New Orleans, Louisiana/Canal Streetcar Line

Description

The Regional Transit Authority (RTA) is developing a 5.5-mile streetcar project in downtown New Orleans. The Canal Streetcar Line would extend along the median of Canal Street from the Canal Ferry, at the Mississippi River in the Central Business District, through the Mid-City neighborhood to two outer termini at the Cemeteries and City Park/Beauregard Circle. The project provides for restoration of streetcar service on Canal Street, the construction of a maintenance facility for the RTA streetcar fleet, and the rebuilding of a fleet of 33 PCC vehicles to current transit standards. The capital cost is estimated at $156.6 million (escalated dollars), which covers design refinements. Ridership is estimated to be 31,400 average weekday boardings and 5,300 daily new riders for the forecast year (2015).

The overall project rating of Recommended is based on the solid local financial commitment and strong cost effectiveness of the project. The overall project rating applies to this Annual New Starts Report and reflects conditions as of November 2000.Project evaluation is an ongoing process. As new starts projects proceed through development, the estimates of costs, benefits, and impacts are refined. The FTA ratings and recommendations will be updated annually to reflect new information, changing conditions, and refined financing plans.

Status

RTA completed a Major Investment Study/Alternatives Analysis of the Canal Street corridor in March 1995. The Regional Planning Commission, the Metropolitan Planning Organization for New Orleans, has included the Canal Streetcar Line and the Carrolton Spur to City Park in the Transportation Plan and Transportation Improvement Program. The Federal Transit Administration (FTA) approved the initiation of preliminary engineering (PE) and the preparation of a Draft Environmental Impact Statement (DEIS) in September 1995. The DEIS was published in March 1997 and the Final Environmental Impact Statement (FEIS) was published in July 1997. FTA issued a Record of Decision for the project in August 1997. The RTA initiated Final Design on the Canal Streetcar Line in September 1997. Project start-up is anticipated in April 2004.

TEA-21 Section 3030(a)(51) authorizes the New Orleans Canal Streetcar project for final design and construction. Through FY 2001, Congress has appropriated $55.18 million in Section 5309 new starts funds for this project.

Evaluation

The following criteria have been estimated in conformance with FTA’s Technical Guidance on Section 5309 New Starts Criteria unless otherwise indicated. N/A indicates that data are not available for a specific measure. The project is rated as being in final design

Justification

The Medium-High project justification rating reflects the project’s strong estimated cost effectiveness and positive land use rating, but relatively weak mobility improvements.

Mobility Improvements

Rating: Medium

RTA estimates the project will serve 31,400 average weekday boardings and 5,300 daily new riders in 2015, with the following annual travel time savings.

Based on 1990 Census data, there are an estimated 5,888 low-income households within a ½-mile radius of the line’s proposed stations, approximately 35 percent of the total households within a ½-mile radius of proposed stations.

Environmental Benefits

Rating: Medium

The New Orleans metropolitan area is an attainment area for carbon monoxide and ozone. RTA estimates the following annual emissions reductions.

RTA estimates that in 2015, the Canal Streetcar Line project will result in the following savings in regional energy consumption (measured in British Thermal Units – BTU):

Operating Efficiencies

Rating: Not Rated

RTA estimates the following systemwide operating cost per passenger mile in the year 2015.

Cost Effectiveness

Rating: High

RTA estimates the following cost effectiveness indices:

Transit-Supportive Existing Land Use and Future Patterns

Rating: Medium

The Medium land use rating reflects moderate to good existing densities and pedestrian-friendliness in the corridor, as well as adoption of a more transit-supportive comprehensive land use plan for the city in 1999. 

Existing Conditions: The proposed Canal Streetcar Line is wholly located within an existing built-up urban area originally developed in the streetcar era. Much of the corridor lies within the CBD and historic areas, in which densities, mix, and pedestrian friendliness are generally good. The CBD includes a high-density mix of office, retail, hotels, and leisure attractions. CBD employment is 122,000, two-thirds of which is within ½ mile of the proposed Canal Streetcar Line. Parking in the CBD is moderately priced, but zoning ordinances establish parking caps for new development that are fairly restrictive. Adjacent to the CBD are the riverfront and the French Quarter historic district that include tourist and leisure attractions. The remainder of the corridor is a mix of neighborhood commercial development surrounded by moderately dense residential neighborhoods on a grid street pattern. Residences are primarily single or two-family detached houses with long, narrow lots; there are some pockets of two- to three-story apartment buildings. An estimated 38,000 people live within ½ mile of the proposed line as a whole, at an average density of 6,800 persons per square mile.

