Streetcars: transit, economic development levers, source for discontent in local politics | Milwaukee HOP streetcar

There is a thread on Reddit criticizing plans for expansion of the Oklahoma Streetcar among other elements of the 2025 LONG RANGE TRANSIT PLAN for Central Oklahoma.  

I shook my head because most of the discussion relating to these projects complains, not unjustifiably, that the service is slow because it runs in mixed traffic.

(Interestingly, the city transit authority provides a free transit pass for people who park in city-owned parking garages.)

From the article, "Development, rather than ridership, a measure of success for Oklahoma City streetcar," Daily Oklahoman:

The Oklahoma City streetcar is one small part of a much larger plan, Scroggins said, that includes development, but also additional streetcar lines and other transit in OKC and the cities surrounding it. “The streetcar is a long-play investment," Scroggins said. "The day it was opening, Scissortail Park had just started construction. In 2020 and 2021 it was the (most used) stop.”

I make the distinction between intra-district transit and inter-district transit concerning modern streetcar projects such as Portland, Atlanta, Seattle, Cincinnati, Milwaukee, Tucson, Detroit, etc.  Speed isn't the foremost consideration for when you are moving about within a place/destination, versus getting to or from the destination.

Most people still don't see the distinction.

-- "Making the case for intra-city (vs. inter-city) transit planning," (2011)
-- "The argument that streetcars are "good enough" but "imperfect transit" is flawed," (2014)
-- "Modern streetcars are transportation projects,not merely economic development augurs: but intra-district not inter-city services," (2017)
-- "Brief follow up to intra-district transit proposal for Tysons: Toyama City Compact City initiative (Japan)," (2020)
-- "Revisiting: a proposal for heritage streetcar service on the National Mall | adding service to the DC waterfront," (2022, original 2013)
-- "Intra-neighborhood (tertiary) transit revisited because of new San Diego service," (2016)

Ten Principles for Successful Development Around Transit, Urban Land Institute.  Also see "The New Real Estate Mantra," APTA

And that looking at the speed of the trip ignores the economic development effects, which can be considerable. 

Based on my experience in DC, return on investment from transit projects done right is the fastest of various types of public investment.

For streetcars, Portland is the textbook example ("Portland streetcar: development oriented transit").  

Its original streetcar route spurred the creation of the Pearl District, with billions of dollars of development (more than $3 billion as of 2008), starting with an abandoned railyard, and provided better intra-city connections between Nob Hill, the Pearl District, Downtown, and Portland State University.

In turn the University has shifted even more towards an urban studies focus, welcoming the streetcar, financing at least one of the stops, and allowing the streetcar to travel on its campus.

As the system expands, it brings similar development energies to other areas of the city.

True, other streetcar lines haven't been nearly as successful, such as the SoDo streetcar in Seattle.  

Some has to do with the demographics of the area, like office worker heavy, or there just not being quite enough critical mass to fuel urban revitalization as a more self propelling phenomenon.  This can be accentuated by the lack of a streetcar network, or other modes of complementary rail transit.  

While it did complement massive economic development on the part of Paul Allen, the headquarters of Amazon, the fact is as a mostly business district, it didn't have much foot traffic--people are slaves to their desks, with little time to leave the office to eat or shop ("Seattle’s South Lake Union streetcar is an empty monument to money," Seattle Times).

Construction galore before the DC streetcar even opened.

DC's streetcar is the textbook example of poor planning, yet it has sparked more than $1 billion in new or planned development ("DC and streetcars #4: from the standpoint of stoking real estate development, the line is incredibly successful and it isn't even in service yet, and now that development is extending eastward past 15th Street," "Update/revision of H Street transit oriented real estate development table").  

Streetcars are an example of what economic development professionals call a priming device.

To me that's a success.  Even though there is an even more important planning lesson--if you build a short disconnected line rather than a streetcar network, it's not going to be very effective at transit.  That's the case with Seattle too.

Foolishly, DC is dumping the streetcar--it never committed to network creation--even though the streetcar serves the northern side of the campus for the new football team stadium ("Transformative $3.7 billion Commanders stadium deal passes D.C. Council," Washington Post). Very shortsighted.  You could pop a streetcar spur into the campus.

