Southeast Transitway/Southeast LRT | ~17 Stations | $2 Billion | Proposed

[MalcolmTucker]

Well, much depends on the time frame for funds from other levels of government. Lets say the total project cost is $6 billion (throwing in either the full Stephen Ave subway or a roughed in central station depending on the cost of the rest of the project). The payments at current interest rates would be $308 million a year.

That sounds like a big number, and it is. So cover off 25% from the federal government through the mass transit fund ($1 billion a year nation wide) and Building Canada Fund. $77 million covered.

That leaves $231 million a year for capital costs. If the city decided to dedicate the provincial gast tax transfer to the project, that is $124 million + a year. So down to $106 million a year. Take the $52 million education property tax clawback capital fund and you have a $54 million dollar hole. Cover the rest off with capital MSI/the msi replacement and or another property tax rise dedicated to a popular project and there you have it.

Assembling the grant stack will take lots of maneuvering, especially since the province and feds may end up on a collision course about the use of P3s, and we would have to delay other projects. But it isn't impossible.

[suburbia]

Originally Posted by AaronMak

You guys are thinking short term. The SE if the fastest growing quadrant of this city and has been for quite some time. It has more ares zoned for density, it holds the majority of the industrial work and now has an absolutly booming commercial area. Both QP and Seton are slated to become the next biggest commercial hubs in the city and it will happen quite quickly. Aswell most of the cities new suburbs are being built in the SE. That transit line will be well utilized by the time this line is built. For once the city is actually planning ahead so an area doesn't dissolve into chaos first and the city end up scrammbling to fix it. IMO its a better used of $5b than the SWRR as it will be used by more people, spanning a larger area and of every demographic. Also once it is in place it paves the way for high density around the stations AND it will relieve quite a bit of traffic off of deer foot. This line should be #1 priority for the city if it wants to get away from being one giant sprawled out suburb with a modern urban plan (unlike their current freeway mentality that has a striking similiarity to 1960's Los Angeles).

Agree that developers have a lot of money to be made if the tax payers can get a train out to the far reaches of the SE. Cal made a killing on Walden.

[RyLucky]

Originally Posted by MalcolmTucker

Well, much depends on the time frame for funds from other levels of government. Lets say the total project cost is $6 billion (throwing in either the full Stephen Ave subway or a roughed in central station depending on the cost of the rest of the project). The payments at current interest rates would be $308 million a year.

That sounds like a big number, and it is. So cover off 25% from the federal government through the mass transit fund ($1 billion a year nation wide) and Building Canada Fund. $77 million covered.

That leaves $231 million a year for capital costs. If the city decided to dedicate the provincial gast tax transfer to the project, that is $124 million + a year. So down to $106 million a year. Take the $52 million education property tax clawback capital fund and you have a $54 million dollar hole. Cover the rest off with capital MSI/the msi replacement and or another property tax rise dedicated to a popular project and there you have it.

Assembling the grant stack will take lots of maneuvering, especially since the province and feds may end up on a collision course about the use of P3s, and we would have to delay other projects. But it isn't impossible.

Sounds like a plan. And would we have to direct all of our funding towards the project for the entire amortization, unless new funding came along?

Btw, great post. I hope that kind of maneuvering is possible.

[UofC.engineer]

Originally Posted by RyLucky

Politically, I get why there are a lot of reasons to consider the Green Line as one project, but the reality is that unless the city is promised $5-6B, there is no way the north leg will be built in the same decade as the southeast leg.

This is because of a few problems:
-There is only room for necessary facilities on the SE leg, and thus it must be built first
-The SELRT is almost useless until it at least reaches Quarry Park
-After it does reach QP, it will be a lot more attractive to extend it to Mackenzie Towne for $100M than to extend it at the north end for 10 times as much; [repeat logic every step until we reach Seton]
-Any above-ground route between 16th ave N and Downtown will be a dealbreaker on council; any below-ground route will cost as much as a city-wide BRT network
-Even with dramatically higher provincial and federal commitments, Calgary is unlikely to find the capital to create the complete Green Line for years
-Many things could change in the 10-15 years it will take between stages of construction. That's a whole new political generation. Whatever part we manage to build could end up being the only thing we build for years.

Depressing, I know, but without a major institutional revolution in how these projects are funded (i.e. Plebiscite, city charter, double or triple gas tax, carbon levy, etc), I doubt we'll ever see the Green Line. Meanwhile, do the easy wins and hope for a miracle.

A lot of members here on the forum have pie in the sky ideas. But I think you hit the nail right on the hit with this post. It's one of the most realistic things that has been said here. I think we will not see a subway on 8th ave or the north central LRT for many, many, many years.

