ROCHESTER LIGHT RAIL TRANSIT

ECONOMIC DEVELOPMENT FEASIBILITY STUDY

CITY OF ROCHESTER

WILBUR

SMITH

ASSOCIATES

BRW

Erdman Anthony

Fisher Associates

March, 1998

The Rochester Light Rail Economic Development Feasibility Study focused on determining the economic development impact of light rail transit on the community. The City of Rochester received a New York State Member Item Grant to conduct the study and collaborated with the Genesee Transportation Council. Representatives of the Rochester-Genesee Regional Transportation Authority, the New York State Department of Transportation (NYSDOT) and Rochester Rail Transit Committee (RRTC) provided technical guidance during the study. The City of Rochester contracted with a consultant team led- by Wilbur Smith Associates to evaluate the economic development potential and feasibility of light rail transit. The study team included Erdman Anthony and Fisher Associates of Rochester, NY and BRW of Minneapolis, MN. The results of this study will assist local officials in reaching consensus regarding the future status of the Broad Street Subway. The study is also intended to encourage dialogue regarding urban development objectives and their relationship with light rail transit investment initiatives.

The City of Rochester was once the smallest city in the United States with a grade separated rapid transit system, the Rochester Rapid Transit and Industrial Railroad (Subway). The Subway utilized the abandoned right-of-way of the former Erie Canal. Subway service commenced on December 1, 1927 and continued until June 30, 1956. The City of Rochester because of declining patronage abandoned the Subway. Segments of the abandoned rail transit right-of-way were then utilized by the City and NYSDOT to construct portions of I - 490 on the City's southeast side. However, the Downtown subway tunnel was never completely abandoned and continued in use for delivery of newsprint by freight trains to a Downtown newspaper publishing plant until 1997.

Numerous studies have tried to determine the viability of restoring rail transit service throughout the Genesee Region. Many of the studies came to a similar conclusion: light rail transit could not be "self-sustaining' but the existing rights-of-way were valuable resources that should be maintained. In 1995, the Genesee Transportation Council's (GTC) Long Range Transportation Plan recommended that several travel corridors be examined for possible high capacity transit service. In 1996, the GTC High Capacity Transit Study Summary Report concluded that without significant changes to background policies and conditions, rail transit in Rochester could not be justified solely on the basis of potential transportation benefits but also concluded that the rights-of-way should be maintained. The study also recommended that the City examine the relationship between urban development objectives and rail transit investment strategies.

The Light Rail Economic Development Feasibility Study provides the framework on which to make a more reasoned investment decision regarding light rail transit. The study also examined what should be done with the Broad Street Subway.

The City of Rochester defined the study purpose in terms of economic rationale. The City sought an in-depth analysis of the economic development issues and related impacts that may be induced or propagated by the proposed light rail transit system within a Corridor that linked Ontario Beach Park with Downtown and the University of Rochester.

The objectives of this study are to:

• Determine how light rail transit may foster economic development along its route alignment and contribute to the growth of the Rochester economy.

• Determine the related synergies and impacts within which economic growth and development is enhanced by investment in light rail transit.

• Determine the economic feasibility of light rail transit in the North-South Corridor.

In addition to these general economic objectives, the study had an underlying goal of determining whether there is sufficient economic justification to rehabilitate and preserve the Broad Street subway tunnel for future light rail transit operations.

The purpose of this study is to determine the economic development impact of light rail transit on the community.

The light rail transit line links three geographical areas of the city:

• Lake Ontario Beach

• Downtown Rochester

• University of Rochester

The Greater Rochester area has grown.

The number of trips made by people living in the region has grown. People travel further distances due to the ever expanding geographic area typical of urban sprawl development patterns. The size of the region and the diversity of destinations is one of the primary reasons that automobile travel in this area is so prevalent. Cars are much more convenient for reaching the variety of suburban destinations. A secondary reason for the heavy use of automobiles has to do with the perceived cost of driving. Gasoline prices and parking fees in the Rochester region do not add a substantial cost to driving. Aside from the purchase price of the car, which varies greatly, people do not perceive public transit as any more economical than driving themselves.

