Retail, Rail Links a Tough Sell

Rail stations tend to enhance the value of surrounding property, real estate experts generally agree. But for most of the San Fernando Valley areas surrounding the Metrolink stations those higher values have yet to arrive.

“We have not really been able to ascertain the kind of value enhancements that [rail stations] create right now,” said Robert Lumley, senior vice president of Voit Cos. of Warner Center.

Voit and the Selleck Group of Westlake Village are development partners in The Plant, a retail and industrial project on the site of the former General Motors plant near Metrolink’s Van Nuys station at 7720 Van Nuys Blvd.

For industrial tenants at The Plant, the commuter rail station is “more of a benefit for their employees . . . for the ease of getting to and from work,” Lumley said.

Employers benefit further from Metrolink, Lumley said, because commuter rail “makes it easier to retain people and creates a bigger pool of employees available to them.” Notwithstanding that optimism, station areas can be hard sells for some tenants. Charles Dunn Co. is seeking tenants for a shopping center near the Chatsworth station at 10040 Old Depot Plaza Road, south of Devonshire Street. But not all prospective tenants are convinced that Metrolink will be an immediate boon to retail sales, according to Myles Helm, executive vice president with Dunn.

For prospective tenants, the question is, “Is there enough daily volume in commuter traffic to give those tenants enough business to survive?” Helm said.

A number of reasons, such as light ridership or the isolated location of some stations, may be responsible for the lack of clear-cut impact Metrolink stations have had on property values so far, Helm said. In the long-run, however, Helm believes that properties near rail stations will demand a premium.

Another optimist is Jeff Lee, president of the Lee Group, which is building a residential community in Sylmar near a Metrolink station.

“Where there is a Metrolink station and the land is there to be built on it, the property there will be worth more because of the perception that it is a good thing to be next to Metrolink,” Lee said.

Village Green, a project of nearly 200 homes, is only a few hundred feet from Sylmar’s Metrolink station at Hubbard Street and Ralston Avenue. Lee’s partner on the project is Braemar Urban Development of Agoura Hills.

Public officials hope to encourage similar projects at other stations.

“We believe that it is good public policy to encourage high-density residential and commercial development near our transit stations,” said Metrolink spokesman Peter Hidalgo.

That belief, he added, was the reason why Metrolink “developed a policy for the cities to own and operate their train stations,” so that cities would have a free hand to foster new development in station areas.

The city of Los Angeles, he added, has an ordinance promoting intense development near rail stations.

In fact, Los Angeles city planner Ronald Maben said he is preparing growth plans for property near the Northridge Metrolink station at 8775 Wilbur Ave., as well as at Metro Rail and bus stations. The Northridge station’s somewhat isolated location makes development a challenge, Maben added.

“It’s a difficult location, because the station is not on a major arterial street,” he said.

“The usual paradigm in modern planning thought is that a transportation-oriented district should have a broad mix of uses around a transit station,” Maben said. “In effect, you are creating a village. . . .”

In Northridge, however, “we have additional difficulties,” because the area has heavy foot traffic only during rush hours, “and that cannot support the village structure.”

Other possibilities are to relocate the station closer to major commercial streets, such as Tampa Avenue and Reseda Boulevard, according to architect John Kaliski, an urban design consultant on the Northridge plan.

The public commitment to development at Metrolink stations makes Hidalgo optimistic about future real estate appreciation.

“We believe, given a period of time, that property values will increase at station sites,” he said.