[MalcolmTucker]

Originally Posted by RyLucky

Sounds like a plan. And would we have to direct all of our funding towards the project for the entire amortization, unless new funding came along?

Btw, great post. I hope that kind of maneuvering is possible.

All? No. A lot? Yes. More than half? No.

To provide context, the provincial government grants to the City of Calgary in 2013 were:

Municipal Affairs $272,731,520
Transportation $375,293,035

and in 2012:
Municipal Affairs $278,480,836
Transportation $170,777,855

2014 numbers will be available in late June, but will be distorted by a front load of 2015 MSI into 2014.

The yearly payment doesn't look impossible in that context. The higher 2013 number was due to a GreenTrip payment I think. Though the Municipal Affairs funding revamp post MSI (including provincial gas tax flow through) should likely start at a base of around $650 million a year.

There is also the possibility of pushing through a big CRL covering the TOD zones of all of the stations on the line to really pump up funding, even if it is just a backdoor provincial grant to the city, the province might approve it while looking the other way.

The City of Edmonton squeezed every penny to build the grant stack for the Mill Woods LRT, made it clear that the project was the city's #1 priority, not just one of many. Raised taxes, deferred other projects.

Expectations management would be a big problem with funding infrastructure in this way. May people would assume the project is paid for and that after it is done we can go onto the next one. Prepare for lots of anniversary parties with politicians extolling long term visions and whatnot if something like this were to happen.

[CalgaryAlex]

Originally Posted by MalcolmTucker

There is also the possibility of pushing through a big CRL covering the TOD zones of all of the stations on the line to really pump up funding, even if it is just a backdoor provincial grant to the city, the province might approve it while looking the other way.

If they can't even get Westbrook redevelopment rolling by now, I wonder how much success they will have with some of these SE Line stations.

It would be nice if they could point the CMLC in the TOD direction, after their success in the EV.

[MalcolmTucker]

Originally Posted by CalgaryAlex

If they can't even get Westbrook redevelopment rolling by now, I wonder how much success they will have with some of these SE Line stations.

It would be nice if they could point the CMLC in the TOD direction, after their success in the EV.

CRLs does not equal an east village like process for land assembly, local infrastructure upgrade, and resale. In my thoughts it would be a purely financial support for the LRT.

Note: I think it is a bad idea to do this. But it may be more politically sell-able than raising property taxes, even if the end result on people's taxes is exactly the same.

[CalgaryAlex]

Originally Posted by MalcolmTucker

CRLs does not equal an east village like process for land assembly, local infrastructure upgrade, and resale. In my thoughts it would be a purely financial support for the LRT.

Note: I think it is a bad idea to do this. But it may be more politically sell-able than raising property taxes, even if the end result on people's taxes is exactly the same.

Isn't that exactly what a CRL is? Buy land around each station, get a CRL to fund the LRT capital expenses, and then resell the surrounding land to developers for mixed-use development.

Might be a different beast than EV with different margins but I'm sure it's something the CMLC could easily tackle.

Sorry if I'm missing the point of what you're getting at. Can you explain further as to why you think this is a bad funding option?

[MasterG]

Originally Posted by CalgaryAlex

If they can't even get Westbrook redevelopment rolling by now, I wonder how much success they will have with some of these SE Line stations.

It would be nice if they could point the CMLC in the TOD direction, after their success in the EV.

I would think it helps that Westbrook is substantially nicer place to live than all the south stations. The West line has certain advantages for TOD that the S, NW and NE (and future SE) don't have nearly as easily:

• Most connected to downtown physically and culturally - highest percentage of downtown workers, high-transit usage along corridor.
• In-fills have set massive precedent in west Calgary for redevelopment, highlighting attractiveness of the communities as well as strong developer response. It's not a case of trying to convince people that Anderson's sea of parking will eventually be an urban oasis surrounded by train tracks, highways and parking lots.
• No Macleod Trail, Crowchild Trail or 36th Street to destroy any hope of a nice place to live. Sure with a few thousand condo units and 10 or 20 year build plans it's possible to forget these huge roads. But 17th Ave, 33rd and 37th have nowhere near the same drawbacks to live next to/on right now.

I can see it being a success very quickly compared to other lines' TOD plans. A big difference is Westbrook is adding a huge amount of density to existing communities with population, services, demand for services and things to do within smaller distances. There isn't another site like it in the city - all other TODs are boxed in by highways or separated from the communities in enormous ways.

[MalcolmTucker]

Originally Posted by CalgaryAlex

Isn't that exactly what a CRL is? Buy land around each station, get a CRL to fund the LRT capital expenses, and then resell the surrounding land to developers for mixed-use development.

