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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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Suggested Citation:"V. CASE STUDIES." National Academies of Sciences, Engineering, and Medicine. 2011. Transit-Oriented and Joint Development: Case Studies and Legal Issues. Washington, DC: The National Academies Press. doi: 10.17226/14588.
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23 uses mentioned in the church’s TRO motion. In subse- quent proceedings on the church’s motion for a prelimi- nary injunction, the church argued—and the court agreed—that gymnasiums and day-care centers, which were still allowed in the amended B-2 zone, were com- parable to religious uses. Having found the basis for facial discrimination, the court needed to determine whether that was sufficient to demonstrate a violation of the RLUIPA equal-terms provision. To date, only two federal circuit courts of appeal have addressed the issue of what level of scrutiny is appropriate for alleged cases of unequal treatment un- der RLUIPA—and they have each developed different standards.253 In the Third Circuit, governments are strictly liable for equal-terms violations,254 while in the Eleventh Circuit, unequal treatment violates RLUIPA only when the government cannot show that the regula- tion is narrowly structured to achieve a compelling gov- ernmental interest.255 Electing to follow the Eleventh Circuit standard, the court in River of Life acknowl- edged the village’s argument that “the very purpose of the TIF will be thwarted by an exception to the Zoning Ordinance because the Church’s [no alcohol] protective zone will inhibit the development of the types of busi- nesses that the transit-oriented development plan was designed to encourage.” In balancing this along with the other factors necessary for issuing a preliminary injunc- tion, the court found that the church had not proven its burden and ruled in favor of the village.256 V. CASE STUDIES This section presents case studies of TOD and joint development in Portland, Oregon; Oakland, California; Chicago, Illinois; Plano, Texas; and Morristown, New Jersey. These case studies were chosen because they each represent similar but unique approaches to inte- grate real estate development with public transporta- tion. A common theme among all case studies is that suc- cess depends upon the coordination across public and private stakeholders with active leadership. In all cases, cooperation between multiple government agen- cies is vital, especially municipal government and tran- sit agencies. Portland demonstrates how a redevelop- ment authority, the Portland Development Commission, can be a successful implementation strategy for TODs by using a number of economic development tools to revitalize the Pearl district. Oakland and Chicago show the power of community-based nonprofits in building 253 Sarah K. Campbell, Note, Restoring RLUIPA’s Equal Terms Provision, 58 DUKE L.J. 1071, 1074 (2009). 254 See Lighthouse Institute for Evangelism v. Long Branch, 510 F.3d 253, 269 (3d Cir. 2007). 255 Midrash Sephardi v. City of Surfside, 366 F.3d 1214, 1235 (11th Cir. 2004); Primera Iglesia Bautista Hispana v. Broward County, 450 F.3d 1295, 1307–08 (11th Cir. 2006). 256 River of Life Kingdom Ministries, 2008 U.S. Dist. LEXIS 53491, at 45–46. TODs, the Unity Council, and Bethel New Life, respec- tively. Plano demonstrates a municipality-sponsored joint development, and Morristown illustrates a transit agency-led TOD. Data were gathered from January 2009 to May 2010 and based on Web sites, newspaper articles, reports, email correspondence, and telephone interviews. This exercise uncovered many interesting findings, and the more we investigated the more we found, yet for the purpose of this digest we have kept the summaries con- sistent, brief, and focused on legal issues. A. Portland’s Pearl District Pearl District Case Study Highlights • Type of TOD/TJD: $3.5 billion of private TOD de- velopment within two blocks of a streetcar line built since 2002. • Lead Agency: Portland Development Commission (PDC), which provides planning support, predevelop- ment assistance, property acquisition, and redevelop- ment and public infrastructure along with grants and loans to spur redevelopment. • Key Legal Issues: Zoning, public–private develop- ment agreements, property tax abatement. • Key Element: Development agreement provisions providing for minimum development densities and a $700,000 private-sector contribution to fund streetcar construction. The Pearl District is a neighborhood adjacent to downtown Portland that has undergone a laudatory transformation in integrating transit with urban revi- talization. This case study focuses the role of the PDC in using economic development tools to spur revitaliza- tion in a neighborhood served by the Nation’s first mod- ern streetcar line, as well as regional light rail and local buses. The Pearl District contains nearly 4,700 housing units, with 16 percent officially classified as affordable, though the PDC maintains that 25 percent of the units in the Pearl District are affordable to 60 percent of me- dian family income. The streetcar line opened in 2002. Since then, ridership has grown substantially, streetcar extensions have been constructed, and more than $3.5 billion dollars of development has sprung up within two blocks of the line. This growth has equated to signifi- cant tax gains for the City of Portland. In 2000, the to- tal property tax dollars collected for the River District, which includes the Pearl District, amounted to $623,000. By 2008–2009, the amount of taxes collected exploded to $23.5 million. The PDC has been the primary public agency re- sponsible for redevelopment in the Pearl District. The PDC’s budget is distributed among three primary de- partments: Development Assistance, Economic Devel- opment, and Housing. Though its budgets are approved

