Interactions Between Transportation Capacity, Economic Systems, and Land Use (2012)

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40 C h a p t e r 7 how project Details affect Outcomes The case study narratives and supporting documents provide a wealth of information that can be of direct use to transpor- tation planners and economic development policy planners. By giving both a project history and a project impact analysis, most of the 100 case studies offer insight into the roles of dif- ferent agencies, programs, and policies in either reinforcing or limiting the economic impacts observed to follow comple- tion of transportation projects. To address this subject, members of the project team reviewed all the case studies and identified seven common themes that affect the nature and magnitude of economic impacts. They are organized under two categories. • Land use policies and conditions 44 Consistency with land use policies; 44 Zoning and site preparation; and 44 Real estate market conditions. • Proactive government actions 44 Promotion of a shared vision among stakeholders; 44 Interagency coordination and consensus building; 44 Effective integration with larger public investment and development efforts; and 44 Complementary targeting of economic development efforts. Land Use policies and Conditions Connection Between Highways and Policies in Shaping Land Development Some types of projects, particularly beltways and bypasses, can have a profound impact on the spatial pattern of regional growth and development. Such projects can influence patterns of real estate demand and prices, affecting quality of life, availability of support services, and a community’s tax and employment bases. Land use impacts of major highway infra- structure need to be anticipated and planned for, particularly in growing areas. In the successful case studies described below, these impacts have largely been anticipated and planned. • A prime example is in the city of Verona, a suburb 10 miles southwest of Madison, Wisconsin. The Verona Bypass is a belt route constructed at a radius of 1.5 miles around the town center. The city reacted proactively by annexing the area served by the bypass, effectively doubling its residen- tial, tax, and employment base. Before the project, new commercial development had been sprawling in an east- west pattern along Highways 151 and 69, while growing northward toward the Madison city limits. After the bypass was built, development began to fill in more evenly in the area south of the city center. Improved access to new com- mercial and housing sites on the city’s south side spurred new development in this area. New investment, producing 4,000 jobs, was attracted by the bypass. By shifting the city’s boundaries south, the Main Street District became the core of the city, and its position as the major locus for local ser- vices has been strengthened. • Likewise, by constructing the Route 441 Bypass around the city center of Appleton, Wisconsin, planning agencies sought to balance the pattern of the city’s growth to the southeast and helped to fill in the pattern of sprawl that had developed along the city’s arterial roads. The new bypass has attracted 1,750 new jobs, including a regional headquarters of Time Warner. • Arizona Route 101, a 62-mile beltway around Phoenix’s outer suburbs, was built to accommodate growth in the metro area. The beltway reduced commuting times between previously distant suburbs. In response to the traffic capac- ity enabled by Route 101, mixed-use, lifestyle-oriented “mega-developments” began to locate on sites near planned exits, transforming open space into high-density hubs of Lessons for Future Project Planning

41 mixed-use development. Route 101 fueled the growth of suburban satellite cities such as Glendale and Scottsdale that provided sites and infrastructure for future growth. There are now 100,000 jobs and 400,000 residents within the Route 101 corridor. • Arizona Route 202/Santan Freeway, a loop around the southeastern quadrant of outer Phoenix, has also shaped the growth of the region, directing it away from Southeast Phoenix’s Mountain Park region. The new freeway enabled the construction of 12 million square feet of commercial development and creation of 50,000 jobs along this high- density corridor, where the growth of major satellite cities such as Chandler and Gilbert has been fueled. • Whereas beltways have the effect of shaping growth, bypasses can have the effect of strengthening the central business dis- tricts that they skirt. The Route 26 Bypass in Fort Atkinson, Wisconsin, the Neuse River Bridge that bypassed downtown New Bern, North Carolina, and the Third Road Bridge in Augusta, Maine, removed long-haul traffic that was congest- ing historic city centers, leading to safety and environmental enhancements that created jobs in new tourist-serving and entertainment businesses. Impacts of Zoning and Site Preparation on Economic Development If a local area is to achieve maximum economic impacts from a new transportation project, one critical requirement is that the surrounding area must offer a good supply of sites avail- able for development (or redevelopment). Conversely, a com- munity desiring to prevent new development can act to block sites from being available. Either way, the effective way to control the development outcome is by (a) enabling zoning to define allowable forms of development and then (b) ensur- ing that infrastructure availability and site preparation will support the allowable uses. These basic statements apply for all forms of transportation projects, although they are most immediately applicable for projects that open up access to specific land sites. Such projects include town bypasses, access routes to economically depressed urban areas, highway inter- changes, and intermodal facilities. • The Bennington, Vermont Route 279 Bypass is an example of a bypass case in which planning authorities did not want to encourage growth along highways. Sites were