MARTA looks to invite developers to build on top of its urban rail stations
By Doug Sams and Maria Saporta
Published in the Atlanta Business Chronicle on June 6, 2014
For the first time, MARTA plans to find out how much desire developers have to build high-rise mixed-use projects over the transit authority’s urban train stations.
MARTA will solicit a “request for expressions of interest” later this summer to lease the air rights over intown train stations. Although MARTA would not specifically identify them, the stations are thought to include North Avenue, Midtown, Arts Center and Lenox.
An aerial view of MARTA’s Midtown station showing development potential of the air rights (Courtesy of MARTa)
The transit-oriented developments could increase ridership, bring MARTA additional revenues, lure more real estate investment to the city and spark community-focused residential and retail projects around transit stations.
“We want our stations to become destinations, not just transfer points,” said Amanda Rhein, who oversees MARTA’s office of transit-oriented development and real estate.
Offering air rights marks an important step in the maturation of MARTA’s transit network and underscores the ongoing progression toward greater density around its stations. In other U.S. cities such as Washington, D.C., developers need access to air rights because of the shortage of land around existing train stations. Historically, a lack of land hasn’t been much of an issue in the city of Atlanta, but that is starting to change, especially in Buckhead and Midtown, where a wave of high-rise residential projects are either in planning or underway.
Wood Partners is developing a high-rise apartment project next to the Midtown MARTA station. Just one block west on Spring Street, developers have started two student housing projects. Just south of the Arts Center Station, Olympia Heights Management LLC and Ashkenazy Acquisition Corp. are developing a $650 million high-rise mixed-use project between 15th and 14th streets; Novare Group is proposing a tower at 14th and West Peachtree; and The Related Group has yet another tower planned at that same intersection.
“There is so much activity around our stations right now we want to see how much interest there is in building on top of them,” Rhein said. “The apartment market is starting to feel pretty hot, so we are trying to get in front of that.”
Developing on top of MARTA stations isn’t new to Atlanta. In Buckhead, the 27-story Resurgens Plaza was built over the Lenox MARTA station.
Aerial view of the North Avenue MARTA station (Courtesy of MARTA)
In downtown, the Sloppy Floyd building was built on top of the Georgia State MARTA station.
The difference is those buildings were developed concurrently with the stations years ago, said John Crocker, MARTA’s director of development and regional coordination. Any proposed air rights projects would have to be developed without interrupting ongoing transit operations.
MARTA’s roots date back to the early 1970s when it purchased the Atlanta Transit System. By the end of that decade, it was operating its first train and throughout the 1980s it expanded the rail system across the city.
The emphasis on transit-oriented development is much more recent and stems from the influence of CEO Keith Parker, who before joining the authority led the Charlotte Area Transit System when it expanded its light rail line.
Greater focus on the TOD program also coincided with the recovery of the economy and construction, particularly intown apartments.
“Keith truly wanted to do this once he got here, but then the market began to turn around,” Crocker said.
Parker has assembled a talented transit-oriented development team including Rhein, once a managing director with Invest Atlanta. Rhein also works closely with MARTA’s chief of staff, Rukiya Eaddy, whose background includes work for Atlanta BeltLine Inc., the nonprofit behind the redevelopment of a 22-mile loop of abandoned railroad tracks around the city.
MARTA plans to have five transit-oriented developments underway around its stations in the next two years.
It already has a developer for King Memorial ( Walton Communities LLC) and Avondale ( Columbia Ventures LLC). MARTA wants to name a developer later this summer for its Edgewood Candler Park station.
The next stations slated for transit-oriented project may include Brookhaven, where MARTA is already talking with city officials; Medical Center, a station on the Atlanta Perimeter where new development could include a hotel and more apartments; and Fort McPherson, an Army base that fell victim to the Pentagon base closings. Now, economic development officials believe it can become part of an Atlanta Aerotropolis.
MARTA will host what it calls Development Day June 11, when it plans to unveil its latest transit-oriented projects and introduce the idea of leasing air.
finally! good job Mr. ParkerReport
All of this development would be perfect…Report
whatshisface danieltoro1984 https://twitter.com/FakeMARTA Please expand the rail lines to Woodstock, Kennesaw, Roswell, Alpharetta and you will get a 500% increase in revenue….Report
danieltoro1984 whatshisface danieltoro1984 Definitely, but that’s up to those counties. MARTA tried this proposal before with Gwinnett & Cobb but obviously it was rejected.Report
Leasing-out the development rights at, around and above MARTA stations is definitely a huge step in the right direction for MARTA.
