June 18, 2014 at 10:10 pm

M-1 organizers: Light rail project will proceed in Detroit

Detroit— Organizers of the M-1 streetcar project along Woodward Avenue said Wednesday the venture will “proceed as planned” and not be in danger, even with a $12 million funding shortfall.

A May 1 letter written by Michigan members of Congress to Transportation Secretary Anthony Foxx and published in The Detroit News warned the city’s much delayed 3.3-mile $137 million project could be in jeopardy.

Despite the projected funding shortfall, the M-1 Rail’s board of directors voted June 6 to proceed with the project.

Matthew Cullen, president and CEO of the M-1 Rail project, said in a statement Wednesday “construction of the M-1 Rail streetcar will proceed as planned and commence upon City Council approval of our operating agreement.” He said the board hopes for that approval to come next week.

The letter signed by Sens. Carl Levin of Detroit and Debbie Stabenow of Lansing, and Reps. Sander Levin of Royal Oak, John Dingell of Dearborn, John Conyers of Detroit and Gary Peters of Bloomfield Township, states Detroit applied for a supplemental $12.2 million grant from the Transportation Department’s TIGER grant program that allows applicants to invest in road, rail and transit and port projects.

“We remain very optimistic about the requested TIGER (Transportation Investment Generating Economic Recovery) grant based on the quality of our application, the strong support of the mayor, our congressional delegation and others, the administration’s focus and commitment to the city of Detroit, and the profound impact of this project for our community,” Cullen said in the statement. “That being said, the TIGER grant is just one component of our funding structure; there are contingency strategies that we will deploy if the grant is not approved.”

TIGER grants are awarded at the discretion of the U.S. Department of Transportation to programs that meet strict guidelines and have significant impact on a region.

M-1 Rail officials are expected to seek City Council approval for final permits to begin construction in the coming weeks. Officials have not announced when the project will officially start but it’s expected to be within 30 days after the city permits are issued. The project is expected to take two years to complete.

The transit line from downtown to the New Center area will have 20 stations and 12 stops along Woodward.

It is being built by an unprecedented mass transit public-private partnership led by businessmen Roger Penske and Dan Gilbert along with support from the Detroit Downtown Development Authority and several corporations and philanthropic groups.

Timothy Fischer, chief administrative officer for M-1 Rail, said the project will not fail despite the funding issue.

“We are going to break ground, we are going to build this thing. As soon as our permits are in place, we are ready to go,” Fischer said. “We’ve reviewed the financials, we’ve reviewed the funding plan and we are confident that should the TIGER grant not come through that we have a solid plan to put the capital in place to build it.”

Leo Hanifin, a member of the M-1 board who has been studying and pushing for improved mass transit in Metro Detroit for years, also said the streetcar project won’t be delayed any further and is needed to help expand transit options in the region.

“I believe that the project is on solid ground and will proceed,” Hanifin said. “It will proceed more easily with that TIGER grant. But if the TIGER grant does not occur I believe we still will proceed.”

The roughly four-mile route is a scaled-back version of earlier plans for a rail line stretching nine miles from downtown to 8 Mile on Detroit's northern border. The streetcar line is expected to operate on $5.1 million annually — 80 percent of which is to be financed by fares and advertising, according to planners.

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Staff Writer Gary Heinlein contributed.