Alternative Approaches to
The Joint Development
Planning Process
by
William Lee Schwartz
B.A. Clark University
(1981)
SUBMITTED TO THE DEPARTMENT OF
URBAN STUDIES AND PLANNING
IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE
DEGREE OF
MASTER OF SCIENCE IN TRANSPORTATION
at the
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
June 1984
William Lee Schwartz 1984
The author hereby grants to M.I.T. permission to reproduce and
to distribute copies of this thesis document in whole or in part.
Signature of Autho
Departmert of'TJrban Scud,es and Planning
June 29, 1984
Certified by
Ralph Gakenheimer
Thesis Supervisor
Accepted by
_
Amedeo Odoni
Chairman, Master of Science
in Transportation Committee
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ALTERNATIVE APPROACHES TO THE JOINT
DEVELOPMENT PLANNING PROCESS
by
WILLIAM LEE SCHWARTZ
Submitted to the Department of Urban Studies and Planning
on June 29, 1984 in partial fulfillment of the
requirements for the degree of Master of Science in
Transportation
ABSTRACT
Joint development is defined as the joint use of a transportation
Transportation agencies which
facility for real estate development purposes.
to
joint
own developable land can take one of several approaches
These approaches depend upon two factors: 1) the level of
development.
transportation agency pursues development
which
a
with
activity
environment within which
opportunities, and 2) the interorganizational
projects are developed. Assuming an active approach, a transportation agency
may choose one of three institutional approaches: the cooperative agreement,
These
the internal department and the independent development corporation.
approaches, which have been applied successfully in Washington, D.C., Los
Canada, have strengths
Angeles, California, Baltimore, Mary-land and Toronto,
and weaknesses as well and unique implementation requirements.
In most cities, because the planning functions necessary for joint
decvelopment are shared by a group of agencies rather than by a single
within an
development entity, a joint development program must be coordinated
A
major conclusion drawn from the
established institutional framework.
analysis is that coordination between participants in the joint development
process must take place at the earliest possible time. There is no single
approach which is most appropriate in a general sense, but the theme of early
coordination applies to any joint development strategy.
Thesis Supervisor: Dr. Ralph Gakenheimer
Title: Professor of Urban Studies and Planning
-2-
TABLE OF CONTENTS
Page Number
Chapter/Section
Chapter One
6
INTRODUCTION
6
Defining Joint Development
Activity Levels
Value Capture
Equity
Model of Institutional Approaches to Joint
Development
1.6 Thesis Organization
7
8
10
10
Chapter Two
15
1.1
1.2
1.3
1.4
1.5
THE
2.1
2.2
2.3
2.4
2.5
HISTORY OF JOINT DEVELOPMENT IN THE UNITED STATES
Introduction
1960 to 1980
Urban Initiatives Program
Review of the Literature on Joint Development
Summary
11
11
15
17
18
21
26
30
Chapter Three
THE JOINT DEVELOPMENT FRAMEWORK
3.1 The Benefits of Joint Development
3.2 The Participants, Their Objectives and
the Risks of Joint Development
3.3 Capabilities Needed to Coordinate Joint Development
3.4 The Institutional Framework for Joint Development
30
33
38
40
Chapter Four
46
WASHINGTON, D.C. CASE STUDY
4.1 Introduction
4.2 System Construction
4.3 Participants in The Station Area Development Process
4.4 The Internal Joint Development Department
46
47
49
53
4.5 WMATA Joint Development Projects
4.6 Preliminary Findings
61
65
Chapter Five
69
LOS
5.1
5.2
5.3
ANGELES CASE STUDY
Introduction
Implementing a Joint Development/Value Capture Program
Agency Interaction
-3-
69
72
74
Page Number
Section
5.4 Agency Responsibilities for Joint Development
Coordination
5.5 The Master Planning Process
5.6 Preliminary Findings
77
79
80
Chapter Six
83
STATION AREA DEVELOPMENT IN BALTIMORE, BOSTON AND TORONTO
6.1 Introduction
6.2 Joint Development in Baltimore
6.2.1 Transportation and Development in Baltimore
6.2.2 The Coordination Process
6.2.3 Preliminary Findings
83
84
85
87
88
Development in Boston Massachusetts
Introduction
The Boston Transportation Controversy
Planning Station Area Development
Preliminary Findings
90
90
91
95
97
6.3 Joint
6.3.1
6.3.2
6.3.3
6.3.4
Development in Toronto
Coordinating Joint Development
The Participants
The Benefits of Transit-Related
Development in Toronto
.
6.4.4 Preliminary Findings
6.4 Joint
6.4.1
6.4.2
6.4.3
100
101
103
104
107
110
Chapter Seven
SUMMARY FINDINGS AND POLICY RECOMMENDATIONS
7.1
7.2
7.3
7.4
7.5
Planning for Joint Development
Summary of Major Points
Evaluation of Institutional Approaches
Policy Recommendations
The Outlook for Joint Development
Appendix A
Development
110
111
113
115
117
The Impact of Washington Metrorail on
119
Bibliography
122
Acknowledgements
125
-4-
TABLES AND ILLUSTRATIONS
Tables
Applications of Institutional Approaches
1-1
to the Case Study Cities
4-1
Figures
1-1
3-1
4-1
4-2
4-3
4-4
5-1
5-2
6-1
6-2
6-3
6-4
6-5
6-6
Page Number
12
WMATA Station Area Development Projects
62
Continuum of Joint Development Activity Levels
Model of Agency Intractions in the Joint
Development Planning Process
Washington Metrorail System
Metro Structure
Flow Chart of WMATA Joint Development Process
Farragut North Station
Los Angeles Metro Rail System (Proposed)
Interactions Between Agencies in the
Cooperative Agreement
The Baltimore Rapid Transit System
The MBTA Rapid Transit System
The Southwest Corridor Transit Project
Joint Development Opportunities in the MBTA
The Toronto Transit System
Downtown Subway Connections and Walkways
9
-5-
44
48
51
57
63
71
76
86
92
94
99
102
105
Chapter One
INTRODUCTION
and
planners
Urban
relationship.
where
transportation
development;
by
conflict
this
without
access
promoting
is
the
of
consideration
this
development
intensive
at
and efficiencies of space and
good
At the focal point of these
scale are maximized.
joint
understood
have
the past twenty years, some municipal governments have been
In
trying to reconcile
nodes,
have been developed
States,
United
the
estate
real
However, many cities, especially older cities
century.
throughout the past
in
of
the relationship between transportation and land development
of
significance
developers
the process of
is
efforts
with
the coordination of transportation investments
land
development investments.
The
development of real estate along transportation facilities has a long
history.
In
promoting
the
the
past two decades, the public sector has become involved in
development
of
organizations (especially in new
returns
or
to
the
sector,
public
owned
by
efficient
efficiency
can
utilization
also
result
of
in
the
Real estate
system development can generate
station
improve
facilities, and (most importantly) promote efficient use
more
transportation
public
expanding transit systems).
coordinated with transit
development which is
financial
property
transportation
of
system.
terminal
and
land,
leading to
This
higher
higher development densities, providing
improved return on investment to developers.
-6-
an
a usable tool for urban land use
Although joint development is considered
a
planning,
range
wide
the
coordinating
for successful implementation of joint development is the
Through
of this thesis.
five
for
exist
North
case
the
explores
D.C., the thesis
in
the
Angeles,
Toronto
and
interrelationships
between
the
Los
participating
institutional
approaches to the joint development
these
to
Alternative
joint development process.
organizations
examined with respect
subject
of the joint development process in
studies
cities: Baltimore, Boston,
American
Washington,
joint
The range of available options and the
development process.
strategies
options
of
each
cities,
of
process
coordination
which
are
has used different
strategies in response to unique political environments.
1.1 Defining Joint Development
There
are
several
definitions and activity levels associated
joint development planning 'process.
definition,
involves
the
estate development purposes.
planned
for
construction
joint
use
Joint
of
to
in
its
the
broadest
a transportation facility for real
It can be applied
and
development,
with
to
improvements
transit
to
projects
system
existing,
previously
undeveloped station facilities.
Some confusion
exists regarding the role of public/private cooperation in
the joint development
private
development
process.
Most
joint
development
projects
on publicly-owned transportation property.
involve
This thesis,
which focuses on the public role in the joint development process, considers
-7-
facility for a complementary or joint use
the development of a transportation
in cooperation with the private sector as the appropriate definition.
1.2 Activity Levels
The
role
taken
by
the
public
sector
in
promoting
transportation facilities ranges from active coordination
at
development
promote
Developers can then design and
planning decisions.
with
concert
planners
developers to participate in
inviting
by
at
no coordination
For transportation projects which are under construction,
all.
can actively
in
to
development
construct
their
project
the transit station development and the revenues from these
projects can help pay for the costs of construction.
facilities
At transportation
rights
or
adjacent
development of these parcels.
parking
lots
or
land
Most
air
or
planners
can
promote
of this type are constructed at
projects
space
complete but where air
already
not yet developed,
is
property
are
which
above
the
transportation
facility
In older transit systems many joint development opportunities
right-of-way.
occur at station parking lots and easements over station property.
A transit authority
to
approach
Canada,
the agency, rather
the Toronto
combination
proposals are
can also take a less active role, allowing developers
of
Transit
activity
than
soliciting
Commission's
levels.
At
proposals.
development
some
stations,
program
In
Toronto,
includes
a
developer-initated
received, while at others, the TTC development staff identifies
development opportunities and solicits proposals for the agency.
-8-
The
least
active
cooperation between
funded
transit
type
the
of
joint
by
involves
public and private sectors.
improvements
were
constructed
windfalls associated with development
captured
development
adjacent
this
manner,
value.
no
and
any
transit stations were not
the public sector other than through tax revenues
increases in property
or
Traditionally, publicly
in
to
little
generated
by
These levels of activity are illustrated by a
continuum in figure 1-1
Figure 1-1
CONTINUUM OF JOINT DEVELOPMENT ACTIVITY LEVELS
LOW ACTIVITY
HIGH ACTIVITY
Projects Under Construction
Projects Already Constructed
ACTIVE COORDINATION
Developers are invited to build projects.
LESS ACTIVE COORDINATION
Sites are prepared for
later development,
ACTIVE COORDINATION
Joint construction
efforts.
In sum, an agency constructing
agency
which
owns
valuable
promote joint development.
partial
source
of
stations,
land
and
values
transportation
transportation
property
for
an
is in the position to
can
serve
as a
can be a catalyst for increased
promising development opportunities.
are
or
capital and operating costs, and for new or
the public investment
joint development projects
NO COORDINATION
Development may
or may not occur.
rights-of-way
The revenues from these projects
subsidy
reconstructed
new
LESS ACTIVE COORDINATION
Developers approach
transit authority.
simply
land values for public benefit.
-9-
Publicly
initiated
one means to capture the increases in
1.3 Value Capture
Value capture is defined as the process
by which the public shares in the
economic benefits from publicly funded improvements
of
value
capture,
sharing,
which
include:
districts,
which
is also referred to as cost recovery,
joint
1)
are
development;
to
established
2)
assess
special
tax
increment
level)
value increases
landowners.
the
to
value
created
a specific use.
associated
with
but
a
benefit
assessment
a
fee
for
a transit system; and,
incremental
tax
development (above a
new
In the past, windfalls
from
land
transportation improvements went to private
Through property taxes,
windfalls,
by
or
owners
financing, which involves dedicating the
revenues generated from
predetermined
as
Examples
benefit
property
"benefitting" from the new public improvement such
3)
and facilities.
municipalities
recouped
some
of these
innovative value capture techniques have only been used
over
the past few decades.
1.4 Equity
There are different
property
adjacent
views
on
the
equity
of
speculative investment,
additional taxes.
However, policymakers
these
to
development.
development,
value capture.
to a transit facility, who will argue
land value are the result
landowners
of
help
pay
development process.
often
wish
to
increases
common
arise
levy heavier taxes on
objective
between
the
in
to
control
transit system
participants
It is central to this thesis, however, that value
-10-
in
may be unwilling to pay
the public expenditures or
for
While value capture is a
conflicts
may
that
Owners of
in
the
capture
is
a
public
and
right,
characterized by cooperation and
useful
tool
for
allowing
the
that
within
sharing
of
a
environment
negotiating
value
benefits,
is a
capture
to benefit from incresed land values
public
associated with public improvements.
1.5 Model of Institutional Approaches to Joint Development
approaches
There are three types of institutional
each
reflecting
Corridor
joint development,
different interorganizational environments. These
the
Cooperative Agreement,
Transit
to
Internal
Joint
Development
in
Table
1-1.
Each
the
Department, and the
Development Corporation (TCDC). The applications
approaches are summarized
are:
approach
is
of
these
defined
and
analyzed in detail in chapter three and within the case studies.
1.6 Thesis Organization
The
case
study
analyses are addressed in the context of issues relative
including, strategies for the management of
process
to the joint development
risk, the role of the participating
public and private organizations, and the
appropriate level of interaction between
project
construction.
the selection
participants
Underlying these issues is
both before and during
a general
question
as
to
of an appropriate strategy for achieving transportation related
development goals.
"choice framework"
The
model
of
for this question,
institutional
is
approaches,
which is the
the central theme of the thesis.
-11-
Table 1-1
Applications of Institutional Approaches to the Case Study Cities
Chapter
Transit System
Approach Used
Number of Projects
Notes
Internal Department (Department
of Planning and
Development)
7 Joint Development
6 System Interface
Four
Washington, D.C.
Metropolitan Area
Transit Authority
(WMATA)
Metrorail
The development
department operates
without formal agreements but has an
extensive internal
review process.
Cooperative Agreement between SCRTD
and other city
agencies
17 projects proposed
Five
Los Angeles, CA
Southern California
Rapid Transit Dis-trict (SCRTD)
Metro Rail
The agreement reached
between these agnecies
established a threetiered interaction
process to coordinate
development.
Baltimore, MD
Market Center
Development Corporation (MCDC)
Transit Corridor
Development Corporation
Several development
projects at two downtown stations
This is one of two
TCDC's to be established in the US.
Six
The agency is housed
in the Baltimore Dept.
of Housing and Commun:
ty Development
Six
Six
Boston, MA
Massachusetts Bay
Transportation
Authority (MBTA)
Numerous projects in
Approach is under
development- will Southwest Corridor +
be a combination of 13 other projects
cooperative agreement and internal
department
Toronto, CANADA
Toronto Transit
Commission (TTC)
Combination of internal department
and cooperative
agreement
Only one project has
been constructed to
date.
Numerous large-scale
Nine of fifteen
projects at both subur- downtown stations are
ban and downtown loca- accessed via shops.
tions
A
history
presented
of
in
joint
chapter
development
two.
and
interorganizational
review
of
the
literature is
Chapter three is a description of the framework
for coordinating the joint development
The
a
dynamics
process
and
(from
a practical approach).
institutional
approaches
to
joint
development are also introduced.
The
case studies presented in chapters four and five provide examples
the first
two
of
chapter three.
in
the
approaches
to
joint development described in
The Washington Metropolitan Area
chapter
four,
successfully
three
uses
the
internal
Transit
department
Authority, analyzed
approach,
WMATA
has
developed several station sites while operating within a complex
and fragmented
organizational
chapter
which
five,
provides
environment.
an
excellent
The
Los Angeles case study in
example
of
the
cooperative
agreement approach to joint development, traces the evolution of this
and
of
outlines
the
anticipated
functions
of
each
of
the
program
development
organizations.
Three short cases
first
example
unique
transit
alternative
to
presented
in Chapter six.
of a transit corridor development
Maryland; 2) the
corridor
are
project
a
major
coordination
in
process
Boston,
expressway);
corporation
Baltimore,
(constructed
3) the earliest examples
publicly-managed joint development program in Toronto, Canada.
-13-
in
used to develop the southwest
Massachusetts
and,
These describe: 1) the
as
of
an
a
Of
the
in
Development Corporation, has been implemented
one
of
cities
few
the
only two cities: Baltimore,
unique
The Baltimore case is
Maryland and Portland, Oregon.
Corridor
Transit
the
joint development,
to
approaches
three
it
because
is
take advantage of the Urban Initiatives program
to
(described in Chapter two).
resulted
development
in
which
widely
program,
The Toronto joint development
is
closely
cited
as
exemplary, has
which
integrated with transit,
encourages high system ridership and generates revenues.
The
Boston,
opportunities.
(MBTA)
had
Massachusetts example is one of
passive role
a
projects to occur, but at
however,
the
missed
and
the
in
initiation
development
of
have
been missed,
allowing
coordination,
developers. Recently,
private
MBTA has embarked upon a station area development
although opportunities
emerging
the Massachusetts Bay Transportation Authority
Traditionally,
played
both
program
and
many parcels under MBTA control are
available for development.
Chapter
seven is
a summary
of
the
thesis
and
recommendations for future joint development planning.
-14-
an
outline
of
policy
Chapter Two
THE HISTORY OF JOINT DEVELOPMENT IN THE UNITED STATES
2.1 Introduction
transportation has been a major factor in the growth
of
The availability
their
development of cities in
and
the
In
form.
modern
eighteenth
late
access to new housing, employment and leisure uses such as amusement
century,
encouraged urban expansion.
parks outside of central business districts
Mass transportation
These
cars.
technological
were
first
was
in
by
horse-drawn
streetcars,
electric
by
replaced
development
provided
the
provided
century,
nineteenth
first
the
transportation for American cities before the coming of the auto age.1
brought convenient
areas
had
basic
In
electrification of street railways in the late 1880's and 1890's
the
Boston,
major
The electric streetcar,
urban transportation.
which began to operate in the late
street railway
to
transportation
previously
residential
areas
of the city. These
been limited to wealthy individuals who
could
afford
2
personal transportation to the downtown.
and
The rapidly growing industrial
States
networks
the
impetus
fostered
by
provided
was
for
manufacturing
urban
sectors
in the United
expansion. The growth of streetcar
entrepreneurs, many
of
whom
were
real
estate
speculators who wanted to attract new customers for their land. 3 By
purchasing large parcels of land
for
development
and constructing streetcar
lines to new housing, these speculators encouraged outmigration from older
-15-
parts of cities and facilitated the expansion of newer
urbanized areas in the
earliest form of joint development.
One of the most vivid examples of this phenomenon is
Los Angeles, between 1900 and 1910.
the
development
of
As historian Daniel Boorstein observes:
sprawl which characterizes modern Los Angeles
The urban
received its initial impulse from the designs of Henry
E. Huntington. In 1900, after inheriting a vast fortune
from his uncle,
Huntington began to extend streetcar
lines
in
all
directions
from
Los Angeles.
real
thousands
of
acres
of
Simultaneously, he purchased
estate along the lines and began developing residential
In this way, Huntington
and resort communities.
constantly recouped the costs of his car lines through
the sale of his real estate.
