Nicollet-Central Streetcar

[woofner]

The "value capture" being described in this thread is still TIF. That's what TIF does. It "captures" an expected increase in property Tax "value" and in most cases directs that increase or Increment towards the Financing of the project/district itself. Rarely is TIF used to pay for something other than the actual development from which the increased taxes are generated.

Really well said, twincitizen. In other words, Value Capture in this case is more or less a meaningless branding of TIF, particularly because these parcels were clearly going to have an increment due to the significant improvements on them regardless of whether a streetcar is built.

Perhaps this is continuing to delve further off topic, but in the typical TIF that we see, does the city actually take out financing or bond for the project and then collect the taxes towards that financing, or is there just no tax collected and it is assumed that the money is going towards debt service?

I would say that the former is more common (specifically the city bonds for infrastructural improvements related to the project, rather than the project itself), which is why this action is even more akin to TIF than Value Capture.

Personally I think that while grabbing the increment from entirely unrelated developments is a shady practice, it's better than grabbing it from the entire length of the line in terms of tying up general fund revenue. Not sure why parking meter revenue is no longer in play though.

[MNdible]

I would imagine in most cases bonds are sold, because construction has to be paid for now. The increase in tax revenue then pays off those bonds over a set time frame, rather than going into the general fund. In theory. Sometimes it doesn't work and the property doesn't generate enough tax revenue to pay off the bonds. Sometimes the TIF district pays off the bonds early or is able to direct additional revenue to something else.

This used to be the case, but now the majority of TIFs are Pay-As-You-Go, explained succinctly here.

EDIT: To be clear, they obviously they would be bonding for this project.

[MNdible]

I think those of us saying this isn't "true" value capture are critical of TIF in general. TIF would be actual value capture if it was able to quantify the value created by infrastructure/investment and use that to pay for the investment. Such as if we could quantify how much value was added to the entire corridor by the presence of a streetcar, versus the alternative of not having a streetcar, and that marginal value was used to fund the streetcar. It's sort of the Strong Towns approach (I'm sure MNdible will love to hear that).

Anyways, I'd love to see TIF narrowed to only the marginal value of a project, not the value of land adjacent to a project (or especially not four developments that are already under construction regardless of if Nicollet ever sees a streetcar).

In theory, this all sounds good. In practice, obviously, it's a real mess trying to figure it out.

I guess it comes down to, "Do you think building this streetcar sooner rather than later is good?" I'm a bit ambivalent about it myself. But, if you want the thing to get built, this was the mechanism that the city could get through the legislature that would allow it to generate a revenue stream to pay off the bonds to fund the local share. It's a bit unorthodox, but it's certainly not corrupt or illegal or anything. And it's not going to hurt anybody, or ruin the city's perfectly logical and rational and Strong Towns way of paying for city services (because that's always been messed up and always will be, no matter how many Strong Towns blog posts you link to).

[alleycat]

The question is would the state allow a city income tax? No. Would they allow for a dedicated sales tax? Probably, but does Minneapolis want an even higher sales tax than it already has? No. Can they use general funds for the local contribution to the project? That would not be seen as a dedicated revenue stream and therefore they would not get Tiger grant or whatever they're going to get from the FTA. So, no. In the end they need a revenue stream that was allowable by state and showed a dedicated revenue stream for the feds.

[lordmoke]

Passed through both committees today unanimously, save for an abstention by Tuthill:
http://www.journalmpls.com/news/news/tw ... nding-tool

[mulad]

Ah, a dedicated funding stream for the feds to look at. I suppose that's the kicker.

I tend to just think of government money as a huge pot, though arbitrary divisions have been built into it. In some ways I think it's pretty silly (if we want it, just pay for it) though they do make sense to a large extent -- you want to enforce some budgetary limits to prevent spending from spinning out of control on certain programs, and to avoid "sequester"-like arbitrary across-the-board cuts. But arbitrary cuts do happen from time to time, and sometimes improper cost or income estimates have led to certain things getting way too much or way too little money. Done well, they can also provide a decent thing to measure to say whether a project was successful or not -- but if one parcel in the value capture district fails to live up to expectations, is that really a problem? (Especially if the parcel next door were to be fully developed, for instance?)

[orangevening]

Seattle is in the same boat (although they are now much more gung-ho about rail than we are).

Sorry I've VERY late to the party here (just found this site website yesterday-shame on me).

Just had to comment here because I lived in Seattle for 4+ yrs and was there when they opened their first LRT line in 2009 (I believe) and streetcar line (the infamous "SLUT" line). Sounder (commuter rail) has been up for awhile(10+ yrs). Although Seattle started late with Light Rail they have lapped Mpls/St.Paul and then some. Voters approved a transit tax-something that is DISPARATELY needed here (I wish we have referendums like they do there). Building LRT is a lot more expensive because of the need to tunnel though the hills there. But they have built a tunnel to the university district from downtown for LTR and expanding it north and east (over lake Washington) into the suburbs. With part of the line though Capital Hill to the University they had to scrap a proposed First Hill station and instead are building a streetcar line to connect First Hill to Downtown and Capital Hill -akin to our SW line not going down the midtown greenway/Nicolett [sic] route and building a streetcar through the greenway as proposed.

Just wanted to point out how much a dedicated funding makes a difference. Mpls/St.Paul needs to get on ball with transit, but of course I preaching to the choir...

[alleycat]

Just wanted to point out how much a dedicated funding makes a difference. Mpls/St.Paul needs to get on ball with transit, but of course I preaching to the choir...

There is a dedicated quarter-center sales tax in the five (may have been expanded to all seven) county area. It simply isn't large enough to build the system out in a timely manner. Second it can't be used for streetcar from what I can tell. I'm not sure if that really is the case or the CTIB simply is not funding those types of projects out of metropolitan equity?

