly to adjoining office towers (Datran I and II) and thus reducing some of the cost in excavating and building the station’s foundation. The station and adjoining building also share several facilities, including ventilation systems and auxiliary generators. Moreover, the developer and County jointly built and own the 1,650-space parking garage through a condominium form agreement, with 1,000 spaces belonging to the County and the remainder to the developer. In total, transit officials put the cost savings from the joint provision of these shared facilities at more than $4 million.

The office and hotel buildings at and above the South Dadeland Station have performed exceptionally well. The office buildings enjoy an occupancy rate of 95%. In 1997, Datran I received a “Building of the Year” award from the Building Owners and Managers Association. Also, the hotel presently has the highest occupancy rate (96%) in South Florida.

Text Box 13.1

269 33C-2, D-9a). RTZs do not have any amendment to the RTZ ordinance preexisting constraints, so the County may allowed the city of Miami to review the write the zoning codes after a project has CDMP and accept or reject it. However, been proposed. The RTZ ordinance the city was not given the authority to specifies that the County and municipality modify the standards as submitted. The shall jointly undergo a station area design Board of County Commissioners had the and development process to prepare ability to veto the city’s rejection should master plan development standards, but it the Board have found the proposed does not address what recourses are development to have “county-wide available to the city should it disagree necessity and significance” (see Miami- with the County’s vision for the site. Dade County Code, Section 33C-2, D- 10a) This process was written to apply The RTZ ordinance is intended to only to the Douglas Road Station area, lessen a project’s uncertainty by giving but planners at the city of Miami believe the developer a single jurisdiction to that the project has set a precedent for all work with instead of two or more (see future County joint development projects Text Box 13.2). In the case of the within incorporated areas. City planners Douglas Road Station area, an cited Allapattah and Overtown Metrorail stations as developments where the County ignored city requirements. Politics and the Development Process

A frequent theme that emerged in Staff at the Miami City Manager’s interviews with public officials and Office also expressed concern about the developers in Miami regarding joint city’s lack of control in determining development was the role of politics in locally appropriate land uses and design creating uncertainty and risk for private guidelines within RTZs. They cited a developers. For example, planners need for the city’s Office of pointed to at least two cases where Transportation to increase staffing in developer RFPs were issued, but then order to work more collaboratively with rescinded when the County Commission the OPTM and the developer in the elected to enter into negotiations directly initial station area design and with a not-for-profit Community development process before County Development Corporation (CDC). adoption of a site plan. Notwithstanding the important roles that CDCs have played in forwarding some All four of the Metrorail joint project joint development projects in Miami- developers interviewed for this case Dade County, the lack of certainty and study felt that the RTZ was an asset in consistency in soliciting private the development process. However, one development partners injects an element developer indicated that the flexibility of of risk into the development process. the RTZ ordinance did not completely This added risk, in turn, may discourage eliminate the uncertainty and risks of private developers from investing time building under two jurisdictional bodies. and money into pursuing joint He reasoned that because the RTZ development projects within the County. ordinance is amended to suit each

specific project, it can actually increase Text Box 13.2 uncertainty by not producing hard and

270 fast rules for developers to follow. are transit supportive, the urban fabric A municipality may also seek judicial surrounding transit stations is not review of the County Commission’s conducive to transit usage or the creation action, which can bring the project into of the fine-grain mixture of land uses a lengthy and expensive lawsuit. needed to create a vital urban neighborhood. Local TOD Incentives and Constraints TAD at Brickell In addition to RTZ tools and incentives, local jurisdictions, such as the city of The Brickell Station in downtown Miami, actively encourage development Miami is one of two stations on the in neighborhoods near transit even if they Metrorail line that directly connects to are outside the RTZ. Local incentives the downtown Metromover system. have mainly included reductions in Over the past several years, the area parking requirements and increases in surrounding this station has experienced permitted FARs or per-acre unit densities. substantial residential and office In addition, local development authorities development, in part because of the have been active in assembling land and exceptional accessibility it enjoys. providing infrastructure for sites near rail stations. These efforts, however, have met The Brickell sub-market has historically with mixed success, and in certain cases enjoyed one of the highest average asking have actually created a disincentive for lease rates in Miami-Dade County, and development. Extremely high permitted despite increasing competition from Coral densities (up to 1,000 dwelling units per Gables and other growing sub-markets, acre in some cases) in much of downtown Brickell currently leads the region in Miami have, until recently, contributed to construction activity with approximately a dynamic where market realities do not 470,000 square feet of new office space match the expectations of land investors. over the past several years.9 In addition, Thus, many large parcels have remained the proposed $90-million Mary Brickell vacant in the absence of viable develop- Village near the Brickell Station will add ment proposals that match permitted nearly 200,000 square feet of retail space densities and perceived land values. to Miami’s CBD.

Perhaps more importantly, there is a Development around the Brickell Station broad consensus across Miami-Dade has not, however, contributed to a County that local planning and urban dramatic increase in transit ridership, design policies near transit have not with the station averaging fewer than adequately emphasized the creation of 2,000 daily boardings. In part, this can pedestrian-friendly, transit-supportive be explained by the absence of an urban environments. In a recent article in design framework for the area, leading Planning Magazine, Miami-Dade to poor pedestrian connections between County Assistant Planning Director Lee surrounding residential high-rise Ralinson echoed this sentiment, stating buildings and the station. While newly that “there’s still a disconnect in the built and planned projects near the community between land use and station do have transit-supportive transportation.”8 Even where densities densities, the lack of improvements such

271 as comfortable sidewalks, safe street- parts of the city, and long-time residents crossings, and inviting entryways create moved away. Overtown was also heavily obstacles for pedestrians. This means affected by urban renewal and the that existing and planned projects are construction of two major expressways more “transit adjacent” than “transit (I-95 and I-395) that pierced through the oriented” in character (see Photo 13.2). heart of the neighborhood. Despite its historic roots and reasonably good Overtown: TOD and Inner-City location in the heart of the region, Revitalization Overtown has struggled to overcome a prolonged cycle of disinvestment and The construction of Metrorail in the decline. Today, the neighborhood has a early 1980s coincided with a period of population of around 10,000 inhabitants social unrest in Miami, spawned by and is often described as the “donut longstanding socioeconomic inequities, hole” in the middle of downtown racial tensions, and the neglect of many Miami.11 Indeed, Overtown is the inner-city neighborhoods. In this poorest neighborhood in the 4th poorest context, several Metrorail stations north urban city in the United States.12 of the Government Center Station, most notably Overtown, were viewed Against this backdrop, the planning and as potential catalysts for economic development of Metrorail’s Overtown redevelopment.10 Station in 1981 presented the neighborhood with an unprecedented Actual investment near Metrorail transit opportunity to attract new investment stations, however, has fallen far short of and restore vitality to the struggling expectations, and until recently joint commercial strip. The Metrorail station development proposals have been few was seen as an important means of and far between. The experience of the redressing past planning mistakes in the Overtown Station area just north of the neighborhood and of creating Miami CBD underscores the challenges opportunities for local economic that these station areas have encountered development. Aided by a federal Urban in linking TOD to community Initiatives Grant, a series of development and revitalization. redevelopment plans were prepared calling for high-density, mixed-use The Overtown neighborhood was development around the station. With historically the commercial center of the ability to accommodate up to 8,000 Miami’s City’s African-American patrons daily, the Overtown Station was community, achieving notoriety as an promoted in early plans as an important arts and entertainment hub in the 1930s. element in the area’s revitalization. At its peak, Overtown had a population Since no long-term parking was of over 40,000 and a thriving provided at the station, the creation of a commercial district along NW Second high-density, pedestrian-oriented Avenue. Following the end of Jim Crow environment was considered essential to laws and legalized segregation, the the station area’s success. Specific neighborhood suffered a period of objectives for the station area were not prolonged decline as local consumers elaborated in early MDT planning began to shop at retail outlets in other documents, but the following broad

272 Photo 13.2. TAD at Brickell Station. The Brickell Metrorail station in Miami’s CBD lies at the center of one of Miami-Dade County’s major hubs of office and residential development. Densities for residential 1 projects within ⁄4 mile of the station are, in general, in excess of 50 dwelling units to the net acre, and some residential blocks are considerably higher. Nonetheless, as pictured here, the Metrorail station does not blend particularly well with surrounding neighborhoods and is hardly “pedestrian scale.” Metrorail’s elevated structure casts shadows and forms visual barriers. The absence of ground-floor retail and services has diminished pedestrian traffic during off-peak hours, further detracting from the station area’s ambience.

273 goals for the Overtown Station area were seen limited new development and set out in a 1981 station-area profile: reinvestment, and the station itself has one of the lowest ridership levels on the • Promote the orderly use of land; Metrorail system (less than 800 • Maximize the development of the boardings per day).14 No joint area immediately to the west of the development has occurred on site and station; little has occurred off site. The many • Encourage the development of financial and planning incentives offered housing for mixed-income could not overcome Overtown’s stigma households; as an unsafe, high-risk inner-city • Stress the preservation of historic neighborhood in a state of decline. buildings and sites, rehabilitation of existing housing, and redevelopment In contrast to Overtown, just two short of blighted areas; blocks away, the Government Center • Create a climate conducive for Metrorail/Metromover station averages private investment and provide over 6,000 daily boardings and connects opportunities for minorities to directly to a major mixed-use office and manage and own businesses; retail development serving thousands of • Increase employment opportunities office workers, commuters, and shoppers and upward job mobility for (see Photo 13.3). Almost any major residents; destination near the Overtown Station, • Encourage residents to continue including the Miami Arena, can also be living in Overtown by promoting reached via Government Center. Indeed, home ownership and providing new placing the multimodal Government housing for low- and moderate- Center Station so close to Overtown cast income families; the die, marginalizing Overtown as a • Improve the delivery of human serious destination. Without a clear services and emphasize area security and a sense of community; and • Provide better transportation to employment and service centers.13

In the more than 20 years since these goals were established, few have been fully realized. It is not for lack of trying. Over the past two decades, the city formed a community redevelopment agency for the area, Overtown and surrounding areas were designated as a Federal Empowerment Zone, and myriad public and private planning efforts sought to promote investment and Photo 13.3. View of Government development in the area. Despite these Center Metrorail/Metromover Station efforts, the Overtown Station area has from the Overtown Metrorail Station.

274 advantage from a transit-planning or Partnership project will dramatically market perspective, the Overtown change the skyline of the immediate Station has, according to some, neighborhood, adding over 340,000 languished in obscurity. square feet of new office space (slated for County government agencies) as well as A further obstacle to revitalization has 4,000 square feet of retail shops and been a marked lack of coordination outlets. Proponents hope that this project, among the various agencies and along with two smaller residential projects organizations working in Overtown. For slated for the Overtown Station area, will example, the County ceded several finally bring much-needed transit-oriented parcels to the city of Miami in the 1980s growth to the neighborhood as envisioned on the condition that the land would be two decades earlier. developed within 5 years. Miami’s redevelopment agency, however, never Overtown’s ability to seemingly turn the sought to develop the parcels, thus tide has unleashed a new round of prompting a dispute between the city and interest in nearby development. Other County. This dispute, in turn, has stifled projects proposed for the station area efforts to secure public approval for a within the past year include proposed joint development project at the Overtown Station. • A 14-unit townhouse project sponsored by the St. Johns Despite past disappointments, the fortunes of the Overtown Station area Development Corporation, could be turning around in the wake of • several major investments proposed on An 80-unit single family home sites adjacent to the station. The most for-sale project sponsored by the important of these is a mixed-use office St. Agnes CDC, and retail joint development project with • OPTM and the Overtown Partnership, An affordable 40-unit single family Ltd., as major partners. This project for-sale project sponsored by the came about after an RFP issued by MDT BAME CDC, and failed to attract any submittals. Through an ordinance that allows the County • A proposed 1,300- to 1,500-unit commissioners to enter into development mixed-use development around the agreements directly with not-for-profit historic Lyric Theater. organizations, Miami-Dade County entered into an agreement with the Saint After decades of unmet promises, Agnes CDC for the development of a stagnation, and disinvestment, the arrival vacant lot owned by MDT adjacent to the of construction cranes and shiny new Overtown Station. Subsequently, Saint office towers is expected to finally Agnes entered into a limited partnership increase transit and foot traffic in the agreement with Taylor Development and Overtown neighborhood, providing the Land Company under the auspices of the kind of “eyes-on-the-street” environment Overtown Partnership, Ltd. When that is so essential in achieving a sense completed in 2004, the Overtown of safety, security, and comfortability.

275 Increased transit ridership will be a development opportunities. To date, bonus, although the creation of new jobs, however, none of the station areas have the opening of new shops, and a more undergone a visioning process or market attractive streetscape is what appeals appraisal to probe what types of land most to local residents and merchants. uses and community designs might be Such positive changes can instill civic desirable or feasible. pride, investor confidence in the neighborhood, and a sense of security Conclusions and Lessons Learned and well-being. In Overtown, TOD is today viewed through the lens of a much In interviews conducted with planners larger agenda of community building. and developers for this case study, a common sentiment expressed was that Future Plans and Activities Miami-Dade County is a region that has not come close to reaching its TOD The passage of the PTP in 2002 has potential. Like most of South Florida, significantly increased the County’s land-use patterns in Miami-Dade County immediate and long-range transit are largely automobile-oriented, and planning activities. For the immediate transit ridership is insignificant future, the OPTM will follow an compared with automobile usage. “evolutionary concept.” The agency will Moreover, major investments in transit add overnight service to various bus infrastructure have achieved mixed routes and Metrorail, hire more drivers results, with lower-than-expected for MDT’s expanded fleet of vehicles, ridership and limited clustered and investigate the feasibility of development outside of a few downtown improving major traffic corridors within Metrorail stations. Given the region’s the County before making high fixed- rapid rate of growth and emergence as cost investments. the de facto center of Latin-American culture and commerce, some observers Opportunities for joint development view the absence of the kind of TOD should increase dramatically in the long found in areas of comparable size in term as the County moves forward in its other parts of the country, even in fellow effort to more than quadruple Sunbelt cities like Dallas and Atlanta, as Metrorail’s coverage over the quarter- a missed opportunity. century. Already, two new corridors totaling 26.7 miles of new fixed- Notwithstanding past disappointments, guideway track are in the advanced there are signs that things could be planning stages. changing, due both to public policies and market forces. In the Brickell sub-market The new North Corridor is to run of downtown Miami, for example, directly north out of the existing Martin thousands of mid- and high-rise Luther King Jr. Station and 10 miles residential units have recently been built, along NW 27th Avenue to the Broward and more are under construction. It is County line. The OPTM believes that all unclear how much of this is attributable seven of the planned station areas will be to Metrorail’s presence and how much is able to accommodate some type of park- due to a larger gentrification movement and-ride facility and offer joint that is sweeping the region. Some

276 observers think more the latter than the jurisdictions. In the area of transit and former, noting that the addition of TOD, this has translated into County apartment and condominium towers in control over planning and land-use the Brickell district has failed to increase decisions along Metrorail guideways and transit ridership at the Brickell Station. at Metrorail stations. In part, this This could, however, be due to the lack centralized planning and zoning function of pedestrian amenities in and around the has facilitated TOD by allowing station and, as is widely acknowledged, developers to bypass multiple layers of a poor interface between transit and bureaucracy and public process. On the land-use planning in the area. other hand, planners and developers agree that this centralized planning As Miami-Dade County grows out of function does not eliminate the need to what many in the community perceive as work closely with local jurisdictions to an urban adolescence and takes on the ensure that land-use decisions and persona of a major international urban design guidelines are consistent with center, the region will have to wrestle community needs. To be successful, with the challenge of what to do with TOD must ultimately be responsive to distressed and long-neglected inner-city both broad market realities and the needs neighborhoods. The forward-looking of local communities. PTP, backed by a dedicated sales tax, embraces transit investments in general Notes and TOD in particular as important catalysts of community redevelopment. 1 Fannie Mae Census Note 02, Fannie Mae Experiences to date, however, suggest Foundation, April, 2001. that neighborhoods with stagnant 2 The County’s population in 2000 was economies and tepid real-estate markets 2,523,362, increasing by 30.3 percent from must often wait a relatively long period 1,937,094 in 1990. Miami-Dade County is of time (in the case of Overtown, over part of the larger Miami/Fort Lauderdale 20 years) for conditions to improve and MSA, but, for TOD planning purposes, the TOD to gain a foothold. Transit County rather than the broader region is the relevant geography for both demographic and amenities and vacant adjacent sites alone political reasons. will not ensure reinvestment in the absence of compelling market factors. 3 Florida Department of Transportation, For better or worse, big government 2020 Florida Transportation Plan, 2000. See http://www.dot.state.fl.us/planning/2020ftp/ subsidies also seem necessary to turn FTP_final.pdf. around neighborhoods like Overtown. 4 The 2002 Florida Statutes, Title XXVI, Finally, Miami-Dade County’s fairly Chapter 337. See http://www.flsenate.gov/ Statutes/index.cfm unique approach to governance could, over time, work in favor of TOD and 5 Miami-Dade County Comprehensive other smart-growth initiatives. Development Master Plan, Land Use Nationally, the area has been at the Element, 1999, p. I-13. forefront of the County-charter system 6 CB Richard Ellis, South Florida: Multifamily of government whereby the County Market Index Brief, First Quarter 2002. serves as a kind of coordinating MPO 7 Miami-Dade County Code of Ordinances, with broad powers vis-à-vis local Chapter 33C-2. See www.municode.com.

277 8 R. Knack, “Miami Bets on Transit,” Planning 13 Miami-Dade Transit, Design and Development Magazine, Vol. 69, No. 5 (May 2003): 20–21. Station Area Profile 10, June 1981. 9 CB Richard Ellis, Miami-Dade: Office 14 Three residential towers were developed near Market Index Brief, Third Quarter 2003. the Overtown Station in the Park West neighborhood in the mid-1980s, but this 10 This was borne out in interviews with public- development east of the station area has had sector representatives and staff at local CDCs. little revitalizing impact on the Overtown Public planning documents also refer neighborhood. heavily to the transit station’s importance in revitalization efforts. See, for example, Miami- Dade Transit Design & Development, Station Area Profile 10, Overtown, June 1981. Photo Credits 11 See http://www.miami.com/mld/miamiherald/. Photo 13.1. R. Golem 12 J. Little, “City of Miami Not Implementing Photo 13.2. R. Golem ‘Homeownership Zones’ Despite Assurances Photo 13.3. P. Peninger to Federal HUD in its Consolidated Plan,” South Florida Community Development Coalition, October 7, 2002.

278 Chapter 14

Chicago’s Transit Villages: Back to the Future for Historic Commuter-Rail Towns

Development is once again following decline and face problems like Chicago’s long-established commuter- remediation of contaminated sites. rail corridors as a growing list of Commuter rail also often depends on communities are returning to their automobile access to generate CBD- roots, pursuing TOD to revitalize oriented trips from outlying suburbs and downtowns that grew up around transit exurbs. Parking supply and design are (see Map 14.1). While the results have therefore critical issues at commuter-rail been impressive, Chicago’s experience stations. In addition, continuing freight is also a story about a few communities operations can constrain off-peak rail that have the resources, initiative, and service (and the types of trips that can be leadership to tap into the market for served) and can also physically impact compact walkable development around station-area development designs. transit. As the Chicago region continues to This case focuses on how TOD can be expand, some established inner-ring promoted in long-established commuter- suburbs have successfully used TOD to rail corridors—specifically, Metra rail exploit transit’s development capacity corridors in the greater Chicago region.1 and capture a larger share of regional With the revitalization of central growth. In redeveloping their historic Chicago, there has also been new downtowns, these communities have development around Chicago’s heavy- introduced amenities that provide a rail system operated by the Chicago competitive advantage with new suburbs Transit Authority (CTA). and have created a strong local and regional identity. In inner-ring suburban The design and service characteristics towns, strong local advocacy has been of commuter rail present different instrumental in leveraging TOD. Such challenges to TOD vis-à-vis light-rail communities have “rediscovered” assets, and heavy-rail systems. Light- and like charming historic rail stations, that heavy-rail systems typically enjoy high were already in their midst. levels of service in both directions throughout the day. Commuter-rail While several regional actors are active service, as the name implies, tends to be in promoting TOD in Chicago, the concentrated in the peak hours, with success of TOD has largely been due to service focusing on the downtown in the a strong regional economy and market morning and away from downtown in demand, proactive local leadership, the evening. Commuter rail often uses and successful coordination among existing freight railroad right-of-way and agencies. In the sections that follow, the tracks, which often flank industrial regional institutional landscape in districts. Many of these districts are in which TOD planning occurs is

279 Map 14.1. Growth of the Chicago Metropolitan Area. The region’s early settlement patterns followed commuter railroads like pearls on a string. The areas in between began to be settled as early as the 1920s; by 1990, the urbanized area stretched into 10 counties in three states. Reproduced with permission from: J. Grossman, A. D. Keating, and J. L. Reiff, eds., The Encyclopedia of Chicago History (Chicago: University of Chicago Press and the Newberry Library, 2004).

280 described, as are some of the tools that number equal to the growth during the various agencies are using. Some of the previous 20 years.2 While downtown region’s significant TODs are then Chicago has enjoyed something of a profiled. The case concludes with a “residential revival” in recent years, look at how TOD and local leadership growth continues to spill into the edges are playing out in the quest to develop of the region. In the next 20 years, the Chicago’s newest commuter-rail line region is projected to add 1.6 million along the Northwest Tollway. residents, 800,000 jobs, and 1 million new automobiles.3 Such trends threaten Greater Chicago Is Sprawling Out valuable open space and agricultural and Growing In resources. And ever-worsening air pollution and traffic congestion threaten TOD is being promoted on many fronts the economic health of the region. in greater Chicago. The region remains Table 14.1 outlines the primary reasons one of the nation’s fastest growing, and why various regional organizations are growth-related problems are also on the actively promoting TOD. rise. Between 1970 and 1990, nearly 450 square miles of farmland and open Chicago’s Multi-Layered spaces were consumed, an area twice the Institutional Landscape size of the city of Chicago. During this same period, population grew by only 4%. The Chicago region is a complex web of Between 1990 and 1995, 330,000 new over 270 municipalities and jurisdictions. inhabitants were added to the region—a Coordinating regional transportation and

Table 14.1. Regional Agencies and Organizations Promoting TOD Agency/Group Function Overview of Goals

Campaign for Sensible Coalition of government, Preserve open space, reduce new Growth civic, and business leaders infrastructure costs, provide multimodal in Northeastern Illinois choices, promote economic competitiveness and community revitalization. Chicago Metropolis Nonprofit organization Spend less time in traffic; live nearer to jobs; 2020 created by the Commercial protect open space; promote transit, walking, Club of Chicago to advocate and biking; provide economic opportunities regional planning for all residents. Northeastern Illinois Comprehensive planning Promote efficient development and Planning Commission agency for the six-county transportation, make good use of planned rail (NIPC) metropolitan area stations, contain sprawl. Metra Regional commuter-rail Make rail commuting more convenient, operator increase transit ridership. Regional Regional planning body for Increase transit ridership, improve Transportation CTA, Metra, and Pace neighborhood quality, increase political Authority (RTA) transit systems support for transit. Illinois Department of State transportation Promotes balanced growth, which can include Transportation (IDOT) authority TOD, to reduce traffic congestion, save farmland, protect natural resources, use existing infrastructure, reinvest in communities.

281 land use, therefore, poses a formidable challenge. Integrated regional planning took a big step forward, however, with the passage of an interagency agreement for Northeast Illinois in 2000 that clarified and built on earlier planning agreements.4 Prior to this agreement, determining who was in charge of even basic functions (e.g., local and regional population forecasts) was often problematic. The new agreement reaffirms that land-use and transportation plans should be coordinated, that land- use plans are to “lead” transport planning, that transportation is supposed to “serve” land use, and that agencies should work together in an open and collaborative process.

In this scheme, the Chicago Area Transportation Study (CATS) is the region’s designated MPO, primarily responsible for comprehensive Map 14.2. NIPC “Finger Plan” of transportation planning. The Northeastern 1968. NIPC’s first regional plan aimed Illinois Planning Commission (NIPC) to cluster new development in regional develops the regional land-use plan and centers along commuter-rail lines, the socioeconomic forecasts that CATS separated by “fingers” of regional green uses for its own planning.5 Finally, the space—akin to Copenhagen, Denmark’s Regional Transportation Authority (RTA) celebrated Finger Plan. Around this is charged with coordinating regional time, both the regional expressway transit services and developing transit system and local roads networks were investment cost estimates for CATS. expanded significantly, and the fingers Collectively, these agencies evaluate the rapidly filled with new development. effects of transportation plans on land use Source: NIPC. and the environment and adopt the RTP. On paper, then, a framework exists that is conducive to TOD. is able to “subtly” influence land-use patterns by developing the regional In actuality, implementing TOD remains population and employment forecasts as elusive as elsewhere in the United (which guide transportation investments) States. Ultimately, TOD is a local and through its review of facility decision, as state law grants zoning planning areas.6 That said, NIPC has no powers only to local cities and counties. implementation or enforcement powers, Despite having long supported TOD and thus its primary role is to advise concepts (see Map 14.2), NIPC’s land- local cities on growth and zoning issues use powers are quite limited. The agency and to provide technical assistance as

282 needed. To achieve its policy goals, zoning reviews, public-private planning NIPC tries to achieve consensus among to encourage affordable housing near its constituents and disseminates employment centers, and the creation of information about successful programs multi-community corridor plans. and projects, including TODs. Many communities are in fact NIPC supporters Communities in metropolitan Chicago’s and actively participate in regional- Northwest Transit Corridor have planning dialogues.7 Later in this received program funds to develop a chapter, NIPC’s current planning “TOD Toolbox,” featuring a TOD best activities and how it hopes to promote practices guide tailored to the needs of TOD in the future are discussed. cities along a proposed new Metra corridor, as well as other rail corridors in TOD Implementation Tools the region.9 In La Grange, program funds have gone to help the village To date, cities and towns in greater prepare a plan to invigorate the under- Chicago have used a variety of tools to performing business area near its West implement TOD, including development End Metra rail station. To date, however, bonuses, eminent domain, open market most program funds have been spent on purchases, site assembly, TIF, reduced downtown redevelopment not parking standards, and rezoning. These specifically related to transit (e.g., bike tools are discussed in the TOD profiles system plans and traditional economic that follow. In this section, some of the development studies). most important “macro-level” tools being used to promote TOD in Regional Tools metropolitan Chicago are reviewed. At the regional level, RTA has developed State of Illinois a Regional Technical Assistance Program (RTAP) to help cities develop While the state of Illinois does not have station-area plans and conduct public a statewide growth management outreach associated with TOD planning. program (like Oregon or New Jersey), it Since 1999, RTAP has contributed $1.8 has recently taken a more active role in million to TOD planning and outreach. promoting “balanced growth” in the RTAP also sponsors research and state. The Corridor Planning Grant workshops to trumpet the cause of TOD Program, administered by the Illinois throughout the Chicago region.10 Department of Transportation (IDOT), dedicates $15 million over 5 years to To date, RTA has completed 13 TOD help fund planning activities that studies. In the town of Tinley Park, RTA promote the integration of land-use, participated in TOD studies for two transportation, and infrastructure stations. At the Oak Park Avenue planning in major transportation Station, historic preservation, infill corridors.8 Examples of projects that are redevelopment, and enhanced pedestrian eligible for funding include the creation circulation were emphasized. For the of TOD plans, development of 80th Avenue Station, the study intergovernmental agreements providing recommended a new station with retail for multi-jurisdictional development and uses, improved local bicycle and

283 automobile access, buried utilities, and additional housing near the station. In both cases, recommendations are generally being followed. In the town of Elmhurst, extensive zoning changes were made, and pedestrian, automobile, and transit access was improved.

More recently, the village of La Grange has applied for RTAP funds to complement its Illinois Tomorrow funding to promote business and TOD development along the Burlington Northern Santa Fe railroad corridor. In Brookfield, Illinois, Tomorrow funds are being used to update the city’s comprehensive plan. At the same time, the city, which has no planning staff, is trying to promote TOD in portions of its three Metra station areas.

Metra

Metra is the region’s commuter-rail operator, providing service to some 150,000 daily riders. Metra provides service on 12 lines spanning 546 miles and 228 commuter-rail stations (see Map 14.3). The system’s hub is downtown Chicago. Approximately one- half of all commute trips to Chicago’s downtown loop are by Metra.11

Metra is a strong advocate of TOD. The agency has released three studies that promote TOD on economic grounds and inform constituents about implementation strategies.12 Metra has also developed an Map 14.3. Metra Commuter-Rail extensive database of proposed TOD System. Source: Metra. projects in nearly 200 communities based on a regional survey. While Metra does Metra owns some commuter parking, not formally require development review, although most is owned and controlled it has good long-term relationships with by local cities. Unlike many recent- local planning departments and generation heavy-rail systems, Metra has developers, who often approach Metra few large parking footprints. As older for advice and commentary. cities try to revitalize their downtowns by

284 adding development and making parking efficiency” of transit-accessible locations more convenient, Metra continues to when prospective homeowners apply for work in partnership with them to seek loans. Chicago’s LEM program has out creative parking solutions.13 probably increased the occupancy of some housing projects near transit stops, In some older suburban downtowns, but it has not been a strong factor behind parking has been distributed into multiple the emergence of TODs. decks not immediately adjacent to the station. In other places, shared parking TOD in Commuter-Rail Communities has been implemented. At the Schaumburg Station, for example, TOD is on the rebound in suburban parking is shared with a minor league Chicago. A growing number of baseball stadium. In Palatine, fairly communities along Chicago’s Metra extensive redevelopment and parking commuter-rail line are using TOD as part reconfiguration have occurred. There, a of a conscious strategy to reinvest in and new 1,150-space deck was constructed, revitalize their downtowns. According to including 850 commuter spaces. The local observers, a dozen or so stations old surface lot was converted into have active TOD initiatives underway. townhomes, condominiums and retail facilities. Also, a Starbucks coffee shop This section profiles three communities was in Palatine’s refurbished station. incorporated between 1879 and 1887: Arlington Heights, La Grange, and Advocacy Groups Elmhurst. In each instance, the community declined as shopping centers Several advocacy groups are also active sprung up in the 1970s and 1980s. in promoting TOD in the region. One Downtown plans were prepared in the mid-1980s linking transit to a broader of the most prominent groups is the downtown strategy, and proactive TOD Campaign for Sensible Growth (CSG), planning is beginning to pay off. Transit an umbrella organization of government, stations themselves are the centerpieces civic, and business leaders striving to of the renaissance taking place in many promote economic development, suburban Chicago communities as preserve open space, economize on outlined in Text Box 14.1. infrastructure spending, and promote neighborhood revitalization. CSG Arlington Heights promotes TOD by providing technical assistance to cities, developing public The village of Arlington Heights lies relations and educational materials, 23 miles west of Chicago on Metra’s conducting research, and promoting Union Pacific Northwest Line. Each legislative and policy changes.14 weekday, about 2,500 residents board trains at the village’s downtown station. In addition, the Center for Neighborhood Incorporated in 1887, Arlington Heights, Technology has been at the forefront of with about 75,000 inhabitants, has become developing and advocating the LEM Cook County’s largest suburb. program. Some Chicago-area mortgage brokers participate in LEMs, which Over the last 15 years, Arlington Heights acknowledge the “transportation has seized upon TOD as an integral

285

Development-Friendly Transit: Learning from Metra

Transit stations can be places to come back to, not just places to leave from. The new stations in La Grange, Arlington Heights, and Elmhurst nicely demonstrate this principle.

Planners and transit designers can learn much by looking at how long-established commuter-rail systems, such as Metra, have been integrated into the communities they serve. The challenge is to successfully balance two often-conflicting needs: accommodating requirements for bus transfer and park-and-ride facilities while creating a milieu that is harmonious with the adjacent community. The template for contemporary transit design—getting the parking, automobile drop-off, and bus transfers as close to the platform as possible—can be deadly for TOD.

Too often the result of contemporary transit design has been the development of “automobile-oriented transit systems.” Design decisions on accommodating the automobile as the primary mode of access have resulted in transit stations engulfed with parking that are loathsome places for walking. This often creates a chasm between the station and surrounding neighborhood and all but precludes the opportunity for TOD.

Metra’s experiences show that new and refurbished stations that are development-friendly need not interfere with transit’s functional and logistical requirements. With careful attention to detail, it is possible to accommodate the automobile, meet all of the transit needs, provide for TOD and still use the station to anchor wonderful, vibrant spaces that attract people.

The most striking difference between established Metra stations and more contemporary, sensitive designs lies in the approach to commuter parking. Metra parking tends to be dispersed to a number of small lots rather than to one mega lot. Arlington Heights commuters have 1,261 spaces spread over 6 lots to choose from; La Grange has 359 spaces on 8 lots; and Elmhurst commuters have 932 park-and-ride spaces distributed over 15 parking lots. The stations provide comfortable, human-scale environments, not dominated by parking, which serve to extend the walksheds. Commuters are creatures of habit; if the parking is located away from the station, they will still find it and use it. By dispersing parking, the communities and their transit stations happily coexist.

Text Box 14.1 component of the city’s award-winning decks (see Photo 14.1). In 1980, strategy to revitalize its historic down- 350 residents lived in the downtown in town. The village has created a 150 units. By 2000, the numbers had virtually new town center that includes jumped to 2,200 residents and 1,500 a new Metra station, a performing arts units. Since 1997, public investment center, high-density housing, of $27 million has leveraged some commercial uses, and public parking $225 million in private investment.

286 Metropolis Performing Arts Center

New Metra Station

Arlington Town Square

The Village Green

View from the Metropolis Lofts Metra Station Photo 14.1. Village of Arlington Heights. Through proactive initiatives, Arlington Heights has created a new town center that boasts a new Metra station, a performing arts center, high-density housing, several commercial uses, and public parking decks. The Metra station has truly become the community’s re-energized hub.

Currently in its “maturation” stage, the Arlington Heights has a long, rich village is increasingly relying on the tradition of city planning. The village redevelopment of underutilized completed numerous downtown plans commercial, manufacturing, and and studies in the 1950s, 1960s, and residential parcels close to the Metra 1970s. By the end of the 1970s, the station. A recent survey suggests that downtown was in a steep decline, due in 17% of downtown residents now use part to the opening of several nearby Metra as their primary mode of shopping malls that sucked the retail commuting (compared with 7% energy out of the core. To revitalize its for all of Arlington Heights).15 downtown, the village has introduced

287 the following: new zoning that permits tower, a key part of the strategy to create mixed uses and higher densities an 18-hour urban place. While the downtown, reduced parking condominiums have completely sold out, requirements near the rail station, and the and the residents have energized the establishment of two TIF districts. The downtown, many people complain that zoning revisions require first-floor retail the buildings are too high, given the uses in mixed-use buildings and allow village’s small-town character. This has buildings up to 140 feet in height. Also, prompted the city to consider future the village has used eminent domain height limits. The project also includes and open market purchases to assemble restaurants and national retailers such as sites and build new infrastructure GAP, Anne Taylor Lofts, Starbucks, and (e.g., structured parking). Moreover, California Pizza Kitchen. the village has provided project-based gap financing (i.e., subsidies), façade To make the project pencil out, improvement grants, business relocation Arlington Heights first assembled the assistance, and retail interior building site and then sold it to the developer grants to help offset interior finishing with a buy-back provision. Under the costs for new restaurants. arrangement, the village was required to buy back the land after 12 months if In the late 1980s, Arlington Heights the developer did not like the final completed its first major TOD projects— development deal; the village also had two mid-rise apartment buildings with an option to buy back the land if it did 614 units and ground-floor retail. To not like the developer’s program. In leverage the projects, the village addition, the village constructed the assembled part of the site and built underground parking for the project at oversized public parking decks next to a cost of around $30,000 per space. the apartment buildings. While Although costly, underground parking occupancy in the apartments has been reduced the building massing and freed strong, the projects’ retail portions have up land for open space. leased more slowly.

These buildings were followed by a Overall, the village provided much more ambitious initiative in the $13.9 million in public financing for the downtown core. At one point, three project, made up of $9.9 million for the major projects were in construction garage, $2.6 million for developer gap simultaneously, in addition to the financing, and an additional $1 million village’s own station renovation (all TIF funds) to underwrite land costs. project. The first of these more recent Before the project, the village took in projects, Arlington Town Square, $65,000 in annual property taxes; now opened in 2000, with 94 condominium it receives $1.5 million annually in units on 13 floors, 100,000 square feet property- and sales-tax income. of ground-floor retail space, 26,000 square feet of office space, and a six- The second major recent project, the screen movie complex. Metropolis Performing Arts Center, is another successful mixed-use project. The most controversial part of the It features a 310-seat, live performance project has been the 13-story residential theatre, 63 condominium loft units, 64,000

288 square feet of retail and office space, and were installed to unify the area. The 816 parking spaces in an adjacent public village-owned station itself is abuzz with garage. The loft units, priced below other activity, with a McDonalds, a bakery downtown units, sold quickly. To jump- cafe, and a Gateway Newsstand. Funds start this project, the village provided for the station refurbishment were $2.35 million in gap financing for the provided by six agencies, including theater. The village retains rights of first Metra, IDOT, and the village (which refusal should the owner seek to sell the used TIF funds). This project received a live performance theater.16 distinction award from CATS for CBD train-station design. The last major project, the Village Green, features three 8- to 10-story buildings The village manages the 2,180 parking with 250 condominiums, 53,000 square spaces used for retail, commuter, feet of retail space, and 17,000 square employee, and resident parking. Over feet of offices. Residential units cost time, the village has become more from $260,000 to $1 million, and many sophisticated in how it balances parking have been sold to empty nesters and among uses. Retail parking is free for childless professionals.17 The 10-story 3 hours, and permits are sold for the residential tower, the newest of the three, other uses. The village changes the has an attractive stone finish reminiscent parking mix in the decks regularly to of buildings in downtown Chicago and accommodate changing conditions. contributes to the emerging urban image of the entire downtown. Together, the In summary, the village of Arlington three residential projects have helped to Heights realized early on that it was not sufficient to just enact zoning changes to keep a big grocery store downtown that spur transit-oriented growth; it has been was considering relocating out of the proactive, introducing a host of public city. For this project, the village improvements—streetscape projects, contributed $8.7 million for land parks, parking decks—that have acquisition and gap financing. leveraged private development and paid off nicely. Critical to downtown redevelopment was the $4.7-million construction and According to Charles Witherington- relocation of a Metra station in 2000. Perkins, Director of Planning and By moving the station one block west Community Development, the following and the platforms two blocks west, rail factors have been vital to the village’s transit is closer to the downtown core, TOD success: and a large gap between the north and south sides of the tracks has been filled. (1) A clear vision; (2) A willingness to commit public The relocated site has substantially resources (TIF, aggressive parcel improved north/south access to the acquisition, and structured parking); station, made all the more attractive by (3) Strong and consistent local the addition of parks and public art next leadership (at both the staff and to the rail platform. In addition, brick political levels) that will take risks pavers, decorative lighting, and benches and stay with the program in the face similar to those used in the downtown of periodic criticism; and

289 (4) Continuity and dedication among Encompassing only 2.5 square miles, staff to execute the plan. La Grange has 15,600 residents.19 The village is a predominantly La Grange residential community with a thriving downtown business district. The The village of La Grange is located downtown has evolved into a regional 14 miles west of Chicago on Metra’s restaurant destination (with over 30 Burlington Northern Santa Fe Line. Each restaurants). With little opportunity to day, two stations generate about 2,400 expand, La Grange has made a boarding rides en route to and from concerted effort over the last 15 years downtown Chicago, about 37 minutes to make the best use of its existing away by rail. Incorporated in 1879, the assets, including the downtown rail village has a historic character and station (see Photo 14.2). appeal and a very walkable core.18 Like Arlington Heights, La Grange has less La Grange’s 1986 Master Plan provided freight activity than other Metra stations, the foundation for its downtown which instills a human-scale ambience. transformation.20 The Plan identified

“Triangle” TOD from Station

Refurbished Metra Station Downtown La Grange Photo 14.2. Village of La Grange. Over the past 15 years, the Village of La Grange has created a thriving downtown business district focused around a refurbished Metra station. Guided by a 1987 plan, the village used local initiative to acquire keys sites for two condominium projects and nearly 50,000 square feet of retail. Façade and streetscape improvements have helped attract over 30 restaurants to the downtown.

290 redevelopment sites in proximity to the performing strip mall, a fast food rail line, established a “transitionary” restaurant, and a 70-year-old dry- zoning district to allow a gradual cleaning establishment.23 These have conversion to higher uses, and created a been replaced by 78 condominium units, multifamily zone to increase downtown 45,800 square feet of retail space, and densities. In addition, the Plan 194 parking spaces. The village has established a TIF district, collecting the retained rights to approve the project’s tax increment on both real-estate and tenants and building design. sales taxes, to promote redevelopment throughout the core. To further entice As in Arlington Heights, rehabilitation redevelopment, the village has acquired of the downtown Metra station has and assembled land; run a façade loan further rekindled La Grange’s historic program (zero interest, fixed-rate loans past. Improvements included station for renovation, restoration, maintenance cleaning; tuck-pointing; interior and signage improvements to building redecorating; and lighting, safety, and façades);21 made streetscape access upgrades. The village assumed improvements (e.g., plantings and control of the station’s leasable space maintenance); and provided bike patrols after Metra paid for and completed the to enhance security.22 improvements.24

The first major redevelopment project Over the years, village planners have in the village was the 40-unit La Grange become very knowledgeable about Plaza condominiums, completed in parking, its relationship to the train 1995. For this project, the village station, and how to manage it. The assembled the site and sold it to the village has over 1,500 on- and off-street developer at 50% of the market cost. parking spaces and has good signage The village also made environmental directing drivers to multiple, relatively remediations to the site, formerly unobtrusive lots spread throughout the occupied by automobile-oriented downtown. Both Metra and civic/ facilities. All the condominium units government parking are shared with have been sold, and, as in Arlington restaurants in the evenings, and the Heights, most buyers have been village provides centralized valet over-50 empty nesters and under-30 parking on Friday and Saturday professionals without children. evenings, when high restaurant demand leads to shortages. In 2000, the village began its most challenging project, the “Triangle Elmhurst Redevelopment,” located north of the Metra tracks, where downtown The city of Elmhurst is situated 15 miles commercial activity was weaker than west of Chicago on Metra’s Union in the core to the south. For this project, Pacific West Line and generates about the village negotiated to acquire 1,800 daily boardings. Incorporated in 11 properties and assemble a site on 1882, the city has about 43,000 both sides of La Grange Road. The inhabitants living in primarily owner- site included older, low-intensity occupied housing. Like La Grange, the uses such as a bank, an under- downtown core area has an intimate

291 relationship with its Metra station and, public funding. Downtown Elmhurst today, is home to thriving shops, full- now boasts several three- to five-story, time residents, and an active night life. nicely designed residential infill projects. Located on an abandoned grocery store Downtown Elmhurst has not always site, the Market Square Townhouses been a thriving district. In the 1970s and (26 units) and Condominiums (48 units) 1980s, infrastructure was decrepit; an incorporate the local prairie-style at-grade railroad track obstructed traffic; architecture in high-quality construction. shopkeepers were flocking to shopping Many buyers are long-time residents malls; and many buildings were vacant, seeking smaller, easy-to-maintain as were streets.25 The city’s 1990 properties in town. Comprehensive Plan initiated much of the recent redevelopment, designating TOD Shaping New Commuter-Rail the area immediately north of the tracks Lines as the city’s primary shopping area, and that south of the tracks for mixed office Metropolitan Chicago is entering another and service uses. The commuter station era of rail building. The region has local area was to become the city’s hub, and federal funding commitments for a physically and symbolically. $1.35-billion rail reconstruction and expansion program, including 41.5 new To enact the plan, the city introduced miles of Metra commuter rail along the several zoning changes, including Southwest and West Corridors allowing mixed uses, having retail commuter-rail lines. directly front pedestrian streets, mandating street-level windows for retail TOD emerged as an important shops, reducing parking if shared with consideration in the competition to other uses, and locating loading zones secure Chicago’s newest transit line at the rear of buildings. along the Northwest Transit Corridor. Today, Elmhurst’s entire core is a TIF The corridor parallels the Northwest district. The city also grants low-interest Tollway (I-90) west of O’Hare loans (to renovate historic downtown International Airport and contains over a buildings). It also runs a façade million jobs and more than 600,000 assistance program that pays for 50% residents. Local mayors, through the of improvements (up to $50,000). Northwest Municipal Conference, have Landscaping improvements, like new embraced TOD as part of their strategy plantings in open spaces and the addition to build a local consensus and enhance of street trees to screen surface parking their chance of securing federal New lots, have created a quality walking Starts funding.26 Using funds passed environment. (See Photo 14.3.) through RTA, the Conference sponsored an interactive community process Since 1990, 25 projects have added about leading to the development of TOD 300 residential units and 140,000 square sketch plans for the corridor. feet of commercial space to downtown Development of the seven planned Elmhurst. Local officials estimate that transit villages along the Tollway would the city has leveraged nearly $17 in capture nearly 66,000 additional jobs private investment for each dollar in and 8,700 new dwelling units over and

292 Nine-Story Apartment near Station Market Square

Museum Place Rehabilitated Metra Downtown Infill Station Photo 14.3. City of Elmhurst. The rehabilitation of Elmhurst’s Metra station ignited redevelopment of the downtown. above what is provided for in existing decades old. Many are also in a state station-area plans (see Figure 14.1). of decline and turn their backs on their aging train stations. Also, there is an The Future of TOD in abundance of industrial land along Metropolitan Chicago suburban rail corridors requiring some level of remediation if new land uses The political and market forces that have are to be implemented. propelled the revitalization of rail-served historic downtowns over the last 20 years How much and how quickly TOD are likely to continue. Now that several spreads in Chicago will be governed by successful TOD projects have been several factors, including completed, “the word is out.” • The Market. Metro Chicago is Greater Chicago is ahead of many other experiencing TOD and sprawl at the regions in leveraging a new generation same time. Paradoxically, sprawl is of TODs in that many corridors are actually creating conditions already dense, and mixed uses are conducive to TOD. As growth common. However, many station areas leapfrogs outward, communities that are constrained in their development have been leapt over see TOD as a opportunities by local zoning that is way to re-center themselves and

293 evaluated the short-term impacts of Metra’s newest line (the North Central Service, opened in 1996), found that up to 30% of new homebuyers in some station areas considered the availability of commuter-rail services to be important to their purchase decision.28 Similarly, preliminary surveys in Glenview, a new TOD built on a former naval base, reveal that 35% to 45% of new residents are Metra commuters.29

• Rail Improvements. Metra has embarked on ambitious upgrades to Figure 14.1. Northwest Transit serve its growing ridership. The Corridor TOD Plan. Local mayors are agency obtained $2 billion in state placing a heavy emphasis on TOD in the funding from 2001 until 2005 to quest for Chicago’s newest commuter- expand reverse-commute services, rail line. Development of seven planned grade-separate tracks at road transit villages along the “STAR Line” crossings, and refurbish its rolling would provide the capacity to capture stock. Major new alignments are also nearly 66,000 jobs and 8,700 new being planned, increasing the dwelling units over and above opportunities for TOD. One project, existing plans. the 55-mile STAR Line, will provide north/south service between Joliet compete in a changing marketplace. and the edge city of Hoffman Estates Those policy aspirations are and east/west service from Hoffman complemented by punishing levels of Estates to O’Hare Airport (the traffic congestion that are prompting second corridor is known as the more commuters to choose housing Northwest Transit Corridor). A near rail stations. Chicago remains second “inner-circumferential” one of the nation’s most congested alignment will connect O’Hare regions, creating a ready-made Airport to Midway Airport. market for TOD. Several studies Collectively, these alignments have examined the accessibility will form a suburban rail grid to advantages of rail-served properties complement Metra’s successful in greater Chicago. One study by city-to-suburb radial service. Gruen Gruen + Associates, which looked at both Metra and CTA rail Land-use studies and planning for stations, found that beginning at these routes have already begun with 500 feet from a station, home prices participation and funding by Metra, fell by 1% with each additional RTA, and the state. Perhaps more 100 feet from the station, up to importantly, both studies have 5,300 feet.27 Another study, which obtained significant local matches

294 from cities in the corridors, which mentation authority. It is still too early have generally taken an active to assess the prospects for this interest in maximizing TOD ambitious plan. Even as the state opportunities (and would pay for legislature is considering a bill to new stations). Ongoing studies are study the proposed agency conso- consciously using land use as a lidation, turf issues are surfacing. “differentiator” in New Starts reporting, even as some districts At the same time, NIPC is currently in already have strong congressional the midst of its own planning effort, representation (and are likely to Common Ground, which consists of a receive earmarked funding). series of workshops, focus groups, and hands-on computer-based exercises to • Regional Planning. Up until recently, learn what people want the region to there has been little regional look like in 2030. The process, to be leadership on TOD, although this is completed by the end of 2004, will changing. Chicago Metropolis 2020, provide the foundation of a new a nonprofit civic-planning initiative regional comprehensive plan. To date, of the Commercial Club of Chicago, the process has been successful in recently unveiled a regional plan to engaging local citizens, elected implement TOD as part of a broader officials, private developers, minority framework to manage Chicago’s groups, and environmental advocates. increasingly automobile-dependent growth.30 Key recommendations of • Social Factors. TOD remains very the plan include growth focused on much an issue of available resources regional centers and TODs, removing in Metro Chicago. Cities that have a zoning barriers to TOD and mixed- strong tax base and funds to leverage income communities, modernizing tend to progress quickly, while less transit (using new funding), well-off cities do not. Affordable introducing bike- and pedestrian- housing remains a particularly friendly designs, and restoring the controversial issue. Some density environment. Furthermore, the plan and infill development are often calls for an Intergovernmental accepted, as long as they allow Growth Management Act allowing expensive, for-sale units. In for county-level “cooperation Arlington Heights and La Grange, councils” to implement integrated for instance, new units have been plans for transport, land use, primarily for-sale condominiums. In economic development, and resource the past, the Campaign for Sensible protection, and centralized state Growth and the Metropolitan Mayors planning spending via the Bureau of Council have tried to promote the Budget, to be consistent with affordable housing with little regional planning objectives.31 success. Metropolis 2020 Finally, the plan calls for the state recommends creating a state housing to merge CATS, NIPC, the Illinois act requiring all towns to provide a Toll Authority, and RTA into an range of housing options and all-powerful umbrella organization prioritizing funds to places that with land-use transportation imple- create workforce housing.

295 In other communities, density in preserve key land parcels for civic general remains a divisive issue. spaces and other uses. The mid-rise densities in Arlington • Heights are not viewed favorably Taking the Long View: Success did by some communities considering not always come quickly. In each TOD, prompting RTA and other community, the downtown agencies to focus discussions more redevelopment/TOD strategy was on design possibilities than on part of a master plan that the density per se. One instance in community had been pursuing for which NIMBY resistance led to 15 to 20 years. Patience and a down-zoning was in Olympia willingness to make short-term Fields, an exclusive community to sacrifices for long-term gains were important traits in several instances. the south of Chicago (the “Lake Forest of the southern suburbs”). • Continuity and Leadership: An There, a new town center was essential element in each community planned for 54 acres of greenfield was the ongoing persistence and under single ownership. A visual leadership provided by professional preference survey originally led to staff and elected officials. a sensitive conceptual design. However, after the locals got • Development Tools in Place: involved, a large surface parking Instrumental in leveraging TOD was lot was introduced instead, only the realization that achieving well- minor commercial/retail uses were designed, walkable, compact included, and the condominiums development in ailing downtowns and townhouses were replaced by would require public investment— a gated single-family community. assembling sites, upgrading public infrastructure, and rehabilitating Conclusions and Lessons older buildings. • Managing the Parking: Metro Metro Chicago’s experiences point to Chicago’s commuter-rail TODs the potential of using commuter rail, require good automobile access designed in a sensitive manner, in to be viable. Each community combination with supportive public understood the need to have a policies and targeted public investments comprehensive approach to the to leverage the revitalization and design, placement, management, rejuvenation of older suburban and sizes of commuter parking. downtowns. Common to the success of Where possible, shared parking was these efforts are the following: introduced to economize on construction and conserve land. • Transit System Design: A new or refurbished Metra station • Supportive Real-Estate Market: strategically located in the downtown Worsening traffic congestion and core jump-started private real-estate shifting demographics helped investments. Commuter parking was provide a ready-made market that sensitively located away from the each community was able to tap into platform to a number of small lots to for denser residential development.

296 Notes the Future,” (Final 2003 Program and Budget) November 2002, p. 3. 1 Other major transit providers in the Chicago 12 These studies are: (1) Metra and Northeastern region are the CTA, which provides regional Illinois Planning Commission (NIPC), heavy-rail and bus service, and Pace, which “Guidelines: Land Use in Commuter Rail provides suburban bus service. Station Areas: Guidelines for Communities” 2 Campaign for Sensible Growth, Growing (planning brochure), 2nd printing, April Sensibly, brochure (Chicago: n. d.). 1999; (2) Camiros, Ltd. and Valerie S. Kretchmer Associates, Inc., “Strategies: 3 Chicago Metropolis 2020, The Metropolis Local-Economic Benefits of Commuter Rail Plan: Choices for the Chicago Region Stations for Communities and Businesses,” (Chicago: 2003). See http://www. (planning brochure) Metra, Chicago, IL, metropolisplan.org/main.htm. April 1999; and (3) S. B. Friedman & Company, Vlecides-Schroeder Associates, 4 Chicago Area Transportation Study (CATS) and Nancy Seeger Associates Ltd., Policy Committee, “Resolution 00-01: A “Approaches: Residential Development Near Resolution Endorsing the Interagency Commuter Rail Stations,” (planning Agreement for Regional Planning in brochure) Metra, n. d., Chicago, IL. Northeastern Illinois” (March 2000). 13 5 Metra requires the replacement of parking that NIPC has jurisdiction in six counties: Dupage, it owns and established a parking committee Kane, Will, Cook, Lake, and McHenry. in 1987 to ensure that its riders are adequately 6 Approval of facility planning areas is required served as parking issues become more by the Illinois Environmental Protection important with increasing redevelopment. Agency before water and sewer services can Metra has worked closely with RTAP staff on be expanded into developing areas. several downtown redevelopment projects and continues to do so. 7 Created by the state, NIPC has no guaranteed funding base and operates like a private 14 For more information see (service for contract) consulting firm. Most http://www.growingsensibly.org. contracts are with the state and federal 15 Most trips are work trips; service is not governments and must be renewed frequent enough or late enough to serve non- continuously. NIPC also collects about work trips very well. The 7% figure is based $800,000 per year in voluntary contributions on analysis of the 2000 Census by Arlington from local jurisdictions, which is mainly used Heights Planning and Community to match state and federal grants. Development Department. The 17% figure is 8 This program is currently part of a broader based on Downtown Residents (mail) Survey Illinois Tomorrow statewide initiative, which in 2002, administered by the Planning and pulls together a variety of state programs Community Development Department. under a common focus: to encourage the 16 The purchase price would be reduced by the creation, expansion, and restoration of livable amount of the village’s financial contributions. communities in Illinois. For more information, go to http://www.state.il.us/ 17 Over time, downtown Arlington Heights has state/balanced/. become a desirable regional address for residential real estate, and the market remains 9 The TOD toolbox will establish corridor strong. planning standards for the planned Northwest 18 Transit Corridor. The village generally promotes high-quality development and has a nationally designated 10 See http://www.rtachicago.com/business/ historic district to ensure that homes are well planning.asp for more information about preserved and maintain their architectural and RTAP publications. historic significance. 11 Based on 1990 Census journey-to-work data 19 Per the 2000 Census, median income in the for the six-county region. Metra, “Securing village is $80,000 and the median home value

297 is $272,000. The village has about 4,000 27 Gruen Gruen + Associates, “The Effects of owner-occupied units and 1,000 rental units. CTA and Metra Station on Residential Property Values, a Report to the Regional 20 The Plan itself was based on a “State of the Transportation Authority” (June 1997), Area Report” completed by Camiros, Ltd. Northbrook, IL. (planning consultants), February 1985. 28 In most cities along the alignment, the service 21 The village has made approximately was too new to significantly affect 40 façade loans. The maximum loan is development patterns. Three communities, $40,000; a corner building with two façades however, have already implemented TOD could qualify for $80,000. zoning and designs—Centennial Crossing, 22 The village also sponsored a “traditional” Vernon Hills, and Prairie Crossing. Valerie S. Main Street program (e.g., business hours Kretchmer Associates, Inc., “Land Use coordination and shopper parking Impacts: North Central Service Impact reimbursement) throughout the 1990s, Evaluation—Phase II” prepared for Metra with limited success. The program was (June 1999). dependent on village staff and funding, 29 Data are based on Fall 2002 Origin/ which the village is too small to provide Destination surveys by Metra. (Metra on a full-time basis. periodically conducts surveys of selected residential properties to estimate rail usage 23 The dry-cleaning facility was a brownfield and mode of access.) At Railway Plaza, a site. EPA brownfield funds were secured to 417-unit development near the Route 59 do site cleanup, and “comfort letters” were station, Metra estimates that every 100 provided to let landowners know that there households generate 53 riders who walk to were no other contaminants on the site. the station. At the Spring Avenue Station 24 This is a fairly common arrangement with development in LaGrange, about 56 riders Metra, with whom the village retains a good per 100 households were found. working relationship. 30 The Commercial Club is the same group that 25 Downtown Elmhurst experiences lots of commissioned Burnham’s celebrated 1909 freight activity that often impedes traffic. Chicago Plan. This problem was partially rectified with the 31 The Campaign for Sensible Growth has also construction of a new vehicular/pedestrian advocated for a “State Office for Sensible underpass. Growth” to designate priority development 26 The Northwest Municipal Conference, a areas, establish clear funding priorities, and regional council of government formed in coordinate funding and permitting activities. 1958 is a membership-supported association representing a population of over 1.2 million. Photo Credits With 44 municipalities and 5 townships, the Northwest Municipal Conference unites an Photos 14.1, 14.2, and 14.3 were taken by G. B. area of over 300 square miles. Arrington.

