Officials want economic development to be part of light rail

Urban planners and promoters of light rail often cite the 52-mile MAX light-rail system in Portland, Ore., for generating several billion dollars of real estate development around its stations since it began operating in 1986.

In Charlotte, N.C., where the 9.6-mile Lynx light-rail system opened in 2007, development has been more restrained, though that may be a reflection of the economy.

Developers aren’t clamoring to propose new projects, given the abundance of homes, condominiums and apartments on the market; low demand for any commercial space; and difficulty in obtaining financing.

Still, the economy hasn’t stopped local politicians, planners and economic development officials from pinning hopes for new development and economic renewal on Hampton Roads Transit’s 7.4-mile Tide “starter” light-rail line in Norfolk, scheduled to open in the spring.

“During this lull in the economy, it’s now probably the best time to put in the infrastructure for the type of development we’d like to see in the future,” said Warren Harris, Virginia Beach’s economic development director.

About 100 government officials and business people gathered in Norfolk recently for a forum hosted by the local chapter of the Urban Land Institute to discuss strategies for promoting development projects that maximize use of the nascent light-rail system.

Norfolk officials long have touted the benefits of “transit-oriented” developments. They cite recent projects such as the Wells Fargo Center office building in downtown Norfolk, the nearby Belmont at Freemason apartment building and other projects as examples of how developers can take advantage of the city’s 11 light-rail stations.

Recently, Virginia Beach officials have jumped on board, identifying eight sections of the city to be redeveloped with an emphasis on high-density, compact structures. Six of its “strategic growth areas” are along the old freight rail line that some city officials are pushing to use to extend the Tide light-rail system to near the Oceanfront.

The Tide initially will run from the regional medical center at Colley and Brambleton avenues in Norfolk, through downtown, past Harbor Park and parallel to Interstate 264 out to Newtown Road. An extension into Virginia Beach would be a straight shot from there along the same right of way.

Beach economic development officials hope the identified areas will give them a jump-start on pushing developers toward high-density projects that take advantage of light rail in the event it’s extended to the city.

“The decision has been for our future development to cluster in these strategic growth areas,” Harris said. “For us it means moving into an urban development pattern, where we’ll see more vertical development, more structured parking.”

Planning officials already have created master plans for areas at current light-rail stops, such as the transportation hub planned for the area around Harbor Park. Those master plans, the officials say, will provide a road map to allow them to maximize the integration of commercial and residential buildings with light-rail stations.

The Newtown Road area of Virginia Beach is poised to take advantage of light-rail development, even if an extension into the city is years away, Harris said.

The Tide’s eastern terminus is at the border of the two cities.

“Everyone agrees that it is still today probably the best location in all of Hampton Roads for development,” Harris said. “It’s close to Virginia Beach, close to Norfolk, close to interstates.”

For some developers, light rail itself can be a lure, said Chuck Rigney, an assistant director in Norfolk’s development department.

“Regions with light-rail systems are much more likely to attract the company-headquarters-type opportunities like what we’re trying to attract in Hampton Roads,” he said.

Plans for a light-rail station near York Street in Norfolk were key to Kotarides Developers’ decision to build the Belmont at Freemason apartment complex at the corner of York and Duke streets, said Pete A. Kotarides, a partner in the Virginia Beach-based firm.

“The parcel was really narrow. It wasn’t an easy site to work with,” Kotarides said. “Because light rail was there, it was worth the effort. If it was just some random site, we probably would have been a lot less interested. Having light rail there moved that location to the top of the list.”

For other developers, however, it might take a little convincing to build on tighter parcels and in denser buildings, said Debra Campbell, the planning director for Charlotte.

“I don’t want to say, 'Build it and they will come,’ ” said Campbell, speaking at the Urban Land Institute forum two weeks ago. “I will say, ' Build it, court, and if your courtship is good, they will come.’ ”

Charlotte has had success, Campbell said, in attracting several residential developments near light-rail stations. However, the city has had a tougher time luring office projects to those areas, she said.

The question of whether to build near light rail hinges on more than the line itself, said Michael Barrett, CEO of Virginia Beach-based developer Runnymede Corp.

“Just because you have a light-rail line coming within a half-mile of your property doesn’t mean you can throw up any multi-use building and it’ll be a success,” Barrett said. “No one factor ever determines whether a real estate project will be a success, but having access to light rail and roads increases the chances of success.”

Economic development officials have other arguments for trying to lure transit-oriented developments, he suggested.

“There is a good reason that the old suburban model doesn’t work,” Barrett said. “On one hand, we’ve seen the suburban 'McMansions’ fall in popularity. The market for those has fallen apart. The second issue is that younger people increasingly seem to prefer closer urban neighborhoods.”

Harris, Virginia Beach’s development director, doesn’t expect all developers in Hampton Roads to catch on right away.

“I think it’s been more of an education process to bring about a shift in a developer mindset,” he said. “There’s still a mentality around for more of a suburban development scheme rather than an urban scheme.”

Harris said successful high-density developments like Town Center in Virginia Beach help economic officials make the argument to developers.

“We can point to that as such a positive thing for those involved,” he said. “Although it may cost more, it’s greater density. So you’re going to get more product on the same piece of property.”

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com