When this approach is maximized there potentially could be tens-of-billions of dollars in revenue for the transit agency.
Wait-to-go, Mr. Parker. Keep up the excellent work!Report
I think it’s quite obvious – expanding/creating new lines. You can’t get to West Midtown, VaHi, or up Peachtree. Quite important for a good part of this city. I actually can’t understand why the development of stations is a priority. People don’t spend a lot of time in train stations – they go there, board, and leave. However, if the lines aren’t going to valuable parts of the city, people aren’t going to be going to stations/taking the trains period.Report
matthewdkingsley Development of stations is a major priority because large-scale high-density mixed-use transit-oriented real estate development at stations generates much additional revenue for transit operations.
Large-scale transit-oriented real estate development at and around stations on transit-owned property generates additional operating revenue from property leases, increased ridership and property taxes…revenue which can be used to improve, upgrade and expand transit service as needed (decreased headways, newer vehicles, more bus and train lines, etc).
…The more development there is at stations (and along transit lines), the higher the amount of revenue that is generated for transit operations…something which comes in handy for a transit agency like MARTA which has suffered from an acute lack of operating revenue in recent years.Report
The Last Democrat in Georgia matthewdkingsley Perhaps the best thing for MARTA is to focus on real estate development and shut down the transit system. They might make money on realestate, but they do not know how to run a transit system.Report
Burroughston Broch The Last Democrat in Georgia matthewdkingsley With MARTA’s historical operational blight (particularly in recent years), that kind of sentiment certainly is understandable (if one is not going to do it right, why do it at all?).
But the fact that MARTA is making very-serious inquiries into developing the space around and above its transit stations as a means to generate additional revenue and make the agency financially self-sustaining (something that should have been done from the start) signals that the long-troubled transit agency is finally headed in the right direction.
Besides, developing property at and around stations on a large scale can be a highly-productive cycle that builds upon itself with transit-owned real estate development generating ridership and revenue which funds improved transit service which generates more traffic to transit-owned real estate development which generates more revenue for transit operations, etc.Report
The Last Democrat in Georgia
We will see whether they develop that sort of expertise, or just continue to bumble.
I would prefer they first develop operational expertise since transportation is supposed to be their core business.Report
Burroughston Broch The Last Democrat in Georgia I agree but technically, this year is the first time in awhile that MARTA is in the black and EXPANDING services.
Secondly, its a catch-22, rail and bus service without density/TODs/clusters around transit centers isn’t sustainable.Report
whatshisface How do you define sustainable? Please name one sizable transit system that survives without taxpayer subsidy.Report
Burroughston Broch whatshisface Sustainable means being able to operate without needing sizable taxpayer subsidies.
Mr. Broch, you are correct that no major North American transit systems operate without sizable subsidies.
But what MARTA is in the very-early stages of attempting to do has never been done on a large scale in North America.
What MARTA is in the very-early stages of doing is attempting operate using the surprisingly little-used, but wildly-successful Hong Kong model.
The Hong Kong model is a transit-operating model that depends completely upon revenue from large-scale transit-oriented real estate development along transit lines to fund all capital and operating costs while still operating at a very-substantial profit.
Hong Kong’s transit agency MTR, basically operates as one large real estate development corporation that uses transit to shuttle traffic to its numerous revenue-generating commercial developments.
Hong Kong has utilized this real estate development funding approach to great effect with its transit agency having total assets of over $250 BILLION (…compared to MARTA’s current total assets of about -$2 billion).
Hong Kong’s MTR not only makes massive profits off of its large-scale real estate development at and around it transit stations…
…Hong Kong’s MTR also makes extremely-healthy profits from the fares that it collects as Hong Kong’s MTR has a farebox recovery ratio of 186%…meaning that Hong Kong’s MTR covers 186% of its operating costs with its farebox revenues.
