HomeMy WebLinkAboutWS Item 01 - Commuter Rail StudyCommuter Rail Study
Terry L. Clower
Bernard L Weinstein
Clower,Terry L. 1 ,
11-)'ernard L. Weinstein, Ph.D.
Dallas, Texas
ICMVWM 1 • IZi]d
Executive Summary ............................................................................. ii
Introduction....................................................................................... I
Background....................................................................................... 2
The Advantages of Having Rail Access ......................................................4
Transit Oriented Development in Historic Downtown Grapevine ........................8
The Cost of the Proposed Sales Tax Increase for Grapevine Residents ................18
Additional Transportation -Related Findings ...............................................20
Conclusions.................................................................................... 21
Executive Summary
The following reports our evaluation of the developmental impacts associated with the
proposed transit/commuter rail system connecting Fort Worth to the City of Grapevine
and DFW International Airport along the Cotton Belt rail route. Our evaluation includes
a general assessment of the role that transit/commuter rail has on community and
economic development in a mature suburb and projects the value of potential ancillary
development around the proposed rail station. In addition, we estimate the cost to local
residents of the proposed sales tax rate increase of three-eighths of one percent to fund
Grapevine's share of development and operating expenses for the transit rail service. To
enhance our understanding of the potential impacts of the proposed transit rail project, we
conducted several key informant interviews with representatives of Grapevine retailers,
hoteliers, and restaurateurs. Our findings include:
Based on the professional literature and our extensive work with Dallas Area
Rapid Transit, transit, oriented development is becoming a widely used tool for
redeveloping historic downtown districts in urban and suburban communities.
Employers in Grapevine do not feel that the proposed commuter rail system along
the Cotton Belt route will have much impact on their ability to attract or retain
employees — at least for the next several years.
Increasing road congestion due to regional population growth will increase the
importance of the presence of transit rail services in assessing the desirability of any
community for residential and business locations. In the future, the presence of a
range of transportation options will be a key factor in judging the livability of a
community.
• Based on the example of downtown Plano's transit village, we expect that land
values near the proposed rail station will increase at least 10 to 11 percent. We also
estimate that the station will attract $50 million to $100 million in new development
or renovation of existing properties.
With careful planning and rezoning, the proposed rail station could be the anchor
for a redevelopment corridor linking downtown Grapevine with the highly visible and
successful Grapevine Mills Mall retail trade area. This potential synergy is expanded
with the inclusion of Gaylord Texan Resort and direct transit links to DFW airport.
This would substantially enhance Grapevine's attractiveness for conventions and
increase the overall drawing power of retailers located in the city.
• Because of Grapevine's success in attracting retailers that market way beyond the
city limits, the tax burden for paying the city's share of the commuter rail
development and operations will be largely borne by non-residents.
• The proposed three-eighths of one percent tax rate increase is not expected to
have a negative impact on local retailers' ability to attract consumers.
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• The proposed tax rate increase will cost the average Grapevine resident only 93¢
per month — making the proposed transit rail service and station development an
affordable, effective investment in the city's future.
• The success of transit oriented developments depends on many factors. Design is
one of those factors. A kiss -and -ride design for the station offering relatively little
parking will enhance the potential for ancillary development. However, parking is
already a significant challenge to downtown retailers, so careful consideration must
be given to this issue.
• Many of our key informants feel that retail and hospitality market potential could
be immediately enhanced by the creation of a public-private shuttle operation to
conveniently connect the city's dispersed retail trade areas and provide a convenient
link to DFW Airport for visitor/shoppers.
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In the following we evaluate the developmental impacts associated with the
proposed transit/commuter rail system connecting Fort Worth to the City of Grapevine
and DFW International Airport along the Cotton Belt rail route. Our evaluation includes
a general assessment of the role that transit/commuter rail has on community and
economic development in a mature suburb and projects the potential value of ancillary
development around the proposed rail station in downtown Grapevine. In addition, the
City of Grapevine is considering increasing the local sales tax rate by three-eighths of one
percent to support the construction and operation of the proposed transit rail line and
station. We offer an assessment of the incidence (who will bear the burden of the new
tax) of this proposed tax increase.
