Up To Speed

As the knowledge economy takes greater hold, where does Cincinnati fit in?

As the knowledge economy takes greater hold, where does Cincinnati fit in?.

As Cincinnati’s new leadership settles into their self-empowered roles of merely paving roads and keeping streetlights on, how does that position the city and region in an ever-changing economic landscape that is favoring fewer and fewer places? By not investing in placemaking strategies and transit, the city’s future may appear bleak unless a change is made. More from The New York Times:

“The most profitable businesses no longer involve heavy machinery; they are rooted in ideas, which, it turns out, spread most effectively when knowledge workers are densely packed together. The top handful of major metropolitan areas — New York, Chicago, Los Angeles — account for a hugely disproportionate share of overall U.S. economic growth, Glaeser says. There is every reason to believe this trend will continue and, most likely, increase. That will draw even more of the high-earning elite to big cities and many of the poor, too, seeking jobs and assistance in these centers of economic growth.”

Business Development News Politics Transportation

Cincinnati’s Streetcar Victory a Decade in the Making

The final, final, final vote for the first phase of the Cincinnati Streetcar took place today. Perhaps by now you all know the outcome. A six-person veto-proof super-majority voted to continue construction. Cincinnati, as Mayor John Cranley (D) said today, will have a streetcar.

What is important in this moment is to realize that everyone involved lived up to their campaign promises. Wendell Young (D), Chris Seelbach (D) and Yvette Simpson (D) stood strong in their support of the project – even in the face of uncertain outcomes.

At the same time, Christopher Smitherman (I), Amy Murray (R) and Charlie Winburn (R) held true to their promises to oppose the streetcar no matter what. They were the three lone votes against restarting construction.

Construction work will soon resume on Cincinnati’s $133M streetcar project. Photographs by Travis Estell for UrbanCincy.

Then there are the three council members who campaigned on taking a serious look at the numbers and making a prompt decision about whether to cancel the project or proceed. P.G. Sittenfeld (D), David Mann (D) and Kevin Flynn (C) all did that once they saw the numbers in detail. Cancelling a project this far along would have been fiscally irresponsible, and they voted true to their campaign promises to be good stewards of the taxpayer’s dollars.

UrbanCincy has been covering this project since we started the website back in 2007. Our original coverage focused on redevelopment efforts in Downtown and then Over-the-Rhine, but the streetcar quickly became a big part of that redevelopment narrative. It is no secret that we are strong supporters of the project and believe it will improve mobility in the center city and set the city on a path toward building the regional rail system everyone seems to now desire.

There are many people responsible for getting Cincinnati to this stage, but the biggest credit must absolutely be given to John Schneider. If it were not for his unrelenting leadership on this issue over the past decade, we would not be anywhere close to where we are now.

The emergence of Mayor Mark Mallory (D) then gave the city a prominent leader to push the project forward, and Mallory leaned on the expertise and leadership of former City Manager Milton Dohoney and Vice Mayor Roxanne Qualls (D) to get it all done.

It is important to keep in mind that the person who first pushed for the Uptown extension to be included in phase one was in fact Roxanne Qualls. The Uptown Connector was never part of the original phase one plan, but was added in later as “Phase 1b” at the urging of Qualls, who then worked with Mallory and then Governor Ted Strickland (D) to secure state funding to make that happen.

Hard fought victories in 2009 and 2011 helped keep the project alive, but also delayed it and ran up the project’s costs. Those delays also allowed enough time for Governor John Kasich (R) to assume office and pull the $52 million in state funding Ohio had originally pledged.

So while Qualls’ leadership and vision to have the first phase include the Uptown Connector is not being realized at this exact moment, our attention must now turn to extending the streetcar line to neighborhoods in Uptown as quickly as possible.

Cincinnati Regional Rail Plan
The first phase of the Cincinnati Streetcar system is a small part of a much larger regional rail plan envisioned by leaders. Map provided by OKI Regional Council of Governments.

