...so an organization builds a transit corridor - the stations, with attached multi-use developments, with retail, amenities, and residential. The organization retains ownership of the property and is now able to profit from the demand it created for itself with increased foot traffic. The profit will be from leasing real estate and increased property values. Local government gets increased revenue from more property tax, sales tax, etc... which can be used to pay for the initial investment.
Another example is the following from Hong Kong:
How Transit Systems Can Make Money
Recently Jay Walder, former head of New York’s subway system, the MTA, left his job to take over Hong Kong’s transit system, the MTR. For Walder the move means a lot more than one different letter on his business card: it means a salary raise from $350,000 to about a million bucks.
The reason Hong Kong’s metro system can afford to pay its chief so much more than New York’s is that, unlike the MTA, which faces a $10 billion shortfall, the MTR actually makes money. Lots of money. Like 8.7 billion Hong Kong dollars lots, according to Bloomberg, which is more than a billion U.S. dollars a year.
So what accounts for the enormous difference in financial success between the two systems? Cue Alex Marshall of the Regional Plan Association:
The answer is that Hong Kong’s MTR doesn’t let private developers be the only ones that perch next to its stations. It builds its homes, offices and stores. In short, MTR acts as a real estate developer and business company, as well as a train operator. It owns, among other things, 12 shopping malls built around its stations. These properties and businesses produce substantial cash, which keep the transit agency as a whole in the black.
Whereas New York City sells the real estate near its subway lines, Hong Kong develops it — creating what Cap’n Transit calls “an integrated product” of property and access. In other words, MTR not only runs Hong Kong’s trains but it also owns a lot of the properties these trains serve. This side business generates a huge amount of revenue that can be recycled back into the system itself.
Marshall seems to think American cities in general — and New York in particular — can get in on the action. Still such a course would require a “huge change in our thinking,” Marshall recently told WNYC, since Americans typically cringe at the idea of government owning potentially private property. Then again, they also cringe at fare hikes and service cuts.
By Eric Jaffe
This is an EXCELLENT opportunity for Translink, the Metro Vancouver transit authority to get a positive revenue stream and self finance future transit projects, instead of relying so heavily on taxpayers' dollars.
Current opportunities include property that Translink already owns, such as the many Park-and-Ride lots in Metro Vancouver. A prime example for current development, with a transit-hub already there, would be Scott Road station and its attached Park-and-Ride. King-George station also has an attached Park and ride, that can build off the current Infinity developments there. The Bridgeport station is also another opportunity.
A local example of this model is the current development happening at New Westminster Station. Plaza 88, being called an urban transit village, is a great starting point if Translink can get in on the game. The development integrates condos, shopping, restaurants, and other amenities with direct access to a transit-hub. It's a Transit-Hub Centric Community.
"It's very un-mall like. We tried to treat it as a station, as opposed to a shopping mall. We believe that this adds to the inclusiveness within New Westminster ..."
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