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Congress Approves M1 Involvement in Detroit Light Rail

» Public-private partnerships could bring big benefits to the Motor City. But they might be sending the wrong message about governmental responsibility.

If Detroit has yet to receive the kind of huge public investment that may well be necessary to save it, it hasn’t been entirely forgotten by its natives. Over the past year, a group of individuals and corporations have donated tens of millions of dollars towards the creation of an entity that would construct a new rail line down the city’s primary corridor, Woodward Avenue. Their example of direct private involvement in a transit project for a non-profit purpose is unique, and the U.S. Congress has authorized what may be a first-in-the-nation approach. Is it the right one?

Detroit, as has been discussed over and over, has been losing population for decades and its industrial base has been disappearing for years. The city’s leaders have been notoriously poor at responding to its problems; most relevant to this website, they rejected several hundred million dollars in the 1970s for a full-scale rail system, ultimately building only a one-way loop around the city center called the People Mover — a depressing failure.

The group of private and non-profit investors, calling themselves M1 Rail, are attempting to use spending on a 3.4-mile light rail line down Woodward to revive the city’s spirits and potentially its economy. This corridor runs diagonally out from the center of the city and has always been considered the top priority for transit investment in Detroit. The group’s $125 million project would extend from downtown’s Hart Plaza to Grand Boulevard and include 12 stops, meaning one every quarter-mile. This proposal, now almost fully funded, seems on the brink of reaching the construction stage. Using federal funds, the city would eventually extend the line to a total of eight miles at a cost of $425 million.

Incapable of paying a 40% share in the project’s cost, the minimum local (or state) commitment to a New Starts rail project, Detroit officials asked their representatives in Congress to count the M1 spending as part of the local share. That way, the city would be able to qualify for a full 60% aid from Washington as long as it were able to cobble together the missing ten percent.

In the recent spending bill, Detroit got its way.  By allowing the private money to be considered part of the local match under the Federal Transit Administration’s guidelines, Detroit’s chance of extending this project further than just what is planned by M1 rises exponentially.

This sets an interesting precedent: private companies, in this case working with a non-profit motivation, can attract federal funding for an extension of their project. Will this legislation affect other cities? What happens when a private company involved is profit-motivated?

These questions may be premature, since unless the FTA alters its quite controversial cost-effectiveness guidelines, Detroit may not be able to win those New Start project dollars upon which it has staked the future of its public transportation system. Compared to other planned lines around the country, Detroit’s project is likely to attract fewer users (being surrounded by the city’s half-vacant landscape) and be just as slow as existing bus service (with so many stations).

Still, if the project goes through, with a private group taking the first step and the public coming in for a second act, Detroit may be teaching other cities a new trick — and potentially putting itself and others in danger.

If, instead of keeping its money to itself, the M1 group had simply donated the $125 million it plans on raising to the City of Detroit for the purposes of building this line, no Congressional action would have been necessary; this money, under public control, would have been considered the local match automatically. But it is apparent that those working with M1 do not trust the municipal government, and perhaps that is a justifiable position considering Detroit’s track record. As a result, the first stage of the project will be built by M1 and then operated by the group, with city involvement only on the second stage.

In Detroit’s circumstances, this seems like an acceptable compromise, especially considering that those who have donated to the project clearly don’t expect to be making money on it.

But if the government allows such funds to serve as the local match in the future in other cities, the situation could be quite different. What happens if the investors on the first stage of the line stand to reap a large monetary gain (read: real estate related in the case of most cities) from the construction of the second stage? Can there be guarantees that the initial project’s operations will be maintained over an extended timeline? Would the federal government be put in a compromising situation in such a case? Shouldn’t cities be the decision-makers when it comes to transportation investments, and if so, is there any role for private groups at all?

Detroit, in other words, has a situation that seems pretty cut-and-dry — the federal government should clearly count the M1 funds towards the local match. It’s what happens elsewhere that could be problematic.

21 Comments | Leave a Reply »
  • I have no problem with investors who are making a large monetary gain kick start it with an investment in a phase 1. In fact, that might be a good idea. The current situation is that the investors who are making a large monetary gain are contributing nothing at all to the transit and highway projects which benefit them hugely and which they lobby for.

    There have been other cases where a developer has paid for the construction of a stop on Metro or a light rail or commuter train. Similar situation, as they are obviously expecting a gain from that too.

