Light rail is focus of Phoenix transit-tax campaign

• Approval of Proposition 104 would triple light rail miles in Phoenix
• Light rail is the most divisive aspect of the plan going to voters in August
• Both sides use the existing line to justify whether voters should support expansion

Fifteen years ago, nearly two-thirds of Phoenix voters took a gamble on funding a light-rail system critics blasted as useless for a car-centric city.

Tens of thousands of people now ride the trains every day. Development is sprouting along the tracks. Taxpayers have paid hundreds of millions of dollars for the infrastructure and are being asked to spend billions more.

The investment in Phoenix's first 13.5 miles of light rail within the city limits is viewed by some as a boon and by others as a boondoggle. Supporters say light rail brings Phoenix economic growth, national acclaim and new lifestyle options. Opponents see a system where all residents shoulder the cost, while only a relative few benefit.

The public soon will get a say in the debate.

PREVIOUSLY: Transit plan asks voters to envision city's future

MORE: Construction, transit groups funding transit-tax campaign

In August, voters will either approve or reject Proposition 104, a $31.5 billion Phoenix transportation plan that would triple the number of light-rail miles in the city and fund bus and street improvements over 35 years through a sales-tax increase. Though light rail is just one piece of the plan, it is the most divisive aspect.

Proposition 104 seeks a 0.7 percent sales tax that will last until 2050 to help fund the plan. It would replace the 0.4 percent tax approved for transit in 2000 and bring the city's total sales tax rate to 8.6 percent.

Expanding light rail to destinations like Grand Canyon University and Paradise Valley Mall would account for about 20 percent of overall spending in the plan. An additional 7 percent would pay for continued operation of the existing line.

Supporters and opponents agree that Phoenix has changed since voters approved the light-rail line — but they diverge on whether it has been for the better.

With or without expansion, light rail is the most enduring investment of any transit option. The system brings changes that can't be undone once the city lays the tracks, said Albert Santana, Phoenix's light-rail project administrator.

"It's a permanent decision," he said. "We have to make sure we do due diligence."

At what cost?

The main argument opponents of light-rail expansion make against the plan is the price. They argue — correctly — that riders will never pay the full cost of constructing or operating the system.

Capital costs for building tracks are high compared to those for buses, which run on existing roads. Building the entire light-rail line in 2008 that runs for roughly 20 miles through Phoenix, Tempe and Mesa cost about $1.4 billion.

Federal and regional funds paid about 60 percent of that. Phoenix funded most of its share through the sales tax that residents approved in 2000.

The city continues to pay millions of dollars each year to operate the system.

Phoenix budgeted $27.7 million for light-rail operations in the 2014-15 fiscal year, according to the city. Fares and advertising revenue accounted for about 40 percent with the rest funded primarily through the Transit 2000 sales tax that everyone pays.

On a per-miles basis, the system cost $12.60 to operate across the three cities in fiscal 2014, according to Valley Metro, the agency that operates the line. Valley buses cost $7.65 per mile, though rider fares recoup 22 percent of the expense.

That means light rail is a system the city is subsidizing indefinitely, said John Semmens, a former researcher for the Arizona Department of Transportation who is critical of light rail. Buses — while also subsidized — don't require the same up-front building costs and are easier to change if ridership doesn't go as planned, he said.

"Essentially, you're signing up for decades of financial losses," he said. "Light rail would be the last thing that I would advise."

But Phoenix's light-rail system has more riders per mile than those in Seattle and San Diego and does better than the peer city average for cost recovery and subsidy per boarding, according to Valley Metro. Supporters say high ridership shows the line is fulfilling a transit need in a system not designed to make money.

Valley Metro reported an average of 40,000 to 50,000 light-rail weekday boardings system-wide so far this year. That hovers near the projection of nearly 50,000 weekday boardings on average by 2020.

The line logged more than 14 million boardings in the 2014 fiscal year. A daily record was set in January when light rail recorded 126,000 boardings the day before the Super Bowl.

The much larger bus system serves 512 square miles and had nearly four times as many boardings overall for the year, but weekday boardings per mile put the light rail among the Valley's busiest transit routes.

"It's very successful in moving people where it actually is," Santana said.

Even if ridership is better than expected, though, it's still not enough for financial success, said Roy Miller, who is part of a campaign against the plan. Miller sat on the citizens committee that helped develop the proposal.

Daily riders are already only a small percentage of commuters in a metro area of millions, he said. He argues light rail will make even less financial sense as it expands beyond the city's core.

"We've run it in the most probable areas so far," he said. "With each extension, it will get more wasteful."

More than moving people

But the campaign promoting the tax stresses light rail is as much about economic development as it is about moving people around the city.

Valley Metro cites a figure of $7 billion invested in 169 public and private projects near the light-rail line since 2004. That includes all constructed or proposed developments within a quarter mile of the tracks in the three cities. About $5 billion of that investment is in Phoenix, Santana said.

The figure includes private investments like downtown apartment buildings and midtown hotels, and public funding for university campuses and renovated cultural facilities.

Not all project developers cite light rail as the primary reason for investment. But interest for new construction near the line is significant compared with the rest of the city, Planning and Development Director Alan Stephenson said.

