An Open Letter to the Chicago Transit Authorityby Presidio Capital Markets on Sunday, Dec 9th, 2012 ShareClick to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)This open letter is a project of the 2012 Presidio Graduate School’s Capital Markets class. To read more letters, visit the project page here.An Open Letter to the Chicago Transit Authority,I am a MBA student at Presidio Graduate School studying the Chicago Transit Authority, specifically ways in which the organization can viably maintain service without the continued threat of increases in fares and cuts in service. I am sure you are aware of the many social, economic, and environmental benefits a well-run public transportation system offers a community. Public transportation is necessary for a city to grow sustainably. It reduces congestion and emissions while increasing mobility and economic opportunities. Public transit creates jobs, gets people to their jobs, and generates business in areas located near transit lines. It allows people without other transportation options to be active members of their communities and encourages exercise. It makes living in a city as large and expensive as Chicago feasible for millions of residents, including myself. As a resident of Chicago who uses the CTA daily, maintaining its affordability and reliability is more than just an academic exercise.The CTA is in need of improvements to reduce crowding, renovate dilapidated stations, make stations handicapped assessable, and eliminate slow zones. Funding these improvements through cutting service and increasing fares is unsustainable. It will discourage ridership, particularly for those who have no other transportation options due to financial reasons, and make commutes more difficult. Relying on these strategies to close financial gaps will drive the system towards inefficiency and disproportionately impact segments of the population that depend on the system the most.In recent months both individual riders, as well as business owners located near bus lines that were proposed to be cut, lamented the most recent round of proposed service cuts. Both parties understand the value of having access to public transit. In order to successfully fund the improvements and operations of the CTA I suggest implementing a form of value capture. Value capture attempts to recover the benefits experienced by all entities as a result of the existence of an efficiently run and well maintained public transportation system. Riders currently pay for their benefit through the standard fare paid every time they step on a bus or train, but the opportunity to recover benefits from other benefiting entities remains.There are several different forms of value capture that attempt to recover a portion of the benefits businesses and land owners experience every time a rider steps onto a bus or train. Some of these forms have been successfully implemented in other cities throughout the US and internationally, including Land Value Taxes, Tax Increment Finance, Special Assessment Districts, Transportation Utility Fees, Joint Development, Air Rights, and Development Impact Fees. In a 2010 report done for the Chicago Metropolitan Agency, S. B. Friedman & Company outline opportunities associated with implementing these forms of value capture. While the strategies in the report focus on value capture as a funding mechanism for new construction, they do have potential to offer ongoing funding for operations as well. I would encourage the CTA to explore these ideas, and work to find solutions that would allow them to be successfully executed, rather than returning to the same strategies that have been proven unsustainable.Thank you for your time and consideration on this matter.Sincerely,Lindsey Kauffman Follow Presidio Capital Markets @triplepundit 5 responses This is a great letter in principal but it begs the eternal question – exactly where shall this money come from? And how do we know it will be efficiently implemented?I don’t know about the CTA but here in SF our (generally mediocre) transit system does nothing but beg for money when most of their problems would not cost anything to fix – redundant stops, badly routed busses, bad communication, an most notoriously an overpaid management and an equally overpaid and corrupt union. The problem with your argument isn’t the argument, just how it is directed. The CTA doesn’t gain any of the economic benefits you lay out in your first paragraph. The benefitees are the property owners, developers, the city, etc. That’s the justification for the kinds of funding streams you mention (value capture, etc.) BUT THE LOCAL TRANSIT AUTHORITY has limited to no ability to enact any of those mechanisms. They are measures that are enacted by local and state government.So the issue becomes how does the city and its leadership recognize the primacy of transit to its livability and economic competitiveness and come up with a funding stream beyond fares that supports the transit authority.Otherwise all the transit authority does is manage its budget, and make cuts based on economics, without necessarily considering broader level of quality and network breadth and depth issues.http://urbanplacesandspaces.blogspot.com/2012/07/metropolitan-mass-transit-planning-more.htmlNote that a transit authority doesn’t do ec. dev. planning. It does transit planning and operations. So ideally, the kind of stuff you write about is happening within the city’s transportation and land use planning operations, and the MPO (CAMP in Metro Chicago).RTA had regional planning initiatives not unlike what you wrote about, but I don’t know what kind of impact they had.http://rtachicago.com/downloads/RegTransportStratPlan_FinalReplrez_031207.pdfAnyway, your class seems a bit deficient in structure if it doesn’t help you all properly identify the various actors in the system, where they sit, where they stand, what they influence, what they can do legally, and