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A behind-the-scenes political war is being waged over a $102 million proposal to build a streetcar system through parts of downtown and Over-the-Rhine, fueled by concerns over cash and ideology.
Although the proposal still seems to have the support of a majority on Cincinnati City Council and some allies in the business community, at least two major roadblocks have emerged that threaten to derail the project.
The hurdles include worries from a private development group that the streetcar project will sap all of the city’s available development subsidies and delay further efforts at revitalizing Vine Street, as well as a powerful corporate leader’s ideological beliefs about the role of mass transit in U.S. society.
Those concerns came to the forefront last week after City Councilman John Cranley sent a nine-page e-mail to the city administration containing dozens of questions about the project that he wanted answered before the next hearing on the issue. Some council members say Cranley, who heads council’s Finance Committee and currently opposes the streetcar proposal, was using the questions as a delaying tactic.
Cranley’s questions ranged from the general to the highly specific, including asking how many people currently live in Over-the-Rhine and what is the expected loss to downtown restaurateurs if downtown workers take the streetcars to Over-the-Rhine for lunch.
Cranley, however, defends his e-mail.
“I’m not trying to create busy work,” he says. “I am genuinely interested in finding out the information. Will every single question be answered?
Probably not, but I hope they will be before council makes a decision.”
After an initial feasibility study concluded the streetcar project would have a $1.4 billion economic impact if built, city council voted 8-1 in October to instruct City Manager Milton Dohoney Jr. to cobble together a financing plan for the project. Cranley was the sole dissenter; he prefers the first loop be built in the Uptown area, near local hospitals and the University of Cincinnati.
An early version of the financing plan relied heavily on tax increment financing (TIF) revenues — taxes generated by new development along the streetcar route. The plan called for $25 million to come from TIF funds and the city’s capital project budget; $11 million from the sale of Blue Ash Airport, which was owned by Cincinnati; $10 million from state grants; and $31 million from private contributions from area corporations.
But the plan worried the Cincinnati City Center Development Corp. (3CDC), the group that’s trying to revitalize Vine Street in Over-the-Rhine, Fountain Square and downtown’s riverfront. Much of 3CDC’s work depends on TIF money, and the group wants to ensure the streetcar project won’t deplete that source.
“We are concerned (that streetcars are) funded with a dedicated revenue stream and a sustainable revenue stream,” says Steven Leeper, 3CDC’s president. Any financing plan shouldn’t rely on funds “presently being used effectively in the neighborhood. We don’t want to stop that momentum. We want something that will complement that.”
Due to 3CDC’s concerns, city officials are tweaking the plan to use less TIF money and likely will borrow more cash. Other ideas also being considered include imposing a special assessment fee on surface parking lots for their “wasted development potential,” sources say. There are more than 100 such lots in downtown and Over-the-Rhine.
Meanwhile, the Cincinnati Business Committee — a group of area CEOs — helped pay for the streetcar feasibility study but hasn’t yet publicly endorsed the project and won’t until more details are settled.
“We haven’t taken a specific stance on it, but we have committed time and resources,” says Gary Lindgren, the CBC’s executive director. “There’s still some work to be done before the CBC comes out with a definitive statement saying, ¨Let’s move forward.’ ”
At least one prominent business leader has expressed doubts privately. Joseph Pichler, the retired Kroger CEO who is vice chairman of 3CDC’s board of directors, has espoused the view that rail-based transit such as streetcars are a waste of taxpayer money.
Pichler is a follower of Randal O’Toole, who is affiliated with the Cato Institute, a Libertarian think tank. O’Toole advocates for free market solutions to urban planning issues and believes mass transit ignores the preferences of most U.S. consumers.
Pichler couldn’t be reached for comment.
O’Toole’s critics point to the success of modern streetcar systems in cities like Seattle and Tacoma, Wash. Cincinnati, with 3,880 people per square mile, is considerably denser than Seattle (3,225 per square mile) and Tacoma (1,619), which supporters say makes ridership success even more likely here.
Cincinnati’s proposed 3.9-mile zig-zag loop would link Findlay Market to Great American Ball Park, with numerous stops along the way. Future segments have been suggested for Uptown and Northern Kentucky.
The feasibility study indicated the streetcar system would trigger significant redevelopment of vacant and underused parcels within a two-block radius of the route. Annual operating costs were estimated at $2.3 million; about $1.1 million of that amount would come from fares.
City Councilman Chris Bortz, who first proposed the project in council, says streetcars have helped revitalize cities even smaller than Cincinnati.
“This is an exciting economic development opportunity for the city,” Bortz says. “We need to move forward with this project and do everything we can to help our urban center.”
For his part, Cranley has scheduled a Feb. 25 hearing on the issue.
“I will not obstruct the role of council,” Cranley says. “I believe we are duty-bound to ask the tough questions before we spend taxpayer dollars.”
If council approves moving forward with the project, design could begin in the third quarter of this year and the system could open by the end of 2010.
This article appears in Feb 6-12, 2008.
