The Metro-North Railroad's Hudson Line leaves the Croton–Harmon station in Croton-on-Hudson, N.Y. Seth Wenig/AP

The largest transit agency in the U.S. is building a mixed-use development next to a commuter rail station north of Manhattan.

Like many towns across America, Harrison, New York is desperate to revitalize its downtown. The same old grocery stores and nail salons have made up most of the retail landscape for years. “If you look at a picture from the 1950s and ’60s, it looks the same today as it did then, with the same places,” says Ron Belmont, the town supervisor. “There’s not much variety.”

The big magnet to the Westchester County town is its Metro-North Railroad commuter rail station, which provides a 45-minute connection to midtown Manhattan. Although Harrison has had a steady population increase since 2010, Belmont is thinking about the future: namely, a younger generation that prefers the bustle of urban life to the quiet of suburbia. The community needs more to make them stick around, he believes. “What I’m trying to do is attract Millennials, so eventually they want to buy here in Harrison,” he said.

That is what inspired Harrison’s Halstead Avenue project, a $76.8 million mixed-use real estate development built in collaboration between the Metropolitan Transportation Authority (MTA), which oversees the Metro-North, and developer AvalonBay Communities. It is the first time ever that the Metro-North will sell a parcel of its land for transit-oriented development (TOD); in this case: 143 apartments, 27,000 square feet of retail space, two pedestrian plazas, and a 598-space parking garage, most of which is reserved for the public and commuters.

A rendering of Harrison’s future. (Avalon Bay)

After a seven-year approval process, construction kicked off in June on the site, which is currently a park-and-ride on the Connecticut-bound side of the Harrison train station. “This would be a great shot in the arm for the downtown area,” said Belmont.

The New York MTA, the largest transit agency in the U.S., is becoming more familiar with this type of construction. The Hudson Yards project—where the MTA decked over its train yards, and sold the rights to developers for $1 billion to build an entire Manhattan neighborhood on top, with a new subway line extension beneath—is perhaps the largest TOD project in American history. At One Vanderbilt Avenue, an office building being constructed across from Grand Central Terminal, developer fees to the MTA will pay for interior improvements throughout the huge hub.

But the Harrison project marks a new direction for the cash-strapped MTA, which is on the hunt for new revenue: Decades of underinvestment and recent ridership declines have left the MTA with a projected $433 million budget shortfall, a gap that a recession could worsen. Meanwhile, critics agree that Manhattan’s soon-to-come congestion pricing scheme cannot alone cover the cost of the subway system’s badly needed overhaul. Capturing revenues from transit-oriented development on MTA-owned lots could help. So the agency is eyeing projects in suburban communities outside of Manhattan, with the hopes that the prospect of economic development will prod smaller towns to plot their futures near its train stations.

Janno Lieber, the MTA’s chief development officer, outlined what he saw as the benefits of the Harrison project. Walkable downtowns can attract new residents and investment to suburban communities, he said, and they allow for compact growth without sprawling amounts of parking. “We want to continue to grow the base for mass-transit commuting,” he said. “It’s good for the environment, and for having a sustainable pattern of development, to have housing and mixed use develop in tandem and close by mass transit.”

Compared to, say, Hudson Yards, Harrison’s 3.28-acre project is a modest one: three four-story buildings, lined with pedestrian promenades connecting Halstead Avenue to the MetroNorth station. The bottom floors will be retail, and the planned parking garage—which nearly doubles the existing number of spots—will include space for car-share vehicles like ZipCar, bicycle parking, and electric vehicle charging stations. The developer has said publicly that it’ll conserve water and energy during construction and utilize sustainable materials and designs. It’s expected to be completed in two phases, by 2021 and 2022.

Unusually, MTA didn’t receive any money in exchange for its valuable plot of parking. Instead, AvalonBay agreed to construct the parking garage, which would have cost the agency $45 million. The idea is that with the new development, riders will come: Metro-North expects to see between 160 and 175 new daily customers, as well as additional recurring revenue from visitors and $100,000 in new annual revenue from the parking spaces. The project is also expected to drive up land value—one house across the street from a slightly bigger TOD project near the Long Island Rail Road station in Wyandanch, Long Island, has broken the town’s residential selling records.

For over 30 years, Belmont said the community has demanded a project of this kind. “We’ve been looking forward for it to start,” he said. “Now everybody asks, ‘When is it going to finish?’”

Right now, more than half of suburban Metro-North commuters drive to the station and park, a May presentation to the MTA board stated. Getting more riders to live within walking distance by encouraging TOD is “the best means to accommodate future suburban growth,” Lieber and Robert Paley, the MTA’s head of transit-oriented development, said in that presentation. Going forward, the agency has targeted at least eight parking lots in Westchester and Long Island with potential for development; in some, talks are already underway.

