Sustainability: Transit Oriented Development

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We’ll take a look at a new initiative to guide, and economically incentivize, future commercial and residential development around the Valley’s light rail system.

>>> Tonight "Horizon's" continuing coverage of sustainability issues focuses on transit oriented development. It's a priority for the nonprofit sustainable communities working group. Earlier today the public-private partnership launch add multimillion dollar fund to guide residential and commercial development along the valley's light rail line. More on that in a moment, but first, here's part after video presentation shown at today's launch.
Video: The only way you play any meaningful way in a society is if you have an automobile.
How do you create a sustainable community? A city that actually will be here in 150 years? There are limits. $5 a gallon gas certainly enforces this limit. We can't continue to do what we're doing. There's a whole team of people who would say people move to Arizona for a single-family home, and I would say that's all we've offered them. We want to be like any other neighborhood. We want the same amenities. We want recreation. Restaurants are closed, programs are cutbacks, arts are being affected, independent businesses have been struggling. There aren't the people down here to support these businesses. Once the nation's fastest growing urban area, the region's population growth has slumped to a stagnant 1%. Over 40,000 people have walk audit way from their homes and unemployment is the second worst in the nation. Trends are clearly changing. And local leadership is taking another look at assumptions made in past decades that currently define our quality of life today. To try to build farther and farther out in bigger and bigger cities has a huge cost to it. Fuel costs are now driving some people out of their homes. It's not that they can't afford their home payment, they can't afford their home payment, and the cost of the transportation it takes to get to their jobs. It's a huge cost to an individual, their lifestyle and their family. A major strategy on how to address these challenges involves utilizing the region's new light rail system along with TOD model, or transit oriented development. Which suggests that instead of building a city for automobiles, urban centers should be built on the human scale. What we have constructed initially are the opportunity for people to have a real urban experience. You could live in Mesa, take a class in downtown Tempe, and have dinner and go to a sporting event in downtown Phoenix and never get in a car. Light rail provides the opportunity now to make sure that not only does it supply transportation for wealthy people who happen to live in condos in a very urbanized variety, but it also gives us the opportunity to provide services to our community members who otherwise can't afford an automobile or transportation.

Ted Simons: Joining me to talk about transit oriented development is Mesa Mayor Scott Smith and Teresa Bryce, CEO of the Local Initiatives Support Corporation, a major contributor to the $20 million sustainable communities fund. Thank you for joining us. Mayor, we'll start with you. Transit oriented development. What are we talking about here?

Scott Smith: We're not talking about anything new. We've done development that surrounds transportation for a long time. There's a reason why when you look at our freeways you see commercial development, high density Development that's near freeway interchanges. What we're doing is something more focused on transit. Light rail. That development that is specifically geared toward what goes on around a light rail station.

Ted Simons: How does that development differ from general development? How does city planners look at this and say, it's a little different than what we usually do.

Teresa Brice: I think the most important thing is that it's not auto dependent. That's the whole point of transit oriented communities. The fact that you can live and work and get your kids to school and pick up the groceries without having to get in your car because all those service are five minutes from your home.

Ted Simons: Transit oriented development has been around a while. Are there aspects that are growing as we speak? Is TOD already an outdated term?

Teresa Brice: We like to talk about transit oriented communities. Because what we've learned, it's not a single project or a single development that actually creates the kind of sustainability that we're looking for and that we're looking to transit to reinforce.

Ted Simons: As far as this fund is concerned, how much money are we talking about? How much is needed, how many is procured?

Scott Smith: We need as much as we can get. We have $20 million that's been committed, that is sort of like seed money or priming the pump. Development along the light rail is a new concept for Phoenix. Because we only have a brand-new light rail. It's not new in other areas, but it's a new concept. We've got to find out exactly how best to do it here. So to have this seed money by two organizations that are widely recognized and that are renowned, hopefully will serve as somewhat of a call for others to take a look at this, become involved, bring your money to the table and we can create something pretty exciting.

Ted Simons: the seed money, your organization very much a part of this $20 million. I was heard it was described as a bridge loan. Is that accurate?

Teresa Brice: The funds that we've made available both through LISC and the Raza Development fund are flexible money, but it's not long-term permanent financing. That's where you may have heard the term bridge financing. But our funds can be used as acquisition funds, as short-term construction money, it can be used for predevelopment activities. The idea is that the funds are really in play for a short period of time, and intended to be taken out by permanent financing when the project is underway.

Ted Simons: Talk about your company and why this company decided to invest here now.

Teresa Brice Local Initiatives Support Corporation is a 30-year-old national nonprofit lending institution. And our goal is to revitalize communities. Now, that takes a very different form on the East Coast where LISC was started, but the Phoenix office that actually has been here for 20 years is really based in our marketplace. What we understand is that the housing crisis has hit our community very, very hard. That's not news. What LISC's approach is trying to build sustainable communities by knitting together housing and jobs, transportation, economic development, and taking a comprehensive revitalization approach to rebuilding neighborhoods.

