Category: Charlotte

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Charlotte Commuter Rail Finance

Innovative Financing Points the Way Ahead for a Rail Project in Charlotte

» 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

Categories
Bus Charlotte Chicago Light Rail Streetcar

In Charlotte, a Busy Highway May be No Place for Rapid Transit

» A recommendation from the Urban Land Institute suggests pulling a proposed rail line out of a highway and onto a neighborhood street.

Take one trip on the Dan Ryan branch of Chicago’s Red Line and you’ll be convinced of the perils of locating transit stations in the medians of fast-moving expressways. Getting to stops is hard enough: It usually requires crossing first a huge intersection featuring cars hopping on and off the freeway; then, on too small of a sidewalk you’re required to bridge over several lanes of rushing traffic below. Once you’re finally on the platform, though, the situation may be worse: Cars are whizzing by at high speeds — producing tremendous noise and emitting nauseating pollutants — on both sides of the track. It’s certainly not a welcoming experience.

Fundamentally, standing there at a station waiting for a train makes you feel like you are a second-class citizen — at least in comparison to those speeding past in their private vehicles. And any pedestrian-oriented development generation transit investments sometimes attract is quickly turned away by these highway-adjacent locations, as illustrated by the prominent siting of a gas dispensary nearest to the station in the photograph above. Thus for cities hoping to attract increasing patronage and denser land uses, repeating station design examples such as those found in some parts of the Windy City should be a no-go.

From this perspective, the recommendations provided by the Urban Land Institute’s (ULI) Daniel Rose Center this week to the City of Charlotte were enlightening. Selected by the national organization for special study this year, Charlotte’s civic community was offered a number of suggestions for the renovation and widening of Independence Boulevard, which stretches southeast from the city’s downtown. Rather than extend a light rail line or a busway down the road’s median, as current local transit plans promote, the study group argued that an investment in streetcar lines paralleling the route on two much smaller streets would be more effective in encouraging transit-oriented development and refurbishing the city’s southeast side — its least affluent. The streetcar routes would extend into downtown and use the 1.5-mile starter corridor on Trade Street that received funding from the federal government and which is expected to open in 2015.

Public transportation offerings on the highway would be reserved for long-distance service in the form of express buses, not the sort of inner-city mobility provided by light rail or bus rapid transit.

The transit line that would, and could still, run down Independence Boulevard — the 13.5-mile Silver Line — has been identified as a bus rapid transit corridor, though community residents have argued that they deserve light rail service similar to that currently provided on the Blue Line, which opened in 2007. Decisions on mode have been delayed repeatedly because of a lack of funding for the project and a focus on extending that rail line to the northeast, though even that project is being cut short thanks to budget shortfalls.

The basic assertions of the ULI group are sound from the viewpoint of urban design. By building new streetcar lines north of the freeway on Central Avenue (already being planned by the city, albeit without funding) and south of the freeway on Monroe Road, the fixed transit service would reach into the core of the neighborhoods they are meant to serve, rather than their peripheries, as would be the case if the bus or rail were concentrated on Independence Boulevard. This would, in turn, encourage automobile-oriented uses to stay in their place — near the highway — and encourage pedestrian uses on the much smaller roads where the trains would run. If the highway is a permanent feature on the cityscape, it is not necessarily one that should be attracting walkers, the primary users of any transit system.

As journalist Mary Newsom has written, Independence Boulevard’s urban form does not jive with the smart growth principles that are implicit in the theory behind the construction of new transit lines. When it was built, she writes, the highway “Celebrated auto-oriented suburbia, the “progressive” thinking of its time. Today, as cities spend millions to retrofit auto-only areas for transit and pedestrians, Independence survives as a fading tribute to a theory of city building that didn’t work. It’s lined with deteriorating strip development, its traffic still a reviled snarl.” This is no place around which to articulate a new vision for the metropolis.