24 by the city council, no elected official is employed at the PDC, rendering it a quasi-independent agency. As an engine of investment, the PDC provides a multitude of services to homeowners, developers, and businesses, both inside the Pearl and across the city. PDC’s success in the Pearl District is the result of three fundamental factors: supportive zoning by the city, an aggressive PDC–private sector development agreement, and prop- erty tax abatement. 1. Zoning Most of the land use in the Pearl District is residen- tial or mixed-use. The city facilitates the mix of uses with zoning policy that reflects the Pearl’s development goals outlined in a number of plans that date back to 1972. One of the dominant land-use themes in the Pearl District is the CX (Central Commercial) Zone, which allows a broad range of uses. Zoning encourages devel- opment with intense building coverage and large and closely-placed buildings to create a pedestrian-oriented atmosphere of safe and attractive streets. Surrounding the Pearl’s light rail corridor are EX zoning classifications. The EX zone, or Central Em- ployment Zone, is intended to “allow industrial and commercial uses, which need a central location. Resi- dential uses are allowed but are not intended to pre- dominate or set development standards for other uses in the area.”257 Since the 1980s, Portland has been offering floor area ratio (FAR) bonuses to developers to encourage housing growth in certain target areas. Today, Portland encourages denser development by allowing developers to exceed existing FARs in exchange for specific types of development.258 In addition, developers can earn bonus FAR through the inclusion of public use facilities: “In the North Pearl area, floor area used for specified neighborhood facilities is not counted towards maxi- mum FAR for the site. The specified neighborhood fa- cilities are public schools, public community centers, daycare facilities for children, and public libraries.”259 2. Development Agreement In addition to transit-supportive zoning, another key element to the success of the Pearl District redevelop- ment process was the execution of a master develop- ment agreement between PDC and Hoyt Street Proper- ties, one of the key landowners in the district.260 The goals of the agreement were to increase the overall den- sity of eventual development, increase the availability 257 Portland Planning Online, Employment and Industrial Zones, http://www.portlandonline.com/bps/index.cfm?=34560 &a=53298 and http://www.portlandonline.com/planning/ index.cfm?&a=64465&c=36238%23d (last visited Sept. 23, 2010). 258 Portland Planning Online, Central City Plan District, http://www.portlandonline.com/planning/index.cfm?&a=64465 &c=36238#d (last visited Jan. 19, 2009). 259 Id. 260 See App. D for the agreement. of affordable housing, obtain rights-of-way for a fine grid of public streets through the district, obtain pri- vate-sector contributions to help fund public improve- ments in the district, obtain land for the creation of two plazas in the center of the district, and obtain a no-cost option to purchase additional land for the creation of a neighborhood park. These objectives were tied to a se- ries of public facility improvements promised by the city. The agreement used a set of contingent obligations to tie Hoyt’s and the city’s responsibilities together: • Lovejoy Ramp Project: In exchange for the city’s obligation to replace two obsolete viaducts with new surface streets, Hoyt promised to provide the rights-of- way for the new streets plus a $121,000 contribution to the project. • Streetcar Project: In exchange for the construction of the streetcar project through the District, Hoyt agreed to an increase of approximately 22 units per acre in the minimum density standards already imposed on Hoyt’s properties by the city zoning ordinance. Hoyt also agreed to a contribution of up to $700,000 to the local improvement district established to help fund streetcar construction. • Park Squares Project: Hoyt agreed to convey to the city two parcels of land in exchange for the city’s prom- ise to construct parks/plazas on those parcels. Hoyt ad- ditionally agreed to another increase in the minimum density standards for the properties surrounding the plazas. • Neighborhood Park Project: In exchange for Hoyt’s grant of a 6-year no-cost option to purchase land for a neighborhood park, the city agreed to resell the land back to Hoyt if the city did not complete park construc- tion within 3 years and to give Hoyt the first right to negotiate with the city for the sale of unused city-owned property in the District. The central importance of the City/Hoyt agreement to the Pearl District’s success is summarized by the city this way: The Agreement tied development densities to public im- provements with the minimum required housing density increased incrementally from 15 to 87 units per acre when the Lovejoy Viaduct was deconstructed, to 109 units/acre when the streetcar construction commenced and 131 units/acre when the first neighborhood park was built. The developer has stated that without the Streetcar and the accessibility it provides, these densities would not have been possible. The agreement was a unique and es- sential piece of the public/private partnership that cata- lyzed development of the [Pearl] District and serves as a model for the agreement established for in South Water- front [another streetcar-served TOD].261 261 PORTLAND OFFICE OF TRANSPORTATION & PORTLAND STREETCAR, INC., PORTLAND STREETCAR DEVELOPMENT ORIENTED TRANSIT 5 (2008), http://www.portlandstreetcar.org/ pdf/development_200804_report.pdf.

