A Streetcar Named Development

What attracts more people and business: transit tracks or government subsidies?

All Aboard!

When Mayor Bob Walkup proudly announced in February that Tucson had received sufficient federal funds to likely ensure the implementation of a modern streetcar line, he bubbled, "Everything now changes."

Similar enthusiasm was expressed in 2006 by the now-defunct Tucson Citizen. Before the successful Regional Transportation Authority (RTA) election, the newspaper proclaimed: "Supporters say other Western cities have found that permanent streetcar systems have spurred business development along the routes, creating jobs and expanding local tax bases."

RTA money and those federal funds will cover most of the cost of the 4-mile, almost $200 million streetcar project. But based on the experience of other communities, critics caution that Tucson shouldn't expect the streetcar to be a "cash cow" for future development.

Randal O'Toole of the libertarian Cato Institute has researched the economic impacts of light-rail and streetcar lines in detail, and is a well-known critic of these types of public transit. (The differences between these two types of rail systems have to do with the type of track and right of way used, along with the length of the route.)

O'Toole says he's found no proof that modern streetcars are any kind of engine for economic turnaround. "It's a Disneyland toy which doesn't attract new development," O'Toole declares.

O'Toole suggests that instead, government subsidies draw developers to invest near streetcar and light-rail lines.

He writes in an article: "Developers in Portland, Oregon, built no new transit-oriented developments along the city's light-rail line until the city began subsidizing such developments 10 years after that line opened."

He elaborates in a phone interview. "Every time I ask for an example (of development along a line)," O'Toole says, "I Google it and find tax-increment financing or something like it involved. (Such developments) are almost always subsidized."

Tucson's modern streetcar will charge riders fares and is slated to run from University Medical Center through the UA and the West University neighborhood. From there, it will cut south on Fourth Avenue and then head west on Congress Street before jogging to the far side of the Santa Cruz River.

Local backers, including westside Councilwoman Regina Romero, are confident that the streetcar will help revitalize property along its route.

"We know what happens with streetcars in other places," Romero explains. "There's a lot of development and housing."

Even though the streetcar line won't be in operation until 2013 at the earliest, plans and proposals by the score are already being floated for land-use changes along its route.

On the campus itself, attention is being paid to how the streetcar might help spur implementation of the proposed Warren Avenue mall.

"We're really excited about it," says Peter Dourlein of the UA Planning, Design and Construction Department.

University Stop!

The first focus of proposed development concentrated along the streetcar route is centered on the area between Speedway Boulevard, Sixth Street, Park Avenue and Euclid Avenue. Often referred to as a "transition zone" between the UA and the West University neighborhood, this land presently has a mix of uses including dormitories, the Main Gate Square commercial center and some single-family homes used as residences or offices.

In the past several years, two high-density, high-rise residential and retail projects were proposed for this area, but neither got off the ground. In supporting this type of intense development, then-City Councilwoman Nina Trasoff remarked in 2008: "I've been pushing transit-oriented development in the last two years. ... It's a good plan to encourage greater density. I have a responsibility to do that."

But how much of a subsidy—from a city government that is basically broke—will it take to encourage intense development along the streetcar line? Would subsidized developments even be positive for the community?

Steve Kozachik, who defeated Trasoff in last year's city election, observes: "The streetcar by itself makes no economic sense. The city has to take the initiative by putting together a menu in terms of what we can offer developers for housing and retail. It could be a mix of things like land swaps, parking and/or financial incentives."

The result would be transit-oriented development, or TOD, a current buzzword among contemporary urban planners. Unlike traditional city planning, in which land uses determined transportation decisions, TOD goes the other way: Transportation via modern-streetcar or light-rail systems drives land use.

Developer Mike Noonan last year proposed a multistory student-housing project near University Boulevard and Euclid Avenue, about one block away from a future streetcar stop. He believes the line can be a bonus for his development—but it's not the lynchpin.

"The big thing for us," Noonan explains, "is proximity to the UA."

Noonan's proposal received the support of the West University Neighborhood Association, though some individual board members continue to oppose it.

"The developer is promising the neighborhood a minimum of $15,000 per year from a historic bed tax," comments longtime resident John Patterson. "If the neighborhood is going to support this project, it should be on the merits of the development and not on getting money."

