Travel Demand Management Planning in Downtown Minneapolis J. Michael Orange
	Session:Sustainability in Minnesota (March 11, 2:30 pm)

From the same session: Sustainability in Minnesota Moderator's Introduction and Comments From People to Policy Abstract: This paper describes the Travel Demand Management (TDM) Plan program in the City of Minneapolis. It summarizes the driving forces that lead to the upgrading of the program, the program elements, and program successes and challenges. CONTEXT Downtown Minneapolis: The Economic Engine for the Upper Midwest The economic health of Downtown Minneapolis is crucial not only to the City of Minneapolis but also to the entire Upper Midwest. To find a greater concentration of jobs, retail and office uses, and transportation and communication infrastructure in the region, you would have to travel to Chicago, St. Louis, Denver, or Edmonton. This paper focuses on the transportation problems the City is experiencing and one concerted effort to mitigate those problems through Travel Demand Management (TDM) Plans. Like so many cities since the Second World War, Minneapolis and the Twin Cities Metropolitan Area devoted the vast majority of its transportation resources in service to the truck and the private car, at the expense of public transportation. We are experiencing the typical problems that are the legacy of the car culture: Huge amounts of downtown real estate and other scarce resources delegated to store the two tons of metal that carry the solo driver to the workplace. Ugly car-oriented parking and freeway facilities that bisect and separate uses. Congested Downtown streets during peak periods. Backed-up queues on freeway ramps during the p.m. peak hours. Deteriorated air quality. Transportation inequities such as underfunded public transportation for those who cannot afford the increasingly expensive solo commute1, and growing externalities for the driving public.2 More people who spend more time and money to travel longer commutes. Urban sprawl and all its attendant ills. What is a planner to do? Past Policies and Actions Since the late 1960s, the City of Minneapolis has implemented policies that concentrate office and retail uses within a compact Downtown Core. This policy discouraged long-term parking within the Core and led to the creation of a peripheral parking system on the fringe of the Core area. Since then, the City and private sector have constructed over 60,000 parking stalls, most of which are located within this fringe area. As a result, Minneapolis has benefited from a thriving Downtown that has weathered recessions and even the competition from the famous Mall of America. Part of the intent for concentrating retail and office uses in the Core is to enhance transit alternatives for the 145,000 people who work Downtown. Although for the Twin Cities region, the vast majority of the p.m. peak-hour trips are by the solo driver, in the Minneapolis Downtown Core that percentage is a relatively low 27 percent. This is possible primarily because Downtown is the hub of the bus-only transit system, and car and van pools carry a hefty 14 percent of Downtown’s commuters. Construction will begin this year on the region’s first light rail transit (LRT) line since the old trolley tracks were removed fifty years ago. The line will connect Downtown to the University of Minnesota, the international airport, and the Mall of America. This is expected to be the first of several light rail and heavy rail projects planned for the region. In addition to this long-standing Downtown planning success, the City has invested in other public infrastructure for the transportation alternatives. The City fostered the construction of the largest skyway system in the world. This has contributed significantly to the vibrancy of the retail area.3 The skyway system connects Downtown to the fringe parking system. The state and the City also built high occupancy vehicle (HOV) lanes on Downtown streets, and preferential HOV parking in City-operated parking ramps. HOV bypass lanes on every freeway ramp that exits the Downtown, and several reverse-flow bus lanes provide a transit advantage over mixed traffic. The City built bus layover facilities, and has implemented one of the most extensive programs in the country for striped bike lanes. Nonetheless, the real focus of the City’s resource investment has been to provide long-term parking in the Downtown fringe area. In today’s dollars, that public investment would total over $300 million. The City is the largest parking facility operator, owning more than two-thirds of the sixty thousand stalls that exist in Downtown. Future Conditions As with many cities during the most recent economic boom, Minneapolis is experiencing a downtown renaissance with over $2 billion of development. Sixteen major projects since 1997 represent seven million square feet of new office space, a 19 percent increase. These new projects will likely produce thirty-four thousand new jobs, a 34 percent increase. Based on the historical relationship between Downtown jobs and Downtown housing, new developments will lead to nearly two thousand new units of Downtown housing. The developments will also create the need for one hundred additional bus trips during the p.m. peak hour An issue that most cities are grappling with in this country is Smart Growth. Central cities are resource efficient in terms of land infrastructure and energy. Development in Minneapolis is, by definition, Smart Growth. There is still room for additional development both Downtown and throughout the City. The City’s recently adopted Comprehensive Plan4 encourages more housing and commercial development at greater densities. The hope is to grow the population and the economy, create more jobs, foster support for the transit infrastructure, and support the social infrastructure of churches, schools, cultural institutions, etc. Downtown