Streetcar Costs Expected to be Much Lower than Reported

Streetcar Costs Expected to be Much Lower than Reported

Report highlights possible public/private partnership to run streetcar–cost figures will not be as high as reported

LOS ANGELES (Sept. 11, 2013) — Los Angeles City Councilmember José Huizar said today that the utility conflict and relocation costs for the Downtown L.A. Streetcar will be much lower than estimated figures issued in a report by the City Administrative Officer (CAO) and other city departments.

The report was heard in two City committees this week, Budget & Finance and Transportation, and represents a worst-case scenario regarding municipal utility costs. It bases its estimates on the streetcar project bearing the full cost for relocation of 100 percent of all potential conflicts, including some water infrastructure that dates back to the 1890s, which should be replaced as a matter of course. No engineering solutions have been applied to avoid and eliminate conflicts, and the estimate was generated without the benefit of a deep analysis to determine which items on the long list of potential conflicts are indeed actual conflicts. A project manager and utility coordinator are being brought on for this purpose in the coming weeks, and work will continue until at least the spring.

During this time, Councilmember Huizar will work with LADOT, BOE, municipal utility providers and the contracted firms, along with the City’s streetcar partner, non-profit Los Angeles Streetcar Inc. (LASI). Utility costs are expected to be reduced dramatically during the process. Councilmember Huizar emphasized the benefits of the streetcar.

“Studies have shown that the Downtown Los Angeles Streetcar is going to bring more than $1 billion in economic development in and around the line, create more than 9,000 jobs and be at the top of the list for ridership when compared to light-rail lines in the City and other streetcars throughout the nation,” said Councilmember Huizar. “While cost is certainly something we will continue to monitor closely, we have every expectation that the real-world costs will be much lower than estimates included in the recent report. Given all that we will get back for our investment, the Downtown Los Angeles Streetcar will be a welcomed shot in the arm for the City and the region’s economic and transit vitality.”

The wide-ranging estimates for utilities as listed in the report are simply a starting point in order to start the discussion with the Federal Transit Administration (FTA) for federal funding. The Downtown L.A. Streetcar is in the midst of its environmental review, and will be seeking entrance into the project development phase of the FTA Small Starts program. The purpose of project development is to refine project details and identify costs with substantially more certainty than is expected of projects at this early stage. There is no requirement that any potential funding gap be resolved before entering project development. FTA will not grant federal funding for projects until all local funding is resolved.

The initial streetcar construction cost estimate of $125 million was generated several years ago based on an average per mile cost for streetcar construction in other cities, as virtually no engineering work had been completed for the project at that time. Since then, construction costs have escalated, estimates have been adjusted to year of construction per city practices, additional federal requirements have been factored in, and some more information has been obtained about project engineering. Due to these factors, construction costs are now estimated to be $153 million to $162 million, not including utilities. Worst-case scenario utility conflict costs listed in the report – $79.3 million to $153 million – are entirely preliminary, and will not be definitively estimated until further in-depth analysis and engineering is completed over the next six months. Actual costs will be substantially less than even the low-end of this worst-case scenario.

The report also recommends considering a public/private partnership in the streetcar's design, construction, maintenance and operation, which could provide a significant cost savings to the City through private capital contributions and project investment. These potential models, called Design-Build-Operate-Maintain (DBOM) or Design-Build-Finance-Operate-Maintain (DBFOM) models, could be used to resolve gap-funding in the streetcar project.

The report further recommends a Construction Management/General Contractor construction method, which offers early oversight and cost efficiencies for the proposed project.

About the Streetcar

An AECOM study found that the Downtown L.A. Streetcar will generate 9,300 new jobs, $1.1 billion in new development, $24.5 million in new annual tourism and consumer spending, and $47 million in new city revenue – all above projections for Downtown’s future without a streetcar.

A Fehr & Peers study projects opening month ridership for the Downtown L.A. Streetcar will be more than 6,000 riders daily, which means the Downtown L.A. Streetcar could outpace the opening month per mile ridership of METRO’s Orange Line, Gold Line, Green Line and Blue Line, and could double or triple current ridership on four of the five best performing existing LADOT Dash lines in Downtown L.A.

The Downtown L.A. Streetcar would also outperform actual opening month ridership of streetcar systems in Portland, Seattle and Tacoma, as well as those projected for other top cities planning modern streetcar systems, including Charlotte, Salt Lake City, Tucson and Atlanta.

In December, voters in and around the scheduled route opted to tax themselves $62.5 million to support local funding for the Streetcar. And in March, the Los Angeles City Council approved a 30-year operational plan for the proposed Downtown Los Angeles Streetcar. The plan identifies and commits funds, which could total $294 million from non-general fund resources over three decades, to cover ongoing streetcar operations and maintenance of the proposed Downtown L.A. Streetcar system.

