Hurdles ahead for Metro Rail extension

Date: July 12, 2017

A recent report by the Partnership for the Public Good found that 58 percent of jobs in the region are inaccessible by public transit; the extension would improve that by connecting two major employment centers, downtown and the area around UB and Niagara Falls Boulevard in Amherst.

Hurdles ahead for Metro Rail extension
By Charlotte Keith

An extension of Buffalo’s light rail system to Amherst is as close as it’s ever been – which still isn’t very close.

The plan gained momentum when Gov. Cuomo threw his support behind it in his State of the State earlier this year, as part of the second phase of the Buffalo Billion initiative. Still, the decision to build an extension has not yet been made, said Thomas George, director of public transit for the Niagara Frontier Transportation Authority.

“We’re not moving along in a process to the construction, we’re moving along in the evaluation process,” he said. “It’s absolutely not a sure thing.”

Despite the increased ridership and extensive economic benefits the NFTA says an expanded system would bring, the plan faces serious obstacles. The NFTA, whose own finances are already strained, has yet to decide on a way to pay for the local share of construction and operating costs, which could run to hundreds of millions of dollars.

NFTA officials acknowledge that securing local funding will be challenging and that, without financial commitments from state and local leaders, the plan will crumble. And while they don’t want to talk about tax increases yet, it’s a subject that seems likely to come up as plans progress.

“We’ve made a point from day one this is a community project and at the end of the day the community’s got to want this,” George said.

Supporters rhapsodize about the benefits an extended system would bring.

“I think people will discover – or rediscover – that it’s a good way to move people around,” said Doug Funke, president of Citizens for Regional Transit, a local group which has been pushing for the extension for more than thirty years.

Others are skeptical that the NFTA can take on a project of this size.

“The NFTA have their hands full making sure they have enough money just to maintain existing infrastructure,” said Larry Penner, a former grants administrator for the Federal Transit Administration.

Buffalo would have to compete against other cities for federal funding, as well as show that it has a comprehensive plan to leverage the transit investment into new development. That plan, which could call for rezoning to encourage density around stations and limits on parking, may face opposition from suburban politicians and residents, who might balk at the suggestion of creating a more urban environment in their communities.

The next step is a $5 million environmental study, which is being paid for by the state and will take several years. As that progresses, the anticipated cost of construction will become clearer, and discussions on how to pay for it, more concrete. If financial commitments from local governments can’t be secured, the plan will go nowhere.

Benefits for riders

The proposed extension would more than double the length of the existing line, with an accompanying increase in in ridership from around 20,000 to more than 40,000 by 2035. Those riders would benefit from faster, more convenient travel to Amherst, and better access to job opportunities.

A recent report by the Partnership for the Public Good found that 58 percent of jobs in the region are inaccessible by public transit; the extension would improve that by connecting two major employment centers, downtown and the area around UB and Niagara Falls Boulevard in Amherst.

The NFTA estimates that just over half of the riders would belong to households which do not own a car; it’s unclear how successful the extension would be at attracting riders who do not currently use public transit.

If the extension goes ahead, the commute between downtown and UB’s North Campus would be about half an hour. That’s considerably faster than is possible using the current system, which requires a time-consuming bus transfer – though not quite as fast as by car. While NFTA officials note that congestion at rush hour is worsening, the metro area’s commute times remain relatively short, at just over 20 minutes.

The extension would also support UB’s new medical school downtown, as well as making it easier to travel between the north and south campuses. The NFTA anticipates that, if the extension is built, UB would end the “Stampede” shuttle bus system that runs between the campuses. Roughly half of the anticipated ridership of the extended system would come from UB students.

At $1.2 billion, light rail is the most expensive of the options considered for an improved connection to Amherst, including a more robust bus system. Federal funds would cover half the cost – although officials note that could well change, given the unpredictable political climate – with the rest coming from state and local sources. The NFTA will have to compete with other cities for those federal dollars; some will be asking the federal government for a smaller share of their project’s costs.

As well as the construction costs, the extension would require an estimated $15.8 million in annual operating costs, less than half of which would be covered by fares. NFTA officials anticipate that some of that would be covered by a contribution from UB, replacing the money the university currently spends on the Stampede system. The NFTA estimates that it has several years to establish how to pay for the cost of building and operating an extension.

An extended Metro Rail could create benefits beyond those directly related to transportation. Studies predict an increase of more than $300 million in property values and more than 8 million square feet of new commercial and residential development around the line. By way of context, office space in the downtown Buffalo market, including Larkinville, totals 12.8 million square feet.

Last time round

The existing 6.5 mile stretch of rail in Buffalo stands as a cautionary tale.

