Archive for the ‘transit’ Category

Planned office tower may take double subsidy

May 17th, 2012 by Administrator
rendering of 444 W Lake St proposal

rendering from Chicago Sun-Times

Two or three developers (depending on which source you read) plan a new 45-story, 900K sq ft, $300 million office tower at 444 W Lake Street. In the world most of us were born into, this would mean they’d purchase the site, continue to pay taxes on it, and on the building when constructed. Thus the prior landowner would benefit from the transit and other infrastructure that we all provide, some part of this cost being offset by taxes resulting from the project.

This particular building, tho, may be a special case, to be built on air rights over the north approach to Union Station, tracks owned by either Metra or Amtrak. So public transportation would benefit, right?  It doesn’t appear so, because, I think pre-Amtrak, the old Chicago Union Station Co. sold off the air rights. The Sun-Times says Larry Levy owns the “site,” presumably including the air rights.

Still, the building will yield taxes which help the comunity pay, right? Not in today’s Chicago.  Blair Kamin says we’ll pay $29 million in real estate tax money to the developer, to build a park.  A commenter elsewhere suggests it might be $40 million. Whichever, of course, that’s on top of all the subsidies we pay to provide transit service and maintain infrastructure without which this building would be infeasible.

The Tribune helpfully notes that the project “is expected to generate … 3,400 permanent office jobs.”  Apparently those office jobs will be created to fill the building and would not otherwise exist in Chicago. The details of this mechanism are beyond me.

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Posted in Chicagoland, land value, mafia, taxes, transit | No Comments »

Almost the best use of CTA rail map for political purposes

May 3rd, 2012 by Administrator

from Chicago Spring

Cute automation at the Chicago Spring site. Best thing: your visit restores the East 63rd Street ‘L’.  Second best thing: Click on a link, it takes you around the map to a destination.  Less good thing: the destination seems to have nothing to do with the subject treated.  Still, it’s a cool presentation.

Somebody somewhere can do something equally original, and even more functional, for the Henry George School.

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Posted in Chicagoland, transit | No Comments »

Securitizing the banksters, with cameras and contracts

February 28th, 2012 by Administrator
Image credit: J D Abolins via Flickr (cc)Just in case there was any doubt, Pam Martens in Counterpunch gives us a report on the Lower Manhattan Security Coordination Center, where feeds from sophisticated spy cameras are integrated to essentially track anyone and everyone on the streets who might interest our supervisors. What’s news here, tho I suppose I already suspected it, is that partners in this operation are not just the NYPD, but also “the same firms under investigation in 50 states for mortgage and foreclosure fraud and widely credited with causing the Nation’s economic collapse.”  Presumably they have added some of the proceeds of their crimes to the $150 million public money that’s been used for this project.
It’s difficult to believe that Chicago doesn’t have something similar.
Meanwhile, and I suppose it’s more relevant to us here, the CTA will be paying up to $58,000/month, plus commission, to Goldman Sachs and other “financial advisors.” The Authority assures us such amounts “are comparatively very small compared to the billions of dollars in much-needed funding CTA would secure” if such commissions are paid. “Funding” more likely means “loans” or “new ways of packaging existing streams of money” rather than any actual additional resources or capture of land value which transit could create.
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Posted in Chicagoland, corporate privilege, Government gone wild, human rights, taxes, transit | No Comments »

Land value impacts of Minneapolis light rail

January 14th, 2012 by Administrator

image credit: Steven Vance via Flickr (cc)

In 2010, the University of Minnesota’s Transitway Impacts Research Program released two studies of the impact of the Minneapolis light rail (“Hiawatha Line”) on real estate values. The residential study (pdf) estimated that houses near rail stations gained a total of $29.4 million more than houses outside the area, and multi-family properties gained a total of $17.7 million.  The  commercial/industrial study (pdf) estimates an increase of $20 per square foot (pdf) of building space, tho they do not extrapolate this to estimate the total impact.  Assuming for the moment that the commercial/industrial impact (which includes much of downtown Minneapolis) is double the total residential impact, we have a total land value gain of $141 million.

Now, that’s a nice amount of money, but building and equipping the rail line cost $715 million in total tax money, and it seems per page 32 of this big pdf to require about $15 million in annual operating subsidy from taxes.  Assuming the construction cost to be financed with bonds costing 4%, that’s an annual cost of about $44 million (in addition to fares collected.)  Can this be justified by a land value increase of $141 million?

