Thursday, January 3, 2013

Why funding Charlotte's streetcar is tough

Maybe this item's headline should be Yet Another Problem with Single-Use Zoning.

There's been chatter among city policy types about finding some creative finance tools for Charlotte to use to build the second phase of what would ultimately be a Beatties Ford Road-West/East Trade Street-Hawthorne Avenue-Central Avenue streetcar route.One tool being talked of is a special tax assessment district.

(For the purposes of this post, let's set aside whether said streetcar is a good or bad idea. I tend to think it's a good idea, as a way to shape and lure development to parts of the city that could use a development boost, but I know others disagree with that. Topic for another day. For now, let's talk about financing.)

Because of a reluctance to use regular property taxes (for reasons that have not been clearly articulated, at least not in my hearing, but that seem to be taken as gospel), some folks have talked of special tax assessment districts, akin to those that fund Charlotte Center City Partners or University City Partners, along the streetcar route. It's a tool used around the country to help municipalities pay for infrastructure seen as helping specific neighborhoods.

But here's why that tool isn't very sharp in Charlotte, at least not along the part of the streetcar route that is already
funded and ready to start construction this year (Presbyterian Hospital up to the Transportation Center at Brevard Street) as well as the proposed-but-unfunded second leg (from Presbyterian out Hawthorne to Sunnyside Avenue and from the Transportation Center up West Trade Street to Johnson C. Smith University). If you know what's along that route you'll notice that huge chunks of land along it are tax-exempt, owned by government or educational or other nonprofit institutions. The hospital. Independence Park. Central Piedmont Community College. The I-277 right-of-way. The old county courthouse. The Charlotte-Mecklenburg Police Department. Old City Hall. The Federal Reserve Building. The Transportation Center. The arena is city-owned, too. Once you pass The Square you've got First Presbyterian Church, the federal courthouse and Johnson & Wales University land. The I-77 right-of-way and, a few blocks later, Johnson C. Smith U.

Yes, there are some taxable parcels along the route, too. I'm just saying ...

Years ago, the old and lamentably too-well-followed Odell Plan for uptown Charlotte called for a zone of government buildings, mostly on urban-renewed land appropriated from what once was a black neighborhood called Brooklyn. By creating a district of mostly government buildings, we've created a district without much privately owned land. And thus lowered any potential tax revenue for projects like the streetcar. It's a good illustration of why a fine-grained urban fabric (meaning a lot of different, smaller uses close to each other, instead of huge-footprint, single-use projects) really does seem to be healthier, economically, in the long run.

Of course once you get past JCSU to the west and hit Central Avenue on the east, the amount of potential redevelopable land is much greater. But those sections aren't even in the city's long-range capital plan (which hasn't been adopted anyway).

Want to read more about the streetcar's potential economic impact under varying scenarios? To download the first part of a 2009 economic development study click here. For the second part click here.


Patrick said...

Could it be argued that now so much public land is being taken out of the equation by a federal grant, the math for future expansion is made better because the land is proportionally more private?

Rick Short said...

There is also the issue that the State's Special Assessment District legislation supporing bond payments is set to expire at the end of June. This is the same legislation needed for the Red Line. Certainly, the General Assembly could extend it or reinstate it later, but that would need to be done. This particular legislation also requires approval of those impacted by any new assessment - something that has proven problematic with the Red Line.

Anonymous said...

The combination of upzoning and TIF would make more sense. Those exercising their increased development rights could provide the incremental return in tax base.

Otherwise, a special assessment creates a levy on all property, and thereby penalizes those who have already contributed the urban core's revitalization well in advance of streetcar.

As a property owner along the streetcar route, I refuse to pay higher taxes, unless my development rights can increase. But since my property is in a historic district overlay, I don't imagine the City wants me tearing down my Midwood home for TOD.

Dennis said...

Mary, my belief is that the catalyst for the completion of the streetcar as well as the development of retail downtown should be linked. As you look to develop retail downtown, where could it go, not Tryon Street, and if not Tryon, where? North of Trade you lose the lunchtime shoppers from Trade South. South of Trade, you lose the lunchtime shoppers from Trade North. Retail could satisfy both down Trade Street. Also, there are developmental plots that could be made out of parcels, and reconfigured buildings could make for unique shopping types. The Streecar would be a huge plus for that development.

Anonymous said...

No mention of Gateway. Gateway connection is the most important aspect of the line, in my opinion. we must have a way to connect the Red Line, high speed rail, Amtrak, Greyhound and that future critical state hub to the light rail line and teh rest of uptown. without it we will have to walk, bike and bus every rider up trade.

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