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Transit-Oriented Development Sweeps Suburbia
Real Estate Business Online, Feb.
26, 2007 By Bre Edmonds, STAFF WRITER
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Now that
developers are uniting this historically urban format with the
increasingly popular ‘live, work, play’ motto of mixed-use
development, the newly evolved transit-oriented development
trend is taking root in suburban areas across the country.
As suburban areas around the country grow and depend less on
major cities, transit-oriented developments in these locations
just make sense. “What we’re really doing is reutilizing
underutilized property,” says Tom Maddux of KLNB Retail,
which is handling leasing for the retail component at Metro
Centre at Owings Mills, a transit-oriented project under
development in Owings Mills, Maryland. “It doesn’t make
any sense to have huge parking lots sitting full of cars
around transit hubs. I think that’s what’s really driving
all this — how can we make better use of this? Fifteen years
ago, it wasn’t necessarily underutilized, because a lot of
these stations were in outlying growth areas that hadn’t
matured yet. I think this is a trend to more efficiently
utilize land in maturing suburban markets.”
“There are plenty of transit stations that aren’t utilized
very well,” says Shams Tejani, real estate financial analyst
of Comstock Companies, which is in early development stages
for two transit-oriented projects in Virginia. “If the
public doesn’t use them, they may become unsafe areas, and
unattractive without other uses such as retail, resulting in
the local community not making the most out of the station. "Given
the amount of money local governments invest in mass
transportation systems, underutilized stations are an
unnecessary drain of public dollars. Increasing transit
ridership by drawing in consumers not only puts the money
spent on transit stations to good use, it also eases the funds
spent on public roads, benefiting tax payers. And those
aren’t the only stakeholders who benefit, according to
Tejani. “Increasing usage for the metro itself increases the
revenue for the managing authority, such as WMATA, reducing
its need for greater subsidies,” he says. Washington
Metropolitan Area Transit Authority (WMATA) operates the
transit line around which Comstock’s developments will be
centered. “By building private uses such as condos, and
especially office buildings, we are greatly increasing the
county’s property tax base. It's a win-win scenario for us
as developers and for the county, and the community is getting
something in the form of a convenience and a beautiful public
space and amenity.”
Advantages of Transit-Oriented Development
Stations like Owings Mills, which currently draws
approximately 3,000 commuters every day, give tenants at
transit-oriented developments the benefit of guaranteed
clientele. “It’s an opportunity to be exposed to a
mixed-use project that has built-in traffic through the metro
stop,” Maddux says.
On the flip side, the developments actually attract additional
metro users to underutilized stations. “The key to making
transit stations a truly viable option is to ensure that they
are located within a reasonable distance from both residences
and work,” says Beau Schweikert, CFO of Comstock Companies.
“When people evaluate the time and cost it takes to travel
from point to point, metro has to make sense versus car
travel. Our experience is that bringing retail amenities to
the site is what sells many office users.”
“A metro station achieves its greatest potential if it is
within a short walking distance of a large number of uses,”
Tejani adds, making the point that people don’t want to
drive to a metro station in the middle of nowhere. “Our goal
is to bring users to the station and provide an invaluable
amenity to our customers.”
In a world with climbing gas prices, persistent traffic and
the threat of global warming, this ‘walkability’ is a
major advantage. Bob Russell, principal with Ampelon
Development, recognizes the benefit of walkability at the
new West Dublin/Pleasanton BART (Bay Area Rapid Transit)
Station, which his company is currently developing in the
suburbs of San Francisco. “This is the only suburban
location [in the East Bay area] where someone is within
walking distance — a quarter of a mile — from the BART
station to office, residential, hotel and a regional mall
(Stoneridge Mall),” Russell says.
In order to achieve a walkable environment, developers must
provide a high number of uses in a relatively small space.
“By designing a high density of uses around the metro site,
you maximize the benefits of that amenity,” Tejani says.
Once a transit-oriented development begins attracting
additional users to the transit system, many subsequent
benefits take effect. In fact, entire organizations are
devoted to promoting these projects for the purpose of
improving our environment and quality of life. Such
organizations include Alexandra, Va.-based
TransitOrientedDevelopment.org — which cites benefits such
as reduced pollution and environmental destruction, reduced
car accidents and injuries and the health benefits of
increased walking — and New Urbanism’s Center for Transit
Oriented Development, which aims to boost public awareness and
interest in these projects.