Public Transit Services - The Rochester Genesee Regional Transportation Authority bus system is still oriented to Downtown and is most efficient when transporting people from residential neighborhoods to Downtown. Utilizing public transit to reach multiple suburban destinations is difficult and time consuming. Approximately 20 percent of the city population utilizes public transit on a daily basis. This represents only about 3 percent of the total travel in the Greater Rochester area. The number of people using public transportation on the weekends is approximately one third of the weekday use. Ridership has declined over the years. Reductions in transit service have responded to outside factors such as population declines in the central city, changes in land use, employment trends and the increase in automobile ownership and usage.

Highways - Greater Rochester has 755 lane- miles of multi-lane express highways. The Greater Rochester area enjoys one of the finest highway systems in the United States which reflects a substantive investment in transportation infrastructures. A great deal of this highway infrastructure investment was made by the community to foster economic development and to improve the quality of life for area residents. There are many major arterial roads that radiate from Downtown. This roadway pattern reflects the historical development trend associated with the settlement and industrialization of Rochester.

Future Congestion - Some of the arterial roads and expressways in the corridor could become over utilized by the year 2015. This means the highways would operate poorly with significant delays during peak travel periods. Consequently, existing transit bus service in the corridor, which is locked into the radial layout of the major streets in Rochester, will suffer serious degradation of service quality in terms of passenger travel times and schedule reliability.

Transportation planners and highway engineers recognize that roadway widening is not always the best cure for all of the capacity constraints in the corridor. The residential nature of the built environment in many areas would likely preclude highway widening. Improving transit service and developing public policies that encourage and support transit system usage could be a more appropriate strategy. Other cities throughout the United States have either built or are planning new light rail systems to alleviate congestion and to provide people with travel choices.

Throughout the world there are many cities smaller than Rochester that have constructed light rail systems. Many of these cities located in Europe simply retained and upgraded previously existing streetcar systems. No European cities were included in the comparison of other cities because the political and cultural environments affecting transit usage in these countries are significantly different from those that exist within the United States. Demographic and other characteristics of the City of Rochester were compared with American cities who have rail transit systems and other American cities that are planning to build new LRT systems.

The comparisons showed that cities with rail transit tended to be much larger in size than Rochester. In comparison to these cities, Rochester does not potentially appear to be able to sustain rail transit service because of the smaller population base. When comparisons were made to cities planning light rail transit, the City of Rochester fared much more positively because of the similarities to Rochester's size. The successful implementation of light rail transit largely depends on the socioeconomic and demographic characteristics of individual corridors and the proper placement of alignments and stations.

Ridership is greatly influenced by the individual choices of people living and working within easy access of rail stations. Therefore, comparisons of Rochester data at the corridor level of detail to other corridors in smaller cities provided a more meaningful evaluation of the potential feasibility of light rail in Rochester. The finding: the Charlotte-to-University of Rochester Corridor compares very favorably to the corridors reviewed among peer cities. Based on a micro-level comparison, the Charlotte-to-University of Rochester Corridor has population and employment characteristics very similar to other cities where LRT has been recommended. However, the future population growth of Rochester is below the average for these new-start cities.

The light rail system in Rochester is envisioned to consist of modern, electrically powered railcars. The electric power would be provided by local generating plants and distributed by means of an overhead wire system. The railcars, called light rail vehicles (LRV), would be quiet, non-polluting and provide a high level of passenger comfort when compared to today's motor buses. Stations would be simple in design and blend aesthetically with surrounding neighborhoods.

The light rail transit (LRT) alternative being examined links Ontario Beach Park in Charlotte to the Strong Hospital and University of Rochester campus. The LRT would serve Downtown Rochester with stations on both sides of the Genesee River. The alignment studied takes advantage of existing, under utilized railroad right-of-way and segments of the former Subway that crosses the Genesee River. An important feature of the Rochester LRT is the proposed station at Frontier Field near the High Falls and across the street from Kodak's World Headquarters complex. The LRT would be operating on Plymouth Avenue similar to modern European streetcars. This surface operation in the High Falls area would provide a visible and tangible reinforcement of alternative transportation choices for people visiting Downtown Rochester for entertainment and recreational use. For purposes of analysis, the alignment assumed a West Bank alignment south of Downtown which required another bridge across the Genesee River.

