July 9 (Bloomberg) -- Electric streetcars may roll Detroit’s streets again after 60 years in an attempt to use mass transit to resuscitate the bankrupt auto capital.
Seventeen corporate and philanthropic donors will pay about two-thirds of $160 million to build and run a 3.3 mile (5.3 kilometer) line from downtown north to the New Center district. Groundbreaking is July 28, a 2016 opening is planned and, while streetcars won’t erase Detroit’s symbiotic relationship with the internal combustion engine, backers say they’ll enliven an area that’s attracting residents and jobs.
“A lot of people are moving here from other cities where transit is sort of taken for granted,” said Susan Mosey, a project board member and president of Midtown Detroit Inc., a non-profit promoter.
Not so in Detroit, birthplace of the U.S. auto industry and graveyard for mass-transit plans that died for lack of money and political cooperation. Of the 45 streetcar systems built or considered in U.S. cities since 2000, Detroit’s M-1 Rail is the only one begun with mostly private money rather than a local tax, said Carmine Palombo, deputy executive director for the Southeast Michigan Council of Governments.
Skeptics say a limited line won’t help most Detroiters who rely on buses for transportation. Supporters say rail will promote growth in the main business district that eventually will benefit blighted, depopulated neighborhoods.
“We get most of our business either from foot traffic or workers nearby, so if we get more foot traffic coming downtown because of this, that’s a good thing,” said Mike Boussi, owner of Woodward Coney Island in downtown Detroit.
A dozen stops are planned along Woodward Avenue, a thoroughfare that connects downtown -- home of General Motors Co. -- to two professional sports stadiums, Wayne State University, the Detroit Medical Center and Henry Ford Hospital, the Detroit Institute of Arts and the Detroit Symphony Orchestra. A new hockey arena is planned along the route.
The six-square-mile corridor amid the 139-square-mile city has 40 percent of Detroit’s jobs, according to M-1 Rail, named for the official designation of Woodward Avenue. Outside the district, neighborhoods endure poverty, crime and lack of good transportation.
In a city equal in size to Boston, San Francisco and Manhattan combined, unreliable buses have made life difficult. About one-quarter of Detroit households don’t have a vehicle, and lack of transportation makes it difficult for job seekers to work in suburbs where jobs are more plentiful.
Streetcars would be but one piece of a network, said Matt Cullen, the agency’s volunteer president and chief executive officer. A regional transit authority, authorized by the legislature in 2012, is planning a rapid bus system.
Cullen’s paid job is president of Rock Ventures, whose companies include Quicken Loans Inc. The promise of rail was one reason Quicken moved its headquarters to downtown Detroit in 2011, Cullen said in an interview.
Rock Ventures has purchased more than 60 buildings in downtown Detroit and employs about 12,000 people, Cullen said. Quicken founder Dan Gilbert co-chairs a blight-removal task force that’s raising funds to demolish thousands of vacant buildings.
To some, a streetcar conjures not a revivifying force, but the folly of the People Mover, an elevated train built in 1987 that loops 2.9 miles around downtown. It was left with lower-than-expected ridership after plans flopped for a larger, regional rail system.
Streetcars are “a terrible idea” that will benefit property owners and not low-income Detroiters who don’t live near the Woodward Avenue corridor, said George Galster, professor of urban affairs at Wayne State University.
He said there’s no guarantee that the cost of operating the streetcar won’t fall on the city, which a year ago filed the largest U.S. municipal bankruptcy, an $18 billion case.
“All the city of Detroit needs is another expensive boondoggle,” Galster said.
M-1 Rail was awarded a $25 million federal grant, and it’s asked for another $12 million. The project will proceed with or without more government money, Cullen said in a June 18 statement. The project allocates $20 million to operate the line for 10 years or until it is turned over to the regional transit authority.
“This project will give people the confidence that transit can work in our region,” Cullen said.
Detroiter Michael Adler said he travels with his car and buses, and probably won’t use the streetcar unless it’s extended, perhaps to the suburbs.
“I’m not opposed,” he said while waiting for a bus on Woodward Avenue. “It might get things really going in Midtown and downtown if they get those groups of people shuffling back and forth.”
A streetcar will spawn $3.5 billion in development over 10 years, according to an economic-impact study for M-1 Rail. Such projections are overblown and encouraged by companies that build streetcars, said Randal O’Toole, senior fellow at the Washington-based Cato Institute, and a critic of urban rail projects.
O’Toole has written that streetcars are slower, cost more and are less efficient than buses. He said in Portland, Oregon, where streetcar lines are touted as economic generators, tax subsidies to developers and a proliferation of brewpubs are what lured businesses and young people.
“I think beer has a bigger impact than streetcars,” O’Toole said in an e-mail.
Projections of a rail-propelled renaissance are overoptimistic, he said: “It’s a myth that if we have rail transit, it promotes economic activity, and if we have bus transit it doesn’t.”
Streetcars are easier for visitors to use than buses, which require knowledge of times and routes, said Megan Owens, executive director of Transportation Riders United, a Detroit advocacy group. And commuters will get accustomed to using rail instead of cars to hop to stores, restaurants and events, she said.
“It’s going to be a slow culture shift,” Owens said.
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