Stations along the Blue Line light rail corridor, which is located in a railroad right-of-way running directly through several of the city’s denser neighborhoods south of downtown, have been surrounded with hundreds of millions of dollars’ worth of new residential and commercial construction since the rail line opened. The Silver Line, running in the middle of the freeway, would not repeat that story — but more civilized and appropriately placed streetcar routes could.

It would be inappropriate to discuss this issue without noting that an added advantage of the streetcar investment is that it would be less expensive than a full-scale bus rapid transit line in the center of the freeway (which, in turn, would be cheaper than a light rail line down the highway). The relatively inexpensive nature of the streetcar, though, is also its downfall: This transportation mode rarely includes dedicated lanes and thus vehicles crawl down the street. Streetcars are not rapid transit.

Yet this may be a compromise worth accepting in Charlotte. Is a fast bus rapid transit line acceptable if it forces its passengers to adapt to dehumanizing conditions? Or is a slow streetcar that can be designed in harmony with a pedestrian streetfront a better deal for the city’s future?

Image above: Chicago Red Line 63rd Street Station, from Flickr user Zol87 (cc)

Categories
Charlotte Commuter Rail Finance Light Rail

Charlotte’s Once Ambitious Rapid Transit Plan Faces Budget Ax

» A significant decline in local sales tax revenue means that long-term plans for transit expansion have had to be reevaluated with an eye towards fiscal reality.

Ridership on Charlotte’s transit system has grown substantially over the past ten years, increasing from an average of 39,100 daily users in 2000 to 103,500 in 2010. This successful ramp-up in public transportation use in one of the nation’s most sprawling regions can be traced to the 1998 passage by voters of a 1/2-cent sales tax for transportation funding; this measure allowed the local transit authority CATS to significantly expand the number and frequency of bus services offered, and construct North Carolina’s first light rail line, which opened in 2007.

That Blue Line was supposed to be joined by a network of six other corridors — light rail, commuter rail, streetcar, or bus rapid transit — radiating from Center City Charlotte. The Metropolitan Transit Commission’s 2030 plan estimated that tax receipts would provide enough funding to complete most of the projects by 2020, with everything in operation by the end of the time period.

The recession, however, has hit Charlotte hard. Most significantly, its biggest employer, Wachovia Bank, was threatened with bankruptcy and eventually bought up by San Francisco-based Wells Fargo. Consumer spending, like in many cities, declined massively. In 2008, revenues collected using the transit sales tax amounted to $71 million; two years later, the total had fallen to $57.4 million. This fall-off, which is expected to produce a total revenue shortfall of up to $1 billion by 2030, has forced the region to reconsider its plans for transit expansion.

In the process, the Charlotte metropolitan area is threatening to derail the positive momentum it has created for transit ridership. And its strategy to connect the whole region via radial lines from downtown is on the skids at least for the next decade, since no one seems prepared to raise taxes to complete the project. This reality is likely to encourage the sentiment that the transit system is only designed to serve some parts of the region, not everywhere.

This week, the Metropolitan Transit Commission, which oversees CATS at a countywide level, made the decision to effectively put two projects on hold indefinitely, including the Silver Line bus rapid transit corridor from Center City to Matthews and the Green Line streetcar from Eastland Mall to Rosa Parks Place and the Airport, via downtown. The two remaining projects — an 11-mile extension of the Blue Line light rail corridor to UNC-Charlotte and the 25-mile Red Line commuter rail from Center City to Mt. Mourne — remain on the books, albeit in underfunded forms. Plans for local bus service expansion will be canceled.

CATS is looking to cut $200 million from the $1.1 billion budget of the Blue Line extension, which is expected to see significant aid from Washington in the form of a New Start grant. If it does, the project could be under construction next year, with an opening in 2016. But the transit agency will have to reduce construction costs for that to happen: In the process, the line’s length may be cut, the number of stations may be reduced, and amenities along the line will have to be minimized.

