Two years ago, Charlotte’s streetcar carried its first passengers and brought the hope that it would eventually spark new development in areas that had been overlooked, particularly near Johnson C. Smith University.
The $37 million streetcar, or Gold Line, exceeded ridership expectations in its first year.
But in its second year, ridership has fallen by more than 7 percent. And there hasn’t been much movement toward building apartments or retail along the line, which was the city’s primary reason for building the Gold Line. Construction began in January on the streetcar’s second phase, which will open in 2020.
Elizabeth Avenue, between Central Piedmont Community College and Novant Health Presbyterian Medical Center, is part of the streetcar’s first phase – a 1.5-mile line from Spectrum Center to the hospital.
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It remains a hotspot for restaurants. But a plan from Charlotte-based Grubb Properties to build 550 apartments, along with shops and restaurants, on Elizabeth Avenue hasn’t broken ground. The stretch of road, marked by large surface parking lots, looks largely the same as it did in July 2015, when Grubb first announced the project.
On the west side, along the path of the Gold Line’s second phase, there’s been little movement so far by developers to buy or rezone parcels for commercial or apartment development. Charlotte Center City Partners has started a new “Historic West End” initiative to promote the area along the Gold Line in anticipation of the streetcar’s opening.
There have been some sporadic changes.
Hopper Communities is building a townhouse development at Fourth Street and Grandin Road, about a block from the streetcar’s second phase. Real estate records show a corporation affiliated with the Duke Endowment bought the defunct Park-N-Shop supermarket at Trade and Montgomery streets in December for $1.35 million. A Duke Endowment representative didn’t return a message seeking more information on the group’s plans for the vacant store.
The Park-N-Shop site is symbolic. Earlier this year, the city held a groundbreaking ceremony there for the Gold Line with former mayor and then U.S. transportation secretary Anthony Foxx, who pushed for City Council to fund the streetcar.
By contrast, the Blue Line streetcar extension from uptown to UNC Charlotte has attracted a flood of development activity, similar to the boom along the light rail’s southern stretch that drew thousands of new residents and reshaped South End. Developers have announced plans for or started building almost 3,900 new apartments along the Blue Line extension, which is expected to start carrying passengers by March 2018.
Todd Williams, Grubb Properties’ chief investment officer, said the company has been focused on making sure the Elizabeth Avenue restaurants it leases are healthy. He pointed to new tenants along the streetcar route, such as Luca, Earl’s Grocery, Spoke Easy and reopened Elizabeth Creamery.
“(Restaurants) struggled during the construction of the streetcar and we lost some tenants during that period,” he said.
Although there’s no news about when construction of the Grubb apartments on Elizabeth might start, Williams said the project is still in progress.
“We’re committed, and Novant Health, our partner is committed, to figure that puzzle out,” said Williams. The apartments Grubb hopes to build would be lower rent than the luxury units that have dominated development in recent years, Williams said, but rising construction costs and tougher financing terms are challenging.
“The banks have really pulled back on construction financing, especially for apartments,” he said. But Williams expects the next phase of the streetcar will aid development by connecting more people to prospective businesses and linking schools such as Johnson C. Smith and Central Piedmont Community College.
“It’ll open up ridership across that entire corridor,” said Williams.
“Getting all those institutions linked up along that corridor is going to be really, really powerful.”
Charlotte City Council member Al Austin said new development will come to the Beatties Ford Road corridor eventually.
“We have gotten quite a bit of interest on parcels on Beatties Ford, Trade Street and Five Points (near Johnson C. Smith University)” said Austin, who represents the area. “We are hoping to ignite more energy for the West End. We have developers constantly in the area looking around. We can see some of the growth starting to happen.”
Will ridership fall further?
The Gold Line today is only 1.5 miles long, but the second phase will extend it to four miles. The federal government is paying for half of the $150 million construction costs.
On the east side, the Gold Line will be extended about a half-mile to Sunnyside Avenue. On the west side, the line will go farther, through uptown and under Interstate 77 to JCSU.
CATS is also buying new modern streetcars to replace the green-and-yellow replica cars used today.
Before the line opened, CATS said it thought the streetcar would carry 1,100 passenger trips on the average weekday. The Gold Line has usually done better than that, averaging 1,600 weekday trips in April.
But ridership has declined by 7.4 percent this year compared to the first year. CATS has seen overall transit ridership decline due to low gas prices, but the Lynx Blue Line has done a better job at keeping its riders; light-rail ridership is down 1.5 percent for the first 10 months of the fiscal year.
The Gold Line is free today. When the second phase opens, CATS plans to require passengers to pay, either with a ticket or a transit pass.
Before the streetcar opened, CATS operated the free Gold Rush shuttle from the university to the hospital. The Gold Rush buses may not have been as glamorous as the streetcar, but it was much more efficient and less expensive to operate.
The previous leadership at CATS had said the streetcar would be cheaper to operate than a bus, but that hasn’t proven to be true, at least so far. In its last full year, the Gold Rush cost about $1.70 per trip for a journey that could be as long as four miles. The Gold Line streetcar has cost nearly $3.70 per trip on a journey that’s 1.5 miles – at the most.
Republican City Council member Ed Driggs said he’s concerned how the city will pay the for the third phase of the Gold Line, which would add another six miles to the streetcar route, extending it to the east and west. That could cost as much as $500 million.
“My original position was that the cost benefit of the streetcar wasn’t a good deal,” said Driggs.
The city and CATS haven’t released a plan detailing what money they’ll use to build and operate the third phase of the streetcar. There is no timeline for when that will be built.
“I’m not sure where that piece of funding will come from,” said Driggs.
But he said he’s willing to wait longer to see if the Gold Line attracts new development.
“It’s too early to judge the impact on development,” he said. “The Blue Line is different in that it operates in its own protected channel. People are more receptive to that than a streetcar that’s sitting in traffic.”
There are numerous times of the day when Gold Line streetcars run nearly empty, but many passengers like the ride.
“It’s comfortable, it’s nice,” said Sevonn Johnson, who rode with Taylor Johnson to an appointment at Novant. “We will ride it again.”
Construction moving forward
CATS is moving utilities for the second phase of the line, along Hawthorne Lane. Next month the city will replace the Hawthorne Lane bridge over Independence Boulevard, a project that will take up to 18 months to finish. The existing bridge isn’t strong enough to handle the weight of modern streetcars.
CATS said underground work will begin on the west side “in the near future.”
CATS has a a web page that tracks the progress of construction.