By: Ben Bryan Issue: Transformation Section: Government
Impacting Economic Health and Quality of Life for Years to Come
Downtown Denver is being transformed by the $500 million redevelopment of Union Station and some 19 surrounding acres. When completed in 2014, this project will not only be a multimodal transit hub for the entire region, but will serve as the gateway to a significant new activity center bustling with housing, office buildings, retail shops, hotels and public spaces.
But the real transformative element, the catalyst for this important project is transit—and rapid transit in the metro area (light-rail, commuter rail and bus rapid transit) has the potential to impact more than just downtown Denver. The Denver metro area is in the midst of perhaps the largest rapid transit building project in the nation—FasTracks—and it may well transform virtually every region of the metro area. Approved by voters in 2004, FasTracks will consist of 140 miles of new rapid transit. It adds on to some 40 miles of existing light-rail developed to date by the Regional Transportation District (RTD).
How the metro area takes advantage of this huge and significant infrastructure investment could determine the extent of our region’s economic health in the next 50 years, while definitely having a major impact on our region’s quality of life.
Denver’s Rapid Transit History
Rapid transit is increasingly viewed as a critical element of a metro area’s infrastructure. Tom Clark, CEO of the Metro Denver Economic Development Corporation (EDC), ranks metro Denver’s rapid transit development behind only Denver International Airport (DIA) as the area’s most important infrastructure investment of the past 30 years.
Like many metro areas, Denver wrestled for decades with rapid transit—focused public policy issues: technology, construction and operating costs; competitiveness with highway and bus investments; and how to appropriately pay for it. RTD eventually proceeded on an incremental approach to rapid transit, developing in the mid 1990s a small core light-rail line in the central area of Denver supplemented at the end of that decade by the construction of the Southwest light rail line along South Santa Fe Drive.
The big boost for Denver’s transformational rapid transit development program, however, has come from metro area citizens’ willingness to vote for bond issues and sales tax increases: first for the T-Rex joint highway and light-rail project along I-25 in the southern portions of the metro area in 1999, and then for FasTracks itself.
FasTracks has four new rail lines under development—a combination of light-rail and commuter rail—which will total more than 50 miles at a cost of approximately $2.8 billion. These lines generally reach out to the west, east and north, to supplement the existing rail lines to the south. Most of the work will be done through an innovative public-private partnership—the largest such transit-oriented partnership in the country—which has attracted more than $1 billion in federal funds.
Ridership on RTD’s existing light-rail lines has consistently exceeded projections. Currently there are more than 66,000 daily weekday rapid transit trips, and while this is a relatively small number of overall transportation trips taken by all residents of the metro area, it represents one-quarter of all commuters using public transportation and stacks up very well nationally. Current and future ridership will be concentrated in and around central Denver, which is the job and activity locus of the metro area and where highways are constrained and opportunities to expand highway capacity is very limited.
According to the American Public Transportation Association (APTA), Denver is in good company as there are now more than 30 metro areas in the U.S. with some form of rail rapid transit, including almost all of the cities with which Denver competes for jobs and economic development. Debate still rages in some circles over the efficacy of rail transit and its costs per rider, fueled in part by a shortfall in funds necessary to build out the entire FasTracks network on the schedule originally set out to voters.
But the reality is that rapid transit is already transforming commuter patterns and the “built” environment in major regions of the metro area will create similar opportunities in many other regions in the very near future.
Transit Oriented Development
Molly Urbina, Interim Manager of Community Planning and Development for the City and County of Denver, points out that, “The most powerful element of the public investment in rapid transit, particularly rail rapid transit, is the certainty that is created.” Transit riders can be confident that the rail route and station locations, will not be changed—it is fixed for the foreseeable future and beyond. This certainty also benefits city planners and real estate developers, particularly in and around station locations because riders will congregate there regularly—resulting in real estate development known as Transit Oriented Development (TOD).
The timing and scale of the Union Station development, Urbina believes, is directly related to rapid transit investments. It will be not only a hub for rapid transit but the major connecting venue between rapid transit, regional and local buses, and the mall shuttle. Union Station is the most obvious example of rapid transit helping spur real estate development—TOD—albeit at the most important station in the system.