zoned for agricultural use, which generally permits only very low- density housing. Water and sewer infrastructure is not extended to these sites. As a result of the restrictive zoning and lack of supporting infrastructure, essentially no devel- opment has occurred along the 43-mile bypass route. The bypass has had no impact on existing businesses in the city, in accordance with the goals of local planning authorities. • The main planning objective of the Fort Atkinson, Wiscon- sin Bypass, was to encourage investment in the city’s historic Main Street downtown district, which has proved to be a magnet for tourists. The bypass removed truck and other through traffic from Main Street, a narrow four-lane road with parking on both sides. This resulted in a significant improvement in the environment and in pedestrian safety. Assessed values in the downtown Tax Incremental Financing district have doubled since 2000 to $22.8 million (as of 2010). • Cattaraugus Access Road in Olean, New York, demon- strates what can happen when land sites near freeways are made more accessible for development. The project was a new two-lane, 2-mile arterial road built to connect an industrial site with I-86. Completion of the road, along with water and sewer infrastructure extensions to adjacent land, has led to the development of several industrial sites and a strip retail/commercial center. The $3 million project leveraged an additional $5 million in private investment that brought 100 new jobs paying $2.5 million in wages to this remote community of 14,000 in Cattaraugus County. • Phelan Boulevard in St. Paul, Minnesota, is a new 2.5-mile urban access road built along a blighted rail corridor. The road provided access to hundreds of acres of previously landlocked and contaminated industrial sites that could be redeveloped. Funding was assembled from federal, state, foundation, and private sources for the cleaning and redevelopment of sites along the attractive boulevard; the sites have attracted an estimated $500 million in private investment. The new boulevard has breathed new life into some of the city’s oldest neighborhoods and has brought an estimated 2,000 jobs within reach of some of the city’s poorest residents. • Emerson Park Metro Station in East St. Louis, Illinois, one of the country’s most economically depressed cities, is another example of success with site improvement. The project required land site assembly, development incen- tives and community activism, along with transportation investments, to turn around the area. The station became a cornerstone of revitalization, with an estimated $65 mil- lion invested in new housing development on blighted sites surrounding the station. • In contrast, the Appalachian Corridor D project in West Virginia has so far led to limited new economic develop- ment. The project led to a 170-mile section of US-50 con- necting I-77 in Parkersburg, West Virginia, with I-79 in Clarksburg. The limited impact on industrial attraction to the corridor has been attributed in part to a lack of public funds to extend water and sewer service to newly accessible sites. Instead, lack of restrictive zoning resulted in low- density residential development supported by wells and septic systems that began to draw population from the two

42 older cities anchoring the study corridor. From 1970 to 2001, the populations of the cities of Clarksburg and Parkersburg declined by 33% and 25%, respectively, as residents began to move to fringe locations brought within commuting range by the new highway. • Veteran’s Parkway in Savannah, Georgia, is a case in which benefits have occurred in transportation time savings for trips to Savannah’s southwestern periphery. However, the new, 6-mile parkway has not yet had a discernible impact on adjacent land use or economic development, largely because wetland conditions and noise from aviation flight paths hinder building on surrounding sites. Real Estate Markets Can Accelerate or Delay Development Impacts Some factors affecting project impacts are not fully within the control of public officials or private parties. Prominent among these factors is the local real estate market, which can be affected by national and global economic trends, as well as regional growth and competitiveness conditions. As a general rule, transportation access and travel time enhancements help attract large-scale commercial and industrial investments (and thus generate new jobs) most quickly in areas where there is a trained workforce, available sites for business loca- tion, and strong economic conditions that support expansion of demand for business products and services. In areas that are economically depressed or otherwise lacking in some of those factors, the economic impacts of transportation projects may unfold at a slower rate. • In the case of Arizona Route 101 in Phoenix, a 62-mile belt- way through semirural areas on the fringe of Phoenix, the more affluent communities on the west (e.g., Scottsdale, Tempe, Chandler, and Gilbert) attracted large-scale corpo- rate parks, entertainment complexes, shopping malls, and higher-density housing. The less affluent communities outside East Phoenix became bedroom communities for these cities, linked by Route 101. • The I-295 Bypass in Richmond, Virginia, passes through Henrico County, where the median income is 75% of the metropolitan average. This area attracted most of the new commercial development along the route because it had the strongest real estate market. The county also had the resources to attract large-scale development, including site assembly and provision of utilities to large sites at inter- change exits. • Interstate 394 in the affluent western suburbs of Minne- apolis spurred a significant amount of redevelopment in the established suburban enclave of St. Louis Park, as older, low-density residential and retail uses were cleared for new commercial buildings. Although the corridor lost more than 3,000 jobs in small retail establishments, it gained 12,500 