is the smart place for jobs. Most people (61 percent overall) use the transportation alternatives (bus, pool, bike, telecommute, walk) to commute to Downtown. The Planning Department estimates that a job Downtown results in one-sixth the daily vehicle miles traveled as compared to a job in the suburbs. Many business day trips at the suburban job site that would require a car, are handled Downtown by means of transit, taxis, sidewalks, skyways, and elevators. Limits to Growth, New Policies Downtown is approaching some growth limits. Without a substantial shift further away from auto dependency, development may trigger unacceptable congestion and delays at key intersections and at freeway ramp queues, and air quality violations. Although every Downtown freeway ramp entrance has an HOV bypass ramp that provides a transit advantage over mixed traffic, bottlenecks occur on Downtown streets because those HOV lanes do not extend back into the Downtown Core. The City is breaking its old pattern of removing more land from the tax rolls for yet another public parking ramp. The City’s new Comprehensive Plan states: "Minneapolis will follow a policy of ‘Transit First’ in order to build a more balanced transportation system than the current one" (Minneapolis Plan Policy 8.6). A recently completed Downtown transportation analysis points the way out of the parking dilemma: "The existing downtown street network has reached the point where it can no longer accommodate additional peak period trips without incurring negative consequences (congestion and delay) at certain intersections. . . . The reduction of peak period vehicle trips through Travel Demand Management, including transit, now remains the most viable and effective option for achieving an ‘acceptable’ level of service throughout the downtown area" (2000 Downtown Minneapolis Transportation Study, p. 3). History and Authority for TDM Plans Since the early 1990s, the Public Works Department exercised general authority to require TDM Plans out of the primary concern over traffic congestion. As a result, from 1991-1997 TDM Plans focused on Level of Service5 analyses, street access, and loading conditions. However, with start of the Downtown building boom in 1997, the Planning Department collaborated with Public Works and required major developments to complete comprehensive TDM Plans. The City expects its TDM Plan program to result in vehicle trip reductions on the order of 30 to 40 percent for participating companies.6 In 1999, the newly adopted Comprehensive Plan and Zoning Code7 codified specific TDM Plan requirements. As such, all new developments in the City in excess of one hundred thousand square feet must produce a TDM Plan. Also, Public Works still exercises its blanket authority to require plans for smaller projects if warranted. TDM Plan Contents and Measures TDM Plans must include the following components: TDM Plan goals: With the help of Planning staff, the applicant must first list all the goals and policies of the City applicable to the project, and then commit to further these goals through the TDM Plan. This is important because it requires the applicant to focus on the goals of the City, and to specify TDM Plan goals and measures for the project that are consistent with the City’s goals. Of critical importance is the transportation mode split goal for the project. Disclosure of transportation impacts: The TDM Plan must disclose the short- and long-range supply and demand factors, and the transportation impacts of the project including the following: Pedestrians: The applicant must disclose project impacts on sidewalk capacity, the need for new skyways and tunnel capacity, and address issues of pedestrian safety. Bicyclists: The TDM Plan must estimate bicycle demand consistent with City estimates. The Plan must disclose how bicycles will be stored and if bicyclists will have shower and locker facilities. The Zoning Code specifies shower, locker, and bike storage requirements for major Downtown projects. Transit Users: The TDM Plan must describe both supply and demand for transit based upon existing and future conditions. This includes the transportation mode split goals particular to the project. Furthermore, the Plan must describe the existing and the future need for transit shelters, the additional transit trips due to the project, and the need for and possibility of shuttles and other transit modes. Car and vanpool users: The TDM Plan must describe how the project will accommodate car and vanpool vehicles. Solo drivers: The Plan has to address existing and future conditions at critical intersections in terms of project impacts on Level of Service. For major Downtown projects, the analysis usually includes the project’s potential effect on freeway ramps as well. Secondly, the Plan has to define both parking supply and demand for both short- and long-term scenarios. Those scenarios need to take into account the mode split goals for the project. TDM Plan measures: The following describes typical measures designed to mitigate project impacts. No single plan includes all measures; this list works more as a menu of options: No inexpensive long-term parking: It is critical that the costs of parking not include externalities. The full cost and the full impact of parking should be reflected in its price. When an applicant subsidizes parking by providing it free to employees and tenants, it becomes a powerful incentive to drive and a disincentive to rely on the alternatives. Surveys of Downtown employers show that when the employer pays parking, 81 percent of the employees drive alone. When the employer subsidizes bus passes, 38 percent of the employees drive alone, and bus ridership jumps from 6 percent to 48 percent.8 Transportation equity: City Planning staff typically add this element to the plans. Staff chart the net present value of the capital and operating costs