II. ECONOMIC IMPACTS OF THE BUILT ENVIRONMENT

UILT ENVIRONMENT ii. AN ECONOMIC HISTORY:

HOW TRANSPORTATION HAS SHAPED THE ECONOMIC HISTORY OF UNIVERSITY AVENUE

by jillian benson

This Chapter’s Questions:

1. How was University Avenue’s economic history shaped by different modes of transportation?

2. What is the current consumer demand for goods on the avenue?

3. How might historical trends explain future effects of the Central Corridor?

Chapter Outline:

I. Introduction and Overview II. Industry and Rail III. Entertainment, Retail, and Autos IV. Highways and Pornography V. Today’s University VI. The People’s Demands VII. What the Light Rail Could Change

I. INTRODUCTION AND OVERVIEW relationships, I will look at the current operating of the transfer yards was a economic climate on the Avenue and large employment opportunity and see what kind of changes have occurred brought in many new laborers to the University Avenue is an extremely since the 1970s. I will specifically be area. Thus, University, like many major looking at the current consumer commercial city streets, started out as a diverse street that connects the two 2 town centers of the Twin Cities. The demand using the Nielsen-Claritas data primarily residential area; with the Avenue stands out as a mark of from 2010 to understand what people increases in labor force, the demand for diversity in the cities–socially, racially, are buying or “demanding” when they housing rose as well. In 1881 the architecturally, and economically, shop on the Avenue. Finally, I will tracks for horse drawn trolleys were among other things. University has speculate on how the construction of laid on the Avenue in St. Paul as far as the Central Corridor will affect Dale Street, making travel up and down seen much change over the past 3 century, experiencing extreme growth development on the street based on the Avenue easier. in the first half of the century, peaking both historical trends and discuss In 1890, the tracks were around the 1950s and 60s, after which possible development projects based on extended to Minneapolis for use with what is currently demanded. electric trolleys, now connecting the time its wealth and popularity started to 4 disappear. What was it that made this two cities via University Avenue. This "grand" avenue grow into such a II. INDUSTRY AND RAIL new electric streetcar line was so hotspot in the cities and then proceed to popular and successful that it forced the lose its luster and economic power? commuter train companies to stop University Avenue was moved to its running their services as often because This chapter seeks to explain how such current location after railroad baron an era of prosperity came to be and the midway line was taking half of the James J. Hill declared that the rail business. Soon the University route why it was followed by such a drastic networks entering the cities needed a 5 downfall by looking at the Avenue’s was dubbed “the Interurban.” The main terminal to greet and organize the rapid growth on the Avenue gave hope economic history. To understand these 1 incoming trains. This led to the to the business community who saw trends, I will examine how these shifts creation of the Minnesota Transfer in economic prosperity and hardships University as an opportunity to build a Yards, which pushed University grand commercial street that would are linked to the changing modes of Avenue north of its original route to its transportation on the Avenue itself as rival the grandeur of the Champs- current path. The Transfer Yards Elysées in Paris, France.6 well as in its surrounding neighbor- marked the beginning of an era for hoods. After exploring these The first electric streetcars used University Avenue. The building and were built by the Thomson-Houston

38

Company.7 These cars were found to that the workers rode for their trams were finally taken off their rails be too lightweight and small, and were commute. for good in 1953 and replaced with bus not sturdy enough to withstand the The Avenue’s commercial lines.14 The initial loss of ridership did harsh weather conditions experienced development began blooming in 1905, not affect University economically; the in the winter. When new streetcars coinciding with the completion of the Avenue was still as prosperous and were brought in from the Northern Car State Capitol, but mainly due to the crowded as before. In fact, it brought Company, they also proved useless success and popularity the streetcars.11 different businesses to the Avenue in against the Minnesota winters.8 This The businesses sprouting up in the the form of car dealerships and led to the creation of the home-built beginning were mostly small grocers, automobile servicing.15 streetcar industry. The first of these bakeries and butchers that met the The cities continued to grow, cars were built at the shops at the needs of the increasing population and not just the inner-city populations, Nicollet Station and were so well along the street. 12 As the Avenue but also the suburban populations. received that the shops produced continued to grow, larger businesses With people further away from the another 275 cars for the line.9 Being started moving to the area, creating a central business districts of the Twin the first streetcar producers, the stable and growing commercial Cities, the convenience of a car became Nicollet Station shops were smaller district.13 the popular way to get between home operations, and proved to be inadequate and work. University was still the main for producing the number of streetcars III. ENTERTAINMENT, RETAIL AND route between St. Paul and Minneapolis necessary to meet the high demand. and benefited from this fact. University AUTOS This prompted the development of the was becoming the place to not only

Snelling Streetcar Shops in 1906, purchase your car, but to show it off as located on Snelling Avenue between With the introduction of the well.16 The desire to show off one’s University and St. Anthony avenues.10 automobile, University continued to car was matched with the development The Snelling Shops built the streetcars grow, and traffic on the Avenue of drive-in restaurants, which were that serviced the cities until 1953. This increased, both from streetcars and gaining popularity in the 1940s and 60-acre industrial center provided many automobiles. It was clear, however, that 50s. The most famous and long-living jobs for the citizens of these cities. The the automobile was the preferred means drive-in and carhop on University was yards brought more traffic to of travel by the citizens of the cities Porky’s, which opened up in 1953 and University by bringing workers to the even before WWII. The streetcars had closed on April 3, 2011.17 area as well as producing the vehicles slowly been losing riders to cars after The popularity of the their ridership peaked in 1922, and the automobile also affected retail

39 businesses on the area, not just in terms 1941, the dance floor was reportedly good in 1953 and the rail areas became of car dealerships. The Midway packed with 6,000 dancers, and half as paved road. As the metropolitan area Shopping Center was one of the first many were turned away at the door.22 continued to grow, and more people major developments that catered The Prom often hosted Glenn Miller’s were living outside of the city centers, specifically to the booming car culture. orchestra, as well as many other the need for a more rapid route between It opened in 1954 on the corner of famous bands and artists throughout the the two cities grew also. The Snelling and University, and was years, such as Buddy Holly and Jules construction of Interstate 94 finished in equipped with ample parking space and Herman.23 the late 1960s, and I-94 became the large-scale retailers.18 Another draw to the Avenue most efficient route between At the same time, University was the cinema that opened up in 1912, Minneapolis and St. Paul. The freeway was the entertainment destination of the the Faust Theater.24 Located at the reduced the traffic volume along Twin Cities.19 Aside from drive-in corner of University and Dale, The University considerably.27 I-94 is the joints, University played host to the Faust was a single-screen movie theater factor that had the most pointedly Lexington Park, the Prom Ballroom, that seated nearly 900, and was often detrimental effects on University. It and the Faust Theater. Lexington Park filled with young people.25 The took away the masses of people who was the home of the minor league younger crowds often made for a lively used to frequent the Avenue by car and baseball team, the St. Paul Saints, and audience, and a movie was usually who now instead could bypass the strip for 60 years they packed the park paired with noise and rowdiness from and cut down on travel time between located at the corner of University and the viewers.26 The Faust Theater, along their work in the cites and their new Lexington.20 Up until the early 1950s, with the Prom Ballroom, Lexington homes in the suburbs. Without the high fans would travel to University to Park, and all the drive-in restaurants, volumes of automobile traffic to bring attend games at the park. It wasn’t made University a very exciting place consumers, businesses were forced to until 1956 that the park closed after the to be, and the automobile made it easy close, buildings were left to deteriorate, Saints were moved to their new home for people to get up and down the strip. and people moved away.28 at Midway Stadium, which was built in Even though many businesses an effort to keep the City of St. Paul as IV. HIGHWAYS AND PORNOGRAPHY were leaving University, there was a a contender to receive a major league group that was forced to move to the baseball team.21 area. The plans for the freeway led to The Prom Ballroom was By the 1950s, the automobile was the displacement of the entire Rondo another big entertainment stop on king. This was made even more clear neighborhood and community, leaving University. On its opening night in when the streetcars stopped running for many community members to resettle

40 around the Avenue. Before the prostitutes.31 The city of St. Paul did The significant influx of interstate, Rondo was a vibrant and buy up the Faust Theater in 1989, only Southeastern Asian residents in the area thriving African-American neighbor- to shut it down as part of St. Paul’s has led to the development of many hood. But when I-94 was being initiatives to rid the neighborhood of its family-owned businesses on constructed, the community was sexually-related businesses, in hopes to University, including but not limited to completely fractured and thousands of revive the area as well as its reputation, restaurants, delis, and supermarkets. people were forced to move into and make it a safer place to be.32 Despite the Avenue’s lack of luster, marginal neighborhoods in unfamiliar these local, immigrant-owned territory, specifically settling around ODAY S NIVERSITY businesses provide support for those 29 V. T ’ U the east end of University. This was hopeful about economic development the beginning of a new era for the there. These businesses exist alongside Avenue, one of lowered consumer The face of University has changed the Midway Shopping Center, which activity, increased populations living significantly since the turn of last still harbors large-scale grocers and on the margins and higher rates of century. The neighborhoods around the various other chain stores. The Midway illegal happenings. Avenue have become much more Mall, a similar venture to the Midway As the area was left unkempt racially diverse. Frogtown is the Shopping Center, sits on the corner of during the late 1960s and 70s, seedier neighborhood surrounding the east end Hamline and University. It houses a sorts of businesses emerged. Peep of University, and has always been an Super Target, and is not far from a shows and porn shops became immigrant destination. It was Walmart, Cub, Herbergers, and commonplace. The Faust Theater was originally populated with German, Borders. The Avenue has become a converted from playing Hollywood Irish, Polish and Scandinavian collection of giant chain companies and immigrants in the 19th second half of films to screening X-rated ones. Kitty- th 33 locally-owned businesses. Although corner from the theater was the the 19 century. The neighborhood cars remain the main mode of Belmont, a topless dancing bar. The remained a predominantly Caucasian transportation along the Avenue, the Avenue became dotted with X-rated area until the Rondo community bus routes that took over the streetcar stores, and the prostitution that relocated there after their neighborhood lines are still running the length of originally plagued Selby Avenue was demolished by the construction of University and the average wait time is moved over to University.30 Women the freeway. In the most recent years, less than 10 minutes. who lived near the Avenue at the time there have been increasing numbers of The Avenue once strewn with often found themselves harassed by immigrants from Southeastern Asia car dealerships lost its last one in 2007, men driving around looking for settling in the area. ending an era on University.34 New

41 zoning laws that aim to limit the useful to look at its current state. In numbers labeling the block groups are number of car-oriented businesses order to do this, I will estimate for reference purposes and do not further enforce the decline of the consumer demand using the Nielsen- represent Census IDs. automobile culture on the Avenue. Claritas data from the year 2010. The City planners hope for University to be purpose of this is to study consumer a more pedestrian thoroughfare when transactions in each census block group the Central Corridor goes in.35 along the Avenue to get a sense of what Currently, the drive-thru fast-food consumers are buying. For this joints, large parking lots, and analysis, I focus on eighteen block automotive shops do not portray a groups that border University. I limit pedestrian-friendly image, and walking the study area to Ramsey County along the street can be an unpleasant because that is where many of the experience. historical references from the previous sections place us. My study area spans VI. THE PEOPLE’S DEMANDS from Rice Street as the eastern boundary to just past Franklin Avenue on the west. This study area and the To help understand where and how block groups can be viewed on the map University Avenue may change it is on the bottom of this page. The

42

The raw data show the of this imprecision in variable variables whether combined or not. In transaction values, or the totals of definition, I found that I could extract the end, I went from thirty-eight consumer expenditures on goods, the same sort of information from these variables to fifteen. Table 1 identifies which are reported in dollars. In order to compare these numbers Table 1: List of New Variables with Descriptions† across block groups and to see what New Variable Description of Variable kind of goods are being bought on Food Groceries and Other Foods + Meals and Snacks University, I will look at transaction Alcohol/Tobacco Alcoholic Drinks + Packaged Liquor/Wine/Beer + Cigars, Cigarettes, values of goods purchased as a Tobacco and Accessories percentage of the total of all goods Pharmacy Goods/ Cleaners/Paper Drugs, Health Aids and Beauty Aids +Soaps, Detergents and Household purchased. Thus, for the purpose of Products Cleaners + Paper and Related Products this study, the “consumer demand” Apparel/ Footwear Men's Wear + Women's, Juniors' and Misses' Wear + Children's Wear + Footwear for a good refers to the expenditure Sewing, Knitting, Drapery Sewing, Knitting and Needlework Goods + Curtains, Draperies, Blinds, on a good as a percentage of the Slipcovers etc. total consumer expenditure for the Major & Small Electric Major Household Appliances + Small Electric Appliances block group area. Appliances The Claritas data included TV, Audio, Computer & Media Televisions, Video Recorders, Video Cameras + Audio Equipment, Musical thirty-eight different variables. I Equipment Instruments + Computer Hardware, Software and Supplies found this to be unwieldy, and so I Furniture & Flooring& Furniture and Sleep Equipment + Flooring and Floor Coverings + combined variables that represented Kitchen/Home Furnishings Kitchenware and Home Furnishings similar goods. For example, Hobbies and Leisure Activities Books + Photographic Equipment and Supplies + Toys, Hobby Goods and “Groceries and Other Food” and Games “Meals and Snacks” were two Optical Goods & Sporting Goods Optical Goods & Sporting Goods different variables that I combined Hardware, Home Improvement, Hardware, Tools, Plumbing, Electrical + Lumber and Building Materials + Lawn/Garden, Paint Lawn, Garden, and Farm Equipment & Supplies + Paint and Sundries to make one variable: “Food”. Neither variable indicated Cars/Trucks & Campers, RVs, Cars, Trucks, Other Powered Transportation + RVs, Campers, Camping & Trailers Travel Trailers specifically if one was solely Auto Fuels & Lubricants Automotive Fuels + Automotive Lubricants restaurant food and the other was Pets, Pet Food & Supplies Pets, Pet Foods and Pet Supplies solely grocery store food, which is All Other Merchandise & Jewelry All Other Merchandise + Jewelry something I would have been interested in examining. Because †Descriptions refers to the combinations of the original variables that create the new variables

43 the consolidated variables. expenditures. With used-car understandable that these goods would After comparing the dealerships on the Avenue, as well as also have a higher demand. The goods percentages of each good’s expenditure large-scale grocers that offer both that are least demanded by consumers versus total expenditures, I found that pharmacies and cleaning supplies for are “Pets/Pet Food & Supplies” and each of the eighteen block groups had sale (e.g. Super Target), it is “Major & Small Electric Appliances”, very similar percentage distributions of goods purchased. Figure 1 shows the Food breakdown of percentages of consumer Figure 1: expenditure on goods for all eighteen Total Consumer Expenditure Alcohol/Tobacco block groups combined. Food items For all Block Groups Pharmacy have the highest demand on the 1% goods/cleaners/Paper Products Avenue, ranging from 26-33% of the 6% Apparel/Footwear consumer expenditures in the block groups. This is not surprising 7% Sewing, Knitting, drapery considering the grocers and restaurants 28% Major & small electric were some of the first businesses to appliances emerge during the early days of TV, audio, computer &media 12% equipment University’s development, and food Furniture & Flooring& establishments currently are the most Kitchen/home furnishings common type of business on the strip. Hobbies and Leisure activities Although I cannot distinguish between 2% Optical goods & sporting goods the different sources of food, I assume 2% 3% that the high expenditures on food are 7% Hardware, Home Improvement, Lawn/garden, paint made at both grocers and restaurants, 4% which are either locally-owned or Cars/Trucks & Campers, RVs, Trailers chains. 4% 11% Auto Fuels & Lubricants “Apparel/Footwear,” “Cars/ 11% Pets, Pet Food & Supplies Trucks”, and “Pharmacy Goods/ 1% 1% Cleaners” were the three next highest All Other Merchandise + Jewelry goods in demand, all ranging from 9- 14% of the total consumer

44

both of which consisted of only 1% of even if there is no market for these consumer expenditure across all block goods among the residents of VII. WHAT THE LIGHT RAIL COULD groups. The full breakdown of the University, there may be demand for CHANGE percentages of consumer expenditure these products from consumers outside for each good within each individual of the area that could be serviced by block group can be seen in Table 2 at businesses along University. Based on previous historical trends on the end of the chapter. There are issues with my how transportation has affected Understanding what consumers measurement of demand. For one, it University, there is no doubt that the are demanding is important for does not consider the supply side. Central Corridor will also change the business owners along the Avenue. According to the basic principles of face of the Avenue. Before the Knowing this information can help supply and demand, if demand is very automobile, the streetcars brought the storeowners with inventory orders. It low, it means supply is too high, and Avenue to life, and made it a thriving can also help developers, city planners consumers do not want the product center of economic and social activity. and entrepreneurs decide what kind of because they most likely already have Although I cannot say if the light rail businesses fit into the current economic it. Yet, it could also imply that markets will have the same drastic effect as the climate. The data tell us that food is on University for appliances or pet streetcars did, I do believe it will help the main good being purchased by supplies could do very well if they to revive the Avenue. Historically, residents of University. This suggests were able to draw consumers from University was shaped by the available that more food establishments could outside the immediate area. modes of transportation on the Avenue. help supply the high demand for food. Understanding the disparity Bringing the electric trolleys or the At the same time, the data showed that between the supply and demand of a automobile to the Avenue meant there were few goods that had very low good or set of goods can help with bringing people to the Avenue. When percentages of consumer expenditure. knowing what sorts of businesses can the interstate was completed, the These goods include, as mentioned survive in the future economic climate. number of people moving up and down earlier, pet supplies and major Gaps in supply and demand create the Avenue decreased greatly and appliances, as well as “Optical Goods potential business opportunities. These businesses suffered and left. But, with & Sporting Goods” and “Hardware.” sorts of opportunities will be discussed the Central Corridor, a new mode of One explanation for low demand may in the next chapter. transportation is once again being be that residents along University do introduced to University Avenue, and not need or prioritize those goods and will hopefully bring with it the numbers thus do not demand them. However, of consumers that its transit successors

