News: That's the Ticket

Columbus takes different approach in funding its downtown streetcar project

Mayor Michael Coleman

Columbus Mayor Michael Coleman plans to fund his city's streetcar project with surcharge fees.

Like Cincinnati, Columbus is considering a proposal to build an electric-powered streetcar system through part of its downtown, the first segment in what's envisioned as a more comprehensive system that eventually would help move people around its entire urban core.

And just as in Cincinnati, Columbus officials likely will vote by year's end on whether to move forward with the project and actually begin construction.

Unlike the Queen City, however, Columbus' streetcar proposal would rely on an entirely different funding source to generate the $103 million needed for its line along the popular High Street strip.

Columbus Mayor Michael Coleman this spring asked city officials there to consider adding a 4 percent surcharge on tickets for sporting events and concerts held at venues within six blocks of the proposed route. Tickets that cost $10 or less, like downtown movies and minor league baseball games, would be excluded.

Additionally, a similar surcharge would be added to the fees that motorists pay at parking lots and parking garages near the route, and parking meter rates also would increase.

Coleman says the financing plan would raise about 80 percent of the money needed to build the 2.8-mile route. It will take about $11.4 million per year for 25 years to pay for construction and operation, the mayor estimates.

"Columbus is over-reliant on the automobile," Coleman says. "As gas rises to $4 a gallon and (the) city continues to grow, I am convinced the public will be demanding more transportation alternatives.

This streetcar proposal should not be viewed in the narrow silo of downtown. Streetcars should be viewed as a first step in an overall vision of an integrated system of rail throughout the city of Columbus."

As part of the plan, the Ohio State University has agreed to contribute $12.5 million for the project, paid in installments over a 25-year period.

Other aspects of the plan include using some of the city's existing parking revenues, increasing parking ticket fines and imposing a $1 fare for some streetcar riders.

"Columbus is already becoming a national leader in the distribution of freight by rail, but we are ranked dead last among our peers when it comes to moving people by rail," Coleman says. "This cannot continue."

The proposed route would run north from downtown about halfway to the Ohio State campus and could be extended further later. Consultants hired by Columbus officials say it could help spark redevelopment along the route, which includes roughly 36 acres of what Coleman describes as underutilized parcels.

In all, consultants estimate the route would have between $300 million and $500 million in economic impact through new jobs and businesses it would attract.

That compares to Cincinnati's plan, where some officials want to build a 3.9-mile system that would loop through Over-the-Rhine and the downtown riverfront, extending from Findlay Market in the north to Great American Ball Park in the south, at a cost of about $102 million.

Also, an initial $35 million connector link would be built to the uptown area near the University of Cincinnati. Eventually, a loop would be built around the uptown area for another $48 million.

Cincinnati's financing plan currently calls for generating at least $31 million from private sources along with $25 million in debt financing through bonds that would be repaid using the city's capital projects budget.

Another $25 million would come from tax increment financing (TIF) revenues, taxes generated by new development along the streetcar route; $11 million from the sale of Blue Ash Airport, which was owned by Cincinnati; and $10 million from state grants.

Some Hamilton County officials, including County Commissioner David Pepper, worry that having the city tap into TIF money could jeopardize development of a long-planned park along the riverfront by the proposed Banks district.

City officials counter that the fears are unfounded, and more details will be hammered out once the city manager raises money or gets pledges from private companies for the streetcar project.

Like in Columbus, a city feasibility study here last year concluded the streetcar project would have a $1.4 billion economic impact as it helps trigger residential and commercial redevelopment on properties along the route, particularly in Over-the-Rhine with its large stock of abandoned buildings and vacant lots.

Cincinnati City Councilman Chris Bortz, a streetcar advocate, says using a ticket surcharge here would be more problematic than in Columbus.

"It's a good idea, but it's not so straightforward in Cincinnati," Bortz says. "The challenge to getting additional value from tickets is larger because we're at our limit for doing that under the city charter."

Still, Bortz didn't rule out a ticket fee.

"It could end up being a small portion of a bigger strategy," he says. "Cincinnati's plan is a lot different from many other cities in that we've got a diverse series of funding sources. The more the better. This way, we don't have to change the charter or try to change state law." ©