Despite higher costs, Charlotte streetcar moves ahead

Despite concerns over escalating costs, the Charlotte City Council on Monday approved a plan to build a $150 million streetcar extension, with the federal government to pay for half of the cost if the city secures a grant.

The streetcar has long been one of Charlotte’s most controversial projects. Monday’s vote was yet another opportunity for council members to debate the issue, with supporters touting projected economic development and opponents warning the line would raise property taxes.

When the council last voted on the streetcar, in May 2013, the estimated cost was $126 million. After doing more thorough design work, the city said the extension will cost $150 million. The city also said it expects the streetcar to cost an additional $6.2 million in operating costs.

Council members voted 7-4 to move forward with a federal grant application.

Republicans Kenny Smith and Ed Driggs voted no, along with Democrats Claire Fallon and Michael Barnes.

Democrat at-large council member Vi Lyles, who supported the streetcar, said the commercial and residential development that has occurred along the Lynx Blue Line in the South End would follow the streetcar.

“It’s time to connect east and west,” Lyles said.

Barnes, an at-large member, said he is concerned about having to spend an extra $24 million.

“My concern is that the streetcar will be a permanent part of the city’s general fund,” he said. He questioned the wisdom of the city finding $75 million – its share of the $150 million – after raising property taxes in 2013.

The city’s first streetcar segment – from Time Warner Cable Arena to Novant Presbyterian Health Center – is scheduled to open in the spring. That is a $37 million project, mostly funded with a $25 million federal grant.

The next phase would extend the streetcar in both directions. It would expand to Johnson C. Smith University to the west and to Sunnyside Avenue and Hawthorne Lane in the Elizabeth neighborhood to the east.

The long-term plan is for the streetcar to run from the Rosa Parks transit center near Beatties Ford Road and Interstate 85 to the site of Eastland Mall. That has been estimated to cost $500 million.

Driggs asked city staff whether they had made a revised estimate as to how much the entire 10-mile streetcar would cost.

“I think we can safely say it’s not $500 million,” he said. “I think we can say it’s a lot more.”

Most of the cost increase is due to inflation, city officials said. In addition, the city has determined it would need to replace the Hawthorne Lane bridge over Independence Boulevard to handle the weight of streetcars.

In preparing for the grant, the city also made some early projections as to how much it would cost to operate the streetcar. The Charlotte Area Transit System has previously said it doesn’t have enough money to pay operating costs, leaving the city to foot the bill.

The city estimates the operating cost will be $6.2 million a year. The city also said it would need to create a capital maintenance fund of at least $2.7 million every five years.

Fares would generate about $1.5 million annually. The city has speculated that it could raise some money through advertising on streetcars and sponsorships.

It also has said it could create a new taxing district, which would increase the property taxes of owners who live along the line.

The streetcar extension would open in 2019.

Council member Al Austin, a Democrat, said the city would be wise to invest in the streetcar. He compared it to a hockey player who doesn’t play where the puck is but plays “where the puck is going to go.”

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