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Home on the rails – FasTracks stops could be hubs for retail and housing

Imagine dropping your husband at a suburban light-rail station, and without getting back in the car, doing the same with your laundry at a dry cleaner. You then take your 9-month-old daughter to a 9:30 a.m. movie at the theater down the street. After the flick, you eat lunch at one of the many restaurants around you. Your waiter walked to work, as did the restaurant’s owner.

By John Rebchook, Rocky Mountain News

http://www.insidedenver.com/drmn/real_estate/article/0,1299,DRMN_414_3224996,00.html

That kind of vignette is the promise of a growing urban planning concept called transit-oriented development, or TOD. It’s the type of urban building that planners would like to see grow up around the metro area’s multibillion-dollar FasTracks initiative.

The TOD concept is already taking root along several light- rail corridors in the city.

"Transit-oriented development gives us the opportunity to focus our future economic development, rather than let it sprawl across the landscape," said Denver Mayor John Hickenlooper.

Next Friday, Hickenlooper will be one of the keynote speakers at the final Urban Land Institute- Colorado workshop on TODs. The ULI workshops have primarily focused on TOD opportunities and challenges around FasTracks, the $4.7 billion transportation initiative facing voters on Nov. 2. The workshop will begin at 7 a.m. at the Marriott City Center.

The series of workshops by the ULI, a nonprofit real estate think tank and consulting group, began in February. The workshops have featured local architects, developers, planners, public officials, as well as experts from throughout the country.

All about the D

"We want to put the emphasis on the D (Development) in TOD, and not the T, (Transportation)," said developer Will Fleissig, co-chair of the ULI events.

The Regional Transportation District is asking voters in the seven-county district on Nov. 2 to approve a 0.4-cent increase to the existing 0.6-cent sales tax – to a full 1 cent on $1 – to help pay for FasTracks.

Critics say that is a 67 percent tax increase and too expensive.

FasTracks, which would add more than 119 miles of light rail and commuter rail and construct 18 miles of bus rapid transit, is one of the nation’s largest transportation initiatives going forward this year.

Hickenlooper said cities often tell developers where they can’t build. But with TODs, "you have incentives to where you should build. It’s a way for people to be able to buy a newspaper or see a movie without having to get into their cars."

In the metro area, there already are completed TODs, such as CityCenter Englewood, built on the 55-acre site that formerly housed the Cinderella City mall. It now includes more than 880,000 square feet of development with 440 apartment units, 330,000 square feet of retail space, 300,000 square feet of offices and 50,000 square feet of restaurants – all within walking distance of the Southwest light-rail line.

‘Scratching the surface’

Some TODs also are under way along T-REX, the widening and light-rail addition along Interstate 25. For example, Pacific Properties of Las Vegas is developing a 291-unit apartment project and 16,500 square feet of retail in a $55 million TOD at East Hampden Avenue and I-25, near the Southmoor light-rail station.

But these just scratch the surface.

Fleissig, a principal of Denver- based Continuum Partners, estimates that 200,000 residential units – the equivalent of two Auroras – eventually could be built around FasTracks’ stations and corridors. And the equivalent of all the commercial space in downtown Denver could be spread among 30 or 40 new urban villages built around light-rail stations.

A national study released last week, which used the Denver area as one of its case studies, put the potential number of households in TODs by 2025 at 88,187, a 400 percent increase from 2000.

But that estimate is conservative, said Shelley Poticha, the executive director of the Center for Transit-Oriented Development in Oakland, Calif., which collaborated on the Hidden in Plain Sight report.

Apparently the only transportation initiative in the country that voters will decide this fall that is larger than FasTracks is the $15.8 billion Proposition 400 in Maricopa County in Arizona.

That proposal for the Phoenix area calls for 344 miles of new or improved freeways, 275 miles of new or improved arterial streets, 34 improved intersections, 40 new regional bus routes, 2,100 new buses, 1,200 new bus pullout lanes, 127 new miles of already approved light rail, 1,000 new dial- a-rides and 38 new park-and-ride lots.

"I think FasTracks is far ahead of what Arizona is looking at," Poticha said. "FasTracks would put Denver way up in the forefront as far as transit-oriented developments. It’s just a phenomenal opportunity. I’ve never seen anything like it."

