CHARLOTTE, N.C. -- Charlotte’s controversial streetcar extension appears to have a good chance of being approved after new City Manager Ron Carlee said Monday the city could pay for it without a property tax increase.
Carlee’s plan for the $126 million streetcar extension calls for the federal government to pay for half of the construction costs, with the city using surplus money to cover the rest. If the second phase of the streetcar is approved, the city would have in five years a 4-mile line from Johnson C. Smith University, through uptown, and to the Elizabeth neighborhood at Hawthorne Lane.
The streetcar has divided the City Council for more than a year, with six members either against it, or wary of using property taxes to pay for it. But Mayor Pro Tem Patrick Cannon, who has been an opponent, said after the meeting he could support Carlee’s plan.
“I’m in a much better place today,” said Cannon, a Democrat who is considering a run for mayor this fall.
By ruling out a tax increase, Cannon said the city would “protect our seniors and those can’t afford to pay.” He also said that the money used for the streetcar hasn’t been designated for other projects.
If Cannon supports Carlee’s plan, the streetcar would likely have the six votes needed to move forward.
After the project languished for nearly a year, Carlee rebranded the streetcar as the CityLynx Gold Line, to tie it to the city’s light-rail line, the Lynx. His plan calls for the city to apply to the federal government for $63 million, possibly from the Federal Transit Administration’s New Starts program.
Charlotte could soon be in a favorable position when seeking federal dollars. Mayor Anthony Foxx, a streetcar supporter, has been nominated by President Obama to be U.S. transportation secretary.
Foxx didn’t attend Monday’s meeting. His press secretary said he was in Washington D.C.
If Charlotte is awarded a federal grant, Carlee said the city would cobble together $63 million from a number of places. The city would tap money they haven’t spent from previous capital programs ($25 million); business corridor revitalization money ($13.4 million); an economic development reserve ($5 million); and savings from previous transportation projects ($9.7 million).
No tax increase required
During the presentation, Carlee went to great lengths to emphasize that the CityLynx Gold Line will not require a property tax increase. But the money that would be used to pay for the streetcar was funded, in part, from property taxes.
Some of the streetcar money would come from what the city calls a Pay-As-You-Go fund. More than 80 percent of that comes from money other than property taxes.
Some of the money would come from the city’s debt fund, which pays off bonds. Nearly 60 percent of that comes from property taxes.
Democrat Michael Barnes, who voted against the streetcar last year, pressed Carlee on what would happen if Charlotte doesn’t get federal help.
“If we couldn’t get federal funds, I wouldn’t recommend using these funds,” he said.
After the meeting, Barnes declined to comment on the proposal.
Council members voted to send the proposal to the Metropolitan Transit Commission on May 22. The MTC is the governing body for the Charlotte Area Transit System and the half-cent sales tax.
If the MTC is OK with the proposal, Carlee wants City Council to vote on the plan May 28.
Monday’s meeting was free of the strife that has dominated streetcar discussion’s for the last year.
But the issue of property taxes could resurface.
Council members are considering a 7.25 percent property tax increase for $816 million of capital projects, including roads, bridges, sidewalks, affordable housing and police stations. If some of the $63 million were diverted to the new capital program, it’s possible the tax increase could be smaller.
Part of larger plan
The city recently started construction of the first leg of the streetcar, which will run 1.5 miles from Time Warner Cable Arena to Novant Health Presbyterian Medical Center.
Former City Manager Curt Walton proposed last spring using the Capital Improvement Program to build a second phase of the streetcar line. But council members voted down that capital budget, and Foxx later vetoed a smaller CIP that didn’t include the streetcar. Months of bickering ensued.
The long-term plan is for the streetcar line to run from the Rosa Parks Transit Center on Beatties Ford Road to the site of the old Eastland Mall on Central Avenue. The city also wants to build a streetcar extension on Wilkinson Boulevard to the airport.
While the light-rail line has grown to have wide acceptance in the city, the streetcar is often criticized because it operates with the same speed as a bus.
Carlee and other staff members spent much of their presentation trying to convince council members of the project’s merits.
They said the project will spark economic development. They also said it will be an important connection for students at a number of universities or colleges along the line, including Johnson C. Smith University, Johnson & Wales University; UNC Charlotte’s uptown campus; and Central Piedmont Community College.
“This rail project is not a toy,” Carlee said. “It’s an integral part of our transportation (program).”
Because the city no longer has room to annex new areas, Carlee said the streetcar can bolster the tax base in older, less affluent neighborhoods.
“We will be a growing community or a dying community,” he said.
The 4-mile line will cost $3.3 million a year to operate. The city said the operating costs could be paid for through a combination of ticket sales, advertising and naming rights. They also said the city could create special taxing districts along the line, with the new tax money flowing to the streetcar.