The Broad Street Subway represents an enormously valuable community asset only if it has a future use either as transportation infrastructure or some other community purpose.

Economic Value - The cost to replicate the construction of the subway from Brown Street to Court Street is estimated to be more than $ 120 million in today's dollars. This tangible economic value can be used as part of the contributed local share for capital grant funding.

Future Use - The alignment suggested and analyzed required the use of a relatively short segment of the Broad Street Subway -from Plymouth Avenue to Court Street. This permits the crossing of the Genesee River to serve Downtown commercial activities on both sides of the river. It was the consensus of the study team to operate at-grade on Plymouth Avenue and not to use the former Subway alignment. The visibility of surface operations in the Frontier Field area out weighed the distinct advantages of subway operation.

Recommendation - The northern segments of the subway west of Plymouth Avenue are not needed. The City should go forward with plans to permanently fill this portion of the tunnel. The southern segment could be used for a future LRT extension to the airport. This tunnel segment should not be foreclosed.

There are 22 potential stations located to serve areas thought to generate the highest potential ridership. These are depicted on the map at the end of the Executive Summary. Stations were sited at intersections with bus routes and major urban arterials or in proximity to high concentrations of residential or employment activity. Some locations were examined on the basis of potential for future high density development. Other prime candidates for station sites included potential park-and-ride sites. There are four primary stations that could see significant economic development and urban brownfield redevelopment. These stations include: No. 3 Riverview, No. 9 Frontier Field, No. 12 Lyell Avenue, and No, 22 Ontario Beach. The encouragement of development at these stations fits into the City of Rochester's Vision 2000 Master Plan.

There are several other means to access stations other than walking or riding a bicycle. They include:

Feeder Bus - Bus service will be modified to provide feeder service to the line. This supplemental service connects people who live or work beyond comfortable walking distances to LRT stations. This allows people living in city neighborhoods to have choices of transportation alternatives.

Park-and Ride - Sufficient park-and-ride facilities will be constructed at strategically located stations to permit easy access to stations for people who live outside of normal walking distances to the stations.

The system would have many amenities to enhance the enjoyment of the service and encourage ridership. The stations would be simple in design and construction, but made of high quality materials to ease maintenance. With lighted and landscaped parking lots, train annunciators and shelters for waiting, the LRT will be a beautiful addition to the urban landscape anchoring many neighborhoods and new urban villages. The streetcar track to be planned for will be imbedded in the roadway structure on Plymouth Avenue. This would be designed to mitigate any potential noise from streetcar operations. The LRT would be designed to be a good neighbor.

The LRT would operate from 6:00 AM to midnight 365 days a year. On weekdays, there would be 15-minute- service during the peak periods and 30-minute service the rest of the day. Peak periods would be from 6:00 AM to 9:00 AM and from 3:00 PM to 6:00 PM. On Saturday and Sundays, the trains would operate every 30 minutes. This schedule would provide nearly 470,000 car miles of service annually.

The total distance of the base alignment is 12.2 miles. The estimated total capital cost of the LRT is $ 275 million. This assumes a full build program. This assumption was made to ascertain the full economic impact of the LRT system. The LRT can be built in phases.

The development of estimated annual operating and maintenance (O&M) costs for the Rochester light rail transit system started with examining the incremental costs of providing rail service in Rochester. For planning purposes it was assumed that RGRTA would operate the service as an element of its regional transit system. Utilizing a cost build-up methodology, the estimated O&M costs were determined to be approximately $ 5.1 million annually. This equates to approximately $ 10.87 per car-mile. The national average cost per car-mile for light rail service is $ 19.35. The Rochester bus system operating cost is $ 5.60 per bus-mile. Heavier capital investment in LRT requires more maintenance staff. These costs on a per passenger basis are more directly comparable. The cost per LRT passenger would range between $ 1.59 for future year and $ 2.77 for base year ridership forecasts. The cost per passenger for existing RGRTA bus service is approximately $ 2.15.

