A Public-Private Partnership for Transit

Indy’s soon-to-be-complete Cultural Trail has been heralded since its inception as a triumph in public-private partnership. Combining federal grants and private donations, the Cultural Trail has significantly added to the walkability of downtown without much reliance on local tax dollars. With the recent influx of development in Fountain Square in anticipation of the trail’s completion, it’s hard not to see the project as a success.

My question for the day is this. Could Indy create a better transit system using a similar public-private partnership?

At its core, a transit system runs up against the same basic issues that the Cultural Trail faced – primarily the repurposing of land and streets for the project. A streetcar or elevated rail system could use the Cultural Trail as its model for taking away lanes from auto traffic. After all, if the city-county council went along with something as unique as the C.T., how could it not agree to a transit model that uses a similar funding technique.

Obviously, a transit system runs a significantly higher bill than the Cultural Trail did. The C.T. will be completed for $55 million, while the recent Indy Connect plan calls for funding of $2.5 billion. However, between the many foundations that generously gave to the Cultural Trail and the many corporations in the city that would benefit from doing business in a city with better transit, I’m positive that a number north of $100 million could be achieved. $100 million is certainly enough to build a streetcar system not unlike the one in Portland.

In a community so traditionally auto-centric at a time when taxpayers across the country are balking at government spending, I think the public-private funding approach might just be the best way to jump start our city’s public transit.

Comments 14

  • I cringe when I hear the term “public-private partnership.” We have numerous examples around town and they almost all involve taxpayers subsidizing private business ventures, making private busienss owners wealthy at the expense of taxpayers.. They generally aren’t set up to do what’s best for the city, but rather what’s best for politically connected companies wanting to cash in tthe politicians willingness to pony up our tax dollars to these companies that often kick back political contributions to the pols.

    Some recent examples: Lucas Oil Stadium, Conseco Fieldhouse, The North of South Development, the Downtown Mall, the East Market Street development.

    Once taxpayers money is on the hook, the private companies inevitably come back and ask for more tax dollars. Then the argument is that we need to keep pumping more tax dollars in to keep the public-private project going. We taxpayers need to stop subsidizing business development. It doesn’t work.

  • I’d argue that Circle Center helped to stabalize and even draw back a segment of population that would have fled to the suburbs for a shopping mall. The NoS development impacts remain to be seen, but hopefully it begins an important connection and dialogue to the south side of the tracks. LOS was a huge expenditure that could have gone differently. It is a shame that pro sports now hold there host cities hostage for more. We are fortunate that our stadium is downtown and can make that connection, but when you go from $80+ million for the Hoosier Dome to $800 million for LOS, something went wrong. Conseco was similar to LOS, the difference is that something like a basketball arena or baseball field holds many more events each year than a football stadium and becomes easier to justify.

  • Kevin, first it takes a community champion willing to devote years of effort to fund-raising. No Brian Payne, no Cultural Trail.
    Who’s going to bet his or her professional reputation and career on public transit in Indianapolis?

  • Joe, the renters at Circle Center Mall want more subsidies to stay. Conseco Fieldhouse, we built the thing, gave away 100% of the revenue and then the Pacercs conned the city into now paying to also operate it. Lucas Oil Stadium was a bad deal from the beginning. The notion of giving away 1/2 of the non-Colts revenue on the building is insane. The North of South Project, Buckingham couldn’t get anyone to finance because it was too risky and they got the taxpayers to put up $100 million to back the project. Why is govenment a better predictor of economic success than the private sector? It isn’t.

    If public is doing infrastructure improvements that’s one thing. When public becomes the source of financing for private sector projects, it’s not a “partnership,” it’s corporate welfare.