Dozens of infill projects are underway for offices, housing or retail. Companies looking to move to Phoenix also say the system is an amenity, Community and Economic Development Director Christine Mackay said, though there are many factors in their decision to relocate.

And the infrastructure expansion itself creates jobs, including the more than 1,300 workers building light-rail extensions in central Mesa and north Phoenix, according to Valley Metro.

Some of that investment is revitalizing areas — like east of downtown — that have struggled for years, Stephenson said. Other projects have been transformational.

Major downtown developments, for example, relied on the light rail to launch, said Jeff Moloznik, vice president of development for RED Development. The company built CityScape near the line with the help of a city tax break.

The mixed-use project turned vacant blocks into more than 1 million square feet of restaurants, bars and retail shops. RED Development was only interested because of the public projects and light-rail stops nearby, Moloznik said.

"The light rail is a good example of how the public sector can make an investment and the private sector will follow behind," he said.

Less tangible is the light rail's effect on drawing major events to the Valley.

The Arizona Cardinals recently donated $25,000 to the MovePHX campaign in support of the proposition. The team credits the system with helping facilitate events like the Super Bowl in the metro area, team spokesman Mark Dalton said.

Light-rail ridership throughout the week of the game neared 400,000 people, according to a recent study on the economic impact of the Super Bowl.

"World-class infrastructure is important to getting those kinds of events coming to Phoenix and the Valley," Dalton said.

The organizing committee for the College Football Playoff also touted the line in its bid to bring the national championship game to Glendale, said Tom Sadler, president and CEO of the Arizona Organizing Committee. Fan events will be held in downtown Phoenix.

"To have light-rail capability is a big feature," Sadler said.

Transforming parts of the city

Light rail is also one way to retrofit a city designed for cars, Mayor Greg Stanton recently told supporters of MovePHX.

Combined with transit-focused investment, proponents say it may be Phoenix's best chance to form sustainable, walkable areas in the surrounding sprawl. The tracks provide a focused area for the city and developers to create new lifestyle options.

"That is exactly what people demand in the year 2015 and beyond," Stanton said.

Five light-rail districts in the city will aim to become more urban and pedestrian-friendly under the Reinvent PHX project. The city recently designed and approved visions for future, transit-oriented development through a partnership with the U.S. Department of Housing and Urban Development, Arizona State University and local organizations.

The Phoenix City Council also this month approved a new zoning code focused on walkable communities as part of that project. The code allows for taller and denser buildings than seen in the suburbs to help build light-rail ridership, Stephenson said.

"You want a development that allows more people to live near that infrastructure," he said.

Fixed tracks encourage investment in certain areas, said Shannon Scutari, co-founder and director of the Sustainable Communities Collaborative. The collaborative launched in 2011 to fund transit-oriented projects near light rail with $20 million provided by New York-based Local Initiatives Support Corporation and Phoenix-based Raza Development Fund.

Major projects include the Newton — a rehabilitation of the former Beef Eaters restaurant on Camelback Road — and the Union @ Roosevelt apartments under construction downtown.

The developments become part of transit corridors the city also invests in, through improved shade, sidewalks and bike lanes connecting them to light-rail stations, Scutari said. Other transit doesn't always draw the same result.

"There's a perception that it's easier to change (bus lines)," Scutari said. "It's riskier to take a multimillion-dollar chance on something that could change."

Even the prospect of light rail is enough for areas like south Phoenix to plan related revitalization projects.

A future route extending south on Central Avenue to Baseline Road helped leverage funding for Plaza de las Culturas, said Victor Vidales, a real-estate business owner in the area. The project would transform about 80 acres of brownfield land into a variety of educational and business uses.

JPMorgan Chase is providing a $6 million grant for the project, citing plans for a sustainable, transit-connected project.

"The idea is really to build a healthier environment," Vidales said.

Costs and benefits

Miller of the opposition campaign said his side plans to convince voters that there is one fundamental role of transportation: getting people to their destinations.

Those who reap the other benefits of light rail should pay for it, he said.

Property values, for example, increase along the line as soon as the path is set, said Aaron Golub, who studied the changes as an associate professor in the Arizona State University School of Geographical Sciences and Urban Planning and School of Sustainability.

"There's the potential for big winners," he said.

But all residents subsidize that profit, opponents says, while people who live miles from the light-rail line pay for neighborhood urbanization along the tracks.

They cite major donors to the MovePHX campaign, who include construction companies and transit operators who could benefit from the expansion.

"It's just sadly the perfect example of concentrated benefits and dispersed costs," Miller said.

And they don't agree that condensed growth benefits the city as a whole. Some fear a higher sales tax will make Phoenix regionally uncompetitive against cities with lower rates, while only certain corridors thrive.

"That's not a net gain for the community," Semmens said. "It happens because everyone pays the tax."

Supporters argue that expanded light rail, better buses and improved streets are about providing options: for how people live, where they can travel and how they can get there.

But others question who should choose those options — and who should have to pay for them.

"It sounds kind of dreamy," Miller said. "But it's expensive."

ON THE BEAT

Brenna Goth covers growth and development in Phoenix. She is covering Proposition 104 this summer.

How to reach her:

brenna.goth@arizonarepublic.com

Phone: 480-599-8083

Twitter: @brennagoth