A new wave of leaders and organizers has emerged in Cincinnati as a result of this most recent battle over the streetcar project. This includes the heroic efforts of Eric Avner and the Haile/U.S. Bank Foundation for drumming up private support to contribute $9 million toward the project’s ongoing operations.

Their hard work and courage should certainly be commended, but let’s also not forget the people who have been pounding the pavement on behalf of the streetcar since the beginning. Most Cincinnatians in 2007 did not know what a streetcar was, much less a modern one and the benefits it would bring. The hard work put in by those people early on was necessary.

This movement was not built overnight and these supporters are not fair-weather fans of the city. The movement has grown in size and grown more sophisticated over the past decade and is now stronger than ever.

You too can join this urbanist movement in Cincinnati.

We gather at the Moerlein Lager House around the first Thursday of every month to host URBANexchange – an urbanist networking and social event. We also partner with the Niehoff Urban Studio at the University of Cincinnati to study complex issues facing our city and engage the public in that dialog. Please join us at our next URBANexchange and pay us a visit in Corryville for our next event with the Niehoff Urban Studio.

Now is a time to celebrate and reflect. But it is not the time to get complacent. There are more issues to address and this energy that saved the streetcar needs to be redirected there. Congratulations, Cincinnati! Let’s get to work.

Business News Opinion Politics

EDITORIAL: Localizing Operating Costs for Streetcar Sets Dangerous Precedent

On Thursday morning Mayor John Cranley (D) called a press conference for a “major” announcement. He was joined by leadership of labor unions representing city workers, along with Councilman Kevin Flynn (C).

So what was the big news? Well, Mayor Cranley had announced that he would be willing to continue the Cincinnati Streetcar project that has already received direct voter approval twice, support of City Council, appropriated funds for its entire project cost, and began construction, if streetcar supporters could come up with a private funding commitment that would cover all operating costs for the first phase of the system over the next 30 years.

Oh yeah, and he asked that those boosters kindly secure that $60-80 million commitment in one week’s time.

Cincinnati Streetcar Construction Work at Government SquareUtility relocation work proceeded near Government Square on November 16, but whether that work will ever resume is up to Mayor Cranley and Councilmembers David Mann and Kevin Flynn. Photograph by Travis Estell for UrbanCincy.

Aside from the unprecedented request, a first of its kind for any transit program in America, it is troubling for two other key reasons. First, it sets a dangerous new precedent for how city government operates in Cincinnati, and secondly it is an obscene double standard for transit projects to force such a financial commitment.

Dangerous Precedent
With labor union representatives at his side, Mayor Cranley continually stated how he has an obligation to deliver the basic services we all cherish, and said that Cincinnati has a difficult enough time meeting current financial liabilities, much less new ones. As a result, he demanded that the private sector and streetcar supporters, should they actually support the project, put their skin in the game and fund its operations for the next 30 years.

That is all great campaign rhetoric, which Cranley used brilliantly leading up to the November 5 election, but it is completely irrational.

If the City of Cincinnati cannot afford any new financial liabilities, then will Mayor Cranley and his administration be requesting operating plans and financing for those new efforts from anything that comes to his desk? He has stated he wants to hire 200 new police officers, but who will shoulder the ongoing financial liability that will place on the City’s operating budget? Cranley has said he does not want to raise taxes, so that leaves only making cuts elsewhere to free up money for such a huge expansion of public safety forces.

Being and true and blue west sider that Mt. Lookout resident John Cranley is, he also supports the proposed Westwood Square project. While UrbanCincy also wholeheartedly supports that project and the form-based code it was borne out of, we have never seen a financing plan for it or any estimate for what its ongoing costs will be to the City. If “no new liabilities” means “no new liabilities” then we are concerned that Mayor Cranley’s new approach to governance will jeopardize the Westwood Square project.

Westwood SquareMayor Cranley’s dangerous new precedent might put the advancement of such projects as Westwood Square at-risk. If not, it would create a massive double standard. Image provided.