Our analysis draws upon a relatively broad literature of formal and informal
studies on the role of rail transportation, transit and commuter, as well as original
research. Our original research includes structured interviews with key informants
representing the hospitality and retail trade sectors of the Grapevine economy. We chose
to focus on hospitality and retail trade due to their relative dependence on having access
to customers across the Metroplex and beyond. Moreover, these sectors of the economy
are among the most sensitive to changes in local sales tax rates and therefore serve as a
benchmark for our analysis of the potential business impacts of the proposed sales tax
rate increase. Our participants included representatives of area hotels/resorts, dining
establishments, retailers, and historic -downtown businesses.
In the following sections we offer a short background on the proposed project and
general discussion of the advantages to Grapevine from having rail services to Ft. Worth
i
1
and (eventually) to Dallas County. This is followed by a more detailed discussion of
potential spin-off benefits from the development of a downtown Grapevine rail station.
We will finish with our fiscal analysis of the proposed sales tax rate increase and offer
some conclusions for consideration by City of Grapevine leaders.
Background
Based on information provided by the City of Grapevine and the Tarrant County
Transportation Authority (The T), the North Central Texas Council of Government's
(NCTCOG) 2004 regional rail initiative included using an existing freight rail route,
commonly known as the Cotton Belt line, as the basis of a new commuter rail service.
The Cotton Belt route runs from southwest of Fort Worth through downtown Fort Worth
and the Stockyards, passing through northeast Tarrant County, downtown Grapevine, and
across DFW International Airport property before continuing northeast through several
northern Dallas suburbs towards Greenville, Texas. The proposed transit plan includes
building a spur connecting DFW Airport to the Cotton Belt route. The Cotton Belt route
has been designated as the W-2 Regional Rail Corridor. However, to go along with
public awareness, we will refer to the project as the Cotton Belt throughout this report.
Though not finalized, planning for this new service has proceeded under development
assumptions of "commuter" rail service as opposed to "light" rail service.
The most meaningful operating difference between commuter and light rail
services is the number of stops along a given length of route line, which relates to the
speed of service and the total weight of the train. Light rail services are so -named
because their equipment weight is lighter allowing trains to reach operating speed and
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slow much more quickly, which facilitates relatively short distances between stations. In
large part, equipment weight is lowered because light rail cars are typically powered by
electric motors requiring overhead or "third -rail" power (the train does not have to carry
fuel). Initial projections for equipment servicing the proposed Cotton Belt corridor are
smaller than the double-decker cars used for the Trinity Express service, but slightly
larger than the light rail trains in the Dallas Area Rapid Transit (DART) system, and are
propelled by diesel engines.
It is interesting to note that some developers are already contacting officials with
The T to lobby for a Cotton Belt route station near property they control. Current
planning is based largely on service that will originate in southwest Fort Worth and end
at DFW International Airport with the first phase of the development including at least
downtown Fort Worth to downtown Grapevine with a small number of intervening stops.
However, a number of cities, including Addison, Richardson, and others, are working on
plans for extending the proposed service through their communities.
Given that the Cotton Belt will run on existing rail lines and that using diesel -
powered trains means that no overhead electric infrastructure needs to be built, the
commuter rail system could be up and running in as little as 5 years. This compares very
favorably to getting an extension of the DART rail system, which could take 20 years or
more to be realized due to existing expansion commitments and limitations on available
funding.
Importantly, there are existing federal funding programs that would help pay for
the development of the Cotton Belt commuter rail system. Still, participating cities will
need to help fund project development and provide on-going operating subsidies. The
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City of Grapevine can meet its share of these costs and obligations with a three-eighths
cent increase in the local sales tax, which will be addressed later in this report.
