Kansas City's streetcar plan got the green light Wednesday, as downtown voters approved a special taxing district to help fund the project.
City officials said they've also found a way to close a $25 million gap in federal funds for the project, and they're now confident they can raise all the money necessary for a $100 million, two-mile streetcar system from River Market to Crown Center.
"This project is a go," City Councilman Russ Johnson told an enthusiastic crowd of transit advocates who gathered at Union Station. "We are on schedule for 2015 and we will be riding streetcars in 2015."
Johnson and others were reacting to the Kansas City Election Board's announcement that the special taxing district had passed by a vote of 319-141.
Mayor Sly James thanked voters for moving Kansas City closer to fixed rail than it has been in decades.
"Because of their efforts, we are closer than we have ever been to bringing streetcars back to Kansas City," he said in a prepared statement. "Advocates for the downtown modern streetcar are tired of talk and ready for action on this issue."
The election board certified the ballots Wednesday from an unusual mail-in election featuring only registered voters living within the boundaries of the proposed downtown taxing district. Those boundaries generally encompass the River Market, the Downtown Loop and Crown Center.
The vote affirmed the district's creation and established the maximum property and sales taxes that can be imposed on downtown residents, commercial property owners and business customers.
"I'm very pleased," said David Johnson, a downtown resident and streetcar advocate, who is no relation to Russ Johnson. "It means we can seek 75 percent of the cost through local funding. It's the critical piece for the project."
The city will need to hold a second election, possibly as early as Nov. 6, to seek downtown voter approval of the specific tax rates. The city is trying to refine the costs for the streetcar system before seeking that second vote.
Based on the margin of victory, both Russ Johnson and David Johnson said they're very confident the tax rates will pass.
Regional Transit Alliance Chairman Kite Singleton, who has seen Kansas City try and fail for years to get fixed rail, was excited something may finally be happening.
"I think this is a great start," he said, adding that it may also jump-start plans for Jackson County commuter rail.
Singleton said he thinks the MAX bus is great, but it lacks the "coolness factor" that streetcars bring, and the ability to serve as a catalyst for more downtown economic development and density.
But many downtown property owners remain outraged that fewer than 500 voters got to make a decision of such magnitude. The election excluded many property owners who don't live downtown but who will be subject to the tax increases.
"They may have had this vote, and it may have been legal, but it stinks," said Sue Burke, who owns Kansas City Air Filter in the River Market. She lives in the Brookside area, so didn't have a vote.
"This toy train, this streetcar to nowhere, is a luxury item for rich downtown-dwelling elites," she said, predicting it will become an "unending black hole of spending" that "will never be self-sustaining."
Don Omer, a longtime resident of the Crossroads, did get a vote -- and voted no.
"I think it's stupid," he said. "I can sit there for 10 years and look out the window, see absolutely nobody riding the MAX buses. What would make you think they're all going to pile into the streetcar?"
Downtown resident Brian Rauber said Wednesday that he "begrudgingly voted for it." Rauber said he believes the streetcar will be a benefit to the entire city, so the entire city should help pay for it.
Yet he still held his nose and voted yes.
"I want it to happen," he said. "I don't trust the leadership to put it together any other way."
If the city ends up imposing the maximum rates, the sales tax would go up by 1 percent within the district. The maximum streetcar district commercial property tax rate would be 48 cents per 100 dollars of assessed value. The projected annual tax would be about $1,500 for every $1 million worth of commercial property.
The tax rate for residential owners would be 70 cents per $100 of assessed value, or $266 annually for the owner of a $200,000 condo.
To help pay the full $100 million cost of the project, the city had hoped to win a $25 million federal transportation grant this summer. Those hopes were dashed in late June when the Federal Transit Administration announced that Kansas City was not a recipient.
But Russ Johnson said Wednesday that the city has figured out a way to close that $25 million gap. He said the city is well-positioned to win $18 million in other federal transportation money that has already been allocated to the region. The streetcar project ranked first among projects scored by the Mid-America Regional Council, and Johnson said he's very confident that money will be forthcoming.
He said engineers have also identified $7 million in cost savings, which would close the rest of the $25 million gap. Part of the savings comes from eliminating a station and stopping the streetcar on Main Street near Union Station, instead of having the route turn and stop in front of the Westin Crown Center hotel.
On the local funding side, the city said it would borrow much of the money for construction and needs to raise about $10.4 million annually to pay the debt service and operating costs for the system.
Under current financing estimates, the sales tax would raise nearly $3.9 million of that. Commercial property owners would contribute about $2.4 million annually, and residents would contribute about $833,000 annually. Non-profits would contribute about $400,000. The city would contribute $2 million annually, and the system would get additional revenue from advertising and ridership.