Presentation on theme: "1 Greater Cleveland Regional Transit Authority Real Estate and Economic Development James DeRosa TRB BRT Workshop “An Introduction to Euclid Corridor BRT”"— Presentation transcript:
1 Greater Cleveland Regional Transit Authority Real Estate and Economic Development James DeRosa TRB BRT Workshop “An Introduction to Euclid Corridor BRT” July 21-22, 2008
2 ECTP Economic Development Plan Basile Baumann Prost & Associates, Inc. (revised November 30, 2001) Goal for Plan: Assure that development plans, public policies, and transportation improvements are mutually supportive. Established an economic development program and implementation plan through 2025
3 The Outlook Entire corridor is expected to see increase in residential and non-residential development in the next 3 decades – it’s already happening.
4 Transit Improvements will … n Facilitate the movement of people n Energize the street n Support increased levels of development along the Corridor n Empower the community and facilitate the development that is called for in existing plans n Transportation and capital improvements will serve as a unifying element for the development within the Corridor n Increase property values
5 Transportation Investment and Property Development Flow Chart Transportation Investment -> Accessibility of Benefits -> Capitalization of Benefits -> Re/development
6 Affect on Property Values n Simulates development by enhancing the attractiveness of parcels for development or redevelopment. n Parcels that were not previously considered prime for development appear more desirable after the improvement is announced or implemented. n While not conclusive, studies of Bogota’s TransMilenio corridors suggest that real estate prices and development opportunities increase incrementally for every 5 minutes of walking time closer to the BRT station.
9 Land Value Impacts of BRT Systems n Like rail systems, the cost-effectiveness of BRT hinges on the ability to have supportive land uses that concentrate activity along system corridors. Therefore, in most cases BRTs have been built in corridors with proven demand. n Cleveland’s Euclid Corridor is mostly high density development in downtown, University Circle, and East Cleveland. n Midtown Cleveland offers the ability to attract dense development that will enhance the BRT system in the future.
10 Economic Development Benefits by 2025 (constant 2001 dollars) Commercial Development 9.2 million sq/ft. New Residential Units7,760 Capital Investment$1.75 Billion Additional Population15,500 Annual Local Taxes$55.8 Million Annual GCRTA Sales Tax$2.5 Million
11 One-Time Construction Period Impacts (constant 2001 dollars) Construction Costs (includes$1.9 Billion transit-related development & system costs, excludes vehicles & a/e) Person Years of Employment17,000 Annual Payroll$0.7 Billion Local Taxes$13.4 Million GCRTA Sales Tax$6.3 Million
12 Difference over No-Build, Post- Construction Impacts by 2025 (constant 2001 dollars) Non-Residential Sq Ft.6,100,000 Residential Dwelling Units5,350 Population11,900 Annual Ad Valorem Tax$38,300,000 GCRTA Sales Tax$1,750,000
13 Increased Regional Market Share n BBP suggest that without capital improvement, growth would continue to happen at the termini of the Corridor, but not elsewhere n MidTown segments of the corridor in particular would not reach its development potential n IMPORTANT: Investment in the corridor does not account for any net new regional development that would be created by ECTP investment, but rather the redistribution of projected regional growth into the Corridor.
14 From Cleveland Plain Dealer Series, Quiet Crisis. Information compiled by Plain Dealer from Bureau of Economic Analysis, U.S. Department of Commerce Greater Cleveland’s Growth Compared to the Nation Existing Cleveland Economy
15 From Cleveland: In Focus, A Profile from Census 2000, Brookings Institute Population Loss
16 Housing Starts County2007200620052004% Change ’04 – ‘07 Cuyahoga9941,3581,9422,413-58.8 Geauga261257368429-39.2 Lake597806903997-40.1 Lorain9711,3841,8762,088-53.5 Medina6919031,2141,443-52.1 Portage469773840814-42.4 Summit8341,2221,7591,972-57.7 Regional4,8176.6638,90210,156-52.6 Yr / Yr decline-27.7%-25.5%-12.3% From Crain’s Cleveland Business, “Struggling to Survive”, March 24-30, 2008
17 Foreclosure Crisis – Cleveland versus State / Nation Real Estate Owned (REO) Property Only – Not including Filings Ohio is in the top 10 states for filings per capita Cuyahoga County had 11.5 filings / 1,000 population in 2007, the highest rate in the state Foreclosures
18 But There IS Good News: n Neighborhoods: Local development corporations and other stakeholders have a strong history and track-record for meeting and exceeding their development plans. n Downtown: Currently 4 tenants are looking for Class A space Downtown in excess of 175,000 square feet which could anchor one of several planned, new office development projects within the next 12 to 24 months. This could be the largest new CBD project since the early 1990s.
