Cincinnati could sue state if governor pulls streetcar funding

Streetcar supporters were outraged when they heard Ohio Governor John Kasich (R) was considering pulling as much as $52 million in state support from the Cincinnati Streetcar project. Such of move would have left the project with a financing gap and would have resulted in reduced scope or delayed construction. But according to some, a move of that nature by the governor may not carry legal merit.

The premise for cutting the funds for Cincinnati’s modern streetcar system is that the State of Ohio is facing an $8 billion budget deficit, and state leaders are examining many ways to cut that figure. But according to Ken Prendergast, executive director of All Aboard Ohio, those funds awarded to the Cincinnati Streetcar would not actually impact the state budget.

“The funds to be cut are federal transportation dollars. If they are not used on the streetcar, then they would be used on a transportation project with a lower TRAC ranking,” Prendergast explained. “In other words, Kasich is giving Cincinnati a false choice.”

Prendergast is referring to the Ohio Department of Transportation’s (ODOT) Transportation Review Advisory Council (TRAC) which was first established in 1998 to depoliticize the allocation of transportation funding. TRAC awards money based on a merit score, and the Cincinnati Streetcar earned 84 points which placed it as the highest-scoring transportation project in the entire state.

Local officials close to the Cincinnati Streetcar project believe Governor Kasich is attempting to strip the funds from the streetcar and reallocated them to the $2 billion Brent Spence Bridge replacement which scored a paltry 44 points on TRAC’s transportation list. The other reality is that the money could go to the Eastern Corridor plan which had three components scoring 34, 39 and 48 points – all well below the Cincinnati Streetcar’s state-leading 84 points.

“Our governor is making a false argument that pulling back this federal money will save the state money,” said Prendergast. “The streetcar funding has nothing to do with the state’s deficit. If it is not used for the streetcar, it will go to a lower-ranked Ohio road project.”

Two separate studies estimate that the modern streetcar project will stimulate approximately $1.5 billion of new investment in Downtown and Over-the-Rhine, or roughly 15 times the cost of the streetcar project. The Cincinnati Streetcar’s second phase Uptown is also expected to make large economic impacts, and has scored a 71.5 points on TRAC’s list.

“Why is our governor against redeveloping Cincinnati’s downtown and Over-the-Rhine areas with the streetcar? Steel rails offer a far superior path to jobs and growth and clean air than yet another asphalt road pitted with potholes,” concluded Jack Shaner, deputy director of the Ohio Environmental Council.

According to Prendergast, the end result may be a another legal battle for the controversial governor. He says that at attempt to move the funds from the streetcar to another, lower-ranking transportation project, that Cincinnati officials would have legal grounds to sue the state for not following its own criteria in awarding federal transportation funds.

Modern Streetcar in Cincinnati photograph by UrbanCincy contributor Thadd Fiala.

  • Dan

    I have a feeling most of Kasich’s decisions are going to end up in court. The guy has absolutely no respect for the citizens, law or government of this state. This is all just some ridiculous ego trip for this idiot and he’s going to destroy the economy of this state. How people elected him after the crap he pulled at Lehman Brothers and the state pension funds is mind blowing.

  • Matt Jacob

    I’m glad that there are some repercussions if he makes these misinformed decisions. I was beginning to worry.

  • analeyesr

    I’m a lawyer specializing in civil regulatory law. I’ll work on this pro bono.

  • Dale Brown

    I would like to see their scoring system, and what the impact has been on the studies that happened pre-recession, including the collapse in the real estate market. And the impact of the continued decline in Cincinnati population.

    Brent Spence; a known issue effecting many of the 2.2 million people that live in the region, as well as a known chokepoint for local, regional, national, and international commerce, and a safety hazard to boot.

    Or a streetcar that will serve a diminishing population?

    And before some new-age hipster comes by and flames me because they “don’t use the bridge,” unless you live off food grown exclusively in Cincinnati and somehow found someone building computer components in Cincinnati, than yes, I-75 is critical to everything you do.

