Tempe council seeks federal funds for streetcar system

by Dianna M. Nanez – Feb. 2, 2011
The Arizona Republic

The Tempe City Council directed its staff to move forward with an application for federal funding to help build a streetcar system that would travel along Mill Avenue between Rio Salado Parkway and Southern Avenue.

Tempe hopes to use a federal grant to pay half of the estimated $160 million cost to build the 2.6-mile length of streetcar track

Hillary Foose of Metro light rail has said the remaining funding would come from Proposition 400, which was passed by Maricopa County voters in 2004 and extended a voter-approved half-cent-per-dollar sales tax by two decades.

The streetcar is similar to light rail in that it runs on a rail line, but streetcars are smaller in length and width than light-rail vehicles. The stops along a streetcar line are similar to bus stops and more frequent than light-rail stops. Streetcars run as a single car, where light rail usually links two or more cars.

To apply for a federal grant, Tempe must outline options to pay for operating a streetcar. If the project is approved for Federal Transit Authority funding, construction would begin in 2013 and end in 2016. The cost of operating the streetcar in 2017 is estimated at $3.1 million. That cost would be offset by fare revenue estimated at $618,000.

In the past year, many public-transportation users have opposed cuts to bus services and the addition of the streetcar, saying Tempe would get more value out of investing in improving its bus system.

Although Tempe has struggled in the tough economy to sustain funding for its transit operations, council members cited economic benefits expected to come from building the streetcar line. Jones said the benefits include increased property values, new development, increased retail activity and increased leasing and rental activity and rates.

There are worries that federal funding for transit projects will be cut as the U.S. Congress works to reduce the nation’s debt. But regional transportation officials at Thursday’s council meeting said they doubted transit projects would take too big of a hit. Construction of freeways, railways and other transportation projects have long been considered essential to job growth, Metro CEO Steve Banta said Thursday, responding to council members’ questions regarding the likelihood of Tempe garnering federal funding.

Mayor Hugh Hallman acknowledged that “as a transit model, (a streetcar) may not be the most cost effective.” However, he said, building a system that operates on a permanent track leads to economic development that is not seen when bus routes alone are increased. As evidence of the positive effects of such systems, he pointed to the transformation along Apache Boulevard in Tempe where light rail was built, and to the neighborhood and commercial revitalization Portland saw when that city installed a streetcar system.

“I remember what Apache looked liked, and what it looks like now. (Other cities were) asking how can we get into what Tempe is doing,” Councilman Corey Woods added

Tempe transit officials have developed a plan for restructuring bus service to eliminate redundant routes with the addition of the streetcar. Those changes are expected to save the city money and offset the cost of streetcar operations. At Thursday’s council meeting Ken Jones, Tempe’s finance and technology director, provided the council the following ideas to increase annual revenue:

– Advertise on Tempe bus, light-rail and streetcar shelters: $75,000.

– Lease or operate the parking lot at Apache Boulevard and Dorsey Lane (90 spaces that could be used for park-and-ride near a light-rail stop; assume 75 percent of capacity): $20,000.

– Lease the parking lot at Apache and Price Road (283 spaces; assume 75 percent of capacity): $100,000.

– Increase parking meter rates by 33 percent (from $1.50 to $2 per hour) over the next six years: $100,000.

– Increase assessments paid by the Downtown Tempe Community Inc., which manages downtown for landowners, by 10 percent over the next six years: $59,000.

– Install solar panels on the covered parking at the Price/Apache lot to reduce energy costs: $15,000.

– Implement a fee to recover 50 percent of Tempe’s cost for K-12 free student ridership ($432,000 cost to Tempe): $216,000.

– Benefit from increased parking-citation revenue related to enforcement partnership with DTC: $336,000

– Consider 1 percent increase in retail sales (and transit-tax collections) in businesses in the Mill Avenue District and along the length of the modern streetcar line: $95,000.

Read more: http://www.azcentral.com/community/tempe/articles/2011/02/02/20110202tempe-trolley-federal-funds-streetcar-system0202.html#ixzz1CuT4iClM

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