Eventually his streetcar lines, valued at $100 million
in 1910, extending 30 miles from the city, served at
suburbs
least 40 incorporated communities and added 12
to metropolitan Los Angeles. 4
Within large
as a productive means
of
commercial development.
in New York City was constructed
became
facilities,
the
New
in
York Central
1914.
when these land parcels were
Under
Railroad
including
the
The Grand Central Terminal
to
pressure
constructed
an
improve
its
elaborate
new
The track yard remained uncovered until 1928
developed
into office buildings and hotels.
acres of land owned by New York Central,
built,
recognized
the early 1900s after electrified trains
feasible.
technologically
terminal between 1900 and
29
land adjacent to
of
development
facilities in the early twentieth century was also
transportation
first
the
areas,
metropolitan
22
major
buildings
have
On
been
Pan Am Building, the New York General Building and the
Waldorf-Astoria Hotel. 5
-16-
examples of joint development projects were actually
Many of the earliest
system interface projects,
which
are
projects
that provide direct physical
connections of pedestrian, vehicular or visual access
or private development.
where
major
buildings
8
from
public
adjoining
System interface has been used in New York City,
such
as
Department
Macy's
store in Herald Square,
Madison Square Garden and the World Trade Center have direct
links
to subway
stations.
the
Throughout
continued
to
take
middle
of
advantage
facilities.
transportation
of
part
the
twentieth
development
century,
entrepreneurs
of
opportunities at the site
In many instances owners
of
adjacent
property
benefitted from access to the transportation system.
After the Second World War,
States
began
attributed
to
to
experience
secular
the
private
ridership
dramatic
increases in
transit
industry in the United
losses,
which
postwar family incomes,
auto ownership, and idyllic preferences for suburban living.6
a possible industrywide collapse
in
intervened,
been
rising rates
of
Concern over
mid-1960's and early 1970's brought
the
strong cries for public support of transit.
government
has
Responding
to
these concerns,
purchasing and consolidating existing transit
systems
The rebirth of transit had begun.
to create municipal transit authorities.
2.2 1960 to 1980
Before the
1970's,
many
of
the
system
interface projects and the few
joint developments did not return significant revenues
-17-
to
the public sector.
One
for this phenomenon was the reluctance of elected
explanation
to involve the government
investment
ventures.
Even when government
public
revitalization
had other priorities for the allocation of
often
9
During
this
Baltimore, Altanta
(which
profit-making
desirable for other purposes such as economic
was
of urban areas, the
resources.
in
officials
was
then
period, new transit systems
were
planned
for
Washington,
and other cities. Similar to the Interstate highway system
under
construction),
new
rail
transit
facilities
expected to provide increased land values around the stations.7
capture was viewed as
were
Value
a way to generate returns to public investments helping
to defray part of the cost
of
these new projects.
which
in the 1970's as one means through
value
Joint development emerged
capture could be achieved by
public transit organizations.
2.3 The Urban Initiatives Program
In
1974,
Congressman
Andrew Young,
region (the site of a new rapid
Urban
Mass
establishment
(TCDCs)
and
Transportation
of
Act
quasi-public
representing
the
Atlanta,
Georgia
transit system), introduced amendments to the
of
1964.
The
transit-corridor
amendment
development
allocated funds to be used for joint development.
three for a detailed decription of TCDCs.)
-18-
authorized
the
corporations
(See
Chapter
The Young amendments
basis for President Carter's 1978 Urban
the
program, a part of the 1978
Initiatives
expanded
became
federal
support
for
joint
Surface
development.
expenditures for preconstruction
activities
studies,
write
land
acquisition
and
connections, parking and street furniture.
of
(e.g.,
program
design
developments
and
allowed
engineering
(e.g.,
for
of
or
facilities
and
pedestrian
Funds were not available
revenue-producing
commercial
The
which
down, and real estate packaging)
items which connect transportation with land
construction
Act,
Transportation
the
public
facilities not related to public transportation.10
program,
The Urban Initiatives
a
institute
decade
Experiences
proved
more
resulted
from
early
efforts
to
joint development policy, created new interest in joint
federal
development.
which
joint
with
development
complex than anticipated.
the early part of the
in
Because the
opposing
forces
construction often lured development away from transit
from continued highway
facilities, many joint development
projects
failed
to
promote high-density
development at transit stations.
Urban Initiatives gave planners new tools to make incremental
in
transit
facilities
to
attract private development,
project implementation process.1
program
was
stagnation.
funded
during
a
the
in development projects, but the
period of high interest
rates
and
The result was a small number of successful projects.12
election of President Reagan in 1980
philosophy.
and streamlined
The Urban Initiatives program was
participation
designed to encourage private
investments
also
marked
a
economic
The
sharp change in federal
Federal suppport for public transportation was reduced and the
-19-
Urban
program
Initiatives
substantial tax reforms.
of
1981,
however,
was
dismantled.
Reagan
implemented
also
Certain provisions of the Economic Recovery Tax Act
made
joint
development
developers and provided significant tax
to
attractive
shelter
benefits
to
real
estate
investors
who
participated in real estate projects (see section 3.2.1).
The
dismantling
of
the
program
which
provided
station
area
development
Urban
policy
direction
efforts.
regarding joint development since
Initiatives
removed a valuable
to transit authorities
While UMTA
the
program
has
program
provide limited funding for efforts similar in
was
not
enacted
Philadelphia
Montreal
and
projects
were
Toronto.
in
the
projects separte from
many
States
and
development
transportation
evolved
organizations.
in
Washington,
in two Canadian cities:
In the short time since the first
completed, joint
capture tool for
United
into
publicly
a
Private
usable
are recognizing that many downtown areas
or
by
to
be
served
transportation
value
served
rail transit are experiencing a renaissance.
Developers have begun to recognize
with
planned
developers,
encouraged by tax incentives,
proposed
policy
purpose to Urban Initiatives.
the Urban Initiatives program had been successfully completed
and
a
changed, it continues to
By the end of the decade, several joint development
D.C.
regarding
facilities
opportunities
and
development 13
-20-
are
to integrate their projects
more
receptive
to
joint
Despite this optimistic
not
become
an
established
for
explanations
development is brief
to
transfer
ideas
and
and
capture mechanism.
value
The
this situation.
approaches from
and
of
history
There
publicly
one
managed
project
to
has
been
major factor causing
a
development from
varying perspectives and levels of effort. There are, however,
perspectives and approaches
are
any
in
situations
The
another.
transportation and development specialists to approach joint
certain
joint
difficulty of transferring lessons from
the
one joint development project to new sites
approaching
several
are
no two projects are alike, it is difficult
because
combination of inexperience
practice of joint development has
the
attitude,
described
These
framework.
development
in
strategies for
Chapter three and in the case
studies in Chapters four through six.
2.4 Review of the Literature on Joint Development
In formulating an analysis of the joint development
sets
of
bibliographic
(including
academic
orientation.
materials
research),
reviewed: 1) theoretical
were
and 2)
materials
The majority of the materials
have a practical, descriptive orientation.
very
process
of joint development is
interest tend to
process, two separate
have
which
published
joint
on
literature
a
practical
development
The reasons are threefold:
practice-oriented;
2)
1) the
areas of academic
be analytical or evaluative topics (for example, an analysis
of the land value impacts
of
transit
improvements
as
a
basis for special
value capture techniques); and, 3) practictioners of joint development
great demand for descriptive materials.
-21-
have a
With
of
exception
the
the
the
address
practically-oriented
Because
joint
most
development,
has
of
publications
it
which
are
more
transportation
theoretically-oriented:
planning;
further reading are:
&
Miller
and,
3)
1)
real
on
focused
on
practical
to analyze the process in
was necessary to review three discrete areas
detail,
Meyer
order
In
approaches to the development process.
have
the
research.
for simply-written "how to" materials
been
the
development
between
gap
the
bridges
joint
the
information and the analytically-oriented
demand
the
which
topic
to
approaches
alternative
a
process;
coordination
Tansit
the published materials do not
District-sponsored research findings,
adequately
Rapid
California
Southern
of
estate
organizational analysis.
analysis,
all of
development;
2)
Suggestions for
Wiedemer for real estate development economics;15
Altshuler
and
for
transportation
planning
and
policy
development;16 and, Beckhard and Kotter for organizational dynamics.17
Three
publications
on joint development written for practictioners
1) Transit Station Area Joint
Development:
Strategies
are:
for Implementation by
the Administration Management Research Association (AMRA);18 2) Joint
Development
Value Capture in Los Angeles: Local Policy
and
Formulation,
the Southern California Rapid Tansit District (SCRTD);19 and, 3)
Development: Making
the
Real
Estate-
by
Joint
Transit Connection, by the Urban Land
Institute (ULI). 20
-22-
The
the
given
that
and
development are significant,
proper
value
be
can
a
SCRTD's book focuses on the alternative
strategy.
capture
joint
environment and a
substantial amount of patience and perseverence, joint development
favorable
of
benefits
the
that
by the AMRA and ULI both argue
books
approaches to joint development and the station area planning process.
2.4.1
AMRA,
which
impacts
development, found that the land value
many cases are not significant.
They also found that:
improvements act largely to redistribute
Transportation
development within a region rather than to create new
development;
o
Positive land value impacts at transit station areas are
dependent factors in addition to transit itself; and,
o
to
the practice of joint development
difficult in
is
It
separate out the effects of transit from those of other
factors, particularly on a parcel-by-parcel basis.
21
argument
AMRA
construction of
new
a
is
valid.
basically
system
transit
If
implement
officials
achieved
in
strong
a
growth
benefits
transit
market,
beyond
a
to
transit
access
access
the
Chapter
is
likely
high
to have real
regional redistribution of development.
Officials must be cautious, however, not
increases
(see
In addition, if the development around a transit station is of
quality and
economic
planning
strategies to concentrate
development at transit stations, several goals can be
three).
and
of transit vary widely and in
o
The
transit
between
relationships
the
analyzed
to
attribute
excessive
land value
but must create a balance between transit
other factors.
-23-
and
study.
planning
institutional
Angeles.
The
issues
Having
authors
describe
associated
analyzed
the
with
resolution.
development
The
authors
a
actual
an
of
series
joint
development
joint
organizational
development
planning
and
in
Los
joint development projects coordinated in the
late 1970's and early 1980's, SCRTD
of
from
publication resulted
SCRTD's
2.4.2
identified
wrote
that,
a
"A
major problem area in need
major constraint
is the division of local jurisdictional
authority
to
with
joint
no
one
entity to oversee coordination of land use and transportation planning."22
that
SCRTD argues
transit authority must take an active approach to
the
joint development and have different
for project coordination.
In addition, the authors describe
Chapter five.)
beyond
options
a process which is extended
what was traditionally known as joint development,
overall process
as
(see
referring
to
the
a "station area development program." Because the process
includes other value capture
techniques such as system interface projects and
because the planning of transit
stations
includes
the
area around it, this
extenstion is appropriate.
2.4.3
The
seminal work.
Urban Land Institute's publication on joint development
ULI
is
a
research
developers.
The book was written
in response to what was perceived as "a paucity of information
reviews
the
implementation
planning
and
a
organization sponsored by the development
community whose research is oriented toward
development
is
on
process."
Through
case
studies,
negotiation
efforts
that
were
the
the
report
involved in the
execution of seven major projects in five United States and Canadian
-24-
joint
include
The case studies, which are oriented to private developers,
cities.
of
analyses
the
theoretical
the
describes
process.
participation
public
bases
for
joint
In
the
addition,
development,
defined
book
both in
practice and in theory:
In practice, joint development can be defined concisely as the
development of real estate projects in relation to public
transit stations...In theory, joint development is based on the
trade-off which business firms (or households) face between
Access to
rents (or location costs) and transportation costs.
a new transit
system reduces transportation costs and results
in higher rents at those stations.
A developer who pays for
the rights to develop what is presumed to be more valuable
intensively.
will want to use the property more
land,
use
is translated into greater density.
Intensity
of
Therefore, the theoretical definition of joint development is
based upon the agglomeration of people-intensive activities
around transit stations in order to mgimize the benefits of
reduced transportation time and costs.
ULI
the
categorizes
levels
of accessibility created by transit into
or
three groups: 1) improvement of general
provides
access
accessibility
to
area,
facilities
previously. unserved
a
area;
accessibility, which
2)
improvement
of
specific sites, particularly in downtown areas which are
at
and,
already developed;
downtown
regional
through
the
protect
which
improvement of internal circulation within the
3)
construction
from
of
inside
concourse-type
and promote interstore
weather
(Toronto and Montreal, Canada have utilized
traffic.
this technique extensively-see
Chapter six.) 2 4
Finally,
estate
the
ULI
development
report
categorizes the relationship
and transit station
1) air rights development
development
into
between
three
real
levels:
which requires large-scale planning, negotiation
-25-
development
and deal-making; 2) adjacent
or
across
and,
which requires less complicated planning;
station
3)
to
a
transit
area development
station as the focal point.25
at high densities
with
thesis
all three categories with
considers
the
next
transit
emphasis
an
on
air
(This
rights
development.)
The Urban Land Institute's
main
argument,
in the case studies and in
the conclusions in the book, is that the process of
more
than
complex
lessons
This argument is supported
in
joint
development
was
the
which
developed
Rapid
(see Chapter
there are
describes.
with
Transit District's approach
full
consideration
which occured in the Washington, D.C. joint
problems
book
is
the Los Angeles case study in Chapter five.
In Los Angeles, the Southern California
to
development
estate development projects;
learned from the experiences
be
to
real
ordinary
joint
for
the
process
development
and other cities described in the various publications
four)
on joint development.
2.5 Summary
The
evolution
approaches
to
Development,"
it
an
of
are
the
joint
well
article
development
summarized
in
field
"The
and
alternative
History
by Kenneth Cook of the Transportation
of
Joint
Research
Board. Cook concludes:
If by joint development we finally come to mean coordinated
land and transportation development, considering the impacts of
for joint
each
on the other, then the future prospects
development are good.
If we mean a method for identifying
mutually beneficial transportation improvements
to
land
then we will see
developers and transportation providers,
further use of joint development projects.
25
-26-
The
need
for
close
project
published materials on joint development.
prospects
the
for
Earlier
works were skeptical about
benefits of development at transportation
facilities,
while understating the
need for comprehensive station area planning and interagency
the more recent literature,
optimistic,
more
the
by Public Technology,
central
is
theme
Inc.
public
the
because public officials overstated
success
the
underlies almost all of
coordination
In
cooperation.
and by SCRTD,
which is
the coordination process, which is
described in the next chapter.
ENDNOTES
1
George M. Smerk, "200 Years in Transit,"
(July-August, 1976), pp. 4-9.
2
Sam B. Warner,
(MIT Press, 1962).
3
Streetcar
Suburbs:
The
Mass
Transit,
3,
No.
7
Process of Growth in Boston,
Ibid., p. 60.
4 Daniel Boorstein, Portraits from the Americans:
The Democratic
87,
cited by Robert Witherspoon,
1975),
p.
(Random House,
Experience
"Transit and Urban Economic Development: How Cities Could Use
in
Transit As a Development Tool; Why They Don't; What to Do About It."
Transit Journal, Volume 5, No. 2, 1979, p. 63-78.
5
Administration and Management Research Association
of New York
Strategies for
City, Inc., Transit Station Area Joint Development:
Volumes 1 & 2. (Urban Mass Transportation Administration,
Implementation.
1976), p. 47.
6
Robert Cervero, Intergovernmental
Responisbilities
for Financing
Public Transit, (Institute for Urban and Regional Studies, University of
Berkeley,
Urban Mass Transportation Administration, 1983), p.
California,
9.
7
Kenneth E. Cook, "Joint Development:
A Historical Perspective", in
Land Use and Transportation, (newsletter, Transportation Research Board,
1982).
-27-
8
Transit Authority,"Policies and
Area
Metropolitan
Washington
(Management
for
Station Area Development Activities,"
Procedures
Memorandum # 713) October 5, 1981.
9
Cook, 1982.
10
Edward Weiner, Urban Transportation Planning in the United States:
An Historical Overview, (United States Department of Transportation,
p. 70. This distinction remains significant today because UMTA,
1983),
acquisitions requires that all "surplus"
captital
which fincances
properties be sold, and the revenues returned to them. As a result, few
transit-related uses
"surplus" properties exist and are often put to other
as intermodal facilites, park and ride lots and other uses.
12
Institute with Gladstone Associates.
Urban
Land
Real Estate-Transit Connection, (U.S.
Making
the
Development:
p. 18.
1979),
of Transportation,
Joint
Department
12
Through the Urban Initiatives program, which lasted from 1978
through 1980, UMTA invested $49.5 million in nine joint development
While most of the projects have yet to be completed, a
projects.
preliminary review of these projects concludes that the money was well
spent. An analysis of cost per additional rider illustrates that UMTA
spent substantially less on urban initiatives than on capital expenditures
for rail construction projects. (see Keefer, 1983).
13
Greg Dahlberg,
Counsel to U.S.
on Appropriations, speech given at
Transportation Research Board.
House of Representatives
Committee
Meeting of the
Annual
1984
Joint
to:
Southern California Rapid Transit District,
14Refer
Local Policy Formulation,
Development and Value Capture in Los Angeles:
discussed in Chapter
(Urban Mass Transportation Administration), 1983),
three.
15
John P. Wiedemer,
Company, 1983).
Real Estate: The Money Angle, (Reston Publishing
16
Politics and
Transportation System:
Alan Altshuler, The Urban
Policy Innovation (MIT Press, 1979) and Michael D. Meyer and Eric J.
Miller, Urban Transportation Planning: A Decision Oriented Approach,
(McGraw-Hill, 1984)
Strategies and
Organizational Development:
Beckhard,
17Richard
Dynamics:
Organizational
Kotter,
Models, (Addison-Wesley, 1976) and John
Diagnosis and Intervention, (Addison-Wesley, 1978).
18
AMRA, 1976.
19 Southern California Rapid Transit District, Joint Development and
(Urban Mass
Local Policy Formulation,
Value Capture in Los Angeles:
Transportation Administration), 1983).
-28-
20
Urban Land Institute, 1979.
21
AMRA, (Volume II-Economic Case Studies), pp.
22
SCRTD, p.
23
ULI, p.
24
Ibid, p.
21.
25
Ibid, p.
22-23.
26
Cook, 1982.
11-6.
17.
-29-
1-5.
Chapter Three
THE JOINT DEVELOPMENT FRAMEWORK
The
process
approaches,
of
skills
joint
terms
of
the
necessary
a
variety of
This chapter decribes
relationships
joint development
A model
objectives.
their
to joint development'is
the interorganizational
of
capabilities
and
involved
participants
approaches
institutional
by
development planning, including the benefits resulting
from successful projects,
the
characterized
and complex, lengthy negotiations.
the framework of joint
planners,
is
development
introduced and dicussed
between
joint
of
in
development
agencies.
3.1 The Benefits of Joint Development
Joint development
can
in
assist
achievement of regional goals for
the
Two types of benefits are
transportation, urban design and economic growth.
associated with joint development:
2)
long-term
These
are
to
benefits
described
Estate-Transit
the
by
Connection,
direct,
revenue
producing
benefits and
and the public at large.
authority
transit
detail
in
1)
in
Joint
Development:
the
Urban
Land
Making
Institute
with
the
Real
Gladstone
Associates.
3.1.1 Direct
development
during
Benefits-
can
result
off-peak
hours.
in
A
successfully
increased
This
is
planned
and well-utilized joint
transit system ridership,
most
evident
at
central
especially
city
developments, which have proved to attract transit patrons as customers.1
-30-
joint
In
to
addition
revenues (through value capture) to a transit
generate
can
joint developments
increases,
ridership
agency from lease payments and,
of revenues
percentage
(a
if a project is successful, through overage rents
above a fixed level paid directly to the transit authority).
Transit
lines
are
authorities
construction
to
contribution
capture
value
at
looking
which are either expanding or constructing new
station
developments
joint
In
financing.
