Clang! Clang! The trolley — and streetcar — are coming to provide a boost to Midwest cities

A rendering of the Kansas City Streetcar in action.

A rendering of the Kansas City Streetcar in action.

by Dan Rafter

Husch Blackwell attorneys Doug Stone and David Richardson have learned a lot about streetcars and trolleys. They can tell you why a streetcar isn’t the same thing as a cable car and why a trolley isn’t the same thing as a trolley coach.

Richardson and Stone aren’t trolley buffs. The attorneys learned their streetcar trivia through hard work. Stone and Richardson have each played key roles in guiding streetcar and trolley projects to the construction phase in the St. Louis and Kansas City, Missouri, areas, with Stone providing key legal advice to city officials in Kansas City and Richardson doing the same in St. Louis.

It’s not easy to guide urban public-transportation projects from the planning to the construction phases. But the projects in the St. Louis and Kansas City markets have cleared the legal hurdles that could have scuttled each of them.

That’s good news. Both Stone and Richardson say that these public-transportation projects will provide an economic boost to the cities through which they will travel.

“Frankly, I think that most of the economic development community in Kansas City will tell you that the streetcar is a game-changer,” Stone said. “Kansas City has been flirting with a variety of light-rail, streetcar-type projects since the mid-1990s but has not been able to get the citywide support necessary. Now it is becoming a reality, and it is going to make a major impact.”

And in St. Louis?

“The hope is that this will be an economic development engine,” Richardson said. “We are already seeing signs of that.”

The power of light-rail

St. Louis and Kansas City aren’t the only Midwest cities to turn to light-rail public-transportation projects for an economic boost.

In Detroit, construction crews are building the M-1 RAIL streetcar project that city officials hope will speed economic recovery efforts in the city. And in Minneapolis, the city’s new light-rail system is earning praise for creating jobs and bringing new development to previously under-served neighborhoods.

What the St. Louis Loop Trolley will look like.

What the St. Louis Loop Trolley will look like.

The hope is that the Kansas City and St. Louis pojects will drive new development — encouraging new retailers, restaurants and offices — along their lines.

Stone said that since the announcement of the Kansas City streetcar project, the city has seen $100 million in development that is solely or partly attributable to the new streetcar line. Stone said that new residential developments are already under construction. New enterainment venues are opening, and hotels are being built, all in downtown Kansas City.

“When I first moved to Kansas City in 1993, the downtown was a ghost town,” Stone said. “There’s been a steady drive to rejuvenate the downtown since, and it’s paying off. This is building upon itself with the advent of the streetcar project. There is a huge buzz surrounding the downtown. Developers are coming to us from other cities. Just 10 years ago, that never would have happened.”

Richardson said that the Loop Trolley project in St. Louis is causing some of the excitement in both St. Louis and neighboring University City, the two metropolises in which the trolley line runs.

Construction on the St. Louis line started in late March. But since the announcement of the new line, Washington University has finished construction on a new student-housing project with a first-floor grocery store and restaurant, and other restaurants are popping up along the trolley’s route. Developers and investors have been buying up real estate in the areas served by the trolley, Richardson said, and have plans for their own new projects.

“We had a period in which we had a lot of historic rehab projects going on with loft spaces,” Richardson said. “We had a good run of eight years or so for that. Then 2008 and the recession slowed us down. Now we are seeing downtown rehab projects starting up again. It’s good to see this activity.”

On schedule

Both the Kansas City and St. Louis projects are moving along on schedule. In Kansas City as of May 1, 71 percent of the track for the streetcar project is built, with 15,430 feet complete out of 21,771 total feet needed for the project.

The city has announced, too, that 96 percent of water and sewer replacements and upgrades are complete, while more than 100 power poles have been installed. Construction crews have buld the line’s first streetcar stop at 16th and Main streets.

All construction is scheduled to wrap in the fall of 2015. The streetcar system will then go through a run of testing. City officials say that the line will open to the public in 2016.

Construction on St. Louis’ Loop Trolley project is in the earlier phases. But the work is proceeding on schedule. Once complete, the new trolleys — designed to look like historic trolley cars — will travel a 2.2-mile fixed-route line linking University City and Forest Park in St. Louis. The line will include 10 stops, including a big one at the Missouri History Museum.

Construction of this line began March 23 with the installation of a permanent roundabout on Delmar Blvd. in University City. Trolley track construction was scheduled to begin late in May. City officials say that the line will begin service in late 2016.

Gaining approval for each of the projects was not an easy task. Stone and Richardson helped in this process, assisting the city on a wide range of financial and planning matters.

In Kansas City, the streetcar project is funded through a sales tax paid by consumers and special assessments paid by the property owners and commercial tenants in a limited special district. Earning the support of the property and business owners in this district took time, with Stone saying that planners and city officials went through almost a year’s worth of meetings with the business community.

The meetings were necesssary to convince the business community that the streetcar project would provide them with a significant economic boost.

“We had some convincing to do,” Stone said. “Luckily, we were right about the positive impact that the streetcar project would have. At this point there is some sentiment among the business community that perhaps we should expand the line. I think if you spoke to the business owners who were at first wary of the plan, you’d find almost unanimously that they now think this was the right decision.”

In St. Louis, gaining the funding for the project was a challenge, Richardson said. The Loop Trolley is a $48 million project. The federal government provided some small grants to get the project started, providing about $25 million. The city created a TIF district for the St. Louis portion of the route that added an additional $4 million of funding.

Then project officials turned to the New Markets Tax Credit program to provide yet more funding, Richardson said. This program, created in 2000 to spur reinvestment in low-income or struggling communities, was created as part of the Community Renewal Tax Relief Act of 2000. There weren’t examples, though, of this program being used to fund public-transportation projects.

But in St. Louis, the New Markets Tax Credit program provided millions of needed dollars for the trolley project.

“That was a very innovative and unconventional approach,” Richardson said.

Today, both Richardson and Stone are waiting to see the full impact that the cities’ new public-transportation projects will have. But already, the attorneys are seeing benefits.

The time is right for new public transportation because so many people today want to move into the hearts of cities. Already, there is more activity — and more residents moving in — in the middle of St. Louis and Kansas City.

“I went to downtown Kansas City the other night and it was like New York City,” Stone said. “The streetcar project will only help spread that activity throughout the center of the city.”

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This entry was posted in Detroit commercial real estate, Kansas City commercial real estate, Michigan commercial real estate, Minneapolis commercial real estate, Minnesota real estate, Missouri commercial real estate, St. Louis real estate and tagged , , , , , . Bookmark the permalink.

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