For the $456 million Red Line, no such federal help is expected because of the limited ridership projected for the corridor. But the region only has 57% of the costs accounted for, so it is now hoping to develop a public-private partnership to ensure completion by 2018. That may be a futile approach, but the corridor remains in the discussion because it would serve several cities outside of Charlotte on its way north; because the Metropolitan Transit Commission’s board is constituted of mayoral representatives of many towns, not just the much-larger City of Charlotte, it has an incentive to promote a project that would serve them as well. Thus its relatively low projected ridership is the price to be paid for regional compromise.

But the 13.5-mile Silver Line has been less lucky, despite the fact that it would terminate in the suburban town of Matthews. Part of the reason is that it has for years been a source of controversy for inhabitants of the southeast sections of the region, who fail to understand why they will receive a bus rapid transit line while the rest of the area gets rail. Yet they will now have to wait much longer for any transit improvement at all.

Meanwhile, the Green Line — a priority of Charlotte proper but relatively unpopular at the regional level because of its lack of connections outside of the core city — is in a peculiar place because its first segment is currently under construction, with service expected to start in the next two years. A $47 million, 1.5-mile stretch between the Blue Line stop at the Charlotte Transportation Center bus terminal and the Presbyterian Hospital southeast of downtown was partially funded by the federal government’s Urban Circulator program earlier this year. But its 10-mile total length, not including the long-off airport link, would cost $500 million, too much for the region to afford. This means that a rail transit link downtown between the Red and Blue Lines simply will not be built.

The end result: The expansion plan, developed just four years ago, now seems more like fantasy than reality. Nothing other than the Blue Line extension is likely to be built unless there is political will to push for a tax increase for the program or a private partner is willing to drop hundreds of millions of dollars on a project, and neither of these seem like particularly realistic prospects.

The question is whether this situation will disrupt the delicate regional structure that Charlotte relies upon to fund its transportation program. The Blue Line extension and the under-construction segment of the Green Line will serve the city exclusively. If financing for the Red and Silver Lines cannot be obtained, will the towns at their proposed termini fight to remove themselves from having to pay the transit sales tax, citing lack of a return on their investment? Will the citizens of the cities involved, who reaffirmed the tax in 2007, claim that they were sold a bigger bill of goods than could ever be expected to be completed? These prospects, which would reduce funds even further, should encourage the region to work like mad to develop alternative financing systems to complete the entire 2030 plan.

Categories
Charlotte Finance Light Rail Seattle

When the Recession Strikes, Little Maneuvering Room for Better Transit

» Seattle’s large rail expansion program will be delayed thanks to a decline in local tax revenues. The sales tax comes back to bite.

The recession has not been kind to transportation agencies anywhere in the country. The loss of local revenues from dedicated taxes has in many places required agencies to reduce bus and rail operations — even with the significant aid that accompanied the 2009 Stimulus bill. But long-term consequences have been even more problematic for the hundreds of expansion plans either under construction or planned; in metropolitan areas from Dallas to Denver, previously funded projects have been put on hold.

Seattle’s Sound Transit is the most recent to announce its own problems: Last week, the agency revealed that its fifteen-year estimates for revenue collection established just two years ago would be 25% lower than expected. This means that a once $18 billion proposal to extend the region’s light rail system to the north, east, and south would have to be truncated by $3.9 billion, up from a $3.1 billion shortfall predicted just six months ago.

Though the region’s construction programs already in construction and in advanced planning — University Link and East Link, respectively — remain on schedule, a further extension of light rail facilities south into South King County past 272nd Street has been put on hold. A new transit investment in the region’s northern corridor (past Northgate) may no longer come in the form of light rail but instead in something less expensive, like improved buses. The creation of a new commuter rail link along the east side of the region has been suspended (though that project was to be funded primarily by private funds, so it could still be moved forward). All this in spite of the fact that Sound Transit has been able to literally quadruple ridership over the last ten years thanks both to the implementation of light rail beginning last year but also the improvement of regional bus and commuter rail services.

Seattle should comfort itself in the realization that despite all of these cutbacks, it is in a much better situation than cities elsewhere in the country. Example number one: Charlotte, whose countywide transit expansion program was revealed in the late 1990s and whose first light rail line has had high ridership, is facing a virtual shutdown in new construction because it has rightfully chosen to prioritize keeping its bus services afloat over spending on rail expansion.

