City officials: It will cost up to $47M to cancel Cincinnati's streetcar project

Cranley: Figures are 'absurd' and 'a scare tactic'

CINCINNATI -- City officials said Thursday it would cost up to $47.6 million to cancel the controversial streetcar project that is in the midst of being built. 

The city has spent or incurred $32.8 million through November on the project driving the total cost to halt the project -- a campaign promise made by Mayor-elect John Cranley -- to be as high as $80.4 million.

The current council has a majority that supports the project, but Cranley and the newly elected council members have talked about canceling it shortly after they take office Dec. 1.

Figures prepared by city administrators and shared with the current City Council, who called a special meeting Thursday, indicate the range would be between $30.6 million and $47.6 million to cancel the project and close out contracts.

Adding in the total spent to date, that range increases to between $63.4 million and $80.4 million.

“None of those costs reflect any litigation,” said John Deatrick, the city’s streetcar project executive.

Streetcar supporters have said some companies working on installing tracks, moving utilities and designing the streetcars likely would sue over the broken contracts.

Also, some residents and business owners who bought property along the planned route based on the promise of the project being built are considering lawsuits.

Further complicating the next council’s plans are Deatrick’s estimates that it would take one to two months to draft a cancelation plan, and take six months to one year to fully shut down the project.

“It's a very complex process but it certainly can be done," Deatrick said.

Streetcar supporters have said the project’s main benefit is economic: It will attract redevelopment along its route, increasing property values and attracting new residents.

"This is another transportation project that could have a transformative effect on economic development," said Vice Mayor Roxanne Qualls.

Qualls added that if the estimates are accurate, it doesn’t make financial sense to cancel the project.

Qualls recently ran for mayor against ex-City Councilman John Cranley, but lost the November election. Qualls supports the streetcar, while Cranley is opposed.

Outgoing Mayor Mark Mallory is a streetcar supporter, as is Councilwoman Laure Quinlivan, who lost a reelection bid.

The next City Council will include newcomers Kevin Flynn, a Charterite; Democrat David Mann; and Republican Amy Murray. All have indicated they endorse canceling the project.

All three sat in the audience and watched council’s Thursday meeting.

“After listening to a presentation like this, I trust you will make the right decision," Quinlivan told the trio. “To throw this away would just be unconscionable.”

Streetcar opponents countered the costs presented at City Council’s special meeting don’t include annual operating costs or the cost to eventually extend the route to uptown near the University of Cincinnati.

City Manager Milton Dohoney Jr. has said previously the project isn’t worth doing unless the uptown connector is built at some point.

Annual operating costs are estimated at $3.4 million to $4.5 million.

Additionally, the uptown connector’s cost is estimated at $43 million.

Cranley called the numbers given at council’s meeting “ludicrous” and “a scare tactic."

“It was an absurd cancelation cost analysis,” Cranley said later by telephone. “It doesn’t cost $40 million to say ‘stop’ and it doesn’t take a year to say ‘enough is enough.’”

During council’s meeting, Cranley said he was meeting with Carter-Dawson, the developer of The Banks riverfront district project. The mayor-elect said he discussed using some streetcar money to quicken development of Smale Riverfront Park and build future phases of The Banks.

Cranley said he doesn’t trust the data presented Thursday.

“We will bring in a new leadership team to do an honest, independent evaluation,” Cranley said. “I believe we can negotiate in good faith with local companies about ending the project and lower the costs.

“The voters were clear they want to end this project,” he added. “We will level with the public about the real trade-offs. I promise you it won’t be $40 million.”

Some streetcar supporters include the $44.9 million in federal grants Cincinnati likely would have to return in assessing cancelation costs.

With the grants included, there is only an $8 million difference between canceling the project and building it, they said.

"If we do this project, everyone benefits,” said Councilwoman Yvette Simpson. “If we cancel this project, no one benefits.”

The streetcar project’s first phase involves a 3.6-mile looped route through downtown and Over-the-Rhine. Five streetcars will operate up to 18 hours a day, 365 days a year, if completed.

A total of $147.8 million has been earmarked for the streetcar project.

The amount includes $44.9 million in federal grants; $87.9 million in local funding; and $15 million in escrow for a legal battle with Duke Energy over who should pay for relocating utilities along the route.

In late 2012 City Council

narrowly approved spending $20.5 million to buy five streetcars from Spain-based CAF. The cars currently are being designed.

Also, crews began work in August to relocate utilities and install track along the route.

About 1,800 feet of track has been installed, which equates to 900 feet of track on each side, Deatrick said. Another 1,200 feet is being prepared.

In all, 35,000 feet of rail has been bought by the city.

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