20-Yr. Central Corridor Investment to Total $6.78B
A new report indicates that public and private spending stemming from the Central Corridor light-rail transit line is estimated to total $6.78 billion over the next 20 years.
The report was prepared by Washington, D.C.-based Center for Transit-Oriented Development and two local consulting firms-St. Paul-based Bonestroo and St. Paul-based Springsted. The Central Corridor Funders Collaborative commissioned the study, which cost $189,530.
More than 500 individual improvement projects were identified for the area surrounding the 23 Central Corridor stations. Those projects include sewer improvements, energy improvements, streets and sidewalks, alleys, bikeways, bridges, streetscapes, public art, parks, a parking ramp, housing, and office, retail, and hotel space.
The light-rail line is a $957 million project that will span 11 miles and connect the downtowns of Minneapolis and St. Paul along University and Washington avenues when it’s completed in 2014.
According to the report-“Central Corridor TOD Investment Framework: A Corridor Implementation Strategy”-93 percent of the total investment costs account for site development, which is typically funded by the private sector. Site development includes remediation, along with office, residential, and retail construction costs.
Only about 7 percent of investment costs are expected to require public funding. According to the report, underground costs like utilities (which account for 0.6 percent of the total) are typically funded by the public sector-and surface costs, like street improvements and public parks (which account for 6.8 percent of the total) can be either publicly or privately funded. The public sector also in some cases assists with site development, including affordable housing and parking structures.
The Central Corridor is divided into six subareas representing a half-mile radius around the 23 stations. Among those subareas, the University of Minnesota and Environs area and the Midway West area have the greatest portion of “high-priority” projects-but the Midway West and Midway Central areas have the greatest portion of as yet-unfunded projects. “High priority” improvements are defined as ones that require road work and could be completed at the same time as the light-rail line, which would save construction dollars and minimize inconvenience.
The report indicates that the first private financing will likely occur in the downtown Minneapolis, University of Minnesota and Environs, and Midway West markets thanks to the presence of major employers and the University of Minnesota. The Midway West subarea is also expected to be able to secure funding because of its proximity to the U of M and an abundance of adaptive reuse and new construction sites. But the report indicates that the Midway East and Downtown St. Paul subareas have the “weakest markets” and “private development will take longer to occur” there.
According to the report, new development in the Central Corridor could generate about $320 million in additional taxes over the next 20 years, “or $160 million in net present value, assuming a 5 percent discount rate.” If the jurisdictions along the Central Corridor devoted 20 percent of the additional value to help pay for area improvements, it would generate $64 million, or $32 million, in net present value, according to the report.