Bonds for Detroit light rail project approved by city council

Apr 11, 2011

Detroit City Council has approved $125 million in bonds to help pay for a light rail system that will stretch from downtown Detroit to the New Center.

The total cost of the project is expected to be $528 million, according to Bill Shea at Detroit Crain's Business.

Council also approved a $25 million TIGER grant from the federal government (Transportation Investment Generating Economic Recovery).

From the Detroit Free Press:

Both moves are steps toward building light rail from downtown to the New Center and ultimately to 8 Mile Road...Of the bond money, about $73 million would go to rail and the remainder to new buses and other capital improvements for the Detroit Department of Transportation. Groundbreaking on the rail line could begin as early as 2012 and building the entire 9.3-mile system would take up to four years, officials said.

The light rail project is a joint effort between the city and private investors.

Cash and tax credits worth another $100 million from a private investor consortium known as M1 Rail is expected to be enough to qualify as a local match for more federal funding.

According to Crain's Detroit Business, these private investors have put up "$100 million in cash and tax credits to build the stretch from Hart Plaza to West Grand Boulevard."

From Crain's Detroit Business:

A deal worked out last year in Congress allows DDOT to use the private money as part of the local match needed to qualify for federal funding that would account for up to 60 percent of the remainder of the line’s capital costs.

The rail plan is expected to qualify for the funding under the FTA’s New Starts program, which is aimed at partially funding qualified local fixed-guideway transit projects such as rail.

The federal government has been expediting the project’s regulatory process, trimming it to about a year instead of three, and a decision on final funding from Washington could happen this summer.

Not all are supportive of the light rail project.

Jarrett Skorup of the Mackinac Center for Public Policy compared the M1 light-rail project to the heavily subsidized "People Mover" loop in downtown Detroit - a rail system that has been derided as a "horizontal elevator to nowhere." Skorup wrote in the Grand Rapids Press:

The argument that subsidizing this project can reverse the city’s decline has it exactly backwards. As many scholars have noted after reviewing evidence from around the country: It’s not transit systems that build cities, it’s cities that build transit systems.

So what do you think? Would a light rail system along Woodward Ave. help the city?