Three Visionary Real Estate Developers and the Downtown LA Streetcar

The demand for federal transit funding is so great in the U.S. that getting a project through the funding queue is a decades-long process. To give you an idea: 37 states have proposed 400 projects worth $250 billion, according to a recent report by the national nonprofit Reconnecting America, and at the current rate of federal investment building these projects would take 77 years.

The $100 million downtown LA streetcar is a newcomer to this game, and has to get in line and wait its turn – unless it attracts significant private investment, which can boot it to the front of the line and open up all kinds of funding streams. That makes last week’s fundraiser at LA Live a significant milestone.

The event at the Target Terrace was hosted by LA City Councilmember Jose Huizar, with Eli Broad, Rick Caruso and AEG CEO Tim Leiwecke, and attended by LA City Councilmember Jan Perry as well as a host of major property owners and reps from the downtown business improvement districts. Governor Schwarzenegger sent someone, as did Congresswoman Lucille Roybal-Allard, a longtime downtown streetcar champion. Enough money was raised to keep the nonprofit LA Steetcar Inc. in the business of moving the streetcar project forward during these lean years.

Modern streetcars in other cities have won significant private investment. Property owners along Seattle’s new South Lake Union Trolley (yes, she’s a SLUT) line paid for half the $52 million pricetag, massive development has continued along that line despite the recession, and the city has already planned more lines. Property owners in Portland, where the streetcar attracted $3.5 billion in private investment along the line, also raised significant funding – and almost 40 percent of the cost of the first segment came from increased parking fees – and have even traveled to other cities to preach the streetcar gospel.

Michael Powell, proprietor of the Powell’s Books in Portland, calculated the property owner benefits this way at a national streetcar workshop in LA two years ago: The number of pedestrians in the crosswalk in front of his store numbered three an hour before the line opened in 2001, he said. But when he counted again in 2008 there were 938 pedestrians. Meantime, 400 new businesses had opened along the streetcar line, 90 percent of which were locally owned – the vast majority owned by women and ethnic minorities. And in the meantime, he said, his property values had increased more than tenfold.

That kind of information snapped downtown property owners to attention, and they were all in attendance at LA Live, including Steve Needleman, owner of the Anjac Fashion empire and Orpheum Theater, and Michael Dilijani, owner of the LA Theatre – both of whom are LA Streetcar Inc. board members – as well as Andrew Meieren, designer and owner of the Edison Bar and new owner of the historic Clifton’s Cafeteria. The streetcar would run past their properties on Broadway, connecting LA Live to Broad’s new art museum atop Bunker Hill.

Consider the impact of a streetcar in combination with the downtown Regional Connector, due to open in 2019: Downtown LA could become a real downtown again. “Where does growth and major activity happen in cities? Around transit because there is no room for cars,” noted LA Metro’s Diego Cardoso, one of many enthusiastic transit builders in attendance at the LA Live event. LA Metro’s Robin Blair says once funding for the streetcar is secured building the line would take only two years.

Streetcar stakeholders do the calculus this way: They hope downtown property owners will agree to pony up half the cost of the streetcar and note that another $10 million has been committed by the CRA. And they believe they can get the remainder from the feds and other state and local sources. The streetcar is in LA Metro’s $40 billion long-range plan, which makes $25 million seem like chump change.

The streetcar is currently undergoing environmental analysis, and LA Metro’s Blair said much of the new route could be overlaid on old streetcar lines. It’s important to keep repeating – for those who insist that LA was built up around the car – that LA was actually built up around what was the largest electric trolley system in the U.S., with 6,000 trains running on 144 routes into four counties. It should also be pointed out that in those days, transportation averaged about 3 percent of the household budget, compared to an average of 19 percent today.

The Obama Administration looks much more favorably upon streetcars – they’re urban and urban areas tend to be Democratic – than the Bush Administration. Since Obama took office the US Department of Transportation has invested $258 million in streetcar projects in Portland, Tucson, Dallas, Cincinnati, Charlotte, St. Louis and Fort Worth.

Will the LA streetcars return? “The hosts came together because they know a good investment when they see it,” said Jessica Wethington McLean, executive director of Huizar’s Bringing Back Broadway Initiative. “They know a great downtown will make the city ­– and the region – stronger.” Added LA Streetcar Inc.’s Dennis Allen, “Look at it this way: Three of the most visionary minds in the real estate business are hosting this fundraiser, and it’s attended by important downtown property owners, business owners and real estate developers. Clearly the streetcar is going to be built. The only question is, ‘How soon?’”

  • We really need to get this streetcar built. Yes, we also need the Regional Connector and the Westside subway and LAX AND Crenshaw, but I think this one will make a huge difference as well.

    I even like the new, modern streetcar look. Sure, it would be nice to get some PCC cars as well, but San Francisco seems to have gobbled up all of the remaining one and anything older than a PCC is going to be a pain in the butt to keep running.

    Besides, the newer low floor streetcars do seem very senior citizen/ wheelchair/ bicycle friendly.

  • Once the Broadway streetcar goes online, there will be neighborhoods all over Southern California unlikely to ever see grade separated rail that will be clamoring for their own.

