Angie Schmitt
Streetsblog

How a Streetcar Spurs Development

In cities like Kansas City, Cincinnati and Tucson, the creation of an urban streetcar has triggered development.

By , Streetsblog - Nov 3rd, 2013 04:26 pm
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When selecting a parking lot along the Kansas City streetcar line as the site for a 50-unit, five-story apartment building, Boulder-based developer Linden Street Partners was clear: “The streetcar is the big thing that drew us, absolutely,” the company’s Scott Richardson told the Kansas City Star. “We like the demographics and the economic trends. I walked the area and liked the site.”

Kansas City hasn’t even begun construction yet on the 2-mile, $103 million streetcar project. But the project is already spurring the kind of development that promoters hoped for. In addition to the apartment complex, the streetcar line also attracted a new, 257-room hotel. In what locals tell us is a rarity for downtown projects, the hotel received no subsidies.

There are other projects coming online near the route that are less concretely attributable to the streetcar project: A 22-story office tower will be converted to market-rate and affordable housing, and a 10-story building will be renovated for luxury apartments.

Stewart Wangard told Daykin that “its location near a stop for Milwaukee’s proposed streetcar, and the continued growth of Northwestern Mutual Life Insurance Co., are among the factors that will help the development attract renters.”

Stewart Wangard speaking about the Avenir told Tom Daykin, of the Journal Sentinel, that “its location near a stop for Milwaukee’s proposed streetcar, and the continued growth of Northwestern Mutual Life Insurance Co., are among the factors that will help the development attract renters.”

“We’re going to see 100 million [dollars] teed up for next year, including a 139-room boutique hotel, and two multi-family apartment developments totaling 700 units,” he said.

Keith attributes a wave of other building projects and new businesses in the last few years to the impending arrival of the streetcar. Downtown advocates are particularly excited about a high-end housing project called One East Broadway, which will contain 24 units, two floors of office space and two floors of parking. The project was financed in part with new market tax credits, Keith said, but it sets an important precedent.

“This was the first successful high-end housing project to hit downtown in more than a decade,” he said. “It pretty much sets the table for a whole range of market-driven apartments to be built downtown. Other developers are going to be able to come in and get conventional financing for market-rate housing.”

A similar effect can be seen in Tucson, where the city’s under-construction streetcar will begin running next summer. Michael Keith, director of the Downtown Tucson Partnership, said $250 million in development has already been proposed along the four-mile route connecting the city’s downtown to the University of Arizona.

Tucson doesn’t have a strong commercial downtown, making these residential projects all the more critical to the city core. “We’re not Phoenix.” Keith said. “We’re looking at a live-work-play and increasingly residential-based downtown.”

In Milwaukee, Stewart Wangard told the Journal Sentinel that proximity to the streetcar line will help the now under construction Avenir, a $20.7 million mixed-use building which will include 104 apartments and 7,000 square-feet of first floor retail, to attract renters. As the streetcar project has faced setbacks due to multiple delays caused by the Public Service Commission and the passing of new legislation aimed at stopping the project, it hasn’t had much of a chance to spur development.  But it isn’t an accident that the letters of support for the streetcar include a who’s who of Milwaukee’s development community, notably  Zilber Ltd, Mandel Group, Inc., Barrett Visionary, General Capital Group, Compass Properties, Ogden, Fix Development LLC, Van Buren Management, Inc., Hennessy Group, Inc., New Land Enterprises and First Hospitality Group, Inc., the developer of the Hilton Garden Inn.

Cincinnati is another city that is installing its first modern streetcar, a $150 million project that was envisioned as a way to revitalize and connect core urban neighborhoods and downtown. In this case, again, planned development that was one of the project’s major objectives appears to be panning out. The city has barely begun laying tracks for its 3.6-mile starter loop, but developers are already lining up along the route.

The Elm Street Townhomes, still under renovation, are already sold out, according to the blog Cincy Whimsy. Elm Street Townhomes, LLC advertises its location along the under-construction streetcar line as part of the draw. Across the street, a senior living facility is being built.

Meanwhile, downtown, developers recently announced plans to convert a mostly vacant office building into 20 apartments.

Jim Moll of Coldwell Banker is the broker on the Elm Street project. He said the developers, two architects based in Seattle, purposely sought out vacant land by the streetcar route after voters approved a referendum on the project in 2008.

“Literally, the day after the ballot initiative passed I got calls from people about properties,” Moll said.

