Transit-Oriented Development As Economic Stimulus
Developments near public transportation hubs attract quality workers and provide opportunities for public-private partnerships - a win-win situation for companies and communities.
Richard K. Greene, Senior Associate, Investment Consulting Associates (Apr/May 09)
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Terry Shook of Shook Kelley, an
architecture and urban planning firm involved early in the project,
believes that TOD provides a hidden opportunity for communities by
providing a future vision and creation of a brand - for example, the
Historic South End is casual and consumer-based, a differentiation from
Uptown, Charlotte's downtown city center. He notes that property prices
have soared from between $4 and $6 per square foot in 1994 to around
$60 per square foot today.
Even in the current economic
recession, expansion will continue as the city extends the rail line
connecting several city colleges and universities. Also in development
is a 29-acre former industrial site being assembled by Cherokee. Its
Southline development is planning a combination of commercial,
residential, and retail uses, adjacent to a new light-rail station.
Cherokee says rail service to the area began in 2007 and ridership is
As for contributing to attracting business,
McCrory says that his city's progressive transit focus "has shown
business that we are preparing for the future, which will help their
future productivity. It sells itself and has been a contributing factor
for all business recruiting." General Dynamics is one success he touts.
The area's local banks (Bank of America and Wachovia, now Wells
Fargo) have expanded branches onto the line. Lance, Inc., the cracker
producer headquartered on the Southline in Charlotte, has been
retained. Economic development benefits also extend to travel and
tourism. With the rail and buses convenient to Charlotte's Convention
Center, the CATS system provides easy access to sports - including
football and basketball - and entertainment such as opera and touring
Broadway shows, helping in the recruitment of conventions and
One of the opportunities provided by TOD is the opportunity for companies to work together in joint development with local governments to plan and implement projects. A natural fit is between local developers and city/county governments, both cooperating on and contributing to various aspects of a project. Common joint development arrangements are ground leases and operation-cost sharing.
Public-private joint ventures can include joint intermodal transfer and commercial-retail space at a transit center. For example, the government partner can contribute its expertise in transportation, zoning, approvals, and public funding; the corporate partner can contribute development and real estate expertise and provide private capital.
There is also an opportunity for expanding corporations and businesses to work with developers to plan new corporate offices, secure access to the work force and provide amenities to employees. With credit hard to come by, private funding coupled with government funding can work together to bridge gaps.
New Spin on Old Idea
Transit-oriented development is not a new idea. It has been around for ages. Older European cities have historically centered themselves around transit hubs. The TOD concepts are being used throughout the world, including in emerging markets. One of the most ambitious redevelopments currently on the map is in India's financial capital, Mumbai. The Dharavi slum is Asia's largest slum, covering 535 acres, and is prime real estate, lying at the junction of two busy commuter lines not far from the city's international airport.
The plan calls for relocation of the area's residents into new housing with healthcare, schools, and business locations for the local entrepreneurs, while the slum site is razed and redeveloped into upscale housing and commercial real estate befitting the city's world status. The tendering process has begun and the developers plan to break ground in the next few months on the multibillion-dollar redevelopment.
Closer to home in the United States, TOD provides opportunity for citizens, government, and companies. With changing demographics, citizens will be drawn to the efficiencies of living near TOD. Governments and cities will be able to upgrade services, regenerate key transportation linkages, and demonstrate a progressive stance on urban renewal and accessibility to assist in recruiting new business.
Companies seeking to relocate and/or grow may find, as unemployment decreases once again, an important competitive advantage in locating close to a TOD with accessibility to services and work force. With the continued support of the federal government in legislation like the American Recovery and Reinvestment Act of 2009, with its strong focus on infrastructure, TOD improvements are likely to assist communities as they emerge from the current recession and prepare for the future.
For additional information about transit-oriented development, visit the Federal Transit Administration's TOD website: www.fta.dot.gov/planning/planning_environment_6932.html.
Richard K. Greene is a senior consultant for The Williams Group Real Estate Advisors on many TOD projects; visit the company's website at www.twgroup.net. He is also a principal of Creative Cities International, using arts and culture as a lever for economic development; visit the organization's website at www.creativecities.org.