How to Pay for Skyway Extension

[dougskiles]

Minneapolis is seeking to do what several of us have been talking about for funding transit systems:  Set up value capture (or Tax Increment Finance) districts within the areas around the proposed stations.  As these areas increase in property value, a portion of the additional tax revenue is used to pay back the bonds.

I like this for several reasons:

1) It will neutralize some of the politics involved with density NIMBYism.  If you an area wants a transit system, then they have to accept a certain level of increased density.
2) We wouldn't have to explain to people in outer 'burbs why their tax dollars should be used for something that they wouldn't ride (if only we could use that logic on the outer beltway...)
3) It will further demonstrate the value obtained by fixed transit systems and why we can't look only to farebox collections as a justification for operation.

http://www.startribune.com/blogs/208373671.html

State gives city new tool to fund streetcars
Posted by: Eric Roper Updated: May 21, 2013 - 6:46 PM

One provision in the state tax bill could have a significant impact on Mayor R.T. Rybak's dreams of building a streetcar in Minneapolis.

The bill allows the city to dedicate tax revenues from several specific parcels around Minneapolis to help pay for a new streetcar line. The city pushed for the new funding method because, unlike regional transit like light rail, streetcars would be a localized project requiring more municipal investment.

Federal funding is still key to the deal. The city won federal funding to perform an alternatives analysis for a line along Nicollet and Central Aves. -- which is almost complete -- and city staff are preparing to apply for a TIGER grant to help fund the line itself.

The "value capture district" designated by the state for funding streetcars is similar to tax increment financing. It uses revenues from parcels near the transit line to pay off bonds issued to build it.

The money could be used to pay for planning and constructing the streetcar line, including transit stations, as well as acquiring or improving public space, according to the legislation.

Mayoral aide Peter Wagenius said they expect the parcels identified in the tax bill could generate about $5 million a year and support a $50 million bond issuance.

Minneapolis had pushed to give cities a broad authority to use tax increment for transit development, but walked away with a “pilot project” focused solely on the Nicollet-Central streetcar.

“This is a big victory," Wagenius said. "In a session where nothing happened for transit, we found a way to keep moving forward on transit. And we’re really proud of that.”

So which parcels will generate the money for the streetcars? They include the future location of two high-rise apartment buildings and several other sites where developments are already in the works.

That could set up some interesting discussions at the City Council, since property taxes from those properties would be directed into the streetcar rather than the general fund. Hundreds of new residents -- the apartment buildings are 36 and 26 stories tall -- will simultaneously need city services, which puts more pressures on the city budget.

"What we hope to prove by the end of this project is that we will get an increase in value along the corridor beyond that which is projected on these six blocks," Wagenius said.

Wagenius noted that a another key difference between this and tax increment is that it benefits a public amenity rather than a single developer.

[spuwho]

Interesting way to fund transit. I hadn't heard of doing it this way and I agree it is very unique.

But I think transit funding needs to be part of a regional transportation comprehensive plan.

I remember a town that didn't have the money to fix a local neighborhood storm sewer problem. So they proposed a 4 block TIF and were going to repay the bonds to fix it by pushing the charges through a special tax district directly on the homeowners.  That didn't go over very well with the people in the proposed TIF.

Yes, it was going to fix the problem. Yes, it would do it at a reduced cost to the municipality, since only the beneficiaries were paying. But the point was missed that these people in the 4 block space hadn't done anything to promote the flooding. (it was the development of an unincorporated set of parcels nearby) They had paid their property taxes faithfully over the years (some residents had been there for nearly 30 years) and wondered why it was OK for them to fund other city enhancements, but they had to pay for their own. The city relented, re-financed existing bonds and fixed the problem.

I am also concerned with the TIF causing a local TOD inflation, where due to the TIF "overhead", rents, ownership, leases all would be significantly higher than those outside of the TIF. How far does the TIF extend beyond the station? Would a 3 block TIF cause arbitrage for properties in the 4th block, because they aren't subject to the TIF?

Also I wonder about the double standard proposed, where we say toll roads with user fees are evil, but TIF financed light rail is OK. When essentially they are using the same tax free financing approach?

If the local authority decided to build a new expressway near the light rail entity, what kind of leverage would the TIF payers have? Not nearly as much as the regional taxpayers.

People need to think regionally on transit issues, not just in their "space". Roads, rail, bus, air, all have relationships that need to be planned in concert with one another. We have already seen what happens when roads are planned in a vacuum for so many years, light rail can't be the same.

