Wednesday, December 24, 2008

Rail, bikes, IAH, Texas, infrastructure, and more

Sorry for the late post this week - busy holidays, you know. Got some smaller misc items to pass along:
"There's no better thing I've seen in any airport, and I've been everywhere," said Flood, 48. "In this economy, there is nothing better than seeing smiles like this. It shouldn't just be for Christmas."
"Rather than dictating uses for neighbourhoods, as almost all American cities do—apartments here, light industry over there—Mesa’s planners will determine the appearance of buildings. They want to encourage a mixture of uses in one street, and allow for change (so a warehouse might eventually be converted into apartments). They hope that, by putting many of the essentials of life in a small area, people will walk around. Mesa’s scorching summers might be a problem here."

Good thing we don't have that problem here, eh?
"Spending on upkeep of transit systems in older centralized cities such as New York, Washington and Chicago also seems logical. But with few exceptions -- the heavily traveled corridor between downtown Houston and the Texas Medical Center, for instance -- ridership on most new rail systems outside the traditional cities has remained paltry, accounting for barely 1 or 2 percent of all commuters. Such projects are almost absurdly expensive on a per-capita basis."
A big part of the problem, IMHO, is that politicians can't cut ribbons and get big PR for basic maintenance.
  • Texas did well in a recent ranking of The Best State Business Climates:
"While it has been a tough year for state economies across the US, that hasn’t changed the positive views of corporate site selectors when it comes to doing business in North Carolina. The state took the top slot for the fourth straight year in Site Selection magazine’s 2008 Top State Business Climate rankings. North Carolina’s strong education system has been the real difference maker, but other important factors include the state’s aggressive economic development programs and lower cost of living. Other top performers in the rankings include (in rank order): Tennessee, Alabama, Texas and Indiana. A separate poll of business executives produced a slightly different list of the most “business friendly” states with Texas topping that poll, followed by North Carolina and Georgia. When asked to identify the key factors in a favorable business climate, the top three, according to corporate real estate executives, were ease of permitting and licensing, transportation infrastructure, and workforce skills.

Access the article, “Pedal to the Medal,” by Mark Arend (also appears in the November 2008 issue of Site Selection).

Hat tip to Peter.
Not sure how much blogging I'll get done over the holidays. Hope you and yours enjoy them.

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Thursday, December 18, 2008

Doing Urban Corridors the right way, the Houston way

Had a conversation this week with Josh at HRG about the Urban Corridors initiative moving forward at the Houston Planning Commission, which involves encouraging dense development near Metro rail stops. There are debates about the right standards, but the real issue is mandatory vs. incentives. Another big issue is who will pay for needed infrastructure upgrades, like wider sidewalks, landscaping, utility moves (and burials), public space, and street parking (ideally diagonal).

Here's an interesting compromise solution we came up with:
  1. The Planning Commission describes their "ideal" development standard around rail stops.
  2. Landowners near each stop have the option to voluntarily join together to put deed restrictions on their property meeting something close to this standard (although it does not have to be exact, if there are certain "ideals" that don't make sense for their specific case).
  3. If the Planning Commission signs off on the voluntary group deed restrictions (i.e. they're close enough to the ideal), a partial TIRZ gets created around that stop where some (but not all) of the tax increment gets reinvested into infrastructure upgrades around that stop. This is a strong incentive for the landowners to come to a voluntary deed restriction agreement: their value goes up, and that tax increment goes directly into improving the public assets around their land.
This is a win for everybody involved:
  • Property rights are respected and everything stays voluntary.
  • No "one size fits all" standard is forced on everyone. The landowners around each stop have the flexibility to craft specific standards that work in their context.
  • Landowners get improved land values, rents, and adjacent public infrastructure investments.
  • Development gets maximized because no onerous regulations drive developers away (i.e. no "dead zones" near rail stops), which is also raises the city tax base.
  • It creates money for the needed infrastructure investments.
  • The city gets some dense, new urbanist neighborhoods attractive to a certain young creative class demographic that is more likely to ride the light rail rather than add to traffic woes.
  • The citzens and taxpayers get maximum benefit from their expensive rail investments by increasing density and ridership near the stops. (aside: this is not an argument for rail - I'm just taking it as a given and asking how we can get the most out of it)
One issue that would have to be worked out is the percent sign-off by landowners to create enforceable deed restrictions. Does it have to be 100%? Can it be a super-majority like 70-80%? By land area or value? I'm not saying everybody within a quarter-mile of each stop has to buy-in - probably just the commercial land (non-single-family-home) nearest the stop. I'm sure acceptable details could be worked out.