25 3. Tax Abatement Redevelopment in the Pearl District is additionally supported by the city’s expansive tax abatement pro- gram, which covers much of the housing that has been constructed around the streetcar line. To qualify for the abatement, developers had to prove that the abatement was required for project feasibility. A large number of tax abatements were granted for projects along the streetcar corridor in the Pearl District. The tax abate- ment is significant: one condo owner in the Pearl Dis- trict reported that his annual property taxes were only $163 as opposed to $2,700, the normal annual property tax.262 Penthouse condos valued at $599,000 would enjoy a discount of almost $6,000 annually.263 B. Oakland’s Fruitvale Transit Village Fruitvale Case Study Highlights • Type of TOD/TJD: Nonprofit-initiated development around heavy rail station in a blighted inner-city. • Lead Agencies: Unity Council Community Devel- opment Corporation (CDC) in partnership with the Bay Area Rapid Transit District (BART) and the City of Oakland. • Key Legal Issues: Community–BART partnership to overcome local objections, creative financing, ground lease and land swap, and transit agency relaxation of commuter parking replacement standards. • Key Elements to Success: Community champion enabled CDC to partner with the transit agency to cre- ate a new vision for the station. In the early 1990s, BART developed a plan for the Fruitvale station to increase the amount of commuter parking by erecting a three-story parking structure. The plan did not sit well with the Fruitvale community. Unity Council, a local CDC, organized the community’s opposition to the project. An existing parking lot was already flanking the station; an additional parking structure would have further separated the community from transit access. The community also worried that the parking lot would create a number of negative ex- ternalities including crime, traffic, and pollution. To develop a more positive redevelopment scheme, the Unity Council sought out funding from the City of Oakland for a series of community workshops.264 The resulting plan included a 9-acre transit village on the site of BART’s existing surface parking lot. The plan included a public plaza, child care, senior housing, parking structures, medical and office use, and ground- 262 Kendra Hogue, Win/Win Real Estate, THE OREGONIAN, Jan. 4, 2004, at H1. Retrievable from LEXISNEXIS Academic. 263 Jan Behrs, Housing Havens: Property Tax Breaks Add Luster to Listings, THE OREGONIAN, Nov. 12, 2006, at H1. Retrievable from LEXISNEXIS Academic. 264 Manuela Silva, The Fruitvale Village, 1 ECONOMIC DEVELOPMENT JOURNAL 31 (2002). Retrievable from Academic Search Complete Online. floor retail. The plan also linked the BART station to a commercial corridor two blocks north of the station. 1. Creative Financing The plan’s limitations were exposed when a market analysis conducted in early 1995 concluded that the future of the village was not possible without substan- tial public subsidy.265 The Unity Council was disap- pointed when it received only $3.3 million in grants and $3.3 million in loans out of a $20-million Federal Em- powerment Zone grant it was hoping for. Unity Coun- cil’s future looked even bleaker when BART was unable to provide the $15 million it had committed to the pro- ject. The Unity Council began to overcome the funding gap by first helping BART secure a $7.6-million grant from the FTA to construct the transit parking struc- ture.266 It then financed a loan against the future in- come stream from parking fees at another parking structure to be built in a later phase of the project. Over the next couple of years, Unity Council would accrue more grants to fund the childcare center and the pedes- trian plaza.267 The following table outlines both the source and the use of the funds for Phase I of the project. About 51 per- cent of funding for the project was debt, 71 percent of which was bonded by the City of Oakland, underwritten by a subsidiary of Citigroup.268 About 70 percent of the project’s costs were hard construction costs, with prede- velopment costs totaling $1 million, or about 2 percent of Phase I’s total costs. 265 Urban Land Institute Sacramento, San Francisco BART, http://www.ulisacramento.org/documents/tod/5.Project% 20Profiles/CaseStudies/SanFrancisco_BART.pdf (last visited May 8, 2009). 266 Unity Council, Fruitvale Village Project Overview, http://www.unitycouncil.org/download/fv_overview.doc (last visited Mar. 15, 2009). 267 Federal Highway Administration, Partnerships, Enhancements, and Public Involvement, http://www.fhwa.dot.gov/ environment/ejustice/case/case6.htm (last visited Apr. 19, 2009). 268 Housing Finance, Regional News: Feb. 2003, available at http://www.housingfinance.com/ahf/articles/2003/February/ Regional_News.html (last visited July 31, 2010).

