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Turning transit stations into profit centres

OC Transpo's Hurdman Station. (Photo by Elizabeth Howell)

OC Transpo's Hurdman Station. (Photo by Elizabeth Howell)

Peter Kovessy
Published on March 4, 2011
Published on March 4, 2011
Peter Kovessy  RSS Feed

Transferring at Hurdman station can be a soul-wrenching experience. Bus passengers are abandoned on a concrete island, cut off from the city by a moat of asphalt patrolled by loud, diesel exhaust-belching buses.

Topics :
OC Transpo , The Next City magazine , Ottawa , Lansdowne Park

The station itself is surrounded by vacant land, a bus staging area and the back side of a clutch of condominium towers.

For those trying to kill time between connections, distractions include reading and re-reading OC Transpo’s system map, shuffling from shelter to shelter, or visiting the Gateway convenience store.

Lawrence Solomon believes cities building rail lines, like Ottawa, should be rethinking this last amenity. Making retail development a priority, he argues, can make transit stations more pleasant and efficient for passengers, and less costly to operate.

“I’d sell the stations,” the writer and founder of Energy Probe, an environmental agency, said in a recent interview.

“I’d put them up for auction and allow retailers to bid on them … Mall developers would be very interested (and) would figure out the best way to get people in and facilitate passenger (movement).”

In an article published in The Next City magazine, Mr. Solomon writes the problem with many subway and light-rail stations is that they were designed primarily by transit engineers.

Their goal is to move passengers into trains as quickly as possible, resulting in an esthetic comparable to a public washroom that’s easy to mop down. Retail activities are small in scale, and usually crammed into leftover space as an afterthought.

Mr. Solomon suggests transit operators look to modern airports for inspiration, where shopping areas and concourses are oriented to be part of a passenger’s experience, and generate large amounts of revenue for terminal operators.

Over at OC Transpo, officials say they’re open to increasing the number of retailers operating in Transitway stations.

“We’re always happy to consider opportunities for partnerships,” says Vincent Patterson, manager of marketing and strategic development at OC Transpo.

There are currently five convenience stores on the Transitway: Gateways at Place D’Orleans, Blair, Hurdman and Lincoln Fields, as well as a Quickie at Bayshore.

OC Transpo collects rent, plus a percentage of sales, which added up to $75,000 last year, according to Mr. Patterson. (The sum also includes revenues from ATM machines.)

But as the city constructed new bus rapid transit stations as part of the southwest Transitway extension, the commercial focus was on encouraging complementary land uses on adjacent private property, rather than inside stations, he says. While it’s still early, Mr. Patterson says he expects the philosophy will also be applied to LRT station development.

“If I were a convenience store, I’d rather set up shop right outside the station than be confined inside,” he says.

“In most of the planned stations, there are a number of opportunities right outside the station.”

But Mr. Solomon says it doesn’t have to be one or the other.

“There is a huge opportunity being missed right in the station. That is the most valuable retail space of all, and it is being used almost solely for turnstiles.”

Mr. Solomon was unable to provide any examples of cities where transit stations are owned and operated by the private sector. In the aftermath of the Lansdowne Park debate, where a vocal segment of the population articulated a deep distrust of private-sector involvement in redeveloping a public asset, Ottawa is unlikely to boldly break ground in this area.

But this city envisions extending LRT further and further from the core in the coming decades, once the 13-station line currently on the table is completed. With the finances of all levels of government expected to be strained for the foreseeable future, it would be prudent for councillors and OC Transpo officials to explore new and expanded revenue streams.

The city could experiment by inviting private-sector proposals to develop and operate one of the non-tunnel LRT stations, such as LeBreton Flats, under a long-term sale-leaseback agreement.

Requirements could be put in place to ensure bidders respect the city’s laudable commitment to integrate art in new public facilities, such as transit stations.

The lessons learned from the pilot project could then be used to reduce the capital and operating costs of future phases of Ottawa’s LRT line.

Inviting greater private-sector involvement could not only transform purely utilitarian facilities into places that are actually pleasant to visit, but also eventually turn transit stations into profit centres, rather than operating expenses, on OC Transpo’s books.

Comments

  • Username
    jdit
    - March 12, 2011 at 16:59:49

    Ottawa's transit system is at best a loose one of connect the dots from one Ice Station Zebra to another.