I'd love to hear your feedback in the comments.

UPDATE: This was passed along to me today. Hat tip to David.


DALLAS (Prescott Realty Group) – The city recently approved its first TIF district focused on multistation transit-oriented development.

The new TIF includes 559 acres in addition to public rights-of-way. It stretches from the Lovers Lane and Mockingbird area along the DART rail line to the Lancaster and VA Medical Center region.

The district will have a 30-year life, during which real property values are predicted to grow from $320 million in 2008 to $3.52 billion by 2038. About $328 million in incremental tax revenue is expected to accrue in the district during the life of the TIF.

"The primary focus of this effort is to encourage high-density, mixed-use, pedestrian-friendly developments around existing DART Rail stations," said Dallas City Manager Mary Suhm. "The TIF provides an effective development tool to encourage the redevelopment of important, centralized areas of the city, as well as new development."

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Monday, December 15, 2008

Opportunity Houston in Fast Company

I'm short on time tonight, so just a quick pass-along. The Greater Houston Partnership's $40m Opportunity Houston program to promote economic development just got a real nice write-up in the most recent issue of Fast Company. (Hat tip to Justin)
Houston Launches Multimillion-Dollar Effort to Shield Its Economy

Flush with oil-and-gas money but wary of a bust, the Texas metropolis launches a multimillion-dollar effort to recession-proof its economy.

When Vestas, the world's largest wind-turbine manufacturer, announced plans for a new U.S. research center, 42 states lined up to make sales pitches. The winning location would be rewarded with hundreds of jobs, millions in tax revenue, and green-business cachet. Finn Strøm Madsen, president of the Danish firm's tech division, wanted a site near big-name universities, so Massachusetts (MIT) and California (Caltech, Berkeley) seemed obvious choices. Portland, Oregon, was already home to Vestas Americas' headquarters. But in June, Vestas picked Houston.

The victory was the first sign that the city's ambitious new economic-development battle plan, Opportunity Houston, was working.
Houston's metro area added 53,000 jobs in the 12 months through August, more than any other region in the United States, save Dallas -- Fort Worth... 900,000 new residents have been added in the past seven years.
Since last spring, the relocation pipeline has ballooned from fewer than 500 corporate candidates to well over 1,100. And during 2007, Opportunity Houston's pilot year, the partnership tallied $500 million in new capital investment and $15.2 billion in new foreign trade directly related to its efforts.
...the innovative tech tools that Opportunity Houston's hefty budget has enabled it to develop. The partnership is sinking seven figures into a geographic information system (GIS) that could be called a SimCity lover's dream. It will give companies and consultants instant online access to detailed information on any location in the 10-county region. In addition to maps, the system contains 100 layers of data, from details of nearby hazardous-waste sites to specifics about power and water lines and even graveyards. No other city in America has a system this sophisticated. In addition, Opportunity Houston tracks its leads with state-of-the-art software that's an economic-development cousin to customer-relationship-management systems.
While its leaders want to lure emerging industries like nanotech and renewable energy, Texas doesn't have aggressive, sector-specific tax incentives offered by states including neighboring New Mexico. And while it weathered Ike well, "the hurricane potential scares the bejeezus out of everybody," says James Renzas, a relocation consultant at Bedford International.
I think that's a big part of the reason DFW continues to match our growth even without near as much of the energy industry as us: they're the "safe" Texas megapolitan from hurricanes, with less humidity to boot.

