Detroit Leads the Way?

February 7, 2012 by · 4 Comments
Filed under: Car Stop 

Detroit’s off-again, now on-again Woodward Avenue streetcar line offers a model conservatives should favor (see my colleague’s earlier piece; Detroit Misses the Train (again)). Most, perhaps all of the money to build the 43.4 mile line will be private.

The source of the funds will not be investors, but philanthropists. Wanting to revitalize their home city of Detroit, they have chosen to put their money not into hospitals or museums or schools but into something that will create more money in the form of economic development. From that perspective, a streetcar line is an excellent choice. If it has the same effect streetcars have had elsewhere, the Woodward Avenue corridor could soon see substantial new construction and business activity.

A recent article on the Woodward Avenue streetcar line, “Three Cities, Three Tales of Tenuous Transit Plans” by Mark Bergen, found in the January issue of Forbes magazine, makes an interesting observation. It quotes Matt Cullen, chief of the coalition that is funding the streetcar, as saying its “backers are ‘people whose heart and soul are with the city of Detroit.’ In some sense, the philanthropists are shareholders of the city.”

His is speaking metaphorically. But what if we allowed major donors to important city infrastructure projects, whether philanthropists or investors, to become actual shareholders of the city? It might work something like this. Detroit, seeing the benefits private funding of infrastructure can bring as represented by the Woodward Avenue streetcar, establishes an Urban Shareholders Council. The Council issues Detroit Infrastructure Shares at a price of, lets say, $1,000 per share. Owning shares allows a person to vote at an annual meeting, just as in a private company. That meeting elects not a board of directors, but the Urban Shareholders Council.

Here is where my proposal gets conservative. The Urban Shareholders Council is given real authority over such matters of city governance, specifically those aspects that relate to economic re-development and growth. The Detroit city council cedes its own authority over such matters to the Shareholders Council. Being a Detroit shareholder is not merely an honorific; it brings an important voice in the future of the city.

Liberals will scream that this would diminish their favorite false god, “democracy.” People willing to put their money on the line for the city’s future would have a stronger voice than those who merely stumble into a voting booth every couple of years, if they do that. That is true – - and a good thing.

Conservatives are not egalitarians. We think people who are willing to invest in something should have a greater say than those who are not. Usually, they will be more knowledgeable about whatever they are investing in. They are more likely to care about long-term results. And they may be less susceptible to corruption, which in Detroit city government, reached notable proportions in recent years.

Detroit was, not too many years ago, a magnificent city. If it is to become one again, it needs to draw in private funding for infrastructure. All levels of government are broke. Without good infrastructure, economic re-development is difficult. The Woodward Avenue streetcar shows that infrastructure can attract private money. Why not take a bold step forward and see how much more private funding might be obtained in return for a voice in determining the city’s future? Given the shape Detroit is in now, what does it have to lose?

William S. Lind serves as Director of The American Conservative Center for Public Transportation

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Detroit Misses the Train (Again)

December 27, 2011 by · 4 Comments
Filed under: The Right Answer 

Detroit has suffered another disappointment, this time at the hands of a Republican Governor (and some very shaky municipal finances), with the apparent cancellation of the M1 Woodward Avenue light rail/streetcar project.

This has a familiar ring to transit historians. Detroit has studied and pondered workable rail rapid transit projects many times in the past, some dating back to the early twenties and some getting tantalizingly near to actual implementation (see Downtown: Its Rise and Fall, 1880-1950, by Robert M. Fogelson, for the details).

Detroit’s last streetcar line (Woodward Avenue as history would have it) was its strongest, supporting headways of 90 seconds in the rush even up to its untimely demise in March, 1956. Although the streetcar network was owned and operated by the City of Detroit, the automobile industry and especially General Motors had their sights on replacing the rail service. After all, this was (and is) the Motor City. After several unsolicited studies of Detroit’s transit system by GM in the late 1940’s and early 1950’s (all of which recommended, unsurprisingly, an eventual all-bus network), the city was unable to resist GM’s constant pressure. Although the city had embarked on a modernization program after World War II (which included purchasing 184 new PCC streetcars delivered between May 1947 and October 1949), it all went for naught. The streetcars, some only seven years old and hardly depreciated, were packed off to Mexico City at fire sale prices. Various efforts in subsequent years (especially during the Coleman Young administration) to build a subway under Woodward Avenue were unsuccessful. There was no money and only hostility from the surrounding region. Mayor Young’s own hostility issues didn’t help matters.

The current effort was spearheaded by a private entity, The Kresge Foundation, which led a private business group to commit $100 million for a 3.4 mile line from Detroit’s riverfront to Midtown. The Kresge Foundation pledged $35 million of its own money to the effort. This modest endeavor blossomed into a much larger project extending an additional 5.9 miles to reach Eight Mile Road. The expansion of the project was made possible by the promise of federal monies. What had originally been envisioned as a modest $150 million privately funded project had ballooned to $600 million.

The stated reason for pulling the plug was that the Feds feared the city would not be able to fund the operating costs ($10 million annually) for the expanded line. This was and is no small concern since the city has been teetering on the brink of insolvency for some time and finances have recently worsened. That this was only recently noticed by the feds leaves us incredulous and concerned. The current mayor of Detroit, Dave Bing (yes, that Dave Bing, of NBA fame) has been working feverishly to improve the fortunes of the city but he can pull only so many rabbits out of an increasingly tattered hat. The bus service currently operated by Detroit’s Department of Transportation (DDOT) is slow, inefficient, and woefully underfunded. Even the automated downtown people mover has operating cost issues and might have to shut down.