California Rapid Transit District
and
as
techniques
to
expects
the
Angeles,
Los
revenue
generate
of
source
a
rail
local
Southern
early
from
then finance a portion of subsequent system
expansion projects (see Chapter four).
3.1.2 Avoiding Disruption- During
system
lengthy
the
process
of rapid transit
construction the physical disruption to land adjacent to
can
right-of-way
coordinated
at
substantial.
be
A
joint
development
the
transit
project which is
the beginning of system planning can assure an early
balance
between transportation access and future use of the land near a station.
3.1.2 Long Term
value
created
by
Benefitsthe
Apart
combination
from
of
construction
rail
system
expansion and
development can provide a valuable resource for the future.
States,
the
Urban
Mass
Transportation
cost subsidies, the
In
station
the
Administration (UMTA) is the agency
which finances and administers most transit system capital improvements.
-31-
United
specify
requirements
grant
UMTA
acquisition costs (usually 80%)
is
if
that
sold,
for
property
funds
it
which
must return
then the grant recipient
the same percentage of the proceeds to UMTA.
a
As
result
sold. Instead the parcels are leased for long terms,
benefit of these leases,
the
system
built
are
the UMTA rules, very few joint development parcels
of
in
however,
the
is
1970s is
that
in
usually 99 years.2 The
when
in the late 21st century,
the
need of reconstruction,
transit
parcel of land which can be re-leased or sold
authority still owns a valuable
to generate capital funds for reconstruction.
3.1.3 Cost Efficiencies- In new
certain
projects,
project
elements.
are
savings
(International
transit system construction
If
a
joint
future
is
development,
planned
coordination
million dollars.
of
At
developer's
the
Washington
renovation
a
for
capital
site
foresight
led
of
Street
station
in
to
a
Bay
and
costs
Boston,
D.C.
combined
by
one
an efficient
construction efforts allowed the Jordan
department store and the Massachusetts
of
and operational
At one joint development in Washington,
possible.
Square),
development
the
effort that reduced the developer's construction
construction
sequencing
expanded
efficiencies are achievable through
construction plans incorporate
cost
or
Marsh
Transportation Authority to share
facililties and costs. 3
3.1.4 Growth Managementthe
promotion
A spinoff benefit
of
coordinated development is
of higher densities at or adjacent to station
locations.
incremental cost of providing city services and utility hookups to
-32-
The
these
sites
is
less
substantially
Other
development location.
include energy conservation,
than
the
cost
of
a
new
low-density
benefits of a more consolidated growth pattern
of
alleviation
auto-induced
pollution,
and the
preservation of open space.4
3.1.5
Developer Returns-
Increased
Private developers
see
an
return on investment as a primary benefit of joint development.5
results from improved access
analagous
to
those
and
charged
the
In
Toronto,
nene
higher
This
rents,
which
are
small retailers in a suburban shopping mall
of
which
anchored by a major department store,
2.2.2).
associated
increased
of
the
connected with shopping concourses.
is
the
attraction (see section
fifteen downtown subway
stations
are
stations, the shopping concourse
In some
is the only route to the station (see Chapter six).
3.1.6 Other Benefits- Joint development can
urban
design
and
community
amenities.
into the design of developments,
the
community level,
also
contribute
to improved
By incorporating transit facilities
a more harmonious design can result.6
help
can
joint development
achieve
land
use
At
goals,
provide a catalyst for urban (re)development and broaden the tax base.7
3.2 The Participants,
Each
objectives
of
the
their Objectives and the Risks of Joint Development
participants
in
the
development
process
has
a
set of
and risks relative to a project or group of projects. In planning,
goals and objectives
are
foundation
the
public/private partnerships it
is
of
public policy development.
essential that the objectives and roles of
-33-
In
A
a project.
of
inception
all parties involved be clearly understood from the
well structured joint development deal is one that meets the objectives
the public sector agencies, the developer, and the permanent lender.
with
any
real
estate
joint
project,
have
developments
of
As
risks; the
many
management of these risks is a primary objective of all actors involved.
The Developer- The real estate development end of joint development
3.2.1
project
including
resources
project
of
organization
coordinated
usually
are
negotiations,
and
the
coordination,
by
financial
the
private
Developer objectives fall into two categories, return on
developer.9
investment and professional reputation.
Return on investment is measured in terms
income
of three indicators: 1) the net
generated from the development, measured
debt service
from
revenues;
2)
the
by
expenses
deducting
and
appreciation in value, measured by the
profit from the eventual sale of a more valuable
development
in
the future;
and, 3) the sheltering of otherwise taxable income.
Tax
shelter
is
measured
depreciating a proportion
income before taxes.
is
a
negative
tax
of
the
by
the
asset
"on
each
paper"
year,
losses
deducted
derived
from the net
When the depreciation expense exceeds net income,
due,
which
from
there
enables the property owners to deduct these
losses from taxes due on other personal income.
The second objective of the developer,
reputation, is also important.
the
maintenance of a professional
Joint development projects receive high
-34-
exposure
Risks
and
often involve complex negotiations between
to the developer
project
costs,
include
unfavorable
possible
lease
many
construction
terms,
participants.
problems,
increased
and poor market acceptance. It is
important that the amount of risk to the developer
and investor is reduced to
an acceptable level in order to maintain a high standards of performance.
Developers constructing a joint development project
may
also
example,
in
Boston,
developable
is
parcels.
coordinating the first
The
In
Los
developer
Angeles,
major joint development for
Authority,
an
agency
which
owns many
may want to participate in these future
and a strong performance on the
six).
For
at the proposed joint development of the Route 128 train
the Massachusetts Bay Transportation
Chapter
a public agency
have an interest in continuing that professional relationship.
station, the developer
projects,
with
it
first
is
California Rapid Transit District that in
project
is
important
(see
the stated policy of the Southern
the
selection
process
for
future
ventures, it will favor developer teams who are successful in early projects.
3.2.2
The
development
Lender-
and
the
There
lenders
are
may
sources
syndications.
inviting
The
equity
availability
In
major
real
is obtained from insurance companies
and the pension funds of large corporations.
by
capital for large-scale
vary from project to project.
estate developments, long-term financing
raised
of
participation
Additional
through
capital
limited
is
often
partnership
of funds from either source is subject to an
assessment of the income and returns of a project.
-35-
Lenders
debt
of
assurance
require
is
yield a rate of return which
payments
conditions
in
the
interest
prevailing
When projects appear less promising,
markets.
capital
the
with
competitive
the
that
and
repayment
project income.
in
lenders require some form of participation
to a lender include a clouded title to the property,
Typical risks
market
poor
acceptance
Due to the
of the project, and constraining lease requirements.10
a
complexities of real estate deals in joint development, lenders may require
stable
stream
of
the
from
generated
income
project, referred to as a
a
participatory loan.
3.2.3
The
Lead
Public Agency- As described in Chapter
several public sector agencies
in
most
agency.
cities,
the
there
are
involved in the joint development process
and
transit authority
In cities where
several
serves
as
are
organzations
the
one,
main
involved
coordinating
in
the
joint
development process, control over development rights is sometimes a source
conflict.
In
committees
cases
of
control
disputes,
participants
can
form
of
joint
of
and intergovernmental agreements to formalize the coordination
development projects as in Los Angeles (see Chapter five).
Public
place
agencies
more
emphasis
on
policymaking
and
planning
objectives than on financial objectives.11 Risks to the public sector tend
to be measured in
political
terms
because
several
causes exist for project
failure, including that: 1) the proposal was not appropriate
the
chosen
developer,
project;
or,
developer
however
4)
was
unqualified
competent,
was
to
either
conduct
too
the
large
for the site; 2)
project;
3)
the
or too small for the
the real estate market was to "soft" to support the project.
-36-
agency include:
Typical joint development objectives for a public transit
1)
the generation of revenue;
of
maintenance
coordination
of
the enhacement of station facilities;
operations;
station
ridership.
transit
2)
At
zoning
4)
policies,
generation
the
level,
regional
the
local
and,
agency
promotion
3) the
of increased
include
objectives
controlled regional
of
economic development, and maintenance of the status quo with
respect
to
the
transportation network.
achievement
The
of
objectives is often difficult to measure.
these
many cities, the transit authority
achieve
must
objectives and transportation objectives.
may
a
yield
significant
promote
utilization
improve
transit
lease
level,
addition,
but
may
a
yet
not
project
may
projects
large-scale development
at
other
generate
roadway network is not designed.
vehicle trips for which the existing
regional
In
revenues
and generate
ridership
a development project
to the transit authority
transit system.
the
of
a balance between financial
For example,
payment
In
On the
transportation
nodes
should be complemented by policies which promote such development patterns.
3.2.4 Local Officialslocal
officials
for
prepare
understanding
sites
as
can
joint
the
constraints
of
regional
assist in the development process.
by
development
by
2) identifying
transportation facilities
transit
the
development
within
a
monitoring
authority
prospects
municipality;
can
projects
and
potential
which
by
and,
objectives,
Municipalities
potential
identifying
This includes
the process.
identified
jurisdiction;
Under
fall
development
under
surveying
3)
local
existing
establishing
formalized review and approval process within the extant local planning body.
-37-
a
officials, can
Local
public support for a joint development
build
help
project by demonstrating a commitment to
To prepare
and lenders.
developers
a site for joint development local officials can adopt
land
local
use plans
or amend zoning ordinances to encourage development of a site.
3.2.5-
Strategies
for the Management of Risk- Joint development projects
can be risky for both the
political
proponents
and
opponents of a project.
Local offcials who support a project through the expenditure
of
public funds
To
risk project failure and the associated political ramifications.
potential
the
project failure, public officials can assume some of
for
risk associated with the
reduce project
costs;
and,
cost
Localities
include:
space,
the
do this by reducing
can
Strategies
available
to
tax exemption or abatement; write-down of land
contributions of infrastructure
improvements
(see
Chapter four,
To create a market for a project, the public sector can
section 4.4).12
lease
development.
costs, or creating a market for a project.
project
minimize
support
prospective
tenants
by offering to construct
public
facilities such as parks, or provide other complementary facilities. 1 3
3.3 Capabilities Needed to Coordinate Joint Development
The
planning
Southern
functions
California
which
Rapid
are
Transit
station
interagency
siting
and
design;
representation;
6) permitting.
has
necessary for public agencies
planning
joint development: 1) comprehensive
2)
District
3)
real
identified
to
coordinate
and redevelopment coordination;
estate
project
packaging;
5) financial leveraging and value capture;
4
-38-
six
4)
and,
In most cities these planning
whose
roles
are
geared
to the task of
authority may
redevelopment
functions are shared by a group of agencies
have
each
project
For
function.
packaging
capabilities
agency may have interagency representation.
regional planning
of existing capabilities
is
one
reason
for
example,
while
a
a
The diversity
joint development
approaching
within an established institutional framework (see section 3.4).
The staff of a joint development agency should possess certain
institutional
and
capabilities.
The
joint development staff, including planners
negotiators, should have experience
Professionalism
is
skills and
in
real
estate
law
and
finance.
to private developers, who can be reluctant to
important
negotiate with public officials.
For example, in Toronto, Canada, one reason
for the successful joint development
program
is the professional approach of
the Toronto Transit Commission real estate staff (see Chapter six).
According
development,
resources
to
agreements
to
Public
Technology,
the
public
sector
1)
the
should
also
design
of
3)
enforce
its
1984
book
possess specific
the
facility,
other
on
powers
2)
enter
actors
joint
and
into
involved
those agreements, and, 4) market the completed
15
These capabilities are common
sector is to take an active part in
to all development projects.
all
If the public
the development of transit station areas,
then it must establish a formal institutional
include
in
and contracts with private developers and
with the process,
projects.
influence
Inc.,
framework.
This framework must
organizations which have a role in the public joint
process.
-39-
development
Although the
takes on the leading role of coordinator
authority
transit
projects cannot proceed without the
in most joint development projects, these
of the other public agencies involved
cooperation
development. The
(even
joint
and
development
must include consideration of the
roles of other organizations involved in the joint
studies
with
lead agencies must develop a set of clearly defined policies
and procedures for
case
peripherally)
which
follow
this
chapter
process.
development
The
will evaluate the extent to which
these requirements are met.
3.4 The Institutional Framework for Joint Development
is
As defined in Chapter one, joint development
estate
which
development of real
the
Several
at or adjacent to transportation facilities.
occurs
factors will vary, including:
the
degree
of
cooperation between the public
and private sectors, the timing of joint development
planning
and
the level
of initiative taken by participants.
While joint development has several interpretations and applications,
institutional
three
approach
categories:
department
approach.
3.4.1
to
joint
development
often falls into one of
most
1) the cooperative agreement approach;
and,
approach;
3)
independant
the
the
2)
the
development
internal
corporation
These approaches are defined below.
Agreement-
Cooperative
cooperative arrangements
between
involves
This
the
government
role in the joint development planning process.
-40-
the
enactment
of
formal
organizations which have a
In most instances the
cooperative
is
approach
agreement
by
characterized
a
example,
For
The
committees.
cooperating
which operates through formal
relationship between cooperating agencies.
strong
working
Los
Angeles,
in
three interagency committees were formed through the cooperative agreement
early
disputes
interagency
resolve
of
and land acquisition are combined into a
packaging
including zoning, project
entity
roles
clearly defined and the individual powers of the agencies
are
other agencies
single
The
authority serves as coordinator of joint development.
transit
the
in
to
process (see Chapter
planning
five).
3.4.2
development
department
is
responsibility
to
development
directly
This
within
the
is
a
with
represent
and
manage
concerns of the
the
to
process
analysis
transit
in
and
agency
order
to
joint
development
to
must be able
and
must
should
present
a
negotiate
be
have
able
a
to
formal
single, agreed upon
This approach is preferred by transit
developers.
joint
be highly skilled in real
In addition, this department
developers.
internal coordination
perspective
and
planning
staffed
lead (usually transit) agency whose sole
develop,
identify,
professionally
The staff of an internal department must
projects.
estate
Department-
Internal
agencies
which have clear control over system construction or rehabilitation projects.
Relationships
between
an
joint
internal
outside groups are usually weaker without a
discussion
of
Washington,
D.C.
in
development
cooperative
Chapter
four).
department
and
(see
the
agreement
An
internal
development department has a strong relationship with developers,
-41-
joint
however,
and under certain conditions,
such
as
one
which the transit agency has
in
full control over development rights, the internal
department approach may be
a more suitable alternative.
3.4.3
Development
Maryland,
the
logical
approach
quasi-independent transit corridor
These
corporations
development
are
projects.
in large scale
urban
In
Corporation-
often
some
for
cities,
such
development
as
Baltimore,
coordination
is
a
development corporation (see Chapter six).
established
solely
to
coordinate
While development corporations are
redevelopment
the
projects,
used
concept
joint
occasionally
is
new
to the
transit industry.
The
amendments
to the Urban Mass Transportation Act introduced by Andrew
Young in 1974 authorized
considered
as
development,
the
only
and
most
two
with
appropriate
the establishment of TCDC's.
institutional
approach
to
Once
joint
TCDC's have actually been established. Because TCDC's
are based on quasi-public
relationships
recommended
redevelopment
developers
corporations, they tend to have good
and other public
officials,
and
are
often
in
the
three
perceived by developers a more "professional" public agency.
The
structure
of
relationships
between
approaches varies substantially. Each of
different
levels
governments,
of
interaction
the
between
and the development commrunity 2 7 .
-42-
organizations
approaches
the
transit
is characterized by
authority,
local
The
model
of
institutional
relationships is illustrated in figure 3-1.
The links between and among the various
the
direction
of
the
Examples of each of these
presented
in
the
agencies and developers
flow of information and
institutional
following
approaches
chapters.
development entity is a combination
of
authority
approaches.
other North American joint development programs.
-43-
hypothesized.
to joint development are
In several of the
two
is
are shown and
cases
This
is
the
joint
common in
Figure 3-1
MODEL OF AGENCY INTERACTIONS IN THE JOINT DEVELOPMENT PROCESS
Three Institutional Approaches
COOPERATIVE AGREEMENT APPROACH
OTHER AGENCY
OTHER AGENCY
TRANSIT AUTHORITY (Lead Agency)
OTHER AGENCY
AGENCIES ACTING IN COOPERATION
(Working groups meet regularly)
Weak relationship with
COMMUNITY AGENCIES
Strong relationship with
DEVELOPMENT COMMUNITY
Agency powers are combined to form an entity with development packaging
capablities.
INTERNAL DEPARTMENT APPROACH
COMMUNITY PLANNING AGENCY
OTHER DEVELOPMENT AGENCY
Weak relationships
JOINT DEVELOPMENT
<--Weak relationships
DEPARTMENT IN
TRANSIT AUTHORITY
-
OTHER GOVERNMENT AGENCIES
IE
REGIONAL PLANNING AGENCY
Strong relationship with
DEVELOPMENT COMMUNITY
Because developers must negotiate permits with local and regional bodies,
the lack of formal interactions often characterized by this approach can
delay and occasionally obstruct the development process
TRANSIT CORRIDOR DEVELOPMENT CORPORATION
STATE TRANSPORTATION AGENCY
Oversees
METROPOLITAN
TRANSIT AUTHORITY
CITY GOVERNMENT
Appoints
Weak relationship with
'I
MARKET CENTER
DEVELOPMENT CORPORATIC 'N
REGIONAL PLANNING
COUNCIL
Strong relationship with
DEVELOPMENT COMMUNITY
Agency powers are assigned to the TCDC.
*
As applied to the Market Center Development Corporation in Baltimore, MD
-44-
ENDNOTES
with Gladstone
Institute
Land
1Urban
Making the Real Estate-Transit
Development:
Department of Transportation, 1979), p. 212.
2
As
3
Ibid., p. 13 (see Chapter six).
4
Ibid., p. 212.
5
Ibid., p. 212.
6
Ibid., p. 213.
a
result
of
this
Associates.
Connection,
Joint
(U.S.
requirement
residential development of
condominiums is not possible because land must be owned by the tenants
of the development.
7
Southern California Rapid Transit District, Joint Development
and Value Capture in Los Angeles: Local Policy Formulation, (Urban
Mass Transportation Administration), 1983), p. VI-4.
8
Urban Land Institute, p. 228.
9
Ibid., p. 231.
10
In Toronto, most transit properties are designed to accomodate
development, but almost all of the projects resulted from developer
This is changing with system expansion (see Chapter six.
initiative.
Tt
Public Technology, Inc.
Local Officials. Draft Report.
September 7, 1983), p. 25.
Joint Development:
Handbook for
(U.S. Department of Transportation,
12 Urban Land Institute, p. 101.
13 Ibid.,
p. 232.
14
Draft
12 Preliminary
Metro Rail Project Milestone
SCRTD,
Report-System Plan,
cited in
Susan Jones O'Carroll and Gary S.
Spivack, "Joint Development and the Los Angeles Metro Rail: A Status
Report. (Southern California Rapid Transit District, 1983).
1 5 Public Technology, Inc., p. 13.
-45-
Chapter 4
WASHINGTON, D.C. CASE STUDY
4.1 Introduction
The station area development
program
in the Washington D.C. metropolitan
area is an example of the internal department
approach
of the regional rapid transit system is
Construction
Metropolitan
and the Washington
Area
the
as
system
expands,
this
accomplished
Washington
through its
seven joint development and
WMATA, which is pursuing
has
in
underway
Transit Authority (WMATA),
Office of Planning and Development, has completed
six system interface projects.
to joint development.
in
additional
a
projects
highly-fragmented,
multi-jurisdictional environment.