45 did before. There is potential for the Avenue. This information may be economic development with this helpful when developing the area after project. construction of light rail as well as in Many people have voiced encouraging business owners to open concerns about business survival during shop on University. Based on the construction phase. Citizens have historical trends, I predict the Central also questioned how easy it will be for Corridor will have positive effects on cars to travel the Avenue with limited the Avenue and create new business left turns and parking. One of the opportunities. By examining current biggest barriers to the success of the consumer data, new business owners Central Corridor and the development can understand what is needed to help of the Avenue is the idea that shape the Avenue that will cater to their University must remain an avenue that consumer demands. The next chapter is still heavily trafficked by car. Of will discuss the “opportunity gap” course automobiles will not disappear measure that the Nielsen-Claritas data overnight, but if citizens understand provides, which takes into account both that the future of University is not an the demand and the supply side and existence without cars but rather cars allows us to explore where there is and pedestrians together, the project potential for new business along the will be much more successful. City Avenue. planners would like to see University become a more pedestrian-friendly street, which I think will be beneficial to consumers on the Avenue as well as the surrounding communities. It is crucial to the success of the Central Corridor that there be increased pedestrian traffic. With the Nielsen-Claritas data, I was able to see what kinds of goods are being purchased by current residents of

46

Table 2: Percentage Breakdown of Each Good's Consumer Expenditure by Block Group

Variables

& &

, ,

†

Knitting

, , Jewelry

All Other All

Trailers

Merchandise

Block Media Equip

Alcohol/Tobacco Pharmacy Goods/ Cleaners/ Paper Products Apparel/ Footwear Sewing Drapery Major & Small Electric Appliances TV, Audio, Computer & Furniture Flooring Kitchen/Home Furnishings Hobbiesand Leisure Activities Optical Goods & Sporting Goods Hardware, Home Improvement, Lawn/Garden& Paint Cars/ Trucks & Campers, RVs, Auto Fuels& Lubricants Food Pet Pets, & Supplies Group Food 1 29 8 12 10 1 1 4 4 3 1 2 10 7 1 7 2 28 7 12 10 2 1 3 4 3 1 2 12 7 1 7 3 28 8 13 9 2 1 4 4 3 1 2 10 7 1 7 4 26 6 12 10 2 1 4 4 3 2 3 13 6 1 7 5 27 7 11 10 2 1 3 4 3 2 2 13 7 1 7 6 28 7 12 11 2 1 3 4 3 2 2 12 6 1 6 7 29 6 10 14 1 1 3 3 4 2 2 13 6 1 5 8 31 7 12 13 1 1 3 3 3 2 2 10 6 1 5 9 28 6 11 13 1 1 3 4 3 2 2 14 5 1 6 10 30 6 11 13 1 1 3 3 3 2 2 12 6 1 6 11 31 7 11 12 1 1 3 3 3 2 1 12 7 1 5 12 33 8 12 12 1 1 3 3 3 1 1 9 7 1 5 13 28 6 11 13 1 1 4 4 3 2 1 13 7 1 5 14 27 5 11 13 2 1 4 4 3 2 2 13 6 1 6 15 27 5 14 12 2 1 3 4 3 2 3 12 6 1 5 16 30 10 8 11 1 1 5 2 6 2 1 10 6 1 6 17 27 8 10 10 1 1 4 4 3 2 2 13 7 1 7 18 27 8 11 9 2 1 4 4 3 1 2 13 7 1 7 Range 26-33 5–10 8–14 9–14 1–2 1 3–5 2–4 3–6 1–2 1–3 9–14 5–7 1 5–7 All Groups 28 7 11 11 1 1 4 4 3 2 2 12 7 1 6 All of the variable values are percentages †It was not given what "All Other Merchandise" might include

47

EFERENCES R 17 31 Walsh, Paul & Rochelle Olson. “Porky’s Ibid. Closing: That’s All Folks.” The Star 32 Ibid. 1 McClure, Jane. “The Midway Chamber and Tribune Online. April 4, 2011. 33 Frogtown Minnesota, The History of Its Community: The Colorful History of http://www.startribune.com/local/119000 Frogtown. 2010. an Unparalleled Feature.” Ramsey 504.html http://www.frogtownmn.org/?q=node/78 County History v. 29:3, 1994. 18 Goforth, Jill. University Ave: A History. 34 Yuen, 2008. 2 Baymiller, Joanna. “University Avenue Toots Department of Geography, Macalester 35 Ibid. its Horn: A Case Study of Successful College, 2010. Commercial Revitalization in Saint Paul.” 19 Wilcoxen, William. “University Avenue: A Architecture Minnesota, May/June 1977, Work in Progress: An Entertainment p. 19 Destination.” Minnesota Public Radio 3 Ibid. News on the Web, May 13, 2005 4 Diers, John W. & Aaron Isaacs. Twin Cities http://minnesota.publicradio.org/display/ by Trolley: The Streetcar Era in web/2008/05/13/univaveentertainment Minneapolis and St. Paul. University of 20 Ibid. Minnesota Press, Minneapolis. 2007, 21 Thornley, Stew. Twin Cities Ballparks. p.197 2004. 5 Ibid, p. 201 http://stewthornley.net/twincityballparks.h 6 Yuen, Laura. “University Avenue: A Work in tml Progress: The Car Culture.” Minnesota 22 Wilcoxen. Public Radio on the Web, May 13, 2008 23 Ibid. http://minnesota.publicradio.org/display/ 24 Cinema Treasures, Faust Theater, 2009. web/2008/05/13/univavecars http://cinematreasures.org/theater/25583/ 7 Kieffer, Stephen A. Transit and the Twins. 25 Kenney, Dave. Twin Cities Picture Show: A Minneapolis: Twin City Rapid Transit Century of Moviegoing. Minnesota Company, 1958, p.22 8 Historical Society Press. 2007. p. 89. Ibid. 26 9 Ibid. Ibid., 24 27 10 Baymiller, 19. Ibid. 28 11 Ibid. Ibid. 29 12 Baymiller, 19. Mador, Jessica. University Avenue: A Work 13 Ibid. in Progress: Immigrants Always 14 Kieffer, 43. Welcome. Minnesota Public Radio News 15 Yuen. on the Web, May 13, 2008. 16 Yuen. http://minnesota.publicradio.org/display/ web/2008/05/13/univaveimmigrants 30 Wilcoxen.

48 ii i. BUSINESSES AND CONSUMERS :

This Chapter’s Questions:

SALES, EXPENDITURES, AND OPPORTUNITIES FOR THE FUTURE

by nolan levenson

This Chapter’s Questions:

1. What is the current business climate on

University Avenue?

2. What are Central Corridor residents spending their money on?

3. Where is there potential for new business?

4. What kinds of businesses might open during and

post LRT construction?

Chapter Outline:

I. LRT and Businesses II. Study Design

III. Business Types

IV. Examining Market Orders

V. Examining Station Areas VI. Conclusion

might they open? This study will depict rail stations.2 However, other studies I. INTRODUCTION AND BACKGROUND current business trends occurring along found no impact from proximity to the avenue before LRT construction, station areas and in some cases there was considering retail sales and consumer a negative impact.3 any Central Corridor stakeholders expenditures. The results of the study There is also limited research on M will be used to make predictions about business sector trends.4 Most business- are anticipating significant new potential future business development related LRT studies focus on revenue- development and increased revenues for along the Corridor. In the years after loss mitigation strategies. They show existing business owners along the LRT construction, this study should be what has been successful in keeping Corridor after construction of the light re-evaluated using updated data for business afloat during and post- rail (LRT). Businesses are concerned comparison in order to determine impacts construction. In Seattle, a community about survival during and post- of LRT. development fund was supplied with $50 construction and fear displacement due to million to support local businesses, higher rents and property taxes that may LRT AND BUSINESSES which helped almost all businesses in the occur because of LRT. Rainier Valley survive.5 In Portland, University Avenue is considered a Many planners advocate that businesses will benefit greatly from LRT Oregon, along the Yellow Line, there commercial corridor, with a wide variety was a net gain in the number of of shopping options such as car because of newly created pedestrian traffic. However, studies show businesses, but many businesses that dealerships, antiques, used clothing existed pre-LRT relocated to other stores, ethnic markets, and restaurants. conflicting evidence about this topic. There is not much literature directly places, and a few went out of business. The demographics of residents are also There was also an emergence of a new quite diverse, but in recent decades the related to business revenues. Many studies consider commercial property professional services sector among other Avenue has acquired an ethnic minority 4 value changes in relation to rail transit new businesses. character, which can be seen in many These studies, however, do not businesses along the Corridor. and transit stations, but offer differing results. Supporting increased value in consider business revenues or consumer In this study I will examine the retail expenditures. The sole study that focused business sales and consumer purchasing relation to LRT, one study in Santa Clara County, California found that as distance on revenue comparison pre- and post- trends in areas around the proposed LRT LRT development — a study of the station areas, from Stadium Village to from LRT stations increased, commercial property values decreased.1 Another Rainier Valley in Seattle — showed that Union Depot. Using this information I gross revenues, adjusted for inflation, will speculate on: What kinds of study found ―some indication‖ that commercial properties benefit more than increased post-LRT construction. The businesses might open along University author attributes this, however, to the Avenue post-LRT construction? Where residential properties due to proximity to

50 registration of unlicensed businesses, not Central Corridor LRT stations, while expenditures for each census block group as a result of LRT. This study also noted higher risk sectors were in danger along the Central Corridor based on that there was not a large change in total because of increasing rents.4 credit card information. The data show number of businesses, which is also The central focus of this paper is on how much revenue is generated by attributed to the registration of retail sales and consumer demand in the different kinds of business in each block unlicensed businesses that may have Corridor, which few, if any, studies have group, and how many goods of each kind offset the turnover of other businesses. considered. The Central Corridor will of business are purchased by the The ethnic diversity of businesses also provide an excellent opportunity to study residents of each block group. Simply remained unchanged post-LRT LRT station area impacts on businesses, put, retail sales represents supply and construction. 5 given the diverse character of the consumer expenditures represent In Phoenix, Arizona, there was a 30- Corridor, with a wide variety of small demand. 40% drop in revenue for businesses businesses, big-box stores, and large The data will then be categorized into along the LRT corridor during industrial sites. functional orders of goods, from high to construction, and seven businesses low, based on their potential trade market closed. Unfortunately, there was no areas as defined in previous studies. information about total numbers of High-order goods have the largest trade 4 II. DESIGNING THE STUDY businesses available. This indicates that area, include more expensive goods, and there should be more research done on are less frequented on a regular basis by LRT construction impacts. The study did The primary source of data will be from individual customers. In order to earn not indicate what the impacts on the Nielsen-Claritas dataset from 2010 profit, high-order businesses must attract businesses were post-construction. for each block group within a mile of the customers from a larger area than low- Related to University Avenue, one Central Corridor, from Stadium Village order businesses. An example of a store study focused on ―survivability‖ of on the western end to Union Depot on with high-order goods is Menards. * business sectors in the Lexington-Rice the eastern end . This study considers the Therefore, Menards is considered a high- corridor. Personal care services and block groups that are included in and are order business. automotive repair shops are at the highest tangential to each LRT station area, Medium-order goods have smaller risk of displacement in the long-term defined by a ¼ mile buffer around each trade areas and less expensive goods, future, while restaurants and specialty station. The Claritas data have such as a restaurant or a supermarket. A food services have the lowest risk of information on retail sales and consumer business with medium-order goods is displacement in the future. One of the considered a medium-order business. reasons these places were at lower risk in * Due to data availability, the Corridor is defined Low-order goods are found in places the long-term is their proximity to only by station areas between Stadium Village and such as convenience stores and liquor Union Depot.

51 stores because they are used most different areas along the avenue. Using locally, whereas a negative opportunity frequently and are the cheapest kinds of these data, one can see where there is gap indicates a surplus of goods in a goods. A business that sells low-order potential for new business, and what sector. This can indicate then, what kinds goods is considered to be a low-order existing sectors might thrive post-LRT of businesses might open in different business. construction. places. Potential for new businesses can also Block groups that intersected with Order Type of Business be explored using the ―opportunity gap,‖ the ¼ mile buffer around each station High Car Dealerships, Auto Repair and which measures discrepancies between were aggregated to a station-area level to Parts, Furniture, Building Material expenditures and sales in each block determine business activity within and and Garden Supply, Non-Store group for each kind of good. A positive around each station area. While some Retailers* Medium Electronics, Supermarkets, opportunity gap indicates opportunity for block groups are not tangential to the Specialty Foods, Health and a start-up business or business expansion Corridor, and extend a good distance Personal Care, Clothing, Sporting to fill the excess demand of consumers. from the Corridor, they were included in Goods, Music, Hobby, General The higher the gap, the more demand this sum for two reasons. First, the Merchandise, Misc. Stores there is. High opportunity means that majority of areas that are not tangential Low Convenience Stores, Liquor there is good potential for business. to the Corridor, but are contained within Stores, Gas Stations A negative opportunity gap indicates the tangential block group, are almost that there is a surplus of goods in purely residential and consume in their Total retail sales of businesses and comparison to consumer expenditures for surrounding commercial areas. Second, consumer expenditures of residents for those goods, and that there is no room for the station area can impact businesses each of these orders will be displayed more business in that sector. A high north and south of the Corridor, graphically by census block groups and surplus is indicated by a large negative particularly along major cross streets in tables to demonstrate the character of opportunity gap. If there is surplus, there because of high transportation access. is no room for new businesses because * Non-store Retailers include mail-order houses, there is excess supply. DEMOGRAPHICS vending machine operators, home delivery sales, The opportunity gap will be used in door-to-door sales, party plan sales, electronic In order to compare areas along the shopping, and sales through portable stalls (e.g., this study to determine where new Corridor, I will compare results of the street vendors, except food). Non-store retailers businesses might locate, and what goods study with demographic data about the were included in high-order goods because they they might sell. Broken into sectors and made up a large portion of the total sales in the block groups around each station area University corridor (14%), while being extremely types of goods, a high opportunity gap including total population, families spatially concentrated, indicating the high-order for different types of businesses indicates below poverty, and median household service they might provide. It is improbable that a need for specific kinds of goods street vendors could have such high sales.

52 income, all using 2010 estimates from potential of the Corridor. A quick findings of this study to see if plans for the Claritas data. analysis of ridership projections might growth coincide with the business These data were also aggregated to a indicate some of the pedestrian traffic potential measured by opportunity gaps station area level, including block groups that will augment business in station in each station area.* that intersected the ¼ mile buffer of each areas.6 In 2030, it is projected that The Hamline, Victoria, and Western station area. To determine an aggregate Snelling, Union Depot, Fairview, and station area plans are still under review, for median household income for station Tenth St. are in the top tier of ridership, therefore the study will consider their areas, I used the mean value of the with 1,860–2,930 boardings per day. draft editions. The market forecasts in median household income of intersecting This suggests that businesses in these those plans were conducted in 2010, and block groups (which will be referred to places may increase more in sales and list projections for 2035. as the mean block group median revenue than businesses at other station household income in the rest of the areas. LIMITATIONS OF THE STUDY paper). While not a perfect measure, this There are some limitations to this gives a general idea of the wealth of Ridership Level Stations study. The opportunity gap is not a residents in each station area. Low Western, Capitol East, perfect measure of mismatch areas for Total population was also used to (270-600) Victoria, Hamline potential development because it cannot standardize consumer expenditures Low-Medium Dale, Lexington, Prospect measure how much money is actually across areas, since some station areas (710-970) Park, Stadium Village High – Medium Westgate, Rice, Fourth, being spent locally by consumers, just have more population than others and (1140-1250) Raymond how much money consumers from each might explain lower or higher High Tenth, Fairview, Union block group spend. Additionally, we do expenditures. However, expenditure (1860-2930) Depot, Snelling not know whether businesses are numbers that do not account for *Categories divided by natural breaks in the data receiving local money if their revenues population are still useful in are based from customers far away. understanding business potential because THE CITY OF ST. PAUL’S STATION AREA The aggregate measures for station a business depends on sales, not on the PLANS areas are also inexact. Block groups that number of people living around it. Lastly, I will examine the City of are included in each station area vary in

Saint Paul station area plans, which size and distance from the LRT line, RIDERSHIP AND BUSINESS provide recommendations for land use 2030 Central Corridor LRT ridership and growth post-LRT. Each plan has * projections provided by the Metropolitan market forecasts for 2030, done in Unfortunately this comparison will not allow for evaluation of the Stadium Village and Council will be used to additionally January of 2008, for the station area.7 inform my projections about the business Prospect Park station areas, which are located These plans will be compared with the in Minneapolis.