  • @Dale Brown: You can find out how and why TRAC was established, how it ranks and scores transportation project and much, much more by reading through this document:

  • Johnny Mercer

    “Dale Brown” is a troll from the Enquirer’s comments section. It looks like he somehow escaped from his cage and made it over to Urban Cincy.

  • Zack

    UC, downtown, and Northern KY have grown significantly, and seeing how these are the areas that the streetcar will serve, im not sure how you can attribute to “diminishing population”. Maybe instead we focus on the mass migration to West Chester. Maybe add another lane on Union Center Blvd?

    I-75 is important. $2.2B important? Are there businesses that will flock to Cincy because of its “terrific bridge technology”? Or more residents?

    For the record, thats 43 state funded streetcar shares to equal that bridge, which may alleviate the 4 hours of backed up traffic per day now, but will cause 5xs the backup over the next 8 years + of construction. And further more, wont stop the current roads from getting backed up near Kenwood, the lateral, etc…

  • Dale Brown, so how much investment has the bridge to nowhere influenced in Cincinnati? I propose it allows people to not stop within a 100 miles of the city.

    The hubris of Kasich is mindblowing.

  • J

    I thought the Brent Spence bridge was owned by Kentucky?

  • Mr Brown’s comment makes sense in a completely static reality. Which, of course, doesn’t exist. The streetcar is intended to drive population to the city. One might argue the population loss is due to not having the thing.
    Also the real estate market in Cincinnati has not “collapsed” the way it has in the SW desert and on the coasts. Frequent reports put the downtown market in fairly decent shape with renovated units.

  • Matthew Hall

    If I-75 is “critical to everything” ‘we’ do, shouldn’t ‘we’ who actually use it be willing to pay to use it through tolls. Subsidizing transportation in ways that distort the market in transportation has caused many of the problems we now face. Paying for what you use should be the guiding principle of modern government. It would force tranportation planners to justify use projections much more carefully. Building interstates and bridges on the principle of “build it and they will use it” has simply drained away money from other more efficient tranportation projects. Its like putting all your money into your garage and neglecting your house. Eventually you are completely dependent on your garage for shelter leaving your house uninhabitable. We need both and must fund both.

  • greymattermom

    I think that the Ohio-Kentucky line is at a historic low water mark on the Ohio side and that the bridge in question is in Kentucky. It seems unlikely that the governor of Ohio has jurisdiction.

  • Ohio is on the hook for about half of the $2-plus billion Brent Spence Bridge replacement project. While the Kentucky DOT owns it, it is not their sole responsibility to pay for its replacement. Maintanence over time though is on their balance sheets though, I think.

  • DP

    @J – The river span of the bridge is owned by Kentucky, but the “Brent Spence Bridge Project” includes several miles of roadway improvements to I-75 on either side of the river. The Ohio portion of the project includes approximately $870 million in construction. The new river span is on the order of $730 million – I think KY and OH split that amount 80/20. So Ohio would be on the hook for approximately $1B of the $2.3B total.

    My understanding is that the Kentucky portion of the funding is even less certain than the Ohio portion. With the budget issues, transportation reauthorization negotiations, and a supposed ban on earmarks, recent articles have noted the possibility that construction funds may be dependent on a public-private partnership (P3), which either means tolls or long-term payments by the states.

  • Jake Mecklenborg

    I spoke in front of 70 people last night and asked them when the last time Cincinnatians voted for a road project. None of them knew (the answer is 1956). Meanwhile, we’ve had a total of six votes on public transportation in the city and county since 1970, and this second streetcar vote in 2011 will be #7.

  • Seymour T

    @ 5chw4r7z—The hubris of Kasich pales in comparison to that of Chris Bortz and the naivety of those that get in line behind him is what blows my mind. Then again, you’re a downtown property owner, right? If so, your enlightened self-interest is duly noted.

