South Lake Union streetcar plan hijacks the budget

Although a final vote will come later, the Seattle City Council just approved legislation allowing Mayor Greg Nickels to move ahead with planning for a streetcar in South Lake Union. Despite a valiant attempt by council members Richard Conlin, Nick Licata, and Peter Steinbrueck to bar use of city funds for the streetcar, other council members overrode them. The door was therefore left open for a huge hit on the city budget. What's more, this project puts bus service to our neighborhoods at risk.

The full cost of the streetcar is currently estimated at $50 million, with an annual operating cost of $1.5 million. If Nickels has his way, abutting property owners would be required to pay half the construction costs through creation of a Local Assessment District (LID), leaving taxpayers on the hook for the rest. As for annual operating costs, Nickels will likely seek not only use of general fund dollars but will most likely also propose trading away future bus services to help fund the deal. This would include any portion of the 20,000 new bus hours waiting to be put into service from now until 2006 that Meto promised the city. In return for the hours swap, Metro would assume operation of the streetcar.

Council members Conlin and Licata were able to secure a special benefits study of the potential amount property owners in the South Lake Union area would pay. Also, Conlin and Licata restricted the mayor to a plan tapping only "new sources" of city funds and "new bus service." However, these terms were not defined and therefore could mean anything the council wants later on down the legislative road.

Unfortunately, no council member questioned the wisdom behind tapping into millions of limited state and federal dollars for the streetcar project. The council gave no critique even when faced with solid research, compiled by their own staff, that clearly shows the streetcar serves no real need: There are currently 19 bus routes serving South Lake Union. The council's study also states the streetcar's costs will be 30 percent more than bus service. This will drain away millions of limited city, state and federal dollars from a huge backlog of transportation needs, which are currently estimated at four billion dollars regionally and nearly a billion dollars city-wide.

The final decision of whether the city will build the streetcar, and who will pay for it, will be made later. However, the community lost a crucial opportunity up-front to block the use of public funds for the streetcar while simultaneously ensuring the benefiting developers foot the bill. More importantly, we lost the chance to send a strong signal to Nickels concerning the rest of his South Lake Union agenda.

The streetcar project is only the tip of the iceberg. The mayor will likely ask the council to approve his plans for a $170 million re-working of Mercer Street to make the South Lake Union area more "pedestrian friendly" and "conducive to biotech development." Additionally, Nickels wants to spend another $20 to $30 million for road improvements along Westlake and Terry avenues. According to a council staff analysis and a transportation consultant's report, none of these changes will significantly reduce congestion or improve traffic flows through the area, but they will divert traffic away from streets abutting Paul Allen's properties.

To pay for all of this, the Mayor already is exhausting what few chips the city has with federal and state government to cover significant portions of the cost. He also will make a major assault on general fund sources. There is a plan to raise parking meter fees at least in South Lake Union and divert them from the general fund. We also have seen city documents indicating the mayor and Vulcan are discussing a plan to create a new public development authority like Sound Transit or the Port just for South Lake Union. This new agency could be empowered with the ability to raise taxes or capture a share of existing amounts earmarked for the city's general fund.

The mayor has more up his sleeve. His planners are working on creating a "growth fund" for South Lake Union that would operate like a "tax increment" district, wherein all or most future tax revenues generated in South Lake Union, instead of going into the general fund, would be diverted to pay for the streetcar and the rest of mayor's South Lake Union agenda. Initially, the mayor would ask the council to approve use of councilmanic bonds to finance these items and then earmark for 10 or 20 years all future tax revenue generated in South Lake Union to repay the bonds.

A growth fund is nothing more than a stealth attack on the general fund and the city's tax base. High-growth areas like South Lake Union carry enormous spin-off impacts on the city's infrastructure and make huge demands on general city-wide services. Instead of helping cover these budget requirements, all future tax revenues from SLU are diverted to pay for pet projects on the mayor's plate for that one neighborhood. And what happens when other developers able to curry favor with councilmembers and the mayor also ask for a growth fund to pay for their schemes in Downtown or Pioneer Square? Increasingly the burden of covering our city's aggregate general-fund requirements will fall on poor communities like Southeast Seattle. It also would mean even fewer city dollars would be left over for these areas that already are last in line for services needed in their communities.

Over nine million in tax dollars have already been wasted on planning for the streetcar and other South Lake Union street "improvements." Twenty-five key staff members from all departments and countless consultants and analysts meet weekly (100 times in the last two years) to assist Vulcan in realizing their South Lake Union dreams. In the meantime, cuts in public safety have led to increased gang activity in southend neighborhoods, communities go without sidewalks, street lights, and crosswalks for their kids or other basic services, unemployment skyrockets among youth and people of color, and the homeless crowd our shelters.

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