[thelakelander]

A TIF works for smaller urban circulator systems, such as a downtown streetcar (ex. Cincinnati has a TIF to partially fund their streetcar project) or Skyway extension but other funding sources would be needed for a regional interconnected transit system.  For example, in Minneapolis, they are talking about a TIF for a short downtown circulator (streetcar) system.  However, multiple counties agreed to tax themselves for more extensive light rail, commuter rail and bus improvements.

Next in line for light rail is the Central Corridor project, which will connect downtown Minneapolis and downtown St. Paul. The project is expected to gain federal approval and funding in time for construction to begin in 2010, with completion in 2014.

Five metro counties voted last year to tax their residents one-fourth of one percent to help fund transit projects in the Twin Cities area.

Hennepin County Commissioner Peter McLaughlin says the $85 million a year raised by that tax is only a portion of what's needed.

"If we're going to do a truly robust build-out, we're going to have to identify additional funding to get there to satisfy the demand that is out there," said McLoughlin. "But we're way better than we were five years ago, when we had to just cobble this stuff together."

http://minnesota.publicradio.org/display/web/2009/06/25/hiawathalrt_fiveyears

[thelakelander]

Here's how Cincinnati cobbled together a variety of funding sources for their $125 million streetcar project currently under construction:



http://www.cincinnati-oh.gov/streetcar/about-the-cincinnati-streetcar/streetcar-funding/

[dougskiles]

As Lakelander pointed out, the TIF concept is primarily for local circulator systems or extensions (like our Skyway).  Regional systems should be funded by a regional approach.  Unfortunately, there doesn't seem to be much appetite in our region for any kind of tax increase to fund regional transit (any time soon).  I believe we have a much better chance with approval through the smaller TIF approach.

[thelakelander]

^It depends on what we're trying to accomplish.  A TIF may be best for San Marco but it might not amount to much to improving transit connectivity in Durkeeville or Springfield. However, I'm not sold it has to be either or.  I'm also not sold that Mandarin or Argyle residents should have to pay for it......just like I'm not sold Riverside residents should be funding expansions to roads like Hodges and Kernan. Mobility zones was one thing I loved about the mobility plan and fee structure.

I see little reason why a Skyway extension or Streetcar has to be funded by a regional approach. There's several creative options out there to fund an urban circulator.  Mobility Fees, TIFs, private investment, TIGER grants, urban circulator grants, CMAQ grants, Small Starts, etc. are just a few of them.  Our problem isn't funding, instead it's commitment and we use the excuse of "no funding" to not do anything.  Make the commitment and we'll have all the funding options and will to take advantage of them to get things done.  Illustrating the lack of commitment is the $100 million of BJP was supposed to go to transit.  For whatever reason, JTA blew that opportunity chasing BRT that no one else wanted and that cash ended up in the courthouse.  If we had true commitment, that $100 million would have been quickly leveraged with a variety of other funding opportunities and we'd already have an operating LRT system today.

Nevertheless, even short extensions won't significantly alter the Skyway's effectiveness if the rest of the transit system is continued to be ignored.  Extensions to Brooklyn and San Marco would definitely result in hundreds of millions in TOD (which, imo makes them worth doing) but you won't see ridership spikes until it's properly feed with a more extensive and connected transit network. So one of best things we can do for the Skyway is radically revamp the entire bus network to a point to where they complement each other as opposed to compete.  Looking regionally, there's still opportunity to work with others like AAF and Amtrak (why are these guys not back in DT already?) for other modes.  You can't build a world class connected transportation network all alone.

Moving forward, there's also the issue of the Skyway being obsolete. It's aging and nobody really utilizes that type of rolling stock.  Assuming there was an expansion, could we even purchase new cars to maintain the existing headways?  There needs to be serious discussion on when is the right time to look at commonly used technologies. If there is a chance that the Skyway infrastructure could be converted into something like a modern streetcar, we need to seriously consider when is the time to make a conversion and at what costs. 

[thelakelander]

I wonder if something like this could operate on the Skyway's elevated platforms if rails were installed in replacement of the center beams?





If it could, then it would be possible to actually drop such a system to grade and cheaply extend into additional neighborhoods.  That would resolve the "need to transfer" that so many worry about here.

[dougskiles]

^Surely we could make such a conversion.  If we can get the Skyway extended as an elevated system over the FEC tracks in San Marco and over State & Union in Springfield, all else should be on grade.  The counter argument will be that any system operating in shared right of way will require a driver and eliminate the automated part.  But I don't see why the driver couldn't board the train at the ends of the current elevated line and make it manual operation on only the extended portions.

[Ocklawaha]

Before he left JTA, I asked Steve Arrington about the load limits on the Skyway, he told me it was designed to support vehicles up to LRV in size. Where you have some expensive problems is the curve coming off the Acosta on the north bank, the spaghetti of roads, rails, and piers, leaves VERY little space on the upper right (on a northbound car), not sure this would clear an LRV without the impossible task of moving bridge piers around.