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Streetcar Costs Expected to be Much Lower than Reported

Report highlights possible public/private partnership to run streetcar–cost figures will not be as high as reported

LOS ANGELES (Sept. 11, 2013) — Los Angeles City Councilmember José Huizar said today that the utility conflict and relocation costs for the Downtown L.A. Streetcar will be much lower than estimated figures issued in a report by the City Administrative Officer (CAO) and other city departments.

The report was heard in two City committees this week, Budget & Finance and Transportation, and represents a worst-case scenario regarding municipal utility costs. It bases its estimates on the streetcar project bearing the full cost for relocation of 100 percent of all potential conflicts, including some water infrastructure that dates back to the 1890s, which should be replaced as a matter of course. No engineering solutions have been applied to avoid and eliminate conflicts, and the estimate was generated without the benefit of a deep analysis to determine which items on the long list of potential conflicts are indeed actual conflicts. A project manager and utility coordinator are being brought on for this purpose in the coming weeks, and work will continue until at least the spring.

During this time, Councilmember Huizar will work with LADOT, BOE, municipal utility providers and the contracted firms, along with the City’s streetcar partner, non-profit Los Angeles Streetcar Inc. (LASI). Utility costs are expected to be reduced dramatically during the process. Councilmember Huizar emphasized the benefits of the streetcar.

“Studies have shown that the Downtown Los Angeles Streetcar is going to bring more than $1 billion in economic development in and around the line, create more than 9,000 jobs and be at the top of the list for ridership when compared to light-rail lines in the City and other streetcars throughout the nation,” said Councilmember Huizar. “While cost is certainly something we will continue to monitor closely, we have every expectation that the real-world costs will be much lower than estimates included in the recent report. Given all that we will get back for our investment, the Downtown Los Angeles Streetcar will be a welcomed shot in the arm for the City and the region’s economic and transit vitality.”

The wide-ranging estimates for utilities as listed in the report are simply a starting point in order to start the discussion with the Federal Transit Administration (FTA) for federal funding. The Downtown L.A. Streetcar is in the midst of its environmental review, and will be seeking entrance into the project development phase of the FTA Small Starts program. The purpose of project development is to refine project details and identify costs with substantially more certainty than is expected of projects at this early stage. There is no requirement that any potential funding gap be resolved before entering project development. FTA will not grant federal funding for projects until all local funding is resolved.

The initial streetcar construction cost estimate of $125 million was generated several years ago based on an average per mile cost for streetcar construction in other cities, as virtually no engineering work had been completed for the project at that time. Since then, construction costs have escalated, estimates have been adjusted to year of construction per city practices, additional federal requirements have been factored in, and some more information has been obtained about project engineering. Due to these factors, construction costs are now estimated to be $153 million to $162 million, not including utilities. Worst-case scenario utility conflict costs listed in the report – $79.3 million to $153 million – are entirely preliminary, and will not be definitively estimated until further in-depth analysis and engineering is completed over the next six months. Actual costs will be substantially less than even the low-end of this worst-case scenario.

The report also recommends considering a public/private partnership in the streetcar's design, construction, maintenance and operation, which could provide a significant cost savings to the City through private capital contributions and project investment. These potential models, called Design-Build-Operate-Maintain (DBOM) or Design-Build-Finance-Operate-Maintain (DBFOM) models, could be used to resolve gap-funding in the streetcar project.

The report further recommends a Construction Management/General Contractor construction method, which offers early oversight and cost efficiencies for the proposed project.

About the Streetcar

An AECOM study found that the Downtown L.A. Streetcar will generate 9,300 new jobs, $1.1 billion in new development, $24.5 million in new annual tourism and consumer spending, and $47 million in new city revenue – all above projections for Downtown’s future without a streetcar.

A Fehr & Peers study projects opening month ridership for the Downtown L.A. Streetcar will be more than 6,000 riders daily, which means the Downtown L.A. Streetcar could outpace the opening month per mile ridership of METRO’s Orange Line, Gold Line, Green Line and Blue Line, and could double or triple current ridership on four of the five best performing existing LADOT Dash lines in Downtown L.A.

The Downtown L.A. Streetcar would also outperform actual opening month ridership of streetcar systems in Portland, Seattle and Tacoma, as well as those projected for other top cities planning modern streetcar systems, including Charlotte, Salt Lake City, Tucson and Atlanta.

In December, voters in and around the scheduled route opted to tax themselves $62.5 million to support local funding for the Streetcar. And in March, the Los Angeles City Council approved a 30-year operational plan for the proposed Downtown Los Angeles Streetcar. The plan identifies and commits funds, which could total $294 million from non-general fund resources over three decades, to cover ongoing streetcar operations and maintenance of the proposed Downtown L.A. Streetcar system.

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