  • Isn’t Chris Bortz not allowed to vote, or even publicly comment on his position about the streetcar because of his property along the line? I don’t think he is leading the charge for the streetcar as you seem to suggest, @Seymour T

  • Juan De Bonia

    @ Randy A Simes – thanks, great document. I’ve actually been wondering exactly how they did the selection. Do you have any idea where I can find the results for when this analysis was applied to the streetcar?

  • Zachary Schunn

    I’m so confused. So many things don’t add up here.

    First, the governor is trying to kill federal money because the state is facing budget issues. Second, he is recommending those dollars get funneled to a project that comes in at 20X the cost. And finally, he is advocating funding dead-end projects–road and bridge infrastructure–that make NO return.

    The streetcar project is estimated to produce around $3 billion in development, which when discounted to today’s dollars equals an NPV of over $350 million.

    In other words, this is equivalent of a business saying, “Well, if we invest $128 million, we’ll get a 375% return (in 2011 dollars… 1500+% future return); but, we’d rather spend it on something that will see essentially zero return.”

    Wanting to cut down budget deficits is a sensible goal. It really is. But doing so in ways that create HIGHER future deficits is not the smart way to do it. Not only would Cincinnati collect toll money from the streetcars, it would see higher property taxes from the $3b in development. A highway project? Absolutely no return. No tolls, no development, no anything.

    My problem with Kasich isn’t so much that he’s anti-public transport. I’m concerned that he’s anti-math.

  • Bbrown

    If Kasich was so worried about balancing the budget he would not be taking so many questionable actions that will cost taxpayers significant amounts of money to litigate.

  • Ian Webster

    The hypocrisy with Kasich, and Scott Walker in Wisconsin, that really annoys is, these are the people (along with supporters), who were crying out loud for at least a year about how Congress “rammed through” the health care reform law. Now, of course, that is a federal matter, I understand that. But now they’re doing JUST THAT…ramming through their agendas with, really, blinding speed.

    The other thing is, Kasich got his way with the $400+ million that would have been used re-establish rail service between the three largest Ohio cities. The money went back, OK king chimp? Can’t we just have this piece, at least?

    My big thing is that, most of the people opposed to this thing, are ones in the burbs!! It will not affect them the least bit, and yet they’re influencing how things could very well go down. It’s a shame, I tell ya…

    I left Oklahoma to come here for a job. I gave Cincinnati a chance (albeit reluctantly, lol). I have faith that this city can be like St. Louis, or Denver, or maybe even *god forbid* Pittsburgh. We need to take the power back from them, the naysayers, mainly from Tom Luken and the COAST douchebags. The streetcar HAS to happen.

    Off my soapbox now.

  • Matt Jacob

    @ Zachary Schunn While I agree with you that the streetcar will be a good longterm investment for the state with a high rate of return, I believe your analysis of the Brence Spence bridge is completely wrong. Most notably, you are comparing two completely different types of projects. One grows the pie (streetcar)with new development and one retains the size of the pie (Brence Spence bridge) and all the old development built on it. Without a solid crust to maintain the pie we’ve already grown, we’ll lose more pie filling than we can hope to grow the crust by.

    While it might cost $2B for a new bridge, it is supporting much more than its cost in old development that has made our region what it is today. Do you really think northern KY alone would even be a shadow of itself without that bridge? So while you’re right that we’ll see essentially no NEW return on the bridge, we will ensure that we retain the very high return that the bridge has already brought to our region.

  • Juan De Bonia

    @ Ian Webster…Have you been to St Louis or Denver? No thanks. That is an argument I hear often. I think it’s completely misguided. Every city has it’s unique geography, demographics, culture, history, and population distribution. To go to Boston or Seattle or any point in between and say, “look! they have a and we should get us some that too!” is a mistake. One thing I haven’t seen that I would love to get my hands on is the analysis behind the decision to go forward with the streetcar. Show me the numbers and show me the logic and maybe I’ll jump on the bandwagon – for now I have my doubts.
    Furthermore, Ohio’s Transportation Review Advisory Council has reported that they have gotten a record amount of correspondence regarding the streetcar project. The majority is opposed. I’m not sure where you are getting your data that most of these people are from the burbs – but IF that’s true – the vast majority of the population of hamilton county lives in the burbs so it would make sense.

