Streetcars work in Portland, but viability here uncertain

February 25, 2008

If the introduction of modern streetcars to one West Coast city could be replicated here, Indianapolis would see new, higher-density housing and related retail and restaurants shadowing the line. Fallow areas crossed by the tracks would become fertile for new investment.

At least that was the case in Portland, Ore., a city mesmerizing to Indianapolis civic leaders, who last month formed Downtown Indianapolis Streetcar Corp.

They risk being run out of town on a rail: A streetcar line will cost at least tens of millions of dollars amid city fiscal woes and the current property tax outrage.

Yet the economic development potential--and the practical value of being able to better move people in one of the nation's leading convention and sporting event cities--is an intoxicating risk.

Portland's streetcars have forged a "linear" community--one with housing, shops, dining and places to work all up and down the line, said Bose McKinney & Evans attorney Steve DeVoe.

DeVoe, also president of Streetcar Corp., has been busy riding Portland's rails and consulting with officials in the city of 600,000. In 2001, Portland was the first U.S. city to introduce a modern streetcar line. "Portland," Devoe said, "has a whole new lifestyle."

Indianapolis developers could be forgiven for being cynical.

They still remember the early 1990s "trolley" that was a thinly disguised bus. It was to circulate visitors to new attractions and woo office workers on the periphery to come down for lunch. It didn't last.

But the "permanence" of rail may be another thing.

"A downtown transit system getting people around can induce development," said Michael Wells, president of REI Real Estate Services, whose projects include a 34-story, 1,000-room J.W. Marriott hotel near West and Washington streets.

"You'd want to be adjacent to [a streetcar line] if you could."

Back to future

The proposal to return streetcars to Indianapolis seemed to come out of nowhere this month. Despite the ill timing, this group can't be dismissed out of hand, with board members ranging from Greater Indianapolis Chamber of Commerce President Roland Dorson to Indianapolis Convention and Visitors Association CEO Bob Bedell. Add to that representation from most of the big, downtown-area institutions, from museums to the Indianapolis Zoo to IUPUI.

Yet, according to one insider, the idea of a streetcar system has been quietly simmering since the final days of former Mayor Steve Goldsmith's administration in the 1990s. Since then, cities such as Portland; Kenosha, Wis.; Little Rock, Ark.; Memphis, Tenn.; and Tampa, Fla. have moved ahead with the nostalgic transit vehicles.

In Indianapolis, streetcars haven't run since the 1950s. The popularity of the automobile and exodus of workers to the suburbs was the final blow.

But decades later, downtown has rebounded. Streetcar Corp. board member and zoo President Michael Crowther sees streetcars as a way to maximize the downtown area's assets and to improve the environment and livability of the city.

"Indianapolis, I once said, if you put a fence around it and put it in Florida, you could charge $60 a head and call it 'Indy World,'" Crowther said.

"We have a huge number of assets, but we need to package them better," said the former head of the New Jersey State Aquarium.

Portland officials say that city's 8-mile streetcar system maximized assets and then some.

The Portland model

Since a streetcar route was chosen in 1997, more than $2.3 billion has been invested within two blocks of the tracks, according to that city's office of transportation and Portland Streetcar Inc. The latter is a not-for-profit group responsible for constructing and operating the system.

The investment includes more than 7,200 housing units and 4.6 million square feet of office, retail, institutional and hotel construction.

Before 1997, buildings in Portland's central business district were built to less than half of allowable density--growing to an average of 90 percent since then, according to a study by Vancouver, Wash.-based E.D. Hovee & Co.

Also, about 55 percent of all development in the business district occurred within one block of the streetcar route after 1997--versus 19 percent prior.

"The streetcar investment has become the centerpiece of a significant shift in the density and location of new development within Portland's central business district," the city report said.

In particular, there was a frenzy of condominium developments in Portland's River District/Pearl District, previously an old rail yard. Developers made the nearby streetcar line a key part of their marketing.

"We never anticipated such fast development," said Kay Dannen, of Portland Streetcar.

Part of that build-out was the result of the nation's housing boom--now bust. But Portland officials also credit risk-sharing agreements to entice developers. For example, Portland struck a deal with the developer who owned a 40-acre brownfield site in the River District. The city agreed not to ratchet up its minimum required densities until it made public improvements, such as parks, in the area.

"The city's obligation has been to provide a stable source of funding to build public improvements. The developers' obligation has been to contribute to the infrastructure costs and commit to build high-density, mixed-income housing meeting the city's housing targets," the city report said.

Keep it simple

Public-private partnerships aren't something Indianapolis needs lessons on, having earned a national reputation for partnerships resulting in such triumphs as Circle Centre mall.

