Transit development’s chicken-or-egg hitch

Transit systems, such as light rail, often attract new mixed-use developments and open up urban infill sites for revitalization, boosting local tax bases. However, many local officials struggle to balance the needs of transit and development simultaneously. If development justifies transit, and transit justifies development, how can both be initiated at the same time?

In December, Austin, Texas, officials formed a task force to plan the region’s emerging rail transit system and to develop partnerships and financing options to fund rail projects. The system would serve 711 acres of mixed-use infill redevelopment at the city’s former Mueller Airport, a project of Denver-based Catellus Development Group. The city’s master plan for the mixed-use development calls for nearly 5,000 single- and multi-family homes, several retail centers, a higher-density commercial district and 140 acres of open space.

Initially, the master plan included a light-rail corridor through the project. However, in 2000, Austin residents voted against funding the $1 billion system. Four years later, residents instead opted for a $120 million commuter rail “starter line” that runs on existing track near Mueller and will begin operating this year. Since the approval of commuter rail, transit advocates and the local transit authority, Capital Metro, have proposed a streetcar-based circulator system that would connect the development with downtown Austin.

Capital Metro, which is primarily funded by a 1-cent sales tax, warns that it is unlikely to have enough money to construct new rail, and price estimates for the circulator system range beyond $200 million. Discussions so far have focused on how the city, state and property owners at Mueller, such as the University of Texas, can contribute to the cost, either directly or through tax-increment financing. “We noticed that in most places, the transit authority doesn’t pay for the streetcar,” says Lucy Galbraith, transit-oriented development manager at Capital Metro. “It usually contributes, and it usually operates it, but it doesn’t usually pay for it because most of the benefits of the streetcar come in the form of increased property value.”

While Austin continues to work toward implementing transit and transit-oriented developments simultaneously, other communities put one before the other. Plano, Texas, built a transit-oriented development long before the city’s transit system was in place. But, Galbraith says, in that case, the city had a transit plan that defined where future rail lines and stations would be built.

Cities with established transit systems, such as San Francisco, still connect new transit-oriented development with new transit projects. “Developers are attracted here in part because of a transit system already in place to serve those who will live, work, and shop at their development,” says Nathaniel Ford, CEO of San Francisco’s transit agency.

In the 1980s, the city began planning transit improvements to coincide with transit-oriented developments, says Janis Yuen, spokesperson for the transit agency. The first project was Mission Bay, a mixed-use development, which was coordinated with plans for the city’s Third Street Light Rail (T-Third) project. “The development agreements with Mission Bay’s sponsors include [accommodations] for the T-Third line, as well as their provision of certain other transit improvements in lieu of public financing,” she says.

Mike Clark-Madison is an Austin, Texas-based writer.