Transit-oriented development (TOD) is becoming increasingly popular in metropolitan areas like Seattle, Los Angeles and Portland, despite its increased investment costs and more complex planning. Studies show that the benefits, which include reduced congestion, less pollution and greater property values, make establishing TOD nodes a practical investment for stakeholders, the transit authority and commuters. Projects that are setting good examples for others include the Wilshire Vermont Station and University Gateway in Los Angeles, and the Del Mar Station in Pasadena. For more on this continue reading the following article from National Real Estate Investor.
When Urban Partners first engaged with the Metropolitan Transportation Authority of Los Angeles County, we climbed a steep learning curve towards understanding the special requirements of transit-oriented(TOD) projects. TOD planners and developers are responsible for creating solutions that will meet the needs of multiple stakeholders, including the urban transportation authority, the railway, its riders and commuters, local officials and the residents of neighborhoods grouped in proximity to train stations.
While we are witnessing tremendous growth in demand and need for housing near transit, TOD projects generally have higher development costs. For instance, location nodes command premium prices for land, thetechnology is more expensive, and TODs require longer timeframes for completion. These complex factors demand a high level of expertise on the part of the developer.
In the past two decades in Los Angeles and throughout Southern, where increasing, excessive automobile traffic has been a looming problem, urban planners have thought long and hard about the alternatives to driving, the optimal rail transit routes and nodes and other connecting, alternative modes of transportation, from bicycles to buses.
Today, with several completed TOD projects and additional projects in the pipeline, Urban Partners believes that transit-oriented developments are the future of urban development, everywhere. Like Los Angeles, metropolitan areas like Seattle and Portland, where Urban Partners is also active, are embracing TOD. These projects present a promising strategy for smart growth, urban revitalization and improved access and opportunity for low-income residents.
As cities venture increasingly into transit-oriented development, a forward-looking market is emerging for commercial real estate companies that wish to leave their mark on higher-quality urban environments. Studies indicate that TOD can reduce traffic congestion and air pollution by up to 25 to 50 percent compared to typical suburban development. While many investors believe that TOD involves higher risks and costs than other types of developments, TOD adds value to urban properties that can be appealing to entities that invest for the long term, including local governments. Downtowns and other select premium locations can ultimately generate higherreturns.
TODs share certain characteristics: They are mixed-use, pedestrian-oriented communities of compact density, located adjacent to or near new and existing public transit stations. They are diverse, located in several contexts.Urban Partners’ TOD projects encompass a diverse range of TOD solutions. For example:
Del Mar Station, Pasadena, California
At Del Mar Station, considered one of the most ambitious civic developments on the Southern California Metro rail system, Urban Partners developed a mixed-use property with the train tracks actually running directly through the project. The program for the 3.8-acre site on the Los Angeles to Pasadena light rail Gold Line included rehabilitation of the historic Santa Fe Depot and development of 347 apartment units, a 1,190-stall parking garage and retail shops. Working with architect Moule & Polyzoides, and in close cooperation with the City of Pasadena, Gold Line Construction Authority and METRO, Urban Partners created an innovative, mixed-use, courtyard-housing concept for the site.
Wilshire Vermont Station, Los Angeles, California
METRO selected Urban Partners to develop seven acres of land at the Red Line and Purple Line subway portal at the intersection of Wilshire Boulevard and Vermont Avenue. Wilshire Vermont is a true transit-oriented development, connecting the project with far-flung centers of downtown Los Angeles, Koreatown, Hollywood and North Hollywood, as well as a bus plaza to the east and major bus lines to the south and west of the project. Urban Partners created a complex mixed-income, multifamily rental apartment and retail program with subterranean parking, uniquely combined with a Los Angeles Unified School District middle school. Twenty percent of the housing units were designated as affordable housing. The project financing was arranged through MacFarlane Partners on behalf of CalPERS, Bank of America and a $135 million tax-exempt “low-floater” affordable housing bond issue, which, at the time, was the largest in California history.
University Gateway, Los Angeles, California
Urban Partners undertook the development of a premier student residence for the University of Southern California, adjacent to the almost completed Expo Line light rail station and ideally located to connect USC with downtown Los Angeles and points north and west, reducing the need for cars—students will soon be able to easily hop a train to the beach. The company formed a joint venture with Blackstone Real Estate Advisors to develop 421 rental units with up to 1,600 beds, a complete fitness center, luxurious student lounge with state-of-the-art audio/visual equipment, study rooms, rooftop lounges and concierge service. In addition, the project includes 83,000 sq. ft. of ground-floor retail, currently 100 percent leased, which includes several eating establishments.
Transit-oriented development helps achieve sustainability goals, reduces auto dependency and traffic congestion, and generates increased economic activity. With the right mix of residential and commercial development surrounding transit stations, TOD is a win-win for all concerned.
This article was republished with permission from National Real Estate Investor.