On April 7, 2022, the Washington Metropolitan Area Transit Authority (Metro) announced its first ever Strategic Plan for Joint Development, a detailed roadmap to increase private redevelopment opportunities on Metro-owned land, with an emphasis on affordable and workforce housing.
Besides revitalizing the areas around the metro stations, the strategy hopes to revitalize Metro ridership by increasing the percentage of residents who live next to a metro station. This, in turn, contributes to restoring our global climate, by cutting carbon emissions.
The bold 10-year initiative establishes a goal to execute 20 joint development agreements by 2032, strengthening coordination with local jurisdictional partners and streamlining processes for private development partners.
Metro’s joint development program is critical to its mission to provide safe, reliable, and affordable transportation and delivers valuable benefits for Metro and the region by:
- Increasing Metro ridership from new residents, workers, and visitors;
- Generating new revenue from fares and real estate proceeds that support Metro’s operations;
- Fostering sustainable regional growth and competitiveness by creating new housing and business opportunities near transit; and,
- Generating new state and local taxes on formerly undeveloped and tax-exempt land.
“Transit-oriented developments not only support Metro operationally, but they also bring important stakeholders together to reinvigorate the region,” said Executive Vice President and Chief Financial Officer Dennis Anosike. “This strategic plan lays out a very clear roadmap that details our future priorities. I’m excited to see these transformations take shape and place accessibility to transit at the forefront of urban planning.”
Since 1975, Metro has delivered more joint development projects than any other transit authority in the country, completing 55 buildings at 30 stations across the region.
These projects, which include iconic buildings at stations such as Gallery Place, Farragut North, Metro Center, Bethesda, and Ballston, have created 17 million square feet of mixed-use development that generates 5 million additional Metro trips annually and $194 million in annual local and state taxes.
Metro’s remaining joint development portfolio includes future opportunities at 40 stations. Development of these sites could multiply the program’s impact to date by producing:
- 31 million square feet of new development;
- 26,000 new housing units;
- 9 million new annual Metro trips and $40 million in annual Metro fare revenue;
- $50 million in annual lease revenue to Metro; and
- $340 million in new annual tax revenue to local and state jurisdictions.
“This Strategic Plan represents an important first step in realizing the full potential of Metro’s portfolio of real estate across the region,” said Liz Price, Metro’s vice president of real estate. “As we emerge from the pandemic, joint development presents a real win-win opportunity for Metro and the region.”
Metro’s 10-year initiative to execute 20 new joint development agreements reflects an increased pace of activity.
To achieve this ambitious objective, Metro established four strategies:
- Partner with local jurisdictions – Delivering high-quality joint development that maximizes density and community benefits will require partnerships with local jurisdictions;
- Right-size transit facilities – Given the extraordinary cost of replacing existing transit facilities such as commuter parking or bus facilities, evaluating the expected future need at each station and responding to new commuting and teleworking trends to right-size facilities will minimize costs while maximizing land-use efficiencies;
- Increase development readiness – Strategic investments prior to making sites available for development will address potential project challenges that maximize development value to Metro and its jurisdictional partners; and
- Minimize implementation risks – Improving internal processes to minimize implementation risks will increase private developer interest and reduce the duration of the joint development solicitation process, from issuance to contract execution.
Central to these strategies is the recognition that Metro cannot achieve its joint development goals alone. It will require support, co-investment, and close coordination with local jurisdictional partners who also benefit from the tax revenue that joint development produces.
The majority of Metro’s remaining joint development sites have existing transit facilities that must be relocated or replaced. They also have varied real estate market conditions and zoning allowances that impact their development potential. Addressing these challenges in partnership with jurisdictions will be critical to unlocking the full potential of Metro’s real estate portfolio.
The plan also establishes a prioritization schedule based on the development potential, infrastructure needs, and market readiness of each station and a timeline for planning and solicitation activities while recognizing that specific conditions may change over the next 10 years and that Metro can adjust station priorities accordingly.
Image courtesy of WMATA.