As transit expert Jarrett Walker has written, the benefits of streetcars compared to buses are not related to mobility. These projects don’t give transit dedicated lanes to bypass traffic congestion. While it’s certainly debatable whether streetcars were the optimal way to generate development with scarce transit dollars, it nevertheless seems clear that they are shaping these cities for the better, creating more walkable downtowns with a healthier mix of uses.

Moll said, in his opinion, a frequently running bus line wouldn’t have sparked the same kind of interest in Cincinnati. “Rail is not a temporary thing where a bus route is,” he said. “Those streetcars, they have to stay on the rail. That’s the defining point.”

This story originally ran on Streetsblog. Angie Schmitt is a newspaper reporter-turned planner/advocate who manages the Streetsblog Network from glamorous Cleveland, Ohio. She also writes about urban issues particular to the industrial Midwest at Rustwire.com.

13 thoughts on “Streetsblog: How a Streetcar Spurs Development”

  1. David Ciepluch says:

    Transportation nodes have always spurred on adjoining development of many types throughout history. Humans and their cities have evolved along the transportation routes of foot paths, stone paved, Viking Ships with exploration and raiding, Clipper Ships, canals, roads, rail-ways, air travel, freeways, trucking, Super Tankers, and all forms of people transportation. We have many willful brain-dead dim-witted people in this state, that lack creative thoughts on progress or a vision of what could be tried and true methods of transportation systems. The only solution they can come up with is their ignorant ridicule of thoughtful planning and implementation of the creative ideas of others.

    At one time in the 1800s, Milwaukee and Chicago were of equal size and stature on the Great Lakes. Both were dependent on good harbors and water transportation. The railroads evolved, and Chicago grew around this transportation system and never looked back. And we had the willfully ignorant hold us back again a few years ago in a once in a lifetime opportunity with expansion of a regional rail system that would connect on a national level in the future.

  2. Phil B. says:

    “reporter turned planner/advocate’? Where does the ostensible objectivity of the fourth estate end, and the advocacy begin?

    I have about a dozen responses to this nonsense. Let’s start by comparing the median monthly temperatures and annual snowfall of Milwaukee with the other three cities.

  3. Jeramey Jannene says:

    Phil,

    Toronto, Canada has an extensive streetcar network that operates year-round. Minneapolis has a quickly growing light rail system. Many peer cities (weather wise) in Europe have an extensive tram network. Weather isn’t a factor.

  4. Jerad says:

    Phil not sure how you think snow would affect the streetcar much period, if you’ve done your research.

    Not to mention that large snowfall probably adversly affects a bus system more than a streetcar system. What exactly are you advocating for?

  5. Phil B says:

    So, let’s: We should compare Milwaukee to Toronto because Toronto is 4 times larger, and consider an alpha city by the GAWC? We should ignore the reality of how more moderate temperatures effect ridership? Seriously? We should uncritically ignore the problems streetcars have in other cities mentioned?
    http://www.citybeat.com/cincinnati/article-27721-a_streetcar_named_a_failure.html

    What am I advocating for? Common sense. Build the street car, run the trolley, build more playhouses for steroid infected adolescents and ‘role models’ like Ryan Braun. But attach a penalty to these real estate developers and ‘visionaries’ for playing with tax payer $ when the projections don’t materialize.

  6. Tyrell Track Master says:

    Bloody politics of the good squad. I hate to get into it folks, but the reality is the Streetcar is badly, badly wounded. The lack of any expansion funds will make the fantasies of the goon squad come true. The fact is, unless this goes way beyond the initial starter line it’s not a viable streetcar.

    The funds should be diverted to KRM or a larger light rail system once the political climate gets its head out of its behind.

    Alas.

  7. Tom D says:

    Yes, Toronto is 4 times larger than Milwaukee, but nobody is suggesting that Milwaukee have a Toronto-scale rail system (247 streetcars, 708 subway cars, and 573 commuter rail cars). When the 2.1-mile streetcar opens, Milwaukee will have a grand total of 4 streetcars–nowhere near Toronto’s 1,500 passenger rail cars.

  8. dohnal(Wis. Conservtive Digest says:

    Sure, dream on. will suburbanites that have fled the city and it’s leftists tantrums come back to rid a streetcar in a circle. I have been all over Europe and east where there are these things and the big difference in the number of people per square mile, then it is used but in Wisconsin we do not have that and the reality is that people have fled Milwaukee due fo govt. corruption and bad schools. A few have come back but damn few. When the population is high enough tnen you might have some value, but still better off just to have buses do the same thing. If Milwaukee wants to waste it’s money on street cars, then be our guest but do not try to send us the bill. Better to clean up the diastrous govts that you have here that embarass us almost daily.