53 which may impact how LRT affects measures are somewhat standardized Snelling Ave 675,197,617 revenue and expenditures. Also, station across space. Additionally, the data are Hamline 610,247,890 areas overlap, which means that in some most easy to interpret in this format, Lexington Pkwy 347,855,396 cases, block groups are double counted rather than graduated symbols, where it Stadium Village 216,814,341 because they impact two or more station is hard to interpret differences in the Raymond Ave 198,280,447 areas. variables, especially when overlaid by Fairview Ave 168,404,722 It should also be noted that the city of station area buffers. St. Paul’s station area plans do consider a Westgate 158,953,809 Prospect Park 141,406,628 ¼ mile buffer around each station, but do III. WHAT KINDS OF BUSINESSES ARE IN not include the areas of each surrounding Capitol East 119,128,363 block group as in this study. THE CENTRAL CORRIDOR? Victoria 87,303,422 My study does not consider Western 78,807,344 opportunities defined by the built Overall, University Avenue is a major Dale St 77,315,891 environment, which may impact how commercial sales center, earning more Rice St 75,325,023 much new development and business a than 2 billion dollars in sales in 2010, station area might expect. For example, a predominantly in the medium-order The station area with the most retail vacant lot is more likely to undergo sector. The largest earners were north of sales was Fourth St, with revenues over 1 redevelopment than an existing building. the Raymond-Fairview section of the billion dollars. Rice, Victoria, Western, Furthermore, new businesses that need to Corridor, Midway, and Downtown St. and Dale were the lowest, with revenues find a location, either to rent or buy, Paul. These areas are characterized by lower than 100 million. depend on the property owner’s larger and big-box businesses. The Expenditures show slightly different willingness to rent or sell to the business. lowest sales were around the Victoria patterns. The majority of spending occurs Businesses cannot locate wherever they station area, between Lexington and in the block groups around the would like. A consideration of more Dale. This area is characterized by small Downtown St. Paul station areas, specific opportunities would also indicate businesses, including restaurants, Western, Stadium Village, and Prospect where specific kinds of businesses might supermarkets, and other services. Park. However, this measure does not locate and succeed. account for density, so it is possible that Graphically, non-standardized data Station Name Retail Sales, 2010 more people live in these areas. The area are generally not represented in around the Tenth St. station had the Fourth St 1,009,662,454 categories on a map. However, since greatest consumer expenditures Tenth St 778,896,782 census block groups are approximately ($264,276,951), with Rice St. having the the same size of about 1,000 residents, Union Depot 692,384,234 least ($48,810,424). However, when

54 accounting for populations around station opportunity gap measures (see Table 2), areas, Union Depot and Westgate have indicating the commercial nature of the largest expenditures per capita (about University Avenue, and an excess of $15,000 each), while Dale and Western goods for its direct local population. This have the lowest (both less than $9,000). also means that in the future, the Avenue will continue to rely on revenue from residents outside the Corridor, or need to Consumer Expenditures increase population along the Corridor to Station Name Expenditures per Capita support new and existing businesses. Tenth St $264,276,951 $13,000 Stadium Village 176,499,185 13,287 Capitol East 166,206,921 12,655 Fourth St 155,942,341 13,812 Union Depot 132,443,856 15,942 Dale St 126,628,962 8,911 Snelling Ave 117,153,666 11,659 Victoria 109,873,573 9,645 Western 103,970,227 8,583 Prospect Park 95,742,740 13,294 Lexington Pkwy 95,625,050 10,314 Hamline 93,268,514 11,154 Westgate 85,401,504 15,630 Fairview Ave 56,999,392 12,698 Raymond Ave 54,999,315 13,256 Rice St 48,810,424 10,027

The greatest opportunity gap was at Dale ($49,313,071), while Fourth St. had the greatest surplus ($-853,720,113). Only four station areas (Dale, Capitol East, Western, Victoria) had positive

55 56 expenditures, there is a more even high-order sales. There also appears to be distribution of IV. EXAMINING MARKET ORDERS expenditures than retail sales on different order Retail Sales, 2010 goods, indicating a Order of Sales Percent of more diverse need Good Total of goods than Low 179,566,381 7.9 provided along the Medium 1,393,756,333 61.36 Avenue. High 697,997,859 30.73 In many block Total 2,271,320,573 groups, there is a discrepancy The largest portions of sales on between consumer University are from medium-order demand businesses, which highlights the presence (expenditures) and of big box stores, food stores, and food retail supply service institutions. There is a very small (sales). These block groups show percentage of low-order retail sales. a cluster of high-order sales around the opportunity for new investment. Areas However, it is important to keep in mind Dale station. underserved by retail are predominantly that low-order goods are less expensive Interestingly, the breakdown of north of University Avenue, with than medium- and high-order goods. expenditures by market order is concentrations around the Victoria, Dale, consistent across each block group — a CONSUMER DEMAND, 2010 and Western station areas. There is also bit more than half is spent on medium- Order of Expenditures Percent of large opportunity along the western order goods, about a third on high-order Good Total section of the Corridor around Stadium goods, and the rest (about one tenth) on Low 176,497,087 10.36 Village, and in downtown at the eastern low-order goods, matching the general Medium 957,171,761 56.20 end at Tenth St. High 569,421,872 33.43 overall trend of the Corridor (see Figure Medium-order sales predominate in Total 1,703,090,720 3). 25 of 35 block groups. In no block group

do low-order sales predominate. Around While medium-order purchases the Raymond station, there are more predominate in total consumer

57 Low-order comparison to other areas along the expenditures are Corridor. also concentrated Looking at expenditures per capita around the (see Figure 7), residents around Union Downtown Saint Depot spent the most on goods from low- Paul station order businesses ($1,804). Westgate and areas—Tenth St., Fourth were close with about $1,600 Capitol East, and each. The area around the Western Fourth St. station station had the lowest low-order area residents have expenditures per capita of $861. Victoria the three highest and Dale had similarly low figures, both consumer less than $1000. This highlights the expenditures on economic nature of the area, which is goods from low- generally poorer and where residents order businesses (at may have less money to spend on goods. least $18 million), These differences in sales and which might be expenditures create large opportunity explained by the gaps around numerous station areas. All density of downtown and larger of the block groups that surround the LOW-ORDER GOODS There is a concentration of low-order concentration of convenience stores Western station area have opportunity for retail sales around the Snelling, Hamline, there. Stadium Village has similar new low-order goods. Almost the Lexington, Raymond, Westgate, consumer expenditures (slightly less than entirety of downtown St. Paul has Fairview, Snelling, and Prospect Park $18 million), which might also be a opportunity. The block groups north of station areas (see Figure 4). When reflection of density, and also the impact University between Hamline and aggregated, the three station areas with of the University area. There is also a Victoria also have small opportunity for the highest low-order sales are Snelling large concentration in the block group new low-order business. The largest (about $51.5 million), Hamline ($39.5 south of the Westgate to Fairview excess of low-order goods was in the million), and Lexington ($29 million), section. The Rice St. station area had the Raymond and Hamline station areas. highlighting the commercial strengths of least expenditures ($5.5 million), which the Midway area. The low-order good might be explained by lower economic sales were lowest at Western ($890,958). wealth of the residents in the area in

58 Low-Order Opportunity Gaps by Station Area* Station Name Liquor Store High Opportunity Western, Tenth St. Opportunity Gap (> $5 million) Prospect Park $1,026,784 Low Opportunity Fourth St., Capitol East, Capitol East 1,020,802 ($0 > $5 million) Dale, Stadium Stadium Village 936,505 Low Surplus Union Depot, Victoria, Lexington Pkwy 887,859 (- $8 mill < $0) Fairview, Prospect Park, Westgate Victoria 864,980 High Surplus Snelling, Hamline, Rice St 457,175 (< -$8 million) Lexington, Raymond, Dale St 83,108 Rice Median: -$3,016,398 Overall Corridor Liquor Store *These breaks are different from those on the map, Opportunity Gap: -$5,932,450 because this uses aggregated, rather than block group data.

An example of a low-order business, liquor stores, which generate approximately 13 percent of the low- order sector, shows a concentration of sales in the block groups around Downtown St. Paul, particularly Tenth St. and Fourth St., and Snelling ($9 million), followed by Raymond and Fairview. Victoria, Rice, Lexington, and Prospect Park had no liquor sales (see Figure 8). Looking at station areas, seven have positive opportunity gaps, which means that sales of liquor are concentrated in a few specific areas. For example, the Snelling station area has a - $8 million opportunity gap, the lowest in the Corridor, which can most likely be explained by Big Top Liquors located just south of University on Snelling.

59

60

61 62 Fairview. The Tenth St. station area had < -$200,000,000 Union Depot, Hamline, Snelling, Fourth St. MEDIUM-ORDER GOODS the highest medium-order expenditures ($155 million), while the Rice St. area Median: $-40,180,789 Medium-order retail sales *These breaks are different from those on the concentrate in the block groups in and had the least ($28 million). Similar to map, because this uses aggregated, rather than around the Union Depot, Fourth St., and low-order goods, the station areas with block group data. south of University along the Snelling to the most expenditures per capita were An examination of an example of a Lexington corridor. Fourth St. station Union Depot ($9,198) and Westgate medium-order good, food service, which area had the highest sales ($585 million), ($8,486), while the lowest were Western, comprises 32 percent of medium-order followed by Snelling ($556 million) and Dale, and Victoria (between $5,086 and sales in the Corridor, indicates a cluster Hamline ($495 million). $5,578). of sales in the Downtown area. The There are few sales of medium-order This creates high positive Fourth St. station area had the highest goods between Lexington and Capitol opportunity gaps in the Western ($26 food service sales (about $353 million), East, and north of University between million) and Dale ($43 million) station which might be explained by the Fairview and Lexington (see Figure 5). areas. There are also specific block concentration of restaurants around city Dale, Western, and Rice have the lowest groups within Stadium Village, Tenth St. government buildings and hotels. medium-order sales compared to the and north of University from Snelling to Surprisingly, given the strong presence other station areas. This means that Lexington with opportunity for medium- of ethnic restaurants, there are not many medium-order sales are highly order businesses (see Figure 5). The sales in the Frogtown area compared to concentrated in certain areas along the Fourth St. station area had a very large other areas, which may indicate that they Corridor, creating large demand in areas surplus of medium-order goods (-$494 are generating less revenue. The Dale that are underserved by these kinds of million). station areas had the least sales ($8.5 goods. So, while there is a large million) (see Figure 8). concentration of restaurants, food stores, Medium-Order Opportunity Gaps by Station Only two station areas have positive and other small ethnic businesses in the Area opportunity gaps for food service, which High Opportunity Dale, Western means that there is a surplus of Food area east of Lexington, the stores in the >$10 million Midway shopping area are generating Low Opportunity Capitol East, Victoria Service stores throughout the Corridor significantly more revenue. > $0 with the exception of a few places. This Expenditures are highest around Low Surplus Rice, Fairview, indicates that there might be potential for Stadium Village, Prospect Park, Western, < $0 Prospect Park, new Food Service business at Dale and and downtown St. Paul (see Figure 5). High Surplus Westgate, Raymond, Victoria. There is also high expenditure south of < -$30,000,000 Stadium Village University between Westgate and Extreme Surplus Lexington, Tenth St.,

63 The Westgate station area residents Raymond Station Name Food Service spent $5,533 per capita on goods from Extreme Surplus Tenth St., Union Opportunity Gap high-order businesses, the highest in the < -$200,000,000 Depot, Fourth St. Dale St $4,247,871 Corridor. The figure for Union Depot Median: -$26,123,123 Victoria 479,956 *These breaks are different from those on the map, was second highest, at $4,939. Western because this uses aggregated, rather than block Overall Corridor Food Service had the lowest high-order spending per group data. Opportunity Gap: -$159,903,174. capita of $2,636, followed by $2,804 at Dale St. These figures vary from total Examining motor vehicle and parts HIGH-ORDER GOODS expenditures because of differences in dealer sales, which generate 16 percent The majority of high-order sales population between station areas (see of high-order sales along the Corridor occurred in the block groups near Table 5). and are one of the stereotypical Raymond, Fairview, Fourth St., and The largest high-order opportunity businesses of University Avenue, the Union Depot stations (see Figure 6). The gaps are around Capitol East ($36 highest concentrations are in block Fourth St. station area had the most million), Victoria ($19 million), and groups around the Raymond, Hamline, aggregated high-order sales ($410.5 Stadium Village ($15 million), with the and Fairview stations, with high sales million). Including Fourth St., five lowest at Tenth St. (-$205.5 million), around Western and Lexington as well station areas had over $100 million in Union Depot (-$233.5 million), and (see Figure 8). The Hamline station area high-order sales (Tenth St., Union Depot, Fourth St. (-$364 million). This indicates had the highest sales ($42.5 million), Raymond, and Fairview). Rice, Capitol that the downtown area already has a while Stadium Village and Prospect Park East, and Victoria had the fewest, all less strong presence of high-order businesses, had no sales. than $20 million. while other areas, particularly on the Looking at opportunity gap, the Since high-order goods are the most eastern end of University Avenue, which Corridor has a large surplus of motor expensive, there are high expenditures all is characterized by small business, do vehicle and parts dealer sales. The along the Corridor on businesses with not. Raymond station area has the most high-order goods, with the highest surplus (-$34 million opportunity gap) concentrations in downtown St. Paul and High-Order Opportunity Gaps by Station Area High Opportunity Capitol East, Victoria, compared to the other station areas. Stadium Village, particularly the Tenth > $15 million Stadium Village However, nine station areas have positive St. ($79.5 million) and Stadium Village Low Opportunity Dale, Rice opportunity gaps, which means that there ($60 million) station areas. The lowest > $0 is potential for new business in these expenditures were Fairview, Raymond, Low Surplus Western, Prospect areas. Residents in these station areas are and Rice (all at or below $18 million). < $0 Park, Lexington traveling elsewhere to purchase goods High Surplus Snelling, Westgate, from these kinds of businesses. This also < -$30,000,000 Hamline, Fairview,

64 indicates that motor vehicle and parts dealer businesses are spatially concentrated in a few areas along the Corridor.

Station Motor Vehicle and Parts Name Dealer Opportunity Gap Stadium Village $28,822,665 10th St 26,768,220 Capitol East 19,983,134 29th Ave 15,383,048 Union Depot 13,733,628 4th & Cedar 13,699,070 Victoria 6,211,594 Rice St 3,429,244 Dale St 501,005

Overall Corridor Motor Vehicle and Parts Dealer Opportunity Gap: -$15,519,796

65 66

67 V. EXAMINING THE STATION AREAS Corridor, which may indicate the high which might help explain the lack of expenditure of University students and high-order businesses. other area residents on the high his section will examine the T concentration of retail outlets, PROSPECT PARK opportunities at each station area particularly chain restaurants. The Prospect Park station area had an considering sales, expenditures, and The station area has large overall surplus of about $45.6 million, opportunity gaps for general and various opportunity gaps in numerous retail but had high opportunity gaps in general specific business sector trends. I will also sectors. It has the highest opportunity for merchandise ($13.5 million) and non- compare City of St. Paul station area hobby stores (sporting goods, book, and store retail ($7.3 million) indicating that plans for each station and Met Council music stores) ($16.9 million), car there might be potential to serve 2030 LRT ridership projections with the dealership and parts dealers ($28 residents with new business in these opportunity gap measures. Each section million), and non-store retailers ($14.3 sectors. Looking at expenditures per speculates on the kinds of businesses that million) in the study area of the Corridor. capita, the residents in the Prospect Park might locate in the station area. Tables It also has a $23.3 million opportunity station area had slightly more consumer summarizing the data discussed in this gap for general merchandise (such as expenditures ($13,294) than average section can be found after the conclusion department stores), the second highest in compared to other station areas in 2010. section of this chapter. the Corridor. This means that residents This may be representative of the are going elsewhere to purchase these wealthier communities that surround the STADIUM VILLAGE goods, especially high-order goods. station area, in which block groups had The Stadium Village station area has The station area is expecting 970 an average median household income of high numbers of both sales and riders daily by 2030, a low-medium $45,912. expenditures, but an opportunity gap of number, which may have little impact on Ridership levels for 2030 are about -40.3 million, indicating a surplus the success of businesses. However, the estimated at around 950 daily, a low- of sales. The station area had the highest area does have a relatively large medium measure, which may limit how sales on the western end of the Corridor population of about 13,000 that can much new business can occur in this (about $216 million). However, the support a wide array of businesses. The station area. A total population of 7,202 residents in the block groups in this mean block group median household is relatively low compared to other station area had about $176.5 million in income in the area is $38,686, about station areas. With these numbers in expenditures, the second highest in the average for the Corridor. This may mind, there might not be much potential Corridor. Per capita, expenditures were impact what kinds of businesses decide for new businesses in this area. $13,287, higher than the average to locate in the area, perhaps focusing compared to other station areas in the more on low- and medium-order goods,

68 WESTGATE Ridership projections are medium- second-lowest expenditures on the The City of St. Paul sees Westgate as high for this station, about 1,140 riders Corridor of about $55 million. Per capita, an area prime for redevelopment, daily, which may help business expenditures were $13,256, slightly especially since it has already seen much development in this area. The area higher than average for the Corridor. It new high-density condominium currently has a relatively low population did have the highest total building and development. There are many old of about 5,000. If the area sees residential garden supplies sales (about $55 industrial sites and vacant lots that are development as planned, however, the million), which can likely be attributed to good sites for redevelopment. Projections number of residents will increase. the presence of Menard’s. This high of 1,800-2,500 new residential units by Despite its low population, it has high number may also contribute to the 2030 might support more business in the expenditures. Per capita, the Westgate sizable overall retail sales excess in the area. station area spent $15,630. This may be station area. Projections for 2030 also estimate indicative of the wealth of the area with a The station is predicted to have about 700,000 square feet of new office mean block group median household medium-high ridership, about 1,250 space and about 60,000 square feet of income of $54,622, much higher than the riders daily, which in combination with new retail. However, according to the other station areas. new residential development might results of this study, Westgate had a augment expenditures in the area and surplus of sales that exceeded RAYMOND provide opportunity to new business; expenditures in the area (-$73.5 million The City of St. Paul projects much however the results from this study show opportunity gap). growth in office space (about 950,000 that currently, sales far outweigh The Westgate station area did not square feet), but only about 60,000 sq expenditures. The Raymond station area have the most of any specific type of feet of new retail space for the Raymond has only about 4,000 residents, which business opportunity gap along the station area. The City also predicts about may not support much new business. Corridor. However, there was a $10.3 700-1,100 new residential units, which Additionally, the area has only slightly million opportunity gap for general can support more new businesses. higher than average household income, merchandise and a $6.1 million The examination of retail sales and with a mean block group median opportunity gap for non-store retailers, consumer expenditures shows that there household income of $39,578. which means that residents are shopping is not much potential for new retail elsewhere for goods from these kinds of business and in fact there is a sizable FAIRVIEW stores, so there might be opportunity to surplus of about $143 million. This may The Fairview station area is expand in these kinds of businesses in the be due to a strong commercial presence expecting modest residential and Westgate area. at the intersection of Raymond and commercial development, according to University. The station area had the the City of St. Paul, with 600-800 new

