Streetcar Spurs Unsubsidized Growth in Portland

Portland is often cited as the “go to” city for rail transit and good planning initiatives. As someone who had ridden a fair share of streetcar, light rail and subway systems, I traveled to Portland with a dose of skepticism. TV shows like “Portlandia” showcase the quirky and often times absurd hipster culture that has blossomed in the city despite chronic problems with homelessness.

For a Cincinnatian, downtown Portland is a showcase of what could have been for downtown Cincinnati. A brief detour into Pioneer Place mall shows the potential of the failed Tower Place mall in downtown Cincinnati. A block away there is a downtown Nordstroms, something downtown Cincinnati failed to land in the 1990’s. A few blocks away, there is a downtown Target and TJ Maxx. The city’s retail scene is vibrant and its eclectic arrangement of food trucks and bicycle infrastructure add to that vibrancy.

It seems strange that these similarly sized metropolitan regions have realized two very different fortunes. One is of success through investing in transit infrastructure, the other struggling to make gains so far without it. This is why the construction and success of the Cincinnati Streetcar project is so vital.

Twenty-five guests of the Alliance for Regional Transit, spearheaded by John Schneider, toured Portland last month to ride the various modes of transit in the city and tour the different areas along the city’s expanding streetcar system. This is the 30th group Schneider has led out to Portland and also the largest.

Schneider has not always been a fan of rail transit. Citing the availability of bus transit, he was often critical of the need for rail in cities like Cincinnati. After the formation of Downtown Cincinnati Inc. (DCI), however, a survey was conducted where rail transit was found to be the top priority for downtown residents and visitors. He was assigned as the head of the Transportation Committee and tasked with bringing rail to the region, something he scoffed at at the time.

When recounting this story, he told the group in Portland that he had ridden several systems until one day he was riding a train in St. Louis and it finally clicked. The self-identified Republican has been a supporter ever since.

The tour began at the South Waterfront district, located at the southern end of the North-South (NS) Streetcar line. It is a new neighborhood that serves as the residential and office extension off the Oregon Health Sciences University Hospital, which is landlocked at the top of the adjacent hill.

The $1.6 billion development started in 2004 and is home to thousands of residents. An aerial tram serves as a direct connection between the South Waterfront and the hospital. The tram also offers dramatic views of the city and the surrounding Cascades mountain range.

The east side of Portland, opposite the Willamette River, is primarily dominated by auto-oriented developments, however there is evidence that the recently opened Central Loop (CL) Streetcar line is having a positive impact on development in the area. A $250 million upscale apartment development has already begun construction at the junction between the streetcar and light rail lines at NE 7th Avenue and NE Holladay Street in the sleepy Lloyd District.

The next phase of the Portland’s streetcar system will connect the end of the CL Line in the east end to the end of the NS Line near the South Waterfront. To accomplish this the city is building a $134.6 million cable-stayed rail, bike and pedestrian only transit bridge that will open in 2015.

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The tour also took the group through the Pearl District, which is the oft-touted renovated warehouse distinct in Portland.

While there are many comparisons to Cincinnati’s Over-the-Rhine neighborhood, it would be an unjust assumption because Over-the-Rhine features a greater amount of remaining abandoned and underutilized mixed-use multi-family buildings than the Pearl District. The Pearl District has seen over $2 billion in development, but it has largely been new construction built on sites that once were once occupied by rail yards and warehouses.

During the tour the group was introduced to different leaders who shared their perspective of Portland’s progress on its streetcar system.  People like Paddy Tillett, Principle at ZGF Architects, who is with the firm that helped spearhead the effort to establish the transit mall in downtown Portland.

“People were calling it a toy train and saying that we already had light rail,” Tillett told the group. “Even TriMet didn’t want to operate it.”

However Portlanders soon came to embrace their streetcar system, which is now in its fifth phase of construction. Tillett continued, “The streetcar helps extend peoples walking distance, it is not supposed to serve as point-to-point transit. Today it has a dedicated ridership and is helping demonstrate how streetcars can play an important role in public transit around the country.”