The farebox recovery ratio measures the percentage of operating costs recovered by passenger fares. The LRT would generate $ 2.7 million in annual fares. The LRT farebox recovery ratio would be 53 percent. Rochester's bus system currently has a farebox recovery ratio of 30 percent. The LRT would generate more fares as a percentage of operating costs than the current bus system. The difference between fares collected and operating expenses would require additional annual public subsidies.

-Predicting ridership is not a precise science despite the use of sophisticated techniques. The process of estimating likely ridership on a new (or for that matter existing) public transportation system is a two-step process consisting of:

In practice, the process is very complex because the total travel market is composed of a series of sub-markets or market segments. Because of differences in the characteristics of trip makers and/or the trips being made, people can be expected to react differently to the availability of a new light rail transit service.

For this study, the GTC provided a total demand trip table for trips to and from various areas of the region. A sophisticated mode choice model developed for Hartford, Connecticut was modified for the Rochester region based on surveys of loco conditions. The mode choice model was used to determine the probability of a person choosing either auto or transit to make a work trip. Based on the travel mode choices indicated for work trips, the mode choice model was then used to estimate what travel mode choices area residents would make for their non-work trips. Estimates of special events ridership were based on assumptions and empirical data collected LRT operations in St. Louis and Cleveland.

Because the purpose of this study was to estimate potential rail ridership for a specific rail line, the market areas were defined in relationship to the proposed rail line. Figure A at the end of the Executive Summary illustrates the selected market areas. The market areas were defined for each potential station. Most stations have two market areas representing different access distances to the station:

• A 1/3 -mile catchment area representing the market area within walking distance to the station.

• A 2-mile catchment area representing the market area within non-walking access to the station.

The catchment areas did not cross over natural or manmade obstacles such as the Genesee River or a freeway unless a bridge was available. Sensitivity tests were also performed on the resulting numbers to estimate how forecasts would change in response to changes in major assumptions used to prepare the forecast. Special markets such as University of Rochester students and special events were also taken into consideration.

Assuming no changes in existing public policies affecting Downtown parking, landuse and zoning, ridership on the LRT would be approximately 6,400 average daily riders. This figure includes estimated annual special events ridership averaged on a daily basis. Although the ridership forecast appears to be disappointing at first glance, there are several important characteristics of the baseline forecast to consider. First, one must recognize the inherent limitations of travel demand models. The baseline ridership analyses completed in this study consider transportation and mobility impacts of only one alignment. The existing conditions in Rochester and the selected alignment limits ridership potential. Current land use and development patterns, prevailing gasoline prices and existing parking policies provide the environmental context and range of choices. Sensitivity tests utilized to examine a range of light rail transit forecasts based upon changes to the baseline assumptions revealed that significant ridership increases could be encouraged if public policy initiatives were instituted to create a transit supportive environment.

The table above illustrates a comparison of ridership among selected existing and proposed light rail transit lines and the Rochester LRT line. The base year forecast represents LRT ridership based entirely on existing environmental and public policy conditions. However, as public policy changes are implemented, ridership increases. The accumulative effect of all the changes increases LRT ridership to a level of more than 14,000 average daily riders. This level of ridership compares favorably to several existing and proposed LRT systems. None of these estimates include potential riders that could use the LRT to travel from Downtown stations to the High Falls area during lunch time. Today these trips are not made because there is no convenient transportation linkage between the High Falls area and East Downtown. Lunch time "peak periods" have increased ridership on several rail systems throughout the United States. This could occur in Rochester because the LRT would make lunch time trips possible. This could spur more development in the High Falls area.

An investment in the LRT is economically feasible if the local economy is better off with it than without it. For purposes of this study, economic development was definedas an increase in the general prosperity and incomes of people and institutions within the City of Rochester. Economic development occurs in either of two ways:

• economic output increases requiring more resources and employment; or

• current output is achieved at less total cost.

If the LRT either enables the attraction of new and expanded businesses or lowers the cost of production, then the LRT investment has aided the economic development process. The study suggests that the proposed LRT will do both. However, the magnitude of the economic impacts must be greater than the cost of building, operating and maintaining the LRT before it can be judged economically feasible.

