Winning funds for streetcar won’t be easy

Last August at Union Station, visitors to the Modern Street Car Party, sponsored by the Regional Transit Alliance, toured an AmeriTram Ebrid Modern Streetcar.
Last August at Union Station, visitors to the Modern Street Car Party, sponsored by the Regional Transit Alliance, toured an AmeriTram Ebrid Modern Streetcar.

For months, Kansas City officials worked feverishly on a downtown streetcar plan to meet this week’s deadline to apply for $25 million in federal funding.

The money is crucial to the project, and this is the closest the city has come to building a rail transit line.

But now that all the applications are in, it’s clear the competition is incredibly fierce, and the city’s chances are tenuous at best.

The Department of Transportation said this week that perhaps only one in 20 applications will be approved, with grants announced by late spring.

In fact, as few as 3 percent may be funded, the department said in a statement to The Kansas City Star.

Still, Kansas City officials and the congressional delegation say they are pushing hard behind the scenes for the funding, an essential part of a $100 million streetcar project that would run from the River Market to Crown Center, with 12 stations, spaced every two blocks, primarily along Main Street.

Success with the feds means the streetcars potentially could be operating by spring 2015. If the city’s application is rejected, the dream doesn’t die. But it does get delayed.

“We need this funding to stay on schedule,” said Councilman Russ Johnson, the council’s point person, who has worked to rally local support for the project. Without the grant, planning will continue, but actual construction would be “on a slower time frame,” he said.

Mayor Sly James was in Washington this week and lobbied Transportation Secretary Ray LaHood for the federal funding, to be awarded under the fourth round of a grant program called TIGER (which stands for Transportation Investments Generating Economic Recovery). James said that along with LaHood, the meeting included key staffers who will help decide the grant recipients.

“Having this TIGER grant is absolutely essential to us getting this project moving,” James said. “It’s crucial to our economic development.”

James said the meeting was encouraging, but the federal officials made no promises and said the competition is even more intense this time than in previous TIGER rounds.

Under the old system of congressional earmarks, this $25 million request wouldn’t even register a blip on the radar. It’s the equivalent to money for a highway interchange. But under the new system of competitive grants, Kansas City gets in line with hundreds of cities.

Officials familiar with the process say there’s reason both for hope and for concern.

The ingredients for hope:

•  We’ve won big before.

In 2010, the Kansas City metro area received $50 million from the first TIGER grant, including $26 million for the Green Impact Zone and other urban core transportation needs. The region received one of only 51 grants out of 1,400 requests. James said he stressed to LaHood this week that that money has been well spent.

The project meets the criteria for funding.

City officials say it will promote density and economic development in a corridor that already includes 65,000 employees and 15,000 residents — 4,600 of whom live directly on the street car line. The City Council in recent weeks has rezoned the corridor to allow more transit-friendly development.

After years of fits and starts on a Kansas City rail plan, and with so many other cities already receiving funding, James says, “It’s our turn.”

The project has good political and community support.

The city’s application for federal funds is accompanied by dozens of letters from the Greater Kansas City Chamber of Commerce, Hallmark Cards, UMB and US Bank, law firms and other businesses. One letter even came from DST, downtown’s largest property owner, which has raised concerns in the past about the downtown taxes necessary for the project.

City officials also note strong support from the congressional delegation, including Sen. Claire McCaskill and Rep. Emanuel Cleaver, both Democrats with strong ties to the Obama administration, which decides the recipients.

Supporters also note that the latest grant was written with help from consultants who have been successful with TIGER grants for other cities.

“This is a great project,” Johnson said, arguing that it has the right mayor, the right consultant and the right funding mechanism.

But there are also reasons for doubt:

•  There’s less money than in previous grants.

This fourth round of TIGER grants started out with $500 million, and $120 million of that is already targeted for rural areas. Another $80 million may go for high-speed rail. So already the pie will be reduced to about $300 million.

Kansas City is seeking $25 million, and Johnson acknowledges some experts have said that could be overreaching. If the city doesn’t get that level of federal funding, it will have to re-evaluate how to fund the project.

•  Other cities with more mature streetcar plans are also in the running.

Kansas City is competing with Tempe, Ariz.; Fort Lauderdale; Milwaukee; and New Orleans, and there may be others. Milwaukee and New Orleans already have been funded in previous rounds, so they may have a head start on Kansas City for more funds. Tempe and Fort Lauderdale tried in Tiger III and are now trying again.

Kansas City’s local financing plan isn’t yet finalized, and is encountering some headwinds.

The city has proposed creating a special downtown taxing district, and hopes to impose a property tax and sales tax on businesses and residents near the streetcar line under the theory that they will benefit most.

But some businesses are resistant, and some just don’t trust City Hall.

The Downtown Council, which represents downtown businesses, did not write a letter in support of the grant.

Downtown Council President Bill Dietrich emphasized that doesn’t mean outright opposition.

“Our membership has a very diverse set of views on the streetcar project,” he said. “Some are supportive. Some have a number of concerns.”

He said he is working with city officials to resolve the concerns.

Johnson said that, no matter what happens with the grant request, the city is continuing to set up the special downtown taxing district to be ready to provide local funding for the streetcars.

The Jackson County Circuit Court will hold hearings April 17 and 18 on the district’s formation. Downtown voters are then expected to participate in two special elections this year, deciding whether to affirm the district’s creation and to approve new taxes.

If the city doesn’t get the federal grant, it would not immediately seek the new taxes.

“We’ve always said we would not do the tax election until we had the federal funding because the amount of federal funding controls what your tax levy would be,” Johnson said.

He and other city officials are also aggressively pursuing numerous other tax credit and grant programs that could reduce the local tax burden by tens of millions of dollars, although none of those funding sources are guaranteed.

Even as the city tries to get the first phase of streetcars off and running, officials are anticipating the next phase, from Crown Center to the Country Club Plaza/University of Missouri-Kansas City area.

The council has introduced a resolution to apply in April for a $2 million grant to study that second phase of transit service. If the city gets the grant, the study would be done in 2013.

Johnson said any real streetcar system would need at least that second phase.

“If we’re going to build two miles and stop, we need to stop this project right now,” he said. “We will go on. Two miles is silly. You need a system. We picked the first two miles because it was the sweetest fruit, not the only fruit.”