As for the role of the modern streetcar in encouraging high-density projects like Noonan's, Patterson reflects: "I was excited before and supportive (of the line), but now I think this will put too much pressure on the neighborhood."

Another neighborhood resident, Brian McCarthy, says he supports the streetcar line. "But I'm also in favor of protecting our neighborhood with historic design and implementation."

Kozachik represents the West University area on the City Council, and he brings up another argument for transit-oriented development.

"By identifying places closer to the downtown area (for student housing), the UA will benefit, but so will the neighborhoods that don't have to end up with mini-dorms," Kozachik says.

Patterson does not agree that high-density development along the streetcar line will discourage the blight of mini-dorms in areas around the campus. "There is absolutely no proof of that," he says about Kozachik's claim.

Even though Noonan's student-housing proposal went to the Planning Commission in June—where it was recommended for adoption by the City Council with modifications—it appears to be on hold. Noonan is reportedly in the process of selling the project to Campus Acquisitions, LLC, of Chicago.

That company was one of seven firms that responded last month to a UA request for proposals (RFP). The RFP solicited submissions from developers "to construct new non-freshman undergraduate- and/or graduate-student housing, ranging in number from approximately 300 to 1,200 beds."

The budget-challenged university has no desire to be directly financially involved with any of the selected projects. Instead, it will offer incentives such as "student referrals and marketing, (and) branding and management collaborations."

One of the primary criteria to be used in selecting a proposal, according to the RFP, is "projects which will be served by the modern streetcar and projects which contribute to a university presence in the downtown area."

While some of the companies that submitted responses to the UA declined to comment, we do know that Noonan's proposed development would be located near the campus, while most of the others are planned for downtown.

At the deadline for this story, the selection process was proceeding slowly, with university officials hoping to make a final decision on the RFP by the end of the year.

Meanwhile, residents of the West University neighborhood have another potential high-density issue to consider.

At the end of June, a limited-liability corporation headed by Jim Horvath of Town West Realty purchased several historic residences in the neighborhood. They are located at the southwest corner of Euclid and University, across the street from Noonan's proposed project.

Some time ago, Town West Realty demolished an old structure at Campbell Avenue and Sixth Street to construct Sam Hughes Place, a controversial mixed-use project with retail and condominiums. But Horvath insists the same future isn't planned for the West University neighborhood property.

"We want to restore the buildings," he says. "We're not going to try to tear them down. We want to add more units in back with parking."

Fourth Avenue Stop!

The West University Neighborhood Association has been working to update the existing land-use plan for the area, in anticipation of higher-density development in the transition zone between Park and Euclid avenues.

Another plan—this one commissioned by the city of Tucson—has been prepared for the blocks west of Fourth Avenue.

Referred to as the Warehouse Triangle District, this area is bounded by Fourth Avenue to the east, the Union Pacific railroad tracks to the south, and Sixth Street to the north.

According to the land-use plan, prepared by Poster Frost Associates, one major goal for this triangular area should be to acknowledge "the value of the coming influence of the streetcar (and) promote transit oriented development in this district."

In addition, the plan suggests that City Hall "assist developers in their efforts to achieve substantially increased density on larger-parcel development sites."

New mixed-use buildings up to 10 stories tall are recommended to replace the mostly single-story commercial and arts-oriented structures now present. The exception to this recommendation, according to the plan, would be that "all historic buildings are preserved."

These are just two of the planning efforts now underway that will potentially affect land uses along the entire length of the modern streetcar line. The city of Tucson also recently submitted an application for a Community Challenge Grant of the U.S. Department of Housing and Urban Development for almost $3 million.

According to a memorandum sent to the City Council last month about the application, one of the two objectives of the grant is to "address land use, regulatory and perceptual barriers and opportunities to promote public and private development along the 4-mile streetcar alignment."

Albert Elias, director of Tucson's Housing and Community Development Department, expects a decision on the grant application by Dec. 1. He believes federal officials making the selection will be looking to support certain objectives.

"The people heading this up (at the federal level) are thinking big on urban context," Elias says. "They're interested in Tucson and believe some strategic investment can transform the community. In making federal investments (in a city), they want to see some transformational changes made."

What changes would be considered transformational? According to Elias, they include the development of new housing, commercial establishments and streetscape improvements along the streetcar route.

The goal of these changes, he states, is partly public-relations oriented. "Investment along the streetcar line in an urban form that's different than found today ... can help people see the value of the streetcar," Elias says.