    Why should cities be the decision makers for transportation investments? What is sacred and virtuous about cities? As it is much transportation investment decisions are made by regional or metropolitan planning organizations which are not connected to cities. We should hope for the best transit possible. That might even mean stepping away from the idea that everything gets planned from a central source and letting a marketplace of ideas promote different possibilities.

  • I wrote about this same issue with other cities in relation to Detroit on TOW. I’m worried that even though they were able to insert a rider, they won’t be able to use it as a match because of NEPA requirements.

    http://theoverheadwire.blogspot.com/2009/12/playing-with-matches.html

  • Joseph E

    What’s with the stops every 1/2 mile? My wife currently walks 1/2 to the bus, so we can catch the limited-stop 96 to CSU Long Beach, even with a kid in the stroller (saving 5 minutes overall, versus walking 1/4 mile to the local bus stop). Stopping every 1/2 mile would save about 5 minutes out of the overall trip time on a 3.5 mile route. With stops every 1/4 mile it will not be much faster than a bicycle or local bus, even if designed well. Furthermore, even cheap stations cost about 30 million a piece, so cutting out 5 stations would save 150 million, increasing cost-effectiveness and reducing construction time and disruption.

  • Joseph E

    I should also note that, with stops every 1/2 mile, no one would have more than a 5 minute walk if they lived along the line, versus a 2.5 minute max walk with the closer station spacing. Likewise, someone who lives a couple blocks away would see their walking time increase by 0 to 2.5 minutes more, at most. If most people will walk 5 minutes to the bus or train, at least 75% of the destinations and riders would still be within good walking distance, with the farther station spacing.

  • BLambert

    Joseph E: not everyone who is going to be using the service is going to be able to make that 1/4 mile walk without difficulty; the elderly and infirm, for example.

  • J B

    Joseph, you mean every quarter mile. That does seem ridiculously dense, especially if the area it passes through isn’t.
    I don’t think private investment is a problem, but I do think planning should be in the hands of the city, or whatever region the rail line is being constructed in, to ensure some control over the process by elected officials, and hopefully therefore voters. If in the end the government is going to be liable for operating costs, businesses may plan a line that will increase their real estate value but have low ridership nonetheless, thereby making the government spend a lot of money to run a line that’s not of much use for the community as a whole. If private companies are willing to run the line themselves, for profit or otherwise, then I think it’s fine even if it would not otherwise be a priority- they’re essentially adding a line for free at no cost to the city other than the inconvenience of construction.

  • Cameron Slick

    Joseph: Light rail stations do not cost $30 million. At-grade, it’s more like $3.5m-$5m. Stops every 1/4 mile is ridiculous outside of downtown.

  • Citation please for the number of stations and the length of the line? It’s not worth discussing the merits (or lack thereof) of quarter-mile station spacing here if it’s not pertinent to this project.

  • NCarlson

    I think that ultimately the issue is the same as in all other P3 agreements… Namely that cities need to be very careful to ensure that their own investment is protected, and that the private sector is not left in complete control of the disposition of publicly funded assets.

    In all honesty there is no reason that these contracts can’t work.. To me the key things that need t be in any agreement (and could probably be federal requirements before private contributions are accepted for FTA purposes) are that there needs to be an operating guarantee (the private operator WILL run the line for x number of years), no ability for the private operator to sell, dispose of or abandon the asset without public approval (probably just contractually require the operator not to suspend service and give the city right of refusal on sales) and some ability for the public sector to take control of the asset if the contract is breached, or the purchase becomes necessary for policy reasons.

    Obviously this all assumes a situation like Detroit, where the system will ultimately be privately owned and operated, but there are any number of other structures that offer appealing opportunities. Really the key here is that private investment is highly desirable, but we must not lose sight of infrastructure, and transit in particular, being for the common good before private interests. Above all we need to avoid a repeat of the kind of mess created with the sale of Ontario’s Highway 407.

  • Aaron Thomas

    Please stop this anti Detroit bashing! The author of this blog is so misinformed about Detroit and the spirit of its citizen. First of all the city transportation officials along with private experts found that between 30,000 to 40,000 riders per day use the proposed light rail route. This means that density is real and solid along the propose light rail corridor. Thousands of riders depend on the Woodward route to get to work, school, hospitals, and other civic events.

    Detroit has the same right to apply and receive funding just like comparable cities that have applied. Detroit should not be ridiculed or penalized because its citizens use creatitivity to meet the FTA rigid requirements. Detroit should be appluaded that successful business people and foundations are willing to work with the city for the common good of its community.

