Utilizing P3s for Transit Oriented Development

Traffic congestion, walkable communities and access to affordable housing are among the hottest issues people are paying attention to when deciding where to live and where not to live, and the way cities are tackling these issues are as varied as the government entities trying to deal with them. Oftentimes, these problems are dealt with piecemeal by their corresponding government agency. For example, a transit agency will deal will developing a metro station, while a housing authority will seperately work on building new housing. Some jurisdictions, however, have embraced an approach that attempts to tackle all three issues simultaneously by way of Transit-Oriented Development (“TOD”). As we have already mentioned in another blog post, “People are willing to pay a premium for the convenience of living near public transportation, and since the goal of mass transit is to efficiently move people from where they live to where they work and back, it makes sense to build both housing and office developments adjacent to stations.” There are a number of delivery methods within the universe of TOD’s but one that has stood out in the post-COVID era is the Public-Private-Partnership (“P3”) approach to TOD’s. Here we will examine changing trends that show how P3’s can be utilized to deliver much needed TOD’s across the country.

The main benefit P3’s have in regards to TOD projects is their flexibility. This flexibility allows for expansive creativity in problem solving. As explained by Jay Brown, a managing director with engineering advisory Hyatt Brown at a recent P3 conference in Alexandria, “You think about how you can create an economic opportunity to not only create equity for the community that's impacted, but there's equity in the actual transactions themselves. You can push the limits of how to address equity in really creative ways through this structure.” To this end, the Rhode Island Public Transit Authority recently approved a progressive P3 to deliver a TOD, which promises to construct and finance a new multi-model center. Morteza Farajian, executive director of USDOT’s Build America Bureau, has also voiced his support for applying the P3 model to TOD’s, stating:

“We do not take things the way that they have been for the last 50 years, 100 years, 200 years. We want to get outside that box. We just refuse to be inside the silo. We refuse to be inside a box. We want to innovate. We want to get things done in a more effective, more efficient manner. That's what P3 is about.”

P3’s can also help address the decrease in transit ridership post-COVID.  Liz Price, vice president of real estate and development with the Washington, DC, Metropolitan Area Transit Authority (WMATA) discussed how metro ridership has still only reached 60% of pre-COVID numbers, and what some potential solutions might be. One solution is to leverage government land around stations to build up TOD’s. This would then naturally drive up ridership in the region. As she says, “We own about a thousand acres of property in and around our stations. Joint development is how we unlock the development potential and the revenue potential of our land, both for ourselves and for the region.” 

Furthermore, an added benefit from these project is the increased tax base available to the applicable taxing authority that can then be re-invested in the community. That increase in tax base is not only available due to the increased residents, but also commercial and retail components that are often contemplated as part of these projects. Florida is at the forefront of these P3 TOD’s as well. For example, the Grove Central project in the bustling neighborhood of Coconut Grove in Miami brings over 170,000 sqft of retail space along with 402 multifamily apartments as well as incorporating transit elements. The Brightline Central Station, which serves as the anchor station for the groundbreaking Brightline rail system connecting Florida, contains retail space, dining options, and residential towers. This then allows tourist and commuter transit to easily enter and leave the region.