As you may be aware, the City of Colorado Springs would like to utilize TIF (or tax increment financing) to pay for a freeway connection on the northern side of Colorado Springs. The TIF dollars (from 2.5 Million square feet of retail including an enclosed shopping mall and lifestyle center) will be used exclusively for the roadway improvements. The proposal is for nearly $200 million dollars over the span of 25 years.
Prior to making the statements that I am going to make, let me state that I respect Mr. Erickson and the work that he has done and is proposing. I do not blame him for attempting to get the Powers Extension financed through Urban Renewal. If I were in his shoes, and would have thought I had a shot in the dark and getting it through, I can’t say I wouldn’t have done the same thing. Let me also state that the opinions in this blog are my own opinions and this is by no means a reflection of the other CSURA board members. These are opinions that I have stated in a public forum at prior CSURA board meetings.
Which Creates More Economic Development, A New Power Shopping Center or a Downtown Streetcar System?
Extension of Powers Boulevard to Interstate 25: (Under $200,000,000) It was stated by Assistant City Manager, Nancy Johnson at one Urban Renewal Meeting (Noted in Minutes) that the primary portion of the Powers extension is to cost nearly $100 Million on its own. This number is due to the costs of the on/off-ramps to and from Interstate 25 and the added on/off-ramps for Copper Ridge. The numbers are very fuzzy at this time, but CDOT estimates at one time were 60 Million Dollars, City Staff has estimated $80 Million.
Downtown Streetcar System (Including Service Station, track, electric lines, streetcar fleet, etc.): Between $123,000,000 and $164,000,000. This cost is a range with variables of how the City would like the streetcar system to appear and operate. The range is based on conservative numbers of $15 Mil. per track mile to $20 Mil. per track mile. The corresponding route is a round-trip set of tracks from I-25 on the south to Penrose Hospital south of Fillmore on the north. In addition, the downtown streetcar system will not likely be funded solely by the City. In most communities a foundation or private investments covers the majority of the costs associated with a streetcar system.
As many know, the primary reason for incorporating a streetcar system is for reinvestment and economic development opportunities along a streetcar line. During the public streetcar presentations, URS (a leader in the streetcar industry) provided the following information illustrating the ROI (Return on Investment) for streetcars:
Kenosha, WI: Initial Investment ($6.2 Million); Development Investment ($150 Million); 2319% ROI
Little Rock, AR: Initial Investment ($19.6 Million); Development Investment ($200 Million); 920% ROI
Tampa, FL: Initial Investment ($48.3 Million); Development Investment ($1000 Million); 1970% ROI
Portland, OR (Inital): Initial Investment ($55.2 Million); Development Investment ($1046 Million); 1794% ROI
Portland, OR (Extension): Initial Investment ($17.8 Million); Development Investment ($1353 Million); 7500% ROI
These numbers are mind-boggling. The best part about streetcar investment is that it is actually solving blight and vacancy in our downtown. The streetcar system IS a public benefit that will benefit multiple property owners and the City of Colorado Springs holistically. I’m sure that you may be thinking that it is not fair to compare the two efforts, but I feel it is important to talk about the two at the same time. If economic development is the justification and reason for blighting a greenfield, the streetcar effort is a much more fruitful option that benefits multiple property owners instead of just a couple.
Imagine if the City were to get bonding for the streetcar system, with proven success in other cities across the country in lieu of bonding for a road on the belief that another shopping mall will be succeed enough to pay for said road. I would like to see our City move forward with a holistic approach, not just with a short-term mindset. We need to consider the long-term effects of subsidizing another shopping mall in an already saturated retail market.