But one thing DeVoe found particularly instructive from Portland was advice to keep ambitions simple. Portland's first phase, at a cost of $55 million, ran less than five miles.

Most other cities that added systems--such as Kenosha, Wisc., and Little Rock, Ark.--have started in the two- to four-mile range.

The city needs to think of the streetcar as a "downtown circulator"--nothing more, nothing less--one that moves small numbers of people on a continuous basis throughout the day, DeVoe stresses.

The same goes for budgets. If an architect and builder can't meet the budget then "fire them ... . You cannot let this thing get carried away," DeVoe was told.

"Keep it simple means keep the costs down," Dannen said.

Portland didn't have to dig very deep or relocate many utilities. In a trench less than 1 foot deep, contractors dropped in a long, 9-inch-tall basket weave of reinforcing rods--with streetcar rails attached. They poured in concrete and leveled it with the street.

Contractors worked in an 8-foot-wide area, minimizing traffic disruption.

"We did three blocks in three weeks," Dannen said.

Portland also resisted the temptation to fabricate pieces of rolling art that beckon the streetcars of old. If anything, the cars made by Skoda-Inekon, in the Czech Republic, evoke images of riders in babushkas.

But Portland's cars are modern--with air-conditioning and accommodations for the handicapped. They're powered by a single wire hung overhead that can be disguised as a fancy streetlamp, DeVoe said.

Steep grade ahead

The infrastructure may be relatively simple, but it won't be easy to decide where to run the line and how to pay for it.

So far, the not-for-profit Streetcar Corp. has only a general idea of a route. Most agree it would almost certainly run to the west of downtown, to or near key destinations such as IUPUI, the zoo, White River State Park, Indiana State Museum and Eiteljorg Museum of American Indians and Western Art, for example.

Roger Schmenner, IUPUI's chief of staff to the chancellor, said a streetcar could also be of value to visitors and patients to hospitals on campus.

And what of other areas--such as to the former Market Square arena site, where high-rise condo proposals have repeatedly withered?

DeVoe would like to launch public meetings as to a possible route, although first the group wants to huddle with planners to see how a streetcar system would fit with longer-range plans for the city. Among considerations is how a streetcar system might be integrated with a proposed light rail or monorail-type system between downtown and Fishers.

Schmenner said it's worth exploring whether streetcars could even connect with the existing People Mover that runs between Methodist Hospital and hospitals at IUPUI.

Financing may be more challenging.

The cost of Portland's starter system--plus subsequent extensions that brought it to 8 miles--totaled $88.7 million.

The biggest chunk--$27 million, came from issuing bonds backed by revenue from a 20-cent-per-hour rate increase in city-owned parking garages.

Another $20 million came from tax increment financing, with $15 million generated by raising property taxes in a "streetcar local-improvement district." The theory behind it was to target those who stand to reap the biggest benefit from the system.

And then there's the matter of paying for operating costs.

All transit systems require public subsidy, with fares generally accounting for less than 20 percent of operating income--even in Portland, where standard fare is $1.75 a day. There, about 60 percent, or $2.4 million, of streetcar operating revenue comes from TriMet--a regional transportation district that gets most of its income from taxes and grants.

The payoff?

But if you build it, will they ride?

It's a particularly difficult case to make in Indianapolis. The city's mass-transit system, IndyGo buses, is about as popular as a picnic at Chernobyl. And IndyGo's efforts with a downtown circulator have met with mixed success, with one discontinued last month after a federal operating grant expired.

Dannen contends that streetcars have a universal appeal, with their manageable size, large windows and nostalgic feel. "We had projected 3,500 riders a day when we opened. We're now at 11,000 per day."

Streetcars, agrees Crowther, are not viewed as utilitarian devices, a "necessary evil" to be tolerated. "People smile just getting on them."

Better linking cultural amenities would, like the cultural trail being built downtown, further improve quality of life, said Brian Payne, president of Central Indiana Community Foundation.

Quality of life--and the economy, Crowther says.

Five years ago, only 15 percent of visitors to the Indianapolis Zoo came from outside the metro area. Now, more than 20 percent of the zoo's 1.2 million visitors originate from outside of the state.

What if those 50,000 visitors, instead of visiting the zoo and getting back on the interstate, boarded a streetcar and went downtown to visit other attractions in the downtown area? Crowther asks.

There is sufficient evidence that rail can spur economic development, said Lee Alig, chairman of Mansur Real Estate Services. "The models are there, there's no question about it. The question is, can we as a community see the need for this?"

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