'DART Adds Value': Richardson All In On Transit And Development It Brings Even As Neighbors Question ROI

Despite loud grumbling from some cities that the juice isn't worth the squeeze when it comes to funding Dallas Area Rapid Transit, the city of Richardson disagrees and is building some of its future around transit-oriented developments.

TODs in the DART service area have driven more than $17B into the Metroplex’s economy since 1999, and Richardson is looking for a bigger piece of that pie.

City officials are pushing for redevelopment around its Arapaho Center Station, one of four light rail line depots in Richardson. And when their 2022 request for proposals didn't return plans that were as “big and grand” as officials had imagined, City Manager Don Magner said Richardson went back to the drawing board with plans to issue a new RFP next year.

“There's a lot of TOD now in North Texas and a lot of it looks and feels very similar,” Magner said. “We hope to find somebody that will come in with a very different concept and make it something that's unique so we can differentiate ourselves and we can draw people to it.”

Richardson’s enthusiasm for DART and a new TOD comes amid the backdrop of strong pushback against the transit agency, with several nearby cities arguing the 1% local use tax that funds it is overfilling DART coffers and not offering sufficient return on investment.

“And what are our residents getting for it? Are they really getting the service that $100 million deserves,” Irving Mayor and DART board member Rick Stopfer asked The Dallas Morning News this summer.

Irving is one of six of DART’s 13 member cities to approve resolutions requesting a 25% reduction to the use tax that makes up the majority of DART’s revenue, a list that also includes Carrollton, Plano, Rowlett, Farmers Branch and Highland Park. 

Rowlett officials estimated the city’s contributions are more than $10M annually, but “with ridership still approximately 30% below pre-pandemic levels and sales and use tax revenues increasing by 35% over the last five years, it is crucial to encourage DART to operate more efficiently,” Rowlett Mayor Blake Margolis said in a statement.

Other cities have expressed concerns with the safety and cleanliness of the rail cars as well as a desire to see the transit service connect more of North Texas. Richardson officials share many of those concerns about DART, Magner said, but the city is all in on funding it fully.

“We don't think that the way to make DART more successful is to reduce their funding,” he said.

Richardson officials have seen a lot of development take shape along the DART line, and Magner said they will continue working with the transit agency and the other member cities to continue leveraging the opportunity. 

That includes encouraging development along DART’s next project, the 26-mile Silver Line commuter rail that will connect stations in Plano, Richardson, Addison, Dallas, Carrollton, Coppell and Grapevine directly with Dallas Fort Worth International Airport. Using a portion of the former Cotton Belt Rail Line, the Silver Line will use actual train cars rather than the light rail cars utilized for DART’s Blue, Red, Green and Orange Lines. 

Silver Line service is slated to begin late next year or in early 2026. 

In addition to the connection to the region’s largest airport, the Silver Line is expected to spur further development and provide access to more than 200,000 jobs and educational opportunities, DART Project Communications Manager Mario Zavala said.

“Proximity to DART adds value to development,” DART President and CEO Nadine Lee said in a statement. “The impact of DART light rail investments on local development shows residential and office space rent for substantially higher than surrounding projects.”

The latest report from the University of North Texas Economics Research Group found that DART’s light rail line produces billions of dollars in local commercial development and economic output. The study found that 31 TODs built within a quarter-mile of DART rail stations between 2019 and 2021 produced $980.1M in direct spending and created nearly 11,000 new jobs. Those 31 projects contributed $1.8B to the Metroplex’s economy, it said.

Adding value by developing successful TODs is a focus of DART’s work with its member cities, Zavala said.

“Part of our strategic plan is to continuously develop fantastic spaces, and we see those as safe community hubs where people can gather, people can shop, people can eat [and] spend time together,” Zavala said. “Then [people can] use the transit stations as hubs to get back and forth from where they need to go.”

Cities working with DART on future TODs have to demonstrate the collaborative effort needed to make them economic development hubs, said Otis Odell, housing and mixed-use business leader at national architecture, engineering and planning firm HED. 

“These are all economic drivers and they’re opportunities for placemaking and to create distinctive places,” Odell said. “As this population grows, what could be more attractive than to have those kinds of opportunities? It's endless what can happen.”

In Richardson, after the initial round of proposals for Arapaho Center Station were rejected, officials regrouped and hired CBRE to help do as much of the preliminary development work as possible to make the project appealing to potential master developers.

While officials’ initial expectations for the project were admittedly “office intense,” Magner said the city is now looking for a unique mixed-use development with residential, office and retail space as well as entertainment options and green space. 

Dallas-based Prescott Group has been investing in TODs along the DART line since CEO Jud Pankey established the firm in 1996.

It picked up the more than 96K SF Knoll Trail Crossing office building in 2019 after the Silver Line was announced. DART signed a 10-year lease in September to establish offices in the building since the property is adjacent to the Knoll Trail Station, which Zavala said the agency sees as a transit hub. It is also within a mile of DART's Addison Transit Center, which is the agency's busiest bus transfer location outside Dallas.  

Parking is vital for a successful TOD, as is an understanding of how pedestrians and people using all the different forms of transportation will interact with it, Pankey said. It’s also important to have realistic expectations for any housing or retail elements of the development.

“DART is certainly trying to … stimulate things in and around their stations, which is super smart and is what they should be doing in partnership with the cities,” Pankey said.

Some early Dallas-area TODs were panned as failures for not doing the job they were intended for: encouraging ridership. 

But Pankey is optimistic that the next wave of development along the existing DART lines and the Silver Line can be successful. Cities now have enough experience with TODs to understand what makes developments like the one around Mockingbird Station successful, he said.

That station features a large shopping center as well as a multifamily property around the busy rail station.  

Prescott Group is seeing brisk leasing activity at Knoll Trail Crossing as well as interest from multifamily developers, Pankey said. 

That interest should be par for the course along a major rail connection like the Silver Line, according to Bayport Funding CEO Marcia Kaufman, a New York-based bridge lender who expanded into the DFW market earlier this year. She said her firm has seen a resurgence in multifamily housing built near public transportation around the country.

“The more that the state invests in their infrastructure and public transportation, you'll see developers come in and try to build multifamily rental housing around those areas,” Kaufman said. “It attracts young people who don't want to have a car, [but] want the ease of commuting to work or to whatever they're doing.”

TODs can link residents to parts of cities they wouldn’t otherwise be able to visit while offering places to live, eat, shop and hear music, Odell said. While each TOD needs to be unique to capture the flavor of the area, a residential element is usually a common thread among successful developments.

“It automatically injects people into the place,” Odell said. “People want to live in places where there's cool stuff going on, where there's Instagrammable moments [and] access to music, entertainment, food [and] culture.”

To capture that unique flavor of the community, Odell said developers should be asking the city for input and working with their economic development teams.

“We had to get DART and the cities at the same table [and] now we've got to get the developers at that table,” he said. “And it takes give and take on both sides.”