Back on the Ballot

Why the streetcar will be at the center of the 2013 mayoral race despite its progress


he public spotlight is nothing new for Cincinnati’s $125 million streetcar project, but it’s a factor supporters are getting increasingly tired of dealing with. Facing new delays and political controversy, the streetcar is once again in the news — and, for better or worse, this year’s mayoral campaign will keep it there for much of the coming year. 

Despite the streetcar’s momentum — which proponents admit was literally slowed by recent news of the project’s delay until 2016 — the project will serve as one of the main talking points for former council member John Cranley in his attempt to beat out current vice mayor and council member Roxanne Qualls, a streetcar supporter, for the mayor’s seat in November.   

But should it? At this point, most of the funding for the first phase of the streetcar is set, and voters have approved the project twice through the 2009 and 2011 referendums.

Mayor Mark Mallory and Democrats on City Council have celebrated the public-private partnerships that have helped revive Over-the-Rhine, and they continue touting the additional economic benefits the streetcar could bring, such as helping to connect the revitalization of OTR and the development of the downtown riverfront in a way local businesses can rely on.

But the mayor’s race is putting the streetcar back on the ballot. Qualls is generally receptive of Mallory’s agenda, and she plans to expand the streetcar to make lines run uptown after the first phase is complete. Cranley, perhaps in an attempt to draw a strong contrast to a fellow Democrat, wants to stop as much of the project as possible, and he definitely doesn’t want a second phase. He would rather see the funding go to other programs, even though about $40 million in federal funding is tied to the streetcar’s status as a transit project.

So despite the plan’s green light from voters and the city budget, the recently announced delays have thrust the controversy back into the public sphere, where it will take center stage in this year’s mayoral race.

Going for mayor

It’s increasingly looking like the mayor’s race will be between Democrats Qualls and Cranley. On the surface, that should make the campaign friendly to Cincinnati’s progressives. Both candidates support the recent public-private partnerships driving economic growth downtown, and both have been vocal proponents of minority and LGBT rights. But Cranley has picked the streetcar as one of the biggest points of disagreement in the race.

Qualls has always been supportive of the streetcar. In fact, she makes it sound like expanding the project is a foregone conclusion for her.

“The streetcar is a major economic development investment that eventually will connect the two largest employment centers in the region,” she says, referring to the business district downtown and the University of Cincinnati and hospitals uptown. “Once it goes in, the streetcar will drive investment … along its entire route.”

Qualls acknowledges the plan has critics even within the business community, but she sides with the larger businesses that have told her the impact of streetcars in other cities “is immediate and dramatic when it comes to major redevelopment.”

She also points to the research done on the Cincinnati streetcar. In 2007, the city hired HDR, a company that advises businesses and cities on large projects, to conduct an analysis of the streetcar’s potential economic impact. The study found major benefits to connecting OTR and the Central Business District, including travel cost savings, increased mobility for low-income individuals and economic development that spurs rising property values. The HDR study was entirely supported and echoed by a follow-up assessment from the University of Cincinnati.

Cranley argues the 2007 study is outdated. He says OTR’s growth in the past few years has weakened the original justification for the streetcar, which the HDR study used in its introduction: “Cincinnati has been experiencing a decline in its population and business community over the past 15 years. A four-mile streetcar investment is proposed to stimulate the economic development within the downtown and Over-the-Rhine areas.” Since the study was published, OTR has actually grown.

While some of the numbers and arguments are outdated, the study still shows the streetcar will foster economic development, particularly for properties closest to the tracks. That finding isn’t being called into question.

Instead, the debate is based more on a cost-benefits analysis. Qualls strongly believes the streetcar is a necessary investment to push the city forward, while Cranley argues there are better ways to use the city’s limited budget.

Cranley says he’s not even against more transportation options, pointing to his support for Hop On Cincinnati, a $12 million program that would establish a trackless trolley. For streetcar critics, Hop On Cincinnati is a serious alternative to the streetcar, as explained on the website for the proposal: “Why a trackless and wireless trolley? Because it will deliver significantly more connectivity and related benefits for a tenth the cost in a third the time with zero street and traffic disruption.”

Meg Olberding, spokesperson for the city manager’s office, says it’s not that simple. What makes the streetcar so good for economic development is the permanence of the tracks. The permanent route gives business owners and residents a mode of transportation that will always be there, either to get to work or bring in customers.

Charlie Hales, now mayor for Portland, Ore., invoked a similar argument to defend his city’s streetcar in a 2007 letter. Hales, who supported light rail and streetcar expansions in his city when he was on Portland City Council between 1993 and 2002, used data from cities around the nation to show trolley-like systems rarely resulted in economic development and were mostly underwhelmed in terms of ridership, with the one exception of Denver, Colo. In contrast, he demonstrated big transit projects, particularly light rail, caused significant increases — as high as 39 percent in one case — for property values near rail lines in Dallas, St. Louis, Portland and San Francisco.

But Cranley’s objections go a lot further than the merits of different transportation systems. During a recent interview with CityBeat, Cranley argued the massive streetcar project has negatively impacted the budget in multiple areas: higher property taxes, parking privatization and lower neighborhood funding.

It is true the streetcar is benefiting from higher property taxes — about $28 million of streetcar funding is property tax capital — but the other claims don’t hold up in context. 

Cranley argues casino revenue going to the streetcar could be used to prevent the city from privatizing parking services. But Olberding says at most $3 million of casino revenue is going to operation of the streetcar on an annual basis, and no casino money is going toward construction. That $3 million a year is nowhere near enough to make up for a $21 million sell-off of the city’s parking services.