  9. Phil B says:

    o.k., I see. We only compare Milwaukee to Toronto in a manner that supports the article’s faulty thesis. Got it.

    So, it;s 2013 and we now know that ‘Street cars spur development’. So, this grand idea was there all along, but we just didn’t see it until Urban Milwaukee’s reporter-advocate pointed it out. Thank you.

    And no need to respond to my question about protecting the tax payers from foolishly optimistic projections because who can fault the logic of a reporter-advocate hybrid. Look how quickly the sales tax for Miller Park was…. oh oh. Well, at least I can count on Gary Grunau to divest himself of any self-interest….

  10. Tom D says:

    Phil B, the article’s premise is that “new, modern streetcars spur development”.

    The first US city with a modern (post-WW2, low-floor design) streetcar line was Portland, which opened a 2.3- or 2.4-mile route (only slightly longer than Milwaukee’s 2.1 miles) in 2001. Because nothing like it had ever been tried in the US, it was considered so outlandish that they couldn’t get federal funding, even with Bill Clinton in the White House.

    By 2005 or 2006, Portland reported that their $80 million streetcar investment brought a huge surge in real estate development worth $2.3 billion (7,200 new housing units and 3.5 million square feet of office/retail space) within 3 blocks of the tracks.

    http://www.youtube.com/watch?v=pKSt8NA1ees&p=9F48E8774E990519&playnext=1&index=40

    Detractors claimed the new development arose, not from the streetcar, but from financial and zoning incentives given to developers. But the developer incentives were spread across many blocks, but the new development is concentrated near the streetcar (largely ignoring blocks with the same incentives, but no nearby streetcar). Portland detailed this streetcar-centric development pattern in 2008 (by which time there was ANOTHER $1.2 billion in development along the streetcar).

    http://www.portlandstreetcar.org/pdf/development_200804_report.pdf
    I especially urge you to look at the graphs on the 3rd page of this document

    The next US city to build a modern streetcar was Seattle which also saw real estate and job growth along the tracks (including Amazon’s new world HQ).

    So far, Seattle and Portland are the only North American Cities with new, modern streetcar lines operating, but new next wave (Kansas City, Tucson, and–depending on today’s election results–Cincinnati) is actually building streetcar lines today. All are already reporting real estate development because of the streetcar (this story’s focus).

    Even in Milwaukee, whose project isn’t as far along as the others, one new $21 million project, Avenir, is going forward BECAUSE of the streetcar. If 9 other similar-size, privately owned projects come in because of the streetcar ($205 million in new development), their annual real estate taxes will exceed the city’s annual streetcar operating subsidy.

  11. Casey says:

    Isn’t Oklahoma City also going forward with their streetcar plans also?
    I find that project quite ironic because around here rail is over politicalized but OKC has one of the most conservative mayors in the nation, same population as Milwaukee but a fraction of its density and installing a line 5 to 6 miles long….when will the nuts jobs here see the practicality? I used to consider myself a conservative until I realized we’re were anything but.

  12. Phil B. says:

    Tom, thank you for somewhat substantiating your perspective. At least more reporting than ‘advocacy. And since Milwaukee wants to compare itself to Cincy and the other cities, here’s a quiz: how many of them have a city residency requirement? Yes, I know the answer. So, regarding Bruce’s feverish “How to Crush Milwaukee’ manifesto back in February, Milwaukee should or should not have residency. Just like, or not, like other cities? “Come back City Employees… we have a trolleeeeeee…. we have development in a very specific area that benefits a very few select people…..come back…”

  13. Dudemeister says:

    So far, it looks like Phil B. has posted a link to one outside source, which is an opinion piece. He and dohnal – the two counterpoint advocates – have listed no actual statistics to support their argument (vague generalizations do not count as statistics). Tom D alone has posted two outside links and cited the statstics reported in this article, in addition to providing more of his own.

    Also of note is the fact that Phil B. constantly changes the subject in his responses. He has yet to seriously rebut any of Tom D’s points.

    I am neutral regarding the streetcar. Based on this discussion alone, far more evidence (and correct grammar) has been provided by the pro side.

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