298 Chapter 15

Dallas: Using TOD to Create Place and Value in a Sprawling Metroplex

Viewed from 37,000 feet, the Dallas motivator, and TOD is helping to create Metroplex (i.e., region) would not unique downtowns to attract growth that appear to be a strong candidate for TOD. would otherwise go to the sprawling Interlaced by freeways and dotted with fringe of the region. In Plano, TOD is sprawling subdivisions, mega-malls, and being used to revitalize a traditional other space-hungry land uses, the lay of downtown that flourished long ago. At the land does not seem particularly Mockingbird Station, Richardson, and inviting to transit usage. Addison Circle, new downtowns and commercial centers are mushrooming Unlike other regions, where the central upwards from scratch. In these places, city initially takes the lead role in sophisticated developers are building promoting TOD, the city of Dallas has multiple projects with multiple uses to largely adopted a “wait-and-see” provide “the full meal deal” within the approach to TOD. The TOD leadership station area. In all the places profiled in in this property-rights-friendly state, this case study, TOD is not just a where government and planning have collection of unrelated projects, but historically had relatively limited roles, rather is consciously being used as part has come from suburban communities of a “place-making” strategy. and the region’s transit authority. Regional TOD Players and Tools What has done most to kindle interest in Dallas’s growing (and increasingly traffic-choked) suburbs is the TOD DART serves the city of Dallas and success story at Mockingbird Station. 12 surrounding municipalities. DART North of downtown Dallas, the presently operates 44 miles of light-rail Mockingbird Station capitalized on service connections with 34 stations private developer initiative, a good site, and more than 130 local and express strong local demographics, and an bus routes (see Map 15.1). The light- abundance of adjacent regional rail “starter line” opened in 1996, and attractions. A TOD “sea change” has service was extended to Garland and occurred in the first-generation suburbs Plano in late 2002. Today, average of Richardson, Plano, and Addison, weekday light-rail ridership is about where committed local officials have 55,000. In addition, DART operates worked with savvy developers to the Trinity Railway Express commuter proactively plan and develop station line, which connects to Dallas-Fort areas. Whereas DART initially led the Worth International Airport and TOD charge, now local cities are. downtown Fort Worth. All told, DART moves more than 200,000 passengers In Dallas’s northern suburbs, a “fear of per day across its 700-square-mile being skipped over” is a primary service area.1

299 Map 15.1. DART Light-Rail System, 2003. Source: DART.

DART does not have a formal TOD station designs with DART engineers program (named as such), but promotes and local city staff. transit-supportive growth via economic development activities and programs. To promote TOD, DART employs a According to DART TOD specialists, variety of tools. With its board’s this gives them greater flexibility to get approval, DART can lease and sell involved in a broad range of projects that surplus property (e.g., underutilized could potentially affect DART ridership. parking) for affordable housing and TOD planners spend about half their other ventures. At the Arena Station, time educating cities and developers currently under construction, DART sold about the benefits of TOD via general its air rights (starting at 26 feet above publications and focused consultations grade) for 55% of the land value. The air and the other half coordinating detailed rights will allow the Arena to build over

300 the back one-third of the public plaza The North Central Texas Council of that will be part of the rail station. At the Governments (NCTCOG) has not yet 8th and Corinth Station, DART is in the developed a comprehensive, regional process of selling surplus parking to an TOD strategy, and because not all of its affordable-housing developer, pending member cities have light-rail service, it board approval. In other cases, DART “treads carefully” in this regard. In spite has proactively acquired surplus of this, the NCTCOG recognizes the property to one day be exchanged for value of TOD, and it has taken steps to station-area infrastructure (and good promote it. A recent issue of Regional TOD development). In the Plano profile Mobility Initiatives, a monthly report on that follows, the details of this type of the agency’s transportation planning deal are described. activities, discussed how to improve rail station access (particularly for bikes and In designing stations, DART pays pedestrians) and vehicle access and particular attention to station placement parking, as well as transit-supportive and bus and pedestrian linkages. At the designs, implementation strategies, and I-90 station, for instance, DART broke success stories.2 In addition, the the historic mold for how its transit NCTCOG’s Mobility 2025 Update facilities are laid out. In this case, embraces “sustainable development” as commuter parking and the rail platform the region’s new strategic approach to are separated by about 400 feet, whereas transportation planning, programming, in typical stations, they abut each other. and construction. The plan recognizes The commuter parking is located in the four categories of sustainable right-of-way under an elevated freeway development and calls for multimodal (covered parking is desirable in the planning support for them. The four Dallas heat), and the platform is across categories are strategic urban the street. DART strategically located development, integrated land-use the platform in the middle of a large planning/urban design, TOD, and development parcel that is under single access management. In a related step, ownership (i.e., a potential future TOD) the NCTCOG also established the and built a 400-foot pedestrian walkway Sustainable Development Fund, a fund of to provide a direct connection from the $24 million for the Dallas District of the parking to the platform. When it can, Texas Department of Transportation DART tries to locate stations in the (TxDOT) to pay for TOD improvements.3 “middle of the action” and locate TOD at the Cedars Station received transit support facilities at the edge of $5.8 million in CMAQ monies through activity areas. the Sustainable Development Fund.

Finally, DART also returns 15% of the TOD in Light-Rail Communities sales taxes it receives from cities through DART’s Local Assistance Program. The Greater Dallas stands out as an example funds can be used for a wide variety of of great divergence—a yin and yang in transit and congestion mitigation TOD implementation. Along the starter projects. Funding is discontinued when a line in the city of Dallas, market factors light-rail construction contract is are overcoming the lack of supportive approved within the benefiting city. public policy, triggering mixed-use

301 development next to transit at some Recalling trips to New York City and stations. A very different picture Europe during his youth, developer Ken emerges in the suburban communities Hughes consciously sought to tap into along the DART extensions where the transit system to bring the ambience market forces have been complemented and energy of those places to Dallas. by public-sector leadership, investment, When interviewed for this study, Hughes and supportive policies. remarked, “If you look at the chemistry in London, Paris, Mexico City, or Mockingbird Station wherever there’s mass transit, you find kinetic activity created by transit The city of Dallas provides a good stations. A little bit of that will happen example of how market factors and here with the trains.” private-sector vision, rather than public policy, can spawn large-scale Strategically located at the intersection development next to transit. Since the of Mockingbird Lane, a major east-west opening of the DART light-rail system arterial, and the North Central in 1996, more than $1.2 billion in new Expressway, the TOD abuts DART’s commercial and residential investment Mockingbird Station, the initial terminus has been constructed within walking of the 20-mile light-rail starter system. distance of DART.4 With the exception Light rail has since been extended to of the Cedars Project, this has happened both Garland and Plano, with without any subsidies, TOD planning Mockingbird Station sitting today at the or supportive policies by the regional confluence of the two lines. The project planning agency, the city of Dallas, or is linked to nearby Southern Methodist DART (along the starter line). University via dedicated shuttle service. It is also near the Katy (hike-and-bike) While there has been significant Trail and White Rock Lake, two regional development next to DART stations, recreational resources. Also nearby is the much of it has been “transit adjacent” well-to-do Park Cities neighborhood. and is not truly “transit oriented.” One Many of its residents patronize the notable exception is Mockingbird numerous retail and entertainment Station (see Photo 15.1). Located 4 miles offerings at Mockingbird Station. This north of downtown Dallas (a 15-minute has given the TOD a rather upscale train ride), Mockingbird Station is a ambience, which by national standards is mixed-use, urban “chic” village linked more the exception than the rule. directly to a light-rail station (after which it is named) via a welcoming The Mockingbird Station project was pedestrian bridge. The assemblage of initiated in 1997 when Hughes bought a offices, shops, restaurants, and lofts near 7-acre property with an abandoned the station cost around $145 million to Western Electric building on build, a substantial sum given that such a Mockingbird Lane. The three-story “product” had absolutely no track record brick/concrete building, built in 1947 as in automobile-friendly Texas. a telephone assembly plant, had high loft ceilings and was next to the planned This pioneering project has set the tone Mockingbird Station, but it was filled for other TODs in the Dallas Metroplex. with junk and covered with grease.

302 Photo 15.1. Mockingbird Station. Dallas’s Mockingbird Station was the first mixed-use project in Texas specifically designed and built for a light-rail transit sta- tion. It includes 211 upscale loft residences, 140,000 square feet of office space, and 180,000 square feet of destination and convenience retail, theaters, and restaurants.

Today, the bottom level of the was critical for the project as it enabled refurbished structure has 45,000 square 1,150 underground parking spaces to be feet of retail space (e.g., the Gap and built for future residents, workers, and Urban Outfitters) and is topped by customers and converted part of the four stories of new construction to existing six-story office parking garage accommodate 200,000 square feet of into 35,000 square feet of retail space apartments. Most of the half-century-old (housing Virgin Records). The office brick walls remain exposed, and the building was subsequently expanded to large jalousie windows were retained. 140,000 square feet. Below the office The building is topped with a distinctive tower and adjacent to the parking arched roof, recalling the bow-string structure are high-end retailers (e.g., trusses of the original building, a design Abercrombie & Fitch and Ann Taylor frequently employed in 19th-century Loft), posh restaurants, and outdoor cafes. railroad terminals. A 25-meter Olympic- standard pool is located on the roof. Rounding out the development is the eight-screen Angelika Film Center and In 1998, the developer purchased the Café, which features independently office tower next door (the Guaranty produced films. Its parking is Federal Bank Building), adding more underground. The building, located on parking and 3 acres to the site, giving the northwest corner of the site, is the project direct freeway access to directly accessed via the pedestrian complement the rail access. This purchase bridge that connects the development

303 with light-rail and bus service. Finally, have resisted the lower figure. a brand-name boutique hotel is also Questioning the parking standards could planned for the site, west of the film have been risky because there was no center and immediately east of the track record for such a development. Central Expressway. With the exception of federal The loft apartments, which first went contributions toward public on the market in 2001, rent for infrastructure, the development has been $900 to $2,700 per month and average 100% privately financed. The developer 1,200 square feet each. According to connected his project to the Katy Trail Hughes, rents are some 35% above and has spent over $600,000 for “comparables,” which is attributed improvements to public sidewalks and in good part to transit’s presence. landscaping. In addition, the developer Most tenants are 30- to 45-year-old paid $500,000 to bury existing above- professionals who can afford to own but ground utilities. prefer to rent. Six top-floor penthouses rent for up to $4,600 per month. The project’s only shortcoming is poor According to Hughes, many residents pedestrian connections across adjacent were living in downtown lofts but felt streets and highways. Sidewalks too isolated. “But primarily, they wanted surrounding the project are undersized, access to the train. We’re getting people discontinuous, and flank fast-moving who work in the Telecom Corridor that traffic. In the future, the developer and want to live close in and take the train the city would like to see Mockingbird to work.” Lane converted into a boulevard with raised medians, wider sidewalks, The Mockingbird project’s parking landscaping, and traffic-calming facilities do not reflect the presence devices. of transit, although not because of developer resistance. The project has Historically, the city of Dallas has made 1,400 parking spaces; two double bays no changes to its plans or zoning codes of parking for 150 cars are in the center to promote or allow TOD. For this of the project, and the rest is structured project, both land parcels were already or below ground. According to Hughes, zoned for mixed-use development, so the surface parking is not enough to there were no zoning obstacles to overwhelm pedestrians, but it is overcome. The most coordination with sufficient (and desired) to activate the public agencies occurred in designing project by creating movement. Hughes and building the pedestrian bridge estimates that he had to build $6 million linking the project directly to light rail. worth of excess structured parking for This required the developer to work the project. While the city gave the “hand in glove” with DART. As light project a mixed-use parking reduction rail was already operational prior to the credit, it refused to reduce parking project kickoff, there was no opportunity further to reflect transit’s proximity.5 to change the location of the station, The developer estimates he may have which sits in a deep below-grade trench only needed to provide 1,300 spaces, but and was designed to incorporate a future he acknowledges that some tenants may pedestrian bridge to the west.6 During

304 construction of the developer-financed Just south of the Cedars Station lies South bridge, workers had to take care to cover Side on Lamar, the primary catalyst of the and protect overhead wires and could area’s urban renewal. Developed by only work in 3-hour shifts so as not to Matthews Southwest, South Side on disrupt light-rail service. From the Lamar is a 10-story, mixed-use “live and bridge, elevators and escalators carry work” center that reused an abandoned passengers to the depressed passenger- Sears Roebuck & Co. Catalogue loading platform. In effect then, the Merchandise Center built in 1913 (see transit station, which includes a Photo 15.2). With over 1.4 million square Starbucks coffee shop, serves as the feet, the project includes 455 lofts; retail “front door” to the development. space (e.g., a coffee shop, a small grocery, and a dry cleaner); offices; and a The Cedars live performance space. Over 90% of the loft units are occupied, primarily by The Cedars, just south of downtown young professional couples and empty Dallas on the starter line, was once the nesters attracted to the district’s arts site of a large forest of conifer trees. focus. Around half of the commercial Over time, the area became one of space is presently leased. Dallas’s first suburbs (with numerous Victorian homes), but it later Matthews Southwest also opened a transitioned into a primarily industrial Gilley’s western bar one-and-a-half and commercial area. Today, proactive blocks from Convention Center, public leadership and developer the district’s 190,000-square-foot initiatives are converting abandoned entertainment complex based in industrial land and buildings yet again concept on the 1980s country music into a vibrant TOD with a strong “honky tonk.” Targeted at tourists, residential base.7 Four major projects are conventioneers, and Dallas residents, helping to bring the area back to life. the complex includes themed bars and restaurants, an amusement arcade, a Anchoring the redevelopment area to the rodeo arena, retail shopping, and a east is DART’s Cedars Station, which is high-tech recording space similar to served by both the Blue and Red Lines Austin City Limits. and provides short-term parking, bus bays, and bike racks on 2.2 acres. To the Rounding out development to date is north is DART’s Convention Center the new Dallas Police Headquarters, Station, where the Convention Center which adds a major employer to the recently underwent a 300,000-square- neighborhood. With 360,000 square foot expansion. The entire area is feet on 3.2 acres, it houses over envisioned as a commercial/ 1,300 employees and consolidates entertainment/hotel/residential district, 37 law enforcement functions into a with the corridor between the two DART single facility.8 stations becoming an “Arts Walk” and entertainment quarter that is attractive to DART has been active at The Cedars, a younger, more “bohemian” market successfully securing a $5.8-million than the market in Plano, Addison, or CMAQ grant from the NCTCOG for Mockingbird. pedestrian improvements, including wide

305 South Side on Lamar New Police Headquarters

South Side Rooftop Sign with Dallas Skyline in Background Photo 15.2. South Side on Lamar, Dallas. Located at the Cedars Station, South Side is the redevelopment of a 10-story abandoned Sears catalogue center into a 1.4-million-square-foot TOD with 455 lofts, 20,000 square feet of retail, and 100,000 square feet of office space. sidewalks, an Art Walk, landscaping, relatively affluent community with a pedestrian lighting, bike lanes, park primarily service-based economy.9 benches, and bricked walkways. The city During the boom times of the 1980s, of Dallas has also contributed $500,000 millions of square feet of campus-style through a Cedars TIF district for office space were built in Plano, quickly streetscape improvements and awarded transforming it from a rather quiet tax abatements for the Gilley’s residential community. Since the early development. Under the terms of the 1990s, Plano has sought to change course. 5-year abatement, the city will forgo The city has consciously embraced the 50% of the taxes assessed on the principles of New Urbanism and TOD in increased value of the existing property. hopes of transforming its downtown into The city also gave Matthews Southwest a a compact, mixed-use urban center. $22-million historic tax credit for Guiding its redevelopment program is a restoring the Sears building. vision of improving quality of life, providing a model of sustainable Plano development for maturing suburban cities, and creating a unique suburban Downtown Plano lies some 40 minutes identity for itself.10 north of downtown Dallas on DART’s Red Line. Covering 72 square miles and According to Frank Turner, Plano’s with 237,000 residents, Plano is a Executive Director of the Business

306 Development Center, the city has been formed in 1993, which allowed mixed- committed to its downtown, which has use development in the entire (80-acre) historic and symbolic significance, for downtown core. The new zoning decades. During the past 40 years, restricted the amount of surface parking Plano has witnessed explosive growth. that could be built, limited building (Its population was 2,100 in 1950.) heights to four stories (to distribute Suburban shopping centers sapped density), and required new buildings downtown Plano’s vitality as a retail to be next to the street. During this center. By the 1980s, the downtown’s period, the city also reconstructed key tenant mix had changed from retail downtown streets and implemented support (e.g., grocery, drug, and “historic” design finishes. While the hardware) to specialty stores opening of DART was still a few years (e.g., novelties and antique shops) away, the groundwork was being laid to that closed by late afternoon. The capitalize on a new light-rail station. downtown was dead at night, turnover was high, and absentee ownership led In 1995, DART revised its earlier plans to a gradual physical and economic to operate only special-event service to decline, which began to spread to downtown Plano, opting instead to build adjacent neighborhoods. In the regional a full-service, “destination” platform landscape, downtown Plano had become without any park-and-ride facilities.12 “the forgotten commercial center” of a DART and the city worked together once prosperous farming community. to strategically relocate the platform to bring the entire downtown BG 1 The city’s efforts to rebuild the district within ⁄4 mile of the platform downtown started in the 1980s with and to facilitate the city’s first major landscaping, streetscaping, and other redevelopment project, Eastside Village aesthetic improvements. A new (Phase 1). Properties to the east of the municipal building was constructed and platform consisted of an old shopping later expanded, and several derelict center and scattered deteriorating buildings were removed to expand commercial buildings. The city had Haggard Park, the historic “heart” of the previously acquired two-thirds of the City.11 While these improvements made block to clear for parking, but with downtown more attractive, they did not DART’s change in plans, the block attract much private investment. became an ideal candidate for redevelopment. In a deal between the A major milestone occurred in 1991 city and DART, DART used eminent when the city council approved a new domain to acquire the remaining one- downtown development plan. The third of the block, a portion of which plan’s overriding goal was to create a was required for the DART platform. compact town center utilizing New DART then transferred the balance of Urbanist principles. Specifically, it its property to the city in exchange for recommended expanding the downtown the city assuming responsibility for through infill and redevelopment reconstructing streets, drainage, and adjacent to historic commercial utilities needed to serve the platform. buildings in the core. A new business/ In essence, this was a “public-public government (BG) zoning district was partnership.”

307 The city assembled the entire site and in realize the city’s vision of a transit 1998 issued a request for qualifications village, create a sense of place, and (RFQ) for developers. In a selection perform well financially. Density was a process that solicited inputs from major bone of contention throughout neighborhood residents and merchants, the process. Local officials and citizens Robert Shaw’s new development reviewed preliminary designs for company, Amicus Partners, was selected 4 months and, in 1999, supported from the four companies submitting their increasing the site’s allowable density qualifications. Prior to the decision to to 100 dwelling units per acre (up from relocate the station, Shaw’s company 40 in the original BG zoning). After had approached the city about doing a extended negotiations, the community TOD project. In Plano, the company saw was willing to accept high density an opportunity to replicate the success of in exchange for the prospect of its previous Uptown Dallas project, and re-energizing and upgrading downtown it wanted to use transit to create a “sense Plano. of place” that sustains or enhances real- estate values over a long time.13 The resulting project, Eastside Village 1, was completed in 2001 (see Photo Following the selection of Amicus 15.3).14 It sits on a 3.6-acre parcel Partners, Robert Shaw led an intensive adjacent to the historic downtown and community-driven process to develop a near two performing arts centers, a design concept for the site that would transit museum, a residential historic

Photo 15.3. Eastside Village, Plano. Helping anchor the rebirth of downtown Plano, Eastside Village is a $17.7-million, high-density, mixed-use project fronting directly onto DART’s light-rail station plaza. The 3.6-acre, 245,000-square-foot project features 234 apartment units and 15,000 square feet of ground-floor retail space. The three- and four-story building wraps around three sides of a five-story parking structure.

308 district, and Haggard Park. The project apartments and 25,000 square feet of features three- and four-story brick ground-floor retail. A new street bisects buildings with zero setbacks and designs the site to provide garage access and reminiscent of 19th-century mercantile expand the downtown grid. Parking is structures. The buildings house 234 loft similar at the second project, which has apartments (renting for $600 to $1,200 419 garage spaces (100 owned by the per month) above 15,000 square feet of city) and 33 surface spaces. Compared ground-floor commercial space, with the first phase project, however, the including two restaurants, small offices, interior garage at Eastside Village 2 is and a community room leased by the more visible to local traffic, and the city. The whole development is split in retail has thus fared better. In both half by a new street. The western portion projects, most residents are singles and of the site directly abuts the DART young professional couples without platform and plaza, integrating private children. and public space, and the interior of the building contains a courtyard and pool. To help leverage the Eastside Village The eastern portion of the project has an projects, the city paid for new local interior five-level parking garage with streets, constructed brick sidewalks, 351 spaces. The first level is open to the and provided street furniture and public to serve the commercial facilities ornamental lights. It also granted and has a 4-hour limit (poaching by Shaw’s company a parks fee waiver DART commuters had been a problem). and credited development fees against The top four floors are gated for project ground-lease payments. residents. Surrounding the whole project on three sides are 47 angled on-street Going into the first project, Shaw’s parking spaces. starting assumption was that light rail would help to publicize and market the Encouraged by the anticipated success of TOD, but that the fundamental demand Phase 1, the city and Amicus Partners for rental units would not change began working together to put together because of the project’s location next another project. Nearby, the city owned to DART. During interviews for this another 1.1 acres adjacent to 2.2 acres study, Shaw commented, “I’ve been owned by a utility company seeking to proved totally wrong on the impact of 1 relocate. Shaw’s company bought the DART.” Phase 1 opened 1 ⁄2 years before utility parcel, and the city contributed its DART and leased up quickly. The second land in return for 100 future on-site phase of the project, however, overtook public parking spaces. The city also paid the first phase, and occupancy in the the company $800,000 for public first phase dropped from 98% to 89%. infrastructure improvements. After Then, according to Shaw, “A miracle another design process involving happened—DART opened.” Shaw downtown merchants and residents, believes that 25% to 50% of new leases Eastside Village 2 was born. are now DART-driven, and occupancy is back at 98% for Phase 1. Shaw believes, Built from 2001 to 2002, the second “Because of DART, the project is project is similar in design and scale to dramatically out-performing the market. Eastside Village 1. It includes 229 loft I’m a convert.” Now both projects

309 market directly to DART users by handing out coffee and doughnuts on the Mixed-Use Lessons platform, and project advertisements include a DART “banner.” Text Box Developer Robert Shaw focuses on four 15.1 outlines Shaw’s philosophy on elements to create a successful mixed-use TOD design. project such as Addison Circle or Plano Transit Village: The city is not done rebuilding its down- town. While the two projects have added 1. FAR (Floor Area Ratio): push the FAR to the maximum extent possible. nearly 500 dwelling units and at least 2. Building Efficiency: gross to net, twice as many permanent “eyes on the maximize the amount of leasable area in street,” the city would like to add another relation to total building size. 500 units near the DART station as part of 3. The Parking Solution: get to the its vision of a “Plano Transit Village.” smallest amount of parking space per Other tools used by the city include a TIF square foot of leasable space. district, parcel assembly, a neighborhood 4. The Ground Floor Plane: activate the street face on the development. empowerment zone (which reduces development fees), and a historic Finding the right parking solution is a major preservation tax abatement program. driver in Shaw’s projects. Shaw starts by finding the parking solution and then works Once again, downtown Plano is from there. Over time, he has fine-tuned the becoming a regional destination. New art of parking costs. His four- to five-story structures typically have a 200 x 120 foot businesses include the Coffee Haus, footprint to allow for efficient deck runs, or Jorg’s Café Vienna (an Austrian about 300 square feet per parking space (well restaurant), Two Brothers Cigars, below suburban averages of 400 to 500 Spa St. Clair, and the Eastside Art square feet). He has developed relationships Gallery. Three new restaurants are with parking contractors; the decks are expected to move in soon, which will concrete poured in place and, depending on create more good energy for evening the cost of materials, come in at $3,700 to $4,500 per space—much less than the costs shopping. In the last 3 years, 26 new typically associated with structured parking. single-family houses have been built in The plan view of Shaw’s Eastside Village in the older neighborhoods adjacent to Plano (below) illustrates these relationships. downtown, and the city continues to restore historic commercial and civic buildings. The city is also reusing its first school gymnasium, built in 1938, Development as a performing arts center. As at Mockingbird Station, DART is benefiting from high weekend and Parking entertainment/leisure use.15 DART Station Neither of the Eastside Village projects, it should be noted, would have happened without risk-taking commitments by both the developer and the city. The city articulated the vision and provided Text Box 15.1

310 incentives. The developer understood Station, The Cedars, and downtown what was necessary to translate the vision Plano, it is not presently served by into an economically viable project light-rail transit, although civic leaders with a design that the community could hope this will one day change. Currently, embrace. According to Shaw, the city’s it represents a bus-based TOD with leadership behind TOD filtered down the possibility of transforming into a to all levels of the staff. City officials rail-served one. advocated for the station location, saw an opportunity to marry development With about 15,000 residents, Addison is with the platform, assembled the site, a “land-locked” community of 4.5 square offered it for development, paid for public miles, about 80% of which is built out. In infrastructure, and increased allowable creating Addison Circle, local officials densities. In effect, the city “pulled” the consciously sought to build a “complete” projects through so that the developer town center with a full-time residential did not have to “push” them, and Shaw base that would strengthen the local essentially became the “arms and legs,” restaurant/entertainment industry. by his own admission, to make staffs’ In the 1970s, Addison became a focus visions real. for regional restaurant and hotel development when it permitted liquor by Addison Circle the drink before most other suburbs did. By the early 1990s, however, the Addison Circle is an emerging 80-acre industry began to decline when mixed-use town center in the town of population dispersed to far-flung suburbs, Addison, a post-war suburb located and new entertainment corridors began to 20 miles north of downtown Dallas emerge. Due in part to the success of (see Photo 15.4). Unlike Mockingbird Addison Circle, today Addison has over

Photo 15.4. Addison Circle, Addison. Addison Circle is a very walkable 80-acre high-density town center that closely adheres to the principles of the New Urbanism. A bus transfer center and future commuter-rail line serve the edge of the project. At build-out in 2010, the project will include 4,000 dwelling units, 4 million square feet of office space, and 250,000 square feet of retail space.

311 150 restaurants, and the town has decade has been a true public-private retained its regional status as a thriving partnership involving the property entertainment/leisure destination. owner, the town, and the developer (initially Robert Shaw’s Columbus Addison Circle is a dense, mixed-use Realty, later purchased by Post neighborhood with a strong residential Properties, a seasoned nationwide presence that closely adheres to the developer of TODs). The first step was principles of New Urbanism.16 Planning to conduct a market study to ensure that for the town center began in 1991, when residential demand would justify high- the town’s updated comprehensive plan quality public infrastructure; calculations proposed a special mixed-use, residential suggested that it would. district. The concept was subsequently refined and confirmed in a community- On showing that market pro forma based visioning exercise (Vision 2020), penciled out, the developers made in which residents rejected building numerous presentations of design more traditional garden apartments, concepts and potential projects to local opting instead for a comprehensively officials and residents to solicit their buy- planned “urban place.” in. With community support, new design guidelines were then written into the Located near a regional toll road, the zoning code, covering allowable Addison Circle site was the last densities, lot coverage, building materials, significant unbuilt parcel in town (and parking distribution, and streetscape one of the largest sites in the area) and standards. At the same time, financial was under single ownership (Gaylord analyses were completed to establish the Properties). The site abuts Addison’s development program/phasing and Old Town and is within walking distance identify funding gaps. Finally, the town of existing employment, retail, and and developer signed a development entertainment uses, as well as the town agreement ensuring $4 million of conference and arts center. Around the public improvements in exchange for time the site was identified, the town also 1,500 residences in the first 5 years. persuaded DART to locate a bus transit To pay for the public infrastructure, the center across the road that forms the project area was designated a TIF district. southern boundary of the development. While other communities did not want the Development by Post Properties started in transit center, Addison officials sought to 1993 and today the project is around one- capitalize on the proximity of abandoned third built out. At completion in 2010, but well-maintained freight rail tracks that the project will include 4,000 dwelling bordered the site. In the future, DART is units (at 55 dwelling units per net acre), likely to operate commuter-rail service 4 million square feet of office/commercial in this corridor.17 In the meantime, space, and 250,000 square feet of street Addison’s leaders are happy with a town retail. Total public investment will likely center that enjoys intensive bus services reach $9 million, matched by more than and ease of transfers. $300 million in private investment.

The detailed planning and urban design Densities are uniformly high throughout process that has unfolded over the past the Addison Circle project. Residential

312 buildings are generally four to eight “petals” standing 45 feet high and stories with interior courtyards and 140 feet across and integrates designs high-quality brick and stone finishes.18 originally done for the town’s older A strong emphasis on landscaping, buildings and parks. The town and streetscape improvements, pocket developer worked with residents to parks, and other aesthetics “softens” design the space and select the artwork perceived residential density. Also, most in a design competition. The site also residential buildings contain street-level includes a large open-space plaza that retail, cafes, restaurants, galleries, links to the transit center via a special- and/or offices.19 Units range from one- events pavilion adjacent to Blueprints. bedroom apartments to penthouse lofts and townhomes, and monthly rents range Overall, the keys to developing Addison from $700 to $2,600. Most residents are Circle were the proactive role of the town upscale “choice” renters: singles, empty in requiring high-quality development; a nesters, and young professional couples team effort by the town and developer to with no children (age 30 to 55). The create a comprehensive plan; adequate project also includes a 10-story office time to market development concepts; building. and the town’s contributions towards high-quality infrastructure. As in Plano, Addison Circle is very pedestrian- continuity among local leaders has also friendly. Sidewalks and crosswalks are been vital to the project’s success. paved in brick, and the site has an abundance of street trees, bike racks, Few would contend that Addison Circle benches, and other street furniture. To is not a bona fide energized, mixed-use date, the town has spent three times its center with a unique identity. Whether “normal” amount for streetscaping. The or not it is truly a TOD, however, is project’s street network consists of a debatable. Those close to the project closely spaced grid. Parking, at one admit that the transit center, which is space per bedroom, is in above-grade separated from the development by a structures behind the buildings. All the large open space, did not fundamentally buildings have a maximum 6-foot change the project’s urban form. When setback from the sidewalk, and fire and new rail service begins in the corridor, access lanes (i.e., mews) between however, Addison Circle can transform buildings provide primary access for into a highly functional TOD if a station many residential units. is sited adjacent to key buildings (and the bus transit center is relocated). The final Addison Circle is particularly proud of chapter of Addison Circle as a transit- its multiple small parks, which are in oriented community is yet to be written. good locations and are interesting and usable enough that they have become Richardson genuine community focal points. Some apartments open directly onto the mini- Located in the city of Richardson, parks. The “signature” feature of the Galatyn Park is 35 minutes north of district, however, is a new traffic circle downtown Dallas on DART’s Red Line. with a $2.1-million public art exhibit.20 Richardson is a mature suburb with Called Blueprints, it includes five nearly 92,000 residents and is located in

313 the heart of the region’s “Telecom “unprecedented” opportunity to shape Corridor,” which generally parallels the future growth, city leaders Central Expressway. The corridor is enthusiastically embraced DART and characterized by major office, TOD. As Richardson lacks a true commercial/retail, and light industrial downtown and has few land parcels left land uses in close proximity to the for employee housing, city staff have highway, while low-density housing envisioned Galatyn Park as a high- dominates the remainder of the density, mixed-use area providing a corridor.21 With over 600 high-tech and “24/7 lifestyle” geared to high-tech telecommunications firms, more than workers (see Photo 15.5). In addition to 80,000 employees work in Richardson. creating a new civic core, the city also hopes that DART will become a major Relative to the region at large, the employee commute option. In the words Telecom Corridor is projected to of one official, “We see the DART undergo rapid residential, commercial, stations as the future of the city.” and industrial growth in the coming years.22 Richardson is slated to become The city began planning for TOD as soon the region’s second largest employment as plans to extend the DART starter line center by 2010, when over 100,000 were announced. Originally, Galatyn workers are expected to commute Park Station was to be sited along a to Richardson. Recognizing an major east/west arterial. However, after

Photo 15.5. Galatyn Park Station, Richardson. Galatyn Park is charting new ground, slated as Richardson’s first high-density, mixed-use center. Located between a DART station and Nortel’s office campus, Richardson’s new 27-acre “civic core” will feature a 336-room hotel, a performing arts center, 8 acres of mixed-use retail and office space, and 4 acres of residential space at 35 to 90 dwelling units per net acre.

314 consulting with Nortel, a major employer east of the station (with I-75 on the other planning to expand its facilities, the city side). With its columns made of stainless strategically approached DART to move steel bundles (representing conduit the station north, next to a large vacant wire), the station design relishes the parcel under single ownership. Soon area’s high-tech character. A 2-acre afterwards, the city assembled what it plaza with a water fountain connects the refers to as a “dream team,” composed of station to the Charles W. Eisemann representatives from DART, Nortel, and Center for Performing Arts (built by the the Galatyn Park Corporation (the city) and will eventually connect to an developer), to create an urban hub around expanded nature trail.25 the station. North of the plaza lies the 336-room, While DART was planning and building 12-story Marriott Renaissance Hotel, the rail extension and new stations, city which includes a 30,000-square-foot staff traveled to several other rail cities conference center. Immediately south are (e.g., Washington, D.C., Atlanta, and 12 acres of developable land zoned for Portland) to gain insights into how TOD high densities. Of this land, 8 acres will might be implemented at Galatyn Park be mixed-use retail and office, and and elsewhere.23 The staff also began 4 acres will be residential (with densities building community support for TOD of 35 to 90 dwelling units per net acre). (via educational workshops) and Apart from the station areas, the supported an Urban Land Institute dominant housing products in Richardson Advisory Services panel in 2000 focused are low-density single-family houses. on the market potential for TOD.24 City To accommodate these “pioneering” leaders quickly bought into the TOD densities, the city has stipulated that concepts, designating neighborhoods project designs and building materials around five proposed stations for TOD. must be approved to ensure high-quality Of the stations, Galatyn Park was chosen construction before anything can be built. as the new town center; other stations would have less intense development and The city of Richardson is taking what is serve other functions (e.g., significant for it the unusual initiative of developing park-and-ride provisions). Nortel, an a TOD zoning code for its four stations to early supporter of TOD, pledged to create a new template for development. remain in the area for the long term and Historically, the city has typically has since built a large four-building changed its zoning in response to complex immediately east of the primary landowner or developer requests. TOD site. Nortel aligned its buildings Recently, the city has held up some to enhance views and open onto the developer requested re-zonings until the project’s core. The company also shares new code is adopted. The new code26 its parking with entertainment and retail will feature “urban” setbacks and side uses on evenings/weekends. yards, requirements for mixed uses, smaller and slower street standards, and Galatyn Park was designed as a reduced parking requirements.27 “destination” station, devoid of commuter parking. Development focuses What does the future hold for on 27 acres that form a half-circle to the Richardson? At build out, DART is

315 expected to spark upwards of $300 TOD would also benefit if the region’s million in private investment at Galatyn largest city, Dallas, were more Park, and the city will have invested supportive.29 To date, the city has done some $75 million. In the words of a city little to promote TOD, and its business staff member, the city is “now creating a leaders have been more concerned that new string of nodes with a new type of DART keep its facilities safe and clean development that will identify our than in considering how it might be used community in the future; this is a way to to leverage development. This too, re-identify ourselves.” Another staff however, may be changing. Dallas has member has said, “We are trying to recently added a full-time TOD create special areas, special places for specialist to its small planning staff and where folks want to be.” is also in the process of designing a TOD overlay zone. DART continues to prod That said, the city’s approach has been a the city to take positive steps, and most tempered one, and it acknowledges that observers expect Dallas to assume a it is charting new ground in a place with greater role in coming years. no high densities, mixed uses, or TOD. Housing remains a politically sensitive Regardless of the future posture of the issue in Richardson, and the city wants NCTCOG and the city of Dallas, to get it “right” from the start. Currently, powerful market forces will continue to there is very little apartment housing in drive TOD. The Dallas Metroplex this relatively affluent city. Thus, each continues to sprawl, and, despite the station has a 350-unit cap, and, while the generous supply of tollways, beltways, densities have been increased at Galatyn and expressways (i.e., it has good road Park, no net new housing has been access), congestion has steadily allowed in the city. If TOD is to spread worsened. Savvy developers, building to other station areas, it will be critical owners, and cities like Richardson and that initial projects at Galatyn Park are Plano recognize the advantages of good well received.28 rail access, place making, and walkable communities. Real-estate market data The Future of TOD in Dallas performance bears this out. A recent study found that, between 1997 and What does the future hold for TOD in 2001, residential properties near DART and around Dallas? On the public-sector light rail appreciated 39% more than side, while the NCTCOG values and properties further away from rail.30 For encourages TOD, it lacks any regulatory office properties, land-value premiums control and is not likely to delve into were even higher—53%. Retail local zoning code issues, owing to a properties, on the other hand, witnessed political climate where local control is little impact.31 jealously protected. Nevertheless, the NCTCOG has considered pursuing According to TOD developers, regional land-use policies that are residential units near DART quickly consistent with federal New Starts lease and sell. Self-selection partly reporting (as part of its Mobility 2030 accounts for the healthy TOD housing planning). The potential for macroscopic market. On the office side, a recent change exists. article on DallasNews.com notes that

316 office investment and transactions near Station would primarily serve park- DART are increasing and that DART’s and-ride commuters (see http://www. importance is likely to grow.32 As office cityofcarrollton.com/development/ competition in the far suburbs has planning/specialprojects.shtml#Ren). intensified, investors are now looking for properties closer to popular DART lines, Conclusions and Lessons where occupancies and rents have been higher. Retail uses in TODs, however, The Dallas Metroplex offers striking are likely to take longer to lease up and contrasts in the “art and science” of TOD. add a truly urban ambience to mixed-use The city of Dallas has yet to take any clear projects. steps towards leveraging the investment in DART, in keeping with its hands-off Due to the success of DART and TOD, tradition toward planning and government the region’s rail-served cities continue intervention. In stark contrast to Dallas, to look for future TOD opportunities. suburban jurisdictions along DART’s new In Plano, for instance, discussions have light-rail extensions have been “ahead of begun regarding whether to convert the eight ball,” planning and implementing its end-of-the-line Parker Road Station TOD before stations even opened. from a large park-and-ride lot to a TOD.33 In addition, preliminary TOD TOD experiences from the Dallas region planning is underway for DART’s offer the following insights: next round of extensions, slated to reach Irving, Carrollton, and Farmers • Dallas TOD success looks much like Branch in 2008 to 2010. At the Las other places. Contrary to what some Colinas stations in Irving, high-density believe, there is no uniquely Dallas residential, retail, and office uses are approach to TOD. Similar to other planned, with a new civic center and places in the United States, each hotel directly integrated with light rail. suburban jurisdiction had an The town of Farmers Branch wants to enlightened and involved city revitalize its historic downtown with leadership that invested time, money, pedestrian-friendly retail and residential and political capital to achieve TOD. development. Like many of its Communities, like Plano and suburban neighbors, Farmers Branch Richardson, have assembled a TOD has taken the lead in developing a tool kit that offers financial and conceptual master plan around its regulatory incentives and public planned DART station. investment in infrastructure.

Carrollton has three visions for its three • Sophisticated developers made a stations (as described in the Carrollton difference. The common link in each Renaissance Initiative): the Old Town of greater Dallas’s TODs is the Station would be surrounded by presence of a recognizable major retail/residential development to developer: Ken Hughes at reinforce the area’s historical character; Mockingbird Station; Robert Shaw Trinity Mills would include TOD mixed- at Addison Circle and Plano; Pete use development with both light rail and Coughlin of Matthews Southwest at major highway access; and Frankford South Side on Lamar; and Don

317 Dillard in Richardson. So far in happened with supportive public Dallas, unlike other communities, policy and leadership from the city TOD has been the exclusive domain of Dallas. As the region’s dominant of major developers. One can only center, one cannot help but speculate imagine how much more TOD that Dallas’s leadership in the TOD would today exist in Dallas if arena could have created important leadership on the private side were synergies. The real-estate market in matched to local political leadership Dallas appears to be supportive of and a more receptive public-policy TOD. It bears watching to see what environment. more can happen if the city changes course to take the steps to adopt • TOD as place making. In each of the policies to allow the marketplace to suburban communities, TOD has produce more TOD within the city. emerged as an important tool to achieve a broader community strategy of creating a sense of place. Notes TOD funds have gone to revitalize or even create a new civic core. 1 To promote ridesharing, DART also operates Place making was also part an extensive system of high-occupancy of the developer’s formula for vehicle lanes. More than 100,000 commuters Mockingbird Station. While in use these lanes each weekday. cities like Portland TOD is a 2 North Central Texas Council of Governments, tool to contain sprawl, for many Regional Mobility Initiatives, Vol. VII, No. 1, February 2003. communities in Dallas, it is embraced as a strategy for inner-ring 3 Funds are actually distributed through the communities to better compete with Center of Development Excellence. sprawling communities on the outer 4 Jack Wierzenski, (DART) email to John edge. In Dallas, moreover, place Boroski (Parsons Brinckerhoff) 9/5/2003. making appears to be a money- 5 The standard parking ratios would have making proposition. The success of required 2,200 parking spaces. projects like Mockingbird Station 6 The station originally provided access to has not gone unnoticed, with new a park-and-ride and bus transfer facility on projects breaking ground and more the east side, but provided no access from on the drawing board that aim to the station across the trench to the mimic Mockingbird’s ambience. In development site. Dallas, imitation is not only the 7 Public participants include the Texas State sincerest form of flattery; in an Historical Commission, TxDOT, Dallas County, the city of Dallas, DART, the environment of rapid growth and NCTCOG, EPA, and the National Park worsening traffic conditions, it is Service. also a way to turn a profit. 8 Matthews Southwest donated 3 acres of land • for the new police headquarters, and IBM Ratcheting up TOD a notch. The also provided land as part of a 20-year most provocative question is not leaseback in exchange for tax credits. what has happened with TOD in the 9 Plano also includes high-tech manufacturing, Dallas Metroplex (clearly much has), several distribution centers, and national but rather what more could have office headquarters.

318 10 For a detailed account of Plano’s history and uses, and it hopes to attract fewer software redevelopment strategy, refer to an firms as they do not generate significant site unpublished white paper, “Downtown Plano: activity. Creating a Transit Village,” by F. Turner, 20 The developer contributed $450,000 towards Plano Assistant Village Manager, May 2003. Blueprints and the town paid the rest. 11 Haggard Park is used for weddings, family 21 Major corridor employers include Texas outings, and concerts, and unifies the whole Instruments, MCI WorldCom, EDS, Alcatel, area much as Boston Commons does in Fujitsu, and Southwestern Bell. Boston. 22 With the worldwide downturn in the 12 Major park-and-ride facilities are instead telecommunications sector, the pace of provided at other stations (e.g., the Parker growth in Richardson has slowed from earlier Road, end-of-line, station). forecasts. 13 Shaw is a seasoned developer with a strong 23 TOD leadership continues to come from three background in mixed-use development. He key city staff members who have had the founded Columbus Realty, which was support of the city council to do visioning eventually acquired by Post Properties, and and visit other cities. he was the initial developer of Addison Circle. He is currently developing Legacy 24 For more information, see Urban Land Town Center, also in Plano, and knows how Institute, Richardson, Texas: An Advisory to produce a quality product in a very Services Panel Report (June 11–16, 2000). efficient, competitive market. The city also consulted with national TOD firms such as ERA and Calthorpe and 14 Shaw has a 70-year ground lease with three Associates. 10-year options. The land is leased at a below-market rate, which increases over time 25 The project also includes a developer land and is indexed to the developer’s return on donation and a capital gift from a prominent investment. Richardson resident. 15 Ridership in downtown Plano in the year 26 The code will create a planned district for 2010 was projected to reach 900, but it is each station, not an overlay zone. already at 1,100 daily riders. 27 The area is probably over parked now. 16 Addison Circle won a Congress for New Richardson already allows shared parking. Urbanism Charter Award for District Design 28 The 1-90/Bush Turnpike Station has the in 2002. potential to become a “Mega-TOD.” The 17 The future Cotton Line will likely provide station area lies completely vacant in the commuter service to the Dallas-Fort Worth shadow of the freeway interchange, and it is airport. owned by the well-connected Hunt family, who is taking the lead in determining what 18 Many units include high ceilings, bay will happen there. windows, fireplaces, hardwood floors, and high-speed Internet access. Community 29 The city of Dallas has suffered from a amenities include four pools, courtyard systematic dismantling of its planning fireplace/grills, on-site courtesy staff, and program and staff over 25 years, from which controlled access security. it is just starting to rebuild. The city does not view TOD negatively, but from a functional 19 The entire Addison Circle project is standpoint (because of limited staff), it has performing well in the marketplace; the been difficult to participate, and therefore restaurants in mixed-use buildings have Dallas has largely been absent from the fared particularly well. Initially, several regional TOD dialogue. ground-floor “dot.com” firms were attracted to the project because of the “feel” of the 30 B. Weinstein, DART Light Rail’s Effect on area. In the future, the town will exert Taxable Property Valuations and Transit- greater control over the programming of Oriented Development, Prepared for Dallas

319 Area Rapid Transit (Denton, Texas: Photo Credits University of North Texas Center for Economic Development and Research, Photo 15.1. January 2003). First row: UDC Urban 31 Industrial properties have had negative Second row: G. B. Arrington impacts due to interference with site access. Photo 15.2. Top right: DART 32 S. Brown, Investors Snapping Up Towers G. B. Arrington Along DART Line, www.dallasnews.com, Photo 15.3. May 30, 2003. At the time of the article, First row: G. B. Arrington four buildings had recently sold, two sales City of Plano were pending, and $130 million worth of Photo 15.4. property was “in play.” G. B. Arrington Photo 15.5. 33 Some local residents oppose adding First row: City of Richardson significant density at Parker Road, as has G. B. Arrington been proposed, and several parties are concerned about how increased density at Parker Road will affect the downtown core, which continues to revitalize.

320 Chapter 16

TOD in the Mountain West: Colorado

Introduction “Five Commutes That Make You Feel Better About Yours.”3 This article Colorado is the third fastest growing state highlighted the 1-hour each way in the United States, with population commute that has become increasingly increasing twice as fast as the nation as a common in the Valley as people move whole over the past decade. Rapid growth farther away from employment centers, has been accompanied by prosperity; like the resort community of Aspen, in however, recently it has also become search of affordable housing. This is true synonymous with traffic congestion, air in Parachute, Colorado, where residents pollution, and sprawl. pay an average of $473 less per month in rent than do Aspen residents, but pay According to a 1999 survey by the Pew $420 more in monthly commute costs, Center for Civic Journalism, “the virtually canceling out any savings.4 The complex of issues surrounding growth, Valley’s several small towns and three development, traffic, and roads is easily rural counties have come together to the top issue on the list of problems that create the state’s first Rural Transit Denver residents mention without Authority. Accompanying this effort has prompting, since 60 percent of them been a thoughtful campaign to plan for do so,” compared to just 18 percent TOD. While it is still in its early stages, nationally.1 Echoing the frustration the experience points to the challenges of Denver residents, the Texas of pursuing TOD planning and Transportation Institute found that traffic implementation in small-town settings. congestion in metropolitan Denver rose dramatically from 1994 to 2000. The From the state capital, across the Front region ranked as the nation’s fourth Range, and into Rocky Mountain worst for increases in delay per peak communities, TOD is gaining a steady road traveler and fifth for increases in foothold in a variety of Colorado congested peak-period travel.2 settings. In a state that has grown up Congestion, coupled with concerns over around the automobile for the last smog, has sparked a growing interest in 60 years, TOD has not been a product of smart growth generally and, more happenstance. Rather it is a result of specifically, in TOD. careful planning on the part of public, nonprofit, and for-profit interests, all In Colorado, concerns about an eroding sensitive to the mounting disaffection quality of life and traffic headaches are with growth as usual. This case study not limited to urban areas. The Roaring looks at the practice of TOD across Fork Valley, a semi-rural area in the Colorado, exploring its implementation western part of the state, was featured in and the factors leading to its successes a 1999 New York Times article entitled and limitations in three distinct settings:

321 big-city Denver and its environs, the concerns about growth.) TOD’s rising medium-sized city of Boulder, and the popularity is perhaps best seen in the semi-rural Roaring Fork Valley. city of Denver, where it is the organizing concept of the city’s new long-range Transit-Oriented Redevelopment in plan, Blueprint Denver. It is also being Metropolitan Denver embraced in suburban communities, such as Englewood and Greenwood Against a backdrop of escalating Village, where substantial funds have congestion and sprawl, jurisdictions been contributed to TOD. TOD is being throughout the Denver area are turning pursued most actively by jurisdictions to TOD as a tool for managing growth. vying for light-rail extensions. Aurora (Map 16.1 provides a map of and Arvada are two examples. These metropolitan Denver that highlights localities see transit-served nodes and jurisdictions featured in this case study. corridors as sensible places to direct Text Box 16.1 documents Denver’s growth; moreover, they see TOD as an

Map 16.1. Light-Rail Transit in Metropolitan Denver (Existing and Under Construction), 2003. Note: Light-rail transit alignments were drawn based on RTD system maps and T-REX map. Source: 2000 Census Tiger File; RTD website, www.rtd-denver.com; T-REX website, www.trexproject.com.

322 Denver Resident Concerns About Growth, Development, and Traffic

In October 1999, the Pew Center for Civic Journalism conducted a national survey of 1,000 people and four regional surveys of 500 people each in Denver, Philadelphia, San Francisco, and Tampa. The survey was intended to measure American's top concerns leading up to the presidential election in 2000.

Denver residents topped respondents nationally, as well as in the three other regions surveyed, with regard to their frustrations over growth and traffic, an indication of the fast pace of growth.

Is traffic congestion a problem in the community where you live? Denver Nation Big Problem 73% 65% Small Problem 17% 22% No Problem 10% 13%

Is too much growth and development a problem in the community where you live? Denver Nation Big Problem 35% 28% Small Problem 30% 27% No Problem 34% 43%

Despite a strong consensus about growth-related problems, residents are divided over how government should respond.

How should local government use its power to focus growth? Denver Nation Allow growth to occur in all areas 39% 52% Limit growth to areas already built up 51% 40%

Source: Pew Center for Civic Journalism, Straight Talk from Americans (conducted by Princeton Survey Research Associates, 2000). See http://www.pewcenter.org/doingcj/research/r_ST2000.html.

Text Box 16.1

economic development tool, providing into an up-and-coming metropolis. natural settings for vibrant, pedestrian- Following the discovery of gold in the friendly districts, such as those found area, Denver grew from a small Native throughout the region a century ago. American settlement to a town of almost 4,750 residents by 1860. The city’s star Metro Denver’s Transportation Eras appeared to be fading, however, when the transcontinental railroad, completed The Transportation Hub of the Rockies. in 1869, skipped Denver in favor of While it was gold miners who founded Cheyenne, 100 miles to the north. From Denver in the mid-1800s, it was civic 1860 to 1870, the city hardly grew. leaders, bent on obtaining a rail link Faced with the prospect of governing an for their city, who transformed Denver unconnected backwater, civic leaders

323 persuaded voters to pass a bond measure 30% per decade since the 1950s. In a to pay for the construction of the Denver metropolis with 65 cities and towns and Pacific Railroad. Completed in 1870, over 300 special jurisdictions, growth has this railway breathed new life into the unfolded in a piecemeal, uncoordinated city by connecting it to the nation’s rail fashion, partly a product of fierce network. By 1900, Denver—not competition for sales tax revenues.6 Cheyenne—had emerged as the transportation hub of the region, with The following section examines the one hundred trains a day arriving in implementation of TOD in metropolitan Lower Downtown.5 Today, the Denver Denver, where, for the most part, transit area continues to benefit from the has become integral to community foresight of early voters who brought revitalization. As forms of redevelopment railroad service to their city; rail rights- and adaptive reuse, these TODs are, by of-way remain—some actively used for nature, more complicated than greenfield freight and transit and others under development. The intent here is to outline study as potential alignments for light- the confluence of factors that has rail extensions. Moreover, the city’s encouraged TODs, including robust trendy Lower Downtown—known as population growth, market dynamics, LoDo—is anchored by Union Station, a supportive public policies, local political beautiful turn-of-the-century facility leadership, education and outreach surrounded by open parcels that offer efforts, and strategic expansions of tremendous redevelopment potential. transit, and to take stock of the challenges that have hampered implementation. Streetcar Suburbs. While heavy rail has played an important role in connecting Planning Framework the region to the nation, the electric streetcar, introduced in 1886, indelibly Regional Planning. Concerned that the shaped Denver’s early cityscape. Today, region was not on a smart-growth a number of walkable suburbs exist trajectory, in the mid-1990s the area’s along former streetcar alignments, MPO, the Denver Regional Council of including South Denver and the Curtis Governments (DRCOG), prepared Metro Park and Five Points neighborhoods. Vision 2020, a regional land-use and With their historically transit-oriented transportation plan. At the core of Metro land-use patterns, these neighborhoods Vision 2020 is a major expansion of the are naturals for enhanced transit service. region’s transit system, calling for 55 Although they offer little opportunity miles of rail transit service with 54 new for large-scale TOD, experiences from stations over the next two decades.7 These neighborhoods such as Five Points and other transit capital investments total suggest that other streetcar suburbs could $3.95 billion, accounting for slightly benefit from reuse and revitalization more than half of the region’s planned spurred by improved transit service. public expenditures on major transportation improvements. Growth in the Automobile Age. Following World War II, Denver’s Metro Vision 2020 also calls for transit- population exploded. The metropolitan supportive development. This goal is population has grown at an average of particularly important when one

324 considers the build-out potential of local potential effectiveness. As is true of zoning ordinances. In 2000, the region MPOs nationwide, DRCOG has contained approximately 2.4 million significant leverage to influence regional people living in an urbanized area of planning through its control of federal approximately 500 square miles. By transportation funds. Nonetheless, as an 2020, the population is expected to grow organization composed of local juris- to 3.2 million, or by 33%. Collectively, dictions, there has been limited political the long-range plans of local jurisdictions will to wield this authority. As a result, would allow an aggregate build out of TOD remains the purview of local some 1,100 square miles, a 120% jurisdictions, without the support of a fully increase in the amount of urbanized embraced regional land-use plan.11 land.8 To contain sprawl, Metro Vision 2020 proposes a 747-square-mile urban Local Comprehensive Planning. For growth limit. many communities TOD is a one-off phenomenon, involving a single stop Metro Vision 2020 further calls for along a light-rail line. However, in other channeling a major portion of growth communities, transit corridors are of into urban centers. These areas are greater interest. This is true in the city of envisioned as high-intensity, pedestrian- Denver, where the city council recently friendly, mixed-use locations that serve adopted Blueprint Denver, a plan that as transit origins and destinations. This points out: goal is as much about creating “a sense of place and community identity” as it is The [current] zoning scenario about transportation benefits.9 reveals a haphazard and unfocused potential land use pattern that The lofty goals of the plan, requiring does not correlate with major major changes to existing plans and transportation corridors, transit station areas or the neighborhoods ordinances, has meant that major near downtown. It also predicts questions about the implementation of large amounts of new housing Metro Vision 2020 still loom. To give scattered among existing this regional plan “teeth,” DRCOG has neighborhoods, more costly infill asked jurisdictions to voluntarily sign an housing, higher traffic flows in intergovernmental agreement—the Mile neighborhoods and only a nominal High Compact. In so doing, jurisdictions increase in transit ridership.12 agree to abide by the planning principles of the regional plan. Blueprint Denver offers a roadmap to revamp the city’s current land-use The process had a hopeful beginning, with ordinance. It divides the city into jurisdictions representing more than 70% “areas of stability,” which are primarily of the metropolitan area population established residential neighborhoods, signing on. However, two of the fastest and “areas of change,” including the growing counties, Adams and Arapahoe, city’s urban centers and transit corridors. and one of the most populous, Jefferson, The document was the product of a have refused to sign, citing concern over lengthy public process that has been “property rights.”10 This unwillingness widely credited with forging a common seriously constrains the Compact’s vision for growth in the city. Among the

325 early signs of its success is the recent densities along rail transit corridors. (See adoption of two changes to the zoning Text Box 16.2.) ordinance: one change downzones established residential neighborhoods to Denver TOD Coalition. The Denver TOD preserve historic character, and the other Coalition is a recently formed partnership change creates a TMU-30 zone, which among the city and county of Denver, substantially increases allowable RTD, and the Denver Urban Renewal

Transit Mixed-Use Zoning

In conjunction with the ongoing expansion of light-rail service into the Southeast Corridor, the city of Denver has introduced a new transit-mixed use zoning district (TMU-30). Its most notable features are the following:

Density. Developers may build up to 220 feet in height, with a maximum FAR of five to one for their overall master plan. Previously the city would not allow heights greater than 140 feet within mixed-use districts outside of the central business district.