(…Compare Hong Kong’s farebox recovery ratio of 186% to MARTA’s current farebox recovery ratio of about 30%.)Report
Burroughston Broch The Last Democrat in Georgia A traditionally-troubled transit agency like MARTA can (and should) develop operational expertise at the same time while cultivating critically-important new streams of revenue from transit-oriented real estate development along transit lines.
Besides, just the fact that MARTA is inquiring about developing the property it owns at, around and above its stations signifies an exceptional level of competence that most likely has never been seen around the long-troubled transit agency.
MARTA also appears to be making these types of moves to generate large amounts of revenue from its property holdings as a way of setting the stage for future expansion into areas beyond its current service area of Fulton and DeKalb counties.Report
Burroughston Broch whatshisface it’s called ‘public’ transit for a reason- its a public utility/good kinda public schools and public libraries etc. all of which is subsidize in some form by the public aka taxes (property, sales, hotel-motel). Their goal is different from a ‘free market’ since you know, they try to provide service for all regardless of income and other socio-economic factors
Back to your first point, ‘sustainability’ can be interpreted in many ways…I’m basically saying that transit can’t rely on subsidies alone- they’ll also need people to pay fares and use the system BUT the only way to make it attractive/convenient for people to use transit is to have development (shopping, homes, schools, work, TODs etc) close to transit. Hope that cleared it up for yaReport
whatshisface MARTA will have to make great improvements on its collection ratio to make any progress. The City of Atlanta/Fulton/DeKalb politicians have told the populace for decades that cheap transit fares are an entitlement. No progress will be made until MARTA institutes a distance-based fare system.Report
Agreed to an extant. How would you impose a distance-based fare equitably? What about those who drive into town and use transit to complete their trips? Kinda seems little regressive to me. Shouldn’t punish those who maybe living further away because of socio-economic factors…after all, Atlanta’s biggest issue is ACCESSIBILITY to from home to good jobs and quality schools.Report
whatshisface The farther you ride, the more you pay. Distance-based fares are standard for most major transit systems – e.g. BART, DC Metro, London Underground.
Transit is not an entitlement for those with low incomes.Report
Sorta technically true but the you have systems like CTA and MTA that doesn’t charge a ‘distance-based rate.’ The point is MARTA’s system is not even at the point where they can charge a distance based fare. MARTA’s transit system is only 48 miles compared with BART’s 104 mile. This ‘distance-based’ fare you speak of is dynamic pricing that will increase/decrease for ALL riders based on congestion not how far you are traveling (except crossing the Transbay Tube or traveling to/from the airport eg. toll tax)Report
whatshisface I use MARTA a lot, particularly for traveling from Dunwoody to the airport. MARTA saves me 48 miles on my car for each trip – let’s say $24. I would gladly pay more to MARTA, and they are foolish not to charge more.
I am not referring to dynamic pricing at all – what ever gave you that silly idea. I am referring to static pricing, like the London Underground. Look at http://www.london-tubemap.com/images/zoneslayer2.gifReport
Burroughston Broch whatshisface I kinda get your logic but the point still stand that MARTA, in it’s current form, doesn’t have the density or TODs to truly make it a viable commute option for most people.
Secondly, that map doesn’t really display much information about fares or pricing. Yes, London Tube uses a ‘zonal fare system’ to calculate fares when one uses a SINGLE-TRIP to travel from one zone to another HOWEVER, majority of regular transit commuters will purchase a monthly/weekly pass- in London’s case, it’s an Oyster Card- hence a FLAT rate regardless of distance traveled.
If you’re willing to pay more for using MARTA then, by all means, donate that extra money you would’ve spent to the cause. Probably get a small tax-credit and help out society as a whole.Report
whatshisface
Distance-based fares are not a form of punishment for longer-distance riders.
Distance-based fares are just simply a way to generate enough revenue so as to be able to adequately-fund longer-distance service.
(…Longer-distance trips like from the North Springs MARTA Station to the Airport and vice-versa where there currently is not enough revenue to operate Red Line trains south of Lindbergh after 9pm….Collecting more revenue from longer-distance trips would allow trains on the Red Line to continue operating south of Lindbergh until the end of the night.)
Distance-based fares are also a way to encourage increased use of a transit system for shorter-distance trips.