But major questions remain about these possible land uses next to the streetcar line. First, how much will it cost the city to make them happen? Second, will the payback to the community be worth the public investment?

Downtown Stop!

Once the streetcar emerges from the south end of the Fourth Avenue underpass, it will head west on Congress Street.

As in the UA area, new high-density developments are being discussed downtown. But judging from a survey of several other Western cities with streetcar or light-rail systems, such developments seem likely to depend on government subsidies.

While supporters of Tucson's streetcar like to use Portland, Ore., as a comparison for the anticipated impacts, that analogy is like Toros fans believing their team can emulate the New York Yankees. Instead, more realistic role models are in order.

Opened in 2004, the Tacoma, Wash., streetcar has a one-mile route, is free and carries about 800,000 passengers annually. According to Bob Levin, manager of project capital for the city of Tacoma, the line has generated some new downtown development, but not at the density desired.

"There are some new condos," Levin observes, "but I don't know if they're attributable to the streetcar line."

Levin also says that developers were interested in using public/private partnerships to build student dorms near the line to serve the University of Washington at Tacoma. But those ideas, he says, "haven't gone forward."

Levin mentions that the LeMay-America's Car Museum will use the streetcar line by building a 165,000-square-foot exhibit hall along the route. In addition, Pacific Plaza, a public-private partnership, will combine office and retail uses with automobile parking.

In Salt Lake City, the first light-rail line was inaugurated more than a decade ago, and while it exceeded ridership projections from the start, Gerry Carpenter says that didn't result in new downtown development.

"Transit-oriented development was slower in coming than was expected," reports Carpenter, spokesman for the Utah Transit Authority. "We're just now seeing movement in that direction. We had small apartments and other uses, but not mixed-use, but that now may be happening."

Jack Wierzenski, director of economic development for Dallas Area Rapid Transit, indicates the recession has significantly impacted downtown development related to their light-rail line.

While more than $4 billion in investment had been attributed to the line, Wierzenski says: "It's really slowed down in the last few years. ... Financing is still difficult for mixed-use projects. ... It's just a lot of talk now, but no go."

Since the Phoenix light-rail line was initially proposed in 2004, its backers tout $5.9 billion in private investment and another $1.5 billion in public expenditures along the route. This includes more than 17,000 residential units, in excess of 9 million square feet of commercial space, and 3,200 hotel rooms.

But Hillary Foose of Valley Metro acknowledges the recession has changed things. "Development's not happening at the rate of 2004 and '05," she admits.

O'Toole from the Cato Institute holds up Phoenix as an example of what can go wrong.

"All the high-density development got free land, but the developers got hornswoggled, and most of the projects flopped, because just building them doesn't create more demand," he claims of property near Phoenix's light-rail line.

One downtown Tucson project proposed immediately adjacent to the streetcar line is Jim Campbell's student housing complex near the Fourth Avenue underpass. Campbell recently submitted a 300- to 650-bed proposal on this site for consideration by the UA.

Campbell says of the streetcar route: "It really helps with connectivity (to the UA). It's a critical aspect of the proposal."

Another downtown project related to the streetcar route is the proposed use by the UA of the former Walgreens building at Stone Avenue and Pennington Street. Negotiations are ongoing with Pima County, which owns the building, and a decision is expected within two months.

If this project comes to fruition, the university would use the historic structure for an urban-design studio and classes pertaining to government functions.

Final Stop!

At Granada Avenue and Congress Street, the streetcar route swings south, passing the federal courthouse and the mostly vacant land west of the Tucson Convention Center.

One development idea for this empty land reportedly comes from the Phoenix firm OTB Destination. They have proposed using city-owned property south of Congress Street, where the supposedly temporary Greyhound bus station is now located, to build a high-end outlet mall.

Having already implemented similar projects in four other communities, the company is apparently seeking assistance from City Hall. (Their representative didn't respond to e-mail messages seeking comment.)

Continuing west on Cushing Street, the streetcar will skirt under Interstate 10 and cross the Santa Cruz River. Its route then passes what was once the site of the proposed Rio Nuevo museum district.

Despite the sorry state of affairs in what was the museum district, the streetcar might still hold the key to several developments on the west side of the river.

