You we’re gonna do that anyway, but I’ll be dropping by the Tara Servatius show tonite to talk about CATS’ plans for the North line. You know, the plan to grab property tax dollars in order to float debt to build the $373 million North line; the one the Metro Transit Commission is almost certain to rubber stamp in a few weeks.
Your homework for tonight is to read my Rhino Times piece (below) on the plan — which you should have done already. No more slacking off, however. This is crunch time, people.
The Rhinoceros Times
May 31, 2007CATS Eyes Property Tax Loot For Trains
By Jeff A. Taylor
Special to The Rhinoceros TimesSeveral recent developments suggest that Charlotte Area Transit System is stomping on the gas in its bid to build additional train lines and keep $70 million a year in half-cent transit tax revenue flowing from Mecklenburg County taxpayers to CATS.
First, as long predicted by anyone familiar with CATS’ belief in the magical power of trains, there is confirmation of a CATS rush to complete enough of the vaunted South Corridor light rail line so that trains might be up and running before the Nov. 6 election.
Earlier this year, Transit Czar Ron Tober and City Manager Pam Syfert hinted during a City Council meeting that a section of the South Boulevard rail line might be opened earlier than the projected Nov. 26 target. That was reaffirmed at Tuesday night’s council meeting, when Tober and Syfert again said a push was on to open a portion of the line by late October – or, for anyone keeping track, roughly one week before the November election and its likely referendum to repeal the half-cent sales tax for transit.
Syfert told councilmembers a partial, early opening of the line would depend on how many transit stations were ready to roll and how much time CATS would have to complete employee training. To date, CATS has looked at two early-opening options: One would have the rail line run to Woodlawn, the other to Arrowood.
In either event, Syfert said, any early launch date would largely depend on whether the elevated transit stations at Trade Street and Tyvola and Archdale roads, would be completed in time to allow for service testing and employee training. The current schedule, she said, calls for those stations to be finished by late September or early October. CATS will need until late June to determine whether work on those stations will finish on schedule.
An early launch of the South Corridor could give transit boosters looking to beat back a repeal of the transit tax some hype to take to the polls, if things go smoothly. The opposite, of course, also holds true: A botched opening of the South Corridor, even a snag or two, could add plenty of fodder to repeal proponents’ cannon heading into November’s election.
Still unknown is how much a “partial plan” of eight or so stations might cost CATS to operate, or exactly when the full 15-station line might be complete – or at what cost. As part of the transit update Syfert gave councilmembers Tuesday, she said the South Corridor is still hitting its re-revised budget of $463 million. But Tober also said a final figure probably wouldn’t be known until months after the rail line is finished.
In parallel with the early, partial-opening gambit for the South Corridor, CATS has also been accelerating its pitch to officials of the north Mecklenburg towns along I-77 for the $373 million North commuter rail line. The first phase of the project envisions 22 trains a day running down the 10-station line between uptown and Davidson.
Because CATS forecasts ridership at a relatively low 4,600 daily riders – I-77 currently handles some 77,000 cars a day – federal funding for the project is extremely unlikely. This has forced CATS to turn to tax increment financing (TIF) of the line. TIF assumes that added property tax revenue from development will be able to retire debt associated with that development – in this case trains – instead of using property tax generated by the development to pay for other local needs like schools, roads and public safety.
CATS will need to issue at least $76 million in TIF debt to be able to build the line, assuming the state kicks in 25 percent of the cost. CATS would begin issuing 30-year debt in 2009, a change from previous plans that envisioned no debt until 2013.
The pitch for the North rail corridor is needed now because the Metropolitan Transit Commission (MTC) will soon decide on whether to move ahead with design for the line. CATS has told MTC members that the North line is a slam-dunk, economic growth engine that will create millions of dollars in new property tax revenue for the towns – so much that CATS can take a chunk and the towns will not miss it.
So much for the notion that only repeal of the transit tax will force CATS to claim property tax money. CATS’ official plan assumes it will get future property tax money – and keep the half-cent money to boot.
In addition, CATS and its consultants claim some 83,000 new jobs will be created within a half-mile of the transit stations while the overall population in the corridor zooms to 250,000 by 2030. For comparison, Huntersville’s current population is around 40,000 and all of Mecklenburg County has about 425,000 jobs.Should current job growth trends continue, CATS is assuming about 12 percent of all jobs in Mecklenburg will be within a half-mile of the North commuter line. Further, the narrow North corridor would rival uptown’s high-rises as a job center. Uptown now has about 65,000 jobs and has added about 10,000 a decade in the recent boom times. Even assuming that pace holds up, uptown would only have about 85,000 jobs come 2030.
Incidentally, recall that CATS previously said that about 100,000 jobs were needed in uptown for the current train-building plan to work. Now it would appear that those jobs are being double-counted up I-77 in order to make North line financial assumptions work.
For its TIF lifeline CATS is relying on Cherokee Investment Partners, a Triangle-area private equity group that has been involved in major transit-oriented-development projects in Denver and elsewhere. It is Cherokee that the Triangle Transit Authority has turned to for Raleigh-area light rail plans since the federal government derailed those plans in December 2005 by denying funding for the $810 million, 28-mile light rail line. As a result of these and other activities, Mecklenburg town officials have been told by CATS that Cherokee is an “expert in tax increment financing.”
But Cherokee has also been at the center of a pay-to-play scandal in New Jersey involving a project that a Cherokee subsidiary, EnCap, is building at the Meadowlands. EnCap wants state and local help to build a $350 million luxury golf condo complex on the site of current Meadowlands garbage dumps.
In April a North Jersey newspaper documented some $13 million in professional fees and contributions to politically wired members of the Jersey power structure. The Record, of Bergen County, also reported some $314,000 in political contributions from Cherokee-related entities.
Cherokee CEO Thomas Darden has in recent years given at least $15,000 to the North Carolina Republican Party after giving some $10,000 directly to the New Jersey Democratic Party in 2004. In 2004 Darden also gave at least $25,000 to Republican candidates and groups.
“When a North Carolina firm is contributing to a local entity, one would have to be pretty dense not to think there is some sort of ulterior motive there,” State Sen. Loretta Weinberg, D-Teaneck, told The Record. “It’s the only conclusion you can draw.”
“EnCap might be the poster child for the fact that there need to be more protections in place for municipalities regarding how these developments move forward,” she added. The state of New Jersey is currently investigating the project, the paper reported.
The town of North Arlington also recently pulled out of a 1,600-unit development deal with EnCap citing the firm’s inability to deliver on its promises and a plan that required the town to hand over control of future development to the company. For example, the plan called for the town to use eminent domain to acquire several tracts for EnCap to redevelop.
Back in 2005 local activists complained that Cherokee was using state debt mechanisms intended for clean water and sewer projects to finance its development plans. A New Jersey Environmental Infrastructure Trust plan to loan $214 million to Cherokee drew criticism.
“This is the most outrageous abuse of public funds I’ve ever seen, and shows the power of pay-to-play,” Jeff Tittel, executive director of the New Jersey Sierra Club, told the South Jersey Courier-Post in August 2005. “It shows that Cherokee is more powerful than government.”
It remains to be seen how much power CATS and Cherokee will wield in Mecklenburg as the plan for more train lines chugs North.