In a distance-based fare structure of roughly $0.10-$0.40 per-mile ($0.10/mile for special groups, $0.20/mile for most regular trips and $0.40/mile for express and/or first-class service), fares would drop for shorter-distance rides…
…That’s because with fares of $0.20/mile, one would have to ride 12.5 miles before paying the current flat-rate fare of $2.50 per-trip.
(…For special groups who would only have fares of $0.10 per-mile (economically-disadvantaged riders, children, senior citizens, students, people with disabilities, etc) one would have to ride 25 miles before paying the current flat-rate fare of $2.50 per-trip.)
A distance-based fare structure would be a vast improvement over the current flat-rate fare structure of $2.50 per-trip that discourages shorter-distance trips and collects too-little revenue from longer-distance trips.
– See more at: https://saportareport.com/blog/2014/06/marta-looks-to-invite-developers-to-build-on-top-of-rail-stations/comment-page-1/#comment-53841Report
The Last Democrat in Georgia whatshisface Yes, I agree with what you’re saying IF the majority of commuters are paying for single-trip fares every time they’re traveling. In Atlanta, this would be ideal for the folks who only use MARTA on gamedays or special one-off events. HOWEVER, majority of commuters will purchase a weekly or monthly pass, hence a FLAT rate regardless of distance traveled.Report
whatshisface Burroughston Broch {{{“I kinda get your logic but the point still stand that MARTA, in it’s current form, doesn’t have the density or TODs to truly make it a viable commute option for most people.”}}}
But despite the lack of density and TODs along transit lines, MARTA is still the 12th-busiest transit system in North America, 8th-busiest transit system in the U.S. and a relatively very-heavily used mode of transportation with an average of about 221,000 boardings per-day on its heavy rail system.
The addition of revenue-generating TODs along transit lines will only work to encourage increased ridership over the long-run….Increased ridership which in-turn will be further encouraged with the implementation of a distance-based fare structure which encourages more use of the system for shorter-distance trips between the increased Transit-Oriented Development along lines.
{{{“If you’re willing to pay more for using MARTA then, by all means, donate that extra money you would’ve spent to the MARTA cause. You’ll get a small tax-credit and help out society as a whole.”}}}
In addition to real estate development (revenue-generating TODs along transit lines) and a distance-based fare structure, donations (in the form of the aggressive sales of sponsorships of all sizes to everyone from large corporations to individuals) are also an excellent way for MARTA to increase revenue.
– See more at: https://saportareport.com/blog/2014/06/marta-looks-to-invite-developers-to-build-on-top-of-rail-stations/comment-page-1/#comment-53841Report
The Last Democrat in Georgia whatshisface Burroughston Broch Not arguing against MARTA being the 12th-busiest transit system in North America etc.
Again, my points are:
a. For MARTA to be a truly viable and sustainable option, they along with the Atlanta region, will need to focus on TODs and building density around transit, as well as expanding services from where people can afford to live to where jobs, public resources and quality schools are. Its an accessibility issue, which has been well documented by many researchers (http://www.nytimes.com/2013/07/22/business/in-climbing-income-ladder-location-matters.html?_r=1&😉
b. People are little confused by what a ‘distance-based fare’ really entails….applying a ‘distance-based fare’ will mostly only affect those who are using the transit system for a single, one-off trip (only using MARTA when there’s Braves games is a good example). MAJORITY of regular MARTA users purchase weekly or monthly passes which is a FLAT fare regardless of distance traveledReport
whatshisface The Last Democrat in Georgia That is an excellent point that many commuters will purchase weekly and/or monthly passes.
But don’t forget that Atlanta has a very-robust convention/corporate travel/tourism industry (…the Georgia World Congress Center is the 4th-largest convention center in the U.S.)…
…So many tourists, conventioneers, visitors and out-of-town users will be paying for single-trip fares when they’re using MARTA.
Though your point that many commuters will be utilizing weekly and/or monthly passes as frequent riders underscores the pressing need for the to aggressively sell more large and small sponsorships….Sponsorships in which sponsors will be rewarded with unlimited use of the system for varying time lengths according to the amount of money they agree to donate.
MARTA also needs to be much more assertive (if not aggressive) in its sales of weekly and monthly passes over the long-term as the system uses revenues from real estate development to improve, upgrade and expand over the long term.Report