A nonprofit street railway company could be created under a package of pending legislation paving the way for a $103 million, private-sector-backed light-rail system in Detroit.
As envisioned in one set of bill drafts, for which state Rep. Bert Johnson, D-Detroit, is the lead sponsor, the street railway company could build, own and operate the system.
The company could acquire property, including through gift, purchase or condemnation, and could borrow money and issue bonds.
The legislation would allow the Michigan Department of Transportation, at the request of the railway company, to establish a “transit development finance zone.” The zone would use Michigan’s tax increment financing law to capture future increases in property taxes to pay for expenses of operating the railway, as well as other designated purposes.
The zone could include property within one mile of the railway system, and stretch through multiple municipalities. Backers of light rail plans have touted studies that show other cities seeing millions invested near such routes.
Another bill in the package would allow the state to annually appropriate money to the railway system, in an amount representing the difference between the annual operating expense of the system and revenue received by the street railway, including the tax increment revenues.
Johnson said initial estimates are for a state appropriation of $8 million to $9 million, “but in all practicality, we are probably talking about something much less.”
MDOT could also spend money for purposes that include maintaining or improving the railway.
Sen. Jason Allen, R-Traverse City, is sponsoring a similar package of legislation that he said could be introduced on Thursday or following the Senate’s return to session after the November elections.
He said some issues, like ownership, rights of way and the state support, need to be addressed further through the committee process.
“Our goal is to give this very good hearings and work to find a solution,” Allen said.
“We know that these rail corridors have created renaissances,” in most of the communities where they’ve been located, he said.
Allen also said a goal is “to come up with a replicable plan, which means that we can work it in Detroit, or Grand Rapids. We’re open to input from anyone. If this tool can work in a variety of communities in the state, that is one of our objectives.”
He said the legislation is critical, both from the perspective of energy costs and the economic redevelopment of Detroit’s Woodward Avenue corridor.
Johnson said that for the Detroit region to accomplish much-voiced goals, such as economic revitalization and attracting and retaining young professionals and companies, “then we need to get our act together as it relates to mass transit.”
He also said that the Woodward piece could be the genesis for a mass transit system throughout the entire city, connecting with other communities and counties.
On that level, the legislation could provide the matching funds needed for $100 million in earmarked federal funds that could support a full mass transit plan, Johnson said.
He said he expects there will be joint House-Senate committee hearings on the legislation, and both he and Allen said they hope to move the bills through the Legislature and secure approval in the “lame-duck” session between the Nov. 4 election and year-end.
“Our goal is to work through these issues, and my hope is that we are able to find agreements, and that we will be able to have it done by the end of the year,” Allen said. “And I’m optimistic on that.”
The private-sector plan, known as The Regional Area Initial Link (TRAIL), would be a 3.4 mile light-rail line in the Woodward Corridor from Hart Plaza to Grand Boulevard, running past the major business, cultural, medical, educational and sporting destinations in the city.
The private plan has been closely guarded since first reported on by Crain’s in February.
Peter Karmanos Jr., founder of Detroit-based software maker Compuware Corp., and Mike Ilitch, owner of the Detroit Tigers and Detroit Red Wings and co-founder of Little Caesars Pizza, are the most recent names confirmed among the cadre of influential backers that have committed undisclosed sums to construction of the private Woodward loop.
They join Penske Corp.’s Roger Penske and Quicken Loans/Rock Financial found Dan Gilbert as those known to back the proposal.
In July, the Wayne State University Board of Governors authorized a $3 million, 10-year deal to advertise on one of the line’s 23 stations.
Up to $50 million from the Troy-based Kresge Foundation has also reportedly been pledged to the project, which is believed to have nearly 90 percent of its funding lined up.
The private proposal is separate from the Detroit Department of Transportation’s $372 million proposal to put center-of-street light rail on Woodward that would extend to Eight Mile Road. That plan remains in the study phase.
Crain’s reporter Bill Shea contributed to this story.
As envisioned in one set of bill drafts, for which state Rep. Bert Johnson, D-Detroit, is the lead sponsor, the street railway company could build, own and operate the system.
The company could acquire property, including through gift, purchase or condemnation, and could borrow money and issue bonds.
The legislation would allow the Michigan Department of Transportation, at the request of the railway company, to establish a “transit development finance zone.” The zone would use Michigan’s tax increment financing law to capture future increases in property taxes to pay for expenses of operating the railway, as well as other designated purposes.
The zone could include property within one mile of the railway system, and stretch through multiple municipalities. Backers of light rail plans have touted studies that show other cities seeing millions invested near such routes.
Another bill in the package would allow the state to annually appropriate money to the railway system, in an amount representing the difference between the annual operating expense of the system and revenue received by the street railway, including the tax increment revenues.
Johnson said initial estimates are for a state appropriation of $8 million to $9 million, “but in all practicality, we are probably talking about something much less.”
MDOT could also spend money for purposes that include maintaining or improving the railway.
Sen. Jason Allen, R-Traverse City, is sponsoring a similar package of legislation that he said could be introduced on Thursday or following the Senate’s return to session after the November elections.
He said some issues, like ownership, rights of way and the state support, need to be addressed further through the committee process.
“Our goal is to give this very good hearings and work to find a solution,” Allen said.
“We know that these rail corridors have created renaissances,” in most of the communities where they’ve been located, he said.
Allen also said a goal is “to come up with a replicable plan, which means that we can work it in Detroit, or Grand Rapids. We’re open to input from anyone. If this tool can work in a variety of communities in the state, that is one of our objectives.”
He said the legislation is critical, both from the perspective of energy costs and the economic redevelopment of Detroit’s Woodward Avenue corridor.
Johnson said that for the Detroit region to accomplish much-voiced goals, such as economic revitalization and attracting and retaining young professionals and companies, “then we need to get our act together as it relates to mass transit.”
He also said that the Woodward piece could be the genesis for a mass transit system throughout the entire city, connecting with other communities and counties.
On that level, the legislation could provide the matching funds needed for $100 million in earmarked federal funds that could support a full mass transit plan, Johnson said.
He said he expects there will be joint House-Senate committee hearings on the legislation, and both he and Allen said they hope to move the bills through the Legislature and secure approval in the “lame-duck” session between the Nov. 4 election and year-end.
“Our goal is to work through these issues, and my hope is that we are able to find agreements, and that we will be able to have it done by the end of the year,” Allen said. “And I’m optimistic on that.”
The private-sector plan, known as The Regional Area Initial Link (TRAIL), would be a 3.4 mile light-rail line in the Woodward Corridor from Hart Plaza to Grand Boulevard, running past the major business, cultural, medical, educational and sporting destinations in the city.
The private plan has been closely guarded since first reported on by Crain’s in February.
Peter Karmanos Jr., founder of Detroit-based software maker Compuware Corp., and Mike Ilitch, owner of the Detroit Tigers and Detroit Red Wings and co-founder of Little Caesars Pizza, are the most recent names confirmed among the cadre of influential backers that have committed undisclosed sums to construction of the private Woodward loop.
They join Penske Corp.’s Roger Penske and Quicken Loans/Rock Financial found Dan Gilbert as those known to back the proposal.
In July, the Wayne State University Board of Governors authorized a $3 million, 10-year deal to advertise on one of the line’s 23 stations.
Up to $50 million from the Troy-based Kresge Foundation has also reportedly been pledged to the project, which is believed to have nearly 90 percent of its funding lined up.
The private proposal is separate from the Detroit Department of Transportation’s $372 million proposal to put center-of-street light rail on Woodward that would extend to Eight Mile Road. That plan remains in the study phase.
Crain’s reporter Bill Shea contributed to this story.
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