26 Fruitvale Transit Village Sources and Uses of Funds, Phase I, 2004 Equity City of Oakland FEMA $1,045,304 City EDI $3,300,000 Ford Foundation $122,000 Economic Development Administration Grant $1,380,000 R&R Goldman Fund $300,000 Measure K Bonds (prepaid lease) $2,540,000 Levi-Strauss $226,881 City Library ($4.5-million prepaid lease) $4,900,000 E&W Haas Jr. Fund $400,000 Community Development Block Grant/Other $77,339 PG&E $50,000 EPA Grant $99,998 Neighborhood Reinvestment Corp. $100,000 City–BTA Bike Station $400,000 National Council of La Raza (NCLR) $25,000 Tax Increment Allocation (B) (LISC) $4,000,000 Land Proceeds $517,025 Total City of Oakland $16,697,337 Total Equity $2,786,210 DOT/BART Interest/Miscellaneous Metropolitan Transportation Commis- sion $47,121 Interest/Other $643,707 FTA Child Development Center $2,300,000 Additional Bond Funds Interest/Misc. $176,661 FTA Pedestrian Paseo $780,000 Total Interest/Miscellaneous $820,368 FTA–CMA Bike Facility $400,000 FTA–Pedestrian Plaza $2,228,534 Total DOT/BART $5,755,655 Debt TOTALS Unity Council FTV/Perm Loan $885,473 Equity $2,786,210 Unity Council Bridge Loan $911,830 City of Oakland $16,697,337 NCBDC $750,000 DOT/BART $5,755,655 City Section 108 $3,300,000 Interest/Misc. $820,368 Citibank Subordinate $1,400,000 Debt $27,797,303 City Housing Loan $750,000 501 (C)3 Bonds $19,800,000 Total Debt $27,797,303 TOTAL SOURCES OF FUNDS $53,856,873

27 Fruitvale Transit Village Total Uses of Funds, Phase I Predevelopment Hard Construction Cost Staff and Overhead $645,985 Off-Site $1,291,931 Contract Services $389,286 Building Structure $27,793,806 Total Predevelopment $1,035,271 General Contractor Fees $1,095,138 Construction Contingency $1,679,789 Soft Cost Bond Requirements $144,935 Acquisition Cost $1,764 Tenant Improvements $2,341,680 Architecture and Engineering $2,819,787 Plaza Improvements $1,800,000 Permits, Fees, and Taxes $773,218 Public Art $24,185 Development Staff/Operating $2,840,686 Total Hard Construction Costs $36,171,464 Utility Hookups $600,000 Environmental Remediation $188,680 Interest and Fees Legal, Insurance, and Other $744,031 Construction Interest $2,671,049 Contingency $630,144 City Section 108 $150,000 Bike Facility Soft Cost $262,968 NCBDC $76,285 Total Soft Costs $8,861,278 Unity Council $172,868 Bond Issuance Cost $790,490 Bridge Loans Reserves and Lease-up $323,600 Unity Council Bridge Loan $911,830 Total Interest and Fees $4,184,292 NCBDC $750,000 Total Bridge Loans $1,661,830 TOTALS Predevelopment $1,035,271 Hard Construction Cost $36,171,464 Soft Cost $8,861,278 Interest and Fees $4,184,292 Bridge Loans $1,661,830 TOTAL USES OF FUNDS $51,914,135 SURPLUS (DEFICIT) $1,942,738 Source: Unity Council—http://www.unitycouncil.org/download/fv_overview.doc

28 Construction on the project began in 1998 with a 67- unit senior housing building. Construction on the 300- space BART garage did not begin until 2002, 10 years after the original BART proposal. Phase I of the Fruit- vale Transit Village was completed in 2004. Phase II of the project, which includes redeveloping the large sur- face parking lots east to southeast of the Village, is ten- tatively scheduled for completion in 2012.269 2. Ground Lease and Land Swap Completing the agreement for the ground rights to the development site took the Fruitvale Development Corporation (FDC)—the project’s developer—and BART several years to finalize.270 Of the two parcels involved, BART granted FDC simple fee ownership of the parcel for the Unity Council Office, a Head Start facility, a clinic, and the central pedestrian plaza. The other par- cel, for which BART granted FDC a 95-year ground lease, contains the project’s senior center and library. In exchange for these parcels, BART received possession of a lot behind the station owned by the Unity Council, as well as other nearby parcels owned by the city of Oak- land, for construction of the BART parking garage. The primary advantage of the deal is that it “gave the FDC and the Unity Council proprietary rights to the entire development site without reducing the value of BART’s land assets near the transit station.”271 3. New BART TOD Policy Relaxes Commuter Parking Standards BART set a precedent in 2005 by adopting a TOD policy that seeks to encourage transit ridership by en- couraging TOD, fostering partnerships, promoting value capture, and shifting access to BART stations to non-automobile modes. Consistent with these objec- tives, the policy contemplates reducing vehicle parking at stations when justified by “the context of both devel- opment around transit and access strategies on a corri- dor or line segment.”272 The new policy reduced the amount of parking required to be constructed as part of Phase I of the Fruitvale project, thereby substantially reducing project costs. 4. Project Assessment Officials believe that the success of the Fruitvale project hinges on the completion of and demand for the condominiums and townhouses being built in Phase II. Currently, there are 47 residential units in the village, 269 City of Oakland, Fruitvale Transit Village Phase 2 Initial Study and Environmental Review Checklist, http://www.oaklandnet.com/government/ceda/revised/planningz oning/majorProjectsSection/Fruitvale%20Transit%20Village%2 0FINAL%2012-19-08.pdf (last visited Apr. 26, 2009). 270 See App. E for agreement. 