Might be a different beast than EV with different margins but I'm sure it's something the CMLC could easily tackle.

Sorry if I'm missing the point of what you're getting at. Can you explain further as to why you think this is a bad funding option?

CRLs are what Alberta calls tax increment financing, which describes better how it works. Basically you designate a zone and create an incentive for people to build there (infrastructure improvement usually), sometimes a tax abatement. As the property values in this zone increase at a rate higher than the average increase over the rest of the city, you keep the same mill rate applied in the TIF zone as the rest of the city, but use the incremental increase in revenue to pay off the cost of whatever the TIF is doing.

It is a worse option because accounting for a tax increase on everyone in the city (basically, since the TIF district is not payingthe incremental property taxes into the city, the rest of the city is subsidizing their regular city services) in this way is very untransparent. We see this in the Peace Bridge vs St. Patricks Bridge debate. No one seems to care about the St Patricks bridge because it is sold as not being tax dollars. But it is totally tax dollars!

It is more honest to raise taxes normally and say what you are going to spend the money on.

[Socguy]

Here's a short video Edmonton produced about how a CRL works:

https://youtu.be/PZw7oVwZAdI

[Socguy]

Originally Posted by MalcolmTucker

It is a worse option because accounting for a tax increase on everyone in the city (basically, since the TIF district is not payingthe incremental property taxes into the city, the rest of the city is subsidizing their regular city services) in this way is very untransparent. We see this in the Peace Bridge vs St. Patricks Bridge debate. No one seems to care about the St Patricks bridge because it is sold as not being tax dollars. But it is totally tax dollars!

It is more honest to raise taxes normally and say what you are going to spend the money on.

Your argument has a kernel of truth but you're pushing it a bit too far.

The CRL is designed to go into an area of the city that required redevelopment. Generally, this area already is being serviced by the city, (Power lines, water/sewer line, fire, police etc.), but due to the fact that a CRL is being considered, it is fairly safe to assume that area of the city is not doing too well and thus likely under-utilizing the capacity of those services that are already being provided by the city.

The CRL locks in the basic amount that the area is paying then uses the new tax revenue from the stimulated development to pay off the initial public investment that stimulated the development. The CRL cannot last longer than 20 years and at it's conclusion all tax revenue from the area moves to general revenue where it can subsidize other areas of the city... like new suburban developments.

I would argue that any increased use of city services during the revitalization period is not as big a deal as you make it out to be since these services are already provided to the area and are (mostly) covered by the initial tax revenue locked in at the start of the CRL.

I grant you that there is a legitimate debate about how governments should fund things, but what you call a subsidy could very easily be called an investment.

[CalgaryAlex]

Originally Posted by MalcolmTucker

CRLs are what Alberta calls tax increment financing, which describes better how it works. Basically you designate a zone and create an incentive for people to build there (infrastructure improvement usually), sometimes a tax abatement. As the property values in this zone increase at a rate higher than the average increase over the rest of the city, you keep the same mill rate applied in the TIF zone as the rest of the city, but use the incremental increase in revenue to pay off the cost of whatever the TIF is doing.

It is a worse option because accounting for a tax increase on everyone in the city (basically, since the TIF district is not payingthe incremental property taxes into the city, the rest of the city is subsidizing their regular city services) in this way is very untransparent. We see this in the Peace Bridge vs St. Patricks Bridge debate. No one seems to care about the St Patricks bridge because it is sold as not being tax dollars. But it is totally tax dollars!

It is more honest to raise taxes normally and say what you are going to spend the money on.

I see what you're getting at, thanks. I do understand what a CRL/TIF is, but wasn't considering your perspective on the rest of the city holding all the weight until tax revenue finally picks up in the revitalized area (and then staying the same even after the increased revenue is collected).

In any case, I think CRLs are still good vehicles for development. Even if it's just easier to sell to people who are vehemently opposed to paying more taxes to improve any part of the city that doesn't immediately border their property.

[MalcolmTucker]

Originally Posted by Socguy

I grant you that there is a legitimate debate about how governments should fund things, but what you call a subsidy could very easily be called an investment.

I am not arguing against a subsidy. I don't think subsidy is a bad word. But acting like a CRL or TIF is found money isn't the best way to encourage sound budget planning.

The CRL is designed to go into an area of the city that required redevelopment.

So central public libraries and hockey arenas are examples of city wide infrastructure or local infrastructure?

How would it not apply to the areas around the LRT if you wanted it to, and the province approved it.