positions in other service sectors for a net gain impact of more than 9,400 jobs—a 30% increase. Similarly, the new I-435 Interchange in the prime Kansas City suburb of Overland Park attracted major corporate, tourism, health care, and medical center development, with 17,500 jobs. • In contrast, only 75 new jobs were created by the $31.6 mil- lion I-35/US-290 Interchange in Austin, Texas. This project, built in a lower-middle income area of Austin, demon- strates that a major access improvement will not spark redevelopment in areas with property values that are too low to support higher prices and rents. • Likewise, the Big I Interchange in downtown Albuquerque has had virtually no impact on development in its vicinity because of the city’s lagging economy. This project demon- strates that congestion relief alone does not necessarily gen- erate new jobs and investment in the vicinity of the project. • Interstate 105 connecting Los Angeles International Air- port (LAX) with low-income communities in East Central Los Angeles has had relatively little impact on development of the surrounding area. No proactive planning measures were put in place to encourage site assembly and redevelop- ment of potential key sites. Again, this is attributable to the depressed investment climate in East Central Los Angeles, which was exacerbated by the 1992 riots that occurred shortly before the project was completed. proactive Government actions Promotion of a Shared Stakeholder Vision Local projects such as passenger intermodal (transit) stations, new urban bridges, and urban roadway interchanges can attract business investment to adjacent areas where the access enhancement is most pronounced. However, when that enables significant new building development, then it becomes impor- tant to ensure that there is a common vision for the area. Visioning can thus be considered a tool for gaining consensus on the future of an area in which a new transportation project is planned. This exercise allows all interested parties, including local planning authorities, regional and state funding authori- ties, developers, and other interested agencies, to develop and agree on a clear vision for the future of the site. The case studies provide examples of both success and failure in establishing development visions for the areas of local transportation ter- minals, and they show that greater development occurs when a development vision is in place. • The case of Tri-Rail Boca Raton Transit Center in Florida shows how failure to achieve an initial consensus of key stakeholders can delay development. The city, transit authorities, and private developers could not agree on a

43 vision of what was possible and appropriate for a 2.5-acre site next to the station that was slated for transit-oriented devel- opment. The city’s development plan for the site endorsed a mid-rise commercial development of 70,000 square feet, but Tri-Rail, the transit authority and the owner of the sta- tion site, favored a development proposal for a mixed-use development of more than 1 million square feet. After years of consideration, negotiation, and debate, Tri-Rail and the city failed to achieve consensus on the plan. The recession of 2007 onward began to soften the real estate market, resulting in the withdrawal of prior transit-oriented devel- opment plans for the site. • In the case of the LBJ-Skillman DART Station in Texas, there was an amply sized 50-acre adjacent development site. However, the site is poorly connected for both pedestrians and vehicles, and there has never been a clear concept for its development. In 2010, a planning process was initiated to develop a workable vision for the site and to provide it with needed pedestrian, transit, and road connections. • In contrast, the Neuse River Bridge in New Bern, North Carolina, had a clear vision of project goals and desired out- comes on the part of planning agencies and the community. The bridge was relocated from historic downtown New Bern, where it was choking the Victorian street pattern, to a site out of town, eliminating congestion, which visibly improved the city center, attracted more tourists, and cre- ated jobs. The project has won three national awards for excellence in highway design. • Another positive example is the Phelan Boulevard project in St. Paul, Minnesota. The project has won multiple awards for highway design. Its success is built on a process of effective community mobilization and consensus build- ing regarding the future of a blighted patch of East St. Paul. That effort brought together long-time residents, former residents, and new immigrant residents. The new vision for the area as a center for corporate and health care office park-type development has already yielded more than 2,000 well-paying jobs. Interagency Coordination Intermodal centers have particularly high needs for coordina- tion, which must take place at two levels. One level of coordi- nation is among stakeholders in transportation terminal operations and use, including those responsible for roads and parking and the applicable freight rail or rail transit operating organizations. The other level of coordination is among stake- holders in land and building development, including govern- ment agencies and private businesses. • The Emerson Park Metro Station offers an example of effective consensus building. The new light rail station has been the cornerstone of revitalization of the dynamic Emerson Park neighborhood in East St. Louis, Illinois, one of the poorest cities in the country. The Emerson Park Development Corporation (EPDC) fought to convince regional, state, and federal agencies to back their vision for the revitalization of their neighborhood. EPDC convinced agencies to move the station from a site where it would have performed as merely a park-and-ride facility to their neighborhood. The $3 million station opened in May 2001. In the past 6 years, ridership has more than doubled. An estimated $65 million has been invested in new housing