The Advantages of Having Rail Access
In this section we broadly examine the advantages, and potential disadvantages,
of having commuter rail service from Grapevine to Fort Worth, DFW Airport, and
(eventually) Dallas County. Throughout this report, we will make special note when our
observations have been specifically informed by the key informant interviews.
Based on current zoning, the City of Grapevine is approaching effective build out
for residential properties with implications for having little or no future population
growth. However, the NCTCOG projects that total employment growth in the city is
likely to be about 25% by the year 2030. This forecast takes into account Grapevine's
approach to development, which has been to manage growth effectively, while not
hindering local economic development opportunities. By 2030, it is estimated that more
than 85,000 persons will have jobs in the City of Grapevine, up from about 63,000 in
2005. We actually feel this estimate is very conservative and that there is potential for
Grapevine to see even higher growth while still managing the pace of growth allowing
the city to provide effective services for existing and new businesses, their patrons, and
city residents. Conversely, the Dallas -Fort Worth Metropolitan Area will continue to see
substantial population growth with current estimates suggesting that by the year 2020,
more than 7 million people will call the Metroplex home. Even with billions of dollars in
new roadway infrastructure, traffic congestion in our region will become more
n
problematic reflecting transportation problems historically associated with older
northeastern US cities.
As traffic congestion worsens and commuting time lengthens', those communities
with alternative transportation modes available will become more desirable locations for
businesses and people. In a study being released in the January 2006 issue of the journal
Transportation, Robert Armstrong and Daniel Rodriquez found, when controlling for
other market factors, that communities in eastern Massachusetts with commuter rail
services see housing values between 9.6% and 10.1% higher than communities not
serviced by commuter rail. Moreover, Armstrong and Rodriquez found an additional
10% higher valuation when residences are located within one-half mile from a commuter
rail station. This is similar to the findings of our previous research into the property
value impacts of being located near a DART light rail station where the greatest positive
impacts is enjoyed by owners of office, multifamily residential, and single family
residential properties. However, there can be potential negative impacts that should be
considered.
Armstrong and Rodriquez report that residential properties located along a
commuter rail corridor, but more than 1 mile away from a commuter rail station, can see
negative impacts on property values that diminishes quickly as distance increases to the
rail right-of-way. In an analysis earlier this year, we found that a selection of residential
properties located along the Cotton Belt route in Dallas County, with existing freight
trains passing close by, do not have measurably lower property values compared with
similar housing (age, size, location) not adjacent to the rail right-of-way. These
conflicting findings suggest that the impacts are probably contextual based on current
track usage (number of freight trains passing daily), time of day of operations, and the
length of time of noise (how long is the train). For each of these factors, commuter rail
operations would tend to mitigate the negative impacts on the properties located along the
rail corridor.
It has been said by opponents of developing transit rail services that the presence
of the transportation service will draw criminals to prey on local residents.2 This opinion
is not supported by research. Researchers examining this issue have found that transit
rail stations do not increase crime in surrounding neighborhoods. Crime, to the extent it
exists around rail transit stations, reflects the crime rates of the neighborhood where they
are located. We also discussed this issue with law enforcement experts who observed
that being on a train with limited ingress and egress is not a desirable transportation
choice for those wishing to commit crimes.
Commuter rail runs much less frequently than light rail, is operated mostly during
the day and into evening (no late night train whistles), and the number of cars in any
given train will be small so noise and at -grade road crossing interruptions are minimized.
Perhaps most importantly, the Cotton Belt rail route was there long before there were
houses along much of its route. Individual families chose to build or buy houses in close
proximity to an operating rail route
Our panel of key informants were unanimous in their perception of the value of
commuter rail for transporting non -Grapevine residents to work in Grapevine — no impact
' According to Arbitron.com, travel time to work in this region increased by 14% between 1990 and 2000
with the Census Bureau reporting continuing increases through 2004 based on data in the American
Community Survey.