The tour was capped off with a meeting with Portland Mayor Charlie Hales (D). Hales told the group, “We no longer have to provide subsidies for downtown development.”

Mayor Hales also stated that it took fifteen years for developers to begin  reducing the size need of parking structures for development.

Portland is a beautiful city with vibrancy and life. However, this vibrancy was hard fought over the last three decades. The construction of the transit mall, TriMet light rail and the streetcar were huge gambles that ultimately paid off, and took Portland from a sleepy waterfront lumber town to a place where people move to even if they don’t have jobs lined up. Portland’s problems are ones born from success, not failure and even those problems are good to have.

At today’s council meeting, Cincinnati’s new political leadership will be making decisions regarding the continuation of construction of the Cincinnati’s streetcar system. The new mayor and city council will have to decide whether to continue the same hit or miss approach to development in the urban core, or decide to embrace a system that has a proven track record of success in many cities throughout the country and the world.

Cities like Portland are where the future is headed, Cincinnati’s new leaders should take heed.

  • matimal

    cranely, slitherman and their supports don’t want “unsubsidized growth” in Cincinnati. The very thought deeply disturbs them. This is THEIR town and THEY run it! They want to be able to control everything that happens in Cincinnati. Your discussion just reminds them all the more how tenuous their control is.

  • Matt Jacob

    I drove through on my way from Corvallis to Seattle near the end of the summer. No streetcar sightings, but during our brunch stop I got to take a look around. Very different than I imagined. I liked the hills and way their highways were elevated over everything instead of cutting through the city like ours. The way they reconnect parts of their city with those trams is pretty cool too. Lots of great ideas that could be applied on the transportation front, but the density had me wondering how zoning was involved in making that happen in practice. It seemed to be scattered around the city instead of clustered in the center like Cincinnati. I don’t know if that was a result of their transportation systems or what.

  • Matt Jacob

    0Interesting meeting tonight. Seems like Cranley only has the votes to pause. My money is on a 3rd party study funded by the Haile foundation to give Flynn, Mann, and Winburn the second look they want. As long as the numbers come out close to what we expect, it should be a no brainer to complete it and then focus on figuring out how the operating costs are allocated to the property owners, the city, and private sources.

    Flynn seems focused mostly on the operating costs and is scared they’ll balloon (like Metro’s grew sevenfold in 30 years or something, which I don’t think bus costs are very comparable since they have more drivers for the same number of passengers than a streetcar) He wants to know what the costs will be after year 1’s $3.4-4.4M, which is a good question that probably no one can answer with much certainty. He seems to be having trouble with the concept that this isn’t an exact science so someone is going to have to make assumptions here. Cranley and the bunch haven’t accepted Deatrick’s but hopefully they can accept the business community’s 3rd party review of an updated analysis (UC did this last time!!!).Glad some business leaders stepped up tonight and hopefully that will move the needle.

    Interesting move by Smitherman on proposing a council initiated referendum (because he believes in the referendum process so strongly apparently) which shocked the whole room. Simpson tried to call his bluff and vote on it tonight, but Cranley said it would have to wait for some readings or something and Smitherman backed away a bit on the idea as well. Seelbach was dumbfounded at the concept and most agreed that a pause was the better route to take tonight.

    Stay tuned folks. Even on TV they can’t make his stuff up like real life in Cincinnati.

    • Matt Jacob

      I also liked the line of “You find money for the things you value” which Cranley agreed with, yet only the operating costs would come from the things he claims to value more such as reducing the poverty rate, infant mortality rate, etc. The rest is being built with city TIF money from the area around the line that can’t be used for that purpose or elsewhere, right? So if the operating costs get covered by the SID or private donors, he shouldn’t have an issue theoretically.

