Integrating retail uses into transit stations presents several opportunities for transit agencies like WMATA looking to increase ridership and revenue. Such retail uses also have the potential to help development projects around stations, providing a key link between the transit station and the surrounding TOD.
Combining retail and transit isn’t exactly a new idea; train stations have often been retail hubs. They provide a node that attracts potential customers like a magnet. Rapid transit with full grade-separation is an additional layer for a city’s transportation network. Shifting passengers between the street layer and the rapid transit layer both requires space (e.g. a station) and creates the opportunity to enhance that space with amenities.
In-station retail offers obvious financial benefits, including a key revenue stream for agencies looking to diversify beyond fares alone. In-station retail also provides an amenity for passengers. The retail itself doesn’t need to be wholly contained within the station, either. Retail spaces can be integrated into station structures and transit agency property while improving the urban design of the area and drawing in non-transit customers.
Revenue: In-station retail offers a potential revenue stream for transit agencies. It won’t be a major revenue stream compared to fares, but it can be significant. Looking to Hong Kong’s MTR, famous for integrating development into and around transit stations, in-station retail (separate from MTR’s malls and other properties) generates approximately $270 million annually for MTR.
Obviously, Hong Kong’s real estate market is unique, and such results won’t necessarily scale in other places. However, other transit providers do pull significant revenue from renting space. Transport for London earned $95 million in gross rental income in 2013. In percentage terms (1.3% of of TfL revenue) it might not seem that different from WMATA, but consider TfL’s very high farebox recovery and low operating subsidy as well as additional revenue from London’s congestion charge.
London is also interested in increasing revenue from in-station retail, taking advantage of the real estate assets they have and the number of passengers passing through. The desire to grow non-transport revenue isn’t unique to transit agencies, either. For example, consider the desire of airports such as Dulles to grow and diversify their revenues, both as a hedge against business cycles and as a means to improve the experience of passengers.
Passenger Experience: In-station retail isn’t all about revenue, it’s also about improving the experience for passengers. For airports and mainline rail stations, this is a given. Even the FTA’s own joint development guidance recognizes the different retail needs for intercity transit stations.
Some of the recent renovations to Rotterdam Centraal show the opportunities to integrate retail into the main concourse of a rail station. The station renovation widened many platforms, all of which are connected by a single connecting concourse below grade. The wide platforms are not only comfortable for passengers waiting for their trains, but also ensure enough space on the concourse level between stairways for substantial retail.
Station retail focused on passengers can work for regular rapid transit, as well. In Hong Kong, MTR’s in-station retail includes both street-fronting retail bays as well as indoor spaces within the stations, targeting passengers as they make their way from the street to the platform. The type of retail in stations isn’t particularly exciting; convenience stores, bank branches, dry cleaners, and quick service food joints. These are nonetheless useful retail establishments, particularly for regular commuters.
Retail can be retrofit into existing stations as well. In Paris, several Metro stations include small retail spaces, often in the mezzanine. Similar to London’s plans to grow revenue via additional retail offerings, the spaces reserved for old (and now unnecessary) ticket booths can be converted into retail.
Urban Design: In-station retail isn’t just about providing money to the transit agency or convenience to the passengers. It also provides the opportunity to seamlessly connect the layers of the city – the street-level to the rapid transit system.
In London, many of the Underground’s sub-surface stations include a substantial headhouse with a presence on the street. Old steam-powered lines of the District Railway were built via cut and cover construction and kept near the surface with periodic open cuts to provide ventilation. The District Railway (now part of the Underground’s Circle and District lines) also didn’t follow existing street rights of way.
Tunneling outside of existing street rights of way along with the use of open cuts for the tracks means that the stations are structurally similar to liner buildings along overpasses. Earl’s Court station provides a good example, where the station’s headhouse and other development above the tracks creates an unbroken street wall for pedestrians, as well as retail spaces fronting the street within the old station headhouse.
This arrangement benefits all parties. TfL gets rental revenue from retail tenants. Retailers are leasing a space not just focused on Underground passengers, but with street-facing access for pedestrians walking nearby. The station’s architecture meshes seamlessly with the surrounding neighborhood. The rail infrastructure has a relatively large footprint, but you wouldn’t know it from walking down the street.
Lessons: WMATA’s proposed FY15 budget includes a limited amount of operating revenue from joint development; other presentations from the agency indicate an annual revenue stream of approximately $15 million dollars. In the context of a $3 billion budget, that’s not a lot.
In terms of urban design, in-station retail need not be limited to stations. Elevated structures around the world show the possibilities for integrating transit infrastructure into good urban design – and it’s not all about minimizing the footprint of the rail infrastructure.
WMATA is currently shopping several joint development opportunities to developers and potential partners, most of which take advantage of existing land-intensive uses (bus bays, surface parking, and some plain old vacant land) next to existing stations. Given the relatively large footprint of the entrances to the new stations in Tysons Corner and Reston for WMATA’s Silver Line, there’s an opportunity to mesh this kind of joint development into future expansion projects from the start. Comstock’s Reston Station development is a good start.
This isn’t just an opportunity for additional ridership or revenue, but can also serve as a catalyst for quality transit-oriented development.