Streetcar grant to pay full cost of new line along Loyola Avenue
By Frank Donze, The Times-Picayune
February 18, 2010, 6:55AM
Rusty Costanza/The Times-Picayune'They believe in what we're doing here. That we're doing things better,' said Julie Schwam Harris, director of intergovernmental relations for Mayor Ray Nagin.
The Regional Transit Authority didn't win the lottery Wednesday, but the agency did beat some long odds by landing a $45 million federal grant that will pay the full cost for a new streetcar line along Loyola Avenue from the Union Passenger Terminal to Canal Street.
RTA officials hope to have the streetcar line up and running in about two years.
Competition for the money, which will come from a $1.5 billion component of the federal stimulus package, was stiff.
The RTA application was one of 1,400 from all 50 states. In the end, the Obama administration awarded only 51 grants from the program, and RTA Chairman Cesar Burgos noted that of the 30 cities that sought money for rail projects, New Orleans was one of just three to be chosen, along with Dallas and Tucson, Ariz.
During an afternoon news conference, a top aide to Mayor Ray Nagin hailed the decision as the latest good news for the city's recovery to come out of Washington, D.C.
"Winning this grant is a testament to what's happening here in this city as a whole, building back greener, building back better,'' said Julie Schwam Harris, Nagin's director of intergovernmental relations. "And getting, in this very competitive environment, such a large amount of funding from this grant, shows that they believe in what we're doing here. That we're doing things better.''
While the 1.5-mile streetcar line along Loyola Avenue will be fully financed by the federal government, the RTA is looking to make a substantial local investment for a second phase.
Dubbed the "French Quarter loop,'' the proposed $115 million extension would travel about four miles along North Rampart Street from Canal Street to Press Street and features a 1.2-mile spur on Elysian Fields Avenue that would connect with the Riverfront streetcar line at Esplanade Avenue.
Thanks to an improved bond rating, transit officials say they are now in a position to borrow about $52 million for the project and kick in another $13 million from a reserve account. RTA General Manager Justin Augustine said he hopes to secure the $50 million balance from the federal government.
While the search for more money continues, Burgos said the RTA faces an "aggressive timeline'' to complete the Loyola Avenue line by the May 2012 deadline stipulated in the grant award. Augustine said his staff plans to seeks bids for final design and construction work by mid-April and begin turning dirt in October.
The new route will use surplus streetcars from the Canal Street and Riverfront lines. After floodwaters from Hurricane Katrina destroyed the 24 candy-apple red Canal streetcars and the six Riverfront streetcars, the RTA used $31.5 million in FEMA reimbursements to restore them.
The RTA is seeking $25 million in federal aid for a third new streetcar line along Convention Center Boulevard.
Plans call for that route to span 1.8 miles and cost about $51 million. The RTA's financing proposal calls for the agency to borrow about $21 million and dip into its reserve for $5 million.
The stimulus grants were targeted for "creative projects" that could increase business development while increasing public transit options, Transportation Secretary Ray LaHood said.
In announcing the selection of the RTA proposal, the Transportation Department said the Loyola Avenue corridor is home to significant commercial and business activity, including the city's energy, government, health care and financial sectors. It said the new streetcar line should help attract new development and help redevelop underused properties along the Loyola Avenue corridor.
Ivan J. Miestchovich Jr., director of the Center for Economic Development at the University of New Orleans, said he doubts the streetcar line will generate major new industry or business development, but it likely would spur retail operations and perhaps provide a lift to stalled plans for redevelopment of the Hyatt Regency Hotel, which has been vacant since Katrina.
"Tourists will get on a streetcar and take a ride, and if they see a coffee shop or store that catches their interest, they know they can get off and get back on, and that could be very good for retail businesses," Miestchovich said.
Sen. Mary Landrieu, D-La., called the streetcar grant an example of the positive impact the federal stimulus package has had on Louisiana.
"This project is exactly what the stimulus bill is intended to provide: real opportunities for Louisiana," Landrieu said. "Sadly, some other elected officials failed to recognize the opportunities these investments can offer, but I will always fight in continued support of the stimulus spending and the benefits it affords my state."
Bruce Alpert contributed to this report.