2 Some supporters see this as a potential negative side effect as well.
on
whatsoever in the near future. As one participant phrased it, bringing hospitality workers
who live across the Metroplex (for some employers) would require a massive public
transportation network. The Dallas -Fort Worth area is working towards that goal, but is
many years away from having the critical mass of infrastructure needed to dramatically
affect labor pool accessibility in Grapevine. We agree with that assessment.
There has been much written in the planning and economic development literature
about transit -oriented development — property development and redevelopment occurring
in close proximity to transit rail stations, commuter and light rail. We will cover this
issue in more detail later in this report, but for now we will stress that there are numerous
examples of cities strategically using transit rail stations as catalysts for property
development. For brief descriptions of examples from Oregon, Colorado, California,
Maryland, and DART, we review Gordon Wright's article in the January 2002 edition of
Building Design & Construction in the following section of this report.
The remaining component of potential broad-based market impacts of having
commuter rail in Grapevine is to consider the city's ability to draw consumers to
Grapevine's extensive array of hospitality service providers. Our interview participants
reported that having commuter rail access, particularly one tied to the Stockyards,
downtown Fort Worth, and DFW International Airport, will be a great boon to their
businesses. As one respondent eloquently phrased it: The city can help bring folks to
Grapevine, it's our job to get them to spend money while they're here.
Based on our review of the relevant literature, several years of our own research
on the impacts of the DART light rail system, and the opinions of our key informants, we
support the view that having commuter rail will be a benefit to Grapevine. While
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commuter rail will not, by itself, solve current and looming traffic congestion in the
Grapevine area, it is clear to us that closer -in suburban areas that want to remain
competitive as quality places to live will offer residents a variety of transportation
options. In addition, the convenience of having connections to conference venues
(downtown Fort Worth, Gaylord Texan), entertainment venues (Stockyards, Fort Worth
cultural. district), and transportation (DFW airport), will enhance Grapevine's already
impressive ability to compete for conventioneer spending. Retailers will gain in their
ability to effectively attract potential buyers to Grapevine outlets by having improved
accessibility. Finally, while there may be some individual properties that could
potentially be negatively impacted by proximity to the rail right-of-way, the
overwhelmingly larger impact on property values in Grapevine, residential and
commercial, will likely be very positive.
The historic downtown district of Grapevine has been a successful example of
Main Street redevelopment efforts pointed to by communities across the nation.
Downtown Grapevine boasts boutique retail establishments, a variety of dining options,
and commercial enterprises provided a steady stream of tenants for property owners.
However, there is more that can be done to promote development and redevelopment in
the city's traditional downtown and spark a transition to more desirable land uses on
nearby properties. Current plans for historic downtown Grapevine include mixed-use3
and residential properties, much needed parking facilities, and new retail space.
3 Mixed-use developments are typically characterized by 2 to 4 story buildings with retail, office, and other
commercial activities on the first floor with high-density residential in the upper floors.
There are three purposes for these redevelopment efforts. First, mixed use, retail,
and commercial enterprises broaden the tax base and can generate substantial new tax
revenues, which funds high quality public services while keeping the overall tax burden
low for Grapevine residents. Second, the presence of a vital, vibrant downtown with
small shops creates an atmosphere — a life style — that is very appealing to Grapevine
residents. Residents of Grapevine enjoy the ability to walk along a sidewalk and window
shop, or the choice of mall -style shopping experience all within a few minutes drive from
home. Third, while Grapefest certainly brings many local, regional, and national tourists
to Grapevine, restored business venues along Main Street have become a regional
shopping and dining destination attracting non-resident spending that provides jobs for
Grapevine residents and contributes to local tax collections. In the remainder of this
section, we will explore how adding a commuter rail station in historic downtown
Grapevine would help achieve the three purposes of downtown development efforts.
