June 24, 2014 at 11:17 pm

Detroit City Council clears way for M-1 Rail construction

City council member Saunteel Jenkins makes a comment after a very fast vote on the M-1 M-2 Rail operating licensing agreement. (Robin Buckson / The Detroit News)

Detroit — With the M-1 Rail streetcar line receiving the green light from city officials to break ground this summer, the project may finally be moving forward in what would be Metro Detroit’s first major transit breakthrough.

Project officials say Tuesday’s unanimous permit approvals by City Council pave the way for construction to start in July on the $137 million 3.3-mile line up Woodward Avenue from downtown to Midtown. Proponents say they expect retail and housing to flourish along the line once it’s running, pointing to economic benefits other cities have seen with similar projects.

Matthew Cullen, the project’s president and CEO, said organizers project the streetcars to be up and running in late 2016.

“M-1 Rail will play a major role in shaping a better future for Detroit,” Cullen said in a statement. “This world-class rail system will serve Detroit’s largest job centers and most visited destinations.

“It will ignite tremendous new economic development and job creation and will provide a foundation for improved and expanded public transit throughout the region. The project will also create construction and permanent jobs for Detroiters. It’s time to make history.”

M-1 officials say they are down to two streetcar vendors and should be receiving proposals for “the best and final” offers in the next few weeks.

“I’m anxious to see what they will come up with and we’re excited to see this piece of the puzzle move along as well,” said Timothy Fischer, the project’s chief administrative officer. “It’s been a hectic day, it’s been a great day for us.”

Although quiet about how much money they have raised, M-1 Rail officials say they estimate it will cost around $5.2 million annually to operate the line, which is expected to have about a dozen stops.

“We’re testing that projection. We’re not just throwing out numbers,” Fischer said. “These numbers that we’re testing are from the national experience. Now we have more to compare them to because more streetcar lines are up and operational.”

One project that M-1 Rail officials studied was the Portland Streetcar project in Oregon, which began in 2001 with six streetcars and eight miles of track; it has expanded to nearly 15 miles and 16 streetcars.

Dan Bower, the recently appointed CEO of the Portland Streetcar, said it can be a laborious process when first starting a streetcar project with unforeseen circumstances that could hinder it.

“Every project has their own time line and politics and everything else, streetcars being one” Bower said. “We went out of our way to have the first American-made streetcar. And that created a certain amount of challenges.”

At the time, most streetcars for these projects were made overseas. But now a handful of American companies make them, he said.

“For us, the longer pieces are lining up the funding, that you have the appropriate funding match, getting your design approved,” Bower said.

Paul Hillegonds, the chairman of the Regional Transit Authority board that was created in part to help move M-1 Rail forward, said he doesn’t think that even with a projected $12 million shortfall in funding the streetcar line will fail.

“It will go forward and it will be important for it to go forward on a timely basis because I believe that we will see its potential benefit to the community even before it’s up and running,” he said. “We’ll see more development along the corridor. But it will be at a point come 2016 where residents of the entire region will see its great potential and how it could be a part of a more comprehensive regional transit.”

Hillegonds also said the M-1 Rail “will help us make our case” for a regional tax or vehicle registration fee hike that would fund the RTA and a proposed bus rapid transit project up Woodward from Detroit to Pontiac.

M-1 Rail officials led by business titans Roger Penske and Dan Gilbert, who have helped organize starting in 2007 the public-private partnership to build the line, have always been optimistic the project will come to fruition.

On May 1, some of Michigan’s Congress members wrote to Transportation Secretary Anthony Foxx with concerns that the project could be in jeopardy without more federal funding. Despite the shortfall, however, M-1’s board of directors voted in June to go ahead with the project, with board members saying the money can be raised though other sources.

The project had been set to break ground in late 2013 and open in late 2015 but delays have stalled the process. Cullen said again last week he expects the project to open by the end of 2016 without any production delays due to harsh winters.

“It takes time to make history,” Cullen said Tuesday. “M-1 Rail is a public-private partnership that is unprecedented anywhere in the United States. The civic, philanthropic and business leadership that has come together to make M-1 Rail a reality is a testament to the spirit of collaboration and perseverance that defines the city of Detroit.”

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