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Charlotte's plans to build 1.4 miles of a 10-mile streetcar project with a $25 million federal grant and $12 million in city money has plenty of folks wondering if City Hall's gone mad. As Mayor Anthony Foxx said, with some understatement, "I know it's not without controversy."
A lot of thinking goes like this: In a recession, why spend millions on a silly uptown frill when they're laying off teachers and closing libraries?
It's easy to understand such a reaction. But government budgets make things more complex. Further, viewing a streetcar as just a people-mover uptown misses the bigger picture. It's a growth and development strategy. It's fiscally prudent in the long term and will have its most positive effect in areas outside uptown.
Let's start with teachers, libraries and other cuts. Recession-induced shortfalls have meant closed libraries and hundreds of school layoffs. Obviously, $12 million would ease that pain. And if the $12 million could be spent to pay teachers, we'd push for that.
But the $12 million is in the city's capital budget. It can't help other governments with continuing costs. If the city rejected the $25 million grant and pocketed its $12 million, the federal millions wouldn't even ease the federal deficit but would go to another city. Not a penny of the $12 million would go to hire teachers - a state and county expense - or help county-funded libraries or parks.
The city's long-term strategy is for a 10-mile streetcar from Beatties Ford Road out Central Avenue. The vision is to lure valuable development to west and east Charlotte, which have seen precious little of it recently. That, in turn, improves tax values in those areas - which long-term adds tax revenue to city and county budgets, thus helping schools and libraries.
Most other U.S. cities that have built streetcars or other rail transit have seen increasingly valuable development. A Portland, Ore., streetcar open since 2001 lured 4 million square feet of high-density development, a 2005 study found. A Seattle analysis of land values near its new streetcar, opened in 2007, found $68.4 million in increased property value.
Charlotte itself offers a good illustration of how rail transit, as opposed to buses, lures development. That's because rails offer permanence, which gives developers and lenders confidence to invest. Even before Charlotte's voters OK'd a transit tax in 1998, a short trolley-ride project along a South Boulevard rail bed inspired redevelopment of Atherton Mill, the Lance Factory and other projects. As of April, development in Lynx station areas totaled more than $247 million.
Doesn't Charlotte have better uses for $12 million, such as more police? Again, police pay is a continuing expense. So $12 million in the capital (one-time) expense budget doesn't help. Also, the city last year added 125 new officers, 50 of them with a three-year federal stimulus grant. Even the police chief didn't seek more officers in this year's budget.
Yes, $12 million is a lot. But transportation projects are expensive. The city's capital spending plan had a total of $139 million going to roads in the past two budget years. Voters in 2008 OK'd $170 million in street bonds, and $85 million in 2006.
Just one city project - to upgrade Rea Road between Colony Road and N.C. 51, a 1-mile stretch - is budgeted at $22.5 million.
Although the timing of the project, during a recession, makes plenty of voters upset for obvious reasons, the long-term value of the streetcar is significant. Building it in segments is smart, and it's a strategy that's worked in other cities, including Portland.
The city still must find $1.5 million in yearly operating costs. We hope they'll explore innovative tools in other cities, such as tax districts and parking garage bonds.
Long-term, Charlotte's vision must be to lure denser, more cost-effective development to areas with already-built infrastructure. Low-density sprawl sucks up large sums of public money to extend sewer lines, roads and public services over wider expanses.
The streetcar may look like a frill. It isn't. It's a fiscally sound investment, and part of a prudent long-range strategy.
