City Planners, Property Developers Fuel Push for Driverless Vehicles - Sachse Construction
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City Planners, Property Developers Fuel Push for Driverless Vehicles

Six years after Nevada became the first state to allow driverless cars on public roads, real-estate developers and city planners around the country are stepping up their efforts to court pilot projects.

In downtown Las Vegas, for example, a driverless eight-passenger electric shuttle has ferried roughly 24,000 people since November, when it was first opened to the public. Frisco, Tex., is gearing up for a six-month pilot program starting in July that will offer driverless rides in an area including an office park and a sports and entertainment district that houses the headquarters of the Dallas Cowboys.

In Doraville, Ga., the developer of Assembly Yards, a mixed-use residential, office and retail project, is choosing between three autonomous vehicle companies to operate a driverless shuttle in the 165-acre project, which had been the site of a former General Motors plant. “We want our development to push the boundaries of new transit solutions,” said Matt Samuelson, chief operating officer of Integral Group LLC, the developer of Assembly Yards.

In the real-estate industry, interest in driverless vehicles is being fueled by a simple fact: Success in developments often hinges on the density of a project.

 Developers and property owners are angling to host autonomous vehicle trial programs in hopes that their rollout will lead people to rely on driverless ride-hailing options like Uber and Lyft rather than owning private vehicles—freeing up space for homes, offices and other uses that produce more income than parking spaces. In traditional retail real-estate projects, five parking spaces are needed for every 1,000 square feet of built floor area.

“We’re getting continued interest from cities, universities, corporate campuses, theme parks, a whole range of different venues,” said Chris Barker, vice president of New Mobility, Communications and Marketing at Keolis North America, the operator of the Las Vegas shuttle. Autonomous shuttles help to limit the number of vehicles and provide a last mile connector to other transit nodes in the area, Mr. Barker added.

French autonomous vehicle technology company Navya Inc., which manufactured the driverless shuttle now operating in Las Vegas, and another one in the University of Michigan, said it plans to introduce 30 to 40 more shuttles in the U.S. this year.

“What is interesting to us is the densification options it brings to us,” said Jeff Edison, chief executive officer of Phillips Edison & Co., which owns more than 340 grocery anchored shopping centers across the U.S. “With driverless cars, we don’t need that scale of parking,” said Mr. Edison.

To be sure, it is far from clear when driverless vehicles will be ready for widespread adoption. Plans to roll out driverless shuttles in Gainesville and Tampa in Florida were delayed after local governments determined that further testing was required and a vendor failed to meet contractual obligations.

Setbacks included a fatal collision between a self-driving Uber vehicle and a pedestrian in Tempe, Ariz., and the death of an owner of a Tesla Model X sport-utility vehicle that crashed on a highway near Mountain View, Calif., in March.

Still, developers and mayors throughout the country are pitching their towns or mixed-use property projects as incubators for transit technology.

Besides aiding in densification efforts, such vehicles give the developers and local governments a powerful marketing tool—an image of being on the cutting edge of transit technology. “New and innovative things are appealing,” said Mr. Samuelson of Integral Group.

He pointed out that, as technology improves, it would be easier to expand the reach of unmanned vehicles and they would be cheaper to operate in the long run.

 Some institutional investors are watching how the confluence of ride-sharing services and self-driving vehicles will improve the efficiency of local travel and how that eventually shapes real-estate demand.

“These advances will impact renters, consumers, and businesses across the country and the globe, and affect what, how and where we build,” said MetLife Investment Management in a recent report.

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