Cranley also says the city has been forced to divert funding from neighborhoods to the streetcar. The claim is verifiably true, but it comes with a caveat. When the city redid the Blue Ash Airport deal last year, $15 million from the deal was promised to neighborhoods. Since then, the city has been bogged down in negotiations with Duke Energy over who has to pay for moving utility lines. As a stopgap measure, the city diverted the $15 million from the Blue Ash Airport deal to help move the lines as negotiations continue. The city claims it will get the money back from Duke Energy after negotiations are complete, but Cranley says he’ll have to see it to believe it.

Cranley’s biggest concern is setting priorities. He claims streetcar money could have been used on better projects. One example he readily cites is improving the city’s Internet infrastructure. He says, “There are better investments for new infrastructure that are more 21st-century oriented. We should be partnering with Cincinnati Bell, Google and others to expand broadband and Wi-Fi access for consumers and businesses and hotspots in public parks and business districts.”

It’s true some of the funding from the streetcar could be used on other projects, but a substantial amount of the funding is tied to the streetcar being a mass transit project. The nearly $40 million in federal funds currently tied to the project — about one-third of the streetcar’s estimated cost — were funds available only to transportation projects.

Regardless of the details, the mayoral debate comes down to different visions for the city’s future. Qualls says she will do everything she can to push for the streetcar, while Cranley wants to move all funding possible to programs he sees as more worthwhile.

Red light

Since the streetcar broke ground last February, it’s mostly been in the news when there’s a controversy surrounding it. The latest controversy is another round of delays, which pushed completion of the streetcar’s first phase from 2015 to 2016. 

The delays raise questions even for supporters, and they give more ammunition to critics. Cranley in particular says the delays are “embarrassing.”

Oberding says the delays have happened due to unforeseen circumstances and some issues taking longer than expected to resolve. 

One of the delays was actually caused by a sudden increase in funding. When the streetcar won nearly $11 million from the Tiger 3 federal program in December 2011, the city decided to use the money to extend the tracks from Fifth Street down to Second Street. That was great news for the city and streetcar, but Olberding says the extra design and planning work also added 10 months to the project.

Then there are the ongoing negotiations with Duke Energy. For months now, the energy company and city have disagreed over who has to pay for moving utility lines to accommodate for the streetcar. The city insists Duke does, while Duke says the city has to pay up.

“We’re working with them,” Olberding says. “It has taken longer than we had hoped, but we’re hoping to resolve it soon.”

Duke is the only remaining utility company the city has to make a deal with, but it’s also the company with the most complicated systems. That makes moving Duke’s utility lines the most expensive, causing negotiations to stall as both parties try to avoid carrying heavy costs.

For now, the city has helped alleviate the problem by temporarily shifting funds from the Blue Ash Airport deal that were originally meant for neighborhoods, but, again, the city claims the money will eventually be paid back by Duke Energy.

Ohio’s governor also played a role in the delays. Shortly after taking office, Gov. John Kasich pulled $52 million in state funding from the streetcar, even though the money was from a federal grant that had no impact on the state’s bottom line. The pulled money ultimately caused delays and forced the city to shrink the streetcar’s scope until later phases.

Amid the delays, opponents have asked why the city is preparing to buy the cars for the project so early. They argue the money could be better spent elsewhere for the time being.

Olberding says the cars need to be bought in advance so they can be built, tested and burned into the tracks while giving staff enough time to get trained. Building the first car alone takes 18 months, and Olberding estimates the testing, burning in and training will take another year.

Still, the explanations have not silenced critics. As far as they’re concerned, the delays add holes to the city’s project, and pointing out the problems helps weaken the case for the streetcar’s future.

Thinking about the future

Despite the criticism and delays, a lot of work is still planned for the streetcar in 2013. 

Olberding says CAF USA, the contractor put in charge of manufacturing the cars, will be given the order to proceed with the cars sometime this year, preparing them for delivery in late 2014. The city also hopes to conclude negotiations with Duke by the end of 2013.

The city is expecting general contractor applicants to provide their requests for proposal (RFP) in February. The approved general contractor will then coordinate the building of tracks and the maintenance facility and deal with specialty work, which is all expected to begin in 2013.

But what happens after the mayoral election in November is less clear. If Qualls wins, she will continue pushing the streetcar forward. That includes ensuring the first phase finishes and also beginning work on track expansions.

Cranley is taking the opposite approach. As soon as he gets in office, he says he’ll make the entire project more transparent. Cranley has repeatedly criticized the city for using what he sees as budget gimmicks to help finance the streetcar. With a full opening of the books, Cranley hopes to reveal problems and transparently address them.

Regarding the current phase of the streetcar project, Cranley says, “It all depends on where we are.” 

For Cranley, it’s a matter of balancing how far along the project is when he takes office. If the streetcar is too far along, there will be no sense in stopping the inevitable. But if he sees an opening to shut the project down — something he argues is possible if the streetcar project isn’t to be completed until 2016 — he will likely take it.

Even if the current phase is completed, Cranley will do everything in his power to stop further phases of the streetcar project. As he sees it, the city has already wasted enough money that could go to other projects, and he doesn’t want to waste any more.

Cranley says the streetcar isn’t the only point on his platform, but his vocal opposition is the main reason the project will dominate another election cycle. Because of Cranley’s opposition, voters in November might be deciding the streetcar’s fate for the third time — this time through the 2013 mayoral election. ©

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