Flexibility. The zone provides a fair amount of latitude in how a project is designed. Developers are encouraged to aggregate their required open space into a unified area around the transit station to create a functional public plaza.

Parking. Developers are entitled to a 25% parking reduction vis-a-vis´ the city’s standard of one off-street space per residential bedroom and two spaces per 1,000 square feet of office space. Further reductions up to 50% are possible depending on shared parking and transportation demand management strategies.

The TMU-30 zone may be thought of as a type of planned unit development district. Property owners may apply if their site covers at least 12 acres and is within 1,500 feet of a rail transit stop. A master plan for development is not required at the time of rezoning, but owners must have an approved master plan before proceeding with development.

Since the adoption of the TMU-30 zoning district near the end of 2002, three property owners have rezoned their properties to TMU-30 standards: Cherokee Denver LLC, which is redeveloping the Gates Rubber Factory; the Union Station Alliance, a public-private partnership which is redeveloping Denver Union Station; and the owners of the Belleview site, a 54-acre golf course next to the Southeast Business District.

The city’s decision to have property owners voluntarily opt into the zone, rather than the city undertaking a rezoning process, reflects a view that light rail creates the necessary impetus toward higher-density development. As one developer noted, the time and effort associated with seeking a change in zoning is only justified when there is a large potential return associated with a major development.

Text Box 16.2

326 Agency (DURA). Its primary charge is to • Identify funding and grant sources; and “link land use and redevelopment with the expanding rapid transit system.”13 The • Develop implementation strategy.14 Coalition’s agenda is to While the Coalition is less than a year • Establish a clearinghouse for TOD old, the agencies involved have been site information, technical support, collaborating closely on a number of project review and feedback; ongoing developments such as the Cherokee/Gates site and the Colorado • Facilitate interagency cooperation to Street Station. maximize TOD opportunity; Implementing TOD • Develop educational material on TOD and local opportunities; The cumulative payoff of the many pro- • Conduct station-area planning and TOD initiatives in metropolitan Denver assessments; is best reflected by action “on the ground.” • Conduct outreach to property owners, developers, lenders, Market-Driven TOD in Lower politicians, community advocates, Downtown. The 16th Street Transit Mall policymakers, and consultants; lies in the heart of downtown Denver and forms the backbone of the regional • Establish a TOD fund; transit system (see Photo 16.1). Closed to private automobiles, the 16-block mall • Write and issue RFQs/RFPs for forms an active pedestrian spine. TOD sites; Average weekday transit ridership along

Photo 16.1. 16th Street Transit Mall. Stretching approximately 15 blocks through the heart of downtown Denver, the Transit Mall is integral to the success of downtown retail. Quiet, compressed-natural-gas-powered, low-floor buses share the street with pedestrians. In the photos above, the “Free Mall Ride” glides past the Denver Pavilions, a 350,000- square-foot retail center that opened in 1998.

327 the bus-served Mall is 60,000, which foot as of the end of 2002.16 By accounts for 21% of the region’s transit comparison, rents at 16 Market Square trips, compared with 13% for the entire commanded a substantial premium at light-rail system.15 Regional bus transfer $31.24 per square foot. For the office stations at both ends of the Mall serve as market, the vacancy rate was 13% in gateways to downtown. These stations late 2002, and weighted average rents were RTD’s first joint development were $21.85 per square foot per year.17 projects and continue to bring in a steady In contrast, office space in the three stream of ground-lease revenue. Rent subject buildings is fully leased and premiums along the Mall reflect the commands a substantial market accessibility benefits conferred by transit. premium. Offices at 16 Market Street leased for $30.20 per square foot, a After an office boom in the late 1970s substantially higher price than its and early 1980s, downtown Denver saw comparables—16.8% higher than the very little commercial development and Millennium Financial Center18 and essentially no office growth from early 8.4% higher than 1899 Wynkoop. 1983 until the end of the 1990s. In 1999, this began to change; a number of Transit-Ready Development in Arvada. projects were built, including three Arvada seems an unlikely place to find mixed-use buildings in close proximity some of the Denver area’s most ardent to the Market Street Station. Each of TOD supporters. From westbound these buildings is located in LoDo, a Interstate 70, Arvada appears to be a vibrant district of renovated buildings massive big-box power center. Yet, this filled with loft-conversion projects, book impression belies a community with a stores, coffee shops, restaurants, and charming and well-preserved historic bars. Located in the same neighborhood core and a very entrepreneurial and and completed within months of one committed group of civic leaders. In another, these buildings provide a good anticipation of the expansion of light-rail opportunity to do a “comparables service to Arvada, these leaders have analysis.” Each building contains been working diligently to create a ground-floor retail with offices above; framework of transit-supportive land one building contains residential uses (See Text Box 16.3). condominiums on the top two floors. Figure 16.1 presents the relevant market The story of TOD in Arvada is a nascent data for each of the three buildings. As one. Light-rail service is several years might be expected of high-quality, new away by the most optimistic estimates. construction in a trendy part of town, Nonetheless, this community has made each of these buildings is performing great strides in creating a pedestrian- well relative to the overall downtown friendly and transit-oriented core. An market, although two of the projects 800-unit residential development near have had some difficulty in leasing retail Olde Town recently broke ground within 1 space. ⁄4 mile of the bus park-and-ride facility and planned light-rail stop. A number of For all of Denver’s CBD, the retail new businesses have also recently vacancy rate was 7.1%, and weighted opened in Olde Town, and several average rents were $19.50 per square buildings have been substantially

328 16 Market Square Millennium Financial Center 1899 Wynkoop (A) (B) (C)

Distance to Market Street Station 0.0 Miles 0.3 Miles 0.5 Miles

Map of Lower Downtown Denver Weighted Average Effective Annual Lease Rates per Square Foot

Office $30.20/ Full Service Gross $25.85/ Full Service Gross $27.86/ Full Service Gross Retail $31.24 NNN $21.00 NNN $17.31 NNN

Development Size Height 8 Stories, 6 Stories 9 Stories (2 Floors Residential) Total (Sq. Ft.) 280,000 135,000 164,500 Office (Sq. Ft.) 180,000 125,000 153,000 Retail Size (Sq. Ft.) 23,500 7,000 12,000

Land Information Land (Sq. Ft.) 37,500 25,000 25,000 Price Per Land Sq. Ft. $125 $132 $180 Date Purchased 4/98 – 12/98 4/99 11/98

Figure 16.1. Comparables Analysis, Lower Downtown Denver Note: Map adapted from Downtown Denver Partnership, www.downtowndenver.com. NNN = “triple net” lease Source: Will Fleissing, Continuum Partners, March 2003. “Transit-Ready” Development in Arvada

In a 2002 report, Arvada Intermodal Transit Village Concept Plan, prepared for the city of Arvada and RTD, the authors explain the concept of “transit-ready” development: it “anticipates transit, rather than using transit as a catalyst for change.” The report further states that in “some cases appropriate developments enhance a community’s opportunity to attract transit to an area, or influence the station location.” In Arvada, city leaders are banking on this, hoping that RTD will not be able to ignore the city’s efforts to establish a framework of transit-ready land uses when the next round of light-rail expansion moves forward.

As it is currently conceived, the RTD FasTracks plan would build out the entire metro-wide light- rail system by 2010. This is contingent on voter approval of a sales-tax levy. In the meantime, four corridors are in various stages of planning and environmental work, including the Gold Line through Arvada. None of these lines has yet been funded. With many in the community convinced that the emergence of a vibrant downtown hinges on light rail, Arvada’s civic leaders want to be ready for FasTracks, if it arrives, and be poised to proceed using alternative sources of funding if it does not.

Source: RTD and City of Arvada, Arvada Intermodal Transit Village Concept Plan (prepared for the city of Arvada and the Regional Transportation District, March 2002). See http://www.vmwp.com/urban/urban_projects/Arvada/Final_ArvadaPlan(screen).pdf.

Text Box 16.3 upgraded (see Photo 16.2). Encouraged key policy outcomes emerged from the by its success in Olde Town, the city process: AURA adopted Olde Town’s plans to form a new urban renewal revitalization as its highest priority; the district on Arvada’s western edge to county agreed to locate a new library in facilitate the transformation of a former Olde Town; the city council agreed to state institutional facility into a TOD support a housing renewal project in an (see Text Box 16.4). area adjacent to Olde Town; and all stakeholders agreed that Early efforts to revitalize Olde Town (e.g. streetscape improvements) did little continuing participation with RTD to arrest the area’s decline and can best be and DRCOG to secure the Gold described as piecemeal. While some were Line commuter connection to focused on Olde Town’s revitalization, Metro Denver is an all-important others, such as the Arvada Urban commitment for Arvada, probably its Renewal Authority (AURA), were most important key to the future.19 moving ahead with a distinct mission. An Olde Town Renaissance seems to be In 1998, the Arvada City Manager’s underway, with a dozen new retailers office spearheaded a planning process opening up in a single month during called “The Olde Town Renaissance 2002. These included antique and Project” to coordinate the efforts of collectible shops, which are the primary various groups and establish a common space users in Olde Town; an art gallery; vision for revitalization. A number of two wine merchants; and a deli. Maro

330 Photo 16.2. Olde Town Arvada. The planned extension of light rail to Olde Town Arvada is the centerpiece of the Olde Town Arvada Renaissance plan. In the top picture, the future site of the Arvada Intermodal Transit Station is shown. Urban renewal funds have been used to facilitate façade renovations and streetscape improvements throughout the area. In the photos below, New Town Arvada is juxtaposed with Olde Town. A challenge for the area’s revitalization plans is the physical disconnect between the areas. In the photo at left, a movie theater turns a blank wall toward Olde Town. Dimmer, the president of the Historic Town in a way that the adjacent big-box Downtown Association, believes development never did. businesses are relocating to Olde Town because the area is perceived as up and The Water Tower Project. Across the coming. She attributes this in part to an railroad tracks from Olde Town Arvada, expectation that TOD will help Olde at the western edge of the AURA project

331 Colorado’s Urban Renewal Authorities

Colorado state law allows the creation of Urban Renewal Authorities (URAs) for the purpose of revitalizing blighted areas. Known as redevelopment agencies in other states, these authorities operate as separate entities from the localities that create them. The primary tools of URAs are TIF and eminent domain. URA project areas have a lifetime of 25 years, after which the project area dissolves and tax increment revenue returns to the establishing locality’s general fund. In Colorado, URAs are able to collect a tax increment on both property and sales tax. In recent years, URAs have been essential partners in leveraging TODs in greater Denver. Even so, in the absence of a clear community-planning vision, these agencies have tended to focus on the bottom line, supporting highest and best-use development from a tax-base perspective rather than from a transit perspective.

What can happen when using URAs to foment TOD without a clear community-planning vision is exemplified in the case of the Alameda light-rail station: the Denver Urban Renewal Authority (DURA) helped to establish a major big-box retail center that turns a blank back wall toward the station. DURA is today more cognizant of the benefits of TOD, though it will be some years before the oversight at this station might be reversed.

Today, many URAs in the Denver area are full partners in efforts to encourage TOD. In the case of Arvada, this results from a community-planning process, jointly conducted by AURA and the city of Arvada. In Denver, the relationships between DURA, RTD, and the city have recently been formalized through a partnership known as the Denver TOD Coalition. Text Box 16.4

area, lies a 29-acre site known as the AURA has spearheaded the Water Water Tower District. The site, formerly Tower Village project. The agency occupied by an excavating company and issued an RFP to select a developer, 200 single- and multifamily units, is assembled land, created a master plan slated for reuse as a TOD. It lies only a for the site, and obtained necessary few hundred yards from a planned light- approvals from the city. Initially, the rail intermodal station as well as the site consisted of 48 separate lots with existing bus park-and-ride facility; multiple owners. AURA spent $20 AURA expects transit connections to the million to assemble and clear the land, development to be further strengthened in some instances exercising eminent by the creation of local nonprofit bus domain. The land is in turn being sold service that will connect the to private developers at a cost of development to Olde and New Towns. approximately $13,500 per residential The new development will consist of unit developed, for an overall price of 800 condominium and apartment units, approximately $10 million. While including some limited re-use of AURA will be losing money in the short rehabilitated multifamily buildings. run, the agency believes that in the long

332 term the investment will pay off by leadership in forging a common goal. In bringing additional residents to the area, addition, Arvada’s experiences highlight growing the tax base, and encouraging the importance of public-sector financial the extension of rail service to the area. participation in suburban redevelopment.

Ridge Home Property. Another potential The private real-estate market is not TOD site in Arvada is the Ridge Home likely to justify the costs of assembling, property, located on the western edge of clearing, and preparing land, even transit- Arvada, near the proposed alignment for accessible land, when other undeveloped the RTD Gold Line. properties are readily available elsewhere. Instead, AURA and the city are taking the In 1995, the city of Arvada, the adjoining long view, making near-term investments jurisdiction of Wheat Ridge, and the in hopes of a long-term payoff. primary landowner (the Colorado Board of Land Commissioners) completed a Public-Private Partnerships in master plan for development of the site. Englewood. A widely cited example of The plan focused on industrial, TOD in Colorado and one of the nation’s warehouse, and office development, foremost examples of transit-oriented proposing separated land uses and a redevelopment is Englewood’s super-block street pattern. CityCenter.20 (See Photo 16.3.) Located 6 miles south of Denver, CityCenter sits When DRCOG proposed extending at the site of a failed shopping mall. rapid transit to Arvada, the city re- When it opened in 1968, Cinderella City, examined the Ridge Home Property in with more than 1.3 million square feet of 1997 with the assistance of a Denver- space, was the largest mall west of the area nonprofit organization, the Center Mississippi. For more than two decades, for Regional and Neighborhood Action (CRNA). The new plan called for concentrating development near the proposed light-rail stop and introduced a block street grid to create a pedestrian- friendly environment. With the city moving toward the adoption of an urban renewal plan for the Ridge property, prospects are good for a transit-oriented redevelopment of the site in the next few years.

Lessons. While the city does not yet have light rail, Arvada’s civic leaders Photo 16.3. Englewood CityCenter. have embraced TOD as a central Office, retail, and residential space component in the city’s revitalization have performed well in the Englewood efforts. TOD has emerged as the CityCenter, a public-private unifying concept for revitalization. redevelopment, which combines Arvada’s experiences underscore the attractive urban design with big-box tremendous importance of political retail.

333 it generated approximately half of by the former property owners, and the Englewood’s sales-tax revenue.21 The remainder went toward demolition, mall’s fortunes began to decline during structured parking, roads, and park the 1980s, as competing properties space). Over $11 million were raised to entered the marketplace. The last effort convert an existing department store into to renovate and reposition the mall was a civic center using a certificate of in 1984; this proved to be too little, too participation, a financing mechanism in late, and sales dropped precipitously which someone buys a share of the lease during the 1990s: from $54 per square revenues from a lease agreement made foot at the start of the decade to $8 per by a governmental entity, rather than square foot by 1995.22 bonds secured by those revenues.

Planning Process. Concerned about In light of its substantial investment, the municipal finances and Englewood’s city decided to rescind its agreement image, city leaders eventually acquired with Miller-Wingate and to act as the the site. Through an RFP process, master developer through a city-created the city chose a local retail developer, nonprofit, the Englewood Environmental Miller-Wingate, which planned to Foundation. replace the mall with a big-box power center. Miller-Wingate was retained to act as a broker for the city and sold a 12-acre In 1995, RTD finalized plans for its parcel to Wal-Mart for $3.4 million; Wal- Southwest light-rail extension, including Mart in turn opened a 134,000-square- a stop at the backdoor of the proposed foot store in 2000. The inclusion of a big-box center. In light of the general merchandiser on the site was a announcement by RTD, Mayor Tom deliberate part of the master plan, based Burns and Community Development in part on a survey of community Director Robert Simpson felt that a big- interests and on the potential of a general box proposal was shortsighted. In an merchandiser to generate sales-tax interview with Grid Magazine, Simpson revenue. The city negotiated a “go-dark” remarked, “It would have been dead in provision with Wal-Mart so that if the ten years.”23 Instead, he pointed out, the store closes for more than 12 consecutive redeveloped site should provide a sense months, the city can re-acquire the of place for a community that lacked a property at fair market price. The strong center as well as one that would Community Development Director views “stimulate and sustain new jobs.”24 The this as instrumental to CityCenter’s long- city brought in TOD planner Peter term health and foresees a time when Calthorpe to develop a master plan, which Wal-Mart will no longer be the site’s was adopted by the city council in 1998. highest and best use. Miller-Wingate signed a $4.2-million ground lease for Implementation and Financing. To 15 acres to build retail and office space. leverage TOD, the following year the Finally, the Trammell Crow Company city mustered $18.5 million to redevelop purchased 10 acres for $5 million to the property. Approximately $7 million develop 438 apartments, including came from general funds ($2.5 million ground-floor retail. Table 16.1 presents went toward cleanup, an amount matched the site’s development program.

334 Table 16.1. Development Summary, Englewood CityCenter

Development Program Land Deal in millions Retail 380,000 sq. ft. City of Englewood $18.5 Civic 145,000 sq. ft. RTD $5.7 Office 50,000 sq. ft. Trammel Crow $5.0 Housing 325, 00 sq. ft. Miller-Wingate $4.2 Total 900,000 sq. ft. Wal-Mart $3.4 Total $36.8

Parking spaces Benefits Surface 1968 Leveraged $150 million in onsite public and private investment. Structured 767 Brought 750 new jobs to the city. Total* 2735 Estimated annual sales tax revenue of $2.5 per year.

*Includes 910 park-and-ride spaces Source: R. Simpson, “CityCenter Englewood: Transit Oriented Development by Design” (presentation at the APA National Conference 2003, Denver, Colorado, March 31, 2003).

Outcomes. As of June 2002, CityCenter $5,000 to $10,000 more per unit because was performing quite favorably across all of the proximity of light rail.28 market segments. Office space was nearly 100% leased at gross annual rates Lessons. The CityCenter development of $21 to $25 per square foot; in exemplifies several important strategies comparison, the vacancy rate for the for implementing TOD. First, the public Denver area was 89.9%. Annual office sector was willing to invest substantial lease rates in the city of Englewood, public resources and was focused on the which has a limited amount of Class A goals of reinvigorating the community space, ranged from $13.50 to $17 per and establishing a development with square foot.25 Annual retail rents for long-term financial viability. CityCenter averaged $18 to $20 per Interestingly, Englewood managed to square foot, with occupancy of 90% redevelop Cinderella City without the (compared with citywide gross retail benefit of support from its urban renewal rents of $8 to $14 per square foot, with agency. The Englewood Urban Renewal occupancy of 80%).26 Residential Agency had defaulted on a bond issued rents had the most marked difference. in the early 1990s and was therefore CityCenter apartments rented at an unable to provide assistance with land average of between $1,005 and assemblage or financing for practical and $1,735 per month in June 2002, more political reasons. This necessitated the than double the $500 to $700 per month city’s use of a certificate of participation elsewhere in Englewood.27 As further in lieu of bond financing. Second, the city evidence of the strength of the made a strategic investment to relocate CityCenter development, in April 2003, civic facilities to the CityCenter area, Trammell Crow sold its 438-unit helping to encourage private-sector apartment building for $52 million. investment. Third, the important role of According to Jeff Hawks, an experienced political and nonprofit sector leadership is broker in the Denver area who handled highlighted by Englewood’s experience. the sale, Trammell Crow received about The mayor was a tireless supporter of

335 TOD. A group of experts from real transportation project in Colorado’s estate, finance, banking, urban design, history. It involves rebuilding or and transportation was formed to study widening 17 miles of Interstate highway the site, assess its potential for TOD, and adding 19 miles of double-track and offer suggestions for implementation. light rail, along with 13 new transit These outside perspectives proved stations. T-REX is a unique partnership instrumental in winning support among RTD, the Colorado Department from the city council for TOD on of Transportation (CDOT), the FTA and the site. FHWA. The light-rail component of the project will cost $880 million. The Finally, CityCenter serves as an example project was awarded in 2001 and is of how big-box development can be slated for completion in 2006. melded into TOD—something perhaps demanded by municipal finances in More than doubling the length of the regions without sales-tax revenue light-rail system in the Denver area, sharing. In contrast to examples where T-REX will provide unprecedented big-box retail backs up to transit, opportunities for TOD in the region. Of creating an abysmal pedestrian its 13 new transit stations, T-REX project environment, CityCenter greets transit managers believe that at least 5 have patrons with a landscaped plaza and immediate TOD potential. Twelve pedestrian-friendly “Main Street.” The stations will have park-and-ride lots so big-box retailer is placed at the end of that even where TOD does not occur in the main street near a major arterial road. the short-run, RTD will have land banked Most parking in the CityCenter for future joint development possibilities. development is shared, with time limits While T-REX is enormously important placed on valuable spaces in front of for TOD, its design-build contract and retailers to ensure that commuters do not rapid implementation schedule have also park there. One criticism of the master posed challenges. With a tight schedule plan layout is that most all-day park-and- and tight-fisted budget, the contractor has ride spaces are situated so that transit refrained from reconfiguring station areas patrons do not pass by retail en route to in response to developer proposals. the train, which weakens the project’s retail performance. The largest of the TOD projects slated along the T-REX line is at the The city of Englewood is pleased with Cherokee/Gates site. Situated at the the success of CityCenter. It has recently confluence of three light-rail lines, been in negotiations with RTD to between the two largest employment include a second light-rail stop in the centers in Colorado—the Southeast city in conjunction with a light-rail Business District and downtown maintenance facility that RTD is Denver—the site occupies a strategic planning. location. Cherokee LLC, a company specializing in brownfield redevelopment, Future Plans acquired 50 acres of the former industrial site in 2001. With 3 years of remediation TOD in the T-REX Corridor. At a cost ahead, full build out is still some years of $1.67 billion, T-REX is the largest away. The developers are envisioning

336 7 million square feet of residential, office, discussion with T-REX managers about hotel, entertainment, civic, and retail combining the park-and-ride and space. maintenance facility on the CDOT parcel and freeing the other site for TOD. Cherokee has received support from the After some negotiation, the necessary members of the Denver TOD Coalition. parties agreed, and the city contributed a RTD has acted as a co-applicant in substantial sum of $6.9 million toward Cherokee’s request for rezoning to the redesign and construction of the TMU-30. Moreover, DURA has parking structure, which will house proposed the creation of an urban the maintenance facility on its ground renewal district at the site, which would floor. This maneuvering has freed allow public investment in the property’s approximately 3 acres of prime land, redevelopment. which the city plans to develop as a TOD.

Another 50-acre development site is At the far south end of the T-REX line located at the Belleview Station, to the is Lincoln Station, situated in Douglas south of the Cherokee/Gates site. Here County. As the only station outside of a golf course sits adjacent to the the RTD district and consequently Southeast Business Center, which has beyond the reach of eminent domain 120,000 employees. The project is authority, Lincoln Station offers being driven by the presence of light insights into the process of planning for rail; site owners are pursuing a rezone TOD as part of an enormous public to TMU-30 and expect to develop works project. Out of necessity, T-REX approximately 2,000 residential units, managers worked very proactively with 2 million square feet of office space, the owners, Bradbury Properties, to 250,000 square feet of retail space, and craft a station-area configuration that a 150,000-square-foot hotel. Current would maximize opportunities for a plans envision mixed-use development transit village. After agreeing to a oriented around a pedestrian plaza suitable station-area configuration, immediately adjacent to the light-rail Bradbury sold 6.5 acres to RTD for a platform. park-and-ride facility and is in turn contributing $2.63 million to add two Further south along the corridor is additional floors to the structure. The the Arapahoe Station in the city of deal with Bradbury represents the only Greenwood Village. Original plans for situation in which a T-REX station-area this station had an 820-automobile park- configuration was significantly and-ride garage on the station area’s modified in response to private-sector prime site—a parcel directly connected to interest in TOD. the light-rail platform by a pedestrian bridge spanning Interstate 25. Behind the Bradbury, which had originally planned park-and-ride garage and tucked away a suburban office park at the location, from the light-rail station, a CDOT now plans a transit village to include highway maintenance facility was 800 multifamily residential units, planned. Rather than lose the opportunity 200,000 square feet of retail space, to create a town center for this enclave of and up to 1 million square feet of 12,000 inhabitants, the city began office space. As with each of the

337 large-scale TOD projects along the Bus-Based TOD in Boulder T-REX line, build out is expected to occur over the course of years, most Boulder flanks the foothills of the likely by around 2015. Rocky Mountains, 25 miles northwest of Denver. The city is home to more Metropolitan Denver’s Experience in than 100,000 residents, as well as the Summary state’s largest university and several federal research labs. Identified as one In greater Denver, there is a growing of three “free-standing communities” in understanding of TOD on the part of the Denver metropolitan area, Boulder public and private stakeholders. This is is ringed by protected open space supported by efforts such as the CRNA totaling 33,000 acres.29 This buffers the planning process and the education and city from the sprawling development outreach efforts of RTD, which have extending westward from Denver along had limited success with actual joint U.S. Highway 36. development deal making, but have stirred interest in TOD by preparing and While Boulder is known for its proactive supporting station-area plans. Greater growth management strategies, including Denver also offers evidence about the one of the nation’s first urban growth market advantages of TOD. Experiences boundaries and an ambitious open space in Englewood and LoDo suggest that preservation program, until recently, whether TOD is a short-term ploy by a little in the way of TOD has taken form. developer or part of a long-term hold (Recent TOD in Boulder is shown in strategy, there is a monetary premium to Photos 16.4 and 16.5.) In 1994, the city be reaped from a transit-accessible launched its Community Transit Network location. Still, experiences from the (CTN) using a fleet of small, colorful Denver area continue to suggest that in buses operating at high frequencies suburban locations, redevelopment (see Text Box 16.5). Transit ridership around transit stations requires benefited from a milieu of dense and substantial public participation so long as diverse uses within the city core. Over other developable parcels are available. the years, the CTN has expanded beyond In Englewood and Arvada, this has the city center into less urbanized areas, meant that municipalities have had to opening possibilities for TOD farther take a long view of their investments, afield. Recently a number of mixed-use contributing substantial resources up developments have been completed front with the aim of recapturing value along CTN bus lines. While not over the ensuing decades. In Boulder, fundamentally shaped by the presence which is approaching the edges of its of bus service, these developments UGB, developable land is less readily support transit ridership and provide available, and, consequently, less public evidence that a well-conceived bus financial participation has been network can support the incremental required to incentivize favored types of advance of compact, walkable corridors development. Nonetheless, developing beyond a city core. TOD in Boulder has involved its own unique set of challenges, a topic to which While TOD has largely flown below we now turn. the radar of policymakers, evolving

338 Photo 16.4. Transit-Oriented Development in Downtown Boulder. Located adjacent to the downtown Boulder transit station, condominiums at One Boulder Plaza have sold exceptionally well.

Photo 16.5. Mixed-Use Parking Structures in Downtown Boulder. City-owned parking structures in downtown Boulder are “wrapped” with ground-floor retail uses to promote active street frontages conducive to transit ridership. as a result of broader land-use and development has occurred in the city’s transportation policies and a favorable high, walkable, and transit-accessible real-estate market, this is about to change. downtown. As of mid-2001, 10 new The city is currently partnering with RTD mixed-use developments were planned to create an intermodal transit center, in downtown Boulder. These included accommodating current bus and future 250,000 square feet of new office space, commuter-rail and BRT services. The 150,000 square feet of retail space, and project, known as the Boulder Transit 91 residential units. Developments such Village, will be a joint development that as One Boulder Plaza, immediately integrates housing and commercial uses. adjacent to the downtown transit station, The Boulder Transit Village is supported have sold exceptionally well at prices by a strong financial commitment and in the mid-$400s per square foot or marks the city’s first foray into proactive between $540,000 and $1.35 million.30 TOD planning. These prices are as high as any in the metropolitan area, including prices in the The Market for Mixed Use trendy LoDo area of Denver. Even in an economic downtown, the residential Over the past several years, the market market has held firm in Boulder. for transit-supportive land uses, particularly residential mixed use, has Outside of downtown, mixed-use been strong in Boulder, and developers developments are commanding less of a have found a banking community premium; still, prices are comparable to familiar with these product types and areas surrounding downtown Denver. willing to lend. Much of the mixed-use Residential units in the Dakota Ridge

339 Hop, Skip, and Jump

In 1989, the city of Boulder adopted its first transportation master plan, establishing a policy that directed transportation staff to develop a demonstration transit service for Boulder. From this was born the Community Transit Network (CTN). The central concept of the CTN is to provide a convenient alternative to the single-occupancy vehicle, using neighborhood-scaled buses that fit into The Hop Bus the local context. CTN has worked to craft a unique brand for its routes, naming each— Hop, Skip, Jump, Leap, Bound, etc.—and painting buses with colorful images and words meant to reflect the people and areas they serve. In addition to skillful marketing, CTN brought enhanced service. Redundant routes were combined, allowing for increased frequencies along key corridors. In the case of the Skip route, when CTN replaced the existing RTD service, service increased by 90% along the Broadway corridor. By 1998, Skip ridership had increased two and a half times above the ridership of its predecessor route.

CTN has been a boon to transit ridership. In 2000, 9% of Boulder residents rode transit to work compared with 4% in 1990. Crucial to the success of CTN is the Eco Pass program. This program allows employers to purchase discounted transit passes for their employees, sometimes as a required transportation demand management (TDM) measure. Moreover, it guarantees a free taxi ride home in the event of an emergency or when workers unexpectedly need to stay late. There is also a neighborhood version that allows groups of 100 or more households to purchase discounted passes.

Sources: T. Winfree and P. Puskarich, “Boulder Redefines Urban Transit,” Community Transportation (November/December 1998) http://www.ctaa.org/ct/novdec98/boulder.asp; City of Boulder, Transportation Division, Transportation Annual Report of Progress: Toward the Goals and Objectives of the Transportation Master Plan for the Years 1999–2000 (January 2000), http://www.ci.boulder.co.us/publicworks/depts/transportation/pdf_documents/2000annual_report.pdf.

Text Box 16.5 development have been selling for $335 per square foot. This is comparable between $210 and $260 per square foot. to LoDo, where the neighborhood As a comparison, the neighborhood average asking price was $329 per average asking price for residential units square foot as of December 2002.32 in the popular Ballpark neighborhood in downtown Denver was $257 per square In Boulder, demand is driven by foot as of January 2003.31 Residential scarcity. According to the city’s Job- units at the Steel Yards development Housing Study, 122,000 people live and have been selling for between $260 and 104,000 people work in the Boulder

340 planning area. Up to 115,000 jobs are monitor its progress toward these goals. projected in the future, compared with Foremost among these initiatives have 5,800 additional housing units, based been the efforts of the Transportation on current zoning (see http://www.ci. Division’s Go Boulder Program, which boulder.co.us/buildingservices/jobs_to_ has implemented the CTN and worked pop/index.htm). The city hopes to to establish a number of transportation redress this imbalance through more demand management (TDM) measures. mixed-use zoning. Current Planning. In an environment Planning Framework where development pressures are high and land supply is constrained, a Speaking at the 1998 American Planning locality has considerable leverage Association conference, Peter Pollock, through the regulatory process to Director of Community Planning for the shape the face of development. The City, noted, “Land-use planning is a city of Boulder has aggressively used major fixation for Boulder, and [the] the development review process to issues are continuously analyzed, constrain the presence of the private discussed, and often hotly debated” (see automobile. Often, the city mandates http://www.asu.edu/caed/proceedings98/ some level of TDM from projects Pollock/pollock.html). He might also going through discretionary review. have added transportation planning to This sometimes involves an employer his comments. For more than 20 years, purchasing transit passes for there have been a number of interesting employees, but it may also include and evolving planning efforts underway site design modifications. in Boulder that help to shape the current framework for TOD. One example of the use of development review to promote more transit-friendly Transportation Master Plan. In the design was in the city’s approval of a 1980s, the city council established an ad CompUSA development along the hoc subcommittee on transportation, Bound bus line on 30th Street. The which articulated a policy calling for, city hopes to see 30th Street redevelop among other goals, a 15% reduction in as a pedestrian-friendly corridor and the mode share of single-occupancy is preparing a detailed area plan to vehicles.33 The city council formally expound its vision. After a year of adopted this policy in its 1989 negotiations surrounding development transportation master plan. In 1996, approvals for the CompUSA facility, faced with projections showing that the large floorplate was designed with even in meeting its mode share goal the parking in the rear and a minimal city would still experience significant setback from the street. An attractive increases in congestion, the council pedestrian plaza fronts the building. revised the goal to focus as well on However, the development’s street- VMT, establishing 1994 as the facing front door is presently kept benchmark year and setting a goal of locked. People arriving by foot or transit 0% VMT growth within the Boulder must walk 250 feet around the building Valley.34 Since 1989, the city has taken to enter through doors that front onto a a number of steps to implement and parking lot. Thus, while the building was

341 designed to be transit-friendly, its like a village rather than a subdivision. operation is automobile-oriented. This Currently under construction, the Dakota wrinkle points to the risks of using ad Ridge project is platted with a New hoc requirements imposed through Urbanist street grid, featuring alleyways development review to “force” more to access parking behind buildings (see transit-friendly land uses, particularly in Photo 16.6). The result is a pleasant the absence of an area plan to provide pedestrian environment replete with design guidelines. sidewalks, pathways, civic and open space, and the screening of parking and Development review has proved more utility areas. successful in promoting transit- supportive design in other locations. In Dakota Ridge contains a mixture of North Boulder, the city had prepared a housing types—condominiums, subcommunity plan, including language townhouses, and single-family detached about the design character that it hoped houses—with higher-density units to achieve: clustered near the village center and planned transit stops. At build out, the This area should be developed with project will consist of 390 residential all the qualities of an attractive, units and 24,000 square feet of civic and established neighborhood: beautiful retail space. and walkable streets . . . convenient transit and neighborhood services, and proximity to a neighborhood Mixed-Use Zoning. Related to the city’s park.35 transportation goals are efforts to address a growing jobs-housing In this case, the city worked with the imbalance. Over the past few decades, homebuilder through the entitlement Boulder has emerged as a regional process to create a development that feels employment center, with more people

Photo 16.6. Transit-Oriented Development on the Urban Fringe. Working within the confines of a subcommunity plan developed for the area known as North Boulder, the city helped to reconfigure the site plan for Dakota Ridge to ensure that it would support the extension of bus service into the project. The city also required that the developer purchase transit passes for each household as a TDM measure. At 55 acres, Dakota Ridge was one of the last large-scale development opportunities within the Boulder Urban Growth Boundary.

342 commuting into the city than leaving to of properties, giving rise to transit- work elsewhere. At present, the city has supportive projects like the Steel Yards a jobs-to-housing ratio of 0.96 to 1, (see Photo 16.7). compared to a ratio of 0.57 to 1 for the region as a whole.36 Officials have Boulder Transit Village drawn a direct link between this worsening jobs-housing imbalance and Most construction along Boulder’s increases in traffic impacts, noting that transit corridors has been developer- those who “in-commute” make longer initiated and market-driven. In a trips than Boulder residents and are community with limited land, developers more likely to arrive in a single- have readily submitted to an arduous occupancy vehicle. Since 1993, the city development review process that expects has been looking for mixed-use transit-friendly design as a condition of development opportunities, hoping to approval. The Boulder Transit Village is stem the rise in in-commuting. In 1997, a bold departure from this mold, with the the council adopted a number of new city playing an entrepreneurial role, mixed-use zones and rezoned a number undertaking joint development to control

Photo 16.7. Mixed-Use Redevelopment Along Transit Corridors. Located along 30th Street, a corridor of industrial and automobile-oriented retail uses, the Steel Yards is precisely the type of redevelopment the city of Boulder hopes will reshape the area over coming decades. The $27-million project is being developed in phases and will total 22 buildings, including 90 residential units and 137,000 square feet of office and retail space, when completed. After rejecting earlier proposals for big-box retail on the site, the city rezoned the property in 1997 to allow for mixed-use development. The city views the Steel Yards as an example of the area’s redevelopment potential and is studying similar opportunities along 30th Street. The photo shows a view of the Steel Yards, with mixed-use commercial buildings fronting onto 30th Street and parking and additional residential uses tucked behind.

343 the timing, orientation, and mix of uses using a low-interest loan provided by around a new intermodal transit center. Fannie Mae. While it appears likely that negotiations with the property owner As a result of transportation studies to will lead to an open market sale, a city evaluate mobility, the city identified a ordinance has authorized the use of need for an intermodal transit center to eminent domain to acquire the site, integrate regional and local buses as well something that the city staff described as as future commuter-rail and BRT important in advancing negotiations for connections along U.S. Highway 36 to sale of the property. Denver. The choice of an intermodal center over expanded park-and-ride The next step in the process will be to facilities reflects the long-term thinking finalize design plans and issue an RFP of the city’s Transportation Division, for development. The city expects the which has long been concerned with housing and commercial portions of the land-use impacts of investment the project to be financed by the decisions. In a new intermodal center, developer. The development will the city’s planners saw an opportunity to consist of 300 affordable and market- advance two of the city’s top priorities— rate rental and ownership housing units multimodal transportation and affordable and auxiliary commercial uses oriented housing—through TOD. around a transit station with 100 park- and-ride spaces. Planning for the Boulder Transit Village began in earnest in 2001 with a site- Completing the station will still require selection process. The intermodal center additional funds, and the city has team identified site evaluation criteria, brought on board some influential allies. including the ability to efficiently In 2003, a U.S. congressional delegation accommodate the transit center, the including Boulder’s representative, Mark ability to provide for TOD and Udall, and James Oberstar of Minnesota, affordable-housing opportunities, and the the ranking Democrat on the House presence of necessary infrastructure. The Transportation and Infrastructure team selected a site along an existing rail Committee, visited the site. Speaking to alignment that best met its criteria. The the local newspaper about his tour along process has not always been smooth. U.S. Highway 36, Representative Property acquisition has taken longer Oberstar observed, “This is the finest than expected. So far, a major hurdle has example of community cooperation I’ve been assembling funds for the $7-million seen anywhere in America.”37 price tag for site acquisition. These funds have been parsed together from a number In addition to serving as an example of of sources, including a $2.5-million staff leadership, The Boulder Transit commitment from RTD’s general funds, Village provides insights into when $1.25 million from the sale of an existing and how RTD best responds to local park-and-ride lot, and $3 million from planning efforts. In the case of Boulder, the Department of Housing and Human timing appears to have been everything. Services. Ultimately, bundling together The city’s plans to develop the the housing funds required borrowing intermodal transit center are years ahead against future departmental revenues of the extension of commuter-rail and

344 BRT service to the area. As a result, Valley is home to only around 60,000 the city has found a flexible agency, people, most of whom live in several ultimately willing to back away from small towns dotted along a 40-mile plans to develop another park-and-ride stretch of State Highway 82 (see facility on U.S. Highway 36 and to Map 16.2). In the Valley, which has direct funds toward the intermodal traffic congestion and some of the center. Experience suggests that when nation’s least affordable housing, cities convince RTD to adjust its capital discussions are underway about spending plans, requests tend to come expanded transit service and “small years ahead of planned expenditures. town” TOD. While at this point, TOD Moreover, RTD seems much more in the Valley is still largely on the responsive to the concerns of local drawing board, there are examples of jurisdictions than to developers. By transit-supportive projects already on playing a lead role, the city has been the ground, and at least one large-scale, able to establish a mutually rewarding resort-based TOD is moving through partnership with RTD. the final stages of the entitlement process. Boulder’s Experience in Summary Traffic congestion in the Valley is driven To date, Boulder’s land-use pattern has by a number of factors, not the least of affected transit more than vice versa. which is the city of Aspen’s cachet as an High-frequency transit is relatively new international destination. This world- and has had relatively little time to affect renowned resort is home to fewer than real-estate development. On the other 6,500 people, but, with an average hand, Boulder’s increasing transit daytime population of over 20,000, it ridership stems from a long-standing generates millions of vehicle trips per commitment to compact development. year.38 Most are made by workers, In the past, the city’s emphasis on traveling into the city from “down valley” walkability and dense, diverse land uses where housing is more affordable. has largely focused on its downtown. Aspen’s average home price today More recently, market dynamics have exceeds $2 million. Also contributing to opened the potential for transit-oriented traffic congestion is the area’s geography. mixed-use redevelopment along bus- The main activity centers are located at served corridors. As infill development either end of this narrow, mountain continues, transit-supportive corridors valley. There is only one route in and one are beginning to take form. route out, Highway 82. Even with two big-ticket projects planned over the next Resort-Based TOD in the Roaring 10 years, conditions on Highway 82 are Fork Valley expected to deteriorate to level of service F by 2015 unless radical changes are While a commute of 1 hour or more introduced.39 each way to work may sound like a distinctly metropolitan phenomenon, Alarm that the Valley’s traffic is getting it is also the reality for many people as bad as Denver’s or that of any big city living in the Roaring Fork Valley of has contributed to a slowly building Colorado. Hardly a metropolis, the consensus around the importance of

345

Map 16.2. Roaring Fork Valley and Environs Source: Roaring Fork Transportation Authority, West Glenwood Springs to Aspen Corridor Investment Study (May 2003) http://www.rfta.com/executivesummary.pdf. transit to the region’s future. Beginning as (RFTA). Established under enabling a local bus service in Aspen and Pitkin legislation passed by the state legislature County, the Roaring Fork Transit Agency in 1997, this was Colorado’s first Rural grew “down valley” as a means of Transportation Authority. With its bringing workers to jobs in Aspen and creation, the operation of regional and Snowmass. In 1997, with assistance from local bus service throughout the region CDOT and Great Outdoors Colorado, and the duties of RFRHA were subsumed Valley jurisdictions joined together as the under RFTA. Today, RFTA operates bus Roaring Fork Railroad Holding Authority service from Aspen to Rifle, a distance of (RFRHA) to purchase the Denver and 70 miles, which extends 30 miles along Rio Grande Western Rail line between the I-70 corridor. RFTA’s main line is its Glenwood Springs and Aspen. This Roaring Fork Valley service, which action has preserved a Valley-wide operates on approximately 15-minute corridor for transit and trail development. peak-hour headways. Since its creation, In 2000, Valley residents across seven RFTA has emerged as the state’s second jurisdictions approved the creation of the largest transit operator, serving almost Roaring Fork Transportation Authority 4 million riders annually.40

346 RFTA recently completed a corridor The study estimates that percentages of investment study exploring long-range people likely to use mainline transit transportation alternatives in the Valley. service would be quite high under either Options include BRT, light rail, and an improved bus or new rail system commuter rail. scenario, thanks in large measure to geography, which has channeled An integral part of the planning process development along the narrow Valley to expand transit service has been the floor. Even so, shares of trip origins and exploration of TOD potential in the destinations within close proximity to Valley. As part of this process, RFRHA transit are expected to decline over time. commissioned a study in 2000 to According to the study, “These findings illustrate “potential town planning and may suggest that communities in the transit-oriented design solutions and Valley review their land-use plans with considerations for the Roaring Fork a goal of intensifying use adjacent to Valley.”41 This study examines two basic station areas.”42 This recommendation transit options: enhanced bus service or is particularly important, given that in rail service. The study found that many instances the report has assumed substantial percentages of people live development will occur at levels of and work in the would-be service area of density not supported by current zoning. an improved bus or new rail system. The study’s findings, many believe, Looking at the ability of transit service are a warning that traffic congestion to impact future land uses, the study and environmental degradation will be projects the percentages of Valley a lot worse if TOD is not aggressively population and employment that would pursued. 1 be contained within ⁄4-mile rings of station areas in the years 2003 and 2020. A number of Valley communities have These projections assume compact, begun to explore the idea of intensifying mixed-use infill around each station by land uses around transit stops through 2020 and do not necessarily reflect community plan updates. Of the “down current zoning ordinances. Projected valley” communities, Basalt has made station-area population and employment the most progress in this regard. In 1999, percentages are shown in Table 16.2. the town of Basalt adopted language in

Table 16.2. Planned Station-Area Population and Employment as a Share of Total Population and Employment in the Roaring Fork Valley, Current (2003) and Projected (2020)

Population Employment Transit Option 2003 2020 2003 2020 Improved Bus 20% 18% 31% 25% Rail 42% 37% 60% 48%

Note: Population is permanent resident population, and employment is winter employment. Bus station areas are based on a 0.25-mile radius, and rail station areas are based on a 0.5-mile radius.

Source: Roaring Fork Railroad Holding Authority, Glenwood Springs to Aspen/Pitkin County Airport Corridor Investment Study, Transit Oriented Community Design Report (February 2000).

347 its master plan calling for TOD planning orientation that complements the town’s principles to be utilized in the design and historic past. The largest development in layout of areas surrounding transit downtown Basalt, the Ute Center contains stations.43 It also made modifications that 48,000 square feet of office and retail were informed by expectations about space and 42 residential units. All parking future transit service to its Future Land is below grade and accessed through a Use Map.44 These policies are reflected single driveway. Located immediately in a recently adopted PUD for the across the street from a bus stop, the Ute Willits Town Center, which features a Center is both an origin and a destination commercial core that uses a small-block along RFTA’s route from Glenwood gridded street pattern and includes a Springs to Aspen. transit center for use by RFTA’s regional buses. Another community that has been planning for TOD is Snowmass Village. Even before recent discussions about With more than 700,000 people arriving BRT and rail transit, Basalt had begun by bus each winter, Snowmass Village is planning for TOD. In 1997, the town clearly not your average small town. It is approved the Ute Center (see Photo 16.8). home to some of Colorado’s best skiing The development plan was shaped in and served by a free skier shuttle, large measure through a town design operated by RFTA and paid for by the charrette and reflects an interest in Aspen Skiing Company to the tune of supporting a vibrant downtown through more than $1 million per year.45 The the addition of more residential and community expressly favors maintaining commercial uses to the area. The Ute “the character of its small-scale, two- Center contains a mix of residential, lane road system,” and has adopted office, and retail uses with a pedestrian the following policy language in its comprehensive plan to support transit:

Snowmass Village shall make land use decisions, which result in a reduction of automobile traffic, better use of transit, more effective parking management and more linkage of pedestrian/bicycle trails. Public transit service and access to transit will be required of all future development. Impact assessments on development should cover both capital and operating costs.46

Such policies are as progressive as any to be found in the United States, not only Photo 16.8. Small Town TOD. requiring a transit connection for new Located in Basalt, Colorado, a town of development, but also requiring that it 2,700 people, the Ute Center combines pay the capital and operating costs of retail, residential, and office uses across service delivery. Snowmass Village’s the street from an RFTA bus stop. commitment to transit and alternative

348 modes of transportation is shared by the a necklace of compact, transit-served city of Aspen. Both jurisdictions, along communities. It is a daunting challenge with Pitkin County, have adopted a for any region to coordinate land-use policy goal of “limiting vehicles in planning efforts; however, more than 2015 to levels at or below those of most places, the Roaring Fork Valley has 1994.”47 As resort communities, a shared economic interest in sustainable, both are aware that their economic transit-served development. This is true well-being is closely tied to an efficient from the perspective of the resort and uncongested transportation system, communities, dependent on the area’s which not only delivers visitors to their idyllic charm, as well as the “down destinations, but also helps to secure valley” residents who in-commute to those areas as vibrant, pedestrian- jobs, which are inextricably linked to the friendly places. tourist industry’s economic well-being.

Snowmass Village is currently working A number of efforts are underway to out the details of transit-supportive strengthen the Roaring Fork Valley’s policies as it reviews a development institutional capacity to coordinate application to create a new base village. transit and land use. These include the This development, known by the town’s “Community Economics and Land Use in name, Snowmass Village, is to include the Mountain Rural Resort Communities 635 condominiums and 184,000 square Project,” an effort sponsored by the feet of nonresidential space comprising Northwest Colorado Council of a children’s center, conference space, Governments and a local nonprofit, restaurants, and shops. Current plans Healthy Mountain Communities. The show buses arriving at a new central purpose of this planning effort is to transit and check-in center that sports “develop an approach for integrating seven bus pullouts. This is in keeping demographic, economic, and land use with the city’s policies and the information into a decision making tool developers’ vision of a quaint for community leaders and policy pedestrian village. makers.”49 One product of the effort is a GIS-based tool to help decision-makers While there is a growing appreciation of and community members visualize the transit’s role in the region’s future, there impacts of various land-use policies and is still much to be done by way of land- transportation investments. Another effort use planning and interjurisdictional is the Affordable Housing Initiative, coordination if transit is to significantly sponsored by Healthy Mountain alter the Valley’s land-use character. Communities. The initiative has led As the RFRHA’s study from the year to the development of a regional 2000 notes, localities in the Roaring affordable-housing needs analysis and a Fork Valley need to review land-use framework for regional collaboration, ordinances to intensify development as well as a model affordable-housing around transit stations.48 Without a ordinance, which has been adopted by comprehensive plan for how growth will two jurisdictions to date.50 Placing be managed, the Valley is more likely affordable units near transit stops is a to fill with low-density development, key element of the initiative. These unconnected to transit, than to develop as efforts should provide a solid foundation

349 for land-use planning cooperation friendly, bus-oriented development. This around the issue of TOD. has come with its own set of challenges, including limited control over the pace Conclusions and Lessons of redevelopment along transit corridors. As the city prepares for the arrival of a In Colorado, TOD is occurring across a rail transit connection to Denver, it has broad array of landscapes. Numerous assumed a more proactive role, familiar implementation tools are being used to to other TOD-friendly communities in bring about TOD, suited to each area’s the Denver area such as Englewood and political and economic realities. Even Arvada. A particularly important lesson so, the motivations for TOD are quite from Boulder is that transit-supportive similar. Coloradoans are displeased with development is not necessarily the current face of their state’s physical dependent on steel-wheel technology. growth, and, while opinions are mixed High-quality bus-based services, about how best to proceed, TOD is introduced under the CTN initiative, gaining traction in a number of highlighted by the popular and colorful jurisdictions. Hop-Skip-Jump “brand,” and backed by proactive planning, Boulder shows, can In the Denver area, rail transit spur moderately dense, mixed-use investments are opening up growth along major routes, even in unprecedented TOD opportunities, moderate-size communities. although they will not necessarily translate into TOD over the short term, In the Roaring Fork Valley, TOD offers a particularly in redevelopment contexts. potential solution to a pattern of land Where TOD has occurred in the Denver consumption that threatens the region’s metropolitan area, public entities have tourism-based economy while increasing generally stepped forward to make commute distances and traffic tie-ups. long-term investments in station-area A worsening jobs-housing imbalance, development. These public-sector owing in large part to service-industry investments have been rooted as much workers being priced out of local housing in “placing making” as in transportation markets, has catapulted transportation benefits. They reflect long-term thinking and land-use integration toward the top and dedicated political leadership to of the list of local concerns. Even in translate the ever more familiar idea rural-like Pitkin and Garfield Counties, of TOD into a shared vision for TOD is being seized on as one of the community revitalization. more viable means of better integrating transportation and land development. In Boulder, TOD has evolved under a While hard and fast lessons about the policy framework that is distinct from implementation of TOD in the Valley other communities in the Denver region. may still be some years away, the There, land supply is tightly constrained ongoing execution of comprehensive as a matter of public policy. As a result, plan policies that encourage a fine- TOD has not required the same level grained connection between development of public participation and has instead and transit services has begun to yield been guided by a regulatory process promising results. In many ways, that emphasizes compact, pedestrian- Colorado’s Rocky Mountains stand as a

350 test bed for the viability of TOD in a with the regional plan, asking each member non-urban setting. jurisdiction to complete an assessment of its local comprehensive plans. Only 4 of the 50 member jurisdictions bothered with the process. DRCOG has since ratcheted up its Notes incentives for local jurisdictions to take note of the regional plan by assigning points in the 1 Pew Center for Civic Journalism, Straight TIP for compliance with certain aspects of Talk from Americans (2000). See Metro Vision 2020. Thus far, these points http://www.pewcenter.org/doingcj/ have been targeted largely at establishing a research/r_ST2000denver1.html. UGB; transportation projects submitted as 2 T. Lomax and D. Schrank, 2002 Urban part of the TIP process, which come from Mobility Report (College Station, Texas: jurisdictions that have adopted a UGB in Texas Transportation Institute, 2003). conformance with Metro Vision 2020, receive an additional 20 points out of 125 possible 3 K. Schneider, “Five Commutes That Make points, making these projects more likely to You Feel Better About Yours,” New York receive funding. This initiative has been Times, October 20, 1999. Retrieved from relatively effective, with 26 of the member archives, http://www.nytimes.com. jurisdictions adopting UGBs thus far, 4 Healthy Mountain Communities, Local and representing more than 80% of the Regional Travel Pattern Study (1997–1998), metropolitan area’s population. Other (Carbondale, Colorado, 1998). See http:// Metro Vision elements have been assigned www.hmccolorado.org/travelpatterns.htm little or no consideration in the allocation of transportation funds. As an example, 5 Noel, T. J., Mile High City: An Illustrated DRCOG assigns only a single point in the History of Denver (Carlsbad, California: TIP process for transportation projects that Heritage Media Corporation, 1997). are located in a defined “urban center”; as a 6 Ibid. Noel explains this problem, noting the result, only a handful of jurisdictions have example of Federal Heights, a blue-collar gone through the process of designation. town, “caught in between two much larger Staff members at DRCOG indicate that and more aggressive Adams County they are considering a reallocation of points neighbors. Westminster and Thornton used within the TIP system to attempt to affect tax breaks and other ploys to persuade giant other elements of the Metro Vision plan. It K-Mart and King Soopers stores to move out remains to be seen whether this will be an Metro Vision of Federal Heights, leaving that town with outcome of the 2030 planning giant empty stores—and a loss of 30% of its process. sales tax revenues.” 12 City and County of Denver, “Chapter 2,” in Blueprint Denver (2002), 14. 7 Denver Regional Council of Governments, Metro Vision 2025 Interim Regional 13 City and County of Denver, “Denver TOD Transportation Plan: The Fiscally Coalition,” Unpublished program description. Constrained Element (April 17, 2002). 14 Ibid. 8 Denver Regional Council of Governments, 15 Regional Transportation District, Fast Facts Metro Vision 2020 Plan (July 2002). See and Figures, Updated May 11, 2003. See http://www.drcog.org/downloads/ http://www.rtd-denver.com/History. 2002_Metro_Vision_Plan-1.pdf. 16 Fredrick Ross Company, View: Commercial 9 Ibid., p. 27. Real Estate Quarterly, Vol. 8, No. 1 10 A. Rhines, “Mile High Compact Seeks (January 2003). Regional Planning,” The Boulder County 17 Cushman and Wakefield, Denver Colorado, Business Report, August 25, 2000. Office Market Fourth Quarter 2002. See 11 Shortly after Metro Vision 2020 was adopted, http://www.cushmanwakefield.com/flyers/ DRCOG produced a checklist for consistency Den_Off4Q02.pdf.