However, Union Station is by no means the whole story. FasTracks alone has 50+ new stations in its program. Any station location is potentially important because users of transit patronize them on a fairly constant basis, and if areas immediately around stations are properly developed, a symbiotic relationship can ensue: Station areas that provide convenient access, housing and amenities can increase the number of transit riders patronizing the stations, which can then increase the usage and value of the adjacent real estate. TOD can stimulate new growth, create new neighborhood/community centers as well as revitalize existing ones.
Benefits accrue for people who choose to live near stations as they have an inexpensive and reliable transportation option, making them less reliant on a car and its expense, while also having access to convenient amenities such as neighborhood retail. Benefits accrue to the region: less pollution from cars and less congestion on roadways. And, quality of life can be improved all around.
Marilee Utter, an executive vice president of the Urban Land Institute and formerly a Denver-based TOD consultant, notes that “One of the keys to RTD’s relative ridership success and potential for TOD is that the rail lines serve many of the region’s major activity and employment clusters.” Examples on existing rail lines are the Auraria Higher Education campus, the Denver Tech Center and downtown Denver. Examples on soon to be completed lines include the East line, which will serve Denver International Airport, and the extension of the line along I-225, which will serve the new, state-of-the-art Anschutz/Fitzsimmons Medical Campus.
TOD can be as simple as building apartments near stations, such as the recently announced Arista Uptown Apartments in Broomfield or the RiNo Center at 32nd and Broadway in Denver. The real opportunity, however, is for city planners, together with RTD and private sector developers, to work together to, ”holistically create community centers at transit stops,” in the words of Patrick McLaughlin, a TOD specialist with RTD. An existing example is what the City of Englewood facilitated at the old Cinderella City Mall site along South Santa Fe Drive and the Southwest light-rail line. It is now a bustling civic center for Englewood with residential, office, governmental and retail uses mixed with public spaces, whereas before it was a rundown skeleton of a mall.
In developing both its most recent comprehensive plan, Blueprint Denver, and a zoning update, the City and County of Denver focused heavily on the TOD opportunities presented by rapid transit generally and FasTracks specifically. At virtually every stop on the various rail lines in the city a TOD plan is either underway or soon will be. Rapid transit, according to Steve Gordon, the city’s point person on TOD planning efforts, “has created the opportunity to view the city in a different way.”
Interestingly, suburban cities such as Greenwood Village have also embraced the potential of TOD. George Weaver, its community planning director, notes that Greenwood Village had long sought to create a community center or civic center and once the T-Rex project became a reality, focused these efforts around the light-rail station on the Southeast line where Arapahoe Road intersects with I-25—the station is now officially designated the “Arapahoe-Village Center” station. Shea Properties, working closely with the village, has already built a 200,000 square foot office building next to the station on the west side of I-25, the first of three planned office buildings. A big tenant is Regis University, whose web page boasts of the location’s easy access to light-rail.
The village made a number of direct investments in infrastructure here and facilitated a number of others, including a creative solution to the need for the Colorado Department of Highways for a nearby service facility and the Village’s desire for a structured, multilevel parking garage: The two are combined, therefore saving adjacent land for private development, which not only will create activity but potential new tax revenues.
The kinds of zoning changes and infrastructure investments necessary to create true TOD opportunities are often expensive and not always obvious: parking garages, converting lanes of traffic into angled car parking, expanded sidewalks and bike lanes. Of all the investments made by Greenwood Village to support its Village Center, the most important, and perhaps least obvious, may well be the 6.6 acre retention pond area created on the east side of I-25, which is scaled to serve all adjacent Village Center real estate development.
The key to creating TOD that generates the symbiosis between real estate and transit ridership is the kind of density normally seen in central cities, along with pedestrian-friendly access for transit riders who are getting on and off trains. This means elements such as structured parking instead of big open parking lots; apartment and condo buildings taller than three stories; and ground floor, neighborhood-oriented retail.
Denver-based Koebel and Company, long-time developers of residential and commercial real estate in the region, have totally embraced TOD opportunities along the Southeast light-rail line. They developed the Apartments at Yale Station, a senior apartment project next to their own new headquarters building, and are working on TOD plans for adjacent real estate and for a site near the University of Denver station.
