Developing TOD in Sacramento

After two decades of discussions of transit-oriented development (TOD), Sacramento Regional Transit (RT) is moving forward on implementation, building residential and mixed-use projects stations on its South, Folsom and Northeast Lines. The transition from planning to implementation is due to a coming together of several factors:

  1. A growing market for in-fill housing in the Sacramento region.
  2. A transit agency board and general manager emphasizing implementation.
  3. The financial participation of the city and county governments.
  4. The programming of transit and planning funds to TOD projects by the local Council of Governments.

Emerging TOD Projects in Sacramento
The six TOD projects in various stages of pre-construction are at Royal Oaks, Power Inn, Butterfield, Cemo Circle, 65th Street and Sunrise. A brief summary of each follows, with an identification of certain common key characteristics.

1. Royal Oaks
The Royals Oaks station is near downtown Sacramento, on the Northeast line. RT owned several parcels totaling 2.8 acres adjacent to the station. It packaged these parcels and issued an RFP to the development community. New Faze Development, a local Sacramento-based firm headquartered near the station, was chosen. New Faze is moving rapidly through pre-construction. It expects to get entitlements by early 2008, and complete construction by early 2010. The project design, shown in figure 1, consists of two buildings and 107 residential units, with 17,000 square feet of ground floor retail.

2. Power Inn
The Power Inn station, on the Folsom line, has one of the largest land parcels owned by RT, 13 acres. Power Inn has been the object of study for two decades, but serious development progress started in 2005, with an RFP for development. Costa Pacific/Trammel Crow (Costa Pacific) was chosen in March 2006. The current $67 million plan, shown in figure 2, calls for 286 residential units, 27,000 square feet of retail and 30,000 square feet in commercial office space.

3. Butterfield
The Butterfield station, also on the Folsom line, has a 3.4-acre adjacent surface parking lot. In early 2006, Costa Pacific was the successful bidder in RT’s development competition. Costa Pacific’s current plan is for 109 residential units and 15,000 square feet of retail. Costa Pacific expects to have entitlements in early 2008 and construction completed in 2010.

4. Cemo Circle
The Cemo Circle TOD is in pre-construction at a 7.9-acre site owned by RT, adjacent to a future bus rapid transit (BRT) station. The TOD was proposed by an adjacent landowner, and combines 150 residential units with a pedestrian bridge and an adjacent 75-space park-and-ride.

5. 65th Street
At the 65th Street station, near the California State University campus, RT is working with an adjacent landowner for a TOD on an assembled 4-acre site. The 2.1-acre RT parcel currently serves as a bus drop-off, which will need to be relocated. The city redevelopment agency and local city councilmember have been active in tying the TOD into a broader transit village project for neighborhood revitalization.

6. Sunrise
At the Sunrise station, a station on the Folsom line, RT owns a 5.5-acre parcel being used as a park-and-ride. A local housing developer recently presented a plan to RT for a 200 unit development with neighborhood-serving retail, which RT staff is seeking to advance.

These six TODs differ in densities, designs and target markets. However, they share certain common characteristics that are elements in defining a TOD:

  1. Sensitivity to the scale of the surrounding neighborhoods.
    Each of these TODs is higher than the density of the surrounding, primarily single-family neighborhoods. However, they are scaled to fit into the neighborhoods, with highest densities closer to the station, and tapering to lower densities further from the station. At several of the stations — Butterfield, Power Inn and Royal Oaks — the RT station site is in a predominantly commercial/industrial area, some distance from existing residential neighborhoods.

  2. Bringing new amenities to the surrounding neighborhoods and communities.
    In each of these projects, the TOD development is meant to provide new housing options for the region and new amenities to the nearby neighborhoods. At Cemo Circle, the developer is preserving a nearby creek and building the pedestrian bridge. At Royal Oaks, a new plaza and new retail options are being introduced. At 65th Street, neighborhood-serving retail is being introduced, and at Power Inn, the developer is considering a series of access improvements (new streets, a tunnel connecting Folsom Blvd. to the station) to link the surrounding areas and commuters to the station.

  3. Primarily market-rate, with some affordable units.
    All of the RT projects are primarily market-rate. The percentage of affordable units at each site is still being determined, but envisioned in the range of 10 to 15 percent.

  4. Attempt to help create a station area neighborhood, not only a new residential project.
    RT envisions the TODs not as individual projects, but as part of a process of neighborhood building at each of the stations. To that end, each residential project is placed in the context of other neighborhood elements (open space/public space, neighborhood serving stores, additional public services) and/or to linking the station to nearby neighborhoods. At Butterfield, the residential development not only will bring neighborhood-serving retail, but also RT is considering a pedestrian bridge over busy Folsom Boulevard to link to the single-family neighborhoods on the south. At Royal Oaks, the development includes new office and retail elements, as well as the residential project, and includes the plaza and walkway for neighborhood events.
Factors Leading to Implementation

1. The emerging market for infill housing of some density.
The Sacramento region is a highly auto-oriented region, with a very dispersed housing stock, at less than 5 units per acre. Single-family housing remains the main housing product in development in the fast-growing area suburbs of Elk Grove and Folsom. However, the past five years has seen the emergence of residential projects in planning and even in development of in-fill housing of densities over 20 units per acre.

