In late January Santa Monica, Calif.-based Macerich Cos. received approval from the Board of Supervisors of Fairfax County to rezone its 78-acre commercial site to a mixed-used development that will be linked to the Silver Line extension of the Metrorail.
The $5 billion Silver Line, a 23-mile westbound expansion of Washington Metropolitan Area Transit's Metrorail system will extend the existing system out to Dulles International Airport, adding 11 new rail stations. The project — like Manhattan's proposed Second Avenue subway that broke ground in February — had been talked about for decades and faced enormous opposition along the way. But after years of delays, public hearings and countless revisions, the extension is a go.
And there are a group of developers that could not be happier.
In recent months, plans for half a dozen mixed-use projects that will be anchored by the new Silver Line stations have emerged. Most prominent among those: Macerich, owner of Tysons Corner Center, is moving forward with a 3.5-million-square-foot addition to the 2.3-million-square-foot regional mall that will link the 40-year-old project to the Silver Line's Tysons Central 123 station. Construction is expected to begin in 2009. Down the line, proposed projects in Loudoun County, Reston and out near Dulles Airport are also moving forward.
With these developments, Northern Virginia becomes the latest to join the transit-oriented development (TOD) wave that has been hitting suburbs across the country. As Phoenix moves ahead with construction of its $1.8-billion light-rail system (set to debut in 2008), transit-oriented projects are rising along the 20-mile route in burgeoning communities such as Glendale, Mesa and Tempe.
Paul Katsenes, deputy economic development director for the City of Phoenix, says the light rail is expected to generate $600 million in public and private projects on both ground-up construction and redevelopment of existing projects.
Even on older lines and smaller stops, like the New Jersey Transit Raritan Valley Line commuter rail, developers are going back to old stations and adding new components. For example, Westminster Communities is developing the $16 million Cranford Crossing project that will include 300 parking spots, 21,000 square feet of ground floor retail and 50 luxury condominiums.
“Transit is key in mixed-use developments today,” says Lee Wagman, CEO of the Martin Group.
The Santa Monica, Calif.-based developer says using transit to increase density is central to smart growth in America's efforts to urbanize suburbia.
Whether the goal is to create critical mass in either an urban or suburban setting, the addition of transit better positions the mixed-use site as a destination, says Wagman. In addition to having the multiple elements that comprise a live/work/play environment, each component should address the needs of commuters, workers and residents.
Easy as 1-2-3
Macerich has had its sights on expanding Tysons Corner even before its acquisition of the property from Wilmorite closed in 2004. Then, it submitted an initial proposal to Loudoun County officials. Macerich revised and refined it, taking into account county officials' recommendations before publicly announcing them last September.
It anticipates that the addition of the Tysons Central 123 station will increase foot traffic at the property by 10 percent from the 22 million that visit annually. Beyond that, three other stations will also be located along a 3.5-stretch in Tysons Corner including Tysons East, Tysons Central 7 and Tysons West.
“Tysons must have transit to remain economically vibrant, there is no place for more roads,” says Gerald E. Connolly, chairman of the Fairfax, Va. County Board of Supervisors. “The roads and transit (bus) system we've got are overburdened today.”
The line will give Tysons Corner greater access to the 15 million tourists that vist Washington D.C. annually, who now will be able to access the center more easily and quickly, not having towith the region's notorious Beltway traffic.
Macerich's mixed-use expansion plans include more than 1,300 multifamily units, 1.4 million square feet of Class A office space and a 300-room upscale hotel. And, to cater to the anticipated influx of commuters, visitors and residents, it will add another 200,000 square feet of service oriented, street level retail. And all of it is being driven by the Metro expansion.
Macerich's senior vice president of development, Melanie Balfour-Heywood says incorporating retail, transit, office and housing will help urbanize Tysons Corner.
“Clustering development at a transit stop makes it that much more usable,” says Balfour-Heywood. “Instead of adding more retail, here's an opportunity to make this a mixed-use asset as opposed to just a retail asset.”
One key to devising and receiving approval for such a plan is to cultivate good working relationships with government officials and the local community.