I'm curious to hear your thoughts in the comments on sector specific tax incentives. In general, I don't like 'em. A level playing field seems the best bet to me. Be attractive to business across the board - not just niche sectors. But if we're losing good deals to other states, maybe we have to do it to be competitive. Your thoughts?

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Friday, December 12, 2008

David Brooks gets in wrong on old vs. new transportation infrastructure stimulus

I'm normally a big fan of David Brooks' columns at the NY Times, but this week's column on innovative infrastructure stimulus (reprinted in the Chronicle on Thursday) was more of a mixed bag. First, I thought his opening was very insightful:
The 1980s and 1990s made up the era of the great dispersal. Forty-three million people moved every year, and basically they moved outward — from inner-ring suburbs to far-flung exurbs on the metro fringe. For example, the population of metropolitan Pittsburgh declined by 8 percent in those years, but the developed land area of the Pittsburgh area sprawled outward by 43 percent.

If you asked people in that age of go-go suburbia what they wanted in their new housing developments, they often said they wanted a golf course. But the culture has changed. If you ask people today what they want, they’re more likely to say coffee shops, hiking trails and community centers.

People overshot the mark. They moved to the exurbs because they wanted space and order. But once there, they found that they were missing community and social bonds. So in the past years there has been a new trend. Meeting places are popping up across the suburban landscape.

There are restaurant and entertainment zones, mixed-use streetscape malls, suburban theater districts, farmers’ markets and concert halls. In addition, downtown areas in places like Charlotte and Dallas are reviving as many people move back into the city in search of human contact. Joel Kotkin, the author of “The New Geography,” calls this clustering phenomenon the New Localism.
Absolutely spot on. But then he tries to shape Obama's massive infrastructure stimulus based on this insight, and runs into trouble.
To take advantage of the growing desire for community, the Obama plan would have to do two things. First, it would have to create new transportation patterns. The old metro design was based on a hub-and-spoke system — a series of highways that converged on an urban core. But in an age of multiple downtown nodes and complicated travel routes, it’s better to have a complex web of roads and rail systems.
Because we’re going to be spending $1 trillion now on existing structures and fading industries, there will be less or nothing in 2010 or 2011 for innovative transport systems, innovative social programs or anything else. Before the recession hit, we were enjoying a period of urban and suburban innovation. We could have been on the verge of a transportation revolution.
What transportation revolution? He doesn't say. Not that we're going to fundamentally restructure the freeway networks of our cities, but he's right that a complex web makes more sense than hub-and-spoke in today's decentralized cities and with modern life's complicated travel routes. But a "complex web" of rail? What the heck is that? Rail is all about moving huge masses of people to a singular mega-destination during rush hours - something that's very inefficient with cars. Think Manhattan or inside Chicago's downtown loop. But how could you possibly serve an urban area with dozens of activity nodes with a rail network? The cost and inefficiency would be staggering (if you could even find the right-of-way). Travel times, with waits and transfers, would be completely uncompetitive with cars.

If Obama sparks a transportation revolution, it will be one of green propulsion technology for personal vehicles, not one of a rail transit renaissance. And in that revolution, an extensive network of fast, uncongested roads connecting these dispersed urban areas and activity centers will still be the central infrastructure challenge. Mr. Brooks may fear old-style road infrastructure stimulus, but the freedom of personal vehicles is now an integral part of the American lifestyle, and roads are the right choice for the future, rather than rail - the true backward-looking anachronistic infrastructure of the past.

(aside: before everybody jumps on me, I'm speaking in broad generalities here. Specific rail projects can make sense in specific circumstances, as is the case with some of the proposed lines in Houston.)

