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Light Rail Sparks a Change in Mesa

When it comes to light rail, one of the biggest challenges Valley Metro has in the Phoenix Valley is that it can’t build it fast enough. There are two projects currently under construction in north-central Phoenix and in Mesa. “We’ve got plans to even extend further on both ends of the line,” Valley Metro CEO Stephen Banta said.

Underway is a an extension through Mesa and city of Mesa Mayor Scott Smith, also the incoming president of the United States Conference of Mayors, said he sees the option of light rail creates a lot of economic opportunities. The city even repurposed federal highway monies to do the extension.

Route Plan Development

When Smith came into office, there were some details of the extension that hadn’t been decided so the city needed to choose whether to go through downtown or to skirt the downtown.

“That was a huge policy issue for Mesa because with that we defined what we expected our development to do and that was a big debate,” Smith said. “The question is if you’re going right down Main Street, which already has a median and four lanes and parking on either side, you are changing the manner of our downtown. We couldn’t say no, we’re not.”

Mesa went with the decision to go through downtown because without that change they believed the downtown would remain forever in a holding pattern. Smith said, “We did not believe we could really create anything great with what we already had without making this major change.” He continued, “I’ve had downtown members say, ‘You’re going to change downtown,’ and I’ve said, ‘Yeah, we are. Forever. And you’re going to love it; it’s going to be great.’”

Smith described downtown Mesa as “Main Street USA.” It’s a mile of shops and their downtown rush hour is a lot of midday riders. He said a lot of them are seniors going to places they wouldn’t drive. Downtown is a destination. It also has one of the most visited spots in the state that was man-made: the Mesa Arizona Temple. The Easter pageant draws more than 150,000 people over nine or 10 nights.

Smith explained how oftentimes the economic development is to build a station and plant TOD around it while what they’re looking to do in Mesa, an economically compact area, is to redefine it without rebuilding it.

“The extension was purely us. Not a regional plan,” Smith explained. “We did not have funding identified for it but we believed the long-term future of light rail is to extend beyond downtown and to eventually … get out to Phoenix-Mesa [Gateway] Airport, which is another 15 miles out there.”

Using Road Money on Rail

As with most Western communities, light rail is extremely controversial. Phoenix had decided it was going to do something with or without the region. Smith said, “It obviously made more sense to do it with the region and actually finish it because they didn’t know if their tax would really build what was needed to be built.” He continued, “So they included a transit component inside the Prop 400 but most of it was freeway and regional cities.”

He explained there was also a concept called regional equity, a regional plan to make sure that communities weren’t locked out. It’s not dollar for dollar he said, but you give in and they get projects that come back to you so the citizens are getting their money’s worth out of it. He said, “That was important to get passed.

“There also had to be the confidence that you did not take freeway money … because people would have said this is a bait-and-switch.” There were firewalls set up in place to prevent that.

Mesa finished its freeway and there were a lot of significant street programs and in the seven to eight years since they had passed that, the street program already has changed. “We actually have streets that no longer need to be built because development came along and the developers widened streets, widened intersections,” said Smith.

Development patterns changed and they found out the original plan wasn’t the corridor they needed to build. So they were sitting with money that could only go toward regionally significant projects. They thought of extending the light rail but there were those firewalls in place to prevent the Prop 400 monies from being used for that. There was one big pot of Prop 400, state monies and federal monies. Once in that pot, the federal money had no silos.

“I think it was in President Reagan’s years that they allowed trade-offs,” he said. They looked at the possibility of taking that street monies that they were never going to use and repurpose it to do the 2-mile extension. “We had a lot more in street funds than we had allocated for the cost of the 2-mile extension,” Smith said.

“They’re not our monies, but they’re basically our money to decide the priorities with the acquiescence and approval of everyone else in the region.” Smith said it was one overpass and they didn’t need it anymore, it would have been a waste of money to build. But if they used the monies and allocated it to the light rail extension, then everybody wins. “Because unlike a local street system that is regional in nature, but it’s really local, we are adding to what is truly a regional light rail. Light rail is not a local system; by definition it’s a regional system.”

Smith said they got widespread support because people understood the approach. What they needed next was a funding mechanism to allow acceleration of construction to bring it all on at one time.

Ten or 15 years ago Smith said they came up with a mechanism, Highway Project Advancement Funds, at the federal level, TIFIA funds. “If you have a dedicated stream of funds coming in, it allows you to issue bonds right now, build the project now and take from the stream of money to repay,” said Smith.

“We’ll issue these bonds so that they’re interest-only for the next 6 years,” Smith explained. “The city will pay the interest than the normal cash flow will pick up and will pay off the debt. That way we accelerated the construction.

“We went through the legislature and expanded the program … so it includes … anything related to transportation.”

And there were detractors. With the risk, they were questioning what if the monies never show up? Smith sees it as a calculated risk with a certain amount from the federal government. He said every calculated risk taken so far, the development revenues and success has far outweighed the risks.

“By doing this now we’ve saved so much money that actually the savings pay for the interest,” said Smith. “We’ll be able to build it less expensively than if we waited so we think it’s worth the risk.”

Light Rail Changing a City

“We have four liberal arts colleges from around the country that are setting up campuses in downtown Mesa,” he said. “They are looking for a place to expand and they’re coming to downtown Mesa.” He stressed, “Every single one of them said without light rail, we’re not coming to downtown Mesa.

He also mentioned the Barry & Peggy Goldwater Library and Archives is going to be built in downtown Mesa and the reasons were that there were four colleges coming in and there was light rail coming in. Smith also mentions that the last private investment in resident stock had been an apartment complex built almost 30 years ago and that in the last 10 months, there are four projects not going in that are in excess of $50 million, purely because of light rail. He said, “These are things that would not have happened.”

Even though Valley Metro’s light rail system is nearly five years running, the novelty still hasn’t worn off, Smith said. People go down just to ride the light rail. And, they’re taking cars off the street where people are adjusting their lifestyle.

“In every great metro area you have options,” said Smith. “You’re never going to get rid of freeways, you don’t want to get of those because that’s not how people want to live. But, there are a lot of people who want to live in a more urbanized [area], a lot of businesses that want to congregate and cluster around transit corridors and light rail is the one they want to be around.

“When you have that option, it creates a lot of economic opportunities and that’s how we look at it.”

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