  • Paul you make a good argument.
    However, mass transit is a different animal. When is some private business going to step up and fund a streetcar? When is Lily or Anthem or any of those big corporations going to say, “Alright, this sounds like a great idea! Lets give away $100 million to make this thing work with no promise of a return on our investment beside knowing that it was a great contribution to the social fabric of our city.”
    Great story, but you know how often that happens? VERY VERY VERY rarely. No private company is going to jump up and offer this without some sort of incentive to do so. Plain and simple. It is the same reason that no one builds roads unless they are toll roads. It is the same reason why suburban developers as the town/city to front the money for streets, sewers and water. It never pays for itself. Taxes pay for it. Plain and simple. Even PPP is going to require a tax based subsidy of some sort.
    Believe me, Im all about keeping our taxes as low as possible while providing services that supprt and enrich our lives. If you have a better proposal on how to finance mass transit, Im all ears .

  • Interesting. Not that I think all of the projects listed were good deas or even for the good of out fair City, but I can’t imagine what our downtown would be like with no Conseco, Lucas, Circle Center, Canal, White River State Park – all of which could be considered a public private partnership to some extent. I have seen projects die (and not just a couple) because of lack of partnership from the City. If there are better projects (revenue generating, people bringing projects) that are out ther, let people know and build some momentum for the City to support those. Lucas Oil, JW Marriott, Convention Center – they ALL had their Brian Payne’s who made them happen and staked their careers on their project. Could we do better with project selection and the end deal that the City gets? Yes, but don’t kill the folks out there who are risking money and reputation to make our downtown better.

  • If Detroit can finance transit through public-private partnerships, I would think Indy could. It comes down to the community leaders’ and business leaders’ desire for transit. And I don’t think there is much in Indy.

  • Detroit also suffers from a much different conunrum than we are. Their leaders are hoping that rail transit can spark a return to the city. Their need for people to return is much greater than ours and so is the perception. People there have a lot more to lose if people keep on leaving. That isn’t the case here.
    Indy has a great history of philanthropy when it comes to building things. I’d like to think that there are some people out there that have some spare change sitting around they wouldn’t mind contributing to such a system. But it is going to take a highly measured effort with a highly probably social change as the result to make said people open their wallets.

  • The obvious stakeholder in this development is Lilly, but there are many other downtown employers who would probably welcome the mass transit project. I think it would be less of a problem to get private sector involved, because they probably get it. However, mayor and his team don’t seem to be on the same page.

    I haven’t had a chance to research the details of how “Citizens Gas deal” money is being spent, but from what I can see around the city, most of it seems to be spent on roads (timely before election). That’s a wasted opportunity, when you know that you can probably get federal government and private sector to match (or more than match) your investment in mass transit.

  • There is a better public – semi private partnership that could easily be expanded. The already operating people mover from IUPUI to Methodist Hospital could be extended to Ivy-Tech using the same proven equipment currently in operation, same parts , service, security, signaling, etc. going over the same public streets. The system, while not perfect, is currently working. If desired expand from growing Ivy-Tech to old Winona and create assisted living/nursing home/neighborhood center (as proposed by a Denver firm) rather than tearing it down. Running overhead along the proposed IU life sciences corridor would eliminate most housing destruction and attract passengers. Ivy Tech are taking over a lot of IUPUI undergrad work at a student and parent friendly price, and they could commute to jobs at Methodist – IU, and use the bigger taxpayer funded libraries at IU. I could go on, but this is the cheap, quick way of giving a taste of useful local transit, and does not preclude bullet trains to Fisher, rockets to Chicago, etc. later..Ray LaHood in his blog has mentioned several “cheap” shovel ready projects USDOT have funded, a category this fits into.

  • JP,

    I’ve learned that whenever anyone uses the word “stakeholder” they are after taxpayer money.

  • Paul-

    I think it’s pretty clear that for any kind of mass transit, it will take federal/state tax money to get the job done. The same is true for most long-term investment in infrastructure. It seems popular today to talk about government spending like it should be completely forbidden, but I don’t want to get into economics and politics here.

    Since this is a topic about public-private partnerships, I wanted to point out that there are many examples of such partnerships not working out. However, we should focus on those that went well and understand why they went well. For instance, Paseo del Rio (a waterfront improvement in San Antonio) is an example of successful partnership with public funding in the first phase and private initiative in the second. I think that for most large urban projects to be successful, it requires good planning, public participation as well as private entrepreneurship.

  • Denver and its Eagle P3 project has been propped up as a good model. It too, still requires tax dollars to function.

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