  • @ Dan Wentzel: I see no problem with that. Plenty of places didn’t make the 30/10 list.

    San Pedro is not high on the HRT or LRT list, but it has a streetcar.

    Streetcars at Venice Beach! Streetcars at Redondo Pier! Streetcars in Orange County! From Burbank to Griffith Park!

  • I love that vision, James.

    I work with someone on the Palms Neighborhood Council.

    He isn’t excited by a Venice bus only lane, but he was excited about the prospect of a Venice Streetcar that ran from the beach to the Expo Line to the northern Extension of the Crenshaw Line. Streetcar lanes can easily be turned into transit only lanes that buses can ride on as well. (As much as the BRU will call you racist for stating the obvious, people of all races, ethnicities and classes tend to prefer the experience of riding on a rail line to the experience of riding on a bouncy bus.)

    I was in Seattle this past weekend and I’m always impressed by how the new light rail and the buses share lanes through the downtown transit tunnel.

    Let a thousand streetcars bloom in Los Angeles County.

  • Will the LA streetcar cost only $100 million? Seems like a really low ball price… I hope it is true. If it is that cheap, I’m sure they can find enough private funding to build it even if the Feds don’t kick in some money.

    There are lots of other corridor in LA that can use this kind of cheap streetcar:

    Main St Santa Monica-Venice Blvd-Downtown Culver City Expo line station

    Redundo Beach Pier-Hermosa Beach Pier Ave-Manhattan Village-El Segundo Green line station-Downtown El Segundo

    The Grove/Farmers Market-3rd st-Beverly Center-Cedar-San Vicente Pink line station-Sunset Blvd-Fairfax-The Grove (loop)

  • Carter R

    If a Streetcar is what it takes to convert personal auto lanes into transit lanes, then I’m for it. But I’m still not wholly convinced streetcars are a substantially better mobility option than doing buses in bus only lanes. And we already have all the rolling stock for the latter.

  • For the cost of one grade separation on Valley Blvd. in El Sereno, we could have had a downtown streetcar. Huizar got that grade separation because the mayor pulled some strings in the MTA’s call for projects. Come on Huizar, one more time!

  • At the risk of being censured for unconventional thought, does downtown LA really need a streetcar?

    According to that video, cars will be able to drive in the same lane, so speed wise, it should be about the same as a bus. Downtown LA is the nerve center of the county’s transit system. DASH buses currently have routes similar to the streetcar, frequent service and low fares. If private investors want to do it, great, but I’m just not seeing how this should be a top priority, honestly.

    I wish we saw this kind of enthusiasm for improving transit in the areas where it really does need improvement, where you have to wait half an hour or more between buses on the single bus route that comes by with no shade and no place to sit. That’s why more people aren’t on transit in LA.

  • The streetcar will be transformative.

    However, it should run in a transit only lane.

  • Will Campbell

    I swear to gawd I will choke up with joy the day streetcars return to downtown.

    But given how fully dismantled LA’s extensive and embedded trolley system was I did find the comment made in the video about the “permanence of rail” a little curious. If there’s one thing this city teaches you, it’s that nothing’s permanent.

  • @ Chewie

    DASH has frequent service? I think that’s news to anyone that relies on DASH to get around in Downtown. Low fares… true but the service also stops at 5 PM, precisely the time when people working in the office or living in the lofts would actually use it.

  • The permanence of rail comment has to do with the effects the street cars is Portland’s Pearl District had. This isn’t about joe shmoe saying “I like me sum streetcars”. A bus line can be changed in the blink of an eye. A real estate developer can bank on a streetcar.

  • @ Bzcat

    I admit some of the Downtown DASH routes stop early (but none of them at 5pm on weekdays) and lack weekend service, but they do run frequently. Check the schedules right here:

    http://www.ladottransit.com/dash/

    Downtown LA has more track in the ground than any other part of Southern CA. The incentives for development are already there in that respect. If electricity is the issue, you could probably put in trolley buses cheaper (no need to modify the street).

    Whatever, I just wanted to say that I’m jealous of how good transit in DTLA is already. There are a lot of places that are getting left out of the party on basics like frequent bus service, while downtown is getting tricked out :)

  • Will Campbell

    @ubrayj02 your contrast between the lasting natures of rail lines versus those of bus lines puts the statement about the permanence of rail made in the video in a broader and better context. If the speaker in question made that same point in the clip I apologize for “nut lisssnin bettur,” and if he didn’t my regrets for not “deesyferin itz undulayin meenin.”

  • To help shed some light on the subject, I recently wrote a short essay synthesizing the existing quantitative evidence suggesting a relationship between streetcars and economic development: http://www.oaklandstreetcarplan.com/1/post/2010/10/streetcars-and-economic-development1.html

  • Andrew

    Property Development is an art in itself, and one can learn a lot from these 3 as the video just showed as an example! ATTENTION here, amateur property managers!

  • Just found this. I’m from Manchester, UK where the streetcars (we call them trams) have transformed the areas they go through. Property prices close to each stop have rocketed and they have acted as hubs for new businesses. The Metrolink project has  now been expanded with 4 additional routes because it has been such as success. I think you will see similar benefits.

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