by Jim Walsh – Jun. 3, 2011
The Arizona Republic
A new $20 million investment fund to jump-start transit-oriented development along the Metro light-rail line couldn’t come at a better time for Mesa as it prepares for an extension to Mesa Drive.
Although the new Sustainable Communities Development Fund probably won’t be tapped until sometime this fall, four developers already have approached the Local Initiatives Support Corp. with potential projects, said Teresa Brice, executive director of LISC’s Phoenix office.
“The timing is perfect for us,” Mesa Mayor Scott Smith said about the fund. “It’s what I call a statement investment. When they invest, others will follow.”
Smith also said the city is completing the Central Main Street Plan, which will chart redevelopment along the light-rail extension scheduled to open in 2016. The plan calls for higher-density development to capitalize on light rail.
Mike James, Mesa’s transit services director, said the fund could be used to help build affordable housing along the First Avenue corridor near downtown Mesa, or to replace trailer parks in poor condition along Main Street with better housing.
“It provides opportunities for a whole range of people to live and work with transportation,” he said. “They don’t need to have a car.”
Although light rail has generated plenty of ridership in Mesa, the economic impact has been muted. The line opened during the recession and extends only about a mile into the city.
In contrast, Tempe Mayor Hugh Hallman said the light-rail line has lured $2.5 billion in investment and helped the city redevelop Apache Boulevard, a longtime trouble spot.
LISC and the Raza Development Fund, with financial backing from major banks and insurance companies, are launching the fund, with each kicking in $10 million. A feasibility study is under way to determine what type of projects would most likely succeed.
Although the focus is affordable housing, projects including retail, grocery stores, child-care and health-care facilities also might be included to improve the quality of life, said Michael Rubinger, president and CEO of LISC.
“It’s broader than housing,” Rubinger said.
The light-rail extension runs from the Sycamore station, just east of Dobson Road and Main Street, to Main Street east of Mesa Drive. A temporary end-of-the-line station would be built at LeSueur, but the rails would extend east to Hobson so trains can be parked without blocking the Mormon Temple, James said.
The new fund is not the only source of money for affordable housing along the light-rail line. When developers apply for highly-sought federal tax credits, the Arizona Department of Housing awards bonus points for projects within a half-mile of light rail, director Michael Trailor said.
The goal is to take advantage of lower land costs to match affordable housing with the light rail, allowing residents to ride to work, he said.
Trailor said two such projects are under construction and three more have been funded.
Although it is on the edge of the light-rail corridor, Trailor’s agency recently awarded more than $2 million in annual tax credits to a developer that will renovate The Palms at Mesa, 324 S. Horne, a low-income apartment complex across from Mesa Junior High School. The light-rail extension excites Rod Ackerlund, who lives in north Scottsdale, but decided to open his Urban Picnic restaurant and catering business in downtown Mesa two months ago because he considers it charming. Ackerlund said he is willing to tolerate light-rail construction to reap the eventual benefits.
“We feel it’s going to bring in people who normally wouldn’t go downtown,” Ackerlund said. “This light rail is a home run for Mesa. I think it’s going to put Mesa back on the map.”