WMATA
taken
has
cooperates with
its
the
communities.
comprised
of
Maryland,
Virginia,
representatives
and
development policy in which
critical
WMATA
element
promotes
lead
to
high
the
in
coordinating
each
of
the
the District of Columbia,
coordination
successful
density
development
' The agency's Board of Directors,
from
full
station
between
completion
development
roadway system.
-46-
developed
these
of projects.
at transit stations
development of nodal centers served by transit
as
well
which is
jurisdictions
three
has
and
as
by
a
bodies
of
joint
is
a
In addition,
through
an
the
adequate
WMATA
has
established
internally to promote concentrated
procedures
procedures, however, there is
Despite the existence of these
development.
no systemwide development framework to ensure that
is
of land use
Several successful joint development projects have
encouraged.
completed without either
a
systemnwide
framework
or
formal
been
cooperative
The detrimental effect
agreements between participating agencies.
region
form
this
on
the
difficult to measure, but a comparison of different counties in
is
area illustrates the difference that coordinated land use
the metropolitan
and transportation
planning
can
and presents an analysis of WMATA's
This chapter considers this issue
make.
approach
department
internal
to the
station area development process.
4.2 System Construction
By
end of 1984, the Metrorail system, begun in 1969, will include
the
60 stations and
61.4
miles
of rail.
86 stations by 1996 is scheduled,
this.
Completion of 101 miles of rail and
changes in funding could alter
although
See figure 4-1 for an illustration of the rail network.
The Metrorail project has cost Eive billion
began in 1969.
was
$2.5
The original estimate for the cost
billion.
governments,
dollars since construction
strikes,
Inflation,
and
storm
delays
by
of
federal,
the
entire
state,
and
system
local
damage have more than tripled that cost
estimate.2
-47-
Figure 4-1
Status of
mm
s o Metro system
t t mile
UDecember 1982
Shady Grove®
Shd
rv
Red Line - Glenmont/Shady Grove
Blue Line - Addison Road/ Huntington
Orange Line - New Carrollton/ Vienna
Green Line - Greenbelt/ Branch Avenue
Yellow Line - Franconia-Springfield/ Greenbelt
Rockville
Twinbrook
Glenmont
0
White Flint
/
Wheatoni
W
MONTGOMERY
t0
O
Grosvenor *
PRINCE GEORGE'S
COUNTY
,ONT
COUNTY
Forest Glen0
Greenbelt
Siv r
Medical Centere
MARYLAND
O
Prince George's *,CoIe.,
Bethesda
0Takoma
esr
0-
ar
Plaza
Friendship Heights
1111e111
Te"etown
Fort
.
FAIRFAX/
FA IR F AX
*"C
COUNTY
.
.."''*
&
Du5p.n
Circh
/ARLINGTON
W Falls
ilChurch
is
Church Bait
Dunn Lorin
Vienna
b
Oi
s t,7
a
Minnesota Ave
s
2
Addison Road
ViennA
11
c...W~V
*
2.0Ben
-iei
.Sr
"'N
Fairfax
-s
Naylor Rd
Congress
*
Southern Ave
+hs
*q
Braddock
ALEXANDRIA Road
Van Dorn St
01
Branch Af*
St Barnabs
Ro
'
Huntington
Ts.anene an ietn
n
Greenione nas
mnaly
"ee" aeteinea
TheWM&AtA
seam.C
OtDe
of
Rosecrott
King
-
Capitol Heights
4Suitland
reme.1
.*
AirpSrn
H./MeI/nal
CITY
g
"i
oad
a Ave
-t /.i
*it
..cy.
FAIRFAX
County
Landover
S
-
County
Cheverly
*
Churc
chas
Fairfax
New
Carrollton .
.Feno
COUNTY
E Falls
West Hyattsville
4
Totten
*"
S4l
()HH
*
Srmtwe**""*
me
*f'''*"'*""
thi
.0o
"eresnan
Co
a,.-
Eisenhower Ave
Franconia-Springfield
~
VIRGINIA
MARYLAND
LEGEND
Operating Lines
UEME
UUUnder
0000
Under
39.12miles 44 stations
Consitruction or Substantially Complete
32 4 miles 22 stations
Final Design
78 miles
lI@IiiiiiIIIIIIII0INNI
Remainder of System 988 mies
Totalstations.-46
12 stations
M
8stations
Farragut North
Farragut West
McPherson Square
MetroCenter
FederalTriangle
Smithsonian
L'EnfantPlaza
. FederalCenterSW
9. Capitol South
1.
2.
3.
4.
5.
6.
7.
Total mileage-101.18
10. Wateriront
11. NavyYard
12. EasternMarket
Ave
13. Potomac
14. Stadium-Anmory
15. Archives
16. Judiciary Square
17. GalleryPlace
Sq-UoC
16. Mt Vernon
Washington Metropoitan Ares Transit Authority
metro 600 Fifth Street, N.W., Washington, D.C. 20001
Proiected start of operations for tis segment based
on approved schedule tApplies to all stations
inbound from this poin
Department of Public Services Office of Public Affairs
PaulWills Editor
63 7.- 7
-48-
critics
As a result of its high cost, many
should
system
not
be
Columbia
of
themselves
board
to
members,
supporting
have
have witnessed the completion of the initial
who
city segment of Metrorail.
Having
millions
contributed
already
committed
especially suburban
completion,
system's
the
the
Virginia, the District of
Maryland,
Many of these politicians
and their appointees.
that
This is unlikely, however, as WMATA is
completed.
governed by the elected officials
suggested
have
central
to
the
project, they are anxious to see stations in their jurisdictions open.
Metrorail
funds on either
construction is financed with federal funds matched by local
an 80%/20% or 85%/15% basis, depending on the specific law
that applies to the
source
of
the
federal
The local portion is
funds.
paid through long-term bonds, state grants and general
the
local
jurisdictions.
from joint development
revenues in each of
Other revenue sources, such as
projects
lease
payments
and rental fees from concessions, are not
dedicated to system construction projects (see section 4.7).
4.3 The Participants in the Station Area Development Process
Although funds generated from WMATA
development projects have not been
dedicated to system construction, planners
some
revenues
could
of
the
system recognized that
be raised by developing WMATA-owned
1975, when system construction
was
well
underway,
property.
WMATA coordinated its
first joint development projects at Farragut North station in downtown
-49-
In
Washington
at
and
Rosslyn
(The project, a mixed-use
rights
air
Cent.er
Metro
in
Virginia.
Arlington,
development which includes busbays,
offices and a hotel and is one of the few
land
parcels
WMATA sold
which
rather than leased to a developer, has been a commercial success.)
As
Metro's
construction
progressed,
program
it became increasingly
evident that substantial benefits could accrue to WMATA
more
comprehensive
program
within
developable
and
the
agency.3
property,
it
While
does
own
WMATA
$25-30
million
in
annual
does
not
area development
own
substantial
a number of small parcels,
value of the real estate held by WMATA is
generate
station
professionally-managed
implementing a
by
substantial.
time
the
the
WMATA expects to
leasehold revenues from all
planned joint development projects by the
and
system
is
of
the
completed
(see section 4.6).5
Outside
planning
of
WMATA
process,
there
each
with
are
several
in the Metrorail
unique requirements related to development.
The main forum for interagency coordination
WMATA Board of Directors,
participants
and
(Refer to figure 4-2 for
board's composition.)
-50-
policy development is the
an
illustration of the
Figure 4-2
Metro Structure
4.3.1
The Federal Government and the District of Columbianot
does
federal government
serve
formally
federal
government,
payment
in
lieu
of
the
as
propery
largest
taxes
landowner
to
the
Each
in
year,
District.
have
passed.
Until 1973, the
and did
its first mayor until this time, when home rule legislation
The
District
maintains
zoning
review
powers
the
makes a
Washington,
District had to coordinate city policy with the federal government
not
the
on the WMATA board, federal
is ensured by the budget appropriations process.
input
While
was
over development
around Metrorail stations.
The
federal
government
also
strives to coordinate
government planning and development activities
with
through the National Capital Planning Commission.
-51-
state
federal
and
local
construction
NCPC's planning
jurisdiction for Metrorail stations is limited to federal land affected
route
alignments
and
station locations.
by
The NCPC has not promoted joint
development projects at stations which it controls.
4.3.2 The State of Maryland-
In
the Washington suburban counties, the
State of Maryland has granted zoning and
planning
powers to the Maryland-
National Capital Parks and Planning Commission, the staff
to
County
elected
Prince
George's
County
and Montgomery
rely
Cities in Maryland, with the exception of three, generally
County.
on the planning
which
in
Councils
of which answers
is
commission
for
planning
and
zoning
services.6
MNCPC,
regarded as a highly-skilled planning agency, has worked closely
with WMATA on
several
projects, including the Bethesda Metro station (see
section 4.4.3).
4.3.3 Virginia- Virginia's
cities are independent of its counties, and
Alexandria, Fairfax and Falls Church,
the
service area regulate their own plafining and
is
the
exception,
construction.7
As
a
where
the
state
of
the
result
largest cities within the WMATA
development.
is
Fairfax County
responsible
division
responsibilities, Fairfax County has not experienced
the
of
for
roadway
transportation
level
of
joint
development which is commercially feasible (see section 4.4.3).
4.3.4
Metropolitan
Washington
Council
of
Governments- MWCOG is the
regional planning agency for major local governments
officials.
and
their
governing
Similar to many of the metropolitan planning organizations
the United States, MWCOG develops a regional plan with which all
-52-
in
municipalities
must
MWCOG does not have significant
Although
conform.
power in the station area development program,
conducted a number
has
it
of in-depth studies on Metrorail.
4.4 The Internal Joint Development Department
of
Planners
the project since before
however,
that
impacts
Metrorail have been aware of the development
the
Board
construction
of
It
began.
Directors
was
of
until 1969,
not
considered the issue in earnest.
of Planning and Development:
According to Lee Skillman of the WMATA Office
Henry Cord, who was director of real estate at WMATA,
created a special projects branch in 1969, wishing to hire
This
the best people he could to coordinate development.
was in response to a request from Woodward and Lothrop, a
department store chain, which wanted a direct
major
connection to the Metro Center Metro station. At that
time, the WMATA Board of Directors approved a policy for
system interface projects, which established the concept
that WMATA could earn money from these projects, charging
At Connecticut
for more than just the cost of connection.
which was to be the site of
Avenue and L Streets,
by
a
Farragut North Station, WMATA was approached
of
the
coordinate
development
wanted
to
developer who
station. At this time, WMATA began to realige that they
should pursue these opportunities more closely.
At that time, Skillman was working
coordinating
system
planning
issues
out
with
of
of
stations
on
Office
them
that
Planning,
he was interested in the
adjacent land uses, Skillman
communities to try to convince
of
the communities in the region
focusing mostly on station design issues. Because
impacts
the
the
new
went
out
to
the
stations would have a
significant impact on development patterns and land use
in general.
Local
officials were encouraged to travel to Toronto and Montreal to study the
-53-
development
impacts
there.
systems
transit
the
of
cities, especially Montgomery County, local officials
concerns
In some
of
these
responded
to
these
by planning land use and transportation more closely (see section
4.4.3).
Because
these early efforts, in 1977, Cord and Skillman identified
of
Bethesda as the site
a potential, large-scale joint development.
of
plan to complement the surface transit facility
sought to produce a master
MNCPC to develop the master plan.
the
Office
of
Cord
site.
and parking lot planned for the
that
They
agreed
to
coordinate with
to recognize
At this point, WMATA began
Planning and the Real Estate Office were duplicating
efforts related to station area development.
manager,
In 1981, a new general
separate
projects.
development
branch
to
Page,
Richard
future
coordinate
agreed to establish a
station
professionals.
Cord directed this office with a staff of five
Three of these
individuals
have
in
experience
(appraisals, sales negotiations and brokerage).
real estate transactions
Two
more
have background
in urban design and planning (although one of these positions
vacant).
The
sixth
professional
moved
five).
Most
to
of
a
the
similar
is currently
staff member is a development finance
expert who conducts computer analyses of
eventually
development
development
all
position
in
Los
projects.
Angeles
(see Chapter
experts on the staff were hired from either
9
planning or real estate departments at WMATA.
-54-
Cord
the
The Development Branch is
housed
within
the
Office
of Planning and
Development and is guided by the following goals and objectives:
Goals
-Enhancement of levels of mass transit use;
-Conservation of petroleum-derived energy;
-Allocation of resources in a more optimal fashion;
-Reduction of urban sprawl;
-Encouragement of quality development.
Objectives
-Reduction of energy consumption
-Increased transit ridership;
-Reduction of travel time;
-Addition of real property to the tax rolls;
-Increase in tax base;
-Improvement of cost/benefit ratios of public goods and
services provided by local government; and,
10
-Provision of revenue to WMATA for subsidy offset.
According
to
WMATA's
Management
Memorandum
regarding station
area
development:
This organizational structure recognizes the close inherent
relationship
which
exists between Metro(rail) system
planning and land development functions. It also serves to
sharpen the focus organizationally
of
a development
mechanism
to local area 1 1 governments, the development
community and to the public.
4.4.1 Intra-Agency
Coordination-
The Development Branch
staffed by seven professionals, ,two more
Office
of
Assistant
Planning
General
responsible
for
implementation
coordinate
and
Development
Manager
the
of
internally
for
than
falls
with
development
the
original
under
the
five.
control
The
of
the
the Department of Public Services, who is
"administration,
the
the
is normally
management,
program."12
engineering,
managment and operations offices.
-55-
planning
This
office
construction,
and
must
contracts
opportunities
WMATA identifies station development
five
year
work
and
program
process of: 1) preliminary study;
a
using
discussion and analysis;
2) identification of potential sites; 3) internal
a
developed
selection committee
Once proposals are received, a
development community.
is
and distributed to the
prepared
is
prospectus
project
the plan
After
and, 4) development of a screening and disposition plan.
is
a three-to-
using
flow
a
in
established to review proposals. (This process is outlined
chart, presented in figure 4-3.)13
potential
developments
and
the
completed internally, the staff of
continues
to
Once
Coordination-
Interagency
4.4.2
coordinate
disposition
Planning
the
process
the
of
and
screening
of
been
has
properties
Development
office
the proposed development activity with the local
14
government bodies involved and other non-WMATA entities.
According to Lawrence Goldstein,
development
a
at WMATA,
specialist
the process of local coordination is useful.
Because all large projects involve a zoning change, WMATA
looks to meet with local juiisdictions from a project's
In initiating projects, WMATA identifies the
inception.
market scale, design scale and technical options and
This is
shares this information with the localities.
especially true in Montgomery County where optional method
In order to obtain the necessary densities
zoning exists.
and other requirements for successful joint development
projects, those projects normally have to go optional
method zoning . All proposals of this scale have to be
submitted to and approved by the planning commitgion. The
meetings run from love meetings to hate meetings.
WMATA
must
operate
levels of government whose
by
several
objectives sometimes conflict.
Despite
within an environment
policy
characterized
an improved internal framework for station area development, there are
-56-
Figure 4-3
FLOW CHART OF
WMATA JOINT DEVELOPMENT PROCESS
.0
1- Classifyi
Sites
.SIQP
17-Briefing
r
24-Ne otiate With
Developer
sTOP
32~~:Construc
ion is
Monitored
-
.
n
.STO
1- Receive
118- Appra-
GO
Prepare----G n23Lease
4
31- Consruc
Begins
ton
--- 4-Discussior
Coordination
ith Local .S.Q2.
nt
Gom
3 - Define
Excess
Rights &
Dev. Poten,
sial
Prepared
of Potential
Developers
GO
2- Analyse
Site Charactics
IP--
20.Recom-
-
G
& Analyse
Proposals
mend
Proposal to
GMGR
22-Present
21- Select
Developer
Proposal to
Public,
Local Govts.
GO
33-Administration of
Contracts
-57-
30- Develop-.
er Obtains
Bids, SubContractors
n
P_
29-Develop-er Secures
Financing
Commi eents,
.4
difficulties
in
achieving
station
area
coordination
of
outside
exists
no
Because
existing interorganizational environment.
project
goals
development
the
body
for
formal
Board of Directors,
WMATA
the
within
occasional conflicts arise between participants.
The
Conflicts-
Development
4.4.3
(Refer
rapid development over the last two decades.
development
impacts
of Metrorail in Appendix A.)
Metrorail stations, developers
have
has
capacity
designed
into
Local officials
a
discussion
of
At some of the suburban
buildings
density
In some instances,
excess
the system for WMATA related development
used up before a WMATA development
been
to
high
constructed
which generate unanticipated vehicular traffic.
traffic
experienced
Washington region has
was
officially
encouraged.
have not been able to restrict most of the development nor
have they constructed
additional
roadway
capacity,
thus creating policy
16
problems for WMATA.
As a result of these conflicts, roadway traffic capacity
element
in
determining
of project feasibility.
been challenged by residents
who
cite
traffic
is a critical
Unpopular projects
concerns.
According to
Goldstein:
Opposition based on traffic is the biggest source of
problems because traffic projections are easily contested.
Even if a
Everyone comes up with their own numbers.
project is considered favorable by all parties, some
cannot be constructed. For example, in Fairfax County the
capacity of the road system is so far behind the demand
that the prospecjq for large development projects are
extremely limited.
-58-
have
Although the concerns based
on
may not be valid, if there is
traffic
approved.
substantial citizen opposition, projects are not
the
projects
MWCOG,
systemwide development framework.18
shortfalls,
these
To remedy
improvements to the highway
own
problems themselves by constructing their
however, as local
The need for this type of response is changing,
system.
at some
have begun to address transportation
developers
sites,
station
Virginia
due to the lack of a formalized,
stopped
also
are
According to
officials are recognizing the need for additional planning.19
the overall requirements for large scale developments
met
have
Maryland,
Montgomery County,
one
by
characterized
is
of
has
industry related to Washington
the
wealthiest
An entire business
suburban
the
in
evolved
at
For example,
tremendous benefits.
levels in the United States.
income
median
reaped
have
transportation facilities
household
difficult
Those localities
jurisdictions.
separate
many
process in a region with
which
a
more formalized development framework is
a
Establishing
cities
of
Silver Spring and Bethesda.
County is conducted by the MNCPC (see section
Montgomery
in
Planning
4.3.2.), with which the Office
organizations
have
to
development trends long
developed
policies
development.20
is needed and
In
which
set
the
system
limits
on
of
one
is
analyses
conducted
before
Development
Planning
MNCPC
relationship.
close
standing,
and
had
the
of
the
travel
reached
quantity
has
few
had a long
planning
patterns
the
and
County and
and location of
some instances, the public sector has not
done
what
the private sector has gone forward and developed projects.