But there are hurdles. For one, the MTA doesn’t control much of the land around its commuter rail stations, Lieber said; most lots where construction would occur are municipally owned. That leaves the agency in a position where it can encourage projects, but not directly facilitate them. And not all towns are willing to give up parking spots for luxury apartment units. Harrison—which pushed to rezone a central business district with primarily one- and two-story residences into a transit-oriented, four-story mixed-use district—is unique in that sense.

But Lieber is hopeful that others will follow Harrison’s lead. “Communities are recognizing that if we don’t do a little multi-family development, we don’t get young people,” he said. “And we don’t get our seniors a place when they want to get out of the house, but want to stay in their community. So this finds a really meaningful niche in the life-cycle planning for these communities.”

Transit agencies in Europe and Asia are much more likely use development as a revenue tool much more commonly than their U.S. counterparts. David King, a professor at Arizona State University who has studied transit-oriented development, said that this is largely due to the fragmented (and car-centric) nature of land and transit planning, capital investment and operation in the United States. For example, as a state-regulated public authority, with a variety of funding pots for capital and operating costs, the MTA has to comply with home rule for a housing project.

This stands in contrast to agencies outside the U.S. that have been given more room and resources from their respective governments to work experimentally. For example, the Hong Kong MTR essentially owns and can sell development rights along its routes. The agency thus functions as a high-value property portfolio across the city, and takes in billions of dollars in profit from these properties each year. Transport for London can capture rising land-values on new condos and offices near emerging stations to help fund new projects, such as Crossrail. And Paris is redeveloping land around its transit stations to help pay for 125 miles of new Metro lines in its populated suburbs.

Such TOD projects are becoming more attractive in the U.S., thanks to limited federal dollars for public transit, a national housing shortage, and the urgent need to reduce vehicle emissions. King cited a California bill passed last October that will give BART the authority to build thousands of new units. He welcomed the Harrison project as a step forward: “It’s good for the MTA to get into the development business like this.” Still, the agency needs to do more to truly define “transit-oriented.” Even though the development replaces old parking lots, the Harrison project is still saturated with vehicle spots, and could do little to get people out of cars. “This is a TOD in name; we’ll see if it is in practice,” King said.

Mitchell Moss, the director of the Rudin Center for Transportation Policy & Management at NYU Wagner, says that the majority of suburban TOD happening nationwide is along light rail, in places like Mesa, Arizona, and Charlotte, North Carolina. Crystal City outside Washington D.C., the future home of Amazon’s HQ2, was a result of Metro expansion in the 1970s, he said, while Boston’s MBTA has been actively expanding its footprint further into the suburbs. This kind of rail-themed TOD will become inevitable in the greater New York City area. “The downtown of these suburbs is so needing of capital investment,” he said. “They desperately need it for their property tax base.”

And the MTA would appear to have room to grow: The agency claims valuable real estate at stations like Mount Kisco, Southampton, and Bridgehampton, as well as the four new East Bronx Metro-North stations that will run directly into Penn Station. “There are many areas where you could build development, that would be consistent with the existing property, as well as consistent with the need for revenue,” said Moss. (More recently, the Metro-North has pursued retail opportunities at several locations.)

Going forward, TOD projects like this could be easier to get off the ground internally, Lieber said. The MTA board’s approval of a recent “transformation” plan for the entire agency, which was mandated by Albany after the New York City subway system fell into a state of emergency in the summer of 2017, will consolidate the capital planning and real estate divisions into one larger department. That will prioritize the planning required to take on more TOD projects, Lieber said.

Even internal critics of MTA see capturing TOD as the future of the agency. Veronica Vanterpool, a planning consultant and transit advocate (and the sole MTA board member to vote against the 37-page transformation plan), believes that doing otherwise would leave money on the table. During her time as executive director of the Tri-State Transportation Campaign, Vanterpool and her colleagues pushed for TOD projects region-wide, as well as their inclusion of affordable housing there. The Harrison project is notably light on that front: As part of a settlement of a 2009 housing discrimination lawsuit that targeted 31 Westchester County communities, it will only have seven affordable units, out of 143.

It’s a start, and it’s better than a big parking lot. But to make a real different for both the agency’s bottom line and for the communities is serves, Vanterpool argues, MTA will have to push the envelope a little more. “There’s a real role here [for MTA] to play,” she said. “I think that the MTA should be more assertive in saying, ‘This is what’s coming down the pike.’”  

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