Before the original line was built, studies projected – as they do now – that it would boost property values. That effect, though, has been weak, a 2007 UB study found. Researchers found that three stations – Utica Summer-Best, and the since-demolished Theater District – actually had a negative impact on nearby property values.

Projections that the rail line would spur development around stations and lift the surrounding neighborhoods fell similarly flat. Today, several stations are ringed by parking lots and empty buildings.

Buffalo’s experience has left Amherst Town Supervisor Dr. Barry Weinstein skeptical of the latest round of rosy economic projections. The existing line has been a “disaster” in terms of galvanizing development, he said.

“There’s no increased value, there’s no increased taxes – I don’t see how they can extrapolate that to Amherst and expect a contribution,” he said.

Still, others argue that Buffalo then and Amherst now simply aren’t comparable. The original line was also a victim of poor timing: of seven cities that invested in light rail in the 1980s, Buffalo experienced the steepest population decline, the 2007 study found. By contrast, population and employment growth along the current line and projected extension are forecast to increase over the next two decades. Work is also underway on a plan to spur development around the line, something that Buffalo struggled to coordinate the first time round.

“The system never lived up to its hype because development was not encouraged to go around it,” said Robert Paaswell, a professor at the City University of New York who worked on several studies of the original line.

“If you do as you did 30 years ago and just say we’ll put the light rail down and anybody can do whatever they want in terms of development, then it probably won’t be as successful as you would expect,” Paaswell said.

Transit-oriented development

The anticipated economic benefits of the extension come with an important caveat: experts agree that by itself, public transit does not create much in the way of development. Rather, local governments need to develop policies to concentrate growth around transit systems, like rezoning to allow for more density, subsidies for developers who build near stations, and limits on parking.

The sometimes utopian vision of “transit-oriented development”, with bustling, walkable neighborhoods is hard to square with the reality of Niagara Falls Boulevard and Maple Road, strip malls and endless parking lots – the definition of suburban sprawl. This suburban corridor would require significant investment to create the denser neighborhoods that would best leverage the investment in Metro Rail, experts say. Success would require corralling a likely fractious coalition of elected officials, developers and community groups.

The anticipated increases in property values are especially significant because the NFTA is considering using them to help pay for the cost of construction. Weinstein, the Amherst town supervisor, called the idea “nonsense,” adding: “I think that’s unrealistic, I think it’s unreasonable.”

Skeptics point out that rezoning and incentives for development would likely encourage investment in suburban areas – even without the transit improvements themselves.

“Transit-oriented development is great in concept, but it’s very difficult to accomplish in practice – because it costs more than the alternatives,” said Dr. Ian Carlton, a transit consultant based in Portland.

Since transit-oriented development often involves trying to make suburban areas less suburban, one of the biggest pitfalls, Carlton said, is that “99 percent of the time people oppose it.”

Shaky finances

The possibility of the extension puts the NFTA in a paradoxical position. The agency is potentially eligible to receive hundreds of millions of dollars to expand service, but it has struggled in recent years to pay for the current system. Like most public transit systems, the NFTA doesn’t bring in enough money from fares and advertising to cover operating costs, and relies on state and federal aid to make up the difference.

To win federal funding for an extension, the agency will have to show it has enough money to operate the current system – that an extended Metro Rail wouldn’t come at the expense of bus services.

“It’s a fragile condition year to year because there’s only so much money coming in from the farebox and only so much state operating assistance,” said Penner, who worked at the FTA region that includes New York for more than 30 years.

Throughout its history, the agency has been plagued by periodic financial crises. In 1990, five years after the metro rail opened, disagreements over local funding led to a two-day shutdown.

Since then, the NFTA has twice weighed the possibility of an extension – and twice concluded that it was not financially feasible. A 1992 study concluded that an extension would place “an additional burden” on the agency’s financial capacity and warned that it would “exacerbate the deficit problem.” The NFTA’s executive director at the time said the extension was “not a free lunch.” Ten years later, another study came to similar conclusions, saying that any extension would depend on securing an increase in operating subsidies for the NFTA.

The agency’s fiscal situation is better than it was four years ago, when a state review cautioned that, without enough money coming in to cover its operating costs, the NFTA was drawing on its financial reserves to balance the budget. The same year, a study by the Federal Transit Administration the same year found that the agency “does not have the financial capacity to sustain existing services.”

Still, this year’s budget notes that the agency “does not generate enough revenue to cover operating costs as well as a full capital program,” meaning that non-urgent repairs and upgrades are delayed. A review last year by the State Comptroller’s office estimated the NFTA had $58 million in unfunded capital needs.

George said the agency’s finances have stabilized over the past five years and are now “very sustainable.”

“I think we’ve demonstrated that by the consistent service we’ve put on the street,” he said, adding that paying for capital upgrades is a concern for “every transit agency in the country.”