Future Plans and Policies: The New Orleans Land Use Plan, adopted in 1999, is expected to result in zoning revisions to facilitate mixed-use redevelopment. A neighborhood mixed-use category should assist in preserving and enhancing the existing desirable elements of the corridor, while an urban mixed-use designation will facilitate redevelopment of vacant or underutilized industrial and commercial sites. While the plan does not strongly focus on increasing development in the Canal Streetcar corridor, it does address the broader primary issues faced by the city including the need to stabilize population and spur re-investment and redevelopment. CBD employment growth is forecast in hotel, leisure and related service industries, and the market is currently sustaining continued residential and hotel conversions. Retail revitalization strategies have been incorporated in the Land Use Plan. The city’s design review authority for large projects and conditional-use projects is the most significant tool for ensuring that new development is transit-supportive; the city has already demonstrated its intent to use this authority accordingly. Much of the corridor is eligible for city and state economic development incentives, including tax exemptions or credits for construction, rehabilitation and job creation. The city planning process and its Land Use Plan have greatly improved public and neighborhood participation, with beneficial results.

Local Financial Commitment

Proposed Non-Section 5309 New Starts Share of Total Project Costs: 20%

The project’s financial plan proposes to utilize $125.3 million (80 percent of total project costs) in Section 5309 New Start funds, $27.1 million in loan funds (17.3 percent), $3.2 million in donated land from the City of New Orleans (2.0 percent), and a $1.0 million private donation.

Stability and Reliability of Capital Financing Plan

Rating: Medium-High

The Medium-High capital finance plan rating reflects RTA’s high level of commitment of capital funds (100%) and aggressive action to turn around recent deficits through fare increases, tax increases, and use of leases for new buses. 

Agency Capital Financial Condition: RTA has revamped its bus fleet with a new lease arrangement for 175 buses, which means that what had once been an aging fleet now is an average of 3.5 years old. The bus lease has a Moody’s rating of Baa3. The largest component of the local share of the capital will be a loan from the Louisiana Local Government Environmental Facilities and Community Development Authority (LLGEFCDA), which will be paid back with the newly collected sales tax on hotel and motel rooms. This should be a stable source of income that appears to have been conservatively estimated.

Capital Cost Estimates and Contingencies: The capital cost estimate (and process) for the project has been examined and determined to be acceptable. RTA reconfigured its project budgeting approach in summer 2000. A review of cost estimating details and backup data indicates the revised project budgeting approach is significantly better than earlier approaches.

Existing and Committed Funding: One hundred percent of the local funds are committed. The largest portion comes from a loan agreement, for which there is a letter of commitment. The loan would be paid back by a new sales tax on hotels and motels that began collection in August 2000. There is also a copy of a City of New Orleans ordinance authorizing the Mayor to enter into an agreement regarding provision of right of way.

New Funding: The private donation of catenary poles, valued at $1 million, has not yet been secured.

Stability and Reliability of Operating Financing Plan

Rating: Medium

The Medium operating finance plan rating reflects the positive action taken by the agency to reverse past operating deficits, and the high level of commitment of operating funds.

Agency Operating Financial Condition: RTA had operating deficits from $13 million to almost $22 million shown for the last 5 years. However, the agency has taken meaningful action to reverse those deficits: (1) a new lease arrangement for 175 new buses, and revised preventive maintenance procedures; (2) a fare increase from $1.00 to $1.25 for the basic fare (and similar increases for other fares); (3) reductions in expenses, including medical insurance, service headways, administrative wages, and work force; and (4) an extension in scope of the RTA sales tax to include hotel and motel room rental receipts. With these modifications, the agency projects that its accounting deficit will go away by 2005. In FY 2001 there is a projected consolidated cash balance of zero, which is forecast to increase steadily over time up to exceeding 6 months of operating expenses. The cash balance is forecast to remain below 3 months through 2003, below 6 months through 2012, and to remain in excess of 6 months through the remainder of the forecast period.

Operating Cost Estimates and Contingencies: Annual operating costs for the project are estimated at $7 million in 2004 ($YOE), representing approximately 7 percent of systemwide operating costs. Operating cost estimates were built up from past experience with streetcar operation and provided in considerable detail. On a systemwide basis, passenger fares are expected to be 46 percent of operation expenses in 2004.

Existing and Committed Funding: All operating funding sources are committed. Aside from passenger fares, the main source of operating revenue is the sales tax, collected for years, that is a stable source and is conservatively estimated into the future.

New Funding: No new funding is proposed.