It’s a question worth asking, but there are reasons the answer may be “yes, easily.” First, a big shortcoming of the studies is that they compare prices before the line started operating, in 2004, with prices afterwards.  It stands to reason, and has been established elsewhere, that real estate values start rising no later than the beginning of construction for a new rail transit line.

Second, real estate sales price may be the capitalized value of future expected net rent, after taxes, but is only indirectly related to gross rent.  The difference is taxes, not only the real estate taxes collected against the parcel, but also other taxes which operate to reduce rent.  Thus, increased real estate tax, sales tax, state income tax, and other taxes which may occur as a result of the transit line should be recognized as a benefit which the community receives (and collects!).

Finally, the studies look only at the localized effects within a mile of the station. Of course the greatest concentration of benefits will be found in this area, but a small percentage value increase regionwide, which could result from the rail line, could sum to a large amount but would not show up in these studies.

In conclusion, it is certainly possible that the community benefit of the Hiawatha Line, as measured by actual land value, far exceeds the cost of building and operating the  facility. Unfortunately, these studies do not actually test the proposition.

None of this is to say that transit investment always increase land value.  A project whose main purpose is to provide jobs and contracts, with little transportation benefit, might cost far more than the resulting increase in land values (if any).

Thanks to Bill Batt for the lead to these studies.

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Posted in land value, taxes, transit | No Comments »

Secret to adequate transit funding in half a sentence

January 5th, 2012 by Administrator

 

New York image credit: Mo Riza via flickr (cc)

New York image credit: Mo Riza via flickr (cc)

 

Hong Kong image credit: theloneconspirator via flickr (cc)

Hong Kong image credit: theloneconspirator via flickr (cc)

New York’s transit system, like those here on the U S mainland, finds itself in a financially unsustainable position.  Despite huge subsidies from taxation of productive activity, its managers claim a need for $10 billion additional capital funds, and the current year’s budget assumes a docile union as well as $35 million that appears imaginary.

And, like private-sector corporate managers, its chief has departed the troubled system for triple the compensation at a more prosperous organization, in this case the Hong Kong Mass Transit Railway.  Would you blame him?

For those of us who seek reliable transit funding from a source which does not burden productivity, the important point is what this relocated executive calls Hong Kong’s “sustainable financial model.”  And what is that? Simple, and no surprise to those who have been paying attention here.  The Hong Kong Mass Transit Railway Corporation “earns millions of dollars from real estate developments along its rail lines.”  That’s all it takes.  Collect some of the land value, which public transportation supports, to fund the operation at reasonable fares. [Oh, yeah, and get competent managers for the transit operation, but they don't mention that here.]

Source: Former M.T.A. Chief Recounts His Ups and the System’s Downs, New York Times, by Michael M. Grynbaum, Jan 4 2012.  Thanks to Metro Magazine for the link.

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Posted in taxes, transit | No Comments »

North America’s only full service railroad collects land rent

November 7th, 2011 by Administrator

It’s not just in Japan (and Vancouver, sort of) that land rent is used to fund railroads.

Photo Credit: Gator Chris via Flickr (cc)

Originally built by the Federal government and now owned by the State, the Alaska Railroad is “North America’s last full service railroad” because it operates, on its own tracks, with its own rolling stock, freight and passenger service. Revenue is just a bit more than enough to cover operating costs, but how to pay for the capital expenditures– equipment, track, facilities– which must be constantly renewed and improved to run the railroad smoothly? Part of the answer is collecting the land rent. The Railroad owns some 18,000 acres of real estate (see source below), for which it last year received just under $13 million in land rent (see page 34 of this pdf).   This compares to total capital expenditures last year of $73.1 million, with the balance covered from various kinds of grants, as well as operating profit.

ARR provides more information about their leased and leasable land here.

Of course, this is collecting only a tiny part of the economic rent the railroad generates, but at least it’s a source that will grow as the railroad improves.

Thanks to Trains magazine for the original tip.