Adjacent to the proposed streetcar tracks and situated south of Congress Street is Jerry Dixon's Mercado District of Menlo Park. Under development since 2004 and now including 26 homes, this subdivision will be complemented shortly with the opening of a shopping mercado containing 18 locally owned small businesses.

Next door, Dixon is planning the 14-acre Gadsden development—through which the streetcar will loop. This land was acquired by Dixon from the city in 2008, and under a development agreement for the property, he will either pay approximately $3 million for the streetcar tracks to be installed in the area, or reimburse City Hall for the work.

A six-story, 143-unit senior-living facility along Congress Street is scheduled to be the first phase of the Gadsden project. Dixon expects it to be under construction within 12 months.

Dixon also has plans along Congress Street for two mixed-use buildings containing residential units above retail space. He anticipates these buildings will be under construction before the end of 2011.

A large chunk of land in the center of the Gadsden project site is slated for a 200,000-square-foot commercial development and 650-space parking garage. Dixon calls this project a traditional shopping experience.

But it's a vacant piece of land south of Cushing Street—once the proposed site of the Rio Nuevo underground parking garage and surface-level cultural plaza—which Dixon considers critical to his $23 million investment to date, plus most of his future plans.

"For us to be successful," he insists, "we must address the land south of Cushing."

Dixon would like to obtain the land and build, utilizing a public/private partnership, a 100,000-square-foot destination shopping center. Modeled after a market in Budapest, Hungary, the facility would have shops and restaurants. Dixon says he's even talked to representatives of the Arizona Historical Society about locating their museum there.

Currently, this property is the site of a 30-foot-deep hole in the ground. It was excavated for the planned parking garage and to remove garbage once buried on the site.

Dixon believes the enormous depression will have to be filled in before anything can happen around it. That responsibility, he believes, rests with the city of Tucson.

There are other potential snags in Dixon's plans for the land south of Cushing Street. These include a possible property-ownership dispute between the city and the Rio Nuevo Multipurpose Facilities District Board, as well as a reported $7 million monetary disagreement between the UA and City Hall concerning the land once slated for the UA Science Center.

What happens to the hole in the ground, though, is the critical hurdle, according to Dixon.

"I'm a businessman, and I can't lease space (in most of my other proposed projects) with that big hole in the ground," he says.

Dixon indicates that if City Hall doesn't make a decision on this issue by the end of the year, he'll pull the plug on all of his proposals, with the exception of the development along Congress Street.

At this point, though, the city hasn't even determined how much it might cost to fill the hole.

Despite Dixon's threat, he's confident that the streetcar will be transformative for Tucson. He made a substantial amount of money in Phoenix, he says, by selling property three blocks from the light-rail line, and calls the Tucson project "a game-changer."

But the unknowns make the area around the western terminus of the streetcar a question mark. It could become a thriving residential/commercial area—or it could remain a hole in the ground.

Councilwoman Romero believes the future use of the Rio Nuevo land is critical. She says she's directed city staff to put together a working group to consider its future.

Romero insists that she doesn't want to give up on the Tucson Origins Park, which was slated for part of the area. However, she also thinks the idea of city financial participation in westside land-use projects along the modern streetcar line is farfetched.

O'Toole from the Cato Institute sees things differently, believing it's government subsidies, not streetcar traffic, that are required to drive most development decisions.

"I question government meddling in downtown redevelopment," he says. "A streetcar doesn't help."

The well-known light-rail/streetcar critic adds: "Extend my sympathies to the people of Tucson for being subjected to this white elephant."

But Romero remains optimistic that development opportunities will exist along the streetcar route. "We're looking for programs that will help in these economic times," she says of assistance efforts, "without poking into the city's general fund. We need to be as creative as possible."

Is the Trolley Toast?

For many years, everyone has assumed that the modern streetcar would co-exist with Tucson's historic trolley, which has been operated by volunteers on Fourth Avenue and University Boulevard since 1993. The two would share track and complement each other, it was believed.

That idea now appears to be in jeopardy. According to Dick Guthrie of Old Pueblo Trolley, "The city's consultants seem to be proposing something which precludes operation of our historic cars."

Guthrie hopes that attitude will change. "Our biggest concern is to educate the consultants about a street railway system that includes modern streetcars," he says.

If that can't be accomplished, Guthrie warns: "Right now, we're teetering on the brink of losing the historic trolley."

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