Former Grand Rapids Mayor John Logie, left, and Peter Varga, executive director of The Rapid, have high hopes for a proposed streetcar system in downtown Grand Rapids.

Streetcar System Seen As Economic Booster
Anne Bond Emrich

GRAND RAPIDS — Peter Varga, executive director of The Rapid, has a vision of an all-electric, zero-emission transit system for Grand Rapids. He believes a streetcar system downtown would be one of the first steps toward bringing that vision to fruition. 

“That’s the future. We’ve got to change the paradigm of one person to one car,” Varga told a group of city and business leaders at a Press Club luncheon Wednesday.    

Results of the current streetcar feasibility are expected in late May. The report will identify the cost of a 1.6-mile streetcar alignment along Monroe and Market avenues from the Sixth Street Bridge on Newberry Street to Rapid Central Station. The study also will identify the economic benefits of a streetcar system and the return on investment it would generate. 

The Public Transportation Tomorrow Taskforce selected the Monroe-Market route for a feasibility study based on its economic development potential, its connection to major existing venues, plus preliminary construction estimates and operational considerations, such as street grade and vehicle maneuverability.

The estimated cost for the first segment of a streetcar system, in 2008 dollars, is anywhere from $64 million to $80 million, which includes tracks, purchase of streetcars and any utility issues that might be involved, according to Jim Fetzer, director of development for The Rapid.

Construction of the first segment would be funded under a public/private process. Varga said The Rapid is not seeking federal funds because under the federal New Starts program The Rapid cannot compete effectively against cities that are vying for those funds to build streetcar systems that go long distances.

“There’s no capacity to get the federal investment like we did for our bus rapid transit project, so we’re looking for some private capital, essentially with some public cooperation,” he said. 

Many cities are building or operating streetcar systems, including Tucson, Tampa, New Orleans, Philadelphia, San Francisco, Dallas, Little Rock, Ark., and Portland. Data compiled by the American Public Transit Association and the Community Streetcar Association indicates that streetcars generally provide 10 to 20 times their initial construction cost in private investment on or near the streetcar alignment.

Portland, for instance, opened an initial 2.4-mile streetcar line in 2001 for a cost of $56.9 million. Three extensions have since added 1.6 miles to the system. According to Portland city officials, by 2005 more than $2.39 billion in private investment had occurred within a two-block radius of the streetcar route, with construction of 7,248 new housing units and 4.6 million square feet of office, institutional, retail and hotel space. Portland’s return on investment was 1,900 percent, which computes to a 40-to-1 return on investment, Varga pointed out.

All streetcar projects in the United States have a return on investment, Varga noted. In an overly developed area there’s a smaller return because the system supports existing development that’s already robust, he explained. But a streetcar system in an area that has a highly developed portion along with an underdeveloped portion has a bigger return on investment. Portland’s streetcar system, for example, was developed in an area where there was a lot of vacant land and an abandoned rail yard.

“The question is, are you building it to support what’s there or are you building it to stimulate redevelopment in the urban core? The answer for us is that we want to do both,” Varga said. 

Attorney John Logie, former mayor of Grand Rapids, was among the group of local delegates that visited Portland last year to check out the city’s streetcar system firsthand and bear witness to the development it has spurred. 

“What we saw there was extraordinary,” Logie said. “What we saw in Portland was that most of the development was right next to the route, but for four blocks — with decreasing intensity on either side — there is new development. That development would not have happened without the streetcar.”

Varga told the Business Journal that his address was not in response to negative guest editorials that have appeared in the Grand Rapids Press criticizing not only the cost of the study but the proposed streetcar project in general. If a streetcar feasibility study wasn’t worthwhile, the Federal Transit Administration would not have earmarked $480,000 in its fiscal 2009 budget to support The Rapid’s pursuit of it, he said. He believes the editorials reflect a misunderstanding of the project and how it would be funded.

“We’re not going to be taxing you to build this. We are asking for private contributions,” Varga remarked. “Since the feasibility report is not scheduled to be completed until May, it’s a little premature to be discussing the issues of why we should or shouldn’t be doing it.” BJX