Minneapolis' $2B Southwest rail attracting $1B in mixed-use development near stations
- The Metropolitan Council’s Metro Transit, the agency that directs mass transportation in Minnesota's Minneapolis-St. Paul region, says that development around the $2 billion Southwest light-rail system's 16 stations is set to exceed the $1 billion reported earlier this year, according to the Star Tribune, although some maintain that development would have happened in those areas anyway. The council estimated that, as of February 2018, development along all of its light-rail lines was more than $8 billion during the previous year.
- Development along the new route’s 15 miles, an extension of the Metro’s existing Green Line from downtown Minneapolis to the city’s southwest suburbs, includes apartments, offices and retail, with $386 million of commercial permits pulled within a half mile of a Southwest station from 2011 through 2017. The value of public and institutional permits for projects like parks and hospitals totaled $59 million during the same time period. Local officials spent at least $27 million on infrastructure around the stations to help clear a path for investors.
- Developers and planning experts, however, said it’s unlikely that a rail line serving the suburbs could generate enough developer interest to provide a significant economic benefit, although a nearby rail station is a “nice addition." The surge of transit-oriented development, or TOD, investment doesn’t happen until after funding for the transportation project in question becomes more certain, researchers determined. A study by Jason Cao, an associate professor at the University of Minnesota’s Humphrey School of Public Affairs, found that building permits around Southwest stations shot up 24% in 2011 after the project received a $500 million grant.
The council is still waiting on final approval from the Federal Transit Administration for a $929 million grant, but construction is underway after what some contractors would likely describe as a contentious bid process. The council scrapped the first round of proposals after the numbers came in higher than expected. The agency then barred more than 35 companies and contractors from participating in the second round to avoid them leveraging the information they might have learned during the course of initial bidding.
Nevertheless, TODs are typical of a high-density hub, as they provide housing and commercial uses necessary to support the ridership for the transportation project in question, be it a bus rapid transit system or a new light-rail line. Some TODs have a complete mixed-use project pop up around a station, where workers, visitors and residents travel in and out of the development. A TOD can also translate into a sports stadium or retail center, depending on traffic volumes.
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