271 Flaminio Squazzoni, Local Economic Development Initiatives from the Bottom-Up: The Role of Community Development Corporations, 4 COMMUNITY DEV. J. 44 (2009). 272 Bay Area Rapid Transit District, Transit Oriented Devel- opment Policy, adopted July 14, 2005. See App. F. 37 of them market rate and 10 affordable; these were rented with ease. This next phase of the project will add 275 multifamily housing units. Overall, critics have pointed to the financing scheme that was used in Phase I of Fruitvale as a poor model for other TODs. According to TCRP-102, “…it is unlikely that this would have occurred were it not for heavy subsidies, drawn from 20 [(30, actually)] separate funding sources.”273 This complexity of funding sources “would have prompted most private investors to shy away from the project.”274 After the completion of the project, the Ford Foundation, a key donor to the project, went even further, saying, “There is virtually total agreement…that Fruitvale Village cannot be a financ- ing model for other nonprofits.”275 C. Chicago’s Bethel New Life Development Bethel Case Study Highlights • Type of TOD/TJD: Nonprofit-initiated development around a heavy rail station in a blighted inner-city neighborhood. • Lead Agencies: Bethel New Life Community Devel- opment Corporation in partnership with the Chicago Transit Authority (CTA). • Key Legal Issues: Community partnership to over- come station closure and creative financing. • Key Elements to Success: Community champion enabled the CDC to partner with the transit agency to create a new vision for the station precinct and create a LEED Gold-rated project. West Garfield Park (WGP) is located 5 mi west of downtown Chicago. During the early 20th century, the area developed into a thriving commercial district, but the Depression of the 1930s tempered its rise. Though it showed promise after World War II, disinvestment in the late 1950s and 1960s destroyed the area. From 1970 to 2000, WGP’s population dropped by over 50 percent (from 48,464 to 23,019); poverty sub- stantially increased (from 25 percent to 35.9 percent, though down from 41 percent in 1990); housing units decreased (from 13,177 to 7,909); and vacancy increased (from 8 percent to 13 percent).276 273 TRANSIT-ORIENTED DEVELOPMENT IN THE UNITED STATES: EXPERIENCES, CHALLENGES, AND PROSPECTS 124 (Transportation Research Board, TCRP Report 102), http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_rpt_102.pdf. 274 L. Owen Kirkpatrick, The Two “Logics” of Community Development: Neighborhoods, Markets, and Community Development Corporations, 35.2 POLITICS AND SOCIETY 329–59 (2007). 275 Elizabeth B. Hughes, In Transit, in 35 FORD FOUNDATION REPORT 16 (2005), retrievable from Academic Search Complete. 276 Greater Chicago Housing and Community Development Web site, CCA: West Garfield Park, http://data.cmap.illinois.gov/ chicagoareahousing.org (last visited May 18, 2009).

29 Against this tide, the Bethel New Life Community Development Corporation has, over the past 25 years, helped to create more than $100 million dollars in di- rect community investment and more than 1,000 hous- ing units, and has placed over 5,000 people in jobs. In the past, Bethel’s focus had been concentrated on advocacy. This is evidenced in the organization’s par- ticipation in the Lake Street El Coalition, which suc- cessfully lobbied against CTA’s proposed closure of the Pulaski El station as part of its broader plan to elimi- nate the Lake Street line. After CTA’s decision to keep and rebuild the El line, Bethel led efforts to help rede- velop the area surrounding the Pulaski station. As part of that redevelopment, CTA provided more than $300 million to reconstruct the station and connect the sta- tion platform to a 23,000 sq ft, $5 million center that Bethel was building next to the station with funding from various local, state, and federal sources.277 Once a brownfield site, the two-story structure now houses six commercial retail shops, a Subway restaurant, a dry- cleaner, and a community bank on the ground floor, and Bethel’s Childcare Development Center, Employment Services Center, and a community computer lab on the second floor. The CTA part of the project was the skybridge con- nection between the Pulaski Station and the second floor of the Bethel building. Interestingly, CTA staff report that the agency required no contractual agree- ment with Bethel as a condition for the agency’s par- ticipation in the project: As far as anyone can remember, we did not have any for- mal agreement with Bethel New Life. It seems like, since we did our portion of the project after their building was completed, we weren't worried about putting our invest- ment into the bridge, but having the rest of the project fall through. Because we paid the design and construction costs ourselves, we weren't asking Bethel New Life or any developer to manage funds for us and didn't need any le- gal protections in that sense.278 CTA’s commitment to rebuild the Lake Street El line and the Pulaski Station apparently was sufficient to help Bethel obtain necessary funding for the building. Once that was completed and occupied, CTA perceived no legal exposure in extending the skybridge to the pro- ject. The chronology of events functionally eliminated the need for more formal legal structures. 