CA developers fight weakening of greenhouse gas laws
Meanwhile, the state’s urban developers are looking to create TOD projects along a future 70-mile passenger rail line.
Despite spirited talk in California about a “transportation revolution,” developers there complain that funds for transit-oriented development (TOD) are in short supply. To improve the outlook, smart-growth-oriented developers are forming a new organization — the California Infill Builders Association — which will advocate infill development and seek more plentiful financing.
“Most lenders just don’t get it — the added value of transit,” says Michael Dieden, who chairs the infill builders group and also heads Creative Housing Associates, a Los Angeles firm that developed the well-received Mission
Meridian mixed-use project in South Pasadena.
The infill builders group will attempt to make California friendlier to compact development, including fighting the watering down of climate and land-use laws.
• The association intends to battle for implementation of California Senate Bill 375, which aims to cut greenhouse gas emissions and provide financial incentives for smart growth. The legislation, adopted in September 2008 (see Oct. 2008 New Urban News), mandates that major regional transportation planning agencies draw up plans by September 30, 2010, telling how each region will meet specific greenhouse gas reduction targets. State transportation funds can then be used to support development in infill and transit-oriented locations.
• The association expects to join this fall in a campaign to ”stop the oil companies from hijacking” Assembly Bill 32 — legislation aimed at reducing greenhouse gases to 1990 levels by 2020. Oil companies are pushing to suspend implementation of the law, claiming it will hurt the state’s economy. A referendum is scheduled for November.
• Dieden is working with Ramin Kolahi, principal in Lighthouse Investments LLC, a Los Angeles-based real estate investment and development firm, on preliminary planning to establish a “California TOD Fund,” which would supply capital to developers interested in producing high-quality transit-oriented developments. “We’re talking about a $100 million fund,” Dieden says, contending that this kind of investment should appeal to “new, younger, enlightened capitalist types.”
New rail line in northern California
Some future TOD opportunities will be along a 70-mile passenger rail line that will be put into operation north of San Francisco, running from Larkspur in Marin County to Cloverdale in Sonoma County. Fourteen stations will serve what’s being called the Sonoma Marin Area Rapid Transit, or SMART. Trains will stop in population and job centers such as San Rafael, Novato, Petaluma, Cotati, Rohnert Park, Santa Rosa, Windsor, and Healdsburg.
The line, with a parallel bicycle and pedestrian path, is to begin construction in 2012 on a route that has provided freight service — irregularly — during the past decade. It should start carrying passengers in 2014, and will be the backbone of a system connecting with existing transit systems, such as buses and ferries.
SMART will give travelers an alternative to Highway 101, currently the main transportation route through the area. The bulk of the estimated $590 million cost of SMART is to be paid for by a quarter-cent sales tax increase that Marin and Sonoma voters approved in 2008.
One of the most ambitious TOD projects being planned for that route is New Railroad Square, an approximately $250 million development that Creative Housing Associates, Railroad Square Associates, and Equity Community Builders are jointly preparing for a 5.3-acre brownfield site in Santa Rosa. Dan Solomon of WRT/Solomon E.T.C. in San Francisco produced a concept design for the land, near a former railroad depot, and will design the buildings.
Solomon’s design shows a tall, three-story set of curving buildings forming a crescent around a public plaza next to the tracks. The plaza is to be anchored by retail, a public market, and restaurants. A major sports club operator, Club One, is interested in installing two swimming pools and a full-size basketball court in a 52,000 sq. ft. historic building. Above the club would be 68 affordable housing units.
“It’s taking fragments of an old Del Monte tomato canning facility and giving it a contemporary application,” Dieden says of the project. New Railroad Square is to have about 200 for-sale houses. Because the for-sale housing market is currently depressed, that component will be built in a later phase.
Railroad Square Associates is headed by John Stewart, an affordable housing developer. Equity Community Builders, led by John Clawson, is expert in public finance.
Another important project is expected to be developed near the North Santa Rosa rail stop. In June the SMART Board of Directors decided to place that station close to the Coddingtown Mall, making it likely that the 1960s mall will be diversified into a town center. Geof Syphers of Codding Enterprises, part-owner of the mall, says his firm is working the new urbanist firm Fisher Town Design on plans. The mall site already contains a bus transit hub, post office, library, government offices, and a Whole Foods store in addition to other retail.
Success in S. Pasadena
The market for well-designed and well-placed TOD is promising, if Dieden’s Mission Meridian Village is a fair representative. A Coldwell Banker study in 2009 found that Mission Meridian has continually outperformed competing properties in South Pasadena.
Mission Meridian is a 67-unit project with retail space designed by Moule & Polyzoides for a 1-acre site just a short walk from a Gold Line rail stop. When Mission Meridian opened in 2005, it was priced 3.3 percent lower than competing projects per square foot, in part because “it was a new and untested concept,” according to Dominic and Hem-Young de Fazio of Coldwell Banker’s office in San Marino. After 2005, said the researchers, “Mission Meridian Village surpassed all other resale units in each year” from 2006 to 2009. The margin by which it outperformed other South Pasadena real estate ranged from 12.4 percent in 2006, the first year during which resales took place, to 26 percent in 2009.
Mission Meridian prices climbed from $377 per square foot in 2005 to $416 in 2009, while competing properties dropped from $396 to $330 per square foot, according to Coldwell Banker. Over that period, Mission Meridian’s prices rose 10.35 percent despite the national real estate slump, while other South Pasadena properties fell 16.67 percent.