-59-
County,
In contrast to Mongomery
the other Maryland county served by Metrorail,
participate
improvements
to
This is
area.
the
This
measure
austerity
technique
passed
new
a
of land resulting from
improvement.
for
prospects
the
a
by
station
accomplished
financed
publicly
through
increment
tax
financing technique designed to tax the increased
financing, an innovative
value
this
at
projects
in
and
affluent
Developers have had to be induced
development project.
higher level joint
less
much
station, for example, existing
Carrolton
New
is
is at a small enough scale as to limit
development
to
At
developed.
well
not
Prince George's County,
neighboring
by
development
enacted
was
adjacent
public
a
to respond to a property tax
1982.
county residents in
financed improvements, including
to
publicly
The
a parking facility for an Amtrak station,
have encouraged more developer interest in this station.21
Local officials throughout the
which
policies
the
are being encouraged to develop
promote station area development
Bethesda and New Carrolton
through
region
provision
of
past
using
the
One example of local assistance is
examples.
improvements
to
the
development
escalators, parking facilities, etc.) or additional
Goldstein.
stations
at
funding.
"Localities are much more enlightened than
and are advocating quality development.
(new
According to
were
in
the
If they oppose a proposal it
22
is because they oppose any development whatsoever."
-60-
they
site
4.5 WMATA Joint Development Projects
area
lack
the
Despite
Table 4-1 for a list of
(See
projects.
In addition to those projects already constructed,
projects.)
11
identified
has
Development
and
Planning
1978
in
WMATA has sponsored seven joint development
projects and six system interface
of
project
Since its first joint development
Station,
North
Farragut
joint
successful
several
accomplished
has
WMATA
development,
development projects.
at
of a systemwide institutional framework for station
other
the
Office
immediate joint
development opportunities with over 20 additional longer-range
development
prospects.23
4.5.1
Farragut
North-
Farragut
Station, which handles 15,000
North
downtown
intersection
of
market,
office
Washington
Avenue
Connecticut
Commercial development at Farragut
a
development
simultaneous
northeastern
end
of
the
modern and unique office and
of
just
and
high-rent
a
riders on a typical weekday,24 is situated in
one
block
Street
K
section of the
north
4-4).
figure
(see
the
of
North has taken place in two stages, 1)
the
and
station
station and 2) a subsequent
air
rights
development
the
at
of
a
retail facility which does not provide direct
station access.
The first development, at 1101
Connecticut
Avenue
houses the popular
Connection, a two-level underground eatery. Above
is a 205,000 square
retail shops.
Connecticut
foot,
12-story
office
building
with
the
eatery
two levels of
The project is unique for Washington because the two lower
-61-
Table 4-1
WMATA STATION DEVELOPMENT PROJECTS
JOINT DEVELOPMENT
Project Station Location
Project Type
Status
Bethesda
Office, hotel,
retail, parking
Under Construction
Farragut North
Office, retail
Completed in 1978
Freindship Heights
Office, retail
Under Construction
Gallery Place
Office, hotel
retail, parking,
and residential
Approved
McPherson Square
Office, retail
Completed in 1983
Rosslyn
Office, retail
bus terminal
Completed in
1979
Van Ness/ UDC
Office, retail,
kiss and ride
Completed in
1983
System Interface
1. Woodward and Lothrop at Metro Center
2. International Square at Farragut West
3. Woodward and Lothrop at Friendship Heights
4. Crystal City
5. L'Enfant Plaza
6. Pentagon City
Source: WMATA Office of Planning and Development
Figure 4-4
FARRAGUT NORTH STATION
DESALES
ST.
0
-
1o.
M
farragut
metro
>
north station
.11
-
elevator
to
el. 54*-
el1 -54,
40
130
0
el 28!
elevator
PROFILE
K-
ST.
NW
z
FARRAGUT
SQUARE
z
L-
elevators
0,
SADE PLATFORM
STATION.)
-1knock-out panels
100'
elevator
el. 69"
60
20
el. 47:
-~
el. 45*EM
.
l
elevator
PROFILE
-63-*
0
200
100
scale
300'
washington
metropolitan
area
t r aansitI
authority
patrons of Metrorail are funnelled through the
based
project
this
of
developments,
on
design
its
as
subway station entrance
the
with
integrated
actually
are
levels
concourse.
and
Toronto
The developer
Montreal
joint
a significant portion of the downtown subway stations
where
are directly integrated with commercial properties (see Chapter six).
exemplary
project, the complex requirements
for
proposals
this
for station integration discouraged many
bidding
developers from participating in the
which
Farragut North Station is an
When WMATA solicited
development.
joint
at
project
Avenue
The 1101 Connecticut
Miller
process.
Company,
was selected for the project, had to devise some unusual techniques,
including
structuring
the
lease agreement which recognized and attempted
to minimize the risks in advance of signing the lease.
In contrast to this development, project,
office
building
with
is
of
not
then travel down an escalator to
and
While WMATA included
the
building,
paying WMATA for system access.25
development
a luxury
Patrons who wish to use Metrorail must
not.
exit the front door of this building
underground, level
Place,
premium shops and restaurants which could be served
by Farragut North Station,
the station mezzanine.
Washington
taking
for off-peak retail usage.
This
knockout
panels
next to the
the developer is not interested
is
one
of
in
the few examples of a
advantage of an opportunity to generate
business
4.6 Preliminary Findings
Metrorail operation, WMATA has coordinated
of
In the first five years
benefits to local governments
The
13 station area development projects.
For
example,
the
development projects at Farragut North, VanNess and Bethesda
stations
are
per year.
The
and
to
and
goavernments,
than
more
pay
will
developments
million
$2
substantial.
are
$3 million annually in taxes to
local
1989,
WMATA
By
WMATA.26
to
per year
projects and between $25 and $30
its
expects to generate $6 per year from
trips
transit
additional
600,000
generate
to
expected
authority
transit
the
million annually when the system is complete.
has
WMATA
within
built a highly skilled and professional
business
favorable market conditions.
to
arise
framework
the
in
which
absence
have
a
of
the
attributed
be
can
programs
development
Much
agency.
the
with
developers
and
the agency
regard
high
this
a
systemwide,
conducting
staff as well
Unfortunately, some local
of
for
staff
of the station area
success
to
development
as
to
conflicts continue
development
comprehensive
emphasizes coordination, although efforts have been
made
to improve this condition.
of
Because
the
region, cooperative
difficult
to
fragmentation
agreements,
achieve.
vision to recognize
the
had
of
jurisdictions
they
been
in
sought,
the
would have been
Also, while some planners at WMATA had
development
Washington
sufficient
potential at Metrorail staticns, the
majority of decisionmakers were either skeptical
about
the
prospects for
Metrorail construction, or were simply not willing to negotiate
-65-
agreements
At the local level, the lack
endeavor.
for something which was an unproven
of foresight has resulted in vehicle traffic problems
local
in some areas, although
better
officials are beginning Lo r'ecognize the need for
planning
at
their level.
to
According
Lee
use and transportation
for
planning
other
programs
in
The lessons learned
Atlanta.
are
public
benefits,
in
Washington,
have
the United States,
from
the WMATA joint
land
not just benefits to
prompted
planners
in
Washington
would
including Los
Angeles
and
interorganizational conflicts which
the
planners
cooperative agreements well in an advance of
which
of
aspect
The joint development program in Washington has served as a
WMATA."27
existed
important
"an
program is that the benefits which result from coordinating
development
model
Skillman,
have
described in the next chapter.
-66-
in
Los
Angeles
to
seek
system construction (an approach
benefitted
from).
These
are
1
Area Transit
Metropolitan
Washington
"Chronological History of WMATA," in Tabloid, No.
1983), p. 12.
2
Ibid.
3
Ibid.
(WMATA),
Authority
,
(WMATA, July,
74
4
Joint
Associates,
Gladstone
with
Urban Land Institute
Making the Real Estate-Transit Connection, (U.S. Department
Development:
of Transportation, 1979), p. 81.
5
Lee Skillman, WMATA Office of Planning and
Telephone interview with
Development, June 1, 1984.
6
Metropolitan Washington Coucil of Governments
Area Planning, (MWCOG, August, 1983), p. 13.
7
Ibid. p. 13
8
Skillman interview.
9
Ibid.
10 WMATA, "Policies and Procedures
Activities," (Management Memorandum # 713)
(MWCOG),
Metrorail
for Station Area
October 5, 1981.
Development
WMATA
Development
11Ibid.
12
WMATA Management Memorandum
13Ibid.
14Ibid.
15 Telephone interview
Branch, May 17, 1984.
with
Lawrence
Goldstein,
Initial
Findings
16Ibid.
17Ibid.
18 MWCOG,
"Background Paper:
Development Issues (date unknown).
19 Goldstein interview.
20
Skillman interview.
21Ibid.
22
Goldstein interview.
-67-
on
Metro
Related
23
MWCOG, Metrorail Area Planning, p. 45.
24
Goldstein interview.
25
Ibid.
26
Henry W. Cord, "Remarks
January 7, 1982
27 Skillman interview.
for
Transit
-68-
at a Crossroads Conference,"
Chapter Five
LOS ANGELES CASE STUDY
5.1 Introduction
The
station
metropolitan
area
area
development
a
While
is
region,
proposed
for
not
yet
underway,
planners
at
SCRTD,
approach
Los Angeles Metro
the
the Southern California
a
to
formal
Rapid
institutionalized
The agreement delineates
the
roles of
lead agency, the Community Redevelopment Authority of Los Angeles
the
of
(CRA), the City
area
California
Los Angeles metropolitan
the
Transit District (SCRTD) recognized the need for
process for development coordination.,
Angeles,
agreement
of
construction
system
transit
rapid
in the Los
an example of the cooperative
is
joint development planning.
Rail,
program
development
Los
Angeles and the County of Los Angeles in the station
process. This
describes
chapter
the
formation
of
that
agreement.
The
initial segment
expected to
seventeen
create
joint
Metro
entity
of
the
Rail,
development
proposed stations.
development
resources
of
coordination of development at
eighteen-mile
opportunities
at
rail
line,
the
station
participants.
Metro
area
The
is
all but one of the
The agreements established a cooperative
combining
major
an
development
prospects
for
powers
joint
and
successful
Rail stations appeai promising because:
1) these agreements were reached at an early stage in the
-69-
development entity combines most of
planning of Metro Rail; and, 2) the joint
the
necessary
that
planning and development functions
did
previously
not
reside in one individual agency prior to its establishment.
was
Transit
Rapid
a
5.1.1 Planning
System- A regional rapid transit system
proposed
Los
District
(CBD)
The
created.
the Central Business
from
extend
will
line
subway
Angeles
was
SCRTD
when
first proposed for Los Angeles in 1964
Avenue,
and
system construction and operation and is
the
through the Wilshire Boulevard corridor to Fairfax
north through Hollywood to North Hollywood (see figure 5-1).
for
responsible
is
SCRTD
In
lead participant in station area development.
county
agencies,
and
financing
SCRTD
benefit
special
to
proposes
conjunction with city and
SCRTD will also use proceeds from these programs
techniques.
capture
value
as
districts
assessment
increment
tax
use joint development,
to help finance
subsequent system expansion projects.
Financing
5.1.2
System
Construction-
at a time when the federal funding share for mass
developed
expenditures
has
decreased
officially
federal government agreed to fund only the
line and future funding remains uncertain.
to
more than $3 billion,
cost
from 80% to 75%.
policymaking
financing,
this
change,
body,
including
has
the
capital
transit
In June, 1984, the
4.2 miles of the Wilshire
initial
project
The entire
expected
is
and planners at SCRTD expect that at the
of groundbreaking, the federal commitment may fall to as low as 50%
a result of
being
Rail system is
Metro
The
1
.
time
As
California Transportation Commission, a state
required
cities
to
make
a requirement that at least
costs come from private sector sources.2
-70-
commitments
five
percent
to
of
system
project
Figure 5-1
V'c1ory BivO
ROUTE ALIGNMENT &
STATION LOCATIONS
LEGEND
C'%ratoe' Siva
stations
FAdopted
venturam
as of June 30,
Metro Rail will be a conventional steel-wheel rail rapid transit line In
subway. Its 18-mile route and 18 stations constitute the initial segment
of a 140-to-160-mile rail rapid transit system serving Southern California. Metro Rail will link downtown Los Angeles and the San Fernando
Valley via the Wilshire, Fairfax and Hollywood transit corridors. Con.
struction is scheduled to begin in 1984, followed by system operation
in 1990.
Univorsai
City
Studio
City
1983.
0*1
H~Oiayev000
Hollywood
Hoywood Btuc
Sunse. Biv
A----
>
Santa Monica
X
"I
fil
rwood
Ott
sun
Bevery Siva
Fairfax
District
9ivE
Center
wAM
Miracle
Mile
ev
Westlake
ua
Crenshaw
District
7
-71-
E
E
z
1z
p
5.2
Implementing a Joint Development/Value Capture Program
SCRTD was able to apply
cities
developing its
in
development issues
in
the
learned
lessons
the
from
experiences in other
and
use
land
Because
joint development program.
Angeles region are complex, SCRTD recognized
Los
arrangements and clear guidelines for
the need to establish new institutional
conducting its joint development program.
5.2.1 Selecting an Institutional Frameworkinsitutional
coordination
was
most
appropriate,
of
a
cooperative
agencies
in
the
agreement
between the various
transit corridor;
development department
SCRTD reviewed each of the
within the SCRTD;
land
establishment
the
the enactment
in Chapter three:
institutional options described in the model
and,
form of
which
determine
To
and
use
a
of
regulatory
formal
joint
the establishment of a separate
transit corridor development corporation.
SCRTD
reviewed
development charette.
these
institutional
sponsoring
by
options
joint
a
As described by SCRTD:
the process involved simulating community response and
private sector negotiation that would occur during the
and, applying these
development implementation process;
institutional options to determine their effectiveness in
achieving the land use and development objectives of the
SCRTD.
This preliminary "negotiating"
attended
who
by
senior
process,
held
at
SCRTD
offices
and
management of the four major agencies, afforded those
would be involved in
future
joint
developments
an
opportunity
identify potential sources of conflict. Individuals expressed their views
-72-
to
-
on which
institutional
acertain
what
option
capabilities
-
-
---
allowing planners to
appropriate,
most
was
development
and powers were needed to implement
projects.
Through the charette process and with
5.2.2 Necessary Planning Functions-
that
the assistance of a consultant, SCRTD determined
were
six planning functions
planning
to achieve joint development: 1) comprehensive
necessary
3) real estate
station siting and design;
2)
redevelopment coordination;
leveraging and value capture;
financial
project packaging; 5) permitting; 4)
and
4
and, 6) interagency representation.
Public
transportation entities rarely possess
these planning functions.
of
control all six
goverment may exert control
in
a
powers
the
to
necessary
In some regions a metropolitan
manner sufficient to achieve comprehensive
In Los Angeles, however, the comprehensive legal
planning goals. 5
to coordinate joint development and
authority and specialized staff resources
other station area planning-efforts are not
embodied
in
a
"single"
public
agency.6 The CRA, the SCRTD and the City and County of Los Angeles all play
a role in station area planning (see section 5.4).
5.2.4
diversity
Selection
of
participating
appropriate
each
of
the
of
agencies,
for
the
the
Agreement Approach- Because of the
Cooperative
agency roles, SCRTD,
selected
the
in
cooperative
Metro Rail project.
The
conjunction
agreement
actual
with
the
approach
agreements
reached
authorizes the establishment of a joint development coordinating group which
-73-
as
-a
LZ
will have at its di'sposal
all
land
the
of
use
regulatory and taxing
and
County
the
powers of the four main agencies (SCRTD, the City of Los Angeles,
of Los Angeles, and the CRA).
entity
cooperative
The
comprehensive station area
capture
to:
ability
direct
1)
a
appropriate and equitable
negotiate
3)
mechanisms;
agreements and administer other joint development
support services to facilitate joint development project
4) provide ombudsman
implementation;
the
masterplanning process at each station; 2) package
specific joint development projects;
value
have
will
5)
and,
monitor
the
implementation
station
of
area
masterplans.7
5.3 Agency Interaction
The agencies participating in the Metro
interact
joint
development
process
through a masterplanning process described in section 5.4. Indiviual
agencies retain
entity
Rail
their
responsible
for
autonomy
station
but
area
collectively
development.
function as a cooperative
The
joint
issues are coordinated by committees at three levels:
The Joint Policy Council- responsible for reviewing the
process and establishing the overall joint
planning
development goals and objectives. It is comprised of one
member of the SCRTD Board of Directors, one LACTC member,
one member of the Los Angeles City Council, the SCRTD
General Manager, five private developers and the chairman
of the LACTC.
The Interagency Management Committee- will oversee the
and is
Metrorail station area masterplanning process
responsible for approving final plans. It is comprised of
chief administrative officers of the cooperative
the
agencies.
-74-
development
Development Council- responsible for
The Professional
effort which includes
coordinating the masterplanning
developing actual station plans and resolving technical
issues. It is comprised of the planning directors of the
three agencies who are the day to day project managers.
the
Within
as
Director,
D.C.8
when
a
he
experience
the
of
result
the SCRTD Real
of
in
on joint development projects
worked
The Committee is also
forum
a
to
within the SCRTD,
from
managers
The committee, comprised of departmental
formed
and
SCRTD, other agencies and individuals.
the
between
contact
serve as the
was
arise
all joint development-related proposals as they
with
deal
Operations
Committee (OPERA) to
Architecture
Planning, Real Estate, Engineering, and
an
established
has
SCRTD
itself,
agency
agency
this
of
for an illustration
5-2
Refer to figure
interacation process.
for
the
coordination
Estate
Washington,
of
project
9
design issues.
SCRTD
has
wanted, in the short-term, to establish interim controls to
preemption
prevent
premature
of
development.
the
District's
In
development to share in the costs
the
of
development
joint
long-term,
will
SCRTD
constructing
and
options
require
by
new
operating transit
facilities.10
SCRTD plans to use three joint development mechanisms as
value
capture
program.
These
include
part
of
1) station cost sharing through
simultaneous construction efforts, 2) connector
fees
which
will
require
negotiation of direct links paid through lump sum payments or "in lieu"
-75-
its
Figure 5-2
INTERACTIONS BETWEEN AGENCIES IN THE COOPERATIVE AGREEMENT
LOS ANGELEST METRO RAIL
Representatives
of the Developent Communitye
I
5 Representatives
1Board
Member
Reviews Planning Process
Establishes Coals and Objectives
One Board Member (Chairman)
Executive Director
INTERAGENCY MANAGEMF.NT COMMITTr.~
LOS ANCELES COUNTY TRANSPORTATION
COMMISSION
I
Oversees Master Planning Process
Approves Final Plans
Board of Commissioners
Executive Director
Administrator
PROFESSIONAL DEVELOPMENT COUNCIL
CITY OF LOS ANGELES
Hayor
City Council
Planning Director
Director of Planning
Develop. Station Area Master Plans
Resolves Technical Issues
COMMUNITY REDEVELOPMENT
AITHORITY OF LOS ANCEL.F
Board of Directors
Administrator
-Deputy Administrator for Planning
Senior Project Manager
payments of private property or easements, and 3) land/air
dedication
rights
SCRTD will require developers to share maintenance costs
leases. In addition,
at future joint developments.