what they can’t do.http://urbanplacesandspaces.blogspot.com/2009/11/st-louis-regional-transit-planning.html Excellent letter. More information about value capture can be obtained from an article, “Using Value Capture to Finance Infrastructure and Encourage Compact Development.” It can be found at https://www.mwcog.org/uploads/committee-documents/k15fVl1f20080424150651.pdf New results require new thinking. One idea is to tax cars heavily to incentivize owners to use public transportation, while funding it. Imagine how different our city would be with free and convenient public transportation. Increasing fares and cutting routes is not the answer. IF IT IS TRUE that available Transit Funding dollars are shrinking, than it is all the more important to use every Cent of every Transit Dollar most profitably. WA S T I N G $1.5 Billion to provide CTA ‘L’ service to the Far South Side is one example of something that could accomplished for ONE-SEVENTH the Total Capital Cost: http://www.grayline.20m.com http://bit.ly/GrayLineInfo.Jon Hilkevich himself did an Article about the CTA Gray Line Project 10 years ago: http://articles.chicagotribune.com/2002-11-11/news/0211110171_1_transportation-planning-trains-mccormick-place.The 6 mile 4 station CTA Red Line Extension for 1.5 BILLION Dollars ( Compared Side-by-Side ) With the 25 mile 40 station CTA Gray Line Project for 200 MILLION Dollars: http://www.grayline.20m.com/photo.html.Taxpayers United of America recognizes this — and told CTA this at the October 2010 CTA Board Meeting: http://www.taxpayersunitedofamerica.org/commentary/itef/cta-to-waste-12-billion-in-red-line-boondoggleWhile CTA, and Metra are wholly aware of the Gray Line Project — and it’s Capital and Operating economies, it it NOT a priority with either Agency; hopefully that can be changed. ______________________________________________________________________Like most all of CTA, Metra, and Pace’s Transit proposals – the Gray Line is I N C L U D E D in CMAP’s (the Chicago Metroplitan Agency for Planning) Regional Transportation Plan (“CTA Gray Line ‘L’ Route” Project – RTP Project ID# 01-02-9003). See “Metra Electric District Improvements” at bottom of page: http://www.cmap.illinois.gov/shared-path-2030/project-links.IT IS the O N L Y Plan in the RTP that was Submitted BY and Accepted FROM a Private Individual, rather than one of the Transit Operators – or a Government Agency or Municipality; and it took several years to pursued them to change their policy to accept submissions from Individuals and/or Community Organizations. ______________________________________________________________________The Gray Line ranked highest in a Study of Projects in the Regional Transportation Plan done by the Center for Neighborhood Technology/Chicagoland Transportation and Air Quality Commission: http://www.grayline.20m.com/favorite_links_5.html.Notice how on the attached copy of the CATS Shared Path 2030 Page “Information regarding Proposals in (repeat “IN”) the 2030 Regional Transportation Plan” where the “Gray Line Rapid Transit Element” is indicated for the “Electric Service” (Metra Electric District), with a link to a PRIVATE CITIZEN’s WEBSITE:http://www.grayline.20m.com/ EVERY other link on the Page is to a Government Agency. ______________________________________________________________________CNT/CTAQC 2003 CATS RTP Project Study: http://www.cnt.org/tsp/trans/ctaqc/projectscoring.htm.+ In 2003 the Center for Neighborhood Technology, and the Chicagoland Transportation and Air Quality Commission did a Study of the Transit/Transportation Major Capital Projects included in the Chicago Area Transportation Study’s 2030 Shared Path Regional Transportation Plan.The Projects were judged separately on 15 different Criteria, and points awarded for each. Then each Projects accumulated Point Totals were scored and compared. This is a very fair and impartial method of Scoring – And it would be difficult to manipulate the Results.+ This is a Detailed Description the Criteria used to judge each of the 2030 CATS RTP Major Capital Projects:CATS Project Scoring Criteria: http://www.cnt.org/tsp/pdf/Criteria%20Project%20Scoring%20-%202003.pdf.+ Here are the Results – Comparing the Cumulative Point Totals E A R N E D by each included Major Capital Project. NOTE that with the Highest Point Total of 78 – the Gray Line Project (mispelled “Grey”) E A R N S THE TOP SCORE:CATS Project Scoring Results: http://www.cnt.org/tsp/pdf/Criteria%20Project%20Scoring%20-%20Project%20List.pdf.______________________________________________________________________Getting on Track – CNT/CTAQC 2009 Publication: https://www.box.com/shared/bbftp6l7sp.And In this 2009 Center for Neighborhood Technology / Chicagoland Transportation and Air Quality Commission report on Transit and Transportation Issues – Pages 13 through 19 pertain to various ways of improving Chicago’s CTA ‘L’ System.At the Top of Page 16 CNT/CTAQC make the following Recommendation: “The Chicagoland Transportation and Air Quality Commission, affilated with the Center for Neighborhood Technology, ranked the GRAY LINE as the most SENSIBLE and WORTHY Transit Idea out of A L L the Transportation Projects being proposed for Chicagoland”!______________________________________________________________________Here is a Prototype Model of on of the new Nippon-Sharyo Metra Electric District EMU’s modified for Rapid-Transit type operation: http://www.grayline.20m.com/photo3.htmlFor economic reasons, half of the new MED EMU’s will not be equipped with washrooms.The vacated washroom bays on all four quadrants around the Center (and End – ala’ NICTD) Doors could be equipped with Stanchions, and Grab Bars to accommodate Standing Passengers and Crowds — Also to be utilized as a Staging Area for Alighting and Boarding passengers.For Questions or Information about the CTA Gray Line Project contact: Mike Payne email@example.com. or Google Search: CTA Gray Line. Comments are closed.