    The problem with bloggers like the author regarding Detroit is that they try to use previous mistake by formers leaders to argue against the future plans of our great city and region. Yes its true former city and regional leaders squandered receiving mass transit in the seventies offered by Washington. Its is true that our city is losing population. However Detroit is the still the 11th or 12th largest city in the nation. The metro Detroit regions is among the top ten in U.S.. Detroit population is still larger then Atlanta’s, Boston, Cleveland, Minneapolis, Miami, D.C., Baltimore and others that have light rail.

    Please stop the Detroit distortions and misinformation!! Detroit has the density for regional mass transit!

  • Brad

    I agree with Aaron Thomas, I lived in both Detroit and Minneapolis and Detroit is much more dense than Minneapolis. Woowaa as some locals call it is prime for fixed guide-way transportation.

  • Cameron Slick

    I am also a current citizen of Minneapolis and former citizen of Detroit and can say with great certainty that the core of Minneapolis & St. Paul are effectively denser than Detroit. There is also no way in hell that the 3.4-mile starter segment would generate over 30,000 riders daily. The city build-out to the State Fairgrounds would probably generate those many riders, since bus ridership on Woodward is around there.

    That being said, this is a wholly legitimate project. There is a good reason to be conspicuous of private involvement, but I believe the bottom line is only part of the business’s interest. They realize LRT will attract investment, and they don’t won’t to be left in the dust.

  • To add some objectivity to the discussion, both Detroit and Minneapolis’ current densities are almost exactly the same across the city limits.

    Detroit may have been more dense prior to the population losses, but you can say that about most cities, too.

  • Ocean Railroader

    This is odd but in the case of Detroit I woukl drop the funding rules and let privet companiies step in to meet the city’s funding % in that the privet companies would know were a good investment is at and that it’s privet money vs city tax money which the citiy dosen’t have. I’ve been to Detroit in real life and that city needs every form of aid possible to save it.

  • Drewski

    Aaron, as a Clevelander for the past 21 years, I have to tell you a sad truth. Bluntly put, Detroit and Cleveland are the two largest centers of the fastest-shrinking urban region in the world. The rest of the country looks at us and is scared and stunned. Our cities are broken and ugly, and it’s not unjustified to suggest that we are collectively Third World in the scale and multitude of our problems. It’s not bashing to point out that Dresden looked better after the firestorm than Detroit and Cleveland do with our significantly self-inflicted decay. Please stop being so defensive when the truth is so evident. And yes, I live in the city of Cleveland, not a suburb.

    Any transit investment in either city comes with the baggage of heretofore inevitable massive population decline. Since 1950, Detroit’s lost over 1.2 million people. That’s Dallas. Cleveland’s lost at least 500,000–that’s Fort Worth. This part of the country–from Saginaw down to at least New Kensington PA–is still densely populated by national standards, but is in horrible shape. It could be a major test for the power of rail to help regenerate very degraded urban areas.

    Detroit was once seriously considering massive wholesale demolition–just clearing out square miles of nearly-empty wasteland. The proposed Woodward line isn’t exempt. Take a look on Google Maps, from downtown Detroit up to 8 Mile. It’s barren and ugly and damn near terrifying. That’s a kind description of most of the rest of the city. I don’t doubt that a rail line down Woodward still has potential, but it has to come with some very difficult choices. Maybe first of those is that the city has to start pruning its dead areas. No more pretending that infill will fix things. It won’t. If anything, if the city doesn’t act in the next few years, it (like Cleveland) will start to face major problems with all aspects of infrastructure. If 60-plus percent of your population is gone, you need to get rid of at least a quarter of your streets, streetlights, sewers and water lines. What’s left had better be equal to or greater in density than what was there 40 years ago, which isn’t impossible in the Woodward corridor. There’s already a market for urban living. It just can’t be the pseudo-urban crap you see at a “lifestyle center”–urban facade with LOTS of free parking. The Woodward line could be one part of a large-scale experiment in stabilizing an imploding city, and for that reason alone could merit allowing private money to cover the local share under FTA guidelines.

    This option isn’t totally beyond prior FTA parameters. Remember that the Metrolink r/w through the center of St Louis was the old Wabash r/w, and was purchased for $1. The FTA agreed to accept that r/w as St Louis city’s local contribution to the project, which I seem to recall was valued at something like $125 mill. In Detroit, allowing the private money as part or all of the local share should be combined with something else. The city (in cooperation with Wayne County) should be required to start closing off abandoned areas, and paying people (and possibly paying to move their houses) to complete clearance. No way in hell can you justify building a streetcar line if the population density along the line is dropping to 1000/sq mi or lower. Again, the Woodward corridor has potential, but it has to be regarded as something more like postwar reconstruction than some simple augmentation of a functioning city. Detroit isn’t a functioning city.