277 Keith Schneider, Chicago Developer Capitalizes on Transit Access, N.Y. TIMES, Mar. 3, 2002, at 6, available at http://www.nytimes.com/2002/03/03/realestate/chicago- developer-capitalizes-on-transit-access.html. 278 Email to author from Stina Fish, Chicago Transit Au- thority, Jan. 12, 2010 (Available from author upon request). The Bethel building went on to achieve a LEED279 Gold rating. Its green amenities include photovoltaic panels on the roof and a photovoltaic cornice that will shade the façade to reduce cooling loads; a water-based heating system; and light shelves, sunlight shafts, and a daylight-responsive lighting system to reduce the building’s reliance on conventional electricity. The roof consists of a 9,000 sq ft vegetated roof to reduce heat gain and manage storm water run-off. Altogether, the building is expected to use 50 percent less energy than conventional construction.280 1. Creative Financing The TOD is also serving as a growth anchor in the area. The building is home to about 100 permanent new jobs.281 Financing for the project came from a variety of sources. Publicly funded grants totaled 59 percent, loans totaled 39 percent, and privately funded grants (i.e., the Local Initiatives Support Corporation (LISC) grant282) accounted for the balance. 279 LEED is a system of quantifying building sustainability. To obtain LEED certification, a development must meet a set of sustainable building criteria. Meeting the minimum set of criteria qualifies a structure as LEED Certified. The three additional levels, Silver, Gold, and Platinum, are more prestigious certification levels. For more information about LEED certification, see their Web site: http://www.usgbc.org/ leed/. 280 Diane W. Calmenson, Urbanist Cowboys, BUILDINGS (June 2004), http://www.buildings.com/Magazine/ArticleDetails/tabid/ 3413/ArticleID/3978/Default.aspx (last visited May 11, 2009). 281 CHICAGO METROPOLITAN AGENCY FOR PLANNING, URBAN DESIGN STRATEGY REPORT, http://www.cmap.illinois.gov/ uploadedFiles/RCP/Forum/UrbanDesignStrategyReport.pdf (last visited Apr. 4, 2009). 282 Local Initiatives Support Corporation (LISC) provided a startup grant that was funded by Bank One and State Farm. See the Bethel project’s profile from LISC at http://www.lisc- chicago.org/content/11/documents/project_profile_-_bethel.pdf.

30 Bethel Center Funding Funding Source Amount Notes LISC/Chicago $117,000 1 City of Chicago Empowerment Zone $1,680,000 4 Ill. Dept. Commerce Economic Opportunity (DCEO) $1,300,000 4 Chicago Dept. Environment $430,000 4 Commonwealth Edison and Ill. DCEO $400,000 2 U.S. Bank $1,000,000 3 U.S. Dept of Health and Human Services $100,000 4 Commmunity Development Financial Institutions Fund $1,600,000 5 TOTALS $6,627,000 PROJECT COSTS $4,500,000 SURPLUS (DEFICIT) $2,127,000 1. Start-up and operating grants for the Employment and Community Technology Center. 2. Grant for photovoltaic cells. 3. Construction loan. 4. Grants. 5. Take out financing. Source: www.community-wealth.org 2. Project Impacts WGP’s ascent has been slow. According to the Na- tional Association of Realtors (NAR), WGP has the low- est average home price in the area, at $112,000. The mortgage crisis also appears to have taken a heavy toll on the area. In 2006, WGP had the second highest amount of foreclosures per square mile and in 2007, the fourth highest. The study area’s homeownership rate in 1990 was about 25 percent and in 2000, 28 percent. NAR reports that the home ownership rate has climbed to 34 percent for the neighborhood.283 At the time this report was written, 191 houses were available for pur- chase in WGP; only 9 rental units were available, with an average rental cost of $1,200.284 Nevertheless, Bethel’s success, like many other TODs, is based on the efforts of director Mary Nelson and her ability to create alliances. Bethel not only pre- 283 Census data was compiled for the study area only, which makes up a sizeable proportion of WGP. Though data for the study area and data for WGP are not completely comeasurable, they are closely related. 284 National Association of Realtors, West Garfield Park Summary, http://neighborhoods.realtor.com/IL/Chicago/West- Garfield-Park/479104/Summary (last visited May 18, 2009). served the existing train station, but utilized a commu- nity campaign to create new employment in a mixed- use, LEED-Gold-rated building. D. Plano’s Downtown Revitalization Plano Case Study Highlights • Type of TOD/TJD: Municipal-led redevelopment of a suburban downtown. • Lead Agencies: City of Plano and Dallas Area Rapid Transit (DART). • Key Legal Issues: Creation of a New Urbanist–style zoning code, land assembly. • Key Elements to Success: Municipal leadership in planning, zoning, land assembly, and development marketing. Plano is characterized by a traditional town center. Like many town centers, Plano’s fell into a state of dis- repair as new, large-lot, single-family housing became available on the outskirts of the city. As Plano’s profile switched from farm town to suburb to boomburb, the economic profile of the town center shifted as well. Dur- ing the 1980s, the downtown tenant mix changed from