351 18 Lower office rents at the Millennium 33 City of Boulder, Department of Public Financial Center reflect a discount given to a Works, Transportation in Boulder: single large user, who rents three floors of the Yesterday, Today, Tomorrow, video building for $24.75 per square foot. recording of presentation, October 22, 2001. Otherwise, office rents in the project average See http://www.ci.boulder.co.us/publicworks/ $27.50 per square foot. depts/transportation/master_plan/ traninboulder.html. 19 City of Arvada and Arvada Urban Renewal Authority, Olde Town Renaissance Plan 34 City of Boulder, Transportation Division, (August 1999). Boulder Transportation Master Plan (1996). See http://www.ci.boulder.co.us/ 20 See Caltrans, Statewide Transit Oriented publicworks/depts/transportation/ Development Study Factors for Success in master_plan-new/1996TMP/full_tmp_ California, Technical Appendix (September document.html. 2002), pp. 25–27, http://www.dot.ca.gov/hq/ MassTrans/tod.htm; D. Sokol, “Glass Slipper 35 City of Boulder, North Boulder Redux,” Grid Magazine (December 2001); Subcommunity Plan (1995), 11. C. Lockwood, “Town Centers Ascendant,” 36 J. Straub, “Jobs-to-Worker Disparity Grid Magazine (December 2001). Grid Underscored,” The Boulder County Business Magazine was hosted at http://www.gridsite. Report, December 3, 1999. See http://www. com/dec2001-reduxhtm, but is no longer bcbr.datajoe.com/app/cda/djo_cda.php. available. 37 T. Neff, “Officials Show Off Transit Plans,” 21 Sokol, December 2001, op. cit. (See Note 20.) The Daily Camera, April 23, 2003. See http://www.thedailycamera.com. 22 E. Payne and R. Simpson, “Memorandum from Office of Neighborhood and Business 38 City of Aspen and Pitkin County, Visitors Development to Department of Finance, City Information, website, retrieved May 15, of Englewood” (December 11, 1996). 2003. See http://www.aspenpitkin.com/misc/ visitors/population.cfm. 23 Sokol, December 2001, op. cit. 39 Roaring Fork Transportation Authority, 24 Ibid. West Glenwood Springs to Aspen 25 C. Lockwood, “Raising the Bar,” Urban Corridor Investment Study (May 2003). Land, Vol. 62, No. 2 (February 2003). http://www.rfta.com/executivesummary.pdf. 40 26 Ibid. Ibid. 41 Roaring Fork Railroad Holding Authority, 27 Ibid. Glenwood Springs to Aspen/Pitkin County 28 J. Rebchook, “Trammell Crow Sells Airport Corridor Investment Study, Transit Complex,” Rocky Mountain News, April 25, Oriented Community Design Report 2003. See http://www.insidedenver.com. (February 2002), 6. 29 Denver Regional Council of Governments, 42 Ibid, p. 5. Metro Vision 2020 Plan (July 2000). 43 Town of Basalt, Town of Basalt Master Plan See http://www.drcog.org/downloads/2002_ (August 1999), 100. Metro_Vision_Plan-1.pdf 44 Ibid. The Town of Basalt Master Plan notes 30 A. Stogner, “High-End Lofts, Condos Join “There are several factors that have Boulder’s Urban Mix,” Boulder County influenced the decisions incorporated in the Business Report, July 13, 2001, Sec. 2, p. 45. Future Land Use Map. One of the most 31 J. Myslik, Distinctive Properties LLC, significant of these is the proposed valley- Unpublished market data (January 2003). wide transportation system between Aspen and Glenwood Sprints.... Trustees believe 32 J. Myslik, Distinctive Properties LLC, the transit corridor should be located along Unpublished market data (December 2002). Alignment C (Highway 82 right-of-way)

352 through the Three Mile Planning Area. This 49 G. Severson, Memorandum from Executive belief drives many elements of the Future Director to the Executive Committee and Land Use Map, including the location of the Board of the Northwest Colorado Council potential transit stations, limits of the urban of Governments (December 7, 2000). growth and urban services area boundaries, See http://www.nwc.cog.co.us/ and the development pattern around the Executive%20Director%20Reports/2000/ potential transit station area” (p. 108). 12-2000.pdf. 45 Roaring Fork Transit Agency, Economic 50 See Healthy Mountain Communities website: White Paper:Mobility and Economic http://www.hmccolorado.org. Interdependence RTA Action Plan (February 1999). Photo Credits 46 Town of Snowmass Village, Chapter 7, Comprehensive Plan (January 1999), 1. All photos by S. Murphy 47 Roaring Fork Transportation Authority, May 2003, op. cit., p. S-22. 48 Roaring Fork Railroad Holding Authority (February 2002) op. cit.

353 Chapter 17

Portland’s TODs: Building Community on a Regional Scale

The Portland region has the most describes how TOD planning has aggressive TOD program in the United evolved over time and describes the States. In Portland, TOD is linked to “toolbox” used by various jurisdictions many goals and has been broadly to facilitate TOD. This is followed by implemented. Nearly every one of the profiles of three TODs that illustrate region’s light-rail stops has witnessed some of the opportunities and constraints TOD activity to some degree. At the of pursuing TOD in different settings, same time, Portland has very high even in a favorable setting like Portland. expectations of its TODs, and thus The concluding sections speculate on the its experiences may not be easily future of TOD in Portland (e.g., whether transferable to other cities and regions. it is trying to do too much and whether it Notwithstanding government’s strong can succeed on all fronts) and role in promoting TOD and “shaping” summarize lessons learned. growth, market forces still matter, as some of the TODs profiled in this case The Regional Policy Framework study illustrate. While other studies of for TOD Portland’s TOD have only focused on its most successful light-rail examples Over the past 25 years, TOD has become (e.g., Orenco Station), this case study part of the underlying policy framework highlights TODs that have received less of Portland’s comprehensive growth attention in the past and describes two management at a community and projects (The Round and Central regional scale. TOD has become one of Commons) that experienced difficulties the primary policy and implementation when governments pushed the envelope tools that the state, the region, and local of what could be expected from TOD.1 governments regularly call on to help Although these projects are now on maintain a compact urban form, reduce course for long-term success, they dependence on the automobile, and nevertheless provide lessons for other support reinvestment in centers and regions and developers attempting to corridors. Over time, sophisticated achieve multiple objectives in building developers have learned that sites TOD. This study also takes a look at adjacent to transit are more likely to development activity presently occurring come with incentives for development along the Portland Streetcar line. than sites that are not near transit.

Portland’s experiences with TOD have The greatest attention to TOD is focused evolved over 25 years, from being on the stations of the Portland Streetcar largely an afterthought to becoming one and the region’s three light-rail lines. For of the primary considerations in rail- example, legally binding station-area facility planning. The next section plans were funded by TriMet, the

355 regional transit agency, and adopted by officials, local government staff, land local governments before the Eastside owners, and neighborhoods; and and Westside light-rail lines opened for service. Minimum densities, parking • Setting up a self-sustaining maximums, design requirements and framework to promote TOD once prohibition of automobile-oriented uses the planning is complete.2 (through interim zoning overlays) are features of the plans for areas within TriMet’s involvement in TOD has been walking distance of the stations. Local as an advocate, an educator, and a governments along the corridors funder. The agency has been willing to participated in these coordinated multi- provide substantial time and resources to jurisdictional planning programs because further the implementation of TOD and they saw light rail as a means to the region’s vision of “growing up, not implement their comprehensive plans. out.” At the same time, TriMet has been a major beneficiary of those regional The core objectives of station-area policies. By focusing growth next to planning in Portland have remained transit stops, the policies help to fill fairly constant over the years. They TriMet’s trains and buses. Since 1990, include the following: ridership on buses and light rail has grown at a rate significantly higher than • Reinforcing the public’s investment both population and vehicle miles in light rail by ensuring (via rezoning) traveled (see Figure 17.1).3 that only transit-friendly development occurs near stations; Station-area plans are just one slice of a larger pie. The Portland region arguably • Recognizing that station areas are has the nation’s most aggressive TOD special places and the balance of the program, but it has also placed the region is available for traditional highest stakes on what it expects from development;

• Seizing the opportunity afforded by rail transit to promote TOD as part of a broader growth management Population 24% strategy;

• Rezoning the influence area around Vehicle Miles Traveled 35% stations to allow only transit- supportive uses; TriMet Ridership 49% • Focusing public agency investment and planning efforts at stations with the greatest development 0% 10% 20% 30% 40% 50% opportunity; Percent Change

• Building a broad-based core of Figure 17.1. TriMet’s Comparative Ridership support for TOD with elected Growth, 1990–2000.

356 TOD. The region’s vaunted growth abatements. Nonetheless, nearly 8,000 management strategy is built around housing units have been permitted in the transit. The 2040 Growth Management Westside Station areas in those three Strategy (“build up, not out”) features a communities (see Map 17.1). This tight UGB, focusing growth in existing includes the National Association of built-up areas and requiring local Homebuilders’ 1999 Planned governments to limit parking and adopt Community of the Year, Orenco Station. zoning and comprehensive plan changes that are consistent with the Evolution in Transit to growth management strategy. By Encourage TOD 2040, two-thirds of jobs and 40% of households are to be located in and The Portland region’s approach to TOD around centers and corridors served has evolved over the past 30 years as bus by buses and light-rail transit.4 and rail systems have grown. Moreover, transit development strategies have Over more than two decades, the evolved to reflect the region’s growing Portland region has raised the bar of interest in using transit as a community- what it expects from TOD, and along building tool. The result is that today, with this it has continued to add new transit and TOD planning are linked regulatory and financial tools to its TOD inextricably. implementation toolbox—tools that are not generally available in other The roots of the region’s progressive communities (see Table 17.1). The approach to land use and transportation breadth of regulations and incentives integration can be found in Portland’s directed at TOD naturally raises the celebrated 1973 Downtown Plan. The question of what the region is getting in Plan envisioned a transit mall as the exchange. Is TOD overly subsidized and centerpiece of the downtown loaded with incentives, as some critics revitalization strategy. When the Transit argue? Is TOD something the market Mall opened in 1978, it was the region’s would not produce on its own? first major improvement in transit and the first installment in a signature Portland’s TOD planners answer these strategy that would repeat itself over and questions by saying that financial over across the region—using transit incentives, such as tax abatements, are infrastructure investments to achieve provided to push the private market broader community objectives. further than it would otherwise go with respect to features and amenities desired The evolution of the region’s strategy by public policy, achieving higher has changed from TOD being largely an densities, better urban design, reduced afterthought (with Portland’s first rail parking, cleaner air, and greater housing line) to proactively expanding transit to affordability. The cities of Portland and build new communities (a primary Gresham are currently granting TOD tax rationale for building the Portland exemptions. The cities of Hillsboro and Streetcar). As local decision-makers Beaverton, and Washington County gained experience using rail investments along the Westside light-rail line, to achieve broader community however, have opted not to grant tax objectives, the design, financing,

357 Table 17.1. Portland TOD Toolbox Snapshot TOOL BRIEF DESCRIPTION

Statewide Tools Urban Growth A central tenet of Oregon’s Land-Use Planning Program. Ensures a 20- Boundary (UGB), year land supply inside and preserves rural areas outside the UGB. 1979 Portland’s UGB includes 254,000 acres. Transportation Requires metro areas to set targets and adopt actions to reduce reliance Planning Rule, 1991 on the automobile. Directs metro areas to implement land-use changes to promote pedestrian-friendly, compact, mixed-use development. Transportation & Promotes high-quality community planning by providing local Growth Management governments grants, Quick Response Teams, and Smart Development Program, 1993 Code Assistance. Over $6.7 million in grants from federal transportation funds were provided between 1993 and 2002. TOD Tax Exemption, Allows eligible projects to be exempt from residential property taxation 1995 for up to 10 years. The cities of Portland and Gresham have utilized this program.

Regional Tools

Regional Growth The region’s 2040 Growth Concept focuses growth on transit centers Management, 1994 and corridors inside a tight UGB. Local governments must comply with Regional Functional Plan requirements by adopting growth targets, parking maximums, minimum densities, and street connectivity standards. TOD Implementation Uses a combination of local and federal transportation funds to spur the Program, 1998 construction of TOD. The level of involvement in 12 TODs has ranged from $50,000 to $2 million. The primary use of funds has been for site acquisition and TOD easements. Metropolitan Regionally controlled transportation funds targeted to implement the Transportation 2040 Growth Concept. Since 1996, the region has been flexing, on Improvement Program average, $46 million annually in federal transportation funds in support of the growth concept.

Local Tools Westside Station-Area TriMet, Metro and ODOT funded preparation and adoption of plans by 1 Planning, 1993–1997 local governments for the area within ⁄2 mile of LRT stations. Plans included minimum densities, parking maximums, a design overlay for building orientation to transit, and prohibition of automobile-oriented uses. Joint Development, TriMet has written down the value of project land reflecting “highest 1997 and best transit use” to leverage three innovative infill projects along the Westside LRT TOD Tax and Fee The city of Gresham provides 10-year TOD tax exemptions and a 26.9% Exemptions discount on traffic impact fees as an incentive to locate development in TOD districts.

358 extension when planning for the line commenced in 1996. Bechtel Enterprises contributed $28.2 million toward the $125-million light-rail project. In return, Bechtel, in partnership with Trammell Crow, is to develop a 120-acre TOD at the entrance to the airport.7 To date, none of the expected 10,000 jobs and $400 Map 17.1. TriMet’s MAX Light-Rail million in development has occurred System, 2003. Source: TriMet. since the line opened in 2001. A soft economy and the events of 9/11 are and rationale behind Portland’s growing cited as reasons for the delay. rail network changed. Some milestones include the following: • Community revitalization and reinvestment have been guiding • TOD was a novelty when Portland’s principles in the planning and Eastside light-rail line was designed implementation of the Interstate in the mid-1970s. Consideration of light-rail line (opened in May 2004). TOD did not occur until after the As part of the city of Portland’s alignment and station locations “Community Livability were fixed.5 Implementation Strategy,” the Interstate Corridor Urban Renewal • Informed by the Eastside experience, Area will provide $30 million of the the approach for the Westside light $350-million project cost. rail was markedly different. In the late 1980s, the Westside alignment • For the planned I-205 light-rail and station locations were designed segment in east Portland, the region specifically with future development has again incorporated real-estate in mind. As Newsweek put it in 1995, development into the design, Portland is “building transit first, construction, and financial strategy. literally in fields, in the hope TriMet’s recent RFP seeks a development will follow.”6 contractor/developer to “effectively integrate land development • Planning for the Portland Streetcar in opportunities into the final design the early 1990s focused on spurring and construction of the project.”8 housing construction in the Central City, particularly in undeveloped TOD in Portland areas like the River District. The Streetcar, which opened for service in TOD implementation has accelerated 2001, has been described as a housing since the opening of the region’s second and redevelopment tool as much as a light-rail line (Westside) in September transportation project. 1998. By TriMet’s estimate, more than $3 billion in new development has • TOD was a central feature in the occurred within walking distance of the financing of the airport light-rail stations along the 38-mile system.9

359 Reflecting the role of TOD as a Center Commons fundamental city-shaping tool in the Portland region, TOD planning and The Center Commons is a mixed-use, implementation is today being pursued primarily residential community with at multiple levels. Agencies actively 314 housing units located 5 miles east of working on TOD include the state of downtown Portland (see Photo 17.1). Oregon’s Community Solutions Team, The project is immediately adjacent to TriMet, Metro (the regional the south side of the Banfield (I-84) 1 government), the Portland Development Freeway, about ⁄4 mile from the Commission (Portland’s urban renewal 60th-Avenue MAX light-rail station, agency), and the cities of Portland, which abuts the north side of the 10 1 Gresham, Beaverton, and Hillsboro. freeway. It is also within ⁄3 mile of A product of these collective efforts three Tri-Met bus routes (#19, #71, and has been three new TODs—Center #20). Downtown Portland is just 19 Commons, The Round, and the Pearl minutes away by light rail. District. As discussed in this section, the path to becoming a TOD has at times The Center Commons is notable in the been rocky, but as lessons are learned Portland region for having gone the and put to good use, the region is poised farthest in developing mixed-income to be both smarter and more measured as and for-sale housing on a single site. it pursues the next generation of TODs. In addition, it is the first major infill

Photo 17.1. Center Commons. Center Commons is a mixed-use TOD combining 314 units of for-sale, market-rate and affordable rental housing on a 4.9-acre site. The TOD has high transit use; 46% of work trips and 32% of non-work trips are on transit, a significant increase from residents’ previous levels. Rendering (top left): Otak Incorporated.

360 TOD along the freeway section of light housing affordability (part of the project rail in the city of Portland. This section would be earmarked for low-income of the Eastside MAX parallels the housing), and, in redeveloping an old freeway for 4.5 miles and was never Department of Motor Vehicles lot, given much TOD consideration. Thus, neighborhood revitalization. PDC the project illustrates the challenges of purchased the site for fair market value trying to serve physically constrained from the ODOT in 1996. light-rail alignments. Finally, this project introduced mixed-use infill to a There were no significant zoning neighborhood that is not well connected obstacles to overcome, as the site was to other major activity centers and that located in a designated Light-Rail has no recent precedent for mixed uses Station Area in Metro’s 2040 Plan. or infill. Transit-supportive zoning for the area had been adopted as part of the Transit Planning for a potential TOD project Station-Area Planning Program in the began in 1994, when the city of Portland early 1980s. Under the city’s code, the and the local neighborhood convened site could include up to 500 housing meetings to discuss how the site could be units and had a 100-foot height limit. developed. The Oregon Department of Off-street parking would be required. Transportation (ODOT) owned the site, Other “assets” included proximity to a but had ceased operations in the early large local grocery store, a hospital, and 1990s. In the end, the neighborhood was a MAX station; a “stable” surrounding receptive to the idea of building a TOD neighborhood; a relatively large site; and so long as it met the following mature trees. conditions: pedestrian safety and access to MAX would be improved, the project On the constraints side of the ledger, the would include open/recreation space, site area had narrow sidewalks, congested building heights would be compatible arterial access, industrial uses on the with the neighborhood, and the large oak other side of the freeway, and no trees on the site would be preserved. precedent for high density or mixed uses in the neighborhood. In addition, local In 1995, the Portland Development commercial rents were too low for new Commission (PDC), the city’s construction. Finally, access to light rail redevelopment agency, conducted a in the freeway median is not ideal, and feasibility study on developing the 4.9- the freeway generates lots of noise. acre parcel using Transportation Growth Management funds from the state. At the PDC held a development offering in time, the parcel contained a vacant one- 1996 and selected a proposal from story office building and a large surface Lennar Affordable Communities (LAC), parking lot (used informally by MAX who would become the master developer park-and-riders, and weekend carpoolers of the project. PDC selected LAC’s to regional recreation destinations). The proposal because LAC offered to study determined that a TOD project construct more affordable housing than would fit well with Portland’s growth the preliminary development plan management objectives: density near required, within the budget established light rail, a mix of housing products, for the project. PDC required that at least

361 40% of the constructed units be pedestrians, a playground, a bosque of affordable, and the LAC proposal trees, parking, drop-off zones, and reserved 75% of the project’s 288 rental generous sidewalks that are short-cuts to units for residents making less than the transit.”13 In addition, mature oak trees area’s median income. were preserved by using context- sensitive design to set some buildings As the final development program began back from street. The master plan to take shape, market-driven cost cutting masses the largest buildings on the edges and engineering considerations were of the property facing the freeway and a threatening to reduce some of the transit- freeway off-ramp. The design gives a supportive elements of the project (e.g., sense of modest density, using the mix of housing types and high-quality largest buildings on the edge as a “town pedestrian connections). In February wall” to act as a sound and visual buffer. 1999, the Metro TOD program (see The townhouses are particularly Text Box 17.1) purchased the site from appealing and include three levels, two PDC for about $1 million (the appraisal bedrooms, bonus rooms, birch and value), subdivided the parcel, and stained concrete floors, wood-frame established TOD easements, covenants windows, open metal stairs, glazed and restrictions to ensure that local doors, metal decks, balconies, patios, residents could use on-site pedestrian and single-automobile garages. paths to access the nearby MAX station.11 The property was then sold to Development costs for the Center three different development entities Commons TOD totaled $30 million. constituting the LAC team after the land Funding sources included low-income value was reduced to $250,000 to reflect housing tax credits, state of Oregon tax- changing market conditions.12 exempt bonds, a PDC loan, a Fannie Mae loan, general partner equity, and an Environmental remediation on the site FTA TOD grant. Additionally, the occurred shortly thereafter and included project received a 10-year property-tax removing surface soil contamination to a exemption. highway roadbed, removing asbestos, and recycling the old concrete building The Center Commons project is one of as site fill. The developer paid for the the few Portland-area TODs in which remediation with assistance from “before-and-after” travel behavior has ODOT, and project construction started been systematically measured. A survey in April 1999. of the 288 rental apartments found that transit mode share increased nearly 50% The Center Commons was completed in for work trips (from 31% before to 46% early 2001 and consists of four separate after moving into the Center Commons) buildings, each serving a different and by 60% for non-work trips (from 20% clientele. Table 17.2 describes the to 32%).14 By comparison, transit work- buildings and their target markets. trip mode share for the city of Portland was 12.3% in 2000 according to Census In the words of project architects, “the 2000. While the high number of low- focal point for Center Commons is a income households is a major reason for ‘woonerf’ space that congregates cars, the high mode share in general (76% of

362

Metro TOD Implementation Program

To help simulate the construction of transit villages, Portland’s regional government, Metro, operates the innovative TOD Implementation Program using federal transportation funds. The TOD Program operates through a series of cooperative agreements between Metro and local jurisdictions, and it utilizes development agreements with private developers. The primary use of TOD-Program funds is site acquisition. Operating with two full-time staff members, the Program has been directly involved in the funding of 12 different TOD projects with a level of involvement ranging from $50,000 to $2 million in site control and direct financial participation in TODs. Another Portland program is the CMAQ TOD Program run by the Portland Development Commission. This program was funded with $3.5 million in CMAQ funds; the money is used to acquire land and design and construct transit amenities as part of TODs. A total of nine projects received funding.

According to Metro’s Marc Guichard, “Real-estate development economics often make the dense mixed-use TODs sought in local plans infeasible in much of the region. A development rule-of-thumb is buildings should be constructed over parking and uses should be stacked when land is more expensive than a parking structure. In the Portland region, this rarely occurs if market dynamics are generating land values less than $50 to $60 per square foot. In fact, parcels near most of the transit stations in the region, outside downtown Portland, generate land values of only $6 to $10 per square foot.”

“Metro’s TOD Program pushes the development envelope by using public-private partnership techniques to secure more TOD-like projects than would otherwise be developed on a given site. For example, on a site where the free market would likely produce three-story apartments with surface parking and no retail, the TOD Program would push for five-stories with podium parking and ground-floor retail that may have four to five times more dwelling units and induce significantly more transit ridership.”

Property is acquired, re-parceled, and planned, then sold with conditions to private developers for constructing TOD and/or dedicated to local governments for streets, plazas, and other public facilities where appropriate. In many cases, the land value is written down to cover the high development costs required to construct a specific TOD project. In such cases, a “highest and best transit use” appraisal is used to establish the sale price.

The program is the first of its kind in the United States to use flexible federal transportation funds for TOD implementation and has been instrumental in helping shape the joint development policies of the Federal Transit Administration.

Text Box 17.1

363 Table 17.2. Center Commons Buildings BUILDING UNITS AND USES MARKET DESIGNATION Center Village 60 apartments Families at or below the median income Leasing office (20% of units available to households Grandma’s Place Daycare below 30% of the area’s median) The Commons 172 apartments Available to seniors making 55% of the median income or lower 5819 Building 56 apartments Modified market rate (income restrictions) Ground-floor commercial (H&R Block)

Center Townhouses 26 for-sale townhouses Market rate

respondents had an annual household on the market, however, 12 remained income of $25,000 or less), transit use has unsold. The developer, Innovative still increased significantly among new Housing, Inc., was spending nearly residents of Center Commons. The survey $20,000 per month covering mortgage also found that the top reasons for moving costs. This practically destroyed the to the project were new buildings, nice company. Virtually all parties agree designs, and proximity to transit. that the townhomes are relatively inexpensive, given their high quality The project is parked at 0.6 spaces per compared with other townhouse/ unit, and parking in and around the condominium locations. Several project has been problematic. The tight reasons have been offered for the ratios were justified in part by the high poor absorption, including proportion of senior units in the project. The aforementioned survey found that • Location: For its location, the almost 30% of respondents own fewer project’s density and design may automobiles now than they did at their be ahead of the market. The previous residence. Nevertheless, the neighborhood and the distance from project appears to be generally under- downtown—5 miles—may not be parked, and parking often spills into the attractive to younger buyers. Also, adjacent neighborhood. Residents the townhomes face two busy streets. complain there is not enough visitor parking. All of the parking is above • Market: According to Innovative ground (some is located in podiums), Housing, Inc., too many townhomes which, according to some residents, were built. This was a concession to makes the development feel denser neighbors who wanted more owner- than it actually is. occupied units in the project.

While the project is meeting or exceeding • Tenant mix: Proximity to the its transportation objectives, it has affordable units may have been a struggled financially. The lease-up for deterrent to attracting home buyers. the market-rate apartments happened quickly and experienced no problems. • Price: The goal was to make the One year after the 26 townhomes went townhomes affordable to first-time

364 buyers, but costs escalated rapidly In closing, the overall goals set for the because of a changing regulatory Center Commons have been largely met environment (i.e., building code or exceeded. The neighborhood got an changes; separate design reviews by attractive development where there had the city, PDC, and the state; slow previously been an empty eyesore, the final permitting; construction delays; project met the increased density targets and construction cost overruns). for the site, transit use for work and non- work trips has increased markedly, the • Design: The contemporary design, project has helped to revitalize the while awarding-winning, may not be immediate neighborhood, and the project appealing to everyone. Two levels of provides a range of affordable-housing stairs may be difficult for seniors, opportunities. The project also and some contend that the project is incorporates attractive designs. not “kid friendly.” At the same time, the project has fallen • Project management: A developer short of its financial targets. According agreement was entered into between to one of the development partners, the PDC and Lennar Company. private developers have struggled Innovative Housing, Inc., which financially, and only PDC has not lost contracted with Lennar, did not have money on the project so far. Financially, enough control over the designs and the project may have tried to accomplish too much on a small site. costs and bore the brunt of the financial problems. Regardless, at the end of the day, the community has a well-performing, well- The last townhouses were finally sold for designed mixed-income TOD. Whether prices from $165,000 to $175,000, others can afford to copy Center below the initial level of $200,000. Commons without large subsidies remains to be seen. The initial lease-up of the senior- designated apartments was also The Round problematic, as many seniors indicated that they disliked living in proximity to The city of Beaverton, located 5 miles families with children. The apartment west of downtown Portland, is in the units closest to the highway and farthest midst of building an entire community from the play areas were the first to rent. and high-density town center around the The units facing the play area do rent Beaverton Central light-rail station. out, but senior turnover has been high, Called “The Round” for the crescent- and non-seniors are now filling these shaped buildings that enclose the station units (as allowed in the development area, the project experienced significant agreement). This change in resident mix early setbacks and has been a long time may have exacerbated the parking in the making. Now, however, it is on problems. As the project mix included course to be the most intensively fewer seniors, the assumed lower developed station on the Westside MAX parking ratios did not match the line and is widely anticipated to become changing reality of the project. “the heart of downtown Beaverton.”

365 Located 23 minutes from downtown The project was initiated by the city of Portland on light rail, The Round is a Beaverton, which owned the site, pioneering project in a city with no formerly a sewage treatment plant. precedent for mixed-use infill Downtown Beaverton is designated to development (see Photo 17.2). On become a Regional Center in Metro’s completion, the project will include 2040 Plan, and development on this key 240 market-rate housing units, upscale parcel was envisioned to create the city’s restaurants, 125,000 square feet of retail highest-density node within the Center. uses, 375,000 square feet of Class A A significant TOD project would also office space, and an 860-space parking strengthen the connection between light garage.15 Its extensive public plaza, rail and the city’s traditional downtown, located between crescent-shaped which is also part of the Regional buildings and the station platform, gives Center, but is planned to remain a the project a distinctively European lower-density special district. design flavor. The plaza, which includes an amphitheater and water fountain, The city released an RFP to develop a offers views of Mt. Hood and serves as project in 1997. The winning developer the focal point of the TOD. Covering proposed to build a mixed-use project 8.5 acres, 4 acres of which are buildable, with 230,000 square feet of office and The Round will be one of the largest retail space, 100 to 150 townhouses and building complexes in Beaverton. apartments, an 800-space parking

Photo 17.2. The Round. The Round stands out as a pioneering suburban downtown mixed-use infill project.

366 garage, a 50,000-square-foot theater The primary reasons for the initial center, and a 100-room hotel. The entire project failure were the following: project was initially valued at $50 million, and the first phase was expected • The cost to completely stabilize the to open in the fall of 1998. From the ground for dense development was outset, the project was expected to be significantly higher than expected. costly because of relatively high densities, high-quality pedestrian amenities, parking • The developer became overly structures, large foundations and stem attached to his comprehensive walls, and fire sprinklers. program and tried to finance the whole development at once, rather To facilitate the project, TriMet than finance individual phases, relocated its light-rail station from a which is more typical (but adds the nearby arterial road to the center of the risk of lender-required changes). The site to enhance access to the TOD, even rules of mixed-use finance make though this made the station somewhat this funding approach virtually more isolated from existing development. impossible to pull off. Federal funds of $800,000 were secured for site improvements, new road access • The city did not realize that the into the site, and construction of a public developer had not lined up financing, plaza. An additional $440,000 in CMAQ but rather had only secured letters of funds was used for pedestrian credit. In retrospect, it may not have improvements. selected the developer.

The developer was expected to build • To get cash into the project, plans for infrastructure for the site and turn it over very dense apartments were changed to the city. The city tried to expedite to more expensive condominiums. At development approvals, dedicating a full- the time, there was no market time staff inspector to the project. The precedent for high-end city’s most significant contribution was to condominiums, and only a limited provide tax abatements totaling $3 million regional precedent (the Pearl District over 10 years. This was to reimburse the in downtown Portland was only developer, who unexpectedly had to beginning to emerge). In addition, the invest $3 million of his own capital to site is surrounded by automobile- stabilize subsurface soils consisting dealer parking lots, which appealed to primarily of “industrial muck.”16 few prospective condominium buyers. In the end, this last-gasp effort turned The developer began construction using out to be a losing strategy. his own equity, but was subsequently unable to secure take-out and permanent In 2001, the city and Microclimates, Inc., financing. Construction stopped bought the property out of bankruptcy completely in 1998 when the developer court. The property was sold to a new went bankrupt, owing $7 million to developer, Dorn Platz Properties, in creditors. Two partially constructed 2002, for $2.3 million.17 Dorn Platz, buildings sat dormant for more than experienced in building high-quality 3 years. commercial projects in Southern

367 California, completed construction of connections between the buildings and the buildings, but also changed the the station. Over time, improvements to overall development program to create local streets will better connect the more intensity around the station. The project to the traditional downtown and new developer is getting no subsidies to Canyon Boulevard, a major arterial from the city. nearby.

The Round is being constructed in Under construction (south of the station) phases, and a “fluid” development are a 24-Hour Fitness Center that will be program will determine what gets built topped with 54 condominiums and a when and where on the basis of four- to five-story, single-use parking changing market opportunities and garage. Other buildings planned for the tenant preferences. On completion, site include another office building however, the development must meet the behind the Crescent/Promenade overall program goals described earlier. buildings and a five-story office building across the tracks from the existing five- Buildings and structures open for use are story office building. Both office listed below by location: buildings may include housing on top. South of the tracks will be two more • South of the station platform: A six- to seven-story office buildings with 5-story, 120,000-square-foot office ground-floor retail space. Both the building with 21,000 square feet of theater and hotel have been dropped ground-floor retail space is 90% from the original developer’s plan due to leased. To meet program goals, lagging markets. At full build out, The housing may be added later to the Round will be an $80- to $100-million top of the building. development.18

• North of the station platform: The While the overall development program Crescent and Promenade buildings has intensified significantly since the have 65 condominium units situated initial groundbreaking, the amount of above 10,000 square feet of ground- total parking is not likely to increase floor retail space. Forty units are open proportionately, making the project even in the two buildings, and 10 have more “transit-friendly.” Like the entire sold thus far. The condominiums are development program, the parking priced at $170 to $200 per square requirements are a work in progress, and foot and include a mix of traditional the developer is actively seeking to and “loft” units with two-story reduce the amount of structured parking ceilings. provided.19 The parking plan is still in the approvals process, but the developer • North of the station platform: There has proposed implementing shared is public plaza with wide walkways, parking, valet parking, and reduced seating areas, landscaping, and small parking ratios. waterfalls. To conclude, Beaverton is in the midst The city has also made streetscape of building an “urban island in a improvements to enhance pedestrian suburban sea,” and a reborn TOD is

368 moving forward. Even while the regional businesses in abandoned warehouses, and development market is weak, the market home to a large artist community, the for TOD in Portland is now established Pearl District is now an emerging mixed- and strong, benefiting The Round and use neighborhood of upscale loft housing, other planned TOD projects. parks, art galleries, boutiques, cafes, and restaurants. In early 2001, 1,600 In retrospect, it appears that early project condominiums and apartments were under setbacks were due primarily to the construction or permitted—a pace that has inexperience of the initial developer and continued unabated.21 The district is one the city and poor execution by the of Portland’s hottest neighborhoods and developer. The initial developer had has fueled the downtown’s largest housing never completed a project as large or boom since the 1905 Lewis and Clark complex, and the city should have known Centennial Exposition. the status of the developer’s financing. In addition, the city could have advocated A major catalyst to the transformation of for program changes to move the project the Pearl District was the construction of forward or contributed subsidies.20 the Portland Streetcar, the first modern streetcar system to be built in the United Why is The Round likely to become States. As in many cities, streetcars were successful? Since groundbreaking in a fixture in Portland in the 1950s. In the 1998, both the Pearl District in Pearl District, the streetcar investment downtown Portland and Orenco Station has been strategically used to leverage in suburban Hillsboro have established large-scale redevelopment of a markets for “urban” condominium living functionally obsolete warehouse and and have demonstrated the success of industrial district, as well as brownfields mixed-use communities. The Round is formerly owned by Burlington Northern no longer an urban pioneer and is Railway. In this case, the streetcar positioning itself to become an “edgy” has been equal parts housing and Pearl District (at about half the price transportation tool, as streetcar per square foot). In addition, the new construction was explicitly linked to developer is more experienced, high-density development via an sophisticated, and patient and thus is innovative developer agreement. As a more likely to construct a successful result of this agreement, the average project, albeit over a longer time frame. density of the Pearl District is now 120 housing units per acre, the highest in The Pearl District the city. The Pearl District had only a handful of residents in 1990 and 1,300 in The creation of the Pearl District is the 2000. At build out, it will be home to most dramatic transformation of over 10,000 residents in 5,500 housing downtown Portland in the last 20 years. units, and 21,000 jobs. The area will “The Pearl” is 90 city blocks bounded by also have 1 million square feet of new I-405 to the west, West Burnside Street to commercial and retail space. the south, NW Broadway Street to the east, and the Willamette River to the north Table 17.3 provides a snapshot of some (it is north of and adjacent to Portland’s of the buildings and projects that have COB). Once an “incubator” for start-up been built to date. In this section, the

369 Table 17.3. Snapshot of Pearl District Development Along Portland Streetcar Line24 Project Name Value Year Residential Commercial Description (000's ) Completed Units Sq. ft Pearl Court $10,000 1997 199 Apartments Pearl Townhomes $4,000 1997 10 Townhouses McKenzie Lofts $15,500 1997 67 11,500 Condo & ground-floor retail Riverstone $25,000 1998 123 10,000 Condo & ground-floor retail Pacific Northwest $1,000 19 98 40,000 Renovation—art college College of Art Powell's Books $5,000 1999 50,000 Expansion & renovation Wieden and Kennedy $20,000 1999 200,000 Full block renovation North Park Lofts N/A 1999 66 Condo Johnson Townhouses $7,000 2000 13 Townhouses Park Northwest N/A 2000 18 Condo Pearl Townhouses N/A 2000 10 Townhouses River Tec $10,000 2000 35,000 Office renovation Tanner Place $31,000 2000 121 12,000 Condo & ground-floor retail Lovejoy Station $13,500 2001 181 Apartments Vollum Natural Cap. Ctr. $8,000 2001 70,000 Office/retail renovation Workspace Lofts $1,100 2001 N/A N/A Workspace Lofts The Gregory $29,500 2002 145 47,000 Condo/Retail/Office Streetcar Lofts $28,000 2002 139 9,000 Condo & ground-floor retail Marshall Wells Lofts $34,000 2002 164 Condo Mazana Restaurant $1,950 2002 N/A Building renovation 9th & Hoyt Bldg N/A 2002 N/A Office Brewery Blocks $300,000 2002–04 367 673,000 Multi-phase mixed-use housing, office, retail Bridgeport Condos $35,000 2003 123 8,000 Condo & ground-floor retail Park 13 $20,000 2003 139 N/A Apartments & retail The Edge / REI $27,000 2003 126 35,000 Condo & ground-floor retail Park Place $47,000 2004 124 15,000 Condo & ground-floor retail 10th & Hoyt Apts. $20,300 2004 178 15,000 Apartments & retail Burlington Tower $22,000 2004 163 10,000 Condo & ground-floor retail Elizabeth Lofts $38,000 2004 172 14,500 Condo & ground-floor retail

Total $753,850 2648 1,255,000

370 planning and build out of the Pearl adverse environmental impacts.23 District as a whole is discussed. Readers Finally, the Plan called for a new transit should refer to other sources for detailed “circulator,” to facilitate short downtown descriptions of individual projects within trips, and new incentives to increase the Pearl District.22 downtown housing, safeguard historic buildings, provide covered walkways, Historically, the Pearl District was and preserve open space. marshland along the Willamette River, north of an emerging downtown In the early 1980s, a series of city and Portland. The area was filled to create consultant reports documented the land for expanding railroad yards and changing character of the industrial area, warehousing, and, by the early 1900s it speculated on alternative futures, and had become the transportation hub of the called for the city to undertake a city. Transit, storage, manufacturing, and concerted planning effort for the area. ancillary uses proliferated, and the area These reports generally noted that in prospered as a warehouse and industrial the rail yards and warehouse area district for 50 years. redevelopment was likely, and they suggested that a broad economic/market Beginning in the 1950s, the area began analysis be undertaken prior to re-use for to reflect central-city dynamics industrial or commercial purposes. witnessed in many other places. Transport shifted away from rail and The 1988 Central City Plan built on the water to highways and air, resulting work of the Downtown Plan, extending in an industrial district that was its geographic scope and expanding its increasingly vacant and marginalized. range of policy concerns. It established Low rents attracted artists and start-up the Central City Plan District, which businesses, and dwelling units were includes the Pearl District. The Central created legally and illegally. Over time, City Plan illustrated the intended the area became an eclectic mix of changes for the industrial area from rail automobile shops, specialty outlets, yards to a residential/commercial area. and art galleries. To facilitate this transformation, the Plan Planning for the area began with the 1972 Downtown Plan. The Downtown • retained existing industrial zoning Plan recognized the important but allowed central employment supporting role of the north downtown zoning when services could be area as an industrial and distribution provided;25 center. At the same time, the Plan also acknowledged changing development • adopted residential district zoning patterns and recommended replacing regulations; and some industrial uses with mixed-use development. The Plan advised that • allowed use of FAR residential density limits and height and bulk bonus provisions. restrictions (throughout the downtown generally) should enhance skylines, How the actual transformation would protect views and vistas, and avoid take place, however, was unclear.

371 In the early 1990s, private citizens and redevelopment. In entering into the landowners in the area convened to craft agreement, the city’s main goals were to a vision statement for the River District. preserve historic buildings, increase (At the time, the Pearl District was not density to create vibrancy and attract officially recognized as such and rather business, promote transit use, and support was part of a large River District, which existing and new arts organizations. The generally shared the same boundaries, essential elements of the Development except that it extended further east to the Agreement were Willamette river.) The vision statement noted that the River District should 1. Housing: Proposed housing densities become a vital urban community of were significantly higher than for connected, diverse, and mixed-use anything built previously. The neighborhoods. The vision statement developer agreed to increase the also called for the District to minimum density from 15 to 87 units accommodate a significant portion of per acre when the city commenced Portland’s expected future population removal of the Lovejoy Viaduct that growth. The Portland City Council crossed the abandoned rail yards. acknowledged the River District vision Also, on completion of the Portland statement in 1992 and asked the city Streetcar, minimum densities would agencies and the community to craft increase to 109 units per acre. Finally, strategies for its implementation. when construction commenced on the Pearl District’s first park, density The resulting River District Development would rise further, to 131 units per Plan, which provides a development acre. and public finance framework for the area, was endorsed by the Council in In addition to meeting density 1994. The Council then directed various requirements, the developer also city offices to undertake specific agreed to help meet the city’s actions toward implementing the housing-affordability goals. At least Development Plan. The Bureau of 15% of all rental units and 10% of all Planning, for instance, revised land-use for-sale units must be 700 square feet regulations to support the Plan and or smaller. And at least 15% of adopted special River District the total housing units must be design guidelines. affordable to families earning up to 50% of the area’s median family To execute the plan, in 1997 an innovative income (MFI), and 20% of the units Master Development Agreement was must be affordable to families entered into by the city and Hoyt Street earning up to 80% of the area’s MFI. Properties (HSP), the owners of 40 acres HSP’s commitment is predicated on of contaminated rail yards in the heart of the availability of public financial the River District.26 This area (the western assistance, recognizing that these part of the River District) officially units typically require public became known as the Pearl District. With subsidies. If HSP does not build the Hoyt Street Yards under single affordable housing, the city can 1 ownership, the city recognized a unique purchase up to three ⁄2 blocks of opportunity to pursue large-scale property for that purpose.

372 2. Parks: HSP agreed to donate prompting two of the original partners to 1.5 acres of land for new parks in back out of the agreement. exchange for the city’s commitment to build them. In addition, the city Two major public works projects proved has the option to acquire up to to be the kindling that sparked major 4 acres for public open space. redevelopment: the Portland Streetcar and the Lovejoy Viaduct removal. The 3. Infrastructure: Transportation main goals of the Streetcar were to improvements were essential to attract downtown housing and ease develop the area. The agreement parking and traffic hassles. The Streetcar stipulated that HSP would donate the began service in 2001, running 2.4 miles right-of-way for all local streets, through downtown Portland and the sidewalks, and utilities (6 acres) at heart of the Pearl District. The Streetcar no cost. HSP also paid $121,000 to connects the Pearl District to downtown remove the Lovejoy Viaduct and offices, the cultural/arts district, Portland $700,000 towards the Portland State University, and other upscale Streetcar. neighborhoods. Today, ridership exceeds 5,000 daily passengers. Most of the route To fund the city’s obligations, an urban lies in a fareless zone; otherwise, trips renewal district was formed in 1998, cost $1.25 per ride. allowing for tax-increment financing. In the first 5 years of its existence, over The cost of constructing the Streetcar $70 million have been spent for removal was $57 million (for seven cars, track of the Lovejoy Viaduct, construction of and stations). It was financed using non- the Portland Streetcar, construction of traditional, non-FTA sources, including affordable housing, and the development bonds backed by city parking revenues, of Jamison Park and other amenities.27 TIF funds, and one-time payments from A prime reason for being able to spend property owners along the route who public funds quickly was that public voted to “tax” themselves (i.e., a benefit expenditure plans had already been assessment). The Streetcar is currently agreed on in previous planning efforts. being expanded three-quarters of a mile Since 1998, the assessed value of the area to the south, to RiverPlace, a mixed-use has doubled to $719 million, $200 development on the bank of the million more than the city anticipated. Willamette River. Eventually it will go to the planned South Waterfront District.28 Finally, many affordable housing projects in Portland get 10-year Several Pearl District developers and real- property-tax abatements. While the estate brokers have praised the Streetcar abatements are loosely related to for transforming the area.29 According to projected price levels and affordability, Debbie Thomas, the Pearl District’s most their primary purpose is to ensure denser successful broker, the Streetcar development than the market would otherwise support. In this case, when the is quieter, more predictable, and density requirements were established in creates less pollution than buses on the developer agreement, some parties the same route. The Streetcar has fully expected HSP to “lose its shirt,” helped solidify the connection

373 between Northwest Portland and District has evolved into a trendy, urban downtown. It’s friendly, easy, and area replete with restaurants, bookstores, not super fast, but I don’t think it art galleries, boutiques, and other was intended to be. specialty shops with attractive street presence. The area has “gentle” walking Pat Prendergrast, a one-time HSP blocks (e.g., short distances, street partner, calls the Streetcar one of the furniture, plantings, and awnings) that most significant public projects that make it easy to get around and an shaped the Pearl District. And Homer inviting place to linger. Notable Williams of HSP says, amenities are Jamison Park (with a programmable fountain), “modernist” I think the streetcar is key, because totem poles that support the Streetcar in reality you don’t have to do catenary wires (public art), several small everything—school, library, parks. pocket parks, a community center, and If you buy into the Streetcar, you’re space for a public market. (Views of the never 10 or 12 minutes away from Pearl District are shown in Photo 17.3.) anything. That’s true urban thought process, but you have to buy into the Streetcar.30 Four progressive developers have been active in the Pearl District. The first was Since 1998, about 2,700 housing units Al Solheim, who noticed that the and over 1.2 million square feet of architecture of the existing warehouses commercial space have been built in the was well suited for the kinds of loft Pearl District. Rather quickly, the Pearl spaces found in New York and Chicago.

Photo 17.3. The Pearl District. The Pearl District is fast becoming the Portland region’s densest and most successful TOD. Planned around the Portland Streetcar, over $750 million in transit-supportive projects have been leveraged along the line in the Pearl District since 1997.

374 Solheim completed several historic loft southwest quadrant, and, at build out, it renovations (e.g., the Chown Pella Lofts) will include 200,000 square feet of urban and established the market for urban retail, 400,000 square feet of Class A living that other developers later built on. office space, 200,000 square feet of Solheim also renovated an industrial residential loft space, and 1,300 parking building so that the Pacific Northwest spaces.31 Two historic structures, the College of Art could move to the Pearl former Brewhouse and the Armory, are District in 1998, energizing the arts scene. being retained and integrated into the redevelopment (with buildable densities HSP has the most at stake. HSP has being transferred to other adjacent developed five blocks of new parcels). When complete, the project will apartments, condominiums, and retail provide a highly urban transition between space, and three more are under the CBD and the Pearl District.32 construction. HSP also owns 12 additional blocks that will be built as During the 1970s and 1980s, downtown market conditions warrant. As called for Portland witnessed the construction of a in its agreement with the city, HSP few office towers over 20 stories, but project densities have changed over rarely saw residential housing over time. An example of an early low- 7 stories. Now, over half of the density project (about 20 units per acre) residential buildings in the Pearl District is the Johnson Street Rowhomes. are 10 stories or higher. Densities are Middle-phase projects (about 110 units now exceeding those required by the per acre) are Tanner Place and the developer agreement; the Pearl District Riverstone Condominiums. More is a very strong market for urban recent projects are the Park Place housing. Seeking to capitalize on the Condominiums and Bridgeport demand for large buildings (175 feet Condominiums (more than 130 units per and higher), HSP has approached the acre). Currently, the “Block 16” project city to change the zoning north of Hoyt is slated at 150 units per acre. Street, where the allowable massing makes it difficult to build tall Building on the success of HSP, John buildings.33 Carroll, an original HSP partner who withdrew from the developer agreement, The Pearl District’s housing is now the is pursuing several projects on his own. most expensive in the region on a per- These are south of Hoyt Street, where square-foot basis, surpassing even the bigger, bulkier buildings are allowed lakefront trophy homes in some close-in (massing of 6:1 “bonusable” to 9:1). suburbs. Loft condominiums in the John Carroll mixed-residential projects Pearl District go for between $280 and include the The Gregory, The Edge, $320 per square foot, compared with and The Elizabeth. $200 per square foot (including land) for lakefront property in other upscale Lastly, Gerding/Edlen is building a neighborhoods.34 Most condominium “mega-development” on the former site projects are sold to new owners of the Blitz-Weinhard Brewery. The before they open. Of the 1,200 loft $300-million Brewery Blocks project condominiums in the Pearl District, covers five blocks in the Pearl District’s only 6% are currently available for sale.

375 Apartment rents generally range from demand to absorb these high-end units, $800 to $2,000 per month. as “there is no other location like the Pearl in the City.” The Pearl District’s In keeping with the city’s affordable- major developers contend that the area, housing target, three projects serve low- in fact, is constrained in supply, not and very-low-income households demand. New tenants are not likely to be (seniors and others) and are rent found in the downtown core; rather, they controlled. The Housing Authority of will be people who would otherwise Portland built Pearl Court (194 units) locate in the suburbs. If the apartment and Lovejoy Station (177 units), in market is not deep enough, surplus units which all the units are below market will be converted to condominiums. rate. In addition, a new PDC project, Station Place, will include an affordable- While short-term surpluses are likely and housing component. are normal in housing construction, most developers active in the area think that the Residents in the Pearl District tend to fit “boomer” market, in particular, will be the demographic profile found in other strong for at least another 10 years, when Portland area TODs. They are childless— the Pearl District will largely be built either young people seeking smaller lofts, out. As it now stands, the demand for older professionals looking for an urban downtown living seems to be insatiable. lifestyle with little upkeep (“downsizing boomers”), or retiring seniors. This Of all the retail markets in the urban variety of homeowner types has core, the Pearl District is currently the contributed to the depth of the market. strongest in terms of high demand and low vacancy rates. Annual triple-net Some observers are now questioning rents are currently $22 to $40 per square how long developers will be able to find foot. Some downtown retailers are buyers who can afford to pay for cachet adding locations in the Pearl District, in a down economy. Some softening of and some are moving to the Pearl the market for $550,000 to $750,000 District from downtown and other condominiums is occurring. These units districts.35 Retailers are attracted to the generally have 2,000 square feet of fast-growing residential base, the living space. Smaller units, with 600 to Streetcar, and the interesting blend of 800 square feet, however, are continuing new and old structures. Almost constant to sell quickly and are appreciating 8% redevelopment is creating opportunities to 12% annually. for retailers who have wanted to locate in the Pacific Northwest.36 Most market-rate units built so far have been condominiums, and the market One potential problem could be too for expensive apartments is still much planned retail space. Some relatively untested. Four buildings with investors question whether it is feasible 730 apartment units, currently under to ring every residential building with construction, will target the high end of retail on all four sides, as required by the market, with rents at around $1,000 zoning. Retail space, they fear, will for a one-bedroom unit. The developers outstrip area population growth; already, are confident that there is sufficient the Pearl District is cannibalizing retail

376 from other shopping districts. Others neighborhoods. Encouraging housing argue that the liberal provision of ground downtown and near transit, they argue, is floors pushes down rents and allows a a significant public good.38 The issue is more interesting and diverse set of local far from resolved, but it is receiving retailers to gain a market foothold. increasing attention as tax breaks are also proposed to stimulate development in Revitalization and development of the the North Macadam District, where a Pearl District has been a success on development agreement is currently virtually all fronts. Underutilized land and being negotiated along with planned buildings have been reclaimed, a new type expansion of the Streetcar.39 of housing product has been successfully introduced, retailers have a greater variety The Future of TOD of locations and building types from which to choose, and the Streetcar is TOD has taken center stage in the popular among residents and visitors. Portland region’s growth management strategy. The Portland TOD story is Perhaps the only “blemish” so far is actually a community-building story housing prices that are increasingly out more than it is a TOD story. The of reach of the working class. To date, jurisdictional support TOD enjoys in the HSP has actually exceeded its affordable region is due to community leaders who housing targets, and the city has not have learned to use TOD as a tool to exercised its option to buy land for this help achieve broader quality-of-life purpose. At the same time, some contend objectives. TOD in Portland has become that “affordable housing” (affordable up a means to the end of creating a livable to 80% of MFI) has been too loosely community, not an end in itself. defined, and that prices for market-rate units are too high for the average As the region has gained experience, consumer. High rents have displaced attention has focused on crafting many of the original artists and regulations and incentives that promote businesses that once gave the Pearl TOD. One might ask, “Have these tools District its “edgy” character. and the market met the region’s expectations?” Based on the experience PDC continues to subsidize projects in so far, the answer has to be “yes.” Still, the Pearl District,37 and a debate has projects like The Round and Center emerged about the need to continue Commons reveal some of the stumbling offering property-tax waivers to blocks that can be encountered in raising developers at the same time that the bar for what is expected of TOD. Not condominiums sell for over $500,000 in all TOD projects have gone smoothly, some buildings, and two-bedroom units and the private market on its own rent for $2,000. Tax-break critics have probably could not replicate the types of called the District an exclusive “yuppie TOD taking form. At the same time, theme park.” Others argue that incentives planners who visit the region in search are necessary to increase density beyond of lessons generally find Portland’s what it would otherwise be in order to TODs to be dense, well-designed, and relieve growth pressure on the fringe well-integrated with their surroundings, and keep growth out of established as well as active, vibrant places. Overall,

377 Portland’s TODs seem to be working as a small part of the region’s total TOD well as or better than expected. inventory. But this is hardly a problem unique to TOD; without incentives, new To date, Portland has experienced two construction is always expensive. major phases of TOD implementation. The first entailed building the That said, Portland’s long-term growth institutional capacity to plan for TOD; management strategy depends critically that is now well established. The region on people and employers agreeing to is currently in a second phase of locate in TODs for the next 30 years. It grooming sophisticated developers, is for these markets that many TODs are lenders, and contractors to build TOD. being envisioned today. Thus, a final While some initial developers have evaluation will be more appropriate suffered setbacks (as is typical for the in 30 years, when the region’s pioneers of any new product), current “experiment” is nearing maturity. and future developers are benefiting from the experience, and TOD projects In speculating on the future of TOD in the today generally proceed smoothly. region, Portland’s TOD planners observe that the real-estate demand for TOD was Whereas TOD is still unique in most other not created by the region’s regulatory parts of the United States, in Portland it framework. The market for TOD in has become almost a way of life. Virtually Portland and elsewhere is being driven every light-rail station has seen TOD by larger demographic changes and activity. Together, they form a critical customer preferences for urban living. mass of TOD. Some are beginning to ask, Portland’s regulations aim to ensure that however, “Is there too much TOD in the the underlying demand will be met. region?” and “How deep is the market for TOD?” At present, these questions are The prospects for these trends to play probably unanswerable. Despite out in the future seem encouraging. occasional hiccups, today’s TODs Portland is becoming a national continue to enjoy healthy demand. The destination for a young, creative Pearl District commands the highest per- professional class that is attracted to square-foot residential sales prices in the TOD.41 Thus, the region continues to region. Residential sales prices at Orenco promote TOD as part of its long-term Station are running 20% to 30% above the economic development strategy. local area average. Commercial Similarly, Portland seems to have only occupancies at Orenco have been high, scratched the surface of the retiring and rents are estimated to be roughly 10% boomer market. In the end, TOD in higher than surrounding properties.40 Portland may become very prevalent and simultaneously less “visible” as it The success of TODs like the Pearl becomes more of the rule, not the District and Orenco Station also has a exception, for new development. darker side. Perhaps the most significant criticism that can be levied against Conclusions and Lessons Portland’s TODs is that they need to do more to promote affordability. Affordable The Portland region is unique in the TODs such as Center Commons represent United States for its scale, extent, and

378 sustained commitment to TOD. While line to the core rationale behind the Portland’s ability to create innovative Portland Streetcar. planning regulations seemingly knows no bounds, planning does not create real- • Continuing to raise the bar for TOD estate demand. The construction of is important. Greater Portland’s Portland’s suburban and urban TODs is policymakers have not been content being fueled by consumers purchasing to simply channel growth next to the products built by suppliers, that is, transit. They have sought to raise the the invisible hand of the marketplace. density, lower the parking, increase the quality of design, and increase Given the complexity and breadth of the the mix of uses in TODs. Whether undertaking, it seems unlikely that any developers will build these enhanced other region will choose to replicate TODs on their own or will hold out Portland’s approach to TOD. The for continued financial and regulatory lessons learned from individual projects incentives remains an open question. and the evolution of the Portland approach, however, continue to have application to other communities as they Notes chart their own course for TOD. Among these are the following: 1 For information about numerous TODs throughout the Portland region, see TriMet’s • Leveraging transit infrastructure Community Building Sourcebook at http://www.trimet.org/inside/publications/ can help achieve broader objectives. sourcebook.htm. Since the Portland Transit Mall 2 G. B. Arrington, 2000, “Reinventing the opened in the mid-1970s, the region American Dream of a Livable Community: has repeated its signature strategy Light Rail and Smart Growth in Portland,” over and over—using transit (paper presented at 8th Joint Conference on investments as a means to the end Light Rail Transit Investment for the Future, of accomplishing multiple goals. Transportation Research Board and American Portland’s policymakers see TOD as Public Transportation Association, Dallas, Texas, November 11–15, 2000). providing a sustainable alternative to the automobile, enhancing downtown 3 Portland Metro, “The Portland Region: How Are We Doing?” (report brochure) March revitalization, containing sprawl, and 2003. revitalizing communities. 4 G. B. Arrington, At Work in the Field of • Dreams: Light Rail and Smart Growth in The “early bird” catches the TOD. Portland, (Portland, Oregon: TriMet, The earliest decisions on the September 1998). planning and design of light-rail 5 Planning for the Eastside line to Gresham systems shape the opportunities for started in 1975. The line opened for revenue TOD. Portland’s approach to the service in September of 1986. Planning for design, location, and planning for the Westside line to Hillsboro started in the major transit investments has late 1980s after a lapse of many years. The evolved with each rail line in order project opened for service in 1998. to leverage opportunities for TOD. 6 G. B. Arrington, 2000, op. cit. TOD has evolved from being an 7 D. Hamilton, “Three Men, One Dream,” afterthought with the first light-rail Portland Tribune, September 7, 2001, p. 1.