Drivers, (actually operators - ) could board at the end of the elevated portions, but as the elevated portions would be so short, I doubt it would be worth the trouble of giving up a on-site operator.

Such a conversion would also likely need a healthy portion of the Stadium extension completed as you wouldn't want to hit street level in front of BOA.

[thelakelander]

Ock, you don't think a traditional streetcar or some of the more compact modern versions can't navigate the Acosta Bridge's Skyway ramps? There's not much difference in scale, compared to the original 3-car Skyway rolling stock design.

[thelakelander]

^Surely we could make such a conversion.  If we can get the Skyway extended as an elevated system over the FEC tracks in San Marco and over State & Union in Springfield, all else should be on grade.  The counter argument will be that any system operating in shared right of way will require a driver and eliminate the automated part.  But I don't see why the driver couldn't board the train at the ends of the current elevated line and make it manual operation on only the extended portions.

The Skyway is already over Union and any extension north would have to go over State, even if it were to drop to grade. Also, an AGT system isn't always cheaper to operate and maintain. Especially if you have to invest in custom built parts to keep it afloat. Going traditional and having operators may be a positive.

[Ocklawaha]

On your first question we need to find the car profiles which should be available. That clearance area is very tight, maybe a foot +/- a long car would stretch over that limitation and take out the pier. Perhaps those LRV's with the short articulated body segments would work.

Getting it over State Street would set the stage to run straight northwest to UF Hospital and then perhaps follow Moncrief, the Norfolk Southern or CSX lines into the Northwest side of town. Brooklyn is already at grade that it's another no brainer to head south into Riverside. Lastly both San Marco and the Woodstock (Farmers Market) line both need a 1/2 mile or so of elevated track to be effective in their respective neighborhoods. I would suggest if it is LRT, or Rapid Streetcar, that we would also need to ramp up and down from the area of the old Mayport Branchline (right of way is intact to Atlantic) which opens the door for a future sprint down Beach.

[tufsu1]

As to the premise of a regional tax, that's the job of the newly created Regional Transportation Commission

[dougskiles]

As to the premise of a regional tax, that's the job of the newly created Regional Transportation Commission

So they just automatically have enough taxing authority to fund a regional transit system?

Or do they have to go out and sell the idea to the member counties?

[thelakelander]

On your first question we need to find the car profiles which should be available. That clearance area is very tight, maybe a foot +/- a long car would stretch over that limitation and take out the pier. Perhaps those LRV's with the short articulated body segments would work.

Looking at some general characteristics (ex. vehicle dimensions, min. turning radius, max slope, etc.) LRT is easily out and streetcar seems workable.  Assuming the existing Skyway system is already designed for an articulated 70' long three car trainset, both modern and heritage streetcar are doable.  Assuming this is the case, perhaps it's time to conceptually look into the idea of converting the Skyway into streetcar.  That would certainly change the conceptual routing of streetcars through downtown and into the neighborhoods each line penetrates.

Skyway - 3 Car Configuration


Articulated Streetcar (Portland)



Here's a great comparison of automated guideway system design characteristics:

http://www.indympo.org/SiteCollectionDocuments/www.indympo.org/PDF/tech_asse_3.pdf

The Skyway's design characteristics are on page 11 of 41.


Skyway
Train dimensions: 40' to 70' length x 6.9'width x 8.5' height (2 to 3-vehicles)
Vehicle capacity: 8 seated/37 standees
Minimum turning radius: 60'
Maximum Grade: ??

Light Rail (Pittsburgh)
Train dimensions: 84'8" length x 8'9" width
Vehicle capacity: 64 seated/61-125 standees
Minimum turning radius: >85'
Maximum Grade: 6%

Modern Streetcar (Portland)
Vehicle dimensions: 66' length x 8' width x 11' height
Vehicle capacity: 30 seated/127 standees
Minimum turning radius: <60' (DC streetcar is 65')
Maximum Grade: 9%

Heritage Streetcar (Tampa)
Vehicle dimensions: 46' length/8'6" width
Vehicle capacity: 44 seated/44 standees
Minimum turning radius: <60'
Maximum Grade: 9%


http://www.rtd-fastracks.com/media/uploads/gl/lrt_streetcar_analysis_formatted.pdf

http://www.railwaypreservation.com/images/Streetcar%20Vehicle%20Selection%20sm.pdf

http://www.dc.gov/DC/DDOT/Publication%20Files/Projects%20and%20Planning/Standards%20and%20Guidelines/DDOT_DCStreetcarDesignCriteria_January_2012.pdf