CHARLOTTE – After debating the rising cost of the proposed CityLYNX Gold Line Phase 2, or streetcar project, Charlotte City Council members on Monday approved spending additional money on its development, for a revised cost of $150 million.
The council approved seeking a $75 million Federal Small Starts grant, as well as allocating an additional $12 million from city funds to increase its share to $75 million.
Republican Ed Driggs of District 7, who described himself as the “Dr. No” of the evening, raised concerns about the expenses not having been accurately calculated.
“The amount that we were originally using was $126 million and it has now gone up to $150 million, which is a 19% increase,” he said. “The actual accountability on the relationship between the benefit and the cost is lacking.”
The vote was 7-4. In addition to Driggs, council members Republican Kenny Smith of District 6 and at-large Democrats Claire Fallon and Michael Barnes voted no.
Construction on the project’s phase 1 is well underway along East Trade Street/Elizabeth Lane from Time Warner Cable Arena to Novant Presbyterian Hospital. It is expected to begin operating next year.
Phase 2 would expand the east-west project by 2 ½ miles, for a total of 4 miles from French Street near Johnson C. Smith University to Sunnyside Avenue at Hawthorne Lane just past Independence Boulevard. The CityLYNX Gold Line Phase 2 would add 11 new stops as well as replace the currently used Gomaco replica trolleys with modern streetcar vehicles.
The project was proposed as a component of the 2030 Transit Corridor System Plan that links bus and rail service in the center city. A proposed third phase would add six more miles, to the Eastland Community Transit Center on Central Avenue.
The streetcar has been a dividing issue, both for some council members as well as taxpayers due to its escalating costs, both upfront and operating expenses once it is complete.
At-large council member Vi Lyles, a Democrat who approved the CityLYNX Gold Line, said that based on the increase of development and residents off the CityLYNX Blue Line light rail in SouthEnd, she believes the Gold Line could prove beneficial as well.
“The roads, the bus line and the light rail line are owned by the city and they are used every day for transportation,” she said. “We can’t deny what we have seen on the south line.”
Danielle Mitchell, president of the student body government at Johnson C. Smith University, spoke in support of the CityLYNX Gold Line, saying the streetcar would offer transportation for students to take advantage of job, internship and networking opportunities in Charlotte.
The city’s application for the Federal Small Starts Grant was due Sept. 10, and a decision on awarding the grant is not expected until at least fall 2015.
If the federal grant is allocated, the city would begin construction in 2016 and expects it to be complete by 2019.
Last year, the city applied for but did not receive a federal Transportation Investment Generating Economic Recovery, or TIGER, grant. At the time, David McDonald, manager for the Charlotte Area Transit System’s streetcar project, said that only 30 percent of the preliminary design work had been complete, leaving too many unknowns about precise costs and construction requirements.
The estimated cost then was $126 million. In addition, in January the council authorized spending up to $12 million to pay for more design work, the preparation of a land use and economic development report, the preparation of a financial plan, an investigation into using hybrid streetcar vehicles, and the Small Starts grant application.
The city staff said at Monday’s meeting that the project’s design is now 65 percent complete, which led to more accurate estimates of costs, including the discovery that the Hawthorne Lane bridge over Independence Boulevard would need to be replaced to accommodate the streetcar.
However, the largest cost increase is due to the estimated rate of expected inflation since the previous grant application was completed, $15.3 million.
The majority of the city’s project funding will come from pay-as-you-go and debt service funds that are set aside for capital improvements from property taxes, sales taxes, interest on investments, vehicle rental taxes, vehicle license fees and the sale of city land.
The city projects operating expenses to be $6.2 million annually, of which $1.5 million would come from fares. A staff report also proposed consideration of a new tax on properties within one-fourth of a mile of the streetcar, which could generate $1.2 million; continuing to allocate $2.84 of each vehicle license fee to the project, which could generate $3.2 million annually; and such things as “naming rights” and advertising, which could generate $293,000 annually.
The staff’s report also said that a revenue source would need to be identified to cover the costs of overhauling the vehicles every five years, which it estimated would cost $14.8 million between the fifth and 20th years over operation.