379 8 TriMet, “1-205 Segment Request for Development Labs sources, “We’re funded Proposal—Step 1” (Portland, Oregon: mostly by folks in the Silicon Valley, and it’s July 2003). a big deal for them to be able to hit the airport, come straight out here on light rail 9 TriMet, “Facts 2002” (Portland, Oregon: 2002). and turn around and go home” (GlobeSt.com, 10 The station is accessed via 60th Avenue, Open Source Development Labs Moving to which crosses over the depressed freeway, “The Round,” May 6, 2003). and has stairs going down to the platform. 19 Dorn Platz expects that providing too much 11 PDC’s primary roles were to secure the site structured parking will raise lease rates to for development, manage the project, and help unsupportable levels in the current market. secure other types of public funding. PDC did 20 On a related note, the initial developer not want to invest significant funds in the installed an innovative, high-performance project, as it is not located in a TIF district, heating/cooling plant to serve the entire and the agency was financially constrained. planned development program. The innovative 12 Construction costs throughout the region heating/cooling system has reduced noise and were increasing rapidly in a hot market. visual impacts compared with typical systems and is also cost-effective. The customized 13 Otak Incorporated, “Transit-Oriented system design, however, required potential Development,” brochure (Lake Oswego, new developers to build a similar TOD Oregon n.d.). program. While this inadvertently kept the 14 See C. Switzer, The Center Commons Transit city’s broad vision intact, it may also have Oriented Development: A Case Study, delayed recruitment of a new developer. Master’s Thesis (Portland Oregon: Portland 21 Three hundred and seventy-six loft State University, Master of Urban and condominiums opened from January to Regional Planning Program, Fall 2002). September in 2003, and 676 units are 15 The developer agreement currently in effect expected to open in 2004. only specifies the total number of housing 22 For an excellent description of the Pearl units to be built and does not distinguish District and individual projects, see The between condominiums and apartments. To Portland Tribune, special section on “The date, only condominiums have been built. New Pearl,” September, 2003. See 16 At groundbreaking, neither the city nor the www.hoytstreetproperties.com for projects developer realized the extent of the soil developed by Hoyt Street Properties, the problems. The project went bankrupt before District’s major developer. See the original developer could realize any tax www.breweryblocks.com for detailed savings. information about the Brewery Blocks development. For projects developed by 17 The original developer claimed that the value Carroll Aspen, see www.edgelofts.com/ of his investment was $10 million. The developer/. appraisal value was reduced to $2.3 million 23 because no parking had been approved or As a result, dense housing in the Pearl built, and thus the buildings could not be District and the downtown, generally, more occupied. The $10-million figure was thus closely resembles mid-rise Florence or Paris declared “speculatory value.” The city used than high-rise Vancouver, British Columbia. all of the $2.3 million in sale proceeds to pay 24 Portland Development Commission, “An off lien holders. Application for National Achievement in 18 In addition to 24-Hour Fitness, current and Smart Growth,” n.d. prospective retail tenants include Coldwell 25 Central Employment (EX) zoning was Banker Barbara Sue Seal Properties (a established in 1988 to encourage grand, residential real-estate company), two upscale visionary thinking. It was established in restaurants, and Open Source Development response to initial redevelopment proposals Labs (headquarters for a high-tech for uninspired tilt-up office parks. The zoning consortium). According to Open Source allows almost anything and is meant to

380 facilitate the transition between the industrial equipment, which is required for buildings past and a “wide-open” future. with more than seven stories. 26 HSP had purchased the yards in the early 1990s. 35 The Brewery Blocks development is so intense and successful, in fact, that it could 27 The city has invested $150 million in the conceivably shift the whole downtown retail district over 22 years. core northwest from its current location (as 28 The South Waterfront area is planned to be has been mentioned in ongoing studies of Portland’s most intensively developed district. downtown retail). The project has significant It will be connected to downtown by the cachet and is rapidly leasing commercial/ Streetcar and to the city’s largest employer, retail/office space in a bad market. Whole Oregon Health Sciences University, by an Foods has become the “flagship” for the aerial tram spanning the city’s west hills. At project and has attracted many other tenants. build out, Vancouver-style glass “point towers” are envisioned to include 3,000 housing units, 36 In addition to the Brewery Blocks commercial and the district will be home to 10,000 new jobs. tenants listed earlier, the district is also home to Uptown Hardware, Storables, Childpeace 29 See “Focus on Real Estate,” Business Journal Montessori School, REI, 24-Hour Fitness, of Portland, June 20, 2003, pp. 13–29. Patagonia, Sherman Clay Pianos, Este’s Men’s 30 While the Streetcar was under construction, a Clothing, Weiden & Kennedy (advertising), long viaduct that bisected the area was and numerous galleries and restaurants. shortened to create land for redevelopment and 37 In 2002, developers were awarded improve traffic circulation. The Lovejoy $163 million in property-tax exemptions. Ramp, which connects to the Broadway Bridge and Portland’s Eastside neighborhoods, 38 Complicating the debate is an overall lack of used to touch down at 14th Street, but now information regarding the profitability of the touches down at 9th Street. The new Lovejoy projects. Apartment developers are required Ramp opened in 2002. to submit to PDC projected rent levels with 31 PDC helped to fund/build a three-level and without tax breaks; projects with returns underground parking garage spanning of less than 10% are eligible for tax breaks. 2.5 blocks. Projects receiving tax breaks, however, do not have any rent regulation, and rent levels 32 The project includes a 15-story condominium are free to fluctuate with the market. PDC tower, The Henry, with units ranging from does not check to ensure that the lower profits 750 to 3,000 square feet (prices range from projected by developers to secure tax breaks $200,000 to $1.2 million). Also planned is a turn out to be low in the end. One exception 16-story apartment tower. Commercial to this is the Brewery Blocks, where the tenants include Portland Energy Solutions, developers submit annual financial statements Whole Foods Market, Baja Fresh (restaurant), to substantiate the need for tax breaks. Diesel (restaurant and retail), P. F. Chang’s (restaurant), Peet’s Coffee, Sur La Table, 39 Homer Williams, owner of HSP, would also Perkins Coie (law firm), Mio Gelato, GBD be the major developer at North Macadam. Architects, The Art Institute of Portland, 40 M-Financial Group, and PPM Energy. Parsons Brinckerhoff Quade & Douglas “Orenco Station Profile,” for Urban Land 33 A future study by the city will evaluate the Institute (July 2001). impacts of increasing the allowable massing from 5:1 to 7:1. Pearl District residents are 41 See R. Greg, “Destination PDX: A Youth likely to support the density increase only if Culture Convergence,” The Sunday all of the three parks specified in the Oregonian, December 12, 2002, p. 1. development agreement are built. One park has been built, and a second park should be completed by early 2004. Photo Credits 34 The high prices make it feasible to construct buildings with expensive fire and safety All photos by G. B. Arrington

381 Chapter 18

The San Francisco Bay Area: The Challenge of Creating a Transit-Oriented Metropolis

Exurban sprawl, unaffordable housing, agencies, 100 city governments, countless ever-worsening traffic congestion, and nonprofit organizations, and local and environmental degradation are just a few national developers. This chapter outlines of the reasons that TOD is being actively the sometimes complementary and embraced in the San Francisco Bay Area. sometimes conflicting roles of various Private interests, not-for-profits, and actors in the TOD planning and public agencies have all invested time implementation process. Getting actors and money in pursuing TOD projects. “to march to the beat of the same However, this keen interest in TOD by so drummer” is no easy task, given the many different groups has been difficult region’s Byzantine institutional and to coordinate, at times resulting in an ad governance structure. Still, smart-growth hoc, fragmented regional approach to principles resonate in many quarters of TOD. Each group has carved out its role the region, and the MTC has taken a in the TOD planning process and leadership role in incentivizing the employed its own implementation tools construction of affordable housing and strategies. Goals and objectives of and the design of pedestrian-friendly the many actors are not always aligned. communities around regional transit Everyone is left grasping for their piece nodes. The region’s heavy-rail transit of TOD, and no one is willing or able to operator, BART, has also become take a leadership role on a regional level. an active participant in leveraging The result of this fragmented approach development opportunities around to TOD is several successful yet its stations through public-private detached projects that have minor overall partnerships. Several Bay Area impacts on regional transportation and developers today specialize in mixed-use, development patterns. TODs in the Bay infill development around transit nodes. Area are like individual fish swimming In examining the efforts of organizations against the current in a stream of like the MTC and BART and a growing sprawling development. Islands of cadre of progressive developers, this TOD in a sea of automobile-oriented chapter gives visibility to the challenges development will not resolve the traffic, and unfolding opportunities of building a housing, and environmental problems metropolis—not just a few stations—that that gave birth to the TOD movement. As is more oriented to transit. it stands, the sum of TODs is no greater than its individual parts. Regional Initiatives

Planning a TOD in the Bay Area requires The Bay Area has several public agencies a great deal of coordination, given that that work on a regional level, seeking to there are 9 county governments, several coordinate planning efforts across regional agencies, more than 40 transit jurisdictional boundaries. However, these

383 regional agencies have limited and and fiscal competition. Notwithstanding fragmented power. This lack of regional these and other obstacles, ABAG has in control significantly impedes the recent times sought to build a collective planning and implementation of TODs. regional vision that places the Bay Area As consensus-building entities with little on a more sustainable, smart-growth purse-string prowess and virtually no pathway. land-use “teeth,” regional entities largely provide forums for elected officials to In 2000, ABAG embarked on a visioning confront cross-border issues. In recent process with five other regional agencies: years, however, several important the Bay Area Air Quality Management initiatives have been introduced by District, the Bay Conservation and regional agencies that could plant the Development Commission, the MTC, seeds for future smart growth and, more the Regional Water Quality Control specifically, TOD. This section reviews Board, and the Bay Area Alliance for initiatives introduced by three important Sustainable Communities. Through a regional entities—the Association of Bay series of workshops with residents and Area Governments (ABAG), the MTC, stakeholders across the nine Bay Area and congestion management agencies counties, a series of smart-growth policies (CMAs)—that provide small but were agreed on. They included locating important steps toward creating a future both housing and job centers close to metropolis that is more transit-supportive transit and promoting “transit oriented in its design and composition. and walkable communities.”1 Although these smart-growth policies are not ABAG’s Smart-Growth Initiative enforceable, they give attention to TOD and encourage individuals and agencies ABAG, which is the region’s council to consider the longer-term and spillover of governments, guides land use, impacts of development decisions. housing, economic development, and environmental planning. However, Based on the smart-growth policies, local land-use decisions and zoning are ABAG altered its methodology for left to individual cities, and ABAG making official projections of population, does not have the power to change land housing, and employment growth for the uses or density requirements. Fiscal region: “The policy-based projections zoning and municipal competition for suggest a regional shift toward better job- tax base is as strong in the Bay Area as housing balance, preservation of open anywhere, a product of Proposition 13 space, and development focused in urban (the 1978 statewide referendum that and transit-accessible areas.”2 ABAG capped property-tax income) and the factored in the availability of land for high cost of doing business, including development, including infill and the provision of public services like redevelopment. Therefore, the projections education, in the region. Jobs-housing are based on assumptions that growth in imbalances and a disconnect between the Bay Area will follow smart-growth transportation investments (including principles. Since ABAG projections are transit) and large-scale urban used to determine funding and priority of development have been among the projects for infrastructure improvement, most visible outcomes of parochialism especially for transportation, the new

384 methodology may give more attention program created by the City/County and funding to TODs. Association of Governments of San Mateo County (C/CAG). With housing MTC’s Transportation for Livable shortfalls and increased traffic congestion Communities Program in San Mateo County, C/CAG wanted to provide incentives for governing In 1970, the California State Legislature agencies to develop housing near transit 1 separated the responsibility of regional stations. For projects within ⁄3 mile of a transportation planning from ABAG transit station and with a density of at and created the MTC. The MTC is the least 40 units per residential acre, the city region’s MPO, controlling the allocation or county can receive up to $2,000 per of federal and state funding for bedroom constructed. (See Text Box 18.1 transportation projects throughout the for eligibility criteria.) With the “carrot” nine-county Bay Area. approach, the TOD Incentive Program uses transportation funds (from the State In 1998, the MTC made a bold move Transportation Improvement Program) for a regional transportation agency: it to encourage smart-growth land-use acknowledged that land use and decisions.4 With money in hand, it is transportation are indelibly linked to each expected that localities can prepare other, opening the way for funds to be specific plans for station areas and fund used for purposes other than transportation various amenities, like pedestrian ways construction, such as the construction of and civic spaces, that can help “spruce affordable housing near transit stops. up” a neighborhood and leverage private That year, the agency created the investment. In recognition of this Transportation for Livable Communities innovative program, San Mateo received (TLC) program to provide funding for the EPA’s national award for “Smart projects that “strengthen the link between Growth” in 2002. transportation, community goals and land use.”3 The TLC program has evolved over Recognizing San Mateo County’s the past 5 years to include three success at spurring housing development components: capital grants, planning near transit stations, the MTC added the grants, and the Housing Incentive Program HIP component to the TLC program in (HIP). TLC allocates $27 million per year 2001. Local jurisdictions that receive (from TEA-21, and state Transportation awards determine how and where Development Act monies) to local and to spend the funds; however, the county projects that meet various “smart- transportation projects funded through growth” criteria defined by the MTC. This HIP must be consistent with TLC goals. program has materially enhanced TOD Also, HIP provides supplemental activities in the Bay Area by providing funding for higher-density developments funds for strategic planning and and affordable housing units. As shown construction of ancillary improvements in Table 18.1, MTC provided nearly around stations, including bicycle and $4.7 million for HIP projects in Fiscal pedestrian amenities and compact housing. Year 2001–2002. The program encouraged the addition of over HIP, which is the housing component 1,600 bedrooms along main bus routes of TLC, was adopted from a similar and rail transit stops in 2001 through

385 HIP Eligibility Requirements

1. The applicant must be a local city or county, and the proposed housing project must be in the initial planning stages. 1 2. Eligible projects must be within /3 mile walk from the center of the development site to a trunk-line transit station. Eligible transit services are bus, ferry, or rail transit with no more than 15-minute headways during the peak commute period. 3. The density thresholds and award amounts proposed are the following: 25 units per acre: $1,000 per bedroom 40 units per acre: $1,500 per bedroom 60 units per acre: $2,000 per bedroom For all affordable units, an additional $500 per bedroom will be awarded. 4. Standard federal match of 11.5% must be provided. 5. A pedestrian path of travel from the center of the project to the transit stop must be provided and demonstrated on a site plan and project maps. 6. Mixed-use development is encouraged but not required.

Text Box 18.1

2002—65% of which were affordable. transportation planning and funding Programs like HIP are important, if not through a Congestion management plan the only, funding sources for station-area (CMP). The CMP is a short-range plan housing construction; however, while that dictates how gas-tax funds are spent they are very much welcomed by local on transportation projects. California law governments, private developers are requires all counties with more than more lukewarm in their assessment. 50,000 inhabitants to prepare a CMP, a One affordable-housing developer condition that was mandated as part of commented that TLC and HIP serve as the 1991 statewide dedicated sales tax “gap fillers.” Although they are helpful, referendum. they are not a decisive factor in building a project. The developer noted, “To be a CMAs in the Bay Area have taken more important factor, the grants would various stances in their level of support have to be larger and easier to use.” for TOD. C/CAG is a fairly progressive Critics also charge that HIP suffers from agency, having taken a proactive appeasement—essentially all submitted approach by administering the TOD projects have received funds to date, Incentive Program. Santa Clara County’s eroding the amount of money that top CMA has similarly sought to incentivize projects would have otherwise received. TOD through measures like sliding-scale impact assessments that reduce traffic- Congestion Management Agencies generation estimates for projects near rail stops. Other CMAs (notably those in the Congestion management agencies Contra Costa Transportation Authority (CMAs), like C/CAG, are statutorily and Alameda County) are more cautious, responsible for coordinating countywide showing a willingness to promote and

386 Table 18.1. MTC’s HIP Projects (FY 2001–2002) Units Market- Transit Per Total Rate Affordable Sponsor Service Housing Project Acre Units Bedrooms Bedrooms HIP Funds Berkeley AC Westminster House Expansion: 40 40 43 0 $86,000 Transit* Multi-story dormitory rooms.

Berkeley AC Transit Acton Courtyard Apartments: 1,420 71 102 40 $304,000 Mixed-use five-story building with ground-floor retail and housing above Berkeley AC Transit Mixed-use building with ground- 148 65 84 24 $228,000 floor retail and housing above Daly City MUNI, Landmark Site Development: 42 70 89 89 $311,500 SamTrans Mixed-use development East Palo SamTrans Nugent Square: Mixed-use 30 32 0 82 $123,000 Alto development East Palo SamTrans University Avenue Apartments: 60 30 38 10 $101,000 Alto Multifamily rental apartments El Cerrito AC Mill and Lumber Site: Mixed-use 39.5 158 208 36 $384,000 Transit, retail and residential development BART Richmond BART Richmond Transit Village: 25 231 348 345 $865,500 Mixed-use development San Bruno BART, The Crossing/San Bruno: Four- 60 300 357 89 $936,500 SamTrans story, 300-unit multifamily development San Mateo SamTrans Prometheus Project: Multifamily 61.2 218 300 33 $682,500 residential development Union AC Independent Senior Housing 49 40 1 39 $79,500 City Transit, Union City Transit Union AC Assisted Living Senior Housing 60 95 66 29 $204,500 City Transit, Union City Transit Vallejo Vallejo Sereno Village Apartments: 25 125 0 255 $382,500 Transit Affordable-housing adjacent to the Sereno Village Transit Center Total 1,475 1,636 1,071 $4,688,500

*AC Transit = Alameda Contra Costa Transit District invest in TODs only if the opportunity is their work is mainly on a project-by- presented to them, and the private sector project basis and is not regional in shows a development interest in station scope. As one CMA director commented, sites. These and most other Bay Area “TODs cannot be planned on a regional CMAs serve as facilitators or mediators level. The market decides. Unless you’re in the TOD planning process. Therefore, talking about major transportation

387 investments, the regional coordination the creation of the MTC’s HIP, which is doesn’t happen.” a component of their TLC program. If imitation is the strongest form of flattery, Franklin Street Project the Franklin Street project deserves credit for helping to spur local governments to In 1999, when the San Mateo County zone for and promote housing near TOD Incentive Program was approved, transit nodes elsewhere in the region. the first project to be awarded funding was the Franklin Street mixed-use Transit Agencies development in Redwood City (see Photo 18.1). The project included The San Francisco Bay Area has over 206 new residential units, 31 of which 40 transit agencies that provide bus, were affordable units, and street-level light-rail, cable-car, streetcar, heavy-rail, retail space. Since the project was commuter-rail, and ferry service. located 0.4 miles from the Redwood (See Map 18.1 for the service coverage City Caltrain station and had a density of of the region’s transit providers.) 50.6 units per residential acre, the project Unlike regions that have a single transit met C/CAG’s program requirements. authority, the Bay Area is blessed Redwood City received $707,000 for the and cursed with a multitude of 402 bedrooms that were constructed. transit agencies that provide both This money went to upgrade landscaping complementary and competing service. along Roosevelt Avenue. This in turn For example, to get across the Bay from helped to temper the resistance of some Oakland to San Francisco, one can ride residents to the project. commuter rail, multiple transbay buses, or a ferry. Riders enjoy the benefit of The success of the Franklin Street project having choices in terms of mode, time and C/CAG support of housing schedules, and fares. Redundancies also construction near transit helped to ignite ensure a backup alternative in the event of interest in a TOD incentive program at a labor strike or (as demonstrated in the the regional level. This ultimately led to 1989 Loma Prieta earthquake) a natural disaster. However, transit agencies end up competing for passengers and vying for similar federal, state, and county transportation funds. Timetables, fares, and routes are not as coordinated and integrated as they could be.

In terms of TOD, having multiple transit services creates numerous opportunities for intensifying development close to bus, rail, and ferry hubs. However, the diversification of transit services complicates coordination efforts. Each Photo 18.1. Franklin Street Project agency develops its own guidelines or Taking Form at the Redwood City Caltrain policies related to TOD and takes a Station. different approach to working with local

388 Map 18.1. Bay Area Transit Agencies. Source: www.transitinfo.org.

389 governments to initiate zoning changes recommends a mix of housing densities, around stations and to attracting private ownership patterns, costs, and building developers. Two major transit agencies types within a TOD to reflect the varied in the Bay Area, VTA and BART, needs and desires of residents. have been most active in TOD to date. However, their TOD guidelines and joint Public initiatives such as VTA’s design development programs reflect the guidelines have no doubt helped to differing perspectives and priorities of leverage TOD in Santa Clara County, two agencies, each with its own budget, but, at least as important, if not more professional staff, and board of directors. important, have been sheer market forces. During the late 1990s, dizzying rates of VTA TOD Design Concepts growth and traffic-clogged arteries prompted a flurry of building activities By the early 1990s, several jurisdictions around VTA light-rail stations. Between within Santa Clara County had gained 1997 and 1999, an estimated 4,500 experience with planning, designing, housing units and some 9 million square and constructing TODs. Early TOD feet of commercial-office floor space successes like Almaden Lake Village were added within walking distance of paved the way for TOD interest to the Tasman West light-rail line serving ratchet up a notch as traffic congestion the heart of Silicon Valley. Cities needed and the affordable-housing crisis peaked little coercion to revise their zoning codes on the heels of the high-tech boom of to make them more supportive of transit. the late 1990s. In recognition of these The city of Mountain View rezoned and other early successes, the VTA 40 acres of industrial land to prepared a forward-looking, well- accommodate more than 500 housing received document called Transit- units adjacent to the Whisman light-rail Oriented Development Design Concepts. station. In Sunnyvale, density bonuses The goal of publishing the document were introduced to spur infill was to “bring together a set of critical development in the Northside industrial ideas and techniques useful for effective district near the Borregas and Fair Oaks coordination of development patterns light-rail stations. At Sunnyvale’s Moffett around major transit stops.”5 In the Park Station, bonuses increased allowable nicely illustrated Transit-Oriented FARs by 60% in return for a private Development Design Concepts, VTA developer agreeing to foot a major part gives particular emphasis to creating a of the bill for the $2.5-million station mix of uses within walking distances of project. Further, in the city of San Jose, a transit station. The design guidelines the Irvine Company recently built several define a TOD as lying within 2,000 feet thousand luxury apartments within or a 10-minute walk of a transit node. walking distance of the Guadalupe light- Densities and design patterns are rail corridor, helped along by the city’s recommended to intensify and diversify willingness to expedite the building land uses and improve pedestrian access review process. The pace of station-area and circulation. VTA suggests not only development cooled off in the early 2000s ensuring a mix of land uses, but also in the wake of the County’s economic encouraging diversity within each downturn; however, this lull is widely land use. For example, the agency viewed as temporary, with quite a few

390 developers still believing that smart review process. These advocacy groups, money lies in parcels within an easy representing environmental interests on walk of VTA light-rail stops. one extreme and high-tech industry interests on the other, supported the link Ohlone Chynoweth: VTA’s Proactive between affordable housing and transit. Joint Development Program With such a breadth of support for TOD, NIMBY resistance was quelled. In 1998, VTA created an in-house joint development program principally to tap Given a 75-year ground lease from VTA the development potential of under- with annual payment of $250,000 utilized park-and-ride lots. The original (subject to increases in Area Median Ohlone Chynoweth light-rail station, Income), Eden Housing constructed 195 which is located between two major affordable housing units, a retail center, highways south of downtown San Jose, a community center, and a child-care had an oversupply of parking: only 20% to facility (see Photo 18.2) on the former 25% of the spaces were utilized on a surface park-and-ride lot. The project’s typical workday. VTA worked with the residential density comes in at 27 units city of San Jose to develop a concept plan per acre and just under 2 parking spaces for a 1,100-space parking lot. An adjacent per dwelling unit. All of the housing site had already been developed with 135 units were rented before construction affordable-housing units by BRIDGE was completed. However, the retail Housing. FTA’s revised joint development component is not fully occupied, and policy that allowed transit agencies to retail rents are below market value. This retain proceedings from private land sales, may be because the retail area is not even if land was purchased using federal easily accessible from the main street funds, was instrumental in the agency and is set back behind the main VTA moving forward with this initiative. park-and-ride lot. (See Chapter 6 for further discussions on the challenges of In 1999, VTA and the city of San Jose making retail work at TODs.) Another released an RFP to build on part of the design complaint has been the poor parking lot that originally did not connectivity of the “Commons”— include affordable housing. Tepid meant to be the civic centerpiece of the developer interest prompted a change of TOD—to the surrounding single-family focus to constructing affordable units on community. Although the development the site, and a not-for-profit developer, at Ohlone Chynoweth is not perfect, the Eden Housing, was selected as master collaborative process of the city, VTA, developer of the Ohlone Chynoweth and Eden Housing to transform an site. Initially, there was considerable underutilized suburban park-and-ride community opposition to this project lot into a new transit-oriented because of the proposed concentration community has been exemplary. of affordable housing in the area. According to Eden Housing, support BART TOD Design Guidelines from interest groups as diverse as the Sierra Club, Silicon Valley Ten years after VTA’s Transit-Oriented Manufacturers Association, and Development Design Concepts was Greenbelt Alliance helped the public published, BART released Transit-

391 Ohlone Chynoweth Commons Entrance Courtyard Entrance

Retail Center Photo 18.2. Ohlone Chynoweth Mixed-Use Development, San Jose. This parking- lot infill “conversion project” was one of the Bay Area’s first.

Oriented Development Guidelines. The over park-and-riders in accessing primary goal of the guidelines in this stations. The document also recommends document is to promote “vibrant and how station parking facilities should be livable station areas” and “the use of designed so as to minimize disruptions BART as a primary means of to pedestrians. However, the guidelines transportation.”6 The guidelines have do not mention how to deal with existing few regulations or standards for parking facilities and current parking development. Instead, they are intended policies that impede TOD at BART to inform planners, developers, elected stations. The guidelines recommend officials, and individuals about the lowering parking standards for important components of TOD to take both residential and commercial into account during the planning and developments near BART stations. site-design process. The guidelines They show that providing parking has emphasize providing good pedestrian, associated costs and note that “parking bus, and cycling access to stations. provisions can account for 20% of the cost of a typical apartment in Silicon BART’s TOD guidelines implicitly give Valley.”7 However, they do not go as far pedestrians, cyclists, and buses priority as recommending that BART’s own

392 parking standards should be reduced, development is quite meager, especially and they ignore the fact that the high when compared to “peer” rail agencies cost of providing parking is one of the like WMATA. Presently, BART receives major barriers to TOD at BART stations. $75,000 annually in ground-lease As discussed in the next section, current revenue at the Castro Valley Station. BART policy of one-to-one parking ratio This number is expected to rise sharply replacement drastically increases the in coming years, especially with mixed cost for a developer to build on existing residential-commercial projects planned BART parking lots, which are prime for surface parking lots at the Fruitvale locations for TODs. The guidelines and Richmond stations, among others. do not address this issue and do not After two slow decades, BART’s joint provide alternative methods for development activities are today taking improving the feasibility of developing off. In total, BART has over $1 billion in BART parking lots. joint development projects in the works, some still on the drawing board, and BART’s TOD guidelines are also others, like the Fruitvale Transit Village, somewhat quixotic in their discussions that have broken ground and are well on of the pricing of parking. Also, the their way to completion.8 guidelines cite research that shows that charging for parking can reduce the While BART welcomes lease income, the demand for parking at employment agency is just as interested in facilitating centers by 7% to 30%. However, the initiatives amongst other parties in hopes guidelines are silent about BART’s of shifting growth to station areas and current practice of providing free parking thus increasing patronage. For example, at most BART stations, a practice that to accommodate a joint development underwrites the cost of driving an venture between the city of Hayward and automobile to transit and in so doing a private developer to build a new city undercuts the market potential for TOD. hall and multifamily housing close to the Additionally, parking fees could provide Hayward Station, BART swapped land an important revenue source for station- with the city. One BART official notes: area improvements and TOD planning. “This was a first for us. BART has never done such a land swap before. It turned BART Joint Development and out to be a win/win situation.”9 The city Outreach of Hayward proceeded to sell the swapped parcel to a developer who built To date, BART has approached TOD and 77 townhomes. The city did not have to joint development cautiously. Rather write down land costs because transit- than outright deal making, the agency has oriented, mixed-use development added opted mainly to co-participate with local enough value and property-tax proceeds and developer interests in promoting to render a subsidy unnecessary. transit-supportive development in the vicinity of stations. While the agency Notwithstanding recent progress, what has received funds from a downtown has historically hampered the ability of San Francisco retailer through a special BART to engage in joint development entrance agreement (i.e., station deals has been the agency’s “one- interface), BART’s income from joint for-one” parking replacement

393 policy. BART’s 1984 “Station Area living near transit stations to identify Development and Implementation what they want to see, what services Policy” requires that TOD projects their community lacks, and what unique provide a competitive rate of return for assets should be stressed.11 Jeff Ordway, the value of agency-owned land. BART’s manager of property development for policy is to support only those projects BART, remarks “We try to build on the that can cover the cost of replacing existing strengths of each community, surface parking (which today can run up which may be cultural or physical. to $75 per square foot of land). This has The only ones who can identify those proven to be a lofty hurdle, leaving most strengths are the people who live of BART’s potential development sites there.”12 In commenting on past practices as surface parking lots. As one BART that sited BART stations in inhospitable planner put it, “The ability of the market settings, like the medians of freeways, to support development that includes Ordway further remarked, 100-percent replacement parking, with no revenue to support that parking, has Sometimes we have to heal not only been a huge hurdle to TOD.”10 For the the wounds left by car-oriented most part, only when other government infrastructure, but rebuild a lost sense entities agree to subsidize replacement of trust. That’s why the community parking, as the city of Oakland did (with visioning process is so important. the help of an FTA grant) in funding You need to listen to what the the first-phase garage at the Fruitvale citizens say—what development they want in their community— Transit Village, have parking-to-infill if it’s ever going to work.13 conversions occurred. Even if BART’s board were to relax the one-to-one replacement requirement, parking Fruitvale BART Station: Fulfilling a supplies might not change, since local Community’s Vision jurisdictions usually require that BART replace parking displaced by BART’s more community-friendly development on agency land out of fear approach to joint development and the that BART parkers will spill over into importance of grass-roots leadership surrounding neighborhoods. Moreover, are underscored by experiences at the in cases where developers have agreed Fruitvale BART station. In 1991, when to provide replacement parking, this BART proposed a new parking structure has been at the expense of ground-rent at the Fruitvale Station, the community income due to the board’s policy of rebelled and opted to create its own providing rent credits to developers who plan. Although neighborhood residents pay for replacement parking structures. recognized the need for parking, they disagreed with the location and design An essential component of BART’s of the structure. Some feared the area’s recent joint development efforts has main street would be tarnished by been outreach to local cities and other outsiders coming into the neighborhood government agencies with a vested simply to park their cars. With the interest in seeing TOD move forward leadership of an active community (see Text Box 18.2). BART begins joint group called the Unity Council, a mixed- development efforts by asking residents use village with local retail shops, a

394 San Francisco BART’s Interagency Initiatives

Public-agency working groups and coordinating committees have been formed at nearly half of all BART stations, providing forums for local governments, transit agencies, nonprofits, and other civic-minded groups to move TOD projects forward:

➢ Pittsburg/Bay Point: A Technical Working Group was created among three entities— BART, Contra Costa County, and the city of Pittsburg—to prepare a TOD-oriented Specific Plan for the Pittsburg/Bay Point Station. Each entity contributed funds for this effort.

➢ Pleasant Hill: The Pleasant Hill BART Station Area Steering Committee was created in the mid-1980s, composed of representatives from the cities of Walnut Creek, Pleasant Hill, and Concord. Represented as well were BART, Contra Costa County, private land owners, and home-owner associations. Most recently, at the committee’s urging, the Contra Costa Board of Supervisors approved Specific Plan Amendments and certified its Environmental Impact Review.

➢ MacArthur: BART and the city of Oakland formed a Citizens Planning Committee consisting of merchants, home-owner associations, and residents to guide TOD planning. The Committee has been involved in a visioning process.

➢ West Oakland, Ashby, Coliseum, Union City, Hayward, Balboa Park: BART has entered into memorandums of understanding (MOUs) with cities to conduct station- area planning. Co-participants have included the Oakland Housing Authority (at West Oakland), Muni and Caltrans (at Balboa Park), and the Pacific Gas and Electric Company (at Union City). All entities have provided funds for TOD planning efforts.

➢ Richmond: BART and the city of Richmond joined forces to conduct a feasibility study for the station area, which led to the issuance of an RFP, the selection of a developer, and the approval of a TOD project.

➢ El Cerrito del Norte, El Cerrito Plaza: BART and the city of El Cerrito co-funded private development workshops conducted by working groups led by the City Council. Workshops have helped build community support of new development at the stations.

➢ Fruitvale: MOUs were executed between BART and the Spanish-Speaking Unity Council to create the Fruitvale Transit Village, currently under construction.

➢ San Leandro: A Technical Working Group involving BART and the city of San Leandro was formed to seek out TOD opportunities and to improve the physical connection between the BART station and the city’s downtown.

➢ West Dublin/Pleasanton: A Policy Group has been formed between BART and the cities of Dublin and Pleasanton to guide private and station-infill development.

➢ Glen Park: A multi-agency effort is currently underway to conduct a charrette to guide redevelopment of the station area. BART, Caltrans, and the city of San Francisco are funding the initiative.

Text Box 18.2 community center, library, housing, and contributed $20 million to the new structured parking was proposed. transformation of the Fruitvale BART accepted the idea and decided to neighborhood. work with the community to construct their vision. The Unity Council created During the first phase of construction, the Fruitvale Development Corporation completed in 1998, 67 affordable senior to create the mixed-use TOD. housing units were built, and the water and sewer infrastructure was updated to The negotiation and planning process for prepare for later phases of large-scale the Fruitvale project was complicated development. Also, over 100 businesses because of multiple funding sources. have received small-business loans and The risks and uncertainties inherent in grants for façade improvements since massively redeveloping a declining retail 1998. In 2002, more than 10 years after district from the 1950s required that costs the original BART proposal, construction be spread and shared among many began on a new 300-space BART interests and stakeholders. In the end, parking garage. This structured parking more than 20 different sources were used will replace surface parking lots, which to fund the $100-million mixed-use are in turn being replaced by a new project. It received considerable public- transit village (see Photo 18.3). The jury sector support, including the FTA’s first is still out as to whether the Fruitvale Livable Communities grant and funds Transit Village, long in the making, will from the city of Oakland. A new zoning inject new-found vitality into the once- classification, TOD district, was created struggling Fruitvale district; however, specifically for the Fruitvale Station the amount of planning and the number area to encourage balanced, mixed-use of resources put into the project are development. The zoning district permits impressive by any standard, and residential, commercial, and civic proponents maintain very high hopes. (such as child-care, education, and Working on the project’s side has been healthcare) activities and allows the strong and unbending leadership. One highest residential densities in the city. BART staff member has remarked: “In Fruitvale also lies within Oakland’s each joint development, we’ve found Empowerment Zone, which provides you need a champion. In the case of potential tax benefits to new businesses Fruitvale, it was Arabella Martinez, the locating there. Additionally, the city Unity Council’s CEO. I doubt the village reduced the parking requirements for both would be happening without her.”14 residential and commercial uses in the Fruitvale district. Instead of requiring one The Fruitvale project brought attention to space for every unit (the city’s minimum the need for proactive community input standard), a special overlay zone was in station-area planning. Far too often in created that required one space for every the past, community input has been an two units. BART agreed to a land transfer afterthought in the joint development and contributed in-kind staff support. process. In the 2003 update of the BART To supplement the public funding, Strategic Plan, the need for community organizations and businesses, including participation is explicitly stated: “In the Ford Foundation, the Levi-Strauss partnership with the communities it Foundation, and PG&E Corporation, serves, BART properties will be used

396 View from the BART Platform Center Courtyard

Corner Retail Near BART Station Entrance Photo 18.3. Fruitvale Transit Village Taking Form. Since its inception in 1993, the Fruitvale Transit Village is finally taking shape as a transit-supportive inner-city redevelopment project. The decade it took to go from concept to reality reflects the many hurdles that must be overcome and the multiple funding participants who have a voice in what is done. The Fruitvale Transit Village either currently has or is slated for a number of amenities, including an internationally themed retail shopping area, a large pedestrian plaza, and various community services ranging from a state-of-the-art healthcare facility to a child-care center. In addition, the Fruitvale Transit Village is to house the Unity Council’s headquarters, a public library, several community organizations, a computer- technology center, a seniors’ center, and mixed-income housing. For residents, workers, and businesses alike, BART will be a short and convenient walk away. in ways that first maximize transit and county redevelopment agencies ridership and then balance transit-oriented throughout the Bay Area have been development goals with community active over the past two decades in desires.”15 BART is committed to seeing seeking to leverage development around that communities shape the environment rail stations. Perhaps most attention has that takes form around the stations that been given to efforts by the Contra Costa directly serve them. County Redevelopment Authority to concentrate mixed-use development Local Government Initiatives around the Pleasant Hill BART station. Since the early 1980s, the County’s In addition to regional bodies and transit redevelopment agency has targeted a lot agencies, a number of municipalities of resources at the Pleasant Hill Station

397 area to entice private investment: the to build market-rate housing that would preparation of a specific plan, TIF to pay attract professional-class residents to for streetscape improvements, road the downtown area. Hayward’s widenings, and the undergrounding of redevelopment agency swapped parcels utilities, mixed-use zoning, and the of land with BART to create a buildable assembly and packaging of land into site. The redevelopment agency then developable parcels. With over 2,000 selected a local developer, Regis Homes, housing units and several million square to form a partnership that would bring feet of commercial development within the plan to fruition through a risk-and- walking distance of the Pleasant Hill reward-sharing arrangement. Regis Station, these efforts have largely paid Homes purchased the majority of the off. A survey in May 2003 showed that land from the redevelopment agency at 62% of households residing near the an agreed-on re-use value based on the Pleasant Hill BART station commute by assumed use of 83 for-sale townhomes at transit, a share three times higher than the an average density of 30 units per acre. share of Pleasant Hill residents who live To make the project pencil out, the 1 16 between ⁄2 and 3 miles of the station. As redevelopment agency was repaid for the reviewed in Chapter 9, studies also show land through a note, which was that residential parcels—for both rental subordinated to the construction loan and owner-occupied dwellings—near the and ultimately repaid from the sales of Pleasant Hill Station enjoy appreciable homes.17 When they were completed in land-value premiums. Critics note that 1997, all of the market-rate units were subsidies, like TIF and public assistance sold within a year at prices ranging with land assembly, were needed to from $143,000 to $180,000. Today, jump-start development; however, townhomes in Atherton Place are selling backers point out that the increased for two to three times these amounts. property and sales tax proceeds from the The project has also been a ridership development drawn to Pleasant Hill have success, clearly appealing to those far exceeded public subsidies. As seeking a transit-oriented residence that Pleasant Hill seeks to “reinvent itself” allows them to avoid having to drive through residentially oriented infill to work. A recent survey found that an development on existing surface parking estimated 52% of Atherton Place lots, many hope that the station area will residents take transit to work, more than become a more vibrant, walking-friendly seven times the share of those living 1 neighborhood in coming years. ⁄2 to 3 miles away from the Hayward BART station.18 Also, unlike some Bay In recent years, a number of East Bay Area TODs, the Atherton Place project cities, including El Cerrito, Walnut never became a major financial drain Creek, Richmond, and Hayward, have on the city of Hayward. The city borrowed a chapter from Pleasant Hill’s made infrastructure improvements experience, becoming proactive partners incrementally, as pieces of the in the quest for TOD. In the mid-1990s, development project were completed. the city of Hayward issued an RFP for This more cautious approach reduced the development of the 2.8-acre Atherton costly upfront infrastructure expenses Place site immediately adjacent to its and kept city coffers from needlessly downtown BART station. The aim was being drawn down in the event that the

398 developers did not follow up on their call mobility options to households near ends of the deal. the rail station without automobiles.

While much of the city of San Francisco For-Profit Developers is transit-oriented, a continuing affordable-housing crisis, coupled with In expensive real-estate markets like the the elimination of freeways in the wake of San Francisco Bay Area, private capital the 1989 Loma Prieta earthquake, has and resources are pivotal to TOD. Even prompted city officials to actively seek with the proactive actions taken by public out TOD redevelopment opportunities in agencies to promote TOD, projects do recent years. One of the most prominent not get built around the region’s light-, TOD redevelopment efforts in the city is heavy-, or commuter-rail stations unless the Transbay Terminal in the recently a developer is willing to invest time, refurbished South-of-Market energy, and money. Developers rely neighborhood (see Text Box 18.3). heavily on market performance indicators Also of note are activities underway to search out projects that are likely to be at the Balboa Park BART station, one successful and profitable. In 2002, Lend of the busiest transit hubs in the city, Lease Real Estate Investments and hosting BART, streetcars, trolley buses, PricewaterhouseCoopers issued a report and diesel coaches. In 2000, San that resonated with the Bay Area’s Francisco’s Planning Department began development community, advising that, working with those living near the station “Markets served with mass transportation to develop a neighborhood plan centered alternatives and attractive close-in on the Balboa Park BART station (see neighborhoods should be positioned to Photo 18.4). Through a series of sustain better long-term prospects as community workshops and ongoing people strive to make their lives more discussion with residents and business convenient.”20 The aging population, owners, various streetscaping, pedestrian- changes in lifestyle preferences, and access, and civic-space improvements are worsening traffic are all trends that being made in hopes of leveraging private support walkable, higher-density, transit- redevelopment. Parking management oriented communities. Traffic congestion, strategies are also being proposed. The in particular, continues to prod more and draft station-area plan proposes that new more Bay Area households to seek out development on city-owned land be housing near rail transit. The 2003 required to “unbundle” the cost of Urban Mobility Report by the Texas parking from rents. According to the plan, Transportation Institute ranks the region “Currently most new ownership housing as the nation’s second most traffic and some new rental housing has parking choked, behind Los Angeles, with 41% of included in the base price of a unit.” daily travel spent in congestion.21 Further, “Individuals and families who do not own or may not need a car must pay All seven Bay Area developers for the space anyway, needlessly driving interviewed for this study noted that up the cost of their housing.”19 The plan proximity to transit gives projects a also calls for neighborhood automobile competitive edge. Even though the sharing, as currently provided by City market seems supportive of TOD, CarShare, to be expanded to provide on- coordinating with numerous government

399

Inner-City TOD: The Transbay Terminal Redevelopment Project

Not all Bay Area TOD activities are in the suburbs, nor are all spearheaded by BART and VTA. In downtown San Francisco, an interagency effort is underway to build a new Transbay Terminal on a 66-acre site created by the removal of an old freeway. The existing Caltrain terminus in downtown San Francisco will be extended to the new facility, providing something akin to a “grand central station” wherein bus and rail services interface. Working to plan and design the new terminal and development around it are the city of San Francisco and two joint powers authorities (JPAs): the Transbay JPA (a collaboration of Bay Area government and transportation bodies) and the Peninsula Corridor JPA, which operates Caltrain. San Francisco’s redevelopment authority is spearheading efforts to revitalize existing publicly owned parcels on which the freeway once stood. Money from the sale of parcels and from tax increments generated by the development will help defray the cost of the new Transbay Terminal and Caltrain extension. Among the goals set for the project are

➢ Develop a new downtown neighborhood to help redress the city’s affordable- housing crisis, support regional transit use, and provide financial support for the new multimodal facility; ➢ Establish the area as a gateway to the central city and a unique transit- oriented neighborhood in San Francisco; ➢ Create a livable urban community with prime access to downtown and the waterfront as well as well-designed streets, open space, and retail areas; ➢ Create a pedestrian-friendly urban environment that encourages walking as the primary means of circulation within the project area; ➢ Create a state-of-the-art, multimodal transit facility that is an integral part of the surrounding commercial and residential neighborhood; and ➢ Encourage the use of alternative modes of transportation by future residents, workers, and visitors, and support the new Transbay Terminal as a major transit hub while still providing local vehicular access.

Current plans call for adding some 4,500 residential units to the Transbay Terminal area over the next 20 years. Planners believe that a major residential presence will create a vibrant and safe 24-hour place, something that some major intermodal transit facilities across the United States have historically lacked.

Text Box 18.3 Photo 18.4. Balboa Park Plan Area. Neighborhood 1 redevelopment efforts have focused on an area within ⁄3-mile walking distance of the Balboa Park BART station. entities adds complexity to the projects developers, allow them to build projects and can discourage developers from that reflect current market realities. Part pursuing projects. of the entitlement process also includes gaining public support and approval. According to the recently released Some elected officials are reluctant to Caltrans statewide TOD study, the Bay support TOD because of residents’ Area’s development community is concern about increased congestion conflicted about the role of government in caused by higher-density developments. TOD, calling for “less government” red A proposed parking garage and mixed- tape in one breath and “more use development near the El Cerrito government” financial assistance and BART station was vehemently opposed risk-taking in the other.22 In the minds of by nearby residents. One member of the most developers, local governments, community commented, “I’m afraid transit agencies, and regional planning this development is the one straw that organizations can both impede and breaks the camel’s back in terms of facilitate the TOD planning and congestion and traffic.”23 Residents of implementation process. Particularly the Bay Area oppose higher-density and bothersome to many developers is the infill development not only in fear of entitlement process, which restricts the increased congestion, but also for flexibility of project development. Zoning obstructions of Bay and bridge views. At restrictions sometimes make it difficult several BART stations prime for TOD, for developers to create a project that fits communities have rejected plans for into land-use regulations and is profitable. anything higher than two stories.24 Increasing accommodations for mixed- use projects, allowing conversions from In addition to the entitlement process one use to another, and expediting the and NIMBY opposition, coordination entitlement decision-making process with several government agencies can would, according to the region’s TOD hinder and lengthen the implementation

401 process. For any given TOD project, a capitalize on the existing market developer may end up having to work for TODs. with local governments (city and/or county), redevelopment agencies, transit Nonprofit Affordable-Housing agencies, MPOs, CMAs, and councils of Developers governments. Red tape adds delays, and uncertainties over whether government According to the National Association of agencies will renege on promises or Homebuilders, San Francisco has the “change the rules of the game” creates least affordable housing market in the impatience and distrust. Planning, nation. Home ownership rates for San designing, land leasing, fee-simple Francisco are 22.4% below the national acquisitions, permitting, and funding average.25 Expensive housing has become more complicated because each pushed residents further away from job agency brings its own objectives and and activity centers while increasing agendas to the negotiating table. congestion. Additionally, the demand for housing is expected to increase. Although government agencies can According to the California Department impede developers in planning TOD, they of Finance, the population of the Bay also serve as a catalyst and important Area will increase by over 1.5 million funding source for projects. The MTC’s inhabitants over the next 20 years. TLC/HIP program, redevelopment Building affordable housing near transit agencies’ 20% affordable-housing funds, provides a smart-growth alternative to and state and federal transportation funds the historic pattern of placing affordable each provide resources for strategic development on less expensive station-area planning and much- greenfield land on the fringes of the welcomed pedestrian and streetscape metropolitan area. improvements. Combinations of various funding sources make a project more California’s housing crisis has created a feasible for a developer to build. In competitive market for affordable units. the statewide study, TOD developers There are over 70 nonprofit affordable- reported needing between 20% and housing developers that are members of 100% public financing for items such as the Non-Profit Housing Association of environmental remediation, infrastructure Northern California. Since additional improvements, and affordable housing; funding and special financing are needed otherwise TOD projects could not to make affordable housing projects be built. feasible, developers often vie for governmental tax credits and grants to Developers recognize the need, appeal, make affordable projects pencil out. and potential profits of TOD. However, given the complex coordination required One major form of financing affordable and uncertainties involved, developers units is federal housing tax credits, which may avoid entering the TOD market. were used to help finance affordable- With fewer government restrictions, housing construction around BART’s better interagency coordination, and Castro Valley Station (see Photo 18.5). additional financial support, Bay Area The federal government gives each developers will be more likely to state an allotment of housing tax credits,

402 Affordable Units Across from BART Historic Stobridge House Photo 18.5. Castro Valley BART Station: Affordable Housing for BART’s First Joint Development Project. A truly intergenerational housing project at Castro Valley BART station has brought together residents at various stages in life and involved the construction of new housing units along with the rehabilitation of the historic Stobridge House. Bridge Housing Corporation, a nonprofit affordable-housing developer, worked with Alameda County and BART to build 96 affordable units with 66 units set aside for seniors. Remaining units are available to families. The first joint development agreement that BART entered into in its 26-year history, the project was built on land leased from BART. As part of the project, a BART police station was constructed. The $13-million project was financed with low-income housing tax credits, grants from MTC and the S. H. Cowell Foundation, and Alameda County predevelopment funding. After its completion, all units were rented. Today, there is a waiting list to move into the project.

and the state is responsible for allocating 20 minutes during the hours of credits to low-income housing 7–9am and 4–6pm, and the project’s developers. The state of California density [must] exceed 25 units added its own criteria to the federal per acre.26 requirements for affordable-housing plans and created a scoring system to Lower densities, less frequent service, evaluate potential projects. In order and further distance from transit (up to 1 to encourage affordable-housing ⁄2 mile) reduce the number of points construction close to transit, points are awarded. Whether the density and transit awarded for proximity to transit services. service frequency requirements, which Out of the 150-point total, 7 points can were only added in January 2003, will be earned for being within a TOD. To increase the supply of affordable units receive all seven points, the development near transit is unclear. must be located with a In addition to federal tax credits, HUD transit station, rail station, commuter administers several programs to fund rail station, or bus station, or stop both low-income and special-needs within a quarter mile from the project housing. Support for elderly housing is site with service at least every granted through the HUD Section 202

403 Program, and housing for persons with the region’s environmental advocacy disabilities can be funded through the groups have an increasingly active voice HUD Section 811 Program. These grants in promoting transportation and land-use provide construction funds and also coordination in general and TOD in rental assistance for residents. Similar to particular. tax credits, Section 202 and Section 811 funds are allocated on the basis of a set The Surface Transportation Policy of criteria. Although it is not as strong as Program (STPP), a high-profile national California’s tax credit stipulations, HUD advocacy group committed to balanced does encourage and support TOD. As transportation solutions, has a California stated in the Section 202 and 811 office. STPP has actively sought to handbooks, “Residents must have ready remove barriers to smart-growth projects access to religious institutions, hospitals like TOD. For example, several Bay or clinics, and other community services, Area infill TOD proposals were blocked shopping, recreational facilities, and because, opponents argued, they would public transportation.”27 One nonprofit create significant traffic congestion, developer interviewed for this case study measured as “level of service” (LOS). mentioned that a project was denied California law, under the Congestion HUD funding partly because it did not Management Act, requires that provide adequate transportation service. congestion be mitigated by supply-side However, what constitutes an improvements (like road widenings) that “adequate” level of transportation often have adverse impacts on pedestrian service is not explicitly stated, so it is environments. In 2002, STPP sponsored left largely to the judgment of HUD a state bill (SB 1636) that changed the staff. Several nonprofit developers active LOS and mitigation requirements for in the Bay Area who were interviewed areas that city or county governments felt that Sections 202 and 811 should declare as an “infill opportunity zone.” more clearly define the minimum An “infill opportunity zone” must be 1 thresholds for achieving “ready access.” within ⁄3 mile of a transit stop, with transit service having a maximum Advocacy Groups headway of 15 minutes. The streets and highways within the infill zone are The San Francisco Bay and the exempt from CMA LOS standards. surrounding hillscape enjoy a natural Mitigation methods for traffic congestion beauty that is cherished by residents and are flexible and can be in the form of visitors alike. Many independent pedestrian or transit improvements. nonprofit groups have recognized the STPP is also a leader in promoting importance of the Bay Area’s natural LEMs, not only in the Bay Area, but resources and have adopted missions also in other rail-served regions (see of conserving and protecting the Text Box 18.4). environment. Some groups are particularly focused on transportation The Greenbelt Alliance is another issues and have long endorsed TODs as nonprofit environmental group that an effective tool for preserving open supports TOD. The organization’s space by curbing sprawl and reducing broader mission is to protect open space automobile dependence. Accordingly, and natural habitats from encroaching

404

© Institute for Location Efficiency

Another financing mechanism for TOD housing in the San Francisco Bay Area is the availability of Location Efficient Mortgages (LEMs). After housing, transportation is the second largest expenditure in the average annual budget of Bay Area households. People living in transit-rich communities are less likely to drive to work, stores, schools, or recreational activities, research from the region consistently shows. Therefore, they spend less on transportation costs, such as vehicle purchase, maintenance, insurance, and gas, and have more expendable income available. Underwriting LEMs increases the borrowing capacity of homebuyers by allowing a maximum housing-to-income ratio of 39% as opposed to the standard 28%. Ultimately, this adds buying power to the budgets of people shopping for homes in location efficient neighborhoods.

The idea of LEMs was a joint effort between the Natural Resources Defense Council, the Surface Transportation Policy Project, and the Center for Neighborhood Technology. Together, they formed the Institute for Location Efficiency and conducted research on household transportation spending and transportation patterns related to urban form. The research reported that neighborhood density and transit access have a statistically significant influence on vehicle miles traveled and vehicle ownership rates for households. From the research results, Fannie Mae, the nation’s largest source of mortgages, agreed to authorize lenders to issue LEMs in four metropolitan areas, including the San Francisco Bay Area.

In determining the additional buying power for a specific location, the number of businesses within walking distance, proximity to transit stops or stations, and the frequency of transit service are all variables taken into account. The lender uses this information to predict how much money the household will spend on transportation and compares this amount to the cost of transportation for a similar suburban household. The savings of the transportation costs are then added to the purchasing power. The LEM concept is relatively new and largely unproven; the jury is still out as to whether it will significantly increase station-area living in America’s rail cities. This is something that will no doubt be carefully watched in coming years.

Source: www.locationefficiency.com.

