Call it the ultimate transit-oriented development (TOD).

New York’s Metropolitan Transportation Authority (MTA) is pushing sustainability to new heights by seeking to turn historic Metro-North train stations outside the Big Apple into retail and dining hot spots.

The MTA recently requested bids for space at four New York City–area station sites—19th-century buildings in Port Chester, Peekskill, Ossining, and Tarrytown—and is also considering leasing additional stations on Long Island and in Westchester County.

“These properties represent a tremendous opportunity for creative entrepreneurs, whether for a restaurant, a florist, whatever,” states Metro-North president Howard Permut. “In addition to the built-in commuter market, these stations are located in vibrant, lively villages. Having these buildings open all day would be a boon for both our customers and village residents.”

Three years ago, restaurateur Carla Gambescia rented out the MTA’s Mount Kisco train station, creating a popular destination called Via Vanti and turning the once-depressed station into a community destination.

“It’s an intriguing idea,” says John Hempelmann, an attorney at the Seattle firm of Cairncross & Hempelmann and vice cair of ULI’s TOD Council. “Anything that transit agencies can do to increase the attractiveness of their transportation service and to provide amenities for the travelers so that they do not need to go someplace else improves the efficiencies of both the transportation system and the way the riders conduct their personal business.”

The Metro-North spaces are typically 1,200 to 7,400 square feet (111 to 688 sq m) and are high-traffic areas—just what restaurateurs and retailers seek. Each structure is centrally located in densely inhabited villages and each has recently undergone physical improvements to increase its attractiveness to potential businesses.

That’s exactly what transit-oriented development is all about—seeking to eliminate automobile trips and instead stressing walkability. “Whether it’s a restaurant or coffee shop, a dry cleaners or book store, making these services available in the train stations will reduce some of the car trips travelers on the train would take,” says Hempelmann. “We are talking about building ridership by appealing to a diverse group of passengers living in mixed-use communities in and around their stations. But it’s only a first step.”

If entities such as the MTA really want to advance transit-oriented development even further, Hempelmann says, they should sell land surrounding the stations to developers or provide 99-year leases that lenders and developments require to build mixed-use projects on station parking lots. “Most of the train stations have large parking lots,” he adds. “In Seattle, for example, there is a huge parking lot adjacent to our King Street station that is owned by King County, the regional government. It took a long time for the government to sell it, but now [the King County government is] planning construction of multifamily housing and businesses within a short distance from our commuter trains and light rail.”

Utilizing sprawling parking lots at stations could become a catalyst for surrounding real estate ventures, he says. “You could put housing and other businesses on the parking lots and start a renaissance in the area,” Hempelmann adds. “Travelers could even live at residential units built at or near the station, so we are really talking about connecting transportation, housing, and employment and doing it with increased walkability—which is a good way to ease traffic congestion. If we reduce traffic congestion, we reduce pollution as well as the stress on the human psyche.”

Hempelmann also notes that demographic preferences are changing, particularly among Gen Yers—many of whom prefer not to have a car. “They like to walk and they want to live in urbanized areas, so development at the train stations is good,” says Hempelmann. “It’s good for the real estate community, good for all transit agencies that are looking to increase ridership, and good for the environment.”