Looking to the experiences of other communities, including other Metroplex
suburban cities, offers indicators of the impact that transit rail stations can have on the
type and volume of development surrounding them. The type of redevelopment centered
on rail transit station depends on two factors, existing land uses and community
preferences. In Gordon Wright's review, he notes that Englewood, Colorado wanted to
redevelop a 1960s era shopping mall and parking garage into a new city center.
Designers used the transit station, which opened in 2000, as the gateway to a new
complex including big -box retailers, an 80,000 square -foot retail/office building, a civic
center, city administrative offices, and 430 apartment units.
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In Hollywood, California a metro station that opened in 2001 was incorporated
into a 1.2 million square -foot development including the Kodak Theater. Wright quotes
developer TrizecHahn's president: "The ability to deliver more than 9 million visitors a
year to Hollywood was a vital component of our development." While we do not expect
Grapevine to host the Academy Awards ceremonies, we offer this example to suggest
that a transit rail station can help the city bring new visitor spending to Grapevine.
The San Jose, California suburb Mountain View uses zoning variances to attract
development in its transit overlay zone area. Projects locating in the overlay zone can
increase their floor area (FAR) building ratio by 40 percent (higher density development).
Surrounding developments are oriented to the transit station creating a campus -like
complex of office, retail, and personal service facilities.
Portland, Oregon uses the location of its expanding transit system as a planning
mechanism influencing the location of development on relatively undeveloped or under-
developed property. One example cited in Wright's article is Orenco Station, which
includes 68 acres of for -sale housing and a town center mixed use development
comprised of 21,000 square feet of shops on the first floor with residential units on upper
floors, and an adjacent 50 -acre office/commercial development area. Another Portland
example includes the creation of a commercial development at the entrance to Portland
International Airport. The Bechtel Corporation contributed about 22 percent of the cost
to extend the rail line (total cost about $125 million) in exchange for exclusive
development rights. It is expected that the development project will include over $400
million in property investment over 15 years. This example highlights the importance
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that Grapevine should place on taking advantage of development opportunities created by
the DFW Airport connection of the planned rail line.
While these examples are enlightening, Grapevine's decision makers can look at
several local examples of the potential development that can center on transit rail stations.
In the fall of this year, we completed a report for DART where we reviewed announced
development and redevelopment projects centered on DART rail stations since 1999. In.
all, more than $3.3 billion in new property investment has been made or is being made
around DART stations. Of the stations that have attracted at least $100 million in new or
planned developments since 1999, five are located in suburban communities. Of
particular note are Las Colinas ($420 million in investment), Downtown Plano ($260
million), Carrollton ($200 million), and Galatyn Park (Richardson, $141 million). It is
important to note that development often precedes the opening of a transit station,
sometimes by several years. We saw this phenomenon with the Downtown Plano station.
For developers, it is the announcement of the specific site for the transit station that
sparks activity.
More than any other station, DART's Downtown Plano station offers the best
local example of what could happen in Grapevine. Before the announcement of the
transit rail station, downtown Plano buildings had slipped over many years into a group
of underused, decrepit, and decaying structures. The presence of a light rail station was
seen as an opportunity to redevelop the historic area of Plano and balance overall
development patterns in the city. As noted in city planning documents from 1999:
Transit villages integrate residential and commercial uses in a compact,
pedestrian oriented environment surrounding a transit station. A good mix
of commercial, residential and civic uses serving a larger market than just
i local residents increases the area's role as a community activity center and
11
reinforces the use of the transit system. The city hopes to use the
convenience and attractiveness of light rail access to leverage additional
residential development in the downtown, thus spurring demand for retail,
restaurant and other uses. (See www.planoplanning.org/amicus/text.html)
Using a new urbanism design and an architectural style consistent with historic
mercantile buildings, the area has successfully transformed into a vibrant residential,
retail, office, and entertainment area with about 460 residential units and 30,000 square -
feet of retail space in the new Eastside Village project. Other space has been
rehabilitated or renovated to increase overall retail and dining options in the area. In
addition, a deal struck with the Plano Independent School District allowed the conversion
of a 1930s era gymnasium into a performing arts venue. In keeping with the tradition
that a picture is worth a thousand words, Figure 1 shows a before -and -after image of a
part of the Plano transit village. Figures 2 through 4 on the following page offer
additional images of downtown Plano after transit oriented redevelopment occurred.