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Monday, December 08, 2008

State and local transportation issues, part 2

Continuing from last week on the transportation conference:
  • The second-to-last segment on financing priorities and options was moderated by Bill King. It also turned into the feistiest session, with some back-and-forth on the practicality of density and rail (including the Texas T-bone high-speed plan), and how important predictability is on adjacent land use around transit stops.
  • As far as the gas tax, Texas is a net donor to the federal govt, only getting back 78 cents on the dollar, and Houston is a net donor to Texas, providing 25% of the funds but only getting 15% back. Sounds like there will be a push to get more back on both of those.
  • Some of the financing options discussed: tolls, sales tax, gas tax (including inflation indexing it, the most popular option), local options (county/city voting for local increases in sales and/or gas taxes), capturing property value-add (i.e. tax the value added to property that directly benefits from the road or transit improvement), and attracting private capital (with public-private toll road agreements). A good argument was made that we don't have to limit our options: the state could allow all these "options in the toolbox" for local cities/counties/agencies to use. The need is big enough to tap all of them.
  • Public tax-free infrastructure financing is much cheaper than private money RoI requirements (12% IRR target), but Metro is evidently pioneering a hybrid approach that shifts risk the private contractor but still uses cheap public tax-free financing. No details were given.
  • Bill King pitched his no-fares idea for Metro, noting it only costs 15-20% of the budget for a 50+% estimated ridership increase. Opposition included violating the principle of "user pays" and the problem of homeless/indigent riders camping out on the buses. The key metric seems to me to be which option generates the most passenger-miles per dollar spent? It certainly wouldn't be hard to try it for a couple months and see how it performs.
  • One concern with private-public toll road partnership was that the private money might make too much profit, upsetting citizens and politicians. My solution: require the private money to be Texas government institutional funds, like city and state pension funds and university endowments. Still negotiate the best contract possible for the public, but if it turns out to be more profitable than expected, at least the benefit still flows to the citizens and taxpayers of Texas. No harm, no foul.
  • The last session was on delivering projects. State vs. local? Public vs. private? Again, talk about maximizing the tools available and learning from best practices around the world. Someone also noted that, with the recession, we'll have a cheap build window for the next couple of years if we can take advantage of it.
  • An interesting stat that came up: over a 40-year life, a road needs four times its cost in maintenance (does that seem really high to anyone else?). This is why toll roads are such a good option, because the provide the revenue stream not just for construction, but also for maintenance - as opposed to other financing methods that may only contribute enough to build the road, creating a maintenance shortfall down the, um, road.
  • Humorous quote of the day: "If you take all the stupid people out of the legislature, then you don't have a representative democracy." Both funny and sad at the same time.
That about covers my notes. If you were there and have your own observations, please pass them along in the comments.

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Thursday, December 04, 2008

State and local transportation issues, part 1

I spent all day Wednesday at a a statewide conference on "Transportation Infrastructure: Establishing Public Policy Priorities" put on by Texas Lyceum at Reliant Center, with the objective of getting something substantive done at the upcoming legislative session in January. The turnout was impressive - several hundred I'd say. It was a mixed format of round-table "fishbowl" expert discussions and breakout sessions for participation, which I found to be a much more engaging format than the usual sequence of lone speakers with Powerpoint slides.

Rosanna Ruiz's Chronicle article on the event is here, including some quotes by yours truly (we randomly ended up a the same table).

