Transportation and Mixed Use

Mixed-use developments also can leverage the existing transportation infrastructure, or be designed to maximize peoples’ access to public transportation. In places like New York City, Washington, D.C., and Chicago—vertical urban landscapes with well-established transit systems—transit-oriented development has been essential to effective land use. “It’s the concept of living where you work,” notes Scott Tankenoff, managing partner of Minneapolis-based Hillcrest Development, LLLP. “Let’s get people living and working and shopping more in the same area and eliminate the use of the single car as much as we reasonably can.”

However, in the Twin Cities—a horizontal, car-dependent community with comparatively limited public transportation—transit-oriented development is a largely untested approach. “Our development community—we’re relatively new players in this mixed-use field,” says Jeff Patterson, director of corporate solutions for the Minneapolis office of Colliers International, a commercial real estate consulting firm. Patterson explains that local lending institutions haven’t yet figured out the intricacies of underwriting mixed-use projects, which sometimes include plans from an assortment of construction companies or builders with expertise in specific uses, be they retail, residential, office, entertainment, or hotel. “And if it’s a mixed-use project that involves three different kinds of land use—office, retail, and residential, for instance—you have to do three different market studies to determine if the mix is right and if it’s going to be accepted in the marketplace,” Patterson says. “It adds a lot of complexity to a project that the Twin Cities market is just getting its arms around.”

Ready or Not

Experts say that this education process will accelerate dramatically in the coming years, as lawmakers and city planners search for solutions to ease ever-thickening congestion on Twin Cities highways. In its 2003 Urban Mobility Report, the Texas Transportation Institute reported that peak-time travelers in the Twin Cities waste, on average, 43 hours a year on clogged highways. In 1993, that number was 30 hours.

In June 2004, the state took a first step in reducing automobile dependency when, after years of impassioned political debate, the Hiawatha LRT went live. In its first year of operation, the Hiawatha line carried 7.8 million people, 58 percent more riders than expected, according to data from the Metropolitan Council. In fact, by October 2005, the council reports, ridership had surpassed projections for 2020. Development in nearby areas also has perked up since the line was installed. According to the Metropolitan Council, more than 12,000 new housing units will be in progress or occupied by 2008. Before the line was constructed, city planners estimated that the LRT would spark 7,000 new housing units by 2020.

“The success of Hiawatha has just blown away the debate about whether transit was worth investing in at all. Now the debate is focused more on what kind of transit is best for us,” says Robert Johns, director of the Center for Transportation Studies at the University of Minnesota.