Opinion: The Streetcar Doesn't Need Fixing, It Needs Money

Sep 10, 2018

The Cincinnati Bell Connector turned 2 on September 9 and opinions differ on its success. The man known as "Mr. Streetcar," John Schneider, says it has met its goals of reinvestment and repopulation downtown. Former City Councilman Kevin Flynn says the problem with that argument is it can't be proven or disproven. Both have written opinion pieces on the success of the streetcar for WVXU and will join Cincinnati Edition on Wednesday, September 12 at 1 p.m. to further discuss their viewpoints.

Read John Schneider's op-ed here

As we hit the second anniversary of the commencement of operations of the streetcar, we need to look back at how we got here and look forward to the future of the streetcar. Mark Twain, citing Benjamin Disraeli, once said: "There are lies, damn lies, and statistics." My time on Council taught me that there are lies, damn lies, and Economic Development Studies. The studies used to justify the construction of the streetcar focused on the private economic development value created in real estate near the streetcar route. The problem with this type of analysis is you cannot prove or disprove the amount of economic development due to the streetcar versus the amount of economic development due to other factors, including the tremendous influx of capital from the downtown corporations that banded together to form the Cincinnati Center City Development Corporation (3CDC), along with other public investment and public incentives for redevelopment in the urban core.

Has there been economic development because of the streetcar? Yes. Would economic development in this area have occurred without the streetcar? Yes. Has economic development happened faster because of the streetcar? Yes. Was economic development happening in this area prior to the construction of the streetcar? Yes.

Many would say, accurately, that without my "flip-flopping" and providing the sixth "yes" vote to restart construction of the streetcar, Cincinnati would not have a streetcar today and we wouldn't be worrying about operational costs. I agree. Three days after I was sworn in on Council, and we voted to pause construction, Council and Mayor John Cranley commissioned a study from KPMG as to the potential cost to the city if streetcar construction was permanently stopped. The estimated cost to the city to stop at that time was between $50 and $80 million, plus the $45 million in grants that would have to go back to the federal government. The cost of completion was estimated to be a total of $133 million. Using these numbers, the incremental cost to complete versus the high side estimate of the cost to terminate was $8 million. The answer was clear: We had to complete the streetcar so that we were not paying for nothing for the next 30 years.

What should have happened, prior to the first shovel touching the ground, was that a reasonable, vetted plan for paying for the operation of the streetcar should have been in place. This was not done. Monetary support that was promised during the public hearings, and behind the scenes, never came. Additional millions from the Federal Transit Administration (FTA) for use during the first few years of operations – which were promised to me by the FTA administrator during the debate on whether or not to restart construction of the streetcar – never came. Property owners along the streetcar route that indicated they would "tax themselves" to pay for operations never came forward. Individuals who testified by the hundreds never came forward with monetary support.

However, all is not lost. The streetcar will support its own operations through the along-the-line contributions being made by new construction along the route, the so-called VTICA plan, crafted by the mayor and me. It will take a couple of more years for this income stream to ramp up, but eventually this income will support the reasonable operation of the streetcar without additional guaranties or subsidy from federal, state or local taxes.

In the meantime, I recommend that a group of private sector leaders, streetcar proponents, and streetcar skeptics, come together to decide how the streetcar can operate at a break-even level, with real assumptions based on our experience of the first two years by cutting unnecessary expenses. The streetcar can be successful without relying on another Mark Twain truism: "All you need in this life is ignorance and confidence, and then success is sure."

Credit Courtesy Kevin Flynn

Kevin Flynn is a graduate of LaSalle High School, the University of Cincinnati, and the University of Cincinnati College of Law. Kevin is of counsel with the law firm of Griffin Fletcher & Herndon LLP and has been an adjunct professor at the University of Cincinnati, both at the College of Law for the past 26 years and the Lindner College of Business for the past three years. Flynn completed his service on Cincinnati City Council on January 2, 2018. Kevin chaired the Rules and Audit Committee and was Vice-Chair of the Law and Public Safety Committee and a member of the Budget & Finance Neighborhoods, and Transportation committees.