July 23 (Bloomberg) -- New Jersey Transit Corp.'s River Line was two years late and more than $100 million over budget when the gleaming white two-car trains began rumbling into the town of Burlington along the Delaware River in March 2004.

The delays and cost overruns are less of a concern now because the service is reviving the 328-year-old former manufacturing center, Burlington Mayor Darlene Scocca said.

Property values in Burlington, a 9,700-person town 15 miles south of Trenton, have risen 29 percent since the line opened, amid renewed interest from developers and businesses. Two new restaurants are opening near Burlington's Towne Center station.

``We cut the ribbon for the River Line Cafe last Saturday,'' Scocca said in an interview last week.

New Jersey Transit, operator of the state-run mass transit system, is touting the River Line as a stimulus for some of the state's most-depressed communities and a way to spread out development in the most densely populated U.S. state.

``What the River Line is about for us is economic development,'' said Dan Stassel, a spokesman for Newark-based New Jersey Transit.

The agency commissioned a study that predicted the 34-mile line along the Delaware will provide 18,000 jobs and boost land values in the 13 towns it serves by much as $4 billion.

No Need to Stand

Projections of economic growth hasn't quelled criticism from transit watchdogs that the line was overpriced at $1.1 billion and drained resources from a state transportation system that projects it will run out of money for new projects in June 2006.

``It's good to provide service to people in South Jersey, but not if it is taking away from improving a more important system feeding New York City that is -- at best --average,'' said Adam Birnbaum, the Helmetta, New Jersey-based operator of the Web site, TransitHell.com.

New Jersey's attorney general probed the line's costs and found in June 2004 no wrongdoing in how the project was administered. A lawsuit filed by the builders, Bechtel Group, the world's largest construction company, and rail-car maker Bombardier Inc. of Canada, seeks $133 million in compensation for cost overruns they say were the state's fault. The state has refused to pay. The suit is scheduled to go to trial next year.

The River Line remains one of the most lightly used in the state, with average weekday passenger traffic of 6,600 passengers a day in the three months ended June 30, New Jersey Transit figures show. Unlike the crowded trains leading into New York's Penn Station, River Line riders almost never have to stand.

Whitman Project

``I've never seen it where we had standing room only, but other operators tell me it has happened on the weekends,'' said Jerry Stapleton, a train operator since the service began.

The River Line was conceived in 1995 during the administration of Republican former Governor Christine Todd Whitman as a way to boost depressed cities, says Mark Remsa, director of economic development in Burlington County, where most of the line runs. Planners knew that ridership would be low for years, he said.

The line serves an area with a population of 271,000 from Trenton, the state capital, to Camden, a suburb of Philadelphia. Camden, home during World War II to a shipyard that employed tens of thousands of people, is now the poorest city in New Jersey, U.S. Census statistics show. Its crime rate is the highest of any town under 100,000 in the U.S., according to Morgan Quitno Press, a Midwestern research film. Trenton ranks fourth in the same survey.

In Burlington, where dozens of factories once churned out shoes and ladies garments, the largest businesses now are a power plant and steel pipe mill, Scocca said. Its schools qualify for special aid given only to the state's poorest districts.

Tourism

Once the River Line came, businesses began negotiating for space in Burlington's 70-acre industrial park because their employees could get to work without fighting traffic, Scocca said. More tourists started coming to the town to see its early American homes, she said.

The River Line ends at tourist attractions in Camden built by the state or financed with state-backed bond sales and tax breaks including the Tweeter concert center, the New Jersey aquarium and the retired Battleship New Jersey.

``The River Line can only serve to help Camden become the city it once was,'' said James Ciacciarelli, vice president of the New Jersey Association of Rail Passengers.

The train service is vital, said Brian McFadden, who takes the line from Camden to work in Delanco.

He was unemployed when a temporary employment agency called and told him he could work making above-ground pools in Delanco, said McFadden, who lives in a community near Camden. Car-less, McFadden needed the train to get to work. The temporary position has turned into a full-time job.

``There isn't much work around Camden, and I wouldn't have a job without the train,'' McFadden said. ``A lot of people wouldn't have jobs without it.''

To contact the reporter on this story: Andrew Pratt in Trenton, New Jersey, at apratt@bloomberg.net.

Last Updated: July 23, 2005 11:55 EDT