» In addition to transit-oriented development, Charlotte’s planners envision a system that appeals to freight users.
In the case of Charlotte, necessity may be the mother of invention.
Lacking sufficient revenues to construct the planned Red Line commuter railroad designed to connect Center City Charlotte with its northern suburbs, planners working for local transit agency CATS have developed a unique vision for its financing.
The $452 million upgrade of the existing Norfolk Southern O Line would allow a significant expansion of capacity not only for passenger trains, but also for freight trains running on the same tracks. In doing so, this agency’s planners are suggesting that the sometimes rivalry between the two types of transportation should really be approached hand-in-hand, especially for a project whose primary right-of-way extends far beyond dense urban neighborhoods that characterize the zones around most successful transit links. Perhaps for the first time so directly, transit-oriented development is proposed to be joined by “freight-oriented development.”
Charlotte’s ambitious transit plans — once scheduled to include five rapid transit lines radiating from downtown — have been significantly scaled back by the economic downturn, which hit this financial hub especially hard. Sales tax revenues have fallen far below initial expectations, delaying the completion of anything other than the initial Blue Line light rail corridor, which opened in 2007 between downtown and the southern suburbs. While the northeastern extension of the Blue Line and a short version of the downtown streetcar will move forward thanks to federal funding guarantees, the Red Line’s ridership forecasts of about 4,000 to 5,000 a day were not sufficient to meet relatively tough guidelines from Washington.
The Red Line’s 25 miles of new service, though, will be made possible thanks to a combination of state contributions (25% of the cost), local sales taxes already collected by CATS (25%), and value capture (50%), which would come in two forms. A tax-increment financing (TIF) district around stations would allow increases in property values in the area to be directed toward paying back the cost of the project. This would be done with no increase in the property tax rate but rather through a redirection of increases towards the project.
Similarly, a special assessment district is being considered to pay for the service. Unlike TIFs, these districts* would require property owners to agree to pay a marginal increase in their property taxes to be devoted directly to the Red Line.
The new “Unified Benefit District” that would be affected by these value capture mechanisms would take advantage of both the significant population growth expected north of Charlotte over the next few years and encourage freight-oriented development — which would together make the project financeable. The plan would include significant space to locate new development around stations — indeed, 10,000 housing units are either already under construction or planned. Certain developments would be built in collaboration with CATS.
More intriguingly, businesses that require rail freight access would be encouraged to locate between stations. They would be able to connect their own tracks directly to the main rail line. The argument made by the project’s planners is that the area along the line’s right-of-way includes plenty of space for infill industrial space. Why not take advantage of the increase in rail capacity?
As the map below demonstrates, it does seem logical to encourage walkable residential and office space around stops and freight-based industrial space between the stations.
Transit services, taking a total of 40 minutes, would be provided every half-hour at peak and every hour off-peak. The improvements planned for the corridor would therefore make it possible to run more freight trains at off-peak hours without disrupting the primary travel needs of riders. Operations will have to be coordinated, but with positive train control and other safety measures in place, it is hard to see what would prevent this project from adapting to the needs of both passengers and freight.
Ten stations, several of which will be within Charlotte city limits but others of which will serve suburban towns including Huntersville, Cornelius, Davidson, and Mooresville, will be connected by 2017 if construction begins as planned in 2014. In order to make that possible, however, each of these municipalities — in addition to Mecklenburg and Iredell Counties — will have to get on board with the tax plan. That will not necessarily be an easy task, at least considering debates in recent years over the relative importance of different transit projects in the Charlotte region. Commissioners of Iredell County, significantly, have been less than thrilled at the idea of sacrificing tax dollars to aid CATS.
In addition, the special tax districts that will be necessary to complete the line will require at least half of affected property owners, controlling two-third of land value, to agree to the deal. It is not altogether evident that there is universal agreement on the need to improve access for passenger and freight railroads in the metropolitan area. Will they agree that the benefits of the new rail line are worth the increased taxes they are being asked to contribute to construct the project?
Nonetheless, these plans point to a potentially groundbreaking financing deal that could reshape the way commuter rail lines are built throughout the United States. Running along a corridor that is not particularly dense, it would likely be too costly and inefficient to provide very frequent passenger trains between stops. Yet connecting Charlotte to its northern suburbs, allowing the central city to expand its core and promoting dense downtown districts in the outlying town, is in the region’s interest.
Freight rail transport is more ecologically friendly than its truck-based competitor, but there is not enough capital in industrial activities in the Charlotte area alone to invest hundreds of millions in new tracks.
By combining the Red Line project’s public transport mission with that of encouraging economic development in industrial activities, the project becomes more realistic. Half a billion dollars in track improvements will go not only to passengers but also to freight. Incentives for new development will go not only to residential but also to warehousing. Those represent an exciting pooling of resources towards mutually beneficial goals.
* Similar to those often used in downtowns as Business Improvement Districts, or BIDs.
Image above: Red Line corridor map, from CATS