This article was first published at the McAlvany Intelligence Advisor on Monday, July 28, 2014:
Construction begins next week on Detroit’s version of a taxpayer “sting” operation: the new M-1 Rail line, also called the Woodward Avenue Streetcar. It’s been in the works for years, but no one could ever figure out how to make it pay, and besides, Detroit is broke. When it was suggested that private money fund most of the $137 million project in the form of gifts and grants rather than as “investments,” it began to get purchase. It’s already $12 million over budget but no one really cares. It’s not designed to make money. It’s designed to set up the Detroit taxpayer in a classic sting.
Once completed, six streetcars will traverse north and south on Woodward Avenue, making 20 stops along the way. The “fare” will be $1.50 but it won’t be strictly enforced. It’s being sold as a “transformational” project to reinvigorate Detroit, using the same tired and fallacious assumption that such an infusion of capital into a public works project will “jumpstart” the local economy. It has just enough plausibility to get it past the somnolent taxpayer.
It will connect with Detroit’s People Mover on the south end and Amtrak 3 miles north. It will make it easy for Detroiters working downtown to hop aboard, provided they’re going somewhere along the line. That’s the first indication that this is a sting.
The second is that nearly 40 percent of downtown Detroit is made up of parking lots. And most of them are empty most of the time. What would be the motivation for people to use a streetcar when they aren’t using cars? Besides, 26 percent of Detroiters don’t own a car. So the logic fails completely.
As Jim Epstein, writing at Reason.com, put it:
[Why] could sane people think a bankrupt city should build a wildly expensive rail line on a partially deserted avenue in a neighborhood awash in cheap parking?
How will the light rail line serve the 26 percent of Detroit households that don’t own cars and depend on the city’s dreadful bus service?
Detroit has a 139-square mile footprint, but the light rail line will serve only those travelers who happen to be going from one spot to another along one three-mile stretch on Woodward.
The third proof that it’s a sting is that the streetcars will be funded privately for the first ten years. After that? It’ll be given to the city to maintain, at taxpayer expense.
The fourth proof comes from a borderline insane editorial from the Detroit News in June backing the project with the skimpiest of logic: the amount of federal money needed to complete the project is so small that the Department of Transportation could probably find it in the department’s sofas! Really. The $25 million, according to these geniuses, is
a pittance for a department that is more accustomed to billion-dollar requests for projects not nearly as transformative as the M-1 rail promises to be for Detroit….
Again, the small amount of money being requested could probably be found in the cushions of the Transportation Department’s couches.
It gets even better, and the sting is becoming clearer:
M-1 rail promises to accelerate the revitalization of the central city, moving riders between the two main centers of development. The hope is the line will help knit together development between downtown and New Center, and possibly go farther north in the future (emphasis added).
This project is all based on “hope” and “promises.” It’s going to be “transformational” for the city.
History doesn’t matter in Detroit. The People Mover has cost taxpayers millions to move a few people around the south end of downtown. Each pays a fare of $.50, far from meeting the actual cost of $3 that taxpayers must pay for each passenger. It has a capacity to move up to 40,000 people every day, but fewer than 6,000 actually use it. But that doesn’t matter. The new rail line is free.
Just like the con artist letting his mark win a few rigged bets to show he can’t lose, the taxpayer is being invited in for a free ride, in the full and complete understanding of that term. Once he’s sold on the certainty of something for nothing, the sting will be administered. Here’s how it will look, from the Detroit Free Press:
The broader vision still needs funding. A plan from the new Regional Transit Authority to ask voters for a fee or a tax to pay for it was delayed last month until 2016, which could give the public time to experience the M-1 line in action.
Depending on what sort of larger system is designed, stretching the line farther north – and east and west – could cost from hundreds of millions of dollars to more than $1 billion.
It’ll take two years to complete the project. Two bridges will have to be completely dismantled and widened. The opportunity for additional cost overruns is enormous. Once operational, however, taxpayers will be forced to learn, once again, that “free” isn’t free. The sting will have succeeded.
Detroit News Editorial: M-1 Rail well worth the money
Detroit Free Press: M-1 Rail groundbreaking nears amid hopes for a broader regional system