  • There seems to be a very fundamental misunderstanding about what is subsidized and what is not, and what the issues are with each. Often times people cite the operation costs for the streetcar as a reason not to build it. Although, if this same standard were held for roadways, sewers, police, fire, street lights or parks, then I suspect nothing would ever get built.

    Furthermore, people seem to think that suburban development is the result of free market forces and ignore the massive subsidies offered for suburban development. Should property owners in West Chester Township have paid for the upfront capital cost of the Union Centre Boulevard Interchange when it was built? They certainly were the ones experiencing a huge localized impact from the project. Should they have also paid into a fund to cover the maintenance costs of the interchange and its surrounding service roadways? I suspect most would say no.

    • TimSchirmang

      It is very difficult to put a dollar value on police, fire, street lights, and parks. There is no denying that there is value in these items but I think reasonable minds could reach very different economic conclusions. I think we would agree that directly allocating these items to users would be difficult beyond practicality – so we accept indirect cost spreading.

      I don’t know the MSD budget cover to cover, but from my latest water bills I think sewer maintenance costs are now being substantially passed on to folks based on usage. There are probably still meaningful subsidies involved, I don’t know.

      As for roadways, I agree that widespread subsidies exist but will again point out what I think is a very fundamental misunderstanding about roadway economics. Over and over again I see criticism of the amount of money poured into highway infrastructure and how it is this giant subsidization of suburban soccer moms, roaming freeways without paying a nickel. Roadways, particularly the big-bad-interstate monsters, are justified mainly on the increased economic activity they enable by rapidly moving material inputs and finished goods all around the country. Moving people around is a relatively insignificant benefit of the highway system, a minor positive externality (or negative if you commute in rush hour). Spurring development proximate to new highways or new interchanges is also insignificant and ancillary. Asking for the cost of roadways to be justified on the latter two alone – in an effort to compare roadways to the streetcar – ignores the elephant in the room.

      The streetcar (and this is a neutral statement on the matter) isn’t built to move goods and materials. It 1) circulates people and 2) promotes proximate development. Its costs (capital and operational) need to be justified on these two benefits. Logically, capital costs could be tied to proximate development via property taxes, and operations could be tied to ridership via fares, but the plan is not to do so. On the other hand, the lion’s share of highway benefits – increased economic ‘flow’ – are ultimately enjoyed by those who receive greater personal income from the national economy, not necessarily users or those that live nearby. Hence, income tax subsidization with marginal gas tax and carrier fees makes sense.

      Comparing the streetcar to highway subsidies is a total waste of time.

    • Matt Jacob

      I agree that the comparison isn’t very good for the reasons you stated. There are other subsidies that the suburbs get that are better arguments than the highways themselves like the costs of expanding utility systems and side roads.

      I think in the streetcar’s case it’s pretty simple and common sense on how the costs should be split between both those on the line and the entire city. Higher property taxes along the line tied to the operating costs could even speed up OTR’s development by making it more costly to hold onto vacant buildings. Thankfully we already have an avenue to deal with the properties if they make their way back to the city through delinquency called 3cdc.

      The frustration is why we’re talking about the viability of the project still instead of about how to allocate the costs.

    • TimSchirmang

      With you 100%. There have been hints of adult conversation and they suggest that if the operating costs are covered, most of council and I bet even Cranley would green light phase 1 today. My understanding is that SID’s do not pop up overnight, lots of paperwork and whatnot. I suggest the vocal locals and businesses along the route pledge to cover the first year costs during their next green balloon gathering, or pre purchase annual ridership passes, etc. The SID process can be tackled for subsequent years.

    • As an OTR resident, I would gladly agree to join a transit improvement district (TID) to pay for the streetcar’s operating cost. Of course, the city will then give the TID the additional tax revenue that is created by new businesses and residents that open up along the route — right? 😉

    • matimal

      It’s much easier to put a value on property and on the changes in property value within walking distance of the streetcar line. It’s a large number, by the way.