FEATURE ARTICLE, JULY 2005

TRANSIT-ORIENTED DEVELOPMENT REBUILDS DOWNTOWN
CENTERS: A DEVELOPER’S PERSPECTIVE

As commuting times have grown and gridlock has intensified, proximity to public transportation has become an important factor in site selection.

Transit-oriented development — or TOD — is a rapidly growing development strategy pertaining to construction of commercial and residential properties close to train and subway stations and airports.

Berwyn, Pa.-based LCOR, is a believer in TOD. The firm sees transportation-oriented development as a means of making significant and positive impacts on metropolitan area real estate.

Years ago, LCOR made a decision to focus on TOD. In turn, it developed an ability to integrate commercial users, public space and transportation access. With transit-oriented development as a central tenet of its business model, most major LCOR projects today are located near transportation hubs and are designed to encourage public transportation ridership.

Investors recognize that TOD adds value to a project's bottom line. Landlords collect higher rents because of the proximity to commuting. Plus, smart-growth planning frequently allows higher density. TOD also benefits the community at large in many ways.

A 2002 report by the California Department of Transportation listed numerous benefits of TOD, including reduced vehicle use, lowered air pollution and energy consumption, conservation of resource lands and open space, enhanced economic development, and lower infrastructure costs.

Gaslight Commons

In a 2004 analysis of American rail transit, the Victoria Transport Policy Institute concluded that transit-oriented development enhances "community livability," described as "the environmental and social quality of an area as perceived by residents, employees, customers and visitors."

The institute found that TOD improves community livability through "urban redevelopment, reduced vehicle traffic, reduced air and noise pollution, improved pedestrian facilities, and greater flexibility in parking requirements and street design." The strategy provides "direct benefits to residents, increases property values, and can increase retail and tourist activity in an area."

TOD also limits demand for new highway construction. For all these reasons, political and community leaders frequently incorporate TOD into their anti-sprawl strategies.

The New York office of LCOR has created TOD developments in White Plains, N.Y, and South Orange, N.J. The firm also developed the $1.4 billion Terminal 4 at JFK International Airport.

The success of Bank Street Commons in White Plains — located in New York's Westchester County — helped trigger the emergence of the city’s downtown as a first-class, live-and-work environment. For residents working in New York City, home is across the street from commuter service conveying them to Midtown Manhattan within 30 minutes.

Consisting of two high-rise residential towers and a common building, the $140 million Bank Street Commons sits adjacent to the Metro-North Station and is within walking distance of a growing number of outstanding shopping and entertainment venues. With White Plains newly heralded as a vibrant urban environment, Bank Street Commons has gained recognition as a catalyst and a centerpiece of the city's success.

LCOR’s success in White Plains was immediately preceded by its award-winning experience with the $34.5 million Gaslight Commons, a 200-unit, luxury residential complex in South Orange, N.J. Adjacent to the New Jersey Transit railroad station, residents have a half-hour commute to Midtown Manhattan.

Luxury apartment seekers quickly filled the property. Leasing outpaced expectations, demonstrating the appeal of residential development with smart growth sensibilities.

Three years ago, the complex won the "Smart Growth Award" from New Jersey Future, the state’s leading advocacy organization promoting responsible growth and development. 

LCOR’s experience in South Orange underscores the value of working in cooperation with the public sector. The company had forged a partnership with the village of South Orange to expedite development and to promote downtown redevelopment.

International Arrivals Terminal at JFK Airport

The $625 million White Flint Metrorail station, a mixed-use development in North Bethesda, Md., is also part of LCOR's TOD portfolio.

 While TOD has benefited LCOR, the strategy has clearly also benefited the projects' home communities. It makes sense for both real estate developers and urban planners to discern and pursue transit-oriented development opportunities. These worthwhile enterprises can serve as the keys to urban revitalization. 

— David Sigman is a senior vice president in the New York City office of LCOR, a national developer.

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