In addition to the Cincinnati Streetcar, 200 new police officers and Westwood Square, this new heavy-handed approach will also jeopardize the Wasson Way Trail, future phases of Smale Riverfront Park, improvements to the city’s waste collection operations, the rebuild of the Western Hills Viaduct, completion of the Ohio River Trail, and development of the Eastern Corridor. This new standard will also put at risk what the Cranley Administration seems to hold as the Holy Grail of all local projects – the MLK Interchange.

Should we also expect a move by the Cranley Administration to stop all construction activities and spending on the Waldvogel Viaduct that is currently being rebuilt? That project has never submitted a financial report that estimates a 30-year operating cost, much less any private sources to cover those ongoing financial liability costs.

Double Standard
UrbanCincy certainly hopes that this is in fact not a new standard protocol at City Hall, because it will put a stop to virtually everything the City does and bring the delivery of public services to a screeching halt. If that is the case, then Mayor Cranley’s olive branch to streetcar supporters is nothing more than a massive double standard.

Virtually every project the city undertakes adds liability costs. The Parking Modernization & Lease plan would have, of course, added none and in fact reduced future liability costs, but Mayor Cranley and his administration were quick to kill that deal as well.

And while this move by Mayor Cranley is typical of anti-transit forces around the country, it is also unacceptable. The user fee for roadways – the federal gas tax – has not been raised since 1993 and covers approximately 51% of the annual costs of maintaining our roadways. Public safety departments collect nowhere close to the amount of revenue they demand in terms of their costs to operate. Our schools, libraries, cultural institutions and parks all require taxpayer support, but such demands are not placed on them, nor should they.

Had Smale Riverfront Park been mandated by Mayor Cranley’s administration to provide 30 years’ worth of operating funds upfront in binding agreements before he approved any capital dollars for it to get started, then that project would most likely still not be started to this day. Instead, under normal governance, Smale Riverfront Park moved forward with its construction, and then capable leaders such as Willie Carden, Jr. were tasked with developing innovative and sustainable mechanisms to fund in over its lifespan.

It is unfortunate the Mayor Cranley and his administration have cornered Cincinntians into this position. It is unreasonable to ask our business community to fund public projects that should be funded by the public agency that committed to doing the project in the first place. Fortunately Cincinnati has proactive thinking leaders like Eric Avner and the Haile/U.S. Bank Foundation working to meet the unreasonable demands of Mayor Cranley.

But should the business community deliver on this unreasonable request to fund the project’s operations for the next 30 years; then those investors should receive the returns the investment generates. The same is true if city residents want only those along the line to pay for its operations. If the costs must be localized, then so should its benefits.

Quite simply, residents elsewhere in the city who do not want to take on any risk deserve none of the returns.

The center city already subsidizes the public services provided to the city’s neighborhoods. If Mayor Cranley wants to continue on this damaging path of pitting neighborhoods against one another, then we will all quickly realize just how much we are dependent on one another economically.

In 2011, for example, the City of Cincinnati collected 71% of all city tax revenues from just eight neighborhoods: Downtown, Over-the-Rhine, West End, Queensgate, CUF, Corryville, Avondale and Clifton – collectively and colloquially as “Downtown” and “Uptown”.

The health and success of Downtown and Uptown is critically important to the overall health and success of the entire city. While many residents may believe that too much is invested in those areas, the reality is that those eight neighborhoods pay far more in taxes than they ever receive.

UrbanCincy is calling for an end to the divisiveness and to fully invest in our city’s future. Finish the Cincinnati Streetcar.

Business Development News Politics Transportation

The Plot Continues to Thicken for Cincinnati’s $133M Streetcar Project

Streetcar Charter Amendment Announcement
Streetcar Supporters Gather Outside City Hall to Announce the Start of a Charter Amendment Petition Drive. Photograph by John Yung for UrbanCincy.

In the latest twist of the ongoing Cincinnati Streetcar saga, the Federal Transit Administration (FTA) Administrator, Peter Rogoff, sent a piercing letter to Mayor John Cranley (D) and all nine members of City Council informing them that the FTA is planning to act quickly on what they perceive as a material breach of contract.

