What comes to mind when someone says that light rail, streetcars, or BRT will bring economic development? My first guess is that people imagine that more buildings will be constructed along the route and the economic impact of that construction is what comes to mind. But what about other measures of economic development like worker productivity and connectivity to the regional employment pool?
I think too often economic development comes in one form when we're talking about transit, which I think might be going down the wrong path. We know that transportation decisions which provide or increase access to a place are likely to increase its value and ability to develop. But what about all the other benefits such as fostering denser employment clusters or connecting workers of all economic levels to regional jobs? Increases in the quality of workers that an employer has access to is another measure of economic development. Allowing workers to save money on transportation in order to spend it elsewhere is local economic development as well.
The related issue is who gains from this economic development. With the building construction based economic development, its easy to assume that developers and the people that buy the new condos are the only ones who benefit. This type of thinking creates a flash-point on which opposition to your project can zero in on to say you're not helping the people that need it the most. It's a valid concern but it's also missing out on the creation of tax base that goes back into the budget for the whole city to use. Denser areas for their part are huge economic engines. Not discussing this larger view of economic development is doing a disservice to the project, especially when you think through how the specific project will or will not help the situation.
If the main reason for a project is economic development, it would be helpful to describe the economic outcomes that you expect to achieve with the project. A streetcar or light rail line is going to provide a mobility benefit, but it is how we talk about those benefits that ultimately allow people to understand what the project is really about. Many projects don't do a good job at this and are maligned by the opposition. Many bad projects get oversold, hoping that "economic development" will save the day. I believe the key is to figure out whether the project is doing what its supposed to be doing, and move forward from there.