The newest line of the Portland Streetcar Project opens Saturday

By Shelby Sebens | Northwest Watchdog

PORTLAND — When Portland became the first city to revive the streetcar in the 21^st century, communities across the nation oohed, awed and quickly jumped on the nostalgia train.

But with taxpayer dollars laying the tracks and subsidizing the projects, in which direction is the streetcar momentum headed?

Despite funding troubles – even Portland is grappling with maintaining the multi-million-dollar system – communities are rolling forward with the streetcars, citing environmental sustainability and spurred economic development.

“There seems to be no learning going on here either in Portland or by the Portland wannabes,” said John Charles, president and CEO of the Cascade Policy Institute, a free-market-focused public policy research organization based in Portland. “Subsidizing everything to infinity is problematic as a business model.”

Portland’s newest line, a 3.35-mile extension of the existing Portland Streetcar Project, opens Saturday with fanfare and free rides all weekend. It’s the first time since the 1950s that Portland has had a streetcar on the city’s east side. After that, rides will cost $1 and the streetcar will extend service, encompassing a little more than seven miles total.  

The city of Portland and TriMet, the public agency that operates mass transit in Portland and the surrounding area, cut their contributions to the Portland Streetcar in the current budget, but city officials say it’s not a sign of trouble. Though TriMet provides drivers for the streetcar, the city owns and operates the system, which contracts management to Portland Streetcar Inc., a private, nonprofit corporation.

Portland cut its share of funding to the streetcar by $350,000, and TriMet reduced its contribution by $300,000.  

“We don’t see that as a permanent cut,” Portland Bureau of Transportation spokesman Dan Anderson said. “We hope to bring streetcar operations up as the economy recovers. We’re optimistic.”

Ridership levels also flattened during the recession, adding to the hit on the system’s operating budget. The cuts mean service will be slower and less frequent than expected. The existing line has 10 cars and serves about 10,000 riders. The new line will add five cars and fit an additional 5,000 people a day.

Portland is not the only streetcar city facing a financial crunch. In Tampa, Fla., government officials are making plans to subsidize the streetcar in 2020 to keep it from going under, having to pay back a $55 million federal investment, according to the Tampa Tribune.

So why did Portland move forward with an expansion when funds to support the existing system are waning?

Anderson says the benefits outweighed the cost. Plans for the central loop expansion started in 2007. When the recession hit, officials thought it better to keep the jobs that the $148 million project was to bring in. The PBOT did not have a number showing how many jobs were created.

“If it had been shelved, that would have been a lot of jobs lost during a tough economic time,” he said. 

But critics say the long-term picture has been lost, and no hard evidence could be found showing fewer people are driving their cars downtown.  

“It’s a project in search of a purpose,” Charles said.

TriMet’s bus service No. 6, which runs along the same route as the new streetcar line, is scheduled to continue and not see any cuts, according to the agency’s website.

Funding for Portland’s $148 million central loop project — $20 million for the cars and $128 million to build the tracks — comes completely from taxpayer dollars:

$ 75 million: Federal Transit Administration grant

$15.5 million: Local improvement district (a fee paid by property owners along the streetcar line)

$27.68 million: Portland Development Commission

$3.62 million: Regional funds

$6.11 million: City funds (from development fees)

$.36 million: Stimulus funds

$20 million: Oregon lottery funds that will pay for six streetcars

In the past four years, the FTA has doled out more than $450 million in grants to 12 cities for streetcar projects, with the largest chunk going to Portland.  

Rep. Earl Blumenauer’s, D-District 3, in 2004 sponsored successful legislation funding streetcar projects. The led to a coalition of more than two dozen cities and various transit organizations to begin lobbying Washington, D.C., to fund streetcars. 

“It’s simple: this streetcar revival means greater mobility and more American jobs,” U.S. Secretary of Transportation Ray LaHood said in a January post on his blog, Fast Lane. “DOT will continue to improve public transit services by supporting these critical projects that create jobs today and livable communities and economic redevelopment tomorrow. “

And many are looking to Portland as the model.

“A lot of eyes are on Portland, yes,” Anderson said. “The success we’ve seen with our existing line has continued to draw visitors.”

Portland officials point to the 2.4 million square feet of planned and potential development in the area as a success of the Streetcar Project.

But who is tracking use, and who’s determining whether the project is a success?

Anderson said the city looks at ridership, which fell from 3.96 million riders in fiscal 2011 to 3.70 million in fiscal 2012, which ended June 30, according to PBOT documents. Much of the funding for the streetcar operations comes from the city and TriMet, and the reduction from both means slower cars and fewer drivers than planned, according to minutes from the Portland Streetcar Citizens Advisory Committee.

Charles argues the fascination behind streetcars is more about fun toys than practical transportation.

 “You have to keep asking, ‘What’s the point?’” he said. “If every city in the country follows suit, you will see a vast destruction of wealth.”

Contact Shelby Sebens at Shelby@NorthwestWatchdog.org, or follow her on Twitter @ShelbySebens. For more Northwest Watchdog updates, visit Facebook and Twitter.