New Orleans, Louisiana/Desire Corridor Streetcar

Description

The Regional Transit Authority (RTA) is restoring a 2.9-mile traditional streetcar line in downtown New Orleans, as part of the locally preferred alternative for the Desire Corridor. The Desire Corridor Streetcar project will operate along North Rampart Street and St. Claude Avenue between Canal Street and Poland Avenue. The proposed streetcar alignment will loop at Canal Street and use exclusive right-of-way in the median of city streets, as much as possible. The single-track loop will operate in the median of North Rampart and Canal Streets and in the traffic lanes of Basin and Toulouse Streets. The double-track section will operate in the left traffic lanes of North Rampart Street, McShane Place, and St. Claude Avenue between Toulouse Street and Elysian Fields Avenue, and in the median of St. Claude Avenue between Elysian Fields and Poland Avenues. The project will serve the communities of Iberville, Treme, Faubourg Marigny, St. Roch and Bywater. Six major bus transfer points with construction of center- platforms, canopies, passenger benches and landscaping will be provided; 16 intermediate stops with less elaborate center-platform facilities are also planned. The project also includes the purchase of 13 new vehicles. The capital cost estimate of the streetcar project is $93.5 million (escalated dollars). Ridership is forecast at 15,300 daily boardings by 2020.

The overall project rating of Recommended is based on the adequacy of the project’s justification criteria and local financial commitment to construct and operate the project. The overall project rating applies to this Annual Report on New Starts 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 for the Desire Corridor in September 1999. The locally preferred alternative (LPA) includes a package of TSM/enhanced bus improvements in addition to the 2.9-mile streetcar line. The Regional Planning Commission, the New Orleans region’s Metropolitan Planning Organization, endorsed the LPA and incorporated it in the metropolitan transportation plan. The Federal Transit Administration (FTA) approved the initiation of preliminary engineering (PE) in August 2000.

TEA-21 Section 3030(b)(34) authorizes the “New Orleans -- Desire Streetcar” project for final design and construction. Through FY 2001, Congress has appropriated $5.96 million in Section 5309 New Starts funds to the project.

Evaluation

The following criteria have been estimated in conformance with FTA’s Technical Guidance on Section 5309 New Starts Criteria. N/A indicates that data are unavailable for this specific measure.

FTA has evaluated this project as entering preliminary engineering. The project will be reevaluated when it is ready to advance to final design and for next year’s Annual Report on New Starts.

Justification

The Medium project justification rating reflects the adequacy of the project’s environmental benefits, operating efficiencies, cost-effectiveness index, and transit supportive land use at this early stage of preliminary engineering.

Mobility Improvements

Rating: Low-Medium

RTA estimates that the Desire Corridor Streetcar will have 15,300 average weekday boardings by 2020, and would result in the following annual travel time savings.

Based on 1990 Census data, there are an estimated 6,017 low-income households within a ½ mile radius of the proposed streetcar stops, approximately 29 percent of the total households within the corridor.

Environmental Benefits

Rating: Medium

The New Orleans region is an attainment area for carbon monoxide and ozone. RTA estimates the project will result in the following annual emissions reductions.

RTA estimates that in 2020 the Desire Corridor Streetcar would result in the following increase in regional energy consumption (measured in British Thermal Units – BTU).

Operating Efficiencies

Rating: Medium

RTA estimates that its systemwide operating cost per passenger mile will not change significantly with the implementation of the Desire Corridor Streetcar project.

Cost Effectiveness

Rating: Medium

RTA estimates the following cost effectiveness indices.

Transit-Supportive Existing Land Use and Future Patterns

Rating: Medium - High

The Medium-High land use rating reflects 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 Desire Corridor Streetcar serves the New Orleans CBD and adjacent 18th- and 19th-century residential neighborhoods. The CBD contains a high-density mix of employment, hotel, retail, and tourist destinations, with a total of 122,000 jobs. Outside the CBD, the corridor serves a mix of neighborhood commercial surrounded by residential neighborhoods. Population densities are relatively high, averaging 10,000 persons per square mile. The entire corridor is laid out as a walkable street grid system, although some areas suffer from blight and a general lack of landscaping and urban design elements. Parking caps in the CBD are fairly restrictive, and most parking in the residential neighborhoods is on-street. 

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 is proposed which would apply to much of the Desire Corridor. This designation would assist in preserving and enhancing the existing desirable elements of the corridor. The plan also recommends concentrating industrial development in certain areas and converting other areas to mixed residential/ commercial or open space. An urban mixed-use designation is proposed to facilitate redevelopment of vacant or underutilized industrial and commercial sites. Finally, the plan recommends the development of additional parks and recreation areas in Desire corridor neighborhoods.

While the plan does not strongly focus on increasing development in the Desire 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 major 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 also greatly improved public and neighborhood participation.

Local Financial Commitment

Proposed Local Share of Total Project Costs: 30%

The project’s financial plan proposes to utilize $65.5 million (70 percent of total project costs) in Section 5309 New Starts funds, $27.0 million (29 percent) in RTA hotel/motel sales tax revenue, and $1.0 million (1 percent) in local right-of-way donations.

Stability and Reliability of Capital Financing Plan

Rating: Medium

The Medium capital finance plan rating reflects RTA’s 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 for this project will be 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. The Canal Street Streetcar project, however, takes priority over the Desire Corridor Streetcar project in funding allocations.

Capital Cost Estimates and Contingencies: The capital cost estimates are adequate for a project in this early stage of preliminary engineering. Capital cost estimates will be refined as the project advances through planning and project development.

Existing and Committed Funding: The hotel industry portion of the Sales and Use Tax is expected to generate $7.2 million annually in incremental revenue, although the proposed Canal Street Streetcar project has been stated as RTA’s first priority and will require a significant portion of the revenue. There is a City of New Orleans ordinance authorizing the Mayor to enter into an agreement regarding provision of right-or-way. The reliance on a majority of new starts funds for this project, however, may pose future project funding challenges.

New Funding: No new sources of funding are proposed.

Stability and Reliability of Operating Finance 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 of 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 01 there is a projected consolidated cash balance of zero, which is forecast to increase steadily over time. The cash balance is forecast to remain below 3 months through 2003, below 6 months through 2012. They remain forecast in excess of 6 months for the remainder of the forecast period.

Operating Cost Estimates and Contingencies: Operating costs estimates were built up from past experience with streetcar operation and provided in considerable detail. Annual operating cash flow provides a surplus starting in 2000, and cash balances are slowly built up over time. A specific contingency plan was not provided. However, presumably, cash balances would be built up more slowly if there were operating cost overruns. 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 sources are proposed.