Text Box 18.4

405 sprawl. The Greenbelt Alliance views through their coordinated efforts. They TOD as a critical component of smart serve as “watchdogs” to ensure that growth, along with affordable housing, public agencies do their part to encourage mixed uses, and flexible parking smart growth around transit agencies. standards. The Greenbelt Alliance has They also provide a much-needed voice established an endorsement program for of support for infill development when new development projects, including there is community opposition. This has TOD, which embraces these principles. shielded public agencies from accusations of parochialism and unfairness. If STPP and the Greenbelt Alliance are nongovernment groups representing both members of the Transportation and broader regional interests back TOD Land Use Coalition (TALC). TALC is a projects, local opponents face a tougher partnership of 90 different Bay Area challenge in trying to block proposals. organizations that endorse smart growth and transportation choices. TALC’s It has not only been environmentalists views are taken seriously by the powers- and political “greens” who have that-be in the region’s transportation coalesced to form advocacy groups that, circles. TALC publishes reports that are among other things, promote TOD and often aimed at shaping policy decisions other smart-growth initiatives in the Bay and expenditure plans for the Bay Area. Area. Pro-business organizations have In these reports, lay people and decision- also entered the scene. The Silicon Valley makers alike are informed about the Manufacturer’s Group, which represents benefits of smart-growth measures like the interests of some of the world’s TOD. In 2003, TALC released a widely leading high-tech companies, has circulated report on the best and worst identified “promoting transit-oriented developments of the Bay Area (see development” as one of the http://www.transcoalition.org/reports/ organization’s primary transportation b-w/best-worst.pdf). For each of the nine goals.28 Representing the larger corporate Bay Area counties, TALC staff selected interests of the region, the Bay Area two development projects—one that Council has gone on record as captured smart-growth visions for the recommending that “funding incentives area and one that was poorly planned. for transportation infrastructure should be Developments winning the “Best” provided to jurisdictions to accommodate awards were higher density and ... increased densities along walkable, had affordable-housing transportation corridors and at transit components, and were located in close hubs.”29 Smart-growth interests have proximity to transit. TALC regularly reached the level in the Bay Area where provides success stories for public pro-environmental and pro-business agencies and private developers to use as factions have joined forces. The Bay Area models for guiding future development. Alliance for Sustainable Development, whose steering committee includes Despite differing views on the specific members from the Bay Area Council as components of TOD (such as appropriate well as the Sierra Club, recently issued a densities or walkable distance to transit), Compact for a Sustainable Bay Area, environmental advocacy groups provide wherein members from the public and strong support for TOD in the Bay Area private spheres committed themselves to

406 reach out to financial institutions to compete for rather than coordinate land encourage diverse housing types use, the Bay Area has nonetheless and mixed-use investments at become one of the more progressive transit-supportive densities within regions of the country at seeking to urban areas, near transit, which incentivize TOD-like growth. The reuse underutilized or deteriorated livable communities and affordable- areas; . . . [and] advocate in support of mixed-density and mixed-income housing initiatives of the MTC have residential development, including been exemplary, as have subregional adequate affordable housing, programs, such as the one introduced by particularly in areas with transit the San Mateo County Council of and other services.30 Governments. A number of watchdog NGOs—TALC, the Greenbelt Alliance, Conclusions and Lessons and STPP—have also played a role in ensuring that legislative and statutory As a diverse region of nearly 7 million mandates regarding transportation and people, the San Francisco Bay Area has land-use integration are adhered to and actively embraced TOD over the past two that smart-growth principles receive decades, albeit often in a piecemeal, plentiful airplay. And despite having the community-by-community fashion. nation’s priciest housing market, While many planners and professionals in numerous nonprofit housing developers the region understand the importance of have surfaced over the years, many of building a united front to coordinate which have seized upon neighborhoods activities across jurisdictional boundaries, surrounding transit stations as the perfect strong home-rule controls and the settings for constructing affordable parochial instincts of localities and housing with “location efficiencies.” special districts have thwarted progress in Pioneering programs introduced in the this area. Development, whether around region, such as LEMs and sliding-scale transit stations or freeway interchanges, impact fees, have sought to reward those continues to unfold in a largely ad hoc residing and building projects near fashion, making the often-expressed transit stops in financial terms. regional goals of smart growth and coordination of transportation and land Market conditions remain ripe for TOD use more conceptual than real. One in much of the Bay Area, and a growing outside observer put it like this: number of real-estate developers are positioning themselves to fill the Although the Bay Area is widely continually expanding niche for rail- known for its livability, coordination oriented living. Some developers of land use and transportation complain that red tape, institutional planning, and the historic streetcar system in downtown San Francisco, foot-dragging, and “too many cooks in the region has suffered its share of the kitchen” still overly burden the growing pains and serious missteps TOD-building process. While most along the way to restoring a regional welcome the progressive efforts of the framework for transit.31 MTC and other institutions to fund ancillary and streetscape improvements Despite a fragmented institutional around rail stations, what many want landscape and a tendency for localities to most is a more streamlined and efficient

407 station-area planning and decision- off; however, proponents feel one good making process. success story—whether Fruitvale, Pleasant Hill, or elsewhere—will be all it While development is being drawn to takes to unleash a floodgate of developer private parcels that surround Bay Area interest in TOD. rail stations, building communities on agency-owned land, particularly To date, some of the more successful strategically located surface parking joint development projects in the Bay lots, has been advanced more slowly. Area have been spearheaded by local The contrast between VTA and BART jurisdictions or community organizations. policies and practices concerning joint Historically, BART planners have had development on agency-owned land their hands tied in trying to pursue joint demonstrates different agency development, not only because of one-to- philosophies and approaches. Without one replacement parking requirements but the burden of a one-to-one replacement also because of a skeptical board that saw parking policy, VTA has been able to real-estate development as a distraction take an entrepreneurial stance, working from the agency’s central mission of with private interests to build mixed-use running a rail-transit business. The projects on former surface parking lots. board’s position gradually changed as BART’s more restrictive in-house regional concerns over sprawl, traffic policies on parking have historically congestion, and affordable housing tied its hands in pursuing TOD on escalated. When BART staff was given agency-owned land. Only when an the green light to work directly with abundance of resources can be mustered private developers to build a joint to replace surface parking with fairly development project that would pricey structures, as occurred at the potentially generate high revenues, Fruitvale BART station, will an intimate the threat of increased densities often connection between a suburban station ignited community opposition. BART’s and its surrounding community be original plans to increase ridership at achieved in BART’s service jurisdiction. the Fruitvale Station by building Furthermore, only when land prices additional commuter parking conflicted are very high and shared parking with the community vision of a more possibilities are exploited, as is the case pedestrian-oriented village that wrapped with the “second generation” TOD taking around the rail station. To its credit, form around BART’s Pleasant Hill BART has learned from past mistakes; Station, can a project that directly abuts a in recent times, it has gone the extra suburban station, like VTA’s Ohlone distance to seek out community input Chynoweth, be expected. Despite this in visioning the future and citizen obstacle, real-estate markets remain hot involvement in the implementation enough, and smart-growth agendas have process. become so pervasive, that TOD on former BART-owned land is beginning The challenges of building a metropolis, to gain a foothold. The jury is still out on not just a handful of stations, which is whether joint development efforts supportive of transit remains an uphill underway at East Dublin/Pleasanton, struggle. Portland-style regional Walnut Creek, and Richmond will pay governance has been discussed on

408 numerous occasions in the Bay Area, but make the zoning and land-use changes it has never been able to garner popular that we’re looking for.”32 support because the political constituency for consolidating powers remains narrow. Notes Most observers concede that regional governance is a pipedream and thus are 1 Association of Bay Area Governments, Smart resigned to something more modest in Growth Preamble and Policies. See scope. Many applaud the efforts of the www.abag.org/planning/smartgrowth/ SG%20Policies/SG_Preamble_Policies.PDF. MTC and ABAG to encourage local interests to “think regionally and act 2 Association of Bay Area Governments, Policy locally,” whether through broad-based Based Projections. See www.abag.org/ planning/smartgrowth/projections.html. and inclusive regional visioning undertakings or tying purse strings to 3 MTC website: www.mtc.ca.gov/projects/ local smart-growth initiatives. The Bay livable_communities/lcindex.htm. Area Alliance, which works across the 4 City/County Association of Governments of 110 jurisdictions of the region to promote San Mateo. 2002 EPA National Award for Smart Growth Achievement Entry Package economic and environmental (2002). sustainability, also holds promise in 5 the minds of many. Whether such efforts VTA, Transit-Oriented Development Design Concepts (1993). will be enough to coordinate local TOD initiatives in a more holistic, integrated 6 BART, BART Transit-Oriented Development fashion is anyone’s guess. Regardless, Guidelines (June 2003). steps are being made in the right direction 7 Ibid. to create a political culture that accepts 8 BART, Developing the Future with Transit and indeed embraces regional thinking. (Oakland: California: Department of Real This can only help in the cause of Estate Services, 2001). promoting the institutional as well 9 D. Costello, R. Mendelsohn, A. Canby, and as physical coordination of TODs J. Bender, The Returning City: Historic across the region’s nine counties. Presentation and Transit in the Age of Civic Revival (Washington, D.C.: Federal Transit Administration, National Trust for Historic Despite the region’s institutional Preservation, 2003), 44. fragmentation and the obstacle this 10 J. Tumlin and A. Millard-Ball, “How to creates for TOD, other pressures could Make Transit-Oriented Development Work,” bring about a more transit-supportive Planning, Vol. 69, No. 5 (2003): 17. regional built form in years to come. 11 C. Kreyling, “Hug that Transit Station,” Traffic congestion has gotten so bad that Planning, Vol. 67, No. 1 (2003): 5. increasing numbers of communities see 12 little recourse other than to concentrate Ibid. growth around transit stops. In an 13 Ibid. interview with Planning magazine, Tom 14 Kreyling, 2003, op. cit., p.6. Margo, BART’s General Manager, 15 BART, BART Strategic Plan. http://www. remarked “We’re being courted by cities bart.gov/docs/strategicPlan.pdf. that want BART extensions,” noting 16 H. Lund, R. Cervero, and R. Willson, that the agency’s policy of encouraging Travel Characteristics of Transit-Focused high-density growth around stations Development in California (Oakland, “helps us reward those communities that California: Bay Area Rapid Transit District

409 and California Department of Transportation, Allocation Committee Programs (2001). 2004). See http://www.treasurer.ca.gov/ctcac/ programreg/062003.pdf. 17 E. Seifel, “Bay Area Models of Urban Infill Housing,” Urban Land, Vol. 62, No. 9 27 U.S. Department of Housing and Urban (2003): 105–109, 141–147. Development, Chapter 3, Handbook 4571.2: 18 Lund et al., 2004, op. cit. Section 811 Supportive Housing for Persons with Disabilities (June 199). See http://www. 19 Tumlin and Millard-Ball, 2003, op. cit., p. 16. hudclips.org/sub_nonhud/cgi/hbks_run. 20 “Lend Lease Real Estate Investments and cgi?hbks_run. PricewaterhouseCoopers,” Emerging Trends 28 See http://www.svmg.org/Committees/ in Real Estate Markets 2002 (2002). See Transportation/index.cfm. http://www.lendlease.com/llweb/llc/main.nsf/ images/pdf_emergingtrends_2002.pdf/$file/ 29 See http://www.bayareacouncil.org/ppi/tpt/ pdf_emergingtrends_2002.pdf. 51v_mtc1.html.

21 T. Lomax and D. Schrank, 2003 Urban 30 Bay Area Alliance, Compact for a Mobility Report (College Station, Texas: Sustainable Bay Area (San Francisco: Texas Transportation Institute, 2003). October 2002), 10. 22 Caltrans, Statewide Transit Oriented 31 Costello et al., 2003, op. cit., p. 38. Development Study: Factors for Success in California: Technical Appendix (Sacramento: 32 Tumlin and Millard-Ball, 2003, op. cit., p. 15. Business, Transportation, and Housing Agency, 2002). 23 A. Lopez, “Obstacles in Getting to Plaza Photo Credits Garage,” Contra Costa Times, Sept. 5, 2003. See www.cctimes.com. 18.1 2002 EPA National Award for Smart 24 Caltrans, 2002, op. cit. Growth Achievement Announcement 18.2 N. Goguts 25 Lomax and Schrank, 2003, op. cit. 18.3 N. Goguts 26 California Tax Credit Allocation Committee, 18.4 City of San Francisco, Planning Department A Description of California Tax Credit 18.5 N. Goguts

410 Chapter 19

Southern California: From TODs to a Region of Villages

TOD experiences in Southern California speaking and Asian immigrant have been well documented.1 Perhaps it is populations—have also drawn attention. because of the challenges of building a These cohorts are thought to be more transit-friendly landscape in a region of receptive to transit-oriented living crisscrossing freeways, where the because many immigrants come from automobile culture is firmly entrenched, cities with intensive transit services. that so much research has focused on Southern California. On the other hand, Southern California’s Market for TOD perhaps it is because Los Angeles’s genesis owes much to the Red Car system Interest in TOD has been propelled by and interurban rail lines of a century ago ongoing rapid population growth, that interest in modern-day TODs runs worsening congestion, air pollution, and high. Regardless, the political, economic, an affordable-housing crunch in Los and cultural dimensions of TOD in the Angeles, San Diego, and other parts of nation’s second-largest region continue to Southern California. More senior fascinate. citizens will also reside in Southern California in coming years. By 2030, the This case study summarizes past percentage of people age 65 or older will research on the impacts of TOD be higher than in Florida today. The on transit ridership, land values, Latino population is expected to grow affordable-housing supplies, and overall from 27% to 39%. neighborhood quality. Through field work and interviews, the effectiveness A recent study suggests that the demand of various planning, policy, and financial for “dense, walkable neighborhoods” tools in promoting and implementing in Southern California will grow TOD projects in Southern California substantially, in part due to an aging is also revealed. Monetary benefits population and a more culturally diverse derived by public agencies from joint population base.2 Changing tastes and development projects on agency land are exasperation with an automobile- also documented. Under the assumption dependent lifestyle are also increasing that high-quality bus services can foster the demand for more urban and urbane TOD, this case also investigates places (e.g., “café culture”). development activities along Southern California BRT lines. Due to a variety of factors—including exclusionary zoning, stringent It is not just bad traffic and foul air that condominium liability laws, and NIMBY have sparked interest in TOD. Southern activity—there is an undersupply of California’s demographic shifts—in dense, multifamily housing in Southern particular, large increases in Spanish- California. As a consequence, the region

411 is rated as the “nation’s best multifamily County currently has two light-rail lines market due to development constraints plus a commuter-rail service (the (Proposition 13 tax/spend limits) Coaster) (see Map 19.1), and several and investors’ flight to quality.”3 light-rail extensions are underway. Increasingly, transit stops are being Today, Los Angeles County boasts one viewed as natural habitats for targeting heavy-rail line, three light-rail lines, and affordable-housing production. an extensive network of commuter-rail services (Metrolink) (see Map 19.2). Other Factors Stimulating TOD In both San Diego and Los Angeles, Market needs are not the only factors growth is gravitating to transit stations in that have boosted the prospects for part because traffic congestion, in the transit-supportive growth in Southern minds of many, is becoming unbearable. California. Rail transit—in particular, In 2000, metropolitan Los Angeles and light and heavy rail—is being built and San Diego were ranked the first and fifth expanded at a feverish pace, providing most congested regions nationwide, fertile soil in which to plant TOD and respectively.4 The opening of the Mission joint development projects. San Diego Valley extension of San Diego’s Blue

Map 19.1. Regional Rail Transit Network and Planned Extensions in San Diego County, 2000. Source: Metropolitan Transit Development Board.

412 Map 19.2. Metro Rail Services, Los Angeles County. Source: Los Angeles County Metropolitan Transit Authority.

Line in 1997 sparked the development of The Hollywood/Highland project located several TODs: Hazard Center, Rio Vista on Los Angeles’s Red Line, where the West, and Fenton Market. Similarly, Grauman’s Chinese Theatre (home to the along the Los Angeles Red Line, several Academy Awards ceremony) is located, notable projects (Hollywood/Highland, was sited near the subway so that many Hollywood/Vine) are taking form. New of the 9 million annual visitors could TOD projects have also been proposed patronize transit, allowing parking to be or are under construction along Los substantially downsized. Angeles’s recently opened Gold Line to Pasadena (e.g., Avenue 57 and Del Mar). Policy Context

Besides offering tenants and customers San Diego County a chance to avoid traffic congestion, the ability to reduce parking outlays In San Diego County, a host of ($30,000 per space) has further progressive policies and programs, attracted developer interest in TOD. introduced by municipalities and the

413 regional planning organization, has higher residential densities, mixed land helped foster TOD over the past decade use, and a combination of the above or so. Regional planners are increasingly initiatives embedded within a new Urban looking to TOD to transform greater Village Overlay Zone.7 San Diego from a spread-out, automobile- oriented setting to a more compact, In June 2002, the city of San Diego mixed-use, transit-supportive built approved its Strategic Framework form. To pave the way toward a more Element, which updated its already sustainable future, the region’s transit-friendly General Plan.8 This 18 municipalities and the county nicely illustrated document proposed a government have endorsed the recent “City of Villages” as the future form. smart-growth plan developed by the San The City of Villages concept is Diego Association of Governments composed of five hierarchical village (SANDAG).5 Regarded as a first step categories (see Figure 19.1). TOD towards the implementation of regional guidelines are recommended by its smart growth, the plan aims to shift accompanying Action Plan to apply to development to “transit focus areas.” two categories—urban village centers (e.g., University Towne Center) and To better integrate land use and transit corridors. transportation, SANDAG, MTDB, the North San Diego County Transit The level of cooperation between San Development Board (NCTD), and Diego’s regional entities and local local jurisdictions jointly prepared a municipalities in promoting TOD is Regional Transit Vision (RTV) report exemplary. All site plans requiring a in November 2001. The RTV identifies discretionary permit from the city of transit improvements that are needed San Diego are forwarded to MTDB for to bring about increased TOD use. review and comment. Also, a senior SANDAG recently introduced a 5-year, planner from the city of San Diego $25-million incentive program to works at MTDB as an agency liaison.9 leverage smart-growth pilot projects. Moreover, as part of the RTV, SANDAG These measures are expected to and local jurisdictions work together to 1 increase the share of jobs within ⁄4 mile identify areas where future transit of transit stops from 39% in 2000 to stations can be located and to prepare 45% in 2030. As a result, transit’s share design guidelines that ensure high levels of commute trips is expected to jump of interaction between transit facilities from 5% to 10% over the same period.6 and neighborhood centers.

At the municipal level, the city of Other policies have likewise worked in San Diego is one of the most TOD- favor of TOD. SANDAG has developed supportive jurisdictions in the United its own trip-generation rates for States. In 1992, the city adopted TOD evaluating the impacts of mixed-use, Design Guidelines and Council Policy high-density projects; rates are lower 600-39 to promote TOD projects. Some than Institute of Transportation of its pioneering initiatives included the Engineers standards for comparable enactment of reduced parking standards, single-use developments.10 Also, the city a transit area overlay zone to encourage of San Diego has amended its street-

414 Figure 19.1. The City of San Diego’s Future City of Villages. Source: City of San Diego. design manual to allow narrower street by getting more people onto widths in transit-served neighborhoods. neighborhood streets, to build social In Chula Vista, new development capital.11 The guidelines are intended not proposals are reviewed against a Design only for transit station areas but also infill Element Checklist that, among other and redevelopment projects. things, promotes orientation to transit, bicycles, and pedestrians over In recent years, the Los Angeles County orientation to automobiles. Department of Regional Planning has devoted considerable resources to TOD The Los Angeles Region planning along unincorporated portions of the Metro Blue Line. In 1996, it The degree of interagency coordination formed transit-oriented districts around to promote TOD in metropolitan Los four Blue Line stations: Slauson, Angeles has been equally impressive. Florence, Firestone, and Imperial. The Southern California Association of Zoning ordinances were enacted to Governments, the region’s MPO, worked prevent land uses that are incompatible closely with the Los Angeles County with TOD and to provide density Department of Regional Planning to bonuses. prepare guidelines for development of livable communities. The core idea of TOD is also actively promoted by Los livable communities, like TOD, is to Angeles’s regional transit agency for promote mixed land uses in pedestrian- Los Angeles, the MTA. The MTA has friendly environments so as to reduce assigned responsibility for TOD activities reliance on the private automobile and, to its Department of Joint Development.

415 The department strives to exploit Good Planning—the Necessary but development opportunities around rail Insufficient Ingredient stations both to generate operating revenues and build a ridership base. The Blue Line, which runs from downtown Los Angeles to downtown The city of Los Angeles promotes TOD Long Beach, cuts across numerous city mainly by preparing specific plans for boundaries. Much of the line traverses station areas. To date, it has formed two large swatches of unincorporated land transit-oriented districts: Avenue 57 and administered by the county government. Vermont/Western Avenue. Zoning As the nation’s most heavily patronized reforms, like mixed-use overlays and light-rail corridor, the Blue Line serves density bonuses, have been introduced immigrant and transit-dependent in each district to leverage TOD. populations. These populations are located mostly in economically depressed Joint Development neighborhoods, which provide less-than- ideal conditions for attracting developer The MTA’s Department of Joint investments. Development is in charge of the system’s “property asset development and To overcome these obstacles, the management program to promote County’s Regional Planning Department the best use [of] MTA-owned properties (RPD) has gone the extra distance to at and adjacent to transit station corridors create a welcoming environment for with private and/or public sector developers. Soren Alexenian, the planner cooperation.”12 Each joint development in charge of the RPD’s TOD efforts, said project aims to promote transit ridership in an April 2003 interview that the state while generating financial “returns on of California’s passage of the Transit investment” to the MTA, based on a Village Act in 1991 prodded the county fair market return for their properties. and its board of supervisors to think The MTA, with the assistance of local seriously about TOD around rail jurisdictions, prepares development stations. While the Transit Village Act guidelines specific to each joint offered little in terms of direct financial development site that designate types benefits to the county to further their and intensities of land uses as well as efforts, it put TOD “on the radar screen” transit-oriented design features. MTA’s and made it worthwhile to consider. joint development implementation Provisions like the exemption of TODs procedures are shown in Text Box 19.1. from level-of-service standards under California’s Congestion Management Challenges to TOD in Act were also appealing. Southern California Throughout the conceptualization and Southern California experiences development of the station-area plans, underscore the challenges of county planners meet with local implementing TOD, providing a citizens’ advisory groups every week. cautionary tale of the promises and The close working relationship between pitfalls of coordinating projects among planners and citizens is a hallmark of multiple partners and stakeholders. this planning effort. According to

416 MTA’s Joint Development Implementation Procedures

A. Project Proposals Initiation / Solicitation: MTA periodically conducts market feasibility studies of agency-owned properties at and near transit stations. These market analyses provide the basis for establishing project priorities and implementation strategies. Then MTA also prepares development guidelines for each joint development project and solicits proposals through a competitive selection process. Alternatively, projects may be initiated by a private entity, MTA, or other agencies.

B. Proposal Evaluation: 1. Unsolicited Proposals: Anyone wishing to propose a joint development project can submit it directly to MTA’s chief executive officer (CEO). The CEO and staff, in consultation with local jurisdictions, then analyze the proposal using MTA Joint Development Implementation Procedures. (See: http://www.mta.net/trans_planning/ CPD/joint_development/images/ attachment_b.pdf.)

2. Solicited Proposals: In evaluating proposals solicited through an RFP process, the MTA utilizes an evaluation panel generally consisting of MTA personnel, consultants, academic professionals, and local jurisdiction technical staff, where appropriate.

C. Exclusive Negotiations Agreement: Upon approval of a recommended developer and authorization by the MTA Board, the CEO enters into an Exclusive Negotiations Agreement (ENA) with the developer for a period of 180 days.

D. Development Agreement: Upon satisfactory fulfillment of all the development requirements in the ENA, the MTA may enter into a Joint Development Agreement for the implementation of a project. The Development Agreement shall describe the rights and responsibilities of both parties.

E. Adjacent Construction Guidelines: These policies and procedures shall be implemented, as appropriate, in conjunction with the “Adjacent Construction Design Manual, Volume III, MTA Design Criteria and Standards, 1994.” This Manual establishes the criteria and review process for all construction.

F. Statutory Basis: The MTA’s joint development function aquired a statutory basis. Under California Public Utilities Code, Section 30600: “The district may by grant, purchase, gift, devise, or lease, or by condemnation, or otherwise acquire, and hold and enjoy, real and personal property of every kind within or without the district necessary or incidental to the full or convenient exercise of its powers.”

Text Box 19.1

417 Alexenian, previous planning initiatives mixed-use proposal would take 6 months suffered because local communities for approval. Developers pleaded for a were not involved in the planning more predictable and manageable process from the beginning. Citizens entitlement review process. In response, often felt excluded from the decision- the county has expedited entitlement making process and feared the planners reviews, reducing development fees and were trying to impose changes upon providing density bonuses for Blue Line their community. While planners may station areas. be tempted to complete planning studies first and then approach the Cutting red tape does not mean that public with a well-prepared set of developers are given a free rein. In the recommendations, Alexenian stressed case of the Blue Line station areas, the the critical importance of involving RPD placed a number of conditions on local citizens early on. In the case of the developers in return for streamlined Blue Line, the RPD was able to avoid a reviews. In particular, while automobile- confrontation with local residents when oriented uses (such as single-use the station-area plan went before the commercial strip development and Board of Supervisors for approval. car-wash businesses) were previously Developers like public engagement, permitted almost by right, revised station- since reducing the likelihood of a area zoning codes ban automobile- community backlash against a TOD oriented uses that are considered to be out development reduces the risks inherent of synch with TOD. Another condition of in a project. development approval is that projects include a 33% affordable- or senior- Developer risks have also been reduced housing component. in other ways. The RPD, for example, has created a transparent, finite, and The county’s RPD has also managed to quick process for developers to use in get TOD on the “radar screens” of other proposing projects and securing county agencies. For example, the RPD approvals from the county. According to successfully worked with the county Alexenian, the most effective tools “get public works department to install street government out of the way” and reduce trees, crosswalks, and other amenities the “red tape” involved with project next to the Florin Blue Line station (see approvals. Expedited entitlement Photo 19.1). Standards for pedestrian- review is a critical component of the friendly street designs have also been county’s campaign to leverage TOD. developed cooperatively among RPD, RPD consulted with local developers the public works department, and and found they wanted density bonuses emergency response agencies (including as-of-right rather than via special county fire services). variance. Efforts are presently underway to codify, de jure, higher permissible Now that the RPD has completed station densities around transit stops. area plans and the county board of supervisors has approved them, the Getting permits for mixed-use agency’s focus has shifted to “marketing” development has historically been TOD. However, getting the word out difficult and drawn out. Typically, a requires staff time and resources, two

418 uses that favor the automobile while struggling to revive sometimes moribund real-estate markets. In effect, TOD is forced into the position of fostering economic revitalization while simultaneously transforming the local urban fabric.

Planting the Seeds of TOD in a Sea of Photo 19.1. Florin Blue Line Station. Automobile-Oriented Development

Metropolitan Los Angeles is in many things in short supply given recent ways a setting where islands of TOD budget troubles. While the MTA has have formed in a sea of automobile- been a helpful partner in the past, staff oriented development. There, automobile- and budget cuts in its own Department of oriented uses are routinely approved by Joint Development have limited its role the county, almost by right. in outreach. To date, while some infill and nonprofit housing developers have The challenges of making TODs work expressed interest, no TOD projects have in a land of automobile-oriented broken ground, nor are any development developments run deep in Los Angeles, proposals in the pipeline for any Blue particularly for nonprofit developers, Line station areas. Clearly, efforts to who are often short on investment engage the community, streamline the capital. According to Livable Places— entitlement process, and introduce zoning a Los Angeles-based nonprofit housing incentives are a necessary but not developer—financing mixed-use sufficient condition for TOD. projects for private and nonprofit developers in Los Angeles is difficult, Impediments—Automobile-Oriented if not impossible, unless a project Development and Economic Stagnation includes structured parking. This is not so much a requirement imposed by local The locations where TODs are planned governments as it is a financial reality. and built are, by definition, driven by the Even in the city of Los Angeles, where locations of transit stations. Often, new the zoning codes provide a 1,500-foot transit stations are sited with little regard buffer around transit stations that for an area’s potential to spawn TOD reduces parking requirements, mixed- and more regard for where land can be use projects are tough sells. The need acquired most cheaply, with the least for parking is driven by the perceived amount of disruption. Since transit requirements of the investment agencies may try to reduce their community. Investors and banks construction costs by siting stations are so used to financing single-use, in economically troubled areas automobile-oriented development with where right-of-way is cheap, TOD standard code parking that they do not undertakings in these areas are often feel comfortable with mixed-use doubly challenged—they must overcome development unless it provides ample local zoning codes and surrounding parking to attract motorist patrons. This

419 is even the case with vertically mixed redevelopment agency even though the projects (e.g., ground-floor retail and project had received the whole-hearted upper-level lofts and apartments) support and financial backing of the city within easy walk of a rail station. This government. While the city’s general stance puts a huge financial strain on plan designated the project’s parcel and nonprofit developers, in particular, surrounding area for housing, the who struggle to obtain financing for redevelopment agency had its sights on single-use projects. The added strain automobile-oriented commercial of financing an expensive parking development. Livable Places was not structure puts mixed-use projects out helped by the development pressures in of their financial reach. the neighborhood, which are active, but decidedly automobile-oriented. A Redevelopment Agencies: Powerful but number of projects currently under Sometimes Problematic TOD Partners construction adjacent to and surrounding Long Beach’s Blue Line stations include In metropolitan Los Angeles, some a car wash and a gas station. Through staff from municipal agencies and drawn-out negotiations with the city, transit operators expressed a lack of Livable Places has been able to get self-assurance in their TOD “deal- approval for its project despite the initial making” abilities. They also are resistance from the redevelopment somewhat skeptical of each other. agency. Local governments question the commitment of transit agencies to Since Los Angeles’s new rail lines often land-use issues, and transit agencies run through neighborhoods that were question the TOD implementation developed decades ago in an automobile- expertise of local governments. oriented fashion, there is often a lack of Moreover, local governments and vacant land near stations. Where land is transit agencies alike feel that their available, it is often in small parcels that biggest TOD challenges stem directly are difficult and expensive to assemble. from preexisting land-use patterns and Here, the resources and tools available to their own preexisting limitations as redevelopment agencies can help. After public agencies. overcoming the initial obstacle of the redevelopment agency’s plans conflicting Redevelopment agencies are a different with the city’s general plan, Livable story. In California, redevelopment Places was able to garner financial entities are in a particularly good assistance from the city to purchase the position to leverage TOD because of the parcels it sought to package together into considerable fiscal powers granted to a good-size housing project. Still, them. However, when the organizational obstacles to this project remain. Yielding focus of a redevelopment agency is not to pressures from local citizens’ groups on TOD, these powerful entities can and merchants, the city has yet to relax easily become impediments instead of its parking standards for the site, insisting helpful partners. Livable Places’s efforts on 2.25 parking spaces per dwelling unit. to develop TOD housing on a parcel Such standards make affordable housing near a Long Beach Blue Line station difficult, especially when land constraints met with resistance from the city’s and high land prices require costly

420 podium, tuck-under, or below-grade agencies: eminent domain property parking. acquisitions.

In unincorporated parts of Los Angeles First, the CRA played the role of land County along the Blue Line, the county’s assembler, buying the office building RPD has encountered similar obstacles. and its parcel through an open-market There, as in Long Beach, lot sizes are purchase and negotiating a lease for small, and large vacant parcels are hard the MTA-owned property for the to come by. The RPD suspects that this is developer. After buying the office part of why developers have shied away building, the CRA needed to help from TOD projects there so far, but the relocate the building’s tenants. One of RPD does not have the powers of the tenants filed a lawsuit challenging its eminent domain or the resources to involuntary removal from the property. acquire and assemble parcels to attract The CRA took on the role of the developers. The future of TOD in principal defendant in this case, which unincorporated areas rests in RPD’s they subsequently won. Kipp Rudd, ability to convince the County Board of the CRA’s project manager for the Supervisors to nominate and back the Hollywood/Highland project, feels formation of Blue Line station areas as that by playing the role of property redevelopment districts. assembler, tenant relocator, and principal legal defender for TOD projects, When a redevelopment agency is redevelopment agencies can bring whole-heartedly “on board” with a TOD an important set of tools to the TOD project, its organizational experience in partnership table—tools that circumvent dealing with the development some of the political and regulatory community and its powerful toolkit can obstacles other entities face in using the catapult it into a limelight role. Such was powers of eminent domain. the case in Los Angeles, where the city’s Community Redevelopment Agency With the Hollywood/Highland project, (CRA) was a driving force behind the the CRA also functioned as “middleman” successful completion of the Hollywood/ between the developers and the city, Highland mixed-use project along the negotiating the terms of entitlements Red Line. At this site, a retail complex and approvals from the city for the was to be built partially through a joint developers. The CRA furthered its role as development deal with the MTA on land negotiator, brokering a deal with the city they owned next to the subway station, for the city to give $100 million to the as well as through acquisition of an project (the price tag for the entire project occupied office building, which was to was $600 million), which included be vacated and torn down. Coordinating $60 million in bonds to build a parking and negotiating these deals became the garage and $30 million in lease revenue CRA’s job, and they used a wide range bonds to build the Kodak Theatre. of skills and financial incentives to accomplish the task. Interestingly, Financing Tools and Obstacles many of these skills were substituted for a tool traditionally employed by In the Los Angeles area, a number of and expected of redevelopment innovative financing tools are being

421 employed to leverage TOD. One is a lenders by increasing the population of partnership between private lenders and potential buyers. MetroLink/Southern California Regional Rail Authority that offers incentives for Unique sources of funding are also being homebuyers to purchase transit-oriented used in the Los Angeles area to facilitate housing. Another is a state bill to create parcel assembly. In the case of Livable a state infrastructure bond that favors Places’s Long Beach project, the areas designated for TOD. LEMs and Enterprise Foundation provides funds various redevelopment funding tools are for land acquisition; the foundation is a also being used to leverage TOD. partnership of nonprofit organizations that provides funding and technical As in the Bay Area, an LEM is assistance to communities for local currently being pilot-tested in Los economic revitalization. Additional funds Angeles. To further increase housing have been secured from the mainstream affordability and promote public transit banking community. Since California use for buyers in the high-cost housing requires banks to lend a fixed percentage market of Los Angeles, the developers of their portfolio to affordable-housing Montage Development and American projects, and since there are so few City Vista and Fannie Mae and affordable-housing projects in Southern MetroLink have developed an California, banks are sometimes eager to innovative housing-transportation find projects to lend to. This access to partnership. American City Vista and ready and eager funding sources makes Fannie Mae created the “LA Transit nonprofit and affordable-housing Mortgage,” with flexible credit developers potentially powerful TOD guidelines and a down payment project partners. requirement as low as 1% or $500 for buying a home at Montage at Village Redevelopment agencies also represent Green.13 In addition, MetroLink a potential source of funding for provides each new homebuyer with up housing. Increasingly, they are being to two free MetroLink monthly passes. required by the state of California to contribute a portion of their special The city of Long Beach has also assessment revenues (such as TIF funds) spearheaded its own affordable-housing to affordable-housing projects. In the lending program, which Livable Places is case of the city of Los Angeles’s CRA, using to develop transit-based housing. state law requires the agency to Known as a “silent second” mortgage, contribute 20% of its TIF funds to a this program provides a loan to low- or citywide affordable-housing trust fund moderate-income homebuyers that account. The city then uses these funds covers the down payment of their home to issue grants to nonprofit housing purchase. The loan is “silent” because it developers to build below-market-rate does not require repayment until the housing. Until recently, these funds home is sold, allowing the homebuyer could be used anywhere in the city. To to qualify for a larger principal loan encourage TOD in the Hollywood/ amount. This loan program helps Highland project area, the CRA organizations like Livable Places justify increased its contribution to 25% and the financial viability of their projects to specified that TIF funds collected from

422 the Hollywood/Highland project be Without some form of substantial public spent in close proximity to the rail stop. financial assistance, these TOD The city is currently in the process of opportunities will be stalled. expanding this requirement to all future CRA projects. A serious barrier to implementing TOD in Southern California, in particular in San This affordable housing contribution Diego County, has been the lack of requirement has both positive and infrastructure capable of supporting negative implications for TOD projects. compact development in many urban On the positive side, placing residences and older suburban neighborhoods. in redevelopment areas that would have, Undersized water mainlines, outdated under normal conditions, been built out storm water runoff facilities, and an with high-revenue, high-profit uses such overall aging physical plan can limit how as office and retail space ensures that much infill and mixed-use development TODs are more balanced in character. gets built. Proposition 13, passed in 1978, The better jobs-housing balance a placed a ceiling on property-tax increases, development provides, the less residents limiting the amount of funding available will travel outside their neighborhood to for public infrastructure in California. shop and commute. Furthermore, TODs The city of San Diego faces an estimated with permanent residents instill a sense $2.5-billion public facilities shortfall by of security by supplying an area with 2020. Since TODs offer the potential for 24-hour “eyes on the street.” Finally, more efficient use of transportation and on-site residents provide commercial other public infrastructure, San Diego’s entities with potential customers City of Villages Plan calls upon stepped- throughout the week, whereas up TOD to help reduce the public employment centers provide potential facilities shortfall. customers just 5 days per week for only 9 hours in a day. A California Assembly bill—AB 531— aims to ease this infrastructure shortfall Nevertheless, the MTA’s joint pressure (see Text Box 19.2). The development staff contends that the ambitious bill, sponsored by several affordable-housing requirements placed members of the Southern California on the CRA have limited their ability to Assembly, calls for a $10-billion facilitate deals—in particular, at two “Community Infrastructure and potential TOD sites: Hollywood/Vine Economic Development Bond,” in part and Vermont/Western. Developers to serve the needs of communities near initially approached the CRA because transit stations and to accommodate the land consolidation costs were too high-density development.14 high. But due to the affordable-housing requirements of CRA projects, the TOD Cases projects did not financially pencil out. The MTA’s hands were tied as well. San Diego Region Since the public looks askance at the MTA using its funds to subsidize Over the past two decades, TOD has development, the agency is reluctant to prospered in the San Diego region. The write-down land costs for developers. first wave of TOD occurred in the late

423 Place, Barrio Logan, and an adult CALIFORNIA ASSEMBLY BILL 531 education center in National City.

This bill would enact the Community Since 2000 and because of the region’s Infrastructure and Economic Development economic downturn, only two Bond Act of 2004, which, if adopted, would reasonably large-scale TOD projects authorize the issuance, for the purposes of have been completed so far—Paseo financing local infrastructure and Condominiums and City Heights Urban economic development projects, of bonds in Village. Of the 15 TOD cases listed in the amount of $10,000,000,000 pursuant to the Table 19.1, most are located in the cities State General Obligation Bond Law. Most of San Diego (8 cases) and La Mesa relevant to TOD is the following: (5 cases). Two-thirds are located in

➢ Establishing a sufficient source of state suburban settings, and two are situated financing that will be made available to local in downtown San Diego. Seven TODs governments through grants and low-interest were built on former industrial sites and loans through the California Infrastructure and four on vacant land. Joint development Economic Development Bank over a 10-year of some kind (i.e., development on period will create both public and private MTDB-owned land) occurred in 60% incentives to invest in local infrastructure. State funds will leverage local financing of the TOD cases. Most (13 of 15) sources and assist communities to repair and of the TODs have occurred around upgrade key locally identified infrastructure light-rail stations; only two are served and community development projects, which solely by buses. will enhance local quality of life and expand the local economy. Most of the region’s early TODs were

concentrated in the city of La Mesa, a ➢ The bank shall give a significant priority to infrastructure projects incorporating one or city that has looked on TOD as a tool to more of the following: an infrastructure project help develop vacant and under-developed that will expand a community’s ability to downtown parcels and, in so doing, accommodate increased residential densities; expand its tax base. With the extension and an infrastructure project that will increase of the Blue Line through Mission Valley, residential and commercial uses within the TOD projects began to sprout in many of vicinity of a rail station or a permanent transit stop served by local public ground the new station areas over the past 5 to transportation. 10 years.

Text Box 19.2 Previous studies have documented many of these earlier projects in considerable 1980s and early 1990s. Nine projects detail.16 Two of the region’s more recent were completed during this period (see TODs, which offer useful policy Table 19.1 and Map 19.3). A second insights, are reviewed below. wave of TOD activities occurred over the period of economic boom from 1995 Hazard Center to 2000 and in the wake of the opening of the Mission Valley line. Between Some 40 years ago, the Hazard family 1995 and 2000, TOD activities were still amassed a considerable amount of land going strong. Five notable projects were in the city of San Diego’s Mission completed during this period: Hazard Valley and successfully lobbied to have Center, Rio Vista West, Fenton Market highways along the riverbed. When the

424 Table 19.1. Transit-Oriented-Development Projects in San Diego County15 Year Transit Services / Prior Joint Project Project Description Location Funding Completed Ridership Land Use Development 1. MTS / James 2.5 Ac; 180,000 sq. ft. office (10-story 1988 2 LRTs (Blue & Orange); 7 Downtown MTDB & San Diego County Industrial Public project R. Miller joint development) buses; 20,000 daily on / off (San Diego) jointly funded through tax- Building exempt lease revenue bonds 2. Villages of La 20 Ac; 2- or 3-story, 384 apartments 1989 1 LRT (Orange) Suburban Mostly private; transit agency; Vacant land Station Mesa (La Mesa) exchanged land for better incorporated location; redevelopment agency; city; TIF 3. Navy Housing 38.5 Ac; 244 low & moderate-income 1989 1 LRT (Orange); 4 buses Suburban Private Vacant land No Gilmore Terrace dwelling units (DUs). (La Mesa) 4. Creekside 4 Ac; 141 apartments; daycare center 1989 1 LRT (Orange); 1 bus Suburban Private Vacant land MTDB land Villas (San Diego) 5. Uptown 14 Ac; 320 DUs; 140,000 sq. ft. 1990 6 buses Urban Private; city: $9 million "Big-box" City-owned District retail/commercial; 3,000 sq. ft. (San Diego) retail center site community center 6. America Plaza 34-story, 555,000 sq. ft. office; 17,000 sq. 1991 2 LRTs (Blue & Orange); Downtown Private: $3.78 million; MTDB: Retail Station ft. retail; 272-room hotel; 10,000 sq. ft Coaster & Amtrak; 20 buses; (San Diego) $1.2 million; city; redevelopment incorporated museum 9,650 daily on / off agency (CCDC) 7. La Mesa 5.6 Ac; 95 condos; 29,000 sq. ft. retail; 1991 1 LRT (Orange); 3 buses Suburban Private; city; redevelopment Non-industrial Station Village Plaza 65,000 sq. ft. commercial (La Mesa) agency; transit agency; TIF incorporated 8. Grossmont 8.8 Ac; 113,278 sq. ft. retail 1991 (JD); TOD 1 LRT (Orange); 7 buses Suburban Private; MTDB (transit center) Vacant land 600-car shared Trolley Center (planning) (La Mesa) parking 9. Barrio Logan / 4 Ac; 144 apartments; 100,000 sq. ft. 1992;1996-97 1 LRT (Orange) Urban $12.3 million from public and Industrial No Mercado commercial / retail private sources, 6 equality partners involved 10. Hazard 41 Ac; 120 condos; 136,000 sq. ft. retail; 1995 1 LRT (Blue) Suburban Private Industrial No Center 300,000 sq. ft. office; 300-room hotel (San Diego) 11. Rio Vista 94 Ac; 300+ apartments; 240 condos; 970 1996-97; 1999; 1 LRT (Blue) Suburban Private Industrial No West DUs; 37,000 sq. ft. retail; K-Mart 2003 (San Diego) (Sand/gravel operation) 12. National 2,000 sq. ft. commercial; 24,000 sq. ft. 1997 1 LRT (Blue); 2 buses Suburban MTDB as landowner; Industrial Equity City Adult with 20 classrooms and administrative (National City) redevelopment agency; school partnership, Education offices district 55-year, Center $1/year ground lease 13. Fenton 725 DUs; 525,000 sq. ft. commercial / 1999-2000; 1 LRT (Blue) Suburban Private Industrial No Market Place retail; Branch library portions (San Diego) permitted 14. Paseo 0.5 Ac; 18 condominiums (2-story 2003 1 LRT (Orange); 3 buses Suburban Private Industrial / No Condominiums townhouses over live/work space); 1 (La Mesa) warehouse office/retail 15. City Heights 37.6 Ac; 9 city blocks; 116 townhomes; Completed / 3 buses Urban City; redevelopment agency; Mixed No Urban Village 6-story, 127,000 sq. ft. office; 111,000 sq. under (San Diego) private residential ft retail; city facilities; construction retail Ac=acre; JD=joint development (on transit-agency land); MTDB=Metropolitan Transit Development Board; CCDC=Central City Development Corporation; TIF=Tax Increment Financing 13. Fenton Market Place

11. Rio Vista West 8. Grossmont Trolley Ctr.

10. Hazard Ctr. 7. La Mesa Village Plaza 14. Paseo Condominiums

2. Village of La Mesa 15. City Heights

3. Navy Housing Gilmore

12. National City Adult Edu. Ctr.

9. Barrio Logan / Mercado 4. Greekside Villas

6. America Plaza

5. Uptown

1. MTS / James R. Miller

Map 19.3. Transit-Oriented Development Projects in San Diego County, 2003.

426 Blue Line extension to Mission Valley station. Lying immediately to the south was announced, the family seized the are 120 condominiums (see Photo 19.4). opportunity and began proposing several Wide sidewalks, street trees, street large-scale, mixed-use, master-planned furniture, and zebra-crosswalks help projects for parcels strategically sited make Hazard Center a very pedestrian- near planned rail stops. Most recently, friendly environment. The high-density, the Hazard family built a 136,000- mixed land uses and pedestrian-friendly square-foot shopping center across from environment make Hazard Center a the Blue Line’s Hazard Center Station prototype of TOD. The community is (see Photos 19.2 and 19.3).17 The retail self-contained to a certain degree— facility features a supermarket, clothing people can live, work, and shop locally. stores, popular restaurants like Prego’s Workers can also commute via the Blue and Trophy’s,18 and a seven-screen Line from and to this site, improving the cinema. Recently, a 300-room hotel and efficiency of the Blue Line by bringing a 300,000-square-foot office building bi-directional transit riders. (See Text were added to Hazard Center. All of the Box 19.3 for a discussion of Hazard non-residential land uses are north of the Center and three other Blue Line TODs that make up the “Mission Valley TOD Corridor.”)

Hazard Center is a largely market-driven TOD. Relatively little government assistance was needed to build the project. While the city of San Diego’s TOD-friendly zoning and parking codes were used to the developer’s advantage, no major financial commitments were needed from the city. The combination Photo 19.2. Hazard Center’s of worsening traffic congestion, shifting Shopping Center and 300-Room Hotel. demographics, and a receptive policy (Northwest of the Hazard Center Station) environment made choice parcels, like

Photo 19.3. Hazard Center’s Shopping Center and 300,000-Square- Photo 19.4. Hazard Center’s Foot Office Building. (Northeast of the 120 Condominiums. (South side of the Hazard Center Station) Hazard Center Station)

427 Mission Valley Center

10. Hazard Center

13. Fenton Market Place

11. Rio Vista West

“Mission Valley TOD Corridor”—San Diego Blue Line

Two TODs (Hazard Center and Fenton Market Place) plus a “para-TOD” together with the Mission Valley Center’s shopping mall along the Mission Valley segment of San Diego’s Blue Line constitute a “TOD corridor.” The clustering of these four master-planned projects at four consecutive stations provides great inter-station access via the convenient Trolley service. In the long run, the good inter- station access of TOD projects may increase ridership (including the all-important bi-directional flows), bring more business to stores, instill greater security through “eyes on the street,” and stimulate more development around transit stations.

Mission Valley Center is a combination of automobile-oriented development and TOD. Although it has large parking lots in front of stores, the Blue Line station is located right behind the stores (see photo above), which allows shoppers to easily access the shops via the Trolley service. The supermarket in Hazard Center not only serves residents living in the surrounding station area, but also customers from other stations. The photo above shows that customers can bring their groceries with shopping carts into the Trolley station after shopping and leave them right at the station.

Similarly, Rio Vista West is a para-TOD. While the original project, designed by Peter Calthorpe, had the densities and limited parking of a more traditional TOD, market realities prompted the developer to revise the original plan to accommodate several large floorplate retail projects. Rio Vista is today seen as a setting where transit users, pedestrians, and motorists coexist in reasonable harmony, and where the project’s cost pro forma pencil out.

Text Box 19.3 the Hazard Center site, a “natural” for The City Heights Urban Village contains spawning San Diego’s newest generation 116 townhomes, several schools, a of TODs. six-story, 127,000-square-foot office building, 111,000 square feet of retail, City Heights Urban Village a theater, civic facilities (such as a park and soccer fields), and a recreation Before it was ripe for urban center. Recently, more townhomes redevelopment, City Heights (see Map and office space were added (see 19.3) suffered from years of decline and Photo 19.5).21 high crime, blemishing San Diego’s reputation as a vacation and convention In contrast to Hazard Center, proactive destination.19 While no rail lines serve measures were needed from the public the neighborhood, good-quality bus sector to make the City Heights project services are being considered to help happen. The planning and policy tools jump-start an in-city TOD. used to leverage this project include site assembly, fee reductions, permitting To revitalize City Heights, a assistance, off-site infrastructure redevelopment project containing three improvements, and low-cost financing subprojects was built, one of which is the incentives. For example, the nonprofit City Heights Urban Village. The Urban organization, Price Charities, provides Village was made possible through the $25,000 second mortgages to those who cooperation of several public agencies purchase homes in City Heights. It also (e.g., the City Manager’s Office, San reduces a portion of their mortgage or Diego’s Redevelopment Agency, the rent payment by providing community Metropolitan Transit District, and two services.22 school districts), a private enterprise (CityLink Investment Corporation, Los Angeles Region the master developer of City Heights Urban Village), and Price Charities, a Joint development on transit-agency land nonprofit organization. The project is the most common form of TOD in aims to bring mixed land uses, affordable greater Los Angeles primarily because of housing, and high-quality transportation the limited amount of land available to the area. around transit stations. However, classical

The City Heights project occupies nine blocks (37.6 acres) bounded by University Avenue, 45th Street, Landis Street, and 43rd Street. The project differs from most TOD projects, which are mostly located by light-rail stations, in being served only by three bus lines.20 Together, the three lines serve significant portions of the city, providing good accessibility to downtown San Diego and burgeoning Photo 19.5. City Heights Office and job centers to the north. Townhomes, San Diego, California.

429 TOD components—such as mixed land troubled neighborhoods, the Gold Line uses and pedestrian-friendly designs— runs through neighborhoods where the have been embedded in most joint market is ripe for development, and development projects. Los Angeles’s developer interest remains strong. experiences underscore the importance of Several joint development/TOD projects targeting joint development projects in have been proposed or are under areas with strong local real-estate construction along the Gold Line fundamentals. (e.g., Del Mar and Avenue 57).

Map 19.4 shows the TOD and joint Hollywood/Western development activities along the rail lines in Los Angeles County, where joint The Hollywood/Western project lies development denotes building activities along the Metro Red Line. It is a two- occurring on Los Angeles County phase project with affordable housing and MTA’s property or air rights. Most retail space. The first phase—composed projects are located along the Metro Red of 60 two-story affordable units that Line, where the market pressures are enjoy a direct connection to the Metro rail strong. Joint development or TOD station on the site—was opened in late projects have been completed or are in 2000 (see Photo 19.6). The second phase active negotiations at 10 of 16 stations.23 is composed of 70 affordable-housing Twelve projects are in various planning units, in three- to four-story wood frame phases (e.g., Hollywood/Vine, construction; 10,000 square feet of Wilshire/Vermont). (See Table 19.2.) neighborhood-serving retail space; and a child-care center. It also has a direct link Along the Blue Line, joint development/ to the Metro Red station. Redevelopment TOD activities have slowed ever since funds, including TIF, were relied on the completion of the Pacific Court TOD heavily to make this project a financial at Transit Mall Station. Fairly poor reality. market performance of the redevelopment-assessed projects, Joint Development and BRT— combined with the region’s economic Los Angeles downturn, have tempered developer interest in mixed-use projects along the Los Angeles’s Metro Rapid, one of the Blue Line corridor. The ground-floor United States’ first BRT services, might retail components of these projects in have been expected to attract TOD particular have suffered, evidenced by because of the enhancement of surface the many vacant storefronts. bus services. To date, however, little development has been drawn to the While joint development/TOD projects BRT corridor, although this could near Los Angeles light-rail transit may change over time as the system matures be waning near the Blue and Green and expands. Lines, this may not be the case for the recently opened Gold Line to Pasadena BRT represents a hybrid of rail transit (see Text Box 19.4). In contrast to the service and bus service, sometimes called Blue and Green Lines, which run rubber-tired rail transit. The general BRT through large swaths of economically components include frequent service,

430 Map 19.4. Joint Development and Transit-Oriented Development Projects in Los Angeles County.

431 Table 19.2. Joint Development Projects in Los Angeles County Year Project Project Description Station Location Location Completed 1. Union Station • 12.3-Ac. Transit Ctr.; MTA 1995 Metro Red & Downtown Gateway headquarters; 2 million sq. ft. of upcoming Metro (City of Los Angeles) future office and retail Gold • Cost sharing, land lease, concession 2. 7th and • 3 incorporated entrance portals into 1993 Metro Red & Blue Urban Flower office tower (City of Los Angeles) • Land lease 3. Hollywood / • 1st phase: 60 affordable-housing 2000; under Metro Red Suburban Western units; 2nd phase: 70 affordable- construction (City of Los Angeles) housing units; 10,000 sq. ft. of retail; child-care ctr. • Land lease 4. Hollywood / • 640,000 sq. ft.; 75 shops and 2001 Metro Red Urban Highland restaurants, Kodak Theater, Chinese (City of Los Angeles) Theater, and a hotel are integrated with the MTA-owned properties • Land lease 5. Willow Street • 528,000 sq. ft. mixed use with 2002 Metro Blue Suburban 132,000 sq. ft. of retail, 700-car (City of Long Beach) transit parking structure • Land lease; developer funded the MTA parking facility; which is amortized annually by the rent credit

bus signal priority, simple route layouts, The absence of TOD so far is likely due less frequent stops than typical bus to several factors. One, while BRT is service, and level boarding and alighting. generally more effective at attracting BRT components generally improve riders than local bus services, BRT services in terms of travel time, wait ridership is still relatively low compared time, reliability, and comfort. In the with rail transit (i.e., 15,000 versus case of Los Angeles’s Metro Rapid, 110,000 passengers per day, on average). ridership jumped by 27% along the Thus, BRT stops are not as attractive to BRT-served corridor within 1 year developers since they do not provide the of its 2000 opening. Given such same passenger throughput as rail transit performance, it seems reasonable to stations. Second, BRT lines, almost by assume that BRT carries the potential definition, do not require the same high to stimulate TOD. levels of capital investment as rail transit facilities do. Most Los Angeles BRT Currently there are four BRT routes in lines are little more than local bus lines the Los Angeles Basin (see Map 19.5). with fewer stops, aided by signal The east-west Metro Rapid routes, prioritization. The lack of major capital Whittier/Wilshire and Ventura, opened investments for these “barebones” BRT in 2000; the north-south Vermont and projects makes them less attractive to South Broadway routes began service in developers.24 Lacking passenger loading late 2002. Nevertheless, except for platforms and dedicated busways or bus intermodal stations with the Metro Red lanes, these lines have few amenities Line, no TOD projects have broken that provide long-term insurance of ground or are in the planning stages. permanent investment to investors or

432 Pasadena’s Transit-Oriented Redevelopment

Pasadena’s Del Mar Station with Joint Development Project Under Construction

While other cities struggle over how to get the TOD ball rolling, Pasadena is one of those rare and intriguing examples of a place where TOD and joint development projects just seem to happen on their own. And Pasadena has only just recently begun to receive rail service from the just completed Gold LRT Line. Pasadena’s successes over the past 10 years have come about in large part through a combination of excellent planning and a favorable local real-estate market. Excellence in planning has taken the form of an inclusive and participatory public planning process that has developed a general plan and a series of specific plans that have laid the foundation for TOD. While the local real-estate market might seem to be out of the control of local policymakers, it has, nonetheless, been nurtured and enhanced by a commitment to preserving historic structures that help to create a sense of place in the city. With the introduction of Gold Line service, Pasadena has capitalized on the development potential around the system’s new stations to encourage mixed-use development that fits the character and needs of the city.

Pasadena’s market has not always been favorably disposed to TOD. During the 1960s and 1970s, the city was in decline, and its downtown was particularly hard hit. Like many cities, Pasadena formed a redevelopment agency and gave it wide latitude to “remake” the downtown along the lines of suburban shopping malls— large subsidized commercial projects with ample parking. Eminent Domain and TIF were used by the redevelopment agency for several projects, including a large downtown mall called the Plaza Pasadena. According to Mayor Bogaard,the current mayor, the public reaction to this project was one of revulsion. This project, in particular, galvanized citizen opposition to the redevelopment agency and led to its dissolution in 1981. What took its place was a new agency that is directly controlled by the city and its commissions; one that does not use eminent domain or TIF tools. Instead, the city focuses on protecting the historic buildings and

Text Box 19.4 Pasadena’s Transit-Oriented Redevelopment

engaging the public in a planning process that sets the stage for responsible infill development. Opposition to the old redevelopment agency also gave impetus to the development of a new city general plan that was in many ways a model of citizen participation. This general plan set the stage for the infill and TOD development that followed in the 1990s and continues apace today. From this process, three community goals were codified in the 1994 general plan: (1) protect existing single-family neighborhoods, (2) make Pasadena pedestrian friendly, and (3) get more residential development in commercial areas of the city. With this mandate for building pedestrian- and transit-friendly infill projects downtown, Pasadena was able to add roughly 1,000 new dwelling units in the 1990s in a city that many would consider to be already built out. Mayor Bogaard expects that around 4,000 will be added by 2010, 95% of which should be multiple dwelling units in commercial settings. According to the mayor, the Gold Line will serve as a spine for targeting future housing and mixed-use development in the city.

Text Box 19.4 (Continued) developers. Finally, there is a lack of joint development staff is currently vacant, developable land around most pursuing possibilities for a retail joint of the bus stops of the Ventura and development project next to the planned Whittier/Wilshire Metro Rapid BRT Sepulveda Boulevard Metro Rapid routes. In fact, these routes were Station, where the MTA owns 15 acres. originally selected to connect already A nearby retail mall is scheduled to be existing high-density areas so as to upgraded, and a number of retail support transit ridership. establishments are under construction. The MTA has been approached by Things could be much different. The shortcomings cited in the previous paragraph are particularly prevalent along the San Fernando Valley line. This line is an exclusive busway that will run for 14 miles, served by 13 stops between the North Hollywood Red Line station and the Warner Center (a massive employment and retail center in Woodland Hills). The BRT line is projected to cost $300 million when it is complete in 2005. These substantial capital investments, coupled with the Photo 19.6. Affordable Housing with significant travel time savings conferred Entrance to the Metro Red Line by this project, may help spark TOD Incorporated into the Site, Hollywood/ activities in coming years. The MTA Western Station.

434 Map 19.5. Four Metro Rapid Lines in Los Angeles.

several nearby property owners who used in the San Diego region. In contrast have expressed interest in building retail to the national survey findings, the most facilities on MTA properties. effective tool, expedited entitlement review, was also the most frequently San Diego’s TOD Tools used tool in San Diego (63% of TOD projects). The second most frequently Because of the healthy level of TOD used tool—applied at half of the activities in the San Diego region over surveyed TOD projects—was relaxed the past few decades, there is an parking standards; however, according established track record regarding to the national survey of local planners which tools have been most effective in involved with TOD, this tool was not leveraging development around transit. perceived as very effective. Zoning Public agency liaisons and managers for incentives/density bonuses were each of San Diego’s TOD projects were used at about one-third of San Diego’s asked to list the tools used for each TODs. Other frequently used tools that project. Responses were compiled and were also highly rated include capital compared to the effectiveness ranking funding, assistance with land assembly, of TOD tools from the nationwide survey and TIF. reported in Chapter 4 (based on responses from local government officials). Impacts of TOD

Figure 19.2 shows the nationwide ratings To date, little concerted effort has been of TOD tools (black boxes) and how made to measure the impacts of TOD in frequently (white bars) each tool was Southern California. This section reports

435 Percentage of TODs Using Tools in San Diego County Mean Effectiveness Rating (Nationwide LPO)

100% 6.0 7 90% 5.4 5.4 5.4 5.1 6 80% 4.8 4.8 4.5 4.6 4.6 70% 5 3.7 3.8 3.8 60% 4 50% 40% 3 30% 2 (1:Low; 7: High) 20% 1 10% 0% 0 Mean Effectiveness Rating Percentage of TOD Projects

Capital Funding Planning Funding

Use of Eminent Domain Tax Increment Financing Relaxed Parking StandardsBelow-Market-RateTax-Exempt Housing Bond Financing Expedited Entitlement Review Open Market Acquisition of Land Assistance with Land Assembly Zoning Incentives / Density Bonuses Donation or Underwriting of Land Costs

Exclusion from Concurrency or LOS Standards TOD Tools Figure 19.2. Mean Rating of Tool’s Effectiveness for Promoting TOD (Nationwide Local Planning Organizations [LPOs]) Versus Frequency of Tools Adopted in San Diego.

on San Diego planners’ perceptions of the improving housing choices and impacts of San Diego’s TOD projects. neighborhood quality. However, they City staff from San Diego and La Mesa, are not viewed as effective at relieving with firsthand experience with TOD traffic congestion. While TODs might projects in their respective communities, reduce regional traffic congestion over were asked to rate the impacts of TOD on the long run, based on San Diego’s various outcomes using a 1-to-7 Likert experience, this is countered by scale. While these results are based on the increased “spot congestion” on roads responses of just six individuals and on feeding into TODs in the near term. the experiences drawn from 10 projects, they are thought to be reflective of TOD’s Monetary Benefits of Joint general impacts to date in fairly built-up Development in Los Angeles portions of San Diego County. The land and concessions leases of the Figure 19.3 shows the perceived impacts Los Angeles County MTA properties in of TODs in the San Diego region. joint development deals have brought TODs in the San Diego region are significant monetary benefits to the perceived as quite successful “overall,” agency. At Union Station, developers with a mean rating of 5.6 out of 7. TODs pay $850,000 annually to MTA for are perceived as most successful at leases of parking and concessions. At

436 San Diego Region City of San Diego City of La Mesa

5.6 Overall 5.1 6.7

Increasing Housing 6.7 Choices 6.7

5.5 Improving 5.1 Neighborhood Quality 6.3

Increasing Political 4.3 4.2 Support For Transit 4.5 TOD Outcomes

Increasing Transit 4.0 4.7 Ridership 2.0

1.3 Relieving Traffic 2.0 Congestion 1.0

01234567 Mean Ratings (1 = miminal; 4 = moderate; 7 = significant) Figure 19.3. Local Planners’ Perceptions of TOD Impacts.