(which
and
is responsible
and
design
their
for
for
acquire land and to lease or sell the land within
to
able
is
construction)
SCRTD
stations
the
of
location
the
determining
and
through special laws
agreement
legislatures,
California
the
by
passed
cooperative
the
Under the terms of
the system's right-of way or the air rights to that property.11
The law also authorizes SCRTD
which
property
the
facilites,
The
permits
the
formation
non-transit
is required for joint
jurisdiction
local
For
construction.
system
Project packaging authority is also
bill,
second
for
the
of
approval
projects.
development
bill.
acquired
is
or dispose of
lease
develop,
jointly
to
of
granted
benefit
in
the
assessment
districts.12
5.4 Agency Responsibilites for Joint Development Coordination
SCRTD- The roles and responsibilities
5.4.1
development
framework
which
requires
that
of
the
and County planning departments.
station
area
fit
into
a
development of station areas be
consistent with the specific area plans under development
City
SCRTD
by
the Los Angeles
Coordination is made possible
by
the
master planning process which also requires SCRTD to attain and
sustain the highest
level
of
system
revenue and return without interfering
13
with the private marketplace.
-77-
remnant
and,
properties;
also
CRA
developers.
land
acquire
2)
project packaging;
sell
3)
(re)development.
redevelopment
station parcels as
the
stations are in proposed
returns
tax
which are created
CRA, which controls seven of
districts,
community at the seven
development
to private
properties
has value capture authority, using its
and
power to obtain revenues from the incremental
intensified
assemble
and
access to special funding sources such as Urban
has
Development Action Grants (UDAGs)
by
those
lease
or
areas
redevelopment
in
estate
real
in
engage
1)
to:
CRA- The CRA has broad authority
5.4.2
will be the lead negotiator with
three
Because
stations.
the
districts,
redevelopment
eighteen
the
of
the
must follow the
CRA
normal approval process with the City of Los Angeles.
The
5.4.3-
City
land use
comprehensive
include: 1) defining
County
and
planning
permissible
their
within
land
Angeles
Los
of
uses
and
are
responsible
jurisictions.
densities;
These
County
techniques.
control
powers
and 2) issuing
building permits to projects which conform with their requirements.
and
for
The City
and zoning tools which are used as value capture
zoning
These include: 1)
parking
2) the sale
requirment reductions;
14
of density bonuses; and 3) transfer of development rights.
5.4.4
The
Los
Angeles
County
Transportation
responsible for regional transportation policymaking.
Commission
LACTC
-78-
is
will coordinate
planning and construction of the proposed light rail line from Los
Long Beach.
(LACTC)
Angeles to
5.5 The Master Planning Process
is
project
Rail
Metro
The
concept pattern of development.15
primary element in realizing a "centers"
Within the context of this development
combined development entity
the
framework
a
developers, including:
higher
offer
can
benefits
several
to
densities, a mix of bonuses and incentives and
16
other joint development tools which fall into Four categories:
Transfer of Development Rights
that
to develop is
right
the
bought and sold.17
(TDR)-
concept is
This
based on the view
a component of land ownership,
which
can
be
Because transit system construction is an
infrastructure improvement,
the public can recoup some of the costs through a
TDR program.
Development
rights
transferable
are
increases the capacity of an area
can
be
creates
increases
to
developers
improvement
Thus, density levels
salable
new,
development
are empowered to use TDR and
The City and County of Los Angeles
to sell density
transit
the
by increasing access.
raised and the public investment
potential.
because
in the rezoned areas and place the
revenues in a Metro Rail operating or construction fund.
Leverage
Capital
planning and especially
Financing- In the early
stages
of
joint
development
at more complex sites, additional funds are sometimes
needed to help finance private
investment
in
a
sensitive
area.
Without
public leveraging tools such as Urban Development Action Grants, a program
-79-
of
the
of Housing and Urban Development, reinvestment in areas
Department
U.S.
Several of the agencies have the
not proceed.
might
unpopular to developers
ability to apply for UDAG funds although the CRA is usually the applicant.
This category is identified in response to a
Project Approval Assistanceof
reluctance
organizations
fear
for
departments
interactions
intended to be
Council,
but the three members
which is
Assistance in
Assembly-
In
estate
project
approval
and ombudsman support assistance efforts,
of
the
the
in
development
process
are
(interagency) Professional Development
are expected to serve this function.
Land Acquisition Through
Development
Rights
Air
and Land
exchange for this assistance, the developer can be required
fees,
enter into land leases,
sign operation and maintenance
redevelopment
real
Currently there is no official ombudsman in each
described above,
pay station connector
and
public
in the
with the public participants
simplified.
The "ombudsman"
all necessary paper work through all agencies
Through project packaging
process.
agency,
involved
public
with
business
of project delays and cost overruns.
function involves hand-carrying
and/or
conduct
to
developers
private
authority
agreements.
technique and is
to
provide public amenities,
This
is
traditionally
a
available to the cooperative entity
18
through the CRA.
5.6 Preliminary Findings
The joint development and
value
capture
policies in Los Angeles evolved
through a well-researched and comprehensive process.
-80-
The use of charettes as
a
joint development.
approach to
is
still
resulted in
device
simulation
a
plan,
agreement
the selection of the cooperative
The joint development program in Los Angeles
by
granted
is
funding
and until project
the
federal
government, efforts to coordinate development will be limited.
The foresight of planning
of
will
construction
The
developers.
development framework well in advance
substantial
benefits
SCRTD will prevent preemption
options by premature
development
yield
joint
a
development.
Many
be
minimized
because
the
the
joint
the
a
result
cooperative
of
public
sector
and
development
early
planning.
to
ensure that
will be capable of coordinating large-scale station
development projects.
-81-
to
development team is
professionally-managed, and has assembled the necessary tools
the
public
of the risks associated with joint
projects are likely to lessen as
Risks will also
of
to
area
ENDNOTES
1 Presentation on
Los
Angeles
Metrorail
by
Susan O'Carroll at 1984
meeting of the Transportation Research Board).
2
and
Susan Jones O'Carroll and Gary S. Spivack, Joint Development
the Los Angeles Metro Rail (Southern California Rapid Transit District,
1983), p. 1.
3
Southern California Rapid Transit District, Joint Development and
Local Policy Formulation, (Urban Mass
Value Capture in Los Angeles:
Transportation Administration), 1983), p. 11-5.
4
SCRTD,
Metro
Report-System Plan,
"Joint Development
(Southern California
5
See Chapter six.
6
SCRTD, p. 11-6.
Draft
12
Preliminary
Rail Project Milestone
cited in Susan Jones O'Carroll and Gary S. Spivack,
and the Los Angeles Metro Rail: A Status Report.
Rapid Transit District, 1983).
Ibid. p. 11-6.
8
SCRTD's Real Estate Director
was
lured away from a similar position
where a similar
at the Washington Metropolitan Area Transit Authority
committee exists (see Chapter 5).
9
Telephone interview with Donald Spivack, Senior Project Manager,
Community Redevelopment Authority of Los Angeles, April, 1984.
10 SCRTD, p. 11-5.
1
State
of
California Public Utilities Code, Chapters 497
and
1322,
1981.
12 SCRTD, p. 11-7.
Ibid.,
p. 11-8
14
O'Carroll and Spivack, p. 22.
15 SCRTD p. 11-8.
16 O'Carroll and Spivack, p. 18.
Ibid. p. 11-8.
17
Hagman
and
Misczynski,
1978,
cited
p.19.)
18 O'Carroll and Spivack, p. 14.
-82-
in
O'Carroll
and
Spivack,
Chapter Six
BOSTON AND TORONTO
STATION AREA DEVELOPMENT IN BALTIMORE,
6.1 Introduction
case
The
studies
presented in Chapters
Washington Metropolitan Area
internal
the
Transit
Southern
California
of
each
the
provided
The
Authority,
described
in Chapter four,
sites
fragmented
environment.
organizational
Rapid Transit District, described in Chapter
benefited from the experiences
between
have
five
approach and developed several station
department
while operating within a complex and
The
and
of the three approaches to joint development.
examples of the first two
used
four
of
five,
and enacted a cooperative agreement
WMATA
development agencies before
sysetem
the
has
broken
ground.
Of
to
three approaches
the
Development Corporation,
joint
been implemented in
has
Maryland and Portland, Oregon. This
the Baltimore TCDC.
cities
to
take
development,
chapter
the
of
the
Urban
Corridor
only two cities: Baltimore,
presents
a brief description of
This case is unique because Baltimore
advantage
Transit
is
one of the few
Initiatives program described
in
Chapter two.
Joint
development efforts in two other cities,
also described.
Toronto
and
Boston
The Toronto joint development process is a combination
-83-
are
of two approaches:
a
formal agency interacation process exists in
and is coordinated by the
first
Toronto
Transit
internal development depart-ment in
Commission, which established the
the 1950's.
The Boston, Massachusetts case is a desription
of
the Southwest Corridor
Development Program, part of a major transit project which
place
of
the
soutwest
community opposition.
the
expressway,
development
This development program
to
occur,
but
only
by
consider
formal
policies
Traditionally, the
role in development coordination, allowing projects
of
at the initiation
opportunities have been
being built in
has served as the impetus for
of land at other station properties.
MBTA had played a passive
is
radial highway which was stopped
a
Massachusetts Bay Transportation Authority to
for the
the region
private
developers.
Although
missed, many parcels under MBTA control are available
for development.
6.2 Joint Development in Baltimore, Maryland
As described in Chapter
groundwork
for
the
development corporations.
two,
Urban
establishment
Until
transit system established its own
Development
the
of
Initiatives
quasi-public,
program
laid
the
transit-corridor
recently, when the Portland, Oregon regional
development corporation, the Market Center
Corporation of Baltimore,
Maryland
established under this program.I
-84-
was
the
only
such
entity
public-private
the Market Center
founding,
its
established
was
(MCDC)
Corporation
Development
at
written
compact
the
to
According
create
to:
1979
in
partnership to revitalize the declining retail area;
advantage of joint
to
and,
opportunities;
development
to
a
take
qualify for federal
Urban Initiatives funds. 2
6.2.1 Transportation and Development in Baltimore
Baltimore has anticipated the construction of a rapid transit
area
metropolitan
the
completed. In this period,
planned
several
periods
characterized
to
and
severely'
by
BAMTS
was
Currently, the peak
section
downtown
the
from
the
transportation improvements were
held up through citizen opposition and other obstacles.
commuting
the 1964 Baltimore
since
growth
has experienced significant
million,
2.1
for
The Baltimore region, with a 1980 population
Area Mass Transportation Study.
of
recommended in
was first
it
since
system
of
the
city
are
congested roads and the regional transit network,
originally proposed as a 65-mile
system,
radial
intended
was
to alleviate
some of these transportation problems (see figure 6-1).
The
first
segment,
(MTA)
Administration
Transit
Transportation
rapid transit lines of the proposed system opened
The 8.5-mile
November, 1983.
Mass
the
of
(MDOT)
with 85% of its
known
of
the
as section A, was built by the
Maryland
cost financed by UMTA.
was financed through gasoline taxes and state funds.3
subsequent
lines
is
subject
to
federal
currently uncertain.
-85-
in
funding
Department
of
The local share
Construction of
commitments,
which
are
Figure 6-1
THE BALTIMORE RAPID TRANSIT SYSTEM
sp.oo LANE
cooD
M
DAWUIN
60LTO "ILL
LU46:5S TA99T
William Donald Shaefer, a third-term
of
years. Recently, under the direction
mayor credited with much of the city's success,
waterfront.
Led
by
restaurants
festival-like group of buildings housing
have
spent
development,
was achieved
$xx
in
million
new
construction
which has also taken place in
has
reclaimed its
since
and
shops,
19xx.
a
developers
Much
of the
some of Baltimore's neighborhoods,
through the urban renewal programs of the 1960's and 1970's.
Baltimoreans
are
accustomed to a strong relationship between the private
development community and
Development
Baltimore
Company, which constructed Harborplace,
Rouse
the
over the last twenty
impressive redevelopment
an
Baltimore has undergone
(DHCD),
which
development corportations.
the
city's
Department
of
Housing
and Community
is responsible for Baltimore's three quasi-public
MCDC
is
the
partnership in Baltimore.
-86-
most
recent
of the public/private
Planning Department,
Joint Development- In the late 1960's, the Baltimore
studied
in analyzing the land use impacts of the proposed subway system,
potential
for
analysis
were
UMTA.
by
granted
requested
Council
planning organization,
comprises
Transportation
of
looked
the stations. Funds for this
the federal government
from
The Regional Planning
Department
Maryland
of
some
at
development
joint
opportunites
at
the
on
eventually
were
and
which,
(RPC),
Baltimore's
with
the
metropolitan
a regionwide basis.
RPC
identified three station sites in 1976.
or
The land around each of the proposed stations was within
an
renewal
urban
area.
was declared
Because of this status, this land fell under
instrumental
been
has
jurisdiction of the DHCD, which
the
the evolution of
in
4
joint development around transit stations in Baltimore.
6.2.3 The Coordination Process
Baltimore,
In
local
and
groups
departments,
the
The
agencies.
coordination
community
MTC,
high
the
the
groups,
RPC,
level
Maryland
DOT,
has
been
and
UMTA
necessary
provided
mayor,
the
developer,
coordination
of
implementation of joint development
interest
necessary among private-sector
is
other
for
city
federal
successful
through the HCD, and
5
through its development entity, MCDC.
MCDC
heart
has been involved with the redevelopment of Market
of
components.
Baltimore's
retail
district.
The
project
Center,
includes
in
the
several
The joint development portion inc-ludes the rehabilitation of an
-87-
historic structure, and construction
a new seven story building.
of
million project will contain office and retail
space, including, Hutzler's, a
store
department
the first
major department store, which is
million
one
square feet of commercial space with parking will also be constructed
MCDC will not generate lease revenues from
as a part of this project.6
Proceeds will
but will actually sell the project to developers.
this project
be used to coordinate
area.
built in
be
to
An additional
Market Center area in fifty years, according to MCDC.
the
The $10
the
development
of
addtitional
sites in the station
7
6.2.4 Findings
The
MCDC
was
formed for several reasons.
opportunities are limited
of
districts
the
city.
fall
and
significant
for
downtown-oriented
redevelopment..
transit-related development opportunities available,
have
been
more appropriate.
areas are already
developed,
transit
a
system
under
eastern metropolitan area which has already
construction in a well-developed,
undergone
within the confines of the urban renewal
not unusual
This is
development
First, the joint
In Los Angeles,
because
of
the
other
additional
Were
approaches
might
even though many of the station
different
jurisdictions with
control over station area development, the cooperative agreement
approach was
a viable option (see Chapter five).
Transit coridor development corporations have their limitations.
limited
scope
of
development
options,
the
future
of
the corporation is
tenuous. Unless legal agreements are established outlining methods of
-88-
Under a
problems
problems after the entity is dissolved,
long-term
addressing
It is likely that the primary reason that
may arise.
future site development
the City of Baltimore formulated
with
the MCDC, was to take advantage of available
funds from the Urban Initiatives program.
Second, the MTA is a state rather
coordinate devlopment projects and is not
normally
heavily
relies
on
accountable
directly
to
the Boston metropolitan area, which
Unlike
region.
the
of
the residents
MTA does not
regional agency.
a
than
service
the communities within its
financial
for
area
8
support, local jurisdictions do not directly pay for the MTA deficit.
From the combination
of
the
limited role and the city's vigorous
MTA's
level of participation in devlopment, the establishment
As
easily.
Lutin
and
noted
Walker
of
the
MCDC follows
in their article about the process
of
establishing MCDC:
passive role of
Baltimore went beyond the traditional
planning and entered the sphere of the private entrepeneur.
The government became the planner and developer. In fact,
when proven
likely
it appears that success is most
development techniques--those with which the municipality
the
has had previous successful experience--are used in
joint development process.
Third, planners in the Baltimore
from
its
to
the
south
to
coordinate
projects
with
had the same benefit of learning
in Washington as
Angeles
Although unlike Baltimore, Los
Angeles.
entity
neighbors
region
developers,
value of advance project coordination and
formal process.
-89-
does
did
not
planners
use
a
in
Los
separate
both cities ret'agized the
of forming agreements outlining the
6.3 Joint Development in Boston, Massachusetts
6.3.1 Introduction
close proximity to transit,
are in
be
attributed
to
few direct links are provided.
Transportation
Boston
MBTA
one
In addition, only
district
authority
Bay
for the
did not formulate policies related to station area development.
area,
station was developed (at the
opportunities in
Although joint development
Concourse).
Massachusetts
the
transit
regional
the
(MBTA),
Authority
1984,
Until
Boston.
in
developers
private
can
local officials or
development had not been seriously considered by state and
by
This
fact that coordinated
the
and
system
the
of
age
the
area of Boston
downtown
the
in
While most of the commercial properties
have
(CBD)
missed,
been
transit system which could be
owns
the MBTA
developed
joint
for
Washington Street
the central business
throughout
property
uses.
review some of these opportunities in the context of the
the
This section will
agency's
efforts to
formulate joint development policy.
development
Suburban
examples
successful
of
Transportation
access
strongest market factors
the
along
development
largely accrued to
Boston's
rail
development
of
to suburban
for
urban
private
expansion.
sector.
as the have created valuable parcels
of
-90-
to
is one of the earlier
corridor
real
estate.
create
some
of
the
The benefits associated with
transportation
facilities
have
Public transportation entities such
real estate through the construction
of transit lines only to see private interests
land values.
rail
helped
Boston
of land adjacent to Boston
the
lines
reap the benefits of increased
developed around a small cluster of narrow streets and
century,
into a pedestrian-oriented
served
(described
Washington
on
two
Boston's
development.
Street
in
one)
Chapter
major
and
much of Boston's
stores, Filene's and
Jordan
district,
retail
of Boston's
heart
subway
when
influenced
department
the
in
evolved
has
The CBD has been
transit.
by
served
well
zone
rapid transit since the early twentieth century
by
trolley investors
Marsh,
the seventeenth
in
Boston's central business district, first established
influenced the routing of two rapid transit lines to a station between them.
All
four
rapid
transit
lines
and
Washington station, which serves the red
Boston's
documented
only
of
example
a
publicly-managed joint development
project; a concourse of small shops connecting
and Filenes.
600-foot
uses).
an
the
basements of Jordan Marsh
passageway
(-which has
not
green
the
In addition, the station is connected to
underground
been
on
Washington
Street
just
blocks
four
line via a
developed for other
The fourth rapid transit line, the blue line, is also
entrance
the site of
is
lines,
orange
Street.
Washington
converge on or near
accessible from
of Washington
north
station. (Refer to figure 6-2 for an illustration of the transit system.)
6.3.2 The Boston Transportation Controversy
Boston has experienced several tranportation controversies, one
has
resulted
in
the
transit alternatives.
Gakenheimer,
in
of
which
cancellation of two major highway projects in favor of
These
were
not
built
as
a
result
of
what
Ralph
his 1976 book on the freeway revolt, describes as "an almost
complete highway moratorium in the late 1960's brought on by strong, public
-91-
Figure 6-2
THE MBTA RAPID TRANSIT SYSTEM
mc.
WONDERLAND
OAK GROVE
TCO
LOWCtt
~u
ALEWIFE
'O
SOUTM
AC
TON
to
DAVIS
NRHES
WELLINGTON
ENO
*AAGNE
HARVARD/BRATTLE Q
HARVARD
SULLIVAN SOUARE
SUFFOLK DOWNS
oc
ORIENT HEIGHTS
LECHMERE
SCIENCE PARK
COMMUNITY COLLEGE
Ge
NORTH STATION
HAYMARKET
BOWDOIN
CAMBRIDGE CENTER/M I.T
CHARLES/MGH
ESSEX;--
BOSTON
COLLEGE
ac
CLEVELANDS
CIRCLE
ANDRE W
BAY
PRUDENTIAL
SYMPHONY
DOVER
NORTHEASTERN
NORTHAMPTON
BRIGHAM
8
SOUTH STATION
BROADWAY
ARLINGTON
KENMORE
RAPID
TRANSIT
LINES
T
WASHINGTON
BOYLSTON
AUDITORIUM
AIRPORT
AOUARIUM
GOVERNMENf CTR.