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Posted in economic development, Georgist teaching resources, land value, transit | No Comments »

Transit advocates get more options

August 25th, 2011 by Administrator

Not more transit options; we’re still stuck with CTA bus, CTA rail, Pace bus, and Metra rail.  But now we have more advocacy options. None of them is easy to join. A biased summary (listed in descending order of web site quality) is:

  • If you believe transit’s main problem is that it doesn’t have enough money to spend, you can support the (newly-announced) Riders for Better Transit. It seems that you can’t exactly become a member; you can only click a box to show your support, and/or join the parent organization, Active Transportation Alliance.
  • If you believe that transit workers are good, kind, noble, and generous, but management is foolish, and, yeah, more money is probably needed too, you can join Citizens Taking Action.  The site gives no indication about how one could join, but does announce, and by implication invite one to, their next meeting.
  • If you think transit riders’ main problem is that transit investments and operations are poorly planned and poorly managed, a lot of money is wasted, and, if any more money is needed, it should come from a tax on land value, because land value reflects (among other things) the quality of public transportation, then you’re invited to support The Transit Riders’ Authority. Find where  it says “join TRA! Here’s a membership application:”  There is no membership application, but a PO Box, phone number and email address are given; perhaps they work.

 

 

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Posted in Chicagoland, transit | No Comments »

Are San Franciscans fatter than Chicagoans?

June 27th, 2011 by Administrator

Many have complained about cattle-car conditions aboard CTA trains, exacerbated by the few, small, and uncomfortable seats. The newest 5000-series cars are probably the worst in this regard, as nearly all the seats are longitudinal, so, if you manage to snag a seat, you’re stuck in a 17.5″ space with cta-rider-bodies on each side of you.  If you’re only 17″ wide (including your arms, unless you detach those for transport), you’ll fit OK provided that you remain quite stationary. And altho the total number of seats is said to be the same as was provided in the 3200-series cars, that’s fewer than any earlier models.

Not that CTA conducted any surveys or hearings prior to deciding on this seating configuration.  For comparison, consider BART, the Bay Area Rapid Transit serving north-central California. Their seats are 22″ wide.  Riders have indicated a willingness to cut that down to 20″, but no further. How does BART know this?

Because they conducted a survey. They took some seats around and asked folks what they thought. They also provide comparisons to seats in other cities, as indicated on this pdf.

Perhaps this has something to do with the fact that the BART board is elected, not appointed.

Have CTA apologists anything to say here?

 

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Posted in Chicagoland, transit | No Comments »

Who needs federal transit funding?

April 15th, 2011 by Administrator

Not the Washington DC streetcar project, which at a cost of $1.5 billion is expected to raise land values by $5 to $7 billion.  (This is the increase in value of “existing properties.” Double it to include the value of new construction.) So collecting just 30% of the increase should be sufficient to pay the cost.

A lot of details are missing from the source article, and so far I don’t know how to get the  study which it describes.

Thanks for Alanna Hartzok for the tip.

 

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Posted in economic development, land value, public policy--nec, taxes, transit | No Comments »

Short term loan at 0%, and how you can get one

February 3rd, 2011 by Administrator

Not from the Federal Reserve; surely none of my readers are “too big to succeed” and therefore qualified for direct quantitative easing. But an arm of the U S Government actually will sell you cash, in $250 increments, accepting credit cards without surcharge (you get any usual rebates or bonuses that your card provides) and with free shipping. The only catch: Your cash is in the form of dollar coins.

Stated purpose of the program is “to make $1 coins readily available to the public, at no additional cost, so they can be easily introduced into circulation—particularly by using them for retail transactions, vending, and mass transit.”  (Your government does not want you to just deposit them in the bank, but CTA farecard machines accept them.)  Altho coins cost more to produce than dollar bills, they save your government money because they last a lot longer.

For those of us who do not love the Federal Reserve, there is also the consideration that the coins are issued directly by your government, the closest thing we have to greenbacks (more about the advantages of greenbacks).

This program apparently has been going on for a couple of years; I learned about it recently from this old post.  It really works; I placed an order January 17, it arrived (by ordinary U S mail!) about a week later, and I will pay for it next week.  Presumably you could roll it over by placing another order.

Of course, what with credit cards, checks, direct bank transfers, etc., I don’t spend $250 cash in any month.  But maybe we’d all be better off if there was more use of the anonymous cash economy, which this seems to encourage.

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Posted in economic development, investments, mafia, poverty, transit | No Comments »
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