Willow Street Station, joint development that draws on land-value increases brings MTA $515,000 in rent credits produced, in part, by transit’s presence. annually. Since the developer funded the MTA parking facility to amortize the Conclusions and Suggestions loan, the rent credit is discounted to $51,000 until the loan is paid. Population and employment growth, traffic congestion, and changing Benefit assessment has long been used as demographics are expected to increase a tool to help pay for rail investments in the demand for high-density, mixed- the city of Los Angeles (see Text Box use projects in Southern California. 19.5). Nine percent of the capital bonds Transit stations are natural habitats to for the first segment of the Red Line direct these projects to. To date, local ($130 million in total), generated to pay governments and transit agencies in for capital improvements, were obtained Southern California have been fairly from property owners near rail stations. proactive in making sure this is the While technically benefit assessments case, and all signs indicate that this are not “joint development” because pro-TOD stance will continue in they involve no voluntary agreements years to come. The policies, plans, between private developers and public and funding sources to promote TOD entities, benefit assessments nonetheless in Southern California are particularly have been a welcome form of financing important since the current supplies

437 MTA’s Benefit-Assessment Program

The ability to conceive, plan, and implement innovative TOD-supportive programs is a key theme found in public agencies that have been successful at encouraging TOD in their jurisdictions. Over the past decade, the Los Angeles County Metropolitan Transportation Authority (MTA) has been a leader in this area with its benefit- assessment program. In 1985, the MTA’s predecessor—the Southern California Rapid Transit District—implemented a benefit-assessment program to help fund its rail construction program. Benefit-assessment funds were used to pay off bonds for station construction for the first section of the Red Line system in downtown Los Angeles. While this funding mechanism was not implemented with the intention of encouraging TOD projects, the program was instrumental in the region’s efforts to win federal rail construction funds for the first section of the Red Line and has thereby played a significant role in creating a supportive environment for TOD in the region. However, according to the current project manager for the MTA, David Sikes, the utility of benefit-assessment programs is limited. Since 1985, benefit-assessment revenues have totaled $130 million for the MTA, paying around 9% of total construction costs for the first segment of the rail line. Mr. Sikes says that the program was much more valuable as a catalyst to rally support from the local business community for the rail construction program. During the early and middle 1980s, transit spending by the federal government was severely restricted. Los Angeles was able to secure funding from the federal government for the Red Line by showing a high degree of public and business-community support for the project. The Los Angeles Central City Association, a business advocacy group, led the fight to build the Red Line and institute the benefit-assessment plan, and roughly 90% of downtown property owners favored the benefit-assessment district when it was instituted in 1985. The willingness of the local business community to tax themselves with the benefit-assessment district was a critical political asset in the Red Line funding efforts—one that proved to the federal government and local congressional representatives that investments in the Red Line would pay off for them politically. In the words of Mr. Sikes, the benefit- assessment deal “put the project at the front of the funding line.”

Text Box 19.5 MTA’s Benefit Assessment Program

However, when federal funds began to flow again for rail construction projects, the political imperative for benefit assessment programs disappeared. Based strictly on a financial analysis, MTA feels that benefit assessment districts do not generate enough revenues to justify expansion of the program—particularly in less dense areas outside of downtown Los Angeles, where fewer businesses mean lower revenues. This is particularly true now that rail systems have been built in downtown and other dense areas of the city. In these areas, without a well-organized partner like the Central City Association, MTA found winning the support of local businesses more difficult. In planning the Blue Line, which runs from downtown Los Angeles to downtown Long Beach, MTA analyzed the potential revenues from implementing a benefit assessment system along the proposed route and found that such a district would only be justified in the dense areas of downtown Long Beach. The city of Long Beach balked at the idea of having its station areas taxed at a higher rate than other station areas along the line. With the Green Line, which runs to the Los Angeles International Airport, analysts found that the airport area was the only financially viable area in which to institute a benefit assessment district. Unfortunately, at the time, the aircraft industry was the only major employer in the area, and it did not support the plan. When planning work began on the recently completed Pasadena Gold Line, MTA analyzed whether a benefit assessment program would make sense to help fund construction. MTA found that to generate enough funds to make it worthwhile, the tax burden would be so onerous for local businesses that it would risk turning the business community into a political obstacle to the project.

While benefit assessment districts have been useful tools for rallying political and funding support for the Red Line project, MTA’s experience suggests that their utility is limited to areas with dense employment or for use as a political rallying point to encourage transit construction champions.

Metrorail Red Line Stations. MTA officials placed a strong emphasis on art, architecture, and interior design when conceptualizing the underground Red Line stations. Creating bright and airy spaces that are comfortable for waiting passengers adds considerable cost to subway construction, thus benefit assessment funds provide much-valued supplemental income to the transit agency. Photo credit: E. Haas.

Text Box 19.5 (Continued) of developable land within city Transportation, Policy, Planning, and Major boundaries are running out. Projects, Station Area Planning—Transit- Oriented Development Case Studies, see http://www.cityofseattle.net/transportation/ To date, Southern California has been a ppmp_sap_todstudies.htm; M. Boarnet and leader on the TOD front in many respects. R. Crane, Travel by Design: The Influence of The city of San Diego helped pioneer Urban Form on Travel (New York: Oxford TOD zoning. Redevelopment law has University Press, 2001); California been aggressively used to underwrite land Department of Transportation, Statewide Transit-Oriented Development Study: Factors developments in depressed inner-city for Success in California (Sacramento, station areas. Innovative housing- September, 2002), see http://www.dot.ca.gov/ transportation programs are today hq/MassTrans/doc_pdf/TOD/Divided/ allowing families to purchase homes at TOD%20Study%20Final%20Report%20- favorable rates, with minimal down %20cover%20and%20TOC.%2002.pdf). payments, near MetroLink stations. 2 D. Myers and E. Gearin, “Current Benefit-assessment financing has been Preferences and Future Demand for Denser introduced in Los Angeles, constituting Residential Environments,” Housing Policy Debate, Vol. 12, No. 4 (2001) 633–659. See one of the United States’s few examples http://www.fanniemaefoundation.org/ of transit-related value capture. Creative programs/hpd/pdf/HPD_1204_myers.pdf. financing among multiple parties has 3 Lend Lease Real Estate Investments and given rise to successful bus-based TODs PricewaterhouseCoopers, LLP, Emerging like the City Heights Urban Village in Trends in Real Estate 2003 (2002), 38. See central San Diego. http://www.lendlease.com.au/llweb/llc/ main.nsf/images/pdf_2003emergingtrends.pdf/ Many observers hope that this culture of $file/pdf_2003emergingtrends.pdf. creative policy making will continue as 4 T. Lomax and D. Schrank, Urban Mobility the region moves forward with new light- Report (College Station, Texas: Texas rail extensions like the Gold Line and Transportation Institute, 2000). See http://mobility.tamu.edu/ums/appendix_a/ BRT initiatives. Still, automobile-oriented exhibit_a-19.pdf. development is firmly entrenched and 5 will not easily be altered. Nonetheless, a In September 2002, Governor Gray Davis signed into law a bill that transformed the confluence of market forces, shifting regional planning body (SANDAG) into a demographics, and proactive public regional transportation agency, incorporating policies offers encouraging prospects for the functions of the region’s two major transit a future wherein more and more Southern entities: MTDB and NCTD. Californians will have a choice to live, 6 See http://www.sandag.org/programs/ work, and shop in more transit-supportive transportation/comprehensive_transportation environments. _projects/2030rtp/2030_final_rtp.pdf. 7 Ibid. 8 City of San Diego, Final Draft Strategic Notes Framework Element—City of San Diego General Plan (June 2002). See http:// 1 M. Bernick and R. Cervero, Transit Villages in www.sandag.org/uploads/publicationid/ the 21st Century (San Francisco: McGraw- publicationid_834_1725.pdf. Hill, 1997); N. Bragado, “Transit Joint 9 Ibid. Development in San Diego: Policies and Practices,” Transportation Research Record 10 J. Faucett, “Appendix B,” Livable 1669 (1999), 22–29; Seattle Department of Communities Handbook: Land Use

440 and Design Strategies for the South Bay 18 See http://www.tripadvisor.com/ Cities (July 2000). See http://www. Attraction_Review-g60750-d156306- southbaycities.org/Committees/Livable/ Reviews-Hazard_Center-San_Diego_ appb.pdf. California.html. 11 The identified livable communities 19 See http://www.sdccd.net/public/events/ principles are local-serving activity centers, we/Online/Spring2001/sp01WE-5.html. complementary mix of uses, reduced 20 Martinez + Cutri Corporation, “Urban Design automobile dependency, multiple Project—City Heights Urban Village” transportation modes, pedestrian friendly, (San Diego: 2001). See http://www. adaptive reuse and infill development, public mc-architects.com/port_detail.asp? places, and human-scaled places. See ProjCategory=urban. http://www.scag.ca.gov/livable/lctoolbox.htm. 21 See http://www.sannet.gov/redevelopment- 12 Los Angeles County MTA, “Joint agency/majorproj.shtml. Development Policies and Procedures” 22 (May 2002). See http://www.mta.net/ See http://www.pricecharities.com/ trans_planning/CPD/joint_development/ CHI_overview.shtml. images/policies_procedures.pdf. 23 See http://www.mta.net/trans_planning/ CPD/joint_development/images/ 13 See http://www.americancityvista.com/ program_update.pdf. articles/News_and_Press_Releases/ Press_Releases/PR070901.htm 24 Los Angeles County MTA is scheduled to open a 14.4-mile BRT line in 2005: 14 See http://www.leginfo.ca.gov/pub/bill/asm/ the San Fernando Valley Metro Rapid ab_0501-0550/ab_531_bill_20030218_ Transitway. This BRT service will operate introduced.pdf. on a dedicated lane between Chandler and 15 Sources include the following: interviews with Burbank, using the former Southern Miriam Kirshner of MTDB, N. Bragado of the Pacific Railroad right-of-way. city of San Diego, and R. Hurst and R. Keightley of the city of La Mesa; Metropolitan Transit Photo Credits Development Board, “Transit-Oriented Development in San Diego” (May 2001); 19.1 Y. Tsai Seattle Department of Transportation, op. cit.; 19.2 Y. Tsai M. Bernick and R. Cervero, 1997, op. cit.; 19.3 Y. Tsai California Department of Transportation, op. 19.4 Y. Tsai cit; Bragado, 1999, op. cit.; and Boarnet and 19.5 See http://www.mc- Crane, 2001, op. cit. architects.com/ConstructionPhotos.asp?ID=12 16 Ibid. 19.6 Los Angeles County MTA Metrorail Red Line 17 See http://www.sandiego-online.com/issues/ september95/mv.shtml.

441 PART 5

LESSONS AND CONCLUSIONS

Combining insights and findings from the previous chapters, Chapter 20 summarizes the key policy lessons from the research. A matrix is also provided that identifies case studies that underscore each of the lessons. The concluding chapter reflects on the broader policy implications of the research and offers suggestions for future research on TODs. Chapter 20

Research Findings and Policy Lessons

Current TOD Practices Ballston. Several large-scale joint development projects slated for TOD has gained and continues to gain construction, notably at the White Flint a steady foothold in much of urban and New Carrollton Metrorail stations, are America. Surveys conducted for this expected to become the nation’s largest research revealed that well over and, from the transit agency’s perspective, 100 TODs of various shapes and sizes most financially remunerative joint currently exist across the United States. development undertakings. Most are in large rail-served cities. For bus-only places with a population under Among large rail-served cities, one a half million, TOD is more of a concept noteworthy trend is the conversion of than a reality. While TODs are generally park-and-ride lots to mixed-use, infill nodal in nature, some settings, like development. Almost 20% of the Los Angeles, Arlington County, and surveyed transit properties indicated that Minneapolis, are pursuing TOD on a parking lots are in the process of being corridor or district scale or even as part transformed into TODs, in many cases of a regional strategy as in Portland. consisting of moderately dense housing. Parking-lot conversions have been In the United States, transit joint encouraged by the Federal Transit development, viewed in this study as Administration’s new and more project-scale TOD on a transit agency’s permissive joint development rulings, as (or other public entity’s) property, is well as the rising value of agency-owned almost totally limited to rail transit land. One-to-one replacement parking systems. More than 110 joint policies, however, continue to limit development projects, ranging from air- parking-lot infill initiatives to urban rights developments to station connection settings where rents and land prices are fees, currently exist. The most common sufficiently high to cover the cost of form of transit joint development is multi-level garages, which can run as ground leases of agency land for high as $30,000 per space. commercial office development, followed by air-rights leases, operations and From a public-sector perspective, finding construction cost sharing, and station funds to pay for TOD planning and connection fees. The Washington (D.C.) implementation is often an uphill battle. Metropolitan Area is, by far, the nation’s Rarely, if ever, are general funds from leader in transit joint development. The cash-strapped local governments or region presently has some 30 joint transit agencies available for such development projects, including such purposes. Federal transportation pass- notable air-rights developments (and through monies, administered by MPOs, revenue generators) as Bethesda and are finding their way to TOD planning

445 and support in some areas, such as with densities in the vicinity of stations. In the Livable Communities Initiatives and some areas of the country, such as Housing Incentive Program in the San Montgomery County, Maryland, density Francisco Bay Area. Communities such bonuses are provided in return for as Sacramento, Seattle, and Portland are developers providing below-market-rate using federal funding from their New housing. Such inclusionary zoning Starts grants to pay for strategic TOD enables localities to promote the twin and planning. Besides intergovernmental often reinforcing objectives of increased transfers, individual investor funds and ridership and affordable-housing grants from private foundations have production. Through its Blueprint Denver been used most frequently for TOD plan, the city of Denver has created a planning and implementation. new transit mixed-use zoning category (TMU-30) that allows FARs of 5 to 1. America’s best TOD examples start with Since density-induced ridership gains a vision and proceed to plan execution reduce the need for parking, the city also through aggressive and inclusive station- slashed parking mandates for properties area planning, backed by supportive near light-rail stops by 25%. Studies, as zoning, infrastructure enhancements, and well as market performance, show that fiscal policies that reward smart-growth urban design treatments like mixing up investments. Often, zoning overlays are building façades and providing generous introduced to allow mixed-use projects landscaping and streetscape to be built, and those projects complying enhancements can soften people’s with specific station-area plans are perceptions of density, making the promptly issued necessary permits and mid- to high-rise building profiles that allowed to build as-of-right. The are often necessary to support intensive principles at play are fairly simple: transit services more tolerable. reward “good development” through measures like streamlining review and TOD’s Multitude of Stakeholders providing density bonuses and give developers who comply with the TOD A wide range of views, attitudes, and visions and plans as much certainty, opinions were expressed by the clarity, and built-in assurance as stakeholder groups surveyed and possible. Among the transit agencies interviewed for this study, underscoring surveyed for this study, nearly half the diverse and at times complex indicated some kind of regional vision, landscape that shapes the practice of policy, or plan was in place that TOD and joint development in the United embraced TOD principles, and 42% States. Each stakeholder group has its indicated that specific TOD plans and/or own motivations, “agendas,” and zoning existed within their regions. outlooks, not all of which are consistent or compatible. Still, the many Among all of the built-environment commonalities expressed by multiple factors that influence transit ridership, interests outnumber the differences that density in and around transit stations is exist. The researchers were struck by the the most important. More and more large areas of agreement among many U.S. cities understand this and have stakeholders involved with TOD. These proceeded to ramp up permissible areas included a belief that transit and

446 land use can and should be better Without question, different political integrated; a general dissatisfaction with agendas form barriers, big and small, to automobile-dependent patterns of growth successful TOD and joint development and the problems they create; a view that implementation. There is a general public-private partnerships in the transit consensus that, among the antidotes, arena is inherently a win-win proposition; institutional building and strengthening and a wide acceptance of the idea that, if within and (more importantly) between done well, TOD and joint development organizations is essential in overcoming yield numerous benefits, with ridership barriers. Many stakeholder groups gains and profits (to both the private and contacted for this research emphasized public sectors) topping the list. the importance of memorandums of understanding, intergovernmental The differences among stakeholder agreements, task-oriented working groups and institutions that are most groups, and informal as well as formal evident have to do with contrasting goals partnerships in building institutional and motivations. Among public entities, bridges. Most stakeholders believe that transit operators’ goals and the goals of before working with others, governments all others are different. Transit properties must first get their houses in order, are primarily drawn to TOD and joint dealing with issues like conflicting development for financial reasons— goals, “turf” and boundary problems, mainly to obtain much-needed income competition for shrinking budgets, and from farebox revenue gains and direct even petty institutional jealousies. The lease payments. Other public entities see inability of transit agencies and local the benefits of TOD in broader terms governments to reach an agreement on (e.g., curbing sprawl, spurring appropriate land uses around rail stops redevelopment, expanding housing or proper parking standards is one choices, and creating jobs). Private example of how conflicts can derail entities are most interested in TOD projects. The insistence of local profit-taking. It is important to keep in governments on following lengthy mind that not all interests were entitlement and permitting procedures represented in this report. Citizen groups and ignoring developers’ and their and politicians often have their own lenders’ need to get a product into the agendas, as highlighted by some of the marketplace as quickly as possible, is case studies in Part 4. The plurality of another. Once more “harmonious” interests surrounding TOD is not interagency relationships are built, necessarily a liability and can be public partners can shift their focus to turned into an asset. On the one hand, reaching out to the larger public: conflicting interests and an unwillingness neighborhood groups, developer to resolve differences, if not promptly associations, or environmental groups. dealt with, can bring TOD projects to a A large number of survey respondents grinding halt. On the other hand, stressed the importance of outreach, diversity means stakeholders bring education, and inclusive dialogue in unique talents, insights, and capabilities getting views and opinions on the table, to the table, which can make the heading off confrontations, mediating difference in whether or not a complex disputes, building some degree of project moves forward. consensus, and moving forward.

447 Besides having differing objectives, initiatives that expedite the review stakeholder groups sometimes differed process, clarify the “rules of the game,” in their views on what could best be and minimize uncertainties are of done to promote TOD. For the public paramount importance in building entity, the obvious answer is more TODs. money for planning and construction. Where this money will come from, Reaching a consensus on how to share however, was rarely mentioned either in the risks and rewards of TOD remains open-ended responses or via other the supreme challenge of building correspondence. For the most part, there effective and enduring public-private was a general sentiment that providing partnerships. Getting the “math” right is funding is the responsibility of higher especially challenging in marginal and levels of government, starting in transitional inner-city neighborhoods. Washington, D.C. Yet most local entities As long as developers can make good acknowledge that the benefits of TOD money, with lower risk, building on accrue mainly to cities and regions. This greenfields in the automobile-friendly contradiction—the common view that suburbs, and as importantly, as long as funding should come from higher commercial banks believe this is the government levels despite the fact that case, a considerable share of the risks TOD is quintessentially a local affair, for TOD will invariably rest with the with local beneficiaries—has undoubtedly public sector. Of course, this is less the impeded the ability of some stakeholders case in buoyant and healthy real-estate to forge a political consensus on TOD markets and more the case in funding and support. Nevertheless, languishing urban districts. As long as flexible funds administered by states and the public sector can equally and fairly MPOs have become an important source participate in the downstream rewards of of TOD funding in some parts of the TOD partnerships, government country, most notably Maryland, Illinois, underwriting of near-term risks can New Jersey, Oregon, and California. make a lot of sense. In the world of TOD, this mainly takes place through Perhaps the most striking difference in redevelopment law, although not all views on what governments can do to states allow localities to set up best promote TOD is found between “privileged” districts and employ TIF. developers and public-sector interests. Survey respondents from transit Points of Agreement and Disagreement agencies, local governments, MPOs, and state DOTs were generally of the mind This section summarizes similarities and that fiscal strategies mattered most and differences in views and opinions among that procedural initiatives are fairly stakeholders across topics reviewed in inconsequential to the development this report, elaborating on some of the community. As an example, most of points raised above. Emphasis is given these stakeholders judged the to identifying differences that potentially streamlining of entitlements and the stand in the way of implementing TOD permitting process to be of marginal in the United States and might therefore importance. Yet, for many of the become the focus in conflict resolution developers that were interviewed, and mediation.

448 TOD as Mixed-Use Development positioned among public actors to bring TOD to fruition. Transit agencies, many Stakeholder groups have adopted fairly agree, can most effectively encourage similar definitions as to what constitutes TOD by mounting and delivering first-rate a TOD. Most definitions are wrapped rail and bus services. Moreover, transit around smart-growth principles, which agencies can be effective advocates of call for mixed-use developments with TOD. Of course, also vital to the bottom- high-quality walking environments that up planning/implementation process is the support transit riding. Mixed use, private sector, specifically developers and however, is a bone of contention. Private lenders. Views on the desirability of interests plead with TOD planners to public-private partnerships for creating frame mixed-use development in terms TODs were not always the same. Local of market realities. Developers and governments generally prefer a joint lenders alike view vertical mixing as a sharing of risks and rewards through risky endeavor and prefer that land-use equity partnership arrangements. Most mixing occur horizontally (i.e., mixing developers would prefer that the public uses across properties within a transit- sector attend to matters of preparing a served neighborhood). However, local specific plan for station areas backed by planners often deal with projects on a supportive zoning and infrastructure. case-by-case basis through the issuance Some developers stated that public-sector of building permits, zoning amendments, staff members, however well intentioned, or environmental impact assessments. lack the business acumen and There is a tendency to push the mixed- entrepreneurial drive to create successful use template on each and every project, TODs. Lenders generally concurred with regardless of market realities or whether this view. Several lenders stated that TOD a developer has mixed-use experience. partnerships add complexity and blur lines What might be more effective is a of responsibilities. monitoring program that tracks cumulative trends in land-use changes, All sides agree that higher levels of thereby allowing projects to be staged government, like MPOs, state DOTs, and and prioritized on the basis of how they federal agencies, should focus on contribute to mixed-use targets. A providing a supportive financial, master developer approach to station- legislative, and institutional environment area development might also allow more that promotes TOD. Local governments, horizontal mixing while also ensuring redevelopment agencies, and transit that components are phased in line operators, predictably, call for more with market trends. planning grants and capital from higher levels of government to fund TODs. Perceived Roles Perhaps as predictably, higher levels of government view their roles in much There was general agreement among more modest terms, mainly seeing those interviewed and surveyed that TOD themselves as helping with coordination is chiefly a “bottom-up” undertaking. and providing outreach and technical Local governments and, given their often support. Many MPOs view themselves as stronger purse-string and regulatory clearinghouses and information brokers; powers, redevelopment agencies, are best although there are a few exceptions

449 (e.g., Portland Metro, SANDAG, and the development have received little national Met Council in Minneapolis-St. Paul have legislative attention. proactively supported TOD, including through the use of purse strings). Some Goals MPOs have little choice but to take a fairly passive stance on TOD because of Given the differences in how they statutory limits. While MPOs often have perceive their roles, it is not surprising embraced smart-growth principles, few that the goals of stakeholder groups have sought to prepare regional land-use regarding TOD tend to vary. Transit plans that orchestrate the evolution of agencies view TOD and joint TOD across municipal boundaries. For development mainly from a fiscal most state DOTs, TOD is even further perspective (i.e., how much income it down the priority list. Four states— can produce, both in terms of lease California, New Jersey, Oregon, and revenues and higher farebox returns). Maryland—had passed legislation or Among local entities, views differed provided funding through state agencies somewhat between municipalities and explicitly to promote TOD as of 2004. redevelopment agencies. Municipal The lack of a significant funding planners hold fairly high hopes that commitment to these programs has TODs can redress many citywide and reduced their effectiveness in California regional problems like sprawl, traffic and New Jersey. Maryland’s DOT stands congestion, and affordable-housing out for its commitment to promoting and shortages. Staff members from funding TOD planning and construction. redevelopment agencies generally believe that TOD is most effective at The federal government is in the best dealing with neighborhood-scale issues position of all to prod local interests to like enhancing pedestrian environments, carefully coordinate TOD activities using revitalizing decaying districts, and incentives and penalties. This might be increasing transit ridership. These done, for example, by elevating the contrasting views stem, no doubt, importance of corridor-level, cross- from differences in institutional jurisdictional planning in assessing responsibilities and geographic points proposals under FTA’s New Starts of reference between the two groups. Program. Surveys of transit agencies suggested, however, that New Starts Private-sector interests tend to align with criteria have not changed land-use those of transit agencies regarding the planning practice very much, at most goals of TOD. Many see TOD as a raising the profile of TOD among potential boon to ridership and politicians and community groups. Some contributor to congestion relief. Some, observers feel the federal government however, see TOD as an opportunity to should explicitly embrace TOD in expand the palette of housing and national legislation. While past legislation lifestyle choices available to consumers. like the Intermodal Surface Transportation Efficiency Act and the Transportation Outreach and Education Equity Act for the 21st Century spoke to the need for consistent transportation and Public-sector representatives universally land-use planning, so far TOD and joint agree that outreach and education—such

450 as marketing, neighborhood meetings, government respondents felt that the design charrettes, and interactive web kitbag of tools available to redevelopment sites—are vitally important in advancing agencies was more potent than their own the cause of TOD. Most large transit policy levers at enticing private capital to properties and cities that were surveyed station areas. engage in some level of TOD outreach. Developers generally like non- Private-sector interests sometimes had a interventionist, market-based approaches more cynical view on outreach. Some to promoting TOD such as LEMs, equated it with red tape. A number of flexible parking standards, and enhanced developers felt scarce public resources public transit services. Many look would best go to improving transit favorably upon efforts to expedite the services, providing supportive public entitlement and building-review process. infrastructure, and financing station-area On this, local planners and developers land-use and zoning plans. Enough TOD agree; however, as noted, relatively few developers have been blindsided by of the surveyed localities fast-track NIMBY resistance, however, that many building permits for projects near transit now support a more open and proactive stations. Several other incongruities approach to public engagement. exist. Density bonuses and overlays are popular tools in and around transit Implementation Tools stations, but they generally receive low marks for their effectiveness. Outside of To date, the chief tools employed by local a few robust real-estate markets like governments to promote TOD have been Manhattan, Northern Virginia, and the station-area planning, the initiation of San Francisco Bay Area, densities under zoning incentives (e.g., density bonuses), existing zoning codes are widely viewed and the relaxation of parking standards. as sufficient to support market demand. Surprisingly, however, these tools were Also, a tool used by the redevelopment rated as weak to moderate by respondents agencies that were surveyed for this from transit agencies, local governments, study—relaxed parking standards— and redevelopment authorities in terms of received the lowest effectiveness rating their effectiveness in promoting TOD. by most stakeholder groups. Some Rated most effective by local government observers feel more energy should be respondents, but used sparingly, are devoted to upgrading the quality of the streamlining of the development process pedestrian environment and transit and assistance with land assembly. services than to inhibiting automobile Transit agencies generally felt that tools access and restricting parking. that provide direct financial benefits, like capital funding and tax-exempt bonds, Impediments were best suited for leveraging TOD. Among respondents from redevelopment All of those surveyed were asked to agencies, tools that are commonly used identify factors that stood as by their organizations such as TIF, impediments to TOD. Transit agencies assistance with land assembly, and tax- rated automobile-dependent sprawl at exempt bond financing received the the top of the list, followed by three highest effectiveness ratings. Even local “lacks”: lack of local expertise, lack of

451 market demand, and (related to both) fiscal pressures and the political lack of developer interest. Local philosophies of transit board members government respondents felt similarly, have sometimes created a culture within but they disagreed about the lack of local transit agencies and regional planning expertise. In addition to questionable entities that approaches land market demand, local planners felt that development in general and TOD, community opposition stood in the way more specifically, with caution of TOD. Despite the controversy and even skepticism. surrounding park-and-ride facilities, relatively few transit agencies or local Private-Sector Views and Opinions planners felt that they had much impact on the ability to form successful TODs. It deserves to be mentioned once more that the views and opinions of the Local governments wrestle with the private sector did not always align with traffic problems associated with any new those of the public sector. Given that development that substantially increases TODs are principally the outcomes of densities, including TODs. If traffic many parcel-level private investment conditions deteriorate quickly, the TOD decisions, finding ways to bridge concept can quickly become tainted. differences is vital to future TOD Local elected officials, accountable to implementation in the United States. their constituents, do not always have the patience to wait until the longer-term Many developers view transit positively, benefits of TOD reveal themselves. but rarely, if ever, consider it a decisive Some local planners distinguish between factor in the decision to move ahead “good” and “bad” traffic congestion with projects. The ability to attract (as with “good” and “bad” cholesterol). equity finance (e.g., pension funds and Added traffic, they reason, is a by- REIT investments) is governed by product of an active, rejuvenated fundamentals, not a project’s status as a community. This logic does not always TOD. Also, lenders do not fund concepts resonate with those who must devote like TOD. They might fund developers more time each day to driving in and out with proven track records, but they never of their neighborhood because of mid- fund a planning principle. One lender rise development around rail stops. suggested dropping the TOD label altogether and casting this genre as In many parts of the country, authorizing mixed-use projects that have the added legislation restricts how far transit bonus of being near a transit stop. What agencies can go in pursuing TOD. In matters is the combination of mixed use some instances, statutory law outright and accessible transit, not the notion of prohibits transit agencies from engaging government-planned TOD. in any form of real-estate transaction that is not directly related to the acquisition Among the actions that local of properties for facility construction. governments could take to spur private Similarly, regional planning organizations investment around transit stops, the typically have little or no control over presence of supportive land-use local land-use and zoning decisions. designations was rated the highest Such regulatory constraints coupled with among developers. Once zoning is set,

452 developers want the ability to build as- Lenders also hold the views and of-right, providing a buffer against opinions of real-estate appraisers in high changing political whims. Many regard when making lending decisions. developers also feel that public For the most part, appraisers weigh the infrastructure, such as under-grounding standard features of comparables like of utilities and expansion of sewerage building square footage and on-site capacity, is also crucial in leveraging amenities in arriving at an estimated TOD. Some developers go a step further property value. Few think about or and suggest public financing of seriously consider benefits that might be structured parking as an essential piece associated with proximity to transit. of TOD infrastructure. Another common Getting appraisers to consider transit’s plea was to reduce regulations and added value could elevate the standing bureaucratic hurdles. Most developers of TOD in the minds of some lenders. said they can make money in the TOD marketplace as long as they can avoid Benefits of TOD excessive red tape and minimize uncertainties. What often bothers them Relatively little empirical research has most is when governments “change the been conducted documenting the rules of the game” at the last moment. economic benefits of TOD beyond Some developers would also like public studies showing that development near authorities, notably transit agencies and rail stations boosts ridership and redevelopment agencies, to help with increases land values. These outcomes land assemblage. A lack of developable reflect the accessibility benefits conferred parcels was cited as one of the major by tying land development to transit obstacles to TOD, particularly parcels investments. A host of other benefits that of sufficient size to attract large derive from increased ridership and land development firms with “deep pockets.” values, such as congestion relief and more sales- and property-tax income, Private lenders were generally favorably have been assigned to TOD. However, disposed to the idea of joint development, there is little data available other than at least as much as they were to TOD. anecdotes by which to gauge these Transit joint development, however, impacts, and some impacts (such as can be problematic where there are higher tax income and, in general, unsubordinated ground leases, and economic development) are actually multiple parties carry financial risks and redistributive in nature—economic responsibilities. To the degree that joint resources that go from the pocketbooks development produces social benefits of one party to those of another. like increased ridership and improved air quality, lenders generally believe that One unavoidable outcome of limited subordinated loans that protect the empirical research on TOD’s benefits financial interests of private groups over has been to shift the debate to the realm the interests of the public sector are of ideology. Different groups have appropriate. Joint ventures, some lenders turned to different studies to reach believe, complicate projects, blur credit totally opposite conclusions about the risks, and require too much time to benefits, or lack thereof, of TOD. This coordinate activities. has happened even in the case of one

453 transit station, perhaps most notably the and Jefferson Davis corridors led to Portland area’s Orenco Station. As significant gains in Metrorail boardings discussed in Chapter 7, pro-transit and alightings. Models revealed that observers note that 22% of Orenco’s every 100,000 square feet of additional commuters regularly take transit while office and retail floor space over the critics contend that 75% of Orenco’s 1985-to-2002 period added around residents always drive and just one in 50 station daily boardings and alightings. six commuters take transit more than Moreover, housing construction twice a week. Different spins cast interacted with transit service levels TOD in totally different lights. to give ridership a further boost.

Past research shows that people living Some skeptics contend that U.S. cities near transit in large rail-served are already so built-out and existing metropolitan areas tend to ride transit land-use patterns are so entrenched that five to six times as often as their TOD can only exert a modest impact on counterparts who live further away from urban landscapes and travel behavior in transit. Mixed land uses and pedestrian the larger scheme of things. Evidence on improvements can bump up these market residential self-selection in TOD shares even more. Recent research neighborhoods being matched by suggests that self-selection (i.e., people exceptionally higher transit-usage rates choosing to live near transit for lifestyle suggests that impacts could be more reasons like avoiding having to drive to substantial if and when TOD reaches a work and acting upon these preferences critical mass along any given corridor. by taking transit) accounts for as much Impacts of TOD no doubt vary by time as 40% of the ridership bonus associated and circumstances. The biggest ridership with transit-oriented housing. and land-value benefits accrue in areas enjoying a boom economy matched by Original research conducted for this study jam-packed highways. The market for points to the potential ridership payoff of infill housing near major transit stops TOD under favorable conditions such as drives up rents and land prices when those in the San Francisco Bay Area and traffic woes worsen. Arlington County, Virginia, two areas that have been among the nation’s highest In small cities and towns with minimal economic performers and that have traffic congestion, it is probably the case experienced significant traffic congestion that TOD can bring about the most problems. Census data for the Bay Area dramatic changes when created on revealed that transit-commute modal greenfields or the exurban fringes. shares increase with density, land-use Therefore, some observers contend that diversity, and walking-friendly designs exurban communities should not attempt around rail stations. For example, every to create TODs but rather to be “transit 10 additional dwelling units per gross ready,” that is, able to support good- acre was associated with a 3.7% increase quality transit if and when the market in transit’s commute modal share. In allows it. The idea is not to preclude Arlington County, increases in the square TOD from happening, similar to interim footage of office-retail development along zoning. Transit-supportive design seven stations of the Rosslyn-Ballston guidelines are one way to ensure that

454 new suburbs and far-flung exurbs are (suburban Denver) owe a lot to the poised to accommodate TOD if and dedication and savvy of one or more when the market brings it their way. leaders willing to put their careers and political futures on the line for Recurring Themes and Lessons TOD. Sometimes leadership comes from the state level, as was the case This section draws lessons on with Boston’s Liberty Tree Building contemporary TOD practice in the and New Jersey’s Transit Village United States on the basis of the body Initiative. Leadership, however, need of materials presented in this report, not always lie within the public including insights gained from the case domain. In the case of Dallas’s studies. While lessons cannot always be Mockingbird Station, the developer, easily transferred from one location to Kenneth Hughes, provided much of another and certainly are not intended to the inspiration and motivation that be carbon-copied, different “bits and made the project a success, and he pieces” will likely have relevance in has since ignited efforts to emulate most places. The lessons are organized the Mockingbird experience in other by the following five categories: political parts of the region, such as Plano and and institutional factors, planning and Richardson. land-use strategies, benefits and impacts, fiscal considerations and partnerships, • Inclusiveness and ongoing public and design challenges. input in TOD planning, design, and implementation is essential to Political and Institutional Factors success. Outreach not only helps to fend off a possible NIMBY backlash, • Political leadership is vital to TOD but it also gives those who live and implementation. Having someone work in a TOD neighborhood a step up as the political champion of a vested stake in ensuring that what is TOD proposal is critical to built is consonant with neighborhood marshalling resources, building a goals, has a human-scale “feel,” and coalition, and resolving disputes that is of the highest caliber possible. Of invariably crop up along the way. course, market pressures might While it is not necessary that there be prompt developers to increase the a single point person for shepherding density envelope beyond what local a project along, someone in a residents prefer. Neighborhood position of power must be prepared meetings, workshops, charrettes, and to embrace TOD as part of his or her other venues offer the best hope of political platform, investing time and working out differences and finding energy and sometimes “cashing in an acceptable compromise. political chips” to usher projects forward. Of course, happenstance • Institutional coordination and and serendipity have a lot to do with streamlining are especially crucial whether political leadership arises or to TOD implementation where not. Regardless, mixed-use TODs multiple agencies govern different like the Fruitvale Transit Village in elements of land development and Oakland and the project in Arvada transit-service delivery. Red tape,

455 institutional bickering, and multiple have proactively pursued TOD and levels of review are sometimes joint development. Political enough to frighten away the hardiest leadership in advancing TOD must of developers from station locations. often begin at the state capitol. Places like metropolitan Baltimore, Philadelphia, San Francisco- Planning and Land-Use Strategies Oakland, and Denver have formed interagency working groups and • Successful TODs start with shared committees to streamline TOD visions that guide planning and review and coordinate decision implementation for years to come. making. In metropolitan Miami, the To say that visions are important consolidation of decision making might be stating the obvious and no within the county facilitated TOD doubt sounds cliché. However, the implementation by allowing enterprise of creating a TOD over an developers to bypass multiple layers extended period of time is subject to of bureaucracy and public process. so many distractions and interruptions that the ability to “keep the eyes on • More permissive regulatory the ball” is pivotal to success. Of environments and enabling course, defining “the ball” is the first legislation are often needed if transit step in the process. Some areas, like agencies, local governments, and Arlington County, Virginia, have regional planning organizations are adopted the Scandinavian practice of to proactively implement TOD. The employing a metaphor to articulate absence of authorizing legislation or the TOD vision. In Arlington simple avoidance of the issue of how County’s case, the metaphor was a far transit agencies can go in “bull’s eye.” Many local observers pursuing land development has often attribute Arlington County’s success muddied the issue of whether TOD is at adding over 15 million square feet a legitimate public-sector of office space, 18,000 housing units, undertaking. Without clearly and several thousand hotel rooms to articulated legislation that enables the bull’s eyes of the Rosslyn- transit agencies and other local actors Ballston corridor since 1970 to this to assemble and bank land and enter early vision and the subsequent into joint development arrangements, General Plan and specific station-area TOD either gets ignored or ends up plans that embellished how the vision on the back-burner, lost in the could be effected. pressing day-to-day needs of running a transit organization. Where state • Start TOD planning early. TODs are governments have taken a leadership often the cumulative products of role, passing permissive authorizing many individual development legislation (such as in California in decisions, some of which unfold the case of the Los Angeles County slowly and in fits and starts. Areas MTA and through trilateral with successful TOD track records agreements that formed the like Portland, Arlington County, and Washington Metropolitan Area Montgomery County (Maryland) Transit Authority), transit agencies have been at it a long time. There

456 must be enough lead time to allow channeled into delivering good- plans to be prepared, partnerships to quality transit services; ensuring the be built, funding to be secured, and presence of safe and attractive improvements to be programmed. pedestrian connections to stations; Experiences show that developers are and expanding local infrastructure often willing to build projects before (including road, sewage, and water transit stations even open, as long as trunk-line capacities) to they are confident that a strong accommodate new development. planning commitment exists to not only deliver first-rate transit services • Successful TODs emphasize “place- but also improve a neighborhood, making”: creating attractive, strengthen institutional relationships, memorable, human-scale environs and supply supportive infrastructure. with an accent on quality-of-life and civic spaces. Increasingly, projects • TOD success can hinge on built around up-and-coming transit rewarding developers with measures nodes, like Dallas’s Mockingbird that grant more latitude in designing Station, Portland’s Pearl District, and projects; allow mixing of uses; metropolitan Chicago’s Arlington increase density envelopes; and Heights, are targeted at individuals, offer certainty, clarity, and built-in households, and businesses seeking assurances that the public sector locations that are vibrant and will follow through on planning interesting, usually with an commitments. Because of the risks assortment of restaurants, sometimes encountered in building entertainment venues, art shops, near transit stations, especially infill cultural offerings, public plazas, and and redevelopment projects, and civic spaces. What all of these places because of the public good conferred have in common is high-quality by TOD, “business as usual” should walking environments with a not apply to TOD developers. Zoning minimal on-site automobile presence. must often be revised to allow It is often the case that settings that higher-than-average densities and a can accommodate a dense land-use program and mix that satisfy concentration of shops, eateries, and market demands. In cities like pedestrians without automobile Seattle, Portland, San Diego, and dominance are near transit stations. Atlanta, zoning overlays have been Yet, creating walking-friendly successfully used to increase environs at transit stations can pose permissible densities, prevent special challenges because of the automobile-oriented uses from difficulties of accommodating not preempting TOD possibilities, and only walk-on traffic but also feeder diversify uses. Developers make it buses, drop-off passengers, park-and- abundantly clear that they want and ride, and other interface functions— expect specific station-area plans that what has been called the “conflict of define the parameters under which place and node.” TODs that have they must operate. In addition to designed good, safe circulation advanced strategic planning, systems and minimized conflict developers also want public resources points, such as the Bethesda Station

457 in Maryland, and the Orenco Station housing projects than is the norm, in Hillsboro, Oregon, have managed trip generation estimates that inform to largely resolve the conflicting impact assessments (that in turn goals of stations as both “places and inform impact-fee levies) need to be nodes.” Traffic-calmed, walking- adjusted accordingly. Santa Clara friendly environs near popular transit County and Los Angeles (California), stops have a cachet in the Gresham, Oregon, and Washington development community. The ability D.C. have introduced sliding-scale to moderate the presence of impact fees to promote TODs. These automobiles while attending to the are places that understand that smart complex access, circulation, and growth requires smart calculus. parking needs of multiple nodes can make the difference between a • Station-area plans and planning successful and unsuccessful TOD. matter. Given the risks and uncertainties associated with TOD, • TODs invite bold new policies that developers, residents, and merchants push conventional boundaries and expect, and indeed deserve, carefully acknowledge the unique market crafted, forward-looking plans that niches that are being served. orchestrate how, when, and where a Initiatives like LEMs, unbundled TOD will evolve. Good TODs begin parking costs, flexed parking with good textbook planning standards, and sliding-scale impact practice. Arlington County’s success fees are good examples of “out of at creating two viable transit-oriented the box” thinking. Standard designs, corridors owes much to a General cost pro forma, and building-code Plan backed by station-area plans that templates need to be challenged for mapped future land uses, specified each and every TOD project in large overlay zones, attended to circulation part because the TOD market is not needs, identified networks of open “standard.” Experiences show that space and pedestrian ways, and new housing built near rail stops defined needed changes to building often appeals to singles, professionals, and parking codes. Similarly, TOD childless couples, and empty-nesters successes in Portland are largely a who value amenities as much as the product of the region having worked amount of living space and who hard for the past several decades at often own fewer automobiles and tying station-area development to rail log fewer miles on their odometers transit investments, applying the nuts than the typical urban household. and bolts of good planning practice. Standards for mortgage qualifications, In the San Francisco Bay Area, sub- building designs, and parking regional and regional planning supplies need to reflect these market organizations have seeded station- realities. Unbundling the provision area planning through grants of parking from a dwelling unit can (Transportation for Livable save residents living near transit tens Communities and Housing Incentive of thousands of dollars. Given that Programs) that channel federal and fewer automobiles come in and out state transportation funds to local of the driveways of transit-based governments. Some cities, like

458 San Diego, have been particularly compact, mixed-use development forward-looking in their planning and around transit nodes is to attract siting of rail extensions, opting to significant enough numbers of avoid railroad corridors where motorists to transit so as to reduce development opportunities are traffic congestion and impart restricted in favor of settings with environmental benefits, areas need to stronger market conditions, despite be experiencing rapid growth, and the higher costs incurred. TODs traffic conditions need to be bad and stand the best chance for success getting worse. Since TODs increase when land-use planning precedes, or accessibility among those living, at least parallels, transit development working, and shopping near transit, rather than being an afterthought. an extensive transit network is also Experiences in Arlington County, often necessary for the benefits of Portland, and San Diego make TOD to materialize. The absence of this clear. measurable societal benefits, however, in no way suggests that Benefits and Impacts TOD projects should not move forward. As long as market demands • TOD’s ridership bonuses are are being satisfied, there is private substantially a product of residential benefit (between producers and self-selection, suggesting policy consumers) in building transit- reforms should focus on allowing oriented housing, offices, and retail residents to sort themselves into shops. Diversifying America’s transit-served neighborhoods suburban landscapes and providing unimpeded. Research continues to greater housing and lifestyle choices demonstrate that self-selection is a can be important benefits of TOD major factor behind higher transit even if there is little evidence of ridership among those living near congestion relief or local job rail stations. It follows that public creation. policy should focus on breaking down barriers to residential mobility • Transit’s benefits, as reflected by and on introducing market- land-value premiums, also generally responsive zoning in and around increase with proactive planning, transit stations. Policies like flexible network development, and system parking standards, decoupled maturation. External factors like housing and parking pricing, and regional economic and traffic location-adjusted mortgages could conditions do not solely govern the help in this regard. potential benefits of TOD. Case experiences from Dallas, Santa Clara • TOD benefits are not automatic and County, and San Diego show that generally accrue during upswings land-value premiums tend to increase in local economies when traffic as a system’s network expands and congestion worsens. Favorable are generally higher in areas with conditions must exist for TOD to stronger real-estate markets, as well produce significant economic as in areas where far-sighted, benefits. Experiences show that if proactive planning has taken place.

459 Fiscal Considerations and Partnerships and of value to the table. A private developer might offer years of • TODs benefit from recapturing some experience and business savvy. of the value conferred by transit Private interests also offer a wide investments to generate revenues array of potential funding sources needed for ancillary improvements. such as equity capital, conventional Recapturing some of the land-value debt, REIT funds, and venture-capital premium conferred by transit loans. Redevelopment agencies also investments provides much-needed offer something unique. Most are revenues that can go to seed various empowered to condemn, acquire, and station-area improvements like assemble parcels and to fund such landscaping, pedestrian-way ancillary improvements as sidewalk upgrades, and public spaces. While upgrades and utility relocations. recapturing value is difficult in Local governments are often in a practice, Los Angeles managed to position to offer revenue bonds at cover nearly a tenth of the cost of the favorable rates, use tax-exempt fiscal first phase of the Red Line subway instruments, and secure loan through special assessments levied on guarantees backed by the federal benefiting parcels. Entrepreneurial government. A transit agency might transit agencies, like Washington be in a position to contribute critical D.C.’s WMATA, have over the years parcels through land swaps or the recaptured value through aggressive provision of easements. In built-up joint development activities, settings with small lots under including land leases and station multiple owners, no one party can interface programs. WMATA pegs create TOD on its own. Only through lease revenues to the values of a partnership that offers each party surrounding properties, thus ensuring some return on investment can a that it benefits from land appreciation TOD project hope to gain firm after a lease with a developer has financial footing. Experiences with been invoked. risky mixed-use investments in marginal urban districts like Barrio • Creative financing is essential to Logan in San Diego, Overtown in spreading the risks, expanding the Miami, and El Cerrito del Norte in base of knowledge and experience, the San Francisco Bay Area and tapping into the fiscal underscore the importance of advantages of certain partners, such creative multilateral financing. as local governments’ superior bond ratings and guarantees, to make • Market fundamentals, not a TOD projects pencil out. Partnerships are label, govern whether private capital pivotal to successful TODs. In gets invested around transit stations. redevelopment districts that suffer The availability of equity and loans from a poor marketing and to fund projects near transit is performance image, multiple partners primarily driven by capital market are often necessary to raise sufficient conditions and perceived market capital to spread financial risks. Each demand, not a project’s status as a partner can bring something unique TOD. Lenders involved with TOD

460 projects (not all of whom even realize take the form of siting parking more they are funding a “TOD”) rarely peripherally to a station or away adjust lending standards to reflect from a community and toward an proximity to transit. Sometimes this active highway corridor. Chicago’s translates into an unwillingness to Metra minimized the impact of fund projects that propose parking parking by using a number of small supplies that are below the norm. lots sited away from the station as While market fundamentals rule the opposed to a single large lot. Where roost, developers believe that certain land prices are high enough, attributes of TOD can help, at the structured parking can replace margin, with securing loans and surface lots, thereby freeing up land making projects pencil out, including for infill development, pedestrian good-quality transit services, ways, and civic spaces. Where streetscape and ancillary public affordable housing is being built near improvements, and local political stops, reduced parking quotas or at support. least flexible standards should be considered to reflect the tendency of Design Challenges many TOD households to own fewer automobiles. Unbundling the cost of • In urban settings, rationalizing parking from the cost of a dwelling parking policies in relation to TOD can make transit-based residency all is essential to influencing how a the more affordable. Furthermore, to TOD station will be accessed and to the degree that there is interest in avoiding conflicts over whether land paring back parking supplies, transit goes to parking or development. If agencies can respond by expanding not properly dealt with, parking can feeder bus services, and localities form a huge obstacle to TOD: can pitch in by upgrading pathways separating a station from the and bike routes that connect to a neighboring community, diminishing station. Parking need not always be the quality of the walking viewed as a liability; for mixed-use environment, and precluding station- TODs, shared-parking possibilities site air rights or joint development. can economize on costs and land The issue of parking can provoke consumption. If not addressed early visceral reactions, often pitting in the process, parking can be a TOD constituencies against each other. deal-breaker, but, if it is handled Conventionally, the interests of smartly, such as through shared- professional-class suburbanites parking schemes, it can be a deal- who park-and-ride conflict with maker. There is no easy formula for neighborhood residents who abhor coping with the conflicts of parking the idea of outsiders descending and TOD. What is important is for upon their neighborhood to park local authorities to get out in front of their automobiles during daylight the problem, find an appropriate and hours. Transit boards need to workable strategy, and build enough rationalize parking policies beyond flexibility into the process to change a carte blanche one-to-one course if and when circumstances replacement mandate. This might warrant it. Parking policies cannot be

461 an afterthought; they must be • Walking access and quality of carefully considered and weighed in circulation and the overall keeping with the overall goals set for pedestrian environment are critical TOD and tempered by the financial to successful TODs; however, the realities that transit agencies face. conflict between stations as “nodes” and “places” often makes this • Even though mixed land uses are a difficult. Research shows the trademark of TOD, arriving at a majority of residents living within 1 workable program poses planning ⁄4 mile of a transit station arrive by and design challenges that need to foot or bicycle; however, this share be overcome for a successful TOD. plummets markedly if there are Quite often, finding the right formula significant physical barriers as well as for mixed land uses is every bit as symbolic and psychological barriers difficult as rationalizing parking like wide, busy roads and incomplete policies. Planners sometimes impose sidewalk networks. Where the a design template of ground-floor majority of a station’s catchment is retail and upper-level housing or beyond an easy walk or bus trip, offices (i.e., vertical mixing) on any “functional” priorities are apt to give and all development proposals within greater design preference to the needs a TOD. Mixed-use projects are of park-and-riders than walk-and- trickier to design, finance, and riders or bus-and-riders. San Diego’s sometimes lease than single-use Mission Valley; San Mateo County, ones. Ground-floor retail is doomed California; and suburban Denver are to fail unless it opens onto a street good examples of places where (with with busy foot traffic and convenient the help of smart-growth planning automobile access. Ground-floor monies and pedestrian-sensitive restaurants might be unappealing to zoning ordinances) design attention upper-level residences seeking quiet was given and resources directed to and privacy in the evening. There are improving the quality of circulation, few developers who specialize in aesthetics, and basic provisions mixed-use projects and even fewer (e.g., crosswalks and benches) of financiers who understand them. areas surrounding rail stations. Local governments need to be sensitive to such challenges and • Transit service improvements and focus on achieving a desired land- system upgrades can trigger TOD use mix within a transit station area activities, especially in settings with as opposed to doing so in individual expensive housing markets and a parcels (i.e., horizontal mixing). pent-up demand for transit-oriented Sensitivity to retail design can also living. “Choice” transit users are enable big-box retail to coexist with highly sensitive to service quality; more pedestrian-oriented uses in a thus, running frequent and reliable TOD, as shown with the CityCenter trains and minimizing the need to project in Englewood, Colorado, and transfer can be critical to the future the Rio Vista West “semi-TOD” of TOD. In northeast New Jersey, the along San Diego’s Mission Valley extension of NJ TRANSIT’s Trolley line. Northeast Corridor to New York

462 Penn Station unleashed a flurry of estate is red hot. Outside the city proper, building activities around century- however, TOD has failed to materialize, old commuter-rail stations. The partly a consequence of inadequate elimination of a transfer offered attention to NIMBY opposition. Three those living near stations areas where TODs have sprouted in considerable travel-time savings, suburban settings are northeast New prompting many with jobs in Jersey, metropolitan Chicago, and the Manhattan to seek out rail-served Dallas metroplex. Northeast New residences. Station enhancements Jersey’s TOD market is sizzling thanks also matter. In the suburbs of to major rail improvements that have Chicago, new or refurbished Metra dramatically shaved the amount of time stations jump-started private real- it takes to rail commute into Manhattan. estate investments. And it is not Its experiences remind us that the quality always rail services that catapult of transit services is often of paramount TOD forward. In Boulder, Colorado, importance. Swift and direct rail the integrated CTN—known for its connections to major urban centers that colorful “Hop, Skip, Jump, Leap, provide travel-time savings over the and Bound” buses—triggered bus- automobile are a sure-fire way of based TOD (typically second- and triggering TODs. Metropolitan third-floor offices and lofts above Chicago’s suburban TOD successes owe street-level retail) along several much to local political leadership and routes. careful station-area planning. In greater Dallas, TOD leadership has come mainly Lessons Through Case Studies from the private sector, spawning compact, mixed-use development near The 10 case studies presented in this light-rail stops in places like Plano and report amplify many of the lessons Richardson, development that only a discussed in this chapter. As a whole, decade or so ago would have been their lessons are instructive. unimaginable. Metropolitan Denver has similarly witnessed suburban TOD Metropolitan Washington D.C. is a true because of community activism and an success story in part because shaping land urban renaissance in and around major use was a goal of the original transit transit corridors. investment. Signature TODs abound in the District of Columbia, surrounding Portland is the most extreme case of cities, and increasingly in outlying pushing the TOD envelope in the United suburbs, a result of rebounding markets States, courtesy of regional visioning for in-town housing and commercial and planning, extensive interagency space, unfettered market forces, and agreements, regulatory controls, and interventionist public actions. Metrorail’s incentives that encourage densities that ambitious joint development program exceed those that would be achieved adds riders to trains and revenues to public through normal market forces. Portland coffers, serving as a model for the nation. is the best example of TOD planning and implementation at a regional scale in the Boston is a recent urban TOD success in United States, and like Boston and large part because its central-city real Denver, it has entered a new phase that

463 focuses on constructing central-city infill light-rail stations. TOD has failed to take projects close to rail corridors. hold to the same degree in Los Angeles County, although mixed-use joint The San Francisco Bay Area has over development projects, such as the project the years sought to adopt Portland’s at the Hollywood-Highland subway regional approach. The Bay Area is station, and a continuing commitment to widely recognized as a leader in build and expand BRT services are promoting good planning and encouraging trends. transportation concepts; however, implementing TOD among a diverse In an effort to summarize and group of local governments and special consolidate the lessons reviewed in this interests has been an uphill struggle. chapter, Table 20.1 was prepared. The New partnerships that have given rise to matrix identifies case-study settings that projects like the Fruitvale Transit illustrate each of the key lessons. Some Village could signal a breakthrough. lessons, like “TOD as place-making,” are found in all 10 case studies. Most Despite a consolidated government lessons, however, are best highlighted by structure that has centralized planning a few case studies. and transit functions, Miami-Dade County has struggled in its pursuit of To learn more about a particular lesson, TOD. As a rail-served Sunbelt region the interested reader might want to collared by water and the Everglades, and review the relevant case-study chapters given its standing as the gateway to Latin in more detail. Of course, not all case America, Miami-Dade County would experiences with TOD in the United seem to be ideal for TOD. In the absence States were covered in this report; thus, of proactive public policies, however, the lessons no doubt can be found, to varying market has failed to spawn TOD, not degrees, elsewhere as well. Still, the case only in prime real-estate locations but experiences reviewed in this volume are also in communities that are most in need thought to provide some of the best, the of development. With several mixed-use most current, and the most poignant projects finally underway near the insights into both the successful and Overtown Station and Miami-Dade unsuccessful practice of TOD in the Transit seeking joint development contemporary urban United States. partners for strategic parcels near several prominent stations, prospects for future As the United States’s experiences with TOD are today looking better than ever. TOD accumulate and new insights are gained, new lessons and extensions to Despite its international reputation as an existing ones will no doubt appear. automobile-friendly megalopolis, Seeing to it that policymakers and those Southern California has made impressive in positions of influence are aware of headway on the TOD front in recent these lessons and that outcomes are times. The city of San Diego has been a carefully and critically weighed is pioneer in crafting innovative zoning essential to constructively advancing the codes, targeting supportive infrastructure practice of TOD in the United States. investments, and creating attractive The concluding chapter discusses such walking environments in and around challenges further.