COPLEY
WOOD ISLAND
MAVERICK
PRK ST.
To SaamoN"a"
BEACHMONT
IPSwVCN
CENTRAL
RIVERSIDE
D
REVERE BEACH
TO1EVEAL
N
NOmwES ExTNS N
O ____
UNX CNSf
_____
NCI
POR TER
faeu
MALDEN CENTER
5TE
CIRCLE
o
DUDLEY
HETH
C
EGLESTON
RESERVOIR
0
ARBORWAY
E
RAPID TRANSIT LINES
COMMUTER RAIL LINES===A
J FK/
UMASS
SAVIN HILL
DNERDS
GREEN
SHAWMUT
FOREST
HILLS
ASHMONT
NORTH
WOLLASTON
'UINCY
QUINCY
1r0ST
0G4.,O
An LES8O0
Source: MBTA Annual Report, 1982
-92-
MATTAPAN
OUINCY
CENTER
ADAMS
BRAINTREE
This anti-highway sentiment did not result
anti-highway groups.9
support,
transit
particuarly strong
operating
to
restricted
been
as citizens were skeptical of
however,
government transportation agencies in general.
and
in
As
transit
a
constructing
MBTA
has
system
and
the
result,
a
development at transit stations had not been pursued.
the northwest and southwest radial expressways had
for
Because the funds
been allocated to the region
Planning
Boston Transportation
the
established
from gasoline taxes, Governor Francis W. Sargent
regional transportation
needs and determine the best use for these funds.
both the northwest and southwest
corridors,
to
time in
first
the
MBTA
R
"this
Southwest Corridor Development Plan,
the history of
the
United
States
In
expressway were
the
for
funds
transferred to transit and community development uses.
According
study
to
1970
in
Review
was
the
that a major expressway had
10
been scrapped and the land and funding converted to other uses."
The funds were used to construct two rapid transit
mile
extension
of
the
Red Line from Harvard Square in Cambridge to Alewife
Brook at the borders of Cambridge,
corridor,
and
2)
elevated track above
a 3.7
1)
projects:
Arlington
and
Belmont
in
the northwest
a complete relocation of the Orange Line from its
present
Washington Street to a depressed track just a few blocks
to the west on land which
had been cleared for the soutwest expressway.
project also includes improvements
to
the
MIBTA
corimuter
facilities in the same right-of-way (see figure 6-3).
-93-
rail
and
This
Amtrak
Figure 6-3
Transit Project
Corridor
Southwest
The
*Two more stations, South Cove and Essex (existing) follow Back Bay
SOURCE: Kaiser Engineers/ Fay, Spofford, and Thorndike
-94-
6.3.3 Planning Station Area Development
of
Southwest Corridor Development Plan- The plan for the development
The
has
corridor
the southwest
actual plan was approved in 1979 by
The
corridor project was first proposed.
the
the state (which acquired most of the land for
agency
state-controlled
groups
community
expressway).
(many
which
of
of numerous studies since the
the 'subject
been
is
the
constructing
The development plan
and
other commercial
and by local
system),
which were responsible for stopping the original
includes
residential construction,
new
Community
park system, an industrial park, new Roxbury
linear
the MBTA (a
expressway),
industrial
College,
a
and
The MBTA is the lead participant in
uses.
development planning.
Few of the projects which were proposed
reason
major
for
corridor project.
and
the
lack
the
delay is
Other factors,
southwest
delays.
corridor
The
of
the
the need to complete
construction
including changes in government leadership,
of private initative in
contributed to the
in
this
in the plan have been built.
a
developing
low-income
area
have
In addition, there are numerous agencies involved
and
project
the
M-BTA
has
system
emphasized
construction over active development planning .11
Other Station Area
Development-
Because the development of MBTA stations
is regarded as a source of badly needed
system
improvements and revenues, in
1983, the MBTA began to develop a land disposition
At
and
development
program.
about the same time, because progress on the Southwest Corridor was
of schedule,
ahead
the MBTA began to consider station area development policies and
-95-
procedures.
Within
jurisdiction
over
3)
1)
are
planning functions
the
the
estate
transit
2)
the
and,
4)
the
In
which
certain
addition,
by the construction directorate.
conducted
in the need for internal consolidation,
resulted
directorate;
division;
information).
have some
which
offices
four
real
rapid
(public
directorate
communications
are
there
development:
division;
rail
commuter
agency
the
is
This has
currently
under
consideration.12
Route 128
Train
Station-
Before
formal
and
policies
procedures were
developed, however, the MBTA Real Estate department began efforts
the
train
station
parking
develop
This
Route 128 in Dedham and Westwood.
at
lot
to
project is described as follows.
by
This $44.5 million project, to be developed
Properties, Inc.
Gilbane
of Providence, R.I., the development arm of the Gilbane Construction
The project is unique because the majority
is referred to as Stationpark.
its
value
I-95/Route
is
created
rail
by
not
but
access
interchange and to Route 128,
128
Company,
by
of
proximity to the
its
the inner belt highway
serving
the suburbs of Boston.
Gilbane Properties'
development plan consists of a staged construction of
a 150,000 square foot, six
parking
story
garage in the first phase.
foot, six
third phase
first-class
The next building
story building with a 500-car garage.
will
consist
of
a
office building with a 525-car
250-room
a
100,000
square
If these are successful, the
motor hotel with a 250-car garage
followed immediately by another 300-car garage.
-96-
is
The phasing of the
to
construction
and
parking
of
development includes provisions for minimization
disruptions due
the
the developer with opportunity to modify
provides
project (within limitations) as needed once occupancy is achieved .
The train station will also be
side
tracks
the
of
according
which,
with
redeveloped
developer,
the
to
buildings
new
are intended to
incorporate the notion of rail passenger travel into the development.
are
There
in the planning of Stationpark: the development
participants
main
four
on each
team, the MBTA, and the towns of Dedham and Westwood.
According
to
Stationpark is as complex as a suburban development can get.13
negotiating
process,
development
developer
The
has
approval
MBTA
to
process
comply
could
with
not
be
as
had to
analyses in response to community concerns and because
is being asked by the
development
are
The original proposal called
projects.
for construction to begin in the summer of 1984.
extensive
The
site restrictions, and engineering constraints
complicated as downtown
conduct
Properties,
Gilbane
of
president
Gilbane,
Robert
local
it
zoning requirements, the
completed under
the
original
timetable.
6.3.3 Preliminary Findings
The MBTA,
one
North
which operates the oldest subway in
America
as
well as
of the few new rapid transit systems constructed in recents years, has
number
of
development
opportunities
at
its
stations.
Route 128 commuter rail station (described above);
-97-
a
These include: the
a major air rights
in
development at the South Station Transportation Center
project
at
opportunities
the
through
funded
initially
Urban
Downtown Boston (a
program);
Initiatlvs
eleven other rapid transit facilities.
and,
Refer to figure 6-3
for the locations of these stations.
These opportunities
departments
policies
within
to
transportation
ensure
that
Before
objectives.
consolidation
the
and
by
coordinated
productive
these opportunities
actively, the MBTA and other responsible
internal
achieve
projects
the
and
several
local planning departments without formal
and
MBTA
the
identified
been
have
agencies
would
are
use
land
and
pursued
more
from
both
benefit
establishment of policies and agreements to
establish a development framework.
Within this framework, the agencies
benefit
from
a definition of their roles and
transit agency and
coordination.
involved with joint development would
powers.
The
MBTA,
as
the
property owner, is the appropriate lead agency for project
The process
of
coordination
other agencies would proceed more smoothly if
area development were established.
-98-
both within the MBTA and between
formal
procedures
for
station
Figure 6-4
JOINT DEVELOPMENT OPPORTUNITIES IN THE MBTA SYSTEM
TO
REAOING
mAvEAHILL
1
OAK GROVE *
; WONDERLAND
MALDEN CENTER *
VERE BEACH*
LOWVELL
ALEWIFE
*
DAVIS
WELLINGTON*
NORTHWEST EXTENSION
UNOER CONSTRUCTION
TON
SULLIVAN SQUARE
BEACHM ONT
TOBEvER.Y
IPSWCH
ROCKPORT
1
/NS
ISLAND
HARVARD
AIRPORT
CENTRAL
CAMBRIDGE CENTER/M I T
RA PID
TR ANSIT
SLINtES
T
CHARLES/MGH
SOUTH STATION *
BROADWAY
*Identified
Opportunity
ANDREW
To FRAMINOAM
BOSTON
COLLEGE
B
4
NORTHAMPTON,
DUDLEY
C
ARBORWAY
E
RAPID TRANSIT LINES
COMMUTER RAIL LINES
J.F K./
U MASS
EGLESTON
NORTH QUINCY *
GREEN
WOLLASTON
FOREST
QUINCY CENTER
HILLS
QUINCY ADAMS
TO STOuGHTON
FRANKLIN
AVt LE SO O
MATTAPAN*
BRAINTREE
Source: MBTA Annual Report and conversations with MBTA Real Estate Department
-99-
6.4 Joint Development in Toronto
The
of Toronto and surrounding metropolitan area is
City
downtown
are
The
development.
transit-related
development
by some of the world's largest
led
Toronto developers,
above the alignment.
lines which serve the
by the clusters of large-scale
identified
easily
subway
main
two
for
a showcase
of transit access
benefits
real estate firms, have been quick to realize the
for their developments.
Many
of the development projects which are directly integrated
rapid transit
development
orientation;
the
and,
coordinated
transit ridership is high;
conducive to joint development:
Toronto has a downtown
transit-related
These projects have been
programs in North America.
in an environment
other
for
model
a
as
served
have
system
the
with
process
planning
allows for
formal interorganizational cooperation.14
strategy
development
This
(TTC),
Commission
has
rapidly
City
of
Toronto
Toronto
13-community
region.
and
the
five
other
municipalites,
consolidated
The metropolitan government is responsible
regional services including
land
of
need to better serve a
for services, is a two-tiered federation
demand
and
Toronto Transit
(Metro). Metro, which was formed in
response to Eragmented jurisdictions
increasing
the
transit agency which falls under the jurisdiction
the
the Municipality of Metropolitan
1953 in
by
promoted
been
for
the
of
from
a
major
use planning and the provision of funds for
such
as
the
City
of
Toronto
transit system expansion.
Local governments
comprise the second tier.
Each of the six municipalities must conform with
-100-
One such regulation, endorsed by
regulations.
zoning
and
goals
regional
core
Metro in 1978, promotes development at the downtown
which are located at transit terminals.15
impact
and
occurred
This regulation has had an
much
1978,
by
area had already been built-up
has
at subcentres,
downtown
transit-related development. While most of the
suburban
on
and
downtown redevelopment
to
redevelopment has been attributed
the
of
substantial
good
transit access.
6.4.1 Coordinating Joint Development
first
subway
line
on
street
running
from
the
The TTC constructed its
commercial
north-south
suburbs,
in
was financed
Most of the initial
1954.
mainly
its
development.
TTC
have
program,
capital
TTC
Over the past thirty years,
been
built
profits
up
major
the
to the northern
4.6-mile segment of the subway
system
during World War II
when
support
government
control over potential station area
retained
it
Street,
downtown
Because the TTC did not have to seek
revenues were high.
for
using
Yonge
of the properties owned by the
many
developed, generating approximately
$1.5
million
in
lease
revenues annually (see figure 6-4).
Construction of
Province of Ontario.
stations
and lines since 1958 has been subsidized by the
Because the
provincial
subsidy is available only to an
upper-tier municipality such as Metro, the funds
for right-of-way acquisition
are channelled to the TTC from the Province through
funding system,
Metro.
Because of this
development rights at new stations are given to Metro.
-101-
Figure 6-5
THE TORONTO TRANSIT SYSTEM
Stuis
Stee.s
A4 W
~
Ave.
....
c
Ave.E
...
To
....*
.. tO
-e
emua
e
carborough (under construction)
Eghnton West (under study)
..
....
..
GO Lakeshore (under study)
GO Northern ne(under study)
which have remained under TTC control have been developed
For those parcels under Metro control the TTC
through a lease arrangement.
parcels
Those
When
has developed disposition procedures:
the
construction,
stations,
this
is
is offei-ed
parcel
a
it
is
then
process
concurrent
Metro has the
efficiencies can be realized.)
site;
offered
to
to
the
TITC
for disposal.
Metro
so that design
right
private
developers.
has sold the parcel.
(At certain
construction
and
which the station
is
situated. If it is not of interest to either party, the site
to
station
first refusal of the
of
in
municipality
the
completed
has
is
then offered
Some sites are leased, but in most instances,
Metro
Revenues from land sales are returned to the Province in
6
proportion to the original subsidy formula.1
Coordination of these
projects
is
critical
to success.
commissioners are appointed by Metro, is usually the
close Metro supervision.
lead
The TTC, whose
actor but is under
The other actors are the municipality in which a
-102-
adjacent
(property taxpayers in the
"ratepayers"
the
located,
is
project
the
neighborhoods, the private developer(s), and
Ontario
Municipal Board, a
provincial zoning dispute-resolution body.
6.4.2 The Participants
Local
developed
the
At
Review-
Zoning
local
of
"metropolitan centres" as focal points
transit.
There is
while
serving
also
a
this growth in central Toronto and at other
concentrate
to
have
municipalities
zoning regulations to regulate station-related growth.
conscious policy
activity,
the
level,
as
business,
government and community
for
hubs
transportation
surface
local
in Metropolitan Toronto to develop
This results in a clear strategy
programs and policies which support rapid transit and adjacent land uses.17
The
regional
objectives.
municipality
developed at the local
regulations
zoning
can
determined
is
zoning
Once
development through
permit
a
a
for
site
permit.
building
to
conform
must
level
the
In
local
most
18
instances this is the extent of the participation of the municipality.
Private
developments,
must
Kenneth Cooper, an
long
Developers,
Developers-
relationship
also deal with additional
in
for
architect
with
negotiations
This is
and
the
to
gain
complexities.
the
from
most
to
According
a leading development firm which has had a
TTC,
the
difficult and often painful.
involved
stand
who
the joint
due
to
development
the
construction
avoiding the disruption of system operations.
-103-
extra
problems
process
is
bureaucracy
associated
very
(TTC)
with
He suggests that two reasons
for
the
in Toronto are the business-like manner of the TTC and the
successes
of
members
fact that the
the
at the TTC have
staff
development
property
worked at the agency for a long time. 1 9
To accommodate demands for system access, the TTC has developed
of
Transit
of
policies
TTC
the
Authority,
the
an
and
to
If developers want a separate
to the station, they must pay for all of
automatic entrances
Metropolitan
Washington
charge a fee for the right
not
does
interface with the subway station.20
entrance
policy
pay for any improvements necessary to hook into
In contrast with the
the system.
Area
to
developers
requiring
a
attendant
the
equipment,
including
booth (approximately $300,000).
completion, the TTC would only man the booth
if
daily
Upon
traffic exceeded 1000
passengers.
6.4.3 The Benefits of Transit-Related Development in Toronto
The
above
TTC,
subway
along
with Metro, has promoted the development
stations
and
The proximity of
program.
ridership,
and
provides
development
a
In the downtown region as well
transit
system
additional
of
to
subway
transit
and
in
encourages
air-rights
a
remarkable
high
system
strong market for retail and office development.
as
at
some
suburban stations, access to the
is provided through well-lit, clearly
concourses of shops
lands
of
restaurants.
On
filled with commuters and shoppers.
-104-
a
signed,
and
spacious
weekday, these concourses are
A substantial amount of development has occurred
since
of
completion
operation
have
adjacent sites.
the
Air rights over stations
system.
developments
been redeveloped and new
have
are
in
built
at
which
been
of parcels at transit stations have asked the TTC
Developers
This
stations.
for access to adjoining subway
underground
adjacent to T'C stations
has resulted in a system of
hotels
tunnels in the downtown, connecting downtown
and
office
buildings (see figure 6-5).
Figure 6-6
DOWNTOWN SUBWAY CONNECTIONS AND WALKWAYS
The Underground City
12'
.
-
As described
-
-
"
TTC Subway &Station
Underground Passageways
above, the TTC owns development rights for a limited portion
of its rapid transit
system.
to $1.5 million annually.
Annual lease revenues for these sites amounts
In addition,
the TTC earns $1.5 million from other
lease revenues on parking lots and concession
space.
These revenues, based
on leases signed in the 1950's, represent one percent of the
costs of the TTC.21
total
Because the TTC has retained the rights to these
-105-
operating
properties, it stands to gain tremendous revenues in the future, when
will
In the next year, the leases from two of these projects
expire.
leases
current
with
be renegotiated
participatory
and by the seventh year the TTC
leases,
anticipates revenues of $1 million per year from each project.
This good fortune for the TTC is the result
planners
in
the
of
the
TTC
work
on the part of
the
while
and
rights,
TTC now retains real
development staff.
estate attorneys and development specialists,
to
foresight
1950's who chose not to sell off joint development
and the sophistication
have
of
developers may
to succeed, developers evaluate the TTC's requirements
harder
for project development as fair. 2 2
the TTC does not
While
Metro, there
in
issued
are
municipalities
of
in
the
from
Metropolitan
Toronto were
Real Estate
Toronto
research
departments
Limited.
The statistics show that in the
properties
Board
thirty-year
by
conducted
and
A.E.
by
the
LePage
period from 1954 (when
first subway opened) to 1984, Metropolitan Toronto experienced
the
owned
Surveys of building permits
benefits.
significant
other
benefit
financially
more
new
construction than during the first 120 years of the history of the City.
During
this
period,
half
of
all new apartment construction was put in
place within walking distance of rapid
transit.
In
the
same period, 90% of
all new office construction occured adjacent to Gowntown subway
other
major
Avenue).
stations
They
(Bloor
Street,
St.
Clair
Avenue
and
stations
at
and
Eglinton
concluded that access to the rapid transit system has played
an important role in
determining the location of approximately $30 billion in
new buildings since the formation of Metro. 2 3
-106-
6.4.5 Preliminary Findings
The joint development
planning process in Toronto is effective because of
which coordinates transportation and
major factor in
land use planning and policymaking,
back
to
joint
entity.
the
of
1950's,
when
the agency
Toronto's central business
which
an
was
was
district
take advantage of regional economic growth.
a
confident
maintained
participant
in
the
the
a
TTC has been
The TTC's earliest projects
projects.
development
time
in
a period of stagnation
it
was able to
The TTC established itself
joint
date
quasi-private
independent,
and because the TTC owned the rights to develop its stations,
as
is
successfully promoting transit station area development.
Another important factor is the length
coordinating
The metropolitan government,
in the region.
the overall planning environment
development
process
and
early
has
its level of professionalism throughout the thirty years since the
first subway line was constructed.
-107-
Endnotes
1
Funds for the program were distributed to several transit authorities
and communities in order to assist in the prepartation for several joint
development projects, as described in Keefer.
