Gravy Train

City planners want a piece of the light-rail action--and they're not thinking spare change

On a cool spring day, the pavilion on Metrodome Plaza is silent. The beer vendors haven't yet set up for the summer round of tailgate parties; the blue picnic tables sit empty, and the odd steel cutouts of anonymous athletes stand like lonely sentinels in the wind.

Back in 1996 the Metropolitan Sports Facilities Commission spent $4.6 million to build the plaza on the block between the Metrodome and the offices of the Star Tribune, as part of an effort to make the much-maligned dome a more inviting venue for fans. Now, plans are being sketched that could replace beer and brats with a far bigger public project. The Minnesota Department of Transportation's planned rail line--expected to open for business in 2004 --is slated to bisect the block diagonally. And while MNDoT's plans call for the line to take up only about half the block, city planners would ideally like to get control of the remaining land for projects that could include a brand-new plaza ringed by retail shops, an underground public parking ramp, and maybe a short office tower, all clustered around the rail line's "Downtown East" station.

Backers of light-rail transit (LRT) have long touted "transit-oriented development" as one of the major benefits of building a light-rail line. Theorists paint pictures of metro areas transformed by the new mode of transit, where workers whiz from home to work via light rail, picking up everything from cappuccino to a new pair of shoes along the way. Locally, one study suggests that once the 11.4-mile rail line connecting downtown Minneapolis to the Mall of America and the airport is in place, nearly 7,000 new units of housing, 19 million square feet of commercial space, and 68,000 new jobs could be created on land within half a mile of the tracks.

Will light rail blitz Metrodome Plaza's lonely steel athletes?
Craig Lassig
Will light rail blitz Metrodome Plaza's lonely steel athletes?

But to attract all that development, city planners say, the city needs to consider making some substantial public investments. "Sometimes the public sector has to be more aggressive in stepping in ahead," says Mark Garner, the Minneapolis Community Development Agency (MCDA) planner in charge of transit-oriented development. "A number of projects have emerged that represent the public sector taking the lead, and that's because they involve things that couldn't be accomplished by the private sector."

So far, $9 million has been earmarked for transit-oriented development in Minneapolis--$4 million from the MCDA and $5 million from the Metropolitan Council, which will manage LRT once it's in operation. (That money is not counted in MNDoT's official $548.6 million budget for the rail line.) And that's just "the start of the commitment over time," Garner acknowledges. How large could that commitment ultimately grow? No one knows, he says: "There are ideas, but there is no budget."

Some of those ideas are outlined in a report the MCDA commissioned from a consortium of four consulting firms last year. Among the findings of the Hiawatha LRT Corridor Transit-Oriented Development Market Study were that "transit-oriented development requires public-private cooperation and partnerships" and "may face difficult financing issues." Public agencies would need to be "flexible" and offer "incentives" such as tax abatement and tax-increment financing, the document continued, and they "must be willing to assume responsibilities for necessary public infrastructure (parks, recreational amenities, parking, etc.)."

At Downtown East, Garner explains, the MCDA essentially wants to add bells and whistles to the basic MNDoT plan. "We want a better station than the current project is able to deliver," he says. The agency is also studying the feasibility of building a parking ramp, including between 800 and 1,100 parking stalls on as many as four underground levels. Garner says underground parking typically costs between $26,000 and $27,000 per stall, which would put the price tag for the ramp at anywhere from $20.8 million to $29.7 million.

Parking is likely to be a sensitive issue no matter what kind of project city officials ultimately settle on. Right now about 250 Star Tribune employees park their cars on the Metrodome Plaza block, one of five owned by the paper's parent company, the McClatchy Co. Some light-rail opponents have linked the pro-rail position of the Star Tribune editorial board to the paper's ownership of the land, which would presumably gain value if new development comes to the area. But Strib spokesman Frank Parisi scoffs at that suggestion. "That's a knee-slapper," he says, "because operationally the loss of the block does not benefit us; it creates a problem. We can't go a day without having replacement parking for those spaces." If the city and state took the land through eminent-domain proceedings, McClatchy would be entitled to be paid fair market value; according to Hennepin County property tax records the block had an assessed value of $1.93 million last year.

In addition to Downtown East, the MCDA has identified two other stops on the proposed rail line where the city should be "proactive" in spurring development. At the stop on Franklin Avenue near Hiawatha Avenue, the market study argued that "significant public investments will be necessary to stimulate market interest." It didn't estimate specific costs, but suggested that the public would have to pay for buying land, reconfiguring roads, and "new public facilities (such as transit hubs, transit offices, etc.)."

Down the line, at Hiawatha Avenue and Lake Street, studies have shown that the area could support as many as 1,250 new units of various types of housing. The market study also called for strengthening commercial development in the area. "Very quickly at a site like Hi-Lake you realize you're talking about several hundred million dollars of investment," says Garner. Private developers are expected to pay for most of that, he adds, but an unspecified amount of public money could be used for affordable-housing subsidies. Garner says the stop is the agency's highest priority with respect to development.

Of course, Garner notes, all the current proposals are still in the blue-sky stage: No one knows for sure whether the light-rail line, currently under fire at the state capitol, will even be built. And if it is, trains aren't slated to begin running until 2004. Partly because of that, debate on the subject has not begun in earnest at the city council. But First Ward council member Paul Ostrow says the city should be cautious before committing major subsidies. "I think we're going to have to be thoughtful and look to other cities and see what they've done," he offers. "Some of these things aren't going to happen overnight."

In fact, some experts contend, they may never happen at all. "Rail has not been a magnet for development," says John Charles, environmental policy director of the Portland-based Cascade Policy Institute. When Portland's line first opened in 1986, says Charles, development was so sparse the city council finally passed a tax-abatement policy to attract investors. These days, says Charles, if you took the train in Portland and looked out the window, "What you'll find is either a) nothing has happened, b) it's been built by the government, c) it's been subsidized by the government, or d) it would have happened anyway." (Kim Knox, land development manager with Portland's light-rail management agency, Tri-County Metropolitan Transportation, says there have been $1.9 billion of mostly private investments along the rail line; she says she has no data showing the total public cost.)

Public subsidies have been typical anywhere development has sprung up along light-rail lines, says Wendell Cox, a St. Louis-based public-policy consultant and former member of the Los Angeles County Transportation Commission. He decries what he calls the "false gospel" preached by those who have gotten transit-oriented development religion: "Light rail in itself does not spur development," he maintains. "Subsidies will spur development, whether or not you have light rail."

On that score, the MCDA's Garner would not necessarily disagree. "Development will happen with or without [LRT], and public investment in vital public infrastructure will happen with or without [LRT]," notes the planner. "When the market study says 'additional public investment,' that's not being driven by [LRT] being built. The level of funding is driven by costs of things like public infrastructure. These are typically things we would have to address anyway as a city." Maybe, Garner adds, it all comes down to which kind of transit-related project the city chooses to subsidize: "Who can look at the last 40 years of highway construction and say it didn't create development?"

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