[woofner]

Are you guys sure that a dedicated funding stream is a requirement of Small Starts? It sure isn't for New Starts, and I don't know why a line item on a state bonding bill should be viewed any differently than a line item on a municipal CIP. The Loyola streetcar in New Orleans seems to have been built with general fund dollars as a local match, though that was a comparatively smaller project, and New Orleans isn't generally a great model for municipal governance.

It seems more likely that the Mayor and Council, being good liberals, don't want to have to push any other projects down the priorities list in favor of this one (Nick's CIP map shows the multitude of competitors). Still, it seems ironic that the same council cycle that is approving the region's first (AFAIK) policy that explicitly connects personal transportation to climate change and directly calls for a reduction in VMT is also passing this weird awkward funding method rather than dedicating an increase in meter fees, which would also work towards VMT reduction. But that might hurt someone's feelings and anyway pretending we can have our cake and eat it too is also more or less a DFL plank.

There is a dedicated quarter-center sales tax in the five (may have been expanded to all seven) county area. It simply isn't large enough to build the system out in a timely manner. Second it can't be used for streetcar from what I can tell. I'm not sure if that really is the case or the CTIB simply is not funding those types of projects out of metropolitan equity?

The original enabling legislation for CTIB restricted their activities to projects that primarily involved dedicated ROW. I think that the transit for the 21st century bill was going to remove that restriction, so I'm assuming it failed to pass along with the rest of the bill, but I'm not sure.

This used to be the case, but now the majority of TIFs are Pay-As-You-Go, explained succinctly here.

Well, the majority of new TIF is PAYGO, but I believe that its use is much less popular than traditional TIF was in the 80s & 90s, so probably the majority of active TIF districts are traditional TIF. I'm assuming this is either because PAYGO puts more onus on the developer or because it was authorized around the time of the last recession. I guess we'll see in this next corporate building boom that seems to be around the corner.

[MNdible]

Well, the majority of new TIF is PAYGO, but I believe that its use is much less popular than traditional TIF was in the 80s & 90s, so probably the majority of active TIF districts are traditional TIF.

This is likely true, although the old TIF districts tended to be huge multi-block affairs including a number of individual projects. The pay-as-you-go districts tend to be project by project, and often haven't attracted much attention.

[FISHMANPET]

So here's a Minnpost article explaining the TIF/Value Capture a bit.
http://www.minnpost.com/cityscape/2013/ ... e-district

One thing it mentions that I hadn't considered is that with the value capture the full value of growth goes to the city, whereas if they just left it alone some of the increase would also go to Hennepin County.

To finance the $220 million needed for the initial 4-mile streetcar line, the city lobbied the Legislature — and won from it — the right to create a special district where property tax revenues from new development would go to the streetcar project (and not to the maws of its own general fund, Hennepin County and/or the school board).

[mattaudio]

Why did I bother looking at the comments? Why did I bother looking at the comments? Why did I bother looking at the comments?

http://www.startribune.com/local/blogs/213157801.html

[Didier]

I enjoyed this one:

Hey look, another official is spending your money on something YOU won't likely use.

34 likes, 3 dislikes

It's NOT your money, it's the money generated from the 5 projects (and others) listed above!

10 likes, 23 dislikes

[blobs]

Never read the Strib comments!! It's a losing proposition. LOL!

[mister.shoes]

I actually went in there more than once, hoping that someone rational would show up. Then I realized that someone rational knows better than to go into the STrib comments section.

[RailBaronYarr]

Hot damn, it's like an addiction, I cannot stop myself from reading the comments. I am 90% resistant to replying, however.

[mister.shoes]

It is! I agree. I can tell how bad I have it when I wander through the lunchroom at work, pause at a dead-tree copy of the STrib sitting on one of the tables, and wonder what the comments section on a particular article is like. Then I shudder, drop the paper, and hustle off to wherever I'm supposed to be.

But despite my self-torture of reading the comments, fortunately I've been 100% resistant to replying.

[Didier]

I am a believer that the tone of comments is generally dominated by whichever party takes control first. There are several stories in which the rationals make the first several comments and the irrationals never make much of a dent. But in threads like this where the first five or six comments are all tea-party-in-a-tin-hat negative, hope is largely lost for the next several pages.

[twincitizen]

Lileks interviews Dave Van Hattum of Transit for Livable Communities on streetcars, with a little bit of general transit talk.

http://www.startribune.com/video/213348 ... eo/1/hpmfv

[woofner]

So I guess this story is a month old, so sorry if you guys already know this, but I just saw it when I picked up Downtown The Journal's current issue with the Portland Streetcar on the cover. In it Peter Wagenius spills some beans about the streetcar that the City has officially decided to pay for but not yet officially decided to build:

-The predetermined outcome of the $900,000 time-wasting AA process will be revealed to the public in August.
-But for some reason construction wouldn't begin until 2016 or 2017!?! What is up with that delay? It seems like some of the TIGER grantees, in particular Dallas and New Orleans, pretty much dreamed up their lines on the same day the application is due. Why the fuck would it take 4 years to engineer a 3.2 mile line with no exclusive guideway?
-He's quoted as saying that the line is estimated to cost $200-225m! The way it's written he seems to be referring to the initial 3.2 mile segment, which would be remarkably expensive, as much or more per mile as any LRT line built here depending on how much inflation is in that number. But if he's referring to the full 9.2 mile segment, the cost per mile would be remarkably lower than any streetcar ever built in the country.

Look I think streetcars are great, and I don't doubt that "rail bias is a fact" as Wagenius says, but I can't believe it will have a 20x impact on ridership, and it would sure need to to make up for the fact that it will take 10 years longer to build. How can anyone look at these numbers and still think streetcar is a better idea than enhanced bus?