Most cities have been especially affected by the recession because of their reliance on the sales tax to provide revenue. Of the recent referendums on transit expansion programs, almost all have involved a 1/2 cent or one cent increase in that tax; few cities have looked to other forms of revenue, like an income tax or a payroll tax. The consequences of this decision, however, have been devastating because sales tax revenues have fallen considerably as a result of the recession and the reduced standard of living experienced by the majority of Americans over the past few years. A more stable financing program for transit, using other forms of taxation, would ensure that planned projects actually get built.

The practically universal reliance on the sales tax is a “realistic” response to the sense that it is the most politically palatable form of taxation available. Because municipalities and regional entities are interested in producing stable coalitions in favor of transit expansion, they are required to institute revenue devices that are both regressive and unstable. That’s often because the business community — powerful in every area — is opposed to more progressive forms of taxation that threaten the salaries of their top executives. For many politicians, a sales tax is the most reasonable way to go about increasing funding. In addition, in many states, the idea of a special local or regional income tax is simply out of the question.

For cities like Seattle and Charlotte, what follows in an inability to proceed on schemes that were developed just a few years ago. But perhaps these cutbacks are simply the name of the game; it’s not like an increase in revenue through an income tax is even much of a feasible possibility.

Thus the current enigma: Should cities that had large transit ambitions scale them back due to having less money than once expected, or should they push for new revenue sources? The first option could be difficult to reconcile in the eye of the average citizen who voted for a sales tax increase on the assumption that he or she would experience significant improvements in transit service as a result. The second option seems unlikely to be supported by voters who are being asked to pay twice for something they were told could be accomplished after the first tax alone.

This situation puts transit agencies in a bind since they now appear as if they lied to the public when they promised certain amounts of spending during previous referenda. A more honest assessment of their travails would recognize that budget predictions are always predictions and nothing more; the severity of the recent recession was not something that was planned. Nonetheless, the public is rarely particularly sympathetic to the difficulties of government agencies.

Update, 28 September: I have updated the information about to reflect the state of the projects a bit more specifically.

Image above: Proposed entrance to the University of Washington Link Station, from Sound Transit

Categories
Charlotte Dallas Detroit Finance

Regional Transportation Authorities are not Necessarily the Solution to the Urban-Suburban Divide

» Developing common goals is more productive than forcing a merger of regional transportation agencies. An authority for Detroit comes closer.

If there’s anything Detroit needs most, it may be regional cooperation, where it finds itself distinctively behind the times. While some major cities like New York or San Francisco are large and wealthy enough to be able to close themselves off politically from the surroundings, Michigan’s largest metropolis benefits from neither of those characteristics, so it must find ways to make agreements with nearby municipalities.

Frequently mentioned is the idea of a regional transportation district, which would coordinate funding and spending activities at the metropolitan scale. A proposal for one is currently being considered in the Michigan legislature. But it’s not clear that the creation of such an agency will resolve some of the structural issues complicating politics in this metropolis.

The biggest problem is the metropolitan area’s racial and class disconnect: While the city is largely poor and black, surrounding areas in Oakland, Macomb, and Wayne Counties (the city is a part of the latter), which are its nearest neighbors, are mostly middle class and white. These differences — perhaps the starkest inner city/suburban divide in the country — have resulted in opposing decision-making about issues of metropolitan concern, including land use, the environment, and of course transportation.

The existing public transportation system is particularly balkanized, with inner-city trips being provided by the city’s DOT and connections between downtown and the suburbs by an agency called SMART, originally formed in 1967. This has produced a number of operational and perceptual difficulties, certainly not aiding in matters. To make matters more confusing, the M-1 Rail streetcar line planned to run 3.4 miles from downtown to the New Center along Woodward Avenue is to be built by a private consortium.