The REMI economic model was utilized to estimate the benefits of constructing, operating and maintaining the LRT system. The REMI model is a multi-regional, dynamic, econometric and demographic forecasting model that estimates regional and national effects based on changes of governmental policies or infrastructure investments. The number of jobs created, gross regional product, personal income and inward migration (reversing the sprawl) attributable to the LRT system was forecasted.

The obvious beneficiaries of implementing an LRT system are the people who choose to use LRT. For them, LRT offers service attributes (travel time, fare, accessibility) that they perceive to be superior to alternative modes (ride alone, share ride, or no trip at all). By choosing LRT, travelers demonstrate that they are deriving direct benefit equal to or greater than the total costs (fare, time, inconvenience) of making the journey. However, LRT benefits more than just the users of the system. There are many indirect benefits that accrue to the entire community. These include reductions of accidents on less congested roadways, improved air quality, reduced urban sprawl, job creation, travel time savings for highway users and an increased pride in the community.

Direct Benefits - People who use the LRT will benefit directly from improved accessibility to various destinations throughout the community, greater comfort and convenience. The LRT would become a direct link between Ontario Beach Park and Downtown for both residents and visitors to the city. The High Falls and Frontier Field area near Kodak Headquarters will directly benefit from improved accessibility.

Indirect Benefits - People who don't use LRT would also benefit from its construction. For example, accidents associated with driving comprise a significant cost to the economy. Loss of life, personal injury, medical costs, property damage and human suffering represent declines in economic productivity, time away from work, and consumption of scarce economic resources. There is an accident risk associated with any type of travel, regardless of the mode. However, auto use has a greater accident risk than LRT. By diverting trip makers from the highway to LRT, the number of accidents would decline. Highway users benefit from travel time savings as highways become less congested.

Economic Benefit/Cost Analysis

The intent of the analysis was not only to help determine whether or not light rail transit has an economic rationale, but to determine at what capital cost level it is economically feasible from the perspective of the City of Rochester. Consequently, the benefits/costs were tested for various assumptions and scenarios.

Benefits - The key findings with regard to light rail transit benefits can be summarized:

• Rochester will create nearly $183 million in discounted benefits if the light rail transit is built.

• Of the benefits created, 69 percent is due to "economic development" in Rochester.

• Benefits accruing to light rail transit users comprise only 2.3 percent of the total benefits. The real benefit of the light rail transit line appears to be what it could do for the economy, not what it will do for the riders of the system.

• The economic impact of the LRT adds over $ 54 million to gross regional product during construction and adds over $ 7 million annually to gross regional product during its operational life.

Total Economic Impact

• Nearly 60 percent of the economic benefit is due to the act of spending federal and state money in Rochester (to build the light rail transit system). While this is a benefit to Rochester, it is nevertheless a cost to the state and federal taxpayers.

• 1,068 construction-related jobs with a personal income in excess of $ 34 million are created when the LRT is built. Approximately 111 permanent jobs are created with an annual personal income of more than $ 9.9 million. This does not count the O&M jobs created by the LRT itself.

• More than 390 people move back into the City of Rochester. This is the equivalent of a new housing development with more than 150 new houses.

Costs - It was assumed that the City of Rochester will itself cover the annual light rail transit operating deficit which is assumed to be $ 2.4 million per year. The initial capital expenditure of $ 275 million would be spent over several years for design and construction. What constitutes a cost and what constitutes an economic benefit depends on perspective. In this instance, only those funds spent by Rochester constituted 'costs." Funds received from federal and state sources were viewed as an economic development stimulus to the region. These funds did not constitute a cost" for Rochester.

The light rail transit system creates economic value for the people of Rochester if the state and federal government participate in funding the design and construction of the system. The level of state and federal participation must be greater than 57 percent of the total cost of the project. If the state and federal governments pay up to 80 percent of the cost of the LRT system, the net present value of economic benefits is greater than $ 75 million with a benefit-cost ratio of 1.89. Moreover, if construction of the LRT were to be phased, initial capital expenditures would be reduced and the economic impact of the construction would be stretched over a longer period of time.