This model showed how North Potomac Yard might look redeveloped with 7.5 million square feet of new construction. The planned Metro station will connect to it.

On the other hand, in DC with the addition of infill Metrorail Stations at NoMA ("NoMA: the neighborhood transit built." Urban Land), and Potomac Yard in Alexandria ("Potomac Yard Metrorail Station Opening is Centerpiece of New Metropolitan D.C. Neighborhood," WSP, "Massive buildout proposal at Potomac Yard headed to Planning Commission," AXLNow), are a form of development-based transit that people don't criticize.  Granted such sites have the advantage of being inserted into an already successful subway network.

The first of what are proposed to be multiple streetcar lines serves Milwaukee's Downtown.

Milwaukee

After the Reddit thread, I happened to come across a couple articles about The HOP MKE streetcar in Milwaukee ("The Hop's 2018 launch was followed by several commercial developments near its route. Here's a list," "Does The Hop boost downtown Milwaukee property values to help fund city services? What to know," Milwaukee Journal-Sentinel), how after sponsorships and other funds, the city has to "subsidize" the service by $4 million per year.  

One Alderman thinks the money would be better spent on the impoverished.  From the second article:

The Hop is back in the news with Alderman Scott Spiker's call for shutting down the city-operated streetcar. Spiker says The Hop is costing Milwaukee taxpayers around $4 million annually. That could be better used to help pay for street repairs, libraries, public safety and other services, he says.

Streetcar at night outside the Milwaukee Public Market.

The Hop's defenders include Common Council members Robert Bauman and Peter Burgelis. They say its benefits include a boost for downtown property values − with that property tax revenue helping fund city services.

... Spiker says The Hop is an "albatross" around the city's neck and provides transportation "for the unhoused and well-heeled."  

Talk about a concern for equity.  Anyway, transportation demand management is a reason why many cities like Pittsburgh, Salt Lake, and Calgary, provide free transit within the Downtown core. 

While I understand the principles of equity planning as well as anyone, the fact is to fund social services you need positive tax revenue streams.  The Milwaukee streetcar has spurred close to $1 billion in development in the 7 years since the service started.

It's not easy to figure out the commercial property tax assessment in Milwaukee, but I calculate up to $37 million in new tax revenues annually from $1.7 billion in development.  I expect it's higher.  (I tried to contact the City Assessor office to figure this out, but they didn't return my calls.)

To me that is an easy calculation that it's worth it to "subsidize" the streetcar as it generates far more annual property tax revenue alone (+ sales + personal and corporate income taxes) than the cost of running the service.

I don't understand why such a basic calculation isn't top of mind for the streetcar haters.

New real estate development within a couple blocks of The Hop streetcar line in Downtown Milwaukee.  Some is new construction.  Some is the rehabilitation and adaptation of existing building stock. 

Building	Address	units/s.f.	Value*
Coutour** | residential/office	909 E. Michigan Street	322 | 42.6sf	$191MM
333 Water Street | residential	333 N. Water Street	333	$165MM
Ascent | residential	700 N. Kilbourne Avenue	259	$80MM
Nova Apartments	1237 N. Van Buren Street	251	$35MM
The Huron Building | office	511 N. Broadway	163,000 sf	$50MM
BMO Tower | office	1790 N. Water Street	383,000 sf	$137MM
Streetcar Flats | residential	828 N. Broadway	75	$12MM
Milwaukee Athletic Club | mixed + apts.	758 N. Broadway	54	$64MM
Drury Plaza Hotel	700 N. Water Place	227 rooms	$25MM
Kinn MKE Guesthouse | hotel	600 N. Broadway	32 rooms	$60MM
Central Distillery & Kitchen | restaurant	320 E. Clybourn Street		N/A
Hilton/Holiday Inn Hotels	515-525 N. Jefferson Street	331 rooms	$37MM***
321 Jefferson | residential	321 N. Jefferson Street	60	$15.6MM
TOTAL			$871.6MM

* = the value of the project is based on published figures and may not include certain development costs such as the cost of land

** the building has a ground flor streetcar and bus concourse 

*** estimate

______________________

While this quick table shows $871 million in new development, other sources quote double that amount (MKE Streetcar: Development and Investment Guide).