31 retail support (grocery, drug, and hardware) to spe- cialty shops. 1. Planning and Zoning In 1991, in the height of Plano’s suburban growth, Plano approved a new downtown redevelopment plan to address downtown’s relative blight. Its goals were to use New Urbanist concepts to develop the town center and expand downtown through infill development around historic commercial buildings. In 1993, the city implemented a special zoning dis- trict in the 80-acre downtown area that incorporated many of the TOD zoning issues outlined in TCRP LRD 12: it allowed mixed-use development, regulated surface parking, limited building heights to four stories, and required new buildings to be closer to the street. During this same time, DART was planning a new rail corridor with a terminal station in Plano. While initial plans were for minimal levels of service on the new line, DART responded to the city’s new downtown plan and zoning ordinance by deciding to provide regu- lar levels of service. This decision, in turn, reinvigo- rated the city’s commitment to downtown redevelop- ment and helped stimulate market attention in the area. 2. Land Acquisition and Assembly The most visible result of this new transit focus was the reprogramming of the land immediately east of the station, which had been slated for a park-and-ride lot. Instead, DART used eminent domain to acquire an ad- jacent parcel, further from the station platform, for its parking lot and, through a land swap deal not unlike the one at the Fruitvale BART station, turned the original parcel over to the city. After acquiring rights to the site, assembling other nearby properties, and reme- diating contaminated soils on the site, the city put out a request for proposal to develop its first TOD, Eastside Village I. The site of Eastside Village I was leased to the de- veloper for 70 years with three 10-year renewal options. Annual base rent was $0.60 per sq ft, which was dis- counted in the first and second year of the lease 25 per- cent and 50 percent. After the third year, the ground lease was adjusted based on the net operating income generated by the development. Eastside Village I was completed in 2002, almost a year before rail service. The second phase of the project, Eastside Village II, which was completed soon thereafter, resembled its predecessor in concept, size, and scale, and it was as- sembled from two parcels. The first parcel was a 1-acre site owned by the city, and the second parcel, about 2 acres, was owned by a utility company. After purchas- ing the utility parcel, the city deeded its share to the developer in exchange for 100 parking spots.

32 Plano Transit Village, Phases I and II Eastside Village I Eastside Village II Completed 2001 2002 Site Size 3.6 acres 3.1 acres Gross Building Area 245,000 ft2 245,000 ft2 Building Height 3 and 4 stories 3 and 4 stories Dwelling Units 33 efficiencies, 118 1-bedrooms, 83 2-bedrooms 38 efficiencies, 137 1-bedrooms, 54 2-bedrooms Nonresidential Space 15,000 ft2 (two restaurants, small offices, and a community room leased by the city) 25,000 ft2 (ground floor retail) Amenities Courtyard, pool, structured parking Parking 5-level interior parking garage with 351 spaces and 47 street surface spaces 419 garage spaces (100 owned by city), 33 surface spaces Developer Costs $15,720,000 total; $13,100,000 hard costs $17,830,000; $15,100,000 hard costs City of Plano Costs $2 million ($1,030,098 credited against land transferred by DART to Plano) $800,000 towards infrastructure Property Tax 1998 Valuation—$1,102,211; 2002 Valuation—18,029,765 1999 Valuation—$979,328; 2002 Valuation—$2,277,678 (partial value) Phase I opened about 1½ years ahead of DART’s light rail and leased quickly. After Phase II was complete, occupancy rates dropped from 98 percent to 89 percent but returned to 98 percent once DART began service. Altogether, there are about 500 housing units between the two properties. 3. Assessment One of the issues with the Plano TOD is that rider- ship figures for the Plano station have not met expecta- tions. Out of 24 nonterminal stations in the system, Plano’s ridership ranks third from the bottom. After DART’s announcement to provide Plano with regular service, Plano sacrificed its park-and-ride for the oppor- tunity to develop a Transit Village. From May 2003 to May 2006, ridership numbers for Plano grew, but per- haps DART and the city of Plano should have provided more commuter parking in Eastside Village. On the other hand, planners shifted commuter parking to nearby stations at Parker Road. A fair amount of park- ing also exists at the Bush Turnpike station. The table below shows trends in ridership in downtown Plano and nearby stations. Parking and transit ridership in TODs is a highly- debated topic, as illustrated in Plano. As noted earlier in the literature section and demonstrated in Plano, train stations can have a large impact on property value and land-use intensity in TODs. However, they often compete with room for commuter parking unless the government subsidizes structured parking garages. Moreover, even if 30–40 percent of the residents of Eastside Village commute on DART, the majority of the residents would not commute on transit. However, the ridership data collected by DART does not indicate how many people are using other modes such as walking and biking nor does it show the average household VMT in comparison to the average for the city. Recent na- tional studies indicate that projects such as Eastside Village produce significantly reduced VMTs. Over time, as downtown Plano intensifies, it will be important to monitor not only transit ridership but also the travel behaviors of residents, employees, and other users of downtown. Moreover, researchers need to examine the importance of the rail station in spurring the economic revitalization of the downtown as a whole.