Stepping in to save the day, Michigan’s Republican Governor, Rick Snyder, announced plans for a network of high speed buses, or Bus Rapid Transit (BRT). Governor Snyder’s 110 mile regional plan calls for BRT to supplant the Woodward rail line and connect the city to the three surrounding counties. And all for $500 million (a similar plan contemplated earlier had an $800 million price tag). One can only surmise why the project became cheaper by almost 40%.

However, buses normally have higher operating costs than rail. So, how will BRT solve the lack of operating money issue?

Will it get built? As Billy Crystal muttered in The Princess Bride, “It’ll take a miracle.” While previous plans have tripped over the issues of regional cooperation, regional governance and the like, the governor’s BRT proposal makes no attempt to address these critical issues.

A bright ray of hope was detected on Monday, December 19th, when Rip Rapson, the President and CEO of The Kresge Foundation, announced that his group even now remained committed to the original 3.4 mile project. He pointed out that the “mere prospect of a light rail line” had spurred substantial development along the corridor, encouraged large employers “to move or expand their investments and footprint in the city,” attracted over $100 million in new grants and loan guarantees by national foundations and financial institutions, and – – maybe as important as the other factors – – had given long suffering Detroiters a degree of hope and excitement that the line could be a transforming force for their neighborhoods. Rapson stated that he thought the M-1 project would work well with the Governor’s BRT plan. He did not mention, however, who would pay the operating costs for the smaller project.

A number of members of Michigan’s Congressional delegation have now asked for reconsideration of the decision. They understand the potential of the M-1 rail project to transform the corridor that it will serve.

It will be interesting to see if the governor can make room for this private initiative in his BRT proposal. If not, we can probably conclude that BRT is just a stalking horse for suppressing Woodward rail. If so, the governor will have perhaps revealed his true colors. He’s really for continued dependence on automobiles.

As a Republican, the governor should be championing an initiative from the private sector as consistent with conservative principles. This project represents the private sector at its finest, stepping forward to provide a majority of funding and leadership for a worthy project. It could become a model for private – public cooperation.

Conservatives should watch this closely. The original project makes sense. It fosters economic development, provides funding for most of the project, and promotes a sense of place and stability in an area that dearly needs it. What will “conservative” Governor Snyder do? Stay tuned.

Glen Bottoms is Executive Director of The American Conservative Center for Public Transportation

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The Word from the UK

December 21, 2011 by · 1 Comment
Filed under: Car Stop 

The British Department of Transport released a paper in September, 2011, that should get wide attention in this country. Titled “Green Light for Light Rail,” it directly addresses the greatest threat to the light rail renaissance in the U.S.: escalating costs.

In the paper’s foreword, Undersecretary of State for Transport Norman Baker puts it bluntly: “past experience has shown that implementing light rail solutions has been too expensive.” The Executive Summary notes the price paid for excessive costs: “The high capital costs have meant that in practice, even where passenger forecasts may justify its consideration, light rail has often not been seen as an affordable option for local transport authorities to pursue.”

Of particular importance is Chapter 5, “Reducing the barriers to further investment in light rail.” The chapter offers many practical suggestions for cutting capital costs. The first is standardization. As in the U.S., every British city wants its own, unique light rail vehicles. The study notes, “Standardization has been a recommendation made by all of the Parliamentary Inquiries into the costs of light rail.” One easy way to standardize vehicles in America would be to start building PCC cars again. Their design was so superb that they are essentially timeless.

Chapter 5 also addresses the bane of American light rail, over-specification. It correctly notes that “More optimally designed systems might be lighter and less technologically advanced and so far cheaper to procure and maintain.” The study also identifies an important reason for over-specification, aka gold plating: “There is a perceived over-reliance on expertise and procedures from the heavy rail industry.” We have seen this repeatedly in this country, in the form of track and overhead that appears to be intended for the Shinkansen.

Most important of all is the last sentence in Chapter 5: “The Department would not expect any funding to be provided for any light rail system unless it follows a more standard and uniform core design taking advantage of lower cost specifications.” Hurrah! When will FTA lay down the same policy here? Instead of saying “Build it cheap or do without federal money, our FTA is planning to fund a streetcar line in Houston, Texas that will cost more than $100 million per mile.

This brings up what may be the most interesting page in the entire interesting study, page 26. Page 26 is devoted to Table 4.1, Capital costs of English light rail schemes. At the same time the British government is working to bring down costs, we find that by American standards, many British systems were remarkably inexpensive to build. The average per-mile construction cost for British light rail systems, excluding underground sections, and at 2010/2011 prices (converted into dollars at a rate of $1.60 to the pound) was $40.6 million too high in my view. But the Croydon Tramlink was built for $23.8 million per mile. Midland Metro (Birmingham) for $23.4 million per mile, Manchester Metrolink for $18.7 million and the Sunderland Extension to the Tyne & Wear Metro (Newcastle) for a remarkable cost of only $16.6 million per mile.

It is time and past time for FTA to set a should cost figure. Instead, the federal watchmen are asleep and the consultants and contractors are looting the store. $100 million plus for a streetcar line? Bah! Humbug!

The Study “Green Light for Light Rail” by the UK Department of Transport can be accessed (and downloaded as a .PDF document) at:
www.dft.gov.uk/publications/green-light-for-light-rail

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