The City of Rochester has been engaged in a series of planning efforts aimed at revitalizing the core city. These efforts include an update of the Civic Vision 2000 Comprehensive Plan entitled Rochester 2010. An Urban Renaissance and an update to the Local Waterfront Revitalization Program. The draft material for each of these plans contains initiatives that would be more viable with the existence of a light rail transit system in Rochester.

One of the major new initiatives of Rochester 201 0: An Urban Renaissance calls for the creation of urban villages. This concept is best described as a strategy to create identifiable, vital neighborhoods that are dense, mixed-use and pedestrian oriented. LRT could support this community-wide development by stimulating redevelopment in station market areas. Light rail stations could provide the needed focal point to anchor future public and private investment within these defined urban villages. The entire light rail system would link these walkable, human-scale neighborhoods to each other and to regional attractions such as Frontier Field, High Falls, the Arena at the War Memorial and Lake Ontario.

A second initiative derived from the Local Waterfront Revitalization Program is to develop Rochester into a regional tourist destination. LRT would provide the needed linkage between the attractions located along the Riverfront and in the High Falls/Downtown areas. People unfamiliar with the local roadway system would be comforted by a safe, secure and reliable rail transit service. Many people won't use local bus services because they lack the knowledge of knowing where the bus is taking them. The visible infrastructure provided by a fixed-rail system relieves people of this worry. The tracks lead them to their destination and back 'home" again.

LRT improves property values and provides higher rates of returns to those who build new or renovate buildings located at or within walking distance of LRT stations. The average property value increase near stations is in excess of 6 percent when compared to similar property located further

from the station. Absorption rates are higher and vacancy rates are lower for commercial properties near stations.

Economic development is more likely to occur in areas targeted for investment through public policy initiatives that provide investment incentives for developers. It is estimated that most of the commercial and residential development would be stimulated near the Riverfront and Frontier Field/High Falls stations. Re-development of the Lyell Avenue commercial area and residential development near the Riverview station which is across the Genesee River from the University of Rochester is also likely. The mixed-use development potential is highest in the Frontier Field area as depicted in the following illustration.

• The LRT provides a positive economic return to the City of Rochester if the state and federal government contribute more than 57 percent of the total capital cost.

• The demographic characteristics in the corridor studied could support an initial operating segment of the light rail transit line. If the community could achieve consensus on a combination of transit supportive public policy initiatives, the benefits of LRT would be greater.

• Other public policy initiatives that promote relocation to the central city, such as improved public schools and brownfield redevelopment incentives would add to the central city population. Increased population density would greatly enhance transit ridership potential.

• The proposed rail line should be located so the number of people living within easy walking distances of potential rail stations are maximized. The alignment should be selected on the basis of objective technical analysis.

• The southern-most segment of the Broad Street Subway tunnel west of Plymouth Avenue to the R&S portal could be used for possible future LRT extensions to the Airport from Downtown. Future use of this segment of tunnel should not be foreclosed.

The following recommendations are respectfully submitted:

• Further study of transit system improvements, especially light rail transit investments, be conducted on a system wide network basis. This would require developing a network-based transportation model that would permit analysis of changes to the overall transportation system. Alternative modes, network configurations and changes in policy variables can be modeled and the results reported by any number of useful categories. These comprehensive travel demand models are generally needed to conduct multimodal major investment studies.

• A comprehensive analysis of the downtown transportation system should be conducted. This would include an examination of pedestrian ways, roadway design and parking supply and demand in the central business district. The analysis should examine the impact of various parking and zoning ordinances on transit ridership.

• The City of Rochester in collaboration with the GTC, Rochester-Genesee Transportation Authority, Monroe County and NYSDOT commence a major investment study of the North-South Corridor.

• A phased program of LRT development should be investigated as part of the major investment study. This would include examining the feasibility of an initial operating segment that would link Charlotte with Downtown. This option could include vintage trolley operation similar to Memphis, Tennessee. This option could ignite development in the Lake Ontario Beach, Frontier Field and High Falls area.