In early June, The Moinian Group detailed plans for a 1.8 million-square-foot trophy tower between 34th and 35th streets near the Hudson River on Manhattan’s far West Side. Dubbed 3 Hudson Blvd., the project faces formidable competition. Just a block away, The Related Cos. is planning to build more than 6.8 million square feet of office space as part of Hudson Yards, a 26-acre redevelopment of space above the rail yards near the Hudson River.
But Moinian Group CEO Joseph Moinian has reason to be confident that there will be enough tenants to fi ll his building as well as Related’s planned towers. Next June, New York City’s biggest subway station is scheduled to open nearby. By providing a link to the mass transit system, the station will make large-scale commercial development feasible in the neighborhood for the first time. Accordingly, billions of dollars of investment are on the way.
New York City developers are famous for leveraging transportation hubs, but innovative transit-oriented projects are springing up around the country. Elected officials, urban planners and environmental officials all like the potential to blend economic development, community building and sustainability.
“One of the things that people are now beginning to realize is that while historically there’s generally been resistance to development, the reality is that dense development close to transit is good for the community,” observed Paul Paradis, a senior managing director in Hines’ San Francisco office.
Hines and Boston Properties Inc. are teaming up to develop Transbay Transit Tower, a 1.4 million-square-foot office building adjacent to the $4 billion Transbay Transit Center in San Francisco’s Financial District. When completed in 2016, the 1,070-foot-tall building will be the tallest on the West Coast.
Among the most striking trends in transit centered development is its emergence in places where mass transit has often taken a back seat. “The market wants to go to TOD in most parts of the country,” contends Rachel MacCleery, vice president for infrastructure at the Urban Land Institute. Los Angeles, Orlando, Phoenix, Salt Lake City, Dallas and Denver are among the places with big transit-oriented projects in the pipeline:
1. Florida’s 61-mile-long SunRail commuter line is fostering proposals like Rida Development Corp.’s Central Station, a proposed $200 million project in Downtown Orlando.
2. Ryan Companies US Inc. and Sunbelt Holdings unveiled plans in June for Marina Heights, a $600 million mixed-use project in Tempe, Ariz. Called the biggest office project ever proposed for Arizona, it would include a 1.9 million-square-foot office campus anchored by State Farm. A light-rail station at Sun Devil Stadium is a few blocks from the site.
3. In Rockville, Md., the White Flint station on the Washington Metro is the linchpin of Pike & Rose, a 3.4 million-square-foot office, retail, multi-family and hotel project planned by Federal Realty Investment Trust. Thanks to its formal designation as transit-oriented by the state and by Montgomery County, Pike & Rose is eligible for fast-track approvals, tax credits, planning funds and other incentives.
In some locations, commercial development is running behind the growth of the rail network. “Salt Lake City has done a superb job of building their transit system,” said Scott Bernstein, president of the Center for Neighborhood Technology, a Chicago-based research organization. “They’ve done a so-so job of paying attention to the areas around the station.”
Nevertheless, the newcomers are working hard to catch up. In metropolitan Salt Lake City, a showcase example is Vista Station, a 1.8 million-square-foot office, retail and multifamily project taking shape next to a stop on the region’s new rail line, the FrontRunner. “Our municipal and state governments are getting very proactive in doing what we need to do as a strategy along the Wasatch Front to create jobs,” contends Greg Pavich, a vice president for Coldwell Banker Commercial, the property’s leasing agent.
Vista Station’s first phase features eBay’s nearly complete $110 million, 200,000-square foot regional headquarters. “EBay chose Vista Station because of its transit-oriented nature and because it’s able to be a live-work-play environment for their employees,” explained Brandon Fugal, a Coldwell Banker executive vice president.
Though no two successful transit-oriented developments are exactly alike, there is much agreement about many of the basic ingredients. Density, walkability, support from elected officials, expedited permitting and a variety of uses that create a destination top the list. While rail is usually part of that mix, some experts urge a broader view. “Bus rapid transit has the potential to catalyze development, too—or at least support it,” said MacCleery. In Pittsburgh’s East End, for instance, Mosites Development Co. plans to build a new bus terminal, 360 residential rental units and 54,000 square feet of retail space. Dubbed Eastside Liberty Transit Center, the $75 million project is viewed by city officials as a catalyst for investment.
Considering the variety of projects labeled “transit-oriented,” a look at the term is illuminating. A rule of thumb holds that such assets should be within a half-mile of a rail station or major bus line.
Aaron Miripol, president & CEO of the Denver-based Urban Land Conservancy, says projects should be closer—on the same block as a bus stop, or a block or two from a rail station. His reasoning: “Realistically, are folks going to walk half a mile to a rail station in the winter from a property that we have purchased for redevelopment?”
On that principle, in 2011 the non-profit organization bought a parcel adjacent to the Evans Light Rail Station in south Denver and held it in trust for a future project that could benefit the community. ULC used capital from the Transit-Oriented Development Fund, a public-private initiative said to be the first dedicated to transit-oriented affordable housing.
In 2012, Medici Communities L.L.C. bought the parcel to develop 50 units of affordable housing. ULC has also invested $14 million in parcels along the 12-mile-long West Rail Line, which opened in April and links Downtown Denver to Golden, Colo.
Denver, Salt Lake City, Pittsburgh and their counterparts around the country promise to serve as vibrant workshops for the next generation of projects linked to rail and bus hubs. But they will by no means corner the market on innovation.
Declared MacCleery: “Even in communities that have longstanding transit systems, there is still opportunity for transit-oriented development.”