for facilities that benefit the solo driver, and compare that to the investments for those who take alternative transportation. Of course, the difference between these investments is usually several orders of magnitude apart, consistent with our half-century addiction to the automobile. The first time Planning staff used this approach with a reluctant downtown developer of a 900,000 square foot complex, the results were dramatic. In 1997, staff presented a chart to the City Council that showed the developer was willing to invest $16 million dollars to provide parking for 23 percent of the people who would drive to work in their. For the 71 percent of the employees who would rely on transportation alternatives, the company was willing to invest less than $50,000. Planning staff pointed out that for every dollar the developer spent for those employees who use alternative transportation, the developer invested over one thousand dollars for the solo driver. Faced with these arguments and a determined City Council, the developer agreed to invest an additional $300,000 in TDM measures, pulled out the company checkbook, and offered to write a check for $30,000 for the City’s first-ever direct subsidy for transit users. This approach has proven to be a very useful counter to the complaint from developers that a suburb would not ask them to subsidize those employees using transportation alternatives. The veiled threat is that they might move to the suburbs if the City added such a requirement. Planning staff typically offer two responses: Consistent with City goals that discourage long-term parking in the Downtown Core, a typical Downtown developer only provides on-site parking for 20 percent of the employees. City goals enable the developer to avoid over three million dollars worth of additional parking for the remaining solo drivers that will commute to the development and park elsewhere.9 Minneapolis Planning studies indicate that parking costs for a Downtown site would be greater than a suburban site. Although a typical developer would provide only 20 percent of the parking demand at a Downtown site, versus 100 percent at the suburban site, the high cost of structured parking and Downtown land overwhelm the savings.10 Because these savings represent only a very small percent of the overall costs for the project, other factors normally drive the siting decision. Most important TDM programs: MetroPass: The regional transit authority, Metro Transit, offers this annual bus pass program patterned after Denver’s program. MetroPass enables employers to offer a tax-deductible, free or low-cost pass to employees.11 The program boosts transit ridership by 30-50 percent. New Hire Incentive: The Downtown Transportation Management Organization (TMO) -- a non-profit agency funded by Metro Transit, the Downtown Council, and the City of Minneapolis – offers this program to employees new to Downtown. Participating employers pay a new employee’s transit or car pool costs for one month. Commuter Checks: The Downtown TMO offers a program to discount the cost of transit passes and car and vanpools. Commuter Connection: The Downtown TMO operates a ride share program to match commuters to car and vanpools. Guarantee Ride Home: The Downtown TMO provides free coupons for a taxi or bus ride to registered transit and pool riders who miss their ride. Landlord/tenant vs. owner/employer difficulties: A problem can arise when the developer will be a landlord, not the employer, and will lease the space to companies that are yet to be determined. The developer will be particularly hesitant to make investment commitments for the employees of unknown tenants. Recently, the City approved two precedent-setting agreements that placed the Downtown TMO as a broker between the landlord and the future tenants. This way, the developer/landlord was still able to invest in subsidies for alternative transportation. The TMO will require that the tenants prove they work in the building in order to qualify for the benefits. If the developer so chooses, they can then pass their costs onto the tenants of their building. Over the last twelve months, the City sponsored the creation of two TMOs outside of Downtown in order to facilitate this type of brokering arrangement within job concentration areas. Two-stage TDM Plans: In many instances, current conditions are expected to change due to increasing development, expansion of transit service, decreasing supply and increasing cost of parking, and choking levels of congestion. As such, some TDM Plans include a two-stage implementation program. This raises the question of enforcement. Since TDM Plans must be approved before the issuance of building permits, the City has considerable authority and influence at that stage of development. However, once a project is built, the power dissipates. Thus, it behooves the City to negotiate the strongest possible TDM Plan at the outset. Because it is not always possible to predict future conditions, Planning staff have negotiated two sets of TDM Plan mode split goals for projects that include multiple phases. The future goals retain the original level of authority since future permits will be required for these later phases. In addition, most major developers look forward to future projects within the City. Few are willing to risk damage to their reputation by the lack of a good-faith effort to achieve their TDM Plan goals. Surveys: The City generally requires the developer to cooperate with the Downtown TMO and complete a survey of employee transportation methods and desires every two years until the TDM Plan goals have been met. The surveys include "push/pull" questions, for example: "If transit passes were subsidized, would you take transit?" "If bicycle shower and locker facilities were available, would you rent them and bicycle to work?" "If telecommunication facilities were available to