Real estate view: Downtown development won’t die with light rail

Posted on December 19, 2011

An end to light rail in Detroit also ends the idea of transit-oriented development but not development as a whole, real estate experts say.

The redevelopment of historic buildings up and down Woodward Avenue near the central business district is likely to continue, but not at the density level that mass transit would bring.

“Investors and developers need the assurance of a permanent station and a permanent rail before they pull the trigger on a larger project,” said Robert Gibbs, managing principal of Birmingham-based Gibbs Planning Group. “Rubber wheels are too unpredictable, and it’s easy to worry that some day the routes will stop.”

Also at risk is the ability to attract the 20-something crowd of new employees looking for an urban environment.

“The people in their 20s brag about not owning a car — it’s the new status symbol,” said Gibbs, who also teaches a course at Harvard University on urban retail. “To attract that group, you need to have the ability to give that to them.”

Bus systems don’t bring the same effect, Gibbs said.

“Those systems tend to be planned out by people who drive SUVs and golf carts,” he said — “the folks who have never been on a light-rail line in their life.”

One way to stimulate retail with a bus system could be to build large bus stations that can act as an anchor for retail and residential development, said Jim Bieri, president and CEO of Detroit-based Stokas- Bieri Real Estate, which specializes in retail.

“Maybe there is a way to bring a special zoning designation to the areas surrounding permanent bus shelters in a way that can build density, attract retail and residential development,” he said.

Bieri expects that there still will be ways to redevelop Woodward Avenue and downtown without a fixed rail line.

“Is it a death sentence for Detroit not to have this? No,” Bieri said, “even though it is depressing at the moment.”

Another thing to keep in mind: Detroit’s development is contingent on large-scale projects unrelated to light rail, said Robin Boyle, a professor and chairman of the department of urban studies and planning at Wayne State University.

Those projects include a potential new arena for the Detroit Red Wings, the current investment in theDetroit Medical Center campus and future investment by Henry Ford Health System in the New Center area.

“In the short term, it’s easy to have a fairly visceral reaction to the transit-oriented development model,” Boyle said. “It needs to be digested, however, and we all need to take a breath. And we need to remember that there are things other than transit that will effect the Woodward corridor.”

By Daniel Duggan, Crain’s Detroit