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News: Streetcar Named Development

The Portland model could bring billions to downtown Cincinnati

By Kevin Osborne · February 28th, 2007 · News
  Streetcars, such as this one in Portland, could soon serve Cincinnati. Advocates say streetcars help economic development in ways that buses don't � and they're sexier, too.
Adam J. Benjamin/Courtesy Michael Moose/Glaserworks

Streetcars, such as this one in Portland, could soon serve Cincinnati. Advocates say streetcars help economic development in ways that buses don't � and they're sexier, too.

Attracting people with a mix of income levels to live downtown is necessary for returning the urban core to vibrancy, Cincinnati leaders agree, and they routinely tout that keeping young professionals from moving away to other cities is a vital part of that strategy.

In reality, though, with new condominiums downtown selling for an average price of about $230,000 -- and many priced between $400,000 to $1 million or more -- most young professionals who want to be homeowners find themselves priced out of the market.

Urban planners say the answer to reversing the trend and ultimately saving taxpayer money lies with an unlikely savior: streetcars.

A major reason that downtown development projects cost so much is the need to provide parking spaces for residents and office workers, developers say. A single parking space typically adds about $25,000 to a project's cost. Most projects here require two spaces per residential unit, amounting to an additional $50,000 for each condo or apartment.

Also, an average family with two vehicles spends about $8,000 per year on transportation costs, including gasoline, insurance and parking, planners say. If a family could get rid one of those vehicles due to its proximity to a streetcar system, the compounded savings would total about $65,000.

If the $25,000 savings to the developer is combined with the $65,000 savings to the customer, that would provide an average of $90,000 more to be spent on housing, helping close the price gap that keeps many people from buying, supporters say.

Someone who doesn't want to live downtown isn't necessarily immune from the high cost of parking. Most developers who build downtown seek public subsidies to construct parking, usually in the form of tax increment financing. This involves withholding taxes that would be paid to the city for a few years to pay for the debt incurred to build parking. That, in turn, saps the city of revenues.

"Building a streetcar system is partly about transportation, but it's mostly about economic development," says John Schneider, a transportation consultant and downtown property owner who is among backers pushing for the project.

The first loop
Since November a nationally known engineering company has been conducting a study for the city of Cincinnati that examines the economic feasibility of constructing a streetcar system in downtown and Over-the-Rhine, including its potential impact on land development and the best route for a starter line.

The $160,000 study by HDR Engineering Inc. should be completed by May. Its results will go to Mayor Mark Mallory and Cincinnati City Council, which will decide whether to move forward.

Supporters envision a roughly four-mile looped system that travels from Cincinnati's riverfront, near the stadiums and the proposed Banks project, through downtown north into Over-the-Rhine, with stops at Music Hall and Findlay Market.

Such a system would cost about $100 million -- about $25 million per mile -- and could open by 2011 if city officials approve the plan later this year, transportation experts say. The system would be built so it could be expanded later into other city neighborhoods or into Covington or Newport. Some Northern Kentucky developers already have privately expressed interest.

HDR is studying three possible routes for the system:

· One would travel through Over-the-Rhine along Elm and Race streets, cross Central Parkway and travel downtown along Walnut and Main streets. It would access the riverfront using the transit facility under Second Street.

· Another route would travel through downtown along Sycamore and Main streets, ending at Fourth Street, with no direct riverfront access.

· The third route would travel through Over-the-Rhine along Elm and Race streets and then into downtown along Vine Street.

City officials are forming working groups of property owners along the routes and plan meetings in March and April to settle on a preferred approach.

David Vozzolo, HDR's vice president, says the project's success will depend on keeping a tight focus.

"Pick a good route," he recently told city officials. "Pick a good starter and make it work. It's really challenging when you have so much you want to do. Don't overextend yourself."

The streetcar boom
If approved, Cincinnati's streetcar system would be modeled after the successful system in Portland, Ore. Portland's downtown and adjacent neighborhoods, such as the Pearl District, are approximately the same size as Cincinnati's downtown and Over-the-Rhine. The cities have a comparable population.

Since Portland opened the nation's first modern streetcar system in 2001, land development there has rapidly accelerated, mostly through the construction of apartments and condos.

Overall, $2.28 billion in new development has occurred within a two-block radius of Portland's streetcar system since it opened. The investment includes more than 7,200 new housing units and 4.6 million square feet of new business space. In fact, about 55 percent of all new development in Portland's downtown during the past decade has occurred within one block of the system.

In the Pearl District, an initial city investment of $57 million yielded $1.6 billion in development. It included 5,200 new housing units that brought in about 10,000 new residents along with 21,000 jobs and $1 million in new retail.

The first phase of Portland's streetcar system cost $55 million, with a large portion derived from local taxes. In Cincinnati's case, the federal government has now allocated money for "new start" transportation projects, and local officials hope to tap into that source.

Portland's system averages about 5,700 riders daily, more than the 5,000 expected. It is credited with making redeveloping troubled sites more affordable by reducing the need for parking space.

"Here, when we opened up access to the Pearl District, it just exploded," said Rick Gustafson, a former Oregon state legislator who is director of Portland Streetcar Inc., the agency that operates the system. "Certainly there would have been development, but it happened much more intensely and quickly than it would have."