69 residential units, 300,000 square feet of new residential units, 300,000 square feet store (not including food service) (more new office space, and 40,000 square feet of new office space, and 450,000 square than $200 million), liquor sales ($9 of new retail. feet of new retail by 2030, much of it million), gas station sales ($48 million) There is a large surplus of retail sales occurring as redevelopment of existing and clothing sales (about $19 million). in comparison to consumer expenditures surface parking in the Midway shopping This reflects the kinds of stores in the in this area (-$111 million opportunity center and the bus yard located just north area, such as Rainbow and Cub Foods, gap). This area has the third-lowest total of I-94 on Snelling. The City’s study area which provide many food options. There expenditures on Corridor ($57 million), was located about a block east of mine, are also numerous large furniture stores, but $12,698 per capita (about average for but is still a comparable area. such as the Furniture Barn. Herberger’s the Corridor), which may not allow Overall, there is a large surplus of and independent clothing stores might opportunity for new business. The station about $558 million (the third highest in explain the high clothing sales. area does not have opportunity for any the Corridor), which shows that the area While there is not much room for specific type of business either. relies heavily on consumers outside of growth in most sectors, there is a $7.6 The station is expected to have the station area to support businesses. As million opportunity gap for non-store relatively high daily ridership (1,900), a large shopping destination, this station retailers, which might indicate some which might be able to support increased generates the highest retail sales in the potential in that sector. Snelling is also business, but the results of this study study area outside of downtown St. Paul. projected to have relatively high show that may not be enough to support There are about 10,000 residents who ridership, 2,930 riders daily, which may new business. Currently, the area only live in the area, slightly more than support increased businesses in addition has about 4,500 residents with a mean average for the Corridor. Per capita, to new residential units. However, this block group median household income of consumer expenditures were $11,659, study shows that the Snelling area is an $33,541, lower than other station areas. slightly lower than the Corridor station overwhelmingly regional shopping area There is also a large portion of elderly area average. The area has a mean block and does not sustain itself from local residents who live in the Episcopal group median household income of expenditures. Future retail development Homes at the intersection of University $38,129, about average for the Corridor. may continue to draw beyond local and Fairview, which might influence Given these economic characteristics, expenditures for profits. spending trends. businesses might not have incentives to expand in this area, or cater to the local HAMLINE SNELLING residents. Similar to Snelling, the City of St. Snelling is an area targeted for much This station area has the highest sales Paul sees development potential on the new development in the Corridor by the in the Corridor in numerous specific excessive surface parking around the City of St. Paul, which expects 800-1,000 sectors—furniture ($9.6 million), food Hamline station area in the Midway

70 shopping center, building on the existing not much room for increased business Lexington and University. Per capita, the strong retail character of the area. opportunities. However, the station area station area has $10,314 of consumer The City of St. Paul predicts 400-600 has a slightly higher than average mean expenditures, slightly lower than the new residential units, 150,000 square feet block group median household income of Corridor station area average, which of new office space, and 150,000 – $39,536 compared to the rest of the might be attributed to a relatively low 200,000 square feet of new retail. The Corridor station areas, which may mean of block group median household Metropolitan Council projects relatively incentivize some new businesses to incomes ($34,200). low ridership (600 daily), so new locate in the area. This station area has the highest businesses may still rely on car opportunity for electronics, with a gap of commuter traffic for customers. LEXINGTON about $2.2 million, which means that Additionally, the area currently has about Lexington Parkway has the lowest expenditures on electronics by residents 8,000 residents, slightly lower than predicted amount of new residential in the area are spent outside of the average for the Corridor station areas. development in the Corridor according to Lexington station area. There is also a Similar to Snelling, the per capita the City of St. Paul (275-400 new units). $6.6 million opportunity gap for non- expenditures are $11,154. However, there is potential for about store retailers, indicating that residents in Overall, the station area has a high 250,000 square feet of office space, and the area are purchasing goods from mail surplus of retail sales (about -$517 90,000 square feet of retail, the third order companies, etc. that are based in million opportunity gap). After Snelling, highest predicted for the Corridor. It is other places. this area has the highest non-downtown anticipated to have low-medium daily retail sales, with a large focus on ridership (930) and has a population of VICTORIA motor vehicle and parts dealers sales around 9,000, which is about average for The City of St. Paul is planning to ($42,408,167), which is the highest in the the station areas of the Corridor. build on the existing small business Corridor. This might be explained by the Overall, the station area has a high nature of the Victoria station area. They presence of Discount Tire, Amigo Tires, surplus of retail sales, with an overall predict a small number of new residential and Midway Used Car Superstore. It also opportunity gap of about -$252 million units (about 300-400), 60,000 square feet has the highest general merchandise sales opportunity, similar to the Snelling and of new office space, and 15,000 retail (about $243 million), which might be Hamline station areas. It has the third square feet, which is very low in explained by the presence of the highest sales outside of the downtown comparison to other station areas. The SuperTarget. area, which can probably be contributed station area is also predicted to have low In no specific business sector did this to its connection with the Midway area, ridership, with about 400 daily trips, and station area see a positive opportunity the Aldi grocery store, and other chain therefore is expected to see only modest gap, which might indicate that there is restaurants at the intersection of growth.

71 The area surrounding the station, development in the Dale station area. including the third highest gap for food however, has a relatively large Their model predicts 450-600 new stores (this does not include food service) population of about 11,000. This may residential units, 50,000 square feet of of about $11 million, which is quite help explain the positive opportunity gap new office space, and 50,000 square feet surprising given the presence of Shuang measure of about $22 million. There are of retail. They expect much of the new Hur and Foodsmart supermarkets. This not many sales in this station area, but a retail to occur in the ground floor of the means that residents are still shopping lot of expenditures, which means that new Frogtown Square development, and elsewhere for their groceries, and may residents must venture elsewhere to make in the potential redevelopment of the venture west to the larger grocery outlets. many of their purchases. Consumer Unidale mall. The Dale area also has a variety of food expenditures per capita, however, are According to opportunity gap service options, but still shows a $4 relatively low ($9,645) in comparison to measures, the Dale station area has the million opportunity gap in this sector. other station areas. This may limit highest opportunity gap on the Corridor Residents are spending money on food business interest in the area. of about $49.3 million, indicating that service outside of the Dale station area as The Victoria station area has the new businesses could fill a void for well. highest opportunity for total building and consumer expenditures that are currently The station area also has highest garden supplies sales (about $9.7 spent outside of the area. Per capita, opportunity for health and personal care million), the third highest opportunity for however, consumer expenditures are (about $7.8 million), a $17 million health and personal care (about $5.2 quite low in the station area at about general merchandise opportunity gap, million), and a $17.1 million opportunity $8,911, the second lowest among station and a $2.3 million gap for sporting in general merchandise, which includes areas. This might be explained by its goods, hobby, book, and music goods. department stores. The economic relatively high population of about This means that there is potential for a character of the residents in the station 14,000, the second most in the Corridor. wide array of business to open in the area, indicated by a $39,062 mean block Additionally the area has a mean block station area that can be supported by group median household income, is group median household incomes expenditures by residents, including slightly higher than the average of station ($38,494), about average compared to more food stores and food service areas along the Corridor. Therefore there other station areas. The Met Council institutions. might be potential for new businesses to predicts low-medium ridership at this open in this station area. station area, with about 710 daily riders, WESTERN which may limit business potential for The Western station area has some DALE this area. locations that the City of St. Paul has The City of St. Paul is expecting The station area also has high identified as potential redevelopment modest commercial and residential opportunity gaps in various retail sectors, sites that are currently vacant or

72 underutilized. They anticipate modest Per capita, consumer expenditures The residents around this station area growth, with ―new investment focusing were $8,583 in the station area, the have very little aggregate expenditure of primarily on retail and services to meet lowest in the Corridor, which might be less than $50 million, which is the lowest the daily needs of the surrounding partly explained by the relatively low on the Corridor. They also have a low neighborhood.‖ They anticipate 450-600 mean block group median household expenditure per capita ($10,027). There new residential units, 45,000 square feet income of $36,440. Therefore, residents is therefore an excess of retail sales for of new office space, and 20,000 square in the area do not have much spending the local population, highlighted by the feet of new retail. The Met Council power, which may hinder new business -$26 million opportunity gap. Going by predicts very low ridership of 270 daily development, especially those that sell this measure, there is almost no potential riders for this station area, however the more expensive goods. for new retail development in this station area houses about 12,000 residents, area that can be supported by local which is relatively high for the Corridor RICE residents. There were also no individual station areas. The Sears building dominates the sectors with noteworthy opportunity gaps Due to its residential nature, there are business around the Rice station area. for potential business. Furthermore, it is many more expenditures than sales in the The City of St. Paul sees the Sears site as one of the poorest station areas in the area, which means that there is relatively a major redevelopment area, especially Corridor, with a mean block group high opportunity of about $25 million. It on the extensive existing surface parking. median household income of $31,933. has the highest opportunity for furniture Therefore, they predict 1,000 new These facts show that new retail stores, with a gap of about $1.8 million, residential units, 800,000 square feet of development is unlikely. and the second highest opportunity for new office space, and 100,000 square both health and personal care (about $6.1 feet of new retail space. They believe CAPITOL EAST million gap) and gas stations (about $8.9 much of the new retail will cater towards The Capitol Area Architectural and million gap). There is also a large the workers at nearby government Planning Board (CAAPB) does the opportunity for sporting goods, hobby, functions around the state capitol. A planning for this station area; therefore book, and music goods of about $2.1 medium-high daily ridership of about there is no station area plan done by the million and an $11.8 million gap for 1200 might help support new businesses. City. The relatively low ridership general merchandise. This means that for However, there is a small residential predictions of 390 riders daily also would may different goods, residents around the population of about 5,000, significantly support limited economic development. Western station area are shopping lower than the average for other station However, there is an above average elsewhere. There might be potential for a areas, which may not be able to support residential population (about 13,000) wide array of new businesses to build on much new business unless the increases compared to the rest of the Corridor. the existing small businesses in the area. in residential units come about.

73 There is a high positive opportunity of new office space, and 100,000 – highest expenditures in the Corridor, gap for the station area of about $47 150,000 square feet of new retail, which which can be attributed to the density of million, the second highest in the will be driven by residential expansion. downtown. For example, Tenth St. has Corridor. It has the highest opportunity The Met Council predicts that these the highest expenditures in the Corridor for clothing stores (about $7.1 million areas will have high ridership, with about of about $264 million, but the second gap) and general merchandise (about $24 5,180 aggregate riders for all three most sales in the Corridor. Due to the million gap), the second highest stations (1,860 at Tenth, 1,200 at Fourth, high expenditures, the downtown station opportunity gap for sporting goods, and 2,120 at Union Depot). Aggregate areas have an overall surplus of sales. hobby, book, and music goods in the total population is almost 40,000 with a Considering population size, Union Corridor (about $2.6 million), a $19 per capita consumer expenditure of Depot has the highest per capita million opportunity gap for food stores, $13,842, higher than average for the consumer expenditures in the Corridor of and a $7.5 million opportunity gap for Corridor. $15,942, which means that residents in non-store retailers. The per capita Overall, the retail sales far exceed downtown have high expenditures in expenditures are about average for the consumer expenditures in these areas. comparison to other places. Interestingly, Corridor ($12,655) and could potentially Each station area has about $700 million all three stations have at or below the support new businesses. This is in retail sales, and an opportunity gap of average mean block group median interesting though because the area has a less than -$500,000,000. Union Depot household incomes in comparison to the relatively low mean median household and Fourth St. have the highest surpluses rest of the Corridor (between $31,540 income of $32,596, which would make in the Corridor. This is a result of the fact and $37,982), which means that there are one think that there would not be that many people who shop in downtown high expenditures despite relatively low potential for new business. The do not live there and it serves as a major or average economic resources. opportunity gaps, however, indicate a retail and business center for the city and The Tenth St. station area has the potential for a wide array of new the metropolitan region. highest health and personal care sales in businesses. Therefore, without new residential the Corridor of about $54.5 million, development, there may not be room for which can be explained by the DOWNTOWN STATION AREAS (TENTH ST., new retail business because there is concentration of hospitals in downtown. already a large concentration of retail. Tenth St. also has high opportunity for FOURTH ST., AND UNION DEPOT) However, the area could continue to be a car dealership and part sales—about The downtown station areas have visitor shopping area and support new $26.8 million—the second highest in the large economic development potential. business. Corridor. This station area also has the The City of St. Paul predicts 5,750 – While these stations do have surplus highest need for food stores, with an 7,200 new residential units, somewhere retail sales, they also have some of the opportunity gap of about $20 million. between 1.9 and 2.3 million square feet

74 The downtown area lacks supermarkets VI. CONCLUSIONS FUTURE RESEARCH CONSIDERATIONS and these data indicate that there are There are a wide variety of factors sufficient local expenditures on food that need to be considered in determining ooking at overall opportunity gap store goods to support a new business. L business potential, and this study The Fourth St. station area has over along the Corridor, there is room for examines just some of the ways to $1 billion in sales, the highest in the growth at four station areas: Dale, predict changes in businesses in the Corridor, but only about $150 million in Capitol East, Western, and Victoria, Central Corridor around station areas. It expenditures, which may indicate a huge considering total consumer expenditures will be important to review these data in opportunity for residential development and retail sales from 2010. However, the future both during and post-LRT around retail amenities. However, there these stops have some of the lowest 2030 construction to see what the impacts are is the lowest opportunity gap for ridership projections in the Corridor (all on businesses and consumer businesses in the Corridor. The station under 710), which may limit their expenditures. We then will be able to see area has the highest electronics sales economic development potential. Despite if areas with high opportunity gaps saw (about $71 million), non-store retail sales this fact, all four stations have relatively more development to increase supply of ($383 million), and food service sales high residential populations that might the various orders of goods. ($353 million) in the Corridor, support new businesses. Instead of Unfortunately the data did not maintaining its regional retail consuming elsewhere, residents may include all stations of the Central importance. spend locally if there are amenities that Corridor, which was a limitation for Both Tenth St. and Fourth St. had meet their needs. comparison across all parts of the LRT high opportunity gaps for gas stations Considering the different market line. It would be interesting to see (gap of about $10.6 million and $8.2 orders for businesses, there is high comparisons with the area around the million, respectively), which can likely opportunity for businesses with low- University of Minnesota and Downtown be explained by the higher density in order goods at the Western and Tenth St Minneapolis. It might also be interesting downtown, where residents are less station areas. Dale and Western have the to divide the Corridor up into sections likely to need a car. Light rail will further most potential for business opportunities based on character of areas, since many decrease the need for a car, therefore for medium-order goods. New high- station areas overlap. For example, there might not be much actual order business have the highest business activities are very similar opportunity for new gas stations. opportunities at the Capitol East, around the Snelling and Hamline station Victoria, and Stadium Village station areas, connected by the Midway areas. shopping center, while the Victoria to Western section is characterized by small businesses.