Gates TOD crown jewel

TODs have been discussed in urban planning circles for more than two decades, but the acronym has yet to gain widespread popularity.

But TODs are an important part of the New Urbanism concept to make communities more pedestrian friendly. These days, in the Denver area and across the country, almost every new housing community, even those in the suburbs, is labeled as a New Urbanism- style development.

"(Urban planner) Peter Calthorpe and I used that term in the 1980s, but I’m sure a lot of other people were talking about transit-oriented developments, too," Poticha said. "It’s a term that probably fits better in the transit planning world than in the general lexicon."

Probably the largest TOD on the drawing board in the metro area, at least in terms of dollars, will be the redevelopment of the former Gates Rubber site west of Broadway near I-25.

It could have a completed value over the next 20 or 30 years of $1.5 billion.

Ferd Belz III, the president of Cherokee Denver, which is redeveloping the 50-acre site, said he is working closely with 12 neighborhood groups and three business associations to make sure that it blends seamlessly with established nearby neighborhoods.

"I think the concept of transit- oriented development is that it really needs to work for the entire neighborhood," Belz said. "In my mind, our project will not be a success unless we can embrace all of those areas around us. We want to make it easy for the people in the surrounding neighborhoods to walk here and ride their bikes over here and shop at our stores and eat at our restaurants."

Harry Frampton, principal of East West Partners, a real estate development firm based in Beaver Creek, and the current chairman of the Washington, D.C.- based ULI, said that TODs will increasingly become a tool for accomplishing smart growth.

"No question, it is something we should do more of," Frampton said. "It’s no magic bullet. But I think FasTracks and transit-oriented developments are an important step for the region to take."

He disagreed with critics of FasTracks, such as Gov. Bill Owens and Jon Caldara, president of the Independence Institute in Lakewood. They have said FasTracks is an expensive, ineffective boondoggle.

"It’s going to end up looking cheap," Frampton said. "It’s just like people who said that DIA was too expensive. And I’m sure 100 years ago, people said it was too expensive to bring the railroads to Denver."

‘Grab your wallet’

Caldara is not so sure.

"Whenever I heard transit-oriented development, I grab my wallet," Caldara said. "The problem with transit-oriented developments is they require big taxpayer subsidies."

Randall O’Toole, a national critic of high-density, New Urbanism-style communities, also is critical of TODs.

"A transit-oriented development is essentially what we call faith-based transit plans that try to redesign an area to the way it was before we had cars," O’Toole said. "But that is not the way life works. Even with transit-oriented developments, people still end up driving."

O’Toole also said they require subsidies. For instance, he said, Belmar in Lakewood has $47 million in subsidies and Stapleton has received at least $93 million in subsidies.

Byron Koste, executive director of the University of Colorado Real Estate Center at the Leeds School of Business, dismissed those criticisms "as absolutely absurd." He said he has witnessed smart growth at TODs in Atlanta and Washington, D.C., and has seen sprawl take hold in other parts of those cities, where homeowners didn’t have the choice of taking public transportation instead of their cars.

Koste said the biggest problem with TODs is that every city and developer wants highly prized retail on each site. Retail is in high demand because it is the most valuable type of commercial real estate and because it generates sales tax revenues for cities. Koste said that cities must be willing to share retail revenues in order to avoid those fights.

Fleissig, the developer of Belmar and 16 Market Square, an office, retail and housing building in downtown Denver, said his personal experience flies in the face of criticisms lobbed at TODs.

"We have slightly lower parking ratios at 16 Market Square than most office buildings downtown, and that has never been brought up even once by a tenant, because we are next to a light-rail station," Fleissig said. "We’re probably one of the only major buildings downtown that is 100 percent leased, and we charge some of the highest lease rates downtown. We’re seeing even in this down cycle that being close to light rail gives us a competitive advantage."

Households in transit zones

Potential Percent Region 2000 2025 change

Los Angeles 263,470 1.75 million 565

Charlotte, N.C. 9,810 64,743 560

Memphis, Tenn. 7,961 50,177 530

Denver 17,450 88,187 405

Washington, D.C. 246,370 650,417 164

Chicago 812,477 1.45 million 78

Cleveland 53,383 89,274 67

Source: Hidden in Plain Sight report by Reconnecting America’s Transportation Networks

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