TODs to Remain on Drawing Board

PHOENIX-Six months after the area’s Valley Metro light rail began rolling, transit-oriented developers continue sitting on the sidelines until the economy improves.PHOENIX-Six months after Valley Metro launched its light rail system throughout the metro area, developers continue to take a wait-and-see attitude about any potential transit oriented development at or near stations. Area brokers tell GlobeSt.com the reasons for developmental delays range from the poor economy to the fact that light rail in Phoenix is still a curiosity, rather than an alternative transportation mode.

“It’s still kind of a curiosity. Students from ASU (Arizona State University) will take the train from Tempe to Phoenix and back again, or others will take it to see a ball game,” comments Jeff Hartland, senior vice president with Grubb & Ellis BRE/Commercial LLC’s local office. “But I can’t vouch for people, or developers, making a decision based solely on that.”

CB Richard Ellis executive vice president Melinda Korth agrees that the light rail is popular among ASU students, and is a little more upbeat about ridership. She points out that along the light rail’s Central Avenue corridor, there is plenty of office space and retail product. “But what’s missing is housing density,” points out Korth, who operates out of CBRE’s Phoenix office. Without some kind of housing nearby, she notes, there is little chance for transit-oriented projects to truly take off.”

And the problem is, with the economy in the doldrums and construction financing more dream than reality right now, that housing isn’t likely going to happen any time soon. Senior vice president Charlotte Christian with Colliers International’s Phoenix office says other than student housing, and the high-end luxury housing that is already completed along the light rail lines, there isn’t anything going vertical on the housing front.

Hartland says he would have been curious to see how things would have shaken out had the economy been healthy. As of now, he points out there have been buildings constructed along the light rail line that are stagnant, because of the economy.

Both Christian and Korth believe things will shake out within the next three to five years, as the national economy moves toward recovery. Christian adds that another thing that needs to change are people’s perceptions of light rail.

“They’re getting used to it and are looking forward to expansion,” she remarks. “But people will have to live differently before we see any real change. They’ll have to not want to commute 30 miles to work. They have to find more reasons to get out of the car.”

But Hartland cautions that an area requires a lot more than a rail line to be considered desirable by developers, no matter how strong or weak the economy. “If the neighborhood is good to develop in, they’ll develop there anyway,” he comments. “If the neighborhood wouldn’t support new development, the addition of rail doesn’t really change that.”