“The Cincinnati City Council passed eleven ordinances on December 4, 2013, that have the effect of suspending progress on the Cincinnati Streetcar Project, an unprecedented action to suspend a federally funded transit project while it is currently under construction and after the City committed approximately $116 million in expenditures and contractual agreements,” Rogoff wrote.

“The Council’s action is a material breach of the FTA Master Agreement and the separate Grant Agreements executed between FTA, the City, and the Southwest Ohio Regional Transit Authority to fund the project. As such, I write to inform you that unless this action is reversed and I receive not later than midnight on December 19, 2013, unequivocal assurances that the City will proceed with the project to completion on the current FTA-approved schedule, FTA will immediately terminate all of its grant obligations for the project and initiate a debt collection action to recover money owed.”

Strong words. It is no wonder Mayor Cranley jumped out in front of the media early on Facebook Friday morning to spin the letter as a positive development for his administration.

But what it also means is that the City of Cincinnati must complete its third financial audit of the project, with KPMG, no later than that date and should make a decision FTA finds satisfactory in order to avoid the loss of $40 million from the Federal government and debt collection on another $5 million of Federal money already spent.

“The City understood FTA’s position before it decided to suspend the project,” Rogoff emphasized with regard to ongoing claims by some streetcar opponents, contrary to what FTA has directly told them, who believe the $45 million in Federal funding could be reprogrammed to other area transportation projects.

Those activities happened on Friday and continued to evolve over the weekend. Meanwhile, the group fighting Mayor Cranley on this matter held a press conference on the steps of City Hall Monday morning announcing the start of a petition drive that would place a Charter amendment forcing the administration to finish the project according to its contractual agreements.

Streetcar supporters will need to gather 5,970 signatures in order to have the Charter amendment placed on the ballot, but say they are striving to collect 12,000 within five days in order to send a message to City Hall. Should they get the necessary signatures, it would be placed on the ballot for voters within 60 to 120 days according to state law.

“We are confident that this [the city’s ongoing financial audit] will show that the cost to stop the streetcar is more than the cost to continue,” Ryan Messer, unofficial spokesman for the ‘We Believe in Cincinnati’ organization, told the crowd. “We hope at that point City Council will remove the pause button and hit the restart button, so we can continue to see the growth and development that has already come as a result of the Cincinnati Streetcar.”

Article XVII Streetcar Charter Amendment

At the same time, Mayor Cranley has gone on the record and stated that he would potentially veto any majority vote by City Council to restart construction and complete the project. Such a move would require the Charter amendment or a 6-3 super majority vote of City Council to override the mayor’s veto.

Following Monday’s press conference, the ‘We Believe in Cincinnati’ organizers say they will host a signature gathering training session tomorrow evening at First Lutheran Church at 1208 Race Street in Over-the-Rhine from 6pm to 8pm. Organizers say all are welcome to attend and that they expect hundreds to show up for what will be the first of a five-day blitz to collect thousands of signatures.

In order to get to the super majority vote, streetcar supporters need both Vice Mayor David Mann (D) and Councilman Kevin Flynn (C) to side with the four existing council members supporting the project. While both Mann and Flynn have stated, and campaigned on the fact, that they would consider the facts and figures before making a decision, both have shown indications that their minds may already be made up even before the latest audit is completed.

“I’m not against the streetcar because I’m against streetcars,” Flynn, who prior to being elected had been a prominent streetcar supporter, told The Enquirer on Monday. “I’m against it because I don’t think it makes economic sense for the city right now. I don’t think the numbers are going to come back supportive.”

Whether Flynn and Mann were sincere in saying that they would reasonably consider the facts and figures associated with taking “unprecedented action” to cancel a project already under construction, or not, is yet to be seen. But in either case it appears that streetcar supporters have a tough road ahead of them.

Business Development News Politics Transportation

After Another Day of Chaos at City Hall, Council Votes to “Pause” Streetcar Project

Today was the day that would show the true colors of those members of council freshly sworn into office. They were faced with a decision of voting to continue and finish construction of the Cincinnati Streetcar project, or voting to pause and essentially cancel the project altogether.

