APTA | Passenger Transport
April 13, 2009

In This Issue

2009 APTA - TRB Light Rail Conference Issue


The Math is Easy: Light Rail + People = Economic Benefits
By SUSAN R. PAISNER, Senior Managing Editor

Light rail does more than move people around easily and quickly; it also lends significant support to area businesses, as cities in Arizona and Oregon have discovered.

Business Week has also “discovered” this, rating Tempe the best city in Arizona to start a business. Its mayor, Hugh Hallman, noted that in the last six months of 2008, Tempe experienced the most development activity in his history, which he attributed in large part to the new METRO light rail line as well as the city’s free shuttle service.

Studies have found that, for every $1 a community invests in public transit, it reaps $6 in economic benefits. That finding comes to life when your customers say they would not be in your establishment if it weren’t for light rail—as has happened many times to Chad Wilford, co-owner of Tempe’s Fat Tuesday and director of the Mill Avenue Coalition.

“Light rail makes it easy for people to commute to downtown for games and events without having to worry about parking,” said Wilford, whose coalition consists of 14 restaurants and clubs along Mill Avenue. “It also helps with special events, because people can now take light rail to events like the New Year’s Eve block party or Arts Festival—and they don’t have to worry about driving. It’s definitely brought people down here,” he said, adding: “We can see a difference. I’m happy with it.”

Businesses in Phoenix are also benefiting from the METRO line, according to Randy Luethye, founder and owner of LightRailNetwork.com, which markets a handbook and web site identifying all businesses within a block of every light rail station (currently just in Phoenix, San Diego, and San Francisco, with plans to expand). He described how the owner of Tempe Paintball hadn’t had any business since September 2008—until just about one week after the light rail line opened on Dec. 27, 2008.

“Now he tells me he’s so busy he has no time to talk to me,” Luethye said wryly.

In January, according to METRO spokesperson Hillary Foose, the line reported close to 912,000 boardings, or an average of 30,617 per weekday. The next month, the average weekday ridership rose to 35,277. Given that the forecast had been an annual average weekday ridership of 26,000 boardings in its first year, METRO Chief Executive Officer Rick Simonetta described his agency as “extremely pleased with the preliminary numbers,” adding: “We hope to exceed that projection by continuing to attract new transit users and maintaining our positive relationship with existing passengers.”

Foose added: “We are seeing many of the businesses along our 20-mile line flourish with new clientele from across the region: customers who would not have likely visited without such a convenient connection in METRO light rail.”

“All the businesses are scrambling,” said Luethye, “figuring out how to attract these riders.”

Moving westward, the Lloyd District of Portland, OR, is also benefiting greatly from public transportation, according to Jeff Falconer, a principal with the Capacity Commercial Group, a leading provider of commercial real estate services.

“Light rail has become sort of the public transportation hub of both the east and west and north and south,” he said. “A very large percentage of governmental, state, insurance companies, banking companies are located there, primarily because of the access to both light rail and bus.”

Is Falconer able to see a quantifiable difference before and after implementation of light rail? “The short answer is ‘yes,’” he said. “It is often the tipping point when comparing a Class A asset that’s on light rail vs. one not on light rail. In other words, it makes the difference.”

It certainly does. Take the LYNX Blue Line, the Charlotte Area Transit System’s 9.6-mile light rail line in Charlotte, NC, which opened in November 2007. While land values overall increased 40 percent between 2000 and 2007, previously blighted or unused land along the rail line increased 52 percent. As of September 2008, there was $1.8 billion in projected transit-oriented-development alone, with a projected annual tax revenue increase of $24.1 million.

In addition to the clear economic benefit to businesses, Falconer noted that employees don’t need cars and therefore don’t have to pay for parking, adding, “It eliminates a large cost to employees and/or employers for getting them to work.”

In Luethye’s words: “Light rail creates a brand new community, especially within a mile of the station. I love the fact that people are using public transportation and not using their cars.”

Portland’s Falconer agreed: “As more and more people pay more attention to the concerns for the environment and sustainability, it is a very environmentally friendly way to commute.”

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