Seattle — Funding Plan for Streetcar
The following article appeared in the
Seattle Times on
April 16, 2005:
Nickels outlines funding plan for South
Lake Union streetcar
Seattle Times staff reporter
Two years after he first proposed a new streetcar line through the South
Lake Union area, Seattle Mayor Greg Nickels has come up with a detailed
financing plan for the 2.6-mile loop.
Responding to conditions imposed by the City Council, the mayor's plan
would not siphon away money from police, fire protection, parks or other
basic services that rely on the city's general fund.
But it would take almost $1 million a year intended for new bus service
in Seattle and steer that to the streetcar.
Nickels' financial blueprint for building and running the streetcar also
would rely on unsecured federal grants, on selling the naming rights for
stations and the streetcar line, and on selling development rights on city
property. Nickels also would tap proceeds from a 2001 sale of city property
to companies controlled by Paul Allen.
Most council members have not seen Nickels' plan, which he sent to
council offices on Thursday afternoon. After a quick review, council
Transportation Committee Chairman Richard Conlin said the mayor's proposal
"looks reasonable and responds well to our questions and concerns."
The new streetcar line is modeled after Portland's relatively new system.
Paul Allen's company Vulcan is leading the redevelopment of South Lake
Union as a biotech center with 8,000 new apartments and condos. Allen's
company has been an advocate for the streetcar, as have some other property
owners in the area, including the Seattle Times Co.
In Nickels' financing proposal, building the new rail line and purchasing
modern streetcars would cost $47.5 million, which is $2.5 million more than
the mayor initially estimated.
The mayor expects to collect $25 million from private property owners
near the line, many of whom have pledged to meet such a commitment.
Another $12.3 million would come from federal and state grants the city
has secured. An additional $2.5 million would come from selling development
rights above the proposed streetcar maintenance shed on city-owned property
at the southwest corner of Fairview Avenue North and Valley Street.
City consultant Ken Johnsen, whose firm played a key part in developing
Portland's streetcar line, said it was likely that condos and apartments
would go atop the maintenance facility. Johnsen said he did not expect that
noise or other byproducts of the maintenance barn would chase away potential
developers or residents.
Conlin agreed. "I don't know if it's any different from being on top of a
parking garage," the councilman said.
If Johnsen and Conlin are right, that would leave the city $7.7 million
short on construction costs. Nickels would plug that gap with more federal
and state grants and proceeds from the 2001 sale of city property in South
Lake Union to Allen for $20 million. In approving that deal, the City
Council specified that $9 million of the proceeds should be spent on
transportation improvements in the area.
Financing the operation of the new streetcar line might prove more
difficult than building it.
Nickels projects that the streetcar would cost about $1.6 million a year
to run, from its first full year in 2008 through 2011. He would use four
sources of money. About 42 percent of the operating cost would come from
$1.25 fares, federal grants and revenue from the sale of naming and
advertising rights. The rest would come from King County Metro, the county
transit agency, which would operate the streetcar under an agreement with
King County Metro would do so by dedicating resources to the streetcar
that would have been used for new bus service in the city.
Michael Mann, a policy adviser to Nickels, said the streetcar would take
less than 20 percent of the new Metro resources allocated to the city
starting in 2009.
Streetcar stations, similar to Metro bus shelters, would be erected every
two to three blocks along the route. Based on experiences in Tampa, Fla.,
and Portland, Nickels' staff is confident that they can sell 10-year naming
rights to the stations for about $1.3 million. They also expect to sell
naming rights to the streetcar line and painted advertising on the cars for
roughly $1.7 million.
Conlin said council members would probably question the mayor's
projections for naming-rights revenue and streetcar ridership.
Nickels projects that about 350,000 passengers a year would board the
streetcars when they start running in mid-2007. The mayor expects the number
of riders to double by 2016.
Nickels' consultants also presented to the council last week details
about the impact of the streetcar on traffic and parking. They predict that
85 on-street parking spaces would be lost to the streetcar, which would run
in the right traffic lane on streets such as Westlake Avenue North.
Conlin has laid out a three-month schedule for reviewing the streetcar
plan before the council would vote on whether to green-light the project.
The next key step is a study of financial benefits the streetcar would bring
to nearby property owners. Those projected benefits will be used to assess
special taxes on private property owners to apportion the $25 million they
are expected to contribute to the streetcar.
Bob Young: 206-464-2174 or