2
City of Baltimore, Md. Urban Renewal Plan: Market Center, (Originally
approved by the mayor and city council of Baltimore by ordinance No. 579,
November 16, 1977.)
3
Jerome Lutin and Cynthia Walker, Joint Development Around Intermodal
Transfer Facilites, (Transportation Research Record 760, 197x), pp. 33-39.
4
Ibid., p. 34.
5
Ibid., p. 36.
6
Market Center Development Corporation, "Action Fact Sheet,"
November, 1983).
7
(MCDC,
Telephone interview with........
8
Handbook for Local
Public Technology, Inc. Joint Development:
(US Department of Transportation, September 1983, p. 43.
Officials.
9
Ralph Gakenheimer, Transportation Planning as a Response to
Controversy: The Boston Experience, (Boston, MIT Press, 1979), p.
10
19.
MBTA, Southwest Corridor Development Plan, (MBTA, 1979), p. 3.
l1 These agencies include: the Massachusetts Executive Office of
and Construction (the chief policymaking body); the MBTA; the
Transportation
Metropolitan District Commission (responsible for parkland in the corridor);
(responsible for roadway
Works
the Massachusetts Department of Public
Council (responsible for
the Metropolitan Area Planning
construction);
the community
six or seven Boston city agencies;
regional planning);
two
and,
development corporations and the station area task forces;
(Ibid).
institutions.
educational
12Ibid.
13Telephone interview with Robert Gilbane, President of Gilbane
Properties, Inc. January, 5, 1981.
14 Carole Marks, Paper on Joint Development for course 11.308J,
Massachusetts Institue of Technology, April, 1984, p. 4.
15 Ibid., p. 9.
16
This is the same arrangement with UMTA funds in the United States,
where most transit agencies lease sites making certain that they are not
"surplus" properties. See Chapter 3.
-108-
17 Interview with Howard Sweezie, Manager
Toronto Transit Commission, April 4, 1984.
City
to
the
18 According
established, the overall concerns of
Metro.
Land
Development,
of Toronto, once zoning has been
the municipality are protected by
Kenneth Cooper,
with
19 Interview
Square Development Company, April 4, 1984.
20
of
Senior
Vice-President,
Canada
Sweezie interview.
21
In Toronto, 69.1% of operating costs are derived from farebox
The remaining costs are covered by subsidies and other revenues
revenues.
Revenues from concessions and
which amounted to $10.1 million in 1982.
30% of non-farebox revenue
or
development leases generated $3 million,
sources in 1982. (See TTC 1982 Annual Report: TTC, 1983)
22
Sweezie interview.
23
The
Commission, Metropolitan Toronto:
Toronto Transit
Development Connection (Toronto Transit Commission, 1983), p. 5.
-109-
Transit
Chapter Seven
SUMMARY FINDINGS AND POLICY RECOMMENDATIONS
introduced
in
studies
in
Chapter
this
Each of the three approaches identified
thesis.
model, the cooperative agreement,
unique
necessary
initiatives
and weaknesses as well as
for
of
will
and
model
the
chapter
This
requirements.
characteristics
important
the
successfully in at least one North
All three approaches have strengths
implementation
in
the internal department and the independent
development corporation, have been applied
American city.
focal point of the case
the
as
served
has
three,
which was
development,
joint
to
approaches
The model of institutional
will
summarize
synthesize
the
the
policy
success in the coordination of station
continued
area development.
7.1 Planning for Joint Development
.
As demonstrated in the case studies,
station
area
development
is
planning
the
a complex process.
high risks, high returns, multiple
and
actors
and
order to respond to these complexities.
formalized
institutional
of
Joint development involves
complex
regulations.
agencies have become more professional in their approach to
in
coordination
Public
joint development
To ease this process
further,
a
framework for joint development coordination can be
designed and implemented.
The case studies developed
in
this
thesis
approaches to this institutional framework.
-110-
considered three alternative
A major conclusion drawn from
in the joint development
these cases is that coordination between particpants
While
process must take place at the earliest possible time.
single
which
approach
there
is
no
most appropriate in a general sense, the theme of
is
early coordination applies to any joint development strategy.
7.2 Summary of Major Points
7.2.1 Activity Levels- Different
fall
a
along
continuum
of joint development coordination
types
As
planning activity levels.
of
from
Chapter one, these levels can range
agencies
demonstrated
planning
facilities
new
which actively encourage development, to agencies which have identified
opportunities
development
planning
new
transit
on
service
existing
older,
objectives
coordinated land use and transportation
develop existing parcels.
However,
joint
Agencies which are
parcels.
often in a better
are
in
to
position
trying to
agencies
than
achieve
existing parcels can be developed
if
the
environment for development is favorable to public/private coventures.
Equity
7.2.2
Issues-
As
discussed in
value capture techniques are assumed
tools
because
of
Joint development
the
in addition to offering a return on public investment.
joint development
the
efforts to implement
to be a public right.
is one of the more useful value capture
provides
Chapter one,
transportation
benefits
facility
it
In addition,
the private sector by granting improved access to
by
which,
transportation and land use, can result in an
coordination
between
efficient use of land.
Because
promoting
efficiencies of scale and construction timing allow
investment,
benefits
for
increased returns on
sharing of benefits from these projects between
private sector is more easily justified.
-111-
the
public
and
of
History
7.2.3 The
Policy Regarding Joint Development- As
Government
towards joint development has varied
described in Chapter two, federal policy
of
costs
condemnation for
period
current
of
excess
on
restrictions
The
development has also changed.
joint
Urban
the
(including
state and municipal level, the posture
the
At
support.
limited financial
as
support for transit to a
program to promote joint development) to the
Initiatives
towards
operating
of
subsidization
heavy
mass
in
involved
became
it
since
years
thirty
Federal activity has ranged from no
transportation.
period
the
over
considerably
other than transportation have been mitigated over time
ues
are
transportation improvements
regarded
being
as
a
urban
for
tool
economic revitalization.
The
recent
of limited financial support has led transit agencies
period
to pursue joint development
to
participate
in innovative financing practices
transit service and
investors
to
This has resulted from the need
actively.
more
tax
from
consider
joint
reforms
which
to
coincided with Reagan administration efforts to
operate
have encouraged developers and
reforms
These
projects.
development
or
construct
encourage
have
the private sector
to cooperate more actively with the public sector in development
projects and
in other areas.
7.2.4
Planning
As
Requirements-
mentioned
above,
in order to achieve
successful implementation of joint development projects, early
professional
staff
capablities identified
empowered
by
the
to
negotiate
Southern
projects
California
is
Rapid
planning
by a
important.
The
Transit District
serve as a valid framework for project planning (see Chapter five).
-112-
In most
joint
a
entity,
than by a single development
program which is
development
productive
coordinated within a formal institutional framework nmay be a more
The approaches to this framework are summarized
resources.
public
of
use
rather
planning functions are shared by a group of agencies
because
cities,
below.
7.3 Model of Institutional Approaches
development
joint
North
in
programs
coordination
America.
applied extensively but
joint
development
The cooperative agreement approach has not been
as the basis for coordination efforts in
The internal department approach
Toronto, Canada as well as in Los Angeles.
cities, including Toronto,
has been applied in one form or another in several
Montreal and Washington, D.C.
five
to
forms of
three
the
thesis,
applied
were
served
has
the
in
Through the case studies described
has
approach
The development corporation
the
fewest applications (Baltimore, Mary-land and Portland, Oregon.)
7.3.1
Cooperative
The
Chapter
Agreement Approach in Los Angeles- As demonstrated in
of
five, the selection
the
was
approach
As
environment.
complex interorganizational
agreements,
this
a
1)
these
agreements
were
reached
individual
development
agency.
functions
of the necessary
that did not previously reside
When the system is constructed,
risks
to
the
agencies and to developers will be minimized because the cooperative
-113-
appear
at an early stage of
planning; and, 2) the joint development entity combines most
and
the
of the cooperative
result
prospects for successful coordination of development
promising because:
planning
given
appropriate
in
one
public
-N
development team will be
to
tools
necessary
the
assembled
public sector will be
the
that
ensure
has
SCRTD
addition,
In
professionally-managed.
capable of coordinating large-scale station area development projects.
of
legislation to broaden some of the powers
is
which
agency
in
a
were not available, a public
which
position to the SCRTD
similar
special
enacting
by
and
agencies
development
public
central
the
By combining the powers
coordination is surely important.
strong interagency
Angeles,
Los
in
the type of organizational environment which exists
In
should
to
able
be
coordinate a successful joint development program.
Internal
The
7.3.2
Department
Approach
in
Washington-
cooperative agreement approach is the most comprehensive,
A
this option.
formal cooperative agreement between all of the agencies and
jurisdictions in Washington
problems
achieve,
such as
cities
D.C., the complexities of the organizational environment preclude
Washington,
related
in
the
While
however,
might
because
of the development
some
when system construction began,
skeptical about the project and
local
to
This was not possible
four.
Chapter
in
identified
.have alleviated
developers
were
officials did not recognize the impact
that the system might have on the region.
internal
The specific capabilities of the WMATA
good
example
elsewhere.
staff
of
for
officials
interested
internal
department
must
serve
as
a
in establishing similar departments
One of the significant observations
an
department
of
the
thesis
is
that the
have the the expertese necessary to
negotiate with private developers and must establish guidelines for internal
-114-
coordination.
Ifn Washington,
professionals
with
available to WMATA
estate appraisals and negotiations,
Two
from
not
capabilities
other
which would improve the internal deparment's strength are:
review
1) the power of zoning
distance
real
in
design and financial analysis.
and
planning
experience
staff of seven
a
with
achieved
this has been
which
projects
for
a specified
within
are
transit stations; and 2) a comprehensive planning function
to
coordinate land use and transportation planning efforts.
Transit
7.3.3
Corridor
established
entities
the
similar in purpose to
in a cooperative agreement.
are
provided,
the
development corporation is different.
may have little work once the
number of development projects. The corporation
Officials who are considering
are completed.
entities must
address
long
development
process
to
appropriate.
may
be
TCDC,
The
professionals may be limited by the small
which is staffed by ten development
projects
interacation
agency
While powers are consolidated into one agency and formal
points
are
TCDC's
(TCDC)-
Corporations
Development
requirements
range
determine
While the establishment
of
if
a
at
establishing
the
beginning
development
similar
of
corporation
the
is
such an agency on a temporary basis
acceptable, its future should be decided
upon
before
projects
are
developed.
7.4 Policy Recommendations
As demonstrated
in
the
case
studies,
the joint development process is
complicated by the number of public participants,
the demands of constructing
projects at transportation facilities and the problems of trying to achieve
-115-
coordinated
is
process
the
that
objectives are achieved.
strategies
There are, however,
development.
quality
efficient,
ensure
transportation
and
use
land
that
and
to
These strategies are summarized below.
in
identified
capabilites
The
7.4.1 Combining Capabilities-
Chapter
in
three as necessary for successful project coordination often do not reside
a
appropriate
is
approach
these
Under
agency.
single
circumstances,
the
cooperative agreement
powers
and
capabilities
agency
because
be
can
combined in order to achieve better development.
placed
7.4.2 Providing Communication Channels- Emphasis has been
importance
of
early coordination and planning.
strategy is the need
the
within
for
of
lines
formal
on
One important aspect of this
communication
between and
both
organizations involved in the development process and within
example,
For
agency.
lead development
the
the
intraagency as well as interagency
project planning committees can be established.
Public
7.4.3
Strategies
to
Reduce Private
several strategies available to reduce
with
a
sector
grant
or
costs
loan
of
a
programs;
project
market
Risks-
There
are
risks associated
sector
These include:
1)
reducing
by committing public funds through
infrastructure
2) contributing
land
or
facilities;
and,
3) contributing to
improvements such as new roads or other
the
private
project, as described in Chapter three.
the private
federal
the
Project
acceptance of a project by either actually leasing
space
in
office building or by encouraging tenants to locate at the new development.
-116-
an
Tradeoffs Between Objectives- A transit agency which is
7.4.4 Considering
considering pursuing joint
development opportunities must consider what is to
area
and
goals
development
WMATA, described in Chapter four, are a good example for other
of
objectives
station
(The
be achieved by such a program.
It
transit agencies.)
is important to point out that transit agencies must
generation
be careful not to allow revenue
concerns
to take precedence over
other transportation objectives.
7.5 The Outlook for Joint Development
Experiences
some success and by some
development
joint
development
the
to
programs, the three approaches
analyzed in this thesis
case studies, transportation agencies
in
development
in
different
joint
environments.
The three organizational forms have
objectives.
approach
to
the
As demonstrated in
development,
an
metropolitan
areas
attributes
which,
when
local environment, can achieve public
If it is not possible to implement
joint
process
political and organizational
complex
must coordinate
of
are being
planning
the
a range of alternatives.
provide
applied to the characteristics
projects
transportation agencies establishing
For
neccessity.
of
out
by
In some regions, as transit authorities
failures.
are facing increasing budget deficits, joint
coordinated
characterized
joint development in the 1970's were
with
a
understanding
new form of organizational
of the
capablities
planning activities required can accomplish these same objectives.
-117-
and
As
joint development,
or
development,
should
rail transit
of
These projects will be likely to succeed if
into
project
planning
used
the
institutional
approach
public
organizations
participating
of
the
on
joint development
of
expansion
book
lines, can gain the synergistic benefits
efforts are incorporated
stage. Regardless
process
existing
extending
joint development."
coordination
an
for
Metropolitan areas that are implementing
exists in many cities.
systems
potential
"the
its
of
the Urban Land Institute remarked in the conclusion
combine
institutional
capabilities
and
at
an
early
to coordinate joint
in
the
work
development
together
to
maximize public gain.
1Urban Land Institute with Gladstone Associates. Joint Development: Making
the Real Estate-Transit Connection, (U.S. Department of Transportation, 1979.)
p. 250.
-118-
Appendix A
Metrorail on Development
of
Washington
The Impact
The construction of a modern and efficient rapid transit system has had a
significant impact on the value of real estate which is close in proximity to
As
described in Chapter One, the high costs of system
Metrorail.
to seek value capture
public
officials
construction have prompted
Public sector value capture is however, often difficult to
opportunities.
implement because quantifying benefits of the rail system is not a simple
scientific process. As a result, techniques such as benefit assessments and
tax increments have not been implemented in Washington. The accuracy of and
challenged in court.
legal justification for these techniques is often
Resarchers (notably Lerman, 197x, and the Metropoltan Washington Council of
Governments, 1980, have attempted to determine methods of quantifying the
land use and propery value impacts of Metrorail to support public value
capture.
Other studies have measured the effect of Metrorail on regional growth.
In 1980, the Subcommittee on the City, U.S. House of Representatives
speculated as to the development benefits related to Metrorail:
A sample of the land value increases generated by the opening of Metro
leads to the finding that a minimum of $2 billion in land values has
already been added to the existing land value base.
These land value impacts have translated into increased housing costs,
higher retail and office rents. Owners of property adjacent to the system,
however, are only one group of beneficiaries from regional growth.
The Washingtonian magazine compared the price
Residential Real Estateof homes in close proximity to Metrorail to similar properties not served by
the system. Their study showed that over a three year per od the price of a
in Fairfax
typical semi-detached house close to the Huntington station
the average
period,
the
same
Over
70
percent.
County increased more than
concluded
that
They
37
percent.
rose
by
only
home
price of a Fairfax County
twice
as
the Metrorail factor caused homes close t9 the system to appreciate
fast as homes in areas not served by Metro.
The rate of appreciation in Fairfax County during this period is
indicative of residential real estate trends in the Washington metropolitan
While Metrorail has had an impact on the rate of appreciation, other
area.
factors are, also important, as described in The Washingtonian:
While proximity to Metro seems always to increase the value of a house,
its affect appears to be greater in two specific areas: 1) neighborhoods
Metro came along; and
that were showing potential for improvement before
far from the center of Washington
2) neighborhoods that aren't to
(within a twenty-minute Metro ride.
Commercial Real Estate- Metrorail access has had a positive impact on the
value of retail and office space both in downtown Washington and at suburban
In the retail section of the downtown, the construction of Metro
stations.
Center station (a junction of the red, blue and orange lines) a once
declining area is experiencing redevelopment. In 1977, Woodward and Lothrop,
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a major Washington department store chain, approved the location of Metro
Center station in its flagship store. Less than two years later, store
officials reported that more than 25 percent Sof their customers arrived by
Metrorail and that sales had increased by 40%.
The cost of prime office space has increased more dramatically than any
other real estate in the metropolitan area. In the business section of the
downtown6 office rents increased from $7-10 per square foot in 1976 to $28-34
At one office building within two blocks of both Farragut North
in 1984.
and Farragut Wegt stations, rates increased from $14 to $19 over a six month
period in 1980.
Access to the subway system has become a prime selling factor for real
estate developed adjacent to Metro stations. Again this is most evident in
The stations adjacent to Farragut Square
the area around Farragut Square.
are two of the busiest stations in the system, with o er 70 percent oF riders
The Federal City
surveyed in 1980 reporting work as their trip purpose.
Council's 1979 survey of Metrorail-related development found 1,200,000 square
feet of office development uilt since 1976 to be directly influenced by the
presence of these stations.
The Benefits to WMATA- In the first five years of Metrorail operation,
WMATA's
WMATA coordinated only two downtown joint development projects.
with
the
Station,
along
first joint development project, at Farragut North
600,000
to
generate
expected
non-downtown VanNess and Bethesda stations is
additional transit trips per year.- The development projects will pay more
than $3 millioyoannually in taxes to local governments, and $2 million per
year to WMATA.
(See section 4.5.)
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Endnotes
ISubcommittee on the City, US House of Representatives, "Metrorail
Impacts On Washington Area Land Values Summary, (US House of Representatives,
January, 1981)
2
Huntington Station did not open until late 1983, but anticipation of
of land value
station completion was sufficient to affect the rate
appreciation.
3
The Washingtonian, December, 1980.
4
Ibid.
5
Federal City Council, "Metro-Related Private Inves.tment,"
City Council, July, 1979)
(Federal
6
The Washingtonian, December, 1980, and telephone Interview with
Lawrence Goldstein, WMATA Development Branch, May 17, 1984.
7
Ibid.
8
Metropolitan Washington Coucil of Governments (MWCOG), Metrorail Area
Planning, (MWCOG, August, 1983), p. 45.
9
Federal City Council, 1979.
10Henry W. Cord, "Remarks for Transit at a Crossroads Conference,"
January 7, 1982
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Acknowledgements
A thesis which includes case studies of various cities requires many
Many individuals were particularly helpful
interviews with local officials.
in providing information and in responding to my perceptions of their joint
Special thanks are given to Susan Jones-O'Carroll
development programs.
whose speech at the Transportation Research Board Annual Meeting inspired
the Los Angeles case study. Additional thanks are given to Lee Skillman and
Lawrence Goldstein of the Washington Metropolitan Area Transit Authority;
and Juan Evereteze of the
Howard Sweezie of the Toronto Transit Commission;
Massachusetts Office of Transportation and Construction.
I am indebted to those who assisted with the preparation of this thesis.
These include the Metropolitan Area Planning Council in Boston without whose
support of part of this research effort this thesis would not have been
possible. Special thanks are offered to Edward Bates and Denny Lawton of
the MAPC transportation staff. Finally, I would like to thank Carole Marks
for her invaluable editorial assistance and Professor Ralph Gakenheimer for
his support throughout the course of this project.
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