464 Table 20.1. Matrix Summary of Case Studies that Highlight TOD Lesson

Political and Institutional Factors Institutional Permissive Inclusiveness Coordination & and Enabling Leadership & Public Input Streamlining Legislation Case Study Boston

New Jersey

Washington D.C.

Miami

Chicago

Dallas

Denver

Portland

San Francisco

Southern California

= lesson revealed through case experience (Table continues next page) Planning Station-Area (Table continues next page) Bold Policies Sensitive to Markets = lesson revealed through case experience

TOD as Place-Making

Planning and

Land-Use Strategies Land-Use Early Start Table 20.1. (Continued) Flexible Zoning Visions Shared Progressive,

Case Study Boston New Jersey Washington D.C. Miami Chicago Dallas Denver Portland San Francisco Southern California (Table continues next page) Proactive Planning and Network Expansion = lesson revealed through case experience

conomic E Conditions

Benefits and Impacts Table 20.1. (Continued) Zoning Self Selection &Self Selection Favorable Market-Responsive

Case Study Boston New Jersey Washington D.C. Miami Chicago Dallas Denver Portland San Francisco Southern California Table 20.1. (Continued)

Fiscal Considerations Design Challenges and Partnerships & Considerations Transit Value Creative Market-Driven Parking Lot Workable Pedestrian System Recapture Financing Lending Conversions Mixed Uses Needs Design Case Study Boston

New Jersey

Washington D.C.

Miami

Chicago

Dallas

Denver

Portland

San Francisco

Southern California

= lesson revealed through case experience Chapter 21

Policy Reflections and Future Research Directions

Policy Reflections services, they felt, would act like a magnet, attracting development by its The U.S. state of practice with TOD is mere presence. The failure of transit by generally a healthy one. There are many itself to spur growth around many station exciting examples of TOD currently on areas has prompted a 180-degree turn, the ground and at least as many on with more and more local and regional drawing boards across the United organizations today subscribing to the States. Mixed-use TODs like the one in view that governments must actively downtown Plano, Texas, and the pursue, if not spearhead, TODs. Rather CityCenter in Englewood, Colorado, than wait and react, today’s TOD would have been unimaginable in the mindset is one of getting out in front and 1980s when these and other suburban shepherding land-use changes to achieve communities were hosting a boom in a desired built-form outcome. What also campus-style office development and distinguishes contemporary TOD automobile-oriented shopping plazas. practice from past practice is its The United States is in the midst of a inclusiveness, signaled by public sea change when it comes to linking outreach, close citizen involvement in transit and urbanism. In more and planning and design decisions more settings once dominated by throughout the process, and engagement automobiles, yesterday’s design through media like neighborhood templates are being discarded in favor charrettes and workshops. While in the of TOD. Atlanta’s BellSouth TOD past transit agencies were merely is the result of taking scattered sideline participants, today they are often automobile-oriented development and leaders in planning and implementing transforming it into a concentrated TODs around rail stops, fully aware of TOD. Attention has been given to every the potential ridership and lease-revenue detail, like siting additional BellSouth payoff of these efforts. Transit agencies employee parking around other like BART, WMATA, and Metra MARTA stations to enable workers to received their fair share of criticism rail commute for part of their trip. The for slighting local citizens in the past, company’s aim is for at least 30% of its learned their lessons, and today are workforce to arrive by transit, a huge often leading the charge in changing the change from the current market share landscape around their train stations. of less than 5%. A fair amount is also occurring on In the past, planners and policymakers the national front. The Center for felt little need to encourage development Transit Oriented Development, around transit facilities—the presence of part of Reconnecting America, high-capacity, high-quality transit a nongovernmental organization,

469 recently opened. The Center proclaimed a proactive public-sector role as long as as its mission the use of barriers to free-market choices exist, negative externalities and mis-pricing in transit investments to spur a new the urban transportation sector exist, and wave of development that improves society’s ideals of social equity and housing affordability and choice, justice are not yet fully achieved. revitalizes downtowns and urban and suburban neighborhoods, and Many of the lessons outlined in the provides value capture and recapture previous chapter point to the kinds of for individuals, communities and initiatives that the public sector might transportation agencies.1 take to foster TOD. Some observers call for an even bolder public-sector stance. Rail∼volution, an increasingly popular One idea is to create a “TOD fund” to annual conference devoted to “building financially support TOD projects that livable communities with transit,” often cannot obtain conventional financing. runs conference sessions on TOD, A TOD fund administered by an offering a forum for transit professionals, intermediary could provide much-needed developers, and other interested parties money for grants, loans, guarantees, and to “trade notes,” learn what others are equity investments to seed TODs when doing, and build networks.2 conventional lenders are unwilling.4 Others have suggested extending some Also different from the past is that it is of the powers of redevelopment districts not just public policies and interventions to TODs, such as TIF and the ability to that are paving the way for TOD. acquire and assemble land, even if the Unfettered market forces are also having TODs do not lie in “blighted areas.”5 a profound impact. The less desirable Forming statewide infrastructure banks features of sprawl—automobile that give priority to transit projects linked dependence, congestion, excessive to land development might help channel amounts of time behind the wheel, and the dollar amounts necessary to leverage a feeling of isolation from cultural TOD on a grand scale. State and local offerings—are prompting more and governments are also in a position to more Americans to leave the suburban provide regulatory relief for TOD projects edge and head to transit-served subcity by exempting those that comply with nodes and even the traditional inner city. General Plans and station-area plans from The recent 2004 edition of Emerging environmental reviews and permitting Trends in Real Estate by the Urban Land requirements. Funding authorities should Institute put it like this: “Convenience also consider extending the definition of counts: walkable communities near transit capital projects to include not only mass-transit hubs ‘have caught on,’ and a transit facility, but also its armature— smart-growth projects—which emulate the many elements that connect a station traditional town centers—enjoy to its surroundings like bus staging areas; increasing success.”3 public squares; pathways and skywalks; lighting improvements; and important Markets alone, however, cannot be complementary facilities, like child-care relied upon to create the ideal TOD centers and police substations (perhaps future. There always will be the need for better marketed as “protection services”).

470 Of course, this does not guarantee that coming projects. Disseminating and capital funds will be used for such cross-pollinating knowledge offers the purposes since local funding authorities best hope of achieving future generations and transit agencies might have little of TOD and joint development projects flexibility in the expenditure of that are robust, smartly designed, and capital grants. financially viable.

Doing whatever is necessary to get the Future Research Directions economics of TOD “right” is also largely a public-sector responsibility. Unbundling Considerable progress has been made in parking from housing costs, supporting understanding TOD: what works and Location Efficient Mortgage concepts, what does not, what preconditions are and adjusting impact fee programs to necessary to effectively leverage land acknowledge the “trip de-generating” development around stations, and how impacts of TOD are things that are easily private developers react to different within the purview of public-sector regulations and incentives. Still, influence. Financial assistance to TOD knowledge gaps remain. More research projects might also be in the form of tax is needed and perhaps will always be credits, abatements, and fee waivers, needed, not only to close knowledge although these can be controversial to the gaps, but also to keep pace with the degree subsidies are involved. changing times, account for shifts in political priorities, and evaluate new As long as TOD confers both public and programs and experiments that are private benefits, there is no replacement introduced. for public-private partnerships in advancing TOD implementation. Each Weighing what we know and do not party brings unique talents, insights, and know about TOD, the following are resources to the table. Creating an in- promising avenues for future research: house capability within transit agencies to pursue partnerships, hammering out • The Benefits of TOD. Our fair and mutually rewarding risk- and understanding of the net benefits of revenue-sharing agreements, and TOD, at least in a monetary sense or building in contingencies that allow from a benefit-cost calculus, remains projects to change course as needed, fairly fuzzy. Fertile grounds for new experiences show, can produce win-win research lie in monetizing the outcomes. Successful TOD partnerships benefits on the basis of outcomes like win recognition in the marketplace and net reductions in VMT that can be deserve recognition in other forums, attributed to TOD. This has been such as national awards, “best practice” done as part of scenario forecasting web sites, and high-profile special (e.g., land-use scenarios forecast sessions at annual conferences like those with TOD versus without TOD) for sponsored by Rail∼volution and the greater Sacramento. More telling Urban Land Institute. As the joint might be an enumeration for a region development talent pool and knowledge like Portland, Oregon, which has a base expands, lessons will be learned strong tradition of TOD, where and put to good use on new and up-and- relationships between transit and

471 land use are apt to be more elastic. services needed to support TOD Still, forecasts based on anticipated would be very useful. Ideally, changes are inherently speculative. research could answer such questions In venturing out to year 2030 and as whether a bus route with beyond, no one has a better crystal 15-minute frequencies on a major ball than anyone else. Forecasts arterial connecting the CBD with a hinge on numerous assumptions suburban employment center can about conditions that powerfully justify a medium-scale TOD with net shape travel behavior, like the future residential densities of 15 units per cost of gasoline and presumed acre. To fill such knowledge gaps technological futures, which are will require a very rich database that exogenous in nature, outside the ties together information on transit sphere of local policy influence. service levels and costs, ridership elasticities, and TOD designs. While Gaining insight into the impacts of it will probably be many years before TOD on regional VMT reduction on there are enough wide-ranging the basis of grounded realities rather examples of TOD to allow such a than future simulations would be database to be constructed, now is helpful. One way to do this would be the time to start the process. to look at a region that has been at the forefront of TOD and for which good • TOD Typologies. Another promising longitudinal data are available, such line of study would involve as Portland, Oregon, or Montgomery developing typologies of TODs as County, Maryland. An ex post they unfold and take shape. For evaluation could be conducted by example, TODs might be classified comparing current recorded VMT according to size of metropolitan levels in the region with what would area, location within a region (e.g., have been expected had TOD CBD, urban, mature suburb, new projects like Orenco Station and the suburb, and exurban), and type of Pearl District not been implemented transit service (e.g., heavy rail, light (i.e., the “actual” versus “counter- rail, commuter rail, and BRT). With factual”). Assuming a full social cost such a typology in place, the ability to per vehicle mile of travel (ideally examine differences in institutional partitioned by time of day) would arrangements, ridership impacts, allow the VMT-related benefits of economic benefits, and approaches to TOD to be imputed. External social community participation across the costs of automobile use in the United groupings would be strengthened. States have been pegged at between There have not been enough TODs on 18 and 37 cents per mile (in 1998 the ground for a sufficient length of currency); thus, VMT reductions time to begin to build such a typology attributable to TODs could be today (i.e., most “cells of the matrix” applied to such figures to impute would probably be empty). However, an economic benefit.6 given the rapid growth in TOD in some parts of the country, in 10 years’ Over time, research that sheds light time, or there about, there will on minimum thresholds of transit probably be enough examples in a

472 variety of settings to allow such a TOD, especially as it increases in typology to be constructed. numbers and scope; however, research must be sensitive to the fact Developing typologies should not be that land-use changes and urban- confused with restricting and design features are relative in nature, narrowing the definition of TOD. As both within and between metropolitan of late, a number of commentators areas of the country. have issued calls for greater clarity and a more tightly bound definition of • TOD Evaluations. Evaluation also what constitutes a bona fide TOD has a role in the future TOD research (e.g., the TOD versus TAD debate). agenda. As innovative initiatives like While such an undertaking might LEMs, below-code parking policies, have value, it is doubtful that it could and BRT investments are introduced, be successfully pulled off, and if it there is a need to carefully evaluate could, it is not apparent that a impacts. Evaluation cannot be a watertight TOD definition would rushed or at-the-last-minute matter that much. TOD clearly covers undertaking. Rather it must be a very broad spectrum. Everything preplanned so that “before” and from the revamped multimodal transit “after” data can be compiled, clinical- center in the heart of Corpus Christi like controls can be introduced, and a to the high-rise, mixed-use corridor wealth of indicators and metrics can along the Rosslyn-Ballston Metrorail be measured to draw a full assessment axis has been labeled TOD. TOD, of of impacts. Given the growing interest course, is relative. In a small Midwest in TOD and smart-growth strategies town, having a developer build a two- in general, consideration should be story apartment building with a few given to resurrecting evaluation-based ground-floor retail shops near a major programs of the past, such as the bus stop might be considered TOD, Service and Methods Demonstration regardless of what TOD looks like (SMD) program run by FTA’s elsewhere. In a large rail-served city, predecessor organization, the Urban however, such a project might be Mass Transportation Administration, categorized as TAD if parking codes in the 1970s. This program remain unchanged, site designs place encouraged transit agencies to parking in the front, and few introduce service and pricing pedestrian amenities are provided. A strategies, some far bolder than they danger of circumscribing the TOD would be expected to introduce on concept is that projects that represent their own (like fare-free off-peak progressive change and a genuine transit services), to “test the waters” departure from “business as usual” in and identify the most promising some circumstances might not pass and productive policy reforms. the “TOD acid test.” This might Importantly, evaluation was a key mean that a community pursuing component of the SMD program, with what it believes to be TOD ends up sufficient resources provided to allow not qualifying for a smart-growth carefully designed longitudinal studies grant or special bonding rates. We to be conducted. The time seems ripe clearly need continuing research on for an SMD-like program that

473 focuses specifically on TOD, joint • Research Dissemination. Lastly, development, and other multi-lateral attention needs to be given to initiatives aimed at strengthening the “getting the word out” about TOD transit/land-use nexus. research results. Technical reports, professional journal publications, • Other Research Possibilities. A and conference presentations are number of other research areas could obvious channels. As important is yield useful policy insights in conveying research findings over coming years. Research on consumer the Internet. A national TOD web attitudes about living and working in site that showcases “best practices” TODs might be useful supplements and highlights the latest research to studies on land-market impacts. findings would be welcomed by Surveys might also track changes in many professionals and the attitudes of local officials and practitioners. citizens to TOD over time. Economic and institutional studies might be conducted that examine the costs of Notes TOD versus the costs of sprawl (integrating and extending findings 1 See http://www.reconnectingamerica.org/ from both this study and TCRP html/TOD. Report 74: Costs of Sprawl—2000). 2 See http://www.railvolution.com/. Parking remains a controversial issue 3 J. Miller, Emerging Trends in Real Estate in many TOD settings; thus, studies 2004 (Washington, D.C.: The Urban Land that evaluate the impacts of parking Institute, October 2003). reforms (like flexible parking 4 D. Belzer and G. Autler, Transit Oriented standards and below-norm parking Development: Moving from Rhetoric to codes) could also be of great value. Reality (Washington, D.C.: The Brookings Similarly, empirical evidence on the Institution Center for Urban and Metropolitan trip generation rates of TOD could Policy, 2002). help advance policies that promote 5 R. Cervero, Transit Villages in California: compact, mixed-use projects near Progress, Prospects, and Policy Reforms, transit stops, such as sliding-scale Working Paper 98-08 (Berkeley: Institute impact fees and streamlining project of Urban and Regional Development, reviews. Areas like Montgomery University of California, 1998). County in Maryland and Los 6 See J. Murphy and M. Delucchi, “A Review Angeles County and Santa Clara of the Literature on the Social Costs of Motor- County in California recommend the Vehicle Use,” Journal of Transportation and Statistics, Vol. 1, No. 1 (1998): 15–42; lowering of trip generation estimates J. MacKenzie, R. Dower, and D. Chen, The of TOD; however, empirical Going Rate: What It Really Costs to Drive evidence that might be drawn upon (Washington, D.C.: World Resource Institute, in estimating trip rates remains scant. 1992); D. Lee, Full Cost of Pricing Highways Developers who face the prospect of (Cambridge, Massachusetts: John A. Volpe paying hefty impact fees would National Transportation Systems Center, 1995); and T. Litman, Transportation Cost particularly welcome numbers that Analysis: Techniques, Estimates and reflect the ability of TODs to Implications (Victoria, British Columbia: “de-generate” vehicular traffic. Transportation Policy Institute, 1995).

474 Bibliography

Arrington, G. At Work in the Field of Cambridge Systematics, Inc., R. Cervero, Dream: Light Rail and Smart and D. Aschuer. TCRP Report 35: Growth in Portland. Portland, Economic Impact Analysis of Transit Oregon: TriMet, 1998. Investments: Guidebook for Practitioners. Washington, D.C.: Belzer, D. and G. Autler. Transit Transportation Research Board, Oriented Development: Moving from National Research Council, 1998. Rhetoric to Reality. Washington, D.C.: The Brookings Institution Cervero, R. “Light Rail Transit and Center on Urban and Metropolitan Urban Development.” Journal of the Policy, 2002. American Planning Association, Vol. 50, No. 2 (1984): 133–47. Bernick, M. and R. Cervero. Transit Villages for the 21st Century. New Cervero, R. Ridership Impacts of York: McGraw-Hill, 1997. Transit-Focused Development in California. Monograph 45. Berkeley: Boarnet, M. and R. Crane. Travel by Institute of Urban and Regional Design: The Influence of Urban Development, University of Form on Travel. New York: Oxford California, 1993. University Press, 2001. Cervero, R. Transit-Supportive Burchell, R., G. Lowenstein, W. Development in the United States: Dolphin, C. Galley, A. Downs, S. Experiences and Prospects. Seskin, K. Still, and T. Moore. TCRP Washington, D.C.: Federal Transit Report 74: Costs of Sprawl—2000. Administration, 1993. Washington, D.C.: Transportation Research Board, National Research Cervero, R. “Transit-Based Housing in Council, 2002. California: Evidence on Ridership Impacts.” Transport Policy, Vol. 3 Calthorpe, P. The Next American (1994): 174–183. Metropolis: Ecology, Community and the American Dream. Cervero, R. BART @ 20: Land Use and Princeton: Princeton Architectural Development Impacts. Monograph Press, 1994. 49. Berkeley: Institute of Urban and Regional Development, University Calthorpe, P. and W. Fulton. Regional of California, 1995. City: Planning for the End of Sprawl. Washington, D.C.: Island Cervero, R. “California’s Transit Village Press, 2001. Movement.” Journal of Public

475 Transportation. Vol. 1, No. 1 American Dream. New York: North (1996):103–130. Point Press, 2001.

Cervero, R. The Transit Metropolis: A Dunphy, R., D. Myerson, and M. Global Inquiry. Washington, D.C.: Pawlukiewicz. Ten Principles for Island Press, 1998. Successful Development Around Transit. Washington, D.C.: The Cervero, R., P. Hall, and J. Landis. Urban Land Institute, 2003. Transit Joint Development in the United States. Monograph 42. Ewing, R. Best Development Practices. Berkeley: Institute of Urban and Chicago: Planners Press, 1996. Regional Development, University of California, 1992. Harmon, R. and S. Khasnabis. TRB Special Report 183: Value Capture Cervero, R., M. Bernick, and G. Gilbert. and Joint Development: Fad or Market Opportunities and Barriers Future? Washington, D.C.: to Transit-Based Development in Transportation Research Board, California. Working Paper 621. National Research Council, 1978. Berkeley: Institute of Urban and Regional Development, University Huang, H. “The Land-Use Impacts of of California, 1994. Urban Rail Transit Systems.” Journal of Planning Literature, Cervero, R. and S. Seskin. Research Vol. 11, No. 1 (1996):17–30. Results Digest 7: An Evaluation of the Relationships Between Transit Knight, R. and L. Trygg. Land Use and Urban Form. Washington, D.C.: Impacts of Rapid Transit: Transportation Research Board, Implications of Recent Experiences. National Research Council, 1995. DOT-TPI-10-77-29. Washington, D.C.: U.S. Department of Community Design + Architecture. Transportation, 1977. Model Transit-Oriented District Overlay Zoning Ordinance. Report Landis, J., R. Cervero, and P. Hall. prepared for Valley Connections. “Transit Joint Development in the Oakland, California: 2001. USA: An Inventory and Policy Assessment.” Environment and Costello, D., R. Mendelsohn, A. Canby, Planning C, Vol. 9, No. 4 (1991): and J. Bender. The Returning City: 431–452. Historic Presentation and Transit in the Age of Civic Revival. Landis, J., S. Guathakurta, and M. Washington, D.C.: Federal Transit Zhang. Capitalization of Administration, National Trust for Transportation Investments into Historic Preservation, 2003. Single-Family Home Prices. Working Paper 619. Berkeley: Duaney, A., E. Plater-Zyberk, and J. Institute of Urban and Regional Speck. Suburban Nation: The Rise of Development, University of Sprawl and the Decline of the California, 1994.

476 Loukaitous-Sideris, A. Retrofit of Urban Parsons Brinckerhoff Quade & Corridors: Land Use Policies and Douglass, Inc., R. Cervero, Design Guidelines for Transit- Howard/Stein-Hudson Associates, Friendly Environments. Working and J. Zupan. “Regional Transit Paper 180. Berkeley: University of Corridors: The Land Use California Transportation Center, Connection.” TCRP Project H-1. 1993. Washington, D.C.: Transportation Research Board, National Research Loukaitous-Sideris, A. Transit-Oriented Council, 1995. Development in the Inner City: A Delphi Survey. Journal of Public Project for Public Spaces, Inc. TCRP Transportation, Vol. 3, No. 2 (2000): Report 22: The Role of Transit in 75–98. Creating Livable Metropolitan Communities. Washington, D.C.: Loukaitous-Sideris, A. and R. Bannerjee. Transportation Research Board, “Blue Line Blues: Why the Vision of National Research Council, 1997. Transit Village May Not Materialize Despite Impressive Growth in Pushkarev, B. and J. Zupan. Public Transit Ridership.” Journal of Urban Transit and Land-Use Policy. Design, Vol. 5, No. 2 (2000): Bloomington: Indiana University 101–125. Press, 1977.

Lund, H., R. Cervero, and R. Willson. Rabinowitz, H., E. Beimborn, C. Travel Characteristics of Transit- Mrotek, S. Yan, and P. Gugliotta. Focused Development in California. Guidelines for Transit Sensitive Oakland, California: Bay Area Rapid Suburban Land Use Design. Transit District and California Washington, D.C.: U.S. Department Department of Transportation, 2004. of Transportation, Federal Transit Administration, 1991. McNeal, A. and R. Doggett. “Metro Makes Its Mark.” Urban Land Ryan, S. “Property Values and (September 1999): 78–81, 118. Transportation Facilities: Finding the Transportation-Land Use Ohland, G. Transit-Oriented Connection.” Journal of Planning Development in Four Cities. Santa Literature, Vol. 13, No. 4 (1999): Fe, New Mexico: The Great 412–427. American Station Foundation, 2001. Untermann, R. Accommodating the Parker, T., G. Arrington, M. McKeever, Pedestrian: Adapting Towns and and J. Smith-Heimer. Statewide Neighborhoods for Walking and Transit-Oriented Development Bicycling. New York: Van Nostrand Study: Factors for Success in Reinhold, 1984. California. Sacramento: California Department of Transportation, 2002.

477 Glossary of Acronyms and Abbreviations

ABAG Association of Bay Area Governments AC Transit Alameda Contra Costa Transit District ADT average daily traffic AURA Arvada Urban Renewal Authority BART Bay Area Rapid Transit BCEC Boston Convention & Exhibition Center BG business/government BRT bus rapid transit Caltrans California Department of Transportation CATS Chicago Area Transportation Study CBD central business district C/CAG City/County Association of Governments of San Mateo County CCDC Central City Development Corporation CDC community development corporation CDMP Comprehensive Development Master Plan CDOT Colorado Department of Transportation CEO chief executive officer CITT Citizens’ Independent Transportation Trust CMA congestion management agency CMAQ Congestion Management/Air Quality CMP Congestion management plan CRA Community Redevelopment Agency CRNA Center for Regional and Neighborhood Action CSG Campaign for Sensible Growth CTA Chicago Transit Authority CTN Community Transit Network DART Dallas Area Regional Transit DMU diesel multiple unit DOT department of transportation DRCOG Denver Regional Council of Governments DRI development of regional impact du/ac dwelling units per acre DURA Denver Urban Renewal Authority EIR environmental impact report ENA Exclusive Negotiations Agreement EPA U.S. Environmental Protection Agency FAR floor-area ratio FOD ferry-oriented development FTB Franchise Tax Board FTE full-time equivalent GFA gross floor area GIS geographic information system GLUP general land use plan

479 GRTA Georgia Regional Transportation Authority HIP Housing Incentive Program HSP Hoyt Street Properties HUD U.S. Department of Housing and Urban Development IDOT Illinois Department of Transportation JPA joint powers authority LAC Lennar Affordable Communities LEM Location Efficient Mortgage LoDo Lower Downtown LOS level of service LPO local planning organization LRT light-rail transit MARTA Metropolitan Atlanta Rapid Transit Authority MAX Metropolitan Area Express MBTA Massachusetts Bay Transportation Authority MDT Miami-Dade Transit MetroLINK Rock Island County Metropolitan Mass Transit District MFI median family income MOA memorandum of agreement MPDU moderately priced dwelling unit MPO metropolitan planning organization MSA metropolitan statistical area MTA Metropolitan Transportation Authority MTC Metropolitan Transportation Commission MTDB Metropolitan Transit Development Board MTS Metropolitan Transit System MUNI Municipal Railway NCTCOG North Central Texas Council of Governments NCTD North San Diego County Transit Development Board NGO nongovernmental organization NIMBY not in my backyard NIPC Northeastern Illinois Planning Commission NJDOT New Jersey Department of Transportation NJ TRANSIT New Jersey Transit Corporation ODOT Oregon Department of Transportation OPTM Office of Public Transportation Management PATH Port Authority Trans Hudson PDC Portland Development Commission PTP People’s Transportation Plan PUD planned use development REIT Real Estate Investment Trust RFP request for proposals RFQ request for qualifications RFRHA Roaring Fork Railroad Holding Authority RFTA Roaring Fork Transportation Agency RMV Registry of Motor Vehicles

480 RPD Regional Planning Department RTA Regional Transportation Authority RTAP Regional Technical Assistance Program RTD Regional Transportation District RTP Regional Transportation Plan RTV Regional Transit Vision RTZ rapid transit zone SAHPD Special Affordable Housing Protection District SamTrans San Mateo County Transit District SANDAG San Diego Association of Governments SEPTA Southeastern Pennsylvania Transportation Authority SMD Service and Methods Demonstration STPP Surface Transportation Policy Program TAD transit-adjacent development TALC Transportation and Land Use Coalition TCSP Transportation and Community and Systems Preservation Pilot Program TDM transportation demand management TIF tax increment financing TIP Transportation Improvement Program TLC Transportation for Livable Communities TOD transit-oriented development T-REX Transportation Expansion Project TriMet Tri-County Metropolitan District of Oregon TxDOT Texas Department of Transportation UGB urban growth boundary URA urban renewal authority VMT vehicle miles traveled VTA Santa Clara Valley Transit Authority WMATA Washington Metropolitan Area Transit Authority

481 APPENDIX A

TRANSIT AGENCY SURVEY NATIONAL STUDY OF TRANSIT ORIENTED DEVELOPMENT AND JOINT DEVELOPMENT Survey of Transit Agencies

Agency / Jurisdiction: ______Person Completing Survey: Name: ______Title: ______Phone: ______Email: ______

This survey is divided into two sections: I. Transit Oriented Development (TOD) in your agency’s service area II. Transit Joint Development (TJD) in your agency’s service area

For any question that asks information that is not readily available to you, please feel free instead to provide information on individuals we can contact.

I. TRANSIT ORIENTED DEVELOPMENT (TOD) A general definition of TOD is development concentrated around and oriented to transit stations in a manner that promotes transit-riding. Rather than a single real-estate project, it represents a collection (usually mix-use) of projects at a neighborhood scale that is oriented to a transit node.

1. Definition:

Has your agency adopted its own definition of TOD? 1 YES 0 NO

If YES, what is it?______

______

______

______

______

If NO, what is your own definition? ______

______

______

______

A-3 2. Does your agency have a formal program designed to encourage TOD? 1 YES 0 NO If YES, please elaborate and provide any materials or a web address (URL): ______

______

______

______

How many staff are assigned to this activity? ______Full-time ______Part-time

If NO, does your agency encourage TOD planning and implementation in other ways?

1 YES 0 NO

If YES, please elaborate: ______

______

______

______

If applicable, who is the contact person for either your TOD program or the other TOD assistance that your agency provides?

Name and Title: ______

Phone: ______

Email Address: ______

3. If you have a formal program to encourage TOD, please list the major features of the program and indicate the approximate percentage of the program budget dedicated to each activity. (If not, please skip to Question 7.)

Activity % of Budget

A. ______

B. ______

C. ______

D. ______

E. ______

A-4 4. Indicate the annual budget of this program over the last three fiscal years, divided into the following categories. If you know only the total budget, please provide this information. (If exact numbers are not easily available, please provide estimates and denote them with an asterisk (*) to distinguish from actual figures.) Administration & Construction & Planning Budget Implementation Budget Total Budget 2002 ______2001 ______2000 ______

5. List the major sources of funding for this program, divided into the following categories. Please specify whether these sources of funding are dedicated. Sources Administration & Planning Construction & Implementation Dedicated? (check one)

A. ______1 YES 0 NO ______

B. ______1 YES 0 NO ______

C. ______1 YES 0 NO ______

D. ______1 YES 0 NO ______

E. ______1 YES 0 NO ______

A-5 6. Does this program involve outreach and education? 1 YES 0 NO

If YES, please answer the following questions.

Who is the primary intended audience for the program? (check one)

1 The public

2 Local government staff

3 Local government elected officials

4 Developers

5 Lenders

0 Other: ______

What is the primary program strategy? (check one)

1 To provide outreach and education in response to proposed TOD projects

2 To provide outreach and education on an ongoing basis

0 ______Other: ______

What is the program focus? (check one)

1 To provide technical assistance with finance

2 To provide technical assistance with planning

3 To provide technical assistance with legal issues

4 To encourage political support for TOD

0 Other:______

______

How effective has this public outreach been to date in terms of:

EFFECTIVENESS

Minimal Moderate Significant

Increasing public awareness 1234567

Increasing private sector awareness 1234567

Engaging public dialogue on TOD 1234567

Resolving conflicts / tempering 1234567 neighborhood opposition

Helping to initiate station-area projects 1234567

A-6 7. How does your transit agency address land use? Please check the statement that comes closest to describing your agency’s position.

1 Land use is not something we are concerned with

2 Our agency takes the lead

3 MPO takes the lead

4 Local governments take the lead

5 Shares responsibility with a number of players

6 Provides funds to leverage land use decisions by local jurisdictions

7 Has a formal relationship with other agencies in conducting studies

8. Does your agency have staff or consultants assigned to work on land use / TOD? 1 YES 0 NO

If YES, please indicate the percent of time / FTE devoted to land use / TOD: ______

______

______

______

______

9. Does your agency have a fixed guideway project in planning, design or construction? What comes closest to describing your situation?

Our project is in:

1 System planning

2 Alternatives analysis

3 Early stages of preliminary engineering

4 Advanced stages of preliminary engineering

5 Final design

6 In construction

A-7 10. Has the inclusion of land use as a factor in the federal new starts process changed your agency’s interest in and its capability to undertake and implement TOD planning in your community? Please check the statement that comes closest to describing your agency’s situation.

1 It had no impact on our ability to undertake and implement transit-supportive planning

2 It raised the profile of the transit / land-use connection in our agency, local governments and the community

3 It provided the impetus to take transit-supportive land-use planning to the next level

4 It led directly to changes in locally adopted land-use policies and plans for the transit corridor

5 It had a significant impact on moving transit-supportive land-use planning and implementation forward in our community

0 Other (please explain): ______

______

11. Has the presence of land use as a FTA new starts rating criterion changed how your agency approaches land use in the development of transit projects? Please check the statement that comes closest to describing your agency’s situation.

1 No, we have always treated land use as a key factor; we would do it anyway

2 Yes, it helped to provide the impetus to more seriously address land-use issues

3 Yes, it has opened the door to get the discussion going

4 No, how we address land use is a local issue; having a federal criterion has had little to no impact

12. Does your state administer a grant program to promote local planning and / or implementation for TOD?

1 YES 0 NO

If YES, has your agency received any of these grant funds? 1 YES 0 NO

If YES, for what purposes were the grants used?______

______

______

______

______

______

______

______

A-8 13. Is there a regional vision, policy, or plan in place in your community that calls for compact

development organized around transit? 1 YES 0 NO

If YES, please elaborate and indicate who is promoting this: ______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

A-9 14. Are there any collaborative arrangements in your jurisdiction explicitly devoted to promoting TOD, in terms of:

Public-sector inter-agency committees or working groups? 1 YES 0 NO

If YES, please describe: ______

______

______

______

______

______

______

______

Private-sector committees or working groups? □1 YES 0 NO

If YES, please describe: ______

______

______

______

______

______

______

______

Public-private organizations or committees? 1 YES 0 NO

If YES, please describe: ______

______

______

______

______

______

______

______

(If it is easier, please mail or e-mail us this information)

A-10 15. Partnerships:

Does your agency have cooperative agreements with any of the following public agencies to promote TOD? Check all that apply.

Redevelopment agency 1 YES 0 NO

City government 1 YES 0 NO

County government 1 YES 0 NO

Regional government 1 YES 0 NO

State government 1 YES 0 NO

Please describe the nature of these cooperative agreements. What duties and functions are shared between the partner agencies? If you have materials or copies of the agreement that would be easier to send or email us, please do so.

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

A-11 16. List major TODs in your agency’s service area (whether formally designated or not). If it is easier, please mail or e-mail us this information.

Station / Neighborhood Description (and contact information)

A. ______

______

______

______

______

B. ______

______

______

______

______

C. ______

______

______

______

______

D. ______

______

______

______

______

E. ______

______

______

______

______

(If more space is necessary, please use extra pages)

A-12 17. Indicate whether any of the following sources have been used to fund TODs in your area for pre- development (e.g., planning) and development. Check all that apply.

Pre-development Development

Pension funds

Union funds

REIT funds

Individual investor funds

Nonprofit / foundation funds

Other:______

18. Did your agency play a prominent role in developing any of these projects? If not, skip to Question 19. If so, briefly list the goals your agency has set for the projects. Once listed, please rank them in order of importance from your agency’s perspective, “1” being the most important.

Goals Rank

A. ______

______

______

B. ______

______

______

C. ______

______

______

D. ______

______

______

E. ______

______

______(If more space is necessary, please use extra pages)

A-13 19. Have any individual cities, counties, or other entities in your agency’s service area adopted a TOD plan

or introduced TOD zoning? 1 YES 0 NO

If YES, please elaborate and / or provide contact information:

Jurisdiction Description (and / or contact information)

A. ______

______

______

______

______

______

______

______

______

B. ______

______

______

______

______

______

______

______

______

C. ______

______

______

______

______

______

______

______

______

A-14 Jurisdiction Description (and / or contact information)

D. ______

______

______

______

______

______

______

______

______

E. ______

______

______

______

______

______

______

______

______

(If more space is necessary, please use extra pages)

A-15 20. What are the statutory regulations governing your agency that have aided or inhibited its ability to promote TOD? STATUTES

Number / Code Name Perceived effects on TOD activities

______

______

______

______

______

______

______

______

______

______

______

______

(If more space is necessary, please attach extra pages)

21. What are the internal regulations, policies, or mandates within your organization that affect the practice of TOD?

______

______

______

______

______

______

______

______

______

______

A-16 22. Within your service area, have any of the following tools been applied by your agency or another agency to promote TOD? If the tool has been applied in your service area, indicate its effectiveness toward promoting TOD. If the tool has not been applied in your service area, indicate what you believe would be its potential effectiveness toward promoting TOD in your service area.

EFFECTIVENESS Tools Applied? By Your Agency? Low Moderate High

Zoning Incentives / 1 YES 0 NO 1 YES 0 NO 1234567 Density Bonuses

Relaxed Parking 1 YES 0 NO 1 YES 0 NO 1234567 Standards

Expedited Entitlement 1 YES 0 NO 1 YES 0 NO 1234567 Review

Exclusion of TOD from 1 YES 0 NO 1 YES 0 NO 1234567 Concurrency or Level of Service Standards

Use of Eminent Domain 1 YES 0 NO 1 YES 0 NO 1234567 (other than right-of-way acquisitions)

Open Market Acquisitions 1 YES 0 NO 1 YES 0 NO 1234567 of Land

Donation or Underwriting 1 YES 0 NO 1 YES 0 NO 1234567 of Land Costs

Assistance with 1 YES 0 NO 1 YES 0 NO 1234567 Land Assembly

Tax Increment 1 YES 0 NO 1 YES 0 NO 1234567 Financing

Tax-Exempt Bond 1 YES 0 NO 1 YES 0 NO 1234567 Financing

Tax Abatement 1 YES 0 NO 1 YES 0 NO 1234567

Development of 1 YES 0 NO 1 YES 0 NO 1234567 Below-Market-Rate Housing

Capital Funding 1 YES 0 NO 1 YES 0 NO 1234567

Planning Funding 1 YES 0 NO 1 YES 0 NO 1234567

A-17 23. Based on your agency’s experience, how important is TOD toward:

IMPORTANCE Minimal Moderate Significant

Increasing Transit Ridership 1234567

Increasing Political Support for Transit 1234567

Relieving Traffic Congestion 1234567

Reducing Sprawl 1234567

Increasing Housing Choices 1234567

Improving Neighborhood Quality 1234567

Other (______) 1234567

24. Do any of the transit stations where TOD is being promoted along your system contain park-and-ride

spaces? 1 YES 0 NO

If YES, please answer the following questions:

(a). What is the approximate average number of spaces per station in your system? ______

(b). Does your agency have a requirement for replacement parking? 1 YES 0 NO

(c). To what degree has the presence of park-and-ride spaces been an obstacle to your agency’s ability to successfully plan and build TOD projects? Please rate on a scale of 1 to 7.

Minimally Moderately Significantly

1234567

(d). To what degree do these park-and-ride spaces detract from the pedestrian environment around the stations where TOD projects are being proposed, built or planned? Please rate on a scale of 1 to 7.

Minimally Moderately Significantly

1234567

(e). Are there any plans to convert park-and-ride lots to TODs? 1 YES 0 NO

If YES, where? ______

______

______

A-18 25. To what degree has each of the following been an impediment to TOD in your service area?

DEGREE Minimal Moderate Major

Lack of Market Demand 1234567

Community Opposition 1234567

Local Zoning Restrictions 1234567

Lack of Lender / Investor Interest 1234567 and Support

Lack of Developer Interest 1234567

Skepticism Among Local Governments 1234567

Lack of Political Support 1234567

Inadequate Transit Service 1234567

Location of Transit Stations 1234567

Predominance of Auto-Oriented 1234567 Land Uses

Lack of Local Expertise in TOD 1234567 Planning or Implementation

Transit Agency Requirements for 1234567 Replacement Parking

Lack of Collaboration Between 1234567 Participating Governmental Agencies

Legal Issues (specify:______1234567 ______)

Other (______) 1234567

A-19 26. How important are these initiatives introduced by higher levels of government (regional, state or federal) toward promoting TOD in your agency’s service area?

IMPORTANCE Minimal Moderate Significant

Planning Grants 1234567

Development of Regional Impacts 1234567 (DRI) Requirements

Tying Transit Capital Grants to Local 1234567 TOD Commitments

Smart Growth Legislation 1234567

Targeted Infrastructure Funding 1234567

Adequate Public Facility Ordinances / 1234567 Concurrency Req.

Required Siting of Government 1234567 Buildings Near Transit

Other (______) 1234567

27. Have any of the following initiatives involving TOD taken place in your agency’s service area in the past two years?

Conference or workshop open to the general public 1 YES 0 NO

Conference or workshop aimed at professionals 1 YES 0 NO

Public hearing on TOD project 1 YES 0 NO

Design charrette 1 YES 0 NO

Media coverage (e.g., special TV show) 1 YES 0 NO

Internet web site 1 YES 0 NO

Other (______) 1 YES 0 NO

Please elaborate on any of these (such as the sponsor): ______

______

______

______

______

A-20 28. Redevelopment:

(a). Are there any redevelopment districts in your agency’s service area? 1 YES 0 NO

(b). If YES, how many have been formed that include one or more transit stations? ______

29. List up to three things you feel transit agencies in the United States could do to best promote TOD.

A. ______

______

______

B. ______

______

______

C. ______

______

______

30. Please share any other ideas you have on improving the practice of transit oriented development in the United States.

______

______

______

______

______

______

______

______

______

______

______

______

______

______

A-21 II. TRANSIT JOINT DEVELOPMENT (TJD)

Transit joint development is distinguished from TOD mainly by being tied to a specific real-estate project, venture, or brokered deal and involving the direct participation of a public entity, often a transit agency, in revenue streams and sometimes ownership. Joint development often occurs on a transit agency’s property or in its air rights; however, it can also occur on nearby private land if an improvement is physically or functionally integrated with a transit facility. Joint development at transit stations includes air-rights development, ground-lease arrangements, station interface or connection- fee programs, and other initiatives that promote real-estate development at or near transit stations to the mutual benefit of public and private interests.

1. Definition:

Has your agency adopted its own definition of joint development? 1 YES 0 NO

If YES, what is it?______

______

______

______

______

If NO, what is your own definition? ______

______

______

______

______

2. Transit joint development in your agency’s service area:

List major joint development projects in your agency’s service area.

Define TYPE of project using these codes:

A. Air-rights lease G. Sharing of operations (e.g., sharing of B. Ground lease parking, sharing of ventilation systems) C. Station connection fee (e.g., connecting H. Incentive agreements (e.g., bonuses in retail store to station) exchange for rehabilitating stations) D. Negotiated private contribution I. Equity Participation (e.g., sharing a E. Benefit assessment district to finance percentage of project revenues) transit-related improvements J. Other (specify): F. Sharing of construction costs

A-22 Define LAND USE using these codes: 1. Office 2. Retail 3. Mixed Commercial (office, retail, others) 4. Hotel 5. Residential 6. Mixed Commercial-Residential 7. Other (specify): ______

Station / Project Type Land Use

A. ______

B. ______

C. ______

D. ______

E. ______(If more than five, please use extra pages)

3. Indicate whether any of the following sources have been used to finance transit joint development in your area for pre-development (e.g., planning) and development. Check all that apply.

Pre-development Development

Pension funds

Union funds

REIT funds

Individual investor funds

Nonprofit / foundation funds

Other:______

4. In a few short words or phrases, please list the goals of those joint development projects listed above for which your agency has played a lead role. Once listed, please rank them in order of importance from your agency’s perspective, “1” being the most important. (If your agency’s service area does not have experience with transit joint development, please skip to Question 6.)

Goals Rank A. ______B. ______C. ______D. ______E. ______

A-23 5. Rate the following joint development impacts on scale of 1 to 7. Circle “N/A” if the impact does not apply to your agency’s service area.

IMPACTS Minimal Moderate Significant

Increase revenues to public sector 1234567N/A0

Increase transit ridership 1234567N/A0

Promote “smart growth” 1234567N/A0

Catalyst to redevelopment 1234567N/A0

Enhance property values 1234567N/A0

Improved urban design / architecture 1234567N/A0

6. To what degree has each of the following been an impediment to transit joint development in your agency’s service area?

DEGREE Minimal Moderate Major

Setting terms of private contributions 1234567

Securing zoning changes 1234567

Neighborhood opposition / resistance 1234567

Lack of lending support 1234567

Park-and-ride parking spaces adjacent 1234567 to station

Transit agency requirements for 1234567 replacement parking

Other (______) 1234567

7. What types of contractual arrangements were / are used for your agency’s transit joint development projects?

Penalties for developer for finishing project phases late? 1 YES 0 NO

A share of profits from project go to public agency partner? 1 YES 0 NO

A share of profits from sale of property go to public agency partner? 1 YES 0 NO

Minimum guaranteed rent for public agency partner from property? 1 YES 0 NO

A-24 8. Please share any ideas you have on improving the practice of transit joint development in the United States:

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

______

THANK YOU FOR YOUR TIME AND ASSISTANCE

A-25 APPENDIX B

DEVELOPER INTERVIEW PROTOCOL NATIONAL STUDY OF TRANSIT ORIENTED DEVELOPMENT AND JOINT DEVELOPMENT Telephone Survey of Developers

A. INTRODUCTION

Hello, my name is ______, and I’m calling today for a study being sponsored by the Transportation Research Board through the Transit Cooperative Research Program. We’re surveying developers involved in transit-oriented and joint development. We’d appreciate a few minutes of your time to help us answer some key questions. (If not, when could I call back that you would have time?)

Thank you for agreeing to help. First, I’d like to confirm some basic information about your firm.

1. Firm______

2. Person Providing Information:

Name ______

Title ______

Address ______

Phone______

E-Mail ______

Allow me to define what we mean by transit-oriented and joint development. A general definition of TOD is development concentrated around and oriented to transit stations in a manner that promotes transit riding. Rather than a single real-estate project, it represents a collection (usually mix-use) of projects at a neighborhood scale that are oriented to a transit node.

Transit joint development is distinguished from TOD mainly by being tied to a specific real-estate project, venture, or brokered deal and involving the direct participation of a public entity, often a transit agency, in revenue streams and sometimes ownership. Joint development often occurs on a transit agency’s property or in its air rights; however, it can also occur on nearby private land if an improvement is physically or functionally integrated with a transit facility.

B-3 B. EXPERIENCE Now I’d like to ask some questions about your firm’s experience with transit-oriented and joint development. 3. What types of real estate development does your firm do? I’ll list a number of types; please answer YES or NO to each. For each type, roughly what percentage of total activity or your portfolio does it represent? Percentage

Retail 1 YES 0 NO ______

Shopping centers 1 YES 0 NO ______

Office buildings 1 YES 0 NO ______

Industrial 1 YES 0 NO ______

Single family residential 1 YES 0 NO ______

Condos / townhouses 1 YES 0 NO ______

Multifamily residential (market-rate) 1 YES 0 NO ______

Multifamily residential (below market-rate) 1 YES 0 NO ______Mixed-use development (defined as combination of residential

and at least one commercial use) 1 YES 0 NO ______

Institutional uses 1 YES 0 NO ______

Other (please specify): 1 YES 0 NO ______

4. What percentage of your firm’s activity is in the Central Business District (CBD)?

1 CBD 2 Outside CBD

5. Project Experience A. Have you been involved with either of these types of projects (TOD or TJD)?

1 YES 0 NO B. If NO, then have you been involved with infill or mixed-use developments?

1 YES 0 NO

If your answer was NO to both of the above, please answer the following questions in terms of how you think you might approach future development of these types of projects.

B-4 6. What projects has your firm developed that are similar to what I’ve described as transit-oriented or joint development? We’d like to know about project type and size, setting, and when it occurred. If it is easier, please mail or e-mail this information to us. Type Size CBD / Outside CBD When?

______1 CBD 2 Outside CBD ______

______1 CBD 2 Outside CBD ______

______1 CBD 2 Outside CBD ______

______1 CBD 2 Outside CBD ______

C. FINANCIAL ISSUES Next, I’d like to ask about how your firm finances transit-oriented and joint development. 7. How does your firm typically finance the debt for TOD and transit joint development? ______

8. Have any equity funds (e.g., pension funds, REIT funds, foundation support) gone toward TOD or joint development that your firm has been involved with? If so, please identify. ______

9. What characteristics of TOD or joint development have positively affected your ability to obtain equity funds? A. ______B. ______C. ______D. ______

B-5 10. What characteristics of TOD or joint development have negatively affected your ability to obtain equity funds? A. ______B. ______C. ______D. ______

11. From your perspective, how do each of the following lending standards change for transit-oriented and joint development projects versus more “standard” (e.g., auto-oriented or traditional suburban) types of real estate development? Please be as specific as possible. Interest rate______Points (for securing loans) ______Loan-to-value requirements______Debt coverage requirements ______

B-6 12. Please indicate whether or not each of the following factors significantly affects your firm’s willingness to develop a given project, and if it does, its importance to your final decision:

IMPORTANCE TO DECISION Significant? Low Moderate High

Adjacent to Transit Station 1 YES 1234567 0 NO

Mixed Use Development 1 YES 1234567 0 NO

Unsubordinated Ground Lease 1 YES 1234567 with Public Agency 0 NO

Below Local Parking Standards 1 YES 1234567 0 NO

Availability of Tax Incentives 1 YES 1234567 0 NO

Limited Developer Experience 1 YES 1234567 with Proposed Project Type 0 NO

Majority of Local / 1 YES 1234567 Non-Credit Tenants 0 NO

Emerging Market 1 YES 1234567 0 NO

Public Sector Participation 1 YES 1234567 0 NO

Extent of Real Estate Investment 1 YES 1234567 Activity in Area or Near Site 0 NO

Brownfield Issues 1 YES 1234567 0 NO

Potential Rent Premium for 1 YES 1234567 Superior Location / Access 0 NO

Supportive Land Use 1 YES 1234567 Designations 0NO

Other (specify): 1 YES 1234567 ______0 NO

B-7 13. Have there been any successful TOD or joint development projects that have influenced your decision(s) to go forward with development projects?

1 YES 0 NO

Identify the successful project(s) that have influenced you: A. ______B. ______C. ______D. ______

14. Based on your experiences, how would you rate the financial track record of TOD and joint development projects to date?

(Please rate on a scale of 1 to 7.)

Poor Medium Good 1234567

15. Based on your experience as a developer, how would you characterize the role of the following public agencies and individuals in promoting TOD and joint development—as either obstacle, indifference, supporter, or partner? Choose one for each. Obstacle Indifference Supporter Partner

Transit agency 1 2 3 4

Redevelopment agency 1 2 3 4

State DOT 1 2 3 4

Metropolitan planning organization 1 2 3 4

Local planning agency 1 2 3 4

Local elected officials 1 2 3 4

B-8 D. RECOMMENDATIONS

16. Finally, we’d appreciate any suggestions (including public policies) regarding what factors would lead your firm to express greater interest in urban or suburban infill, mixed use, or transit-oriented or joint development:

______

THANK YOU FOR YOUR TIME AND ASSISTANCE

B-9 APPENDIX C

LENDER INTERVIEW PROTOCOL NATIONAL STUDY OF TRANSIT ORIENTED DEVELOPMENT AND JOINT DEVELOPMENT Telephone Survey of Lenders

A. INTRODUCTION

Hello, my name is ______, and I’m calling today for a study being sponsored by the Transportation Research Board through the Transit Cooperative Research Program. We’re surveying firms involved in financing real estate projects to help us understand issues and opportunities related to transit-oriented and joint development. We’d appreciate a few minutes of your time to help us answer some key questions. (If not, when could I call back that you would have time?)

Thank you for agreeing to help. First, I’d like to confirm some basic information about your firm.

1. Firm______

2. Person Providing Information:

Name ______

Title ______

Address ______

Phone______

E-Mail ______

Allow me to define what we mean by transit-oriented and joint development. A general definition of TOD is development concentrated around and oriented to transit stations in a manner that promotes transit riding. Rather than a single real-estate project, it represents a collection (usually mix-use) of projects at a neighborhood scale that are oriented to a transit node.

Transit joint development is distinguished from TOD mainly by being tied to a specific real-estate project, venture, or brokered deal and involving the direct participation of a public entity, often a transit agency, in revenue streams and sometimes ownership. Joint development often occurs on a transit agency’s property or in its air rights; however, it can also occur on nearby private land if an improvement is physically or functionally integrated with a transit facility.

C-3 B. EXPERIENCE Now I’d like to ask some questions about your firm’s experience with transit-oriented and joint development. 3. What types of projects does your firm provide loans for? I’ll list a number of types; please answer YES or NO to each. Roughly what percentage of your TOD loans go for each type? Percentage

Retail 1 YES 0 NO ______

Shopping centers 1 YES 0 NO ______

Office buildings 1 YES 0 NO ______

Industrial 1 YES 0 NO ______

Single family residential 1 YES 0 NO ______

Condos / townhouses 1 YES 0 NO ______

Multifamily residential (market-rate) 1 YES 0 NO ______

Multifamily residential (below market-rate) 1 YES 0 NO ______Mixed-use development (defined as combination of residential

and at least one commercial use) 1 YES 0 NO ______

Institutional uses 1 YES 0 NO ______

Other (please specify): 1 YES 0 NO ______

4. What percentage of your firm’s activity is in the Central Business District (CBD)?

1 CBD 2 Outside CBD

5. Project Loan Experience A. Have you been involved in providing loans for TOD or joint development projects?

1 YES 0 NO B. If NO, then have you been involved in providing loans for infill or mixed-use developments?

1 YES 0 NO If your answer was NO to both of the above, please answer the following questions in terms of how you think you might approach future lending to these types of projects.

C-4 6. What projects has your firm developed that are similar to what I’ve described as transit-oriented or joint development? We’d like to know about project type and size, setting, and when it occurred. If it is easier, please mail or e-mail this information to us. Type Size CBD / Outside CBD When?

______1 CBD 2 Outside CBD ______

______1 CBD 2 Outside CBD ______

______1 CBD 2 Outside CBD ______

______1 CBD 2 Outside CBD ______

7. Besides traditional debt sources, indicate whether any of the following sources have been used to fund transit joint development in your area. Check all that apply.

1 Pension funds

2 Union funds

3 REIT funds

4 Individual investor funds

5 Nonprofit / foundation funds

0 Other______

C. UNDERWRITING CRITERIA AND ISSUES Next, I’d like to ask about how your firm’s approach to underwriting relates to transit- oriented and joint development.

8. What characteristics of TOD or joint development contribute positively to a project’s appraised value? A. ______B. ______C. ______D. ______

9. What characteristics of TOD or joint development contribute negatively to a project’s appraised value? A. ______B. ______C. ______D. ______

C-5 10. How do each of the following underwriting standards change for transit- oriented and joint development projects versus more “standard” (e.g., auto- oriented or traditional suburban) types of real estate development? Please be as specific as possible. LENDERS: Pre-leasing requirement ______Interest rate______Points (for securing loans) ______Loan-to-value requirements______Debt coverage requirements ______

INVESTORS: Capitalization rate ______Leverage______

C-6 11. Please indicate whether or not each of the following factors significantly affects your firm’s willingness to lend or invest in a given project, and if it does, its importance to your final decision:

IMPORTANCE TO DECISION Significant? Low Moderate High

Adjacent to Transit Station 1 YES 1234567 0 NO

Mixed Use Development 1 YES 1234567 0 NO

Unsubordinated Ground Lease 1 YES 1234567 with Public Agency 0 NO

Below Local Parking Standards 1 YES 1234567 0 NO

Availability of Tax Incentives 1 YES 1234567 0 NO

Limited Developer Experience 1 YES 1234567 with Proposed Project Type 0 NO

Majority of Local / 1 YES 1234567 Non-Credit Tenants 0 NO

Emerging Market 1 YES 1234567 0 NO

Public Sector Participation 1 YES 1234567 0 NO

Extent of Real Estate Investment 1 YES 1234567 Activity in Area or Near Site 0 NO

Brownfield Issues 1 YES 1234567 0 NO

Potential Rent Premium for 1 YES 1234567 Superior Location / Access 0 NO

Supportive Land Use 1 YES 1234567 Designations 0NO

Other (specify): 1 YES 1234567 ______0 NO

C-7 12. (LENDERS ONLY) For projects located in areas eligible for CRA credit, how does the location affect your firm’s consideration of the above factors? ______

13. Have there been any successful TOD or joint development projects that have

influenced your decision(s) to grant loans? 1 YES 0 NO

Identify the successful project(s) that have influenced you: A. ______B. ______C. ______D. ______

14. Based on your experiences, how would you rate the financial track record of TOD and joint development projects to date?

(Please rate on a scale of 1 to 7.)

Poor Medium Good 1234567

C-8 D. RECOMMENDATIONS

15. Finally, we’d appreciate any suggestions (including public policies) regarding what factors would increase your firm’s interest in lending for projects that promote urban or suburban infill, mixed use, or transit-oriented or joint development:

______

THANK YOU FOR YOUR TIME AND ASSISTANCE

C-9 Abbreviations used without definitions in TRB publications: AASHO American Association of State Highway Officials AASHTO American Association of State Highway and Transportation Officials APTA American Public Transportation Association ASCE American Society of Civil Engineers ASME American Society of Mechanical Engineers ASTM American Society for Testing and Materials ATA American Trucking Associations CTAA Community Transportation Association of America CTBSSP Commercial Truck and Bus Safety Synthesis Program FAA Federal Aviation Administration FHWA Federal Highway Administration FMCSA Federal Motor Carrier Safety Administration FRA Federal Railroad Administration FTA Federal Transit Administration IEEE Institute of Electrical and Electronics Engineers ITE Institute of Transportation Engineers NCHRP National Cooperative Highway Research Program NCTRP National Cooperative Transit Research and Development Program NHTSA National Highway Traffic Safety Administration NTSB National Transportation Safety Board SAE Society of Automotive Engineers TCRP Transit Cooperative Research Program TRB Transportation Research Board U.S.DOT United States Department of Transportation