Hoping to stave off the further decline of their region — Detroit is one of only six large metro areas (of 52 larger than one million) that actually lost population between 2000 and 2009 — local leaders have called for greater cooperation, notably in the form of a regional transportation district, which would have the power to collect revenues from multiple counties and then be able to spend those funds on upgraded roads and transit. Detroit politicians have noted with interest the success of cities like Los Angeles and Denver in promoting such agencies and the resulting growth in their respective transit systems.

The problem for Detroit is two-fold: one, such a regional transportation district is unlikely to pass through the Democratically-controlled Michigan House, let alone the Republican-held Senate, neither of which have been particularly enthusiastic about increasing local funding; two, neither the City of Detroit nor Oakland County is particularly enamored with the current proposal, the first because of its conviction that the tax should come before the agency, the second because of its criticism of labor protections included in the bill.

Editorial boards for several of the local newspapers have suggested that the region must move past local parochial concerns if it is to find a way to survive the upcoming decades, which are unlikely to be any less difficult for Michigan than has been the recent past. And indeed, everyone, from Detroit Mayor Dave Bing on down, seems to agree that regional cooperation is necessary, and that transit corridors in the city would eventually benefit the suburbs.

But the assumption that the creation of a five-member authority with control over the region’s transportation finances will solve problems ignores the vastly different needs and wants of the inhabitants of different parts of the region. It seems useless to move forward with such a transportation district without first establishing regional, coinciding goals. Otherwise, the transportation district — even outfitted with a large amount of money under its control — could collapse into an infighting monster, certainly not anyone’s ideal outcome.

At the moment, Detroit’s biggest stumbling block seems to be the choice between a variety of potential future transportation modes. While many of the suburban areas are campaigning for a 67-mile “golden triangle” bus rapid transit system, the city has focused its resources on an eight-mile long version of the Woodward streetcar line. Meanwhile, Ann Arbor, 40 miles to the west, continues to campaign for a commuter rail connection. None of these projects seems likely to be fully built out without the support of a new regional transit district and its new revenue source. But the expectation that all programs could be constructed using the funds — as a sort of grand compromise necessary to getting both suburban and urban leaders on board — also seems unrealistic (especially in a time when SMART is seeing serious fiscal difficulties). Someone will have to choose what to prioritize at some point.

The example of Charlotte, North Carolina is worth highlighting. Back in 1998, the city and the surrounding towns in Mecklenburg County joined together in a Metropolitan Transportation Commission designed to eventually allocate funds received from a new 1/2-cent sales tax. A series of rapid transit projects designed by the Commission were supposed to provide services to every town — it was a “let them all eat cake” situation. Like most areas, however, Charlotte has seen a vast decrease in collections over the past few months, and its expansion program has been massively cut, with even the full extension of the popular recently built light rail line likely to be delayed for years.

Now, the city and its suburban partners are stuck in a rut. The city’s priority is an inner-city streetcar, whereas towns to the north want a commuter rail line. Because of the make-up of the regional Commission, those latter interests will inherently win out — because they represent a majority of the votes on the board, and because if they don’t support the transit system’s advancement, they could simply pull out altogether, leaving the center city in an impossible situation with inadequate funds to get anything done. A similar situation is plaguing recession-hit Dallas as well, which has had to compromise a downtown light rail route in favor of one heading towards the suburban city of Irving.

The existence of the regional transit district in itself, in other words, cannot ensure regional agreement about how to proceed with investments when there is a limited budget. Though Charlotte and Dallas have indeed been able to construct major new transit projects over the past decade, their advancement was largely due to a growing economy that made projects throughout the region possible. Adjusting to new fiscal realities won’t be easy for any of these cities; their transit authorities are not guaranteed to stay intact once certain areas of the region are denied funding for their desperately wanted new projects.

Thus, instead of rushing into an inter-municipal compact, Detroit might want to focus on first developing solutions that appeal to everyone involved. Everyone should agree on the same priority list — with funds to be spent in a clear order, if and when money is available. Establishing such a compromise may be an intractable quest, but so may be creating a functional regional commission during tough economic times.

Image above: Downtown Detroit Rosa Parks Transit Center, from Flickr user Buddahbless