Tucson CitizenTucson Citizen

The streetcar is key to downtown Tucson development; so is paying for its annual operation

It’s been a Tucson pastime for nearly a decade to beat on downtown revitalization like it was an ugly piñata.

There have been many scandal sticks used to beat on downtown – squandered Rio Nuevo money, failed sweetheart city deals, interminable streetcar construction, streetcar launch delays, city-Rio Nuevo bickering, city-county bickering, parking scandals, over-budget underpasses, convention center overhaul failures, the list is endless.

But while we were wildly flailing on downtown revitalization we failed to notice that the piñata broke open and a bunch of money fell out.

Downtown Tucson Partnership CEO Michael Keith went hat-in-hand before the city council last week seeking a renewal of the city’s participation in the downtown business improvement district. The district provides security and street cleaning services and the partnership provides downtown marketing and boosterism.

His brief presentation on how downtown revitalization is going was eye opening. In the past five years, governments – the city, county, state, feds and Rio Nuevo – have spent nearly $600 million on downtown infrastructure and buildings.

That investment has resulted in about $250 million in private investment downtown – new office towers, renovated historic blocks, dozens of new restaurants – and Keith said another $100 million is expected for the coming year. Keith said there could be as much as another $1 to 2 billion of private investment downtown over the next 10 years and another $2 billion or so in the areas bordering downtown – the university area and west of I-10, primarily.

Downtown streets are now lined with some of the best restaurants in town and 40-some events and festivals draw nearly 1 million people a year downtown.

A few thousand UA students will start living downtown next year and several thousand new apartments and condominiums are either under construction or in the advanced planning stage.

As Keith put it, downtown is hot; in fact it’s one of the hottest real estate and business investment markets in the West, he said.

And the linchpin for the whole thing is the streetcar.

Yes, the much-maligned, long-delayed streetcar.

Keith says most of the private investment downtown is due almost entirely to the streetcar, which is why most of the new development is along the streetcar corridor.

Included in Keith’s presentation was an idea from the partnership’s corridor committee for a streetcar district, made up of the businesses along the route that would voluntarily contribute money to brand and market the streetcar and the streetcar corridor.

Keith hopes the city, Rio Nuevo and other governments with a vested interest in downtown’s success would throw some money in the kitty, too.

It’s not only a good idea but vital for the streetcar’s success if it and the corridor are to be treated as something unique and special to Tucson (and not just a funny-looking bus with steel wheels).

But while the partnership’s idea stops at marketing and branding, such a district  may also serve as the foundation for a more formal district that will be even more critical for the economic success of the streetcar corridor – funding the streetcar’s annual operation.

As it stands now, the streetcar will cost the city’s general fund an estimated $7 to $8 million a year to maintain and operate (how much the fare box collections will offset that is up in the air). The city can’t really afford it.

When the city council is facing tough budget decisions, it often makes penny-wise but pound-foolish decisions. If the streetcar is a drain on city coffers in tough budget times (like now), the city is almost certain to make unwise decisions, such as reducing hours of operation and raising fares.

That would jeopardize the whole point of the streetcar and put at risk the investments the private sector has made downtown specifically because of the streetcar (revitalizing downtown almost in spite of the city’s and Rio Nuevo’s failed efforts).

If businesses, property owners and developers are going to make a profit off the streetcar corridor, it only makes sense that they contribute to the streetcar’s success by relieving the city, in total or in part, the cost of its operation after fare box revenue is subtracted.

Such a district is not viable now, there are too few businesses and properties to pay a fee or tax to support the streetcar; the city and its general fund will have to tough-out a few years (about $2 million for the first year’s operation was budgeted in the streetcar’s startup costs but the manufacturing delays are quickly eating up that money).

But as downtown grows and prospers, and those expected billions pour in, a fee or taxing district to provide a few million a year to cover the streetcar’s cost will be just as vital to downtown as the streetcar is to attracting those billions.

Consider it the fare cost of doing business in the streetcar corridor.

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