Figure l:
Source: North Central Texas Council of Governments
Figure 2:
Plano Transit Village Mixed Use Development
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Source: City of Plano
Figure 3:
Performing Arts Venue (Gymnasium)
Source: City of Plano
Figure 4:
Plano Transit Village Park Area
Source: City of Plano
In descriptions of its transit village development plans, the City of Plano notes
that it possessed several assets that contribute to success:
It is the original commercial area that served Plano before its transition
from small farming community to a suburban employment center, and
therefore has a wealth of historic commercial buildings. It is pedestrian
oriented, but has ample public parking to serve a larger number of
businesses and residents. It has an urban park that serves as the primary
open space and play area for surrounding neighborhoods. (See
www.planoplanning.org/amicus/text.html)
The City of Grapevine also possesses most of these assets. In fact, Grapevine is
much more ahead of the game than Plano was in 1999. Grapevine has already seen a
renaissance in its historic commercial district. Figure 5 offers a collage of photos from
Grapevine and Plano. The similarities are striking. Grapevine, unlike most communities
undertaking transit oriented development projects, has already demonstrated the capacity,
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political support, and market savvy to support substantial investment in historic
downtown redevelopment. The advantage that transit rail offers to Grapevine is spurring
additional investment in historic downtown that is justified by the market potential of
enhanced accessibility. A high-quality development scenario based around a transit
station will enhance and stabilize the city's tax base in a sustainable manner.
Figure 5:
Grapevine and Plano Downtown Areas
Grapevine Grapevine Plano Plano Plano
Based on our analysis of existing property values in the downtown historic district
of Grapevine and the Plano transit village, we anticipate that the addition of a commuter
rail station would increase land values in the immediate area by at least 10 to 11 percent.
In terms of the development of improvements on this land in the form of new buildings
and renovated existing structures will add more than $50 to 100 million in new property
values to Grapevine's tax roles.4
There are other lessons offered by examining transit oriented development and
redevelopment in Plano. The first are transit service design issues. It is not coincidental
that the downtown Plano DART rail station is a kiss -and -ride facility, meaning that there
4 Our range of potential new investment is large due to our taking a conservative approach. The actual
value of any development will depend on many market, zoning, and other factors. The pace of
development will also be greatly affected by the planning and cooperation among the city, land owners, and
developers.
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is little parking available adjacent to the station. This station is designed for riders to be
dropped off or walk to the station. The next stop north is the Parker Road station, which
is a park and ride facility. Park and ride facilities require substantial adjacent parking.
Research has clearly shown diminishing inverse effect between property values and the
distance to a transit station with the greatest impacts occurring within one-quarter to one-
half mile from the station (the closer the property the greater the impact on business
levels and property values). Large parking lots consume valuable land and can lower the
overall economic and fiscal impacts of transit oriented developments. The Parker Road
Station has seen comparatively little development in the area immediately surrounding
the rail station. We urge the Grapevine City Council to consider a kiss -and -ride design to
maximize the amount of developable property immediately adjacent to the Cotton Belt
station.