development on sites surrounding the station. EPDC effec- tively harnessed federal and state grants and built relation- ships with private developers, who built new housing here for the first time in more than half a century. • When CSX announced plans for the new Fairburn Inter- modal Center in Atlanta’s far eastern suburbs, Fairburn residents were opposed to the facility due to the traffic con- gestion impacts that were anticipated. Realizing that the local citizenry had limited veto power over the new Inter- modal Center, residents led a campaign to work with, rather than against, CSX. They organized the South Fulton County Community Improvement District (CID) to iden- tify, prioritize, and provide funding for transportation improvements to accommodate the additional traffic and abate inconvenience for area residents. CID has under- taken a number of new road, overpass, and signaling proj- ects to improve the flow of road traffic and to alleviate delays at at-grade rail crossings. The intermodal center has attracted warehousing and logistics operations that have created 1,500 new jobs in Fairburn, adding millions to the state and local tax base. Integration with Larger Projects Transportation investments made as part of larger develop- ment projects can have more profound economic impacts than those investments undertaken as solo projects. • BNSF Railroad Logistics Park Chicago (LPC) in Elwood, Illinois, 40 miles southwest of Chicago, was built as part of the redevelopment program for Joliet Arsenal. A funding package of $80 million in local, state, and federal Economic Development Administration funding was assembled to build and expand the road network to support the $1 billion, 9-million-square-foot Logistics Park. LPC has produced 2,000 jobs, supporting a 40% growth in the population of the Village of Elwood. Since the park opened in 2002, $1 bil- lion has been invested by 10 firms that occupy 9 million square feet within the 770-acre park. Eventually, the park will be expanded to 6,000 acres with a Union Pacific Rail- road Intermodal Terminal with as many as 25,000 jobs.

44 • The Alliance Global Logistics Hub Park, which was focused around an intermodal terminal, was spearheaded by Perot Real Estate, who speculatively acquired 17,000 acres near the Fort Worth cargo airport and worked to bring a BNSF Railroad Intermodal Terminal on site. Perot Real Estate donated land and engineering studies for a new $6.8 mil- lion highway connecting the industrial park with the Intermodal Yard. Within 8 years of the development’s opening, private investors developed 8 million square feet of commercial space, bringing 8,500 new jobs to the area. The Logistics Hub has sparked the growth of a new sub- region of the northwest Dallas–Fort Worth Metroplex. • Boston’s Central Artery/Tunnel Project was initiated to replace a decaying I-93 elevated structure with a higher- capacity tunnel. However, it grew into a larger package of projects to enhance downtown accessibility, improve the urban environment, and support the city’s plan for rede- velopment of the seaport district. The package included a new rapid transit line (and stations), tunnel extension of I-90 with a new interchange in the seaport district, a tun- nel route for I-93 through downtown, a new Charles River suspension bridge, and the development of more than 200 acres of new park land. The project led to dra- matic expansion of residential and office construction in formerly isolated and cutoff areas of the downtown waterfront and seaport district, adding 29,000 jobs, which is projected to grow to 50,000 as planned projects are completed. Targeting of Projects to Specific Industries Some transportation projects are designed to meet the needs of specific industries that are already growing and have proved to be particularly important job generators. Such projects are most often successful because there are already business organizations ready to take advantage of access improvements. • For example, the I-435 Interchange in Overland Park, Kansas, was built as part of a package to retain Sprint in the Kansas City metro area, by accommodating the company’s expan- sion needs. The project also attracted other large develop- ment projects that altogether supported another 17,500 jobs. • Other transportation projects have been built to support tech industries, with notable results. The US-460 Bypass in Blacksburg, Virginia, provides a direct connection between I-81 and Virginia Tech University. The 10-mile bypass was completed in 2002 at a cost of $87 million. As a result, nearly 750 new jobs in technology spinoff firms and new startups have been produced in this corridor, including the new Falling Branch Corporate Center. • A number of successful projects were undertaken to sup- port tourism industries. The I-70 Glenwood Canyon, which double-decked I-70 through the Glenwood Canyon in Central Colorado, is one of the most spectacular stretches of interstate highway ever built. The project supported tourist industries, producing 2,400 jobs. • The Isle of Palms Connector, a new bridge to a resort island in the Charleston, South Carolina, metropolitan area, sup- ports 2,800 jobs in tourist-serving industries on the main- land side of the bridge, where sites are available. Lessons Learned The common lesson for future project planning is that contex- tual factors are key determinants of the timing, nature, and magnitude of economic impacts from transportation projects. Foremost among the context factors are elements that are (or can be) within the control of planners and governmental offi- cials. They include an effective planning process that builds on a shared vision for development and an ability to achieve con- sensus among local agencies and developers regarding eco- nomic development goals. These elements can include actions such as zoning policy, investment in complementary sewer/ water infrastructure, and project planning integrated with broader public investment and private development efforts.