A shifting landscape continued to alter the debate and make the whole vote more intriguing, and thus more revealing. Yesterday a confidential document was leaked, that courts had ordered remain confidential, and showed that city attorneys felt the city might lose its case against Duke Energy for the cost of relocating utilities along the streetcar line. Many suspect the document was leaked by Mayor John Cranley’s (D) administration. Such a legal loss would cost the City the $15 million it currently has set aside in escrow.

On Monday, the Haile/U.S. Bank Foundation had offered up private money to fund the independent financial review of the project, which was then matched by an anonymous contribution on Wednesday that would also cover the costs of construction to continue while that study was conducted. Both offers were turned down by Mayor Cranley and the five members of City Council who ultimately voted to pause the project indefinitely.

Cincinnati Streetcar Financial Summary

Acting City Manager Scott Stiles also informed City Council that such an action to “pause” the project would cost the City between $2.6 million to $3.6 million per month due to contractual obligations – a number that exceeds the total amount it costs to merely continue construction activities.

An official vote to continue or cancel the $133 million project is expected to come following the conclusion of the financial review.

Some city officials believe the move will result in the Federal Transit Administration pulling $40 million in unspent money from the project and beginning debt collection on the $5 million already spent by the city – thus increasing the local cost share for city taxpayers. Others believe that the way in which the 11 approved ordinances have been written give the City a limited amount of time before the federal government acts.

During the hearing there were times that both Vice Mayor David Mann (D) and Councilman Kevin Flynn (C) seemed to be conflicted. They had both campaigned on their skepticism of the project, but vowed to carefully review the facts and figures associated with cancelling the project at such an advanced stage. Those promises, however, appear to have been not much more than lip service in order to appease their progressive base of supporters.

What actually happens next is anyone’s guess. A lawsuit has been threatened by a Cincinnati resident and attorney alleging Councilman Christopher Smitherman (I), who was one of the five voting against the streetcar today, has a conflict of interest and therefore has committed wrongdoing by voting or engaging in official discussion on the matter.

Additional legal action may come from citizens trying to block today’s action by council that prohibits citizens from placing the matter on the ballot for a third time. Outside of that, both CAF and Prus appear poised to file lawsuits against the city for breach of contract.

If streetcar supporters are successful at getting the matter put on the ballot, such an issue could be placed before voters as soon as 90 to 120 days following that motion. Although, it is expected that the Federal government could still pull their investment during that time regardless.

Atlanta Streetcar Construction
As politicians continue to bicker over Cincinnati’s $133M streetcar project after six years, Atlanta blazes ahead with construction of its own $69M streetcar project near Centennial Olympic Park. Image provided to UrbanCincy.

What makes the whole matter more startling is the apparent change of heart from the city’s powerful business community. Earlier today, the Business Courier reported that leadership at companies including Procter & Gamble, Frost Brown Todd, CBRE, Otto M. Buding Family Foundation, Haile/U.S. Bank Foundation, Greiwe Development Group, Grandin Properties, Blue Chip Venture, Jack Rouse Associates and Fifth Third Bank all expressed specific interest in either finishing the streetcar project or moving forward with a comprehensive regional rail transit system.

The Cincinnati Enquirer has also changed their position in recent weeks calling on the new mayor and council to finish the project.

All this combined with the change of position by P.G. Sittenfeld (D), who is now in favor of finishing the streetcar project, have seemingly empowered the active pro-streetcar groups causing some to urge for a recall of Mayor Cranley. Recall election or not, streetcar supporters are stating the battle is not over after today’s expected vote.

Who knows what will happen next, but what happened this week defies logic. In a matter of just three days, the new mayor and council have undone all the work that has taken place over the past six years to get the streetcar project to this point. Some may call that rushed, chaotic and reckless, and we would be inclined to agree with those people.

We know many of our readers are very passionate about this issue and very much want to see the first phase of the streetcar not only completed, but eventually expanded city-wide in a manner that compliments regional rail and bus transit. We will be getting together at the Moerlein Lager House tomorrow from 5:30pm to 8:30pm for our monthly URBANexchange event, and we would love for you to join us and share your feelings and discuss what you think will or should happen next.