Transcript Greater Cleveland Regional Transit Authority

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
1
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
2
The Outlook
Entire corridor
is expected to
see increase in
residential and
non-residential
development in
the next 3
decades – it’s
already
happening.
3
Transit Improvements will …

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


Facilitate the movement of people
Energize the street
Support increased levels of development along
the Corridor
Empower the community and facilitate the
development that is called for in existing plans
Transportation and capital improvements will
serve as a unifying element for the development
within the Corridor
Increase property values
4
Transportation Investment and Property
Development Flow Chart
Transportation Investment ->
Accessibility of Benefits ->
Capitalization of Benefits ->
Re/development
5
Affect on Property Values



Simulates development by enhancing the
attractiveness of parcels for development or
redevelopment.
Parcels that were not previously considered
prime for development appear more desirable
after the improvement is announced or
implemented.
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.
6
Circa 1920
7
ECTP Map
Cleveland Neighborhoods
8
Land Value Impacts of BRT Systems

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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.
Cleveland’s Euclid Corridor is mostly high density
development in downtown, University Circle, and East
Cleveland.
Midtown Cleveland offers the ability to attract dense
development that will enhance the BRT system in the
future.
9
Economic Development Benefits by
2025
(constant 2001 dollars)
Commercial Development
New Residential Units
Capital Investment
Additional Population
Annual Local Taxes
Annual GCRTA Sales Tax
9.2 million sq/ft.
7,760
$1.75 Billion
15,500
$55.8 Million
$2.5 Million
10
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 Employment
17,000
Annual Payroll
$0.7 Billion
Local Taxes
$13.4 Million
GCRTA Sales Tax
$6.3 Million
11
Difference over No-Build, PostConstruction Impacts by 2025
(constant 2001 dollars)
Non-Residential Sq Ft.
Residential Dwelling Units
Population
Annual Ad Valorem Tax
GCRTA Sales Tax
6,100,000
5,350
11,900
$38,300,000
$1,750,000
12
Increased Regional Market Share



BBP suggest that without capital improvement,
growth would continue to happen at the termini
of the Corridor, but not elsewhere
MidTown segments of the corridor in particular
would not reach its development potential
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.
13
Existing Cleveland Economy
Greater Cleveland’s Growth Compared to
the Nation
From Cleveland Plain Dealer Series, Quiet Crisis.
Information compiled by Plain Dealer from Bureau of Economic Analysis, U.S. Department of Commerce
14
Population Loss
From Cleveland: In Focus, A Profile from Census 2000, Brookings Institute
15
Housing Starts
County
2007
2006
2005
2004
% Change ’04
– ‘07
Cuyahoga
994
1,358
1,942
2,413
-58.8
Geauga
261
257
368
429
-39.2
Lake
597
806
903
997
-40.1
Lorain
971
1,384
1,876
2,088
-53.5
Medina
691
903
1,214
1,443
-52.1
Portage
469
773
840
814
-42.4
Summit
834
1,222
1,759
1,972
-57.7
4,817
6.663
8,902
10,156
-52.6
-27.7%
-25.5%
-12.3%
Regional
Yr / Yr decline
From Crain’s Cleveland Business, “Struggling to Survive”, March 24-30, 2008
16
Foreclosures
Hous ehold
Perc ent age of Filings Per
Foreclosure Crisis – Cleveland versus State / Nation
Real Estate Owned (REO) Property Only – Not including Filings
0.45%
0.40%
0.35%
0.30%
0.25%
0.20%
0.15%
0.10%
0.05%
0.00%
t
Na
YTD 2007
YTD 2008
io
i
nw
de
Oh
io
y
Cu
ah
a
og
C
n
ou
ty
• 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
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But There IS Good News:

Neighborhoods: Local development
corporations and other stakeholders have a
strong history and track-record for meeting and
exceeding their development plans.

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.
18
More Good News:

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.

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.
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Project Development by Type by 2025
Institutional
5.0 Million Sq. Ft.
Light Industrial
1.25 Million Sq. Ft.
Office
3.0 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 Corridor
57.3% growth
19,230 (2000) to 30,255 (2025)
20
So far so good!
Projects completed since 2000, underway, and/or
proposed:

Public Square to the Inner belt = $1.3 billion in
new investment

Midtown = $87.3 million in investment

Fairfax and University Circle = $3 billion in new
investment
21
Downtown
East Fourth Street, where developers
have invested $110 million, is humming
with nightclubs, apartments, restaurants
and a downtown bowling alley.
22
Playhouse Square
More than $61.2 million has been
invested in the Idea Center and
Hanna Theatre renovations.
23
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.
24
Midtown
The price of an acre of land in the longblighted Midtown area is increasing and real
estate speculators are purchasing land.
25
Cleveland Clinic
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.
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University Circle
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.
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Guide Development through Zoning
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MidTown Zoning Overlay District
 Minimum floor-area ratio, parking mitigation,
pedestrian emphasis, and façade
improvements
Design Guidelines refocus development away
from parking garages and driveways
Transit orientation will serve as the unifying
element for the entire Corridor
Residential Design Guidelines in place in
University Circle
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Midtown Zoning Overlay District
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Financial Incentives
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Land Assembly/Land Banking Initiatives

City of Cleveland, Port Authority
Streetscape Improvements
GCRTA’s Art in Transit Program (1%)
Tax-Increment Financing (TIFs)
Tax Abatement
Federal Empowerment Zone & City Loans/Grants
Brownfield Incentives

City of Cleveland, Cuyahoga County, & State of OH
Ohio Job Creation Tax Credit
Historic Preservation Tax Credit
Cleveland-Cuyahoga County Port Authority Financing
City officials established the “First Five” program
“Circle Living” housing assistance program
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Economic Development Success? Yes!
But Too Early to See The Full Story…
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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.
Changes may be the result of local real estate
submarket variations.
The capitalization of benefits from the BRT
improvements may take a long time to occur.
Nonetheless, it appears that positive factors in
Cleveland are creating a “perfect storm” for
development along the Corridor.
Time will show what investments will now happen
because of the transit improvements that were not
previously planned.
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Questions
?????????
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