  • Seymour T, yep I’ve never hidden my unbridled enthusiasm for Cincinnati.
    Greatest place in the world with or without a streetcar.
    And for the record, I’ll have to walk past about everything I’d ride the streetcar to to get to the streetcar.

    I don’t know who you are, another Anderson coaster?

  • Its amazing how people complain the streetcar WON’T do anything for the city, then complain everyone’s property values will go up so we have self interest.
    HELLO! thanks for proving the point that it will raise property values and property tax revenue.

  • Ian Webster

    @ Juan: I’ve been to St. Louis once, Denver twice, and both seem to be doing WAY better than Cincinnati, don’t you think? And don’t give me crap about St. Louis’s crime rate, as every city has some kind of criminal element…

  • Geez

    What ever happened to walking or riding a bike? Development is and will continue to happen, you don’t need a streetcar to do that. A bike is a hell of a lot greener too which I know you tree huggers agree with. It will take you longer to ride a streetcar from the Riverfront to Clifton than it would be a bike. You want to be a healthy, green, active city???? Pedal your ass up the hill.

  • Zack

    My mom cant ride a bike from Riverfront to Clifton. But she can ride a streetcar.

    I think those who live in “Scary downtown” hope that a streetcar would open some suburban eyes, if not for residence then for dining and shopping.

    Case in point: my co-worker, who works downtown, and used to live in Sycamore @ Xavier, asked if Plum and 5th was “shady” for her parking needs. Even those who have been or are here have convinced themselves that their hometown is some monster out to get them.

  • Jason

    Geez: I live in OTR and ride my bike to work in Clifton regularly. But, I challenge you to do this when it’s zero degress and snowing or when its 40 degrees and pouring down rain. I would use the streetcar regularly in any situation where my bike wasn’t possible. In a city like Cincinnati a streetcar would actually allow me to go without a car year round for most purposes.

  • Matthew Hall

    Hamilton County is irrelevant here. The relevant authorities are the city of cincinnati and the federal gov’t. Federal rules apply to the spending of this money and the city of cincinnati is the recipient.

  • Matthew Hall

    While Denver is clearly doing very well, St. Louis’ demographics, both in the city and MSA are worse than Cincinnati’s. Still, it is by far the best comparision to Cincinnati. They have used light rail to connect the dots and make the most of what they have. It hasn’t transformed the city or region but considering the relatively modest sums spent it has clearly been a net plus. We could learn a lot from the St. Louis example.

  • Geez

    @ Zack- she can ride a bus to @jason- you can ride a bus to. And here’s the best part…..THEY ALREADY EXIST!

    “It’s impossible to rationalize with the irrational.”

  • Zack

    Brent Spence already exists. Your car already exists. your home currently exists.

    Be sure to never upgrade or find a more efficient replacement.

  • B. W.

    The bus argument made by anti-streetcar oppenents just does not convince me. I know that if I wanted to use the same 150 million dollars to make much needed improvements to our existing bus service, meaning more park and rides with shelter, an improved payment system, new seats, more routes and maybe a smart phone app to tell me when the bus is coming, that the same people would be still be saying no for no apparent reason other than the fact that they don’t ride the bus.

  • Seymour T

    @ 5chw4r7z—I live downtown. I like it a lot but can’t say that it’s the best place in the world. Perhaps you see purple or green when you look to the sky today, I see blue.

    I’m not a member of COAST and I lean hard to the left. So do you assume that just because someone is anti-streetcar that they live in the burbs and belong to the Tea Party?

  • @Seymour T — To each his own… I don’t think that you can tell @5chw4r7z that Cincinnati is not the greatest place in the world. Small things that make some people love Cincinnati may go unnoticed by others. I’m not going to tell you to leave Cincinnati, or even assume that you don’t like it, but some people find a real connection with the city that you wouldn’t trade for the world.

