Mark_Griffin

A couple of issues that I have been chewing on…..

First, I am curious to see how much peoples’ interest in this issue wanes now that we don’t have an upcoming election. The problem is still there, and I would argue that we need a solution now more than ever. I think the only way that is going to happen is a consistent pressure and interest in this problem.

Second, the loss of the Monorail and the rejection of 912 appears to lend greater strength to the more-highway proponents over the mass transit proponents. The next big test will be the regional transportation package which will combine both. I don’t know if it will include Sound Transit money (for the Seattle/Northgate route), although I imagine it will.

Third, where will the money from the Monorail go? I will be surprised if they simply stop the tax. I anticipate an initiative that will shift it to the viaduct-tunnel.

Fourth, they are projecting that the population of Washington will increase by over 500,000 people in the next five years. That is the equivalent to adding a second City of Seattle in a five year period. If you figure 3/4 of those people will work full time jobs and half of the working people will work in Seattle or on the Eastside (I think that is a conservative estimate), my question is where do we put all these people? For those who think the answer is downtown high-rise condos, it is important to note that if all of the proposed towers in Seattle and Bellevue breakground and are built in the next five years, they will only add about 13,000 housing units (or about 5% of the total housing needed to absorb the 500,000 people moving in). If you think traffic is bad now, do you want to guess what will happen in five years when we add an additional 8% to the state population (mostly moving to Pierce and Snohomish counties, but commuting to Seattle and the Eastside)?

As a caveat, I received this in an email from some Monorail backer, but I do think that it is worth reading nonetheless.

Infrastructure Journal
24th October 2005
www.ijonline.com

Seattle Monorail Project—When Political Will Won’t

By Angus Leslie Melville

If you want a groundbreaking project to go ahead, then one of the most important ingredients in the recipe has to be political goodwill. And that is precisely where one of the US’s most interesting transport projects on the table right now falls down – writes Angus Leslie Melville.

The focus of the international transport industry is turned squarely on the US and expectations are high for project finance as well as numerous bond-financed design/build projects.

Seattle monorail is one of the few projects that you can pick out from the line-up of usual suspects where it is conspicuously failing to make it off the drawing board despite strong local support.

And the one thing that is acting as the biggest stumbling block is a fundamental lack of support from the mayor’s office.

It has already passed four public votes-each one with increasing majorities in its favour. It has a fully approved environmental impact study, the land has been acquired and right-of-way secured. So that’s all green light-go.

Now add into the equation that there is real need for an alternative, separate transport system to deal with mounting congestion problems.

The need to finance the alternative transport system is made all the more important with a petrol tax referendum in November that will most likely see the repeal of tax on fuel. And the city has no other source of funding other than `gas tax’ for transport improvement projects in the city.

You would imagine the metropolitan authority would be backing the project to the hilt, and you would think there would be serious concern over the cloud this puts on future large infrastructure projects in Seattle and Washington. After all, with Cascadia Monorail Company lined up to construct the 14-mile DBOM Green Line to enhance travel between downtown Seattle and its surrounding communities, the city has the opportunity for a near-term groundbreaking on one of the most exciting projects in the market today.

Led by Fluor, this consortium of more than 20 urban mass transit firms includes Hitachi, Mitsui, Alcatel, HDR Engineering, Howard S. Wright Construction, Hoffman Construction, RCI Construction Group, Atkinson Construction, as well as other Seattle and Washington state contractors and consultants.

That’s a lot of private sector goodwill-which is not being matched by the public sector. On the financial side, there is in place a revenue stream that is dedicated to the monorail project from the motor vehicle excise tax, which-to go elsewhere—would require a change to legislation.

To improve its chances of one day providing a new public transport system in Seattle, the agency responsible for the project has shortened the route, thereby bringing the price down.

But the crunch date for the project is 8 November when yet another ballot is being staged. If it passes again, it is going to leave the mayor in an awkward position as it is the only major transport project likely to go ahead in the near future—especially if the gas tax is repealed as well.

The project is financeable—the markets have said that they will sell the bonds as they can sell against he guaranteed index revenue stream which cannot be retired by legislation until the debt has been paid off. The debt is non-recourse so in addition to a major transportation improvement the city also accrues the benefits of sales taxes, increased property values and the improved ability to attract and maintain businesses without incurring any of the risk of having to pay back the debt.

One of the issues that seems to be holding up the project and causing the mayor’s office headaches is the tenor of deals. Word coming from the city’s administration is that 30-40 year debt is too long and the mayor does not want to burden the tax payer 30 years down the line.

This-while it outwardly appears to be a noble gesture-is not the way other cities view financing their transport projects these days. And when you compare these tenors with the 99-year concession for Chicago Skybridge, the length of the Seattle project rather pales into insignificance.

Most US cities and states have recognised their cash shortfall and are either paying long-term through tax-exempt bonds or longer concessions.

The project is ready to go, the contract is fully negotiated. All that has to be done is to renegotiate the contract to take into account the shortening of the alignment. If it fails the vote in November it is dead. But if it passes, it will be ready to move forward in January.

You will travel a long way before you find a transport project in the US that has more going for it than Seattle Monorail-but it needs the political will to get behind it. And if they need a case study of an urban transport system where project finance has worked to stiffen their resolve-all they need do is look north to the Richmond-Airport-Vancouver.

There appears no rational reason why the city would not support this project.

Are we missing something? Or is there a sinister plot at play for the city to engineer the cancellation of the project so that it can steal the motor vehicle excise tax to start paying for roads that it otherwise cannot afford?

Angus Leslie Melville

Editor

Infrastructure Journal

The Mayor has threatened to put an advisory ballot on the ballot because he does not have the authority to place a referendum that will kill the system. The Monorail Agency was created as a parallel group, with a board of directors that is heavily chosen by the City Council, the Mayor, and the elected board members. The only direct power that the City or the Mayor has over the Monorail is the granting of the right of way.

The reason that the City Council and Mayor are pushing the Monorail agency to place an initiative on the ballot, is that they are the only ones who can put forth an initiative that is binding.

The original Monorail referendum has a clause that allows the monorail to be overturned, but requires a much higher threshold than a normal referendum. That is why the last referendum tried to hamstring the monorail by denying them the right of way use, rather than directly overturning it. They couldn’t sum up the signatures to get an overturning of the monorail on the ballot.

I suspect that if the Monorail agency took the City to court for refusing to issue the right of way permits, that the City would likely lose. When an issue has been approved by ballot, it is awfully hard for a Mayor or City Council to subjectively decide not to withhold the permits.

It will be interesting to see how this plays out. The more time goes by, the less angry the public becomes about the initial contract fiasco and the more apprehensive they become about $3 per gallon gas prices (and little alternative transportation options).