Buz Koebel, president, was a co-chair of the campaign for the T-Rex project in the late 1990s, and he believes that “Rapid transit is exactly the kind of infrastructure investment the public sector should be making to help improve the region’s economic growth and quality of life.” Their most ambitious efforts are at the Arapahoe-Village Center station where they own a significant land holding on the east side of I-25 within easy walking distance of the station’s pedestrian bridge over the highway. The plans they are working on with Greenwood Village “embrace the kinds of urban mixed uses and higher densities commensurate with TOD,” says Carl Koebel, the company’s acquisition and development specialist.
One stop further south on the Southeast line, at the Dry Creek station, the reality of TOD is already taking shape at Vallagio, a mixed use development by Metropolitan Homes, which though located in the suburbs, has a decidedly “urbanist” feel. Also on the east side of I-25 and at the base of an existing pedestrian bridge, this development opens up to people exiting from the bridge with an inviting, curving entrance street divided by a heavily landscaped median, flanked by townhomes and lofts with ground-floor retail consisting of restaurants and neighborhood-type shops.
Peter Kudlo, president of Metropolitan Homes, is emphatic that Vallagio’s design and mix of buildings was “heavily driven” by the proximity to a light-rail station. He firmly believes that TOD is the “development concept wave of the future” in the Denver region.
As Phil Washington, RTD’s general manager, is quick to point out, “RTD has an obvious stake in the success of TOD. RTD is more than the T (transit) in TOD.” They have their own TOD planning staff and have identified four pilot TOD projects—station locations where they can leverage existing activity and help facilitate land assemblages to create a greater likelihood of success: • The Alameda Station served by the existing Southwest and Southeast light-rail lines and adjacent to the Denver Design Center. • The Federal Center Station near 6th Avenue Highway and Union/Simms, to be served by the new West light-rail line scheduled to be opened in May 2013. • The Olde Town Arvada Station to be served by the Gold Line, under construction. • Welton Street stations north of downtown Denver served by the original core light-rail line developed in the 1990s.
Development activity at these locations should start to become apparent as the economy improves and the rapid transit system matures.
Economic Development and Quality of Life
Obviously, the recent recession and subsequent slow economy has adversely affected investments in real estate development generally and TOD efforts specifically: Private developers don’t have demand for new buildings (though demand for apartments has increased recently), and local governments are constrained by lower tax revenues. Nonetheless, RTD publishes an annual report on TOD, and the 2011 report documents the following development activity since 1996 within one-half mile of station locations: • 20,000 apartment units • 5.6 million square feet of office space • 5.2 million square feet of retail space
Economic development officials are buoyed by Denver’s increased image as a progressive region and credit to a great degree the investment in rapid transit. Paul Washington, Denver’s executive director for Economic Development, points to a recent Brookings Institute report documenting that from 2008-2010 the Denver region was the number-one metro area for in-migration of 25-34 years olds. What is the connection? A recent supplement to the magazine National Real Estate Investor makes clear that “Generation Y’s housing preferences are driving apartment firms toward urban, transit-oriented development.” This population cohort, as Washington points out, tend to be urban, eco-friendly and very mobile and thus are attracted to cities with rapid transit.
For both Paul Washington and Tom Clark of the EDC, the region’s progressive, forward-thinking investment in rapid transit is a key component of their economic development sales pitch. It has clearly resonated, a significant example being the success in landing the headquarters of DaVita, one of the leading dialysis provider in the country. These economic development officials note that not only was the region’s investment in rapid transit cited by DaVita as a factor in their relocation to our region, but it was critical in their selection of a site near Union Station for a new headquarters building.
Concern exists among advocates of TOD that planning officials may be overzealous in their requirements, and that developers, and especially their lenders, having been burned in the recent recession, will not embrace TOD and its new paradigms, such as lower parking ratios. Marilee Utter is quick to point out, however, that Union Station aside, TOD is a nascent concept both in the Denver region and across the country, and education with planners and developers as well as the public itself is critical.
Tina Griego, a columnist for The Denver Post, may have summed up the transformational potential of rapid transit and TOD best when recently writing about the light-rail station to be built in Denver’s Sun Valley neighborhood; “Everybody likes to dream … The light-rail station has opened a door to this neighborhood. Challenges loom. Opportunities await.”