Some of our key informants took the opportunity of our interviews to express on-
going concerns about parking in historic downtown. Addressing parking for transit rail
passengers, while alleviating existing parking problems, will require careful thought and
consideration. Among the issues to be addressed are not having commuters take up retail
parking spaces and making sure that the airport connection does not encourage travelers
to use downtown parking as an alternative to airport parking. One suggestion we
received was to have fairly high parking fees that would be waived if purchases were
made in retail shops. Other suggestions include time-limited parking with a maximum of
a few hours and having more convenient parking locations (first floor of a parking garage
for example) for retail customers versus commuters. There are obviously competing
interests for the limited supply of parking that will be available. We suggest that city
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planners, architects, downtown merchants, transit officials, and developers work together
to address parking issues.
The final lesson we will draw from Plano is incorporating the planning efforts for
transit oriented development in the area immediately around the transit station to a
broader area, thereby extending the gains from the transit oriented development and
redevelopment. Figure 6 below shows the future land use plan (FLUP) for the downtown
Plano transit village and surrounding areas. Note that there are a variety of land uses
including existing "standard" suburban residential areas, high-density downtown
residences, office, government, and mixed use development. Also note that light
industrial properties remain on the land use plan. We see the planning for the historic
Grapevine rail station as being a great beginning to reassessing current zoning in the old
commercial district of Grapevine and nearby industrial areas.
Figure 6:
Plano Transit Village Area Future Land Use Plan
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FUTURE LAND USE PATTEF16
s l of piano j
We believe that new development around the proposed transit rail station can
serve as a catalyst to redevelop a commercial/retail corridor that will link historic
downtown to the retail and hospitality district anchored by Grapevine Mills Mall. While
we encourage city officials to realize the importance of maintaining a strong industrial
land use presence in Grapevine and taking full advantage of the city's proximity to DFW
Airport and being at the hub of important transportation corridors for economic
development purposes, some of the older commercial districts would now serve a higher
and better use as office/retail/commercial properties. Though it may not represent a large
percentage increase, the mixed use residential properties in a transit oriented development
will add much needed residential opportunities in the City of Grapevine.
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One specific comment received from our key informants suggested that careful
consideration be given to where offices will be allowed in the transit village or other
mixed use developments. This concern is based on the logical observation that most
office tenants keep normal business hours — closed around 5 p.m. and on weekends. It is
felt, and we concur, that more than a few office spaces can "kill" the vibrancy of a retail
area. If shoppers have to pass several closed office spaces to get to a retailer open for
business on Saturday or on a pleasant spring evening, they could come away with an
impression that not much is happening. For reference, see downtown Dallas for the past
quarter century.
The incidence of the proposed sales tax increase will be largely borne by non-
residents. For example, Grapevine Mills Mall represents a large proportion of total retail
sales occurring in the City of Grapevine, yet only about one-third of one percent (0.003)
of Grapevine Mills customers reside in the City of Grapevine. It is estimated that
between 13 and 15 percent of downtown retailer's customers are locals. Restaurateurs
tell us that the vast majority of their business comes from outside of Grapevine.
Importantly, every one of our key informants feel that the proposed tax rate
increase will have no impact on their ability to attract customers to their establishments.
They would be concerned if the local tax rate were to be higher than local competitors.
Since most municipalities in the area are charging the maximum allowable local sales tax
rate, the proposed increase will not cause Grapevine to lose competitive position (see
Table 1).
Table l:
Sales Tax Rates by Municipality
Carrollton
8.25
%
7
Colle ille
8.25
%
ell
8.25
%Co
Dallas
8.25
%
Euless
8.25
%
Fort Worth
8.25
%
Grapevine current
7.25
%
Grapevine proposed
7.625%
Irving
8.25
%
Lewisville
8.00
%
Southlake
8.25
%
Includes state. municipal. and transit district (where annlicable) tax ra
Source: Texas Comptroller
es.