    How bad are Detroit and Cleveland? Two years ago, before the crash, there were large parts of both cities where you couldn’t be away from your house for more than a few days, or thieves would break in and steal EVERY bit of copper piping in the house–and you’d come home to a flooded basement, because thieves don’t bother to shut off the water. I spoke to a woman in Detroit who told me about a commercial AC unit being stolen from the roof of a small office building, for the scrap metal. In order for the Woodward proposal to move forward, Detroit is going to have to explain how it’s going to move beyond a half-century of incompetent governance.

    Finally, when outsiders start talking about the spacing of streetcar stops being too close, Detroiters need to take those outsiders on a nice, demonstration, half-mile walk along Woodward, preferably right after a snowstorm, and when the wind is nice and brisk from the west. And COLD. Detroit isn’t as wet as Cleveland, but part of the reason for the station spacing is that a half-mile walk into blinding horizontal snow (which we have every winter on the Great Lakes, from as early as October to as late as May) is miserable, which would have the impact of limiting ridership. Imposing Portland or San Francisco standards would be counterproductive. Go ahead with this proposal, but force Detroit to start cutting off the urban gangrene.

  • Anywhere else in the world, temperatures are not a correlate of subway station spacing. St. Petersburg and Moscow have the widest subway stop spacing of the world’s major systems, and they manage to cope…

  • W. King

    For those of you who think that 12 stops is absurd, why don’t you chew on this? The private company is actually proposing a stop in each direction; not shared center platforms. You may have already figured this out with the “3.4 mile loop” but in reality there are 24-25 stops. One in each direction and the private group is proposing side-running while maintaining parking on Woodward. It would run one lane off of the parking lane and have bump-outs at the stations. Buses and Trolleys because lets be honest these are trolleys the private group is talking about, would share stations, and left-turns would be maintained. The private group doesn’t have $120 million, $50 million of it is the cities money. The private group should not be calling the shots in the city. The “loop” will be another peoplemover and this whole private portion is being driven by suburban residents who don’t understand transportation operations, safety or efficiency. The M-1 group is being pushed by Automotive and Mortgage professionals as well as suburban horse farm owners. M-1 is a joke, they should let the city take the lead. It is a different time in Detroit politically and there is less corruption and more potential than ever. I lived in downtown Detroit for four years on Woodward and know that the cities plan is better for the movement of transit riders. I’m hopeful that DDOT will prevail over M-1.

  • I suggest people review the project website before rushing to conclusions about the project or repeating false information. The project has 12-15 stations for about 9.3 miles of track. Most of the stations are at least 1/2 mile apart. I live in Portland and can’t stand how closely spaced the stations are downtown (some are just 300 feet apart!), but this project appears to have much better spacing. Also, the project has peer city comparisons that show Detroit is relatively more dense than many other comparable cities. Lastly, the transit agency projects about 22,000 riders on the full 9.3 mile project. Rather than speculate, I suggest people research facts on census bureau, bureau of transportation statistics, or other relevant official sources.

  • Jayson –
    The initial plan for the corridor would have had 12-15 stations along the whole route, as you wrote. But the M1 group now wants 12-13 stations along Woodward on just its 3.4-mile portion. Evidence:

    > http://www.beiassociates.com/news_detail_T7_R3.html
    > http://www.crainsdetroit.com/article/20090817/FREE/908179982
    > http://www.masstransitmag.com/online/article.jsp?siteSection=3&id=8129&pageNum=2

  • W. King

    Jayson and Yonah
    Those stations are split and would have one on each side of Woodward within the 3.4 mile section thus doubling the amount. The section north of grand blvd would be center running and have shared or split stations (the cities section). The private section is as I stated above. 3.4 mile side running between Jefferson Avenue and Grand Blvd 12-13 stations on each side… Don’t believe everything you read in the paper. I used to work on this project up until about four months ago when I moved to the PNW. It’s a great great project for Detroit but must be done right. No conclusions here… Only facts.

  • W. King

    Also the DTOGS/Woodward LRT website shows exactly how the city would like to see the entire corridor. It does not show what the private sector is proposing.

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