75 TABLES

TABLE 1- GUIDE TO OPPORTUNITY GAP MEASURES TABLE 2 - STATION AREA SALES, EXPENDITURES, AND OPPORTUNITY GAP Low-Order Goods Station Retail Consumer Opportunity High Opportunity $2,500,000 – 5,132,962 Sales Expenditures Gap Low Opportunity 0 – 2,500,000 Stadium Village 216,814,341 176,499,185 -40,315,156 Low Surplus -6,000,000 – 0 High Surplus -14,765,071 - -6,000,000 Prospect Park 141,406,628 95,742,740 -45,663,888 Westgate 158,953,809 85,401,504 -73,552,305 Medium-Order Goods Raymond Ave 198,280,447 54,999,315 -143,281,132

High Opportunity $3,000,000 – 9,650,937 Fairview Ave 168,404,722 56,999,392 -111,405,330 Low Opportunity 0 – 3,000,000 Snelling Ave 675,197,617 117,153,666 -558,043,951 Low Surplus -25,000,000 - 0 Hamline 610,247,890 93,268,514 -516,979,376 High Surplus -165,000,000 – -25,000,000 Lexington Extreme Surplus -204,121,003 – -165,000,,000 Pkwy 347,855,396 95,625,050 -252,230,346

High-Order Goods Victoria 87,303,422 109,873,573 22,570,151

High Opportunity $6,000,000 – 16,302,501 Dale 77,315,891 126,628,962 49,313,071 Low Opportunity 0 – 6,000,000 Western 78,807,344 103,970,227 25,162,883 Low Surplus -65,000,000 - 0 Rice St 75,325,023 48,810,424 -26,514,599 High Surplus -127,783,249 – -65,000,000 Capitol East 119,128,363 166,206,921 47,078,558 Extreme Surplus -127,783,249 Tenth St 778,896,782 264,276,951 -514,619,831 Overall 1,009,662,4 Fourth St 54 155,942,341 -853,720,113 High Opportunity $9,000,000 – 18,872,851 Union Depot 692,384,234 132,443,856 -559,940,378 Low Opportunity 0 – 9,000,000 Low Surplus -95,000,000 - 0 High Surplus -295,135,261 – -95,000,000 Median 183,342,585 106,921,900 -92,478,818 *All amounts in 2010 dollars Median 339,749,023 117,740,164 -222,008,859 *All amounts in 2010 dollars

TABLE 3 - OPPORTUNITY GAP BY ORDER TABLE 4 - EXPENDITURES PER CAPITA BY ORDER

Station High-Order Medium-Order Low-Order Station Low-Order Medium- High-Order Order Stadium 15,190,970 -56,676,365 1,170,239 Stadium Village 1,350 7,411 4,525 Village Prospect Park 1,315 7,415 4,565 Prospect Park -12,044,804 -28,140,506 -5,478,578 Westgate 1,611 8,486 5,533 Westgate -32,135,453 -35,803,571 -5,613,281 Raymond Ave 1,470 7,442 4,344 Raymond Ave -90,650,142 -44,558,007 -8,072,983 Fairview Ave 1,419 7,196 4,083 Fairview Ave -83,218,549 -23,893,070 -4,293,711 Snelling Ave 1,282 6,705 3,672 Snelling Ave -30,638,045 -488,860,009 -38,545,897 Hamline 1,197 6,412 3,545 Hamline -45,833,431 -441,740,194 -29,405,751 Lexington Pkwy 1,073 5,982 3,260 Lexington -21,608,200 -211,692,467 -18,929,679 Victoria 951 5,578 3,115 Pkwy Victoria 19,221,982 5,087,254 -1,739,085 Dale St 873 5,234 2,804 Dale St 4,505,942 43,082,118 1,725,011 Western 861 5,086 2,636 Western -11,275,830 26,904,465 9,534,248 Rice St 1,144 5,787 3,096 Rice St 1,431,738 -20,470,843 -7,475,494 Capitol East 1,401 7,378 3,875 Capitol East 35,957,004 8,455,215 2,666,339 Tenth St 1,484 7,604 3,911 Tenth -205,573,105 -316,506,879 7,460,153 Fourth St 1,604 8,085 4,123 Fourth -363,937,274 -494,211,672 4,428,833 Union Depot 1,804 9,198 4,939 Union Depot -233,569,424 -325,173,718 -1,197,236 Median 1,333 7,287 3,893 Mean Median -65,886,039 -150,262,391 -5,860,430 1,302 6,937 3,877 *All amounts in 2010 dollars Mean -26,123,123 -40,180,789 -3,016,398

*All amounts in 2010 dollars

77

TABLE 5 – DEMOGRAPHICS

Station Total Mean Median Families Below Population Household Income* Poverty Stadium 13,284 $38,686 283 Village Prospect Park 7,202 45,912 280 Westgate 5,464 54,622 81 Raymond Ave 4,149 39,578 136 Fairview Ave 4,489 33,541 165 Snelling Ave 10,048 38,129 622 Hamline 8,362 39,536 550 Lexington 9,271 34,200 595 Pkwy Victoria 11,392 39,062 608 Dale St 14,210 38,494 876 Western 12,114 36,440 763 Rice St 4,868 31,933 287 Capitol East 13,134 32,596 598 Tenth St 20,329 31,540 568 Fourth St 11,290 33,083 123 Union Depot 8,308 37,982 38

Median 9,660 38,056 419 Mean 9,870 37,833 411 *Since block group median household income levels were aggregated to a station level, an average of the medians was taken to gain a sense of overall household income for the station area. Value is 2010 dollars.

78

7 REFERENCES Delaney, Will. LRT Station Location and Configuration: Impacts and Implications 1 for Development along the Central Weinberger, Rachel. Commercial Property Corridor. University of Minnesota Center Values and Proximity to Light Rail: for Urban and Regional Affairs. Calculating Benefits with a Hedonic Price Presentation to the District Councils Model. Transportation Research Board, th Collaborative of Saint Paul and Presented at 79 Annual TRB Meeting, Minneapolis. (2007). Washington D.C., (2000): January 9-13. 8 2 Department of Planning and Economic Debrezion, G., Pels, E., & Rietveld, P. The Development, City of Saint Paul and Impact of Railway Stations on Residential Urban Strategies. Central Corridor Station and Commercial Property Value: a Meta Area Plans. Central Corridor Analysis. Tinbergen Institute. (2004). Development Strategy. (2007). 3 Brinckerhoff, Parsons. The effects of rail transit on property values: a summary of studies. Project 21439S, Task 7, NEORail II, February, Cleveland, OH. (2001) 4 Hoenack, S. (Professor). S. Agnew, P. Baum, M. Croaston, A. Janzen, E. Jerabek, B. Jorgenson, A. Senn, and J. Yang. The Potential Impact of Central Corridor LRT on Existing University Avenue Businesses. University of Minnesota Humphrey Institute. 2010 Master of Urban and Regional Planning Capstone 5 Kreig, Alexandre. The Impact of Light Rail Construction on Neighborhood Business Activity in the Rainier Valley, Seattle, Washington. University of Florida. (2009). 6 Metropolitan Council of the Twin Cities Area. Central Corridor Environmental Impact Statement. (2009).

79 iv. NIGHTTIME:

Informal Economies and Street Prostitution

by corey koscielniak & sarah ziegenhorn

This Chapter’s Questions:

1. What is the current state of University’s nightlife economy and street-based prostitution?

2. How do informal economic transactions inform

the nighttime economy of University?

3. How has the Avenue been constructed as a place of prostitution? How will the development of LRT affect prostitution?

Chapter Outline: I. The Formal & Informal Economy II. Prostitution III. Potential Effects of LRT on Informal Economies IV. Conclusion I. THE FORMAL & INFORMAL ECONOMY as lewd, violent acts brought about as a movement at all. It is important to result of intoxication. realize that the degree of nightlife In order to fully understand how varies among streets, neighborhoods When studying a nighttime an economy functions at night, it is and cities in general. economy, there are many variables to important to consider these social Moreover, although the consider. First, to procure resources is stereotypes. However, scholars Marion economic utility of nightlife is the difficult, since academia does not often Roberts and Adam Eldrige posit that primary way in which it is studied, late- engage the topic. The nighttime “there is no singular night-time or night work involves various economy, encompassing the specific evening economy, but rather a number occupations and can revolve around economic transactions that occur at of different economies running side-by- functions like cashiers, late-night gym side, in support or opposition to each attendants, bartending, call-centers, and night, become secondary considerations 38 as studies focus on the topic of daytime other . They suggest that there is more store packers. In addition, it includes activities and other, considerably more to the nighttime than purely vice and informal forms of work. Drug-dealing, crucial subjects. Clubs, bars and crime. There is not one particular type stealing, and soliciting occur in this restaurants usually come to mind as of night-time economy. The economic time-space activity. However, the full possible sites of research for the and commercial functions of the city socio-economic impact of the latter has nighttime economy, yet often informal are fundamental to the development of yet to be studied as it relates to the markets remain unstudied or the contemporary late-night city, but overall nighttime economy. disconnected to the literature. This the ways it is inhabited, what it means This chapter intends to analyze chapter will examine the presence of and what people „do‟ is far more than night-time economic utilities as they nighttime economic sectors on the just a simple economic relation. affect the nighttime landscape. Due to current site in University Ave. Therefore, we encourage our readers to the limitations of data on informal In the occidental world, expand their preconceived notions of economic transactions at night, we will nighttime has operated under the guise such topics and to consider the focus on the association between the of a socially-imposed stigma– that economic and social utilities of formal alcohol-related economy and the humans search for fear or pleasure as a nighttime behavior. informal one of crime and vice. primary characterization of this period. Night-time economies can Prostitution, drug use, theft and Nighttime operates as the setting where range from bustling club, theater and drunkenness involve a certain degree of crime and vice emerge. Prostitution, restaurant districts to stand alone economic utility; therefore, we argue drug use and theft occur at night as well diners, 24-hour convenience stores or that they contribute to the nighttime even the absence of any commercial economy. One can measure some

81 components of these interactions automobiles). Second, narcotic drugs the data supplied by the St. Paul Police through statistical analysis, but other deals with all drug-related charges: Department, we matched the crimes to aspects remain immeasurable – such as selling cocaine, marijuana, an aggregate “neighborhood” scale their socio-economic and geographic methamphetamine, and/or Demerol or based on Census block groups. These impacts on surrounding communities. possession of such drugs or narcotic block groups are divided into five We will investigate the paraphernalia. The third category is areas: Downtown North/Capitol, Rice assumption that informal nighttime comprised of reports of prostitution, to Western, Lexington, activities affect the nighttime economy. commercial vice, promoting or Midway/Snelling and Fairview. We To commence, we posit the following soliciting such acts, and loitering with believe using such a neighborhood research question: how do informal intent to solicit. Finally, the fourth scale minimizes the degree of economic activities contribute to the category examines theft-related locational fallacy, because the location nighttime economy of University Ave? occurrences to the respect of burglary of a crime and the location where it was with forced entry, highway robbery, reported are not necessarily the same METHODS automobile theft (under $500 and over location. However, we assume that $1000), theft under $500, theft over such crimes do happen near the vicinity $1000, pickpocketing under $500, and of each other, especially at o investigate our research question, T theft from automobile. intersections, near or outside alcohol we will analyze crime statistics Using the Nielsen-Claritas data establishments, taxi stands or other supplied by the Police Department of from the year 2010, the above public transit stations. Saint Paul. Crime data are based on categories are spatially analyzed to After observing the number of street blocks on University Ave. Only uncover a causal correlation with recorded crimes in the four economic crimes that occurred between nine business establishments that sell crime categories, we conducted a o‟clock PM and six o‟clock AM will be alcoholic drinks or packaged liquor, correlation analysis to show simple considered. Four crime categories have beer and wine. These data are correlation between total volume of been chosen to represent four informal aggregated on a Census block group sales of alcohol and crime for the five economic transactions. First, crimes of level and are categorized by the 2010 neighborhoods. Our findings show that drunkenness represent reports of such gross market demand. In other words, a spatial correlation between the gross drunkenness, lewd behavior (urinating the data illustrate the 2010 gross sales sales of alcohol and the presence of in public), and liquor law violations attributed to the purchase of alcohol three of the four crime categories exists (including minor possession, drinking from establishments in those particular to a statistically significant degree in public, and open containers in Census block groups. Upon examining (with a 95% confidence level).

82

RESULTS results, especially the prostitution prostitution in order to understand how category, further research should this informal sector of University‟s illustrate the correlation among nighttime economy operates. Drawing his measure illustrates the degree of T variables – meaning if there is a strong from extensive qualitative research, we relationship between the presence of presence of one type of crime, is there a will explore the details of this sector crime and total alcohol sales per strong presence of other crimes as later in this chapter. neighborhood. well? As a result of prostitution‟s lack Correlation w/Volume According to our results, crimes of correlation with alcohol sales and of Alcohol Sales of drunkenness, drugs and theft are all with the other criminal categories, we Drunkenness 0.646 related to each other. More importantly, have excluded this variable from the prostitution shows almost no remainder of our quantitative analysis. Narcotic Drugs 0.339 correlation with the other variables, Prostitution -0.201 meaning that this informal economic Our correlation results signify that if Theft 0.655 transaction does not spatially operate in you were to identify the location of one 0.583 the same manner that the other three of these crimes, there is a high Total crimes do. As a result of this analysis, probability that the other two crimes Crimes of drunkenness are positively we can theorize that prostitution on will both have occurred in the same correlated with the volume of alcohol University Avenue is bound by a set of vicinity. In other words, these three sales, meaning that where there are spatial characteristics that significantly informal economic activities are close more drunkenness crimes, there are Correlation Among Variables substitutes along the also higher volumes of alcohol sales. Drunkenness & Drugs 0.87199 strong positive correlation University Central For narcotic drugs, the correlation is Drunkenness & Theft 0.93607 strong positive correlation Corridor. positive, but slightly weaker. Theft Drunkenness & -0.1212 weak negative correlation stands out as the strongest positive Prostitution UNDERSTANDING AND correlation. Prostitution appears to have Drugs & Prostitution 0.1681 weak positive correlation ASSESSING VALUE TO a negative correlation, meaning that Drugs & Theft 0.93063 strong positive correlation where there is a significant presence of Prostitution & Theft 0.02954 weak positive correlation INFORMAL ECONOMIES this crime, there is not much in the area differ from the ones pertaining to for alcohol-related establishments. drunkenness, drugs and theft. There are many ways of assessing the Because these particular Therefore, it is necessary to value of a good, service or real property variables showed some surprising interrogate the spatial aspects of that do not require complex

83 mathematical equations nor elaborate these crimes. This rough assessment of University at night, with respect to understandings of price variances at consumer demand in the area for activities that informally occur. each level in a good‟s commodity alcohol has a correlation with drugs and Furthermore, if we could attain chain. As a final step to our statistical theft – meaning we can estimate a information on how many of these approach to University‟s nightlife measure of drug and theft transactions actions do get reported, we would have economy, we will illustrate the possible on University. To do this, we will take a better estimate of the total volume of economic utility of the narcotic drugs the degree of correlation between each utility. market and the theft market. This variable and volume of alcohol sales For instance, if narcotic drugs measure is based on our previous and multiply by the total worth of transactions reported as crimes correlation data and uses the principle alcohol sales: comprise 20% of the total volume of of substitution: whereby entities that this market, then the above number possess a high correlation to each other Drugs: .34 x $9,531,712 = $3,240,539 represents only 20% of the total volume can be easily substituted for each other. Theft: .65 x $9,531,712 = $6,246,580 of the drug market on University. This analysis is often used as a However, this type of information valuation tool in real property analysis These numbers give us a rough would necessitate recording every drug – where a value of property is attained estimate of the market utility (in transaction that occurs on University. by the value of other close substitutes42. dollars) of drugs and theft on As these transactions are informal in In our understanding of the University based on the value of the nature and illegal in law, this kind of correlations among variables, we can total sales of alcohol for 2010, and they information is not attainable. deduce that crimes of prostitution have offer the reader a way of thinking about Our statistical analysis does not little to no relationship with crimes of informal nightlife activity as a source address the impact of prostitution on drugs, drunkenness and theft. However, of income and consumer demand. the nighttime economy. As researchers, we can say the latter three possess high There are several problems with we observe and believe there is a correlations with each other. Through this style of assessing value; it ignores significant presence of prostitution on the principle of substitution, we can price variances among items as well as the Avenue. Therefore, we further appraise a rough estimate of their gross social and geographic differences. It is interrogate this issue through value on University Avenue. also based in the value of total sales of qualitative measures of this crime as it By correlating the occurrence of alcohol, and does not measure the occurs on University crimes to the total sales of alcohol, we variances found within the drug and attempt to capture an economic theft markets. However, it is useful in understanding of the total utility of estimating the total economic utility of

84

85

II. PROSTITUTION extensively studied. Existing research However, this definition is somewhat focuses on the health and sociological arbitrary – it is meant to apply to sex experience of individual prostitutes. workers who solicit customers or are Prostitution is an informal economic Little research has considered solicited on the street, but not activity that is present in Saint Paul, yet prostitution at a larger, community exclusively. This chapter focuses it remains invisible, unknown, and scale. While a very small body of specifically on female prostitutes ultimately shocking to many research has focused on the way in because these women are more likely to community members. From the which red-light landscapes are created1, work in street prostitution in St. Paul quantitative analysis above, we have very few have examined the way in than men. In order to study street seen that prostitution cannot necessarily which these landscapes are impacted by prostitution, it is necessary first to be understood from a statistical urban development and neighborhood- understand trends in this type of sex approach. This study seeks to describe level change. Furthermore, to the best work. Patterns in female street this poorly understood economic of our knowledge, there have been no prostitution found in the literature can sector, ultimately reducing invisibility academic studies of sex work and then help to contextualize street and improving public understanding. prostitution in Saint Paul, and studies prostitution along University Ave. From this point, we pose the question, of Minneapolis prostitution have been Academics have suggested that how has University Avenue emerged as fairly limited. Finally, it is important to street prostitution is often best a space in which prostitution can note that researching prostitution is characterized by the oppression occur? To address this question, we inherently difficult given issues of paradigm, and that this form of sex consider economic and transportation illegality, and the hidden and work is inherently more violent than developments in the second half of the 3 2 th stigmatized nature of sex work . other forms . Street prostitution is 20 century along University. We then strongly linked to drug dependency and discuss current intra-spatial and inter- FEMALE STREET PROSTITUTION poverty. Many women engaging in this spatial patterns of street prostitution. type of work do it for survival, Finally, we consider prostitution as a financial independence, and upward his study focuses specifically on 2 larger feature of the nighttime economy T mobility . Women may enter sex work and examine its unique relationship to female street prostitution. This type of to support a drug addiction, but women other features of the informal economy. sex work is inherently more visible are also more likely to enter this type of It is important to recognize that than indoor sex work and thus work if they come from a family or prostitution, especially as a feature of potentially plays a greater role in neighborhood environment where the informal economy, has not been shaping the perceptions of places. prostitution and drug use are