you, would you telecommute?" This way the surveys not only provide an accurate measure of current behavior and progress towards the TDM Plan goals, but they also help guide the creation of programs tailored to the needs of the building users. Failsafe clause: Typical TDM Plan language also allows the City to adopt more stringent requirements if the applicant fails to meet the TDM Plan goals. Communication programs: Every TDM Plan includes a full communication program. Typical elements include kiosks, information racks for brochures, and online car and vanpool match-up services. Many companies participate in the annual B-BOP (Bike, Bus, or Pool) event that is designed to increase awareness of alternative transportation opportunities Downtown. Project tracking and success: Planning staff estimate the net present value of the private investment in alternative transportation. The bar has kept rising since that first City Council meeting in 1997 when the developer, out of embarrassment, offered to write the $30,000 check to subsidize transit users. Unlike many other cities, Minneapolis requires no impact fees. Developers are now far more accepting of the program and far more willing to invest in TDM measures. That first draft TDM Plan in 1997 had a value of $19 per employee. The average value per employee is now $830. Since 1997, private investment in TDM Plans for major Downtown projects totals over $4 million. Last year the City’s Planning and Public Works Departments received the Commuter Choice Award for the City’s TDM Plan program. City staff are involved in several ongoing efforts including: Evaluating the effectiveness of the current program. Developing an enforcement mechanism. Evaluating marginal costs of providing more parking, versus funding more TDM measures. An inequity of the current program is that it only captures new developments. Staff are considering the development of a municipal TDM "utility" and funding mechanisms such as municipal surcharges on Downtown parking to spread the responsibility for funding TDM measures. Notes: 1. It could be argued that automobile subsidies are justified to balance public transit subsidies. Although total transit subsidies appear large per passenger-mile, they are much smaller per user than automobile subsidies because transit users tend to travel much less per year than motorists. In addition, a significant portion of transit subsidies are justified to provide basic mobility to non-drivers (see "Social Benefits of Public Transit"). [back] 2. Many studies estimate the externalities associated with the private automobile, costs not borne by the driver. The studies use theoretical gas taxes as a means to reflect the car’s true costs on society and the environment. These estimates of additional theoretical taxes can range as high as $4 per gallon to fully eliminate externalities. [back] 3. It has also hurt the vibrancy of the street. [back] 4. The web address for the Minneapolis Plan: http://www.ci.minneapolis.mn.us/citywork/planning/planpubs/mplsplan/index.html [back] 5. Like the school grading system, Level of Service (LOS) grades intersection congestion. LOS grades A-C describe free-flowing intersections. LOS F is best thought of as "grid lock." The City judges the congested grade of LOS D as "acceptable" only during the peak periods, and LOS E as "undesirable." [back] 6. Source: "Overview of Travel Demand Management Measures: Final Report," Comsis Corporation and the Institute of Transportation Engineers, et al., January 1994. [back] 7. The web address of the Zoning Code: http://www.ci.minneapolis.mn.us/citywork/clerk/laws/mcchelp/mcchelp.html [back] 8. Downtown Minneapolis Transportation Management Organization, 1994-1996 survey results. [back] 9. The example assumes a development with 1,000 employees and a mode split of 35% solo drivers. [back] 10. Downtown parking costs for 200 stalls equal $4.3 million. Parking costs for a suburban site for 1,000 surface stalls equals $2.7 million, a 37% saving of $1.3 million. [back] 11. For example, a company with 1,000 employees and 400 bus riders would pay Metro Transit $54 (the monthly average transit system fare) X 400 (current number of bus riders) X 12 months = $260,000. Metro Transit would issue up to 1,000 annual passes to the company. The company sets the price and sells the passes to the bus riders at a discounted rate. Typically, ridership increases about 35% (540 riders in this example). Since the company is not allowed to make a profit, the maximum the company can sell the passes is $40 per month (540 riders X $40 X 12 = $260,000). Most companies offer a 50% discount. In this example, the company’s net cost would equal $85,000 per year ($260,000 initial cost, less pass sales (540 riders X $27/month X 12 months = $175,000). Metro Transit adjusts the costs of the program over time for each participant. [back] Author and Copyright Information Copyright 2001 by Author J. Michael Orange has been a city planner since 1976 with the City of Minneapolis. As the person responsible for the City’s environmental review process, he prepares the state and federally mandated environmental reviews and is responsible for most of the environmental issues that come before the Planning Department. He collaborates with a colleague in the Public Works Department to manage the TDM Plan program for the City, and also serves on the team that evaluates all of the zoning and planning permit applications for the Planning Commission and City Council. From 1987 to 1993, he managed the Minneapolis-Saint Paul Urban CO2 Reduction Project for the two cities. Under the direction of a United Nations agency, the Twin Cities and eleven other cities around the world created and adopted the first plans designed to increase energy efficiency at the municipal level and slow global climate change. Phone: 612-673-2347; Fax: 612-673-2728 Email: michael.orange@ci.minneapolis.mn.us