Value Capture: Financing sustainable transportation

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Portions of the North/Clybourn Red Line station were completely rebuilt using funds contributed by Apple in an example of joint development – a value capture financing tool. Photo by Kevin Zolkiewicz.

Ed. note: Jason Saavedra was a fellow student at the University of Illinois at Chicago College of Urban Planning and Public Affairs. He is now a planning, policy and communications consultant and writes for a blog called the Terre Haute Project in Terre Haute, Indiana. -Steven

As a nation, we are not investing enough money in our transportation infrastructure. We pay for transit, sidewalks, roads, and trails using a set per-gallon fuel tax – an unsustainable revenue source (see note 1) – and the recently proposed MAP-21 surface transportation bill does not propose any new fees or tax increases to ensure that federal money will be available to pay the cost of maintaining our transportation system.

The unsustainable nature of our current transportation funding system is not really news,  and Grid Chicago readers are particularly well-informed: we discussed the shortfalls of “traditional” transportation funding in a recent series of posts. But what may be news to you is that forward-thinking local communities are choosing to go the DIY route: they are looking for innovative ways to pay for needed infrastructure investment themselves.

This is where Value Capture (VC) comes into play. Continue reading Value Capture: Financing sustainable transportation

Englewood Flyover broke ground today – will save 7,500 hours of Metra delays annually

Updated October 11, 2011, to add link to Transportation Secretary LaHood’s blog.

Photo by ABC7 reported Charles Thomas, taken this morning. In this photo are Mayor Rahm Emanuel, Gabe Klein, and Governor Pat Quinn. 

I woke up this morning and saw Gabe Klein tweeting about a groundbreaking ceremony for CREATE P1 (known as the Englewood Flyover), one of the nation’s most important projects (actually a group of 67 projects). It separates freight from passenger rail traffic, and upgrades facilities for smoother and faster switching and travel. The Englewood Flyover will elevate Metra Rock Island District trains (north-south) over Norfolk Southern and Amtrak trains (east-west) in the Englewood and Grand Crossing neighborhoods.

According to the project description on the CREATE website“Metra riders experience more than 7,500 annual passenger hours of delay” – this will be eliminated.

The bridge will be built big enough to carry three tracks (where there are two now) over five tracks (where there are three now). The bridge will begin at about 5700 S LaSalle Street and end at about 6900 S Princeton Avenue. Recovery/stimulus money will pick up most of the construction tab:

The $133 million for the Englewood Flyover includes $126 million in federal funding leveraged through $6.6 million from Governor Quinn’s six-year, $31 billion Illinois Jobs Now!, the largest capital program in state history. A consortium of railroads involved in the CREATE program earlier contributed $3 million toward design costs. (Decatur Tribune)

Illinois Jobs Now! is the capital expenditure plan from Governor Quinn that was signed in 2009 and supported by bonds (debt), and fee and tax increases. The event was also an opportunity to promote President Obama’s American Jobs Act, as Transportation secretary Ray LaHood attended alongside Representative Dan Lipinski and other “politicos”.

Ray, on his Fast Lane blog, wrote more about the impact on jobs:

 A strict “Buy America” requirement ensures U.S. manufacturers and workers receive the maximum economic benefits from this federal investment.  This means that the Englewood flyover project will create nearly 1,500 jobs.

View Englewood Flyover in a larger map

Switching priorities: Giving $27 billion to national transit instead of roads

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A Metra train passes over a congested highway in Chicago. 

Congress is “debating” (it doesn’t always seem like a debate but a shouting match full of poorly chosen words) President Obama’s American Jobs Act right now; the latest news is that the Senate has rewritten the bill to add a new 5% tax on income above $1 million. The bill also includes allocations and competitive grant funding for capital* infrastructure projects, for Amtrak, transit, and road (which would include a tiny bit for bicycle and pedestrian projects) and bridge repair and other types. Read the Act.

Infrastructurist has an idea on how that money could be distributed differently:

Take Obama’s latest proposed jobs bill, which includes $27 billion for immediate spending on highways and bridges, and around $9 billion for rail. Clearly, that’s a huge tilt. What about changing that ratio of fund distribution, on the basis that nearly every large city is currently working to introduce transit? In other words, what if we gave $27 billion to transit, and $9 billion to roads?

It’s already been shown that bike lanes and transit projects provide more jobs for the dollar than road building.

Bicycling infrastructure creates the most jobs for a given level of spending: For each $1 million, the cycling projects in this study create a total of 11.4 jobs within the state where the project is located.

…road-only projects create the least, with a total of 7.8 jobs per $1 million. (Reuters)

We’re for giving transit the funding priority.

*In some cases the bill allows for 10% of the money received to be used for operating expenses.