86 normalized2. Street workers are also sexual slavery. This has included an from North Minneapolis more likely to be victims of rape, emphasis on trafficking networks, child neighborhoods, but men who solicit assault, and robbery2. Violence is a prostitution, Native American women, women come from other key feature of this type of work, and and communities of recent immigrants neighborhoods, suburbs, and out of street prostitutes often take measures to (particularly the Somali community)4,5. state7. Key to note is that prostitution reduce their risk and to control the However, street prostitution has is gradually moving away from the space in which they work1. One received relatively little attention from street level and is increasingly based method to exercise this type of control the news media, as well as academics. online8. Through the Internet, women is to perform the sex act in public. This is due in part to the connotation are able to create more business in a Further, women prefer to stay within and definition of the words prostitution safer manner. the neighborhood (or red-light district), and trafficking. While trafficking in part to limit the amount of time each implies victimization and force, METHODS sex act takes and increase their profits. prostitution implies that a woman While women seek places to take their chooses to be involved in sex work6. his chapter intends to apply a clients that are out of sight of the public This chapter chooses to use the word T and the police, these places are not so prostitution simply because the legal polymorphous framework to its secluded that assistance could not be definition of trafficking means to have examination of prostitution. This obtained if necessary1. Finally, the been moved across state or national theoretical approach is relatively literature suggests that prostitutes borders. This chapter is more moderate in that it does not see frequently do not work in the concerned with prostitution as a form prostitution as inherently violent or neighborhoods in which they live in of work, and sex as a sector of the inherently empowering. Instead, it order to protect their privacy and keep informal economy. attempts to resist generalization of sex their stigmatized work secret1. Academic research into street work and prostitution experiences. It prostitution in the Twin Cities is also intends to resist making value judgments regarding sex work2. This PROSTITUTION IN MINNESOTA limited and has focused primarily on theoretical perspective can be expanded North Minneapolis. In North Minneapolis, the majority of street upon and applied to our general study n recent years, prostitution in I prostitution and solicitation occurs at of informal, illegal economic Minnesota has been brought to public bus stops and abandoned houses7. transactions. We do not assume these attention by a small body of news Studies have suggested that women economies to be inherently negative articles focusing on “trafficking” and engaged in street prostitution come

87 because of their illegality, nor do we Breaking Free, was a life-long way to move cars between downtown assume these activities to be positive. community member, and could speak Minneapolis and Saint Paul more Qualitative data were gathered on informal and illegal economic efficiently, Interstate-94 was through three expert interviews with activity from personal experience. constructed along St. Anthony Avenue individuals representing three different to run parallel to University Ave15. organizations. These interviews lasted CREATING SPACES OF PROSTITUTION: I-94 led to a decreased amount between one hour and three hours. An HISTORY OF SEX WORK ON UNIVERSITY of automobile traffic along University, initial interview was conducted with a which led to a dramatic decline in Saint Paul Police Department Vice “Red-light landscapes as emerging from (and business during the 1960s and 1970s. Sergeant who directs the prostitution produced by) an ongoing and recursive As drivers traveled along I-94 to travel and trafficking task force and formerly relationship between the 'everyday' spatial between St. Paul, Minneapolis, and the worked for ten years as a street behavior of sex workers and the spatial growing suburbs, University Avenue‟s strategies enacted by the state, law, and supervisor patrolling University latterly, community protest groups1." traffic volume decreased. With that Avenue. A second interview was decrease, fewer people frequented conducted with an intake specialist at businesses along the Avenue, and the Breaking Free. Breaking Free is an University has the greatest economy along the street began to organization located on University concentration of street-based decline15. Avenue that “Educates and provide prostitution in Saint Paul and is clearly As a strategy to combat services to women and girls who have recognized as a place where sex can be economic decline, University Avenue 6,11,12 been victims of commercial sexual bought and sold. It possesses a businesses became involved in the sex exploitation (prostitution/sex- high supply and demand for sex. It is industry. When discussing the creation trafficking) and need assistance necessary to examine the history of the of University as a place of prostitution, escaping the violence in their lives9.” street since 1960 in order to understand two experts cited the Faust Theater as a Finally, a program director from the how this current landscape emerged. key turning point in the street‟s history. Aurora-Saint Anthony Neighborhood Until 1960, the formal The Vice Sergeant discussed the Faust, Development Corporation (ASANDC) economic sector on the Avenue was Belmont, and Flick – the latter two was interviewed. ASANDC is a profitable and successful. By 1960, car being strip clubs – and attributed these community organization that does work ownership had increased significantly places as the reason for University‟s related to crime prevention and and traffic congestion was problematic reputation as a place of sex and as the affordable housing10. The interview along University Avenue. Looking for reason prostitutes were drawn to the participant had formerly worked for an alternative to this congestion and a Avenue11. An expert from ASANDC

88 remembers these businesses from his in other types of crime.11,12 The sex stated that two to three women could be childhood, and remembers University industry was unrelated to violent crime seen on every street corner along the being home to a large number of “sex along the Avenue. Our earlier Avenue on any given day, at any time. clubs, bars, and pornographic stores” in quantitative analysis suggests that there However, it is now considerably harder the 1980s12. This expert described the is currently no spatial relationship to find women selling sex. While it is business of sex as being operated by between prostitution and other types of still a noticeable occurrence on a daily and for suburban, heterosexual male vice. In the past, we see that this basis, the amount is much more scarce communities to engage in these relationship has been observed than in the past12. clandestine activities. Furthermore, qualitatively as well. Street prostitution on University this activity did not involve the Avenue displays spatial patterns and is residents of University Ave CURRENT STATE OF STREET PROSTITUTION concentrated heavily in specific places. 12 communities . ON UNIVERSITY AVENUE All interview participants stated that In the late 1980s, University prostitution was concentrated along the had secured a reputation as a sex Avenue between the state capitol and destination. During these years, the University Avenue has the greatest Lexington Ave, with some prostitutes businesses were closed due to pressure concentration of street prostitution in working as far west as Snelling Ave6, 11, from community organizations, such as St. Paul and one of the highest 12. In Figure 3, prostitution arrests are ASANDC12 and the actions of the city concentrations in the Twin Cities metro mapped along University Avenue. 11 government15. Yet even after these area . According to arrest data from Several arrests extend to the east of businesses were closed, University‟s the Saint Paul police, there were 60 Snelling Avenue, but the majority are reputation as a place of sex remained.11 prostitution-related arrests in 2010 concentrated between Snelling and the Throughout its history on along University Ave. In St. Paul, Capitol, with the highest concentration University Ave, prostitution was not Payne Ave. has the second highest seen between Dale Street and the related to other businesses on the concentration of prostitution, followed Capitol. Arrest data indicate that 11 Avenue nor other informal and illegal by Rice Street . Depending on season prostitution occurs primarily at major economic activity. According to our and weather conditions, there may be intersections and stoplights. However, experts individuals who came to the six to eight women working on police officers indicate that women street from outside the neighborhood to University each day, while other days usually walk up and down several 11 purchase sex were not necessarily no women may be present . In the blocks and attempt not to stand in one involved with other sectors of the past, prostitution has been much easier spot for too long in order to avoid informal economy and were uninvolved to find. Ten years ago, one interviewee police attention. While past research

89 has suggested that women congregate protective mechanism, allowing women working as a patrol officer along the at bus stops, this appears to be a to establish methods of communication Avenue, he had not once seen or strategy for avoiding police interaction regarding safety from potential Johns arrested an Asian woman11, 12. This and not related to increased traffic and and police11. finding does not correspond with sex opportunity for soliciting11. Women working in prostitution work literature, which has found that Spatial patterns exist in along University are typically between neighborhoods of Southeast Asian University Avenue-based street the ages of 17 and 506, 11, 12. These immigrants in the U.K. and U.S. often prostitution as women move to seek out women often enter prostitution between display high concentrations of sex customers and places for transactions to ages 12-14, are frequently runaways, workers1,2,14. Other experts stated that occur. Intra-spatial and inter-spatial and have experienced intense childhood a lack of Asian women arrested for patterns can be observed. We posit that sexual abuse6. These characteristics fit prostitution does not mean that women an intra-spatial network occurs when into larger studies of prostitution and from these communities are not sex workers interact with other sex street-based sex workers2. Prostitutes involved in prostitution6,12. They workers. The inter-spatial network along University are primarily white or suggest that University Avenue and St. occurs when sex workers engage non- African American; police suggest a 2:1 Paul‟s Hmong and Southeast Asian sex workers such as members of their ratio respectively. This reflects the communities are more insular, meaning community, police, and the clients they current racial composition of they are more protective of this solicit / who solicit them. University Avenue as well as the informal market than other neighborhoods east of Lexington communities. As such, these women 6, 11, 12 INTRA-SPATIAL NETWORK OF SEX Avenue . During the 1990s and do not engage in street prostitution, early 2000s, the majority of prostitutes however still exhibit high levels of WORKERS 6,11 working in this neighborhood were prostitution and trafficking . This is African American, but the number of true for the Twin Cities East African Female prostitutes working along white women has increased in recent Community as well6,4. As such, we University Avenue are well connected years11, 12. shift the focus to inter-spatial networks to one another. Two experts discussed Although University Avenue is where these influences of community the high level of social connectivity also home to a large Southeast Asian affect the work of prostitutes. between sex workers on University, community, women from this stating, “They all know each other‟s demographic are not involved in street 6 business .” One interview participant prostitution6, 11, 12. The Police Vice conveyed this connectivity as a Sergeant stated that in ten years of

90

91

INTER-SPATIAL NETWORK OF SEX ordered to attend Breaking Free’s John volume has decreased since WORKERS School in order to receive sex University‟s 1950s peak, the Avenue rehabilitation. Such Johns typically still has a high rate of traffic flow, come from suburbs of St. Paul and are which helps to drive the sex work Past research suggests that street predominantly white and middle class6. industry. University Avenue is able to prostitutes do not live in the Inter-spatial patterns can also be maintain its higher concentration of sex neighborhoods where they work, in observed in prices for and locations of workers because the Avenue provides a order to avoid shame of being seen by sex acts with Johns. Street prostitutes travel route for many Twin Cities their neighbors and stigma associated typically charge $40 for oral sex, and residents between the two cities. 13 with their work . Contrary to such attempt to make transactions quickly, in Women congregate along this street research, our three experts stated that order to increase their number of because of the greater automobile the vast majority of women working on customers in an evening. After traffic presence, and thus the greater University live in the surrounding negotiating the transaction on the street, business opportunity11,12. Women are neighborhoods and within walking prostitutes direct Johns to a location. more visible and better advertise their 6, 11, 12 distance of the Avenue . One They may drive to a nearby industrial business along the street. Increased interview participant stated that area, often near Minnehaha and traffic presence allows for an increased because University is well associated Arundel, the ice arena, Minnehaha and supply and demand. Furthermore, this with a demand for sex workers, women Western, or north of University to the high traffic density reinforces may also come from Minneapolis, East railroad tracks. Often the transaction University‟s role as a prostitution Saint Paul, West Saint Paul, or from takes place within the neighborhood. destination, and thus, this inter-spatial 12 buses from throughout the region . Depending on weather conditions, the network is sustained. The inter-spatial relationship sex act may take place in an alley north Our final inter-spatial network between clients and sex workers is of University or in the parking lot of a involves the relationship between complicated because these men closed business. Because many women prostitutes and the police. Because soliciting prostitutes (Johns) are not live within several blocks of the prostitution does not involve tangible, 6, 11 from surrounding neighborhoods . Avenue, some transactions take place at physical evidence, police officers must Johns come from a range of their homes11. take precaution in making an arrest, neighborhoods and suburbs in the Sex workers also interact with cover strict protocol, and often record metro, as well as out of state, including the automobile traffic and must their interactions electronically. 11 truck drivers . Men arrested for maintain spatial visibility in order to Protocol is difficult to maintain and as soliciting women are frequently market their services. Although traffic a result, police officers working outside

92 of the vice unit rarely make arrests for However, women rarely disclose the are able to evade arrest due to the soliciting6. names of those they work with in order hidden nature of prostitution and The police‟s stated priority is to to protect themselves from physical varying levels of law enforcement help women to “get out of this line of abuse6. tolerance described earlier3. work,” and to connect women with As stated above, there were appropriate community resources and sixty arrests for prostitution along FACTORS FOR PRACTICING PROSTITUTION: 11 services . Street prostitutes are thus University Avenue in 2010. However, DRUGS AND ECONOMIC STABILITY not often incarcerated, and occasionally it is unlikely that this number are not arrested for soliciting. Sgt. accurately reflects the extent of Pierce described that when women prostitution on the Avenue. One expert Connecting prostitution with other interact with the police, they often state felt that data on such convictions of variables of the nighttime economy, we that they will be physically assaulted solicitation do not accurately reflect the see a cyclic and interdependent later on if they get arrested, or if they nature of prostitution, or general crime relationship among drugs, money, and are arrested they will not be able to and vice on University. He expressed prostitution. The interconnectivity earn enough money for various that police seldom view crime as between prostitution and drug abuse obligations. In these cases, the police holistic, nor do they see was focused upon heavily by all sometimes do not arrest women11. interconnectivity between different literature reviewed for this chapter and However, one expert from Breaking types of vice and illegal activity. He all interviews conducted. Our experts Free was skeptical about the validity of asserted that police were seldom likely estimated that over 95% of women this statement6. Furthermore, threat of to question a prostitute (and receive involved in prostitution along arrest and incarceration of street answers) regarding drug use, violence, University Avenue are addicted to 6, 11, 12 prostitutes is often used as a tool to and theft11 when such an arrest occurs. crack cocaine . Drug abuse often encourage women to disclose names of General police strategy then isolates follows prostitution. Women who sell pimps. Street prostitutes working on types of crime. This disregard for the sex are surrounded by drugs in their University have regular interactions intersectionality of crimes can be seen immediate environment and often start with police (i.e. the same women are in the quantitative data analyzed above, using crack because it is a means of continually working on the Avenue), where prostitution demonstrated no dealing with the emotions and stress of and instead of focusing on the statistical correlation with other rape, sexual assault and the nature of incarceration of these women, the variables. Other studies suggest that their work. Another expert described police emphasize arresting and arrest data do not represent true levels the inverse relationship between incarcerating Johns and pimps11. of prostitution because many women prostitution and drug abuse, suggesting

93 that women sell sex in order to earn necessary activity as it is a sole way of type of work, it is work that they would money for drugs – implying a earning an income.2 view as normative, acceptable, and a correlation between drugs and In Figure 3, we see prostitution natural part of their environment11. prostitution that our statistical analysis arrests mapped with neighborhood Thus, sex work becomes cyclic: could not proffer. While prostitution is income at the block group level. In prostitution begets prostitution. an economically driven transaction, an neighborhoods along University In sum of this qualitative understanding of economics cannot Avenue, we see that the highest approach to the market of prostitution allow us to fully see the motivations of numbers of prostitution arrests occur in on University Avenue, we have shown women involved in this work. The block groups with the lowest household that prostitution is characterized by cycle is also feeding and helping to incomes. This leads us to suggest that inter-spatial and intra-spatial networks. meet an emotional need12. lower incomes may be a driver of street These networks shape sex workers‟ Furthermore, the cycle of addiction prostitution along University Avenue, interactions with other space users, the leads women to maintain their function although further research is needed to street, the state (in the form of police), as a supplier of sex based on internal support such a statement. and affect the economic climate of and external demands. informal activities. Although our The economic motivations to NORMALIZATION OF PROSTITUTION statistical analysis revealed no engage sex work extend beyond drug significant relationship between use. Many women sell sex as a way to prostitution and other types of vice or he motivations behind prostitution pay for necessities, such as food and T informal economic activity, the housing, not solely for drugs11. One necessitate a normalization of this type qualitative approach we have taken has expert discussed the women she of work. Spaces of prostitution are allowed us to better understand this worked with and their justification of maintained through its cyclical nature, relationship. Prostitution is directly sex work as the sole way in which they and eventually this cycle becomes the involved with drug use and violent could earn an income: “you make your standard in which the space operates. crime. Arrest data fail to illustrate money between your legs” or “just Academic literature suggests that the these important patterns. doing what they gotta do to get by6.” In children of sex workers are much more academic literature, it is suggested that likely to engage in sex work in their for women with reduced economic lifetime than the children of non-sex workers19 because they see it as a opportunity and difficulty finding 2,6 employment, prostitution becomes a legitimate form of work . Even if youth did not grow up to engage in this

94

III. POTENTIAL EFFECTS OF LRT ON THE community tension and to actually drug dealers could benefit from this UNIVERSITY AVENUE NIGHTTIME displace these activities, nor is it influx, as it could mean a net increase projected that University will develop in potential consumer base. Given the ECONOMY such social conditions. Rather, street‟s current reputation as a place of

“In North America, where processes of neighborhood economic development vice, it is possible that the LRT could gentrification are arguably more entrenched, it has the capability to alter patterns of help to transport more individuals to has been repeatedly demonstrated not only that these nighttime economies or displace the destination more easily. gentrifiers are active in opposing sex work, but these activities from the neighborhood It is also possible that existing that the removal of commercial sex work from completely. neighborhood levels of crime and neighborhoods is regarded by authorities as a necessary precursor to gentrification (205).14” The construction of the light rail prostitution will deter potential new and subsequent development of businesses and residents from moving University Avenue will inevitably into this neighborhood. This deterrent The construction of the light rail is change the street significantly. We factor may cause the nighttime likely to spur economic development suggest that by altering neighborhood- economy to be unaffected by LRT. and create an influx of new businesses scale characteristics that are linked to Crime also has the potential to and residents along University Avenue. the nighttime economy, it is likely that increase after construction of LRT. If Such community change is likely to LRT will lead to a decrease in the the LRT is built without addressing affect the nighttime economy and amount of street prostitution and other existing poverty in the neighborhoods illegal activity. vice activity in the nighttime economy. along University, then crime would Street prostitution, drug dealing, Here we discuss such implications. likely increase when LRT brings and other crimes are often long It is possible that the outsiders into the neighborhood. One entrenched in neighborhoods, but construction of LRT may lead to an expert posited that “making the newer residents have little tolerance for increase in street-based nightlife neighborhood look better physically such behaviors. Residents express activities such as increases in consumer won‟t make it better… community opposition to these economic activities demands for bars, clubs and members will still feel angry… and this based on fears of crime and vice as well restaurants. The LRT is likely to draw is what will lead to an increase in as present value increases in real an increased amount of traffic to the crime12.” 14 property utilities . However, it neighborhood, potentially bringing an On the contrary, it is also likely appears unclear if gentrification and an increase in pedestrian density and that the LRT and resulting development influx of new residents are strong drawing a larger number of individuals will lead to a decrease in informal enough forces to do more than create into the neighborhood. Sex workers and economic activities. One must