“We interpret their plans, create the housing, hotel, public spaces and retail to make their visions come to fruition,” says Balfour-Heywood.
She says, Macerich carefully examined what was needed to make Tysons Corner Center a more diverse urban place by bringing in a mix of uses.
And a successful mix is anything but cookie-cutter.
Market forces have to dictate the components, says Thomas Maddux, president of KLNB Retail, a Baltimore-based commercial real estate and brokerage firm, which itself is working on a 63-acre mixed-use, transit-oriented development called Dulles Station out near the airport. The project is a New Urbanist community adjacent to the Dulles International Airport rail stop, that will contain more than 1,000 luxury residences, 1.5 million square feet of Class A office space, and ground-floor restaurants and retail.
One thing that makes putting TODs together difficult is integrating commercial and transit and coordinating construction of the commercial development with the rail project. It's nearly impossible to get the components to come on line together. In most cases, the mixed-use development opens first.
But then the developer has to deal with keeping the property in operation while rail construction continues. It's also important to link the transit station with the site and establishing entrances to the respective venues is a sequence of events that is well orchestrated. It's through the sequencing that the developer is able to build connectivity from the mixed-use project to the transit site being constructed.
To help transform Tysons Corner Center into an urban environment with transit at its core, Macerich turned to RTKL Associates, a Baltimore, Md.-basedfirm. Its relationship with Tysons Corner Center goes back to 1996, when the firm was retained to convert a lower level truck tunnel to a retail concourse.
One challenge RTKL faced in the design of Tysons Central 123 station was a pedestrian walkway from the transit stop to the respective shopping center, residential, office and hotel entrances. With the density of the mixed-used redevelopment, Harold Thompson, principal, at RTKL Associates, said it was important to design spaces, bridges and elevated plazas that welcomed patrons.
“All the facades that open onto the plaza generate opportunities to create new space for retailers,” Thompson says.
“When rail shows up, that's going to transform the area into a destination,” says Van Armstrong, program manager with the Loudoun County Planning Department, which oversaw proposals for the mixed-use development Loudoun Station.
“Retail relies on people flowing by…that's what the rail will do,” says Armstrong.
Reston-based Comstock Co. has two transit-oriented, mixed-use developments in the works associated with the planned Silver Line extension.
One is Reston Station, which is scheduled for completion between 2011 and 2015, is a planned mixed-use development to consist of a 850,000 square foot high-rise office tower, apartment and condos combined with 150,000 square feet of retail.
The other is Loudoun Station, a mixed-use town center that combines 1 million square feet of office and more than 1,500 upscale residential units with open community spaces and entertainment venues. Situated on 50 acres adjacent to the Dulles Greenway, Loudoun Station will link commuters to pedestrian friendly restaurants, hotel and retail establishments to create a vibrant downtown.
Market Square at Loudoun Station will house a mix of retailers within 320,000 square feet. In it will be a movie theater with stadium seating, fitness club, gourmet grocery store and one- or two-story retail spaces in the residential buildings.
Industry experts agree that there are additional costs associated with mixed-use developments, but, they say, there is no figure or set formula that could adequately project the extra costs. Factors can include the number of subsidized housing units being offered within the residential component to the number of parking spaces available and what percentage are dedicated to residents and tenants.
Although development of a mixed-used project costs 15 to 20 percent more than single-use retail, Maddux notes any additional costs are a small price to pay for the return on investment. And with land increasingly hard to find throughout the northeast and mid-Atlantic regions, mixed-use, especially when anchored by transit, becomes even more appealing.
“Land is too valuable to develop as single use, that's why we develop it as mixed-use,” says Maddux. “There is nothing efficient about having valuable land used for a limited amount of time each day.”
Extending Metrorail makes the western Virginia communities more economically viable as well as accessible for workers and tourists, all the while spurring economic development throughout the region.
Beau Schweikert, CFO for Comstock Corp., argues that having rail service will accelerate area employers' ability to grow.
So, in terms of a mixed used project, is transit or retail more important?
“They are mutually dependent,” adds Schweikert. “You can look around the United States and see plenty of transit stations and plenty of shopping centers. But together, they're better.”