Despite grant rejection, Atlanta won't give up on streetcar

By Ariel Hart

The Atlanta Journal-Constitution

In a blow to Atlanta’s hopes for a rebirth in transportation, the Obama administration has passed over the city’s application for a federal stimulus grant to build a streetcar on Peachtree Street.

In fact, in a two-page list of grant recipients including many in the Southeast, Georgia does not have a single project.

"We worked very hard on this project, and we will continue to," said Luz Borrero, deputy chief operating officer for the city. "It was disappointing to learn that we did not get the grant, but at the same time, it is encouraging to see the commitment of our partners remaining intact."

Atlanta Mayor Kasim Reed, who pushed hard for the grant, said in a statement, "Our resolve to see this project through to completion remains steadfast."

Borrero said the city would work on winning other federal funds for the project. That includes competing for another $600 million in federal grants that soon would be available.

This time, Atlanta, local business groups and MARTA had applied for $298.3 million, the total amount needed to construct the streetcar, though Borrero emphasized streetcar-related improvements the city had already paid for in the corridor. The city and the business groups would have shared the cost of operations, helped by ticket fares, advertising revenues, and naming rights. MARTA would have administered the grant. The city also suggested smaller versions of the project. Streetcars operated in Atlanta until 1949.

The administration received far more applications than its $1.5 billion program could fund: more than 1,300 applications, worth $56.5 billion altogether. From Georgia, 23 applications totaled a dollar amount just higher than the entire $1.5 billion grant pool. Gwinnett County applied for six projects, including new interchanges on I-85.

Borrero noted that the city and the business groups, Central Atlanta Progress and the Midtown Community Improvement District, had paid $8 million toward projects such as sidewalks and streetscapes that would have been necessary for the streetcar project.

And Georgia Department of Transportation Planning Director Todd Long pointed out that with some of the other projects Georgia suggested in vain, like a project near the Savannah port, or toll lanes alongside I-75 south of the Perimeter, the state is on track to approve bond funding.

A spokeswoman for the U.S. Department of Transportation, Cathy St. Denis, could not say exactly why Georgia lost its grants. She noted that there were several criteria, including that projects cross jurisdictions, that they improve the nation's economic competitiveness, and that they help air quality and quality of life.

Atlanta's application would put no local money toward the streetcar's construction, whereas Tucson, Ariz., planned to pay a large portion of the building costs of its streetcar project, using a half-cent regional transportation tax.

A U.S. DOT official who asked to remain anonymous due to the sensitive nature of the issue said that not contributing to the capital costs of a project can also be a factor in losing. "It would be much less likely to be approved," the official said.

The grants that went to mass transit projects included streetcar lines in Tucson; New Orleans; Portland, Ore.; and Dallas.

Atlanta should benefit indirectly from some of the grants, including the largest one. That $105 million grant went to Tennessee and Alabama to build freight rail facilities in Memphis and Birmingham for the Crescent Corridor Intermodal Freight Rail project. That rail corridor goes through Atlanta.