A rendering of the Kansas City Streetcar. Via KC Streetcar

Many cities face a similar challenge finding the money to expand a starter line.

Main Street was once the hub of civic life in downtown Kansas City, Missouri, and the construction lining the road gives some hope it can also be the future. By the end of next year, the backhoes and utility trucks will give way to the first streetcar to operate in the city since the late 1950s—a two-mile starter route between Union Station and the River Market neighborhood. The line carries great expectations: officials hope it will anchor an expansion to the east and south, leading to a wide network of streetcars capable of carrying people from their homes to jobs downtown.

That vision suffered a significant setback last month. Voters along the planned expansion routes crushed a measure to create a taxing district that would help fund the new lines. City leaders thought the vote would be close. It wasn't. In a landslide, 60 percent of voters said no to the plan. What appeared to be a popular and potentially momentous effort to spur not only new development but also rail transit across the car-reliant city was suddenly, in a sense, derailed.

The vote left Kansas City mulling a significant question about the future: What exactly does a city do with two miles of streetcar track (sharing a road with rapid transit buses and car lanes, no less)? That could seem like a very local problem, but given the number of U.S. cities building starter streetcar lines with federal dollars, it might become a familiar one. To improve mobility these systems will need to grow (and ideally be given dedicated lanes), but with the prospect of more federal funding dim, cities are struggling to find ways to fund these expansions with local money.

When voters embraced Kansas City’s streetcar project in 2012, city officials hailed the new streetcar lines as the dawn of a new era of rail transit. Planning documents over the past decade touted streetcars primarily as a way to create a sense of place downtown and elsewhere. Planners wanted walkable, bikeable communities—a scarce commodity in Kansas City—and the streetcar was a way to get there.

The long-term plan was ambitious: 10 miles of streetcar tracks stretching along some of the same routes once used by the city's historic streetcar system. The city saw development possibilities throughout the network, but especially in lower-income neighborhoods east of downtown. In a move designed to win approval, officials chose to fund the starter line through a taxing district along the downtown corridor served by the streetcar—a corridor in which only about 600 residents live and were eligible to vote. (Those within the so-called Transportation Development District would pay a one-cent sales tax and property assessments to pay down around $70 million in bond debt used to fund the streetcar acquisition and construction.) The measure passed easily, helping the city to secure a $20 million federal TIGER grant for the $100 million project.

This year, the city proposed another taxing district along the planned expansion lines. But instead of targeting a few hundred voters hungry for improvements downtown, the city had to win over poor and underserved neighborhoods where residents have felt marginalized for decades. Civic groups from the city's east side cried foul, and voters sent a clear message to city hall: They won't have their taxes raised to pay for something they don't need.

The east side wasn't the only area unhappy with the plans. Neighborhoods further south along the Main Street corridor also voiced their displeasure. Activists from the inner-suburbs of Brookside and Waldo flatly said they didn't want the streetcar. The city expected the streetcar to create a sense of place, but those neighborhoods liked their "place" just as it was. Opposition was so vocal that the neighborhoods were left off of the ballot entirely.

"The amenity aspect and the place-making aspect of the downtown streetcar don't sell outside of the central business district," says Lauren Fischer, a Columbia University researcher who is studying the Kansas City streetcar project.

Track work for the Kansas City streetcar is in progress, with service expected to begin by the end of next year. (Via KC Streetcar)

Fischer says the rejection of the streetcar expansion may be a lesson to other cities that are planning for or building new urban streetcar systems, especially Midwestern cities that share many of the same physical, transportation, and demographic traits as Kansas City. For example, all the city's talk about development and economic benefits didn't hold sway in the face of new taxes on low-income residents in east-side neighborhoods. "I think other cities should look very closely about how Kansas City ran its outreach campaign," says Fischer, "and what the talking points were for the city leaders."

Tom Gerend, head of the non-profit streetcar authority that will operate the system, says it's not that east-side voters don't want a streetcar. But they scoffed at having to pay for it when buses work fine and so much else needs to be done.

"The issue was not: 'We don't want streetcars,' " says Gerend. "The issue was: 'How are we going to pay for it, and is the financing mechanism fair and equitable?' " Gerend maintains that most residents want a streetcar system, but that the conversation changes when it comes time to discuss how to pay for it. "The election results were pretty loud and clear," he says.

Despite the loss at the polls, Gerend says the city doesn't feel it's been saddled with a two-mile streetcar line that can't reach its potential, largely because the goal had more to do with economic development than creating a transit system. "It was as much about rebuilding and refilling downtown as it was about moving people," he says. In that sense, city leaders have little doubt the starter line will succeed. Gerend mentions a number of projects along the streetcar route either under construction or in the planning phase that the city believes are a direct result of the streetcar, and the sense of place it will bring to the central business district.

"I don't want to say a no-brainer," says Gerend, "but the folks who were close to it came into it with a lot of confidence, and continue to have a lot of confidence, that this initial project as a stand-alone project would be successful."

Enthusiasm might not be enough. Research that streetcars can boost economic development is scant, and the prospects for such development may be especially tricky without adding streetcar lines to the east and south of downtown, where city planners predicted a significant increase in potential riders. Meantime, there's a lot riding on the economic forecasts, as much of the money to help pay for the operation of the streetcar is tied to the vitality and development of downtown. If the tax revenue falls short of expectations or operating costs run high, the city may struggle to pay down bond debt and run the streetcar often enough to make it a practical transportation option for the downtown workers and residents that will make up the bulk of its ridership.

Ralph Davis, the streetcar project manager for the city, says all of its revenue estimates were conservative and if the district grows as expected, operating and maintaining the streetcar won't be a problem. As for expanding the streetcar system, officials are still deciding how to proceed.

Gerend suggests that while the east side of the city rejected the ballot initiative by a wide margin, there still appears to be support for expansion in the areas just south of the current starter line, from Union Station to the University of Missouri-Kansas City campus. The city may eventually put forward a more modest proposal to expand the streetcar project in that direction. But Fischer says the ballot results leave officials with no clear path forward in deciding how transportation in the city should grow, or whether the streetcar should even be a part of the conversation.

This article is part of 'The Future of Transportation,' a CityLab series made possible with support from The Rockefeller Foundation.

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