The ratio of stimulus to development in Portland was more than 28-to-1, planners say. If a similar multiplier holds true in Cincinnati, the $100 million investment in a streetcar system would generate $2.8 billion in new development. The key to maximizing the effect, they add, is ensuring the system is built in areas with the greatest redevelopment potential.

Vice Mayor Jim Tarbell, who supports building the system here, says Over-the-Rhine and particularly the Broadway Commons area have much in common with Portland's Pearl District. Over-the-Rhine contains Cincinnati's largest stock of vacant buildings and is dotted with empty lots that contained condemned structures that were demolished.

Before it was redeveloped, the Pearl District was a struggling industrial area next to downtown that contained mostly abandoned warehouses. After the streetcar helped trigger redevelopment, the district is now known for residential lofts that have restaurants, pubs and shops on the ground level.

"This is a very similar set of circumstances," Tarbell says. "Streetcars could provide the same kind of catalyst here and is just the type of investment needed that will make developers feel more comfortable about coming in and doing projects. It shows a commitment by the city."

Such a sexy ride
But there are some notable differences between Cincinnati and Portland that could affect a streetcar system's success here.

Portland's system is based around two downtown institutions that generate riders, Portland State University and Good Samaritan Hospital. Although Cincinnati doesn't have a college or hospital located downtown, it has something Portland lacks: a plethora of Fortune 500 companies, including Procter & Gamble, Federated Department Stores and American Financial Corp. By comparison, Portland's nearest Fortune 500 firm, Nike, is nine miles away in Beaverton.

Additionally, the demographics of the two cities are markedly different in some aspects.

Portland is, by and large, more homogenous, educated and wealthier than Cincinnati. Portland's population is about 78 percent white and 7 percent African-American, with other races accounting for the remainder. Cincinnati is 53 percent white and 43 percent African-American.

Further, Portland's median income for a household is $40,146, and 13.1 percent of the population is below the poverty line; Cincinnati's median income for a household is $29,493, and 21.9 percent of the population is below the poverty line. As a result, Cincinnati faces types of social stresses and challenges that Portland doesn't, urban planners concede.

But supporters say the reason streetcars can attract developers when a bus system doesn't is because it demonstrates a fixed, permanent improvement to the area. Also, it gives developers a marketing tool by promoting access, they add.

There's another reason.

"Frankly, it's sexier," Schneider says. "Many people who won't ride a bus for one reason or another will ride a streetcar."

That assertion is verified by Portland's experience. On a recent Friday afternoon, as Schneider led a contingent of Cincinnati officials, business leaders and others on a tour of Portland's system, the streetcars were standing-room only and riders jostled for space. The crowd -- a mixture of office workers, college students and some disabled people --prompted one rider to remark to her friend, "Man, that's what I hate about these streetcars. They need to make them bigger."

In six short years, streetcars have become a Portland fixture that residents take for granted. Later the same afternoon, while walking on a downtown street, a toddler begged his mother to go on a streetcar as she ran errands. The woman had to promise a trip later in the day to win the boy's compliance.

Michael Gaughan of the Clifton Heights Redevelopment Association made the Portland jaunt and was impressed with how streetcars helped circulate crowds among different neighborhoods. Such a system could benefit the University of Cincinnati area, he says.

"It's kind of like a tether line," Gaughan says. "I wasn't familiar with Portland, but as long as I saw that streetcar while I was walking around, I felt safe. I knew I wouldn't get lost."

Build it where it's welcome
Among the cities that have either created or are considering streetcar systems are Dallas, Denver, St. Louis and Tampa as well as smaller areas like Astoria, Ore.; Lancaster, Penn.; Winston-Salem, N.C.; and Kenosha, Wis.

Not every system is an immediate success. Tampa opened its system in 2002, and operating losses -- common in any public transit system's initial years -- have been greater than estimated. City officials there are mulling reconfiguring the system to lessen its focus on serving tourist areas and accommodate more office workers.

Streetcars differ in several significant ways from light rail, which was proposed for the region in 2002. Hamilton County voters resoundingly defeated a half-cent sales tax increase to pay for that system.

At that time, officials wanted to build an elaborate $2.6 billion light rail system over 30 years that would travel from downtown Cincinnati along Interstate 71 to Blue Ash and another line along Interstate 75 from downtown to Sharonville.

Tellingly, although the light rail measure failed countywide, it was approved by a majority of voters within Cincinnati's urban core.

"These are the people who perhaps better understand the benefits from public transit," Schneider says.

Ron Stewart, an architect who helped design Portland's system, says focusing on those areas instead of forcing the project on unwilling neighborhoods is crucial.

"Build where you're wanted, build where you're invited in," he says. "You won't be successful where you're not wanted."

Compared to light rail, streetcars are cheaper and quicker to install, meaning constructing such a system would be less disruptive for the neighborhoods they travel through.

Streetcars are powered by overhead electrical wires. They usually are shorter than light rail trains and weigh less, so tracks can be placed into the pavement without having to remove underground utilities. Stops are spaced about every four to five blocks so they don't disrupt traffic.

"Anywhere you can run a bus," Schneider says, "you can run a streetcar." ©



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