95 recognize that the informal activities of reduction to the number of prostitutes IV. CONCLUSION crime and vice will persist in the working along University. It is further economic landscape of cities; however likely that prostitutes will relocate to he process of normalization has a the most effective approaches stem other neighborhoods given the transient T from minimizing its greater community nature of these women‟s lives. significant hold on the population that effects.11” Police in St. Paul have Prostitutes were described as a transient becomes accustomed to activities that considered “moving” prostitution from population by two interview are aberrant in nature. In this case, University Avenue to Payne Avenue or participants6,11, as homeownership is informal activities of drug use, theft Minneapolis. This interest stems from low among these women. As most rent and prostitution have become a desire to shift prostitution to spaces their homes, and the cost of rent is normalized in the communities in and that are not residential or family lower along Payne Avenue, many may around University Avenue. With the neighborhoods, or places where relocate to neighborhoods where the emergence of LRT, this normalization commercial uses are more common. demand for prostitution is growing will inevitably be disrupted because Police officers wish to keep outsiders (like Payne Ave)11. new space users will change how from entering these neighborhoods in Further, LRT and development University operates, especially with order to improve quality of life and plans for the Avenue hope to alter the regards to sex work, drug use and reduce childhood exposure to street so that its orientation is no longer crime. However, we cannot assume that neighborhood-level informal activities. towards the automobile. This will lead the breakdown of the normalized crime Combined with LRT, this police to a removal of parking lots (see the and vice economy of University will strategy is likely to lead to a decline in chapter by Christenson and Perkins), result in a positive nor negative change. prostitution along University Avenue. which removes a key location where We must assert that the people most During construction of LRT, a these informal economic transactions affected by these changes will reduction in pedestrian and auto traffic occur. Prostitution also takes place in understand their effects either as will occur along University. As the cars and relies on high automobile negative or positive externalities and Avenue is closed and traffic volume traffic along the Avenue. However, have the agency to interact with such drops, the demand for prostitution will with a decreased number of cars along changes in their desired ways. In other decrease significantly. During this the Avenue, fewer opportunities for words, University will change, but the time, prostitutes will likely move soliciting and fewer locations for other degree of such change and its effects elsewhere in order to find business. economic transactions to occur will will remain ambiguous. This occurrence, combined with police result. As nighttime economies gain strategy, is likely to bring a dramatic more recognition by city and regional

96 governments as possible nodes of 4. Eckholm, Erik. "Somalis in Twin Cities Minneapolis: Center for Urban and growth, it is important to consider how Shaken by Charges of Sex Trafficking." Regional Affairs, 2007. New York Times, November 23, 2010. 14. Hubbard, Phil, Rosie Campbell, Maggie the informal activities of crime and vice 5. Minnesota Public Radio. "Sex Trafficking on O'Neill, Jane Pitcher, and Jane Scoular. will be affected. As we have the Rise in Minnesota." Midmorning "Prostitution, gentrification, and the limits demonstrated, LRT can have a Broadcast. Radio. St. Paul, MN, March 8, of neighborhood space." In Securing an significant impact on decreasing crime 2011. urban renaissance: crime, community, in an area and the value of these 6. Hintz, Jennifer, interview by Sarah and British urban policy, by Rowland Ziegenhorn. Intake Specialist, Breaking Atkinson and Gesa Helms, 203-218. activities can be in decline. Given this Free (April 12, 2011). Bristol: The Policy Press, University of probable decline, the construction 7. Gustavson, Jennifer. The Effects of Bristol, 2007. phase of LRT, the interests of St. Paul Prostitution on North Minneapolis 15. Goforth, Jill. University Avenue: A History. police, and neighborhood changes Residents. Folwell Center for Urban Department of Geography, Macalester brought by LRT, it is most likely that Initatives, University of Minnesota, College, Saint Paul: Macalester College, Minneapolis: Center for Urban and 2010. displacement of informal nighttime Regional Affairs, 2007. 16. MPR. Rondo Neighborhood. activities will occur on the street. What 8. Hofstede Committee. “The Hofstede http://minnesota.publicradio.org/projects/ will remain could be a destination site Committee Report: Juvenile Prostitution 2008/05/university_ave/index.shtml. for nighttime and entertainment. in Minnesota.” 1999. 17. Levitt, Steven, and Stephen Dubner. 9. Breaking Free. http://www.breakingfree.net/ Freakonomics: A Rogue Economist (accessed April 2011). Explores the Hidden Side of Everything. REFERENCES 10. Aurora Saint Anthony Neighborhood Chicago: Willaim Morrow, 2005. Development Corporation. 18. Young, Amy, Carol Boyd, and Amy 1. Hubbard, Phil, and Teela Sanders. “Making http://www.aurorastanthony.org/index.ht Hubbell. "Prostitution, Drug Use, and Space for Sex Work: Female Street ml. Coping with Psychological Distress." Prostitution and the Production of Urban 11. Pierce, Mark, interview by Sarah Journal of Drug Issues 30, no. 4 (2000): Space.” International Journal of Urban Ziegenhorn. Vice Sergent, Saint Paul 789-800. and Regional Research 27, no. 1 (March Police Department (March 29, 2011). 19. Raphael, Jody, and Deborah L Shapiro. 2003): 75-89. 12. Presley, Damone, interview by Sarah Sisters Speak Out: The lives and needs of 2. Weitzer, Ronald. “Sociology of Sex Work.” Ziegenhorn. Program Director, Vision in prostituted women in Chicago. A Annual Review of Sociology 35 (2009): Living Life; Aurora Saint Anthony Research Study. Chicago: Center for 213-34. Neighborhood Development Corporation Impact Research, 2002. 3. Hubbard, Phil. “Researching female sex (April 15, 2011). 20. Levy, D., J. Comey, and S. Padilla. 2006. work: reflections on geographical 13. Russell, Wynfred N. The Effects of In the face of gentrification: Case studies exclusion, critical methodologies and Prostitution on Businesses in North of local efforts to mitigate displacement. 'useful' knowledge.” Area 31, no. 3 Minneapolis. University of Minnesota; Urban Institute: Washington, D.C. (1999): 229-237. Folwell Center for Urban Initiatives,

97

21. Young, Kelcie. “Equity, Gentrification, . Commercial Sexual Exploitation of Regional Affairs, University of 30. Hollands, Robert. "Divisions in the Dark: American Indian Women and Girls in Minnesota; Central Corridor Equity Youth Cultures, Transitions and Minnesota. Minneapolis, MN: Minnesota Coalition, Minneapolis, 2009 22. Black, Segmented Consumption Spaces in the Indian Women's Resource Center, 2009. William R. "An Unpopular Essay on Night-time Economy." Journal of Youth Print. Transportation." Journal of Transport Studies 5.2 (2002): 153-71. Print. 38. Roberts, Marion, and Adam Eldridge. Geography 9 (2001): 1-11. Print. 31. Hubbard, Phil. "Sexuality, Immorality and Planning the Night-time City. London: 23. Central Corridor Development Strategy: A the City: Red-light Districts and the Routledge, 2009. Print. Chapter of the Saint Paul Comprehensive Marginalisation of Female Street 39. Russell, Wynfred. "The Effects of Plan. Rep. Saint Paul: Central Corridor Prostitutes." Gender, Place and Culture: Prostitution on Businesses in North Development Strategy. Print. A Journal of Feminist Geography 5.1 Minneapolis." Folwell Center for Urban 24. City of Saint Paul's Central Corridor (1998): 55-76. Print. Initiatives; Neighborhood Planning for Development Strategy: Plans for Seven 32. Hunt, Geoffrey, Molly Moloney, and Commercial Revitalization (2007). Print. University Avenue Station Areas. Rep. Kristin Evans. "Clubbing, Drugs, and the 40. Schwartz, Pepper, and Virginia Rutter. Saint Paul: Central Corridor Development Dance Scene in a Global Perspective." "Chapter 3: Uncommitted Sexual Strategy. Print. Youth, Drugs, and Nightlife. New York, Relationships." The Gender of Sexuality. 25. Fine, Michelle, and Lois Weis. The NY: Routledge, 2010. 53-70. Print. Thousand Oaks: Pine Forge, 1998. Print. Unknown City: Lives of Poor and 33. Hunt, Geoffrey, Molly Moloney, and 41. Steller, Chris. "All Aboard: Years before It Working Class Young Adults. Boston: Kristin Evans. "Uncovering the Local: Rolls, Central Corridor Light Rail Is Beacon, 1998. Print. San Francisco's Nighttime Economy." Already Connecting Twin Citians." The 26. Garrett, Thomas A. Light-Rail Transit in Youth, Drugs, and Nightlife. New York, Line Homepage. Web. 15 Feb. 2011. America. Publication. St. Louis: Federal NY: Routledge, 2010. 87-116. Print. . 27. Gilbert, Daniel A. ""Why Dwell on a Lurid Kristin Evans. "Youth, US Drug Policy 42. Stewart, James Innes. Real Estate Appraisal Memory?"; Deviance and Redevelopment and Social Control of the Dance Scene." in a Nutshell; a Restatement and in Boston's Scollary Square." Youth, Drugs, and Nightlife. New York, Simplification of Theory and Practice. Massachusetts Historical Review 9 NY: Routledge, 2010. 71-86. Print. Toronto: University of Toronto, 1972. (2007): 103-33. Print. 35. Levitt, Steven D., and Stephen J. Dubner. Print 28. Grazian, David. On the Make: the Hustle of Freakonomics: a Rogue Economist 43. Talbot, Deborah. Regulating the Night: Urban Nightlife. Chicago: University of Explores the Hidden Side of Everything. Race, Culture and Exclusion in the Chicago, 2008. Print. New York: William Morrow, 2005. Print. Making of the Night-time Economy. 29. Havens, Chris. "Central Corridor Isn't Just 36. MA, Bellis, Hughes K. McVeigh, Thomson Aldershot, England: Ashgate Pub., 2007. about Moving People | StarTribune.com." R, and Luke C. "Effects of Nightlife Print. StarTribune.com: News, Weather, Sports Activity on Health." Nursing Standard 44. Tolley, Rodney, and B. J. Turton. "The from Minneapolis, St. Paul and 30th ser. 19 (2005): 63-71. Print. Evolution of Transport Policy." Transport Minnesota. Web. 15 Feb. 2011. Systems, Policy and Planning: a

98

Geographical Approach. [Harlow, Essex, 46. Weitzer, Ronald John. Sex for Sale: Yuen, Laura. "Central Corridor and the England]: Longman, 1995. 51-77. Print. Prostitution, Pornography, and the Sex Footprint of Politics." Minnesota Public 45. Tuan, Yi-fu. Space and Place: the Industry. New York: Routledge, 2000. Radio [Saint Paul] 30 Apr. 2010. Print. Perspective of Experience. Minneapolis: Print. University of Minnesota, 1977. Print.

99 v. DALLAS TO THE TWIN CITIES:

A Quantitative Analysis of Land Value Change from Light Rail Construction

by cory copeland

This Chapter’s Question:

1. What connection, if any, is there between light

rail transit locations and property values?

Chapter Outline:

I. The Issue II. Methods III. Results and Interpretation

IV. Impact on the Central Corridor

V. Conclusion

I. THE ISSUE Metropolitan Council and federal light rail transit plan. Politically, the government assistance began increase in property values makes construction of a light rail through the developing light rail transit more Public transit is a major source of central corridor of the cities. appealing. From a city planner's public debate. The proponents of The Central Corridor light rail perspective it presents opportunities to public transit argue that rising gasoline project in Minneapolis/Saint Paul is enhance neighborhoods and attract prices, concerns about the environment one of the largest infrastructural investment. As well, increased revenue and growing traffic congestion make projects in the recent history of the from property taxes is considered an investments into new transit cities. The project has a nine hundred important method of offsetting the infrastructure desirable. Critics argue and fifty-seven million dollar budget.3 operational and capital costs of a light that transit is not tenable in areas that The project is anticipated to have rail transit system. Land value increase are not dense and metropolitan and that significant effects on the central does present many benefits to significant capital costs could be better corridor of the Twin Cities. The city of communities, but it also carries some spent elsewhere. One benefit often Saint Paul's Central Corridor plan risks. The primary risk is that associated with large transportation anticipates that the construction of the increased property values can lead to infrastructure projects is an increase in light rail will increase the value and the loss of communities to land value which can help offset the density of the property along the gentrification. Because of this, cost of projects through increased corridor.4 Saint Paul city planners have communities and planners should property tax revenue. This increase in put programs into place anticipating carefully manage land value increases property value is a force driving the that property value could increase that might occur from a light rail transit popularity of rail transit. Planners significantly. One such program is system so that they benefit existing point out that increased property values intended to prevent gentrification communities. can benefit urban neighborhoods. resulting from community members Research on the connection Attempts to build transit being 'priced-out' of the neighborhoods between land-use/land value and light networks to revitalize urban surrounding the Central Corridor.5 rail transit is not entirely conclusive neighborhoods have been a popular st The common conception that that there is positive correlation development strategy in the early 21 there is a clear relationship between between proximity to light rail and land century.1 This has led to the growth of 2 property values and the location of light value. Susan Handy, from the new rail transit lines in recent years. rail stops has informed both the University of California, Davis, points In 2010, the cities of Saint Paul and political and planning process in the out that light rail systems may not lead Minneapolis along with the development of the Central Corridor to greater property value and higher

101 density land-use: had a minor positive influence on “Transit systems property values, but that other potentially factors were more significant in impact the pricing of property.7 development [...], A case study from just as highways Naples, Italy showed that do: by reducing property values had increased in transportation catchment areas of light rail costs and by stations. However, the study changing relative found that the effects are accessibilities. inconsistent. Local factors [...], if a transit affected which stations gained system reduces benefits from the light rail. The travel times, it study also found that the may enable increased property values in residents to live some areas had resulted in farther out, gentrification. 8 thereby Other research has increasing rather focused on short-term effects that than decreasing light rail might have on property sprawl.”6 Figure 1: True Distance Versus Walking Distance value. A case study from Despite the Sunderland, UK used residential possibility that property price data from light rail transit projects could lead to resulting from light-rail transit. The newspapers to see how the new light sprawl, the majority of empirical research used a hedonic model (i.e. rail had affected property value. The research discussed in this chapter has model that isolates an individual study found that the short term effect not shown increased sprawl. component of a phenomenon by on property value was not significant. One recent study of the impact controlling for other variables that The article speculates that the home- of light rail on Buffalo, New York affect the phenomenon). The model buying situation will likely see property showed that there was a generally found that proximity to rail in Buffalo value increases as the market adjusts to positive effect on property values the effects of improved accessibility. 9

102

argues this is because distance rather than travel time is frequently used as an independent variable, and because of problematically- defined study areas.11 Still, planners in Saint Paul are preparing for an increase in property values along the Central Corridor. In many ways, the Figure 2: Land Value Histogram Figure 3: Log of Land Value Histogram success of the Sherry Ryan, from San Diego significant. The study also found that Central Corridor State University, conducted a study on local factors were more critical to light rail plan will be dependent on the the effects of light rail as opposed to industrial locations than transportation effects that the new light rail line has highway accessibility on industrial and access.10 on property value. Therefore, the office firms in San Diego, California. The results in the literature have question this chapter will addresses is: She found that freeways significantly been somewhat inconsistent at showing What connection, if any, is there impacted office space location while connections between light rail transit between light rail transit locations and the effects of light rail were less and property value. Sherry Ryan property values?

