As Phoenix Light Rail Debuts, Will T.O.D. Get on Track?
- Jan 05, 2009
Phoenix’s $1.4 billion, 20-mile light rail system carried its first passengers on Dec. 27th, and real estate professionals believe that development opportunities around the line’s 20 stations are significant; Valley Metro, which operates the system, projects the system will initially carry 26,000 passengers a day. Phoenix is one of the last large American cities to open a mass transit rail system, but Mindy Korth, executive vice president in the Phoenix office of CB Richard Ellis Inc. believes this tardiness carries some benefits. “It’s going to allow the system to institute best practices from other cities,” Korth said, noting that developers should find many opportunities to build projects along the light rail corridor, which, in its first phase, runs through Mesa, Tempe and Phoenix. “They really have an unfinished canvas to work with.” Indeed, Korth mentioned one project in Downtown Phoenix, One Central Park East, a 26-story office tower being developed by Mesirow Financial Real Estate Inc., that is in close proximity to a Downtown light rail station. “There is a great potential for mixed-use development along the light rail corridor,” said Don Mortensen, owner & president of Light Rail Connect, which runs a Website featuring commercial real estate listings near the rail system. Mortensen got the idea for the database after hearing two lecturers speak of the important of specialization and the ripe future for transit-oriented development when he was a student in the master of real estate development program at Arizona State University. Mortensen said he and his partner in the venture, Bryan Watkins, have been fielding numerous inquiries about development possibilities along the light rail route. “We have gotten a lot of calls from developers who have built T.O.D projects in other cities, who want to do it here,” Mortensen said. But transit-oriented development is certain to face some challenges, Mortensen said. Although Phoenix city officials are publicly lauding the benefits of denser development, he said he knows of one developer who encountered difficulties with zoning officials when that developer unveiled plans to build a dense development. Mixed-use development is actually moving faster in Tempe, he said, and one reason may be that the suburb has much to gain from light rail, as it connects Arizona State’s main campus with the school’s Downtown Phoenix campus. In the near term, development along the light rail corridor is likely to be subdued due to the credit crisis and the economic recession. But, that is not so bad, Korth contends. “There is a slowdown in the development cycle,” Korth said. “That means there will be time that can be used for planning purposes. There is a silver lining to that.”