Some observations from the day:
  • There was widespread agreement Texas has been chronically under-investing in transportation infrastructure, and the future trends look even worse if something isn't done, mainly around funding.
  • Recent hearings around the state indicated that people prefer taxes over tolls, which surprised me.
  • Our port has a mismatch problem: the water side is 24/7, but the land/truck side is generally only 16 hours/day because they can't operate when their destinations aren't open to receive the load. My (partial) solution? Determine containers that have long multi-hour drives to their destinations (around the state and beyond), and release those loads to trucks in the middle of the night. By the time they get where they're going, their destination store, factory, warehouse or whatever will be open.
  • "Inland ports" were a hot concept to move the congestion away from urban areas and the jobs to underdeveloped parts of the state. One idea from our table: a rail shuttle to move containers from the port into east Texas along the I-69 corridor. Facilities along there would transfer the loads to trucks, which would not go through any congested urban areas in Texas as they head to destinations in the eastern U.S. (as opposed to the cities trucks travel through when they come from south Texas or the port).
  • Are we going to be the first generation of Texans to not leave a legacy of generous infrastructure investments to our children?
  • "We talk like we want to be California, but we spend like Mississippi."
  • Far too many people are on the roads during rush hours that don't need to be (almost half aren't going to or from work). How to we shift that demand to off-peak? Telecom solutions? Road pricing solutions?
  • Mary Peters, the U.S. Dept of Transportation Secretary, made some great points about getting rid of the artificial barriers between pots of federal money (like roads vs. transit - let locals decide the best use), that we need move from arbitrary earmarks to strict cost-benefit performance metrics, and that the gas tax has a limited future as we move to higher mileage vehicles as well as those running on alternative fuels (like the coming wave of plug-in hybrids running on electricity for many miles/day). She mentioned a vehicle-miles-traveled (VMT) tax, but it sounds like a privacy (GPS tracking) or fraud (odometer rollbacks) nightmare to me, as well as discouraging investment in higher mileage cars (which the gas tax does).
  • She also mentioned that the congestion-priced lanes on CA-91 in Orange County have 40% better throughput (!!) than the free general-purpose lanes because they keep speeds up. I imagine we'll see similar metrics eventually for our new I-10 Katy Freeway managed lanes. I believe more of these lanes is the best and cheapest thing we can do to get more out of current freeway infrastructure as well as raise critically-needed funds for new infrastructure. With that kind of performance improvement, we should even be seriously considering switching over currently free general-purpose lanes to managed - after extensive public education of the benefits, of course.
That's enough for one post. Part 2 next week on financing and delivery of transportation infrastructure.

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Monday, December 01, 2008

Transportation conference, zoning debate, and tourism stories

Before I get to some smaller misc items, I'd like to first remind everybody that Texas Lyceum is having a public conference on state transportation issues at the Reliant Center this Wednesday, December 3rd. It looks like a pretty interesting agenda with a lineup of heavy hitter panelists (including the U.S. Dept of Transportation Secretary), so I hope to see some of you there. Details and registration here. Email me if you'd like me to forward you the detailed agenda (tgattis at Also:
Please note this relevant editorial by Texas State Senators John Carona and Kirk Watson who serve as Chair and Vice Chair of the Senate Transportation and Homeland Security Committee that ran today in the Dallas Morning News as well as the Houston Chronicle, the San Antonio Express News and the Austin American Statesman last week.
On to the smaller misc items:
In this city of skyscrapers of glass, steel and stone stretching 1,000 feet into the heavens, the one-story Beer Can House may best capture Houston's essence.

"It's visionary art," Mayor Bill White says, chuckling, as we stop at the modest three-bedroom, one-bath house a comfortable bike ride from the skyscraper district. "We have such eclectic architecture, and we don't have an arbitrary taste patrol. It gives the city a bit of a texture."

"We have the most energy-efficient building codes in the country," he adds, "but aesthetics we leave to people."


This city of 2 million people has its share of quirkiness and characters, but make no mistake - it's a major-league city, from two new stadiums with retractable roofs and a modern arena for its six professional sports teams to an expanded convention center.


Dozens (um, try 'hundreds') of restaurants serve everything from steak to sushi, barbecue to Bombay chicken curry, Tex-Mex to Thai. Locals recommend the chicken enchiladas at Armando's, but the grilled, blackened tilapia in white chardonnay sauce is even better.

The 56,405 acres of park space, including more than 100 miles of hiking and biking trails, rank Houston first among the country's largest cities. Memorial Park, called the largest urban park in Texas, includes an 18-hole golf course and trails along the Buffalo Bayou popular for mountain biking, running and hiking.


Downtown's rejuvenation gives visitors plenty to see and do, but it's more for the residents - and for attracting new ones. It must be working, because Houston topped Kiplinger's 10 Great Places to Live, Work and Play list this year, thanks to its growth, booming job market, and low cost of living.

Gotta love a nice puff piece in a non-local paper. Good job, GHCVB... ;-)

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