MetroWire Media | Real Estate News
metrowiremedia.com | August 19, 2015
As the news of the delay in the Kansas City Streetcar's delivery abounds, members of the Kansas City Streetcar Authority participated in a roundtable discussion with the Design Build Institute of America - Mid-America Region where team members recounted project hurdles and shared lessons learned.
Ralph Davis, deputy director of KCMO Public Works, said the biggest initial hurdle was overcoming the looming stigma attached to the failed transit projects of the past.
"The last streetcar ran in Kansas City in 1957, and there's been a lot of attempts to bring light rail, streetcar, and even a subway at one point in time," he said. "But nothing had ever happened in Kansas City, so we knew if we did this we had to do it well and do it right."
Building the streetcar downtown through the densest part of the city was perhaps the most substantial challenge, as the city was tasked with navigating archaic infrastructure including 120-year-old water lines and sewers tied to the days of the civil war. All in all, the team worked with as many as 40 different utility companies to update the infrastructure along the 2.2-mile streetcar line.
Rob Pitkin, attorney at Horn Aylward & Bandy LLC, was involved in the creation of the Transportation Development District, which hikes taxes on residents in the surrounding blocks of the streetcar line. He said that while the vote to fund the initial starter line garnered enough votes to pass, voters rejected the creation of a second TDD for an extension line to UMKC. Why? The boundaries of the district were drawn too broadly, Pitkin said, and the affected voters were not educated well enough on the benefits the streetcar would provide.
"The first TDD for what became the starter streetcar line was laser focused. It was drawn very specifically and it was marketed very specifically to the people that voted," he said. "If the streetcar does expand someday -- which I hope it will -- it will be critical to educate people and help them understand the business case as to why it's advantageous."
So advantageous, in fact, that along similar transit lines across the country, property values have skyrocketed. That's according to Aaron Schlagel, vice president of development and construction at Copaken Brooks.
"As we look to future track locations in other markets that have strong public transit, we found on average the property values increased up to 30 to 40 percent along the path," he said. "So while [a TDD tax] is an additional burden potentially, some of that value is returned in full plus some to those owners that have invested. As a region we should be excited about these investments because it will move Kansas City further along and boost our competitive advantage against other cities."
Schlagel said he moved to the area and joined the company when he realized the tremendous opportunity to do transit-oriented development.
"Once the [streetcar] kicked off, it was apparent to me that I wanted to move back to this region and have an impact and get in the way of the economic development that will take place. And I can say definitively that that was the right decision," he said. "To date there has been $6 billion worth of economic development as a result of the streetcar. There are 21,000 people living downtown today, projected to reach 30,000 in the next 5 years. There are 2,000 apartment units coming online. We're also building the first spec office building in 24 years. There's a ton of positive growth directly attributable to the streetcar."
Aaron Adams, construction manager of Herzog Contracting Corp., said that in the future when selecting a general contractor, the city should consider opting for a "best value" bid rather than opting for the lowest bidder, allowing the construction manager to spread risk throughout subcontractors.
But everyone on the panel agreed on one point: Every step in the process should have been completed sooner.