Sadly, expansion is being delayed because of the Trump Administration and funding strictures imposed by the Republican State Legislature ("Future of Milwaukee streetcar clouded by limited funding and operations challenges," Wisconsin Public Radio).

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Federal mass transit funding in the 1960s not enough, but could have been a model for creating streetcar networks in the 2000s.  

The Urban Mass Transportation Act of 1964 created a process that ended up creating the forerunner of the Federal Transit Administration.

It funded:

• some modern subway systems, Atlanta, Baltimore (late to the process, it only built one line), BART in SF, Miami, and Washington DC
• some light rail in Buffalo and Minneapolis
• a bunch of improvement projects at existing systems 
• People Mover projects in Detroit and Miami (" A Brief History of UMTA's Downtown People Mover Program")

As the willingness to deal with "the urban problem" waned ("The American Dream and the Urban Crisis," Black Perspectives), so did funding.

In my work in DC and Baltimore, I came to the realization that the biggest difference in transit impact between the two metropolitan areas is that DC has a six line subway network, while Baltimore has two disconnected lines, one subway, one light rail (+ the continued relevance of Downtown DC as an employment center).

Two cars of the 'people mover' public rail are seen covered with a advertisement for the 2014 Chevy Silverado pickup truck as they move past General Motors World Headquarters in Detroit, Michigan January 11, 2013. Reuters/Rebecca Cook

The network produces the most value.

It's unfortunate that the "industry," FTA etc., didn't see modern streetcars as an opportunity to provide a systems thinking/UMTA approach, and focused on funding streetcars as an urban network.  

Taking People Movers a step further to streetcar networks on the ground, rather than loop rail systems "in the air."

In transit advocacy circles, "everyone" seems to think everything should be a light rail or subway.  I got in an argument on a Reddit list a couple years ago when someone argued that the Richmond Virginia Pulse BRT, which has 7,000 daily riders, "should be light rail!"  WTF?  

Streetcars are the right sized transit mode for cities of certain sizes and conditions, and can be complementary to other fixed transit modes in larger cities, using North American cities Philadelphia, Toronto, and San Francisco as models--those cities have city specific subways, streetcars (Philly has one that goes to the suburbs), and commuter rail as well.

Toronto's King Street streetcar has over 50,000 daily riders.

So far, Portland is really the only city that is building a streetcar network serving the city proper, complementary to a city- and metro-focused light rail system.  

Originally the line was only on the west side (left side of the graphic).  Since it has been extended to East Portland, and further extensions are planned.  Kansas City just opened an extension and OKC plans extensions as well.

DC's streetcar has "failed" transit-wise despite it being an overwhelming success economically because they didn't build a network of lines, even though that was the original plan.  

And seeing the economic development effect on H Street NE, which is near but not quite close enough to the subway makes very clear that other parts of the city--Georgia Avenue NW, Kennedy Street-Riggs Road, East of the River, east from Minnesota Avenue Metrorail station, Rhode Island Avenue--could have had seen significant economic boosts from streetcars.

Conclusion.  The value of high quality intra-district transit should not be downplayed.  Especially given the economic development effects. 

 A better argument needs to be made about streetcars and the new tax revenue streams resulting from the development--property, sales, personal and corporate income taxes--and how this more than covers annual operating costs.

Streetcars are especially good at boosting places that are already experiencing some revitalization success.

To be even more effective, streetcar service should be expanded from a line to a network.  For streetcars, probably polycentric design makes the most sense, because it functions monocentrically at the core of a city.

From the HNTB article, "Planning vibrant, sustainable transit-oriented developments":

1. Plan all aspects of development [no trickle down]
2. Solicit partnerships from all sides.
3. Build housing for all [Minneapolis and Phoenix have been good about supporting the development of affordable housing in association with the development of their light rail systems; earlier systems relied on developer-driven development which usually was market rate]
4. Promote equitable development.
5. Value capture to invest in transit [in DC, private sector actors offered to manage and expand the streetcar system, but DC ignored their proposal]
6. Think beyond fixed rail.