Developers recognize the environmental benefits as well.
“Not only are we utilizing an amenity that was invested
through public dollars, but it’s cleaner for the
environment, it’s reducing traffic congestion, and we’re
not producing emissions,” Tejani says.
“It is becoming increasingly undeniable that our planet and
its ecosystem are incredibly fragile, and that our actions as
human beings are having a considerable impact. Emphasizing
mass transit is a step in the right direction,” Schweikert
adds. “Transit-oriented developments have been successful in
getting people out of their cars and using mass transit, if
only for the commute,” Russell says. “As such, they are
successful in reducing air pollution and gas consumption.”
Transit-Oriented Challenges
The density required to make a transit-oriented development
work efficiently can present challenges to developers.
Accessibility can be hard to negotiate in any mixed-use
development; the addition of the metro station only amplifies
the issue. “One challenge of developing transit-oriented
communities is making them easily accessible to all modes of
traffic — auto, bike and foot,” Schweikert says. “A
metro station at this location is expected to be highly
trafficked as a stand-alone use. Our plan adds retail, office
and residential uses to the mix, resulting in a lot of people
who need to easily and safely come and go.” This
necessitates carefully planned public infrastructure, such as
bus terminals, ‘Kiss & Ride’ stops and efficient
public parking.
These dense environments are not preferable to all types of
users, either. Whereas the greatest density in the area prior
to the West Dublin/Pleasanton project was 23 residential units
per acre, the new development will create 50 residential units
per acre in the town of Dublin and 57 per acre in Pleasanton.
“That works in some communities and it doesn’t in
others,” Russell says. “In San Francisco and Oakland,
denser downtown urban locations, you can have greater density
with high-rise residential. In more suburban locations like
ours, you’re pushing the envelope when you get to 50 to the
acre.” Because of the quantity of units planned at West
Dublin/Pleasanton, most will be one-bedroom units, making it
an unlikely choice for families with children.
The financing process for such large projects can be
especially intricate, particularly when developers are working
with public partners. “[West Dublin/Pleasanton] is one of
the few large projects going ahead in the Bay Area because of
its unique financing structure,” Russell says. “Financing
came from several sources: private investment proceeds, grand
funds, bond proceeds and local government participation. It
took quite an effort to pull all of these together.”
And though local governments always have a certain element of
control over the commercial developments that are built in
their jurisdictions, their direct involvement as landowners in
many transit-oriented projects, such as the role of Fairfax
County in Comstock’s Reston Station, makes a difference.
“As a public partner, Fairfax County will have a say in most
aspects of the development's design and construction, its
timing, its mix of uses,” Tejani says. “It’s a more
involved process. You are tied at the hip. ”
West Dublin/Pleasanton BART Station
West Dublin/Pleasanton Station Venture Inc. (WDPSV), a joint
venture between Oakland, Calif.-based Ampelon Development
Group and Jones Lang LaSalle Americas, is currently developing
a new, $86 million BART (California’s Bay Area Rapid
Transit) station in a public/private partnership with BART.
The transit station, which is located on a BART extension line
to Dublin/Pleasanton between the East Dublin/Pleasanton and
Castro Valley stations, will provide service to commuters from
the Interstate 680 corridor to other points in the Bay Area,
and is expected to open for operation in early 2009 according
to Bob Russell, principal with Ampelon Development.
Windstar Communities has purchased and ground-leased 17 acres
surrounding the station, and is now in early development
stages for an integrated transit village. On the 10 acres
located in Dublin, a 210-unit Class A multifamily complex is
slated to break ground later this year; a 150-room hotel and a
7,500-square-foot retail center are also in the works. Though
many high-end hoteliers and restaurants have expressed
interested in occupying the space, tenants and hotel operators
have yet to be confirmed, says Eric Heffner, senior vice
president of Windstar. The company also hopes to rezone the 7
acres in Pleasanton, which is currently zoned for 170,000
square feet of commercial office space, to residential use for
350 apartment units and 11,000 square feet of retail.
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