However, the increased sales tax rate will impact residents of Grapevine. To
assess that impact, we utilized data from the U.S. Census Bureau, the Bureau of Labor
Statistics of the U.S. Department of Labor, AGS Data Services, and other sources to
calculate an anticipated per -capita (per person) cost of the increased sales tax. Based on
projected average household income for 2005 in the City of Grapevine and the average
number of persons per household, we estimate that Grapevine residents spend about
$2,972 per person in the city on taxable retail goods and services per year or about $248
per month. The proposed tax rate increase will cost each resident of Grapevine an
Additional Transportation -Related Findings
5 We have used a conservative estimate that about one-third of taxable purchases by Grapevine residents
stay in the city. That proportion is likely to be substantially lower, but we would prefer to overestimate the
new tax burden than underestimate it.
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One of the advantages of using key informant interviews as a means of gathering
information for a research project is that the participants have the opportunity to bring
new ideas to the research that were not a part of the original scope of work. The
hoteliers, retailers, and restaurateurs we spoke with believe that the presence of transit
rail services will be a substantial, even great, benefit to downtown retailers with the
potential for spillover benefits to other businesses located in Grapevine. This is
especially true with having an airport station included in the rail service plans. These
discussions led to information sharing about moving patrons around Grapevine once they
arrive at the station. Retailers and hospitality purveyors would like there to be a shuttle
service connecting downtown to the mall area. Gaylord Texas currently offers a shuttle
service that connects their resort to downtown, the mall, and Bass Pro Shops. However,
it is felt that a public-private partnership between the city and local businesses could be
formed to operate a shuttle service.
The suggested shuttle service would connect all of the city's trade areas and
preferably would include the airport. It was reported to us that a taxi ride from DFW
airport to the mall area of Grapevine routinely costs $20 — each way! Several of our
interview participants feel that immediate action should be taken to consider the
development of a shuttle service within Grapevine funded through a partnership of the
city and its interested businesses. We agree that a shuttle service, especially one with the
ability to include the airport, could foster enhanced visitor spending. A visitor could park
in one part of town and go shopping in historic downtown, have lunch at Cozymel's, visit
the mall, and go to the gift shop at the Gaylord Texan without having to drive to each
destination.
Conclusions
Transit oriented development is becoming a reliable approach to redeveloping
historic downtown districts for urban and suburban communities. Given its success to
date, the City of Grapevine has the ability to effectively design and manage a quality
development plan for a transit rail station. Across the country and in the Metroplex,
transit oriented development including mixed use residential, retail, office, and
government offices are successfully attracting new residents and visitor spending to host
communities.
Employers in Grapevine do not feel that the proposed commuter rail system along
the Cotton Belt route will have much impact on their ability to attract or retain employees
— at least for the next several years. However, commuter rail would likely be used by
Grapevine residents as an alternative to increasingly congested highways. It is the
certainty of increasing road congestion in a growing metropolitan area that will increase
the importance of the presence of transit rail in assessing the desirability of any
community for residential and business locations in the future.
Based on the example of downtown Plano's transit village, we expect that land
values near the proposed rail station will increase at least 10 to 11 percent. We also
estimate that the station will attract $50 million to $100 million in new development or
renovation of existing properties. Growth begets growth, so with careful planning and
rezoning, the proposed rail station could be the anchor for a redevelopment corridor
linking downtown Grapevine with the highly visible and successful Grapevine Mills Mall
retail trade area. This potential synergy is expanded with the inclusion of Gaylord Texan
Resort and direct transit links to DFW airport. Many of our key informants feel that this
lox
potential retail and hospitality market synergy could be immediately enhanced by the
creation of a public-private shuttle operation to conveniently connect the city's dispersed
retail trade areas.
Because of Grapevine's success in attracting retailers that market way beyond the
city limits, the tax burden for paying the city's share of the commuter rail development
and operations will be largely borne by non-residents. The proposed three-eighths of one
percent tax rate increase is not expected to have a negative impact on local retailers'
ability to attract non -local business. Importantly, the proposed tax rate increase will cost
the average Grapevine resident only 930 per month — making the proposed transit rail
service and station development an affordable, effective investment in the city's future.
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