May 28, 2009

Turning the ‘D’ in TOD into dollars

Local developers should look at other cities’ success stories when planning their transit-oriented development projects.

By GB ARRINGTON and SARA NIKOLIC
Special to the Journal

Jane and Joe Tod descend in the elevator, stroll out the door of their condominium and grab a seat at the adjacent java shop for coffee and scones. After a leisurely read of the Sunday paper, they browse the bookstore and decide next to shop for local produce and fresh flowers in the corner supermarket.

Image courtesy of Makers

Planners expect light-rail to spur residential, retail and office development in 900 acres of Bellevue’s Bel-Red area.

The Tods are urbanized, neighborhood-focused and willing to drop dollars on conveniences and for convenience — and they are the essence of transit-oriented development (TOD).

For planners and developers, the TOD couple is part of a diverse and growing demographic seeking walkable neighborhoods near transit. This type of development offers fantastic opportunities as shown five years running by the Urban Land Institute’s “Emerging Trends in Real Estate” that rated TODs as top-tier U.S. investment prospects because they retain value consistently in both bull and bear conditions.

A prime example of TOD’s money muscle is the Rosslyn-Ballston Corridor in Arlington, Va., just outside of Washington, D.C. Since 1980, more than 25 million square feet of office space and 14,000 residential units were built around five subway stations, which captured 25 percent of new county housing and an impressive 37 percent of new county jobs. Assessed real estate value also skyrocketed in the area by 81 percent in only 10 years. The county invested $100 million in the 1970s to pay the incremental cost not to build Metrorail in the middle of Interstate 66 and parlayed the investment into an $8.8 billion transit-friendly development.

Learning from Portland

Closer to home, Portland took a similar long-term view in making a strategic decision to move its Westside Light Rail system out of a freeway alignment and onto vacant land planned and zoned for TOD as a conscious decision to shape growth and create value. That decision paid off handsomely: More than $1 billion in new transit-friendly development, including 8,000 residential units, have been built within an easy walk of the stations. The line now serves Nike’s headquarters, Intel’s campus and a number of vibrant TODs.

However, what does this all mean to central Puget Sound-area cities, developers, planners and our urban future for which the taxpayers just approved a $17 billion transit expansion in the last election? What kinds of decisions will be made to determine where transit shapes growth and creates value?

The Sound Transit board recently addressed this critical question when it approved the East Link light-rail alignment, which includes the region’s first large-scale redevelopment designed from scratch around light-rail stations. The plan foresees rail service through Bellevue’s Bel-Red corridor — an underused light-industrial area — to spark development. The light-rail will spur development of the 900-acre area into an integrated community of residential, retail and office developments. The new transit route will allow residents and workers easy access to Overlake, downtown Bellevue and Seattle.

The $690 million project is a victory for the city of Bellevue after four years of proactive planning and advocacy for the alignment. The potential economic impact of the swarm of development will likely provide a substantial return on investment.

The East Link light rail comes to the Bel-Red neighborhood at an opportune time. With estimated household and job growth in King County at 42 percent and 57 percent, respectively, over the next 31 years, the project will help meet the community’s mushrooming needs.

In addition, providing compact, walkable neighborhoods with excellent transit connections helps meet the state greenhouse gas reduction goals and directs development away from critical rural and resource lands.

The year 2021 is the estimated completion date of the project, and when finished, Sound Transit 2 will connect 11 cities via 35 stations. The Sounder commuter rail connects another nine cities to the system.

TOD benefits

Agencies, think tanks and advocacy organizations such as the Urban Land Institute have identified TOD as a solution for a variety of urban challenges, from water quality and global warming to physical health and social equity.

A new U.S. Department of Transportation-funded study shows that households living near transit produce 43 percent less greenhouse gas emissions than those living in the region at large. This tracks with new research completed by Parsons Brinckerhoff for the Transportation Research Board showing TOD households tend to be higher income, own half as many cars as the average U.S. household and use their cars much less. TOD housing produces half as many daily automobile trips as similar conventional housing.

What kind of decisions will the Seattle region make to capture the value and benefits of TOD in designing the next generation of Sound Transit? The city of Bellevue’s progressive planning and advocacy for an alternative alignment process serves as a stellar example for those local jurisdictions with future alignment opportunities like Des Moines, Federal Way, Shoreline, Mountlake Terrace and Lynnwood. Communities should understand the TOD potential around light-rail stations and the positive economic impact that goes hand-and-hand with these developments.

Some of the stations on the future North and South Link alignments will necessarily be located in freeway medians, greatly limiting the potential for walkable TOD in the immediate station area. Such stations should not, however, limit themselves to the park-and-ride typology that assumes all station access will be by car. Sound Transit 2 dedicated $75 million to a flexible station access fund that allows local jurisdictions to invest in pedestrian and bike access improvements instead of traditional park-and-ride facilities.

However, for some jurisdictions, the environmental impact statement process will bring the opportunity to consider alternatives to freeway alignments. As with the case of Bel-Red, Portland’s Westside and Rosslyn-Ballston, forward thinking on the part of local planners and elected officials can have transformative impacts on cities. Light-rail alignments through existing neighborhoods and city centers offer unparalleled economic development opportunity by connecting other residents, employees and consumers throughout the region to the local jurisdiction. Where such opportunities exist, cities should proactively consider them, through public dialogue and planning, even years in advance of the EIS process.

Planning for transformation is an enormous task. To help with that effort, Futurewise is collaborating with regional organizations to produce a “Blueprint for Transit-Oriented Communities” that will include examples of innovative approaches to station-area planning, as well as strategies to provide affordable housing and encourage sensitivity to neighborhood context in new development. The report, available free this fall, will be a resource to local planners, elected officials and station-area community members.

The opportunity presented by Sound Transit 2 is tremendous. The Seattle region can transcend Portland and Washington, D.C., in building a world-class transit system that efficiently moves people, creates economic value and leaves a smaller carbon footprint. The most important decision is to locate the stations where they can do the most good.

The lesson from Virginia is that the upside from TOD can be tremendous, and as with Bel-Red, it will take putting transit in the right place and a financial partnership with local governments to realize them.

How will you decide?

GB Arrington is principal practice leader of Parsons Brinckerhoff’s PlaceMaking group and an industry thought and research leader. Sara Nikolic is co-director of Futurewise, a statewide smart growth advocacy organization working to promote healthy communities and cities while protecting farmland, forests and shorelines.

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