The middle of a severe recession led by collapsing real estate values may not seem like the best time to start talking about developing property around planned HSR stations. But the economy will eventually recover (even on the slow timescale forecast by many economists there will probably be real recovery between now and 2018) and that in turn will mean developers will bring the capital and the will to use HSR stations as anchors of new projects.
The CHSRA has always emphasized their stations as bringers of urban density; you can see it in the NC3D animations produced last year for the Authority. Transit Oriented Development (TOD) is one of the strongest selling points for high speed rail, as it will help provide needed new housing in city centers, spur the development of other housing, commercial, and retail properties, and help act as magnets for bringing growth back into the cities and away from the exurban sprawl that characterized California's last period of economic growth (a sprawl which was directly responsible for the current economic collapse).
The question, as the San Diego Business Journal points out, is timing:
“I think not only is it something that is a good thing, it’s certainly going to be a phenomenal planning tool for the next generation of growth,” said Perry Dealy, president of Dealy Development. “The opportunity to take the high-speed stop hubs and convert them to maximize their mixed-use, high-density potential is great. You’d have what I’d call a TOD, transit-oriented design, starting with residential, work-live, retail, entertainment and other kinds of venues that are part of the mixed-use characteristics.”...
Dealy said that the type of project he has in mind would ultimately cost $1 billion to $2 billion. It would entail acquiring land to build on, adding or refurbishing infrastructure, and preparing a master plan.
“There is demand for the region to grow, we’re definitely going to add a million people, maybe not in 10, but in 12, 14 years it’s going to happen,” said Dealy. “Now’s the time to actually get these concepts defined.”
Of course, Dealy will have even more time than that to plan for San Diego, where revenue service may not begin until as late as 2030. But for some of the other stops, such as Anaheim, Fresno, Gilroy and San Jose, now may well be the right time to get TOD concepts under way, especially as cities start evaluating land use rules surrounding the proposed HSR stations.
Some developers aren't convinced there's any rush to get plans started:
Shawn Tobias, project manager at Houston-based Hines, a real estate firm and commercial developer, stated that he doesn’t see that much of a push from the development side to start planning for a project like this immediately.
“I think (development) firms in general right now tend to be shortsighted in terms of their business, just to make sure that they’re weathering the current conditions well enough, but planners are certainly into the future,” said Tobias. “Whether that becomes a reality is a different situation because the real challenge is integrating the plan within the existing municipalities, but it certainly is on Hines’ long-term radar.”
Tobias cited economic factors for the reasons that some developers have chosen to focus on more short-term projects.
“I don’t see a planning rush right now because most people are in survival modes,” Tobias said. “Once the economy starts to heat up and there’s more demand for development, I think you’ll see more firms clamoring for this.”
Of course, Hines isn't really saying anything that different from Dealy - both agree that HSR TOD will make a compelling financial opportunity for developers, investors, and buyers, but they aren't sure whether there is the resources out there right now to get this started given the economic climate.
As HSR TOD plans begin to take shape we'll start covering them in more detail here on the blog. One issue that the HSR stations raise related to development is whether there will be overnight and long-term parking allowed at these stations, a question Rafael brought up in the comments to yesterday's post. If such parking is allowed, Rafael rightly argues, it could mitigate against TOD, especially in lower density locations like the Central Valley.
Parking is a big issue when it comes to development in existing urban centers. TOD and density advocates have increasingly pushed to limit or eliminate city planning codes requiring new developments to provide a fixed number of parking spaces, and more attention is being drawn to the drawbacks of urban parking lots.
On the other hand, overnight and long-term parking would represent a potentially significant revenue stream for the CHSRA. There are many years of studies ahead that will examine this question, which will have an impact not only on how Californians interact with the HSR trains, but how the HSR system interacts with its surrounding urban environment.