    Why aren’t you a supporter of the streetcar? Do you just not believe it will create a positive economic impact? Is it because you won’t ride it? You think the money could be put to better use? Or something else entirely?

  • Bbrown

    @ Juan De Bonia- Here you go this is a list of all the studies and analysis on the streetcar project. It took me a whole 30 seconds to find it with a google search, so it’s not some secret information.

    Also, the TRAC is bound by certain specific measurables to score transportation projects. This is due to the funding which is supplied by the federal government. So if they choose to give it to a much lower scoring project, they are violating the conditions on which they were provided the grant. The streetcar project scored an 84 out of 100, the most by 10 points. Two projects scored in the 70s one being the Oasis rail line, the rest were in the 60s or lower with most scoring in the 40s, 50s, and 60s.

    Furthermore, this is all very interesting because the reason the TRAC was created in the first place was to rank projects objectively so that politics could not factor into the decision. However, this is exacty what Kasich is attempting to do.

  • Zachary Schunn

    @ Matt Jacob:

    So you’re saying the bridge should be funded to continue northern KY’s development? Wouldn’t that just move Cincinnati jobs and money across the river? I fail to see why Cincinnati or Ohio should support that.

  • J

    I live downtown and I am for the streetcar. The assumption is that I would profit from increased property value, but I’m a renter. I support the streetcar because you can’t have a strong region without a strong urban core. Too bad many Cincinnatians can’t grasp this obvious law of the universe.

  • Matt Jacob

    @ Zachary Schunn I’m saying that both should be funded for different reasons. The streetcar for its new development potential and the Brence Spence for its reinforcement of the old development which it supports. Northern KY’s development is only one example of the old development that the Brence Spence has helped create and which needs to continue to be supported by maintaining the infrastructure. Other examples include any business on the Ohio side that are related to large amounts of traffic that flow through our city due to this vital North-South link. Many businesses wouldn’t have been located in Cincinnati in the first place without that link, not to mention all the spin-off development of warehousing and distribution, storage space, fast food, and hotels. At the very least you wouldn’t want to disconnect Ohio businesses from the consumer base that now lives across the river.The Brence Spence bridge project is being funded from both sides of the river with KY paying more than its half, which arguably it should because it means more to sustaining their old development than Ohio’s. What’s good for the region’s economic growth is good for Ohio and Cincinnati just as much as it is for northern Kentucky in the long run.

  • Joe

    If streetcar supporters believe that it will create a large amount of economic development why didn’t they use a special assessment district or a tax-increment financing district on property owners along the route. Instead they are going to the state going to get their project paid for by taxpayers that will likely never benefit from it but still have to pay for it. Unlike a bridge which will be used by everyone and is on one of the most important transportation corridors in the country they want state money to fund a project that will have inherently unequal benefits. Bottom line: This is an Cincinnati project and should be funded by the city and not by state or federal taxpayers. What are we going to do, postpone the replacement of the Brent Spence until it fails and have a disaster comparable to the bridge collapse in Minneapolis/St. Paul just because a few OTR property owners and residents want a highly subsidized new toy.

  • Joe:

    The city is using tax increment financing along the line to help finance its construction. TIF money is being used to the tune of $25 million. It would be financially irresponsible and short-sighted to use only one source of money to fund a project of any kind. It’s kind of like an investment portfolio, you want to diversify your investments.

    So far Cincinnati has generated millions from private sources, state sources, regional sources, local sources, and federal sources. Plus, there are the TIF dollars to be used from properties directly on the streetcar line. Feel free to take a look at the financing plan anytime you’d like. It’s been written about dozens of times and has been available for public download for many months.

  • karon

    I found it interesting that Kasich said in one of his speeches that he loved Cleveland! Cleveland offers subways , buses, trains and of course cars for transportaton. I found it interesting that people living in southwest Ohio are actually help paying for Cleveland to have a subway system! At least with the Cincinnati streetcar , we would actually be able to see our tax money at work , than Cleveland which unless you are a vistor their have no access to it!