The Nigerian Streetcar Scam

Yesterday, the MacIver Institute published the Antiplanner’s study of a proposed streetcar line in Milwaukee, Wisconsin. In response, I received the following intriguing email.

Dearly Beloved,

I know this letter will come as a surprise to you, but I hope you will read it in detail. My name is Chuck Hails, and I am the executor of the estate of a man who has the same last name as yours. When he passed away recently without any heirs, he left an estate of $2 billion. I am willing to share this estate with you by investing, in your name, in a blighted area of your city.

The late billionaire whose estate I represent was very fond of streetcars, so to make this investment appear legitimate, all you will have to do is buy some streetcars; four or five will do. I happen to know of a factory in the Czech Republic that can sell you these streetcars for less than $2 million each.

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PolitiFact Gets the Facts Wrong

Charlie Hales is the Portland city commissioner who admitted that rail transit doesn’t lead to economic development, so he demanded that the city subsidize such development. Then, he persuaded the rest of the city council to build a streetcar line, subsidized development along that line, and proudly proclaimed that streetcars led to economic development. He spun that line into a high-paying job for a consulting firm convincing Atlanta, Cincinnati, and other cities to build streetcar lines, and is now back in Portland running for mayor.

In his campaign, he says, “streetcars carry more people than buses. Because you attract more riders who don’t ride transit now. And actually the operating costs are not any greater than the bus.” The Oregonian‘s PolitiFact column decided to check this out.

“On whether streetcars carry more people than buses, there is no ambiguity,” claims PolitiFact. “Streetcars have a maximum capacity of 92 riders, according to Fetsch. That’s nearly double the 51 or so riders who can fit on a single bus.” That’s dead wrong because, in addition to the capacity of individual vehicles, you have to consider frequency. For safety reasons, streetcars must be separated at least two or three minutes apart. Buses can run on downtown streets every 22 seconds. That means, even if a single bus has only half the capacity of the streetcar, a bus line has three more times the capacity of a streetcar line.

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Remember When Transit Used to Be Efficient?

Arlington County, Virginia wants to spend $261 million building a streetcar line that, just four years ago, was expected to cost $100 million less. The streetcar’s costs are now expected to average $50 million a mile.

That’s quite literally insane. When San Diego built the first modern light-rail line, which opened in 1981, it cost about $15 million a mile in today’s dollars. But as more cities built light rail, costs soon rose to $50 million a mile on the average, with some coming in at more than $200 a mile.

Then, in 1999, Portland decided to built a streetcar line, which was billed as a “low-cost alternative” to light rail. Yet Portland’s original line cost $20 million a mile, more than San Diego’s original light-rail line. Now $50 million a mile is considered “comparable to similar projects across the nation.”

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American Know-How: Get Less for More

Three years ago, Oregon politicians managed to get an earmark for an Oregon company to manufacture streetcars. Now it turns out those streetcars are–surprise!–more expensive than anticipated as well as delayed by at least five months.

For the original price of six cars, the company will make just five. Not to worry, says company president Chandra Brown: “You’re not getting less. I actually think you’re getting more. You’re getting a lot better quality vehicle, and you’re getting all the ancillary benefits from it being done here.”

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Streetcars for Charlotte, Cincinnati, Ft. Worth, & St. Louis

The Department of Transportation has announced $290 million in “livability” grants, including $25 million each for streetcars in Charlotte, Cincinnati, Ft. Worth, and St. Louis plus $5 million to extend a streetcar line in Dallas. “Streetcars are making a comeback because cities across America are recognizing that they can restore economic development downtown,” the DOT press release quotes FTA chief Peter Rogoff as saying, “giving citizens the choice to move between home, shopping and entertainment without ever looking for a parking space.”

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TIGER Rips Through Dallas, Detroit, and Tucson

With typical fanfare, Transportation Secretary Ray LaHood announced $1.5 billion in “Transportation Investment Generating Economic Recovery” (TIGER) grants to 51 cities. The complete list of grants includes new “modern streetcar” (isn’t that an oxymoron?) lines in Dallas and Tucson, plus an extension of the existing streetcar system in New Orleans.

“In an overwhelming show of demand for the program,” said LaHood, US DOT “was flooded with more than 1,400 applications.” What a surprise to find that there is an overwhelming demand for free money.

Among the lucky winners was Tucson, which received $63 million toward the $150 million cost of a 3.9-mile streetcar line between the Arizona Health Sciences Center and the University of Arizona. So now students can take the streetcar to the hospital when they are too drunk to walk. (Sorry, that’s an insult: most students are too smart to ride streetcars.)

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