Kansas City wasn’t a winner in the ultra-competitive TIGER grant program, yet the streetcar continues with plenty of political backing. The mail-in election addressing 75% of the project cost wraps July 31; early returns are positive, with half of eligible voters already returning ballots.
Only one of the seven streetcar projects that applied for TIGER actually won: Fort Lauderdale (press release). They applied once before and were denied. This time, all of their outstanding pieces were in place (local and state funding).
Fortunately, many options exist for closing Kansas City’s streetcar funding gap (in no particular order):
Value engineering: Basically trimming scope while providing the same basic service. An entire block has already been eliminated from the route (see above photo). The city could also save money ordering expensive components (vehicles, rail) by teaming up with another city, perhaps even Fort Lauderdale (they also plan to launch in 2015).
Design/Build: The city could (and probably will) hire one vendor to design and build the streetcar line in one contract. This delivery method was used for the new Bond Bridge and is increasingly common as cities and states look to save money on expensive capital projects.
Reduced lending costs: Since TDD assessments will only raise $10 million annually, construction costs will be financed with city-backed bonds. The life of those bonds could range from 10 to 25 years, meaning lots of interest. The lower the interest rate, the lower the overall cost. Rates are very low now — lower than what the baseline budget assumes — but no one can predict what rates will be when bonds are sold before construction starts. Regardless, Missouri’s state infrastructure bank (PDF) is another option that could reduce interest rates to what the market can provide.
Other Federal transit funding: The Small Starts program is the most obvious, since that’s where transit projects under $250 million typically go first; both of our MAX routes were funded through Small Starts. The city is also seeking funds from the Surface Transportation Program (STP) and Congestion Mitigation Air Quality (CMAQ) — both administered through MARC.
Crowd-funding: Crossroads start-up Neighborly is launching ourstreetcar.com, which will allow anyone in the world to donate as little as $1 directly to the project (in exchange for perks, which start at the $10 level). While it might not raise $25 million, every dollar raised through Neighborly avoids lending costs that contribute significantly to the overall price tag. [Disclosure: I serve on Neighborly's advisory board.]
Jackson County: A 1-cent countywide transit sales tax is being eyed for November. County officials have shown interest in making sure the streetcar is completely funded, since their regional rail plans rely on the streetcar to distribute riders to the Central Business District.
PIAC: The streetcar is on next year’s PIAC wish list, which could net another million or two from existing city infrastructure funds (as it did in 2012).