33 Parking Spaces and Ridership for Downtown Plano and Adjacent Stations Average Weekday Boardings DART LRT Station Park-and- Ride Spaces May 2003 May 2004 May 2005 May 2006 3-Year Growth Parker Road 1,555 2,766 3,076 2,872 3,349 21.08% Downtown Plano 0 591 637 668 773 30.80% Bush Turnpike 778 778 846 997 1097 41.00% Source: Transit Cooperative Research Program (TCRP) RPT 95, Table 17-5 E. Morristown Transit Village, New Jersey Morristown Transit Village Case Study Highlights • Type of TOD/TJD: Transit agency-initiated joint development on the parking lot of a commuter rail sta- tion in suburban/historic township. • Lead Agencies: New Jersey Transit. • Key Legal Issues: Structuring a joint development and rezoning. • Key Elements to Success: New rail service and state assistance through the NJ Transit Village Initiative made Morristown a good case for NJ Transit’s first TJD. Located in Central New Jersey, Morristown is a small historic township with approximately 19,000 peo- ple nestled in densely populated Morris County, which has an estimated population of nearly 490,000 people. In 1996, NJ Transit began the Midtown Direct rail ser- vice, allowing a one-seat ride from Morristown to Penn Station in Manhattan. This had a large impact on tran- sit ridership, which grew along the corridor by 72 per- cent from 1997 to 2007. Seeking to further catalyze the success of the Morristown train station, in 1999 the town was selected by the state as one of the first com- munities to participate in New Jersey’s Transit Village Initiative, a program that seeks to revitalize train sta- tion precincts across the state by promoting TOD. NJ Transit then chose the commuter parking lot at the Morristown station as the site of its first TJD, known today as the Highlands at Morristown Station. This case study summarizes TOD and TJD in Morristown, which is an example for other historic cities and towns who wish to integrate transit and development. 1. Transit Village Designation The NJ Transit Village Initiative, which is described more fully in Section III.A.2, is a unique program that creates a partnership across various state agencies to work closely with municipalities to enable TOD. The New Jersey Department of Transportation staffs the program but works closely with NJ Transit and other agencies to provide technical assistance, expedited regulatory ap- provals, and grants to the Transit Villages. Private-sector investment in the Morristown Transit Village, between 1999 and 2003, included 87 new resi- dential units constructed within a .25 mi of the train station and another 149 units built between the .25-mi and .5-mi radius. This resulted in a total residential investment of nearly $11 million with an additional $16 million in nonresidential construction in the Tran- sit Village area.285 These figures do not include the TJD, otherwise known as the Highlands at Morristown Sta- tion, which did not break ground until 2008. 2. Transit Joint Development In the late 1990s, the commuter parking lot next to the Morristown train station was built to meet a park- ing shortage at the station. Immediately after the park- ing lot was paved, NJ Transit received significant inter- est from developers seeking to redevelop the area. NJ Transit was mutually interested in developing the site but had to retain the parking spaces at the station in any development proposal. To do this, NJ Transit col- laborated with Morristown to develop a special TOD zoning overlay, to facilitate denser, mixed-use develop- ment surrounding the station. The rezoning was also important to the state’s selection of Morristown as a Transit Village, which signified that the town was will- ing to grow in population and density. After the appropriate zoning enabled denser, mixed- use development, NJ Transit put out a request for pro- posal to develop the site. Morristown was the first joint development project for a TOD in the history of NJ Transit, so much of the process was a learning experi- ence for both the public and private sectors. Competi- 285 Jan Wells & John Renne, Alan M. Voorhees Transportation Center, Implementation of the Assessment Tool: Assessing the Impacts of the New Jersey Transit Village Initiative (2004) available at: http://policy.rutgers.edu/vtc/tod/ documents/NJ%20Transit%20Villages_economic%20activity. pdf.

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TRB’s Transit Cooperative Research Program (TCRP) Legal Research Digest 36: Transit-Oriented and Joint Development: Case Studies and Legal Issues examines a combination of large, medium, and small Transit-Oriented Development (TOD) and joint development projects since 1999 and provides comprehensive case studies, with an emphasis on what made the project succeed and how legal issues relate to TODs in general.

Sample documents are included with the print version of the publication in CD-ROM format. The CD-ROM is also available for download from TRB’s website as an ISO image. Links to the ISO image and instructions for burning a CD-ROM from an ISO image are provided below.

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