The most dramatic of these projects have been in downtown Sacramento, where at least two developers believe there is a market for high-rise living. A 39-story tower (Aura Condominiums) and two 53-story towers (Saca Towers) have received entitlements. Though both of these projects recently have stalled with financing problems, city officials continue to express belief that they eventually will be built, and that high-rise downtown living will find a market in the region.

More relevant to the TODs are the three- to four-story projects, in the range of 25 to 40 units per acre, that are being built just east of the state capitol, such as those being built on the L Street corridor, between 18th and 21st. These rentals and condominiums are proving financially viable.

How extensive the market is today and in the next few years in Sacramento for multi-family in-fill housing remains to be determined. However, the number of developers coming to RT with development proposals for station sites (three developers have approached RT in the past few months on the Florin station site) indicates that, at least among the development community, there is belief in a growing niche market for in-fill, rail station-based housing in the region.

2. A transit agency board and general manager emphasizing implementation.
RT, along with the other governmental entitles in the region, has been interested in TODs for more than two decades. During this period, several planning studies and charrettes have been held on station sites. However, it is only in the past three years that projects have moved into the development and pre-construction stages, and the new general manager and board have been a main impetus.

The general manager, Beverly Scott, who came to RT in October 2002, made it clear from her start that she wanted to see projects built, not discussed further. Scott meets regularly with real estate staff on each project’s progress, and has encouraged staff to drop developers who do not move forward on their projects. She has contacted the city and county planning and economic development officials to make each TOD a project partnership.

The board too has emphasized implementation, and individual board members are involved in the planning and advocacy of specific projects in their cities.

3. Financial participation of the city and county governments.
Both the city and county governments have recognized the link of land use and transit as a priority for land development. To that end, they have undertaken station area plans for stations at Swanston, Florin, 65th Street and Meadowview.

RT recently contacted the city and county regarding financial partnerships for station implementation, in line with the partnerships undertaken in recent years for nearly all of the TODs in the nearby Bay Area. The Bay Area TODs, at stations on the Bay Area Rapid Transit District (BART), Santa Clara Valley Transportation Authority (VTA) and the Peninsula CalTrain lines, have near uniformly included the financial partnership of the local municipality. At the Richmond BART station, for example, the $75 million Richmond Transit Village has been in development over the past 12 years, and includes a mix of public transportation funds, as well as $3.5 million in local redevelopment funds for the Nevin Walkway and plaza. At the Dublin/Pleasanton Transit Center and TOD, the county of Alameda and city of Dublin have contributed county-owned land to subsidize the BART garage and infrastructure, waived the city of Dublin traffic impact fees and contributed county-owned land for an interim parking lot.

The designs of the partnerships for each of the Sacramento TODs are likely to take different forms at different stations. What is important is that the partnership be tailored for the individual TOD project, and reflect the benefits in transit ridership, neighborhood revitalization and neighborhood building.

4. Role of SACOG in directing planning and transit funds to TODs, particularly through the region’s Community Design Program.
In 2001, the Sacramento Area Council of Governments (SACOG) embarked on the most extensive planning effort ever undertaken in the region, an effort known as The Blueprint, to consider the region’s growth patterns through 2050. The Blueprint planning involved 22 cities, more than 5,000 area residents and took three years. It involved sophisticated modeling of vehicle miles traveled, air quality and land use. In the end, the planners set out four development scenarios, of which the SACOG board chose the development scenario that emphasized the focusing of new residential development at transit stations and on transportation corridors.

SACOG is backing up the Blueprint guidelines with funding. SACOG plays a main role in the region’s distribution of transportation funds, and the SACOG board has committed $500 million over a 20-year period for implementation of the Blueprint.

The Future of TODs in the Sacramento Region
The TOD program in the Sacramento region is likely to proceed sporadically over the next decade, reflecting the fluctuation of the region’s housing market and the delays that inevitably arise with in-fill projects.

The financial partnerships with the city and county are likely to be key to the pace of progress on each, as is the financial participation of SACOG. In the end, a project will only go forward as they make financial sense for the developer. Given that TODs are usually in former or existing commercial/industrial areas, and involve complex interactions of transit operation needs with the neighborhood-building elements, TODs will usually need the financial partnership of one or more public entities. That is the way it has been in nearly all other TODs in Northern California, as noted above.

But TODs are the future of the region. Low-density single-family housing will, for many years in the future, be the prevalent housing form in the Sacramento region, given the sizable housing of single-family houses that exists. However, TODs will emerge as a niche housing market, and one that achieves the TOD vision in Sacramento elsewhere: increased housing options, increased use of transit and more walkable neighborhoods and communities.

Fred Arnold is director of real estate for Sacramento Regional Transit, James Robinson is real estate analyst, TOD for Sacramento Regional Transit and Michael Bernick is counsel for Sedgwick, Detert, Moran & Arnold LLP.