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December 4th, 2013 By German Lopez | News | Posted In: News, Streetcar, Mayor

City Council Pauses Streetcar Project

Swing votes Mann and Flynn decline private contributions for study and construction

city hallCity Hall - Photo: Jesse Fox

City Council on Wednesday allocated $1.25 million to indefinitely pause the $132.8 million streetcar project and study how much it would cost to continue or permanently halt the project.

If the study's continuation and cancellation estimates aren't persuasive enough to continue the project, the vote could effectively act as council's final action on the streetcar.

Prior to the 5-4 votes to pause the project, streetcar-supporting council members proposed a motion that would use private contributions to allow construction to continue for one week while the city studies the costs of cancellation and completion.

The motion came as a result of the Haile U.S. Bank Foundation's offer to pay for the $250,000 study. An undisclosed private contributor also offered to pay $35,000 a day for slowed-down construction, which supporters say will keep the project within Federal Transit Administration (FTA) compliance.

During a brief recess, Councilwoman Yvette Simpson pulled Vice Mayor David Mann out of the council chambers to lobby him to support the motion and hold off on pausing the project.

Mann articulated misgivings with the absence of any written commitment for the private contributions. Given the lack of assurances, Mann voted to pause the project.

Mann claimed a proper study will require at least two weeks, not the one week the motion allocates. But the undisclosed private contributor is apparently willing to pay for construction for 10 business days if it's deemed necessary, according to Mann.

The motion could still be taken up by a committee, but the streetcar project is on hold for now.

Council's final decision to pause the project came despite a memo released earlier in the day by the city administration warning that pausing the project for one month could cost $2.56-$3.56 million.

The memo states the numbers are only estimates and the true costs won't be fully known until a pause is actually carried out, which means the final costs could shrink or grow.

Streetcar Project Executive John Deatrick previously put the cost of continuing construction for one month at $3 million, which means the pause costs could actually come in higher than simply continuing with the project.

Deatrick on Nov. 21 warned the costs of completely canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.

But the five council members opposed to the project — Mann, Kevin Flynn, Christopher Smitherman, Amy Murray and Charlie Winburn — voiced distrust toward the estimates and called for further analysis.

Streetcar supporters argue pausing the project could be tantamount to cancellation because it could convince the FTA to permanently pull $44.9 million in federal grants that are funding one-third of the project. The FTA already froze the grants pending a council decision to continue with construction.

Opponents of the project insist the FTA will return the money if the project continues.

"I hope that the spirit of cooperation that many members of this council think will come from the federal government is there," said Councilman P.G. Sittenfeld, a streetcar supporter.

But given the estimates for completion and cancellation, Sittenfeld cautioned whether history will look poorly on council's decision on Wednesday. He asked, "Did we choose waste or did we choose opportunity?"

The council meeting also continued the increasingly adversarial atmosphere in council since Mayor John Cranley and the new City Council took office on Sunday.

Councilman Chris Seelbach, a streetcar supporter, said it has been "the most destructive, divisive three days" since he began working at City Hall.

At one point, Cranley attempted to compare problems facing the streetcar project to the business failures of Blockbuster and other video stores.

Councilman Wendell Young, who supports the project, responded, "This idea that a bookstore or a video store can be compared to what's going to happen to the streetcar is about the most ridiculous comparison I can think of."

Supporters of the streetcar project argue it's necessary to spur development along the 3.6-mile loop in Over-the-Rhine and downtown. The project would generate a 2.7-to-1 return on investment, according to a 2007 study from consulting firm HDR that was later verified by the University of Cincinnati.

Opponents of the project argue it's far too expensive and the wrong priority for Cincinnati. They're particularly concerned about the $3.4-$4.5 million it will cost to operate the streetcar each year, which could hit an already-strained operating budget.

After the study reviewing the project's costs is completed, council expects to make a final decision on whether to continue or cancel the project.

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