US grants Tucson $63M for streetcar

City scrambled to secure funding before seating of new Congress
2010-12-29T00:00:00Z 2014-07-02T14:42:40Z US grants Tucson $63M for streetcarRob O'Dell Arizona Daily Star Arizona Daily Star
December 29, 2010 12:00 am  • 

Tucson secured a $63 million federal grant for its modern streetcar Tuesday, making it much less likely the new Congress could take away the project's funding.

The city had been scrambling to secure the grant money before the new Congress is seated in early January, because several reports have indicated the Republican U.S. House is poised to take away any stimulus funds that are not obligated. That includes TIGER (Transportation Investment Generating Economic Recovery) grants like the one Tucson received for its streetcar.

Transportation Director Jim Glock electronically signed the paperwork Tuesday that officially obligates $63 million for the modern streetcar. The Federal Transportation Administration announced the potential funding in February.

Until Tuesday, the city had not met the requirements for the $63 million grant to be executed by the FTA. It has done $25.4 million worth of work on designing the streetcar and buying materials but hadn't met the federal government's requirements in other respects.

Securing the grant agreement means the money is obligated and the new Congress can't take it away, Glock said. Congress still could attempt to take away any unspent funding, but that would be more unusual than taking away funds that are not obligated.

"Basically were now protected from any sweeps from the new Congress," he said. "It was a long haul to get here."

Tucson does not yet have the money, however.

The city still needs the FTA to give its approval for the streetcar's environmental assessment before it could draw down on any of the $63 million. Glock said the city had hoped to draw down on a portion of the grant before the assessment is completed, but the FTA denied the request.

Tucson will submit the environmental assessment by the end of this week, Glock said, adding it is expected to be approved by the end of January. Once the environmental assessment is approved, it could take as long as 30 days to draw down the money, although Glock said that timeline could be sped up considerably if needed.

The city must get its environmental assessment approved by the FTA by March 31 or it risks losing the $63 million grant.

The 3.9-mile modern-streetcar route to connect the west side through downtown to the University of Arizona is expected to cost about $196 million.

Tucson needs to raise $26 million more to fund the entire project. The city is seeking more federal money to make up the gap.

If the city can't get the federal money in time, Glock said, it will issue either grant-anticipation notes or certificates of participation to finance the $26 million gap.

Grant-anticipation notes can be issued when there's an expectation of receiving grants from the federal government. Certificates of participation are bonds that don't need voter approval.

Glock said he believes in the end the city won't need that $26 million because he said the bids for the streetcar construction will come in much lower than what's projected by the FTA.

Mayor Bob Walkup, who has been a tireless advocate of the streetcar, said securing the grant "means everything." He said the streetcar could lead to a half a billion in new development along streetcar line.

"This has been a long 10 months," Walkup said. "I believe the money is in our bank."

The grant agreement was described as "nothing but good news," by Gary Hayes, the executive director of the Regional Transportation Authority. Everyone expected the grant agreement to be executed but Hayes said many people were worried about the new Congress voting to take the money away if it wasn't secured in time.

Hayes said he expected the grant to be secured much sooner than it was. The RTA agreed to front part of the $75 million it owes for the streetcar and has already spent $20 million on the streetcar.

Once the environmental assessment is approved, Hayes said the money can come from the federal grant, which will take some pressure off the RTA's cash flow.

"We were waiting with bated breath" for the grant, Hayes said.

Streetcar budget

$75 million

Construction, Regional Transportation Authority*

$63 million

Federal TIGER grant

$6 million

Other federal grants

$10.4 million

Tucson Water

$650,000

Pima County sewer department

$15 million

Regional funding for Cushing Street Bridge

$26 million

Funding gap

$196 million

Total

*Voters also approved $13 million in funding for the streetcar once it's running

Money spent already on streetcar

$19.4 million

Regional Transportation Authority

$4.8 million

Other federal grants

$1.2 million

City of Tucson

$25.4 million

Total

Did you know

Electric streetcars began operating in Tucson in June 1906 as a replacement for horse- and mule-drawn streetcars.

SOURCE: Star news archives

Contact reporter Rob O' Dell at 573-4346 or rodell@azstarnet.com

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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