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  • Username
    NOBUSTICKETSTOBUY
    - March 7, 2011 at 10:19:16

    I really believe that the new public board members that will be on the Transit Authority will bring much needed insight to the way transit should be running. At this point Patterson should be looking for new employment with another firm and the public should be taking over the marketing. I will say that it is a good sign that Patterson does take transit daily; but I can't understand then why he doesn't do something about the lack of private/public co-operation. Patterson should be fired and the money saved from his office should go to a private firms advice on oversight.

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  • Username
    Hotsauce
    - March 4, 2011 at 21:03:36

    This guy Patterson is someone I can respect. He actually takes the bus to work! No kidding ... I've actually seen him on it. Refreshing. My first impression was "this guy walks the talk". In a very diplomatic way, I can see why anyone who would be willing to invest in a retail location along a transit line would want to ensure independence, or at least interdependence on a secondary market. 2 months without income is enough to kill any business.

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  • Username
    jj
    - March 4, 2011 at 17:19:28

    I have been saying this for YEARS!!! OC Transpo refuses to move to a hub and spoke system - instead they continue with the same old inefficient and unsustainable system running EVERY bus from one's front door all through the downtown and beyond - their reasoning? they say people do not want to transfer - duh... who wants to hang out in a smelly, damp cold hunk of concrete - make the transfer stations not only more welcoming but convenient - add drug stores, dry cleaners, coffee shops and the transfer experience will be MUCH more enjoyable.... not rocket science here people

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  • Username
    Charles A-M
    - March 4, 2011 at 13:40:16

    There are elements of good ideas in here, but I think the proposals are a bit extreme. Selling it off to a retail company means that the primary goal of the transit station is no longer efficient movement of passengers, but maximizing profit. Of course you can't make retail revenue without passengers, but look at the Rideau Centre, whose business model centres around passengers having to walk half a kilometre through their mall to transfer between local and trunk lines. To the point that when the new tunnel goes right under Rideau Street (making a nice, convenient transfer) the local buses will be moved to the Mackenzie-King bridge, *with the goal of making their transfers less convenient*. Second, Ottawa has experience bunking up with the private sector, in the example of the main library branch. Because there's a still-functional office tower on top of it, we are forced to look for a different site for the new library, a search that has proven difficult. Third, the airport model is an interesting one, but think of the differences: Ottawa still owns the transitway itself, so the airport would only have one customer, whereas airports service many airlines. Would transit station owners start charging station improvement fees to customers getting off there as airports do? Airports are also highly regulated. Presumably the City would have to impose conditions on the station (e.g. Hours of operation, free access without discrimination, reserving an amount of space for OC vehicle access, etc.). The city of Ottawa has a track record of either making these conditions too strict for the commercial element to be viable (or to be convenient, like how the vendor at Baseline isn't allowed to sell bus tickets), too lenient to effectively service its customers, or otherwise not enforcing the private sector partner's side of the deal (e.g. Freiman mall encroachments by the Bay) There's definitely a lot of opportunity to make better use of our transit stations and to animate them with retail and other uses to potentially make them destinations in themselves. But just selling them off wholesale would be imprudent.

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  • Username
    srm
    - March 4, 2011 at 11:09:10

    This is a great idea, why should Ottawa pay for any new stations. Offer the land to developers to build offices, condos and retail at major stops in exchange for building and maintaining the station. We want density on the LRT. Take a look at Toronto from the air and you see lots of high rises along the subway line.

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  • Username
    Greg
    - March 4, 2011 at 09:33:21

    There's a great video on the Internet about how investments around transit line, and transit oriented development, transformed Jersey City. Ottawa could take its cue from Jersey and other cities. See "How buses and ferries and light rail have made it cool to live in New Jersey" at www.grist.org/article/2011-02-15-how-buses-and-ferries-and-light-rail-have-made-it-cool-to-live-i

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  • Username
    Joe public
    - March 4, 2011 at 09:30:14

    Oh, what a bright idea. What Octranspo needs to do is fire the manager in charge of marketing. The fact that he doesn't even understand how much revenue Oc is losing by not already capturing this potential is unbeleiveable. Just another example of mismanagement at OcTranspo.

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