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Innovation From a ‘P2’ System

Written by Arturo Vasquez and Patrick McKelvey, Stantec

RAILWAY AGE, APRIL 2019 ISSUE – On the West Coast, California is doing something different in Transit-Oriented Development.

In the first installment of Railway Age’s Transit-Oriented Development (TOD) series, Stantec Executive Vice President of Infrastructure Stu Lerner explained how TOD is on the rise across North America. He described how New York got TOD right very early, and how that success has continued right up to the new skyscraper and transit development at One Vanderbilt Avenue.

The farther you get from old American urban centers like New York City or Boston, the larger the legacy of our Interstate freeway system looms. Great distances and open spaces inevitably led to urban and suburban sprawl, with many people living on outer fringes of cities with less dense, automobile-oriented development. These communities are playing catch-up in the 21st century, as the idea of the multimodal transit hub has gained prominence out of necessity, giving rise to denser communities with more amenities, more transportation options and more walkable neighborhoods. That is certainly the case on the West Coast, where California is doing something different in TOD.

Incentivizing Developers

Before we look at TOD in California, let’s take a look at what TOD is not. It is not just any development near a bus, train or light rail station. It is not a building within a quarter-mile of some form of transit, as some have tried to define it. As TOD has become increasingly desirable, it’s become fashionable to slap that sticker on a residential development whenever remotely possible, just to improve its financial performance.

True TOD, and the broader concept of TOC (Transit-Oriented Communities) is an approach that incentivizes both transit and real estate development by taking a wider view of creating a community. It takes a progressive approach to development that incentivizes transit improvement and ridership, as well as denser developments that integrate office, retail and housing.

Some progressive zoning approaches to TOD/TOC allow for more density, while others will reduce parking requirements from 1.5 spaces per residential unit to 0.75, or even 0.5 space per unit. Not only does this encourage transit ridership by reinforcing the dependency on transit, but it also makes the project more feasible for the developer, who doesn’t have to invest in hundreds of $30,000 parking spaces before seeing any kind of return on investment.

The development does not necessarily have to be a high-rise tower or be built directly on top of a brand-new transit station. Some models put the sweet spot for feasibility at around 200 units with an upgrade to existing transit. This has the added benefit of tempering the NIMBY element to a new development that inevitably accompanies resistance to high-rise towers in lower-scale neighborhoods.

A low-rise Type 3 or Type 5 construction over a concrete podium building, for example, can be permitted at a different level of construction that doesn’t require more expensive material costs, high-rise code requirements or more stringent elevator requirements. In the end, it’s about getting the financial numbers to work.

Making a case for changes that allow for true TOD is desirable for developers. As we assemble evidence of more successful methods, the case becomes easier for transit and municipal authorities.

The P2 model

One very important difference between the Californian experience in TOD vs. other jurisdictions is the increasing prevalence of unsolicited proposals. The California Legislature, like some other governments, allows its public agencies to accept and review unsolicited proposals from the private sector, outside of the traditional RFP process. While the real practice varies and is sometimes limited (in timing, in scope, size, etc.), it is intended to engage private-sector innovation on projects that will result in the public good. Essentially, a government cannot issue an RFP for something it cannot precisely describe nor have the planning and funding in place.

An unsolicited proposal can jumpstart a project by informing the public agency of its innovative solution, the benefits to transit ridership, housing goals and commitments to affordable housing. California’s transit agencies can then review the proposal for merit, and potentially choose to move forward with a modified RFP.

The differentiation of a P2 from the public-private-partnership (P3) model is that the developer and the architect and transit consultant (i.e. Stantec) act as one entity, researching and putting the proposal together for review by the public agency. This whole process can begin with what we call a “What If” study—exploring a project model that will work for all parties and creating a path to eventual construction. This approach—which requires an integrated practice synthesizing urban design, transportation, transit, mixed use architecture and development—has the benefit of saving time, allowing for some creative and progressive solutions that make financial sense, and moving forward projects that could be years away if left to the traditional RFP process.

“Grand Central West”

As the paradigm of TOD/TOC in California continues to shift to involve private sector innovation, one project stands out as a potential marker for the future, with ripple effects across the state and the country.

Diridon Station in San Jose has been a rail hub since it opened in 1935. The government currently plans to invest $10 billion, turning it into a multimodal transit hub that would spur development, add as many as 25,000 jobs and forever change the character of downtown San Jose.

The project would eventually connect seven transit lines, including California high-speed rail, BART, Caltrain and the Santa Clara VTA. The city has estimated that the increased transit links will carry 140,000 passengers, increasing transit trips to the downtown eightfold.

An essential part of the project is San Jose Google Village. Redevelopment of more than 10 acres of land would be a significant financing anchor, with far-reaching benefits to the region. One such benefit would be much-needed housing that the city is prioritizing, having stated it wants 25% of the housing built near Diridon Station to be affordable and rent-restricted. Google has demonstrated that it is all-in, holding hundreds of public meetings and recently purchasing the Kearney Pattern Works Steel Foundry site—a key piece in the company’s master plan for the area. Diridon has the support of both government officials and the general public, in large part due to the transparency of the process.

If the development moves forward, Diridon would represent more than just a TOD project—it would be an entire Transit-Oriented Community, brought to life by a private sector investment.

San Jose is not the only city seeing the value in flexible TOD models to spur development and improve transit service and ridership. Progressive-minded cities across California and the country are changing zoning laws to allow for denser communities with reduced parking requirements and more affordable housing.

Walkable, lively communities are once again where professionals want to live and work, and these cities are embracing taking their communities into a multimodal 21st century. This applies to traditional downtown cores, but we’re also seeing it in areas between large centers, where dying suburban malls are being turned into dense communities capable of supporting living, working and playing in the same place.

Enhancing the urban environment and applying it to different contexts has the benefit of increasing economic growth and equity, solving transportation issues and building more integrated communities.

True TOD has been around for a very long time—it’s as old as Paris, London and Amsterdam—but we are now finding new ways to apply it to 21st century America.

Arturo Vasquez (left) is a Principal with Stantec in San Francisco, and an architect, urban designer, and educator with more than 30 years of experience. Patrick M. McKelvey, AIA (right) is a Senior Principal with Stantec in Los Angeles, and an expert in transit facility planning, design and architecture.


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