Congestion, fuel costs and environmental concerns are driving local leaders to promote transit-oriented developments as alternatives to continued highway expansion. The benefits of these developments are touted to be reduced traffic, better use of space, improved quality of life and new retail opportunities.

Historically, transit systems dominated travel in cities with high enough population and employment numbers to support subways or commuter rail. Development naturally clustered near these transit stations.

Today, transit-oriented developments typically sit on the edge of population centers. These newer transit stations connect suburban areas and neighborhoods to employment centers by vans, buses and light rail. Multi-use transit developments meet the needs of local governments seeking to combat grid-lock and urban sprawl as well as residents desiring better urban design and livability.


Transit- Oriented Development

Transit-oriented development (TOD) is usually a public/private partnership that combines transportation facilities with mixed-use activities. A successful partnership allows the partners to share risks, costs and rewards.

Typically, local government or a transit agency supplies the transportation infrastructure and often provides public amenities such as parking, recreational facilities and government services. The private sector’s role is the design and development of a variety of mixed-uses including retail, commercial and residential projects. Such developments can generate jobs and increase ridership, tax revenues and real estate values.


Retail Challenges in Transit Hubs

To optimize its success, the transit hub development should become an attraction beyond the transportation services provided there. Transit hubs offer a steady stream of possible customers that support convenience and service-oriented businesses such as coffee shops, quick food and gift shops. But these retailers alone will not make a hub a shopping destination.

The reality is that transit travelers may strengthen a retail location, but the location must be viable without transit. The most important consideration for retail development around the station is the analysis of the demographics and psychographics of the trade area to determine market support. Retail development surrounding the hub must reflect the volume and type of customers that a retailer needs to succeed.

Parking around the transit station is important for transit ridership and critical for the retail development. Insufficient parking in an automobile-dependent community will result in fewer transit riders and lost retail opportunities. The challenge is to provide adequate parking while allocating sufficient land for adjacent developments.

Developments around a transit station can offer attractive retail opportunities, but success will be achieved by retailers responding to market forces, not transit forces.