SEPTA on Fire
If you’ve been following Philadelphia transit news, you already know SEPTA is not in a great spot. Declining ridership, a funding cliff, and a whole lot of deferred maintenance. But buried underneath the bad headlines is actually a pretty interesting story about how the agency is trying to dig itself out and it runs directly through your local train station.
By early 2023, regional rail ridership was hovering around 50% of pre-pandemic levels. Fare revenues, which used to cover about 40% of operating costs, had fallen to just 21%. Today they’re sitting at roughly 70% of pre-COVID levels according to SEPTA’s own ridership dashboard which is better, but not good enough. Meanwhile, federal pandemic relief funds are expiring and Harrisburg hasn’t exactly rushed in with a clear plan to fill the gap.
So SEPTA is doing what any cash-strapped organization does: cutting where it can, restructuring where it makes sense, and looking hard at the assets it already owns.
That last piece is where Transit-Oriented Communities, SEPTA’s TOC initiative, comes in.
The basic idea is straightforward. SEPTA owns a lot of land next to its stations, much of it underutilized. Instead of letting it sit there, they’re leasing it to developers. As SEPTA’s Director of Strategic Planning and Analysis Ryan Judge put it:
“At a high level, it means that we’re making better use of assets that we own so we can offset some of the maintenance costs and costs to run our system. We’re getting new revenue sources by leasing some of this property.”
This is a win-win on paper. Ground leases generate revenue. New housing near stations brings more residents who might actually ride the train. It also fits into a broader narrative SEPTA is pushing, shifting from a “commuter transit” model to a “lifestyle transit” model. About 50% of the region’s population lives within a half mile of a SEPTA station. The pitch is that those stations can anchor the kind of live-work-play neighborhoods that people actually want to be in, not just a place to park your car and catch the 7:42 to Center City.
The initial wave of TOC sites included Ambler, Bristol, Clifton-Aldan, Germantown, Warminster, and Wynnewood, with Swarthmore apparently replacing a few of those. Conshohocken was added into the mix via a separate RFP process.
These weren’t random picks. In a presentation to the Ambler Committee, SEPTA laid out their selection criteria pretty clearly: larger parcels with higher development potential, supportive zoning and municipal plans already in place, and sites that had already attracted developer interest in the past. Essentially, they were looking for the path of least resistance, places where a deal could actually get done.
The Conshy station story is the most developed one to follow right now because it’s the furthest along. SEPTA put out an RFP for the site, originally conceived as a parking garage, and selected Alterra Development out of a four-bidder field.
Here’s where it gets interesting: Alterra bid $333 million. The next closest proposal was GMH Communities at $151 million. Keystone came in at $126 million. Republic/Spring Garden Mid-Atlantic at $104 million. Alterra more than doubled the competition. That’s not a close call.
The scope also evolved from the original vision. SEPTA’s Chief Planning and Strategy Officer Jody Holton explained it plainly:
“We don’t currently have the funding to build the parking garage as we originally envisioned, but this development enables us to do parking and get transit-oriented development there as well.”
So what started as a parking garage became a parking garage plus 300 apartments. Not exactly what was originally on the drawing board, but given where SEPTA’s finances stand, the ability to attract a developer willing to fund the whole package was probably too good to pass up.
This is really a story about a transit agency using what it has to stay afloat while trying to build something better at the same time. SEPTA needs money. It owns land. Developers want to build near transit. The math makes sense, even if the execution will take years to play out.
Whether TODs actually move the needle on ridership is a longer conversation. But as a strategy for an agency that’s been squeezed from every direction (ridership, fare revenue, state funding), it’s hard to argue with the logic of trying to get something productive out of the land you already own.
Worth watching closely as more of these sites move through the pipeline.