103

II. METHODS value change will take as a result of the The primary research question of this development of chapter is whether there is a the Central relationship between the location of Corridor light light rail transit stops and land value. rail in In order to address this question, this Minneapolis- chapter will focus on the empirical Saint Paul. results of one case study. The chosen The data case study is the DART (Dallas Area set derives from Rapid Transit) rail system in Dallas, multiple Texas. Dallas shares some similarities sources. First, I to the Minneapolis-Saint Paul urban systematically area that make it suitable. First, the sampled Dallas metroplex contains two large properties from cities (Dallas and Ft. Worth) similar to the Dallas Minneapolis and Saint Paul. As well, assessors' Dallas has a somewhat weak central 12 catalog. These business district which is similar to data contained the Twin Cities. The DART system in the type of Dallas is similar to the anticipated property (e.g. transit system in the Twin Cities residential), because it combines commuter lines location, (similar to the Twin Cities' Hiawatha assessed Figure 4: Best Fit Line line), a central line connecting the property value, the nearest station to the sampled Dallas/Ft Worth area (similar to the area of the property, and if the property properties. From there, I used Google new Central Corridor line), and a bus was owner-occupied (defined as the maps to estimate the walking distance system. Therefore, results from the owner having the same address as the (Figure 1) to the nearest rail station. light rail system in Dallas should be property). Using the locations of the Walking distance was used rather than useful predictors of the form that land property, the DART website yielded true distance because it is a better

104 approximation of the normal rail transit natural logarithm of area because it gravity model. The gravity model user's experience than true distance. As maintains the linear relationship in the indicates that the market area's draw on well, it is likely that perceptions of light model. What this means is that each customers for a location is a function of rail as an amenity are based on one's square foot of land added to a piece of distance squared. In practical terms it ability to easily walk to a rail station. property ought to add a similar amount means that for each mile of distance The dependent variable in the of value to the property as every other added to the walking distance, the draw regression model is the Dallas square foot of land in the property. of a station is even more diminished Assessor's office assessed total value This choice also has a statistical than for the previous mile of distance. for a property (measured in dollars). justification; using the log of area In theoretical terms it means that The distribution of the sample (figure shows a greater significance. The p- locations near each other affect one 2) shows that total land value is not value (a measure of significance in the another much more than locations that normally distributed. However, figure model) for the natural log of the square are far apart. As locations get farther 3 shows that the data are log-normal. feet is 0.000351, but 0.00484 for square apart, the effects they have on one In order to run regression analysis, the feet. another diminish at an accelerating dependent variable (total assessed land A best-fit line estimate shows pace. This explains why the model value) had to be represented as the the relationship between walking using walking distance squared as an natural log of total land value. distance to a rail transit station and the independent variable is more Therefore, the model will be built with natural log of total value (Figure 4). significant. the dependent variable as the natural However, it does not seem to fit the I created a single-variable log of the total assessed value of a distribution of the data. It looks as model for the relationship between the property. though the data has curve to it which natural log of total land value and The model (Table 1) controls could indicate that there is a stronger squared land value, yielding the for the significant variables (defined as relationship with parabolic curve. To following coefficients: variable with a p-value below .05) of test the parabolic relationship, I ran a p- area, and the categorical variable of test (without controls) using squared (Intercept) square_walk owner-occupation (if the owner of a walking distance rather than total 11.80922 -0.01051 property is the resident of the property). walking distance. The test yielded a p- The area independent variable showed value of 0.0865 which is more Pvalue: 0.0865 a significant linear relationship with significant than the 0.181 p-value from property value. Therefore, the area a non-squared walking distance. This These results can be represented as the independent variable being used is the result is consistent with research on the function:

105

there are a Log(Total Land Value) = 11.80922 – number of 0.01051(Squared Walking Distance) local and political When represented as a function that factors that produces the output of land value rather cannot be than the log of land value, the function taken into becomes: account when Total Land Value = e^(11.80922 - creating a 0.01051x^2) model of a *Where e is Euler's number and x is walking very distance. complex phenomena. Figure 5 shows a graph of this As well, equation. We can see that the model current indicates being close to a light rail stop research on helps predict a higher land value, but light rail has that as property moves away from the shown there Figure 5: Single Variable Model of Land Value to Walking stops the effects diminish swiftly. to be Distance Within five miles of walking distance inconsistenci Another limitation of the model the land value has diminished by tens es in the effects of light rail locations is that it does not include as many of thousands of dollars and by ten miles and land value. This makes certainty in control variables as there are factors of walking distance the model predicts the application of the model informing land value. Specifically, that land value has diminished by impossible. However, the results neighborhood characteristics often have almost $75,000. section of this chapter will discuss how a large effect on land value. Controlling There are a number of the model is consistent with the for crime and neighborhood limitations to the model. The literature on the light rail-land value demographics would likely improve the application of the model from Dallas to connection which lends credibility to model. Despite the lack of these the Twin Cities cannot be taken as an the application of the model. control variables, the model has an absolute prediction. This is because adjusted R-squared of 0.3981. That

106 means that the model has reduced least while a squared differences between a model business or without independent variables (i.e. a renter is less model that is simply the mean land likely to invest value) and our current model by about in 40%. The R-squared value has been improvements adjusted for a natural inflation that that would occurs when adding any independent drive up the variable into the model. Despite the land value lack of independent control variables because they the model still provides significant do not directly explanatory value. benefit from the increased III. RESULTS & INTERPRETATION property value. These relationships The findings indicate that owner- represent occupation, land area, and squared important walking distance all have significant Figure 6: Final Multivariate Model Demonstrating Curvature of factors in the Relationship relationships with land value. Land establishing area's relationship with land value is land value. However, the primary and demonstrate their consistency with intuitive. A lager plot of land is more question of this chapter is the previous research and models in the valuable than a small plot of land. As relationship between light rail station field of transportation geography. well, owner-occupied property is likely locations and land value. A significant debate in the to increase land value over time The relationship between land literature on light rail transit is whether because a resident is more likely to value and light rail station locations is or not light rail can be considered a invest in improving a piece of property not a normal linear relationship. It is regional development strategy or if the if he or she is the owner of that both logarithmic and parabolic. I will impacts it has are localized. property. This occurs because he or she now discuss the implications and Proponents of light rail transit often gains the benefit of any increase in land reasoning behind both the logarithmic argue that it can be a piece of a regional value by improved equity on the land; and parabolic elements of the model development strategy because land

107 value and land use change can spur an indicating that rail transit's effects are essentially non-existent. Therefore, the urban renewal which benefits the entire not felt across a region. logarithmic relationship and region. However, research has The logarithmic form of the exponential relationship both indicate struggled to show how light rail transit relationship between land value and the effects of transit on land value are positively affects regional growth. distance from light rail stations is contained primarily to the stations' Susan Handy points out that past consistent with the conclusion in the immediate areas. research has shown “transit systems do literature that rail transit is not a Furthermore, the relationship is not generate “interregional transfers,” sufficient condition for regional related to the concept of distance thereby increasing the overall development, but that it does spur decay. Distance decay means that the development within the region, [...] In investment along the rail. The pull-factors of a location decrease as other words, there was no evidence that logarithmic relationship indicates the the distance between two locations regions that invest in new transit station's effect on land value decays increases. This concept is formalized systems grow faster than they would quickly as walking distance from a rail in the gravity model. The gravity model have had they not invested in the transit station increases. This means that the shows how one population's pull on system.”13 Other research has indicated empirical example of Dallas supports another is affected by the square of “urban rail transit investments rarely the idea that the impacts of rail stations distance rather than distance. The „create‟ new growth, but more typically are localized rather than region-wide. formulaic representation of the gravity redistribute growth that would have Figure 6 shows the shape of the curve model is: taken place without the investment”14 of the relationship between station The case study from Naples, Italy location and land value in the final (discussed in 'The Issue' section of this model (with the natural log of area and chapter) found that the impacts on owner-occupancy held constant). investment around light rail stations Figure 6 only demonstrates the shape of was positive, though some areas curve, not the actual values, because experienced gentrification as existing the intercept of the graph is determined communities were pushed out of these in part by the observed value of the areas.15 Naples experienced increased other independent variables in the land value in central city areas, but not model. The figure demonstrates that as in periphery or suburban areas (even one moves away from a station the ones with rail transit stations), effects diminish quickly; in fact, after several miles, the effects become

108

model and the logarithmic and parabolic relationship between land value and walking distance indicate that the model provides empirical support for theories in the literature. The model supports Table 1: Model with squared walking distance Table 2: Model with walking distance variable that idea that variable transit does not spur region-wide This gravity model has been utilized in not surprising that the inverse growth of land value, but that it does explaining retail locations. It argues relationship between land value and spur land value increases around station that the draw of a particular retail walking distance would be more areas. As well, it establishes the decay market area is inversely related to the strongly correlated when distance is of distance relationship between land square of distance. Customers require squared. Table 1 and Table 2 give value and the location of rail stations as a greater service to compensate for information on the model with squared being the inverse of squared distance. traveling the distance between their distance and non-squared distance, Therefore, it provides empirical support location and a retail location as that respectively. We can see that the for the gravity model. distance grows. We can easily model p-value, R-squared, and variable Further research on the conceptualize a light rail station as a p-value demonstrate a greater connection between light rail and land retail location (selling rides). Then, the relationship when walking distance is value should explore the relationship gravitational model would indicate that squared. between land value and rail station there should be an inverse relationship The connection between the location using not just linear models. between distance squared and the literature on regional growth from This study indicates that in the Dallas location of customers. Therefore, it is transit as well as the gravitational metroplex, the DART system exhibited

109 stronger non-linear relationships to land the Central Corridor light rail is that it increases sharply diminish as distance value. Further research might also will lead to increased property values from the light rail stations increase. It explore what the implications of the (and as a result density) in the areas is probable that within the buffer region non-linear relationship might be. This immediately around the light rail line. some land value change could be chapter gives an overview of the However, this impact will swiftly anticipated. Currently, there is a implications that the model has on decrease as walking distance from the noticeable difference in land value discussions in the literature about stops grows. Therefore, it is likely that between the land directly adjacent to regional development strategies and the the effects of the light rail will be felt University Avenue where the line will gravity model. However, these along University Avenue, where the locate and the buffer zone around the discussions are not exhaustive. The line is being put in, but not as strongly line. This difference could become possible implications of land value and in the neighborhoods surrounding even more drastic after the new light walking distance to a station having a University Avenue along the Central rail is in place. logarithmic and parabolic relationship Corridor. As well, the model indicates One specific area along the line could have other implications in urban that the new Central Corridor light rail that may experience land value change and transportation geography literature. will not be sufficient to spur regional is downtown Saint Paul. Saint Paul's growth in the Twin Cities area. downtown has benefited from its IV. IMPACT ON THE CENTRAL The land value map of the proximity to the State Capitol and Central Corridor of the Twin Cities because of this proximity will likely CORRIDOR shows the light rail line with a one mile have development potential for the

buffer. The map shows that the land foreseeable future. However, the The model's results have a number of value at the eastern- and western-most current state of the downtown shows possible implications when applied to ends of the light rail have the highest little of this potential. Downtown Saint the Minneapolis-Saint Paul Central land value. These areas are the Paul has struggled to attract and keep Corridor light rail plan. This section downtowns of Saint Paul and retail. It has to compete with will discuss three possibilities: the Minneapolis respectively. As well, the downtown Minneapolis, the Mall of impacts the Central Corridor light rail land directly along the Central Corridor America, and retail districts (like Grand might have on downtown Saint Paul, line shows higher land value than the housing along the Central Corridor, and general land value trends in the buffer the existing Hiawatha line. zone. The most general impact that The model produced from the the model indicates about the effects of Dallas data indicates that land value

110

111

Avenue) within Saint Paul. Making center cities like those of Minneapolis The construction along the prospects worse for the downtown, the and Saint Paul do not exist. It is Avenue presents a problem to business, wealth and population centers difficult to predict how the benefits businesses because it diminishes of the Twin Cities have been moving would be shared between the two cities' customer access and traffic. As a westward away from Saint Paul. downtowns. The land value map result, many businesses will likely However, the Central Corridor light rail shows that both areas have higher land struggle through the construction. As is intended to help change this trend values than surrounding areas; both well, the benefits of the light rail on and spur new investment in the city areas are also large employment centers businesses such as ethnic businesses center. The plan includes creating and so contain the 'weight' needed to that cater to the needs of the local more pedestrian-friendly park streets, benefit from light rail connections. community may not benefit from new improving public spaces, and fostering Increased land value from the light rail traffic. However, every new investment into the downtown.16 new light rail is not completely business along the Avenue is likely to The plan is intended to create ease of welcomed by everyone in the have increased leases matching the use for pedestrians getting off the light community. Some worry that one increase in property value. As a result, rail line at downtown and hopes the impact of the light rail will be some businesses serving the new foot traffic through the area will neighborhood and business neighborhood communities could be generate investment. gentrification. This concern is most displaced by the light rail. The model for Dallas shows predominately expressed by small Housing is less likely to suffer that the light rail stations should impact business owners in the Central Corridor the displacement risks that businesses land value and successful planning and community members of ethnic or face. Most housing is located off the could expand the impacts of the light working-class neighborhoods. Many Avenue in neighborhoods surrounding rail. The case study of Naples showed residents of the Central Corridor are to the Central Corridor. The Dallas model that the light rail spurred significant some degree still experiencing the indicates that land value changes in redevelopment in the old city center.17 effects of the displacement of the these areas are likely to be limited. It is The example of case studies in the Rondo neighborhood by the therefore hard to imagine gentrification literature and the model presented in construction of Interstate 94. The occurring as a result of the existing this chapter indicate that there is reason evidence from this study indicates that populations being priced out of the to be optimistic about the success of concerns of housing gentrification are neighborhoods surrounding the Central Saint Paul's Central Corridor largely unfounded, but that business Corridor. downtown plan. Still, case studies gentrification along University Avenue It is difficult to judge what about local light rails connecting two may present a greater problem. effects the light rail might have on the

112 communities such as continuing care growth occurred in the center city some the surrounding area. However, this communities that are located directly residents were pushed out along chapter adds to the growing amount of on University Avenue. These suburban lines. However, the amount literature empirically supporting the communities are the most at risk. of growth was relatively limited. As relationship between land value and There will most likely be housing such, it can be anticipated the effects of light rail station locations. A model I growth directly on the line as it serves the Central Corridor light rail will be generated based on the Dallas DART the employment centers of the largely seen in the corridor directly system indicates that the area downtowns and the University of along the new line. immediately around stations benefits Minnesota. The Avenue will become Research on light rail from land value increases. an appealing housing location for development stresses the importance of If the Central Corridor light rail students because it connects to the planning and political support after produces similar results to the DART, university. Most of this housing creation of lines to succeed in many of Saint Paul's planning goals can development will probably occur increasing land value and density. be met and gentrification can be largely within walking distance from the While the Dallas model indicates that avoided. However, the success of the stations and will be a factor in driving the impacts of the light rail will likely Central Corridor development will be up land value. The demand to be not be felt throughout the region, the defined by the decisions made in the within walking distance will make impacts on the Central Corridor could aftermath of the construction of the housing density increase directly be large. However, getting the light light rail. Therefore, careful planning around the stations, but the model rail plan in place is only the beginning and community engagement will be indicates that outside of reasonable of the process. The planning decisions critical to Minneapolis and Saint Paul walking distance this effect will made following the construction will achieving successful Central Corridor diminish. Therefore, the new housing do much to determine the success of development. that develops will be unlikely to the Central Corridor light rail. displace current communities. REFERENCES The new line increases the V. CONCLUSION connectivity of the Hiawatha line. 1 Billiterri, Thomas J. "Mass Transit Boom: Do However, it likely will not significantly new systems boost ridership, relieve increase land value along it. The The literature on the effects of light congestion?." The CQ Researcher 18, no. Naples case study indicates that adding rail on land value does not conclusively 3 (2008) support the hypothesis that light rail 2 Billiterri, Thomas J. "Mass Transit Boom: Do rail to suburban lines often spurs a shift new systems boost ridership, relieve toward center city.18 In Naples, as the stations always increase land value in

113

congestion?." The CQ Researcher 18, no. residents' location." Journal of Transport Hare. Et al. "CENTRAL CORRIDOR 3 (2008) Geography 19, no. 2 (2011): 200-211. DEVELOPMENT STRATEGY." City of 3 Metropolitan Council. Accessed March 28, 9 Du, H. (2007). The short-term land value Saint Paul. Accessed January 31, 2011. 2011. impacts of urban rail transit: Quantitative http://www.stpaul.gov/index.aspx?NID=1 http://www.metrocouncil.org/transportatio evidence from sunderland, UK. Land use 56. n/ccorridor/ccfaq.htm. Policy, 24(1), 223-233. 17 Paliara, Francesca, and Enrica Papa. "Urban 4 Aligada, Reynaldo, Paul Mohrbacher, Melvin 10 Ryan, S. (2005). The value of access to rail systems investments: an analysis of Carter, Donna Drummond, and Melanie highways and light rail transit: Evidence the impacts on property values and Hare. Et al. "CENTRAL CORRIDOR for industrial and office firms. Urban residents' location." Journal of Transport DEVELOPMENT STRATEGY." City of Studies (Routledge), 42(4), 751-764. Geography 19, no. 2 (2011): 200-211. Saint Paul. Accessed January 31, 2011. 11 Ryan, S. (1999). Property values and 18 Paliara, Francesca, and Enrica Papa. "Urban http://www.stpaul.gov/index.aspx?NID=1 transportation facilities: Finding the rail systems investments: an analysis of 56. transportation-land use the impacts on property values and 5 Bedor, Cecile. "City of Saint Paul: Overview connection. Journal of Planning residents' location." Journal of Transport of Central Corridor Affordable Housing Literature, 13(4), 412-427. Geography 19, no. 2 (2011): 200-211. Policies and Current Implementation 12 Ishikawa, Y. (2006). The changing socio- Activities." DEPARTMENT OF economic structure of dallas, US: The PLANNING & ECONOMIC new light rail transit lines and related land DEVELOMENT City of Saint Paul. use change. Applied GIS, 2(2), 10. Accessed March 21, 2011. 13 Handy, Susan. "Smart Growth and the http://www.stpaul.gov/DocumentView.asp Transportation-Land Use Connection: x?DID=15461 What Does the Research Tell 6 Handy, Susan. "Smart Growth and the Us?." International Regional Science Transportation-Land Use Connection: Review 28, no. 2 (2005): 157. What Does the Research Tell 14 Handy, Susan. "Smart Growth and the Us?." International Regional Science Transportation-Land Use Connection: Review 28, no. 2 (2005): 146-167. What Does the Research Tell Us?." International Regional Science 7 Hess, D. B. Almeida, T.M. (2007) Impact of Review 28, no. 2 (2005): 157 Proximity to Light Rail Rapid Transit on 15 Paliara, Francesca, and Enrica Papa. "Urban Station-area Property Values in Buffalo, rail systems investments: an analysis of New York. Urban Studies, Vol. 44, Nos. the impacts on property values and 5/6, 1041–1068. residents' location." Journal of Transport 8 Paliara, Francesca, and Enrica Papa. "Urban Geography 19, no. 2 (2011): 200-211. rail systems investments: an analysis of 16 Aligada, Reynaldo, Paul Mohrbacher, Melvin the impacts on property values and Carter, Donna Drummond, and Melanie

114