19 More Good News: n Industrial: Growth in certain areas of the manufacturing sector (plastics, rubber, transportation equipment, fabricated metals, and chemical manufacturing) prompted developers of industrial space to commence with the first large-scale speculative projects in recent years. n Rental Market: Large number of single-family mortgage defaults are causing homeowners to enter the apartment rental market increasing occupancy levels and providing upward pressure on rents of apartment units.
20 Project Development by Type by 2025 Institutional 5.0 Million Sq. Ft. Light Industrial1.25 Million Sq. Ft. Office3.0 Million Sq. Ft. (16% regional capture rate) Commercial 1.0 Million Sq. Ft. Residential 7,762 units (12% of the average regional residential construction) Population along Corridor57.3% growth 19,230 (2000) to 30,255 (2025)
21 So far so good! Projects completed since 2000, underway, and/or proposed: n Public Square to the Inner belt = $1.3 billion in new investment n Midtown = $87.3 million in investment n Fairfax and University Circle = $3 billion in new investment
22 Downtown East Fourth Street, where developers have invested $110 million, is humming with nightclubs, apartments, restaurants and a downtown bowling alley.
23 Playhouse Square More than $61.2 million has been invested in the Idea Center and Hanna Theatre renovations.
24 Cleveland State University CSU's new master plan envisions a residential campus with new apartment buildings rising north and south of glassy new academic buildings along the north side of Euclid Avenue. Total value of new development is estimated at $319.8 million.
25 The price of an acre of land in the long- blighted Midtown area is increasing and real estate speculators are purchasing land. Midtown
26 The Cleveland Clinic is building $868 million worth of new projects, including a giant new heart institute. Over $468 million in new investment has already been constructed. This is over $1.2 billion in new investment fronting on Euclid Avenue. Cleveland Clinic
27 In University Circle, over $1.7 billion has been or will be invested. The Cleveland Museum of Art is nearly halfway through a six-year, $258 million expansion and renovation. University Hospitals has $326 million worth of investments on tap. University Circle
28 Guide Development through Zoning n MidTown Zoning Overlay District l Minimum floor-area ratio, parking mitigation, pedestrian emphasis, and façade improvements n Design Guidelines refocus development away from parking garages and driveways n Transit orientation will serve as the unifying element for the entire Corridor n Residential Design Guidelines in place in University Circle
30 Financial Incentives n Land Assembly/Land Banking Initiatives l City of Cleveland, Port Authority n Streetscape Improvements n GCRTA’s Art in Transit Program (1%) n Tax-Increment Financing (TIFs) n Tax Abatement n Federal Empowerment Zone & City Loans/Grants n Brownfield Incentives l City of Cleveland, Cuyahoga County, & State of OH n Ohio Job Creation Tax Credit n Historic Preservation Tax Credit n Cleveland-Cuyahoga County Port Authority Financing n City officials established the “First Five” program n “Circle Living” housing assistance program
32 Economic Development Success? Yes! But Too Early to See The Full Story… n Generally it is impossible to insolate whether the BRT caused the land value change, or whether planners sited the stations in locations that were already valued by residents. n Changes may be the result of local real estate submarket variations. n The capitalization of benefits from the BRT improvements may take a long time to occur. n Nonetheless, it appears that positive factors in Cleveland are creating a “perfect storm” for development along the Corridor. n Time will show what investments will now happen because of the transit improvements that were not previously planned.