Commissioner Marc Sarnoff (J. Albert Diaz)
Ignored by the federal government in spite of efforts to brand it as a “shovel-ready,” job-bonanza construction project, the Miami streetcar that was sidelined by the Great Recession is back from the dead.
Revamped plans for a street-level electric rail system that would take passengers from downtown to the Design District could be presented for public discussion as early as September, City Commissioner Marc Sarnoff told a room of real estate industry figures Wednesday.
The idea is to revive a project that depended mainly on government funding by using a public-private partnership, or PPP, instead, Sarnoff told the Daily Business Review. The commissioner, whose district includes most of the route, told the DBR an unspecified French company has been meeting with city officials and was ready to move forward with a more concrete plan if a PPP became a reality.
The PPP could fund at least part of the project with a new special taxing district that would impose a levy on property owners near the future streetcar line.
“If we’re lucky and have a PPP, you should have a streetcar line from All Aboard Florida through here all the way to the Design District,” Sarnoff said at an event marketing Canvas, a new condo project just west of the Adrienne Arsht Center for the Performings Arts.
Sarnoff spoke on a panel sponsored by the Canvas developer about how projects proposed for the blighted neighborhood could change the area in a relatively short time. On 1.07 acres at the northwest corner of Northeast 16th Street and First Avenue, Canvas is heavily emphasizing its proximity to public transportation in its pre-sales pitch.
Also involved in discussions about the streetcar was the executive director of the Omni-Midtown Community Redevelopment Agency. Pieter Bockweg was even more optimistic than Sarnoff, saying details of the streetcar are due in late August.
It’s unclear what the proposed route would be. Plans rolled out in 2005 called for 6.7 miles of track linking downtown and the Midtown area. Another loop along 20th Street had tracks west of I-95 toward the Jackson Memorial Hospital complex.
Sarnoff said plans he’s seen have tracks falling mostly in his District 2, which doesn’t include the medical complex.
The price tag is up in the air. As late as 2009, the city was asking the federal government for help on a $280 million project—up from $200 million when first discussed in 2005.
Back then, it was believed the project would be publicly funded by the city of Miami, Miami-Dade County, state and the city’s various community redevelopment agencies.
A public-private partnership could help contain ballooning costs usually associated with major capital improvement projects, said attorney Frank Rapoport, senior partner and chair of the public-private partnerships practice group at Peckar & Abramson in Miami.
He noted a PPP was successfully used in Denver to expand that city’s tram system in the mid-2000s. Other cities are looking at establishing similar programs with funding structures that generally transfer the risk of designing and building the infrastructure to a private developer, Rapoport said.
“Streetcars are sweeping the country; everyone wants to do them,” he said. “The model with a PPP is that the winning company designs, builds and finances the streetcar and is then paid back according to some model that’s linked to streetcar revenue.”
What’s key is that instead of having to pay for construction costs as a streetcar system is going in, PPPs are normally structured so that “they get paid when it gets built,” Rapoport said.
Using this kind of funding conduit for major infrastructure projects is popular at the moment because key pension funds, insurance companies and other large investors “are dying to put money into these deals” and are comfortable investing in them in exchange for long-term returns of 8 percent to 12 percent, he said.
By comparison, All Aboard Florida offered investors a 12 percent return on significantly riskier five-year corporate bonds to finance $405 million of its high-speed rail project.
It used to be “people didn’t care about infrastructure because it wasn’t sexy, but now every governor and mayor is talking about it and the private sector wants it,” Rapaport said. “Miami needs to be the leader here.”