The Benefits: Stronger Communities

Community Benefits – Rail Station Revitalization as More Than Nostalgia

By Jonathan Moore Walker and Elizabeth Anne Marsh
Transportation Economics & Management Systems, Inc.

Rail station redevelopment projects across the country and throughout the Midwest have captured the collective imagination of transportation and urban planners, architects, financiers, historic preservationists, private citizens, and many others. Articles appearing in industry publications of all sorts have begun a simultaneous retelling of the tale of passenger rail in America, from the glory days before World War II through its gradual decline as Americans began leaving city centers in droves.

That de-centralization of American life has led, in recent years, to a growing disillusionment with congested highways and lengthy commutes, to a general dissatisfaction with suburban sprawl, and ultimately to a renewed interest — and investment — in the cultural and architectural richness of Downtown.

A variety of factors is fueling the revitalization of America's urban centers, but a central component is affordable, convenient, and reliable transportation options. High-speed passenger rail serves as a key catalyst for this wide-reaching (and often grassroots) movement to transform America's neglected urban centers and to restore historic rail stations to their former luster.

In order for this renewal effort to have lasting meaning, it must develop beyond mere nostalgia. It must be built on sound economic principles and promise real financial returns. (If nostalgia alone were sufficient, there would be a beautiful old movie house on every main street in America.) Revitalization of urban centers and rail stations must show significant economic benefits.

Here's the good news. Research and analysis reveals this encouraging fact: successful development of multi-modal transportation centers, which are well-located and encourage other joint-use occupancies, creates significant economic development potential. Rail stations in their hey-day were hives of activity. Support services surrounded them: food and lodging, freight and warehousing, and local transit services. As passenger transportation services were phased out, these essential services also disappeared. The return of affordable, convenient, reliable transportation to urban centers opens up an assortment of commercial opportunities: retail business in the form of restaurants, stores, and book/news shops; residential real estate; office space; meeting space; and more.

Being able to accurately forecast the potential economic impact of rail station redevelopment will be key for many Midwest cities and towns anticipating the return of passenger rail service. Economic Rent Theory makes it possible to develop estimates for passenger volumes, employment, household income, and property values based on the details of the transportation service and specific station development plans, as well as other factors.

The results are consistent: the financial and economic benefits of station revitalization are real.

Passenger volumes at small-city (population greater than 50,000 and less than 250,000) stations are likely to increase between 10 and 80 percent. In a medium-size city (with population of 250,000 to one million) volumes may increase between 10 and 70 percent. In large cities with population above one million, the range is between 5 and 30 percent. Improved train service and intermodal connections will generate the higher percentages.
Depending on the population density, employment is estimated to increase by 20 to 600 jobs in small cities, by 300 to 900 jobs in medium cities, and by 425 to 1,500 jobs in large cities.
Slow the growth of auto congestion and its related energy and pollution impacts.
Average household income is anticipated to increase between $50 and $500 in small cities, $160 and $1,750 in medium cities, and between $235 and $2,600 in large cities.
Property values in and around redeveloped stations may increase from $9 million to $70 million for a small city, $20 million to $140 million for a medium city, and $30 million to $240 million for a large city station.

By bringing trains, regional buses, taxis, inter-city buses, airport shuttles, and other modes of transportation together at a facility, a critical mass of activity is created, which generates economic development.

With the frequencies and activity created by high-speed rail, communities throughout the Midwest have the opportunity to increase economic activity, especially in smart growth areas in the urban downtowns. The multi-modal transportation center creates "trip generation" which is critical to regional economic activity and development. In the same way that a retail department store anchors a shopping center and creates the "trips" that stimulate the other shops in a mall, a well-located multi-modal transportation center stimulates retail, office, and residential development on the surrounding parcels.

As part of the Midwest Regional Rail Initiative (MWRRI), Transportation Economics & Management Systems, Inc. (TEMS) has evaluated two communities in the Midwest following implementation of multi-modal transportation centers. The experiences of Champaign-Urbana, Illinois and Lafayette, Indiana validate TEMS' "Economic Rents" model and the joint development potential of multi-modal transportation centers.

In Champaign-Urbana, the community recently opened a new 60,000-sq. ft. multi-modal transportation center in the center of town (pictured below), with Greyhound, Amtrak, taxis, local buses, and airport shuttles. In addition, the station accommodates other joint use occupancies including office space, retail space, a restaurant, and community meeting rooms.

With an initial investment of $8 million, the community created an economic engine, which has already generated over $30 million in joint development projects in the surrounding area. The model estimates a joint development potential of $70 million. Champaign-Urbana is nearly halfway there, even without the rail frequencies and expansion of feeder buses anticipated for the MWRRI system.

In Lafayette, Indiana, the community has had similar results from their integrated multi-modal transportation center (pictured below). With an initial investment of $8 million, Lafayette built a multi-modal transportation center that combines Greyhound, Amtrak, local buses, and taxis in one facility. In addition, the facility provides office space, which is leased to a local bank, as well as several community agencies.

This project involved combining the old station with new construction in order to achieve a unique result for the community. The surrounding area is bustling with economic development. Over $70 million in private/public development projects have been identified and many completed in the relatively short time this station has been in operation. Given that the model estimates $70 million in joint development, Lafayette promises to far outpace the model when frequencies increase as part of the MWRRI.

The best news of all is that station revitalization benefits extend beyond the potential for new jobs, higher personal income, and higher property values. The less tangible aspects of these projects are worthy of nostalgia: social and cultural factors like safety, security, and quality of life in our neighborhoods, and a renewed sense of community cohesiveness and civilized interaction among neighbors.