Stop Incentives / Start Basic Economics

The following post is from my contribution to the website of the Denver Regional Council of Governments’ (DRCOG) TOD page where they have asked for comments to the following question:

What is the process of marketing to and attracting businesses to TOD?
From large-scale developments like Union Station to smaller ones near planned outlying FasTracks stations, there is a need to attract businesses to anchor the developments. Landing DaVita was huge for Union Station, but are any other big fish on the way? What can we do from an economic development policy standpoint to ensure that others will follow? And what about bringing in the small, local businesses to the smaller stations? Are the developers able to make the leases affordable? Einstein’s and Starbucks are fine, but unique, homegrown businesses are what will make these developments special.

The answer I contributed is below. Read from DRCOG’s TOD page here:

http://tod.drcog.org/what-process-marketing-and-attracting-businesses-tod#comment-182

The question opens a larger context, in that the attraction of FasTracks is in the opportunity it brings to connect people to destination. Too often supporters of transit and transit oriented development (TOD) forget about those two things: people and destination. The people of transit represent a marketplace of consumers. Once we understand these consumers we can represent their consumer demand to the business community and the result will be voluntary versus solicited. Creating pointless incentives to attract businesses to transit stations will lead to frustration because we are ignoring the basics of economics. A better focus is to capture, understand and communicate the demands of the consumers on the system and offer that consumer group to businesses that seek such information. We shouldn’t have to entice tenants with low rent when we can connect them to hundreds of thousands of consumers. We shouldn’t have to legislatively create local demand when tapping into large consumer groups is exactly what local businesses want. When we can make this link the business community will happily respond.

Lastly, variety of destination for a transit system is its lifeblood. The more destination variety, the more reason to ride. There are users that seek transit served locations. They seek this because of what they hear and have experienced themselves regarding the excitement about transit connections. What they never hear is how large and prolific the rider marketplace is.

The beauty of FasTracks is although there is still a lot to do, the system will be rather prolific by the end of 2016 which creates destination variety. It’s time to switch our focus from incentives to basic economics and talk about FasTracks the way we talk about other large consumer groups.

Leave a Reply

Your email address will not be published.