Search form

Alternative Transportation Spurs Development

June 10, 2015

Not long ago, Orlando was known as a sprawling southern city. For visitors, going from hotels to Disney World to downtown required long drives. There wasn’t much other way to get around besides cars. Bicycling Magazine ranked Orlando as the second worst city for bicycling in its 1990 annual ranking of major cities.

Now, said Brooke Bonnett, Orlando’s director of economic development, “we are looking at transit as an economic development tool.” And the city is touting its bike-friendly features. One reason for the changes: “Millennials are demanding it.”

Young people’s attitude toward cars is very different from their parents’. “Vehicular ownership is not as big a deal,” said Bonnett. “They want to have the ability to get where they want to be, but they’re much more open to other modes.” Orlando’s focus on multimodal transport has paid off in one way: Last year Forbes Magazine named it one of the best cities for millennials.

Nationwide, millennials are less likely to own a car than baby boomers were at that age. Many don’t even bother with a driver’s license. The rate of graduating high school seniors with a license dropped from 85 percent to 73 percent between 1996 and 2010, according to the AAA Foundation for Highway Safety. Many reasons have been cited for the diminished interest in car ownership: the high rate of unemployment for young people; the pressing burden of student loan debt; millennials’ preference for living in cities, where parking is often expensive and hard to find; and their delay in getting married and having kids. Auto writer Drew Winter called the situation “the auto industry’s existential threat.”

Cars aren’t likely to disappear anytime soon. But many cities that are eager to grow and to attract young talent are looking to diversify their transportation options. Recent surveys show that’s a smart strategy.

In a 2014 survey commissioned by Transportation for America and conducted by Global Strategy Group, more than 80 percent of millennials said it is important for their city to offer opportunities to live and work without relying on a car. More than half would consider moving to another city if it offered a wider, better range of transportation options. And two-thirds said access to good transportation is one of their top three criteria when choosing a place to live.

Orlando: Transit a cheaper way to grow

For Orlando, focusing on transit makes economic sense because the cost to expand roadways is so high. ”We can bring in bus rapid transit [BRT] or do a project like SunRail [the city’s commuter rail transit project] far cheaper than adding a highway,” said Bonnett. If the city wants to add capacity on its BRT lines, buses just have to run every 10 minutes instead of every 15, added the city’s deputy director of economic development F.J. Flynn. That’s much easier than trying to expand an intersection.

SunRail just opened a year ago and currently has 12 stations covering 31 miles. Two expansions are planned, one to the Tupperware headquarters outside the city and another to the airport. LYMMO, Orlando’s free downtown bus circulator, operates in dedicated lanes and carries more than a million passengers a year.

New residential and commercial projects have developed around transit stops, including some on land that had long sat vacant. A $54-million apartment complex, The Crescent, was built next to the main SunRail station, across from the courthouse.

“Multifamily developers are paying a premium to develop around transit stops,” Bonnett said. Multifamily housing is at 93 percent occupancy, and the city has not had to offer incentives. Overall, the city has seen more than $250 million in private capital investment in the past three years around SunRail stations and BRT stops. That includes multifamily housing, commercial development, hotels and offices.

Two major area employers, Florida Hospital and Orlando Health, are undergoing massive expansions. “I don’t believe those expansions would have been possible without the transit component,” said Bonnett. Both companies looked at various locations and chose Orlando in part because of its proximity to a robust transit network, Flynn added.

Red Lobster recently moved its headquarters from unincorporated Orange County to downtown Orlando. When a search team started looking a year ago at different locations in the metro area where the company could expand, they knew that a culinary development center — with a test kitchen and training center for managers — would be opening this summer.

“Access to highways and transportation was an important consideration for us,” said Horace Dawson, Red Lobster’s executive vice president of legal and external affairs. The new location offers access to the city’s free bus system and is across from a SunRail station.

“[Employees] are really excited about the location because it’s so centrally located, and because of the many great options for transportation,” Dawson said. The company has encouraged workers to use SunRail, inviting SunRail representatives to speak at company headquarters and hosting a SunRail raffle for employees.

Red Lobster is planning to hire an additional 50 to 70 new employees in the next few years, and Dawson thinks the location and accessibility to transit will help with recruitment — especially since many of the positions are in IT and are likely to be filled by millennials.

“They are interested in alternatives to driving and parking,” he said.

