Officials celebrate M-1 Rail project funds in Detroit

David Shepardson and Steve Pardo
The Detroit News

Detroit — U.S. Transportation Secretary Anthony Foxx and Michigan politicians and business leaders celebrated a $12.2 million federal grant for the construction of a 3.1-mile streetcar line being built on Woodward.

Fox delivered a keynote address and was joined by Gov. Rick Snyder, Mayor Mike Duggan and other officials to tout M-1 Rail’s new $12.2 million federal grant to help finish the streetcar project.

Duggan admitted there were doubts about the project. But in the end, the collaboration between public and private sectors and the federal government made the project a reality, he said.

“What sets cities aside from suburbs is the density of our population. We were at a point at this county’s history that young people are coming back to urban areas.”

Meanwhile, Ford Motor Co. spokesman Todd Nissen confirmed Monday the Dearborn automaker is making a $3 million donation to the project and will get naming rights to one of the 12 stations. Ford had previously donated $100,000.

In a recent interview, M-1 CEO Matt Cullen said he had won at least $6 million in new pledges, but hadn’t finalized them and declined to name them. The project lost $4.5 million in planned donations when Compuware cut its contribution in half to $1.5 million and the Kellogg Foundation board didn’t approve a planned $3 million donation.

Meanwhile, two 5-foot sections of steel streetcar tracks were signed during a ceremony celebrating the public-private partnership behind Detroit’s M-1 Rail project at Grand Circus Park.

The morning ceremony included Sens. Carl Levin, D-Detroit, and Debbie Stabenow, D-Lansing, and other Michigan members of Congress along with major donors.

The event also featured U.S. Reps. John Dingell, D-Dearborn, and John Conyers, D-Detroit, along with Quicken Loans founder and chairman Dan Gilbert, M-1 CEO Matt Cullen, Roger Penske and Kresge Foundation chief Rip Rapson.

“This is a project that will do wonders to transform inner city Detroit,” Foxx said Friday, saying he thinks the M-1 Rail will help boost development in the M-1 corridor. The city of Detroit noted in its application in April that the area has 245 vacant acres around the corridor. “We’re very bullish on that project.”

In April, the city of Detroit applied for another $12.2 million for the $136 million project — after receiving $25 million in January 2013 from the U.S. Transportation Department. Detroit warned the project could be in jeopardy without additional federal funding, but M-1 decided to move ahead this summer before it got a federal decision — saying it couldn’t afford to lose another construction season and federal tax credits. On Wednesday, the first chunk of the estimated $8 million in New Market Tax Credits closed, M-1 spokesman James Canning said.

Documents obtained by The Detroit News show M-1 lost $4.5 million in planned donations and about $8 million in the estimated value of New Market Tax Credits but is in talks with new donors for at least $6 million in additional donations — and its three major donors. The Kresge Foundation, Quicken Loans and Penske Corp. have all agreed to boost their contributions to help close the funding gap.

The system with 12 stops is expected to have 1.8 million riders in its first year of operation, rising to 3 million by 2035. M-1 has raised $20 million in an operating fund to defray expenses for the first six years — but plans to raise that to $25 million before the first riders use the system, estimating it will need $5.3 million a year to subsidize operating costs initially.

The first shovels went into the ground on Woodward in late July; crews began welding track this week. The 3.1-mile line from downtown to Midtown is to be completed in late 2016. The new award will help M-1 build a vehicle maintenance facility, improve pedestrian access and include a fiber optic duct bank that will support broadband upgrades to increase Internet access at Wayne State University and other educational institutions.

Michigan members of Congress lobbied hard for the award, repeatedly urging Foxx to approve it, as well as writing letters to the White House Chief of Staff Denis McDonough and President Obama adviser Valerie Jarrett in support of the project.

dshepardson@detroitnews.com

(202) 662-8735

Staff Writer Steve Pardo contributed.