The central point I am trying to make is it is a mugs game. All instituting a CRL does is make it harder to follow the bouncing ball, as it does not generate new money. (this is not the case in cities where there are neighbouring communities that could be the destination for similar investment, like two suburbs fighting over an arena district, or over turning their old warehouse district into a funky neighbourhood). In cities like Calgary and to a less extent Edmonton, you can't induce development, but you can move it around and change its build form through incentives. The condo towers in the East Village wouldn't otherwise be in High River - they were likely displaced from other centre city development areas.

[Riise]

Originally Posted by MalcolmTucker

It is a worse option because accounting for a tax increase on everyone in the city (basically, since the TIF district is not payingthe incremental property taxes into the city, the rest of the city is subsidizing their regular city services) in this way is very untransparent. We see this in the Peace Bridge vs St. Patricks Bridge debate. No one seems to care about the St Patricks bridge because it is sold as not being tax dollars. But it is totally tax dollars!

This is my major issue with TIFF/CRLs. At the end of the day, development should be cost recovery. Infrastructure financing tools like property-tax surcharges are much better at providing a stimulus/incentive with a smaller subsidy.

Originally Posted by Socguy

The CRL is designed to go into an area of the city that required redevelopment. Generally, this area already is being serviced by the city, (Power lines, water/sewer line, fire, police etc.)

I believe TIFF/CRLs were initially created to spur development in areas by providing the infrastructure required for redevelopment (e.g. raising the grade and building new streets in EV).

[Socguy]

Originally Posted by MalcolmTucker

The central point I am trying to make is it is a mugs game. All instituting a CRL does is make it harder to follow the bouncing ball, as it does not generate new money. (this is not the case in cities where there are neighbouring communities that could be the destination for similar investment, like two suburbs fighting over an arena district, or over turning their old warehouse district into a funky neighbourhood). In cities like Calgary and to a less extent Edmonton, you can't induce development, but you can move it around and change its build form through incentives. The condo towers in the East Village wouldn't otherwise be in High River - they were likely displaced from other centre city development areas.

I think this is our central disagreement. I do agree with you that a CRL can be abused and you've pointed out things that can go wrong. But I also feel that if implemented properly a CRL is a useful tool to accomplish what it sets out to do.

Moving on, I disagree with your assertion that you cannot induce development, you simply move it around. Even if that was the case, that ignores how different types of development contributes to the city's bottom line. Case in point: Suburban SFH or inner city TOD. A TOD may not happen without inducement from the city but it's much more valuable to the city if it does happen. Furthermore, through the creation of a vibrant hubs, it is possible for a city to draw regional or international business to itself. This is new investment/development that would be highly unlikely to be found in any particular city without initial inducement.

[Socguy]

Originally Posted by Riise

This is my major issue with TIFF/CRLs. At the end of the day, development should be cost recovery. Infrastructure financing tools like property-tax surcharges are much better at providing a stimulus/incentive with a smaller subsidy.

I won't disagree with that, I would simply point out that if a CRL could work as well and if it's the only way to get it done, then I'm on board.

Originally Posted by Riise

I believe TIFF/CRLs were initially created to spur development in areas by providing the infrastructure required for redevelopment (e.g. raising the grade and building new streets in EV).

Not necessarily, CRL's work best when they are implemented in a blighted area of a city. Each specific project is going to have it's own issues and if a project requires a total reset of the area then that should be factored into the funding assessment. Again, I won't disagree that CRL's have potential to be abused.

[MalcolmTucker]

If the city wants TODs not SFHs, they can stop zoning new land for SFHs. That would be a big incentive and cost nothing.

But I digress.

Why can't we just pay for infrastructure improvements through tax increases? It is like we are only fine with spending if we think someone else is paying.

As for TIFs gone wild, take a look at Chicago! So many districts they are pretty much pointless! There are even some districts that are entirely surrounded by other districts.

The first example of a Chicago TIF, the one that built the super awesome Millennium Park. The TIF did tonnes of things. Rebuilt theatres. Moved a bus station. Rebuilt Elevated train stations, gave money for heritage preservation.

Maps of TIF districts vs. not in Chicago

[UofC.engineer]

Results of the Ogden/Lynwood Charrette:

http://www.calgary.ca/Transportation...line/news.aspx

http://www.calgary.ca/Transportation...-Solutions.pdf

[CalgaryAlex]

Originally Posted by UofC.engineer

Results of the Ogden/Lynwood Charrette:

http://www.calgary.ca/Transportation...line/news.aspx

http://www.calgary.ca/Transportation...-Solutions.pdf

That looks great! Hopefully this actually happens, and that it sparks further development in the area.