Ted Simons: If that's the goal, and now the communities get the money, where does the money go? What do we see coming out of this right now, $20 million, which could be more?

Scott Smith: We're hoping that it goes to the kind of development that creates additional opportunities. The important thing about this transit oriented development, it's not a novelty. It not something that we do just because it feels good. This is real life, a real type of -- an additional option that we're providing to our citizens that comes when you have a mature multimodal transportation system. And what we're hoping with the seed money is that we create the communities that once again people of all demographics, income levels, can enjoy, create a true urban living opportunity that doesn't exist in Phoenix right now.

Ted Simons: Are we talking grocery stores, are we talking health care services? Apartment buildings?

Scott Smith: What does it take to create a community, a neighborhood? It's the same thing. It's just packaged differently. It's packaged to take advantage of what a light rail, what that type of transportation provides. That's why -- one of the differences between this and freeway building, where you draw lines and then you do development piecemeal and fill in the gaps. This will happen organically, like neighborhoods grow. You'll have mixed housing, housing requires services. Services will develop in that area and once again, since it is not auto centric, but it's about walking and using transit, those will develop within walking distance.

Ted Simons: I hear radar going up from some folks, when they hear creating communities, they think, mentioned organic, but some folks are saying, you know, is the need there? Is it going -- if it hasn't happened already, does that suggest maybe the need is not there?

Teresa Brice: Well, as mayor mentioned, our light rail line is brand-new. It is a public infrastructure investment that our entire region voted on when we passed proposition 400. And that new amenity has the opportunity to reshape how our valley grows. Our valley has been unbounded, and we've been able to spread out further and further and be the old adage about drive until you qualify hits home. But what we're seeing is, in addition to a change of demographics, high prices for gas. People need another option. And we are now able to offer that option because we're tying the development to transit.

Ted Simons: So again, the seed money goes to help a developer who wants to build a grocery store, to help a developer who wants to build maybe affordable housing, is that where the money goes?

Teresa Brice: Exactly. Let me give you an example. There's a project that was just approved for the low-income housing tax credit program. It's called Gracie's Village. It's in Tempe. It's actually turning an existing thrift store into a new development by transforming the existing building, it's going to have a new thrift store, 60 units of affordable housing, it's going to have before school and after school care, and it's going to have a medical center. So we're combining all of these into mixed income, mixed use development that can meet the needs of people by just walking out their door.

Ted Simons: That's happening in Tempe, I know a lot of folks who right light rail can see that stretch down Washington and think, something's got to happen here, because it's waiting for some kind of development. You're the mayor of Mesa. How does the mayor of Mesa, Phoenix, Tempe, how do you guys all get together and the planners get together and make sure that everyone gets along?

Scott Smith: Well, here's the important thing. A light rail is not a local system. It's a regional system. Any rail system is regional. And so we have to work together in order to maximize the opportunity. That's the important thing. We don't have to have this kind of development for our light rail to be successful. It's already proven that people will drive to the park and ride, they'll get on light rail, they'll use it. But we would be passing up an incredible opportunity to create this option to create this great investment if we didn't take advantage of the opportunities of transit oriented development in this region along all three cities provides. And we all have abundant opportunities to make for some great development along the light rail.

Ted Simons: Is that collaboration there? Are you seeing that with this particular project?

>> We're seeing that because we all have the same goal. We want to create a high quality, diverse lifestyle where people do have options. Not everyone likes urban living. Living along the light rail is not for everyone. People still will like the suburban or rural living. But there's a significant part of our community especially younger generation, that wants, seeks, needs this type of opportunity and it's a great public-private partnership. The public has made a huge investment in light rail. Hundreds of millions of dollars. There's ample opportunity for private investors to come in, develop the property along the light rail, take advantage of that public investment, and to create something great. It creates jobs, it is sustainable and it adds another dimension that defines a mature metropolis. There's not a mature metropolis in this entire world that does haven't a multimodal system of transportation, that does haven't a variety of opportunities. That's something that Phoenix as a young metropolitan area is going to grow into and this is a great opportunity.

Ted Simons: You both mentioned whether it's living far out and you can talk about gas prices, you can talk about the whole nine yards, and yet, there are folks who do like to live far out, and homes -- when the economy comes up again, we know home building will continue on some of the outskirts of town. Is this the kind of project that looks good now, but once the economy rebounds or gas prices fall, everyone is going to start running out to the exURBS again?

Teresa Brice: What we've seen across the country is the places that have held their values the most, are places that are adjacent to transit. When we begin to see the market rebound, we see those areas that are close to transit begin to rise significantly. That's why having this fund now is so important. Because we need to secure those properties, those lots. So that we can plan to have a variety of housing options available for all incomes.
Ted Simons: All right. Very good. Thank you both for joining us on "Horizon."

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