Twin Cities: Return on investment convinces private sector

When the Itasca Project, an economic development group in the Twin Cities, wanted to find out if transit investment paid off, the group did what made sense for the business leaders: It commissioned a report showing the projected return on investment. The Itasca Project also includes leaders from foundations and the public sector.

The numbers in the report were clear: A $4.4-billion investment in a regional transit system would yield $6.6 billion to $10.1 billion in total direct benefits from 2030 to 2045. If the investment was accelerated and $5.3 billion was invested by 2023, the return would be even greater — $10.8 billion to $16.5 billion.

The report looked at vehicle operating costs; travel times and reliability; shippers and logistics costs; emissions; safety costs; and road pavement conditions. Researchers also found that a regional transit system would enable local employers to access an additional 500,000 employees, an increase of up to 25 percent.

“It’s unusual to have the private sector talking about this,” said Julia Silvis, Itasca Project manager. “This is something that gets our members excited about the analysis because it’s so fact-based. It’s using a familiar method, ROI.”

The report removes the argument that transit is not worth the cost, Silvis said. The Itasca Project used the ROI information to push for more investment in transit as a way to grow the local economy.

Less than two years after the report was published, the Twin Cities opened a second light rail line — the Green Line, from Minneapolis to St. Paul — that has far exceeded ridership projections. Before it even opened a year ago, developers had spent $2.6 billion on construction along the 11-mile route.

Two more light rail lines are in the planning process. Another BRT line has opened, and two more may be added.

The Itasca Project is not solely focused on transportation. One of its goals is to attract more young people and new business. When researchers surveyed young professionals last year, they found that having more transportation options was a way to attract talent. Recruiters at the region’s largest employers — Target, United Health, 3M — said in focus groups that young workers are looking for a walkable urban environment where they don’t have to depend on a car, said Paula Dowell, lead author of the Twin Cities report and director of transportation economics at Cambridge Systematics Inc.

Normal, Ill.: Multimodal transit isn’t just for big cities

In 1999, the government leaders of Normal, Ill., were not happy with the way their Central Business District had declined. Some mainstay retailers had left, and the downtown had become filled with businesses catering to the students at Illinois State University.

“We used to joke that it was great if you wanted a tattoo or a slice of pizza, but there was no place to buy clothes or a nice meal,” said City Manager Mark Peterson. “We were one of those Midwestern communities that got very skillful at urban sprawl. We began to realize it was not a long-term strategy a successful community should follow.”

The economic mainstay of the city was the fast food franchises, big box retailers and car dealerships on the edge of town, reachable only by four-lane roadways. “We were reaping the tax benefits,” said Peterson, “but in the process, we had begun to let the core of our community decline.”

The city hired Doug Farr, an urban designer from Chicago. He engaged the community from the beginning, soliciting public comments. A major component of his plan was sustainability, “before anybody knew what that meant,” said Peterson.

A big part of the sustainability push was investing in different forms of transportation, with a $60-million Multimodal Transportation Center in the middle of the Central Business District. An Amtrak station was already there, and the revitalization plan called for both the local and regional bus hub to be located in the same spot. A high-speed rail line is being developed that will run between Chicago and St. Louis, with a stop in Normal. The city has also made the downtown (now called Uptown) more walkable and bicycle friendly. A 30-mile bicycle and pedestrian path runs through the center.

“We’ve made a business case for these things,” Peterson said. “The environmental thing is just a bonus. If the business case isn’t there, it’s going to be hard for the government to be the leader.”

Now, said Peterson, “Uptown is flourishing.” The city has invested $100 million in public money in the past 10 years — a substantial amount for a city of 54,000. Private companies have invested more than $200 million, and more is planned. There is a new Marriott; a Hyatt; a mixed-use building with retail on the first floor, university offices on the second floor and three floors of residential above; another mixed-use building; a five-story residential structure; and various smaller commercial buildings. Property values in the Uptown area have jumped by 25 to 50 percent.

The transportation center “has been a tremendous economic engine, not only for downtown but for the whole region,” said Peterson. “We attract passengers from a 60-mile radius.” Many conferences come to Normal — a full-service conference center has been built — because it’s reachable by train.

“We were a sleepy little campus town,” Peterson said. “Now we’ve got tall buildings, we’ve got a diverse group of shops and restaurants. We’ve changed dramatically in the last 15 years.” And a large part of that comes from the focus on alternative forms of transportation.

Joan Mooney is a freelance writer who has writ-ten extensively about transportation for Urban Land magazine and other publications. She also wrote the NAR’s water infrastructure toolkit.